Old Second Bancorp Inc (OSBC) 2023 Q3 法說會逐字稿

Good morning, everyone, and thank you for joining us today for Old Second Bancorp, Inc. Third Quarter 2023 Earnings Call. On the call today are Jim Eccher, the company's Chairman, President and Chief Executive Officer; Brad Adams, the company's Chief Operating Officer and Chief Financial Officer; and Gary Collins, the Vice Chairman of our Board.

大家早安，感謝您今天參加 Old Second Bancorp, Inc. 2023 年第三季財報電話會議。今天參加電話會議的是公司董事長、總裁兼執行長 Jim Eccher； Brad Adams，公司營運長兼財務長；和我們董事會副主席加里·柯林斯 (Gary Collins)。

I will start with a reminder that Old Second's comments today will contain forward-looking statements about the company's business, strategies and prospects, which are based on management's existing expectations in the current economic environment. These statements are not a guarantee of future performance and results may differ materially from those projected. Management would ask you to refer to the company's SEC filings for a full discussion of the company's risk factors. The company does not undertake any duty to update such forward-looking statements.

首先我要提醒一下，老二今天的評論將包含有關公司業務、策略和前景的前瞻性陳述，這些陳述是基於管理層對當前經濟環境的現有預期。這些陳述並非對未來績效的保證，結果可能與預測的結果有重大差異。管理層會要求您參考該公司向 SEC 提交的文件，以全面討論該公司的風險因素。本公司不承擔更新此類前瞻性陳述的任何義務。

On today's call, we will be discussing certain non-GAAP financial measures. These non-GAAP measures are described and reconciled to their GAAP counterparts in our earnings release, which is available on our website at oldsecond.com on the homepage and under the Investor Relations tab.

在今天的電話會議上，我們將討論某些非公認會計準則財務指標。這些非 GAAP 指標在我們的收益報告中進行了描述，並與 GAAP 指標進行了核對，該報告可在我們的網站 oldsecond.com 的主頁和「投資者關係」標籤下找到。

Now I will turn it over to Mr. Jim Eccher.

現在我將把它交給吉姆·埃徹先生。

Good morning, and thank you for joining us today. As customary, I have several prepared opening remarks, we'll give my overview of the quarter, then I'll turn it over to Brad for additional details. I will then conclude with certain summary comments and thoughts about the future before we open it up to Q&A.

早安，感謝您今天加入我們。按照慣例，我有幾個準備好的開場白，我們將概述本季度，然後我將其交給布拉德以獲取更多詳細資訊。然後，在我們進行問答之前，我將總結一些評論和對未來的想法。

Net income was $24.3 million or $0.54 per diluted share in the third quarter. Adjusted net income was $24.8 million or $0.55 per diluted share in the third quarter. On the same adjusted basis, return on assets was 1.70% and third quarter 2023 return on average tangible common equity was 22.80% and the tax equivalent efficiency ratio was 50.08%.

第三季淨利為 2,430 萬美元，即稀釋後每股收益 0.54 美元。第三季調整後淨利為 2,480 萬美元，即稀釋後每股收益 0.55 美元。在相同調整後的基礎上，資產報酬率為1.70%，2023年第三季平均有形普通股報酬率為22.80%，稅收等效效率率為50.08%。

Third quarter earnings were negatively impacted by $924,000 in pretax securities losses on strategic security sales as well as $629,000 in net deconversion and liquidation costs related to the Visa credit card portfolio sale last year. The combined impact of these 2 items reduced diluted earnings per share by $0.03 in the third quarter.

第三季收益受到策略性證券銷售的 924,000 美元稅前證券損失以及去年與 Visa 信用卡投資組合銷售相關的 629,000 美元的淨轉換和清算成本的負面影響。這兩項因素的綜合影響使第三季稀釋後每股收益減少了 0.03 美元。

Our financials continue to be favorably impacted by elevated market interest rates with a $7.5 million or 13.4% increase in net interest income in the third quarter compared to the prior year late quarter due to manageable funding cost increases along with significant expansion in asset yields across the balance sheet.

我們的財務狀況持續受到市場利率上升的有利影響，由於可控的融資成本增加以及整個資產收益率的顯著擴張，第三季的淨利息收入比去年末季度增加了750 萬美元，即13.4% 。資產負債表。

The third quarter of 2023 reflected loan growth of $14 million for the linked period and expanded $160.2 million or 4.1% over the same period last year. Loan prepayments continue to be modest. However, origination activity has slowed significantly over the last 6 months. Activity within loan committee remains modest relative to prior periods due both to higher interest rates and seasonal impacts.

2023 年第三季的貸款成長了 1,400 萬美元，比去年同期增加了 1.602 億美元，增幅為 4.1%。貸款預付款繼續保持在較低水平。然而，在過去 6 個月中，發起活動顯著放緩。由於利率上升和季節性影響，貸款委員會內的活動與前期相比仍然溫和。

The net interest margin expanded slightly this quarter, driven by increased loan yields, partially offset by the higher cost of deposits. Loan yields continued to expand modestly during the quarter increasing by 9 basis points over the linked quarter and 127 basis points year-over-year.

在貸款收益率上升的推動下，本季淨利差略有擴大，但部分被存款成本上升所抵銷。本季貸款收益率持續小幅擴張，較上季增加 9 個基點，年增 127 個基點。

The tax equivalent net interest margin was 4.66% for the third quarter compared to 3.96% in the third quarter of last year. The margin has benefited year-over-year from balance sheet mix improvement, the impact of rising rates on the variable portion of the loan portfolio and continuing loan growth in 2023.

第三季稅等淨利差為4.66%，去年第三季為3.96%。利潤率同比增長得益於資產負債表組合的改善、利率上升對貸款組合可變部分的影響以及 2023 年貸款的持續增長。

The loan-to-deposit ratio is now 87% as of September 30 compared to 85% last quarter and 73% as of September 30, 2022. As we said last quarter, our focus continues to be balance sheet optimization, and I'll let Brad talk about that in a minute.

截至9 月30 日，貸存比率目前為87%，而上一季為85%，截至2022 年9 月30 日為73%。正如我們上季度所說，我們的重點仍然是資產負債表優化，我將讓布拉德稍後談談這個問題。

We had previously expected to report a linked quarter improvement in credit metrics with workout plans in place for a few credits we had downgraded in prior quarters. Unfortunately, these plans designed to improve cash flow metrics fail to materialize this quarter. Our outlook has not changed, though, although the speed of resolution will be slower than hoped.

我們之前預計會報告信用指標的季度改善，並針對我們在前幾個季度降級的一些信用制定了解決計劃。不幸的是，這些旨在改善現金流量指標的計劃未能在本季實現。不過，我們的前景並沒有改變，儘管解決問題的速度會比希望的慢。

The good news is the portfolio trends remain well behaved on an overall basis and the stress testing at renewal rates has not raised any new red flags for us.

好消息是，投資組合趨勢整體表現良好，續訂率壓力測試並未為我們帶來任何新的危險訊號。

On an overall basis, nonaccruals were largely unchanged with some pluses and minuses under the covers. Classified loans did tick up a bit this quarter, due largely to 3 credits. First is a $17 million multifamily mixed-use project that is characterized at this point is half complete and leased and half unimproved, sponsors are looking to liquidate the property. We don't expect significant losses here, if any.

整體而言，非應計項目基本上沒有變化，但有一些優點和缺點。本季分類貸款確實略有增加，這主要歸功於 3 個信貸。第一個是耗資 1700 萬美元的多戶混合用途項目，其特點是一半已完工並已出租，一半尚未改進，贊助商正在尋求清算該房產。我們預計這裡不會出現重大損失（如果有的話）。

The other credits are health care related, and while nicely occupied at below par debt service coverage ratios due to the combination of higher renewal rates and significantly higher labor cost inputs.

