Dana Nolan: Buyback pace.
David Turner: The buyback pace. So, again, we used the buyback as our last mechanism to help us keep our common equity Tier 1 in that 10% range. And so the pace is your favorite earnings expectation, take out the dividend, use a bit of that with low-single digit loan growth. And then the rest is either going to be buying mortgage servicing rights or things of that nature and then we toggle with share repurchases. So, I don’t want to comment on whether we stay on the pace because they end up getting your earnings guidance. That’s a trick.
Dave Rochester: Understood. Alright. Thanks guys.
John Turner: Thank you.
Operator: Our next question comes from the line of Gerard Cassidy with RBC. Please proceed with your question.
John Turner: Good morning Gerard.
David Turner: Hi Gerard.
Gerard Cassidy: Hi John. Hi David. David, can you share with us you guys have given us good detail on credit quality and John, you pointed out that the non-performing loan increase was to the sectors of your portfolio that you have already identified as being weak. Could we look at it another way, and you give us good details on Slides 27 and 28 on the leveraged portfolio in the Shared National Credit portfolio, how are those portfolios holding up credit-wise? And when you think back to where we were a year ago, I remember many of the calls, the word recession was used quite often in those calls. We are not hearing that on this fourth quarter earnings call for most or nearly all the banks. So, have these portfolios held up better than what you would have thought it from a year ago?
John Turner: I would say, yes, Gerard. The leverage portfolio is largely relationship-based credit business. Those are banking relationships that we enjoy, we are close to those customers and we have been close to them throughout this period of elevated rates. There was some risk as rates rose, that we had – that there may be some softness in the portfolio, but I think it’s performed well. The same is true of our Shared National Credit book. And we began to build the capital markets business to help us grow and diversify our revenue and to meet more customer needs. We naturally then began to expand the size of our Shared National Credit book so that we could serve those customers that had need for those products and services.
And with that, as you can imagine, comes some tall free risk, single name risk and while I mentioned earlier, we have a technology credit that’s fairly substantial. That’s an NPL. That is an example of Shared National Credit exposure that we have good visibility into. We think has very limited risk of loss, but still as a non-performing loan. But overall, I would say, just based upon the reflection on the performance of that book, it’s been good. We have enjoyed expanding relationships, growing revenue from capital markets and/or deposits, treasury management that we enjoy with those customers. And so I think we have been pleased with the performance of both the leverage book and the Shared National Credit book.
Gerard Cassidy: Very good. And then coming back to loans, and I think David, in your comments, you talked about loan demand remains soft and you are looking for low-single digit growth for average loans in 2024. I know during our careers, the shadow banking industry has continued its competition against the banks, but it seems today, there is more coverage of the private equity side getting into lending maybe greater than what we have seen in years, how are you guys competing against the private credit markets? And at the same time, are any of those private credit lenders, customers of yours that you have to balance that relationship of a customer competing against you.
John Turner: We have very modest exposure to private equity who then is – we are not lending private equity to, in turn, lend into our customer base. So, if we have any exposure, it would be very modest there. Separately, we don’t see private equity as a competitor necessarily within our core middle market customer base. I asked Ronnie Smith the question the other day if he could name a customer that we lost to private credit. And we can’t think of one. Now it doesn’t mean it’s not occurring in some of the markets that we are in. But by and large, given our focus on the core middle market business and investment-grade type Shared National Credit exposure, we are just not – we are not seeing private credit as a competitor today. On the wholesale side now there are lots of competitors on the consumer side that we are seeing in a variety of different ways, including mortgage and home improvement that we compete with.
Gerard Cassidy: Which are non-traditional depositories…?
John Turner: Yes. That’s right.
Gerard Cassidy: Okay. Great. Thank you, John.
Operator: Our next question comes from the line of Christopher Spahr with Wells Fargo. Please proceed with your question.
John Turner: Good morning.
Dana Nolan: Let’s go ahead, move to the next caller.
Operator: Our next question comes from the line of Brandon King with Truist. Please proceed with your question.
John Turner: Good morning.
