Bread Financial Holdings, Inc. (BFH) September 15, 2026 Conference Transcript

Okay, so we'll get started. I'm very pleased to have Red Financial here presenting today. And with me on stage, I have Perry Bieberman, Chief Financial Officer. So welcome, Perry.

Thank you for having me, Terry.

Yeah, so we'll just jump right into it. Maybe just start with an update on the quarter. You know, during earnings, you noted softer spend growth in July. Has that persisted? And what are you seeing across consumer cohorts and spending categories today?

Yes, let's start with the update on the quarter. We obviously put out our performance metrics this morning that came in pretty strong. When you think about the quarter overall, I'd focus on probably three numbers to start, which is, one, our end-of-period loans should end just under $18.9 billion. And the reason why I want to give that information is, you know, as people are trying to work through what, you know, the CECL provision build might look like, It's good to get that number dialed in a little bit. The second one is with the credit stats that came out a little better than expected. The quarter should come in a little better as well. So we're thinking the quarter is looking like around 6.5 percent, right around that. And then the third one is, you know, we've had conversation on what the non-interest income trend would look like on a linked quarter basis. It came in a little better than we had expected in the second quarter. And part of that was due to some favorability we saw on some fee items as well as some delays in terms of the RSA impacts. And today, obviously, one of the renewals we put out, the press release on that. So that is going to step up the RSA payments in the third quarter. So you can think about that linked quarter trend is half driven by seasonal increases in RSA payments. And the other half will be some of the renewals that are going to come through. So think about that as about a $30 million step-up or, in par se, or decrease in linked quarter non-interest income. But overall, beyond that, for the quarter, I think you should look for a pretty stable CECL reserve rate and feel pretty good about that. And then, obviously, for the full-year guide, we'll get into that during the third quarter earnings call. And then you want me to go on about the consumer and what we're seeing there on spend. Spend continues to be good. I mean, we saw a little bit of a slowdown in July. Right now, spend still remains strong. You can see that pulling through in terms of our end-of-period loan growth being just over 6% for the month of August. September's benefiting a little bit from the delayed or later Labor Day this year. So that's helped. Remember, part of what my narrative on July was that Amazon Prime Day was pulled forward earlier. That got picked up in June, so that had impacted some of the comps by about a percent or two. So overall, again, the consumer is resilient. The spend patterns are looking good, particularly for us, as we have some still favorable comps that are pulling through at this point.

Got it. Maybe just to double-click on the RSA comment that you just called out, Maybe just help investors understand the key drivers and how you expect that pressure to evolve over the coming quarters.

Yeah. If you look at non-interest income and particularly that type of a line, you're netting a bunch of things together. So as you have top-line origination growth, you're pulling through more interchange income. You're pulling through more merchant discount fees, and those are obviously good fees. as well as you've got paper statement fees in there and non-interest income as well as debt cancellation fees. So those are all accruing. Then, you know, the contras that are happening are the payments for customer rewards that you build and accrue for the customer rewards, the loyalty programs, and then, you know, partner share into the form of an RSA. And those, the RSAs in particular, as the program dynamics improve, meaning expanded profitability. So we've had some pricing changes that pulled through over the past couple years. Those are now going to get shared back to the partners more so, particularly just going through these renewals. And as you have higher origination growth that outpaces even loan growth, you're going to see that for those programs that are being compensated as a percent of credit sales pull through the RSA. So those dynamics, what I would look for is the step-up that we're going to see in the third quarter, If you take that as a percent of credit sales, that's just a thumb-in-the-air type of swag. It's something how you directionally look at things going forward is a good metric still to use as directional, with that perhaps slightly increasing over time.

Got it. That's helpful, caller. So you released monthly credit metrics this morning. Credit has continued to outperform seasonality despite concerns around higher gas prices and inflation. What's been really driving the improvement, and how much is attributable to tighter underwriting, portfolio mix, or just consumer behavior?

