Operator: Our next question comes from Eric Grubelich of Private Investor.
Eric Grubelich: I have a few things for you. First thing is I want a little bit of clarification. You’re kind of describing 2023 as maybe a bit of a write-off, nothing great is going to happen. It’s all a year out from now. So with the margin, Were you saying that the margin — so let’s just focus on where you are at the end of the quarter at $309 okay. Is your margin going to trend much lower from here? Is it going to break 3%? And are your dollars of NII? I thought you said the dollars of NII are going to be lower in 2023 than 2022. Did I understand that correctly?
Alan Villalon: Yes. So what we gave on the call, we said that using — looking at a static balance sheet right now, embedded in that is a $12 million headwind. So if you take that into — on a static balance sheet basis, you could probably calculate out the pressure on the margin there.
Eric Grubelich: Okay. And that $12 million headwind is increased deposit pricing? Is that — what’s the $12 million from?
Alan Villalon: The $12 million is based on our — if you look at our ALM modeling that’s disclosed on Page 62 of our 10-Q, you’ll see that up 300 to 400 basis point scenario, it does decrease our NII, mainly due to repricing of our liabilities, which is going to be mainly our money market and interest-bearing deposits. Now also, too, what’s impacting that now because of our increased borrowings to support our increased loan growth in our Arizona market, we have also increased borrowings, too.
Eric Grubelich: Okay. So you obviously like a number of banks. The core deposits were not exactly as maybe core deposits as everybody thought, given the big increase in the rate that you provided customers at least in the last quarter. So when I’m looking at your money market, primarily, that’s the big chunk of it at the end of the day, is there much more? Is that number going to be hitting 2% next quarter? And I’m just trying to understand — I understand the $12 million you’re pointing to the 10-Q, that’s fine, but there’s a practical side of what really happens? And maybe you can talk a little bit about what is in your market. Who’s been gaming the deposit side that’s caused this kind of a headache for you. Maybe maybe you could talk a little bit about that and where you expect those deposit costs to go?
Katie Lorenson: Sure. I’ll start. Thank you for the question. In regards to our core deposit franchise, exceptionally strong. Now they are long tenured relationships and they are also significant balances. So they absolutely have pricing — some pricing power. And we are not going to lose core deposit clients. We’ve been very focused on building our core deposit franchise for decades. In regards to the money markets, certainly a portion of those relates to our synergistic deposits. They are indexed, they do reprice quarterly. As in regards to the total cost of funds for those, they knew servicing costs, of course, and they have no acquisition costs. So overall, although the rate is high, the total all-in cost of those deposits is fairly slow. Al, do you want to…
Alan Villalon: Yes. And I’d just like to say, when you ask about where is it coming from the pressure, I’d like to just highlight when we look at community banks within our footprint, we have approximately 30 banks that have loan-to-deposit ratios in excess of 100-plus percent. So that’s where the pricing pressure is coming from is those banks need liquidity in our deposit ratio — loan-to-deposit ratio remains well below 100%, they’re coming after our deposit base as well. So that’s where the pressure has been coming from.
Eric Grubelich: Okay. So let me ask question, if I went on your website or walked into a branch right now, what would I be offered on a money market deposit account rate wise?