John Corbett: Sure, Stephen. I think this question was asked last quarter and really, our thoughts on M&A have not changed. Our view is that as we look into 2023, M&A is going to be pretty slow for a couple of reasons. I mean, right now, there’s just not a lot of clarity as it relates to the regulatory approval process, and there’s not a lot of clarity as it relates to potential recession risk. I think the whole industry is going to be slow on M&A in 2023. I believe it’s likely to pick up towards the end of the year as banks begin to meet and think about the future earnings stream. If you’ve got an inverted yield curve, it’s likely that earnings are going to flatten off in 2024, and people will be more enthused about M&A than they are today.
Our thought process — we’ve built the company in high-growth markets. And typically, the type of target that makes the most sense for us is something that’s about 10% our size to one third of our size. And our preference is our existing high-growth markets. It’s easier to get synergies, and we’ve got markets that are four of the six fastest-growing states in the country. So that would be our preference. If we ever left the existing footprint that we have today, we would look for similar kind of growth characteristics. But if you look at the GDP of the six states we’re in, it would represent the fourth largest GDP in the world. So we’ve got a lot of opportunities to fish where we’re at.
Operator: Our next question comes from Catherine Mealor from KBW. Your line is now open.
Catherine Mealor: Just a follow-up on the deposit beta conversation. Your betas has just been so incredible. And I think the call for them to stay at about a 24% level is obviously going to be industry-leading. And so is there a way to just — I think a lot of it is because of your deposit composition, right? You’ve got so much in check, and it’s a very granular portfolio, but we’re seeing betas really accelerate across the industry. So is there a way to kind of explain why the beta won’t accelerate as much as you’re seeing some peers? Is it — and maybe within that, kind of talk about the balance — or the deposit composition. Are you expecting much change in that composition or for your kind of balance of CDs, checking and DDAs to remain about the same?
And then maybe give us a sense as to the betas within each deposit category just to kind of show that maybe some of your higher cost categories really are having a beta like everybody else, but it’s your mix that’s driving this better performance.
Steven Young: Sure, Catherine. It’s Steve, and that’s a mouthful of a question, but I think I get your questions. So let me kind of — I’ll go back to Page 18 is our sort of our deposit discussion. And I think you laid out a couple of these things and then help me — I’ll try to expand on that. 61% on Page 18, 61% of our deposits are in checking accounts. And typically, those are the warehouse accounts for commercial, small business and retail. Our peers are at 43%. So if I were to point to one thing, I think that would probably be the reason that we think the overall deposit beta is at 24%. When you look at the different pieces, it’s not just commercial. It’s not just small business. It’s not retail. It’s really almost one third, one third, one third in each of those categories, and you can see the various average checking balances.
