Synchrony Financial (SYF) 17 Jul 242024 Q2 Earnings call transcript

Good morning, and welcome to the Synchrony Financial Second Quarter 2024 Earnings Conference Call. Please refer to the company's Investor Relations website for access to their earnings materials. Please be advised that today's conference call is being recorded. [Operator Instructions]

I will now turn the call over to Kathryn Miller, Senior Vice President of Investor Relations. you. Thank

begin. may You

good Welcome and earnings our conference call. morning, you, to everyone. quarterly Thank

today's we This Investor address the press presentation to on to financial addition In release, the are presentation be the The release, available we website. accessed schedules call. going and that website, have of topics plan can our Relations to synchronyfinancial.com. section during our press detailed information covers a provided by

our I risks might wanted We will to available actual Before comments we materially our that statements to today factors cause forward-looking you subject results get differ are to and on website. in These statements. that started, results list the materially. include SEC remind our which and actual could are differ uncertainty, filings,

we non-GAAP in the financial performance. will company's During to measures refer the discussing call,

measures You GAAP call. can to for financial measures of a today's reconciliation our materials find these in

responsible accuracy authorized Financial located edit Synchrony The only our not webcasts is earnings not by parties. for provided website. our transcripts of on and does third Finally, the are guarantee or teleconference

morning the this Brian call Chief Wenzel, Officer. President and Doubles, now Vice Brian Officer; to and the On Brian and Chief Executive will I Financial call President Synchrony's over turn Executive are Doubles.

good to tangible return including is our performance a and return a average of everyone. net Kathryn, on testament or and morning, strong per equity model. results reported on share, diluted differentiated Thanks, of XX.X%. earnings Today, a million second quarter Synchrony $X.XX of $XXX common assets business This X.X%

further on over growth sustainable underwriting to to and digital sales our our platforms, We innovative strategic the products risk-adjusted approach progress of objectives to and management leverage and term. returns continue to capabilities and long and credit diversified portfolio deliver disciplined

strong second of receivables volume billion average to accounts, X% Synchrony's X%, the last demand year. as value delivered accounts X.X added ending new growth active and and $XX of during quarter purchase grew Synchrony million propositions remained by Customer for product generated compared

technology growth data to portfolio quarter been in XXXX strengths market our more where drivers account have a default. Synchrony's contributed new customers trends our in recent indications our dynamic needs of our responsibly but we portfolio's platform, second higher have combination seen have volume and while to seek solutions levels and lower as And relative have evolving consumer to pre-pandemic the partners. outperformed selectively most also of we address proprietary action strengthen with take the leveraged probability our core credit of trends improved have we have through analytics, credit in to and actions, in beyond. along the spending These and our these trajectory credit conditions, particularly industry our flexible of financing performance of purchase and with today, should and delinquency

and vision At level, the ticket spend consistent volume generally trends down Purchase X% to as and XX% growth broadly platforms moderation. consumer the rate platform impact purchase by categories growth items, the and to in the versus were Meanwhile, like quarter cards ranged as Dual the on higher X%. furniture, credit from in co-branded X% increased second primarily volume X% payment year, of ranged volume receivables accounted XX% receivables the jewelry lower particularly bigger year-over-year, driven total last up reflecting actions. across for and well purchase for from of quarter.

offerings broad attract across us gives customer value spend a and of and products. of as purchases propositions out-of-partner compelling trends our recent range utility into Synchrony's categories, insight deeper the industries

health at home ticket more furnishings, such been entertainment. broadly. and at to though spend nondiscretionary continue discretionary and more particularly as purchases, wellness to categories, growth pharmacy larger customers needs spending and be restaurants on and spend They to continue their Our and discerning contributing travel in in have the

grades rates and credit second customers categories segment our in average slightly has average across ticket normalization saw offset during grades and growth transaction payment with declined versus Customers of top has values. since. more spending appropriate began said, transacting values per in most less XXXX That are impact transaction quarter. our across spend as the year. our that X% credit we lower of most are values the frequently, last credit Only about transaction and which consistent however, Altogether, as these view portfolio in the generally continued behaviors rate

credit our first the rapid the Over net the tapering credit Synchrony's continues across rate When together, stability first the deposit that spend, actively to the moderation actions, be should their compared that to be confidence grades. these decisions payment of us our to that months the lower we this X second half. of are has and view according balances of the payment there impact through relative data year. occurred manage believe give in than taken trends, last XXXX, we half external middle charge-off savings year pace decelerated to in the this And flows. trends savings of consumers however, healthy making coupled with support in the rate cash And monitor, of

expertise that sustainable utilizing the portfolio As consumer, the and to business our to we Synchrony also proprietary industry, is come. position continue years to risk-adjusted for lending the insights broader for credit and monitor our of our of growth health performance many

more expansion the XX and including During and the added Red. with extension than we a or Verizon partners, of renewed Virgin program addition second quarter,

