Operator: The final question comes from a line of Michael Rose with Raymond James.
Michael Rose: Hey, guys, thanks for taking my questions. Just a few quick ones. Greg, I was hoping you could kind of give a range or kind of quantify what the impact of the seasonal municipal deposits is and what we should expect.
Greg Robertson : Yes, that’s, we usually see $150 million to $200 million come in over this course of a quarter. That does impact the margin negatively because of the costs of those funds that come in that are mostly interest-bearing. But I think that the biggest part that we usually struggle with forecasting is that it is tax money. So it’s all dependent on the speed at which it comes in. For example, last year it came in of a very, very late, the end of Q4 and balance of Q1. It just really depends on when the taxpayers bring the tax payments in. But it’s about $200 million in total.
Michael Rose: Got it, helpful. And then it seems like loan growth is going to kind of reaccelerate here as we move into next year. You guys have done a good job on the deposit side. Now the loan to deposit ratio has gotten down in kind of the mid-90s. But it seems like maybe that’s going to go up again. I assume the target is to kind of keep that sub 100%. Is that what we’re thinking? And I know you talked about some of the deposit stuff earlier. But is there anything more that you’re looking at to grow some of the core funding? Thanks.
Greg Robertson : Yes, I think definitely we’d like to stay below 100%. One of the reasons for the excess liquidity is to bang off that fund, but it’s also just to make sure we have some liberal room in terms of liquidity so that we can do that even if we have certain relationships that we feel need to take advantage of. The governors on the loan growth though will be capital retained earnings, capitalizing that growth and then deposit generation. So we would love to be able to generate deposits at a rate slightly greater than loans. That may not hold true every single quarter, but over the course of the year we feel like with our focus and results that we’ve demonstrated this year. And the results, so it’s one thing to have the deposit growth, but it’s another to actually demonstrate internally that the more balanced approach to growth pays off in terms of higher earnings.
And that’s a positive thing for us to be able to demonstrate. We have demonstrated it over the course of the year and as we talk internally, as we think about incentive programs, as we think about continuing to build upon the cultural aspect of placing importance on deposits. I don’t see any reason that the improvements that we’ve demonstrated this year won’t continue into the future. We certainly, we’ve not talked before about three and a half, four years ago, three years ago, three and a half years ago we set a five-year plan. And part of that was achieving a certain level of growth in asset size, which we felt was kind of a sweeter spot to be in as we’ve come close to that now in our own pace to get there over within the five-year plan. That means, as I’ve talked about in the previous quarter, recalls that it’s a bit more of a focus on not growth, but on healthy, profitable growth.
And so that means that we’re not going to, we won’t return to as high a level of loan growth in the near future focus on balanced growth, which would imply that we want to maintain that below 100% loan deposit ratio. And we certainly feel like the 7%, 8% loan growth next year, we feel we could do, needs to be accompanied by a similar level of deposit growth. And that’s what the work to do.
Michael Rose: Very helpful. And that ducktails into my final question. It just seems like putting together all the pieces. Looks like you guys should be able to eke out some positive operating levers next year. Is that the way we should think about it?
Greg Robertson : That’s the goal. I think that we’ve been doing that in the last couple quarters and I’m certainly want to continue to do that. So, yes, I’ll be disappointed if we don’t.
Michael Rose: Great. Thanks for taking my questions, guys.
Jude Melville: Hey, Michael. One other thing, your point about seasonality and the tax funds coming in out reminded me of some seasonality and our expense base in Q4. I just want to be sure we highlight Q4 seasonally higher, about $1 million, little over a $1 million on the expense side. So, just wanted to make sure we didn’t lose sight of that. All right. Can we get, any more questions?
Greg Robertson : Yes. I think we’ve lost our operator.
Operator: [Operator Instructions] All right. It looks like there are no further questions at this time. I would like to turn the call over to Matt Sealy.
Matt Sealy : I think I’ll take it to Jude for any closing remarks that you might have.
Jude Melville: Yes. Thanks, Matt. Well, I appreciate everybody’s time today. We were very pleased with the quarter. I mean, it’s from capital accretion to the earnings improvement to the focus on adding liquidity of environment in which liquidity is hard to come by and doing so at fair prices that weren’t damaging to our margins. I think I think from an operating standpoint, we had a great operating quarter and I think continuing to do that over time will justify stock appreciation as the market normalizes at some point, which I know it seems like it’s been a long time and it could potentially be a while, but at some point, banks will be in favor and we feel like we’re positioning ourselves to be one of the higher fliers in that market. We’ll keep grinding out operationally, also pride of our team and appreciate the interest. Happy to have any follow-up calls that we need to have. Happy night.
Operator: Thank you. This concludes today’s conference call. You may now disconnect.
