Rodger Levenson: Yeah. So, Feddie, I’ll just jump in here. So, as Art mentioned, we think for both NewLane and for Upstart, we see the level of charge-offs having plateaued and will start to drift down here just a little bit, especially with the Upstart portfolio as it probably attracts a little bit more quickly. I think the delta really for us on charge-offs will be what — how the commercial portfolio performs. And we obviously were pleased with the net recovery this quarter, but we’re still coming off of historically low levels and credit in the C&I book tends to be a little bit lumpy. So, you can see a spike or two depending upon one or two credits and the size of those credits. And so, it’s kind of averaging all of what we have seen as historical charge-off rates that got us to that range that we provided in the outlook. And we continue to assume that some of that will occur during the remainder of the year.
Feddie Strickland: Understood. Thanks for the color there, Rodger. And that’s it for me. I’ll step back in the queue. Thanks for taking my questions.
Rodger Levenson: Thank you.
Operator: Your next question comes from the line of Manuel Navas from D.A. Davidson. Your line is open.
Manuel Navas: Hey, great start to the year in terms of loan growth. Any — how are pipelines? And is — are they impacted at all with rates staying high? Any issue with demand from rates?
Steve Clark: Manuel, Steve Clark again. Pipeline in the commercial bank and the small business group remain fairly strong. So, our 90-day weighted average is just a little over $300 million. So, activity and opportunities continue to present themselves. I think a significant portion of that is from the disruption that’s occurring at some of the bigger players in our market, and that is generating opportunity, as Rodger said earlier, for both customer acquisition and talent acquisition. So, interest rate environment on the C&I side has not impacted our pipeline. And certainly, on the CRE side, we remain very, very selective in terms of new customer acquisition, new sponsor acquisition, and continue to focus on supporting our existing customer base.
Manuel Navas: That’s great. In terms of shifting over to deposits a bit, any early take on movements in trust deposits and other flows that you’re looking out for?
Art Bacci: Manuel, this is Art. I think things right now are pretty steady. We continue to have a very strong pipeline in securitization deals. Remember, some of those deposits, as I’ve mentioned in the past, are really cash pre-funding trust that’s going to go out and acquire assets for mortgages, for the trust. And that we can’t really forecast as easily. That’s really up to securitization markets and different clients, the type of deals they bring us. But the team has actively — they’ve got a very active pipeline and there could be some nice opportunities here, if not in the second quarter, certainly in the second half of the year.
Manuel Navas: In the past, you’ve talked about having a little bit of a budget in your deposit beta assumptions to defend deposits more. How has that progressed? And what are your updated thoughts on that ability to defend your deposits even more if necessary?
Art Bacci: I’ll turn it over to Shari, but I’ll tell you, we’re still tracking. We have — beta was about 47% on interest-bearing. We said 50%. We kind of, like, we’ll be close to that, but the pressure seems to have declined in terms of having to really use excess budget, if you will, to defend our deposit pricing. And Shari can talk more about what she’s seeing in the market.
Shari Kruzinski: Sure. I would say that, as Art mentioned, the competitive pressure, although it still exists, it’s subsided somewhat and we are still seeing customers interested in certificates of deposit, the money market. We’ve been successful attracting new customers to those products, but really pleased and feeling very comfortable. In fact, our CD retention rates are actually running a lot higher than we had expected, really proactive management on the exception pricing front as well.
Manuel Navas: That’s really helpful. Can I just, my last question, shift to the buyback and capital return. You’ve kind of gone above the 35% threshold. Just any updated comments on that?
Art Bacci: No, we continue to stick to the 35% long term. We had some makeup to do from Q4 where we were a little bit under 35%. We made up for it in Q1, but no, generally, we’re going to stick to the 35% for the year. So, there may be some timing differences between quarters, but no real change.
Rodger Levenson: It’s an ongoing — Art, obviously, articulated it well, but it is an ongoing evaluation, Manuel. And so, as we go through our capital stress testing and we see opportunities to go above that, what we call, the routine buybacks, we will evaluate that. It’s just not in our current near-term thinking.
Manuel Navas: I appreciate that. Thank you very much.
Operator: Your next question comes from the line of Kelly Motta from KBW. Your line is open.
Kelly Motta: Hi. Thank you so much for the question. Most of mine have been asked and answered. But maybe looking at Slide 10, it says you’ve continually been reviewing all $2.5 million-plus loans maturing in the next 24 months. Just given the investor focus on CRE and office, if you could provide what your findings have been, any conversations with borrowers whose loans are coming due or up for repricing, and how you are managing with those? Thanks.
Steve Clark: Kelly, Steve Clark again. So, yes, as we have noted, we’ve had for several quarters now an ongoing project or protocol to look two years out and roll quarters forward as the year progresses at all loans that are scheduled to mature during this time period. And we just want to be proactive and get in front of our customers well in advance of any maturity dates. And so far, we’ve been quite successful in working with our customers for loans that have matured during the first quarter of this year and the end of last year with really minor challenges. So that will be ongoing each quarter and we’ll continue to work with all of our customers as it relates to their maturities. There could be and likely will be some discussions with certain borrowers with certain loans as we move forward, but we really view it as really episodic in a loan by loan basis versus a broad concern.
Kelly Motta: Got it. Thank you so much.
Operator: Thank you. And with no further questions in queue, I would like to turn the conference back over to Mr. Bacci.
Art Bacci: Thank you for joining the call today. If you have any specific follow-up questions, please feel free to reach out to me directly or Andrew Basile. Rodger and I will be attending conferences and investor meetings throughout the quarter, and we look forward to meeting with many of you. Have a great day.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
