Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| But we've done a really nice job of slowly and steadily growing the unaided brand awareness over time |
| So overall, really good product road map in great dialogue with customers across all of those segments, and we couldn't be more excited about the pipeline |
| We recently launched Smart Data which is a service that leverages MasterCard's very robust global data set and provides unique insights to our end customers |
| Then from a product perspective, we've had really good success of rolling out new products and services |
| Within the segment vertical or the way we think about it, historically, we've gone after smaller fintechs and neo banks and had really good market share there |
| But what I would say is we've had great success over the course of the last several quarters, as we've mentioned, signing up a number of new customers |
| What I would say is we've had really good growth in terms of end customers and customer accounts on the platform |
| We're also going to see continued growth and acceleration in the overall spend and interchange revenue |
| So we feel great about it, and that trend will persist |
| And in 2024 Q1, we're seeing another acceleration, and we could expect to see double-digit percentage sequential growth in the overall debit spend on the platform |
| We were on the fourth generation of our underwriting model right now and have done a really good job of getting to a place where we have great visibility into early-stage delinquencies and losses such that we can cut these credits out similar to what we've done over the course of the last 12 to 18 months |
| And the IPO market is starting to become more favorable, and we're really pleased with the pipeline that we have there with potential customers |
| What gives us confidence in that level is that we have really good visibility, obviously, into our net charge-off levels and rates |
| And that will continue to show really good momentum in 2024 and throughout '25 and '26, especially as we are taking a bit more of a conservative approach on our unsecured personal loans |
| But net-net, we expect to be able to maintain really healthy margins, north of 5% |
| So looking forward, we do expect to be able to maintain very healthy NIM margins, north of 5% |
| So really good success in expanding those NIM margins, and that's a function of a few things |
| So in terms of our overall NIM margins, they were 6% at the end of the year, and we've been really great about being able to expand our margins over the course of the last few years |
| What I would say in terms of the overall growth in the deposit franchise, we've had really good success since opening the bank of growing that at a pretty healthy clip |
| Given where we're sitting today and our posture on flat to down PL originations, modest growth in SLR and growth correlated with rates on the home loans business, coupled with the fact that we do have really robust demand from credit borrowers more than we've seen over the course of the last few years |
| So in terms of overall margins, we've done a really nice job of dropping more to the bottom line over the course of the last several quarters |
| We're seeing really good operating leverage across the other lines as well |
| And then the third thing is we've been able to maintain really healthy levels of cross-buy |
| Second is the average revenue per member has exceeded our expectations |
| And then third is we are seeing really good leverage across each and every one of our functional expense lines |
| The second thing that's driving margin improvement is we're just getting better at targeting our potential members |
| Fast forward to where we are today, we're now hitting upper single digits on a consistent basis, which is quite phenomenal given it's only been a few years |
| We ended up rolling out that feature within days of the Silicon Valley banking situation which created a lot of loyalty and trust with our existing member base and help continue to drive deposits for us every single quarter since |
| We saw really good momentum over the course of the last several quarters, whereby in Q3 of 2023, we had about $1.2 billion of spend in Q4, that accelerated to $1.5 billion of spend or $6 billion of annualized spend |
| Very healthy trends there and their NIM was up last year |
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| In our lending business, we are taking more of a conservative approach given the macro uncertainty with respect to rates as well as liquidity concerns across the broader industry |
| Research and development as a percentage of revenue was down 100 basis points year-over-year |
| What I would say is for 2024, what you could assume is that we still have a pretty large balance of net operating losses that have been built up over the course of the last several years |
| And that represents about 3% of the overall unpaid principal balance of loans on the balance sheet, and that's expected to get down to under 1% by the end of this year |
| But we couldn't be more pleased with the progress that we've made with having the bank |
| Now, we're not where we want to be yet and the likes of JPMorgan and Bank of America and larger financial institutions are 30% to 40% unaided brand awareness |
| In addition to that, we've made other credit cuts in Q4, as Anthony alluded to on the call for a number of reasons, given our view on the macro |
| And often times will come in, and we have to obviously prove out our value |
| But right now, a lot would have to change and a lot more certainty with respect to the macro would have to change for us to get comfortable |
| I couldn't imagine going through the cycle that we've gone through over the course of the last 18 months with the rate volatility that has happened and the overall credit market without having this low-cost source of funding |
| In terms of that growth, you mentioned that you're limiting growth just the macro |
| What we've said is that we expect losses to return to pre-pandemic levels |
| But again, we're taking a more conservative view to underwriting, and there's more headroom beyond that 14%, if we wanted |
| But more importantly, we've identified pockets of credit that weren't performing as well |
| Jill Shea And then maybe just touching on a piece that you just mentioned, you reduced your credit box |
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