David Scharf: Got it. So just to clarify, there’s no forward flow arrangements as far as debt sales are concerned?
Jenny Osterhout: No.
David Scharf: Okay. And just a quick follow-up on OpEx. The $27 million restructuring charge, is there a way to translate the movements in the quarter to sort of an annualized expense savings. I mean, how we should interpret…
Jenny Osterhout: Let me think, yes. The easiest way – I do think the easiest way to do that is to think of the OpEx ratio, the 6.7% OpEx ratio. Obviously, the direct cost save is well in excess of that $27 million onetime restructuring charge. So it just gives us the ability to create further capacity and continue to invest in the business throughout the year, but you [indiscernible] I would look at the OpEx ratio and expect that OpEx ratio to be about 6.7% for the year. And that’s a 30 basis point drop as compared to last year. So we feel like it’s a pretty good drop and shows the disciplined management while we’re simultaneously rolling out all of these new products.
Douglas Shulman: Yes. And it’s built in we are always cutting some places and investing in some places. We think that’s what disciplined management is. And the charge we took and the cost saves around that were built into the guidance we gave you last quarter. So I wouldn’t change anything around that.
David Scharf: Got it. Appreciate the follow-up. Thank you.
Operator: Our next question comes from Rick Shane with JPMorgan. Please go ahead.
Richard Shane: Hey, guys. Thanks for taking my questions this morning. Two things. Look, the delinquency trends as you guys have cited looked good in the first quarter. It is worth mentioning some context, which is that other companies have cited some headwinds in Q1 credit related to lower or delayed tax refunds. I’m curious, it seems like you guys might have a little bit of potential – something left in the tank if tax refunds come through. How are you looking at that? And I don’t mean that to be spun as a positive question – leading question, but I’m curious how you guys are thinking about tax refund season and whether or not we’re going to see a catch-up?
Douglas Shulman: I mean, we didn’t see that data. We heard other companies come in. I mean, our view, we thought tax refunds came in pretty normal, and we – so we are not factoring in any big boom of tax refunds coming in at abnormal times. If they do, that will be upside, but that’s not in our – the way we’re thinking about it. We’re managing the book tightly. And I won’t repeat myself too much, but we like the direction. The front book is becoming bigger. Everything is happening as we thought the math would play out. And so we like that direction.
Jenny Osterhout: Yes, I’ll just add a little bit here. I mean, overall, we are seeing actually a slight increase in the total amount refunded to customers. So with average refunds are up about $100. So – and there’s probably about three weeks left in the season. I don’t – I think we’re feeling pretty good about where we are. You see that in the delinquency results, and we’ll see what happens next quarter.
Richard Shane: Got it. Thank you. And the word I think I was grasping for, but I’ve been up since 3’O clock was tailwind. The second thing, and this question came up a couple of times. On your guidance slide, you pulled out the little box that talked about your medium-term strategic priorities. Is there anything to read into that? Or is that still realistically what you’re targeting?
Douglas Shulman: No, that’s what we are targeting. You shouldn’t read anything into it. It’s just – we put together earnings slides every quarter. But what we laid out at Investor Day, we stand by 100%, which is to targeting $30 billion of receivables in the medium term to have net charge-offs in the 6% to 7% range and to have our capital generation, return on receivables in the range we’ve run historically. And so we feel very confident in our trajectory to get there. We’ve got a lot of opportunities with our current business, our superior business model, our cards and our autos. So we definitely stand by where we’re headed and where we laid out at Investor Day.
Richard Shane: Terrific. Thank you so much guys.
Douglas Shulman: Thank you.
Operator: Our next question comes from Nate Richam with Bank of America. Please go ahead.
Nathaniel Richam: Good morning. And thanks for taking my questions. Can you talk a little bit about the demand environment for consumers and under this current backdrop? I guess it more elevated given like higher inflation, maybe the need for more deconsolidation or is it more or less the same?
Douglas Shulman: Demand is pretty strong. It peaked in the first half of 2022. And it’s now been a lot more normal. We’re seeing kind of – if you look industry-wide, we think demand is about what it was in 2019 and has hit industry has kind of gone back to a state of post-pandemic equilibrium. As I mentioned, demand is always a bit slower in the first quarter, and you see that in our originations and you generally see that across the industry. We’ve been pretty pleased that we’ve been able to book good business with the increased pricing, which shows our competitive advantage in our positioning in the market. And so I think the demand environment is healthy. We don’t see any reason that it will fall off in any significant way.
Generally, the way it works, which is counterintuitive, I think most people think, oh, if you go into a recession or if customers are really struggling, they take out more debt the reality is consumers are actually pretty rational, and they take out that when they take out that when they’re feeling good about things. And so we see demand pretty steady in this quarter.
Nathaniel Richam: Awesome. And then turning back to expenses. The run rate from here looks pretty solid. And I was just curious like what specific areas are you looking for these like reinvestments? And will it kind of be like a steady throughout the year, trickle down? Or is it more like an opportunistic timing of like a bulk of those reinvestments?
Jenny Osterhout: Yes. I think it’s more of the latter of what you described. So we’ll look at – as we’re growing out our new products and as we’re looking at what is happening throughout the year with both the macroeconomic environment and with our customers, where we want to make those investments. So it could be both geographically, where we see growth opportunities, it could be based on the product growth. But we want to leave ourselves some room to make those investments, and we’re feeling pretty good about where we are in terms of expenses.
Nathaniel Richam: Got it. Thank you.
Douglas Shulman: All right. Thank you very much. So I see we’re coming up on the hour. So I want to thank everyone for joining us this morning, and we’re looking forward to talking with all of you in the near future.
Jenny Osterhout: Thank you.
Operator: Thank you. And this does conclude today’s OneMain Financial first quarter 2024 earnings conference call. Please disconnect your line at this time, and have a wonderful day.
