Michael Mayo: And I’m sorry, the start of the 3-year period now is — was when?
Timothy Spence: The last three years, we will have grown expenses less than anybody else. The next three years, we intend to do the same thing. We intend to generate positive operating leverage over the next three years. The same way we have to last three years.
Michael Mayo: Got it. And then let’s just go back to that quote One Robin does not make a spring. You said June was better, but you’re not extrapolating that. Your guidance may be conservative, may not be, but Jamie, what is it that you saw in June and why.
James Leonard: Yes. there were two — yes, two things, Mike, that happened in June that are certainly opportunities for the back half of the year to be better than what we’re guiding to. But like most things, I’ll give you another quote. The beauty is in of the beholder. So some folks look at the credit spread widening and the C&I coupon expansion that occurred in the market, and we experienced that as well in June. Spreads were up a bit. We’re not guiding to continued spread expansion in the back half of the year in C&I. And then on deposits, June was a very good month for the industry, whether you watched the H8 or you’ve heard from all the banks that have been reporting, and you see it in our numbers. We’re up 2% on deposits year-over-year.
We’re up 1% on an EOP basis sequentially. We had a very nice June from a deposit gathering, a new customer acquisition perspective. So what we’re seeing from here is we actually are forecasting on an average basis, some deposit growth in the third quarter. But frankly, if you look at the guide on an average basis, it’s about one point lower than our balances. So maybe we do better, maybe not, maybe it gives us a little bit of pricing power to do better on the beta. But with all that being said, we just still are cautious about the liquidity environment in the back half of the year, and we want to make sure that we prioritize stability until these challenges are behind us, and we start to enter into at least a Fed pause cycle, let alone a Fed cut cycle.
Michael Mayo: And then last follow-up. Just how comfortable are you that your NII guide kind of captures it? And is that the kind of entry point for thinking about 2024?
Bryan Preston: Mike, it’s Bryan. We certainly feel comfortable with our guide. As Jamie talked earlier and as we’ve talked consistently the Fed hiking cycle ends, we expect a quarter or two of impact as the deposit repricing lags play out. And we still feel like we’re going to see stability then both from an NII and NIM perspective. and growth as earning asset growth starts to pick up from there or from an NII perspective. And so we feel very well positioned with the actions that we’ve taken and the optionality that’s going to give us as we manage the balance year. But certainly, a lot can change from an outlook perspective, a lot can change in terms of what happens in 2024. But with what we see right now, we feel very good about our guide and what it’s going to allow us to grow in 2024.
Operator: And your final question comes from the line of Gerard Cassidy from RBC.
Gerard Cassidy: Jamie. I’d like to come back to Jamie and Greg on credit for a moment. Greg, you talked about — and we all recognize your credit is very strong. The numbers are very low. But I’m curious, you mentioned about how you guys have a very robust management structure that allowed you to stay ahead of these emerging trends. Can you share with us what is that robust structure. And what do you mean by keeps you ahead of those trends when you say something like that?
