Matthew Breese : Okay. Maybe just turning to M&A. Obviously, it feels like the banking industry is everybody is a bit inward focused right now. But do you have expectations that M&A picks up in the back half of the year on the back of all this? And how do you feel about your ability to participate in that? And would you.
Mark Tryniski : Yes, I think it’s hard to handicap right now, what the remainder of the year brings just current uncertainty in the environment, not just industry uncertainty, but macro uncertainty as well as it relates to just overall interest rates and GDP and inflation, all those kinds of things that can just affect how people think about M&A. So, I think it’s relatively quiet right now for the most part, we’re certainly always interested in partnering with other organizations that have value assets to us. I think that the recent events in the industry would suggest that there’s going to be a separation between companies with good balance sheets and more challenging balance sheet. We certainly wouldn’t be motivated to partner with someone that would dilute the quality of our balance sheet, but also our strategy hasn’t changed at all in terms of high-value M&A opportunities.
I will say that we’re focusing a fair bit on the non-banking businesses. we think there’s — continues to be really good opportunity is a significant part of the strength of our company and our future in terms of strategic capital allocation. So, we’re pretty active on the non-bank space. again, on the bank side, it’s been relatively subdued. We continue to have conversations with other banks that we have potential interest in. But I think the environmental uncertainty makes it very difficult right now. I mean, you start the valuations are down across the industry, including us. And it just makes I think putting a deal together that much more difficult, principally from the seller’s perspective in terms of expectations around valuation. So, we continue to be interested, strategy hasn’t changed.
We’re really trying to focus heavily on the non-bank side of the businesses where we have critical mass wealth, we have critical mass and benefits. We have critical mass and insurance. we’ll continue to invest in those businesses potentially at even a faster pace in terms of capital allocation than the banking segment.
Operator: The next question comes from Eric Zwick of Hovde Group. Please go ahead.
Unidentified Analyst : Hey, good morning guys. Mark on for Eric today. I think most of my questions have already been answered, but just a quick one, and apologies if I already missed it. But did you have an average price per share on the buyback this quarter?
Joseph Sutaris : Yes, it was just about $54.
Unidentified Analyst: Okay, great. Thanks, I appreciate it.
Operator: The next question comes from Chris O’Connell of KBW. Please go ahead.
Chris O’Connell : Good morning. I appreciate all the color you guys have given around kind of NII and the impacts from securities maturing over the next couple of quarters here. Given you guys have a good amount of aim to kind of defend the margin into 2Q and 3Q, I mean how are you guys thinking about where the eventual margin begins to settle out as we get toward 4Q or year-end post some of those kind of balance sheet opportunities?
Joseph Sutaris : Yes, Chris, that’s — I mean, it’s a difficult question to answer because it really comes down to the funding beta. I think we have a pretty good line of sight on sort of what happens on the asset side. apart, given our loan growth and call it the replacement rate of maturing loans the funding side is a bit of the wildcard. I mean right now, we’ve had about $13.5 billion in funding between deposits and borrowings. And the question is, does that go up 10, 20 or 30 basis points throughout the year. And I think that’s — as we get deeper into Q2 and into Q3, we’ll kind of see where the market settles out. But that’s a pretty tough call for Q4. I would not expect that the industry will see, I’ll call it, significant margin expansion by Q4.
In fact, I probably would think the industry might actually drift down in terms of margin by Q4. But I think we might do a little bit better than the industry given our locking base. So, I’m not sure we can make a call on Q4 at this point.
Chris O’Connell : Got it. And for the borrowings, you guys have kind of on balance sheet right now. Is that mostly overnight? If not, what is the duration of those? And just noticed maybe due to timing or whatever, but the yield is fairly low on those — or the cost is pretty low on those borrowings for the quarter? Or was that just kind of a timing issue?
Joseph Sutaris : Yes. We have — at the end of the quarter, we had about 50 — I think it was $58 million in overnight borrowings. Well, Chris, we also carry typically over $300 million in customer repurchase agreements, there are class of as borrowings, they’re more akin, quite frankly, to deposits. And most of that’s in our Vermont New England footprint a fair number of municipal customers, some commercial customers. But for the most part, we kind of look at that portfolio as something more akin to deposits. So, it’s a bit more rate sensitive than demand deposits, but also wouldn’t match necessarily ordinate borrowing costs. So, a fair amount of our borrowings are tied up in customer repurchase agreements.
Chris O’Connell : All right. That makes sense. And for the CDs that you guys are putting on, what are the rates that those are coming out?
Dimitar Karaivanov : So, Chris, on the CD side, I think we’re right around 4% right now on kind of probably published in blended rates in some markets a little bit lower and some markets are little bit higher.
Chris O’Connell : Okay, thanks. And then just — I know you guys touched on it earlier, but I mean is there any areas that you guys are starting to see any types of credit stress or that you guys are kind of pulling back on that growth that is starting to concern you within your overall markets? Or is the outlook kind of still cautiously optimistic here for the near-term future?
Dimitar Karaivanov : Chris, I wouldn’t say any sort of stress. I would say we’re just being a little bit more vigilant around the sectors you would typically think about, like commercial real estate resets and ability to stress test for rates. With that said, the new paper that’s coming in, you could argue if you’ve got 1.3, 1.4 coverage on rates in the seventh pretty good stress test on day one for those customers. But we’re looking at those that are resetting a little bit tighter, paying a little bit closer attention to the indirect paper as well. Again, right in the middle of historical ranges. We don’t necessarily expect that to change much, but we’re just being a little bit more vigilant around trends and making sure that we’re not seeing anything worse on which we’re not right now.
Chris O’Connell : Great. And last one for me. Just what’s a good go-forward tax rate?
Joseph Sutaris : Similar, Chris, between 21.5% call it, low 22s, so 22.5% — 21.5%, 22.5% is probably a fair range to expect on a go-forward basis.
Chris O’Connell: Great. I appreciate the time. Thanks for taking my questions.
Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Tryniski for closing remarks.
Mark Tryniski : Thank you. Nothing more from our end. Thank you all for joining us, and we’ll talk again after the end of Q2. Thank you.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
