Mark Grescovich: Well, good morning, Kelly, this is Mark, and thank you for the question, and thank you for your compliment. We thought it was a very strong quarter as well. Look, I think the bank M&A environment right now is pretty stagnant just because of various things, not just interest rate sensitivity and a lot of institutions, but also the uncertainty with the credit environment or what you may potentially buy, be buying, along with accounting rules associated with an M&A transaction, so it’s going to be fairly muted here. But our philosophy hasn’t changed, our policies haven’t changed. We continue to have a select group of companies that we admire and that we think would be great partners with Banner, and we continue to have that dialogue.
And it’s more important to have that dialogue now more than ever. as we get through this cycle as to where the opportunities might exist for combinations. If you think about our acquisition strategy and our combination strategy, it has always been opportunistic. And it has been — transactions that have been nurtured over several years of understanding their company and their management team and our company and our management team. So I see that process continuing right now.
Kelly Motta: Thanks for all the color, Mark appreciate it. My next one is for Jill, we’re just taking a deeper look. I think office is getting — have continued to get a lot of attention. Can you refresh us on your exposures there? And any sort of LTVs or debt service coverage ratios for that portfolio that you can share with us as well as kind of a nature of that book?
Jill Rice: Sure, Kelly. Like everyone, we continue to watch the office market closely, and our portfolio is performing well. Limited exposure in total, it’s 7% of the loan book and really important to think that we — remember, we don’t have or have very limited exposure to anything in the core business districts. Our office portfolio is relatively small at — or as I already said that 7% of the loan book, but 50% of it is owner-occupied. The granularity adds to limiting the exposure average individual loan size of the investor portion of that portfolio is roughly $2 million. When you add in the owner-occupied portfolio, it drops pretty significantly from that. We’ve maintained consistent underwriting. I would say that over the course of the last, say post pandemic, our office portfolio has had roughly a 60% loan-to-value going in and a north of 150 debt service coverage going in.
Kelly Motta: Appreciate the color there Jill. That’s really helpful. My last question for you all today is just — I apologize if I missed it, but did you provide any guidance or outlook around fees for 2023?
Peter Conner: Or non-interest income, Kelly?
Kelly Motta: Correct. Yes.
Peter Conner: Yes, we didn’t provide any guidance, but we think the fourth quarter is representative. It’s a good baseline. It reflects the muted mortgage environment. We’re seeing some green shoots in mortgage, given the drop in the 10-year, but our expectation is we’re going to run at the lower levels we’ve seen in the last quarter or two in residential mortgage for the bulk of 2023. And we’ll see some the deposit fees, while we have some selected deposit product fee changes coming in the second half of ’23 as part of Banner Forward. We’re seeing a little bit of offset with the ECR rate going up on our analysis fees as we hold those analysis deposits, we’re giving more compensating credit in the ECR rates. So, our deposit fees are going to generally kind of trend neutral to what we’ve seen in the last quarter.
So, all that being said, in multifamily, we think we’ll have a better year than we did in ’22. So, we should see some upside in multifamily given the marks that we took on it in ’22. But overall, we think it will be very similar to ’22 in terms of the aggregate core fee income trend in ’23.
