Bread Financial Holdings Inc (BFH) 2023 Q1 法說會逐字稿

Good morning, and welcome to Bread Financial's First Quarter Earnings Conference Call. My name is Daisy, and I'll be coordinating your call today. (Operator Instructions)

早上好，歡迎來到 Bread Financial 的第一季度收益電話會議。我叫 Daisy，今天我會協調你的來電。 （操作員說明）

It is now my pleasure to introduce Mr. Brian Vereb, Head of Investor Relations at Bread Financial to begin. So Brian, please go ahead.

現在我很高興開始介紹 Bread Financial 投資者關係主管 Brian Vereb 先生。所以布賴恩，請繼續。

Thank you. 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 Bread Financial; and Perry Beberman, Executive Vice President and Chief Financial Officer of Bread Financial. 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.

謝謝。我們將審查的幻燈片副本和收益發布可以在我們網站的投資者關係部分找到。 Bread Financial 總裁兼首席執行官 Ralph Andretta 出席了今天的電話會議； Bread Financial 執行副總裁兼首席財務官 Perry Beberman。在我們開始之前，我想提醒您，在今天的電話會議上發表的一些評論和對您問題的一些答复可能包含前瞻性陳述。

These statements are based on management's current expectations and assumptions and are subject to the risks and uncertainties described in the company's earnings release and other filings with the SEC. 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 are included in our quarterly earnings materials posted on our Investor Relations website at breadfinancial.com. With that, I would like to turn the call over to Ralph Andretta.

這些陳述基於管理層當前的預期和假設，並受到公司收益發布和向美國證券交易委員會提交的其他文件中描述的風險和不確定性的影響。同樣在今天的電話會議上，我們的發言人將提及某些非 GAAP 財務指標，我們相信這些指標將為投資者提供有用的信息。這些措施與 GAAP 的對賬包含在我們的投資者關係網站 breadfinancial.com 上發布的季度收益材料中。有了這個，我想把電話轉給 Ralph Andretta。

Thank you, Brian, and good morning to everyone joining the call. I will begin today's call by reviewing our key focus areas as we continue to execute on our business transformation. Then given the recent volatility in the banking sector, I will highlight the company's strong financial standing and the actions we have taken to improve our stability. Finally, Perry will review the financials for the first quarter. We have made great progress in the first quarter, including building our total company TCE to TA capital ratio above the 9% level.

謝謝你，布賴恩，早上好所有參加電話會議的人。在我們繼續執行業務轉型的過程中，我將通過回顧我們的主要關注領域來開始今天的電話會議。然後鑑於最近銀行業的波動，我將強調公司強大的財務狀況以及我們為提高穩定性而採取的行動。最後，佩里將審查第一季度的財務狀況。我們在第一季度取得了很大進展，包括將我們的公司總 TCE 與 TA 資本比率提高到 9% 以上。

Starting on Slide 3, our current initiatives center on 4 key focus areas: growing responsibly, strengthening our balance sheet, optimizing data and technology and strategically investing in our business. Sustainable profitable growth has been a focal point for our management team over the past 3 years and now will continue moving forward. Our business development pipeline remains active with first quarter new partner launches, including all pet credit, the Cleveland Cavaliers, Michaels, The New York Yankees and World Market. Also, we are pleased to announce the extension of our long-standing relationship with Signet, the world's largest retailer of diamond jewelry with the extension of 5 largest brand partners based on outstanding loan balances are now secured through at least 2028.

從幻燈片 3 開始，我們當前的舉措集中在 4 個重點領域：負責任地發展、加強我們的資產負債表、優化數據和技術以及對我們的業務進行戰略投資。在過去的 3 年裡，可持續的盈利增長一直是我們管理團隊的關注點，現在將繼續向前發展。我們的業務開發管道在第一季度推出新合作夥伴時保持活躍，包括所有寵物信貸、克利夫蘭騎士隊、邁克爾斯隊、紐約洋基隊和世界市場。此外，我們很高興地宣布，我們與全球最大的鑽石珠寶零售商 Signet 的長期合作關係得以擴展，基於未償還貸款餘額的 5 個最大品牌合作夥伴的擴展現在至少可保證到 2028 年。

We will continue to support organic and new partner growth that we expect will deliver long-term value. We will continue to enhance our capital position, refine our funding structure and proactively manage our credit, liquidity and interest rate risk to strengthen our balance sheet. Additionally, as we near the end of significant tech monetization initiatives, we have begun to leverage the innovative capabilities gained through the Fiserv platform, converting to the cloud (inaudible), our new collection solution, all to benefit from scale, platform optimization and speed to market.

我們將繼續支持有機和新的合作夥伴增長，我們預計這將帶來長期價值。我們將繼續加強我們的資本狀況，優化我們的資金結構，並積極管理我們的信貸、流動性和利率風險，以加強我們的資產負債表。此外，隨著重大技術貨幣化計劃接近尾聲，我們開始利用通過 Fiserv 平台獲得的創新能力，轉換為我們新的收集解決方案雲（聽不清），所有這些都將受益於規模、平台優化和速度市場。

Finally, our technology and product innovation will continue in 2023. Just this month, we received industry recognition for our Bread Cashback card launch being named Best Credit Card Payments Solution by the Fintech Breakthrough Awards. This acknowledgment highlights our team's dedication to creating innovative, transparent and easy-to-use payment solutions that serve the ever-changing needs of our consumers. We will continue the spirit of innovation with a focus on expanding our digital and mobile customer engagement to provide customers with enhanced experiences. As always, we remain disciplined and are investing to drive long-term growth. Moving to Slide 4. Through our business transformation efforts, we have made decisions to enhance financial resiliency of our company.

最後，我們的技術和產品創新將在 2023 年繼續進行。就在本月，我們推出的 Bread Cashback 卡獲得了行業認可，被金融科技突破獎評為最佳信用卡支付解決方案。這一認可凸顯了我們團隊致力於創造創新、透明和易於使用的支付解決方案，以滿足我們消費者不斷變化的需求。我們將繼續發揚創新精神，專注於擴大我們的數字和移動客戶參與度，為客戶提供更好的體驗。一如既往，我們保持紀律，並正在投資以推動長期增長。轉到幻燈片 4。通過我們的業務轉型努力，我們做出了增強公司財務彈性的決定。

Over the past 3 years, we have improved our product, partner and funding diversification, strengthened our balance sheet and enhanced our credit risk management and underlying credit distribution. We continuously update our credit risk management models and underwriting criteria with an emphasis on proactively managing credit lines and balances. We believe that our improved risk profile coupled with our more diverse portfolio and brand partner base strongly position us to manage through the entire economic cycle and outperform historic levels.

在過去的 3 年裡，我們改善了產品、合作夥伴和資金的多元化，加強了資產負債表，加強了信用風險管理和基礎信用分配。我們不斷更新我們的信用風險管理模型和承保標準，重點是主動管理信用額度和余額。我們相信，我們改善的風險狀況加上我們更多樣化的投資組合和品牌合作夥伴基礎，使我們能夠在整個經濟周期中進行管理並超越歷史水平。

Slide 5 provides additional color on our balance sheet management and disciplined financial oversight. Starting with our funding. We have a diverse, stable and growing funding base. Notably, we experienced net positive inflows of deposit balances on our Bread Savings direct-to-consumer platform during the first quarter, up 3% from year-end as well as over the last 2 weeks of March when many banks experienced net deposit outflows. Our program consists of nearly 100,000 accounts with more than 90% of total deposits within the FDIC insurance limits. We remain confident in our ability to efficiently fund our long-term growth objectives and further broaden our funding base with growth from direct-to-consumer deposits going forward.

幻燈片 5 為我們的資產負債表管理和嚴格的財務監督提供了額外的色彩。從我們的資金開始。我們擁有多元化、穩定且不斷增長的資金基礎。值得注意的是，我們在第一季度直接面向消費者的 Bread Savings 平台上的存款餘額出現淨正流入，比年底和 3 月的最後兩週增加了 3%，當時許多銀行都出現了存款淨流出。我們的計劃包括近 100,000 個賬戶，其中超過 90% 的總存款在 FDIC 保險限額內。我們仍然相信我們有能力有效地為我們的長期增長目標提供資金，並隨著未來直接面向消費者的存款的增長進一步擴大我們的資金基礎。

Our disciplined approach to financial management is reflected in our liquidity portfolio. It consists of nearly all cash held at the Federal Reserve with no Held-to-Maturity securities. We remain committed to prudent interest rate management with regard to interest rate risk, asset and liability management. Strengthening our balance sheet has been fundamental to our business transformation, and we are pleased with our progress. We significantly improved our capital ratios, including nearly tripling our TCE to TA ratio since the first quarter of 2020 to over 9% at quarter end.

