Mercantile Bank Corp (MBWM) 2024 Q4 法說會逐字稿

Good morning and welcome to the Mercantile Bank Corporation 2024 fourth quarter earnings conference call. All participants will be in listen-only mode. Should you need assistance? Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

早安，歡迎參加商業銀行公司 2024 年第四季財報電話會議。所有參與者將處於只聽模式。您需要幫助嗎？請按星號鍵然後按零通知會議專家。今天的演講結束後，將有機會提問。請注意，該事件正在被記錄。

I would now like to turn the conference over to Nicole Kladder. First Vice President, Chief Marketing Officer of Mercantile Bank. Please go ahead.

現在我想將會議交給 Nicole Kladder。商業銀行第一副總裁、行銷長。請繼續。

Happy New Year everyone and thank you for joining us today. We will cover the company's financial results for the fourth quarter of 2024.

祝大家新年快樂，感謝您今天的參與。我們將介紹該公司 2024 年第四季的財務表現。

The team members joining me this morning include Ray Reitsma, President and Chief Executive Officer, as well as Chuck Christmas, executive Vice President and Chief Financial Officer.

今天早上與我一起的團隊成員包括總裁兼首席執行官雷·雷茨瑪 (Ray Reitsma) 以及執行副總裁兼首席財務官查克·克里斯馬斯 (Chuck Christmas)。

Our agenda will begin with prepared remarks by both Ray and Chuck and we'll include references to our presentation covering this quarter's results.

我們的議程將以 Ray 和 Chuck 的準備好的發言開始，並且我們將參考有關本季業績的簡報。

You can access a copy of the presentation as well as the press release sent earlier today by visiting Mercbank dotcom.

您可以透過造訪 Mercbank dotcom 以獲得簡報的副本以及今天早些時候發送的新聞稿。

After our prepared remarks, we will then open the call to your questions before we begin. It is my responsibility to inform you that this call may involve certain forward-looking statements such as projections of revenue earnings and capital structure as well as statements on the plans and objectives of the company's business.

在我們準備好發言之後，我們將在開始之前回答你們的問題。我有責任告知您，本次電話會議可能涉及某些前瞻性陳述，例如收入收益和資本結構預測以及公司業務計劃和目標的陳述。

The company's actual results could differ materially from any forward-looking statements made today. Due to factors described in the company's latest securities and exchange commission filings.

該公司的實際結果可能與今天做出的任何前瞻性陳述有重大差異。由於公司最新提交給證券交易委員會的文件中所述的因素。

The company assumes no obligation to update any forward-looking statements made during the call. Let's begin. Right.

該公司不承擔更新電話會議中所做的任何前瞻性陳述的義務。讓我們開始吧。正確的。

Thank you, Nicole. My comments will focus on the changes that have been made to the funding side of our balance sheet and the resulting impacts on the income statement as well as our strong loan growth, excellent asset quality and growing noninterest income taken together.

謝謝你，妮可。我的評論將集中在我們資產負債表的融資方面所做的變化及其對損益表的影響，以及我們強勁的貸款成長、優秀的資產品質和不斷增長的非利息收入。

These performance traits have allowed us to compile attractive, compounded annual growth rates for the benefit of our shareholders from the year end 2021 to year end 2023 commercial and mortgage loan growth was strong and while deposit growth was solid, it did not keep pace with loan growth.

這些業績特徵使我們能夠從 2021 年底到 2023 年底為股東編制出具有吸引力的複合年增長率，商業和抵押貸款增長強勁，雖然存款增長穩健，但未能跟上貸款增長的步伐。

The outflow of deposits from the banking system, POSTCOVID contributed to this trend as a result, the bank's loan to deposit ratio increased from 110%, increased to 110%. At year end 2023. In 2024 we focused on reducing this ratio with the goal of to strengthen our unbalance sheet liquidity and overall financial profile.

在後疫情時代，銀行體系存款的流出加劇了這一趨勢，導致銀行的貸存比從 110% 上升至 110%。截至 2023 年底。2024 年，我們致力於降低這一比率，目標是增強我們的資產負債表流動性和整體財務狀況。

As described in previous calls. We undertook our three pronged approach to building our deposit base with the objective of reducing the loan to deposit ratio into the mid 90% range over time to reiterate. First, we broadened our focus on business deposits including entities that have limited or no borrowings. Second, we plan to grow in the governmental and public realm through strategic personnel additions with existing relationships in this space.

正如之前的通話中所述。我們採取了三管齊下的方法來建立我們的存款基礎，目標是隨著時間的推移將貸款與存款比率降低到 90% 的中等水平。首先，我們擴大了對商業存款的關注範圍，包括借款有限或沒有借款的實體。其次，我們計劃利用該領域的現有關係，透過策略性地增加人員，在政府和公共領域實現發展。

And third, we are growing the retail customer focus based on total balances as opposed to activity hurdles such as transactions or card usage. These efforts led to an increase in local deposits in 2024 of $816 million.

第三，我們正在根據總餘額而不是交易或卡片使用等活動障礙來提高零售客戶的關注。這些努力使得 2024 年本地存款增加了 8.16 億美元。

A growth rate of more than 20%. Local deposits grew $216 million during the fourth quarter alone. The growth in local deposits not only funded our strong loan growth but also allowed reduction in wholesale funding sources for the year including an $81 million reduction in FHLB advances and a $19 million reduction in brokered deposits.

成長率超過20%。光是第四季度，本地存款就成長了 2.16 億美元。本地存款的成長不僅為我們強勁的貸款成長提供資金，而且還減少了當年的批發融資來源，包括 FHLB 預付款減少 8,100 萬美元和經紀存款減少 1,900 萬美元。

Commercial loan growth for the fiscal year end was $292 million or 8.5% over the prior year end and was $59 million for the fourth quarter.

本財年末商業貸款成長 2.92 億美元，較上年末成長 8.5%，第四季商業貸款成長 5,900 萬美元。

Customer reductions in loan balances from excess cash flow or sale of assets of $88 million during the fourth quarter impacted our commercial loan tolls. The pipeline stands at $296 million and commitments to fund commercial construction loans totaled $245 million which is slightly increased from the prior quarter end. Taking these factors into account.

