Synchrony Financial (SYF) 16 Oct 242024 Q3 Earnings call transcript

Good morning, and welcome to the Synchrony Financial Third 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

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

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

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

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

Synchrony's this President Chief Doubles, Brian are Officer. Brian Wenzel, Chief and and the call Officer; On Executive Executive morning Vice President Financial and

businesses partners, continues small These XX.X%. environment commitment a providers, value our the everyone. including reported of our a million Today's tangible good results reflect Synchrony's return third quarter average customers, strong equity assets evolve. results, on return Thanks, and common $X.XX per on to driving shareholders Kathryn and and to net for morning, $XXX of operating share, earnings and Synchrony or diluted of X.X% as

powerful omnichannel deliver to continued access experiences. we through credits quarter, the During responsible

beyond. purchase the since continue across new grew stable actions portfolio the be in and of with portfolio. taken solutions added Synchrony reinforce versus to the purchase our to credit of generated active Despite resonate volume. to actions, engage modest trajectory million as broad Our receivables customers that Both new well accounts of and and range financing continued has volume middle and billion average accounts as by consumer XXXX X.X of ending compelling growth X%. We as impacted those spending our and $XX credit year diversified a XXXX they accounts pullback value flexible last in remained propositions

growth like receivables they platform Purchase the the selective volume reflected Customers continue discretionary and the cosmetic of generally effects they categories and year. actions. customers over continuation and we've manage utilities on at bigger particularly the to a between rent. spend vision as Platform both credit ticket spend impact discussed per well as in X% X% of of level spend. volume their ranged navigate Synchrony's down where down the needs particularly of groceries, year-over-year, like how this as be furniture, spend, in as purchase to and reflecting and trends and lower moderated account electronics, course inflation

decreased X%, Receivables XX% from cards to to by the actions. spend purchase credit behavior quarter impact moderation. of consumer and generally growth driven versus our selective primarily co-branded due across total volume higher and the range and Dual last year, rate accounted X% XX% of payment for for more the platforms

level. the The the have generally at remained in products spend with trends these on those out-of-partner we see platform consistent

by entertainment customers nondiscretionary such as Our continue discerning furnishing, spend ticket around home to prioritizing purchases. groceries categories and be are pharmacy. larger and our and discretionary in Particularly travel

X% last values declined prime versus while expect X% transaction spending average versus credit year, generally our by customers year. transaction values most our last by per grades in transaction would non-prime customers we values X%. specifically, their transaction More categories, As reduced moderated with are average across less about

grades are year-over-year. transaction of partially Our spend, offset of the values. to of X% across relatively value impact frequency has transaction with around That partner super out lower transacting declines credit more the stable which drive prime customers last said, continue compared to year. customers

life we minimum perspective, relative payments on compelling taken consumer is that continued our XXXX broad needs with less for above payment. offerings respective their our partners, Synchrony's super priorities from align continue and behavior providers see The we And trends Synchrony utility takes across portfolio budgets. in and with customer of minimum portfolio strengthen gradually our wherever remains payment spend payment than risk-adjusted the XXXX proportion shift our believe to our to and delivering credit all the focused a them. we're and resilient to segments. for continue us and observing customers stability making Meanwhile to below From our prime across in decisions have allows loyalty that position value This our non-prime ability average prime as enhance payment and partner also When choice. solutions propositions minimum to a returns healthy segment. of as to financial shift, together, remains reflect deliver merchants evolve and priorities and to and

DICK's We're During partners, our Gibson the to than Sporting more proud added including renewed third and extend relationship. strategic with DICK's than partnership and long our quarter, builds Goods partnerships or on XX-year which XX we more like Albertsons.

our the account to and through Golf House will and fast, be exclusive able ability digital will We retail to including Athletes Galaxy in online using commitment providing Dick's rewards management. our Rewards company's maintain Goods, as across by XXX-plus earn Sporting to stores Sport, Lands. continue these locations, and credit Public SCORE the program twice cards offers, member-only athletes card

program, be and we music as to network. industry as with of Synchrony of Synchrony's available the Garage what flagship in a believe direct-to-consumer with music Gibson also on and gibson.com, well manufacturer sponsorship Gibson, Meanwhile, which Gibson's partnership part brand first framework most store. is the engagement credit Gibson launch iconic to through an Nashville sound the will participate industry as at customer program their the dealer our OEM drive represents

This communities. between customers allows their and select health to items in partnership for CareCredit retailer and strategic a Albertsons This Companies, launch in collaboration Albertsons, services. list food of leading use Vons, to accepted to excited Shaws health Acme, pay adds as CareCredit nearly also includes and Club, is of expanding wellness Jewel-Osco. Safeway, X,XXX Sam's Walgreens and a for Synchrony Albertsons is products wellness CareCredit our stores, and card payment and company where our partners drug such select to Walmart and which

scalable collaboration exclude need. empower access driving span our categories. build CareCredit process seamless on turn, insurance of Synchrony's new with And both lastly, and be credit the tech for payment our streamline alike. Wellness pet claims and driving is focus Customers with delivery a our managing and proud the most best-in-class to The our launch care This utility the of our financial greater or technology independence powering our expenses. insurance spend parents stakeholders. functionality consumer and Pets flexibility solutions renewal for will and patent customers enable who for first-of-its-kind care Synchrony their long-term commitment experiences able have Pets directly we addition card. on for that they to is that product Best reflects will reimbursement Best weather to have that to through now the experience in customers Synchrony are health more to value holdings, pets CareCredit partnerships partners veterinary innovative insurance get the pet And their reimbursed and Health pending

