Live Oak Bancshares Inc (LOB) 2024 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Q2 2024 Live Oak Bancshares earnings conference call. (Operator Instructions) This call is being recorded on Thursday, July 25, 2024.

早安，女士們、先生們，歡迎參加 Live Oak Bancshares 2024 年第二季財報電話會議。（操作員說明）此通話錄音時間為 2024 年 7 月 25 日星期四。

I would now like to turn the conference over to Greg Seward, General Counsel and Chief Risk Officer. Please go ahead.

我現在想將會議交給總法律顧問兼首席風險長 Greg Seward。請繼續。

Thank you. Good morning, everyone. Welcome to Live Oak's second quarter 2024 earnings conference call. We are webcasting live over the internet, and this call is being recorded. To access the call over the internet and review the presentation materials that we will reference on the call. Please visit our website at investor.liveoakmercbank.com and go to the Events and Presentations tab for supporting materials. Our second quarter earnings release is also available on our website.

謝謝。大家早安。歡迎參加 Live Oak 2024 年第二季財報電話會議。我們正在透過網路進行網路直播，並且正在對這次通話進行錄音。透過網路存取電話會議並查看我們將在電話會議中參考的簡報資料。請造訪我們的網站 Investor.liveoakmercbank.com 並前往「活動和演示」標籤以取得支援資料。我們的第二季收益發布也可在我們的網站上取得。

Before we get started, I'd like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties. Factors that may cause actual results to differ materially from our expectations are detailed in the materials accompanying this call and in our SEC filings.

在我們開始之前，我想提醒您，我們可能在今天的電話會議中做出前瞻性聲明，這些聲明存在風險和不確定性。本次電話會議隨附的資料和我們向 SEC 提交的文件中詳細介紹了可能導致實際結果與我們的預期產生重大差異的因素。

We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise after the date of today's call. Information about any non-GAAP financial measures referenced including reconciliation of those measures to GAAP measures can also be found in our SEC filings and in the presentation materials.

我們不承諾更新前瞻性陳述以反映今天電話會議之後可能出現的情況或事件的影響。有關所引用的任何非 GAAP 財務措施的信息，包括這些措施與 GAAP 措施的調節，也可以在我們向 SEC 提交的文件和演示材料中找到。

I will now turn the call over to Chip Mahan, our Chairman and Chief Executive Officer.

我現在將把電話轉給我們的董事長兼執行長 Chip Mahan。

Good morning, everyone. And we're excited to tell you about our second quarter performance. Firstly, to use a baseball analogy, I'm instituting a line of change. Appropriately, BJ Losch, our President, will be our leadoff batter today. Walt Phifer, our CFO, will be on deck and even more appropriately, I will be in the hole to wrap things up before the Q&A. BJ?

大家早安。我們很高興向您介紹我們第二季的業績。首先，用棒球來比喻，我正在製定一條改變線。我們的主席 BJ Losch 將成為我們今天的首發擊球手。我們的財務長 Walt Phifer 將出席，更合適的是，我將在問答之前總結事情。北京？

Thanks, Chip. Good morning, everybody. Let's start on slide 4 and 5 together. Second quarter results, as I hope you've been able to take a look at are reflective of significant efforts by everyone across the company here at Live Oak to grow our business profitably and very importantly, control what we can control.

謝謝，奇普。大家早安。讓我們一起從幻燈片 4 和 5 開始。正如我希望您能夠看到的那樣，第二季度的業績反映了 Live Oak 公司每個人為實現業務盈利增長所做的巨大努力，而且非常重要的是，控制我們能控制的事情。

And it showed up this quarter, certainly in strong EPS and PPNR on both a reported and adjusted basis in healthy loan and deposit growth, higher production and activity and continued credit quality. That's what we'll demonstrate over the next several minutes. Momentum is building across numerous parts of the company.

本季這一點在報告和調整後的穩健的貸款和存款成長、更高的生產和活動以及持續的信貸品質等方面體現在強勁的每股收益和 PPNR 上。這就是我們將在接下來的幾分鐘內演示的內容。公司的許多部門正在形成勢頭。

On the lending front, our teams delivered exceptional production and balance sheet growth results and healthy spreads in the quarter and get approvals are up 30% from this time last year. And pipelines are still near all-time highs, both of which bode well for continued growth.

在貸款方面，我們的團隊在本季度取得了出色的生產和資產負債表增長成果以及健康的利差，獲得的批准量比去年同期增加了 30%。管道數量仍接近歷史最高水平，這兩者都是持續增長的好兆頭。

As you can see on slide 6, our focus on the basics growing revenues faster than expenses, while still investing in good costs such as new lenders', verticals, products and technology has resulted in exponential PPNR growth, up 33% on revenue growth of 11% on an adjusted basis since Q2 of last year.

正如您在投影片6 中看到的，我們對基礎知識的關注使收入成長快於支出，同時仍投資於良好的成本，例如新的貸方、垂直行業、產品和技術，這導致了PPNR 呈指數等級成長，比營收成長了33%。

Our credit quality continues to be a hallmark. The result as you can see on slide 7 is very healthy reserve levels, low levels of charge-offs and significant reserve building well in excess of charge-offs. Importantly, with our disciplined credit box, deep understanding of the government guaranteed lending process and an unmatched in debt servicing and watch list process, results in an inability to get ahead of borrower stress.

我們的信用品質仍然是我們的標誌。正如您在幻燈片 7 中看到的，結果是非常健康的準備金水平、低水平的沖銷以及顯著的準備金建設遠遠超過沖銷。重要的是，憑藉我們嚴格的信用箱、對政府擔保貸款流程的深入了解以及無與倫比的償債和觀察名單流程，導致我們無法應對借款人的壓力。

And as we've discussed previously, we are proactive with provisioning for growth for changes in portfolio performance and for impairments of specific loans when warranted. So we are well reserved if charge-offs occur.

正如我們之前所討論的，我們會積極主動地為投資組合績效的變化和特定貸款的減損準備金。因此，如果發生沖銷，我們會做好準備。

Turning to slide 8. While I'm certainly pleased with this quarter's results as a growth company, I'm much more excited about where we're headed. Checking balances, which were immaterial six months ago, crested $125 million in the quarter and continued to build our new small dollars SBA lending efforts ramping up quickly and will be a meaningful contributor to our results over time.

