David Dykstra: Yeah. And on the reserve side, it’s really sort of included in our overall commercial real estate. We don’t disclose a separate one for office. So it would be sort of included in the commercial real estate sector. We do have some qualitative factors that we apply, but we haven’t disclosed the specifics for that line item, Brody.
Brody Preston: Okay. Okay. Got it. And I know you talked a little bit about the analysis that you guys continue to do about the office loans that are coming due over the next 12 months. Do you happen to have the number — I guess, the actual dollar amount of loans that are coming due over the next 12 months? And how does that look as we go forward through 2025?
Richard Murphy: Yeah, I don’t. We — I would say that this — you hear about the wall of maturities. I mean, as we looked at it and kind of just looked out through all of next year, we really don’t see it. I mean it’s really kind of spread out pretty evenly through ’24 and ’25. But I don’t have the number that was in that population.
David Dykstra: We don’t have it handy. Yeah, I don’t have it handy. We just don’t have it handy here.
Brody Preston: Yeah. Yeah. Understood. And so just one last one on the office book. You said you don’t disclose the LTV, but do you happen to disclose — do you happen to have what the debt service coverage ratio looks like?
David Dykstra: Again, we don’t disclose that. But generally, we’re — we want to — on a stress basis, we’re looking for a 1.2 coverage on deals that we do.
Brody Preston: Okay. Okay. Got it. Dave, just I wanted to follow up on the sale of the premium finance loans. Did you — I think we had talked about $500 million before, and it looks like it came in at like $344 million. What was the rationale behind selling less than the $500 million?
David Dykstra: No. Well, the $344 million was the outstanding balance at the end of the quarter, so that would have been the impact. We sold close to $500 million in early July. But because these loans paid down so quickly on a monthly basis, that $500 million had amortized down to $344 million by the end of the quarter. So that was the end-of-the-quarter impact.
Brody Preston: Got it. Okay. Thanks for the clarification. And to follow up on Chris’ question, did you guys happen to book a gain on that through fee income at all? And if you did, do you know what the dollar amount is?
David Dykstra: The gain was roughly $1 million for the quarter.
Brody Preston: Okay. And that would be another income then?
David Dykstra: Yes, sir.
Brody Preston: Okay. And then the last one was just on the NIM trajectory. I know there’s been a lot of discussion on it. I just wanted to ask how you’re thinking about, I think you’re calling for stability, maybe, as we go forward into 2024, which feels kind of right. But I guess how are you thinking about rate cuts at all? How will that impact the margin, just given the swaps that you put in? And then specifically on the swaps, the new ones that you put on, what will be the basis point kind of impact on the NIM in terms of drag from the new swaps?
Tim Crane: Well, the drag right now is 18 basis points for the quarter. And you can see in our disclosure, the individual swaps primarily receive fix that go out in some cases three years, in some cases, five years with actually a forward start term. But if we start to get rates falling, we think we’ll get better loan activity as the economy picks up. We think the mortgage business will pick up. Obviously, that’s not a margin-related item. But we think that the offsetting factors to potential NIM compression come in other areas of the business. And so that’s how we look at it. And that’s when we talk about this, being in a narrow band as you get into some of these other factors, it gets a little bit harder to project exactly.
David Dykstra: Yeah. And I mean, before when rates went to zero, our margin was in the mid-2s. I mean, 50% to 60%. And we just never wanted to get back there. We think with these hedges we have in place now, if rates went to zero again, we would stay above 3%. I mean, there’d be some compression, and we’d have offsets that Tim talked about, but we wouldn’t go back into that mid-2 range based on this hedging position that we have in place.
Brody Preston: Got it. Thank you very much.
Operator: Thank you. I would now like to turn the conference back to Tim Crane for closing remarks. Sir?
Tim Crane: Yeah. Guys, thank you very much for your time this morning. I hope we did a reasonable job answering your questions. This is a lot about blocking and tackling for us. We think we’re uniquely positioned to take advantage of opportunities that we’re seeing in the market. And as always, we’ll work very hard to deliver good results. So thank you very much.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
