There might be a little bit more in that in the second quarter, but we see a strong momentum as we look. Again, the fundamentals of business spend and things like that are continuing to be in case. So we feel good about high-single-digits. And then on the card side, really strong fee growth, good spreads, payment rates, and payment spend trends, constructive for how we’re thinking about it. So all that — we feel good about all the underlying trends from a payment standpoint.
Ken Usdin: Okay. Got it. And then just in terms of some of the other lines, you know, corporate services and mortgage did a lot better. I think you mentioned DCM and corporate and better gain on sale. Just wondering, are those, you know, both sustainable or was there any pull-forward on both of those areas this quarter?
Andrew Cecere: I think it is — I think the underlying strength maybe had a little bit of positivity here in the first quarter. But underlying all that, I think the gain on sale in the markets that we’re playing is legitimate even though the market has been slower from an application standpoint, a production standpoint, it’s still kind of double-digit, almost 20% down from year-over-year. So there’s just — there’s a lot of — the volumes are lower, but the spreads are wider and we anticipate that to continue going forward.
Ken Usdin: Okay. Great. And last clean-up one, just that ATM business, it didn’t look like service charges changed. Did that close that? I know it’s not a net profit. I know it’s neutral net profit, but can you just update us on that? Thanks.
Andrew Cecere: Yeah. It — there was some of that in this quarter. And so they’ll kind of fully run off here in the second quarter.
Ken Usdin: With an offset in cost?
Andrew Cecere: Yes.
Ken Usdin: Thank you.
Operator: Your next question comes from the line of Mike Mayo with Wells Fargo. Your line is open.
Andrew Cecere: Good morning, Mike.
Mike Mayo: Hi. Another one on net interest income. Andy, you used the word temporary in your opening remarks, talking about either the decline or the worst guide. And I didn’t know what you meant by temporary?
Andrew Cecere: So what we’re saying, Mike, is that this pressure that, as John described, we believe is going to dissipate and has dissipated is just dissipating slower than we thought. And we expect a relatively stable in the second quarter and then growth in the back half of ’24. So that’s what I meant by temporary.
Mike Mayo: [Technical Difficulty] And where the floor is for non-interest-bearing deposits or any other color?
Andrew Cecere: So I would expect that ’25 would continue the momentum that we see in the second half of ’24. We’re not going to give a ’25 guide right now because it’s so volatile in terms of what rates could be. But, you know, the — importantly, Mike, we see the second half of ’24, even in a lower rate cut environment and higher for longer to start to go up.
Mike Mayo: And I know I’ve asked this before, but it still applies, I think. So that the big picture here is you got $900 million of savings in the Union Bank acquisition. That’s good for the expenses. The revenues you highlight in your slide, business banking is up one-third over three years in terms of revenues and relationships. You have mortgage, you have capital markets, you have payments. The revenues are working. The expenses are working. And then we look at the efficiency ratio for this quarter, and the core number is like around 62% for a company that for so long had an efficiency ratio under 60%. Now, I know you’re investing a lot nationally. We heard that at the BAFT conference. But it’s just like, when do you get under 60%? And I get the NII effect that distorts things. But you do have some peers that are under 60% now. So how should we think about efficiency at Bancorp?
Andrew Cecere: Yeah, Mike, that’s why we’re pulling these expense levers and looking to continue to create efficiency. So I feel very positive about our fee categories. We have a diversified set of businesses, a lot of businesses that other banks don’t have like payments and commercial products, fund services, corporate trust that helps us drive fee revenue. That’s the strength that we talked about that 7.7%. There are some headwinds on margin for the industry and for ourselves. We’ll get past those headwinds and we’ll continue to operate efficiently and look for expense levers to get that efficiency ratio downward, and that’s an objective of ours.
Mike Mayo: All right. Thank you.
Andrew Cecere: You bet.
Operator: Your next question comes from the line of John Pancari with Evercore. Your line is open.
Andrew Cecere: Good morning, John.
John Pancari: Good morning. Good morning. On the deposit growth in the quarter, the surge in growth you saw at the end of period. Can you maybe size up the impact that was more seasonal and more tied to the holiday dynamic and how much that could pull back? And then separately, also on the — on your NII commentary, you did mention the competitive landscape shifting. Is that just regarding the deposit mix and pricing? Or are you also seeing some competitive dynamic impacting you on the loan front? Thanks.
