Operator: Our next question will come from Christopher Marinac with Janney. Please go ahead.
Christopher Marinac: I wanted to ask if there is an internal limit on sort of the shared national credits and club deals and things of that nature. Just curious kind of if that is going to change at all as a result of last quarter’s experience.
Rob Edwards: Hey, Chris, it’s Rob. We do have an internal limit. All the segments of the portfolio have triggers and limits established. We are right now very low and quite a bit below the limit that we have established, and we really consider this one credit to be an outlier and not really representative of what we would expect from that portfolio.
Christopher Marinac: Great. And Rob, I guess just a general question about the reserve level. I mean given the reserve or the charge-off comments that were made earlier, does this reserve level kind of cover that? Or would you see kind of gradually increasing reserves next year?
Rob Edwards: So, we have increased the reserve by $40 million this year, and we did increase the reserve by about $50 million last year, really the reserve is driven by asset quality in general, portfolio mix, loan growth and now the sort of the economic forecast. And more recently, it’s been about the economic forecast. And so given the last two years, I could see the allowance growing. And I — my personal opinion would be with sort of projecting moderate to low loan growth that it would probably be more likely be the economic forecasting and economic experience that ends up driving growth, if there is any.
Christopher Marinac: Got it. And then just last question on credit is just related to kind of the combined substandard and special mention. I know it’s hard to compare with past cycles because the Company is so radically different in terms of your portfolio and scale. But is the criticized numbers combined, could those elevate next year? Or would you kind of think about managing those more stable?
Rob Edwards: So if I look — and if you look back on the chart, it was 4.1 at the beginning of 2020. If you combine the two numbers, you’re at 4.1% of the loan portfolio. And right now, were at 2.9. So, I would expect the numbers to increase. It sort of feels like we’re at a low spot at the moment, I would call it more of a normalization than anything else.
Operator: And our next question will come from Russell Gunther with Stephens. Please go ahead.
Russell Gunther: Just a follow-up. I appreciate the commentary on Navitas losses and how you’d expect that to trend. So as we think about that normalizing in the beginning of next year, and potential credit migration in the core bank. How are you guys thinking about aggregate charge-offs on appropriate range in ’24?
Rob Edwards: So I think what we have said previously is that we would see ourselves as a 30 basis point loss rate through the cycle type of experience. And so that sort of is how I think of it if things normalize. Now if I take out this outlier, we were at 20 basis points last quarter and 17 basis points this quarter, and that’s with Navitas sort of higher losses from the transportation sector included. So — but that’s what we’ve said in the past is sort of a 30 basis point business.
Russell Gunther: Okay. So no change to the outlook there. Got it. And then just a follow-up on the margin conversation. Jefferson, I appreciate the high-level commentary. Could you just share a bit about what you’re anticipating in there from a continued remix perspective out of noninterest-bearing and then how you guys would expect the loan-to-deposit ratio to trend for peer. Do you want to actively manage around 80%, could that drift higher? Just some updated thoughts.
