Preferred Bank (PFBC) 2022 Q4 法說會逐字稿

Good day, and welcome to the Preferred Bank Fourth Quarter 2022 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Jeff Haas of Financial Profiles. Please go ahead.

美好的一天，歡迎來到首選銀行 2022 年第四季度收益電話會議。 （操作員說明）請注意正在記錄此事件。我現在想將會議轉交給 Financial Profiles 的 Jeff Haas。請繼續。

Hello, everyone, and thank you for joining us to discuss Preferred Bank's financial results for the fourth quarter ended December 31, 2022. With me today from management are Chairman and CEO, Li Yu; President and Chief Operating Officer, Wellington Chen; Chief Financial Officer, Edward Czajka; Chief Credit Officer, Nick Pi; and Deputy Chief Operating Officer, Johnny Hsu.

大家好，感謝您加入我們討論截至 2022 年 12 月 31 日的第四季度 Preferred Bank 的財務業績。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；首席信貸官Nick Pi；和副首席運營官 Johnny Hsu。

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

管理層將提供結果的簡要總結，然後我們將打開電話回答您的問題。在本次電話會議期間，管理層所作的陳述可能包括 1995 年《私人證券訴訟改革法案》所指的前瞻性陳述。此類前瞻性陳述基於可能被證明正確也可能不正確的特定假設。

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.

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 (FDIC) 提交的文件。

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

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。這時候想把電話轉給李宇先生。請繼續。

Thank you very much. Thank you, ladies and gentlemen, for attending our earnings conference. I am very pleased to report that we have another record quarter of earnings. Fourth quarter 2022 net income was $39.6 million or $2.71 a share, which compares very favorably with prior quarter and prior year. Because of this increased earning power, our Board has announced a 28% increase in dividend in December and to be -- start to be payable in January.

非常感謝。女士們先生們，謝謝你們參加我們的收益會議。我很高興地向大家報告，我們的季度收益又創歷史新高。 2022 年第四季度淨收入為 3960 萬美元或每股 2.71 美元，與上一季度和上一年相比非常有利。由於這種增加的盈利能力，我們的董事會已宣布 12 月份的股息增加 28%，並將於 1 月份開始支付。

Growth in interest income has outpaced the growth in deposit costs. Consequently, our net interest margin expanded to 4.75% for the quarter. However, towards the latter part of the quarter, we have seen that the deposit cost increase has accelerated. We believe the catching up and this process will continue into first quarter of 2023 at least.

利息收入的增長超過了存款成本的增長。因此，本季度我們的淨息差擴大至 4.75%。然而，在本季度後期，我們看到存款成本增長加快。我們相信追趕和這一過程至少會持續到 2023 年第一季度。

Many of our customers are continuing to manage their money by moving their deposits from lower cost to higher costs. And then we see the market continues to offer higher deposits nearly every day -- deposit cost every day. Going forward, to grow deposits at a reasonable cost will be a challenge and will be the thing that we must do.

我們的許多客戶通過將存款從成本較低的地方轉移到成本較高的地方來繼續管理他們的資金。然後我們看到市場幾乎每天都在繼續提供更高的存款——每天的存款成本。今後，以合理的成本增加存款將是一個挑戰，將是我們必須做的事情。

Sequentially, this quarter has net loan increase of 1.3% and a deposit increase of 1.9%. Deposit -- I mean, loan demand has tapered down or moderated since third quarter of 2022, and we believe it will be carry-over well into the first quarter at least.

環比來看，本季度淨貸款增長 1.3%，存款增長 1.9%。存款——我的意思是，自 2022 年第三季度以來，貸款需求逐漸減少或放緩，我們相信至少會延續到第一季度。

Our customers generally find it just more prudent in their operations. And then in terms of -- especially in terms of new transactions or new initiative committed. Because of our high earning capabilities, liquidity and capital ratio both improved from the previous quarter. And we believe our current liquidity level and capital level can easily handle our gross -- foreseeable gross need in the year 2023.

我們的客戶通常會發現它在他們的運營中更加謹慎。然後就 - 特別是在新交易或新倡議方面。由於我們的高盈利能力，流動性和資本比率都比上一季度有所改善。我們相信我們目前的流動性水平和資本水平可以輕鬆滿足我們在 2023 年的總需求——可預見的總需求。

Benefited by the net interest income increase, our efficiency ratio coming at 26%. Even when we consider included a $1.8 million of OREO items. Going forward, in 2023, expenses is expected to increase. General wage inflation is the main thing. The increase includes FDIC premium -- new premium assessment, 2 new -- at least 2 new planned bank branches, some planned addition to [SAF] and also a fully operatable SBA department that will be fully operative in 2023.