We maximum on excited the with continued made see our are Verizon. partnership deliver value with and Verizon purchases about opportunity we customer to

the first-rate exclusive hotel across their a digital expire. are to Elite enjoying range earn application be never experience travel will which spend, to of Rewards rewards, multi-category will from all ever for servicing. Red points MasterCard, used points Virgin Virgin can Red's of all first Cardholders the card and Virgin which to connect Red that on Virgin the proud card, while from family a with gifts members be World and flights Rewards issuer experiences We Virgin also cruises,

the And incorporating seamless partnerships our strategic are reach and and as digital solutions to across partner power technology-oriented works experiences. fully will partners, more to Synchrony continues utilize We solution the we selectively with points recently Synchrony of for an that optimize outcomes experience all and and and relationship a both customer full announced integrated our customers extend further financing experience second-look spanning our to relationships. expanded enhance apply buy sale. customer

more to to provider partner seamless utilize stronger and will the collaboration the driving and This expand platform the small and our data own that's both customer and we consumers credit loyalty serve. sales innovative that's a businesses, for also and connect responsibly technology will the access source to applying. while in care Synchrony many providers way health second point-of-sale to partners to retail the

Floor launched This with home partnership and capability enable over partnership retail-based their service excited projects time. position market scale Synchrony through both will see to supports Synchrony-issued improvement materials Easy Decor home Meanwhile, installation finance use Made a improvement about our Installation to the the We're leading required the improvement the process. streamlined our in that to additional one to home our credit for we retailers this to programs. company plan opportunity cardholders software enterprise services & and and card strengthen

partners. programs continued to enhanced Synchrony our categories most and our functionality or renewal So product for through that our customers greater access, leveraging both and distribution consumer diverse span analytics, and whether proprietary is the networks, flexibility innovative the of the at point-of-sale, our our suite it's expansion technology spend of and data addition utility and drive

I'll that, performance the turn With to financial call to Brian discuss over our greater detail. in

Synchrony's quarter demonstrate differentiated everyone. and results resilience the through to second Brian, evolving environment. good morning, business of model continue our Thanks, an

and managing are on of season, credit beginning driving we remain consumers risk-adjusted flows the our are this and actions While their sustainable growth. impact cash consumption focused

increase $X.X interest interest increased grew quarter, basis billion decrease and Turning the benefiting fees, other $XXX reflecting performance. $X.X income. our primarily receivables. fees receivables loan an XX billion, growth revenue to loan as sales lower reflecting Net and each in rate and our in and in financial reflecting grew Net to XX% billion higher X.X% to from income average RSA to increased growth payment of point X% interest an the XX%, approximately platforms. across Ending second in

in net impact income. the pricing interest partially higher increase yield receivable $XX the a actions of from and income increased. our changes, And receivables, PPPCs. payment related loan as were or $XXX of RSAs XX in basis net down partially and fee well product, to quarter higher X.XX% loan product million by as repricing rate, primarily prior policy the shares by grew reversals other million Visa initial B-X gain points, net exchange versus reflected by $XX second of offset related the charge-offs our higher charge-offs, offset year, driven the Our lower benefiting our average million of as

benefits the million build. were Best for reflecting a charge-offs by disposition. and credit losses $XX These net billion, partially increased to Pets higher $X.X reserve of impact offset the Provision

to and costs. expenses it the both itself from incremental related the expenses partially effective. should X% of rule marketing the preparatory million of technology of change and rule by resulting our acquired Late which Late related related newly lower Our offset expenses to was to to related implementation and grew reflected costs losses PPPCs the preparatory $XX The execution servicing driven Fee the $X.X investments, to employee rule Fee discipline changes by and billion, cost costs operational businesses, become

of these with This average last net a return tangible of XX.X%. sum, produced earnings basis per Synchrony's incremental on Even of quarter, diluted the costs, Synchrony points return an second improvement equity share. approximately assets of year. and common XX.X% X.X% or In ratio XXX was for $X.XX versus generated million $XXX efficiency a on

Slide prior average our points the to X.XX% XXXX X. second in above versus our XXXX. and quarter trends in cover X.XX% was year our historical Next, key I'll rate on of the quarter end, delinquency credit XX XX-plus At basis

And our was X.XX% rate of average of X.XX% basis the historical our points XX the XXXX second year was quarter charge-off rate to above the versus X.XX% points net in above and last year the quarter XXXX. XX-plus and second quarter XX in prior Our second average to historical delinquency from X.XX% in to our XXXX. compared basis XXXX

reflected reserve percent for of loan primarily loan up Our as was basis the in XX.XX% X the receivable in losses credit from a The growth. XX.XX%, receivables points quarter first quarter. build allowance

