Jefferson Harralson: It’s hard on the assumptions, but I would say we’re temporarily liability-sensitive. Because we do have more assets tied to — so for in Prime than we have liabilities. So, that might — you might think of that as traditionally asset-sensitive. But I would say that those numbers are closer than they ever had been before because of this $3.6 billion that we have actually tied to — on the liability side, tied to SOFR and Prime. So, that number would have been $600 million pre-Silicon Valley. So, the numbers are much closer on the assets are going to move directly with rates. And then from there, you’re not going to see a lot of prepayments on the first 100 basis points move, because these mortgages are pretty far out the money, so they’re behaving more like fixed rate loans temporarily, so you get that benefit.
Now, that’s not going to be as rates go way down. But in the near term, you’re not going to see increases, we don’t think, of prepayments because of that. So, it’s a little bit peculiar as I think we’ll end up asset-sensitive, but the prepayments are just so far out of the money. Now on the fixed-rate loan question, if I answered that one, I hope I did, is that, if you look at variable rate loans that are variable or scheduled to reprice within a year, then you add to it fixed-rate loans that mature within a year, it moves from about 32%, 33% to 36%, with adding into fixed maturity. So, you have 3% — you’re adding 3% to the floating rate category if you add in fixed-rate loans soon to mature. So, 36% with that.
Catherine Mealor: Okay. Got it. So, that 36% — that $6.6 billion or 36% equivalent, that includes fixed rates that will mature this year?
Jefferson Harralson: That’s correct.
Catherine Mealor: Plus your variable rate loans? Got it.
Jefferson Harralson: Correct.
Catherine Mealor: All right. Very helpful. Thank you, Jefferson.
Operator: Our next question comes from Russell Gunther from Stephens. Please go ahead with your question.
Russell Gunther: Hey, good morning, guys. Just a few follow-ups. One [Technical Difficulty] peak on the way up. But given the dynamics you just talked about with the funding profile and rate sensitivity there, do you guys think that that can ultimately outperform on the way down? And how are you thinking about that from a timing perspective?
Jefferson Harralson: Yeah. So, we are trying to — we are pushing for having it outperform before rates go down. Rich talked about some of the rates that we’ve lowered. I don’t know, I’ve seen some of the calls where some banks are talking about lowering, but I don’t know if that’s going on across the industry right now. So, I think we can begin to outperform before you start seeing rates come down. Now, as we all know, models have a lot of assumptions in them, and one of the biggest assumptions is going to be how competitors react. There are a lot of CDs maturing in the first half of this year. There is going to be — there might be some more liquidity-constrained banks that we’re going to need to price again as to hold our balances where we want them to be.
So, it’s a really tricky year to forecast, because if we come into some of our deposit pricing meetings and we’re hearing about specials, last year, you’ll remember, there was a special in Tennessee that we all had — a lot of us had to, I don’t know about match, but get close to. The competition is going to be a big piece of it, but we think we can chip at it with our strong balance sheet and our strong deposit base before rates are going down. Because relying on our down beta has been more than other banks has — it could be tough because I just don’t know what the competition is going to be doing.
Lynn Harton: Jefferson, I would add, the feedback from the market or people out in field is that the exception pricing request is way down.
Jefferson Harralson: Right.
Lynn Harton: So, we’re not seeing the same demand for pricing increases in matching that we’ve seen previously.
Russell Gunther: Thanks, guys. And then just switching gears a bit to the expenses. So, the $3 million swing this quarter on the self-insured, I would think that could be pretty volatile but just contextually, is that an elevated results and a bit one-time in nature? And then just bigger picture, I hear you guys actively trying to manage for the year, how are you thinking about just overall noninterest expense growth for ’24?