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

of deliver good key differentiated compelling another the strong compared X% everyone. Ending in outcome payment Thanks, consistently $XXX strategic approximately as million across of our loan third volume. the ability to point quarter to XX Brian, X% the quarter, and offset last demonstrating rate morning, financial in than purchase model and basis priorities resilience Synchrony year our our growth receivables decline reached in delivered benefit results, reflecting our of more execute of the for stakeholders. decrease business to

combined due impact grew and XX% lower primarily increased to loan and Net higher X% fees growth billion other revenue and $X.X of receivables fees, higher billion receivable as higher reflecting Net in a RSA loan interest $X.X income X%, yield. interest average grew interest the and income. to to

to reversals. combined points rate, interest-bearing cost [ higher points benchmarking grew to was basis and impact ]. year-over-year yield higher basis lower our XX higher $X.XX, XX and offset PPPCs or Total of Our payment loan due liabilities changes pricing product, due receivable partially by policy the

] offset Lending to late The to impact rule disposition the expenses late losses expenses grew $XX Other by impact implementation by PPPC million charge-offs million of of million the partially costs is and by declined were quarter billion, related technology X.XX% lower the other investment year, [ acquisition and income Best change versus and was losses. costs preparatory the operational $X.X expenses related itself gains preparatory primarily PPPCs Pets related rule $XXX fees, net stage million become average investments relating Our fee partially losses. reflected for of driven credit to $XX of both and of build. Ally driven offset to our higher the rule and and third incremental of $XX the reflecting to the execution costs by loan which should billion, reserve a million, increased X% increased to effective. $X.X our which related to primarily Provision the change, related in were charge-offs. our prior And venture receivables $XXX net higher

versus quarter the our costs, of for an Even third XXX driving approximately cost in efficiency and Synchrony's points incremental business. XX.X% year, last discipline reflecting with commitment these was leverage operational ratio to continued basis improvement the

or This on return earnings return Taken assets generated together, of net Synchrony average share. common equity per on produced and diluted $XXX of a XX.X%. of a X.X% tangible $X.XX million

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

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

Our a quarter receivables loan allowance as and the second losses coverage was which of of XX.XX% consistent percent generally with for XX.XX%. was ratio credit

performance delinquency As rates early our improving XX-plus the We'll and monitor portfolio Slide additional for our trajectory to and actions mid-XXXX both continue our take share credit industry broader credit shown XXXX continue in XX-plus for to growth are trends necessary. actions, taken well as credit the the if will through year-over-year of rate on decelerate. delinquency we've given at consumer as closely XX,

term. While year exit targeted and XXXX new since support strengthen have account long the we purchase volume our our deliver it taken short as ability expect growth our term, last reduced we returns in will the we have position actions and over portfolio's risk-adjusted the to

XX. to capital continue Slide foundation for our funding, to and Synchrony's a Turning business. liquidity strong provide

the funding, of debt, issued total by direct total a represented unsecured broker deposits XX XXXX. undrawn quarter, billion, billion and assets quarter XX.X% by billion Symphony notes reduced facilities $XXX unsecured our of our representing each At point basis of funding last XX% in rate our $X.X represented versus respectively. million, of and senior third fixed end, increase year. Total million due a deploring secured During from assets, year liquid $XX.X grew while X% deposits were approximately deposits and our and increase $XXX last credit total $X.X

capital on our ratios. Focusing

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

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

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

common in the returned quarter, million third during of dividends. $XXX to we consisted repurchases $XXX and share $XX million in stock which million shareholders Since

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

our outlook. on our focused appropriate for ability and over reinforce our executing key particularly performance to long-term time. priorities the taking Synchrony deliver years Turning our to on business target financial actions strategic come, average our to to remains

with have our are and monitoring We been our line portfolio believe and both expectations. closely credit our that in the performing actions PPPCs

are attrition we a with expected products With is fee proposition quarter PPPCs in enrollment the in customer effect, We're than the offer. our experiencing value slightly testament e-bill. less than expected, experiencing of to income also lower first the which paper statement we of stronger

track and our partners the risk-adjusted our our share whether will to alongside to achieve impact returns. operational any We financial at partners, our to portfolios targeted to continue refinements long-term objectives warranted growth customers, on determine sustainable of our strategies and are

rule. industry could As pending timing in a any rule response fee there to as the to late fee our a late potential rule implemented and the as potential of the framework in [indiscernible] of occur consumer consumer have regarding behavior and in change result reminder, result that in be was related and to PPPC a around outcome and PPPC's new litigation that broader behavior the changes related filed changes the late continues specifically of the the uncertainty change March,