For us, I think every portfolio out there is constructed a little differently. For us, we continue to see improvement in our credit profile. It's not really because we're tightening down credit. It's just we didn't loosen credit. So, you know, a year or two ago, you didn't hear me talk about we're loosening credit. We've been sticking to our discipline. Every new vintage we put on, we're trying to get to be around that 6% loss rate. And so as the new vintages are pulling through with better credit risk dynamics, you're seeing that slow, gradual improvement in our overall loss rate, coupled with the people who are most at risk have been charging off. So you just end up with the math of an improving risk mix, despite what might seem to be pressures from the consumer as they're dealing with higher prices from fuel, some tariff pull through with inflation still running a little high. Now, inflation being 1% higher, it puts pressure on some households. But if you break the portfolio down into quintiles, into fifths, so the bottom 20%, we don't underwrite. But those are the American consumers who are most at risk. They're often on government subsidies, programs, low income, probably below $40,000 a year income. Again, our average income is $100,000. So our sweet spot are really those middle three quintiles. And that's where, you know, you're priced for risk and you're able to make that work. But those households are able to make adjustments in their spend. You know, instead of they may delay an auto purchase, they may delay a home purchase. They are able to do things to navigate, whether it means instead of buying the name brand product, they'll go for an off-brand product. They're able to make adjustments. And so far, we've been very pleased with what we're seeing in terms of that payment dynamic, and you can see it pull through in our delinquency rates. So that, coupled with the product mix that we're putting on, it's just pulling, again, our trends are favorable, continue to be favorable, and expect that to continue through the rest of this year and the next year.

Got it. That's helpful. Maybe just taking a step back, you know, first half in the charge-offs were about 7.8%. Credit performance is typically lower in the second half. You just called out third quarter, you know, charge-offs should be around 6.5%. So maybe just talk about the guide of 7 to 7.1. It feels, you know, slightly conservative to us, so maybe just walk us through what is contemplated in that guide.

Yeah, when we gave the guide during 2Q earnings and we did lower it for the full year to that 7.0 to 7.1 down from 7.2 to 7.4, we had a high degree of conviction that we would be able to get within that range or maybe even slightly beat it. I think right now the way 3Q shaped up, it definitely sets us up well to do okay for the year and we'll revise our guidance during 3Q earnings.

Got it. So last year, that charge-off's improved by 53 basis points. And this year, the midpoint of the guide implies 64 basis points of improvement. How confident are you in returning to bread's target of 6%? And what are the major factors that could accelerate or delay that?

Yeah, I feel very confident in our ability to get to around that 6% or slightly better based on a couple things. One is the discipline credit underwriting that we have continued to maintain, and you can see the trended improvement that we've seen throughout, you know, last year into this year, and there's no reason that shouldn't continue, provided we have a relatively stable macroeconomic environment. And some of that's in part because of the product mix shift, the new partners we're putting on, more co-brand, and that's all manifesting itself into a credit risk mix. And then the consumers are just naturally, you know, the most at-risk ones are charging off, so you end up with a little bit better portfolio on that front. What could put it at risk or accelerate it is really going to be macro-dependent. If, you know, macro bends the wrong way on us, it'll slow the pace of improvement. I still expect some improvement. Now, if there's a sharp increase, a spike in unemployment, well, that's a different animal, or a significant spike in inflation. And, again, if you're running 1% hot, consumers are navigating it. If something happens like the post-COVID environment, that's a different thing. So if things are in this band that we're, you know, working through right now with the macro environment, I think we continue to pace as we are.

Got it. So maybe we'll just switch gears and, you know, touch on the approval for the bank charters, which you guys got recently. Can you maybe just walk us through the expected timeline and kind of the benefits of combining both charters?

