Truist Financial Corporation (NYSE:TFC) Q3 2023 Earnings Call Transcript

Truist Financial Corporation (NYSE:TFC) Q3 2023 Earnings Call Transcript October 19, 2023

Truist Financial Corporation beats earnings expectations. Reported EPS is $0.84, expectations were $0.82.

Operator: Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this event is being recorded. It is now my pleasure to introduce your host, Mr. Brad Milsaps.

Brad Milsaps: Thank you, Anthony, and good morning, everyone. Welcome to Truist third quarter 2023 earnings call. With us today are our Chairman and CEO, Bill Rogers; and our CFO, Mike Maguire. During this morning’s call, they will discuss Truist’s third quarter results, share their perspectives on current business conditions and provide an updated outlook for 2023. Clarke Starnes, our Vice Chair and Chief Risk Officer; Beau Cummins, our Vice Chair; and John Howard, Truist Insurance Holdings’ Chairman and CEO, are also in attendance and available to participate in the Q&A portion of our call. The accompanying presentation as well as our earnings release and supplemental financial information are available on the Truist Investor Relations website ir.truist.com.

Our presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures on slides 2 and 3 of the presentation regarding these statements and measures as well as the appendix for appropriate reconciliations to GAAP. With that, I’ll turn it over to Bill.

Bill Rogers: Thanks, Brad, and good morning, everyone, and thank you for joining our call today. Now, before we get into the third quarter results, let’s begin as always with our purpose on Slide 4. As we all know, Truist is a purpose-driven company committed to inspiring and building better lives and communities. I’d like to take a few minutes just to highlight some of the ways we demonstrated our purpose last quarter. Truist is driving positive change by supporting organizations that promote the growth and vibrancy of our communities. In August, we invested $17 million to support affordable housing in Charlotte and career development and economic mobility programs across the state of North Carolina. And just last week, we announced our allocation of $65 million in new market tax credits from the U.S. Treasury’s Community Development Financial Institution Fund.

This is the 12th time Truist has received an award, which has allowed us to invest $750 million in underserved communities by providing loans with reduced rates of interest and/or non-traditional terms. Over the years, these loans have helped spark economic development and job growth and communities across the regions we serve. I’m really proud of the meaningful work we’re doing as a company to have a positive effect on the lives of our clients, our teammates and our communities and, of course, our shareholders as we work to realize our purpose. Now, let’s turn to some of the key takeaways on Slide 6. Truist reported solid third quarter earnings that met our guidance despite certain discrete non-interest income and expense items that negatively impacted our results.

Mike is going to cover those later in the call. As you can see on the slide, our solid performance was defined by several underlying key themes. On our July earnings call, we discussed our intent to significantly reduce the rate of expense growth at our company, which was followed up with the introduction of our simplification efforts and $750 million cost saves program in September. We’re fully committed to delivering on this work. And the reduction in third quarter expenses is evidence of the hard work that’s been ongoing throughout the year. We’re also managing our balance sheet more efficiently. During the past few earnings calls, I’ve described how we’re focusing on core clients, reducing lower-yielding portfolios and paying down higher cost borrowings, all of which occurred during the third quarter and helped drive our NIM higher by four basis points during the quarter.

Moreover, these efforts have increased our CET1 ratio to nearly 10%, which is a level that we believe we can maintain throughout the proposed phase-in period under pending Basel III rules based on our current rate of organic capital growth. Although asset quality is normalizing off historically low levels, we are encouraged that our metrics remained relatively stable during the quarter, while we continue to build our loan loss reserve, considering the uncertain economic environment. Lastly, we’re making strong progress on our cost saves program and organizational simplification, which we’ll discuss in more detail later the call. I’m pleased with our direction, the intensity, and focus and I’m confident in our ability to emerge as a stronger company.

While the quarter was solid, we acknowledge there’s more work to do as strive to produce better and more consistent results in the future. We view this third quarter performance as a step forward in that direction. So, let’s do some more specific work on Slide 7. Net income available to common shareholders was $1.1 billion or $0.80 per share. Merger-related and restructuring charges primarily related to severance associated with our cost saves program hurt EPS by $0.04. Total revenue decreased as expected and was essentially in line with our guidance despite an $87 million discrete impact to service charges on deposits revenue. We’re also encouraged that our net interest margin improved four basis points, driven by our ongoing balance sheet optimization efforts, including a reduction in FHLB borrowings, a decline in lower-yielding loan balances, and improving new and renewed loan spreads.

