Charles Peabody: Good morning. A couple of questions on the First Republic acquisition. Some of us obviously thought that would be a home run and I’m glad to see that Jamie Dimon validated that in his annual letter. When you look at the first quarter, it annualizes out to $2.7 billion, $2.8 billion, above the $2 billion that Jamie published in the letter. Now, I know you don’t want to extrapolate that, but can you remind us what sort of cost savings you still have in that because this quarter did see expenses come down to $800 million down from $900 million? And then, secondly, is there an offset to that where the accretion becomes less and less and that’s why you don’t want to extrapolate the $2.7 billion, $2.8 billion? So that’s my first question.
Jeremy Barnum: Okay. Thanks, Charlie. And I’m going to do my best to answer your question while sticking to my sort of guns on not giving too much First Republic specific guidance. But I do think that kind of framework you’re articulating is broadly correct. So, let me go through the pieces. So, yes, the current quarter’s results annualized to more than the $2 billion Jamie talked about. Yes, a big part of that reason is discount accretion, which was very front loaded as a result of short-dated assets. So that’s part of the reason that you see that converge. Yes, it’s also true that we expect the expense run rate to decline later in the year, as we continue making progress on integration. Obviously, as I think as I mentioned to you last quarter, from a full year perspective, you just have the offset of the full year calendarization effect.
There’s maybe an embedded question then there too about we had talked about $2.5 billion of integration expense. And the integration is real. The expenses are real. And also the time spent on that is quite real. It’s a lot of work for a lot of people. It’s going well, but we’re not done yet, and it takes a lot of effort. But broadly, I think that our expectations for integration expense are probably coming in a bit lower than we’d originally assumed on the morning of the deal for a couple of reasons. One is that, the framework around the time was understandably quite conservative and sort of assumed that we would kind of lose a meaningful portion of the franchise and would sort of need to size the expense base accordingly. And of course, it’s worked out to your point quite a bit better than that.
And therefore, the amount of expenses that is necessary to keep this bigger franchise is higher and that means less integration expense associated with taking down those numbers. It’s probably also true that the integration assumptions were conservative. They were based on kind of more typical type of bank M&A assumptions as opposed to the particular nature of this deal, including the FDIC and so on and so forth. So, yes, I think that probably is a pretty complete answer to your question. Thanks, Charlie.
Charles Peabody: Okay. As a quick follow-up, where are the next home runs going to come from? And this is more strategic beyond just JPMorgan, but there is probably going to be more regional bank failures whether it’s this year or next year and opportunities to pick those up. But what you’re seeing is that private equity and family offices are setting up to participate in this next round of bank failures. Mnuchin’s buying of NYCB is clearly to create a platform to roll ups of failed banks. And then there are other family offices that have filed shelf registrations for bank holding companies whose specific purpose is to buy failed banks. So, do you think that these opportunities are going to be competed away by private credit? And as part of that, do you think the regulators are going to view private credit as a different party and less attractive party versus bank takeovers of failed banks? That’s my question.
Jeremy Barnum: Right. Okay, Charlie. There’s a lot in there. And to be honest, I just don’t love the idea of spending a lot of time on this call speculating about bank failures. Like you obviously have a particular view about the next wave in the landscape. I’m not going to bother debating that with you. But I guess let me just try to say a couple of things, doing my best to answer your question. Like as we talked about earlier, we have a lot of capital. And as Jamie says, the capital is earnings in store. And right now, we don’t see a lot of really compelling opportunities to deploy the capital. But if opportunities arise, despite the uncertainty about the Basel III endgame, we will be well positioned to deploy it. I think embedded there is also sort of a question about the FDIC and the FDIC’s attitude towards different types of bidders.
And obviously, there’s a lot of thinking and analysis happening about the entire process and some recent forums and speeches on bank resolution and so on and so forth. And I think probably we can all agree that it’s better, all else equal for the system, to have as much capital available and as many different types of capital available to ensure that things are stabilized if anything ever goes wrong. But the mechanics of how you do that when you’re talking about banks are not trivial and not to be underestimated. So, I guess that’s probably as much as I have on that.
Charles Peabody: All right. Thank you.
Jeremy Barnum: Thanks.
Operator: We have no further questions at this time.
Jeremy Barnum: Thank you everyone.
Operator: Thank you all for participating in today’s conference. You may disconnect at this time, and have a great rest of your day.
