Nathan Race: Okay, great. Changing gears a little bit, just thinking about SBA credit quality going forward. Obviously, there was a prominent SBA lender that had some issues that was announced yesterday, I believe. And I noticed that your SBA specific reserve came down a little bit quarter for quarter. So just curious what you’re seeing across that portfolio today. And I understand you guys have de-risked that portfolio over the last several quarters. So just would love to hear an update in terms of what you’re seeing in that portfolio that we can’t necessarily glean from some of the disclosures.
Alberto Paracchini: Nate, and I’m sure Mark will jump in here as well. But I think to us, I think we’ve always looked at this business and been pretty consistent in understanding and knowing that this is a higher risk segment of our portfolio. I think we added additional disclosure. Hopefully it was helpful to give you all some perspective in terms of how that business has been, the exposure that we have to that business over time, how it’s come down. In the, it’s back in, if we think back at 2016, it’s come down from around 14.6% of loans to around 6.3% today. That being said, I think over the last, really since COVID, we’ve really been communicating that this is a part of our portfolio that you always have concerns about because you’re dealing with borrowers that are essentially either inexperienced or, they’re newer borrowers, they don’t have the track record, etcetera.
And I think our reserving relative to that comment has been consistent over time. So we feel good about kind of where we are at this point. I think to the comments made by that other institution, I think those are comments that I think hopefully you can tell that we’ve been highlighting for some time in that, yes, these are borrowers that coming out of COVID are likely going to experience some trouble, particularly given the fact that rates have gone up 500 basis points. That being said, the trend in that portfolio has been pretty stable, but we’ll continue to monitor and manage the business accordingly. Mark?
Mark Fucinato: Every couple of weeks, we literally sit down and go through the delinquencies, upcoming events for the customers, any trends in specific parts of the portfolio, what’s going on in the workout credits. But again, as Alberto said, the biggest, I think, burden that they’re facing is, I mean, a lot of these customers are paying interest rates three times what they were before rates started going up. And that’s a heavy load for these smaller companies. They don’t have the balance sheets, typically, to work through that, or the ability to put capital into a company. So it’s a portfolio we monitor very carefully. But again, if you look back historically, it kind of comes with the territory almost. You’re going to have some issues in that portfolio from time to time, and that’s why we monitor it so closely, basically every two weeks, we’re looking at that book.
Alberto Paracchini: Hopefully that answers, that gives you some color, Nate, on that.
Nathan Race: Yes. Indeed. And then if I could just ask, lastly, just in terms of capital deployment priorities, I imagine you guys will be north of your 9% TC target in pretty short order here. So just curious, in terms of what you’re seeing from an acquisition opportunity perspective and the M&A environment remains fairly difficult as it kind of stands today. How are you thinking about perhaps continuing with repurchases going forward?
Alberto Paracchini: Yes, I mean, it’s something that, when you think about the hierarchy, Nate, is first and foremost is, continue to support the growth in the core business. We’re seeing some decent opportunities organically to grow the business. So first and foremost, we want to have the flexibility to do that. Second, we want to pay a consistent dividend over time. Third would be M&A or other opportunities to grow inorganically. And then lastly, you have the valve of looking at share repurchases. To your question regarding M&A, I think it’s a pretty quiet environment. That said, I think we’re always, having conversations and looking at potential things that may surface. So I think in summary, I think that’s the hierarchy. We just want to always have the flexibility to be able to take advantage of opportunities as they come.
Nathan Race: Okay, great. I appreciate all the color. Thank you guys. Nice quarter.
Alberto Paracchini: You bet.
Operator: The next question today comes from the line of Damon DelMonte from KBW. Please go ahead. Your line is now open.
Damon DelMonte: Hey, good morning, guys. Hope everybody’s doing well today. Just curious, do you guys have a projection for CRE maturities over the course of the next few quarters?
Alberto Paracchini: Damon, we haven’t disclosed specifically, but I would say generally speaking, I think if you look at our CRE, office exposure is around $205 million. I would say probably, 40% of that or so really is a 2024 event. And we’re pretty much well ahead of kind of where those loans and what those maturities are. And the rest are just, I would say, sprinkled out in 2025, 2026 and beyond without any real material concentration in any one year.
Damon DelMonte: Got it, okay. And is the, kind of the rate reset for those, have you guys done like internal background work to kind of stress out the borrowers to see how they would react to the higher rates today and kind of game plan to take an appropriate action leading up to that?
Alberto Paracchini: I think that’s part and parcel to what Mark and his team and the business units do and monitoring the portfolio. So absolutely, Damon.
Damon DelMonte: Okay, great. Thank you. And then just to circle back on the BTFP leverage that you put on, what was the total dollar amount of that and what period? What part of the quarter did it come on?
Tom Bell: 200 million and it came on in January.
Damon DelMonte: Okay, so we have a full, full quarter impact here this quarter then. Okay. And then just lastly, as we think about provisioning and kind of charge-off needs, you guys still feel like net charge-off will still be in that, you know, call it 35 to 45 basis point range for the next few quarters and provision should be supportive of that to maintain a relatively flat loan loss reserve. Is that a fair way to think about that?
Alberto Paracchini: That’s a fair way. I think obviously continuing on loan growth in that regard also Damon and I think as we stated also for the underlying business, I think we’re comfortable with that statement. But as you know, we have some PCD loans as we have opportunities to work those assets out. We will certainly highlight those. But if we had those are marked assets and if we have an opportunity to get out of them at exit prices that make sense, we will look to take advantage of that. So I just that’s just an additional caveat to your question.
