Jeff Tengel : Yeah. I don’t think we’ve seen anything in the owner occupied that we’re concerned about. And often, there’s certainly nothing compared to the office, the nonowner-occupied.
Laurie Hunsicker: Okay, great. I’ll leave it there. Thanks for taking my questions.
Jeff Tengel : You’re welcome.
Operator: [Operator Instructions] Our next question will come from Chris O’Connell with KBW. You may now go ahead.
Chris O’Connell : Hey, good morning. Hate to keep being a horse on the office side. But just wanted to see if you guys had any color specifically on what look to be some migration or perhaps just new loans moved into the Class A classified category from criticized?
Jeff Tengel : I mean obviously, that’s something that we’re paying very, very close attention to and have our bankers all very focused on near-term rate resets and maturities. And as Mark said a little while ago, every loan is unique. And so the story difficult to paint the story with the same broad brush. So we’re being very diligent and trying to be very thorough in our analysis. So I think we’re going to have some continued ins and outs in that criticized and classified category. Yes. I mean, of course, we will. But as we sit here today, we’ve gone through all of that — all of the loans that have that near-term risk to it and feel very comfortable with our current classification.
Chris O’Connell : Okay, got it. On the —
Mark Ruggiero : And again, there’s only a handful of loans, too, just and I don’t think we gave the unit count, but that increase dollar-wise is primarily like two loans.
Chris O’Connell : Okay. Great. Thanks. And can you just remind us kind of $240 million of the seasonal muni outflows this quarter, when those should come back in and if you think that you’ll recapture the full amount of the seasonal outflows.
Mark Ruggiero : Yes, it’s a good question. Certainly, we expect to recapture a good portion of that. There is some money in the third quarter, municipal related that was, I’d say, kind of coined as temporarily pocked here that did outflow in the third quarter that we wouldn’t expect and that was about $80 million or so. But I do think the rest of that is consistent with where we saw municipal levels through most of the first half of 2023. So I would expect the majority of that to come back in at some point in the fourth quarter. But typically, we see a little bit of seasonality affecting our deposit balances in the fourth quarter, primarily on the consumer side and some of the holiday spending towards the tail end of the year, we may see a little bit of a dip on that front.
Chris O’Connell : Got it. And excluding the seasonal factors in Q4 that you’re referring to, on the overall kind of non-interest bearing deposit mix shift, I mean, it’s kind of consistently declined in order of magnitude over the course of 2023. Do you think that there’s still a little bit of mix shift left? Has it been slowing down over the course of the quarter and into the fourth quarter? What’s your view on how much might be kind of remaining over the next couple of quarters?
Mark Ruggiero : Yeah. It certainly feels as if the shifting is slowing down. I think what we’re seeing mostly drive the dynamic today is just the continuing repricing into the higher rate environment. So those CDs that were promotionally priced six-seven months ago, that is starting to mature. We’ll obviously likely renew into now a higher promotional product. So I think it feels to me like the mix is starting to slow. I’m going to say it’s 100% behind, but I don’t think that’s as big of an impact. But those deposit relationships where rate is important. I think you’ll continue to see those same customers likely getting additional exception pricing higher or on the CD book maturing into a higher rate CD. So I think the population of deposits that we’ve priced up will continue to be a bit pressured.
Chris O’Connell : Got it. That’s helpful. And on the expense side, I appreciate the guide into Q4, and I know it’s early for 2024. But I guess just in general, I mean, do you guys you started looking at 2024 in terms of expenses. I know there’s opportunities to add hires here. But is there also some opportunities that you guys are exploring on the efficiency side or ways to kind of limit expense growth given the overall rate environment?
Mark Ruggiero : Absolutely. Certainly, as we head into our budgeting process for next year and strategic planning and thinking about some key initiatives that to your point, we want to obviously continue to invest in. There are areas in the bank where we’re taking hard looks and we recognize there needs to be a very focused short-term view on expenses as well. So there will be less of an appetite to really look for any meaningful expense creep we’ll look at that very closely heading into 2024. And I do think there’s very practical areas where we can hold the line and/or decrease.
Jeff Tengel : Yeah, that was a bit of my comments about kind of getting back to basics and being more efficient and effective is looking at some of the areas that Mark just spoke about. We’ve almost doubled in size in the last three years or so. And we’re really taking a hard look at how we’re organized and are we being as efficient and as effective as we can be and making sure that we’re being really focused on that. I would also mention that to the extent that we do have some opportunistic hires that we think can drive revenue we would expect that to be incremental revenue over and above what we would be normally planning on in any sort of planning environment, whether it be 2024 or beyond. So they’ll bring revenue with them.
Chris O’Connell : Absolutely, thanks. Appreciate taking my questions.
Jeff Tengel: Thank you.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jeff Tengel for any closing remarks.
Jeff Tengel : Thanks, Anthony, and thank you all for your continued interest in Independent Bank Corp. and we will look forward to talking to you at the end of the fourth quarter.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
