Scott Wylie: Unfortunately, we’ve really cut expense there. And unless we want to close it down, which we don’t, I think we’re kind of stuck with some minimal contributions coming out of mortgages here. Negative contributions for the short term. We are doing a couple of things to manage that. We’ve looked to add MLOs, which are all variable costs, and we’ve also looked to manage spreads in a way that drive more volume. And so, we’ve had some success with that. I think, we’ve added another Mortgage Loan Officer in our resort communities, and we’ve got a couple more that we’re talking to. So, I think the President of that Mortgage Group, his work is — he is certainly well aware of our focus on that and trying to be responsive.
I don’t know, Julie, that’s all under you. If there’s any other color you want to add on that? I do think we’ve done a nice job over the past three years in bringing the cost down in that area to where revenues look like they’re going to be. And unfortunately, it’s a little upside down right now. But again, I mean, that’s been strategically valuable for us. It’s produced assets. It’s minimized our risk in mortgages, which I think is no small feat. I think, if we’re going to be a private bank and have mortgages, you need to have the volume to make sure you’ve got the compliance and risk well managed. And then we just made so much money in the boom part of it that having some incremental losses here, it’s not the end of the world. I think at some point, that’s going to turn around and be a nice profitable business again as it was a couple of years ago.
Ross Haberman: Could you talk about some of your newer offices? You said you — I think, I read you’re opening one in Bozeman, is that going to be a full-service? And if it is, what kind of deposits do or timing do you need to hit a breakeven? Could that be, I don’t know, could that be a $300 million, $400 million branch in a couple of years?
Scott Wylie: I think, $300 million and $400 million would be an ambitious goal. We talk in terms of revenues here when we think about new locations. And so, we opened that as a LPO, and we told them that when they get to $1 million in revenues that we could give them a full-service office. We opened as a full-service office. I think actually, we moved into that office this week, earlier this week, and our grand opening is going to be, I believe, November 9th or something like that. And so, I think as we build that out and build the business there, I would expect that to grow to be a $2 million business a year, 18 months from now. And then it will probably be a $5 million, $10 million business with a couple million dollars in expenses.
So having a nice contribution margin in the relatively near-term. And I think, it’s very additive to what we’re doing in Western Wyoming and obviously gives us a nice entree into Montana, which I think is full of opportunities for us as well. So I think that’s part of a longer-term strategy to continue to expand in the Rocky Mountain West. We have a really great team there that I think is going to produce great results for us. We’re very optimistic about it.
Ross Haberman: Could you talk about the Wyoming business, I guess, when you bought that about a year and a half ago or so. How is that performing on a bottom line basis?
Scott Wylie: Yes. I don’t think we’ve really released much information about that. I mean, what we’ve seen in Jackson, as we combined our two Jackson offices, the one we had there plus the one that we acquired. And the one that we acquired has a beautiful office at the corner of the metaphorical First and Main Street. Interestingly, we had First Republic open across the street from us, and that was a bit of a shocking experience, the aggressiveness that they brought to the market. Of course, that’s gone now. So, I think that that’s going to be a big benefit for us that are the more long-term focused players in the market. And then our other two offices, which we weren’t too sure about when we first started looking at this opportunity, which are Pinedale and in Rock Springs, they’ve turned out to be really pleasant surprises.
The teams there have been wonderful. The market, obviously, there’s still competition for what we do in those markets. And so, I think those are going to turn out to be really nice success stories for us for the long-term. If you wanted to have a stable base of core deposits, that is so desirable today. All of those offices are very adept to that. And I think in retrospect, that acquisition was a huge success. You probably recall that it was accretive to capital on day 1 to tangible book, and we got more expensive out of that than we thought, and the revenues have been strong. So I think all in all, that’s been a really nice success story for us.
Ross Haberman: All right. And just one final question. Are you actively looking for more things to buy or fill in? Or if we do see any further growth, it will be organic like the Bozeman endeavor?
Scott Wylie: We do believe that there’s going to be opportunities that come out of this cycle. Talking to other bankers, I’ve heard some stories of some pretty rough exams and since March now, and I think that the downgrades that may come out of that, may put pressure on Boards and maybe people that otherwise wouldn’t be interested in looking for a bigger, stronger partner maybe will. And so, I do think that, that’s going to create opportunity for us. We do have our list of targets that we talk to and socialize the idea of joining somebody bigger with a bigger toolbox and a bigger footprint that could be a beneficial partnership for them. And I think that, that’s going to play out here over the next couple of years. It does take time, I think, for that to play out.
And what we’ve seen in prior down cycles, as you see these big sort of spectacular events like we saw in March. And then, sort of the follow-on takes several quarters to play out. And I think we’ve got that to come still, which I do believe will create opportunity for us.
