Good morning, and welcome to Alliance Data's Full Year and Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce Mr. Brian Vereb, Head of Investor Relations at Alliance Data. Sir, the floor is yours.

Thank you, Casey. Copies of the slides we will be reviewing, and the earnings release can be found on the Investor Relations section of our website. On the call today, we have Ralph Andretta, President and Chief Executive Officer of Alliance Data; and Tim King, Executive Vice President and Chief Financial Officer of Alliance Data. 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 subject to the risks and uncertainties described in the company's earnings release and other filings with the SEC. Alliance Data has no obligation to update the information presented on the call. Also on today's call, our speakers will reference certain non-GAAP financial measures, which we believe will provide useful information for investors. Reconciliation of those measures to GAAP will be posted on the Investor Relations website at alliancedata.com. With that, I would like to turn the call over to Ralph Andretta. Ralph?

Thank you, Brian, and thank you all for joining the call this morning. I will start on Slide 3 with the key takeaways from 2020 for Alliance Data. First, we believe that the company's results reflected significant resilience in what was a very difficult business environment, thanks to our ability to respond quickly and effectively to the changes brought on by the COVID-19 crisis. At the same time, we were able to reduce our fixed cost base by approximately $240 million in 2020 compared to where we stood in 2019. We optimized our workforce and our physical real estate footprint and gained operating efficiencies through process improvements, including automation as part of our transformation program. Even more important than the progress we demonstrated in 2020 are the investments we made and the strategic actions we took to position Alliance Data for sustainable, long-term future growth. We invested in top-tier talent to transform our Card Services business, added digital innovation expertise, and strengthened our partner management and product development capabilities. Turn to Page 4, I will cover key investments we made in 2020. But before I get there, I do want to mention our international LoyaltyOne businesses as they continue to adopt and invest in better positioning themselves for the new marketplace through new offerings. First, turning to AIR MILES. The team has pivoted its rewards portfolio to emphasize more non-travel options such as stay-at-home type merchandise, to drive higher customer redemption rates during the pandemic. BrandLoyalty has developed a number of new concepts for programs based on pandemic-related themes, like bringing the world to your home and health and hygiene and is providing sustainability-focused offers using 100% recycled plastic for rewards like luggage and kids' promotions. Moving to the slide. You can see the major products and technology enhancements we've made in 2020 to improve our client experience and drive future growth. Our acquisition of Bread opens up new opportunities to leverage our digital offerings, to capture incremental point-of-sale opportunities and to build strategic technology platform partnerships. Bread offerings and integration capabilities enhance the growth prospects of our Card Services verticals and increase the addressable market of small and medium-sized merchants. At the same time, Bread offers our existing partners a broader digital product suite and additional white label product solutions. With the transition of cloud services core processing to Fiserv, we will improve our brand partner conversions and speed to market, including the ability to quickly and seamlessly add new products and capabilities that benefit our partners and card members. The platform enables efficient integration and use of mobile wallets and virtual accounts, while supporting our data and analytic capabilities and improving operational efficiencies. We will also benefit from capital expenditure savings, which will be redeployed to fund growth initiatives. In 2020, we also announced the launch of our Enhanced Digital Suite. This digital application helps all brand partners capitalize on the accelerated growth of e-commerce by attracting and bringing through more qualified applicants, a higher average purchase value, and a higher credit sales conversion rate. The suite creates a seamless process for customers to adapt, apply for, and use our payment options. We are seeing improved year-over-year growth from our digital channels and would expect this trend to continue as our partners and card members benefit from our digital solutions. Finally, we