Joseph Sutaris: So we did flatten a bit in Q4 versus Q3, however, the net interest income didn’t increase, which is kind of in line with our, with our expectations. When we talked on the third quarter conference call, however we look forward, I think in the in the first quarter, you could see potentially us go a bit backwards in terms of the NIM just because of the increase in funding costs. And on NII, we potentially go backwards. We lose effectively 2 days of net interest income on a short, shorter quarter in the first quarter. With that said, as Mark was referring to in the in the second quarter, we start to see some significant cash flows off the securities portfolio. And so the expectation, then we would also typically have some seasonal loan growth, kicking in the second quarter.
So based on what we can see now, assuming, funding is somewhat stabilized, we would expect some, some expansion and kind of through the second and third quarters of next year, and obviously, the fourth quarters away is a ways out, but the expectations are we see increasing net interest income, kind of in the back half of the year.
Unidentified Analyst: Thanks for that. One last question and then I’ll hand it over. You’re talking about the securities books, what is the duration of the security books at the end of the quarter? And does that timeframe correlate with the recapture of AOCI?
Joseph Sutaris: Yes, so the duration is just under 7 years on a combined basis when you look at the Federal Securities portfolio, which is kind of in line with where it was. We talked about it in the in the prior quarter. And what was the — I’m sorry, the second part of the question?
Unidentified Analyst: Does that timeframe correlate with the recapture of AOCI?
Joseph Sutaris: Yes, to an extent if I’m if I’m following the question, but in fact, what we did when we reclassified the securities, that they are roughly billion dollars in market value of securities into HTM is really to reduce volatility, if you will, around our tangible equity and tangible book value. We also have about $1 billion, $1.3 billion in municipal deposits that require pledging, require securities. And so we’re effectively required to hold securities for a long period of time to secure those deposits and, in effect, the amounts that we reclassified are similar to the amount of that we typically carry their municipal securities.
Dimitar Karaivanov: Yes. And maybe if it’s helpful, just to add to that, the duration of the AFS portfolio today is just about 5 years, which is what we’re going to predominantly use for our balance sheet, remixing going forward as we transition from securities into loans. So we’ve got those 5 year duration cash flows and believe about 4 billion of securities in that bucket.
Unidentified Analyst: Okay, thank you for that.
Operator: And our next question will come from Matthew Breese with Stevens. Please go ahead.
Matthew Breese: Good morning. I wanted to continue on the securities discussion. You had mentioned that you expect I think, $400 million to $500 million of securities maturing in the first half of the year. What does that schedule look like for the back half of the year? And could you give us some frame of reference for on that mix shift over the next call it, 12 to 24 months where you want to bring that securities portfolio down to as a percentage of assets?
