Casey Haire: Yeah, thanks. Good morning, guys.
Joseph DePaolo: Hey, Casey.
Casey Haire: So follow-up just on the loan growth. I want to make sure I understand this correctly. So Eric, I think you said total loans down $5 billion to $10 billion for the year. And then…
Eric Howell: That’s line, its not…
Casey Haire: Just capital call?
Eric Howell: Just capital call lines. Outstanding would roughly be half of that balance.
Casey Haire: Okay. All right. So I mean, capital call, obviously, a big part of the loan book, what is the expectation for loan. It sounds like loans are down pretty big in the quarter-to-date, given that you’ve been able to push down borrowings $4 billion. I guess just a cadence on the loan growth throughout the year and where you expect the loan book to land? Because obviously, – the Street is expecting some pretty decent growth this year.
Eric Howell: Given that we’re reducing deposits to spell, right? And we expect to be down $3 billion to $5 billion in the digital space and really flattish and traditional, although we’re hopeful we’ll see some growth. But again, I can’t promise that it would be difficult for us to expand our loans. So we’re expecting that capital call facilities and those passive participations to be down in outstanding is roughly $2 billion to $5 billion. And then for our commercial real estate portfolio to decline, although I’ll be – it’s not going to decline much. It will probably be flat to down a little bit. And we’ll see some growth out of our mortgage warehouse finance business, as well as our health care finance business. Those are two newer business lines for us that we want to continue to see have growth and garner market share and market favor.
So we’ll have some growth out of those areas, let’s say, $500 million to potentially $1 billion over the course of the year for each. So ultimately, when you put all that together, I think you’re going to see us be pretty flat on loans to down maybe a little bit.
Stephen Wyremski: And just to add on your borrowing comment, we’re down $4 billion in borrowings. That’s being paid down from a combination of cash. We mentioned that cash range of $4 billion to $6 billion, which is a comfortable range dependent upon specific deposit inflows. Deposits €“ so deposit inflows, cash, security runoff as well as this small amount of loan runoff that we’ve seen thus far. So it’s a combination of all those different items.
Casey Haire: Okay. Very good. And then just given all the moving pieces here, can you give us some help on where you think the margin settles in the first quarter, your thoughts on deposit beta?
Eric Howell: Sure. So margin in the first quarter, we do expect to be down about 10 basis points, and that’s a function of what I mentioned earlier in that – in the short term, we do expect to borrow early in the year to replace the digital outflow that we’re planning to manage down. And then as we get towards the end of the year, we would expect NIM to then start expanding. From a deposit beta standpoint, we’re end of period at 46%, total deposit fall in and our end-of-period deposit costs are 210 basis points approximately.
Casey Haire: Okay. And you guys are still expecting low 50s June beta?
Eric Howell: I think we’ll be in the high 40s at this point given the high-cost deposits we pushed out. I mean we’ll see how much noninterest-bearing pressure we get. But at this point, I would expect it to be in or around where we’re at maybe plus or minus marginally.
Casey Haire: Okay. Very good. And then just lastly, the release mentions talks about geographic expansion. Just any further color on what you’re thinking about and which markets?
Eric Howell: It’s really just filling in the expansion that we’ve had over the last couple of years. We’ve got teams hired in the California marketplace, whether it be L.A. or Sacramento area as well as Nevada where we’ll continue to hire some teams there. Potential for us to maybe go into Southern California, San Diego market, but there’s no actual near-term teams in the pipeline right now for that.
Casey Haire: Great. Thank you.
Eric Howell: Thank you, Casey.
Operator: Thank you. And we’ll take our next question from Steven Alexopoulos with JPMorgan.
Steven Alexopoulos: Hey. Good morning, everyone.
Joseph DePaolo: Good morning, Steve.