were pleased with the response to the launch of our new proprietary credit card, the Comenity Card, in 2020. We continue to see strong activation rates, engagement, and cross-category shopping, especially among millennials. The Comenity Card allows Alliance Data to retain card member relationships and drive increased credit sales. These investments, together with our streamlined cost structure, underpin our confidence in Alliance Data's future prospects. Slide 5 provides the financial highlights for the fourth quarter. We reported diluted EPS of $0.25, including discontinued operations. Net income from continuing operations was $93 million or $1.93 per diluted share. Total revenue for the quarter was over $1.1 billion. Credit sales improved 24% sequentially, and both AIR MILES, reward miles issued, and redeemed improved from the third quarter of 2020. Overall, during the quarter, we saw a pickup in our business due to holiday seasonal shopping and improved consumer spending. Moving on to Slide 6. You can see the continued gradual recovery in credit sales for our Card Services business. Active program sales, which provide a clearer view of underlying sales trends, improved from a 14% decline year-over-year in the third quarter to a 7% decrease in the fourth quarter of 2020. Also, the 24% sequential total sales improvement from the third quarter of 2020 was better than the same period last year, showing continued progress while adjusting for seasonal holiday increases. We continue to see more purposeful spending. While in-store traffic was down versus a year ago, when consumers shop in store, they are spending more. Also, I want to highlight the success we saw in our beauty, health, and wellness verticals. Both have had an excellent holiday season with strong online adoption and sales performance. Online sales made up 42% of total sales in the fourth quarter, up from the low 30s for the fourth quarter of last year. Please note that we include additional details on our sales by channel in the appendix of this deck. Slide 7 highlights select partner additions and renewals and our new strategic technology partnership with RBC. In the fourth quarter, we added over 60 new online merchants and now have over 500 online merchants. Bread's innovative fintech approach and platform capabilities, combined with Card Services funding, marketing, data and analytics, and underwriting expertise provide new opportunities for growth and synergies. Our pipeline of digital partners is growing at an impressive rate as a result of bringing our two companies together. In addition, active cross-sell partner discussions continue with high levels of interest from our existing Card Services brand partners to augment existing programs with Bread solutions. We expect an integration of existing partners to start in the latter part of the first quarter. I would also highlight the addition of Famous Footwear, which will be fully integrated with the Enhanced Digital Suite to take advantage of our digital capabilities through a single API integration. The strategic agreement that we have announced this morning with Royal Bank of Canada leverages Bread's leading platform technology and digital offerings in new ways. RBC is now utilizing Bread's white label platform to expand its payment solutions for its Canadian merchants. This accelerates Bread's platform growth and enables us to continue to bring next-generation payments and checkout solutions to more consumers globally. Let's turn to Slide 8 to review the performance for LoyaltyOne, which includes the AIR MILES rewards program in Canada and the Netherlands-based BrandLoyalty. The segment's fourth-quarter revenue benefited in part from higher seasonal spend when compared to the previous quarter. As I mentioned earlier and as displayed in the graph on the bottom of the slide, AIR MILES reward miles issued and redeemed continued to improve in the quarter, driven in part by the success of the expanded merchandise portfolio. Customer engagement continues to improve with the new offerings. Once travel resumes, the new offerings combined with travel options should provide a substantial growth opportunity. BrandLoyalty revenue improved 36% sequentially, yet remains down versus the prior year. We continue to closely monitor the pandemic infection rates, especially in Europe and certain countries as they implement stricter enforced measures. Moving to Slide 9. Our areas of focus remain consistent. With the recovery actions behind us, we remain focused on the rebuild and regrow elements of our plan. We will execute on these efforts in 2021 to position Alliance Data for sustainable, profitable, and long-term growth. I will now turn the call over to Tim to cover the financials.

