Midwestone Financial Group Inc (IOWA) (MOFG) 2024 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the MidWestOne Financial Group, Inc. second-quarter 2024 earnings call. (Operator Instructions)

女士們、先生們，早安，歡迎參加 MidWestOne Financial Group, Inc. 2024 年第二季財報電話會議。（操作員指示）

As a reminder, this call is being recorded. I would now like to turn the call over to Barry Ray, Chief Financial Officer of MidWestOne Financial Group.

提醒一下，本次通話正在錄音。現在我想把電話轉給 MidWestOne 金融集團財務長 Barry Ray。

Thank you, everyone, for joining us today. We appreciate your participation in our earnings conference call this morning. With me here on the call are Chip Reeves, our Chief Executive Officer; Len Devaisher, our President and Chief Operating Officer; and Gary Sims, our Chief Credit Officer.

感謝大家今天加入我們。感謝您參加我們今天上午的收益電話會議。和我一起參加電話會議的還有我們的執行長 Chip Reeves； Len Devaisher，我們的總裁兼營運長；以及我們的首席信貸官 Gary Sims。

Following the conclusion of today's conference, a replay of this call will be available on our website. Additionally, a slide deck to complement today's presentation is also available on the Investor Relations section of our website.

今天的會議結束後，本次電話會議的重播將在我們的網站上提供。此外，我們網站的投資者關係部分還提供了一份與今天的簡報相輔相成的幻燈片。

Before we begin, let me remind everyone on the call that this presentation contains forward-looking statements relating to the financial condition, results of operations, and business of MidWestOne Financial Group, Inc. Forward-looking statements generally include words such as believes, expects, anticipates, and other similar expressions. Actual results could differ materially from those indicated.

在我們開始之前，請允許我提醒電話會議中的每個人，本簡報包含與 MidWestOne Financial Group, Inc. 的財務狀況、經營業績和業務有關的前瞻性陳述。前瞻性陳述通常包括相信、預期、預期和其他類似的表達。實際結果可能與所示結果有重大差異。

Among the important factors that could cause actual results to differ materially are interest rates, changes in the mix of the company's business, competitive pressures, general economic conditions, and the risk factors detailed in the company's periodic reports and registration statements filed with the Securities and Exchange Commission.

可能導致實際結果出現重大差異的重要因素包括利率、公司業務組合的變化、競爭壓力、總體經濟狀況以及公司向美國證券交易委員會提交的定期報告和註冊聲明中詳述的風險因素。

MidWestOne Financial Group, Inc. undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances after the date of this presentation. I would now like to turn the call over to Chip.

MidWestOne Financial Group, Inc. 不承擔公開修改或更新這些前瞻性聲明以反映本簡報發布日期之後的事件或情況的義務。現在我想把電話轉給 Chip。

Thank you, Barry. Good morning, and we truly appreciate everyone joining us for this quarter's call. Today I'll provide a high-level overview of our second quarter results as well as an update on the continued execution of our strategic plan initiatives. Len will provide an update on our lines of business, and Barry will conclude with a more detailed review of our second quarter financial results.

謝謝你，巴里。早安，我們非常感謝大家參加本季的電話會議。今天，我將概述我們的第二季業績以及我們策略計畫舉措持續執行的最新情況。Len 將提供有關我們業務線的最新情況，而 Barry 將對我們的第二季財務業績進行更詳細的回顧。

Our first strategic pillar relates to employee and customer engagement. I'm so proud of our team members for their expertise and flat out hard work these first six months of 2024. We continue to transform this institution, and even amidst some significant change, MidWestOne was once again honored to be named a 2024 top workplace in Iowa and the USA. The quarter was highlighted by the completion of our geographic realignment announced last September with a successful divestiture of our Florida operations for an attractive net deposit premium.

我們的第一個策略支柱與員工和客戶參與有關。我為我們團隊成員在 2024 年上半年的專業知識和辛勤工作感到非常自豪。我們繼續改變這個機構，即使在一些重大變化中，MidWestOne 再次榮幸地被評為 2024 年愛荷華州和美國最佳工作場所。本季度的亮點是我們去年 9 月宣布的地理調整的完成，成功剝離了佛羅裡達業務，並獲得了相當吸引力的淨存款溢價。

Turning to our balance sheet trends, excluding Florida divested balances, we delivered 3% annualized loan growth. This was accomplished even with significant paydowns, including many of which were classified or criticized loans.

談到我們的資產負債表趨勢，不包括佛羅裡達州的剝離餘額，我們實現了 3% 的年化貸款成長率。即使償還了大量債務，其中許多都是機密或受到批評的貸款，但這一目標仍然實現。

We continue to benefit from the expansion of our major market banking teams and our unique customer value proposition. Additionally, deposits were stable and deposit costs were well controlled. We remain cautiously optimistic that we will grow our core deposit franchise in the latter half of 2024.

我們繼續受益於主要市場銀行團隊的擴張和獨特的客戶價值主張。此外，存款穩定，存款成本得到良好控制。我們仍然謹慎樂觀地認為，我們的核心存款業務將在 2024 年下半年成長。

Importantly, due to well-priced loan growth, repricing opportunities, and controlled deposit costs, our net interest margin expanded an additional 8 basis points in the quarter, leading to a 5% quarterly increase in our net interest income. Len will discuss progress and results in our commercial banking and wealth management business. So I'll just simply notate that I'm very pleased with the trajectory of both businesses.