我們嚴格的財務管理方法反映在我們的流動性組合中。它包括美聯儲持有的幾乎所有現金，沒有持有至到期日的證券。在利率風險、資產負債管理方面，本行堅持審慎的利率管理。加強我們的資產負債表一直是我們業務轉型的基礎，我們對我們的進展感到滿意。我們顯著提高了我們的資本比率，包括自 2020 年第一季度以來將我們的 TCE 與 TA 比率提高了近兩倍，在季度末達到 9% 以上。

We reduced our parent level debt by nearly 40% since my arrival over 3 years ago and remain committed to further reducing our leverage over the coming years. Finally, we built our credit loss absorption capacity with a 300 basis point increase in our reserve rate from our CECL Day 1 rate in 2020. These significant accomplishments over the past 3 years are a testament and dedication and commitment to the entire Bread Financial team. And in closing, it is that team that has enabled Bread Financial to recently earn a spot on Newsweek's America's Most Trustworthy Companies list of 2023. The essential qualities that underpin successful companies, credibility, transparency and trust worthiness are consistent with our values as an organization, and we are confident that leading Bread Financial with integrity and strong governance will deliver long-term value for our stakeholders. I'll now pass it to Perry to review the financials.

自從我 3 年前上任以來，我們將母公司的債務減少了近 40%，並繼續致力於在未來幾年進一步降低我們的槓桿率。最後，我們通過將準備金率從 2020 年的 CECL Day 1 利率提高 300 個基點來建立我們的信用損失吸收能力。過去 3 年取得的這些重大成就是對整個 Bread Financial 團隊的證明、奉獻和承諾。最後，正是這支團隊讓 Bread Financial 最近在《新聞周刊》的 2023 年美國最值得信賴公司名單中佔有一席之地。支撐成功公司的基本品質、信譽、透明度和可信度與我們作為一個組織的價值觀是一致的，我們相信，以誠信和強有力的治理領導 Bread Financial 將為我們的利益相關者帶來長期價值。我現在將其傳遞給 Perry 以審查財務狀況。

Thanks, Ralph. Slide 6 provides our first quarter financial highlights. Bread Financial's credit sales were up 7% year-over-year to $7.4 billion. While consumers continue to spend, growth slowed during the quarter as consumer sentiment continued to decline. We are seeing that many borrowers across the credit spectrum and all income groups are making decisions to pull back on discretionary spend as a result of broad-based inflation. Our strategic shift to increase our co-brand and proprietary offerings over the past 3 years allows us to retain this nondiscretionary general purpose spend.

謝謝，拉爾夫。幻燈片 6 提供了我們第一季度的財務亮點。 Bread Financial 的信貸銷售額同比增長 7% 至 74 億美元。儘管消費者繼續消費，但由於消費者信心繼續下滑，本季度增長放緩。我們看到，由於廣泛的通貨膨脹，信貸範圍內的許多藉款人和所有收入群體都在決定減少可自由支配的支出。我們在過去 3 年中增加聯合品牌和專有產品的戰略轉變使我們能夠保留這種非自由支配的通用支出。

Co-brand and proprietary spend now comprise around half of our credit sales, averaging end-of-period loans increased 17% and 7%, respectively, year-over-year, driven by credit sales growth, brand partner launches, including AAA and the NFL as well as normalization and further moderation in consumer payment rates. The $2.3 billion BJ's portfolio sale in February of this year impacted these figures. As a result of the sale, we expect second quarter credit sales to be slightly lower than the first quarter despite normal seasonal uplift in the second quarter. Revenue for the quarter was $1.3 billion, up 40% versus first quarter of 2022, resulting from the $230 million gain on portfolio sale related to the BJ's portfolio and higher average loan balances.

聯合品牌和專有支出現在占我們信貸銷售的一半左右，平均期末貸款同比分別增長 17% 和 7%，這主要受信貸銷售增長、品牌合作夥伴推出（包括 AAA 和NFL 以及消費者支付率的正常化和進一步緩和。今年 2 月 BJ 的 23 億美元投資組合出售對這些數字產生了影響。由於出售，我們預計第二季度信貸銷售將略低於第一季度，儘管第二季度出現正常的季節性增長。本季度收入為 13 億美元，比 2022 年第一季度增長 40%，這是由於與 BJ 的投資組合相關的投資組合出售收益 2.3 億美元以及平均貸款餘額增加所致。

Total noninterest expense has increased 28% year-over-year. The sale of BJ's portfolio also resulted in a loan loss reserve release, which benefited our first quarter net income. Looking at the financials in more detail on Slide 7. Total net interest income was up 13% from the first quarter of 2022, resulting from higher average loan balances. Noninterest income was $172 million in the first quarter, which included a $230 million gain on sale. Total noninterest expenses increased 28% from the first quarter of 2022 and slightly declined sequentially as expected. The year-over-year increase was the result of higher employee compensation and benefits costs driven by increased hiring inclusive of accelerated digital and technology modernization related hiring and customer care and collection staffing.

非利息支出總額同比增長 28%。 BJ 投資組合的出售也導致貸款損失準備金釋放，這有利於我們第一季度的淨收入。在幻燈片 7 中更詳細地查看財務數據。淨利息收入總額比 2022 年第一季度增長 13%，這是由於平均貸款餘額增加所致。第一季度非利息收入為 1.72 億美元，其中包括 2.3 億美元的銷售收益。非利息支出總額比 2022 年第一季度增長 28%，如預期的那樣略有下降。同比增長是由於招聘增加導致員工薪酬和福利成本增加，包括加速數字和技術現代化相關的招聘以及客戶服務和收款人員。

We also saw increased transaction volume and systems-related expenses. Additional details on expense drivers can be found in the appendix of the slide deck. Overall, income from continuing operations was up $244 million for the quarter versus the first quarter of 2022. PPNR improved 50% year-over-year, driven by the gain on portfolio sale. Excluding the sale, PPNR increased $20 million or 4%, marking the eighth consecutive quarter that we've generated year-over-year PPNR growth, we remain focused on producing quality sustainable earnings.

我們還看到交易量和系統相關費用有所增加。有關費用驅動因素的更多詳細信息，請參見幻燈片的附錄。總體而言，與 2022 年第一季度相比，本季度持續經營收入增加了 2.44 億美元。PPNR 同比增長 50%，這得益於投資組合銷售收益。不包括出售，PPNR 增加了 2000 萬美元或 4%，這是我們連續第八個季度實現 PPNR 同比增長，我們仍然專注於產生高質量的可持續收益。

Turning to Slide 8. Loan yields continue to increase, up 100 basis points year-over-year. Loan yields benefited from prime rate moving higher, which results in our variable-price loans moving higher in tandem. This increase was partially offset by an increase in reversal of interest and fees related to elevated credit losses. Funding costs continue to be in line with our expectations. Overall, net interest margins remained strong at 19% with a risk-adjusted loan yield of nearly 20% in the quarter. As you can see on the bottom right graph, we continue to improve our funding mix through our actions to grow our direct-to-consumer deposits and reduce our parent unsecured borrowings while maintaining the flexibility of secured, unsecured and wholesale funding.

轉到幻燈片 8。貸款收益率繼續上升，同比上升 100 個基點。貸款收益率受益於最優惠利率走高，這導致我們的可變價格貸款同步走高。這一增長部分被與信用損失增加相關的利息和費用沖銷的增加所抵消。融資成本繼續符合我們的預期。總體而言，淨息差保持在 19% 的強勁水平，本季度經風險調整後的貸款收益率接近 20%。正如您在右下角的圖表中看到的那樣，我們通過我們的行動繼續改善我們的資金組合，以增加我們的直接面向消費者的存款並減少我們的母公司無擔保借款，同時保持有擔保、無擔保和批發融資的靈活性。

Typical seasonal loan balance paydowns in the first quarter combined with the sale of BJ's portfolio, reduced our funding requirements by over $3.3 billion from year-end. As a result, we opportunistically reduced our wholesale and brokered deposits and paid down a large portion of our secured conduit line balances. Importantly, we recently renewed 2 of our secured borrowing conduit facilities of approximately $5 billion and expect to renew the remaining upcoming maturing facility of $300 million this quarter. These funding lines provide valuable long-term flexibility and further diversify our company's funding needs.

