Provident Financial Services Inc (PFS) 2024 Q2 法說會逐字稿

Thank you for standing by. At this time, I would like to welcome everyone to the Provident Financial Services Incorporated second quarter earnings conference call. (Operator Instructions) Thank you.

謝謝你的支持。此時此刻，我謹歡迎大家參加普羅維登斯金融服務公司第二季財報電話會議。（操作員說明）謝謝。

I would now like to turn the call over to Adriano Duarte, Head of Investor Relations. Adriano, please go ahead.

我現在想將電話轉給投資者關係主管阿德里亞諾·杜阿爾特 (Adriano Duarte)。阿德里亞諾，請繼續。

Thank you, Greg. Good morning, everyone, and thank you for joining us for our second quarter earnings call. Today's presenters are President and CEO, Tony Labozzetta; and Senior Executive Vice President and Chief Financial Officer, Tom Lyons.

謝謝你，格雷格。大家早安，感謝您參加我們的第二季財報電話會議。今天的主講人是總裁兼執行長 Tony Labozetta；以及資深執行副總裁兼財務長 Tom Lyons。

Before beginning the review of our financial results, we ask that you please take note of our standard caution as to any forward-looking statements that may be made during the course of today's call. Our full disclaimer is contained in yesterday evening's earnings release, which has been posted to the Investor Relations page on our website, provident.bank.

在開始審查我們的財務表現之前，我們請您注意我們對今天電話會議期間可能做出的任何前瞻性陳述的標準謹慎態度。我們的完整免責聲明包含在昨天晚上的收益發布中，該發布已發佈到我們網站 Provident.bank 的投資者關係頁面上。

Now, it's my pleasure to introduce Tony Labozzetta who will offer his perspective on the second quarter. Tony?

現在，我很高興介紹托尼·拉博澤塔（Tony Labozzetta），他將發表他對第二季度的看法。托尼？

Thank you, Adriano. Good morning, everyone, and welcome to the Provident Financial Services earnings call.

謝謝你，阿德里亞諾。大家早安，歡迎參加普羅維登斯金融服務公司的財報電話會議。

Before we discuss our quarterly results, I am happy to note that as of May 16, we closed the Provident Lakeland merger and officially welcomed the Lakeland team into Provident. We'd like to congratulate and thank our team members who have worked diligently to complete the merger. As we combine our banks and our cultures, we are excited by the opportunities to offer our expanded customer base, access to our valuable products and services, especially those of our insurance, wealth management, and treasury management businesses.

在我們討論季度業績之前，我很高興地指出，截至 5 月 16 日，我們完成了 Provident Lakeland 合併，並正式歡迎 Lakeland 團隊加入 Provident。我們要祝賀並感謝為完成合併而辛勤工作的團隊成員。當我們將我們的銀行和我們的文化結合起來時，我們很高興有機會為我們擴大的客戶群提供寶貴的產品和服務，特別是我們的保險、財富管理和資金管理業務。

We continue to build momentum and our team is well prepared for systems integration in September. Please bear in mind that our financial statements this quarter reflect combined results beginning on May 16 and include one-time cost related to the merger transaction.

我們繼續積蓄動力，我們的團隊已為 9 月的系統整合做好了充分準備。請記住，我們本季的財務報表反映的是 5 月 16 日開始的合併業績，並包括與合併交易相關的一次性成本。

Moving on to our quarterly results. The second quarter was characterized by steady economic growth, continued high interest rates, and an environment of mixed results in the banking sector. Thanks to the efforts of the Provident team, now reinforced by talented members from the former Lakeland Bank, we continue to build our core businesses and maintain strong credit quality.

接下來是我們的季度業績。第二季經濟穩定成長，利率持續高位，銀行業績好壞參半。感謝 Provident 團隊的努力，加上來自前萊克蘭銀行 (Lakeland Bank) 的優秀成員的加強，我們繼續打造我們的核心業務並保持良好的信貸品質。

We are on track to achieve our projected merger cost savings and we are well positioned for the future. As expected, we reported a net loss of $11.5 million, or $0.11 per share, reflecting the impact of merger-related transaction costs. If we were to exclude these expenses, earnings per diluted share would've been $0.44 for the quarter. We can see that our underlying performance remains strong as our pre-tax pre-provision return on average assets was 1.47% for the second quarter compared to 1.28% for the trailing quarter.

我們有望實現預期的合併成本節省，並且我們為未來做好了充分準備。如預期，我們報告淨虧損 1,150 萬美元，即每股 0.11 美元，反映了合併相關交易成本的影響。如果我們排除這些費用，本季攤薄後每股收益將為 0.44 美元。我們可以看到，我們的基本業績依然強勁，第二季稅前撥備前平均資產回報率為 1.47%，而上一季為 1.28%。

While market conditions in the first half of the year constrained loan growth, our fundamentals remain strong, and we expect to achieve our projected growth for the second half of the year. At quarter end, our capital is healthy and exceeded levels deemed to be well capitalized, especially following the issuance of a $225 million in subordinated notes on May 9, which was well subscribed.

