Q4 2024 JPMorgan Chase & Co Earnings Call

Unknown Executive: Good morning, ladies and gentlemen. Welcome to JP Morgan Chase's fourth quarter 2024 earnings call. This call is being recorded.

Good morning, ladies and gentlemen, welcome to Jpmorgan Chase's fourth quarter 2024 earnings call. This call is being recorded your line will be muted for the duration of the call. We will now go live to the presentation. The presentation is available on J P. Morgan Chase's web site.

Unknown Executive: Your line will be muted for the duration of the call.

Unknown Executive: We will now go live to the The presentation is available on JPMorgan Chase's website. Please refer to the disclaimer in the back concerning forward-looking statements. Please stand by.

Please refer to the disclaimer and the back concerning forward looking statements. Please standby.

Unknown Executive: At this time, I would like to turn the call over to JP Morgan Chase's Chairman and CEO, Jamie Dimon, and Chief Financial Officer, Jeremy Barnum.

Speaker Change: At this time I would like to turn the call over to J P. Morgan Chase's, Chairman and CEO, Jamie Diamond and Chief Financial Officer, Jeremy Barnum Mr. Barnum. Please go ahead.

Jeremy Barnum: Mr. Barnum, please go ahead.

Jeremy Barnum: Thank you and good morning everyone. Starting on page 1, the firm reported net income of $14 billion, EPS of $4.81, on revenue of $43.7 billion, with an ROTCE of 21%. On page two, we have more on our fourth quarter results. The firm reported revenue of $43.7 billion, up $3.8 billion, or 10% year-on-year. NIIX markets was down $548 million, or 2%, driven by the impact of lower rates and the associated deposit margin compression, as well as lower deposit balances and CCB, largely offset by the impact of securities reinvestment, higher revolving balances in CARD, and higher wholesale deposit balance.

Speaker Change: Thank you and good morning, everyone.

Speaker Change: Starting on page one the firm reported net income of $14 billion EPS of $4 81.

Speaker Change: $43 7 billion with an R O G C E a 21%.

On page two we have more on our fourth quarter results.

Speaker Change: The firm reported revenue of $43 7 billion up $3 8 billion or 10% year on year.

Speaker Change: Mortgage was down 548 million or 2% driven by the impact of lower rates and the associated deposit margin compression as well as lower deposit balances and CCP largely offset by the impact of securities reinvestment higher revolving balances in card and higher wholesale deposit balances.

Jeremy Barnum: NIRX markets was up 3.1 billion or 30%, excluding the prior year's net investment securities losses, it was up 21%, largely on higher asset management fees and investment banking. And market's revenue was up 1.2 billion or 21%. Expenses of $22.8 billion were down $1.7 billion, or 7% year-on-year. Excluding the prior year's FDIC special assessment, expenses were up $1.2 billion, or 5%, predominantly driven by compensation, as well as higher brokerage and distribution. And credit costs were $2.6 billion, reflecting net charge-offs of $2.4 billion and a net reserve of $267 million.

Speaker Change: I Rx market was up $3 1 billion or 30%.

Speaker Change: Excluding the prior year's net investment Securities losses, It was up 21% largely on higher asset management fees and investment banking fees and markets revenue was up $1 2 billion or 21%.

Speaker Change: Expenses of $22 8 billion or down $1 7 billion or 7% year on year, excluding the prior year's FDIC Special assessment expenses were up $1 2 billion or 5% predominantly driven by compensation as well as higher brokerage and distribution fees and credit costs were $2 6 billion, reflecting.

Speaker Change: Net charge offs of $2 4 billion and in that reserve of $267 million.

Jeremy Barnum: On page 3, you can see the reported results for the full year. I'll remind you that there were a number of significant items in 2024. Excluding those items, the firm reported net income of $54 billion, EPS of $18.22, revenue of $173 billion, and we delivered an ROTCE of 20%. Touching on a couple of highlights for the year, in CCB, we had a record number of first-time investors and acquired nearly 10 million new card accounts. CIB we had record revenue and markets payments and security And in AWM, we had record long-term net inflows of $234 billion, positive across all channels, regions, and asset classes.

Speaker Change: On page three you can see the reported results for the full year.

Speaker Change: I'll remind you that there were a number of significant items in 2024, excluding those items. The firm reported net income of 54 billion EPS of $18 22 sons revenue of 173 billion and we delivered an <unk> of 20%.

Speaker Change: Touching on a couple of highlights for the year and CCP, we had a record number of first time investors and acquired nearly 10 million new card accounts.

Speaker Change: We had record revenue in markets payments and security services, and then AWS and we had a record long term net inflows of 234 billion positive across all channels regions and asset classes.

Jeremy Barnum: Onto Ballantyne and Capital on page 4. We ended the quarter with a CG1 ratio of 15.7%, up 40 basis points versus the prior quarter, as net income and lower RWA were largely offset by both OCI losses and capital distributions, which included $4 billion of net common share repurchases this quarter. The $24 billion decrease in RWA reflects a seasonal decline in markets activity and lower wholesale lending, which was predominantly offset by a seasonal increase in CARs.

Speaker Change: On the balance sheet and capital on page four.

Speaker Change: We ended the quarter with a CET one ratio of 15, 7% up 40 basis points versus the prior quarter as net income and lower art of UA were largely offset by both OCI losses and capital distributions, which included $4 billion of not common share repurchases this quarter.

Speaker Change: The 24 billion decrease in our Wi reflects a seasonal decline in markets activity and lower wholesale lending, which was predominantly offset by a seasonal increase in card.

Jeremy Barnum: Now let's go to our businesses, starting with CCB on page 5. TCB reported net income of $4.5 billion on revenue of $18.4 billion, which was up 1% year-on-year. In banking and wealth management, revenue was down 7% year-on-year on deposit margin compression and lower deposits, partially offset by growth in wealth management. Average deposits were down 4% year-on-year and flashed sequentially as consumer balances have stabilized. Client investment assets were up 14% year-on-year, predominantly driven by market performance, and we continue to see healthy flows across branch and digital channels.

Speaker Change: Now, let's go to our businesses starting with GCB on page five.

Speaker Change: <unk> reported net income of $4 5 billion on revenue of $18 4 billion, which was up 1% year on year.

Speaker Change: In banking and wealth management revenue was down 7% year on year on deposit margin compression and lower deposits, partially offset by growth in wealth management right.

Speaker Change: Average deposits were down 4% year on year and flat sequentially as consumer balances have stabilized.

Speaker Change: Client investment assets were up 14% year on year predominantly driven by market performance and we continue to see healthy flows across our branch and digital channels.

Jeremy Barnum: and Home Lending. Revenue was up 12% year on year, predominantly driven by our production revenue. Turning to card services and auto, revenue was up 14% year-on-year, largely driven by card NII on higher withholding balance. Cardiff standings were up 11% due to strong account acquisition and revolving. And then auto originations were 10.6 billion up 7% reflecting higher lease volume on robust new vehicle inventory. Expenses of $9.7 billion were up 4% year-on-year, predominantly driven by field compensation and growth in technology. In terms of credit performance this quarter, credit costs were $2.6 billion, reflecting net charge-offs of $2.1 billion, of $428 million year-on-year, driven by card.

Speaker Change: And home lending revenue was up 12% year on year predominantly driven by higher production revenue.

Speaker Change: Turning to card services and auto revenue was up 14% year on year, largely driven by card NII on higher holding balances.

Speaker Change: Card Outstandings were up 11% due to strong account acquisition and revolver.

Speaker Change: And then auto originations were $10 6 billion up 7%, reflecting higher lease volumes and robust new vehicle inventory.

Speaker Change: Expenses of $9 7 billion were up 4% year on year predominantly driven by field compensation in growth and technology.

Speaker Change: On credit performance this quarter credit costs were $2 6 billion, reflecting net charge offs of $2 1 billion or $428 million year on year driven by car.

Jeremy Barnum: The net reserve bill was $557 million, predominantly driven by higher card revolving balances.

Speaker Change: And that reserve build was 557 million predominantly driven by higher card revolving balances.

Jeremy Barnum: Next, the Commercial and Investment Bank on page six. CIV reported net income of $6.6 billion on revenue of $17.6 billion. IVPs were up 49% year-on-year, and we ranked number one with wallet share of 9.3% for 2024. Advisory fees were up 41%, benefiting from large deals and share growth in a number of key sectors. Underwriting fees were up meaningfully, with debt up 56% and equity up 54%, primarily driven by favorable market conditions. In terms of the outlook for the overall investment banking wallet, in light of the positive momentum, we remain optimistic about our pipeline. Payments revenue was $4.7 billion, up 3% year on year, excluding equity investments, driven by higher deposit balances and fee growth, largely offset by deposit margin compression.

Speaker Change: The commercial and investment bank on page six.

Speaker Change: CIB reported net income of $6 6 billion on revenue of $17 six trillion IV fees were up 49% year on Europe, and we ranked number one with wallet share of nine 3% for 2024.

Speaker Change: Advisory fees were up 41% benefiting from large deals and share growth in a number of key sectors underwriting fees were up meaningfully without out 56% and equity up 54%, primarily driven by favorable market conditions in terms of the outlook for the overall investment banking wallet in light of.

The positive momentum we remain optimistic about our pipeline.

Speaker Change: Payments revenue was $4 7 billion up 3% year on year, excluding equity investments driven by higher deposit balances and fee growth largely offset by deposit margin compression.

