Alex Twerdahl: First off, just kind of going back to deposits, I was just curious, you sort of talked about what happened this quarter, but do you have any sort of line of sight on sort of expectations for what deposit flows might be over the next couple of months?
Scott Kingsley: So, good question. So, what we have out there today, what we’re seeing is that with other opportunities relative for higher yield, there’s a little bit of pressure on, again, higher balance accounts, Alex. The general broad cross section of our deposit base has not been that much — has not been that influenced by that. Again, level of granularity in our deposit base is the huge advantage. I think relative to where we think competition is going, remembering that everybody has an investment portfolio which is probably a little bit higher than it was pre-pandemic. So, cash flows off the investment portfolio will be important sources of net liquidity not only for us, but probably for everybody. But today, one can’t stimulate that because one is probably in a loss position relative to the front end of some of those.
So, with that in mind, I think there’s a little bit more competition even in our markets, which have historically been very stable for incremental deposit dollars. So, I think that’s how we’re sort of framing that, Alex. Typically, the first quarter for us is a net inflow quarter on the municipal deposit side. And I think we think that as much as they have some other choices as well, we’ll still benefit from that.
Alex Twerdahl: Okay. That’s what I was looking for. Are you able to quantify or give us a little bit more color on sort of the frothier — some of the deposits you saw this quarter that you kind of alluded to like sort of a percentage of overall deposits that might be in that category, where it was last quarter, where it is this quarter, and sort of what might still be considered “at risk”?
Scott Kingsley: Well, getting this right, Alex. Deposits that — higher balance deposits that left the balance sheet typically found a wealth management or a short-term treasury solution that had yields in the 4% to 4.5% range. And again, something like $600 million of our $730 million decline in balances for the year related to customers in our top 150 in terms of outstanding deposit balances. So, an enormous concentration in the small group of accounts in fairness. Other than that, Alex, I don’t know if there’s anything else. If your question was sort of geared toward what are other people doing in the market for offerings, I think, we’re certainly seeing some near-term or some mid-term offerings, whether they be CDs or just high-yield money markets that are approaching 4%. But I think they typically have some other requirements attached to them relative to achieving those yields.
Alex Twerdahl: Got it. And then, just a point of clarification on the expense or on the fees, the $2.5 million that you alluded to that’s on a six-year cycle, is that something that we’re going to see fee go down by $2.5 million in 2023 and then come back in 2028? Or how do we — can you just maybe explain that a little bit better?
Scott Kingsley: Yes, sure. So, there are statutory requirements either within the premise of or other benefit plan requirements that foretake — documents to be refreshed on a recurring typically a five to six year cycle. So, you’d be exactly right. We had $2.5 million in 2022 that we don’t think recurs in 2023. And depending on the statutory changes, requirements to plan legal requirements, is that a 2027 or 2028 event? Probably most likely, be more important for that line of business for us. The run rate of the fourth quarter is probably more indicative of where we’d expect 2023 to start before any organic growth opportunities that we would be able to capitalize on.
Alex Twerdahl: Okay. So, the $2.5 million was kind of earlier in 2022 and 2023, the $10.7 million, that’s kind of the starting point for the retirement plan administration fee line?
Scott Kingsley: Yes, that’s a fair conclusion, Alex. Absolutely much more concentrated in the first three quarters. I think we sort of finished up that program early in October.
Alex Twerdahl: Okay. And then, just a final question for me. I think I saw in the presentation that commercial lines of credit utilization rates have gone down a little bit into the end of the year. I’m just curious, is that a function of customers paying down those lines, or is it a function of increased lines available that just haven’t been drawn out yet?
John H. Watt, Jr.: Well, I think it’s a function of couple of factors. Clearly, smart customers with excess liquidity, they’re using some of that excess liquidity to pay down their debt. And I think also there are several large unfunded lines of credit in that portfolio that are accommodations to draw customer relationships that have many other components to them and they remain unfunded and are likely to stay unfunded. So, it’s kind of a mixed bag there. And I think going forward here, as excess liquidity moves out of the system, we’re likely to see incremental borrowing there that we didn’t see in 2022.
Alex Twerdahl: Okay. That’s helpful. Thanks for taking my questions.
Scott Kingsley: Appreciate, Alex.
John H. Watt, Jr.: Thanks, Alex.
Operator: Thank you. Next question will come from Chris O’Connell of KBW. Your line is open.
Chris O’Connell: Hey, good morning.
John H. Watt, Jr.: Good morning, Chris.
Chris O’Connell: Just following up on the deposit flows question and having some of the investment portfolio cash flows helping out with loan funding there, can you guys give us the either monthly or quarterly cash flows that are coming off the investment portfolio?