儘管上半年的市場狀況限制了貸款成長，但我們的基本面仍然強勁，我們預計下半年將實現預期的成長。截至季度末，我們的資本狀況良好，並超過了資本充足的水平，特別是在 5 月 9 日發行了 2.25 億美元的次級票據並獲得大量認購之後。

As part of the merger, we committed to maintain a minimum of Tier 1 leverage ratio of 8.5% and a minimum total risk-based capital ratio of 11.25%. At quarter end, we have exceeded these requirements with a Tier 1 leverage ratio of 9.36% and a total risk-based capital ratio of 11.66%.

作為合併的一部分，我們承諾維持最低 8.5% 的一級槓桿率和 11.25% 的最低總風險資本率。截至季末，我們已經超出了這些要求，一級槓桿率為 9.36%，總風險資本率為 11.66%。

Tangible book value per share was $13.09 and our tangible common equity ratio was 7.34%. As such, our Board of Directors approved a quarterly cash dividend of $0.24 per share payable on August 30.

每股有形帳面價值為 13.09 美元，有形普通股權益比率為 7.34%。因此，我們的董事會批准於 8 月 30 日支付每股 0.24 美元的季度現金股利。

During the quarter, our total cost of deposits remained relatively low at 2.27%. Our total cost of funds, which was further impacted by the issuance of our subordinated debt, was 2.56%. Overall, our net interest margin increased 34 basis points to 3.21%. In our first full month as a combined company, our net interest margin was 3.38%, which exceeded our expectations.

本季度，我們的總存款成本保持在 2.27% 的相對較低水準。受次級債發行進一步影響，我們的總資金成本為2.56%。整體而言，我們的淨利差增加了 34 個基點至 3.21%。合併後的第一個完整月，我們的淨利差為 3.38%，超出了我們的預期。

Moving forward, we are optimistic about the stability and improvement to our net interest margin and expect it to be between 3.35% and 3.4% in the upcoming quarter. Our commercial lending team closed approximately $307 million of new commercial loans during the second quarter. Of note, 54% of these new originations were part of our C&I lending business.

展望未來，我們對淨利差的穩定和改善持樂觀態度，預計下一季淨利差將在 3.35% 至 3.4% 之間。我們的商業貸款團隊在第二季完成了約 3.07 億美元的新商業貸款。值得注意的是，這些新貸款中有 54% 是我們工商業貸款業務的一部分。

Our ratio of commercial real estate loans to total capital was 477%. We project that by the end of the year, this ratio will be approximately 470%. Our credit quality was strong for the second quarter as evidenced by our non-performing loan ratio of only 36 basis points. The allowance for credit losses on loans represents 1% of total loans compared to 0.98% in the trailing quarter and 0.99% at the end of ‘23. Once again, I would like to express that our strong credit quality metrics reflect the conservative underwriting culture and portfolio management standards.

我們的商業不動產貸款佔總資本的比例為477%。我們預計到今年年底，這一比例將約為470%。我們第二季的信貸品質強勁，不良貸款率僅 36 個基點就證明了這一點。貸款信用損失準備金佔貸款總額的 1%，而上一季為 0.98%，2023 年末為 0.99%。我想再次表示，我們強大的信用品質指標反映了保守的核保文化和投資組合管理標準。

We see improved activity in our combined commercial lending pipeline, which increased during the second quarter to approximately $1.67 billion. The weighted average interest rate is 7.53% compared to 7.42% in the trailing quarter. The pull through adjusted pipeline, including loans pending closing, is approximately $1 billion. We remain very optimistic regarding the quality of our pipeline.

我們看到合併商業貸款管道的活動有所改善，第二季增加至約 16.7 億美元。加權平均利率為 7.53%，而上一季為 7.42%。調整後的通路拉動（包括待關閉的貸款）約為 10 億美元。我們對管道的品質仍然非常樂觀。

Our fee-based businesses perform very well despite the persistence of a hard insurance market, which has driven commercial insurance rates higher. Provident Protection Plus had a great second quarter, with 19% organic growth as compared to the same quarter last year and a retention rate of over 100%.

儘管保險市場持續疲軟，導致商業保險費率走高，但我們的收費業務仍表現出色。Provident Protection Plus 第二季表現出色，與去年同期相比有機成長 19%，保留率超過 100%。

Favorable market conditions help grow Beacon Trust assets under management to about $4.1 billion at quarter end, compared to $3.7 billion in the same quarter last year, which improved fee income 3.8% as compared to the trailing quarter. For the first six months 2024, Beacon produced $168 million in new business compared to $107 million for the same period last year.

有利的市場條件幫助 Beacon Trust 管理的資產在季度末增加至約 41 億美元，而去年同期為 37 億美元，這使得費用收入較上一季提高了 3.8%。2024 年前六個月，Beacon 創造了 1.68 億美元的新業務，而去年同期為 1.07 億美元。

We are pleased by the success of our fee-based businesses and are enthusiastic about the prospects of enhanced growth from our expanded customer base. As we move into the second half of 2024, as previously mentioned, our attention will be on completing all aspects of the merger, integrating our systems smoothly and becoming the pre-eminent community bank in our market. We expect to achieve synergies and deliver even more value to our customers, employees, and stockholders.

