Micah Conrad: Yes. Arren, right now, about $135 million per quarter. You remember, we started this program with 3 partners back in 2021, really with a strategy to diversify funding and really build the plumbing for future optionality as well. First of those relationships, we extended through December 2023 that happened a year ago in December 2022. The second one expired this March, we chose not to renew that one. And the third, we just renewed in August. So I would say the market is decent. I think there’s a lot of opportunities for buyers out there with other companies that are struggling a little bit more than we are. So we continue to be open to that market. I think we’re also just very happy as well to put loans on our balance sheet with the diversified funding we have.
But I would expect it to be a part of our programs in the future and we’ll engage and continue to engage with investors and partners there. When the time is right and we think the pricing is right based on what we can generate for holding loans on our balance sheet.
Operator: Our next question comes from David Scharf with JMP Securities.
David Scharf: I wanted to quickly just shift to the yield discussion and outlook. And in particular, noted your comments about it obviously takes time for some of the pricing actions to kind of fully work through the portfolio. But I’m wondering, can you — given that the growth in auto card, I mean it seems like upwards of 1/4 of the portfolio now our newer asset classes, you made reference to the weighted average impact of some lower yielding assets. Could you give us a sense for how we should think about kind of the price increases versus just the product mix and in terms of kind of where the growth is going to come from next year, product mix-wise, are the price increases enough to offset that?
Micah Conrad: Yes. So let me tackle some of the yield questions in there, David and maybe we can kind of circle back on growth expectations. So card right now is $232 million, the auto purchase and distribution channels receivables that we spoke about are about $660 million. So putting both those together still quite a bit under $1 billion on a $22 billion portfolio; so it’s still relatively small. But I also want to point out that when we speak about yield, we’re talking about loan yield. And so the 22.2% excludes the credit card. Credit card, we think about it a little bit differently just because it’s got a bunch of fee based revenue. So we’ll break that out a little bit more going forward when the portfolio for cards becomes a little bit bigger.
And I think we’ve included some of it in our SEC filings as well, the Qs and the Ks. And so when I speak to yield, it’s going to be all around loan yield. That auto purchase and distribution channel business is part of it. We talked about pricing changes in the prepared remarks and you referred to it. We’ve done over 100 basis points since early June. We — as we’re doing about $3 billion a quarter of origination. So for that to flow through a $22 billion portfolio, it’s going to take a little bit of time but it is there and is starting to make a difference. We’ve done a few things there. We’ve increased loans size — We’ve increased pricing through loan size management in certain states that have tiered pricing where the larger loan attracts a lower APR.
And so I think that’s beneficial because it’s credit positive with a marginally lower loan size but also we generate some incremental pricing from that. Also in our affiliate prime segments where we’ve talked about doing a bunch of risk-based pricing over the last few years, given the competitive environment Doug just talked about, we’ve seen some opportunity to increase price there. And interestingly, our core APR which excludes the new distribution channels is currently higher than 2019 levels. So we definitely feel like we’ve taken some good pricing opportunities in the portfolio, that distribution channel pricing is closer to around 17%, 18%. So we like those loans. They have a lower loss — expected loss rate. I talked about how they’re performing from a delinquency and loss standpoint.
But they do generate some lower yield. So that is a little bit of a headwind on our overall yield. But again, we like that business and we expect with this higher pricing assuming it continues, we’re going to be watchful of course, with the competitive environment but we should start to see improvements in yield from pricing but also as this better performing front book grows as a percentage of the portfolio. When that will be, it’s hard for me to say exactly and to what degree. But hopefully, that gives you some sense for what we’re thinking.
David Scharf: Yes. No, no, it’s very helpful. And maybe just a follow-up, digging into auto purchase. Obviously, it failed nicely here. Can you talk about the breadth of distribution? I mean every auto lender franchise and independent is pretty much hooked into dealer track as well as route 1. It’s actually getting an application sent to you, that’s the trick. Can you talk a little bit about just the profile, how many dealerships are you actually kind of receiving applications from currently? Are they all independents or you penetrated franchise. And are some of these prequalified loans that consumers are getting? Just a little more of the dynamic?
Doug Shulman: Yes. So we’re, at this point, only doing a direct auto business with independent dealers. And we have a dealer network management team who diligences the dealers, does appropriate risk screening before they come on monitors them and also has a dialogue about sending us applications and sending us good applications. So you’re absolutely right. It’s easy to plug into something. You need to make sure you’ve got a relationship with the dealers. We’ve got a couple of thousand dealers right now that are active. We — I don’t think they disclosed that number as this thing grows, we’ll talk more about auto. We’re not in with franchise dealers now. That’s an indirect business. And so ours is currently a direct business but we would consider the indirect business in the future.
And like we said, we’ve got good relationships with them. We’ve built this slowly and deliberately. We’ve had a very tight credit box since the beginning, we have a direct relationship with the customers where we have a conversation with them before they get a loan and kind of go through the application and make sure they meet our underwriting standards. And so that’s a little more sense of the business.
Operator: Our next question comes from John Hecht with Jefferies.
John Hecht: A lot of my questions have been actually asked and answered. I guess, one question is kind of on the — not the distribution for auto loans but the distributions for the more core kind of consumer unsecured loans. Any changes in consumer behavior there? Is the reliance upon the branch network consistent with where it was a year ago? Is there more demand sort of just from a digital interaction perspective? And does the changes in that affect your strategic outlook for kind of how you perceive the branch versus online channels at this point?
Doug Shulman: Yes. Look, so we — our distribution is multifaceted and quite diversified. We’ve got our branch network both for new customers but also for former customers and existing customers looking to a lending product or a different lending product. We’ve got digital which we’ve ramped up quite a bit in the last several years. So whether that’s unpaid search on social media, paid search and we’ve also built up a very large email distribution base with former customers, people who came in and applied in the past, et cetera. So that’s a very nice low-cost distribution. We have direct mail which we can quantify, we send out mail, we know response rates. We’ve actually decreased that some in the year. That will ebb and flow based on return profile and kind of the tightness of our credit box.
