Preferred Bank (PFBC) 2018 Q3 法說會逐字稿

Good day, and welcome to the Preferred Bank Third Quarter 2018 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

美好的一天，歡迎來到首選銀行 2018 年第三季度收益電話會議。（操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Tony Rossi, Investor Relations for Preferred Bank. Please, go ahead.

我現在想將會議轉交給 Preferred Bank 投資者關係部的托尼·羅西 (Tony Rossi)。請繼續。

Thanks, Michelle. Hello, everyone, and thank you for joining us to discuss Preferred Bank's financial results for the third quarter ended September 30, 2018.

謝謝，米歇爾。大家好，感謝您加入我們討論 Preferred Bank 截至 2018 年 9 月 30 日的第三季度財務業績。

With me today from management are Chairman and CEO, Li Yu; President and Chief Operating Officer, Wellington Chen; Chief Financial Officer, Edward Czajka; and Chief Credit Officer, Nick Pi.

今天與我一起來自管理層的是董事長兼首席執行官李宇；總裁兼首席運營官 Wellington Chen；首席財務官 Edward Czajka；和首席信貸官 Nick Pi。

Management will provide a brief summary of the results and then we'll open up the call to your questions.

管理層將提供結果的簡要摘要，然後我們將打開電話回答您的問題。

During the course of this conference call, statements made by management may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon specific assumptions that may or may not prove correct.

在本次電話會議期間，管理層發表的聲明可能包括 1995 年《私人證券訴訟改革法案》含義內的前瞻性聲明。此類前瞻性陳述基於特定假設，這些假設可能被證明是正確的，也可能不正確。

Forward-looking statements are also subject to known and unknown risks, uncertainties and other factors relating to Preferred Bank's operations and business environment, all of which are difficult to predict and many of which are beyond the control of Preferred Bank. For a detailed description of these risks and uncertainties, please refer to the SEC required documents the bank files with the Federal Deposit Insurance Corporation or FDIC. If any of these uncertainties materialize or any of these assumptions prove incorrect, Preferred Bank's results could differ materially from its expectations as set forth in these statements. Preferred Bank assumes no obligation to update such forward-looking statements.

前瞻性陳述還受到已知和未知的風險、不確定性和其他與首選銀行的運營和商業環境相關的因素的影響，所有這些都難以預測，其中許多超出首選銀行的控制範圍。有關這些風險和不確定性的詳細說明，請參閱美國證券交易委員會要求的銀行向聯邦存款保險公司或 FDIC 提交的文件。如果這些不確定因素中的任何一個成為現實或這些假設中的任何一個被證明是不正確的，Preferred Bank 的結果可能與其在這些聲明中規定的預期存在重大差異。Preferred Bank 不承擔更新此類前瞻性陳述的義務。

At this time, I'd like to turn the call over to Mr. Li Yu. Please go ahead.

這時候想把電話轉給李宇先生。請繼續。

Thank you. Good morning, ladies and gentlemen. I'm pleased to report for the third quarter ended September 30, 2018, we had a record quarter in total assets, loan, deposits, net interest income, net income and earnings per share. For the quarter, we earned $18.3 million a -- I mean, total net income or $1.20 a share. Among all the good news above it's a very competitive marketplace.

謝謝。早上好，女士們，先生們。我很高興地報告截至 2018 年 9 月 30 日的第三季度，我們的總資產、貸款、存款、淨利息收入、淨收入和每股收益均創歷史新高。本季度，我們賺了 1830 萬美元——我的意思是，總淨收入或每股 1.20 美元。在上述所有好消息中，這是一個競爭非常激烈的市場。

For the quarter, we continue to face strong payoff activities in loans. We lost loans to other banks and loan bank financial institutions, rates or loan terms that we cannot meet, okay? For instance, the most recent several loans of a commercial retail properties that the people are offering to our borrowers prime minus 1 1/4, okay? Or a 4.6% interest-only fixed rate for 10 years, okay? These are the terms we cannot possibly meet. However, we manage to increase our total loan portfolio by nearly $90 million or 2.8% on a linked-quarter basis.

