So we have a lot of cylinders that are working that I think can offset each other and would be a good reason that we would be confident in a pretty nice recovery on the investment banking side. It will be like everything else, a little bit quarter-to-quarter dependent, but hopefully a little less volatility for us given that we’ve got a lot of cylinders running.
Ken Usdin: Great. Thanks, Michael.
Mike Maguire: Yes.
Operator: And our next question today comes from Erika Najarian with UBS. Please go ahead.
Erika Najarian: Hi, good morning. The first question is for Bill. Bill, Mike is not saying anything too different about loan growth from the rest of your peers for 2024. That being said, I think obviously one of the genesis of the merger of equals is this combined franchise in this footprint that was better than everybody else’s? So I guess my question here is, you know, how much of your current adjusted capital, state right now is sort of impacting still how you’re thinking about growth and going to market? And you know, clearly there’s going to be a lot of questions on use of proceeds, you know, if you do sell the rest of Truist Insurance Holdings. But how much different is your approach going to be to market, if at all, if you do monetize TIAs?
Bill Rogers: Yes, let me answer the first part of that as well. So, you know, I think that’s a great question. And, you know, if you look at sort of the barometer, I was trying to say this earlier on sort of where we go, I think we will reflect our economy and our opportunities. So, and we’ll just have to see sort of how that gets unleashed going forward. And I think the correlation will probably be more directly seen in the C&I side, because we’re — as I mentioned before, not just a capital preservation, but or optimization, but really more around optimization around return and sort of looking at our core and non-core. So we’ve pulled the throttle back on some of the consumer side that we consider to be less capital efficient.
So that’s got a little bit of an overhang in terms of where we look at this. I think if we go into 2024 and trying to answer your question, I think the barometer for us ought to be on the parts of consumer where we’re investing and C&I overall. And as I said earlier, I think when we see the recovery, we’ll see it more disproportionately in our markets and we should reflect that. So I think that’s exactly right. But the net of your whole question, we’re not capital constrained in terms of the opportunity for growth in the business, in poor business, in the places where we’re investing.
Erika Najarian: Got it, And just a follow-up question for Mike. One of your peers had framed it this way, so I think the investors found it helpful. But you did mention earlier that you had caution on the betas to the downside, and your first cut is presumed to be May. Considering a lag could you give us a sense of what your range of assumptions is in terms of downside betas for the first 100 basis points of cuts that’s embedded in your guide?
Mike Maguire: Yes, Erika, you know, I’m not — it’s a great question, and one we’re spending a lot of time on. Look, I mean, I think initially out of the gates, and if these come, call it, you know, ‘25, you know, at a time and you think about the first 100s so the first four for us, I think the first-half of that, it’s going to be really pressured by guys still repricing up across the retail business and certain products and segments. So I guess my use of the word cautionary is thinking about kind of where we’re ending up right now on a cumulative beta perspective and just acknowledging that we’re going to be lower than that out of the gates for certain. But I don’t think, if you think about our NII outlook, I think you’ve got a pretty good sense for how we’re thinking about the reprice trend.
And we mentioned we think in the first quarter in sort of a static rate environment, we’re going to be down 3% to 4% on balances and day count and a touch worse on rate paid. And you know, from there, as we start to see the cuts, in our case, we think we flatten out and are pretty stable.
Erika Najarian: Got it. Thank you.
Operator: Thank you. And our next question comes from Ebrahim Poonawala with Bank of America. Please go ahead.
Ebrahim Poonawala: Hey, good morning. I guess, I just wanted to follow-up maybe Bill and Mike on the goodwill charge. I’m assuming it’s more than a mathematical exercise and it’s hard for me to imagine that higher rates are structurally bad for banking organizations with good deposit base, which is the case for Truist. So to some extent I guess the read-through is some of the deal synergies tied to the SunTrust BB&T merger no longer look as appealing as they did at the time of the deal announcement. One, is am I missing something there? And secondly, Bill, just so you’ve talked about a bunch of strategic actions, is it fair for us to expect that if we look a year from now, we will see very clearly some of the synergies, be it in terms of market share gains, efficiency tied to the deal where investors can start getting on board with the franchise?
Mike Maguire: Yeah, I’ll go on the first one. Ebrahim, thanks for the question. You know, you sort of said, hey, I assume it’s sort of not just math, or maybe you said it is mathematical, and that’s right. I mean, at the end of the day, we do an annual test for impairment. There are I mean thousands and thousands of factors that go into this work. There are customary evaluation approaches. You know, you evaluate each reporting unit. You know, if you think about it the factors that are significant that we cited in our prepared remarks is that you do have a very you know you’ve had degradation in operating conditions for the industry you had a significant decline in broadly speaking bank stock valuations, Truist market valuation at the time and we do this test as of a certain day each year.
In our case, it’s October 1. So all those factors are considered and influence the outcome. But at the end of the day, the estimated fair value is below the carrying value, and that’s the output. But again, just to reiterate this, absolutely zero impact to our financial condition or how we think about our opportunity or our strategy or what we’re doing.
