Synchrony Financial (SYF) Earnings Call Transcript & Summary

Thank you. Okay. Thank you very much. Brian, so delighted to have you join us, Brian Wenzel, CFO of Synchrony Financial, to our conference.

Great. Betsy, good to see you.

And I think, as you mentioned, this is our first in person. So that's great. I also want to thank you for releasing some data this morning. Very helpful.

You're welcome. I figured if I was coming here, I might as well bring you a gift. So we filed 2 days early. For those of you who have not seen, we filed our 8-K for our May performance, which we look at, and I know you're going to ask a question, we look at it. We think it's a very good report.

Okay. So that is the first question I wanted to ask. How the quarter is trending? So I'm excited that you gave us the data ahead of this meeting. Give us a sense as to what's going on in the most recent month that you filed. What's going on with consumer spend, with delinquencies, with net charge-offs? And how the quarter overall is tracking?

Yes. This will be a little bit long-winded answer because I want to make sure I kind of cover a couple of different aspects of how we look at the consumer, both from a spending behavioral pattern and then credit. So if I start with spend for a second. Our spend for the quarter will be up mid-double digits year-over-year. And I say that, and I also want people to reflect upon, last year, we saw an acceleration of purchase volume last year. When I look at the strength as we step through this quarter, all of our weekend sales, which for anyone, is your highest kind of couple of days of sales during a week, has been stronger than pretty much every weekend in the first quarter. So the consumer is continuing to spend. And when we look across our platforms, 4 of our 5 platforms are doing really well, right? The one that's a little bit behind is lifestyle. But that was comping an enormous volume year, and pull forward really empowers sports and outdoor power equipment last year. But all the other platforms are really doing well. And finally, it goes to the diversification and strength of our partners, but as well as the things that we serve. When I drill deeper into the consumer, the consumers make the choices, right? So I look at certain things. When we look at grocery for a second, in the first part of the year, grocery for us was flat year-over-year, for the first 3 months of the year. The same transaction value, the same transaction value month-over-month. So the consumer was making choices inside the basket. It was switching down, rotating out, maybe taking discretionaries out. But now as you step into May, we saw just under 4% transaction value increase. So that's beginning to weigh a little bit on the consumer. Gas in the first 3 months of the year was up 22%. May was up 36% on transaction value taking gallons out. So the effect of certain rise prices are going in. But then if I take a step back, and I look at the transaction values and I look at the frequency for the consumer, frequency is flat year-over-year in every month this year. So we're not seeing rotation. We're not seeing the consumer check up. The last thing I'd say on trends, we have seen the last 2 months, from a T&E perspective, now we're not big T&E financiers. It's about between just maybe 5% of our book from a [ payment rate ]. That's coming down. So the rate of growth decelerated in April, May, and went into goods.

Okay.

So let me just keep going, Betsy. Let just keep going here for a second. So when I look at that, and I say, sales are great. [indiscernible] continues to be stubbornly high, which is good for credit. So that remains elevated. The growth we showed this morning on an ARR basis is over 9%. The growth in EOP, when you take out the gap, going held for sales, about 5%. So payment rates but that payment rate is still showing the strong consumer, still showing savings. That translates into credit. We've seen certain cohorts migrate back to 2019 levels at all credit spectrums. What we've also seen is really consistency in our delinquency statistics. So year-over-year, I think we're up 35 basis points when you exclude the gap. We bottomed out last year in that June, July time frame. So the rise isn't that significant for us. Sequentially, it's flat. And charge-offs are sequentially flat to the previous month even though we have 4 more cycles. So when I look at the credit side, so we are not seeing any deterioration, which really gives us a very good setup for the back half of the year.

So the follow-up I have on that is 2 things. One, with gas up 36% in May, you're seeing a slight pullback in T&E growth. But is there any other areas where people are pulling back in?

No, we don't see it. We don't see it.

Okay. So the overall spend is up.

They're rotating. So what I would sit back and say, "Well, certainly, some of the people who are, from a cash basis, feeling the pressure a little bit more, are rotating their spend, they're balancing their spend." Go back to grocery is a great example. To have -- in the first quarter, when you start to have inflation coming into the book and the transaction values and frequency were flat year-over-year and month-on-month, they're making choices. And they're going to continue to make choices. But we see strengthening inside the portfolio. So while gas is up, we may see more people stay at home. Our auto business, which was impacted last year with a lot of the continued restrictions and work home, our auto business, so think about tires, muffler, brakes, oil changes, things like that, it's up 20-plus percent year-over-year. It's doing really well. So the consumers -- what I'd say is the consumer is making choices and managing now is the way we look at it. And payment rates continue to be very strong.

