Susan Springfield: Hey. I think, the — Chris, the interest rate outlook of stable rates may be going down. I — again, I think, you’ll see mostly stability based on the fact that we’ve done deep dive portfolio reviews, really throughout different sectors, C&I inquiry. I am not — I feel like we’ve got things graded in the right place. We’re continuing to talk to clients. We’re stressing — doing stress projections and the underwriter service credits. And so I think absent something really changing in the economy, if it were to worsen, obviously, we’d take another look, and it could impact clients then. But based on what we know today, I feel good about kind of a stable outlook at this point, based on what we’re seeing now.
Christopher Marinac: Great. Thank you for that. And then, Bryan, for you, do you think we’ll see consolidation in the industry this year and is there a scenario where First Horizon would be interested in buying other banks, even something small to fill in the footprint?
Bryan Jordan: Good morning, Chris. I think you might see consolidation start to pick up later in the year. I don’t think that it’s going to be a robust environment personally. I think there’s still a tremendous number of headwinds, the purchase accounting marks being the largest at this point and then I think some of the uncertainty around what the regulatory landscape looks like, both in the context of what it takes to get a deal approved and how long that takes, as well as what does it mean if you deal with some of the bright lines like $100 billion in LFIs. So I don’t expect a tremendous amount of pickup during the course of this year. In terms of First Horizon, our priorities are executing on the things that we’ve talked about and that’s dealing with the investments we want to make in technology and continuing to grow customer and client relationships.
If you look backwards, we had spent roughly three years, maybe closer to four, depending on how you count it, in the merger of equals integration and then the pre-termination period. We really want to use this period of 2024 to continue to prove out the power of the franchise that we’ve built and we think we have plenty of opportunity to deploy capital there.
Christopher Marinac: Great, Bryan. Thanks for sharing that. I appreciate it.
Bryan Jordan: Sure. Thanks.
Operator: Our next question comes from Brody Preston from UBS. Brody, your line is now open.
Brody Preston: Hey. Good morning, everyone.
Bryan Jordan: Good morning.
Hope Dmuchowski: Good morning.
Brody Preston: I wanted to circle back on the buyback commentary. Bryan, if I heard you correctly, you said you don’t have an authorization and you’re expecting to discuss it with the Board. I guess I’d ask when’s your next Board meeting and will it get addressed at that Board meeting?
Bryan Jordan: Well, as a matter of fact, our next Board meeting is next week. So we always cover financial outlook, capital management, our capital outlook with our Board. So that’s a meeting-to-meeting thing. I don’t want to prognosticate what the Board is likely to do or not do in our next meeting, but capital management is one of those things that we always spend time on. We think about it from the context of adequate capital as we stress test our balance sheet. We continue to do that and report it publicly. So I don’t want to get into what the Board may or may not consider next week, but it’s always a topic in terms of our balance sheet and financial outlook.
Brody Preston: Understood. Hope, maybe I could ask you, could you speak to the non-interest-bearing mix that’s underlying the NII guidance that you provided?
Hope Dmuchowski: Brody, we do have a small, the NII guidance has a small increase in non-interest-bearing for 2024. We went out pretty aggressively at the end of Q4 and starting in Q1 with a new-to-bank cash offer for new checking accounts. We haven’t done that before and so we are seeing some positive momentum, which I had in my prepared remarks, but I wouldn’t say, it’s meaningful.
Brody Preston: Got it. And what does it take to pay off further pay down broker deposits? Is it an ability to grow other deposit sources or would you look to kind of pay down some of that with the securities cash flows that you have on a quarterly basis?
Hope Dmuchowski: The answer is yes to all of that. So we want to continue to bring client money in to offset our loan growth. We do have loan growth projections next year and so we are focused on it and you saw us have a large closing Q4 on the marketing front as we get into our Q4 2023 as we get into 2024. And we have paused reinvestment in our securities portfolio. We use our securities portfolio to hedge our interest rate sensitivity. We’re happy where we’re at and expect that that cash flow will continue to come back. For us, number one is creating client deposits so we can lend them to clients and if we have to be a little bit in brokered for that, we will be. The bigger thing for us when we look at brokered going into 2024 is the mortgage warehouse.
As you look at the seasonality of there, you can possibly see some brokers have to come back in and then out the next quarter. But being our highest yielding asset and being short-term on the balance sheet is a great trade for us.
Brody Preston: Got it. Okay. And then last one for me and I’m sorry if you totally addressed this question, I think somebody asked about it a little earlier. It was just on that 3.25% spot deposit cost. Is that where we bottom out unless we get rate cuts or will it incrementally decline from that level in the first quarter as the last of the promo stuff kind of rolls off?
