John Greene: Yes. Thank you. Yes. So our baseline is that it’s going to come in at the low end. Now I shared the information in terms of the macros that we use for reserves pretty consistent in terms of what we used for our, what I’ll say, the second half view of charge-offs. So what could make that worse? Certainly, change to the macros, some servicing issues, which highly unlikely or a miss in terms of forecasting. I’m comfortable with our forecasting team. I’m comfortable with our servicing team and we’ve got a number of programs, and we’ve dedicated a lot of dollars in terms of analytics, in terms of call frequency and best time to call, and we’ve worked on our call scripts to ensure they’re compliant but also effective in terms of prioritizing payments. So I feel – feel good about that. So the range just reflects a level of kind of broad uncertainty that we’re going to tighten.
Jeff Adelson: Got it. And just as my follow-up, as we think about the NIM guide this year, I know you mentioned you’re embedded in an expectation of four rate cuts. If I think about where NIM exited the year though, it feels like the range of rate cuts using your 5 basis points for every 25, it seems like there’s more rate cut that embedded in there. Can you maybe just help us understand the drivers is, there may be a little bit more interest accrual reversal going on? And maybe help us understand what you’re assuming in positive betas on the way down? Is it going to be a little bit slower than what we’ve seen in the last four rate cuts on the way up?
John Greene: Yes. So good question. So let me start off with 2023 and then the fourth quarter of 2023. So as business, my view is great execution in terms of being able to kind of manage net interest margin, so year-over-year, we’re up. I think we’re an outlier, and that’s from that standpoint in financial services. What we saw in the fourth quarter was cost of funding increased as lower rate CDs term out and higher rate CDs would come in. Our OSA rate remains competitive. And the expectation on beta is that it will be in the mid-70s in a declining rate. And I hope that the beta on the declining rate is higher. Also something that’s not baked into the elements of the guidance. But certainly, with the exit of student loans or the proposed exit from the student loan business, that’s going to throw a lot of liquidity back into the business.
That will give us an opportunity to be slightly more aggressive in terms of deposit pricing. That — again, that will be a second half activity. So the four rate cuts that we put into the baseline assumption, again, two more than what we had forecasted in December. It could be as many as six, which if it is, that will certainly impact deposit betas and deposit pricing and consequentially net interest margin. So the guide here, I think, is appropriate, perhaps a little conservative. And our baseline expectation is that we’re going to deliver to the upper end of the –– the guidance range.
Jeff Adelson: Okay. Thank you for taking my questions.
Operator: Thank you. We’ll take our next question from Terry Ma with Barclays.
Terry Ma: Hi, thanks. Good morning. Maybe I just want to touch on the loan growth guide for 2024 a little bit. Aside from the balance transfers and promos, how much control do you actually have on growth because going from 15% loan growth to 0% just seems like a hard pivot to me. So maybe can you just talk a little bit more about that? And then my second question is just what needs to happen before you can actually grow again, and is there a way to think about what that growth rate looks like as we look out towards 2025 and beyond? Thank you.
John Greene: Okay. Thanks Terry. So, I think it’s important to take a look at the quarterly trends on loan growth versus the total year because each quarter, what you will see is that the amount of loan growth decreased quarter-over-quarter. And that was partly due to payment rate, partly due to underwriting standards, and partly due to kind of sales activity slowing as well. So, in 2024, we’ve guided to loan growth to be flat. Again, payment rate is 100 basis points higher than it was in 2019. That could be a positive if it holds where it ended the year, it’s not going to impact loan growth. So, I feel like what we’ve tried to do here is put something on the table that’s reasonable that doesn’t reflect a level of undue risk taking in a time where consumer behavior is actually changing relatively dynamically.
If you think back 2.5 years ago coming out of the pandemic to kind of where it is today and also the impact of inflation that hit certainly all consumers, but certainly in terms of our prime revolver — consumers, the lower — third of those consumers were impacted fairly significantly by inflation. So, we do want to kind of watch, as I said previously, watch delinquency formations and our other metrics before we press on the gas on generating high level of new accounts in 2024.
Terry Ma: Thanks. And is there a way to think about what growth would look like before when you reaccelerate?
John Greene: Yes, I would go back to kind of historical growth rates. The companies typically delivered somewhere between 3% and 8% year-over-year growth. And then we feel like our underwriting and credit and the opportunity to lend profitably at a rate higher than that, we will do that. So what — an important thing for our investors to remember is we seek to generate high returns over the short, mid and long-term. And that’s essentially what this plan is seeking to deliver.
