Roger Hochschild: I think we continue to see good results from the way we put to work on the marketing front in terms of our cost per account. Obviously, we’ve talked about the relaunch of cash back debit. We’ll put some money against that, including the mass market campaign in the fall, but have been excited with what we’re seeing in terms of the cost per funded account there. So while — yeah the competitive environment is always intense across all of our businesses, we feel good about how our value proposition is competing out there across all of our consumer products.
John Hecht: All right, guys. Thanks very much.
Operator: Thank you. Our next question comes from Don Fandetti with Wells Fargo.
Don Fandetti: Hi. John, I was wondering if you could talk on the merchant miscalculation. Was that found internally or was that brought to you by a regulator or third party?
John Greene: It was found internally.
Don Fandetti: Okay, great. And then on NIM, it sounded like the trajectory was pretty good in general. And now it’s going to be around 11%. Is there more promotional than you thought or more deposit competition, can you talk a bit about that?
John Greene: Yeah. The — it’s a little bit of both actually. So we ended ‘22 at 11.04%. We said that we would be — initial guidance up modestly. And then in the first quarter call, we said NIM has likely peaked and then it would begin to move downward and what I’ll say normalize, likely to a higher level than it has been historically. So in the quarter, the reason that we tweak that guidance was we are — we are investing in promotional balances. So attracting new customers or building balances with existing customers. Now, the returns on those offers are fantastic. The impact on NIM in the short term and the promotional period, it’s minor. But given our activity there, it took a few points of net interest margin out. And we thought that was an important impact to communicate.
Second, in terms of deposit competition, we had said that we thought that the beta would come in somewhere around 60% to 70%. What we’ve seen in late in the first quarter and into this quarter was our competitive set being more aggressive in terms of price increases. And as I’ve communicated in the past, we don’t seek to be a price leader here. We try to compete on our brand, our customer offering, our digital assets that are first class in order to attract deposit customers. And we’ve been very successful as you can tell by the numbers there. But part of the proposition is also price. So what we’re seeing now is betas likely to be north of 70% which is impacting net interest margin to the extent I just talked about in the guidance point. So those two factors are playing most substantially on the revised outlook.
Don Fandetti: Thank you.
Operator: Thank you. We’ll take our next question from Sanjay Sakhrani with KBW.
Sanjay Sakhrani: Thanks. Good morning. I have a follow-up on a couple of points made on the consent order. Maybe the first one, just on the share repurchase pause. Is that action taken in terms of prudence or out of an abundance of caution? Or do you think that there could be a material impact to your capital position? And I guess secondly, just on, John, you talked about the pressures on expenses into 2024. I guess, like, are there — is there a leverage on other expense lines to sort of moderate the overall implications for the year?