我們對收費業務的成功感到高興，並對我們擴大的客戶群帶來的成長前景充滿信心。正如前面所提到的，隨著我們進入 2024 年下半年，我們的注意力將集中在完成合併的各個方面、順利整合我們的系統並成為我們市場上卓越的社區銀行。我們期望實現協同效應，為我們的客戶、員工和股東創造更多價值。

Now, I'll turn the call over to Tom for his comments on our financial performance. Tom?

現在，我將把電話轉給湯姆，請他對我們的財務表現發表評論。湯姆？

Thank you, Tony, and good morning, everyone. As Tony noted, we reported a net loss for the quarter of $11.5 million, or $0.11 per share due to merger-related activity. Total charges related to our merger with Lakeland Bancorp were $86.9 million in the current quarter, consisting of initial CECL provisions on non-PCV acquired loans and commitments to extend credit of $65.2 million, transaction cost of $18.9 million, and a $2.8 million loss realized on the sale of Lakeland subordinated debt from Provident investment portfolio prior to the merger.

謝謝你，托尼，大家早安。正如托尼指出的，由於合併相關活動，我們報告本季淨虧損 1,150 萬美元，每股 0.11 美元。本季與我們與Lakeland Bancorp 合併相關的總費用為8,690 萬美元，其中包括針對非PCV 收購貸款的初始CECL 撥備以及6,520 萬美元的信貸承諾、交易成本1,890 萬美元以及2017 年實現的280 萬美元損失。

The remaining provision for credit losses on loans and commitments to extend credit was also somewhat elevated at $4.5 million for the quarter despite strong asset quality and a stable economic forecast. This increase in the organic provision for loan losses was due to the development of new quantitative models for the combined bank, which resulted in changes in projected loss factors for all loan segments.

儘管資產品質強勁且經濟預測穩定，但本季貸款和信貸承諾的剩餘信貸損失撥備也有所增加，達到 450 萬美元。貸款損失準備金的有機增加是由於合併後銀行開發了新的量化模型，導致所有貸款部門的預期損失係數發生變化。

In addition, qualitative adjustment ranges were recalibrated in connection with the development of the new merged bank models. This brought our allowance coverage ratio to 1% of total loans.

此外，隨著新合併銀行模式的發展，品質調整範圍也進行了重新調整。這使我們的撥備覆蓋率達到貸款總額的 1%。

Excluding merger-related charges, pre-tax pre-provision earnings for the current quarter was $70.1 million, or an annualized 1.47% of average assets. Revenue increased to $163.8 million for the quarter, reflecting 46 days as a combined company; and our net interest margin increased to 3.21%.

不包括合併相關費用，本季稅前預撥備收益為 7,010 萬美元，年化平均資產率為 1.47%。該季度營收增至 1.638 億美元，合併後的公司營業時間為 46 天；淨利差增至3.21%。

For the quarter, the margin included 47 basis points of purchase accounting accretion. We projected NIM in the 3.35% to 3.40% range for the remainder of 2024, increasing to around 3.45% over the course of 2025. Our projections include two rate reductions in 2024 and another two rate cuts in 2025.

本季的利潤率包括 47 個基點的採購會計增量。我們預計 2024 年剩餘時間內的淨利差將在 3.35% 至 3.40% 的範圍內，並在 2025 年期間增加至 3.45% 左右。我們的預測包括 2024 年兩次降息和 2025 年另外兩次降息。

Regarding interest rate risk, our newly combined balance sheet remains largely neutral. However, we expect little benefit on deposit costs from the first two rate cuts. We completed a successful regulatory capital raise through the issuance of $225 million of 9% subordinated debt in the quarter, which increased funding costs. However, the impact to the margin was partially offset by the sale of $550 million of securities acquired from Lakeland and the repayment of a similar amount of overnight borrowings and broker deposits.

關於利率風險，我們新合併的資產負債表基本上保持中立。然而，我們預計前兩次降息對存款成本的影響不大。我們透過在本季發行 2.25 億美元的 9% 次級債券，成功完成了監管資本籌集，這增加了融資成本。然而，對利潤率的影響被出售從 Lakeland 收購的 5.5 億美元證券以及償還類似金額的隔夜借款和經紀人存款所部分抵消。

Excluding the $7.91 billion of acquired loans, period-end total loans were essentially flat for the quarter. Within the portfolio, C&I loans increased by $90 million and CRE loans decreased by $75 million. Our pull through adjusted loan pipeline at quarter end was $1 billion with a weighted average rate of 7.5% versus our current portfolio yield of 6.05%.

除去 79.1 億美元的收購貸款，本季期末貸款總額基本持平。在投資組合中，工商業貸款增加了 9,000 萬美元，商業房地產貸款減少了 7,500 萬美元。截至季末，我們調整後的貸款管道為 10 億美元，加權平均利率為 7.5%，而我們目前的投資組合收益率為 6.05%。

Deposits increased to $18.4 billion at June 30, including $8.62 billion acquired from Lakeland. Excluding municipal deposits that are subject to cyclical outflows and broker deposits, which were paid down with the proceeds of security sales, organic deposits increased $123 million for the quarter, and our loans to deposits ratio decreased to 102%.

