Mike Mayo: And then last short follow-up. I asked this with everybody, the NII guide is much lower for you and for others. Do you think you’ve captured it all here? I mean do you lead the year at that kind of fourth quarter level and that say? Or do you see more downside after that?
Mike Maguire: As far as the year is concerned, look, we’ve flipped to this higher for longer. The new guide reflects how betas are performing. So I think we feel like we’ve got it for the year. As far as trajectory and trough and ’24, it’s just — I think it really is going to be rate path and policy dependent, so long as we’re at these rates and for longer betas are going to keep creeping. Now the good news is we are seeing — and Bill mentioned there’s some improvement on things like credit spreads and repricing assets, et cetera. But I think so long as we stay at whatever 5.25%, 5.5% or there’s risk, if there’s a second hike for sure, Mike, to our outlook. But no, I think we’ve got Q3 and Q4 pretty well pegged.
Mike Mayo: All right. Thank you.
Operator: Our next question comes from John McDonald with Autonomous Research. Please go ahead.
John McDonald: Hi. Good morning. I wanted to ask a little bit about credit. Could you talk a little bit about the asset quality trends you saw this quarter? What drove the increase in nonperformers, particularly around C&I and CRE?
Bill Rogers: John, I’ll turn it over to Clarke, but just — there’s not a trend. So a lot of idiosyncratic things, but let me turn it over to Clarke to do a little more detail.
Clarke Starnes: Yes. Thanks, Bill, and thanks, John. So I would just say we had a number of moving pieces this quarter from a credit perspective and a lot of that was an intentionality around actively managing the portfolio. So the takeaways I would give you are. First, we had really solid consumer performance overall with lower NPLs and losses versus our forecast, so the consumer is holding up really well. So where we did see some of the impact, to your point, is in the C&I and CRE books. From a C&I standpoint, we did see some uptick in NPLs and losses, but what I’d tell you is it’s more episodic. There’s no particular trend or segment issue, as Bill said, and we’re coming off really low historical numbers, and so even where we are today would be lower than our long-term numbers.
But as far as the NPL increase, most of that was driven by an intentional focus on CRE office. So what we did is we did an intense loan-by-loan review of our — almost our entire book. So I would just give you some color on Q1 and our community bank, we looked at every — we looked at all office loans greater than $2 million and in Q2, we looked at everything over $25 million, so we’ve done a loan-by-loan review with the vast majority of all of our CRE office. That included updated risk assessments and view evaluation. So we work really, really hard to make sure we’re not kicking the can down the road and we understand where we are. So as a result of that, we put a few loans on nonaccrual. I would tell you that the predominance of those loans are actually current .
