Bread Financial (BFH) 28 Oct 212021 Q3 Earnings call transcript

Good morning, and welcome to Alliance Data’s Third Quarter 2021 Earnings Conference Call. My name is Daisy and I will be coordinating your call today. At this time, all parties have been placed on a listen-only mode.

Following today’s presentation, the floor will be open for your questions. [Operator Instructions] It is now my pleasure to introduce Mr. Investor Alliance of Head Vereb, Relations Data. at Brian the floor yours. is Sir,

section we’ll of found and Relations Copy you. be on our the Investor be Thank can sides reviewing website. release the the of earnings

call Officer Alliance President Executive and the and Executive Officer Financial Perry of today, Andretta, Data; Ralph On President have of Chief Chief Beberman, and Vice we Alliance Data.

Also on questions the would reference With at like These speakers call. be subject some earnings contain comments in we GAAP turn with Ralph? no the made call, the Alliance posted filings that responses investors. call measures, information statements. to of of the which to the other the some your on on you I certain Data has website would will today’s remind financial begin, to statements of Investor and information we obligation to to may will alliancedata.com. Andretta. provide and useful like Before Ralph forward-looking Reconciliation will the company’s over to that, to on call believe uncertainties SEC. I for the our and non-GAAP measures the today’s those presented are release risks described Relations update

and thank with start on quarter. for the the thank slide key Good Brian, you. joining. morning three all you I will takeaways for

continue we with Our of as company. considerable to move forward performance progress operating demonstrated the transformation the

strong, strategic long success and to and of decisions the our continue We investments term position profitable have seeing for we working are we growth. company made

a the coming new which quarter. by names on during the signings renewals pipeline few development Our these is the robust, evidenced of business I will highlight slides. and is

we Sezzle of Earlier installment at This will share integrate is example Bread’s with new the payments to another progress ways big continue appropriate announced FinTech drive we with ticket lending versatile new platform. new a can times. growth, week, opportunities win We partnership on multiple platform purchases. our this for that we’ll progress and the

ongoing Our Bread and the investment the stage for in platform beyond. are growth XXXX our scale digital and set capabilities and in

products Our created full growth, total new portfolio responsible to from lending consumer flexibility optimize our suite provide expanded balance of and addressable coupled perspective. margin opportunities market a with opportunities. lending our increased These and has

We are a no outlined few partners long term us on we The product longer a to launch as to remains single event reliant remain success. for our investor sights. growth in drive

leading is growth team Our focused delivering industry partner while leadership net on returns. driving

strong to term to strategic advancing X, strengthen November ownership enterprise we the Loyalty Inc. unique expected management and stimulus opportunities performance credit focus slow our program. economic which and and long Our Alliance remains our Loyalty in growth moderate and both expects payment continue will on use Consumers metrics retain and our rate Ventures omni-channel segment Data sale returned a spinoff ability status risk as as growth. deliver receive the sustainable expire. Alliance metrics We and result Distinct a the Loyalty anticipate will to and to sales as the key level to for government the $XXX holiday credit XXXX to disciplined be from completed Ventures, The we Ventures expected into programs cash XX% interests on is have capital of furthering positions improvements will leveraging. LoyaltyOne expect stimulus credit shopping, of to continue Alliance distribution metrics. million other a and season. is transformation

Total key the net billion in The the TA X expenses loss improvement our sales were allowance point revenue a excluding and third $X.X million. the Credit per with financial X% $XXX remained increased $X.XX. highlights flat quarter of quarter to basis declined of resulting up for nearly spin while XXX TCE total year-over-year approximately ratio earnings reported and X%. for in the share quarter. Revenue for result provides diluted loan as loss XX% Slide year-over-year, our off income in was $X.X provision expect We November. of was metrics for loan billion.

loss Our for quarter, X.X% renewals lowest brand Petland. and quarter new X our renewals. Slide XX the marks third last card in rate signed TOURNEAU highlights as net the and a GameStop with which retail select additions and partner years. partner added rate We

slide. and growth Bread online merchants thoughtfully on are the to of displayed portfolio. the to successfully added continue highlight continues card Bread’s retail the add partner, partners select and El the its of to renewal our onto platform. few drive our of through right direct manage would new current opportunities side to We I payment the optimize platform channel. Dorado, signing business A profitable recent new our acquisition

which on quick on customer to provides and with digital offerings, options exceptional each integration have are our Bread existing vary of announcement Bread’s continue competition. merchant. many with slide. from partners dialogue Bread’s of our We we retail to new the integration I experience progress with sets card and lines, it next exciting Slide that the to Sezzle positive and align platform with cover provides by X apart will the partners’ an enable those flexible business more levels. time working details

and consumers’ they omni-channel capabilities use roll our forward. payment in merchants pay to our very the locations XXXX. products invest have going now, to digital to expand early we’re and the buy is number This of more in engineers will that integration platform One and in-store our later excited require models. Bread’s the physical enhance to out about flexibility continue we capabilities provide area continue at than ability product acquisition as modern We doubled and across

different the direct into days. merchants for the Bread model flexible financing. of our Bread’s was seeing solutions. acquisition we to momentum balance in are In sheet. and model new retain installment for the nearly leverage service platform XX merchant check distribution options FinTech the ability provide network a models addition integrating their to with out XX of business more with payment ticket will the our have Bread across underwrite builds over Looking Alliance installment on in will partners Sezzle’s receivable on loans consumers merchant Data platform the big signed Sezzle’s XX,XXX with to

lending is We merchant of with the that we is progress are to products year. initiate end Fiserv’s and acquiring platforms, our forward by into to our Fiserv offering merchant force vast network of the able in-store in Also, to the all and across Fiserv’s continue expect promote the distribute Fiserv capabilities merchant integrated relationship their dashboard. across with technology POS Fiserv’s our What expansive including to launch our with system Clover sales full XXXX. distinguishes we leverage

now in seeing for All Canada. are in Best offering RBC’s strong we plan, with Microsoft solution by the technology in pay Finally, platform and Buy our Bread Source, program Games, to momentum is is Xbox RBC powered pay and pay Access Canada. the way EB live in exclusive overtime