截至 6 月 30 日，存款增加至 184 億美元，其中包括從 Lakeland 獲得的 86.2 億美元。不包括週期性流出的市政存款和透過證券銷售收益支付的經紀人存款，本季有機存款增加了 1.23 億美元，我們的貸存比下降至 102%。

Asset quality remains strong, with non-performing loans declining to 36 basis points of total loans and total delinquencies declining to just 44 basis points of loans. Criticized and classified loans did increase modestly but remained relatively low at 2.6% of total loans. Net charge offs were just $1.3 million, or an annualized 4 basis points of average loans this quarter.

資產品質依然強勁，不良貸款佔貸款總額下降至 36 個基點，總拖欠率下降至僅佔貸款的 44 個基點。批評和分類貸款確實略有增加，但仍相對較低，佔貸款總額的 2.6%。淨沖銷額僅 130 萬美元，相當於本季平均貸款的年化 4 個基點。

With strong asset quality and a stable economic outlook, we expect future provisions to be driven primarily by loan growth and expect the coverage ratio to rain at approximately 1%. Excluding the loss on security sales, non-interest income increased to $25 million this quarter, reflecting the Lakeland combination, strong performance from our wealth management and insurance agency subsidiaries and an increase in BOLI income.

憑藉強勁的資產品質和穩定的經濟前景，我們預計未來撥備將主要由貸款成長驅動，撥備覆蓋率預計將達到 1% 左右。不包括證券銷售損失，本季非利息收入增至 2,500 萬美元，反映了 Lakeland 合併、財富管理和保險代理子公司的強勁業績以及 BOLI 收入的成長。

As Tony noted, we are on track to achieve our targeted merger cost saves and project non-interest expenses of approximately $120 million for Q3 of 2024, declining to approximately $107 million in Q4 following our Labor Day core systems conversion. Our effective tax rate this quarter was impacted by several unusual items, including merger-related charges, the imposition of a 2.5% New Jersey transit fee surcharge, and the related revaluation of deferred tax assets. We currently project our effective tax rate for the remainder of 2024 to be approximately 29.5%.

正如托尼指出的那樣，我們預計將實現合併成本節約的目標，並預計2024 年第三季度的非利息支出約為1.2 億美元，在勞動節核心系統轉換後，第四季度將減少至約1.07 億美元。我們本季的有效稅率受到幾個不尋常項目的影響，包括與合併相關的費用、徵收 2.5% 的新澤西州過境費附加費以及相關的遞延稅資產重估。我們目前預計 2024 年剩餘時間的有效稅率約為 29.5%。

Regarding projected 2025 financial performance, we remain on track to meet or exceed our targeted total combined merger charges of $95 million and projected cost saves of 35%, unchanged from deal announcement. Our net interest market acquisition totaled approximately $480 million, and our core deposit intangible was 4.98% of core deposits excluding municipal deposits. We currently project a net interest margin of approximately 3.35% to 3.45% for the full-year 2025, including approximately 65 basis points of purchase accounting accretion.

關於預計的 2025 年財務業績，我們仍有望達到或超過 9,500 萬美元的合併合併費用目標，預計成本節省 35%，與交易公告中的內容保持不變。我們的淨利息市場收購總額約為 4.8 億美元，我們的核心存款無形資產佔核心存款（不包括市政存款）的 4.98%。我們目前預計 2025 年全年淨利差約為 3.35% 至 3.45%，其中包括約 65 個基點的購買會計增值。

With fully phased in cost saves, we estimate 2025 return on average assets of approximately 1.1% and return on tangible equity of approximately 15%, with an operating expense ratio of approximately 1.75% and an efficiency ratio of approximately 52%.

在全面分階段節省成本的情況下，我們預期 2025 年平均資產回報率約為 1.1%，有形股本回報率約為 15%，營運費用率約為 1.75%，效率比率約為 52%。

That concludes our prepared remarks. We'd be happy to respond to questions.

我們準備好的演講到此結束。我們很樂意回答問題。

(Operator Instructions) Mark Fitzgibbon, Piper Sandler.

（操作說明）Mark Fitzgibbon、Piper Sandler。

Hey, guys, good morning. Congratulations on the deal.

嘿，夥計們，早安。祝賀這筆交易。

Thanks, Mark.

謝謝，馬克。

Good morning.

早安.

First, I wondered if you could give us a little more detail, Tom, on the timing of the cost synergies. I see you got about a $13 million difference from third to fourth quarter. Will all the cost synergies be in do you think by the end of this year?

首先，湯姆，我想知道您是否可以向我們提供更多關於成本協同效應的時間安排的細節。我發現第三季和第四季之間存在約 1300 萬美元的差異。您認為到今年年底所有成本綜效都會反映出來嗎？

We do.