Thank you, Rob, and good morning to everyone. I'll start on Slide 10 to review our results for the full year and fourth quarter 2020. Starting with the full year of 2020, income from continuing operations was $295 million, down 48% from 2019. The reduction in revenue was primarily due to the COVID-19 pandemic. This reduction was partially offset by reduced operating expenses as a result of decreased variable costs tied to lower receivables as well as $240 million of fixed cost savings that Ralph mentioned before. Starting in the fourth quarter of 2019, we took action to right-size our expense base. We optimized our workforce and physical real estate and continue to recognize the benefit from our investment in automation. Other areas of reduced costs in 2020 include legal, consulting, and travel expenses. For the fourth quarter of 2020, revenue was down 24% versus the prior year. Fourth quarter income from continuing operations of $93 million benefited from lower provision for loan loss expense compared to the prior year, driven by better-than-expected credit performance. Income from continuing operations per diluted share was $1.93 and net income per diluted share was $0.25 for the fourth quarter. Net income was impacted by the $81 million after-tax charge and discontinued operation, as discussed in the press release. I will provide more detail on the quarter in the coming slides. Slide 11 highlights our segment level results for the fourth quarter and full year 2020. Focusing on the fourth quarter, both LoyaltyOne and Card Services revenues were down. The decrease in Card Services was primarily tied to the reduction in normalized card receivable and lower card yields from the Fed rate cuts. LoyaltyOne revenue was down primarily due to fewer short-term loyalty programs in the market due to COVID-19, as well as the sale of Precima in January 2020, which accounted for $23 million of incremental revenue in last year's fourth quarter. The improvement in Card Services EBT is primarily a result of lower loan loss provision, resulting from continuing strong card member payment behavior and improving year-over-year delinquency rates. At the corporate level, EBT was down for the fourth quarter of 2020, including costs associated with the Bread acquisition. Moving to Slide 12, I'll review some of the key business metrics for the company. Starting at the bottom left, you'll see the normalized average AR, which includes held for sale versus our total credit sales. For the quarter, we saw sales come in at $7.7 billion, which is down 18% year-over-year compared to down 21% year-over-year in the last quarter. As Ralph highlighted, we continue to see a gradual rebound in our sales along with the typical fourth-quarter seasonal increases. While normalized average receivables improved sequentially, AR balances continue to be pressured by lower year-over-year sales and strong payment behavior. Moving to the lower right, yields remained fairly stable sequentially as the impact from the customer relief programs earlier in the year has largely subsided. The benefit from lower fee waivers was offset by higher seasonal balances in the fourth quarter. Card Services cost of funds dropped approximately 30 basis points for the third quarter with lower securitization and deposit costs. Finally, turning to expenses. The fourth quarter included a previously announced $50 million of associated optimization costs and approximately $40 million increase in marketing and approximately $30 million increase in the redemption cost in our LoyaltyOne business due to the high seasonal revenue. Turning to Slide 13, I will start in the upper left. For the quarter, we finished with a net loss rate of 6%, down 30 basis points versus the prior year. As you may have seen in our monthly data, our December debt loss rate was impacted by the COVID-related customer relief programs we offered early in the year. The spike in December was timing related, and we expect the net loss rate to return to more normalized, if not better, levels in January. The Slide 27 appendix provides additional information on the topic. On the bottom left of the slide, you can see the improvement in our delinquency rate to 4.4%, down 140 basis points versus the prior year. We are very pleased with the continued year-over-year improvement in delinquencies. These improvements are a result of our actions taken in 2020, including enhanced collection efforts, prudent credit line management, and the expansion of the pandemic-related consumer relief programs, as well as the benefit from the stimulus programs. Finally, turning to the right-hand side of the page. Our allowance slightly decreased to $2 billion for a reserve rate of 12%. Note that a temporary seasonal increase in balances pulled down the reserve rate a percent for the year-end. Given the continued uncertain economy, in particular, in the second half of 2021, our reserve levels remain elevated to affect the potential risk. Our reserves contemplate the assumption in Moody's S4 economic outlook, which reflects only a 4% probability that the economy will perform worse. Slide 14 covers our corporate and bank liquidity and capital. We continue to maintain special liquidity with over $1 billion to the parent company and nearly $350 million in cash. At the bank level, cash was $2.7 billion. The banks remained well capitalized with a total risk-based capital ratio of 19.7%. I'll now turn it back over to Ralph.

