So we’d have to follow up with you on that specific number that’s in the office that would be specific medical office.
Feddie Strickland: Sure. That’d be great, yes. I just know it’s generally perceived as a little lower risk, so just curious how much was there, but anyway, thanks for taking my questions, guys.
Curtis Myers: You bet.
Mark McCollom: Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from Manuel Navas with D.A. Davidson & Co. Your line is now open.
Manuel Navas: Thank you. Good morning.
Curtis Myers: Good morning, Manuel.
Manuel Navas: Can you kind of comment on what NIM you kind of expect with your NII estimates, like a 4Q 2024 exit NIM assumption? I know that the rate forecast can definitely change, but just kind of thoughts on that.
Mark McCollom: Yes, we have purposely, Manuel, over the last couple of years kind of backed away from giving specific NIM guidance and instead by giving you NII and you guys can calculate your own balance sheet and come up with that number. What we have said is that, we do expect in the first half of 2024, again, for what I mentioned about deposit, pricing pressure to continue. I would expect in the first half of the year, you would continue to see our deposit costs going up more than our loan yields. So I would expect it would be sometime in the back half of 2024 is when you would see that trough and then margins start to expand from there.
Manuel Navas: Okay. Shifting gears a bit, does the FultonFirst initiative contemplate any like improvement to the fee or improved fee growth, any new fee lines or anything that is helpful on that side of things?
Curtis Myers: Yes, it certainly will consider fee income businesses and we feel there’s opportunities to accelerate growth in loan to deposit business as well as fee and service business, so it’s a comprehensive review of the entire company.
Manuel Navas: And with kind of the — a little bit better swing in AOCI, any shift in your appetite for buybacks or any other capital deployment thoughts? Happy to kind of just hear the latest on that front.
Curtis Myers: Yes, so as we look forward, we renewed our buyback in December, the Board renewed that, so we have that full availability for us for the year, we will — that’s $125 million. We will look at that opportunistically over time. If you look back over this past year, we’ve been pretty active throughout the year and if it’s conducive — the environment is conducive to that going forward we will continue to be active.
Manuel Navas: Appreciate it. I’ll hop back into the queue.
Curtis Myers: Thanks.
Operator: Thank you. One moment for our next question. Our next question comes from David Bishop with Hovde Group. Your line is now open.
David Bishop: Hey, good morning, gentlemen.
Mark McCollom: Hey, David.
David Bishop: Mark, in terms of the fee income guidance there, just curious how we should think about the individual components? Wealth management was up, I guess, mid-single digits, commercial banking high-single-digits, consumer maybe down mid-single-digits, just in terms of deriving that forecast, how are you thinking about maybe some of the individual components this year?
Mark McCollom: Yes, we continue to be very bullish — our wealth group again hitting a high watermark for assets under management administration and with a lot of those revenues tied to that balance as we continue to grow customers and grow assets, the revenue will come with it. We have — commercial banking also had a very strong year, eclipsing $80 million in fees, which I think was may have also been a record for the year or close to it. There’s a little bit more volatility in there in our capital markets business, but there’s good fundamentals in there in merchant and cash management, which will continue. Consumer banking has been down a little bit, but due to some changes we made to overdraft at the beginning of 2023 in addition to mortgage banking being impacted by the current rate environment, but when you think about those together, each of those is going to be somewhere right around a third of our total revenue.
This past year, consumer has been a little bit lower because we’ve been off a little bit in mortgage banking, but we made up some of that then with stronger results in commercial banking. So we really like the kind of balance that we have in those Fee Income businesses in total.
David Bishop: Got it. I appreciate the color. And then, how should we think about maybe the overall level or maybe investment securities here. I think maybe about 13%, 14% of average earning assets, do you think that’s sort of a near floor here at this point, and remind us what the annual cash flow expectations on that portfolio.
Mark McCollom: Yes, right now cash flow is pretty small, it’s about $10 million a month, and I do think it’s near its floor. I mean, our target there is kind of between where it sits today at about 15% of the balance sheet. We purposely run it maybe a little bit skinnier than some others do because we don’t view our investment portfolio as an earnings enhancement stream, but it’s really there truly just to balance liquidity and depending on where overall loan deposit ratios are. And so, I think somewhere between where we sit today and 15% of the balance sheet is a good place for you to model.
