Good afternoon, everyone. I guess it's still morning. Good morning, everyone. Thanks for joining us here. For those who I haven't met, I'm Mihir Bhatia. I cover consumer finance and specialty payment companies here at Bank of America Research . We welcome everyone to the conference. Thanks for making the trip for those who did. So, next we have Bread Financial. Bread Financial is a leading private label card issuer. Over the last few years, it has expanded its offerings to provide co-brand cards, proprietary credit cards, and buy now, pay later loans. Over the last three years, Bread has considerably lowered leverage, built its capital ratios as it has navigated through the reopening from the pandemic and various regulatory rules that we may or may not get into. So, I'm delighted to be joined by Ralph and Perry, who are the CEO and CFO of Bread.
Firstly, thank you so much for making the time, coming to the conference.
Pleasure.
I guess,
welcome to the conference.
Thank you. Thank you.
So, quite weak in consumer finance.
Nothing going on there?
Not this year. So, maybe like most topical, lots of conversation at this conference about the big merger, Capital One Discover. What are your initial thoughts? Does it impact your business in any way?
Yeah, you know, it was no doubt a surprise. I think it was a surprise to the industry, as price analysts. I think it's more of a network play than a card combination play. From that perspective, it makes sense. I think it puts them in a position to really compete globally against American Express, having both sides of closing the loop, so to speak, in terms of transactions. I think it, from what I read, it may face some regulatory hurdles, but I think they may be able to get through that. From our perspective, Capital One, more so than Discover, is a competitor. So, we may see them kind of move up the chain. It may be more opportunity for us to compete on certain proposals that may be out there coming in a few years. So, but a bit of a surprise.
Okay. So, let's talk about Bread a little bit. In terms of what are you seeing right now in the environment? How is the consumer doing? How is the typical Bread consumer doing? Are you seeing anything? Maybe talk to us about what you're seeing on spending levels. What are you seeing in the deposit, on the deposit side through the quarter?
You know, I think we've been saying this for a while. The consumer is self-regulating himself and herself, right? So, we see spend moderating. I think if you look across the industry, you'll see that acquisitions and spending is down. We certainly see that. January was spend was down in January. Could have been weather-related, but we saw T&E spend down and restaurants down. That could have been weather-related, but we saw that trend continue into February. Our conjecture is inflation has still got an impact on spend. And even though wage growth is increasing, it still hasn't caught up to the pace of inflation. So, we see the consumers are regulating and a bit soft spend.
Sure. Yeah, and I think the way it's going to manifest itself into the quarter is, as Ralph said, the first six weeks have been you've seen pressure on spend, and we've even seen it more so on big-ticket spend. And so, when you think about big-ticket spend, that's really where you look at merchant discount fee. So, I think what we've seen from looking at consensus, I don't think that analysts have picked up the fact that that's going to have lower Q1 merchant discount fee revenue in that category. So, that's something we're watching. Obviously, we've signaled losses. January came in at 8%, but we've guided to that mid- to high 8% loss range for the quarter, which means you can apply what February and March would look like and expect that to persist into the Q2 within the expected easing in the back part.
Sure. Let's dig in a little bit on that. You mentioned a couple of few categories: T&E, restaurant, big-ticket. So, maybe talk a little bit about that more. What other categories where you are seeing things particularly challenged, even within big-ticket? What kinds of you have lots of verticals. Are there particular verticals within that that you're seeing it? And anything doing well?
What's doing well? I think we saw home improvement do well. Now, that's declining a little bit in big-ticket. Jewelry typically does well, although it got soft in February, but jewelry particularly does well. T&E until January was doing OK. Where we see the biggest impact is really soft goods. That PLCC card is where we see the biggest impact in terms of regulating spend. If you think about our business in 2020, late 2019 and 2020, we were primarily private label, right? We were a private label card, and that was our shop. If you look at us now, we're really a multi-channel and multi-product lender. And so, although we see a slowdown, we are still capturing spend from a general purpose. Over 50% of our spend is general-purpose spend. So, as though we see a slowdown, we're still capturing that spend.
That spend we wouldn't have captured three years ago would have gone to another product. So, although it's slowing, we are capturing our fair share of the spend that's out there.
Good. And then, before we move away from just quarter-to-date things you're seeing, just maybe touch on deposits a little bit. Are you seeing anything interesting happening on the deposit side?
