John Heck

John Heck inquired about the impact of a decreasing rate environment on SoFi's lending volume mix, particularly the potential for a spike in student loan refinance activity, and expectations for deposit betas and Net Interest Margin (NIM) in upcoming quarters.

Answer

CEO Anthony Noto explained that SoFi's diverse, one-stop-shop strategy allows it to thrive in various rate environments, anticipating significant benefits for student loan refinancing and the broader home loan market as rates decline. CFO Chris Lapointe noted SoFi's success in maintaining healthy NIMs (5.84% in Q3) through effective loan pricing betas and managing deposit costs, expecting a historical deposit beta of 65-70% to continue.

John Heck asked how a decreasing rate environment would influence SoFi's lending volume mix, particularly when a significant spike in student loan refinance activity might occur. He also inquired about expectations for deposit betas and Net Interest Margin (NIM) over the next few quarters.

Answer

CEO Anthony Noto explained that SoFi's diverse, one-stop shop strategy allows it to adapt to varying rate environments, expressing optimism for 2026. He anticipates significant benefits for student loan refinancing and the home loan market from lower rates. CFO Chris Lapointe noted SoFi's success in maintaining healthy NIMs (5.84% this quarter) through effective loan pricing and deposit cost management, expecting historical deposit betas of 65-70% to continue.

John Heck with Jefferies asked about the step-function increase in the 'other expense' line item, inquiring if it included integration expenses and what primarily accounted for the change. He also asked for Capital One's opinion on the influence of private credit on consumer finance.

Answer

Andrew Young, Capital One's CFO, explained that the 'other expense' line item's lumpiness was due to three factors: the run rate of Discover's expenses categorized as 'other,' some integration expenses, and P&L-neutral geography changes related to business and reporting alignment. Richard Fairbank, Capital One's Chairman and CEO, acknowledged that private credit's energy has historically been commercial but noted they are watching its influence on the consumer side, particularly for installment loans and auto lending, while credit cards are less naturally suited.

John Heck asked about the step-function increase in the 'other expense' line item, inquiring about the component of integration expenses and what accounts for the overall increase. He followed up by asking for Capital One's opinion on the influence of private credit on consumer finance at this point.

Answer

Andrew Young, CFO, explained that the lumpiness in 'other expense' was due to Discover's run-rate expenses, integration costs, and P&L-neutral geography changes from the prior quarter. Richard Fairbank, CEO and Chairman, acknowledged private credit's historical focus on commercial but noted Capital One is closely watching its emerging influence on the consumer side, particularly in installment loans and auto lending, though he did not offer a comprehensive strategic assessment at this early stage.

John Heck from Jefferies inquired about the composition of recent portfolio deployments and whether there were any notable changes in the mix. He also asked for an update on supply and pricing dynamics across the various asset classes Jefferson Capital specializes in, such as credit card, personal loans, and telecom.

Answer

David Burton, CEO, responded that the deployment mix remains consistent with recent trends, highlighting the continued growth in insolvency deployments in the U.S. and Canada. He confirmed that supply trends from the first quarter have persisted, with increased portfolio supply seen across all asset classes.