Woody Lee: Was just hoping if that you could give some color on just, sort of the deposit pricing competition in your local markets. I mean is it €“ are you competing more with other institutions? Is it more the treasury market, just any dynamics there?
Tom Travis: It’s really all over the board. You have to segment it when you think about it. You’ve got your older more retiree-based that are more in that CD space. The CDs are a real small portion of our funding, I think only 100 million or 110 million or 120 million €“ it’s a 175 smaller portion. So then when you really roll into and you think about the bank and our profile, and we’re a commercial bank. And so, we have a lot of high-net-worth individuals and entrepreneurs, and they tend to be in money market accounts. And so, when you segment the liability section of the balance sheet, there’s just different factors. And so, it’s really hard to nail down one competitor or not. I mean, look, like I’ll tell you, Raymond James, they constantly run newspaper ads in the small towns and so they’re paying high rates and so the retirees look at that and they come into the bank lobbies.
Fortunately, for us, the data shows that our ability to maintain our cost of funds and do a good job with deposit betas is centered around the fact that a great percentage of our deposits are based on credit. And so, when we have customers that we’re very responsive to on the credit side, they don’t push us as hard on the deposit side, but it’s something that we fight every day on a relationship by relationship basis and it’s just across the board.
Woody Lee: Yes. That’s great color. And then switching to the loan growth outlook, it makes sense that the growth would be coming down a little bit. Are there any segments you’re seeing a pullback in growth? And are there any concentrations you expect to, sort of drive to growth in 2023?
Jason Estes: I would say that you can see a clear pullback in our construction activity. Part of that’s driven by cost, part of it is driven by the home buying market. So, you can see that pretty clearly in the change for this last quarter, you’re starting to see those numbers show that change. Our energy concentration is one that I mentioned that we watch very, very closely. There’s a little bit of growth room left there, but we’re still sticking to. We don’t want to get too far into the energy markets. And so, we’re doing that on a very selective basis with rapid amortization. And so, I would say those are two areas you’re seeing a pretty good shift. And our hospitality activity, if you go and you look at the last three years, that’s been a pretty high growth.
That balance has changed significantly. And so, it’ll move more in-line with the whole portfolio at this point and kind of for €“ with our €“ we’re intending to keep that in that kind of range that it’s at as far as a percentage of the overall portfolio mix. And so, those are the few areas I would highlight.
Tom Travis: That’s one of the delightful parts of the story on the loan growth, and we have that slide in the deck, and it’s got the broad and deep loan growth as the header. And as Jason said, that we’re very disciplined on our concentration. And when you get to where you’re almost at your max and in your few categories, you’re always concerned about how can I grow the portfolio or how can we grow the portfolio. And when you look at that slide, you can go back to 2018, and you can see that in 2018 energy was 18% of the book. And as of year-end, it was 14% of the book and then you look at hospitality and it stayed exactly where it was. And so, it’s very comforting to know that the bank has the ability and as we’ve grown to broaden that, we have that ability to continue to grow in those other segments.
And I think it’s a testament to the team to stay disciplined and stay focused because if we didn’t have a discipline, and we didn’t have that focus, Jason, I would argue that it would have been really easy for us to run our energy book to 20% or 22% in hospitality to 25% and we’re just not going to do it.
Jason Estes: Sure. Very easy.
Woody Lee : Alright. That’s very helpful. That’s all from me. Thanks guys.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Tom Travis for any closing remarks.
Tom Travis: Thank you again. We’re really pleased. We’re excited about the year. In-spite of the headwinds, we’re really blessed to be in this part of the country. We’re excited about the year. We’re continuing to look at opportunities on the acquisition space. They’re more limited due to the mark-to-market issues in the securities portfolio, but we’re truly excited and we’ve reverted back to our good-old-fashioned NIM numbers and our efficiency ratio, even with the increase that one-off in the salary, we’re still below 40% on the efficiency ratio. So, delighted, I think with these new records they’re comforting, and our team is committed to, I would say, more of the same, and we’re excited about it. So, we thank you.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