Stepping up to the full year. You've got your full year guide out there. And just wanted to see if we could take your temperature on how you're tracking relative to the full year 2022 guide, your NIM, credit quality, RSA, operating leverage, those pieces.

Yes. So what I'd say is, as we we're 3 quarters of the way through the second quarter, I think we feel good about how we're going to exit the quarter and how the back half will set up. So we'll come back and give you more fulsome guidance. But as we look at it, we're executing as we anticipated and as we communicated back in April. So we feel good. And we feel good that, that trajectory will lead us into what will be a good 2023. But obviously, you have to see how the macroeconomic scenarios play out.

And what about deposit betas? You've got some funding from that sleeve and it looks like OSA rates are up a bit. So just wanted to see how you're thinking about that.

Yes. That's been the most interesting thing as we step through this quarter is really what's happening with deposits. If you kind of bifurcate savings and certificates of deposits, our savings beta is in the 30-ish percent, right, relative to what's been done previous week. When you look at the CDs, we're over 100%. So we may actually swing a little bit of liability sensitive here in the quarter because we have people who are really looking to lock up for 16 or 18 months. But we've grown our deposit book well in excess of $1 billion, $1.5 billion year-to-date. So it's attractive. I know there's a lot of anticipation that deposit betas may lag in this cycle. That's not really the case as we begin. I think the market in which we compete in, it's a little bit more dynamic, a little bit more competitive. And we're all grouped in a relatively similar way. So over the back half of the year, that's one thing that we're focused on, is the funding cost to make sure that doesn't become much of a headwind for us because you always lead with liability repricing. That said, we're going to manage liquidity. And we'll try to manage the mix of our loan receivables to average earning assets in order to try to protect the NIM. But we -- again, we feel we can manage it at this point. And we'll see what the Fed and the rate environment continues to do.

So even with the deposit betas coming up in 2Q for you, your outlook for NIM full year is -- still looks on track?

We'll be back in July to give -- to update you on the full year. I feel confident as we exit this quarter.

And then how should we be thinking about the gain that you're getting from the Gap sale?

Yes. So we completed our BP transition. We will complete our Gap transition this week. So we feel good about execution there and the performance we have. Unfortunately, Gap has given us, with their performance, a little bit of asset headwind. That portfolio has shrunk, and they have some challenges. But better than that, the game is going to come in line. And we're going to reallocate that gain into a number of different things, things that drive structural costs. You talked about operating leverage and our commitment to drive operating leverage. We're going to take some additional incremental steps on real estate to get some of the fixed costs of the business out. We're going to invest in certain marketing campaigns around really some of our high-growth portfolio. So where we deploy that. We don't -- we didn't necessarily need to do that, but it's a good use of those dollars for us. So we'll deploy a bunch of the gain this quarter. A little bit will trail into the second half of the year. So we're intending it to be EPS-neutral but we think our smart investments for us to: a, lower the fixed cost side of the business; and b, drive incremental growth.

Okay. And that real estate you're talking about is just exiting leases early? Is that what you're doing? .

Yes, exiting our facilities. Our employee base wants flexibility .85% of our people say we want a flexible work arrangement. That's helped us kind of keep a little bit of pressure off of some of the compensation, driven better retention, driven better applicant flow. But we'll be down close to 70% in the U.S., our FTE physical location. And we're going to be in very strategic places. And we'll bring the teams together from a cultural standpoint in times that matter. So we feel good about the cost base.

Okay. I want to dig in a little bit more on credit because that is probably the #1 topic that comes up when we speak with investors about Synchrony. And the question comes from trying to understand by segment what you're seeing, not just average for the whole portfolio. It's because when we look at deep subprime, we can see it on the auto side in ABS market, obviously, not your business. But I'm just talking about where investors can see some stress in the consumer is if you go into the deep subprime. And I know that's below where you underwrite, because that's like a [ 5 50 ] and below customer base that we're talking about here, where we are seeing stress. But what can you tell us about what you're seeing with credit quality as you think about your segments of consumer?

