Jim Reske : Yeah. Thanks for asking. We’ll take some of the excess cash and deploy in liquidities, but not aggressively. Really securities right now, we can maybe get in the high 5s. We’re getting 5.4 overnight at the Fed. Obviously, the security is as on duration and whenever we buy, we’re always looking at four to five year duration. So that helps a little bit in the falling rate environment, but the yield pickup is not tremendous in securities right now. We’ve gotten securities for probably up a little bit from last year when it got a little uncomfortably low just in terms of on-balance sheet liquidity. It’s back up a little bit now, but we just always would rather be making loans to buy security. So if we have a loan growth opportunity, we just have to deploy it there.
And really not — we don’t want to put it all into securities and finally we’re borrowing overnight to fund loan growth. We just had to use it for the loan growth. So we’ll keep our eyes on it. But for the moment, my thought is some securities growth, we’ll take some of that cash. I mean, if we have — I already disclosed it, if we have $150 million today, we’ll take $50 million to pay off a sub debt on June 1, maybe whatever is left half of that, the security go and we’ll see what happens as loan growth going forward.
Matthew Breese : Okay. I appreciate that. And then, Jim, historically, you do provide some update on what kind of the forward outlook is for total fee income and expenses. Expenses came in actually better than expected this quarter, and I’d appreciate some update there.
Jim Reske : Yeah. And our guidance really isn’t changing in those things. I think the fee income and the expenses are going to be consistent with the guidance we’ve previously given. So — and I think that was on the fee side, $67 million to $68 million. I mean it was $67 million to $69 million for the quarter, but I don’t mean to change the guidance because I thought actually both the analyst consensus on those and our previous guidance did need to be updated.
Matthew Breese : Understood. Okay. And then just an update on overall credit. All eyes are on office, and you have some great disclosures, but I’d love to hear a little bit more about kind of your top exposures in office, what the typical sizes of the biggest loans and how they’re performing, if anything is keeping me up at night.
Mike Price : There’s always a few. I get comfortable from the fact that in office, we only have 11 loans over $10 million and probably $18 million between 5 and 10. So we’re pretty granular. We’ve worked down our exposure somewhat over the course of the last year. And we’re pretty thin on central business district. I think we have just $73 million there. I have Brian Karrip, our Chief Credit Officer with us. Brian, do you want to add some other color?
Brian Karrip : Sure, and thanks for your question. We have two deals that are above $20 million, both are performing well. Both have low LTVs, strong debt yields, strong DSCRs, one we mature we saw in the slide number 18. Third quarter of $22 million will mature. We’re extending that loan for six months. We gave you the maturity ladder, so you could see it with greater clarity and emphasizes who we are and how we think about our portfolio and emphasizes how we think about the granularity in our portfolio, how we break it out, how we stratify it and how we think about our overall office business. The slide is fairly complete. I’d be happy to answer any questions.
Matthew Breese : What is the — I’m sorry, what’s the nature of the extension.
Brian Karrip : We’re looking to sell property. And so we have agreed, so we have a proactive approach with each one of our borrowers. In fact, Matt, we went out and did a physical inspection of each one of our office properties that will mature between ’24 and ’25. We wanted to better understand physical occupancy versus economic tendency. And then in doing so, we meet with our clients and we say, what is the next step and what are your thoughts? With this borrower, they said our plan is to sell the property. And we went to them and had the discussion about, let’s do a six-month extension, so we can have an orderly exit.
Matthew Breese : Okay. That makes sense. And you feel like if there’s any loss content in your well reserved for that?
Brian Karrip : Absolutely. It’s performing — that’s performing.
Matthew Breese : Great. Well, I appreciate all the answers there and the color. Thank you.
Mike Price : Thank you.
Operator: [Operator Instructions] We have another question coming in comes from the line of Manuel Navas with D.A. Davidson. Your line is open.
Manuel Navas : Hey, good afternoon.
Mike Price : Good afternoon.
Manuel Navas : A lot of the questions have been answered, but I just want to — I was wondering some of the marginal rates of things. What was the marginal deposit rates for what came on? And I’m going to ask about different loan yields as well.
Jim Reske : Yeah. So the current — we have a number of different specials like the current short-term 12 month fee specials 5.05%. And then the money market specialists 4.5%, if you blend the volume, the overall used volume rate on deposits coming was right about 4.48% for new deposits coming in.
Manuel Navas : So that was 4.48% last quarter, and it’s coming down a little bit, right? You’re able to price down a little bit.
Jim Reske : We are. Well, last quarter, that CD special I mentioned would have been a 5.1 — actually 5.25, and that’s 5.05. Yes. I don’t — and I’m sorry, if I said the overall blended rate should be down from last quarter. I’d just say this quarter it’s 4.8%, if I think about the unit should be down from last quarter, not up.
Manuel Navas : And then new loan yields, we had strong equipment finance growth. Remind me the yields there and indirect out?
Jim Reske : Yeah, Indirect out in the high 7s after the net of the dealer reserve, and to get it for you. Equipment finance, I think was right around 8% for the quarter.
Manuel Navas : And I think you said earlier, commercial is roughly around 8% in general?
Jim Reske : Yeah, commercial is a little bit higher, a little in the low 8%. The coming finance every of 7.98 so yeah 8%. And indirect 7.6% the amount of yield for the quarter. So indirect, for example, that’s 7.6% for the quarter, $110 million came out of 7.6%, $109 million rolled off at 524. So just the way we like it.
Manuel Navas : Okay. Thanks. A little bit of a hospitalization expense didn’t kind of improve linked quarter? And it’s just going to — is that just kind of going to bounce back up a little bit?
Jim Reske : Yeah. That’s fair to say. We don’t get too hopeful in hospitalizations like for a given quarter because it bounced around so much just based on our experience. We self-insure. We talked about it before publicly, the layoff, we have a reinsurance for a layer of — really reinsurance a layer of cost once we get to a certain level. But if we have good experience in a given quarter, the hospitalization expense low, but it does bounce around.