Yeah, for us, it was a good milestone that was the right thing for us to pursue. Our teams put a lot of work into being well-positioned to get that approval, and it's really what people and investors can't see that's under the hood. It's really about risk management, about liquidity risk management, capital management. I mean, you guys, obviously, the capital management part of it, you know, hitting the capital ratios, de-levering the company, running it with real strong discipline that the FDIC can see through their exams. And we share with them our plans for the future. And it's, you know, the operational risks. Everything we've stood up that is under the hood has set us up for this moment. And what the benefit for us is having a single bank allows our treasurer, I see here in the audience, Tom McGuire, to really fully fund the entire portfolio with our full suite of funding products. When you had a two-bank system where we had one in Delaware, one in Utah, he had limitations around where we can use our ABS platform was only in the Delaware Bank. And he only did direct-to-consumer deposits out of our Utah bank. Now we can fund with full funding flexibility across the entirety of the portfolio. So the benefits are scale, right, one larger bank instead of two smaller banks. That's helpful. And then as well we'll avoid some franchise tax in one state. So there are some benefits that are, I'll say, on the margins, but overall it's about funding flexibility.

Does that flexibility give you any cost-to-fund benefit over time?

It could, slightly over time, as you have more scale, particularly in direct consumer deposits. You know, a broader name recognition over time. Things like that will certainly give us some scale and opportunity.

Got it. Are there any plans in the future to convert to a bank holding company?

It's something that is certainly being contemplated. There's a good window of opportunity with this administration. You know, I'd say in the next couple of years, if it's something we want to pursue, it could make sense. The first mile marker for us was merging the two banks and getting a real clean bill of health from that merger where there's no conditions. And it was a statement and testament to the work the team has done to position us for that. So, you know, we want to, if we're going to move forward with the National Bank Charter, we want to do, you know, on your front foot and put your best effort in there. and that this is, I'd say, a resounding endorsement that we are ready to go to the next step if we so choose to do it. And if we did, it's not because it changes the products that we offer, things of that nature. It's really more of a defensive measure with all the different state regulations happening out there. Being a national bank, it's just a better place to be if it makes sense for us to go forward with that.

Could that improve your ratings at all?

It could. I mean, that's an excellent point. I think, you know, the improvement that we'd like to see from our ratings is because of how we've run the company from capital management, liquidity risk management, and credit risk. Everything that, you know, we've done, you know, that put us on a positive outlook from a couple of the rating agencies last year, you know, we have executed against, and they continue to improve the health of our company. It's a discipline in which we run it. But being a bank holding company certainly could potentially give us an opportunity, but it really depends on the ratings rubric that each of them uses, so you never know.

Got it. Fair enough. So maybe just turning back to loan growth, you know, your fiscal year guide, you recently raised to low single digits to mid-single digits. Period end loans are up, you know, 4.6% in the second quarter, despite elevated payment rates. How are the payment rates trending quarter to date, and what would give you confidence in reaching the high end of the guide?

Well, let's start with today's performance stats. Through August, we're up 6%, just over 6% of end-of-period loan growth, up from, you know, the number at the end of 2Q. So we are seeing positive momentum in loan growth, which is consistent with what we've said, And it's setting us up, you know, throughout the year to continue to increase that, the loan growth. So it's coming in very nice that we're executing well on signing new partners, deepening the relationship we have with our existing partners, and payment rates have been very steady. So it's not that payment rates are declining or increasing. They've been pretty steady, which, you know, most importantly, as you see, it manifests itself through improving delinquency rates. So improved delinquency rates with a steady payment rate, I think, is a good recipe for, you know, strong financial performance.

Got it. So BreadPay continues to grow at an impressive pace. What's really driving that momentum, and how do you see the opportunity evolving over the next several years?

Yeah, I'm excited about the opportunity with our BreadPay platform, specifically in installment loans. You've always heard me talk about, you know, we're not that interested in the split pay. high volume of small merchants, and trying to get into that game. It's more about unlocking value for larger-scale brand partners like the Home Depot, Vivint Security Systems, Cricket Wireless are three brands that have really seen some nice growth in there. Now, again, we're growing off a small asset base there. But those programs did contribute one-third of our loan growth last quarter, And I expect us to continue to pursue those types of business where we can white-label a product for those merchants and really deliver some value in terms of flexible types of loan products that allows customers to buy something now and pay for those things over a meaningful amount of time.

Got it. At what point could that growth in BreadPay potentially create a need for additional capital partners or even loan sale arrangements to support originations?