Slide far year-over-year rate XX, As growth on decelerate. thus as trajectory the to are actions continues we've delinquency credit improving shown our the of taken

and continue We performance closely actions a monitor shared credit our additional we consumer, as to broader take credit will portfolio will necessary. for the trends our given and industry

term. long actions exit we our XXXX portfolio's as short and and expect will they risk-adjusted growth positioning our returns over While targeted reducing volume the to our are we purchase new support in deliver term, the account these ability strengthen

and our grew Slide capital to source represented our of reducing deposits in our to responded direct strong while XX. deposits. the Turning total strength. Deposits Synchrony's XX% consumers funding, of We remain liquidity broker offerings our quarter as at end, billion, up liquid funding $XX and undrawn a points X% and total represented last of secured of $X.X represented billion up year unsecured debt from each assets year. and credit XXX XX.X% total and funding. last assets, were basis Total facilities our quarter from

capital our to on Moving ratios.

take to the CECL approximately CECL ratio reminder, our a transitional January metrics in transition our to than a elected XXXX. year's Under rules been of agencies. XX.X%, recognized adjustment Synchrony lower basis quarter points CECL federal The the has with second benefit income already impact transition a ended CETX XX As of joint the sheet. points last basis capital in of will and issued the make banking XX.X%. by regulatory XX statement rules, we we of final balance

XX.X%, was basis year. last above XX ratio capital X Tier points Our

last capital ratio to total points Tier to XX.X%. plus XX Our compared on increased year. a phased-in ratio capital XX.X% basis XX.X% And reserves our fully to basis X increased

dividends. quarter, second share of $XXX to consisting $XXX During million we million returned repurchases of shareholders million common and $XXX of the stock

guided by subject our As of XXXX. to for well and to had to Synchrony end, market capital XX, our period positioned capital quarter we the plan. our authorization remains restrictions regulatory shareholders business ending of conditions, performance, June share return repurchase $X remaining as billion

time. to Combining our average credit return prepare largely of within those at X.X% a on rate ability between assets quarter and over We to X% business to results, X.X% our remain including Synchrony focused for our expectations. deliver delivered least years on and on loss appropriate actions long-term second our come, performance average taking

our Synchrony these offset We've rule our been on closely monitoring our prudent And half continue of into performance refinements the to partners partners, of actions to objective. alongside credit of desire to the phase pending impact possible, objectives. determine taking in has Most their first XXXX portfolio these as shared and financial on whether soon support fees and and and preparation of we'll achieve business second as for impact go completed the late our our are PPPCs. our new track in to our effect on customers, operational and begin to strategies our in wanted will any to the actions

outlook. fee related to result pending consumer continues a be As to the behavior could and changes outcome a late of in of as reminder, potential result the could there implement the new Outcomes to to impact in framework in behavior rules and these our PPPCs was specifically late PPPCs, our any as rule uncertainty litigation the that rule. occur consumer related that performance changes filed and a response in fee potential changes uncertainties around fee actual related the timing we late of the and regarding March,

framework, XXXX. second that outlook to half let's turn With the for the of

continue We consumption, combined their flows low consumer which, decline single-digit actions, should flat with credit the to volume. expect when to cash manage to result in purchase in our and

expectations, to payment purchase rates which, combined our receivable loan growth to volume more We in the moderate when contribute moderate half. should continue to second expect with

third of impact our net the income in other to we grow rule interest Excluding and and PPPCs late the implementation, fee effect. progressively take as quarters fourth expect income

should credit with trend than a line seasonality. or in From better delinquencies perspective, to continue

than second net first lower expect the year rate this We be of half. our the charge-off to in half

of trend expected with with and to year-end And we expect is with end first our reserve program continue average generally will the half the at RSA basis. in XXXX performance. to dollar be rate. ratio line coverage reserve in to Our line on XXXX align other finally, a expenses company

XXXX, late and $X.XX with date When fee various implementation factors per earnings the of and share of dedication diluted our Synchrony's the guidance along range from delivering share on for PPPCs reflects gain and in of assuming an fully our per and the upper $X.XX impact Best sale you year. shareholders. deliver X, 'XX, is our the the implementation full EPS for risk-adjusted expects XQ of offsets these of optimized stakeholders, consolidated many to Pets prior return in between our combine include the rule, October our business $X.XX and This updated including for strong end outcomes Synchrony

turn now to Brian thoughts. the I closing back will for over call his

continues to execute a Synchrony Brian. evolving level high an in at Thanks, environment.

lending data our digital and We our our businesses serve. are advanced leveraging scale, tools, experiences our the nimble deep powering analytics and credit and to greater partners, value we and small while customers, management to and better remain providers expertise responsive capabilities still

the continued deepening stakeholders, consistently further We attracting many our are commerce. for is Synchrony driving and that results and new compelling momentum increasingly existing opportunities risk-adjusted for growth, of at American embedding heart

back call the turn Kathryn I'll Q&A. that, with to open to And the

That remarks. prepared concludes our

Q&A begin will We the now session.