Yes. First, let me start with the vintages over the last 2 years. So if you look at cohorts in '20 and '21, say 6-month intervals, and look at those cohorts, they are all performing. All 4 of those cohorts are performing better than 2019 levels. So what we underwrote during the pandemic is performing as expected and better than pre-pandemic levels. So let me start there. Secondly, if you -- I wouldn't bifurcate. You split the portfolio into 3 pieces: subprime, prime and super prime, there are elements inside each one of those. They generally be the lower end of each one of those as they have migrated back to 2019 intra-rate delinquency, payment behavior patterns. So we've seen that migration back. That's not surprising to us because at those low levels, they were generally beneficiaries of score migration. So if you're at the lowest level of prime, you migrated up during the pandemic. And they're performing back like more likely that they were. That's not necessarily concerning to us because they're not performing worse than pre-pandemic levels. They've migrated back, right? So we see things in the portfolio that are happening, but they're not concerning to us today. When you look at this, and we get this question quite a bit about, well, I look at subprime and things like that. You have to look at what people are doing or what people did during the pandemic. In the middle part of the pandemic, auto, personal loan and some credit card issues, what they did, they accelerated with deeper. And they also -- one of the more challenging things, they expanded credit lines and expanded going out to people. That is going to create a problem. If you look at our line structure today, even in subprime, we're 2% to 3% lower than what we were in 2019. Again, subprime's 25% less of our portfolio. But really, we've managed this. And we managed it through incremental data that not a lot of auto issuers, personal loan issuers and some folks have access to. We're getting data from our partners. I think we have 7,000 data elements we look at when we evaluate transactions. And the last thing I'd sit back and say is we're not passive, right? So if you look at it, we get triggers from bureaus. So if we see something happen at the bureau, again, we're one of the largest, if not the largest credit card issuer. When you look at accounts, we see the consumer. So we see something that's happening. We can take immediate actions, which I think, as everyone cuts back in. They price through indiscriminately a very bad recession, because I said, I just can't figure it out. We can turn around tomorrow if we don't like something. And we can put credit, refine intent surgically. And we can move certainly when you're at first quarter, we're at 2.7% loss rate, manage the loss rate so it doesn't get out of control. So we feel good about the credit portfolio. We feel good about the customer as they sit today. And we're going to continue to actively manage them with the tools that we outlined. And I encourage people to go back to our Investor Day back in September where we really outlined some of the credit tools and strategies that we have.

7,000 data points.

It's a lot. They tell me that. That credit guys are kind of always -- they're always good at this point in the cycle when they say, "I got 2 7 loss rate. I got all these data elements, I make quick decisions," but they are the best in the business in a retail setting, and we're we continue to invest heavily there. It's really a differentiator for us.

Now one of the things that analysts talk about is how we should think about setting the reserve ratio, and we have CECL. So when we're also sitting here with the backdrop of expecting normalization of credit, right, because we are pretty close to all-time lows given how liquid consumers are, et cetera, right? So how should we be thinking about what the reserve ratio does as losses normalize here, which you have in your plan, right? I mean, you are expecting losses to tick up over time.

Yes. So we all operate, I think, under 3 days under normal CECL before the pandemic came through. Here's what I sit back and say, the first mile marker you put up is -- our Day 1 coverage rate, so call it around 10%, give or take. That's the first mile marker. We will migrate back there. Absent mix, that may move it either way. I wouldn't, at this point in time, think about it differently than that. Now where we are today is the credit model is obviously because of where we are and how we're performing are very strong. We have qualitative overlays because I think if you look at it, we have heavy inflation. We have a rising interest rate environment. We have the Ukraine war. We have disruption in commodities. So we have overlays that say, "Okay, let's just be in some of our scenarios, let's be a little bit more conservative, which is why our coverage ratio is up around that 10, 10, 9-ish, high 10s range." But the first mile marker so -- I don't see why we won't migrate back at some point back to Day 1 CECL.

Okay. And that's an overtime statement.

Yes. I mean, listen, we have a lot of uncertainties today. I mean if you want to tell me how inflation plays out and how the Ukraine war plays out, great. I think it's like things in the last 2 years, I hate to use the term unprecedented, but they're unprecedented. So I think we're being cautious, both in the way in which we run the business and the way in which we think about credit.

Okay. Let's up a little bit and talk about the strategy here and the value proposition to the retailers. I think your value prop is well-known. And what we're trying to understand is how are you working with or going to market with your retailers today that might be different from a few years back given how consumers are shifting their preferences between goods and services, experiences, et cetera.

