Operator: Our next question comes from the line of Daniel Tamayo with Raymond James. Please proceed with your question.
Daniel Tamayo: Good afternoon, guys. Thanks for taking my questions.
Andrew Harmening: Sure.
Daniel Tamayo: Maybe another stab at the NII from a different point of view. But just looking at the balance sheet. Would you say you’re at the point with excess liquidity now, where you expect that the balance sheet growth to more or less matched loan growth at this point?
Derek Meyer: Yes. So the way I’d characterize it, I mean, that’s a shorthand, I haven’t done that view, we are going to, we have bottomed out on securities as a percent of fixed assets. So there is a component of our funding plan and deposit growth that includes supporting investments and securities. So it probably gets you closer to what you’re talking about.
Daniel Tamayo: Yes, that makes sense. Okay and then I appreciate your comment on expecting positive operating leverage in 2023. Is there any kind of environment from a rate perspective that would restrict that the ability to achieve that or you feel pretty comfortable with that guidance?
Andrew Harmening: Yes. Look, that the rate question, the yield question, the impact in the market is being asked on almost every call and just there are obvious reasons. And that’s because there’s a lot of contradictory information out there to understand what the future might be. With regards to what we see in our portfolio, the tailwind that we have from the growth that we’ve already experienced in ’22 heading into ’23, the initiatives that we have that show that we’re able to find a little bit, we’ve been able to fund on the deposit side a little bit ahead of what the marketplace is. Our ability to shift expenses from a low return area to a higher return area all those things at this stage, give us confidence in what our forecast is.
The economy doesn’t seem to be falling down quickly in our mind. And there could be a slow roll towards that. We also see pipelines and have conversations about automation, and what that can mean on the loan demand side. And we have a lot of levers there. That’s really choosing which levers we want to go forward with. But we believe those exists. Those will match largely what our deposit funding is and that is our expectation. And the other point that I’ll make is and I know we’re talking about ’23, but we’re talking about actions we’re taking as a company to structurally change how we fund our balance sheet over time. So that starts to give you more and more competence that we have opportunity for improvement. As we drive those core deposits that means that you over time lessen the wholesale funding.
So the answer, the short answer is yes, we have as much confidence as we can have in an uncertain world on what will happen, because we have many tactics and strategies both on the loan side, the deposit side, but also where we invest our capital and where we invest our money on people. And also where we invest in digital versus shifting the digital spend, shifting to digital spend from physical spend. So taking all those things together and the environment we’re in we today have a confidence level in the 2023 forecasts.
Daniel Tamayo: Appreciate all that color Andy. Just lastly, on the expense guide. It came in below actually where I was looking for it. And I’m just curious in terms of the pace of expense growth through the year, if there’s anything that we need to keep in mind or if it’s just you’re considering rather steady growth through the year. Thanks.