Yeah, we're going to approach $6.7 billion of deposits, which is great for us. It's a really good source of funding. And if you think, again, where we were in 2020, we had barely $1 billion of deposits. So, over these last few years, we've built a good deposit base, quite frankly. All 95% FDIC insured, really safe deposits. And we saw an inflow of deposits during the course of all of the issues with banks. They saw outflows. We saw inflows. And so, we feel good about our deposits. We feel good about our pricing. And it continues to build for us and is a really good source of funding.
Got it. Then, maybe taking a step back, big picture, 2024, you've laid out your guidance. We don't need to go through every number here, but just talk maybe at a high level. Where are the biggest opportunities you're seeing on that? Where are the biggest risks? You mentioned credit a little bit, right? I mean, obviously, you have an idea of when do you need to see losses peak and start declining to get to your guidance ranges? Just generally, about 2024, what are some of the signposts analysts should look for through the year?
Yeah, the signposts that I would look forward to start is the early delinquency formation. Right now, we're seeing delinquency entry rates at some of the lowest levels we've seen since pre-COVID. That's a good sign. The next part of the sign we want to see are the roll rates, when consumers roll from one bucket of delinquency to the next, that those start to ease because the pace at which they roll through is still at an elevated level. I think everybody in the industry is saying it's as high as they've ever seen it. That needs to start to improve, and that will give the confidence that as you get and all that's fundamentally based on wage growth relative to inflation and their ability to have disposable income to pay their bills.
I think that, with their credit-tightening actions, should allow that cresting to occur, hopefully in the Q2 . That then eases to the back part of the year. What happens with interest rates? Anybody's guess. I think you hear everything from maybe there's still an increase to happen to six decreases. Who knows? All that's going to play itself out. And so, it's really going to be macro-led in terms of what would the back part look like.
So, Perry, take the risks. I'll take a couple of the opportunities we have out there. So, I think it's our and we've been doing it, but the ability for us to continue to build capital is a really nice opportunity for us in 2024. We're going to continue to invest in digital and technology because we feel that's exactly where we want to be, and it helps us with delivering a better customer experience and driving down our costs. We want to grow responsibly. I think that's a real opportunity for us to grow responsibly in 2024. And last, we've embarked on, as good companies do, we call it operational excellence, margin improvement. How do we continually improve our margins, embracing technology to improve things we do every day and become more efficient?
Those are the real kind of opportunities as we look at pretty simple focus: focus on growth, invest because you've got to continue to invest in this business, build your capital, and focus on increasing your margin for the long term. That's how we think about 2024. Now, nobody mentioned. You didn't mention it, but the CFPB looms large. We're waiting for that to happen. We feel we've disclosed the impact on us in the Q1 , and we feel that we have plans to close the gap over time. We may not be 100% of the gap, but we'll close that gap over time.
Yep. So, you mentioned the CFPB. We'll do that as the next question. But before that, I just want to touch on this morning, you did, you mentioned capital. This morning, you did put out a press release about the buyback. That's just offsetting valuation. Anything else on that that we should keep in mind about the buyback?
No, I think the way to think about it, we're well-positioned to take actions like that, right? Our capital is in a dramatically improved position from where it was three years ago. We're approaching the targets that we've set out, and we'll talk more about that at our investor day. But we're real pleased with the progress we've made on capital. And as Ralph said, we expect to continue to build capital throughout this year. And I think the company is as well-positioned as it's ever been.
Got it. So, let's talk about the CFPB. Big topic, big for investors. By far, the most questions we get relate to that. What's the latest you're hearing in terms of timing? What are you?
Any day now.
Any day now.
We've been hearing any day now for the last six months. But we think an educated guess, because we have no inside information, is that it may be before the State of the Union. It was before the State of the Union last year. It's a good headline grabber. We may think it'd be before the State of the Union, which is early March. So, we think that might be coming out.
Okay. In terms of your business, right, on your call, you laid out 25% lower revenue if the rule comes out in the Q4 this year, year-over-year lower if it comes out as proposed, if the final rule looks like that. Talk a little firstly, let me compliment you a little bit for just being proactive in providing investors that transparency. I think analysts but investors really do appreciate that. At least it helps people start sizing things and thinking about what the path to recovery looks like. But let's make sure everyone's level set. How did you come up with that 25% number? What is included in that? What is maybe not included in that that we should be careful not to overly make sure it's not overly precise?
Yeah, Mihir, I appreciate you complimenting us because we certainly wrestled with Ralph and I wanted to get it out there, and we had to find the right moment in time to put it out there. And the catalyst event was our full-year guidance. And so, the way we looked at it is the best way to frame what the impact would be is to say what that would look like for the Q4 of this year if you assumed an October 1st implementation date because we just published the Q4 of 2023. So, at least gives a comparable period. We said, "Hey, we don't think it's going to really be effective until June of 2025.