Yes. The important thing is that when we acquired cardholders and we acquire customers, they generally are the more loyal to the brand in which they operate in. And even our own brands, whether it's our CareCredit brand, our Synchrony Mastercard, they're generally pretty low and the value props are strong. So that's going to continue to drive engagement with customers. We continue to evolve our value propositions. You look to Sam's Club, we rolled out a new value proposition, performing incredibly well there from our standpoint. We just rolled out a new value proposition on our PayPal card, which is more similar to our Venmo card, which is really strong. If you look at Venmo and Verizon, those are really industry-leading type of value propositions that are really driving engagement with the customers. So we're constantly refreshing that. The discussion with our partners though is more around what we offer them. We offer them a multiproduct offering. So we can offer you our SetPay, which is a closed-vendor installment, paying for or shorter-term installment lending. We can offer you a secured card, which we do at Amazon. We go off your private label, we go off your dual card. Well, we can offer anyone in combination or, and we're doing it. And we have a product that's out that really kind of goes through a waterfall at point of sale for smaller merchants. So we're able to deliver that multiproduct configuration. Not many people -- really no one can do that the same way we can. That's what makes us more attractive than I think than a lot of other folks and will give us staying power. We're continuing to build out the distribution side of the business, whether it's through our provider center or our marketplaces to drive customers, right? That's what we're hearing from our partners, how do you help me get more customers, the environment's more competitive. And we continue to do that for them. And because we have that multiproduct settings, we're more able to do that than a lot of other smaller players and fintech players.

And how are you thinking about the general purpose credit card side of the business?

It's something that we like. We've been in a long time. We start out with the conversion of our Toys "R" Us account. It's performed really well as we have a different APR strategy there, but a really compelling value prop. 2% cash back every day. We're continuing now to originate each quarter into that. And listen, we're going to continue to grow that bucket. It's important for us. I think it's great with our brand as we build out affinity with consumers, and we'll continue to do that. But we're doing measure. We're not going to go up and compete in the high super-prime space. We're not going to go low and compete in the subprime space. We're going to look at that niche, the most profitable niche that we know, right, inside of our portfolio, which is that prime customer, maybe a little bit below prime, right in that level where we make a lot of money today inside the core portfolio. We're going to attract those people, and it's performed fairly well for us, and we'll continue to grow it.

Okay, because that's got some attractive profitability dynamics.

Absolutely. Yes.

All right. Just I wanted to touch on some of the newer products that you mentioned. The PayPal cash back credit card. I mean, you alluded to it in your last answer, but I just wanted to understand what you're seeing in terms of new account growth, purchase volumes so far. And just if you could speak to how that product was created, is there any other types of products that you could offer to your retail partners or even leverage for yourself given the technology investment that you made to do that?

Yes. First of all, let me just echo or share the thought. PayPal is such a great partner for us. They are so dynamic. They push us in a very good way to be creative. And while I can't talk to specifics about that card or that program, what I can say is when they looked at the Venmo card, which was best-in-class, it's a rotating value prop. Depending upon how you spend it, it's going to maximize the rewards. So if you're spending more on dining in a given month, it's going to give 3% back. If you're more in grocery in a given month, it'll give 3% back. If you're more in utilities a month, then it will give you 3% back. It rotates to the balance of that. When they looked at that and that experience, they had said, "Hey, listen, we've been doing a PayPal general purpose card or co-branded card for years." And they looked at that experience, and PayPal's a big company. So we like that experience. We like that value prop. How do we incorporate that into the PayPal super app and into that? So that's really the genesis of that. We continue to find ways to grow our business with them. I mean if you look at our PayPal savings account, which is now available to everyone inside the app, we're seeing good growth there in affiliate deposits. And we're not even marketing yet or PayPal is not even marketing yet. So there's lots of different avenues there to grow, and they're continuing to develop their business, and they're just a terrific partner.

Well, and that makes a lot of sense, to have that automatic reset to higher spend category.

Yes. Listen, it's been copied by other issuers, which is the greatest form of a praise. I mean, customers like it. If you haven't seen or haven't done it, you can't even tell it's us. It's also inside the Venmo app. It is really a terrific experience. It allows you to, from the financial education, see where you're spending your money, see where your awards are, see where your rewards are year-to-date, see where your rewards are in the cycle. And you can look at transactions based upon category. It is probably -- I think it's a such a dynamic and compelling partner. It's one of my -- it's probably the top of wallet in my personal account.

Okay. The follow-up there is just around some of the other programs that you've launched recently. I think last October, you launched SetPay BNPL programs with some of your retail partners. Could you give us a sense of what the trends are like there? Is there any difference of credit quality you're seeing coming through that channel? And any feedback that you could?

