Great, I appreciate that. Thanks.Vince Calabrese And then Frank, just to clarify, on the negative carry question, I forgot we had some portion of what we took down with 2-year money like 440. So kind of all in, the additional liquidity, which really had no negative carry kind of all in on a flat basis. Frank Schiraldi Okay. Thank you.Operator The next question comes from Daniel Tamayo with Raymond James. Please go ahead.Daniel Tamayo Thanks. Good morning, everyone. Maybe first, on the operating expense guidance, if you could just give me an idea of what drove the overall outlook higher given, I guess, my overarching thought that with the outlook down that should drive a decline in incentive compensation?Vince Calabrese Yes, I can comment on that, Danny.
I mean expenses for the quarter on an operating basis came in at $218 million. Our range from January was $210 million to $215 million. So $3 million above the high end of that range. Half of that variance was just lower deferrals on loan origination costs, lower consumer loan volumes than what we had planned. So that was kind of half of that $3 million difference, and then the rest of it was really a handful of kind of one-time items.If you look at our guidance for the second quarter, $205 million to $210 million, that compares to 2018 figure. That’s consistent with our original guidance that we gave in January. In fact, the nine months, as I mentioned in my prepared remarks, is unchanged from what we had said before. So it’s really just a combination of lower FAS 91 deferrals and then some one-time items.So as we move forward, depending on how the year plays out, there is commission incentive comp is variable, right, depending on how much revenue we create, that will be up or down.
So that is a swing item or a variable expense that will vary depending on when it ultimately. But it’s really just — it was $3 million above the high end of the range. So it’s not that significant. And the guidance forward we’ll manage expenses diligently as we always have.Daniel Tamayo I appreciate that. Sorry, I missed the — your comment in the prepared remarks on the stable from prior guidance for the rest of the year, but thanks for that. And then maybe a couple for Gary here on credit. First, the office portfolio, I appreciate all the incremental detail there. Just wondering if you had a breakdown of I know you mentioned it spread across the footprint, but what properties are in what cities or urban versus suburban, any way that we could get more detail into kind of the type of city that those offices are in?Gary Guerrieri Well, I mean the majority of the larger office facilities are in the metro cities, Daniel.
As mentioned in the remarks, I mean, 43%, almost half of that book is under $5 million. So they’re kind of scattered in suburban markets for the most part.But in terms of those appraisals, we had one with the leasing issues in Pittsburgh that came down. We had one in the Carolinas that came down. So it’s pretty much across the board.Vince Delie Gary, just to clarify, like you said, the majority — vast majority of our CRE exposure is suburban in nature. I know you said metro markets that we tend not to finance on a long-term basis, large office facilities other than our own. But I mean, we don’t — we’re not in that business, right?Gary Guerrieri With the average being $28 million, I mean that kind of speaks to the top $25 million to $28 million, speaks to the type of properties and locations.
We have very little urban big city centre type of office properties, very little.Vince Delie And our LTVs are very conservative. I think a portion of the portfolio that’s in construction fund up basically is typically secured by leases. We don’t do a lot of spec or hardly any, so that’s backed up by leases. And the LTVs are going to be a little higher on the construction pieces of the portfolio versus what we have in our book because we tend not to keep large exposures. We underwrite them to a permanent takeout.So I just want to make sure everybody understands that in the makeup of the numbers on the slide that we presented for non-owner-occupied series.Daniel Tamayo Okay. Terrific. Thanks for that. Thank you. And lastly, just a follow-up there on — not on office, but I guess the macro outlook overall, the reserves came down in the quarter, which was a little bit surprising, but just curious on your thoughts on the driver there of reserves down and then your thoughts on the overall macro outlook, I guess, relative to last quarter?Gary Guerrieri Yes.
Actually, dollar reserves were not down, and the reserve was down from $1.33 to $1.32, so it was down 1 basis point, still at $403 million. And we used some specific reserves that I mentioned in the prepared remarks, in terms of that 1 basis point. So we look at it as flattish. And when you include the unamortized loan discounts at $149 million, I mean our reserve position compared to peers is very strong.Daniel Tamayo Okay. So…Vince Delie There’s been 20, 25 basis points. If you look at our coverage level and versus the peers, that’s a significant buffer over and above where others have been carrying their reserves.Daniel Tamayo Understood. I got you. All right. Well, I appreciate all the color. That’s it for me. Thanks guys.Operator The next question comes from Jared Shaw with Wells Fargo.
Please go ahead. Timur Braziler Hi, good morning. This is Timur Braziler filling in for Jared. Maybe just continuing the last line of questioning on the allowance ratio, I mean, to your point, it is quite elevated compared to peers. I guess how much of a pending recession reserve is already embedded in your numbers, and I guess if we do end up in a more punitive macro environment, does that 25 basis point buffer kind of hold true as the rest of the group catches up? Or is some of that already embedded in your more cautious starting point?Gary Guerrieri Yes. We — Timur, we’ve taken a cautious position ever since we got into six months into COVID. We felt very strongly that it was going to be an issue for quite some time. We did not release reserves as other institutions did during that time frame in large sums.