我們做到了。

Okay. Okay, great. And then in what areas do you see potential revenue synergies with like Lakeland? And are there any sort of early surprises on the deal?

好的。好的，太好了。那麼您認為與 Lakeland 等哪些領域有潛在的所得綜效？這筆交易有什麼早期的驚喜嗎？

Areas that we see revenue, obviously, are the things I mentioned in my notes, which are to try to get more integrated activity between our insurance, our wealth, enhance the ABL business that Lakeland has, more treasury management functions overlaid not only within Lakeland customer base but more broader.

顯然，我們看到收入的領域是我在筆記中提到的，這些領域是試圖在我們的保險、我們的財富之間進行更一體化的活動，增強萊克蘭擁有的ABL 業務，更多的財務管理職能不僅涵蓋萊克蘭內部但客戶群更廣泛。

I think all of those are elements that we could achieve some revenue enhancements, and also changing the funding mix to try to get back to roughly 25% on non-interest bearing. I think those are activities that we're going to be looking to do, as well as grow our normal business.

我認為所有這些都是我們可以實現收入成長的要素，並且還可以改變融資組合，以嘗試恢復到大約 25% 的無息貸款。我認為這些是我們想要進行的活動，也是發展我們正常業務的活動。

Okay, great. And since you marked all of Lakeland's loans, I guess I was curious if there's any plan to sort of sell CRE or office loans to maybe try to reduce that CRE concentration some more?

好的，太好了。既然你標記了萊克蘭的所有貸款，我想我很好奇是否有任何計劃出售商業地產或辦公貸款，以試圖進一步降低商業房地產的集中度？

I think at this time, Mark, there's not an active plan to sell off assets for our CRE ratio because the CRE ratio will come down naturally as we accrete the merger mark, and it will get to levels that are more satisfactory for us. I think what we're doing, I think, which is a good segue from your question, is we're actively managing the book. And so if you see why the loan growth this year -- this quarter was a little bit flat for the year, there's also some management in there, where roughly $100 million plus of loans have been managed out very, I would say, politely, because of the fact that they had some characteristics that we didn't want to renew those loans.

我認為，馬克，目前沒有主動計劃出售資產以換取我們的 CRE 比率，因為隨著我們增加合併標記，CRE 比率會自然下降，並且會達到我們更滿意的水平。我認為我們正在做的事情是我們正在積極管理這本書，這與你的問題是一個很好的延續。因此，如果你明白為什麼今年的貸款增長 - 本季度與今年相比有點持平，那裡也有一些管理人員，我禮貌地說，管理了大約 1 億多美元的貸款，因為它們有一些特徵，我們不想續簽這些貸款。

So it's an active management, but there's nothing that says we have to sell because we have super high concentrations in office or any subsector. I would actually say, for the purpose of everyone on the call, when you subsegment our book, we're very comfortable that there's no individual concentrations that would require us to take some further action to reduce that.

所以這是一種積極的管理，但沒有什麼表明我們必須出售，因為我們在辦公室或任何子行業都有超高的集中度。實際上，我想說的是，為了參加電話會議的每個人的目的，當您對我們的書進行細分時，我們很高興沒有個人集中需要我們採取一些進一步的行動來減少這種情況。

Just to follow up on that, I mean, we're very comfortable with our pre-lending practices, underwriting standards and the rest. So in those projections that we have for the CRE ratio being managed down to a lower level, it does still consider growth in the CRE portfolio of approximately 5% a year.

我的意思是，為了跟進這一點，我們對我們的預貸款做法、承保標準和其他方面感到非常滿意。因此，在我們對 CRE 比率控制在較低水準的預測中，仍然考慮到 CRE 投資組合每年約 5% 的成長。

Well said.

說得好。

And then lastly, I wonder if you could share with us if you had a target capital ratio in mind and maybe how you think at some point, maybe it's early next year, how you'd feel about stock buybacks.

最後，我想知道您是否可以與我們分享您是否有目標資本比率，以及您在某個時候（也許是明年初）的想法，您對股票回購的感受如何。

The non-standard conditions to the merger, Mark, required us at the bank level to keep a Tier 1 leverage ratio in excess of 8.5% and a total risk based capital ratio of 11.25%. So kind of use those as goalpost for now in terms of threshold levels. The targets obviously will be slightly above that so that we have appropriate trigger warnings in the event that we approach those limits.

馬克，合併的非標準條件要求我們在銀行層級保持超過 8.5% 的一級槓桿率和 11.25% 的總風險資本比率。因此，就閾值水平而言，暫時將它們用作目標。目標顯然會略高於該目標，以便在接近這些限制時我們會發出適當的觸發警告。

Yes, that's well said. You would think that with a little buffer on the upside.

是的，說得好。你可能會認為，有一點緩衝是有好處的。

Yeah. So the buyback thoughts would kind of play into that, Mark, just kind of based on our expectations around capital formation are strong. As Tony said, that's why we see the CRE ratio coming down naturally, something to consider opportunistically, but no broad-based plans in the current environment.