其他信貸與醫療保健相關，但由於較高的更新率和顯著較高的勞動力成本投入，其償債覆蓋率很好地佔據了低於標準的水平。

Beyond these impacts are ongoing evaluations of commercial real estate and office have not revealed significant deterioration at this point. And the trends within criticize assets are stable.

除了這些影響之外，對商業房地產和辦公室的持續評估目前尚未顯示出明顯的惡化情況。批評資產的趨勢是穩定的。

Clearly our focus remains on monitoring potential weakness in commercial real estate and office and health care specifically. We have stressed on maturing credits under renewal rates and believe we don't see broad-based risk.

顯然，我們的重點仍然是監控商業房地產、辦公大樓和醫療保健領域的潛在弱點。我們強調續訂利率下的到期信貸，並相信我們沒有看到廣泛的風險。

We've been very proactive on refreshing valuations. And as a result, our outlook for credit has not changed. I think it's important to remember that nearly half of our commercial real estate exposure is owner-occupied, which we believe is unusual for a bank of our size. And our office exposure is only about 5% of the loan book. We simply don't have much exposure here, and we are watching it very closely. Please refer to the additional disclosures in our earnings release for more color on the portfolio.

我們一直非常積極地刷新估值。因此，我們的信貸前景並沒有改變。我認為重要的是要記住，我們近一半的商業房地產敞口是業主自住的，我們認為這對我們規模的銀行來說是不尋常的。而我們的辦公室風險敞口僅佔貸款帳面的 5% 左右。我們在這裡沒有太多的曝光，而且我們正在非常密切地關注它。請參閱我們收益報告中的額外揭露，以了解有關投資組合的更多資訊。

We recorded net charge-offs of $6.6 million in the third quarter of 2023 compared to $505,000 of net charge-offs in the second quarter. The majority of the current period charge-offs were specific to 2 borrowers within commercial real estate on which we had existing specific allocations within the ACL of $4.7 million at June 30. Other real estate owned reflected a $354,000 decrease in the third quarter to end at $407,000 in total based on 4 property sales during the quarter, net of one transfer into OREO.

2023 年第三季我們的淨沖銷額為 660 萬美元，而第二季的淨沖銷額為 505,000 美元。本期大部分沖銷專門針對商業房地產領域的2 個借款人，截至6 月30 日，我們在ACL 內已有470 萬美元的特定撥款。截至6 月30 日，擁有的其他房地產在第三季度減少了354,000 美元。基於本季 4 筆房產銷售（扣除一筆轉入 OREO 的費用），總計 407,000 美元。

The allowance for credit losses on loans decreased to $51.7 million as of September 30 from $55.3 million at the end of the previous quarter, which is 1.3% of total loans as of September 30, 2023, down from 1.4% total ACL to gross loans as of June 30.

截至9 月30 日，貸款信用損失準備金從上一季末的5,530 萬美元降至5,170 萬美元，佔截至2023 年9 月30 日貸款總額的1.3%，低於2023 年ACL 總額佔貸款總額的1.4%. 6 月 30 日。

Unemployment and GDP forecast used in future loss rate assumptions remained fairly static from last quarter. I think investors should know that we remain confident in the strength of our portfolios and the credits driving the reduction in the allowance of the same credits we've talked about previously and which we continue to monitor and work towards remediation or sale.

未來損失率假設中使用的失業率和 GDP 預測與上季相比保持相當穩定。我認為投資者應該知道，我們對我們的投資組合和信貸的實力仍然充滿信心，這些信貸推動了我們之前討論過的相同信貸限額的減少，我們將繼續監控並努力進行補救或出售。

Noninterest income continued to perform well, and excluding losses on security sales discussed earlier, noninterest income increased $1 million compared to the second quarter of 2023 driven by gains on BOLI income due to restructuring, MSR gains and other income.

非利息收入繼續表現良好，排除先前討論的證券銷售損失，非利息收入與2023 年第二季度相比增加了100 萬美元，這是由於重組、MSR 收益和其他收入帶來的BOLI 收入增長的推動。

Pretax losses of $924,000 on security sales in the third quarter were incurred related to strategic repositioning within certain types in the portfolio. Expense discipline continues to be strong and our efficiency ratio continues to be excellent.

第三季證券銷售稅前虧損 924,000 美元，與投資組合中某些類型的策略重新定位有關。費用紀律仍然嚴格，我們的效率比率仍然出色。

As we look forward, we're focused on doing more of the same, which is managing liquidity and building commercial loan origination capability for the long term. The goal is obviously to continue to build towards a more stable long-term balance sheet mix featuring more loans and less securities in order to maintain the returns on equity commensurate with our recent performance.

展望未來，我們將專注於做更多相同的事情，即管理流動性和建立長期的商業貸款發放能力。顯然，我們的目標是繼續建立更穩定的長期資產負債表組合，增加貸款，減少證券，以保持與我們近期業績相稱的股本回報率。

I'll turn it over to Brad now for more color in his comments.

我現在將其轉交給布拉德，以獲取他的評論中的更多內容。

Thank you, Jim. Net interest income decreased slightly to $63 million for the quarter relative to the prior quarter of $63.6 million, but increased $7.5 million or 13.4% from the year ago quarter. Loan yields continued to grow in the third quarter, though at a slower pace than recent periods, and securities yields declined slightly since last quarter due to the significant sales of variable rate issues this quarter and last.

謝謝你，吉姆。本季淨利息收入較上一季的 6,360 萬美元略有下降，降至 6,300 萬美元，但較去年同期增加了 750 萬美元，即 13.4%。第三季貸款殖利率持續成長，但成長速度較近期放緩，而由於本季和上季可變利率債券的大量銷售，證券殖利率自上季以來略有下降。

Total yield on interest-earning assets increased 10 basis points to 549 basis points and was partially mitigated by a 25 basis point increase in the cost of interest-bearing deposits and a 14 basis point increase to interest-bearing liabilities in aggregate. The end result was a 2 basis point increase in the taxable equivalent NIM from last quarter to 466, which we believe continues to be exceptional margin performance.

生息資產總收益率上升10個基點至549個基點，但因生息存款成本增加25個基點及計息負債總計增加14個基點而部分緩解。最終結果是應稅淨利差較上季增加了 2 個基點至 466，我們認為這仍然是出色的利潤率表現。

As discussed in last quarter's call, we redeemed the outstanding senior debt issuance on June 30. This redemption provided a net interest margin cost savings of approximately 3 basis points net of alternative funding costs.

如上季電話會議所討論的，我們於 6 月 30 日贖回了未償還的優先債務發行。此次贖回使淨利差成本節省了約 3 個基點（扣除替代融資成本）。

Deposit flow this quarter showed modest leakage on the high end, along with typical seasonal decline in the third quarter, we always see based on tax payments for personal and business customers and commercial customers rolling out new activities throughout the summer. The nature and character of the decline largely looks like an inverse move of the flows into the bank, we saw beginning in the latter half of 2020 through 2021.

本季的存款流量顯示出適度的高端洩漏，以及第三季典型的季節性下降，我們總是看到基於個人和企業客戶以及商業客戶在整個夏季推出新活動的納稅情況。從 2020 年下半年到 2021 年，我們看到這種下降的性質和特徵在很大程度上看起來像是流入銀行的資金的反向流動。

Fortunately, we have the liquidity and the balance sheet flexibility to adapt and will continue to remix and optimize rather than chase high beta deposits.

