William Matthews: It’s a combination of the two. Our unfunded portion of the loan commitments is reducing as we’re not refilling the pipeline as much with construction loans and also just reflects some of the loss drivers in the different segments and the quality of overlays. We kind of view — we tend to view – whether or no we tend to view the total reserve to 156 basis points versus just the reserve on the loans themselves. It’s all capital set aside to cover loan losses.
Stephen Scouten: Yes. Perfect. Okay. And then on the loan growth guidance kind of lower in the back half of the year. That’s very consistent, which I appreciate. Is that — I know like this quarter it looked like investor CRE and resi mortgage were the two biggest drivers. Is one or both of those falling off more so than anything else? Is that why loan growth will back off? Or what’s kind of — is it just more conservatism? Can you give me some color on that dynamic?
John Corbett: Yes, it would be the residential loan growth category, Stephen. I mean, that’s grown far beyond our forecast for the first half of the year. Basically in the Southeast with all this population migration, there’s more buyers than sellers. There’s a lack of inventory. So we’ve been financing new home construction for end users, not for builders, but for the end users. But we see that residential production moderated in the back half of the year as we just adjust the mortgage rates higher. And what I would add is we have a slide in the deck, and I think probably this last time we put it in there, but Page 35, which speaks to kind of the residential loan growth over the past really three years in what you notice is when rates are low, we typically sell more in the secondary when rates are higher, we put more in the portfolio.
If you look at that whole three years. And you said, once your compounded growth rate over that 3-year period for residential, it’s right at 9%. And so as we think about managing our balance sheet and our capital allocation we sort of got it back to where we think the long-term average is and growing at 25% a quarter from here doesn’t make as much sense. So I think we’ve kind of allocated what we were going to allocate. Now we just got to grow it with the rest of the portfolio.
Stephen Scouten: Yes. That’s great. And then just last thing for me. Obviously, the NIM guidance was very detailed. I appreciate that Steve. And no pressure on that basis point change quarter-over-quarter. You did so well this quarter. Now we’re all going to expect it to be dried again. But I’m wondering, within that guidance, what’s the noninterest-bearing deposit percentage look like in your models and your thinking? It’s because it’s still 35%, which is phenomenal, but down from 40%. Where do you think that’s going to trend from here?
Stephen Young: Yes. So in our models, we are at 31% at the end of the quarter, which fell from 34% last quarter. So — and most of that, of course is just the business DDA side of it. Prior to 2020 in the last cycle, we ended up in I think, in that 28%, 29% range. So just based on our forecast we’re getting to that level by the end of the year. So we think there’s a couple of percent degradation, although like everything else, stops accelerating so much over the next two quarters, it’s kind of how we’re thinking about it.
Stephen Scouten: Okay. Perfect, great. Appreciate all the color guys.