Jeremy Barnum: Lending revenue was $1.9 billion of 9% year on year, predominantly driven by lower losses on hedging. Moving to markets, total revenue was $7 billion, up 21% year-on-year. Fixed income was up 20%, with better performance in credit, as well as continued outperformance in currencies and emerging markets. Equities was up 22% on elevated client activity and derivatives amid increased volatility and higher trading volumes in cash. Security Services Revenue was $1.3 billion, up 10% year-on-year, driven by fee growth on higher client activity and market levels, as well as higher deposit balance. Expenses of $8.7 billion were up 7% year-on-year, predominantly driven by higher brokerage, technology, and legal expenses.

Speaker Change: Lending revenue was $1 9 billion up 9% year on year predominantly driven by lower losses on hedges.

Speaker Change: Moving to markets total revenue was 7 billion up 21% year on year fixed income was up 20% with better performance in credit as well as continued outperformance in currencies in emerging markets.

Speaker Change: <unk> was up 22% on elevated client activity in derivatives amid increased volatility and higher trading volumes in cash.

Speaker Change: Security services revenue was $1 3 billion up 10% year on year, driven by fee growth on higher client activity and market levels as well as higher deposit balances.

Speaker Change: Expenses of $8 7 billion were up 7% year on year, predominantly driven by higher brokerage technology and legal expense.

Jeremy Barnum: Average banking and payments loans were down 2% year-on-year and down 1% sequentially. Global corporate and investment banking loans were down 2% quarter-on-quarter, driven by paydowns and lower short-term financing, primarily offset by new origination. Commercial Banking, Middle Market Loans were also down 2%, driven by paydowns, predominantly offset by new originations, and Commercial Real Estate Loans were flat as new originations were offset by paydowns.

Speaker Change: Average banking and payments loans were down 2% year on year and down 1% sequentially.

Speaker Change: Global corporate and investment banking loans were down 2% quarter on quarter, driven by pay downs lower short term financing, primarily offset by new originations.

Speaker Change: Commercial banking middle market loans were also down 2% driven by pay downs predominately offset by new originations in commercial real estate loans were flat as new originations were offset by pay downs.

Jeremy Barnum: Average client deposits were up 9% year-on-year and 5% sequentially, driven by underlying client Finally, credit costs were $61 million, driven by net downgrade activity and the net impact of charge-offs, offset, largely offset, by a reserve release due to an update to certain law systems. Then, to complete our lines of business, Asset and Wealth Management on page 7. AWM reported net income of $1.5 billion with pre-tax margin of 35%. Revenue of $5.8 billion was up 13% year on year, predominantly driven by growth and management fees on higher average market levels and strong net inflows, as well as higher performance Expenses of $3.8 billion were up 11% year-on-year, predominantly driven by higher compensation, including revenue-related compensation and continued growth in our private banking advisor teams, as well as higher distribution Long-term net inflows were $76 billion for the quarter, positive across all assets.

Speaker Change: Average client deposits were up 9% year on year, and 5% sequentially driven by underlying volume growth.

Speaker Change: Finally credit costs were $61 million driven by net downgrade activity and the net impact of charge offs offset largely offset by a reserve release due to an update of certain loss assumptions.

Speaker Change: Then to complete our lines of business asset and wealth management on page seven.

Speaker Change: AWS <unk> reported net income of $1 5 billion pretax margin of 35%.

Speaker Change: Revenue of $5 8 billion was up 13% year on year predominantly driven by growth in management fees on higher average market levels and strong net inflows as well as higher performance fees and expenses of $3 8 billion were up 11% year on year predominantly driven by higher compensation, including revenue related compensation.

Speaker Change: And continued growth in our private banking advisory teams as well as higher distribution fees.

Long term net inflows were <unk> 76 billion for the quarter positive across all asset classes.

Jeremy Barnum: In liquidity, we saw net inflows of $94 billion for the quarter and $104 billion for the full year. $140 billion for the full year. And we have a client asset that inflows of $468 billion. AUM of $4 trillion and client assets of $5.9 trillion were both up 18% year-on-year, driven by continued net inflows and higher market cap. And finally, loans were up 2% quarter on quarter and deposits were up 5%.

Speaker Change: Liquidity, we saw net inflows of 94 billion for the quarter and 104 billion for the full year 140 billion for the full year of sorry, we.

Speaker Change: We have client assets net inflows of 468 billion for the year.

Speaker Change: <unk> four trillion and client assets of $5 nine trillion were both up 18% year on year, driven by continued net inflows and higher market levels, and finally loans were up 2% quarter on quarter deposits were up 5% in quarter one.

Jeremy Barnum: Turning to corporate on page 8, corporate reported net income of $1.2 billion. Revenue of $2 billion was up $223 million year-on-year, and NII of $2 billion was down $415 million year-on-year, driven by the impact of lower rates, largely offset by balance sheet actions, primarily securities reinvestment. NIR was a net loss of $30 million compared to the net loss of $668 million in the prior year, driven by lower net investment securities losses this quarter. And expenses of $550 million were down $3 billion year-on-year, predominantly driven by the absence of the FDIC special assessment of $2.9 billion in the prior year.

Speaker Change: Turning to corporate on page eight.

Speaker Change: Corporate reported net income of $1 3 billion rather.

Speaker Change: Revenue of 2 billion was up $223 million year on year.

Speaker Change: NII of 2 billion was down 415 million year on year, driven by the impact of lower rates largely offset by balance sheet actions, primarily securities reinvestment activity.

Speaker Change: It was a net loss of 30 million compared with a net loss of $668 million in the prior year driven by lower net investment securities losses, this quarter and.

Speaker Change: <unk> expenses of $550 million were down 3 billion year on year predominantly driven by the absence of the FDIC special assessment of $2 9 billion in the prior year.

Jeremy Barnum: With that, let's pivot to the outlook starting with NII on page We expect 2025 NIIX markets to be approximately 90 billion. Going through the drivers, as usual, the outlook assumes that rates follow the forward curve. It's worth noting that the NII decrease is driven by both the cut expected in 2025 and the impact of the 100 basis points of cuts in the back half of 2025. You can see on the page that we've illustrated the historical trajectory of CARD loan growth. We expect healthy CARD loan growth again this year, but below the 12% pace we saw in 2024, as tailwinds from revolved normalization are largely behind.

Speaker Change: With that let's pivot to the outlook starting with NII on page nine.

Speaker Change: We expect 2025, NII ex markets to be approximately $90 million.

Speaker Change: Going through the drivers as usual the outlook assumes that rates follow the forward curve.

Speaker Change: Worth, noting that the NII decrease is driven by both the cod expected in 2025 and the impact of the 100 basis points of cuts in the back half of 2024.

Speaker Change: You can see on the page that we've illustrated the historical trajectory of card loan growth, we expect healthy card loan growth again, this year, but below the 12% pace. We saw in 2024 as tailwind from revolve normalization are largely behind us.

Jeremy Barnum: Turning to deposits, firm-wide deposits have stabilized and we expect to see a more visible growth trend assert itself in the second half of 2025. It's notable that we can already see that trend in consumer checking. On deposit margin, we expect modest compression due to lower rates. When you put all that together, we expect the NII trough could be sometime in the middle of the year, followed by growth as we illustrated at the bottom of the bar. And for completeness, we expect firm-wide NII to be approximately 94 billion as a function of markets NII increasing to about 4 billion, which you should think of as being primarily offset in NII.

Speaker Change: Turning to deposits firm wide deposits have stabilized and we expect to see a more visible growth trying to assert itself in the second half of 2020, but it's notable that we can already see that trend in consumer checking deposits on deposit margin, we expect modest compression due to lower rates.

Speaker Change: When you put all that together, we expect the NII trough could be sometime in the middle of the year followed by growth as we illustrated at the bottom of the bar for completeness, we expect worldwide NII to be approximately 94 billion as a function of markets on NII, increasing to about 4 billion, which you should think of as being primarily.

Speaker Change: Offset in NAR.

Jeremy Barnum: Finally, I want to point out that starting this quarter, we are including an estimate of earnings at risk in the earnings supplement, so you no longer have to wait for the K or the Q to get that value.

Speaker Change: Finally, I want to point out that starting this quarter, we are including an estimate of earnings at risk in the earnings supplement. So you no longer have to wait for the K or the Q to get that number.

Jeremy Barnum: Now, let's turn to expenses on page 10. We expect 2025 expense to be about $95 billion. Looking at the chart in the middle of the page, I'll touch on the drivers of the year-on-year change, which you'll note are very consistent with what you've been hearing from us recently. The largest increase is volume and revenue related expense, which is primarily driven by expected growth in auto leasing, as well as capital markets. As a reminder, this comes with higher revenue. We continue to hire bankers and advisors to support business growth, as well as expand our branch network.

Speaker Change: Now, let's turn to expenses on page 10.

Speaker Change: We expect 2025 expense to be about 95 billion.

Speaker Change: Looking at the chart in the middle of the page I'll touch on the drivers of the year on year change, which Youll note are very consistent with what <unk> been hearing from us recently.

Speaker Change: The largest increase as volume and revenue related expense, which was primarily driven by expected growth in auto leasing as well as capital markets.

Speaker Change: Minder. This comes with higher revenues, we continued to hire bankers and advisors to support business growth as well as expand our branch network the.

Jeremy Barnum: The increase in tech spend is primarily business-driven as we continue to invest in new products, features, and customer platforms, as well as modernization. Marketing remains a driver of expand as we continue to see attractive opportunities resulting in strong demand and engagement in our car business. And finally, while we haven't explicitly called it out on each bar, inflation remains a source of some upward pressure. And as always, we are generating efficiencies to help offset.

Speaker Change: The increase in tax spend is primarily business driven as we continue to invest in new products features and customer platforms as well as modernization.

