A – Christopher Gorman: Sure. So that’s a great question. And as you put them together, they are closely related. So if you just step back here, here’s how we see the future as all the regs unfold. What’s not going to change for us, Ebrahim, is we’re going to remain focused on our relationship model. We’re going to stay focused on targeted scale. But I think there’s going to be incredible and intense scrutiny around the duration, the granularity, the composition of the deposit base, and that’s one of the reasons that Clark talked about that we pivoted and made sure we protected our deposits, whereas we were kind of leading in terms of not having a lot of beta. Next gets to — I think there’s — and this gets directly to your question.
I think there’s going to be a significant change in loan-to-deposit ratios. As you kind of run all this through your models and we run it through our models, I think loan-to-deposit ratios for Category 4 banks, if they’re mid-80s now, they’re going to be significantly less. And we are very focused on this. And so keep in mind, last year, we grew our loans kind of high double digits. I mean like around 19%, I should say, high teens. And then we were on a path to grow 6% to 9%, but that all happened in the first quarter before the events of March. And we not only stopped that growth, but actually pushed it back $1 billion by the end of this quarter, which I think is really, really important. And right now, what we’re doing is we are scrutinizing every portfolio we have in the bank.
I’ve always said that on a risk-adjusted basis, most loans — most standalone loans don’t return their cost of capital. And if you think about having to carry more capital and you think about the capital that you have being a lot more expensive, then you can rest assured there will be a lot of credit-only relationships that won’t be strategic to us. So we’ll preserve our capital for those relationships. As you know, we can do a lot with them. But we will be continuing to push down our assets. And you see in the guidance that Clark gave you, we’re looking at average loans being down 1% to 3% in the third quarter and down 1% to 3% in the fourth quarter, we will hit that. So — and then the second part of your question, which is also related, as we shrink the balance sheet, we’re going to have to make sure that our expense base is rightsized for the future asset base of our company.
And rest assured, we’re looking at that as well.
Ebrahim Poonawala: And Chris, if I may squeeze one in. Just give us a sense of the dividend. There’s been a lot of focus, the 7% dividend yield. As the Chairman of the Board, I know it’s evaluated every quarter, but how confident are you in terms of dividend sustainability as we kind of plug through the back half into 2024?
Chris Gorman: Sure. Well, the headline there is I am confident. But as a Board member, we spend a lot of time talking about strategy and talking about dividend policy. We manage the company for the long-term. And the dividend policy is no exception. Our capital priorities, as I just mentioned, are unchanged, is to support our clients, our prospects and to pay dividends. And to your point, last week, our Board did approve a $0.205 third quarter dividend. Keep in mind, over our history, we have paid out 80% very, very often. It’s just been in the form of both buybacks and a cash dividend. So we’re obviously paying close attention to that. I feel good about it. Let me talk a little bit about capital because it’s so related. This — in spite of some of the challenges Clark mentioned, this quarter, we grew capital.