受益於淨利息收入的增加，我們的效率比率達到 26%。即使我們考慮包括價值 180 萬美元的奧利奧產品。展望未來，到 2023 年，支出預計會增加。一般工資通脹是主要問題。增加包括 FDIC 保費——新的保費評估，2 個新的——至少 2 個新的計劃銀行分支機構，一些計劃添加到 [SAF] 以及一個完全可操作的 SBA 部門，該部門將於 2023 年全面運作。

Our attention since early 2022, but I'm sure that you can see on my previous earnings release report, since 2022, we've been very focused on credit matters. I'm also pleased to report that both NPAs and NPL has improved from the third quarter. At December 31, they are at a lower level than September 30. In fact, in early January, we have resolved another $5.3 million of fully collected -- another $5.3 million of nonperforming loans. Effectively, as of today, our December 31, nonperforming loans is only $200,000. In a very good early indicator of credit quality is our 30 to 89 days past due loans.

我們從 2022 年初開始關注，但我相信你可以在我之前的收益發布報告中看到，自 2022 年以來，我們一直非常關注信貸問題。我也很高興地報告，NPAs 和 NPL 從第三季度開始都有所改善。截至 12 月 31 日，它們的水平低於 9 月 30 日。事實上，在 1 月初，我們已經解決了另外 530 萬美元的全額收款——另外 530 萬美元的不良貸款。實際上，截至今天，我們 12 月 31 日的不良貸款僅為 200,000 美元。我們的 30 至 89 天逾期貸款是信貸質量的一個很好的早期指標。

I'm also pleased to report at December 31, the amount totaled only approximately $4 million. Based upon a report published by Bank of America, our third quarter return on tangible common equity is 23.6% which ranked us the second among all California public traded banks over $2 billion. We believe our fourth quarter performance will lend us apart from the same situation at least.

我也很高興地報告，截至 12 月 31 日，總金額僅為大約 400 萬美元。根據美國銀行發布的一份報告，我們第三季度的有形普通股回報率為 23.6%，在所有超過 20 億美元的加州上市銀行中排名第二。我們相信我們第四季度的表現至少會讓我們在同樣的情況下有所不同。

Because of our business spa model and because we are a business bank serving business and private clients, our motto does not that allow us to necessarily become a very low cost -- deposit cost operator. But however, if you add noninterest expense to the deposit costs, which will give us the total cost of operation. For years, we have been the lowest among our peer group.

由於我們的商業水療中心模式，並且因為我們是一家為商業和私人客戶提供服務的商業銀行，我們的座右銘並不一定會讓我們成為一個成本非常低的——存款成本運營商。但是，如果您將非利息費用添加到存款成本中，這將為我們提供總運營成本。多年來，我們一直是同行中最低的。

We believe or I believe, okay, the high earning power and the low effective total cost will be the best defense facing a recessionary economy. We are optimistic about 2023, but we'll be very careful. Thank you. I'm ready for your questions.

我們相信，或者我相信，好吧，高盈利能力和低有效總成本將是面對衰退經濟的最佳防禦。我們對 2023 年持樂觀態度，但我們會非常小心。謝謝。我準備好回答你的問題了。

(Operator Instructions) Our first question comes from Matthew Clark with Piper Sandler.

（操作員說明）我們的第一個問題來自 Matthew Clark 和 Piper Sandler。

Wanted to start on noninterest expense and clarify some of your guidance around the growth this year. I assume it excludes the OREO-related costs in '22, roughly, I think, $2.9 million. Maybe you can speak to the run rate going forward and how you think that run rate might progress throughout the year?

想從非利息費用開始，並澄清您對今年增長的一些指導。我假設它不包括 22 年與奧利奧相關的成本，我認為大約是 290 萬美元。也許你可以談談未來的運行率，以及你認為全年運行率可能會如何發展？

Well, this must answered by Ed which is in the budgeting process.

好的，這必須由處於預算編制過程中的 Ed 回答。

Yes. Matthew. Yes. So if we pull out the OREO costs in Q4, we were just under $18 million on a run rate. Going forward, at least for Q1, which is always a little bit of an aberration for us because of certain costs in Q1, we're looking at probably the low end at about $18.6 million in high end, just under $20 million in terms of noninterest expense.

是的。馬修。是的。因此，如果我們剔除第四季度的奧利奧成本，我們的運行率將略低於 1800 萬美元。展望未來，至少對於第一季度，由於第一季度的某些成本，這對我們來說總是有點失常，我們可能會看到高端的低端約為 1860 萬美元，就 2000 萬美元而言非利息費用。

Going forward from there, it will probably be somewhat similar, although you'll have a slow ramp rate in terms of the growth in noninterest expense.