Speaker Change: Marketing remains a driver of spend as we continue to see attractive opportunities, resulting in strong demand and engagement in our card business and finally, while we haven't explicitly called it out on each bar inflation remains a source of some upward pressure and as always we are generating efficiencies to help offset it.

Jeremy Barnum: Now, let's turn to page 11 to cover credit and wrap up. On credit, we expect the 2025 card net charge-off rate to be in line with our previous guidance of approximately 3.5%.

Speaker Change: Now, let's turn to page 11 to cover credit and wrap up.

Speaker Change: Credit we expect the 2025 card net charge off rate to be in line with our previous guidance of approximately three 6%.

Jeremy Barnum: So in closing, 2024 was another year of record revenue and net income, and we're proud of what we accomplished. As we look ahead to 2025, we still expect NII normalization, although to a lesser extent than we previously thought. And taking a step back, we think it's important to acknowledge the tension, the risks and uncertainties in the environment, and the degree of optimism embedded in asset prices and expectations. In that context, we remain upbeat about the strength of the franchise, but we are focused on being prepared for a wide range of scenarios.

Speaker Change: So in closing 2024, it was another year of record revenue and net income and we're proud of what we accomplished as we look ahead to 2025, we still expect NII normalization, although to a lesser extent than we previously thought and taking a step back we think it's important to acknowledge the tension and the risks in them.

Speaker Change: Certainties in the environment and the degree of optimism embedded in asset prices and expectations not context, we remain upbeat about the strength of the franchise, but we are focused on being prepared for a wide range of scenarios.

Jeremy Barnum: Finally, let me say a few words about the wildfires in Los Angeles. While we don't expect much of a financial impact from it, we have a presence in the area across all three lines of business, so we're keeping in close contact with our customers, clients, and employees. We are offering support in a variety of ways, including waiving consumer and business banking fees, as well as making a contribution to local relief organizations, offering employee donation matching, and supporting employee volunteer efforts.

Speaker Change: Finally, let me say a few words about the wildfires in Los Angeles.

Speaker Change: Don't expect much of a financial impact from it we have a presence in the area across all three lines of business. So we're keeping in close contact with our customers.

Speaker Change: And employees, we are offering support and a variety of ways, including waiving consumer and business banking fees as well as making a contribution to local relief organizations offering employee donation matching and supporting and play volunteer efforts.

James Dimon: With that, I'll turn it over to Jamie before we open up the line for Q&A. Good morning, everybody. I just want to point out that Daniel Pinto is not leaving the company yet. So it's premature. I just want to say, I'd be remiss not to say, here's a young man who joined the company at 20 years old in Argentina. He ran trading in Argentina. Then he ran trading for Latin America. Then he ran global emerging markets trading. Then he ran fixed income trading. And then became co-head of the investment bank and the sole head of the investment bank for 10 years.

Speaker Change: With that I'll turn it over to Jamie before we open up the line for Q&A.

Jamie Dimon: Hey, good morning, everybody.

Speaker Change: I just want to point out the Daniel Pinto is not leaving the company yet.

Speaker Change: So it's premature but I just wanted to say I'd be remiss not to say there is a young man who joined the company 20 years old in Argentina. He ran trading in Argentina. When you were trading for Latin America. They ran global emerging markets, creating many ran fixed income trading and then became a co head of the.

Speaker Change: Investment banking is sold.

Speaker Change: Bank for 10 years, but over that whole time, helping build one of the great great investment banks in the world and so and then obviously he was president for five years or more great part remind trusted by everyone at the company and so we're thrilled to have his skills and talents going forward, but I. Just wanted you to recognize their contributions he made.

James Dimon: Over that whole time, helped him build one of the great, great investment banks in the world. And then obviously he was president for five years or more, a great partner of mine, trusted by everyone at the company. So we're thrilled to have his skills and talents going forward. But I just wanted to recognize the contributions he made. Great. All right.

Speaker Change: Great Alright, so let's go to questions.

Unknown Executive: So let's go to questions. Thank you. Please stand by.

Speaker Change: Thank you please standby.

Yeah.

John Mcdonald: Our first question comes from John McDonald with Truist Securities, you may proceed. Hi, good morning. Jeremy, I wanted to ask about capital, and I know you get this question a lot about the kind of high-class dilemma of your growing capital base and your perspective of that as earnings in store.

Speaker Change: Our first question comes from John Mcdonald with Euro six.

Speaker Change: <unk> you May proceed.

John Mcdonald: Hi, good morning.

Speaker Change: Jeremy wanted to ask about capital and I know you get this question a lot about the kind of high class dilemma of Youre growing capital base and your perspective of that as earnings in store. So I guess, what's the framework for thinking about the opportunity cost of sitting on the growing base of capital and how high you might let that go versus your patience in waiting for a more attractive.

Jeremy Barnum: So I guess what's the framework for thinking about the opportunity cost of sitting on the growing base of capital and how high you might let that go versus, you know, your patience and waiting for a more attractive deployment? Yeah, good question, John. And welcome back, by the way. Welcome back, John. Read your opinion the other day. It took me quite a while, but it was good work. So, yeah, you've noted all the points that we always make, so I won't repeat them. And I think that the way we're thinking about it right now is that we feel very comfortable with the notion that it makes sense for us to have, you know, a nice store of extra capital in light of the current environment.

John Mcdonald: <unk> deployment opportunities.

John Mcdonald: Yes, good question, John and welcome back by the way.

John Mcdonald: Thanks, John.

John Mcdonald: The other day to be quite a while but it was good work.

John Mcdonald: Okay.

John Mcdonald: So yes, you have noted all of us that we always make so I won't repeat them and I think the way we're thinking about it right now is that we feel very comfortable with the notion that it makes sense for us to have.

John Mcdonald: Nice.

John Mcdonald: Store of extra capital in light of the current environment, We believe theres a good chance that there'll be a moment, where we get to deploy edge.

Jeremy Barnum: We believe there's a good chance that there will be a moment where we get to deploy it, you know, at better levels, essentially, in whatever way than the current opportunities would suggest. And so that feels like a correct... Having said that, you know, having studied it quite extensively over the last six months and had all these debates that you would expect, we've concluded that we do have enough, you know, we have enough access. And given that, you know, we would like to not have the access grow. So when you think about the implications of that, given the amount of organic capital generation that we're producing, it means that unless, you know, we find in the near term opportunities for organic deployment or otherwise, it means more capital return, you know, through buybacks, all else being equal in order to arrest the growth of the excess.

John Mcdonald: I better levels, essentially whatever way than the current opportunities would suggest and so that feels like a correct kind of strategic and financial decision process, having said that.

John Mcdonald: Having studied that quite extensively over the last six months and how all of these debates that you would expect.

John Mcdonald: We concluded that we do have enough.

John Mcdonald: Have enough excess and given that.

John Mcdonald: We would like to not have the access to grow from here. So when you think about the implications of that given the amount of organic capital generation that we're producing it means that unless we find in the near term opportunities for organic deployment or otherwise.

John Mcdonald: It means more capital return through buybacks, all else being equal in order to arrest the growth of the access and that is our current plan I'll give the caveat that as you know is in our disclosure, which is we don't want to get into the business of guiding on buybacks and we reserve the right to change the trajectory at any time for any <unk>.

Jeremy Barnum: And that is our current plan, although I'll give the caveat that, as you know, is in our disclosure, which is we don't want to get in the business of guiding on buybacks and we reserve the right to change the trajectory, you know, at any time for any reason, but that is our current plan.

John Mcdonald: But that is our current thinking.

John Mcdonald: Okay, thanks, Jeremy.

Speaker Change: Okay. Thanks, Jeremy and then just as a follow up we think about the investment spend agenda. This year, how does it differ from say last year or last couple of years across lines of business. In this kind of certainty of return spectrum you've talked about.

Jeremy Barnum: And then just as a follow-up, when we think about the investment spend agenda this year, how does it differ from, say, last year or the last couple years across lines of business and this kind of certainty of return spectrum you've talked about? And then what kind of efficiencies are baked into, you know, the outlook as well?

John Mcdonald: And then what kind of efficiencies are baked into the outlook as well. Thanks.

Jeremy Barnum: Sure. I mean, the truth is, and I guess this is a good thing, that the themes are remarkably consistent. So, you know, we are seeing the results of our kind of high-certainty investment choices across all the categories that you know very well and that we highlighted on the Outlook page for expenses, and those continue to be the main areas of focus. You know, the execution gets tweaked at the margin as we pursue different opportunities. You know, commercial investment bank, we continue drilling down and analyzing into the relative pockets of weakness that you might see if you go a level or two below the very significant, significantly strong share positions that you see on an aggregate level.

Sure I mean, the truth is I guess this is a good thing that the teams are remarkably consistent. So we are seeing the results of our kind of high certainty investment choices across all the categories that you know very well that we highlighted on the outlook page for expenses and those.

John Mcdonald: <unk> to be the main areas of focus you know the execution guests create at the margin as we pursue different opportunities.

John Mcdonald: <unk> investment bank, we continue drilling down and analyzing it to the relative pockets of weakness that you might see if you go a level or two below the very significant significantly strong share position that you see on an aggregate level.

Jeremy Barnum: You know, Daniel always talked about the reds and the ambers that are behind the greens, and that's embedded in the culture of the company. So, we do that everywhere and continue analyzing and iterating, and we throw resources against that stuff as we do that.

John Mcdonald: <unk> talked about the Reds and the <unk> that are behind the Greens and Thats embedded in the culture of the company as we do that everywhere and continue analyzing and Iterating and we throw resources against that stuff as we do that broadly the themes are very consistent.