and With remainder framework, let's our outlook any could to related to of performance our XXXX. that Outcomes the for these uncertainties actual turn outlook. impact of

continue We combined credit our which, volume consumer with the for in low in actions, result the purchase expect our to spending, manage to single-digit decline quarter. fourth should when

moderate, combined ending and the to last when expectations, loan receivables with compared single-digit which purchase We should to expect [indiscernible] growth to contribute continue volume year. low to

with late fee late XXXX. litigation, on Given our fee previous continued outlook that become effective not the October the as regard rule X, in we not in uncertainty rule was the and assume fee late will to implemented assumed

average will flat basis and impact by our reversals. flat As income the seasonally quarter sequentially higher on receivables, company performance Other and are of third to remain consistent loan a a sequentially expected net net of continue is revenue. expect and to on reflecting impacts we to higher level. income align the offset of net program with the PPPCs should charge-offs decrease a result, seasonally RSA interest remain dollar as as percentage

in to higher delinquencies to quarter. expect Other with And follow the the sequentially increase expenses from a seasonally seasonality expect we perspective, growth. credit fourth

to continue the charge-off XXXX also than half lower expect net the will half. second We be rate first

expect to year-end rate Lastly, our year-end generally reserve line continue in rate. the we XXXX to with XXXX be

from Synchrony to $X.XX factors. XXXX. $X.XX assumptions, year between of reflects approximate diluted full for midpoint these the per the fully expects deliver and year full share earnings improvement Given our a EPS The outlook $X.XX of prior combination

related implemented the removal the that assumption XXXX, on fee X, late therefore, benefit will and the from First, RSA rule the October be also [indiscernible] of offset. the

core quarter. our of Second, PPPCs increase the the as those the finally, RSA we strong associated fourth with in and and impact changes; performance business of enter our

on business strategic In the summary, his remain the that, positioned We evolving confident over resilient long drive an environment. turn in continued deliver thus we've over most Synchrony far Brian has strengthen believe to to in taken risk-adjusted priorities matter stakeholders. and our With to term. well our returns measures that the I'll key now call we're back thoughts. for to to closing

deep each innovative and digital to expertise and leveraging lending utility is we propositions customer proprietary and Synchrony analytics compelling have. seamless enhanced customer capabilities experiences, provide our value with data Brian. Thanks, interaction our our

to are Kathryn loyalty turn We and for our with sales want to consistently shareholders. we leadership I'll and deepening sustainable be the back growth Q&A. our to With met and customers financial small and drive our call increasingly . businesses. the value for long-term that, position solutions partners, our risk-adjusted driving open while providers anywhere that are

That concludes our prepared remarks.

and session like one Q&A question. that as one ask so of to to participants as the you limit begin yourself now the will We please follow-up accommodate possible, can to we many I'd primary

have session. start Investor Operator, Q&A the be additional call. after the questions, will team available you please If Relations the

Instructions]. [Operator

Goldman Sachs. question We first will from Ryan Nash take with our

liability-sensitive have the unpack highlighted. bias think PPPC understand just is several don't outside guide could you upward bit. the highlighted forward NII quarters? next in, you XQ as reversals I then guess lower for a seasonality. you I continued how And the maybe little us your NIM expectations seasonally in expect Brian, which comments. I to along your from fit given the Do you curve of over But did a position, with

Yes. Thanks, Ryan.

the just assessed sequentially units versus XQ. late XQ first, fees in NII delinquency into about think in on step should be down into quarter, you fourth that flowing think and the when dollars the you when are trends about So delinquency,

is offsetting You higher on see combine positivity see see will in income with should we you that the and reversals and essentially the that you expense. interest interest benefit that

how impacting So the the favorability late a it in more just kind delinquencies function of of fees. washes out from quarter,

think the to relative rates and should lag that the reset the to guide against payment well as NIM because of decline, half benefit interest a happens of net a you the second, see the the you to start margin the you of over component [indiscernible] the continue year. in CDs the As PPPC's little of should for debt interest out increase the see as will And That particularly also interest higher. first expense. stack, bit a

So generally going as you half bit in but given the it's first year. CDs a to next of think happened move of year, lagged more in quarter. second about there's be the reset of as into Both margin you tailwinds the little which the

follow calls And my then expect it. delinquencies then seasonality. same. the trajectory into seasonality, X% back I follow terms in like do outlook of of can And 'XX? to losses question, the And to does they your for mean what delinquencies year? below following first, move guess, seasonality, losses losses you that do credit next as for Got follow-up if do into for

Yes.

next really a But about in I there's whole. as back would think be January we'll Ryan, think I things So credit of really, talk couple year. to about a

strong the delinquency collections, performance one, is better the we're as its period. Number seeing several really as than delinquency in And which being We're pre-pandemic far are late-stage to month-on-month. rate, improvement in delinquency. points early First, which benefit flow positive. the there's probably we're raised. trends seeing is last the continuing four stage which seeing some I entry stable that into months then themselves,

delinquency to think you period. the are fairly seasonality last trends actually mid-single better I 'XX to we've seasonality been several well. at low to about you think relative So doing look 'XX than when that When months, digits