從那裡向前看，它可能會有些相似，儘管就非利息支出的增長而言，你的增長速度會很慢。

Yes. Got it. Okay. And then shifting to the margin. Do you have the spot rate on interest-bearing deposits at the end of the year?

是的。知道了。好的。然後轉移到邊緣。你們有年末生息存款的即期利率嗎？

Total interest-bearing deposits, not at the end of the year, but for the month of December were 247 -- 2.47%.

計息存款總額，不是在年底，而是在 12 月份，為 247 -- 2.47%。

Okay. And do you happen to have the -- since you have the average for the month of December, you have the average margin in December?

好的。你碰巧有——因為你有 12 月份的平均值，所以你有 12 月份的平均利潤率？

Yes. The margin for December was 4.83%.

是的。 12 月份的利潤率為 4.83%。

Okay. And then just on the overall outlook on interest-bearing deposit costs. We heard your comments earlier, Mr. Yu about things accelerating toward the end of the quarter. How are -- what are your thoughts on -- where your beta might settle out through the cycle, assuming we get another 50 basis points from the Fed here and were done relative to last cycle, I think you were in the mid-50s.

好的。然後就是關於有息存款成本的總體前景。於先生，我們早些時候聽到了您關於在本季度末加速發展的評論。你的想法如何 - 你的貝塔值可能會在整個週期中穩定下來，假設我們從美聯儲這裡得到另外 50 個基點並且相對於上一個週期完成，我認為你在 50 年代中期。

Yes. Well, my thoughts is that -- from my experience is that we will continue to see the market competitors paying more interest. And we, as a small fish in the big pond, we just have to follow the trend and do our part in the same thing and hopefully that try to manage it more closely.

是的。好吧，我的想法是——根據我的經驗，我們將繼續看到市場競爭者付出更多的興趣。而我們，作為大池塘里的一條小魚，只需要順應潮流，在同一件事上儘自己的一份力量，希望能更緊密地管理它。

Now actually, you'd be surprised some of the largest institutions back in November before the December rate, they're already offering 1 year, I mean, like a certificate deposit at 5%, okay, and I can list -- a whole list for you. We have gathered that.

實際上，在 12 月利率之前的 11 月，你會驚訝於一些最大的機構，他們已經提供 1 年，我的意思是，就像 5% 的證書存款，好吧，我可以列出 - 整個為你列出。我們已經收集到了。

So going forward, is these big institutions, what the market rate they set, what market they prepare. We just try to catch up. And we have no idea what they would do so on. But based on my experiences, I think the first quarter, the deposit costs are further accelerating increases as compared to fourth quarter. And then our margin -- in my opinion, it's not at or near top, okay, in the cycle. And obviously, margin itself has to do with the leverage too, depending on how much it grows in loans, how much gross deposits you have, in general, the spread, I think, is among the top that it's starting in fourth quarter.

那麼往前看，就是這些大機構，他們設定的市場利率是多少，他們準備的市場是什麼。我們只是想趕上。我們不知道他們會這樣做。但根據我的經驗，我認為第一季度，與第四季度相比，存款成本正在進一步加速增長。然後是我們的利潤率——在我看來，它沒有達到或接近頂部，好吧，在周期中。顯然，保證金本身也與槓桿率有關，這取決於它在貸款中增長了多少，你擁有多少總存款，我認為總的來說，利差是第四季度開始的最高點之一。

Which not to say in this -- in the first quarter, we're not be able to earn a very handsome margin.

這不是說 - 在第一季度，我們無法獲得非常可觀的利潤。

Our next question comes from Andrew Terrell with Stephens.

我們的下一個問題來自 Andrew Terrell 和 Stephens。

I wanted to start on just deposits, specifically noninterest-bearing -- if I look, I think your mix is around 21%, 22% noninterest-bearing deposits as a percentage of total. I'm just trying to get a sense of, I guess, what you're seeing so far in 1Q in terms of noninterest-bearing deposit flows. And then what your sense is on where we could see noninterest-bearing deposits bottom out?

我想從存款開始，特別是無息存款——如果我看的話，我認為你的組合大約是 21%，22% 的無息存款佔總額的百分比。我只是想了解一下，我想，到目前為止，你在第一季度看到的無息存款流量是多少。那麼你對我們可以看到無息存款觸底的地方有什麼看法？

The answer is we don't know. That's one of the reasons why we say we have no control of our margin going forward because we see customers continue to manage their money. They either pay off their loans or they just reduce their loans, save interest cost or in many cases, where customers using the excess cash to pay off their real estate loan because they consider 8% or 7.5% unbearable, okay? So this trend will continue. And this is also that more people will recognize that their money can earn over 4%. Now, they want to move to TCDs and other things, okay? So this kind of movement and I try to look at other press even as big as JP Morgan, they've no idea, okay? What this migration process would be.