幸運的是，我們擁有適應的流動性和資產負債表靈活性，並將繼續重新組合和優化，而不是追逐高貝塔存款。

We still aren't lurching at anything, but have made some fairly significant progress in reducing asset sensitivity over the last year, including reducing variable rate securities concentrations.

我們仍然沒有採取任何行動，但去年在降低資產敏感性方面取得了一些相當重大的進展，包括降低可變利率證券集中度。

Variable rate issues within the bond portfolio are now approximately 18%, a level that is roughly half where it was before rates started moving higher. There has been some significant income and margin give-up associated with doing this, but it's the right time to return to a normal duration profile within the portfolio.

債券投資組合中的可變利率發行現在約為 18%，這一水平約為利率開始走高之前的一半。這樣做導致了一些重大的收入和利潤損失，但現在是投資組合恢復正常久期狀況的最佳時機。

As the belief in higher for longer has taken hold, spreads have tightened considerably on some of the variable rate issues we hold. Duration is slowly being added to reduce asset sensitivity and numerous other ways as well. I still don't see much opportunity to hedge away asset sensitivity, but balance sheet positioning and flexibility at this point is excellent, in my opinion. Effective duration on the bond portfolio is now 2.7 years.

隨著人們相信利率會持續更長時間，我們持有的一些可變利率債券的利差已大幅收窄。持續時間正在慢慢增加，以降低資產敏感性，還有許多其他方式。我仍然認為沒有太多機會對沖資產敏感性，但在我看來，目前的資產負債表定位和靈活性非常好。債券投資組合的有效久期現為 2.7 年。

Rates during the quarter moved much more significantly further out the curve. So Old Second saw significantly less fair value deterioration than perhaps some peers experienced. The loan-to-deposit ratio remains low, and our ability to source liquidity from the portfolio has increased relative to the color we gave you last quarter. The bid has come back a bit on variable rate issues, as I said, and that has allowed us to move out of our excess positioning here quite effectively.

本季的利率在曲線上的移動更加顯著。因此，老二的公允價值惡化程度可能比一些同業所經歷的要少得多。貸存比仍然很低，而且我們從投資組合中獲取流動性的能力相對於我們上季度給您的顏色有所增加。正如我所說，可變利率問題上的出價有所回升，這使我們能夠非常有效地擺脫此處的過度部位。

The mark on the securities portfolio remains high but will be recaptured relatively quickly. The net result is that Old Second should continue to build capital very quickly as evidenced by the 50 basis point improvement in the TCE ratio over the linked quarter, even without a tailwind from AOCI, which combined with the 93 basis points in the first 6 months means we've added 143 basis points of TCE this year.

證券投資組合的分數仍然很高，但會相對快速地恢復。最終結果是，即使沒有AOCI 的推動（加上前6 個月的93 個基點），老二應該會繼續非常迅速地建立資本，這一點從上一季的TCE 比率提高50 個基點就可以看出。意味著今年我們增加了 143 個基點的 TCE。

As we sit here today, we have approximately $700 million in undrawn borrowing capacity and an additional $420 million in unpledged securities and short liquidity at the bank is excellent, and the holding company is in a strong position as well. We are likely to seek non-objection to resume stock repurchases soon.

當我們今天坐在這裡時，我們擁有大約 7 億美元的未提取借款能力，還有 4.2 億美元的未質押證券，銀行的空頭流動性非常好，控股公司也處於強勢地位。我們可能會尋求無異議以盡快恢復股票回購。

Margin trends from here are expected to be relatively stable over the remainder of the year with benefits from the last rate hike still to come and continued asset repricing not expected to outpace the increased reliance on our overnight borrowings by very much.

預計今年剩餘時間的利潤率趨勢將相對穩定，上次升息的好處尚未到來，持續的資產重新定價預計不會遠遠超過我們對隔夜借款的依賴程度的增加。

Provision for credit losses of $3 million was recorded during the quarter and was primarily attributable to credit losses on loans. Net of an immaterial reversal of provision on unfunded commitments during the quarter. I would expect loan growth to be roughly consistent with provision growth over the near term, though that could change with significant worsening in the macro environment.

本季記錄的信貸損失準備金為 300 萬美元，主要歸因於貸款信貸損失。扣除本季無資金承諾撥備的小額逆轉後的淨額。我預計短期內貸款成長將與撥備成長大致一致，儘管這種情況可能會隨著宏觀環境的顯著惡化而改變。

Noninterest expense increased $2.6 million from the previous quarter, driven by higher salaries and employee benefits as well as expenses related to liquidation and deconversion fees from the Visa credit card portfolio. I continue to expect quarterly wages and benefits to be between $22 million and $23 million going forward in the near term.

非利息支出比上一季增加了 260 萬美元，原因是工資和員工福利增加，以及與 Visa 信用卡組合清算和轉換費用相關的支出。我仍然預計近期季度薪資和福利將在 2,200 萬美元至 2,300 萬美元之間。

Given the revenue performance, employee investment costs have been running high, but we will maintain the ability to dial back as conditions warrant. I would be remiss if I didn't add that we are not really in the market to chase much growth here. Doesn't really make sense given the marginal yields available relative to the marginal cost of funding and the cost associated with origination.

鑑於收入表現，員工投資成本一直居高不下，但我們將保持在條件允許的情況下回撤的能力。如果我沒有補充一點，我們並沒有真正在市場上追逐這裡的大幅成長，那就是我的失職。考慮到相對於融資的邊際成本和與發起相關的成本的可用邊際收益，這實際上沒有意義。

As such, we remain focused on optimization and efficiency. I believe our results indicate that we are doing a pretty darn good job at this so far. It can continue, and I believe we can potentially grow earnings absent balance sheet growth. At the very least, I believe earnings can be much more resilient than perhaps many people expect from us.

因此，我們仍然專注於優化和效率。我相信我們的結果表明我們到目前為止在這方面做得非常好。它可以繼續下去，我相信，如果資產負債表不成長，我們的獲利就有可能成長。至少，我相信獲利能力可能比許多人對我們的預期更有彈性。

With that, I'd like to turn the call back to Jim.

說到這裡，我想把電話轉回給吉姆。

Okay. Thanks, Brad. In closing, we remain confident in our balance sheet and the opportunities that are ahead for us. We're paying close attention to both credit and expenses. We believe our underwriting has remained disciplined, and our funding position is strong. We have the balance sheet and flexibility to excel at a higher rate environment. Capital levels should continue to grow and maintain levels above targets, and we will look to be aggressive in adding talent and relationships.

好的。謝謝，布拉德。最後，我們對我們的資產負債表和未來的機會仍然充滿信心。我們密切關注信貸和支出。我們相信我們的承保仍然遵守紀律，並且我們的融資狀況強勁。我們擁有在較高利率環境下表現出色的資產負債表和靈活性。資本水準應繼續成長並維持在目標之上，我們將積極增加人才和關係。

That concludes our prepared comments this morning. So I'll turn it over to the moderator to open it up for questions.

我們今天早上準備好的評論到此結束。因此，我會將其轉交給主持人以供提問。

(Operator Instructions) Our first question is coming from Jeff Rulis with D.A. Davidson.

（操作員說明）我們的第一個問題來自 Jeff Rulis 和 D.A.戴維森。

Jim, I appreciate the comments on the credit side. I kind of want to just check in on the balance of nonaccruals. Are there some -- maybe I think you mentioned the time line to resolution maybe extended a bit, but trying to get a sense for that balance of nonaccruals. Are there some chunkier credits in there that may have kind of a shorter time line to resolution? I'm trying to dig into a little bit of pace of resolution from your perspective.

