John Campbell: Okay, that’s very helpful. Thanks for the color.
Operator: [Operator Instructions] We will take our next question from Geoffrey Dunn with Dowling & Partners. Your line is open.
Fred Eppinger: Hey, good morning.
Geoffrey Dunn: Good morning. So, I wanted to go back to the expense side here. Fred, a year ago you had a chunk of expense for office closures and you [Technical Difficulty] you weren’t going to cut too deep into expenses. You’re investing for the future. Here we come this quarter, there’s another chunk of office closures. How do you identify these opportunities? And kind of leads into my second question. I think there’s an emerging debate here on what ’24 actually ends up being. If we don’t get rate cuts towards the end of the year and mortgage rates stay higher than what Fannie and certainly the NBA are forecasting. I’m starting to wonder what the risk is of maybe only 5% type of market rather than a 20% growth market. So, I know you said you kind of bounced off the bottom, there’s not much more you can do with expenses.
But year over year, obviously we saw that you could find more. It doesn’t sound like the company is positioned for a flat or 5% type of growth market in 2024. So can you talk a little bit more about how you go about identifying expense saves and what are your actions if we are looking at a 5% market?
Fred Eppinger: Yeah, so again, Geoff, really good question. So there’s a couple ways to think about this. So we look at this kind of MSA by MSA. And within the MSA kind of this geographic pockets, and we’ve made a lot of improvement in say 30 markets or something in the last couple of years to get share and so our margins are good. But we still have kind of what I would call these sub-geographies where we were trying to get them to the scale and that we felt we needed to get them to. And at some point, you just feel like you can’t given the market and to your point, the slowness of the comeback, that it was going to be kind of really hard to get there in some kind of time frame that was fair. Also, we have some consolidation opportunities from the acquisitions we’ve done, where you have duplicate kind of locations that are closed together, that you can kind of do some things geographically with real estate to manage the business.
The other thing that has happened is some of these operational initiatives obviously have freed up our ability to not have to hire folks if people leave, et cetera, because of the efficiency that we’ve been gaining through our investment. So we try to be really thoughtful. My point is that we’ve done a lot and there isn’t a lot left to do. And so I do believe seasonality is going to help us, even if the market isn’t as robust as some of the scenarios are. So the first quarter is going to be quite challenging, but I think the seasonality is going to help us in the second quarter. So this is why when I talked about the first six months, we’re being really prudent and sequencing investments and stuff, because I think we do have to manage ourselves like it could be what you just described, that’s the way we’re going to have to manage ourselves and be really thoughtful and careful.
There isn’t a lot more — we don’t have a lot of excess here. It doesn’t mean that we are not thoughtful about managing our business and looking at under every rock and being thoughtful about sequencing, timing, and stuff. But I don’t see a lot and I’m not planning a lot.
Geoffrey Dunn: If — I said the market was going to look exactly like it did in 2023, is your 2024 result better?
Fred Eppinger: Yes. So not the first quarter, but it would be a tad better because we’re going to bed up the spot, right? And again, so we’ve done a better job on investment income on escrow right through the whole year. We’ve got our operating [Technical Difficulty] a little bit more efficient. So all things being equal, be a tad better, it’s just going to be clouded by the first quarter.
Geoffrey Dunn: Got it. Okay. Thank you.
Operator: We have no further questions on the line at this time. I will turn the program back over to our presenters for any additional or closing remarks.
Fred Eppinger: Okay. And I want to thank everybody for joining us for this quarter’s call. I really appreciate the interest in Stewart. Thank you so much.
Operator: This does conclude today’s program. Thank you for your participation. And you may disconnect.