Additionally, that pipeline there season. midsized the we robust, to RBC expect were to platform have several fourth and with holiday launched small the launches pay quarter. additional RBC’s in to The prior merchants Bread’s plan the remains during on quarter in

AIR for for to we brand completion on The be Data November management is currently well I spin-off expect X. all segment, Slide Inc. is includes Netherlands-based will and departing of transitioning the MILES program. that strong loyalty years. to dedication our a team success all the best rewards LoyaltyOne ventures. over the positioned Alliance The last business lead hard time work to I colleagues and the with on and track the appreciate the in for wish to program Loyalty X. loyalty turn business the review performance which Canada this Ventures Let’s to

in had redemptions and remain strong excited logo the improved are AIR outlook AIR of enhanced on about and the properties. remained displayed with strong. with benefits, new and increased We initial launches October MILES momentum on the optimistic the the quarter. and digital continuing BrandLoyalty quarter issued long-term merchandise September re-launch MILES in As in flight travel campaign into miles as rebrand the a and bookings fourth in a graph as right, rebounds reward redeemed

turn interruptions world, over have monitor Perry. supply chain the including our course, macroeconomic to that I’ll throughout continue environment potential Of to that, we it impact and business. With closely the to conditions

results were third X% up up year-over-year, the for earnings to provision X%, Slide quarter loan by XXXX. was $XX which higher on expenses of PPNR, card yields third eight XX% down excluding for our expense, the lower pre-provision driving Total XXXX quarter the of as result underlying and interest Revenue a third loss, million, driven quarter Thanks, of compared total XXXX currently our in improved receivables from or expenses, core the growth. earnings year. Pretax to focus with provides aligned were Ralph. company. last of resides for

lower provides with segment was income expense Card and strong revenue higher provide the quarter PPNR X%. improvement on lower X% by continued credit from more results in last net lower provision PPNR I provision result metrics. up than expense. quarter. card payment while third a resulting was Services underlying driven our redemptions results primarily strong XXX% combined up will year. third details LoyaltyOne amortization is slides. increased coming a XX%, of Services due combined and EBT cost expense growth, Slide LoyaltyOne year-over-year, the nine down revenue for our the in level Finally, The loss to Card was loan behavior EBT member with of

as of those end a will be consistent present operation. financial a peers. At time, our expect more the format LoyaltyOne statement forward, the in we discontinued the of Looking our to the segment the same year financials to align at with

be For expense example, going we interest to move forward. of interest to plan net part income

a this provide view historic and more will later once We details available year.

Slide Starting left and for will we metrics of company. trends. our on total the some sales credit Moving receivables show XX, XX, average business side to the I our of key review the

we sale billion credit XX% up sequentially. flat were come in by nonrenewal portfolio the the receivables quarter. in or sequentially. third saw figures year-over-year impacted partially slightly of quarter, Average were up sales at the the $X.X and For Both

trends Moving to guidance. Revenue with from second the our the line right. in seasonal and improved slightly quarter, yields

Services lower, continue the mix continue to of funding we of quarter of in low-cost down to be consumer of line the cost from the consistent seasonal XX.X%, yield to We quarter quarter expect transactional shift with the fourth basis lower trend XX balances the trends. revenue funds with yield as second influx Card second approximately toward deposits. to the in more our points

I Turning will XX. to on the upper start Slide left.

increased versus quarter On seasonal delinquency points. the to delinquency to XX X.X% points XX basis down was trends. basis, basis rate year-over-year the previous normal due rate a Our

across rates These X.X%, management upper our as which have last that right, XX a consumer had are well the of lowest stimulus, we quarter industry the of in rates the risk a at is years. disciplined On third rate ability economic loss to higher as you saving and the the finished driving pay. greater can low rate see we result the

steady the seasonal XX.X%. stayed bottom expect our to leading of rate a $X.X Outside rate emerges. more billion, page, at left movements, to certainty a of rather Turning reserve the allowance nearly of flat until economic reserve

right-hand last to a quarter, Lastly, XXXX. slightly XX% bottom revolving for to sequentially expected more Slide on a credit for loss levels, level. anticipated Overall, healthy distribution it perspective historical side get our XX% plus sustainable, we in allows drive would. pre-pandemic the rewarded as projected rates. one year and by risk better the average portfolio expect outlook customer to XXX growth and we risk XX the page, from financial shifted had at the than is reduction lower a of full provides migration take profitable we us driven our The maintain than mix risk from to or that