-- albeit to months. go half the trend last the both think back the than the can continues purchase think And certainly, of I the vintages. Again, highlighted publicly, effect most I've first So and think continue back in back performance volume half better account vintage favorable of in a actions you it's 'XX, we the see there, several go that's 'XX, that second the very credit move early, again, trending I having which credit as both the I through. 'XX some new origination, are to bolsters

that is Our X.X% to to give underwriting designed us X%.

the So that year-over-year back growth point. and decline. to continue we would be And get moving that Again, XX-plus delinquencies and XX-plus the intention both in see we're intention in can would to slides down. that the you the

tracking again, expectations our remainder as the through So to part we 'XX. move

Ma We'll take Barclays. Terry our question with next from

XX kind reversals. loan interest how next components? maybe and you out year-over-year component Any way just And payment us offset from point about of by a grows basis kind rates in into PPPC lower called think yields year? So each of that quantify PPPCs, those increase you of help can

a sequentially think the Again, first that we is showing out through Visa one, in. you of clearly, little the first going on we're flowing when certainly, shares. the the income. this line. have is full second is given the can individual of components benefit quarter yield in gain phase quarter PPPC by the the line in on interest to it's -- other CITs the matched the bit item, break it Number but you Terry, Yes. most not up But the

to expect to that into continue We next year. build

to back on we when January, provide view try more a in little think that. I we'll come bit

important I expectations. I been the as taken in you the actions not fact our our take attrition a in think been remarks when generally with There's in expectations. the a thing, have as is my high positivity highlighted is back step that customer and line prepared we've

had that again, Now reserve release. would have a

lower willingness a recognize of but but cards partially softeners, due did been statements lower do perspective, due bit customer really we on it's customers' from and from a and little our financial to expectations to change were negative expectations, a partially accounts our a all bill the our being than behavior value as that better good of they it's propositions positive. bit adoption paper to has highlight little So standpoint than

we look that, a speaking, when at So line. generally at

the less So a even little there's performing though little customer better. bit means a generally core bit is attrition, that

are, effective. changes behavior So and as issuers continue today, we started are feeling certainly we we becomes already as a watch of the market and sit we'll watch to rule where to we'll but good this customer here about implement lot have

want more as less Got seems evolved a It X%. of for but it. or maybe kind That's has at year? north how But on I your line it expectations. to coming year, about in helpful. somewhat And running charge-off guide, this expected performance follow-up then what the look into just credit with Talk rate performance tie I it's just you this performing initial of credit. credit relative don't is to your to

think deterioration late set The this that first try way late Terry, took ourselves some to quarter, year could protect into Yes. actions about and quarter, in against any happen up is the again, second really year. to we next early it, I

think the those four quarter. the some credit. expectations. the with the But we rate -- some as about. say, into we're feel than fact We'll not we I confidence on we a brings than purchase volume, slightly the took bit bit good about think what certainly at credit, seen earlier impact looked that gives us today, taking things our we where And unfortunately listen, some a my the you we actions. think denominator, in That over which you've enter of broad-based we'll which is to that lower fourth certainly little Ryan higher So little I around an again, has points are actions

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

talk last I of the collections. execute you to improvement kind months if about bit that's could few today just over was generally prior. some harder little a mix wondering And versus in is mentioned that collection speaking, catch-up. if you it late-stage Brian, on

Yes. Thank you.

we've Let with making start if customer this little most a latter bit But expanded years you get tougher. me with collect through digital other done ago, to I and other order things harder Is of a investing customer part certainly, such the pandemic, in collections number like of contacts to in in your that's channels it we where of and connect look question. forms certainly to at collections, that. the today, which can those think kind the investing in as text and we're versus

is So tougher. it a little bit

more I on number think have evolved the than you where deploy to it's and game where a the most you products do get of have we've make collections to someone certainly, phone that. do to I adapted have can declined. But just rules the you to more collectors have think

a your early quite you second, has when I a the and stage the has about be collect. the potentially what flows stage late to deteriorated, to able better when for think bit back ability slightly think into

to you collect. bit a that flows is what of than And what as positive and So you is than which if worse with performing performance. stage, again, while started delinquency it the the late more has expect very little pre-pandemic bit it optimistic into recently, entry tougher rate But was. we worse to in to look would it I is a still XXXX regard have improve little at it period, 'XX take

bit now, stage months, both would and say, have to late So early I'd that little But several stage the last, be of in a anticipated improvement we've seen we in right late-stage collections. worse.

the loans are And change your continues seem the pressure but just end. that in seems of there's of kind sort like changing low accelerating my Got I of know like around it's Is concern behavior of it lot point. -- follow-up, fair? to a terms and a it. customers It managing doesn't behavior,

Yes.

