Peter Sefzik: Hey John, this is Peter. So, yes, when you say 3% down, that’s the average year-over-year and our outlook now is 4% or 5% point-to-point for 2024. And I would say, as we did in the comments here, it’s pretty broad based, we’ve got some given takes as we go throughout the year across our portfolio. I think, in general, though, middle market is kind of where we feel probably the best about that. We did a lot of rationalization in 2023 coming into 2024 that I think has sort of affected us for the first quarter and will a little bit in the second, but we’re pretty much past that rationalization. And I think from here on, we feel good about being able to project the 4% to 5% point-to-point. And again, I’d say it’s pretty broad based across really all of our businesses that you see in the deck that we show.
There are there are some kind of some that I would say are probably more impacted by the interest rates higher for longer than others. But I would say that that’s mostly kind of in our small business, business banking, maybe private banking space, but in general, middle market and up I think, it seems like we’re seeing really, really good opportunities. And again, the pipeline has grown and really feel like that’s going to be an opportunity throughout the year.
John Pancari: Thanks. And did you comment on your utilization rate for the quarter?
Peter Sefzik: I believe it’s in our deck, but it’s down just a little bit on utilization across the portfolio.
John Pancari: Okay, great. Thank you,
Curt Farmer: Thanks John.
Operator: Thank you. The next question is coming from Scott Siefers of Piper Sandler. Please go ahead.
Curt Farmer: Good morning Scott.
Scott Siefers: Thank you guys. Good morning. Thank you for taking the question. So, Jim, I was hoping a lot of good detail on Slide 11 regarding the swaps and the securities that will become a pretty meaningful tailwind as we go forward, are you able to sort of help size just the way you sort of think about things internally, just order of magnitude of how much NII can improve over the course of the next couple of years. Some of your peers have given sort of a longer margin outlook, just anything you’re comfortable giving? I think there’s sort of a wide range of expectations for what earnings could look like at Comerica over the next couple of years. So, just anything that helps sort of narrow the cone a little would be great?
Jim Herzog: Yes, happy to do that, Scott. It’s going to depend somewhat on how we redeploy that liquidity. So, there is going to be a range of outcomes there. But we do pick up increasing momentum as we move through this year, that’ll continue in the next year. Next year, we are going to be pretty far north of $100 million of net benefit, netting out the maturing securities and swaps versus what we might reinvest it in. And that that benefit next year will also increase with positive momentum upward as we move through 2025. And so the exit rate for 2025 going into 2026 will also be very substantial. So, there is a pretty incredible tell when coming our direction as relates to some of these maturities.
Scott Siefers: Okay, perfect. Thank you. And then maybe, if you can speak in a bit more detail around thoughts on capital management. You’ve been very appropriately conservative. I think the rate moves in the first quarter in particular, kind of validated that. But just curious if there’s a point where you just get more comfortable in resuming repurchase in spite of kind of the volatility and the rate backdrop, just given what we know will be coming due and sort of going away over the next couple years?
Jim Herzog: Yes, that is something we continue to monitor very closely. Obviously, the first — as we’ve said many times before, the first use of capital for us is for our customers. And as you heard from Peter, we are expecting pretty significant loan growth in the second half of the year, so we want to make sure we’re there to support the customers. And certainly we’re going to be in very good shape from that standpoint. In terms of turning on the share repurchase, I think we’re going to be in really strong shape from a capital ratio standpoint even with that loan growth. But we continue to look at the interest rate environment and the AOCI and the new end game rules whenever they should happen to come out. We want to make sure we’re comfortable from that standpoint.
And we have seen the interest rate environment kind of shift on us in recent months. And the momentum seems to be a little more upward than backwards, downward. So, that gives us some pause in terms of turning on the share repurchase and we would like to see some stability interest rates and the overall curve before we turn the share repurchase back on. So, that continues to be the number one factor that we’re looking at.
Scott Siefers: Okay, perfect. Thank you very much.
Curt Farmer: Thanks Scott.
Operator: Thank you. Our next question is coming from Steve Alexopoulos of JPMorgan Chase. Please go ahead.
Curt Farmer: Good morning Steve.
Steve Alexopoulos: Good morning everyone. Morning. So, last quarter, when the forward curve, I think it’s six cuts at it, Jim, you talked about NIM dipping down a bit in 1Q then a steady climb. I think you said by the end of 2024, we could get to an NIM that was above the 4Q 2023 level, which was 2.91%. It sounds now that the NIM will likely bottom, I think you’re saying in 2Q, do you think you could still get up to that 2.91% level by the end of the year?
