Tory Nixon: Yes, thanks, Cort. I would — certainly the industry itself is contracting and demand is significantly less than what it was and we’re responding to that. I think at the height of our home lending business, which was phenomenal during the pandemic, we were at about 650 or so associates. I think that today is in the high 300s and we are actively moving that down south and I think we’ll land somewhere in the 2 to 250 range in terms of people making sure that as we, as we pivot to this new and different model, we continue to serve our customers and our retail customers, our private bank customers and our commercial customers and we continue to serve our communities. And so that’s the direction that we’re headed in over a little bit of time and we’ll get there.
Cort O’Haver: I just one follow-up, just to make sure because other people listening to this call, not just the analyst community. This does not mean like I mentioned in our opening comments, we are not committed to first mortgage finance, we are. We’ve made a strong commitment and our CBA agreement for our work on our merger to provide low to moderate income finance, low to moderate-income communities, which we are firmly committed to and we’ve created a group inside mortgage lending to serve that community. So I just want to make sure it goes on the record. This does not mean we are pulling out of mortgage. It has been a big part of this bank for as long as I’ve been here longer than that and it will continue to be a key part of our business as we continue to serve when we double in size here in about six weeks.
Ron Farnsworth: Andrew, this is Ron, I’m just going to add in on Cort and Tory’s comments. Obviously, the goal is going to be, to have a profitable mortgage business within the redesign we talked about earlier. So, but it’s hard to get a beat on specifically the metrics sale margin minus expense just nonetheless positive compared to last couple of quarters. The other thing I’ll also add is going forward, given the size, we expect it to move to, it will no longer be a separate segment. So we’ll talk about it, just in terms of fee income changes and expense level changes.
Andrew Terrell: Okay very good. I appreciate all the color. If I could sneak one more in, just maybe now that there is a closing date set for the acquisition, which was good to see. Any thoughts on kind of pro forma capital levels or updates to the fair value marks or just kind of wait until deal close.
Ron Farnsworth: Andrew, this is Ron again. I’d say, let’s wait till deal closes just given the volatility rate changes, so much. But that’s also one of the reasons why we have excess capital going into this to be able to utilize that. And I guess I’d also point out that, wherever that ends up that will also turn into additional capital accretion over time pretty quickly from that standpoint. So there is obviously we’ll talk more about that in April.
Andrew Terrell: Okay, very good. Thanks for the time today.
Ron Farnsworth: Thanks.
Operator: Our next question comes from — one moment, Matthew Clark from Piper Sandler. Your line is open.
Matthew Clark: Good morning, thanks for the questions. Just first one on to clarify on the noninterest expense run rate standalone, low ‘170s stripping out the tax accruals — unusual tax accrual this quarter, lower mortgage expense, I guess, does that low ‘170s run rate consider your typical non-mortgage comp kind of merit increases for the year or not.
Ron Farnsworth: Hi Matthew, this is Ron. Merit increases generally hit towards the end of Q1. Very early part of Q2. So it’s in the run for this past year which you look ahead over first couple of quarters of ’23, you will see an increase in tax rate right et cetera — like sub generally in the first quarter, you see that, and then it tails off over the balance of the year, then the merit comes on in Q2, will also have the added benefit with the combination on the combined basis the cost saves by Q4 next year and that too it get something will provide much more updates on as we get to close, and for sure, with outpost close with outlooks on that front.
Matthew Clark: Okay. Just, just to clarify, though, for the first quarter, low ‘170s does include any seasonality you might have?
Ron Farnsworth: Correct. Also noting home lending expense will be lower as well in that number.
Matthew Clark: Okay. Got it. Okay, great. And then just circling back to the margin. I’m not sure if you mentioned in your earlier comments, but the average monthly NIM in December do you have it. And I think you mentioned —
Ron Farnsworth: Yes, 4.02%.
Matthew Clark: 4.02%, great.
Ron Farnsworth: Yes, 4.02% for the month of December.
Matthew Clark: Okay, great. And then just on the pro forma capital and kind of assuming it maybe shakes out to a level where you have some nice excess capital. Can you just remind us around the process to be able to repurchase stock given your negative retained earnings and whether or not, you still be constrained by that on a pro forma basis.
Cort O’Haver: Sure yes. We will — that will carry forward just given this combination and the accounting acquirer. So our balance sheet will continue forward, as is the fair value of the Columbia balance sheet. The process that was pretty straightforward. It’s a quarterly non-objection process with the state and the FDIC based on legacy, banking loss from decades ago, which were driven by credit losses. And this is goodwill which is excluded from capital. So, but still we have to go through the process, work well with FDIC. We do that today on the dividends from the bank to the Holdco which support the definition of Holdco like the shareholders at the same process we follow on share repurchase with an outlook on base forecast and stress forecast and the capital — excess capital doing it.
I will point out that about a year and a half back we did repurchase stock from that standpoint. So we came course as the combination came together. But nonetheless pretty straightforward process and I would expect no change to that in the future. Other than, it will be much quicker runway to get to positive retained earnings on the outlook. Just based on where rates are today where the March will be in that accretion over time.