第一季度典型的季節性貸款餘額償還加上 BJ 投資組合的出售，使我們的資金需求比年底減少了超過 33 億美元。因此，我們機會主義地減少了我們的批發和經紀存款，並支付了我們擔保管道餘額的很大一部分。重要的是，我們最近更新了 2 個大約 50 億美元的有擔保借款渠道設施，並預計將在本季度更新剩餘的即將到期的 3 億美元設施。這些資金額度提供了寶貴的長期靈活性，並進一步使我們公司的資金需求多樣化。

Turning to Slide 9. We are proud of the success and funding diversification we have achieved with our direct-to-consumer deposits. Our direct-to-consumer average deposits grew 70% year-over-year to $5.6 billion for the quarter. These deposits represented 28% of our total funding mix versus 19% a year ago. Again, over 90% of our direct-to-consumer deposits are FDIC insured. Given the repricing characteristics of our credit card portfolio, we are able to offer very competitive rates to drive growth and maintain balanced stability even amidst the recent market volatility. We anticipate that direct-to-consumer deposits will continue to make up a large portion of our overall funding over time. Moving on to Slide 10.

轉到幻燈片 9。我們為通過直接面向消費者的存款取得的成功和資金多元化感到自豪。本季度我們直接面向消費者的平均存款同比增長 70% 至 56 億美元。這些存款占我們總資金組合的 28%，而一年前這一比例為 19%。同樣，我們超過 90% 的直接面向消費者的存款是 FDIC 保險的。鑑於我們信用卡組合的重新定價特徵，即使在最近的市場波動中，我們也能夠提供極具競爭力的利率來推動增長並保持平衡穩定。我們預計，隨著時間的推移，直接面向消費者的存款將繼續占我們總資金的很大一部分。轉到幻燈片 10。

Our delinquency rate for the first quarter was 5.7%, up slightly from the fourth quarter as pressure from persistent inflation continues to impact consumer payment behaviors. The net loss rate was 7% for the quarter. We estimate the first quarter rate was elevated by approximately 40 basis points from customer accommodations made in July of 2022 related to the transition of our credit card processing services. The reserve rate increased 80 basis points sequentially to 12.3%, predominantly as a result of seasonality and the BJ's portfolio sale with its higher-than-average credit quality.

我們第一季度的拖欠率為 5.7%，比第四季度略有上升，因為持續通脹的壓力繼續影響消費者的支付行為。本季度的淨虧損率為 7%。我們估計，根據 2022 年 7 月與我們的信用卡處理服務轉型相關的客戶調整，第一季度利率提高了約 40 個基點。準備金率連續上調 80 個基點至 12.3%，這主要是由於季節性因素和 BJ 出售高於平均水平的信用質量的投資組合。

We intend to maintain a conservative weighting of economic scenarios in our credit reserve model in anticipation of increasing macroeconomic challenges and the expected potential impact on our credit performance metrics. As previously mentioned, we estimate that our reserve rate could increase up to approximately 12.5% in the coming quarters due to continued macroeconomic pressures. Our credit risk [or] distribution mix adjusted downward from the fourth quarter as a result of the exit of the BJ's portfolio and seasonality.

我們打算在我們的信用儲備模型中保持保守的經濟情景權重，以應對日益嚴峻的宏觀經濟挑戰以及對我們的信用績效指標的預期潛在影響。如前所述，由於持續的宏觀經濟壓力，我們估計我們的準備金率在未來幾個季度可能會增加至約 12.5%。由於 BJ 投資組合的退出和季節性，我們的信用風險 [或] 分配組合從第四季度開始向下調整。

Our percentage of 660-plus cardholders remains materially above pre-pandemic levels given the strategic decisions we have made to diversify our product mix with co-brand and proprietary card representing a larger portion of our portfolio. As Ralph noted, we took proactive credit management actions to protect our balance sheet in the face of more challenging economic conditions, a fundamental element of our business model to manage our risk tolerance, ensuring that we are properly compensated for the risk we take. We closely monitor our projected returns with the expectation that we generate strong risk-adjusted margins above peer levels. We remain confident in our disciplined credit risk management and our ability to drive sustainable, profitable growth through the full economic cycle.

考慮到我們為使我們的產品組合多樣化而做出的戰略決策，我們的 660 多位持卡人的比例仍然大大高於大流行前的水平，其中聯合品牌和專有卡占我們產品組合的較大部分。正如拉爾夫指出的那樣，面對更具挑戰性的經濟狀況，我們採取了積極的信貸管理措施來保護我們的資產負債表，這是我們管理風險承受能力的商業模式的基本要素，確保我們對所承擔的風險得到適當的補償。我們密切關注我們的預期回報，期望我們產生高於同行水平的強勁風險調整利潤率。我們對我們嚴格的信用風險管理以及我們在整個經濟周期中推動可持續盈利增長的能力充滿信心。

Turning to Slide 11. We remain focused on improving our capital metrics while supporting responsible growth and reducing our debt levels in the near term. These steps further our efforts to create additional value for our shareholders and position Bread Financial for continued success. The company's actions over the past 3 years reflect our commitment to our stated capital priorities and the positive results of these actions are evident in the graphs on this slide. Our TCE to TA ratio ended the quarter at 9.1%, nearly triple the first quarter of 2020 level.

轉到幻燈片 11。我們仍然專注於改善我們的資本指標，同時支持負責任的增長並在短期內降低我們的債務水平。這些步驟進一步推動了我們為股東創造額外價值的努力，並使 Bread Financial 繼續取得成功。公司過去 3 年的行動反映了我們對既定資本優先事項的承諾，這些行動的積極成果在本幻燈片的圖表中顯而易見。我們的 TCE 與 TA 比率在本季度結束時為 9.1%，幾乎是 2020 年第一季度水平的三倍。

Our leverage continues to reduce with parent level debt down 39% over the same period. As Ralph said, we remain committed to continuing these improvement trends. As many of you know, we're currently in the process of restructuring the parent level debt that is set to mature in 2024. The completion of this restructuring will reduce our overall leverage and provide greater flexibility to support our long-term growth plans. Additionally, we have seen substantial improvement in our tangible book value per common share with a compound annual growth rate of 36% since the first quarter of 2020.

我們的槓桿率繼續降低，同期母公司的債務下降了 39%。正如拉爾夫所說，我們仍然致力於繼續這些改進趨勢。正如你們中的許多人所知，我們目前正在重組定於 2024 年到期的母公司級債務。此次重組的完成將降低我們的整體槓桿率，並提供更大的靈活性來支持我們的長期增長計劃。此外，自 2020 年第一季度以來，我們的每股普通股有形賬面價值有了顯著改善，複合年增長率為 36%。

Taken together, if you look back at all the initiatives and actions taken to successfully transform this company over the past 3 years and couple that with a tangible book value per share that has more than doubled over the same time frame, we believe the results show the underlying value creation and potential inherent in Bread Financial and our commitment to unlocking this value for our shareholders over time.

總而言之，如果您回顧過去 3 年為成功改造這家公司而採取的所有舉措和行動，並將其與同期翻了一番以上的每股有形賬面價值相結合，我們相信結果表明Bread Financial 的內在價值創造和潛力，以及我們隨著時間的推移為股東釋放這一價值的承諾。

Finally, Slide 12 provides our financial outlook for the full year of 2023. Our financial outlook remains unchanged from the guidance we provided in January. For the full year, average loans are expected to grow in the mid-single-digit range relative to 2022 based on our current new partner pipeline, marketing investment, consumer spend and payment patterns and credit strategies given our economic outlook. We expect revenue growth to be consistent with average loan growth in 2023, excluding the gain on portfolio sale with a full year net interest margin similar to 2022 full year rate of 19.2%.

最後，幻燈片 12 提供了我們對 2023 年全年的財務展望。我們的財務展望與我們在 1 月份提供的指引保持不變。考慮到我們的經濟前景，根據我們目前的新合作夥伴管道、營銷投資、消費者支出和支付模式以及信貸策略，預計全年平均貸款相對於 2022 年將在中個位數範圍內增長。我們預計收入增長將與 2023 年的平均貸款增長保持一致，不包括全年淨息差與 2022 年全年 19.2% 相似的投資組合銷售收益。

Our new outlook continued -- contemplates one more Fed increase than holding steady for the remainder of the year. Recall, we are slightly NIM accretive with each prime rate increase. We expect to deliver full year positive operating leverage in 2023. Now with the magnitude of the gain on sale, we are opportunistically investing up to $30 million of the $230 million gain on sale in the first half of 2023 as we look to accelerate our technology and digital transformation. This investment brings forward our ability to leverage the innovative technology capabilities from our new platforms and offerings to drive future operating efficiencies, product and servicing enhancements and advanced pricing capabilities sooner than otherwise would have been possible.