Jeremy Barnum: But broadly, the themes... I think in terms of efficiency, a couple things to say, which you know well. One is, when we think about efficiency and how we've generated it at this company, it's organic, it's BAU, it's evergreen, it happens every day in all the teams, everywhere. And so that is sort of part of the bottoms-up culture, and that... We do have, you know, a few top-down areas of focus. I think if I go, for example, on technology for starters, we're putting a lot of effort into improving the sort of ability of our software engineers to be productive as they do development, and there's been a lot of focus on that, the development environment for them, in order to enable them to be more productive.

John Mcdonald: I think in terms of efficiency, a couple of things to say, which which you know well one is why do we think about efficiency and how we've generated at this company. It's organic it's VA you. It's evergreen it happens every day and all the teams everywhere and so that is sort of part of the bottoms up culture and that remains the case we.

John Mcdonald: We do have a few top down areas of focus I think if I go for example.

John Mcdonald: Technology for starters, we're putting a lot of effort into improving.

John Mcdonald: The ability of our software engineers to be productive as they do development and there's been a lot of focus on on the development environment for them in order to enable them to be more productive and so all else equal that.

Jeremy Barnum: And so all else equal, that generates a little bit of efficiency. We also have a lot of focus on the efficiency of our hardware utilization, and so that's embedded in there as well. And another thing that's worth noting, you'll recall that on Investor Day, excuse me, I talked about how we had probably reached peak modernization spend. Now, as Jamie always says, we're always modernizing, so the fact that we've gotten to a peak and that it might come down a little bit from here still means we're going to be constantly modernizing.

John Mcdonald: That generates a little bit of efficiency. We also have a lot of attention a lot of focus on the efficiency of our hardware utilization.

John Mcdonald: So that's embedded in there as well.

Speaker Change: And another thing Thats worth, noting youll recall that at Investor Day, excuse me I talked about how we had probably reached peak modernization spend now as Jamie says, we're always modernizing so the fact that we've gotten to a peak in that it might come down a little bit from here still means we're gonna be constantly modernizing but at the margin that means that.

Jeremy Barnum: But at the margin, that means that inside the tech teams, there's a little bit of capacity that gets freed up to focus on, you know, features and new product development and so on, which is also, in some sense, a Finally, though, what I would say is that, you know, if you look at the headcount trajectory of the company over the last few years, we have grown a lot. And it's been for very good reasons, and it has contributed quite a bit to our growth and our ability to run the company efficiently. But anytime you have that quantum of headcount growth, as well as that rate of headcount growth, you have to believe all else equal that some amount of Overview have that lead to people generating, you know, internal efficiency.

Speaker Change: Inside the tech teams there was a little bit of capacity that gets freed up to focus on features and new product development and so on which is also in some sense a form of efficiency finally, though what I would say is that.

Speaker Change: If you look at the head count trajectory of the company over the last few years, we have grown a lot.

Speaker Change: It has been for very good reasons. It has contributed quite a bit to our growth and our ability to run the company efficiently, but anytime you have that launch.

Speaker Change: Head count growth as well as that rate of headcount growth you have to believe all else equal that some amount of inefficiency has been introduced and so this year as we went through the budget cycle. We asked people at the margin to try to support the growth of the company while living within their means on the headcount front. So we're going to try to run.

Speaker Change: <unk> things with some important exceptions that I'll highlight in a second on roughly flat head count and have that lead to people generating internal efficiencies as they get creative with their teams and reconsider more efficient ways of doing things. The obvious exceptions are the ongoing areas of.

Jeremy Barnum: The Obvious Exceptions are the ongoing areas of high-certainty investment and growth, and also critical non-negotiable areas of risk and control, like cyber or whatever independent risk management needs to ensure that we're running the country.

Speaker Change: Hi, certainty investment growth, so obviously branches and bankers and so on and also critical non negotiable areas of risk and control like cyber or whatever independent risk management needs now to ensure that we're running the company safely. So that's how we're thinking about efficiency.

Jeremy Barnum: So that's how we're thinking about it.

Speaker Change: In a moment.

Speaker Change: Very helpful. Thank you.

Speaker Change: Okay.

Speaker Change: Thank you next we will go to the line of Mike Mayo from Wells Fargo Securities You May proceed.

Michael Mayo: Next we will go to the line of Mike Mayo from Wells Fargo Securities. You may proceed. Hi. Simple and then more difficult, I guess.

Hi, simple and then more difficult I guess, Jamie Who's your successor.

James Dimon: Jamie, who's your successor? And then the second question is, I know I asked the question at Investor Day, why not stay as CEO a little bit longer? I think what I'm hearing from investors now, it goes up and down, but I think investors would like you to stay. So why say you're going to stay less than five years? You're finally getting what you wanted, 15 years of your spaghetti chart about the regulatory structure and the unpredictability of capital requirements and the regulatory costs. And it seems like you're finally getting what you've been playing for. So why not stay around a bit longer if investors want you to do so?

Speaker Change: And then the second question is I know I asked the question at Investor Day.

Speaker Change: Why not stay as CEO, a little bit longer I think what I'm hearing from investors now does it goes up and down but I think investors would like you to stay to why say youre going to stay less than five years.

Speaker Change: You're finally, getting what you wanted out 15 years, if you're a spaghetti chart about the regulatory structure and the unpredictability of capital requirements and the regulatory cost and it seems like you're finally getting what you've been planning for so why not stay around a bit longer if investors want you to do so and what would you do otherwise anyway, you don't you don't play golf.

James Dimon: And what would you do otherwise anyway? You don't play golf. You aren't going to be Treasury Secretary. Seems like your work is your hobby, right? How much longer would you stay around? I do love what I do. And answering the second question first, look, we're on a path. The path is not just about me. It's about the other senior people in the company. It's about the board. If I'm here for several more years, and I may or may not be chairman of that, it's going to be up to the board. Does it really fit the new CEO and stuff like that?

Speaker Change: Can be Treasury Secretary.

Speaker Change: It seems like Youre your work as your hobby right. So.

Speaker Change: How much longer would you say around.

Speaker Change: I do love, what I do and answering the second question first yes. We're look we're on a path to path is not just about me. It's about the other senior people the companies about the board I'm here for several more years.

I may or may not be chairman, if that's going to be up to the board because it really fit the new CEO and stuff like that that you are talking potentially for five years or more I'm 60, I'll be 69 in March I guess, the rational thing to do I've got a couple of health problems. You know I just think it makes a lot of sense and so.

James Dimon: Now you're talking potentially four or five years or more. I'll be 69 in March. I think it's a rational thing to do. I've had a couple of health problems, you know. I just think it makes a lot of sense.

James Dimon: And so and what was your first question at the end? Who's your successor? I mean, I mean, this is an unfortunate thing for any big company like this where, you know, these people have to be in the spotlight all the time and all the toing and froing. We have several exceptional people. You guys know most of them. There's maybe one or two you don't know. The board reviews and meets with them all the time. I think it's wonderful that Jen Piepszak, who does not want to be the CEO, will be here as chief operating officer and stay after that.

Speaker Change: And your first question again.

Speaker Change: Your successor.

Speaker Change: I mean can visit.

Speaker Change: Unfortunate thing for any company like this.

Speaker Change: People have to be in the spotlight all the time and always doing in flooring. We have several exceptional people you guys know most maybe.

Speaker Change: Maybe one or two you don't know.

Speaker Change: The board reviews and meet with them all the time.

Speaker Change: Good.

Speaker Change: I think it's wonderful that <unk> does not want to be the CEO will be here as chief operating officer and state after that so obviously she is willing to work with those people regarding just gravy for a company, that's having continuity of management and leadership.

James Dimon: So obviously, she's willing to work for those people, which I think is great for a company that's having continuity of management and leadership. And it'll be one of those people. And, you know, obviously, we're not going to tell the press, but it's not determined yet. And, you know, of course, the last minute, a couple of years from now, people get sick, they change their mind, their family circumstances. So even if you thought you knew today, you could be completely sure. So you'll stay around maybe for a few more years, base case, right now? Yep, basic case.

It'll be one of those people and obviously, we're not going to tell the press is not determined yet in Europe of course.

Speaker Change: Last minute couple of years from now people get sick they changed their mind their family circumstances.

Speaker Change: Even if you thought you knew today could be completely sure.

Speaker Change: So you will stay around maybe for a few more years base case right now.

Speaker Change: Yes basic case, yes, alright, thank you.

James Dimon: Yeah. All right.

Speaker Change: Yeah.

Speaker Change: Thank you. Our next question comes from Jim Mitchell with Seaport Global Securities You May proceed.

Jim Mitchell: Our next question comes from Jim Mitchell with Seaport Global Securities. Hey, good morning.

Jim Mitchell: Hey, good morning, maybe.

James Dimon: Maybe just on regulation, you know, we have a new administration coming in, we have a new Soon to be, I guess, a new head of regulation at the Fed, so maybe just talk about, again, what areas of the regulatory structure, if it were to change, would be most impactful for you, and is there any areas where you think capital requirements could actually go down, or is this more of a story of requirements just simply stop going up? Thanks. Hey, Jim. I mean, it's obviously something we're thinking about a lot. But you know, I could go down some pretty deep rabbit holes speculating on all the different parts of the framework and how they could evolve.

Speaker Change: Maybe just on regulation, we have a new administration coming in we have a new.

Speaker Change: Soon to be I guess, a new head of regulation at the fed So maybe just talk about again what areas of the regulatory structure. If it were to change would be most impactful for you.

