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    Bill Carcache • Wolfe Research

    Bill Carcache's questions to Bread Financial Holdings Inc (BFH) leadership

    Bill Carcache's questions to Bread Financial Holdings Inc (BFH) leadership • Q2 2025

    Question

    Bill Carcache from Wolfe Research asked about the Caesars renewal process, including competitive dynamics and the impact of pricing actions on terms. He also inquired about trends in the penetration of retail partner sales.

    Answer

    CEO Ralph Andretta described the market as consistently competitive and said the company is proactive in renewing with partners early to avoid RFPs. While there is always some market compression on terms, he stressed they remain disciplined on hurdle rates. He added that data and analytics are key to driving higher penetration across their diverse product suite and partner verticals.

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    Bill Carcache's questions to Bread Financial Holdings Inc (BFH) leadership • Q1 2025

    Question

    Bill Carcache followed up on the 7% unemployment weighting in the allowance, asking about the potential to lower the reserve rate if unemployment rises. He also inquired about new origination spreads and the risk of a future administration re-attempting a late fee cap.

    Answer

    EVP and CFO Perry Beberman explained that the conservative weighting of severe scenarios in the reserve model provides flexibility; if the baseline unemployment forecast worsens, they can dial back the weighting on those severe scenarios, likely resulting in a stable reserve rate. CEO Ralph Andretta addressed the regulatory risk, stating that the court's opinion vacating the CFPB rule was written in a logical and consistent way that would make it difficult for any future administration to reinstitute a similar cap.

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    Bill Carcache's questions to Bread Financial Holdings Inc (BFH) leadership • Q4 2024

    Question

    Bill Carcache asked if the business's return profile is changing structurally with the mix shift towards higher-credit quality co-brand customers and if this aligns with Investor Day guidance. He also inquired about share buyback capacity given the flat loan growth outlook and how the renewal process might change due to mitigation actions.

    Answer

    EVP & CFO Perry Beberman asserted that the current strategy aligns 100% with Investor Day targets and that the company is committed to its guided returns. Regarding buybacks, he prioritized funding growth and achieving capital ratio targets (CET1 around 14%) before considering significant capital returns. President & CEO Ralph Andretta added that the renewal process is strong, with 85% of the portfolio secured through 2026, and focuses on 'growing the pie' with partners rather than just price compression.

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    Bill Carcache's questions to Bread Financial Holdings Inc (BFH) leadership • Q3 2024

    Question

    Bill Carcache asked why Bread Financial appears to be experiencing fewer credit headwinds than peers despite its exposure to lower-credit-score customers. He also asked about frequency versus severity dynamics and the potential for the reserve rate to decline in 2025.

    Answer

    EVP and CFO Perry Beberman attributed the company's relative credit outperformance to early recognition of consumer strain, proactive credit tightening, and maintaining discipline by not expanding their 'buy box.' He stated the reserve rate will likely remain near current levels until there is clear evidence of improved credit quality and a better economic outlook, though a soft landing could allow for a gradual reduction.

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    Bill Carcache's questions to Zions Bancorporation NA (ZION) leadership

    Bill Carcache's questions to Zions Bancorporation NA (ZION) leadership • Q2 2025

    Question

    Bill Carcache of Wolfe Research asked about the potential for the net interest margin (NIM) to return to pre-COVID levels around 3.5% and whether current consensus estimates are too conservative. He also requested more details on the new consumer 'gold account' offering.

    Answer

    CFO Ryan Richards outlined several tailwinds supporting NIM expansion, including ongoing fixed-asset repricing, the diminishing headwind from discontinued hedges, and the positive remix from securities runoff into loans. Chairman & CEO Harris Simmons described the gold account's features, such as free ATM access and loan discounts, noting its successful initial rollout and plans for a company-wide launch.

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    Bill Carcache's questions to US Bancorp (USB) leadership

    Bill Carcache's questions to US Bancorp (USB) leadership • Q2 2025

    Question

    Bill Carcache asked for a follow-up on the expected magnitude of the fixed-rate asset repricing benefit, where the greatest potential lies, and for confidence that these tailwinds will materialize without being offset by other factors.

    Answer

    Vice Chair & CFO John Stern responded that the volume of assets repricing is expected to be higher in the second half of the year compared to the first. He expressed confidence that this, combined with stable spreads and the positive impact from the recent mortgage sale and securities portfolio repositioning, will be key drivers supporting the bank's net interest income trajectory.

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    Bill Carcache's questions to US Bancorp (USB) leadership • Q1 2025

    Question

    Bill Carcache of Wolfe Securities asked if positive operating leverage could exceed 300 basis points and inquired about client exposure to potential tariff policy changes.