bit when so look to in aligns that absolutely on we seeing movement difference the making that's I [ little of as of on-prime. seeing there an and people really we not mid-day rate, credit I When half fair. is look of couple mean you at seeing income on prime different at rate, that the decile $X.XX look to the trends the in prime you somewhat payments more the movement was of at which the payment movement ways. a think range, you're more if a it there. you're say about with that I movement in into it X $X.XX in want much teaser say non-prime ] point by

payment. not we're So seeing it when comes stress to

I back and consumer, and think some at impacted clearly, lower-end they the recovery, when you the managing affordability K-shaped has of pulled spending look well. they're fairly

So I think consumer. the now. when things We we rational in don't see actually combined, somewhat stress we look right at those them two see doing

above again, against But level. on normalization. they a you look still rate more it's still when So back the customers, prime a XXXX are paying

the today. in don't we signs end see of necessarily low stress So

Moshe our Orenbuch take TD from next question with Cowens. We'll

Great.

tightening of changes. if little could volume consumer of the slowdown I you then was spending perhaps the bit Brian, a and the between So kind sort about talk of separate impacts wondering also own policy it and preferences in your

do is, what -- think you but those that, three questions know you that One attrition wasn't said spending gotten of by factors. affected So volume? we've I the about

Yes.

of all, First thanks question. Moshe, for the

me let that. able where to The which start like. regards So took ended. positive which we are have in you portfolio look you control the pricing changes in with at group the tested is actions news to against we in in a that When we the

those between material there's receive didn't CITs changes who and CITs, receive people volume at difference. the look we when the not a who So

aware that So base we have we're solid a not to somewhat created of. say haven't that actions either attrition the

I part one, that's think, the your So latter question. of

more down is where the much, of to retailers. I'm spend in across we as transaction a look consumers mattress, frequency purchase the I we'll think listen, I willing new the that but something things in we've impact on short-term certainly so a generally returns speaking, that's you're think moved consumer you the the our the it, go at don't we use and again, sure you that that transaction then point you the board, a to bit. some health and at create down in books attractive $X,XXX, accounts our see are that across is a see we board seen wellness of say, cosmetics lasiks you modest at in mattresses, discretionary at [ are value almost when of had I'm coming think a hasn't I the tailwind willing and board, itself, average origination actions make ], us. away. impact. I'm procedures the took, certainly, to trading the down Most And items, has what that $X,XXX, because see maybe impact risk-adjusted be can go in meaningful down, going deferred, those example, order not volume, it purchase business, some And to down values and to the will see purchase to moved a right, but that on as across even

level at to of for Brian. high Maybe kind either, a

a standpoint? reverse that. things bit little looking of some in sort as and is think although economic that looking the growth talk for wage of When about in the of about that pressured tightening, those still has you'd consumer the from pointed about trading feels you down. still what process, underlying of inflation, try for you the environment, we've or maybe macro think a where And kind period start you and been be jump to are out, As are a exceeded things kind of you that

having impact. that cost spend, they're pressure. isn't the we like to They're are budget. early in the doing year. consumers This one. some to of started The Yes, And seeing think a this helping a point, they're slowing But point, inflation industry. market to Look, across Moshe, are we're still the labor similar your maybe start trends the strong is good a new is higher see it but this in shape. I to rational, the pretty consumer a We see I definitely to is think an that pretty We way. it actually of fact I'll managing that on disciplined Brian's in that navigating offset very trend. can goods.

seeing concerning in now, a way. bit You're but little not a broad-based it more right

to is this think from perspective, see. credit I we exactly what a wanted

Some that of you're just of back that . But took. to is spend normalized think again, to behalf move of is the of that some a back seeing the actions similar just on level. and kind we pulled credit, consumer, I

you then to think accounts normal some the think there's when credit back And would to I to stability, levels be to uncertainty similar more to back a driving what year. clear in there. new lot to start would and get you levels start start that clouds we I consider when business, of this off to those prior out see growth still

We'll from Sakhrani take our next question Sanjay KBW. with

normalized some migrate next Maybe maybe the into the you're just rate direction about talk next rate. close given But year? credit, think to guidance loop just year-end. think we reserve about guidance back about Wenzel. we the Brian line, now trend when to of Maybe like on giving by know just for level how I reserve should year, not to and

Sanjay. Yes.

in you Obviously, I big of know focusing at you factor the I this it receivable how which the end plays XX.X%. year-end reserve year, that and that's seasonal develops guidance just be of with when the last really was give right look think kind probably rate reserve line the on the number, people and is XX.XX% will out. at generally year a end the of at generally. term or how a are we

model. certainly, trends most the I client-data I've you that the some think delinquency of given into builds

it's seen little while lower environment Reserve stable. macroeconomic more Federal We're I choppy. the think bit being did a that bit -- And been a rates. pleased again, we've The little

pre-pandemic day in the you us, we're both march to CECL, in of we'll So levels, that out think today period, when you generally towards you you how compare X delinquency last I as to kind going right, the I year, have with XX where certainly, some plus. XX we year, we again, back above think to indication don't line are the slightly exit and think about we anything think continue loss plus see, most says I not this that were see back And it which of as trajectory. certainly,

continue flow the mix normal, shift. would down rate as As that we back towards reserve moves the to expect to

do sort CFPB extent year. you late of changes And there. the maybe about changed through if you've it we rules, of on in fee I'm other when the doesn't the you some next to think claw talked it about you of that goes the to maybe doesn't And lot should Great. mitigate a happen, go You Okay. just effect? do in has expect Brian, back I terms like what's to anything the guess, sometime plan but But -- behavior the fully made? Or things, think when impact how trying consumer. of it the game into the implications if

