Jim Mabry: I would say that I guess I should start with, two, Catherine, that I mean at this point in our modeling, we’re using a 25-basis point increase in May and then flat thereafter in terms of Fed moves. And on the margin side, I would expect something roughly similar to what we saw in Q1 in terms of impact to margin. I would point out that Q1, particularly the last month of Q1, that margin was weighed down by the excess liquidity that we carried. But as we look out for the balance of the year. So Q2 definitely see some compression in the margin close to maybe not to the extent in Q1, but maybe close to it. And then, the second half of the year, better performance in terms of what kind of declines we would see in the margin.
But I do think that given our rate outlook, we think it’s reasonable to see some margin declines for the balance of the year. Again, not as meaningful as they would be in the first half, but we still see some compression in the margin in the second half of the year.
Operator: Our next question will come from Kevin Fitzsimmons with D.A. Davidson. You may now go ahead.
Unidentified Analyst: It’s actually Christian on for Kevin. So just a quick one for me. I noticed that you closed a few offices, particularly with loan production and mortgage. Meanwhile, your mortgage income was up significantly compared to last quarter. Just wanted to know if there was something that you saw in those areas than of those office closures? Or are you doing that more related to cost savings?
Kevin Chapman: Hey, Christian, it’s a couple of things. It’s a little bit of both. It was driven by a look at our real estate and how we could better manage the noninterest expense related to all of our operations. But what we saw was the opportunity in many mortgage markets was to consolidate those mortgage personnel into the branch. We typically had a close — branch that was in close proximity. And so it was to maximize performance as well as minimize the expense and related to carrying occupancy and equipment, maybe duplicate occupancy and equipment in the same markets. As it relates to mortgage, not only on the expense side, the mortgage group has cut out a significant amount of expense preparing itself when rates more normalize or if there’s a potential in the future that rates may fall, we feel very good about how we’re positioned from the costs we’ve taken out, some of the fixed costs that maybe we built up in better times.
But also, we’ve hired — we’ve been very active and proactive in hiring mortgage personnel mortgage producers that will help drive higher level of production as rates maybe tick back down or moderate and stay at levels that we see right now, we see that pipeline holding and possibly growing a little bit.
Operator: Our next question will come from Michael Rose with Raymond James. You may now go ahead.
Michael Rose: Just a few follow-ups here. I understand the addition of the broker deposits. Can you just remind us. I’m sorry if I missed it, but what the tenor of those is and what the expectation would be just for broker deposits in general. I mean, would you still expect to have some, assuming the kind of the crisis that we’ve been in kind of begins to abate here in the next couple of months. Thanks.
Jim Mabry: Michael, this is Jim. So they stand roughly today at about $850 million at quarter end. And the cost of those brokered monies is about 5%, and the average maturity is about half a year. Going forward, I mean a lot is going to depend upon what we’re able to do on the core funding side. And obviously, Mitch talked about loan growth. We continue to have no interest in purchasing investment securities. So we’ll benefit from that roll off of about $25 million a month. So where that takes us in terms of that broker deposit balance, I don’t know. But certainly, we’re going to evaluate that versus our other opportunities to fund the balance sheet, be that advances or things that we can do in terms of specials on CDs and money markets. I don’t know exactly where it ends up sort of hard to predict, but we’re certainly not adverse to accessing that source of funding.
Michael Rose: Perfect. Thanks for that. Maybe just switching back to the margin. If you can just kind of walk us through kind of the dynamics that have led to the decline in the gain on sale margin q-on-q. I think from other banks that have seen reported in mix, I mean some up, some down. There’s obviously various reasons for that, but just wanted to get some color on you guys specifically. And then, obviously, understanding that the backdrop is still fairly competitive. Any expectations for that gain on sale margin as we move over the next couple of quarters and when you think the mortgage company can get back to profitability? Thanks.
