Phil Watkins: So I think you are right. There’s certainly stronger risk-adjusted return profile on that product now than there has been in the recent past. But I think we’ve strategically said while — we want to emphasize our strengths in that business and it’s why we’ve transitioned more towards our held-for-sale strategies where we can similarly play an important role in that product but without taking the credit risk of holding those loans on our balance sheet. And so that’s where we continue to see that going forward.
Sam Sidhu: And I would just add now that one of the things to build off of the comment Phil made about sort of the strength of our institution versus others is while many of these NPLs have improved their underwriting and arguably the risk profile, that’s an indirect business and we’re focused on a direct business and from a direct perspective, our strengths rely on the commercial side and B2B is the way that we approach that business as opposed to B2C or B2B2C which we had done many years ago. right.
Operator: Your next question comes from the line of Bill Dezellem of Tieton Capital Management.
Bill Dezellem: Relative to the 10 teams that you have brought on, what is the size of the loan portfolios that they present. I believe you mentioned in the opening remarks, deposits are about $10 billion. What’s the loan level?
Sam Sidhu: Sure, Bill. The expected rough associated loan book is under $1 billion.
Bill Dezellem: Of the $10 billion and of the $1 billion over the course let’s say, a couple of years, what [indiscernible] what proportion of those would you expect to bring on?
Sam Sidhu: Sure. You cut out a little bit but I want to clarify one thing as the loan book was over — sorry, the deposit book was over $10 billion just prior to last March. It was a little smaller at the beginning of this year. But over time, we expect that we’d have an opportunity to bring in the entire current size of the deposit portfolio over the next, call it, 3 years. On the loan side, it sort of stick — a rough estimate is that sort of 20% to 30% loan-to-deposit ratio for these portfolios.
Bill Dezellem: Great. And then last question, with the recent ruling, noncompete agreements are no longer allowed. Does that make it easier for these teams to bring…
Sam Sidhu: Bill, you cut out again at the end but I heard the comment about the new ruling on noncompete. I think what’s important about Customers Bank and retaining talent is, really do we have the right platform, the right culture, the right business model, the right compensation model to be able to retain and attract top talent? That we definitely have. And from a customer perspective, customers follow the teams and then they look to the banks in terms of the same attributes that I just mentioned. And the good news is that we have and will continue to have both.
Operator: That concludes our Q&A session. I will now turn the conference back over to Customers Bancorp President, Sam Sidhu, for closing remarks.
Sam Sidhu: Thank you. I want to conclude by personally thanking our people experience team, our technology, our operations, our product and our treasury management teams for having so many team members up and running in our platform so expeditiously over the past couple of weeks. Thank you to all our analysts and investors for your continued interest in and support of Customers Bancorp and we look forward to speaking to you next quarter.
Operator: This concludes today’s conference call. You may now disconnect.
