Curtis Griffith: Well, I’ll stick with what I said. I think in the call, the recorded part right there, that we believe that we know what we’re looking for, and that is — I got a script back in front of me, a bank with the right culture, and that’s number one because we’re not going to try to make a culture that doesn’t look like us fit in. It’s — we’ve seen too many failures with that. Excess liquidity, a stable deposit base and the valuation that makes sense. Well, you look at excess liquidity and stable deposit base, to me, you’re almost by definition in Texas, you’re looking at more rural markets. So I think you’re quite right. And that’s the way some other people are looking now too. For so long, they didn’t — they weren’t interested in banks out in smaller communities, and now we’ve seen that pick up.
So, yes, we’ve had some phone calls. We’re going to have a few discussions. We’re still not anywhere close to doing a deal. But if the right one comes along, we — and right one also means the right size in all of that as well, then we believe we’ve got the capital and we’ve got the people, and we believe we can make it work. But after watching what we’ve seen right here in our Lubbock market and the Permian as well, in the past couple of years, we don’t want to go down the road of having the kind of difficulties that we’ve seen from some other acquirers. I’ll just leave it at that.
Cory Newsom: Brett, this is Cory. It’s kind of interesting though that you talked about the fact that people are starting to recognize the value of some of these rural deposits. We always have. That’s the thing that back even when we went public in ’19, we had discussions around this. We have always seen the value of the rural deposits. And I think that probably puts us in a better position than a lot of the other ones that are just kind of changing their focus and looking at it. But I do think that we’re very good at it and we’re very focused on being community-minded when we lead some of these rural markets.
Curtis Griffith: If you’re going to have do well in those smaller markets, you really have to understand that you have to be the hometown bank, no matter where your headquarters are, and that’s always been our philosophy in all of our smaller markets.
Brett Rabatin: Okay, great. That’s really helpful. Thanks for all the color.
Curtis Griffith: Thanks, Brett.
Operator: Thank you. Our next question is coming from Joe Yanchunis from Raymond James. Your line is now live. Joe, perhaps your phone is on mute. Joe from Raymond James, your line is now live. [Operator Instructions] Our next question is coming from Mark Shutley from KBW. Your line is now live.
Mark Shutley: Hey, guys. Good morning.
Curtis Griffith: Good morning, Mark.
Mark Shutley: So on the buyback, I know you guys continued that this quarter and sort of finished the current authorization. Do you still favor the buyback as sort of near the top of the list as far as priorities for ’24. And do you expect a new authorization coming?
Curtis Griffith: It’s going to be a decision by the Board. I think clearly, we were doing the right thing at the time in ’23. We’ll take a hard look at it. In fact, it will probably be discussed in our February Board meeting. And we’ll decide where we think we ought to be for the year. As long as we have the capital levels that we do, if we collectively think we’re trading at a level that makes that a good investment for our shareholders’ money, then yes, I think we’ll reauthorize and have something out there. But right now today, I can’t give you any real firm metrics on it, but it is going to be a topic of discussion for sure. Obviously, I guess in terms of priorities on things, we’re going to be sure we have plenty of capital for organic growth because we do think we’ll get a chance to do some during the year.
And we’re going to keep paying a steady dividend. And if a deal came along for M&A, we’d want to know we’ve got to the dry powder to do that. But right in there, it’s about that same tier is buyback of our existing shares. And as long as we think it’s a good value for the money, we’re not going to be bashful about doing it.
Mark Shutley: Great. That’s helpful. And maybe just one for Steve. Apologies if I missed this, but when you think about the NIM for 2024. What are the rate cut assumptions that you all are using when you think about those margin projections.
Steven Crockett: Yes. So right now, and again, it’s a moving target. But as of right now, we’ve kind of just got two rate cuts baked in at this point, in the first quarter, early second quarter would be kind of the first one and then later, I think end of third quarter, first of the fourth quarter is when we’ve got the second one. So again, that’s — the viewpoint on that can shift day-to-day sometimes, but I know some people have got more up to maybe four [Technical Difficulty], but at this point, we’re just kind of baking in two.
Mark Shutley: Got it. Thanks. That’s it for me guys. Appreciate it.
Steven Crockett: Thanks, Mark.
Operator: Thank you. Next question is coming from Joe Yanchunis from Raymond James. Your line is now live.
Joseph Yanchunis: Good morning. Sorry about that, are you able to hear me?
Steven Crockett: Hi, Joe.
Curtis Griffith: Yes, Joe. We can. Go ahead.
Joseph Yanchunis: Perfect. So just kind of piggyback off that rate question, what’s your model sensitivity to a 25 basis point rate cut? And as we think about that, what kind of deposit betas are you assuming on the way down?
Steven Crockett: So I’ll start here. I mean, as far as 25 basis point decline. I don’t have the 25 here in front of me, but we definitely are liability sensitive. But we do — on the deposit side, we’ve got about — we’ve got about 20, I’d say, close to 20% of the deposit book that is tied to the short-term rate that would reprice down most of that full 25 basis point decline within 30 days or so. The majority of our public fund book and our brokered deposits and then some of the other indexed accounts that we’ve got at a — for the full 1% drop, I think we’re about a 3 — around a 3% increase to net interest income, sorry, I don’t have those down to the 25 basis point level.
Curtis Griffith: This is Curtis, Joe, one of the things that will be helpful for us on this is we have continued to be very reluctant on increasing our CD balances out there. We haven’t been running any specials or any of that. So the bulk of our deposits are in transaction accounts and we will be able to adjust those rates fairly quickly. Another factor we talked — touched on treasury management, one that we can and will certainly move because you can move it in very small increments as our earnings credit rate. To the extent that we’re using that to the treasury management side, we’ll certainly be aggressive in trying to adjust those as rates in fact do decline.
