Welcome to the Capital One First Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. Thank you. I would now like to turn the call over to Mr. Jeff Norris, Senior Vice President of Finance. Sir, you may begin..

Thanks very much, Leanne, and welcome everybody to Capital One's first quarter 2019 earnings conference call. As usual, we are webcasting live over the internet. To access the call on the Internet, please log on to Capital One's website at capitalone.com, and follow the links from there.

In addition to the press release and financials, we've included a presentation summarizing our first quarter 2019 results..

Thanks, Jeff. I'll begin tonight with Slide 3. Capital One earned 1.4 billion or $2.86 per share in the first quarter. Net of adjusting items earnings per share were $2.90. The only adjusting items we had in the quarter was 25 million of launch in integration costs associated with our Walmart partnership.

Slide 13 outlines the financial impacts of this adjusting item. Pre-provision GAAP earnings increased 18% on a linked quarter basis and 2% year-over-year to 3.4 billion. Revenue of 7.1 billion was 1% higher than Q4 '18 and 3% higher than a year ago.

Relative to the prior quarter non-interest expense was down 11%, largely from a lack of Q4 seasonal spending. Compared to the prior year, non-interest expense was higher by 3% driven by increased marketing spend as operating expenses remained flat.

Provision for credit losses increased 3% on a linked quarter basis driven by an allowance build in the quarter. Charge-offs were relatively flat as there were a modestly offsetting seasonal changes in our auto and domestic card businesses.

On a year-over-year, basis provision cost were higher by 1%, driven by a larger allowance build in the quarter, partially offset by lower charge-offs in our domestic card business. Let me take a moment to explain the quarterly movements in allowance across our businesses, which are detailed in Table 8 of our earnings supplement.

Reserves in our commercial business increased by 55 million, driven by the establishment of reserves related to a few specific credits and loan growth. Our credit cards business saw an allowance increase of 25 million, driven by a build in international card, partially offset by a small release in domestic card.

In our consumer business, there was a build of 14 million driven by growth and portfolio mix in our auto business..

Thank you, Scott, and good evening. Slide 8 summarizes first quarter results for our credit card business. First quarter pretax income was up 7% from the prior year, as the positive impact of revenue growth and lower provision for credit losses were partially offset by higher non-interest expense.

Credit card segment results and trends are largely driven by the performance of our domestic card business, which is shown on Slide 9. In the first quarter, domestic card ending loan balances were up $2.5 billion or about 3% compared to the first quarter of last year. Average loans grew about 2%.

Revenue increased 4% from the first quarter of 2018, driven by purchase volume growth and loan growth. Revenue margin increased 21 basis points to 16.15% for the quarter. Non-interest expense was up about 6% compared to the prior year quarter.

Operating expenses increased as we began to ramp up operational capabilities for a smooth Walmart conversion and launch later this year..

Thank you, Rich. We'll now start the Q&A session. As a courtesy to other investors and analysts that may wish to ask a question, please limit yourself to one question plus a single follow-up. If you have any follow-up questions after the Q&A session, the investor relations team will be available after the call. Leanne, let's start the Q&A..

Thank you. Our first question comes from Eric Wasserstrom with UBS..

Rich, just to follow up on the marketing commentary, you, in last quarter you signaled that you are focusing on acquiring accounts but keeping lines low in anticipation of maybe some potential change in the credit environment, but would give you the flexibility to increase lines at a future date.

Is that still the strategy? Or is there any change to that approach?.

Eric, we are being cautious online. Let me tell you about how that works. It means that we want to see more validation before extending more line. And in fact, with every passing month, we are seeing increasing validation in the performance of recent vintages, and this augurs well for more line extensions over time..

Great, and maybe just to follow up on that. We've seen some information of data that points to some weakening in credit in kind of mid-FICO modestly better than median income cohorts.

Are you seeing anything like that? Or just more broadly, are you seeing any particular subpopulations where there is evidence of deteriorating asset quality?.

