Alan Villalon: Right now, you’ve been given the market rate right now and that would be roughly around 85 basis points.
Eric Grubelich: Okay. But you’re showing $139 in the average for the quarter? So how can that be…
Alan Villalon: Yes. But that — those are synergistic deposits that do not come out at the branch level. So they’re coming from our retirement services side.
Eric Grubelich: Okay. Okay. So that’s where you’re having to pay up more for the deposits. Yes. Do you expect the NIB, the noninterest-bearing to you expect to continue to lose volume there? You made that comment about some of your commercial customers are drawing down their own liquidity as opposed to taking loans. Do you see more of a dent on that coming?
Jim Collins: I think that generally is a trend in the fourth quarter for all commercial clients as they’re paying dividends or getting money out of the entities. I think it’s Safe to say line utilization is a big question mark on what will happen in the rest of this year. It has creeped up towards the end of last year. But we have seen a lot of customers instead of taking a term note for a piece of equipment just using cash. So I think it could come down a little bit, but I don’t think that’s enough at this point that’s going to be impactful.
Eric Grubelich: Okay. Let me just switch gears for a second. The mortgage banking business, obviously, unless something drastic happens in rates, it’s not going to come back online anytime soon. The way you’re operating that business now given where the revenue volume is it fair to say it is breakeven? Or are you losing money on it all in? .
Alan Villalon: We are making money in that business.
Eric Grubelich: You are. Okay. That’s good. And then last thing on the expense side, you talk about cuts and things like that. But if this revenue environment stays subdued for you or there’s maybe more of a surprise with the margin, the model is what the model is, but the rubber hits the road with what your competitors do, right? You can’t control that. To what extent do you see your comp line coming down at the operating level and at the executive management level this year.
Katie Lorenson: From an expense standpoint, we’re doing the right things. We just completed a restructure. We eliminated several positions in the company. And — but we’re thoughtful, right? This company has run for the long term, and we are going to be opportunistic in adding talent where we can while thoughtfully repositioning the support to make sure that talent has even more capacity in the company.
Eric Grubelich: How — Katy, how much — or I guess, how far are you through that sort of plan to streamline more, maybe that’s my own word, not yours in 2023. Are you right at the beginning of doing it? Are you mostly through it? I realize with Metro Phoenix, there was a lot of churn there and things you had to get through to the positive. But I assume you’re talking more about the core bank outside of what happened with Metro Phoenix, the acquisition. So are you — is this sort of a new step or are you halfway through it, do you think?
Katie Lorenson: A new step — first step was here just a couple of weeks ago. And it really was restructuring the team to formalize the structure around our go-to-market strategy and so as we bring in experienced producers in their verticals. We have realigned the support side and dedicated support side to those team members so that our speed to market can improve as well as the client experience and again, just the overall capacity of those team members.