    Answer

    CFO John Stern noted that while operating leverage could hit 300 bps in a quarter, the bank would likely reinvest the outperformance, using it as a throttle. Regarding tariffs, he stated it is too early to see an impact, but the risk management team is actively monitoring exposed client portfolios like auto and building materials.

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    Bill Carcache's questions to US Bancorp (USB) leadership • Q4 2024

    Question

    Bill Carcache asked for a deeper look inside the 9% growth of tech-led merchant processing, specifically regarding new additions versus attrition. He also inquired about the quarter-end deposit funding costs and their expected trajectory, and for details on the active hedge notional.

    Answer

    President Gunjan Kedia did not provide a specific new vs. attrition breakdown but described their role as a key back-end partner for innovative front-end providers. CFO John Stern addressed deposit costs in terms of beta, stating the cumulative beta was 38% in Q4 and is expected to rise to the mid-to-high 40s in Q1, eventually settling around 50%. He also explained the hedging program is working as intended, with pay-fixed and receive-fixed swaps having a relatively neutral net impact on income while protecting capital.

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    Bill Carcache's questions to RLI Corp (RLI) leadership

    Bill Carcache's questions to RLI Corp (RLI) leadership • Q1 2025

    Question

    Bill Carcache of Wolfe Research asked about RLI's strategic playbook for a potential U.S. recession triggered by tariff policy and inquired about the company's view on MGAs underwriting aggressively at lower rates.

    Answer

    President and CEO Craig Kliethermes explained that RLI's diversified portfolio provides resilience during recessions, noting that while construction-related business could face pressure, increased domestic investment could be a tailwind. COO Jenni Klobnak added that aggressive MGA competition is a normal part of the cycle, particularly in property, and RLI's consistent underwriting approach often wins back business when undisciplined competitors falter. Mr. Kliethermes also expressed that the market's lack of discipline and short memory is 'disheartening'.

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    Bill Carcache's questions to RLI Corp (RLI) leadership • Q4 2024

    Question

    Bill Carcache of Wolfe Research asked how RLI's appetite for growth in Casualty has been tempered by severity trends, given that premium growth remains strong. He also posed a philosophical question about whether RLI would consider exiting its 'noncore' investment in Prime to avoid negative earnings surprises and better control its destiny.

    Answer

    COO Jen Klobnak responded that RLI trusts its product leaders to identify hardening markets, like transportation, and lean into them profitably. President and CEO Craig Kliethermes emphasized that incentives are tied to profitable growth, not top-line targets. Regarding Prime, Kliethermes stated that while they would entertain a fair offer, the investment has been highly positive long-term, and unlike the Maui Jim sale, Prime is not for sale in aggregate. CFO Todd Bryant reiterated that this was one challenging quarter for an otherwise successful investment.

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    Bill Carcache's questions to RLI Corp (RLI) leadership • Q3 2024

    Question

    Bill Carcache inquired about RLI's most attractive opportunities for profitable growth amid market disruptions, the outlook for pricing versus loss cost inflation after recent hurricanes, and the key drivers behind the company's consistent favorable reserve development.

    Answer

    President and CEO Craig Kliethermes identified personal umbrella, transportation, marine, and Hawaii homeowners as key areas for growth, citing the company's diversified portfolio and disciplined underwriting. COO Jen Klobnak noted that property rates are well-priced and recent events should stabilize the market, while casualty rates are keeping pace with loss trends. On reserve consistency, Kliethermes, Klobnak, and CFO Todd Bryant attributed it to a long-term, prudent view on loss costs, a focus on small to middle-market insureds, diligent claims handling, and a cautious approach to recognizing good news in reserves.

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    Bill Carcache's questions to Capital One Financial Corp (COF) leadership

    Bill Carcache's questions to Capital One Financial Corp (COF) leadership • Q1 2025

    Question

    Bill Carcache asked if Capital One will need to adjust its investment priorities to accommodate the build-out of the Discover network and questioned the company's focus on managing expenses to generate positive operating leverage.

    Answer

    Richard Fairbank, Chairman and CEO, reiterated the company's long-term commitment to improving operating efficiency, which he views as linked to technology investment. He acknowledged the many opportunities they now have, including the Discover network, and stressed that rigorous prioritization is key. He affirmed that the efficiency journey remains a critical measure of their performance.

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    Bill Carcache's questions to Capital One Financial Corp (COF) leadership • Q4 2024

    Question

    Bill Carcache asked if Capital One would consider reintroducing debit rewards to compete more effectively with big banks, given the greater flexibility that owning the Discover network would provide.

