Q3 2023 Synchrony Financial Earnings Call

Speaker 1: recorded. Currently all colors have been placed in a list and only mode. The call will be open for your questions following the conclusion of the management prepared remarks. If at any time you should need operator assistance, please press star zero. If you wish to ask a question following the prepared remarks, please press star one. I will now turn the call over to Katherine Miller, Senior Vice President of Investor Relations. Thank you. You may begin.

Operator: Recorded. Currently, all colors have been placed in a list and only mode. The call will be open for your questions following the conclusion of the management prepared remarks.

It really all colors have been placed in a listen only mode. The call will be opened for your questions. Following the conclusion of the managements prepared remarks, if at any time, you shouldn't need operator assistance. Please press star Zero, if you wish to ask a question. Following the prepared remarks. Please press star one I will now turn the call over to.

Operator: If at any time you should need operator assistance, please press star zero. If you wish to ask a question following the prepared remarks, please press star one.

Kathryn Miller: I will now turn the call over to Kathryn Miller, Senior Vice President of Investor Relations. Thank you. You may begin. Thank you. Good morning, everyone.

Kathryn Miller Senior Vice President of Investor Relations. Thank you you may begin.

Speaker 2: Thank you and good morning everyone. Welcome to our quarterly earnings conference call. In addition to today's press release, we have provided a presentation that covers the topics we plan to address during our call. The press release detailed financial schedules and presentation are available on our website, synchronyfinancial.com. This information can be accessed by going to the Investor Relations section of the website.

Thank you and good morning, everyone welcome to our quarterly earnings Conference call. In addition to today's press release, we have provided a presentation that covers the topics we plan to address during our call. The press release detailed financial schedules and presentation are available on our website synchrony financial Dot com. This information can be accessed by <unk>.

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

Going to the Investor Relations section of the website.

Speaker 2: Before we get started, I wanted to remind you that our comments today will include forward-looking statements. These statements are subject to risks and uncertainty, and actual results can differ materially. We list the factors that might cause actual results to differ materially in our SEC filings, which are available on our website. During the call, we will refer to non-GAAP financial measures in discussing the company's performance. You can find a reconciliation of these measures to GAAP financial measures in our materials for today's call.

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

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

Kathryn Miller: During the call, we will refer to non-gap financial measures in discussing the company's performance. You can find a reconciliation of these measures to gap financial measures in our materials for today's call.

During the call we will refer to non-GAAP financial measures in discussing the company's performance you can find a reconciliation of these measures to GAAP financial measures in our materials for today's call.

Speaker 2: Finally, Syncreen Financial is not responsible for and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties. The only authorized webcast are located on our website.

Finally, synchrony financial is not responsible for and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties.

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

The only authorized webcasts are located on our website.

Speaker 2: On the call this morning are Brian Doubles, Synchronies President and Chief Executive Officer, and Brian Wentzel, Executive Vice President and Chief Financial Officer. I will now turn the call over to Brian Doubles.

Brian Doubles: On the call this morning, our Brian Devils, Synchrony's President and Chief Executive Officer, and Brian Wensel, Executive Vice President and Chief Financial Officer. I will now turn the call over to Brian Devils. Thanks, Catherine. Good morning, everyone. Today's Synchrony reported strong third-quarter results, including net earnings of 628 million or $1.48 per lose share. A return on average assets of 2.3% and a return on tangible common equity of 22.9%. These results highlight the strength of Synchrony's differentiated model and the resiliency of our business through economic cycles.

On the call. This morning are Brian doubles, synchrony, as President and Chief Executive Officer, and Brian Wenzel Executive Vice President and Chief Financial Officer, I will now turn the call over to Brian doubles.

Speaker 3: Thanks, Catherine, and good morning, everyone. Today's increment report strong third quarter results, including net earnings of 628 million, or $1.48 per deluge share. A return on average assets of 2.3%, and a return on tangible common equity of 22.9%. These results highlight the strength of synchronized differentiated model and the resiliency of our business through economics like.

Thanks, Kathryn and good morning, everyone.

Today, <unk> reported strong third quarter results, including net earnings of $628 million or $1 48 per diluted share.

Churn on average assets of two 3% and return on tangible common equity of 22, 9%.

These results highlight the strength of synchrony as differentiated model and the resiliency of our business through economic cycles.

Brian Doubles: A diversified product suite and advanced digital capabilities enabled Synchrony to continue to deliver a consistently strong results in an ever-changing environment. We are increasingly at the center of customers every day financing needs and position as the partner of choice for retailers, merchants and providers alike as they seek enhanced value, greater utility and besting class experiences. We open 5.7 million new accounts in the third quarter and grew average active accounts by 6%.

Speaker 3: or diversified products suite and advanced digital capabilities enabled synchronies that continue to deliver a consistently strong results in an ever-changing environment. We are increasingly at the center of customers everyday financing needs and position as the partner of choice for retailers, merchants, and providers alike as they seek enhanced value, greater utility, and besting class experience.

Our diversified products and advanced digital capabilities enabled synchrony to continue to deliver consistently strong results in an ever changing environment. We are increasingly at the centre of customers' everyday financing needs and position as the partner of choice for retailers merchants and providers alike as they seek to enhance value.

Greater utility and best in class experiences.

We opened $5 7 million new accounts in the third quarter and grew average active accounts by 6%.

Speaker 3: We opened 5.7 million new accounts in the third quarter and grew average active accounts by 6%.

Brian Doubles: We continue to drive growth with our 47 billion of purchase volume representing a record third quarter and a 5% increase versus the prior year. This momentum is attesting into the power of our diversified portfolio. Health and wellness purchase volume grew 14% compared to last year reflecting broad-based growth in active accounts led by dental, pet and cosmetic. The 7% growth in digital purchase volume was driven by higher average active accounts as several of our newer programs continue to resonate with consumers.

Speaker 3: We continue to drive growth with our 47 billion of purchase volume representing a record third quarter and a 5% increase versus the prior year.

We continue to drive growth with our 47 billion of purchase volume, representing a record third quarter and a 5% increase versus the prior year.

Speaker 3: This momentum is a testament to the power of our diversified portfolio.

This momentum is a testament to the power of our diversified portfolio.

Speaker 3: Health and wellness purifying grew 14% compared to last year. Reflecting broad-based growth in active accounts led by dental, pet, and cosmetic.

Total loans purchase volume grew 14% compared to last year, reflecting broad based growth in active accounts led by dental Pat and cosmetic to.

Speaker 3: The 7% growth in digital purchase volume was driven by higher average active accounts as several of our newer programs continue to resonate with consumers. In diversifying value, purchasing grew 7%, reflecting growth in out-of-partner spend and strong retailer performance.

The 7% growth in digital purchase volume was driven by higher average active accounts as several of our newer programs continue to resonate with consumers and diversified value purchase volume grew 7% reflecting growth in auto partner spend and strong retailer performance.

Brian Doubles: In diversified value, purchasing grew 7% reflecting growth in out-of-partner spend and strong retailer performance. Lifestyle Participant Increase 8% Reflecting Growth and Average Transaction Values, and Outdoor Luxury. And in Home and Auto, Participant Remained Flat versus Last Year, as growth in commercial products, home specialty in the Auto Network, was generally offset by lower retail traffic, inferniture and electronics, and the impact of lower gas and lumber prices. Dual and co-branded cards account for 42% of total purchase volume in the quarter, and increased 13%, as several of our newer value propositions continue to drive greater customer engagement.

Speaker 3: Lifestyle purchase volume increased 8%, reflecting growth in average transaction values and outdoor luxury. And in home and auto, purchase volume remained flat versus last year as growth in commercial products, home specialty, and the auto network was generally offset by lower retail traffic in furniture and electronics and the impact of lower gas and lumber prices.

Lifestyle purchase volume increased 8%, reflecting growth in average transaction values and outdoor luxury.

And in home and auto purchase volume remained flat versus last year as growth in commercial products home specialty in the auto network was generally offset by lower retail traffic and furniture and electronics and the impact of lower gas in lumber prices.

Dual and co branded cards accounted for 42% of total purchase volume in the quarter and increased 13% as several of our newer value propositions continue to drive greater customer engagement synchrony.

Speaker 3: You will encode branded cards account for 42% of total purchase volume in the quarter, and increase 13%. As several of our newer value propositions continue to drive greater customer engagement.

Speaker 3: Secretly Ranger product and platform gives us a unique view into the health of the consumer. Through our monitoring, we see continued trends of behavior normalizing to pre-pandemic levels.

<unk> range of products and platforms gives us a unique view into the health of the consumer.

Brian Doubles: Synchrony's range of products and platforms gives us a unique view into the health of the consumer. Through our monitoring, we see continued trends of behavior normalizing to prepandemic levels. Across the portfolio, average transaction values leveled off to the quarter after modestly declining in the second quarter. Meanwhile, average transaction frequency, which had climbed throughout the year, showed some signs of stabilization toward the end of the quarter. Looking at our outer partner spend, our customers are becoming more selective in making larger purchases, including home furnishings and electronics, and spending less on travel.

Who are monitoring we see continued trends of behavior normalizing to pre pandemic levels.

Speaker 3: Across the portfolio average transaction values leveled off to the quarter after modestly declining in the second quarter. Meanwhile, average transaction frequency, which had climbed throughout the year, showed some signs of stabilization toward the end of the quarter.

Across the portfolio average transaction values leveled off through the quarter after a modestly declining in the second quarter.

Meanwhile, average transaction frequency, which had climbed throughout the year showed some signs of stabilization toward the end of the quarter.

Speaker 3: Looking at our out-of-partner spend, our customers are becoming more selective in making larger purchases, including home furnishings and electronics, and spending less on travel. Directionally we see broad trends that are in line with our expectations across the portfolio with slowing spend growth, normalization of payment rates, and growth in balances, which is driving higher, that interest income.

Looking at our auto partners spend our customers are becoming more selective in making larger purchases, including home furnishings, and electronics and spending less on travel.

Directionally, we see broad trends that are in line with our expectations across the portfolio with slowing spend growth normalization of payment rates and growth in balances, which is driving higher net interest income while on the extra one deposit data we track consumer savings balances remain approximately 8% above the average level in 2020 and.

Brian Doubles: Directionally, we see broad trends that are in line with our expectations across the portfolio, with slowing spend growth, normalization of payment rates, and growth imbalances, which is driving higher net interest income. While in the external deposit data we track, consumer savings balances remain approximately 8% above the average level in 2020.

Speaker 3: While in the external deposit data we track, consumer savings balances remain approximately 8% above the average level in 2020. In summary, these trends show a consumer that continues to benefit from a strong labor market while reverting gradually toward historical spend and pain and norms. As we closely monitor the health of the consumer, we also continue to develop and deploy the compelling products and value propositions that attract consumers and partners to synchronize.

In summary, these trends show a consumer that continues to benefit from a strong labor market, while reverting gradually toward historical spend and payment norms as we closely monitor the health of the consumer. We also continued to develop and deploy the compelling products and value propositions that attract consumers and partners to synchrony.

Brian Doubles: In summary, these trends show a consumer that continues to benefit from a strong labor market, while reverting gradually toward historical spend and payment norms. As we closely monitor the health of the consumer, we also continue to develop and deploy the compelling products and value propositions that attract consumers and partners to synchrony. We announced earlier this month that both the PayPal and Venmo cards can now be provisioned in the Apple Wallet, representing our latest enhancement as we evolve to get the demands of our increasingly digital first customers.

Speaker 3: We announced earlier this month that both the PayPal and Venmo cards can now be provisioned in the Apple wallet. Representing our latest enhancement as we evolve to make the demands of our increasingly digital first customers. Singrede's journey began with indoor financing options, which have long been valued tools for both retailers and consumers to build loyalty and drive value.

