Gary Guerrieri: But I will tell you that there will be capital investment required as we move forward, particularly in technology for us to stay competitive, for us to maintain margins in the future and to keep doing what we’re doing with the betas and it’s not a pre-pass forever. So we have to keep watching what we do, and we’re going to have to manage the margin. We’re in a very good period for our organization and our — for this time, we’re benefiting. But obviously, the world is going to change. So we diligent on expense control, and we continue to reinvest in the help. Sorry, I didn’t.
Vince Calabrese: No, no, — that’s good. I would just add to that, I didn’t mention the kind of cost savings targets for 23, which is $9 million. As you know, we’re a disciplined manager of expenses continue to invest, as Vince said, in a variety of initiatives on the digital side and de novos and some of our kind of digital infrastructure. And then one other thing I would add, in the past, I’ve talked about kind of project improvement process improvement, I should say. We’ve always had a focus on that, renegotiating with vendors, facility space optimization. But the process improvement side of it, we’ve recently reorganized a little bit internally, adding some additional resources to drive the corporate-wide focus on process improvement.
I think there’s a lot of opportunity deploying RPA type technology to really drive further efficiency as we go forward. And we’re still in the early stages of that, but that also will contribute to, I think, allowing us to have sustainably in the low 50s as you move forward, given all those efforts.
Daniel Tamayo: Terrific. Thanks for all the color. That’s all for me.
Operator: Our next question comes from Michael Perito from KBW. Please go ahead with your question.
Michael Perito: Hey. Good morning. Thanks for taking my questions. Obviously, you guys covered most of it. Just a couple of quick ones to wrap this up here. Just, Vince, in terms of the kind of geographic footprint, you mentioned a little bit about some pipeline and some stuff like the Carolinas, et cetera. But just as we look at kind of the bank today, any opportunities or areas of focus for you guys in 2023 that we should be mindful of, maybe something like Philadelphia, where there’s been a lot of mid-caps taken out over the last couple of years. Just anything kind of like that, that you guys — that’s on your radar that you would convey to us at this point?
Gary Guerrieri: Yeah. I mean I will tell you that we have studied Philadelphia from a commercial lending perspective. We do have an office there. Our plan is to continue to expand it. We think there’s some opportunity there in the middle market, large corporate space. I also think Philadelphia, when we ran our model we looked at MSAs because of the number of companies domiciled there, and the competitive climate. It’s score now pretty high. The dynamic keeps changing. There are fewer competitors, right? Basically, we’re seeing it as an opportunistic area to expand. And there are several other markets that we launched into that will continue to boot. We’ve had tremendous success in Charleston. Our plan is to continue to grow there.
We are looking at de novo expansion in Richmond. We’ve studied opening a loan production office commercial only and Atlanta. And those are pretty much the areas that we’re focusing on, but nothing earth shattering or there’s no movement retail de novo expansion. But I think there are opportunities for us to extract additional high quality growth in our existing footprint, where we may not have the density. And then the other thing that we’ve done strategically was substantially increased our ATM rollout. What we found is that that’s helped us immensely with the retention of customers growing DDA, expanding small business opportunities. So we’ve done that through both branding opportunities and direct placement of ATMs and ITMs. So our ATM network grew more than 30% across our footprint.
So we have 1,200 ATM locations. So 250 of those were rolled out in North and South Carolina and then another 250 in Maryland, Virginia and Baltimore Washington D.C., Northern Virginia. So we’re trying to supplement our physical delivery channel and for branches with other channels to distribute cash and then we’re marketing our eStore which enables individuals and small businesses to open accounts online. Anyway, that’s the strategy. And I think from a geographic perspective, there’s plenty of opportunity within our existing footprint for us to continue to grow.
Michael Perito: Yeah. I mean, that makes sense. So from the outside looking at it would seem like, especially around the 95 corridor, like Virginia, like you mentioned, Philadelphia, like there — a lot of the competitors there, though, are much more loaned up right, probably a lot less willingness to lend, deposit betas are a lot higher. The balance sheets are a lot smaller. It would seem like you guys have a pretty attractive value proposition for some lending talent in those markets coming from the West and South as opposed to coming from the New York area where there’s just more balance sheet constraints?
Gary Guerrieri: Yeah. And I think our treasury management offering, at least as it scores out through and other surveys is pretty well respected. So that enables us to go in and garner deposits as well. We go in, we become the principal bank. We get the operating accounts in cross-sell treasury management services. And I think we’ve proven moving into the Southeast that our products stand pretty well if you look at the non-interest income growth of the company, a lot of that was driven from our expansion into the Southeast. And there was quite a bit of skepticism about our ability to compete. I think we’ve put that to rest. If you look at the growth in various categories, it’s been fairly substantial and it’s been very robust. So we have the product capabilities as well to go into some of the markets that we don’t have density within our existing seven states footprint.
Michael Perito: Great. Thanks for that. And then just last for me, just on the effective tax rate guide, it says assumes no investment tax credit activity, can you just remind us quickly what the activity looked like last year? And just also if you do move forward with any transactions there, what you guys typically look at from an opportunity standpoint?
Gary Guerrieri: I guess it’s Vince C answer. Go ahead.
Vince Calabrese: No, I would just say, I mean, it’s a line of business for us, but we don’t have some transactions each year. I mean, in ’22, I don’t think we had one in ’22, we had maybe a couple in ’21. So I mean there’s an active business process there, and we may have some this year. We just don’t want to put it into guidance if we do, then it’s a positive additive to the guidance there.
Michael Perito: Is that like housing income tax credit stuff though or is it like more like what?
