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spk00: Greetings. Welcome to the Elevate Credit first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Daniel Ray. Thank you. You may begin.
spk04: Good afternoon, and thanks for joining us on Elevate's first quarter 2021 earnings conference call. Earlier today, we issued a press release with our first quarter results. A copy of the release is available on our website at investors.elevating.com. Today's call is being webcast and is accompanied by a slide presentation, which is also available on our website. Please refer now to slide two of that presentation. Our remarks and answers will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to be materially different from those expressed or implied by such forward-looking statements. These risks include, among others, matters that we have described in our press release issue today, including impacts related to COVID-19 and our most recent annual report on Form 10-K and other filings we make with the SEC. Please note that all forward-looking statements speak only as of the date of this call, and we disclaim any obligation to update these forward-looking statements. During our call today, we will make reference to non-GAAP financial measures. For a complete reconciliation of historical non-GAAP to GAAP financial measures, please refer to our press release issued today and our slide presentation, both of which have been furnished to the SEC and are available on our website at investors.elevate.com. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project special charges and certain expenses. Joining me on the call today are President and Chief Executive Officer Jason Harveston and Chief Financial Officer Chris Lutz. I will now turn the call over to Jason.
spk06: Good afternoon, everyone, and thank you for joining us today. I hope you're all healthy and looking forward to summer and a broader year ahead. At Elevate, we recognize that the world is still uncertain, but I can speak for the company and confidently say we're more encouraged as a business than we have been in some time. As Chris and I will detail in a moment, our first quarter results and the underlying credit trends we are seeing, combined with increasing demand, point in a very positive direction for Elevate. With that as a backdrop, let me start on slide four with the highlights from a strong first quarter. On slide four and from our press release, you can see that our results again display outsized profitability despite the expected year-over-year weakness in revenue. As you'll recall from Chris's commentary last quarter, we expected our first quarter results revenues to be down similarly to the year-over-year compare in fourth quarter 20, excluding our sunny business. Our revenues of $89.7 million for the quarter were down 45% compared to first quarter 20, excluding the U.K. discontinued operations. While the end result was in line with our expectations, we note that the underlying demand trends tell a more nuanced and encouraging story than in quarters past. I'll speak to our view on demand in a minute, but clearly the pacing of factors such as federal stimulus, unemployment benefits, and tax refunds have and will continue to have a more pronounced short-term impact on demand in early 21 than we've seen in more quote-unquote normal years. Next, I would like to briefly speak to our profitability in another great quarter, which in our view stands as a proof point of our unique model. Specifically, Elevate generated adjusted EBITDA of $31.6 million in the first quarter, which translates to nearly double the margin compared to a year ago at 21.5%, versus 35.2%. Similar to past quarters, the disproportionate driver of our expanded profitability was the continued strength in credit. Net charge-offs of just 34% as a percent of revenues in the quarter continued to trend at the best levels in our history. Percentage of loans in good standing was at record highs. Nine in 10 brand customers are in positive repayment. We attribute this to multiple factors, including our deep understanding of non-prime consumers and ability to repay. Payment assistant tools, previously called deferrals, were at 3% of the total portfolio compared to 9% at years in. As we mentioned before, we anticipate these features to continue into the future and help non-prime consumers at times of need. We will talk about credit as it relates to demand in a minute, but the key takeaway for our results is that credit quality, as well as lower operating and interest expense, drove another strong quarter on the bottom line for Elevate, despite a very challenging backdrop. But even more directly, Elevate's model not just withstood an economic shock, but excelled both from a risk and return perspective. In the quarter, our net income totaled $12.7 million, which is up $17.6 million compared to a year ago and represents an income margin of 14%, which was similarly up 172 basis points versus the first quarter of 2020. While we're excited to see growth return, we expect earnings to be squeezed in the near term. While credit quality and lower than normal aggregate marketing expenses have aided our profitability over the past year, it is also important to note that Elevate continues to reduce our cost of capital and generate significant cash flow. On the whole, Elevate is in a very