WSFS Financial Corp (WSFS) 2024 Q2 法說會逐字稿

Thank you for standing by. At this time, I would like to welcome everyone to today's Wilmington Savings Fund Society Financial Corporation second-quarter earnings call. (Operator Instructions) I'd now like to turn the call over to your host for today, Mr. Art Bacci, Chief Wealth Officer and Interim Chief Financial Officer. Sir, you may begin.

謝謝你的支持。此時此刻，我謹歡迎大家參加今天的威明頓儲蓄基金協會金融公司第二季財報電話會議。（操作員指示）我現在想將電話轉給今天的主持人，首席財富官兼臨時首席財務官 Art Bacci 先生。先生，您可以開始了。

Good morning or good afternoon, and thank you for joining our second-quarter 2024 earnings call. Our earnings release and earnings release supplement, which we will refer to on today's call, can be found in the Investor Relations section of our company website. With me on this call are Rodger Levenson, Chairman, President, and CEO; Steve Clark, Chief Commercial Banking Officer; and Shari Kruzinski, Chief Consumer Banking Officer.

早安或下午好，感謝您參加我們的 2024 年第二季財報電話會議。我們將在今天的電話會議上提及我們的收益發布和收益發布補充，可以在我們公司網站的投資者關係部分找到。與我一起參加本次電話會議的還有董事長、總裁兼執行長 Rodger Levenson；史蒂夫‧克拉克 (Steve Clark)，首席商業銀行官；和首席消費銀行官 Shari Kruzinski。

Before I turn the call over to Rodger and for his remarks on the quarter, I would like to read our Safe Harbor statement. Our discussion today will include information about our management's view of the future expectations, plans, and prospects that constitute forward-looking statements.

在我將電話轉給羅傑並聽取他對本季度的評論之前，我想閱讀我們的安全港聲明。我們今天的討論將包括有關我們管理層對構成前瞻性陳述的未來預期、計劃和前景的看法的資訊。

Actual results may differ materially from historical results or those indicated by those forward-looking statements due to risks and uncertainties including, but not limited to, the risk factors included in our annual report on Form 10-K and our most recent quarterly reports on Form 10-Q, as well as other documents we periodically file with the Securities and Exchange Commission. All comments made during today's call are subject to the Safe Harbor statement. I will now turn the call over to Rodger.

由於風險和不確定性，實際結果可能與歷史結果或前瞻性陳述所示的結果有重大差異，這些風險和不確定性包括但不限於我們10-K 表格年度報告和10-K 表格最新季度報告中包含的風險因素10-Q 以及我們定期向美國證券交易委員會提交的其他文件。今天電話會議期間發表的所有評論均須遵守安全港聲明。我現在將把電話轉給羅傑。

Thank you, Art, and everyone else for joining us on the call today. During the second quarter, WSFS continued to demonstrate the strength of our franchise and diverse business model. Results included a core earnings per share of $1.08, core return on assets of 1.25%, and core return on tangible common equity of 18.83%.

感謝 Art 和其他所有人今天加入我們的電話會議。第二季度，WSFS 繼續展示我們的特許經營和多元化業務模式的實力。績效包括每股核心收益 1.08 美元、核心資產回報率為 1.25%、核心有形普通股回報率為 18.83%。

Core fee revenue of $86 million was up 13% linked quarter and 28% year over year, driven by growth across all major fee businesses. Wealth management fee revenue grew 14% linked quarter and 16% over the second quarter of 2023, driven by strong results in WSFS institutional services, higher activity at Bryn Mawr Trust Company of Delaware, and seasonal fees for tax services.

在所有主要收費業務成長的推動下，核心費用收入為 8,600 萬美元，較上季成長 13%，較去年同期成長 28%。由於 WSFS 機構服務的強勁業績、特拉華州 Bryn Mawr Trust Company 的活躍度以及稅務服務的季節性費用，財富管理費收入環比增長 14%，較 2023 年第二季度增長 16%。

Cash Connect has added nearly 8,000 service non-bank ATMs since the third quarter of 2023 by gaining market share from the previously discussed exit of a large industry participant. This, combined with the optimization of its unit and funding mix increased Cash Connect's ROA to 1.72% in the second quarter.

自 2023 年第三季以來，Cash Connect 透過從先前討論的大型產業參與者退出中獲得市場份額，已增加了近 8,000 台非銀行 ATM 服務。再加上其部門和融資組合的優化，第二季 Cash Connect 的 ROA 提高至 1.72%。

Our capital markets and mortgage businesses increased fee revenue by 13% and 35%, respectively, over the prior quarter due to increased activity. In addition, we saw growth in both loans and deposits, which increased 6% and 3%, respectively, on an annualized basis.