轉到投影片 8。作為一家成長型公司，我當然對本季的業績感到滿意，但我對我們的發展方向更感到興奮。六個月前還不算重要的支票餘額在本季度達到了1.25 億美元，並繼續建立我們新的小額SBA 貸款工作，並迅速增加，隨著時間的推移，將為我們的業績做出有意義的貢獻。

Our brand and reputation continues to attract and retain the highest quality talent, and we continue to heavily invest in the future through innovative technology and partnerships. The flywheel has definitely turned in at Live Oak that our ongoing opportunities to serve more of America's small businesses are vast.

我們的品牌和聲譽持續吸引和留住最優質的人才，我們繼續透過創新技術和合作夥伴關係對未來進行大力投資。Live Oak 的飛輪無疑已經轉向，我們為更多美國小型企業提供持續服務的機會是巨大的。

So with a big thank you to all Live Oakers and our customers for a strong quarter. I'll turn it over to Walt for some more highlights.

衷心感謝所有 Live Oakers 和我們的客戶，他們在本季表現強勁。我會將其交給 Walt 以獲取更多亮點。

Thank you, BJ. Good morning, everyone. As BJ just provided a high-level overview of the quarter, I'll spend the next few pages focus some additional context on trends related to our balance sheet growth, key revenue and expense components and credit.

謝謝你，BJ。大家早安。由於 BJ 剛剛提供了本季度的高級概述，因此我將在接下來的幾頁中重點介紹與我們的資產負債表增長、關鍵收入和費用組成部分以及信貸相關的趨勢的其他背景資訊。

Slide 11 highlights our loan originations by vertical and business unit. As BJ mentioned, we had a strong quarter of loan originations in Q2 with approximately $1.2 billion of loans closed. This is 45% higher than Q1 and is our second largest quarter bank history. Two items to note on this page. The first is on the bubble chart on the left, approximately 60% of our verticals have had year-to-date loan origination volume at or above prior year levels.

投影片 11 按垂直領域和業務部門重點介紹了我們的貸款發放。正如 BJ 所提到的，我們第二季的貸款發放強勁，已結清約 12 億美元的貸款。這比第一季高出 45%，是我們銀行史上第二大季度。此頁有兩點要注意。第一個是左側的氣泡圖，我們大約 60% 的垂直行業的年初至今的貸款發放量等於或高於去年的水平。

The second is the strong performance by our SBB and specialty business units in Q2 2024 compared to Q2 2023. You can see this on the bottom right hand side of the page as of Q2 2024 originations for small business banking and specialty are up 30% and 88% year over year, respectively.

其次是我們的 SBB 和特種業務部門在 2024 年第二季與 2023 年第二季相比表現強勁。您可以在頁面右下角看到這一點，截至 2024 年第二季度，小型企業銀行業務和專業銀行業務的起源比去年同期分別成長 30% 和 88%。

Our energy and infrastructure business unit has had a slow start in the first half of 2024 due to delays and loan closing timeline. Yet that team has closed approximately $80 million of loans thus far in Q3, and the pipeline remains strong.

由於延誤和貸款關閉時間表，我們的能源和基礎設施業務部門在 2024 年上半年開局緩慢。然而，該團隊迄今在第三季已結清了約 8,000 萬美元的貸款，並且管道仍然強勁。

Slide 12 illustrates the strength and consistency of our balance sheet growth over the past five quarters. While many banks across the industry are seeing minimal, if any loan growth, our loan balances are up 3% linked quarter and 14% compared to prior year. And this group is net of our loan sales and participations activity.

投影片 12 說明了過去五個季度我們資產負債表成長的強度和一致性。儘管整個行業的許多銀行的貸款增長甚微（如果有的話），但我們的貸款餘額環比增長了 3%，與上年相比增長了 14%。該組不包括我們的貸款銷售和參與活動。

Deposit growth is fueled by our customer deposit platform, specifically, our business deposits which were up 8% linked quarter and 29% compared to prior year. This is an outstanding story given how competitive the customer deposit market is today with many banks across the industry struggling to grow or even maintain their deposit base, especially their noninterest-bearing deposits.

存款成長是由我們的客戶存款平台推動的，特別是我們的商業存款，與上一季相比成長了 8%，與去年同期相比成長了 29%。鑑於當今客戶存款市場的競爭如此激烈，整個行業的許多銀行都在努力擴大甚至維持其存款基礎，尤其是無息存款，這是一個引人注目的故事。

Slide 13 gives a little more detail on our quarter-over-quarter loan growth by component. The key takeaway from this page is that prior to our typical sales and participations activities, our loan portfolio growth was 7%, that's right, 7% linked quarter as new fully funding originations and construction loans continued to drive balanced growth.

投影片 13 按組成部分詳細介紹了我們的季度環比貸款成長。此頁的關鍵要點是，在我們典型的銷售和參與活動之前，我們的貸款組合增長率為7%，沒錯，季度增長率為7%，因為新的全額融資來源和建設貸款繼續推動平衡增長。

Slide 14, unpacked for net interest income, NIM and yield trends. Our net interest income increased 1% linked quarter and up 8% compared to Q2 2023, which is primarily driven by our loan growth. Our net interest margin compressed 5 basis points quarter over quarter due to a full quarter of interest expense relate to a $100 million term loan added at the end of Q1 for growth capital of the bank. After this borrowing, our net interest margin would have been flat quarter over quarter. That's a great outcome.

投影片 14，對淨利息收入、淨利差和收益率趨勢進行了分析。我們的淨利息收入較上季成長 1%，與 2023 年第二季相比成長 8%，這主要是由我們的貸款成長所推動的。我們的淨利差環比壓縮了 5 個基點，因為整個季度的利息支出與第一季末為銀行成長資本增加的 1 億美元定期貸款有關。此次借款後，我們的淨利差將與上季持平。這是一個很棒的結果。

Now there are things we can control and things that we can't control some things we can't control or when the Fed will reduce rates and by how much, the competitiveness of the deposit market or other macroeconomic and political impact. Now these type of things will certainly have impact on the flows of margin trajectory, yet we feel really good about the things we can control, all of which will help our performance going forward.

