Tom Lyons: I do think that’s the case, Bill. I think a lot of the industry and ourselves included, have caught up to a degree on the lag that we had on deposits were much closer to our add in market rates. So I think the funding pressure will abate some. I think we’ve been conservative in our NIM modeling in the assumptions around shift in composition within that portfolio to the higher costing CDs, which we’ve seen on the consumer side and recognizing the ICS product, which has a rate to it as being one of the areas where we’ve seen growth as well. And then the beta that we’ve applied to the most current hike is pretty significant to capture the rest of that lag, I think.
Tony Labozzetta: Yeah. And I would just add on that. We’re hearing that from the business lines as well. So if you kind of look back at the second quarter, the delta between what we — where we were pricing and where the markets have moved just kind of widened to a place where customers became extremely aware and obviously, what happened in the first quarter with — around liquidity. So every time there was a Fed hike, the customers were almost ahead of the Fed hike looking for what’s going to happen on their account. It hasn’t happened this go around. So this Fed hike, it was silence. And so we’re seeing a much — I’m not suggesting that there’s not any of it happening, but it was happening network-wide and now it might be small pieces.
So the expectation is, and I think it’s consistent with some of what we’re hearing from our peers is that slow down. So the customers close the gap between — or the delta between market and where we were pricing. So it kind of feels like it’s leveling off. Secondly, we’re not seeing any unusual irrational behaviors from our competition in the marketplace that would result in any dynamic of pricing going into the third and fourth quarter. So that also gives me a little bit of solace to say, yes, we are kind of plateauing in that space. So I think Tom’s projection on the margin given that all of it is coming nearly from the funding side pressure is — that’s why we can make that statement. Secondly, there is another element here in terms of the Fed’s hike that Tom and I talk about and that is that our assets will continue to price up.
And if the behavior on the deposits kind of subsided, we might see — we might add a little bit of benefit in that category to stabilize any further.
Tom Lyons: On the asset side, within the loan book, 52% of that is variable rate with 24% within that being floating. We saw the on-rate move up to [6.375%] (ph) I think it was roughly in the second quarter. We saw the portfolio rate at 7.24% and the — I’m sorry, the pipeline rate and the portfolio yield currently 5.24%. If you look at the average balance growth in loans versus the spot balance, too, you can see the average balance is lagging. So some of that production we saw in Q2, we’re going to see greater benefit from in Q3. So all those things are helping to maintain that margin by some nice improvement in asset yield over the projection.
Tony Labozzetta: But I just — I think it’s probably a good time for me to also express that as an organization, we’re very cognizant on risk, and we’re not doing anything from a standpoint of trying to stretch in any areas to make up for this margin pressure. We’re just going along, doing our strong business. We like the nature and quality of the loans that we’re putting on, and we feel good about a lot of things, except just that the funding cost is market-driven. And other than that, we’re staying resilient to our risk management processes.
Billy Young: Perfect. Thank you very much for taking my questions.
Tom Lyons: Thank you.
