Phil Mantua: Hey Catherine.
Catherine Mealor: Just one follow-up on the margin, just back to Casey’s question on the on loan price, I mean, excuse me, deposit pricing, where were deposit costs maybe towards quarter end or were you’re seeing them come as we test look into trying to back into that 3.10% to 3.15% margins to see deposit costs might be as early as next quarter.
Phil Mantua: Yes. Catherine at the end of December, our overall cost of interest-bearing liabilities was about 2.10 , and overall interest-bearing deposits was in the €“ was around 1.83 .
Catherine Mealor: Okay. Great. This would fit with your commentary that you think you might get net expansion in the back half of the year, just depending on how deposit balances go. But would it be fair to characterize like €“ how do you think about kind of over the cycle potential beta for you? Because as I look at where you are, cycle to date you’re at around a 40% cumulatively, and that’s where a lot of companies might be saying that their cumulative cycle betas will be maybe over the next couple of quarters. But is there a case to be made that for you, your cycle beta will still be higher but not significantly higher, and your pace of change should start to moderate as we go to the next couple of quarters? Just especially given your outlook for growth to be flowing in the next…?
Phil Mantua: Yes, Casey , I think that’s a reasonable way to look at it. I mean we’ve really all along said that our model beta and our expectation on beta was around that 40%. So having it kind of average out there is not terribly surprising. It would most likely continue with €“ but probably a little bit higher. Even with the last 25, I guess, 50 basis points at the Fed, we think has in mind here for the remainder of this quarter. So we were probably averaging this quarter a little higher than that. But I think over time in the past that we’ve been proven capable of having the beta in the other direction move fairly quickly to allow us to take advantage of when rates either stabilize or ultimately drop back in the other direction.
Catherine Mealor: And what’s your view on how active you’ll be in pulling out; I think you’ll be borrowings?
Phil Mantua: It’s really a question of relative pricing between home loan bank borrowings and other forms of brokerage when necessary. We won’t really lock into one form over the other. And I think that’s what’s reflected, in fact, in the fourth quarter here where we really traded out of a couple of hundred million of advances for some €“ about the same amount, maybe a little bit less in the brokered CD market. So we really kind of look at those things very similarly in terms of how we use them and we really just kind of trade one against the other on relative price and value. And we €“ I think we said it before; we’ve tried over the course of the cycle to keep all of those relatively short. And so, for example, we have a fair amount of maturity in both of those areas here in the first quarter, and we will replace them according to that same general pricing concept.
Catherine Mealor: And how about on loan pricing? Where are new loan yields coming on and €“ your loan portfolio is not as highly variable rate, which is partly what’s happening to your margin now, but I kind of view you as €“ it will be just kind of a slow grind higher over the next couple of years as your longer-term loan portfolio continues to reprice and churn through. So how do you kind of look at maybe the pace of loan yield increases over the next couple of quarters?
Phil Mantua: Yes. Well, I think that’s also embedded in that guidance relative to forward-looking margin is that we’ll continue to get some upward contribution from loan yields throughout that period. Just for pricing within the last quarter, albeit the levels of production in booked loans was slower than customary for us. I mean we in the commercial area alone, we ranged on average from the high 5.80%, 5.90% range up into in some cases over 7%, 7.5% on various categories of new production. And so that should continue to accrue our benefit as we move into the latter part of the year.
Catherine Mealor: Great. All right. Thanks, I’ll pop-out of the queue.
Phil Mantua: Thanks Catherine.
Phil Mantua: Thanks.
Operator: Thank you for your question. There are currently no further questions registered. The next question is from the line of Manuel Navas from D.A Davidson. Your line is now open.
Manuel Navas: Hey good afternoon. The non-interest-bearing deposit, have come down a little bit. How far could that drop over the next couple of quarters?
Daniel Schrider: Well, that’s a really good question. I mean one aspect of what’s happened there is we’re certainly related to title company type of deposits balances, which probably can’t go a whole lot lower than where they are today. And I think, in that respect we’ve probably €“ we probably have bottomed out. But within the other categories that, are related to small business and just broader commercial type of deposits. I’m not really sure; I could give you a definitive type of answer. Just not knowing exactly kind of what that pattern is related to other than the stuff that we have normally at year-end. So, I mean, we have €“ we have it continue to come down and through the first part of this quarter traditionally, and then have it rebound towards the end of the quarter. So, it’ll probably trough during the quarter and you really won’t see it because it will ultimately report on the end of the quarter where it’ll probably bounce back up.
Phil Mantua: Yes, I would agree.
Manuel Navas: Okay. That’s helpful. And so that’s kind of like working capital needs and kind of normal trends and is just a little bit larger the move this quarter than in prior quarters?
Daniel Schrider: Yes, I would say, so this quarter the kind of rundown on demand deposits, on the core demand deposits started earlier in the quarter than normal. And it happened more throughout the quarter than just at the end of the quarter, which is the traditional draw down activity with our commercial client base.
Phil Mantua: And I mean the obvious difference.
