Timothy Crane: Well, CECL is a life of loan concept as far as forecasting out what the losses are in your existing portfolio. So yes, if there’s a loan growth, that’s higher or lower that’s going to impact. And obviously, there’s a mix issue if we grow a lot in the life or commercial premium finance portfolios, those are less provision than a CRE loan or a commercial loan. But generally speaking, if you have higher growth, you’ll have a higher provision. But the things that impact the provision substantially are some of the economic factors. So if the forecast from the economists that are out there get less recession focused and more soft landing or mild recession focused, then I think some of those economic forecast factors will get better and that would have a positive impact on the provision.
But I’m not an economist. I don’t make economic predictions, but we follow Moody’s, we follow some other economic forecasts as we model out our CECL. So I would suspect unless there’s a big change in the economic forecast that growth would be the item that would impact the provision.
Ben Gerlinger: Got it. Okay. That’s helpful. Appreciate the color, guys.
Timothy Crane: Yes. Thanks, Ben.
Operator: Our next question comes from the line of Chris McGratty with KBW.
Christopher McGratty: Great. Good morning. Dave, just a question on the kind of a nuance on the capital the covered call strategy. How do we think about I guess broadly reinvesting going forward like that line item and obviously it will play into the size of the overall earning asset base?
David Alan Dykstra: Well, our securities, I mean, generally, we like to run-in the roughly 90% loan to deposit ratio and then the remaining liquidity is either overnight money or securities and our securities have generally been 12%, 13% of the asset base. So we would expect to sort of keep it in that range and use our liquidity to fund what we expect to be good loan growth. So the reinvestment of the cash flows up, the securities we would put back into some sort of asset class and we’ve generally done Ginnie Mae’s. And if you do Ginnie’s or Fannie’s, you can write covered calls against them. So where you generally get higher covered calls is when rates go down and the securities get called away and then you reinvest those securities and then you write calls against them again.
So in a – or in a flat rate environment, where you can continue to write calls on them quarter after quarter. But I would suspect that given the demand we have for a loan and given that we are sort of at a decent spot who could – investment portfolio go up another $500 million or $1 billion or something over time as we grow here probably, but that’s not going to create tremendous amount of covered calls. So I would probably say in this environment if you’re thinking $2 million to $5 million of covered calls maybe a normal range given the interest rate environment and our investments right now that’s probably not a bad way to look at it.
Christopher McGratty: Okay. That’s helpful. And then just two small ones. The – maybe a comment on gain on sale margins for mortgage. And then I just want to make sure I heard you. The $8 million loss on the – was that a $17 million sales or roughly little under 50% loss rate on the office loans? Is that what I heard?
David Alan Dykstra: That’s correct.
Christopher McGratty: Okay.
Timothy Crane: And then the gain on sales, Dave?
David Alan Dykstra: The gain on sales, for us, it’s been around holding around 2% the last couple of quarters, so pretty stable.
Christopher McGratty: Great. Thanks, Dave.
Operator: Our next question comes from the line of Brody Preston with UBS.
Brody Preston: Hey, good morning, everyone. How are you?
David Alan Dykstra: Great.
