Jon Arfstrom: Okay. All right. Thanks, guys, for the help.
Archie Brown: Thanks, Jon.
Operator: [Operator Instructions] Our next question comes from the line of Alex Twerdahl with Piper Sandler. Please go ahead.
Alex Twerdahl: Thanks. Good morning, guys.
Archie Brown: Hey, Alex.
Alex Twerdahl: Just wanted to go back to the loan growth guide. I think that ten to 12% in the near term that makes sense given that ramp-up that you talked about with Agile and some of the other pieces contributing in the second quarter. But I mean, is that sustainable into the back half of the year, or do you think that there’s going to be maybe as rates remain high, maybe that cools down a little bit in the third and fourth quarter?
Archie Brown: Yes, Alex, it’s a little harder to tell. Our pipelines coming into the quarter were — they were ramping up in Q1. They’re healthy and they’re remaining pretty strong and stable. We can look out into the middle of the year and feel pretty good. Just a little murkier. If I’m handicapping, I would tell you it’s probably, it feels like it may be just a little bit lighter than that 10% to 12% annualized rate that we are talking about right now when you get to the back half.
Alex Twerdahl: Yes, that makes sense. Not a lot of banks projecting that pace of loan growth at all this year, so. I guess like going to the NIM with the Agile loans coming on with the 9% plus the securities restructuring, some of the other dynamics. Kind of, I guess a little surprised to see that amount of NIM compression still expected for the second quarter. So are there some — is it really just the funding, just like some higher tranches of borrowings may be repricing during the quarter or maybe talk about really what’s driving that, that level of compression in the second quarter still?
Jamie Anderson: Yes. Alex, it’s Jamie. So, yes, it’s really the funding side that’s driving all of that still. And really what we are seeing is just that continued mix shift on the deposit side, you know, the dollars moving out of, you know, the lower cost buckets into the money market and CD specials. And that just continues to drive up the — we were starting to see that mitigate some in the back half of the first quarter, but we still see some of that going on in the second quarter and that’s just driving the cost up. We’re seeing dollars continue to move out slowly still in our business DDA balances and the average balance of those accounts are still higher than what they were historically. So we are still seeing some dollars move out of there and we’re replacing those dollars with CDs and money market accounts.
So it’s just driven — that’s just driving up the funding. And so yes, we get a little bit of benefit from the asset yields. I mean obviously Agile helps. It’s just a small couple hundred million on the loan base. It obviously helps, but it’s not enough here in the very near term to offset the — offset that funding pressure that we are seeing. But we expect that funding pressure again, another quarter of that with maybe a little still some of it in the third quarter, but not as much as the second quarter, and we just see that the deposit costs start to stabilize again absent any rate cuts.
Alex Twerdahl: Okay. Appreciate that color. And then as you think about the Agile and I guess really more broad term for the specialty finance businesses, I got to think that their funding costs are getting pressured even more than banks. And I’m just curious, have you seen an increase in these types of deals? Like how many would you typically look at in any given year. And is that some of these specialty finance-type transactions, are they going to be, I guess, should we expect them to be part of the overall growth strategy for ‘24, beyond the Agile acquisition?
Archie Brown: Yes. Alex, it’s Archie. I’ll discuss it. We do — I think because we have acquired several specialty companies we are higher on, I’m going to use the whole term, the Rolodex of bankers that are calling around for different companies. But we really never responded to those. Everything that we’ve really acquired has been in a way based on some relationships we have or a network we have with people. So we are really not out looking for more. I would tell you certainly in the wealth space if we ever found something that makes sense and the pricing could be rationalized, right, we would consider something like that. But we are not really out looking for more specialty companies. This was a — it came in through some connections we had, and we really liked what this business looked like in terms of, again, the diversity, the yields, the complements, commercial banking, the granularity.
We liked all that. So, yes, and it’s a Chicago company, and that’s, you know, right here, not far, and we’ve got other presence in the Chicago area. So not looking for more, but it fits in the pattern of the things we’ve acquired over recent years.
Alex Twerdahl: Great. Appreciate all the additional color. Thanks for taking my questions.
Archie Brown: Thanks, Alex. Have a good day.
Operator: That concludes our Q&A session. I will now turn the conference over to Archie Brown for closing remarks.
Archie Brown: Well, thank you for joining us on today’s call and following along with us for a quarter. We look forward to talking to you again next quarter. Have a great weekend. Bye now.
Operator: This concludes today’s conference call. You may now disconnect.