Thanks, Tim. Slide 15 provides our initial financial outlook for the year. For 2021, we expect period-end receivables to be relatively in line with year-end 2020. While full-year average receivables are expected to be down mid-single digits, reflecting the year-over-year pressure in the first half of 2021. We anticipate the sequential decline in average receivables in the first and second quarters and then flat year-over-year balances in the second half of 2021. We expect to resume high single-digit to low double-digit card receivables growth as we exit 2021. Moving to the income statement. Total revenue is anticipated to be down low single digits from 2020, as the impact from lower average receivables in the first half of the year is partially offset by improving revenue from LoyaltyOne and our Bread fintech acquisition. Expenses ex provision are expected to remain flat for 2020 as we balance prudent expense discipline and the continued investment in our strategic priorities. The 2021 expense figure includes over $100 million of digital innovation and technology enhancement investments. We are capitalizing on the significant growth prospects of our fintech business expansion as well as enhancing our data and analytic capabilities. Our Fiserv processing system transition investment remains on track and will provide operational efficiencies to lower our cost to serve. Separate from our digital and tech investments, we are ramping up marketing spend in 2021 by over $50 million from the depressed levels in 2020. The investments are key to position the company for growth and the delivery of positive operating leverage in 2022. On credit, the encouraging trend in delinquencies, strong payment behavior, and the positive impact on the prudent risk management actions we took in 2020 provide us with confidence that our stable credit performance will continue in the first half of 2021. We expect the first quarter net loss rate to be at or below 6%. While it's hard to predict beyond the first half of 2021, given the uncertainty and volatility in the marketplace, if card member payment behaviors remain stable and the economy improves as projected, we would expect the net loss rate for the full year 2021 to be similar to 2020. 2021 will be a critical year for Alliance Data to solidify our core businesses, improve efficiency, and continue to invest in our strategic initiatives to drive sustained profitable growth over the long term. We will host a virtual investor presentation in May focused on our strategy. At that time, we'll provide the details on our three-year strategic plan and our long-term financial targets across key metrics, including return on equity, balance sheet growth, efficiency, and capital. More detail on the timing will be forthcoming. I will close on Slide 16, outlining our strategic areas where we are investing opportunistically. With the acquisition of Bread and the move to Fiserv, we are demonstrating how we are leveraging technology to build a more efficient company, evolving our products and capabilities with digital advancement at the forefront. Our leadership team will go into more depth on how these initiatives and our key foundation elements will drive our company forward at our strategy update in May. I'm coming up to my one-year mark of joining Alliance Data. I could not be prouder of the team, all my associates, and their dedication and resilience over the past year. I am confident in our direction and our ability to capture the substantial opportunities we see in front of us. With that, operator, please open the line for questions.

[Operator Instructions] Your first question here comes from the line of Sanjay Sakhrani from KBW.

Wow, it's been a year. Congratulations, Ralph.

Thanks, Sanjay.

So I guess my first question is the outlook on expenses, specifically the digital innovation and technology-related costs. Could you guys talk about maybe some specifics around where you're making these upgrades and how you think those will pay off over time, like what the IRRs on those investments are?

Yes. With the acquisition of Bread, it makes sense for us to make investments in digital and platforms and also with our existing partners with our Enhanced Digital Suite. That's where the investments lie in end-to-end journeys for our card members and customers and partners to drive incremental digital interaction. So we could be in every channel our customers are in. So that's -- we're excited about that. Bread's acquisition has been really very, very good for us, very surprising, great pipeline, and we'll continue to invest there, and we expect Bread's revenue to double and the receivables to develop during the course of the year.

Okay. And I guess maybe specifically to that, I was just noticing you guys have made a decent amount of progress already cross-selling Bread into your customer base. With the most recent one being RBC. Could you just talk about how we should think about the profitability of deals like this? And how you guys specifically will make money in the transaction there? And then maybe what the opportunities are to do more deals like this in the near future?

