David Bishop: Great. Appreciate the color.
Mark McCollom: You bet.
Operator: Thank you. One moment for our next question. Our next question comes from Matthew Breese with Stephens, Inc. Your line is now open.
Matthew Breese: Hey, good morning.
Curtis Myers: Hey, Matt.
Mark McCollom: Good morning, Matt.
Matthew Breese: I was hoping to touch on expenses, the $670 million to $690 million guide, it implies an average quarterly run rate of roughly $170 million, so pretty in line with where we were in the fourth quarter, do you expect — with that in mind, do you expect the quarterly expense run rate to basically hold flat from here throughout the year or is there going to be any sort of undulation as the year progresses? And it’s important because our exit pace for 2024 into 2025 is impacted by some of this, so I’d love some color there.
Mark McCollom: Yes, sure, Matt. As you know, as Curt noted in his prepared remarks, I mean, we for the expense guide for the year, we have assumed that we’ll start to see some of the productivity enhancements from FultonFirst in the back half of the year. So in the first half of the year, I would expect to see expenses higher than what that kind of exit number is going to be in the fourth quarter of 2024 going into 2025. We also have, as a reminder, the first quarter kicking in in April, we have annual merit, which for us historically then always kind of takes second quarter expenses up a little bit, but as we work through FultonFirst. FultonFirst will have both growth initiatives, which tend to be a little bit longer term in terms of when those are realized, but the productivity enhancements, we’d expect to start seeing some of those come through in the back half of 2024 with then — more of them and the annualized run rate impact of those really manifesting themselves in 2025 and beyond.
Matthew Breese: Just along those lines, I’m curious, you’ve mentioned productivity improvements a couple of times, you’ve also mentioned kind of leveraging technology, can you give us some examples that are going to drive the overall productivity improvements across the bank?
Curtis Myers: Yes, Matt, it’s Curt. We have a lot of things that we’re taking a look at, so productivity could just be operating productivity contracts, different things that create opportunities for us from a cost or utilization standpoint. So it’s either cost or benefit realization from the activities that technology and digital platform provide for us. And then as we look at focusing the business on certain things, we’re going to have growth opportunities and we’re going to have expense opportunities as we move forward.
Matthew Breese: Understood. Maybe moving on to the NIM and just deposit balances, I would love some color on how DDA balances trended throughout the quarter, given where we are in the rate hiking cycle, it feels like most businesses and consumers should — if they’re going to move the rate, they would have already done, so I’m curious if you’re seeing kind of lag effect there, and it sounds like it will persist for a little bit longer. And then, I would love some color just on how the NIM performed on a monthly basis to get a sense for the NII starting point in 2024.
Mark McCollom: Yes, sure, Matt. So first on DDA, yes, you’re correct. I would say, the consumer — it feels like we’re nearing a trough on kind of that migration out of non-interest-bearing into interest-bearing products, so where we are still seeing impact is on the commercial side, where you still have, I think some of the remnants of stimulus money is migrating from non-interest-bearing into interest-bearing. As you know, we also had just kind of the seasonal impact in the fourth quarter migration in our municipal deposits book, which had a little bit of non-interest-bearing DDAs, but a lot of interest-bearing DDAs that migrated out as tax receipts were spent. And then remind me the second half of your question again.
Matthew Breese: I was looking forward the monthly NIM if you have it, because I mean, look, from where we are now NII wise, the guidance implies a pretty healthy step down in the quarterly pace of NII, and I just wanted to get a sense for kind of where we should end up in the first quarter, so I have a good idea for where the year will end up?
Mark McCollom: Yes, I mean if you think, our December NIM was within a basis point of our quarterly NIM, so really for us as we give our guide, as I said, our assumption, which may prove to be conservative, but our assumption is that, we’re going to continue to see deposit pricing pressure throughout our markets, which will cause our deposit costs to continue to increase even when you get to the back half of the year and start to see those first couple of rate cuts. If we’re wrong on that, that’s certainly going to provide upside to this guidance and will be refreshing that as the year plays out.
