Michael Rose: Just if you could size the opportunities moving forward, because you did sound fairly optimistic going forward. And then as you layer in mortgage, consumer mortgage, I know the market is not great, but you’re in Texas just trying to get a sense for what the growth opportunity is. And I think that home equity consumer line is about 12.5% of the portfolio. Just where do you think that could get to over time? Thanks.
Phillip Green: Yeah. Well, the mortgage portfolio is a great asset class for us. I think over time, this is back a year ago when we started talking about it, I think we said – I can’t remember exactly what we said it. But the impression we wanted to give you was that, “Hey, this could be mortgage itself over time could be what the consumer real estate portfolio was at that time, just by itself.” And so, we still think it’s good. This is a long-term product, a long-term relationship, so we feel really good about it. And, remember, we’re not doing a refi program, so I don’t care that the refi market’s down. In fact, I love it, because it’s allowed us to get, I don’t know, what 90 people or so that we were able to bring in great mortgage professionals to build that infrastructure over the last year.
So we’re all about putting people in homes and that’s, I think, we’re going to have a chance to do that for a long time. I think that I saw a number, Michael, at the percentage of people that had, what was it, a 3% mortgage was like over 60%. It was amazing. And if you looked at the people that had under, “Hey, was it 5?” It’s like 90%-something of the mortgage is so, if you want to, I mean, people are not moving, right? And so, I think that this home equity product has got legs, this home improvement product has got legs for a while. The rate of growth has been so high, 20s, mid-20s sometimes. I think that just by its nature, the law of numbers, it has to go down in terms of percentage, but I still think the volume should be pretty good, because it just fills a gap that people need right now.
Michael Rose: Great. I appreciate the color. And just one final for me, so I guess, the potential problem loans were up, about 16% QonQ, any notable trends in there, anything to read in that, or just more kind of normalization of credit off of a very low base? Thanks.
Phillip Green: Yeah, the numbers I’ve looked at were the – I think where I saw the change was in the risk-grade 10s. Really, there are about, I think there were 4 credits that made up the vast majority of that, and they were like different businesses. There are a couple of real estate properties, actually, they were smaller office buildings, they had kind of idiosyncratic things, and we don’t feel that bad about them. But we felt – remember, this is OAEM. This is a lighter classification. And then there was something a midstream energy trading company that it’s just a business kind of thing. I mean, we find a thing, and then we got…
Jerry Salinas: What was the other one?
Phillip Green: Oh, I think it was a buy here, pay here outfit, I think that’s what that was. And so kind of an interest-sensitive business, we’ve seen some of that. That was the kind of thing. It didn’t give me a lot of heartburn. It’s just reflective of the environment we’re in. But I didn’t think it said anything in particular about how we’re doing. We’re doing things. In fact, I think it shows we were doing our business pretty well. And then, again, I’ve said since the beginning of this that it’s a risk business, and when we see some hiccups here and there, of course we will. But I feel really good about how we’ve done things. I feel really good about the customers, not every one of them has performed like we want, but most of them have. And I feel pretty comfortable with it.
Michael Rose: Great. I appreciate the color. Thanks.
Phillip Green: Okay.
Operator: And our final question is from Brody Preston with UBS. Please proceed.
Brody Preston: Hello, everyone.
Phillip Green: Hello.
Jerry Salinas: Hey.
Brody Preston: I wanted to follow-up on office, I was wondering if you happen to have what the reserve against the office portfolio is and how do you think about that moving forward just given some of the larger banks are putting up pretty hefty reserves against their office portfolios.
Jerry Salinas: I’m looking at what I’ve got. I’ve only got the commercial real estate as a group. I’m looking at, Brody, I don’t have the office, but certainly I think that number if I’m looking at this correctly here is 1.45 on all commercial real estate. Certainly, if you get with A.B., we can certainly provide you that detail. I don’t think I’ve got it here in front of me.
Brody Preston: Okay. Great. I’ll follow up…
Phillip Green: Hey, I will say that I’m not going to do anything just because the large banks are doing something, just sort of you know.
Brody Preston: Got it. I did also – Jerry, I’m sorry to go back to expenses and be the…
Jerry Salinas: Hey, Brody, so I’m getting a chat real quick. It’s saying that our reserve is 2.2% on office.
Brody Preston: Okay. Great. Thank you very much for that.
Jerry Salinas: Sure.
Brody Preston: I did just want to touch on expenses. A couple of quarters ago you said you thought like a long-term kind of expense growth rate for the bank as high-single-digits. I just wanted to ask like would it be fair to say that Austin, the Austin build out will be mildly additive to that kind of long-term growth rate, when you think about planning for next year?
Jerry Salinas: I think that the way we tend to look at it is and, again, it’s going to be dependent on how big an expansion we really typically would originate. But when I gave that sort of guidance that was inclusive, would be inclusive of what we were doing.
Brody Preston: Okay. Got it. That’s helpful. And then the last one that I had was, I’m sorry if you said it earlier and I missed it, do you happen to have for the fixed rate portion of loan portfolio, what’s coming due over the next 12 months and what the yield pickup on that would be?
Phillip Green: No, I don’t think I’ve got that handy with me, Brody, but again I think that’s something certainly, maybe you can get it to you.
Brody Preston: Okay. Maybe if I can ask one more.
Phillip Green: Sure, of course.
Brody Preston: Do you happen to have what the percent of the portfolio that SNCs [ph] is?
