Raj Singh: Yeah, there is not an update. We do continue to talk about it at each of our Board meetings. So in the May Board meeting, we will again have a conversation. But I’m not expecting a buyback yet. We are changing our mix of our balance sheet. So keep in mind, from a risk-weighted assets perspective, we are talking about taking down low-risk-weighted assets, like resi, and replacing them with high-risk-weighted assets, C&I. So yes, capital does build up, but capital ratio — TCE will build up, but CET1 doesn’t build up quite as much because of the change of mix of assets, which is necessary for us to improve margin. So we will — the Board had — we’ve talked about the buyback back in February when we took the action on dividends.
We will talk about it in May and I don’t want to get in front of that discussion, but I think buyback is probably more — it’s probably in the second half of the year is when it will get — we will take a harder look at this. I doubt if it will be in May.
Stephen Scouten: Okay, that’s really helpful, Raj, thanks for that. And then I’m just kind of curious on thinking about the loan loss reserve, obviously, went up 8 basis points and you’re incrementally more protected, but if I look at that waterfall chart and I see the economic forecast component kind of going down, was that — am I reading that right where there was some scenario weighting adjustments that you guys made to take that number down or what’s kind of the dynamics of that around the economic forecast?
Leslie Lunak: Most of that is just that the forecast is better than it was three months ago.
Stephen Scouten: Okay. So no change to the way you guys are waiting to the various scenarios.
Leslie Lunak: We tweak that every quarter, but really, we’re just seeing better forecasts, and so the model — loss results are coming down, coming out of the model.
Stephen Scouten: Got it. And then just last thing for me, obviously, great momentum on the non-interest bearing deposit, sounds like Tom said the pipelines were pretty good on the treasury side as well, kind of curious what you think you can do there. I know it’s hard to predict through the full year. And then maybe kind of an update on Dallas in particular on what sort of progress you’ve seen. How much that may or may not be contributing to the positive momentum there?
Raj Singh: It’s too early for Dallas to contribute anything meaningful, so these numbers are not really because of Dallas. There’s obviously some growth there, but it’s small compared to the total number. But, Tom?
Tom Cornish: Yeah. When we look at the markets that we’re in, I would say, this was — this last quarter was a particularly good hiring timeframe for us. We added to the teams in Atlanta. We added to the teams in Dallas. We made some really good key hires in the corporate banking space in Dallas. It is too early for any major results to kick in yet. We are seeing good activity, good pipeline build, business coming in, but that’s not predominantly driving the numbers that you see in the $404 million of NIDDA growth. That was really more across existing geographies and existing lines of business.
Stephen Scouten: Got it. Got it. And think that progress can continue based on what you’re seeing in the pipeline, I guess, is the general message?
Tom Cornish: Yes.
Stephen Scouten: Fantastic. Thanks for the color and congrats on all the progress.
Raj Singh: Thank you.
Operator: Thank you. And our next question coming from the line of Jared Shaw with Barclays. Your line is open.
Jared Shaw: Hey, good morning, everybody.
Raj Singh: Good morning.
Leslie Lunak: Good morning, Jared.
Jared Shaw: Maybe just following up on the deposits and funding, with the trends that we’re seeing in DDA, one, I guess, would you say, are you also seeing continued remix from existing customers offset by the new customers bringing money in, or do you feel like on an average account basis, we’re sort of at the bottom on average DDAs here?
Raj Singh: It’s a little hard to say. I think there is still some bleed happening on older relationships, which is — what you’re seeing the $400 million or so is net growth. So I think there’s still some of that happening. But we’re trying to kind — we are not trying to — we’re out running it with new business coming in the front door. So I think it’s still a little bit of a leaky bucket, I think, if that’s what you’re asking about.
Jared Shaw: Yeah.
Raj Singh: But — yeah, I think there’s some of that still happening. You do wonder like, you haven’t woken up yet, but I think — I think the leaky bucket phenomenon is still true, but we have a lot of momentum on filling the bucket with new business, and based on what business was closed this quarter, but also based on what’s in the pipeline.
Jared Shaw: Okay. And then on the deposit beta, do you think we’ve seen the peak here even if we don’t get rate cuts, should we expect to start to see a gradual decline either from that remix of DDAs or not having to pay off as much in market to retain some of those interest bearing deposits?
Raj Singh: I certainly hope so, or at least stability. Seeing the numbers from Jan, Feb, March, and into April, we’re seeing complete stability. It’s been absolutely flat. I get a report every morning what the deposit book looked like the night before, and usually I look at DDA and total, it’s nice to see the far right column, which is the cost of funds basically or changing cost of funds, looking pretty stable. So yeah, it looks like it’s stable. When will it start declining without the Fed moving? DDA keeps building up the way we are thinking it will start declining as well. But yeah, we have reached that inflection point, it certainly feels better.
