But it is a tough environment. And yes, I mean, your guess is as good as mine as when the environment is going to get better it would be nice if we got a downshift in rates here, but we’re not – as we’ve talked about this morning, we’re controlling what we control, and that is booking high-quality business in our markets, growing our core deposits, keeping our ability to remix those deposits as best we can as we grow and doing the things we control and the rest will work out when the time is right.
Stephen Scouten: Yes, makes sense. And maybe just last follow-up for me. Going back to the NIM conversation, I want to maybe point of confusion, I guess, we were talking about like a 3% NIM by fourth quarter 2024 last quarter, but I think the curve at the time maybe was showing 8 to 10 cuts potentially. Now we’re looking at 3 to 4, but I think we can still get there. So is the ramp really not dependent upon lower rates in your view? Or has there been another change that kind of helps you to get there irrespective of that change in the forward curve and expectations?
Paul Langdale: The ramp is slower at higher rates, but we still get back to where we expect to be. And I don’t think we’ll quite get to that 3% by the end of 2024. But that said, Stephen, if you think about spreads, we do expect that spreads will remain relatively constant in our modeling. So even though we would get that benefit on deposit costs that will come quicker in a down rate environment, we still are going to be able to notch some meaningful expansion from that earning asset reprice. So the variability between those two scenarios, it’s not as wide of a range as you’d expect when you look at the modeling on paper. Even in a flat rate environment, we’re going to have some meaningful NIM expansion.
Stephen Scouten: Yes. Very helpful. All right. Great. Thanks guys. Appreciate the time.
David Brooks: Thanks Stephen.
Operator: [Operator Instructions] The next question is coming from Matt Olney of Stephens. Please go ahead.
Matt Olney: Hey. Thanks. Good morning.
David Brooks: Hey. Good morning, Matt.
Matt Olney: Maybe just follow up on that. Good morning. Just following up on Stephen’s last question there, any change in the bank’s interest rate sensitivity projections. I think back in January, we moved to incrementally more liability sensitive. Any material changes from then?
Paul Langdale: No, I’d say that the liability sensitivity remains. One thing that has changed a little bit, Matt, is as we paid off some of those short duration brokered funds at the end of the quarter that probably kicked us a notch back toward neutral, but not meaningful.
Matt Olney: Okay. So Paul, you’re saying still liability sensitive, but maybe not as much as you were in the fourth quarter. Is that right?
Paul Langdale: Correct. Correct.
Matt Olney: Okay. That’s helpful. And then, I guess, going back to Catherine’s question around deposit costs stabilizing in the near term. I think we’re just trying to get more comfortable with this outlook since we did see deposit costs move up 20 bps this past quarter. And I get a lot of that is going to be on non-interest-bearing deposits stabilizing. And Paul, you gave us some great details around the spot balances for NIBs. Do you happen to have the spot deposit cost that we can compare to the first quarter average? Or just additional color on deposit costs by month in the first quarter? Just any other details that you can give us more, we’re comfortable with that.
Paul Langdale: Hard to pin down an exact spot deposit costs on a daily basis, Matt, but what I will say is that where we have seen great exception requests in the first quarter, we haven’t seen those really recurring in the second quarter. Where we have the ability to negotiate price a little bit more aggressively in March and April that we didn’t have in February when you had that sharp reversal in rate market. I think it was a little bit of depositor behavior that factored into it. As everyone was pricing in those cuts, people were trying to reach for yield. But as it became looking like it was going to be higher for longer than it’s been a more rational negotiation with folks on rate. The big key though for us, Matt, as I mentioned earlier, is going to be that production in the field and our ability to really grow those core deposits.
And that’s where we see the traction, and that’s what gives us that incremental confidence that we’re going to be able to manage those costs down because really, it’s about running off that wholesale funding that bears the highest cost, anything that we book in the field is going to be a positive spread to that. It’s going to be helpful for us.
Matt Olney: Okay. I appreciate that, Paul. And then just lastly for me on the mortgage warehouse. It sounds like some of your competitors have step back and open up a little opportunity for you guys. Just any more color behind that? And I think you mentioned kind of maintaining these current balances. Did I capture that right?