Speaker Change: Is there any areas, where you think capital requirements could actually go down or is this more of a story of requirements just simply stopped going up thanks.

Jim Mitchell: Hey, Jim.

Jim Mitchell: It's obviously something we're thinking about a lot.

Jim Mitchell: But I could go down some pretty deep rabbit hole speculating on all the different parts of the framework and how they could evolve and I just don't really think thats productive right now, but let me make some long time to answer your question so backing off a second.

James Dimon: And I just don't really think that's productive right now. But let me make some attempt to answer your question.

James Dimon: So backing off a second, you know, you read Jamie's quotes, they're very consistent with what we've been saying as a company for a long time, which is that all we want is a coherent, rational, holistically assessed regulatory framework that allows banks to do their job supporting the economy, that isn't reflexively anti-bank, that doesn't default to the answer to every question being more of everything, more capital, more liquidity. It uses data, and it balances the obvious goal that we all share, a safe and sound banking system, with actually recognizing that banks play a critical role in supporting growth.

Jim Mitchell: You read Jamie's quotes they're very consistent with what we've been saying as a company for a long time, which is that all we want is a coherent rational holistically assessed regulatory framework that allows banks to do their job supporting the economy isn't reflects <unk> anti bang it doesn't.

Jim Mitchell: Default to the answered every question being more of everything more capital more liquidity.

Jim Mitchell: Users data and it balances the obvious goal that we all share a safe and sound banking system with the actually recognizing the banks play a critical role in supporting growth and the hope is that we got some of that and that also while we're at it some aspects of the supervisory framework.

James Dimon: And the hope is that, you know, we get some of that.

James Dimon: And that also, while we're at it, some aspects of the supervisory framework get, you know, a little bit less bureaucratic and a little bit less adversarial and a little bit more substantive. so that, you know, at the margin, you know, management can focus its time on the things that matter the most. So whether capital goes up, down, stays flat, is really so complicated because it's not just Basel III endgame, it's also G-SIB, it's also a number of other factors, and that's why we keep hammering away on the importance of doing all of this holistically, properly, with the right analysis, and, you know, if that takes time, so be it.

Jim Mitchell: Got a little bit less bureaucratic and a little bit less adversarial and a little bit more substantive so that the margin.

Jim Mitchell: Management can focus at this time, all the things that matter most so.

Jim Mitchell: Whether a catalog goes off down stays flat is really so complicated because it's not just Basel III game. It's also G said, it's also a number of other factors and that's why we keep hammering away on the importance of doing all of this holistically properly with the right analysis.

Jim Mitchell: And that takes time Soviet.

James Dimon: Nice, great. Jeremy gave it all.

Jim Mitchell: No that's great Jeremy gave it all you had three quick things liquidity is also equally important he has been a lot of recognition that what counts with liquidity and discount windows and how else here have done I think it's very important second as competition. All of these things should be done in light of looking at what kind of public Mark you want to kind of private Mark you want <unk>.

James Dimon: Just three quick things. Liquidity is also equally important. There's been a lot of recognition that what counts for liquidity and discount windows and how LCR are done, I think is very important. Second is competition. All these things should be done in light of looking at what kind of public markets you want, what kind of private markets you want, what do you want in the banking system, what do you want out of the banking system.

Jim Mitchell: In the banking system, we want out of the banking system and the third is I think most people realize there is a huge need to take a step back and look at the business teams Balkanized system, rebuild which had negative and even the regular to say of that so we can take a deep breath.

James Dimon: And the third is, I think most people realize there is a huge need to take a step back and look at the Byzantine Balkanized system we built, which has negatives. And even the regulators tell you that. So at one point, just take a deep breath, as Jeremy said, do the right thing and continue to have the best financial system in the world. Yep, that makes sense.

Jeremy Barnum: Jeremy so to do the right thing.

Jim Mitchell: Continue to have the best management system in the World.

Speaker Change: Yes that makes sense and maybe just as a follow up just on loan growth have you since.

James Dimon: And maybe just as a follow up, just on loan growth, have you, since the election, it seems like CEO confidence, business confidence has increased. So are you starting to see any improvement in demand on lending? Just any thoughts there would be great. Yeah, it's a good question. And I think given the significant improvement in business sentiment and the general optimism out there, you might have expected to see some pickup in long growth, we are not really seeing that. I don't particularly think that's a negative. I think it's probably explained by a combination of wide open capital markets.

Speaker Change: Since the election, it seems like CEO confidence business confidence has increased so are you starting to see any improvement in demand and on lending just any thoughts there would be great.

Speaker Change: Yes, it's a good question and I think given the significant improvement in business sentiment and the general optimism out there or you might have expected to see some pickup in loan growth, we are not really seeing that.

Speaker Change: I don't particularly invest in negative I think it's probably explained by a combination of wide open capital markets and so many of the larger corporates corporate to accessing the capital markets.

James Dimon: And so many of the larger Corporates Accessing the Capital Markets, you know, and healthy, you know, healthy balance sheets in small businesses and maybe some residual caution. And maybe there are some pockets in some industries where some aspects of the policy uncertainty that we might be facing are making them a little bit more cautious than they otherwise would be about what they're executing in the near term. But we'll see what the new year brings as, you know, the current optimism starts getting tested with reality one way or the other. And maybe if it materializes with tangible improvements and things one way or the other, you'll actually see that come through.

Speaker Change: And healthy healthy balance sheets, and small businesses and maybe some residual caution navy.

Speaker Change: Some pockets and some industries, where some aspects of the policy uncertainty that we might be facing are making them a little bit more cautious than they otherwise would be about what they are executing in the near term, but we will see what the new year brings us the current optimism starts getting tested with reality, one way or the other and maybe.

Speaker Change: If it if it materializes with tangible improvements in things one way or the other you'll actually see that come through C&I loan growth in particular.

James Dimon: See you in one group. Okay, great. Thanks.

Okay, great. Thanks.

Speaker Change: Okay.

Erika Najarian: Thank you. Next we will go to the line of Erika Najarian from UBS. Your line is open. Yes, hi. Good morning. I wanted to follow up on the questions on capital and maybe ask about some of, Jeremy, the cross currents in terms of the denominator. So if we look at the third quarter regulatory data for your GSIB surcharge score, that would imply that your score would put you in a range of a 5% GSIB. So obviously, from what we understand, if you print somewhere near that score at the end of this year, then your GSIB surcharge goes up to 5% or by 50 basis points two years and one day from now.

Speaker Change: Thank you next we will go to the line of Erika Najarian from UBS. Your line is open.

Erika Najarian: Yes, hi, good morning wanted to follow up on the question on capital and maybe ask about some of Jeremy the cross currents in terms of the denominator. So if we look at the third quarter regulatory data for your G. SIB surcharge score that.

Erika Najarian: That would imply that your score which puts you in a range.

Erika Najarian: Of our 5% G. SIB. So obviously from what we understand if you print that's somewhere near that score at the end of this year and your G. SIB surcharge goes up by two 5% or by 50 basis points too.

Erika Najarian: Two years in one day for now at the same time around the holidays, we did get the press release from both the Federal reserve and the lawsuit from the banks in terms of the transparency.

Jeremy Barnum: At the same time, around the holidays, we did get the press release from both the Federal Reserve and the lawsuit from the banks. In terms of the transparency, it looks like the transparency is going to be focused on perhaps being improved as soon as this year's stress test. So as we think about the definition of excess, right, because part of this is like 15.7 is clearly a huge number. So as we think about your returns going forward, the definition of excess also continues to shift. So how should we think about those cross currents in terms of two big components clearly?

Erika Najarian: It looks like the transparency is going to be focused on perhaps being improved as soon as this year stress test.

So as we think about the definition of excess great. Because part of this is like $15. Seven is clearly a huge number so as we think about your returns going forward. The definition of excess also continues to shift so how should we think about those cross currents in terms of two big components clearly wanted to G. SIB surcharge and the other is your stress capital buffer.

Jeremy Barnum: One is your GSIB surcharge and the other is your stress capital buff. Right, Erika.

Erika Najarian: Right Erica Okay. You are challenging me with many rabbit holes that are very deep.

Jeremy Barnum: Okay, you are tempting me with many rabbit holes that are very deep. Let's try to address this not too much great length. First of all, G-SID. So, yes, it was a high print in the third quarter, but we had normal seasonality third quarter, fourth quarter. So while our current view of the G-SID number is an estimate, we're quite confident that we wound up comfortably in the 5% bucket just as a result of normal seasonality. It was actually a relatively quiet December in terms of the types of year-end things that sometimes create pressures and various types.

Erika Najarian: Let's try it.

Erika Najarian: Address this.

Erika Najarian: Too much great line first of all G SIB.

Erika Najarian: So yes, it was a hyatt brand in the third quarter, but we have normal seasonality third quarter or fourth quarter. So while our current view of the juice of numbers an estimate where.

Erika Najarian: Quite confident that we wound up comfortably in the 5% bucket just as a result of normal seasonality. It was actually a relatively quiet December in terms of.

Erika Najarian: Types of year on things that sometimes great pressures in various types. So.

Jeremy Barnum: So that is more or less what you might have otherwise expected in terms of our typical seasonal pattern. So not much to see there. And the obvious point also being that even under the existing proposed G-SID rule, which is obviously a little bit hung up, you know, with the smaller buckets and some of the recalibration and so on, it's not even sort of obvious that it would have mattered one way or the other. But anyway, for now, we're managing to the current rules and normal seasonality took us back under.

Erika Najarian: That is more or less what you might have otherwise expected in terms of our typical seasonal pattern. So not much to see there and the obvious point also being that even under the existing proposed user rule, which is obviously a little bit hung up.