重要的是，由於貸款成長定價合理、重新定價機會以及存款成本得到控制，我們的淨利差在本季度又擴大了 8 個基點，導致我們的淨利息收入按季度增長 5%。Len 將討論我們的商業銀行和財富管理業務的進展和成果。因此，我只想簡單地說，我對這兩家公司的發展軌跡感到非常滿意。

Regarding credit, asset quality metrics trended positively for the quarter with limited charge-offs, lower NPAs, and significantly reduced classified assets. The first half of 2024 has seen significant talent acquisition across our bank as we continue to mature and expand our operations consistent with our strategic plan. This quarter, senior hires include our new Chief Information Officer, our new Chief Marketing Officer, and our new Cedar Rapids Commercial Banking Leader. All of these critical hires join from leading regional financial institutions.

就信貸而言，本季資產品質指標呈現正面趨勢，沖銷金額有限，不良資產減少，分類資產大幅減少。隨著我們按照策略計畫不斷成熟和擴大業務，2024 年上半年，我們全行都進行了大規模的人才招募。本季度，我們聘用的高級職員包括新任資訊長、新任首席行銷長以及新任錫達拉皮茲商業銀行負責人。所有這些關鍵員工均來自領先的區域金融機構。

Even with significant talent and platform investments, we remain pleased with our expense discipline as we funded the majority of these investments by reallocating expense reductions into more productive and profitable people, markets, and departments. To conclude, we've made substantial progress in the transformation of MidWestOne, positioning the bank for improved earnings power and returns and I remain very optimistic on what the future holds for our employees and shareholders.

即使在人才和平台方面投入了大量資金，我們仍然對我們的費用控制感到滿意，因為我們透過將減少的費用重新分配給更有生產力和盈利能力的人員、市場和部門來為這些投資提供大部分資金。總而言之，我們在 MidWestOne 的轉型方面取得了實質進展，為提高銀行的獲利能力和回報奠定了基礎，我對我們員工和股東的未來仍然非常樂觀。

Now I'd like to turn the call over to Len.

現在我想把電話轉給 Len。

Thanks, Chip. First, I'll provide an update on our deposit business. It is most helpful to look at the core deposits, excluding the Florida divestiture. On that basis, we were pleased to see balance increases in both May and June. Unfortunately, those increases were not enough to offset April's deposit outflows. So the net result is an essentially flat quarter.

謝謝，Chip。首先，我將介紹我們的存款業務的最新情況。查看核心存款（不包括佛羅裡達州的資產剝離）是最有幫助的。基於此，我們很高興看到 5 月和 6 月的餘額均有所增加。不幸的是，這些增長不足以抵消四月份的存款流出。因此，最終結果是本季基本持平。

Encouragingly, we saw growth in commercial deposits across the quarter, and our year-to-date net new account metrics are positive across our consumer and commercial customer segments. Perhaps most importantly, that positive net new account trend holds for checking accounts, as well as all account types.

令人鼓舞的是，我們看到本季商業存款有所成長，而且我們年初至今的淨新帳戶指標在消費者和商業客戶領域都呈現正面態勢。也許最重要的是，支票帳戶以及所有類型的帳戶都呈現出積極的淨新帳​​戶趨勢。

Our commercial banking franchise continues to drive the earning asset growth. While the headline loan growth number was a modest 3%. It is important to note that our past grade commercial loan balances grew at a rate of 6% on a linked quarter annualized basis. The reductions in criticized and classified assets in the second quarter improved the risk profile of our balance sheet, while the growth engine for our commercial business remains firmly engaged. That growth engine remains disciplined by a strong risk management approach, and that is showing up in our mix.

我們的商業銀行業務持續推動獲利資產的成長。而整體貸款成長率僅3%。值得注意的是，我們過去的商業貸款餘額按季度年化率增加了 6%。第二季受批評和分類資產的減少改善了我們資產負債表的風險狀況，同時我們商業業務的成長引擎仍然堅定地發揮作用。這一成長引擎仍然受到強有力的風險管理方法的約束，而這在我們的組合中得到了體現。

C&I growth rates are more than double CRE growth rates. Notably, this C&I growth is despite a small decline in line usage. This reflects our concentrated efforts at growing our C&I segment with an emphasis on full relationships. Those efforts are showing up in other places too, including treasury management analysis fees growing 6.3% year over year and a strong partnership between commercial and our wealth management business.

C&I 成長率是 CRE 成長率的兩倍以上。值得注意的是，儘管線路使用量略有下降，但 C&I 仍實現了成長。這反映了我們致力於發展 C&I 部門並專注於建立全面關係的努力。這些努力也體現在其他地方，包括財務管理分析費同比增長 6.3% 以及商業和財富管理業務之間建立的強大合作夥伴關係。

Speaking of wealth management, we're very pleased to see the 15.8% increase in revenues for the first half of 2024 compared to the same period in the prior year as assets under administration continue to climb. In the second quarter we added another private wealth relationship manager in Cedar Rapids who joined us from a large, regional competitor.

說到財富管理，我們很高興地看到，隨著管理資產規模的持續攀升，2024 年上半年的營收與去年同期相比成長了 15.8%。第二季度，我們在錫達拉皮茲增加了另一位私人財富關係經理，他來自我們一家大型地區競爭對手。

We continue to see strong pipeline activity across this business-line. And we remain focused on adding talent under the wealth leader we recruited in January of this year. Finally, my thanks to the IT and operations team who delivered a seamless divestiture of our Florida branches, generating a handsome deposit premium to bolster our capital.

我們繼續看到該業務線上的強勁活動。我們將繼續致力於在今年一月招募的財富領袖的領導下增加人才。最後，我要感謝 IT 和營運團隊，他們順利剝離了我們的佛羅裡達分支機構，產生了可觀的存款溢價，增強了我們的資本。

With that, I'm pleased to turn the call over to Barry.