吉姆，我很欣賞信用方面的評論。我有點想檢查一下非應計費用的餘額。有沒有一些——也許我認為你提到解決方案的時間線可能會延長一點，但試圖了解非應計費用的平衡。是否有一些更厚重的片尾字幕可能需要更短的時間來解決？我試著從你的角度深入探討解決問題的速度。

Yes, there are chunkier ones, Jeff. And I will tell you, it's primarily concentrated in CRE office and health care. What's made some of this challenging is that there are shared credits so that their participation is purchased. And we're working closely with the lead bank to write a resolution. We do feel we will have resolution on a couple of these. It's just taking a little bit longer. There's a couple of properties under contract. We're looking at no sale options. But it seems as though the time to resolve credits has just taken longer than what it used to.

是的，還有更粗的，傑夫。我會告訴你，它主要集中在商業房地產辦公室和醫療保健領域。造成這項挑戰的一些挑戰在於，存在共享積分，因此他們的參與是被購買的。我們正在與牽頭銀行密切合作以撰寫決議。我們確實認為我們將對其中幾個問題做出解決。只是需要的時間稍微長一點而已。有幾處房產正在簽約。我們正在考慮沒有任何銷售選擇。但解決信用問題的時間似乎比以前更長了。

Got it. And within the charge-offs looks like mostly in the CRE bucket, were those from credits that were kind of new to classifieds or just something that's existing...

知道了。在沖銷中，看起來大部分是在 CRE 桶中，那些來自分類廣告的新信貸或只是現有的東西...

Those are 2 office buildings that we had already allocated for prior quarters and we took the charges to position them for either sale or no sale.

這些是我們已經為前幾季分配的兩棟辦公大樓，我們承擔了將它們出售或不出售的費用。

These are the same credits we've been talking about in the last 2 calls, Jeff.

傑夫，這些與我們在過去兩次通話中討論的內容相同。

Yes. Just making sure that I didn't know where to -- I appreciate that detail. And I guess those increase in classifieds sounded like a multifamily mixed-use and then to health care related. I guess the first of which, I think you said not a lot of losses expected there and perhaps liquidation occurring soon. On the health care front, are these -- what any more detail on those 2 credits?

是的。只是確保我不知道去哪裡——我很欣賞這個細節。我想分類廣告的增加聽起來像是多戶混合用途，然後與醫療保健相關。我想第一個，我想你說預計不會有很多損失，也許很快就會發生清算。在醫療保健方面，這兩學分還有哪些細節？

Sure. Sure. I'll give you some color. The largest net addition to classified were from health care construction and owner-occupied commercial real estate. I would say the construction in the owner-occupied commercial real estate credits are isolated issues pretty well collateralized. The owner-occupied one is SBA backed 55% loan to value or we don't see a loss there, obviously. And then the construction-related project is backed by some sponsors that have just decided to abort the project. It's a mixed-use multifamily retail. We -- there's substantial equity behind us on this. Again, we think these properties are in the process of being sold. It's just taking a little bit longer.

當然。當然。我會給你一些顏色。分類中最大的淨增量來自醫療保健建築和業主自用商業房地產。我想說，業主自用商業房地產信貸的建設是孤立的問題，抵押品相當好。業主自住的房屋由 SBA 支持 55% 的貸款價值，否則我們顯然不會看到損失。然後，與建築相關的項目得到了一些剛剛決定中止該項目的贊助商的支持。這是一個混合用途的多戶零售店。我們在這方面有大量的支持。同樣，我們認為這些房產正在出售。只是需要的時間稍微長一點而已。

The 2 health care credits, both are just struggling from a cash flow perspective as they're dealing with the aftermaths of COVID, higher labor cost and just weaker occupancy.

從現金流的角度來看，這兩個醫療保健信貸都在苦苦掙扎，因為它們正在應對新冠疫情的後果、勞動力成本上升和入住率下降。

Surprisingly, we've got refreshed appraisals for loan to values in both of those properties, and we're talking about appraisals within the last few months, are still hanging in there, one at sub-50% and one about 65%. So there's going to be longer-term workouts and really probably going to be a situation where we're going to have to go back to the sponsors and ask for more equity to rightsize the transactions. That answer your questions, Jeff?

令人驚訝的是，我們對這兩處房產的貸款價值進行了更新的評估，我們談論的是過去幾個月內的評估，但仍然保持不變，其中一項低於50%，另一項約為65%。因此，將會有更長期的鍛煉，而且很可能會出現這樣一種情況，我們將不得不回到贊助商那裡，要求更多的股權來調整交易規模。這回答了你的問題嗎，傑夫？

Yes. No, that's -- Jim, appreciate the color. I mean I -- trying to true that up with kind of your thoughts on overall credit. It sounds like while kind of frustrated by the pace in some of these. But the positioning and loss content, you feel pretty good about. So I appreciate the color. Maybe just one other question on the -- just on security sales. Do you think you've got similar positioning to do there? Or you're happy with what happened this quarter and that could be pretty quiet going forward?

是的。不，那是——吉姆，欣賞這個顏色。我的意思是，我試圖用你對整體信用的想法來驗證這一點。聽起來有些令人沮喪。但是定位和損失內容，你感覺還不錯。所以我很欣賞這種顏色。也許只是關於證券銷售的另一個問題。您認為您在那裡有類似的定位嗎？或者您對本季發生的事情感到滿意，未來可能會非常平靜？

Yes, we're going to keep selling. We peaked out at around 35% of the portfolio when rates were 0 being variable just to make sure we were protected in a higher rate world. As we've kind of started to slow down on the movement in rates, we have been moving out of that, as we've told you about. We're down to 18% now, a good long-term rate stability type level is probably like 10%.

是的，我們將繼續銷售。當利率為 0 時，我們的投資組合的峰值約為 35%，只是為了確保我們在更高利率的世界中受到保護。正如我們已經告訴過你的那樣，隨著我們開始放慢利率變動，我們已經擺脫了這種情況。我們現在已降至 18%，良好的長期利率穩定類型水準可能約為 10%。

As you know, we don't have a lot of duration on the asset side of the balance sheet. So typically, a securities portfolio does serve as both a warehouse for liquidity and duration for us, but we couldn't do that given the kind of asymmetric risk that existed when rates were 0 so we did this. And now we are moving out of it, and we -- you should expect us to continue to move out of it.

如您所知，我們資產負債表的資產方面沒有太多久。因此，通常情況下，證券投資組合確實可以充當我們的流動性和久期倉庫，但考慮到利率為 0 時存在的不對稱風險，我們無法做到這一點，所以我們這樣做了。現在我們正在擺脫它，你應該期望我們繼續擺脫它。

A couple of things. I mean, one, we would probably have a margin above 5 right now if we just stood pat and hadn't done this, and our earnings susbtantially higher. But -- we will always be asset sensitive just given what we are, which is the strength of the deposit base, but we can be less so. And that's what we're progressing towards, and we're doing it in such a manner that doesn't involve paying transaction fees and broker fees and having to fair value various hedge accounting issues. This is the most cost-effective way to step out of it. And I'm grateful that everybody has decided they want to be in variable rate issues over the last 4 months because it has tightened up our execution a great deal.

有幾件事。我的意思是，第一，如果我們按兵不動、不這樣做的話，我們現在的利潤率可能會高於 5，而且我們的收益也會大幅提高。但是，鑑於我們的現狀，即存款基礎的實力，我們將始終對資產敏感，但我們可以不那麼敏感。這就是我們正在努力實現的目標，我們這樣做的方式不涉及支付交易費用和經紀人費用，也不需要對各種對沖會計問題進行公允價值評估。這是走出困境最經濟有效的方法。我很感激過去 4 個月裡每個人都決定參與可變利率問題，因為這大大加強了我們的執行力。

Okay. Well, appreciate it, Brad. It sounds as if a lot of the legwork has been done and it looks like you got, I guess, if you go 18% to 10%, you get a little bit more. But the securities losses have been narrowing as well. Would that be the expectation as you wind it down, that would become less of a drag on the income statement?

