Nicole Stokes: Yes. So we do not have any more rate — we don’t have any rate assumptions built into our guidance. So this is based on flat rates. We have programmatically gotten our balance sheet to be about as close to neutral as what we can get. We are about 1% plus or minus in those of plus or minus 100 fields. So very, very close to neutral. I would say that the real question of driver of margin is exactly your first question is that noninterest-bearing mix. So for us, about every $100 million that goes from noninterest bearing and you have to assume it goes somewhere. So whether that goes in like a higher rate CD or an FHLB advance or even higher money markets, assuming that it goes into the higher of that — kind of a higher CD, every $100 million of movement there is about two basis points on the margin.
So I certainly do not think — I think we’re very pleased with the 360 margin that I don’t — I’m not ready to say that we’ve troughed even though we’re very close to neutral, I just think that, that movement from noninterest-bearing to interest-bearing as well as competitor pressure and what some of our competitors are doing can still cause some pressure on the deposit side. So I feel like anything that we’re going to get — that we’re going to gain on the loan repricing side, we will probably be giving up on the deposit side. Again, don’t think that we’ve hit the bottom yet, even though the model may show it, I think the practicality of what’s going on in the market can cause a little bit more compression over the next few quarters.
Eric Spector: Got it. I appreciate the color. And just one last question and then I’ll step back. Just on expenses, how do you think about the good core expense run rate and how you juggle these costs at this point, obviously, with NII pressures versus continued investment in the franchise? Thanks for taking the questions.
Nicole Stokes: Sure. There are definitely some things that are on the move. Where we’ve seen kind of wage inflation stabilized over the last nine months. What we are anticipating, and it’s probably more of a 2024 expense, is some of the benefit side. Just with health care costs, we anticipate some of the benefit costs going up for next year. We’re already in that modeling. And so while we do a really good job of controlling expenses, I do see kind of a — I think we’ve guided really no difference than we’ve guided before, kind of that 3% to 5% increase in expenses next year. And that — again, we do a good job controlling what we can, but between the increased FDIC insurance costs and then also kind of health insurance and some of those benefit costs.
We’re still in that kind of 3% to 5%. And again, that excluding kind of the variable cost of mortgage. So if you kind of take out the mortgage and look at everything else, that’s where I would guide that 3% to 5% increase in noninterest expense.
Eric Spector: Got it. Thank you. Congrats again on a good quarter.
Nicole Stokes: Great, thank you.
Operator: We have our next question coming from Brady Gailey from KBW. Your line is now open.
Brady Gailey: So I heard the expense guidance for next year, but I was just wondering when you look at expenses in the second quarter, they were a little heavy. I know you called out a couple of one-timers like I think fraud was up — but when you look at the back half of this year, how do you think about expenses? Like could expenses take a step down in dollars in the third quarter relative to 2Q just because 2Q had a couple of one-timers?