說完這些，我很高興將電話轉給巴里。

Thank you, Len. The sale of our Florida operations created some noise in our second-quarter financial results, so I'll attempt to chart a path to our quarterly core results. Beginning with the balance sheet on slide 12, loans decreased $127.4 million or 3% from the linked quarter to $4.29 billion. Excluding the $163.6 million of loans sold in the Florida divestiture, loan growth was $36.2 million or 3% annualized from the linked quarter.

謝謝你，Len。出售我們的佛羅裡達業務為我們第二季的財務表現帶來了一些影響，因此我將嘗試繪製我們季度核心業績的路線圖。從第 12 張投影片上的資產負債表開始，貸款較上一季減少了 1.274 億美元，降幅為 3%，至 42.9 億美元。不包括在佛羅裡達州資產剝離中出售的 1.636 億美元貸款，貸款成長率為 3,620 萬美元，較上一季成長 3%。

Strength in the second quarter was led by commercial and industrial loans, which increased $17.9 million or 7% annualized from the linked quarter in commercial real estate which increased $18.7 million or 3% annualized from the linked quarter.

第二季的強勁表現得益於商業和工業貸款，較上一季增加了 1,790 萬美元，年化成長率為 7%；商業房地產貸款較上一季增加了 1,870 萬美元，年化成長率為 3%。

The allowance for credit losses decreased $2 million to $53.9 million or 1.26% of loans held for investment at June 30. The decrease reflected $1.9 million of allowance reductions related to the sale of our Florida operations and net loan charge-offs of $524,000 or 5 basis points annualized from the linked quarter, partially offset by $467,000 in loan credit loss expense.

截至 6 月 30 日，信貸損失準備金減少 200 萬美元至 5,390 萬美元，佔投資貸款的 1.26%。這一減少反映了與出售我們的佛羅裡達業務有關的 190 萬美元的撥備減少，以及 524,000 美元的淨貸款沖銷或與上一季度相比年化 5 個基點，部分被 467,000 美元的貸款信用損失費用所抵消。

The $1.9 million allowance reduction increased the net gain on sale recognized in connection with the Florida sale. Goodwill decreased $1.7 million from March 31, 2024. That decrease reflected the goodwill associated with our Florida operations and the $1.7 million write-off reduced the related net gain on sale by that amount.

190 萬美元的減損準備金減少了與佛羅裡達州銷售相關的銷售淨收益。商譽自 2024 年 3 月 31 日起減少 170 萬美元。這一減少反映了與我們佛羅裡達州業務相關的商譽，而 170 萬美元的註銷使相關的銷售淨收益減少了該數額。

Turning to deposits, total deposits declined to $5.41 billion on June 30. Excluding the $133.3 million of deposits transferred in the Florida divestiture, period-end deposit balances were down $39.5 million from March 31, as net deposit growth in May and June was more than offset by net deposit outflows in the month of April.

談到存款，6 月 30 日總存款下降至 54.1 億美元。不包括佛羅裡達州資產剝離中轉移的 1.333 億美元存款，期末存款餘額較 3 月 31 日下降 3950 萬美元，因為 5 月和 6 月的淨存款增長被 4 月份的淨存款流出所抵消。

Slide 13 of the presentation illustrates that average deposit balances increased $33.8 million quarter over quarter, and our bankers remain focused on growing our deposit franchise. Finishing the balance sheet, total shareholders' equity increased $15.2 million to $543.3 million due primarily to retained earnings and a decrease in accumulated other comprehensive loss. The tangible common equity ratio was 6.88% at June 30, 2024 up 45 basis points from March 31, 2024, as tangible equity growth outpaced tangible asset growth.

簡報的第 13 張投影片顯示，平均存款餘額環比增加了 3,380 萬美元，我們的銀行家仍然專注於擴大我們的存款特許經營權。完成資產負債表後，股東權益總額增加 1,520 萬美元至 5.433 億美元，主要原因是留存收益和累計其他綜合損失的減少。2024 年 6 月 30 日有形普通股權益的比率為 6.88%，較 2024 年 3 月 31 日上升 45 個基點，因為有形權益成長超過有形資產成長。

Turning to the income statement on slide 15. We earned net income of $15.8 million or $1 per diluted common share. Those results included on a pretax basis and a $11.1 million net gain from the Florida sale, merger related expenses of $854,000, and a positive mortgage servicing right adjustment of $129,000. Adjusting for these items adjusted net income was $8.2 million or $0.52 per diluted common share.

轉到投影片 15 上的損益表。我們的淨收入為 1580 萬美元，即每股攤薄普通股 1 美元。這些結果包括稅前收入和佛羅裡達州銷售的 1,110 萬美元淨收益、854,000 美元的合併相關費用以及 129,000 美元的正抵押貸款服務權調整。經這些項目調整後的淨收入為 820 萬美元，即每股攤薄普通股 0.52 美元。

Net interest income increased $1.6 million in the second quarter to $36.3 million as compared to the linked quarter, due primarily to higher earning asset volumes and yields, partially offset by higher funding costs and volumes of interest-bearing liabilities. Loan interest income in the second quarter of 2024 included $1.3 million of loan purchase discount accretion compared to $1.2 million in the linked quarter.

與上一季相比，第二季淨利息收入增加了 160 萬美元，達到 3,630 萬美元，這主要歸因於生息資產數量和收益率的提高，但被融資成本和計息負債數量的增加部分抵消。2024 年第二季的貸款利息收入包括 130 萬美元的貸款購買折扣增值，而上一季為 120 萬美元。

Our tax equivalent net interest margin increased 8 basis points to 2.41% in the second quarter compared to 2.33% in the linked quarter, as a 16-basis-point increase in earning asset yields was only partially offset by a 10-basis-point increase in interest-bearing liability costs. The average loan portfolio yield for the second quarter was 5.69%, an 18-basis-point improvement from the linked quarter. The average yield on new loan originations during the second quarter was 7.82%, up 10 basis points from the linked quarter.

