You know, the speed of our deposit price increases have definitely slowed. We’ve got some really good tactical things as far as our retail CDs being very short. All of our broker CDs are short, very short. Like, they all mature by July. And then about, like I said, about 37% of our loan book reprices. So, we’ve got some good. We feel like we’ve positioned ourselves very well. And could we see a little bit more compression? Maybe, but I think it’s definitely slowing.
Christopher Marinac: Great. That’s helpful. Thank you for that. And I had a credit question as it relates to SBA. Is there anything that you see down the road on SBA that would be influential for either charge-offs or just credit in general?
Doug Strange: Chris, not materially. I mean, we’ve — that portfolio is under stress as most people realize small business. You know, when your lowest cost of capital is 10% or 10.5%, that does put pressure on the group of companies. But we — you know, we have the guarantee and we’ve been recognizing those losses as they occur and we may see a little bit more. But again, that book overall is about 1% of the portfolio.
Palmer Proctor: And you know, we’re glass half full. But I’d love to see more volume coming out of that area, Chris, we’ve talked about, but due to the fact we didn’t have a whole lot of increased volume over the last couple of years, because everybody’s focused on PPP, as you recall, that — that did help probably eliminate any additional potential risk that we have from a credit perspective in that overall portfolio because, as Doug mentioned, is minuscule in terms of the overall. But there will clearly be stress there. I do think there’ll probably be some programs that the SBA will come out with in terms of deferments, similar to what they do in mortgage to assist with some of this stress and — but right now, we feel pretty good about what we’ve got.
Christopher Marinac: Great. And then last question just has to do with, Palmer, I guess, the discipline that you’ve mentioned before about matching new loans and new deposits. Is that still, you know, the game plan going forward?
Palmer Proctor: Absolutely. And you know, Nicole — you just talked to Nicole about margin, and one of the things that you cannot overlook is the value of bringing in noninterest-bearing deposits. We certainly try and control what we’ve already got, but more importantly, we’re trying to look at what we can build. And when you look at the DDA build this quarter, I think it’s evidence of our efforts there that are starting to come to fruition. So with the focus we’ve had over the last year, not anything new, it’s, you know, on treasury and aligning and controlling. And that’s one of the benefits all banks have, if they’re disciplined about it, is allowing deposits to kind of be the governor for the loan growth. And I think we’re probably a good example of that, and that will continue.
Christopher Marinac: Great. Thank you for taking all of our questions this morning.
Palmer Proctor: Okay, thank you.
Operator: The next question comes from David Feaster from Raymond James. Please go ahead.
David Feaster: Hey, good morning, everybody.
Nicole Stokes: Good morning.
David Feaster: Maybe just a high level question. I’m curious, how do you all — you guys have done such a good job managing the balance sheet throughout this cycle, and you’re pretty rate neutral at this point. And look, the rate outlook continues to change pretty rapidly. Last quarter, we were talking about cuts. Now, we’re looking at higher for longer. I’m just curious, how do you think about managing the balance sheet at this point just kind of given the uncertainty on rates and maybe some initiatives that you have in place or strategies that you guys are considering?
Nicole Stokes: Sure. So, you know, we really are proud of the fact that we’ve gotten — I don’t think we could have timed it any better to be this close to neutral this part of the cycle. So, longer for — higher for longer, we’ve always kind of been in that camp of higher for longer. So, there are some things we can do specifically with — and we have been doing with our brokered CDs being short, our retail CDs being short, so that we can become more liability-sensitive pretty quickly. The other thing is that our bond portfolio, we continue to have a smaller than usual bond portfolio. We’re still only about 6.5% of our earning assets in the bond portfolio. You know, we could put another $300 million in there and it would bring us up to about 8% of our earning assets.
So we have movement that we can do there. We also have about $650 million of our bond portfolio that matures. We have a very short duration on our portfolio. You know, this year, we’ve got about $300 million maturing, that’s at a 350 coupon, and we’ve got about 335-ish maturing next year, that’s at a 290 coupon. So there are some things that we can do on the balance sheet to pre — kind of pre-fund some of those payoffs that will also help us when we become more liability-sensitive in the longer run.
David Feaster: Okay, that’s helpful. And then maybe just, you know, kind of touching on the margin side. I mean, Palmer, you just — you nailed it. The key to the margin is really going to be deposit performance, especially on the NIB front. And it’s not lost on us that you saw NIB growth on a period end basis. I’m just curious, maybe some of the underlying trends that you’re seeing, like, I mean, from the NIB side, how are, you know, accounts trending imbalances early into the quarter? And how you think about NIB and your kind of deposit growth strategy as we look forward?
Palmer Proctor: Yes. I don’t think — you know, the nice thing, David, is we’re not having to adjust our strategy, because we’ve been — we’ve always been a — I’d like to say we’re deposit hounds. We’ve always focused on that. When you look at our deposit mix, I think it’s perfectly reflective of that. And so, when you look at our composition, with, you know, 37% consumer and 42% commercial, what we’re seeing is the focus that we placed on small business banking and on our C&I efforts, that’s really — as we all know, that’s where the operating accounts come in, the payroll accounts come in, and that’s where our focus has been around the treasury management side. So when we look at the hires that we had over the last 24 months, that’s primarily been where that additional expense has been, and that’s where that value has been created.