Eric, a thing that we noticed and we've seen this, we're kind of on the lookout for it but we have now with the benefit of hindsight seen some degradation of performance of consumers for a given FICO growth. This isn't a Capital One thing in fact it isn't even an industry origination thing.

This is really a, we can see that all the way just sort of looking at bureau data.

And the reason that we sort of hypothesized this is, well, let me say our hypothesis for this modest effect, but I think it is important to note is that given the how long derogatory data stays on the credit bureaus, the derogatory data from the great recession has over the last few years been rolling off.

And so, our hypothesis has been and one of the reasons for our own conservatism has been, we may be looking at data that are might do not paying for full picture of a consumers sort of credit history. So, we've been on the lookout for that. We have seen the effect certain by FICO score. Different people did have a different hypothesis for the effects.

Now, in terms of what we do we, we built comprehensive credit models that are far beyond sort of just a snapshot of bureau score.

And so I think we feel very good about our credit the recent vintages the performance of fact, my comments earlier about validation with respect to our performance, making us more comfortable with some line increases values, indicative of that same point.

But they are part of the context for our caution has been not only sort of how deeply are in the FICO, but also this is a time period when they of less information than there once was on the bureau and we all need to be careful consumers of that information as we make our credit decisions..

And will take our next question from Sanjay Sakhrani with KBW..

Appreciate the color on the cloud migration and the cost reductions from closing the data centers. I guess two questions on that.

One, Rich, can you just talk about what competitive advantage it gives you from moving to the cloud and sort of the functionality there? And then secondly, on the 42% in 2021, is it fair to assume that there could be an expansion that's more greater than normal in the future because you have got leverage off that maybe Scott could you address that?.

So, we've talked for years about the benefits of going to the cloud and I think there are many benefits, and ironically the costs are not really at the top of the list. Our, what we hypothesis and we are finding is that, things are faster. The scalability is much greater the kind of it takes to provision.

A hardware and software environment is much faster. The ability to scale up and down basically on demand, the ability to tap in to the world's innovation that, that is going on in that segment and also benefit in security and reliability. And along the way there economic benefits as well. So, it's a pretty compelling case.

The bigger issue and the issue that all American corporations faced is not G on paper is, are there a lot of benefits from going to cloud? The big question is how on earth are we going to get there from here? And that requires confronting really for most companies, decades and decades of you know heritage in terms of who they are, the talent, the infrastructure, the way the Company works, culture and you know it is -- the big issue is the journey.

And therefore, the big news for Capital One is that we're announcing that, we have line of sight to the completion of that journey. That's not the completion of our entire tech transformation in the sense.

We will probably always be in a tech transformation because the world is in one, but it's a very important milestone for Capital One to arrive at this destination, but it's really a story of journey.

And that is you know, that's what American companies are really going to have to confront each of them in their own way as they decide what they want to be when they grow up from a technology point of view. With respect to 42% just explain your question again when you said will that expand..

Yes, I guess, is there more leverage ability off that 42% because you are moving to the cloud and you're not as physical data center intensive..

No, I think the very full year run rate benefit of getting out of the straddle and being fully on the cloud are reflected in the 42 number. I think from there we have always said, basically, the more we transform comprehensively into a digital company, the more benefits that can accrue over time in terms of the economics of the business.

With respect to the, I think the number reflects the full benefit of getting out of the data centers and being in one environment and not two.

I think the longer journey of Capital One is going to continue to be one where we drive, continue to drive our customers to digital and drive our company to digital and the many benefits that I cited one of which is economics you know should continue to manifest themselves..

And we'll take our next question from Don Fandetti with Wells Fargo..

Scott, you'd mentioned that the targeted capital return would be meaningfully higher in 2019.

Can you elaborate a little bit on that in terms of your priorities, buybacks, dividends, and if you can maybe sort of better quantify where that payout ratio target might go?.

