Manuel Navas: I appreciate the color there. On deposits, the CV engine is definitely powerful. It’s what customers are looking for. Are you seeing — do you have some breakdown on what you’re seeing from — is that from new customers, current customers bringing over more funds? Can you just kind of talk through where you’re winning there?
Vincent Calabrese: Yeah. I would say…
Vincent Delie: Yeah, I think it’s a combination…
Vincent Calabrese: Go ahead, Vince.
Vincent Delie: I’m sorry.
Vincent Calabrese: No, you go ahead.
Vincent Delie: I was just going to say — I think it’s a combination of all of the above. I think part of the strategy is to persuade folks to bring additional dollars over. So some of the campaigns focused principally on that. The money market offering, some of the CD offerings that we have. I think we’ve had quite a bit of success bringing in new customers. So north of 50% of the new money that comes in is new customers. So it’s better than 50-50, but it’s worked. Let’s put it that way. But I think the principal reason why we’re successful, and we’ve been able to manage the betas and the migration a little better really is because of the insight that we have within our customer base with the tools that we put into place with AI and our data scientists and the data hub that we have, we’re able to spend a lot of time analyzing behavior.
And I think that’s really helped us with pricing. And we’ve been a little more disciplined than others. Maybe if you look at our cost of funds and our margins a little better. So it kind of shows there. But I also believe that being the principal bank for consumers and businesses, as I said in my remarks, is critically important, and that requires a consistent investment in technology, treasury management services, all the things that I mentioned early. So they both go hand-in-hand.
Manuel Navas: I appreciate that. Do you have a rough percent — a rough average rate on the new CDs or what’s your current best offer? And then just talk about the seasonality in the muni book briefly?
Vincent Delie: Yes, Vince, I don’t know. I don’t have those details at the tip of my fingers. Do you have that, Vince?
Vincent Calabrese: Yes. I would say, I mean, a couple of things. The rates on the promotional CDs and money market rates have been right around 5%, a little below or a little above. So we’ve had — as Vince said, with all the data analytics supporting it and the tools we have in place, we’ve brought in close to $800 million in new money really since May through that. And that’s kind of dedicated the overall balance sheet. And then the muni flows, I’ve always talked about is $300 million to $500 million is kind of the range of what comes in. And during the most recent quarter, it’s at the higher end of that and really kind of spread throughout the categories. It’s a small amount is really in the DDA and most — it’s more in the money market and sweep accounts where that money flows through. And that peaks and troughs as you go through the year, kind of builds through October, November and then the first quarter is always the trough of that.
Manuel Navas: All right. I appreciate that. And then just switching topics — switching gears for a second. What are kind of updated thoughts on buyback? You just had so much growth this quarter. Is that the main kind of limiter there? And obviously, that probably comes first organic growth. But can you just kind of walk through where buyback fits in, given that CET1 is above your target?
Vincent Calabrese: Sure, I can comment on that. I mean the 10.2%, so we’re a little above our target. I think during the second quarter, when we were active, there were great opportunities to put some money to work there. And in the third quarter, with the growth we had, plus the timing of the special assessment, there was an expectation that might happen in the third quarter and just the uncertainty, we decided not to be active during the third quarter. It’s — as always, we’re committed to managing capital in a manner that’s fully aligned with shareholders. So we’re closely monitoring it. We may become active in the fourth quarter, but we want to really see how the overall environment plays out. But clearly, there’s room to do that.
And with the dividend payout ratio that we’ve all worked really hard to get down to 30%. We now have flexibility and the strong earnings generation that we have where this number will build, and we’ll put it to work. The loan growth stays strong. We’ll use that to support loan growth. That’s always our kind of first and best use of the cap.
Vincent Delie: Yes, Vince. The other thing I wanted to mention is the tax credit transaction that we closed this quarter. Some folks have asked, is that like a one-time event? No. We actually have a business that pursues tax credit transactions, particularly in the energy field. So we’ve done a number of them over the last few years. And the group, there’s a pipeline of tax credit transactions that we pursue. So sometimes, it’s lumpy because it takes time to build out a solar field or it takes time to get certified and get that stuff up and running because they actually have to be delivering power, right, before you can start the whole process from a financial perspective. But it is a business that we have. It’s in our corporate finance area, and they’ve done a terrific job over the last few years.
So I would expect that to continue as well into next year because we’ve developed that expertise, and we’re confident that the people that we have doing that, Tim and his team has done many of these very well positioned to keep pursuing opportunities. But I would add that to the mix as well because it doesn’t show up the same way from a profitability perspective because we book an asset that has a very low margin, right? That ends up impacting margin, and then we get a tax benefit. And then you all say, well, well, you’re just winning on a tax benefit, but that’s actually part of the profitability of the extension of the credit, just so everybody understand. So some folks have asked us about that. And I wanted to make sure we were clear that, that’s something that we pursue on an ongoing basis and will be additive to next year as well.
Manuel Navas: And it provides capital too, right?
Vincent Delie: Yes.
Manuel Navas: I appreciate that added color. Thank you.
Operator: All right. The next question comes from Frank Schiraldi from Piper Sandler. Please go ahead.
