So we can move them off with no incremental cost, but we pick up incremental spread on the balance sheet. So we get — when we talk about managing the balance sheet through loan sales and through the sweep, we’re really talking about both sides of the balance sheet. We can — we’ve got an opportunity to maybe average up loan yields on the loan side and then average down deposit costs on the liability side. This is all incremental stuff, so I’m not saying that we’re going to suddenly reverse all of the net interest income pressure we saw last quarter. But as we think about the next couple of quarters, we feel confident that we’re going to be able to pull some of these levers and mitigate some of the pressure that we’ve seen here recently. The other thing I’ll say is I don’t want to give specific guidance on margin because it’s been so hard to predict.
But I will say if we look at the quarter, the margin compression that we saw was heavily weighted to the first half of the quarter. June was much, much lower. So it feels like we may be — I can’t say that there won’t be any pressure in the third quarter, but it should be very incremental versus some of the step changes we saw in the first and second quarter. That doesn’t necessarily mean net interest income would decline again, but the percentage.
Russell Gunther: Okay. Understood. And then just last one, tying it all together, a lot of proactive steps to improve profitability this quarter. Could you just update us on what you think the glide path is to that 1% ROA from here?
Matthew Switzer: Well, I mean, it’s probably first quarter at the earliest of next year because we got to get all the cost saves in place from the branch closures and consolidations and the rest of the — largely the administrative saves are in place. But all those movements plus some of the other reductions in operating costs we talked about gives most of the way there and then the rest of the way comes from these loan sales. So we get that $1 million of loan sale revenue doesn’t get us there, but I think that’s probably the variable. If that comes on harder, that’s probably going to move us from, to call it, say, 70 basis points, 80 basis points closer to one or over one. That’s probably the variable.
Russell Gunther: Great. Thank you, both. Thanks for taking my questions.
Operator: Next, we’ll go to Christopher Marinac with Janney Montgomery Scott. Your line is open.
Christopher Marinac: Thanks. Good morning. Dennis and Matt, just wanted to go through kind of the cost of funds. And should we think of it kind of maybe bottoming here given that you’re going to get a benefit from the sweep program and then that kind of covers this last Fed move that we just saw this week. Is that somewhat good way to think about it?
Dennis Zember: I hope so. I think so. I mean we are what Matt — the point Matt just made about sweeping more of the digital deposits that have a higher rate as we replace them with core bank community bank deposits that have substantially lower rates, I mean we are working tirelessly on that effort. So yes, that probably altogether could put a cap on where we are on the cost of funds and probably help us on net interest margin.
Christopher Marinac: Okay. And then the other side of that question was really just the ability to continue to push through both loan and earning asset yields and that’s not done evolving in your favor?
Matthew Switzer: Correct.
