Matt Olney: Okay. And then if we do see that those paydowns over the next few years for RESG, there were some mentions in the management commentary about increased diversification in the next few years. So I guess I’m curious more strategically, how do you think about loan mix longer term? I think RESG is now 65% of the nonpurchased loans. And the feedback I hear from investors is they believe that RESG is the best in the business in terms of within that niche, but believe it’s just that shouldn’t be such a dominant part of a bank. So curious strategically, how you view RESG in terms of longer term, how big of a portion it will be of the overall bank? Thanks.
George Gleason: Yes. We’ve said many times that we would agree with that statement from the investors who are quoting that RESG is the best in the business. I think we’ve built a fabulous team and have a great business model at Real Estate Specialties Group that generates excellent returns with below-average risk. So our principle that is in our strategic plan and has been communicated many times is we’re going to let RESG get as big as it can be while maintaining its discipline and adhering to its stringent credit quality and servicing quality on that portfolio. We agree that our company is worth more and more valuable as a more diversified business model, even if the other lines of business are not quite as good as RESG in regard to risk-adjusted returns.
We think that diversification is very important, that’s why we talk in this document and have talked for quite a while about a growth, growth and diversification strategy. The first growth being let RESG grow as much as it will naturally grow, the second growth being grow other lines of business more broadly and more quickly over time. That may not happen this year, but I think we’ll see that really in a significant impact next year and in 2026. And I’ve privately stated that I would like to see RESG grow to 50% of our business. And I say, grow to 50%, it’s 65% or more or less now, but I wanted to continue to grow but get down to 50% of our business, even it is as it gets bigger, and I think our indirect lending, our asset-based lending, our Equipment Finance and Capital Solutions Group, our Fund Finance Group and the other augmentations in our commercial and institutional banking group that we’ve newly named and created by rolling those groups together and adding a lot of talent over the last few months to that team.
I think we’ll see significant growth out of CIB. I think we’ll see significant growth out of our commercial banking, community banking group, the commercial banking part of community banking. We realign some reporting structures. We’ve added quite a few people in that team in recent weeks and months. And realigned some reporting structures to take advantage of leadership capabilities of some of the members of that team that have now stepped up and are carrying a bigger role under Allen Joseph’s leadership. And I think all that has real positive implications. We’re also ramping up our consumer banking efforts that flows through Cindy Wolfe’s retail banking franchise, the bank branches and the HELOCs are a big part of that. We just started, of course, we’ll sell these loans, but it’s an important part of growing our consumer business.
We just started taking mortgage loan applications with our new secondary market mortgage team yesterday. So we’re focused on a lot of things that will help those other parts of our business grow and ultimately get to where collectively they equal or exceed RESG, where it’s going to be a multi-year process to get there, but we’re headed that way.
Matt Olney: Thank you.
George Gleason: Thanks for the question.
Operator: One moment for our next question. Our next question comes from Michael Rose with Raymond James. Please proceed with your question.
Michael Rose: Hey good morning guys. Thanks for taking my question. Nice step down in expenses this quarter. I know you reiterated the kind of mid-single digit growth outlook. You mentioned opportunistic hiring, things of that such. Can you just size the opportunity for you guys and maybe what the expectations are for additions and how we should expect that to impact the run rate as we move through the year? I’m just trying to get a sense for cadence of how opportunistic you’ll be? Thanks.
George Gleason: We’re going to be very opportunistic and already have been. Tim, through last quarter, we hired 40 something net new people. And over the last four quarters, I think we gave this data in the management comment somewhere between 110 and 120 net new people. Wouldn’t surprise me at all to see us adding 40 people plus or minus a quarter going forward. A lot of banks have pulled back, a lot of banks have shut down entire teams and divisions. There’s real talent out there to be acquired, better and experienced people. And we see value in adding a lot of those team members. In the short run, it will mute our ability to increase EPS and net income because we’ll be hiring people and knowing that they won’t produce much, if any, revenue for some number of quarters.
But we think it’s a great time to add some talent. And I talked about this two or three quarters ago on the call, making the comment that we believe that talent is essential. We’ve always placed a great emphasis on high intellect, high capability, high aptitude people who work hard and fit our very team-oriented culture, and we continue to believe even in a world where technology and AI are going to do more and more of that having the best people is going to separate winners from losers and highly successful from less successful current firms. So we just continue to be very focused on talent, and there’s a lot of talent for sale right now.
Michael Rose: So George, are the additions going to be kind of across the business lines? Or is it going to be more focused on some of the branch and community type lending personnel?
