Operator: Thank you. One moment for questions. Our next question comes from Michael Rose with Raymond James. You may proceed.
Michael Rose: Hey. Good morning, guys. Most of my questions have been kind of asked and answered. But just on credit, you guys have found in a pretty cautious tone. I think that’s your conservative nature. But the loan loss reserve was only up a basis point despite the increase in criticized classified. Why not just build that a little bit more, now just given the cautious tone? And would you expect to see that ratio build as we move through the year? Thanks.
Malcolm Holland: I mean, we’d expect to see it build. But we do have – CECL is a pretty constraining metric. And there’s a lot that goes into it, as you well know. And so it’s not – we can’t tweak here and tweak that. Candidly, we’ve done a fair amount in changing our weightings on some of the possibilities that could happen. We haven’t messed with our Q factors. And so we work pretty hard to keep it at those levels because the model just spits out a much lower number sometimes. And so it’s going to be difficult. But certainly, our desire is to have a little bit more in there. And going forward, yes, we hope to accomplish it, but we’re not certain.
Terry Earley: Let me just to add to that, which is year-over-year our allowance to loans went down from 115 to 104. But our general reserve, excluding specifics, went up from 82 bps to 90, and I would expect that trend to continue. Does that make sense, Michael?
Michael Rose: Yes. Got it. And then maybe just back to Thrive. Obviously, the outlook, I’m just looking at the MBA forecasts are down a significant amount in ’23. Obviously, this is a tough quarter. I understand they’re making expense structure changes, kind of et cetera. But do you actually expect that you can actually earn money from the investment this year?
Terry Earley: No, I would go back. I mean, I think success, I mean, is it possible? Yes. With – and success would be a positive number. I think target is a breakeven. And look, the only reason this option is available to them is a small acquisition Malcolm referenced that brought on $3 billion in volume at good margins. The margin was 3.33 for the year, where they’ve had significant expense cuts. They’ve been able to strip out close to 60% of the cost of the company to bring the volume onto their platform. And so that’s what, without that and without fixing the long-dated locks and rightsizing the expense structure of legacy Thrive than do I think that was – do I think breakeven or better is achievable? No. But that’s where we stand heading into 2023.
And December was a good month. They closed 567 units in December, which was above their average for last year. And always remember, close to 65% and 70% of their business is in Texas. The three key markets, DFW, Houston, San Antonio, and that’s why it’s encouraging. And I’ve already seen I’ve seen the result. I know what the results were for December, obviously. And so that’s what tells me that this idea about where we can get – where Thrive can go is you can see it from here from the December results.
Michael Rose: All right. Helpful. And then just finally for me, stock trading by 1.5 times tangible. You noted earlier that you expect capital to grow as kind of loan growth and balance sheet growth slows. Any thoughts around a buyback at this point? And what you could do there? Thanks.
