Ebrahim Poonawala: Hey, good morning. I guess, thanks for the color on CRE office. Just was wondering if you can talk about anything beyond CRE office, particularly on multifamily in any of the Sunbelt states. We’ve read articles about just oversupply in some of these markets like Raleigh, Austin, etc. Just talk to us, one, in terms of exposure, and if whether or not you’re seeing softness with multifamily.
John Turner: So Ebrahim. This is John Turner. Our total exposure I think in multifamily exceeds just above $3 billion. It is a very diverse portfolio spread across 137 total sub markets, some number like that. We are in terms of concentrations, our top five exposures would be in cities that you would recognize; Dallas, Houston, Charlotte, Raleigh, Orlando, Miami, places where we have just historically banked and have a presence. We don’t have any concentrations at all in any of those markets that would exceed. I think one exception would exceed 5%, 6%, so again, good diversity. We are seeing some softening of rents, increasing costs associated with interest costs. About a little over 50% of the portfolio is currently still under construction.
So we expect that those construction projects to be completed over the next 24 months to deliver out. We’re not – while we’re watching it closely, we really haven’t seen any adverse movement within the portfolio to speak of. And again, given the location of our projects which are in suburban markets, given the diversity of the distribution across geographies and the location primarily in the Sunbelt, we feel good about our multifamily portfolio.
Ebrahim Poonawala: Got it. And just a separate question in terms of the deposit beta outlook that you mentioned. How are you thinking about this in terms of the mix of customers? One, are you seeing consumer that’s being depleted because of usage and that’s driving deposit NIB or deposits low? Talk about that to some extent. Then, where do you see CDs shaking out in terms of impact from borrowers, from deposit customers and where CD mix could be 12 months from now if we don’t get any rate cuts? Thanks.
David Turner: Yeah, you were breaking up there a little bit, but I think you were saying, what are we seeing in terms of movement of NIB into CDs? So that’s been the big change thus far for us. I think our CDs are right at 10%, just under 10% of our book, of our total deposit book. That could grow. We do have money market offers that we’re working on. We want to be competitive. This remix has been really relegated to high net worth customers that are taking excess cash and putting it to work. And the reason we think that that remix is somewhere in the three to five to go is because that customer base gets down to having the amount of cash in their account relative to the spin pattern that they had pre-pandemic. And so I think that happens by the end of next year – I mean, the middle of next year.
As we think about where CD balances could be as a percentage of total deposits, maybe you pick up another 2% or 3% through that remix. And it really is dependent on how we think about other offers, money market, and we’re working on that. So there could be some mix in terms of how that 3% to 5% gets put to work, but specific to CDs, 2% to 3%.
Ebrahim Poonawala: Got it. Thank you.
Operator: Our next question comes from the line of Ken Usdin with Jefferies. Please proceed with your question.
John Turner: Hi Ken.
Ken Usdin: Hey, David. Hey, John. Just a quick question on the B side. Clear guidance for the fourth quarter. Just those service charges continue to come in much better, $590 million for the year. Obviously, an implied lower exit for the fourth quarter. Any line of sight in terms of like, are we getting close to the leveling out period here on that service charges line in terms of, I know cash management has been outgrowing the other pieces, but is this kind of the right level of use going forward?
