And you’re just going to have to see some consolidation and people retreating to places where they have density and focusing on markets where they can neutralize the scale advantages that the large banks have because you’re the same size in the area where you compete versus being seven, eight, nine, 10 ranked in every market across the US, which is just fundamentally less defensible business strategy.
Manan Gosalia: Very helpful. Thank you.
Operator: Next question comes from Christopher Marinac from Janney. Your line is now open.
Christopher Marinac: Hey, thanks. Good morning. Just wanted to ask about possible changes on risk grades in criticized and classifieds. I know it might be premature to see anything upgraded, but just curious on the path of those that you saw and how that may evolve this year.
Greg Schroeck: Yeah, it’s a great question. So again, probably not going to be linear, it’s going to be lumpy. It has been for us in the past given current previous comments I made about episodic, more episodic events and the fact that we’re just not seeing trending by industry, by geography. And so, I would expect it to continue to be lumpy. But as I said earlier, we’re still liking the way our C&I portfolio is behaving. We like our commercial real estate track record an awful lot. But with higher for longer, maybe higher forever interest rates, we’re going to continue to see stress and we’re going to continue to proactively manage the portfolio as we have. We’re not doing deep dives because on an ongoing basis, we are stressing the C&I portfolio by 200 basis points.
We’re getting out ahead of any potential issues, but that could lead to some criticized assets, a special mention. We’re doing the same thing, do something on the commercial real estate side, exit stress testing. So, we’re taking a look at maturities and we’re stressing by 100 basis points a forward curve on what that loan looks like at maturity. And so, if we see weakness there, we could see an elevation in criticized assets, but 99% of our accruing criticized assets are current, right? And if you include our non-accrual, we’re still 93%, 94% current within that portfolio. So, we’ll see episodic kind of lumpiness for the remainder of the year.
Christopher Marinac: Great. Thank you for that. And just a quick follow-up. I mean, the loss content ultimately is reflected in the reserve. So that would have to change a lot for you to kind of change your guide on reserve overall?
Greg Schroeck: Exactly.
Tim Spence: Thanks for that, Chris. I think we don’t have any other questions in the queue, but we’d be remiss if we didn’t say congratulations to [Erica] (ph) and her family since she wasn’t able to join us today before we wrap up our call.
Matt Curoe: Thanks, Tim. And thanks, Ellie, and thanks everyone for joining — for your interest in Fifth Third. Please contact the Investor Relations department if you have any other follow-up questions. Ellie, you may now disconnect the call.
Operator: Thank you for everyone attending the call today. We all hope you have a wonderful day. Stay safe.