現在有些事情是我們可以控制的，有些事情是我們無法控制的，有些事情是我們無法控制的，或者聯準會何時降息以及降息多少，存款市場的競爭力或其他宏觀經濟和政治影響。現在，這些類型的事情肯定會對利潤軌蹟的流動產生影響，但我們對我們可以控制的事情感覺非常好，所有這些都將有助於我們未來的業績。

As I just mentioned, our loan growth momentum and pipeline remains robust. Growth will be an essential component of our net interest income and NIM expansion. We continue to demonstrate good pricing discipline on new loan originations averaging prime plus 60 basis points or 9.1% in Q2, thus remain accretive to our loan portfolio yield, which currently averages 7.79% and our increase in cost of funds from Q2 2023 has largely been driven by maturing CDs renewing into a higher price offering.

正如我剛才提到的，我們的貸款成長勢頭和管道仍然強勁。成長將是我們淨利息收入和淨利差擴張的重要組成部分。我們繼續對新貸款發放表現出良好的定價紀律，第二季度平均優質貸款加60 個基點或9.1%，從而繼續增加我們的貸款組合收益率，目前平均為7.79%，並且自2023 年第二季度以來，我們的資金成本成長在很大程度上是受到成熟 CD 更新為更高價格產品的推動。

You can see in the middle of the page, the substantial headwinds this is generated in 2023 and 2024, as that portfolio of approximately 26% of our deposits. The fact that we have been able to maintain our margin over the last five quarters with this level of volume and pricing at those significant increases is a great outcome.

您可以在頁面中間看到，這種情況在 2023 年和 2024 年會產生巨大的阻力，因為該投資組合約占我們存款的 26%。事實上，在過去五個季度中，我們能夠在銷售和價格大幅成長的情況下保持利潤率，這是一個很好的結果。

These headwinds have slowed in Q2 2024, we expect our CD portfolio repricing to provide tailwinds over time as the Fed reduces rates. Quarter over quarter fee income is outlined on slide 15. We sold $250 million in Q2 2024 for an average premium of 6%, largely in line with Q2 2023.

這些不利因素在 2024 年第二季度有所放緩，隨著聯準會降息，我們預計我們的 CD 投資組合重新定價將隨著時間的推移提供順風。投影片 15 概述了各季度的費用收入。我們在 2024 年第二季出售了 2.5 億美元，平均溢價為 6%，與 2023 年第二季基本一致。

Two more things on our Q2 sales volume. We sold our first batch of small loan SBA 7(a) to only $9 million in loans sold for an average premium of 11%. We continue to be excited about the profitability opportunity on small loan front.

關於我們第二季銷量的還有兩件事。我們將第一批小額貸款 SBA 7(a) 出售給僅 900 萬美元的貸款，平均溢價為 11%。我們仍然對小額貸款方面的獲利機會感到興奮。

The other item to note is given the improvement in the secondary market in general, we were also able to sell approximately $40 million of seasoned loans that were previously underwater, another great outcome for the quarter.

另一件值得注意的事情是，考慮到二級市場的整體改善，我們還能夠出售約 4000 萬美元的以前處於水下的成熟貸款，這是本季度的另一個偉大成果。

Turning to expenses on slide 16, our Q2 2024 expenses of $78 million were flat linked quarter and increased 3% compared to Q2 2023. Our teams have shown great expense discipline over the last year, even while adding 20 growth-oriented FTEs in our lending verticals, five FTEs and our treasury management department to support our business checking initiative and continuing to invest in the technology side of the house.

轉向幻燈片 16 上的支出，我們 2024 年第二季度的支出為 7800 萬美元，與季度持平，與 2023 年第二季度相比增長了 3%。去年，我們的團隊表現出了嚴格的費用紀律，同時在貸款垂直領域增加了20 個以成長為導向的FTE、5 個FTE 和我們的財務管理部門，以支持我們的業務檢查計劃並繼續投資於技術方面。

As we have been over the last five quarters we remain focused on adding good cost relief while continuing to identify expense efficiencies where possible. So we can continue the positive PPNR trends that BJ just spoke on.

正如我們過去五個季度所做的那樣，我們仍然專注於增加良好的成本緩解，同時繼續盡可能提高費用效率。因此，我們可以繼續 BJ 剛才談到的正面的 PPNR 趨勢。

Key credit trends include on slide 17, we continue to be pleased with the performance of our credit portfolio in what's been a challenging environment. Our Q2 $12 million provision was primarily due to loan growth, what we refer to as good provision and our linked quarter credit trends are generally favorable with non-accruals and classified asset ratio is trending downwards.

主要信貸趨勢包括投影片 17 所示，我們仍然對信貸投資組合在充滿挑戰的環境中的表現感到滿意。我們第二季 1,200 萬美元的撥備主要是由於貸款成長，我們稱之為良好的撥備，我們的相關季度信貸趨勢總體上有利，非應計項目和分類資產比率呈下降趨勢。

As you can see in the top left graph our over 30 day past dues roughly quarter. This was largely resolved two loans with a total of $15 million of guaranteed balances. We are currently unconcerned about further deterioration of those loans at this time. Given our highly attractive portfolio characteristics and our significant credit monitoring activity as outlined in our last call, we remain confident in our reserve and the portfolio's credit strengths.

正如您在左上方圖表中看到的那樣，我們超過 30 天的逾期費用約為四分之一。這基本上解決了兩筆貸款，擔保餘額總計 1500 萬美元。我們目前並不擔心這些貸款的進一步惡化。鑑於我們極具吸引力的投資組合特徵以及上次電話會議中概述的重大信用監控活動，我們對我們的儲備和投資組合的信用優勢仍然充滿信心。

Lastly, slide 18 highlights our capital strength, which remains positioned well to support our growth going forward. Overall, as BJ said, it was a fantastic quarter. We were very pleased with the outcome, and we are looking forward to the continued momentum.

最後，投影片 18 強調了我們的資本實力，它仍然能夠很好地支持我們未來的成長。總的來說，正如 BJ 所說，這是一個非常棒的季度。我們對結果感到非常滿意，並期待繼續保持動力。

I will now turn it over to Chip to add his final comments before Q&A.

現在我將把它交給 Chip 在問答之前添加他的最終評論。

Thanks, Walt. Thanks, BJ. How do you hold us accountable right? I have been thinking about that and reflecting on the last several years. And as I look back, yes, PPP interesting, we generated $80 million of fee income. Yes, we invested $13 million in Finxact and got back to $135 million and we've sold the business to Fiserv.

