Daryl Bible: I think the increase that we have today was basically a review of looking at everything that we have out there. And I would tell you that interest rates probably was the biggest one. Labor cost was probably the next biggest increase. There was a little bit of increase in C&I as well. And then C&I, there was nothing idiosyncratic there. There was a mixture of – if you look at it, the largest 13 credits, seven different industries. So it’s pretty diverse from that perspective. So we feel pretty good overall with where we stand. Only 6% of our criticized has gone into non-accrual, at kind of what our historical numbers have been. And when I talked when – Gerard asked the question, we really feel good about our client selection.
We’re seeing our sponsors and clients really stand up and really support these credits. And we think that what we haven’t classified is the right direction. That doesn’t mean a few may not flip into non-accrual. But I think for the most part, we don’t really see a large period of losses. If we did, we would have had to put more in the reserves, and that’s – that what we’re seeing we’re projecting.
Ebrahim Poonawala: Got it. And I guess maybe one question on capital. One another regional bank earlier this week talked about the need for scale for regional banks coming out of what happened last March. You all have been acquisitive from time to time very in a very deliberate way. Just talk to us in terms of, one, appetite to do bank deals as they come through over the next 12 to 18 months? And secondly, like – do you see the landscape becoming rich with deal opportunities as we move forward?
Daryl Bible: M&T has always done acquisitions and have grown over the years. Our business model is really to stick to the regions that we’re in and to really meet the needs of those communities. And we like to grow share in those markets. So whether you need scale or not, I’ve been on both sides of that right now. And I would tell you that it’s not something you have to have, it’s something if it makes sense. I mean when you acquire somebody, you got to make sure it’s a good cultural fit, first and foremost, that is critical. You have to really make sure that if you get synergies that those come through, both on the expense and revenue side. So we closed on Peoples. We’re starting to get – got all the cost synergies.
We’re in the midst of investing now more into New England and Long Island. So we’re going to continue to grow that. It usually takes, I would say, 3 to 5 years to really get the total performance from these acquisitions. So we still have a lot of work to do from that. I’m sure down the road, M&T is a favorite acquirer, somebody might want to sell to us at some point. But right now, we got a lot of work in front of us. And we’re focused on really making that. It’s one of our top four priorities right now, and we’re going to do that and deliver that.
Ebrahim Poonawala: Excellent. Thank you, Daryl.
Operator: And we have our next question from Frank Schiraldi with Piper Sandler.
Frank Schiraldi: Good morning.
Daryl Bible: Good morning.
Frank Schiraldi: Daryl, you mentioned the considerations for getting back to the buyback. Is it reasonable to think that maybe the last trigger or the last consideration is the stress test [indiscernible]. And so just wondering, is the second half of ‘24, do you think the more likely scenario for restarting repurchases?
Daryl Bible: Frank, I would love to be buying shares back, especially at the level that we’re trading at right now. I think it’s a really good value. Right now, we just want to make sure that we go through the stress test, we find out where our limits are. We got to make sure there is a lot of uncertainty out there, and we just don’t want to go into a recession and if we do that, probably would hold back for those purposes. But – we’re in the midst of really making a really strong bank. We’re really changing it to be less relying on balance sheet, commercial real estate and really more driven through off-balance sheet products and services, and we’re growing our other businesses, both on the balance sheet and in fees, and we’re really excited about that. I promise you we will do share repurchases. I can’t tell you when that’s going to happen, but it is core to our strategy, and we will definitely do that when we think it’s appropriate.
Frank Schiraldi: Okay. And then just a quick one, if I could, on the deposits, non-interest-bearing balances. Just your thoughts on – you talked I think about deposit costs beginning to – or beta is beginning to stabilize. Any thoughts on levels of non-interest-bearing from here? Are you starting to see stabilization in balances around this 30% of total deposit number? And then as part of that, can you just talk about how trust balances played into the linked quarter change in noninterest-bearing, if at all?
Daryl Bible: Yes. No, that’s good questions. So we did see through the quarter – in the fourth quarter that our DDA balances were starting to stabilize. That’s one of the biggest components of what’s impacting net interest income is that migration from DDA into sweeps. Hopefully, that will kind of play out in the next quarter or two as that kind of stabilizes. I think when you look at the retail side of the chain, we still grow our CD book, that will probably continue as to rates really start to fall. You didn’t really see growth in CDs till we got over 3%. So we will probably have to go down a little bit before that growth following slows down a bit. But it’s important that we price that correctly. In our disclosures, we combine our retail CDs with our broker CDs and I did say in the prepared remarks that we probably plan to shrink our broker CDs over time.
So that category will probably fall throughout the year, but it’s probably driven more by non-clients. From a trust perspective, it had a modest impact on it. I would say it wasn’t that big of an impact from that. It was really just drop in more in the commercial space for the most part.
Frank Schiraldi: Okay. Alright. Great, thank you.
Daryl Bible: You are welcome.
Operator: And we have our next question from Erika Najarian with UBS.
Erika Najarian: Hi. Daryl, just a few follow-up questions, please. On the non line of questioning, I am wondering, what is your current assumption for downside beta for the first 100 basis points of cuts? And is there anything about this cycle where we can’t look at historical precedents in terms of volume reaction or cumulative beta reaction to the Fed easing?
