Christopher Marinac : Thanks. Good morning. I wanted to ask about originating loans kind of in the legacy for citizens footprint from the perspective of possibly having lower charge-offs there, and therefore the guide on charge-offs could even be better down the road. I mean, Craig, is that a plausible scenario that you may originate less in some of the CIT and SVB areas and more at the old for citizens and that drives different charge-off outcomes?
Craig Nix : No, I don’t think that’s the case. I’ll let Elliot talk about our loan forecast across the business segment.
Elliot Howard : Yes, we really see good growth really across the segments. I think, for the general bank, really the branch network driving it, and we’ve continued to have good growth there. I mean, I think it’s a testament to kind of the good market strategy, the tenure of our sales teams, so we’ve seen that up, meaningfully this quarter, and I mean, you’re right, that book has really kind of sub 15 basis points type charge-offs, so we see that continue to be a benefit. TMT as well, I think we called out some of our industry-leading verticals, TMT, energy, healthcare, so we see growth there. And then with SVB, I think more collaborating on that, as we look at, GFB, the capital call business that has really no charge-off history, we see continued growth there for the rest of the year as kind of some of the recent originations that we have pulled through.
I don’t necessarily see us pulling back on any of those segments, but to the extent that we keep having good growth in the general bank, that’s certainly helpful to the charge-off ratio.
Christopher Marinac : Got it. Thanks for that clarification. I appreciate it. And any other criticized trends for the general bank, outside of what was called out in the slides this morning?
Craig Nix : No.
Christopher Marinac : Would you see a criticized kind of rise slightly from here, or what would be the outlook if there is any?
Craig Nix : Are you speaking to the general bank?
Christopher Marinac : Correct. I’m just looking beyond, what you called out on SVB and some of the other areas.
Craig Nix : We don’t see any rise there. We anticipate it’ll be fairly stable.
Christopher Marinac : Great. Thank you for taking my questions.
Craig Nix : Yes. Thank you.
Operator: Thank you. The next question is from Zach Westerlind with UBS. Your line is open.
Zach Westerlind : Hi. My question is just around the trajectory of loan yields. I saw that it picked down quarter-over-quarter. Is that just a function of lower accretion income, or is there another driver there? And any color you could provide on the trajectory going forward would be great. Thank you.
Craig Nix : Yes. It was a decline due to accretion declining in the quarter. We were down about $40 million on a sequential basis in accretion income, so that had an impact. As far as trajectory, it really depends on the rate cut scenarios. If we look at just no cut, we would look at the sort of the headline yields remaining fairly stable with the first quarter, and ex-accretion actually bumping around where it was at the end of the first quarter. With three cuts, we would start to see some decline in the yield to the low sevens in the second quarter and to the high 670 or the mid-670s at the end of the fourth quarter. We would certainly start to feel that impact going forward if we had three rate cuts. And what our projection, the way we projected this, we have one rate cut in the second quarter, one rate cut in the third, and one in the fourth.
So obviously timing of those rate cuts can impact that as well. Accretion income added 45 basis points to the margin last year, and we expect that to be down 24 this year. A fairly substantial reduction in accretion income.
Zach Westerlind : Understood. Thanks for taking my question.
Craig Nix : Yes. Thank you.
Operator: Thank you. We have a follow-up question from Brian Foran with Autonomous. Your line is open.
Brian Foran : Just two quick ones. Can you remind us where you want to get the loan-to-deposit ratio or range over time or on a normalized basis?
Craig Nix : Yes. On a more normalized basis, we see that loan-to-deposit ratio getting back to the mid-80s.
Brian Foran : Perfect. And then as we start thinking about ’25 and maybe putting the rate cuts in ’25 as opposed to ’24, if the Fed is cutting a few times in ’25, would kind of the sensitivities be similar to we’re seeing now? Like if you took three rate cuts out of the guide and it moved up 200 million, if we put those rate cuts into ’25, is the sensitivity kind of similar? Or is it different for any reason as the balance sheet moves around?
Craig Nix : It would be similar. It would just push the trough out further. But yes, similar trends. We would expect similar trends as it’s sitting.
Operator: Thank you. I’m not showing any further questions at this time. I’d like to turn the call back over to our host, Deanna Hart, for any closing remarks.
Deanna Hart : Great. Thank you. And thank you, everyone, for joining our earnings call today. We appreciate your ongoing interest in our company. And if you have further questions or need additional information, please feel free to reach out to our investor relations team. We hope you have a great rest of your day.
Operator: Ladies and gentlemen, this concludes today’s conference call. You may now disconnect. Have a wonderful day.