本季度，我們繼續面臨強勁的貸款還款活動。我們失去了對其他銀行和貸款銀行金融機構的貸款，我們無法滿足的利率或貸款條件，好嗎？例如，人們向我們的借款人提供的最近幾筆商業零售物業貸款為 prime -1 1/4，好嗎？或者 10 年 4.6% 的固定利率，好嗎？這些是我們不可能滿足的條件。然而，我們設法將我們的總貸款組合增加了近 9000 萬美元或按季度增加 2.8%。

Deposits is equally competitive. For me, personally, I have never seen the scope and the frequency of deposit rate adjustment that happened recently, especially many of the rate adjustment or rate parade was led by major banks or money central banks, which is quite unusual, okay?

存款同樣具有競爭力。就我個人而言，我從未見過最近發生的存款利率調整的範圍和頻率，尤其是許多利率調整或利率遊行是由主要銀行或貨幣中央銀行牽頭的，這很不尋常，好嗎？

Nationwide, there's a trend of money moving to time deposits. Nevertheless, our staff has managed to increase the Bank's total deposits by $108 million or 3.2%. Our net interest margin has moderately reduced 3 basis points to 4.04% because of the above. Our net interest income increased 5.9% between quarters. Net interest income, which is our -- it is our main focus.

在全國范圍內，存在資金轉向定期存款的趨勢。儘管如此，我們的員工還是成功地將銀行的總存款增加了 1.08 億美元或 3.2%。由於上述原因，我們的淨息差已適度降低 3 個基點至 4.04%。我們的淨利息收入在兩個季度之間增長了 5.9%。淨利息收入，這是我們的——這是我們的主要關注點。

Would like to think that with the upcoming deposit adjustments -- rate adjustments in the future will largely be absorbed by or well covered by any rate increases as Preferred Bank continue to have one of the most asset sensitive balance sheet. We have been and we will continue to manage our overhead.

希望隨著即將到來的存款調整——未來的利率調整將在很大程度上被任何利率上漲所吸收或很好地覆蓋，因為優先銀行繼續擁有對資產最敏感的資產負債表之一。我們已經並將繼續管理我們的管理費用。

Thank you very much. I'm ready for your questions.

非常感謝。我準備好回答你的問題了。

(Operator Instructions) The first question comes from Tim Coffey of FIG Partners.

（操作員說明）第一個問題來自 FIG Partners 的 Tim Coffey。

The last 2 quarters, Preferred has increased deposits faster than loans. Is that a trend that you see continuing going forward?

過去兩個季度，Preferred 的存款增長速度快於貸款增長速度。您認為這種趨勢會持續下去嗎？

Don't know. I have always been saying that there is no pipeline for deposits. All we know is continue to work on it, okay? And deposit product is what you're offering very generic product as everybody else. So there's no new programs for that. We just continue to work and we turn to -- continue to turn over any relationship that we find.

不知道。我一直在說存款沒有管道。我們所知道的就是繼續努力，好嗎？存款產品是您提供的與其他人一樣非常通用的產品。所以沒有新的程序。我們只是繼續工作，我們轉向 - 繼續交出我們發現的任何關係。

Okay. And it makes a lot of sense to be growing deposits faster than loans right now, but it's also corresponded with an increase in your deposit costs. Would you see the deposit costs continuing at the same growth rate?

好的。現在存款增長速度快於貸款增長是很有意義的，但這也與存款成本的增加相對應。你會看到存款成本繼續以同樣的速度增長嗎？

We, largely because of the size of our institution, is a smaller institution in the sea of banks, okay? We really -- most of them reacting to the market deposit rate increases. And most of the time it's defensive movement rather than offensive movement. So I'd like to think in the upcoming 1 or 2 quarters deposit rate may continue to increase at the same speed as that -- as has in the past. But that's assuming everybody is still doing the same thing as before.

我們，主要是因為我們機構的規模，是銀行海洋中的一個較小的機構，好嗎？我們真的 - 他們中的大多數人對市場存款利率上漲做出反應。大多數時候是防守動作而不是進攻動作。因此，我認為在即將到來的 1 或 2 個季度中，存款利率可能會繼續以與過去相同的速度增長。但這是假設每個人仍在做與以前相同的事情。

Sure. And of the CDs that you added this quarter, what were the rates on those?

當然。在本季度添加的 CD 中，這些 CD 的利率是多少？

We posted -- Ed, you want to answer that.

