Brendon B. Falconer: All else equal, right, it would bounce back. And so Q2 would not have the same level of day impact. And then what happens in the back half of the year, I think, is really going to come down to where do deposit costs fall out?
James C. Ryan III: And we’re heading — if the market thinks the Fed is headed in the absent direction, right, I mean that can alleviate some pressure on deposit rates as well.
Scott Siefers: Yeah, perfect. Okay, good. Thank you very much.
Operator: Our next question today comes from Terry McEvoy with Stephens. Terry, please go ahead.
Terence McEvoy: Hi, thanks. Good morning everyone.
James C. Ryan III: Good to hear from you Terry.
Terence McEvoy: Hi, maybe just a question, Slide 12, you’ve got the 10-year at 4% by the end of this quarter versus about 350 today. And I’m just kind of wondering how that could impact the outlook if the 10-year does not change? And then maybe as a follow-up since I’m on NII, do you think even with some margin compression in the back half of this year, the loan growth and the balance sheet growth can support growth in net interest income as we progress throughout 2023?
Brendon B. Falconer: Terry, I don’t think it’s not a huge impact from the 10-year moving around. It will impact a little bit of our investment book and fixed rate pricing book, but not a huge material impact. I would say the same thing with NII, certainly loan growth, earning asset remix will help support NII, but the total NII dollars again going back to the guidance. It’s really going to come down to where deposit costs fall out and what does the Fed do in the back half of the year.
Terence McEvoy: Okay. And then maybe just stick with kind of the hedging strategy, added more swaps in the fourth quarter. Could you maybe talk about kind of the receive rate, duration of the additional hedges, and bigger picture, what’s the strategy from here on protecting the margin from lower rates?
Brendon B. Falconer: Yes, duration on the hedges have been probably around three years. The average strike on that floor today is of the entire $2.2 billion is right around 2.6%. The most recent ones obviously have a strike significantly higher than that. So I think that will provide some meaningful protection. And as you think about it, as deposit costs continue to reprice up if and when the Fed starts to move, we’ve got a lot of support by being able to reduce deposit costs in the back half. So as we think about positioning the balance sheet towards a more neutral position, I think we’re a long way towards that goal already.
Terence McEvoy: Maybe one last small question, if I could, is the tax rate creeping higher, that 24% core FTE, it just seems like I haven’t gone back to past presentations, it just seems like it’s kind of gotten higher over the last few quarters, am I correct and if so, what’s behind that and if I’m not, then we can move on?
Brendon B. Falconer: No, you’re correct. Absolutely. We added, obviously, with the SMB partnership we had a lot of earnings, but our tax credit business has not increased by novel. So we’re working on strategies to continue to invest in that business, and we’ll look to move that forward. But nothing in the near term that’s going to change that. So we feel good about the guidance we gave you.