Adjusted expenses were down 50 basis points and within our guidance range and would have decreased 250 basis points excluding $70 million of higher-than-normal other expense. Average loans decreased 2.5%, primarily due to the sale of the student loan portfolio in the second quarter and our continued repositioning towards higher-return core assets. Average deposits increased modestly as we continue to experience a remixing towards higher-yielding alternatives. We added 29 basis points of CET1 capital in the quarter and increased our ALLL ratio by six basis points in light of ongoing economic uncertainty. Lastly, we maintained our strong quarterly common stock dividend at $0.52 per share paid on September 1st. So, let’s move to our digital update on Slide 8.

Digital engagement trends at Truist remain positive, as you can see on the left side of the slide. Mobile app users have grown steadily over the past year, and we’re currently focused on driving additional growth through our MobileFirst engagement initiative. From an activity standpoint, digital transactions increased 9% relative to the fourth quarter last year, driven primarily by Zelle transactions, which were up 32% over the same period. Due to the rapid growth we’ve experienced, Digital has quickly become a preferred channel for interacting with Truist. In fact, digital transactions now account for more than 60% of total bank transactions. And while that’s certainly positive, Truist has a meaningful opportunity to shift the transaction mix even more towards digital, specifically by leveraging what we call T3, which is this concept that touch and technology work together to create trust, and that further enhances the client experience and drives greater digital adoption and efficiency.

As a proof point, recent enhancements to the digital onboarding have helped drive a 19% increase in Truist One funding rates year-to-date, which may in turn lead to additional balances and transaction activity with those new clients. In sum, Truist has solid momentum in digital and I’m highly optimistic about the potential we have to leverage T3 to further expand our digital user base and drive transaction volume. Next, I’m going to cover loans and leases on Slide 9. Average loans decreased 2.5% sequentially, reflecting our ongoing balance sheet optimization efforts, including the sale of our student loan portfolio last quarter and further reductions in lower return portfolios. Excluding the student loan sale, average loans were down 1.1%. Average commercial loans decreased 1.1% primarily due to a 1.5% decrease in C&I balances driven by lower revolver utilization and production.

Lower C&I production in our corporate and commercial banking segment reflected a combination of moderately lower demand due to economic uncertainty and greater pricing discipline which contributed to wider spreads on new production and commercial community bank. In our consumer and credit card portfolios, average loans decreased 4.6%, primarily due to the sale of our student loan portfolio and further reductions in indirect auto production. Consumer and card balances were down 1%, excluding the student loan sale. Residential mortgage was essentially flat relative to the prior quarter. We do continue to experience growth in higher yielding portfolios, especially Sheffield in Service Finance. Loan production increased 21% year-over-year at Sheffield and 17% at Service Finance.

Overall, we expect average commercial and consumer balances to decline modestly in the fourth quarter, driven by our ongoing mixed shift towards deeper client penetrations, deeper relationships, the emphasis of lower return portfolios and the effects of continued economic uncertainty. Let’s move to the deposit trends on Slide 10. Average deposits were flat sequentially, although we continued to experience remixing within the portfolio, as clients saw higher rate alternatives. Noninterest bearing deposits decreased 3.9% and currently represent 30% of total deposits compared to 31% in the second quarter and 34% in the fourth quarter of last year. Within our segments, average deposits were down 1% in corporate and commercial banking and relatively flat in consumer banking and wealth due to the effects of quantitative tightening and availability of higher rate alternatives.

We continue to deepen our relationships with Consumer Banking and Wealth Clients, especially in payments. Net new checking account production has been positive for three quarters in a row. We’re also seeing solid adoption of our flagship Truist One checking product. In addition, small business deposits were up sequentially, and August was the strongest month for net new small business checking account production in the last three years. Deposit costs continue to rise during the third quarter, though at a slower pace. Interest-bearing deposit cost increased 38 basis points sequentially, down from a 55 basis point increase in the prior quarter. Our interest-bearing cumulative deposit beta was 49%, up from 44% in the second quarter due to the presence of higher rate alternatives and ongoing mixed shift from noninterest-bearing accounts into higher yielding products.

