Preferred Bank (PFBC) 2023 Q1 法說會逐字稿

Good day, and welcome to the Preferred Bank First Quarter 2023 Earnings Conference Call. (Operator Instructions) Please do note that this event is being recorded today. I would now like to turn the conference over to Larry Clark of Financial Profiles. Please go ahead, sir.

美好的一天，歡迎來到首選銀行 2023 年第一季度收益電話會議。 （操作員說明）請注意，今天正在記錄此事件。我現在想將會議轉交給財務概況的拉里克拉克。請繼續，先生。

Hello, everyone, and thank you for joining us to discuss Preferred Bank's financial results for the first quarter ended March 31, 2023. 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. 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.

大家好，感謝大家加入我們，討論 Preferred Bank 截至 2023 年 3 月 31 日的第一季度財務業績。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。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 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銀行向 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. Good morning. I'm very pleased to report the first quarter net income of $38.1 million or $2.61 per share. We are satisfied with the results that was achieved during this very stressful quarter. The events of March truly humbled all of us in the banking industry. Personally, I'm very sad to see 2 good-sized banks went away in just a matter of hours especially when both these bank have certain expertise in certain sizable industries, and they have been servicing or serving these industry ace fully diligently in the past 20 to 30 years, only to see those customers are the first one to run, okay?

謝謝。早上好。我很高興地報告第一季度淨收入為 3810 萬美元或每股 2.61 美元。我們對在這個非常緊張的季度取得的成果感到滿意。三月份發生的事件確實讓我們所有銀行業的人感到謙卑。就我個人而言，看到兩家大型銀行在短短幾個小時內就倒閉，我感到非常難過，尤其是當這兩家銀行在某些規模較大的行業具有一定的專業知識，並且他們過去一直在為這些行業王牌服務或全力服務時20 到 30 年，只看到那些客戶是第一個跑的，好嗎？

In any event, the home matter taught us a lot. And personally, personally, I have the following observations, the text for definition of transactional accounts being a core deposits need to be revisited. True, the alcohol deposits, but only during the good time. But in stressed environment, they seem to be the first to run. I'm so very pleased with our PCD portfolio, not because we know exactly how much it cost us and how much -- how long we can get them.

無論如何，家庭問題教會了我們很多東西。就個人而言，我個人有以下觀察，需要重新審視交易賬戶作為核心存款的定義文本。誠然，酒精沉積物，但只在好時光。但在壓力大的環境下，他們似乎最先跑了。我對我們的 PCD 產品組合感到非常滿意，不是因為我們確切地知道它花了我們多少錢以及我們可以獲得它們的時間。

But during this difficult period, we have not seen one TCD ramp us or the run almost okay? The golden rule of not borrowing short and lend long or investment loan ideals. But I want to tell you to do this, it is really a difficult process. Throughout the years, I don't know how many times we have to face the disappointment of our offices, knowing their loans will be taking out a loss to a low fixed rate mortgages. But now as we look back, it seems to worse all the agony in order to have a better barrel defense.

但是在這個困難時期，我們沒有看到一個 TCD ramp us or the run almost okay?不借短貸長或投資貸款理想的黃金法則。但是我要告訴大家，要做到這一點，真的是一個艱難的過程。這些年來，我不知道有多少次我們不得不面對我們辦公室的失望，因為他們知道他們的貸款將損失在低固定利率抵押貸款上。但是現在當我們回頭看時，似乎為了更好地防禦槍管而付出的所有痛苦都變得更糟。

We now must respect the regulator or government risk even more as a banker. If you recall in 2021, when we were all convinced, the country's inflation was transitory. To be practical, how many of us, you and us, how many of us is preparing for a near 500 basis point interest rate increase in [2022]. And now as managers of a public traded bank, we will face each quarter like now with the earnings beat or miss. I can't help us think sometimes the things that may be good for short-term fixed may or may not probably may not be necessarily good for the long-term health of the bank's operation and the balance sheet.

作為銀行家，我們現在必須更加尊重監管機構或政府的風險。如果你還記得 2021 年，當時我們都相信該國的通貨膨脹是暫時的。實際上，我們中有多少人，你和我們中有多少人正在為 [2022] 加息近 500 個基點做準備。現在，作為一家上市銀行的經理，我們將像現在一樣面對每個季度的收益好壞。我忍不住想，有時可能對短期固定資產有利的事情可能對銀行運營和資產負債表的長期健康不一定有利。

I wish all of our investing public will pull more weight into the banks balance sheet, consistency in the long-term operational goal. Having expressed my personal opinion, I now must report to you on deposit situation. During the 3 days in March, March 9, March 11 and March 12 and March 13, okay? The 3 working days. Preferred Bank also experienced deposits outflow. The good news is we have a total of less than 10 accounts that pull the money out. The bad news is that 3 of them is very precised. For the quarter, our deposit reduced or decreased by 2.7%. As of yesterday evening, which is April 18, we have our deposits increased 1%, back increased 1%. We're working very hard to gain back the deposits we lost because most of them having a borrowing relationship with us.

我希望我們所有的投資大眾都將更多的權重放在銀行的資產負債表上，以保持長期運營目標的一致性。發表了我的個人意見，現在必須向大家報告存款情況。 3月3日，3月9日，3月11日，3月12日，3月13日，好嗎？ 3個工作日。 Preferred Bank 也經歷了存款外流。好消息是我們總共只有不到 10 個賬戶可以提取資金。壞消息是其中 3 個非常精確。本季度，我們的存款減少或減少了 2.7%。截至昨天晚上，也就是 4 月 18 日，我們的存款增加了 1%，回款增加了 1%。我們正在非常努力地收回我們損失的存款，因為他們中的大多數都與我們有借貸關係。

But I do want to tell you that during the process we have received many, many heart warming phone calls from our deposits from our customers, telling us they face in banking industry. Telling us that facing us, telling us that we have a good balance sheet, and we have good capital and especially we've good earnings. With their confidence without blessing and I also believe it's our shareholders wish.