我們發布了-- Ed，你想回答這個問題。

Yes. Well, obviously, it depends on the term, Tim, but anywhere from 1% to probably 2.5% depending on the term. What we're seeing out there is, as Mr. Yu alluded to, a lot of larger banks at the very tops of some of these rate lifts, so it's very interesting to see. But yes, depending on the term, like, for instance, 1.5 year, we're looking at 2.2%, 1 year we're looking at 2% somewhere in there.

是的。好吧，很明顯，這取決於術語，蒂姆，但根據術語的不同，從 1% 到 2.5% 不等。我們看到的是，正如於先生所暗示的那樣，許多大銀行在其中一些加息中處於領先地位，所以看到這一點非常有趣。但是，是的，取決於期限，例如，1.5 年，我們正在尋找 2.2%，1 年我們正在尋找 2% 的某個地方。

By the way, just to give you a benchmark about what the rate in the marketplace is, a major $78 billion California bank is posting 14 months, 2.5%. So another $60 billion, conservatively managed California bank is posting 1 year, 2.5%. So it's all over the place.

順便說一句，為了給你一個關於市場利率的基準，一家價值 780 億美元的加州大銀行公佈了 14 個月的利率，即 2.5%。因此，另一家 600 億美元、管理保守的加州銀行發布了 1 年 2.5% 的利率。所以到處都是。

No. Absolutely. Is it -- do you feel the pressure, the competition for deposits is stronger in Southern California versus that your East Coast footprint?

不。絕對地。是嗎 - 您是否感到壓力，南加州的存款競爭比您在東海岸的足跡更激烈？

I don't know Wellington, how you feel. I see East Coast is so small, okay? That'll...

我不知道惠靈頓，你感覺如何。我看東海岸這麼小，好嗎？那會...

East Coast is small but the time that I spent over there and per the -- our people over there is just as competitive. And understanding that all branch facility on the East Coast, on The Street, there's about 50 banks, large and small. So the answer, Tim, is that it's pretty much the same, if not more actually.

東海岸很小，但我在那裡度過的時間以及我們那裡的員工同樣具有競爭力。並且了解東海岸的所有分行設施，在這條街上，大約有 50 家大大小小的銀行。所以蒂姆，答案是幾乎相同，甚至更多。

The next question comes from Steve Moss of B. Riley FBR.

下一個問題來自 B. Riley FBR 的 Steve Moss。

I guess, folks on the other side of the balance sheet, just kind of wondering, where loan yields are these days? And kind of, what's running off and what are you able to book loans on these -- today?

我想，資產負債表另一端的人們只是想知道，這些天的貸款收益率在哪裡？有點，什麼正在流失，你能為這些預訂什麼貸款——今天？

Well, most recent several increases that Fed Reserve has done, what the marketplaces used to be, we -- let's say, we're able to book certain type of loan a prime plus 1, okay? Now generally speaking, we're getting is prime plus 0.5 to kind of prime plus 3, 3 quarters for this segment type of a loan. There's all different segment of loans I mean that commands a different type of price, okay? Even in the real estate, when you -- even in the commercial real estate, when you are so-called the apartments usually to come in a much lower rate and many times it is fixed rate. So it is all over the place, it's safe to say that the margin over prime, our margin over the -- whatever the index is, has been gradually reducing.

好吧，美聯儲最近幾次加息，過去的市場是什麼，我們——比方說，我們能夠預訂某種類型的貸款 prime 加 1，好嗎？現在一般來說，對於這種類型的貸款，我們得到的是 prime 加 0.5 到 prime 加 3、3 個季度。有所有不同的貸款部分，我的意思是要求不同類型的價格，好嗎？即使在房地產中，當你 - 即使在商業房地產中，當你所謂的公寓時，通常也會以低得多的價格出現，而且很多時候是固定利率。所以它無處不在，可以肯定地說，我們對 prime 的保證金，我們對 - 無論指數是什麼的保證金，一直在逐漸減少。

With that said, Steve, the average yield this quarter on the loan portfolio is 5.75%.

話雖如此，史蒂夫，本季度貸款組合的平均收益率為 5.75%。

Okay, that's helpful. And then, wondering on expenses here, what are your expense expectations for the fourth quarter? And the conversion-related stuff as well?