由於活動增加，我們的資本市場和抵押貸款業務的費用收入比上一季分別成長了 13% 和 35%。此外，貸款和存款均出現成長，以年化計算分別成長 6% 和 3%。

The core net interest margin was 3.85% for the quarter. The higher income from our continued loan growth and redeployment of cash flows from the securities portfolio offset the increase in our cost of funds resulting from the current interest rate environment and high retention in our maturing CD portfolio as outlined in the release.

該季度核心淨利差為3.85%。我們持續的貸款成長和證券投資組合現金流的重新部署帶來的更高收入抵消了由於當前利率環境和我們到期的定期存款投資組合的高保留率而導致的資金成本的增加。

Asset quality remained stable. NPAs declined to 32 basis points of total assets, while delinquencies dropped to 13 basis points. Problem loans increased primarily due to the downgrades of three C&I loans. Net charge-offs for the quarter were 44 basis points or 17 basis points, excluding Upstart and leasing portfolios, in line with net charge-off levels over the past year.

資產品質保持穩定。不良資產佔總資產的比例下降至 32 個基點，而拖欠率則下降至 13 個基點。問題貸款增加主要是因為三筆工商業貸款評級被下調。本季的淨沖銷為 44 個基點或 17 個基點（不包括 Upstart 和租賃投資組合），與去年的淨沖銷水準一致。

During the quarter, we returned $48.7 million or approximately 70% of earnings to shareholders in the form of $9 million in dividends and $39.7 million from a mix of routine and incremental stock buybacks. We continue to have substantial capital levels above the well-capitalized regulatory benchmarks, including the full impact of AOCI.

本季度，我們以 900 萬美元股息的形式向股東返還了 4,870 萬美元（約佔收益的 70%），並透過常規和增量股票回購組合返還了 3,970 萬美元。我們的資本水準持續高於資本充足的監管基準，包括 AOCI 的全面影響。

Despite the economic uncertainty, WSFS continued to grow and deliver a strong first half of 2024. We remain well positioned to execute our strategy and produce sustainable top quintile financial performance. Just as importantly, the strength in our earnings, liquidity, and capital positions provides us a cushion to absorb any unexpected changes we might face going forward. I will now turn it over to Art to update you on our midyear outlook.

儘管經濟存在不確定性，WSFS 仍持續成長，並在 2024 年上半年實現強勁成長。我們仍然有能力執行我們的策略並實現可持續的前五分之一的財務表現。同樣重要的是，我們的獲利、流動性和資本狀況的實力為我們提供了緩衝，以應對未來可能面臨的任何意外變化。現在我將把它交給 Art，向您介紹我們的年中展望的最新情況。

Thank you, Rodger. We are tracking above the full-year outlook communicated in January with first half core ROA of 1.28% or EPS of $2.19 and core ROTCE of 19.01%. As we look to the second half of 2024, we remain well positioned to execute our strategy and deliver top quintile financial performance with a full year core ROA of around 1.25%.

謝謝你，羅傑。我們的追蹤高於 1 月傳達的全年展望，上半年核心 ROA 為 1.28%，每股收益為 2.19 美元，核心 ROTCE 為 19.01%。展望 2024 年下半年，我們仍處於有利地位，能夠執行我們的策略並實現前五分之一的財務業績，全年核心 ROA 約為 1.25%。

The underlying components of our midyear outlook remain relatively unchanged from our January outlook. I will highlight several items. We continue to assume no interest rate cuts in 2024. While the Fed has made indications to reduce rates, we have found it best to use a no-cut scenario as a baseline for our business.

我們年中展望的基本組成部分與 1 月展望相比保持相對不變。我將重點介紹幾項。我們繼續假設 2024 年不會降息。儘管聯準會已表示要降息，但我們發現最好使用不降息情境作為我們業務的基準。

Our analysis shows that a 25 basis point reduction or, alternatively, an increase would have a full-year annualized impact of 3 basis points to ROA. Assuming any rate cuts would occur later this year, it would not materially impact our full-year performance.

我們的分析顯示，減少 25 個基點或增加 25 個基點將對 ROA 產生 3 個基點的全年年化影響。假設今年稍後發生任何降息，這不會對我們的全年業績產生重大影響。

Deposit growth is projected to be flat year over year, primarily due to competitive pressures as well as the natural volatility and seasonality of trust and certain commercial deposits. We expect our interest-bearing deposit beta to be less than 55% compared to the previously communicated 50%. The higher beta is due to the continued shift in deposit mix, repricing of CDs in the competitive marketplace pricing.

