So, we are very smart I think in the approach that we took as to how we were going to leverage the infrastructure and technology base. So from a scalability perspective for us. We’re not paying per individual unit, we open up an individual account to a core provider somewhere. We really have a technology infrastructure that’s scalable here that’s focused on what that client experience is going to look like. And we’ll definitely drive outsized growth. When I talked about some of the commercial growth numbers in the consumer growth numbers, those are household growth numbers. Not even individual accounts. That was done during a core conversion when everyone hated mid-sized banks. So, I think there’s a lot of positive tailwind that we have, when we think about what we’re doing from our franchise value perspective.
So, I’m really excited about what I think the opportunity, is on the expense side of the book, but the revenue side is definitely going to begin to accelerate as well.
Michael Perito: Helpful. And then just lastly, kind of on the same line of questioning. You guys did the 5% to 7% loan growth target for 2024, obviously still trying to…?
Ira Robbins: Look at our fourth quarter originations. They were $2.2 billion [technical difficulty]
Operator: One moment please.
Michael Perito: Sorry, can you guys still hear me I lost.
Operator: Yes, just one moment please. [Operator Instructions]
Ira Robbins: Travis, can you hear us.
Operator: Yes sir, loud and clear.
Ira Robbins: Okay. Sorry about that.
Operator: Thank you. We still have Mr. Perito connected also.
Ira Robbins: Okay. Sorry Mike, we were hearing your question on loan growth, but it dropped out when you say we got….
Michael Perito: Yes. No problem. And I wish it was more just asking, it’s kind of same line of questioning, just the loan growth as you guys focus more. Kind of on pricing of customers and holistic kind of customer profitability et cetera. Like is there, is it fair to assume that like the incremental loan growth and the customer loans that you bringing on you guys would think with some of the deposit pricing changes et cetera, will be coming on at better kind of profit margins than they were in 2003, or is there like a lag to some of those impacts or how should we think about that dynamic?
Thomas Iadanza: You should expect that our spreads on those will continue to widen and increase and give you a little context around that. We have seen an uptick in that C&I pipeline and that business is probably 70% of what its high point was and it represents 65% of our total portfolio. And it’s across the – old business lines, especially in our healthcare and fund banking lines. So, we are starting to see the improvement and spreads are holding.
Ira Robbins: Mike, really just adding to that, when you think about the compression we’ve seen in the margin is largely a function as we talked about some of the mix-shift and some of the other repricing as maybe they stabilized, which they seem to have or go down. There really is going to be significant benefit to us. The new value margin that we put on is around 350 to 360, which reflects the ability that we have from a pricing perspective and how we’re going about it from a profitability perspective. The new loans that we put on, we’ve been able to bring on equal amount of funding associated with that. From a client perspective, so it’s not as even if we’re out in the broker market. So once we do get some stabilization, which we anticipate having on that mix-shift. There really is upside for what that margin looks like based on the fact that the new originations, as Tom mentioned, $2 billion came on at a spread of positive 3.50 for us.
Michael Perito: Helpful. And then just I wanted to clarify some quick and I’ll step back. But just Mike, can you repeat. I just want to make sure I heard it correctly just build rate assumptions – baked into the NII guide around Fed funds. And then just to be clear, Travis, you’re basically saying, like on the short-end, whether it’s two cuts three cuts it doesn’t actually have a huge impact. 2024 is more the long-end and then some of the back book and other dynamics that we’ve been discussing. Just want to make sure. I heard that all right?
Michael Hagedorn: That’s correct. And while we haven’t laid out specifically. And we expect the Fed to cut this amount on this date. I can tell you the first rate cut anticipate is 25 basis points, but they accelerate as the year goes on. So, we get larger rate cuts in the third and fourth quarters. And again, the biggest benefit to us would be a lessening of the inversion in the curve and a reduction in short-term interest rates. Hence why we took the cost this quarter to shorten our duration on our liabilities, are just funding generally, as Tom talked about around the mix of our deposits moving away from FHLB and some of our maturing where they were indirect or direct CDs that we had in the fourth quarter to money market in transaction accounts, and that was all done purposely to prepare the strategy for the Fed to cut.
Michael Perito: Okay. Thank you guys. I appreciate taking my questions.
Ira Robbins: Thank you.
Operator: Thank you. One moment please. Our next question comes from the line of Jon Arfstrom with RBC Capital Markets. Your line is open.
Jon Arfstrom: Hi. Thanks, good morning. Just follow-up on that, Mike, is that the liability shortening. Is that largely complete for you guys at this point?
Michael Hagedorn: It’s largely complete. There is another big piece in the first quarter is still to come. It was loaded front-end loaded, because we were preparing for this when we were putting on these liabilities was duration. Going back to the first quarter of last year. So, there is another piece in the first quarter, and after that it tails off by a bit.
Jon Arfstrom: Okay, good. And then on the same topic, Slide 13, you talked about the CD rate reductions in December. And then you have some more coming in – you’re saying maturing liabilities in the first quarter. What was the reaction on the CD repricing and is this maturity liability pieces that deposits as well or what is that and where can that reprice?
Thomas Iadanza: So, the customer impact on it, is yet to be seen, but I don’t expect it to be extreme. So to be really clear about that one year CD rate. The majority of the impact of that will be CDs that will roll. So if you remember from our previous comments. Back-in 2003 we put on several CD specials. Most notably, around 13-month duration and now those things are rolling at 12 and so we’re reducing the roll rate. We generally average between 70% to 80% retention of the CDs. When we’re in market, so I think there should be a prepaid tail there.
Jon Arfstrom: Okay. Good. And then Ira, it’s kind of a margin question, but maybe not. But it feels like maybe the deposit pricing pressure was a little bit more than you expected. But to me I look at it and I think about the numbers and maybe we’re at the bottom of the margin. So curious on that and then also curious about the trade-off decision, you talked about earlier about deposit growth against maybe some of the promotional pricing or things, you did together new accounts and bringing in deposits. Can you talk a little bit about that that trade-off decision that you guys made.
