Q3 2024 Bread Financial Holdings Inc Earnings Call
Good morning, and welcome to <unk> Financial's third quarter 2024 earnings Conference call.
Michelle: My name is Michelle and I'll be coordinating your call today at this time all parties have been placed on listen only mode.
Michelle: Following today's presentation the floor will be open for your questions to Register a question. Please press star followed by one one.
Speaker Change: It is now my pleasure to introduce Mr. Bryan <unk> head of Investor Relations financial.
Speaker Change: The floor is yours.
Bryan: Thank you copies of the slides, we'll be reviewing in the earnings release can be found in the Investor Relations section of our website at Brent financial Dot Com.
Bryan: On the call today, we have Ralph and dry dock, President and Chief Executive Officer, and Perry Beaver Executive Vice President and Chief Financial Officer before we begin I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward looking statements. These statements are based on management's current expectations and aside.
Bryan: And are subject to the risks and uncertainties described in the company's earnings release and other filings with the SEC.
Bryan: For the quarter, including expenses net income and earnings per share. Accordingly, we provided reconciliations in our earnings materials to our adjusted or non-GAAP results, which we believe will help stakeholders to more clearly evaluate the ongoing operations of the company.
Bryan: Additionally, our overall funding mix continue to improve with strong direct to consumer deposit growth and reduced wholesale deposit funding for.
Bryan: For the quarter, we generated adjusted net income of $93 million and adjusted diluted earnings per share of $1 83.
Bryan: Adjusted to exclude the $91 million post tax impact from the premium paid on our repurchase convertible notes.
Bryan: Tangible book value per share of $47.48 increased 12% year over year, while our common equity tier one capital ratio increased 40 basis points year over year to 13, 3%.
Bryan: During the quarter, we completed the portfolio acquisition and launch of the Saks Fifth Avenue credit card also in October we launched our hard rock credit card program. We are excited to share our cross channel expertise with these partners, enabling us to deliver strong value propositions to our customers.
Bryan: Okay.
Bryan: Turning to the consumer spending patterns have remained consistent with the second quarter as consumers made more frequent shopping trips with lower transaction sizes spending continues to be more heavily weighted towards non discretionary purchases, which are enabled by our expanded co brand and proprietary products along.
Bryan: With back to school items at apparel and discount stores.
Bryan: While inflation continuing to normalize gas prices declining growth in real wages and a stable labor market. We are starting to see signs of stabilization in credit sales and still expect a gradual economic recovery.
Bryan: To offset the potential impact of the Cfpb's final rule on credit card late fees, we continue to execute on our mitigation strategy in close coordination with our brand partners.
Bryan: We have various pricing changes in the market, including increased Apr's and statement fees.
Bryan: On the left reflects the diversification of our product suite.
Bryan: Our fully integrated suite of products consist of private label co brand and proprietary and bread pay which is our installment lending and buy now pay later platform together. These products have improved our loan portfolio and our credit risk profile or.
Bryan: Our expanded product suite has led to gains in consumer's wallet share and more non discretionary spend particularly as consumers have shifted their spending patterns given the macroeconomic pressures co brand and proprietary represent more than 50% of our total credit card sales and we expect this ongoing shift to continue.
Bryan: In the light of the current economic outlook and potential regulatory changes shifts.
Bryan: Shifting to the chart on the right we are well diversified across our approximately 100 brand partners with several recent partner additions in electronics and travel and entertainment.
Bryan: As a result travel and entertainment is now our largest vertical from a sales perspective at 32% of total credit sales.
Bryan: We are confident that our product and industry vertical diversification provides stability and will help us reach our long term financial targets, while delivering strong sustainable shareholder returns.
Bryan: Okay.
Bryan: Turning to slide five throughout the year, we have focused on growing responsibly, managing the macroeconomic and regulatory environment, accelerating digital and technology capabilities and driving operational excellence.
Bryan: Our product and portfolio diversification, along with our proactive credit management and disciplined capital allocation are key to growing responsibly, we closely monitor trends in consumer sentiment and spending and payment behavior. In turn we can then adjust credit and marketing plans to meet our partners' and customers' needs while at.
Bryan: Delivering strong risk adjusted returns.
Bryan: Okay.
Bryan: I also wanted to point out that this quarter the dilution impact of the remaining convertible notes on our diluted EPS was negligible. So we did not provide adjusted diluted EPS, reflecting the offsetting value of the cap calls this quarter. However, as I mentioned this offset remains in place.
