And that’s what we’re really keep on our eye on the most is making sure that we’re offering our customers a square deal.
Phil Green: Brandon, you probably know better than I do. But I mean, money market funds are probably going to be – they’re going to be buying a lot of the market instruments, and those things are going to be going down pretty consistent with declines in rates at least on the short end. So I think it’s partly our expectation that their movement in rates will be sort of inexorable and there were a lot of competition is right now anyway. So that will give us some ability to compete better against those particular products. And I think as Jerry said, if we’re competing straight up against the bank, we’ll compete pretty well just being close on rate. It won’t have to be the highest in the market.
Brandon King: Got it. And that’s helpful. And then I wanted to give more insight into your marketing plan and brand refresh. So what are the things that you’re planning to do in 2024 that you weren’t doing in 2023? And then could you talk about kind of the potential and scale of what you could envision that looking like maybe beyond 2024?
Phil Green: Well, as it relates to the marketing plan, we’ve really focused on just the look and feel of our brand, how it looks in the marketplace and trying to differentiate it from sort of the CS sameness that’s out there and really trying to reduce the – for sure, the lack of awareness about our brand. And if you are aware, we really want to reduce indifference to the brand. And so we’re trying to utilize things that just visually help us there. We’re also – we put out some new ads that sort of reflect who we are and some of the amazing stories of customer service that we’re going to have, and we do that with a little bit of humor in a link that’s typical to Frost Bank. And – so I think the campaign that way is going to be really good.
But if you look at it under the hood, I think we’ve done a lot better job. I know we have bringing in partners that are helping us to a better job with digital marketing and ineffectiveness in our digital offerings. And really, that even translates into some of the direct mail pieces that we do and a lot of that in connection with some of these branches that we’re opening in these new markets, making sure that our response rates on that are improving. So we’ve seen some interesting results in that with our new partners, and I expect that to be something that helps drive customer acquisition going forward. So we’ll see, right? It’s – I’ve learned everyone is a marketing expert. We’ll see if this one works.
Brandon King: Got it. Yes. I was just trying to get a sense of this is not kind of a Herculean effort and just kind of more incremental on the margins.
Phil Green: No, I don’t think so. I think it’s – we’ve built our infrastructure in terms of our internal marketing resources and capabilities. So that is something that was a part – really a part of what the expense base growth was last year by and large, there will be some follow-on as those things annualize to a full year in 2024. But a lot of it is just utilizing the market spend that we have been spending, but do it in a more effective way. So – but it’s not the same level of the – I go back to the generational investment that we did in IT, it’s generational for marketing, but it’s not the same size of that investment as IT was.
Brandon King: Great. Thanks for taking my questions.
Phil Green: Thank you.
Operator: [Operator Instructions] Our next question is from John Pancari with Evercore ISI. John, your line is live. Okay. And our next question will be from Brody Preston with UBS. Please proceed.
Brody Preston: Hey, everyone. I’m going to wrap a few into my one here, if you don’t mind. They’re all on NII, Jerry. So you make it easier. I know you’re relying a little bit more on the average than you are at the period end. But if I am working on the period end, it looks like the loans and the deposits should kind of – the deposits should fund the loans and then you’re going to reinvest half of the $3 billion. So you got about $1.5 billion of cash flows left over from the securities book naturally. I’m wondering if that’s going to go into just kind of pushing off the remaining repurchase agreements that you have on board? And then Secondly, I was wondering if you all would provide us with what the period-end savings and interest-bearing checking and money market accounts look like just because it’s a little over a week until we get the K, and we’ve got to update models in the interim there.
Jerry Salinas: Yes. You’re saying just the period-end rates?
Brody Preston: No, the period-end balances.
Jerry Salinas: Oh, the period-end balances. Yes, we can get them here for you. But – and if we don’t get them to you, A.B. can certainly give those to you off-line if you want to do that.
Brody Preston: Okay.
Jerry Salinas: I’m sorry, I forgot your first question that you…
Brody Preston: That’s okay.
Jerry Salinas: What are you trying to get at? I’m sorry.
Brody Preston: I was saying if I look at the guidance and look at like the implied period and I know you’re relying more on the averages, I’m wondering, it looks like the deposits can fund the loan growth that you got. I’m wondering what you’re going to do with the additional $1.5 billion?
Jerry Salinas: Yes. I’ll start Yes, I’m sorry. I apologize. Yes.
Brody Preston: That’s okay.
Jerry Salinas: So you mentioned repo. So for us, customer repos is really – these customers, for the most part, are really long-term customers, and there is a feature within that product that we make available to them that allows them to utilize the product. And so even though it’s fully collateralized, they do take a haircut versus the respective MMA rate. And we may do a little bit of exception pricing there. But for the most part, it’s really a very successful product for us there are some transactional pieces of it that work to their benefit, and they want to be in that product. But this isn’t hot money in any way. These are long-term customers. A lot of them have other – have deposit relationships as well, significant deposit relationships. So from our end, we’ve got a significant amount of collateral. It really – it’s a good operating business for us, and we don’t have any intention of reducing that sort of a product.