We announced earlier this month at both the Paypal and Venmo cards can now be provision in the Apple wallet, representing our latest enhancement as we evolve to meet the demands of our increasingly digital first customers Synchroneyes journey began within store financing options, which have long been value tools for both retailers and consumers to build loyalty and drive value.

Brian Doubles: Synchrony's journey began within store financing options, which have long been valued tools for both retailers and consumers to build loyalty and drive value. Over time, we've blonde utility of these products through our dual and co-brand card strategies, which enable customers to make out-of-partner purchases, accumulate rewards, and extract even greater value. And increasingly, our customers are taking that engagement even further. A digital wallets enable everyday use functionality, and extend our leading value propositions well beyond the store.

Speaker 3: Over time, we've brought new utility of these products through our dual and co-brand card strategies, which enable customers to make out-of-partner purchases, accumulate rewards, and extract even greater value. And increasingly, our customers are taking that engagement even further. As digital wallets enable everyday use functionality, and extend our leading value propositions well beyond the store. Active wallet users are up over 45% year to date, and sales on wallets are up over 70%.

Over time, we broaden the utility of these products through our dual and co brand card strategies, which enable customers to make out a partner purchases accumulate rewards and extract even greater value and.

And increasingly our customers are taking that engagement, even further as digital wallets enable everyday use functionality and extend our leading value propositions well beyond the store at.

Brian Doubles: Active Wallet users are up over 45% year to date, and failed on wallets are up over 70%. This trend is more than a simple technological enhancement. Synchrony's strategy to deliver enhanced utility and best-in-class experiences requires seamlessly integrated tailored solutions, and our investments in technology allow us to meet this demand. When our customers combine the broad utility of our products and services with our digital wallet functionality, the impact is clear. Our digital wallets are spend nearly twice as much and have over double the transactions on average.

<unk> wallet users are up over 45% year to date and sales on walls are up over 70%.

Speaker 3: This trend is more than a simple technological enhancement. Synchronized strategy to deliver enhanced utility and best-in-class experiences requires seamlessly integrated tailored solutions and our investments in technology allows to meet this demand.

This trend is more than a simple technological enhancement synchrony.

Synchrony strategy to deliver enhanced utility and best in class experiences requires seamlessly integrated tailored solutions and our investments in technology allow us to meet this demand.

When our customers combine the broad utility of our products and services with our digital wallet functionality the impact is clear.

Our digital wallet users spend nearly twice as much and have over double the transactions on average or.

Speaker 3: More broadly, we see the impact of expanded product utility in our results. Out-of-partner spend continued its outside growth this quarter of 12% compared to last year. We continue to develop our solution suite and extend the reach of our products, meeting consumer demand for fast and secure shopping and opening new opportunities for customers to engage with their favorite brands.

Brian Doubles: More broadly, we see the impact of expanded product utility in our results. Out-of-partner spend continued its outside growth this quarter of 12% compared to last year. We continue to develop our solutions suite and extend the reach of our products, meeting consumer demand for fast and secure shopping, and opening new opportunities for customers to engage with their favorite brands. In health and wellness, we were pleased to announce partnerships with veterinary hospitals at three additional universities.

More broadly we see the impact of expanded product utility in our results out.

Auto partner spend continued its outsized growth this quarter up 12% compared to last year.

We continue to develop our solutions suite and extend the reach of our products meeting consumer demand for fast and secure shopping and opening new opportunities for customers to engage with their favorite brands.

Speaker 3: In health and wellness, we were pleased to announce partnerships with veterinary hospitals at three additional universities. Care credit is now accepted at 95 percent of the nation's public veterinary university hospitals in addition to more than 25,000 provider locations, expanding access to flexible financing tools that enable a lifetime of care for all pets.

In health and wellness, we were pleased to announce partnerships with veterinary hospitals at three additional universities.

Brian Doubles: Care credit is now accepted at 95% of the nation's public veterinary university hospitals, in addition to more than 25,000 provider locations, expanding access to flexible financing tools that enable a lifetime of care for all pets. The power of synchronous continually evolving model, supported by our focus on technological innovation, continues to position synchronous as the partner of choice, as we deliver digitally powered experiences and compelling value for our many stakeholders.

Sure credit is now accepted at 95% of the nation's public veterinary University hospitals. In addition to more than 25000 provider locations expanding access to flexible financing tools that enable a lifetime of care for our pets.

Speaker 3: The power of synchronies continually evolving model supported by our focus on technological innovation continues to position synchrony as the partner of choice as we deliver digitally powered experiences and compelling value for many stakeholders. With that, I'll turn the call over to Brian .

The power of Synchrony is continually evolving model supported by our focus on technological innovation continues to position synchrony as the partner of choice as we delivered digitally powered experiences and compelling value for our many stakeholders.

And with that I'll turn the call over to Brian .

Brian Wenzel: And with that, I'll turn the call over to Brian. Thanks, Brian, and good morning, everyone. Secretary's third quarter results reflected the strength of our financial model, demonstrated through our consistent growth and strong risk-adjusted returns. The compelling value propositions of our broad product suite continue to resonate with our 70-plus million customers and drove broad-based growth across our South platforms. Ending more receivables grew 14% versus last year, benefiting from the combination of approximately 120 basis points decrease in payment rate versus last year, and 5% growth in purchase buying.

Thanks, Brian and good morning, everyone <unk> third quarter results reflect the strength of our financial model demonstrated through our consistent growth and strong risk adjusted returns.

Speaker 3: Thanks, Brian , and good morning, everyone. It's been three-third quarter results reflected the strength of our financial model. Demonstrates for our consistent growth and strong risk-adjusted returns.

Speaker 3: The compelling value propositions of our broad product suite continue to resonate with our 70 plus million customers and drove broad-based growth across our sales platforms. Ending when receivables grew 14% versus last year, benefiting from the combination of approximately 120 basis point decrease in payment rate versus last year and 5% growth in purchase volume. Our third quarter period was 16.3%.

The compelling value propositions of our broad product suite continue to resonate with our 70 plus million customers and drove broad based growth across our sales platforms ending while receivables grew 14% versus last year benefiting from the combination of approximately 120 basis point decrease in <unk> versus last year and 5% growth in purchase.

By our third quarter bakery was 16, 3% still remains approximately 130 basis points higher than our five year pre pandemic historical average net interest income increased 11% to $4 4 billion, reflecting 21% growth in interest in fees. The increase in interest in fees was due to the combined impact of higher.

Brian Wenzel: Our third quarter pay rate was 16.3%, so remains approximately 130 basis points higher than our five-year pre-pandemic historical average. The interest income increased 11% to 4.4 billion, reflecting 21% growth in interest in fees. The increase in interest in fees was due to the combined impact of higher long receivables and benchmark rates, as well as lower payment rate. Our net interest margin was 15.36%, declined 16 basis points compared to the prior year, as higher funding costs more than offset the benefit of higher yields and fair will asset mix.

Speaker 3: still remains approximately 130 basis points higher than our five year pre pandemic historical average. The interest income increased 11% to 4.4 billion, reflecting 21% growth in interest in fees.

Speaker 3: The increase in interest in fees was due to the combined impact of higher loan receivables and benchmark rates as well as lower payment rates. Our net interest margin was 15.36% to client 16 basis points compared to the prior year, as higher funding costs more than offset the benefit of higher yields and fair will asset

Loan receivables and benchmark rates as well as lower payment rate. Our net interest margin was 53, 6% declined 16 basis points compared to the prior year as higher funding costs more than offset the benefit of higher yields and favorable asset mix, specifically loan receivable yield grew 140 basis points and.

Speaker 3: Specifically, low receivable yield grew 114 basis points and contributed 95 basis points to an interest margin.

Brian Wenzel: Specifically, low receivables yield grew 114 basis points, and contributed 95 basis points to net interest margin. Higher liquidity portfolio yield contributed an additional 46 basis points to net interest margin. Interimix of interest earning assets improved malicious margin by approximately 28 basis points, reflecting our strong growth in low receivables. But these gains were more than offset by higher interest bearing liability costs, which increased 229 basis points to 4.34% and reduced net interest margin by 185 basis points.

We did 95 basis points to net interest margin higher liquidity portfolio yield contributed an additional 46 basis points to net interest margin and our mix of interest earning assets improved net interest margin by approximately 28 basis points, reflecting our strong growth in loan receivables, but these gains were more than offset by higher interest bearing liability costs.

Speaker 3: Higher liquidity portfolio yield contributed an additional 46 basis points to net interest margin.

Speaker 3: And our mix of interest earning assets improved managed to smart by approximately 28 basis points reflecting our strong growth in loan receivables. But these gains were more than all set by higher interest bearing liability costs, which increased 229 basis points to 4.34% and reduced managed to smart by 185 basis points.

Which increased 229 basis points to 434% and reduced net interest margin by 185 basis points <unk> of $979 million in the third quarter were $4 or 4%.

Speaker 3: RSAs of $979 million in the third quarter were 4.04% of average loan receibles.

Brian Wenzel: RSAs of $959 million in the third quarter were 4.04% of average loan receivables. A $78 million decline from the prior year, reflecting higher net charge offs, partially offset by higher net interest income. RSAs continue to perform as designed. They provide a critical alignment with their partners as we navigate the evolving environment together and support greater stability and returns. Provision for credit losses increased to $1.5 billion, reflecting higher net charge offs, and a $372 million reserve bill, which largely reflected the growth in low receivables.

<unk> average loan receivables of $78 million decline from the prior year, reflecting higher net charge offs, partially offset by higher net interest income. Our RSA has continued to perform as designed they provided critical alignment with our partners as we navigate the evolving environment together and support greater stability in our returns provision for <unk>.

Speaker 3: A $70 million decline from the prior year reflect the higher net charge offs, partially offset by higher net interest income. RSAs continue to perform as designed. They provide a critical alignment with our partners as we navigate the evolving environment together and support greater stability and our returns.

Speaker 3: Provision for credit losses increased to $1.5 billion reflecting higher net charge loss and a $372 million reserve bill, which largely reflected the growth in long receables. Other expenses grew 8% to $1.2 billion, primarily driven by the growth related items, as well as technology investments in operational loss.

Fire losses increased to $1 5 billion.

Reflecting higher net charge offs, and a $372 million reserve build which largely reflected the growth in loan receivables. Other expenses grew 8% to $1 2 billion.

Brian Wenzel: Other expenses grew 8% to $1.2 billion, primarily driven by the growth related items, as well as technology investments and operational losses. Our efficiency ratio for the third quarter improved by approximately 330 basis points, the period of last year to 33.2%.

Primarily driven by the growth related items as well as technology investments and operational losses, our efficiency ratio for the third quarter improved by approximately 330 basis points compared to last year to 33, 2%.

Speaker 3: Our efficiency ratio for the third quarter improved by approximately 330 basis points the paragol last year to 33.2%.

Speaker 3: Summarizing our financial results, security-jerry net earnings of $628 million, or $1.48 per dilute share. It returned an average asset to 2.3%, and returned tangible common equity of 22.9%. Next, I'll cover our key credit trends on slide eight. Our delinquency performance in the third quarter continued to reflect normalization towards pre-pandemic behavior with both the 30 plus and 90 plus delinquency rates approaching 2019 levels.

Summarizing our financial results synchrony generated net earnings of $628 million or $1 48 per diluted share.

Brian Wenzel: Summarizing our financial results, 50 Jerry net earnings of $628 million, or $1.48 per dilute share. It returned an average asset to 2.3% and returned tangible common equity of 22.9%.

Return on average assets of two 3% and return on tangible common equity of 22, 9% next I'll cover our key credit trends on slide eight our delinquency performance in the third quarter continued to reflect normalization towards prepay their behavior with both the 30, plus and 90 plus delinquency rates approaching.

