And those pieces aren’t lost, I appreciate you pointing those out where we’ve got a fairly significant premium still on SBA loans because of the weighted average life, it’s roughly $24 million in total. So that prepayment activity there has been fairly robust and that can cause net interest income and margin to move around quite a bit on a quarterly basis. I don’t know that we have done a good job of shining a light on that, but you get some payoffs in that activity and that can push the forecast around. But I think we think dollars are reasonably stable with some growth 1Q to 2Q, maybe a little bit of growth there and then some growth in the second half on dollars.
Andrew Liesch: Got it. Alright. That’s really helpful there. Thanks for the clarity. And then just on the expense front, pretty big increase in the seasonal bonus accruals, payroll taxes, what have you, I mean how much of that did you expect to fall out of the run rate here in the second quarter?
Keene Turner: Yes. I think there is a little bit of a trade-off here because the deposit costs in the quarter normalized or roughly 22.5. The 20.2 had a reversal of 2.5 in there. And I think those essentially trade off some of the expenses that were in the run rate. So, with a little bit of an additional uptick in core related expenses, I think for the second quarter, we think it’s more like $94 million to $96 million of expenses, the higher end being with a little bit heavier core and sort of in the middle with a little bit of abatement of payroll tax and some of the seasonal items. But the specialized deposit costs are going to snap back to the run rate. And then if we expect that there will be some growth in those balances, so with the ECR running just over 3% in terms of the accrual rate, that’s going to be a sequential increase in push what is otherwise we think expense controls into that range of $94 million to $96 million.
Andrew Liesch: Got it. Great. Helpful there. And then on the core conversion, any update or that’s still early stages to provide any sort of financials around that?
Keene Turner: Yes. I guess what I would say, Andrew, is that we continue to make progress in making sure that dollars going out the door for those related expenses are well managed. I think some of it just depends on where it is in terms of what’s coming through the P&L. But I still think $4 million to $5 million in the year is likely to occur. We are getting a few more of those dollars here, first quarter, second quarter, I thought they would be maybe more third quarter, fourth quarter, heavy, but we are getting some that are trickling through. And to the extent that we get any more updates there, we will let you know. But things are going well and as planned, and those dollars, I think our money is well spent to make sure that both we have a smooth transition, and we also have access to the information when we wake up on Monday and go to work.
Andrew Liesch: Got it. Very helpful. Alright. Thanks for taking the questions. I will step back.
Keene Turner: Thanks Andrew.
Operator: And your next question comes from the line of Damon DelMonte with KBW. Your line is open.
Damon DelMonte: Hi. Good morning guys. I hope everybody is doing well today. So, first question on the tax credit income line, Keene. Can I understand, I appreciate the impact on the – with the move in rates? Of that loss that was reported this quarter, how much does the rate movement impact that?
Keene Turner: Yes. Damon, it’s essentially all rate-related impact. It’s maybe there are some credits that offset that a little bit, but 10 basis points is roughly $1 million and SOFR was up 35%. So, it’s largely that’s driven by the – that negative in terms of what the rate movement was.
Damon DelMonte: Okay. So, if you – is there any – it’s such a big variable to the bottom line there with the swings. But I mean do you – absent any material move in rates here in the second quarter, do you think that you go back to like a $1 million to $2 million level, or is it just impossible to gauge that?
Keene Turner: No, I think we do think that at least here in the second quarter, there is going to be some activity. And I think overall, we expect to overcome the negative on rate. So, still like a plus $10 million for the year for 2024 as long as rates don’t hurt us too much. So, I think the fundamentals of that business and the activity there are still good. It’s just a little bit tough to outrun some of those larger swings in the quarter.
Damon DelMonte: Got it. Okay. And then as far as like the provision goes, the reserves at $123 million, you cleaned up a couple of credits here this quarter. How should we kind of think about the provision level over the upcoming quarters?
Keene Turner: Yes. I think that we think that with maybe some of the ag portfolio going away, we put some extra there. We are optimistic that we won’t necessarily need that. And it’s tough to say what’s going to happen with the economic data. I mean my expectation is that the rate forecast will probably put some negatives into the longer end economic data, but that net-net, the economic assumptions underlying that will be unchanged. And some of it will just depend on how much we are a little bit more weighted toward the negative just in terms of how the model works out, how much the revisions downward weigh on that. I think our goal is that we want investors and everyone to feel secure about that we have got sufficient reserves, and we are going to continue to be maybe a little bit more on the conservative end.
But I think without really degradation of credit or material growth, I think there is some opportunity for the provision level, particularly here in the next quarter to move in our favor a little bit.
Damon DelMonte: Got it. Okay. And then just lastly, if you look at the average earning asset yield, I think it was flat at 6.20% quarter-over-quarter. Are you surprised by that, or would you expect there to be some expansion still?
