David Turner: Sorry John, go ahead.
John Turner: Yeah, the rest of the portfolio, we did see some uptick in non-accruals. As David said, we’re still guiding to 35 to 45 basis points of loss in 2024. We feel good about that. I think the portfolio is performing as we expected, as it normalizes, and that’s occurring. Within EnerBank, we have a specific program that was associated with a single vendor, and it effectively was what I’ll call kind of a buy now, pay later program, where the customer entered into an agreement to put solar equipment on their house. There was a period of time when that equipment would be installed on the house. The customer did not make any payments. We exited that program in October of 2022 just based on our analysis of the risk-adjusted returns associated with it and the profile of the product.
It was just not something we wanted to continue. Well, now we’re beginning to see those loans reach a point where customers are having to make payments, and we are experiencing a little higher level of losses. But the losses with EnerBank are still below our expectations for EnerBank in general, and it continues to perform better than – at least consistent with, if not better than we had hoped when we made the acquisition.
Ryan Nash : Got it. David, maybe a follow-up on expenses. I know there’s lots of moving pieces in this scenario. I know you’ve highlighted that you guys have been doing work on it for a while, but just given the revenue headwinds that you’re likely to face in the beginning of the year, can you maybe just talk about what you’re doing? And while I know you might not be ready to give ‘24 guidance, do you think you could potentially hold the line on expenses and keep them relatively flat given the challenging revenue environment into ‘24? Thanks.
A – David Turner: Yeah, so I don’t think it should be a surprise to anybody that revenue is going to be challenging. That’s been out there for a while. We’ve known it, and as a result, we started working on our expense management and our continuous improvement program throughout 2023. In this particular quarter, unfortunately, we had some things that, the fraud, pension settlement, we had some equipment and software costs that won’t repeat at the level that we had, and some professional fees that we incurred that we don’t think will be repeated. That being said, we’re going to need to even double down on expense management for 2024. We’re not going to give you guidance for that, but I think suffice it to say, our reported number that we have for 20 — we should be able to have our number in 2024 to be underneath our reported number for 2023.
How much, we’ll give you guidance as we get towards the end of the year, but yeah, I think we can — we should be able to be underneath that number.
John Turner: I’ll just add, Ryan, we’ve demonstrated I think over time, a commitment to effectively manage expenses, and it’s our intention to continue doing that. We realize the importance of it.
Ryan Nash : I appreciate all the color.
A – David Turner: Thank you.
Operator: Our next question comes from the line of John Pancari with Evercore. Please proceed with your question.
A – David Turner: Hey, John.
John Pancari: Good morning. Good morning. On the fraud costs, if you could give us a little bit more color on that. Were they running higher than expected, than you had expected when you discussed them last quarter? And why are they – have they been persistent given the issue that you discovered? And also that $25 million per quarter of fraud costs that you flagged for 2024, is that brand new or was that already to a degree baked into your run rate expectation as you look at 2024, or is this brand new, given the longer than expected persistence of this issue?