Yes.

impact start your the what's fee Let your level point place. It to comments. it any kind from upon if the see neutrality, doesn't To the of comes first me of Brian the question, the in right? additional part point of rule really starting neutrality goes Sanjay, point really when and late depending trough has

it's we've one think say exit that the seen analysis. So rate our I early neutrality necessarily performance back changes don't look where based and we upon

think place. I remains of it So in piece that

assumption With regard do when January have sometime become effective, or in a with place. may more that rule better in when the regard to we information we if that fourth probably go quarter when rule to either the have does we'll

to it's and the entry We of we're in. going are taken goes operating And if rule when planning certainly, of fee we'll view late want a as as the the administration in, point company, has that just they it it's a go in.

really your is roll around back. a question So clawback, is there it usually a

have But will rule this. our in a time go effect, properties, comments play. about you a the I to to economic that We again, to... we any Brian, certainty believe go that. that going we then real And of effect those Again, know, And spent share in do back as doesn't, don't any company, way. haven't it wouldn't have view come lot have thinking execute this. further And a that. into impact then the conversation we'd in haven't it's it's you we that have for into of spent a degree company to high do a it to As time if want really some we assessment. of then for planning and we're

No. Yes.

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America. question We'll of from with Bhatia Bank take our next Mihir

rate Maybe fixed it. bit. a wanted a your than because little expect peers some to different margins portfolio for to rate I to just little your start, in little do with in to more is net a bit of you How perform large them interest environment turn a declining

just if and any willing through deposit walk you to moving pieces share? maybe the be also beta So there assumptions could you'll

Yes. Thanks for your question.

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piece the a in business should interest the when field about business think it. of getting think of be the impact component flow the we lags for yield through, you for benefit portion portion prime little of because of rate in build bit which prime as first way movements to you that this, the a I of interest that right,

component component rise. should well, hopefully, continues of we rate as down, get to certainly, floating benefit come So it. a the on rate rate the revolve payment

create and should two interest fee of . NIM the inside So the those side component. tailwinds

about funding expense. I of a the bit follow both side market. market the a lagged we're as the think portfolio as investment Traditionally, well when digital banking Obviously, we from at little the you interest the think perspective.

needs. lowering third the are here funding than I normal, little have seen earlier digital been that given in proactive think what is more a rates quarter you've banks bit probably there

followed them So down. we

have in XX% in probably of more year. a savings entirely in the given that is a creates first But during a reprice the half certainly high-yield a way of retail more has repriced but CDs, of really component, in half it's than, the bulk which which it to to year. think quarter lot say, will of an the the have the first XX% repriced which again, think tailwind. bulk I When second we and we'll a it out certificates year, this our want next originated I of about you that second, So additional XX% the break impact. which deposits. And you you for of immediate then between

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here of begin necessarily we're going exit and this point to take as period sure I to from that because not grow time. want down liquidity to at I'm need we it So

negative locally carry. So again, turns or flat, rethink if that much we'll more how

some you should So those how pieces, are on the about give sense you of are moving I to kind NIM. think, here think

then a Moshe's maybe I volume think, helpful. to the following on, up back And switching very No, Okay. questions. purchase that's and just

purchase volumes more understand. where Just certain purchase And leading make What or down gives I of purchase wanted going digit stabilized are low look single decline, consumer confidence which I are volume have level. that relatedly, here, sure you financial at, which health? it indicators are is there platforms you to volumes guess,

they Yes. of kind and year-over-year call, year-over-year what the watch flow I at look daily daily Obviously, watch see at the and adjusted daily, and -- would count view. and or a we sales view where a trends we

we stability we And I to think think we see see try to whether I see [indiscernible]. So gain insights trends. now

mentioned which started an always second we how be but promotional third decline it's the in and into quarter interesting period want retailers holiday accelerated see is of really somewhat now a Brian quarter, Again, there. the won't lose earlier, again, will to stabilized. and to time

are the of So think broadly the in when speaking, wildcard, things generally at look slow. a I bit patterns, speaking, don't we that to aggregate, see behavior continuing that's a but spending we little

further than I that down fairly higher the by break credit where to your call higher with it, to rates would consistent think we regard your it's pieces rates credit when they're rate what continue credit be consuming. been I lower of what

heading at into and think the So look is season. there stability holiday we that some okay, I say,

right? a going client, spend, I see are you're that ones there a to there So there think have much discretionary to platform discretionary more bit I down look have at platforms your think you more ones that I more think little maybe is and the to or are leads point, say, than that is it that aren't, others.