答案是我們不知道。這就是為什麼我們說我們無法控制未來利潤率的原因之一，因為我們看到客戶繼續管理他們的資金。他們要么還清貸款，要么只是減少貸款，節省利息成本，或者在許多情況下，客戶使用多餘的現金來償還房地產貸款，因為他們認為 8% 或 7.5% 的利率無法承受，好嗎？因此，這種趨勢將繼續下去。而這也是讓更多人認識到自己的錢可以賺到4%以上。現在，他們想轉向 TCD 和其他東西，好嗎？所以這種運動，我試著看看其他媒體，甚至像摩根大通一樣大，他們不知道，好嗎？這個遷移過程是什麼。

So this is one sector situation. Another one situation, I can never tell how the big banks set their price situation and become the main competitor for deposits because they've huge market share. So we just have to follow and lot to do with their funding condition or the overall tightness about the fund. So this is really the very important wirecard going into 2023.

所以這是一個部門的情況。另一種情況，我永遠也說不准大銀行是如何定價的，因為他們擁有巨大的市場份額而成為存款的主要競爭者。所以我們只需要關注他們的資金狀況或基金的整體緊張程度。所以這真的是進入 2023 年的非常重要的線卡。

Yes. Understood. I appreciate the color there. Maybe if I could move over to just outlook on provision and reserve moving forward? I guess, how are you thinking about allowance levels moving through 2023?

是的。明白了。我欣賞那裡的顏色。也許如果我可以轉向只是展望未來的供應和儲備？我想，您如何看待 2023 年的津貼水平？

Well, our general philosophy is we have been building up our reserve at the year-end. We will take every quarter, take a look and generally stay conservative. Take a look and to see whether that number is going to be increased or needed or stayed approximately the same. Of course, we have to subject to CECL methodology and so some of the situation is to go through a calculation process.

好吧，我們的總體理念是我們一直在年底建立儲備。我們將每個季度進行一次觀察，並通常保持保守。看看這個數字是否會增加或需要或保持大致相同。當然，我們要受制於CECL的方法論，所以有些情況是要經過一個計算過程的。

So in generally speaking, if we based on the credit metrics as of now, I have to say we're over reserved, but we don't know what the coming economy will be. So we stay at the level. I understand some of our direct competitors has reserved less than maybe basis points, okay, that they have the same type of business as we do, but we believe that we need to be stay at this level for now.

所以總的來說，如果我們基於目前的信用指標，我不得不說我們過度保留了，但我們不知道未來的經濟會怎樣。所以我們保持水平。我知道我們的一些直接競爭對手保留的基點少於可能，好吧，他們與我們擁有相同類型的業務，但我們認為我們現在需要保持在這個水平。

Yes. Okay. Maybe sticking on credit. I'm just looking at loan yields, call it, near 7% -- just south of 7% in the fourth quarter. Obviously, really good for the margin. But I guess, any color on how debt service coverage profiles have changed at your borrowers, just given the increase in loan yields and any loans that you've had to restructure as a result of rising rates or any that you foresee having to restructure? Just any kind of incremental color there would be helpful.

是的。好的。也許堅持信用。我只是在看貸款收益率，稱之為接近 7%——第四季度略低於 7%。顯然，對於保證金來說真的很好。但我想，考慮到貸款收益率的增加以及您因利率上升而不得不重組的任何貸款或您預見必須重組的任何貸款，您的借款人的償債覆蓋範圍如何變化的任何顏色？任何一種增量顏色都會有所幫助。

Well, I have Nick answer that first and then I'll add on to it.

好吧，我讓尼克先回答這個問題，然後我再補充。

Andrew, this is Nick speaking. And for our TDR, we only have 2 small loans on our TDR lease, combined with only $1.5 million is belonging to one of the relationship and they're paying. Everything seems okay. And definitely for Fed's rapid rate increases and our borrower, I believe they do have some pressures on that service coverage ratio side. However, most of our loans, we have a very strong -- financially strong sponsorship behind it. And that you can see from our past year report, and we don't have that many past due under 30 to 90 days. And also nonperforming loan, we only have one mortgage loan as Mr. Yu mentioned previously, it's only a $280,000 around. That's it.