謝謝，沃爾特。謝謝，BJ。您如何讓我們負責？過去幾年我一直在思考這個問題並進行反思。當我回顧過去時，是的，PPP 很有趣，我們產生了 8000 萬美元的費用收入。是的，我們向 Finxact 投資了 1,300 萬美元，後來又回到了 1.35 億美元，並將業務賣給了 Fiserv。

Yes, we invested about $3 million or $4 million in pay rails and got back about $35 million. And then we invested that money. We were a bit behind. Renato today has 130 folks we needed to beef up cyber. We needed to beef up data. He is constantly extending our moat reference to the express products more to come there.

是的，我們在薪資方面投資了大約 300 萬或 400 萬美元，並收回了大約 3500 萬美元。然後我們投資了這筆錢。我們有點落後了。Renato 今天有 130 名人員，我們需要加強網路建置。我們需要加強數據。他不斷地將我們的護城河參考擴展到更多的快遞產品。

So where does that actually leave us and how do you -- how should you hold us accountable? Bank accounts create in my judgment, a lot of mumbo-jumbo. For instance, typical list of adjustments to revenues an EPPP related impacts servicing asset revals, loans accounted for under fair value option impacts any one-time gains from sale of fixed assets.

那麼，這實際上給我們留下了什麼？根據我的判斷，銀行帳戶會產生大量的胡言亂語。例如，與 EPPP 相關的典型收入調整清單會影響資產重整服務，公允價值選擇項下的貸款會影響固定資產出售的一次性收益。

Like this quarter, we sold an airplane net a gain of $6 million or $7 million. Any gains from investment portfolio sales, fintech investment activities, valuations and realized gains and losses from sales, non-cash gains and losses from investments in venture funds.

就像本季一樣，我們出售一架飛機，淨收益為 600 萬美元或 700 萬美元。投資組合銷售、金融科技投資活動、估值和銷售實現的損益、創投基金投資的非現金損益的任何收益。

Now let's move to the expense side, non-routine employee bonuses related to fintech gains, impairments or losses from sales of long-term fixed assets, renewable energy tax, credit impairments, and wrapping up with litigation and settlement expenses.

現在讓我們轉向費用方面，與金融科技收益、長期固定資產銷售減損或損失、再生能源稅、信用減損以及訴訟和和解費用相關的非常規員工獎金。

You need to take all that noise out to see how this business is doing. So I thought it would be interesting to go back 12 months. So from 6/30/2023 to 6/30/2024. What were the operating earnings for this business with all that noise out? $174 million. What was it the previous 12 months, 6/30/2022 to 6/30/2023, $137 million. I don't know any other bank that increases operating earnings, 27% year over year.

您需要消除所有噪音才能了解該業務的運作情況。所以我覺得回到 12 個月前會很有趣。所以從 6/30/2023 到 6/30/2024。剔除這些噪音後，該企業的營業收入是多少？1.74 億美元。前 12 個月（2022 年 6 月 30 日至 2023 年 6 月 30 日）是多少，1.37 億美元。我不知道還有哪家銀行營業利潤年增 27%。

And to me and lastly, the most exciting thing, BJ alluded to the wonderful origination quarter that we had, which matched our previous high which was Q4 of 2022. We left Q4 of 2022 with a pipeline of $2.4 billion. Today, it's $3.6 billion so those good costs and those revenue producers that have finally learned the Live Oak way are out there generating high-quality loans.

對我來說，最後最令人興奮的事情是，BJ 提到了我們擁有的精彩的創始季度，這與我們之前的高點（即 2022 年第四季度）相匹配。到 2022 年第四季度，我們的儲備金額為 24 億美元。如今，這一數字已達到 36 億美元，因此那些良好的成本和那些最終學會了 Live Oak 方式的收入創造者正在產生高品質的貸款。

And with that, we will be happy to entertain questions.

因此，我們將很樂意回答問題。

(Operator Instructions)

（操作員說明）

David Feaster, Raymond James.

大衛‧菲斯特，雷蒙德‧詹姆斯。

Hey, good morning, everybody.

嘿，大家早安。

Hey, David.

嘿，大衛。

Good morning, David.

早安，大衛。

Maybe just following up on kind of Chip, your last commentary, just talking about the origination strength in the (inaudible). Could you talk about how much of the strength that you're seeing is from maybe improving demand versus share gains and just kind of the composition of the line and where you're seeing the most opportunities today?

也許只是跟進你最後的評論，只是談論晶片的起源力量（聽不清楚）。您能談談您所看到的力量有多少來自於需求的改善與份額的成長，以及產品線的組成以及您今天看到的機會最多的地方嗎？

Yeah. I'll start, David. Good morning. It's BJ. We're seeing it across the board, which feels really, really good. First quarter was a little bit lighter than what we would have wanted even though pipelines were significant and approvals were significant.

是的。我要開始了，大衛。早安.是北京。我們全面看到了這一點，感覺真的非常好。儘管管道數量很大且批准數量很大，但第一季的情況比我們想要的要淡一些。

We didn't see the pull through that we had wanted in the first quarter. Not only did that come through in the second, but as Chip talked about, as I talked about, the pipelines going forward, most importantly, are still healthy.

我們在第一季沒有看到我們想要的結果。這不僅在第二次實現，而且正如奇普所說，正如我所說，最重要的是，未來的管道仍然健康。

So I think it's a combination of a few things. One is certainly our lenders are actually at what they do. They're constantly talking to customers their referral sources activities and they want to win and they want to do more loans and do more business for our customers. So obviously, that is priority number one.

所以我認為這是幾件事的結合。一是我們的貸方確實在做他們所做的事情。他們不斷地與客戶談論他們的推薦來源活動，他們希望獲勝，他們希望為我們的客戶提供更多貸款並做更多業務。顯然，這是第一要務。

I think number two, though, is with the Fed making more and more noise about rates kind of being at their peak for sure and inevitably coming down sooner rather than later, I think we're starting to see more optimism and more activities -- more activity across our different verticals such that buyers and sellers are more willing to come together and get deals done. So we're really pleased about that.

