Julie Shamburger: Yes, Mark. The biggest things driving that is our salaries and employee benefits. And then there is additional, a little bit over $3 million for additional software technologies that is built into that number as well. And then we have budgeted for 2024 about $1 million. We’re going to be combining two locations in one of our smaller markets and probably be disposing off one of the buildings. And so we budgeted for some loss there. So those are the three largest items. But still, I guess one of the bigger, the software and technology, we still can — we’re looking at more spend there.
Mark Shutley: Got it. That’s helpful. Thank you. And then with the securities restructuring and sort of the shifting of the balance sheet, I was just wondering more what’s your goal for that mix of assets, maybe by year-end and possibly longer-term currently sitting at, I think you said like a 64%, 36%. This is — yeah, kind of wondering how you anticipate the balance sheet playing out from here. Thanks.
Lee Gibson: As — with the shift in the restructuring of the securities portfolio right now, we have — the securities that we purchased are all, well, they’re at least — all of them total are at least at par. And I think they’re probably all at gains net. So that gives us a lot of flexibility without impacting the P&L to sell those securities if we want to put them into loans and if the loan growth is greater than what we’re anticipating. And a lot of that depends on what deposit growth is. If deposit growth can keep up with loan growth, then we likely will keep those securities. If not, we’ll be able to sell some of those securities with little or no loss and put that into higher-margin loans. So ideally, with the loan growth we’re going to see — we expect to see in 2024, we’ll move that mix to less securities and more loans. How much that moves? I don’t really know, but it would probably be a few basis points up in loans and down in securities.
Mark Shutley: Got it. Thank you. And maybe just one more. Do you still see yourself sort of not slowing down on the buybacks until the current authorization is used up? And I guess sort of, what’s your outlook for that as far as your capital [card] (ph) 2024?
Lee Gibson: I think what we’re going to look for there is, if there are opportunistic times to buy, we’ll be in the market buying. If the stock is at certain levels, we’ll probably pull back from that. I think our average buy price in the fourth quarter was somewhere in the $28 range.
Julie Shamburger: Most of that happened early. Well, in October — it went through late October.
Lee Gibson: So we’ll be looking for — hopefully, there aren’t any opportunistic times to buy stock, but if there are, we have that buyback available for us.
Mark Shutley: Got it. That makes sense. Thanks for taking my questions.
Lee Gibson: All right. Thank you.
Operator: Thank you. Our next question comes from the line of Matt Olney of Stephens Inc. Please go ahead, Matt.
Matt Olney: Thank you. Just a few follow-ups here from some previous questions. On the loan growth front, it looks like the construction loans continue to build a pretty healthy clip. Any more color here? Has construction peaked or you still see some more growth in ’24 in that book?
Lee Gibson: I think we’ll see some more growth in that. And they’re primarily loans that we originated in late ’21, during ’22, and then in early ’23. We’re not seeing as many new construction loans at this point in time. But these are just advances where that 40% to 50% equity has gone in, and now they’re looking for draws. And that’s what’s really creating that at this point.
Matt Olney: And remind me on this construction book, any concentrations by market. And does it lean more residential or commercial?
Lee Gibson: It’s primarily multifamily, home building and warehouse would be the three largest concentrations. And I don’t really think there’s a huge concentration by market. They’re pretty well split between DFW, Austin, and maybe to a little lesser extent, the Houston market.
Matt Olney: Okay. Appreciate those details. And then any color on the recent loan growth as far as what some of those yields are? So the new loan yields?
Lee Gibson: The — go ahead, Julie.
Julie Shamburger: The average for the quarter was 8%, I mean, on all loans.
Matt Olney: And that’s a, I assume, some kind of new and renewed yield. Is that right?
Lee Gibson: That is correct.
Matt Olney: I’m sorry, I missed that.
Lee Gibson: Yeah, that is correct.
Matt Olney: Okay. Perfect. Thank you. And then going back to the securities restructure, you gave us lots of good details there a few minutes ago as far as what was sold. I think I missed maybe some details about what was purchased in that restructure. Do you have anything from that point of view?
Lee Gibson: Sure. About 80% of the proceeds from the sale went into premium US Agency mortgage-backed securities, Fannie and Freddie, and about 20% of those proceeds went into loans. We just wanted to go ahead and get, with the rates doing what they’re doing and potential anticipation of the Fed doing something, we wanted to go ahead and get that money working. But right now the mortgage-backed securities overall are ahead again, and if we need to move out of those and into loans, higher-yielding loans, then we feel like we’re in a good position to do that without impacting the P&L on the sale of those securities at this point.
Matt Olney: Okay. And what were the yields on some of the securities that you purchased?
Lee Gibson: They were Fannie and Freddie, and the average yield was a little over 6%.
