Manuel Navas: I appreciate that. Thank you.
Operator: Thank you for your question. [Operator Instructions] Our next question is from the line of Matthew Breese with Stephens Inc. Your line is live.
Matthew Breese: Hey good afternoon everybody.
Mike Price: Hey Matt.
Matthew Breese: I’m going to apologize upfront, I might have missed this. What was the loan growth guide for the year? And then what do you expect for deposit growth as well?
Mike Price: Our loan growth guide is probably low to mid-single-digits. And I used the word commensurate in my opening remarks, but it’s somewhat tied to how we do on deposit. I don’t think it’s too worried long term about growing deposits or loans, I feel like we can grow loans. We have a lot of engines. We build them over the years, and we feel like our capabilities continue to improve. This year, will probably be a little strained by liquidity, but we’ll have to fix that and solve that. and we’re resolute to do that.
Jim Reske: If I could just add to that. In our planning, we are planning for deposit growth to be just a little bit in excess of loan growth to gradually bring the loan-to-deposit ratio down. That’s the way we would like to play out.
Matthew Breese: As you look at non-interest-bearing deposits, the overall percentage of the pie, obviously, it took a step down this quarter. Are you starting to see signs of stabilization and/or where do you expect to see that kind of floor out?
Mike Price: Yes, I just like our deposit portfolio. I mean I think we have a slide in the supplemental deck, I talked about it. Our average deposit size is $18,000. $11,000 on the retail side, $68,000 on the business side, we’ll take tons and tons of that. And that’s what we call on. As a matter of fact, Jane and I and the people in the room here are all making calls tomorrow after our all-employee call and that’s what we do. And we get after it, and it’s fun. And so we expect to continue to grow that. In terms of how big the pie is, I think ours has always been pretty good, and we expect to maintain a good advantage with depository and a granular core deposit franchise, and that’s really important to the long-term profitability of our bank. Jane, what would you add? You’re the–
Jane Grebenc: Well, already, we’re starting to see deposit specials cooling off in the markets. It seems throughout in August, September, October, November that you couldn’t keep up with the special. They’re starting to cool. And I’m gratified by that. So, you’ve seen our exception pricing exceptions going down. I think that I’m optimistic that if we haven’t hit the floor, we’re very, very close when it comes to deposit cost increases and we are getting much better. I’ll take the views that were much, much better now at requiring the full relationship with the extension of credit because we’re still finding that our balance sheet is a strength. We’re still open for business. We just want to lend to relationships. We’re less interested in the transaction for the transaction’s sake.
Jim Reske: The other thing we’ve seen at this additional color is helpful to you is the responsiveness of the consumer rate. We see more response to this is some of the specials we have than we even probably would have. In other words, deposit pricing is all trial and air. You put up this rate. You think I’ll get — for x rate, I’ll get wide the volume of deposits. And we’ve seen more than we expected, which kind of tells you the competitive pressures are easing and that gives us the ability to be a little bit of pricing part to lower the rates we’re offering. So, that gives us some confidence to continue rates down.
Jane Grebenc: Yes, I also think that because our customer base by and large, has been with us for a long time. They don’t need the absolute highest rate. They need to be treated fairly and they want to find that they’re being treated fairly.
Jim Reske: And so one more thing that just kind of your question on that NIB as a percentage of total deposits. I remember a year ago, people were saying, well, you’re 33% where you think you’ll end 2023, and we are thinking about 25%. I think we’re 26%. So, that kind of comes up where we thought, draconian — back in 2003, it was 14% or so. And it could be, it just hasn’t played out that way. And given the granular it is and where it’s moved to this point, the NIB part feels pretty stable.
Matthew Breese: Yes, I guess might of cycle matters, too.
Jim Reske: That’s right. Thank you, yes. Exactly.
Mike Price: I just also feel our average size of $18,000 in the consumer and $68,000 on the business side. There’s just — there’s a different type of opportunity cost with that dollar amount versus a larger bank that might have deposits that are three or four or five times that size, maybe 10 times. So, just not as much money. And we do expect that attrition for that deposit cost to slow.
Matthew Breese: That was great. I appreciate all the color from everybody. The last one for me is just on — Jim, I heard you loud and clear kind of moving towards normalized charge-offs. Given some of the movement this quarter in the reserve specific reserves. Is this a good level, this 130 level for the year? Or do you anticipate maybe building a little bit? And I’m asking because I’m trying to get a frame of reference for the provision.
Mike Price: I don’t know that we’re expecting to build. I think our view is that we’re still 15 or 20 basis points higher than at least the peers we’re looking at in our region. But that’s not the determiner. We have a model. We run the traps, we are very thoughtful. We try to anticipate things that are around the corner. And we look closely at the stacks in the commercial real estate portfolio and all kinds of good stuff just to make sure we’re comfortable with where we’re at.
Matthew Breese: That’s great. I appreciate it. Thanks for taking all my questions.
Operator: Thank you. We have a final question from the line of Frank Schiraldi with Piper Sandler. Go ahead, your line is live.
