Bill Rogers: And it’s just done by segment too, Mike.
Mike Maguire: Yes, that’s right. You look at the various reporting segments, the reporting units for us, which are the consumer and wealth business, at least in ‘23, corporate and commercial, and then insurance.
Bill Rogers: And then on your second question, hopefully, what I was indicating is that process has started. So if you look at the net new account gains we’re seeing, the growth in primacy accounts, the growth in market share and investment banking. So those things are actually underway and happening. I think they’ll continue to accelerate, they’ll continue to build, they’ll continue to manifest, as you said, both on the revenue and both on the efficiency side. I think you actually pointed out, you know, you’ll see both sides of that.
Ebrahim Poonawala: Got it. Thanks for that. And just one quick follow-up. When we look at the commercial real estate multifamily book, there are a bunch of like Southeast markets that are probably seeing a fair amount of supply coming through. Any concerns, I mean, what are you seeing in the multifamily CRE today, and any markets where you are particularly focused on in terms of oversupply over the next year or two?
Bill Rogers: Yes, I’ll give Clarke to comment as well. But yes, there are, you know, part of the great part of our markets is we have a lot of in-migration. So we’ve had a lot of building in anticipation of that. So if you think about some of our larger markets, Austin, Orlando, I mean, some of the suspects where you’ve seen a little bit of that. I’ll get Clarke to comment on the quality of the portfolio. So that you know the multifamily, large developers that were in and long-term the migration positive continues. So I was looking at some data interesting enough just to make a comment broadly on that. Within our markets last year, we added a metropolitan Charlotte. So just think about that in context. So we added about 2.2 net in-migration into our market. So the overall demographics are good, but I think in fairness to your question, we probably have a little bit of a shorter term watch item versus worry item. Maybe Clarke, you can…
Clarke Starnes: I agree with you, Bill. Overall, we still think multifamily long-term is a very favorite asset class and some of the current challenges from our perspective relate more to a margin or current debt service coverage risk issue, given rate increases, higher operating cost, and to your point the new pipeline supply that’s coming on. And we just view that very differently than the structural risk we see in office as an example. So we’re working with our borrowers to address their specific situations as we look out and how they’re going to address this impact. Again, so what we would expect more temporary increase in watch lists, some non-accruals, but nowhere near the same loss risk exposure you see in office. And I would remind you that there’s very active secondary placement sources, a lot of equity sources willing to come in.
And the clients that we have, to Bills point, they want these assets and they’re supporting those. So we think it’s a manageable risk, even though there’s some short-term pressure.
Ebrahim Poonawala: Thank you so much.
Operator: Thank you. And our next question today comes from Matt O’Connor with Deutsche Bank. Please go ahead.
Matt O’Connor: Hi, good morning. Sorry I missed it, but have you guys talked about what your targeted capital level is? You know, obviously you said going from here with no buybacks in the near-term and again, with the impact on the RWAs from the Basel III and getting proposals, but how are you thinking about targeted capital levels over the medium and long-term? Thanks.
Bill Rogers: Yes, Matt, for right now, we’re at 10.1 in building. And so I think until we get more information, until we sort of understand the dynamics a little bit more and think about our company construct, I think the best thing for us right now is to be in an organic capital building mode. So we haven’t set a specific target, but I think 10 plus for the short-term, the medium term seems a good place for us to be landing right now.
Matt O’Connor: Okay. And as you think about kind of the 10 plus medium term, is that including AOCI? Because obviously you’re already 10 plus now and you’re going to create capital fairly quickly this year with things given earnings and not much balance in growth?
Mike Maguire: Yes, no, Matt, I think we’re just, you know, in the moment we’re in, you know, we’re looking at spot capital, we’re thinking about transitioned, you know, capital measurements if we phase into new rules and we’re looking at fully phased in. I think the whole industry is thinking about it that way. So I think when Bill thinks about 10, I mean I think about it on a transitional basis, staying at or above 10 is probably what Bill is implying. But I think shorter term is like we’re building capital, we’re going to continue to do that through organic earnings and hopefully we’ll have a little more visibility on this rule and can give you a little better sense for kind of a medium term target.
Matt O’Connor: Okay, thank you.
Operator: Thank you. And our next question comes from Gerard Cassidy with RBC Capital Markets. Please go ahead.
Gerard Cassidy: Good morning, Bill. Good morning, Mike. Bill, when we go back to the original merger, I think if I recall correctly, there was a targeted 20% return on tangible common equity and you’ve just discussed about the capital levels, you know, Basel III being higher than what I presumed to be lower numbers back and when the deal was announced? Can you share with us, are you still thinking 20% return on tangible common equity is a reasonable goal or you can attain it even with these higher capital levels that you and the industry has to carry?
Bill Rogers: Yeah, I mean, I think, Gerard, if we go back to 2019, that was a different world and a different environment, both in terms of, you know, where we were from a rate standpoint and where we were from a capital standpoint, regulatory standpoint. Now we’ve got Basel III in front of us. So I think in fairness 20, certainly short and medium term is not necessarily in the windshield. But I think we can continue to perform at a high level in terms of ROTCE. And so all the efficiency opportunities and things we’re building, revenue growing, those are things that are continuing to build on that. So I think to think about us being a top performer in that category versus setting a specific target that was constructed in 2019 in a different environment is maybe a different way to think about it.