Yes, Don, thanks for the question. We're closing out Q1 at around 11.9% the easy one. So, we're in a position where we're above our 11% capital need and I would expect that we're' going to accrete more capital in Q2, because as you may recall, we've already completed our 2018 CCAR share repurchase program.

So, you know, I would -- we're not going to be in a position of distributing more capital before we get fed approval on our 2019 plan. I'm not going to comment on CCAR at this point. I just don’t want to get ahead of the fed release, so I'm not going to give you any more details about that.

I'll just say in general and I'm going to reiterate some of the points. I made in my talking points, but we are in a really good position. I believe to fund organic growth to fund the Walmart acquisition. We got the first phase of CECL coming in 2020, which were going to need to support new capital.

And then taking all those things and looking at the earnings power that we have and our capital position today, I feel pretty good that we're going to be able to have a distribution, a capital distribution that is quite higher than what we had last year in our CCAR plan..

Lastly, it looks like the delinquency rate on a year-over-year basis, domestic cards is sort of creeping up a little bit each month.

Can you talk a little about your expectations going forward?.

Yes, so, Don, our -- let me start with our credit losses. Our losses are still improving on a year-over-year basis, while as you point out our delinquencies were about 4% higher than the year-ago quarter. There are some idiosyncratic drivers of that increase.

For example, we change loss recognition timing for the Cabela's portfolio to align with Capital One practices back in October of 2018. This had only a slight effect to our overall credit metrics but it impacts the year-over-year delinquency comparison by a few percentage points, interestingly.

First quarter may also have some effects from government shutdowns, including delays to some tax refund payments, which contribute to the seasonal movements in our credit metrics this time of year. So, I wouldn't read too much into delinquencies in this slightly noisy quarter.

Pulling up our unique growth math dynamics have been the dominant driver of our credit performance for some time. First, driving our credit losses up and then down and growth math continues to be a good guy. Of course, our credit is also impacted by the economy. The competitive cycle our growth choices and other industry effects.

So, we would expect a little normalization in terms of overall current industry performance overtime. So, going forward, we will have a couple of offsetting drivers of current credit, growth math that will continue to be a good guy and industry normalization that will likely fall in the other direction..

And will take our next question from Ryan Nash with Goldman Sachs..

Rich, on the 42% efficiency target, I mean, clearly that has two sides to the equation in terms of expenses and revenues.

So, can you maybe size for us how big the cost component of that is, just given the fact that the revenue environment could end up being different better or worse relative to what you're expecting and as of today? And then I guess, secondly, given that marketing historically somewhere between 600 and 800 basis points of efficiency.

Is it safe to say that we'll be looking at an efficiency ratio below 50% over time?.

So, Ryan, we don't. What we try to do in doing this 42, I mean, we can always create point estimates. The one thing we know about point estimates in our business, and by the way our investors have all experienced this. Point estimates, that only think you know is they're not going to be exactly bad with respect to a particular metric like revenue.

So what we did is go through a metric of outcomes of different revenue thinking through, you know what, how the costs associated with different revenue outcomes.

And you know, sort of the way we think of it is, if you if you take away the what I'm calling good guys that are coming in 2021, our story really is, and this was kind of in our guidance, our general guidance we've been giving over the last couple of years.

That the combination of revenue growth and continuing to drive on the cost of digital productivity gain general side, that will drive gradual improvement in operating efficiency. So, the other primary point we're making here is on top of what we think is a gradual improvement that will come from all the things that we do on the revenue and cost side.

We're pointing out a few specific good guys that happen to align themselves around the full year 2021. And those good guys are of course the exit of our data centers by the end of 2020, which should drive significant savings beginning in 2021.

Some technology innovation that will enable some specific, some efficiency gains, and then the benefits from the Walmart partnership, now that also line lines up around 2021 because of the revenue sharing structure that we, in our deal with Walmart and as you recall, the revenue sharing is less over the first year of the deal.