但是我要告訴大家的是，在這個過程中，我們收到了很多很多來自我們客戶存款的暖心電話，告訴我們他們在銀行業的面子。告訴我們面對我們，告訴我們我們有良好的資產負債表，我們有良好的資本，尤其是我們有良好的收益。有他們的信心沒有祝福，我也相信這是我們股東的願望。

We will continue to maintain a flexible balance sheet. We'll continue to maintain good liquidity. We continue to control our overhead like we always do. And we will continue to operate Preferred Bank with a simple business model. Thank you very much. I'm ready for your questions.

我們將繼續保持靈活的資產負債表。我們將繼續保持良好的流動性。我們一如既往地繼續控制開銷。我們將繼續以簡單的商業模式運營 Preferred Bank。非常感謝。我準備好回答你的問題了。

(Operator Instructions) And our first question here will come from Matthew Clark with Piper Sandler.

（操作員說明）我們在這裡的第一個問題將來自 Matthew Clark 和 Piper Sandler。

First one for me, just on the available liquidity, the cash and the borrowings that are available of $1.5 billion relative to the uninsured amount of deposits, I think roughly half of your deposits are about just under $2.7 billion. I guess what's the plan? Or what's kind of the targeted coverage you're looking to get to? Do you -- are you looking at -- it sounds like you're looking to pledge more loans, but is there something to be done on the security side to knowing it's only about 6% of assets to be able to pledge those.

第一個對我來說，僅就可用流動性、可用現金和 15 億美元的借款與未投保的存款而言，我認為大約有一半的存款略低於 27 億美元。我猜計劃是什麼？或者您希望達到什麼樣的目標覆蓋範圍？你 - 你在看嗎 - 聽起來你正在尋求抵押更多貸款，但在安全方面是否需要做些什麼才能知道只有大約 6% 的資產能夠抵押這些貸款。

Thank you very much. It is a 2-way to approach we're doing it. Scheduled to be converted to -- I mean what is that?

非常感謝。這是我們正在做的兩種方法。計劃轉換為——我的意思是那是什麼？

Enhanced insurance coverage.

增強的保險覆蓋面。

Yes, I mean, ICS, okay, and see this, okay? Do we have a schedule for the second quarter now is a little bit -- right around $600 million of customers, we will be converting them to SEDAR and converting them to ICS. That should reduce our so-called uninsured deposits #2 right around about 35% to 36%. Okay, assuming the same amount of total deposits. And in the meantime that we have roughly estimated about the $600 million additional borrowing capacity from Fed. Federal home loan bank as of now, okay. So will that also bring up our also called the total capacity or liquidity to $2.7 billion or $2.5 billion because expect -- so two number is -- will be very close. I don't know whether there's any importance as a bank. You have to cover every uninsured dollar with the -- with so-called our off-balance sheet liquidity.

是的，我的意思是，ICS，好吧，看看這個，好嗎？我們現在是否有第二季度的時間表 - 大約 6 億美元的客戶，我們將把它們轉換為 SEDAR 並將它們轉換為 ICS。這應該會將我們所謂的#2 未保險存款減少約 35% 至 36%。好的，假設總存款數額相同。與此同時，我們粗略估計了美聯儲大約 6 億美元的額外借貸能力。截至目前，聯邦住房貸款銀行，好的。這也會使我們也稱為總容量或流動性達到 27 億美元或 25 億美元，因為預期 - 所以兩個數字 - 將非常接近。我不知道作為銀行是否有任何重要性。你必須用所謂的資產負債表外流動性來支付每一分未保險的美元。

But I do think the most important thing is you have to have a good operation to earn your customers' trust. But we will be getting -- on June 30, 2 numbers will be converged to each other.

但我確實認為最重要的是你必須有良好的運營才能贏得客戶的信任。但是我們會得到 - 在 6 月 30 日，2 個數字將相互融合。

Okay. Great. And then just kind of a related question. In terms of your -- the incremental kind of balance sheet composition, composition going forward, is this higher cash level likely to kind of stick around? I know it's above average to begin with. But I guess what I'm also trying to get at is how do you think borrowings were up in the quarter. Is that -- do we kind of -- do borrowings continue to increase from here with some potential deposit pressure or -- and I guess, it somewhat also depends on your loan growth outlook.

好的。偉大的。然後只是一個相關的問題。就您而言 - 資產負債表構成的增量類型，未來的構成，這種更高的現金水平是否可能會持續存在？我知道它一開始就高於平均水平。但我想我也想知道的是你認為本季度的借款是如何增加的。那是——我們有點——借貸是否會隨著一些潛在的存款壓力從這裡繼續增加，或者——我想，這在某種程度上也取決於你的貸款增長前景。

I mean, balances were slightly lower. So I'm just trying to get a sense for the moving parts of the balance sheet going forward.

我的意思是，餘額略低。所以我只是想了解未來資產負債表的移動部分。

Well, based on what I understand from the industry today, okay? And based on what I'm reading, especially from you guys and all the other information I'll see that the countries that deposit situation is probably more of a concern to everybody as compared to the loan area. Okay?

好吧，根據我今天對這個行業的了解，好嗎？根據我正在閱讀的內容，尤其是來自你們的內容和所有其他信息，我將看到與貸款領域相比，每個人都更關心存款狀況的國家。好的？

True. Loan demand is down as everybody has reported every paper, every service reported. But I think the uncertainty of deposits will last for a period of time. And we, at the Preferred Bank, we'll be closely watching the trend in the second quarter, okay? We're now in no hurry in putting up a whole lot of loans just to earn extra dollars, okay? For -- as compared to the -- as versus the -- maintain the good liquidity and safety. And frankly, let me be a little bit funny that I think we're making enough money to weather this.

真的。貸款需求下降，因為每個人都報告了每份文件，報告了每項服務。但我認為存款的不確定性會持續一段時間。而我們，在首選銀行，我們將密切關注第二季度的趨勢，好嗎？我們現在不急於提供大量貸款來賺取額外的美元，好嗎？對於 - 與 - 相比 - 保持良好的流動性和安全性。坦率地說，讓我有點好笑的是，我認為我們賺了足夠的錢來度過難關。

Clearly.

