Broderick Preston: Got it. And then I would ask just one last one. Dan, I know Matt just asked about it, and you’ve been asked about it in the past. So I’m beating a little bit of a dead horse on the insurance front. But I do think that the longer – I think I remember the longer-term efficiency ratio is a 54% number. And it sounds like there’s other kind of things that you were viewing to maybe help get there over time? But when you look specifically at the insurance business and the attractive valuations that are out there for insurance businesses, the insurance business is obviously one way to improve the efficiency ratio and potentially earnings per share if you – depending on what you did with the excess capital in the sales scenario?
But it would be ROA and ROE dilutive given the small asset base and the little equity consumption that it takes up. And so strategically, how do you think about those moving parts when you’re evaluating that business line? And why is keeping that business more beneficial to Cadence right now than strategic alternatives?
James Rollins: Yes. I don’t know that there’s a right or wrong answer in that. I think we want to make sure that we look at all of the parts of the puzzle. That’s what I was trying to say in the earlier answer was we’re not for or against. I think we want to continue to look at opportunities. We want to measure the entire picture. All of the measurements like you said, some things are going to be better, some things are going to be worse. That’s just part of what we do as a company when all the acquisition targets that we look for. So I would tell you that I don’t know that we’re locked into any answer, but we like the business that we run today. We’re pleased with the process that we’ve got in place. That doesn’t mean that we can’t change our mind, but we like what we’re doing today.
Broderick Preston: Got it, that’s all I have. Thank you very much for taking my questions everyone. I appreciate it.
Chris Bagley: I go back Brody’s question on the NPAs. So yes, the increase, were two larger credits. But when you look at our total NPAs, the average is $398,000. I couldn’t do the math fast enough so.
James Rollins: So the average NPA is $398,000.
Chris Bagley: For that C&I book. For that C&I book. So I think it’s part of the — as the two companies came together, if you were a legacy BXS follower, we had a much smaller granular average loan balance. If you’re legacy Cadence, you’d see bigger numbers. I think that’s – the industrial logic of the company coming together, that’s part of the good side of the story. But yes, those two that we had this quarter were larger, but there’s also a granular component to that C&I book.
Broderick Preston: Got it, thank you for that.
Operator: Our next question here will come from Michael Rose with Raymond James. Please go ahead.
Michael Rose: Hi, good morning, everyone. Thanks for taking my questions. Most have been asked and answered, but I did notice that the AUM of the trust business was up 15% sequentially. Can you just give some color there? And obviously, the fees were up as well. Just any sort of outlook there would be helpful? Thanks.
James Rollins: Good to hear from me this morning, Michael. Good to talk. I think most of that is market driven. So you’ve seen the market bounce around. The team has done a good job of managing assets. Valerie, you want to add – jump in on that. We’re really proud of what our – we’ve got – remember, we’ve got our general trust team, and then part of the legacy Cadence was a registered investment adviser. Both sides of that business have done very well for us in the first quarter. Valerie?
Valerie Toalson: Yes no, I agree with what Dan said. The other thing I’d add is that there is a component of that that is a little bit cyclical in the custodial AUM piece that tends to be a little higher at the end of the first quarter. And so, some of that is factored in, some of the market impact and then some net inflows from customers, just like many customers thought or many banks thought some of the fund flow out of their deposits into some of their investment funds. We saw a little bit of that as well, and that helpfully some of that.
Chris Bagley: Yes, that’s a good point. Some of the – some of our own deposits migrated there as we were bringing some other deposits, and we’ve had some nice wins. And it’s nice to have that in our toolkit to be able to help our clients.
Valerie Toalson: Exactly.
Michael Rose: Understood appreciate the color. Maybe just kind of one final one for me, I think we’ve gone over the deposit beta piece a fair amount here. But just on the loan beta side, obviously, that’s had a nice progression as well. And it does seem like given where your loan to deposit ratio is, you had a little bit more capacity than maybe some other banks out there. But any sort of venture as to what the loan – the cumulative loan beta expectation could be? Thanks.
James Rollins: I won’t speak to the beta. I’ll let Valerie do that, because she’s got the calculator in front of her. One of the things we’ve talked about and haven’t come up yet this morning, we’ve talked about it now for multiple quarters going back is higher for longer is a benefit for us, the way the balance sheet is set up. And so, we continue – to believe that that’s the case for us. Valerie, you want to talk specifically about the beta?
Valerie Toalson: Yes. So, we’ve been fairly consistent in the past couple of quarters as you’ve seen on the quarterly beta. And a lot of that is driven by not only the new loan growth that we’ve had, that’s been nice in that quarter, but also repricing. And so it wouldn’t – we expect that it will actually maintain some similarity there as long as there are rate increases. And then even after there are rate increases, we expect that the loan repricing will come into play. And we’ve got a slide on that on Slide 14 that shows the timing of some of that loan repricing. There’s good amount of 43%, but actually reprices in the next 13 – or I’m sorry, three months, $13 billion that reprices in the next 3 months that’ll obviously help support that specifically over the near term.
Michael Rose: Okay, that’s helpful, that’s it from me. Thanks.
James Rollins: Thank you, Michael.
Operator: And that concludes our question-and-answer session. I’d like to turn the conference back over to Dan Rollins for any closing remarks.
James Rollins: All right. Thank you, everyone, again for your questions and participation today. In closing, I would just like to reiterate that despite the industry uncertainty regarding rates and the broader economic outlook, we remain very optimistic as we look to the remainder of 2023. We have a very granular, stable core deposit franchise, a diverse loan portfolio, strong allowance for credit loss coverage and additional the diversity of the various fee businesses that further, differentiate us from our peers. Thank you all again for your joining us today. We look forward to speaking with you all again very soon.
Operator: The conference has now concluded. Thank you very much for attending today’s presentation. You may now disconnect your lines.
