Joseph Turner: So that’s going to be – that’s going to add $800,000. The CDs repricing or – as Rex said, that’s not going to be nearly as bad in the third quarter as it was in the second quarter. The non-time accounts, it’s just who knows on those. It doesn’t feel like they’re going to reprice like they did in the second quarter, but that remains to be seen. Now at the same time, we’re also having fixed rate loans repriced upwards. That’s sort of the offset. So – and that’s kind of the next two quarters you get into the first quarter of 2024. And then we – one of the swaps that we have been in a pay position on expires and the full quarter effect of that is between $2.5 million and $3 million improvement, starting the first full quarter that will be Q2 2024.
So I think those are all the things you should take into account. I realized I didn’t answer your question, but I try to give you everything that I know that you need to look at to try to draw your own conclusion.
Andrew Liesch: No, makes sense. Certainly a lot of – thank you for giving those puts and takes. That’s helpful. And then just a question here on the loan growth going forward. Pipeline is down a little bit, but still some optimism around the construction? And how should we be looking at net growth? I mean it seems like there was still some payoffs, just natural payoffs. So low single digits in this environment, the right pace to be thinking about?
Joseph Turner: Yes, flat to flattish. It’s just hard to – we can’t predict – the payoff activity still seems a little bit muted, certainly from where it was in 2021 and probably more like it was in the second part of 2022. And we’ve kind of adjusted our origination activity as well.
Andrew Liesch: Got it. All right. That covers my questions. Thanks. I will step back.
Operator: Thank you. [Operator Instructions] And our next question will come from line of Damon DelMonte from KBW. Your line is open.
Damon DelMonte: Hey. Good afternoon guys. Thanks for taking my questions here. Just to kind of circle back on the margin discussion. You noted that there was $1.7 million drag from the swaps this quarter. And if you look at the rates as of $630, it’d be $3 million for the next quarter. So that’s just an incremental $1.3 million is kind of how we should look at that?
Joseph Turner: Yes.
Damon DelMonte: Okay. All right. Thanks. And then as far as the provision and the reversal of the reserve on the unfunded commitments, are those loans that were closed and moved to permanent status or refinance the way to another institution? Or were those projects that were kind of signed a contract that weren’t completed for one reason or another?
Joseph Turner: No. The negative provision is on the unfunded loan balance. So when we book a construction loan, initially, we don’t fund anything but maybe we have $10 million sitting in the unfunded account. And in total, at the end of Q1, that number was like $1.3 billion. Well, at the end – and we have to have a reserve on that $1.3 billion. At the end of Q2, that number was $1.1 billion. So because there’s less in the way of unfunded amount, you’re going to have a lesser reserve on that, and that’s where that number comes from.
