CardWorks, Inc. (ALLY) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. Welcome to Ally Strategic Acquisition of CardWorks conference call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Daniel Eller, Head of Investor Relations. Thank you. Please go ahead.

Thank you, operator, and we appreciate everyone joining us this morning to review the details of Ally's acquisition of CardWorks. You can find the presentation that we'll reference during the call today on the Investor Relations section of our website at ally.com. I'll direct your attention to Slide 2 of the presentation, where we have our forward-looking statements and risk factors. The contents of today's call will be governed by this language. This morning, Ally's CEO, Jeff Brown, and CFO, Jenn LaClair, are on the call to review the details of the acquisition. And we're also pleased to have with us CardWorks Founder and CEO, Don Berman, on the call as well. Following prepared remarks, we have set aside time to take your questions. And with that, I'll turn the call over to J.B.

Thank you, Daniel. Good morning. We appreciate everyone joining on today's call. I'm excited to announce a significant and exciting new chapter in Ally's ongoing transformation to be a leading financial services provider. On the call this morning, we'll provide perspective on the alignment this transaction has with our long-term strategic objectives and the value CardWorks brings to Ally. Jenn will also take you through the financial impacts demonstrating the immediate revenue growth and ongoing accretive, cycle-tested returns generated from this transaction. The acquisition meets all of our strategic priorities centered around a relentless customer focus, solid financial returns and long-term value for our shareholders. We're meaningfully expanding our ability to meet customer needs while enhancing our financial return profile through new income channels. As you can see on Slide #3, CardWorks is an established and scalable credit card provider with the full-spectrum unsecured servicing capability, robust merchant services offering and complementary recreational lending products. The team has built a deeply entrenched business over its 30-plus year history. CardWorks is a top 20 card issuer in the U.S., focused on the non-prime segment. The servicing business spans the entire credit spectrum, serving over 3.8 million active customer accounts, providing real-time visibility into consumer behaviors and trends. Ally's customer base will expand by over 2.8 million, growing the opportunity we have to provide all of our customers with an expanded set of financial products. Don Berman, who has served as the CEO since founding CardWorks over 30 years ago, and his experienced team have grown the business by fostering a strong culture for their employees. I've had the pleasure of forming a deeper relationship with Don since 2018. Our values aligned, and we spent considerable time getting to know each other and our companies before reaching this step today. This was a long and patient process. Execution over numerous cycles is a result of a diligent customer-focused approach evidenced by CardWorks' strong customer satisfaction scores in a market segment where competition is inconsistent and highly fragmented. The devoted and experienced employee base we're welcoming to Ally will immediately enhance our ability to better serve customers and grow the combined company. CardWorks' $4.7 billion asset base generates over $1 billion in annual revenues. Risk-adjusted returns have been consistent over time, including during the economic downturn, driven by a deep understanding of the marketplace and a dynamic, disciplined approach to credit and underwriting. These attributes demonstrate the highly aligned values across our companies and will be cornerstones for success moving forward. Let's turn to Slide #4. 10 years ago, we launched Ally Bank with the objective of being a better bank, not just another bank, centered around a relentless obsession to do it right for our customers. Our differentiated, comprehensive product suite has consistently generated customer growth and industry-leading retention scores. This transaction provides us with an immediate and compelling opportunity to build scale in card and unsecured lending. Ally customers will be able to use one of our products for all of their day-to-day financial needs as we now have offerings in every major banking category. Ensuring a strong cultural fit across our companies was another key component in assessing this acquisition. Across both companies, we found a shared sense of customer focus and an enduring commitment to our customers, associates and communities. Ally's financial profile will be enhanced across our key metrics, driven by immediate and ongoing revenue diversification. CardWorks' strong ROA profile will drive us toward mid-teens ROTCE at the enterprise level in the near-term and will increase our ability to drive operating leverage and efficiency gains. Turning to capital. We expect to maintain a consistent 9% CET1 target. We plan to execute up to $1 billion of share repurchases against our $1.25 billion authorization through the end of the second quarter. Jenn and I remain fully confident in our ability to navigate the impacts of CECL as we integrate CardWorks later this year. The fundamental approach of our capital strategy remains unchanged. And we continue to stay balanced and opportunistic in driving long-term value. As we reviewed on our earnings call a few weeks ago, Ally's financial profile has consistently