Scott Wylie: No, it’s wire fraud. And this is the big industry issue right now, and we spend a lot of time and effort on training people and managing that, and we put additional controls in place, and I can’t tell you how many we catch because it’s a lot. But we did have a couple that by us this quarter and go into your expense numbers in the quarter gives me no – not happy about it, right, and not happy to talk about it. But I think in terms of understanding what our core expenses are, that was part of Q1.
Unidentified Analyst: But what – so that would fall under your deductible, so you don’t get reimbursed for that type of stuff because it would fall under your deductible or something?
Scott Wylie: That’s correct.
Unidentified Analyst: Okay. And how are the new branches coming? You had that operation, I believe in Arizona and in Montana. How are they coming in terms of generating business as well as are they generating any sort of deposit level that you can talk about?
Scott Wylie: Yes. So the process of opening an office de novo is a project. And you can’t get a branch approved unless you have a location, you have the people, and you get the regulatory approval on it. So in Bozeman, for example, we hired a team there, and we had an LPO that was producing loans. But then, once you have the team in place, you have your new office built out, which takes like a year in a growth market like that. Then you can convert it into a full service branch or profit center, as we described them, and then they can start taking deposits. When did that open as a full service? Was it six months ago now? Something like that. And we think that that’s going to be a really nice success story. We’ve got a great team there.
They’ve identified lots of good opportunities. They’ve got a nice book that they’re building a business. We held a client event, a prospect event up there, February. I want to say that was very well attended. There’s just a lot of interest, I think, in that market and what we’re doing because it’s different. You know, there’s no other First Western in Bozeman, so I think that that’s going to be fine. Arizona, we’ve been rebuilding the teams there since you asked about that, and I think that that’s going to be on a better trajectory. Some of the other new offices, I think our western Wyoming offices that came with the acquisition a couple years ago are really seeing a lot of traction and making nice progress. Our Vail office, which is our most recent resort market, that’s probably, what five years old now.
Something like that Julie?
Julie Courkamp: Yes.
Scott Wylie: And really is getting some great traction in the Vail Valley, and again, very differentiated from anything else in that market. So these things take time, Ross, and they take investment and they take persistence, but they’re showing nice results, and I think they’ll be great long term producers for the shareholders here.
Tony Rossi: And just one follow-up question about the non-performers, you think you’ll be able to get. I guess there was the one large non-performer with a lot of different parts to it. I think you said you’ve gotten control of four of the parts. There’s three left, I think. Will you, will you be able to resolve the other three, you think, in calendar 2024?
Scott Wylie: I think that’s a reasonable expectation.
Tony Rossi: Okay. Thanks a lot. I appreciate it. Have a good weekend.
Scott Wylie: Yes. Thanks, Ross [ph].
Operator: Thank you. I’m currently showing no further questions at this time. I’d like to hand the conference back over to management for closing remarks.
Scott Wylie: Consistently said this year that this was going to be difficult to predict given the economic uncertainty. But we have seen a number of positive trends as expected in Q1, your net interest income and NIM declines appear to be slowing. Fee income has definitely recovered nicely. Operating expenses, particularly if adjusted for some of these elevated workouts and other Q1expenses that we talked about, that we hope are non-recurring expenses are well controlled. Our AUM exceeded $7 billion and fees were up. Our asset quality is improving. NPAs are down as we work through our one remaining large workout credit. As we’ve talked about, with the improved loan-to-deposit ratio and continued core deposit growth, we should be able to get the balance sheet back on track for at least modest growth this year.
And these trends, together with our many internal initiatives we have underway, will drive higher earnings and improved efficiency in the quarters to come. So thanks everybody, for dialing in, and we sure appreciate your interest in First Western. Have a great day.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.
