Glenn MacInnes: So I think in my comments, it was $78 million that we sold. And if you just do the math on the provision of $13 million, that equates to about $0.83 on the dollar.
Mark Fitzgibbon: Okay. Great. And then lastly, hopefully, there aren’t any more failed banks, but if there are, would Webster be a likely interested buyer in some FDIC transactions?
John Ciulla: Yes, Mark, it’s interesting, right? I just made the comment to Matt, that whole bank acquisitions are not a high priority for us. I do think that it would behoove us to just make sure that if there is a clear strategic opportunity that makes a ton of sense economically, I guess I wouldn’t exclude us, right? But it’s — I’m hoping there are no further failed banks as well. But I think, hopefully, if we keep executing where we are then the dust settles, I think we’ll be in a good position and have the right financial characteristics and strength to be a buyer of a good strategic bank if something happens that way. So I wouldn’t rule it out, but it’s certainly not on our game plan.
Mark Fitzgibbon: Thank you.
John Ciulla: Thank you.
Operator: Thank you. [Operator Instructions] Your next question comes from the line of Brod Preston of UBS. Your line is open.
Brody Preston: Hi. Good morning, everyone. How are you?
John Ciulla: Good morning.
Brody Preston: Sorry I joined a little bit late. So if I repeat anything, just feel free to tell me to review the transcript. But I did think, John, I think I saw you gave the shared national credit percentage at 12%. Do you happen to have, which you guys are the lead underwriter on, and the agent on.
John Ciulla: Yes, less than 5% of that.
Brody Preston: Okay. So less than 5 of the 12.
John Ciulla: Correct.
Brody Preston: To do that. Okay. Cool. And do you have and what the reserve on the office portfolio is at this point?
John Ciulla: We haven’t disclosed that number. Obviously, it’s moved up and it’s at a higher level than the overall portfolio. But we don’t disclose that, Brody.
Brody Preston: Okay. Glenn, could you maybe speak around what the puts and the takes will be as it relates to NII and the NIM going forward? Maybe help me better understand the cadence of fixed asset repricing throughout the fourth quarter and then through 2024 and what the impact of the loan yields will be to that?
Glenn MacInnes: Sure. Yes. Let me give you a sense of — and I’ll just look at the two dynamics that we have there, Brody, are fixed rate loans repricing. And that if you think about it, it’s about $1.3 billion a quarter, right? So if you think — you just think about that over the next couple of quarters, it’s about $1.3 billion repricing. And given our rate forecast, you’d probably pick up about 275, 250 basis points on that as it rolls forward right, over the next couple of quarters. And then depending on where the Fed is in the back end of the year, that might come in a little bit. But that’s that dynamic on the fixed rate loans. I think about it in terms of NIM, it probably supports our NIM by about four basis points going forward.
And then likewise, on the investment portfolio, you have about $300 million that is typically reinvested. And for that, we’re probably picking up about 450 basis points now. That will probably drop as rates change to like the low 3s, mid-3s. But there, again, we’re picking up about two basis points in NIM support going forward. So if I look at those two factors as well as the periodic book, which we’ll continue to reprice on the loan side. And then so you have that is going as a favorable tailwind. And then the wildcard here is the positive pricing, right? And so we do think — we did see it moderate in the fourth quarter. We do think it’s going to continue to moderate over the next couple of quarters. And then the Fed will begin to cut. There’ll be a natural like 90-day lag on that but we think the support that we have on the repricing side, reinvestment side will sort of moderate any pressures that we get under the positive side, at least for the first half of the year, and then we should actually — we should be well positioned.
But the Fed does proceed with cutting in the second half — back half of the year.
Brody Preston: Got it. Thank you for that. And then, John, I know you talked earlier about kind of the leverage loan and the sponsor specialty sponsor book. But I guess I wanted to better understand kind of like some of the final points on the details of the underwriting there and kind of the things you do to structure those loans to really give you protection. And I’m not expecting to speak to the specific credit, like you all were on the right aid credit files for bankruptcy, but like the ABL FILO notes in the market are trading at 92%, 93% of par. And so like market obviously expects very little loss. It looks like you guys and the other banks are positioned to kind of get paid back first. And it feels really well collateralized. So could you just kind of help us better understand the structure of those deals and what you kind of do to help protect yourself in the event that something goes wrong?
John Ciulla: Yes. I guess there’s a couple of questions there because you threw in the ABL deal at the end, right? And so that’s — I think that’s a completely different animal. You’re underwriting against liquidation value on a large retail company that’s kind of standard asset-based lending. I do think the market believes what everybody believes is someone will come in and provide this financing, and there will be an orderly liquidation and everyone will get paid out. And we’ve seen that story play over and over again. In Sponsor and Specialty business, I guess — it’s about the strength of the people, the continuity, we’ve been doing it for 20 years. We deal with sponsors we know who support credits and have expertise in the industries and sectors they’re in.
You’d be amazed at the level of diligence and detail we do in technology, if we’re doing a deal of Software-as-a-Service deal we’re doing third-party valuations of the software. We’re evaluating the contracts. The end users where we know the management team very well. We know the sponsors very well. We structured the deals that — so there’s some level of amortization. We don’t chase, as you know, the last couple of turns of leverage where the nonbanks are chasing, we play in a different market. So it’s just a combination of having the right people, a really disciplined approach staying in the swim lanes and the sectors that we know and understand and not moving off of that disciplined process. And it’s why, through the great financial crisis and through the pandemic and through this higher interest rate environment, we’ve been able to see resilience in that portfolio.