Going forward, we’ll continue to maintain our balanced approach, being attentive to our client needs and relationships while also striving to maximize value for them outside of rate paid. Now, let me turn it over to Mike to discuss the financial results in a little more detail. Mike?

Mike Maguire: Great. Thank you, Bill, and good morning, everyone. I’m going to begin with net interest income on Slide 11. For the quarter, taxable equivalent, net interest income decreased 1.6% linked quarter primarily due to lower average earning assets and higher deposit costs. Although net interest income was down linked quarter, we are encouraged that the decline was slower than the 6.1% decrease observed in the second quarter as deposit betas increased at a more moderate pace. Reported net interest margin increased 4 basis points after declining for two consecutive quarters. NIM stabilization reflected our ongoing balance sheet optimization initiatives, including: focusing on our core clients, improving spreads on new and renewed loans, reducing lower-yielding loan portfolios and paying down higher cost wholesale borrowings, including FHLB advances, which were down about $20 billion on average compared to the second quarter.

Turning to non-interest income on Slide 12. Fee income decreased $185 million or 8.1% relative to the second quarter. The decline was primarily attributable to lower insurance income, which decreased $142 million sequentially due to seasonality. Insurance production is typically lowest in the third quarter and highest in the second. Insurance fundamentals remain strong, driven by new business growth, improved retention and favorable pricing, all of which contributed to 6.3% organic revenue growth on a like-quarter basis. Service charges on deposits were down $88 million in the third quarter due primarily to $87 million of client refund accruals that were driven by changes we made to our deposit fee protocols. Investment banking and trading income was lower by $26 million, while other income increased $38 million primarily due to higher income from other investments.

Fee income was flat on a like-quarter basis as higher insurance income and higher other income were offset by lower service charges and lower investment banking and trading income. Next, I’ll cover non-interest expense on Slide 13. Reported non-interest expense was flat sequentially as lower adjusted expense was offset by a $21 million increase in merger-related and restructuring expense, driven mostly by severance and facilities rationalization. Adjusted non-interest expense decreased 50 basis points sequentially, in line with our July guidance range of flat to down 1%. The decrease in adjusted expenses was driven by lower personnel expense and reduced professional fees and outside processing expense, partially offset by higher other expense.

The increase in other expense included $70 million of costs arising from the previously mentioned client deposit service charge refund accruals as well the settlement of certain litigation matters, including a settlement and patent licensing agreement, which resolved the USAA patent infringement lawsuit. If you excluded these items, adjusted expenses declined by 2.5% linked quarter. The work associated with our gross cost saves program is well underway as we will discuss on Slide 14. In September, we announced a $750 million gross cost saves plan that will be achieved over the next 12 to 18 months. The cost saves will include $300 million from reductions in force, $250 million from organizational realignment and simplification and $200 million from technology expense reductions.

Since these initiatives were announced in mid-September, we have already realigned significant elements of our organizational and operational structure to improve efficiency and to drive revenue opportunities. The work we’re doing includes optimizing spans and layers to improve organizational design health, consolidating redundant functions, restructuring select businesses and geographic simplification, all of which will result in reductions force over the next couple of quarters. In addition, we are aggressively managing third-party spend, reducing our corporate real estate footprint and rationalizing technology spend. Based on the latest information available, we still expect one-time costs associated with the cost saves program to range from 25% to 30% of gross cost saves.

We also continue to project the cost saves program will help us manage adjusted expense growth to 0% to 1% in 2024, which is net of natural expense growth driven by inflation and other factors. Moving to asset quality on Slide 15. Asset quality metrics continued to normalize in the third quarter, but overall remain manageable. Non-performing assets were unchanged linked-quarter, while early-stage delinquencies increased four basis points sequentially as increases in our consumer portfolios were partially offset by declines in commercial. Included in our appendix is updated data on our office portfolio, which represents 1.7% of total loans. We’re pleased that non-performing and criticized and classified office loans increased only modestly linked-quarter, while we increased the reserve on this portfolio from 6.2% at June 30, up to 8.3% at September 30.

