Valerie Toalson: Yes, I was just going to share that of that line utilization, it did tick up a little bit this quarter, but if you drill it down to the detail, it’s really all coming from our construction portfolio, which is typical for that. That’s the nature of that as it will fund up. So, that’s really what’s driving that. The rest of the portfolio is fairly stable.
Casey Haire: Got it. Thanks for the color. And then just lastly, switching to capital. The buyback, you guys bottom-ticked it, which is the good news. But you didn’t use a ton of the authorization. I guess my takeaway, it feels like the share buyback is going to be pretty price-sensitive and you’re not necessarily going to utilize authorization despite a very strong CET1 ratio. Is that fair?
Dan Rollins: I think that’s fair. I think we want to be price-sensitive. We want to be opportunistic in what we’re doing. That’s what we’ve done in the past with our buyback. And so we’re prepared to take action and we do.
Casey Haire: Okay. Thank you.
Dan Rollins: Thank you, Casey.
Operator: The next question is from Catherine Mealor with KBW. Please go ahead.
Catherine Mealor: Thanks. Good morning.
Dan Rollins: Hey, good morning Catherine.
Catherine Mealor: A couple of follow-ups on the margin. First, Valerie, on loan yields, they were only up about 3 basis points this quarter. Is it fair to say that with just your outlook for fixed rate repricing, that should that should move higher on a kind of per quarter basis over the rest of the year? Or was there anything kind of this quarter that limited that expansion?
Valerie Toalson: Yes, there were some higher loan fees in the fourth quarter that impacted that quarter-over-quarter variance by probably 3 basis points. So, that — otherwise, it would have been closer to a 6 basis point improvement. The other factor driving it was some of the timing of the loans that came on the books were a little bit later in the quarter. So, those were the two factors. We do anticipate that some of the re-pricings combined with the continued loan growth will have a more positive impact on those loan yields as we look into the next quarter.
Catherine Mealor: Okay, that’s great. And then, how about on cost of deposits, do you feel like you’re nearing a peak for that — and maybe if you could talk about some of the kind of trends in both the non-interest-bearing balances and maybe cost of deposits towards the end of the quarter that may help us? Thanks.
Valerie Toalson: Yes. So, we — this quarter was absolutely the slowest quarter that we have seen on that cost-to-deposit increase and it was really driven by mix shift versus inherent cost increases, if you will. In fact, we’re able tweak some of those on the softer side that helps balance that out. As we look forward, assuming where the rate — and again, for all our assumptions we’re using the forward curve as of March 31st, that would assume really kind of an end of the second quarter, beginning of the third quarter peak in deposit costs, but again, expecting the stability of those to be much more manageable than obviously what any of us saw last year. We are continuing to see solid growth in our CD portfolio. One interesting fact is that we have not only the new CDs that come into that, but the rollover impact and the rollover CDs are actually coming on at a slightly — or the combined new and rollover CDs are coming on to the books about 10, 15 basis points lower than they were in the fourth quarter.
So, that’s a positive for us on the margin as well.
Dan Rollins: Is that what you’re looking for?
Catherine Mealor: Yes, that’s perfect. Thank you.
Dan Rollins: Thank you, Catherine.
Operator: The next question is from Michael Rose with Raymond James. Please go ahead.
Michael Rose: Hey, good morning everyone. Thanks for taking my questions. I just want to ask one on credit, I know you guys have had some continued upward migration in criticized and classified, not surprised everybody has seen it, but I think you guys have been pretty conservative in kind of classifying those credits. So, can we just get some color there? And then maybe what drove the sequential increase? Thanks.
Dan Rollins: Yes, I’d start with jumping here, Chris. I would start with the criticized. Criticized is actually down year-over-year. So, the criticized loans have been basically flat for now a year when you’re looking within those criticized categories, we’ve got migration moving within there. Chris?
Chris Bagley: I agree. So, we had what, a 4 bp increase for the quarter, but it has been flat. So, those loans that we’ve identified over the cycle over the last year, nine months, those are what have migrated into the non-performing group that we continue to work. Team has doing a great job, early identification, early actions. So, we’re — we’ve got traction there. If you look at the quarter, the increase in non-performing interesting when you look through there — of the $20 million, $24 million and increase, $10 million of that was guaranteed SBA loans. So, it’s pretty granular. It was one large credit, but it was really a granular move and what I would call feels a little slowing from a non-performing migration and so that collection cycle to get through those, we’re working really hard to work on going forward.
Michael Rose: Very, very helpful. And maybe just as a follow-up question, just on expenses. You guys have — after a choppy last year and timing with the MOE and everything, it seems like expenses are kind of well controlled. Is there any opportunity to kind of ramp up the investment spend as we kind of move through the year, just maybe given some of pullback from some of your competitors maybe be opportunistic things like that? And then to the extent that you guys can talk about next year, would we expect a more normalized rate of expense growth, just given the impacts of inflation, higher for longer kind of et cetera? Thanks.
