Alex Ko: Yes. In addition to that $57 million, then the most we are expecting is less than $10 million.
David Morris: Yes, of normal payoffs. Normal payoffs.
Andrew Terrell: Okay. Understood. Okay. I appreciate it. And then maybe just one more question around the expenses. Sounds like about $17 million or so in 4Q. And then if I heard you right, a little bit of a seasonal lift into the first quarter of next year. Just wanted to get maybe a bit of expectations in this kind of operating environment, how you’re thinking about managing expense growth. Is that $17 million number something you think you can kind of manage around throughout the balance of 2024? Or should we expect some expense growth off that base as you kind of continue to reinvest into the franchise?
Alex Ko: Yes, maybe I can attempt to answer for that. Yes, the basis for the $17 million in Q4 was based on the fact that our legal and the professional fee expense will be much smaller than previous quarters, and even smaller than the Q4, given about 85% or even higher of those SEC investigation or investigation-related expenses. It used to be millions of dollars will be covered by the insurance. So that is the biggest contributor for the reduction of the legal expenses. But also, as you know, we did have some mature weaknesses, a lot of outside kind of advisory or consulting services, not to mention the credit-related. We want to make sure the reviews by third party and CISO-related, some validation, all those professional fees, I would expect that will go down.
So $17 million is the one that we expect in Q4. But if you’re asking me the run rate for 2024 and going forward, I think it can be even lower than $17 million. But the salary and benefit expenses, obviously, we are very careful managing the salary and benefit expenses. But if we really grow, we need to hire the qualified employees. But I think overall, the run rate for Q4, I would feel comfortable about $17 million. And 2024, it can be even lower or higher, but in the neighborhood of $17 million. Caveat is Q1 on seasonal kind of high expenses.
Andrew Terrell: Okay. Understood. I really appreciate all of the color. And thank you all for taking the questions.
Alex Ko: Thank you, Andrew.
Operator: Thank you. [Operator Instructions] Your next question is coming from Kelly Motta from KBW. Your line is live.
Kelly Motta: Hi, good morning. Thanks for the question.
David Morris: Hi, Kelly.
Kelly Motta: I was hoping maybe you could provide us with an update on the SEC investigation. It was nice to see the insurance kick in so it’s not dropping down to expenses. But I was wondering if you had any idea in terms of potential timeline towards resolution.
David Morris: Well, if you know how the SEC works, they don’t tell us anything. So, we really cannot really comment on where they are. We just know where they are based upon, if they’re asking us for a bunch of information. And that has significantly, that pretty much has slowed down and stopped.
Kelly Motta: Got it. And I know Gateway was terminated. Just wondering, as we look ahead, is that San Francisco market still one that you’re interested in getting in? And does this shift at all, your appetite for M&A versus potentially, DeNovo branches or things like that in order to drive expansion into new markets as you’ve done in the past?
David Morris: Okay. It depends on the type of acquisition. But yes, we are, after a while, we would be, we would entertain an acquisition in San Francisco. And we would also look at local market here or local markets where we already have branches where we can get significant cost savings, much more than your typical 30% to 40% something closer to a 70% or 80% cost save. And that would like, that would make a lot of sense because there’s a lot of duplication, especially here in LA. There’s 17 or more Chinese American banks. And we all have branches on Valley Boulevard, maybe multiple branches on Valley Boulevard. And it doesn’t make sense that we have 17 banks serving the same market. So, but right now, it is not on the radar screen. Okay.
