So our compensation is the biggest component, 60% of it.And on Page 2 of the earnings release, you can see that our FTE was flat. And then when you look at our FTE compared to the year ago, we’re down 49. And so what that reflects is the staffing levels as we are doing more with less, it really reflects the efficiencies, operational efficiencies we’re getting from our technology platform. Again, everybody realizing, we can do better with less. The headcount over that same time period, year-over-year has come down 20. So I think the divisions have a very, very good handle. Again, no EBIT came from us. They’re making the decisions that are right for their market. Again, compensation being the primary driver of our non-interest expense, I just want to comment on the regulatory assessments.That’s a 43%, while that only accounts for 4% of the non-interest expense, I mean, it’s uniform.
The FDIC has adjusted it for all banks, and so we’re certainly caught up in that as well. And then lastly, our other expenses, excluding the M&A, it’s really pretty flat, so I feel pretty good about where the guide is from 135 to 137. I say that because while we were very, very good at controlling expenses, we’re still seeing across the various expense categories, inflationary pressures, and so I’m just leaving that there.Jeff Rulis Okay, thank you.Ron Copher Sure.Operator Thank you. One moment for our next question. Our next question comes from Brandon King with Truist Securities. Your line is open.Brandon King Hey, good morning.Randy Chesler Good morning, Brandon.Brandon King Good morning. Could you just give us your thinking and thought process around not being more aggressive as far as pricing of core deposits instead of tapping higher cost wholesale funding just optically, your deposit costs are much lower than peers and I know historically that’s kind of always been the case, but just wanted to get a better sense of what the thought process is there strategically?Randy Chesler Sure.
I can give you my thoughts and if Byron may want to add to it, I guess just to step back and some context, we went through a decade of zero to low rates, and so there was a little muscle memory that had to be developed in terms of competing for deposits. And I think that’s what we saw in the fourth quarter and to some extent in January to Byron’s commentary once we said enough within a week the deposit stabilized and then actually grew.So I think Brandon is as simple as that. We had been in a mode for a decade of and operating in one environment. It shifted pretty quickly and I think we’re squarely now out to retain and defend the deposits and keep them with our relationships.Brandon King Okay. And would you care to share what the spot deposit rate was at the end of the quarter?Ron Copher I can give you the average rate for the month of March was 36 basis points.Brandon King Okay.
And final question, I know there’s been kind of growing consternation about the work from home trend kind of almost ending from here and not being as prevalent. So could you just give us an update on what the in migration trends are there in your footprint? And also just a sense of how housing has performed and if there’s any notable trends there based off of the increases over the last couple of years especially post-pandemic?Randy Chesler Yes, we continue to see in migration across all our markets. It’s slowed down, but it’s still continuing. The return to work, I think a number of the people that have made the move decided not to return to work. And we see some folks staying put. We have not seen any kind of material outflow. We still have housing shortage across almost all our markets.
Prices have held in pretty stable. So we don’t see a lot of disruption there despite the bigger kind of work – return to work has not really materially changed those dynamics.Brandon King Okay. Thanks for taking my questions.Randy Chesler Welcome.Operator Thank you. And we have a question from Andrew Terrell from Stephens. Your line is open.Andrew Terrell Hey, good morning.Randy Chesler Good morning, Andrew.Andrew Terrell Thanks for taking the questions. If I could start just on the margin as well, and Byron, I appreciate all the color around the deposits and the kind of pricing strategy there. It’s all really helpful. I maybe just wanted to get a sense from you on deposit beta expectations. I know in the past, we’ve kind of talked around I think around 15% total deposit beta through the cycle, but it felt like maybe performed that expectation.I was hoping just get a sense of whether you still thought 15% just given the pricing changes that were made recently, if you still take 15% through the cycle for total deposit betas kind of the expectation or if there’s a chance you could come in above that?Randy Chesler Sure.