Brian Wenzel: Next, I'll cover our key credit trends on slide 8. Our delinquency performance in the third quarter continued to reflect normalization towards pre-pandemic behavior with both the 30 plus and 90 plus delinquency rates approaching 2019 levels. R30 plus Lincoln Surray was 4.40% compared to 3.28% last year, and approximately 7 basis points lower than their quarter of 2019. R90 plus Lincoln Surray was 2.06% versus 1.43% in the prior year, and approximately 1 basis point lower than our third quarter of 2018.

2019 levels are.

Speaker 3: Our 30 plus Lincoln survey was 4.40% compared to 3.28% last year. And approximately seven basis points lower than their quarter of 2019. Our 90 plus Lincoln survey was 2.06% versus 1.43% in the prior year. And approximately one basis point lower than our third quarter of 2018.

Our 30, plus delinquency rate was four 4% compared to $3 two 8% last year and approximately seven basis points lower than third quarter of 2019, our 90, plus delinquency rate was two 6% versus 143% in the prior year and approximately one basis point lower than our third quarter 2019.

Speaker 3: Our net charge offer was 4.600% versus 3% last year. Syncry remains approximately 115 basis points below the midpoint of our underwriting target of 5.5 to 6% where our risk adjusted returns are more fully optimized.

Our net charge off rate was four 6% versus 3% last year synchrony remains approximately 115 basis points below the midpoint of our underwriting target of five 5% to 6% where our risk adjusted returns are more fully optimized.

Brian Wenzel: Our net charge offer was 4.60% versus 3% last year. Synchrony remains approximately 115 basis points below the midpoint of our underwriting target of 5.5% to 6% where our risk adjusted returns are more fully optimized. Overall, our credit performance remains within our expectations and has benefited from investments in our dance underwriting platform as we expect to continue on attack towards our long-term operating targets. Focusing on our more recent businesses, they continue to perform in line with those from 2019, where our pleas with how these businesses are developing, where continuously monitoring and portfolio have implemented further credit actions, including some tightening of our origination criteria.

Speaker 3: Overall, our cray performance remains within our expectations and has benefited from investments in our dance underwriting platform as we expect to continue on a path towards our long-term operating target.

Overall, our credit performance remains within our expectations and has benefited from investments in our advanced underwriting platform as we expect to continue on our path towards our long term operating targets.

Speaker 3: Focusing on our more recent vintages, they continue to perform in line with those from 2019. Where a police with how these vintages are developing, where it continuously monitoring our portfolio have implemented further credit actions, including some tightening of our origination criteria.

Focusing on our more recent vintages. They continue to perform in line with those from 2019, while we're pleased with how these vintages are developing we're continuously monitoring our portfolio and has implemented further credit actions, including some tightening of our origination criteria. These proactive refinements are intended to position our business for 2024 and beyond.

Brian Wenzel: These proactive refinements are intended to position our business for 2024 and beyond. Moving to reserves, our allowance or credit losses as a percent of loan receibles with 10.40% of 6 basis points from 10.34% in the second quarter. The reserve bill of $372 million in the quarter was largely driven by receibles growth.

Speaker 3: These proactive refinements are intended to position our business for 2024 and beyond. Movie.

Moving to reserves, our allowance for credit losses as a percent of loan receivables was 10, 4% up six basis points from 10, three 4% in the second quarter.

Speaker 3: Our launcher carrier losses as a percent of home receivables with 10.40 percent of six basis points from 10.34 percent in the second quarter.

Speaker 3: The reserve bill of $372 million in the quarter was largely driven by receibles grounds.

The reserve build of $372 million in the quarter was largely driven by receivables growth.

Brian Wenzel: Turn this slide 10, our stable funding model and strong management of capital liquidity continue to position Synchrony well for any environment. In the third quarter, customers continue to be attracted to our consumer bank offerings as we grew both direct and broker deposits to fund our anticipated receibles growth. Deposits represented 84% of our total funding at quarter end. The remainder of our funding stack is comprised of securitized and unsecured debt at 7% and 9% of our funding respectively.

Turning to slide 10, our stable funding model and strong management of capital and liquidity continued position synchrony well for any environment.

Speaker 3: Our stable funding model and strong management of capital liquidity continue to position security well for any environment.

Speaker 3: In the third quarter, customers continue to be attracted to our consumer bank law.

In the third quarter customers continue to be attracted to our consumer bank offerings. As we grew both direct and broker deposits to fund our anticipated receivables growth deposits represented 84% of our total funding at quarter end. The remainder of our funding stack is comprised of securitized and unsecured debt at 7% and 9% of our funding respect.

Speaker 3: as we grew both direct and broker deposits to fund our anticipated receibles growth. Deposits represented 84% of our total funding at quarter-end.

Speaker 3: The remainder of our funding snack is comprised of securitized and unsecured debt. At 7% and 9% of our funding were specively. We completed a $1 billion securitized issue into the quarter and will continue to be active in both markets as conditions allow.

<unk>, we completed a $1 billion securitized issuance in the quarter and will continue to be active in both markets as conditions allow total liquidity, including Undrawn credit facilities was $20 5 billion up.

Brian Wenzel: We completed a $1 billion securitized issuance in the quarter and will continue to be active in both markets as conditions allow. Total liquidity, including underline credit facilities with $20.5 billion, up $275 million from last year. At quarter end, the liquidity represented 18.2% of total assets down 192 basis points from last year as we manage our liquidity portfolio and fund strong, long receibles growth.

Speaker 3: Total equity, including under on credit facilities, was $20.5 billion, up $275 million from last year. At quarter end, the equity represented 18.2% of total assets.

Up $275 million from last year at quarter end liquidity represented 18, 2% of total assets down 192 basis points from last year as we manage our liquidity portfolio and funds strong loan receivables growth moving onto our capital ratios as a reminder, we elected to take the bell.

Speaker 3: down 192 bases points from last year as we manage our liquidity portfolio and fund strong loan receibles growth. Moving on to our cast.

Brian Wenzel: Moving on to our capital ratios. As a reminder, we elected to make the benefit of the Cecil transition rules issued by the joint federal banking agencies. Synchrony made its annual transition adjustment of approximately 60 basis points in January and will continue to make annual adjustments of approximately 60 basis points each year until January of 2025. In fact, the Cecil has already been recognized in our income statement of balance. Under the Cecil transition rules, we entered third quarter of the CET-1 ratio of 12.4%.

Speaker 3: As a reminder, we elected to make the benefit of the Cecil transition rules issued by the joint federal banking aid.

<unk> of the seasonal transition rules issued by the joint federal banking agencies.

Speaker 3: Security made its annual transition adjustment of approximately 60 basis points in January , and will continue to make annual adjustments of approximately 60 basis points each year until January of 2025. The impact of Cecil has already been recognized in our income statement of balance sheet. Under the Cecil transition rules, we entered third quarter of the CET-1 ratio of 12.4%.

<unk> has annual transition adjustment of approximately 60 basis points in January and we will continue to make annual adjustments of approximately 60 basis points. Each year until January of 2025, the impact of seasonal has already been recognized in our income statement or balance sheet under the seasonal transition rules. We ended the third quarter of the CET one ratio.

<unk> of 12, 4% 190 basis points lower than last year's level of 14, 3%. The tier one capital ratio was 13, 2% under the seasonal transition rules compared to 15, 2% last year. The total capital ratio decreased 120 basis points to 53%.

Speaker 3: 190 basis points lower than last year's level of 14.3%. The Tier 1 capital ratio was 13.2% under the Cecil transition rules compared to 15.2% last year. The total capital ratio decreased 120 basis points to 15.3%.

Brian Wenzel: 190 basis points lower than last year's level of 14.3%. The Tier 1 capital ratio was 13.2% under the Cecil transition rules, compared to 15.2% last year. The total capital ratio decreased 120 basis points to 15.3%. And the Tier 1 capital plus reserve ratio on a fully phased and basis decreased to 22.5% compared to 24.1% last year. During the third quarter, we returned $254 million to our shareholders, consisting of $159 a share of purchases and $104 million of common stock dividends.

Speaker 3: And the Tier 1 capital plus reserve ratio on a fully phased invasive decreased to 22.5% compared to 24.1% last year.

And the tier one capital plus reserves ratio on a fully phased in basis decreased to 22, 5% compared to 24, 1% last year.

Speaker 3: During the third quarter, we returned $254 million to our shareholders, consisting of $150 million of shareholder purchases and $104 million of common stock dividends.

During the third quarter, we returned $254 million to our shareholders.

Assisting with $150 million of share repurchases and $104 million of common stock dividends.

Brian Wenzel: Williams. And at the end of the quarter, we had $850 million remaining in our shareware purchase authorization. Synchrony needs well-positioned return capital shareholders as guided by our business performance, market conditions, regulatory restrictions, and subject to our capital plan. We will also continue to seek opportunities to complete the development of a capital structure through the issue of additional preferred stock as conditions allow.

Speaker 3: And at the end of the quarter, we had 859 remaining in our share with purchase authorization.

And at the end of the quarter, we had $850 million remaining in our share repurchase authorization.

Secondly needs well position to return capital to shareholders as guided by our business performance market conditions regulatory restrictions and subject to our capital plan. We will also continue to seek opportunities to complete the development of our capital structure through the issuance of additional preferred stock as conditions allow now.

Speaker 3: Secretary needs well-positioned return capital shareholders as guided by our business performance, market conditions, regulatory restrictions, and subject to our capital plan. We'll also continue to seek opportunities to complete the development of a capital structure through the issue of additional preferred stock as conditions allow. Now, please refer to slide 11 of the presentation from work detail on an outlook for 2023.

Brian Wenzel: Now, please refer to slide 11 of the presentation from more detail on an outlook for 2023. We expect our ending loan receivables to grow approximately 11% versus last year, reflecting the combined impact of payment rate moderation and slowing purchasing growth. We expect a full-year net interest margin of approximately 15.15%. The interest margin and a third quarter benefit from strong growth in interest in fees and receivables, in addition to payment rate moderation and lower deposit betas.

Please refer to slide 11 of the presentation for more detail on our outlook for 2023, we expect our ending loan receivables to grow approximately 11% versus last year, reflecting the combined impact of payment rate moderation and slowing purchase volume growth. We expect our full year net interest margin of approximately 15, 15%.

Speaker 3: We expect our ending room receivables to grow a approximately 11% versus last year, reflecting the combined impact of pain and pain moderation and slowing, purifying growth.

Speaker 3: We expect a full year net interest margin of approximately 15.15%. The interest margin and a third quarter benefit from strong growth in interest and fees and receibles in addition to payment rate moderation and lower deposit betas. In the fourth quarter, we expect net interest margin to be impacted by higher average liquidity to pre-fund seasonal loan receibles growth impacting the mix of interest learning assets. Higher deposit betas driven by competition and movement in benchmark rates.

The interest margin in the third quarter benefited from strong growth in interest in fees and receivables. In addition to payment rate moderation and lower deposit betas in the fourth quarter. We expect net interest margin to be impacted by higher average liquidity to pre fund seasonal loan receivables growth impacting the mix of interest earning assets.

Brian Wenzel: In a fourth quarter, we expect an interest margin to be impacted by higher average liquidity to pre-fund seasonal loan receivables growth, impacting the mix of interest-earning assets. Higher deposit betas driven by competition and movement in benchmark rates, and interest in fee growth, partially offset by rising reversals. From a credit standpoint, the liquidity nearly reached 2019 levels a quarter end and should follow seasonal trends from this point. With the increased visibility into the liquidity performance this year, we are tightening our forecasted net charge-off rate to approximately 4.85%.

Higher deposit beta is driven by competition and movement in benchmark rates and interest and fee growth, partially offset by rising reversals from a credit standpoint delinquency nearly reached 2019 levels at quarter end and should follow seasonal trends from this point with the increases ability into delinquency performance. This year, we are tightening our <unk>.

Speaker 3: An interesting fee growth partially offset by rising reversals.

