Mark Ruggiero: In the first quarter, it’s probably a little under half. There’s $34 million, $35 million comprised of just two loans and then much smaller after that. So if I had to peg a number, I don’t have all the details in front of me. It’s probably around somewhere in the 30% to 40% range.
Laurie Hunsicker: Okay.
Mark Ruggiero: One of those we’ve already actually are in the process of renewing as we speak, and we think we’ll resolve and have a three year extension on it at really good debt service and LTV level. So one out of those two is already in the works of being renewed and we feel good about.
Laurie Hunsicker: Okay. And then what are the actual loan balances on the two commercial loans that came over? How big was the ABL loan? I mean, I’m thinking it’s $17 million. But do you have a…
Mark Ruggiero: The ABL was $17.5 million and the office loan came in at $11 million, but we wrote off $2.8 million of it. So it’s in NPAs at the.net, call it $8.5 million.
Laurie Hunsicker: Got you. Okay. And then was that Class A or Class B?
Mark Ruggiero: The write-off?
Laurie Hunsicker: Correct.
Mark Ruggiero: That’s a — the office — yes, that was a Class B.
Laurie Hunsicker: That was a Class B. Okay. And then I know you had $100 million in office mature in the fourth quarter. Was this $11 million or $8.5 million net loan one of the ones that hit a maturity wall? Was that what drove this in the first quarter or anything you can share on that?
Mark Ruggiero: Yes, it did hit maturity in the fourth quarter and we elected not to renew on that one.
Laurie Hunsicker: Got you. Oh, yes, you did say that in your comments. Thank you. Okay, great. And then just one last question. Just going back to the deposit side here. Just thinking about sort of the mix shift change and maybe just the overall, your loans to deposits sitting at 96% or if we’re backing out CDs, that’s 112%. How should we think about those ceilings? How do you think about as high as you want to get there? How should we be thinking about that? Thanks.
Jeff Tengel: Yes, I’ll start. We’re pretty close to being where we want to be. I mean, we don’t have a bright line on it, but we definitely would have a very, very strong preference at having a loan to deposit ratio less than one, which is why we’re very focused on growing deposits in 2024.
Laurie Hunsicker: Great. Okay. Thanks for taking my questions. Appreciate the detail.
Jeff Tengel: Sure.
Operator: [Operator Instructions] The next question comes from Chris O’Connell with KBW. Please go ahead.
Chris O’Connell: Morning.
Jeff Tengel: Hi Chris.
Chris O’Connell: Yes, I was just hoping to hone in on some of the fee and expense guide, specifically on the fees with the 1Q number being relatively flat to the 4Q number. Other income has been pressed up over the past couple of quarters quite a bit. I know you guys noted a couple of kind of seasonal or one-time-ish factors in Q4. How do you see that settling out into the first quarter?
Mark Ruggiero: Yes, the total fee income. I think the strength of the total fee income will continue to be primarily on the heels of the wealth management group. We mentioned in our comments the AUA being up to $6.5 billion. That should bode very well for strong revenues heading into 2024. And we’re not necessarily banking on significant increases, but we are optimistic that in this environment we’re continuing to see more of the mortgage production shift to saleable. Now, overall volumes are down, but we should see some level shift back to saleable and hopefully give us a little bit of lift on mortgage banking income. Our deposit fees, we feel, are very stable. We think there’s probably some pressure coming on the regulatory front, perhaps on overdraft, but I think we have already made changes and have most of that behind us.
So we might see some modest decreases related to overdraft. But all in all, there’s been good momentum on deposit interchange, ATM fees, etc. And then lastly, I was going to mention in some of the conversations earlier around pricing. We think this opportunity is — this environment gives us opportunity to think hard again about swaps for some of our commercial lending and whether we can shift pricing strategies to take on a bit more swap volume and generate additional fees there. So I think there’s a few levers there that bode well and have run rate for increase in the very near term, and that’s what’s anchored in our guidance.
Chris O’Connell: Great, that’s helpful. And then on the expense side, you guys mentioned the initiatives that you have going on, including the potential for some cost savings on the branch and fulfillment side. Any sense of the timing of how that could play out over the course of the year? And is those potential cost savings, is that embedded in the overall expense guide?
Jeff Tengel: They’re not embedded in the overall expense guide. So those would be just incremental savings that we would experience, and I think the facilities — on the facility side, that probably would be skewed towards the back half of the year or maybe even bleed into next year. So a little bit of both. On the procurement side, I think we’ll see some savings from that in 2024, but we haven’t put a number on that yet.
Chris O’Connell: Got it. Any sense of the potential range, even if pretty wide, as to what the magnitude of those cost savings could be once all said and done?