We’re still using 15% through the cycle beta for total deposits. We still think that’s a good estimate. It really depends on the Federal Reserve and kind of what rates, what happens from here if we see higher for longer, that is a scenario, where I think clearly we’ll have to push through that 15% beta to retain deposit balances. If you believe market expectations and the Fed begins to cut towards the back half of this year, that’s a scenario where I think we could maintain and hold to that 15% beta number. So it really depends on what the Fed does from here. But what we’re using, we’re still using that 15% number in our estimate.Andrew Terrell Yes. Okay. And then maybe just following up on that point when we look out of the forward curve, there’s obviously some cuts baked in starting later this year, and I think, Randy, you might have mentioned in prepared remarks around the bias of the balance sheet being maybe a bit liability sensitive, but could we maybe put just like a finer point on that, and I know there’s a lot of moving parts, but as we look out into late this year, early next year, how do you think the margin of response as they start to contemplate rate cuts?Randy Chesler I think the margin will do well and with rate cuts, one of the things that when we talk about liability sensitive, it’s just modestly liability sensitive.
When we ran our models for at year-end, we were fairly neutral. We did make an adjustment to our March 31 model with the rate shocks. And so again, kind of the base case, 15% I think is still a good guide, but we do recognize that a lot of the lag capacity that we have had has been used up in our deposit in our deposit base.And so if we’re talking about up 100, up 200 from here, I think our deposit costs will be more sensitive to those hikes. And so when we’re talking about shocks, we did dial up our beta sensitivity in those shock scenarios, creating the liability sensitive overall result.Andrew Terrell Yes. Okay. Makes sense. And just to clarify, does that the 15% total beta expectation, does that include the customer repo deposits as well?Ron Copher No, that’s total deposit costs and excludes the repo account.
I appreciate the clarification. Thank you.Andrew Terrell Got it. Thanks. And if I could ask just two more quick modeling related questions. Do you have the – the new loan production this quarter, the weighted average loan yields, and then also or the weighted average kind of incremental loan yield, and then expectations on the tax rate moving forward?Randy Chesler Yes, Andrew, on the production rates for Q1, it was 6.96.Ron Copher And then Andrew, Ron here. So on the tax rate I would use 18%, I know it was low this quarter, but expecting this to build, I would use 18%.Andrew Terrell Okay. Very good. Thank you guys for taking the questions.Randy Chesler You’re welcome.Operator Thank you. One moment for question. Our question comes from Matthew Clark with Piper Sandler & Co. Your line is open.Matthew Clark Hey, good morning everyone.Randy Chesler Good morning.Matthew Clark Just on expenses and just overall efficiency, given kind of the change, maybe culturally or just with the new rate environments have to compete a little more on deposits when you think about that targeted efficiency ratio longer term of 54%, 55%, I mean, it doesn’t seem like we’re going to be in that range this year, but is there some – do you feel like, that might not be realistic going forward just given the need to kind of pay up or retain deposits in this environment?Randy Chesler Yes, I have some comments.
But you’re absolutely right the way you’re looking at it right now. I think the there are a number and we’ve spoken about them. We have a number of efficiency initiatives through our technology platforms that we’re spending a lot of time with. I think that that’s probably going to be beneficial. And we’re still really dialing in that ability to get back into that 54%, 55% range, which is our goal. We do have some tools to get there. And that’s I think your outlook though on this year. That’s really a question for next year. Ron, did you want to add anything?Ron Copher Well, it will be sensitive to it. Byron was saying depends on, do we get the rate cuts or do we get further rate hikes, because the bigger component, the more impactful component this quarter was the net interest income.
And so while we’re doing great on the non-interest expense, it’s largely driven by that. But yes, it’ll be elevated this year, the efficiency ratio.Matthew Clark Okay. And then just shifting gears to office exposure. I know you guys are in a lot more rural markets than most so probably a little more insulated, but still some uncertainty around how rural office I think does longer term. Can you just quantify your exposure there and any characteristics you’d like to highlight and what the associated reserve is on that exposure?Tom Dolan Yes, Matthew, it’s Tom. Total exposures running about 9.6% of the total portfolio but as Randy mentioned, that’s the average is quite small, that’s 600,000 scattered across all eight states and there’s immaterial exposure to the downtown business district.