strong position to meet this increasing demand we see for 2021 and beyond. To that point, let's turn to slide five, where I'd like to take a minute and talk about what we were seeing in non-prime credit demand, both in the very near term as well as longer term. As you can see here, we have plotted average non-prime bank balances for a subset of RISE customers over 13 months. For the most part, the chart depicts the credit discipline and increased paydowns and savings as consumers pulled back spending and became prudently risk-averse throughout 2020. These accounts are from a subset of a RISE brand, but we believe these are telling in relation to demand. The spikes at certain points along this chart line up with the timing of federal stimulus payments. As you can see in the first smaller but elongated spike, the federal stimulus dollars were used to fund temporary spend needs and then were quickly used to pay down balances. The healthy consumer behavior expands much of the outside strength we have seen in the credit book over the past year. What is interesting, though, is that the second larger, more recent spike in the data does not show the same pattern. To be clear, the spike was driven by the most recent federal stimulus, but we believe the use of those funds are different than what we saw late last year. In 2021, it was clear consumer confidence and spending levels are rising. This is a very encouraging trend, not just for the broader economy, but for Elevate and consumer lending as a whole. The demand for access to credit is rising, and it has not pushed credit risk significantly higher. In fact, the excess savings taken by many consumers over the course of 2020 make the year ahead very bright for our industry. Healthy and rebounding demand combined with strong savings and low existing leverage is an ideal environment for a lender and it seems that 2021 has that backdrop. Let's now turn to slide seven and talk for a minute about the marketing plan in 2021. As I mentioned, we believe factors including the most recent federal stimulus will make the week-to-week demand trends in Q2 choppy, very similar to what we saw in the first quarter and much of last year. That said, the underlying demand improvement that I detailed on the previous slide, combined with improving employment and overall economic strength, will broaden the funnel for consumers we can market to. We expect need for access to credit among non-prime consumers to increase as the economy continues to reopen. To be clear, our strategy and that of the banks we support is to grow 2021 remains the same as I described last quarter. Our plan and pacing over the year will take a three-tiered approach that begins first with loans to previous or existing Elevate and Bank customers. The second and third tiers, though, are what have us more excited about the second half of 21. As we navigate the short-term pace of federal stimulus and tax refunds in the coming quarter, we expect to reinitiate broader direct mail campaigns. We have significant experience with these campaigns and hope to have a better line of sight as we get to the second half of the year to provide more specific guidance as a result, which Chris will speak to as well. Last is the third tier of our growth strategy, which will expand the credit partner channel. As you'll remember, we undertook a meaningful refresh of our credit models recently to handle both the volume and different credit decisioning steps involved in the partner channel. We are excited about the testing we had done initially and believe the opportunity to elevate in these channels can be large. In fact, we more than doubled our partner channel over the last two quarters and we anticipate adding several more in 21. The marketing mix will continue to diversify throughout the year. In March, for the first time in more than five years, we saw non-direct mail traffic outpace our direct mail traffic. In total, we believe we can drive growth through all three tiers in the second half of 2021 and beyond. That said, above all else, I want to be clear that growth across each tier will continue to be dictated by returns and profitability, and as a result, we want to reiterate the philosophy of measured growth that ramps over time. To put more simply, we're not going to open the floodgates and are happy to sacrifice percentage points of revenue or origination growth for solid profitability and cash flow. Now, turning to slide eight, I'm excited to announce a new offering for Elevate. As you may have noticed, Elevate.com has a new look and feel. The new website is something the team has been working hard on for the past several months. Our goal is to create a full-service destination for non-prime consumers who where they can find the immediate credit they need, as well as tools and information that will help them make meaningful financial progress. This fulfills our mission of Good Today, Better Tomorrow. We are excited about leveraging our deep understanding of the non-prime consumer to serve them more deeply. The website features a proprietary tool called Score 40, which helps non-prime visitors identify what immediate actions can help them improve their credit score by at least 40 points. This is just the first of several tools that will engage the consumer with a unique offering found nowhere else. We also have a broad