Nick Cucharale: It’s pretty ratable in terms of how you’re thinking about the results going forward, we should see a big increase in the September quarter. Is that the correct way of thinking about it?
Jack Plants: Yes, I’ll ask Sean Willet to take that one.
Sean Willett: Yeah. So that’s correct. So we saw increased momentum through the month of July and that’s continued to build as we move forward.
Nick Cucharale: Great. Thank you for taking my questions.
Jack Plants: Thanks, Nick.
Operator: Thank you. [Operator Instructions] We will take our next question from Matthew Breese from Stephens Inc. Matthew, your line is now open. Please go ahead.
Matthew Breese: Hey, good morning. I just wanted to touch on the tangible common equity ratio at 5.5%. Understanding much of this is AOCI driven. I guess my question really is — what is the duration of the securities portfolio? And how long will it take to recoup lost AOCI all things equal? And if in fact takes that long are you comfortable waiting that long to recoup it all?
Jack Plants: Yeah. This is Jack. I’ll take that question. So in the last year we’ve seen about $150 million in cash flow with sort of the last 12 months seeing about $150 million in cash flow come out of the securities portfolio. The duration is influenced primarily by shifts in the five-year point on the curve. And I feel that we’re about fully extended in that portfolio. When I measured it as of the end of June, the modified duration was 5.9%. And as to your comment about being comfortable with waiting that long for that to fully recover and we continue to look at opportunities to optimize the balance sheet when it makes sense. So if there’s an opportunity for us to look at that portfolio and recoup some of that principal with an earn-back that’s desirable. We will take advantage of that.
Matthew Breese: Understood. Okay. And then at quarter end, where did your commercial real estate concentration stand at least for the call report, it’s been kind of inching closer to 300, not quite there yet. And then maybe just discuss comfort levels with over time kind of puncturing through and going beyond 300 and any sort of regulatory discussions around that?
Marty Birmingham: So we’re still under the 300. We’re pushing to 90-ish percent and we’re very comfortable with our approach and the business that we’ve built. But obviously, as we take that step it’s meaningful from a regulatory perspective and from our own enterprise risk management framework and we need to do — we want to prepare to do that in thoughtful and deliberate way when it happens.
Matthew Breese: Understood. Okay. Jack, you talked a little bit about BaaS deposits. The goal is still there making headway in July. What are the costs of those deposits so far that’s coming in the door?
Jack Plants: Yeah. We view them as an attractive alternative to the cost of wholesale funding. And I really don’t want to give out the pricing structure as we view that as a competitive advantage but it’s a discount to Fed funds.
Matthew Breese: Okay. The last thing is just on the tax business, trying to figure out its contribution to the overall bottom line. How do you calculate that? And what is your estimate in terms of that tax business its contribution to EPS this quarter?
Jack Plants: The benefit that we received this quarter was about $0.08 per share from an EPS standpoint.
Marty Birmingham: But it is part of a much larger strategic initiative for the company. We really initiated this business activity in 2018, as we recruited talent that had expertise that could help us engage with the opportunity in the marketplace, deliver our bank in this manner to those sponsors that are dealing with historic or affordable housing. As I’m sure you can appreciate, the extension into CRA and community development activities in the markets we’re serving is significant in terms of its impact and that aspect of our commitment to the well-being of the communities we’re serving.