Speaker 3: From a credit standpoint, the linkancy nearly reached 2019 levels a quarter end and should follow seasonal trends from this point. With the increased visibility into the liquidity performance this year, we are tightening our forecasted net charge offer rate to approximately 4.85%. We continue to anticipate our loss rate reaching its fully normalized level between 5.5 and 6% on an annual basis in 2024. And as we noted, we will continue the monitor and position the portfolio for 2024 and beyond.

Forecasted net charge off rate to approximately four 5% we continue to anticipate our loss rate, reaching a fully normalized level between five five and 6% on an annual basis in 2024 and as we noted we will continue to monitor and position the portfolio for 2024 and beyond.

Brian Wenzel: We continue to anticipate our loss rate reaching its fully normalized level between 5.5 and 6% on an annual basis in 2024. As we know, we will continue to monitor and position the portfolio for 2024 and beyond. We expect the RSA to trend at the low end of our prior outlook and be approximately 3.95% of average loan receivables for the full year. This improved outlook reflects the impacts of the continued part of normalization, lower net interest margin, and the mix of our loan receivables growth.

Speaker 3: We expect the RSA to trend at the low end of our prior outlook and be approximately 3.95% of average loan receivables for the four year.

We expect the RSA trend at the low end of our prior outlook and be approximately 395% of average loan receivables for the full year.

Speaker 3: This approved dialogue reflects the impacts of the continued depritonormalization, lower net interest margin, and the mix of our own receivables growth.

This improved outlook reflects the impacts of the continued credit normalization lower net interest margin and the mix of our loan receivables growth.

Speaker 3: And as we generate higher than a suspended growth, we are maintaining our expectation for operating expenses at approximately 1.15 billion per quarter. While we continue to make selective investments in our business, we're committed to delivering operating leverage for the full year.

Brian Wenzel: And as we generate higher than anticipated growth, we are maintaining our expectation for operating expenses at approximately 1.15 billion per quarter. While we continue to make selective investments in our business, we are committed to delivering operating leverage for the full year.

And as we generate higher than anticipated growth, we are maintaining our expectation for operating expenses at approximately 115 billion per quarter, while we continue to make selective investments in our business, we're committed to delivering operating leverage for the full year at.

Speaker 3: As sacred and continues to leverage our course grants, our advanced data analytics are a disemrored approach to underwriting and credit management and our stable funding model where confident our ability to execute our key strategic priorities and deliver market leading returns over long term. I'll now turn the call back over to Brian for his closing thoughts.

Brian Doubles: As sacredly continues to leverage our course grants, our advanced data analytics, our digital approach to underwriting and credit management, and our stable funding model, we are confident in our ability to execute our key strategic priorities and deliver market-leading returns over the long term, and now turn the call back over to Brian for his closing thoughts. Thanks, Brian. Sincering continues to demonstrate both the agility and consistency of our differentiated model. We remain focused on optimizing the outcomes for our many stakeholders, by closely managing the drivers of our business which we control, and intently monitoring and preparing for those which we do not. We are prioritizing sustainable growth to deliver appropriate risk-adjusted margins through changing market conditions.

As synchrony continues to leverage our core strengths, our advanced data analytics, our disciplined approach to underwriting and credit management and our stable funding model, we're confident in our ability to execute on our key strategic priorities and deliver market leading returns over long term I will now turn the call back over to Brian for his closing thoughts.

Speaker 3: Thanks, Brian . Syncry continues to demonstrate both the agility and consistency of our differentiated model. We remain focused on optimizing the outcomes for our many stakeholders by closely managing the drivers of our business with weak control and intently monitoring and preparing for those which we do not. We are prioritizing sustainable growth to deliver appropriate risk-adjusted margins through changing market conditions.

Thanks, Brian .

Synchrony continues to demonstrate both the agility and consistency of our differentiated model, we remain focused on optimizing the outcomes for our many stakeholders by closely managing the drivers of our business, which we control and intently monitoring and preparing for those which we do not we are prioritizing sustainable growth to deliver appropriate.

Adjusted margins through changing market conditions.

Speaker 3: We are poorly investing in the future and long-term growth of the business. So we are able to exceed the increasingly digital demands of our consumers.

Brian Doubles: We are poorly investing in the future and long-term growth of the business, so we are able to exceed the increasingly digital demands of our consumers. And we are delivering on our financial commitments, even as we ready the business fund evolving environment, to ensure our continued ability to drag long-term value into the future.

We are prudently investing in the future and long term growth of the business. So we were able to exceed the increasingly digital demands of our consumers.

Speaker 4: And we are delivering on our financial commitments, even as we ready the business fund evolving environment, to ensure our continued ability to drive long-term value into the future.

And we are delivering on our financial commitments, even as we ready the business front evolving environment to ensure our continued ability to drive long term value into the future.

Speaker 2: With that, I'll turn the call back to Catherine to open the Q&A. That concludes our prepared remarks. We will now begin the Q&A session so that we can accommodate as many of you as possible. I'd like to ask the participants to please limit yourself to one primary and one follow-up question. If you have additional questions, the Investor Relations team will be available after the call. Operator, please start the Q&A session.

Kathryn Miller: With that, I'll turn the call back to Kathryn to open the Q&A.

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

Kathryn Miller: That concludes our prepared remarks. We will now begin the Q&A session so that we can accommodate as many of you as possible. I'd like to ask the participants to please limit yourself to one primary and one follow-up question. If you have additional questions, the investor relations team will be available after the call.

That concludes our prepared remarks, we will now begin the Q&A session. So that we can accommodate as many of you as possible I'd like to ask the participants to please limit yourself to one primary and one follow up question.

If you have additional questions the investor relations team will be available after the call.

Operator, please start the Q&A session.

Operator: Operator, please start the Q&A session. At this time, if you wish to ask a question, please press star one on your telephone keypad. You may remove yourself from the keypad pressing star two. Please submit yourself to one question and one follow-up.

Speaker 1: Certainly, at this time, if you wish to ask a question, please press star one on your telephone keypad. You may remove yourself from the keyvibrating star two. Please send me yourself to one question and one follow up. We'll take a first question from Ryan Nash with Goldman Sachs. Please go ahead.

At this time, if you wish to ask a question. Please press star one on your telephone keypad.

Yourself from the queue by pressing star to please limit yourself to one question and one follow up well take our first question from Ryan Nash with Goldman Sachs. Please go ahead.

Ryan Nash: We'll take a first question from Ryan Nash with Goldman Sachs. Please go ahead. Hey, good morning, everyone. Hey, Ryan. Morning. Maybe a two-part question on credit. First, can you give the full-year guide implies a decent acceleration in charge of performance in the fourth quarter, so you can maybe just talk a little bit about what's driving that. And then second, maybe just tease out what gives you confidence that we're going to follow seasonal patterns from here, given a handful of moving pieces, inflation, resumption of student loan payments.

Hey, good morning, everyone.

Speaker 5: Hey Ryan. Where are you Ryan? Um, maybe a two part question on credit. First, can you, if the full year guide implies a decent acceleration in charge of performance in the fourth quarter, so you can maybe just talk a little bit about what's driving that.

Good morning, Ryan.

Maybe a two part question on credit first can you give the full year guide implies a decent acceleration in charge off performance in the fourth quarter. So you can maybe just talk a little bit about what's driving that and then second maybe just tease out what gives you confidence that we're going to follow seasonal patterns from here given.

Ryan Nash: And then obviously, we have growth mass impacts from 22 and 23. But offsetting that, you guys obviously were one of the more conservative and underwriting, given some of the tightening that you had done. So can you maybe just walk through all of those moving pieces and what you think it means for the trajectory of credit losses? Thank you.

Speaker 5: And then second, maybe just tease out, you know, what gives you confidence that we're going to follow seasonal patterns from here, given, you know, a handful of moving pieces in Flation, resumption of student loan payments. And then obviously we have the growth mass impacts from 22 and 23. You know, but offsetting that, you guys obviously were one of the more conservative and underwriting given some of the tightening that you had done. So can you maybe just walk through all of those moving pieces and what you think it means for the trajectory of credit losses? Thanks.

A handful of moving pieces inflation resumption of student loan payments and then obviously we have to grow.

Matt impacts from 'twenty, two and 'twenty three.

Setting that you guys. Obviously, we're one of the more conservative in underwriting given some of the tightening that you had done. So can you maybe just walk through all of those moving pieces and what do you think it means for the trajectory of credit losses.

Sure I'll try to get to all those big questions. Ryan. So the first one as you think about the fourth quarter. When you look at the dollar value of over $2 billion sitting in the 90 plus delinquency bucket.

Speaker 3: Sure, I'll try to get to all those many questions Ryan. So the first one is you think about the fourth quarter. Me look at the dollar value. It's over $2 billion sitting in the 90 plus the Lakeland Sea bucket. So I think if you go back and look at the hell.

Brian Wenzel: Sure, I'll try to get to all those many questions, Ryan. So the first one is you think about the fourth quarter. Me look at the dollar value. Over $2 billion sitting in the 90 plus the frequency bucket. So I think if you go back and look at the how it rolls, you get a pretty good sense what we see from the fourth quarter. I'd say that the frequency performance has been consistent really throughout 2023.

So I think if you go back and look at the how it rolls.

Speaker 3: You get a pretty good sense what we see from the fourth quarter. I'd say that the frequency performance has been consistent really throughout 2023. And really what you have here is a factor of our entry rate into the link. Let's see still below the pandemic period. So it's back, you know, it's lower than 2018, 2019, which makes collections a little bit tougher on the stuff that does roll. And so that's how I think about the fourth quarter. When you start to think.

You get a pretty good sense of what we see from the fourth quarter.

The delinquency performance has been consistent.

Really throughout 2023, and really what you have here is a factor of our entry rate into delinquency is still below the the pandemic period. So it's back it's lower than 2018, 2019, which makes collections a little bit tougher on the stuff that does rule and so that's how I think about the fourth quarter when you.

Brian Wenzel: And really, what you have here is a factor of our entry rate into the link. Let's see is still below the pandemic period. So it's back, you know, it's lower than 2018, 2019, which makes collections a little bit tougher on the stuff that does roll. And so that's how I think about the fourth quarter.

Brian Wenzel: When you start to think about 2024 and really how we get comfortable around. You know, crab forms a handful of things that sit back and say number one, we didn't court in the credit box, right? So we don't open and close in our partners. So our underwriting was consistent into some degree in the early part of the pandemic. We did not shrink as much. We did not expand as much when everyone was trying to, you know, make up for the last vintage.

Start to think about.

Speaker 4: 2024 and really how we get comfortable around.

2024, and really how do we get comfortable around.

Speaker 4: you know, crab forms a handful of things I took back and say. Number one, we didn't accord you in the credit box, right? So we don't open and close in our partners. So our underwriting was consistent and into some degree, in the early part of the pandemic.

<unk>, a handful of things that sit back and say number one we didn't accordion the credit box rates. So we don't open and close in on our partners on so our underwriting was consistent and to some degree in the early part of the pandemic we.

Speaker 4: uh... we did not uh... strength is much we've not expanded much when i've almost trying to you know make up for the lost images so we can't get consistent throughout that period number one number two or prism of ant's underwriting tools

We did not shrink as much would not expand as much when everyone was trying to.

Make up for the lost vintages, so we kind of kept consistent throughout that period number one number two our prism advanced underwriting tools allows us to be less score reliant and use the data from our partners. We think hopefully we.

Brian Wenzel: So we can't keep consistent throughout that period number one. Number two, our prison events underwriting tools allows us to be less core alive and use that data from our partners. We think, hopefully, you know, we made, you know, very good choices or good choices during the pandemic period. When I then look at some of the data, you know, Ryan, I still look at the advantages that we put on in the pandemic period.