as follow-up you the to I'd to yourself question. participants one one as limit please primary accommodate of like So can many and that possible, ask we to

additional the Relations will have you after call. team the Investor available If be questions,

the Q&A start please session. Operator,

with of [Operator question our take Instructions] from We'll Bhatia first Bank Mihir America.

with rate start between consumer. higher. just to reserve had the being coming a wanted the little purchase sounds of weaker is It health I like a lower, anticipated in than consumer maybe you little volume the

are you season consumer. edges? understand back-to-school trying consumer driving? And that Is so, the if can you around Just tighten fair you the on it I view continuing that And to about guess, thinking it what into heading you to just on statement? here? Is that that underwriting? is need underwriting? tighten Is the a Are to comment other changes First, is your tweaking broad-based? signaling of how just like

for Thanks question. Yes. the

well, think shape. generally, good I in consumer the think, still the I aggregate, is in pretty

the think are industry. market that we're across definitely labor seeing is trends helping. I strong. the pretty That's Obviously, similar

you into clearly That the I to different you line well dig as cohorts. in see. far expected differences of a of portfolio, are with said, some are think most indicators as we as there so look at what largely customer kind

not impacted affluent, inflation. still The as are segments They're by higher spending. really more income

other pull rotating lower end bit. On are to back a into see categories. the you They're the the consumer of income spectrum, nondiscretionary starting

the So budget. of that effects to and feeling they're a clear they're inflation it's managing

that while volume new that's a from a purchase actually a good positive perspective. so seeing That's a accounts, you're people are And People bit think don't impact, was We thing. we credit being overextending. see disciplined.

a a flows, is credit again, from So which, they're spend cash and perspective. positive their think, managing their I

staying you're 'XX -- now 'XX. just just with line credit changed be Maybe on year-end on reserve It's rate think saying then, the in I guidance. to

to said, little better call to and you we the 'XX a just That the see I the rate delinquency 'XX. the will net it Were trying than factors was seasonality. line you think expecting if better improvement be bit on in and 'XX. I'm data, implies did trending guide higher out got? right, earlier, driving to more than similar you rate understand than reserve is charge also that

for Thanks different had to Yes. bend entered Mihir. could and inflation regard economy is the potentially a the we the higher the medium those the question, down, costs, think Brian with lower going to When right? interest I develop, everyone that in income managing. are consumer perspective how period of stay year, particularly move rates how could is risks. And longer mentioned, a income, they that As poses to

sorry, back would was I even the here X. for year against decreases of rate had down of to hope understood we'd increases the even X we the the greater we or -- for inflation I'm it sticky. though think hoped And only half in progression sit have or part middle year, we as we're the probably we -- for though rate

little have So I things shifted out think bit. a

regard think going through to health see we some a how inflation you more cautious being some is those the just the with breaking stickiness bit we're we see about think little signs that to forward until I So really macro and of consumers.

different quantitative conservative So qualitative a about your I how It's your it's think reserves. don't posture. bit just tremendously in more you a versus think reserves little

Our comes next with question from Ma Barclays. Terry

So -- is the And guess $XXX of think this right kind a cap range there is implemented can half? I that the PPPCs, not still fee secondly, to quantify based if range what rollout of million to about that late of million to for then were the be the second the year? kind $XXX how range your you way on changes

I'll for ended. Thanks Yes. the question, Terry. you where start

to As continues we court. is today, indicated and in I Texas uncertain. remarks, our sit there as here be And activity that the indicated Brian in

to now whether the an So that until an or different doesn't a to becomes we implementation don't is that October go date impact on rule more And or get with date. with and view some effective regard best regard effect it if have into X the really date, play. guess definitive its we update have we not

certainty certainly So back. that when regard come we'll with again, we implementation most have greater to date,

you high should fees. we impact the a regard in an updated to about both of actions With the add the PPPCs, EPS, Best, you taking we're Pets the the to as core today. from you're midpoint the X of potential well the of take the with at implementation the provided and regard date if on end change guidance the to perspective assuming as delayed give fee Again, both as feel late how we business well as midpoint core October range which the

Got it.

half the the again in? you helpful. kind would as should And that how about terms were start think of That's how in of we that second trend Okay. in rolling then RSA,

are Terry, lower indicated loss about we Yes. be rate think that through that to A here. to rate. half think it, the framework going flow the half about is than Obviously, second the first loss to pieces will

with RSA So to Most actions in around of bias upward then the obviously, in comes into see turns going a little think implementation the with going certainly, then of an the it's growth, in October which you're that's PPPC that's just create quarter, roll purchase lower to percent. bias the going third I again, volume. upward be think that fourth that I NII on RSA. date And play. beneficial the through, X will assuming bit And fees, quarter, an slightly track to late some

which will will create tailwinds. be takes, So of which and create some there of headwinds, puts some some

with Our Bank. Deutsche from question next will come Mark DeVries

impact. rolling NIM appreciate the of of maybe just, But of Look, sense what of the lot on the Brian, what pieces and moving could year? fee some late the half your of the expectations just half there's in second the I are year just are us given the give implementation NIM of and PPPCs pieces moving a of kind for kind a you of potential back of the for the the

the for question, Thanks Sure. Mark.