improved over the past 5 years across all of our key metrics. We've grown tangible book value by $3.3 billion since just before our IPO in 2014, while returning $3.8 billion directly to shareholders through buybacks and dividend payments since mid-2016. We have an incredibly strong foundation in our dominant market-leading auto and deposit franchises and compelling consumer and commercial product offerings, and we're excited to continue building momentum with this deal. On Slide #5, we've provided key details on the transaction. Under the terms of the definitive agreement, which the Boards of Directors at both Ally and CardWorks have unanimously approved, Ally will acquire CardWorks for $2.65 billion. The transaction will be financed through a combination of cash and newly issued Ally common stock. Overall, price-to-earnings and price-to-book metrics are in line with other publicly traded card companies further supported by the incremental returns this business line creates relative to alternative uses of capital for Ally. When we adjust for excess capital, the PE multiples are meaningfully lower. As the majority owner of CardWorks, Don will receive cash and stock, demonstrating his long-term alignment to investor interests in Ally's strategic objectives. Upon closing, he will join our Board of Directors and executive management team, adding valuable perspective in each capacity. We've included $50 million of expense synergies as we expect to drive improved efficiency among customer acquisition costs, vendor expenses and overlapping functions. On funding synergies, we see incremental opportunity within our scalable, growing deposit platform, where pricing and retention trends have proven resilient across a variety of environments. While revenue synergies were not modeled, we believe sizable opportunities exists across our broader product offerings and customer base. A comprehensive diligence process was completed, leading up to today's announcement, and we expect the transaction will close in the third quarter of this year, subject to customary regulatory approvals. Let's turn to Slide #6 to look closer at CardWorks' business profile. Operating as a privately held company since 1987, CardWorks' 1,700 associates will bring strong product expertise to Ally. The top 40 managers have been with the company for over 15 years, and in addition to Don, we're pleased to welcome Dan Pillemer as a key member of our executive leadership team. 20% of employees have been with the company for 10 years or more, validating the strong culture the company has embraced. Across each of the business lines shown here, Ally is adding or enhancing existing capabilities, a key driver for us. Simply put, the CardWorks team has an extensive history in consumer lending and is proficient in assessing and pricing for risk. The consistent customer focus at the company is evidenced by NPS and satisfaction scores well above industry averages. We expect the $3.4 billion credit card portfolio will organically grow over the next couple of years as we integrate the offering and maintain a steady origination strategy. The recreational lending portfolio has generated around 4% to 5% after-tax ROAs with steady asset growth over the past few years. CardWorks' servicing and recovery operations span the entire credit spectrum, generating a durable fee income stream while providing real-time data and insights to consumer trends. This robust capability ensures we have line of sight into customer trends and broad market perspectives. With 3.8 million active accounts serviced today, including over 1 million accounts serviced for others, the business has capacity to further expand operations. This offering is a fully customizable, end-to-end solution well-suited for unsecured and point-of-sale lenders who need scalable, robust servicing operations. Turning to merchant services. CardWorks serves as an acquiring bank for merchants and operates on all of the major payment networks. Combined with our Ally lending product, we now have strong capabilities and payment options for our customers. The merchant offering is a natural complement to the card and servicing capabilities and drives incremental fee income. In 2019, CardWorks processed over $32 billion in transaction volume at over 85,000 merchants. Across each of these areas, the customer-centric approach and ongoing execution has driven strong operating performance. On Slide #7, in the upper left, you can see the consistent growth in the credit card industry over the past several years at a 5% CAGR from 2013 to 2019 with over $900 billion in outstandings. These trends reinforce a balanced and healthy economic backdrop, particularly for the consumer. As shown on the bottom of the page, CardWorks focuses on the non-prime segment and has consistently provided offerings to an underserved customer base that comprises 30% to 35% of industry balances. The significant barriers to entry that define this fragmented segment serve as competitive advantages for CardWorks, including the size and scalable nature of the platform, data and analytics encompassing decades of insights, strong developed approaches to serving customers, expansive marketing capabilities and disciplined execution across fraud, compliance and risk. The opportunity for expansion will be further enhanced through the combination of Ally's award-winning digital products and customer service levels, strong brand recognition and industry-leading retention rates. With that, let me turn it over to Jenn to go through some of the financial details.