清楚地。

Yes, no doubt. And then just on the cost of deposits or spot rate on deposits at the end of March. I don't know if you have that ad or even the monthly average for the month of March on deposit costs as well as the average NIM in the month of March?

是的，毫無疑問。然後只是關於存款成本或 3 月底的存款即期利率。我不知道您是否有該廣告，甚至不知道 3 月份存款成本的月平均值以及 3 月份的平均 NIM？

The net interest margin in March was $467 million. Cost of deposits was $263 million.

3 月份的淨息差為 4.67 億美元。存款成本為 2.63 億美元。

Okay. Great. And then last 1 for me. Just some cautionary commentary on office commercial real estate in the press release, not a surprise. Since everybody is talking about it. But can you size up your exposure there and also give us some additional details and characteristics, owner versus nonowner, average loan size, what's downtown kind of considered metro downtown or more at risk?

好的。偉大的。然後最後 1 對我來說。新聞稿中只是對寫字樓商業地產的一些警示性評論，並不意外。因為每個人都在談論它。但是你能不能擴大你在那裡的風險敞口，並給我們一些額外的細節和特徵，所有者與非所有者，平均貸款規模，什麼樣的市中心被認為是市中心或更多的風險？

And how LTVs are at origination versus maybe some new appraisals you're getting in, rent rolls, what your plans are for borrowers that renew that want less space I could go on. But any granularity there would be helpful.

以及 LTV 的起源與你可能獲得的一些新評估、租金、你的計劃是什麼，你的借款人需要更少的空間，我可以繼續。但是那裡的任何粒度都會有所幫助。

Okay. We have roughly about 10% of our total loan portfolio in office property, office loans, okay. But -- of this amount, roughly $8 million is in the downtown area. We have faithfully have been tried to avoid especially Los Angeles anti area for the past 20 years. And most of our office properties in the urban, suburban area that in California, especially in Los Angeles, it's a big, really suburban [Armenta.] So there's little communities everywhere and basically the property there is a lot more stable than the downtown area.

好的。我們大約有 10% 的貸款組合用於辦公物業、辦公貸款，好吧。但是——在這一數額中，大約有 800 萬美元在市區。在過去的 20 年裡，我們一直忠實地試圖避開特別是洛杉磯的反地區。我們的大部分寫字樓都在市區、郊區，在加利福尼亞州，尤其是在洛杉磯，這是一個很大的、真正的郊區 [Armenta]。所以到處都沒有什麼社區，基本上那裡的房產比市區穩定得多.

And when we have the $8 million in downtown area is really in San Francisco that was leased and in the long-term lease to, I think, one of the famous university over there. It is very, very, how should I say, underwritten quite well is loan-to-value ratio probably less than 40% in any event. But I would have as Nick to bring you up to date with some of our underwriting features that we do that on this sort of property.

當我們在市中心地區擁有 800 萬美元時，它實際上是在舊金山租來的，並且長期租給了那裡的一所著名大學。非常非常，我怎麼說呢，承保得很好是貸款價值比可能在任何情況下都低於 40%。但我希望尼克能向您介紹我們在此類財產上所做的一些承保功能的最新情況。

Yes. Thank you, Mr. Yu. Matthew, our entire portfolio at this time, our asset quality is pretty stable up to date and also resilient. And the key thing that we used to underwrite our loans, a little bit different as other banks are bit of a different as those regional banks, we request for 2 major areas to be considerate, okay?

是的。謝謝余先生。馬修，我們目前的整個投資組合，我們的資產質量目前非常穩定，也有彈性。我們用來承銷貸款的關鍵是，與其他銀行和那些區域性銀行有點不同，我們要求考慮兩個主要領域，好嗎？

The first is the location. Just like Mr. Yu mentioned that we avoid Metro LA, downtown area, and we try to do more office loans near the residential needs or some other urban area. And the other thing is that we need to have strong sponsorship behind it. That's always our credit underwriting major 2 areas other than the normal underwriting process. So with all those strong sponsorship behind it. So even though the property has a little bit weak in the cash flow, however, their global cash flow, their liquidity is very strong at this time. So we do not see any immediate threat to our office product or some other CRE side.

首先是位置。就像余先生提到的，我們避開洛杉磯地鐵、市中心，我們盡量在住宅需求附近或其他一些市區附近做更多的辦公室貸款。另一件事是我們需要有強大的讚助支持。這始終是我們的信用承銷主要 2 個領域，而不是正常的承銷流程。所以在它背後有所有這些強大的讚助。因此，儘管該物業的現金流量有點弱，但是，它們的全球現金流量，此時它們的流動性非常強。因此，我們沒有看到對我們的辦公產品或其他 CRE 方面有任何直接威脅。

So -- to further on that, we don't have any nonaccrual or classified or even 30 to 89 days. Have been lost in the office sector.

所以 - 為了進一步說明這一點，我們沒有任何非應計或分類甚至 30 到 89 天。一直迷失在辦公界。

And our next question will come from Andrew Terrell with Stephens.

我們的下一個問題將來自 Andrew Terrell 和 Stephens。

Maybe just following up on the last point. I think it's pretty reassuring to hear that only $8 million or so that would be considered true kind of downtown type office. I guess, the 10% of total loans are office properties. Can you size up maybe the chunkiness within that? Like what's the size of the largest 1, 2 or 3 type loans in the office category?

也許只是跟進最後一點。我認為聽到只有 800 萬美元左右就可以被認為是真正的市中心式辦公室，這讓人感到非常安心。我猜，總貸款的 10% 是辦公物業。你能估計一下其中的塊度嗎？比如辦公室類別中最大的 1、2 或 3 類貸款的規模是多少？

Well, the largest 2 or 3 years on average about $40 million 3 of the I mean, and our average -- total average loan is $4.1 million in our office properties, with average LTV of 61% at the entrant place. Many of them is coming in -- I mean in the early days. Each ones is underwritten with a complete underwriting process individually, especially those larger loans.

