Kelly Motta: Got it. Thanks for the color. And then maybe turning to fees, it was pretty strong this quarter. Mortgage was up in what is probably a seasonally weaker quarter. Just wondering if you could spend a moment maybe touching on the Banner Forward initiatives you’ve done with the fees and kind of your outlook. And where you’re seeing the most potential for fee growth as we look through the remainder of the year?
Rob Butterfield: Yeah. Sure, Kelly. So a couple of different components of that. First on the deposit fee income, as I mentioned, we did see growth in interchange fee income and also in overdraft fees. The interchange fee income, last quarter we had some card replacement expenses that are not re-occurring on a quarter-to-quarter basis necessarily. So I think Q4 was a little lower than the true run rate there. And then we did see a little bit of an increase in overdraft fees as well. I think on the deposit fees, I think probably the run rate there is a bit higher than what the street has right now. We did implement some account maintenance fees last year as well, related to business accounts and also consumer accounts as well.
So I think the combination of all that, maybe the run rate’s a bit higher than the street has right now. The other component of it, we did see an increase in our SBA gain on loan sale income as well during the quarter, and that really was, the margin has returned to more normalized levels. Last year, the spread or the margin on those gain on loan sales wasn’t there. So we elected not to sell some of that product, and now the margins have come back, so now we’re selling some of it. We have hired some additional business development officers in that area. We’re not really seeing the fruits of that at this point. It takes a little bit of time for them to build their pipeline back up and to really get the benefit of those hires. But I think we’ll start to see some of that benefit in the second half of the year in even further expansion in our SBA gain on loan sale.
And then on the mortgage banking side of it, we did see an increase there from the fourth quarter, and early on the rates were a little bit lower. The rates have increased as we went through the quarter there. But absent of any changes in the interest rate environment, it will just be driven by normal seasonality and normally Q2 and Q3 are better than Q1. So there could be a little bit of an increase there as well.
Kelly Motta: Thank you so much. I’ll step back.
Mark Grescovich: Thank you, Kelly.
Operator: And the next question comes from Timothy Coffey of Janney Montgomery Scott. Your line is open.
Timothy Coffey: Great. Thank you. Good morning, everybody.
Mark Grescovich: Good morning.
Timothy Coffey: Rob — good morning, guys. Rob, I have a question. Good morning, guys. Rob, I had a question about kind of the rate sensitivity of a Banner depositor. If the Fed does start to cut rates later this year, would you think that would slow the flow of deposits into those savings accounts? Or has it been more of a fundamental lasting change?
Rob Butterfield: No. The way we’re kind of thinking about that is, I think once the Fed starts to cut interest rates, and then we will see some stabilization in the flows there and even in the cost of deposits. I mean, there is going to be a little bit of a lag there just because of the overall liquidity in the market currently. But I do think it’s going to slow some as the Fed starts to cut.
Timothy Coffey: Okay, great. Thank you. And then — I’m sorry, Rob. One kind of quick question for you. How much available for sale securities were sold this quarter?
Rob Butterfield: We sold $71 million.
Timothy Coffey: Okay, great. Thanks. And then, Jill, I appreciate the color on the construction portfolio in total, but I was curious about the multifamily construction. You’ve seen good growth there in the last handful of quarters. I’m wondering, is it — would you be willing to grow up and able to grow that portfolio further, or is it bumping up against internal concentration limits?
Jill Rice: It is not up against internal concentration limits at this point, Tim. And as you think about those affordable housing construction, they’re bigger projects. They take longer, so they semi-fill that construction bucket, but then they pay down significantly when they move into permanent because of the tax credit. So it’s a larger construction loan with a longer tail. But no, we’re not at concentration limits.
Timothy Coffey: Okay, great. Thanks. And then, Mark, I have a question. Appreciate the color talking about the real, the kind of core earnings of the company’s last several quarters. What are your thoughts on increasing the dividend?
Mark Grescovich: Well, Tim, as you might — thank you for the question. As you might suspect that we are constantly looking at ways in which we can deploy capital effectively for all of the shareholders. And our dividend payout ratio right now is significantly below what our peers are and it looks certainly within a comfort zone. At the same time, we want to be very prudent in understanding what the dynamics are of the economy, what the clarity is on certain geopolitical issues, as well as the interest rate environment. Until we see some of that clarity, I don’t know that we’re going to do anything in the immediate term. But certainly, as we get some more perspective on what interest rates in the economy and geopolitical issues are going to do, we continue to build capital.
