Thomas Iadanza: I think, those are really the one-time items or infrequent, whatever you want to refer to them as. But keep in mind, there was dual operating expenses running those multiple platforms as well as during the quarter. Once we get to a better place, which we’re pretty much right on the verge of, you’re going to have those being eliminated as well.
Ira Robbins: And I do just want to go back to your efficiency comment, Steven. If you look back a year ago, our efficiency ratio was 50% in the fourth quarter ’22, 60% this year, but relative to average assets, non-interest expenses declined in that same period. So, I mean, I think it is directly obviously it’s directly tied to the revenue environment that you described. But I mean we’ve talked about the headcount reductions that we’ve seen. The limited headcount growth over the five years relative to the asset growth that we’ve put on. So the efficiency ratio does tend to be more tied to just market dynamics and things, but structurally and what we can control, I think we’ve done a very good job.
Steven Alexopoulos: Yes. Okay. Wanted to ask you guys called out that the deposit pricing got a bit away from you, because of the system conversion. What’s the connection between the two?
Ira Robbins: We have a lot of relationship clients, which an organization our size should have. I think we have internal models as to how we look at pricing deposits. I think the focus largely on our frontline staff was on reaching out to clients, retaining clients, and some of the profitability metrics, as to how we think about engaging with our clients, how we want to direct certain conversations. We’re probably distracted based on client retention, and based on just conveying to clients what was going to be new, with regards to how they approach the different systems. That said, I think certain deposit rates from the exception pricing perspective got a little bit out of hand. And there wasn’t necessarily the focus that should have been on making sure that we were within our targeted guidelines as to what that pricing should be. That said, I’m very confident that we’ll get there very, very soon.
Steven Alexopoulos: Got it. Okay. If I could ask one last one, sorry for all the questions. So, I’m trying where that the NIM, Travis, you said it’s neutral in the short run, but Ira, you said multiple times your NIM should expand. I think you said very nicely once the curve looks more normal. How long are we talking? What’s the lag? I would think it would be sooner than later, but if we get a positively sloped curve towards the back end of this year, is it a 2026 story before your NIMs start to look more normal? I’m just confused why the Fed cutting rates, given how much you’re paying on deposits, you guys are one of the higher payers, isn’t more beneficial in the short run? Thanks.
Ira Robbins: Yes. I think right there’s the front end curve, I think coming down definitely is going to be impactful to us, but it’s the long end where we have a lot more that’s tied to. It’s definitely going to be a pretty significant tailwind for us as to how we’re thinking about where the net interest income is going to go. I think the commentary was more along. There’s some day count issues really that first quarter, as well as we’re not expecting much change within the first quarter as well. So once the curve does begin to normalize, we do believe that there’s going to be some positive impact to that net interest income and some margin as well. That said, they’re really not or forecasting anything to really change until the tail end of the first quarter, and there is that pressure from the day count right – off the bat as well.
Steven Alexopoulos: Got it. Okay. Thanks for taking my questions.
Ira Robbins: Thanks.
Operator: Thank you. One moment please. Our next question comes from the line of Nick Cucharale, Hovde Group. Your line is open.
Nick Cucharale: Good morning, everyone. Just a question on the non-interest income outlook. What are the primary drivers of the 5% to 7% year-over-year growth, and are you expecting a reversion of swap activity closer to the first half of 2023 as opposed to the back half?
Michael Hagedorn: So, the biggest driver would be, as I said earlier, stabilization in our non-interest bearing deposit balances. That was the biggest driver of net interest income.
Nick Cucharale: I said non-interest income?
Michael Hagedorn: You said non-interest income. I missed that. Sorry about that. So you can see that in our IP deck as well. It lays out the portions of that. Keep in mind that in 2023, we also had some one-time events related to some revenue recognition that aren’t going to repeat in the prior year, but I think when you look at the totality of our fee income, we feel very good about where we’re at, because it only generates about 10% of our total revenue. Sometimes, the increases in any one category get lost, but I do think given the lower loan growth that we have, swap income will be somewhat challenged and it will be replaced with things like FX, wealth management. And we have a very strong treasury management project going on in our company, and as we put on more C&I business, we would expect that to contribute to our fee income as well.
Nick Cucharale: Okay. And then just looking at the expense base, as you mentioned, some investments and some reduction opportunities throughout 2023, now that the core conversion is complete, what investments are you most focused on to drive the next leg of growth for the company?
Ira Robbins: I think a lot of them line up with some of the strategic imperatives that we talked about, right. I think when we think about the growth in the C&I and some of the specialty niche businesses that we have, there’s definitely some technology investments that we put forth. That said, a lot of it from a foundation perspective is already there. It’s just enhancements at this point for things that were already put in place, but really largely aligned with what we’ve talked about on the strategic side, mostly focused on some of the C&I stuff.
Nick Cucharale: Thank you.
Ira Robbins: Thanks.
Operator: Thank you. One moment, please. Our next question comes from the line of Manan Gosalia of Morgan Stanley. Your line is open.
Manan Gosalia: Hi, good morning. Can you talk about how you’re thinking about deposit betas and deposit mix as rates come down? Is there still a lag in how deposit yields come down as rates come down? Do NIB deposits start to rebound once we get to a certain level in rates? So yes if you can expand on that and just talk about how you’re thinking about deposit costs through maybe the first rate cuts versus the next few rate cuts?
