Bread Financial Holdings, Inc. (BFH) Earnings Call Transcript & Summary

Up next, we are pleased to have Alliance Data joining us once again. Ralph and the team have successfully managed the company through the pandemic. And more recently, a focus on repositioning the company for growth including expanding its offering across its Bread platform. In addition, it reached a major milestone in simplifying the company with the spin-off of its LoyaltyOne business, which should allow the company to focus on its core card business, including installment and buy now pay later. To do so, it's accelerated investments in marketing and tech to drive improved customer experience and as I mentioned, to drive growth. Joining us from ADS is CEO, Ralph Andretta; and Chief Commercial Officer, Val Greer. In addition, joining us for the Q&A session is new CFO, Perry Beberman. I'm going to pass it over to Ralph, who's going to walk us through a slide and then he's going to then pass it over to Val.

Well, truth be told, Perry is not that new. It's been 6 months. Ryan, thank you. And I want to congratulate everybody for passing a most recent COVID test. Way to go. So what I'll do today is I'll talk a little bit about the fourth quarter, and then I'm going to turn it over to Val to talk about what you're seeing in terms of sales trends and our digital capabilities. And as Ryan said, Perry will join us for the fireside chat. As I mentioned in our third quarter call, our business development team has done a terrific job generating new opportunity for Alliance Data. We have a strong pipeline across all our products, and we're competing and winning deals of all sizes in the marketplace. Just this morning, we announced a signing with the National Football League. So the NFL will leverage our co-brand credit card offerings with the option to add buy now, pay later and installment loan products powered by Bread. We're looking forward to helping the NFL expand its suite of payment products for its over 140 million fans. And that deal will close in the first quarter of 2022. Take a moment to move on to performance to date for the fourth quarter. Receivables growth is trending ahead of our expectations in November, up approximately 2% year-over-year, which gives us confidence in our growth trajectory heading into 2022. Our year-over-year growth rate continues to inflect higher each month. Consequently, with this growth, we would expect to see higher provision expense in the fourth quarter given the CECL reserve methodology and our guidance on steady reserve rate. This may impact our earnings in the fourth quarter. Consumer activity continues to improve as consumers are returning to a more omnichannel experience with the holiday season, shopping both in-store and online. We are seeing early season holiday sales up approximately 12% year-over-year driven by increased in-store activity. Credit performance remained strong, and well reflective of our disciplined risk management and the improvements to our underwriting models which we implemented in 2019. Payment rates remained elevated as expected to gradually normalize over time as a benefit from broad stimulus packages wear off. We see this normalization as a positive development for the economy as a whole and our prospects going forward. Along with this change, we would expect delinquencies to gradually increase over time. Our net charge-off rate for the fourth quarter is trending towards a mid-4% level, which is better than our previous expectations. We are moving into 2022 with good momentum. Our leadership team remains focused on driving net portfolio growth with industry-leading metrics. As we all learned from the pandemic, digital technology remains key to focus for the future. We are investing in our digital abilities to both enhance our product offerings and gain efficiencies across our business. There remains an abundance of opportunities with versatility of our Bread platform, and we are making investments to drive scalable growth in 2022 on the Bread platform. One such investment, which Val will touch on in a moment, give you more detail shortly, is the capability to offer bread products in-store, and this unlocks new payment choices for consumers and is an important solution for our retail merchants. With the successful spin-off of our loyalty business completed, we have transformed the company to be a stronger and better position from a capital, balance sheet and growth perspective. Our Board and leadership team are confident in our ability to continue to execute on our strategic initiatives and drive long-term growth for our shareholders. With that, I'm going to ask Val to come talk about sales and digital. Val?