Our digits full remains receivables up mid-single with double sales credit guidance year in down digits XXXX. year-over-year average

pressure elevated to month-to-month, continues moderating sales While credit growth. are payment related the receivables rates to level growth

our expected gross, are and full Total modestly digital the remain steady operations, for infrastructure, to flat to year. outlook for unchanged, gross technology partially including revenue Our the costs in efficiencies expectation yields to be remains marketing, and higher that card investment down year due full by total will in Bread. that funding improved expenses offset

the seasonally higher expenses expect quarter. in We fourth

into and investments to innovation. plan Looking continue our XXXX we further drive to ahead, to growth increase

or to needed as market have our to We our and investments with to achieve the positive up conditions leverage. outlook operating down ability flex align

are metrics that We adjusting as down. payment year As stimulus be both our loss range. credit moderate programs we full loss rate guidance the X% remains and low, in our rates and anticipate high will wind to delinquency

will and to XXXX low expect high We provide receivables XXXX earnings single fourth our to call January. double-digit resume quarter in in guidance year full growth on

Now Ralph it I’ll to on to Slide transformation XX. progress pass our back discuss business on

Perry. Thanks,

as recently highlight to we’ve Before wanted I transformation. of achieved we move the accomplishments of our Q&A, part on business some to ongoing

business, great of our business loyalty We including which already continue in spin-off our the international strides to make I’ve simplifying discussed. model,

opportunity value we for the on focused our to best where stakeholders. are see We build

was by consumers over focus less develop during our instrumental full of choices adding continues time acquired continue we We our with than with card growing. buy proprietary launched installment desire. our Bread, one to later year to our pay partners. a increasing provide now, they suite a products We ago, and cardholders A and little offerings, which to lending well omni-channel perform million of to which digital

We’re to with including experience Sezzle. to Bread’s RBC, platform the in provide different increase Bread have relationship many Fiserv we and excited built about choices These and flexible ways conjunction strategic improve ability and their payment relationships consumers. platform, customer versatile their nimble to modern expand leverages in and

conversion to in XXXX. are technology processing infrastructure Fiserv We our core our with enhancing

digital million digital. XXXX, and advancement We will over continue invest invest in we $XXX will in in to

industry-leading that driving forward. We is our organization talent added have

We are collaborative inclusive focused and creating on a culture.

the we We work. have changed way

which mature our have and well as prioritize of continued not we and the social driving Last Our our environmental, footprint. to associates have least, better cost increased flexibility, strategy. efficiencies, governance but optimization estate as is productivity real including

experience an and Board produced of race diversity Board refreshment and Directors, gender, reflecting multiyear has outstanding well of program as expertise ethnicity. Our as

including oversight, our year. conducted ESG support We the awareness office, and With across and matters new and business. report, sustainability engaged earlier the dedicated a ESG and of increased DE&I empowered we’ve third-party annual a our on materiality ESG established released shareholders Board assessment this results

look We to a over rolling months. forward new ESG strategy the comprehensive out coming also

sustainable, our our strategic our continue capital remain dedicated competitive of and our open busy, our here. to post that, to do ready Although further to investing which for leverage up are with initiatives Operator, includes metrics been not drive growth. we’ve efforts expected stop We in strengthening spend, to line positioning, improvement the and questions. we profitable the

much Instructions] [Operator very Thank Perry. you

Yes.

well want just question Service Risk participants our is that to the as know Commercial started, Chief Tammy Head Before McConnaughey, as I’ve Officer, Greer, Customer and the asked Val I Officer. to of us let Chief our join

So and I they’re for Q&A. Perry joining the

question open. your Please from KBW. is first ahead. Sanjay Sakhrani from Sanjay, line go comes Our

starting talk everyone and going kind have have? Tim, Thanks. Good Perry maybe this guess peers. involved. on pipeline you one and little Ralph, of can mean so for slide I’ll maybe morning. renewals could with question just on bit, lot you Maybe there. announced that’s a I have touched I upcoming about you and of then appreciate I and Ralph Obviously, but maybe And a Val guys partnership maybe other I’m delinquencies pools. but that credit and might also little look a that’s from and Obviously, given of wins of I Perry for they’re then that one know, your one differentiate subprime we’re for I hearing get the X, upfront a out about, for some talk you you moving consumer Fiserv just that any doing that doing lot in bit stellar. curious, them question, to seeing Tammy away and little they’re I’ll we’re and flush expected just stimulus. if metrics from your inside they’re bit just finance then what what of see you I your a be shifts, you’re And a then second versus subtle peer? their ask turn But companies know for the to is,

Thanks. you discussion flesh could that maybe So just out?

the Wow! should place Sanjay, of you I a lot best think take questions.

pipeline. talk me first, think, let about I So the

put since things That here of done business the development in proactive arrival robust now team. instead of I we a reactive. is think our team One we’ve is

after. may could calendar where renewals the at we partners. we look renewals when us grow marketplace, not pipe in they a the So occur, go for but what’s that of our only they And have we

Our sales Bread. partners robust and new it’s marketplace, very proactive with existing the with force now our enhanced digital is partners, in whether or partners and

are of conversation we to Sanjay, about constant take I them. the advantage of is and distinguishing in is offering it marketplace that factor their mentioned, the think what we merchants. Fiserv, So part their the is On opportunities I can how

We best are sales force selling merchants. selling That is when us force. their part sales they’re of

really We are prospect. sales into integrated part of the dashboard. their We

feel sense. current for I about the base surprised I with their signing. makes beyond us, So good that. partner Val, to It by good wasn’t we’re merchant base. add our But to vast that? anything

No, I think that’s Ralph. right,

Fiserv Clover, dashboard the does just think I integration fully Fiserv that into the integration merchant fact the our platform, force out to not is limited products. which really there along differentiate that sales with is the selling in acquiring and

about the guess say, thing last Sanjay, I pipeline. I’ll the Yes.

