Mike Archer: I would say nothing imminent, but I will just say to that, though, Damon, we’re constantly evaluating opportunities to optimize if it makes sense and meet our ultimate financial parameters.
Damon DelMonte: Got you. Okay. And with regards to the outlook for loan growth, I think you had said low single digit for the year. Kind of how are the commercial pipelines shaping up right now? And how is that kind of split between C&I and CRE. Has there been any increase in demand on the C&I side? Or is it more real estate driven? .
Simon Griffiths: I think we’re seeing some nice strength from the C&I and the real estate side. And certainly, as rates start to come down, I think the resi side as well is going to pick up, particularly probably in the spring season. But we’re seeing a nice demand from our clients. And that’s across the footprint as well. That’s certainly across the Midcoast and then obviously into some of the Southern areas, which I think is an area of focus for us. So there definitely is the demand out there, and I think that’s a strategic strength that we have with the balance sheet and the position to continue to lend. And I think that’s something we’ll be very focused on this year.
Damon DelMonte: Okay. Great. Thank you for that. And then just lastly, if I could sneak one more in here. On the outlook for the provision. As you kind of look at your reserve level, it’s pretty flat over the course of 2023. Do you envision kind of keeping that flat and kind of low charge-offs and then the provision just basically supporting the growth that you get to keep that reserve level flat? .
Mike Archer: Yes, I think that’s fair, Damon. I think we right now feel good at the 90 basis points and considering our view on the macro outlook. I do think to the extent that things start to shake out and there becomes a clear light on what the path forward from a macro position and call it normalization. There is certainly opportunity over time to potentially release reserves. I think it was before we adopted the CECL accounting method or when we did, we were around 80, 82 basis points. So I do think that we have some opportunity there. Of course, it will depend on macro conditions and just overall credit quality metrics. But right now, things certainly look good.
Damon DelMonte: Great. Okay, that’s all that I had. Thank you very much.
Mike Archer: Thanks Damon.
Operator: Our next question is from Matthew Breese with Stephens Inc. Your line is now open.
Matthew Breese: Hi. Good afternoon. A few questions for me. I first wanted to start with — Mike, you had mentioned the tax rate this year, it sounds like it’s going to be a step down in the kind of 18% range. I’m assuming that lower range is partly because of the tax credit investments. So one, is that in fact correct? Two, from what I’ve seen historically when folks invest in the tax credits, there’s usually some sort of expense or contract income item that flows through fees. If that’s the case, could you just enlighten us as to what that is and how much? And is that included in the overall guidance you provided?
Mike Archer: Sure. Great question, Matt. So, we anticipate our effective rate to be around 18.7%. In part, the rationale before I get to the renewable energy project there, Matt, is just the makeup of our revenue sources, if you will, just the changing over time as our revenues come down, some of our tax-exempt income is just a larger percentage in part, that’s driving a lower tax rate right now. . As we think about the renewable energy project, solar project, that, from an accounting perspective, we will account for that all within the income tax line item. So we do not anticipate that running through any of the operating expenses. I think the new accounting method out, the proportional amortization method that we’re now allowed to use for those. So I think it makes it ultimately a little bit cleaner from an overall income statement perspective, and that’s our intent just to run it through the income tax expense.
Matthew Breese: Yes, I completely agree with you there. The second thing I wanted to touch on, and I’m probably not going to get an exact answer here, but would love your thoughts. As I think about what’s unfolded for Camden during this higher rate environment, you’ve done pretty well on the deposit front with less than 190 all-in-cost of deposits. But the thing that’s held up the margin is loan yields have been kind of slow to reprice and there’s a good chunk of loans that are in lower-yielding buckets such as resi. And so as we look at the entirety of the loan portfolio, how much is yielding on the lower end of the spectrum, call it, 4% or below. And as you think about that bucket and repaying and flowing to higher yielding on maturity, how long is that going to take? What is the duration of some of the lower-yielding paper on your book?
