Julie Courkamp: Yes. I would kind of say we’re hoping for an uptick. We’re planning for an uptick, but it will continue to be challenging regardless. There is — in addition to the rate environment, just the supply is still kind of low in our core markets as well. We’re working very hard to find new production avenues. So new MLOs. We’ve been adding those over the course of the last couple of quarters, have some good ones in the pipeline. That’s another way we’re looking at — the major way we’re looking at increasing our production. But I think we foresee it to be a bit of a challenge for the next several months and then I’m hoping for seasonality coming into the spring and summer months, as well as rate environment improvement and consumer sentiments, frankly, changing a little bit to give us a little bit of a base into the summer and fall months.
Scott Wylie: We’re seeing house prices flat to coming down in our higher end markets, and we’re seeing the time on market extend. So all that stuff sounds like late cycle recovery potential, and then we see rates come down. And of course, mortgage rates are generally tied more to the bond values that we’ve seen over the last six months and Fed funds. So you could imagine a better year this year for mortgages than what we saw last year, which was pretty hideous.
Julie Courkamp: And then I would tell you, we continue to rationalize expenses in that area as much as possible and share resources and do the things that we can do to keep managing expenses as well.
Scott Wylie: We’ve loaned some of the people out to other areas that sort of thing, but I’m trying to cut our production capability.
Brett Rabatin: Okay. And maybe just one last one. In your prepared commentary, Scott, you talked about M&A. And I guess I was a little surprised just kind of given where the stock is, it would seem like that’d be — it’d be tougher. I kind of thought you might talk more about maybe share repurchases than M&A, but any additional color around M&A and just are you having discussions with folks — what do you think is the outlook for you guys from an M&A perspective? I know you’ve been acquisitive in the past.
Scott Wylie: Yes. So what works well for us is courtships that lead to partnerships. And so, the fact that our stock is at 80% or so of tangible book value, I mean, we don’t believe that makes sense, and that’s not really where it’s going to be. It was at $33 year and a half ago. So I do think if we can show — demonstrate some of the things we’ve been talking about on this call today, that there is some upside there. And then as the courtships are proceeding, that would give us the currency that we would want to do an M&A. But we’re not — we’re always looking and we’re opportunistic. We’re working on relationships, but we’re going to be conservative and disciplined. Your comment is absolutely right. We’re not going to do anything with our stock at $18, I don’t think — and or $17 where it is now. And it doesn’t mean we shouldn’t keep working on it.
Brett Rabatin: Okay. Fair enough. Appreciate all the color. Thanks.
Operator: Thank you. I’m showing no further questions at this time. I’d like to turn the call back over to Scott Wylie for any closing remarks.
Scott Wylie: Yes. Well, thank you again, Valerie. I’d just like to wrap up with some overall comments from our conversation today. Our focus on client relationships got us through 2023 with positive earnings, with deposit growth, loan growth, increased tangible book value per share in spite of the CECL negative impact on tangible book value. We reduced our operating expenses. We reduced our loan-to-deposit ratio from a peak of 114% down to — in 2022, down to just over 100% at year-end. Our NIM appears to have bottomed out. Our AUM showed some nice growth. Our capital ratio has improved. Our increased NPLs should work out in 2024 as we continued our 40-quarter streak of essentially 0% charge-offs last year. With 2023 behind us and entering our 20th year in 2024 here, we opened the doors March 17th of 2004.
We’re cautiously optimistic about our ability to grow revenues and therefore, earnings nicely in 2024 and beyond. We feel that relatively modest asset growth with improved margins and improved fees can once again deliver the kind of strong operating leverage that we’ve seen since our 2018 IPO. I really appreciate everybody taking the time to dial in and speak with us this morning. We sure appreciate the support for First Western. Have a great day.
Operator: Thank you. Ladies and gentlemen, this does conclude today’s conference. Thank you all for participating. You may now disconnect. Have a great day.