我們的稅收等值淨息差在第二季度增加了 8 個基點，達到 2.41%，而上一季度為 2.33%，這是因為生息資產收益率增加了 16 個基點，但僅被計息負債成本增加了 10 個基點部分抵消。第二季平均貸款組合收益率為5.69%，較上一季提高18個基點。第二季新發放貸款平均收益率為7.82%，較上一季上升10個基點。

On the liability side, total deposit costs increased 8 basis points from the linked quarter to 2.11% as funding cost pressures persist. For the month of June 2024, average loan yields were 5.75%, average total deposit costs were 2.16%, and the tax equivalent net interest margin was 2.42%.

負債方面，由於融資成本壓力持續存在，總存款成本較上季上升8個基點至2.11%。2024 年 6 月，平均貸款收益率為 5.75%，平均總存款成本為 2.16%，稅收等值淨利差為 2.42%。

Non-interest income in the second quarter of 2024 increased $11.8 million from the first quarter of 2024, due primarily to the $11.1 million gain on the Florida sale and the $497,000 swing in mortgage servicing right valuation adjustments. Also, contributing to the quarter-over-quarter increase was an additional $0.3 million recognized in connection with our customer back-to-back swap program.

2024 年第二季的非利息收入較 2024 年第一季增加了 1,180 萬美元，主要原因是佛羅裡達州出售收益 1,110 萬美元，以及抵押貸款服務權估值調整的 497,000 美元波動。此外，與我們的客戶背對背交換計畫相關的額外 0.3 百萬美元也促成了季度環比的成長。

Finishing with expenses, total non-interest expense in the first quarter was $35.8 million, an increase of $0.2 million or 1% from the linked quarter. Digging deeper into that change, an $860,000 quarter-over-quarter increase in core expenses was partially offset by a $460,000 reduction in merger-related costs and a $204,000 reduction in nonmerger-related severance costs.

加上費用，第一季非利息總支出為 3,580 萬美元，比上一季增加 20 萬美元，增幅為 1%。深入研究這一變化，核心支出環比增加 860,000 美元，但被合併相關成本減少 460,000 美元和非合併相關遣散費用減少 204,000 美元所部分抵消。

The $860,000 core expense increase was due primarily to a full quarter of costs associated with the former Bank of Denver operations, coupled with additional legal and professional costs, and other expenses including loan expenses and operating losses.

核心支出增加 86 萬美元主要是因為與前丹佛銀行營運相關的整整四分之一的成本，加上額外的法律和專業費用，以及包括貸款費用和營運損失在內的其他費用。

As a reminder, our former Florida operations accounted for about $700,000 per quarter in expenses. So with the divestiture completed in June of 2024, we expect to realize that savings in our go-forward expense run rate. Expense control remains a focus of our management team, and we're very pleased with our execution.

提醒一下，我們以前在佛羅裡達州的業務每季的支出約為 70 萬美元。因此，隨著 2024 年 6 月資產剝離的完成，我們預計未來費用運行率將實現節省。費用控制仍然是我們管理團隊關注的重點，我們對我們的執行情況非常滿意。

And with that, I'll turn it back to the operator to open the line for questions.

說完這些，我將把電話轉回給接線生，以便大家可以提問。

(Operator Instructions) Brendan Nosal, Hovde Group.

（操作員指示）Brendan Nosal，Hovde 組。

Hi, good morning, folks. Hope you doing well. I just want to start off here on a top-level note. You guys have done a lot of heavy lifting as part of the strategic plan. It feels like a lot of the pieces are more or less in place now, especially with the Florida exit complete. Just curious at this stage, what areas of your initiatives do you have the most enthusiasm for? And which ones do you think can make the most impact to the bottom-line?

大家早安。希望你一切順利。我只是想從最高層次開始講一下。作為策略計劃的一部分，你們做了很多繁重的工作。現在感覺很多事情都或多或少已經到位，尤其是佛羅裡達退出協議已經完成。只是在這個階段好奇，您對哪些領域的舉措最感興趣？您認為哪些因素對底線影響最大？

Yes, Brendan, this is Chip. I'll go first and probably turn it over to Len. But I would look at our commercial banking enterprise, as well as our wealth management enterprise and initiatives that we have there. Both are -- the trajectory is good. We will continue to invest in those areas. And I'm feeling very comfortable and good about those business lines. Len, anything?

是的，布倫丹，這是奇普。我先來，然後可能把它交給 Len。但我會關注我們的商業銀行企業以及我們的財富管理企業和我們在那裡開展的舉措。兩者都是——軌跡很好。我們將繼續在這些領域進行投資。我對這些業務線感到非常滿意和滿意。Len，有什麼事嗎？

Yeah, I would echo that. And I would -- as a point of reference, our Board meeting this week we held out in Denver with the team there. Clearly, our investment there and our outlook for the Colorado market is a good example of where I see a lot of runways.

是的，我同意你的看法。而我想——作為參考，本週我們的董事會會議是在丹佛與那裡的團隊一起舉行的。顯然，我們在那裡的投資以及我們對科羅拉多市場的展望就是一個很好的例子，我看到了很多跑道。

Yeah. Perfect. One more for me before I step back. Just wondering whether there's anything else you guys have thought of doing with the securities portfolio heading into year-end that might help the margin move higher.

是的。完美的。在我退後之前，再說一次。只是想知道你們是否還想過在年底前對證券投資組合採取其他措施來幫助提高保證金。

Yeah, Brendan. We continue to evaluate opportunities where we might be able -- where it might make sense for us to do something with the bond portfolio. There is certainly nothing I would say that we are looking at closely right now, but we continue to evaluate it, I'd say, on a quarterly basis.