好吧，我的意思是，最大的 2 年或 3 年平均約為 4000 萬美元 3，我們的平均貸款總額為 410 萬美元，在我們的辦公物業中，平均 LTV 為 61%。他們中的許多人正在進來——我的意思是在早期。每個人都單獨承保了完整的承銷流程，尤其是那些較大的貸款。

The office building that is -- one of the office building in the $50 million range is in one of the hardest areas in Los Angeles core, the [Scarborough] City, which we have the creative and entertainment combination, the first floor are all upscale -- I mean they have upscale the good restaurants that is assuming business. The second third floor is rented out to a new criticized type of company with LC support from a major bank. So that's one. And also that we have a very rational, very reasonable sponsorship behind it. The next largest one is in -- is one of the buildings (inaudible) the owner of that is rearranges office building, make that office building near fully occupied and underwritten.

寫字樓是 - 5000 萬美元範圍內的寫字樓之一，位於洛杉磯核心最困難的地區之一，[Scarborough] City，我們擁有創意和娛樂組合，一樓都是高檔的-- 我的意思是他們擁有正在開展業務的高檔餐廳。二三樓租給一家新的受批評類型的公司，並獲得一家大銀行的信用證支持。這就是一個。而且我們在背後有非常理性、非常合理的讚助。下一個最大的是 - 是建築物之一（聽不清），它的所有者正在重新安排辦公樓，使該辦公樓接近完全佔用和承保。

The owner of the of the us building is very, very, very substantial, very, very successful. And his credit in Los Angeles is it's tough notch. Okay? Its cash flow is huge. So these are the top 2 as you have wanted to know, okay? And I might explain the third one is in a very rich area of Newport Beach, where a group of people bought office building and my view, that group of people have dealt with us for many, many, many, many projects there. And a substantial group of people bought the office building and vacated everything and it's going to demolish it and convert into apartments.

美國大樓的主人非常非常非常有錢，非常非常成功。他在洛杉磯的榮譽是它的艱難等級。好的？它的現金流量很大。所以這些就是你想知道的前 2 名，好嗎？我可能會解釋第三個是在紐波特海灘的一個非常富裕的地區，一群人在那裡購買了辦公樓，我認為，那群人在那裡與我們打交道了很多很多項目。一大群人買下了辦公樓並騰出了所有東西，它將拆除並改建為公寓。

It is in the process of getting doing that. So it's -- right now, it's really empty. But because the nature, when they come into us, it's a office building, we put in the office building category. And also the fourth one is in the same category. Okay? So these are the larger ones, but predominantly or building -- majority of our loan is smaller ones, let's say, in San Francisco downtown or as San Francisco area of the [plushies] and the Brooklyn, if you know this area, the lifestyle and the things in those areas are all small commercial office unit sometimes has a retail downstairs sometime upstair. But if you know them, the real estate over there is it's really good. It's not like Manhattan.

它正在這樣做。所以它 - 現在，它真的是空的。但是因為性質，當他們進入我們的時候，它是一座辦公樓，我們把它放在辦公樓的類別中。第四個也屬於同一類別。好的？所以這些是較大的，但主要是建築——我們的大部分貸款都是較小的，比方說，在舊金山市中心或舊金山地區的 [plushies] 和布魯克林，如果你了解這個地區，生活方式那些地區的東西都是小型商業辦公單位，有時樓下有時樓上有零售店。但是如果你認識他們，那邊的房地產真的很好。它不像曼哈頓。

Okay. Very good. I really appreciate all the extra color there. I want to go back to the deposit flows. For the quarter, I was wondering if anything specifically -- I guess if you could quantify maybe the drop in the interest-bearing demand deposits, I think, down $540 million or so quarter-on-quarter. Was any of that a move to time deposits? Or were those just exits out of the bank line.

好的。非常好。我真的很感激那裡所有額外的顏色。我想回到存款流量。對於本季度，我想知道是否有什麼特別的 - 我想你是否可以量化計息活期存款的下降，我認為，環比下降 5.4 億美元左右。這是否是向定期存款的轉變？或者那些只是退出銀行線。

I'm just trying to get a sense of how much was more kind of geography across the deposit segments versus maybe relationships loss or those that left the bank?

我只是想了解存款細分市場的地理位置與可能失去關係或離開銀行的地理位置相比有多少？

Ed, do you want to answer the first Okay. Maybe I add to it.

Ed，你想回答第一個好嗎？也許我補充一下。

Yes. The -- from what we know and what we've looked at, Andrew, it's not so much relationships as it is paring down balances. And to Mr. Yu's point earlier, a lot of those were really centered in just a very few accounts. These depositors or clients that we call them have some form of fiduciary obligations with respect to their funds. And so in what they felt was their best interest, they moved them out following what happened with Signature in Silicon Valley.

是的。安德魯，從我們所知道的和我們所看到的來看，與其說是關係，不如說是削減平衡。就余先生早些時候的觀點而言，其中很多實際上都集中在極少數賬戶中。這些存款人或我們稱之為客戶的客戶對他們的資金負有某種形式的信託義務。因此，在他們認為對他們最有利的情況下，他們在矽谷發生的 Signature 事件後將他們搬走了。

However, we have been in constant contact with all of them and are working to either get them into a reciprocal deposit program to bring them back or going through and going through very diligently with their senior leadership and our senior leadership and going over what we're doing as a bank to mitigate all the risks that have been brought forth through these 2 bank failures. And so we feel very good about that process and what we're going through.

然而，我們一直與他們所有人保持聯繫，並正在努力要么讓他們加入互惠存款計劃，讓他們回來，要么與他們的高級領導層和我們的高級領導層一起非常努力地進行，並審查我們的內容。作為一家銀行，我們正在努力減輕因這兩家銀行倒閉而帶來的所有風險。因此，我們對這個過程以及我們正在經歷的事情感覺非常好。

And also to Mr. Yu's point, a number of them have credit relationships with us. And so we fully expect to have a lot of that back.