Speaker 4: allows us to be less scoreal, lion, and use that data from our partners. We think hopefully, you know, we made, you know, very good choices or good choices during the pandemic.

Very good choices are good choices during the pandemic period. When I then look at some of the data Youll Ryan I still look at the vintages that we put on in the pandemic period. You are generally performing in line with with the 18 19 vintages. So we're not seeing deterioration even when we look externally the transunion data we see.

Speaker 4: Well, I didn't look at some of the data, you know, Ryan, I still look at the advantages that we put on in the pandemic period. Your generally performing in line with, you know, the 18, 19 advantages. So we're not seeing the deterioration. Even when we look externally, the transunion data, we, we see we're, we're performing better than the vintage is other folks.

Brian Wenzel: You're generally performing a line with, with, you know, the 18 19 vintage. So we're not seeing deterioration. Even when we look externally, the transient data, we see we're performing better than the vintage or folks. So again, I think we feel comfortable with the tools we have in place. I think we're comfortable with performance.

We're performing better than.

The vintages other folks so.

Speaker 4: Again, I think we feel comfortable with the tools we have in place.

Again, I think we feel comfortable with the tools we have in place I think we're comfortable with the performance that said Ryan we did take some actions here in the third quarter and that was mainly around the fact that we do have a share consumer so other people who have maybe made certain underwriting choices.

Speaker 4: I think we're comfortable with performance. That said Ryan, we did take some actions here in the third quarter and that was mainly around the fact that we do have a shared consumer. So other people who have maybe made certain underwriting choices, you know, can pull through to us. And so, you know, we want to make sure that our loss rate today is in our target range.

Brian Wenzel: That said, Ryan, we did take some actions here in the third quarter. And that was mainly around the fact that we do have a shared consumer. So other people who have maybe made certain underwriting choices, you know, can pull through to us. And so, you know, we want to make sure that our loss rate stays in our target range. And we, we really took actions in order to ensure we're trying to ensure that we stay within our targeted underwriting loss rate of five and a half to six and optimize our risk adjusted margin.

<unk> flow through to us and so we want to make sure that our loss rate stays in our targeted range and we really took actions in order to ensure we're trying to ensure that we stay within our targeted underwriting loss rate of five five to six and optimize our risk adjusted margin.

Speaker 4: And we really took action in order to ensure what crime and sure that we stay within our targeted.

Speaker 4: under rain washer, a five and a half to six and optimize our risk and just the morning.

Speaker 5: Got it, maybe as a follow up, Brian . So, you know, the RFA seems to be coming in, you know, better than had initially been forecasted.

Got it maybe.

Ryan Nash: Scott, it may be as a follow-up, Brian. The RSA seems to be coming in better than had initially been forecasted, given the guidance for $395 for the year. We look forward losses are on a continued normalization and long growth seems to be slowing. Maybe just tease out some of the moving pieces as we head into 24. It feels like we're kind of back in an environment similar to where we were in the 2018-2019 timeframe when credit was normalizing and the RSA was coming in well below that 4% threshold.

A follow up Brian so the RSA seems to be coming in better than had initially been forecasted given the guidance for $3 95 for the year end.

Speaker 5: you know, given the guidance for 395 for the year and

Speaker 5: you know we look forward you know losses are on a continued normalization and long growth seems to be slowing so

Look forward.

Losses are on a continued normalization in loan growth seems to be slowing so.

Speaker 5: you know, you maybe just tease out some of the moving pieces as we head into 24. It feels like, you know, we're kind of back in an environment similar to where we were in, you know, the 2018, 2019 timeframe when credit was normalizing and the RFA was coming in, you know, well below that 4% threshold. So can you maybe talk through some of those pieces? Thank you.

Can you maybe just tease out some of the moving pieces as we head into 'twenty four it feels like we're kind of back in an environment similar to where we were in.

2018, 2019 timeframe when credit was normalizing in the RSA was coming in well below that 4% threshold. So can you maybe talk through some of those business. Thank you.

Ryan Nash: Can you maybe talk through some of those pieces? Thank you. Thanks again, Ryan. Even what I think about the RSA, it's really performing as we designed it to be. When losses were extremely low it went over 6% level and now we're back into an environment today. It's sub four. Again, it's driven by a couple of factors. One, the tar drop rate, tar drop dollars are clearly in impact. Most certainly the impact of cost of funds and interest bearing liabilities is slowing through.

Speaker 4: Yeah, thanks again, Ryan. Even if I think about the RSA, it's really performing as...

Yes, Thanks again Ryan.

As I think about the RSA, it's really performing as as.

Speaker 4: We designed it to be right. So when losses were extremely well, it went over.

We designed it to be right. So when losses are extremely low and went over.

Speaker 4: you know, 6% level. And now we're back into an environment today.

6% level and now now we're back into an environment today.

Speaker 4: It's sub four and again, it did by a couple of factors. One, the charge off rate.

It's sub four and again driven by a couple of factors one the charge off rate.

Speaker 4: on targoth dollars that are clearly in the bag most certainly.

So our dock dollars are clearly an impact most certainly the.

Speaker 4: uh... the impact of of uh... cost of funds and is just very liable is just flowing through i think it's a thing forward uh... you know that that things are gonna make it a little bit to be the mix of the portfolio obviously you look at something like

The impact of cost.

Cost of funds and interest bearing liabilities is flowing through I think as you think forward.

Ryan Nash: I think as you think forward, the things are going to make it move a little bit. It's going to be the mix of the portfolio. Obviously, you look at something like, you know, often wellness, we don't have as much RSA as growing a little bit faster. And then again, you're going to have some of the other portfolios that have a maybe higher percentage of RSAs depending on their growth rates will influence it.

<unk>.

Things are going to make it move a little bit it's going to be the mix of the portfolio. Obviously, you look at something like.

Speaker 4: You know, I hope the wellness we don't have much RSA. It's going a little bit faster.

As long as we don't have as much of RSA, its growing a little bit faster.

Speaker 3: And then again, you're going to have some of the other portfolios that have a maybe higher percentage of RSAs depending on their growth rates will influence it. But again, it should track consistently. I always point to Ryan, we talked about this before. If you looked at RSAs as a percentage of purchase climate, it is pretty stable through seasonal trends. So again, we expect it to continue to operate the way this historically has.

And then again youre going to have some of the other portfolios that have a maybe a higher percentage of RSA, depending upon their growth rates will influence it but but again it should track consistently I always point to Ryan we've talked about this before if you looked it at RSA as a percent of purchase volume, but it is pretty stable through seasonal trends. So.

Ryan Nash: But again, it should track, you know, consistently. I always point to Ryan. We talked about this before. If you looked at RSAs as a percentage of purchase climate, it is pretty stable through seasonal trends. So we, again, we expect it to continue to operate the latest historically as. Thanks for thinking on my question. Thanks, Ron. Thank you.

Again, we expect it to continue to operate the latest <unk>.

Thanks for taking my questions.

Thanks, John .

Speaker 1: Thank you. What's our next question from America and the gerryane with the UBS? Please go ahead. Hi. Good morning.

Thank you we'll take our next question from Erika Najarian with UBS. Please go ahead.

Sanjay Sakrani: What's our next question for America and the Garian with the UBS? Please go ahead. Hi. Good morning. Morning. Hi, okay.

Hi, good morning.

Good morning.

Speaker 6: My first question is on the direction of the net interest margin. So it seems like we've...

Sanjay Sakrani: My first question is on the direction of the net interest margin. So it seems like we've, you know, fully solidified the notion of higher for longer in 24. How should we think about, you know, how your net interest margin should perform in a higher for longer environment. And as we think about funding costs on the other side of the cycle, when we eventually get to rate cut, although the forward curve keeps pushing that out, how sensitive should we think about your funding costs relative to cuts and fed funds?

My first question is on the direction of the net interest margin. So it seems like we've.

Speaker 6: you know fully solidified the notion of higher for longer in 24. How should we think about...

Fully solidified.

The notion of higher for longer than 24.

Should we think about higher net interest margin should perform in a higher for longer environment and as we think about funding costs and the other side of the cycle. When we eventually get to rate cuts all of the forward curve keeps pushing that out how sensitive.

Speaker 6: how your Nandenshary's margins should perform in a higher, for longer environment.

Speaker 6: And as we think about funding costs on the other side of the cycle.

Speaker 6: When we eventually get to rate cut, although the forward curve keeps pushing that out, how sensitive should we think about your funding cost relative to cuts and fits?

About your funding costs relative to cut in fed funds.

Speaker 4: Yes, thanks, Erica. So I think as we think about the margin, as we move forward here, there's a little bit of hell when it's still to go on prime rate. That flows through the book here in the fourth quarter. I think the second venue you're continuing to see is a benefit on the margin coming from higher revivable. We're still paying rates that are on our 30 basis points above.

Yes. Thanks, Erika so so I think as we think about the margin as move forward here.

Sanjay Sakrani: Yes. Thanks, Erica. So I think as we think about the margin as we move forward here, there's, there's, again, a little bit of hell when still to go on prime rate. That flows through the book here in the fourth quarter. I think the second thing you're continuing to see is a benefit on the margin coming from higher or above. You know, we're still paying rates that are on our 30 basis points above the pandemic period.

Sanjay Sakrani: So again, there should be some push up there. There should be a little bit of a headwind relative to reversals that go against that. That's that's what I think about the yield side of the equation on the interest bearing liability side equation. Again, there were a lot of assets that were put on a lot of deposits that were put on this year. They're going to have to reset next year. So we'll see a little bit of take up next year in the interest bearing liabilities is those, those, you know, shorter days, you know, CDs, hopefully renew.

A little bit of a tailwind is still to go on a prime rate.

That flows through the book here in the fourth quarter.

I think the second thing you are you continuing to see is a benefit in the margin coming from higher revolve. We're still a payer rates that are 130 basis points above.

Speaker 4: uh... the pandemic period uh... so so again there should be some push up there there should be a little bit of a headwind relative to reversals that go against that's that's that's what i think about the yield size equation

The pandemic period.

So again, there should be some push up there there should be a little bit of a headwind relative to reversals that go against that so that's that's really as I think about the yield side of the equation on the interest bearing liabilities side equation again, there are a lot of assets that were put on a lot of excuse me a lot of deposits that were put on this year, they're going to have to reset.

Speaker 4: on interest bearing liabilities side equation. Again, there were a lot of assets that were put on or a lot of positive that were put on this year. They're gonna have to reset next year. So we'll see a little bit of take up next year in the interest bearing liabilities as those shorter days, CDs, hopefully.

Sure. So we will see a little bit of tick up next.

Next year and in the interest bearing liabilities is those those shorter dated Cds.

Hopefully.

Speaker 4: Renew. I think we can get the back side of the cycle. That's really to be seen, right? There's a case that we made where beta is real a little bit slower coming down for some of the folks that want to try to gather deposit and get the yield side of their investment portfolios up. There are some there going to want to try to push down other cost of money based on incentive. So I think as we get closer to that, we could probably give you a better perspective of which way that will turn.

And renew I think when you hear the back side of the cycle.

Brian Wenzel: I think when you get the back side of the cycle, that's really to be seen, right? There's a case that we made where beta is a little bit slower coming down for some of the folks that want to try to gather deposits and get the yield side of their investment portfolios up. There are some that are going to want to try to push down other cost of money based on incentive. So I think as we get closer to that, we could probably give you a better perspective of which way that will turn.

That's really to be seen there is a case that can be made where betas will be a little bit slower coming down for some of the folks that want to try to gather deposits and get get the.

Sanjay Sakrani: I got it.

The yield side of the investment portfolio is up there are some they're going to want to try to push down costs. Further DSO NIM sensitive. So I think as we get closer to that we can probably give you a better perspective of.

Which way that will return.

Got it.

Speaker 6: And my second question is on capital. There's been a lot of discussion for card companies in particular with regards to how we should treat unfriended commitments.