It would be hard to give you a comparability." And so, what's included in there are, I'll say, some early mitigation actions that you start with some increasing pricing on new accounts or some things you're going to do on the back book to start to increase some things. There's not a lot in there on that front, but there's some. And then other fee things that we may be able to execute. But what's not in there are any negotiations that would happen with brand partners in terms of, I'll say, concessions on economics or framing programs differently because that's very active. Every partner is engaged with us, and we've talked about it's a partnership.
They want to make sure that the programs are still viable, can be invested in, that we can continue to underwrite and unlock credit sales for them, but it has to be at the right returns for us. So, none of that is really built through yet. That's part of the mitigation because many of them want to see the final rule be put in place, and rightfully so. Get the final rule announced, and then we'll start to pull on the levers that make sense for both parties. If they want to continue for us to underwrite as deep, there'll have to be some thoughts about how to go about that.
Got it. Now, in your 10-K that you published, you did mention you've already taken some actions. Talk about the actions you've already taken. And does that mean if the rule implementation gets delayed to June 2025, all the actions you've taken will reduce that 25% number?
I think that's a fair way to think about it is some of the early actions. You think about the graphic that we put out there again today. It's the time that it takes for the back book or the existing portfolio to reprice with APR changes because of the CARD Act, the way payment hierarchy works. The first really part of payments go against the highest priced APR, which means it takes a while for the existing portfolio that's lower priced to work its way back up. That's going to take time. The more time we have to put on new accounts at higher APRs or the APR changes on the existing portfolio. Again, I'd say that was the first step in higher APRs has been put into place.
I think the market has not figured out where that equilibrium point will be that will still allow for underwriting to, I'll say, the lower risk bands.
Some of the other mitigation ideas you mentioned as being things like putting credit access fees or maintenance fees, other types of fees effectively. Are there particular fees that, in general I understand each negotiation is different, but when you think of these fees, what are you hearing from brand partners, right? Because I think from the traditional way and I know it's not things are much more digital now, but the traditional way you got a private label card was you got to the counter, you said the person offered you that, "Hey, you'll get this discount if you do this card. Get this card." And that's how you sold it. But if you make that, "Hey, you'll get this card. You have to pay a $50 fee on it," suddenly it probably has an effect on who gets the card.
Are you hearing any pushback from brand partners on that aspect?
It varies, right? I mean, nobody blinks at an annual fee on an airline card or hotel card or certain ones. So, some co-brands will start to have fees, but there has to be a value exchange that it makes sense. And I think you said that well. I mean, if you go to a counter and you get a $25 gift certificate for a $15 annual fee, that may be a trade you're thinking you might do. There could be monthly fees, and you think you've seen some introduce statement fees. Well, it's a way to drive paperless as well. So, you drive down your operating costs if they choose not to get a statement. So, there's things to do like that. Promotional fees used to be prevalent for big-ticket purchases. You may see a reintroduction of that. But that probably won't happen until after the act is final.
But there are all different ways to have mitigation, but it really will be brand-dependent.
And then I'll stay on this topic for a couple more questions here just because it is so topical and we get so many questions from investors on it. So, one of the pushbacks we've heard from investors on the mitigation strategies is, "Hey, if it was so easy to get higher interest rates, why haven't they been charging it already?" Like credit card companies like to maximize returns, and they would have been charged if there was no pushback. So, why haven't you been charging the rates, higher rates already? What has been the holdback? Is it partners? Is it? I guess you tell us.
You want to stay competitive, right? So, you want to stay competitive, and that's important. You want to stay in a competitive set, so you want to stay within that set. Listen, here's the outcome of all of this, right? The 80% of people that pay their bills on time are now going to have a higher cost of credit because they got to pay for the 20% that don't, right? Those people that really need credit that we underwrote because we were willing to take a risk with a late fee, we will not underwrite them anymore. So, people will pay higher costs for credit across the board, and those people that really need credit the most are not going to be able to get it. So, from that perspective, I'm not sure what we solved here.
