Chris O’Connell: I guess what I’m getting at is, you know, when you back out the digital transformation costs and the rest of, these one-time costs, as you’re getting to 4Q, ’24, 1Q, ’25, do you have a sense of what the core kind of, underlying expense run rate will shake out at?
Dan Dougherty: It’s a really good question, Chris. And I’ve been noodling on that for quite some time. I come up with around $148 million to $150 million as a range of core expenses by the time we get to ’25. Now again, that estimate is very dependent on the timing and success of our remediation project, remediation requirements. But I think that’s a good placeholder.
Chris O’Connell: No, yes, that’s super helpful. Thank you. And then, just as far as, really appreciate the color on the multifamily and office side in the deck. It looks to me that there’s on the rent regulated side and on the office side, no non-performers right now from what I could tell. How are you guys feeling about, the maturities in those two buckets, over the course of, 2024? Do you guys have a good look into, those borrowers and those credits? You know, it looks a little bit lighter on the rent regulated multifamily side, but about, roughly one-third give or take, of the office kind of matures this year?
Mark DeFazio: Yes, I would expect that with the exception of the credits that we want to keep and we reprice and keep it, because we have a high retention rate here. The rest of them will get paid off. And out of the over $200 million in the first quarter, some of it was multifamily as well and perhaps some office. So, we do not expect to be in a rollover situation where one cannot be refinanced, or we would not be interested in refinancing the credit.
Dan Dougherty: I would add further that our credit team has looked at each. If it’s maturing in 2024, we’ve already been in touch with the customers and we again, we don’t detect anything negative trends out there that, are material nature that to bring it to your attention.
Chris O’Connell: Great. And just, the timing of the GPG deposit, roll off, I know you guys covered Q2, and but just given, that there was actually, kind of surprisingly growth this quarter in that category. How are you guys thinking about the timing, of the rest of that roll off into the back half of the year? Is it going to be more weighted toward, Q3 or Q4, or is it pretty even across, those two quarters?
Dan Dougherty: I think based on our schedule, what we call B2C, by the end of the summer, by August, that should be complete. And then in the third and fourth quarter, the B2B deposit should be complete. But I would extend the B2C to the end of the summer to August.
Chris O’Connell: Is the growth this quarter in B2C or B2B or a mix?
Dan Dougherty: It was a mix, actually.
Chris O’Connell: Great. All right. That’s all I have for now. Thanks for taking our questions.
Dan Dougherty: Thank you, Chris.
Operator: Thank you. Our next question comes from Alex Lau with JPMorgan. Please go ahead.
Alex Lau: Hi. Good morning.
Mark DeFazio: Good morning, Alex.
Dan Dougherty: Hi, Alex.
Alex Lau: Staying on the GPG runoff schedule, what are your expectations for the quarterly pace of reduction in GPG fee income and expenses for the year?
Dan Dougherty: So, as you saw in the first quarter, we printed $4 million of fee income. I don’t expect that the decline in the second quarter, is going to be materially different than that. But then as you get into Q3 and Q4, it’s going to accelerate rapidly. Again, $8 million to $10 million is my forecast, for the entirety of the year. But I think that’s the best way to think about it.
Alex Lau: Great. Thank you. And on the $90 million increase in non-interest bearing deposits this quarter, where did you see that come from in terms of deposit verticals? And looking ahead, where do you expect these balances to grow, if any?
Dan Dougherty: A significant portion of that was from the BaaS side. So, some of it was from retail, but again, there was a good portion on the BaaS side, and it becomes part of the forecasted outflows over the remainder of the year.
Alex Lau: Great. Thank you. And then regarding the NPA that moved to current, were there any specific reserves, and do you expect any releases related to these loans?
Mark DeFazio: Yes, we’re hoping that in the second quarter when we report, we could release those reserves. But we wanted to season for a bit. It’s prudent to just let it season there, at least for a quarter. But as I said, we have substantial interest reserves now that go well, beyond the first quarter. So, yes, we’ll take a hard look at that, but we’re expecting it to get reversed, in the second quarter.
