John Pancari: Great. Thanks so much, Jim.
James Herzog: Thank you.
Operator: Your next question comes from the line of Steven Alexopoulos from JPMorgan. Please go ahead.
Curtis Farmer: Good morning, Steve.
Steven Alexopoulos: Jim, I just want to drill down on your answer to John’s question. So the stability or modest decline in deposits for the rest of the year, you’re saying that’s coming from outflow slowing. It’s not because you had strong outflows this quarter, but you plug the hole of broker deposits. So you’re not saying you need to use brokered for the second half to remain fairly stable down a bit as outflows are slowing, correct?
James Herzog: That’s correct. To be clear, we have really no plans to add broker deposits between now and end of the year. I think we’re at a pretty good resting spot. We do think the customer core deposits have very much stabilized. We do see whether you define it by where we were in the second quarter average or if you look at June 30th, which with some elevated balances and you normalize for that number for those elevated balances. From there, we see just some very modest decline between now and the end of the year. Now we’ve not really factored in a material amount of seasonal deposits, which in the past have come in, but seasonal patterns have gone out the window over the last year. We’re not exactly sure what to expect there.
So there could be some opportunity there. But overall, if you adjust that $66 billion in June 30th for card, and may be a modest amount of elevated balances, we would see just a modest decline from that level on, assuming we don’t get a large and full seasonal deposits.
Steven Alexopoulos: Got it. Okay. And if we think about the margin, the outflow of noninterest-bearing right replacing those with basically time deposits, that’s really pressured the NIM. So if that both the ninth inning, are we at a bottom for the NIM right now?
James Herzog: If you look at our guidance, Steven, we do have just a little bit more pressure to go there. You see the net interest income guidance that we implied, you do see a small step down in Q3 and then a smaller step down in Q4. Now as a partial offset that. I’d never like to talk about NIM percentage because our NIM percentage can bounce around for reasons that don’t correlate with income, whether it be the level of securities, whether it be the level of cash that we carry and the reasons for carrying that cash. If we do see cash balances go down, because that is putting a bit of a drag on the NIM, if they go down to normal levels. I would see the NIM being very close to where it’s at now. You might see another three or four steps downward pressure on the NIM as the deposit mix is roughly offset by the smaller balance sheet as we deflate for that excess cash.
If we don’t reduce cash balances, and my forecast assumes we do, but we hold at these cash levels that we’re currently at, you could see another 9, 10 bps in NIM. But again, I’m not expecting that at this point. I’m more focused on getting the cash down as things continue to stabilize. So we’re very near the bottom, just maybe a few bps depending on what we do with our cash position.
Steven Alexopoulos: Okay. Thanks. So maybe a final question. I know we’re going to get the new capital fairly soon, but you guys are $91 billion of assets. How do you think about crossing that $100 billion asset threshold organic? I know this is not a great environment to be considering M&A transactions. But when you think about just the capital burden, the cost burden potentially, does that make sense across that organically?