好的。好吧，謝謝你，布拉德。聽起來好像已經完成了很多跑腿工作，而且看起來你已經完成了，我想，如果你達到 18% 到 10%，你會得到更多一點。但證券損失也在縮小。當您逐漸結束時，這是否會成為對損益表的拖累的預期？

I mean what we got to sell is all the rage these days. So we're doing pretty well.

我的意思是我們現在賣的東西很流行。所以我們做得很好。

Our next question is coming from Terry McEvoy with Stephens.

我們的下一個問題來自特里·麥克沃伊和史蒂芬斯。

Maybe first question. What are you going to do with all the capital you're building? Brad, you mentioned stock repurchase program, but what are your thoughts on building it to take advantage of any future kind of in-market M&A opportunities?

也許是第一個問題。你打算用你正在建立的所有資本做什麼？布拉德，您提到了股票回購計劃，但是您對建立該計劃以利用未來任何類型的市場併購機會有何想法？

It's hard to say when something is going to present itself. But what I do know is in this environment, it takes a lot of capital to stomach the marks in order to earn a lot of accretion. I don't know whether that's going to show up or not, which is why we need to be ready with the buyback as well. It's not lost on me that when you raise rates this fast and this far, 99 times out of 100, you enter some sort of form of recession. And I also know that the tangible book value per share effectively serves as some level of a floor in valuation. So I think our investors are well protected by us raising that floor.

很難說某些東西什麼時候會出現。但我所知道的是，在這種環境下，需要大量的資本來承受這些分數，才能獲得大量的增值。我不知道這是否會出現，這就是為什麼我們也需要為回購做好準備。我並沒有忘記，當你升息得這麼快、這麼遠，100 次中有 99 次，你就會進入某種形式的衰退。我還知道，每股有形帳面價值實際上可以作為估值的某種程度的下限。因此，我認為我們提高此一下限可以很好地保護我們的投資者。

There's very little cost to carry excess capital right now, given the alternative funding yields are [$5.5 million]. So on a relative basis, the cost of carrying excess capital is much lower today than it typically is. So all of that just in terms of prudence and protecting against tail risks. Minimizing potential shocks to the stock price, all of that argues to carry more capital than not right now, and that's what we're doing. I do recognize that some level is too much.

鑑於替代融資收益率為 [550 萬美元]，目前持有過剩資本的成本非常低。因此，相對而言，今天持有過剩資本的成本比通常情況要低得多。因此，所有這些只是出於謹慎和防範尾部風險的目的。盡量減少對股價的潛在衝擊，所有這些都表明我們現在應該持有更多的資本，而這就是我們正在做的事情。我確實認識到某些水平太多了。

And so we are prepared to step in and return some of it should that condition present itself. I can't tell you we will be there in the near term, but I can tell you we will be ready to be there in the near term, at least that's my hope that there is no objection, I can't imagine there would be. So that's kind of what my thinking is, Terry, if that makes sense.

因此，如果發生這種情況，我們準備介入並退還部分款項。我不能告訴你我們會在短期內到達那裡，但我可以告訴你我們會在短期內準備好到達那裡，至少我希望沒有人反對，我無法想像會有是。這就是我的想法，特里，如果這有道理的話。

And what are your thoughts on the near-term margin outlook? Can new loan yields and some of the balance sheet flexibility you talked about earlier offset just deposit pricing pressure. I did -- you called out CD specials and I looked, you've got a 4.5% 8-month CD. Tough to keep the margin if that's your incremental funding cost.

您對近期利潤率前景有何看法？新的貸款收益率和您之前提到的一些資產負債表靈活性能否抵消存款定價壓力？我做到了——你叫出了 CD 特價，我一看，你有一張 4.5% 的 8 個月 CD。如果這是您的增量資金成本，那麼很難保持利潤。

Well, we're doing okay. I mean we're growing some. It's just, I'm a bit mystified, right, is that you can't fight the flows in this business. Money has only a few places to go to. And everybody decided they were a genius of growing deposits when money into the banking system was flowing in at 35% a year. The reality is that nothing to do with execution for almost everybody. And you can fight those flows if you want to, but it will cost you 5.5%. What we've tried to do is maintain the balance sheet flexibility to stomach the outflows just like we stomach the inflows, not do anything stupid. And we can make a lot of money just optimizing. So that's kind of what we're up to.

嗯，我們做得很好。我的意思是我們正在種植一些。只是，我有點困惑，對吧，就是這個行業你無法對抗流量。金錢只有幾個地方可以去。當流入銀行體系的資金每年以 35% 的速度流入時，每個人都認為自己是增加存款的天才。現實情況是，對幾乎每個人來說，這與執行力無關。如果您願意，您可以對抗這些流量，但這將花費您 5.5%。我們試圖做的是保持資產負債表的靈活性，以承受資金流出，就像我們承受資金流入一樣，而不是做任何愚蠢的事情。而且我們只要透過優化就可以賺很多錢。這就是我們要做的。

As far as margin goes, I think last quarter, I said plus or minus 5 basis points. Maybe I said it, but it was certain -- maybe I didn't. But it was my intention that the plus side of that was more likely. We do still have some benefit to come on the loan repricing side from the last rate hike. If there's another one, our bias is for a higher margin. If there's not another one, I would say that we're probably more like minus 3 basis points. Given what we're selling on the variable portion and given our current positioning. So stable, plus or minus a few basis points with minus more likely if there's no further rate hikes, but everything should be pretty much like this.

就利潤率而言，我認為上個季度我說過正負 5 個基點。也許我說過，但可以肯定的是──也許我沒有說過。但我的意圖是更有可能實現有利的一面。從上次升息來看，我們在貸款重新定價方面確實仍然有一些好處。如果有另一種選擇，我們的偏見是更高的利潤。如果沒有另一個基點，我想說我們可能更像是負 3 個基點。考慮到我們在可變部分上銷售的產品以及我們目前的定位。如此穩定，加上或減去幾個基點，如果沒有進一步加息，則更有可能出現負值，但一切都應該是這樣的。

And maybe one last question, if I could. CRE loan maturities in the fourth quarter and early part of next year, have you gotten ahead of that in terms of what higher rates could do to those borrowers and was that incorporated?

如果可以的話，也許還有最後一個問題。 CRE 貸款將於第四季度和明年初到期，您是否已經提前了解了更高的利率可能對這些借款人產生的影響？這是否已納入考慮範圍？

(inaudible) we've been pulling our hair out, shocking stuff. And you know me, Terry, I don't have much hair anyway so...

（聽不清楚）我們一直在拔頭髮，令人震驚的事。你了解我，特里，反正我頭髮不多，所以......

So our next question is coming from Chris McGratty with KBW.

我們的下一個問題來自 KBW 的 Chris McGratty。

Some of your peers are restructuring balance sheets for mistakes they made with rates. You guys seemingly don't have to do that, but you could if you had to prove them. I guess the question more open ended on that and also just max loan to deposit you're willing to run with given the optimization you talked about.

你的一些同業正在重組資產負債表，以彌補他們在利率上犯下的錯誤。你們似乎不必這樣做，但如果你們必須證明的話，你們可以這樣做。我想這個問題更加開放，考慮到您談到的優化，您願意運行的最大貸款存款也只是這樣。

So you're talking about selling securities that are perfectly mark-to-market in order to buy different securities that are perfectly mark-to-market?

那麼您是在談論出售完全按市值計價的證券，以便購買完全按市值計價的不同證券？

Just -- yes, within the bond, but then I know (inaudible) but is there any piece of it that you would think about?

