John Stern: Sure. This is John again. So, a couple of things I would say maybe just to provide additional context. As you saw in our results, we saw a big increase in our deposits, up 3% on a period ending basis to $522 billion. And then we had with – as Terry mentioned about our capital actions, we had loans drop as a start point of about 2% given the auto and the mortgage sale that we talked about within our comments. And so, as I think about those things, we will have the ability to be a little bit more disciplined and moderate in our deposit pricing as we go forward, given that line of thinking. And in addition, I think that as we bring on new loans, those loans are coming in at wider spreads, although loan growth is a little bit stalled as there’s a little bit less demand for that in the near term here.
And the mix here of loans should be more favorable as we’re bringing on cards and less in mortgage and auto. So, those are kind of the puts and takes to how we came up with the net interest income guidance. And then I think you made a comment about deposits there as well, and I can just touch on that. I think on deposit side, we would – even though we had a large seasonal uplift, as typical in the second quarter from our corporate trust and commercial businesses that bring in deposit balances, as that begins to normalize, we think we’re probably in line with the industry, which we anticipate being more of a decline given the quantitative tightening and all the other sorts of things that are headwinds for deposits in the industry.
Terry Dolan: Yes. And the other thing I would just mention, John, you asked a question regarding our expectation now just kind of looking at the market implied rate environment, is that NIM is probably down a few basis points in the third quarter and then relatively stable through the rest of the year.
John Pancari: Got it. No, thank you. That’s very helpful. And just lastly, the confidence in your through-cycle deposit beta of about 40%, looks like we have a number of banks that are turning to the high 40s and into the 50s. just what gives you the confidence in that through-cycle beta expectation of around 40?
Terry Dolan: Yes. So, we’re looking at – we’re coming – our calculations shows at about 39% in the current beta. And we’re indicating mid-40s is where we’ll land. And I think it just goes back to some of the things that we talked about earlier where we did have a big flight in of deposits. We think – well, we have loans that have come down given the capital actions. And so, that gives us a little bit more flexibility with pricing. But of course, there’ll be pressure as it relates to deposit betas just as we go through it, but all that is kind of baked into our mid-40s guide.
John Pancari: Okay, great. Thank you.
Operator: Next, we go to Ebrahim Poonawala with Bank of America. Please go ahead.
Terry Dolan: Morning, Ebrahim. How are you?
Ebrahim Poonawala: Good. How are you? Good morning. I just wanted to follow up on this capital build. It’s obviously a big topic. As we think about future RWA optimization, remind – I think you mentioned some of the low hanging fruit, I guess, things that were EPS neutral. It seems like you executed on those this quarter. As we look forward to, I think you mentioned some action in the back half, some into 2024, how punitive are those going to be from an EPS standpoint that we should think about? I’m assuming that’s in your guidance for ‘23, but give us a sense of just the EPS hit from these actions and how much more of RWA optimization that should we think about between now and let’s say year-end ‘24?