got consideration, some in think second the I half, the So about framework to as the Number into moving to charge-offs you'll reversals. a take here's a about benefit we pieces lower one, of how to half net right? net first lower of relative you talked get the interest margin, right, being versus

net to a interest positive margin. that's So

I the net look the expense year. costs, probably to to half think that's at the when investment of going so funding flattish back and be you the income, interest the

and interest-earning the assets. average You there'll receivables average a and margin into interest relative benefit to loan mix the be up between will net pick

to that NIM. be So a positive will

up that yield PPPC third related. some quarter pick you actions should in will You and the of it see are the

bit some was again, the to were roll little a on little things of should the interest is of place. you hopefully, fee and line. our that bracket some to again, promotional benefit So related related assessed the some a in strictly of APR-related, fees interest And see, that bit into how

half the back So up we here into generally, of year. should a there be trend from where move positive the

contemplated to for the of see yet changes either And any waiting that or place measures helpful. behaves fee late to the there implementation to consumer in you've put actual are are the how and That's PPPC Okay. for rules?

with vetted first wave our ourselves partners. we that gone Yes. that the we've What fully that team internally and against our have are has ones through with executed

longer down and products are are fully things product types are other and little the that tail configuration around continuing segments to executed. evaluate There road bit different a inside the still other portfolio. for probably some we're they So of

that's necessarily of So the with back necessarily neutral goal us critical achieve saw, the ROA reaction may same with level that part we to the being over a but of time, to come to not that but of initial be wasn't sales. try

next Our from Cowen. Moshe comes Orenbuch with TD

Great.

Just you idea or changes. pricing it's the put there in the of of but impact can continuing that been place? from of see consumer on that I kind you've side the early, know on has kind or that positive changes negative, talk pricing about,

Yes. Thank the you, question. Moshe, for

a dashboard that place have lot per We purchase rate, with It Moshe. of looks different monitoring in detailed sales account. that's active at a starts measures,

rates, it this. imagine, can It volume, would complaint volume, we rates. call includes measures closure different you at look that all As of sorts to includes relative closure voluntary

quarter. think while important to a I complete December full first nailed it's having we only is the CIT wave in that understand have now, we the

generally in at look line it's we that entirety, its dashboard with When expectations. in our

think quarter, going with third to we consumers' to with regard get adoption the As it. step into view regard I we're to greater a

seen around cetera. e-bill et we've adoption, I things positive think some

look produced So we that we variety of share partners. organization to inside and a closely at monitor that as wide distributed with our the it and people gets closely

relative about to and it. talked Got a XXXX And loss delinquency XXXX averages. you bit the rates the to little Brian,

what the in employment of would better reaffirmed assuming I some how that could efforts? do levels that get you see about are Given that close neutralizing How tightening that -- kind said the you see than you've where is trending would those And point lower second continue of and they you you possibly be those half and that guess, to stable towards it and get? think to kind could it reversing seasonals, of How or here. they of kind averages? will improve then

Yes.

I a it's think take Moshe, back. important, step to really So

First the to of with regard industry normalization. lagged all, we've

performing well amount then XX-plus a I X outside than. I at we are actually at historical we and basis and issuers, points to X XX on were pretty XX-plus than XX basis, basis X think a XX range, you average I When a 'XX than basis maybe you're when points average. we or think right. higher we're being points X to second seasonality the favorable our And that are look XX-plus of you from historical couple points above our 'XX less basis our quarter, higher plus, look of again, range the to think of being is the

generally So slightly better to in seasonality. than line

So I think we look at that.

we're how to macro again, think develops. I going And the environment at is look today. managing consumer the

start expectation we're would not we here the we'll see think until for I environment. get clarity have it. come on As relief kind the to we them, of near I reevaluate term an that to those going adjust refinements in greater

with next Goldman Ryan Nash Our comes question Sachs. from

sticking Maybe the late with fee topic.

