They’re swapped to maturity from a rate standpoint, and they’ve got good economic risk. But we’re trying to stay focused on their ability to exit at maturity, and so we’re looking and making sure we fully understand that, so that drove the increase in NPLs. And then we did recognize that with six bp increase in our allowance. And so our office allocation is up six point overall, so we feel really good about that. So again, I would say the takeaway is worked really hard to make sure we have good visibility in the portfolio. And the good news is our overall guidance for losses really didn’t change. We included our student loan impact for Q2, but we maintain otherwise, our loss guidance for the year.
John McDonald: Got it. And maybe just as a follow-up, Clarke. What should we think about in terms of maybe the charge-off trajectory in the back half of the year that’s embedded in the guidance relative to the 42, I guess, jumping off point here.
Clarke Starnes: Yes. Again, we’re very confident we’ll be within the range of 40 to 50 for the entire year. And I would just remind you all that the second half of the year is always seasonally high in our Consumer businesses, particularly in our subprime auto, and so that’s why you see the range stay in the 40 to 50 range, so it will be higher than Q2, but within the guidance we’ve given you.
John McDonald: Okay. Thank you.
Operator: We’ll move to our next question from John Pancari with Evercore ISI. Please go ahead.
John Pancari: Good morning. On the efficiency side of things, I know I heard you around the efficiency program that you’re working on and looking to bend the cost curve. How should we think about long-term efficiency for the company? As you’re looking at this program, as you’re looking at this quarter being the inflection and the — you’re apparently clearly looking at across businesses. How should we think about what the prudent, what the appropriate efficiency ratio is from a long-term perspective that you’re likely to target here? Thanks.
Bill Rogers: Hey, John, this is Bill. I’ll take that. What I said was, obviously, is that the expense growth is going to decrease materially, so that’s what we’re going to see. And then the absolute expense base related to our businesses. I think the way to think about it, and this was very similar sort of how we came out of the merger is we should be sort of top quartile efficiency ratio. So the efficiency ratio is kind of be a bit determined by a little bit of the market conditions where rates are. But our business model, our construct, things that we’re engaged in, I think rather than sort of honing in on a specific number because I think that’s sort of boxes you in, so to speak, in terms of business mix and those type of things.
I think really hone in on the expectation from shareholders ought to be that we ought to be sort of top quartile from an efficiency ratio given the opportunities that we have, both on the revenue side, and then the diversity and construct of our business mix.
John Pancari: Okay. Thanks, Bill. That’s helpful. And then on the credit side, I appreciate the color you just gave around the non-accruals. Can you give us your thoughts around additional reserve additions here? Is it likely that you still see some incremental build there? And then what — where does the commercial real estate reserves stand right now, the ratio and the same for the office commercial real estate reserve? Thanks.
