William Black: Jon, I think that right now, that there’s a lot of wood to chop, right? I mean, Paul has been here as CEO for 28 days, I think, it is.
Paul Taylor: Yes.
William Black: I mean I think that there’s a clear plan, a clear vision of where we want to get to. And if we can execute on that plan, I think the results are going to be pretty good for shareholders. And I think that the metrics we laid out are not the ultimate goal. This is kind of where we think there are. But I think if we do what we think we can do, we think that’s possible. And listen, like we’re not trying to be a mediocre, right? I mean we’re trying to push ourselves to generate really strong top quartile results.
Paul Taylor: Absolutely.
Jon Arfstrom: Yes, the EPS growth, one is the one that stands out, right, the others with efficiency and returns and capital something got to be a little bit different to the top quartile and EPS growth?
Paul Taylor: Yes. I think if you look at the core earnings power of PacWest historically, I don’t think that it’s changed. And I think the goal is to take what has been top quartile and drive it better. And if we can get there from here, you will generate those types of results.
Jon Arfstrom: Okay. Thanks, guys. Appreciate it.
Paul Taylor: Thank you.
Operator: And for our last question, we’ll go back to Matthew Clark from Piper Sandler.
Matthew Clark: Thanks for the follow-up. Just a couple of questions around the margin outlook. Can you speak to the cost of those FHLB borrowings that you ran off and the securities yields as well? I mean I would have thought you would have a pickup in the spread for the upcoming quarter to help mitigate some pressure here?
Kevin Thompson: That’s right, Matthew. So the securities we’ve wound down, we’re yielding about 3.93%. And we paid out FHLB of about 4.6%. So yes, there was a benefit there, but we also have loan growth that offset much of that, but that should be a benefit through the year that negative yield that we were experiencing.
Paul Taylor: And that was really late in the quarter.
Kevin Thompson: That’s right.
Matthew Clark: Okay. And then just the spot rate on interest-bearing deposits at the end of the year if you had it or total deposits to other one?
Kevin Thompson: Yes. Spot rate on interest-bearing deposits was trending to low 250s.
Matthew Clark: Okay. And then just commentary around low-cost core deposits getting to 40%. It doesn’t necessarily mean non-interest-bearing that are at 33%. I guess, were you trying to suggest the non-interest-bearing, you want to get that to 40%? Or is there some other portion of your deposit base you view as low cost that will help you get there?
Kevin Thompson: Yes, we’re trying to take the DDA base up to 40%.
Matthew Clark: Okay. Easy enough. Thanks.
Kevin Thompson: Thank you.
Operator: Thank you. And we have no further questions. I’ll turn it back to our speakers for any closing remarks.
Paul Taylor: Well, first of all, we want to thank all of you for calling in and your interest in PacWest Bancorp. Our numbers are out on our online, and we’re happy to talk to you at any time. So again, I appreciate you guys calling in.
Operator: Thank you. Ladies and gentlemen, that does conclude today’s conference. We appreciate your participation, and have a wonderful day.
Paul Taylor: Thank you.
