Gary Guerrieri: Yes. I think, you know, let me start out, and then I can turn it over to Vince Calabrese. First of all, I think some of the things that we talked about in the prepared comments relative to acquiring new clients is a way for us to drive deposit balances. I mean, adding the ability to simultaneously open a deposit account with a loan application without additional keystrokes, that’s huge for us. So I think that’ll help. Once the field starts utilizing these tools and customers start engaging online and realize that they can do that, you know, it’ll increase our probability of capturing more of the client relationship, particularly the deposit side. So, when the loan request comes in, we’ll be able to act a little more quickly on opening the deposit account.
So, that’s one thing that we plan for, and we think it will help us as we move forward. If you look at engagement with the eStore, we looked at the — we rolled that out about mid-year. So, if you look at the six months in ‘22 versus the six months in ‘23 in the same period, and you compare the number of applications that we were able to obtain online, they doubled. We doubled the number of consumer loan applications, that’s without the deposit account opening capability, by the way. And 30% of those applications were with non-FNB customers. So, that’s one piece of it, the enhancement to the digital strategy. The second opportunity for us is really in small business and middle market banking on the TM side. We’ve invested pretty heavily in our treasury management capabilities.
We have some product capabilities coming online. We mentioned that we’re going to bundle products in the small business space in ‘24, probably towards the latter half of the year, we’ll be rolling that out. That will also help us grow deposit balances. And if you look at what we’ve done historically, we’ve historically grown deposit balances around the 10% — 8% to 10% range organically. So, I think, we’ve kept pace, like, with the organic loan growth that we’ve achieved, which is similar, right, over a long period of time. And I think some of the things that we’ve done strategically and entering into new markets that have more opportunities because of population growth and business formation, we’re going to be able to continue to achieve our objective, which is to fund our loan growth with the deposit balances that we secure from new customers.
I don’t know, Vince, do you want to add anything numeric, please?
Vince Calabrese: Yes. No, all I would add, Frank, is that we don’t get all the way to 100% in within our guidance. We’re in that 95%, 96%, 97% kind of area as you kind of forecast it out. But as we’ve done in the past, historically, when we got to 97%, going back a bunch of years, we took action this quarter selling the indirect auto loans creates more shelf space for us. I mean, that gave us a 1% in the loan deposit ratio. So we will manage that level. We won’t go all the way to 100. We’re in the mid-90s what’s baked into the guidance, as I mentioned, we’ll start to manage — we get to 95. We’ll look at what’s the environment? How fast are loans growing and what things action as we always have, just kind of manage.
Vince Delie: For us, it’s not a function — it’s not a question as to whether or not we can fund our balance sheet with deposit growth. We can do that. And we have the capability of doing it, it would just be a margin or whatever, right? So we’re trying to balance it all out right.
Frank Schiraldi: Got it.
Vince Delie: We’re very confident in good growth. We want to price up, we want to compete with everybody else out there, prices up our CDs and our money market rates, we could bring a lot of money in.
Vince Calabrese: We brought in $1.2 billion in new money.
Vince Delie: I mean, we — back half of the year, it’s a function of trying to manage it all so that we maintain relative profitability. Our goal is to outperform. So we’re not trying to give everything away or balloon our balance sheet. We understand what our funding constraints could potentially be. And the trade-off is margin. So we have to be getting it on the other side with the loan originations to justify it. That’s how we look at it.
Frank Schiraldi: Sure. Understood. That’s great color. Thanks. And then I guess just to follow up there, Vince, you mentioned the — making some room with the small sale of the loans. Obviously, you know, you’re always thinking about balance sheet optimization, but that being said, just wonder, you know, if this is — if you see more opportunities here in the near term to do just that. Maybe jettison some smaller pieces that for whatever reason, you know, the total returns not there. Is that a way in the near term to continue to hold the loan-to-deposit ratio where it is? Or do you see this as more of like a one-and-done in the near term?
Vince Calabrese: Yes. We spent a lot of time during the fourth quarter sizing what we wanted to do as far as the amount of securities and the loans that we would sell. So we don’t have any plans to do any additional sales that we’re sitting here today. I think we’re fine like Vince said, we have the ability to fund and grow the projects we’ve done in forever. So at this point, I wouldn’t say one and done forever, right, because we’re always studying the balance sheet, and if there’s opportunities, we’ll look at it, but there’s no plans right now. Like I said, we spent a lot of time sizing it and came up with what we executed on.
Vince Delie: If the rate environment enables us to unload loan yielding assets and we get a gain and we can roll that into something else. Sure, we’ve done that historically, we’ve sold over a billion dollars over the years. So we’ll look selectively, Frank, and we constantly look at the balance sheet. Our objective is to produce the highest returns possible, and we’ll look at opportunities to get out, particularly with indirect auto, the limited relationship, right? We’ll look at that and we’ll trade out of it, or we’ll pair it back, right? We’ve used pricing mechanisms to move the portfolio around, right? And we’ll see, it’s all a function of what the interest rate environment is, what demand looks like in higher yielding categories, what the risk profile of the balance sheet looks like.
We take all of that into consideration and make decisions based on that. But our plan is to manage in the range from a loan to deposit perspective that we have historically. We’re not looking to move outside of that.