Thanks, J.B., and good morning, everyone. I'll begin by echoing how excited we are to move Ally forward in such a meaningful way with this transaction. Today's announcement represents another significant advancement against Ally's long-term strategic priorities. The transaction accelerates our progress towards becoming a leading, diversified consumer financial services company. On Slide 8, we've included CardWorks' financial profile, demonstrating its ongoing success in driving portfolio growth and solid earnings. Credit card represents the majority of CardWorks' income, and we've included a snapshot on the right of the portfolio ROA, reflecting results over the past 3 years. As you can see, strong margins and disciplined management of credit have led to an after-tax ROA in excess of 5%. We've split credit costs between NCOs and other reserves, reflecting the impact of portfolio growth and reserve build. As we move forward, we will be opportunistic in growing the portfolio, remaining mindful of earnings and timing related reserve impacts. As it pertains to CECL, we expect to disclose similar drivers to its ongoing provision as we laid out on our fourth quarter earnings call, including NCO replenishment, changes to portfolio size and mix, and macroeconomic changes. On the bottom of the page, we've included consolidated pretax income trends over the past several years. We've excluded impacts from a legacy equity award related to a 2017 transaction. 2019 results were strong, moderating slightly versus 2018 due to our prior year nonrecurring gain, increased sales and marketing activity and investments in data and technology. Once CardWorks is fully integrated, we expect strong risk-adjusted returns and measured portfolio growth that will drive around $300 million of incremental pretax earnings on an annual basis. Let's turn to Slide 9 where we've included pro forma impacts of 2019 full year results. While not a precise measure of future performance, the customer and financial enhancements are clear. Ally is significantly expanding its customer base, acquiring a company with highly aligned values, evidenced through exceptional NPS and satisfaction scores, while adding revenue and earnings diversification through modest balance sheet expansion. Turning to Slide 10. We've included an extended history of CardWorks' after-tax ROA trends. These results demonstrate an ability to execute in a variety of market and competitive environment, a testament to the team's deep expertise in non-prime lending and servicing. The ROA profile has been solid, including during the economic downturn of 2007 to 2009, achieved through diligent and dynamic balance sheet growth and data-driven underwriting. CardWorks utilizes proprietary data and deep industry expertise to optimize growth. Following the economic downturn, the competitive environment provided an opportunity for profitable expansion, as demonstrated through the portfolio growth levels on the bottom of the chart. The return profile from 2014 to 2017, largely reflects reserve building activity. Overall, these trends demonstrate the team's nimble and dynamic approach to managing the balance sheet and delivering strong risk-adjusted returns. On Slide 11, we've included deal-related items and the financial benefits to Ally's results. Credit card loans will be brought on book at par, and we plan to establish a CECL reserve of 160% of annual net charge-offs. Tangible book value impacts at closing incorporate all items shown here. Ongoing deal and integration costs of $100 million and legacy equity award and retention expense of $95 million will be incurred over the next 2 to 3 years. Due to the nonrecurring nature of these charges, we will adjust these items, along with day 1 CECL and reserve impacts out of our core earnings. Intangibles of $212 million will be expensed as incurred and will remain in poor results. Moving to the bottom of the page. Ally's path have to mid-teens ROTCE is accelerated over the next few years due to the strong returns of this business, including proven results over many cycles. Using Ally's enterprise capital levels, the contribution ROTCE of the CardWorks business is in the 40-plus percent compared to a 12% to 14% ROTCE level associated with share buybacks. EPS and ROA are also enhanced relative to our baseline expectations as a result of this deal. EPS on a cash basis, excluding the impact of intangible amortization is roughly double the results shown here. As J.B. mentioned, our CET1 target of 9% will remain unchanged, and we believe capital consumption in a downturn for the CardWorks portfolio is manageable. The accretive financial impacts and the increased product capabilities and a critical consumer finance product will generate growth opportunities and long-term value for Ally. On Slide 12, we're providing an updated 2020 outlook, including CardWorks. Though the transaction is not expected to close until the third quarter of this year, we expect impacts will be neutral or positive across these metrics. Year-over-year EPS expansion of 10% to 15% remains industry-leading. We continue to highlight that our outlook reflects stable reserve levels under the CECL accounting approach, excluding day 2 potential volatility. Revenue and efficiency gains demonstrate the highly accretive nature of the CardWorks business as revenue expands by 10% to 15% and the efficiency ratio declined by 150 to 250 basis points. On credit, we've added a consolidated NPL outlook, illustrating the limited impact the CardWorks portfolio will have. Moving to Slide 13. The multi-year execution of our strategic priorities has led to meaningful improvement in shareholder value. Beginning just before we became a publicly traded company through year-end 2019, we've expanded adjusted tangible book value by $3.3 billion or 33%. And since the inception of our capital return program in 2016, we've returned $3.8 billion directly to shareholders through share repurchases and dividend payments. In summary, all our strategic actions continue to be assessed through customer value, financial return profile and the ability to drive long-term shareholder value. The track record of financial improvement and Ally's results over the past several years will be further enhanced through this acquisition. We remain confident in our ability to execute. And with that, I'll turn it back to J.B. for a few closing comments.