是的，布倫丹。我們將繼續評估可能的機會—評估可能對我們利用債券投資組合採取某些行動有意義的機會。我當然不會說我們現在正在密切關注什麼，但我們會繼續按季度進行評估。

All right, great. Thank you for taking the questions.

好的，太好了。感謝您回答這些問題。

Terry McEvoy, Stephens.

特里·麥克沃伊，史蒂芬斯。

Thanks. Good morning, everybody. Barry, maybe if you could start with your outlook for quarterly expenses, just a lot of moving parts to the last couple of quarters. And as you continue to invest in certain lines and individuals, as you talked about earlier. Any kind of thoughts on that quarterly expense run rate?

謝謝。大家早安。巴里，也許您可以從季度支出的展望開始，看看過去幾季發生的變化。正如您之前提到的，您將繼續對某些線路和個人進行投資。對於季度費用運行率有什麼看法？

Yes, Terry, I think that in the near term, over the next couple of months with all the noise from Florida and Denver, I think we're probably going to land somewhere in the $34 million to $34.5 million range per quarter over the next couple of quarters is what I would expect. And then as we continue to invest and get into 2025, with the typical kind of year-end increases, we'll have a higher run rate there but 34% to 35% in the near-term.

是的，特里，我認為在短期內，在接下來的幾個月裡，隨著佛羅裡達和丹佛的所有喧囂，我認為我們可能會在接下來的幾個季度內每季度達到 3400 萬美元到 3450 萬美元的水平，這是我所期望的。然後，隨著我們繼續投資並進入 2025 年，隨著典型的年底增長，我們的運行率將更高，但短期內將達到 34% 至 35%。

Thanks for that. And then when I just look at -- I look at page 4 and the Denver market, four offices but $660 million of commercial loans. My question is, what type of investments do you need to make in that market to get to the necessary scale? Do you need more locations? Or can this really be a kind of a commercial hub out of -- with a limited footprint?

謝謝。然後，當我查看——我查看第 4 頁和丹佛市場，四個辦事處，但商業貸款金額為 6.6 億美元。我的問題是，您需要在該市場進行哪些類型的投資才能達到必要的規模？您需要更多地點嗎？或者這真的可以成為一種佔地面積有限的商業中心嗎？

Terry, this is Chip. Our strategy there will likely be a branch light strategy, and then commercial and wealth heavy. So the commercial banking enterprise, we have stated in some prior -- previous calls of additions that we've made, we are looking to incrementally add to the commercial banking enterprise and then also begin to add over the next couple of quarters wealth management into that market, too.

特里，這是奇普。我們的策略很可能是先採取輕分枝策略，然後再採取重商業和財富策略。因此，對於商業銀行企業，我們在之前的一些增加電話會議中已經提到過，我們希望逐步擴大商業銀行企業，然後在接下來的幾個季度內開始將財富管理也添加到該市場中。

Thanks. And then maybe just one last one. Could you share any financial targets on wealth management? Looking at the slide, a lot of investment, a lot going on, what would you like that business to be relative to total revenue or size or growth, anything would be helpful?

謝謝。然後也許只剩下最後一個了。可以分享一下財富管理方面的財務目標嗎？看看幻燈片，有很多投資，有很多事情要做，您希望該業務相對於總收入或規模或成長是什麼樣的，任何事情都會有幫助嗎？

Sure, Terry. This is Len. I would just tell you that pleased with where we are at the first half of the year, and, of course, as you think about that, there is two main levers or factors. So one is the market and that's obviously helped us, but importantly, when I think about net new assets and new client acquisition.

當然，特里。這是 Len。我只想告訴你們，我們對今年上半年的狀況感到滿意，當然，你們想想，有兩個主要的槓桿或因素。一方面是市場，這顯然對我們有幫助，但更重要的是，當我考慮淨新資產和新客戶獲取時。

So we are focused on the latter obviously, and to Chip's point, adding talent to help us do so. And from a target, I'd say, we have less of an asset under administration target more of a revenue target. Obviously, we've been at the 3.5 in the last two quarters, pleased with that number. As I look longer -- medium horizon, I would like to see in the high-single to low double-digit growth for wealth as we continue to grow that business.

因此，我們顯然專注於後者，正如 Chip 所說，增加人才來幫助我們做到這一點。從目標來看，我想說，我們的管理資產目標較少，收入目標較多。顯然，過去兩個季度我們的得分都達到了 3.5，我們對這個數字感到滿意。從中期來看，隨著我們業務的不斷發展，我希望看到財富實現高個位數到低兩位數的成長。

Perfect. Thanks, Len, and thanks for taking my questions.

完美的。謝謝，Len，謝謝你回答我的問題。

Nathan Race, Piper Sandler.

內森·雷斯，派珀·桑德勒。

Hi, guys. Good afternoon. Thanks for taking my questions. Just obviously, great to see some credit improvement in the quarter. Just curious how you guys are thinking about the reserve trajectory over the next couple of quarters. Does it feel like you expect to maintain the level you're at coming out of the quarter? And just provide for growth going forward or just any thoughts on that front would be helpful.

嗨，大家好。午安.感謝您回答我的問題。顯然，很高興看到本季信貸有所改善。只是好奇你們如何看待未來幾季的儲備軌跡。您是否希望在本季結束時保持目前的水平？只要為未來的成長做好準備，或任何關於這方面的想法都會有所幫助。

Hi, Nate, this is Gary. And I'd say, the way you are thinking about it is directionally the way we're thinking about it as well. We feel comfortable with the current reserve levels relative to the risk profile of the portfolio. And as the portfolio grows, we do see continuing to add to that reserve to maintain similar coverage on a go-forward basis. Does that help?

