John Hairston: I’m sorry. This is a time lag, I think, I’m sorry, Catherine. I didn’t interrupt you. The other color I would add is the work that we did on the expense and the efficiency side, that was real. There really were no gimmicks to it. And so, as we get to a little bit better time with an expectation of growing the balance sheet, the scalability of the operating footprint should show itself. And so, as a result, we really shouldn’t experience the type of expense increases that we had in the last expansion period, to be as — we would expect those to be lower when we get to the next expansion period. So that’s really the fuel behind both the ROA and the ER being pretty solid is the expectation that we can have a pretty good expense number.
I know the guide for €˜23 doesn’t look that way, but we wouldn’t see that type of expense growth, I think, in the future, presuming that salary costs and that sort of stuff don’t escalate in €˜23 and €˜24 like they necessarily had to in €˜22. So, a big chunk of that $23 million number is just the full year’s impact of tellers becoming 60% more expensive and apply that throughout the rest of the hourly workforce, so. But that shouldn’t recur as we get into €˜24 and €˜25. Does that help?
Catherine Mealor: It does. And that’s exactly where I was going. I was assuming that the expense growth would be at the 6% to 7% pace in future years. So that all rounds up perfectly right.
Operator: The next question comes from the line of Christopher Marinac with Janney Montgomery Scott.
Christopher Marinac: Hey. Thanks very much for all the information today. I just want to piggyback on Catherine’s question on loan yields. When you look at the 6.25% new loan yield on variable, does that put any strain on borrowers at this point? Is there any upper bound as that most likely reset again in the first quarter in terms of just the ability for customers to handle that and/or their demand at that rate level?
John Hairston: I don’t think so at this point in time — Chris, this is John. The — as Ziluca mentioned earlier, when we stress test the book that we have right now and do that in some of the different specialty sectors, the forecast as we have it right now really doesn’t point to much additional stress. We’re not presuming the Fed goes up to a 10% overnight rate, right, with that, that’d be a little different world. But — and what we expect now the Fed futures curve, we don’t anticipate a lot of stress. Where you’ll see the byproduct is where you see them begin to diminish spending and start to — in our expectations, they begin to warehouse operating capital on their own balance sheet versus depending on lending alone. So I think it would be more of an impact on our underwriting going forward, and our expectation is the way the customers manage their own balance sheet.
Mike Achary: Yes, I think that’s right. And as John pointed out, I mean we tend to stress our borrowers when we’re doing new underwritings or even renewals on existing loans just to make sure that they can withstand what is the anticipated rate rise is in the portfolio.
Christopher Marinac: And is it fair to say then that the leverage of your borrowers really is not at a worrisome level, just given their ability to handle from your stress scenarios?
Mike Achary: Yes. No. I mean, obviously, some individual customers, depending on some of their other challenges that they may be experiencing from an operating cost standpoint that we may not even be aware of, could have some challenges. But as I pointed out, we’re not really aware of any that have kind of a combination of all of those factors at this point in time.
