Timothy Spence: Yes, great question Ebrahim. And I think maybe a nuance, I’m less trying to draw a distinction between us and others than I am to say that you can’t get what we think we have in terms of the advantages overnight, right? They’re not advantages that can be built in one to two years. They require a steady and consistent investment, which, of course, has been the philosophy here, along with the belief that you have to find ways to self-fund it through efficiency and better productivity along the way. And I’m hesitant to say Fifth Third is going to be a growth bank because I think four or five of the people who are described as growth banks failed this past year. Our belief, though, is that great companies should be able to take market share on an organic basis.
So if you assume that the base market growth is somewhere around 2% or at least the financial services sector should be able to track GDP. There’s a headwind with the emergence of all of these nonbank competitors. Therefore, the more realistic goal from my perspective is to try to beat GDP by a couple of percentage points on an annualized basis, which probably means you need to have 3% to 4% outsized growth relative to your market. These granular investments we’re making across the Southeast are definitely part of the way that matriculates in the performance. I think the other place then you should expect to see it, given where we’re investing is continued support for a better fees to total revenue mix, which is going to be really critically important in the event that the rules as they are proposed do pass because of the impact that higher capital and liquidity requirements are going to have.
And you’re seeing that today. The core Fifth Third consumer franchise, if you just look at household acquisition as a measure is outgrowing Midwest population growth by about 1.5% per year. It’s outgrowing the Southeast markets by about four percentage points per year. So you can see the impact of the incremental investment, if you just disaggregate our business and look at it on a market-by-market basis. Jamie, maybe you want to add something here?
James Leonard: Yes, Ebrahim, on maybe to tie your two questions together, on the loan-to-deposit ratio, part of the improvement has been the strong deposit growth we’ve been able to get both from the RWA diet, which I talked about a couple of quarters ago, just how customer reaction resulted in more deposits and a better share of wallet. And that continued in the fourth quarter and commercial deposits, you see in the numbers are up nicely. And then on the Southeast, we actually grew deposits in the Southeast, 5% just in the fourth quarter. And so you do get that growth in the numbers, but the Midwest still grew in total about 1%. So we’ve got a very nice balance here of Midwest and Southeast. And I was down in South Carolina on Wednesday, we opened our 10th branch in South Carolina this week and have plans to do 25 more over the next five years.
So I think you’ll continue to see the benefits of the investments over the last three years as we continue to really expand that Southeast presence.
Ebrahim Poonawala: Thank you.
Operator: Your next question comes from the line of Erika Najarian of UBS. Your line is open.
Nicholas Holowko: Good morning. This is Nick Holowko on for Erika. I think in the past, you’ve talked about a curve where the front end is in the low 3% range as an ideal rate environment for the bank. Is that still the right way to think about it? And if we get to that range, do you think we could see NIM migrate back to the 3.20% to 3.30% range that you’re producing back in the 2018, 2019 period. Thank you.
Bryan Preston: Yes, absolutely. We’re turning to a normal curve where we would have, I’d say, a 3% front end and maybe 100 to 200 basis points of spread between the front end and the 10-year rate is a very ideal environment for us because, one, we are going to get the benefit of deposit repricing lower, and at the same time, still being able to pick up a lot of benefit associated with that fixed rate asset repricing. So being able to achieve a 3.20% plus NIM in that kind of scenario, a year or two forward would be something that would be easily — that should be very easily achievable, and we feel good about that environment.
Operator: Your next question comes from the line of Vivek Juneja of JPMorgan. Your line is open.
Vivek Juneja: Hi. Congrats, Bryan and Jamie. A couple of quick questions for you guys. One is in your NII outlook that you’ve given for the year, what are you assuming for deposit betas on the way down. Sorry if I missed that, trying to keep an eye on bunch of different releases this morning.
Bryan Preston: Glad you asked the question. It’s the first time it’s come off, actually, and it wasn’t in our scripted remarks. We are expecting betas on the way down to look very similar to what we saw in the last couple of hikes which is in a 60% to 70% range. We don’t expect a significant difference in betas between like the first cut and the third cut. You’re still at such a high level that, that beta should be relatively high from a marginal perspective. Our rate risk disclosures, we talk about, say, 60% to 65% beta on the way down. We tend to be a little bit conservative on those disclosures. So we think we’re going to be able to deliver that, if not a little bit better.
Vivek Juneja: Great. Another little one. Other consumer loans, the NPLs moved up quite a bit linked quarter to a little over 1%. Any color is that coming from dividend finance? Or is that something else?
