Andrew Terrell : Great. I really appreciate all the color there, Scott. And then last one for me. I know the customer service cost expense can be a little difficult to model sometimes. Just hoping you can help us out with maybe what you’re expecting in terms of customer service cost expense in the fourth quarter?
Scott Kavanaugh : What I’ve tried to — I think we’ve said it in prior years, and this year, I don’t believe to be any different. There’s usually somewhere around 20%, 25% of those MSR deposits that tend to flow out due to taxes and insurance payments. So, largely, like California, tax payments are coming up mid-November. You’ll see a bulk of those deposits, which is what Jamie was talking about that tend to flow out. The fourth quarter typically has a decline in balances. The peak has ended in the third quarter. It’s still — I can tell you so far during the quarter, it’s held pretty steady. But I don’t believe this quarter is going to be any different in the sense that we should start to see seasonality pick up and some of those deposits be used for tax payments like I said. I would anticipate somewhere between 20% and 25% of those deposits to decline. And then, obviously, back in January, you’ll start to see those balances build again.
Andrew Terrell : Okay, great. Thank you for taking the question. I appreciate it.
Scott Kavanaugh: Yeah, you bet.
Operator: Your next question comes from the line of Adam Butler with Piper Sandler. Your line is now open.
Adam Butler : This is Adam on for Matthew Clark.
Scott Kavanaugh : Hi, Adam.
Adam Butler : I appreciate the commentary just now about the customers’ service costs. If I could just tag along on the total expense number, I appreciate the disclosure of average FTEs down right around 20% in the third, during the third quarter. Just to get a sense, what is your appetite to cut more expenses going forward given just some of the headwinds?
Jamie Britton : Well, we’ll continue to look for opportunities to drive efficiency for sure. We’ve already had three riffs, which as you can imagine, was pretty challenging, so we will continue to look for opportunities to reduce cost. But near term, I’d expect fourth quarter expenses ex customer service costs to remain at or around current levels from Q3. And then going forward, we’ll continue to pivot as we can, depending on what happens with the rate environment and the balance sheet going forward. But at this point, we have no plans to do any future riffs, but we’ll continue to focus on operating efficiency just as we always have. If you look at our non-interest expense as a percentage of average assets ex customer service costs relative to peer, we are a very efficient shop, and we pride ourselves on that, and we’ll continue to do everything we can to maintain that or improve it going forward.
Scott Kavanaugh : Yeah. Adam, I would just add, as you can imagine with three riffs and as many layoffs that were experienced, as Jamie said, it was extremely tough. But that being said, we’re running about as efficiently as we can… [technical difficulty]
Operator: There are no further questions at this time. I turn the call back to Scott Kavanaugh for closing remarks. Ladies and gentlemen, we are experiencing some technical difficulties. Please stand by. [Technical difficulty] Thank you for standing by. Chris, you may resume your conference.
Chris Naghibi : Andrew [ph], I don’t know if that answers your question. Are you still there? Essentially, the bottom line is that no more riffs and continue to improve cost efficiencies when and where we can. We’ve been looking pretty aggressively to look at everything across the platform from just a cost approach to make sure that we do the best we can. But that is going to be an ongoing process throughout the next year as much as it was for the first three quarters of this particular year.
Adam Butler : Okay. Can you guys hear me? I don’t know if —
Chris Naghibi : Yeah, I can hear you.
Adam Butler : Okay. Great. And then just moving on to — I don’t know if this is something that you would elaborate on, but in the reconciliation table you called out $250,000 in professional service costs. I was just trying to get a sense for what that was for, if you would provide some comments on it.
Chris Naghibi : Yeah. I’ll let Jamie speak to that when he gets back on. But it was $250,000, right? Yeah, so I’ll let him speak to that when he joins the call back with Scott, but I’m sure that he has some commentary and some color on it. I’m not 100% updated on it.
Jamie Britton : Sorry. I guess we got cut off somehow.
Chris Naghibi : There you go. Adam asked about the reconciliation table we have, there’s a $250,000 customer service cost, and he wanted to know if there’s any clarity we could provide.
Jamie Britton : What are you talking about?
Chris Naghibi : Professional services.
Jamie Britton : Give us just a second to get caught up. We were a little caught off guard that our phone somehow got cut off.
Scott Kavanaugh : It was related to driver.
Jamie Britton : It’s from the activist fees, Adam.
Adam Butler : Okay. Understood. And then just a housekeeping question. I was just wondering if you guys had a spot rate on either the interest-bearing or total cost of deposits as of the end of the quarter in September?
Jamie Britton : I do. The interest-bearing deposits averaged 4.03% in September.
Adam Butler : Okay, great. Those are all my questions. I appreciate the time. Thank you.
Jamie Britton : You bet.
Operator: Your next question comes from the line of Gary Tenner with D.A. Davidson. Your line is open.
Gary Tenner: Thanks, good morning, guys. I wanted to just ask a follow up on the customer service-related deposit costs. And I wonder if you could elaborate more specifically on the amount of deposits that are subject to those or that drive that cost and maybe confirm the percentage of those maybe made up of MSR-related deposits, if it’s not all of them.
Scott Kavanaugh : About $1.2 billion in total MSR deposits.
Gary Tenner: And does that — I mean, is there another — is that just a percentage of the total deposits that drive that line? Or is there something else in the mix as well?
Jamie Britton : Yeah, Gary, this is Jamie. We also have 1031 and other clients in —
Scott Kavanaugh : Title, escrow.
Jamie Britton : Yeah, and that’s another $400 million or $500 million.
Gary Tenner: Okay, great. Thank you. And then a question just on kind of the loan outlook as it relates to kind of the prospective runoff of multifamily say through 2024. Obviously, there’s planned or scheduled amortization, then there would be some payoffs. But assuming an 8% to 10% decline in that book through 2024, is that reasonable? Or is there a large delta plus or minus to that do you think?
Chris Naghibi : We are going to work as hard as we can to keep those relationships, migrate them to market rates as they reset over the next year or two or three. We’re hoping to expand relationships where we can as well to bring in operating accounts and other deposits. There could be some variability based on those efforts. But I think you’re generally in the ballpark of what we’d expect for runoff if they chose to refinance elsewhere as their rate resets come due.
Gary Tenner: Thanks very much.
Chris Naghibi : You bet.
Operator: This concludes our Q&A for today. I turn the call back to Scott Kavanaugh.
Scott Kavanaugh : Great. Thank you. Thank you, everyone, for attending today’s conference call. We look forward to seeing you in the fourth quarter earnings call as well. Thank you. Have a great remainder of your day.
Operator: This concludes today’s conference call. You may now disconnect.
