But they also have to maintain a certain level in their noninterest-bearing checking accounts just for normal operations and stuff. So I think that activity probably happened a while ago, but we’re continuing to see sensitivity on the consumer clients.
Timothy Coffey: Okay. That’s helpful. Thank you. And then a question for Jill. As kind of the credit metrics start to somewhat normalize towards pre-COVID levels. Is your — what is your outlook for the economy and within Banner’s footprint? Is it for a soft landing or something harder?
Jill Rice: Well, Tim, I wish I had a crystal ball. I’m leaning to a soft landing, and it’s really because of the markets that we’re serving. I feel really good about the West Coast and how strong it has held up. But at the end of the day, we’re well positioned to deal with whatever is thrown our way, and we’re just going to keep on doing what we do.
Timothy Coffey: All right. Thank you. Those are my questions,
Mark Grescovich: Thanks, Tim.
Operator: Thank you. Our last question is a follow-up question from Jeff Rulis of D.A. Davidson. Your line is now open, please go ahead.
Jeff Rulis: Thanks. Just another quick one on credit and kind of splitting hairs a little bit, but the C&I — the increase in C&I nonaccruals linked quarter, I mean, overall NPAs to assets under 20 basis points small number. But just trying to get any read on what that commercial nonaccrual increase was if that was at any — I don’t know if it was granular by segment that you saw.
Jill Rice: It was granular, Jeff. I mean, actually, we’ve had a little bit of movement out and movement in, but it’s not industry specific or anything that points to a larger concern.
Jeff Rulis: Fair enough, that I check. Then just one other last one is on the mortgage side. Just trying to get a read on — it looked like a benefit on the move within the multifamily investment. I mean a little bump in the mortgage banking line. Where could you see that kind of in 2024 relative to 2023? Do you think it shapes up as a slightly better year from mortgage banking overall if we look at year-over-year.
Robert Butterfield: Yes. It’s Rob. So yes, yes, I think it’s obviously heavily interest rate environment driven. But we have seen a bit of a pullback in rates. So that should help the activity if we continue to see rates come down. Our expectation is that 2024 would look better than 2023. Still could be a challenging year for the industry, obviously, but we do think that we would see some pickup in residential mortgage banking operations during 2024 compared to 2023.
Jeff Rulis: Rob, would you anticipate any more multifamily kind of moves that would bump — that would be a benefit to that line item? Or was that kind of a Q4 heavy item?
Robert Butterfield: Yes, it was a Q4 heavy item. I mean we have been writing down as interest rates have been coming up. We had been writing down the multifamily loans, the fair value of those. And all that was running through mortgage banking operations. So even during the first nine months of the year, we had written $800,000. So part of that gain that we recorded in the fourth quarter was really a recapture of some loss that we had taken during the first nine months of the year. But then there was also some losses in prior years. The write-down that was recaptured. And so — but now we’ve moved all of the multifamily loans out of held for sale, so we don’t expect that to see that benefit anymore. But on the other side of it, we did talk about making some strategic investments into some different areas.
And one of those is our SBA operations. And we’ve made — we’ve hired a number of folks in the fourth quarter here as well as far as business officers. So what we’re looking at is kind of growing our SBA business and growing our gain on sale related to SBA loans to kind of offset that historical gain on sale that we would have saw from multifamily during kind of a normal environment. So I can’t give any specifics on what our expectations are from that SBA business for 2024, but we do expect that we’ll see some build of gain on loan sales throughout the year in that particular unit.
Jeff Rulis: Great. Thank you for the color there. That’s it from me. Thanks.
Mark Grescovich: Thanks, Jeff.
Operator: Thank you. As there are no additional questions waiting at this time. I’d like to hand the conference call back over to Banner Corporation’s President and CEO, Mark Grescovich for closing remarks.
Mark Grescovich: Thank you, Candace, and thank you all for your questions and your attention today. As I stated, we’re very proud of the Banner team and our 2023 performance in the wake of what is a very challenging environment for our industry. So thank you again for your interest in Banner and for joining our call today. We look forward to reporting our results to you again in the future. Have a wonderful day, everyone. And again, Happy New Year and a kick off to 2024.
Operator: Ladies and gentlemen, this concludes today’s conference call. You may now disconnect your lines.
