Commissions are up $400,000 to $500,000. But that’s against revenue that was up. Kind of core revenue, if you include the gain on mortgage servicing rights, core revenue is up over a million. So, getting the right structure there in mortgage, having that right balance of variable revenue against variable expenses has been a key effort of our team. We think they’ve done a really good job, and we’re optimistic about mortgage. I say that to say it’s a tough environment out there in mortgage. We all know that. But I think the investments we’ve made, as well as the improvements we’ve been making over the last two years, we’re positioned well for mortgage to continue to be profitable.
Michael Rose: Thanks, Kevin. I appreciate the color and congrats again.
Kevin Chapman: Thanks, Mike.
Michael Rose: Thank you.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mitch Waycaster. Pardon me, there’s actually another question from Stephen Scouten with Piper Sandler. You may now go ahead.
Stephen Scouten : Hey, everyone. Thanks for taking my question there. I just wanted to follow up on the comment around new loan yields potentially moving up to that 8.50, 8.60 range. Do you think those incremental costs of deposits can kind of stay in that range you were speaking to, and thus we could see some widened spreads on incremental production? Thanks.
James Mabry : Good morning. This is Jim. So, yes. Again, nice improvements in new and renewed yields, and the 8.60 [ph] did include RBC, ex-RBC. It was around 8.30 [ph] for the month of March as a snapshot. I would like to be optimistic and think that those spreads could stay where they are or potentially widen, but I think the reality is we’re still just a tough deposit market. I take what we’re seeing on the loan yield side and feel good about that, and I really like those trends, but I’m cautious in banking in too much that will go to the bottom line, Stephen, and that’s why I think overall margin, I think our best outlook here with a no rate cut environment is for a pretty stable margin, at least near term.
Stephen Scouten : Okay. That’s helpful, Jim. And then just maybe one other question for me if I could. I mean your loan loss reserve, I mean 1.61 [ph] relative to peers, is a fair bit higher, and credit quality looks stable, only 1 basis point in a net charge last year in the quarter. I mean how do you think about that reserve moving forward? I mean is it really mathematical based on kind of economic scenarios and kind of how you weight those things, or is there any kind of visibility you could give us into how that percentage might change moving forward?
David Meredith: Hi, Stephen. Good morning. This is David. And so to answer the second part of your question, it is mathematical and it takes into account different economic factors. In this quarter there was some movement in that number. Also, we had loan growth. We had a fund for loan growth as well as we talked about earlier. We had some negative credit migration in a category that we had to allocate for. So that number is mathematical. We have kept that number up where it is based on the economic forecast while we continue to believe there’s an economic event that we’re going through. And so some of those economic variables within our two factors are a little bit on the more elevated side. Just as we work through it, as we continue to see things settle out in the near future, I think if we forecast the past we would expect to see that number migrate down. But it would just be looking for the changes in those economic factors to drive a change in our ratios.
Stephen Scouten : Okay. Thanks for letting me sneak in here late. And Kevin and Mitch, congrats on the transitions and all what’s to come. Appreciate the time.
David Meredith: Thank you, Stephen.
Operator: Our next question will come from Jordan Ghent with Stephens Inc. You may now go ahead.
Jordan Ghent : Hey, good morning. I just kind of had a follow-up question to your comments on the variable expenses. And just wondering where you see an expenses kind of go from here and kind of on a quarterly basis through ’24?
Kevin Chapman: Yes. Hey, Jordan. It’s Kevin. Thank you for the question. If we look at expenses, let’s kind of take Q1 expenses at that $113 million range. If you look at each of the individual components, all of the line items are trending downwards, excluding kind of one or two of them. And that advertising, that’s one of them that increased. But again, that’s where we had that $1 million to $1.1 million charitable contribution that’s going to flow through taxes. In the other line item, that’s where you had the $700,000 increase related to the special assessment. If you back those out, kind of our run rate is in the $111 million range. And just as we look out kind of in the short term, Q2, we’re going to be in that $111 million, $112 million range, $111 million to $113 million range.
We’ve got merit increases that went into effect late in Q1. There’ll be a full quarter impact. And then as we get into the latter half of the year, that’s when we see that there could be some opportunity for relief on the expenses. Just with the initiatives that were taken internally, we could see some relief there. But just in the short run, as we get into Q2, as we, again, as we more normalize the run rate related for the merit increases, that could be flattest to what we see this quarter.
Jordan Ghent : Perfect. Thank you.
Kevin Chapman: Thank you, Jordan.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mitch Waycaster for any closing remarks.
Mitchell Waycaster: Well, thank you, Anthony. And thank each of you for joining the call today. We next plan to meet with investors at the Gulf South Conference in New Orleans, beginning on April the 29.
