Christopher Del Moral-Niles: In the near term, we expect CD growth, certainly in the first quarter, to be a significant contributor. Our current Lunar CD special will attract good flows. It’s been out there for about a week and the early read on that has been very positive, both on the consumer side and in the private banking client base. So, we’re encouraged by that and that will result partly in some of the deposit compression we expect to see in the first quarter. With regard to overall levels of noninterest-bearing demand accounts, we have previously bottomed out in the high 20%s. We were at 27%, 28% at sort of a low point. We think we are trending in that level today, and we think that is a relative benchmark from which we will grow from over time.
Matthew Clark: Okay. And then just on some spot rates, it looks like that slide is no longer in there, that detail. Do you have a spot rate on deposits at year-end? And then just a related — well, on the other side, on the resi mortgage book, you show a rate sheet price for 30-year fix of 7.88%. Your portfolio is at 5.49%, which obviously includes hybrids. But can you give us a sense for kind of the spot rate on that book as well? You would think you get some decent lift out of that rate. So, two questions within them, sorry.
Christopher Del Moral-Niles: Yeah. So, I would say, we have started to see, aside from the CDs, other deposit rates basically flattened out and some even start to trend lower. And on the mortgages, yes, it was 7.88% at year-end and it’s in the 7.5% zone as we sit here today.
Irene Oh: The spot rate on deposits at year-end was [2.65%] (ph).
Matthew Clark: Okay. Thank you.
Operator: The next question comes from Andrew Terrell with Stephens. Please go ahead.
Andrew Terrell: Hey, thanks. Good afternoon, everybody.
Dominic Ng: Good afternoon.
Andrew Terrell: I wanted to circle back to the expense guidance just a little bit. Can you talk maybe, Chris, just about how we should expect the expense run rate to progress throughout the year? It feels like we could see kind of a seasonal bump earlier in the year and then kind of run rate moderation to the back half, especially if we’re to get — the forward curve to play out, you get that relief from the deposit costs. So, any color on kind of the run rate throughout the year on expenses would be helpful.
Christopher Del Moral-Niles: I think you’ve called that correctly. So, we’re not going to see a material savings in deposit related costs in the first quarter, absent some Fed rate action, and maybe even a slight delay into the second quarter. So, those cost savings and those benefits will really come in the third and fourth quarter. And on the other side, we are going to see an increase in our comp and benefit expense as we move through the first quarter as we go through the normal round of salary adjustments that we do here every year. And so, as those numbers roll through, which will pick up at the end of the first quarter, they’ll impact expenses a little bit in the first quarter and then we’ll see the offsets coming as rates decline later in the year.
Andrew Terrell: Okay. Great. I appreciate it. And if I could also ask just as we think about maybe the opportunity for some of the BTFP reduction that you talked about earlier? Can you just remind us the cash flow you’d expect off the bond book coming in 2024?
Christopher Del Moral-Niles: Roughly $0.25 billion or $250 million a quarter.
Andrew Terrell: Okay. Great. I appreciate it.
Operator: The next question comes from Brandon King with Truist Securities. Please go ahead.
Brandon King: Hey, good afternoon.
Dominic Ng: Good afternoon.
Brandon King: So, on the strong C&I loan growth in the quarter, and I didn’t see this in the deck, but could you comment on what the utilization levels were? And then just give us your expectations for utilization levels? And if we could potentially see maybe [indiscernible] uptick if rates come down?
Christopher Del Moral-Niles: The utilization level was 67% at year-end. I think when we look about — when we think about uptick, it’s a demand dependent question though. And we would say in a softening economy, we don’t expect demand to run away with that number in 2024.
Brandon King: Okay. And then lastly, just on the hedges you have and stuff you have, how do you currently feel about your position? And are you looking to potentially add more?
Christopher Del Moral-Niles: Yeah, I fell — we certainly got comfort in the fourth quarter that our forward starting hedges were a good call. As I mentioned in my comments, some of them are already in the money. So, you don’t usually put a trade on expecting to be in the money in the same quarter, but I’m glad we did. And we’re looking forward to an outlook that should have those cash flowing as we move to the end of the year, which is always a wonderful thing.