Erika Najarian: With the smaller buckets, it sounds like a recalibration and so on it's not even sort of obvious that it would moderate one way or the other but anyway for now we're managing too to the current rules and.

Erika Najarian: Normal seasonality took us back under five.

Jeremy Barnum: Um, okay, you mentioned the lawsuit. I think the only thing to say about that is that, you know, we are happy to see the clear recognition on the part of the Fed that many of the things that we've been talking about for a long time in terms of transparency and volatility, and some of the, you know, non-substantive bureaucratic burden associated with the CCAR process needs improvement. So that's great. I think, you know, I won't speak for the industry bodies that were the actual litigants, but it seems to me, if you just read what they said publicly in their press releases, this is as much as anything about preserving rights in light of the statutory limitations deadlines that were coming up.

Erika Najarian: Okay. You mentioned the lawsuit I think the only thing to say about that is that.

Erika Najarian: We are happy to see the clear recognition on the part beside that many of the things that we've been talking about for a long time in terms of transparency and volatility.

Erika Najarian: And some of the.

Erika Najarian: Non substantive bureaucratic burden associated with the CCAR process.

Erika Najarian: It needs improvement so thats, great I think I won't speak for the industry bodies that where the actual against but it seems to me. If you just read what they said publicly in their press releases.

Erika Najarian: As much as anything about preserving rights in light of the statute of limitations deadlines that were going up so much.

Jeremy Barnum: So let's just hope that we see some significant progress on that.

Erika Najarian: Just hope that we that we see some significant progress on that front.

Jeremy Barnum: And then taking a step back at a high level, what you're really asking me is, what is our core view about and I think probably the best way to think about this is just through the lens of the numerator. What is our core view about, you know, if you just for the sake of argument, assume modest growth in the normalized amount of economic denominator, like actual need for capital organically, what will be the likely additional numerator that will be needed or not as a function of, you know, the environment. And the way we're increasingly thinking about that is just doing different scenario analysis of like, Flat Numerator, OP5 Numerator, OP10 Numerator, OP20 Numerator, I guess there could be some versions of the world with the numerators a little less, and then guessing about our central case and comparing our projected capital amount to that number to determine the excess and, you know, As you point out, at 15.7, and I think the actual quantum of the numerator is something like 275 billion, through pretty much any reasonable lens, it's a ton of access, which is why we've concluded that it doesn't need to grow any And just a follow up question, to follow up to John's line of questioning, as a placeholder, as we think about what you said, trying to arrest the growth of CT1, for now, should we just assume that, you know, anything that you don't need for organic growth, and your dividend obligations in terms of that 15-7 will be bought back, you know, by the company, as we as we think about, I know, you don't want to predict the buyback, but is that sort of just a placeholder for now, as we think about what can return back to shareholders in the form of repurchase?

Erika Najarian: And then taking a step back at a high level, what you're really asking me is.

Erika Najarian: What is our core view about and I think probably the best way to think about this.

Erika Najarian: The numerator actually what is our core view about if you just for the sake.

Erika Najarian: Jacob argument assume modest growth in the normalized amount.

Erika Najarian: Economic denominate or like actual need for capital organically.

Erika Najarian: It will be the likely additional numerator that will be needed.

Erika Najarian: Not as a function of the environment and the way we are increasingly thinking about that as just doing different scenario analysis of like <unk>.

Erika Najarian: Platinum writer up five room writer up 10 numerator of 'twenty normally I guess, there could be some versions of the world where the numerator is a little less.

Erika Najarian: And then guessing about our central case, and comparing our projected capital amount to that number to determine the access them.

Erika Najarian: As you point out at $15 seven.

Erika Najarian: And I think the actual quantum of the numerator or something like 275 billion.

Erika Najarian: So pretty much any reasonable lens, it's a ton of access which is why we've concluded that it doesn't need to grow anymore.

Speaker Change: And just a follow up question to John's line of questioning as a placeholder.

Erika Najarian: As we think about what you said trying to arrest the growth of CET one.

Speaker Change: For now should we just assume that you know.

Speaker Change: Anything that you don't need for organic growth.

Speaker Change: And your dividend obligations in terms of that 15, seven really bought back.

Speaker Change: By the company as we think about I know you don't want to predict the buyback, but is that sort of just a placeholder for now as we think about what can return back to shareholders in the form of repurchase.

Jeremy Barnum: Yeah, I mean, you've quoted our capital hierarchy and your conclusion flows naturally from my statement that we do want to arrest the group. So we are never going to tell the market what we're going to do. You all know that everybody's out there modeling these things and trading against these things. So steady, consistent buyers in the marketplace who are so predictable, are making a mistake. Does that conclude your questionnaire? Very good. We can go to the next question. Thanks.

Speaker Change: Yes, I mean, you've quoted our capital hierarchy and your conclusion flows naturally from my statement that we do want to arrest the growth of the excess.

Speaker Change: But we are never going to tell the market, what we're going to do when you all know that everyone's out there modeling. These days trading against these things so steady consistent buyers in the marketplace. We are so predictable, we're making a mistake.

Speaker Change: Does that conclude your question Greg.

Speaker Change: Go to the next question. Thanks.

Matt O'connor: Thank you. Our next question comes from Matt O'Connor with Deutsche Bank. Your line is open. Good morning. It seems like you guys have backed off the view that you're materially over-earning on net interest income. And is this all because of the higher rate environment that's expected now? Or is it also partly a different view on deposit pricing, specifically on the consumer side, which I think you had assumed it would reprice a bit more than we've seen? Yeah, it's a good question, Matt. I guess, maybe, let me try to frame that from a couple different perspectives.

Speaker Change: Thank you. Our next question comes from Matt O'connor with Deutsche Bank. Your line is open.

Matt O'connor: Good morning. It seems like you guys have backed off the view that you're materially over earning on net interest income.

Speaker Change: And is this all because of the higher rate environment. That's expected now or is it also.

Speaker Change: Partly a different view on deposit pricing specifically in the consumer side, which I think you had assumed it would be priced at that more than we've seen.

Speaker Change: Yes, it's a good question, Matt I guess, maybe let me try to frame that from a couple of different perspectives. So on the one hand, you are right. If you look at the.

Jeremy Barnum: So, on the one hand, you're right, if you look at the NII guidance that we're giving you, including the notion that, you know, subject to the yield curve planning out in line with the current forwards, which, as we know, is the one thing that we know won't happen. But, you know, if you want to assume something, if you assume the forwards, we're sort of telling you that we might return to sequential growth in the back half of the year, again, based on all of our current assumptions, all of us being equal. And, you know, you could draw the conclusion that that means that, you know, the over-earning narrative is no longer applicable.

Speaker Change: NII guidance that we're giving you, including the notion that subject to the yield curve flattening out.

Speaker Change: In line with the current forwards, which as we know is the one thing that we know won't happen, but if you want to assume something if you assume the forwards.

Speaker Change: Telling you that we might return to sequential growth in the back half of the year again based on all of our current assumptions all else being equal and.

You could draw the conclusion that that means that you know.

Speaker Change: The over earning narrative is no longer longer applicable I think if you take a big step back by historical standards. The difference between the policy rate and the weighted average rate paid on consumer deposits remains quite healthy.

Jeremy Barnum: I think if you take a big step back, by historical standards, The difference between the policy rate and the weighted average rate paid on consumer deposits remains quite elevated. For a variety of reasons, and subject to, you know, the fact that in the end, deposit pricing is always going to be a response to the competitive environment that we experience in the field, the current structure of the yield curve is such that, for the time being anyway, you know, when we do the math, that's what we see. Do we think that's truly, truly, truly sustainable through the cycle?

For a variety of reasons and subject to the fact that India in deposit pricing is always going to be a response to the competitive environment that we experienced on the field. The current structure of the yield curve.

Speaker Change: As such that for the time being anyway.

Speaker Change: Do the math, that's what we see.

Speaker Change: Do we think that's truly truly truly sustainable through the cycle unclear, but I guess, we'll cross that bridge when we come to that for now this is the outlook for the company.

Jeremy Barnum: Unclear. But I guess, you know, we'll cross that bridge when we come to it.

Jeremy Barnum: For now, this is the outlook. We've gotten closer to normalized NII and normalized credit. Yeah, it is worth noting that, you know, NIIX market is down year on year. So there's some Okay.

Speaker Change: We've gotten closer to normalized.

Speaker Change: Normalized credit.

Speaker Change: Yes, it is worth noting that.

Speaker Change: NII ex markets is down year on year, so there's some amount of normalization.

Speaker Change: Okay, and then just separately a start.

Matt O'connor: And then just separately, a strategic question, you know, there's been some reports about you further expanding the consumer banking business globally. And I guess I just want to, you know, push on that where, you know, we really haven't seen other banks do it in a successful way. Obviously, your approach is kind of coming from a position of strength, leading digitally. But I guess I'm just wondering, like, you know, is it worth it? Is there enough upside to justify maybe some of the increased regulatory and execution risks of doing global consumer banking? Yeah, I mean, I think you've kind of answered your own question in a sense.

Speaker Change: To your question.

Speaker Change: Ben.

Speaker Change: Some reports about you further expanding the consumer banking business globally.

Speaker Change: And I guess I just wanted to push on that where we really haven't seen other bank.

Speaker Change: Seth away, obviously your approach to kind.

Speaker Change: Kind of coming from a position of strength.

Speaker Change: Digitally.

Speaker Change: I guess I'm just wondering like is it worth it is there enough upsides to justify maybe some of the increased regulatory and execution risks.

Speaker Change: Giving a global consumer banking.