還有於先生的觀點，他們中的一些人與我們有信用關係。因此，我們完全希望得到很多回報。

Yes. Okay. Very good. And to the point, I think it was mentioned at the start of the call, deposits quarter-to-date, up 1%. I guess within that, should we expect that the bulk of that just is driven by time deposits. And what I was specifically getting at is the NIB flows since quarter end. Does it feel like there's been any kind of deceleration in the drawdown of NIBs?

是的。好的。非常好。就這一點而言，我認為在電話會議開始時提到過，本季度至今的存款增長了 1%。我想在其中，我們是否應該期望其中大部分只是由定期存款驅動。我特別要了解的是自季度末以來的 NIB 流量。感覺 NIB 的縮減是否有任何減速？

Most definitely since the end of the quarter, Andrew, and that's a good question. What we've seen since the end of the quarter is really more of a business as usual, I would say. And so that's why we see the tick up of 1% from the end of the quarter. And obviously, I think we'll have much better news to report at June 30 with respect to this subject.

最肯定的是自本季度末以來，安德魯，這是一個很好的問題。我想說，自本季度末以來我們所看到的實際上更像是往常一樣的業務。這就是為什麼我們看到本季度末上漲 1% 的原因。顯然，我認為我們將在 6 月 30 日就此主題發布更好的消息。

Johnny, why don't you want to add to that? I mean (inaudible) nature of deposits increase in the first half -- I mean, of the quarter. The first half to month.

約翰尼，你為什麼不想添加呢？我的意思是（聽不清）存款在上半年增加的性質 - 我的意思是，本季度。上半年到一個月。

Yes, I think the nature of deposit inflows is just like I said, this is as usual for a lot of our clients, not -- and we're working on regaining back some of deposit loss like I said, but this is business usual clients coming in.

是的，我認為存款流入的性質就像我說的那樣，這對我們的很多客戶來說都是正常的，不是——我們正在努力像我說的那樣挽回一些存款損失，但這是商業慣例客戶進來。

And our next question will come from Gary Tenner with D.A. Davidson.

我們的下一個問題將來自 D.A. 的 Gary Tenner。戴維森。

This is Clark Wright on for Gary Tenner. Quickly, if I could. You previously indicated you had asked regulators for approval with regard to $150 million stock buyback. Could you provide any color on how you were thinking about capital and the buyback right now, given your valuation near tangible book value and the potential for getting that buyback approved by regulators?

這是加里·坦納 (Gary Tenner) 的克拉克·賴特 (Clark Wright)。如果可以的話，快點。您之前曾表示您已請求監管機構批准 1.5 億美元的股票回購。考慮到您的估值接近有形賬面價值以及獲得監管機構批准回購的可能性，您能否說明您目前對資本和回購的看法？

Let me, first of all, I mean, describe the process. In order to get the regulators approval, they require us to share the approval for the buyback, okay? That's the state of California with State Bank. Yes. So we have completed our proxy statement, which has just been released and then asking a shareholders' approval for $150 million buyback authorization and from that point on, we will afford to decide when, how much amount will be the buyback happening and when they decided they want to do that, we will ask the Board regulator to approve. Usually, it takes about -- DPM takes about 2 weeks to in the past 2 months to approve it, okay? So in any event, that's a process. So we are getting ourselves ready to do that. But in the meantime, that's from the legality aspect.

首先，我的意思是，讓我描述一下這個過程。為了獲得監管機構的批准，他們要求我們分享回購的批准，好嗎？那是加利福尼亞州和州立銀行。是的。所以我們已經完成了剛剛發布的委託書，然後要求股東批准 1.5 億美元的回購授權，從那時起，我們將有能力決定回購的時間、數量以及他們何時決定他們想這樣做，我們將請求董事會監管機構批准。通常，DPM 大約需要 2 周到過去 2 個月的時間來批准它，好嗎？所以無論如何，這是一個過程。所以我們正準備這樣做。但與此同時，這是從合法性方面考慮的。

From the operation aspect is that I must tell you that in the last phone call, I'm fully confident that we're going to buy back the stock, okay, because so cheap in our opinion. You must know we're selling in 5.2x of 2023 earnings, okay, that's obviously, I mean, advantage for us to buy back we will. But right now, we have a bigger picture of the liquidity issue and the so-called unstableness in the public's vision about the banks. So most likely, in second quarter, we will be looking very carefully to make sure that the liquidity issue is done, we don't need any additional liquidity to do that? Okay.

從操作方面來說，我必須告訴你，在上次電話中，我完全有信心我們會回購股票，好吧，因為我們認為它很便宜。你必須知道我們出售的是 2023 年收益的 5.2 倍，好吧，我的意思是，這顯然是我們回購的優勢。但現在，我們對流動性問題和公眾對銀行的看法中所謂的不穩定有了更全面的認識。所以很可能，在第二季度，我們將非常仔細地尋找以確保流動性問題已經解決，我們不需要任何額外的流動性來做到這一點？好的。

But long term, that will happen. Obviously, one thing will not happen is our stock price doubled, maybe we don't do that, okay. We hope that's the case. But most likely looks like with our trajectory of our stock value is concerned, it will be very beneficial to our shareholders.

但從長遠來看，這會發生。顯然，有一件事不會發生，那就是我們的股價翻了一番，也許我們不會那樣做，好吧。我們希望是這樣。但很可能看起來與我們的股票價值軌蹟有關，這將對我們的股東非常有利。

And then just in terms of loan growth for the full year, how are you thinking about it just given the economic uncertainty and fourth quarter contraction, about first quarter contraction balances?

然後就全年的貸款增長而言，考慮到經濟不確定性和第四季度收縮，你如何看待第一季度收縮餘額？

Well, loan growth has 3 dimensional situation. I mean again, I cannot give you any guidance on that, because I truly do not know. On the micro side, you have a reduced loan demand, especially right after this meltdown or the -- I mean, crises -- so-called crises, it changed a lot of people's investment priorities. You see the things slow down, okay? And -- although the payoffs still continued and by those familiar names, you wonder why they still want to do that, but it's still paying us off with a 5% 10-year mortgages, 5-year mortgage, maybe it's because it can I mean, they committed a time ago. But again, that's something as we see as a corporate strategy, we don't match that, okay? That's a micro situation.