I think what the CFPB talked about, a cost to collect, is erroneous. This is a cost to lend. It's a cost to lend money and make that underwriting decision, not a cost to collect a late fee. That's an outcome of somebody having a late fee. The late fee is there to, one, help people kind of get trained to pay on time. And two, it's part of the economic equation, which the CFPB has now changed respectfully back to the back book. So, for us, it's we're going to raise APRs across the board as everybody else is, but we need to be on that competitive set. And that's how we'll focus on it. So, I think, yes, everybody could have raised APRs, right? But it would have been there was no particular outcry to do that. Now, this is a this puts a gap in people's P&Ls.
Being responsible public companies, how do you close that gap responsibly? This is a way to do it. If you think about APRs, there's always been risk-based pricing, right? The best credit-quality people pay lower interest rates usually because there's lower probability of default. When you underwrite deeper, there'll be higher interest rates. So, I think you're going to see a normalization, an equilibrium that's reached.
And then on the fees side, you're replacing late, I mean, some of the fees you mentioned, you're effectively replacing late fees with some other fees. I can't imagine the CFPB is excited when they see that or that was the outcome they would that was intended, if you will, right? Any concerns on that side that regulators come in and say, "Hey, wait, hang on a minute"?
Well, again, we're banks, and there's safety and soundness. You need to underwrite and get paid on the capital you hold. So, there should have been an expectation that when they bang that drum that they're going to save the Americans however much in late fees, that that was going to be made back up in some other way by the banks, or they're not going to underwrite. There's a zero-sum game. So, it's not as if, but yeah, you want to make sure that we're not putting fees out there that are not within the norms, what's not permissible. And trust me, we'll make sure of that. And I think the industry as a whole, you're seeing it. Annual fees are permissible. Promotional fees are permissible. Maintenance fees are permissible. So, it's cost of credit. Like Ralph said, it's a cost of lending.
Got it. Okay. I'll move on from CFPB to your other favorite topic, credit.
Credit.
Right? So, we talked a little bit about, look, your full-year guidance for 8%. That's up about 50-75 basis, call it, year-over-year. You talked about it potentially getting better in the back half of the year. Are you seeing those signposts in the internal data that tell you that, yes, it will definitely get better as you get to the back half of the year, or are you still waiting to see the signposts?
What I say is you just used the word definite. So, again, being credible.
Highly probable.
Highly probable. Well, again, it's based on the macro, I'll say, outlooks that we're all consuming, right? The outlooks are assuming an improving period of lowering inflation in the back half of the year, declining interest rates. If those things are held true, then that would be a tailwind to improving credit. As well, we're encouraged by the early-stage delinquency is for the early formations are improving. So, that says, "Okay, if that continues as a result of credit tightening that we've put in place, that should aid the back part of the year." I mean, there's some obviously, the delinquency is already in the pipeline that's going to hit through Q2 , where I gave you the commentary earlier that it's going to remain elevated.
But as we continue to tighten and the delinquency formation is lower again, so if the roll rates can maintain or start to improve, then you're going to see this go. And one thing we've all seen in prior cycles, you end up in this period of elevated losses while it cleanses out the higher-risk folks. So, that then means you have a period of time afterwards where you get back closer to your through-the-cycle expectations.
Got it. When do you think you get to peak losses? Would you be willing to take a guess? We get monthly data from you guys, right? So, should we expect peak losses in March, April, sooner or later? Is that a reasonable time to expect?
You're going to see a meaningful step up in February, March. February is going to have that average daily weighting going to it, the day-weighted calculation versus simple average. But I think it's going to be in that time frame where you just said that.
Okay. And then the path to get to your long-term guidance is below 6%, right? How do you get there? What needs to happen in the macro or in the book to get you there? Does something need to change, or is it just literally a matter of, "Hey, we'll get through this period of elevated loss and things just get better"?
It's macro. And it's macro and resuming just normal growth, not outsized growth. But when you have normal growth, right now, we're also, through responsible growth, putting on smaller vintages. That reduces your denominator of clean new loans coming in. That increases your loss rate. So, some of the loss rate that you're seeing an increase for this year is because we've contracted the book a little bit. When you get through the cycle, you're going to see the improving consumer. So, the roll rates get better. Early delinquency gets better. That brings you back down. And then you have normal business growth coupled with the fact that we've continued to further diversify into more co-brands. The product risk mix improves. It should be a nice tailwind to get back towards that 6%. It's a question of just how fast because it's really about this is different.
Every cycle is different than the prior one. So, it's just what's the duration and how does it cure?
