It seems a reasonable place for us to be. But if we are successful in what we are trying to do in the second half on the commercial finance side and the commercial deposit side, that isn’t necessarily the peak. But, again, we have to see what happens with the core funding costs during the first half of the year, what the Fed’s communications are as far as rates are concerned. If all of a sudden, there is a pivot in the latter part of the year, then it might take some pressure off of funding costs. But at the same time, we will be able to maintain or even expand margins, because we are going to be repositioning cash flows.
Brian Martin: Got you. Okay. And last two, Morgan, just was — just the — with the growth you are outlining or at least kind of anticipating by bucket, can you just talk about the reserve level and just how you are thinking about it in the context of CECL? And then just — I know you have talked in the past about kind of the levels of profitability you are targeting. Just thinking about, I think, in the past, it’s kind of in the low 30s or mid-30s kind of a 1% ROA. So just kind of the reserve, with regard to CECL and the profitability outlook would be great? Thank you.
F. Morgan Gasior: Okay. Well, first, on reserves. Yeah, CECL is upon us. We are in the final stages of model analysis and validation, but we do expect that, consistent with the impact of CECL, the overall reserve ratio is going to go up. And obviously, as we put in somewhat higher risk credits in the commercial finance area, middle market, equipment finance, small ticket equipped finance, those are higher reserve ratio credits. So we would expect there to be some additional growth in reserves, both because of the day one impact of CECL and as we pivot the portfolio further to equipment and commercial finance, you will see some higher provisioning. Probably better able to give you more specifics on our next call. But just right off the bat, the middle market, small ticket portfolios will have a reserve ratio greater than 1%.
The commercial finance portfolios will have a reserve greater — ratio — reserve ratio greater than 1%. So on a weighted average basis, both of those credits are going to require higher reserves, and therefore, bring up the average reserve ratio. On profitability, given the timing of cash flows this year, we expect the mid-to-high 20s for the first half, but we do see ourselves hopefully being able to push into the low-to-mid 30s in the second half. The bank at that point would be somewhere between 95 basis points, 90 basis points to 95 basis points on the low end and 105 basis points,110 basis points, maybe even pushing 115 basis points right at the end of the year on the high end. So again, right within that 1% range, which is what we have been trying to achieve, looks like we are getting pretty close.
The key is to just keep it stable in the first half and then work to expand in the second half.
Brian Martin: Perfect. Thank you for taking all the questions. I appreciate it.
F. Morgan Gasior: Very good. Thank you.
Operator: Thank you. One moment. Next question comes from Henry Walzak of HCW. Your line is open.
Unidentified Analyst: Good morning, Morgan. Good quarter there. I was just wondering if — since our dividend coverage ratio has improved drastically since earnings have gone up, would you consider an increase in the dividend or a special dividend that will really help us all timers? Thank you.