安德魯，我是尼克。對於我們的 TDR，我們的 TDR 租約上只有 2 筆小額貸款，加上只有 150 萬美元屬於其中一個關係並且他們正在支付。一切似乎都還好。對於美聯儲的快速加息和我們的借款人來說，我相信他們在服務覆蓋率方面確實有一些壓力。但是，我們的大部分貸款背後都有非常強大的讚助商。你可以從我們去年的報告中看到，我們沒有那麼多 30 到 90 天的逾期。還有不良貸款，正如余先生之前提到的，我們只有一筆抵押貸款，只有280,000美元左右。就是這樣。

So basically, our credit quality is still quite stable comparing to our previous quarters, and we expect that to be the situation and definitely there are still many, many economy uncertainties ahead of us in 2023, such as honorable energy or food supplies, inflation costs, weakening the purchase power and the rapid rate increase and fast QT side. All those kind of things are really give us uncertainties for this market and the management continues to maintain a kind of a moderate risk posture for factoring the reserve requirements at this time.

所以基本上，與前幾個季度相比，我們的信用質量仍然相當穩定，我們預計情況會是這樣，而且到 2023 年我們肯定還有很多很多經濟不確定性，例如可觀的能源或食品供應、通脹成本，削弱了購買力和快速增長和快速QT的一面。所有這些事情確實給我們帶來了這個市場的不確定性，管理層此時繼續保持一種適度的風險態度來考慮準備金要求。

Again, it's just pretty much that I've said at this time, if based on metric makers today, we are over reserved. Okay. That's my personal opinion. But however, in general, we have been trying to consider the recessionary economy, what the effect would be.

同樣，我此時所說的差不多，如果基於今天的指標制定者，我們會過度保留。好的。這是我個人的看法。但是然而，總的來說，我們一直在努力考慮經濟衰退的影響會是什麼。

Our next question comes from Gary Tenner with D.A. Davidson.

我們的下一個問題來自 D.A. 的 Gary Tenner。戴維森。

Two questions. First, on the commercial construction segment, relatively small but had a couple of quarters of decline before increasing this quarter on an end-of-period basis. Just wondering if you could talk about kind of the committed pipeline that might fund over the course of the next year? And if there's -- does that number -- does the period end number continue to trend down? Was the fourth quarter a bit of an aberration there or anything else to think about?

兩個問題。首先，在商業建築領域，規模相對較小，但在本季度期末增長之前經歷了幾個季度的下降。只是想知道您是否可以談談明年可能會資助的承諾渠道？如果有——這個數字——期末數字是否繼續呈下降趨勢？第四節是不是有點反常或者有什麼需要考慮的？

Nick will give you more color on that, but some of the fluctuations here then is because in the past, we have pandemic slowed down many of the projects, okay? Many of us has restarted and obviously, the summertime has been the greatest time to increase the construction, okay. So Nick.

尼克會給你更多的顏色，但這裡的一些波動是因為在過去，我們的大流行放慢了許多項目，好嗎？我們中的許多人已經重新開始，顯然，夏季是增加建設的最佳時機，好吧。所以尼克。

Yes, our construction portfolio, we try to manage this portfolio under 10%. During the past quarter, I believe this is around 8%, and this quarter dropped to -- a little bit dropped to below 8%. And just to give a little bit more color on our construction loans because we don't do many construction loans, which is not a desirable products. Most of our construction loans actually is from the existing loans, and we try to slow down a little bit, especially for those condo projects and those kind of things because there's a lot of uncertainties in the economy. So we try to slow down.

是的，我們的建築投資組合，我們試圖將這個投資組合管理在 10% 以下。在過去的一個季度中，我相信這大約是 8%，而本季度下降到 — 略微下降到 8% 以下。只是為了給我們的建築貸款多一點色彩，因為我們不做很多建築貸款，這不是一個理想的產品。我們的大部分建築貸款實際上來自現有貸款，我們試圖放慢一點，特別是對於那些公寓項目和那些事情，因為經濟中存在很多不確定性。所以我們試著放慢速度。

However, all of our construction loans at the origination, we try to based on our increased projections to have interest reserve. So we are doing construction very conservatively compared to our peer groups.

然而，我們所有的建築貸款在發起時，我們都試圖根據我們增加的預測來準備利息。因此，與我們的同行相比，我們在建設方面非常保守。

Okay. And then a question for Ed. There's obviously a lot of conjecture out there in terms of what happens to rates, how long they stay at elevated levels when the Fed does stop tightening. Just wondering, given the amount of progress you've made in terms of asset yields year-to-date or in 2022, any updated thoughts on how you might kind of manage the balance sheet to lock in some of those benefits looking forward to a time frame where the Fed does start to cut right?

