Terry Dolan: Yes, absolutely. Gets us to the run rate, John of the full 900 by the end of the quarter. So, when we get into 2024, we will have achieved a full run rate of $900 million of cost synergies,
John McDonald: And you will have achieved most of those by the fourth quarter of this year,
Terry Dolan: By the end of the fourth quarter. Yep.
John McDonald: Okay. And that’s built into the guidance for the full year this year?
Terry Dolan: Yes.
John McDonald: Okay. Thank you.
Operator: And we can go to Chris Kotowski with Oppenheimer. Please go ahead.
Chris Kotowski: Yes. I think last quarter you shared that the average duration of your securities portfolio went down from like 4.3 to 3.8 years or something like that. And I wonder if you could give us the similar trend in the second quarter and the outlook for the balance of the year and just your philosophy in general about reinvesting maturities. Is that kind of going into cash or are you kind of maintaining the duration that you have?
Terry Dolan: Yes. The duration that we had talked about with respect to the AFS portfolio was 3.8 years and has continued to come down a little bit, not measurably, but down a little bit from there. Our game plan, I guess, is that we’re going to continue to work on shortening the duration of the AFS portfolio. Again, it kind of helps us de-risk that, meaning we’ll keep more in short term sort of securities, whether it’s that or cash, but it’ll be kind of a combination.
Chris Kotowski: And on the HTM portfolio, is there a similar kind of move to shorten duration, or are you comfortable where it is?
Terry Dolan: Yes. Well, with respect to the HTM portfolio, that’s just kind of going to run down over time or burn down over time. We’re not adding to the HTM portfolio at this particular point.
Chris Kotowski: Okay. All right, great. Thank you.
Operator: And we’ll move to Vivek Juneja with JPMorgan. Please go ahead.
Vivek Juneja: Sorry, it’s sort of repetitive given the multiple calls. So, I guess a couple of things. On merchant processing, any color on why up only 2% year-on-year in terms of fees? I hear you on the travel flowing, but that’s – there’s also a lower fee. What’s caused such a sharp slowdown and what turns that around to the mid-single digits, Terry?
Terry Dolan: Yes, some of it is year-over-year comp and how it’ll kind of play out. But the biggest driver, Vivek, in the merchant processing at this particular point is the fact that the travel, airline specifically, is continuing to become a higher portion of the overall mix that we think is starting to stabilize. In other words, most of the – much of that growth has been in the airline space, but we think that that kind of stabilizes. Airline happens to have a lower margin. And so, that’s the dynamic that you’re seeing.
Vivek Juneja: Got it. Okay. And OCI, your loss seems to have gone up. Did you not get any benefits from the hedges you have put on, or is there something else going on underneath?
Terry Dolan: Yes. Go ahead, John.
John Stern: I think the investment portfolio is, AOCI went – declined or the mark declined by about $250 million linked-quarter, but rates went up 50 to 60 basis points upon the points of the curve that that matter to the portfolio. So, it’s not totally flat – as we talked about, there’s a duration to that book. And so, you would expect a wider mark given the higher level of rates. So, I think with the hedges that we have put in place, that helped mute that. It could have been higher. And we continue to add hedges across that portfolio and picker spots when we see rates fall.
Vivek Juneja: Thank you.
Operator: And we’ll go to Gerard Cassidy with RBC. Please go ahead.
