Operator: Thank you, Matt. Our next question comes from Michael at Raymond James. Michael, your line is open.
Michael Rose: Hey, good morning, guys. Hope you all are doing well. Matt touched on a bunch of my questions, but I did want to touch on expenses. Obviously, the revenue is a little bit lower than I think we were looking for, but so were the expenses. Last quarter, you guys had kind of talked about using the fourth quarter run rate and growing that, I think, about mid-single digits, just given the inflationary pressures that we’re seeing maybe some offsets, maybe you’re not going to be as aggressive in hiring. Just wanted to get a sense of what you think about expenses as we move through 2023? And then, just how much of the cost saves from the acquisition have you realized to date? Thanks.
Drake Mills: Yes. Michael, thanks. I appreciate. We are so expense focused right now. But on the same hand, we’re doing, as Lance talked about in his prepared remarks, strategic investments in technology, technology that is going to drive efficiency, and I don’t want to get into it today, but our bot process and what we’re seeing from there and the reduction in costs that we think we’ll see, but the technology investments also to drive a superior customer experience. We’re also making investments that are included in these numbers in strategic locations, that are going to allow us to not only address making sure that we serve the communities, but put us in a position where I think we will see strong deposit growth in those markets.
Again, strong bankers — and we don’t build facilities just to build a facility and location, we build facilities around teams and people, and that’s what you’re seeing. So, we’ve got three coming on, another one that came on earlier last year. So, we are doing the things necessary to make sure that we reduce expense and have a run rate that I think is going to see mid-single-digit run rate through ’23. But yet at the same time, do some things that we think, and we’ll start talking about those that reduces cost and cost allow us to do more things that we’re talking about from a technology people and locations. So, this is — and I’ll say it, and I know it’s kind of corny, but — we look at everything strategically through models that show long-term value build.
And that’s the focus that we have, but yet we’re going to manage expenses. You saw a slight reduction in our efficiency ratio. Lance is — I mean, he’s challenged with continued pushdown efficiency. We think we have to get to a certain efficiency number to be a high performer from a performance standpoint. Those are the things that we’re going to continue to focus on in ’23.
Michael Rose: Okay.
Wally Wallace: Michael
Michael Rose: Yes, go ahead, sorry.
Wally Wallace: I’ll just add a couple of kind of puts and takes to that mid-single-digit growth in 2023. We have a couple of relief valves from incentive accruals in 2022. Our organic loan growth was over 20%. We’re not budgeting for that level of growth in 2023. But we have invested strategically in new people, and we’ve also made some strategic investments in real estate that will offset some of those. As far as your cost saves questions, we pulled forward a little bit from some technology contracts. We have a couple left that will impact us in the first quarter positively, but that will be about the extent of the cost saves.
Michael Rose: Okay. So just given some of the revenue headwinds, do you think there’s room to bring down the efficiency ratio from here? Or should we expect it to kind of flatline to maybe increase just given the challenges that are out there? Thanks.
Drake Mills: Yes. In ’23, Mike, I think we’ll see a little bit of flatlining. I still think we have possible reduction, but we’re budgeting and we’re looking for a successful year would be one that we were flat from an efficiency standpoint and see a kickoff in ’24.
Michael Rose: Okay. Helpful. And then maybe just finally for me. It does sound like you’re — I’m going to slow the loan growth here a little bit. I think you said mid-single digits. I think last — third quarter, you said kind of high-single digits, completely understand. But as we think about capital build here, I mean, that should just further the acceleration. Can you just give us an update on what your strategic priorities are? And if you would look to actually use the authorization you have in place just given where the stock is trading, (ph) looks pretty attractive. Thanks.
Drake Mills: Yes. And thank you. It’s — we going into a cloudy economic cycle in ’23. Certainly, capital is king, and we’re going to continue to build capital in a positive way to ensure that we can weather whatever storms coming our way. Feel comfortable with where we are. We do have a share buyback. We see a continued slip and slower growth than I think that we would be active in buying that stock back, because it is — like I joke about, it is on sale right now. So, this is something that is a tool in our tool chest. I think you could potentially see us get active, but we do have authorization and we could use it.
Michael Rose: Great. Very interesting to hear the comment on the chatbot. Maybe you can use that to replace your newly-hired CFO. Just kidding. Thanks, guys.
Wally Wallace: Ouch. Wow.
Operator: Thank you, Michael. Our next question comes from Brad at Piper Sandler. Brad, your line is open.
Brad Milsaps: Hey, good morning, guys.
Drake Mills: Good morning, Brad.
