Operator: The next question comes from Gary Tenner with D.A. Davidson. Please go ahead.
Gary Tenner: Thanks. Good morning. Just wanted to ask about the expectations for, I guess, balance sheet growth in 2023. You talked about mid single digit loan growth. Wondering if there’s a piece of that, that could be funded by securities, cash flows or cash on the balance sheet? Or do you expect that kind of balance sheet growth and deposit growth is pretty well mocked up with that loan growth over the course of the year?
Kevin Kim: We plan to fund our loan — new loan production mainly with our deposits. And obviously, we are currently seeing approximately $50 million per quarter of cash flow being generated from our investment portfolio, but we currently plan on 100% reinvestment back to the investment portfolio. So, we believe that mid-single digit loan growth will be funded by our deposit growth and our expectation for the deposit growth will be pretty comparable to our loan growth.
Gary Tenner: Okay. And then I think a couple of times you have mentioned deposit strategies that you’re implementing. Can you give us any more color on what you’re doing there? Are they kind of business line oriented? Or is it just greater kind of pressure on loan customers to bring deposits over? Just some more color there. Thank you.
Peter Koh: Gary, this is Peter. Yeah. We would like to share more information. But I think for competitive reasons, we can’t disclose too much. But I do just want to share we do have sort of a multi-prong approach to this. And I think the focus, as we mentioned before, really will be in terms of the core deposits. And so, I think every category that you see there that would be considered core deposits we are building and currently implementing strategies around those.
Gary Tenner: Thank you.
Peter Koh: Thank you.
Operator: The next question comes from Tim Coffey with Janney. Please go ahead.
Timothy Coffey: Great. Thank you. Good morning everybody. Thanks for the opportunity to ask a question. Kevin, can you kind of provide some color on the pipeline that you’re seeing right now?
Kevin Kim: Yeah. Yeah. The pipeline for the first quarter of this year is down compared with the start of the fourth quarter of 2022, but I think that is normally expected due to seasonality factors. And the smaller pipeline is also due to the higher interest rate environment and the overall impact it has industry-wide on CRE loan demand. And in addition to that, given the looming recession, we are also exerting greater pricing and credit discipline as we continue to be more selective in our lending practice and favor businesses that are less impacted by consumer spending and a more recessionary resistant. So, pipeline is smaller and that is not really unexpected.
Timothy Coffey: Okay. Are you seeing any stresses within your current borrowers from a higher rate environment?
Kevin Kim: Well, we are really trying to focus on customers who are more recession resistant. And so far we have not seen any significant impact to loan demand for those type of customers. But obviously, high interest rates will impact all areas of lending, and we are very cognizant of that.
Timothy Coffey: Okay. Great. Those are my questions. Thank you very much.
Kevin Kim: Thank you, Tim.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.
End of Q&A:
Kevin Kim: Thank you, Andrew. Once again, thank you all for joining us today. We hope everyone stays safe and healthy, and we look forward to speaking with you again next quarter. So long everyone.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