Our net charge-off ratio decreased 3 basis points to 51 basis points, reflecting the prior quarter impact of the student loan sale, partially offset by increases in our CRE and consumer lending portfolios. [Total] reserves as provision expense exceeded net charge-offs by $92 million. Our ALLL ratio increased to 1.49%, up 6 basis points sequentially and 15 basis points year-over-year due to ongoing credit normalization and greater economic uncertainty. Consistent with our commentary last quarter, we have tightened our risk appetite in select areas, though we maintain our through-the-cycle supportive approach for high-quality, long-term clients. Turning to capital now on Slide 16. Based on our assessment of the proposed capital rules, we feel confident in our ability to meet the requirements under the proposed phase-in periods.

Truist added 29 basis points of CET1 capital in the third quarter through a combination of organic capital generation and disciplined RWA management. With a CET1 ratio of 9.9%, Truist remains well capitalized relative to our new minimum regulatory requirement of 7.4%, which took place on October 1. As a company, we are strongly committed to building capital and achieving a CET1 ratio of approximately 10% by the end the year. The projected trajectory for our CET1 ratio does incorporate headwinds from the pending FDIC assessment, which is now expected to be recognized in the fourth quarter. Our primary capital priorities are supporting the organic growth needs of new and existing core clients and the payment of our $0.52 per share common dividend.

We have no plans to repurchase shares over the near-term and we will continue to allow previous acquisitions to mature. RWA management continues to be disciplined as we allocate less capital to certain businesses, though we have been very clear that our balance sheet is open to core clients. In addition, we continue to believe that Truist’s capital flexibility with Truist Insurance Holdings is a distinctive advantage. We estimate that our residual 80% ownership stake provides greater than 200 basis points of additional capital flexibility. The table in the center of the slide provides an updated analysis of our AOCI. Based on estimated cash flows in today’s forward curve, we would expect the component of AOCI attributable to securities decline from $13.5 billion at the end of the third quarter to $9.7 billion by the end of 2026 or a decline of 28%.

Finally, as it relates to the proposed rules for a long-term debt requirement, we estimate that Truist’s binding constraint is at the bank level and that the shortfall is approximately $13 billion. We are confident that we will meet the proposed requirements at both the bank and holding company level through normal debt issuance during the phase-in period. Now, I will review our updated guidance on Slide 17. Looking into the fourth quarter of 2023, we expect revenues to be flat or to decline 1% from 3Q 2023 GAAP revenue of $5.7 billion. We expect linked-quarter improvement in non-interest income due to higher insurance, service charges on deposit income, and investment banking and trading income, partially offset by lower mortgage and other income.

Net interest income is likely to remain under some pressure due to our smaller balance sheet and modest NIM compression. Adjusted expenses of $3.5 billion are expected to decline 3.5% due to lower personnel and other expenses. In April, we stated that our 2023 expense guidance excluded expenses associated with TIH independence readiness. Previously, we’ve not called out these costs because they totaled only $20 million through the first nine months of 2023, including $9 million in the second quarter and $11 million in the third quarter. In the fourth quarter, we expect these expenses to approximate $35 million, which are excluded from our 4Q 2023 expense guidance. For the full year 2023, we expect revenues to increase by approximately 1.5%, which is at the midpoint of our previous revenue guidance of up 1% to 2%.

Our guidance includes the $87 million client refund accrual that negatively impacted fees in the third quarter. Full year 2023 adjusted expenses are still on track to increase 7%. This includes $70 million related to the legal settlements and client deposit service charge refunds, but excludes the $55 million of TIH Independence readiness costs for 2023. In terms of asset quality, we have tightened our guidance from a range of 40 to 50 basis points to approximately 50 basis points for the full year, which includes the impact of the student loan sale. Finally, we expect our tax rate tax rate – effective to approximate 18% or 20% on a taxable equivalent basis compared to 19% and 21% previously. Now, I’ll hand it back to Bill for some final remarks.

Bill Rogers: Great. Thanks Mike. And I’ll conclude on Slide 18. So looking beyond the third quarter, our transformation into a simpler, more profitable company is underway. We’re driving swift and meaningful actions to simplify our organization, which include key organizational changes. So, for example, in the recent weeks we’ve streamlined our commercial and community banking regions from 21 to 14, realigned several overlapping units into a unified commercial real estate business. We merged our consumer payments and wholesale payments businesses into a single Enterprise Payments organization, which will help us to accelerate payments activity more effectively across Truist. There have been a number of team consolidations within our consumer and small business banking lines of businesses.

