William Matthews: Yes. On the CECL point, Michael, I guess a couple of things. One, our CECL model utilizes loss data from every bank we’ve acquired, excluding five or six banks dating back to 2004. And this is both of the companies making up our MOE. And that’s about 60 or 61 banks in total, I think. Our loss drivers really vary by loan type, but they include South Atlantic region unemployment. The housing price index year-over-year change. The CRE price index year-over-year change, apartment rental vacancy rate and GDP for the South Atlantic region. So our future reserve levels or our future provisioning expense is going to depend upon changes and forecast for those loss drivers as well as our actual net losses, which, of course, brings down the reserve.
We continue to be more conservative in our outlook than Moody’s. Our reserve is about 20% to 25% higher than it would be under the straight Moody’s baseline scenario, though Moody’s has gotten a little more conservative showing more economic weakening this quarter. I don’t think it’s appropriate for me to comment on the validity of an accounting standard of FASB makes the rules, and we live by them. But if you look at our company over the last 3 years and you sum up the absolute value of our provision expense, positive and negative, and you get something north of $500 million. And over the same 3-year period, we’ve had cumulated net charge-offs of something around $12 million. I’m not suggesting that 1.5 basis points a year is a sustainable net charge-off level.
But I think in our view, what’s more important is not so much how much provision expense we have, but rather how much money we lose in net charge-offs, because until we charge it off, the provision expense really just moves from one form of capital to another.
Michael Rose: No, I certainly appreciate that. And John, I appreciate those slides put in the back, I forgot to mention those in the outset of the question. So it’s good to hear. Just one final one for me, point of clarification. Obviously, the NIM guide moving up a little bit. That’s the all-in in, correct? And if so, if you can just tell us what the expectation is for accretion — or scheduled accretion is this year.
Steven Young: Yes, Michael. Yes, that’s right, all-in NIM between 3.70% and 3.90% for the year. The accretion, of course, I think in the fourth quarter was around $7 million, $7.5 million. I think we are modeling that around $20 million for full year of 2023. So it comes down a little bit. But all that’s factored in the entire cut. .
William Matthews: Yes. And just to reiterate, though, the move off essentially was the geography change with respect to the collateral. So as Steve said earlier, I just want to make sure that point is clear that we got — it moves guidance up on the NIM but by a similar amount down on the noninterest income. So total revenue essentially where he was — where we were guiding last quarter.
Operator: Our next question comes from David Bishop from Hovde Group.
David Bishop: Appreciate the guidance in terms of the expectations for loan growth. Obviously, you guys have had entered fourth quarter with plenty of excess liquidity or planned liquidity, took down cash a bit. How should we think about the funding of that loan growth? Is that securities runoff, a little bit more cash? Did you get a little bit more aggressive on wholesale borrowings? Just curious how you’re thinking about the funding of the growth this year.