不過，我認為第二點是，隨著聯準會越來越多地發出關於利率肯定處於峰值並且不可避免地會盡快下降的聲音，我認為我們開始看到更多的樂觀情緒和更多的活動— —我們不同垂直領域的活動越來越多，讓買家和賣家更願意走到一起並完成交易。所以我們對此感到非常高興。

One more thing I'll mention I think Walt maybe hit on it a little bit. Our small business banking verticals and our specialty finance business have had a great quarter and our energy and infrastructure business was down from last year. They had a lighter first quarter as well but their pipeline is significant and they've closed almost $100 million in the first month and a half of this quarter.

我還要提一件事，我想沃特可能突然想到了這一點。我們的小型企業銀行垂直業務和專業金融業務季度表現出色，但我們的能源和基礎設施業務較去年下降。他們的第一季業績也比較清淡，但他們的通路規模很大，在本季的第一個半月內就關閉了近 1 億美元。

So the pipeline there, the pipeline is growing so when we get E&I back where we know it can be along with the great performance of our other two businesses, we're really -- feeling really good about the outlook.

因此，那裡的管道正在增長，因此當我們讓 E&I 回到我們知道它可以與我們其他兩項業務的出色業績一起的水平時，我們真的對前景感到非常好。

That's great. And maybe touch on the expense side. You guys have done a great job controlling expenses. Could you just touch on kind of what you guys are seeing? I know you're continually investing, but are we just being a bit more discerning with growth projects or we at the point where we can just scale up and leverage the existing infrastructure that you've already built, just kind of curious how you think about how does that play into the patient expense growth as we go forward? Sounds like it should be slowing.

那太棒了。也許還牽涉到費用方面。你們在控制開支方面做得很好。能談談你們所看到的情況嗎？我知道您正在不斷投資，但我們只是對成長項目更加挑剔，還是我們可以擴大規模並利用您已經建立的現有基礎設施，只是有點好奇您的想法隨著我們的發展，這對患者費用的增長有何影響？聽起來應該會放緩。

Yeah, David, I'll add some color and then Walt can jump in as well. You may recall over the last couple of years, we talked about different things. Chip alluded to it from the fintech gains that we had. We accelerated coming out of the pandemic production growth, but needed to catch up on lender support growth, underwriters, closers, servicers, et cetera.

是的，大衛，我會添加一些顏色，然後沃爾特也可以加入。您可能還記得在過去幾年中，我們談論了不同的事情。奇普從我們所取得的金融科技成果中提到了這一點。我們加速走出疫情的生產成長，但需要趕上貸方支援成長、承銷商、結束商、服務商等。

We did that we then accelerated our technology investments in '22 and a little bit in the first half of '23 to again drive to accelerate where our growth would be. So we put a significant amount of expenses ahead of revenue over the last 24 months, I'd say.

我們做到了這一點，然後在 22 年加快了技術投資，並在 23 年上半年加快了一點，以再次加速我們的成長。因此，我想說，在過去 24 個月裡，我們將大量支出置於收入之上。

Here, we've kind of gotten to the point where we've got the expense infrastructure in place across our businesses that we need to grow. We've just got to put the revenue apparatus on it, and that's exactly what you're seeing our revenues up 9% on an adjusted basis as Chip showed over the last 12 months on only 1% expense growth, about 90%-ish or so of the incremental people that we're adding right now are in revenue, producing spots in our organization, and we want that to continue.

在這裡，我們已經達到了這樣的程度：我們已經在我們的業務中建立了成長所需的費用基礎設施。我們只需將收入設備放在上面，這正是您所看到的，我們的收入在調整後增長了9%，正如Chip 在過去12 個月中顯示的那樣，費用僅增長了1%，約為90% 左右我們現在增加的增量人員中有大約一半是收入，在我們的組織中產生了作用，我們希望這種情況能夠繼續下去。

We have really good infrastructure and support to be able to scale this business now because of the hard work of people over the last 24 months. And so now we're in a position to be able to provide much more operating leverage on that expense base than we had been previously.

由於過去 24 個月人們的辛勤工作，我們擁有非常良好的基礎設施和支持，現在能夠擴展這項業務。因此，現在我們能夠在該費用基礎上提供比以前更多的營運槓桿。

David, I'll add on quickly to what we just mentioned. Now, we've been really fortunate that our company has embraced this challenge of how we think about expenses. And there you can definitely grow your expenses more inherently higher growth in our expenses because we're a growth organization and that's what we're about for all the reasons BJ just mentioned.

大衛，我將快速補充我們剛才提到的內容。現在，我們非常幸運，我們的公司已經接受了我們如何看待費用的挑戰。在那裡，你絕對可以增加你的開支，使我們的開支成長得更高，因為我們是一個成長型組織，這就是我們的目標，原因是 BJ 剛才提到的。

But there are other opportunities across the company where we can look to find efficiencies as well. So thus far in 2024, we found a really nice balance between the two growing and investing. I wouldn't say we're slowing down any technology or growth initiative whatsoever.

但整個公司還有其他機會，我們也可以尋求提高效率的機會。2024 年到目前為止，我們在成長和投資兩者之間找到了非常好的平衡。我不會說我們正在放慢任何技術或成長計劃。

I think if anything, it's the opposite. We're trying to progress as quickly as we can. But we continue to look for other ways to across our life across our business units to find expense reductions when as well. And that's a good healthy expense discipline that we really demonstrated over the last 12 months.

我認為如果有的話，那就是相反的。我們正在努力盡快取得進展。但我們仍在繼續尋找其他方法來貫穿我們整個業務部門的生活，以減少開支。這是一種良好、健康的支出紀律，我們在過去 12 個月中確實證明了這一點。

That's great. And then last one from me, just great to hear the commentary on the deposit cost stabilizing, it sounds like we're starting to see some opportunities even the CD repricing is behind us and you're seeing and a lot of success on the core deposit front from the business customers.

那太棒了。然後是我的最後一篇，很高興聽到關於存款成本穩定的評論，聽起來我們開始看到一些機會，甚至 CD 重新定價已經過去了，你正在看到核心方面取得了很多成功存款前端來自商業客戶。

I'm just kind of curious, would you expect the funding cost start to decline? I guess if you can continue to have this kind of success with the business clients, and we could maybe be set up for approaching a much a pretty material inflection point in the margin. And how quickly do you expect to be able to reprice those business clients in a potential downgrade scenario?

