Steve Steinour: Zach also talked about improving net interest income and NIM at 2024. So I don’t think of that as — our outlook is not of a negative nature. We’re investing in the businesses, we’re going to do a number of things that I think will position us really well for the medium term, like 2025, 2026 in terms of further growth. We’ll have some new capabilities and some additional talent in the company. We’ll be in a position to manage with data and processes even better as we go forward. We’re accelerating some of our multiyear plans into 2024. And as Zach said, that’s — that growth outlook or expenses in 2025 comes back to a more normal level. So this is us being intentional, position the company to play OpEx and we think we’re in that position.
We are confident on our credit. We’ve got good and growing capital on both a gross and an adjusted basis. Liquidity is exceptional. The deposit growth continues. And as you saw in 2010 to those who were around in that period of time, there are moments to take advantage. That’s when we launched [indiscernible] as we do a number of things in the commercial bank and really opened up SBA lending, et cetera. We think this coming year is one of those moments, and we intend to put out those.
Jon Arfstrom: Okay. So it’s — okay, that’s good. I had to ask it, Steve, I’m getting asked that question, but I just needed to know if you’re optimistic or pessimistic for 2024, and it sounds like you’re…
Steve Steinour: We are optimistic about 2024 and beyond. And beyond, Jon.
Jon Arfstrom: All right. All right. Thank you.
Steve Steinour: Thank you.
Operator: Our final question is from the line of Steven Alexopoulos with JPMorgan. Please proceed with your question.
Steven Alexopoulos: Hi. Good morning, everyone.
Steve Steinour: Good morning, Steven.
Steven Alexopoulos: Steve, I heard all the commentary for the past hour on expenses. And I guess what I still to understand is, is the step-up in expense growth in 2024, is that tied to you seeing a better revenue environment to absorb a higher level of spend or is something going on that’s going to require you to be spend more in 2024 agnostic for the revenue environment?
Steve Steinour: So we’re gearing the company to manage a growth dynamic that we expect will be in place in 2024 and beyond. We also are accelerating certain multiyear investments into 2024, so that we’re in an even better position with data, and it’s principally data to manage in — managing company, right? We’re at different scale outpost TCF. We saw a lot of unique activity in March around Silicon Valley, things move very quickly. We want — and board wants better data, better access to information that we have and make pushing a button together. So — we’ve been on a multiyear journey. We’re going to pull that forward and position the company to be even stronger. We’ve been managing market risk as you’ve seen with us hedging about half of our AFS portfolio since 2019.
But our processes have not been as automated as we would like them to be, given the speed at which things can change. And so we said we would take advantage of lessons learned out of Silicon Valley and others in this most recent episode, and that has resulted in us making a number of adjustments in our treasury and core policies that I think will prove to further bolster our aggregate moderate to low risk appetite and then these investments in data and some other areas in addition to the revenue area investments, will also position us to more effectively manage the company on a real-time basis.
Steven Alexopoulos: And will this step the pace of investment? Is that a 2024 story? Or is it a 2024 and beyond story?
Steve Steinour: But we’re trying to pull things forward into 2024 as Zach said, and as we think about 2025 and beyond, we’ll be back to a more normalized. Again, this is — this was an electional part, an overall view of trying to take advantage of the environment that we see in 2024 and beyond and position the bank for growth. [indiscernible].
Steven Alexopoulos: Well, it sounds like it’s partially opportunistic and partially you need to invest in systems, right? It sounds like that portion of this too?
Steve Steinour: We had multiyear plans that were accelerating. That’s choice.
Steven Alexopoulos: Okay. If I could ask one last question. So I don’t know if you can [indiscernible] recently was asked about crossing $100 billion, well, you really don’t want to cross organically, right? You don’t want to be $101 billion. But you guys had $186 billion today. How do you see this with these proposed changes coming. Do you think you’re in a good spot at this asset level? Or do you think you need to boost size and scale to just give what this potentially comes? Thanks.
Steve Steinour: We own the risk at risk management. We’re going to maintain this aggregate moderate to low-risk appetite. We’ve done things well in the past. We’ll continue to do them in the future. I think the size of the business is not the only determinant. I think the business model itself is very, very important. Part of the strategy over time is to be deep in certain markets for our consumer and regional bank, giving us brand awareness and other attributes that let us continue to grow the core. And then we’ve invested selectively in a variety of commercial businesses. Our asset finance, our equipment finance and distribution finance. A number of these businesses that and beyond the specialty businesses that are national in nature, complemented by things that we’ve added on the payment space last year.
The acquisition on the investment banking side, all of which give us more pride and capabilities to [indiscernible] to our customer base. And we’re going to continue that. We’ve alluded to additional talent and capabilities in the near term, and we expect to be in a position to start talking about that. But all of that’s in that 4% guidance for you for next year.
Steven Alexopoulos: Okay. Thanks for taking my questions.
