John Ciulla: Yeah, that’s exactly right. Because I think we clearly have in our plan and expectations, if there are no other productive uses of organic capital, that we will look at dividend and repurchases in the latter half of the year, maybe the second, third, and fourth quarter over time. We generally repurchase shares to offset grants to employees as well. We’ll continue to do that. So it’s still part of our game plan. We’re just being, I think, a little bit cautious and prudent as we look at our capital levels through the Ametros closing. We also potentially have opportunities in balance sheet and securities repositioning that could go into that bucket of decisions as well. But we anticipate returning capital to shareholders over the second half of the year.
Chris McGratty: Great. And then maybe one on the NII guide, I think you’ve got an outlook that looks more similar to ours, which has a little bit fewer cuts in the futures market. If we were to get the six cuts — five, six cuts by 2024, how would your NII outlook change from what you provided?
Glenn MacInnes: So I think if we got six cuts and we have four cuts in there now, it would probably — it’s not really that significant to us. We do have some hedges that would kick in, but I think it’s probably in the range just to give you a ballpark of $15 million to $20 million downside. So it’s not that significant.
Chris McGratty: Okay. And that $15 million to $20 million is for 2024, given the cadence…
Glenn MacInnes: Yeah, in 2024. So if you took our guidance at the low end and high end, and you said we got six cuts, it would probably be in the range of — you take out $15 million to $20 million on that.
Chris McGratty: All right. Thank you.
Glenn MacInnes: Sure.
John Ciulla: Thanks, Chris.
Operator: Your next question comes from the line of Casey Haire from Jefferies. Please go ahead, your line is open.
Casey Haire: Yeah, great. Thanks. Good morning, everyone.
John Ciulla: Good morning, Casey.
Casey Haire: Good morning. So, Glenn, just following up on another one on the NII guide. So looking at Slide 11, giving us the cum beta in the first quarter to 41%, I was wondering if you could give us the progression throughout the year. Where does that cum beta peak in the tightening cycle? And then how does it progress after you get these four cuts beginning in May?
Glenn MacInnes: Yeah. So I think it’ll be — Casey, I think it’ll stay around that 41% plus or minus. I think the dynamic there is going to be our deposit repricing. And so if you look at our book of $60 billion, about 20%, or, say, $12 million of that book is what I would characterize as high beta, no lag type of deposits. And so those — as the Fed — and think of Ametros, a perfect example, almost $6 billion…
John Ciulla: interLINK.
Glenn MacInnes: I’m sorry, interLINK. I’m getting ahead of it, interLINK, say $6 billion, right? And so that would reprice one on one with Fed funds and it would be immediate. So that’s an example of a high beta, no lag type of deposit. So I look at our deposit book, it’s about 20%. So it’s, say, $12 billion or $13 billion of our $60 billion. So that’ll be a benefit for us, right? So I think it’ll probably end up around in that 41% plus or minus somewhere around there. The other factor you have is that our down deposit beta is probably going to run on a full-year basis in the mid-20s, right? So that’ll help offset some of it as well.
Casey Haire: Got you. Thank you.
Glenn MacInnes: And Ametros — and just because I did bring up Ametros, that’ll lower our beta because obviously we’re bringing in $800 million at a few basis points, and that’s expected to grow by 25% a year.
Casey Haire: Got you. Okay. And then just following up on — so the fee and expense guide implies a decent ramp from the current run rate. I know, obviously, Ametros is on the come here. Just wondering, can you break out what is organic or what is legacy Webster? And then what does Ametros add? Just so we can get a better feel for ramps.
Glenn MacInnes: Yeah. Let me take a run at and then John can add some color. So core expenses were $1.2 billion, say, in 2023. And as you saw the guidance is $1.3 billion to $1.325 billion in ’24. So, round numbers, that represents growth of like $100 million to $125 million. And if you peel that back, I would say approximately $50 million is tied to Ametros. So that includes operating costs associated with 150 employees, the technology platform, along with the intangible amortization. And about half the remaining, so that’s $50 million, and about half the remaining is tied to performance-based comp, right? So $20 million, say is tied to performance-based comp. And then another $40 million tied to investments in revenue-generating type of business lines. So you got $40 million from performance based comp, another — or $20 million from performance-based comp, $40 million from investments into business, and the $50 on Ametros in very broad numbers.
John Ciulla: And then the fees, he asked.
Glenn MacInnes: And then fees. Okay, so, on NII, so non-interest — yeah, non-interest income. Sorry. So core net interest income $348 million for 2023, we’re projecting $375 million to $400 million. So you got $25 million to $50 million in year-over-year growth, and about $25 million of that’s tied to Ametros, right, which is a mix of account administration fees, pharmacy and other transactional sort of rebate type of fees. The remaining growth is sort of, of course, a number of categories like HSA interchange, up $4 million to $5 million, commercial lending fees, which include swaps, syndication, and transactional type of fees, $3 million to $5 million, trust and investment fees, and some smaller cash management fees. So that gives you the sort of geography of it.