是的。因此，馬克，回購的想法會在某種程度上發揮作用，這只是基於我們對資本形成的強烈預期。正如托尼所說，這就是為什麼我們看到商業房地產比率自然下降，這是值得機會主義考慮的，但在當前環境下沒有廣泛的計劃。

Great. Thank you.

偉大的。謝謝。

Thank you.

謝謝。

Tim Switzer, KBW.

蒂姆·斯維策，KBW。

Hey, good morning. Thank you for taking my question. We appreciate all of the forward guidance you guys provided, very helpful. Could you discuss some of the areas that can maybe drive some upside or downside? And then if any changes to the macro environment, if we enter a little bit slower economic cycle here, how that could potentially impact your earnings.

嘿，早安。感謝您回答我的問題。我們感謝你們提供的所有前瞻性指導，非常有幫助。您能否討論一些可能帶來正面或負面影響的領域？然後，如果宏觀環境發生任何變化，如果我們進入稍微放緩的經濟週期，這可能會如何影響您的收入。

I mean, I will start from the business side and then I'll let Tom jump in from a rate environment and what it does to our modeling. But the things that can really drive some good upside on revenue, it would be growth obviously in the loans, meaning our growth objectives for the rest of the year and with a complementary funding source.

我的意思是，我將從業務方面開始，然後讓 Tom 從費率環境以及它對我們的建模有何影響開始。但真正能夠推動收入良好成長的，顯然是貸款的成長，這意味著我們今年剩餘時間的成長目標以及補充資金來源。

Penetrating our insurance business into the legacy Lakeland portfolio, I think it has a good upside impact for us and give some super growth in insurance as well as some of penetration of the Beacon space. I think treasury management is a big thing for me because it gives us the balances required for some of that growth. So I think we're going to try to do that a little deeper as well as enhance our SBA and ABL business. And obviously, the things I didn't mention, but in terms of what could be a surprise on the rate side --

將我們的保險業務滲透到萊克蘭的傳統投資組合中，我認為這對我們有良好的上行影響，並為保險帶來了一些超級增長以及對信標空間的一些滲透。我認為財務管理對我來說是一件大事，因為它為我們提供了部分成長所需的餘額。因此，我認為我們將嘗試更深入地做到這一點，並增強我們的 SBA 和 ABL 業務。顯然，我沒有提到的事情，但就利率方面可能令人驚訝的事情而言--

Yeah. As far as rates go, I mean, I think everybody assumes probably correctly that the next move is going to be down. As we talked about, the balance sheet is quite neutral at this point. We don't see us getting tremendous benefit from the first 50 basis points of rate cuts, but we do see some enhancement to the margin beyond that level.

是的。就利率而言，我的意思是，我認為每個人都可能正確地認為下一步會下降。正如我們所討論的，資產負債表目前相當中性。我們認為我們不會從前 50 個基點的降息中獲得巨大收益，但我們確實看到超出該水準的利潤率有所提高。

In terms of overall business activity being slower, obviously, that would impede growth. We'd have to look more closely at efficiencies. We do that as a matter of course anyway.

就整體商業活動放緩而言，顯然這會阻礙成長。我們必須更仔細地關注效率。無論如何，我們這樣做是理所當然的。

Exactly. And we can look at some of the funding mix as some CDs run off and what our pricing strategy is around those. That could give us a little bit of a benefit as well. So it's not going to be one item. There's not one silver bullet. It’s going to be a number of management factors that play into us overachieving our expectations.

確切地。當一些 CD 耗盡時，我們可以看看一些融資組合，以及我們圍繞這些的定價策略。這也可以帶給我們一點好處。所以它不會是一件物品。沒有一顆靈丹妙藥。有許多管理因素會導致我們超出預期。

Okay, great. Yeah, that was helpful. Now that the deal has closed and you guys have been able to talk to some of the customers on both the consumer and commercial side, what has the response been overall? And are there any new products or services you're able to offer them that they've been more excited about?

好的，太好了。是的，這很有幫助。現在交易已經完成，你們已經能夠與消費者和商業方面的一些客戶進行交談，整體反應如何？您是否可以向他們提供令他們更興奮的新產品或服務？

Early indication on a macro level, I haven't heard anything negative. So most of it has been a positive response. Some of the things, when you look at at the commercial banking side, to date, we already have, if I'm quoting John Rath correctly, roughly 14 -- who's our Chief Lending Officer, roughly 14 to 16 referrals already from the commercial bank into the insurance group and we have a few referrals into the wealth group. So that activity has picked up and those products are now expressed to the new customer base that they're available to them, as well as the treasury management enhancements.

宏觀層面的早期跡象，我沒有聽到任何負面消息。所以大部分都是正面的回應。有些事情，當你看看商業銀行方面時，到目前為止，如果我正確地引用了John Rath，我們已經有大約14 名——誰是我們的首席貸款官，大約有14 到16 名來自商業銀行的推薦銀行進入保險組，我們有一些推薦進入財富組。因此，這項活動已經開始，這些產品現在已經向新的客戶群展示，他們可以使用它們，並且財務管理也得到了增強。

And from the Lakeland side, we're obviously trying to deepen the relationships into the SBA. Small business will play a big factor, which Lakeland had a sound platform on, not only for expanding that, but on the deposit gathering function.

