ErikaNajarian: And my follow-up question was for you, Tim. I think it was a very powerful statement you said in the beginning of the call in terms of confidence that you could return to loan growth next year. I think several of your peers that have similar CET1 ratios and similar AOCI marks are still talking about dieting. Could you give us a sense of, first of all, if you could confirm what the AOCI was in basis points, Jamie? And second, Tim, how are you balancing on one hand, the market wants you to continue to build capital as we approach that transitional date on CET1? And on the other, we’re still hearing low demand from corporates for financing.
TimothySpence: So there’s a lot in there. But that’s the right question, Erica. So a few things here. One, I think, we have tried to be consistent in how we confront change or a need for change in how we operate the company. And the underlying principle here is that if you have to make a change, it’s better to do it quickly so that you can get it behind you and return at normal mode of operations. So we have been aggressive in building liquidity. Jamie talked about the fact that we were Cat-1 LCR compliant in both August and September this year. And I think equivalently, we have tried to be very proactive about how we manage through the RWA diet. So we have one additional quarter to go of dieting to hit our RWA target, which was about a 2% reduction, if you just look at what we’re expecting in the fourth quarter.
And from there, we’ll have achieved what we think we need to achieve in order to be able to refocus on growing the balance sheet. Prudently, I should say, growing the loan portfolio prudently sequentially over the course of the next year. We have the benefit of a very high level of profitability right now, right? We obviously don’t have all of the peer reports at this point. But if you look at the core profitability measures here, they’re excellent. We’re generating 30-plus basis points of CET1 a quarter, which is quite helpful as it relates to being able to both build capital and fund loan growth. And then while demand is tepid, across the sector. We have some idiosyncratic benefits here that probably have been a little bit lost behind the diet in the form of both dividend and provide, which continue to perform very well and generate growth.
And the sustained multiyear investment we’ve made in expanding our middle market coverage in the Southeast markets, the middle-market relationships in terms of the new relationships we’ve added in the company year-to-date, are 25% ahead of our all-time record pace. And we still have bankers who are seasoning in in terms of building their portfolios that we have been fortunate to hire over the course of the past few years. So that — those are the things that really provide the catalyst in an environment where demand in aggregate is a little bit more tepid and then the raw capacity in the form of capital generation to be able to support that statement that we can return to growth next year.
JamesLeonard: And then, Erika, on your other components of the question, CET1 for us finished the quarter at 9.8%. Excluding the investment portfolio, AOCI, that number would be 6.3%. And then the RWA bloat from the pending rules would be about 2% to 3% of RWA, which is about 20 basis points. So we would look to be at a 6.1 level. But as we talked about then, the earnings power of the company is very strong. We continue to defer the buybacks. We’ll continue to accrete capital and with the passage of time, given the structure in the investment portfolio. The burn down of that AOCI will be 65% or so by the time we reach the fully phased-in level. So we feel that this is a very manageable timeline for the company. In fact, have a lot of cushion should rates even go higher.