我們的新展望繼續——考慮美聯儲在今年剩餘時間裡加息一次，而不是保持穩定。回想一下，每次最優惠利率增加時，我們都會略微增加 NIM。我們預計將在 2023 年實現全年積極的經營槓桿。現在，鑑於銷售收益的規模，我們將在 2023 年上半年的 2.3 億美元銷售收益中投機性地投資高達 3000 萬美元，因為我們希望加速我們的技術和數字化轉型。這項投資提高了我們利用新平台和產品的創新技術能力的能力，以比其他方式更快地推動未來的運營效率、產品和服務增強以及先進的定價能力。

To provide more color for modeling purposes, after you exclude the $230 million gain from reported full year revenue as well as the incremental $30 million investment from reported full year 2023 total expenses, we expect both adjusted revenues and expenses to grow at essentially the same rate for full year 2023. At this time, we expect second quarter total expenses to be approximately flat from the first quarter. We expect second half 2023 total expenses to be lower than the first half of the year, driven by lower intangible amortization expense and improved operating efficiencies related to our technology modernization efforts.

為了為建模目的提供更多顏色，在您排除報告的全年收入中的 2.3 億美元收益以及報告的 2023 年全年總支出中增加的 3000 萬美元投資後，我們預計調整後的收入和支出將以基本相同的速度增長2023 年全年。目前，我們預計第二季度的總支出將與第一季度大致持平。我們預計 2023 年下半年的總費用將低於上半年，這是由於無形攤銷費用減少以及與我們的技術現代化工作相關的運營效率提高所致。

With a previously capitalized software development project reaching the end of its useful life in the second quarter, we are forecasting depreciation and amortization expense to decline in the third quarter to a run rate closer to $25 million per quarter. There is no change to our net loss rate outlook as we anticipate the full year 2023 rate to be approximately 7%, including impacts from the transition of our credit card processing services. As you can imagine, there are a broad range of potential outcomes for the year based on various economic scenarios.

隨著先前資本化的軟件開發項目在第二季度達到使用壽命結束，我們預測折舊和攤銷費用將在第三季度下降至每季度接近 2500 萬美元的運行率。我們的淨虧損率前景沒有變化，因為我們預計 2023 年全年的淨虧損率約為 7%，包括我們信用卡處理服務轉型的影響。可以想像，根據各種經濟情景，今年可能會出現範圍廣泛的結果。

Our outlook assumes inflation remains elevated but moderating and that these pressures will persist throughout 2023. At the same time, our outlook contemplates a gradual increase in the unemployment rate in 2023. We continue to closely monitor macroeconomic indicators. And as we gain clarity on the Federal Reserve's efforts to curb inflation, we will update our expectations accordingly. We expect the second quarter net loss rate to trend upward to around 8%, peaking above 8% in May. We are forecasting that impacts from the previously discussed customer accommodations we made in the fourth quarter of 2022 in connection with the transition of our credit card processing services will inflate the second quarter net loss rate by approximately 100 basis points.

我們的展望假設通脹仍處於高位但有所放緩，並且這些壓力將持續到 2023 年。與此同時，我們的展望預計 2023 年失業率將逐步上升。我們將繼續密切關注宏觀經濟指標。隨著我們對美聯儲遏制通貨膨脹的努力越來越清楚，我們將相應地更新我們的預期。我們預計二季度淨虧損率將呈上升趨勢至 8%左右，並在 5 月份達到 8%以上的峰值。我們預測，我們在 2022 年第四季度就信用卡處理服務的過渡所做的先前討論的客戶住宿的影響將使第二季度的淨損失率增加約 100 個基點。

Given current delinquency trends, the third quarter net loss rate is then expected to be 7% or slightly below with July representing the last month that is anticipated to reflect the impact from the transition of our credit card processing services. Finally, we expect our full year normalized effective tax rate to remain in the range of 25% to 26% with quarter-over-quarter variability due to timing of discrete items. We look forward to building upon the company's strong financial results in the first quarter, and we'll continue to execute on our strategic priorities to build long-term value for our shareholders. Operator, we are now ready to open the lines for questions.

鑑於目前的拖欠趨勢，第三季度淨虧損率預計為 7% 或略低，7 月份是最後一個月，預計將反映我們信用卡處理服務轉型的影響。最後，我們預計我們的全年標準化有效稅率將保持在 25% 至 26% 的範圍內，並且由於離散項目的時間安排而導致季度環比變化。我們期待在公司第一季度強勁的財務業績的基礎上再接再厲，我們將繼續執行我們的戰略重點，為股東創造長期價值。接線員，我們現在準備打開問題熱線。

(Operator Instructions)

（操作員說明）

Our first question today is from Sanjay Sakhrani from KBW.

我們今天的第一個問題來自 KBW 的 Sanjay Sakhrani。

I guess, Ralph, maybe we'll start with your perspectives on the economy. Obviously, a lot happening in the backdrop, some of what you guys mentioned on the call. I know Perry talked about a pullback in discretionary spend. I mean how do you see that sort of following through as we move into the back part of the year?

我想，拉爾夫，也許我們將從你對經濟的看法開始。顯然，背景中發生了很多事情，你們在電話中提到的一些事情。我知道佩里談到了可自由支配支出的回落。我的意思是，當我們進入今年下半年時，您如何看待這種跟進？

Yes, I would say -- it's a great question, Sanjay. I think inflation is still persistent. It's still there. And obviously, some of our card members are feeling the impact some greater than others. The move from a discretionary to nondiscretionary spend 3 years ago, it would have been more concerning to us because as we've diversified our portfolio of products, that nondiscretionary spend is sticking with us with our co-brand products and our direct-to-consumer products. So we're seeing that as we move forward. We talked about the loss rates. I think there -- we're not changing our guidance on loss rates. We see improvement in the back end of the year, and we'll continue to monitor it.

是的，我會說——這是一個很好的問題，Sanjay。我認為通貨膨脹仍然存在。它仍然在那裡。顯然，我們的一些持卡會員感受到的影響比其他人更大。 3 年前從可自由支配支出轉變為非自由支配支出，這對我們來說更令人擔憂，因為隨著我們產品組合的多樣化，非自由支配支出與我們的聯合品牌產品和我們的直接-消費產品。所以我們在前進的過程中看到了這一點。我們討論了損失率。我認為 - 我們不會改變我們對損失率的指導。我們在年底看到了改善，我們將繼續監控它。

Okay. Great. And then maybe a follow-up for Perry. I think it was positive that you guys were able to renew these conduit facilities because I think that was a little bit -- there was some chatter [intra-quarter]. I'm just curious, if we think about tapping into other forms of unsecured -- sorry, just debt period like ABS and such, what the plans are, maybe just the cost differential. I mean -- I assume that's been incorporated into the guide, but was it a significant cost differential on those facilities?

好的。偉大的。然後可能是佩里的後續行動。我認為你們能夠更新這些管道設施是積極的，因為我認為這有點 - [季度內] 有一些喋喋不休。我只是好奇，如果我們考慮利用其他形式的無擔保 - 抱歉，只是債務期，如 ABS 等，計劃是什麼，也許只是成本差異。我的意思是——我假設這已被納入指南，但這些設施的成本差異是否很大？

Yes. Thanks, Sanjay. Yes. So right now, again, I think what you heard is we've got a really well diversified source of funding. And as it relates to ABS, that will again be something we get into the market on. We look at being opportunistic when it's the right time in the market. And to your point, interest rates are going up on all of the instruments, whether it's direct-to-consumer deposits or all the other funding aspects. But right now, I'd say that we're in a good position. There's a lot of interest in what we're doing with the parent debt plan, and we'll continue to update the group as we have more to share over the coming months, but there's a, I'll say, an eager bank group out there to support us. So we're excited about what's ahead.

是的。謝謝，桑傑。是的。所以現在，我想你聽到的是我們有一個非常多元化的資金來源。由於它與 ABS 相關，這將再次成為我們進入市場的依據。我們希望在市場合適的時候投機取巧。就你而言，所有工具的利率都在上升，無論是直接面向消費者的存款還是所有其他融資方面。但現在，我想說我們處於有利位置。我們對母公司債務計劃所做的工作很感興趣，我們將繼續更新該小組，因為我們在未來幾個月內有更多內容要分享，但我要說的是，一個熱切的銀行集團在那裡支持我們。所以我們對未來感到興奮。

Our next question is from Robert Napoli from William Blair.