Bryan: Now shifting to the financial highlights during the quarter credit sales of $6 5 billion decreased 3% year over year, reflecting moderating consumer spend and our ongoing strategic credit tightening partially offset by new partner growth.
Bryan: Average loans of $17 8 billion in the third quarter increased 1% year over year benefiting from new partner growth.
Bryan: Revenue was 1.01 billion in the quarter down 5% year over year, primarily due to lower late fees, resulting from our gradual shift in product mix, leading to a lower proportion of private label accounts.
Bryan: Additionally, we had lower merchant discount fees, driven by lower big ticket credit sales as consumers pulled back on large discretionary purchases.
Bryan: Total noninterest expenses net income income from continuing operations and diluted EPS have all been adjusted for the impact from our repurchase convertible notes, which primarily represented a premium paid.
Bryan: All adjusted figures are non-GAAP financial measures and a reconciliation table can be found at the bottom of the slide as well as in the appendix along with our non-GAAP financial measures.
Bryan: Adjusted total non interest expenses decreased 5%, excluding the $96 million pretax impact from a repurchase convertible notes the.
Bryan: The decline was driven by a reduction in card and processing expenses, which was primarily due to lower fraud losses.
Bryan: Adjusted income from continuing operations was $94 million and adjusted diluted EPS was $1 84.
Bryan: Excluding the $91 million after tax impact from our repurchase convertible notes both impacted by a higher provision for credit losses in the quarter.
Bryan: Funding sources, including secured and wholesale funding to efficiently fund and manage our long term growth objectives.
Bryan: I'll also note.
Bryan: That in October we extended the maturity of our $700 million senior unsecured revolving credit facility to October 2028 with improved terms.
Bryan: These improved terms include updated covenants that provide additional future capital action flexibility further evidence and recognition of the positive actions that we've taken to strengthen our balance sheet and our commitment to disciplined capital management.
Bryan: Moving on to slide nine.
Bryan: Our delinquency rate for the third quarter was six 4% up 40 basis points seasonally from the second quarter.
Bryan: From this point forward, we expect future quarters to largely follow historical seasonal trends subject to continued broad macroeconomic improvements and gradual benefits from our strategic credit tightening.
Bryan: The net loss rate was seven 8% for the quarter compared to six 9% in the third quarter of 2023 and eight 6% in the second quarter of 2024.
Bryan: The third quarter net loss rate is expected to be the low point for the year.
Bryan: Although the fourth quarter, we will see some timing benefit from the customer friendly actions, we have taken for customers impacted by the recent hurricanes as Ralph mentioned.
Bryan: These actions will result in a reduction to fourth quarter 2020 for losses, and an increase in the second quarter of 2025 losses.
Bryan: Simply put reflecting timing as we support our effective customers.
Bryan: Overall, our baseline outlook assumes a slow gradual improvement in the macroeconomic environment as it will take time for the effects of a prolonged period of elevated inflation to be fully absorbed by our consumers.
Bryan: Including ongoing investments in technology modernization and digital advancement, along with reduced fraud, we expect adjusted expenses, excluding the impacts from repurchase convertible notes to be down mid single digits relative to 2023.
Bryan: We would expect fourth quarter expenses to be higher than the adjusted third quarter figure based on seasonally higher sales volumes and further increased marketing expenses.
Bryan: As I mentioned earlier.
Bryan: Third quarter net loss rate is expected to be the low point for the year and we continue to expect a full year net loss rate in the low 8% range for 2024 or around eight 3%.
Bryan: Given the recent devastation the hurricanes of course to the communities in which a number of our cardholders lift we have proactively frozen delinquency buckets and FEMA identified impact zones designed to provide some near term payment relief until we have the opportunity to engage them for longer term solutions as needed.
Bryan: These actions will result in a modest shift of approximately $10 million in losses from the fourth quarter of 2024 to the second quarter of 2025. This will slightly lower the net loss rate in the fourth quarter and increased the net loss rate in the second quarter of 2025 that modest accommodate.
Bryan: As an aside our outlook continues to assume a gradual modest improvement in the economic conditions aligned with economists consensus.
Bryan: Finally.
Bryan: Our full year normalized effective tax rate is expected to be in the range of 25% to 26%, excluding the impacts from our repurchase convertible notes.
Bryan: As expected the tax deduction allowed on the repurchase premium paid was limited.
Bryan: Looking at the bigger picture, we continue to make meaningful progress towards our financial targets, we provided at our Investor day in June.
Bryan: Steps to increase Apr's in anticipation of the rule.
