Damon DelMonte: Okay. And then did you say that with respect to the core margin, you could see a couple of million dollars of tailwinds from the restructuring on NII here in the first quarter?
Barry Ray: No, not in the first quarter, in the first year, Damon. 2024.
Damon DelMonte: The first year. Got it. Okay. And then so when you look at just the core margin, you feel like it bottoms here by like the end of the second quarter?
Barry Ray: That’s kind of how we think about it, Damon, that perhaps the core margin troughs in the middle of 2024 — first half of 2024.
Damon DelMonte: Great. Okay, that’s all that I had. Thank you.
Barry Ray: Thanks, Damon.
Charles Reeves: Thanks, Damon.
Operator: We have no further questions. [Operator Instructions] Our next question comes from the line of Brian Martin with Janney. Please go ahead, Brian.
Brian Martin: Hey, good morning, everyone.
Charles Reeves: Good morning.
Barry Ray: Good morning, Brian.
Brian Martin: Hey, just wanted to — a couple more on the margin, Barry. I guess the margin for the month of December, can you give us an idea of where that was trending? And then just on just the restructuring and the basis point impact of that restructuring. Did you give that maybe, I guess, can you put that, can you frame that up where that’s at if you think about where the December margin was since it wasn’t really in there?
Barry Ray: Yes. Our net interest margin in December was 2.15%, Brian. Now that had some negative adjustments in net interest income associated with it. And so probably closer to our really kind of between closer to 220 perhaps. I did not put the basis points on the benefit from the bond sale transaction. But again, it’s around $2 million of interest income for 2024.
Brian Martin: Okay. And that will be in the just throughout the whole year. So, okay, perfect. And then I guess, just secondly, as far as the outlook for credit. And I guess, can you just talk about — you talked about the special mention being de minimis this quarter is pretty negative, very low. Can you talk about where are the concerns? I know you talked about a couple of the credits that were downgraded in the assisted living front, but just kind of areas you’re watching a little bit more closely in terms of risk as you’re kind of staying in a certain time period here?
Charles Reeves: Sure, Brian. This is Chip. And Gary Sims, our Chief Credit Officer, is here in the room with us, and we’ll have him go ahead and walk through that for you.
Gary Sims: Hi, Brian, Gary here. Good morning. And as you noted, the migration from special mention to substandard, three relationships, two of them were in senior living, one was an office credit. And when we think about the question of where we focusing on potential risk in our portfolio, that really kind of crystallizes where we’re focusing our efforts in identifying risk we have seen softness in the senior living and the office CRE. On the senior living side, for the most part, it’s not about occupancy. It’s about the operating statement and operating expenses, more specifically nursing care. And then on office, it is, in fact, about occupancy for the most part. So I’ll stop, Brian. Did that answer your question?
Brian Martin: Yes. No, that’s helpful. Just need a little more color. Any specific areas that are more concerned, I guess, as you kind of look forward other than what you’ve kind of already identified or just sectors within the commercial real estate bucket?
Gary Sims: Sure. And good place to state there. As we said, one of the things we were encouraged with as we finished out the year, we didn’t see continued migration into the non-pass categories as we finished out the fourth quarter. That kind of gives us a picture that the portfolio, we’ve identified the risk in the portfolio and it’s not continuing to migrate. So we’re encouraged by that trend as well. Beyond office and senior living, we’re not seeing significant or material weaknesses in other categories at this point, Brian.
Brian Martin: Okay. All right. That makes sense with the slowdown. So thank you, Gary, for that. And then maybe, I don’t know, just Chip, if you said this I joined the call a bit late, but your outlook for all the hiring and the initiatives that you guys have put in place on the fee income side, can you frame up or just talk a little bit about your outlook on fee income this year? Or maybe just kind of the cadence of given what you’ve done, the groundwork you’ve laid, kind of how we think about the trajectory of fee income this year to kind of benefit from some of your actions?
Charles Reeves: We feel that — so I’d say on the noninterest income side, we feel really good in terms of a couple of areas there, primarily, I’d say, led by wealth management and we divide that business line into two different sectors. One, our investment services, which is really more of our brokerage area and then our assets under management within our wealth department. Our wealth group is growing nicely, assets under management coming into that area increased by about 60% on a year-over-year basis and primarily centered in a couple of our metro markets. In that segment, it was up about 10% from a noninterest income standpoint for the year of ’23. We believe and Len mentioned and noted that we just hired a new Head of Wealth Management as well that we believe will continue to maintain and hopefully accelerate some of that revenue drive.
