James Leonard: Now you’ve just given the publicity then I’m going to have to live up giving you a 2024 NII guide. There’s no question that Bryan and I have positioned the balance sheet to be currently neutral to benefiting for the rate cuts when the rate cuts ultimately occur. The down rate scenarios continue to be the most difficult for a bank earnings profile to manage as credit costs would ramp up and recession kicks in. So for us, I believe that the deposit cost pressures will mitigate as the Fed begins a cutting cycle. We just don’t see that happening this year, which is why the guide on NII is what it is that we continue to expect a competitive environment. But should the Fed move to the cuts, we really like how the balance sheet is positioned for that environment.
Our guide the exit run rate on fourth quarter NII, if you took our guide and multiplied it by 4, it’s about where consensus is for 2024. So I don’t think there’s necessarily a gap at this point in time, but 2024 is a very long way from July 20.
Erika Najarian: Understood. And my second question maybe is for Tim. It took a lot of years of hard work, but Fifth Third has put itself in a position where you’re pretty down the middle in terms of the results you’re not talking about taking expenses down next year. You’re not talking about RWA mitigation. And while I’m sure there’s something on LCR and long-term debt as those requirements come in that you’re working on, the business seemed to be something that would change strategy. The question really here is as you think is Fifth Third is positioned, and there seems to be now appreciable differences on how peers are positioned for this sort of new world order. How are you going to take advantage of it from a market share perspective? .
Timothy Spence: Yes. That’s a good question, Erika, and I appreciate it. I will say, I think all of the things that you described, the RWA diet, a continuous focus on expenses, thinking about liquidity profile and in particular, the value of different sorts of deposits in the new world are all things we’re doing here today. But we have the benefit of having made multiyear investments in either asset classes or in particular, on the operational deposit side of the equation that are benefiting us in this environment, and they’re going to continue to be very valuable going forward. I think narrowly, the hardest thing on an organization, if you’re trying to deliver predictable long-term results is to have to move into a binge purge mode, right?
And whether that is outsized growth followed by shrinking or letting expenses run up, followed by deep cuts later it creates — the two things happen. One, the first thing that people cut tends to be the last thing that came in the door. And the byproduct of that is your cuts end up being concentrated in the areas you are investing for future growth, one. Two, your people actually become more reticent to stretch and to try to give better outcomes because they don’t want to get outsized and have to work backwards. So I think what — the advantage we’re going to have next year and the year after that and the year forward is our ability to be consistent about investing in the franchise. And that will mean that we stay on the pace that we’ve been on the last several years in building branches.
It will mean that we continue to add to the middle market teams because I think the economics of these middle market banking relationships are going to continue to be excellent regardless of what happens to capital and liquidity. And we’re going to continue to focus on having the best retail deposit franchise and best treasury management franchise in our peer group.
