Bonita Lee: There’s a little bit of seasonality to — in the smaller loans, too. So we haven’t — in terms of data metrics, we haven’t seen anything that’s potential problems. Having said that, though, in this environment, I think the typical small businesses, whether it’s SBA or equipment finance, they could get impacted. So what we did in the fourth quarter — during the fourth quarter, we actually scrubbed the top 20% of our SBA loans and contacted every customer to see how they are doing and try to gauge and be in front of them as to any potential problems that they may have coming down in the next couple of quarters. So — but we haven’t seen anything alarming as of yet.
Matthew Erdner: Awesome. That’s good to know. And then from people we’ve talked to in the commercial real estate space, demand there is slowing pretty quickly. How has demand been for you guys and your product? And then when do you think we’ll see an uptick in originations in that space?
Bonita Lee: That’s a difficult question. So definitely, we have seen slowdown in the inbound inquiries and the commercial real estate loans. And we are being cautious in certain — whether markets or certain type of properties definitely within the CRE, we are mindful of — the situation is the office properties in selected markets and then also try to stay away from the retail type of CRE loans that is near big-box retailers. So we follow that in terms of CRE market very closely and as well as some of the health care industries to see commercial real estate as well.
Matthew Erdner: Got you. And then what — could you give an example of a couple of markets where you would be hesitant to originate?
Bonita Lee: As I just said, I think in terms of offices, I think it’s different factors. I think it varies. And for the health care properties as well, I think that particular industry is experiencing higher rise in the labor cost and the average increase in the labor market.
Operator: Next question is a follow-up question from the line of Kelly Motta with KBW.
Kelly Motta: I just wanted to follow up on credit. You continue to release reserves at this point. I think you’re at 120 basis points at this time. I understand the reserve levels are driven by the CECL model. But just given where we are heading into what could be a credit cycle, do you think this is the bottom? Or do you think there’s still room to release reserves as we get into 2023?
Romolo Santarosa: So again, a little bit difficult to respond definitively. But if the color of expectations relative to the economy actually start to play out in the first quarter, then you can anticipate that we’re at the low level, if you will. But just like it’s hard on the margin where are rates going to be, et cetera, it’s difficult, but I would — there, I would bet more concern and say, okay, you’re probably at the low end. But if it should drift down, it’s not going to drift down that much. You’re not looking at huge ideas where we were like $140 million at the top of the year, $120 million at the bottom of the year. So there’s not that much more bottom left.
Kelly Motta: Got it. Sorry, I know I’m trying to ask you to look in your crystal ball with that. Last question for me. I apologize if you already addressed this. But Ron, with the occupancy and equipment line, it looks like there was some reversal that you called out in the release. Do you — is that supposed to come back to more like 2Q, 3Q levels of like 4.6, 4.7? Or is that kind of 3.7 run rate on that line a good projection on a go-forward basis?