第四季度，客戶因現金流量過剩或資產出售而減少的貸款餘額達 8,800 萬美元，影響了我們的商業貸款收費。目前，融資管道總額為 2.96 億美元，商業建築貸款承諾總額為 2.45 億美元，較上一季末略有增加。考慮到這些因素。

We expect commercial loan growth in the immediate future to approximate the pace of the recent past mortgage loans on the balance sheet have grown substantially in the increasing rate environment experienced over the past few years as borrowers have opted for arms which reside on our balance sheet rather than fixed rate loans which are sold in the secondary market. We have successful successfully executed changes within our portfolio mortgage programs resulting in a greater portion of our mortgage production being sold rather than placed on our balance sheet.

我們預計，不久的將來商業貸款的成長速度將接近近期的速度，在過去幾年經歷的利率上升的環境下，資產負債表上的抵押貸款大幅增長，因為借款人選擇了我們資產負債表上的部門，而不是在二級市場出售的固定利率貸款。我們成功地在我們的投資組合抵押貸款計劃中實施了變革，使我們的抵押貸款產品中更大一部分被出售而不是放在我們的資產負債表上。

The positive outcomes include a 62% increase in mortgage banking income during fiscal 2024 compared to fiscal 2023 and a nominal decrease in mortgage loans on our balance sheet.

正面的結果包括 2024 財年的抵押貸款銀行收入與 2023 財年相比增加了 62%，並且我們的資產負債表上的抵押貸款名義上減少了。

Our mortgage team continues to build market share despite a challenging rate environment allowing results that diverge from average in the market. While mortgage banking is certainly rate dependent. The level of earnings from this activity that can be considered core or somewhat independent of the rate environment is increasing the 22% growth in local deposits coupled with the 7% growth in the loan portfolio drove our loan to deposit ratio from 110% at year end 2023 to 98% at year end 2024 and contributed to a reduction in our reliance on wholesale funding from 14% at fiscal year end, 2023 to 10%.

儘管利率環境嚴峻，導致業績與市場平均水平存在差異，但我們的抵押貸款團隊仍在繼續擴大市場份額。雖然抵押銀行業務肯定依賴利率。此活動的收益水準可被視為核心收益，或在一定程度上不受利率環境的影響，即本地存款增長 22%，再加上貸款組合增長 7%，推動我們的貸存比從 2023 年底的 110% 上升至 2024 年底的 98%，並有助於我們將對批發融資的依賴從 2023 財年

At fiscal year end, 2024 asset quality remains very strong as nonperforming assets sold $5.7 million at year end or nine basis points of total assets consisting primarily of residential real estate and nonreal estate commercial loans. There is only $42,000 in commercial real estate representation among nonperforming assets past due loans in dollars represent 16 basis points of total loans and there is no outstanding o we remain vigilant in our underwriting standards and monitoring to identify any deterioration within our portfolio. Our lenders are the first line of observation and defense to recognize areas of emerging risk.

截至財年末，2024 年資產品質仍然非常強勁，因為不良資產在年底售出 570 萬美元，佔主要由住宅房地產和非房地產商業貸款組成的總資產的 9 個基點。不良資產中只有 42,000 美元屬於商業房地產，逾期貸款佔總貸款的 16 個基點，並且沒有未償還的貸款，我們對承保標準和監控保持警惕，以確定我們的投資組合中是否存在任何惡化情況。我們的貸款人是識別新興風險領域的第一道觀察和防線。

Our risk rating model is robust with a continued emphasis on current borrower cash flow providing prompt sensitivity to any emerging challenges within a borrower's within a borrower's finances that said our customers continue to report strong results to date and have not begun to experience impacts of a potential recessionary environment in any systematic way.

我們的風險評級模型非常穩健，持續關注借款人當前現金流，對借款人財務狀況中出現的任何挑戰提供及時的敏感性，這意味著我們的客戶迄今為止繼續報告強勁的業績，並且還沒有開始以任何系統性的方式感受到潛在衰退環境的影響。

Total noninterest income grew 26% during 2024 compared to 2023 with gross reported in several categories. Mortgage banking income grew 62% based on the strategies outlined earlier and the resulting ability to sell a greater portion of originations on the secondary market service charges on accounts grew 38% reflecting higher activity levels and customer growth and less earnings credit offset charges based on reduced balances and transaction accounts.

2024 年非利息總收入與 2023 年相比增長了 26%，並報告了多個類別的總收入。根據先前概述的策略，抵押貸款銀行收入增長了 62%，並且由此產生的在二級市場上出售更大比例發起資產的能力使帳戶服務費增長了 38%，這反映了更高的活動水平和客戶增長，以及基於餘額和交易帳戶減少的收益信用抵消費用減少。

Payroll services grew 22% as our offerings continue to build traction in the marketplace. Finally, credit and debit card income grew 2% when adjusted for the receipt of a onetime payment from Visa associated with our contract renewal. In the second quarter of 2023 income from interest rate swaps declined 18% as demand by borrowers for interest rate protection shifted with borrowers future rate expectations.

隨著我們的產品在市場上繼續受到歡迎，薪資服務成長了 22%。最後，在調整與我們續約合約相關的從 Visa 收到的一次性付款後，信用卡和金融卡收入增加了 2%。2023 年第二季度，利率互換收入下降了 18%，因為借款人對利率保護的需求隨著借款人未來利率預期而改變。

The results for 2024 described above contribute to a solid five year track record of compounded annual growth rates across key metrics including total loans of 10% total deposits of 11.8% earnings per share of 10.1% and tangible book value per share of 8.4%. That concludes my remarks and I will now turn the call over to Chuck.

