David Finkelstein: Well, it’s a function of where the asset yields on the portfolio are and looking at the forwards and trying to give some guidance to a little bit further out the rise and given the fact that we’re lower levered, just an attempt to provide a little comfort that we can operate at lower leverage and still generate a yield that is certainly competitive. And it’s the durability, the earnings power of the portfolio that I just wanted to highlight there. And now look, quarter-over-quarter EAD is going to ebb and flow. But when it comes to the economic earnings of the portfolio, we do feel quite good about covering it. The second quarter, our NIM will go up very modestly, we anticipate. And in the absence of a shock to the market, we feel reasonably good about where the earnings picture is for 2024.
Operator: The next question comes from Meryl Ross with Compass Point.
Meryl Ross: Thank you. I wanted to ask about the lower swap benefit and I expect that would continue the hedge ratio job to 97%. Maybe you could give us a ballpark for where it would be as the positions expire throughout the year.
David Finkelstein: Yes, Meryl, it was a little difficult to hear you on that, but what I think you asked is about the roll down on the hedge portfolio and where the hedge ratio would go. So just real quickly, when you look at our swap book currently, we did have roughly $5 billion roll off in the first quarter, the second quarter is very light, it’s actually just $1.25 billion, and when we look at that front-end swap position, zero to three years, it’s roughly $18 billion notional, and it has an average life of average maturity of 1.46 years, so if you think about it, over the next three years, we’re going to tap that on average in a year and a half, and so it’s pretty evenly distributed. Now, the way to think about it is, as those swaps run off, also what’s happening is Agency MBS are running off, and when you look at the asset yield on our portfolio, which is in the 480s on a book yield basis, and you look at reinvesting those, that run off into new Agency MBS and production coupon MBS or yield somewhere in the 6.25 range, right, Srini, they are about so what you’ll see over the next number of years is a pretty orderly runoff of the hedge portfolio, which will replace out the curve and make sure that we’re hedged for the environment, but also you’re going to replenish yield by reinvesting Agency runoff and increasing the asset yield over time, so we like the hedge portfolio where it’s at, we’ll manage for the environment, and we’re going to stay reasonably well hedge amount.
Operator: At this time, there are no further questioners in the queue. And this does conclude our question and answer session. I would now like to turn the conference back over to David Finkelstein for any closing remarks.
David Finkelstein: Thank you, and thanks everybody for joining us today. Have a good rest of the spring, and we’ll talk to you next quarter.
Operator: The conference is now concluded. Thank you for attending today’s presentation. And you may now disconnect.
