JohnWoods: Yes, I agree with all of that. And I think the issue is in credit RWA versus operational risk RWA, Gerard. So, I think there was the view that there would be some puts and takes on the credit risk RWA and maybe it wouldn’t be much of an increase expected at the regional bank level, but I did see – we did see those reports on residential mortgages. We’ll see how it all plays out. But on the operational risk side of things, with a complex fee-based sort of businesses are where a lot of that is directed and it’s not just – we don’t have much of exposure – as much of exposure to that as maybe some other banks in the industry do. So broadly we felt like that we would be impacted possibly a little less than most and we’re sitting with capital a little more than most.
So from that perspective, we feel pretty well-positioned for the uncertainty of the regulatory. We are making process and as you heard from Bruce, we’re growing capital into the end of the year and I think a 10 – something in the neighborhood of 10.5% CET1 is a pretty strong mitigant to anything that might come down the road from the Fed.
Gerard Cassidy: Great, thank you, guys.
Operator: Your next question will come from the line of Ken Usdin with Jefferies. Go ahead.
Ken Usdin: Hi, thanks, good morning. I just wanted to follow-up on the strategic remixing and wondering, can you give us some color on the types of loans and deposits that you think will come over as part of that – those new hires in the Private Bank. I mean, obviously, the First Republic mix have been kind of low-rate mortgages and high-rate CDs. I would expect that not the type of NIM you’re looking to be adding. So just wondering just – what those producers you are expecting to bring over and also kind of we could see it in your AUM expectation, but it looks like it will be more NII delivering as opposed to fees.
Bruce Van Saun: Turn that over to Brendan.
Brendan Coughlin: Yes, so, we are really excited obviously about this initiative and it’s a very strategic acceleration of our Wealth Management business. But to your point, it does come with scaling up the bank as well while we are aiming to recreate a lot of the customer experience magic that existed in these private banking models. We’re going to make some structural changes to make sure that the profile of the business that we get is accretive at the top of the house. So what you can expect from us is disciplined credit pricing that while will be competitive, we’re not going to kind of lead with undercutting the market and pricing to make sure we have the right margin. We will have an incredibly disciplined credit appetite.
We don’t expect to take a step forward or step in the wrong direction in terms of credit risk profile. In fact, we think this will enhance the credit risk profile with very low-risk loan generation. We are going to ensure that we’re driving lendable deposits on the balance sheet that we put out relative to the Private Bank that we’re getting core operating deposits, whether that’s from individuals or from businesses. It’s really important that we maintain a sound liquidity position in this growth. And lastly, from a compensation perspective, we’re going to rationalize the compensation model the best we can within the confines of a private bank to ensure that those – the combination of those factors give us a return profile that can be accretive at the top of the house on overall ROE, but also on things like NIM.
