Nathan Race: Yes. And I understand, it’s fairly difficult to kind of engage the deposit gathering pipeline, but obviously a nice core deposit growth in the quarter. Curious in terms of to what extent maybe some of the hires that Jerry alluded to earlier can perhaps kind of accelerate some of the core deposit gathering efforts going forward?
Joe Chybowski: Yes, on the deposit front, I mean, the hires that we brought on Board we’re super happy with and that those are all things we expect to pay off really in the long term. I think it really adds a depth of talent and capacity to our team that allows us to serve our clients better on the whole. I think on the deposits overall, we are really pleased with how Q1 came together. I think a lot of that was good quarter deposit wins with some new client relationships and deepening and expanding some existing client relationships. There was some sort of excess liquidity build through a couple of clients in the first quarter, and Q2 does tend to be a seasonally low quarter for us. So with tax time, and property tax time and the sort of nature of our client base, we do tend to see Q2 be a little slower from a deposit perspective.
So, we’re anticipating that a bit. But on the whole, the initiatives we put in place, the hires that we have, the brand that we have in the market, we really feel like that’s a good competitive advantage for us that will continue to pay dividends long term.
Nathan Race: Okay, great. And then just one last one. Obviously, we’re seeing a nice slowing upward trajectory in terms of deposit costs here in the first quarter. Just curious if you have the spot rate on deposit costs coming out of March?
Joe Chybowski: Yes, it was 337.
Nathan Race: Okay. But it sounds like Joe that that pace of deposit cost increases is steadily slowing over the course of the last several months, so still?
Joe Chybowski: Yes, definitely. It is slowing. I think like I mentioned the mixing piece is harder to anticipate, but I do think that impact of from NIB to interest bearing is there. But yes, we are seeing the absolute level moderate for sure.
Nathan Race: Okay, great. I appreciate the color. Nice quarter, guys. Thank you.
Operator: The next question comes from Jeff Rulis of D.A. Davidson. Please go ahead.
Jeffrey Rulis: Thanks. Good morning. Just a question on maybe if we could, Jeff, on the multifamily book. Could you give us a sense for the percent of those that book that matures in ’25 and beyond?
Jeff Shellberg: Yes, we’ll have to get that for you after the call. I don’t have it exactly offhand. I just think if you look at the fixed rate, the 500 we show obviously multifamily is within that.
Jerry Baack: Yes, Jeff, what I would say is on similar to 2023, we were getting in front of our relationships regarding where pricing standpoint. So we’ve identified everything that’s maturing in 2024, either maturing or repricing in 2024. We’ve reached out to those customers and we’re developing plans in terms of what they’re planning on doing with the property, whether the property the loan needs to be right sized based on performance, if they’re going to refinance with agency or potentially sell the property. So I think that we seem to be on top of it. We haven’t seen anything that really causes us a lot of concern and we’ll just continue to move forward with those sponsors.
Jeffrey Rulis: Okay. And Jeff, I think you mentioned certainly the dynamics of the Twin City market with supply in inventory pretty light and not a lot of new construction coming on. Anything else to kind of pitch in on the Twin City market relative to other kind of headline risk? What amount of kind of rent control or regulation do you see? Just any other separating kind of characteristics of your market?
Jeff Shellberg: Yes, I think that, we do feel good about the overall market. I’ve seen in an article recently that it ranks in the top two or three in the country just in terms of consistency of rent growth that may not be a high growing market, but it’s something that both from an absorption standpoint and from a rent growth standpoint, it’s kind of a steady Eddie. That being said that you’re always going to have some properties that exhibit some level of a stress due to potential vacancies in the pocket where the property is located at, could be expenses, could be interest rates. Fortunately, we know the market really good. We have really good sponsors. Have always had a good strong client relationship and are able to work with them in terms of identifying solutions for those problems.
The rent control that you mentioned, the St. Paul rent control that was implemented, I think it was two years ago, it’s been somewhat of a non-event. I think that it has in part reduced the amount of new development that’s going on in St. Paul, which meant that it’s been better for rent growth for the existing properties are there. And the jury is still out on the Minneapolis rent control that was the City Council had or the voters had passed that a year ago. They still have a task force that they put together, and they’re trying to come up with what that would look like. I would say that the Mayor has come out publicly and said that he is again any type of severe rain control as he feels it would impact development in the city.
Jeffrey Rulis: Given the low loss history in kind of multifamily and CRE in general at the bank. I interested in your view of the greater risk to the portfolio, either in CRE or even C&I. We’re starting to see a lot more C&I, one offs perk up from other banks. Just curious as to what — how would you peg the risk to C&I versus CRE?
