So that’s really what is giving us the ability to grow NII during the course of 2023, as well as expanding NIM at the same time. And I think it’s one of those capabilities of Fifth Third that we’ve proven over the past decade that’s perhaps underappreciated by the market. And like you said, the securities are certainly going to be a higher level of gross income over the course of 2023, in part because we were patient in deploying the excess cash that we had and not buying securities when the 10-year was below 2% or even below 1% like some of the other banks. I think one of the bigger differentiators for us will be the fixed rate loan businesses that we have in our ability to emphasize or deemphasize those businesses. And right now, we have a little bit of an emphasis on auto being able to generate roughly $6 billion this year.
And then dividend where the gross income on dividend will exceed over $200 million of growth in 2023 relative to 2022. And so really when you package it all together with an investment portfolio that’s in a net discount position of about $1 billion, a dividend portfolio that by the end of 2023 will have unamortized fees, that will roll through NII of about $1 billion. We’ve got a lot of downside protection and a core franchise that with its ability to grow loans and deposits really is helpful. And within all of this guide, we do not assume spread widening. So to the extent that were to happen is, Tim mentioned, that would only be upside to our guide.
Michael Mayo: And then, Tim, just a broader level. I mean, do you see a recession based on your bottom up analysis based on all the markets you’re visiting, based on the clients you’re talking to? I mean, we hear so much recession talk and then we hear about your loan growth and everything else. What do you just think from a high level standpoint? And then what are your assumptions for reserves in terms of unemployment?
Timothy Spence: Yeah. I’ll let Jamie fill the question on the specific assumptions on reserves, Mike. But I probably lost my crystal ball when I moved offices earlier this past year. So, I have to rely on what I hear from clients or what we get from our friends at Moody’s and otherwise. If you asked me today, I would tell you we’re going to have a shallow recession, I think. But I don’t know that there’s a big difference between a half a percent of growth and a half a percent of GDP decline in particular, given the amount of derisking that’s been done inside the banking sector and certainly inside Fifth Third over the course of the past decade. I think the more interesting dynamic really is going to be this question about the duration of a recession if we see it, and what happens if we don’t get a typical recovery, right?
If you have several years of below trend growth and inflation that sits above the historic, certainly above the historic 2% target. But Jamie, you want to fill the question on the inputs on the reserves?
James Leonard: Yeah. Mike, as you know, we used the Moody scenarios of — their baseline scenario, and that drives 80% weighting and we maintained our weightings at 80.10% with the upside, and the S3 their adverse scenario or 10% probability scenario. So in the adverse, the unemployment gets — almost up to 8% in the baseline unemployment ratchets is up to 4.2%. And then we blend those scenarios together to drive the ACL. So, I think it meshes well with what Tim’s comments were of a shallow or mild downturn in the economy and then a recovery.
Michael Mayo: So that’s 20% for the 8% unemployment, and 80% for the 4.2% unemployment.
