Alexander Twerdahl: Just back to the sort of the NIM conversation. Appreciate all the color you have given so far, but maybe just kind of your thoughts for the NIM in the first couple of quarters of the year, assuming we don’t get any rate cuts until kind of that May timeframe, which I think is what the forward curves says today.
Scott Kingsley: Yeah. So, Alex, I think, if we were framing it this way, we would say that, we have — I think a much better chance of thinking that our improvement in asset yields with the repricing of new products has a chance to catch back up to where the funding cost increases are. Whether we get there in the first quarter not, jury is still out on that, but I think that, the fact that we have been losing 6 basis points to 90 basis points a quarter on that net change, in other words, asset yields have been fall, have — new asset yields just haven’t kept up with where funding needs have need to be. I think we have reached a point where stability could be the outcome. So, if you were handicapping, net interest margin somewhere around where we finished in the fourth quarter, plus or minus 3 basis points or 4 basis points.
Alexander Twerdahl: Okay. And then just kind of given the commentary on deposits and sort of trying to reprice them as quickly as possible, I guess, given we get like one or two rate cuts in May, feel like the third quarter, fourth quarter of the year. Do you think you have enough pricing power on the deposits to actually offset that $2 billion of loans that repriced and all the cash that price lower?
Scott Kingsley: I think if we have an orderly step down at 25 basis points a quarter or 25 basis points and 1 times or 2 times or 3 times. We could be close to that Alex. I think if we get six or seven cuts and they go much faster, it’s much harder to accomplish that. Because now you are out there, multiple times with your deposit customer changing that outcome. Remember, we don’t have any dialog with our variable rate asset customer, they just get the new rate. So I think it just takes more shepherding in the field.
Alexander Twerdahl: Okay. And maybe just a little bit of commentary on sort of the loan growth and sort of what you are seeing out there, is lower loan growth this quarter more reflective of a little bit more competition coming in, saying, rates are going to go down, we will give you a better rate and you guys are not chasing after that or is it just less demand in the market, or I guess, sort of what do you think sort of happened in the fourth quarter that kind of kept that overall loan growth subdued?
John Watt: Couple of things come to mind, Alex. I have been focusing on line of credit usage. It’s historically low, and Scott indicated, and I agree that smart customers are using their excess cash to pay down debt. So we see that. Eventually that’s going to come back. We had a couple of payoffs in Q4 that we did not anticipate. I think that’s episodic, that added to the loan growth story in Q4. I say this all the time, it’s firmly competitive out there all the time. So do we see pricing challenges on the loan side that are any different than they have been forever. No, but it’s brutally competitive and from a risk management perspective, we are very thoughtful about what we want to do and what we don’t want to do and what other products and services we can also offer our customer at the same time to ensure robust profitability with all of our relationships.
So mid-single-digit for our NBT in these markets. That’s not an unusual year. Sometimes a little higher than that. But what I do know is the team that is on the ground across all seven states is ready to and has identified the opportunities that are attractive to us and we will be there at the table when they are up.
Alexander Twerdahl: Got it. That’s helpful. I mean, would you say, the spreads in general with the five-year coming down on commercial deals, has the pricing kind of remain sort of sticky even though the five years come down or is it, are customers saying, wait a second, rates have come down, you guys get to do a little bit better?
Scott Kingsley: Yeah. Alex, it’s a great question. In our customers’ mind, right? We have spent the last 15 years with the customer being coached into a spread off the five-year, three-year, seven-year point of the curve, the midpoint of the curve and what did we have to do during part of last year is, we had to say, we are not sure we are capable of actually living with that outcome for certain of our credits because of our short-term pricing was from a funding standpoint. So and remind — sometimes we have to remind ourselves, higher for longer was the tenant out there through 1st of December. It wasn’t until 1st of December where people said, oh, we are going to have this naturally substantial walk down in rates. So if you think about what that was, even if we were making commitments under that premise, those loans probably haven’t closed yet anyway.