We’ve also realigned nine teams under our enterprise operational services to drive efficiencies across our support team serving the whole organization. All of these changes are part of our $750 million cost saves program, which is well underway and designed to drive better service for our clients and limit adjusted expense growth to flat up 1% in 2024. Although we’re focused on reducing the rate of expense growth, we will continue to invest in our risk management organization and ability to maintain strong asset quality metrics. While there are many changes happening inside Truist, we’ve not lost focus on our core consumer and commercial businesses, which is an area that will continue to see significant investment. Net new checking account production has been positive for the first three quarters of this year, and we’re on track to continue positive net news for the whole year.

During the quarter, we acquired more than 39,000 households through our digital channel. We’re also maintaining momentum in wealth, where net organic asset flows have been positive in nine of the past 10 quarters. Client satisfaction scores were stable or increased across most RSPB channels during the third quarter. In the corporate and commercial, new left lead transactions were up 45% year-over-year. Lastly, our wholesale payments pipeline is up 10% year-over-year. We’re also seeing strong improvement in client sentiment amongst commercial clients, reflecting product and digital investments that we’ve already made. As a company, we’re also operating our balance sheet more efficiently, thanks to our focus on core clients, deemphasizing lower-return portfolios and paying down higher cost debt.

We’re building capital, and we feel confident in our ability to satisfy the requirements proposed in the Basel III Endgame rules with the proposed phase-in periods, while preserving our strategic flexibility with TIH. In conclusion, we’re making progress and we’re doing what’s necessary to improve our financial performance to meet your high expectations and, of course, ours. I am truly optimistic about Truist, and I know we’re well-positioned for the future. Our teammates are really performing at a high level, and they are committed to serving our clients, caring for each other and capitalizing on our great growth markets, I am really proud of our teammates. Before we move to Q&A, I also want to publicly thank the eight members of our Board of Directors who plan to retire at the end of this year.

I’m deeply grateful for their years of service and meaningful contributions to our company. Truist literally exists due to their leadership and confidence. Following these retirements, our Board will consist of 13 members, including 12 Independent Directors who are well-positioned to oversee and advance our strategic plans during this period of rapid industry transformation. So with that, Brad, let me turn it back over to you, and we look forward to the Q&A.

Brad Milsaps: Thank you, Bill. Anthony, at this time, will you please explain how our listeners can participate in the Q&A session As you do that, I’d like to ask participants to please limit yourselves to one primary question and one follow-up in order that we may accommodate as many of you as possible in the call today.

Operator: [Operator Instructions] Our first question will come from Ken Usdin with Jefferies. You may now go ahead.

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Q&A Session

Ken Usdin: Hi, good morning guys. Thanks for the color and update. I just – Bill, just coming back to the independence preparation for TIH and articles that were in the paper, I know you’re still, I’m talking about the optionality. Can you just give us an updated sense of just how you’re looking at the value of the business financially versus strategically? And what would change here to make you guys move forward with some type of transaction to move it forward?

Bill Rogers: Yes, Ken, good morning and thanks for that. As you can imagine, I don’t want to comment on any rumor or speculation. But to your question, think about the reason we did the opportunity with standpoint. I mean what we wanted to do is exactly what you highlighted in your question is to create this financial and strategic flexibility for both Truist for TIH. We wanted to establish value in the business, and the business is growing. I mean, we’ve been able to hire and retain talent. So we feel really good about what’s happening in the core insurance business. We wanted to make sure that the insurance business had flexibility to continue to grow and then that Truist has an opportunity to respond so whatever may happen.

I mean, we’re obviously in a market that’s got lot of uncertainty to it, and we just want to retain that strategic and financial flexibility. So there’s not one thing. There’s not like a queue. If something happens, we do this, But we want to just continue to reserve this flexibility and continue to apply it to both the bank and the insurance business.

Ken Usdin: Yes. And I guess just a follow-up on it as well. Like at what point does financial benefit become strategic? Because a lot of the questions we get are the trade-off between the two. An obvious ability to improve capital versus a delta in terms of like fee contribution, ROE, et cetera. So it’s hard for the investor community to kind of just understand what that incremental switch is. I guess, maybe, how do you think about that notion of like when financial becomes strategic?

