Mike Santomassimo: It’s Mike. I’ll take a shot at that Erika. And when you look at the – when you look at our full year numbers, we – I tried to highlight in my comments that we do expect that our repurchases will be higher than what we did in 2023, the exact timing and pace, I’m not going to get into, but and then we’ll look at all of as we do every quarter, we look at all of the different risks that could be out there including, thinking about where CCAR or the stress tests will come out. And from a Basel III perspective, we are in really good shape as we said last quarter. We’re already above where we need to be from a, if it was fully implemented as is, and we’re hopeful that that won’t be the case. And so, and we’re going to generate more capital as we go through the year.
And so we’ve got as I said, we’ve got plenty of excess capital. We plan to buy back more stock than we did in 2023 and we’ll leave the exact timing and pace to future calls.
Erika Najarian: Thank you. And Mike, my follow-up question is another one on NII, I did notice that your short-term borrowings went up a lot in 2023. And just looking at the asset side, it seemed like it was funding that increase in liquidity to $204 billion [ph] cash in cash at the Fed at period end. And I’m wondering, as we’re thinking about your liability mix in 2024, and then I think your average balance sheet size was 1.91 trillion at the end of the year. I’m just wondering if we should expect the balance sheet to shrink because you don’t, you may not need all those short-term borrowings, or is there a reason why you feel like you want to hold that much liquidity at the Fed at this time?
Mike Santomassimo: Well, it is certainly possible, the balance sheet will get smaller throughout the year. I think that’ll just be a function of what we ultimately see on loan growth. How much we end up deploying into securities as we go through the year and where it makes sense. We will let the balance sheet just ebb and flow back down. And I think that’s the way we’re sort of thinking about it now. And I think at this point, there’s not a lot of cost to leaving at the Fed given where the – where IORB is. And so that’ll change as rates start to come down and we’ll calibrate the overall size based on what we think the opportunity is.
Erika Najarian: Thank you.
Operator: The next question will come from John Pancari of Evercore ISI. Your line is open, sir.
John Pancari: Good morning. On the NII outlook of down 7% to 9%, can you maybe help us think about the expected net interest margin trajectory through the year? How we should think about that in the context of what you’re expecting in terms of earning asset yields and dynamic on funding costs? Thanks.
Mike Santomassimo: Well, we don’t – we’re not going to try to predict exactly where the NIM is going to go quarter by quarter. But I think as you would guess, right, assuming the balance sheets that are a relatively stable size as NII starts to come down, the NIM will compress, right? And there’ll be tailwinds and headwinds related, as the assets as the securities portfolio reprices, that’ll be a tailwind. As you start to see variable rate loans come down, as rates come down, that’ll be a headwind. And so, I think most of it should be relatively simple to kind of estimate as you sort of plug the assumptions into your model, but there’s no sort of magic to it. But you would expect NIM to continue to come down as the balance sheet stays stable and NII comes down.
John Pancari: Okay. All right, thanks. And then separately on commercial real estate, and can you maybe give us a little more color in terms of where you saw the stress, what types of office properties and what type of marks to the underlying assets are you seeing as you’re reappraising the properties? And I guess maybe just talk about the level of confidence you have in the updated 7.9% office reserve at this level.
Mike Santomassimo: Yes. And really the allowance I would, allowance coverage ratio I would pay attention to on the slide is our CIB, CRE office portfolio, which is close to 11%. And that’s really the institutional style office buildings where really the stress is coming through. When you look at the charge-offs, it was across a number of properties. It wasn’t one or two. It was pretty geographically dispersed across different cities and across different parts of the country, so there wasn’t an over concentration anywhere. Each of the properties have very specific situations, and so there was a pretty wide range in terms of where the price cleared or where the appraisal came in. A good chunk of these properties are being marked, because we’ve got new appraisals for various reasons.
A small amount of it was actually realized, because the note or the property was sold. And so for a good amount of it, we’ll see how it ultimately plays out. There could be recoveries as we go. But it was a pretty, as you would expect, it was a substantial decline in what people thought the value of the properties was just a year or two ago.
John Pancari: Okay, got it. Thanks, Mike.
Operator: The next question will come from Gerard Cassidy of RBC Capital Markets. Your line is open.
Gerard Cassidy: Good morning, Mike. Good morning, Charlie. Mike on the guide for the net interest income on the forward curve. If the forward curve is incorrect and we’re sitting here a year from now, and rather than seeing a 415 or 416 [ph] Fed funds rate, if it’s close to the 5% or 490, how much of a positive would that be for a higher net interest income for you guys? Have you guys, I’m assuming, use different sensitivity analysis to kind of give yourself a sense of where net interest income could go under different rate scenarios.
