Jon Arfstrom: Okay. All right. Thank you very much.
Jim Ryan: Thanks, Jon.
Operator: [Operator Instructions] Your next question comes from the line of Chris McGratty with KBW. Your line is open.
Chris McGratty: Hey, good morning.
Jim Ryan: Good morning, Chris.
Chris McGratty: Jim or Mark, the comment about the force downgrades of the certain relationships, maybe a little bit more color there. I presume that’s the shared national credit book, but just a little bit of color on the regulatory guidelines you talked about. Thanks.
Mark Sander: As Brendon alluded to, about half of our downgrades this quarter came from the SNC review, all credits in which we feel good about and as Brendon alluded to, we already sold one. Frankly, I think we’ll sell another one this quarter at par. So we feel good about all those credits and yet, a little downgrade as the result of the exam. Other than that, you saw a little bit of risk migration but no concentrations. No — nothing to point to, just kind of a reflective of what’s going on in the broader economy.
Chris McGratty: Okay. And then maybe just Brendon on the balance sheet, you obviously have the ability to bring down borrowings. Not a lot on the books, but anything you’re considering in terms of retooling the balance sheet into next year with the securities portfolio or plans to kind of reduce that you talked about the $1.4 billion 12 months cash flows.
Brendon Falconer: Yeah, no major restructurings planned on the invest portfolio, but we’ll continue to manage that portfolio appropriately and take appropriate action there, but no major restructuring planned.
Chris McGratty: Okay. Great. And then maybe the last one. Lot of questions this quarter for the industry about the trough in revenues, net interest income. How are you thinking — without providing ’24 full-year, how are you thinking about just the cadence of the NII for the next several quarters?
Brendon Falconer: Yeah, as we talked about. So I think there is the 3% to 4% step-down. And then largely, I think this becomes sort of the fight for flat that we’ve kind of been talking about. I think that’ll — that’s how we’re going to be thinking about 2024. And if we get some rate cuts in the back-half, the four curve actually plays out, I think that’s where you start to see some upside.
Chris McGratty: All right. That’s helpful. Thank you.
Jim Ryan: Thanks, Chris.
Operator: Your next question comes from the line of Brody Preston with UBS. Your line is open.
Brody Preston: Hey, good morning, everyone.
Jim Ryan: Good morning, Brody.
Brody Preston: Hey, I just wanted to ask a question, it’s a little bit in the weeds, but just the $3.4 billion of the fixed-rate loan repricing over the next 12 months, it doesn’t quite put the call report bucket, I guess, like as I would have expected maybe in the three to 12 month. So I guess I wanted to ask kind of what’s driving that difference. And then also is there any kind of lumpiness to that $3.4 billion, is it fairly evenly distributed?
Brendon Falconer: Fairly evenly distributed. This is coming right out of our asset-liability management system, which will obviously include some prepaid fees assumptions in there, which is probably the biggest piece of what you see from a regulatory report versus what we’re sharing.
Brody Preston: Okay. Great. That’s helpful. And I appreciated the additional SNC disclosure on Slide 14. I did want to ask though, if you could give us any color, I know it’s a small book for you, but was there anything specific that drove the downgrades from the SNC review, like was it — debt service coverage related? Like, just looking for a little bit of color there.