    Answer

    CEO Richard Fairbank framed the opportunity within Capital One's broader, long-term consumer banking strategy of building the "bank of the future" through a hybrid digital and thin physical distribution model. He described the Discover acquisition as a "shot in the arm" and an accelerator for this existing strategy. While not committing to a specific debit rewards plan, he implied the network would enhance their ability to grow their national banking business organically.

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    Bill Carcache's questions to Capital One Financial Corp (COF) leadership • Q3 2024

    Question

    Bill Carcache posed follow-up questions on the net interest margin (NIM) and reserves. He asked if improving credit could turn revenue suppression into a significant NIM tailwind and whether the quarter's reserve release implies that peak reserve rates are now in the past.

    Answer

    CFO Andrew Young confirmed that if credit improves in an absolute sense, the resulting decrease in revenue suppression would be expected to act as a tailwind for NIM over time. Regarding the reserve release, he clarified that it was driven by increased confidence in the stability of underlying credit trends rather than a specific change in qualitative overlays. He cautioned against isolating qualitative factors and emphasized looking at the totality of the forecast.

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    Bill Carcache's questions to Prosperity Bancshares Inc (PB) leadership

    Bill Carcache's questions to Prosperity Bancshares Inc (PB) leadership • Q4 2024

    Question

    Bill Carcache asked about the extent to which customers are tapping debt capital markets, whether current loan demand is pent-up, and how the bank's NIM guidance translates into Net Interest Income (NII).

    Answer

    President and COO Kevin Hanigan clarified that it's rare for their customer base to access debt capital markets and characterized current activity as normal business expansion rather than pent-up demand. CFO Asylbek Osmonov explained that NII is expected to grow, driven by positive tailwinds from the repricing of securities, maturing fixed-rate loans, and special CDs to more favorable rates.

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    Bill Carcache's questions to Synchrony Financial (SYF) leadership

    Bill Carcache's questions to Synchrony Financial (SYF) leadership • Q4 2024

    Question

    Bill Carcache asked if the product, pricing, and policy changes (PPPCs) could drive Synchrony's normalized return profile sustainably above its 28% target. He also requested color on the factors that would drive the 2025 efficiency ratio to the lower or higher end of its guided range.

    Answer

    EVP and CFO Brian Wenzel responded that the company has not changed its long-term outlook but may revisit targets once the late fee rule situation is settled. Regarding the efficiency ratio, he explained that performance within the guided range depends on driving operating leverage by growing existing account balances and maintaining discipline on headcount and other operational expenses.

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    Bill Carcache's questions to KeyCorp (KEY) leadership

    Bill Carcache's questions to KeyCorp (KEY) leadership • Q4 2024

    Question

    Bill Carcache of Wolfe Research asked about KeyCorp's strategy of focusing more on fee income and how a pro-growth administration might affect that mix. He also questioned at what point credit spreads might need to widen to stimulate loan growth.

    Answer

    CEO Christopher Gorman stated he likes the current 60/40 NII-to-fee income mix and aims to grow both sides, noting a new administration could unlock M&A activity. CFO Clark Khayat emphasized their model serves clients in either the capital markets or on the balance sheet. Gorman added that banks retain an advantage in choppy markets due to their flexibility.

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    Bill Carcache's questions to KeyCorp (KEY) leadership • Q4 2024

    Question

    Bill Carcache from Wolfe Research questioned KeyCorp's strategy of focusing more on fee income versus balance sheet risk, the potential impact of a pro-growth administration, and the credit spread conditions needed to drive a notable uptick in loan growth.

    Answer

    CEO Christopher M. Gorman stated he likes the current 60/40 NII-to-fee income mix and that the bank's model is to serve clients where it's best, whether on or off the balance sheet. He expressed optimism that a new administration could unlock M&A activity. CFO Clark H. I. Khayat added that Key's model monetizes relationships through fees when capital markets are more attractive for clients.

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    Bill Carcache's questions to Fifth Third Bancorp (FITB) leadership

    Bill Carcache's questions to Fifth Third Bancorp (FITB) leadership • Q2 2024

    Question

    Bill Carcache asked about the longer-term trajectory for charge-offs assuming a soft landing scenario. He also inquired how Fifth Third is positioned for both a flatter and a steeper yield curve environment.

    Answer

    Chief Credit Officer Greg Schroeck expressed confidence in the full-year charge-off outlook, noting that improving NPA trends are a positive indicator for future losses. CFO Bryan Preston explained the bank is about 75% sensitive to the front end of the curve, so rate cuts there would be the primary NII driver. A scenario with front-end cuts would be beneficial even if the long end remains stable or rises.

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