那麼，貸款增長有 3 個維度的情況。我的意思是，我不能給你任何指導，因為我真的不知道。在微觀方面，你的貸款需求減少了，尤其是在這次崩潰或——我的意思是，危機——所謂的危機之後，它改變了很多人的投資重點。你看事情變慢了，好嗎？而且——儘管收益仍在繼續，而且是那些熟悉的名字，你想知道為什麼他們仍然想這樣做，但它仍然以 5% 的 10 年期抵押貸款、5 年期抵押貸款償還我們，也許是因為我可以意思是，他們犯了一個時間前。但同樣，我們認為這是一種公司戰略，我們不符合這一點，好嗎？那是微觀情況。

So we really don't know after May, when the Federal Reserve has indicated if they are holding the rates stable versus what -- whether that will spur up the investment, I mean, activity of our customers, okay? And so that's one thing in the security.

所以我們真的不知道在 5 月之後，當美聯儲表示他們是否保持利率穩定時 - 這是否會刺激投資，我的意思是，我們客戶的活動，好嗎？所以這是安全方面的一件事。

The macro side is, again, under the current liquidity environment, will we be able to get substantially more deposit like we used to do, okay? The question is also how much you have to pay for it. Right now, everybody is competing for these deposits fearlessly, okay? So these are the things we're facing. If you ask me in May, I will tell you our vision better. Right now, I have no clarity on this point. I'm sorry about that.

宏觀方面，再一次，在當前的流動性環境下，我們是否能夠像過去那樣獲得更多的存款，好嗎？問題還在於您需要為此支付多少錢。現在大家都在無所畏懼地爭奪這些存款，好嗎？所以這些就是我們面臨的事情。如果你在五月份問我，我會更好地告訴你我們的願景。目前，我不清楚這一點。對此我感到很抱歉。

No worries, understood. Lastly, SBA production and demand trends, it looks like you had a gain on sale of SBA and resumed selling. Maybe if you could just point to some of the demand trends that are going on and as well as the gain on sale premiums?

不用擔心，明白了。最後，SBA 的生產和需求趨勢，看起來您在出售 SBA 時獲利並重新開始銷售。也許您可以指出一些正在發生的需求趨勢以及銷售溢價的收益？

Okay. (inaudible) do you want to answer the SBA?

好的。 （聽不清）您想回答 SBA 嗎？

SBA definitely, again, as we mentioned earlier, that this is a new initiative, we are trending very carefully, methodically and especially during the current situation. However, we are moving forward. We do have a pretty solid SBA pipeline. And we think that for small business and it's something that we will continue to move forward.

正如我們之前提到的，SBA 再次肯定地說，這是一項新舉措，我們正在非常謹慎、有條不紊地進行趨勢分析，尤其是在當前形勢下。然而，我們正在前進。我們確實有一個非常可靠的 SBA 管道。我們認為對於小型企業來說，這是我們將繼續推進的事情。

And our next question will come from David Feaster with Raymond James.

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

Maybe just following up on -- I know you don't -- the loan question is hard to answer, but maybe just asking a little bit different way. I mean, you've done a phenomenal job actually pricing loans and getting paid for the risk that you're taking. And I guess you not having as much of an appetite for credit here, but where and demand, especially given the structure and the standards in pricing that you have. But where are you still seeing good risk-adjusted returns? What segments are still able to make projects pencil and is it a market or geography? I'm just curious, where are you still seeing good opportunities at this point?

也許只是跟進 - 我知道你不知道 - 貸款問題很難回答，但也許只是問了一些不同的方式。我的意思是，你在實際為貸款定價並為你所承擔的風險獲得報酬方面做得非常出色。而且我猜你對這裡的信貸沒有那麼大的胃口，但是在哪里和需求，特別是考慮到你擁有的定價結構和標準。但是，您在哪裡還能看到良好的風險調整後回報？哪些部分仍然能夠使項目鉛筆，它是市場還是地理？我只是好奇，你現在在哪裡還能看到好的機會？

Well, what we are seeing right now is really not so-called category type of situation. We're seeing the individuals. We still have customers that they have -- individual customers that they have projects they want to continue to do okay? Right now, it seems to be -- by the way, I wanted to tell on the C&I side, right now, we don't see C&I being the big growth factor as of right now, because the interest rate situation, okay. But on the real estate side, we're seeing -- there are still projects going on. People need to get it purchased or get it developed, they get it on. So these are the individual cases. They will be subject to much intense individual underwriting of the loan. So these are the risk return opportunity. Unless there's a good return, we won't do it. We'd rather just keep a good liquidity into the situation right now.

那麼，我們現在看到的，真的不是所謂的類別類型的情況。我們看到的是個人。我們仍然有他們擁有的客戶——個人客戶，他們有他們想要繼續做的項目，好嗎？現在，它似乎是 - 順便說一句，我想在 C＆I 方面說，現在，我們不認為 C＆I 是目前的主要增長因素，因為利率情況，好吧。但在房地產方面，我們看到——仍有項目在進行中。人們需要購買它或開發它，他們就會繼續使用它。這些都是個案。他們將受到非常嚴格的個人貸款承銷。所以這些都是風險回報機會。除非有很好的回報，否則我們不會這樣做。我們寧願現在就保持良好的流動性。

Now long term, as you all know, there's so many zillion dollars, billion and billion dollars of so called CMBS fall-offs from the current maturities, okay? It is the report of everyone, including you that many of them would be either remargined or foreclosed or whatever, rearranged, okay? And traditionally, if past is any experience in future once every few years, we face situation at that. There's a lot of value changes and these things become variable. We're ready to pick a few of the remargined items.

眾所周知，從長遠來看，當前到期的所謂 CMBS 下跌了數十億美元，數十億美元，好嗎？包括你在內的每個人都報告說，他們中的許多人要么被重新安排，要么被取消抵押品贖回權，要么重新安排，好嗎？傳統上，如果過去是未來的任何經驗，每隔幾年一次，我們就會面臨這種情況。有很多價值變化，這些東西變得可變。我們準備挑選一些重新保證的商品。

That makes sense. And so some of those CRE projects that you're talking about, how is pricing in those types of deals? What are you able to price those types of things at right now?