預計存款成長將同比持平，這主要是由於競爭壓力以及信託和某些商業存款的自然波動性和季節性。與先前公佈的 50% 相比，我們預計帶息存款貝塔係數將低於 55%。較高的貝塔值是由於存款組合的持續變化以及競爭性市場定價中 CD 的重新定價。

Our loan-to-deposit ratio is forecasted to end the year at 83%. Net charge-offs of 30 basis points, excluding Upstart and NewLane, reflect potential weakness in a small group of problem loans where we are actively working with the borrowers in this continued softening economy.

我們的貸存比預計到年底將達到 83%。淨沖銷 30 個基點（不包括 Upstart 和 NewLane）反映出一小部分問題貸款的潛在疲軟，在經濟持續疲軟的情況下，我們正在積極與借款人合作。

Finally, I would reiterate our long-term commitment to return approximately 35% of our net income in the form of dividends and routine stock buybacks. Any incremental stock repurchases would be determined by the economic environment, our financial results, and we need to be in line with our historic buyback framework. Thank you, and we will now open the line for questions.

最後，我要重申我們的長期承諾，以股息和例行股票回購的形式返還約 35% 的淨利潤。任何增量股票回購都將取決於經濟環境、我們的財務業績，並且我們需要符合我們的歷史回購框架。謝謝您，我們現在將開通提問專線。

(Operator Instructions) Russell Gunther, Stephens Inc.

（操作員說明）Russell Gunther，Stephens Inc.

Hey, guys. Good afternoon.

嘿，夥計們。午安.

Hey, Russell.

嘿，拉塞爾。

I wanted to first ask, if I could, on the fee outlook and, more specifically, development fees. Can you guys give us a sense for where they shook out this quarter and what we should expect for the back half of the year?

如果可以的話，我想先詢問費用前景，更具體地說，是開發費用。你們能為我們介紹一下他們本季的表現以及我們對下半年的預期嗎？

Sure, Russell. I think fee income still -- I'll break it up into the divisions that we have. I think the mortgage and capital markets, we're continuing to see good activity levels going into July. I will caution that sometimes, in August, September, the summer months tend to slow down. But at this point, we're seeing really good activity there.

當然，拉塞爾。我認為費用收入仍然存在——我會將其分成我們現有的部門。我認為抵押貸款和資本市場進入七月我們將繼續看到良好的活動水平。我要提醒的是，有時，在八月、九月，夏季的幾個月往往會放緩。但目前，我們看到那裡的活動非常好。

Wealth, the same thing, we've got some really nice pipeline potential wins here in the third quarter, which would help in the activity level at our Delaware Trust Company. Our Bryn Mawr Trust Company of Delaware's -- remains pretty elevated as well as our institutional trust services are seeing really good volumes in July.

財富，同樣的事情，我們在第三季度獲得了一些非常好的管道潛在勝利，這將有助於提高我們特拉華信託公司的活動水平。我們特拉華州的 Bryn Mawr 信託公司的業績仍然相當高，我們的機構信託服務在 7 月的交易量也非常可觀。

Cash Connect, I would expect somewhat of a slowdown in the growth of the revenue there. We have pretty much onboarded all the new ATMs that came over from the other player. So the 8,000 ATMs Rodger referred to is pretty much it. So I would see that returning to more of a normal growth rate in the second half of the year.

Cash Connect，我預計那裡的收入成長會有所放緩。我們幾乎已經安裝了其他玩家提供的所有新 ATM 機。所以羅傑提到的 8,000 台 ATM 就差不多了。因此，我認為下半年成長率將恢復到正常水平。

Okay. Thank you for that. And then, maybe switching gears a second on to expenses, so, appreciate the overall guide and the efficiency ratio target. Could you guys just maybe walk through the step-up in the salary benefits line this quarter, and then similarly, just broad stroke expectations for that trend in the back half of the year?

好的。謝謝你。然後，也許再切換一下費用，所以，欣賞整體指南和效率比目標。你們能否簡單介紹一下本季薪資福利線的提高，然後類似地，對今年下半年的這一趨勢進行大致的預期？

Sure. On the salary line, recall that we reversed about $3.2 million in the first quarter because we paid out incentives that were less than targeted in -- for 2023. But we had accrued that target, so we had to reverse those per GAAP. What you'll see is, this quarter, when you look at the gross increase, it's coming off artificially low first quarter because of that reversal. So the net increase is more like 4% quarter over quarter.

當然。在薪資方面，我們在第一季沖銷了約 320 萬美元，因為我們支付的激勵金額低於 2023 年的目標。但我們已經實現了這個目標，所以我們必須根據公認會計原則扭轉這些目標。你會看到，本季度，當你觀察總成長時，會發現由於這種逆轉，第一季的總成長被人為地拉低了。因此，季度環比淨成長率約為 4%。

Now, probably half of that is really the Cash Connect external funding that, as we transition those 8,000 accounts, we used more external funding than internal funding in that process. The other thing is, we've just had merit increases in the first quarter, and it was late in the first quarter that we processed merit increases.