好的。然後有一個問題要問 Ed。顯然，對於利率會發生什麼變化，當美聯儲停止收緊政策時利率會保持在高位多久，顯然存在很多猜測。只是想知道，鑑於您今年迄今或 2022 年在資產收益率方面取得的進展，您是否有任何關於如何管理資產負債表以鎖定其中一些收益的最新想法美聯儲開始降息的時間框架對嗎？

Well, I don't -- I'm not going to speak for the production side, but I know we have had a lot of discussions around, as you know, Gary, about 80% of the book is floating rate. So there have been a lot of discussions around. And making headway into doing some more fixed rate lending at this time, given the overall level of interest rates, this would kind of be the opportune time to start doing more fixed rate lending. However, that still presents a challenge, obviously, as we've talked about already, the activity has slowed down -- economic activity has slowed down. But I can let -- Mr. Yu, do you want to speak to more on that?

好吧，我不會——我不會代表生產方面發言，但我知道我們已經進行了很多討論，正如你所知，加里，這本書中大約 80% 是浮動利率。所以周圍也有很多討論。考慮到整體利率水平，此時在進行更多固定利率貸款方面取得進展，這將是開始進行更多固定利率貸款的合適時機。然而，這仍然是一個挑戰，顯然，正如我們已經談到的那樣，活動已經放緩——經濟活動已經放緩。但我可以讓 - 於先生，你想就此談更多嗎？

Well, I think in overall fund management situation, we have a -- most of the floating rate loans, in fact, substantially all our floating rate loan has a [floor]. The floor sort of protects us from the fluctuation okay, the cognitive cost by the rate situation. And obviously, that during this high interest return, it will be sometimes a bit advantages to do selectively a few fixed rate loans. But the floor really puts us in the situation that -- I mean, that we can have time to adjust a bit along with the rate -- interest cost rate decreases. So going forward, we just have paved every step of the way, just like way is going up, we've built up the sensitive balance sheet.

好吧，我認為在整體資金管理情況下，我們有一個 - 大多數浮動利率貸款，事實上，我們幾乎所有的浮動利率貸款都有一個 [floor]。地板可以保護我們免受波動的影響，好吧，利率情況下的認知成本。而且很明顯，在這個高利息回報期間，有選擇地做幾筆固定利率貸款有時會有點優勢。但地板確實讓我們處於這樣一種情況——我的意思是，我們可以有時間隨著利率進行一些調整——利率成本下降。因此，展望未來，我們只是鋪平了道路的每一步，就像道路在上升一樣，我們已經建立了敏感的資產負債表。

Just as a follow-up to that, to the degree that you've got new loans working through the pipeline, which, as you pointed out, I mean, that's slowed down dramatically. Are your customers more interested in variable rate loans because the customer has a sense that rates are going to fall quickly. Is that kind of the general view of your customer base that I think that, that will pivot quickly to the downside?

正如對此的後續行動一樣，在某種程度上，你已經通過管道獲得了新的貸款，正如你所指出的，我的意思是，這已經大大放緩了。您的客戶是否對可變利率貸款更感興趣，因為客戶感覺到利率將迅速下降。我認為您的客戶群的這種普遍看法會迅速轉向下行嗎？

Customers are probably more interested in this day as a floating rate loans because presumably talking about real estate, I'm not talking about C&I, okay? Because they forecast, they listen to forecast by all the economists who is indicating that rate will come down at latter part of this year or early next year, okay? And to them, it's the short-term situation.

客戶可能對這一天的浮動利率貸款更感興趣，因為大概是在談論房地產，我不是在談論 C&I，好嗎？因為他們預測，他們聽取了所有表明利率將在今年下半年或明年初下降的經濟學家的預測，好嗎？對他們來說，這是短期情況。

Our next question comes from David Feaster with Raymond James.

我們的下一個問題來自 David Feaster 和 Raymond James。

I wanted to touch on some of the expansionary plans that you touched on early in the call. Maybe specifically starting with the SBA department, just curious the plans for that, whether your plans are to retain production or sell it, maybe the time line for the build-out and maybe where you're going to be focused from a regional perspective?

我想談談您在電話會議早期提到的一些擴張計劃。也許特別從 SBA 部門開始，只是好奇它的計劃，你的計劃是保留生產還是出售它，也許是擴建的時間表，也許你將從區域的角度關注哪裡？

Okay. SBA department was started latter part of 2022 with the skeleton crew, okay? And then we are going through to be getting our PLP position. We've never been a preferred lender before, okay? So we expect the PLP position will be granted early part of this year, okay? So as far as the plan of the way you return, retain something like that, Wellington, you want to answer that?

好的。 SBA 部門將於 2022 年下半年與骨干人員一起啟動，好嗎？然後我們將獲得我們的 PLP 職位。我們以前從來都不是首選貸款人，好嗎？所以我們預計 PLP 職位將在今年年初授予，好嗎？那麼關於你返回的方式的計劃，保留類似的東西，惠靈頓，你想回答這個問題嗎？

Thank you, Mr. Yu. David, our plan is to -- as we fund the SBA loan, we will just sell it to the secondary target.

