Erik Zwick: Okay. Thanks. And then, just thinking about the loan loss provision for 2023, let’s, I guess, kind of assume that the Moody’s forecast doesn’t change materially and that there’s not any material deterioration in the remaining credit in the portfolio. How — given the outlook for 7% to 9% annualized loan growth and that mix being a mix of both commercial and residential, how are you providing for each dollar of new loan growth today?
Chuck Christmas: Yes. Everybody — somebody had to bring up my CECL friend, but we have to provide a lot more on the residential side as a percentage of the loan balance than we do on the commercial side, primarily given the duration. Really kind of what we’re looking at assuming no significant changes in the credit, obviously, no recession, a nominal level of net loan charge offs, we kind of expect that we’d be providing for maybe 1 basis point or 2 basis point of increase in the reserve coverage ratio as we worked our way throughout the year.
Erik Zwick: Okay. Thanks. That’s helpful. That’s all from me today. Thanks, guys.
Chuck Christmas: You’re welcome.
Operator: Our next question here will come from Damon DelMonte with KBW. Please go ahead.
Damon DelMonte: Hey, good morning, guys. Thanks for taking my question. Most of my questions have been asked and answered. But just to circle back on the LPO strategy, could you just kind of go back over the locations and the timing regarding those?
Bob Kaminski: Sure. We hired some talent in Saginaw, Michigan in the middle part of the year and have been seeking to establish a physical location. Those people are currently working out of their homes. So, we’ve begun to enjoy some asset growth in that market. Similarly in Traverse City, Michigan, where we’ve hired a commercial loan manager who we expect will grow a team out there. We do have a mortgage presence there, and are in the process of securing a physical location to go with the personnel. So, we have had a commercial loan presence in Traverse City for some time, and we’re seeking to augment that. So, we’re both in each market in the early stages of growing out into a more physical presence from — early presence that basically originated from people working out of their homes.
Damon DelMonte: Great. Thank you. And then, with respect to the lending opportunities that you’re seeing, kind of tough to pinpoint the exact percentages here, but how would you characterize the opportunities coming from market disruption where you’re taking market share from other customers from — that have been associated with banks that have been acquired versus increased credit demand from current customers?
Ray Reitsma: I would characterize it that the majority — trying to further — think of the right adjective here. I’d say, if I just had to throw a fraction on it, somewhere in the two-thirds of new growth is coming from disruption in the market. Some of the larger players that we compete against are having trouble getting out of their own way and have, over the long haul, made it difficult for some pretty good customers to continue to bank with them. And we have been the beneficiary of that. And somewhere between a third-and-a-half is existing relationships that continue to grow and prosper, and, as a result, require more lending from us.
Bob Kaminski: And, Damon, those new client acquisitions take place over a period of time. In most cases, that the relationship is engaged and the lender or the salesperson works on building, enhancing the relationship. And it takes one more event that the incumbent bank does where they don’t respond in a timely fashion or they mess something up with respect to someone’s loan or account, and that’s less strong, and then they look to flip the switch and move to Mercantile, which the relationship has already been developing in many cases for some time. So, it’s a process, but as Ray said, we continue to benefit by the actions of — or in actions of some of our competitors.
Damon DelMonte: Got it. Okay. That’s great. That’s all that I had. Thank you very much.
Bob Kaminski: Thanks, Damon.
Operator: And with no further questions, this will conclude our question-and-answer session. I’d like to turn the conference back over to Bob Kaminski for any closing remarks.
Bob Kaminski: Thank you very much for your interest in our company. We look forward to speaking with you next at the end of the first quarter in April, and this call has now ended. Thanks, again.
Operator: The conference has now concluded. Thank you very much for attending today’s presentation. You may now disconnect your lines.
