Brady Gailey: That’s great to see. And then my next question on the $175 million buyback authorization. I think that if you repurchase it today, it would be about 7% of the company. So fairly notable size. Is that something that you have in place that you could use on a rainy day, or is that something that you really expect to be active in 2024?
Jay Brogdon: Yes. Brady, our prior plan was coming to the end in January of this year. So this is really just re-upping it. We have no different strategy than we did last quarter and all of last year. You know, we still think we’re in some challenging times in banking is trying to fight through on the NIM side as we talked about where’s loan growth going, where is the capital, where does it need to be deployed and what levels do you need to maintain. So, we focus on that. And we think it’s prudent to keep a stock buyback plan in place. This is a two-year plan. But our strategy is still on our capital is to use it for, first for organic growth, loan growth. Second is to pay cash dividends to our shareholders. We’ve been paying net add for over 115 — 115 years.
We don’t want to be the group to mess that up. I’d tell you that. And then after that, it comes down to what is the best use of that capital at that point. And one of them is stock buyback. Another is, is there opportunities on balance sheet optimization with bond sales like we had this quarter. And so, we’ll analyze it, but I would tell you in the stock buyback, our strategy is still to stay within the realm of our earnings for the quarter, less cash dividends would be the maximum amount we would buyback.
Brady Gailey: Okay. And then finally for me, if you look at full-year 2023 and if you look at the ROA on a core basis, it was running about 75 basis points. I think Simmons in the past has talked about longer term wanting to get to an ROA of 150 basis points, so about double that. I realized profitability is under pressure for the entire industry. So you guys are not alone. But how do you think about the path to get Simmons towards a higher ROA and ROE level?
Jay Brogdon: Yes. Brady, I think very first and biggest aspect of that goes back to our balance sheet optimization efforts. Again, we’re pleased with the results in the fourth quarter and kind of chipping away at that. That’s a function of rate and time at the end of the day, but we are incredibly proactive and will continue to be in our approach to accelerate that timeline where we can. And so, we’ll continue, I think, to be prudent and balanced and how we look at that. But when you think about our ability to kind of get a loan-to-deposit ratio in the area of 90% plus or minus, you think about our expense infrastructure and what we pencil out in terms of the results of the Better Bank initiatives that we’ve worked on and the scalability that that’s put into our system.
You know, I think those are very realistic results for us to work toward. Honestly, when I think about that, the biggest wildcard to me really is kind of on the fee side. Fees are under pressure. You know, there are some things that are out there and being proposed that we’ll just have to deal with and react to, as an industry. But I still think that guidance that we’ve given in the past of, you know, optimized balance sheet that Simmons Bank and within our strategy and business model that 125 to 150 range of ROAA is what we ought to be focused on when and where our goals ought to be wrapped around.
Brady Gailey: Okay, great. Thanks for the color, guys.
Bob Fehlman: Thanks, Brady.
Operator: The next question comes from Jordan Ghent with Stephens Inc. Please go ahead.
Jordan Ghent: Good morning, guys. I just had a few questions on the securities restructure that took place. Could you guys give any insight on when the restructure took place and the impact it had 4Q ’23 NII, and then maybe what’s remaining, if there is any for 1Q ’24?
Jay Brogdon: So, the transaction that we consummated in the fourth quarter is fully past tense, nothing carries into the first quarter, albeit a good portion of the trade closed late in the quarter. So you know what that translates to is about 1 basis point of net interest margin impact in the fourth quarter. So I think margin improved 7 bps from 2.61% to 2.68% linked quarter. You can give about 1 basis point of credit to that as a result of the trade. And again, the reason that it’s only 1 basis point is a lot of the trade closed, you know, in the latter part of the quarter.
Jordan Ghent: Perfect, thanks. And then, maybe just one follow-up on that. And there weren’t — just to clarify, there weren’t any securities repurchased with that? It was used to pay.
Jay Brogdon: We did 100% related — I mean, we were selling securities at 1.81% and paying off wholesale funding at north of 5%, that was the trade.