現在，其中可能有一半實際上是 Cash Connect 外部資金，當我們過渡這 8,000 個帳戶時，我們在過程中使用的外部資金多於內部資金。另一件事是，我們在第一季剛剛進行了績效加薪，而我們在第一季末才處理了績效加薪。

o we've now got a full year -- or a full quarter of those increases, we've continued to invest in the business and hiring people. And we will look to kind of continue the run rate probably a little bit higher on incentive accruals for the second half of the year because we are running above target, and so we'll have to start accruing for that.

o 我們現在已經有一整年——或者說整整一個季​​度的成長，我們將繼續投資於業務和招募人員。我們將尋求在下半年繼續提高應計激勵的運行率，因為我們的運行速度高於目標，因此我們必須開始為此進行累積。

So those are kind of really the drivers. We also did -- just to highlight, we did have an elevated medical -- we called it medical benefits, but there's some claims, medical claims from our associates, it's a small portion of the population that had higher-than-average claims. We can't get into the reason, but that kind of drove a little bit higher expense this quarter. We don't think that that will continue.

所以這些才是真正的驅動因素。我們也這樣做了——只是為了強調，我們確實有較高的醫療——我們稱之為醫療福利，但有一些索賠，來自我們同事的醫療索賠，只有一小部分人口的索賠高於平均水平。我們無法解釋原因，但這導致本季的費用略有上升。我們認為這種情況不會持續下去。

Okay, all right. I appreciate it. And then I guess just to follow up in terms of -- with the Cash Connect and the onboarding of the ATMs, the use of external versus internal funding, how should we extrapolate that from an expense perspective next -- for the next couple of quarters?

好吧，好吧。我很感激。然後我想只是為了跟進 - 隨著現金連接和自動櫃員機的加入，外部資金與內部資金的使用，我們應該如何從費用角度推斷接下來的幾個季度？

I think you'll see that come down from an expense perspective slightly. We are targeting to have roughly 75% of that funding done with external partners and 25% internally. So that, coming from a much higher level of external funding in the first half of the year. So that should help on there. Obviously, that will also impact our ROA. The $170 million we saw in the second quarter would probably drop more to like a $130 million, $140 million as we've used more of our own cash to fund the ATMs.

我想你會發現從費用角度來看，這會略有下降。我們的目標是大約 75% 的資金來自外部合作夥伴，25% 的資金來自內部。因此，上半年的外部資金水準要高得多。所以這應該會有所幫助。顯然，這也會影響我們的 ROA。我們在第二季度看到的 1.7 億美元可能會下降到 1.3 億美元、1.4 億美元，因為我們使用了更多的自有現金來為 ATM 機提供資金。

Okay, that's very helpful. Thank you, Art. And then, guys, last one for me would just be on the net charge-off expectations. Those are unchanged and implies the second half of the year steps up a bit. I'm just curious as to what you're seeing or expecting that would drive that.

好的，這非常有幫助。謝謝你，藝術。然後，夥計們，對我來說最後一項就是淨沖銷預期。這些沒有變化，意味著下半年會增加。我只是好奇你所看到或期望的是什麼會推動這一點。

Russell, this is Rodger. I'd say, as Art outlined in his comments, we saw a little bit of an increase in our problem loans and there are some situations we're monitoring closely. And so, we feel as though the outlook reflects potential losses depending upon how those work out.

拉塞爾，這是羅傑。我想說，正如阿特在評論中概述的那樣，我們看到問題貸款增加，我們正在密切監視某些情況。因此，我們認為前景反映了潛在的損失，這取決於這些損失的結果。

Got it. Okay, very good, guys. Thank you very much for taking my questions.

知道了。好的，非常好，夥計們。非常感謝您回答我的問題。

Thanks, Russell.

謝謝，拉塞爾。

Manuel Navas, D.A. Davidson.

曼努埃爾·納瓦斯，D.A.戴維森。

Hey, how does the exit NIM in 4Q, kind of that range shift, if we do have a September rate cut?

嘿，如果我們確實在 9 月降息，那麼第四季度的退出淨利差（NIM）會如何變化？

Manuel, I think the rate cut is happening late in the year as we've kind of projected. We probably would see, on a full-year basis, about a 1.5% impact on NII. What that would translate into NIM is probably about 5 bps of lower NIM going in as an exit rate, if rates were to be cut later in the quarter.

