Q – Laurie Hunsicker: Okay. Okay. That’s great. And then same question on the noninterest expense line, the other category, that $5.5 million outlook outsized, anything nonrecurring in that?
Carl Carlson: There was about $800,000 there that was nonrecurring. That has to do with the write-off of some premises that were
Paul Perrault: Projects
Carl Carlson: Projects that we’re working on.
Q – Laurie Hunsicker: Okay. Great. And then on office. Can you update us that $14.8 million cost be office in Downtown Boston that went nonaccruing last quarter. Can you just give us an update on that? And then, do you happen to have a debt service coverage ratio, LTV occupancy, anything on that particular port [ph].
Carl Carlson: Well, we continue to work with the borrower on that. It’s a participated loan. So we’re — I think it’s mostly working with the participant on this as well to get this to the finish line. What the debt service coverage is in the 50s and the LTV is, I think, around 15%, something like that.
Laurie Hunsicker: Okay. And then…
Carl Carlson: Go ahead, Laurie.
Laurie Hunsicker: I was just going to say the rest of your office book, can you just help us think a little bit about that $774 million in terms of what’s Class A versus across the EMC and do you have an average LTV or debt service on your full book?
Carl Carlson: Sure.
Laurie Hunsicker: And I guess one more question — go ahead.
Carl Carlson: Okay. So I had about — there’s really not a lot of day in there at all. It’s mostly Bs and Cs. It’s like, mostly the Bs, B category there. The LTV on that is right in the 50s, but that’s basically at origination. So I wouldn’t want to try to guess what the recent appraisals are at this point because I think that’s just tough to get to. And the debt service coverage is around $1.6 billion.
Laurie Hunsicker: Okay. That’s great. And then one more thing. How much of that $774 million is medical, that lower risk medical category?
Carl Carlson: $100 million.
Laurie Hunsicker: $100 million. Okay. Great. Thanks. I’ll leave it there.
Carl Carlson: Sure.
Operator: Our next question comes from Chris O’Connell with KBW. Please go ahead.
Chris O’Connell: Hey good afternoon. So just following up on the office line of questions. It looks like in the deck on that slide that the 1Q ’24 office maturities from last quarter’s deck to this quarter’s deck went from like $1 million up to $24 million. I know you had a larger credit set to mature in the fourth quarter here. Just wondering if that was the reason, does that get shifted back a little bit, or what was the driver of that kind of change in the maturity schedule?
Carl Carlson: I don’t know the specifics around what you’re trying to — the specific question you’re asking here, but we did have a maturity that came up that we’ve done some extensions. I want to say it might have been too long that we did some extensions on to continue to resolve it. So it may just be pushed out three to six months as we continue to work with the borrower on. That might be answering your question.
Chris O’Connell: Okay. Great. That’s helpful. And then, as far as the deposits go, it slowed a bit on a quarterly basis in terms of the pace. But any read into how much of the non-interest-bearing mix shift has remaining? I mean, did it fell between the October and December, and what’s kind of your baseline outlook for the next couple of quarters here?
Carl Carlson: It’s a great question. I wish had a great answer for you. On the deposit side, we do expect to start seeing some growth in deposits. It may come a little bit later this year than earlier this year. But the positive outflows we’ve seen have largely been driven by the higher balance accounts that have been moving their excess balances to treasury funds seeking higher yields. But that has largely played itself out. I think that’s kind of all done with. The last Fed hike we had was in July. And while deposit pricing remains very, very competitive, it’s fairly stabilized at this point. So we do feel like we’re going to start seeing some deposit growth, albeit we’ll also probably given the level of interest rates. DDA, we may still continue to see a little bit of DDA in the low-cost deposits migrate into the higher cost of funds. But even that, that’s going at a much slower pace at this point. But to give you a precise number, I really can’t do that.
Chris O’Connell: Okay. Understood. And for next year, mid-year, I believe there have been — starts to hit your fees. Maybe just an update on what that number is?
Carl Carlson: So we’ve been guiding that to be about $200,000 to $250,000 a quarter for the interchange that’s our expectation. And that would start happening in July. And so that will be a negative to the fee income side. We continue to work very hard on other sources of fee income throughout the organization
Chris O’Connell: Great. And just circling back to the margin dynamics. Can you remind us how much of the portfolio on the loan side immediately reprices with short-term rates? And what – how much of the deposit book, I guess is indexed to short-term rates?
Carl Carlson: We’ve got a nice little slide, Slide 22 kind of lays out where we are on that. So about 20% of our loan portfolio is floating that basically reprices within two months.
Paul Perrault: And none of the deposits are indexed.
Carl Carlson: Yes. Nothing is indexed on the deposit side. We can move rates on the non-maturity deposits that will. But that’s also very market-driven, as you can imagine. Our CD portfolio, so CDs, we have about $335 million of CDs that are repricing in Q1 and around $340, $345, something like that in yield or cost. And those are repricing up into the force, the mid-4s.
