John Ciulla: No. I think as we go into it, you may have seen, we repurchased $50 million or so of shares to offset grants to employees and colleagues throughout the organization. We certainly have the capability to do it in the second half. I think if we stick to our normal view that I think we’re good stewards of capital. So we look at internal opportunities to deploy capital first, we contemplate things like balance sheet restructuring. We look at tuck-in acquisitions for HSA and other things. But if that’s not there, and we continue to generate the kind of capital we are and it looks like the credit environment remains stable, you’d see us absolutely looking at share repurchases. But I think it’s a matter of time and our view of how stable the ultimate credit environment is as we move through the third and fourth quarter.
Operator: Your next question comes from Casey Haire with Jefferies.
Casey Haire: Glenn, question on the NIM forecast in the back half of the year. That lift of 10 to 15 bps is that immediate? It feels like it could be given the borrowing where the borrowings ended the quarter? It feels like it was back half weighted. Just some color there. And in the interest — the spot deposit costs and interest-bearing deposits?
Glenn MacInnes: So, Ciulla just let me hit that. So, yes you’re right. I mean, 12 basis points come back to us, and that’s the function of the balance sheet liquidity and thus bringing down balances held at the Fed, which were barging 3-plus billion into the second quarter. So if you go back 12 there. You got a 12 — the other 5 on loan impact. So you have about 2 basis points in NIM coming from the variable book and then another 3 basis points from the fixed book. So that’s 5, right? And then the investment portfolio, same sort of thing, pick up about 3 basis points there. And then, of course, further positive repricing. And the thing I pointed out there is it’s probably negative 6 to 7 basis points not as severe as it was first quarter, second quarter, obviously, because we’ve built up some of the key, the higher cost products like interLINK and brokerage CDs. But yes, you should begin to see that come back in beginning in the third quarter significantly.
On the second part of your question, I think our exit cost was on deposits, so that’s like 184.
Casey Haire: That’s total? Or is that interest-bearing?
Glenn MacInnes: That’s total.
Casey Haire: Okay. And then the beta assumption, 40% through first quarter ’24. So I guess, if the Fed is on hold and were higher for longer, is there — is that beta — can that 40% beta go higher? And then what is that — what is the beta forecast assumed for DDA mix at 19% of the total deposits?
Glenn MacInnes: Yes. So a couple of things in there. Our forecast is that the Fed increases next week and stays at 550 for the rest of the year. So that ties to that 40% that you’re seeing on the slide. So I think that’s the first part of your question. I think there is a lag. There has been a lag on Fed increases and how that’s trickled down to the deposit base and it’s been like a quarter or 2 for the most part. And that’s again, why you see some of that acceleration in the second quarter. I think the second part of your question was on DDA deposits as a percent — was it a percent of total? And for us, if you look at it, I think, at fourth quarter of 2022, we’re a combined organization 25%, right? One of the things that’s happened here is we’ve grown interLINK and broker, so that’s increased the total deposit base.
So if you look at that for a full year basis, you’re probably in the range of 18.5% to 19% by the fourth quarter. If you were to strip out things like interLINK and Broker, you’re probably close to 20%, 21%.
