Manan Gosalia: Got it. That’s helpful. And then just separately, I realize the FDIC special assessment hasn’t been finalized, but I was wondering if you know once it’s finalized, does that come out all in one quarter where there’s a reserve? Or does it come out over the course of the two years as the proposal suggest?
James Herzog: Well, we’re still waiting, of course, for the rule to be finalized and there’s been a lot of input provided there. So we really don’t know where it’s going to end up. I mean, I think the best speculation is from a cash basis, we would probably pay it once the rule is established, but it would be recognized on an expense basis and therefore, it’s impacted capital over a couple of years. But there are a number of variables at play there in terms of all the input being provided. So I think we just have to wait and see what the final rule has in it.
Manan Gosalia: Got it. Thank you.
James Herzog: Yeah, it would be a onetime hit to capital, though, once it is recognized, the rules.
Operator: Your next question comes from the line of Peter Winter from D.A. Davidson. Please go ahead.
Curtis Farmer: Good morning, Peter.
Peter Winter: Good morning. I was wondering, with deposits closer to stabilization or the outflow slowing, net interest margin nearing a bottom, do you think net interest income could stabilize in 2024 relative to the fourth quarter?
James Herzog: We think it’s getting very close with the betas. Based on where the curve was on June 30th, we think betas will probably stop rising once you get to around December, January. But of course, you have the full quarter effect of that probably dipping a little bit into 2024. We’re bringing loan balances down throughout the year. Most of that loan balance drop will occur in the fourth quarter, so you could get a full quarter average of that kind of tripping into the first quarter of 2024 also. So just because of those quarter-to-quarter bleed-ins, I don’t know, there will be 100% stabilized in Q1 of next year, but I do think it will stabilize, if not Q1, probably in Q2. There are some other variables going on in terms of how pricing plays out in the industry that could be a potential tailwind. But, yes, I think as we cross over the year, you’re very close to a bottom there. And I would say by Q2 probably at an inflection point.
Peter Winter: Got it. That’s helpful. And then obviously, there’s a lot going on, on the expense side that nonrecurring between the pension, the modernization. Can you just remind us what a normal expense growth rate is? And is that more likely next year?
James Herzog: We typically putting aside some abnormal ebbs and flows like those things relating to pension, I mean we typically think of expenses as being in the 5% range in terms of what we shoot for, but that’s going to vary from year-to-year depending on what pressures are on us, things like FDIC can make a difference as that can be elevated for a year or two at a time. Again, pension can be a big factor. So I don’t think any one year is ever going to exactly be the average. But over the cycle I kind of think about it as probably 4.5% to 5%.
Peter Winter: Got it. Thanks a lot.
James Herzog: Inflation, obviously being a huge factor also.
Operator: Your next question comes from the line of Chris McGratty from KBW. Please go ahead.
James Herzog: Good morning, Chris.
Christopher McGratty: Hey, good morning, Jim. Quick question on the rate outlook. Obviously, the market expects one next week. But if we stay in a higher for longer for the rest of the year and next year, you get the forward curve, you get a couple of cuts. Could you talk about how you think your balance sheet will respond in terms of margin performance given all the hedges you put on? Thanks.