Bryan: Since then we've implemented a number of changes that are in market, including APR increases in paper statement fees APR increases just take a lot of time to I'll say burn in to build an effect and so that's where my comment in the fourth quarter.
We will start to see some of that benefit, but it will offset other.
Bryan: Seasonal things happening in the quarter and then as you start to go into next year some of that will build.
Bryan: And we will give more color on that here as we get into next.
Bryan: Next year and some of that is shared back with partner. So it's again.
Bryan: The goal here is not to.
Speaker Change: This is an intended consequence of this we deem is a flawed CFPB late fee rule.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you. Our next question comes from Sanjay <unk> with <unk>. Your line is open.
Speaker Change: Thank you good morning.
Sanjay: Gary just to go back on the credit stats I guess, when we look at that second derivative of the year over year change in delinquency.
Sanjay: That does steadily continue to improve I guess based on your comments do you expect that to Jess.
Sanjay: <unk> as we move forward I know.
Sanjay: There was some comment on like the late stage delinquencies not necessarily seeing a lot of improvement is that changed in any way I'm just trying to think about.
Sanjay: Any tightening that you guys would have done and how that sort of impacted the credit metrics that positively help your credit metrics as we look into next year. Thanks.
Speaker Change: Yes very.
Speaker Change: Very fair point.
Speaker Change: The credit actions that we've taken certainly.
Speaker Change: Have.
Speaker Change: I'm, sorry hear some feedback on the line.
Speaker Change: Is benefiting our.
Speaker Change: Our all star actions.
Speaker Change: Do you think about the stability that we've seen in <unk>.
Speaker Change: I would have.
Speaker Change: Expected and then go into the first quarter, we did comment that there.
Speaker Change: Typically is seasonal increases when you go from fourth quarter to first quarter and the reason why we thought that was important in the past to make sure. We reminded people that we actually saw a number of models that had losses going down in the first quarter and didn't want people to be surprised when it actually does follow some seasonal trends now that lots of credit actions out.
Speaker Change: There were taken.
Speaker Change: Doing things that will hopefully.
Speaker Change: Some of what may be historical rise has been but there is going to be an expected increase and then.
Speaker Change: Things should then follow some seasonality from there as well as <unk>.
Speaker Change: Then, it's macro and credit action dependent upon how much it can improve beyond that point.
Speaker Change: Adjusted for that in the $10 million hitting into the second quarter, but take that aside.
Speaker Change: The best I can give you at this point, we will obviously put a finer point on that as we get closer to it and we gave you the January guidance in January.
Speaker Change: Okay, Great. That's very helpful. Thanks, so much.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Jeff Adelson with Morgan Stanley. Your line is open.
Jeff Adelson: Hey, good morning, Ralph.
Speaker Change: Good morning, Good morning, Perry Perry you talked about the.
Jeff Adelson: And the impact of higher prices.
Jeff Adelson: Hi.
Jeff Adelson: Growth here.
Jeff Adelson: <unk> highlighted.
That dynamic is part of the reason why you are late stage roll rates have been more elevated.
Speaker Change: I was wondering if you could just maybe give us a quick update on how the late stage dynamic has been evolving.
Speaker Change: And I guess as we think about the rest of 2025.
Speaker Change: Should the seasonality cadence for charge offs be similar to delinquencies or is there any sort of dynamic in the roll rates that might be impacting that seasonality.
Speaker Change: Yes. So great question, let me, let me give you a little bit on the <unk>.
Speaker Change: The thought on the economy, because I think this is an important point as we have seen some stable signs and stable economy with some signs of improvement. So you would expect that to start to assist some of the roll rates and delinquency like we're seeing improvements in early stage delinquency.
Speaker Change: If things play out better than that should improve but it is too early to declare victory right now in the economy and inflation I think there's something to acknowledge themselves. So we still see areas of concern regarding the consumer and the economy overall.
Speaker Change: Inflation is still remains above the fed 2% target and there is especially true for stickier categories like shelter medical and insurance all still about 4% and so that is still concerns us with the I'll say the general consumer.
Speaker Change: And this has been a problem and you think about small business sentiment there.
Speaker Change: And inflation.
Speaker Change: So that's going to be the key and I don't have it.
Speaker Change: I'll say a ton of confidence based on what I've heard from policies from either.
Speaker Change: Party right now what might happen to inflation, and we'll really below March down or is it going to be some things that might draw.
Speaker Change: Drive it back up so I am cautious, but your thesis is fair is that if things stay stable and things.