曼努埃爾，我認為降息將在今年晚些時候發生，正如我們所預期的那樣。我們可能會看到，在全年基礎上，NII 受到約 1.5% 的影響。如果在本季度稍後降息，這將轉化為淨息差（NIM）的結果可能是，作為退出率，淨息差（NIM）下降約 5 個基點。

Okay, that's similar to what you said in the past. So I appreciate that. How is the 55% deposit beta expectation kind of arrived at? Are you seeing increased competition? Is it just where the -- we're sustaining this higher rate for longer? Just -- can you kind of give some extra thoughts on that projection?

好吧，這和你之前說的很像。所以我很欣賞這一點。55% 的存款貝塔預期是如何得出的？您是否看到競爭加劇？我們是否能更長時間地維持這種較高的利率？只是——你能對這個預測給一些額外的想法嗎？

I'll let Shari talk about the competitive environment on the consumer side. I think the other thing we've looked at really closely is just our back book on the CD side. And as we've been able to retain a higher percentage of those CDs, as they mature, but they're coming off a lower price. And as they mature and reprice, they are being renewed at higher rates. Shari, do you want to cover some of the competitive --?

我讓Shari談談消費者方面的競爭環境。我認為我們仔細研究過的另一件事就是我們在 CD 方面的舊書。隨著這些 CD 的成熟，我們能夠保留更高比例的 CD，但它們的價格會更低。隨著它們的成熟和重新定價，它們的更新率也會更高。Shari，你想報導一些競爭的內容嗎？——？

Sure. Hi, Manuel. This is Shari. I would say that the competitive landscape that would have eased the bid, it's still something that we're monitoring very closely and certainly very focused on protecting our customer base. So again, as Art said, we see, as the CDs mature, we do have some specials available for customers based on the current rate environment that they're taking advantage of. And so, most of that is being driven by our success really retaining those clients.

當然。嗨，曼努埃爾。這是莎麗。我想說的是，競爭格局會放寬出價，但我們仍然在密切監控，並且非常注重保護我們的客戶群。因此，正如 Art 所說，我們看到，隨著 CD 的成熟，我們確實根據客戶所利用的當前費率環境為他們提供了一些特價產品。因此，這大部分是由我們真正留住這些客戶的成功所推動的。

And then, I'd also add that about 65%, 70% of our money market accounts are exception-priced, right? And that's usually in reaction to the competitive environment.

然後，我還要補充一點，我們大約 65%、70% 的貨幣市場帳戶都是異常定價的，對吧？這通常是對競爭環境的反應。

That's really helpful. Can I circle back to your long-term commitment to that 35% of net income return as buybacks? You had a really strong amount of buybacks this past quarter. Pricing has moved higher. Can you just talk a little bit about thoughts with that?

這真的很有幫助。我可以回顧一下你們對 35% 淨利潤回報作為回購的長期承諾嗎？上個季度您進行了大量回購。定價已經走高。您能談談對此的想法嗎？

And then, buyback is a huge tool for keeping ROE up. And you're about to enter another three-year planning process. I think ROE is where you stand out, and just kind of thoughts on where buyback fits in on maintaining ROEs high?

然後，回購是維持股本回報率的重要工具。您即將進入另一個為期三年的規劃過程。我認為股本回報率是你們脫穎而出的地方，你想知道回購在維持高股本回報率方面有何作用？

Yeah, Manuel, I mean, our philosophy hasn't changed about the 35% that we will continue to do routine dividends and stock buybacks as we've had in the past. Clearly, anything incremental will have to be driven by what we're seeing in terms of our own financial results, the economy, and more importantly, our historic framework where we generally target the 16% IRR on our incremental buyback.

是的，曼努埃爾，我的意思是，我們的理念沒有改變，即 35%，我們將繼續像過去一樣進行例行股息和股票回購。顯然，任何增量都必須由我們所看到的我們自己的財務業績、經濟，更重要的是，我們的歷史框架所驅動，在該框架中，我們通常將增量回購的內部收益率設定為16%。

So we've been very disciplined about that. And clearly, in the second quarter, we saw some really nice opportunities, so we got aggressive in the buyback. The stock has appreciated materially here. So we would have to really look at our framework and determine if, longer term, we think there's still some changes in the underlying assumptions to get us to a 16% IRR if we're going to do incremental buybacks.

所以我們對此非常嚴格。顯然，在第二季度，我們看到了一些非常好的機會，因此我們在回購方面採取了積極的態度。該股票在這裡大幅升值。因此，我們必須真正審視我們的框架，並確定從長遠來看，如果我們要進行增量回購，我們認為基本假設是否仍需要一些變化才能使我們的 IRR 達到 16%。

Okay, I appreciate the commentary. I'll step back into the queue already.