And then it steps up to the full revenue share thereafter, so there's kind of a coincidence of where several things sort of align themselves around 2021. So, if I pull way up to your question, well, you know, we don't know -- we will see where the revenue and all the metrics you know that drives operating efficiency where they go over time.

I just think a lot of planets align and a lot of things that are we sometimes use the word baking in the oven, things that are really in the works, where we are able to do something it's a little out of character for Capital One to give such a specific number several years out in the future. But that would be the context behind that, Ryan..

Next question..

Oh, he asked the question on the marketing side. So, I'm not -- we're not giving a specific number with respect to total efficiency ratio and that is because marketing of course is very driven by the contact that we find ourselves in overtime and the opportunity to really generate great business when we get there.

And that's not a thing that were going to guide ourselves to several years out in the future, but I think our other point was that the significant it's a bit the operating efficiency improvements to 42, we expect that this improvement will drive significant improvement in total efficiency ratio by 2021 as well..

And will take our next question from Chris Brendler with Buckingham..

So, I just had a question on card business, really nice acceleration with non-net interest income this quarter up to 13%, if anything you call out there. And then related, it looks like subprime mix on the card business ticked up at tiny bit, not make a big deal out of it.

Just want to know if it's more macros or is there a decision on the underwriting side?.

Yes, Chris, this is Scott. A couple of things there, so one on interchange, Rich, mentioned that we had an adjustment to our rewards liability. That was about $51 million and so just some context there. Every quarter, we update our estimates of the cost of honoring our card rewards.

And that estimate always considers changes in consumer redemption patterns and then any updates that happen in terms of terms and conditions. So, we usually see some level adjustment here every quarter or sometimes it's an increase, sometimes it's a decrease. This quarter was $51 million, the least..

And then on the service fee side, there, is it coming down quite a bit still? Is that conscious decision?.

On the service fees, a few things there, on a year-over-year basis, a couple things; one, there were a few small ticket one-time or benefits in Q1 '18. And then on an ongoing basis, we have exited a number of the subscale businesses that impact that line item as well.

So you know, I think that most of that is in the Q1 2018 number, but not in the 2019 number. So, I would say that the 353 million of service charge and fee income for Q1 is a pretty clean quarter..

Chris, with respect to subprime mix, our subprime asset mix of 34% is flat year-over-year and sort of in line with our historical portfolio mix of around one third, plus or minus. It is up lightly quarter over quarter in line with seasonal trends and all these numbers there's always rounding so these are integers.

So, I think the takeaway that you really should have is there's not a lot of news with respect to the subprime mix..

And we'll take our next question from Rick Shane with JP Morgan..

Rich, I think impulsively when you're talking about account growth. You're bifurcating between heavy spenders and traditional revolvers. Our assumption is that for the heavy spenders that you'd have to be pretty competitive in terms of line limit.

Is that the right way to be thinking about it? And if that's the case when you look at the traditional revolvers do you think that most of the accounts that you have added do have the potential to grow the line limits over time..

Yes. So, I'm glad you asked that question because there on many dimensions the heavy spender side of the business is so different from the revolver side of the business, but certainly one of them is credit line. So, let me start with heavy spenders.

We, our lines are very competitive, very comparable to the leading players at the top of the market on the spender side. So, there's not a low line strategy with respect to heavy spenders.

On the revolver side, we have always been very conservative probably relative to industry practices with respect to our credit line and you know, looking for more validation over time. I think we raised the bar with respect to validation recently and that's why we've been talking more caution on credit lines.

Now let me talk now about the surge of growth that we've had along, that come complements to the surge of marketing that we have had. This is growth that is across the credit spectrum. It's actually, more up market shifted than usual, and that's kind of to my point earlier, we're especially getting traction at the top of the market.

And the way that you know all of those accounts will play out is very consistent with how spender business you know is booked. It's expensive to book, it's a great annuity, it grows over time, etc.