我們的下一個問題來自 William Blair 的 Robert Napoli。

This is Adib Choudhury on for Bob Napoli. I just wanted to ask on the business development and partner pipeline. Could you just give some broader comments in terms of what you're seeing for the remainder of the year in terms of sales momentum?

這是 Bob Napoli 的 Adib Choudhury。我只是想問一下業務發展和合作夥伴渠道。您能否就今年餘下時間的銷售勢頭髮表一些更廣泛的評論？

Sure. Our pipeline, as in the past, remains strong. And what I do really enjoy about our pipeline is a couple of things. One, it's a reality pipeline. We go after particular partners or new partners, we have a really good chance of securing and a really good sense of securing with good economics. That's a very -- for me, it's a very good position to be in. And also our pipeline is not just with the larger partners. It's up and down the spectrum, so small and medium-sized partners, de novo partners, all of those are in play in 2023, I think [add] another strong pipeline. And I would expect us to be successful as we were in '22 with new partners. And we'll announce new business wins as partners and contractual obligations allow.

當然。與過去一樣，我們的管道仍然很強大。我真正喜歡我們的管道有幾件事。第一，這是一個現實管道。我們追求特定的合作夥伴或新的合作夥伴，我們有很好的機會獲得保障，並且有良好的經濟效益。這是一個非常 - 對我來說，這是一個非常好的位置。而且我們的管道不僅僅是與更大的合作夥伴。這是一個上下的範圍，所以中小型合作夥伴，從頭合作夥伴，所有這些都在 2023 年發揮作用，我認為 [添加] 另一個強大的管道。我希望我們能夠像在 22 年與新合作夥伴一樣取得成功。我們將在合作夥伴和合同義務允許的情況下宣布新的業務勝利。

And just as a quick follow-up, is there anything to call out in terms of changes to underwriting standards or incremental tightening action throughout the quarter just relative to past few quarters?

作為快速跟進，與過去幾個季度相比，整個季度承保標準的變化或增量緊縮行動是否有任何需要指出的？

We're not quite underwriting at pre-pandemic levels. We continue to monitor on a daily basis and adjust accordingly. And we'll continue to do that. We're maintaining a little bit higher standards than we did pre-pandemic, that will continue. We are very focused (inaudible) our focus is long term and not short term. So we'll continue to make adjustments appropriately as the economy trends move.

我們並沒有完全承保大流行前的水平。我們繼續每天進行監控並相應地進行調整。我們將繼續這樣做。我們保持的標準比大流行前高一點，這將繼續下去。我們非常專注（聽不清）我們的重點是長期的而不是短期的。因此，隨著經濟趨勢的變化，我們將繼續進行適當的調整。

Our next question is from Vincent Caintic from Stephens.

我們的下一個問題來自 Stephens 的 Vincent Caintic。

Ralph, could you provide an update on the situation with Loyalty Ventures?

拉爾夫，你能提供一下 Loyalty Ventures 的最新情況嗎？

Sure. Sure, and thanks for the question. Clearly, we're aware, and we continue to monitor the situation with Loyalty Ventures. Since the spinoff was completed, Bread Financial, we've maintained nearly a 20% stake in the stand-alone Loyalty Ventures business. So we are its largest shareholder from inception. And our interest has always been aligned with Loyalty Ventures' interest. We had hoped and expected the business would grow and thrive. As repeatedly cited in its public disclosures and its bankruptcy filings, Loyalty Ventures business was affected by the macroeconomics, geopolitical and other factors that were not foreseeable and quite unfortunate. We strongly believe that our process and decision-making with respect to this spinoff transaction was entirely appropriate and that any allegations made in some of the Loyalty Ventures' bankruptcy filings regarding the spin transactions are completely meritless. And we're prepared and will respond appropriately, including aggressively defending against any claims should they arise.

當然。當然，謝謝你的提問。顯然，我們知道，並將繼續與 Loyalty Ventures 一起監控情況。自從 Bread Financial 分拆完成後，我們一直持有獨立 Loyalty Ventures 業務近 20% 的股份。所以我們從一開始就是它的最大股東。我們的利益始終與 Loyalty Ventures 的利益保持一致。我們曾希望並期望業務會發展壯大。正如其公開披露和破產申請中反复提到的那樣，Loyalty Ventures 業務受到宏觀經濟、地緣政治和其他不可預見且非常不幸的因素的影響。我們堅信，我們關於此次分拆交易的流程和決策是完全恰當的，並且 Loyalty Ventures 的一些破產申請中關於分拆交易的任何指控都是完全沒有根據的。我們已做好準備並將做出適當回應，包括在出現任何索賠時積極辯護。

Okay. Great. That's very helpful. And for Perry, taking into account the recent bank industry volatility. But looking at Comenity, your bank has a very high excess capital ratio. Can you talk about your flexibility to dividend excess capital from the bank to the parent? And any thoughts on what you can do with that capital and if there are any restrictions on what you can do.

好的。偉大的。這很有幫助。對於佩里，考慮到最近銀行業的波動。但是看看 Comenity，你們銀行的超額資本比率非常高。你能談談你將銀行的過剩資本分紅給母公司的靈活性嗎？以及關於你可以用這筆資金做什麼的任何想法，以及你可以做什麼是否有任何限制。

Yes, I think that's a really good observation. And you can see that in one of the slides that we -- at the bank level, our capital has exceeded 20% capital ratio. And that will be a source of being able to dividend up a portion of that to, as I mentioned, as we look to restructure the parent debt, a big element of it is also paying down a portion.

是的，我認為這是一個很好的觀察。你可以在其中一張幻燈片中看到——在銀行層面，我們的資本比率已超過 20%。正如我提到的那樣，這將成為能夠分紅一部分的來源，當我們尋求重組母公司債務時，其中很大一部分也在償還一部分。

So we will be able to dividend up a big, I'll say, slug of that to the parent that's in excess of ratios that we are trying to hold at the banks (inaudible) we can look back historically what the [low] points were and think that that's available to them dividend up to the parent to further support our debt plans. And I'd say we have shared our plans with the regulators, and we are in constant communication to make sure that we have support.

因此，我們將能夠向母公司分紅一大筆，我會說，這超過了我們試圖在銀行持有的比率（聽不清），我們可以回顧歷史上的[低]點我們認為，他們可以向母公司派發股息，以進一步支持我們的債務計劃。我想說我們已經與監管機構分享了我們的計劃，並且我們一直在保持溝通以確保我們得到支持。

Our next question is from Moshe Orenbuch from Credit Suisse.

我們的下一個問題來自瑞士信貸的 Moshe Orenbuch。

Great. You guys had mentioned that the delinquency performance in the second -- in the first quarter kind of gave you confidence into the outlook for lower losses in the second half of the year. Can you just talk a little about what we're likely to see and what things you would have us be looking for to get increased confidence in that outlook and to kind of be able to carry that into 2024?

偉大的。你們提到過第二季度的拖欠表現——第一季度讓你們對下半年虧損減少的前景充滿信心。您能否談談我們可能會看到什麼以及您希望我們尋找什麼來增強對該前景的信心並能夠將其帶入 2024 年？

Thanks for the question. So part of the challenge with our numbers, as you know, there's noise in it from the transition-related items. And as I mentioned, there will be 40 basis points of that impact inherent in the first quarter, and there was going to be about 100 basis points still impacting the second quarter. So even as you look at our delinquency numbers, right now, they're a little elevated for what you can see, I'd say in the later-stage delinquencies because that's what's going to impact the losses in the second quarter and part of July. So you're going to -- like I think if you look at March's loss rate, you could see what an -- I'd say, largely unimpacted month looks like. And so that's part of what gives the confidence that when we get through this transition related stuff. But again, I continue to look at the delinquency numbers. We're going to continue to guide along the way, every time we have an opportunity for what we're seeing.

謝謝你的問題。因此，正如您所知，我們的數字面臨的部分挑戰是與過渡相關的項目帶來的噪音。正如我所提到的，第一季度的固有影響將有 40 個基點，第二季度仍有約 100 個基點的影響。因此，即使您查看我們的拖欠數字，現在，就您所看到的而言，它們還是有點高，我會在後期拖欠中說，因為這將影響第二季度和部分季度的損失七月。所以你會——就像我想的那樣，如果你看看 3 月份的損失率，你就會看到——我想說的是，基本上沒有受到影響的月份是什麼樣的。因此，當我們完成與過渡相關的事情時，這就是讓我們充滿信心的部分原因。但同樣，我繼續查看拖欠數字。每當我們有機會看到我們所看到的東西時，我們將繼續沿途提供指導。

And -- but what we can see, which obviously you can't see, the early-stage buckets are looking really good, and the roll rates have improved, and that's what gives us really good line of sight into third quarter. Again, we don't have a lot of great line of sight to fourth quarter because the fourth quarter losses haven't really entered the delinquency stage yet.

