F. Morgan Gasior: Well, of course, that’s the big question. I would expect to see some more contraction just based on the fact that the economy has seen some inflationary components that have drained liquidity, especially on the retail side and you see customers looking for higher yields. We have been able to play pretty good defense, but there’s not 100% retention there. So we do expect to see some further declines the commercial deposits. As I said earlier, customers are going to use their liquidity before they start borrowing against their lives, and obviously, there are certain minimum liquidity requirements they have to maintain. But again, their choice is simple. If they have cash available, they are going to use it first and then they will draw next and as that cash diminishes just through operating expenses, you will see greater impact on line utilization.
But first, the cash is going to run off. It’s also the case in 2022, we have one large depositor that did a capital markets transaction at the end of 2021, dropped $25 million of DDA on us and then consumed about $20 million of it during the course of the year that, we do not expect to repeat. So I would say a slowdown in commercial deposits is more likely given that large depositor delta. But still the retail side, I would say, some run-off is still possible, especially since we will see just a little bit greater inflation coming through the economy, real estate taxes that our customers have to pay. The timing of that is different than it used to be here in the Chicago market. So we are bracing for a little bit of additional runoff during the course of 2023 and that’s why we are planning ahead with some replacement in retail CDs and we are going to try to focus as much as we can on commercial deposit growth and build a stable growing franchise there.
Brian Martin: Got you. No. That’s helpful. So not — maybe not much change net-net to the loan-to-deposit ratio. I think it’s around 90% today or in that area, is that how you are…
F. Morgan Gasior: Yeah. I think that’s about right. And if we feel that we need to bring that ratio down a little bit, then we obviously have the cash flows to do that. But I think if we can maintain it in that 90%, 92% range, get the mix that we want on both the loan side and the deposit side, it speaks to a stable environment for the first half of the year and an expanding environment in the second half of the year.
Brian Martin: Got you. And just you said earlier, maybe just your comments about, the bulk of the growth sounds like it’s both kind of the equipment finance and the commercial finance. Just the yields you are seeing in those buckets today. Can you just remind us, I think, you said, it was not or one was over 9.5% maybe as a commercial, but on the equipment finance side, just kind of what you expect to be — just trying to understand the pickup you are thinking about getting here?
F. Morgan Gasior: Well, again, it gets a little variable and somewhat volatile. But right off the bat in equipment finance, if you think about a moderate duration of around three years to five years, say, four years at an average, then the swap rates there can go anywhere between 3, 3.5 to 4. So, say, $375 million is a reasonable number. Then we are looking at around $250 million to $300 million depending on the asset class, whether it’s corporate other, middle market or small ticket, so high 6s seem reasonable there. We — 6 is kind of a floor for us right now, given where we think funding costs could go and profitability targets. But the swap rate plus $250 million is a reasonable proxy. It might go a little higher depending on the mix, but we are trying not to lock ourselves into relatively low yielding assets at this moment given the uncertainty of where things might go.
