Thomas Cangemi: Look, I think the reality is that, we put the company together at year-end. We have an opportunity to look at some of the assets that, in particular, mortgage rate that we can structure into a opportunity for liquidity. And liquidity is expensive right now. So if we go into cash or short-term securities, we’re not going at zero anymore, it’s around — approaching close to 5%, assuming two more rate increases. So we have flexibility here. We believe that eventually, when the securitization markets open, we have lots of liquidity we can pull through, given the assets that were acquired through the Flagstar transaction, some of those resi portfolios and other asset classes. But the reality is it goes back to the opportunity to really deploy capital into higher-margin businesses.
We’re being very cautious in respect to pricing. We have a very interesting opportunity in front of us regarding yields. And if you think about our multi-family business, they’re averaging in the 3s and the market is closer to 6 right now. We’re not seeing a lot of refinance active. We’re not seeing a lot of purchase activity, but we are seeing is that we still have about $8 billion over the next few years, repricing, mandatory repricing. And they have to make a decision, and that market is a much higher rate environment. Assuming the Fed holds this for longer, I think our customers will have to just go into a different option, which will be a higher interest rate to do nothing. So we’ll manage through that very carefully. We’re seeing about half of those loans go right into our new product, which is a sulfur product, which is a floating rate product, which is great for interest rate risk, but we’re endorsing that as a company.
But we feel very confident that we can move the portfolio to a higher-yielding asset class. At the same time, be very focused on the best yielding opportunities in the marketplace because we have diversification. This bank now has a very well-diverse vertical opportunity. And we’re going to make sure that we maximize our capital spend to ensure better margins going forward. Starting the year off at a much stronger margin with the opportunity to redeploy capital into higher margin businesses is an attractive position to be in.
Ebrahim Poonawala: Got it. Thanks for taking my questions.
Operator: Thank you. Our next questions come from the line of Mark Fitzgibbon with Piper Sandler. Please proceed with your question.
Thomas Cangemi: Good morning Mark.
Mark Fitzgibbon: Hey guys, good morning and congrats. Tommy, I wonder if you could help us think about total fee income in, say, the first quarter. I know it’s volatile given mortgage bumpiness, but help us think about the combined company’s fee income capabilities?
Thomas Cangemi: So look, we have a lot of moving parts here that’s new to the company, in particular the capital markets activity. I think that that’s going to be — again, it’s not modeled in, it’s not anticipated as part of the synergies of the merger, benefits of the merger. But we think that now that we have a capital markets division that’s going to look at options for our customer base to put on derivative synthetic positions to hedge their loan products. I think that’s going to be a great benefit to the bank. In addition to that, we could also be creative for our multifamily customers as well to offer those similar products. And we’re not going to put on long duration of paper without any synthetic position, which drives into fee income.