只是——是的，在債券之內，但我知道（聽不清楚），但你會考慮其中的任何部分嗎？

No. I see absolutely no scenario whereby we would do that. We -- 2.7-year duration means we're in darn good shape. I'm very happy with where we are. And what was the second part...

不，我認為我們絕對不會這樣做。我們－2.7 年的持續時間意味著我們的狀態非常好。我對我們現在的處境非常滿意。第二部分是什麼...

Yes, I think from a loan-to-deposit standpoint, Chris, I mean I think we could comfortably take this up to 90, 95. I would not expect a whole lot of growth, a whole lot of loan growth for the balance of this year based on kind of where our pipelines are, they're about 1/3 of what they were a year ago. So we're really focused on optimization, expense control and credit.

是的，我認為從貸存比的角度來看，克里斯，我的意思是，我認為我們可以輕鬆地將其提高到 90、95。我預計餘額不會出現大量增長、大量貸款增長。根據我們的管道情況，今年的數量約為一年前的1/3。因此，我們真正關注的是優化、費用控制和信貸。

Okay. You talked about margin. I mean, NII, I guess, putting the pieces together around these levels, Brad.

好的。您談到了保證金。我的意思是，NII，我想，將這些級別的各個部分放在一起，布拉德。

Yes. I think so. I think we've got a chance of growing it. I mean we're making a lot of money right now, and that's kind of what our focus is. I'm a little surprised that expectations for us as pessimistic as they are. But we're just going to continue to make sure we're positioned for any tails that are out there and doing the prudent thing on the balance sheet, which is reducing asset sensitivity, while still making a healthy amount of money.

是的。我想是這樣。我認為我們有機會發展它。我的意思是我們現在賺了很多錢，這就是我們的重點。我有點驚訝我們的期望如此悲觀。但我們將繼續確保我們為任何存在的尾部做好準備，並在資產負債表上採取謹慎的做法，降低資產敏感性，同時仍賺取可觀的資金。

Maybe just the last 2. The BOLI looked a little high. So just comment on that. And then just going back to capital, you get the nonobjection, but what's the binding -- what's the ratio that keeps you, I guess, prevent you or let you do the buyback? What's the binding metric?

也許只是最後2個。BOLI看起來有點高。所以只是對此發表評論。然後回到資本，你得到了無異議，但約束力是什麼——我想，讓你阻止你或讓你回購的比率是多少？綁定指標是什麼？

I guess the CET1, which we're pretty healthy on. It's -- I can't imagine there would be much of an objection here. I mean we're in real good shape in almost any way you can evaluate a bank. So things feel pretty good on that front.

我猜是CET1，我們在這方面相當健康。我無法想像這裡會有太多反對意見。我的意思是，從你評估銀行的幾乎所有方面來看，我們的狀況都非常好。所以在這方面感覺非常好。

Our next question is coming from Nathan Race with Piper Sandler.

我們的下一個問題來自內森·雷斯（Nathan Race）和派珀·桑德勒（Piper Sandler）。

Going back to Chris' question just on terms of growing NII at least near term. What does that contemplate in terms of kind of deposit balances from here in the overall size of the sheet. It sounds like, Brad, maybe there's an opportunity to continue to reduce wholesale funding, which would support that outlook. But kind of curious to kind of hear some of the underlying balance sheet drivers to get there.

回到克里斯的問題，至少在短期內增加NII。從這裡的存款餘額類型到表格的整體規模來看，這意味著什麼？布拉德，聽起來也許有機會繼續減少批發資金，這將支持這一前景。但我有點好奇，想聽聽實現這一目標的一些潛在的資產負債表驅動因素。

Optimization, right? So a smaller bond portfolio that can add their manifest through smaller overnight borrowings. But what we tried to do during 2021, when everybody was convinced inflation was transitory as we try to stagger maturities such that we get back a healthy amount of money relatively quickly. Should the situation we find ourselves in today, present itself, which it obviously has. Over the next 12 months, we have several hundred million dollars -- well, we got a couple of hundred million dollars anyway of treasury securities that are yielding sub-70 basis points to us that it will be coming back to us.

優化吧？因此，較小的債券投資組合可以透過較小的隔夜借款來增加其表現。但我們在 2021 年試圖做的事情，當時每個人都相信通貨膨脹是暫時的，因為我們試圖錯開期限，以便我們相對快速地收回適量的資金。如果我們今天所處的情況出現的話，它顯然已經出現了。在接下來的12 個月裡，我們有幾億美元——好吧，無論如何，我們有幾億美元的國債，這些證券給我們帶來了低於70 個基點的收益，而且它們將會回到我們身邊。

And again, that can either manifest through smaller overnight borrowings, earning a 400 basis point spread improvement or it can manifest through loans, earning 700 basis point spread improvement. We just have money coming in at the appropriate time in order to reposition and optimize the earning asset mix, which is what we've been talking about for the last year.

同樣，這可以透過較小的隔夜借款來體現，從而獲得 400 個基點的利差改善，也可以透過貸款來體現，從而獲得 700 個基點的利差改善。我們只是在適當的時間獲得資金，以便重新定位和優化獲利資產組合，這就是我們去年一直在談論的內容。

It's tough, right? You try and tell people that you're in a good position in terms of what maturities you've got rolling off win, but we've done a nice job. And we've got ample opportunities to continue to optimize the earning asset mix coming at us over the next 12 months.

這很難，對吧？你試圖告訴人們，就你所獲得的勝利而言，你處於有利的位置，但我們做得很好。未來 12 個月，我們有充足的機會繼續優化獲利資產組合。

Okay. Got it. And just going back to credit and the charge-offs in the quarter. It sounds like these were the office CRE loans that you guys flagged, I think, back in April coming out of 1Q earnings tied to West Suburban. And it also seems like there's still some chunky nonperformers that are tied to that acquisition. Can you just remind us kind of what fair value marks of purchase accounting, you're holding against those loans and just kind of how you're thinking about loss content potentially going forward as those credits are resolved going forward?

好的。知道了。回到本季的信貸和沖銷。我想，這些聽起來像是你們在 4 月標記的辦公室 CRE 貸款，來自與 West Suburban 相關的第一季收益。而且似乎還有一些與該收購相關的業績不佳的公司。您能否提醒我們，您對這些貸款持有哪些購買會計的公允價值標記，以及您如何考慮隨著這些信貸的解決而可能發生的損失內容？

So both of the properties that we took the charges on were, in fact, office loans. One, both downtown Chicago that had just been struggling as a result of COVID. And again, we're positioning those for sale or no sale. With regards to the nonaccruals, yes, they're chunky. And like I mentioned before, a fair amount of them are our participations that were not leading. So we're working with the lead bank to find an equitable resolution there.

因此，我們收取費用的兩處房產其實都是辦公室貸款。一是芝加哥市中心剛因新冠疫情而陷入困境。再說一遍，我們將這些產品定位為出售或不出售。至於非應計費用，是的，它們很大。正如我之前提到的，其中相當一部分是我們的參與，但沒有發揮主導作用。因此，我們正在與牽頭銀行合作，尋求公平的解決方案。

As far as the purchase of accounting marks, I'll let Brad talk about that.

至於購買會計標記的問題，我會讓布拉德談談。

So the purchase accounting is a little different than it used to be, right? And what we tried to do is rebuild the provision as the credit marks accrete and we -- I think you can see that, that's occurred. We do have substantial allocations to anything that we are concerned about. So that's why earnings streams really shouldn't be interrupted in terms of what falls to the bottom line as we work out of these credits. I think that what I'd like investors to know is that the acquisition that we've done has been an absolute home run for our investors. It was both well timed and well executed. But no acquisition is perfect.

