Rob Beck: I’m not going to say it’s the necessarily the highest ROE or ROA customer. I think what I — because it varies. What I’m saying is when you look at the best assets you can put on there is a portion of the portfolio those small loan customers that have equal and maybe better returns than other parts of the portfolio that you’re putting on and it’s attractive business.
Blli Dezellem: All right. And then taking that a step further I believe that you have given guidance for a 50 basis point sequential decline in your revenue yield in Q4 versus Q3. Would you relate that expectation to what you had just highlighted for us? They seem in contrast. That’s why I posed the question.
Rob Beck: Yes. And the decline in revenue yield that you see in the fourth quarter is really because of the seasonal increase in NCLs and delinquencies which will lead to higher reversals. So that’s going to be what’s driving that impact on a sequential basis. But I think if you were to back out that guidance from the fourth quarter guidance still the resulting revenue yields would be higher than what they were in second quarter. So, the repricing power is in there. It obviously takes time to build as the portfolio turns over and we’re not done repricing. We are always looking for opportunities to reprice, but it gets masked quarter-to-quarter sometimes by the seasonality of the NCLs.
Blli Dezellem: That’s very helpful. Thank you. And then, I certainly see the many uncertainties out in the broad environment. But that having been said, are you seeing anything that leads you to think about being more aggressive with originations?
Rob Beck: I’m surprised I got that question in this environment. Look, we’re constantly asking ourselves as I think you would expect us to do is, are we seeing things that indicate we should lean into growth or are we seeing things that would say hey let’s pull back, right? It’s a weekly discussion if you will. And we’re able to turn those dials on the underwriting side weekly to the greatest extent possible. And so I think that inflation coming down is key. I think we want to see as I mentioned earlier, how our recent vintages continue to mature here over the next three months or so, because look, that’s the best indication is where you tightened or you’re seeing the performance that you expected. And then I think it really comes down to just seeing, if there’s any other macro headwinds that are out there.
I mean we like the fact there’s lots of jobs out there. Unemployment is low. The economy seems to be robust and maybe heading for a soft landing even with some pullback in consumer spending. But we’re mindful of the fact that there are other effects that could hit us particularly, if oil prices spike for some reason. And so we’re just taking that all into consideration. I think it’s partly why we’re guiding to kind of a more modest growth in the fourth quarter versus third quarter because we’re making these judgments real-time.
Bill Dezellem: Great. Thank you for the time.
Rob Beck: Sounds great. Appreciate
Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Beck for any closing remarks.
Rob Beck: Thanks, operator and thanks everyone for joining the call. Look, as we close out this year and approach 2024, as I said, we’re going to continue to monitor the changing macro conditions and the overall health of the consumer. And let me just say again, and I know we had it in our prepared remarks, but we’re focused on the fundamentals, strong underwriting. We’re adjusting our underwriting as needed. We’re focused on disciplined growth and growth as appropriate, as we put on our highest confidence assets. We’re always focused on tight expense management and investing in those initiatives that drive growth and improve our operating leverage and of course, maintaining a strong balance sheet and liquidity. And those are the mantra in which we manage the business and we’ll continue to do so.
And I think like everybody, we’re hoping for a brighter 2024 and we’re prepared to – we’re positioned well for 2024, regardless of the environment but we’re hoping for a very strong environment.
Operator: This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
