Brody Preston: Hey Tom, I just wanted to follow up on the expense commentary. I’m sorry if I missed it, but did you — could you tell us what the cost savings are from the mortgage restructure and the timing of when those kind of work in to 2023? And then separately, kind of what’s a good run rate for operating expenses for the first quarter of the year?
Thomas Cangemi: So, obviously, the first quarter is going to be the highest quarter because it’s always the highest quarter of the year with payroll taxes and the like. But we embarked upon the mortgage repositioning and restructuring of that line, that channel, in late January. So, you’ll see that benefit going through towards the back end of Q1. The number is significant, as I indicated in our opening commentary, we’re taking a ton from around 800 FTEs, where before at the high, in 2021, that was 2,100. So it’s a significant downsizing when it comes to a line of business. That being said, there is a benefit there on cost reduction. At the same time, we took into account the revenue offset of that as well, right? So, because you’re taking out an unused balance sheet opportunity, so you have to look at the revenue side.
And we also went into, I’ll call it, shared services tied to embedded mortgages. So, all-in, that number is well of a $100 million stand-alone. But at the same time, we also have our own cost structure that we have to focus on, on a combined basis on just the synergies of the company’s combining. And that number is, as indicated back in — when we announced the deal, is about $125 million. Lee Smith has done a phenomenal job over the past 1.5 years managing a very tough business. He’s always managed the business well. But 2022 was a challenging year, so they’ve been cutting and cutting and cutting at the end of the day, we looked at the business at the fourth quarter and we wanted to make sure that this business is not losing any money. So we think that at this stage of the game, where we focus on mortgage, we’re at a position where we have optionality to make a lot of money in the mortgage market change, but we’re not going to be losing money in the current environment.
That’s important as we set the stage with the run rate. And think about the concept I was explaining on the call is that we want to be in a position where our multiple is not tied solely to mortgage and our multiples tied to a balanced revenue stream. Having this unique structure on mortgage, traditionally consistent with a lot of the regional banks of our size, and having an embedded nature in mortgage, we have a great opportunity to look at the multiple as more of a commercial bank like multiple as we transition to a true commercial bank from a thrift model on the funding side. So clearly, we want to focus on multiple expansion. We think this is one of the pieces of the puzzle we get there, and we acted promptly right after the closing, given the conditions in the marketplace.
So when it comes to cost structure, like a guidance at $1.3 billion to $1.4 billion, we hope to be on the low end of that guide. But clearly, we think it’s a number that’s achievable for us and that the cost structure starts to see discernible adjustments starting in February. But there’s a lot of moving parts here because you have to look at both mortgage revenue and mortgage expense. Maybe, Lee, if you want to add some commentary on the mortgage — of this journey, and this is your hard work and effort, which we want to commend for the effort as well.