我只是有點好奇，您預期融資成本會開始下降嗎？我想，如果你能繼續在商業客戶方面取得這種成功，我們可能會在利潤率方面接近一個相當重要的轉折點。在潛在的降級情況下，您預計能夠多快為這些企業客戶重新定價？

Yeah, I'll start and then BJ can jump up. Great question, David. Appreciate that. Look I think ultimately we're going to control what we can control, right? We have a really good problem right now and that problem is we're growing.

是的，我先開始，然後 BJ 就可以跳起來了。好問題，大衛。很欣賞這一點。聽著，我認為最終我們將控制我們能控制的事情，對嗎？我們現在面臨一個非常好的問題，那就是我們正在成長。

And I say problem with a smile because I think that that's not something many other banks are saying. So we're going to price accordingly. And we really see what the competitive market does here kind of going forward.

我微笑著說有問題，因為我認為其他銀行並沒有這麼說。所以我們將相應地定價。我們確實看到了競爭市場的未來發展。

There's things like the Fed, like I mentioned that we can't control. We don't know what they're going to do. But ultimately a [$330 million] margin with our level of growth over the last 12 months. It feels pretty good, and I think we can maintain that going forward we'll be just fine.

就像我提到的，像聯準會這樣的事情是我們無法控制的。我們不知道他們要做什麼。但隨著我們過去 12 個月的成長水平，最終利潤率達到了 [3.3 億美元]。感覺非常好，我想我們可以繼續保持下去，一切都會好起來的。

Just one thing, David, on your first question to BJ. Sorry, to backup. BJ does such a wonderful job operating this bank and I get to spend probably two or three days a week, at least on the road with customers. And certainly in our SBA business in our 35 verticals when Steve designs the credit box and tells the lending officers, what the credit box it's kind of banking [101]. Am I approved and when are you going to give me the money?

David，關於你向 BJ 提出的第一個問題，我只想說一件事。抱歉，要備份。BJ 在經營這家銀行方面做得非常出色，我每周可能會花兩三天的時間，至少在路上與客戶打交道。當然，在我們 35 個垂直行業的 SBA 業務中，史蒂夫設計了信貸箱並告訴貸款官員，信貸箱是銀行業務[101]。我得到批准了嗎？

So these lending officers know exactly what the size of these borrowers. On the other side in this business by our sponsor business yesterday in the Northeast, I had a chance to visit with a firm that has about $3 billion in assets under management does business with a lot of banks.

因此，這些貸款官員確切地知道這些借款人的規模有多大。另一方面，昨天我們在東北部的贊助商業務中，我有機會拜訪了一家管理約 30 億美元資產、與許多銀行有業務往來的公司。

This guy that ran the farmer. So you guys are did we never have to worry about the loan committee. We never have to worry about going back and forth. You guys give us an answer and it's always direct and we just move on with their customer and book the deal. So I think it's like I'm talking [101], David. Sorry.

這個經營農場的傢伙。所以你們是我們永遠不必擔心貸款委員會的問題嗎？我們永遠不必擔心來回。你們給我們一個答案，而且總是直接的，我們只是繼續與他們的客戶合作並預訂交易。所以我認為這就像我在說[101]，大衛。對不起。

Okay.

好的。

David, I'll just add one more quick thing on back to the deposit dynamics. There's something that Walt has on his deposit slide that I think is pretty important. And insightful, about half of our loan portfolio is variable rate, but almost three-quarters of our deposit portfolio will reprice in less than a year.

大衛，我將在存款動態方面再補充一件事。沃爾特在他的存款幻燈片上有一些我認為非常重要的東西。富有洞察力的是，我們大約一半的貸款組合是浮動利率，但近四分之三的存款組合將在不到一年的時間內重新定價。

So when the Fed does start to reduce rates, there'll probably be a little bit of treading water because our loan portfolio is coming down a little bit quicker than the deposit portfolio. But once we start to get past the first quarter or two the majority of our deposits will -- our deposit costs will be coming down more quickly. And we believe that we'll start to see NIM expansion over time to levels that we expect we can generate from this business.

因此，當聯準會確實開始降息時，可能會出現一些原地踏步的情況，因為我們的貸款組合下降速度比存款組合要快一些。但是，一旦我們開始度過第一季或第二季度，我們的大部分存款將會 - 我們的存款成本將更快下降。我們相信，隨著時間的推移，我們將開始看到淨利差擴張到我們期望從這項業務中產生的水平。

All right. Thanks, everybody.

好的。謝謝大家。

Thanks, David.

謝謝，大衛。

Tim Switzer, KBW.

蒂姆·斯維策，KBW。

Hey, good morning. Thank you for taking my questions. Can I ask a quick clarification real quick, did you say 25% of your deposits reprice within a year or quarter?

嘿，早安。感謝您回答我的問題。我能否快速澄清一下，您是說 25% 的存款會在一年或一個季度內重新定價嗎？

So over the next 12 months, we'll have -- it's roughly about 76%. So your liquid savings portfolio. And then you have our CD portfolio that takes time just to migrate through the maturity schedule it's roughly about a quarter of that CD maturity. A quarter of that CD portfolio matures each quarter over the next 12 months, as you've seen over the last 12 months?

因此，在接下來的 12 個月中，我們將大約 76% 左右。所以你的流動儲蓄投資組合。然後我們的 CD 投資組合需要時間才能完成到期計劃，大約是 CD 到期時間的四分之一。正如您在過去 12 個月中看到的那樣，CD 投資組合的四分之一在接下來的 12 個月內每季都會到期？

Well, I think, Tim, to add to and Walt's initial comments, you were talking about how over 25% of our entire deposit portfolio repriced because of CD maturities. Almost 200 basis points higher at the beginning, 150 basis points through the middle of -- to end of last year.

好吧，蒂姆，我想補充沃爾特的最初評論，您正在談論我們整個存款投資組合中超過 25% 的資金是如何因 CD 到期而重新定價的。年初上漲了近 200 個基點，到去年年中為止上漲了 150 個基點。

And we still held -- we held the margin flat and we grew our net interest income by 8% year over year. So I think we're just incredibly pleased with the pricing discipline that our lenders have had and the activity that they've generated to continue our loan growth and the discipline that our deposits team has had to manage that large repricing and still maintain our margins.