好的，這很有幫助。然後，想知道這裡的費用，您對第四季度的費用預期是多少？還有與轉換相關的東西？

Well, obviously, we're a little bit light in Q3 at 13.6%, which was nice to see. So we will definitely see some increase, we'll probably likely be in the low 14s for noninterest expense for Q4 would be my guess. As our day 2 items for our system conversion start to go into effect in terms of the people and the project.

好吧，很明顯，我們在第三季度有點輕，為 13.6%，這很高興看到。所以我們肯定會看到一些增長，我猜第四季度的非利息支出可能會在 14 % 左右。隨著我們系統轉換的第 2 天項目開始在人員和項目方面生效。

Okay. And kind of how do we think about the conversion expense beyond that and into 2019?

好的。我們如何看待 2019 年之後的轉換費用？

Well, beyond that there shouldn't be much at all. We'll probably have a little bit in Q1 of 2019 as the last of the day 2 items are implemented, and then we shouldn't see anything in terms of impact from conversion beyond that.

好吧，除此之外根本不應該有太多。我們可能會在 2019 年第一季度有一點作為第 2 天項目的最後一個實施，然後我們應該不會看到任何來自轉換的影響。

Okay, that's helpful. And then my third question with regard to the increase in the reserve ratio and the provision. Just wondering if any of that was related to the transfer of the New York loans back to held for investment or if there's anything just underlying that you're adding reserves for?

好的，這很有幫助。然後是第三個問題，關於上調準備金率和撥備。只是想知道這是否與將紐約貸款轉回持有投資有關，或者是否有任何基礎需要您增加準備金？

That's the main reason.

這是主要原因。

The next question comes from Tyler Stafford of Stephens Inc.

下一個問題來自 Stephens Inc. 的 Tyler Stafford。

So I just wanted to follow up on that last question regarding the New York credits. So I'm just trying to understand, I guess, better what happened this quarter. So last quarter you decided to market the notes, move them to HFS. This quarter you moved it back into HFI. So are we to assume there is basically no market for the notes at a price that you found acceptable?

所以我只想跟進關於紐約學分的最後一個問題。所以我只是想更好地了解本季度發生的事情。所以上個季度你決定推銷票據，將它們轉移到 HFS。本季度您將其移回 HFI。那麼，我們是否可以假設以您認為可以接受的價格發行的票據基本上沒有市場？

Tyler, this is Nick Pi speaking. The reason is that because currently we work with a bankruptcy trustee try to solve the issue as rapidly as possible. So the trustee, we signed stipulation with them to like have trust -- options to sell in the bankruptcy, which will speed up the process of solving these 2 New York loans.

泰勒，我是尼克·派。原因是因為目前我們與破產受託人合作，試圖盡快解決問題。因此，受託人，我們與他們簽署了協議，以擁有信任——在破產時出售的選擇權，這將加快解決這兩項紐約貸款的過程。

Okay. So you think you can recover on these or move past these quicker by going this route rather than just selling the notes as you had planned last quarter? Is that...

好的。所以你認為你可以通過走這條路而不是像上個季度計劃的那樣僅僅出售票據來恢復這些或更快地通過這些？就是它...

Yes, that is true.

是的，這是真的。

Okay. When was the last time you received a payment from those borrowers? Or borrower?

好的。您最後一次收到這些借款人的付款是什麼時候？還是藉款人？

I believe it should be back in February of this year.

我相信它應該在今年二月份回來。

Okay, all right. Maybe just going back to the earlier comments, just about loan competition. Mr. Yu mentioned earlier that pressured your overall growth this quarter. As you point out the growth was still actually quite strong this quarter. So I was just wondering if you could give us an idea of the magnitude of that impact that the competition had on the overall growth this quarter.

好的，好的。也許只是回到之前的評論，只是關於貸款競爭。於先生之前提到，這對你們本季度的整體增長構成壓力。正如您所指出的那樣，本季度的增長實際上仍然非常強勁。所以我只是想知道你是否可以讓我們了解競爭對本季度整體增長的影響程度。

Well, we could have grown similar to last year, okay? Which is in the mid-teens, a little over mid-teen in the growth rate. But this quarter, as I've spoken, the -- some of the loans that's been offered to our customers, in my personal opinion, is unimaginable in the rate they've being offered. We can only congratulate our customer and encourage them to just go ahead and take the deal. How can you not taking those shopping center loans, what 1 year ago it was a dog, okay? Let me -- by everybody's opinion, shopping center is bad, okay? While people offering prime plus 1 1/4 now, okay? So it's something that you love the customer, they -- hopefully they still like us, but you just have to give up.

