Jerry Plush: Yeah. No. Thank you, Michael. I would respond by saying again we have the right executive leadership in place, we’ve got the physical distribution the vast majority. Yes, we’ll do some additions here and there, but it won’t be anywhere near as significant in terms of the amount of different retail facilities and regional hubs I just went over, also having the conversion behind us. I think it’s safe to say that in terms of trying to shake out, is there anything else on the non-routine side. We certainly believe that our best days are ahead. It’s going to be all about executing our plan. We think we’ve got the right people. We think we’re adding even more quality people and that’s all going to drive incremental growth and profitability. So we’re excited. I think that it’s been quite a journey here and I do think it’s important to say that we really do believe our of this transformation phase, we’ve got to go full steam ahead on our growth and just execute.
Michael Rose: All right. Thanks for all the color. I’ll step back.
Jerry Plush: Thank you.
Sharymar Calderon: Thank you, Mike.
Operator: Thank you. Our next questions come from the line of Feddie Strickland with Janney Montgomery Scott. Please proceed with your questions.
Feddie Strickland: Hey, good morning, everybody.
Jerry Plush: Good morning, Feddie.
Sharymar Calderon: Good morning.
Feddie Strickland: Just wanted to step back to the expense discussion again, real quick. Just trying to understand in the second half of the year as we get to that 60% efficiency. Is part of that, I guess our expenses flat from the second quarter or do they come back down just as some of these dual systems turning to single systems? I guess my question is as we go back towards like a $60 million level or do they just stay relatively flat in the back half of the year?
Sharymar Calderon: Yeah, we do expect that in the second half of the year, expenses will stay pretty flat to what we’ve seen earlier in the year. I think what you’re going to see in terms of the improvement on the efficiency ratio will be driven by the growth component.
Feddie Strickland: Got it. So, it will be on the revenue side. That makes sense. And then moving over to the charge-off piece, I think I heard you say that most of that this quarter was driven by the movement in the New York portfolio getting that one NPL out of there. Does that mean we should expect charge-offs to kind of step down a bit from here and primarily driven by the consumer portfolio than any other one-off items that might come up in the next couple of quarters?
Sharymar Calderon: Yeah, from a charge-off perspective, you’re right. The drivers of the charge-off this quarter were the New York nonperforming loan. And we also had some charge-offs related to the indirect consumer portfolio. We are not expecting a similar level of charge-offs coming from the New York portfolio in the next quarters.
Jerry Plush: Yeah. And, Feddie, to add to that, that’s why I gave those comments around the $217 million that’s left on the portfolio is 21 properties, 12 sponsors. It’s all performing. We’ve got a small credit that we’ve got on our watch list based on payment history. But I would tell you that in terms of the size issue, some of the issues that we’ve had, we’ve got it already either in NPA, right, because that’s the one big area that we still have, which by the way, just making a comment, we’re making a lot of progress there. We did get the permits to be able to open the accessibility on that one, I just think we’re in a little better place as it relates to what’s going to happen there and being able to get that thing moved hopefully here in 2024.
Feddie Strickland: That’s helpful. One last thing, just wanted to make sure I heard the NIM guide correct. I know it’s flat in the first half of the year in the 2024 outlook, but I think I heard you say that that was going to step down — step back down, actually the 3.50% to 3.60% range because of that little recovery piece. Did I write that down correctly?
Sharymar Calderon: Yes, we are expecting to stay within the 3.50% and 3.60% range in the first half of the year.
Jerry Plush: Yeah. Feddie, we think we hit the inflection point, right. I think if you now look at which originally we were thinking wouldn’t come until 2024, we obviously with a bunch of different moves we’ve may got there quicker. And that’s actually one of the real positives out of the fourth quarter.
Feddie Strickland: Got it. Well, that makes sense. I like what Michael said. It sounds like definitely have some profitability growth in the future. So, I’ll step back. Thanks for taking my questions.
Sharymar Calderon: Thank you.
Jerry Plush: Thanks, Feddie.
Operator: Thank you. Our next questions come from the line of Russell Gunther with Stephens. Please proceed with your questions.
Russell Gunther: Hey, good morning guys.
Sharymar Calderon: Good morning.
Jerry Plush: Good morning, Russell.
Russell Gunther: Just a quick follow-up on the margin discussion. Can you guys share what your interest rate assumptions are that are underlying that guide?
Sharymar Calderon: So from a NIM perspective, what we’re expecting at least in the first — in the first half of the year is for the loan portfolio to stay pretty flat or loan production that’s coming on to the portfolio to be in the higher end. And from the expense standpoint, we’re seeing that the overall — we got to the point where pretty much everything has reset to the current rate level. So, we’re expecting cost of funds to stay pretty flat. What you’re going to see, Russell, is that in the first — in the first quarter, we have a timing component. We have a timing component related to the reallocation of the funds that come from the multifamily portfolio. So some of those will be placed in liquid assets as we’re able to redeploy them into the loan portfolio, which will be able to take us to the higher end of the range that we provided guidance on by the end of the second quarter.
