Mark Fitzgibbon: David, in your comments, you said that you’ve been buying back the stock below your estimate of intrinsic value. Could you share with us what you perceive the intrinsic value of the company to be?
David Rosato: I won’t put a firm number on it, Mark. I mean, as you know, we all come up with different values, we all have different valuation techniques and methodologies. What I will say is we — and I tried to say this in my comments around growth potential, low-risk business model. I really believe that. I think layered on top of that is a significant ability to — there is an ability for us to continue to improve the efficiency of this company on the cost side. I have learned that we have a very resilient deposit base. That was proved back in March. I see opportunities in the Eastern mass market, and I think will be effective as we get bigger and stronger in this large market. Remember, a lot of our markets are smaller towns and west of the population — major population center of this state.
When I put all that together and think about the next couple of years, we see our stock at much higher levels than where we’re trading today. So that’s my high-level definition of intrinsic value for you.
Mark Fitzgibbon: Okay. Great. And then you mentioned potential efficiency improvements. Can you help us think about what might be the bigger pieces of those, not necessarily the numbers, but what are kind of the pieces of the expense synergies that you see?
David Rosato: Sure. I’ll take a whack out and I’ll give it to Nitin. And so I think about the process. There are certain parts of our organization that are very nimble and leading edge, the work long before I got here, that Nitin and Sean would talk about Narmi. You’ve heard that name. So our online consumer and business platform. Very leading that project allows us to get off the core, right? We still have to talk to the core every day via APIs. But really nice platform that has led to decreases in operating expenses. I talked about this in the second and third quarter. So more things like that, where we go from the old way of doing business to more dependent on a large embedded provider to being more nimble, meaning customer centric to me, but also cheaper. So I see we have opportunities like that across the bank to make things faster, simpler, less paper-based. We just have to execute on them, and there are things that take a lot of work.
Nitin Mhatre: Yeah, Mark. I would just add on to that. You’ve heard us talk about this previously as well. We have unique opportunities for optimization. Through our legacy acquisitions, we do have excess real estate that I think we can easily rationalize. We have channels that we can rationalize. We have procurement opportunities that we are exploring and deploying more technology in there. Automation opportunities that are kind of there for most organizations, we believe we have some of those as well. And on a day-to-day basis, we have what I think David had referred to in the last quarter, an internal process. We call it EMRAC (ph). It’s an expense management and resource allocation kind of council that looks at every dollar of spend in pretty low thresholds that we track to make sure every dollar is spent thoughtfully and where there are opportunities to rationalize that and make it more efficient the team is coming back with solutions to do that.
So I think it’s just the culture of efficiency that we’re building. That’s going to create more opportunities for us.
David Rosato: I was just going to say the follow-up to what Nitin was saying, kind of tied into the point I was trying to make about we don’t want a slash and burn expenses here and hurt the revenue momentum of the company. So that’s what I was trying to allude to in the script about or thoughtful on expenses, but we’re also going to be careful to make sure that the momentum that’s happened over the last three years needs to not only continue, but it needs to accept.
Mark Fitzgibbon: Okay. And then it strikes me that one of the challenges on the expense side for you all is just the spread of the geography that you have branches in. Would you consider selling a piece of that geography or some branches in a particular area to try to create more density in the footprint and improve efficiency.
Nitin Mhatre: Yeah. Mark, the short answer would be, yes. And I think that’s been part of the ongoing process. We were a much broader network, as you know, which we have consolidated and we, as a team, continue to look at opportunities for footprint rationalization based on the customer footprint kind of footfalls and our ability to service them. And as we leverage more of digital services, I think that creates more opportunities. But we do that all with the lens of what’s best value for customers and how they’re getting serviced and then creating opportunities for consolidation and rationalization as it comes along.
Mark Fitzgibbon: Thank you.
David Rosato: Thanks, Mark.
Operator: Our next question comes from the line of Laurie Hunsicker from Seaport. Please go ahead.
Laurie Hunsicker: Yeah. Hi. Thanks. Good morning.
David Rosato: Good morning.
Laurie Hunsicker: Just staying on expenses here. So your branch footprint is currently 96%, is that right?
Nitin Mhatre: Correct.
Laurie Hunsicker: Okay. And so, Nitin, when you think about that branch rationalization over the course of the next year, is that 96% going to 90%, 96.8%, I mean how do we think about that a little bit to sort of Mark’s question?
Nitin Mhatre: Yeah. I think the answer would be it will be fewer. And I think that’s broadly through the entire sector, right? I think most the branch networks. If you think about how it will look like two, three years down the line, it’s going to be fewer branches that will be more automated, more digitized and more advisory services. So we’re no different there. We’re not going to give a specific number. We can just tell you that it’s going to be more consolidated as the opportunities get created. And we’ve done that, I think, over the last three years itself, we’re down by about 25, 26 branches and we’ll continue to look at opportunities.