Thanks, Ralph. Happy to be here. So as Ralph mentioned, we've seen pretty strong holiday sales where the consumers largely kind of shrug off inflation and supply chain concerns. The consumer has been very resilient. When we surveyed our own cardholders, we found about 34% of them said that they would start shopping earlier this holiday season and almost half of those said that they would spend more. We did, in fact, see those sales come through in October, but they did impact what we saw through the holiday weekend. So Black Friday to Cyber Monday, those sales remained very healthy and strong, really driven by an enthusiasm for shoppers coming back in store. In fact, about 70% of our cardholders made a purchase at their favorite retail brand, a location during that holiday weekend. The National Retail Federation said last week that they expect November and December sales to increase 11.5% over the same period last year. Our November sales were very much in line with that. And while we saw strength across the channels, it was that enthusiasm around retail stores that really drove that. The consumer really has the capability to spend and the desire to get back together for the holiday. And we saw that very strongly in our Gen Z and millennial population who is very anxious to get back to the social aspect of shopping. And we saw them participate in in-store shopping at the same levels that we saw in 2019. Many of our products have very strong rewards, very many of them have retail benefits. And so we saw strong usage across our products, be it in the mobile, digital or in-store channel. In talking to our merchants, we've heard that they did not need to use as much promotion and discount to drive sales this year. There's been very strong demand. And with the lower inventory, they've been able to sell at full price. We've seen particular strength around the beauty and jewelry industries where we have good market share, which has benefited us. We also saw a lift in specialty apparel. I would say furniture and home goods were somewhat flat year-over-year. And we also saw a lift in discretionary spend in categories like dining, hotel and travel. So overall, we saw a very robust engagement from our cardholders. They were more active this year. They increased their number of trips, and they also increased their average sale per trip. And while we have seen robust sales, we are also keeping a very close eye on what's happening. So there is some concern out there around the new Omicron variant. The unemployment rates are still higher than what they were pre-pandemic. And consumer confidence is at an all-time low over the last decade. So while sales have been strong, we're definitely keeping an eye through the rest of the holiday season. If you move to Slide 4, we'll review some of our evolving digital experience. Over the last few years, we've really worked hard with our brands to increase their omnichannel customer experience by leveraging the capabilities that we have in store, in mobile and online. We introduced Enhanced Digital Suite, which allows our brands to introduce payment options earlier in the shopping journey driving both higher conversion rates as well as higher average sale. In addition, we've invested in technology, including things like machine learning, artificial intelligence. And when combined with our data and analytics really drives insights and personalization, whether it be it applications, engagement or servicing. We have a full product suite from private label program installment lending and buy now, pay later. Our investments in digital enhancements allow easy access to those products and broader use by the customer base in the payment choice that they choose. So take, for example, we have a customer who is out shopping in one of our brand's physical stores. They see an offer for a payment promotion and a QR code. They take their phone. They scan the QR code. The application is automatically downloaded. The majority of that is prepopulated. Then are a few pieces of information. It's approved. The digital account can either be stored in their digital wallet or a bar code used at checkout. They can complete the purchase in store. And we have about 40 brands live with that technology today that we call frictionless application. You also heard Ralph talk about investing in our Bread products and improving the in-store capabilities. They're very similar to our frictionless application. Imagine a customer is out shopping for furniture. They really love the couch, but they want to be able to spread their payments or a fixed term. There is a QR code to decide the price on the couch. They scan the QR code and up hops offers for them. It could be 12-month, 24-month, 36-month term. They pick the term that best fits their cash flow. They enter the application. When approved, the digital account is downloaded into their wallet. They take that and they check out at point of sale. So they're able to complete that purchase while in store. Offering that full product suite to our clients allows us to unlock a graduation strategy, where we can target customers who may have come in from a more transactional product into one that drives longer lifetime value for the customer and drives incremental loyalty to our brands. For Alliance Data, our benefits are aligned with our consumers and our brand partners and providing ease of choice in omnichannel has grown sales as well as receivables. In addition, that same investment in digital has improved our digital containment and our digital payment. We unlocked our new account center, which improved the experience for our customers. And so we are able to decrease calls, lower our cost of servicing while at the same time increasing customer satisfaction. Finally, I want to quickly touch on Bread. So we bought the Bread platform because of the flexibility and quality of the modern technology platform. The Bread platform is multi-tenant, white label, is API configured and it allows for headless integration. Bread has allowed us to unlock a larger addressable market. It's also unlocked a broader suite of products and allowed us to enter into strategic relationships with folks like Fiserv and Sezzle to scale our products. It also improved our new client acquisition as well as increased tender share for our current clients. While we don't expect receivables to double this year, we've had strong year-over-year growth. We have a compliant product, and we are building momentum coming into 2022, where we will launch Wayfair, scale-out Sezzle and Fiserv and launch our in-store capabilities, along with adding merchants to the Royal Bank of Canada platform. So with that, I'm guessing that we have questions. So I'm going to go ahead and turn it back over to Ryan, so we can answer those.

Great. Thank you, Val, and thank you, Ralph, for the overview. Maybe just to start to think about growth as we look ahead to 2022, Ralph, you're talking about high single digit, maybe even low double-digit average receivable growth, which will likely put you near the top of the industry and I still feel there's a disconnect with what you're expecting and I think investor expectations. So can you maybe just talk about what do you think are the key drivers that are going to enable ADS to grow at that kind of level? And what do you foresee as the drivers of the upside?

