Tyler Wilcox: Sure, Terry. So a couple of thoughts just to maybe make some distinction there. The provision release did include some macroeconomic considerations where we take into consideration employment nationally, we take into consideration a queue factor there of CRE nationally. I would distinguish that with our view on our book of business. And so we see the growth coming from a broad-based segment of our markets. One of the reasons why we are satisfied with our kind of overall loan portfolio and our production is because of the breadth of — the breadth of geography that we have and the breadth of different businesses that we have, that portfolio of businesses approach that we’ve developed. So notwithstanding some of the small ticket leasing having a slight uptick in the credit issues, we see demand nationally in the leasing businesses.
We saw good growth, and we expect to continue to see good growth in the national premium finance business. And then on the C&I and CRE side, we continue to kind of have the — again, that broad-based market of Louisville, Lexington, Washington, D.C., Columbus, Cleveland, Cincinnati, and so forth. So the — I guess I would say the confidence in that 6% to 8% guidance comes from the strength of the pipeline that we’re seeing today. And historically, we’ve seen a little bit slower out of the gate. But if you look at the raw production, we think we have a chance to hit those numbers that’s pretty realistic.
Terry McEvoy: Appreciate that, Tyler. And then as a follow-up. Question on commercial real estate, specifically the nonowner occupied. What’s the amount that matures over the next year or 2 years? And how have you stress test that just to prepare the borrower for higher interest rates.
Tyler Wilcox: Yes. We have a — we’re pretty satisfied with our processes in terms of how we stress test the book. Obviously, in the last couple of years, particularly, we’ve had a lot of discipline around that. In the next year, there’s about $185 million that’s coming due in — over the next year and we feel good about kind of the strength of those borrowers and about $130 million in 2025. So a very manageable amount. And again, our kind of internal credit disciplines of reviewing the strength of the borrower, looking at debt service coverage ratios and all of the rest of the financial disciplines lead us to those conclusions.
Terry McEvoy: Appreciate the forward-looking financial guidance provided earlier.
Operator: The next question comes from Tim Switzer from KBW.
Tim Switzer: The first one I have is with your NIM guidance, assuming no meaningful changes to short-term rates. What would be the impact if in late 2024 or early 2025, we start to get a series of rate cuts, say, [3 to 4] 25 basis point cuts. How do you think the NIM would trend over the next year? Is it down initially as loans reprice lower? And then maybe some relief as deposits start to reprice? How are you guys thinking about that?
Katie Bailey: Yes, I think that’s right. I think as long as they stay in 25 basis point increments and don’t do a meaningful — but one meeting, which I think is our expectation on the go forward. I think the impact will be relatively minimal, maybe somewhere around 5%. So not significant to the — 5 basis — sorry, 5 basis points, not significant to the extent if they keep it to 25 for a couple of meetings and I think to your point, I think as we proceed through time, I think we’ll be able to recover some of that back through margin to the point you made on deposits. So our retail CD production is relatively short term. We won’t get the immediate benefit of those repricing lower. But in relatively short order, we’d be able to see some benefit and relief on that funding.
Tim Switzer: Okay. That’s helpful. And your expenses this quarter were a bit better than your guidance to be above that $67 million to $69 million range. Is there an opportunity you think for the rest of the year for you to be kind of at the low end of that $67 million to $69 million range in your guide? And what would kind of drove the better trends there?
Katie Bailey: Yes. I think there’s a chance for a quarter or 2, we might be on the lower side. I think we’ll be somewhere in the midpoint of that range pretty consistently through the year. I think some of the main drivers is medical costs for us in the first quarter came in a little softer than we had anticipated, which isn’t a bad thing. But I think generally, those kind of grow as we proceed through the year, which is why I don’t think we’ll see that benefit we saw in the first quarter each quarter going forward.
Tim Switzer: Okay. Got it. And then the last question for me. Your noninterest income guide of up 6% to 8%. Is that excluding net gains and losses so to take.
Katie Bailey: Yes. The excluding gains and losses on investment security sales and as well as kind of any other assets we would sell.
Operator: The next question comes from Manuel Navas from D.A. Davidson.
Manuel Navas: Just a follow-up on that fee guided. It’s a little bit lower than before. Can you just talk about the drivers there?
Katie Bailey: Yes. I think the big driver for that is electronic banking income. I think we’ve seen and consistent with what we’ve seen in industry publication, some compression or some reduction in electronic banking income, which is probably the main driver in that category. And couple that with a little bit softer mortgage market than what we had anticipated, although I think we see some signs that we might get some relief in that in the coming quarters, but those are the two main drivers.