好吧，我們本可以像去年一樣成長，好嗎？在十幾歲左右，增長率略高於十幾歲。但正如我所說，本季度，在我個人看來，向我們的客戶提供的一些貸款的利率是難以想像的。我們只能祝賀我們的客戶並鼓勵他們繼續前進並接受交易。你怎麼能不拿那些購物中心的貸款，什麼 1 年前它是一條狗，好嗎？讓我——根據大家的意見，購物中心很糟糕，好嗎？現在人們提供 prime 加 1 1/4，好嗎？所以這是你愛客戶的東西，他們 - 希望他們仍然喜歡我們，但你只能放棄。

Yes, understood. And then I just want to clarify one more comment, just around the deposit pricing expectation, so if competition stays status quo as it is today then you'd expect a similar deposit cost increase next quarter, was that the comment you said earlier?

是的，明白了。然後我只想澄清一個關於存款定價預期的評論，所以如果競爭保持現狀，那麼你會預計下個季度會有類似的存款成本增加，這是你之前說過的評論嗎？

Well, it is just the larger type of comment, okay? If deposits costs marketplace increase at an average of, let's say, 30 basis points, well, next quarter probably a 30 basis point too. But I hope it is not that much because everybody is pressing their deposit costs pretty much to the side in excess of loan rate increases. You -- Ed, you have some numbers, right?

好吧，這只是較大類型的評論，好嗎？如果存款成本市場平均增加 30 個基點，那麼下個季度也可能增加 30 個基點。但我希望它不會那麼多，因為每個人都在將他們的存款成本壓低到超過貸款利率上漲的程度。你——埃德，你有一些數字，對吧？

Yes. So Tyler, just to give you a little -- some maths behind it. Our total cost of deposits in the second quarter went up 19 basis points, okay? And if you will recall, that's when we kind of jump back in the market for deposits, we kind of just took the first quarter off. The increase in cost of deposits in this quarter moderated down to 16 basis points. So if we can see that as a trend, that's great. But as Mr. Yu said, we'll certainly still be looking for certainly an increase in cost of deposits. But what we don't have yet baked in is the 25 basis points we got at the end of September on the loan side.

是的。所以泰勒，只是給你一點——一些背後的數學。我們第二季度的總存款成本上升了 19 個基點，好嗎？如果你還記得的話，那是我們重新回到存款市場的時候，我們剛剛休假了第一季度。本季度存款成本增幅放緩至 16 個基點。因此，如果我們能將其視為一種趨勢，那就太好了。但正如於先生所說，我們肯定仍會期待存款成本的增加。但我們還沒有考慮到我們在 9 月底在貸款方面獲得的 25 個基點。

Yes. Okay. Well, so if you don't have -- let me just ask one more. So if you don't have the September hike, I guess, obviously not in the quarter, but would just -- from a trajectory standpoint, if those deposit costs do, hopefully, plateau or migrate modestly lower and you get the benefit from September. So you -- would you expect the margin to expand from this level over the near term?

是的。好的。好吧，如果你沒有——讓我再問一個。因此，如果你沒有 9 月加息，我想，顯然不會在本季度，但只是 - 從軌蹟的角度來看，如果這些存款成本確實如此，希望穩定或適度下降，你將從 9 月開始受益.所以你 - 你會期望利潤率在短期內從這個水平擴大嗎？

Well, I can only hope for it because that will certainly enhance our earnings.

好吧，我只能寄希望於它，因為這肯定會增加我們的收入。

It's a possibility.

這是一種可能性。

The question comes from Aaron Deer of Sandler O'Neill.

問題來自 Sandler O'Neill 的 Aaron Deer。

Am I coming through?

我來了嗎？

Yes.

是的。

Now you are.

現在你是。

Sorry. Okay. The -- just kind of following through on the margin discussion. I know you guys booked mostly variable rate loans. Can you remind me if -- is that still north of 90% of the total portfolio that's variable rate? And I think, also, predominantly tied to prime, is that correct?

