Dan Rollins: Yes, I think we’re constantly looking for ways to cut cost. But we’re also looking for ways to invest in ourselves. We need to continue to invest in our business, whether that’s investing in our people, whether that’s investing in the technology that we’re using. We’ve got a pretty robust process that we’re working through today. I think we’re seeing the benefits of the work that we’ve been doing, as you said, over the last multiple years, this was just a clean quarter and so you get to see it all. Valerie?
Valerie Toalson: Yes, I would just add that inherent within our guidance for expenses in 2024 is a reinvestment or a continued investment, I would say, in our technology and our people. From an opportunistic hiring, that really is market-by-market and business-by-business. And if there are key opportunities where we believe that we’ve got a niche that we can further strengthen or fill in that perhaps were not in before, absolutely, we’re going to take a look at those opportunities.
Dan Rollins: Yes, we’ve also–
Michael Rose: Okay. Thank you.
Dan Rollins: Sounds good.
Michael Rose: Thanks guys.
Operator: The next question is from Brandon King with Truist. Please go ahead.
Brandon King: Hey, good morning.
Dan Rollins: Good morning Brandon.
Brandon King: So, with updated forward curve, could you give us the thoughts on where you see non-interest-bearing deposits trending from here and kind of where do you see that mix shift standing that by the end of the year?
Dan Rollins: Our modeling hasn’t changed much. We may be a little more aggressive than others. Go ahead, Valerie.
Valerie Toalson: Sure, we actually have that mix going to about 20% non-interest-bearing deposits to total deposits by the end of the year with just a gradual decline between here and there.
Brandon King: Okay. And just are you seeing some more stabilization in some of your commercial depositors accounts?
Valerie Toalson: Yes, I think the biggest volatility that we’ve seen has really just been in public funds. And so the corporate accounts, that volatility was really this time last year. For the most part, there’s some seasonality with bonus payments and some of the things like that, that you’ll see in corporate customers from time-to-time. But overall, a good solid performance there.
Dan Rollins: Yes, I think the deposits as a whole. I don’t know that we’re seeing a whole lot of disruption, it’s just normal customer business. The fact that rates are up 500 basis points in the last year, there are still customers that are waking up and realizing I don’t want to miss some of that. And so you’re seeing customers continue to make decisions. I’ve said for a while that I think the first time we get close to a rate drop, I think that wakes people up. And so I think you can see people react to that first rate drop by taking advantage of the rates that are there, they don’t want to get left behind. So, I think we’ve still got the same normal behavior that we’ve been expecting in deposits. And the ability to have our 300-plus branches across our footprint, along with the digital capacity and capabilities that we’re building out, I think we’ve still got great opportunities to continue to grow core deposits.
Brandon King: Okay. And then lastly, what’s the outlook for mortgage year — are you looking to maybe sell some more loans in the secondary market or portfolio some and then kind of what you’re seeing within your customer base?
Dan Rollins: Yes, the inverted yield curve continues to create havoc on the secondary market in the mortgage book. Go ahead, Valerie.
Valerie Toalson: Yes, so the — I think the biggest challenge in the mortgage area is on the rates, although I think consumers are starting to digest that, that’s what it’s going to take to get a mortgage. But the lack of inventory is people are holding on to their lower interest rates and there’s just not a lot of inventory that’s causing a lot of movement there. We are starting to see the spring pickup that we typically see and anticipate that to continue. And other than that, our volumes are fairly consistent with where they were last year, but we do see some opportunities as we go forward. We’re not doing much at all on the refi side and we are selling more than we’re portfolioing, but there is a nice mix there for both.
Dan Rollins: And what’s coming on in the portfolio is the ARM product.
Valerie Toalson: Yes.
Chris Bagley: And I’d just add to that, the lack of inventory is given — we’ve got a construction to perm product that I think plays well into that. So, we’re getting some nice pickups there.
Brandon King: Okay. Thanks for taking my questions.
Dan Rollins: Hey, thank you, Brandon.
Operator: The next question is from Stephen Scouten with Piper Sandler. Please go ahead.
Dan Rollins: Stephen, good morning.
Stephen Scouten: Thanks. Good morning. I just want to confirm you were saying 20% on non-interest-bearing, which does seem extremely conservative. So, presumably, if that’s in your guide, if that, say, shook out at 20%, 21%, 22%? Or if there was upside there, there would also be upside to your overall NII guide and revenue guide?
Valerie Toalson: Yes, that’s exactly right. That is factored into our modeling and our guide.
Stephen Scouten: Okay, perfect. Appreciate the clarification. And just from a competitive perspective, what are you seeing in terms of loan demand like — and how playing new loan yields. Do you feel like that competitive environment is changing in any material way, especially as you know, 20% and 21% vintages of loans presumably are repricing from what I would assume as the lowest rate on your loan — on your book moving forward? Just kind of wondering how that’s playing out?
Dan Rollins: I think there’s always competition in the loan book. And again, depending upon the market, depending upon who the competition is coming from we play across the rural South, we play in major metropolitan markets, and we see different competitors in those markets and they all behave a little bit differently. We’re certainly seeing some competition on the community bank side on smaller business credits where banks are willing to take some of those credits at rates that we’ve not played in. On the other hand, I think on the corporate side, it’s been much more stable. Billy?