Erika Najarian: And my second question is on capital. There's been a lot of discussion for card companies in particular with regards to how we should treat unfriended commitments and also the timing differences in terms of higher ACL ratios in terms of the numerator deductions. So because you give us a little bit of a preview, so to speak, on how the pending new capital rules could impact synchronize as how you're expecting that to impact your approach to capital management.

Second question is on capital.

<unk> been a lot of discussion.

For card companies in particular.

Regards to how we should treat unfunded commitments and also the timing differences in terms of higher ACL ratios in terms of the numerator deductions. So could you give us a little bit.

Speaker 6: and also the timing differences in terms of higher ACL ratios in terms of the numerator deductions. So could you give us a little bit of a preview, so to speak, on how the pending new capital rules could impact synchroenix and how you're expecting that to impact your approach to capital mess?

A preview so to speak on how the pending new capital rules could impact synchrony and.

How are you expecting that to impact your approach to capital management.

Yes, great Great question Erika So when we look at the rules the first thing I would say.

Brian Wenzel: Yeah, great, great question, Erica. So when we look at the rules, you know, the first thing I'd say, probably along with other, we're clearly disappointed with the proposed rules around capital, both from the process in which the Fed went through as well as certain elements that we don't think were clearly thought through fully if you thought about a holistic review of the capital stack, right? You combine that with why I would say some apparent goal-plating, it's very difficult, I think, for the industry as a whole.

Speaker 4: Yeah, great, great question, Erica. So when we look at the rules, you know, the first thing I'd say, probably along with others, we're clearly disappointed with the proposed rules around capital, both from the process.

Probably along with others, we're clearly disappointed with the proposed rules around capital both from the process.

Speaker 4: in which the Fed went through, as well as certain elements that we don't think were clearly thought through fully if you thought about a holistic review of the capital stack, right?

And which the fed went through.

As well as certain elements that we don't think we're clearly.

Slot through fully if you thought about a holistic review of the capital stack right.

Speaker 4: uh... you combine that with what i would say some apparent uh... poll plating uh... it's very difficult to infer the industry as a whole and i think you're seeing that in banks feedback and you're seeing it's really pretty good to be back and i think there's is some even level concern with the effect governor's with regard to that and that finally when you think about synchronized for you to the details you know work really disappointed that the tailoring rules effectively have been eliminated by patrina's on the same levels of other other banking institutions

You combine that with what I would say some apparent.

Gold plating.

It's very difficult I think for the industry as a whole.

Brian Wenzel: And I think you're seeing that in banks feedback, I think you're seeing the trade groups feedback and I think there's some even level of concern with the Fed governors, with regard to that. And then finally, when you think about Synchrony before you get to the details, you know, we're clearly disappointed that the tailoring rules effectively have been eliminated by traders on the same levels while there are other banking institutions. You know, with that said, Erica, if we looked at just taking those rules as they are, again, we're not sure that they would say as they are, the impact loss is probably between a 15 to 20 percent higher, you know, impact to capital.

Youre seeing that in banks feedback I think you're seeing that through the trade group's feedback and I think there's some even level of concern with the fed governors with regard to that and then finally, when you think about synchrony foray into the details. We're clearly disappointed that the tailoring rules effectively had been eliminated by chinas on the same levels or are there other banking institutions.

Speaker 4: you know what that said uh... arrogant if we looked at just taking those rules as they are i think again we're not sure that they're saying that they are the impact of this probably between the fifty to twenty percent higher uh... you know impact the capital in the ring there depends on how you treat some of the rc when you think about the operational risk pieces with the rc offset the fraud and and some of the revenue items you know i think about the unfunded commitment that is a approach it can add back to the rwa

With that said if we looked at just taken those rules as they are again, we're not sure that they will stay as they are and the impact to us is probably between 15% to 20% higher.

The impact of capital in the range there depends it really upon how you treat some of the RSA. When you think about the operational risk pieces with the RSA offset the fraud and some of the revenue items.

Brian Wenzel: And the rings there depend really upon how you treat some of the RSA when you think about the operational risk pieces with the RSA offset the fraud and some of the revenue items. You know, when I think about the unfunded commitments, that is a fairly significant add back to the RWA. The good news for us, I think, you know, we have a path where through mitigation strategy, we think this would be very manageable if it was enacted the way it was today.

Think about the unfunded commitments that is a fairly significant add back to the <unk>.

Speaker 4: The good news for us, I think, you know, we have a path for our through mitigation strategy. We think it's, this would be very manageable. It was enacted the way it was today. And part of it when you think about the unfunded commitments, a good bulk of that is with counts that are deemed enacted so we can adjust line strategies without impacting current customers in our business. So I'm not sure that we look at it and we talk about as a company, we believe there is a significant aspect with how we manage the gross size of the business.

The good news for US I think we have a path.

Through mitigation strategy, we think it should be very manageable. It was enacted delay was today and part of it when you think about the unfunded commitments a good bulk of that is what counts that are deemed enacted so we can adjust line strategy without impacting current customers and our business. So I'm not sure that we look at and we talked about as a company we believe there.

Brian Wenzel: And part of it when you think about the unfunded commitments, a good bulk of that is with counts that are deemed enacted so we can adjust line strategies without impacting current customers in our business. So I'm not sure if we look at it and we talk about the company, we believe there is a significant aspect with how we manage the growth side of the business.

There is a.

A significant aspect with how we manage the growth side of the business.

Thank you.

Erika Najarian: Thank you. Thanks, Eric. Have a good day. Thank you.

Thanks, Eric navigate that.

Thank you we will take our next question from Sanjay <unk> with <unk>. Please go ahead.

Speaker 1: Thank you. We'll pick our next question from Sanjay Sakrani with KVW. Please go ahead.

Sanjay Sakrani: We'll pick our next question from Sanjay Sakrani with KVW. Please go ahead. Thanks.

Thanks, Good morning, I guess.

Speaker 4: Thanks, good morning. I guess my first question, Brian Wenzel, is for you, in terms of the reserve rate going forward. You know, we've seen some of the card issuers make adjustments to, you know, kind of what's inside the reserve and what's not. And there's some risks associated with inflation and the fact that just behaviorally things are trending a little bit different than they have in the past. Maybe you could talk about the migration of reserve rate going forward and you feel comfortable in the methodology at this point.

Sanjay Sakrani: Good morning. This is my first question, Brian Wenzels, for you in terms of the reserve rate going forward. You know, we've seen some of the card issuers make adjustments to, you know, kind of what's inside the reserve and what's not. And there's some risks associated with inflation and the fact that behaviorally things are trending a little bit different than then they have in the past. Maybe you could talk about the migration of reserve rate going forward and you feel comfortable in the methodology at this point.

My first question, Brian Wenzel looks for you in terms of the reserve rate going forward, we've seen some of the card issuers to make adjustments to.

Kind of what's inside the reserve and what's not.

There are some risks associated with inflation and the fact that behavior early things are trending a little bit different than than they have in the past maybe you could just talk about the migration of reserve rate going forward and you feel comfortable in the methodology at this point.

Speaker 4: Yeah, you know, thanks. Thanks for the questions, Sonja. Obviously we feel comfortable at the end of the third quarter that we have. The right level losses, you know, as you think about it, the base assumptions that we have in the reserve mile really didn't change. I think you look at the base lines that are out there. There's not a significant shift in the underlying assumptions that are going into the mile. You know, as we looked at the quarter, what you did see is a little bit of shift between the quantitative portion.

Yeah. Thanks, Thanks for the question Sanjay obviously, we feel comfortable at the end of the third quarter that we have.

Sanjay Sakrani: Yeah, thanks. Thanks for the questions, Sanjay. Obviously, we feel comfortable at the end of the third quarter that we have. The right level losses, you know, as you think about it, the base assumptions that we have in the reserve model really didn't change that. I think you look at the base lines that are out there. There's not a significant shift in the underlying assumptions that are going into the model. You know, as we looked at the quarter, what you did see is a little bit of a shift between the quantitative portion of the.., of the modeling qualitative portion.

The right level of losses.

Think about it the base assumptions that we have in the reserve model really didn't change I think when you look at the baselines that are out there there's not a significant shift in the underlying assumptions that are going into the model.

As we looked at the quarter.

But you did see is a little bit of shift between.

The quantitative portion.

Speaker 4: of the model in qualitative portion, but again, through the past history, we think through...

The amount of the qualitative portion, but again through the past history, we think through.

Sanjay Sakrani: But again, through the past history, we think through the scenarios that we run that we've encountered for a potentially worsening macro. We hopefully have captured inflation as part of that model, and then we also have student loans as part of it. So we feel good about where we are as we sit today, and that we can withstand, you know, changes in the macro environment. That said, you know, when we look at it, there are six spaces.

Speaker 4: The scenarios that we run that we encounter for a potentially worsening macro, we hopefully have captured inflation as part of that model. And then we also have students as part of it. So we feel good about where we are as we sit today.

The scenarios that we run that we've accounted for a potentially worsening macro.

Hopefully it captured inflation into as part of their model and then we also have student loans as part of it. So we feel good about where we are as we sit today.

Speaker 4: uh... that weekend this weekend with the end uh... you know changes in the macro environment that said you know when we look at it there six basis points of coverage between second quarter third quarter you know you've given these models that that isn't significant i wouldn't read into it that we have a charity picture uh... as we close the quarter

And then we can as we can withstand.

Changes in the macro environment that said you know.

Sanjay Sakrani: There are six spaces points of coverage between second and third quarter, you know, you know, given these models that isn't significant, I wouldn't read into it that we have a deteriorating picture as we close the quarter. Okay. Great.

When we look at it there are six basis points of coverage between second quarter third quarter. Given these models that isn't significant I wouldn't read into it that we have a deteriorating picture as we closed the quarter.

Okay.

Speaker 7: Great, and then maybe once a Brian doubles, Brian , can you just talk about, you know, sort of the backdrop for portfolio acquisition, any renewal, that kind of stuff, and then maybe just a competitive environment in general. Thanks.

Great and then maybe one for Brian doubles, Brian can you just talk about.

Brian Doubles: And then maybe one for Brian Doubles.

Brian Doubles: Brian, can you just talk about, you know, sort of the backdrop for portfolio acquisition, any renewal, that kind of stuff, and then maybe just the competitive environment in general. Thanks. Yeah, sure. So, you know, look, I would say generally, it's a pretty constructive competitive environment. I think, you know, what we're seeing in the market around pricing, new opportunities, renewals is pretty disciplined. And I think anytime you enter into a period like we're in right now, where there's some uncertainty on the horizon.

So the backdrop for portfolio acquisitions, and any renewal that kind of stuff and then.

Maybe just the competitive environment in general thanks.

Speaker 4: Yeah, sure, Sanjay. So, you know, look, I would say generally, it's a pretty constructive competitive environment. I think, you know, what we're seeing in the market around pricing new opportunities renewals is pretty disciplined. And I think anytime you enter into a period like we're in right now, where there's some uncertainty on the horizon, you tend to see issuers stay a little bit more conservative and a little more disciplined, which is going to be news for us.

Yes, sure Sanjay so.

I would say generally.

It's a pretty constructive competitive environment I think.

What we're seeing in the market around pricing new opportunities renewals is pretty disciplined and I think any time you enter into a period like we're in right now where there is some uncertainty on the horizon.

Brian Doubles: And you tend to see issuers stay a little bit more conservative and a little more disciplined, which is good news for us. You know, in terms of renewal, we just announced belt this quarter. It's a great renewal for us, kind of normal course, great partner, varying engaged customer base. And so obviously we're always out there working the renewal pipeline on our portfolio. And then in terms of new opportunities, I would say, you know, on balance, it's probably more.

You tend to see issuers stay a little bit more conservative and a little more disciplined which is good news for us.