the a back industry, over you the you maybe pare rule the range the changes like, become curious, just in outcome there's I'm Given you've range that favor may delayed of others made, time? about a or added, roll the sticking could industry. do versus the of and obviously, interest scenario that And get positive the potential markets have when for things that -- been hopeful have you in APRs, paper changes of trailing think in what statements, foresee

by of have late Ryan, rule, first some on thing courts, fee First the certainty, continue all, to overturned would I relative CFPB not not the late or ultimately fees. or is limitation pursuing or whether down of we of if the path the type it think have delayed to the right, whether

of some have have you I certainty think to that. beyond So level

as changes will and consumer be not changes we're you not change, whether pricing about I first think warranted. behavior here or foremost, going and think and consumer whether behavior the to at look or

you two when think I step probably buckets, Ryan. that, beyond there's

regard involves with would The our our with bucket and go partners there, pricing And brand inside RSAs. and first discussion their partners have some the decisions and control. is that a and And then share to bucket make data with are input. and is one we our that B things

we obviously, like auto you home our if think we our But Synchrony that Mastercard, do cards, So that. and that, control. things about would

It's We're effect. fair ever Ryan, the get back. in with following PPPCs as core that to developments we goes to But focused and the now. going for not fee the a a everything right rule be you, lot scenario late not honest have the of say being outcome this on really through the I time would implementing think, into been rolled team prepared,

rolled new it's right Got look amount payment be sense going then of year-over-year, it. tightness have if you the you some decent how think the sound down discussion they're ahead, tighter you underwriting. a to growth that how do rate which at And it But now, given given frame? over progressed, obviously, intermediate an also regarding have as back pace about look like time makes doesn't the loan you normalization, accounts

Yes.

first, me new Ryan. little focus on XX%. probably buckets big a let There's the bit accounts, just two So for there,

managing are a discretionary with retail are footprint is this about both some physical of the first The spend in traffic levels, lower as we orientation. and seeing -- the in and is a traffic well spend and their Brian things as consumer talked lower where foot we digital seeing

with had it That that. new opportunities than So will population regard limiting accounts. right? is growth certainly in most to in you've the from through-the-door doing more obviously, some And 'XX really impact so modest the credit impact a actions generate then of 'XX, does to

to an more per that's balance of about think months takes so get or it probably about XX to average you mature. kind So an account account build,

feel to will of above think our going though most little Most [ with would see partners, continue position you're here. grow. something our of I think a I level you excited for you us. pullback and GDP ] Even look pressure given strength platforms, is when to probably to as we're bit So there's and do But certainly, growth some we example. wellness in continue that the cosmetic a there an at experience. lasik and about health the

We have specialty continue some in business of like platforms to the auto. their in strength other home and home

sales bridge to the we're economic think that positive again, inside necessarily hopefully but better guidance, of things period. some I there platforms are into us give So not going will a

we've because new even and big active than in second We growth The that you figuring only across making add, purchase. customer in growth probably engage platforms, and the would our been is life Ryan, that out thing how all we're watch fourth that I marketing actually of third, account cycle do investments more seeing. account the

positive that think year-over-year seeing a I you're so is And inflection positive.

good making store are pullback next look, in that then and And year. we're seeing still into traffic but is then spot, lower obviously some actions proactively consumer the trajectory improve we And there. will a credit the some

feel we trends overall, seeing. the we're pretty So good that about

Sanjay with Our next comes from question KBW. Sakhrani

improvement of around we you Maybe on is some know should stepped-up that of time underwriting the sort mean, made in more the of are of second -- -- I credit Brian about the so some see us you in that we if some on ago. moves I follow-up talk some refine the rates? quality. questions heard benefits that I've of the front to Wenzel, just delinquency a derivative

loan underwriting just growth then And for that questions of what quality, asked some year rate? So shouldn't that the this just that in shouldn't with should built-in is really and I slower I'm conservatism were like before, or your flat to the trying it? of outlook in the reserve tighter mean, credit the terms coupled credit help that -- think through

Yes.

First for thanks question. the of all, Sanjay,

credit combination remember, there the actions in the think this year a into of -- is then really this the part the second second latter into in quarter we last where of quarter the first quarter third year. and I started started again

presentation in the here. earnings Page see You in reflecting of it the showed the XX delinquencies, moderation we which on change year-over-year of

is of in delinquency being some itself manifested So it trends.

Obviously, season. it to takes time

kind you those to the continue expect of So actions of through. I to go think would benefit

actions in 'XX. the this effect exit 'XX little place more out year, effect as more you bit put reduced this of a have probably quarter Now year in into we on second that again,

idiosyncratic So it's take that broad-based refinements, at efficacy a We But really an if partner, ready portfolio, normal stand are combination. actions not I'd continuing this now, the from at say which we channel to point. continuing to something or our not product are more we're and with right level. deteriorates. do taking standpoint,

talk a opportunities deals potential state portfolios. to I previous the of Maybe changed you relative from could Okay. just partnership quarter? Doubles' about have question Brian follow-up. or Anything the or

of to be would That I pretty pipeline opportunities. have Look, true. a Sanjay. say we continues sure, healthy Yes, that

we certainly terms I in integrate. differentiated we how think competitively, of our partner, how technology we're investments,

to partners continues that our existing resonate so new And prospects. with both but also

good So that. about all I feel really

you're We this more bit a low industry, across days too, were to whenever historically that. uncertain, rational. headier across the see is the irrational a in now we 'XX, again, environment But tend little more that's loss continue bit think, right little your the discipline I the cycle. 'XX, I We'll things in is across side environment When an rates. price pricing, do a think to at you when which, get of rational in look, through industry, could the pricing pretty competitive always good a environment little a thing.