從 Lakeland 方面來看，我們顯然正在努力加深與 SBA 的關係。小型企業將發揮重要作用，萊克蘭擁有完善的平台，不僅可以擴大規模，還可以發揮存款聚集功能。

So I think, generally, the excitement is there. Internally and externally, customers are now done with the malaise of the delay in the merger, and we're talking business. And as long as we deliver a great experience, I think it's going to be exciting for us.

所以我認為，總的來說，興奮是存在的。在內部和外部，客戶現在已經擺脫了合併延遲的不適，我們正在談論業務。只要我們提供出色的體驗，我認為這對我們來說就會令人興奮。

Great. It's good to hear. Thank you for taking my questions.

偉大的。很高興聽到。感謝您回答我的問題。

Bill Young, RBC Capital Markets.

比爾楊，加拿大皇家銀行資本市場。

Hey, good morning, guys. How are you?

嘿，早上好，夥計們。你好嗎？

Good morning, Billy.

早安，比利。

Good morning.

早安.

First, I just want to echo the thanks on the deck and outlook this morning. It's extremely helpful.

首先，我只想回應今天早上在甲板上的感謝和展望。這非常有幫助。

Just to follow a thread from the previous question, maybe just to kind of expand on your thoughts on the trajectory of the core margin moving forward. I think in the past, you've said the core kind of stabilizes at 2.85% to 2.90%. Does that still hold as we're tracking a little below that today? And you mentioned improving the CD and funding mix. But do you see a big opportunity for the loan back book repricing up to be an opportunity for margin expansion?

只是為了遵循上一個問題的線索，也許只是為了擴展您對核心利潤率前進軌蹟的想法。我想過去你說過核心穩定在2.85%到2.90%。當我們今天追蹤的價格略低於該水平時，這種情況仍然成立嗎？您提到了改進 CD 和資金組合。但您是否認為貸款返還帳簿重新定價有很大機會成為利潤擴張的機會？

I guess, I have to reset the core expectation a little bit because the 2.87% to 2.90% was Provident legacy standalone bank. If you remember back in March, Lakeland's margin was 2.46% versus Provident's 2.87%. So on a blended basis, the core margin has come in, pre-purchase accounting marks. So if you view it that way, I'd say the core piece would be about 2.70% to 2.75%, purchase accounting adjustments of about 65 to 75 basis points a quarter, that's where we get in that 3.35% to 3.45% range over the course of the rest of this year through 2025.

我想，我必須稍微重新設定核心預期，因為 2.87% 至 2.90% 是 Provident 遺留的獨立銀行。如果你還記得 3 月的情況，Lakeland 的利潤率為 2.46%，而 Provident 的利潤率為 2.87%。因此，在混合的基礎上，核心利潤已經進來，預購會計標記。因此，如果你這樣看，我想說核心部分約為 2.70% 至 2.75%，每季採購會計調整約為 65 至 75 個基點，這就是我們在 3.35% 至 3.45% 範圍內的情況。到2025 年的過程。

Got it. Thank you. That's helpful. And the 65 basis points of accretion from here through the end of 2025, that's all scheduled accretion. Is that correct?

知道了。謝謝。這很有幫助。從現在到 2025 年底，成長 65 個基點，這都是預定的成長。這是正確的嗎？

Yeah. I mean, a lot of it's level yield. So it could move a little bit with the cash flows, but that's our expectation.

是的。我的意思是，很多都是水平產量。因此，它可能會隨著現金流量的變化而略有變化，但這是我們的預期。

Understood. Okay, thanks. Just moving to a separate topic. You mentioned muni deposit flows had impact on reported growth this quarter. Can you just remind us of the timing of those flows, when does this typically flow back in?

明白了。好的，謝謝。只是轉移到一個單獨的主題。您提到市政存款流動對本季報告的成長產生了影響。您能否提醒我們這些流量的時間安排，通常何時回流？

Yeah. It goes with the real estate tax revenue largely. So we'll start to see the money come back in the beginning of August. So it's typical when we price it we consider that we have to fund the trough with short term overnight funding or weekly funding. It's all considered as part of the valuation of the profitability of the relationship.

是的。它很大程度上與房地產稅收入相關。因此，我們將在八月初開始看到資金回來。因此，當我們定價時，我們通常會考慮必須透過短期隔夜融資或每週融資來為低潮提供資金。這一切都被視為關係獲利能力評估的一部分。

Yeah. We're seeing that inflow start right now and it'll flow into the beginning of August.

是的。我們看到資金流入現在就開始，並將持續到八月初。

Great. Thank you. And then just my last question, just more broadly, I see a 4% to 5% in the back half of the year. Can you just maybe comment on how you're feeling about customer activity and sentiment in recent weeks? How they're feeling? What are they concerned about? It seems a lot of your peers have commented that they see growth materially moving up in the back half. Are you seeing similar sentiment? Thanks.

