Operator: Our next question comes from Steve Moss with Raymond James.
Stephen Moss: Maybe just start more than just — maybe starting on the loan side here. I hear your expectations for a roughly stable balance sheet. Pipeline is still at a reasonably decent pacing those down a little bit quarter-over-quarter. Just kind of curious on the dynamics there, maybe there’s some payoffs or — and just maybe overall business activity.
John Buran: So the payoffs have been relatively stable the last couple of quarters. In addition, the pipeline, I guess, has been certainly impacted by the continuing rise of — in rates and our focus — we’ve been trying to work with customers with a back-to-back swap program to give them better at least initial rate while maintaining our flexibility with respect to interest rate risk. So I think there’s a number of dynamics taking place. And in addition, I think the — what we’re seeing is maybe a little bit of a slowdown of activity in terms of overall market.
Stephen Moss: Okay. Great. Appreciate that color. And then in terms of just the — on the expense side here with the benefit from the CAREs Act, just kind of curious how much of a step up, if you can give any color there, Susan, around that aspect? Is maybe $35 million, $36 million a better run rate for the fourth quarter to think about?
Susan Cullen: So the CAREs Act was about $3 million, $3.3 million to be exact. So yes, if I take the run rate that’s in the earnings release and at the $3.3 million, that would be about right.
Stephen Moss: Okay. And in terms of maybe going up to ’24 a little bit. I’m sure you guys are in budgeting process right now, but just kind of curious of the inflationary environment, I know you guys are trying to control expenses. Any early thoughts on 2024 you could share with us?
Susan Cullen: You’re right, we’re beginning to work on our budget. As we’ve said, given the rate environment, we expect some additional increases, but the compression in our NIM won’t be as great as what we’ve seen. We are focusing on our expenses, but we will invest in the company where we think it’s prudent going forward for 2024.
Operator: Our next question is from Chris O’Connell with KBW.
Christopher O’Connell: I was hoping to start off with the margin. So I hear the Fed keeps raising, there’s pressure, and it sounds like for next quarter, kind of that mid-single-digit core pressure for the last 2 quarters is reasonable. If there’s no more Fed hikes from here, what do you think the timing is for bottom? I mean, is this — do you think that similar compression in 4Q continues into the first quarter? Or do you think we’re getting to a point of inflection? Yes.
Susan Cullen: So Chris, what we’ve said is if the Fed has stopped raising rates. And so let’s say, the last rate was, I think, in September. So take 2 quarters for us to start expanding the NIM after the Fed stops raising right? So there would be a little bit of compression in the 2 quarters subsequent to stopping increasing rates and then expansion.
Christopher O’Connell: Okay. Great. And so the read in there would be maybe the rate of compression would slow into the first quarter from the fourth quarter as well?
Susan Cullen: Correct. That would be my assumption.
Christopher O’Connell: Great. And then you mentioned some of the seasonal factors. Can you just remind us what are the seasonal trends for your deposit base into the fourth quarter?
John Buran: Sure. So we’ll see the movement in the government banking portfolio, which will reduced somewhat toward the end of the year. And then at the very beginning of the — very, very tail end of the year into the beginning of the year, will expand again. So we’ll see some movement in that government portfolio of a seasonal nature that is kind of starting now, and we’ll continue into the — into December. And then as I said, it starts to expand again. The balances start to expand again in the first quarter of the year, actually January on. That’s typical.