所以採購會計與以前有點不同，對吧？我們試圖做的是隨著信用分數的增加而重建準備金，我想你可以看到，這已經發生了。我們確實對我們關心的任何事情都有大量撥款。因此，這就是為什麼當我們用這些積分來計算利潤時，收入流確實不應該中斷。我認為我想讓投資者知道的是，我們所做的收購對我們的投資者來說絕對是全壘打。它的時機恰到好處，而且執行得很好。但沒有一項收購是完美的。

And certainly, the weakness within the last one was on the asset generation side and they basically purchased syndicated loans within that deal. And we've -- we told you from the very beginning that we were going to work out of those, and we've cut the syndications from that deal in half at this point, and we'll continue to move it down. What we've seen so far in terms of weakness in downgrades, and we are downgrading realistically even without loss content is that the bulk of our problems, the overwhelming majority of our problems are poorly rated credits do come from acquisitions. Old Second originated portfolio remains very strong.

當然，上一筆交易的弱點在於資產生成方面，他們基本上在該交易中購買了銀團貸款。我們從一開始就告訴你們，我們將解決這些問題，目前我們已將該交易中的銀團削減了一半，我們將繼續將其降低。到目前為止，我們在降級方面看到的弱點，即使沒有損失內容，我們也在實際降級，我們的大部分問題，絕大多數問題是評級不佳的信用確實來自收購。老二起源的投資組合仍然非常強勁。

So we'll continue to get through this. And what's helpful is for people to have perspective that not everything is a 100, but even that 90% in terms of acquisition -- the execution on an acquisition is still pretty darn good.

所以我們將繼續解決這個問題。有用的是讓人們認識到並非一切都是 100，但即使在收購方面達到 90%，收購的執行情況仍然非常好。

Understood. And it sounds like kind of the near-term loan growth outlook is pretty modest at least near term. So just curious how you guys are thinking about the reserve trajectory from here? You guys still sit at a pretty healthy level compared to a lot of your peers. And it does sound like there's additional material charge-offs moving on the horizon from what we can see today. So just any thoughts on just how the reserve trends going forward?

明白了。聽起來短期貸款成長前景至少在短期內相當溫和。所以只是好奇你們是如何考慮這裡的儲備軌跡的？與許多同齡人相比，你們仍然處於相當健康的水平。從我們今天所看到的情況來看，聽起來確實會有更多的材料沖銷即將出現。那麼對於儲備金未來的趨勢有何想法呢？

I think we'll probably take one more charge-off, but it's largely allocated for. And then we'll probably do what we've been doing, which is protect against the tail risk of a potential recession and just kind of hold it where it is, maybe bleed it up just a tiny bit. But I don't see a lot to be worried about at this point.

我認為我們可能會再進行一次沖銷，但大部分已分配給它。然後我們可能會做我們一直在做的事情，即防範潛在衰退的尾部風險，並保持在原位，也許只是稍微減少一點。但目前我認為無需擔心太多。

Okay. Great. And if I could just ask one more on expenses. I think you mentioned 22% to 23% in terms of comp near term. Does that kind of translate to kind of flattish expenses in the fourth quarter? And just get any overall thoughts on how you (inaudible).

好的。偉大的。如果我能再問一下有關費用的問題嗎？我想你提到了近期的薪酬是 22% 到 23%。這是否意味著第四季的支出持平？並了解您的整體想法（聽不清楚）。

And that reminds me too, that is the case, flattish kind of in the fourth quarter, maybe a little bit of improvement. Chris, I forgot to answer your question about the BOLI. I'm sorry, I'm below par today. We restructured the BOLI from an absolute ridiculously awful asset to a slightly better asset in terms of what we did with that, and that is both the portfolio that we acquired from previous acquisitions and our existing. So what you're seeing this quarter is at run rate it's still awful and we'll never buy any ever again. But it is at run rate.

這也提醒了我，情況就是這樣，第四季表現平平，也許有一點改善。克里斯，我忘了回答你關於 BOLI 的問題。對不起，我今天的成績低於標準。就我們所做的事情而言，我們將 BOLI 從絕對糟糕的資產重組為稍微好一點的資產，這既是我們從先前的收購中獲得的投資組合，也是我們現有的投資組合。因此，您在本季看到的運行速度仍然很糟糕，我們永遠不會再購買任何產品。但這是按運行速度進行的。

I'm sorry. So BOLI should stay around the 3Q level. Is that what you're suggesting, Brad?

對不起。因此，BOLI 應該會維持在第三季水準附近。這就是你的建議嗎，布萊德？

Yes. That's correct. I apologize for failing to answer that earlier.

是的。這是正確的。對於未能早點回答這個問題，我深表歉意。

No problem. And then just any thoughts on kind of overall expenses. I know it's early in the process and thinking about 2024 expenses, but any high-level thoughts on your...

沒問題。然後就是對整體費用的任何想法。我知道現在還處於這個過程的早期，正在考慮 2024 年的開支，但對你的…的任何高層想法

Right now, I'm open for 3% to 4%, right? We still have to make sure that our employees are treated well, given how much more expensive a gallon of milk and a pound of bacon is. And we want people to be happy to work here. So we do have some inflationary headwinds that we do have to be mindful of. But what we did do as our margin was rocketing higher as any deferred maintenance and buying a whole bunch of new computers and repaving parking lots and all that stuff. We've got that in our rearview mirror. So we don't have a lot of CapEx ahead of us.

現在我的開倉價是3%到4%，對吧？考慮到一加侖牛奶和一磅培根要貴得多，我們仍然必須確保我們的員工得到良好的待遇。我們希望人們在這裡工作愉快。因此，我們確實面臨一些必須注意的通膨阻力。但我們所做的，是因為我們的利潤隨著任何延期維護、購買一大堆新電腦、重新鋪設停車場等等而飆升。我們已經在後視鏡中看到了這一點。因此，我們沒有太多的資本支出。

And is that 3% to 4% outlook, did that contemplate any opportunities to hire on the RM side of things to make sure there's been opportunities -- materialize on that front these days.

3% 到 4% 的前景是否考慮過在 RM 方面招募任何機會，以確保有機會——這些天在這方面實現了。

Yes, we're always looking to get better.

是的，我們一直在尋求變得更好。

Our next question is coming from David Long with Raymond James.

我們的下一個問題來自大衛·朗和雷蒙德·詹姆斯。

On the loan growth expectations, obviously, benign here, but just want to see if you can break it down between how much is based on Old Second's appetite versus demand in the marketplace?

關於貸款成長預期，顯然，這裡是良性的，但只是想看看你是否可以將其分解為老二的胃口與市場需求之間的比例？

Well, first, David, I would say overall loan demand is pretty muted right now. We're seeing a lot of borrowers just pull back on CapEx and kind of expansion. We're still seeing a decent amount of deal flow in our sponsored finance group and some of our leasing verticals. Beyond that, C&I and commercial real estate is largely dormant. We're still looking at opportunities, but the risk-adjusted returns on what we're seeing today just don't make a lot of sense when you look at really where we have to fund it at the margin. So we'll be very selective. I think with what we have in our pipeline will probably keep up with the runoff and paydowns, but low single-digit growth is probably what we're looking at over the near and long term.

好吧，首先，大衛，我想說目前整體貸款需求相當低迷。我們看到很多藉款人只是縮減資本支出和擴張。我們的贊助金融集團和一些租賃垂直領域仍然看到了大量的交易流量。除此之外，工商業和商業房地產基本上處於休眠狀態。我們仍在尋找機會，但當你真正考慮我們必須在哪些方面提供保證金時，我們今天看到的風險調整回報並沒有多大意義。所以我們會非常有選擇性。我認為，我們現有的產品可能會跟上徑流和支出，但我們在短期和長期內可能會看到低個位數的成長。

Got it. Okay. And then a follow-up question. When you look at the securities portfolio, obviously, running off, and you guys have -- I've said it before, you have done one of the best jobs in managing that portfolio through the pandemic. But when you look at using that as a liquidity base, how low is a percentage of earning assets do you see that getting at this point?

