Harold Carpenter : Yes. I think our Board understands and takes seriously its responsibility for succession planning. They review succession plans, at least on an annual basis. I think our succession planning here would probably resemble most people when I say most people’s most banks, succession planning. They — first of all, you got to plan on two axis, what do you do long-term succession and what do you do in the — that our other key members get run over this afternoon. So, kind of a long-term plan emergency plan, they have both. I think in the case of the long-term succession plans they consider really three or four different variables how you handle succession. Of course, the one that most paper interested in is internal candidates.
And we have a number of high-potential candidates that we continue to work with and give expanded responsibilities to and so forth to see how they develop and determine their capabilities over time. We have candidates that are outside the firm that we have talked to and continue to talk to from time to time that have probably both an interest and a capability to come in and work with us and move the company forward. And then, of course, we can and do consider a full range of companies that we could acquire to pick up talent and maybe more likely MOEs where there’s a like-mindedness and suitable talent there. So, the Board considers all those variables and I think, Brody, I don’t know, probably a year ago or more, we talk through some grants that were issued to ensure that existing management studies in place until succession plans are set.
And so, my belief is the Board is active and has any number of options for how the succession would work. It’s much like I was a basketball player, you on fast break, you fill all the lanes and hit the open man. I think that’s really what the Board view is they look at all the options and make the best place when it’s time to make one.
Brody Preston : I really appreciate that answer, Terry. I guess, maybe if I could just sneak one more in for Harold. I forgot to ask you, Harold. Do you happen to have what the reserve on the office portfolio is?
Harold Carpenter : It’s about 80 basis points, somewhere in that neighborhood. It didn’t change much from the prior quarter. So that’s where we are.
Operator: And the next question is coming from Brian Martin from Janney. Brian your line is live.
Brian Martin : Hi, guys. Good morning. I’ll make it short here. Just on the margin outlook, Harold, it sounds as though if we’re at the bottom here, those loans, you talked about repricing the fixed rate loans and then just kind of the outlook on deposits remaining favorably, I guess, should see the margin trend higher as we get into 2024, assuming this higher for longer environment, is that in general, how you’re thinking about the margin here in the coming quarters?
Harold Carpenter : Yes. I think we’ve got a lot more bias towards probably a margin that’s going to accrete up that feel the same kind of pressure to run down as we’ve had over the last couple of quarters, for sure.
Brian Martin : Got you. Okay. All right. And then just on the fee income, just as far as the kind of big picture ex the BHG commentary you’ve already given, just the as far as the growth you’re seeing this year, kind of that mid-single digit — mid- to high single-digit rate, does that feel like a sustainable level? I know you talked about the solar piece this quarter being kind of maybe not one-time in nature, but you sounded pretty optimistic about that business going forward as well. So just trying to think about how the income looks here, what’s sustainable?
Harold Carpenter : Yes. I mean what we want to make sure is that people understand that’s going to be a choppy line item, and it has been a choppy line item for the last several years. as kind of a recurring, nonrecurring kind of thing. But we fully intend to support the solar business. I think we’ve got several projects that we’re looking at currently. The difficulty is trying to forecast when those projects close and when they get the necessary regulatory approvals. So, we’re going to continue to invest in that product. Like I said, we’ve invested in several industry veterans there that came from some of the large-cap franchises, and we like our prospects. So along that, along with our other equity investments that we’ve got, we still feel pretty good about the decisions we’ve made on all those fronts and what opportunities they present us.
Brian Martin : Okay. So, kind of that — I guess you’re calling it kind of the core fee income inclusive of that — those equity gains, but exclusive of BHG is still — including some of the benefits you expect to get from the sellar that mid- to high single digits, still feels pretty sustainable as you look forward here, at least in the near term?
Harold Carpenter : I think that’s accurate, Brian.
Brian Martin : Okay. And then just lastly, on the reserves, I guess, is your outlook. Maybe I don’t — you, Harold or Terry, just with the normalization in credit, if you do see charge-offs or NPAs tick up a bit here, is there any outlook for a change in building the reserve some given what the outlook looks like? I know fourth quarter still sounds pretty strong. But just as you get into next year, should we be thinking about seeing some reserve build or the current level we’re at, more likely sustainable?
Harold Carpenter : Yes. Right now, we don’t anticipate any big buildup in the reserves coming in the fourth quarter. We think looking at the credit pipeline, it seems pretty solid at this point. Who knows what will happen going into 2024? But right now, we feel pretty comfortable about where we are and what our charge-off experience has been here over the last few years.
Brian Martin : Gotcha. Okay. Perfect. That’s all for me. Thanks guys.
Operator: There were no other questions in the queue at this time. And this does conclude today’s conference. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.