Sure. If you think about it, unlike in the past where we were a one-trick pony and we relied heavily on private label credit cards, we have a basket of products now and each of those products will play a role in our growth as we -- in 2022 and beyond. So right off the bat, you're going to get some growth from your existing customer base based on GDP. You're going to see some growth there. Then because of that product set with our existing customer base, we can go deeper with different product offerings and mine that base more so than we have ever in the past. And we will see some growth from there as well. Third is something we talked about this morning, inorganic growth. We'll see inorganic growth. We won the NFL. It's nice to be a first-round draft pick. So we're really happy about that. And you'll see that inorganic growth which is in our trajectory. Fourth, Bread brings an opportunity for us to grow. So if you think about Bread, we have a direct to market that we have a robust sales force. I mentioned in the third quarter, 30 new partners in 30 days. We have Sezzle. We have Fiserv. Those are scalable for us. So we'll see growth there in terms of receivable balances. And lastly, we leaned in over the last 1.5 years on a proprietary card. And that proprietary card has 1 million customers in it and it continues to grow, and we'll continue to lean in on that proprietary card, our direct-to-market strategy -- direct-to-consumer strategy, I should say. So a combination of all those gives us confidence that the sales -- the low single digit -- high single digit, low double digit is achievable in 2022. And if you think about it, the momentum we have going into 2022, we've had for the first time, we're seeing receivables growth in November and we saw some receivables growth in October, kind of doubled it in November, and we got some good momentum going into 2022. So we have confidence in what we put out there.

I was going to say, with the new partnership with the NFL, maybe you can help my Giants finance an offensive line, but...

We're going to have to finance a few receivers in the front line.

Ralph, you talked about steady payment rates and the expectation for them to normalize over time. Can you maybe just help us understand, maybe Perry just -- are you seeing any differences across the customer base, whether it's FICO bands? And maybe just help us understand, embedded in that high single-digit, low double-digit growth, what are the underlying assumptions for payment rates?

Yes. So when we think about the payment rates, they're elevated across all bands right now. The stimulus has certainly helped the consumer out. But we expect that to normalize. I'd say, when they first started coming down, moderating a little bit. And through the first half of next year, we expect slight moderation towards the back half, maybe a little bit more. But we all would love our crystal ball around what consumer payments are going to do. But within the range of what we've put out there in terms of the low single to high double-digit growth, the -- it depends what payment rates do, really. I mean, if it's maybe on a low end, meaning the high single digit. If payment rates remained a little more elevated, we could get to that low double digit a little easier if payment rates moderate a little more. But that's factored into our -- into the direction we've given about it.

And then I think you guys win the award thus far for the most robust fourth quarter update. But anything else that you wanted to add before we get into some of the businesses, whether it's on near-term revenue yields for expense or anything else you wanted to add?

Yes, I'd say I think you're right. You can give a decent amount of guidance so far. Again, seasonally, we expect our yields to be down just a little bit revenue yield. That's a seasonal factor. And the only other piece of information we put out around expenses, expenses will be a little elevated because of discontinued ops. We'll probably take about $30 million of transaction costs as it relates to the spend.

Got it. Val, you talked about the strength in sales and you highlighted some verticals that you're seeing some strength in -- there's obviously been a lot of talk about supply chain disruptions and the like. Can you maybe just talk about -- is this still having a big impact? And -- can you maybe just discuss, as you talked about some of your verticals, where you're seeing a pickup? What do we need to see them further accelerate from here?

Sure. So you're keeping a very close eye on the supply chain as our merchants. I would say so far, we've not seen a material impact to sales as a result of any supply chain issues. I think consumer electronics have had a little bit of a challenge maybe with chip supply, but we've not really seen it impact us. We've got good strength in our beauty and jewelry. I think in Q3, we said sales were up in those categories, 8% and 6%, respectively. Strength has continued to accelerate into the holiday season there. Gen Z and millennials have been very engaged in those verticals. So good strength continuing there. We also saw the uptick, of course, in some of the discretionary spend that goes with getting out in shopping. So good engagement across those verticals as well.

And Ralph made comment in his prepared remarks, I think it was you, Ralph, that said expect provisions to be up. I guess, given the implement -- the implications of CECL or the tax on growth, are you concerned about your ability to grow EPS over the next few years, given high growth and obviously high reserving?

