Chris Gorman: Well, sure. Well, it starts with – and certainly through last year’s exercise, the first thing that we went to customers and said, we need your deposits. So it starts as simple as getting the deposits. And I think 86% or so of our businesses, we have multidimensional relationships. The next thing that we focus on is payments. We’ve been investing in payments for a long time and for these middle market businesses. It’s not just moving money around, but it’s providing information, embedded banking and so forth. And then, of course, we have the ability to help them hedge. We have the ability to raise capital for them. And then obviously, the ultimate is being able to give them strategic advice. We’re fortunate that because we’re structured around industries, we can do all of those things, but we can’t do those things if the company isn’t receptive to our ideas.
Gerard Cassidy: Very good. And then as a follow-up question, I know you guys addressed what you did in the deep dive for looking at the portfolios. In the criticized loan increase, can you give us the number one, two or three reasons a loan moved into criticized? Was it a loan-to-value degradation? Or was it a debt service coverage? What was kind of the main factors that pushed them into criticized?
Chris Gorman: It’s debt service coverage. So – with the first thing we focus on is debt service coverage, and for purposes of this we completely de-link any secondary source of repayment and we assume that the only source of repayment is the primary source, and that, of course, is straight up cash flow.
Gerard Cassidy: Appreciate it. Thank you, Chris.
Chris Gorman: Sure.
Operator: Thank you. Our final question will come from the line of Peter Winter from D.A. Davidson. Please go ahead.
Peter Winter: Thanks. Good morning.
Chris Gorman: Good morning, Peter.
Peter Winter: Chris, you mentioned in your opening remarks that you’re ready to play offense again, but sounded a little bit cautious on period-end loan growth. Can you just talk about the loan commitments, loan pipelines and how you’re thinking about loan utilization in the second half of the year?
Chris Gorman: Yes. So I don’t think those things are incongruent. We clearly are playing offense. We’re out hiring people. We’re focusing on the business that I’m mentioning. Having said that because of our business model we are not seeing huge loan demand and so if you think about utilization, we’re basically flat at 32% and we’ve been flat at 32% for the last few quarters. Our loan book is building, and there’s no question that our backlog is not – is higher than it was, but it’s not at historical standards.
Peter Winter: Got it. Okay.
Clark Khayat: And Peter, I might just say, sorry, it’s Clark. I might just say thematically, and I think Chris has hit this a couple of times, but maybe just to summarize a little bit. I think for us, when we say we’re playing offense we think that looks like disciplined loan growth in our targeted verticals, which we’ve been, I think very consistent about over time. I think it’s funded by quality deposit growth from commercial and consumer clients. And it’s monetized through a series of we think leading fee platforms that build that broader relationship. So we think that’s the recipe. And when we’re doing those things and they don’t always come together and they don’t always come necessarily in that order. But when we’re doing and running our business in the relationship manner that we intend to, that’s what it feels like.
Peter Winter: Got it. And then can I ask if the outlook is a pretty strong momentum in the margin for this year, and you’ve mentioned a more normalized margin is closer to 3%. Would you expect to get near that level maybe towards the end of next year?
Clark Khayat: Yes. I’m focused on confirming guidance for this year, Peter, but it’s a totally fair question. I do think it’s a function a little bit of the shape of the curve and absolute rates. But as I’ve said before, I think based on the business model we have in a normal kind of upward sloping to at least flatter yield curve, I think that’s achievable. So it is a function, I can’t predict where that yield curve is going to be in 2025. But I think as our positions burn off, we get more to the type of balance sheet we want to have and you get a little bit more normalized rate environment, regardless maybe of even absolute levels of rates, but just direction of the curve, I think that’s very achievable.
Peter Winter: Got it. Thanks for taking the question.
Clark Khayat: Yes. Thank you.
Operator: We do have a couple of other questions that just queued up. Steve Alexopoulos from JPMorgan. Please go ahead.
Janet Lee: Hello. This is Janet Lee on for Steve Alexopoulos. Just following-up on John’s question earlier on investment banking and capital markets; are you maintaining your stance that you are progressing towards this normal level of $600 million to $650 million range for IBs this year? Because if I look at absent a double-digit decline in IB fees in the second quarter. It looks like you’re on pace to exceed that normal level. Is that a fair way to describe? And where is that decline in IB fees expected in the second quarter, mostly coming from? Is that debt capital markets, commercial mortgage, can you provide more insight?
Clark Khayat: Yes. So this is Clark, Janet. So we would be consistent with where we were before, which is kind of that $600 million to $650 million range. We think that feels right. We do think there’s upside to that. But as Chris mentioned, we’ll be down in the second quarter, I think that’s a function, not necessarily any one area because the rate volatility, I think is causing some hesitancy in a few different places. That doesn’t change our outlook for the year, but I don’t think at this point, we’re totally prepared to say that will go to kind of a full normalized view.
Janet Lee: Okay. And just one follow up on your loan review. I understand that office CRE is a very small portion of your overall portfolio. And as you’ve done the reappraisals on the properties on I guess, including office, if you have, like what percentage of decline you’re generally seeing on your office? And what’s happening to the updated cash flows from the landlords? Any insight you could share on that?