Speaker Change: Yes, I mean, I think you've kind of answered your own question in the zone, just like we talked about this a lot when you first launched the initiative.

James Dimon: Like, you know, we talked about this a lot when we first launched the initiative. I just think that the comparison to other players is not apt in the current moment. And that's not to say that like we're special or anything, it's just that the strategy is very different and it's a very different moment. So you know, it's a new initiative, it's obviously not risk-free, but it's going pretty well and you know, pointing out the obvious, if we didn't think it was worth it, we wouldn't be doing it. But we have obviously considered all of the risks and opportunities associated with it.

Speaker Change: I just think that the comparison to other players is not opt in the current moment, but it's not to say that like where special or anything it's just that.

Speaker Change: The strategy is very different and it's a very different moment. So it's a new initiative is obviously not risk free, but it's going pretty well.

Speaker Change: But pointing out the obvious it was.

Speaker Change: It was worth it if we wouldn't be doing it but we have obviously considered all of the risks and opportunities associated with the decision.

James Dimon: One of our strategic initiatives, and those get scrutinized quite aggressively, you know, through all of our managers.

Speaker Change: It's one of our strategic initiatives and those gets scrutinized quite aggressively.

Speaker Change: All of our management processes.

Betsy Graseck: Okay, thank you. Thank you.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you. Our next question comes from Betsy <unk> from Morgan Stanley You May proceed.

Jeremy Barnum: Our next question comes from Betsy Graseck from Morgan Stanley. You may proceed. Hi, good morning. Thank you, can you hear me okay? Alright, just want to make sure you can hear me. So this has been a great call. First congratulations on a great quarter. It's been a great call with a lot of robust questions here. You're like, what else is there to ask? Here's my question. As we think about the... NII Outlook, and you know, highlighted the NIM pressure, but loans, you know, but basically balance is increasing here, right? Maybe you could just speak to the, could you help me understand the order of the drivers?

Speaker Change: Hi, good morning.

Speaker Change: Yeah.

Speaker Change: Okay, Alright, just want make sure you can hear me.

Speaker Change: This has been a great offer its been gradual first congratulations on a great quarter, it's been a great call with lot of robots questions. Here you are like what else is there to ask here's my question.

Speaker Change: As we think about the.

Speaker Change: NII outwork and you highlighted the NIM pressure button loan, but basically balances increasing here right, maybe you could just speak to.

Speaker Change: Could you help me understand.

Speaker Change: The order of the drivers is it Q T going away deposits going up.

Jeremy Barnum: Is it QT going away, deposits going up, you know, punch it into securities? Is it loan growth inflecting? Is there any place in the franchise where you see loan growth opportunities for inflection this coming year? And then lastly, as I think about your comments around, you know, you've got the green market share number one, you've got the yellow, you've got the red places maybe we can't see. Could you help us understand where those yellows and reds are, you know, where they are? Are they just scattered, everybody's, every single business has one, or are there some that have more than others and therefore more opportunities?

Speaker Change: Punch it into securities is it loan.

Speaker Change: Loan growth and Flak thing is there any place in the franchise, where you see loan growth opportunities for inflection this coming year.

Speaker Change: And then lastly, as I think about your comments around you've got the green market share number one you've got the yellow you've got the Red places, maybe we can't see could you help us understand where are those yellow and red.

Speaker Change: Sure.

Speaker Change: Where they are or they get scattered everybody. Every single business has won or are there some that have more than others, and therefore more opportunities and is it more balance sheet or fee generative.

Jeremy Barnum: And is it more balance sheet or fee generative?

Jeremy Barnum: That's kind of what I'd like to just discuss. Have a minute. Thanks. Sure. Yeah, let me take a crack at that, Betsy. So, loan growth, I think, you know, looking for areas where it might inflect, the only thing I can think of, frankly, that would be in that category, certainly in terms of being meaningful to the company's performance, would be acquisition finance, because that's been relatively muted as a function of the M&A environment. And if that picks up, you can see more there. Now, those aren't loans that we necessarily keep on the balance sheet for that long.

Speaker Change: Kind of what I'd like to just discuss a few.

Speaker Change: Thanks.

Speaker Change: Sure.

Speaker Change: Let me take a crack at that Betsy So loan growth I think looking for areas, where it might inflect.

Speaker Change: Only thing I can think of frankly that would be in that category.

Speaker Change: Certainly in terms of being meaningful to the company's performance.

Speaker Change: Would be acquisition candidates, because thats been relatively muted as a function of the M&A environment.

Speaker Change: And as that picks up.

Speaker Change: You can see more there now that's those aren't loans that we necessarily keep on the balance sheet for that long so.

Jeremy Barnum: So, As you can see on our presentation page for the NII Outlook, you know that CARBone growth and Revolve hormonalization Tailwind. And while that is also a driver of growth in 2025, you know, again, a little bit more optimism. Could you see a bit more long growth in business banking? Could you see a bit more growth in CNI at the margin? Yes. But I think the place where you might see inflection is more on the areas that are yield So we'll see, we'll see what happens. And in terms of, you know, the reds and the ambers under the greens, I think you know them, right?

Speaker Change: Whether that shows up in fees, our NII or whatever a separate issue but.

Speaker Change: As you can see like on our presentation page for the NII outlook.

Speaker Change: You know that card loan growth and revolve normalization as a significant tailwind and while that is also a driver of growth in 2025.

Speaker Change: Based on our current gas about the future it.

Speaker Change: It will be it's decelerating a little bit rather than the opposite so growing above trend, obviously, which is great and its a sign of the strength of the franchise and the amount of engagement that we're getting from our card clients.

Speaker Change: The big normalization headwinds that are gone.

Speaker Change: You know well the state of the mortgage market given rates rates are also a headwind.

Speaker Change: Other pockets like our multifamily lending business at the margin. So, yes, I think a higher growth environment, a little bit more optimism could you see a bit more loan growth in business banking could you see a bit more growth in C&I at the margin yes.

Speaker Change: But I think the places where you might see inflection is more on the areas that are youll do that and I would say.

Speaker Change: So we will see we will see what happens there.

Speaker Change: And in terms of.

Speaker Change: The.

Speaker Change: The Reds and the Ambrose under the grants I think you'd know them right and they are aligned with our big long standing investment strategy is the biggest single one arguably is that in.

Jeremy Barnum: And they're aligned with our big longstanding investment strategies. The biggest single one, arguably, is that in, you know, what you might call the affluent section of the wealth management space, we are significantly underpenetrated relative to, you know, the number of households that we bank in the country, and our capabilities and our brand and what we think we bring to the table. So that's why we're pushing so hard on that front, because I think we can get more share there. Includes the franchise. There are a bunch of examples elsewhere, but, you know, we talk a lot about going down inside the markets business, inside investment banking, and finding the places where even where at the aggregate global sector level we look great, in any given region, in any given subsector we can do better.

Speaker Change: What you might call the off one section of the wealth management space, we are significantly underpenetrated relative to the number of households that we bank in the country and our capabilities and our brand and what we think we bring to the table. So that's why we're pushing so hard on that front, because I think we can get more share.

Speaker Change: Sure.

Speaker Change: <unk> completes the franchise very nicely there.

Speaker Change: There are a bunch of examples elsewhere, but we talk a lot about drilling down inside the markets business inside of investment banking.

Speaker Change: And finding the places where even where at the aggregate global sector level, we look great in any given region at any given sub sector or we can do better and as I mentioned, we continue to look at that as aggressively as ever.

Jeremy Barnum: And as I mentioned, you know, we continue to look at that, you know, as aggressively as ever. Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you next we will go to the line of Ebrahim <unk> with Bank of America Merrill Lynch. Your line is open.

Ebrahim Poonawala: Next we will go to the line of Ebrahim Poonawala with Bank of America Merrill Lynch. Your line is open. Good morning. I guess just two questions.

Speaker Change: Good morning.

Speaker Change: Just two questions in terms of areas of vulnerability. So I heard you Jeremy on the lending side, but lots of cross currents like if we go to the fact that anticipation that frequently.

James Dimon: In terms of areas of vulnerability, so I heard you, Jeremy, on the lending side, but lots of cross currents, like if we anchor to the fact that your administration that's taking place, going to take office with a focus on domestic CapEx, Even if we don't get any rates cuts, when you look through your customer base, Where do you see areas of vulnerability, be it because of tariffs, be it because of just lack of any additional relief from the Fed? Yeah, I would love to hear just from a credit quality perspective, what no rate cuts might mean.

Speaker Change: Equal says with a focus on domestic capex.

Speaker Change: Even if we don't get any of it Scott when you look to your customer base.

Speaker Change: Where do you see areas of mobility b because of <unk> because of lack of any additional relief from the fed.

Speaker Change: Yes, I would love to hear just from a credit quality perspective, what loaded cuts Mike Meehan.

James Dimon: Oh, I see what your question is. That's what it means. Um, yeah, I mean, look, wholesale credit is pretty hard to predict. It tends to be very idiosyncratic. Um, you know, you obviously know that we will coming out of a 10 plus year period of Exceptionally low charge offers. And so at some point that has to normalize to a slightly more reasonable level and Enterprise Committee. We do run extensive trust tests on the sensitivities to the portfolio, of the portfolio to rate shock. A lot of what we do from an underwriting perspective is designed to, you know, protect us from that, frankly.

Speaker Change: Oh I see what your question is I was with me a second.

Speaker Change: Yes, I mean look wholesale credit is pretty hard to predict it tends to be very idiosyncratic.