range of content tailored just for the non-prime consumer. Over the coming months, we will be adding products and services to a marketplace page as well. The new Elevate.com will help us lower acquisition costs over time, build long-term relationships with the non-prime consumer, and give us access to a new revenue stream in the form of referral fees on ancillary products. Of course, this is just the beginning as we expand the website's reach and impact. We're excited about what this can mean for Elevate and to the non-prime consumers we serve. Before jumping to the next slide, I would like to briefly address the Today card. Today card grew total accounts by more than 18% compared to year-end and continued to experience low CACs. We are encouraged by the trajectory, even with the seasonality and stimulus. Finally, I'd like to wrap up a few thoughts before turning the call to Chris. I'd like to note that over the first quarter, Elevate repurchased 2.5 million shares, or roughly 6.5% of our outstanding shares. I won't say a lot here, but clearly we believe our company is very undervalued relative to both current profitability and most certainly what profitability we believe is possible in the years ahead. Chris will speak more to our capitalization, but we want to make the point that as long as Elevate is undervalued, we will continue to utilize our authorization to repurchase shares. Second, I'd just like to wrap with a few thoughts in the past few years for Elevate relative to our goals and what we see ahead. As you can tell, there's a lot of excitement about the future here at Elevate. In the last few months, we have rolled out updated models, added additional flexibility to our brands, grown up partner channels, launched Elevate.com, and continue to grow low APR products, and this is only the start. Candidly, it has been a challenging few years where external factors have impacted the progress of our ultimate goal. which is to help the very large population of Americans that have limited access to credit. While the global pandemic rippled across every part of our lives, the credit needs of the new middle class, which is 50% of the country, remain just as underserved as they were a little more than a year ago. In fact, in many cases, credit is less available today than it was then. While it certainly wasn't in the plan, COVID-19 has served to validate and stress test our model and elevate paths with flying colors. As we hopefully turn the corner on the pandemic, we see very bright days ahead for our company and look forward to achieving the goals we originally set out to achieve. With that, let me now turn the call over to Chris to detail the results.
spk05: Good afternoon, everybody. Turning to slide nine, combined loans receivable principle totaled $353 million at March 31, 2021, down $200 million or 36% from $553 million a year ago. This was a combination of a decrease in new customer loan originations as well as loan paydowns primarily resulting from government stimulus payments to our customers. Principal loan balances declined by approximately $47 million during the first quarter of 2021, or roughly 12% from year-end 2020. Breaking that down, principal loan balances that were not delinquent or had not deferred a loan payment, in other words, our best-performing customers, decreased only $20 million or 6% from year-end 2020. On the other hand, principal loan balances with deferred payments declined from $35 million a year in 2020 to only $12 million, or 3% of the loan portfolio, as of the end of Q1 2021. Adding in delinquent customers, only 9% of our loan portfolio was delinquent or had deferred loan payments as of March 31, 2021. This is by far the best credit quality we have ever had at Elevate. Staying on this slide, revenue for the first quarter of 2021 was down 45% from the first quarter a year ago. For the Rise product, revenue decreased $50 million, or 48%, in the first quarter of 2021 versus prior year. The revenue decline for Rise resulted from both a drop in average loan balances and a decline in the effective APR of the Rise product, which declined from 123% in the first quarter a year ago to 100% in the first quarter of 2021. The APR was impacted by both a lack of new customer loans, which typically have a higher APR than more seasoned customers, as well as the impact of adjusting the effective APR for customers that have deferred payments on their loan balances. For Elastic, most of the $24 million decline in revenue resulted from a decrease in average loan balances. Looking at the bottom of this slide, While adjusted EBITDA was about 10% lower than the first quarter a year ago due to the decline in revenue, adjusted earnings for Q1 2021 increased $1.5 million from a year ago to $12.7 million due to lower interest expense. There was no difference between reported net income and adjusted earnings for the first quarter of 2021. Our fully diluted and adjusted EPS totaled 34 cents in Q1 2021, compared to 26 cents adjusted diluted EPS a year earlier. We had an annualized return on average equity, ROE, of 31% in the first quarter of 2021, even better than the 22.4% we realized in fiscal year 2020 based on continuing operations. On slide 10, the cumulative loss rate as a percentage of loan originations for the 2020 vintage is the lowest loss rate ever due to the tightening of