Gary Guerrieri: Yes, Daniel, the slight increase was really one credit that we moved into that category. At this point, it’s not a concern for us. It’s a credit that is extended out already another five years. It was originally underwritten at a 52% LTV and it’s fixed through a swap at 4.5%. So they had one tenant move out. They’re working on replacing that, but we felt it appropriate naturally to replace that in a rated credit situation. The LTV on it was, like I said, right at about 50% going into the thing. So that increased that 9% criticized to right around 11%. In terms of the portfolio, the portfolio in office was down $37 million in exposure and down $15 million from a balance perspective. So we have seen some loans pay off in that category as we’re managing that book of business. And with the performance of it, where we sit today at those very low levels, we’ll continue to be aggressive around it and manage it appropriately.
Daniel Tamayo: Okay. That’s great color. Appreciate that. And then maybe, Vince, on the swaps that you have in place that are going to impact 2025. Just curious if you could provide a little color on how much impact do you expect those — the rolling off to potentially have on the margin in 2025.
Vince Calabrese: There’s $1 billion, $1.2 billion of swaps we have, they’ll mature throughout ’25. The $1 billion actually within ’25 and those are received rates are around 75 basis points to 1% currently. We put those on a while ago. Luckily, we didn’t do a lot of it, but we had some of that we did put on. So that negative drag will come off really starting in January. There’s 250 that comes off in January. And then the rest of them by October, the rest of the $1 billion kind of rolls off. So that will be additive I can’t do that math in my head, but that’ll be in next year.
Daniel Tamayo: Got it. Okay. So $250 million in January and then the last $1 billion in October. That’s it for me. I appreciate the color. Thank you.
Operator: And our next question comes from Kelly Motta from KBW. Please go ahead with your question.
Kelly Motta : Hi, good morning. Thanks for the question. I was hoping to dig in a bit more into your fee guidance, how you notably took that to the upper half of the range. Just wondering which areas have been performing a bit better than maybe you had expected at this time last quarter. And where you see the greatest opportunities to continue to pick up some nice fee diversification and help with fee growth?
Vince Delie: Yes. You hit the nail on the head diversification is the answer. We built out a pretty broad set of fee-based businesses over the last decade. Capital markets I mentioned in the prepared comments, we added a debt capital markets platform. So we could participate in bond economics for some of our larger clients. And as you know, the capital markets opened up, and there was quite a bit of activity there in the first quarter. So we benefited from that business unit that we’ve built out a few years ago. Syndications, ebbs and flows. But as the pipelines build, our pipelines are up about 15%. I would expect there to be more syndications activity as we move through the latter half of the year. So we’ll get some benefit there.
We have a pretty robust derivatives program where we have structuring teams in the marketplace that provide counsel to clients and help them address interest rate risk. And that particular group did pretty well this quarter. So surprisingly, given the rate environment, they were able to do some interesting things for clients to help them as we move through this volatile rate cycle. The mortgage company, one of the strategies we mentioned this kind of goes back to Frank Schiraldi’s comment about the balance sheet and how we manage loan-to-deposit ratios, but we became much more aggressive on salable mortgage loan pricing. We gave up a little bit of margin but moved quite a bit off the balance sheet. So they’re contributing from a pure volume perspective because we’re positioned in some very attractive markets.
We continue to see a lot of purchase money activity where in our legacy markets, there’s not a lot of inventory. So we’re not seeing a lot of action. But in the other markets in the Southeast and the Mid-Atlantic regions, we’ve seen quite a bit of pickup. So that’s contributed. SBA had a very solid quarter. Some of the loans that we originated with higher yields in the construction phase that were built — basically based on building something that had construction draws associated with them became salable. So we moved some of that off with a decent gain. And then the treasury management business that we’ve been talking about, we’ve received a lot of Greenwich Awards for treasury management over the last few years in the small business and middle market segments in particular.
We continue to build out that business unit. We’ve added personnel. We’ve built out our merchant services business, we’re getting nice contributions from merchant. And kind of the strategy here was to offset the consumers that we see declining like overdraft fees and other fields with higher value fees for customers from our — that’s our opinion. But we kind of focused on building that out from a treasury management perspective, and then going after small businesses, we have 90,000 to 100,000 small businesses in our portfolio. We have a tremendous opportunity to go in and drive a broader relationship through the eStore. So we’re now focusing on building out a bundled product for small business that will include treasury management and merchant as part of the bundle.
So — those are the things that — I mean, there’s a lot of work that goes into it. We’ve got quite a bit of granularity and it gives us confidence that we can hit the upper end of the range on the guide. I think it’s 350, right, [indiscernible]. So it’s annualizing the first quarter, which usually the first quarter is weak, weaker than others. So we’re pretty pleased with the quarter we sit. Sorry for the long answer, Kelly.