Yeah, that's a good question, and one that I think you see a lot of companies out there having to lean on private credit or other types of facilities to fund loans. We generate a lot of capital, and we've said all along our first priority is to use our capital to fund responsible, profitable growth, and that's the type of growth that's going to deliver the right returns. but we would way rather hold those loans on balance sheet and enjoy the full economics of those versus passing those off to others to take those economics. So I don't see any time in the near term that that's something we have to do. If there was a program that we wanted to enter into that was of such scale that it would mean we didn't have enough capital, yes, then it would be the right time to entertain something of that nature. But we, you know, based on what I see in front of us, we have the complete ability to do and fund those programs ourselves.

Got it. So taking a step back, your portfolios diversified meaningfully since pre-pandemic. Can you just talk about some of your recent partnership launches, how they performed relative to your initial expectations?

Yeah, no, I appreciate you saying that. And, you know, this business had been, you know, largely private label, mall-based type retailers years ago. And, you know, since Ralph joined as CEO, really focused on trying to diversify our partner base. You know, you could even think about, you know, some of the big ticket ones that we just signed, you know, back in the fourth quarter, some of the furniture verticals. So expanding our verticals, not just softwood or clothing type retailers. Those are nice-sized brands, whether it's Raymond Flanagan, Furniture First, Ethan Allen. That, again, diversifies us. Then we talk about the buy-now-pay-later ones of Home Depot, the Vivint Cricket Wireless. Again, we've got NFL out there. You've got other brands that are coming online. And when you talk about how they perform, some who've never had a program before, we're kind of guessing around how they're going to perform. Sometimes they perform a little worse. Sometimes they exceed your expectations. Programs that were those furniture ones I mentioned, they had credit programs before, you know, with the incumbent. Now, while we didn't buy the back book, they knew how important credit was to unlocking their credit sale. So those are performing in line or even better than we expected. So it just depends on the program. If it's new space, sometimes we get it wrong, but it's not like it's a big commitment of dollars where if it doesn't perform quite as well. Others, again, like I say, come in way better than you expect. So you're always projecting when you have new programs.

Got it. And what's the pipeline for new programs and renewals look like? You mentioned just a minute ago that if you potentially have a new partner with size, you could potentially pursue some sort of like private capital arrangement.

So one thing that we're very disciplined, what you'll find is some of these real large-scale programs have very thin returns. but they fill certain needs of some large players out there for us you know because of our size and that maybe partnerships that seem less strategically important to some of the much larger peers fit into our wheelhouse so if there's a program that's a hundred million in size to 700 million in size we love those programs right because we can give it the attention and grow with them, where it's not even a rounding error for somebody that's, you know, hundreds of billions of dollars in size. So for us, there's opportunity as some of those programs are getting deprioritized, we have the opportunity to grow into those and win those. And there's always competition, so we're very disciplined with that, but we are winning more than our fair share. And to your point on renewals, we're having a very strong success rate of renewing our key partners. Look, we love all the partners we have. They all perform a little differently, but, you know, as long as we take care of that relationship, we work with them, you know, we value their brands, understand what their needs are. Through data analytics, we provide more insights, and you try to give them flexible, custom, you know, programs or products and programs or loyalty. It's the business we're in. So I think that's one of the reasons why we've had successes we've had with renewals.

Got it. Maybe just to follow up on the recent extension or renewal, Cignet, but maybe just any color on what that conversation was like and, like, how to think about returns for that program kind of going forward?

