Operator: Thank you. We’ll go next now to Suneet Kamath at Jefferies.
Suneet Kamath: Yeah. Thanks. Just a couple more on cash. So you had mentioned that $66 billion number, of which I think you have $44 billion. So as we think about the $22 billion balance, I guess, what would you think is a realistic expectation in terms of how much of that you could bring on to your platform and over what time period?
James Cracchiolo: Well, Suneet, I think the way I would think about it is that that’s roughly around 8% of the total assets now, which is a bit higher for our clients, right? Usually, it’s around the 5% mark or something like that. So there’s more cash being held right now. So I think as we go through this cycle, and people are looking for some alternatives coming from their banking institutions, et cetera., we think that we can garner some of that other cash coming in as well from bank or even as some of these CDs and other things roll over that we’re holding can go into our own banking institution. But I also think over time, that some of that cash will be deployed back into wrap type programs, et cetera, as the market volatility settles or as people feel more comfortable.
So it’s not as though money isn’t being deployed into the market, it is, right? We had over $6 billion going back into wrap in every quarter. But that could pick up as well and other transactions can pick up. So it’s hard for me to say exactly, but the idea is we’re helping to bring more client flows in and then some of that goes into cash type products, which we can garner our piece and then others will, over time, be deployed back in the market. So we think it’s an opportunity for us.
Suneet Kamath: Yeah. Understood. And then I guess, if we think about just the cash sweep balance, I don’t know if you commented on this, but it was down, I guess, $6 billion quarter-over-quarter to around $10 billion. Can you give us some help in terms of how you see that $10 billion trending maybe over the next couple of quarters? And I guess of that $6 billion decline, I think some of it went into the banks, some of it went into certs, but — can you give us some help in terms of where sort of the rest of it went because I’m having a little bit of trouble seeing exactly where that cash went?
Walter Berman: So obviously, as Jim mentioned, the cash is up in total. And so yes, you’re exactly right, we pulled into the bank. And certainly, a portion of that went into the certs. So the issue is some of that went into brokerage. But the point is we have it. It’s been — within our basic overall, it’s cycling through. So I would say and we feel — and I’m indicating again, it is clearly, as we see the pattern, that sorting is basically slowing and it is basically within a range. And the base of the fact that we have 60% in the $100,000 below and the average account balances dropped from 8,000 to 7,000 is an important factor for us as we evaluate.
James Cracchiolo: Suneet, so you had, I think, 46 going of 44 (ph) part of that $3 billion from the $10 million went into the bank. And then you had, I don’t know, a few billion went into search, but you also had some use of cash for tax payments and others — okay, it’s hard for us, but we have more client flow coming in, and then some of it might have went into brokered CDs or other things. So overall, I think we’ve held pretty well compared to what we’ve seen in the industry. And we had a positive of more client flow coming in as well. So — and as I said, I think you can’t necessarily box a number ideally, but it’s a fluid situation regarding how clients use their money as well. So — but it’s pretty stable overall. So it’s about 4% in total sweep and the $10 billion is mainly from a shift for the bank and other things. So I wouldn’t look at that in isolation.
Suneet Kamath: Makes sense. And maybe just one last one on Comerica. As we think about that opportunity, should we, Walter, be expecting any incremental costs associated with that platform as we kind of move through the year?
Walter Berman: I think, again, this has a short payback for us as you look it from a P&L standpoint. So the answer is, obviously, there’ll be some cost, but certainly, the revenue will do it and we have a very quick payback on it. But it’s a good economic relationship for us and for Comerica.
James Cracchiolo: Yeah. I mean you got onboarding expense and stuff and moving the clients and the advisers and stuff. But overall, we think it’s a good arrangement and one that will work for both parties.
Suneet Kamath: Okay. Thank you.
Operator: Thank you. We go next now to Steven Chubak at Wolfe Research.
Michael Anagnostakis: Hey. Good morning. It’s Michael Anagnostakis on for Steven. I wanted to touch on — I know you guys gave the cash per account metric of $7,000 for the quarter, certainly a helpful metric to have. Where are we for that metric relative to the trough you had seen last cycle? Just trying to gauge the potential downside relative to cash as a percentage of AUM. Thanks.
Walter Berman: I really can’t give it, but I would say it’s always been a stability factor for us that portion and the working capital and the balance there. So I can’t give you exact — as I said, it just dropped from — if you look at the previous quarter, it’s dropped by 1,000. So it is — from that standpoint, we feel very good about it. It’s been a stable element within it, and it did increase a lot, certainly, as we went through the cycle coming through, and that was again in the harder balances. So I just can’t give you the numbers going back that far.
Michael Anagnostakis: Got it. No worries. Okay. So I did want to touch on Asset Management to expense is very well controlled. You reached that 31% low end of the target range. I guess, assuming stable markets, is the 31% sustainable run rate given the efficiency efforts you’re continuing to deliver on or is there some downside to that? Just any color there would be helpful. Thanks.
Walter Berman: I think this downside, it’s a lot of variability in it as you look at rates and look at mix and you look at . But certainly, the expenses are being extremely well managed from that standpoint. So that’s the controllable factor in it as we look at it. And certainly, as we look at hopefully that we stop getting back on a better pattern, but we’re certainly aligned with the industry where that is. And we certainly move into that 31% to 35% is basically you feel comfortable. But it’s, again, a lot of variability.
Michael Anagnostakis: Thanks so much.
Operator: Thank you. We go next now to Tom Gallagher of Evercore.
Thomas Gallagher: Good morning. Walter, just a follow-up on the customer cash balances. I think one of the earlier questions had asked you whether or not you would expect the earnings contribution from customer cash balances to be stable. Let me ask it in a different way. What do you expect the earnings contribution to be for the next couple of quarters? Will — do you expect it to be stable or up higher, just some kind of range?
Walter Berman: So I can’t give you an exact range, but let me be clear. The drivers of it are clearly, as we indicated, the maturity element as it relates to the bank and shifting in there. So as we get maturities on those being risk, and that’s going to take the interest rate up. We certainly see really slowing down on the — the bank transfer will certainly take that up again, as we get more comfortable. The certs, looking at the timing from the standpoint where the rate is increasing, we do see an opportunity that the net spread will increase there. So I would say, certainly, it will get stable to up as we look at the elements, but please, now you have rate movements in there. You have different elements, but it’s that stability factor of what is embedded today. So if everything got frozen, yes, you should feel stable to up.
Thomas Gallagher: Got it. Stable to up. That’s what I was looking for. Thanks. Now in terms of the 6% new money yields, I’ve definitely been getting questions on that. Like what are you buying exactly? Is it still RMBS? Is it floating rate?
Walter Berman: We have a combination of floating rate, but we — it is really structured and that’s where we basically are and it’s the highest quality. So we are being very selective there, but the yields are there, and we just — we are patient, and that’s — but like I said, it’s in the bank, especially its AAA, and we feel very comfortable, especially in this environment, sticking there. But those are the levels we are finding. We’re certainly having the benefit of having CTI manage that and help us work through that. So it is strictly — you should look at majorities in the structure.
Thomas Gallagher: And the crediting rate on that, we’ll call it, $1.7 billion of net deposits into the bank. Was that consistent with the cash sweep like 50 basis points or what would the incremental credit rate would been?
