And so that’s why when you look – when we talk about the breakeven of the private bank being second half of this year, it’s really just eating through the expense guarantees and getting the revenue throughput. So, it has a very de minimis impact on capital. And the same will be true on wealth lift-outs where the teams we bring on board, it will be much more of a expense guarantee mindset and getting them through their revenue curve versus having any real material impact on our capital.
Unidentified Analyst: Okay. Great. That’s helpful color. Thank you. And then just separately on loan growth. C&I demand has obviously been pretty tepid despite pretty healthy growth in the economy as measured by real GDP, do you think that lack of C&I loan demand is being driven by just general customer caution, or are you guys seeing more competition from non-bank players like the private credit market and others?
Bruce Van Saun: Yes. I think it’s just a general caution about what’s going to happen in the economy, what’s going to happen with rates. And I think most of our companies have had good years, but they are still expressing caution. So, we are actually not losing business to private credit. It’s interesting. We are actually – it’s coming the other way because there has been opportunities to take loans that are out with private credit and move them over to the bank syndicated lending market, refinance those and kind of lock in lower cost financing. So, that’s been a big part of the story here in the first quarter, and it’s continuing into the second quarter. Don?
Don McCree: I think that’s right. I think the area that we see private credit most active is in the leverage buyout market, which we don’t hold a lot of that on our balance sheet anyway. So, they are a source of distribution for us. So, we have actually done a couple of deals in the first quarter where we have distributed into the private credit market. So, it doesn’t have a balance sheet impact that it helps drive some of our fee lines.
Unidentified Analyst: Okay. Great. Thank you for taking my questions.
Operator: Your next question will come from the line of Dave Rochester with Compass Point. Your line is now open.
Dave Rochester: Hey. Good morning guys. Earlier, you mentioned that the flows were a major driving swing factor of that NII guide. I know you mentioned expecting a little less loan growth this year. But you mentioned possibly hitting the better end of that NII range. If for whatever reason, net loan growth doesn’t materialize in the back half and C&I growth only ends up filling in for the run-off that you are expecting? Can you still hit that NII guide for the year?
Bruce Van Saun: Yes. I mean I would say that we are still confident in the range. And so if things break our way, we could be at the better side of that range. If they don’t, we could be at the lower end of that range. So, I would still kind of use that as the guardrails. You would have to have kind of quite a bit of deviation from expectation to fall outside of that range.
John Woods: Yes. Great. And just to reiterate that point, what we have been saying is that we have an expectation that will come in at the better end of the range for net interest margin based on the trends that we are seeing and the performance we were able to generate in the first quarter. So, you would see us being at the upper end of that range, maybe a tad better. On net interest margin, that’s offsetting the fact that there is some lighter loan demand that we are also seeing that. You put those together, and we are right down the middle there in terms of that range, and we have got back to the point Bruce just made. And that’s our base case now that we are updating. And there could be puts and takes to that depending upon the volume point that Bruce made earlier.
Dave Rochester: Yes. Perfect. Thanks guys.
Operator: Your next question comes from the line of David Konrad with KBW. Your line is now open.
David Konrad: Hey. Good morning. Sorry if I missed this earlier, but just kind of drilling down on the NIM discussion. Just looking at this quarter, curious on C&I yields dropped around 36 bps quarter-over-quarter. I didn’t think this was a heavy swap onboarding this quarter, but just curious where we are looking at that maybe in the next quarter before the swaps come on in the third quarter.
John Woods: Yes. I mean really what’s going on, as you have hit it. I would say, just broadly, I would try to make the point that all the swaps are incorporated into the NIM guide. And when you look at the underlying fundamentals of the loan book, the front book, back book is driving an increase in loan yields ex swaps. So, that’s the first point. As it relates to when you pull the swaps together from an accounting standpoint, why there is a negative impact from a swap standpoint, is that there was a mix shift. We had the swap notional didn’t change much, but we had some maturities at higher receives being replaced by some forward starters coming in at lower receives. And that overall – that net receive rate fell in the quarter, and that’s why you ended up with that negative impact just on that line itself.
But again, overall, net interest margin was flat for the quarter. And when you put it all together with all the components, we had quite a strong net interest margin performance even incorporating that swap drag.
David Konrad: Yes, I agree. And then you talked about the securities book both the front book, back book and then the pay floaters coming out. But just curious your outlook for the growth of the securities book going forward?