Great. Thanks, Jenn. On Slide #14, I want to reiterate Ally's strategic outlook. In short, our priorities remain unchanged. We are relentlessly focused on our customers, our associates, our shareholders and our communities. This is deeply embedded in our culture, defining who we are and how we operate. Our associates and teammates remain focused on generating sustainable results across our dominant market-leading businesses and expanded product offerings. The financial enhancements of this deal are compelling, and I want to reiterate that we'll maintain the same disciplined approach to managing risk and capital as we have in the past. All of these ingredients will enable us to continue driving value for our shareholders. The commonalities across our 2 great companies reinforce our conviction and mutual desire to move forward with this transformational deal. And I believe, better positions us to do it right for our customers and drive a solid financial trajectory for the company moving forward. I'm excited about the significant value creation opportunity we have in this transaction. And I believe that while individually these firms are strong, together they're stronger even more. I'd like to turn the floor over now to Don for a few remarks before we head into Q&A.

Thanks, J.B., and good morning, everyone. I want to begin by thanking J.B., Jenn and the entire Ally team for the opportunity to be here this morning. On behalf of the CardWorks Board of Directors, our 1,700 employees and all our customers, clients and stakeholders, I'd like to express how thrilled we are to join forces with Ally and to embark on the next stage of our journey together. When the company was founded in 1987, the mission was clear: provide products and services to customers that help them address their financial needs and improve their lives. Under that premise, and a consistent effort on behalf of our employees to show up and do the right thing for our customers and clients, we've grown the business into what it is today. We've embodied a culture of inclusiveness and accountability and focused on driving solid results through a balanced approach to risk taking. Many of these values, as you've heard from J.B., are highly synonymous with Ally's values. The combination with Ally offers us the opportunity to continue focusing on what we do best with the added benefits of scale, cross-product exposure and increased expertise. Our companies joining together represents a significant milestone and an exciting opportunity for growth. I'm looking forward to being a part of the leg of our journey together. And with that, I'll hand it back to J.B.

Great. Thanks, Don, and welcome to the Ally team. Couldn't be more excited to welcome you, Dan, 1,700 teammates. So it's going to be a great journey ahead, and we're excited to do great things for our customers, our clients, our shareholders, our communities and our employees as well. It's an exciting new chapter for both companies. So welcome aboard.

Thank you very much.

Thank you. And Daniel, I guess, we're ready for Q&A?

That's right. Thanks, J.B. So as we head into Q&A, we ask participants to limit yourself to one question and one follow-up. With that, operator, can you please begin the Q&A session.

[Operator Instructions] Our first question comes from Arren Cyganovich with Citi.

I guess I would just ask the timing of this, why now? I think investors will kind of wonder why buy a credit card company at this point in the cycle when you're kind of towards the end of the credit cycle and likely would have to essentially kind of pay up for these assets.

Arren, it's Jenn here. So a couple of things I'd say. First of all, and I think J.B. hit on this a number of times in his opening remarks this morning, but we are really purchasing this company as a long-term strategic move for Ally. If you look at the growth opportunities this provides, the diversification, the return profile, we think that this company is positioning us not just for the next year or 2 years, but for the long term, and it gives us -- as you know, we've got a very efficient deposit platform that's generating a lot of liquidity, it gives us an opportunity to put that liquidity to work in an incredibly profitable manner. Second, and we included several years of performance. But if you look at what happened in the last downturn, they remain profitable. And I'd say, when we head into the next downturn because the earnings profile of this company, their ability to very quickly toggle back originations or accelerate originations, they're able to navigate a cycle extremely well. And you'll note in that slide that we provided, they actually had their best returns and their most accelerated growth coming out of this cycle. So we're very confident they can navigate the next cycle. And one more data point I'd share with you, just if you look at every single origination or vintage that the company has kind of put on the books over the last 20 years, there's not a single vintage that was unprofitable. And we're looking ahead. The consumer still looks very healthy. And so at least for the near, medium term, we should be in good shape from a return perspective. But thank you very much for the question.