謝謝余先生。大衛，我們的計劃是——當我們為 SBA 貸款提供資金時，我們將把它賣給次要目標。

Okay. Do you have any early expectations in terms of production? Or is it kind of a wait and see?

好的。你對製作有什麼早期的期待嗎？或者這是一種觀望？

It's a wait and see, especially with current economy and current situation. The SBA with a recessionary economy, SBA tends to slow down. A lot of people, actually, the market has slowed down. But we're just looking at to go about methodically and just very careful since it's a new product that we have, although we have experienced team and the team leader.

這是一種觀望，尤其是在當前的經濟和形勢下。經濟衰退的 SBA，SBA 往往會放緩。很多人，實際上，市場已經放緩。但我們只是想有條不紊地進行，而且非常小心，因為這是我們擁有的新產品，儘管我們有經驗豐富的團隊和團隊負責人。

So you got a tailwinds on the fee income side, but wouldn't expect a huge contribution this year.

所以你在費用收入方面得到了順風，但預計今年不會有巨大的貢獻。

Yes, sir.

是的先生。

Okay. And then maybe just touching on the branch expansion side. Just curious, is -- are the branches a part of the Texas expansion in those LPOs? And maybe if you could just give us an update on where we are in Texas, how growth and demand and pipelines are trending there?

好的。然後可能只是觸及分支擴展方面。只是好奇，這些分支機構是德克薩斯州那些 LPO 擴張的一部分嗎？也許如果你能告訴我們我們在德克薩斯州的最新情況，那裡的增長、需求和管道的趨勢如何？

Texas is going to be converted into a branch within about from LPO to a branch in about 2 months. Right now, we're all busy in working on these things, okay? Pipeline does not change that much from last year to this year, a long outstanding. In fact, we currently are in a situation, the entire bank is looking at things very carefully, okay. Another branch, we have signed a lease. I think we've really signed. We're committed, okay? We think it will be in the Southern California in a very good location.

德克薩斯州將在大約 2 個月內從 LPO 轉換為分支機構。現在，我們都在忙於這些事情，好嗎？流水線從去年到今年沒有太大變化，長期懸而未決。其實我們現在的情況是，整個銀行都在看得很仔細，好嗎。另一家分店，我們已經簽了租約。我想我們真的簽了。我們承諾，好嗎？我們認為它將在南加州的一個非常好的位置。

We're working very closely on that, but we have budgeted it already. That's what I mean. So going forward, in the remainder of the year, as new opportunities come up, we just grab it. And if there's a new personnel that to be hired, we're not going to be worried about its budget, we're just going to hire them.

我們正在為此密切合作，但我們已經對其進行了預算。那就是我的意思。因此，展望未來，在今年餘下的時間裡，隨著新機會的出現，我們會抓住它。如果要雇用新人員，我們不會擔心它的預算，我們只會僱用他們。

That's music to Ed's ears. And so the other thing is I wanted to touch on is you guys have been very good stewards of capital and you have a very strong capital position ahead of a potential credit cycle. But if we step back and think about a potentially slower pace of loan growth in your incredibly high levels of profitability, you're going to be accreting capital at a really rapid pace.

這對埃德來說是音樂。所以我想談的另一件事是你們一直是非常好的資本管家，你們在潛在的信貸週期之前擁有非常強大的資本頭寸。但是，如果我們退後一步，考慮在您令人難以置信的高盈利水平下貸款增長速度可能會放緩，那麼您將以非常快的速度增加資本。

We talked about a couple of growth initiatives. Just curious about your capital priorities here. We've seen some dividend growth. And again, carrying significant levels of excess capital into a credit cycle is not a bad thing. But just was curious whether there's any appetite to increase capital return or other capital priorities?

我們談到了一些增長計劃。只是對您在這裡的資本優先事項感到好奇。我們看到了一些股息增長。同樣，將大量過剩資本帶入信貸週期並不是一件壞事。但只是好奇是否有興趣增加資本回報或其他資本優先事項？

Thank you for asking the question, recognizing all that, okay? We -- because we are a state chartered bank reporting -- I mean, without a holding company, any capital raising is requiring a capital buyback, capital transaction was required. Shareholder approval, which is required by the state regulator. So every time we want to buy back from stock, if we want to go through the whole process, that's 9 months process. So this year, what we're going to do is we just got the Board approval to submit for shareholder approval during our proxy season. For pre-approving a total amount of stock buyback. And then we will go to the state wherever ready to act on that.