上述 2024 年業績為公司各項關鍵指標的穩健五年複合年增長率做出了貢獻，包括總貸款 10%、總存款 11.8%、每股收益 10.1% 和每股有形賬面價值 8.4%。我的發言到此結束，現在我將電話轉給查克。

Thanks and good morning to everybody this morning, we announced net income of $19.6 million or $1.22 per diluted share for the fourth quarter of 2024 compared with net income of $20.0 million or $1.25 per diluted share for the respective prior year period.

謝謝大家，大家早安，我們宣布 2024 年第四季的淨收入為 1,960 萬美元，即每股攤薄收益 1.22 美元，而去年同期的淨收入為 2,000 萬美元，即每股攤薄收益 1.25 美元。

Net income for the full year. 2024 totaled $79.6 million or $4.93 per diluted share compared to $82.2 million or $5.13 per diluted share during the full year 2023. While noninterest income increased during both periods, net income was negatively impacted by expected lower net interest income and increased noninterest expense interest income on loans increased during the fourth quarter of 2024 compared to the respective prior year period, reflecting strong loan growth that more than offset a lower yield on loans.

全年淨收入。 2024 年總計 7,960 萬美元或每股攤薄收益 4.93 美元，而 2023 年全年總計 8,220 萬美元或每股攤薄收益 5.13 美元。雖然兩個期間的非利息收入均有所增加，但預期淨利息收入下降和非利息支出增加對淨收入產生了負面影響，2024 年第四季度貸款利息收入與去年同期相比有所增加，反映出強勁的貸款增長足以抵消貸款收益率下降的影響。

Average loans totaled $4.57 billion during the fourth quarter of 2024. Compared to $4.18 billion. During the fourth quarter of 2023 our Yulan loans during the fourth quarter of 2024 whilst was 12 basis points lower than the fourth quarter of 2023. Largely reflecting the aggregate 100 basis point decline in the federal funds rate during the last four months of 2024 interest income on loans increased during the full year 2024 compared to the full year 2023 reflecting strong loan growth and higher loan yields. Average loans totaled $4.43 billion during 2024 compared to $4.05 billion in 2023.

2024 年第四季的平均貸款總額為 45.7 億美元。相比之下，這一數字為 41.8 億美元。2023 年第四季度，我們的玉蘭貸款與 2024 年第四季相比下降了 12 個基點。很大程度上反映了 2024 年最後四個月聯邦基金利率總計下降 100 個基點，與 2023 年全年相比，2024 年全年貸款利息收入有所增加，反映了強勁的貸款增長和更高的貸款收益率。2024 年平均貸款總額為 44.3 億美元，而 2023 年為 40.5 億美元。

The yield on loans was 36 basis points higher in 2024 than it was in 2023. Primarily reflecting the aggregate 100 basis point increase in the federal funds rate during the first seven months of 2023 which more than offset the aggregate 100 basis point decline in the federal funds rate during the last four months of 2024 interest income on securities increased during the fourth quarter and full year 2024 compared to the respective prior year periods, reflecting growth in the securities portfolio and a higher interest rate, environment interest income on interest earning deposits.

2024 年的貸款收益率比 2023 年高出 36 個基點。主要反映了 2023 年前七個月聯邦基金利率累計增加 100 個基點，這超過了 2024 年最後四個月聯邦基金利率累計下降 100 個基點的影響，2024 年第四季度和全年證券利息收入與去年同期存款相比有所增加，反映了證券投資組合的增長和更高的環境利率、生計的環境利息收入。

A vast majority of which is comprised of funds on deposit with the Federal Reserve Bank of Chicago also increased during the 2024 periods compared to the prior year periods. Largely reflecting a higher average balance in total interest income was $8.7 million and $50.1 million higher during the fourth quarter and full year 2024 respectively. Compared to the respective prior year time periods, we recorded increased interest expense on deposits during the fourth quarter and full year 2024 compared to the respective prior periods, primarily reflecting a higher interest rate environment and growth in money market and time deposit products.

其中絕大部分由存放在芝加哥聯邦儲備銀行的資金組成，與去年同期相比，2024 年也有所增加。主要反映的是總利息收入的平均餘額較高，第四季和 2024 年全年分別增加 870 萬美元和 5,010 萬美元。與去年同期相比，我們記錄的第四季和 2024 年全年存款利息支出較去年同期有所增加，這主要反映了更高的利率環境以及貨幣市場和定期存款產品的成長。

Our cost of deposits was 42 and 92 basis points higher during the fourth quarter and full year 2024. Compared to the respective prior year periods.

2024 年第四季和全年，我們的存款成本分別高出 42 個和 92 個基點。與去年同期相比。

Average deposits totaled $4.52 billion during the fourth quarter of 2024 compared to 3.8 billion $8 billion during the fourth quarter of 2023. While average deposits totaled $4.23 billion during the full year of 2024 compared to $3.76 billion during the full year 2023 interest expense on federal home loan Bank of Indianapolis advances during the fourth quarter of 2024 was similar to that of the fourth quarter of 2023 reflecting an offsetting lower average balance and higher average cost interest expense on federal home loan Bank of indianapolis' advances during the full year 2024 was higher than during the full year 2023 reflecting a higher average balance and average rate interest expense on other borrowed funds during the 2024 periods was similar to the respective prior year periods.

2024 年第四季的平均存款總額為 45.2 億美元，而 2023 年第四季的平均存款總額為 38 億美元（80 億美元）。雖然 2024 年全年平均存款總額為 42.3 億美元，而 2023 年全年為 37.6 億美元，但 2024 年第四季度印第安納波利斯聯邦住房貸款銀行預付款的利息支出與 2023 年第四季度相似，反映了較低的平均餘額和較高的平均成本，2024 年全年利息期間其他借入資金的利息支出與去年同期相似。

In total interest expense was $9.0 million and $52.6 million higher during the fourth quarter and full year 2024 compared to the respective prior year time periods, net interest income declined $0.3 million and $2.5 million during the fourth quarter and full year 2024 compared to the respective prior year time periods impacting our net interest margin was our strategic initiative to lower the loan to deposit ratio which generally entails deposit growth exceeding loan growth and using the additional monies to purchase securities. A large portion of the deposit growth was in the higher costing money market and time deposit products. While the purchase securities provide a lower yield than loan products.