而且 - 但我們可以看到，顯然你看不到，早期的水桶看起來非常好，滾動率有所提高，這讓我們對第三季度有了很好的視線。同樣，我們對第四季度沒有太多的看法，因為第四季度的虧損還沒有真正進入拖欠階段。

Got it. And maybe I know that there hasn't been any kind of public movement on the whole late fee issue, but maybe you could talk a little bit about some of the things that Bread has been doing to kind of think about ways of offsetting any impacts or any other things that are going on internally.

知道了。也許我知道在整個滯納金問題上還沒有任何形式的公眾運動，但也許你可以談談 Bread 一直在做的一些事情，以考慮抵消任何影響的方法或內部發生的任何其他事情。

Moshe, let me -- I'll address that. I think along with the financial services industry, we continue to assess the rule-making proposal and the potential impacts where the rules are not final yet, and they are currently in a common period, I think that ends May 3, which could result in some revisions. But those (inaudible) changes, they may be challenged in court.

Moshe，讓我——我會解決這個問題。我認為與金融服務行業一起，我們將繼續評估規則制定提案以及規則尚未最終確定的潛在影響，它們目前處於共同時期，我認為 5 月 3 日結束，這可能會導致一些修訂。但是那些（聽不見的）變化，他們可能會在法庭上受到質疑。

It could be a lengthy process before any new rules become effective. But us with, like the rest of the industry, are looking at strategies to mitigate any impact. So they're across the board, higher APR changes, different pricing and tier strategies, fees for credit, some restructuring of brand partner contracts and lastly, tightening our credit standard. We don't expect any of that to be effective in 2023. And so our financials are not impacted by that at this time. When it gets closer to -- when the rules become final, we'll be happy to share our approach to the impact and how we intend to close that impact.

在任何新規則生效之前，這可能是一個漫長的過程。但我們與其他行業一樣，正在研究減輕任何影響的策略。所以他們是全面的，更高的 APR 變化，不同的定價和等級策略，信貸費用，品牌合作夥伴合同的一些重組，最後收緊我們的信貸標準。我們預計這些都不會在 2023 年生效。因此我們的財務狀況目前不受此影響。當它接近 - 當規則成為最終規則時，我們將很樂意分享我們應對影響的方法以及我們打算如何消除這種影響。

Our next question is from Mihir Bhatia from Bank of America.

我們的下一個問題來自美國銀行的 Mihir Bhatia。

I did want to ask about just our purchase volume trends [in the] quarter and if you can give an April update. Are you seeing any changes in customer behaviors, what they're buying, how frequently they are buying, ticket sizes, anything call out -- anything you're paying attention to that?

我確實想問一下我們 [in] 季度的採購量趨勢，以及您是否可以提供 4 月份的更新。您是否看到客戶行為發生任何變化，他們購買什麼，他們購買的頻率，門票大小，任何需要注意的事情 - 任何您關注的事情？

Yes. A couple of things there. So we talked a little bit about it. We're seeing a slight move from discretionary to nondiscretionary, so we're seeing that move. And we were -- this week, we were with a couple of our retail partners. And they said, while they see some a little bit less traffic in their stores, the people that come in are there to buy. So people are purposely going to the retail partner establishments to buy and not to browse. And that's kind of the change we're seeing in their -- in buying habits. And I think that holds true for online as well.

是的。那裡有幾件事。所以我們談了一點。我們看到從自由裁量權到非自由裁量權的輕微轉變，所以我們看到了這種轉變。我們是 - 本週，我們與我們的幾個零售合作夥伴在一起。他們說，雖然他們看到店裡的客流量有所減少，但進店的人是來買東西的。因此，人們有意去零售合作夥伴機構購買而不是瀏覽。這就是我們在他們的購買習慣中看到的那種變化。我認為這也適用於在線。

Got it. And then I just wanted to go back to the loss rate discussion. I understand you're seeing some favorable trends in your early stage delinquencies and roll rates, I think that's what's giving you confidence in that back half. Is it your view that as you exit the year, you'll be closer to that normalized 6% rate? Or are we still looking at an elevated loss rates here in the near term given the macro pressures and like to get back to that midpoint, or the sub-6% is going to take a little bit of (inaudible)?

知道了。然後我只想回到損失率的討論。我知道您在早期拖欠和滾動率方面看到了一些有利的趨勢，我認為這就是讓您對後半部分充滿信心的原因。你是否認為當你今年結束時，你會更接近正常化的 6% 的利率？或者，鑑於宏觀壓力，我們是否仍在關注短期內較高的損失率，並希望回到該中點，或者低於 6% 的損失率會有所下降（聽不清）？

Yes. I think you said it well. When you look to the back half of the year, again, thinking that should be in that 7, hopefully, a little bit below [things break away]. Again, we're actively managing credit strategies to get that rate down as well. What leads you into next year is, as you said, the macro environment, and how long does the elevated inflation persist, where does unemployment go? It's -- 2024 will be its own set of circumstances and environment, and we'll give guidance for that as we get towards the end of the year.

是的。我覺得你說的很好。當你再次回顧今年下半年時，認為應該在 7 歲以下，希望能稍微低於 [things break away]。同樣，我們正在積極管理信貸策略以降低該利率。正如你所說，導致你進入明年的是宏觀環境，以及高通脹持續多久，失業率將何去何從？ 2024 年將是它自己的一套情況和環境，我們將在年底前為此提供指導。

But what we do expect is compared to the first half of this year for what we're seeing, where you have those system related -- the conversion-related accommodations in there for the customers, that will not be there. So I expect things to stabilize. We are committed to getting to less than 6% through the cycle. It's just a matter of when will be based on the depth and length of the cycle.

但我們所期望的是與今年上半年相比，我們所看到的與那些系統相關的地方——那里為客戶提供的與轉換相關的住宿，將不會存在。所以我希望事情會穩定下來。我們致力於在整個週期內達到 6% 以下。這只是何時取決於週期的深度和長度的問題。

Our next question is from Jeff Adelson from Morgan Stanley.

我們的下一個問題來自摩根士丹利的傑夫阿德爾森。

Perry, just wanted to go back to the comment you made on March being a largely unimpacted month or what a largely unimpacted month would look like. Just trying to square that with the fact that you're still going to see a 100 bps impact in the next quarter, approaching 8%. Was there anything in the number this month for charge-offs that was benefiting you? I know BJ's is out of there now, but I thought BJ's would have kept the NCO rate more elevated and just with all the other commentary, I know you're expecting some more favorable trends from here. But are we still thinking more like a 7% loss rate as we exit the year? I mean I just want to confirm that because I know you do get that seasonality at the end of the year as well.

佩里，只想回到你在 3 月發表的評論，即基本上未受影響的月份，或者基本上未受影響的月份會是什麼樣子。只是試圖將其與下個季度仍將看到 100 個基點的影響這一事實相平衡，接近 8%。本月的沖銷數字中有什麼讓您受益的嗎？我知道 BJ's 現在已經不在了，但我認為 BJ's 會讓 NCO 利率保持更高水平，而且根據所有其他評論，我知道你期待這裡出現一些更有利的趨勢。但是我們是否仍然認為今年結束時的損失率更像是 7%？我的意思是我只想確認這一點，因為我知道你在年底也會有這種季節性。

I think the way you're thinking about the year sounds correct, right? And so when -- when I talked about the March being largely unimpacted or far less impacted from the conversion, we had July, which had a very discrete action. And you saw that in July's losses last year being suppressed by over 100 basis points. And then you saw February, that spiked up. Then what happened is there were further accommodations made in the fourth quarter, and those accommodations as it related to whether consumers being able to access their accounts or communications or whatever it be, it caused us to do some things to customer-friendly actions. That is what's impacting April, May, June and July. So those 4 months are impacted by things that we did in the back part of last year. And there wasn't anything discrete that really impacted March. So that's why I said it's the less -- the least impactful month that we've had other than January.

