Frank Schiraldi: Hey guys. Good afternoon. Just one more on the NIM, if I could, in terms of — I just want to make sure I understand trajectory. It sounds like 1Q maybe sort of expectations for flattish results. And then in the absence of rate cuts, would you expect that that’s a trough for margin here in the first quarter, given what you’re seeing on the deposit cost side?
Jim Reske: Yes, glad you asked that, Frank. I mean the — generally speaking, if the rates stay high like this, that’s better for us. I would think personally, a Goldilocks scenario for us would be one or two cuts because that burst the bubble a little bit on deposit expectations and might take pressure off deposit rates. But like James said earlier, we’ve already seen some easing of that even without the actual cuts. But that was if you have a slow pace of rate cuts or no cuts, then that takes the repricing pressure off the variable rate portfolio and the fixed portfolio will continue to price upwards. So, that — like I said, that would be a good scenario. I guess to put it in a different way, if things play out the way the Federal Reserve keeps saying they will, which is if there are cuts, it will be slow, that’s good for us.
If the futures market is right and there’s a lot of cuts fast. Well, then that will take some time. Even then, by the way, our deposit base, we reprice eventually, that recovers, right? So, it’s just that the loan side will reprice downward in a fast cutting scenario faster than we will be able to move on the deposit side. Hope that pace the color on the pace of change and how the effect is steps a little bit.
Frank Schiraldi: Yes. No, definitely. And then in terms of the NII outlook, that you mentioned in your earlier commentary year-over-year for 2024. But what is the base case for that? Is that the Fed three rate cuts? Or how many rate cuts are kind of baked into that expectation?
Jim Reske: Our official budget forecast, which we stress has the Fed funds end of the year 4.25. So, it’s five cuts.
Frank Schiraldi: Okay. Okay. And then just a commentary, Jim, on the 20 to 25 basis points kind of more normalized charge-offs. So, is that — I just want to make sure I understand that’s kind of the expectation that we’re in a pretty normalized environment. So, that’s sort of the expectation for 2024?
Jim Reske: Yes. Yes, I would say, Yes, I’m kind of given the commentary from more of a long-term perspective. Over the long haul, that’s what I kind of think, given our mix of businesses. And I think we’ve used that figure for some time. We say it pretty often, we’ll leave it investors want to make sure we say it on the call so that we’re clear with the markets. That’s kind of our general expectation for the portfolio.
Frank Schiraldi: Okay. And then finally, just on buybacks. You mentioned where you were buying back stock debt below that level and obviously, thankfully, a bit away from that level now. And just — so does that just mean buybacks are pretty unlikely here where we sit today?
Jim Reske: For now. We still have about 18 million of authorization left. So, obviously, if there’s a dip in the price, we would see in action. But we’re going to see how the year plays out. And if we have spoke capital build, the AOCI has moved in the right direction last quarter, if that keeps going, our capital ratios keep coming up. if we’re able to call the sub debt, save some money on that and still have capital build, we might raise that 12.50 threshold to get back in the market and buy back some stock. Like I said, we’re not hesitant. We look at it as a capital management tool to manage capital levels, but probably less activity, you’ll probably say that assuming very little activity in the first half.
Frank Schiraldi: Got you. Okay, great. Thanks for all the color.
Jim Reske: Thank you.
Operator: Thank you. Thank you for your question. And ladies and gentlemen, that will conclude our Q&A session here for today. I would like to turn the call back over to Mr. Price for any closing remarks.
Mike Price: Just a couple of things. We appreciate your keen interest in our company and the time we get to spend together throughout the course of the year. It’s meaningful to us. Just would also just turn your attention to the deck that Jim and the team put out. There’s a couple of good slides on the investment portfolio, the securities portfolio, the granular core deposit franchise, which we feel is a gem of our company. And then there’s also some good color on commercial real estate on Pages 16 and 17. And I think particularly on the commercial real estate side, an average loan size of $5.1 million portfolio with very little in central business district, about $82 million of a $400 million-plus portfolio. And with the bulk of that residing in Columbus and Pittsburgh, just some good color on the portfolio, the debt service coverage ratios, the average rents really low by the standard that you’re used to looking at for perhaps some larger banks and just good risk control and perhaps these might be of interest to you.
But thank you again, and look forward to being with a number of you in the first and second quarter. Thank you, operator.
Operator: Thank you. And ladies and gentlemen, that will conclude today’s call. Thanks for joining. You may now disconnect. Have a great day.