I guess, just as a follow-up, are you intending to expand the credit spectrum for the card business and do more prime or even super prime? Or is it solely going to be focused kind of more on the non-prime segment as they have historically?

Yes, we're going to look at all of that, and we think the combination of the 2 companies gives us a unique opportunity to explore moving into prime. Obviously, Ally has 100 years of experience, predominantly in the prime segment. So we bring that capability to the table. And so that will be something that we explore as we move forward with the integration work. I will say just looking at the non-prime segment where they're operating. There's tremendous opportunity for future growth there. They built a company over 20 years as a top-20 issuing company. They've been growing at 2.5x the industry growth rate. So just even within their current customer segment, we think that there's opportunity. And the real growth platform is moving into digital from direct mail and Ally, I think, provides the right digital platform for them to accelerate growth in that space.

Our next question comes from Betsy Graseck with Morgan Stanley.

A couple of other questions. One, we talked about the strategy on the card business, on the issuing side just now. Maybe you could give us a sense as to how you're anticipating leveraging the other 2 businesses? You've acquired the collections business as well as the merchant acquiring business, and actually, the third one, the RV recreation vehicle?

Yes. I mean, a couple of things. So maybe I'll just kind of jump around on you a bit, but on the collection side, that's going to be really a factor of what cycle we hit, and with this is a counter-cyclic revenue stream for us. And so that will ramp up, depending on the macroeconomic environment. Rec lending is an interesting opportunity for us. They've been able to leverage their expertise in non-prime to generate a business that's tripled in size at a 4% to 5% after-tax ROA. So we like what we've seen. The team has been able to really grow their indirect relationships, and we still see opportunities to grow there as well. On the merchant side, if you kind of look across the businesses, that's an acquiring business. There is the issuing business on cars. And as we've purchased Ally Lending, the HCS transaction, we are very well positioned just overall from a payments perspective. And so we're going to look to grow point of sale. We're going to look to grow issuing with the card business, and we're also going to look to grow the merchant services business. And then last but not least, just on servicing, that is a business that we service our own cards, which is very efficient. And we also have about 1 million customers that are servicing for others. And that, again, that's also a very robust revenue stream for us and it's counter-cyclic and we'll continue to grow that as well.

So is this something that you anticipate enabling within your auto dealers as well? I'm not sure if there's any overlap there as it relates to the recreational vehicle side of it. Or is this a totally separate chain?

Yes. Betsy, I think to some degree, it's a little TBD. I mean, look, the reality of Ally's history, I didn't think we were all that effective in how we managed our RV portfolio. So I think as you're aware, we exited a lot of the recreational lending side over the past, call it, 18 months, 24 months ago. I think what we've seen in CardWorks throughout this process is they've been able to make it work at very attractive ROAs. We talk about 4% to 5% after-tax ROAs. So I think the reality is we'll work with Dan, we'll work with Don. We'll assess the strategy going forward, and we'll understand what were the differences between our legacy model and what they're doing so successfully today. So I think that one's a bit of a TBD, but the economics have been compelling through everything we've looked at.

Okay. And if I can squeeze one more in. Don, could you give us a sense as to how you were able to manage that very strong profitability throughout the prior recession? I know I got a couple of questions from clients, investors on how you're able to execute that?

It's really pretty simple. It's one word. It's discipline. It's knowing when to be assertive in the market and when not to be. And through a very disciplined approach over the 20-plus years that we've been an issuer, we've been able to ride very successfully through the economic swings and really take advantage of opportunities when they present themselves.

Our next question comes from Sanjay Sakhrani with KBW.

I guess, I wanted to follow-up on Arren's question earlier on the rationale for the deal. Maybe, J.B., can you just talk about why specifically non-prime card? Because it seems a little bit of a departure from what you guys do in auto. And then a question for Don. Can you talk about what the constraints were operating alone and what drove you to sell?

