Harold Carpenter: Yes. Just from 30,000 feet, lease expense less the depreciation savings from selling those properties is probably over a 12-month period, about a, call it, a $14 million kind of additional run rate increase. But the cash that we were able to generate from moving the $200 million in fixed assets from 0 to now, call it, 5.25%, and the cash we generated from taking investment securities, $174 million of those from, call it, 2% to 2.5% to now 5.5%. That increase in yield basically offset all of the — all the lease expense increase. And just to be completely candid around the sale leaseback, when we started looking at this back in the fourth quarter of last year, the kind of the play was that we would reposition more of the bond book.
And consequently, we thought we could probably reposition as much as another, call it, $700 million or $800 million in bonds with the gain we got on the sale leaseback. But with all the activity in the first quarter and now going into the second quarter and whether or not there’s going to be a recession or not, we elected just to warehouse the capital that we created from the gain.
Steven Alexopoulos: Got it. So the benefit is you create excess capital and from an overall earnings view as fairly neutral moving forward?
Harold Carpenter: That’s exactly the point. And that’s basically why we did the sale of the investment securities is to neutralize the impact of the lease expense.
Operator: The next question is coming from Brandon King from Truist Securities.
Brandon King: So, I wanted to get updated assumptions on deposit mix, including your guide. I know, Harold, you mentioned previously that by year-end, we could get to below 20%. So, I wanted to see if you still feel comfortable with that sort of trajectory, just given where things stand today?
Harold Carpenter: Yes. I think we still feel like that, that’s a reasonable kind of number to put on the board. We — I don’t think we or anybody else, Brandon, has any idea where noninterest-bearing deposits are going to go here in this environment. But it does seem like things are feeling better about that and that we’re — at the end of the day, two things have to be in play: one is our clients have to get to a level of operating cash where they feel like I need this in an operating cash account; and on our side, our sales force, our people, our treasury management people have to talk to our clients about this seems to be a reasonable amount for you to keep in this deposit account that you need to manage your business. And so I think those conversations are occurring every day. And I think it just leans into this relationship-based model that we continue to kind of hold on to as why we think this whole noninterest-bearing reduction is feeling better for us.
Brandon King: Got it. Got it. Makes sense. And then I wanted to talk about the allowance, there was increase in the quarter. And I understand the increase in commercial real estate, but I saw that consumer real estate had a pretty sizable jump as well. So just want to see if there’s any context around that increase?