I'll start, and I'll turn it over to Perry, but I am not. It's a balancing act, right? You have to have -- you have to you certainly want growth and you want to manage that growth. You want to manage your expenses, you want to manage all of those, your cost to serve, to contribute to your EPS. So it's -- I think in the past, we very much only focus on the revenue line. I think now with the new team in place in leadership, we focus on every line in the P&L because there's value in every line of the P&L. So we're focusing on how to drive down our cost to serve, how to reduce our cost for fraud, a whole host of things that drive EPS.

No, I think that's well said. And Ryan, you're right. The faster growth means a bigger provision build, and that is CECL tax, right? The -- what we call the growth tax. You've got to take life of loan losses at the end of the period for the loans you have on the books, you're not taking a life of loan revenues. They follow. So we're long-term shareholder value minded and the decisions we make. We're disciplined in that. We make sure we'll get the right returns over time for all aspects of the portfolio that we're managing.

Ralph, can you talked about winning the NFL partnership and obviously, having a strong and fast pipeline for new business wins. Is there a certain size or type of deal that you guys are focused on, on trying to win, given that you said there could be some inorganic growth within the growth expectations?

So the beauty about ADS is we can compete in small and middle market and we compete with the big guys. We have a product set now that can compete with the big guys and the demonstration of that is winning the NFL from an incumbent. But that middle market and small market, there's value there, and we compete there very effectively. I call it the string of pearls, if you will. So there are $100 million portfolios, so you can build into $100 million portfolios. They're highly profitable. They have good margin. They're easy to execute on because they're standard, so there's no customization, standardization, quick to get to market. So if you think about that, you put 5 or 10 of those together with high margins. That's a $1 billion portfolio that we got to market with quickly, and we're able to grow with the partner, and we're able to do that at really, really good margins with no customization. So there's an opportunity. So we can play up and down the scale of.

And the market for partner wins has been competitive. I'm sure the NFL was competitive. And it seems like more recently, has increased. Can you maybe just talk about the level of competition you're seeing as you look to bring on some of these new deals?

Yes. There's always competition in this marketplace. Portfolio - it's the business we're in, portfolios or trade. Right? You don't want the portfolios to trade, you do everything you can to keep them. But you want to keep them so that they're positive. They have a positive EPS to your business. So we're not doing anything irrational. And I think there's some irrationality in the marketplace today for receivables. And so we are very thoughtful about what we go after, how we go after it. We demonstrate to the partner that it's not all about the price. It's about how you grow the pie. How are you going to invest in the portfolio? How you're going to have deeper penetration in the base? And that's what we demonstrated to the NFL, and that's why I believe we were chosen. But there is a lot of competition out there for the big ones, right? And again, that middle market, the competition is less and the opportunities are really good for us, and we're able to bring on those middle market customers at high margins and with limited customization. So it's a good area for us to play in.

You exited the Williams-Sonoma partnership this year, which was a more transactor-oriented portfolio, but you had wins like Tourneau and the NFL. Should we expect further partner attrition in 2022? And if so, is that factored into your guidance?

So wins and attrition is all factored into our guidance. So the guidance we put out in May all factors in, estimated wins and attrition in our guidance. But again, nobody likes to lose a partner, but I think it was -- certainly, it was something that we expect and we factored in that. And if you think about -- even with the loss of that partner, we have receivables growth in November of 2% year-over-year.

Absolutely. Val, I want to shift gears and talk about Bread. You talked about it in your prepared remarks. Can you maybe just give us an update on the progress of each of the 3 different business models? What are you seeing out of the partnership with Fiserv? How much can it scale into 2022? And then -- on your recent announcement on the partnership with Sezzle, what do you see as the opportunity set there?

Sure. So Bread has really 3 models. One is Bread Direct, where we go into market, we acquire merchant relationships directly under the Bread name. The second is really around distribution partnerships. So if you think that folks like Fiserv and Sezzle, where we have an opportunity to scale our products through their distribution. And then the third is really Platform as a Service, where we get a technology fee for transaction, but we don't own the receivables or the credit risk, and that's like our partnership with the Royal Bank of Canada. As we said in Q3, very strong momentum in our direct business, good signing of new clients. That has continued at a very positive rate for us. We've had a few ADS clients signed as well. We continue to have strong conversations there and expect more announcements coming out. Fiserv, we continue to invest in that partnership. We've learned a lot from our e-commerce test and pilot that we put up this year. We continued to build out the in-store capabilities there with Clover, where we'll be on their dashboard as well as virtual card. And so really looking to scale out that program in 2022. For Sezzle, we're really excited to offer our installment lending to their 40,000 merchant customers, and we do expect to drive sales and receivables at a profitable rate in 2022.