And we looked at it from a standpoint that we wanted to maintain those reserves, based on what we saw coming down the road.And then we get into what appears to be naturally a softer economic time frame. So we’ve been able to maintain those reserves, they’re well within our ranges of being quantitative versus qualitative, and it’s an analysis that we go through each and every month. Actually, we rerun the reserve every week based on the changes in the portfolio week-to-week. So when you look at that position, we feel good about where we are, and we’re going to continue to manage it accordingly.Timur Braziler Okay. Great. And then, Gary one more for you, just following up on the line of questioning regarding the office book. I guess for the — you laid out 13% maturity in 23%, 11% in ’24.
I guess for those loans that are coming up for kind of maturity or refi cycle, what’s the new rate that they would be rolling into? And I guess, what’s the confidence in kind of the underlying occupancy and underlying trends that there is the ability to absorb the higher interest rate that they’d be rolling into?Gary Guerrieri Yes. We just did a deep dive on every single one of those larger credits during the quarter. And we had no downgrades, as I mentioned in the remarks around those credits. We manage them on a regular basis on a loan-by-loan basis. And so that most recent review, which reflected no downgrades, took into consideration those maturity walls, and the ability to reset generally in the 7% range.So we’ve got that built into those particular situations.
I’ll also mention that LTVs generally in the 60s, naturally, some of that’s going to take a hit when you have some leases rollout, but the sponsorship is extremely strong across that book, and we feel that it’s very manageable based on the most recent review, which reflected no downgrades, as I mentioned.Vince Delie Thank you, Gary, the question came up about our reserves relative to peers. I think it’s helpful to mention that our criticized and classified loan ratios are typically higher than the other banks because of our aggressive gradation, it doesn’t necessarily translate into net charge-offs.So if you look at over a long period of time, FNB versus the peers, we tend to run higher, but then have lower charge-offs throughout the cycle.
That’s a function our credit people being very aggressive and proactive in downgrading credits, which results in a higher reserve position. So the gradation really matters within the portfolio.Other institutions could delay or have delays in their assessment of risk and they won’t see the same level of reserves until the very tail end of a crisis. So it should be viewed as a positive, not a negative. I just want to make sure everybody understands that.Am I on path here, Gary?Gary Guerrieri No, I would agree with everything I said. I mean we’re very aggressive around the management of risk ratings, as you mentioned. And this portfolio is front and centre for certain and it has been for quite some time.Timur Braziler That’s good color. I appreciate that.
Maybe one for Vince Calabrese, on Slide 15, net interest rate sensitivity. It looks like the shock to both the 100 up and the 100 down increased. I’m just wondering what the dynamic is that NII benefits in both an upside and the downside scenario?Scott Free This is Scott Free, the Treasurer. It’s the inverted yield curve has kind of created a unique circumstance where the deposit rates finally moving up, in the down scenario, now we’ll start to get benefit moving those pounds a little faster than we thought.Timur Braziler Okay. Got it. And then just last for me. Any thoughts around the buyback, banks are kind of all over the place in terms of continuing it, pausing it. You guys are active in the first quarter. I’m just wondering if you can give any color as to what was repurchased kind of subsequent to March 8 and then what the outlook is for the buyback going forward.Vince Delie Well, I’d like to start out by saying if you look at our capital position, relative to others, we stand out because of the limited AOCI impairment and conservative management of our investment portfolio that we thought who’s sitting here with us.
So I think that puts us in a different position. We’re already CET1, we’re already — we’re bargaining, so we expect capital appreciation to continue to advance those capital ratios that gives us a little bit more flexibility than others. Having said that, we’re still very cautious because of the environment that we’re in.I’m not quite sure how things play out throughout the rest of the year. I’m a little bit cautious because I feel that we are headed into a recessionary period, and we’re seeing some slowing down in the economy in various sectors. So getting mixed signals. But because of that, we’re going to proceed very cautiously. But we do have the capacity to do it if we desire to do so, and if it’s beneficial to the shareholders. So Vince, I don’t know if you want to add any color to that, but.Vince Calabrese Yes.
No, I would just say, I mean, the 10% target that we’ve talked about, we still think is very appropriate given the risk profile of the balance sheet. So, as we move forward, we do, as Vince said, and expect that to kind of gradually build from here. We have capacity, and we’ll be thoughtful about repurchasing. We repurchased, we get comfortable with the environment, we’d like to be repurchasing in 11, obviously. So I think there’s definitely interest in having some of that deployed as we go through the year. It’s just going to be kind of a matter of when.Timur Braziler And just to confirm, none of the first quarter repurchase activity happened the market disruption started well before that? Vince Delie I will say, again, we’re in a different position than others fortunately.