好的，我很欣賞評論。我已經回到隊列了。

All right. Thanks, Manuel.

好的。謝謝，曼努埃爾。

Kelly Motta, Keefe, Bruyette & Woods.

凱利莫塔、基夫、布魯耶特和伍茲。

Hey, good morning. Thanks for the questions -- or afternoon rather. Where did they go? I was hoping to circle back to asset quality. I mean, everything looks really strong and came down. But I noticed the reserves built particularly on the investor CRE side. I was hoping to get additional color on the driver of that, and it's at 116 basis points now, comfort level there.

嘿，早安。謝謝你的提問——或者更確切地說是下午。他們去哪了？我希望回到資產品質。我的意思是，一切看起來都非常強勁，但最終都崩潰了。但我注意到，特別是在投資者 CRE 方面建立的儲備。我希望能在駕駛者身上獲得更多的色彩，現在是 116 個基點，舒適程度。

Hey, Kelly. It's Rodger. You recall, we've been talking about, for several quarters, this process that we have, a 24-month, roll-forward look at all maturing CRE loans over $2.5 million. And we -- sensitizing those for the current interest rate environment with no changes in their cash flow. And so based upon that analysis, every time we go through that, and we roll forward another quarter, we update the impact of that into our ACL model wherever we see potential weakness.

嘿，凱利。是羅傑。您還記得，我們​​幾個季度以來一直在討論這個流程，即對所有超過 250 萬美元的到期 CRE 貸款進行 24 個月的前滾審查。我們讓這些人對當前的利率環境保持敏感，而他們的現金流沒有改變。因此，根據該分析，每次我們經歷這一點，然後再向前滾動一個季度，我們就會將其影響更新到我們的 ACL 模型中，只要我們看到潛在的弱點。

So what you're seeing there is just reflecting the continued roll-forward of that project. It's a modest amount of reserves that they're increased there. You saw we also continue to increase in the office sector of CRE. And so, that's really what's driving that build in the CRE overall.

所以你所看到的只是反映了該專案的持續推進。他們在那裡增加了少量的儲備。你看到我們也在繼續增加華創的辦公室領域。因此，這確實是推動 CRE 整體建設的因素。

Got it. Thank you so much. Last question from me, I apologize if this was covered already. I joined a little bit late. But with the revised deposit growth guidance being flat for the year, is the right way to think of the balance sheet from here just kind of steady as cash flows are redeployed into loans or any kind of puts or takes that you could help us out with in terms of that with putting together with the margin guide? Thanks.

知道了。太感謝了。我的最後一個問題，如果已經涵蓋了這個問題，我深表歉意。我加入的有點晚了。但是，由於今年修訂後的存款成長指引持平，因此從現在開始考慮資產負債表是穩定的，因為現金流被重新部署到貸款或任何類型的看跌或看跌期權中，您可以幫助我們擺脫困境就與邊距指南放在一起而言？謝謝。

Kelly, this is Art. I would absolutely say that the balance sheet should be pretty steady. I don't see a lot of material change in the size of the balance sheet. I would tell you that, part of the flat in deposits, we really ended the end of 2023 with an elevated level of deposits coming from our institutional trust business and some commercial business.

凱利，這是藝術。我絕對會說資產負債表應該相當穩定。我沒有看到資產負債表的規模有很大的變化。我想告訴你的是，作為存款持平的一部分，我們確實在 2023 年底結束時來自機構信託業務和一些商業業務的存款水平有所上升。

And that put a lot of extra cash on our balance sheet that we were able to deploy in Fed funds. We're probably down cash, $250 million quarter over quarter on an average basis. So that impacts II, but it doesn't really impact the NIM. But bottom line, the overall balance sheet really won't change much.

這使得我們的資產負債表上有了大量額外的現金，我們可以將這些現金部署到聯邦基金中。我們可能會減少現金，平均每季季減 2.5 億美元。所以這會影響 II，但不會真正影響 NIM。但最重要的是，整體資產負債表確實不會有太大變動。

Thank you so much.

太感謝了。

(Operator Instructions) Frank Schiraldi, Piper Sandler.

（操作說明）Frank Schiraldi、Piper Sandler。

Hey, guys. Just curious, are you doing anything balance sheet-wise, naturally or synthetically here that you would expect that 3 basis point impact from a given 25 bps in rate cuts, see that move at all lower or is that just kind of an acceptable asset sensitivity of the business here?

