Bob Fehlman: And I’d just point out a couple of things on that trade for our conservative nature for our company. First off, we did this in smaller sizes. You know, we’ll continue to look at is there another opportunity to do another small size. You know, we’re not a rip the band aid off and get it all done at once and take a big hit. It’s really measured over time is number one. And the other is, we thought, in this case, it was very prudent to reduce the balance sheet by paying off some of our non-core funding. So that’s what we did here. We didn’t take the money and go back and buy higher rate securities to offset it. It was a better to reduce the balance sheet and take risk off the balance sheet effectively.
Jordan Ghent: Perfect. Thanks for the answers.
Jay Brogdon: Thanks, Jordan.
Operator: [Operator Instructions] The next question comes from Gary Tenner with D.A. Davidson. Please go ahead.
Gary Tenner: Thanks. Good morning. I had a couple of questions about kind of the deposit guide and thoughts around, you know, the retail and brokered CD maturities in the first quarter. As you kind of looking for down deposits in 2024 and given the amount of, you know, maturities in the first quarter, should we think about kind of the run-off there being a little bit front-loaded and then more stable over the course of the year, or do you expect to kind of renew the lion’s share of maturities coming up in the first quarter?
Jay Brogdon: Yes. I think a lot of that actually will be a function of loan demand. We’ve got loan demand in excess of other cash flows off the balance sheet, et cetera, then you know you’d see us — you’d see us more renewing. I point back to the fourth quarter. The ability to sell some securities in the quarter as well as to have some core deposit growth allowed us to reduce a lot of the wholesale funding. So it’s not going to be straight line, Gary, is kind of the answer. It’s going to be a little bit dependent on factors such as seasonality, timing of cash flows inherent in our balance sheet, loan demand, et cetera, but I wouldn’t — I wouldn’t think the right expectation is to believe that it’s all going to be front-end loaded.
It’s going to be, you know, us evaluating really through the profitability wins the best opportunities to invest our capital and how we’re going to fund those investments. And if that is to shrink wholesale funding, that’s what we’ll do. If we have loan demand that we like the pricing and the credit aspects of, then we may — that may help us or require us to stay at somewhat more elevated levels in some of those areas.
Gary Tenner: Great. I appreciate that. On that same or similar topic, as it comes to those renewals or the maturities, do you think about trying to shorten the duration of what’s rolling over, so that assuming that Fed does start to cut, you could reprice those lower sooner — versus 12 months out or something?
Jay Brogdon: Yes. In fact, we’ve already done that and that was a decision we have made at some point in the year last year. You know, I’ll go back to the fourth quarter of 2022 and early in 2023, and we were actually extending liabilities at that point a little bit. And that’s why you see higher volumes in the fourth quarter and first quarter, if some — and some repricing around some of that funding. So where we were making decisions then to extend. We’re making decisions now — really prior to now to shorten on some of that for the reasons that you mentioned.
Gary Tenner: Great. I appreciate that. And I hopped on a minute late, so I apologize if I missed that first question. But in terms of the rate sensitivities and you provided I think 25, 50 and 75 basis points cuts, what are you — what’s the base case that you’re using internally in terms of where you actually think the Fed does this year?
Jay Brogdon: Three rate cuts is what we’re kind of modeling everything to internally. And I did mentioned this earlier. So I’ll mention it again to you here, Gary, that third cut comes really late in the year. So, for all intents and purposes, it’s kind of two cuts, if you think of it that way.
Gary Tenner: Okay. So effectively in line with dot part. Is that about right?
Jay Brogdon: Yes. Much more aligned. Our thinking is much more aligned to the dot plot for internal assumptions than to the forward curves. That’s exactly right.
Gary Tenner: All right, great. Thanks, guys. Appreciate it.
Jay Brogdon: Thanks.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to George Makris for any closing remarks.
George Makris: Okay. Thank you very much. I hope it’s understandable that we’ve tried to be real clear about our execution in this volatile market. And I think our results reflect our success. And just want to assure you that we will continue to conservatively manage our business and create as much flexibility to react in these current market conditions. As was just mentioned, there are some discrepancy between the dot plot and the forward curve, and we’re not betting on either one of them at this point in time. So we expect the same kind of conservative management that you come to recognize at Simmons as we go forward. And we’ll look forward to having more good calls in the future. Thanks for joining us today, and have a great day.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
