Andrew Terrell: Good deal. Do you have a target in mind of what you would kind of target in terms of new hires in the first half or for the year?
James Beckwith: I think we’re probably going to add two to four new biz dev people, as we sit here today end of January. We certainly pivoted in 2023 in terms of being opportunistic about hiring talent. And I think as the year goes and transactions happen, we could — we want to continue to be opportunistic. But as we sit here today, I think that’s a good number, two to four folks.
Andrew Terrell: Yes. Okay. And then maybe last one for me for Heather. Just I mean, kind of throughout this year, you’ve done a really good job managing the expense base. Just as you look into 2024, any thoughts on expense run rate into next year and then overall kind of expense growth you’d be looking out for ’24?
Heather Luck: Yes. So we — thank you for that. We definitely pride ourselves on managing expenses and being mindful there. If you look at 2024, really looking at Q1, you could add about 250,000 to what we had rolling in from Q4. I think that’s probably a good proxy for where we’ll start to shake out. We will see a little bit of a creep the second half of the year once we have rent expense flowing through in the Bay from the new location there. But I think if you add about 250,000 to 500,000 for the first half of the year, you should be okay.
Andrew Terrell: Okay. Very good. I appreciate it. Thank you, guys, for taking the questions.
James Beckwith: Thank you, Andrew.
Operator: [Operator Instructions] The next question is from Gary Tenner with D.A. Davidson. Please go ahead.
Gary Tenner: Thanks. Good morning.
Heather Luck: Hey, good morning, Gary.
Gary Tenner: Going back to the Bay Area team. They’ve been on board for, call it, two quarters and something over $70 million of deposits, I think, in the door. Where does that seem relative to kind of the year-end expectations that you had in mind for them? And maybe beyond that, can you talk about just the deposit trends outside that team?
James Beckwith: Sure. It was 2x from what we thought we would be. So they really performed well. And it was — it’s great working with them. We spent a lot of time down there and helping them onboard their customers and their relationships. So we expect that to continue to grow maybe at that similar level. So as we look at 12/31/2024, we hope that we’d be able to double the deposit base down there from where it ended up at 12/31/2023. In terms of growth outside of the Bay Area, we’re excited about what we’re doing in all of our verticals, and we’re off to a pretty good start. So I think it’s going to be very supportive of our target of 10% deposit growth. So that’s kind of where we stand on that. I think we’re starting to really execute in our Special District business, which excited about that.
And in our professional services nonprofit business, I think, is doing well. And just our basic C&I business and especially in our construction industry business, we’re seeing some decent deposit growth there. So I think what they’re — across the board in all of our verticals, they’re going to execute with respect to deposit growth. We’re still — we’re working with our health care practice group. We expect to have a decent win here in Q1. But that particular vertical is something that we want to spend more time on in terms of really getting it going.
Gary Tenner: Thanks. I appreciate that, James. And then just a follow-up. I think in your prepared remarks, I don’t remember the exact term, phrase you used, if there was a risk on the horizon or storm clouds on the horizon, but can you talk about kind of your broader view that kind of maybe kind of note that in your prepared remarks and kind of your confidence in the underlying economy in your core markets?
James Beckwith: Well, there is still a fair amount of uncertainty associated with the economy and how it’s going to — if there’s going to be a soft landing or a recession, mild recession. We just don’t know. I think hopefully, as every quarter goes by, we continue to have the type of national GDP that we’ve seen, without any appreciable increase in unemployment. In our markets here in California, they remain strong. We’ve got a few, I’m going to say, issues with respect to commodity prices as it relates to our ag business. But I think we’re working through that. And a lot of our farmers are diversified in terms of the crops that they grow, which is really helpful. So we don’t anticipate any problems there. But I’m just being cautious, Gary, I think, with those statements.
You can’t pick up a business newspaper without having some article that speaks about rates and some recession, and it’s just a continual bombardment of data points that affect people’s opinions and when the Fed is going to move and when they’re not going to move. And it’s just — I’d like to see things settle down a bit. We’ve got a national election that is creating some uncertainty, but you also have some geopolitical events that are happening right now in the world that are — could be problematic to our economy here. So I think it’s kind of a comprehensive cautiousness, I guess, if you will, given all those facts.
Gary Tenner: Great. Appreciate your thoughts, James.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.
James Beckwith: Great. Thank you. Five Star Bancorp is on a continued path of growth as we execute on our strategic initiatives, which including — includes growing our verticals and geographies while attracting and retaining talent. Our people, technology, operating efficiencies, conservative underwriting practices and its expense management have also contributed to the success we share with our employees and shareholders. These successes include numerous ratings and awards. In 2023, we received a Findley Reports Super Premier Performing Rating and IDC Superior Rating, Bauer Financial Superior Rating, 5 stars out 5. We were also awarded the prestigious 2022 Raymond James Community Bankers Cup, and we are among the 2023 Piper Sandler Sm-All Stars.
In 2023, we were recognized as the 2022 S&P Global Market Intelligence Number 1 Best-Performing Community Bank in the nation. That’s with banks with asset size between $3 billion and $10 billion. We were also listed on Independent Banker’s Top Commercial Banks in 2023, with banks more than $1 billion in assets, and ranked number six in the nation. We were listed among American Bankers Top-Performing Banks in 2023, banks with $2 billion to $10 billion in assets, and ranked Number 12. In 2023, our executives and senior leaders were awarded a Sacramento Business Journal C-Suite Award, a Sacramento Bee Latino Changemakers Award, a Commercial Real Estate Women Award, a Comstock Magazine’s Women in Leadership Award. Being recognized as community leaders ensures Five Star Bank remains top of mind in the markets we serve as we continue to build out our verticals.
We are humbled and proud of our team’s accomplishments. We look forward to speaking with you again in April to discuss earnings for the first quarter of 2024. Have a great day, and thank you for listening.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
