Edward Czajka: Yes. The previous $50 million, Matthew, we purchased at an average of just over $58 a share and with today’s price being what it is, you can see the value proposition isn’t quite the same as it was. However, there’s still value there.
Operator: And our next question today comes from Tim Coffey with Janney.
Tim Coffey: Just a follow-up on the — with your comments about rate cuts and business demand. I’m wondering, how many rate cuts, let’s say, 25 basis points do we need to spur demand for more loans?
Edward Czajka: That’s a great question, Tim.
Li Yu: Tim, based on our conversation with our customers, it is really and also if you have 1 or 2 rate cuts, okay? And they are also seeing their cuts ahead, they’ll be basically be more aggressive with their new investments. And there are, obviously, by the fourth quarter, we have a little bit more production. You can see that it’s already indicting some of our, how should I say, more progressive type of customers already engaged in some transactions. So, when they feel that the rate has peaked and they are able to, I mean, catch the opportunity to do some opportunities by. So we think it generally will increase, okay? But it also has to do with the size of the rate cut, the 25 basis, 50 basis on often or what and which is really a national sports right now, okay? Everybody is predicting. We hope we have the crystal ball. But the general trend is that sooner or later, you get there, it’s a matter of time.
Operator: [Operator Instructions] Our next question comes from Gary Tenner with D.A. Davidson.
Gary Tenner: I wanted to ask a follow-up on the kind of the loan outlook question and you just addressed it a little bit by the commentary in the fourth quarter. How much of that fourth quarter activity do you think where folks just trying to get transactions in before year-end? And what is that — has that translate to kind of the pipeline, at least for first quarter activity levels?
Li Yu: I will have Wellington answer the question first, okay?
Wellington Chen: Gary, that’s a good question. I think that it’s interesting that because we pretty much raised ourselves last year to really continue to take care of our good customer. And it seems like we — our customer is always looking for opportunities. So whether it’s year-end situation, I’m not so sure. They always — when there’s a good opportunity, they want to capture it and close it. So, I’m not so sure of all the year-end factors.
Gary Tenner: Okay. And just in terms of the pipeline kind of heading here into the first quarter then, most of last year was right along r loan growth, as you pointed out before the strong fourth quarter. So what does the early part of ’24 look like from what you could tell?
Li Yu: Okay. This is Li Yu. First, for the pipeline, it is better than the past [indiscernible] than third quarter. And probably, so far, in a very early stage, only is 26 days into the year, okay — 24 days into the year, okay? It seems to be a little bit more active than the third quarter but whether it will end up in the same level of fourth quarter, we do not know, because first quarter is like you have projected that there’s kind of a rush in the quarter end, year-end. But it seems to be better than third quarter.
Gary Tenner: Appreciate that. And then if I guess one more. Ed, can you just remind us kind of what amount of rate cuts do you need until floors in your variable portfolio start to matter?
Edward Czajka: At this point, it’s probably about 100 to 125 basis points of rate cuts before they start to matter as we’ve gotten with the…
Li Yu: As an average.
Edward Czajka: As an average, yes. Some will be immediate and some will be farther than that for sure. But yes, it’s around 100, 125 [ph].
Li Yu: There’s still a portion of our portfolio is real old portfolio. It was sitting in the floor rate that was effective in 2021, 2020. So there’s some of them is — for the newer loan production is concerned, probably right about 100 to 125 basis points.
Operator: Thank you. This concludes our question-and-answer session. I’d like to turn the conference back over to the management team for any final remarks.
Li Yu: Well, thank you very much, that we think that — we think we have a good year by our standard. So we certainly would like to keep that relative profitability compared to the industry going forward. And hopefully, that we will also be doing the things that shareholder-friendly things in the coming new year — in this new year. Thank you very much.
Operator: Thank you. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.
