Tony Labozzetta: I would say we’re going to get synergies post-merger for start, and we’ll deliver on our expectation on those synergies. But for us, planning for Provident and the future growth, I would say probably the greatest investment, which I don’t think is anything that’s going to be monumental, is going to be investment in our technology as move forward, a new platform that’s going to be able to manage a commercial bank as we get into that $30 billion, $35 billion, even higher size. That’s the next steps for us and a lot more on data. But that is already largely in the works now. I don’t see a huge expense component on that. As we characterize it, there’s going to be some rises in some areas. There’s some declines in other areas. So how we allocate the spend more so than the incremental spend is the way we will look at it internally.
Operator: Your next question comes from the line of Manuel Navas from D.A. Davidson.
Manuel Navas: In the commentary on the NIM, you said your model is roughly pointing to stable across 2024. What do you kind of assume in terms of rates and deposit betas with that stability? .
Tom Lyons: Yes, there’s 225-point decreases in the back half of ‘24 there, I think in July and September, if I remember correct, for later part.
Manuel Navas: You said increases?
Tom Lyons: Decreases. We’re not modeling any more rate hikes, 2 decreases in the back half of ‘24.
Manuel Navas: And total deposit betas still like at 32% range? .
Tom Lyons: Yes. I think we bumped the expectation a little bit through the cycle, maybe more like 35% to 37% is the expectation, I think, is fair, given that the performance will lag a little bit behind what we were projecting this quarter.
Manuel Navas: You talked a little bit about deposit initiatives and kind of the focus of the company. Should this be kind of the peak of the loan-to-deposit ratio at 105%? Or is there comfort at this level? Just kind of talk about the loan-to-deposit ratio and its trend going forward?
Tom Lyons: We’re comfortable at this level given the overall liquidity faster of the bank. We have a low reliance on time deposits at this point. Overall, the reliance on the wholesale funding in terms of percentage of earning assets, percentage of average assets is really just getting us back to a more traditional funding base if you go back pre-pandemic, when we saw the surge in deposits throughout the industry as a result of the stimulus. So we are not comfortable with wholesale funding, but obviously, the lower cost alternative is always preferred. And as Tony mentioned, we have significant plans to try and grow the commercial deposit base.
Manuel Navas: And just do you have any extra color on the one commercial loan that drove net charge-offs. I think you’ve described it very briefly, but just anything you could add there?
Tom Lyons: My intention there was just to show that it was very much circumstances unique to that borrower. Nothing that I think you could read across to the border portfolio. There was a fairly heavy reliance on a primary customer that had made some strategic shifts in their need for services, which impacted the revenue stream, and it was challenging to recover from. So based on current performance, we took the right path.
Operator: We have a follow-up question from the line of Bill Young from RBC Capital Markets.
Bill Young: Just one quick follow-up, and apologies if I missed this. Do you have — what’s your sense for where expenses might trend in the fourth quarter? .
Tom Lyons: Think in the $64 million to $65 million range, Bill.
Operator: And there are no further questions at this time. Mr. Tony Labozzetta. I turn the call back over to you for some closing remarks.
Tony Labozzetta: Thank you, everyone, for attending our call this quarter. We look forward to chatting with you throughout the quarter and getting back on next time. Have a nice day. Thank you.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
