Jared Shaw: Okay. And then can you give us an update on what you’re seeing on spot rates on loans, especially the areas that you’re growing?
Stephen Wyremski: Sure. On the CRE front, we’re seeing replacement rates roughly in the high 5s, call it, 5.75 range. In fund banking, I mean, certainly, they’re reducing, but we’re in the low 6s there. Signature Financial, we’re in the mid to high 6% range. Securities, any replacement there is at 4.5 to 4.75 range. And then we have some of the folks that were growing. Healthcare banking and finance about 7% and as is commercial mortgage finance in the 7% range.
Jared Shaw: Okay. That’s great. And then on the security side, you said that you were using cash flows to pay down borrowings. How should we be thinking about securities as a percentage of assets here? Could that – should that stay stable, should it come down when we look at the absolute dollar level, can we expect that to be trending down as we go through the year?
Stephen Wyremski: Potentially, it could run down dependent upon where back to the traditional deposit flows. That’s really the key here, where the traditional deposit flow go compared to our digital runoff and the timing of all that. So yes, in a situation, we could see some reduction there as they run off roughly in the 750 to $1 billion a quarter in.
Jared Shaw: Great. Thank you.
Operator: Thank you. We’ll take our next question from Chris McGratty with KBW.
Chris McGratty: Hey, good morning.
Joseph DePaolo: Morning.
Chris McGratty: Joe or Eric, in the release, you talked about the bump up in the reserve due to the macro. One of the topics that comes up a lot in investor conversation is the office portfolio. Could you just remind me the size and a few of the relevant stats where we are at year end?
Eric Howell: Yes. The office portfolio is about $4 billion. We had zero in nonaccrual as of this point. So it’s important to point out. It’s also – I mean, it’s more critical to point out that we’re not a CMBS lender. And all the articles in the news that you’ve seen thus far is all related to CMBS. I don’t think there’s anything related to balance sheet lenders, us or any of our competitors. And when we originated these loans, we’re in the low 50% LTV range. We were north of 140 debt service coverage. So we’ve got ample cushion there to absorb whatever we do see come through in that space. I mean don’t get me wrong, we fully expect that there’s going to be some problems. But quite frankly, we’re just not seeing much right now, Chris.
I mean we’re dealing with well-seasoned veteran operators multigenerational who own many properties and can divert cash flow as necessary to deal with the ones that might be in trouble. And we’re just not seeing the demise of New York office anywhere near what people are predicted, I mean anywhere near.
Chris McGratty: Okay. Thanks. Thanks for that, Eric. Is that the portfolio, the number one internally that you guys are stress testing? Is there something else that might drive kind of a reserve build narrative over the next couple of quarters?
Eric Howell: I mean, it’s certainly one of the areas. I mean we’ve been focused on retail for a long time, really from the Amazon effect well before the pandemic hit. Again, our retail is really in the out of bears more strip centers that we feel pretty comfortable with, and we’re seeing that behave quite well also. I mean we’re also focused on the multifamily sector, where you have rent stabilized and predominantly buildings that are mostly rent stabilized where there – it’s really tough for them to improve the cash flows there. That’s another area that we’re looking at. But in all three of those areas, we’re really just not seeing much weakness, if any at all at this point.
Chris McGratty: Okay. And can you remind me the size of the retail book there?
Eric Howell: The retail book is about $6 billion.
