Scott Kingsley: Sure. Chris, the large piece of our investment portfolio is mortgage-backed securities. And so, those cash flow got slowed down a little bit since rates started to rise. But I still think it’s safe to think about $15 million to $17 million a month of cash flows off the portfolio. And that’s given where current rates are. Maybe that accelerates again in the second half of the year, but…
Chris O’Connell: Okay, got it. And I guess along those lines, any chance you could quantify some of the commentary around the deposit betas, which obviously have held in extremely well so far, but you guys expecting to kind of increase on a go-forward basis just relative to either last cycle or, I guess, to peers for this cycle?
Scott Kingsley: Yes. So, Chris, I’ll kind of frame it like this. Deposit costs were higher in December than they were in October, and they’ll be higher in January than they were in December. And I think generally that marching up effects will happen throughout the quarter. Certainly, would not be surprised if deposit costs were up 12 basis points to 15 basis points in the quarter. But the trend line would suggest that, that’s going to be necessary to hold balances. It’s important for us to retain some of those balances, really important for us to retain the operating side of those relationships. Excess liquidity can come and go from the balance sheet, but sustaining the operating accounts is always our first objective in all those cases.
So, this is kind of how we’re thinking about it. The alternative for us — and again, we’re 92% deposits funded and 8% borrowing funded at the end of the year, and that’s the high mark for the last two years. So, it’s important to know that we have an apparatus for deposit gathering, and we’re pretty good at it and historically have achieved good growth rate. If we get back to more of a normalized cycle, I think we would suspect that we’re capable of growing deposits in any rate environment. Will there be a little bit more pressure now with short-term yields? Yes, maybe a little bit more. But I think that’s something that reconciles itself after you get to stability of rate change.
Chris O’Connell: Okay, great. That’s helpful. And in — on the insurances, financial services line, I believe there’s like a little bit of seasonality between third and the fourth quarter versus fourth and the first quarter of the years. Can you just remind us of what that seasonality is, or what the expectations for that line is going into the first quarter?
Scott Kingsley: Yes, absolutely. And, Chris, actually thanks for asking the question, because there is — it sounds good at least once a year to remind people about some of the seasonality. So, as it relates to insurance revenue specifically, the fourth quarter is normally our weakest quarter. The first and the third quarter are stronger, and I think that’s really centered around effective dates of the type of insurance that we originated in our agency. Whether it’s commercial insurance, property casualty on the retail side or benefits-related stuff, it’s not unusual for people to make changes to their plan or have renewal dates that tend to be January 1, July 1 centric in each of those cases. So, again, just back to your question around seasonality, we normally see $0.01 to $0.02 improvement in insurance and wealth management combined in our first fiscal quarter compared to the linked fourth quarter.
However, it’s not unusual for us to incur another $0.01 per share of costs on the utilities and maintenance side in the winter just relative to the geography that we live in. And quite frankly, I think, most people remember this that we typically incur $0.03 to $0.04 a share in the first quarter associated with elevated payroll tax obligation and some equity compensation that just tend to be front loaded. So, past that from a seasonality standpoint, not anything that’s substantial or that sticks out for us. I will make a comment a little bit quirky, but 2023 has 65 payroll days in each of the four quarters, which is — it’s highly unusual, normally there’s a one or two day fluctuation that goes along with that. So, I think in terms of the stability of some of our operating costs should probably be something that’s a little bit easier to model next year.
Chris O’Connell: Okay, great. And then, lastly, I mean credit held in super well so far. There doesn’t seem to be a ton of movement in the buckets for you guys this quarter. But generally, can you just give us an outlook on what you guys are seeing in your markets in any kind of areas or cause of concern in either the commercial or the residential portfolios as you look out into 2023?
John H. Watt, Jr.: I’ll take that one. Thank you. Last week, we completed a comprehensive review of both our commercial and consumer books from a credit risk management perspective. We did that with our Board. And the year ended at a place that we’ve never seen in the history of this company in terms of the quality of our credit portfolio. With that said, I would expect as we head into a more normalized environment that there’ll be a reversion towards pre-pandemic 2019 levels over time, certainly not immediately, but over time, and we’ll see that initially in the consumer portfolios. We don’t see it now, but it’ll come. Commercial portfolio, very strong. Business banking portfolio, very strong. I don’t think there’s a nonperforming loan in excess of $1 million in the total credit book and the sustainability of that will probably revert back to a more normalized nonperforming level as well over a longer period of time.
So, we feel good about it now. We don’t see cracks. I know others talk about certain segments of the CRE product line, but we’re not feeling that now and we feel pretty good about the loan deposit — I’m sorry, the LTVs in each one of those asset classes in CRE. So, pretty stable there.
Scott Kingsley: Let me add to that real quick that our philosophy has been that we will provide a provision for net charge-offs and we will provide a provision for loan growth. And sometimes that loan growth is in different segments of our portfolio and that has a higher coverage level in certain portfolios versus others. But I think important to — the takeaway here is we have not wavered in that at all. So, coverage ratios of 1.24%, I think, you’ll find are probably slightly above our peer group. And we think that’s appropriate and judicious certainly given the dynamic of the economic conditions that we expect to go forward with.
Chris O’Connell: Got it. I appreciate the color. Thanks for taking my questions.
Scott Kingsley: Thank you, Chris.
John H. Watt, Jr.: Thanks, Chris.
Operator: Thank you. Our next question will come from the line of Matthew Breese of Stephens Inc. Your line is open.
Matthew Breese: Hi, good morning.
