Alex Twerdahl: Great. And then, historically, CBU’s appetite has been kind of $0.5 billion to $2 billion in terms of size. Has anything changed with respect to your appetite for bank M&A?
Dimitar Karaivanov: I think that’s kind of where we feel that the best risk and reward lies in the opportunities. I think they’ll kind of vary between in-market versus kind of contiguous markets, the markets that we’ve talked about. But certainly, that size is where we feel is an appropriate risk and reward. It could be a little bit larger, but probably not by much.
Alex Twerdahl: Thanks for taking my questions.
Dimitar Karaivanov: Thank you, Alex.
Operator: The next question will come from Steve Moss with Raymond James. Please go ahead.
Steve Moss: Hi, good morning.
Dimitar Karaivanov: Hi, Steve.
Steve Moss: Good morning. Dimitar, just following up just on loan growth for a second. Do you think for the upcoming year, total loan growth of $600 million, $700 million? Or just kind of curious as to the pace of loan growth, will it be still pretty strong or how you’re thinking about it?
Dimitar Karaivanov: Yeah, Steve, good question. We generally come into the years thinking of kind of mid-single digits. We certainly outperformed in the past couple of years by quite a margin. We didn’t expect some of that. We didn’t plan for it. But when you’ve got great borrowers and opportunities, you kind of take what they give you. The pipelines are strong. They’re not as strong as they were probably last year on the commercial side at this point, but still pretty strong. The residential pipeline is also pretty good. We’re still calling for mid-single digits. So we kind of feel comfortable at that level as we sit here today. But it will depend a lot on the competitive dynamics and price as well, we need to get paid for what we do. So there will be some perimeters around that as well.
Steve Moss: Okay. Great. And then on the employee benefit services side, you said you’re pretty upbeat about business development here going forward. I realize also during the quarter, you had some tailwinds from fixed income asset appreciation. Just kind of curious how you’re thinking about the overall revenue growth for that business line this year?
Dimitar Karaivanov: Yeah. We target high single digits in that business, Steve. So kind of between 5% and 10% is where we think the core run rate of the business is. Certainly, on organic basis, it has been there. It’s been muted by the market. So if we — if asset values kind of stay where they are and we start really getting paid for all the organic growth we had and we continue to capitalize on pretty good pipelines in that business, we think that, that kind of high single-digit metric is certainly achievable for us in 2024.
Steve Moss: Okay. Great. And also for the insurance business, I realize it’s a hard market. You had some very good year-over-year growth. Just curious, is it still close to a double-digit pace there?
Dimitar Karaivanov: I think that’s fair for the current expectation. We’ve grown that business at over 10% in the past three years. Last year was 18%. I think, between some of the continued opportunities on the M&A side, kind of the small roll-ups and kind of the market, and certainly, our teams are executing organically really well as well. So, double digit, I think, is certainly achievable for us in 2024.
Steve Moss: Okay. Great. And then, on the margin here, just curious how you guys are thinking about the margin outlook over the next couple of quarters? And what — how you guys are feeling about things if we get some rate cuts here as the year progresses?
Joseph Sutaris: Yeah. Hi, Steve, it’s Joe. I’ll take that question. So, I think I kind of laid out in my prepared comments, our expectations on — and just to make the distinction on net interest income, and our expectations are that net interest income, given the current rate environment, will expand year-over-year on a full year basis. And that expectation is really sort of built on the fact that we’ve had significant loan growth over the last year or so and that continues, and that’s going to allow us to improve overall earning asset yields. And so that we expect that to drive in it. And then, on the other side of that is obviously that we — our expectation is that funding cost pressures will abate through 2024. Now typically, we don’t see a significant pickup in net interest income in the first quarter.
We lose a couple of days, if you will. There’s just a shorter day count in the first quarter. But our expectation is that sort of as we get beyond that, we will potentially see expansion in net interest income. With respect to the margin, I noted again in my prepared comments that we took down some borrowings at about 4.5% and new loans been on the books at about 7.5%. So, in this, I’ll call it, latest round of loan funding and origination, we generated just about a 3% margin on that. So, the expectations for us is that potentially margin is down a little bit to flat. But at the end of the day, expectations are that the dollars in net interest income will trend up later in the year. Yes, I think with respect to the current rate environment, it was — we got some, I’ll call it, relief on the long end.