underwriting, slowdown in new loan originations, and improved payment flexibility tools. On this slide, we also show the customer acquisition costs. New customer loan volume continued to trend at about 50% of prior year volumes, so the product CAC for Rise and Elastic is not indicative of future expectations. When customer loan demand picks up again in future quarters, We expect the CAC to continue to trend between $250 and $300 for the rise in elastic products and should be sub $100 for the today card through the end of this year. Slide 11 shows the adjusted EBITDA margin, which was 35% for Q1 2021, up from 21.5% a year ago. Almost all the increase in the adjusted EBITDA margin resulted from lower loan loss provision. Long-term, we expected the adjusted EBITDA margin to return to approximately 20% in a more normalized growth model. Turning to liquidity and capital on slide 12, one of the positives of our business model is the short-term nature of the loans. At March 31st, 2021, cash on the balance sheet totaled over $140 million, despite paying down nearly $98 million of debt in January of 2021. Debt at the end of March 2021 totaled just over $340 million on roughly $167 million in equity, resulting in a debt-to-equity ratio of only 2.4 when including all liabilities. During the first three months of 2021, we also repurchased $11 million, or $2.5 million of common shares under our existing common stock repurchase program. This represents a 6.5% reduction in common shares outstanding since the beginning of the year. Since beginning our common share repurchases in August of 2019, we have repurchased 10.9 million shares or approximately 23% of all shares that were outstanding and issued or reissued since that point in time. Now let me discuss expectations for Q2 and the rest of the fiscal year 2021. While we are not providing revenue, adjusted EBITDA, or net income guidance for this year due to uncertainty caused by COVID and this most recent round of federal stimulus, we can provide some high level thoughts. The biggest uncertainty from our perspective is consumer loan demand, which impacts forecasted revenue, loan loss provisioning, and marketing expense for this year. We believe we are through most of the impact of the most recent round of federal stimulus payments made this past March. as customer loan demand picked up in April. Focusing first on the current Q2 quarter, revenue should be down slightly from prior quarter, as we believe we are at the trough in average loan balances in April. We expect marketing expense will double in the second quarter of this year versus the first quarter of 2021, with new customer acquisition more than doubling due to a lower cap than prior quarter. New customer loans originated from this marketing spend should result in increased loan balances at the end of this second quarter compared to March 31, 2021, and the year-over-year loan balances will be approximately flat. Given the current strong credit quality, loan loss reserve levels at the end of the 2021 second quarter are expected to be relatively flat with the end of the prior quarter, even with the expected loan growth. Loss rates should also be relatively consistent with what we have seen in the past couple of quarters. We expect a slight increase in quarter-over-quarter op expense as we begin to scale the loan portfolio again. Interest expense and debt levels should remain relatively flat with prior quarters. With the increased marketing spend and no expected material loan loss reserve release, We believe we will incur a slight net loss in Q2 of 2021 as loan growth compresses near-term earnings due to the upfront marketing expense and loan loss reserves. We will also continue to aggressively buy back our common stock under the existing repurchase plan. We are expecting to repurchase approximately $9.5 million in common shares during the second quarter of 2021, subject to daily limitations. For the second half of this year, we remain on track for year-over-year consolidated loan growth exceeding 10% by the end of 2021. The overall effective APR of the loan portfolio will continue to slightly decline as more loans are originated at near prime rates, such as the today card. We expect second half 2021 year-over-year revenue growth north of 10%. Loss rates will slowly increase as new customer loan origination accelerates throughout the year. Increased marketing spend and loan loss reserve build associated with expected loan growth in the latter part of the year will continue to compress adjusted net income just as it is expected to in Q2 of 2021. Operating expense levels for the second half of 2021 will be up slightly versus the first half of the year. While we could self-fund a portion of the expected loan growth this year, We intend to increase our leverage ratio to over 3 to 1 by the end of the year and instead use our free cash flow to continue to buy back common stock under our existing repurchase program. As a result, interest expense, while down materially in 2021 from 2020, should continue to increase in the second half of the year. The effective tax rate is expected to be in the normalized 25 to 30 percent range but our cash taxes page should be minimal as we use the net operating loss from the 2020 write-off of our UK investment. With that, let me turn the call back over to the operator to open it up for Q&A.
