All the increases you see are – we are still getting efficiencies on the operating level, all the increases of our people. That’s the big determinant and being able to innovate. But if you look year-over-year, we have about, I would say, $3 million that really aren’t run rate expenses. So, when you see that increase of the mid-20s in employee costs, there is a couple of categories there, where it’s not really like, like. First of all, we don’t have the same origination, so we can’t have – there is about $1 million of capital costs. You could capitalize the cost of origination that aren’t in this year over year-over-year. Then we have about $2 million. Some of it is because of the proportion we pay in cash bonus versus equity is higher this year, and we had some severance.
So, there is about $3 million that really is a built-in cost structure in this quarter. So, when you look year-over-year, we see 17% total. You see mid-20s in the employee costs. The employee cost is really a little bit less, but having said that, next year, we have built into this knowing about this once in a lifetime interest rate increase. So, we are trying to set ourselves up so that we have everything in place, the people, the project list and everything, so we know what we are going to build over the next couple of years so that our cost structure doesn’t rise in the same way that it would during this historic rise in revenue here.
David Feaster: So, kind of front run in the expenses and investing on the front end and we should start seeing the operating leverage maybe start coming next year and really going forward after that?
Damian Kozlowski: Yes. We are just not going to grow the employee costs that we have really invested in employees here. So once again, you look at the operating expenses, they haven’t gone up. So, you look on the other operating expenses are flat. I think they are actually down this quarter versus last year. It’s all the real determination of innovation and being able to grow this franchise and really setting ourselves up for the next 5 years is going to be not – determined with all the capabilities and platform and architecture we have built, but we have to have the best people in the industry, we have to pay them well. And we are setting ourselves up to not have experienced the year-over-year increases over the next few years, but to have those people in place to make sure that we can guide the company forward.
David Feaster: Okay. That’s helpful. Thank you.
Operator: [Operator Instructions] Your next question will come from Michael Perito at KBW. Please go ahead.
Michael Perito: Hey guys. Good morning.
Damian Kozlowski: Good morning Mike.
Michael Perito: Thanks for taking my questions. Appreciate the color this morning. You guys covered a lot of it. Just a couple of follow-ups. Just on the – as we think about the balance sheet, with the SBLOC loans kind of taken a step down here and possibly being in this higher for longer rate environment, how do you guys think about other areas maybe to add on the loan portfolio side. I mean are we getting closer to maybe kind of credit products taking up a little bit of that baton and starting to represent a portion of the loan portfolio. Did you guys look at maybe any other kind of lower-risk verticals that are tangible to what you guys do because of all the disruption, whether it’s like capital call lines, fund financing like that? Just kind of curious how you are thinking about it if there is maybe room to add another layer to the loan portfolio to help you guys kind of hold those balances as one bucket might move up or down?
