Cory Newsom: Yes. Yes.
Graham Dick: Okay. All right. I just wanted to make sure I understood that correctly. All right. That’s all from me guys. Thank you.
Curtis Griffith: Thanks, Graham
Cory Newsom: Thanks.
Operator: Thank you. Our next question today is coming from Brett Rabatin from Hovde Group. Your line is now live.
Brett Rabatin: Hey, guys. Good morning.
Curtis Griffith: Good morning.
Cory Newsom: Good morning.
Brett Rabatin: Wanted to first just talk about the deposit initiatives. And you talked quite a bit about stabilizing DDA. And I know you’re hopeful for treasury management to possibly be a part of that. Can you guys maybe go through a little bit on the stabilization of DDA, what that entails in terms of product or strategy? How you’re going to achieve that? And then just maybe talk a little bit about the growth of deposits and where you expect that to come from?
Cory Newsom: Yes. So, Brett, good morning. This is Cory. So we’ve had this conversation. We talked about our sales quite a bit. I mean we’d like to sit here and tell you that, I mean treasury’s got a quarter-over-quarter just immediate change. It’s not going to happen. You know what I mean? our — what we’re trying to do is an overall initiative that chases the trend long-term and the way that we chase relationships. Lot of it is going to come back specifically around the lending relationships and making sure that we require much more emphasis on the deposit gathering. So historically in the past, our lenders have always — we’ve always had deposit a bit of the forefront when we looked at relationships, but we were never as picky about the type of deposits.
Now we’ve really changed that focus in incorporating that into the loan covenants that we have, requiring the full operating accounts, all of the things like that, that really come back around. But when we talked about continuing to step up delivery on the treasury side, I mean, it’s real. I mean, we continue to tweak till we get treasury leadership the way we really want it, and we’re there. We are continuing to enhance our team. And we’re focused on education with our lenders and our staff better than we’ve ever been. So I mean, it’s not a sprint. I mean it’s a marathon of one that I think that we’re continuing to build it in the right way, but that’s the focus of our deposit initiative. I mean we — it’s all day long every day, looking at the value deposits, which ones are sticky, which ones that really do mean core to us, and which ones that will ultimately help us drive profitability in the relationships.
Brett Rabatin: Okay. That’s helpful. I appreciate that. The other thing I wanted to ask about was the expenses going forward. Obviously, they’ve been managed well the past year and maybe some of that mortgage incentive compensation going down, which should probably revert some this year, but as you indicated, aside from the mortgage piece, are there pressure points inflationary or otherwise that would drive expenses in ’24 relative to ’23?
Steven Crockett: Brett, this is Steve. So one other piece that we didn’t specifically talk about earlier, but we did previously during the year, some of our technology initiatives that we’ve been working on during ’23, in particular, some of our transition to the cloud is some — we’ll have some increased expenses. Some of that was just being built out and some of it was infrastructure and different things that we would start seeing some more depreciation on during the current year. I mean there’s always a little bit of inflationary pressures on some of the other items. I don’t think there’s a — I don’t think we’re looking to drastically increase noninterest expense, absent mortgage, just changing a whole lot as far as volume and production that would warrant that.
But outside of that, again, we should be probably closer to the Q3 number. I think we were at about $31.5 million versus $30.6 million. I don’t think we’ll be quite that high, but fourth quarter was definitely down a little bit more than probably what we’ll see on a go-forward basis.
Cory Newsom: This is Cory, though. I think to go along with what Steve was saying, though, I do anticipate the mortgage side actually picking up from the expense number in second half. I mean we’re very much getting geared up for that because we are kind of proud of the fact of the way we managed mortgage through the last 18 months. And I mean we basically managed to a net zero. That’s been our focus to make sure we could keep capabilities in place but manage the — keep it nimble like we’ve always said we would do. Now we feel like that we’ll be making sure that we got the right productions in place to really take advantage of the step in the second half of the year.
Brett Rabatin: Okay. Good color there.
Curtis Griffith: Brett, this is Curtis. Yes, one more quick point. And again, this is I’m giving you a reason not an excuse. As we have grown our team and added real high-quality people to that, we’re doing so in what to me is probably the toughest hardest market for banking talent that I remember in 50 years of doing this, and so to bring the people on that we’re doing, which we know is the right thing to do. The personnel cost is going to be what it is to get them and keep them. So there’s just a little extra tightness right there that’s — over time, it’s still going to generate a lot of good revenue for us. And if we’ve got to have the right people to do it across all sectors, not just lenders, but it doesn’t come cheap, and we’re not going to lose sight of it.
Brett Rabatin: Okay. That’s helpful. If I could sneak in one last one. You guys mentioned M&A in the call, and it sounds like you’re somewhat optimistic that you’ll see some activity and maybe you guys will be able to do a deal that makes sense to add to the platform. Can you guys talk about, from here, some folks’ strategy has evolved, they’re now looking to maybe buy more rural franchises that are deposit funded versus metro markets. Can you guys just talk about what’s your M&A strategy would be from here from a geography perspective and what you’d look for a community bank to bring to your platform?
