Andrew Harmening: Are you disappointed that’s not higher Daniel? Sorry, rhetorical. Sorry, no. The reason that we feel confident in this space is because we’ve taken an approach, frankly since I’ve been here, which is we’re look very strongly at the expenses that we have and say, are we spending in the right place? Let’s start with that. And then we cut expenses in those areas going into the year. We’ve targeted in the first year of taking out I think it was roughly $10 million. And we have a similar approach going into the year on what do we do in our physical branches, what are we doing in third party origination, which has less, typically less margin in return on it, then we took action with our staffing and as we brought that lever down, so it’s not just a function of investing in new areas, it’s also simultaneously taking the expense off the table in areas that cannot yield as much to us on the long term.
So when we say 4% to 6%, it’s because we are taking actions proactively to cut expenses before we grow expenses. As long as the increase in expense leads to an increase in revenue, we will continue on that path. But we will ask the team also, if it doesn’t, where do we proactively slow down the investment. And that exercise already is, already a course of business for our team. So to answer your question, I like the discipline in an environment where we’ve been able to grow revenue. I very much like the discipline that we’ve had with regards to expenses. We also happen to bring in a CFO that has years and years of experience as the head of FP&A. I will tell you, that’s not an accident, bringing disciplined execution is very important, not often talked about, but incredibly important when you’re trying to balance growth and bring in that discipline towards expense management.
So I feel quite good about the 4% to 6% range. And I will tell you, we’re not immune from the issues that everybody has, which is consistently looking at different areas of your business and knowing that we’re competing for talent. So we have factored in increases that we have already had to make or going to make with regards to count talents and key areas to retain them.
Daniel Tamayo: Okay, great. Appreciate all that. That’s all for me. Thanks for taking my questions.
Andrew Harmening: Thank you.
Operator: Our next question comes from the line of Terry McEvoy with Stephens. Please proceed with your question.
Terry McEvoy: Hi, thanks. Good afternoon. In prior presentations, you provided the 2023 loan growth outlook by those three categories commercial down to auto finance. So I guess my question is kind of in an ideal world, what bucket would you like to grow and how would you like that mix of growth to be in 2023 and is auto finance kind of the filler so to speak, because to allow you to hit that target, given just some of the lower returns that we hear in the marketplace?
Andrew Harmening: Yes, it’s a great call out Terry. And what I would say is we have a lot of levers. And we want to see where the year is going, as opposed to going in the middle of the year and say, we’re going to go hard in this asset class, only to find out that maybe that is not the area offering the best returns. And so we look very closely at our mortgage business. Now our mortgage business in production is off 80% so far, versus the prior January. So how do I want to forecast that out in a year where we’re seeing pay downs at historic lows, and we’re still seeing that grow. So we’re trying to pull these levers through, but what we know is, we have the ability to manage what our long growth number is, because we’ve taken action with quality people in quality segments.