偉大的。謝謝。我的最後一個問題，更廣泛地說，我預計今年下半年會出現 4% 到 5% 的成長。您能否評論一下您對最近幾週的客戶活動和情緒的感受？他們感覺如何？他們關心什麼？似乎很多同行都評論說，他們看到後半段的成長大幅上升。您是否看到類似的情緒？謝謝。

Well, I think, as I mentioned, our pipeline's pull through is about $1 billion. Certainly, we're seeing some of the same things that our colleagues are seeing out in the industry. But we have an active pipeline.

嗯，我認為，正如我所提到的，我們的管道的收入約為 10 億美元。當然，我們看到的一些事情與我們的同事在行業中看到的情況相同。但我們有一個活躍的管道。

A lot of the growth reduction was -- some of it was contained by us, right? As we were getting our merger application done, a lot of folks are distracted, not that it's an excuse, into the portfolio management side and getting the CRE down, making sure that we had an understanding because of, obviously, the CRE overhang in the marketplace.

成長放緩的很大一部分是——其中一些是我們控制住的，對嗎？當我們完成合併申請時，很多人都分心了，這並不是藉口，他們進入了投資組合管理方面並把 CRE 搞下來，確保我們有一個理解，因為顯然，CRE 懸而未決市場。

So we did a lot of enhanced work, which took some of those distractions, and we let some runoff, as I mentioned. But the activity and the quality of what's in our pipeline remains strong. And from the conversations I have with our team, we're not going to make up for the 4% in the first half of the year, but we certainly can achieve 4%-ish to 5% and what we expect if we can get these things pulled through on the pipeline.

因此，我們做了很多強化工作，消除了一些幹擾，正如我所提到的，我們留出了一些徑流。但我們正在開發的產品的活動和品質仍然強勁。從我與我們團隊的對話來看，我們不會彌補上半年的 4％，但我們肯定可以實現 4％ 左右到 5％ 以及如果我們能夠獲得的預期這些事情都在管道中完成。

So the amount of volume is available to us to achieve that growth. It's just a matter of the teams getting it closed in the second half of the year. There is a possibility that some of this can run into the first quarter. But right now, we're not expecting that. I'm expecting that we can get that 4% in the second half of the year.

因此，我們可以利用數量來實現這一增長。這只是球隊在下半年完成比賽的問題。其中一些可能會持續到第一季。但現在，我們並不期待這一點。我預計下半年我們可以達到 4%。

Great. Thank you for taking my questions. I'll pass it back.

偉大的。感謝您回答我的問題。我會把它傳回來。

Sure. Thank you.

當然。謝謝。

Manuel Navas, from D.A. Davidson.

曼努埃爾·納瓦斯 (Manuel Navas)，來自 D.A.戴維森。

Hello, good morning. This is Sharanjit on for Manuel. Thank you for taking my question. I was wondering what is the current talent retention look like across the combined company?

你好早安。這是 Sharanjit 為 Manuel 所做的發言。感謝您回答我的問題。我想知道合併後的公司目前的人才保留如何？

Talent retention? Great question. I think the talent retention across the company is exceptional. I think there hasn't been any major surprises. You're always going to have one-offs for people advancing their career or moving something.

留住人才？很好的問題。我認為整個公司的人才保留非常出色。我認為沒有什麼大的驚喜。對於那些想要提升職業生涯或搬家的人來說，總是會有一些一次性的事情。

But the way I would characterize this is that the executive teams and the senior management teams are working very well together and collaboratively. Cultures are fusing nicely. And as a byproduct of that, there is no subterfuge or an environment that's toxic. And people enjoy being here.

但我對此的描述是，執行團隊和高階管理團隊合作得很好。文化正在很好地融合。作為其副產品，不存在任何詭計或有毒的環境。人們喜歡待在這裡。

I think our retention rates are really high. And more importantly -- or not more importantly, as importantly, our continued attraction of new talent is pretty robust. So I'm feeling really strong about the culture and our ability to attract and retain talent.

我認為我們的保留率非常高。更重要的是——或者更重要的是，同樣重要的是，我們對新人才的持續吸引力非常強勁。因此，我對我們的文化以及我們吸引和留住人才的能力感到非常強烈。

That's great to hear. Thanks again for taking the question.

很高興聽到這個消息。再次感謝您提出問題。

Thank you.

謝謝。

And that concludes our Q&A session. So with that, I would like to turn the call back over to Tony Labozzetta for closing comments. Tony, the floor is yours.

我們的問答環節到此結束。因此，我想將電話轉回托尼·拉博澤塔 (Tony Labozzetta) 以徵求結束意見。東尼，地板是你的。

Thank you, everyone, for your questions and for joining the call. We look forward to speaking to you all again next time. Have a great weekend and enjoy your summer. Thank you.

謝謝大家提出問題並加入電話會議。我們期待下次再次與大家交談。祝你周末愉快，享受你的夏天。謝謝。

And ladies and gentlemen, that concludes today's call. Thank you, all, for joining, and you may now disconnect.

女士們、先生們，今天的電話會議到此結束。謝謝大家的加入，現在可以斷開連線了。