Feddie Strickland: Got it. That’s helpful. One last quick one. Just curious if you’ve given a second look to the bank term funding program. I know some banks have used some arbitrage there. Just not sure if that’s something you guys have looked at or not.
Ron Gorczynski: We have been looking at it. And again, we’re developing a lot of strategy over the next $100 million that we’re going to deploy and that is a consideration in our thought process. We haven’t really picked the ideal purchases yet or how we’re going to do it, but that’s part of the candidates.
Operator: Our next question comes from Brett Rabatin from Hovde Group. Q – Brett Rabatin Guys, good morning. Wanted to start with the fee income outlook. I know you wanted to start with the fee income outlook. I know you mentioned $7.5 million in the first quarter. Billy, can you maybe talk about — I know you’ve got some initiatives and some thoughts on some products and maybe SBA. Are there any variables that would lead to a stronger fee income performance in ’24 relative to ’23, any initiatives that might push that kind of mid-single-digit number higher in ’24?
Billy Carroll: Yes. Brett, I guess, you’re speaking to just that noninterest income line. Yes, I think there could be. Obviously, we’ve continued to put resources into our SmartBank Investments group as well as insurance. I think that — I think that could be a big piece of it. Again, if we can continue to grow that AUM, our investments group now has about $1.2 billion in AUM, and it’s starting to become a little more — you see it becoming a little more impactful on our income statement. And insurance, while still relatively small, could provide some upside, too. I think bigger things for us, TM and treasury are important. We’re continuing to put much more in the way of resources behind that, especially in an environment where we’re really looking to grow deposits and those corporate deposits are big.
So the TM side of it is very important. I’d also mentioned our new Chief Banking Officer, Ad Martin Schrodt. Martin has got some great ideas related to experience he’s had in some of the regional banks that he’s worked with that I think could provide some upside there. So I think it’s a variety of things at the end of the day. Can I think we can improve on. Ron has gotten to absolutely swap fees, too. When you look at our Capital Markets group, this curve continues to stay a little bit in get some inversion in the curve. Using swaps to lock in some lower longer rates for clients with us floating them are out there as well. So I’m throwing a bunch of stuff out there. I think it’s a little bit of all of it, I guess, is my — to answer your question at the end of the day.
But the great thing about it is we built these different business lines. We’ve got a number of different levers that we can do. So I think it will just be a function of kind of what the market gives us, but I do think there’s nice upside there.
Brett Rabatin: Okay. And you specifically mentioned insurance, and I know we’ve talked about it. I know you like the business. Any thoughts on what some of the — some other folks have done in terms of monetizing high valuations to redeploy capital in the core bank business?
Billy Carroll: Yes. We’ve seen that. We’ve watched I know Nate and I talk about it, that it works a lot on that side with me. And we talk about it a lot. Again, like the business think that we’ve got the ability to continue to grow it and grow that revenue line. But we’re aware of what’s going on in the markets, and we’re keeping an eye on that.
Brett Rabatin: Okay. And then just lastly for me, I know you guys have a lot of experience in trucking and several board members are involved. What — can you maybe give us an outlook on what you’re seeing specifically in the trucking industry and kind of core outlook from just a fundamental perspective for that business?
Billy Carroll: Miller is still fairly involved in that number, why don’t you take that, just kind of your trucking outlook.
Miller Welborn: Thank you. I’m very optimistic about the trucking and transportation industry and specifically the bigger, more stable carriers that have been in it for years. I think you have some excess capacity came into the market with some inexperienced operators, kind of COVID area — pushed COVID era, pushed up a little bit of the demand, but I think that is kind of sorted out now. And I would say I’m probably bullish on the industry as a whole. It’s just such a vital part of the economy. The stable operators will do better and margin will continue to improve for them. So no worries at all about that industry.
Brett Rabatin: Well, appreciate the color.
Miller Welborn: Thanks.
Billy Carroll: Thanks, Brett.
Operator: Our next question today comes from Steve Moss from Raymond James. Please go ahead.
Steve Moss: Good morning. Maybe just starting off on the revenue guide here. Ron, you mentioned Ron, you mentioned $42 million in total operating revenue for the second half of ’24. Just wondering if you’re incorporating any rate cuts into that guidance.
Ron Gorczynski: No, we’re not. We’re assuming a flat rate environment and any rate cuts will make our performance that much better. So we want to be conservative in our looking forward guidance.
Steve Moss: Okay. Great. And just on that related subject, just curious, I missed the number. You mentioned — I missed how much of your interest-bearing deposits are indexed.
Ron Gorczynski: Sure. I think we’re doing 35% or 1.1 million — excuse me, $1.1 billion are indexed to — and we also have another $300 million that it’s to an internal index, but we feel confident that we can go ahead and follow the Fed rate cuts as appropriate.