與去年同期相比，2024 年第四季和全年的總利息支出分別為 900 萬美元和 5,260 萬美元，淨利息收入在 2024 年第四季度和全年分別比去年同期減少 30 萬美元和 250 萬美元，影響我們的淨息差是我們降低貸存比的戰略舉措，這通常意味著額外資金增長的貸款增長，這通常意味著證券增長。存款成長很大一部分來自成本較高的貨幣市場和定期存款產品。而購買證券提供的收益率低於貸款產品。

Our net interest margin declined 51 basis points during the fourth quarter of 2024 compared to the fourth quarter of 2023.

2024 年第四季度，我們的淨利差與 2023 年第四季相比下降了 51 個基點。

Our yulun earning assets declined 14 basis points during that time period, largely reflecting the aggregate 100 basis point decline in the federal funds rate during the last four months of 2024. While our cost of funds was up 37 basis points primarily reflecting an increased mix of higher cost in money market and time deposits.

我們的獲利資產在此期間下降了 14 個基點，主要反映了 2024 年最後四個月聯邦基金利率總計下降了 100 個基點。而我們的資金成本增加了 37 個基點，主要反映了貨幣市場和定期存款成本的增加。

Our net interest margin declined 47 basis points during the full year 2024 compared to the full year 2023. While our yield on earning assets increased 34 basis points during that time period, our cost of funds was up 81 basis points while we experienced rapid growth in our earning asset yield during the period of March of 2022 through July of 2023. When the Federal Reserve raised the federal funds rate by 525 basis points. Meaningful increases in our cost of funds did not begin to materialize until the latter part of 2022. When competition for deposit balances increased deposit rates and depositors began to move funds from no and lower costing deposit types to higher costing deposit products.

2024 年全年，我們的淨利差與 2023 年全年相比下降了 47 個基點。雖然我們的生息資產收益率在此期間增加了 34 個基點，但我們的資金成本上漲了 81 個基點，同時在 2022 年 3 月至 2023 年 7 月期間我們的生息資產收益率經歷了快速增長。當聯準會將聯邦基金利率上調525個基點的時候。我們的資金成本直到 2022 年下半年才開始顯著增加。當存款餘額競爭加劇時，存款利率就會上升，存款人就會開始將資金從無成本或成本較低的存款類型轉移到成本較高的存款產品。

Our net interest margin peaked during the latter part of 2022 and early stages of 2023 while loans increased $297 million during 2024 or almost 7%. The projects grew $797 million or over 20% during the same time period, providing a net surplus of funds totaling $500 million.

我們的淨利差在 2022 年下半年和 2023 年初達到峰值，而 2024 年貸款增加了 2.97 億美元，增幅接近 7%。這些項目在同一時期內成長了 7.97 億美元，成長了 20% 以上，提供了總計 5 億美元的淨盈餘資金。

We use that net surplus of funds to grow our securities portfolio by $113 million and reduce our federal home loan Bank of Indianapolis advances by $81 million.

我們利用這些淨盈餘資金將我們的證券投資組合增加 1.13 億美元，並減少印第安納波利斯銀行的聯邦住房貸款預付款 8,100 萬美元。

A majority of the remainder of the net surplus of funds is on deposit with the Federal Reserve Bank of Chicago.

剩餘淨盈餘資金大部分存放在芝加哥聯邦儲備銀行。

We recorded a provision expense of $1.5 million and $7.4 million during the fourth quarter and full year 2024 respectively.

我們在 2024 年第四季和全年分別記錄了 150 萬美元和 740 萬美元的撥備費用。

The fourth quarter, 2024 provision expense primarily reflects an increased allocation for slower prepayment speeds on residential mortgage loans and allocations necessitated by net loan growth.

2024 年第四季的撥備費用主要反映了住宅抵押貸款預付速度放緩導致的撥款增加以及淨貸款成長所需的撥款。

The provision expense recorded during the full year 2024 also includes specific allocations for two nonperforming nonreal estate related commercial loan relationships that were established during the 1st and 2nd quarters along with allocations necessitated by net loan growth.

2024 年全年記錄的撥備費用還包括第一季和第二季建立的兩筆不良非房地產相關商業貸款關係的特定分配以及淨貸款成長所需的分配。

Noninterest expenses were $3.9 million and $10.5 million higher in the fourth quarter and full year 2024. Compared to the respective prior time periods.

2024 年第四季和全年非利息支出分別增加 390 萬美元和 1,050 萬美元。與之前的各個時間段相比。

The increases largely reflect higher salary benefit costs including annual merit pay increases, market adjustments, higher residential mortgage lender commissions lower residential mortgage loan deferred salary costs and increased medical insurance costs.

漲幅主要反映了工資福利成本的提高，包括年度績效工資增加、市場調整、住宅抵押貸款機構佣金增加、住宅抵押貸款延期工資成本降低以及醫療保險成本增加。

Higher data processing costs also comprise a notable portion of the increased noninterest expense levels, primarily reflecting higher transaction volumes and software support costs. Along with the introduction of new cash management products and services contributions to the mercantile bank foundation totaled $1.0 million and $1.7 million during the fourth quarter and full year 2024 respectively, compared to $0.3 million and $0.7 million during the respective prior year periods.

資料處理成本的增加也是非利息支出水準增加的很大一部分，主要反映了交易量和軟體支援成本的增加。隨著新現金管理產品和服務的推出，商業銀行基金會在 2024 年第四季和全年的捐款總額分別達到 100 萬美元和 170 萬美元，而去年同期分別為 30 萬美元和 70 萬美元。

We remain a strong and well capitalized regulatory capital position. Our bank's total risk-based capital ratio was 13.9% at the end of 2024. About $214 million above the minimum threshold to be categorized as well capitalized. We did not repurchase shares during 2024. We have $6.8 million available in our current repurchase plan on slide. 23 of the presentation, we share our assumptions on the interest rate environment and key performance metrics for 2025 with the caveat that market conditions remain volatile making forecasting difficult.

