Christopher Maher: Yeah. No, I don’t think — Chris, it’s a good question. I don’t think there’s any linkage there. We don’t expect any kind of going forward, unless there’s a change in the outlook, which frankly, we don’t see. So, the way I would think about it is if you look at the allowance this quarter, if we had just gone with the external observable factors, both the economic forecast as well as our history of charge-offs, you have might have made an argument to release reserves. We didn’t think that was prudent at this point in the cycle. So, our qualitative factors came up a little bit. But that’s kind of what’s going on. But quantitatively, it would have been the quarter where you could have considered releasing. I know some banks have, we just chose to be a little bit more conservative.
Christopher Marinac: Great. And then just a follow-up about overall commercial growth. Where do you think customers are now? I mean, we know there’s a lot of pencils down with the large regionals, but given that you may not want to do commercial real estate, as you mentioned, so just specifically in C&I, where is the customer attitude is? Are you dependent on them kind of being more optimistic in the second half of the year?
Joe Lebel: Yeah, I think we all are, but I think we’re seeing already the conversations we’re having are that customers are getting a little bit more optimistic. I think the other thing is, we’ve continued to recruit lenders largely from the nationals. And largely, what we’re hearing a lot of our — from our new folks is that, there’s a limited appetite for any type of lending at the highest level, which is beneficial for us as time goes on. It’s still a relationship business. So I expect that to be the case. On the CRE side, you know what’s fascinating. We’ve talked about this a bit. I think there’s a little bit of a limitation on banks wanting to do CRE, but there are plenty of alternative lenders in the space.
And one of the ones we talk about a bunch is the government entities, and we saw that a little bit in Q1, not that it was prevalent, but one of our better borrowers refinanced a $26 million transaction with one of the GSEs at 6% fixed with an extended IO period. We’re not pricing like that, and we’re not structuring like that. That’s still a challenge. But in today’s world, I don’t think that’s monumental, but it’s just something to be aware of.
Christopher Maher: I’ll make one more comment, too, Chris. The interesting phenomenon we’ve noticed among our long-term kind of generational C&I clients is the good news story to this is, they have virtually no debt. They paid all their lines and loans down. So that affects our earnings a little bit, because we’re not showing those outstandings. But these families have shared with us that they’re poised and ready. I mean, Joe, you might add to that. But there — at some point, they will become net borrowers again, and we hope that’s in the next couple of quarters.
Joe Lebel: We’ve told that story of one of our better C&I clients has been chasing two other acquisitions for peer years and not been successful. And now we finally believe he will be successful. And with his balance sheet and our ability to lend, I think he finally gets that opportunity. But it’s — people are cautious still. There’s still some of that in the market.
Christopher Marinac: Great. Thank you, again for the background here. Appreciate it.
Joe Lebel: Thanks, Chris.
Christopher Maher: Thanks, Chris.
Operator: Thank you for your question. The next question comes from the line of Matthew Breese with Stephens, Inc. Your line is now open.
Matthew Breese: Hey. Good morning, everyone.
Joe Lebel: Hey, Matt.
Christopher Maher: Hey, Matt.
Matthew Breese: I guess the obvious question is, how much more should we expect in the way of buybacks? I think you have a remaining $2 million — 2 million share authorization. So the first part is, is it reasonable to assume that, that gets exhausted by the end of the year? But the second part is just more of a philosophical one. I can’t remember the last time I saw OceanFirst buyback this many shares. And I would love to hear kind of capital strategy in light of valuation and the environment and in light of the other options you have on the table.
Christopher Maher: Well, it’s a great question, Matt. I think just a really simple answer for it. When we look at the value of our shares, we think there’s an opportunity there. We feel very good about the balance sheet. We feel very good about credit. We feel very good about our long-term prospects. And the sector, including us, is just trading at reasonably cyclical lows. So as long as we’re below tangible book value, it’s a very compelling investment decision. That said, to your earlier point, Matt, we’re a growth company, and we’re anxious to be back in the growth side. But we do get this opportunity as we grow loans in the second half of the year, we have the opportunity potentially with margin stabilization and a little bit of growth to see some earnings power as well.
So, if we’re returning to growth, you’re going to see earnings growth as well, which should provide some more growth capital too. So, we don’t want capital levels to drift up. We do have certain floors. We want to make sure we’re above. But trading below — substantially below tangible book value for us. It’s just a unique opportunity. And you asked about the outlook. Look, the first quarter would probably represent — I couldn’t see us doing more than that, because we do want to preserve capital for growth. But if we continue to do anywhere near that level by the end of the year, we would fill our current plan, we’d have to think about whether we wanted to do another plan. So I think it’s going to depend a lot on, believe it or not, kind of margins, structure and growth opportunities.