我認為你對年份的看法聽起來是正確的，對吧？因此，當我談到 3 月基本上沒有受到轉換的影響或受到的影響要小得多時，我們有 7 月，這是一個非常離散的行動。你看到去年 7 月的損失被壓制了 100 多個基點。然後你看到了二月，它飆升了。然後發生的事情是在第四季度進行了進一步的調整，這些調整與消費者是否能夠訪問他們的賬戶或通信或其他任何東西有關，這導致我們採取了一些對客戶友好的行動。這就是影響四月、五月、六月和七月的原因。所以這 4 個月受到我們去年下半年所做的事情的影響。並沒有真正影響三月份的任何離散事件。所以這就是為什麼我說它是除 1 月以外影響最小的月份。

Got it. That's super helpful. And then just going back to the comment around slowdown in credit sales this quarter. I just want to make sure that, that's a core number stripping out BJ's and anything else. And I guess, is that -- we're seeing some other issuers talk about a slowdown in March and April. Is that more of a lapping effect with coming out of Omicron? Or are you seeing some continued caution on the part of the consumer? And then I guess, as we think about the different cohorts that you (inaudible) spend with you, are you noticing any sort of shifts by income or by credit cycle?

知道了。這非常有幫助。然後回到有關本季度信貸銷售放緩的評論。我只是想確保，這是一個核心數字，去掉了 BJ 和其他任何東西。我想，是——我們看到其他一些發行人在談論 3 月和 4 月的經濟放緩。 Omicron 的出現是否更像是一種研磨效果？或者您是否看到消費者繼續保持謹慎態度？然後我想，當我們考慮您（聽不清）與您一起度過的不同人群時，您是否注意到收入或信貸週期的任何變化？

Yes. Good question. And you're right, there's a lot going on in the economy. And I think Ralph gave a good answer earlier on what we're seeing from brand partners. But more broadly, it kind of ties back the question around the economy, and what's going on, right? So obviously, GDP is forecasted to continue to slow down throughout the year.

是的。好問題。你是對的，經濟中發生了很多事情。我認為拉爾夫早些時候就我們從品牌合作夥伴那裡看到的內容給出了一個很好的答案。但更廣泛地說，它有點與圍繞經濟的問題以及正在發生的事情有關，對吧？很明顯，預計全年 GDP 將繼續放緩。

Inflation is remaining elevated. Again, there's hopes that, that's going to moderate as we move through the year and into 2024. Wage growth has been strong, which has helped the consumer, but it's just not keeping up with inflation. So for that portion of the population, that's creating some stress. And again, I think wages are going to come under pressure as companies start pulling back. So even though for now unemployment remains strong, we're all reading the headlines that there could be more layoffs and higher interest rates or putting pressure on companies, but they're also driving higher loan payments for consumers for their auto loans or home loans or credit card.

通貨膨脹率仍然很高。我們再次希望，隨著我們度過這一年並進入 2024 年，這種情況會有所緩和。工資增長一直很強勁，這對消費者有所幫助，但只是跟不上通貨膨脹。因此，對於那部分人口來說，這會產生一些壓力。而且，我認為隨著公司開始撤退，工資將面臨壓力。因此，儘管目前失業率仍然很高，但我們都在閱讀頭條新聞，稱可能會有更多裁員和更高的利率或對公司施加壓力，但它們也在推動消費者支付更高的汽車貸款或住房貸款或信用卡。

So you think about -- I've talked about this before that [K-economy] and excess savings for -- related to the stimulus, you talked about lapping that period, that's been depleted largely by middle and lower-income Americans even while the, I'll say, more affluent households seem to be doing fine. So there is a growing cohort in the population. That's doing their best to keep up with inflation but are struggling a little. And so you think about the basics of shelter [cost, food] and utilities. Those are still -- those are up a lot from inflation. So I think that's what's putting pressure on. And so we look at consumers, we are definitely seeing a little bit of the decline that happened in the first quarter because you see the decline in consumer sentiment, and there's the decline in foot traffic.

所以你想想——我之前已經談過這個 [K-economy] 和超額儲蓄 - 與刺激相關，你談到過那個時期，這在很大程度上被中低收入的美國人耗盡了，即使在我會說，更富裕的家庭似乎過得很好。因此，人口中的隊列越來越多。他們正在盡最大努力跟上通貨膨脹的步伐，但正在苦苦掙扎。因此，您會考慮住所 [成本、食物] 和公用事業的基礎知識。那些仍然 - 那些因通貨膨脹而上漲了很多。所以我認為這就是施加壓力的原因。所以我們看看消費者，我們肯定會看到第一季度發生的一點點下降，因為你看到消費者信心下降，客流量下降。

So those loan trends across the broad consumer growth are happening across the broader consumer group but are definitely a little more exaggerated for the lower risk scores. Yes. So I think that's -- but consumers are doing the best they can to manage a budget. They're rotating, as you mentioned, back to from discretionary to more nondiscretionary and that's where we feel good about the way we've diversified our portfolio.

因此，廣泛消費者增長中的貸款趨勢正在更廣泛的消費者群體中發生，但對於較低的風險評分來說肯定會更加誇張。是的。所以我認為那是 - 但消費者正在盡其所能來管理預算。正如你提到的，他們正在輪換，從自由裁量權轉向更多非自由裁量權，這就是我們對我們多元化投資組合的方式感到滿意的地方。

Our next question is from Bill Carcache from Wolfe Research.

我們的下一個問題來自 Wolfe Research 的 Bill Carcache。

Following up on your CFPB late fee comments, Ralph, can you share any early feedback you're getting from discussions with your merchant partners. Just curious whether you're expecting any pushback from merchants, particularly those that think their sales may be negatively impacted?

跟進你的 CFPB 滯納金評論，拉爾夫，你能否分享你從與你的商業合作夥伴的討論中獲得的任何早期反饋。只是好奇您是否期待商家的任何阻力，特別是那些認為他們的銷售可能受到負面影響的商家？

Yes. We have really strong relationships with our partners, and we're aligned to mitigate any potential changes or impacts that will help both parties as appropriate. I think one of the things -- we talk about pushback, extending Signet is a true sign that it's a good partnership, and we're going to work through any of those issues that might be out there. So as I said, these are partnerships. They're not vendor relationships, and we'll work through any mitigations we have to. And that's been the attitude of our partners as well.

是的。我們與合作夥伴有著非常牢固的關係，我們一致同意減輕任何潛在的變化或影響，以適當地幫助雙方。我認為其中一件事——我們談論阻力，延長 Signet 是一個良好合作夥伴關係的真正標誌，我們將解決可能存在的任何問題。正如我所說，這些是夥伴關係。它們不是供應商關係，我們將努力解決我們必須採取的任何緩解措施。這也是我們合作夥伴的態度。

Understood. Ralph, that's helpful. And then Perry, if I can squeeze one in for you on betas. By our math, your cycle to date deposit beta is 44%, which is better relative to your consumer finance peers, which seem to be paying up a little bit more for deposits. Can you give us a sense of the terminal beta that you're anticipating? Or maybe at least frame how high you expect your cost of interest-bearing deposits to rise from here if your outlook for one more hike is correct?

明白了。拉爾夫，這很有幫助。然後是佩里，如果我可以在測試版上為你擠一個。根據我們的計算，您迄今為止的周期存款貝塔值為 44%，相對於您的消費金融同行而言，這更好，後者似乎為存款付出了更多。你能告訴我們你期待的終端測試版嗎？或者，如果您對再次加息的前景是正確的，那麼至少可以勾畫出您預計生息存款成本將從現在上升到多高？

Yes. I think the way I'd categorize it is we will continue to remain competitive on price. As you know, we have -- it's a low-cost avenue for us to generate deposits. We don't have brick-and-mortar. We don't have all the servicing of operating accounts for us. We like it. And again, it goes back to the fact that we are variable-price credit card asset. So we are fine continuing to pass along a lot of those increases along the way.

是的。我認為我將其分類的方式是我們將繼續保持價格競爭力。如您所知，我們有 - 這是我們產生存款的低成本途徑。我們沒有實體店。我們沒有為我們提供所有運營賬戶服務。我們喜歡它。再一次，它回到了我們是可變價格信用卡資產這一事實。因此，我們可以繼續沿途傳遞大量這些增長。

Our next question is from Reggie Smith from JPMorgan.

我們的下一個問題來自摩根大通的雷吉史密斯。

I'd like to, I guess, kind of take your temperature on share repurchases. Now obviously, I recognize there's a lot of uncertainty in the market with the economy, I guess, Loyalty Ventures as well, and you're working through a refinancing package. But today, how are you thinking about share repurchases? And is there a price in your mind (inaudible) you give me that price? Is there a price where buying back the stock becomes so compelling that you have to do it?

