Scott Price: Yes. So, as you think about the portfolio, you’ve got the traditional NB-NYC portfolio. And if you go back to the first quarter, you can see that we reserved about 1.25% on that portfolio. Keep in mind that we did have one loan that we were watching, it looks like, that loan could be coming to resolution in the future. And so we’re monitoring that situation, but we don’t expect any losses. And in fact, we expect performance better than what we had originally projected. So, that’s one item to note. I think as you think about portfolio going forward, we generated about $48 million of unguaranteed 7(a) loans during the period. And so as you look at the provisioning on that portfolio, you have to take into account the discounting.
I can’t I can’t emphasize that enough, particularly in the volatile rate scenarios that we find ourselves in today. So, as rates move up, our allowance naturally has a propensity to go down all else equal. So, that’s just the — that is the math and the accounting that, that we’ve elected. So, when you look at it, Barry mention the 7% to 8%, you just count it back, you’re looking at somewhere anywhere 650 to 675 base, prior to the Fed move. So I think you can expect that kind of provisioning, as we move forward. understanding that if rates hikes do go in, we will — that number will most likely come down.
Michael Perito: Perfect. Thank you. And then just lastly, and this will be quick, but just do you have, — Scott, do you have the — or Nick, do you have the average earning assets for the quarter. And can you just confirm that what the average kind of full quarter NIM was? I just want to make sure I have it right.
Scott Price: Yes. So, we’re looking at, total interest earning assets for 6/30 quarter end, at about a $1.89 billion.
Michael Perito: Do you have the average for the quarter though by chance?
Scott Price: That’s that is the average.
Michael Perito: Okay. Sorry. I thought you said quarter end.
Scott Price: Yes. Sorry. Yes, for the quarter ended, 6/30. so a $1.89 million average daily balance for interest earning assets net interest margin, at 2.09 for the consolidated company.
Michael Perito: Perfect. Thank you guys. Sorry for all the questions, but I appreciate you taking them.
Barry Sloane: Thank you.
Operator: [Operator Instructions] Your next question comes from the line of Bryce Roe from B. Riley. Your line is now open.
Bryce Roe: Thanks and good morning. Wanted to start maybe on this concept of the guide and know the seasonality that you that you’ve seen in the past, Barry. So, you’ve got forecast that operating expenses consolidated coming down in the back half of the year. And then you also are showing the NTS and NMS pre-tax incomes going up pretty considerably in the back half of the year. Just curious how you would kind of characterize the seasonality of that or just capturing operating efficiencies as you move further away from the move from BDC to Bank?
Barry Sloane: NMS is clearly a seasonality particularly with third and fourth quarter. MTS I think that there were, right, the issues, particularly in technology where given the economy in Q1 and Q2, a lot of people delayed projects, and we think are coming back on stream. Regarding the lending, we’re fairly confident about the volumes. Obviously, once again, it is hard to forecast, but we feel very good about it. Relative to the operational expenses, we’re just getting much more efficient at this particular business. So, when you look at it as a percentage of things from a efficiency ratio, we’re really just getting a lot more leverage out of our operations and our business, putting more — and that, will be a challenge. We’ll be more technology solutions. We’re I’m very confident. in the NMS because we’re just looking at the seasonal factors there.
Bryce Roe: Okay. Okay. That’s helpful. And then I think, Barry, in in your in your prepared remarks, you talked about a dividend from the bank to the holding company. just wanted to wanted to make sure I heard that correctly. And can you can you speak to kind of the dynamic there, especially considering that you put equity into the bank when you close the transaction?
Barry Sloane: Sure. So, with my Chief Legal Officer on the right shoulder here, imaginary, the only party that can declare a bank dividend is the Board of Directors, and it has to be approved by the regulators. But I’d say with confidence that, this is something that we plan to do, and we are in compliance and subject to those two authorities approving it. I think it’s something that the market can expect. And I would hope, as somebody that’s going to recommend this, both to the regulatory authorities and the Board that a 50% ratio might be something that one can expect from the bank to the HoldCo, paid out of profits, of course. And the HoldCo dividend, which we set is somewhere around 30%-ish, 33% and 300%. So, that’s kind of what our thoughts are there.
Bryce Roe: And reason for doing that is to kind of help manage capital at the HoldCo. I mean, you just talked about really not needing incremental capital at the Holdco. So, just curious how you would use that capital at the whole Holdco level?
