Jared Shaw: To get to the NII guide, I guess that implies a pretty significant step down in margin as we go through the years is that the right way to be looking at that, even though you’re still asset sensitive and we’re still expecting a little bit of rate moves up earlier on.
Derek Meyer: Yes, I think what year-over-year it’s a full year basis, it’s a step up. I think when you look at sequential quarter, you’re still trying to and everybody’s trying to figure out where is your peak quarter and we’re not making that call.
Jared Shaw: Okay. Okay. And then on capital. Should we expect that you could be more active in capital management to potentially get to the lower end of that range? Or is that just a function of the natural movement of the balance sheet and we shouldn’t really be expecting a buyback or any significant change to capital return strategies?
Derek Meyer: Yes we’re not looking to change our capital return strategies. It’s still dividend in organic growth.
Jared Shaw: Okay, thanks. I’ll sit back. Thank you.
Andrew Harmening: Thanks, Jared.
Operator: Our next question comes from the line of Scott Siefers with Piper Sandler. Please proceed with your question.
Scott Siefers: Good afternoon guys. Thanks for taking the question. I wanted to also ask about sort of NII and trajectory there. So I guess, just looking at guidance suggests that the quarterly average of NII for the full year ’23 will be about $10 million a quarter less than what we did in the fourth quarter. Now, granted, fourth quarter was just an extraordinarily strong number. But maybe do you have Derek, a sense for how NII in dollar terms would traject throughout the year? In other words, would we stay high for say, the first half of the year, as long as the Fed is still raising rates and we get that benefit? And then does it taper off? Or was there anything in the fourth quarter that would have kind of elevated it? And then we maybe step down, but have a steadier dollar average throughout the year?
Derek Meyer: Yes, I don’t. Again, I don’t think I’m going to be that specific. I think we recognize that deposit betas are catching up. When exactly they, which quarter, they catch up, and you see some of that quarterly compression I don’t again, I don’t think we have that called. So I think we’re more comfortable giving the full year guidance. And with the options we’ve got, we think we can get to that number.
Scott Siefers: Okay. All right, perfect. And then just given some of the hedging actions that you’ve taken, or took in the second half of the year, do you have sort of a sense where, like, maybe what, like what might represent a floor for the margin, once it does begin to taper off by any chance?
Derek Meyer: No, we don’t. I think you can back into some scenarios, using our asset sensitivity that we have there. if you do some little bit of cowboy math, that a 25 basis point shock might impact you $7.5 million, $7 million on a full year basis. And you can see, we’ve been managing that down to combination of the swaps and the evolution of the portfolio. Because as far as I’d go with that the biggest . One of the things that everybody’s faced with and I know everybody on the call is interested in is how do you continue to the hedging strategy with the shape of the yield curve and so, if your natural balance sheet isn’t offering you protection or is with some of the growth we’ve got in the auto book, then you might start thinking about swaps or floors. But we’re not at that point yet. And we’re still monitoring each quarter and we’d like the progress we’re making. And we want to stay asset sensitive.
Scott Siefers: Yes. Okay. Perfect. Thank you guys very much. Really appreciate it again.
Andrew Harmening: Thanks, Scott.
