Michael Perito: Helpful. And maybe switching over to an expense growth question. Just on the SBA side, I mean, when you talk about the 5% to 7% expense growth, Bill, I imagine there’s still some like FTE ads, maybe not a net basis, but like commercial lenders, SBA producers in the budget, can you talk about that business? And it seems like that’s probably the most capital efficient fee growth opportunity you guys have on the horizon. Just want to try and get a better handle of what that opportunity looks like today?
Bill Burns: Yes, I think we continue to build that outfit for us with some great people there and make sure we have the right support for an increased portfolio and volume going through there. But it’s baked into the numbers. We’re not adding, we’re not doubling the team. We add people kind of one at a time around the organization. Same token, there are people that have left the institution. And so we think we’ve upgraded around the organization. We’ve hired some great people, some others have left and the staff count increase has actually not been that high.
Michael Perito: Okay. And then just lastly, for me, just as we think about 2024, some of the initiatives you guys have announced over the last couple of quarters, like Nymbus or even longer dated stuff like BoeFly, any kind of deliverables or certain things that you’re comfortable telling us from an expectation standpoint about where we can maybe start to see some of those things impact financials in 2024, or is it still not entirely kind of clear yet the timing of some of those benefits?
Frank Sorrentino: I think on the case of BoeFly, we’ve seen a lot of improvements around the entire company. It’s part of what’s driving our SBA division. And you’re seeing some of those numbers there. We have been increasing pretty dramatically the number of franchisors that we service on the BoeFly platform, which is driving other incremental business into the organization. BoeFly really acts as sort of a linchpin or a centerpin for lots of other things that are going on within the company which just show up in other places and hard to just put on a BoeFly “balance sheet” or financial statement. But we’re very, very happy with the results that are accruing there. And at some point, I do think we will be able to show some level of financial metrics for that unit.
On the Nymbus side, we’ve just launched that family and friends recently. The platform is up and running and we’re seeing some successes there. I don’t have to remind you that that entire vertical was turned upside down in March and April. And so we’re rethinking how we’re going to go after that marketplace and where do we want to add value for that specific vertical. But the Nymbus platform is up, VentureOn is live, and we’re pretty confident that that’s going to make a difference as we move through 2024 and into 2025. We’re also implementing MANTL throughout the organization, the omnichannel deposit origination. And look, the hope there is that we improve conversion rates and that will lead to higher deposit origination.
Michael Perito: Great. Very good, guys. Thanks for taking my time and for the color this morning.
Operator: [Operator Instructions] Your next question comes from the line of Nick Cucharale with Hovde Group. Please go ahead.
Nick Cucharale: Good morning everyone. How are you?
Bill Burns: Hello, Nick.
Nick Cucharale: Just to follow up on the composition of the loan growth, just given the strong C&I momentum and the positive construction commentary, is it your expectation that most of the loan growth this year is driven by those two segments?
Frank Sorrentino: Yes, both C&I and construction.
Bill Burns: Yes, I think there are other CRE opportunities that are out there that we continue to. We’re not abandoning any of our clients or any of the verticals that we’re in, but we are seeing momentum, and we have seen for years, momentum building in the C&I portfolio. And construction has always been a place where we’ve had very deep amount of experience. And as you know, that portfolio rises and falls depending on what’s going on in the economy. I have to tell you, I don’t think I’ve ever seen a stronger time or a better time to be in construction, based on the demographics, based on what’s going on, based on where people want to live, and based on just the available supply of housing units. So I would look to increase it even more if I could.
As you know, it’s a very fast moving asset. So as quickly as you put it on the books, it comes off. So typically these projects last anywhere from 10 or 11 months out to 18 or so months. So the turnover is very, very quick in the construction portfolio. So maintaining – even maintaining standing still in that portfolio means you’re putting a lot of assets on.
Nick Cucharale: Very helpful. And then as it relates to the $10 billion in asset threshold, is there any incremental cost that you need to incur, or is that already baked into the numbers? And then secondarily, are there any containment strategies you plan to pursue in order to manage that crossing until 2025?
Frank Sorrentino: I would say no. We continue to build risk controls related to being over 10 billion. So, yes, there’s more to come, but it’s no more of an increase than what’s in those numbers that I’m forecasting for you.
Nick Cucharale: Perfect. And then just lastly, for me, just to clarify, in the 5% to 7% expense growth guide, that year-over-year increase excludes the special assessment in the fourth quarter, correct?
Frank Sorrentino: Correct.
Nick Cucharale: Thank you for taking my questions.
Frank Sorrentino: Great.
Operator: Our final question comes from the line of Matthew Breese with Stephens. Please go ahead.
Matthew Breese: Hey, good morning.
Frank Sorrentino: Good morning, Matt.
Matthew Breese: I was hoping for some additional color on new loan yields. I heard you loud and clear on C&I and construction spreads. But as you look at the pipeline today, what is kind of the blended all-in rate? Oppositely, what is rolling off as you put these new loans on?
Bill Burns: Well, it’s about 825 to 850 is the new rate going on. And the loans coming off is about 7%. So based on the volume and that spread, it does add basis points, five to eight basis points a quarter, as we move forward. In the past, we’ve had expense deposit cost increase greater than that. So it really depends on how much volume we see going forward. The greater the growth rate, the greater the increase in our margin, in my view.