The, still because of the you know the whole portfolio of what we're booking, there's lots of revolver business in there and it's all, pretty much all business that we are looking to build lines with. And as we are getting the validation, that's what we are doing..

And we'll take our next question from Betsy Graseck with Morgan Stanley..

Two questions just starting off, one the cloud. I've heard that the cloud can help deliver much more efficient marketing programs and drive much better efficiency in the marketing itself.

So, I'm just wondering, if you are experience in that as well and is that something that we could either expect to drive better revenue for marketing dollar invested with use of this tool what potentially, even we talked a little bit earlier about driving down the budget, but that's a TBD kind of question.

So I am just wondering, if you're seeing that same kind of marketing efficiency improvement that other are?.

So, when you say marketing efficiency improvements that others are, I think there are a lot of folks not leveraging the cloud at the moment and maybe they're enjoying marketing efficiency improvements too.

I think there is a lot of things going on in the world of marketing and there is quite an impact that's coming from the major tech companies, who are driving a lot of the digital marketing channels and the choices they made to in the walled garden of their information, how much they either provide turnkey services for other banks or for other companies or provide data to facilitate companies on choice.

But I think the whole world is getting more and more efficient with respect to digital marketing. Here is one of that, but I mentioned earlier that it is kind of easy to write down on a piece of paper for what you've love to do with technology and the whole problem is how do you get there from here, and marketing is a classic example.

We know the world is exploding in terms of data, big data and the ability to leverage more and more information to not only make better decisions, but to make them more customized on a micro really down to this segment of one.

The elephant in the room is, how you mobilize massive big data in real-time, and I think for most American companies it's given enough time they can do a lot with data. The challenge of when big data meets real-time that's where modern technology really separates itself from classical technology.

So marketing is on the list of one of the many things that we -- are driving improvements and look forward to driving more improvements with overtime, but I don't want to set an expectation that you'll as we fully go in the cloud, you will suddenly see a huge improvement in our marketing efficiency because frankly with most of the marketing that we're doing -- we're basically in the cloud with respect to the marketing that were doing, so that's a journey that has been ongoing and we look forward to more progress..

Okay, and then just separately on Walmart, where you talked about products that you'll be launching when that comes over on the consumer side.

I'm wondering, is there anything are you working with or planning on doing with them on the business side in B2B or the supplier side of their business model? or is it going to be solely on consumer? Just help us understand if there's, how broad that relationship could be?.

Betsy, at this point our relationship with Walmart is consumer credit card..

And we'll take our next question from Kevin Barker with Piper Jaffray..

And regards to some of the marketing spend that happened, ramped up quite a bit in the fourth quarter, would have expected a little bit better you know growth metrics here in the first quarter versus what we've seen last year.

Could you just talk about what your expectation is for growth, and I believe some of your comments about some of the up market customers that you're starting to traction with, as we move through the next couple of quarters?.

So, Kevin, the one thing that I've said for probably those who have been following Capital One for many, many, many years, I've said all along, changes in marketing levels don't expect them to in coincident periods or even in immediately adjacent periods show dramatic effect on, especially on metrics like loans.

So let me just talk a little bit about what's happening with respect to Capital One. So, the reason that we have -- we don't spend money in marketing just to spend it, one of the comments that I made in the earlier remarks is.

You can't buy your way to you know lots of growth just by spending money and especially at the top of the marketplace with spenders.

This is all about earning it and for years we have been putting in place, we've been very committed to building a spender business and investing in the customer experience, the digital experience, the products and the brand to be in a position where along all of those dimensions we're seeing tremendous progress.

And what sort of has happened in recent quarters is the alignment of a lot of progress on this with our spender business and traction with customers and our brand with non customers, combined with an actual opportunity that we see in the marketplace.

