William Matthews: Yes, Catherine. There’s really 2 pieces to it, and it’s not easy to predict. That’s the short answer. But there are 2 factors. Now we’re talking about the amount of collateral we post. And the amount of the collateral is really dependent on the 10-year treasury, essentially. And then the cost of that collateral is depending on the Fed funds rate. So — and if you think about it, really, we’re sort of at a neutral point in the 10 year is around 2%. So as rates come down, less collateral posted to us, the tender rate comes down. As the Fed fund rate moves up or down, the interest thereon moves up or down. So it’s kind of hard to predict. I think Steve’s numbers — he was just given — he was assuming about $10 million a quarter in that 10 basis point comment he made a few minutes ago about margin dollar — moving the margin dollars from noninterest income, but it’s a little bit of a swag at this point.
Catherine Mealor: Great. Okay. I guess my big picture was thinking that there wasn’t — it wasn’t like that’s going away, and that’s part of the guidance for the NIM. I mean it should be stable going forward, which helps.
Steven Young: Yes. Catherine, I’d just say that it’s about $800 million at the end of the quarter, give or take, a little bit. And if we’re to close to 5% Fed funds rate, that’s about $40 million a year, and that’s sort of the assumption, and that’s the 10 basis points on assets.
Catherine Mealor: Got it. That makes sense. Okay. Perfect. And then maybe my last question is just on the fee outlook. Has anything changed? The correspondent has been a little bit lighter than expected outside the reclass. So just any kind of thoughts on your forward guidance for fees as we enter ’23?
Steven Young: Yes. Catherine, fee income was a little over $63 million, 57 basis points of assets. Our last guidance was between 60 basis points and 70 basis points. But as Will mentioned earlier, we have some one-off events in mortgage servicing, SBA servicing, asset write-downs. I think that was $4.1 million or $4.2 million and of course, the reclass, the central collateral was another $8.5 million. So if you kind of threw all that out, it’d been up 68 basis points. So it has been kind of in the middle of the range. But as we kind of think about comparing the fourth quarter to future, until the Fed stops raising rates and some of our interest rate-sensitive businesses like mortgage and core deposit, we think it’s probably similar, 55 to 65 basis points of assets.
And then that’s not decline of 10 basis points. But if the Fed stops raising rates, we would expect that to start picking back up again and — for the noninterest income to average assets to increase back towards 60 to 70 basis points. So — but we’re in a transition period where NIM is obviously 120 basis points up. Noninterest income has fallen. My guess is, is when the Fed stops raising rates — we’ve guided with you with the NIM, and probably the noninterest income businesses start moving back up towards the back half of the year if our interest rate forecast is right.
Operator: Our next question comes from Michael Rose from Raymond James. Your line is now open.
Michael Rose: Just on the expenses, just a couple of questions. Can you just remind us what the expectation is for the FDIC expense pickup is this quarter? And if you can kind of remind us what you’re assuming for annual merit increases like in the first quarter. Just trying to get kind of a level set as we think about just kind of the first quarter within the context of roughly $950 million of NIE for the year.
