Lynn Harton: And — Kevin, let me I’ll start with that and then Jefferson and Rich can jump in. I would say first, any of these businesses, we start with the — can it be meaningful for us and really be something of size enough that we want to that makes a difference. And as we looked at that business, we like the team, they know what they’re doing, but it’s very competitive. It’s subprime, it’s consumer-based, which adds to regular risk over time and it’s inside of our market. So, it really wasn’t any one thing, but we said look, we want to take this from do we want to take this from $300 million to $1 billion. For those reasons, we really don’t and if we don’t want to do that, then it’s probably just better just to wind it down and put our efforts somewhere else. But so that was — those to me were the drivers. I don’t know if Jefferson, you want to add.
Jefferson Harralson: Well, I’ll just add into that’s the same line of reasoning we used to sell the corporate benefits insurance business, the healthcare insurance business. It had very little overlap with our existing customers similar to MH. In this case, it was even — it was very, very small, less than $1 million of revenue, so — and not a lot of overlap with existing clients. So, we use a similar reasoning for that business as well. And we’ll continue to look at our businesses, especially our smaller businesses with that lens. So, it wasn’t anything specific, yes, to the portfolio or any problems we saw, it’s just really an overall business strategy question.
Kevin Fitzsimmons: And that was a business you guys were in and it was just imperative from Reliant, correct?
Lynn Harton: That’s correct.
Kevin Fitzsimmons: And will — so you stop originating then do you just let the loans mature out or do you go actively trying to sell them? I don’t know if there’s a market?
Jefferson Harralson: I think with rates moving higher, I think the idea is just to let them mature over time. If rates move down and there is a better market or if you can sell them without a loss, then maybe you accelerate the exit of the business, but our plan currently is just to service the loans and let it run down.
Kevin Fitzsimmons: Okay, great. And then just a quick follow-up on — you guys obviously have very strong capital There’s been some discussion that could banks look at selling some of their underwater securities and redeploying some of that at higher rates or paying down debt? Is that something that’s on the radar for you all or I would imagine in that with every acquisition like the First Miami coming in, you really get some of that just from dealing with their securities portfolio? Just curious how you’re thinking there?
Jefferson Harralson: Yes. So, we have looked at that and we are not going to do a restructuring such as that. We did make a decision this quarter to do a swap of $700 million of our securities book from fixed to floating. And the main idea of that was to protect TCE and capital in the event of higher rates. We took our AFS portfolio from three and a half years duration to two and a half years duration. We took our AFS portfolio from about 20% floating to 60% floating and we get 150 basis points initially anyway benefit which wasn’t the reason we did it, but you do get a little benefit by moving to the shorter end of the curve. So, part of the margin benefit next quarter is that the securities yield should be in the $2.80 range with this change depending on what rates do.
If you get a rate hike, you get a little more benefit from this and if you get rates down, you get — it works against you. But we mainly did it for risk allocation and protecting TCE and unrealized losses in a rising rate environment.
