Gary Small: It’s very much reflected. We did a very detailed review in the fourth quarter of last year on all credits, a half a million and higher, so you can imagine that’s a big pile across the organization, and really got random through shock scenarios and so forth. What we are seeing is a few more credits. They’re still finding in the past category, but if there was a 120 coverage ratio that they needed, whether it’s fixed coverage charge or P&I payments and so forth, we might see them falling into the 110 to 120 or 105 to 120. They’ve still got cash on hand and payment as agreed, but it’s a narrower margin for error, if you will. So that’s the way I would classify it is there’s just been some movement into the, you were at 125 and now you’re at 118. And we’ll score that and move them on our grading system. No reason to think they can’t move right back into preferred territory, but we’re conservative on the moving there.
Christopher Marinac: Great. Thank you for all the background this morning. It’s very helpful.
Gary Small: You bet. Thanks, Chris.
Operator: Thank you. There are no questions registered at this time. [Operator Instructions]. Our next question comes from the line of Bader Hijleh with Piper Sandler. Bader, your line is now open.
Bader Hijleh: Hey, good morning, guys. Just filling in for Alex today.
Gary Small: Hey, good morning. Great to have you.
Bader Hijleh: I just wanted to touch on the loan book. What rates are you guys seeing new loans coming on the books and possibly if you have by commercial and resi segment? I know you guys mentioned the loan yields being 5.29% in March.
Gary Small: Bader, I’ll take that one. We were just in a board meeting yesterday about having a discussion about that. We were tracing all the new money business done on the commercial side in the second half of the year for 2023. And in each month, if it wasn’t $8 to $8.25, then it was $7.95 to $8. I mean, it was in that range. We’re holding or sticking to our pricing on that. And that’s without fee amortization and so forth. That would just be stated, right? So before to answer your question, we’re still north of 8. There is some competitive pressure out there as folks are seeing a little bit less in the way of opportunities in the marketplace and trying to take rates down, especially back when rates look like they may move in that direction back in January.
We resisted and what happened to the rate dip in January. That evaporated. So now it seems like everybody’s back generally in the same category as they were before. And we’re comfortable with that. There’s plenty of business there. On the residential side, we continue to move a bit with the elevated curve over the last six weeks. And if you were looking at a perfect pristine 30-year fixed commitment right now, it would be 735, 725. A number of them will not be as absolutely pristine as it takes to get that rating. And there’s plenty going off at 750 and so forth. Having said that, we saw March, as I mentioned, volumes were very good, whether that was pent up demand from a week or January or February or just seasonality. It was a good indication that there is acceptance for the rates that are moving out there right now.
And I don’t see that changing. It’s an intertwined issue, but it’s more about inventory. And the rates as folks get used to that, we may start to see more inventory come on board.
Paul Nungester: Hey, Bader, just real quick, just to clarify that yield we cited on the call. That was obviously the in place total portfolio average. So all of history, you got stuff that’s years old, 3s and 4s. That’s not our new production rates, obviously. That’s just where it stood at the end of March.
Bader Hijleh: Yes. Got it. Thanks. And then one more on, I know you guys on the release had the, I’m not sure if it was the repricing program that you guys touched on the start of the call. That’s, you did early in March to lower a deposit funding cost. Could you provide more color on that? Not sure if you have actually at the start of the call.
Paul Nungester: Yes, so in our deposit book, we’ve been slicing and dicing that, putting it into different buckets. So whether it’s private or pure consumer, commercial, etcetera. And if you go back to last year when we were growing deposits and had a lot of promos going on, things like that, and especially in the money market space, they had some guaranteed periods and whatnot. So we’ve been aggregating those into buckets as they’ve matured already or coming up for maturity and what have you and starting to roll those back. So if they were at a high rate, we’re trimming that a few bips here and there, testing the waters, to see how that’s going to hold, what kind of retention we’ve got. Early results are encouraging, as Gary said, and we’re going to keep at that. Bring in new ones in as they roll off, if they haven’t already, and even taking some second swings when we can.