We with, and with existing have, we’ll new conjunction partners. as appropriate announce wins in

I’m excited to we’re, and tuned. do stay So that

All morning Sanjay, right. Good this Tammy. is

and quite seasonal in or question quarter, quarter to up say but not I delinquency announce subtle your our our regards So not we trends. second any would We did shift? third yet. whether within that’s credit seen from to

Perry As stabilize. start have we rates to as seen we mentioned, payment expected,

do So over expect we time. normalization

bit propped and stimulus received. the were quite were that consumers However, they a responsible with up actual

And so and what yet, to but some we do anything timing normalization we will expect be haven’t seen the we monitor. quite continue

Our ahead. open. Bob, Napoli next William question your from is comes Blair. Please from go Bob line

Thank you good morning and everybody.

a between is settled? long you I of profit sustainable lot income, discount, term, to investors just a movement in are or maybe merchant it’s can you, seem The trying you then feel seems with the business profit interest now, for revenue it in model yet on maybe to Ralph, figure mean, buy the model model, you, a profit the or come color to Bread. and, The still Do pay flux So there do Tim, later. be mix little the give thoughts. up out It and like so like model? certainly industry your

that later is to is Bob, buy now, remember one our of pay thing we that think I have. product, several offerings it with the

So give economic we’re pay buy It’s reliant we completely not now, model. choice on later the consumers. a

merchants existing a we approach approach perspective basket partners, we partnership we it as approach So and with of pricing. from a

the So respond we you the other now, ability to to terms a where create merchant later we’re we transaction, bit they’re app. a buy market to think pricing, they not of do horse, transaction they from organizations, there because have want with can And about flexible we’re now, be pay help Trojan buy different of in a relying the we you their because if we again, have. can pay get later, relationship and the that so to the download of

is So loyalty their working themselves, merchant we’re loyalties all to to with. the that

So us that the point as marketplace pricing we we’re, we for it. is this we forward. good We in can at move feel compete about feel

Are are going days? then the I partners current XX that that XXX expect you, guess, we of pipeline, the statement XX mean prompted signing does with clients with lot see? to to next days, in customers a should label we’re in new cross-sells And the new see that there in private direct XX

Bob, said, we’ve now, year a me, myself we’re I with I on forward to I So XXX three right I that way. a four day moving signed team think minimum. But and at existing them. of our same get pushed partners the or

partners get of constant and We’re in negotiations move tech into with them stack forward how how as well. with do our prioritization, in we their we other terms

work force that to continues. We’ve a proactive there. invested be So out in sales

more that I push a pedal to XX that continue frequent and metal they expect partners days I in the XX the sign on basis. expect So partners will to

we and many up I’m the with XXX rack pleased as platform. days said, I’m the on how Bread next to, and so looking their So partners you forward far, results see really

a question, expect long I ownership just MILES, that? not to how mean would position? then expect the AIR would long-term you And that’s I XX% Thanks. last in hold

no. No,

that expectation than to Our less hold a is probably year.

to stake. want XX% organization, Loyalty before we consider expectation less on we But selling would so our tax any an we is get a their leakage. year As feet Ventures mitigate that than

John, from go your line Our open. is next Please ahead. from question Pancari Evercore. comes John

seen Can essentially certainty. quarters. comments you or steady you pretty the talk to stable in about thinking after reserves to the releases Back the just from you you morning. more to added slightly in economic that the ratio know prior the Good know topic, very see had about slightly, reserve to it credit you here? you’re I your prepared you reserve I how indicated several kept need

versus expect guess way what I is So here. more the the stable that given it Thanks. about changed reserve you that’s you previously will thinking this I’m given -- that today be outlook

I’ll This is take Perry. that.

XX% changed. So you And thinking a I we’re really the cautious about as maintaining think posture. that think, And I’m it about not think that’s day think lot it has a I where above look the are, is way of we average, only if the way of X. if rest say, you one CECL. you on about industry, the I’ll XX% we’re day at, And above

our one to increase CECL say, closer the to didn’t, extent. we we’re And our same than reserve So day I’ll others.

ourselves So with. to we’ve a that comfortable place got feel we

As reserve down. outlook your haven’t obviously, go of yet inflation, that the economic winding stimulus we look the portfolio. effects conditions, the Tammy in rates, as of The at wage that it. what factors you seen growth, really earlier, government’s into the is spoke unemployment, And there’s a number for

next the that working generation So that’s the well, we we’re model And variable, of watch go to for. want say I’ll CECL through modeling. the third to and companies in all what as

But the for view I’d right now we’ve things say number factors. and to terms of to we in of move So our economic see there’s a maintained reserve of outlook, before rate. unfold waiting the how continue future our

for as know you XXXX expect on with about that Thanks. indicated should in seasonality I investments investments business year? expect we then continue expense you think quarter front, you mainly your expense versus the quarter to for increase XXXX. this on then the levels the increase How And the and more then some fourth into fourth you importantly, and

about right think included I is there. now, interest think is, Yes, remember, expenses in to the expense way

bit fourth a going increases see to quarter continuing points investments. of increase little we’re say, to I’d And basis we’re a see So of that improvement XX the side. in of about, with quarter seasonal on

for But year. we’ll XXXX For January. to operating going next next give again, we’re leverage positive for deliver in guidance year,

So I going worried expenses wouldn’t revenue that our be outpace growth. are to our

Yes.

thing we mind in term, near to not. on could keep flexibility. can we paying we that the off. on off have think in the we are ease think in the investments investments invest potentially I are business, is lean In that We when

flexibility or to have environment expense up on invest in that the heavily and ease base conditions. we So based the macroeconomic the

Thank you.