Speaker Change: Improving I expect back end roll rates to modestly improve throughout the year. It's just I don't see a cliff event, where something's going to happen and as I said earlier, a fast fix but again I'll be cautiously optimistic with that end.
Speaker Change: Then.
Speaker Change: Specific to if you want me to speak about the reserve rate a little bit I can't I think you were trying to dovetail that into you are trying to isolate onto.
Speaker Change: What might loss rates look like and then to your point.
Speaker Change: Definitely payors with what would happen with the reserve rate.
Speaker Change: I think you've seen the reserve rate today of $12 to remain in the range of where we've been over the past seven quarters I expect the reserve rate to be near the current rate until we see evidence of both.
Continue to improve credit quality.
Speaker Change: Which means the back end roll rates, a little bit that they decline over time and an improved economic outlook both in the baseline and the stress scenario. So I think right now that.
Speaker Change: We feel confident about the guide ive given for fourth quarter that the reserve rate will be I'll say slightly down, possibly flat and thats, possibly flat is really going to be dependent on.
Speaker Change: If there is any change in India.
Speaker Change: Those baseline in S three or four scenarios that we run.
Speaker Change: But outside of that.
Speaker Change: We'll see where we go but this is going to be I would say this is as we become more confident in a softer in Atlantic scenario in the coming quarters I would expect that we can.
Speaker Change: Slowly shift the weightings that we have in our seasonal models to a less adverse posture.
Speaker Change: Posture, and then that would allow the reserve rate to drift down so I think thats something to we'll continue to watch but as of right now those scenarios really didn't change much from say June of this year. So what we just we're running so it is going to be very.
Important too to watch what those outlooks due in the fourth quarter and Thats 60, 90 days from now.
And I want to make sure that what I said was that the fourth quarter of this year will be <unk>.
Speaker Change: Down versus last year, so seasonally it will come down and then obviously goes back up in the first quarter seasonally.
Speaker Change: Understood that's very clear thank you for taking my questions.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question comes from David Rochester with Conference Point Research and trading your line is open.
David Rochester: Good morning, guys.
Speaker Change: Good morning, good morning.
David Rochester: On expenses, you mentioned those will be higher in <unk> and when I look at the expense guide it seems to imply a pretty sizable step up quarter over quarter just to get to the more favorable end of that guidance range can you just possibly narrow down that range of an increase you are expecting in the fourth quarter.
Speaker Change: And I guess, that's all coming from higher marketing and sales volume pick up is that right.
Speaker Change: Yes that is correct I mean, you go back and look at the past.
Speaker Change: A couple of years and Youll see the step up from third quarter to fourth quarter and that's probably your best guide in terms of what to expect in the fourth quarter of this year.
Speaker Change: Okay and.
Speaker Change: And on the margin I appreciate all the comments you made on all the forces at work there in the fourth quarter the supports of the pressures.
Speaker Change: Is that net of all of that still a net negative.
Speaker Change: Are you still expecting margin pressure or should the mitigates rolling and be enough to drive some stability, there or maybe even some upside in the fourth quarter.
Speaker Change: Yes, I wouldn't say upside in the fourth quarter, I think theres a lot of moving parts and some of it is I'll say yet to be seen as some of it is.
Speaker Change: The consumer behavior in the quarter what is.
Speaker Change: I'll say loan growth look like with transact or we've got fed cuts that are still going to possibly come through so there's just a lot of variables, but the reason why we wanted to share. The commentary. We did is that typically you see a seasonal decrease in net interest margin of I'll say, a substantial amount here, we're saying that our.
Speaker Change: Our mitigation actions that we put in place to offset some of the CFPB lengthy rule is going to mute some of that.
Speaker Change: Okay.
Speaker Change: Okay. So so definitely no expansion, but potentially not much in the way of <unk>.
Speaker Change: Impression.
Speaker Change: Not as much correct.
Speaker Change: Great Alright, thanks, guys.
Speaker Change: Youre welcome.
Speaker Change: Thank you. Our next question comes from Jonathan <unk> with Evercore ISI. Your line is open.
Speaker Change: Good morning.
Speaker Change: You had indicated that you expect the loss trajectory to.
Speaker Change: Begin to reflect more of your normal seasonality here or how would you define that normal seasonality and specifically.
Speaker Change: When we look at first quarter 'twenty five.
Speaker Change: <unk>.
Speaker Change: Looking at maybe your historical seasonal increase may have been around 70 basis points. So could that put your first quarter 'twenty five loss rate above 9%.
