We’ve expanded our sponsorship of third-party ISOs. And so all of those banking as a service programs will contribute growth year-over-year. Treasury and payment solutions, if you look at the last three years, we’ve grown at 20%. We expect that to continue to increase in 2024 with some repricing opportunities as well as continued expansion of our sales practices. Wealth was up 11% this past year. We expect — with AUM growing 8%, we expect that to continue to grow based on the talent and the success of our business model. Capital markets, as we’ve expanded CIB and our wholesale bank, we’ve continued to grow, that’s up 20% in ’23 and that will continue to grow in ’24. And then, we’ve seen some traction on some of the government-guaranteed gains, whether that’s USDA or SBA loans.
And so when you look at all of those, it will help to offset those headwinds, and we think we’ll get a little bit of growth in NIR this coming year as a result of that.
Michael Rose: That’s great color. And maybe just as my follow-up, I appreciate all the color related to Jon’s questions. But just wanted to dig into some of the mix shift comments that you mentioned, Jamie. And then, how quickly do you guys think you would be able to kind of pull down some of the interest-bearing-deposit costs, assuming we do get a couple rate cuts this year? I think that’s a pretty big outstanding question for you and a lot of banks. Thanks.
Jamie Gregory: Yeah. It’s one of the bigger questions for the industry for 2024, for sure. When you — well, first, in our assumptions, we assume that NIB declines further in 2024 to somewhere between 23% and 24% of total deposits. But to your question on interest-bearing cost, we really break it up into four buckets and so — or three buckets excluding NIB. We have what we call the kind of high beta systematic repricing, which would include broker deposits in our core CD portfolio. Those reductions, the broker deposits are near 100 beta, and time deposits reprice pretty systematically given maturities schedule. So that’s pretty simple. But then you have the interest-bearing non-maturity deposits, and what we have is for us, about 30% of total deposits are standard rates and those reprice through decisions we make centrally.
And the rates on those deposits are lower within our interest-bearing deposits. And so the beta will be a little lower. But the repricing is simpler than the exception price deposits. Exception around 20% total, those are higher cost, and so we do expect the beta to be lower, but they involve a conversation. And so we’re already focused on strategies of how do we address that subcomponent of deposit portfolio. But, we’re ready to go and we’re prepared for the easing cycle.
Michael Rose: Appreciate all the color, guys. Thanks for taking my questions.
Operator: Our next question comes from Steven Alexopoulos from JP Morgan. Your line is now open. Please go ahead.
Steven Alexopoulos: Hey, good morning, everyone.
Kevin Blair: Good morning.
Jamie Gregory: Good morning.
Steven Alexopoulos: Sorry to ask your third NIM question in a row, but I think clarity would be important here. And I know, Jamie, there’s scenarios that are changing every day. But if you just look at the current forward curve, say six cuts, you guys are guiding under flat rates to get to a 3.20% NIM in 4Q ’24. How does that change if the forward curve plays out?
Jamie Gregory: I think you need to look to the prior comment around 2% to 4% compression of the margin during the cycle, depending on how fast it’s going. But if you assume a steady 25 cuts per meeting, I would just assume that the margin contracts somewhere between 2% and 4% in the fourth quarter.
Steven Alexopoulos: 2% to 4%, yeah, got it. And your commentary is interesting about eventually returning to where the NIM used to be and your NIM used to be 3.60% to 3.80%. Do you think with a normally slope yield curve, I know it’s been 20 years since we’ve had one at normal rates, you could get back into that range?
Jamie Gregory: So when we look further out, we didn’t include it in this deck, but we’ve included it in our two prior investor decks, the fixed-rate asset repricing. The benefit due to fixed rate asset repricing in 2024 is approximately 20 basis points. And you could run that forward for 2025, 2026. It doesn’t go forever, but it does go for the next few years. And so we think that, that is a really strong tailwind. Now there are headwinds that are not included in that, and one would be deposit mix, another would be business mix as far as loan spreads and where you’re originating loans. But that tailwind is there. And so we do believe that when we get through whatever this easing cycle is, however it plays out, that we continue to have a strong tailwind to the margin for multiple years and we expect to see that play out. And that would get us in the context of what you’re describing with higher, what’s kind of historically more normalized margins.
