David Feaster: Looking at the originations, it looks like originations increased a bit quarter-over-quarter predominantly driven by construction. I’m just curious, your appetite or comfort with construction here today. I’m guessing a lot of that’s going to be multifamily. And then just any thoughts on what you’re seeing on the demand front from clients more broadly? I’m curious, their willingness to invest here today, just there’s obviously a lot of uncertainty in the market, but curious kind of what you’re hearing from your clients.
Jill Rice: Thank you, David. So as it relates to construction, I still feel good about that product in all of the business lines that we’re seeing it. So, yes, it was driven by the affordable housing, but we are also continuing to see builders at a slower pace than historical but they are continuing to take down new starts to replace inventory because product continues to move there. In terms of overall opportunities, certainly, people are being a little more reserved. Pipelines are building slower than historical numbers, but they continue to refill. But the — I guess I would just say that there is concern as to what’s happening in the economy, and so they’re a little slower to take that opportunity whether it would be for capital purchase or a project. They’re a little more on cost, so slower to pull through to a new loan.
David Feaster: Okay. That makes sense.
Mark Grescovich: Yeah. David, this is Mark. I would just add that I think it’s important to take a look at our concentrations in relation to capital, and you’ll notice that we’re at the lowest level that this company has been in, I think, 15 years, as it relates to those concentrations.
David Feaster: For sure. That makes sense. And then you’ve taken an active and steady approach to managing securities over the past several quarters. I’m curious, maybe with perhaps less likelihood for rate cuts in the short run, has your thoughts on the securities book changed? It looks like we used proceeds to pay down borrowings. You’ve only got a modest amount of borrowings left, and broker deposits are pretty low, I’m just curious, how do you think about securities cash flows and sale proceeds going forward? And has your appetite for restructuring changed at all?
Rob Butterfield: Yeah. Thanks for the question, David. So if I think about specifically in Q2, we are considering whether we’re going to do another security sell in Q2, that could look similar to what we did in Q1. And part of that it’s going to be driven based on market conditions, where interest rates are at what the level of loss would be on those security sales. And then we’re also paying attention to loan growth as well as deposit flows to make a determination. If we think about the brokered CDs, so that $108 million of brokered we have, we have about half of that matures in June, and then the other half matures in Q3. So we’re considering that as well. Just normal security cash flows are about $60 million a quarter. So it really — there’s a lot of moving parts that we’re considering on whether we’re going to do something or not.
David Feaster: Okay. That’s good color. And then last one for me, we talked about the expense side a bit and some of the pressures and the runway. But I’m curious, what are you seeing on the investment side? What’s your appetite for new hires today or even de novo expansion? You guys are very forward-thinking, I think your investments in technology are probably underappreciated by a lot of folks. I’m curious, maybe, what are you prioritizing today on the investment side, and how technology could potentially be used to support efficiency improvement?
Rob Butterfield: Yeah, I guess there’s a couple pieces to that. So, first of all, just on the people side on the relationship managers, we have been adding there not specifically in the first quarter, but if you look back to the second half of 2023, we were adding some relationship managers, commercial RMs in key markets there and we continue to make that investment. And then on the technology side, there are some technology investments that we’re currently looking at or going to start to make specifically on the loan origination system and deposit gathering system. We’re moving to a new system that will almost be a single source within the institution that will allow us to have a more streamlined process, more efficient, and increase the — or decrease the amount of time it takes to open deposit accounts.
And so yeah, we are continuing to make investments. We’re always taking a long-term approach to things, so we’re controlling expenses where we can, but we’re not going to sacrifice making investments in the organization for the long term.
David Feaster: That’s great. Thanks, everybody.
Mark Grescovich: Thank you, David.
Operator: [Operator Instructions] Our next question comes from Kelly Motta of KBW. Please go ahead.
Kelly Motta: Hi, good morning. Thanks for the question. Maybe turning to Jill, I really appreciate all the color on the CRE maturities that you included in the deck this quarter. Doesn’t look like there’s much coming up in repricing over the next year or so, but just wondering for the relationships that are wondering what the process has been working with those borrowers, if you’ve been like practically reaching out and any sort of color you can share as to what gives you comfort with these portfolios with all the credit metrics looking super strong still?
Jill Rice: Yeah. Thank you, Kelly. So we regularly are stress testing our portfolio and so as it relates to specifically these property types, think about office, yes, we’re regularly reaching out just for updated rent rolled information on trending information that our borrower may have about upcoming lease maturities, reduction in space, that sort of thing. If we get that kind of information, we’re applying that to the current operating statement and restressing the portfolio to see what happens then at the repriced rate.
