Paul Patterson: I guess. But what Julien was asking, but I believe was the annualized rate, and I think he was suggesting from the annualized rate starting now and the new net interest margin. And I guess to be clear about this, how do you see the net interest margin for the next 12 months, I guess is what I am saying, or for the next six months, how about that? Would it just be the two-third, if we average it out, we could be reverse engineered, I guess basically looking at what you guys had four months ago and what it is now, or how should we think about that?
Ann Teranishi: Yes. So, the NIM guidance is for the full 2023, and we are not really able to comment as to 2024. The cost of funds is creating some pressure on the NIM, and we are just managing that, being very surgical in how we apply pricing as well we originate new loans, how we are structuring and how we are pricing loans. So, that’s all being very carefully managed.
Scott Seu: Yes. And Paul, I think I am trying to be clear on my answer here. So, the $270 to $280 range is for the full year 2023, right. Our Q1 was $285. Q2 was $275. And as we project them throughout the remainder of the year, that’s where we are estimating the full $270 to $280. And that is our range. That’s our – we are fairly confident in that.
Paul Patterson: Okay. I appreciate it. Thanks so much.
Operator: Our next question is from Jonathan Reeder with Wells Fargo. Your line is now open.
Jonathan Reeder: Hey, can you guys hear me okay?
Scott Seu: Yes. Hi, Jonathan.
Jonathan Reeder: How are you guys?
Scott Seu: Good.
Jonathan Reeder: I guess I might as well continue with a bank question. But I guess for us, utility dedicated folks like what can you do to limit or even eliminate the higher wholesale funding, like it seems like that’s something that’s more controllable on your end to some degree?
Paul Ito: Yes. Jonathan, in terms of the wholesale funding, what drives whether we can pay that down is really deposit trends or deposit growth. In this current environment, right, we are seeing deposits relatively flat. And so being able to pay down those – that wholesale fund is, we are not expecting that for the balance of the year. The other thing that drives that is sort of pay down off of the investment portfolio and our loan portfolio, the cash flow from that. But the other offsetting factor is loan growth, right. So, we have to sort of balance all of those three things in terms of loan growth, deposit growth and then determine is there excess cash flow? And if there is excess cash flow, we would pay down the highest cost funding sources first. But specific to wholesale funding, we are not expecting a significant – or we are not expecting to pay that higher cost of funding down any meaningful amount for this year.
Jonathan Reeder: Okay. So, I mean in your opinion, it’s still worth having, I guess that wholesale funding balance out there if that – in order to, I guess grow your loan book still like that’s a trade-off that still is worth it versus just saying let’s keep the loans flat versus low-single digit growth?
Paul Ito: Yes. I think – I mean yes, just given the current interest rate environment that we are in, the fact that loans are pricing or being issued at higher rates, but our funding is also at a higher rate. So, it is a little bit non-accretive to NIM, but accretive to NII.
