Jeff Rulis: And, Tani, that’s — the 2.40% is relative to the fully tax equivalent 2.45%?
Tani Girton: That is correct.
Jeff Rulis: Okay, I appreciate it. Thank you.
Operator: [Operator Instructions] Our next question is from Matthew Clark with Piper Sandler. Please go ahead.
Matthew Clark: Hey, good morning, Tim, Tani. Just on the restructuring within the securities portfolio, it looks like you’re taking advantage of the Visa gain here. Just what’s your appetite for restructuring more of that portfolio in the back half here?
Tani Girton: So that’s a tough question. I mean we impacted $180 million if you include the swaps in terms of our interest rate risk position. So in terms of selling securities, I think we want to remain opportunistic. It’s really a matter of once you start taking losses, what’s the earn-back period, and we’d be looking at a very short earn-back period, and that’s frankly hard to achieve right now. But as — if rates go down and we do have that opportunity, then we will take it.
Matthew Clark: Okay. Great. And then in terms of the swap, what are the specific terms there in terms of what you’re receiving, tied to what index and what you’re paying?
Tani Girton: Okay. So we did $50 million in 2.5 year, and we did $50 million in three year. And the underlying on those is the AFS security portfolio. Those are floating at SOFR and the fixed rates are on average in the 4.5% range — 4.5%, and that…
Matthew Clark: Okay. Great.
Tani Girton: Yeah.
Matthew Clark: Okay. Didn’t mean to cut you off. And then on your interest-bearing deposit beta assumption of 35% for the cycle and in light of the spot rate on July 18 and assuming another 25 basis points this week by the Fed would imply your deposit cost meaningfully — in terms of the rate of increase meaningfully slow beginning of the fourth quarter and into 1Q. And I’m assuming I’m not missing anything, but just didn’t want to speak out of turn. That’s a fair assumption?
Tani Girton: Matthew, you’re talking about fourth quarter of ‘22 and first quarter ‘23?
Matthew Clark: No, fourth quarter of this year. No, I’m just saying it looks like given the spot rate you provided, you have a nice — you have another step-up here in the upcoming quarter. But then after that, you get to that — to back end of the 35% deposit beta, it would suggest that your deposit costs — the rate of change meaningfully slows beginning in the fourth quarter of this year and into next year?
Tani Girton: Yes. That is — in the numbers I gave earlier, that is the embedded assumption with a lot of caveats, but I only assumed a 25 basis point increase in Fed funds rate. But in our modeling, it’s — in our modeling, of course, it’s different. In the base case, you’re assuming zero interest rate changes. And then in the up — in the up scenarios, we apply the betas with no lag. And so those actually would go up faster than what was assumed in previous modeling attempts. We’re running our — we will run our next model on as of July 31 and that will take into account all of the actions — balance sheet actions that have occurred in July. What will be published in the second quarter earnings will be the — or in the second quarter 2Q — sorry, 10-Q, will be the interest rate risk results from April 30 — as of April 30.
And as I said, we were at peak Fed funds there. So we will be showing much more liability sensitivity there. But when we run as of July 31, it will probably start looking a little bit more like what was in the first quarter 10-Q.