Yeah, so one of the things that, as you think about renewals in general, I'm a huge fan of renewals. If we take care of that partner, and, again, you go back to what we call a partnership business, both parties working together to grow the program over time and make sure it's meeting the partner's objective of unlocking credit sales for them, returning to them some of the value from the lending side. Obviously, we're taking on the loans and doing the lending that gets the right return for our shareholders. Renewals are part of this business. If you do a good job, my view is a couple years before the natural exploration, you try to get in and get what we call an early renewal done that comes with an extension. It may mean that you're sharing some more of the economics back to the partner through profit share or other things, investments in technology or marketing to continue to grow the program and expand the profit pool, that's a good thing. So in the case of Cygnet, we'll get them locked up a couple years before their natural expiration. We pass over some better economics to them in the time before it goes to expiration. And then after that time, we're probably getting a little better deal than we would have had should have gone to a clean RFP at that point in time and then even risk losing the partner. So it's good for both parties when an early renewal happens because those better economics that they're enjoying, they wouldn't enjoy with anybody else except us. So it's good for both of us, and it gets us very aligned to the same thing. So in this particular case, to speak to, you know, Cigna in particular was a fantastic partner. You know, we're very much aligned now on trying to grow the program together, you know, increase or improve the profit pool, manage risk appropriately, make sure the pricing's right, because if something goes, you know, the wrong way in either direction, they have a lot of skin in the game too when you put that profit share component into it.

Got it. So you mentioned that went to RFP, like potentially lose a partner. I'm not trying to be specific, but, like, maybe just talk about what the competitive landscape kind of looks like for renewals. Is it getting more intensive, like, you know, when these kind of renewals come up?

So, yeah, I've been doing this for over 30 years, and this has been an innate part of the business that entire time. Anytime you have co-brands, partnerships, there's always some partner out there that thinks they're going to get a better deal by going to an RFP. And, you know, the switching cost is high. If somebody wants to leave, you may run the risk of some attrition at the time of moving the portfolio or they have to leave the portfolio behind. So it really is in the benefit of both parties to come to a mutual agreement to extend if you have a good program. Now, there's always some programs coming to market for RFPs. That's how we win a number of the deals that we are, because the partner is not happy with the incumbent issuer. And for whatever reason, they might have been deprioritized. They're not getting the attention and service or customization that they're looking for for their program. And as we've been, you know, gaining our footing over the past, you know, five, six years under Ralph's leadership, you know, we're getting a look at a lot of different opportunities that, you know, early on maybe we didn't get a look at. So the key is continue to advance your own internal technology capabilities. You know, the relationships are so important in terms of how you respect and you listen to what the partner needs, and that's our business. So, you know, what's out there in terms of a pipeline, it's a very good pipeline. We'll have more announcements coming in the future. But, again, some of the wins we have are de novo programs, so programs that just come to RFP, meaning that it's a new program in the marketplace. Others are RFPs where there's an incumbent who maybe with the existing issuer is not as much a priority for them, and that's how we won some of the furniture vertical spaces, and so that's a place we'll continue to play. But competition generally tends to be pretty rational while trying to target something in a similar range of returns. Once in a while, you do get a couple of issuers out there who maybe are a little more hungry to need to grow to meet their growth commitments or fill a hole because they lost the portfolio. But over time, I would tell you that you generally have people leaning in and out, but generally pretty rational with the return targets.

Got it. That's helpful. Where do you see the most attractive opportunities in terms of kind of spending verticals or products that you may want to kind of emphasize or focus on?

Excellent question. It's one where, you know, you look at where the consumer wants to spend. I think for us, the greatest opportunity is continue to expand our co-brand parts of the card business. So before, I think we've talked about this, where before programs used to be private label only and didn't have that co-brand component. Now when you look at retail programs, it's not just a private label. There's actually a retail co-brand such that, like take Alta, you're able to use a co-brand. You can earn points everywhere they want to spend, so you're picking up more of that everyday spend where the consumer then is earning their ultimate rewards. and then the private label may be more of the down sell. So I think the opportunity for us is continue to shift some of these programs more up, I don't want to say upscale, but more that the higher-end consumer that they would have had anyways, but giving them more of that co-brand feature, and it's driving more spend. That's why I said a third of our growth that you saw last quarter was because of the strong co-brand, and part of it is because of the upgrades that we're doing to offer that Visa, MasterCard, or Amex-type product that benefits both our retail partner and the consumer.

Got it. So we'll switch gears and maybe just address NIM. NIM has expanded year over year. Lower late fees and unseasoned loans have limited the extent of that improvement. How can we think about NIM in the medium and longer term, and particularly the mix of bread pay within the port?

