We can bring on new clients, but we want to make sure we’re bringing them on at the right margins. It is not the right part of the cycle to give up your margin discipline and chase just like stand-alone EPS at the end of what could be a multi-year expansion. The soft landing is not off the table. But you could also imagine that by ‘25, we’re in a recession, right? I mean we don’t know what the Fed is going to have to do later in the year. So, we’re not going to drive capital levels down. But at these prices, if we have excess capital, we’re going to use it.
Matthew Breese: I appreciate that. And then turning to credit. I just was curious about the actual process for getting LTVs and getting debt service coverage ratios. Is the LTV at origination or is it more recent? If you have kind of an average age of LTV, that would be great. And then on the debt service coverage ratio, are those updated annually? So are those fairly fresh?
Christopher Maher: Yeah. So there are a couple of things, Matt. So the debt service coverage ratio is updated annually. If we detect an issue in a loan where we have a concern, we would go out and update the appraisal. Based on what we see in the portfolio, most of our appraisals are origination-based appraisals. We do not have a vintage chart, but we’ll think through that. Maybe we’ll add a vintage chart for our next investor presentation, just to give people a sense. But there’s not really a big cluster of loans in any one vintage. The other thing I’d mention is that, one of the reasons we feel comfortable about our office book is that, a lot of that book was originated after COVID. We were very careful to focus on like medical use and things that we thought for long-term durable kinds of office products.
So, we’ll work on a vintage for you. I’d also point you in the investor deck to the variety of stress tests that we do. So we kind of take these loans and stress test them and then look at the NOIs and the debt service coverage ratios post stress and those hold up really well. So we feel pretty good that whole income side of the equation, we are on top of, and it’s very current. The appraisal side would be subject to vintage, but we’ll think about getting on a table on that.
Matthew Breese: Okay. And then, Joe, I think you had mentioned that there’s nine and you can correct me if I’m wrong, there’s nine office loans over $25 million, you referred to three of them. I was curious in the other pool of what else is over $25 million. Is your any of those loans that have not passed? And I would love to hear thoughts on why, concern and any potential for loss content in your view?
Joe Lebel: So good news of the other loans, all the loans are passed. And I don’t — unequivocally, I can tell you at least the top three or four we’re really happy with. I’d have to go look at the other ones, but the fact that the rate of the past tells you pretty much the story. We’ve really had with the one exception in Q3, we’ve had really good performance in this book. And we talked a bunch about it, and we talk a bunch about the fact that a lot of it is in suburban markets, very little CBD, very little urban period. And I think that’s been a benefit to the book. And as Chris mentioned, we’ve got a lot of diversity in the book in geography, medical, credit, tenant, the whole ball of wax. So I think we’ve done what we’ve done, the money is out is performing. I just — and we’re on top of it.
Matthew Breese: And then switching to deposits. How much more in high cost savings with brokered is there kind of targeted to run off? And is the deposit growth guide all-in? Or is it just off of kind of the core deposits?
Christopher Maher: Well, the deposit growth guide is all-in. And I think that for the most part, we don’t have much in brokered. Pat can give you the number. But we’re not trying to drive that down quickly or in any material amount. So it shouldn’t be much of a headwind. The high-yield savings, I think there will be a little bit more of that running off in Q2, but nothing significant. And then, brokered is just going to wind down over the next several quarters.
Matthew Breese: Okay. And then last one for me. Look, a lot of your peers are waving in talent from some recently disrupted institutions, if you will. Are you seeing any of that come your way? Or is there opportunity to bring in some deposit gathering folks or commercial lending talent down in your neck of the woods?
Christopher Maher: I think there’s a great opportunity. And this is something we’ve done over the years, and we’ll continue to do it. And there are a lot of reasons that people kind of reevaluate where they are. But when you go through periods like this, really high-quality bankers sometimes have challenges wherever they are for whatever reason. And we have a lot of conversations and a lot of talk. And we’ve said over the years, and we mean it, when we find good people we hire them. And we don’t say, gee, we only have a budget for two people this year. But we don’t do the opposite either. We don’t just hire people because we think we’ve got to hire three bankers this month or something. So, I would expect you’ll see us continue to add talent from a variety of places.
Matthew Breese: Okay. Any — just any comments on how much talent? I know, Joe, you had mentioned, I think, handful. And I’ll leave it there. Thank you.
Joe Lebel: Yeah. I think the easy way to describe that, we’ve had a few already. We have an inside joke in the company that says that we don’t have a budget for talent and as Chris mentioned, all that means is that whenever we find talent, we’re going to try to hire them. So, if we can find good talent, we’ll add as many as we can add.