我們仍然擁有強勁且資本充足的監管資本狀況。我行2024年末總創投比率為13.9%。比被歸類為資本充足的最低門檻高出約 2.14 億美元。2024 年我們沒有回購股票。我們目前的回購計劃中有 680 萬美元可用。在簡報的第 23 頁中，我們分享了對 2025 年利率環境和關鍵績效指標的假設，但需要注意的是，市場條件仍然不穩定，使得預測變得困難。

This forecast is predicated on no changes in the federal funds rate during 2025.

該預測基於 2025 年聯邦基金利率不變。

We project loan growth in a range of 5% to 7% and we are forecasting our net interest margin to be in a range of 3.3% to 3.4%. During all time periods, expected results for noninterest income and noninterest expense as well as our federal income tax rate are also provided for your reference.

我們預計貸款成長率將在 5% 至 7% 之間，淨利差預計將在 3.3% 至 3.4% 之間。在所有時間段內，我們還提供了非利息收入和非利息支出的預期結果以及聯邦所得稅率供您參考。

In closing, we are very pleased with our 2024 operating results and financial condition and believe we remain, we remain wellpositioned to continue to successfully navigate through the myriad of challenges faced by all financial institutions that concludes my prepared remarks. I'll now turn the call back over to Ray.

最後，我們對 2024 年的經營業績和財務狀況非常滿意，並相信我們仍然處於有利地位，能夠繼續成功應對所有金融機構面臨的無數挑戰，這是我準備好的發言的結束。我現在將電話轉回給雷。

Thank you, Chuck. That concludes our prepared remarks for management. We will now move to the question and answer portion of the call. (Operator Instructions)

謝謝你，查克。這就是我們為管理階層準備好的發言結束。我們現在進入通話的問答部分。（操作員指令）

Brendan Nosal with HOVDE group.

HOVDE 小組的 Brendan Nosal。

Hey, good morning guys. This is John on for Brandon.

嘿，大家早安。這是布蘭登的約翰。

Morning morning. So I wonder if we could just start with the margin. I know your your guide calls for no changes in short term rates. Can you maybe just add some color on how the margin outlook would change if we end up getting say 1 to 2 rate cuts this year?

早安，早安。所以我想知道我們是否可以從利潤開始。我知道你的指南呼籲短期利率不變。您能否解釋一下，如果今年最終降息 1 到 2 次，利潤率前景將如何變化？

Yeah, sure. This is Chuck. We've, as you would expect we've been through a lot of different scenarios as we put our budget together for the year. And if we were looking at a, one or two declines in the fed funds rate during the first half of this year, we'd be looking at somewhere a margin of about five basis points lower than what we're projecting if rates don't change.

是的，當然。這是查克。正如您所預料的，我們在製定年度預算時經歷了許多不同的情況。如果我們預計今年上半年聯邦基金利率將下降一到兩次，那麼我們會看到，如果利率不變，我們的預測值將比現在的水平低 5 個基點左右。

Very helpful. Okay. That's very helpful. And then maybe just pivoting to loan growth, the outlook looks pretty healthy and definitely keeping with what you generated in 2024 can you maybe just offer a little bit of detail on where you might be seeing pockets of strength and, and maybe areas of weakness.

非常有幫助。好的。這非常有幫助。然後也許只是轉向貸款成長，前景看起來相當健康，並且肯定與您在 2024 年創造的業績保持一致，您能否提供一些細節，說明您可能會在哪些地方看到優勢領域，也許還有哪些薄弱領域。

So this is Ray the areas of weakness, the automotive suppliers that we bank are coming out of the weakness that we've identified in prior quarters. But I'd say they're still under their average state of being. So I'd say that's probably the area that we're watching the closest, but they do report that they've picked up work and that the outlook is improving and then everything else is fairly even c and I opportunities around transition and ownership and, and the like continue to be strong. And the real estate markets that we serve are, pretty firm as well. So I'd say there really isn't much change to what we've experienced in the recent past.

所以這是 Ray 的弱點，我們所支持的汽車供應商正在擺脫我們在前幾季發現的弱點。但我想說他們仍處於平均狀態。因此我想說這可能是我們最密切關注的領域，但他們確實報告說他們已經開始了工作，前景正在改善，然後其他一切都相當均衡，圍繞過渡和所有權等方面的機會繼續保持強勁。我們服務的房地產市場也相當堅挺。因此我想說，我們最近經歷的事情實際上並沒有太大的改變。

Fantastic. That's all for me and congrats on the quarter.

極好的。對我來說這就是全部了，恭喜本季取得佳績。

Thank you.

謝謝。

Daniel Tamayo with Raymond James.

丹尼爾·塔馬約和雷蒙德·詹姆斯。

Thank you. Good morning guys.

謝謝。大家早安。

Yeah, maybe we start just on the on the loan deposit initiative. Ray, you guys have really made some some significant progress there and, and not a lot of time and, and gotten the loan deposit ratio down to 98% already. So curious, I know you've talked about in the past and that's a mid 90s range. If that's still the goal. And then you know, as we think about that bigger picture, is there any impact that that's having on loan growth in your mind? And and as you get or approach that that goal is there, is there some kind of change in the way that you would be thinking about loan or deposit growth following that? Thanks.

是的，也許我們只是從貸款存款計劃開始。雷，你們確實取得了一些重大進展，而且花費的時間不多，就已經將貸款存款率降至 98%。很好奇，我知道您過去曾談論過這個範圍，那是 90 年代中期。如果這仍然是目標的話。然後您知道，當我們考慮更大範圍的情況時，您認為這會對貸款成長產生什麼影響嗎？當您實現或接近該目標時，您對貸款或存款成長的看法會發生某種變化嗎？謝謝。

I appreciate the question. What we've tried to do is is focus on our deposit base in a way that is not to the detriment of long growth. And one of the key components of that is the rather artful way that our mortgage department has continued to meet the needs of the community in an increasing way and increase market share and yet put fewer of those on the balance sheet. So we end up in a position where we actually shrunk that portfolio slightly in this environment.

