Ebrahim Poonawala: Got it. And I guess just separately around the outlook for fee revenues. So you — I think Andy addressed that in his prepared remarks. But give us a sense of any — what areas you’re seeing momentum on the fee revenue side? And whether there’s any room for sort of upside surprise if we get additional negative guide downs on NII? Thank you.
John Stern: Yeah, sure. So I mean, overall, we feel very — we’re pleased with the quarter one results. We saw good account growth. We’re deepening relationships. We continue to see progress on Union and the growth opportunities that we see there, consumer spending metrics, all the underlying metrics are strong, capital markets activities are strong. And that is supportive of our continual view on mid-single-digit growth on the fee aspect of things. Areas that we see growth, you know, we particularly have seen that in the capital market space. We had extremely strong fixed-income capital markets activity, a lot of issuance that came to market and our franchise absolutely benefited from that. Mortgage has continued to be strong in terms of — even though applications and production has been lower on a year-over-year basis.
We’re actually seeing much wider spreads just given the areas that we’re focusing on. And that’s just a constant theme of how we’re focusing on more return on equity or higher returns overall. And then the Payments business continues to do well and be in line with our expectations. And so — and that’s just drive — that helps us support the payments ecosystem that we have and all the initiatives and investments that we’ve made over time. So all that is very much coming together and we feel very, very comfortable about our fee outlook.
Ebrahim Poonawala: Okay. Thank you.
John Stern: Thanks, Ebrahim.
Operator: Your next question comes from the line of John McDonald with Autonomous Research. Your line is open.
John McDonald: Thanks. Good morning.
John Stern: Good morning, John.
John McDonald: How are you thinking about the outlook for net charge-offs and provision and just kind of the credit trends you saw this quarter? John, you mentioned there was the one idiosyncratic commercial. Other than that, you know, kind of what are you seeing? And you’re still kind of thinking about a mid-50s kind of net charge-off outlook for this year would be helpful. Thanks.
Terry Dolan: Yeah, John, this is Terry. Let me take that question. So when we end up looking at credit, again, credit generally is pretty strong. I think that we’re continuing to see in non-performing assets that will continue to tick up and did tick up in the first quarter. It’s primarily related to commercial real estate office space. And, you know, I think when we think about kind of the rest of the year, you know, probably in the second quarter, it’s going to tick up a bit more, but then that growth rate is going to really moderate quite a bit. You know, the thing to keep in mind with respect to the commercial real estate office space is that we’ve aggressively reserved for that. We feel like we’ve adequately covered the lost content that’s in that portfolio.
So, you know, even though NPAs are likely to tick up, you know, we don’t see that as a real impact from a P&L standpoint. From a charge-off point of view, you know, in the first quarter, that’s principally driven by just credit cards. And our expectation is that will probably in the second quarter also come up. But then on a full-year basis, you know, the charge-off rate that we would expect in credit cards is probably going to move up a bit in the second quarter and then start to moderate downward again. On a full-year basis, we would expect, you know, that charge-off rate to be pretty similar to the charge-off rate that we see in the first quarter of about $4.25.
John McDonald: Okay. Got it. And then for the overall company kind of still kind of trending to that mid-50s perhaps on the charge-offs?
Terry Dolan: Yeah. I would say mid-50s perhaps maybe closer to the 60 basis points. And again, I think that it’s going to be a little bit lumpy because of, you know, just timing of commercial real estate charge-offs that will occur through the year. But again, we feel like we’ve adequately reserved for it.
John McDonald: Got it. Okay. Great. And then, Andy, how are you thinking about the expense flex? You mentioned, you know, offsetting the NII. I guess within reason, you’re going to flex the expenses depending on the revenue environment plays out through the year.
Andrew Cecere: Yeah, John. So it is a — an environment that it’s always important to look at efficiencies and we’re — that’s something we’re very focused on. And it is in those areas we talked about. We’ll continue to flex where we see opportunities. We’ve centralized operations. We have other opportunities in spend. It’s a company-wide initiative and we’ll continue to focus on that. Again, importantly, though, I want to tell you, John, that we’re still investing, but we’re looking at operational efficiencies as we deliver our products and services while continuing investments because the investments we’ve made is helping us with the efficiencies on a go-forward basis.
John McDonald: Got it. Thank you.
Andrew Cecere: You bet.
Operator: Your next question comes from the line of Betsy Graseck with Morgan Stanley. Your line is open.
Betsy Graseck: Hi. Good morning.
Andrew Cecere: Welcome back, Betsy.
Betsy Graseck: Thanks so much. So I had a follow-up on the comments around corporate behavior in the deposit shift from NIB. I just want to understand two things. One is it — do you see your corporate deposits shifting from NIB to IB? Or is it more NIB to MMF? And then separately, typically corporates are in NIB because it’s compensating balances for other services. So as this shift is going on, does it suggest that we’re going to see an uptick in, say, for example, treasury services or any of the other fee lines?
