Scott Wylie: Yeah. And actually to that point, Bill, to the extent that our liability costs are more or less flat, our loan yields improve by themselves, right? Because we’ve got floating rate loans and we got whatever it turns out to be, $50 million or a $100 million a quarter that roll off and get repaid. And then we originate new loans that are 300 basis points, 400 basis points higher. And that’ll pull up our asset yield on average by 10 basis points, 15 basis points, 20 basis points, whatever the numbers turn out to be. So that having nice control over those liability costs really benefits us in the NIM, because we see improvements just by the passage of time on the asset side. In terms of like the loan growth and loan pricing, when we talked a little bit about loan volume and trying to guess what that might be for 2024, I actually think, that there’s an interesting kind of a psychological thing going on with our type of a client, which is, I think there was a lot of sticker shock here over the last six months where they would come in and think that we’re going to renew their loan for 4%.
And then we explained to them that rates have gone up 525 basis points so far. And so the new rate’s going to be 8% or whatever. And they’re fine, they can do that. And we haven’t really seen any issues with that. But in terms of doing new things, they’re saying, well, I can wait, I don’t need to do that now. And so I think that that sticker shock has now passed and people are now understanding that that’s where rates are. If they want to do things, that that’s the rate that they have to build in their models. And so I do think that, we’re going to see more loan demand. We actually saw a bigger pipeline on June 30 on the loan side than we had on March 31. So I think that’s promising for the second half of the year. I think that’s a sign that people that are figuring out what this rate environment means, they can still do things.
I think that’s symptomatic of the fact that I believe we’re in good economies with good, strong economic growth and entrepreneurs that still want to do things. So I think that all that bodes well and frankly kind of rewards us for making the conscious decision not to cave on structure or price here over the last nine months or 12 months when a lot of our competitors have been doing things that just didn’t make sense to us.
William Dezellem: Thank you. And so do you have a sense that your customers that paused activities or opportunities that they may have been considering but kind of using your phrase, they really didn’t have to do it, that the sticker shock has now gone away, they’ve mentally adjusted and adjusted their financial model, it still works and now they’re moving forward or are you sensing something different than that?
Scott Wylie: Well, I think some are going to say, I’m going to wait until rates come down and some are saying I can re-price the rents I’m going to charge or the costs of the prices I want to sell things at or whatever it is that make the economic model work. I just think that the economy and the consumer and the whole sort of pricing infrastructure that goes around a decision to do something or not do something has to reset. You have to go back to the fact, we haven’t had a 525 basis point increase in short-term rates in, I don’t know if it’s forever or if it’s just my career, but certainly people in our markets that are doing things have never experienced this. And I think there’s just a lot of sticker shock to that.