Speaker Change: So what I suggested was that.
Speaker Change: You guys look at their seasonable seasonal movement I'm, not giving specific guidance on this but it was just that as I mentioned earlier.
Analysts had.
Speaker Change: Reflected a decrease so the exact opposite of what seasonal movement would naturally do so again I'd say, we're doing we're taking great credit actions. The team has done a terrific job with collections is just when.
Speaker Change: Whether we are hoping and better than normal seasonal movement I just wanted to be sure that there is a recognition that there is seasonal movement and it will be macro dependent and collection effectiveness dependent and the like.
Speaker Change: Yes.
Speaker Change: Okay, alright, thanks for that and then separately I know you flagged.
Speaker Change: A few times on this call the expected impact of the.
Speaker Change: Of the storms just out of curiosity, how much breads cardholder base in the us in Florida, and the storm impacted areas.
Speaker Change: I won't say, it's about 5% of our population are in the impacted areas and again, it's more than Florida right. It was up into the Carolinas I think I think FEMA had some counties maybe in Atlanta again, we just followed the FEMA zones that were impacted.
Speaker Change: Yeah.
Speaker Change: So between North Carolina, Florida, It was probably about 4% to 5% range of.
Speaker Change: Customers.
Speaker Change: Okay got it got it and then if I could ask just one last quick one there was an earlier question I didn't hear his question around.
Speaker Change: The mitigation intact.
Speaker Change: To confirm did you indicate that it was not a material impact to your full year 2004 guide and therefore should we assume not a material impact to this quarter or next in terms of the mitigation benefits.
Speaker Change: Correct and that it was not material to 'twenty 'twenty four not material in third quarter, but with mitigation it starts to build and ramp and when I say wedge out and so what I did say it will be slightly positive for fourth quarter.
Speaker Change: <unk>, which is helping to offset some of the normal seasonal NIM compression that you would have ordinarily seen it will not be as pronounced because of some of the CFPB positive mitigation that will be there.
Speaker Change: And then that will further build into each quarter subsequently going into 2025.
Speaker Change: Got it okay, great. Thank you.
Speaker Change: Youre welcome.
Speaker Change: Thank you. Our next question comes from Reggie Smith with J P. M. Your line is open.
Reggie Smith: Hey, guys. Thanks for taking the question.
Reggie Smith: It's probably a really.
Reggie Smith: Mindful of the Abbott.
Reggie Smith: With you guys.
Reggie Smith: Finally, when deciding to bring multiple.
We have a fairly low coupon rate.
Reggie Smith: What about that one.
Or you want to add.
Reggie Smith: A few follow ups.
Reggie Smith: Okay.
Reggie Smith: Okay.
Reggie Smith: I had a little bit of a hard time hearing you, but I think if I heard you correctly and tell me if I got it right you're asking for the calculus on the decision to repurchase some of the convertible debt versus other actions that Doug.
Reggie Smith: At that rate.
Reggie Smith: Okay.
Reggie Smith: Okay I'm going to go yeah, that's it yes.
Speaker Change: Yes so.
Speaker Change: When we when we took on the convertible.
Speaker Change: Almost not quite 18 months ago.
Speaker Change: We certainly.
Speaker Change: So out of necessity at the time and for US we've had that plan to pay down our parent debt and continue to improve our capital stack and we've made tremendous progress.
Speaker Change: Since last year. Our team has just been really focused on at strengthening the balance sheet.
Speaker Change: We got rated for the first time last November 'twenty three we Opportunistically, then went right out and.
Speaker Change: We issued a $600 million senior unsecured notes offering in December 'twenty, three at upsize to $900 million in January.
Speaker Change: And then we paid down over $500 million of parent debt.
Speaker Change: During that period, and we've got an additional the additional $100 million in the first quarter. So we've been really focused on this end.
Speaker Change: It paid off the company's bank term loan and then this repurchasing of $262 million of our convertible again, it's just a continuation of our.
Speaker Change: Our philosophy on trying to improve the parent level debt situation as we commented our double leverage ratios.
Speaker Change: Is down to 103%, where it was at 184%. It just year end 2022, so we looked into this is.
Speaker Change: A good thing to do I mean, you saw the numbers, we put out there during our Investor day, and what we believe the opportunity.
Speaker Change: I'll say for tangible book value accretion is over the years to come and so with this action. It allowed us to further delever, which is consistent with our capital priorities and derisked future dilution associated with these convertibles as our share price is expected to move I'll say substantially higher in the future.