Yes. So we're really excited about the RBC deal. If you think about that deal, RBC has thousands of merchants out there. And what we get from that deal is the technology and service fee. So we get a fee with really no risk of receivables on our books. That said, as you think about the white label solutions that Bread has, we could drive incremental receivables in our existing partners and new partners moving forward. So again, we're excited about that as well as we'll gain those receivables. There are two or three very exciting deals in the pipeline that are a mix of both technology and servicing fees as well as gathering receivables. So more to come in the very near future, but we're excited about the prospects that Bread has with Alliance Data.

And just to be clear, on this RBC example, you guys won't be portfolioing the loans of RBC?

Right, that's correct. There'll be obviously loans. But we'll -- what we do get is a technology and servicing fee. So very little risk for revenue.

And I'm sorry, last one. Just in terms of those fees, those technology and servicing fees, how do they compare to other peers in that business? Are they lower or comparable?

Yes. They're comparable. They're consistent with the peers in that business.

Your next question comes from the line of Bob Napoli from William Blair.

So just a follow-up on Sanjay's question on Bread -- I'm sorry, Ralph, did you say what the revenue and loans were for Bread at the end of the year on your balance sheet? I also the balance sheet some revenue growth rate.

Again, we're going to report Bread as part of the Card Services segment. But what I will tell you going forward, we expect Bread's revenue to double in 2021 as well as their receivables to double.

Okay. And the tech business, I mean, selling Bread to RBC, is that a significant strategy to grow the non-credit-sensitive partnerships providing Bread's technology to banks and others? Is that a significant strategy? And do you have a pipeline of -- on the technology side?

Yes, it's another revenue stream for ADS, and we're really excited about it, and there is significant pipeline to do two things: one, continue to grow that technology and servicing fee, but also gather receivables with other partners, including partners we have today.

Okay. And then just on the current customer base. And what do you have coming up on renewals? Has it -- has it become more competitive in retaining and adding new customers? I mean, I appreciate your confidence in growing double-digit -- high single to low double, I guess, going into 2022. But are there significant renewals? Is there pricing pressure? Is there more competition for those renewals? And how confident are you? Historically, ADS has had a pretty high retention rate.

Yes. The competition has always been there. So I don't view the competition as any different than it has been in the past. I mean I think it's -- I think we're better suited now because we have a greater suite of products. If you think about adding those Bread white label products to private label, co-brand, Big Ticket, it just gives us the ability to demonstrate to our partners. We're a one-stop shop for underwriting and financial services. So we feel good about that. We feel, going forward, we even have a better opportunity to compete.

Okay. And then just a quick numbers question for Tim. Tim, what's the share count -- fully diluted share count you expect for 2021 and tax rate?

Well, you ask you the share count and the tax rate, Bob, is that correct?

Yes.

Yes. It's 48 million shares. And our tax rate will probably be pretty consistent with our 2020 numbers, which will be around 25%.

Your next question here comes from the line of Ryan Nash with Goldman Sachs.

Tim, maybe a question on credit. You talked about the reserve still contemplating S4. Can you maybe just talk a little bit further about what is assumed in terms of unemployment? And if the economy continues to improve, how should we think about both the pace of reserving and reserve releases over the coming quarters?

Sure. So let me start with the second part. Again, I'll get the S4 assumptions. Clearly, we're concerned, as most of the others in the industry, about the fourth quarter. We feel fairly comfortable about our guidance that the charge-off number over the course of 2021 should be pretty consistent with 2020. But like others, we feel there may be a little bit of spike at the end of the year. Our reserve rate contemplates that. So real specifically, Ryan, if you start asking about what do I think that there may be an opportunity to release. And clearly, if the economy improves, and we don't see that spike in the fourth quarter, then it's going to be an opportunity to release the allowance. And I think Bryan, check me, but I think we had an 11.1% unemployment rate for S4. Is that correct?

Sounds correct.

