But if you’re just using that the reported as your baseline, we think expenses are up close to 2%, 1.5%, 2.5%. If you back out those items, kind of our core run rate of expenses are going to be closer to 3.5% to 4% increase. And all of that is before RBC. That’s just the legacy Renasant expenses. So we will have some pressure on expenses as we look at headwinds on revenue. It doesn’t detract us from our goal of our efficiency ratio. We’ve made a lot of progress. There’s a lot of momentum in the company. There’s a lot of energy around maximizing returns. And we don’t think that that subsides in 2023. It continues to remain one of our main initiatives, and if revenues adjust, our expenses will adjust accordingly.
Catherine Mealor: Great. All right. Thank you so much.
Kevin Chapman: Thank you, Catherine.
Operator: Our next question will come from Michael Rose with Raymond James. Please go ahead.
Michael Rose: Hey, guys. Sorry about that. Morning. Just wanted to kind of touch on mortgage. Good morning. Just wanted to touch on mortgage here. It’s down to about 3% of revenues, obviously, a lot of headwinds, but it’s a lot higher, a couple of years ago. It seems like the headwind has been fully absorbed. But how should we be thinking about the mortgage business, here, both on the expense side, and then on the, the origination side, just given expectations for gain on sale margins, hopefully, we’ll see some rebound in the back half of the year. But just wanted to get some broader color and commentary on mortgage. Sorry, if I missed it in the prepared remarks. Thanks.
Kevin Chapman: You’re good. Look, as we look at mortgage. And you’re right, if you go back, a couple of years ago, mortgage as a percentage of revenues was much higher than the 3% to 4% that it is today. If you look at it on a more normalized basis, so if we go back to pre-20, mortgage revenues represented about 6% to 8% of total revenues, and we expect mortgage to revert back to that average revert back to that mean. It’s still a volatile time. I don’t think that’s a surprise or a secret that mortgage is still volatile. But we are actually seeing opportunity that comes with that volatility. The disruption in the markets created opportunity for hiring. And I reckon we recognize that that’s a little bit counter to maybe what the trend should be.
We have reduced our headcount in mortgage since the end of 2021. We reduced our headcount about 30%. And that includes some hiring some strategic hiring that we’ve done on the production side. And as we see that strategic opportunity or the hiring of strategic opportunities we’ll continue to look at that. We’re seeing some positive trends just in the beginning of the year. Margins continue to be tight. But we have seen our pipeline grow about 30% since the beginning of the year. Our pipeline €“ mortgage pipeline is about 130 right now. It’s about $100 at the beginning of the year. So there are some signs that production is coming back. But again, it’s variable on rate, and it’s variable on product, and product and inventory. And all of those just feel a little bit volatile right now.
But we feel good with where we’re positioned for mortgage. And I think back over as we look over time, mortgage revenue is going to, again, come back to about that 6% range of total revenues from its current position in that 3% to 4% range.
