Tim Coffey: Okay. And do you have — just how much of the book reprices this quarter?
Allen Nicholson: We don’t get that specific. We’ve tried to point out on our IP deck because we give a lot of clarity around the office CRE portfolio. And that would tell you it’s probably 20%, 25% of maturities in repricing as an example. It’s generally in line with most of the portfolio on the CRE side.
Dave Brager: Yeah. It’s a good proxy for the rest of the commercial real estate portfolio.
Tim Coffey: Okay. Okay. That’s very helpful. Those are my questions. Thank you very much for your time.
Dave Brager: Thank you.
Operator: Thank you. [Operator Instructions] One moment for our next question. And that will come from the line of Matt Fedorjaka with KBW. Your line is open.
Matt Fedorjaka: Hey, good morning, guys.
Dave Brager: Good morning, matt.
Matt Fedorjaka: Just wanted to kind of touch on credit a little bit. I appreciate the commentary you gave on that NPL moving. But maybe you could just talk a little bit about the CRE portfolio as a whole, how it’s holding up and what you guys are seeing in your markets?
Dave Brager: Yeah. So I think, generally speaking, it’s holding up very well. We do put some good detail in our investor presentation related to classified loans in the commercial real estate area. And I think just generally speaking, we did have a little bit of movement in classified loans. We did have a little uptick in nonperforming. The one uptick in nonperforming as a loan I’ve discussed before, which is the senior living facility. That loan just matured. We moved it to non-accrual. We’re still working with the borrower. We believe that we’ll get out of that line just overall, though, I think the portfolio has been extremely resilient, and we continue to have a lot of early warning signs. We do annual term loan reviews.
We review our stress testing on the commercial real estate side as well as on the C&I side. If there are sale loans in that, we’re out in front of them, but we do get updated information on any loan over $1 million in our portfolio annually at least. And then if it fails for stress test, we have more frequent conversations with the borrower if there’s something that we should be worried about. But overall, it’s been very, very stable, and I feel pretty good about where we are there.
Matt Fedorjaka: Awesome. Appreciate the color on that. And then if I could just get one more in here. I know you said growth for balance sheet is probably pretty slow. If we were to get a decent amount of cuts this year in the back half of the year, would you expect loan demand to pick up pretty heavily? And what are you guys maybe seeing if rates start to come down there in the pipeline?
Dave Brager: Yeah. It’s interesting. We generally base the pricing on our loans on treasuries. If it’s a term loan, if it’s a C&I loan, obviously, it’s based on prime or SOFR primarily, but as far as commercial real estate is going, I think that we’re starting to see a little pickup in the pipeline. It’s not really material, but I think people are maybe just getting a little more accustomed to rates starting with sevens and eights in front of them versus the shop that occurred in the last 15, 18 months as rates started going up, so people still want to do stuff. People still are looking for opportunities. I think they were waiting a little bit just to see if the world broke. And now that it has and it appears pretty stable, at least today, the economy seems pretty stable.
I think we’ll start to see a little pickup on the loan demand side, and we’ll see how it plays out through the year, depending on rates. But I think rates are becoming less of a deterrent for people doing things as they get more used to the current environment.
Matt Fedorjaka: Yeah. Appreciate and thanks for taking the question guys.
Dave Brager: Of course.
Operator: Thank you. I’m showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. David Brager for any closing remarks.
Dave Brager: Great. Thank you. During the course of 2023, Citizens Business Bank not only remains safe and sound, but also produced earnings that were the second highest in company’s history despite the difficult operating environment. We remain committed to our strategy of making the best small to medium-sized businesses and their owners. We work hard to earn and maintain the trust of our customers and business partners, and we want to thank all of our customers and associates for their loyalty and dedication over the past year. I want to thank everybody for joining us this quarter. We appreciate your interest and look forward to speaking with you in April for our first quarter 2024 earnings call. And as always, you can let Allen and I know if you have any questions. Have a great day, and thank you for listening.
Operator: This concludes today’s program. Thank you all for participating. You may now disconnect.