Yes. So I think that's what's caused by S4. So pretty conservative with the overlays. But at this point, like others in the industry, we're very concerned about what happens in the -- I'm not very -- we're concerned about the fourth quarter, and we're watching pretty carefully.

Got it. And Ralph, you talked on one of the last questions about the potential for high single digit, low double-digit card receivables growth as you exit 2021. Can you maybe just talk about what you expect to be the drivers as well as your degree of confidence in delivering on this? And does this factor in further merchant bankruptcies? And is this sort of the way we should think about what the franchise is capable of in terms of growth on an ongoing basis? Or is this really just specific to the near term?

Yes. So I -- the answer really is a combination of a number of things. It's the vaccination taking hold, people being more confident to go out shopping, that pent-up demand that people have to go out and shop. So we feel good about that. The integration of Bread into our existing partners going deeper into our existing partners, the incremental marketing dollars of $50 million to drive acquisitions and sales, all that is going to contribute to the double-digit growth as we move forward. And in my view, that is high single digits, double-digit growth is what you can expect from us on an ongoing basis. Given the investments that we have made in 2021 and the execution of those investments and our new digital platforms.

Got it. And I want to say thanks for all the color on the outlook. It's really good to see all the information that you gave us.

Your next question here comes from the line of Mihir Bhatia from Bank of America.

And let me also start off by thanking you for the color on the outlook and the additional disclosure at the back. I did want to just clarify the answer on the 2021 credit outlook. I think in your last answer, you mentioned, did I hear it right? Did you say that you expect 2021, if things keep improving, you expect 2021 loss outlook to be similar to what you saw -- experience in 2020? I just want to make sure I got that because I think in the formal guidance, you only talked about '20 -- first quarter 2020?

Yes. So Ralph, when we were on the guidance page, said, unless something happens with the economy, we feel the 2021 charge-off on the year will be consistent with the 2020. And so just to grade everybody, the 2020 charge-off number was 6.62%. So we feel like it should be pretty close to that, given what we're seeing in the economy at this point.

Got it. And then just, I guess, I wanted to ask -- to go back to the Bread questions and particularly the RBC integration announced this morning. I was wondering when you mentioned you're talking about the fees and things with it. Is that on a -- is that just a straight licensing fee? Or is it dependent or like is it based on a number of transactions? Is there a per transaction fee? Any more details on the financial impact of that kind of deal that you could provide?

Yes. It's a number of things. It's technology servicing and marketing fee. So it's an ongoing fee revenue.

Okay. Okay. And then I guess one last question for me and then I'll get off. Just if we can go back to Slide 7, where you have all your new partnerships, is that just Bread partnerships, card clients, both just trying to understand what it means to add so many new partners in a quarter? What does it mean from a financial standpoint? What does it mean -- or is that more like showing you're making progress towards your strategic goals? I just want to make sure I understand what you're kind of saying on that side.

Yes. Obviously, a lot of those digital partners are new additives from Bread, and it just expands our portfolio and where people can spend. Famous Footwear is a traditional client from ADS. It will be in our Enhanced Digital Suite. I think the thing to notice there is that they're going to integrate simply with one API. And as we move forward, the integration of partners to our Enhanced Digital Suite is going to continue to become seamless. That drives more partners online. And again, gives us the ability to meet consumer needs in all the channels, whether it's brick-and-mortar or digital.

Your next question here comes from the line of Jeff Adelson from Morgan Stanley.

I was wondering if you could elaborate a little bit more on the credit sales trend that you guys are expecting in 2021. I appreciate the full year guide of high single digits. Just kind of wondering how that progresses throughout the year once you lap the COVID impacts and perhaps what you're also expecting on the payment trends from here with stimulus coming in? Are you still expecting a pretty significant rate of pay downs, and that's part of what's happening with your guidance? And then on the average receivables. I'm just trying to understand how much upside the average receivables could have from Bread this year, how much you're kind of contemplating? Is that doubling fully in there?