嘿，夥計們。只是好奇，您是否在資產負債表方面做了任何自然或綜合的事情，您預計降息25 個基點會產生3 個基點的影響，看看這一舉措是否會降低，或者這只是一種可接受的資產敏感性這裡的生意怎麼樣？

Frank, I would just highlight that when you look at our loan portfolio and you look at the Spring EQ portfolio, some of our consumer loans, about 50% of our loan book is fixed rate. And we feel pretty balanced right now that, regardless of whether rates go up or down 25 basis points, it has the same impact in both directions. We did put on -- we have put on about $1.2 billion of hedges and we are authorized to do another $300 million -- yeah, and so, to protect on the downside.

弗蘭克，我想強調的是，當你看看我們的貸款組合和 Spring EQ 組合時，我們的一些消費貸款，我們的貸款帳簿中大約 50% 是固定利率。我們現在感覺很平衡，無論利率上升或下降 25 個基點，它在兩個方向上都有相同的影響。我們確實進行了大約 12 億美元的對沖，我們被授權再進行 3 億美元的對沖，是的，所以，為了防止下行風險。

And I'd also just kind of remind everyone that we've been through these rate cycles and we continue to produce top-quintile NIM regardless of whether rates are higher or lower. And so, we want to make sure we're not over-insuring against down rates because, as we've seen over the last few years, all the rate projections have tended to be wrong. And there's still potential that rates could go up at some point. So we feel very comfortable having that balance where we're protected on both sides.

我也想提醒大家，我們已經經歷了這些利率週期，無論利率是更高或更低，我們都會繼續產生前五分之一的淨利差。因此，我們希望確保我們不會對利率下調進行過度保險，因為正如我們在過去幾年中所看到的，所有利率預測往往都是錯誤的。而且利率仍有可能在某個時候上升。因此，我們對雙方都受到保護的平衡感到非常滿意。

Okay. Got you. And then on -- Art, you mentioned on the Cash Connect, you've kind of built in that large piece of business that you added in terms of increasing shares in run rate at this point, so talked about more normal growth rate. Is that high single digits here? And do you see further sort of chunky opportunity to pick up significant market share or is it more just maybe onesie, twosie from here?

好的。明白你了。然後，藝術，你在現金連接上提到，你已經建立了一個大的業務，你在這一點上增加了運行率的份額，所以談到了更正常的增長率。這裡有這麼高的個位數嗎？您是否看到了進一步獲得重要市場份額的巨大機會，或者從這裡開始可能只是連身衣、雙人衣？

Yeah, I think, it's the latter, Frank. And I don't know if it'd be high single digits. I think we did have a nice win this quarter with one client where they gave back a fair number of ATMs that we were just doing reconciliation work, and we got back about half the number of ATMs.

是的，我想，是後者，法蘭克。我不知道它是否會是高個位數。我認為本季我們確實與一位客戶取得了不錯的勝利，他們歸還了相當數量的 ATM，而我們只是在做對賬工作，而我們歸還了大約一半的 ATM。

But it was more full bailment services, and that bailment services are three times more profitable for us than just pure reconciliation. So if we could do those kind of things and it wouldn't really increase the number, but deeper services at better profit margins, we would certainly do those types of things all day long.

但這是更全面的寄託服務，對我們來說，寄託服務的利潤是純粹對帳服務的三倍。因此，如果我們能夠做這些事情，並且不會真正增加數量，而是以更好的利潤率提供更深入的服務，那麼我們肯定會整天做這些類型的事情。

Great. And then if I could just sneak in a quick one, sorry if I missed it, but in terms of the three C&I downgrades that led to the increase in problem assets, any common thread there?

偉大的。然後，如果我能快速介紹一下，抱歉，如果我錯過了，但就導致問題資產增加的三項 C&I 降級而言，有什麼共同點嗎？

Hey, Frank, this is Steve. There really is no common thread. The three C&I customers were in three different geographies in three different industries: one, a cultural institution in Center City Philly that is going through a repositioning of its business; logistics fulfillment trucking company up in the Lehigh Valley, Allenham-Bethlehem area that had some softness in the fourth quarter of last year and first quarter of this year; and then a newly built hotel property in Ocean City, Maryland. That has been slow to stabilize. So all good customers, all performing loans, no real related causes, so totally distinct geographically and industry-wide.

嘿，弗蘭克，這是史蒂夫。確實沒有共同點。這三位工商業客戶分佈在三個不同的地區、三個不同的行業：一是位於費城中心城區的一家文化機構，正在對其業務進行重新定位；二是位於費城的一家文化機構。位於Lehigh Valley、Allenham-Bethlehem地區的物流履行卡車運輸公司去年第四季和今年第一季出現了一些疲軟；然後是馬裡蘭州大洋城新建的飯店。這種情況一直很緩慢地穩定下來。因此，所有良好的客戶，所有良好的貸款，沒有真正的相關原因，因此在地理和行業範圍內完全不同。

Okay. All right, thanks for the color. Appreciate it.

