John Pinto: 2.50.
Thomas Cangemi: Coming off a 3% coupon, so that’s adding to the benefit of repricing. When you think about the choices going forward — absent the funding side, on the asset side, we really do have a unique opportunity to have a lot more assets repricing into the marketplace, as well as a much more, we call, higher-yielding offering when it comes to the floating rate instrument, and more of a focus to allow our customers to utilize derivatives to finance their long term as an alternative solution and traditional fixed rate terms. So we’ve been proactive on running out the capital markets activity that Flagstar offers to their customers to some of our larger multi-family players that are doing larger transactions we want to synthetically structure for the balance sheet.
So we really do have an interesting series of choices on the verticals to really drive capital into businesses that are high-yielding businesses. That being said, the funding is where you have still pressure. Obviously, I indicated about a 4%, 5% liability sensitivity as we close the books at year-end, but that’s going to have a couple more rate hikes. And obviously, the forward curve has a pause for a while, so we’re going to deal with that. But ultimately, we think we can move that 5% to neutrality very quickly depending on where we want to position some of these assets. So, I think, we’re going to have higher margins going back to my point. We’re starting in the low 2s and we’re already in the mid-2s in the start of the year. So it’s a different margin business given that we have new asset classes going into 2023.
And with the focus of really building out more C&I business as a hallmark for the company, in addition to our legacy businesses, which we’re going to support, we’ll have a lot more choices, Steven, which will drive margin.
Steven Alexopoulos: Yes. Do you think you can hold in — because the next quarter is going to be the first quarter where we have the new company, right, for the full quarter? Do you think you can hold NIM in this 1Q range beyond the first quarter through the rest of the year?
Thomas Cangemi: You’re not going to get me to a point to give forward guidance on the margin, but it’s a good try. We typically give Q1 — we give a three-month outlook on margin. I think the unique opportunity here is that we have a different balance sheet, we have a different positioning, we have unique asset classes. We’re still challenged, as all banks are challenged, on the funding side. If we could be successful in moving some of these wholesale liabilities into true core deposits, then it’s a game changer for our multiple. That’s the strategy. That’s not going to be an overnight strategy, but we’ve done a lot of work over the past two and a half years. But we’re starting the year very strong with a solid margin compared to standalone NYCB with the benefits of a much higher average margin for the year, knowing that we’re going to have probably an increase tomorrow and another increase in March, which will hit all banks in respect to excess liquidity, including NYCB.
And we love to contend with our liability funding on the wholesale side that’s repricing, and then it’ll stabilize.
Steven Alexopoulos: If I could follow-up–?
Thomas Cangemi: John, maybe you want to add any color?