Speaker Change: You, obviously know that coming out of a 10 plus year period of Ednas exceptionally low charge off rate and so at some point that has to normalize at a slightly more reasonable level, a little bit to jamie's comments earlier about how some things are still not fully normalized.

Speaker Change: Arguably wholesale credit could be one of those we do an extensive trust us on the sensitivities to the portfolio of the portfolio to rate shock a lot of what we do from an underwriting perspective as designs.

Speaker Change: Protect us from that frankly, so you can rest assured that we're.

James Dimon: So, you know, you can rest assured that we're, you know, running the relevant analysis, but I'm not inclined to, you know, go into detail on any given sector or whatever. Chairman DeGioia. I just find the biggest driver of credit has been and always will be unemployment, as both in the consumer side, and it feeds into the corporate side, it leads to mortgages, subprime credit card. So really, it's your forecast of unemployment, you're going to make your own, which will determine that over time. And so the second thing you said vulnerabilities, you know, it's unemployment, but the worst case would be stagflation.

Speaker Change: <unk>.

Speaker Change: <unk>.

Speaker Change: <unk> the relevant analysis, but.

Speaker Change: I'm not inclined to go into detail on any given sector or whatever.

Jeremy Barnum: Jeremy This is John.

Speaker Change: Or just what are the biggest driver of credit.

Speaker Change: Has been and always will be unemployment, that's both on the consumer side and it feeds into the corporate side Im pleased to mortgages subprime credit card. So really it's your forecast of unemployment would you be able to make your own which will determine that.

Speaker Change: Over time, and so the second thing that you said vulnerabilities.

Speaker Change: Unemployment for the worst case would be stagflation higher rates with higher unemployment will drive higher credit wasn't literally across the board.

James Dimon: Higher rates with higher unemployment will drive higher credit losses, literally across the board.

James Dimon: You know, I'm not we're not predicting that, but you just asked where the vulnerabilities, that's the vulnerabilities. And I guess, thanks for that.

Speaker Change: Predicting that would be just where the vulnerabilities at the vulnerabilities.

Speaker Change: And I guess, Scott Thanks for that just sticking with that as far as <unk> is concerned when you talk to experts like no one knows what the right level for the fed to end is I'm. Just wondering if you have any thoughts did.

James Dimon: Just sticking with that, as far as QT is concerned, when you talk to experts, like no one knows what the right level for the Fed to end is. I'm just wondering if you have any thoughts there on how, when the Fed should end, the pressure on the system, and what it may imply for the positive growth. Yeah, I mean, I think the conventional wisdom on QT, and I'm not pretending to add to and one or the other, is that the tapering should sort of complete and therefore we might see an end. In our NII outlook, you know, plus or minus what happens with the policy rate and, you know, stabilizing and growing deposit balances through the second Thank you.

Speaker Change: When the fed should in the pressure on the system and what it mean play for deposit growth.

Speaker Change: Yeah, I mean, I think the conventional wisdom on duty.

Speaker Change: Pretending to add to the conventional wisdom, one way or the other is that the tapering should sort of complete and therefore, we might CNN sometime in the middle of the year.

Speaker Change: They may change that but that seems to be the current market consensus when we sort of take a step back and look at the H eight data in our kind of flow of funds models and that type of stuff. When you look at the way our appears behaving evolution of Qt expectations for economy wide loan growth et cetera, and what the impact of that might be on the growth.

Speaker Change: Or is there some wide deposits, it's kind of consistent with destroy that we're telling about our sort of the background growth in our NII outlook, you know plus or minus what happens with the policy rate.

Speaker Change: And stabilizing and growing deposit balances for the second half of the year.

Speaker Change: Thank you.

Gerard Cassidy: Thank you. Our final question comes from Gerard Cassidy from RBC Capital Markets. Your line is open.

Speaker Change: Thank you. Our final question is comes from Jared Gerard Cassidy from RBC capital markets. Your line is open.

Jeremy Barnum: Hi, Jeremy. Hi, Jamie. Jeremy, you mentioned... You mentioned in your comments about the overall fermoid deposits have stabilized, and in the second half, you could see some growth in your various, I think you said you started to see maybe some of that in the consumer checking deposits. We noticed in the industry data from the regulators, household checking deposits pre-pandemic for the industry were running about a trillion dollars. Now they have remained elevated post-pandemic at $4 trillion. Based on what you're seeing in your customer base, what can you attribute the strength to in this consumer checking account deposit?

Speaker Change: Hey, Jeremy Hunt Jamie.

Speaker Change: Jeremy Good morning.

Speaker Change: You mentioned in your comments about the overall firmly deposits have stabilized.

Speaker Change: In the second half you could see some growth in <unk> I think you said you started to see maybe some of the consumer checking deposits, we notice in the industry data from the regulators.

Speaker Change: So checking deposits pre pandemic for the industry you were running at about a trillion dollars now.

Speaker Change: Have remained elevated post pandemic at four trillion can you based on what Youre seeing in your customer base. What can you attribute the strength to in this consumer checking account deposits.

Jeremy Barnum: That's fascinating, Gerard. I'll have to take a look at that data. I don't actually recognize those numbers, but I can speak for ourselves, which is that, you know, when we look at the encouraging growth that we see in our checking franchise, it's a couple things. So, of course, there was some access, and there was some yield seeking behavior. And so you did see people moving money out of checking into higher yielding alternatives over the course of the last couple of years in the rate It feels to us as if we're in the final innings of that we're just not seeing nearly as much yield seeking pressure as we In the meantime, as you well know, we are aggressively engaging with clients and acquiring a lot of new clients and deepening in a lot of different markets as part of our branch expansion strategy and the deepening in all of those markets.

Speaker Change: Thus fastening Gerard obviously take a look at that data I don't actually recognize those numbers, but I can speak for ourselves, which is when we look at the encouraging growth that we see in our checking franchise.

Speaker Change: A couple of things so of course, there was some access and there was some yield seeking behavior. So you did see people moving money out of checking into higher yielding alternatives over the course of the last couple of years in the rate cycle. It feels to us as if we're in the final innings of that we're just not seeing nearly as much.

Speaker Change: Youll seeking pressure as we had seen in the meantime, as you well know we are aggressively engaging with clients and acquiring a lot of new clients and deepening and a lot of different markets as part of our branch expansion strategy in the deepening and all of those markets. So.

Jeremy Barnum: So you know, the combination of the tail end of the yield seeking flows and excellent client engagement and success in the sort of organic build out of that franchise is starting to show up in checking account growth, which we see as a very healthy indicator.

Speaker Change: The combination of the tail end of the yield seeking flows and excellent client engagement and success in the sort of organic build out of our franchise is starting to show up and checking account growth, which we see as a very healthy indicator for the franchise.

Jeremy Barnum: very good and then as a follow-up circling back about the capital levels you guys have been very clear about where you want them to be um can you share what the pros and cons from JP Morgan's perspective not so much from an investor but we understand of course you can do a share repurchase obviously you can do non-depository acquisitions with the excess capital but what are the pros and cons of a special dividend to reduce that excess capital if you continue with these incredible profitability levels of 20% return on changeable common equity you're growing your income and capital very nicely every year but what are those pros and cons again from JP Morgan's perspective Yeah, so yeah, we made some public comments on this at a conference some time back.

Speaker Change: Very good and then as a follow up circling back about the capital levels you guys have been very clear about where you want them to be.

Speaker Change: Can you share with us the pros and cons from J P. Morgan's perspective, not so much from an investor, but we understand of course, you can do a share repurchase obviously you can do non depository acquisitions with the excess capital, but what are the pros and cons of a special dividend to reduce that excess cash.

Speaker Change: If you continue with these incredible profitability levels of 20% return on tangible common equity youre growing your income and capital very nicely year over year.

Speaker Change: This pros and cons again from J P Morgan's perspective.

Speaker Change: Yeah. So we made some public comments on this at a conference sometime back so it will be if he wants to go so I'm just curious.

Jeremy Barnum: So he wants to go. So go ahead, Jeremy, go ahead. I was just going to say we're not going to do one. We have looked at it. If you all have any great insights, folks, let us know. But most people don't want it. It doesn't enhance shareholder value. And I've never thought that having cash in your pocket is a bad thing. I think it's a huge mistake to look at life where you have to, quote, deploy capital. So we want to be very, very patient. But special dividends, if you look at the history of special dividends, they really basically don't work.

Jeremy Barnum: So Jeremy go ahead.

Speaker Change: Seriously.

Speaker Change: I was just going to stay where they're not going to do one we have looked at it.

Speaker Change: Won't have any great insights bodes let us know, but most people don't want it doesn't enhance shareholder value.

Speaker Change: Yes.

Speaker Change: I've never thought that having cash in your pocket is a bad thing.

Speaker Change: Theres a huge mistake to look at likely you have to deploy capital. So we wanted to be very very patient, but special dividends. If you look at history, especially they really basically don't work.

Jeremy Barnum: But if anyone has a different opinion, you know, we're always interested. Sounds good.

Speaker Change: But if anyone has a different opinion.

Speaker Change: It is interesting.

Speaker Change: Sounds good thank you gentlemen.

Unknown Executive: Thank you, gentlemen. Thanks, George.

Speaker Change: Thanks sure.

Unknown Executive: Thank you, and we have no further questions at this time. Thanks very much. See you next quarter.

Speaker Change: Thank you and we have no further questions at this time.

Speaker Change: Okay.

Speaker Change: See you next quarter.

Unknown Executive: Thank you all for participating in today's conference.

Speaker Change: Thank you all for participating in today's conference you may disconnect at this time and have a great rest of your day.

Unknown Executive: You may disconnect at this time and have a great rest of your day.

Speaker Change: [music].