We really were looking at that from a profitability and our timing of that and the longevity that we wanted to lock in and the rate , we made that decision from a profitability standpoint.
Casey Whitman: Mm-hmm, okay. Just with the loan purchase, obviously you with the credit. Just what kind of yields are in that book, and is the plan to add more to that or is this sort of more one-time transactions?
Nicole Stokes: This is the acquired piece of the one-time transaction, but we already have–that’s already a product that we offer, is cash surrender value secured. We like the credit, it’s a variable rate product. Right now it’s yielding over 6% with very low credit risk, so we like all of that, and it complements the existing portfolio that we already had. We purchased it and converted it to our core system, so there’s little to no–very minimal overhead to really continue that product, so it really was accretive to ROA.
Casey Whitman: Okay, thanks for taking my questions, and great quarter.
Nicole Stokes: Great, thank you Casey.
Operator: Thank you very much. Our next question today comes from Brady Gailey from KBW. Brady, please go ahead, your line is open.
Brady Gailey: Hey thanks, good morning guys.
Palmer Proctor: Good morning.
Brady Gailey: I wanted to start with mortgage – you know, another step down here in mortgage revenue in 4Q. I know it’s incredibly hard to forecast, and a gain on sale of 126 basis points is not helping you. But any way to think about what mortgage could look like in 2023 from a volume and a gain on sale perspective?
Palmer Proctor: Yes, I’ll tell you what, Brady – I’ll kick off in terms of the outlook, and then I’ll let Nicole talk kind of on the gain on sale portion of it. I think what we’re all experiencing as an industry is really the mortgage space has obviously moved because of higher rates back more into a pattern of seasonality year-over-year, which is where we were pre-boon, pre-pandemic, so it’s kind of a nice shift, quite frankly, to level set and reset everything in the industry, but I think what you’re going to find across the board is that there’s going to be more seasonality that we were accustomed to. First quarter of each year is always typically the weaker quarter, and then second quarter generally picks up because of spring selling season, and then third quarter is typically your highest quarter, and then fourth quarter, assuming that rates kind of moderate, we’ll continue to see some improvement there.
We think the Fed will have long term rates moderating probably around 2.6, 2.85 in the 10-year, bringing kind of long term rates to a steady 5% for Fannie and Freddie-type products into 2024. I think the outlook right now in 2024 is actually pretty positive for the housing market, so that’s kind of what I think we’re going to all experience, which we’re glad to see, it’s just some more moderation and getting back into that pattern of seasonality. In terms of the gain on sale, Nicole, do you want to talk about that?
