Bryan Jordan: Not in the fourth quarter. It’s in the same zip code that you had in the third quarter, about $11 million incremental in the third quarter expense base. And it should be about the same in the fourth quarter.
Brody Preston: Got it. Thank you for that. Do you guys have an ad with the spot interest bearing deposit rate was at 930 and then you’ve talked about, kind of moderating deposit costs from here. Do you have a view on where you expect that spot rate to move to by 1231?
Hope Dmuchowski: We do have the current spot rate at 339, and we are looking to walk that down. I don’t want to put a rate out there. Every time I put a beta out there, a rate out there, we seem to miss it. So far, we’ve missed our beta guidance, and our rate guidance, we’ve been able to raise deposits quicker. We do have almost 6 billion repricing in Q4 related to the money we brought on in Q2 for deposit campaign, and so I think it really ties to how quickly, what our ability is to walk that back, as well as bring new deposits in. If we can continue to bring them in at a 420 average rate, we’ll be able to walk it back a lot more. But, most of that reprices in the second half of November and December, so we’ve really got to see what our ability is.
We’re seeing some steeped competition on deposit pricing, and so how that changes, how our competitors change their deposit pricing from now until November and December when ours repriced will really kind of generate how much I think we can walk it back.
Bryan Jordan: The other big factor, to Hope’s comment is the shift in mix, as money moves from non-interest bearing to interest bearing, and naturally moves that call stuff as well. So it’s a, there are a lot of levers to play. We think in the aggregates, as Hope highlighted in her prepared comments, the new money that we brought in in the third quarter was on a mixed basis significantly lower than it was in the second quarter in terms of lending costs. And we think as this deposit promo starts to reprice, we have the opportunity to bring those costs down more in line where we’ve been bringing new balances on over time.
Brody Preston: Got it. And do you, maybe switching gears in the loan portfolio, do you happen to have what your exposure is to shared national credits, and of that what portion are you the lead lender on?
Hope Dmuchowski: Yes, we’ve got that information. In terms of shared national credits as a percent of the portfolio, it represents about less than 14% of our balances. And we’re the lead on about around 3%, 3% to 3 5% of that.
Brody Preston: Okay, great. And thank you very much, Natalie. And then the last one for me before I hop was just two-parter on the office exposure, specifically on the non-medical office. Do you happen to have what the allowances that you have set aside against the non-medical office currently? And then do you have a sense for what the average LTV on those properties are?
Hope Dmuchowski: Yes, we don’t. I don’t have it broken out in that detail in terms of the allowance. But in terms of our lender values on office, you’re talking about non-medical office. Correct?
Brody Preston: Yes, that’s correct.
Hope Dmuchowski: Just the traditional office. So in our portfolio today on traditional office, the average upfront equity we have is about 35%. And on a stabilized loan to value basis, we’re at about 60%.
Brody Preston: Got it. Thank you very much, everyone. I appreciate you taking my questions.
Bryan Jordan: Thanks, Brody.
Operator: Thank you. You now have Brady Gailey of KBW. You may proceed when you’re ready.
Brady Gailey: Thank you. Good morning, guys.
Bryan Jordan: Hey, Brady.
Brady Gailey: We’ve had two big quarters of deposit growth, which has been good to see. It’s helped lower your loan or deposit ratio. How should we think about that going forward? And 4Q and as we head to next year, are you still targeting to have deposit growth, outpaced loan growth? Is there a target you have in mind as far as where you want to get your loan or deposit ratio?
Bryan Jordan: Well, it’s an interesting discussion. Hope and I talked about the loan to deposit ratio. We clearly want to grow deposits. And I would say it’s less about the balances than it is the relationship. It’s customer acquisition to us. And we want to be in a position to continue to broaden and deepen and grow customer relationship. Our loan to deposit ratio ended the quarter at about 0.92. And if you blend that, that’s probably a little bit higher than peers. But if you grow on securities, which we tend to have a relative, much smaller relative portfolio, we’re sort of right in line. We think to the extent that we can grow relationships, that we can grow deposits, it gives us the fuel to continue to support customer needs on the credit side as well.
And so we are not proactively as much managing the loan to deposit ratio as we are trying to proactively manage our ability to serve our customers and our communities in a profitable fashion. So I’d say at the end of the day, if we have the opportunity to grow attractively priced deposits and relationships, absolutely we’re going to continue to do that.
Hope Dmuchowski: Brady, I’ll add to that is we feel like we’re in a great place because we have now two quarters of deposit growth. We’ve shown that we can do it. And we also have a capital position that allows us to deploy that. We don’t have to build our capital base. So our ability to continue to grow deposits and deploy that into a higher yielding loan is what we’re looking at. 92 loan to deposit ratio, as Bryan said, when we add securities in there, we’re at the peer median. We feel really good about the trajectory we’re on, which is why we believe that we will improve our margin in the coming quarters.
Bryan Jordan: One final point is, look, we’re fortunate in the fact that we get to do business in great markets, great economies, and on a relative basis, we think that they will outperform the U.S. economy. So I think we’re in a good spot to see positive momentum in our deposit base.
Brady Gailey: It’s good to be in the South. I agree. And then just my last question is to follow up on your comments about buyback into 2024. If I heard you correctly, it sounds like, instead of getting common equity tier one down to that 9.5 to 10.5, you kind of just want to hold it relatively flat at 11. Did I understand that correct? And then what would it take for you to consider, a more elevated level of buyback that could potentially get that common equity tier one number down into your range? Is it more economic uncertainty? What would you like to see to take that lower?