That number is around 6% in the market, 225 off the five-year treasury. And that’s where we’re holding our line. I think that’s the right economics for us as we look at the lines of businesses. So when you think about 5% net loan growth, I think that’s reasonable. We always come out with a conservative estimate. If it changes, it changes, but it’s early on. And given that most customers are really kind of sitting on the side and trying to figure out what their funding needs are going to be in a very unique changing interest rate environment, I think it’s reasonable. Warehouse could change dramatically, dramatically if these rates go down. If for some reason we’re in a different rate environment. So at the back end of this year, we have $11.5 billion warehouse book that has about $3 billion outstanding, that number could double very quickly.
So we have an opportunity at very high spreads along with some of the other lines of businesses. So we really are being conservative, and we want to be conservative. So 10% was a big year for us on a standalone basis. And if you take Flagstar’s held for investment portfolio out of the resi side, they were relatively flat or down slightly for the year given the challenge in the mortgage business.
Steven Alexopoulos: Got it. Okay. So just to clarify, you’re assuming 5% over full year 2022 average loan?
Thomas Cangemi: It’s an early guide.
Steven Alexopoulos: Okay. Thanks for taking my questions.
Thomas Cangemi: Sure, sure.
Operator: Thank you. Our next question is coming from the line of Chris McGratty with KBW. Please proceed with your questions.
Chris McGratty: Hey, good morning. Hey, good morning, everybody. John, just to make sure I’m clear on the expenses. The midpoint of your guide is pretty good to consensus, call it, $50 million or $60 million. The amortization expense, need a little help there. It looks like it was $5 million, which would annualize to about $60 million. Is that about the right amortization expense for the year?
John Pinto: Yes, it is. When you look at this change in the interest rate environment, not only did it have impacts on the purchase accounting adjustments for loans and securities but also for CDI. I think originally, we expected CDI to be at a much lower number when we announced the deal, but it’s definitely changed given this interest rate environment. So yes, when you look at that — all intangible amortizations that $5 million, that $5 million a month is a good run rate for 2023.
Thomas Cangemi: Yes. On the $1.3 billion to $1.4 billion, that excludes amortization of CDI. That’s exclusive of amortization.
Chris McGratty: No — yes, that makes sense. It looks like they offset each other. In terms of the accretion, John, any — what’s the accretable yield that might be considered in the guide, or how should we think about accretion income as a margin contributor?
John Pinto: Yes. So the way to think about it is we have benefits coming in from accretion from the loan and the security side, and that’s partially offset from CDs, sub-debt and the trust preferreds. So you’re looking probably on average in the $10 million range, I would say, from an accretion perspective per month. That we’ll probably see. The hard part about getting exact guidance on that is when you look at the Flagstar loan portfolio, especially and even some of the securities portfolios, the floating rate pieces are marked pretty close to par, if not really at par from an interest rate risk perspective. Some of the more fixed rate items has much deeper discounts. So it really depends on the speeds that start to come in on those. So we’re trying to be conservative as to the speed in which those discounts will come back to us. But you could see some swings in that as payoffs come because you’ve got to recapture some of those pretty big discounts as you go forward.
