Aldis Birkans: I think we have a good shot at it, yes.
Andrew Terrell: Okay, very good. Thank you for taking the questions.
Tim Laney: Thank you.
Operator: We’ll go next to Andrew Liesch with Piper Sandler.
Andrew Liesch: Hi. Good morning, guys.
Tim Laney: Good morning.
Andrew Liesch: Just sticking with the balance sheet and the margin here, do you think the balance sheet reached the point where any incremental rate hikes aren’t going to have any benefit to the margin or funding costs could increase that quickly in the near term assuming we get some rate hikes this quarter? Or do you think there’s still some upward bias from the rate hikes?
Aldis Birkans: I think there might be still upward bias. The way we calculate it in terms of again our model language clearly is modeling and a lot of times, we’ll hit far away from reality. But we still reflect small asset sensitivity in our position. So I do expect that the rate hikes might still be beneficial on net-net basis. Again, in my mind, any marginal rate hike just creates that catch up, so to say, the cost of funding at some point. And why we say 4% return is really that’s how, and I think I mentioned that in prior calls is, when we look at our balance sheet composition, the type of lending that we do, the type of core deposit balance sheet that we have, the liquidity that we have through the investment portfolio, in the long run I think we can maintain in a normalized yield curve or normalized rate environment 4% or thereabouts margin. And therefore for us today it feels elevated and it’d be projecting it to normalize it over time.
Tim Laney: I would add is if you take this down to the banker level, our bankers understand that as the cost of their inventory, which is deposit increases, it’s incumbent that they increase spreads on loans that they’re making. We take it one step further in terms of our relationship to review with a client. If a client is providing low cost funding, they’re going to see one level of pricing as compared to a client or a prospective client coming in, looking to borrow money but not having the core operating accounts and core deposits available. And that’s a discipline that we adhere to that we’re not going to let up on. And that’s why I may be a little more optimistic than even Aldis in terms of our ability to continue to see progress on loan margin.
Aldis Birkans: And one more data point I’ll add is that for fourth quarter, which included October originations that were before the latest rate hike, our new loan origination rate was just under 7%. So newly originated loans away from rate increases and from variable rate loans are accretive to our margin.
Tim Laney: We’re not going to give business away. And we are not into doing business to lose money in relationships. And I think our clients understand that.
Andrew Liesch: Got it. That makes sense. Thanks for that color there. And then just a little detail on the loan growth. Have you seen the pipeline or demand temper at all, or is it still pretty strong, you just expect growth maybe to slow in the latter part of the year?