Yes. It's interesting. The buy now, pay later concept, we do talk inside our company. Everything we do is buy now, pay later. So I say that, but the origination of the product is not necessarily a new product. We have the same product today that sets our revolving accounts, whether it was an installment base. If you're thinking 3, 6, 9, 12, 24 months, we just put it inside a revolving product today. Even the payment for, we had an EasyPay product that was with a lot of our partners as part of a value proposition with them. So they're not new. Now they're just in individual accounts, and they are closed [ end ]. And the way we look at it is being we have a multiproduct portfolio, what we want to do is migrate people up. So if you open a SetPay account and you're taking an installment, our job is to figure out when to offer you and how to offer you an upgrade into a revolving cap. Because the merchants tell us, they want the customer, they want stickiness with the customer. Give me the one product than having to re-underwrite them every time is not necessarily the best experience. So what we want to do is be able to migrate you up. And that's the goal. So in our early stages here, we feel comfortable with the product we've created, with the features it has, the experience that the customer goes through. And we're going to continue to roll it out to our partners that want that multiproduct setting. It is getting a little bit complicated for merchants because there's a lot of different options and what's the optimization. That's why they like us because we can bring a full suite of products to them than I have to deal with 3 or 4 different individuals.

So we could talk about BNPL for the rest of the session, but we only have 10 minutes left, so we'll move on.

Thank you. Thank you.

All right. So the next topic we get a lot of questions on is on late fees. And you've talked a lot about this. And one of the things I think you've mentioned is that if there are any changes coming, that you have other flexibility and things that you could do to help make it up, either partially or fully. Could you just give us a sense as to what you're talking about when you're saying the flexibility that you have to offset any potential changes?

Yes. And we could talk about the probability of what has to happen in order for that -- for a change coming there. But let me just first ground people. RSA for us is a big differentiator. It's one where I know you give, when it's high, it's because we're producing a lot of income. It will buffer you on the downside. So the first thing you think about when I think about late fees is well over 60% is share with partners. That means that there's a big buffer. And again, thinking about how the RSA works, we get the first percentage, then they're sharing with the partners. So in theory, the partners are going to bear a lot of burden if we did nothing. When I look at provisions, when we came out of the CAR [indiscernible], one of the things that we did in our agreements was to back and say, "If there's a change in the regulatory landscape, we had the right to either reprice or negotiate contracting." There's a bunch of places where we control pricing period. So when I look at places where we can either go back to contractual provisions on pricing or I control pricing, substantially all of late fees are covered under that scenario. And substantially all is higher than 95%. So if I look at an adverse change that could happen in late fees, we are protected to a large degree through the RSA and through these provision. We have to execute. It's not going to be easy. But we are protected in a very adverse setting. I just want to talk about the probability here for a second because the challenge that a regulator is going to have is reasonable proportional all was defined under the Fed 10 years ago. And it's been codified both through the Fed and the CFPB through the safe harbor. So if you go back and try to undo the safe harbors, you have to go back and say, "Well, this was a reasonable proportional under your standard that you had." So this is going to be a very challenging environment for a fee that has been highly regulated. It's very different than overdraft fees, which had no regulation, no really oversight. This has been heavily regulated for the last decade-plus. So we'll deal with the outcome, but I want people to walk away with the fact that the RSA and our contractual provisions substantially protects our company.

Okay. One other question is just on expenses and how you're planning on driving the operating leverage this year. I asked the question because there's inflation. It's running hot out here. I wanted to get a sense as to how you're dealing with that on the expense line.

So a couple of things. We are running the company to drive operating leverage. And we're doing that in a matter that looks at the growth in revenue and say your NII growth will exceed your expense growth. And we neutralized the effect of any rate increases. So we will get the benefit of the team say, rates went up, expensively go up. We neutralize that out. So we're really on a rate constant basis. So we'll drive operating leverage this year. We're on track. I think we were below our estimates in the first quarter. And we're going to continue to manage that. Put aside any Gap reinvestment, we will manage the expense base to be -- to drive the operating leverage. When you break down our expense base and you sit back and say, "Okay, where are you subject to inflationary pressures?" Put aside wages for one second. Less than 15%, around 15% would be subject to inflation. So things like postage. There's postage increase that's going to come in the back half of this year. That's been enacted. So we see some of that pressure, but that's not going to be -- it's going to be very manageable for us, I think, from a reflationary standpoint. We watch wage inflation, but we moved last year. We made $20 an hour for nonexempts. We did some things surgically in some of the more competitive areas on our exempt side. We continue, I think, through flexibility being able to manage the wage inflation in a good manner. So inflation, we watch it. We study it. We have discussions with our Board. But our commitment is to run the company with operating leverage on a rate-neutral basis.

