Malcolm Holland: It is definitely blocking and tackling. It’s definitely incentives. But it’s also just an effort for the last, I guess, now five quarters when we hired [indiscernible] at the beginning of last year to really focus on customer acquisition, new customer acquisition, we call it new logos. And it’s — you’re starting to see some of it. It’s been incredibly helpful. The problem with it, by design, it’s very small and granular. That’s what we want. And so, when it’s very small and granular, it takes a while to see some movement. But you’re seeing some movement. I mean, it’s slow, but it’s an accountability that we haven’t — accountability discipline we haven’t had here for a long time that I think you’re seeing some of the success of that.
Terry Earley: two additional comments. What Malcolm’s talked about, talking about, is franchise-enhancing deposit growth, which is not something we’ve seen around here in a long time. And some of it is structural. We’ve hired — we’ve made a concerted effort to hire the small business space, focus on revenues companies with revenues under $10 million. That is structural. It’s showing great progress. It takes time and you’re going to continue to see us, that’s where we’re going to push our investment dollars on the front end of the business.
Stephen Scouten: Got it. That’s very helpful. And then maybe just last thing for me. On the USDA business. I mean, do you have any visibility through the rest of the year in terms of funding for that program and kind of how you think about that? Maybe not so much on a quarter-over-quarter basis, but more so year-over-year was possible.
Terry Earley: Yes. Here’s what I would say. I would expect internally, we’ve taken our government-guaranteed loan forecast down 15% to 20%. Our SBA business is doing exceptionally well. In the USDA, it’s harder to get loans approved. We need to move upmarket in credit and down market and loan size. And so, as you think about all of that, you just got to believe the revenue — that’s what’s led us to lowering our internal forecast. But I do think it’s above what we did this quarter. I mean just, it was — as I said, it’s the most disappointing thing in the quarter. But I think the rest of the year looks pretty good. So, Stephen, that’s the best way I’m there to answer it right now.
Operator: Next question comes from Ahmad Hasan with D.A. Davidson. You may proceed.
Ahmad Hasan : Good morning, guys. This is Ahmad Hasan on for Gary Tenner. And can you talk about Slide 9. You mentioned term funding. You have around $2 billion maturing at a little over 5%. So, will you reduce balance sheet liquidity there? Or any thoughts on just replacing the funding and the relative costs or impacts on the NIM there?
Terry Earley: Well, I think as I was just saying earlier, I think to the wholesale market is clearly ticking up in terms of pricing there. And — but the cost of the NIM over the course of four quarters is 1 bps to 2 bps. That — it’s not — it’s about what 10 bps on the wholesale portfolio cost. It’s going to be between 1% and 2% and probably closer to 1% to 2% in terms of the impact there. The more retail market, we’ve got to just see how that market evolves. And we’re more relationship pricing there anyway. So, I mean I think it’s a headwind. I don’t think it’s an insurmountable headwind to the NIM by any stretch of the imagination. It’s just one we’ve got to be aware of. And we — it’s still our goal to stay relatively short because if rates come down, we want to be able to reprice down on this deposit portfolio.
I mean as you see there, I mean, you got over $3 billion, and we want to reprice down as quick as we can. We do. I’m not going to get enticed by the inverted curve to go long.
Ahmad Hasan: Great. That’s helpful. And then maybe on the loan growth side, this quarter had pretty nice loan growth. So, anything you’re seeing there, like any specific sectors that you guys are excited about moving forward in the pipeline? Or any — is it coming from like even geographically high-growth markets or?
Malcolm Holland: Yes. I would say almost all of it is coming from our markets. There might be a few outside, but it’s predominantly in our markets. Our pipeline candidly are as strong as they’ve been in some time, but their pipelines. And a lot of it is in the early stage of that pipeline. So, we’re seeing, as Terry mentioned, we have a concerted effort to focus on small business on the commercial C&I space. And so that’s where we’re seeing some pipeline growth. The real estate market, there are some deals that are starting to come back as the industry kind of level set with the new rate environment. Things do catch up over time. But I would not predict or suggest that we’re going to be super active on the real estate side. Now we may replace if we lose, but our goal — our number 1 — one of our goals is to get our concentration down, and we will do that by the third quarter.
So, we’re not going to go load up a bunch of real estate loans on there. But we do see pipeline stronger than they have been, but I’m not predicting loan growth greater than low mid-single digits at best. And that’s assuming that we have the payoffs come through that we have some visibility into right now.
