John Greene: Yeah, great. So yeah, the tightening in the range was reflective of a couple of things. So first, as time moves on, we get more and more comfort with our forecasting on it. And to date, our forecasting has been right on top of actuals, our actuals have been right on top of the forecasting. So that gave us comfort. Second is, as time goes on, we can move from the analytical model to a more kind of traditional roll rate model that gives us a greater level of comfort around the charge-off and delinquency rates 30 day — 30 days out to 180 days out. So that gave us comfort to tighten that range. And then on top of that, certainly the jobs — jobs data and the forecast around employment gave us additional comfort. In terms of what we’re seeing with the portfolio, exactly what I said in the prepared comments.
So the newer vintages seasoning to expectation and older vintages basically normalizing to kind of 2019 levels. In terms of the shape of the curve, what we expect charge-offs to do in the back half of this year is the acceleration in terms of the rates of charge-off to begin to slow. And currently, we’re expecting, kind of, charge-offs to peak in the second half of ‘24. It may push a little bit into ’25, but right now we’re seeing it in the second half of ‘24 and then reach the level, which likely will stabilize that for two to three quarters after.
Ryan Nash: Great. Thanks for all the color.
Operator: Thank you. We’ll take our next question from John Hecht with Jefferies.
John Hecht: Morning, guys. And thanks for taking my questions. First one is that we talked about you giving us some sort of good trajectory of the normalization of the credit trends, which I guess occurs later this year, early into next year. I’m wondering given kind of the comps and stabilization of inflation and so forth, when do you expect to see normalization of loan growth and your guys opinions, what is the — what is kind of the normalized level of loan growth?
John Greene: Yeah. So certainly real robust loan growth in the first half of this year and the last quarter of 2022. We expect the rate of increase to slow certainly in the third and fourth quarter and also against really, really strong comps from 2022. And traditionally what this business has delivered is loan growth somewhere between 2 times and 4 times GDP growth. Now, we don’t know what GDP is going to look like right now into ‘24, but I would say this. We did cut the edges on the lower credit quality, which is — will impact new account growth in card for the balance of this year. We’re seeing, as Roger indicated, and I mentioned in my comments, sales growth to slow and probably stabilize in the single digits. So that will also impact loan growth for the balance of this year and into next year.
So the stabilized number is a multiple of GDP typically unless there’s some change to the macros that indicates it’s a good investment to either open up credit or appropriate to tighten credit.
John Hecht: Yeah. That’s a helpful framework to think about. And then with respect to the expense guide, I think you talked about some investment in compliance and some investment in technology and so forth. I’m wondering is there — is there, maybe talk about the competitive climate at this point relative to the past few years. Is there any spending required from a competitive perspective or do you have any — can you characterize the overall competitive environment as well?