Got it. And then just on CECL, right? Reserve rate. Look, your 9% reserve, day-one CECL reserve rate. I think a lot of investors, even when it was first released, raised some eyebrows. It seems a little low, given what we heard from other companies and Bread's historical and ADS's historical loss profile. What's a reasonable rate that we should be thinking about as through the cycle? This is reasonable, I imagine, for you. You don't get back to day-one CECL, but clearly, right now, there's some macro pressures. There's some elevated loss content keeping the reserve rate high. So, what's the delta we should be thinking about it gets back to?
Yeah, I don't have a specific number in mind, but what I would say is that if you took the current portfolio construct and ran it through those economic assumptions, you end up with a lower day-one CECL. But what that original CECL number didn't maybe contemplate is downside scenarios, that us being more conservative and responsible, I'll say, in some ways, you want to have a weighting of some downside scenarios that's sort of a risk overlay that you put back on it. So, the question is going to be, I don't think we'll ever be in a position where we say, "Boy, everything's just going to be blue sky. It's always going to be better." You take a full range of outcomes. So, the portfolio risk mix will really be a determinant of how much lower does the reserve rate go and how fast does it come down.
I expect that reserve rate to come down. As you're peaking and then coming down and the outlooks get better, we'll march our way back towards a lower number. How low does it go? I mean, heck, if we started to become a business that had 3% through-the-cycle losses, oh, we'd be way below that. So, it's really what is the resulting no, right? But what's the resulting business mix a couple years out?
Perry and I have had a lot of conversations about CECL. My view is we are certainly adequately reserved for the present economy, right? I think that's where you want to be, right? So, I, too, when I joined that day-one CECL seemed a little light to me. Perry and I have gone through a process of saying, "We're not going to surprise investors, right? We're going to have we're going to be adequately reserved for the macroeconomic environment we're in." I think that's where we are. I think as environments change, we'll be thoughtful and deliberate and conservative in terms of how we move forward. From my perspective, that's what investors should expect.
Yeah, and we've signaled, right? Expect the reserve rate to go back up in the Q1 , similar to what it was previous because right now, you had a suppression that happened in the Q4 due to seasonality. Expect it to come back up. And we're hoping not to see any material moves, but again, we look at it at the end of every quarter. You run the models. You look at the overlays, and you end up where you end up.
Sure. Maybe switching gears to operating leverage. Ralph, since you've come in, you've invested a lot in digital. But right now, you do have some headwinds, whether it's the CFPB potentially can pressure revenue a little bit, higher charge-offs. Talk about balancing those investments versus delivering earnings for shareholders. And just how much discretionary spending is there in the budget where you can pull back if needed?
I would say there's adequate discretionary spending in the budget. So, we have our investment plan. We'll call it a book of work for the next 12 months. But there are opportunities to say if we don't see revenue coming in as we expected, there's chance to make those investments a little later, delay them, move them a bit differently as we move forward. So, we do have those levers. We're always focused on expense management, right? That's a key to us in terms of managing our non-interest expense closely and doing it in a thoughtful way. So, we always strive for positive operating leverage. And we do have levers to pull. That said, not investing in this business is not an option, right? So, when I first got here, there was limited investment in the cards business. And it was costly to jump-start that investment.
You've got to consistently invest in this business moving forward, or you're going to be behind your competitors. Right now, we feel our capabilities are where we want them to be with competitors, and we can't stop investing in that. We've brought in a good seasoned team to manage this thing going forward. We do have levers to pull if we don't see the revenue coming in as we prescribe.
Got it. So, moving to capital, your capital ratios have improved very meaningfully over the last few years. You made a lot of progress over the last year. And I'll shout out Tom, who's sitting in the front row here for, I imagine, leading that process and achieving it. But talk about the near-term capital priorities. What are you thinking of? One question we get a lot from investors is, "Bread's the only credit card company or large credit card company that's not doing a lot of buybacks?" Pre-Discovers.
Well, listen, our capital priorities haven't changed, right? It's paying down debt, clearly a priority for us. And I think we've demonstrated that. Building our balance sheet, which four years ago needed a lot of building, and it continues to need some building. Investing in the business. And then ultimately, returning value to shareholders. I think we've done a nice job building capital. At this point, I'll let Perry talk about it too. But while we've done this buyback, it's maintenance and good housekeeping. I don't think we're in a position yet, from a capital perspective, to do a big buyback. I think we'll continue our capital priorities as I said they were, paying down almost 60% of your debt in three years as a parent, reducing your double leverage from over 2 to 127, and we'll be below that as we move forward.
Our tangible book value is over $45. I think we're still in a bit of a building mode before we went out and did deploy some capital towards the share buyback. Yeah.
The way you think about it is we're probably in the eighth inning of our capital execution, right? You think about taking $1.8.
