Christopher Marinac: Hey, thanks. Good morning. I want to ask Susan about criticized loan trends and kind of what she is seeing this quarter and also maybe what she would expect the next few quarters looking into early 2024.
Susan Springfield: Thanks, Chris. We are seeing some increase in criticized assets, but it’s slight at this point. We are up, I guess, about $100 million in terms of criticized assets quarter-over-quarter. And we continue to have some upgrades. We are seeing a little bit more in commercial real estate than we are in C&I. But again, it’s a handful of credits. I’m not seeing systemic. Just kind of credit normalization at this point.
Christopher Marinac: Does that change reserve levels?
Susan Springfield: Yes. Obviously, we’ve got a slight increase in terms of reserve coverage. We were up about a base.
Christopher Marinac: Very well. And then, based on the SNCC [Ph] information that you gave us a few minutes ago, are there any other sort of like club type deals that wouldn’t define as SNCCs that would above and beyond that 14% number?
Susan Springfield: About 1% more.
Christopher Marinac: Okay. Great. Thank you for taking our question this morning.
Susan Springfield: Okay. Thanks, Chris.
Operator: We now have David Chiaverini of Wedbush Securities. You may begin.
David Chiaverini: Hi. Thanks. You’ve previously mentioned about how you’re open to doing a potential MOE for scale benefits and crossing the hundred billion in assets. I was wondering what factors could accelerate a potential deal and what factors could push out a potential deal any updated thoughts there would be helpful.
Bryan Jordan: Yes, I’d say there are more factors pushing it out and there are bringing it in. I think they’re opposite sides of the same coin in some sense. I think it’s the M&A environment is likely to be very very minimal over the next couple of years part of that is economic part of that is interest rate marks and I still think as demonstrated over the last few quarters uncertainty about regulatory approval processes in addition to the proposed rules around Basel III make anything unlikely in the near term, and I would guess our view is it’s probably two three years before anywhere from a year and a half to three years before you really start to see a pickup in M&A activity. So that’s not something that’s on our radar screen today.
David Chiaverini: Makes sense. Thanks for that and shifting over to loan growth and the increased guidance to 7% to 9% I was curious what areas are you leaning into with the increased loan growth guidance?
Hope Dmuchowski: But we do see some opportunities where other banks have pulled out completely. So we’ve got some opportunities in mortgage warehouse lending. We’ve got some opportunities and what I would just call for commercial in our market. We can talk about generational opportunities to bring over the family and companies in the market that we continue to serve. There’s also some opportunities in asset-based lending. One of the reasons that we think could be attracted to is we are seeing some ability to have widening spread and even more conservative underwriting things like more upfront equity better covenant more opportunities to have guarantor and sponsor resource that kind of thing.
Bryan Jordan: We’re always…
David Chiaverini: Thanks very much.
Bryan Jordan: We’re — I’m sorry to interrupt. We’re always opportunistic as we think about how we grow high value relationships and that’s through all economic cycles. And so we’re always thinking about how we grow the business. The other thing is driving the growth if you look at a substantial portion of the growth in the third quarter of this year it continues to be what I’ve described in the past the spring-loaded nature of our balance sheet and that we have some continued fund up of construction assets, which is driving the growth. Organic growth has slowed. It does feel like lending activity more broadly in the economy and what we see from customers has slowed and it’s likely to continue to slow but we will be opportunistic and look to grow our business and to grow our customer base by using our balance sheet appropriate ways to support customers and communities.
David Chiaverini: Helpful color. Thank you.
Bryan Jordan: Thank you.
Operator: Thank you. We now have Jon Arfstrom with RBC Capital. Please go ahead.
Jon Arfstrom: Yes, hey good morning everyone.
Bryan Jordan: Morning.
Jon Arfstrom: Just a quick just a question on loan growth to David kind of stole my question, but that’s okay. I guess the question for you Bryan is that this do you feel like this is a sustainable pace of growth? That’s kind of 1% to 2% sequential growth as you look out into 2024.