Daniel Weiss: Yes, Russell, so I would say we’ve modeled, as I said, kind of with three cuts, we’ve modeled with zero cuts. And interestingly, it’s not as significant of a difference as you might expect. So, if we — the guidance that we provided last quarter, we assumed a June cut, a September, and a December cut. And, of course, December doesn’t really impact the ’24 at all. September is very — pretty minimal as well just because of the time the cut takes effect. And we’ve run through the loans and the deposits, there’s really not much of an effect there. It’s really the June cut that has some impact on the margin. And it actually doesn’t — you don’t see that until the fourth quarter. So, the difference for us between three cuts and zero cuts is about two to three basis points of margin improvement or decline, depending on how you look at it, in the fourth quarter.
So, working off of that mid-290s, we would say we would still be pretty much in line with that mid-290s, whether there are three cuts or whether there are zero cuts. To answer the second part of your question, if we think about the assets that would be re-pricing, we’ve got, obviously, securities, which we talked about, $100 million roughly per quarter, that are — those cash flows are kicking off and we’re reinvesting 2.5% yield into 8%, call it, yield in terms of funding loan growth. We’ve got fixed rate loan maturities over the next 12 months of about 10% of our fixed rate book, which is roughly $250 million. And so, that’s currently priced at about 460. So, think about 4.6% increasing to somewhere in the high-sevens, low-eights. And then, we’ve also got adjustable rate loans, about $300 million of adjustable rates there.
That’s part of our variable rate loan balances, but they adjust anywhere from six months up to five years, so we’ve got $300 million there with a weighted average rate of about 5.25% that would also reprice over the next 12 months. So, I think from an asset standpoint that’s what I would expect the fixed rate assets to be repricing upward. And I think your third part of your question, I think, I answered in earlier.
Russell Gunther: You did and impressed. That’s my way of trying to sneak in one more, which is on the expense side. I appreciate your guidance and commentary for the near-term. Jeff, you kind of teased the potential for some efficiencies in the back half. And while we’ll wait for that announcement, just given the steps you’ve already taken, could you address kind of potentially where you’d expect to get those, whether that could include branch rationalization, which we haven’t seen in some time. And then, does this result in a step down in expenses or does this kind of help keep the growth engine going while keeping the bottom line pretty tight? Thank you, guys.
Jeffrey Jackson: Yes, thanks, Russell. No, I think as you mentioned before, branch optimization, we’re always looking at that. Last year, we did a couple of branches, but we’re definitely looking at that for potentially something we would potentially take action on this year. There are some other things we’re looking at as well on some of our operational functions for some cost saves. And then, the one other thing we’ve kind of mentioned in the past is printing statements. We basically printed and mailed customer statements, business and customer statements for free. We have changed the business to where now they get them electronically. That’s saving us anywhere from $70,000 to $100,000 a month. And then, we’re also looking at that on the consumer side as well, planning to roll something out in May, once again which I think should be a nice cost save for us as well.
Those are just some of the things we’re looking at. We have a few other things that we’re obviously taking a look at. But yes, we’ve got a few cost save initiatives we’re working on.
Russell Gunther: I appreciate it, Jeff. Thank you, guys.
Operator: The next question comes from Casey Whitman with Piper Sandler. Please go ahead.
Casey Whitman: Hey, good morning.
Jeffrey Jackson: Good morning, Casey.
Daniel Weiss: Good morning.
Casey Whitman: Can you address how you are currently stacking just your capital priorities? What are your thoughts on potentially buying back shares this year? And then remind us what you might look for in an M&A partner? Is there any update there from what you’ve discussed previously with us?
Jeffrey Jackson: Sure, sure. So, just starting with our basically capital management strategy, obviously, our number one, we’re committed to the dividend. We feel like shareholders really appreciate the dividend and we’re very committed to that. Second is funding loan growth. As I mentioned before, we’re looking at mid to upper single-digit loan growth. And as the securities roll off about $100 million a quarter, we use that to fund loan growth, although with our deposit growth as well, we benefited from being able to pay down FHLB borrowings with some of that. Then, third would be M&A and then fourth would be buybacks. I would say as it relates to your M&A question, nothing has really changed. We’re always going to be very optimistic if the opportunistic, I should say.
If the right deal comes along at the right price and meets all our return hurdles, we are still looking in Tennessee, Virginia and then potentially filling in Ohio. Nothing has changed there. Obviously, I feel very optimistic about this year as it relates to M&A, but nothing to announce at this point.
Casey Whitman: All right. And just a follow-on for that would be, can you remind us the size range and the target that you might be interested in?
Jeffrey Jackson: Yes. Our typical target we look at is about $2 billion to $5 billion in assets, not to say we wouldn’t look a little bit bigger or a little bit smaller, but I would target $2 billion to $5 billion in assets.
Casey Whitman: Okay. I’ll sneak just one more in there. I think you mentioned some larger office loans paying off during the quarter. Can you just quantify those numbers and maybe remind us just the size of the non-owner occupied office book, better call it’s relatively small, but can you confirm that for us?