So, on the spender side of the business, you see a lot of our marketing is directed at the spender side of the business and we've had really tremendous traction there as I mentioned, and how that shows up is in significant growth of new accounts and those accounts are annuities that have great economics over time and the spenders ramp their purchases really literally for years.

It doesn't move the loan growth needle a lot just by the basic numbers and how many heavy spenders there are and the fact that that -- it's a basically it's a numbers things. So the loan growth is dominated by what happens on the revolver side of the business.

And let me comment about that other than the capability, which always exists for any bank to do line increases and I would often called that a coiled spring and it's a great opportunity for companies to take advantage of it when they want if that's that the ultimate way to really drive growth is through new account origination.

That's the prerequisite for loan and revenue growth on the revolver side. As these customers mature, we gradually increase credit lines which translate into loan and revenue growth, and we -- my point has been that we've had really strong account growth.

We are getting with every passing month more validation on the credit performance of advantages and all of this puts us in a position to capitalize on the to turn the account growth into loan growth and revenue growth overtime..

And will take our next question from Moshe Orenbuch with Credit Suisse..

Rich, I was struck by the commentary about deposits cost growth and growth of online deposits and maybe if you could talk a little bit about the strategy there because getting more online deposits with higher cost including margins, isn’t really in that itself a strategy.

What's the plan there? How does that benefit the Company and shareholders?.

The first order for any company is or for any bank is, they need to fund the Company. And of course that, well, like there is a lot of different ways to fund the Company.

Capital One is in that I love the position that Capital One is in where are our strongest and biggest funding sources on the consumer side, because that's where I think through recessions and if you look at how the fed rate various types of deposit.

If you look at the opportunity to have resilient funding and pricing overtime at the top of my list is consumer deposit. So building a -- we already are a national bank in our asset businesses, and we were a local bank in our funding businesses, and then we acquired our national direct bank.

So building out a national bank is fundamentally a central to the success of Capital One. Now the way most banks overtime, I think envisioned how they are going to grow their deposit businesses and they do it through acquisition. That's not -- acquisitions of other banks.

While we have that bank acquisitions in the past and they've been an important part of the strategic and funding migration of our company from a model line specialty finance company. Our future is going to be driven by organic growth of this national bank, and that's different from what most you know players have done.

Now one way to grow deposits is to get on the lead tables and have the highest price and that certainly you know, there's nothing wrong with doing that.

Over time what we're trying to do Moshe in a world where there all of banking is centered around one of two poles either people have a branch on every corner with quite low rate deposits or they have a direct bank and are paying you know at the high-end for deposits and our goal is not only to build a national bank but to work backwards from where retail banking is going to go, which I believe is towards thin physical distribution and great digital capabilities and you know attractive products for consumers.

So we're basically trying to figure out know where the market is going to go and just go build that.

How will that manifest itself for Capital One and for our financials? Again, very importantly, the funding of the Company but over time increasingly building our company as a franchise, much of it through cross sell through our own very large customer base and to not face the hotter money that's available out there.

But in fact really build long-term relationships and end up as really a the one bank that is really a hybrid of the direct bank on one side and the branch in every corner bank on the other side. And we've seen a lot of traction early on with this.

But what we're flagging to investors is, there are a number of reasons that we expect our deposit cost to go up.

In the competition most banks are saying that anyway, but in our particular case, the, you know, the mixed effects of this journey and the sort of natural things that happened on the way to building this hybrid bank will be accompanied by higher average deposit costs..

And what are the products that you think you'd be able to sell the banks, you know the online bank customers?.

Basically, Moshe, we between what is available, so first of all let's talk about capabilities for a second. One of the great challenges for a bank is while here. Most of the world is concluded in I find people that are not close to banking, of course, assuming well of course banks are to be digital, they'll probably be entirely digital.

I've come to really respect the importance of them and power of some physical presence.

But to challenge that any bank that does have a branch on every corner needs to confront, if you're going to build a deposit franchise is how to -- it is having a full suite of banking capabilities, that you can actually pull-off online or on your phone as opposed to having some of them.