So you -- when I go back to Investor Day, you talked about volumes approaching $10 billion by the end, I believe it was $23 million. And you mentioned in your earlier remarks that for this year, you don't expect receivables -- you no longer expect them to double. I think as of the last quarter, you were up in the high 30s, give or take. Has the rollout of Bread to your partners have been slower than you originally expected? Any color as to why? And where do you now stand with the rollout of this product?

Yes. So we aren't doubling receivables this year, but we do have good year-over-year growth there. And I think really importantly, we were really the first bank to acquire a fintech. Really Important to us that we make sure those products are compliant. We put a lot of effort there. Foundationally, our products are in a great spot. We've built a lot of momentum coming into 2022. So as I mentioned, we'll be scaling out both Fiserv and Sezzle in '22. We'll be launching Wayfair. We'll be launching our in-store capabilities as well. So we see a lot of good momentum coming out in 2022.

Ralph, there's been a lot of focus on capital and the need to rebuild it since you took over, and you've done a great job rebuilding the company's tangible common equity, which has been a focus of yours. And I think you talked about a potential improvement to around 7% along with lower debt levels post the spin of LoyaltyOne. So how are you thinking about uses of capital and capital distribution as we look out to the next year or 2?

So if I had to list my uses of capital, first one would be to continue to invest in this business because it's important that you continue to invest. If you don't, you lose momentum. So that's critically important. We want to make sure that we're focused on our metrics and our balance sheet is strong, so we'll continue to deploy capital there. We need to pay down our debt. We did that with the spin and our balance sheet got a shot of B1 with the spin, so we're happy about that. And of course, we want to turn -- we want to turn value back to shareholders. So we'll talk that with discussions with the Board in 2022 and 2023, but how do we return value back to shareholders. But those would be my 4 uses of how I would say we will deploy capital over the next year or so.

Perry, I wanted to come back to credit. When I think about the reserve, your reserve rate sitting at about 10.5%, and I think you came out and said you don't expect much movement from here. This goes back to the discussion we just had regarding the growth tax. What should we expect for the reserve rate trajectory going forward? And then second, I think you're one of the few that we've at least heard from that is expecting to level off at a level that was a little bit higher than Day 1 CECL. What is driving that and what are some of the underlying assumptions that are leading to that?

Yes. So if you think about where we are against Day 1 CECL, we're only 12% higher than our day one rate, where I think the industry overall is closer to 20% higher. So they've got more to release to come down to -- just to get to where we are. And as we look at it and for our customer base, the economic stimulus definitely benefited our customer base, whether it was unemployment benefits or the child credits or whatever it be or payment defaults for student debt. So we are -- there's still a lot of uncertainty what that will mean. And with the new variants of COVID out there, we're just holding a posture of being conservative for a period of time to see how to -- we say steady. There may be a little bit of seasonality, but it's yet to be determined, but we're going to hold posture for a while. As you think about Day 1, is it possible we're going to come down below where we are today? Certainly, our credit mix continues to change. The product mix of the portfolio is changing, all of that will go into the economic -- or the CECL models and the economic considerations as we look forward.

And then just a couple of follow-ups. Your delinquencies, I think, in May reached an all-time low level at 3.2%, but they've now risen 5 straight months. I think those of us who watch it closely would argue that it's largely been driven by seasonality, I think, almost to the basis point. But is there anything concerning you're seeing in the recent uptick in delinquencies? Or would you attribute it more to just the return of growth and ongoing seasonality?

Yes. I think I'll speak for all of us, that we don't have any concerns right now. In fact, I'd say the delinquencies rising at a slower pace than we would have had internal projections to be. So I look at that as a positive. We do expect some normalization to occur. But again, intertwined with the normalization of payment rate of delinquency is payment rate. So really, as delinquency rates rise, I'd expect payment rates to come down, which helps drive receivable growth. So those 2 are going to happen together. And we don't see anything that's going to create a shock event where they'll spike up. We see it's going to be a slow return to normal.

And then just maybe one last follow-up on credit since you guys are a full spectrum prime lender. Are you seeing any signs of normalization across different cohorts, whether it's super prime, prime, near prime? And how do you expect losses to perform over a, call it, 12- to 24-month time frame?