好的。好的，謝謝你的顏色。欣賞它。

Jake Civiello, Janney Montgomery Scott.

傑克·西維洛，珍妮·蒙哥馬利·斯科特。

Great, good afternoon, everyone. Just one additional question from me, is there any change in your appetite at all to consider recognizing a loss on the AFS securities portfolio to more quickly get to that 18% to 20% ratio of securities to assets target?

太好了，大家下午好。我還有一個問題，您是否願意考慮承認 AFS 證券投資組合的損失，以更快地實現證券與資產比率 18% 至 20% 的目標？

Jake, we'll look at transactions, but we continue not to see anything that really pencils out for us that makes sense. And we continue to see very consistent cash flow coming off that portfolio. We're able to deploy it in new originations that have a mid-seven handle kind of yield. And we think that's just the best approach to go and continue to let that cash flow get redeployed naturally. If rates drop, maybe we'd take another look at that. But at this point, no, there's no real plans to restructure the portfolio.

傑克，我們會關注交易，但我們仍然看不到任何真正對我們有意義的東西。我們繼續看到該投資組合的現金流非常穩定。我們能夠將其部署在具有中七手柄產量的新來源中。我們認為這只是繼續讓現金流自然重新部署的最佳方法。如果利率下降，也許我們會再考慮一下。但目前還沒有重組投資組合的真正計畫。

Okay, great. Thank you.

好的，太好了。謝謝。

Manuel Navas, D.A. Davidson.

曼努埃爾·納瓦斯，D.A.戴維森。

Hey, I just wanted to hop on and see if there's anything going on in the commercial loan pipeline. Are you seeing any changes based on rate forecasts or borrowers getting more excited or less excited? Just kind of thoughts there in context of your mid-single-digit loan growth rate.

嘿，我只是想上去看看商業貸款管道是否有任何進展。您是否看到利率預測發生任何變化或借款人變得更加興奮或不那麼興奮？只是在中等個位數的貸款成長率的背景下的一些想法。

Yeah, Manuel, Steve again. So our 90-day weighted average pipeline is actually down to a little over $200 million, which is as low as it's been in several quarters. And that is, really, a reflection of the strong closings we had in the first half of the year.

是的，曼努埃爾，又是史蒂夫。因此，我們的 90 天加權平均管道實際上已降至 2 億美元多一點，這是幾個季度以來的最低水準。這實際上反映了我們今年上半年的強勁成交量。

Having said that, we still remain very optimistic about that mid-single-digit growth for the full year. We have significant opportunities in the early stage of our process and believe they'll pull through at our normal pull-through rate, so sitting here today, looking at the second half of the year, still comfortable with our full-year forecast.

話雖如此，我們仍然對全年中個位數的成長保持非常樂觀的態度。我們在流程的早期階段擁有重大機會，並相信它們會以我們正常的拉動率實現，所以今天坐在這裡，展望今年下半年，仍然對我們的全年預測感到滿意。

And are those kind of pricing in that 7.5% yield range? Is that kind of the right new loan origination yields?

這些定價是否在 7.5% 的收益率範圍內？這是正確的新貸款發放收益率嗎？

Yeah, so looking at our activity through June for all commercial loans funded over $250,000, our yield in January for that population was 7.2%, and we came out of June for the month of June, 7.8%. So we -- as Art mentioned, that securities portfolio amortizing down and being redeployed definitely, we're in that mid- to high 7% yield range.

是的，所以看看我們截至 6 月份的所有超過 25 萬美元商業貸款的活動，我們 1 月份針對該人群的收益率為 7.2%，6 月份的收益率為 7.8%。因此，正如 Art 所提到的，證券投資組合肯定會攤銷並重新部署，我們處於 7% 的中高收益率範圍。

Thank you. I appreciate that commentary.

謝謝。我很欣賞這個評論。

All right. Thank you, Manuel. And with no further questions in queue, I would like to turn the conference back over to Mr. Bacci. Art, the floor is yours.

好的。謝謝你，曼努埃爾。由於沒有其他問題了，我想將會議重新交給巴奇先生。藝術，地板是你的。

Thank you for joining the call today. If you have any specific follow-up questions, feel free to reach out to Andrew. Rodger and I will be attending conferences and investor meetings throughout the quarter and we look forward to meeting with many of you. Have a good day.

感謝您今天加入通話。如果您有任何具體的後續問題，請隨時聯繫安德魯。羅傑和我將在整個季度參加會議和投資者會議，我們期待與你們中的許多人會面。祝你有美好的一天。

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。感謝大家的加入，現在可以斷開連線了。