Top of the eighth.
Well, we took, what, $1.8 billion of capital? I mean, you know the valuation of our company. We took $1.8 billion and paid down debt. So, I think we're fixing the balance sheet for things that the prior administrations had done. We've built capital up from a 3% TCE to TA to over 10%. So, we have created and we increased our CECL reserve you talked about. All these things, think about the amount of capital generation we've had in the past three years to take those actions tells you, as we that's why I said the eighth inning. We're close now to getting our capital where it needs to be, another $100 million of debt paid down. And you got to deal with the CFPBs. We recognize that. But the capital generation is pretty powerful.
Got it. So, we have about 7-8 minutes left. So, I'll ask one more question, then maybe open it up. Both of you came from larger institutions. Talk about some of the things that surprised you when you got to Bread, both maybe in a good way even and areas where you saw you had to make investments. Are there still gaps that need to be resolved that we should keep in mind as we think about the outlook?
Yeah. So, what surprised me in a really good way was the employee base, right? They were dedicated to really servicing their partners. And I think that's been and I think that's been a brand image of ADS. They know how to manage partnerships. I think that's a really, really good thing. I think that's important. So, that we have. The company had good bones. I think it kind of got the card business was being milked a little bit for the other businesses. So, having us kind of move the other businesses offwards was a good thing so we could focus on this card business, which is a high-return business. What we had to fix was being behind a little bit in digital. So, we were behind a bit in digital.
We needed to bring in some really people that really knew the unsecured lending business like Perry and others that really knew how to manage this business well. One of the things that was interesting to me is I came from Citi, and I ran their credit cards business. I had a desk and a locker at Citi. When I came here, I had this kind of opulent big office. I was like, it's like, we don't deserve that. We need to kind of rein in all the aesthetics of this business. We've done that. COVID helped us do that as well. But to me, I think that the attitude of the people to service their brand partners and their customers was palatable.
The other thing to me, too, is they had a really good handle on managing risk in terms of how they underwrote because they underwrote a little bit deeper, but also how they managed the individuals through the credit cycle, right? So, from initial line assignment through collections, they had it down better than I've seen at larger institutions.
Perry, if you want to go. I heard you mentioned responsible growth, which, working at Bank of America, I've obviously heard lots of times. I heard you mention that earlier, but.
Fortress balance sheet, right?
After a 33-year career at Bank of America and a predecessor company, you definitely learned a lot of the values of responsible growth. And how it's defined is different, right? And so, when you talk about when I got to Bread Financial and saw the loss rates, my eyes popped. But then you realize responsible was about getting the right return on capital and underwriting for profit, partnering well with the brand partners. And what I was most impressed with was the sheer talent at the organization because I thought, hey, I'm sure like Ralph as well, we've seen some amazing talent in the credit card space. And every bit is good. And the grit they had, the wanting to work together. So, it was really refreshing to see that. But being able to be in a company that's more nimble, like we make decisions really fast.
You can't do that at a big, big company. So, that's been, I'll say, empowering for the teams. And that's been great, obviously. It was a bit shocking to realize the lack of financial services discipline that existed. And I'll speak for the treasury CFO organizations. We brought in seasoned professionals from the financial services areas, both as a Chief Accounting Officer, Treasurer, Corporate Planning, so to complement the team. And you're seeing that pay off now in the way we're executing the business.
Yeah. So, there's about four minutes, five minutes left. I mean, if anyone has any questions, or I can go ahead and ask my last one. No one? Okay. So, just the last question. Look, we've talked about various things, CFPB, credit, all this stuff. What are you really focused on achieving in 2024? What are the one or two things that you think that if you get right, that's what's really going to drive Bread's returns long term? What are you really?
Yeah. I'm going to bore you with my answer, but I'll tell you what it is. Growing responsibly is key to us, right? And managing through this macroeconomic environment and the regulatory environment, come what may, is critically important to us. We're going to continue to invest in digital, continue to invest in technology because that's the way forward in terms of making sure that we can service our customers well and our cost bases in line. And lastly, operational excellence is critically important to us where we're going to do things differently to improve our margins. That's our focus for 2024. That's where we're going to be. But it's more of the same, which is and we'll continue to be very transparent and very we'll continue to tell our investors, here's what we say is what we do. And we'll continue to demonstrate that.
That's important for us in 2024.
Great. I think we can leave it there unless yep. I think we'll leave it there, Perry. Ralph, thank you so much.
Pleasure.
Thanks, gentlemen.