這就說得通了。因此，您正在談論的一些 CRE 項目，這些類型的交易定價如何？你現在能為這些類型的東西定價多少？

Basically prime-based lenders, usually is prime plus -- I mean, we go up and down from prime plus half. That's what we do now.

基本上以優質貸款為基礎的貸方，通常是優質貸款——我的意思是，我們從優質貸款的一半上下浮動。這就是我們現在所做的。

Okay. And then you guys have been one of the most rate-sensitive banks around. You guys have done a phenomenal job. And Ed, you and I have talked about it before. I'm just curious how you think about managing your rate sensitivity at this point in the cycle and potentially maybe taking some rate sensitivity off the table? And how do you think about doing that?

好的。然後你們一直是周圍對利率最敏感的銀行之一。你們做得非常出色。埃德，你和我之前已經談過。我只是很好奇你如何考慮在周期的這一點上管理你的利率敏感度，並有可能將一些利率敏感度從桌面上移開？您如何考慮這樣做？

We have several initiatives of doing. One of them is if some of customer wants to convert their loans into fixed rate. We will now start to consider it, but the rate has to be, I mean, acceptable to us, okay? So there are a number of them has been started to try to thinking about converting okay. That's one of them. Second of them, almost all of our floating rate loans, as you know that we have a floor.

我們有幾項舉措正在做。其中之一是如果一些客戶想將他們的貸款轉換為固定利率。我們現在將開始考慮它，但我的意思是，這個比率必須是我們可以接受的，好嗎？所以他們中的一些人已經開始嘗試考慮轉換 okay。那就是其中之一。其次，我們幾乎所有的浮動利率貸款，正如你所知，我們有一個底線。

Currently, the floor is averaging over 6% averaging. There are some older loans that is in the 4% rate, that newer loans in the 7% range, right maybe 5% as up 5%. Eric, here the number, we came back. That serve is a so-called a management tool during a rate decreasing environment. That's why I think Ed has provided you previously with a chart shows you during the rate reduction time, Preferred Bank's earnings actually increased, okay?

目前，地板平均超過 6%。有一些較舊的貸款利率為 4%，較新的貸款利率為 7%，正確的可能是 5% 至 5%。埃里克，這是電話號碼，我們回來了。在利率下降的環境中，該服務是所謂的管理工具。這就是為什麼我認為 Ed 之前向您提供了一張圖表，顯示在降息期間，Preferred Bank 的收益實際上有所增加，好嗎？

That makes sense. And then I guess just last one for me. Maybe just given some potential revenue headwinds, just given the rate environment, rising deposit costs and those types of things. Obviously, you guys run an incredibly efficient institution. But there are some headwinds, right? I mean you got inflationary pressures rising at the IT costs, you guys are continuing to invest in the future with the Texas expansion and the SBA build-out and all those types of things. I'm just curious how you think about expenses in the near term? And any commentary on that front?

這就說得通了。然後我想對我來說只是最後一個。也許只是考慮到一些潛在的收入逆風，只是考慮到利率環境、存款成本上升和那些類型的事情。顯然，你們經營著一個非常高效的機構。但也有一些不利因素，對吧？我的意思是你的 IT 成本導致通貨膨脹壓力上升，你們正在繼續通過德克薩斯州的擴張和 SBA 的擴建以及所有這些類型的事情來投資未來。我只是好奇你如何看待近期的開支？在這方面有什麼評論嗎？

We are continuously looking at opportunistically. We have previously committed to a couple of new branches. One of them is just signed a lease. We will get into that. But basically, the growth really has to come from the adding of the personnel, which is a continuous and the broadest task, and we will continue to do that. As long as any opportunity for the expansion in sort of like a big office or big operation type of thing, we hope that you will fall on labs. I didn't see anything right now.

我們一直在投機取巧。我們之前已經致力於幾個新的分支機構。其中一個剛剛簽了租約。我們將進入那個。但基本上，增長確實必須來自人員的增加，這是一項持續的、最廣泛的任務，我們將繼續這樣做。只要有任何擴展的機會，比如大型辦公室或大型運營類型的東西，我們都希望您能選擇實驗室。我現在什麼都沒看到。

Okay. So we kind of talked about like an $18.5 million to $20 million kind of quarterly run rate. Is that still pretty reasonable?

好的。所以我們談到了 1850 萬到 2000 萬美元的季度運行率。這還是很合理的嗎？

Yes. Probably going to be just $20 million, maybe just slightly north of $20 million, David.

是的。大衛，可能只有 2000 萬美元，也許略高於 2000 萬美元。

And our next question will come from Tim Coffey with Janney.

我們的下一個問題將來自 Tim Coffey 和 Janney。

Ed, I was wondering, can you kind of talk a little bit about the brokered CD market right now and how that -- if that has any kind of interest at this point? I mean given the stuff that you've already done conference call to date.

埃德，我想知道，你現在能不能稍微談談經紀 CD 市場，以及它如何 - 如果此時有任何興趣？我的意思是考慮到您迄今為止已經完成的電話會議。

I'm sorry, what's the question, again, Tim, specifically on broker?

抱歉，蒂姆，問題又是什麼，特別是關於經紀人的問題？

Yes. Are you looking to add more? Or do you feel like you've done enough?

是的。您要添加更多嗎？還是覺得自己做得夠多了？

No. No, we're not looking at more, we've done what we're going to do. And yes, to Mr. Yu's point, we took out the FHLB advance as well. I don't envision us replacing that once that matures. But obviously, we don't know the future, but given everything we know right now, if things progress out the way we expect to, we won't renew that one. But the broker market is actually calmed down since the crisis.

不，不，我們沒有考慮更多，我們已經做了我們要做的事情。是的，就於先生的觀點而言，我們也拿出了 FHLB 預付款。我不認為我們會在它成熟後更換它。但很明顯，我們不知道未來，但鑑於我們現在所知道的一切，如果事情按照我們預期的方式發展，我們將不會續約。但券商市場其實自危機以來已經平靜下來。

Yes, it has hasn't. And then if we start to see kind of rates roll over back half of this year, do you think that you'll start seeing a bigger pipeline in terms of loans?