Carcache Our comes Bill Wolfe Please Bill, line go question next your Research. from from open. ahead.

you. morning, wanted to up transformation. the on business Good follow Thank everyone. I

As your subsidiaries, Have you to thinking about changes start about communicated peers, like to bank any more continue look level? regulators can thinking any you discuss your at before of how enterprise long versus you you’d expect potential capital bank is you levels to the you’re parent how of your range? up And you’ve CETX structure? get that in the your buyback sufficient level rebuilt XX% it peer to at until reasonable to enterprise in capital suspend that the sort subsidiary that XX% intention to

of couple a Yes, things.

that of banking the apprised structure We’ve what should based But we made any we yet as and regulators evaluating we as considering structures, as appropriate be. that obviously, will on our keep not we’re we’re yet. and decision post-spin, So move forward. are

buybacks, of forward that as buybacks to Board, with ensure make our have well is is we we’ll be and want strong we move and are we we capitalized, view that we sustain terms to decision sheet enough that a balance will work and the the Board. with In our

the that also at you At charge-off the another? rates thinking rates? move but think and eventually both not a pace just you’re of Or normalization between necessarily have about XXXX to normalize in payment with charge-offs to payment how in that would the do similar high lockstep rate, can net net range a back Separately, level, you interplay one not do those Understood. in pace? metrics discuss

Yes.

way delinquency back wrong, think to but As rate normalize to, think course, increase delinquency down, the would and you me rates expect start of if correct intertwined, it are the about to payment will some. I will start right? and payment Tammy to I’m

through how were it book new risk months on wouldn’t and knows that’s pre-pandemic Is upon transform future. it that to continue would in different our is XX continue private I as end to For look is, and XX the card get what products products the what business look as and relative our going the co-brand portfolio forward, that Is to our proprietary mix, as the book months? different XXXX or label but we us, for say And will adding to Who payment we they because point lever up that. to is rates expect now? even where Bread. that from in low installment I loan state from then new going depending we’re of

Got it. Thank That’s helpful. taking really you for my questions.

Our comes next America. from Bhatia line Bank go from Please your of Mihir, Mihir ahead. open. question is

give Sezzle us you’d more to the to you. maybe could for partnership, and taking some you questions. just the morning Maybe share. you details that you Good just Thank I thank to wanted be start, if could willing or back go

Is which paying gets to turn the relationship? owns it sign going anyone you loan? going customer for in where just to any on on merchants to work How and or anything can you there? share Just partnership who relationship need the functionality of it going if Sezzle terms sit you? individually? it are Just Sezzle, whose Or it is like additional up that’s the offering Is to details will just revenue Sezzle? sharing loans will to is that who that in get automatically

are Obviously, things confidential.

me Let start.

we of merchants. So XX,XXX Sezzle be for the in their will offering integrated

presentment for loan of choice a their in Sezzle. be that we’ll installment integrated a So for settled be merchants. the presentment But XX,XXX on as will

underwrite. will We

will and for We service the installment receivable loan. will our on sheet balance be

we’ll competition be in pay now, for buy lineup of essential terms In later, later.

Sezzle across opportunity could that about that we again, and left have balance on to out? with work that will we have any So And the feel service we Val, good XX,XXX details other sheet. the our loan provide merchants.

Yes.

of think and Ralph, other you the have do books it’s our I is service the we on and hit receivables and things on it. highlight one there I we own do would because it, ability we the

to also the into We ability products. have cross-sell other

us. at an for model, opportunity aligns installment basis. a relationship our lending and to very good X:X that it’s It So much many gives similar a distribute distribution Fiserv, us product very to to with

had if about just benefit side on quarter, ask you gross this what little then really bit I fund talk nice side. on And and a of a Understood. yield cost drove can share would side? Maybe a the question sustainable for And great for both and on the funds even forward? going expectations quarter? any be like that on that just this XXXX could cost just or yield How NIM you both of gross QX is whether

question. the for Thanks

I prepared gross yield, remarks, about in it’s So seasonal. as talked on the

So I range more it quarter forward, gross to to really what that similar goal maintain except in would to that strong the comments yield. say going steady expect to down not it’s our and offer second returns back to is going on a come that fourth And lot was quarter. to XX.X%

of it as improvement deposit little As continued less reliant or seeing relates we base. are retail cost to of on our funds, growing that cost funds become asset-backed other we’re securities higher a and bit

we fund retail direct lower have with cost more funds. as it consumer portfolio, that So we’ll our deposits grow of

that expect continue down come will would to I So over time.

