Irene Oh: Yes. I mean, Gary, honestly, your guess is as good as mine, right, around that. But realistically, as we’re kind of modeling it out, our assumptions are that there will be a lag, right, as the deposit cost will remain somewhat elevated for a period of time. Now there have been different examples in the relative kind of recent history as well, let’s say, with the pandemic and race changed dramatically where we were able to go in and dramatically lower deposit costs as well. But as we’re modeling out with our guidance for the rest of the year, we’re not assuming that.
Gary Tenner: Yes. No, I’m certainly not suggesting that deposit costs go back the other direction, but more so that the lag following the Fed height is shorter perhaps than it’s been the past.
Dominic Ng: Yes. At this point, I think at this point, logically, I would expect that, I mean is — I mean, if you look at the rate spike in the fact the entire banking industry, it’s because of March 8, March 9, the news of Silicon Valley Bank that caused a dramatic change on the rate environment that it sets, heighten the attention for consumer retail or commercial customers and then everybody starts looking at either moving deposit out or asking for a higher rate? And then some sort of like one big two to three weeks’ time that this caused the big surge of interest rate. And obviously, that has subsided dramatically. So we don’t see that another 25 basis points is going to make that much to a difference by now because the banking industries have stabilized.
And I assume that the other banks would also be a little bit more prudent in terms of going out there and putting out their high rate to attract deposits. And when that’s the case, the competition is, then no one has to really put up higher rate. But when the competition go crazy and then we all have to somewhat move along in the same direction.
Operator: Our next question will come from Chris McGratty with KBW. You may now go ahead.
Chris McGratty: Great. Just a quick one, Irene, on the margin. The quarter-on-quarter change from two cuts to one additional hike was the reason for the TRIM guide. If the forward curve plays out and we get cuts next year, can you just make a comment or two about how you think the margin may react?
Irene Oh: Yes, great question. I think, first of all, we will give guidance for 2024 in January, and that’s not something that we’re planning to do today. Given the variable nature of our loan book, that is something, Chris, that we’ve tried to be disciplined around and putting on swaps and hedges to preserve the net interest income and the interest income on loans as much as possible. This year, that’s been tough as far as the impact of that to the interest income on loans and also AOCI, quite frankly. But certainly, I think if the rate cuts happen, that will be something that we were fortunate to do in prior periods.
Operator: Our next question will come from Brody Preston with UBS. You may now go ahead.
Brody Preston: Irene, I just wanted to — I know it’s not a huge driver of quarterly results, but I just wanted to ask if you had any thoughts around fee income moving forward, if you thought kind of this, I would call it probably 77% and change in kind of core modelable items going forward if you thought that this was a good run rate or where that would shake out?
