Gary Guerrieri: Yes. As Vince indicated, we’re not in the leveraged finance business. We don’t have a private equity business. It’s really customers in our markets that we call on and have relationships with. So it’s been a very strong book of business for us.
Brian Martin: Got you. I appreciate all the color there. And then maybe just last one was on the commercial and consumer pipeline. I know you’re not giving any guidance on ’24, but just kind of given the growth this quarter. Just kind of want to see where the pipelines are at today relative to last quarter? Just how do you frame it?
Vincent Delie: Yes. We can — we’re coming off of a previous funding quarter. So typically, what happens is the pipelines we set. I think we’re down between 5% and 10% in most of the markets. I just looked at the statistics across the market and track it pretty rigorously. So I’d say down 5% to 10% but still building. I think when you look at the portfolio overall, the dynamics of our commercial loan portfolio, one, I think that attrition that slowed dramatically because of the climate rates. So that’s going to help stabilize the balances. That’s number one. Number two, I think demand for capital has slowed going into next year. So that’s part of why the pipeline have slowed — decreased a little bit, particularly, I focus more on the 90 days pipeline, which is down about 4% or 5%.
That’s what I tend to focus on because we look at it both ways, right? Total versus close in the short front. And I think it will build again going into next year, obviously, depending on what happens with interest rates and the economy overall. But I’m pretty confident that, therefore, be some build. And then the third thing I wanted to mention was that utilization rates have declined slightly, which is an indication, there’s a pullback. So we’re seeing in the commercial book, a 1% to 2% decline in utilization rates. And to me, that’s an indicator that the borrowers are kind of pulling back.
Brian Martin: Got you. And those pipelines — yes, the pipelines you’re talking 4% to 5% lower both for consumer and commercial? Or was that just primarily commercial?
Vincent Delie: No, I’m sorry, I was speaking only to commercial. Consumer is — the pipeline for consumer depends on which space you’re in. If we want to talk mortgage, we have more mortgage than we need stuff. We’re basically becoming more competitive to push off the balance sheet, right? So we’re more competitive in the conformance space, which impacts margin a little bit. It gets it off the balance sheet. So we’ve been very successful growing our consumer and mortgage business. So I’m not too worried about that. Small business has performed pretty well. The pipelines are up. That physician’s first program and emphasis on health care has kind of paid off for that group, we have some really huge pull that we brought on the head of our small business lending area has a specific expertise in health care, which is why we’re developing those products that I mentioned earlier in the call.
The pipeline there looks pretty good. And I think we do have an opportunity moving into ’24, as I said, in the small business segment, which falls under consumer to grow that book of business. I mean we have a boatload of small business customers across seven states. I mentioned 90,000 to 100,000 customers. So for our small business pipeline at the most recent quarter was at record levels, and I would expect us to continue to capitalize on that. I know it doesn’t contribute as much to the total, but that should bode well for the retail consumer bank. That’s where we are. I don’t — really, we’re not anticipating issues with the mortgage or — the mortgage is tougher, right, in the higher interest rate environment that the majority of the loans that we’re originating across a pretty broad footprint, our purchased money loans, and we’ve invested pretty heavily in the platform recently.
So we’re pretty confident we can achieve better than peer results in the mortgage business like we have. And then that leads to home equity opportunities and other opportunities in the consumer segment. And with the application that we rolled out, we also think that will help us in ’24. So being able to open a depository account and applied for a home metric loans simultaneously will help us originate loans in the consumer space.
Brian Martin: Got you. Okay. And the last one for me was just on the efficiency. Just it feels like given the comments about managing expenses and what we saw this quarter that we should think of the low-50% efficiency ratio is kind of a sustainable level here going forward?
Vincent Delie: Yes. We target — we’ve always said we target 50% to 55%. That’s what we hope to achieve. We want to stay obviously as low as possible, right, because we’re all incented to keep expenses well here as part of our incentive program. So I think that we’re going to be very diligent. But I also think that given our capital liquidity, our digital investment, what we have going on here, we need to stay focused on growing revenue as we move through this difficult time. We’re capable of managing risk very effectively. And I think we’re in a very strong position to grow as we move into ’24. So on the revenue side, I believe we’ll have an opportunity to manage — at least contribute to positive operating leverage outside relative to the peers.
So there’s expense build, but there’s also revenue growth coming along with it. So that’s kind of the strategy. It’s been the strategy for a long time. I know there’s periods where it’s lumpy and people ask in a way listen to your issues building. You can see the results over a long period of time we’ve been at an outperformer relative to the peers for a decade, I don’t believe. So anyway, that’s where we are.
Brian Martin: Perfect. Thanks for taking all the questions, guys.
Vincent Delie: Yes. Thank you.
Vincent Calabrese: Thanks, Brian.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Vince Delie for any closing remarks.
Vincent Delie: Well, I just — again, I’d like to thank everybody for the questions, very detailed questions, very good questions. So thank you for participating. I also would like to thank our employees again, I say it every time, but you can’t do this without great people. So I’m engaged and enthusiastic employees. No matter what basis, we come through at the end because we work together as a team. But thank you to the employees and the thank you to the shareholders for continuing to have confidence in us. We will continue to deliver as we move through these choppy years here. So, thank you. Take care, everybody.
Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.