And so, we have taken the whole set of activities that can be done in banking, and the vast majority of virtually all of have been hand sloped by the importance, we have put these online and many of them but not all of them on mobile because we don't want to clutter mobile like a NASCAR uniform with every possible banking feature.

But on little cat feet overtime, we have really built out a full banking capability that you don't need to have the local physical distribution now we're going to have some physical distribution and we are just locating that physical distribution in iconic locations.

So, it has particular region salience, but with this strategy, we hope to capture some of the best of both worlds from the world of direct banking and of local banking.

But what is just taken in the years that we've taken prior to rolling out our national bank has been of course taking the various tech platforms from the banks that we bought, putting them all together and putting their capability on the cloud and integrated and on the cloud building a -- and now building out a broad-based banking capabilities digitally, building a great and now J.D.

Power award-winning for two years in a row banking capability, online banking capability, and importantly also Moshe a credible consistency in our retail banking experience locally.

The other thing that we have done is been on the leading end of our branch rationalization, which is very important to the overall economics of this has been physical presence model..

And our final question tonight comes from Chris Donet with Sandler O' Neil..

Just wanted to follow up on the that data center migration and think about the journey you've been on starting six years ago and then taking another couple years to get the end. I'm just curious, if you whatever, you had to do it over again.

Do you think you could have shortened with that path? Because it seems to me this might be a competitive advantage that anyone else out there is going to have to keep, it's a decade process roughly.

Just want to know what you're thoughts, if you could have done it in less time or if that's just how long it takes to redo to like which you talked earlier about the systems and personnel and infrastructure?.

Chris, so, we're -- one thing I said is that, well, I denominated our journey in two -- I denominated it in two ways. One is the recent journey which is the six years. We completed six years. We're in our seventh for this technology transformation.

Importantly, it stands on the shoulders of Capital One itself and the heritage of what we've built with the talent model, the whole information-based strategy, the data, the analytics, the technology, that went into the whole founding of the Company and sort of who we are. So what is striking and I appreciate your question is that.

On those shoulders, this journey we're already six years in and we're looking ahead to getting, you know, out of our data centers two years you know essentially eight years after beginning the tech transformation at Capital One, which is a bit of an advantaged starting place.

I think there are lots of things we learned along the way, but I think if we did it over the journey is really, would be the same because it's a journey that is, it's a talent journey, it's a transforming how software is built.

It's a journey that requires confronting the way that we work and this would be true for any American company that takes this on. Confronting, how the Company works, how people work both on the tech side and you know and across the Company.

We have, you know, to take on the entangled infrastructure that exists at large banks, including our own, is a very, very daunting task and to you know set out to rebuild that not from the top of the tech stack but really from the bottom. That is a tough undertaking and it is. I don't think the path could be much shorter than what we've done.

But that's why I say the real news isn't the destination, the news is the journey. And we know we have been all in on this journey and we're in year seven now. And by the way, the last thing I would say is, well, we wouldn't change too much.

The one thing that we absolutely would choose to do, is to do this, because we are absolutely compelled by the opportunity here. And we can feel the accelerating progress on just about every dimension, if you were inside this company, you could feel acceleration on what's happening with the customer experience.

What's happening in risk management, what's happening with the dynamism of the Company, the speed to market the products, how customers are feeling about Capital One, the pace of digital adoption by our customers.

The momentum around transforming how sort of the operations work, the success in partnerships, I think are tech transformation was central to winning the Walmart deal.

And our momentum in the sense of possibility in building a national bank, and finally, the economic, the acceleration of sort of economic opportunities that we have talked about on this call..

Thanks everyone for joining us on this conference call today. Thank you for your interest in Capital One. Remember, Investor Relations teams would be here this evening to answer any further questions you may have. Have a great night..

And that does conclude today's conference. Thank you for your participation. You may now disconnect..