So, we’re still working through that, but we think $600,000 to $700,000 on an annual basis. On a quarterly, it’ll be a little bit up and down.
John Bordelon: We do anticipate, however, the fourth quarter receiving our certification from the SBA
Kevin Fitzsimmons: And what happens when you get that? Is that just a, like really, is that a boost to what you can do?
John Bordelon: Basically, it’s a reduction of scrutiny by the SBA in underwriting. We’re charged with doing the underwriting ourselves. So, it allows for a faster pace to get from the beginning to end of that process.
Operator: And our next question comes from Joe Yanchunis from Raymond James. Please go ahead, Joe.
Joe Yanchunis: You called out a couple downgrades in your prepared remarks. I was hoping you could provide more color on the sectors or geographies and severally, if you could touch on where you’re seeing any potential cracks in the portfolio at this time?
John Bordelon: Yes. These are a couple of one-offs. They’re both multi-family and one is a situation where construction costs ran a little bit heavy and so there’s a shortfall, construction is on pace, but there’s a shortfall. So, what we’re trying to do is help the borrower utilize other collateral that he has to borrow. I think the shortfall is about $380,000 to finish the project. So, we took a conservative approach to move to substandard, but it is, I think going to probably come off of that within the next three to four months as it finishes the project and leases up. The other one is about a $1.5 million participation with another bank on a, kind of a micro apartment, if you will. Multiuse that’s in a commercial on the first floor.
And that one is loan to value wise in very, very good shape. We don’t anticipate any losses on that either, but hopefully, it’s then, and we’re trying to get it out the court so that we can either sell the collateral as is or finish the collateral to sell it so we don’t anticipate losses on either one of those projects.
Joe Yanchunis: And then, you mentioned what was the participation. What is your exposure? or what is your SNC exposure?
John Bordelon: We participated in that one out.
David Kirkley: We participated that loan that John was discussing out. It was not a purchased participation. We have very minimal exposure to purchase loans.
Joe Yanchunis: Got it. I appreciated that. Then just one more kind of question for me here. So how should we think about this time non-expense growth, non-interest expense growth in 2024? Do you guys have any large projects planned that would impact that growth rate? And kind of in that same vein you previously discussed bringing on additional talent, the Houston market? I know it’s kind of early in the budgeting process, but is there any way to quantify how many new hires you’re looking to add over the next say 12 months to 18 months?
John Bordelon: I think we’re getting closer as far as a pullout in the Houston market. We don’t really know that number because when you do a pullout like that, not everybody jumps on board, but we are interested in Houston’s such a huge market that the people that we have can’t cover it all. So, we’re very excited about having other talent in that market, and more than likely, what we’ll start off with is a small LPO, office and eventually looking ahead creating more of a retail setting for that team to be able to perform. But I plan, I think in the next three or four years is to continue to grow the talent base in that Houston market so as to continue to grow. We’ve had great success since acquiring Texan Bank and we think that’s going to continue in 2024.