Bill Rogers: Yes. As I said, there isn’t a particular trigger point. We just want to make sure that we retain that flexibility and we’re constantly looking at everything that you just talked about and factoring that into the decision-making. This is something that we sort of continually keep in front of ourselves, we keep in front of the Board. But I think the intentionality – I mean, reason we did this is we’re allowed to have this conversation around flexibility.

Ken Usdin: Right. Okay. Thank you, Bill.

Bill Rogers: Okay. Thanks.

Operator: Our next question will come from John McDonald with Autonomous Research. You may now go ahead.

John McDonald: Good morning, guys. I wanted to ask you about net interest income. A number of banks have said that they see NII dollars potentially bottoming in the fourth quarter. Mike mentioned you see a little bit of slippage into the fourth quarter. But do you have any visibility on whether that could stabilize fourth quarter? And what factors should we think about for you as we think about the NII path heading into next year?

Mike Maguire: Yes, good morning, John. We obviously did see some pressure this quarter, actually probably a little bit better than we expected and that we talked about during the second quarter. We do expect to continue to see some pressure in the fourth, and frankly, even into the first half of 2024. And I think that just has to do with the rate path. We have an expectation that we think we’ve seen our last hike, and we don’t have a cut in forecast until July of next year. We have two cuts in the second half. And so as betas – sort of, again, the good news is, are slowing down, and we feel like grinding a bit lower, we should still feel a little bit of pressure there. We’re trying to combat some of that pressure. We’ve been very intentional around how we’re managing rate paid across our client base.

We’re beginning to see some nice progress as it relates to new and renewed credit spreads. We’re repricing some of the fixed rate loans. So the good news is, is while there’s pressure, it’s moderating, but we still do see that pressure into early next year.

John McDonald: Got you. Thank, Mike. And in terms of the expenses, when you talk about the goal for next year to be flat to up 1%, can you remind us how much of the $750 million gross are you expecting it next year and whether you might also have TIH readiness costs go into next year, too.

Mike Maguire: Yes. I can start there, John. I think Bill may want to weigh in, too. Hard to say. I mean, we said on the 750. It’s kind of 12 to 18 months. I mean, I think if you think about two-thirds plus or minus being recognized next year, maybe it’s a little more than that. That’s how we’re thinking about the math there. And that would again, John, give us the confidence that we have to make sure we manage expense growth to less than 1%. You asked about TIH readiness costs as well. We’re not ready to talk about 2024 yet there. We will give you more visibility to that when we guide for the full year in January.

John McDonald: Okay. Fair enough. Thanks.

Operator: Our next question will come from Ebrahim Poonawala with Bank of America. You may now go ahead.

Ebrahim Poonawala: Thank you. Good morning.

Mike Maguire: Good morning.

Ebrahim Poonawala: I guess maybe Mike, just following up on the expense savings, one, just like to think through when we look at the 0% to 1% growth next year, when do these get realized and should we assume that the expense run rate through 2024 continues to decline? So when we are thinking about exit 2024, second half 2024, expenses will be lower than first half 2024, is that just from a construct standpoint the right way to think about how these flows through relative to your offsetting investments?

Mike Maguire: Yes. Ebrahim, I think the way I’d answer that question is, a lot of the action we’re taking, actually right now and in the rest of the fourth quarter and early next year around, for example, some of the organizational design and health and some of the reductions in force, you’ll see that come into the run rate relatively quickly. Same goes for some of the realignment of businesses. Those have different flavors. In certain cases, if we significantly restructure a business, like as a good example, we discontinued our middle market agency trading business earlier this year. That was a pretty quick adjustment to run rate. Other adjustments we’re making maybe take place throughout the course of next year. And then technology spend, which as you recall is a pretty significant component of our cost savings plan.

That has a variety of flavors as well. So I’d say for the most part, you’re going to see pretty good progress on run rate adjustment sort of as we exit 2023 and enter 2024. And you’ll see, I think, just sort of continuous improvement throughout the course of the year.

Ebrahim Poonawala: That’s helpful. Thanks, Mike. And I guess this is a separate question. So, you talked about exiting certain businesses, a student loan portfolio, another one. How much more is there as you think about just making the balance sheet more efficient, optimizing capital? Is there a lot more to go on the asset side that you could look to exit or sale? And if there’s any way to quantify that?