Andy Cecere: So Mike, the way I think about it, this is Andy, by the end of the fourth quarter, we will be on a run rate recognizing $900 million of savings, which will be fully reflected in 2024 in our expense base. And that is consistent with how we think about a relatively flat 23% to 24% expense base, including those savings plus investments we’ll continue to make in the business.
Mike Mayo: And then the big question then is, so if you have flat 2024 expenses, do you think you can get to positive operating leverage? Or is it too early or too many moving parts? Because this is the sweet spot of the merger savings coming up, right, by the next quarter.
Andy Cecere: It is a sweet spot, Mike, you’re absolutely right. And the savings are great. The opportunities to deepen relationships on the Union Bank customer base, I mentioned that in my comments, I think that is terrific. Our fee businesses are doing extremely well. On a year-over-year basis, it was up 12% across almost every category. And frankly, very little of that was related to Union Bank. That was just core improvement across a number of categories, capital markets, our corporate and trust, our fee businesses, our payments businesses. The challenge for us and for the entire industry is net interest income and margin. And in this environment, that’s the one that I — there’s a lot of moving pieces, as you say. Loan growth is relatively tepid as we speak for us and for the industry overall. So it will be dependent upon that in terms of positive operating leverage, and I would say it’s too early to call.
Mike Mayo: Okay. And last follow-up, your increase in CET1 ratio due to a lot of balance sheet optimization did come at a cost of less assets, less loan growth, less earnings, right? There’s a trade-off in that. So now that you’re under kind of less pressure and have so much more flexibility, do you think you can be a little bit more lax in terms of your growth and in turn, that may help NII? Or is that too much of a stretch?
John Stern: Yes. We have flexibility now in terms of the transactions that we do to optimize. And we still have plans to do those sorts of things. We’ve identified some things that are going to be relatively neutral and a little bit on the low end of earnings impact. And of course, you saw some of those transactions in the second quarter flow through in terms of provision and things like that. And that did lower our earning assets, as you mentioned, about $8 billion or thereabouts this quarter.
Operator: And next, we’ll go to John Pancari with Evercore. Please go ahead.
John Pancari: I know despite the regulatory change around the Cat II requirement, you maintain the 20 to 25 bps generation in CET1 quarterly. Why no change there? Can you just talk to us maybe about the give and takes in that expectation as the need to meet the Category II shifted to Category III, why no change there?
John Stern: Well, I think there’s no change because we feel like given the new rule set and things like that, over time, we’ll have to transition into the new regime, which will include AOCI and so all the other rules. And so, we’re going to be in a mode to continue to accrete that capital and 20 to 25 basis points is our earnings stream that we will accrete. And like this quarter, for example, it was 20 basis points, but we anticipate going to 25 on the higher end of that range as we get through the merger-related costs and we have the Union synergies.
John Pancari: Okay. So the less BSO activities didn’t materially benefit that expectation?
John Stern: I’m sorry. Can you say that? I couldn’t hear you.
John Pancari: The less risk-weighted asset optimization that would be needed now under the — need to meet Category III did not materially impact the 20 to 25 basis points of earnings generation expected?
