Matthew Breese: Right. Are those in noninterest-bearing at this point?
Sam Sidhu: Correct. Yes, they’re all noninterest-bearing.
Matthew Breese: Okay. And were those noninterest-bearing at year-end?
Sam Sidhu: They were noninterest-bearing at Q1 end.
Matthew Breese: Got it. Okay.
Sam Sidhu: There was a big [indiscernible] from the first quarter.
Matthew Breese: So there were moved from interest-bearing into noninterest-bearing earlier this year?
Sam Sidhu: Correct, in the first quarter.
Jay Sidhu: Yes, Matt, essentially, what we did is that these are operating accounts for us. And then we’ve been very much focused on having operating account relationships with every one of our customers. And that is the strategic decision we made, and we exited digital businesses as well as other businesses where we do not get – we only get interest-bearing relationships and nothing else. So all our digital asset relationships right now are noninterest-bearing, and their operating accounts tied to our payment systems.
Matthew Breese: Understood. Okay. The other chunky deposit base per se are the BankMobile, BMTX deposits. What are balances there stand at today? And where are those sitting in terms of – are they noninterest-bearing or interest-bearing at this point?
Carla Leibold: Yes. I can give.
Jay Sidhu: I believe that. Go ahead Carla.
Carla Leibold: No, I was just going to add that they are sitting in the interest-bearing deposits and they’re not a meaningful part of our deposit balance at this point in time.
Sam Sidhu: It’s like low single digits, Matt. So we’ve diversified away from that relationship.
Matthew Breese: Low single in terms of percentage of overall deposit?
Sam Sidhu: Of overall deposits. That’s right.
Matthew Breese: Okay. And they’re supposed to wind down by late 2024. Is that accurate?
Sam Sidhu: Half of the relationship, so then the half that would be remaining would be even less material as a percentage of our overall deposit base.
Matthew Breese: Got it. Okay. Maybe just switching to the installment book. Can you remind us how much has been – how much of the – I’m sorry, securities portfolio at this point ties back to the installment book? Because I think I remember two securitizations, but I couldn’t remember if there was a third one.
Carla Leibold: Yes. So in our HTM book, we have roughly a little over half of that book is for the securities purchased out of the consumer installment securitizations.
Matthew Breese: Okay. And I think in the past there’s been some protections as you go through this. Could you remind us of the past protections? And then were there any with the most recent securitization?
Sam Sidhu: It’s consistent, Matt. So this is a truly completely protected senior position, not so dissimilar to any other ABS that’s sort of in that double AAA range.
Matthew Breese: Got it. Okay. Last one for me. The VC team, should we assume those were from one of the more recent failed institutions?
Sam Sidhu: That’s right.
Matthew Breese: From Signature Bank.
Sam Sidhu: From Signature.
Matthew Breese: Okay.
Sam Sidhu: This is the old Square One PacWest team.
Matthew Breese: Perfect. Okay. That was my thought. Could you remind us of historically what the loss content is for VC lending? My understanding is it comes with a lot of deposits, but tends to have a little bit of a higher loss content. What’s the historical loss rate?
Sam Sidhu: Yes. So the 20-year track record of this team is 1% or less. And when you actually add in some of the warrant income, et cetera, it’s actually zero on a net basis.
Matthew Breese: Got it. Perfect. Okay. Along those lines, should we expect or what are expectations around provisioning for the remainder of the year?
Carla Leibold: Yes. So for the provision, again it’s hard to predict, but I would say between that $18 million to $22 million range for the back half of this year feels right.
Matthew Breese: Got it. Okay.
Carla Leibold: Thanks.
Sam Sidhu: Thanks Matt.
Operator: And we only have a little time left, so we’ll take our one final question from Bill Dezellem from Tieton Capital Markets. Your line is open.
