Vincent Calabrese: Yes, I would say, I guess, let me talk to…
Vincent Delie: I don’t know — go ahead, Vince. I don’t know which Vince, Brian was asking. Go ahead.
Vincent Calabrese: Well, I can comment on the loans. And then maybe, Vince, if you want to talk about the strategy on non-interest bearing afterwards, that would probably be good. The new loans that we made during the third quarter, it came on at 6.85%, which was up from 6.37% in the second quarter. So the commercial loans came on in the 7s and mortgages in the mid to high-6s during the third quarter, and those are kind of mid-7s as we sit here today, just given where mortgage rates are. So 6.85% is a pretty good level and above overall portfolio yields, so you’re getting that benefit coming through. I mean the overall portfolio rate on a spot basis were up 15 basis points with that higher level of rates on the new loans that we’ve made versus where the portfolio is.
And then we have a slide in the deck, Brian, that you’re familiar with. I mean the non-interest-bearing deposits has been to focus as long as I’ve been here and Vince before me. We’ve grown from 16% to — I think we peak at 34%. We were 26% kind of pre-COVID, right? And we’re going to work hard to keep that number as high as we can, and it’s just part of everything we do, every week at pricing, every ALCO meeting, every board meeting, so…
Vincent Delie: Yes. It’s actually on Page 13 in the investor deck point. We comment on a frequently, but if you look, it goes to what I’ve been saying strategically, our goal was to drive up non-interest-bearing deposits. Basically, I know during the lower interest rate environment, people didn’t value them as much. I used to talk about them all the time, talk about our performance here and people didn’t pay attention to the fact then, the benefit — the STP benefit wasn’t that great. But today, it really provides us with a pretty substantial buffer from a margin perspective. And if you go back to 2019, we were at 26%. Demand deposits, 31% and 20%. I mean, you then can see the surge coming in with stimulus. So we’re feeling pretty good about where we are.
We focused on client primacy first chance term. He has a trademark on that. So he calls a client primacy. It’s our internal strategy to make sure that we’re the principal depository bank and disbursement bank for consumers and businesses. And again, we continue to make investments in de novo branch locations to drive new households where we can be the disbursement back on the consumer side. We’ve invested in digital. We’ve invested in TM products and services, like I said, the payment hub that we put in place and some of the other products that we just rolled out that help us establish ourselves as the principal depository bank. That’s why these demand deposits don’t move around that much. So relative to others. They’re not — it’s not just cash parked here.
I mean, in many instances, those balances are being used to cover services, the balances have to remain to come in disbursements that go on throughout a month or a week. So it’s pretty much embedded. So we’re feeling pretty confident about our deposit mix here. That’s not to say there wasn’t pressure because when rates were lower, of course, companies and individuals, including myself, we’re a little sloppy about leaving their money sitting in demand deposits. So that’s changed. I think the consumers expect and the businesses expect to invest those balances given the returns they can achieve today. So I think we’ve demonstrated here over a pretty long period of time that we are a very solid depository institution with a heavy emphasis on low-cost funding sources.
Anyway, that’s — I hope that helps you.
Brian Martin: Yes. No, that’s helpful. It sounds like it still could go a bit lower, but still better than peer and holding up well. So okay. And then maybe — go ahead.
Vincent Delie: Yes. I think it’ll — I think we’ll outperform the peers. I can’t speak to where we’re going to be future — in the future because who knows what — if can predict interest rates, I wouldn’t be here at the trading bonds. But I think I think that we’re going to outperform because of our business model. So that’s…
Brian Martin: Okay. Got you. Okay. Makes sense. Maybe just one for Gary on the reserve. I mean the reserve was down a touch this quarter, still a pretty healthy level, inclusive of the marks, but just kind of wondering how to think about the reserve in conjunction with the strength in credit?
Gary Guerrieri: Yes. Brian, in terms of the reserve, I mean, it’s a constant focus from our perspective. At 1.25% and 1.39% with the unamortized discounts I mean it’s upper quartile, strong compared to peers. We feel good about where it is and the position of the portfolio here entering the end of the year. So I would expect it to continue to track similarly as we go forward.
Brian Martin: Okay. And remind me, Gary, I think there was a credit out there this quarter, some other banks with a SNC portfolio, how big your SNC portfolio is today?
Gary Guerrieri: Our SNC portfolio today is $3 billion. 40%-plus of it is investment grade and essentially the balance of it is essentially right up against investment grade. So that portfolio has performed extremely well. It’s extremely strong. Our focus — we don’t buy paper. Our focus is really on customers that we know and customers in our market. So that focus has really proven itself very well in that portfolio over a long period of time. We’ve generated significant deposits that Vince has referenced around that portfolio as well and continue to — it continues to perform exceptionally well. So very strong portfolio.
Brian Martin: Got you. Okay.
Vincent Delie: I hate to answer the question, though, because you can’t compare every bank’s syndicated loan portfolios. So on the buy side, in particular, we’re not a leverage finance player we’re buying participations if we participate in a deal because we think that we’re going to get ancillary business, we’re participating in bond economics. Their customers, one of the rules we have, is that our bankers have to have a relationship with the company. They can’t just rely on Bank of America or P&C to bring us into a deal. Those are — that’s a different type of portfolio than having a less in portfolio that you just go out and buy leveraged transactions and for yield. So to Gary’s point, we have a big chunk of investment grade credits in that syndication portfolio.
And then also, we lead a number of credits because we have a syndication effort that we looked out. So that would be included in that number where we’re left the — so all that needs to be taken into consideration.