Yes. So I think your questions, I'll get back to what we think for average receivables and the different pieces, Jeff, so we'll start with just what we're expecting. As Ralph said, by the end of the year, we feel like we should be flat to 2020. The big issue is obviously going to be Q1 and Q2, which we took, obviously, the COVID had a big impact on us at the end of the year. The sales trends are going to follow that same year-over-year trend, which is they'll build-out of Q1 and Q2, and by Q3, Q4, we'll have a nice increase in our sales, which is also part of the reasons we're guiding to 2022 with much stronger growth. On top of that in 2021, the COVID behavior is that people are paying us, and they continue to pay us above what we saw back in the 2019 time frames. We have contemplated that. So if you put all that into perspective, Q1 is going to be down. Q2 is going to be down, but then you start making that all up in as we get into Q3 and Q4. And by the end of the year, we feel pretty confident that we should be flat year-over-year. Included in that is some opportunity with Bread. But as Ralph obviously has indicated, I certainly would second that, we think there's a whole lot of opportunity in Bread above and beyond.

Okay, great. And maybe just kind of switching a little bit to capital. I know that buybacks are off at this point. But as you start to see some of this excess capital come through and some of the excess reserves come off, is -- can you remind us all how you're thinking about your tangible equity targets? And what your goal is there and when you might eventually decide to start looking at perhaps turning on that again?

Yes. So let me start, and I'll turn it over to Tim in terms of targets. So my view is as the use of capital to me is we got to continue to invest in the business. I think that's critically important. We've got to certainly return some shareholder value in dividends, and we've got to pay down our debt. So if I look at -- as I look at uses of capital, or my top three uses of capital, at least in the near term. Tim, talk about targets?

Yes. So look, I'm going to the sake of being redundant, I'm going to reiterate what Ralph said, our first priority with the capital has got to be putting money back in the business, and we will continue to do that. So -- and the reason I say that is we have targets for the TC to TA ratios, that are going to be consistent with our peers. But as we get opportunities like Bread, both purchasing Bread as well as investing in Bread, we're going to do that. So we're not going to pick a date. We're going to continue to grow the business with the first priority being making sure that our capital goes back into opportunities, and we see that are pretty strong. But long term, a few years out, we would expect our TC to TA ratio to be consistent with our peers.

Your next question here comes from the line of David Scharf from JMP Securities.

I guess, congratulations on the impending anniversary, Ralph. It's for at 5 years. That's -- that did progress remarkably quickly on your front. I'm wondering, maybe just a follow-up on the Bread pipeline, how we ought to think about it. I know you referenced active discussions on cross-selling with kind of existing private label partners. Can you -- well, #1, I believe you said there were some integrations to start in the end of this quarter. Was that the new kind of signings that were referenced in that slide, the 50-odd digital partners? Or are there some existing private label partners that are going to be coming on board with Bread?

Existing private label partners. That was different from the 50 -- 60 new digital partners their existing private label partners. And we expect that integration later in the first quarter.

Got it. And in the course of those negotiations, just curious, since the buy now, pay later product is still emerging. Are your partners open to exclusivity with Bread? Or are they generally adding several providers on their online shopping cart? How do you see that playing out over time?

Yes, it depends on the partner, but what they particularly like about our Bread solution is it's white labeled. So it's not a move to another provider, it looks like it's right in the buy flow or right in the checkout flow, there's -- it gives them the -- gives our partners and our customers the opportunity to finance transactions in different ways, whether they want to use their private label card there or buy now, pay later or an installment loan. It just is a seamless transaction where it is within the buy flow and not having to punch out to a third party.

Okay. So was it -- is it -- are we ever going to see a Bread logo? Or it sounds like it will always be branded as the merchant?

Yes, I -- no, they'll -- in some of the offerings, you'll see the Bread logo. I think the Bread logo has some equity too, and then you'll see that Bread logo. And as you've seen it in the past.

Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.