And so we want to make sure that we pay attention to the consumer preference, so we’ll continue to produce that. But at some point, that portfolio will largely equal where the production is. So it’ll be less of a headwind as it relates to deposit pricing. And as Jamie has mentioned in the past, the real benefit that we’ll have to reach maximum deposit pricing will be deposit mix. So as we continue to bring down brokered and we can replace that with core deposits, the negative impact that headwind you face with CD production will be offset by a positive shift in mix. And so that’s why we think in the first quarter, we’ll largely see the peak for deposit pricing.
Kevin Blair: And, Brandon, just to add a little more to that answer. The first quarter, the core CDs that are maturing, the average rate is just over 4%. It’s about 4.05%. And so the marginal impact of that to the margin is much less than it was in the fourth quarter, as Kevin mentioned. And then as we look forward in 2024, our core deposit growth will be led by money market in 2024, which will be a little bit of a change from 2023. And so we believe that that will also be a positive when you think about total deposit costs going forward.
Brandon King: Very helpful, very helpful. And then, Jamie, just give us an update on how you’re thinking about managing the balance sheet this year in regards to your liquidity position and maybe the potential to pay down more debt.
Jamie Gregory: As we look at the balance sheet, our liquidity position is very strong. The efforts we made in 2023 have positioned us really well for 2024, so we can go out there and do what we do best, which is serve our clients. And so that’s how we feel heading into this year. What you should expect to see from us is a continued pay down or attrition of our broker deposit portfolio, potentially $250 million to $500 million here in the first quarter. We are very low on home loan bank advances at the moment, a little less than $1 billion at year-end. So as we look forward, we think that we are positioned to optimize the liability side of the balance sheet. We don’t have any imminent needs for unsecured debt, and we think that we’ll continue to try to be balanced on core deposit growth, which will be more back-end loaded this year, and core loan growth, which could be more balanced growth throughout the year.
So we may have a little bit of a funding gap between loans and deposits early in the year, but that’s not unexpected.
Brandon King: Thanks for taking my questions.
Kevin Blair: Thank you, Brandon.
Operator: Our next question comes from Timur Braziler from Wells Fargo. Please go ahead.
Timur Braziler: Hi, good morning. Maybe asking Brandon’s question…
Kevin Blair: Good morning.
Timur Braziler: Maybe asking Brandon’s question a little differently. So, wholesale funding went from 15% to 13.5%, you continue to work that down. I guess, ultimately, as you continue working on the liability side of the balance sheet, where is the target there? Where could that wholesale funding ratio continue to migrate towards?
Jamie Gregory: We’re very comfortable with where it is right now. We’re comfortable with our liquidity altogether. And so it’s really just a balancing, that’s not a ratio that we manage to. And so we look at all of our higher cost sources of funding, including the marginal public funds, and we think about how do we optimize our liability mix to fund the balance sheet. But we have a lot of sources of liquidity. We have a lot of sources of liquidity that are higher cost. And right now, given our liquidity position, we have the luxury of being able to run those down. But, as we look forward into 2024 and beyond, it’s our intent to go out and take advantage of the opportunity in the southeast. And as Kevin mentioned in response to Steven’s question, go out and grow and deliver Synovus to more and more clients.
And so we believe that we are well positioned for that and whether or not we fund that with, priority one being core deposit growth. But beyond that, we have a lot of availability either in wholesale funding, which would include broker deposits or home loan bank advances or even go out and grow some of those easier, marginal sources of liquidity, like public funds.
Timur Braziler: Okay, got it. And then switching to the loan side, so you had the medical office sale earlier in the year, you’re working down balances in senior housing. I guess, one, what’s your remaining exposure? What is your exposure to kind of the healthcare, medical field? And then two, as you look at it from a credit standpoint, where are you guys at as far as credit quality and things to look for primarily within that senior housing portfolio?
Kevin Blair: Well, look, from a healthcare perspective, you have to look at it really across two different areas. On C&I, it’s about 7% of our balances, and a lot of that is on the senior housing side. We talk about managing down our exposure there. It was really more around the fact that we’ve seen more payoff activities. And so we feel really good about where we are in senior housing. When you look at some of the losses that we incurred this quarter, there were a handful of losses, and Bob can touch on that. But we feel very good about the overall exposure. And so we’re not trying to manage down our exposure in healthcare. Some of it has been just the fact that we’ve started to see a more constructive market in terms of payoff activity.