知道了。好的。然後是後續問題。當你看到證券投資組合時，顯然，它們正在流失，而你們——我之前已經說過，你們在疫情期間管理該投資組合方面做得最好的工作之一。但是，當您考慮將其用作流動性基礎時，您認為目前盈利資產的百分比有多低？

It can go from -- I think it's what it's like 20 right now, can go to 15, yes.

它可以從——我認為現在是 20 個，可以到 15 個，是的。

(Operator Instructions) Our next question is coming from Brian Martin with Janney.

（操作員說明）我們的下一個問題來自 Brian Martin 和 Janney。

Brad, just you talked last quarter, I think, maybe before that, if we did see -- going to their comment about the pessimism on people's outlook, I mean, I guess, as far as the margin goes, I think you talked about if rates went lower, the margin could kind of bottom in that 4 to 4.25 range. I mean I guess, if we don't see -- if we are higher for longer, we don't see these cuts. I mean is that margin bottom kind of occurring here in the next quarter, and it's in the -- you kind of hold the 450 type of level. Is that kind of more realistic than if we don't see the rate cuts?

布拉德，剛才你在上個季度談到過，我想，也許在那之前，如果我們確實看到了他們對人們前景的悲觀情緒的評論，我的意思是，我想，就利潤率而言，我想你談到如果利率走低，利潤率可能會在 4 至 4.25 的範圍內觸底。我的意思是，我想，如果我們看不到——如果我們的價格持續走高，我們就不會看到這些削減。我的意思是，利潤率底部會在下個季度出現，而且是在——你可以保持 450 點的水平。這是否比我們看不到降息更現實？

Yes. We don't see any rate cuts. We'll -- we are a 450-plus margin bank. If there are no rate cuts from here. If there are 100 basis points in rate cuts, you'd probably see us at that 4 to 4.25. If there's 200 basis points in rate cuts, you probably see is the 3.75 to 4. There's -- I've tried to give -- the candor is that when you look like Old Second, which is a retail quality deposit base, you're inherently volatile to interest rates. And I'm not smart enough to try and hedge that. I don't think you can anyway.

是的。我們沒有看到任何降息。我們將—我們是一家保證金超過 450 美元的銀行。如果這裡不降息的話。如果降息 100 個基點，您可能會看到我們的利率是 4 到 4.25。如果降息 200 個基點，你可能會看到 3.75 比 4。我試圖坦率地說，當你看起來像 Old Second，這是一個零售優質存款基礎時，你本質上對利率具有波動性。我還不夠聰明，無法嘗試對沖這一點。無論如何我認為你不能。

So I'm perfectly willing to accept that we make a lot of money when rates aren't 0, and we make less money when rates are 0. But I don't think we're going back to 0 anytime soon. I think it's been an absolute disaster of a strategy with all kinds of ills. But even if they are 0, we're still a 1% ROA bank.

因此，我完全願意接受這樣的事實：當利率不為 0 時，我們會賺很多錢；而當利率為 0 時，我們會賺更少的錢。但我認為我們不會很快回到 0。我認為這絕對是充滿各種弊病的戰略災難。但即使它們是 0，我們仍然是一家 ROA 為 1% 的銀行。

So do the right thing, protect against tails, except when you -- be willing to accept when you make a lot of money and be willing to make -- accept when you make just a normal amount of money, and that's what we do.

因此，做正確的事，防止尾部，除非你——願意接受你賺了很多錢，願意接受——當你賺了正常數量的錢，這就是我們所做的。

Yes. Okay. I appreciate that. And then just going back to those credits, the new ones that came on board this quarter, the 3 that were classified, it sounded like the loss content just in general, is pretty low for all 3 of those. Is that kind of what the message is with...

是的。好的。我很感激。然後回到這些積分，本季加入的新積分，被分類的 3 個積分，聽起來總體來說損失內容對於所有 3 個積分來說都相當低。郵件裡的內容是這樣的嗎...

That's how we see now, Brian, we've refreshed appraisals. We've got workout strategies in place. Right now, we just don't see any major losses given the fault here. And then I didn't say it on the prior list of questions, but all of these new classified are still paying, and they still have sponsors behind it that are supporting the credits, but we just felt the overall cash flow was weak enough and necessitated downgrade.

這就是我們現在所看到的，布萊恩，我們已經更新了評估。我們已經制定了鍛鍊策略。目前，由於這裡的故障，我們還沒有看到任何重大損失。然後我沒有在之前的問題清單上說，但所有這些新分類仍在付費，而且他們背後仍然有贊助商支持學分，但我們只是覺得整體現金流足夠弱，需要降級。

Okay. And the charge-off that Brad talked about potentially still coming debt from a previous credit that was already identical.

好的。布拉德談到的沖銷可能仍然來自先前已經相同的信貸中的債務。

Yes, that's the same stuff we've been talking about since April.

是的，這就是我們自四月以來一直在談論的事情。

Okay. Just making clear on that. And then the portfolio, you mentioned the participation portfolio where some of these credits have come from. Can you size up where that's at today?

好的。只是澄清這一點。然後是投資組合，您提到了其中一些學分來自的參與投資組合。你能估量一下今天的情況嗎？

$250 million to $300 million.

2.5億至3億美元。

So the $250 million to $300 million. And how much of that is currently classified today?

所以2.5億到3億美元。目前其中有多少是屬於機密？

What 4%, 5%.

什麼4%、5%。

Yes, I'd say less than that.

是的，我想說的還不只這些。

Okay, 4% to 5 %. And then just on the -- you talked about always wanted to get better, Brad, and I guess are you seeing opportunities, given the weak demand out there currently? I mean it sounds like the ability to hire is what's going to contribute to improvements in the economy, getting loan engine kind of moving back. I mean, are there opportunities to add talent today? Or is it a struggle to find talent today?

好的，4% 到 5%。然後就--你談到總是想要變得更好，布拉德，鑑於目前需求疲軟，我想你是否看到了機會？我的意思是，聽起來招募能力將有助於改善經濟，讓貸款引擎回歸。我的意思是，今天有機會增加人才嗎？還是今天很難找到人才？

We've continued to add some one-off relationship managers even this year, we budget for it every year. And we still -- we've had some success even this quarter. So we'll continue to look for those opportunities in the '24.

即使是今年，我們仍然繼續增加一些一次性的客戶關係經理，我們每年都會為此制定預算。即使在本季度，我們仍然取得了一些成功。因此，我們將在 24 世紀繼續尋找這些機會。

The best time to grow is when everybody else gets scared. So that's kind of what our viewpoint is.

成長的最佳時機是當其他人都感到害怕的時候。這就是我們的觀點。

We have reached the end of our question-and-answer session. So I will now turn the call back over to Mr. Eccher for his closing remarks.

我們的問答環節已經結束。因此，我現在將把電話轉回給埃切爾先生，讓他作結束語。

Okay. Thank you for joining us today. We appreciate your interest in the company, and we look forward to speaking with you next quarter. Goodbye.

好的。感謝您今天加入我們。我們感謝您對公司的興趣，我們期待下個季度與您交談。再見。

Thank you. This concludes today's conference, and you may disconnect your lines at this time, and we thank you for your participation.

謝謝。今天的會議到此結束，此時您可以掛斷電話了，感謝您的參與。