Kelly Motta: Thank you, Peter. I appreciate the color. I’ll step back.
Mark Grescovich: Thank you, Kelly.
Operator: Thank you, Kelly. Our next question is from Tim Coffey from Janney Montgomery & Scott. Tim, your line is open. Please go ahead.
Tim Coffey: Great. Thanks, good morning, everybody and appreciate the opportunity to ask question here. Peter, as you look to sell securities this next year, do you have any — have you ballparked what the cost of that would be or could be potentially, would it be anything like you saw in the fourth quarter?
Peter Conner: Yes. I think there’s kind of a low single-digit loss on sale and liquidating secures that we need to sell the fund loan growth or deposit outflows. But we — the securities portfolio is stratified with QSIPs that have no loss on them to those that have a more significant mark based on duration. And so, we’re going to triage the securities portfolio in terms of sale based on balance, we’re going to risk return and yield dilution decision. But there’s — just to remind you, right now, there’s $300 million of overnight repos that come up for maturity here in the first and second quarter that have no mark on them and then we’ve got the remaining portfolio that have relatively low marks on it. So we have ample liquidity there without inordinate loss on sale to take advantage of to fund the company as we go through ’23, so we don’t think it will be a material number.
Tim Coffey: Okay, Great. That’s great color. And then, Mark, you’ve got probably one of the best — the best footprint of any West Coast bank. And I’m wondering, as you look across your geography, are you seeing certain markets performing better than others?
Mark Grescovich: Yes. I think — thanks, Tim, for the question. And look, I think — we still see very strong economic drivers long-term in the Pacific Northwest. And Northern California is a very stable market, I would characterize. It’s where you start to see in Southern California, some of the out migration occurring, some headwinds to the business community associated with some political issues and tax issues. But for the most part, I think as we go through the cycle, all of these geographies are going to benefit very, very well from an economic rebound. Most of the markets in the Northwest are still experiencing population in migration. They’re still experiencing per capita income growth, and we expect that trend to continue over time.
Even with some of the headline press of some of the technology layoffs or layoffs associated with aerospace, the markets we’re in are generally not going to be as impacted as greatly as the headline news. So we’re very optimistic about the markets, and we’re very optimistic about the trends — the long-term trends continuing very favorably for us.
Tim Coffey: Okay. And then from — just maybe a general comment of what you’re seeing from your competition. Are there still irrational actors out there in the marketplace? Or are you starting to see people pulling back in a little bit?
Mark Grescovich: Yes, Tim, I’d like to term you’ve set me up well. People talk about irrational behavior coming from other institutions. I tend to look at it this way from our management team’s perspective. We don’t believe that other competitors act irrationally, we just simply don’t understand the rationale of why they’re doing what they’re doing. So there are certain folks that I would characterize were much more aggressive in their behavior than then we would be previously. I think that has normalized now given some of the liquidity constraints of some of our competitors. And I think the marketplace is rationalizing because of the amount of uncertainty that’s out there. So I think things have stabilized to a more fundamental underwriting and pricing behavior in the marketplace.
