Jay McConie: Yes, it’s about $126 million of pipeline, predominantly commercial with us stepping out of the residential business. We’ll still purchase residential mortgages, but not originate. And with the yield curve steepening in the 5-year and 10-year getting up into the $480 million range and we originate with a spread, you’re starting to see those yields be in the high 6s to low 7s. On the flip side, you’re starting to see demand really kind of come down as you get into the 7 handles as obviously, there’s no refinancing activity going on. It’s new purchases and those people looking for new purchases are get a little bit cold feeded into 7 handles.
Alex Twerdahl: Yes. Okay. Makes sense. And then you mentioned that you guys are still liability sensitive. I mean is the goal over time to become more neutral? And I know you did a little balance sheet restructuring, which I think looking back was a pretty good move. Back earlier this year, are you looking at additional similar types of transactions to help boost NIM in the future?
Jay McConie: Right now, probably not. We felt those two moves, the securities restructuring and the swap, where we converted $300 million of residential to floating. Where time is right. We do feel that we’re kind of in the eighth and ninth inning of this rising rate cycle, and we’re going to kind of take it quarter-by-quarter. We think NIM has stabilized. We think a lot of our wholesale for the most part, have repriced and take it quarter-by-quarter and see what the Fed does, before we make any decisions to do any larger type of restructurings or additional swaps.
Alex Twerdahl: Okay. Thanks for taking my questions.
Chris Becker: Thanks Alex.
Operator: Our next question comes from Chris O’Connell with KBW. Chris, please proceed with your questions.
Chris O’Connell: Hi, good afternoon. I just want to add the same sentiment – it’s been great working with you, Jay, and wish you all welcome your next steps and look forward to working with you, Janet.
JanetVerneuille: Thank you.
Jay McConie: Thank you, Chris.
Chris O’Connell: So yes, I was hoping to start off on the margin. I mean, obviously, the compression this quarter was a lot less onerous than the past couple, I think in prior quarters, you’ve sometimes given the monthly margins. I was wondering if you had that for the July, August, September periods.
Chris Becker: We do. In July, it was $216 in August, it was $220 and September was $202 million. $202 is a little obviously lower than you want to see, but we did have some prepayments on some of the SBA flow orders we have in the investment portfolio, which caused that yield to be kind of considerably lower that month, which put on pressure in that 30-day month. And that’s the other issue. In the 30-day month, our margins throughout the year and a 30-day month, they always are a little bit lower. So we don’t want that $202 to be overly indicative of going forward, but it should be seen.
Chris O’Connell: Got it. And I know you guys mentioned the margin you’re hoping to bottom all else equal on the rates here over the next couple of quarters. Any sense as to the magnitude of the pressure of where that could bottom either just on a trajectory for Q4 or kind of the ultimate level of bottoming?
Chris Becker: Yes. It’s been hard, as you know, Chris, throughout the cycle to try to give very good guidance on the margin. And I think you’ve seen that there’s been a lot of misses on that throughout the year for many banks. But what we’re seeing as we’re looking at our internal projections is that so much of our liability side has repriced, so even if there’s still some small repricing in things that have already repriced but maybe come up again over the next few quarters. There’s obviously not as much upside from where they are now. So that’s being fully priced in, now we see the asset side, those $90 million in quarterly cash flows, that Jay talked about. We see those starting to be able to offset the liability pricing, and that’s why we kind of see the margin bottoming out over the next two quarters.
