But look, there is a capital outlay, which we burn some expense dollars to get it off the ground and then all of a sudden, it’s making us money and it really ramps very nicely and can achieve something like a 5% accretion in 2025, which is kind of within 2.5 years, in the second year of doing a deal If you compare that to some of the other transactions that we’ve done, including the bank acquisitions, it’s pretty darn powerful. So very excited about this opportunity.
Scott Siefers: Perfect. Okay, good. Thank you very much.
Operator: Your next question will come from the line of Erika Najarian with UBS. Go ahead.
Erika Najarian: Hi, good morning. John, I was just wondering if you can help us with lots of moving pieces that’s sort of unfurling in front of us. So, just I guess, the first question is, you noted stability in the 3% – at the 3% level. Does that mean that fourth quarter 2024 will be at about the third quarter level? I’m just wondering sort of how those dynamics play out in terms of what you expect to the – how the balance sheet trend for the rest of the year or those sort of the run-off continue to pressure it at that level and what does that fourth quarter NII about look like from a range perspective.
John Woods: Yes. I mean, I think from the NIM standpoint, you’re talking about ’23, just confirming, Erika, is that –
Erika Najarian: ’23. And building out of ’24 fund.
John Woods: Yes, no, you referenced ’24. But the answer is actually a little bit similar, but what we do see is, after the Fed hikes here in July and that the impact of that burns in in the third quarter that we do see NIM flattening out there between 3Q and 4Q, having a more flat profile as you get into the end of the year around 3%. So maybe a touch higher in 3Q net interest margin, but seeing that profile begin to flatten out and I think the key drivers of that, the pieces in parts as I mentioned, we’re starting to see the deceleration in deposit migration, the negative deposit migration. So that’s a good early green shoot, that’s consistent with the fact that our DDA levels are basically where we were back to pre-pandemic.
And so that ends up being at an expected landing zone as you get into the end-of-the year. So we’ll see that flattening out. You’ll see the tailwinds from this – from the runoff block starting to kick in, the reallocation of that capital and liquidity into relationship lending and the ability to pay-down some higher-cost funding as you get into the end of the year. And so that starts to bolster net interest margin, which we do think carries into ’24, and we think that there are a number of positive developments in ’24 that would allow us to hold that NIM out into even beyond the fourth quarter.
Bruce Van Saun: And I would comment, Erika, that this was a really important quarter for us to kind of get the deposit level where we wanted to get the Fed – the Federal Home Loan Bank borrowings lower and really take a big step in lowering the LVR. And so we paid up a little bit to achieve that and the impact of that full quarter effects the third quarter guide, but I think at this point, we feel that we don’t need to continue to really aggressively grow deposits. We can have a more stable deposit profile. As John indicated, less migration from non-interest bearing to interest-bearing and so there won’t be kind of a full quarter impact of an aggressive plan that affects Q4 from Q3, because we’ll be kind of looking at a more stable profile in Q3.
