Chris Bagley: I think I would agree with that across the whole bank. I mean the difference in what we consider our secret sauce is the relationship bankers in the field. So we’ve got great bankers across our complete footprint and they’re in those communities. They know the clients that have opportunities to go deposits and they’re out there calling on them and everybody is focused on deposits 100%.
Dan Rollins: Yes. That’s executive management all the way down. Some of our executive management team is not asking for deposits from customers all the time. So it works all the way up and down the line.
Brandon King: And just given the success you’ve seen this quarter, how does that inform your expectations for the deposit mix next year, particularly when we talk about noninterest-bearing deposits?
Dan Rollins: Well, I think we’ve been pretty open on our forward look on noninterest-bearing deposits dollar. You’ve got numbers we’ve been talking about for some time as we model out where we’re going.
Valerie Toalson: Yes. So given the slowed pace that we saw this quarter, we are projecting that to probably be just a little south of 20% by the end of next year. That’s just what’s in our modeling. That’s based on an assumption that there continues to be significant deposit pressure in the industry based on some of the macro environmental factors. But that’s what we’re modeling out today on a gradual pace.
Brandon King: And is that assuming rates stay stable next year at points?
Valerie Toalson: We are projecting some declines in the latter half of next year based on the forward curves. We primarily rely on the forward curves for use in our modeling.
Operator: The next question comes from Stephen Scouten with Piper Sandler.
Stephen Scouten: So, I just wanted to — I guess, some clarity on the expenses, flat expenses sounded like a goal or a target but I don’t want to misconstrue that. And then is the best way to think about that, just stripping the $140 million out from the insurance business and thinking about that basis is flat year-over-year?
Dan Rollins: I think that’s a good way to do that. Yes, the expense drive to hold expenses flat is excluding insurance. So yes, I think that’s a good way to look at that. Valerie, do you want to tag in?
Valerie Toalson: Yes. I think you said it well. Looking at our adjusted expenses for 2023. We’ll be working hard to keep those flat 2024. And again, excluding insurance and all that.
Stephen Scouten: And then my only other question is around franchise finance lending. Another bank that I consider somewhat of a peer had maybe a little bit of a weakness or took up reserves around that business. I’m just curious if you’re seeing any degradation in your book or anything that gives you pause around that segment of the business?
Dan Rollins: Hank?
Hank Holmes: Well, typically, when you have that industry, it’s a little higher leverage. And certainly, with interest rates moving where they were, we have seen some pressure. I think they’ve worked through most of their issues as far as expense and are able to also increase some pricing. But yes, we have seen some pressure in that area of the bank.
Stephen Scouten: Any major changes in the reserves related to those loans, I guess, accordingly?
Hank Holmes: No material change in those reserves. Just going through our process that we indicated earlier, we’re active in looking at them and where we need to increase reserves we’re doing that throughout the bank.
