Paul Taylor: And I’ll add, Matthew. Hi Matthew, good to hear your voice again. I will add that the flat loan growth for the year does anticipate the wind down of those entities.
Matthew Clark: Okay. Great. And then as you’re going through this restructuring process, the other, I guess, question is what kind of ROA do you think you can maintain on an operating basis kind of excluding any additional severance and other kind of unusual items this year?
Paul Taylor: So as we look forward and throughout this year, we believe that we can maintain somewhere around a 110 ROA for the year, but it’s going to be ramping up. So as you look at like December ROA is going to be about a 120, but I’m going to preface that. I mean, 2023 is going to be an interesting year. I don’t think any of us quite know how it’s going to go. I mean we’ve probably got some more increases from the Fed. Most economists believe we’re going to go into some level of a recession. I’m not smart enough to figure out what level or how long or anything like that. But I mean, we will do well, but there could be some macro type items like that, that could cause some variation. And the actions we’re taking now are in preparation, so that we’re flexible and have a balance sheet that’s prepared for that type of environment.
Matthew Clark: Got it. And then just to close the loop on that ROA conversation. In terms of the denominator, you spoke about the loans being flattish, but what about overall assets and borrowings from here? I mean, is there a plan to sell more securities and pay off FHLB? Or how should we think about overall assets by the end of this year?
Kevin Thompson: Yes. I mean, quite honestly, we’re looking at everything. Everything is on the table. As you look at PacWest balance sheet, it’s about $41 billion. I mean there’s an argument in there that a smaller balance sheet could be more profitable. We’re sort of distressed in some areas. But again, that’s part of the reason we sold the billion dollars in bonds. There was sort of a dip in the 10-year, and we had these groupings of bonds that we felt it was worthwhile to go ahead and sell them and take the loss, but we’re looking at all those types of things.
William Black: And it needs to be strategic. We’re thinking of the long-term shareholder value here, what’s the earn back. There’s a level of liquidity we need to hold in the bond portfolio. Also, there’s an element of patience in our unrealized losses, if you wait and the bonds mature overtime, those unrealized losses reverse. So we’re being very strategic and thoughtful through this.
Matthew Clark: Got it. And then on the expense side, you had some severance here this quarter. Just curious what the related savings or annualized savings that you expect from that? And it sounds like that’s kind of the first step, as you mentioned in the release. It sounds like there’s more. Any order of magnitude in terms of the potential cost saves we could see this year?
William Black: Yes, annualized, it’s probably about the level of severance that we saw going forward. And we have other €“ we have an operational efficiency focus right now, where we’re looking at facilities, we’re looking at projects. We’re looking at compensation across the board. Are there things we can do more efficiently? We have a lot of systems and so much more to come in that area as we’re working through our strategic plan.
Matthew Clark: Okay. I’ll step back. Thanks.
Paul Taylor: Thanks.
Operator: Perfect. And we’ll take our next question from Chris McGratty from KBW.