spk00: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Moshe Orenbach of Credit Suisse. Please state your question.
spk07: Great. Great. Thanks. And congratulations. And I guess the... maybe to expand a little on your discussion about the sequential growth in Q2. I see, you know, the chart on page five shows, you know, that you're probably not going to see a lot of pay downs after the end of April. But could you talk a little bit about, you know, about what you're already seeing from a new loan demand? Because that's obviously, you know, is a pretty healthy, you know, a pretty healthy increase and even more kind of in the second half. Is there, you know, kind of anything you can kind of give us and, And how should we think about the yield on that, you know, kind of by the end of the year, given the comments you made about the impact on the yield now?
spk06: Jason, I'll take the first part of that, and Chris can take the second part. It's a great question. You know, I think what we're seeing right now, you know, as we highlighted on slide five and slide six, is just you know, a reopening of the markets. And you're seeing consumers use the stimulus pretty quickly. I think that speaks to the consumer confidence that they have. It's not like what we saw last summer where they were holding on to those funds and kind of uncertain what was going to take place. I think we're seeing them get back out and start to reengage and live their lives. And you see them be responsible, what we show on slide six, of using that to pay down and exit some of the payment assistance tools. So I think that gives us the confidence that as things open back up, consumers are going to get back out. continue to spend money and have need for credit. And I think it creates a unique opportunity to where the consumer is in a different position financially to where they've been levered over the last year as well. So we're hopeful that the credit quality will stay strong as well. So we're now back reengaging with some of our marketing plans. We're starting to see the response rates pick back up from the lows we saw in February and March. And so that gives us the optimism as we go into the latter part of the second quarter and into the second half of the year.
spk05: And this is Chris. In regards to the average APR, I would expect it to remain relatively flat to increasing through the rest of this year. There's certainly going to be a lot of loan growth coming from our TodayCard credit card product, which is priced at roughly a sub-36% stated rate with the effective. It's a little bit over that with the annual fee. But generally speaking, in particular, as we start to really continue to grow the RISE installment loan product, we see the average APRs being flat to slightly increasing from where we ended Q1.
spk07: Great. Thanks. Just as a follow-up, you talked about the new partner channels. I guess from the outside, it feels like partner banks are kind of pulling back. So you're kind of saying the opposite. You're saying that you've got actual, you know, kind of strong demand from your partner banks. I mean, can you kind of, you know, talk about that a little bit?
spk06: Sure. And just to clarify a little bit, Moshe, when we talk about the partner channel, that's more so on the front end acquisition side of working with third party partners in the marketplace. And so what we've done over the last year or so is gone in and built the integration with the third party partners and and the internal system so that we can integrate fairly quickly and seamlessly, and also built the models behind that to make sure that we can provide the right offers to consumers on our behalf or the banks that we work with. And so we're testing that through the second half of last year. What we've seen is good response and good performance on that, both from an acquisition standpoint and from a loss rate standpoint. And so that's what we spoke to in the prepared remarks. In March, we saw the non-direct mail channels actually outpaced direct mail channels for the first time in probably five years here at the organization. So we're pretty excited about that diversification of the marketing mix and what that means as the funnels open up as we go forward. Thanks, Jason.