Sure. So I mean, I guess, with respect obviously, the 550 to 700 FICO segment is kind of the target market today. I think a couple of data points, I'd say there, Sanjay. I mean, as we stated in the prepared remarks, that 30% to 35% of the consumer universe and credit. So it's a large pool in that sector of the market for whatever reason, is very highly fragmented. There's not a ton of competition. So we looked at it as a huge white space for returns and particularly taking the returns that Don and his team have been able to generate relative to the Ally's business. We thought this was a big step forward there. So we will -- to Arren's question, we'll look at the full spectrum of credit, we'll look at -- do we want to have a higher FICO card. That's probably in the works. I think at the same time, we all recognize how competitive, how expensive the rewards space is when you get up into the super, super prime segment. So I doubt you'll see Ally going that far. But to us, we got ourselves very comfortable with the state of the credit appetite that CardWorks takes today. We see some opportunities to expand that going forward. But hey, any time you can get into a market that's got fragmentation where competition is inconsistent, that spells out opportunity. And so for us, that was a compelling reason why you do it. And I think to tie into Betsy's question and Jenn's comments -- a lot of the business in some respects is countercyclical, right? You got to be disciplined in when you pull back but there are huge opportunities after credit cycle. The servicing business provides great fee income during the cycle. So there's a lot of opportunities broader than just the card origination book that we liked as part of this deal. And then, Don, I guess, the second part of the question, just why now and...

Yes. Well, over the years, we have been approached by a number of acquirers that were interested in, obviously, buying CardWorks, and that has accelerated over the last few years. To me, this is not a time-based transaction, this is really -- I got to know J.B. over the last 18 months, and it was not only learning about the businesses, but learning about the people. And for us, it was really a perfect cultural fit. And so given that the cultures fit so well, the people fit well, it just seemed like the right time. And we think there's tremendous opportunities in coming together.

And then, I guess, Sanjay, also, maybe just to follow-on to your second point, Don, constraints that you had operating the business stand-alone and maybe the opportunities with Ally going forward.

I think the biggest constraint was capital at our bank. We were very well capitalized. But given that we were only a relatively small institution, certainly compared to Ally, it was compelling, given the opportunities to grow and also the digital capabilities and the transition that J.B. and his team has led over the last 5 years, clearly made this a relatively easy decision for us.

I appreciate that. Just one follow-up on the deal IRRs you guys talk about, the 20%. Just trying to reconcile that with the 2% cash EPS accretion that Jenn mentioned. Jenn, can you help me with that?

Yes. I mean, sure. I mean, if you look at the cash EPS accretion. I mean, that's essentially related to just the very strong earnings power of this company. And when you think about this, this is going to generate $300 million in pretax income. And as we get into a full run rate in 2021, we see just great opportunities for EPS, ROTCE accretion, and that will continue to grow as we grow the business. On IRR over 20% that there's some terminal math in there. We've used a pretty aggressive discount rate against that, and it's still a very robust IRR and so part of the rationale of this deal is just looking at the returns that it provides, and we're very comfortable with that.

Our next question comes from Kevin Barker with Piper Sandler.

Maybe this was disclosed, I didn't see it out there, but was there a breakup fee associated with the transaction as well?

No.

No.

No.

Okay. And then when you're considering the diversification strategy, I assume you mulled over buy versus build. When you think about this acquisition, why go down the point of buying a whole platform versus maybe buying a smaller legacy portfolio, start to learn the business and then maybe grow our origination capability over time. So could you just walk through how you thought about the buy versus build strategy?

Yes. I mean, Kevin, it's a good question. And obviously, we've spent a lot of time. I mean, I think, Jenn and I have been very transparent with the Street, but unsecured was skill set or a product offering or capability, whatever you want to call it, that we wanted to have inside of Ally at some point, and so we've studied a lot of different approaches along the way. But I think what we saw in CardWorks is -- look, this is not a unicorn. This is a 32-year established business that's been through multiple cycles, that is extraordinarily effective at servicing their customers, that aligns with us from a cultural perspective, that's immediately accretive to a number of our financial metrics. And so yes, we've looked at smaller things along the way, but nothing seemed to fit all of the elements like CardWorks did. And then obviously, you tie in the cultural pieces that both Don and I talked out, this just seemed to be the right fit for a variety of reasons for both of us. But I look at this as acquiring a very mature business that's done a great job stand-alone. But I think together, both companies are going to are going to benefit greatly for this. And so that's what led us to feeling like this was the right price, the right time, the right team, the right combination to evolve Ally.