Jeffrey Adelson: Hey guys, good morning. Thank you for taking my questions. I guess I just wanted to circle back on Earnest and in slide 13, you talked about how it’s currently profitable at the $200 million revenue run rate and appreciate the new disclosure there. I’m just curious, is that more of a run rate today in this environment where originations have slowed and you don’t — I know this is a revenue number. Just trying to understand how to think about the profitability of the business over a cycle, where you think kind of the core returns or return on equity could be for that business over the longer term? Because as you lean into originations later this year, presumably next year, that does come with that higher CECL reserve charge at first, and it sounds like you’re going to be building out and adding on some products, which probably first will cost some money.
So just trying to think through what you think the profitability metrics and returns are for that business.
Joe Fisher: You’re right, Jeff, to bring it into the CECL accounting here. The more successful we are in terms of the refi environment, the higher provision that it’s taken so that impacts the current year. So ultimately, I think it’s a good projection of where we’re headed. So as we think about the current environment we’re in and the growth potential that’s going to lead to, obviously, future growth down the line in ’25 and ’26. But if there is a dramatic downturn in rates, and we have that opportunity to originate more loans that would put pressure on the current year’s income just because we have a higher provision because of the life of loan reserve that we have to take. So it’s a good way to think about it is that if you think about just the interest rate environment last year and the shift, we would have had even higher net interest income coming into this year, but because of the higher interest rates, it’s been about that $200 million in run rate, but the opportunity for growth going forward is going to be primarily driven on the refi side by the opportunities here in the projected rate environment.
David Yowan: Jeff, I would just add, I’d encourage you to look, as I know, you did at 16 and 17 as well because 16 talks about the overall efficiency of loan originations from a cost of acquisition from a servicing cost and from a reserving perspective. And then 17 by breaking out the marketing expense, obviously, that’s going to be variable with our cost of acquisition, but we’re — you can see it on page 17 actually the operating leverage — positive operating leverage that Ed referred to implicit in the kind of distribution model that Earnest has. So there’s a temporary — there’ll be an increase in marketing expense and provision expense, excuse me, with higher originations, we’ll get some operating leverage on the — we expect to continue to have operating leverage on that other line. And obviously, those originations are building a revenue stream to increasingly fund additional originations or some of the growth strategies that we’re talking about.
Jeffrey Adelson: Okay. Great. And as my follow-up, I just want to circle back on John’s question on the cost to outsource. I know you’re discussing how it’s netted out of the number and then you’re moving to a more variable cost model there. But could you maybe help us understand what — how to quantify what that cost outsource is?
David Yowan: Yes. So, look, I think we’ve said a couple of things that I’d just refer you to. First of all, when we did the outsourcing or the RFP exercise, we did find that our current cost is comparable. And so we’re not pointing you or guiding you to look to a significant reduction in servicing expense in the near term. We won’t be pointing to that and you shouldn’t look and find that. But if you go to the loan cash flow page that we have and think about the tenure of the portfolio that we have over the lifetime of that loan, having our servicing cost 100% variable versus a mixture of fixed and variable, we think, has some really powerful operating leverage to us over the remaining life of the franchise. And I’ll just leave it at that. It’s a question of — it’s not a lower unit cost. It’s a different mix between fixed and variable that drives operating leverage that’s not present in our current cost structure and our current servicing model.
Jeffrey Adelson: Got it. Thank you for taking my questions.
Operator: Thank you. And that is all the time that we have for questions today. I’ll turn the call back over to Mr. Jen Earyes for closing remarks.
Jen Earyes: Thanks, Narma. I know that there are remaining questions that we have not been able to deal this morning. So please contact me if we were not able to take your question or if we were, if you have any other follow-up questions, happy to chat. We’d like to thank everyone for joining on today’s call. This concludes our call. Thank you.
