Billy Braddock: Yes, that’s fair statement. Corporate banking pricing environment has been stable. For the highest quality and the highest I’d say, house account, full wallet, larger corporate deals, those have started to get more competitive, primarily in price, but structures have held in solid. Our non-bank competitors are continuing to take the higher-risk deals. The banks have stayed disciplined in that market and for the most part, stayed away from those high leveraged sponsor-backed buyout deals.
Stephen Scouten: Got it, very helpful. Thanks for the time this morning.
Dan Rollins: I appreciate it. Thank you.
Operator: The next question is from Matt Olney with Stephens. Please go ahead.
Dan Rollins: Good morning Matt.
Matt Olney: Thanks. Good morning everybody. Going back to the non-interest-bearing deposit discussion and the guidance of 20% by year-end, is there anything that’s structural that would make Cadence more vulnerable to continue NIB headwinds?
Dan Rollins: No.
Valerie Toalson: No, not at all. Maybe a conservative treasury.
Dan Rollins: I just think we want to be realistic about what’s happening. We’re continuing to see customers migrate and I think we want to be realistic.
Valerie Toalson: Exactly right. There’s absolutely nothing structurally different about our deposit base. In fact, we were so community-driven that you might even say that it’s a better structure.
Dan Rollins: Yes, I like where we sit today with our deposit base and our branch network, the community bank that we’re driving, the digital capabilities that we have today, I think we’re in really good shape.
Matt Olney: Okay, appreciate that. And Dan I guess, on the O&I earning assets, remind me what you consider your excess liquidity position. I think the average position for O&I was a little over $3 billion, but end of the period, it was a little bit below that. How do you guys kind of view that longer term?
Valerie Toalson: Yes, longer term, it’s — we’d like to have it half of that at least. The reason we’re holding that in excess is we’ve got the bank term funding at 5% — or 4.67% and we’re investing that at 5.40%. So, we’re just getting a little bit of incremental spread on that for the time being.
Dan Rollins: That runs through next January-ish.
Valerie Toalson: Exactly.
Matt Olney: Okay. So, Val, you expect these current levels to remain elevated through the end of the year into early next year?
Valerie Toalson: As long as rates hold where they are, if the benefit of holding that decline to a certain point, then we’ll pay it down.
Dan Rollins: We could use that in the loan book.
Valerie Toalson: Yes, absolutely.
Matt Olney: Perfect. Okay. Thanks everybody.
Dan Rollins: Thank you, Matt.
Operator: [Operator Instructions] The next question is from Gary Tenner with D.A. Davidson. Please go ahead.
Dan Rollins: Hey Gary, good to hear from you.
Ahmad Hasan: Hey, this is Ahmad Hasan on for Gary Tenner.
Dan Rollins: Okay. Good morning.
Ahmad Hasan: So, I know you touched a little bit on credit side. NPA sticked little bit, but you said it was mostly because of that one SBA loan. But are there any sectors that you’re seeing weakness in?
Dan Rollins: No, not really. We’re not seeing any trends, any themes, any geographies, any types. It’s really just normalization of credit issues. Billy, Chris jump in here.
Chris Bagley: Yes, I’ll let Billy jump in. You see it on Slide 9. It’s not a CRE story. So, the CRE has held up really well. It’s been more of a C&I story and the SBA loan we referenced wasn’t one SBA Loan. It’s a lot of SBA loans. So, we have seen some migration in the SBA book. If you look through, I think $60 million of that non-performing, Valerie mentioned, our government-guaranteed loan, the collection cycle and the application process to get paid on those. The — it’s just lengthy, that’s what it is. And through this cycle, you saw some increased non-performing there and part of our numbers are working through those small granular moves in the SBA book.
Billy Braddock: Yes, like we’ve said in recent handful of quarters. The only sector we’ve seen any consistency in where there’s a little bit to point to would be rest are on, and I would say that continues. And then across the sector, we’re hearing this, it’s the kind of senior assisted-living, seeing some signs of stress continuing, but we’re starting to come out of that, it feels like. But it’s — those would be the only two sectors I would call out, but all manageable and all having been identified now for several quarters.
Ahmad Hasan: All right. Great, that’s good to hear. And maybe just one more on — I know you touched on loan growth even geographically, but within those high-growth markets, you talked about Georgia, Texas, what sectors are you guys more excited about?
Dan Rollins: Yes, we’re seeing growth in the C&I book. So it’s the corporate bankers. It’s Florida our Tampa team is doing a great job. Our Atlanta team is doing a good job. Our Nashville team is doing a great job. Houston, Dallas, Austin, Fort Worth, we’ve got great bankers in those high-growth markets, and we’re winning business. It’s not any individual segment, we’re just seeing good opportunities there.
Ahmad Hasan: Great. Thank you for taking my questions.
Dan Rollins: I appreciate very much. Thank you.
Operator: The next question is a follow-up from Matt Olney with Stephens. Please go ahead.
Matt Olney: Hey guys. I don’t think anybody asked about fees this quarter. Any color on the fees, I know it was not easy last quarter. It looks like a clean run rate to me, but any color on the fees in the first quarter and the outlook here?
Valerie Toalson: Yes. No, we’re really pleased with our fee performance and your structure of the — or your characterization of that as being kind of routine is absolutely spot on. There was nothing that was abnormal that showed up in those numbers. The resurgence of service charges from — compared to the prior quarter was because of the accrual that we made in the fourth quarter. Mortgage had a nice quarter, seeing some impact, both in the production and the servicing as well as the MSR valuation.
Dan Rollins: Wealth management is doing well.