NIM is one of those ones that is always the hardest to calculate. You heard me talk about non-interest income and all the puts and takes in there. Net interest margin is one where, again, for the year, we're expecting to be flat slightly up versus last year. You get seasonal movements in net interest margin expected to increase in the third quarter versus second quarter. So it moves around, but you've got a lot of those levers in there. The pricing changes have largely ran its course. You're going to have continued product mix shift to the point you just made. If it's not private label, it's coming in with a lower APR than if it was just pure private label. And as those products mix, it could put a little pressure on top-line APR, particularly if it comes with lower late fees or higher average balance, because even the same late fee will have a lower yield effect. And as you're seeing improved delinquency, we end up with a trending of lower late fees. But as you have improving delinquency, maybe a little less late fee, but you also then down this road have less reversal of interest in fees from lower charge-offs. And so we really focused on what is total risk-adjusted revenue looking like or risk-adjusted and interest margin, and those should still be pretty stable as we look forward.

Got it. And if we were to think about, you know, rate cuts versus hikes, I think when we came into this year, we're pricing in maybe three cuts now, maybe three hikes. What's the impact in them if we were to get those three hikes? And also maybe just talk more broadly about how the balance sheet is positioned for hikes versus cuts.

Yeah, I would say the impact is probably the inverse as if there were three rate cuts. But, no, and so the narrative that I've said, regardless of the rate decrease or the rate increase that we're slightly asset sensitive and that meant if the rate cuts were to happen we'd have a little bit of a detrimental impact if there's a rate hike that occurs you know we should be a slight benefit but I say slight is the word I would circle underline bold you know we've done a really good job of getting ourselves as close to neutral as possible. And we're not trying to make money by betting on which way interest rates we're going to be. So I've been told we are about as neutral as any financial institution as some of our colleagues here have worked with.

Okay. I just wanted to touch on repurchase. Brad's repurchased about 10% of its shares outstanding year-to-date. You've also issued preferred shares twice in the last 12 months. Remind us how the PREFs are helping optimize your capital stack and what benefits do you get for your CT1 ratio.

Yeah, so we're pretty pleased with the preferred issuances that we've gotten done to date. We still have one more leg of preferreds to do. We can have preferreds on the balance sheet of about 1.5% of our risk-weighted assets. So we've got about another $100 million plus that we can do before we're fully optimized. And what that does for us is it reduces our CET1 target from 13.5%-ish, so from 13 to 14 down to 12 to 13, so think about that around 12.5%. And so that's beneficial. We've said probably no sooner than fourth quarter that's going to be approaching soon, and what will be opportunistic market conditions pending and what that would do. But that should unlock the full optimization of the balance sheet and that CET1 target.

Got it. That's super helpful. Maybe just turning back to the consumer and just talking about gas prices, is there some level of gas or oil prices that creates a pressure point? I guess at what point does the consumer start getting into stress from those inflationary prices?

Yeah, I think it depends where you are on the credit spectrum or income spectrum. Obviously, lower-income households are going to feel that pressure faster. So I think their breaking point or tipping point for that price per gallon, if you want to use that as a proxy for energy, is lower than, say, most people in this room. The tipping point is much higher. So it really depends where are you in your leverage point and how much do you have the ability to make adjustments to your household budget. But I don't have a specific number in mind. I think what you've seen to date as the fluctuations have happened, they've been able to absorb it, make adjustments to their family budgets, choices, you've heard me talk about the choiceful consumer, and that's still playing out. So, I mean, that's why we're very pleased with the progress that you've seen in our, you know, reported credit metrics is despite higher fuel prices, you are seeing us outpace even our own internal expectations of how credit would improve.

Got it. Okay. So, you've been targeting, you know, mid-teens, ROTCE longer term. Maybe just talk about your confidence level in achieving that and, you know, what additional steps you would need to take before you reach that target.

