Mike Maguire: Yes. Well, Ebrahim, what I was talking about was sort of a continuing ops guide, so ex the incremental cash. So we feel like there’d be downside, right? So our 4% to 5% contemplates three cuts baseline, but fewer cuts as well to the low side. I think if you added the cash, you’re right, that would add asset sensitivity and that would just sort of transform our NII trajectory broadly. Obviously, when that asset sensitivity comes onto the balance sheet, we’ll manage that consistent with how we’ve managed rate risk in the past, which is we will probably add some receivers to manage against lower rates longer. I think I answered your question, which is the guide is continuing ops ex-cash. We think the 4% to 5% has that in the cash and any repositioning benefit would be on top of that.
Ebrahim Poonawala: That’s good. Thank you so much.
Operator: Our next question comes from Matt O’Connor from Deutsche Bank. Please go ahead with your question.
Matt O’Connor: Good morning. What do you think is a good capital level to be running at kind of looking out medium-term, including AOCI?
Mike Maguire: Hey, Matt, it’s Mike. I’ll take a swing at that one. This is — it’s one that tough to get on the record on as you know, I think others are probably in the same boat. I think the good news for Truist is we find ourselves at least once we get our TIH transaction completed in a really strong I think on a relative and absolute basis capital position. You know, with the rules still in a proposal stage, I think it’s really hard for us to determine exactly what a target might be. I think we do find ourselves in a position right now of some amount of excess capital. It’s impossible to understand exactly what that level would be. But the good news again is, we do have the confidence in our current level such that we can shift from sort of a phase where we’ve been conserving capital to a phase where we’re deploying capital and optimizing that capital and putting it to work and whether that’s in the core balance sheet, which would be our first priority is to grow client relationships and balances and make money the old-fashioned way.
You know, we obviously been clear that we think there’s — we have the capacity to evaluate a repositioning of the balance sheet. And of course, Bill has been pretty direct about our ambitions around buying back stock. So don’t have a target for you, but our sort of tone and mindset and planning is oriented around growth.
Matt O’Connor: Okay. And then just — I didn’t see any disclosures, but remind me what the adjusted CET1 is right now? And again, obviously, you’re picking up a lot in the deal, but what’s the starting point right now?
Bill Rogers: We’re at 10.1% as of the end of the quarter, which is flat to last quarter. You know, we’ve — obviously the CECL phase-in impacted the linked quarter advancement. And if you fully phased-in the proposed rules, our AOCI would I think worsen that by a little over 3%, the thresholds a little less than 1%, and then RWA inflation maybe a couple, call it, 20 basis points, 30 basis points. So I think we’re around 5.9%, maybe 6% on a fully phased-in basis today.
Matt O’Connor: Okay. And then obviously, off that 6%, we would add the 2.5% or 2.6% you said, so…
Bill Rogers: That’s right.
Mike Maguire: Yes.
Matt O’Connor: Yes. Okay. All right. Thank you.
Operator: Our next question comes from Gerard Cassidy from RBC Capital Markets. Please go ahead with your question.
Gerard Cassidy: Good morning, Bill. Good morning, Mike.
Bill Rogers: Good morning.
Gerard Cassidy: Mike, to follow-up on the bond potential restructuring. A technical question, are you guys permitted? I know you can restructure the AFS available-for-sale portfolio. But can you touch the held-to-maturity portfolio as well? And then second, if this Basel III, as we know appears to be delayed because of a big change coming, if Basel III doesn’t get solidified and finalized until first or second quarter of next year, how does that impact your guys’ decision-making on when to possibly do this restructuring?
Bill Rogers: Sure, Gerard. The first question, no, the HTM portfolio wouldn’t be eligible for repositioning. We wouldn’t be in a position to sell those securities or the consequences that we would have to mark the rest of the HTM securities. In terms of Basel, obviously, we’ve been engaged in the advocacy there as well. We’ve been monitoring the evolution of the rule. It does seem at this point that a final rule certainly is delayed versus our — what we probably would have expected a year-ago or even six months ago. But I don’t think we have an expectation that the substance of the rule that’s going to be most relevant to Truist is likely to change, which is the inclusion of — or the deduction of AOCI from regulatory capital.
So I think we feel good about our path forward. And look, I mean, I think we were pretty clear in February again around our objectives with a potential repositioning. And just to sort of state it again, I mean, one, whatever we do, we want to make sure that we still have ample capacity to grow the business and execute on the buyback that Bill has mentioned. But it’s really important to us to at least replace the TIH earnings in whatever we would — whatever we would contemplate.
Gerard Cassidy: Very good. And then possibly a follow-up on the commercial real-estate detail you gave us in the appendix. It looked like the non-performing loan percentage declined a bit from the fourth quarter, charge-offs, however, obviously went up, your reserves also went up relative to total loans. Any color that you guys can provide us on what’s happening to the mix of the commercial real estate? You know, obviously, your office is the one that we’re all focused on, but any other areas that you guys have some color would be great? Thank you.