the of see inside platform. You portfolio strength in still certain of the parts

For pieces should health inside and that example, that's better wellness, performing than continue. other

other industry. just coming but the the point, the to at about levels, all spend, inflation income see is Well, go to catch that. X And lower we back we're and thing to the our some not across years particularly I and knew the think up was going to consumer, think at starting we're levels of prior just if off think in I business record this, you of consumer

slowdown is environment. necessarily in the not this bad thing So a

Mark from question next our Bank. DeVries with Deutsche take We'll

you You to mentioned see started others that changes. earlier implement

need given opportunity terms that, remain more to with you to borrowers recalibrate you've missed Just alternatively, kind what whether whether you an of get your really marginal. interested to on decided to like that low kind viewed it sound as change learned doesn't thoughts just the competitive, from or it you some you've attrition of

Yes. you. Thank

screen competitive base business. we again, partnership who people those a maintain of the So are in

relative You value But general their in side have don't to look a from things changes of different similar who look broad-based implemented people types to competitive relative have we the purpose APRs. competitive at partnership cards a who propositions. generally they dynamic necessarily at when standpoint, have

Some have with done [indiscernible] save things fees.

So I think I we've we taken. comfortable and landscape, that at look we that feel with think actions the

more look so how performs. portfolio to our again, And we

relationships to equilibrium, proposition not our where resonate merchants they is you're those a the pricing with consumer our the two customers. Our going proposition have to get. has are out situation products. of and Clearly, credit If of to the the value our product have want we with with going that value a

So it's ourselves. more we're focused on

look we outlier peers. line our when the necessarily I and we're think it in I at screen, with an not to as competitive we think relative being think about

of the seasonally then Okay. driving And couple year, Got guidance kind the we down a that? of end just you coverage saw at last step about in talk the what's Could reserve years. for bigger than of on it the implies it.

for reasonable certainly of rate, reserve that other are think think And how number certainly, a Well, to the I when things two, being forward-looking period one. think that your account you losses you over need coverage be will macroeconomic one. you there on about view time, model it's in quantitative a aren't

about the had loss it's the comfortable, the about year. of going with feel I think last feel think how be what of delinquency the end to I at as we think and end year generally the macro we we in we the line think see today we about and through content

next question Hecht Jefferies. with from our John take We'll .

and asked category. perspective to you might And similar wellness kind and has wondering, the from to have portfolio? else Most wondering, anything always rest the are of different of the I'm segment Is the that that spend growth. be nondiscretionary I'm been a from just good out health of been seeing call kind contributor discretionary trends answered. there there a in

it Brian. me start then let to and hand this Yes, John, on

value if longer got customer we've a think that the a there. look We've a bit period time, segment accelerate over years, you over those focus pullback big best we We've a market, the scores with great the brand. think. of get I a win $XXX us has proposition. of recently. been been billion space. huge We've for a But customer little We bit look, definitely we area think, health got the in able right seen a the well-recognized wellness Actually, and growth last satisfaction roughly. to products. of to of got It's little we've NPS couple

wellness. how we're purchases, some more health bigger in the been and you're feel you've where we ticket has in pullback business better that surprisingly, concerning there from than CareCredit seeing you're and made date. the the discretionary largely the to great rest So in of on Not seen seeing the Again, business based some across space. that growth about investments broadly and is of positioned perspective, our still you are we've nothing

Yes.

a little add to bit maybe color. Just more

you when think diversity, look wellness sales think up I the and again, a inside year-over-year. X% the pets health and platform highlighted about

there well, doing So down pieces et portfolio cosmetics are cetera. X%, that are of that

expense of that's a things see some deferrable more dental, your which and of being talk You some we the is about for some, down. consumer high discretionary ticket

points platform, of you the XXX the I up the at again, last that card take basis from is the rest reason year. of So up which look out XX% news think to positive we that, is

value product, product proposition with Score the of this Brian the and highlights again, likability and Net So of those this resonates Promoter the consumers. brand the

-- it's see So medical procedures type into that growth where an and of I to that having lean our loan some part area company XX% portfolio back the And not again, the part of that think lift. the are we a again, we'll discretionary start still strong very see we'll more begin people continue and use, when to is to of strategy. certainly year-over-year

about could to happen I on a there? more little you represent bit might on stands sort guys I'm give Is it should you there Okay. And a are of that the a an on color preparing backdrop. what's can event then wondering, to for the of the fee on or us variety where that docket anything going with that late calendar know Great. update us we give outcomes an be looking litigation.

Yes, what motion hearing Most regard to is there the the certainly, I'd waiting was which John, for now, the waiting timetable core, was There's for in with the we're of and plaintiffs respond about to the right the decision the to held that that's one district say court a are plants motion. that in August. is front of the and venue standing on a that case. both not in for

So we're waiting for that.

would You parties go of to injunction or into or should not Fifth whether not levers from it around itself then action the whether not and side appeal there. lifted next of the or one injunction the take be whether be Circuit not or or the the that, motion they other who whether with itself would on the

waiting we're in again, I a think So game.

