Keene Turner: I think the purchase accounting weighed on that just a hair. So, I think that fundamentally, as we look out, new loan originations are still helping us, reinvestment is helping us, and I don’t expect that we are going to really have the remixing that was negative in terms of the proportion of cash balances, I think we are – will be similar cash balances. So, I would expect yield to be more positively trending in the upcoming quarter here as long as some of those variables in terms of premium amortization and some of those things are generally in line or will operate. But I think we kind of had a few factors going against us. But the fundamentals of loan yield and investment yield and those things remain favorable. So, I mean despite that we were a little off in terms of how we guided margin forecast, I feel like the pieces that we missed weren’t really on recurring fundamental things that materially affect the run rate for 2Q, 3Q, etcetera.
Damon DelMonte: Got it. Okay. That’s all that I had. Thank you.
Keene Turner: Thanks Damon.
Operator: And your next question comes from the line of Brian Martin with Janney.
Brian Martin: Hey, good morning guys.
Keene Turner: Good morning Brian.
Brian Martin: Hey. Keene, maybe just one on just the margin, just I guess I appreciate the commentary and just the outlook, if rates if we do see some rate cuts, then that kind of 4% threshold or maybe target you are thinking about is lower depending on when we get those rate cuts. If we get some later this year, then that numbers drift a lower, based on your commentary about the impact of cuts fair?
Keene Turner: Yes. Brian, I think if we start seeing some cuts, I mean I think we are starting to head south of 4%. If you get one, call it, early to mid-second quarter – I am sorry, third quarter. And then depending on how much you get by the end of the year and when they occur, you will have some more of that impact in the fourth quarter, but really it will start to impact first quarter of ‘25. But yes, I think when I look at two or three rate cuts, we start heading just south of 4% on margin.
Brian Martin: Yes. Okay. Understood. And then just remind me, are there – I guess, the – as far as – in terms of the fixed assets that we price for fixed rate loans at re-price, I mean is that a meaningful number, I mean in terms of what you guys have, or is that not a big number there as far as what might be re-pricing over the balance of the year, or next 12 months, however you think about it?
Keene Turner: I mean it’s a fairly decent amount. I mean if you think about the weighted average life of the loan portfolio sort of SBA is 3 years to 4 years. And then you look at the proportion, I mean you get $500 million, $600 million of fixed rate loan re-pricing in the next 12 months. So, it’s significant and it’s helpful, and I think that’s part of the new loan origination yield that I indicated, I think was a good fundamental. We had maybe a little bit more in the first quarter here in terms of some of the tax credit stuff that re-priced with a little bit of a headwind, so origination yield wasn’t quite as good. But moving forward ex that, the seasonality in those fundings occurs first half as well, I think we are optimistic about fixed rate re-pricing continuing to improve yields and just overall loan origination improving yields.
Brian Martin: Yes. In the pickup, I mean if it’s half $500 million to $600 million over the next 12 months, is that – what kind of yield is that coming off at versus what you mentioned as far as what the new origination yields are? Is it kind of in the 4.5 range, or I guess think an idea of how much pickup you get on that?
Keene Turner: Yes. I mean we have been originating roughly 6.5% on fixed rate loans and we are probably picking up 200 basis points on that, just sort of depending on when it was originated. So, it’s a fairly decent trade and then variable rate pricing is closer to 8.5% or 9%, that helps drive up that overall origination rates.
Brian Martin: Got it. Okay. I appreciate it. And how about just jump in to credit for a moment. Just on the classifieds, it looks like they were down a touch in the quarter. Just any commentary on just kind of criticized or just kind of the special mention loans, how they are trending here in the quarter?
Doug Bauche: Yes. Brian, it’s Doug. You are right. Classifieds were flat, but criticized loans were also flat in the quarter. So, really, the combination criticized classifieds represent just about 4% of total loans and really as we expected, just kind of returned to a more stabilized level here in the first quarter.
Brian Martin: Got it. Okay. Thanks Doug. And then just on the – and maybe just one more on credit. Can you talk about the provision, but just the higher for longer, does that impact maybe thinking about just the incremental impact on credit that, that could have that maybe you take the reserve up a bit. Is that more kind of your commentary about being more cautious here? I guess just trying to understand how you are thinking about that?
