Mike Price: We do. I mean we’re not a market maker. We’re a taker. We’re in most of the markets we’re in there is sufficient volume and opportunities out there for us to compete. And we have a number of competitors both small and large that either don’t have the flexibility or desire to grow right now. So that’s where we’re at. It’s a good position to be in. And by the way that varies by geography. We have six markets capital region in Eastern PA, Community PA, Pittsburgh, Northern Ohio, Central Ohio and Cincinnati. And it does vary by geography but we believe there’s enough out there to comfortably hit what are lower loan figures this year and next year than we’ve done in the prior two years. Part of that is because we’re pretty balanced and we have any more a pretty full range of solutions for clients.
Michael Perito: Great. And then just last question for me. Obviously, the credit quality of your balance sheet remains pretty stable here. But as we think about the third quarter, there’s really been some not so savory data points from many credit card delinquencies, auto delinquencies obviously, Discover was pretty bearish on their earnings call. So how do you guys kind of approach the credit piece here? I mean obviously, you’re calling your portfolio and stressing it and looking at it, but there are starting to become somewhat obvious signs of deterioration. Obviously, that doesn’t directly correlate to your loan book, right, but could have broader implications for economy if continue, right? So I just would love some updated thoughts around the current credit environment. And yes, I was just curious how you guys are kind of approaching that just given some of the data points we’ve gotten in the last kind of week or two?
Mike Price: Well, we have Jane Grebenc, myself, Brian Karrip and others that have been through several cycles over 35 years or so in each. And this geography we’re in tends to do pretty well through cycles and has through – did through the great financial crisis in certain categories. We’ve really tightened and we’re a top fund credit across the board appropriately so. And there are – we do feel there’ll be some strain but probably on things in retrospect that we knew we should have done at the time. But we’ll work through it and – but we do think that there’s enough demand out there and the credit will hold up relatively well. Brian, do you want to add any color to that?
Brian Karrip: Just that we have seen delinquencies in the consumer side pick up, a couple of basis points, as we look at it and take it apart we know that our portfolio for indirect is up a few basis points, roughly 10 basis points quarter-over-quarter. But our portfolio is well underwritten. If you think about the strong FICO score in that business around 744 weighted average, you think about the granularity in the portfolio, the deal size, the go-to-market strategy, we feel pretty comfortable that we can see what we have in our portfolio and address any increase in delinquencies.
Jim Reske: Brian, if I could add just kind of looking over your shoulder or delinquency reports, this still is a little bit mixed. Overall consumer delinquencies are up as the categories you mentioned but somewhere down as well I think, right?
Brian Karrip: Yes, the HELOC category improved and we think our portfolio is in good shape entering into this credit cycle.
Michael Perito: Got it. No I think that’s very fair. I appreciate you guys all pitching in there and provide some color. It’s helpful. Thank you for taking my questions.
Mike Price: Thank you.
Operator: Your next question comes from the line of Karl Shepard with RBC Capital Markets. Your line is open.
Karl Shepard: Hey, good afternoon, guys.
Mike Price: Hey, Karl.
Karl Shepard: I wanted to pick up here on the deposit conversation. Jim, I appreciate kind of all the help and the sensitivities and the forecasting. But – what are you guys hearing from this field that gives you a little bit of confidence in the forecast. And I know the comment was I think slowing deposit pressures. But if you had to give it your best shot, when do you think deposit costs can peak assuming the Fed is done?
Jim Reske: We go right to the heart of your question on the deposit peak. The projections we have even in a falling rate environment they drift slowly upward. The analogy, I don’t think it’s a good analogy but it’s one I came up with is it’s like a motor boat, you shut off the engine it keeps drifting forward. Even if Fed cuts rates next year deposit – overall deposit costs will continue to drift up or just because of this rotation phenomenon that we’ve been talking about. That’s why, we’ve been trying to track it, understand it. I think we’ve been very successful in getting new dollars in the door and growing our deposit base like I mentioned, in my lead off — lead off to my comments, but it also reprices our own loan book and that’s going to continue next year.
So it doesn’t — in our projections, even in the fall in environment, we don’t see a peak it kind of levels off towards the end of next year. And then in a — if rates stay higher for longer, if rates don’t change from here in that environment, the deposit rates continue to drift up or it’s just that the loan rates ticked upward even at an even faster rate. And so that’s why, it’s better from a margin perspective for us.
A – Mike Price: Yes. I would just add and Jane is on the phone, I think her and the team have done a terrific job pivoting to deposits, bringing deposits in. And as you recall we got off to a late start simply because we had to prance under $10 billion with Durbin. And — but once we got focused, we’ve grown deposits pretty nicely from quarter-to-quarter and added a lot of new deposits. Jane, any color you want to add?
Jane Grebenc: Only that we have seen the request for deposit exceptions decline a bit, which tells us that competitors are slowing down a bit. And our retention rate on the CDs that we have been bringing in in our money market specials, the retention rates were very good. So, we feel good. You can never have too many transaction accounts, but we feel good.
Jim Reske: It’s Jim, again. If I could jump back in just because Jane mentioned, it our CD retention rate has been really remarkable. We retain about 80% of the CDs that mature. Now of that the ones that we retain, we’ve seen about 60% of those would go to the rack rate so they’re priced lower but about 40% will take the current special rate. But the retention rate has been really strong. That’s been really in our favor. Let me also just take a minute just to give you a little more color on that the whole deposit rotation concept, we’ve been talking about, because it really informs our projections for next year. So, if I look at the low-cost deposit categories really of noninterest-bearing and savings those together were about $4.6 billion, at the end of the first quarter.
