Tim Switzer: Okay. That’s helpful. Thank you, Katie.
Katie Bailey: Thank you.
Operator: [Operator Instructions] Our next question comes from Manuel Navas with D.A. Davidson. Please go ahead.
Manuel Navas: Hi. Good morning. Congrats, Chuck. I just wanted to follow-up on the CDs. Are these mainly coming from — is it new money to the bank? Is it new customers? Is it new customers bringing funds over? Do you have any other color on kind of where the funds are coming from?
Chuck Sulerzyski: Thank you, Manny. It’s primarily existing customers bringing us new money to the bank would be the biggest category.
Manuel Navas: Okay. That’s helpful. Is the plan to kind of shift to this funding vehicle as the brokered runs off? Just any color on kind of those two pieces together.
Katie Bailey : Yes. I mean, I think we would prefer customer deposits over brokered deposits — and I think that, again, our evaluation of broker deposits is more a function of pricing as it relates to comparable alternatives to us, such as kind of FHLB overnight as our primary source for overnight funding.
Manuel Navas: Okay. The short earn-back on some securities exchange you had, what kind of was a shift in yields? And is there potential for more down the road?
Katie Bailey: Yeah. I mean, we lower yield of things securities, and we reinvested in yield over 6% at certain times during the quarter. We will continue to evaluate, as you saw, I think we did an investment kind of restructure in the first quarter. We followed up in the fourth quarter with another one. As we said in the script, we’ll be opportunistic as it relates to future opportunities there. We won’t extend the earn back much past two years, if at all. And again, we’ll keep the loss in a quarter relatively reasonable.
Manuel Navas: So the new securities are about 6%. That’s across the whole quarter, any reinvestment you do?
Katie Bailey: Those are what we just reinvested in the fourth quarter with this transaction, yeah. We have not been actively buying each consistently throughout the quarter. As you saw, our assets — or our percentage of investment securities to assets went down this quarter relative to last quarter.
Manuel Navas: Yes. And I’m sorry, did you give what the new loan yields were? I know you said they’re up about 31 basis points quarter-over-quarter to what?
Katie Bailey: 881.
Manuel Navas: That’s great. And I guess, is there any other kind of big picture wild cards in your outlook besides deposit costs?
Tyler Wilcox: I think we feel really good about the underlying operating details in all of the businesses, and we’re optimistic on the outlook that we’ve presented.
Manuel Navas: That’s great. I really appreciate it, guys. Thank you.
Tyler Wilcox: Thank you.
Chuck Sulerzyski: Thank you.
Operator: And the next question comes from Daniel Cardenas with Janney Montgomery Scott. Please go ahead.
Daniel Cardenas: Good morning, everybody. Chuck, congratulations on a nice run here.
Chuck Sulerzyski: Thank you.
Daniel Cardenas: Quick question, just given where valuation levels are right now, what are your thoughts on the M&A front?
Chuck Sulerzyski: We continue to have dialogue with institutions in good times and bad times. So we’re pretty persistent and consistent on talking to people. I think the accounting complexities make M&A less attractive today. I think that a lot of institutions are looking at where they are and wondering about whether it makes sense to join an institution that has a little better currency, both in terms of performance and in terms of volume of shares, greater liquidity. And I think some people are beginning or some institutions are beginning to get more realistic with premium expectations. That being said, if you’re asking me to guess for the industry, I think you’ll see a slightly more deals in 2024 than 2023, but it will not be a return to some of the historic levels.
Daniel Cardenas: All right. Good. Got it. Thanks for that color. And then, Katie, what can — what kind of accretable income can we expect from the Limestone transaction in 2024?
Katie Bailey: Yeah. I think for the fourth quarter, we had accretion added about 47 basis points to margin. I think we’ll — and again, that included some true-ups as we continue to refine the purchase accounting for that transaction given we’re within that year window. But I think we would expect it to be somewhere probably between 30 to 35 basis points on a quarterly basis benefit to the margin as we proceed through 2024. And again, there’s a lot of volatility there. I’m not telling you anything you probably don’t know, but to the extent any of these deals kind of rewrite or pay off there could be swings in that in any given quarter, but that’s what we would expect a state.