嗨，內特，我是加里。我想說，您對此的思考方式與我們對此的思考方式在方向上是一致的。相對於投資組合的風險狀況，我們對目前的儲備水準感到滿意。隨著投資組合的成長，我們確實看到儲備金將繼續增加，以在未來保持類似的覆蓋範圍。這樣有幫助嗎？

Yes, that's helpful. Thank you, Gary. Changing gears a little bit, obviously you just had Florida stub period in the quarter, just given that it closed in early June. So just given that you will have the full quarter without Florida in the third quarter, just curious how you guys are thinking about NII growth prospects in the back half of the year in light of what I expect to see some additional expansion in margin.

是的，這很有幫助。謝謝你，加里。稍微改變一下話題，顯然你本季剛剛經歷了佛羅裡達州的存根期，因為它在六月初就結束了。因此，考慮到第三季度沒有佛羅裡達州的整個季度，我很好奇你們如何看待下半年 NII 的成長前景，因為我預計利潤率會進一步擴大。

Yeah, this is Barry, Nate. So Florida was about $1 million a quarter of NII. And so I think what we expect, obviously that will not be in the run rate going forward. But we do expect to see some amount of incremental net interest margin improvement based upon the trends that we are seeing with asset yields and costs. So that's how we are thinking about the NII going forward. Does that answer your question?

是的，這是巴里，內特。因此佛羅裡達州每季的 NII 收入約為 100 萬美元。因此我認為，我們所期望的顯然不會是未來的運行率。但根據資產收益率和成本的趨勢，我們確實預期淨利差將出現一定程度的增量改善。這就是我們對 NII 未來發展的思考。這回答了你的問題嗎？

Okay. Yeah, that's helpful. Thank you, Barry. Maybe one last one. You guys are building capital. Profitability is improving. The stock is still trading near tangible book. So just curious how you guys are thinking about share repurchases going forward.

好的。是的，這很有幫助。謝謝你，巴里。也許是最後一個。你們正在累積資本。盈利能力正在改善。該股票的交易價格仍接近有形帳面價格。所以我很好奇你們對於未來的股票回購有何看法。

This is Barry again, Nate. Yeah, I view it as a -- we're in a capital-build mode. And so I don't think that share repurchases will necessarily be something that we will be doing a lot of in the near term.

我又是巴里，內特。是的，我認為我們正處於資本建設模式。因此，我認為短期內我們不一定會大量回購股票。

Got it. Very helpful. Thanks guys.

知道了。非常有幫助。謝謝大家。

Damon DelMonte, KBW.

達蒙·德爾蒙特（Damon DelMonte），KBW。

Good afternoon. Hope you are all doing well today. So first question I had was regarding the securities portfolio. Barry, we've seen a pretty steady decline run off the last handful of quarters or so. Should we expect that to continue going forward and those cash flows being used to fund loan growth?

午安.希望你們今天一切都好。所以我的第一個問題是關於證券投資組合。巴里，我們看到過去幾個季度左右出現了相當穩定的下滑趨勢。我們是否應該預期這種情況會持續下去，並且這些現金流將用於資助貸款成長？

Yeah, absolutely correct, Damon. We expect to continue to allow the securities portfolio to run off to fund loan growth. We can fund about 4% loan growth with the annual loan growth with the cash flows that come off of the portfolio. For the balance of 2024, we'll have about $109 million repricing from a yield of 2.87%.

是的，完全正確，達蒙。我們預計將繼續允許證券投資組合運作以資助貸款成長。我們可以利用投資組合產生的現金流，透過年度貸款成長來滿足約 4% 的貸款成長需求。就 2024 年的餘額而言，我們將從 2.87% 的收益率重新定價約 1.09 億美元。

So we repriced that up to loan portfolios at -- a loan portfolio yield of about 7% to 8%. That's somewhere around $5 million of additional interest income. So I anticipate to allow the portfolio to continue to run down. I'd desire the portfolio level to be about 15% to 20% of assets, Damon.

因此，我們將其重新定價為貸款組合收益率約為 7% 至 8%。這相當於約 500 萬美元的額外利息收入。因此我預期投資組合將繼續縮水。達蒙，我希望投資組合水準達到資產的 15% 到 20% 左右。

Great color. Thank you for that. And can you just remind us if the Fed does cut rates here in the back half of the year and especially as we go into '25? What the dynamic is on the margin?

顏色很棒。謝謝你。您能否提醒我們，聯準會是否會在今年下半年降息，尤其是在我們進入 25 年時？邊緣的動態是怎樣的？

Yeah. Well, with respect to the -- whether or not there is a rate cut or not and the impact on the margin, we continue to model from an ALM perspective as liability is sensitive. So we would expect some benefit to net interest income and the margin from a rate cut.

是的。嗯，關於是否降息以及對利潤率的影響，我們繼續從 ALM 的角度進行建模，因為負債很敏感。因此，我們預計降息將為淨利息收入和利潤帶來一些好處。

I think that benefit would be predicated upon the magnitude of the rate cuts, i.e. a single 25-basis-point cut, maybe we don't see as much benefit from that just based upon competitive deposit pricing dynamics as well as asset repricing. But we model as liability sensitive, and so we would expect to recognize some benefit with those conditions, I would say.

我認為這種好處取決於降息的幅度，即單次降息 25 個基點，也許我們不會僅基於競爭性存款定價動態以及資產重新定價而看到太多好處。但我們的模型是責任敏感的，因此我們期望在這些條件下實現一些好處，我想說。

Got it. Okay. Great. And then just lastly, can you just provide an update on some of the new lending verticals that you guys are looking to expand into like the agri-business and the SBA?

