Gary Sims: Right, Brian. It was not the asset that we just discussed, the senior living asset. That credit was already a substandard and then went to substandard non-accrual. The increase in special mention for the quarter really was driven by a couple of assets in our Twin Cities markets. They were CRE assets, specifically office and multifamily, and we recognized potential weakness in those credits. So it really was associated with those two.
Brian Martin: Okay. So of the office exposure, then how much of the office exposure is currently classified or special mentioned today? I mean, what’s the — is that pick that sounds like it’s moved up a little bit, not a lot?
Gary Sims: You’re right, Brian. It has moved up a little bit. Right now we have $151 million in office exposure. That represents 3.7% of our loans. Of that exposure, 33% is criticized and 13% is classified.
Brian Martin: Okay, 33%, 13%, Okay. All right. Fair enough. And then how about just flipping over to maybe just one for Chip. I think, Chip, you talked about the substantial pickup or however you qualified it on the fee income front, just from the couple items, I mean, the specialty business obviously and the treasury management services, can you give us some way to think about that? I mean, as far as the magnitude given this is — all the — there are a lot of new initiatives kind of coming on board here and the best way to think about how to — how much of a contribution we could see from that in the coming periods.
Charles Reeves: So as we look through the various especially lines here, Brian, one, you saw in this quarter, we had some uptick, perhaps you could call it significant increase in our swap income customer hedging program. We believe that will continue at a good pace, perhaps around the same levels. We did not sell any SBA or government guaranteed loans into the marketplace in Q3. And we believe is for Q4 and into 2024, we will have increased activity there. And I believe between the swap as well as the gain on sale from SBA activity, those will probably end up being $500,000 to $750,000 or so a quarter in 2024. And then our treasury management initiatives, that will be a slower build, but by the fourth quarter of next year, we expect that to have some more meaningful impact for us.
Brian Martin: Okay. So not much. So really mostly driven by the specialty rather than the Treasury management in the near term. And then as far as the kind of the efficiency, so I mean, just as you make these investments and get that out of it. I mean, how should we think about the efficiency ratio as you proceed over the next four or five quarters. From where it’s at today can you give any thought on that to just kind of manage that, where you think that’s directionally trending to?
Charles Reeves: All of the various big specifics of the efficiency ratio, but let me just give some additional highlights of what we’re been reviewing in the expense side here, Brian. For instance, what you saw in the third quarter was really the actions that we took in primarily Q2. We announced, obviously, a voluntary retirement program, but the individuals that accepted that program really did not leave the institution until early to mid-September. So we still have some run rates, if you want to call it, reduction from that. We’ve also announced internally, as well as with the FDIC, that we have a branch closure that will occur in the fourth quarter. And so there’s a few other pieces that we have. Then, as Barry mentioned and as did I, we’ll continue to reinvest into our franchise.
What that means for the overall efficiency ratio and the guidance that Barry gave on the expense side as we go to probably $32.5 million and Q4, that probably rises to a $33.5 million, perhaps $34 million as we migrate throughout the quarters of 2024. But Barry, from an efficiency ratio?
