Nathan Race: I just want to go, clarify one question to your early response to Jeff’s item on NII growth for this year. That mid-to-high single digit NII trajectory that I think you described, Al. Does that include maybe two or three rate cuts in the back half of this year?
Al Villalon: Yeah. Thanks for clarifying for that. That is on the plus 100 scenario, we are — I’m sorry, the minus 100 scenario. I’m going to clarify that again. The minus 100 scenario that we had in the 10-K last year.
Nathan Race: Got you. And perhaps supporting that outlook with rate cuts, is the plan with some of the liquidity that you guys built with the repositioning late in the fourth quarter, is the plan to kind of keep borrowings where they’re at just to provide at least the short-term debt where it’s at, just to kind of provide that insulation to floating rate loans to the extent rate cuts occur. Do you kind of plan on maybe bringing down wholesale funding to the extent deposit growth remains as strong as it was in the fourth quarter and loan growth also remains strong, albeit likely not to the level that we saw in the fourth quarter?
Al Villalon: Right. So from the restructuring we did in the fourth quarter, we did use that predominantly to support loan growth as you saw. We had very strong loan growth. But on a go forward basis, as you think about our borrowings, we’d like to decrease that, especially if we have more deposit growth there. I mean, we’d like to pretty much eliminate that if we can potentially with and if we have continued strong deposit growth.
Nathan Race: Okay. Great. I apologize, I jumped on somewhat late, but just in terms of the loan growth outlook for this year, could you remind me what you guys are thinking there?
Al Villalon: So we’re thinking modest, but I’ll let Jim also answer.
Jim Collins: Yeah. I think we will have loan growth. Obviously, with the borrowing situation, it depends on how much deposit growth we have. But with the talent that we acquired in 2023, some of the processes and procedures that we’ve streamlined in 2022 and 2023 helps the entire commercial lending group, as well as the rollout of our private banking group, acquiring market share from some of the other banks that are not lending, we will definitely have some good, solid, profitable loan growth. That’s my expectation.
Nathan Race: Got you. In terms of commercial real estate, maturity is expected this year. Is that a meaningful headwind to growth, net growth, that is?
Jim Collins: We do not have a meaningful amount that will be maturing in the next 18 months to have a headwind in that category.
Nathan Race: Got it. And just changing gears, Al, I think, you mentioned Retirement and Benefit Service revenue should be kind of flat in the first quarter versus the 4Q level.
Al Villalon: Yeah.
Nathan Race: I noticed in the release that Retirement plan participants had some nice growth quarter-over-quarter. So just curious what you guys are seeing from an organic growth perspective in terms of adding new accounts onto that platform and just kind of how you’re thinking about growth in that line this year, assuming equity markets are relatively stable.
Katie Lorenson: Hey, Nate. It’s Katie. I’ll take that one. From a new sales standpoint, from new plans, new revenue, new participants, it was a record-setting year in 2023. We continue to sustain headwinds as plans that leave through, they either get acquired or move out for RFP, continues to be a headwind to that new business and so considering stable markets, that’s where we end up with a fairly flattish outlook for that revenue line item going forward.
Nathan Race: Okay. Katie, have you noticed just the natural headwind from that line of business in terms of the natural attrition there? That’s slowing relative to the past years, just as you guys have launched a number of initiatives and new sales efforts to kind of offset what occurs with that attrition break?
Katie Lorenson: It’s slowing incrementally and we’re growing new revenue incrementally, but we think there’s continued additional opportunity to improve that net revenue growth year-over-year and there are initiatives being put in place that contractually will do some things for us. There’s also some efficiencies and some process improvements that will be implemented in 2024 that will continue to help that net revenue pace higher. So I’m confident that we will see incremental continued growth, but it’s going to take a little bit of time and looking forward to having the Chief Revenue Services Officer and the executive team to help us guide through and prioritize some of those changes, as well as help us build out that acquisition opportunity list.
Nathan Race: Got you. And I know it’s been an ongoing initiative of you guys in terms of increasing the capture rate from the Retirements platform onto Wealth. We’re just curious to what extent maybe some progress on that front was evident in the Wealth Management revenue increase in the fourth quarter. Is that just more so a function of some of the private banking teams that you’ve added and also just given that equity markets were higher in the fourth quarter?
Jim Collins: We actually had one specific large win in that arena from capturing that terminate participant into Wealth in the fourth quarter. It was a sizable number. But we continue to fine tune and streamline that process and over the years we will continue to capture more of a percentage and we will be adding additional Wealth advisors in 2024 and 2025 to capture more of that piece of the business.