我們仍然保持利潤率不變，淨利息收入較去年同期成長 8%。因此，我認為我們對貸款機構的定價紀律以及他們為繼續我們的貸款成長而開展的活動以及我們的存款團隊必須管理大規模重新定價並仍然保持利潤率的紀律感到非常滿意。

Okay. That's helpful. And could you just talk about the secondary market demand in the SBA space? Is it -- did the rate movement help at all? And do you think lower rates will help improve going forward? And then have you started to see some rising competition generally in SBA from other banks are kind of trying to diversify third loan exposures?

好的。這很有幫助。您能談談 SBA 領域的二級市場需求嗎？利率變動有幫助嗎？您認為較低的利率有助於改善未來嗎？然後，您是否開始看到 SBA 中來自其他銀行的競爭不斷加劇，試圖使第三貸款風險多元化？

Tim, this is Walt. I'll start with secondary market. The rates helped or at least the outlook of what the fiscal going to do has helped. Really, what we're starting to see there is the assumption that when Fed cut rates, prepayment rates, both voluntary and involuntary will slow, obviously, depending on why the Fed is cutting rates and if they do it in a disciplined fashion.

提姆，這是沃爾特。我將從二級市場開始。利率有所幫助，或至少對財政政策的前景有所幫助。實際上，我們開始看到的假設是，當聯準會降息時，自願和非自願的提前還款率顯然都會放緩，這取決於聯準會降息的原因以及他們是否以有紀律的方式降息。

So that has definitely helped as well as our spreads continue to be competitive, especially on the small loans front, which could be ranges anywhere from [5 plus 1.5 to 5 plus 4]. So broadly speaking, expectations for the Fed have helped.

因此，這肯定有助於我們的利差繼續保持競爭力，特別是在小額貸款方面，其範圍可能從[5加1.5到5加4]。總的來說，對聯準會的預期有所幫助。

The treasury curve coming down has helped. And then just continued high demand from investors for those SBA pools that they start taking downward rate protection and alternatives to cash. So I'll start with that one.

國債曲線的下降有所幫助。然後，投資者對 SBA 資金池的持續高需求促使他們開始採取下調利率保護和現金替代方案。那我就從那個開始吧。

And then I'm sorry, the second question was --

然後我很抱歉，第二個問題是--

Are you seeing any more competition from other banks in SBA?

您是否看到 SBA 中其他銀行有更多競爭？

Yeah, thanks. So on the competition side, I think you've pretty much the same, right. I think every industry is very different and every industry has their own competitive pressures. And so we actually had this question a lot of what banks are we seeing out in the market? And my answer always is what industry you're looking at. But really, no, I wouldn't say we've seen any migration or any more competition pretty much across the spectrum, it seems to be the same players.

是的，謝謝。所以在競爭方面，我認為你們的情況幾乎是一樣的，對吧。我認為每個產業都有很大的不同，每個產業都有自己的競爭壓力。所以我們其實有很多這樣的問題：我們在市場上看到了哪些銀行？我的答案始終是您正在尋找哪個行業。但實際上，不，我不會說我們在各個方面都看到了任何遷移或更多競爭，似乎都是相同的玩家。

Hey Tim, one more thing I'll mention on secondary markets. I'm particularly proud of this because it speaks to what our lenders are doing to balance production growth and doing the right thing for the customer and being disciplined on pricing.

嘿提姆，我還要在二級市場上提到一件事。我對此感到特別自豪，因為它說明了我們的貸方正在採取哪些措施來平衡產量成長、為客戶做正確的事情以及嚴格定價。

We generally don't like to sell any SBA guaranteed loans that are less than a 105 premium by and large, because we think it makes more sense to hold those than it does to sell those at those levels. And over the last -- over the previous four quarters, what we were generating in terms of reduction was anywhere between 30% to 50% of what we were producing of SBA guaranteed was going to yield of 105 or greater.

我們通常不喜歡出售任何溢價低於 105 的 SBA 擔保貸款，因為我們認為持有這些貸款比在這些水平上出售這些貸款更有意義。在過去的四個季度中，我們所產生的產量減少了 30% 到 50%，SBA 保證產量將達到 105 或更高。

This fourth quarter, it was 70%. So in addition to whatever the pricing dynamics are going on in the marketplace, our people are producing loans that give us the optionality to either keep or sell for very attractive profitability metrics. So I'm really pleased at how our lenders and how our business are really kind of turn it over the Rubik's cube to give us as much optionality as we can.

今年第四季度，這一比例為 70%。因此，除了市場上發生的定價動態之外，我們的員工還提供貸款，使我們可以選擇保留或出售，以獲得非常有吸引力的獲利指標。因此，我真的很高興我們的貸方和我們的企業如何真正扭轉魔術方塊，為我們提供盡可能多的選擇。

And BJ, I think in the small dollar express situation where we're not having to take many times all available collateral and we can close these loans much more quickly, and we're seeing pricing in that area of --

BJ，我認為在小額美元快遞的情況下，我們不必多次使用所有可用抵押品，我們可以更快地關閉這些貸款，我們看到該領域的定價--

It ranges from [1.11 to 1.17].

它的範圍從[1.11至1.17]。

Yeah. And then that's going to help too because that's going to pick up dramatically for sure.

是的。然後這也會有所幫助，因為這肯定會急劇上升。

Okay. Great. Appreciate all the color. Thank you.

好的。偉大的。欣賞所有的顏色。謝謝。

Thanks, Tim.

謝謝，蒂姆。

Alex Lau, JPMorgan.

亞歷克斯·劉，摩根大通。

Hi, good morning.

嗨，早安。

Good morning, Alex.

早安，亞歷克斯。

I had a follow-up on the expenses. So with expenses flat in the first half of the year, when you compare year over year, have you changed your expectations for your full year expense growth outlook from the high single digit to low double digit range?

我對費用進行了追蹤。那麼，在上半年費用持平的情況下，當您與去年同期進行比較時，您對全年費用成長前景的預期是否從高個位數變為低兩位數範圍？

Hey Alex, this is Walter. Look, I think the we continue to do what we can they can do on that front, like I mentioned, balancing funding expense efficiencies while continue to invest in our growth organization and especially in revenue generator side.

嘿亞歷克斯，這是沃特。聽著，我認為我們將繼續在這方面盡我們所能，就像我提到的那樣，平衡融資費用效率，同時繼續投資於我們的成長組織，特別是創造收入方面。

And I think our expenses will continue to inherently grow, right. And I think if you take the last couple of quarters and you run rate those for the full year, add a growth expectation on top of that, just given the focus on hiring new lenders and other support personnel to proactively aid our -- in terms of complexity. I think you'll get a pretty good expectation versus last year.

