John Ciulla: Yes, it’s a great question again. And there’s not a way to give a kind of definitive quantitative answer. I think we’ve clearly seen, and as you’ve seen, I’m really proud of the team. We’ve reduced office exposure by 25% over the last 4 quarters with really minimal hit to capital and minimal credit loss. There is no question that the amount of liquidity and the eagerness of purchasers in the market for loans is it’s more expensive now than it was 4 quarters ago, just given kind of people’s view of the market. There still is a lot of liquidity, a lot of private capital, as you know, out there. And so that is encouraging to us in terms of our ability, if we picked good pieces of property to finance at the end of the day, if there’s alternative uses for those properties or even if there’s been a valuation decline, but there’s still clearly equity in the property, we’ve been able to find buyers.
This last quarter, we said that $80 million represented roughly 50% to 60% of our charge-offs in the quarter but we think, obviously, with respect to noncritical and strategic office properties, that’s the right move now. So it’s getting more expensive. I think we’ll continue to being proactive. We feel really good about the fact that we’ve paired the portfolio thoughtfully and it’s now down to below $1.3 billion nonmedical office but there are buyers of this real estate at a reasonable price still out there, although it’s obviously getting more expensive to execute on kind of balance sheet moves like that.
Matthew Breese: Great. And then last one for me. In late June, there were some joint interagency guidance from the FDIC, the Fed, the OCC on prudent commercial real estate loan accommodations and workouts and I would like your perspective on how this plays out practically? What does it look like in terms of how you help customers or how you can help customers? What are the expected tools that can be used? And how will these accommodations and workouts be disclosed if and when they occur?
John Ciulla: Yes, another loaded question that I don’t know I can answer with specificity, but I’ll give you my perspective, during, obviously, and I’m not going to go back to a history lesson. But in the early ’90s, obviously, the regulators with respect to real estate really kill the banking market and accelerated and we’re very prescriptive with respect to the way they looked at restructuring during the great financial crisis, when I was Chief Credit Officer here, I thought they were very constructive in terms of making sure that as long as you were realistic with respect to the return you were getting on the loans that they knew it was in everyone’s best interest to modify. And we’re seeing that general tone and tenor I think, from the regulators, again, which will be constructive.
So my view is and in our view at least internally in the bank is you don’t want to artificially kick the can forward if there’s not a reasonable credit to be renewed. And I think the regulators are still going to hold us accountable to making sure that we’re taking appropriate losses. We’re recognizing nonaccrual loans and that we’re not able to modify things artificially that really aren’t good loans. But so far, we’re able to work with our sponsors and real estate owners and either get a little bit of additional proceeds. And in consideration, we underwrite a slightly higher LTV. The cap rates have changed the value and so far, Matt, we’ve seen a kind of a constructive stance and I think from our vantage point, that’s really helpful, but it also doesn’t give us the opportunity to sort of artificially pick forward alone that really shouldn’t be kicked forward.