about really a we've how positioned, got I So good we're good of feel opportunities. pipeline and

question come from will with JPMorgan. next Shane Our Rick

is fee, implementation reserves to a into of much prior bit, loan to be much I'd range. of of the the whatever I'm favorable fundamental on how slower might Look, end second function timing impact that of growth versus guidance other upper potentially a and driving sort love And year that. moved curious and talk you've function PPPC your late is of factors a favorable how little the with a of half

given schedule. significant we've the out amount Rick. execution. in according do question, the to that to go From and execution think the of timing to frames time We've a the terms time place have that I timing on there's the hit for I the done. they're perspective, our all frame believe we've through executed of from anything in changes have say Thanks don't we I'd you that the process rolling an in -- with deliverables Yes. standpoint,

timing related really nothing there. there's So

really end moving of I'd just sit higher back the range the say and overall to the range, of the to end middle business performance.

think we going the don't managing. than I it consumer shows them be slightly while volume is under -- might expectations, We stress. see purchase lower

positive X%, change execution stabilized think look forward. half cost terms I $XX of we as would or into we related elements, being the year, the of the million as back been through the talked a I haven't various really move moving have costs only and think our up have I in funding about is the So of otherwise think, down, the including expenses to we which

is really of to the focused So execute this very Ally to on or continuing do I about the to the that we're year order Lending, as which we're think to we're have happy both disposition the in PPPC what execute rolling we on well The integration reaction as Pets and business. the out business Best. of the business, changes core

So team would on is to focused the to the drove the what higher of the us execution. I That's end say, mid- range.

Wolfe Our Carcache with next Research. come will Bill question from

capital. wanted to ask about I

on like excess how that more in have of contrast you your be are position we relative clarity you And So to you've speak to of marks, talked many it target banks position about still excess to relative plug sort with. in the historically? that large hole. guys to to should capital about target XX% may capital accreting and Can level still better the to you're a think those return therefore, to going a of little dynamic that capital AOCI who like run AOCI of dealing aggressively that bit greater to the you with are trajectory perhaps that capital in seemed appear to the need

on Bill, for question. Thanks, We've Yes. a journey. the been

got When today, journey former CETX started our then a of out a me at And parent, down there's to we been from where heard this You've XX.X%. we we're separated a about talk number peak XX%. and of of times.

organic to have target. first growth. We're relative priority an is path, to RWA be always excess right? on the continuing We But the our going

And discipline dividend. going around to inorganic have or the growth. is be what will repurchases with do the inorganic. Brian And we second third Our share then be we talks about

that. to have the we So do ability

goal. going be We're regard to who in think action. not with going is I it with necessarily agree to here tomorrow always we and target, which been to are we just prudent back trajectory because we're a stakeholders return it which way our many long-term obviously, drop towards the But that shareholders. moving we would to have our not on

versus your of I a loss That's and then seems 'XX equal. helpful. in like supportive as trajectory a would expectation guess be the end on stable And reasonable it reserve reserve of under of at your favorable all 'XX, releases, rate forecast period more else followup CECL a your supportable expectation of

rate should of be back get is more and So derisked we essentially now that and a to your when feel getting that to level reserve thinking day Just trying is the you'd sense a embeds takeaway X as comfortable the outlook event. XXXX for greater whether conservatism? that

run right? have flattish not everyone Across going going until consumer probably we That's XXXX going said, a have assessments. macroeconomic. to our environment. when makes to environment, really how it's you're manageable. across that it's It's portfolio event, largest to industry your Yes. have and it's to the the people greater It much the qualitative watch certainly the year. are will more uncertainty for has really When we But that to normalized be more pause how we Most industry, develop wildcard. last in clarity I a more normalized rate cost consumers, clarity to their they everyday Obviously, on which regard interest the that to with clarity. back do delinquencies very get the As getting give environment goes think inflation different shared scenarios and back mix. a

think is So being better now again, a I prudent course.

