It’s helpful on the capital allocation side, in that CMHC provides some 0% risk weighted asset. So it doesn’t soak up any of our CET1 capital, which frees it up for the point-of-sale program. So, you’ll see our construction lenders sort of pivot into that government insured program and be helpful for our economy. Hopefully we’ll be still providing, student residences and retirement homes and condominium units for the Canadians that are looking for a place to live.
Stephen Ranzini: Well, thanks so much, David, and look forward to seeing you in Chicago.
David Taylor: Absolutely. Looks — if the weather prediction is correct, this site’s going to be another hot time in Chicago, I thought something like 95 degrees.
Operator: [Operator Instructions] Next will be Bradley Ness at Choral Capital. Please go ahead.
Bradley Ness: Great. Thank you. Hi, guys. How are you doing?
David Taylor: Very good, Brad. It’s good to hear from you.
Bradley Ness: Perfect. Thanks. Hey, can you tell me the balance of the US RPP loans and how many partners you have right now?
David Taylor: Well, we’ve signed up three partners, and on top of my head, I haven’t got the exact figure on the balance, but Shawn might have that handy. Shawn, have you got that figured?
Shawn Clarke: For sure, David. It was USD67 million.
Bradley Ness: USD67 million?
Shawn Clarke: Yes, sir. 6-7.
Bradley Ness: Got it. Got it.
David Taylor: And we signed up a new one, Brad. So, that hasn’t drawn down yet.
Bradley Ness: Okay. Perfect. And when I think of loan growth going forward, should I still think of 30% annual clips?
David Taylor: Pluses and minuses taken into consideration, it looks still like a reasonable figure. And, that’s, taking into consideration the things that I was mentioning earlier or dampening of the Canadian economy, maybe the US economy dampening too, but heading into the States has been sort of a drop in the bucket in the market, doubles and triples aren’t heard hard to think about. And in Canada, our reach into other providers market might offset the inevitable downturn in our economy. So, yeah, I mean, 30%, it seems like a realistic figure, all those things taken into consideration.
Bradley Ness: Okay. Got it. Thank you. And regarding the net interest margin, it sounds as though if I heard everything correctly, that this is kind of trough quarter at, you know, 2.57% and likely will sequentially head higher over the next many quarters. Did I hear you say that, maybe back to 3% your modeling shows in the next four quarters?
David Taylor: Yeah. Absolutely. That’s the historic spread that we’ve been able to earn over the years. And we’re going to be helped by the increase in solvencies. So that’s — saying we’ve opened 20%, 30% percent more accounts since the beginning of the year, fiscal year. And that sort of correlates quite highly with the number of increased bankruptcies in Canada. So when we open accounts, they don’t fill up with the proceeds of the liquidations right away. It takes about six months for that to start happening. But it’s promoting of what we will get. So that helps the spread too and that they run a prime minus 3% on average. So that would be [4.20%] (ph) in Canada. And, our GIC, right, our return deposit receipt, right, in the one-year category might be [5.40%] (ph). So it helps. So there’s the things that help us, get back to that, 3% margin that we target.
Bradley Ness: Okay. Great. And the new point-of-sale loans that you put on, what rate are those nowadays?
David Taylor: Yeah. The ones in the States are a little higher margin than we get in Canada. Roughly, they’re on 4% over our cost.
Bradley Ness: Okay. 4%.
David Taylor: This market condition is going to be a lot different.
Bradley Ness: Got you. And on the expense side, if I heard you correctly, the normal is $12.5 million per quarter without any kind of acquisition related costs in there. This quarter, you were at $12.9 million. So kind of implying that $400,000 related to primarily legal expenses related to the acquisition. And just kind of thinking about them, you’ve been running higher legal expenses for, I guess, 1.5 years or so from this acquisition. Like, what addition — like, $400,000 seems like a lot when all that should be kind of done, I would have thought. You already did the application. Now it’s just maybe kind of sitting around redoing some filings here and there, but do you really need $400,000 a quarter in additional legal expenses for this?
David Taylor: It’s — it could be even higher, hopefully, when we close, but there was other miscellaneous expenses that went through the quarter too. About a half of that might have been attributable to, what, Steve was, alluding to. We completed our 30th year and had a celebratory picnic. You should have come too, Brad. And that that was a couple of $100,000 all in. For that, we had about a thousand people to celebrate our 30th year anniversary. There’s things like that went through. There’s pluses and minuses. But normally speaking, on a normal quarter, $12.5 million is about the right figure for us.
Bradley Ness: Okay. Great. That’s it for me. I appreciate it, guys.
David Taylor: Alrighty.
Operator: Thank you. And at this time, Mr. Taylor, it appears we have no further questions. Please proceed with any additional remarks.
David Taylor: Well, I’d like to thank everybody for joining us today, and I look forward to speaking to you at time of our fiscal 2023 year-end results. Thank you.
Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.
