John Hecht: How are you, guys? The receivables growth first of all, Micah is that €“ just remind me is that €“ when you’re saying mid-single-digit receivables growth is that comparing average receivables in 2023 versus 2022? And then given that it appears that the card component will be a reasonable component of overall growth, is there anything from a seasonal perspective that will change given the ramp of cards relative to the normal installment book?
Micah Conrad: Yes, that’s a good question. I think the straight answer on receivables is that is the end-of-period managed receivables that we publish. So it will include credit card. It also includes those loans that we are selling through our loan flow agreements. It is not an average calculation. On the in terms of the growth, if you say low to mid-single digits, if I sort of benchmark that at $0.5 billion to $1 billion, we’ve called out we expect credit card to be 400 to 500 at year-end coming off of 100 base. So we’ll call that $300 million to $400 million of that growth with the other $200 million to $600 million coming from the loan book. And that will be a combination of our core loans, which as we’ve talked about have had — the current credit box is pretty conservative.
We tightened dramatically in August of last year. So our receivables reflect having that current credit box for the full year of 2023. It also includes some continued growth in our distribution channels. I would think in terms of normal seasonal patterns, the credit card probably skewed a little bit more towards the second half as we continue to be very conservative there, get comfortable with performance. We will expect to see more growth in the second half than in the first on the card. And then I think in the core loan book, we expect normal seasonal patterns to emerge where typically we have trouble in terms of growing in the first quarter because of tax season. It’s also very accretive to payments and delinquency. But we do tend to not grow in the first quarter and then we reemerge into that growth pattern from second third and fourth.
That’s not what we see it playing out. Obviously still a lot to be determined. But that’s kind of my view as for now.
John Hecht: Great. Thanks very much guys.
Micah Conrad: Sure.
Operator: Our next question comes from David Scharf from JMP Securities.
David Scharf: Hi, good morning. Thanks for squeezing me in here. Just one question. I wanted to follow-up on some comments you made on the prior quarter’s call and this relates to some of Rick’s questions. You had noted I think last quarter that — you had noticed quite a bit of competition pulling back. It manifested in their marketing spend and it could have either been credit driven or lack of ability access on their part. But can you provide a little more of an update on competitively what you’re seeing if any of those dynamics have reversed course, or if you’re still seeing as you define your primary — your prime competitors whether it’s still an attractive customer acquisition landscape, notwithstanding, your conservatism on loan growth?
Doug Shulman: Yeah. I mean, I think the answer is yes. We think it’s a good competitive environment for us. We been through cycles like this as a company. And specifically we built this balance sheet where in good times; we’re not doing just-in-time funding. And so we’re spending more money than competitors for insurance to have our long liquidity runway, diversified funding program. It’s in times like this that it pays off because we’re building our business for the long run. And so the capital markets remain — it’s a difficult capital markets environment, probably a little better now than it was in the fall. And so some of the competition that couldn’t get any access to funding in the summer when delinquencies ticked up across the whole non-prime landscape, probably can get access to funding.
So I think that’s stabilizing some. And so I think some competitors we’ve seen come back into the market with access to capital. With that said, it’s still very tight. It’s very expensive. It’s more expensive for a lot of our competitors getting funding than for us. And so we’ve got advantages around pricing. We’ve got advantages — we can book every loan that we see as attractive and meets our hurdles. So net-net, even with our more conservative credit box, we’re still seeing very healthy demand coming into our products. I think, some of it is the capital markets, some of it is competitors have had to pull back more, either because of lack of equity funding or debt funding. And we think a lot of it is the investments we’ve been making in the last several years, in our digital, in our product innovation, in our customer experience.
And so, the brand we built over time people trust and they come to us and they want to do business with us. So we like our competitive positioning. We don’t take it for granted. We need to earn our customers’ business and their trust every day. And so, we’re going to stay focused on that within our risk appetite.
