Oct 28, 2026 earnings call — Credit-enhanced loan growth, Tallied acquisition
Originations rose to $2.1 billion and credit-enhanced balances grew to $146.2 million.
Revenue $0.0B (est $0.0B) · EPS $0.76 (est $0.19)
Key quotes
"We first model the worst performing vintage. We then stress historical charge-offs by 50% and 100%. In each case, the portfolio must demonstrate an ability to replenish the required cash reserve."
"As part of the transaction, we acquired credit card technology, program management capabilities and an experienced team that will expand our ability to support card programs for fintech partners."
"Our strategy to diversify partners and lines of business is designed to withstand the occasional transition of a fintech partner to that of an insured bank."
Analyst Q&A 4
Why originations jumped and credit guidance
Q (Andrew Terrell · Stephens): Analyst asked what drove the large beat in originations this quarter and whether anything outsized caused it. He also asked about the SBA securitization plan and how that relates to charge-off guidance, and why core operating expenses rose this quarter.
A: Management said two main drivers lifted originations: stronger-than-expected student loan activity and a program that finally ramped. They described the SBA securitization as an event they are working toward, said NCO guidance was moved to $4 million reflecting an unusually favorable quarter but warned results can be lumpy, and confirmed charge-off guidance is independent of any securitization. On expenses, they said third-quarter costs included Tallied integration and true-up personnel costs, they don’t guide expenses, and they will spend as needed to support partner growth.
"I would call it unusually favorable this quarter and not indicative of like a new run rate." — James Noone (CEO)
Sales pipeline, Upstart exit, and credit-enhanced growth
Q (Manuel Navas · Piper Sandler): Analyst asked for detail on the sales pipeline and timing for ramping partners. He also asked about what happened with Upstart and whether other partners might be leaving, and about growth potential for the credit-enhanced balances.
A: Management said the pipeline is strong and compounding, noting a signed payments partner this quarter and a prepaid partner last quarter. They said the Upstart relationship was mutually ended September 30 and had an immaterial contribution to Q3; two partners have signaled they may pursue charters but contracts run into late 2028/early 2029 giving time to replace them. On the credit-enhanced product, they said it grew from virtually 0 to $100 million in a couple of quarters, expect about $20 million (15%) organic growth in Q4, and suggest modeling 5% growth in 2027 until new partners launch.
"We grew this from virtually 0 to $100 million in a couple of quarters." — James Noone (CEO)
Originations outlook, expenses, and partner charters
Q (Joseph Yanchunis · Raymond James): Analyst wanted expectations for 4Q and 2027 after the big origination jump, how large the signed pipeline programs could be and timing of revenue, whether expense increases are temporary or permanent, and if any partners are pursuing a bank charter and contract protections.
A: Management said Q3 origination strength came from a big partner launch and larger-than-expected student lending, and pipeline monetization is likely between end of 2027 and into 2028 depending on launch timing, with larger partners implying more long-term revenue but no explicit revenue figure. They reiterated they don’t guide to expenses; Q3 included Tallied costs with some in discontinued operations and some platform costs in continuing ops, and they expect some Tallied-related expenses to moderate. They said two partners have indicated they will pursue charters with agreements running into late 2028/early 2029, and there is no exclusivity language to prevent partners from leaving.
"We have 2 partners that have indicated that they would be pursuing a bank charter." — Robert Wahlman (CFO)
Tallied costs, buybacks, and NIM drivers
Q (Manuel Navas · Piper Sandler): Analyst asked whether Tallied-related expenses are likely to decline and by how much, what buyback pace and rules the company will follow going forward, how concentrated revenue is among top customers, and why core NIM moved up this quarter and will shift down later.
A: Management said the Tallied acquisition brought upfront heavy costs that should decline as integration proceeds, but they don’t provide expense guidance. On buybacks, they said the Board’s guidance is to repurchase as much as allowed while keeping consolidated leverage comfortably above well-capitalized levels and subject to the 25% rule, and a 10b5-1 plan will allow more trading days. They do not disclose top-3 revenue splits; they explained the core NIM uptick came from higher margins on some credit-enhanced clients and a large tax interest income refund in Q3, and said single-quarter moves can be noisy.
"The guidance from our Board is to buy back as much as is available in compliance with the rules on share buyback as long as the buyback price is below book value." — Robert Wahlman (CFO)