The third one I’ll just mention is analytics. We talked a lot about analytics and the importance in providing proactive advice to our clients, both on the commercial and consumer side. We’re fully up and operational with our consumer platform, and year-to-date we’ve booked about $10 million in incremental revenue just from some of the leads and insights that that solution has provided us, and that’s just starting to scratch the surface. So some of the big initiatives that we rolled out in February at investor day are ahead of schedule – again, a small number in the grand scheme of things, but as I said then and I’ll say again today, it’s really not about the P&L impact today, it’s about the impact two and three years down the road, where it’s going to create new sources of revenue that we haven’t had.
Let me just–I’m answering this longwinded, but let me add in one new one. I referenced this in the prepared remarks, but we’re currently in discussions with GreenSky and the private equity firms that are acquiring the GreenSky platform from Goldman. Our discussions around a sponsorship program that would allow us to continue to support their origination and distribution of production with a balance sheet-lite, liquidity neutral solution, and as a reminder, I know you know this, Michael, we’ve been in business with GreenSky on a held-for-sale arrangement since 2020, that continued with Goldman after the acquisition, but it was only on a small portion of their originations, which this quarter created only about $1 million in revenue. The new program that we’re contemplating is not built into our ’23 guidance and would have a much broader program across all of the production, and we’ll be very excited about sharing specifics about that banking as a service program and the financial benefits in the coming months.
Michael Rose: Kevin, that’s great color. Maybe just to kind of follow up to that, Jamie, I understand that the positive operating leverage is going to be pretty challenged next year, but just given this forthcoming arrangement with GreenSky, I think third party loans are down to about 1.8% of total. Should we expect a higher level of balance sheet growth as we think about next year, obviously zero to 2%, given this quarter’s production seems a little bit light? It seems like you have some momentum, just wanted to get a sense–I know it’s early, if we could expect more robust balance sheet growth as you move into next year. Thanks.
Jamie Gregory: Yes, Michael, as we look further out – and again, we’ll give a more detailed outlook here in about six weeks, but as we look further out, we do expect balanced loan and deposit growth, and what you’ll see there is you’ll see that our core client businesses will continue to grow and our objectives there are to grow faster than the market. We believe that we have a right to win, we believe we can take share, and so that’s our objective in our core client businesses. But you may see some other businesses that remain flat or even decline on the margin, that are non-core and non–you know, non-core multi-product clients, and so you’ll see a little bit of a mix there over the next few quarters as we go forward.
Michael Rose: Great, thanks for taking my questions.
Kevin Blair: Thank you Michael.
Operator: We now have Brady Gailey from KBW. You may proceed.
Brady Gailey: Hey thanks, good morning guys.
Kevin Blair: Good morning Brady.
Brady Gailey: You have common equity Tier 1 of over 10% now, and as I think about the future, you know, there’s probably not going to be a lot of growth, you’re still making good money, so that ratio is still going to creep higher. The stock is sitting here barely on top of tangible book value. Do you think that sometime in 2024, it makes sense to consider re-engaging in the share repurchase program?
Jamie Gregory: Brady, first as you’re well aware, we’ve been in capital accumulation mode now for about six quarters, and we’ve achieved those objectives that we raised a while back to get above 10%, to your point. Now, we are in capital management mode, so our priority in that is just what it’s always been in the past, is deploying that capital to clients. But beyond that, we will manage our capital ratios as appropriate, including the use of share repurchases. Right now, we believe two things are important for that discussion: first, in the fourth quarter, if you assume that we have that FDIC fee, we do not expect to accrete a lot of capital in the fourth quarter. Second, we believe there’s still a lot of economic uncertainty, so where we are right now, we’re going to sit on the sideline likely here in the fourth quarter, but in 2024 we’ll be balanced, like you’ve seen with us in the past when we’ve been in capital management mode, prioritizing clients, and then secondarily you’d like see us with share repurchases.
Brady Gailey: All right, that’s helpful. Then my second question is just on the path of the NIM – like, I understand it’s down a little bit more in 4Q and then stable, and then you’re starting to see some expansion especially in the back half of the year. If I look at that Slide 7, where you suggest 23 basis points of NIM expansion, I know that’s only looking at the fixed rate piece of it, so is there any way to look at the entire company and gauge what the possible NIM expansion could be after we reach this 3% bottom?
Jamie Gregory: Well, for today’s purposes, let’s go through what is not on that fixed rate chart. First, what that does not include would be any mix shifts in deposits between non-interest bearing and interest-bearing, or even within products that are within interest bearing. It doesn’t include the headwind of deposit production cost, and as I mentioned, production for us was around 3.70 in the third quarter, which is clearly higher than our total deposit cost. It would not include any deposit product rate increases, and so all of our guidance is a flat rate forward look, and so we’re not really expecting any material product rate increases, but if they were to happen, it would not include that. Then it also doesn’t include the impact of loan spreads, and I want to point to something there because loan spreads have been a really good story for us.
We’ve had six consecutive quarters where floating rate loan spreads to index have widened, and so we believe that we’re getting paid for the risk that we’re putting on the balance sheet. We believe it’s accretive to capital, and so that’s a good trend there. Those four things are not included in that. Now, because the first three were negatives, it’s likely that those are a little bit more headwinds than they are tailwinds to what you see on the fixed rate re-pricing, but the trend should have a similar shape as what you see on that chart.
Brady Gailey: All right, that’s helpful. Thanks Jamie.
Operator: We now have Christopher Marinac of Janney Montgomery Scott.
Christopher Marinac: Thanks, good morning. I had a question for Bob on the kind of combined SNIC [ph] portfolio in club and purchased business. Where do you want that to go as next year comes into focus? It’s more about kind of where you think that will land in the future.
