Craig Nix: Well, what’s going to happen is the accretion is going to offset some of the decrease or stabilization in expense. So what I would say in the fourth quarter you might see it matriculate up to the high 40s, low 50s, and then next year, I think, you’d see it in that same range per quarter. So I would think high 40s, low 50s for the next five quarters, and that’s really a function of just declining accretion income outpacing the expenses. We’re really satisfied with efficiency ratio in the low 50 to high 40.
Operator: And the next question goes to Christopher Marinac of I2BBA.
Christopher Marinac: I wanted to ask a question about being able to raise your loan yields related to deposit balances, and if they were to sort of go below certain levels. Are you able to do that or is there still more push on loan yields as we move into the next few quarters?
Craig Nix: Is your question around the yield or the balances? You’re saying push on loan yields. I mean, we continue to price loans in excess of where we’re pricing deposits. And are you talking about spreads?
Christopher Marinac: Well, Craig, I’m talking more about, I guess, in your loan contracts with new loans that — my impression is that there’s the ability to kind of push yields higher if compensating balances go below certain levels. It’s sort of a enforcement to get more deposits but also kind of have better pricing if customers start to pull funds.
Craig Nix: I think what you’re referring to is on the SVB side, and we have not pushed any on deposits to come back and to push those loan yields higher. I think, in general, there is obviously opportunities, it’s that market rates can continue to increase, so we price loans higher. The main opportunity for us right now is obviously in the fixed rate loan book where we reprice approximately 20%, 25% a year up on an ongoing basis, and we expect to continue to see that momentum going into next year.
Christopher Marinac: And then any other general thoughts about kind of where your adversely rated credits may go next year, would you think that they’d change and deteriorate or would you see them kind of stable from here?
Unidentified Company Representative: That’s not termed in the adversely classified loans, however we expect that to go next year. So obviously with the inflation pressures and elevated interest rates, we are seeing migration. We would continue to see that to some degree. And obviously, the areas that are most challenged are the ones Craig is referenced, which is certainly office and the small ticket equipment finance.
Operator: [Operator Instructions] And our next question goes to Brian Foran of Autonomous.
Brian Foran: I just wanted to clarify on the expenses recognizing it’s not like a formal ’24 guide, but just to make sure I am using the right base. When you say flat to low single digit as potentially an outcome, is that relative the full year at $4.12 billion to $4.15 billion or is that relative to 4Q annualized, which I guess would be about $4.5 billion?
Frank Holding: Brian, the way I am looking at it since we were not merged in the first quarter, I am comparing the three quarters of ’23 to the three quarters of ’24 where we are comparable, and that’s what I am saying is flat to low single digits up.
Brian Foran: So the nine months where the two companies are together…
Frank Holding: Obviously, if you looked year-over-year, we’re going to be up because the first quarter SVB we weren’t merged. So you are going to see — you could see a double digits percentage increase year-over-year given the first quarter.
Brian Foran: I initially plugged in relative to the full year and had you guys making like $250 per share and maybe got a little too excited. So I appreciate the clarification. That was it.
Operator: And our next question goes to Brody Preston of UBS.