我很感謝你提出這個問題。我們試圖以不損害長期成長的方式專注於我們的存款基礎。其中一個關鍵因素是，我們的抵押貸款部門以相當巧妙的方式不斷滿足社區的需求，增加市場份額，但在資產負債表上卻減少了這些需求。因此，在這種環境下，我們實際上略微縮減了投資組合。

On the commercial side, we really haven't talked about reining that in at all, but it's more of a shift in focus to clients that have stronger deposit characteristics than average in our prospecting efforts. And as a result, we've been able to, make the mathematical moves that you see in this entire year, the first quarter of next year is a seasonally challenging one for us as tax payments and bonuses flow out of our commercial clients accounts. But we expect to continue the progress that we've made in the mid 90s is, is still the goal?

從商業方面來說，我們實際上還沒有談論過如何控制這種情況，但在我們的勘探工作中，我們更多的是將重點轉移到那些礦床特徵比平均水平更強的客戶身上。因此，我們能夠實現您在今年全年看到的數學變化，明年第一季對我們來說是一個季節性的挑戰，因為稅金和獎金將從我們的商業客戶帳戶中流出。但我們希望繼續保持 90 年代中期所取得的進展，這仍然是目標嗎？

Great. And, and do you have thoughts on what you expect to achieve or, or think is a reasonable number for deposit growth next year? This year?

偉大的。並且，您對明年存款成長的預期或合理數字有何看法？今年？

I think that to repeat this year is a tall order. So probably something, in the low double digits would be more along the lines of expectations, certainly won't stop our efforts there. But that's where our expectations lie.

我認為重複今年的任務是一項艱鉅的任務。因此，可能低於兩位數的數字更符合預期，當然不會阻止我們在那裡的努力。但這正是我們的期望。

Terrific. And then just one more for me on CRE concentration. So you had the mix shift in the loan portfolio that, that caused the that concentration to go up a little bit. I mean, you're still not at or near 300% but you're closer. Does that enter your mind as you think about lung growth? I'm just curious how you guys, I mean, you've got a slide on it but just curious how you're, how you're thinking about that in the overall. .

了不起。然後我再問一個關於 CRE 集中的問題。因此，貸款組合的混合發生了變化，導致貸款集中度略有上升。我的意思是，你還沒有達到或接近 300%，但你已經更接近了。當您考慮肺部生長時，您是否想到了這一點？我只是很好奇你們是怎麼想的，我的意思是，你們有一張幻燈片，但只是好奇你們是如何從整體上考慮這個問題的。。

Yeah, the way we haven't thought of the way we think about it hasn't changed at all. And, c and I was a little bit less at the end of this year, but we don't expect that to necessarily persist. We think our mix will remain fairly consistent in the 5,545 sort of split that we've shown for a large number of years.

是啊，我們沒有想過我們思考這個問題的方式根本沒有改變。而且，今年年底 c 和我的收入略有減少，但我們預計這種情況不一定會持續下去。我們認為，我們的組合將保持相當穩定的 5,545 比例，這是我們多年來一直堅持的。

And I'll add a somethings while it's still relatively significant. Our volume of construction loans to fund as we sit here today compared to what was, 12 and 18 months ago is down quite a bit. I would say about $100 million to $120 million.

趁它還比較重要的時候，我會添加一些內容。我們今天需要融資的建築貸款額與 12 個月和 18 個月前相比下降了不少。我認為大約是 1 億到 1.2 億美元。

So it's still a significant number, I think overall the fund, but it's not as significant because in 2024 we funded a lot of that and the pipeline just isn't quite as strong as it was in the past. So long way, long way of saying that the growth in the CRE will be a little bit lessened because of less funding of construction loans.

因此，我認為對於整個基金而言，這仍然是一個相當大的數字，但它並不那麼重要，因為在 2024 年我們已經為其中的大部分提供了資金，而且管道並不像過去那麼強大。綜上所述，由於建築貸款資金減少，商業房地產的成長將會有所減緩。

In general, housing stock is in short supply in the markets that we serve. And that's really what pushed that number slightly up.

總體而言，我們服務的市場中住房存量供應短缺。這確實使該數字略有上升。

And I think that that's still a true statement about our, our markets that they're short on housing stock. But you know, we expect our proportions to follow what we've shown historically.

我認為這仍然真實地表明我們的市場缺乏房屋存量。但你知道，我們希望我們的比例能夠遵循歷史上所顯示的比例。

Terrific. Thanks, Ray. Thanks Chuck.

了不起。謝謝，雷。謝謝查克。

Nathan Race with Piper Sandler.

內森雷斯 (Nathan Race) 與派珀桑德勒 (Piper Sandler)。

Hey guys, good morning. Hope you're staying warm lately.

嘿，大家早安。希望你最近保持溫暖。

Thanks. Just a question kind of the size of the securities portfolio going forward. Obviously, you've grown it here in 4Q and you have, still pretty strong deposit growth aspirations going forward. So just curious how you're thinking about the size of the securities portfolio going forward and what you're seeing or expecting in terms of some investment rates there.

謝謝。我只是想問一下未來證券投資組合的規模。顯然，你們在第四季度實現了存款成長，並且未來你們的存款成長願望仍然非常強勁。所以我很好奇您如何看待未來證券投資組合的規模，以及您對那裡的投資利率有何看法或期望。

Yeah, this is Chock, we're expecting continued growth in the securities portfolio this year as it is the recipient of the additional funding with deposits exceeding loans. I would expect in the long term that that probably kind of goes up to maybe the 15% 16% perhaps the 17% range and that's where we would be with a loan deposit ratio in the mid 90s. So I would expect that, if we keep loan deposits around the mid 90s, which is likely our expectation, at least in the near term, the securities portfolio would be somewhere in that 15% to 17% range. Part of that is how much money we continue to keep at the Federal reserve. When we look at on balance sheet liquidity, we look at the environment regulatory encouragement and those types of things. If we bring that down, it might add another basis point or two to the Secures portfolio, but at least in the short term, say 2025 we expect our on balance sheet liquidity, primarily that balance of the fed to remain relatively high.