queue push right and relationships guess, you one jump now, just RBC-type As that. would I’ll yields Fiserv, but ask of that Sorry, gross in only higher? can add these I And wouldn’t back more it RBC I follow-up? after

be No, mix, time, as gross to fair some yields. that lower have the think At gross may that just that’s the a products could direct into when same you a where put it’s an you revenue accretive relationship other yield. stream RBC slightly point is about

streams really outlook. that end depends the on it up mix will gross So the resulting and revenue product

open. Stanley. comes next go Jeff is Jeff, Morgan Our question Adelson line ahead. from Please from your

morning. Good

get just single-digit, a XXXX, timing receivable Just of what trajectory about expectation year end seeing next year? goal the we wanted goal or to double-digit the Now on away you’re of sense for your thinking that? for an growth year? more from couple the wondering expecting more a what of be cadence and end you’re that an the months average we’re for the of this low of of Should or high

we’re into go There’s in which behavior that, Yes. will point, is end customer a growth including the we’ve and that a receivable range. factors lot of a The I this range of At that obviously for said influence, think at. range reason. payment rates range

the team, you’ve think I strong. heard our pipeline is from

and about largely dependent credit driving and then consumer will payment turns business what spend, line good very robust are on activities into health, Our we rate. sales feel be top it

on as just recent a wondering, you with your potential. in Just feels thinking in And involved out there competitive how like out months. part Are guys how the portfolio increased, large you’re wondering wondering portfolio of there, kind the has relationship. Amazon’s right the in that tenor And conversations, about that, intensified pretty just it. of feels Got competition now? It everything conversation? there’s

to in to involved for or will after a conversation. the partner it all hard One it be to of always move And hard be things that And We’re how is forward. ADS integrate will to is, comes go take and profitable it account And to to we how as couple down things. those second, it portfolio? we service?

lot all a midsized play are crushing of are large frankly, margin Some there the portfolios. larger portfolios, about of because for businesses. we out beauty and of there ADS small the in competition can is The the quite

about those middle, and are economics they’re But good billion. $X million do with XX So portfolio, standardization $X that easy you their think put portfolios, little We and and have, margins The there. in have are billion those. together, of and those love a $XXX may customization. some to portfolio, that’s if usually to competition a we portfolios, those you that’s that on very to thin portfolio a magic integrate be your great you

they’re while very to we well. like go very we service very, mid-tier So that those and us, that profitable for portfolio we like

That’s you all guys. I had. Understood. Thank

Deutsche question is go from Please open. your Jiao Meng, line ahead. next Bank. Meng from Our is

are you guys. issues. of still still the have or there my two, do that morning, question. thoughts wanted they’ve believe double to helpful. if Thanks Good color loan persisting I intra be Any Ralph, by ‘XX? receivables on, think quarter, I you begun year-end that moderate? management taking for a loans issues could might mentioned little your management you sort supply chain to impacted get And by supply installment Great. chain would one, installment be then just

couple a of things. Yes,

if season. extended far. now, thus think seen a merchants Christmas is haven’t have are lot right supply I about the from chains. big where chain there’s supply What of about been So they’ve a know we we you talk our impact And done

October, and extended sales into see they’ve to there. starting we’re good some So

So I’m particular. in cards speaking about credit

seem the our apparel, luxury, what forward. of with merchants which they of were some terms going in, might And beauty, be we’re verticals fairly well. in that But we’re holding their up to be that constraints working said,

as impacted we may the So by forward. chain move supply we be

loan In Bread. I’m terms our of doubling are with we very with where receivables, pleased and installment

relationships and As Sezzle got day. I partners with strategic every adding said, Fiserv. we’re We’ve

hit poised We say payment we’re a would down growth the by But really we rates XXXX. in a the probably us couple, end bit. large, little slowed hit scale XXXX. headwind, be of a would are on the headwinds back year, little that the I as for bullish to and really We’ve

is and And my probably for Perry. guess then question Tammy I second

I think growth X% historical loss trend X% there? portfolio lower net losses mix high expect guided range. Or lower structurally Perry in your to see curious sole can you given I’m level? than think And change at rates. to losses if that to X% to loss I profitable you actually rates average back if you the mentioned

the Yes. Thanks for question.

with forward. what doing expect loss more I Again, would rate little structurally what a be going going I lower We we’re we’re mix said we’re to us of expect X% card bringing a that co-brand from to partners rates bit in I what range. some than a space. this on, lower and after, the X% is than proprietary of to underwriting think earlier, able our mix loss the product pre-pandemic strong. have I that But would know

discussed our and future, our be growth will continue critically call And rate. we May than to we going the in normal as continued I again, And that Perry. credit in portfolio shared, right, will are Perry drive loss and And strategies to about our lower think that’s we on mix Yes, forward. important underwriting future talked the profitable account management certainly focus even to that. where that focus on investor us historical a

Our go next ahead. RBC Arfstrom from Please your Capital Jon, comes question is Jon open. from line Markets.

maybe Just simple a you, here, question for kind Perry. of

can be I say a a simple and to as run out rate saying forward look when for your doesn’t And $X. your as numbers, company? just right Or at Or almost in You you that? LoyaltyOne count. taking as call that now earnings that that out is $X, is there by, million simple anything way $XX going it the estimates beat else guess, would in you as look earnings that, is the from at it

are I’m to results. it, models the you I Yes. mean, to a right? the looking seasonality into mean you things how you have run forward. you LoyaltyOne, There a lot as suggest are you at at I but segment think way, Not at that should and I value And not going it your pretty close inputs obviously, of going is would that that look of nature. of extract. reasonable

Yes. Yes.