我認為我們的開支將繼續增長，對吧。我認為，如果你對過去幾個季度的情況進行評估，並對其全年進行評級，那麼在此之上添加增長預期，只是考慮到重點是僱用新的貸方和其他支持人員來主動幫助我們— —的複雜性。我認為與去年相比，你會得到相當好的期望。

Yeah. I would just add, Alex, that we're going to continue to look for new lenders, invest in technology, build our business. So we're not really concerned quarter to quarter on how much expense we're going to add ahead of revenues or expense growth. But with that said, if I were a betting man, I would be optimistic about us being better than what we've talked about on expenses for the year.

是的。亞歷克斯，我想補充一點，我們將繼續尋找新的貸方，投資技術，發展我們的業務。因此，我們並不真正關心每個季度我們將在收入或費用增長之前增加多少費用。但話雖如此，如果我是一個賭徒，我會樂觀地認為我們今年的支出會比我們所談論的更好。

Thank you. And Walt, just to confirm your comment earlier on that net interest margin, are you expecting to maintain the NIM in the [330s range for the rest of the year? Or was there any change to the prior NIM outlook in the 350 to 375] range for year-end? Thanks.

謝謝。Walt，只是為了確認您先前對淨利差的評論，您是否預計在今年剩餘時間內將淨利差維持在 [330s 範圍內？或之前的年底淨利差展望（350 至 375）有任何變化嗎？謝謝。

Yeah. No, I think the -- if we focus on the things we can control, which outlined our pricing discipline, our growth, our pricing discipline on the deposit side to take that up into the right trajectory still applies. I think the slope of that trajectory will really dependent from the things we can't control right. That's the competitive of the deposits and the Fed.

是的。不，我認為，如果我們專注於我們可以控制的事情，它概述了我們的定價紀律、我們的成長、我們在存款方面的定價紀律，以使其進入正確的軌道，那麼仍然適用。我認為這條軌跡的斜率其實取決於我們無法正確控制的事情。這就是存款和聯準會的競爭。

So I think that [350-plus] range still remains our target rate. And I think we'll navigate our way back there. The timing of that really depends on those things we can't control.

所以我認為[350+]範圍仍然是我們的目標利率。我想我們會回到那裡。發生的時間實際上取決於我們無法控制的事情。

It's probably not in '24, Alex, it's probably into '25. Just thinking about the forward curve. What our business model is generating is moving us up into the right, but probably getting into the [350-plus] range is sometime next year.

亞歷克斯，這可能不是 24 年，可能是 25 年。只是考慮遠期曲線。我們的商業模式正在將我們推向正確的方向，但進入 [350+] 範圍可能要到明年的某個時候。

Got it. And is that also assuming rate cuts for the rest of the year?

知道了。這是否也假設今年剩餘時間降息？

Yeah, to migrate to that level. We would expect one or two cuts this year and then you go into three or four cuts going into next year similar to what you see in the forward curve.

是的，遷移到那個層級。我們預計今年會削減一到兩次，然後進入明年，將進行三到四次削減，類似於您在遠期曲線中看到的情況。

Thank you. And then just on the stronger loan production and pipelines near all-time highs in the second quarter. Do you expect a loans on balance sheet growth for the year to be in that low double digit range or is there potential upside to that given the strong pipeline?

謝謝。然後，第二季的貸款生產和通路更加強勁，接近歷史高點。您預計今年資產負債表上的貸款成長是否會在兩位數的低水準範圍內，或者考慮到強勁的管道，這一數字是否存在潛在的上升空間？

Yeah, I think that low double digit range feels right early on. I think the upside there really just depends on Q3 and Q4. We think we have the pipeline and the production to really have a strong second half. So I think kind of that expectation still applies right now.

是的，我認為低兩位數的範圍在早期感覺是正確的。我認為上行空間實際上取決於第三季和第四季。我們認為我們有通路和生產來真正擁有強勁的下半年。所以我認為這種期望現在仍然適用。

Got it. And just one follow-up on the comment on the tailwinds on the CD portfolio, how much of the CD book is repricing in the third quarter? And what are the rates of CDs rolling off and being replaced at? Thank you.

知道了。關於 CD 投資組合順風的評論的一個後續行動是，有多少 CD 書籍在第三季重新定價？CD 的淘汰率和更換率是多少？謝謝。

Yeah, great question. So in Q3, Q3 is actually are the -- to your lightest of the four quarters in terms of CD maturities. So you will roughly be somewhere between 15% to 20% of our customer CD portfolio will reprice in Q3. Q4 is a large quarter as well as Q1.

是的，很好的問題。因此，在第三季度，就 CD 到期日而言，第三季度實際上是四個季度中最輕的一個。因此，我們的客戶 CD 投資組合中大約有 15% 到 20% 將在第三季重新定價。第四季和第一季一樣是一個大季度。

I think that the rate that it's rolling off on right now would be -- our current offerings is about 5%, rolling off [5.20% to 5.25%] so you see a slight pickup there. Again, that all depends on our growth in our funding needs, CDs -- especially short-term CDs are one of the primary tactics that we use given the Fed going into the second half.

我認為現在的下降率是——我們目前的產品約為 5%，正在下降 [5.20% 至 5.25%]，所以你會看到那裡有輕微的回升。同樣，這一切都取決於我們融資需求的成長，鑑於聯準會進入下半年，存款準備金——尤其是短期存款準備金是我們使用的主要策略之一。

Great. Thanks for taking my questions.

偉大的。感謝您回答我的問題。

Thanks, Alex.

謝謝，亞歷克斯。

Thank you. We have no further questions. I will turn the call back over to Chip Mahan for closing comments.

謝謝。我們沒有其他問題了。我會將電話轉回給奇普馬漢以徵求結束意見。

Well, we enjoy being with you this morning, and we look forward to seeing you in the fall. Thanks for attending.

好吧，我們很高興今天早上和你在一起，我們期待秋天見到你。感謝您的參加。

Ladies and gentlemen, this concludes your conference for today. We thank you for participating, and we ask that you please disconnect your lines.

女士們、先生們，今天的會議到此結束。我們感謝您的參與，並請您斷開線路。