是的，這是 Chock，我們預計今年證券投資組合將繼續成長，因為它獲得的額外資金超過存款超過貸款。我預計，從長遠來看，這一比例可能會上升到 15%、16% 甚至 17% 左右，而貸款存款比率可能會達到 90 年代中期的水平。因此，我預計，如果我們將貸款存款保持在 90% 左右，這很可能是我們的預期，至少在短期內，證券投資組合將保持在 15% 到 17% 的範圍內。其中一部分是我們繼續在聯邦儲備委員會保留多少錢。當我們查看資產負債表流動性時，我們會查看環境監管鼓勵等類型的東西。如果我們降低這一水平，可能會為擔保投資組合增加一兩個基點，但至少在短期內，例如 2025 年，我們預計資產負債表上的流動性，主要是聯準會的餘額將保持相對較高的水平。

Got it. That's helpful. And just going back to the margin discussion, curious how we can kind of think about the trajectory of loan yields just given what you're seeing in terms of new loan pricing these days, assuming the fed remains on pause at least over the next quarter or two.

知道了。這很有幫助。回到保證金的討論，我很好奇，鑑於目前新貸款定價的情況​​，假設聯準會至少在未來一兩個季度內保持暫停升息，我們如何看待貸款收益率的走勢。

Yeah, I think, we continue to be very vigilant in how we price loans. That's something we learned during the great recession is that we needed to be vigilant and making sure that we were getting paid for the risk and obviously taking into account our cost of funds. So I think our loan pricing when we look at our spread, which a lot of that's driven by the loan grade obviously as well as competition. I think we continue as we employ that formula and we maintain our discipline.

是的，我認為，我們對貸款定價方式會繼續保持高度警覺。我們在經濟大衰退期間學到的是，我們需要保持警惕，確保我們能夠獲得風險補償，當然也要考慮到我們的資金成本。因此，我認為，當我們考慮利差時，我們的貸款定價顯然很大程度上是由貸款等級以及競爭決定的。我認為我們會繼續採用這個模式並保持我們的紀律。

I think we've continued to get the loan rates that are commensurate with the risk as well as what's going on with market rates. So really no concern on how we're pricing loans and then on the deposit side, especially with growth, a lot of our loans are floating rate as we talk about a lot.

我認為我們將繼續獲得與風險和市場利率相稱的貸款利率。因此，我們實際上不必擔心如何為貸款定價，而在存款方面，特別是隨著增長，正如我們所談論的，我們的許多貸款都是浮動利率。

But what we have seen is on the deposit side of that deposit structure, especially with the growth in the money market, which in large is not legally, very little of it's legally tied to fed funds rate, but the way we manage it will be tied to fed funds rate. We get some really good strong matching regardless of what rates do.

但我們看到的是，在存款結構的存款方面，特別是貨幣市場的成長，在很大程度上並不是合法的，它很少與聯邦基金利率掛鉤，但我們管理它的方式將與聯邦基金利率掛鉤。無論利率如何，我們都會得到一些非常好的強匹配。

And again, our goal is to be as interest rate agnostic as we possibly can to build our balance sheet that whether rates go up or down or sideways, whatever they do, that has a nominal impact on our net interest margin. And then really, think that that's, that's, that's our strategy and we think that that makes sense. And I think what we've seen over the last couple of years, especially 2024 that that is a successful strategy for us.

再說一次，我們的目標是盡可能不受利率影響地建構我們的資產負債表，無論利率是上升、下降或橫向波動，都會對我們的淨利差產生名目影響。然後真的，認為那是，那是，那是我們的策略，我們認為那是有意義的。我認為，我們在過去幾年，特別是 2024 年看到，這對我們來說是一個成功的策略。

Okay, great. Thanks for that, Chuck and maybe one last one for me, just curious how, comfortable you guys are allowing capital levels to build over the course of this year before, maybe before, maybe contemplating some more significant deployment of excess capital. Just any thoughts on just kind of the comfort range for maybe TC or some of the other capital levels as 2025 progresses.

好的，太好了。謝謝你，查克，也許我還有最後一個問題，我只是好奇，在考慮更重要的過剩資本部署之前，你們在今年內允許資本水準上升的程度如何？您對於 2025 年到來時 TC 或其他一些資​​本水準的舒適範圍有何看法？

Yeah, I think, I don't really foresee any significant change in our capital the way that we've been managing it, certainly in 2024. And I would say before that least a year or two, we want to be very judicious in maintaining, I would say relatively strong capital ratios. I think for most of that is just to make sure we're supporting our loan growth, 5% to 7% loan growth is still, a very solid number. And of course, it takes capital to manage that.

是的，我認為，我確實預計我們的資本管理方式不會發生任何重大變化，至少在 2024 年不會。我想說，至少在一兩年之前，我們希望非常明智地維持相對強勁的資本比率。我認為其中大部分只是為了確保我們能夠支持貸款成長，5％至7％的貸款成長率仍然是一個非常穩健的數字。當然，實現這一點需要資本。

You know, we do, we have and we announced today that we continue to increase our cash dividend. We typically do that twice a year and don't have any plans to change that. Notwithstanding, obviously, anything that's going on with our performance or anything in the marketplace. So I would say if you looked at our capital position, we look at our growth rate and our overall earnings expectations is that our capital will remain relatively steady as we go forward, that our retained earnings basically supports our capital growth, Rxs loan growth and overall asset growth. And we're pretty comfortable with where the capital ratios are at currently.

你知道，我們確實在這麼做，而且我們今天宣布我們將繼續增加現金股利。我們通常每年都會這樣做兩次，並且不打算改變這一點。顯然，無論我們的表現或市場上發生什麼情況。因此，我想說，如果你看一下我們的資本狀況，看看我們的成長率和我們的整體獲利預期，我們的資本在未來將保持相對穩定，我們的留存收益基本上支持我們的資本成長、Rxs 貸款成長和整體資產成長。我們對目前的資本比率非常滿意。

Okay, great. I appreciate all the color. Thanks guys.