Okay.

make we simple credit a to So that and from simple basis, and be it’s cost, quarterly it just a could basis, as XXs core view? of saying I a on it’s our decisions question, mean as have high again, point you’re it’s but your on on but own X

good have, do things this that much that cost, you the reserves go how point. is into you investment, credit for how The reserve build grow, much quarter, correct. cost all a seasonality, bit Credit

comes Please Our ahead. with Dominick Oppenheimer. from Dominick, your next Gabriele go question open. line is

And about at installment with the the this between about having partnership. mid great even what labeling Bread partner. product your of just excitement And and and also then can then the Maybe could time talk at your white obviously speak existing cross-sell into an that there’s had loans talk much logo could Sezzle product quarter. having opportunity opportunity the CEO difference a to be? maybe XXXX. you the Bread around so and besides in just Thanks I you lot same to base

possible? So two can the those. that is through partners walk bun so buns, just and bun, of the branded Bread a we Maybe few

going as of together. in. excited as So me I’m start, is Charlie Val in our to let partnership ask terms jump to and am I

think lot a of an for I Charlie. respect, aberration

that and a excited product loans built really in excellent approach, the label with we approach it I because customer is process. to views company. I partner think think great up a an now, just and he’s as great for continuation installment a them. The flow, buy purchase later of pay the white end the buy I’m

critically an which extension no there’s no just out. process It’s important. There’s And punch an of downloading the so app. of is and think an offering, I

not download said customer we’re asking the before, I app. As to our

we merchant’s the there with generate the want for customer right plastic. buy transaction our data on now, merchant and servicing that everything and later do, the with analytics we website. are to We pay And next

a distinguished kind label, not. XXXX, So white between is was of think, Val that, I was I at the

has talk she’ll some and a Charlie about well. So little opportunities as with bit time cross-sell she

Great. Thanks, Ralph.

will sale. at Ralph’s So point a yes, of I those the will relationships. of to be are Sezzle Bread point we and the merchant think on white with own label, for to And way kind Sezzle, center clearly around record and of the front the build receivables. ensure that service

Bread also servicing portfolio. the they’re And that consumer the and see name and loan will so

side. on way branding the nice a So

have on cross-sell. opportunity We an

deposit about the to deposits, If have and on heard talk funds Perry an you think you consumer cross-sell we side. about increasing cost today, of our opportunity

proprietary on We our cross-sell also opportunity to an have card. credit

some customer those continue So to the cross-sell expand to opportunities, base the on with as direct-to-consumer there. we continue we of to have opportunity Sezzle

then more And the maybe just yield on quarter. this one gross

quarter and don’t net may the ‘XX? we quarter-over-quarter the there you quarter-over-quarter, benefit in yield the high charge-offs fee and really so be yield about repeatable yield. just that given running perhaps Just boosted in talk the benefit not go interest a off Could reduction that having third ‘XX probably

the give into tick to, you I’d a back we’ve our we more know get to if of the I’m this extent a yield, normal year, to don’t When that, But steady outside looking to and that see detail back are lot normal little strong that late is look the so up, in. going yield. again, starting I last seasonality signaled seasonality. bit you in gross delinquencies with coming things except of expect yield outside yield in fees of Yes. say, we that

Michael, your is please ahead. Securities. from Young Truist line question from Michael open, go Our next comes

or Thanks sure time the this material if been inflation for better it’s Ralph for we’ve question. volume long versus net average positive the maybe and since just your seen Not Perry, more to in impact And ADS Good receivables get the or that morning. on expense but to if U.S. impact be wanted a is and high-level for would sales not? a to thoughts base,

Yes. points This different debate they range there, of lot on take I’ll the all of a gamut. the views that. is we’re inflation Perry. out reading There’s that and

inflation, credit is with will lines increase the It to customers growth, view So their lines basket available. wage pay. demonstrate doesn’t increases. around perhaps consumer’s that that ability as they lines the And the the of point and have change of goods

overall little as hurt can does a overall growth. as provide and the growth as wage question And I customers’ it, to keep is, think that afford it it. so it next it. the our these that more help aid with So discretion about so cost growth and gives things for that for in doesn’t at year and to that, And long look can is into incentives sales positive the on The customer. you strain the and about create factors buy wage our overall the sales up base more, are, people increased wage doesn’t and are think expand I wages probably more growth Tammy up out to think you that’s that’s a the when if our and ability a us there customers rehire, happening the it, who more companies going of minimum on

mean only I and But us as about expense war getting think you that’s perspective. out about, but wide, move inflation, we move talent forward. think our impact I may expense about see as I on from say And base there. inflation environment the where we think Yes. is thing if wage you also an there I’d impacted it’s a that

different you physical have apologize follow-up, up be fully tailwind stores what what a post your their on just variant? open? have But stores partners stores question. the a as open little I of being remaining more Do of there kind it’s could Appreciate it. perspective And opened. as on kind percentage Delta guys store locations And and a of

Yes.

partners all their And think opening and open. I not their go bricks any have stores the I our there’s I I haven’t heard partners stores. good of traffic. think our to as mortar, of

there’s cautious. mean, mask we think season. expect during are holiday good wearing. traffic I I People the

rules, I the I which everybody obeying is a good is think think thing.

