David Dykstra: Yeah. I was going to say we feel great. I mean these are sort of unprecedented interest rate margins for us right now. We have not been at 4% in our history and so — and we prepared for it, we have managed for it and we are enjoying that and we just would like to attempt to maintain it going forward through balance sheet positioning and derivatives, but it’s going to — we are going to like into it.
Terry McEvoy: Keep that beach ball up in the air. I understand. And then maybe a follow-up — just as a follow-up, could you maybe just expand upon, I think, you hinted earlier just market dislocation disruption, you are benefiting from that, where specifically you are seeing that maybe some hiring efforts and within that budget — expense budget for 2023, do you kind of factor in some hiring from the disruption? Thank you.
Tim Crane: The answer is yes. We are continuing to benefit from disruption from competitors we have talked about on prior calls. Obviously, when relationship managers feel like they can’t take care of their clients, we look like a good home. We will continue to pursue those opportunities as they arise, but it’s not a large team or a number you are going to see pop on the financials in a single dose.
Terry McEvoy: Thank you.
David Dykstra: We always taking advantage of
Terry McEvoy: Yeah.
David Dykstra: market disruption even from existing players that have disruption internally. So that’s been part of our DNA since the beginning of Wintrust.
Terry McEvoy: Yeah.
David Dykstra: So we plan to keep doing it.
Edward Wehmer: Okay.
Operator: Thank you. Our next question comes from the line Ben Gerlinger of Hovde Group. Your line is open, Ben.
Ben Gerlinger: Oh! Thanks, guys. Most of the questions around the margin have been answered, but it reminds me of Ed on that just says, it can’t go broke by taking profits and it makes sense, you are going to willing to take a little off the upside table to protect the downside. So in essence, you are kind of manufacturing to some degree a revenue line, but when you think about revenue relative to expenses, let’s say, there is that kind of the downside scenario economically or Black Swan event. Is there anything in the net or the non-interest expense that you can cut abruptly or anything to that extent that you kind of match out the two?
David Dykstra: Well, on the non-interest expense side, we are kind of a growth company, so we don’t plan to cut. But as Ed said, the big factor there is and we saw this in the past when rates dropped precipitously with the Black Swan event is that the mortgages kick in dramatically. We had a couple of quarters before rates went up, where we had record net income quarters and it’s because the mortgage business kicked in. So it’s really shifting the mix of the business from spread the business if that would happen dramatically to non-interest income business, which would be the mortgage side. So that’s the biggest factor, I would say and it’s a business strategy. We think we need to be in the mortgage business, because we are not going to send our customers to some other financial institutions for mortgage.
And if we think we are going to do it, we will do it with scale and then we will do it, because we always want to be asset sensitive and we have said this on other calls, the degree of asset sensitivity changes. But you always want to be asset sensitive, because if you do have inflation, then your expenses are going to go up and then how do you cover that increase in expenses and for a bank like us, it’s getting more in the margin. So you should always say asset sensitive to be able to cover the inflationary cost and that’s the case in the mortgage business it’s a natural business hedge and so that’s how we look at it.
Ben Gerlinger: Got you. Okay. That’s helpful on the strategy. And then some of your say larger competitors have national deals are involved just other M&A activities themselves, which gives me — gives you guys the opportunity to take this clients and share of the market space. Is there anything you are targeting specifically in terms of loan growth with that regard? I get that you guys are all encompassing bank, you do a lot of people, but knowing that your competitors are kind of involved with integration themselves outside of the Chicago land area. Is there anything that you guys are approaching for 2023 in terms of the strategy to be offensive?
Richard Murphy: We always see opportunities. Larger banks always have various things that they are getting involved with, whether they are pulling out of a particular asset class or changes in some of their staffing or and those really, we have been the steady provider in all these different asset classes that we are in. So the line we use around here is that we don’t jerk the wheel that we try to be very consistent in the way we underwrite, the way we price, the way we go to market. And as a result, we saw this back half of this year where certain banks were trying to change the way their balance sheets looked and we were able to take advantage of those. So our job is just to be very consistent, very steady and it’s just over the 30-plus years that Wintrust has been in existence. That’s really our — been our model. It take what is available in the marketplace, then usually that’s as a result of the bigger banks doing things like you referred to.
Edward Wehmer: For example, one of the large banks, they got the largest bank in Chicago, stated they are going to do safe deposit boxes. That’s an opportunity for us, because people still like safe deposit box, we got them, they don’t cost much to run, we are now offering — we are going to be offering free safe deposit advice for a period of time. We get new people in. Those things are like they mean a lot of people. It’s a panic for them to change banks. But the big banks seem to step on it themselves and allow us the opportunity to work through that stuff and we have great products, as indicated by the Greenwich awards and the with some of the
David Dykstra: J.D. Power.
