Operator: Your next question comes from Damon DelMonte from KBW. Please go ahead.
Damon DelMonte: I just want to start off with a little bit on the topic of credit here and kind of looking at the reserve level and I know the build was specific to these 3 office loans. But just kind of wondering what your thoughts are going forward with the provision line kind of given the pullback in loan growth and what you’re seeing elsewhere in the portfolio and the potential need to build reserves further from here?
Jim Fitzgerald: Sure. No, fair question. And we — as we talked previous quarters and certainly similar to others. Loan growth is a big factor in provisioning levels, right? If you look specifically at Eastern, if you look at when we had much faster loan growth last year, we had much higher provisions and the correlation is pretty clear from that. We do expect modest loan growth over the quarter, the fourth quarter and into the first quarter of next year. That will be a factor. Our CECL methodology is very consistent and it’s the same quarter-to-quarter. It starts with an economic forecast. To date, the economic outlook continues to be reasonably good, and that’s a factor if that were to change, then obviously, the CECL calculations would change.
But over the last couple of quarters and what we see through literally October, whatever today’s date 27, the economic outlook is still pretty strong. So we don’t see the provision levels that we’ve seen both in ’22 and ’23 and the correlation with loan growth is what we would expect over the next quarter or 2.
Damon DelMonte: And then with respect to the office portfolio and kind of the like 38% is in the Boston Cambridge area? Are there any other properties or locations that are showing early signs of stress that have kind of popped up on the radar? Or do you think these 3 loans were just unique situations and not indicative of a broader weakening?
Jim Fitzgerald: Yes. No, very good question, Damon, there’s a lot there. Let me sort of unpack it a little bit out of time. So I think we do provide the statistics about Boston and Cambridge and not to get local here, but Cambridge is very different than Boston. There’s a lot going on in Cambridge and we expect that to continue. If you look at the portfolio, generally, it is the Boston Financial District, where these 3 assets were and where the issues we expect to be concentrated. That’s not to say there won’t be issues in other places and we’re carefully monitoring all of that. But the issues that were specific to these 3 loans that I described on Mark’s question, we’re very specific to the financial district. That’s what we continue to monitor the entire portfolio very, very carefully.
Operator: Your next question comes from Laurie Hunsicker from Spark Research Partners. Please go ahead.
Laura Hunsicker: Hoping that I could just circle back where Damon was. So the 38% that you gave on your $717 million book, that’s Boston and Cambridge, do you have the split as to what’s just Boston Financial District.
Jim Fitzgerald: We haven’t provided that, Laurie. So we’d have to review that. I don’t know this second. We are very focused on the financial district and that’s where these 3 loans were from, as I mentioned. We can talk us internally about providing a little bit more information on that specifically.
Laura Hunsicker: And then just going back to the $26 million of nonperformers. What was the split there on those three properties in terms of Class A, Class B, Class C.
Jim Fitzgerald: Yes. So I get a little worried about the Class C because different people have different definitions. But I think they would all be Class B types and they were all in the financial district in Boston.
