Jerry Plush: Thanks.
Operator: Thank you, and one moment for our next question. Our next question comes from the line of Michael Rose with Raymond James. Your line is open, please go ahead.
Michael Rose: Hey, good morning guys. Thanks for taking my questions. Just wanted to start on the deposit side and just get an update on–and sorry if I missed this, I hopped on a little bit late, but just any sort of expectations for betas. On the one hand, you guys are pretty rate sensitive and are benefiting from the Fed’s actions, but there are some out there, especially some of the larger banks that are now calling for a pivot by the end of the year, so just wanted to see from a flow perspective, beta perspective what you guys would expect. The loan to deposit ratio is obviously kind of elevated, you still have some attrition of the foreign deposits, although they were up this quarter. I know those are very low betas, so just kind of holistically how should we be thinking about betas and flows, both in the higher-for-longer camp and then what actions you would potentially take to limit downside if the Fed does pivot. Thanks.
Carlos Iafigliola: Yes, good question. In terms of beta, Michael, during the quarter we recorded 0.50 more or less on the deposit side. Something that really helped this quarter was the stability and the cost of international deposits – they barely moved. We went from probably 0.11 to 0.16, the cost, so it continues to be very cheap and very low sensitivity, so that helped us a lot with the blended beta for deposits. The 0.50 was definitely a sensitive number given the changes that we saw in the market. We expect to be closer to the–between 40 and 50 for the first quarter. Remember that liquidity in the financial system is shrinking and the competition for deposits is high right now, and there are certain accounts that you definitely need to move and be proactive in adjusting rates.
Even thought you do it certain product types, you also have to be very cognizant that there will be changes in other accounts, so we expect that 0.40 to 0.50 in terms of cost–beta reaction to the cost of funds. Important is the behavior of the financial margin. We believe that the level of acceleration that we had in the last quarter of the year wouldn’t repeat itself. I believe it was significant. We started to feel like the financial margin will grow but more decrementally, I would say, so thinking about 4% financial margin would be kind of the level that we feel that should be steady throughout the year. Jerry?
Jerry Plush: Yes, hey Michael, I think it’s important to note a couple things. We’re going to continue to evolve how we incent our personnel, again as I made a comment earlier about we’re looking for full banking relationships, and with any existing and with new customers, and we’re putting on a very strong incentive program to really drive deposit growth first and foremost. If you recall, we’ve talked frequently about being a deposits-first bank is one of the most important things. We are laser focused on maintaining that loan-to-deposit ratio and not allowing it to get up above 100%, and I think that we’ve demonstrated that. It’s something we’ve focused on all throughout 2022. We’re going to continue to do that in ’23, and my comment would be that between all of the business development people we’ve added, you’re going to see incremental volumes come from a combination of more people, more focus, and these new systems are going to enable it to be a lot easier, particularly as we acquire more and more commercial customers, and also on the municipal side as well.
We think there’s a combination of things that will enable us to continue to grow on that side of the balance sheet.