Speaker 8: you know in terms of renewal we just announced belt this quarter it's a great renewal for us kind of normal course uh... great partner varying engaged customer base uh... and so obviously we're always out there working the renewal pipeline on our portfolio

In terms of renewals, we just announced belt this quarter, it's a great renewal for us kind of normal course.

Great partner very engaged customer base.

And so obviously, we're always out there working the renewal pipeline on our portfolio.

Speaker 8: And then in terms of new opportunities, I would say, you know, on balance, it's probably more new program opportunities, startup opportunities, less of the kind of big programs that are out there coming to market. And I think that'll hold true probably for the next 12-18 months, and then beyond that, I think you'll probably see some bigger programs come up and be in the market.

And then in terms of new opportunities I would say on balance it's probably more new.

Brian Doubles: New program opportunities, startup opportunities, less of the kind of big programs that are out there coming to market. And I think that'll hold true probably for the next 12, 18 months. And then beyond that, I think you'll probably see some bigger programs come up and be in the market. Perfect. Thank you very much. Thanks, Andy. Thank you.

New program opportunities startup opportunities.

Less of the kind of big programs that are out there coming to market.

I think that will hold true probably for the next 12 months to 18 months and then beyond that I think you'll probably see some bigger programs come up and be in the market.

Perfect. Thank you very much.

Thanks Sandra.

Thank you we'll take our next question from John Hecht with Jefferies. Please go ahead.

Speaker 1: Thank you. We'll take our next question from John Hecht with Jeffries. Please go ahead.

John Hecht: We'll take our next question from John Hecht with Jeffries. Please go ahead. Morning, guys. Thanks very much. Hey, John. How are you doing?

Martin Thank you very much.

Speaker 8: Morning guys, thanks very much. Hey, James. My question. How are we doing? First up, you guys have had pretty 10th floor, or they would count throughout the quarters. I'm wondering, you know, I mean, given where you're underwriting and kind of what's going on in the world, kind of maybe what are the characteristics of the new customers in any change for more you work years ago? And then what are the sources of the new customers as well?

Quick question.

How are you John .

John Hecht: First up, you guys have had pretty 10th row of new account. So I think orders. I'm wondering, you know, I mean, given where you're underwriting and kind of what's going on in the world. Maybe what are the characteristics of the new customers in any change for more year or a few years ago? And then what are the sources of the new customers as well? Yeah, John, I would say, you know, consistent, consistent kind of trends on new accounts, both in terms of absolute magnitude, as well as where the accounts are coming from.

You guys have had a pretty steady flow of new account.

Braskem quarters, I'm wondering I mean.

Given where your underwriting kind of what's going on the world kind of maybe what are the characteristics of the new customers.

The change from where you were a few years ago and what are the sources of the new customers as well.

Yes.

Speaker 8: Yeah, I would say, you know, consistent, consistent kind of trends on new accounts, both in terms of absolute magnitude as well as where the accounts are coming from. You know, one of the things that Brian mentioned is we think about underwriting. You know, we don't expand the credit box in really good times, and we try not to really restrict it in more uncertain times. And that means that we have, you know, more of a steady trend in terms of both new accounts, active accounts, et cetera.

Would say.

Consistent consistent trends on new accounts, both in terms of.

Absolute magnitude as well as where the accounts are coming from one of the things that Brian mentioned as we think about underwriting.

John Hecht: You know, one of the things that Brian mentioned is we think about underwriting, you know, we don't expand the credit box in really good times. And we try not to really restrict it in more uncertain times. And that that means that we have more of a steady trend in terms of both new accounts, active accounts, et cetera. I would tell you that the new programs that we recently launched are performing really well.

We don't expand the credit box and really good times, and we try not to really restrict that in more uncertain times and that that means that we have more of a steady trend in terms of both new accounts active accounts et cetera.

Speaker 8: I would tell you that the new programs that we recently launched are performing really well. We're seeing really good growth there. So we continue to be encouraged on that front. And you're seeing, I would say really good trends across all of the platforms. You know, as we look at growth, it's not one platform that's really outperforming. You're seeing that a little bit with health and wellness, but it's pretty

I would tell you that the new programs that we recently launched are performing really well.

John Hecht: We're seeing really good growth there. So we continue to be encouraged on that front. And you're seeing, you know, I would say really good trends across all of the platforms, you know, as we look at growth, it's not, you know, one platform that's really outperforming. You're seeing that a little bit with health and wellness, but it's pretty broad based. And that's encouraging. You know, I think the consumer has been much more resilient than any of us anticipated a year ago.

Seeing really good growth there.

So we continue to be encouraged.

On that front and you are seeing I would say really good trends across all of the platforms as we look at growth it's not.

One platform, that's really outperformed and youre seeing that a little bit with health and wellness, but it's pretty broad based.

Speaker 8: uh... that's encouraging you know i think the consumer has been much more resilient than any of our anticipated a year ago and you're saying that across the board where you look at purchase by receivables new accounts you know active accounts

It's encouraging I think the consumer has been much more resilient than any of us anticipated a year ago and youre seeing that across the board whether you look at purchase volume receivables.

John Hecht: And you're seeing that across the board, whether you look at purchase volume, receivables, new accounts, you know, active accounts. You know, if we had to pick a metric, that's one that's probably a little bit more important than new accounts because keeping that consumer engaged, offering them more than one product. Like that's a big part of our strategy. And so we've been pleased, you know, so far all year.

<unk> active accounts.

Speaker 8: you know if we if we had to pick a metric that's one that's probably a little bit more important than new accounts because keeping that consumer engaged offering them more than one product like that's a big part of our strategy and so we've been pleased you know so far all year

John Hecht: That's very helpful.

If we had to pick a metric that's one that's probably a little bit more important than new accounts, because keeping that consumer engaged offering them more than one product like thats, a big part of our strategy and so we've been pleased so far all year.

Hello.

Speaker 7: That's very helpful. And then, uh, if that's any question, I think I said that you guys do some disclosure that you guys were involved in at least evaluating Green's guy. Yeah, I'm wondering kind of what's the appetite for acquisition? Yeah, I would assume the environment's a little bit better now with different opportunities. Maybe you could be able to stay through what you're looking at and where you might go from all perspective.

No.

The second question I think I said.

Brian Doubles: And then second question, I think I said that you guys do some disclosure that you guys were involved in at least evaluating Green's guy. I wonder what's the appetite for that position? Yeah, I would assume the environment's a little bit better now with different opportunities. Maybe you'd be able to take it through what you're looking at and where you might go from all perspective. Yeah, you look, we're always opportunistic when it comes to the tension of M&A opportunities.

But you guys do some disclosure that you guys were involved but at least the valuable blue Sky.

Kind of what's the appetite for acquisition.

I would assume the environment, a little bit better now with different opportunity, maybe you can give us.

Through what Youre working on and working.

You might go from all perspective.

Yes, I mean look we're always opportunistic when it comes to potential M&A opportunities at the same time, John we're extremely disciplined around the financial return of those opportunities, making sure that they are accretive.

Speaker 8: Yeah, we look, we're always opportunistic when it comes to potential M&A opportunities. At the same time, John , we're extremely disciplined around the financial return of those opportunities, making sure that they're accretive. We weigh that against buying back our stock and other opportunities. And to look, we're always in the market. We've done some really nice, smaller acquisitions over the last couple of years. Petsbeth has been an absolute home run for us.

Brian Doubles: At the same time, John, we're extremely disciplined around the financial return of those opportunities, making sure that they're accretive. We weigh that against buying back our stock and other opportunities. And to look, we're always in the market. We've done some really nice, smaller acquisitions over the last couple of years. Pet's best has been an absolute home run for us. Since we acquired that business, the Pet's in force is up there. 5X, just between 2019 and we acquired it.

We weigh that against buying back our stock and other opportunities and so look we're always in the market. We've done some really nice smaller acquisitions over the last couple of years pets best has been an absolute homerun for us.

Speaker 8: you know, since we acquired that business, the Pets and Forces up five acts, you know, just between 2019 and we acquired it. And now, Allegro has been a great acquisition for us again. Nice acquisition, relatively small in terms of the capital outlay for that, but, you know, we've been able to leverage the scale of health and wellness to grow that. We picked up some new products as part of that. So those are the types of acquisitions that we really like to do.

Since we acquired that.

That business.

Pet's enforces up five X just between 2019, when we acquired it and now <unk>.

Brian Doubles: And now Allegro has been a great acquisition for us again. Nice acquisition, relatively small in terms of the capital outlay for that. But we've been able to leverage the scale of health and wellness to grow that. We picked up some new products as part of that. So those are the types of acquisitions that we really like to do. But with that said, we look at larger opportunities, but they've got to make sense. You know, we balance those against other uses for our capital. And they've got to have a nice return profile for us and a good path to eat the house accretion.

<unk> been a great acquisition for us again.

Brian Doubles: Thanks very much.

This acquisition relatively small in terms of the capital outlay for that but we've been able to leverage the scale of health and wellness to grow that we picked up some new products as.

Kevin Barker: Yep.

Kevin Barker: Thank you.

As part of that so those are the types of acquisitions that we really like to do.

Speaker 8: But with that said, we look at larger opportunities, but they've got to make sense. We balance those against other uses for our capital and they've got to have a nice return profile for us and a good path to EPS accretion.

But with that said, we look at larger opportunities, but they've got to make sense, we balance those against other uses for our capital and they've got to have a nice return profile for us.

And a good path to EPS accretion.

Okay. Thanks very much.

Yes.

Speaker 8: Thank you. We'll take our next question from Kevin Barker with Piper Sampler. Please go ahead. Great. Thank you. I'll never be seeing any particular shifts in payment regtrend.

Thank you we'll take our next question from Kevin Barker with Piper Sandler. Please go ahead, great. Thank you have you seen any particular shifts and payment rate trends.

Kevin Barker: We'll take our next question from Kevin Barker with Piper Sam, where please go ahead. Great. Thank you. Have you seen any particular shifts in payment rate trends for the near prime to prime consumer? If you're some of your competitors, mention that there's a little bit more weakness primarily due to household net worth or even savings rates within that cohort. Are you seeing any changes in payment right there? Yeah.

Speaker 8: for the near prime to prime consumer. If here's come your competitor as mentioned, that there's a little bit more weakness.

For the near Prime to Prime consumer.

Some of your competitors mentioned that there is a little bit more weakness.

Speaker 8: primarily due to household, net worth, or even savings rates within that cohort. Are you seeing any changes in payment rates there?

Primarily due to household net worth or even savings rates within that that's that cohort are you seeing any changes in payment rates there.

Speaker 4: yeah good morning Kevin you know the first thing out of you when we think about the consumer there's a lot of focus that goes into savings right now and I'd say that's the higher end

Yes, good morning, Kevin.

Brian Wenzel: Good morning, Kevin. You know, the first thing I, when we think about the consumer, there's a lot of focus that goes into savings rate. And I'd say that the higher end consumer cohorts do have access savings that's in there. But the prime, we kind of rate on the prime level to some prime, they've benefited by a 22.6% wage increase in 2019, which has been able to really, you know, bolstered in through this period.

First thing when we think about the consumer.

Lot of focus that goes into savings rate, David I would say that the higher end.

Speaker 4: Consumer cohorts do have access to that in there. But the prime, we kind of rate on the prime level to some prime, they've benefited by a 22.6% wage increase in 2019, which has been able to really bolster in through this period. When I look at payment rates in comparison year over year,

Consumer cohorts do have excess savings thats in there, but the time that we kind of right on the prime level to subprime they benefitted by a 22, 6% wage increase.

Increase in 2019, which has been able to really.

Bolstered in through this period.

Brian Wenzel: When I look at payment rates and compare them year over year, right? You know, where you see probably the biggest shift in the pay rate is in that $660 to $720 bucket. You know, they're all moving from, from, you know, a little bit more full pay, a statement pay down. But the biggest shift is in that $660 to $720, which isn't necessarily that concerning to us. And still, you know, above where they were in the pre-payment bank period. So I'd say shit, it's not something that we are concerned about or find it to be concerning at this point.

