Frank Schiraldi: Yeah. Okay, great. Thanks for that. And just lastly, I guess on the non-interest-bearing growth, I just wanted to, so you mentioned the CBIT. I assume that’s all non-interest-bearing and I assume over time the idea is still, I mean, you’re getting a great return on that right now just in NII, but I assume over time there’s the idea or the expectation is the fee side of things. Just curious if that’s something you think you could ramp up in 2024, that’s sort of further down the line or how you thinking about that?
Jay Siddhu: Hey, Frank. So, it’s a great question. Obviously in a higher for longer type scenario, we don’t anticipate this being a need in 2024. We’re working collaboratively with customers and their technology needs. So eventually as you can imagine, our low-rate environment does need to be a fee-based business, but then it also doesn’t need to take up so much of your balance sheet. So that’ll be an evolution over time, but I don’t anticipate that being a 2024 event.
Frank Schiraldi: Gotcha. Okay, great. Thanks for all the color guys.
Operator: Our next question comes from Matthew Breese from Stephens. Your line is open.
Matthew Breese : Hey, good morning. I know you had referenced the VC kind of driving a portion of the non-interest-bearing deposit growth, but I was hoping for just some better color as to what the components were that drove the quarterly increase.
Jay Siddhu: Yeah. So, I think, Matt, we talked last quarter about our $2 billion pipeline, despite the $1.3 billion of growth, we still have one and a half billion in sort of replenished in our pipeline. We also talked about a quarter of that pipeline being non-interest bearing across, verticals. And that was reasonably consistent across the venture banking team.
Matthew Breese : Okay. And I don’t know if you mentioned this, but what is the near term and in 2024, if we have it both kind of overall deposit growth outlook and then outlook for non-interest-bearing deposit growth?
Jay Siddhu: Sure. So, one and a half billion, about three quarters, about a quarter of that, would be non-interest bearing. So that kind of gets you to, $500 million, sort of a quarter. And with a quarter of that being non-interest bearing. But just a reminder, we will have in the fourth quarter, you do have the transition out of the non-core, non-strategic, BMT student deposits. So, the fourth quarter will be flattish to, potentially a slight decline, in deposit balances. But again, when taken in totality about sort of the go forward foundation of the franchise, we’ll continue growing off of that base in early next year and hopefully continue to replenish the pipeline as we have done incredibly successfully over the last two quarters.
Matthew Breese : And where did the BMTF student deposits currently reside?
Carla Leibold: Yeah, so I can give some interest bearing, non-interest bearing, I can give you some color on that. So, it’s split. So the student deposits are currently in non-interest deposits, and then the T-Mobile related deposits are in interest bearing.
Matthew Breese : And what’s, are they split 50-50 or what’s kind of the breakdown?
Carla Leibold: It’s roughly 50-50 with some seasonality around the student deposits tied to the school year.
Matthew Breese : Okay. And then, this quarter there was some legal expense tied to a third party PPP lender. There’s still some PPP left on the books. So I guess one, I was looking for some better clarity as to what happened that caused, the $4 or $5 million in legal costs. And then what is the outlet for resolving the remaining stub piece of PPP loans? It feels like it’s just been on for, it’s been ongoing for longer than most of your peers.
Jay Siddhu: Hey, Matt. So, obviously on PPP, just as a reminder, it may be ongoing. It’s 1% of our balances of origination, right? We originated $10 billion. We made $500 million of revenue, $8 of book value creation. We had guided to about this number a couple of quarters ago of balances we expected to stay in our balance sheet. We also guided last quarter that that would be our last quarter of needing to do some of the pro forma metrics. It’s now put into tables in the back of our franchise. To answer your question specifically, this was also in an effort to make sure that we just cleaned up any issues. As you can imagine, there were no PPP servicers prior to March of 2020. So, PPP servicers, who had technology capabilities, et cetera, and also didn’t necessarily plan to be in this business for three to five years.
So, we had to take on some of those servicing efforts and we cleaned things up. There are no disputes on outgoing. We talked about this particular arbitration a year ago. I think it was in the fourth quarter of last year. So, we’ve disclosed that there’s nothing, no minor, no major dispute. PPP is essentially cleaned up and behind us in these balances. We don’t know when they’re going to term out, but just assume that they’re part of our franchise going forward. Not great, from the 1% interest rate given our cost of funds, but very de minimis in the grand scheme of things. And PPP was an incredible program for us and transformed us to where we are today where we can make as much in a quarter as we made in an entire year prior to PPP.
Matthew Breese: Understood. Okay. And now that you do have the servicing, you’ve won back your servicing, should we expect a full and maybe expedited resolution of the stub balances? Is that the way to think about it?
