Tim Schools: Yes, it’s a great question. We actually had an investor last quarter, say, “Hey, gosh, your DDA has really declined a lot.” And for CapStar, you have to look under the covers because that comment was not accurate. I can see where the question would come from. But our incremental funding at the last 12 months has really been brokered CDs. So, when you look at the current total deposit mix today, you’ve got $400 million to $450 million of CDs that you didn’t have in the mix in 2019. So, I can send you a chart, if you take the time to normalize, excluding brokered CDs, the percentage of DDA is actually the same. It was 19% of funding before, and it’s 19% of deposits today, it’s identical. I would say, at CapStar, probably wasn’t — what was transparent before is when you went pre-pandemic, rates were really low.
A lot of those DDAs were related to correspondent banking and they needed to hold those — they had high-priced money markets with us and they needed to hold a certain amount of DDA to cover their Fed charges. Now that rates are higher and ECR earnings credit rates are higher, they need to hold less DDA today to cover their fees. So, I would actually argue that our DDA, while it’s the same percentage of 19 and 19, it’s actually stronger, because we would have less correspondent-related DDA because some of it would have moved out with the higher ECR, but we can send you this chart. But it’s a great question, because on the surface, if one didn’t know that CapStar had funded with brokered CDs over the last year, you would think, “Wow, what happened with the mix shift of DDA?” But the actual dollar balances as a percent of the total are holding flat.
Mike Fowler: Yes, Kevin, this is Mike. One thing I would add briefly, Kevin, is that with the Fed expected to be near the end of its hiking cycle, I think, to Tim’s point, some of the pressure that we and the industry will feel on the shift out of noninterest-bearing DDA should subside. So, we certainly hope and especially with the focus on core operating accounts and customer deposits, we certainly see pressure there easing. So hopefully, we will be near the trough. And as Tim said, we’re back to the 19% of non-broker deposits we saw pre-pandemic when Fed fund was at 25% versus 5.25% today.
Tim Schools: So you would think a lot more people are chasing 5.25% today than they were a quarter back then. So, I think it’s good that the number is the same and a much higher rate environment. But the brokered CDs, when you throw that in, makes it look like the percentage went down.
Kevin Fitzsimmons: That’s a great point. Thank you for clarifying all that, Tim. Great. Thank you.
Tim Schools: Thank you for asking.
Operator: Thank you. Our next question comes from the line of Feddie Strickland with Janney Montgomery Scott. Your line is now open.
Feddie Strickland: Hey, good morning, everybody.
Tim Schools: Hi, Feddie.
Feddie Strickland: Just wondering if you could provide the expense number for the mortgage division or the bank expenses ex mortgage. And then along that same line, does some of the cost saves come from the mortgage side? I apologize if you covered that earlier. We were just trying to think through the expense line for that division.
Tim Schools: Yes. I don’t want to get into specific areas, but I’m sure there are some from them, really every department across — every department in the company contributed. So, I’m confident there’ll be some there. But maybe Chris could speak up as to what the bank — excuse me, what the mortgage division expenses were in second quarter?