So, you know, our stated ROTC target is mid-20s. And that we have a high degree of confidence. And when we put those numbers out there, it contemplated renewals, it contemplated new business coming on. You know, the three levers that are going to get us there are, one, the smallest lever of that is finishing out the capital optimization, you know, that last $100 million-plus of preferreds. Two is getting our loss rate around that 6% level. There's still some more room to go on a full-year average for that to happen. And then the third is continuing to scale and, you know, continue to drive down our efficiency ratio. And I think you've seen we've done a really good job at managing our expenses and continue to make progress there. We got to deliver on that commitment of positive operating leverage year in, year out. And those three things combined, you know, will deliver those mid-20s ROTSIs. Now, if you have a year where you have outsized growth for some reason, your ROTSIs will lower because you've got a bigger CECL growth tax. If you have a year where you grow, you know, low single digits, well, you're not going to have as much CECL growth tax. You might deliver a higher return. And so, you know, I think some of it will fluctuate, but, you know, we have a very clear line of sight and path to get to the mid-20 ROTSIs.

Got it. A few minutes left.

I'll open it up to questions from the audience if there are any. It looks like there are none, so I'll keep going.

Maybe just, you know, talk to us about how you're thinking about AI and technology investments going forward.

Yeah, AI, personally, I am super excited about the opportunity that AI presents itself for our company. One of the things in the way I say I'm excited is we've been on an operational excellence journey for the past few years. And operational excellence, I know it may sound corny to some, but it's a mindset, a culture. So in our company, we've had a lot of people trying to find new ways of working, to simplify the way they work, and we talk about, like, if they embrace operational excellence, it will make their work lives better, and it has, and it's created tens of millions of dollars per year of benefits for our company, and what we've been able to do is reinvest that into newer technology and things. So when these AI opportunities present themselves, we have people with a mindset, hey, I want to try that. I want to try to find a new way. So personal productivity is way up, and you're able to do things far faster, add more value, innovate faster, and people are excited about it. And you have to have a culture of people who want to embrace this, and we've got that. So AI in that regard, very exciting. I'm seeing that pull through in personal productivity. Expect that to deliver, make it up five, ten hours a week to people who can do more or even have to work 60 hours into the late night. but, you know, depends where they are and what they're doing, but produce a lot more value for the firm, and so we don't have to hire as much going forward. So that's going to play through. It can transform every function that we have from collections where, you know, we're able to do more personalized, you know, communication with customers, giving them self-service opportunities, and we're seeing payment rates increase where people are selecting payment plans because think about somebody who's going through a hardship. It's difficult to get on the phone with somebody and say, hey, this is what I'm going through. It can be a little embarrassing at times. I lost my job. Whereas if they can do that, you know, online themselves, we're actually seeing a pickup in payments. Personalized marketing is a great opportunity. You know, but it all starts with good foundational data, good tech stack, and, you know, that's still the modernization process that we're going through. But AI is accelerating the ability to migrate to the cloud. I mean, it is going to improve everything we do and allow us to reimagine how we serve the customer, how we target new customers. So, again, like I said, I'm pretty bullish on the opportunity. But, again, we've got to deal with a real focus on ROI that, you know, we just don't try everything. You don't carpet bomb and just try it because then you're not going to do anything well. So we're being very disciplined. We have a very centralized approach to approving new tools, new applications, new use cases to make sure that we are going to deliver value for our shareholders through the deployment of AI.

Just like two minutes left. Just maybe in closing, what's the key message you want investors to take away from this presentation? What are you most excited about? You know, the stock's up like 40% year-to-date. Anything the market's underappreciating?

Yeah, well, I appreciate the opportunity. One, I'm super excited about our company, about the leadership team, the people of our company who have gotten us to this point, and there's better days ahead. I mean, we are just hitting our stride in terms of winning in the marketplace, putting new capabilities out there. You talk about AI, our approach to AI, and really it's just continuing to do what we said we were going to do. And I think we have a track record of doing that. We've got more to do. We're going to stay focused. We're going to stay disciplined. And our promise is we're going to deliver that value back to the shareholder, and deliver those returns that we've said and put good growth on the board. And I think there's a lot of upside in our company stock.

Okay, great. We'll end it on a good note there. Thank you very much. I always appreciate the time.