David Morris: Now the spot — the cost that I am talking about is the — our offering rate what we offer to our customers.
Andrew Terrell: Okay. So the incremental funds as opposed to make
David Morris: Yeah.
Andrew Terrell: was already on the balance sheet?
David Morris: Yeah.
Andrew Terrell: Okay. Understood. Thanks for taking the questions.
David Morris: Okay.
Operator: Thank you. Our next question is coming from Kelly Motta with KBW. Please go ahead.
Kelly Motta: Hey. Thanks for having me step back in the queue. Just know we spent a lot of time on the deposit side and your loan growth was really strong this quarter. I know you have to balance what’s going on in your markets, in the economy, as well as pressure on funding. But just wondering on kind of what your broader outlook is for loans as we look throughout 2023. Is it mostly going to be CRE and resi driven, I know you spoke about C&I as something potentially to ramp up over time, but just generally wondering what your thoughts are for this upcoming year?
David Morris: I see what we are hoping is mortgage will take a back seat, because we have already put our mortgage portfolios now about 40%, 43% of our total portfolio, which really, if you think about it is the safest loan you can do, okay, especially at a loan-to-value of 60%. So we don’t really want to grow that. With the rest, we want to grow CRE and C&I. C&I is not going to be a huge growth number this year and so forth. We will see how well it does and then take time to roll it out probably by really roll it out to larger loans and so forth at the end of the year maybe. But it’s really meant for the smaller loans of $500,000 type of C&I loan that we just can’t really do, because it takes too long. So, right, most of our growth will be in the commercial real estate side.
We are looking at rates most, well, not all. We have rates anywhere from like 6% and 3% — 7%, 8% up to 10% right now on that — on those products. So I see maybe in the summer time, you may see a little bit more construction out there because of they can build. We have had a month of rain. So nobody is drawing down on their construction loans. So, but we are not going out and particularly stressing any one category, okay.
Kelly Motta: Thanks, David.
David Morris: Hi. Just to answer you — really answer your question. I do see production to be below — significantly below 10%. I would say mid single digits this year, okay, on loan growth.
Kelly Motta: Thank you.
Operator: Thank you. As we have no further questions in queue at this time, I will hand it back to Mr. Morris for any closing comments you have.
David Morris: Once again thank you all for joining us today. We look forward to speaking to many of you in the coming days and weeks. Happy New Year. Go and sleep far south .
Operator: Thank you. And this does conclude today’s conference call. You may disconnect your lines at this time and have a wonderful day. And we thank you for your participation.