謝謝你提出這個問題，認識到這一切，好嗎？我們 - 因為我們是一家州特許銀行報告 - 我的意思是，沒有控股公司，任何融資都需要資本回購，需要資本交易。州監管機構要求的股東批准。所以每次我們想從庫存中回購，如果我們想要完成整個過程，那就是 9 個月的過程。所以今年，我們要做的是在我們的代理季期間獲得董事會批准提交股東批准。用於預先核准股票回購總額。然後我們將前往準備好採取行動的州。

And generally speaking is that the majority of opinion of the Board, is that at the beginning of the year, we need to be a little bit more careful in watching the economy and have the capital ready if the economy for some strange reason turns out, okay? So once it is clear, then we expect to return things to our shareholders.

一般來說，董事會的大多數意見是，在年初，我們需要更加謹慎地觀察經濟，如果經濟出於某種奇怪的原因出現，我們需要準備好資金，好的？因此，一旦明確，我們就希望將東西回報給我們的股東。

Our next question comes from Tim Coffey with Janney.

我們的下一個問題來自 Tim Coffey 和 Janney。

Yes, I had a question about the cash on balance sheet. It still remains at elevated levels. And I'm wondering does the uncertainty about customer liquidity behavior outweigh the opportunity to reinvest that in securities.

是的，我對資產負債表上的現金有疑問。它仍然保持在較高的水平。我想知道客戶流動性行為的不確定性是否超過了將其再投資於證券的機會。

Well, that's a very good question. As you know, Tim, we have kept inordinately large amount of cash on the balance sheet actually since the financial crisis. So we've always had a fairly large cash position. One thing we actually did do during the fourth quarter is we did invest some of that excess cash in the treasury market at where what I consider to be extremely attractive yields. And I think we may do some here in the near future in order to lock in some of those -- some of that additional yield rather than have cash float along with the Fed's interest rate decisions.

嗯，這是一個很好的問題。如你所知，蒂姆，自金融危機以來，我們實際上在資產負債表上保留了大量現金。所以我們一直有相當大的現金頭寸。我們在第四季度實際上做的一件事是，我們確實將一些過剩現金投資於我認為收益率極具吸引力的國債市場。而且我認為我們可能會在不久的將來在這裡做一些事情，以鎖定其中的一些——一些額外的收益率，而不是隨著美聯儲的利率決定而出現現金浮動。

Okay. Okay. That's helpful. And then curious about what you're seeing from competitors. Clearly, your customers have started to express some cautiousness in terms of the lending behavior. I'm wondering, are your competitors, are you seeing them pull back from the market or otherwise tightened their credit boxes?

好的。好的。這很有幫助。然後好奇你從競爭對手那裡看到了什麼。顯然，您的客戶已經開始對借貸行為表現出一些謹慎。我想知道，您的競爭對手是否看到他們退出市場或以其他方式收緊他們的信貸箱？

Well, first of all, strangely enough, they're all like us. They're looking for opportunities, but they were very prudent, okay? But there are competitors doing things at this point of time, which requires to research onto it, okay? There's one of the largest bank in California is offering -- still offering customers a 7 years fixed rate, okay, CRE loans at low 6%, very low 6% and without pre-payment penalty.

好吧，首先，奇怪的是，他們都和我們一樣。他們正在尋找機會，但他們非常謹慎，好嗎？但是這個時候有競爭對手在做，這就需要研究了，好嗎？加利福尼亞州最大的銀行之一正在提供——仍然為客戶提供 7 年期固定利率，好吧，CRE 貸款低 6%，非常低的 6%，並且沒有預付款罰款。

So they are willing to grab business by forgiving the interest income. So we're looking at that. We lost a number of accounts to them, but we're still looking at that and to see how we can compete with this kind of situation. I guess there's always going to be low, I should say, people that you cannot compete with. We lost another loan to credit union, 5.25% in 5 years, which -- fixed rate. We just can't compete. We don't -- happen things every day.

所以他們願意通過免除利息收入來搶生意。所以我們正在研究。我們失去了一些賬戶給他們，但我們仍在關注這一點，看看我們如何應對這種情況。我想總會有一些人，我應該說，你無法與之競爭。我們失去了另一筆貸款給信用合作社，5 年內利率為 5.25%，這是固定利率。我們就是無法競爭。我們不會 - 每天都會發生事情。

Okay. So you're still seeing irrational activity.

好的。所以你仍然看到非理性活動。

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

我們的問答環節到此結束。我想將會議轉交給 Li Yu 作閉幕詞。

Well, actually, the question and answer is all pointing out the things we want to further clarified. So thank you very much for your time. And as I said, we are optimistic but we would be careful. Thank you.

那麼其實問答都是在指出我們要進一步澄清的事情。非常感謝您的寶貴時間。正如我所說，我們很樂觀，但我們會小心。謝謝。

The conference has 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。