是的，它沒有。然後，如果我們開始看到某種利率在今年下半年回滾，您認為您會開始看到更大的貸款渠道嗎？

Yes. Our -- Its kind of a rate-sensitive situation. On the lower rate situation, our production is really jumping up.

是的。我們 - 這是一種對利率敏感的情況。在較低的利率情況下，我們的產量確實在增加。

And our next question will be a follow-up from Matthew Clark with Piper Sandler.

我們的下一個問題將是 Matthew Clark 和 Piper Sandler 的後續問題。

I just wanted to get an update on kind of the health of your variable rate borrowers given that you got 80%, 85% of your loans variable rate, you've seen loan yields up 300 basis points from the lows. Just wanted to get an update on how debt service coverage ratios look and how you might be working with certain segment of those borrowers to kind of deal with the increased debt service?

我只是想了解一下你的可變利率借款人的健康狀況，因為你有 80%、85% 的可變利率貸款，你已經看到貸款收益率從低點上升了 300 個基點。只是想了解償債覆蓋率的最新情況，以及您可能如何與這些借款人的某些部分合作以應對增加的償債？

At present time, that I know, okay, we are not having any, but I'd rather have Nick answer that.

目前，我知道，好吧，我們沒有任何問題，但我寧願讓尼克回答這個問題。

Just like Mr. Yu mentioned that we do not see anything happening at this time. No, I don't have any information on that.

就像於先生提到的，我們目前沒有看到任何事情發生。不，我沒有這方面的任何信息。

Matthew, I think it's -- that's a good question, and it actually leads me to another point I'd like to bring up. But it's interesting, as Mr. Yu talked about the CMBS debt cliff that's coming due, $1.5 trillion or whatever it is over the next 3 years. With those assets repricing up, the debt repricing up, I think it's very notable that our portfolio has already gone through that. As opposed to most banks portfolios are still waiting for that cliff, ours because we're 80% prime-based have already seen that, and to the fact that delinquencies are almost zero, non accruals are almost 0, I think, bodes well for the fact of our credit quality and our underwriting and for the fact that this cliff that everyone talks about may not be as devastating as it originally as thought.

馬修，我認為這是一個很好的問題，它實際上將我引向了我想提出的另一點。但有趣的是，余先生談到即將到期的 CMBS 債務懸崖，即 1.5 萬億美元或未來 3 年內的任何金額。隨著這些資產重新定價，債務重新定價，我認為我們的投資組合已經經歷了這一點非常值得注意。與大多數銀行的投資組合仍在等待那個懸崖相反，我們的投資組合因為我們 80% 基於優質資產已經看到了這一點，而且拖欠率幾乎為零，非應計項目幾乎為 0，我認為這預示著事實上，我們的信用質量和我們的承保，以及每個人都在談論的這個懸崖可能並不像最初想像的那樣具有破壞性。

Great. Yes. And then just last one for me, some clarification on the noninterest expense run rate outlook. Ed, I think you mentioned maybe slightly above $20 million run rate. I assume that's the high end of the range you're anticipating this year?

偉大的。是的。然後對我來說是最後一個，對非利息費用運行率前景的一些澄清。 Ed，我想你提到的運行率可能略高於 2000 萬美元。我認為這是您今年預期範圍的高端？

I would call that the middle part of the range, Matthew. As mentioned, there's inflation and wage inflation continues as well. So.

我會稱之為範圍的中間部分，馬修。如前所述，通貨膨脹和工資上漲也在繼續。所以。

Okay. Do you want to reset that range or...?

好的。您要重置該範圍還是...？

No. I'm good with it.

不，我很好。

(Operator Instructions) This concludes our question and anser today. I would like to turn the conference back over to Mr. Li Yu for any closing remarks.

（操作員說明）今天我們的問答到此結束。我想將會議轉回給李宇先生作閉幕詞。

Thank you for your interest. But it is interesting to have everybody asking about the upcoming CRE crisis, especially in this office building area. But I want to recall my personal experience seems to be last 4 years, first started with retail, okay? That big problem that we will have in the electronic, I mean, merchandising. And then, of course, pandemic and the hospitality situation comes along playing ], then probably a combination of something. And now obviously, it's office leading it. Although it sounds funny, it looks like a flavor of the year.

感謝您的關注。但有趣的是，每個人都在詢問即將到來的 CRE 危機，尤其是在這個辦公樓區域。但我想回顧一下我的個人經歷，似乎是過去 4 年，最初是從零售開始的，好嗎？我們將在電子產品中遇到的大問題，我的意思是，商品銷售。然後，當然，大流行病和熱情好客的情況隨之而來 ]，然後可能是某些事情的結合。現在很明顯，它是領導它的辦公室。雖然聽上去很搞笑，但看起來卻是年味兒。

But in any event, last 2 when we are fortunate that our underwriting standard -- underwriting procedure as we previously explained to you, how do we underwrite our hotels, underwrite our retail, basically, we avoided the mall situation. We emphasize on the neighborhood center, so that everybody needs every day enough. So I hope this time, (inaudible) will be equally as fortunate without the portfolio, okay?

但無論如何，最後 2 天，我們很幸運，我們的承銷標準——承銷程序，正如我們之前向您解釋的那樣，我們如何承銷我們的酒店，承銷我們的零售，基本上，我們避免了購物中心的情況。我們強調鄰里中心，讓每個人每天都需要足夠。所以我希望這一次，（聽不清）在沒有投資組合的情況下也能同樣幸運，好嗎？

Thank you very much. And okay, it's truly be a very, very eventful quarter, and thank you for your attention.

非常感謝。好吧，這確實是一個非常非常多事的季度，感謝您的關注。

The conference has now concluded. Thank you very much for attending today's presentation, and you may now disconnect your lines.

會議現已結束。非常感謝您參加今天的演講，您現在可以掛斷電話了。