Dave Our Point. question from will with next come Compass Rochester

a segment, you you October takes time actually on rule that there substantially the X, And By until your PPPC effect? if get sense? how partners of your to Or is segment at wait a the have all implemented is to we have those will large that guys at that opted point?

agreed Again, completed for a fee waiting the substantial we've Yes. underwrite business. rule We fully get do back we'll would effective. Look, part largely on X be but as of we what customers We'll still the we Brian will first phase have today. offset X and change to late this. the we've that pre support ROAs, are where customers that said, we partners our doesn't and to covers or do the that we the view do, that

a regard with that originated tail, X months back the is originated add, to right? in right, we in originated we change of Dave, is this, the account. after after or wouldn't give Because I'd a X last thing we we year, term only there accounts months account them The half just

tail inactive number goes they'll as well the a of time of there Once that active. be So become long they active, will that accounts CIT. a here become on a as for period get

is CIT, So That's that on. get course. any time part XXX% under it long we regular this to to do go of a any with but action. a takes of will normal time scenario, course And

the to from any know lot Got And scenario far dialogue want that associated and implementing easiest late your reaction the you've the with early there's follow-up changes, But would those where a seen indicate sense. you your be APR to down there in that's unwind then to changes so question Ryan's and reason understandable. stick. of so consumer of you that. expense the a the yet and the fact us leave the is of rule far regarding place? just of a that changes? would partners on good is I with fee haven't Or shut those amount in changes it. That Appreciate based assessment earlier on makes given ton your fight

portion behavioral of are working this to we their changes. very Look, I Brian the that. the this be to control, look way a statements, at and will monitor changes, earlier, discussion the we're we said early. starting just continue look book need think slight. are the just at These But at really We'll It's still for consumer to like we'll see through with now point that -- behavioral partners. CITs customer the which

rule we're the preparing if we not need feel said, and where But effect. doesn't for to. scenario we're Brian way it, like go we into the we'll As over adjust along all a

And what obviously have terms -- what that's got litigating it's we great pricing we and done. but think control we control to we're uncertain. in And we of think the rule, a changes. case and we've I we've the policy control,

control. So what we on we to can focus got

with John Hecht question Our next Jefferies. come will from

overhang wondering, incremental is, in Actually, have I But that I asked the of situation, one answered changes quarter been the just, have been and I in you or and I'm negotiate answered, uncertainty my kind uncertainty questions around fee any in -- I how contracts you with background? Virgin. think the the these structural you guess, Verizon there late guess of one then given and all has renew added new how did

Yes.

hotel, excited So It unique, cruises. what start, Red. we're will and comment. ask let launch Look, strong me Virgin a I'll think span we travel, with to base. is customer We're air Brian program very first, very to a tapping very one-of-a-kind loyal into

partner not Red be with could Virgin to excited more on new we So this product.

a well. there unsurprisingly, Equally business, to Certainly, been as great structure negotiations, fee us, for excited this. we're new strong about are renewals, into way the has around It's Verizon. excited a program ways to its that and really as but relationship, renew so crept late issue

program that certainly every well $X extended. have in anything fee was that we as as we've renewed late since contemplated published the we've So an rule

in upside, upside at is the conservative industry more only to to $X. it John, Even go you that think protected that $X to X The a in protected just as you on last that are that we be to pricing against at another pricing, place. going of bank we're things as acquired in or relative like the may we're add, at rule, on thing It's -- issuer, second look We that XX has the the in relative protected deal relatively on To fees chances we're from do the not structuring there going portfolio to quarter we're going the assume partners. years. I'd there's the late in late you much the fee downside, extent the it's -- pricing. when Yes. we

Wells from Fargo. for question. come have will last with time We It one Don Fandetti

of had purpose. quarter Yes. how know your Can maybe you vintage, to another haven't expectations talk sort belt relative I general 'XX 'XX. under you versus a little your just much the And volatility and You that's bit performing? as got about

Don. Yes. Thanks the question, for

all, like setting first I'd So again, the of against industry. think I level -- to do it

look effects feel of other curves, lot biggest of you better there are delinquency the from exited consumer. adjusting the the industry. extensively did portfolios both shared we some you look credit pandemic curves, a vintages cumulative seen card perspective. relative our vintage the and the of some and credit to go issuers in is according of we've than issued performing That the at charge-off time as credit and -- the do bureaus an their if their they think talked ever box a what credit industry world over of awful We that net said, I and the some industry's in being or criteria

use background. So that as I a

through and When the are you look when some half second at year of than XXXX slightly think the vintage. details worse you gets I worse you look here, had of the the Don. of 'XX XXXX than half or delinquencies, 'XX delinquencies first give of you the -- I'll performing skewed at because pandemic.

of half charge-off but actions is The credit we've taken, look you because off the than 'XX when half second think indications half second better what first 'XX. the when half performing 'XX about the they and the of of And are perspective, a we early see are you than 'XX. at very and first of 'XX 'XX the performing of early, better

supporting in actions made modifications So vintages. the do we've the that I think some of credit are

of 'XX above back of about has bit into we delinquency shared into our into the have part that are feel how 'XX consumer -- half developing. of 'XX of historical rate. the some the But given a the vintages trends that in We us little good again, partially early

earnings Synchrony's conclude call. conference does This

this may You a disconnect at wonderful you. and time, your day. Thank have line