知道了。好的。偉大的。最後，您能否提供一些您希望擴展的新貸款垂直領域的最新情況，例如農業綜合企業和 SBA？

Yes, Damon. This is Len. And I'd say a couple of things. On agri-business in particular, we do see some new nameplates. And we look at our community region loan balances. We see nice growth in that. So we see the contribution there. And I'd even call it early days for where we are at agribusiness.

是的，達蒙。這是 Len。我想說幾件事。特別是在農業綜合企業領域，我們確實看到了一些新的品牌。我們查看社區區域貸款餘額。我們看到了這方面的良好成長。所以我們看到了那裡的貢獻。我甚至可以說，就農業綜合企業而言，現在還處於早期階段。

And the one where I feel the most momentum as I look forward is in government guaranteed lending and that was basically level quarter over quarter. Because I look at the back half of the year, I see fee income upside for us in that line of business. And I see just the pipeline being really robust there. So I'd point to those two in particular as bright spots.

我認為未來最有發展動力的是政府擔保貸款，而且這一成長動能與上一季基本持平。因為我看了今年下半年的情況，我發現我們在該業務領域的費用收入將會上升。我看到那裡的管道非常強勁。因此，我特別指出這兩個是亮點。

We've identified, obviously, CRE which has been an important piece for us historically. As you might expect in the current environment, just given rates. And so forth, we see more softness in CRE. But nonetheless, we remain well positioned to take advantage there when [237%] of capital, right, for non-owner-occupied, we've got room. So we are positioned to take advantage when the deal is right.

顯然，我們已經確定了 CRE，它對我們來說在歷史上一直是一個重要組成部分。正如您在當前環境下可能預料到的那樣，只是給出了利率。等等，我們看到 CRE 更加疲軟。但儘管如此，當 [237%] 的資本，對非自住房屋來說，我們有空間時，我們仍然處於有利地位。因此，當交易合適時，我們就可以充分利用這一優勢。

Damon, just one -- this is Chip. Just one more comment in terms of the CRE vertical. In times like this, when the CRE some asset classes are obviously a little bit more stressed, we spend a lot of time in terms of the expertise that we're building in that CRE vertical for portfolio management, and frankly in exiting some of the loan relationships or loan transactions that we do not wish to be in and you started to see some of that here in the quarter, you are likely to see more of that in the third and fourth quarter as well. And that's driven really by that partnership between our CRE vertical, the expertise there and then our credit administration department.

戴蒙，只有一個－－這是奇普。關於 CRE 垂直領域還有一點評論。在這種時候，當 CRE 某些資產類別顯然壓力更大時，我們會花費大量時間在 CRE 垂直領域構建投資組合管理的專業知識，坦率地說，我們會退出一些我們不想參與的貸款關係或貸款交易，您在本季度已經開始看到一些這樣的情況，在第三季度和第四季度您可能還會看到更多這樣的情況。這實際上是由我們的 CRE 垂直部門、那裡的專業知識以及我們的信貸管理部門之間的合作所推動的。

Great. Thank you very much for all that color. That's all that I have, and have a great weekend.

偉大的。非常感謝所有這些顏色。這就是我要說的全部內容，祝大家週末愉快。

Thanks, Damon.

謝謝，達蒙。

Brian Martin, Janney.

布萊恩馬丁，珍妮。

Good afternoon, guys. Just a question, Barry, on just -- on the margin if you can just talk about just the repricing opportunities within the loan book over the next 6 to 12 months, kind of what opportunities you have there? And kind of what's coming off? And then what -- you've already given the yields and what's coming on?

大家下午好。巴里，我有一個問題，如果您能談談未來 6 到 12 個月內貸款帳簿中的重新定價機會，您有哪些機會？那麼接下來會發生什麼事呢？然後呢——您已經給出了收益率，接下來會發生什麼？

Yeah. With respect to the loan book earlier, I spoke to the securities, with respect to the loan book, I've got about $227 million of fixed rate loans repricing over the balance of the year. The yield on those loans is about 4.87%. So reinvestment opportunity there if it goes to 7% to 8% is probably somewhere around $6 million of additional net interest income.

是的。關於之前的貸款帳簿，我與證券部門談過，關於貸款帳簿，我有大約 2.27 億美元的固定利率貸款在年度餘額中重新定價。這些貸款的收益率約為4.87%。因此，如果利率上升到 7% 到 8%，那麼再投資機會大概就是 600 萬美元左右的額外淨利息收入。

Okay. And that was fixed rate or variable rate, Barry, I missed what you said there?

好的。那是固定利率還是浮動利率，巴里，我錯過了你所說的話？

That was fixed rate, Brian.

那是固定利率，布萊恩。

Okay. Thanks. And then as far as variable goes, do you have other stuff that's repricing in there as well?

好的。謝謝。那麼就變數而言，還有其他東西需要重新定價嗎？

Yes, we do. We have the variable reprices every quarter. So I didn't mention that just because it's kind of already approaching kind of the normal rates that we yield right now, but there's $1 billion of variable repricings.

是的，我們有。我們每季都會進行不同的重新定價。所以我沒有提到這一點，只是因為它已經接近我們現在產生的正常利率，但有 10 億美元的可變重新定價。

Okay. All right. That's perfect. And then just in terms of credit quality, the story was pretty positive, the story this quarter. Just wondering in terms of if you're seeing any stress within kind of the C&I categories at all or is there any early areas of concern on that portfolio?

好的。好的。那很完美。就信貸品質而言，本季的情況相當積極。只是想知道您是否看到 C&I 類別中存在任何壓力，或者該投資組合中是否存在任何早期令人擔憂的領域？

Hi, Brian, this is Gary. Most of the stress that we have seen in our portfolio has been in the CRE book. If you recall, I believe in the first quarter, we did downgrade some of our trucking portfolio. We don't have a big trucking portfolio, but we did downgrade some credits in that portfolio.

