David Long: Good. Good. You guys bucking the trend here on the deposit side showing deposit growth, a lot of the banks continue to have outflows. What are your expectations on the deposit flows and then also mix shift hasn’t changed too much as you alluded to, do you see much mix shifting coming in the next couple of quarters?
Tim Crane: Yeah. David, it’s Tim. The deposit activity has been lumpy and both in and out I would add. We have been pretty disciplined with our pricing and cautious about getting ahead of the market. We are responding to promotional activity to retain our clients, and frankly, we have got some higher deposit costs built into our projections. We think we operate in good markets with a lot of deposit potential. We have typically outperformed our peers in terms of growth. Even though we are one or two in deposit share in many of our markets, we still only have 6%, 7%, 8% overall growth in Chicago and Milwaukee. So our multi-charter brand and approach we think will help us and we think we are holding our own. I’d add sort of an interesting fact here during the last quarter or two quarters, rather, we have helped clients purchase almost $1 billion worth of short-term treasuries that previously had been held at deposits at the bank and as the gap between deposit pricing and treasury starts to narrow again, we expect we will get an opportunity at some of that money.
But we don’t — I mean, we will protect the mix as best we can. Clearly, people are moving out of DDA in some cases for the rates in money markets or savings or CD products. So I think it’s possible that will continue. But I can tell you, we are intensely focused on adding deposits and relationships and we still think we have got terrific market opportunities. So we are going to hold our own and stay at it.
David Long: Good. Thanks, Tim. And then my follow-up here relates to the amount of cash you have versus deposits, a lot of your peers don’t have much cash and they have really had to increase FHLB borrowings and use of higher cost CDs. Your cash, as I see it, is down to just under 6% of deposits, you are up over 10% at September 30th. Do you monitor that, is that something that you have a target you want to keep above a certain cash level just in case you do get some deposit runoff and you don’t have to chase yields?
Tim Crane: Yeah. I think we are sort of comfortable where the cash is now. If you remember last quarter, at the end of the third quarter, we had a $1 billion extra sitting in cash, because we had done some borrowings at the Federal Home Loan Bank that we indicated we would invest at the beginning of the quarter. We did that. So I think, if you look at it, we were in the high 3s and then we went to the high 2s, if you adjust for that $1 billion that we invested currently after the end of the third quarter and now we are around $2 billion. We like that position. We sort of focus on a loan-to-deposit ratio of 85% to 90%. We are slightly over that fulfillment rate we are comparable with. And then we were lagging on investing in that securities portfolio in the past.
We just thought investing in the 1% range was not that prudent and so we were patient and then we have invested now that rates are higher. And we think that part of the remixing of the balance sheet to protect against down rates is to invest in some of the longer term securities mile for a portion of the balance sheet. So I think we like where we are at right now as far as the mix of cash, securities and loans, and as we grow, that mix will probably stay about the same.
Edward Wehmer: Yeah. Liquidity has always been very important to us and you can expect our deposit costs to go up, but we have a lot of room there, given the 40% beta we talked about. We are not there yet. At the same time, the asset should move and the real trick is going to be protecting the margin when this peaks out in black swan hits and it’s going to drop like a rock, no matter what the environment is and you have to be prepared for that, too. So we are busy, we are constantly looking at it and liquidity is extremely important to us. Don’t forget, Continental Bank went under, because of liquidity, not because of credit. It was the largest bank failure at the time and well liquidity is still important to us. We monitor it very, very carefully.
David Long: That’s right. Thanks for the color guys. Appreciate it.
Operator: Thank you. Our next question comes from the line of Chris McGratty of KBW. Your question please, Chris.
Chris McGratty: Hey. Good morning. Thanks.
Edward Wehmer: Hi, Chris.
Chris McGratty: How are you doing? Dave, the 4% margin roughly that you are talking about, I guess, what does that map to in terms of loan yields, right? You have got the premium finance book that keeps this kind of kind of backward lag, but is it somewhere like the mid-6 — it feels like it’s kind of somewhere in the mid-6s, is this kind of where you are going to — your loan yields are going to go?
David Dykstra: It’s probably mid-6s to approaching 7 right now, I would say. But if rates keep going up and the mix of the business changes, I mean, that’s a variable, but that’s — we don’t give guidance — give specific guidance, but that’s the right zip code.