對不起。好的。-- 只是繼續進行邊際討論。我知道你們預訂的大多是浮動利率貸款。你能提醒我——可變利率佔總投資組合的 90% 以上嗎？而且我認為，主要與質數有關，對嗎？

Yes. Okay?

是的。好的？

Okay. And then, maybe give us a sense of what the -- it sounds like paydowns are a challenge as they're for a lot of banks. What was the magnitude of the paydowns this quarter? And how does that compare to recent quarters?

好的。然後，也許讓我們了解 - 聽起來支付是一個挑戰，因為它們對很多銀行來說都是一個挑戰。本季度的回報率是多少？與最近幾個季度相比如何？

Well, paydown in the last 3 quarters is probably...

好吧，過去 3 個季度的回報可能是……

$150 million.

1.5 億美元。

Yes. But consistently at the $150 million level. So last quarter, I mean, September quarter is slightly less than that, but the kind of the paydown is hurting. We saw that some of the loans are really good quality loan on that as we were explaining in the earlier meeting.

是的。但始終保持在 1.5 億美元的水平。所以上個季度，我的意思是，9 月的季度略低於那個，但那種回報正在受到傷害。正如我們在早些時候的會議上解釋的那樣，我們看到一些貸款確實是優質貸款。

Okay. And then, you continue to see some pretty good growth in the C&I category. Is that all homegrown stuff or is any of the participations or what -- and what kind of industries are -- you're seeing the best growth in?

好的。然後，您繼續看到 C&I 類別的一些相當不錯的增長。是所有本土的東西還是任何參與或什麼 - 什麼樣的行業 - 你看到最好的增長？

So for this quarter, I think all the C&I was homegrown, right?

所以對於這個季度，我認為所有的 C&I 都是本土的，對吧？

Yes.

是的。

Okay.

好的。

Okay. Any particular industries where seeing particular success on that front?

好的。在這方面看到特別成功的任何特定行業？

No. It's across the board.

不。這是全面的。

Okay. And then lastly, on fees. You guys have been making some good progress on growing your trade finance fees. Do you expect that to continue? Or is there any sort of seasonal impact we should look for in the fourth quarter that might bring that down or up?

好的。最後，關於費用。你們在增加貿易融資費用方面取得了一些良好進展。你希望這種情況繼續下去嗎？或者我們應該在第四季度尋找任何可能會降低或提高的季節性影響？

We're not hoping any increase in this first quarter, okay?

我們不希望第一季度有任何增長，好嗎？

Yes, I would look for that to be fairly flattish, Aaron, from herein.

是的，我會從這裡尋找相當平淡的 Aaron。

The next question comes from Don Worthington of Raymond James.

下一個問題來自 Raymond James 的 Don Worthington。

Couple of questions in the expense area. Looks like salaries and benefits were down linked quarter. Anything in particular driving that?

費用方面的幾個問題。看起來工資和福利下降了相關的季度。有什麼特別的原因嗎？

Well, few things, Don. One was, the bonus accrual was slightly less in Q3 than it was in Q2 as interest rates go up. Our hurdle rate goes up in terms of our formula for adding to the bonus pool on our -- in terms of our pretax earnings. So that was one factor. The other was, as loan production increases so does the capitalized costs -- the capitalized personnel costs. So that also increased in Q3 over Q2 and as you know, that's a credit to personnel expenses. We capitalize those costs and amortize them over the life of loan.

好吧，幾件事，唐。一是，隨著利率上升，第三季度的應計獎金略低於第二季度。根據我們增加獎金池的公式，我們的最低迴報率會上升——就我們的稅前收入而言。所以這是一個因素。另一個是，隨著貸款產量的增加，資本化成本——資本化的人員成本也會增加。所以這在第三季度也比第二季度有所增加，正如你所知，這是人事費用的功勞。我們將這些成本資本化並在貸款期限內攤銷。

Okay, great. And then REO expense was up as well. And was that just related to that 1 property that's been there for a while, the $4.1 million?

好的，太好了。然後 REO 費用也增加了。這是否與已經存在了一段時間的 1 處房產有關，即 410 萬美元？

Yes. As you know, we do pay some HOA fees on this, the units that we own. I think we also had an additional legal bill this quarter which drove that up a little bit.

是的。如您所知，我們確實為此支付了一些 HOA 費用，我們擁有的單位。我認為本季度我們還有一項額外的法律法案，這將其推高了一點。

The next question comes from Christopher Hillary of Roubaix.