我想，我想，有點像你對股票回購的看法。現在很明顯，我認識到經濟市場存在很多不確定性，我想，Loyalty Ventures 也是如此，你正在通過再融資方案進行工作。但是今天，您如何考慮股票回購？你心裡有沒有一個價格（聽不清）你給我那個價格？回購股票的價格是否變得如此有吸引力以至於你不得不這樣做？

Yes. I appreciate you taking our temperature, Reggie. I think a couple of things. I think we've tripled our TCE to TA ratio in 3 years, I think that was -- it's the beginning. It's partly -- now we've hit the minimum. And right now, given where we are, our focus is to do -- continuing doing what we've been doing, like we continue to invest in profitable growth, continue to pay down that debt, taking a 40% chunk out of that debt in 3 years, we're pretty proud of that, but there's more to do. So we'll continue to pay down that debt. And we want to build our capital, right?

是的。感謝你幫我們量體溫，Reggie。我想幾件事。我認為我們在 3 年內將 TCE 與 TA 的比率增加了兩倍，我認為這是 - 這是開始。部分是 - 現在我們已經達到最低限度。現在，鑑於我們所處的位置，我們的重點是繼續做我們一直在做的事情，就像我們繼續投資於盈利增長一樣，繼續償還債務，從債務中減去 40% 3 年後，我們為此感到非常自豪，但還有更多工作要做。因此，我們將繼續償還這筆債務。我們想建立我們的資本，對嗎？

So we want to build our capital so we can continue to add partners and have profitable growth. And then excess capital, we, of course, want to return that to our shareholders at some point in time. But I think strengthening the balance sheet is our focus, investing in the business and building our capital is our focus right now (inaudible) my 3 priorities are.

所以我們想建立我們的資本，這樣我們就可以繼續增加合作夥伴並實現盈利增長。然後是多餘的資本，我們當然希望在某個時間點將其返還給我們的股東。但我認為加強資產負債表是我們的重點，投資業務和建立我們的資本是我們現在的重點（聽不清）我的三個優先事項是。

Understood. And I have one follow-up. I guess on Bread Pay, you guys put out a presentation during the quarter. And maybe my math is off, but it suggested that credit sales for Bread Pay were probably below $500 million. I know you guys have given a $10 billion sales figure a while ago and kind of pulled back from that. But is my math right? And if so, kind of what's happened there? What's your thinking on Bread Pay? Why is that kind of not materialized as the market has kind of grown?

明白了。我有一個後續行動。我想在 Bread Pay 上，你們在本季度做了一個演示。也許我的計算不對，但它表明 Bread Pay 的信貸銷售額可能低於 5 億美元。我知道你們不久前給出了 100 億美元的銷售額數字，但有點退縮了。但是我的數學正確嗎？如果是這樣，那裡發生了什麼？您對 Bread Pay 有何看法？為什麼隨著市場的增長這種情況沒有實現？

Yes. I mean I think the way we think about Bread Pay, particularly as the markets move, it is a product, not the product for us. It is a product that we continue to invest in. Most importantly, that is a compliant regulatory product that's very important to us. It's an option. If people want [pay-in-four or] installment loan. It's an option for people, but it's not the only product we have. We've diversified our portfolio. We've diversified our partners. So it's part of the basket of how people will borrow and buy from us, and we feel good about that.

是的。我的意思是我認為我們對 Bread Pay 的看法，特別是隨著市場的變化，它是一種產品，而不是我們的產品。這是我們繼續投資的產品。最重要的是，這是一種對我們非常重要的合規監管產品。這是一個選擇。如果人們想要 [分四付款或] 分期貸款。這是人們的一種選擇，但它不是我們擁有的唯一產品。我們已經使我們的投資組合多樣化。我們使我們的合作夥伴多元化。因此，這是人們向我們藉錢和購買的方式的一部分，我們對此感覺很好。

Just follow up on that. Is there any risk of impairment there? Or is it still performing at a level where there's nothing to kind of consider there?

只是跟進。是否存在減值風險？還是它的性能仍然處於無需考慮的水平？

Well, I'll answer that, and I'll let Perry back me up. There is -- it's performing at a level, then there's not a risk of impairment.

好吧，我會回答這個問題，我會讓佩里支持我。有——它的表現在一定水平上，那麼就沒有受損的風險。

Correct.

正確的。

(Operator Instructions)

（操作員說明）

Our next question is from Dominick Gabriele from Oppenheimer.

我們的下一個問題來自 Oppenheimer 的 Dominick Gabriele。

A lot of great detail here. I was just thinking about the NIM in particular. I guess it was just down a little bit year-over-year. But I know we're talking about roughly flat NIM. And so I was wondering if there's just a little bit of further deposit expense pressure on the deposit rates from here, how do we get to that roughly flat number? Is it just the yield? Or is it more pay down of debt because that was a huge benefit to pay down of debt. And I just have a follow-up.

這裡有很多很棒的細節。我只是在特別考慮 NIM。我想它只是同比下降了一點點。但我知道我們談論的是大致持平的 NIM。所以我想知道從這裡開始存款利率是否還有一點點存款費用壓力，我們如何才能達到這個大致持平的數字？只是產量嗎？或者是更多的債務償還，因為償還債務是一個巨大的好處。我只是有一個跟進。

Yes, I think you're going to see a couple of things, right? So -- and I think the largest impact -- let me say, you've got NIM that's remaining pretty steady because we try to manage our NIM to be rate neutral. So then you've got the dynamic of the shifting in the portfolio of seasonal movements in them. But one of the larger components that's actually, I'll say, moving that NIM around is the higher elevated levels of losses -- credit losses and it's called purification. So when you have a reversal of interest and fees and when you go from a period that was low losses (inaudible) they have elevated losses. During that period, you have a much higher percent impact or basis point impact on your NIM from those reversal of interest and fees. So if you think about the first half of the year, where we've talked about because of the conversion-related items, those quarters are being more impacted from the elevated losses. And then as you go into the back half of the year, you'll also have an improvement in NIM, as you no longer have as much of those reversals.

是的，我想你會看到一些東西，對吧？所以——我認為最大的影響——讓我說，你有 NIM 保持相當穩定，因為我們試圖管理我們的 NIM 以保持利率中性。那麼你就得到了它們中季節性運動組合變化的動態。但實際上，我要說的是，移動 NIM 的更大組成部分之一是更高水平的損失——信用損失，這被稱為淨化。因此，當你的利息和費用發生逆轉時，當你從一個低損失（聽不見）的時期開始時，他們的損失就會增加。在此期間，這些利息和費用的逆轉對您的 NIM 產生了更高的百分比影響或基點影響。因此，如果你考慮一下今年上半年，由於與轉換相關的項目，我們已經討論過這些季度，這些季度受到損失增加的影響更大。然後當你進入下半年時，你的 NIM 也會有所改善，因為你不再有那麼多的逆轉。

Perfect. That makes perfect sense. If we think about the year-over-year credit sales growth and the sale of the portfolio and how that traditionally has linked to your interchange revenue, net of retailer share agreements, is it right to say that the interchange revenue, net of retailer share agreements should be down year-over-year because of the loss of that or sale of that portfolio?

完美的。這是完全有道理的。如果我們考慮同比信貸銷售增長和投資組合的銷售，以及傳統上它如何與您的交換收入（扣除零售商份額協議）相關聯，那麼說交換收入（扣除零售商份額）是否正確由於損失或出售該投資組合，協議應同比下降？

So what I'd say is that as you kind of mentioned, right, the retailer share agreements include our net interchange fees and the unique brand contracts that are in there. So the best way to correlate our RSA, it's related to sales. And I think that's -- it's just constantly (inaudible) like every new partner that comes on has a little different construct. But I think overall, I would just say it will move in line with sales.

所以我要說的是，正如你提到的那樣，零售商共享協議包括我們的淨交換費和其中的獨特品牌合同。因此，關聯我們的 RSA 的最佳方式是與銷售相關。而且我認為那是 - 它只是不斷地（聽不清）就像每個出現的新合作夥伴都有一些不同的結構。但我認為總的來說，我只想說它將與銷售保持一致。

(Operator Instructions)

（操作員說明）

We have no further questions. So I'd like to hand back to Ralph Andretta for closing remarks.

我們沒有其他問題了。所以我想請 Ralph Andretta 做結束語。

Sure. Well, I just want to thank you all for joining the call this morning. I appreciate your interest and continued interest in Bread Financial, and I wish you all a good day.

當然。好吧，我只想感謝大家今天早上加入電話會議。感謝您對 Bread Financial 的關注和持續關注，祝大家有美好的一天。

Thank you, everyone, for joining today's call. You may now disconnect your lines, and have a lovely day.

謝謝大家參加今天的電話會議。你現在可以斷開你的線路，並有一個美好的一天。