So it’s kind of hand in glove from growing this footprint and building what I think is recognizable and very valuable noninterest income. So we can certainly look at it. We’ve looked at sales, what it would generate, what opportunities do we have with those funds at this point. We had a 10% growth in revenue last year. We saw that type of growth in profitability. So even with interest rates where they are, I still see this as a bigger win for investors if we continue this business and stay focused on the next several years.
Brady Gailey: Yes. That makes sense. Thanks for the color guys.
Drake Mills: Thank you, Brady.
Operator: Thank you, Brady. Our next question comes from Graham from Piper Sandler. Your line is open. Graeme, please ensure your line is not muted.
Graeme Smethurst: Hi, guys. Can you hear me.
Drake Mills: Hi, Graeme. Good morning.
Graeme Smethurst: Sorry about that. Good morning. I just wanted to start with the Southeast market you guys expanded into, obviously. I know you said you’re focused on profitability right now and making sure the team is fully integrated. But as you look at this market longer term, how does M&A play into the cards here? Is this sort of your new area of focus when it comes to building relationships with other banks that might want to partner up with you down the line? Or do you think you’ll just continue to sort of build out around these teams and just see where it goes from there?
Drake Mills: With current conditions, and I think about — when I think about M&A strategy, I think about the regulatory front, I think about interest rate marks, I think about AOCI and the difficulty of a current valuation expectations from these partners and where we currently are. We’ve got to create an opportunity to have a better currency than we do to get successful. So we’ve kind of gone back to the playbook on using team and building off of teams. In my previous world, I’ve had more success, let’s say, from growing through team acquisitions and I necessarily have an M&A. And I’m not — I’m excluding BTH from that. But as we look at what partnerships or what opportunities we have, the majority of that right now is in Texas.
We have had some conversations in the Southeast, and we will continue to build those relationships. But I do think for the next — and I’m going to say, three to four quarters, we’re going to focus on this team strategy versus — or see benefit from team strategy than we are going to see from M&A.
Graeme Smethurst: Okay. That’s helpful. And then I guess just going back to the NIM and more specifically, deposit beta. I know you guys are traditionally asset-sensitive name. But I think it’s fair to say that deposit costs maybe exceeded where we thought they would go this cycle, just given what you guys have done in prior cycles. So I’m wondering, Wally, as you look at the NIM next year, one, the historical deposit beta is at around 30%? And then, I guess, also two, do you think you might be able to outperform that similar to, I guess, the incremental pressure that you saw on the way up, which is closer to 50% now? Thanks.
Wally Wallace: Thanks, Graeme. I appreciate the question. I think that we’re trying to take a prudent approach to how we think about deposit betas. Historically, when you look at what happened in prior cycles, we didn’t have Texas. And Texas is much more of a C&I market for us. A lot of those deposits will float in our index, but they also come with more noninterest-bearing deposits. So I agree with your statement that the deposit beta was higher than we thought on the way up, but we are not going to assume that it will be higher than we would expect on the way down. We’re taking a much more conservative approach in our own modeling. And if you [indiscernible] we’re actually modeling a beta of zero for the first cut or two. And then our modeling on the way down would suggest that the deposit in prior sites also the betas were a little bit lower than they were in the layout.
Graeme Smethurst: Okay. Thanks for that. Then I guess you mentioned it there, but on index deposits, do you guys have like a number of total index deposits in the bank that would move immediately with any change in rates?
Wally Wallace: I don’t have the dollar now, but you can look at our public funds and assume that the majority of those are indexed and the majority of what’s remaining is up.
Graeme Smethurst: Okay. Got it. All right, I appreciate it guys. Thank you.
Drake Mills: Thank you, Graeme.
Operator: Thank you, Graeme. [Operator Instructions] Our next question comes from Tim from Raymond James. Your line is open. Tim, your line is open. Tim, please ensure you line is on unmute.
Unidentified Analyst: Hi, guys.
Drake Mills: Good morning, Tim.
Unidentified Analyst: So I just wanted to start kind of on the bond sale and using that — those proceeds to fund loan growth in the new South Alabama panhandle market. Kind of how quickly do you think you can deploy that capital? And how sensitive would your kind of EPS and NII outlook that you line down the slide be to kind of that time frame?
Wally Wallace: Thanks, Tim. Good morning. We are — that those proceeds are going to fund loan growth in the new market as well as our other markets. Obviously, Texas markets are fast-growing markets. We think we can get it deployed. It doesn’t take that long to deploy it because any new loan that’s made, we can use those proceeds to fund. We don’t have to pull any borrowings or pull any brokered deposits. So we actually think that it will be weighted more towards the more positive outcome in the scenario I outlined in the slide deck.
