Jeff Jackson: Yes. We are very bullish about the treasury management products. We’re just starting to roll them out in fourth quarter. We expect to see a nice benefit in next year in 2024. But that’s one of the reasons we’re rolling them out. And with our focus on C&I lending, we do believe that that’s going to drive some nice deposit growth for us. We’ve also, as I believe, I’ve mentioned, really retooled our treasury team, turning them more into a sales function, before I think it was a little bit more of a support function. And so, we’ve kind of reorganized that. And so we do believe that, that should give us some nice deposit lift next year.
Karl Shepard: And then as a follow-up, we talked about loan growth a little bit, but I’m just curious if you could parse out what the contribution you expect from some of the newer lenders and LPOs is. Is that, what’s driving the loan growth or is it really broader than that? Thank you.
Jeff Jackson: I think it’s broader than that. I do believe the LPOs, as I mentioned are 25% of the current pipeline. So I do believe they will drive more of the growth, but I believe it’s the whole company, right? So we’ve seen nice CRE growth through that group. And other areas, other markets are driving nice loan growth as well. But I do believe the LPOs are kind of an accelerant to our loan growth and should contribute pretty solidly next year.
Operator: The next question comes from Daniel Cardenas of Janney Montgomery Scott.
Daniel Cardenas: So I noticed your securities portfolio has kind of been declining here over the last several quarters. Just wanted to get a sense of what kind of maturities we can see here in Q4 and how are those proceeds going to be put to work now that your securities to asset number is sub 20%?
Dan Weiss: Yes. Great question, Dan. So, and Jeff kind of alluded to this earlier that we expect and we’ve been seeing the securities portfolio kick off about $100 million per quarter. And I would say that’s probably 50% maturity, 50% just amortizing securities, cash flows from principal and interest payments. But we’ve obviously had held a little heavier security portfolio in the past, particularly as we had quite a bit of stimulus deposits come in, and generally a little heavier than our peers. But today, in this environment, we are looking at holding securities longer term in the high teens as a percentage of total assets, so somewhere between in that 17% to 19% range is kind of our longer term target. That provides us plenty of liquidity, but also provides us an opportunity to reinvest in higher yielding loans.
So today, I would say, we’re going to continue to work the portfolio down towards that target. And basically, we are reinvesting each quarter $100 million that’s yielding 2.5% into loans that are yielding 8% plus. So we would like that math as well.
Daniel Cardenas: And then if you can remind me in the loan portfolio, do you have any SNC exposure?
Jeff Jackson: We do not. We do not participate in any SNCs that I’m aware of.
Operator: The last question is a follow-up from Manuel Navas of D.A. Davidson. Please go ahead.
Manuel Navas: I just wanted to follow-up on what — wondering what the story was with the one hospitality loan that had a specific reserve created to it. Just wanted to hear a little bit more about that one.
Jeff Jackson: Sure. It is a loan we have had on the books for a while. It is hospitality in Downtown Baltimore, near the Inner Harbor. And it has really struggled since COVID. We have had it, obviously reserved for. But, we had an appraisal come in right near the end of the quarter that created us to take an additional reserve on it, about $2.8 million. We are working with the borrower. They are committed to the project. But at this point, that was what increased our reserve this quarter.