嗨，布萊恩，我是蓋瑞。我們在投資組合中看到的大部分壓力都來自於 CRE 帳簿。如果你還記得的話，我相信在第一季度，我們確實下調了部分卡車運輸投資組合的評級。我們沒有龐大的卡車運輸業務組合，但我們確實降低了該組合中的一些信用評級。

I would really attribute that to the macro issues associated with the transportation and logistics industry. So that would be an example where we have seen some deterioration in C&I. But overall, we're not seeing deterioration in that side of the portfolio. Does that help, Brian?

我確實將其歸因於與運輸和物流行業相關的宏觀問題。這就是我們看到 C&I 出現一些惡化的一個例子。但整體而言，我們並未看到投資組合的這一方面出現惡化。這有幫助嗎，布萊恩？

Yes. No, for sure. Just checking in on that, I know it seems like you've kind of got your arms around the CRE piece at this point. Just wondering if there is anything new that might be something mindful to watch. And then maybe just the last one for me is -- more for Chip.

是的。不，肯定不是。只是檢查一下，我知道您現在似乎已經掌握了 CRE 部分的內容。只是想知道是否有任何新事物值得關注。然後也許對我來說最後一個是 - 更多是針對 Chip 的。

Just big picture, Chip, just kind of thinking about the road map here as we go the next four to six quarters in terms of profitability, kind of where you're thinking that you can get to, given all the investments you've made. And if we kind of look at four quarters out in terms of ROA, kind of where the scorecard would be as far as where you think you can be approaching?

只是從總體上看，奇普，只是在思考一下未來四到六個季度的獲利路線圖，考慮到你所做的所有投資，你認為你可以達到什麼目標。如果我們從 ROA 的角度來看四個季度之後的情況，您認為記分卡的水平會達到什麼程度？

Hi Brian, thanks for the question. And ultimately, there, it will be a function of the -- what the Fed does in terms of the interest rate environment and the cuts -- the magnitude of the cuts, the frequency of the cuts.

你好，Brian，謝謝你的提問。最終，它將取決於聯準會在利率環境和降息方面的舉措——降息幅度和頻率。

Let's go in a static environment. In a static environment, we continue to see slow margin build over the following or the next 12 months. We continue to see better or more improvement in non-interest income. I think we'll have positive operating leverage. And we'll move into the increased profitability.

讓我們進入靜態環境。在靜態環境中，我們將繼續看到接下來的 12 個月或未來 12 個月的利潤率增長緩慢。我們繼續看到非利息收入有更好或更多的改善。我認為我們將擁有積極的經營槓桿。我們將進一步提高獲利能力。

But in a static environment, it will likely take us a couple of years to move to the -- truly the 1% return on assets. If rates do fall, that will materialize much quicker. And then we also continue to -- on a quarterly basis, I think this is appropriate for our Board to review and our management team to review every quarter in terms of opportunistic opportunities within that securities book to see if there is anything more to do to accelerate that pace of profit improvement.

但在靜態環境下，我們可能需要幾年時間才能真正達到 1% 的資產報酬率。如果利率確實下降，那將會更快實現。然後，我們也會繼續進行——按季度進行審查，我認為這適合我們的董事會進行審查，也適合我們的管理團隊每季審查證券帳簿中的機會，看看是否還有什麼可以做的來加快利潤增長的速度。

Got you. Okay. And you outlined all the hires you've made through the first half. Are there -- to kind of get to the buildup of the fee income and the business lines you've kind of talked about, are there -- is there more staff that has to be added in your mind? Or is it maybe -- you have the team in place now and it's just executing on getting the production? Or is there other key hires you really expect to be making here in the next six months to 12 months?

明白了。好的。您概述了上半年所聘用的所有員工。為了增加費用收入和您談論的業務線，您是否考慮過需要增加更多員工？或者可能是——您現在已經組建了團隊，只是在執行生產任務？還是您真的希望在未來六個月到十二個月內招募其他關鍵員工？

Yeah. What I'd say there, Brian is instead of that, what I'd call the executive level or even the senior operating level, we have essentially completed the transformation of the organization there.

是的。我想說的是，布萊恩，而不是我所說的執行層面，甚至是高階營運層面，我們基本上已經完成了那裡的組織的轉型。

But what I'd say is in some of our target markets and target lines of business, we will continue to expand there in terms of revenue producers. So think Twin Cities, think Denver, think Cedar Rapids, Think Des Moines, think commercial banking, think wealth Management. We will continue to invest there.

但我想說的是，在我們的一些目標市場和目標業務線上，我們將繼續擴大收入來源。所以想想雙城，想想丹佛，想想錫達拉皮茲，想想得梅因，想想商業銀行，想想財富管理。我們將繼續在那裡投資。

Got you. Okay, perfect. Thank you for taking the questions, guys.

明白了。好的，完美。謝謝你們回答這些問題。

Great. Thanks, Brian.

偉大的。謝謝，布萊恩。

(Operator Instructions) There are no additional questions at this time. I would now like to pass the conference back to the management team for closing remarks.

（操作員指示）目前沒有其他問題。現在，我想將會議交還給管理團隊，請他們作最後發言。

Great. This is Chip Reeves. Thank you again for joining us today, and we look forward to getting together in 90 days as we continue to track the progress that MidWestOne is making. Thank you, everyone. Bye, bye.

偉大的。這是 Chip Reeves。再次感謝您今天的加入我們，我們期待 90 天後再次相聚，繼續關注 MidWestOne 的進展。謝謝大家。再見，再見。

That concludes today's call. Thank you for your participation and enjoy the rest of your day.

今天的電話會議到此結束。感謝您的參與並祝您今天過得愉快。