Valerie Toalson: Yes, no, that’s exactly right. The core margin is really the direction that we’re headed there. On the accretion, you’re spot on, on the scheduled accretion numbers for next year, close to $23 million and that is a headwind for this year. We had $47 million nearly for the year of 2022. It was a little bit higher than fourth quarter because of some paydowns and so forth, but no change to the expected scheduled accretion for 2023.
Michael Rose: All right, thanks for taking my questions.
James Rollins: Perfect.
Operator: The next question comes from Manan Gosalia with Morgan Stanley. Please go ahead.
Manan Gosalia: Hi, good morning.
James Rollins: Good morning.
Manan Gosalia: I wanted a follow-up on the comment on deposit betas. I think you noted 20% to 30% cumulative deposit betas by the middle of this year. Do you expect that to be the peak or just given your other comments on the elevated level of competition that you and others in the industry are seeing right now, should that deposit beta ramp-up as we go towards the end of the year?
Valerie Toalson: Yes. No, actually what we’re modeling is an increase from where we are today, which is a 17% cumulative to kind of our peak deposit beta mid-year of next year, which would be in that 28% to 30% level on a total deposit basis.
Manan Gosalia: Got it. And then, as you think about the mix of funding, to the extent that loan growth exceeds the securities runoff between the quarters and the year, could we assume that you would plug that with FHLB or the other funding levers that you might want to pull, such as growing the CD book?
James Rollins: Yes, I think that — we’ve got lots of securities running off in 2023. So most of the loan growth in 2023 can be funded, if not all, with securities portfolio and the move up of the loan to deposit ratio. So moving our loan to deposit ratio north of 75% is a goal of ours. We would like to see our loan to deposit ratio higher in a more normal environment. So, I think from a funding standpoint, that’s just a temporary spot. So, we’re currently playing in all of the spaces that you just mentioned. I think we’ve got our team moving to grow deposits. Some of our customers are moving CDs around, some people, because of rates have taken CDs. So I think the answer is all of the above, is where we would be funding from.
Manan Gosalia: Got it. And other CDs more shorter-term dated? Or are you putting on a little bit of duration there?
James Rollins: Yes, CD is such a small piece of our book. It’s mostly short. We’re not offering any special spending long-term money.
Manan Gosalia: Got it. Very helpful, thank you.
James Rollins: Thank you.
Operator: The next question comes from Brandon King with Truist. Please go ahead.
Brandon King: Hi, good morning.
James Rollins: Good morning, Brandon.
Brandon King: Hi. So I’m curious, with putting all the pieces to guidance together, are you still sticking with kind of 54% efficiency ratio target for next year?
James Rollins: Yes, that’s a great question. I think we’ve got a lot of headwinds on that. Valerie?
Valerie Toalson: Yes. So what we’re anticipating is gradual progress, just like what we saw in 2022 gradual progress on that efficiency ratio improvement and expect to continue that. There are a few headwinds as Dan mentioned, some of the FDIC expense, somebody other things that we talked about. That’s — it may be early 2024 before we get to that number, but I think, we’ll be at — we’ll be making gradual improvements and certainly working towards that number pretty aggressively.
