Frank Schiraldi: Good morning. Hey, guys. In terms of the guide for NII, you mentioned no additional rate hikes. If we do get a November or December rate hike, I mean, I’m just wondering if that’s meaningful anymore in terms of what that adds on an annualized basis to NII. And maybe if you could just talk a little bit about how you’re managing the balance sheet sensitivity for the higher for longer rate outlook. Thanks.
Vincent Calabrese: Yes, I would say…
Vincent Delie: I’ll let Vince…
Vincent Calabrese: Yeah. I mean any rate movement, Frank, right, it’s late in the quarter doesn’t really do much for the fourth quarter. So there’s not much benefit that we get there. And with where rates are, I mean, it’s not that big of an impact even to next year. I mean if we look at our IRR position, we’ve been kind of gradually moving towards neutral as each quarter has gone by kind of naturally getting there. When you look at — when our IRR status will be out in the Q, I mean, the plus 100 ramp to a minus 100 ramp is around 1%, 2%. So there’s actually a benefit both ways because you have the rates on loans investment securities we’re putting on continue to be higher than the portfolio rate. So you kind of get benefits from that. But 25 basis points in the grand scheme of things, it doesn’t — it’s not going to do that much. And we’ll bake it into the guidance in January when we give it out, but it’s really not going to move the dial.
Frank Schiraldi: Okay. And then just thinking about the 4Q expense guide. Is the right way to think about that, you talked a lot about the investments being made. Should we think more about that as an acceleration of investments and potentially, so there’s a potential leg down in expense or given everything you guys are doing, is that just better to think about as a run rate at this point?
Vincent Delie: Yes. Vince, I don’t know if you want to cover?
Vincent Calabrese: Sure, I can comment on that. I mean, as Vince talked about, we’ve continuously invest in the company, you know that, Frank. You have been covering us for a long time. So it’s part of how we run the company investing to generate future revenue. And we’ve been able to do that, maintaining a very good efficiency ratio in the low-50s. So it’s just part of running the business. And the conversations we have internally are always focusing our CapEx spend where we can drive future revenue and investing in markets, right? We’ve added new markets through the de novo strategy through expanding our ATM strategy, [indiscernible] Virginia, Charleston and markets that are very attractive. So that’s also part of the investment is investing in those new markets, which then generates future revenue for us.
I mean the expenses in the fourth quarter, it’s always a — to the end of the year, it can be a little lumpy or finishing up incentive plan accruals and those types of things as it comes in. So when we do our guidance in January for next year, we’ll have a cost savings target as we have every year. I mean, we’ve taken out $60 million or so in cost as we’ve grown and created the scale. So that’s always part of how we run the company. And the initiatives that Vince talked about, the de novo digital investments, infrastructure to support that growth, we focus on generating that positive operating leverage and having a low-50% efficiency ratio. So it’s not easy, but it’s a focus within the company. And I think the investments have served us well.
So it will continue to be part of it. So it’s not really a step function to it, Frank, it’s a good question, but it’s really just part of how we run the company.
Frank Schiraldi: Okay. Great. And then just lastly, on the tax rate and the renewable energy transaction and totally get that just part of the deal, that’s just part of the economics of these tax credits that you get. Would you say that if I look at the 4Q ’23 guide, it’s a bit lower, I’d say, than your rate over the last several quarters except for this 3Q. Is that — would you say that’s kind of lumpy too? Is there kind of more activity expected in 4Q? Or is that just — has that business just ramped up to a degree where you could see that as potentially sustainable?
Vincent Calabrese: Yes. The fourth quarter level, Frank, is really tied to the same solar deal that we just closed in the third quarter. The bulk of the tax credit gets recorded in the third quarter, and then there’s carryover kind of smoothing out the effective tax rate for the year that also benefits the fourth quarter. And that kind of completes it for this transaction. But as Vince said, there’s a pipeline transactions that we continue to go after. And the team is already working actively on others that could happen next year and into ’25. So — but the 4Q is really just tied to this transaction and kind of the smoothing of it into the fourth quarter.
Frank Schiraldi: Got it. Okay. That’s helpful. Thank you.
Vincent Calabrese: All right. Thanks.
Operator: [Operator Instructions] Our next question comes from Brian Martin from Janney Montgomery. Please go ahead.
Brian Martin: Hey. Good morning, guys.
Vincent Delie: Hey, Brian.
Vincent Delie: Hey. Just one for me on back to the margin just for a minute, Vince, I guess, the — I appreciate the color on the abatement of the funding pressure here and — but I guess as far as the DDAs go, I mean, I guess, the contraction slowed a bit again this quarter. Just kind of wondering if you think we’re nearing a bottom there, just how you’re thinking about that in general and maybe just an update on kind of where new loan production is coming on?