And then on capital, you're sitting with a CET1. That's very high, right, 15%. If we fully phased-in CECL, then I think it's around 13.5% or so. Is that right?

Yes, yes.

But that's well above your target of 11%. So can you give us a sense as to how you're anticipating bringing that back down towards your target? Is that like a 1-year target, a 2-year target, a 3-year target?

Yes. So the first thing, and I always bring people back to, we've been on a journey. We came out of our former parent overcapitalized because we wanted to get -- we wanted that exit from them. We took that, which is as high as 18%. We got it down into the 14ths pre-pandemic. In the -- during the pandemic, capital rose up to that 17% level. We've been able to get it down. If you look at our ability to deploy excess capital, I think in the period leading up to the pandemic, we stopped share repurchases. I think we did over $3 billion of repurchases over a 9-month span. So we have the ability to deploy and deploy it quickly. We had $3.1 billion as we entered this quarter under the current authorization. And we're going to be aggressive but prudent to get there in a manner that's reflective of what we see today in the environment, but understand that we have excess capital, and we want to deploy it and get to our operating targets. That will require us to finalize the development of our capital stack. So we have a little bit more to do on preferreds in order to get the full Tier 1 benefit. So that -- it's important to understand, Betsy, right? When you deal with a lot of your stakeholders, they look at the environment and say, "Well, you got inflation. You got the Fed moving. You got a Ukraine war." They see uncertainty. So it's important for us is we set our mile markers with our various stakeholders say, "We're hitting those mile markers," but we want to be aggressive but prudent in getting to that target.

And your comments on pref have to do with maximizing that slice so that you can optimize your comp?

Yes. Well, the 11% we've always said was that based on a flow mature capital stack, right? Because you have to look at the 3 measures. You have to look at CET1, which I won't focused on, Tier 1 and risk-based. You just have to -- you have to hit all 3. You can't just hit one.

Right. And how should we think about timing for that?

We're going to be aggressive but prudent and understand the environment. And we will continue to return capital to our shareholders as quickly as we can.

Okay. Just there seems to be a lot of demand as well for the lending side, so.

Yes. Listen, we feel good. Our business creates so much capital each year when you're earning the type of ROA we have. So we can fund that 10% growth. We can fund a healthy dividend, which we increased 5% starting in the third quarter. We can continue to return shares back to our capital back in the form of share repurchases. Or if we saw a great opportunity, we can deploy it and create growth. But we can grow 10% and manufacture repurchases.

So in the last couple of minutes we have, I just wanted to get a sense from you as to what you're most excited about when you look out 1 to 2 years.

Yes. Listen, I love the energy that our reorganization has put in place. The focus around products and verticals is amazing, right? So we saw this in our health and wellness business, really CareCredit before. The focus when they get up every day to drive things around health care is awesome. We now look at things like home, and you sit around and say, "Okay, before, I Lowe's in one platform, but I had to ask a furniture or another ones." Our Crate and Barrel are one, we had rooms to go. Now when they get up and think about a vertical, they're really getting speed to market, and we're really executing faster. We're sharing ideas across that vertical and across that platform better. So there's a lot of energy around that. Our partners are feeling it. Our employees are feeling. So I'm excited about that part. I'm also excited about products, right? Before we wake up one morning and partner, when you want something, we get that product or we go get that capability. And so this is great. We should probably bring it over to over here. Now we're doing it at a level where we get 95% of it done. And I call last mile delivery is that customization to go to a partner. So our products and speed to market is faster. So I look at speed on products. I look at focus of our employee base around the sales verticals. And I look at the partner set that we have. I mean we were some of the best, highest-growing partners. When you think about the Amazons, the PayPals, the TJXs of the world, they're just really great partners to work with. And then finally, I look at our ability to deliver multi products, our digital capabilities that are best-in-class. It's really unique for us. So I'm excited. And I think our credit tools and our data share will help us manage. Everyone's pricings through some event that's really, really punitive. I feel good about our capabilities to manage through that time period. So we're excited about credit and what we're doing there. And there's a lot -- optimistically, I looked at the company today, the stock is not trading at intrinsic value. That's okay. We're going to continue to execute. And for the people there, we're going to drive value for them.

All right. Great. Well, thank you very much for joining us this morning, Brian.

Thank you.