spk00: Our next question is from John Hecht of Jefferies. Please state your question.
spk03: Afternoon, guys. Thanks very much. I'm just wondering, you're kind of at a high-level... For the second half of the year, the loan growth kind of at a high level, what are you thinking from a macro perspective? Is it sort of just general reopening of the economy and job creation, or is there anything else to think about?
spk06: Yeah, I mean, I think it's just the general reopening of the market, people getting back out and living their lives. Like I said earlier, we're seeing the consumer confidence pick back up. So we expect demand to grow. And so when we talk about the way we're approaching the opportunity, first, you know, we've obviously seen paydowns over the last year and remarketing to existing or former customers we think is the first tier to go after. You know, we have the tried and true channels like Direct Mail that we're going to continue to lean into. to drive that growth, but we're also pretty excited about the partner channels that I just spoke about that I think creates a new vertical for us with some good growth. You layer that in with new products like the today card that we're trying to grow, we're pretty optimistic about seeing the demand pick back up.
spk03: And then, I mean, maybe just to catch us up on something we haven't spoke about for a while, once you achieve that growth this year, what do you kind of envision as the, call it, more normalized or secular growth as you get into next year or just in a normal environment?
spk06: Yeah, I think what we've talked about the last, you know, before the pandemic hit, you know, our target is in that 10% to 15% growth range. You know, the market obviously is massive. You know, we talk about it being half to two-thirds of the U.S., but we also want to make sure we have a keen focus on credit quality and make sure that it's measured in profitable growth If there's opportunities to go above and beyond that, you know, we're not opposed to taking it. But I think at the same time, you know, we want to make sure that we're delivering good results along with the growth.
spk07: Okay.
spk03: And then you talked about the different channels and the reason why CAC is a little bit elevated now, I guess, just because of, you know, general low activity activity. Through the second half of the year, how do you see the balance of the marketing channels and what does that do to CAC? I guess maybe what level do you guys see CAC settling out at?
spk05: Yeah, I think CAC's going to continue to trend when we're in good growth mode in the $250 to $300 range. And that will be primarily related to the rise in elastic products. For the Today card, it will definitely, we believe, still be sub-100 given the high response rates that we've been seeing on that particular credit product. But for Rise and Elastic, generally kind of the CACs still generally trend in the same range regardless of the marketing channel, whether it's direct mail or the strategic partners. So we feel really good that it will still be in what we've seen historically in that 250 to 300 range. Keep in mind, we could always theoretically drive it lower if we wanted to, but we want good volumes. And so both from a credit quality perspective and even from a CAC perspective, we're comfortable running losses a little higher or CAC a little higher if we want to take the growth.
spk03: Okay. Thanks very much, guys.
spk00: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for additional questions. Our next question is from David Scharf of JMP Securities. Please state your question.
spk01: Thank you, and good afternoon. Most of my questions are sort of follow-ups to what's previously been asked. I just want to make sure that I interpret correctly sort of the observation of positive underlying demand trends that you highlighted. Are you basing those entirely on just what we're seeing at a macro level based on kind of employment and savings rates and a consumer confidence, or is there anything, you know, particularly throughout April, that you saw tangibly in your business in terms of response rates and application trends that are kind of lending insight to that conclusion?
spk06: Yeah, David, I think it's a great question. I think it starts at the macro level, which we highlighted in some of the data that we shared here, all the data we're all reading. which gave us the confidence to go back and reengage some of the marketing campaigns in mid-April. And we have also seen, when you look at our response rates on the direct mail campaigns, those have picked back up from some of the lows we saw, you know, obviously at the end of last year, at the beginning of this year. So that gives us some confidence that those response rates, they're not 100% back to what we consider kind of a business-as-usual type level. But we've seen them pick back up and they're trending in the right direction, which gives us some confidence that demand is going to be there and we'll be able to hit the growth numbers we've laid out.