下一個問題來自魯貝的克里斯托弗希拉里。

You shared some color just on what was changing in the marketplace during the quarter. Would you care to share with us some thoughts on how you think the competitive dynamic around loans and deposits will play out for the rest of the year or the rest of this cycle?

您分享了本季度市場變化的一些顏色。您是否願意與我們分享一些您認為圍繞貸款和存款的競爭動態將如何在今年剩餘時間或本週期剩餘時間發揮作用的想法？

You mean for this cycle? And for overall in my personal opinion for Preferred Bank?

你是說這個循環？就我個人對 Preferred Bank 的總體看法而言？

Well, just -- you commented how there's aggressive loan terms and you've never seen deposit rates move in the way they move during the quarter. So to what extent do you think that's an unusual moment? To what extent -- and just how do you think it's going to play out from here given it's -- I guess so unusual...

好吧，只是 - 你評論瞭如何有激進的貸款條款，你從未見過存款利率以他們在本季度移動的方式移動。那麼你認為那在多大程度上是一個不尋常的時刻？在多大程度上——你認為它會如何從這裡發揮作用——我想這很不尋常……

First of all, there's no history to follow up on that. Logic tells me, things like that couldn't last very long, okay? People cannot be making the loans at, basically, that kind of rate was the cost of fund. I hope everybody has pretty close cost of fund. So how does these particular institution were able to compete that way, we're at a loss. But I don't think it's going to last very long, but again, as a operator of the bank you just have to stay conservative, thinking it might happen now.

首先，沒有歷史可以跟進。邏輯告訴我，那樣的事情不會持續很長時間，好嗎？基本上，人們不能以這種利率發放貸款，即資金成本。我希望每個人的資金成本都非常接近。那麼這些特定機構如何能夠以這種方式競爭，我們不知所措。但我不認為它會持續很長時間，但同樣，作為銀行的經營者，你必須保持保守，認為它現在可能會發生。

Okay. Are there certain areas of loan demand that you think stand out, where there are still opportunities without the unusual degree of competitive rates and terms?

好的。您認為貸款需求的某些領域是否突出，在沒有異常程度的競爭性利率和條款的情況下仍有機會？

Well, there are loan payments outstanding, I mean, there's lot of demand over there, there are certain segment of the loan that people cannot do. For instance, California is short of housing, okay? And that's -- one of the reasons short of housing is that banks generally are keeping their total construction loan portfolio to a certain level, okay? Which is conformed to the current credit environment, okay? And government policy, okay? So result of that, not enough people is making loan in this particular segment, okay? And there's opportunity there but nobody is, really I shouldn't say, be very aggressive about chasing loans there. So there are few segments of that but.

好吧，有未償還的貸款，我的意思是，那裡有很多需求，有些貸款是人們做不到的。舉個例子，加州缺房，好嗎？那就是 - 住房短缺的原因之一是銀行通常將其總建築貸款組合保持在一定水平，好嗎？哪個符合現在的信用環境好嗎？還有政府政策，好嗎？所以結果是，沒有足夠的人在這個特定的領域貸款，好嗎？那裡有機會，但我真的不應該說，沒有人非常積極地在那裡追逐貸款。所以其中有幾個部分但是。

This concludes our question-and-answer session. I would now like to turn the conference back over to Mr. Yu for any closing remarks.

我們的問答環節到此結束。我現在想把會議轉回給於先生作閉幕詞。

Well, thank you very much, okay? So obviously, everybody's question seems to be about how competitors' future will be, okay? Sitting over here, we certainly like to be less competitive, make our job a little bit easier and make our shareholders a little bit more happier, okay? But we have to be well prepared for that, and we have to gear up our operation as if the situation will be a long-term situation, so -- and we're ready to do that, okay? Thank you so very much.

嗯，非常感謝，好嗎？很明顯，每個人的問題似乎都是關於競爭對手的未來，好嗎？坐在這裡，我們當然希望降低競爭力，讓我們的工作輕鬆一點，讓我們的股東更快樂一點，好嗎？但我們必須為此做好充分準備，我們必須做好準備，就好像這種情況將是一個長期情況，所以——我們已經準備好這樣做了，好嗎？非常感謝你。

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，您現在可以斷開連接。