Yes. I think all credit bands are performing extremely well. So that's -- we're not seeing any one in particular that looks like it's normalizing faster. I think you would expect intuitively that your lowest bands would normalize a little quicker as they may incur a little more stress. That next medical bill comes about unexpected because they don't have as much left in the savings tank. So I think that's what I would expect on that front. And then as you think about normalization, we've communicated that we expect to be sub-6%. So we'll be below where we were historically and how that paces in is really a matter of the pace of normalization. And it goes back to I wish we had a crystal ball to say how payment rates will behave and everything else, but the economy -- the consumer is strong right now.

Ralph, can you maybe give us an update on the timing of the monetization of the remaining 19% stake in Loyalty? I think you've noted you expect to hold for less than a year. I guess what are the key factors again dictate when this happens?

It's obviously a consultation with the Board and Perry and when is the right time to sell, but we expect to monetize that over the next 12 months to take advantage of the tax-free transaction. And that -- and the proceeds from that will go down -- will pay additional payouts on debt.

And I guess as just a follow-up, maybe Perry. Are there any ongoing corporate benefits from the spin, whether it's from an expense perspective? But what are some of the releases that the company could see as this transaction is consummated.

Yes. I mean the real benefit of this was simplifying the company and then using the proceeds to pay down corporate debt. A lot of the expense synergies that you might have thought to what you would have seen really happened through the sale of Epsilon and Precima, where we really ratcheted down corporate expenses. When you think about loyalty ventures, there weren't a lot of overlap expenditures. So we've got a lot of that out of the system already.

Got it. One of the big discussion points that has been happening at the conference is just around inflation? And the impacts of that. And obviously, there could be some benefits to sales and Market Express talked about that the morning and that inevitably helps receivables. But on the flip side, what has the potential to weigh on costs, Ralph. And you guys have been adamant since Investor Day on your thought process regarding the ability to drive operating leverage into 2022. And obviously, we're going to see very -- it sounds like we can see very strong top line growth from high-single-digit, low-double-digit receivables growth. Can you just talk about the flexibility you have in driving operating leverage of either, a, receivables growth doesn't manifest itself or b, we start to see higher costs related to cost inflation, whether it's on the wage side or in other areas.

Yes. So you've got a pretty seasoned team now out of lines data. And it's all about that -- how do you manage and pull back or push forward on investments and things you're going to do in the marketplace. So we're able to toggle back and move forward on the investments in the marketplace based on what we're seeing. If we're saying good revenue trajectory, we're going to lean in and invest a little more. If we're seeing revenue lag and we're seeing things that are concerning to us, we're going to pace our investments in a different way. That's a luxury that we probably didn't have before we have now. We've leaned it heavily into digital. So we're seeing the benefits of that in our cost to serve. We are serving more clients digitally than on the line. We've outsourced our noncore activities, whether it be printing and statementing. All that is outsourced, so we're kind of not managing that overhead. We've gotten rid of that overhead. So all that leads to positive operating leverage for us in '22 and beyond. And again, we have the ability to lean in or pull back on investments as appropriate.

We've got about a minute to go here. So we may have time for 1 more question after this. But Ralph, the stock got off to a great start this year given all the excitement around Bread and with the spin expected to happen, but recent performance has been a bit more mixed for you guys and the peer group. And I'm curious on your view, what do you think the investor community is either not understanding about Alliance Data at this point in time? What do you think is the most misunderstood part of the story?

You're only giving me a minute to answer that one. Give me a sec. So I am convinced all our investors are from Missouri because it's a show-me investor group. So if you think about it, I've been here 18 months, and the leadership team, by and large, has been there a little less than that. So we promised -- the Board and I promised a bunch -- a number of things. One is that we would simplify the company. We did that. We sold Epsilon. We spun off LoyaltyOne. We've done that. We said we would manage our debt and pay down our debt. We did that. We paid down our debt. We said we would strengthen our balance sheet. And again, the balance sheet got a shot at B1, so at [ 7% TC ], we strengthened our balance sheet. We said we would diversify our product set. We've done that. We have buy now, pay later installment loan. We leaned in our proprietary card. We've enhanced our capabilities with Fiserv, all in progress. We've done that. We said we would build a leadership team from internal to external. And I think we've built an amazingly competent leadership team as well. And by the way, we've done this all within COVID. And so I think -- and lastly, we said we would be more transparent with our investors. And I think -- I hope you would all agree that we've done that. We've been more transparent with our investment. So to me, it's -- we are not overpromising and under delivering. We are saying exactly what we're going to do. We're executing on it. We're very maniacally focused on execution, and we're getting it done. And I think that will, over time, sway the investors on our stock.

Great. Well, unfortunately, we're out of time, but please join me in thanking the team.