spk01: Got it. And maybe just shifting, you know, once again to the topic of channel strategy. Just curious, you know, I mean, direct mail has been an incredibly efficient channel for you and a number of other digital lenders over the years. And as you think about efforts to sort of build out more, it sounds like more brand awareness and more services to kind of your redesigned elevate.com. But as you think about what's required to generate that degree of awareness and consumer engagement, should we be thinking about channel partners, the credit karmas, lending trees, and the like, without a necessity, kind of having to comprise over half of the channel mix in order to drive the kind of engagement that you're looking to.
spk06: Yeah, I think when we think about the channel mix and as we go forward, you're right, DirectMail has been a fantastic channel for us. We'll continue to invest there and leverage the results that we see that are favorable from a CAC and loss rate standpoint. But we also see the opportunity to lean into these new, what I'm calling the partner channels, which are groups like your credit carnas and your lending trees that I think can help diversify that marketing mix. And the nice thing is with these, they're pretty much based on a cost-per-funded loan strategy. So it's not like you have to have a big brand spend to go out and drive that volume. you're working with that third party to pay a cost per funded on converting those loans to click through. Now, as we think about going forward past that, you know, we are seeing the opportunity to move closer to the point of need of consumers and looking for more strategic partnerships. You know, that's something we're working on right now. We're not ready to talk about just yet. I think that does create another channel for us, another opportunity for us that, that's in the decks as we look at the second half of the year. And then lastly, as we kind of think about the new Elevate.com, this is something that we're going to invest in over time. We got the first phase of it out with some financial wellness tools, with a little bit of a marketplace that's out there. We think this will help both from a marketing efficiency standpoint and from a customer retention standpoint, giving customers not just credit to search for but also ways to improve their overall financial health. and then later on it does create the opportunity for ancillary products, whether developed by Elevate or working with third parties to create new revenue sources. So I think it gives us a chance to take advantage of that opportunity but not have to dive headfirst into it right out of the gate.
spk01: Got it. Understood. And lastly, just a quick question on the Today card. Can you provide a little more color on – really who this customer is, who this new borrower is, you know, perhaps comparing sort of the average FICO, you know, of the new cardholders and applicants to, you know, the typical rise customer, maybe some insights into whether or not, you know, the new borrowers, the Zaycard, how many of them are former Elevate borrowers versus entirely new. It's obviously a different, substantially different APR, and I would imagine, you know, There may not be that much overlap, but any insight there to be helpful?
spk06: Yeah, yeah. David, I think when we look at the demographics on the Today card right now, it's still pretty early, so I don't know if this is going to hold true as we continue to grow and look to expand the portfolio size. But today it tends to be a little bit more primage, so the FICO score is a little bit higher than what we see on Rise and Elastic. And I think those FICO score bands have a much more sizable – universe to market towards. So it gets us excited about the opportunity there. But we also see a little bit higher income as well with the today card customer compared to the other brands. So I think that speaks to the ability of the community to have favorable marketing and acquisition costs, but also get payment, repayment numbers on that product with a little bit higher FACO score and a little bit higher income. And it's a consumer that's just being underserved and not having, you know, a a sizable card with a good utility and good line size for them to go out and transact with. Got it. Okay, thank you.
spk00: We have reached the end of the question and answer session. I will now turn the call back over to Jason Harbison for closing remarks.
spk06: I think Chris and I just want to say thanks to everyone for dialing in and listening today, and thanks to the team back here at Elevate for all the hard work they've done. Definitely it's been a year that we've gone through that we haven't planned for, but really happy with how the team's performed, how they're taking care of the consumers, how they're taking care of each other, and built some foundations for us to really launch some new channels, new products, and extend current products as we go forward for the rest of 2021. So excited about the year ahead, and we'll talk to you next quarter.
spk00: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.
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