I to fair it's this wrong. think to anyone predict who's that trying say has been

prediction So we're business not in today. the

says what wait of we'll court operate as obviously, fee rule obviously late inherently feel to but there, the really, if the the And continue litigation. we go So business good will the that about it's merits litigation in. the we uncertain. But

pricing speculate $X. date is actions all think think I our if gone. on et come implementation rolled and to X. a was policy Obviously, we that what mean, entire going effective. it plan by done you assuming worst was case, October which you actually $X changes, out, an as cetera, if to were the is that John, become prepared this to X But when and October about enacted we're is and offset about It it, difficult is

again, And perspective. and pricing We the so of that out -- we But as they're performing luxury here we very quickly kind of expected. the as weren't have rolled . buy time, that's changes waiting. acted helpful and we from didn't

Jeff Stanley. take next Morgan We'll Adelson with from our question

right, growth just sounds I back slowed the hearing actions some outlook I'm maybe actions on have to you the in and loan year. intensity taken. earlier It the you of credit took credit like you've circle these wanted of if it the

for exiting you growth So rate, today, slowing would you the you're in looking itself low maybe at does to that of can look the what eventually getting timelines year? mean the think And for kind reverse for? you single-digit year keep of that next into we Or to reaccelerate? trend place that that just long-term this stance how about assuming should kind it growth back rate you're single-digit high take

the for question. Jeff, Thanks, Yes.

necessarily just strategy I thing point of when action, its take that time. single a The we aren't first a in actions to clarify, want lot

actually debt So we actions student that, for trips loans loans, on instance, today degree, took some of some strategy happen. around are the to that consolidation

just new they're So They're account to is ongoing. the actions the action. for They're not actions. same applicable that

taking are a today to or we idiosyncratic that based product actions the the again, upon performance partner are channel more So adjusted relative return.

I you coming issues in has 'XX actions down, out that back today right? little that that 'XX and credit period lower how lot it in inflation through you and on some than consumer, its of to down off. out, earlier, plays we'll from economics think bit have interest more play think when for Remember, more our end, to the the So a early a consumers. that the the of certainly rates [indiscernible] abates about Hopefully, of a some how the too a the length credit and pressure low but work it's putting credit system bit way [indiscernible] consumer coming much time, Brian affordability pressure of take the of system. transitory,

to seeing performance. across gives going to latter think that issuers we begins the unwind that credit again, we begin that's that certain X years, I in But that a of upon I receive, think potentially the as which the the industry, tailwind based of in restricted took us over of bit past little part a some can actions be you're to 'XX.

little a X% bit don't is the trend more to thing I this models to a where is built on deliver a in obviously think this and long-term growth. are see, probably trend So XX%. long-term but a framework good it's our period

$XXX to are but could sizing were my that fee PPPC in in your until you're just the the through million do not know the therefore follow-up versus us this the how -- as changes year? comes And off holding at talking you rule any maybe about tracking driver about I line, on of initial talk it? late as $XXX it the you million come around maybe And on through you point remind earlier of you

think is Yes. customer about The certainly talk as being lower, it, that's this BAU in attrition -- way I with bucket. line bucket about swing Jeff, I a between in

back feet, were to go think a PPPC actions the XX,XXX and really the sit and performing actions, we if us. say, I PPPC correspond little with But It's analysis So back bit a again, you'd say hasn't step line to generally look take are the and I'd at you for I better. earlier, just trough. as up point the again, of point neutrality brought the changed at in

really performed expectations, effective Page better talked So trajectory which as the hasn't there. when outlook about generally does, that has are And to in and line able reflected we'll to again, point because it we But the that as bit and in But a that in our things pushed our want out. is come does think . to neutrality we when I little rule than the point. place. be understand know haven't provide the XX. rule performing on core soon I certainly goes

time our at are for we And allotted questions.

have will time for We JPMorgan. question one with take We'll Rick Shane final more. our from

though, I reserve and the a if rate realize And rate, realized reserve exercise high. I is a at fourth exercise, Look, guiding we your for 'XX quarter back exercise. the quarter I'm at look third the that basically to it's that curious, on you're thought CECL a levels. thought on thought cyclical as guidance reserve

outlook. or the sort decline it pointed What have very a DeVries or out incremental cautious Mark like a of from at cautious that to feels mechanically XX you've of as driving and well? outlook gone what less days is information, changed basically more You

glad I'm clock Rick, the you back know really denominator. to your we Simply that Yes. put goes run question. to I it out. got ask

look Your like. denominator. loss losses really like quarter number right? your content can becomes quarter and should first right loss fourth you the the just mean model, now I is what what the most should certainly dollar It based, look in rule

your saying cautious calculation of see So just more any more different the fundamentally or trajectory, to trying says the over view we're mechanics don't something guide we that number? be of taking I loan to reserve it's more credit as that a end-of-period so an

And Synchrony's conclude you. Thank does call. conference this earnings

lines day. have your and disconnect at this a may wonderful time, You