Frank Schiraldi: Wondering if you can — Daryl, just in terms of the criticized balances, the reduction in CRE overall, curious if you can just point to any specific driver there? I think this is the second quarter in a row where you’ve seen a reduction in criticized balances? Is it just occupancy is better and debt service coverage better? Is it stuff moving maybe into modification? Just any sort of like specific driver in terms of the last couple of quarters, seeing those balances move lower?
Daryl Bible: Yes. I mean the CRE portfolio with the exception of office and healthcare, the operating performance of the CRE businesses are performing well. Some of them are stressed just because of higher rates. But as we continue to work with our clients going through, we feel very good that we’re going to work through these issues. It’s what that we said earlier in other calls, Frank, but our customers work with us and put capital in, and we’re definitely seeing all of our customers, our sponsors really support these projects. I think it really starts with client selection. And we have really good client selection that really helps win the day for us. So I think you’re just seeing that commitment come through and we’re working really closely with them and I think that’s really important as we move forward. So I think we will continue to work through this, but definitely feel that CRE is very manageable, and we’ll continue to address that.
Frank Schiraldi: Okay. And then just to follow-up on the expense side. I know even though you have limited expense growth baked-in for this year, you do have some investments you guys are focused on. And just wondering if given the stronger NII outlook driven by rates, if you could potentially foresee accelerating some of that investment in 2024. Thanks.
Daryl Bible: Yes. I would tell you, sometimes you can only do so much in a company at once. We got six major projects we’re working on right now in the company. We’re all making really good progress in these six major projects. And they’re going as fast as they can go, to be honest with you, with what we’re doing. I can’t imagine that we would push them to go faster or if we try to start up another project. There’s just a lot of change going on in the company, and I think we’re just going to be conservative, get these things across the finish line and then start up other ones as we move forward.
Frank Schiraldi: Great. Okay. Thanks for the color.
Daryl Bible: Thanks, Frank.
Operator: Thank you. Our next question will come from Gerard Cassidy with RBC. Please go ahead.
Thomas Leddy: Hi, good morning. This is Thomas Leddy calling on behalf of Gerard. Given the jump in criticized loans in the quarter and the fact that you guys tend to historically carry a little bit more than peers. Just curious how does the criticized levels today compare to where they were in the 2008, 2009 and then 2020 peaks?
Daryl Bible: I’m going to see if I have a friend here to help me with that. I don’t have that. Yes, hold on a second, Tom.
Thomas Leddy: Okay.
Daryl Bible: So back in 2008, 2009, it was more — I’ll just let John talk about it. John is our Corporate Controller. He was here back then. I’ll let him talk about it. I don’t know that.
John Taylor: I’ll just say that, obviously, 2008, 2009 was more of a residential mortgage-type issue. So we don’t criticize per se, we won’t monitor delinquencies on the residential side. There were pockets of criticized. So they did rise. I don’t have those numbers at my disposal, but these numbers on the commercial side are higher than what they would have been back then.
Thomas Leddy: Okay. Thank you. That’s helpful. And then just a quick follow-up. With the increase in criticized C&I loans reported today, do you guys still feel pretty confident that you can maintain M&T’s historical track record of outperformance in terms of credit losses relative to peers?
John Taylor: Yes, I think we do. We have a long-term history of performing in good times and stress times, and I think we will continue to do really well and perform, and all that will come to fruition. I mean, I couldn’t be more pleased with how hard everybody is working and the success that we’re making. We have a ways to go. But you kind of see that we have a path and how we’re going to get through that. And I have no doubt in my mind that we will get through this positively and still have really good credit performance.
Thomas Leddy: Okay, great. That’s helpful. Thanks for taking my questions.
Daryl Bible: Yes.
Operator: Thank you. Our next question will come from Christopher Spahr with Wells Fargo. Please go-ahead.
Christopher Spahr: Hi, good morning. So two questions. First is just reconciling your outlook for the NIM and the increase in long-term borrowings that we saw both at end of period on an average basis this quarter?
Daryl Bible: So, we basically did some Federal Home Loan Bank advances back closer to when New York Community was happening. And then we did an unsecured issuance in the month of March. That will carry through. I think for the rest of the year, our focus is really on growing customer deposits and paying down noncustomer funding. That’s really what we’re really focused on. You might see us do some more securitization. We’ve done securitizations now in our equipment leasing business as well as our auto business. That’s something that could possibly play out down the road. But we will prudently grow customer deposits as much as possible. And then we’re going to work — and try to work down our broker deposits and work down our Federal Home Loan Bank advances and put it into more other types of funding like securitizations if we need to from that perspective.
