So when you then look at declining real incomes, the only thing that really would be standing between somebody who is having to work two jobs and is still suffering from a declining real income and credit delinquency is the fact that there was the stimulus buffer that built up because people had forbearance on loan portfolios and stimulus dollars. Well, the student loans are back now. Housing inflation is still very high at 7.2%, I think, in the most recent prints. And those are just early indicators that there are people across the country that are struggling a lot more than the headline numbers would suggest. So I feel good because the two areas I would say the market is most worried about right now are subprime consumers and renters where we have very little in the way of exposure on virtually no subprime, I think the lowest level there of any of our peers who provide information on that front and 85% of the consumer exposure is to homeowners.
And then in commercial real estate, where, again, our exposure relative to total capital is lower than anybody else’s. And because we weren’t trying to grow that portfolio materially, we’re able to be much more selective, which is reflected in superior credit metrics right now when you look at our commercial real estate book relative to others. So it’s both smaller and better performing.
JamesLeonard: And in terms of how the consumer is doing and what we see in our data, the average consumer balance is still deposit balance is still 15% above pre-COVID levels. But to Tim’s point, renters are back to pre-COVID levels and sub-660 FICOs are actually below pre-COVID level. So the averages can be a little bit misleading in terms of what credit outcomes may bring in 2024. But as Tim said, we’re certainly well positioned from a credit perspective on our balance sheet. And from an ACL perspective on the second part of your question, the scenarios we use from Moody’s have GDP contracting almost near zero. So the modeling certainly picks up erosion in the forecast. In this quarter, you had a slight erosion both in GDP and unemployment as well as with corporate profits and that was part of the reason or the primary reason why our ACL coverage increased from 208 basis points to 211 basis points.
It’s just we had the benefits of the loan balance reduction and the unused commitment reductions from RWA optimization efforts that offset that.
EbrahimPoonawala: That’s helpful. And just as a separate question. In terms of deposit pricing, as we look through next year and if rates don’t get cut in higher for longer, are you observing any differences within your geographies, Midwest versus Southeast? Clearly, you’re opening a lot of branches in the Southeast. So you have a different strategy there. I assume relative to the home market. Just give us a sense of pricing competition, any differences? And in your view, is deposit pricing now essentially national in nature? Or is it still localized where certain markets could meaningfully outperform or lag in — on the pricing side?
JamesLeonard: Excellent question. I’ll start and then turn it over to Bryan. In terms of total deposit cost and deposit pricing, the quarter played out as expected with our beta ticking up from total deposits, excluding brokered to 50%. We expect that to hit the 53% beta we talked about a quarter or two ago. So the pricing is playing out as we had expected. And I think most of the bank’s beta guides are coming up to where we’ve been at this hire for longer scenario. But in terms of each geography, Bryan, do you want to touch on that?