Speaker Change: <unk>.
Speaker Change: When we said at Investor Day, we believe our shares were trading at a multiple of tangible book value.
Speaker Change: And you've seen it where we went from trading at a pretty substantial discount to where we're close to tangible book value in just the past year and so as the macro environment improves and we demonstrate we can successfully navigate.
Speaker Change: A challenging time, we expect continued share price appreciation, along with our responsible growth and achieving our return commitments and when we when we do that.
Speaker Change: Would get you could get pretty expensive to repurchase the convertible at a future time. So for US we were able to delever and take out what I'll call future price risk by doing it early.
Speaker Change: Yes.
Speaker Change: Got it no I understand.
Speaker Change: And then I guess thinking about the mitigation stuff I know what the APR.
Speaker Change: The API increases I believe only apply to like new purchases I was curious.
Speaker Change: I know, there's a bleed in period, there, but mechanically when people payback there their balances.
Speaker Change: Pays off those higher APR balances first is that how that works.
Speaker Change: Part one of the question part two is when you're talking about the fourth quarter impact is it safe to assume that most of that benefit is coming from the statement fees and I'm not sure. If you guys had articulated with the range of those fees could be anything you can share on that would be great. Thank you.
Speaker Change: You bet.
Speaker Change: You are correct card act has prevailing rules around.
Speaker Change: Payment allocation and typically it is.
Speaker Change: Thing above min pay has to go against the highest APR balance first which is why it takes so long for the.
Speaker Change: Higher APR has to have an effect now that said every new account booked.
Speaker Change: Throughout the year or from whatever point you have those rates in market are 100% at the higher rate. So that also helps to build as the new vintages come on each.
Speaker Change: Each quarter that will continue to be a building benefit.
Speaker Change: Specific to fourth quarter.
Speaker Change: Because the balance has been building with some of the higher rates and some of the new accounts coming on with some of the waves of APR increases that went out in the second quarter, you start to see that benefit really come through a bit more in the fourth quarter specific to statement fees that would not affect net interest margin that would be in.
Speaker Change: Non interest income.
Speaker Change: Got it okay. Okay perfect. Thank you.
Speaker Change: Youre welcome.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question comes from John Armstrong with RBC capital markets. Your line is open hey, thanks, Good morning.
Speaker Change: Good morning, just.
John Armstrong: I wanted to get out of the P&L for a second here.
John Armstrong: In your guidance you talk about visibility into your pipelines can you talk a little bit about what youre seeing in the pipelines and then.
Ralph you've been pretty quiet.
John Armstrong: Perry has been kind of beat up but can you maybe talk about.
Speaker Change: New business activity, new business win potential for the company and what Youre seeing right, yes, no I prefer I prefer you beat up Perry.
Speaker Change: So.
Speaker Change: Listen our pipeline.
Ralph Drydock: <unk> always been strong and it continues to be strong I mean, what we announced a couple of things.
Ralph Drydock: Today certainly.
Ralph Drydock: We've talked about SaaS, which we're thrilled about and then starting a de Novo program with.
Ralph Drydock: With the hard rock, which again, we're thrilled about and if you think about if you look at our portfolio in general.
Ralph Drydock: The renewals were strong at 90% of our book is going through 2025 at the end of 2025, 80% is good through the end of 2006. The majority of our top 10 programs. The overwhelming majority of our top 10 programs are going to the end of the ended the decade. So we feel really good about that what I love about our pipe.
Ralph Drydock: <unk> as you can do things like hard rock, which is de Novo is starting out and then you can compete for portfolios like Saks out there, which are which are really good portfolio that continues to be where we are I do.
Ralph Drydock: I do certainly.
Ralph Drydock: Credit or a business development team they have a they have a good reputation in the marketplace that well respected and we are really focusing our product set against co brand and private label and all the verticals out there as I said, we are no longer dependent on one vertical or mall based or soft goods.
Ralph Drydock: We have a diversified portfolio and diversified product set that really sets us up well for success.
Speaker Change: Okay. Thank you that's all I have.
Speaker Change: Thank you there are no further questions at this time.
Speaker Change: I'll pass it back to Ralph <unk> for closing comments.
Well listen thank you all for joining the call today and you'll continue to express interest in bread financial and we look forward to speaking with you on the next quarter. So everybody have a terrific day and thanks again for your time.
Speaker Change: This concludes the program you may now disconnect good day.
Speaker Change: Yeah.
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Speaker Change: Yeah.
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Speaker Change: Okay.
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