So they have a — there’s a bit of an increase that’s still to carry there as we price off of higher baseline indices that have yet to run through the repricing process. And so to remind you, we have floors, we have a floor mandate on all floating rate and adjusted weight loans, and I would characterize on the floating rate book, we have a higher percentage of floors on that subsection of loans that are LIBOR or SOFR overnight price loans, that’s closer to 80% of those floating rate loans we have a floor on them, that’s within a reasonable strike price of the actual loan yield. So we feel pretty good about the embedded optionality we’ve got in our loan book without having to go out and put a big portfolio floors in the book. we’ve got it naturally embedded in our loan portfolio as it is.
So we’ll have some nicer symmetry when rates come down in the future, given the floors that we’ve been putting in on the way up.
Andrew Terrell: Okay, I appreciate it. And maybe one for Jill on the construction portfolio. I think a lot of investors kind of focused on dynamics within construction books right now. I was hoping maybe you could just spend a little bit of time talking about, kind of, specific credit metrics that you underwrite to in this book of business? And then maybe any trends you’re seeing within the permanent financing market?
Jill Rice: Yes, Andrew. So on the construction portfolio, I don’t want to get too specific as to our credit underwriting metrics, but we do require cash equity in on those projects. We have a pretty strong book of builders in there. The market, as we’ve talked about, they continue to be undersupplied in terms of available homes, and so we’re still seeing good movement in that product. As to the underwriting, the permanent mortgage loans, was that the first part — second part of your question, Andrew?
Andrew Terrell: Yes, that’s right. Just as those construction loans go to the perm market.
Jill Rice: Yes. So the permanent loans, we’re underwriting to the secondary market generally and then determining whether we want to keep it on balance sheet or not for loan growth. The custom all in one, we price that a little higher than the standard market rate so that theoretically, you would be able to float that down and sell it into the secondary market. The fact we would expect from the loans originated late ’21 and into early ’22, because of the rate environment at that time, those will still come on to balance sheet as the construction continues because of the low rate at that time. But the underwriting is generally set in that so that we will sell it in the secondary market upon completion.
Andrew Terrell: Okay. I appreciate you taking the questions.
Mark Grescovich: Thank you.
Operator: Thank you, Andrew. Our next question is from Kelly Motta from KBW. Kelly, your line is now open. Please go ahead.
Kelly Motta: Hi, good morning. Thanks for the questions. Congrats on a great quarter. Most of my questions have been asked and answered at this point. But just wondering, given the position you’re in, in that you have a lot more liquidity so — than some other banks that may be are having more issues. Just wondering if the pace or consistency of M&A discussions has picked up at all or any changes there in the last couple of months?