As vaccinations more more, more the see you’ll think I prominent, influx into mall. become

malls So in are a that I’ve not as seen the anything that me we’ve expected concern functioning not would give year. this

question line open. is from JPMorgan. next go Please your ahead. Our comes Reginald from Reginald, Smith

somewhat guys. I and deal. guess then you platform certainly morning, looking Good Bread. I Thanks that Thank about wanted hadn’t a valuation endorsement little I developing second for you. It something it by follow-up is, have Sezzle, my the of the the you than surprising that you question, I’m partnership? a of your feels talk And than taking expected like in questions. what it was the your Sezzle have Sezzle guys a pay bit to look I what to announced for question mind, at Bread using platform. that. an your is get considered the So at are in-house? advantages rather greater I my

to receive you’re going that from the loyalty I dividend think spend. the about

As consider more Sezzle? anything talking in you to substantial

what the think I It’s experience So is a Sezzle customer between right? gets and two about it’s and execution, points, shortest top-quality distance product not about.

XX,XXX access have would the get merchants, development. implement than get a in companies, they they I both We great can been terms So for think when that’s of advantage. that to they faster product top-quality a their

So there’s we’re just market. no It’s in capital outlay.

us, for organizations. a that’s So both both that’s for win-win of I think

relationships, of other new rather than that’s on and balance sheet everything at on our our executing this we’re to looking for on we’re now, really point. in terms strict plate, focused something right put plate our and In

to proceeds the pay one of debt. the just And from Ralph I’ll to what we’re our add down or point said, debt, with required current covenants spin the

invested the So and we somewhere else. wouldn’t proceeds

help your I’m was My on, of get anything I early, sales, on of nature did us sales in-store any business? that dropped kind Understood. I color if of so going your guys guess, can and it covered. But one provide to if more mix what’s within you And in. sure digital not call understand versus

So provide in-store presentation, versus sales. if actually the you in digital we look

impacted see the back so are that, trending. And going in last us you mix but bit consumers a are given And was you’ll I I find provide as our still not this can things it’s And more by go of nonrenewal malls how you’re an partners, that people for seeing resuming strong have, become on a a digital outlook and that to as in-store, for page. little maintaining digital bit don’t resume And the in think presence. little merchant store. Ralph a we quarter really to basically, increasing but earlier, of than we’re that said an

ago, years portfolio. pretty two digital last focus not years the think to of our that sales much a the big mix. much benefits were I thing in We brick-and-mortar was very is we seeing part of heavily leaned in digital, two remember some and the we’re over and

than our we able mall every we’re more online, before. place want where or to -- at it’s now we have So are customers ever the to with them whether transact, transact

from Our your Securities. JMP go final David David, open. line Scharf Please from ahead. is comes question

the of maybe which provider thing with of were the us I you as And One merchants footprint of a additional an what you But the an those questions of product in metrics I’m one in get involved Great. things of exclusive which sense, or ADS of with longer whether we context historically is example, may to contrast just a model last question, for it thanks were whether can when sort squeezing providers? the And know in, there’s give XX get of follow-up term, me terms into This that difficult think wondering, to some maybe pay is merchants? private visibility the evolve. arrangements sort most Bread. days, later, label, end. I client new is in economic arrangement. first signings on is exclusive how to Ralph, now, the the about these XX to morning. current in Sezzle at continue added already lot Good exclusivity. to those same here us about obviously, they direct all not in like sort And buy give for is other be,

Yes.

some be speak can’t sure the That’s exclusive. of them very XX of is exclusive, may I some key in think be the for I merchant them but XX sign may for us So I’m that’s competitive top not pricing But days, the Obviously, to the us to use. put not, table. going the top and or table. of the ease exclusive we’re us going exclusive, put league of at if of to

good rates. We have

transact to We’re they’re and with seamlessly. with consumer, us fair the able

I think add anything approaching in the to how important. terms of Sezzle, we’re of it? that’s terms in most Val,

loyalty And other for driving Ralph is I think we mentioned journey one sales to Yes. us do earlier, model. differentiators add, it of go start more just our that the shopping our as of the partners. market the customer Many would disintermediate order of and is big positioning trying shopping increasing I as an and and to And app. average in for value themselves competition brand the our through really experience

of that model our with partners. well And so type resonates

those differentiator. And would now, thing key pay so a relationships, side, other providing there single is buy a predominantly party Sezzle later. the say I again, on think I that’s And the

exclusive, purchase. And do have singular most are so provider leverage that while in many of the them SMB a the not of point a merchants they mid-market

helpful. broached might while how of in the on of your kind very since updates it’s was that follow-up, on different overall profile? the cost deposit that’s there? detail. of topic of Got funding, mix much in in, the kind No, completely of funding One And been of it. factor funding Any a plans topic terms long term

think at as and time points grow per come for deposits. I’d of I of I we’re a increase expecting period least to portfolio retail we mentioned, No, the quarter XX as mix basis down, we the say,

the of going well a that get into direct. So mentioned, and just funding as offer Val And customers we’ll Ralph we’ll benefit existing as by to alone, as that lower cost. that mix cross-sell mentioned, from we’re --

for joining for for you today. thank in Perry, your all interest and So me Alliance call we and Data. Thank joining Val you us the Tim,

on our to executing be future. plan remain strategy the focused transformation Just and and building we clear, our

terrific thank all everyone, and day, have a you So again.

for you today’s call. Thank everyone joining

You have day. lines may a now and lovely disconnect your