好的，太好了。我欣賞這一切的色彩。謝謝大家。

You're welcome.

不客氣。

(Operator Instructions)

（操作員指令）

Damon Delmonte with KBW.

達蒙·德爾蒙特 (Damon Delmonte) 和 KBW。

Hey, good morning guys. Hope you guys are all doing well and the new year is off to a good start. Just a couple of quick follow ups here. And you know, as we think about credit and provisioning, obviously very strong credit trends with very low NPL S and seems like the underlying trends continue to support that kind of outlook. So how Chuck, could you give us a little insight on how to think about the provision going forward? Seems like it'll just be driven by the pace of loan growth. Is that a fair way to look at it?

嘿，大家早安。祝大家一切順利，新的一年有一個好的開始。這裡僅有幾個快速的後續問題。你知道，當我們考慮信貸和撥備時，顯然信貸趨勢非常強勁，不良貸款率非常低，而且似乎潛在趨勢繼續支持這種前景。那麼，查克，您能否向我們介紹如何考慮未來的規定？看起來它只是受貸款成長速度的推動。這是一個公平的看法嗎？

That's the way that we're looking at Damon, is that a large percent of the provision that we're expecting for 2025 is necessitated by loan growth. We think the economic environment will be, will remain relatively stable, knock on wood. So we don't see a lot of provision one way or the other because of great changes in those types of trends that we might see in the loan portfolio.

這就是我們看待達蒙的方式，我們預計 2025 年的撥備中很大一部分是由貸款成長所必需的。我們認為經濟環境將會保持相對穩定。因此，我們看不到大量的撥備，因為我們可能會在貸款組合中看到這些趨勢發生很大變化。

And yeah, we're budgeting, and is what we have seen from this company for a decade now. Is relatively low loan losses and we think that will looking at our our current asset quality again, an expected steady economic environment, at least in the near term, we expect a pretty low level of net charge offs for 2025.

是的，我們正在做預算，這也是我們十年來從這家公司看到的。貸款損失相對較低，我們認為，再次審視我們當前的資產質量，預期穩定的經濟環境，至少在短期內，我們預計 2025 年的淨沖銷水平將相當低。

Okay, great. And then I know there's seasonality here through the winter months with mortgage banking. But could you just give us an update on the mortgage banking pipeline and kind of, with the shift in the approach to that business line, kind of what the outlook is for for '25.

好的，太好了。然後我知道冬季的幾個月裡，抵押銀行業務存在季節性。但是，您能否向我們介紹一下抵押貸款銀行業務的最新情況，以及隨著該業務線方法的轉變，2025 年的前景如何。

So the current state of the pipeline is, I'd say seasonally strong, it's held up quite well through this quarter and in spite of a material deterioration in the weather and the ability to, view a home that you consider purchasing. And I think I'll let Chuck speak to how we view that and factor it into next year.

因此，我認為目前的通路狀況是季節性強勁，儘管天氣狀況和查看您考慮購買的房屋的能力大幅惡化，但本季的通路狀況仍然保持良好。我想我會讓查克談談我們如何看待這個問題並將其納入明年的考慮範圍。

Yeah, I think if you look at, the guidance that we give on page 23 I think when you look at that change quarter to quarter in fee income, that really is reflective of the seasonality of the mortgage operation.

是的，我認為，如果您看一下我們在第 23 頁給出的指導，當您查看費用收入的季度變化時，這確實反映了抵押貸款業務的季節性。

Got it. Okay. Great. And then I guess just lastly kind of a modeling question here for your guidance for the tax rate is 19% next year. This quarter was, was lower. Was it just some year end true up items that could cause a lower tax rate this quarter?

知道了。好的。偉大的。然後我想最後一個模型問題是，您對明年稅率的指導是 19%。本季的情況較低。是否只是一些年終調整的項目才會導致本季的稅率降低？

Yeah, mostly some true up. And it was really related to what we started about 18, almost 24 months ago is our, our activity associated with low income housing tax credits and historical tax credits.

是的，大部分都是真實的。這實際上與我們大約 18 到 24 個月前開始的活動有關，即與低收入住房稅收抵免和歷史稅收抵免相關的活動。

That operation has gone fantastically, we're very, very happy with the trends that we see and those types of things take a while before they start selling into our income statement. And we saw some of that happening in 2024 but really didn't book much of that until the last quarter as we made sure that we understood the entries and the performance of the activities that we're engaged in. We think that that will continue to be, an increasing impact on our overall profitability. And we see that with the tax rate of say that was 20% over the last few years getting down to 19%. And we're hopeful that as we go forward and that operation continues to be successful, that we can bring that rate down even more. But for the, for the fourth quarter, there was definitely some true up and most of that was related to those activities.

這項業務進展非常順利，我們對看到的趨勢非常滿意，而這些類型的東西需要一段時間才能開始計入我們的損益表。我們看到其中一些發生在 2024 年，但直到最後一個季度才真正記錄下來，因為我們確保我們了解我們所從事的活動的條目和表現。我們認為這將繼續對我們的整體獲利能力產生越來越大的影響。我們看到，稅率從過去幾年的 20% 下降到了 19%。我們希望，隨著我們的前進和行動繼續取得成功，我們可以進一步降低這個比率。但就第四季而言，肯定存在一些實際上漲，其中大部分與這些活動有關。

Got it great. That's all that I had a nice quarter. Thank you.

太棒了。這就是我度過的愉快季度。謝謝。

Thanks, Damon. Thank you.

謝謝，達蒙。謝謝。

This concludes our question and answer session. I would like to turn the conference back over to Ray Reitsma for any closing remarks.

我們的問答環節到此結束。我想將會議交還給 Ray Reitsma 做最後發言。

Thank you for your, for your participation in today's call and for your interest in the bank that concludes today's call.

感謝您參加今天的電話會議，並感謝您對今天電話會議結束時銀行的關注。

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。