When I look at payment rates and compare them year over year.

Speaker 3: Right. You know, where you see probably the biggest ship in the pay rate is in that $660 to $720 bucket. You know, they're all moving from, from, you know, a little bit more full pay, a statement pay down, but the biggest ship is in that $660 to $720, which isn't necessarily that concerning to us and still, you know, above where they were in the pre-pandemic period. So I'd say a ship, it's not something that we are concerned about or find it to be, this parts.

Right.

Where you see probably the biggest shift in the day rate is in that $6 60 to 720 bucket.

They're all moving from from.

A little bit more full pay his statement pay down but the biggest shift is in that $660 7 million, which isn't isn't necessarily that concerning to us and still below.

Above where they were in the pre pandemic period. So I'd say, it's not something that we are concerned about or we're find it to be.

Be concerning at this point.

Speaker 8: And then I know it's very early, but are you seeing any impact on payment rate trends for folks with federal...

Brian Wenzel: I know it's very early, but are you seeing any impact on payment rate trends for folks with federal student loans? I know it's, you know, for a few weeks. Yeah, so it was actually interesting, when you look at that cohort, a couple of things we've done a lot of analysis on this group of people, I think when you look at the month of September, we saw significant rise in people making payments in advance of other student loan payments beginning in October.

Okay, and then I know, it's very early but are you seeing any impact on payment rate trends.

For folks with federal student loans.

Speaker 8: I know it's, you know, for a few weeks. It's just trying to do it really. One.

No.

Now for a few weeks.

Yes.

It is early.

Speaker 4: Yeah, so it was actually interesting, when you look at that cohort, a couple of things we've done, if you know, we've done a lot of analysis on this group of people, when they do it, I think when you look at the month of.

Yes, so it was actually interesting Kevin when you look at that cohort.

A couple of things we've done.

We've done a lot of analysis on this group of people. We continue to do it I think when you look at the month of sets.

Speaker 4: uh... to tend to we saw significant rise in people making payments in advance of on the student loan payments beginning in October so that's that's a very good time uh... for us with regard to that you know we did a deeper dive when we look at at how they are performing those accounts against it's the entire book really against you know it's a credit code

In September we saw a significant rise in people, making payments in advance of their student loan payments beginning in October so that's a very good sign.

Brian Wenzel: So that's a very good time for us with regard to that. You know, we did a deeper dive when we looked at how they are performing those accounts against, it's the entire book really against, you know, I'd say credit cohorts. To be honest with you, Kevin, you're going to find this interesting. They actually are performing better with people with student loans versus people without student loans. So they, they're clear to be very, very cautious.

For us with regard to that we did a deeper dive when we looked at how they are performing those accounts against the entire book really against I'd say credit cohorts.

Speaker 4: uh... it to be honest with you can't it you're in find this interesting they actually performing better with people with student loans versus people without the moon so so they they clear to be very very cautious

And to be honest with you Kevin.

Youre going to find this interesting they actually are performing better with people with student loans versus people without student loans. So they clear to be very very cautious.

Speaker 4: uh... again affect the people you know significant other people did pick up famous prior to the the date so again what we expect on four is that the fourth quarter is going to be a little bit noisy

Brian Wenzel: Again, the fact that people, you know, significant number of people did pick up payments prior to the date. So again, what we expect going forward is that the fourth quarter is going to be a little bit noisy. So with regard to people who may have forgotten that new new servicers, et cetera, and then you'll start to get a much better read as you move into the first quarter. What's going to be challenging for issuers is the fact that they're not, you know, we don't expect them to be reported to the bureaus until January 25th.

The fact that people significant number of people did pickup payments prior to the date. So again, what we expect going forward is that the fourth quarter is going to be a little bit noisy.

Speaker 4: So with regard to people who may have forgotten that new servicers, etc. And then you'll start to get a much better read as you move into the first quarter. What's going to be challenging for issuers is the fact that they're not, you know, we don't expect them to be reported to the bureaus until...

So so so with regard to people, who may have forgotten that new servicers et cetera, and then you'll start to get a much better read as you move into the first quarter, what's going to be challenging for issuers is the fact that they're not we don't expect them to be reported to the bureaus until January 25. So there are things that we're going to watch where they are.

Speaker 4: January 25th. So there's things that we're going to watch with regard to changing those balances and see what now we can detect.

Brian Wenzel: So there's things that we're going to watch with regard to changing those balances and see what now we can detect, you know, through the work of the bureaus, why not they are originally payments and how much they're paying down. So, you know, we've kind of set that up in advance to monitor the population. Again, we think we provided for them in prior periods for ones that may struggle.

Guard to changes in those balances and see where now we can detect right through the work of the bureaus, we're not they are resuming payments and how much they're paying down so.

Speaker 4: you know, through the work of the bureaus, why not they are originally payments and how much they're paying down. So, you know, we've kind of set that up in advance to monitor the population again. We think we've provided for them in prior periods for ones that may struggle. Thanks.

We've kind of set that up in advance to monitor the population again, we think we've.

Provided for them.

In prior periods for Wednesday may struggle.

Thank you Brian .

Brian Wenzel: Thank you, Brian. Thanks for having a good day.

Thanks, Ken and good day.

Thank you we'll take our next question from Jeff Adelson with Morgan Stanley . Please go ahead.

Jeffrey Adelson: Okay, we'll take our next question from Jess Adelson with Morgan's family. Please go ahead. Hey, good morning. Thanks for taking my questions. Just wanted to get an updated, you know, updated view on the late fees from the CFPB here. I know we're almost done with October and haven't heard anything yet. Just wondering, has there been any shift in the dialogue out there? Or are you still fully expecting the rules to come out as proposed?

Hey, good morning, Thanks for taking my questions.

Just wanted to.

Yes.

Just wanted to get an updated.

Speaker 9: just wanted to get an updated, you know, updated view on the late these from the CFPB here. I know we're almost done with October and haven't heard anything yet. Just wondering, has there been any shift in the dialogue out there or are you still fully expecting the rules to come out as proposed? And I guess as a part of that question.

No updated view on the late fees from the CFPB here I know, we're almost done with October and haven't heard anything yet.

Just wondering has there been any shift in the dialogue out there or are you still fully expect anyone to come out as proposed and I guess as a.

Jeffrey Adelson: And I guess as a part of that question, are you, you know, when the rule comes out, are you going to be taking any sort of proactive preemptive actions in preparation? Or are you more just going to be in the waiting state approach and waiting to see how it plays out in the courts?

Part of that question.

Speaker 9: Are you, you know, when the rule comes out, are you going to be taking any sort of proactive preemptive actions and preparation, or are you more just going to be in the waiting field approach and way to see how it plays out in the course?

When the rule comes out or are you going to be taking any sort of proactive preemptive actions in preparation or are you more just kind of in a wait and see approach and wait to see how it plays out in the courts.

Speaker 10: Yeah, no, thanks. So, look, we're obviously still waiting for the final rule to be issued. So there's plenty of unknowns out there until we see the final rule. We've got to see things like the implementation period, the final amount. We also believe that it will be litigated.

Yes, no. Thanks, Jeff So look we're obviously still waiting for the final rule to be issued so there's plenty of unknowns out there until we see the final rule, we got to see things like the implementation period the final amount.

Jeffrey Adelson: Yeah, no, thanks, Jeff. So what we're obviously still waiting for the final rule to be issued. So there's plenty of unknowns out there until we see the final rule. We've got to see things like the implementation period, the final amount. We also believe that it will be litigated. So we're going to watch that carefully and that could impact the timing as well. So I guess what I would say is, look, we're prepared for multiple scenarios in terms of timing.

We also believe that it will be litigated.

Speaker 10: So we're going to watch that carefully and that could impact the timing as well. So I guess what I would say is, look, we're prepared for multiple scenarios in terms of timing. We've been working very closely with our partners for over six months now. We're working on pricing offsets, really with the goal of offsetting the impact here and putting us in a position with our partners where we can underwrite a large cross-section of the customers that we do today.

So we're going to watch that carefully and that could impact the timing as well. So I guess, what I would say is look we're prepared for multiple scenarios in terms of timing. We've been we've been working very closely with our partners for over six months now.

Jeffrey Adelson: We've been working very closely with our partners for over six months now. We're working on pricing offsets, really with the goal of offsetting the impact here and putting us in a position with our partners where we can underwrite a large cross-section of the customers that we do today. We're obviously, goes out saying we're disappointed in the rule. Obviously we think it has unintended consequences that weren't properly evaluated. Late fees are a very important incentive to pay.

We're working on pricing offsets really with the goal of offsetting the impact here and putting us in a position with our partners, where we can underwrite a large cross section of customers that we do today.

Speaker 10: We're obviously, goes out saying we're disappointed in the rule. Obviously, we think it has unintended consequences that weren't properly evaluated. Late fees are a very important incentive to pay. $8 just clearly is not an incentive.

We're obviously.

It goes without saying we are disappointed in the rule. Obviously, we think it has unintended consequences that werent properly evaluated.

Late fees are a very important incentive to pay $8. Just clearly is not an incentive.

Jeffrey Adelson: $8 just clearly is not an incentive. So without those offsets, it would restrict access to a pretty significant cross-section of consumers. And no change to what we've said in the past. Our goal is to protect our partners fully offset the impact and continue to underwrite and approve the majority of the customers that we do today. Got it. Thanks.

Speaker 10: So without those offsets, it would restrict access to a pretty significant cross-section of consumers. And no change to what we send the past, our goal is to protect our partners, fully offset the impact and continue to underwrite and improve the majority of the customers that we do today.

So without those offsets would restrict access to a pretty significant.

Significant cross section of consumers and no change to what we said in the past our goal is to protect our partners fully offset the impact and continue to underwrite and approve the majority of the customers that we do today.

Got it thanks, and just on the credit tightening side I know you discussed some more action there positioning yourself for 2024.

Speaker 9: Got it. Thanks. And just on the credit tightening side, I know you've discussed some more actions there, positioning yourself for 2024. But at the same time, you know, you weren't leading it as hard as your peers. You were sort of ahead of the curve there. Just wondering, you know, what would cause you to lean back in at this point? Is there any sort of signals you're looking for out there or any sort of timing around that to be expected?

Brian Wenzel: And just on the credit tightening side, I know you've discussed some more actions there, positioning yourself for 2024. But at the same time, you know, you weren't leading it as hard as your peers. You were sort of ahead of the curve there. Just wondering, you know, what would cause you to lean back in at this point? Is there any sort of signals you're looking for out there or any sort of timing around that to be expected?

But at the same time, if you arent meeting it as hard as your peers you were sort of ahead of the curve. There just wondering what would cause you to lean back in at this point is there any sort of signals you are looking for out there or any sort of timing around that.

<unk>.

Speaker 9: Just to be clear, going back into leasing credit or to other things. When you might, you know, widen the credit box again.

Just to be cleared the lean back into loosening credit or you.

Brian Wenzel: Just to be clear, to lean back into leasing credit or to the other day when you might, you know, widen the credit box again. Yeah. You know it's hard. We have a very good credit team that's consistently evaluating performance of the portfolio by partner, by vertical, by channel. And I think to some degree, we want to see how credit develops across the industry. Again, I talked about a share of consumers. So what other issuers are doing or not doing, you know, can't have a full throw effect on us.

You might when you might widen the credit box again.

Speaker 4: Yeah, you know, it's hard. We have a very good credit team that's consistently evaluating performance of the portfolio, by partner, by vertical, by channel. And I think to some degree, we want to see how CRED develops across the industry. Again, I talked about a share of consumers. So what other issuers are doing or not doing?

Yeah.

We have a very good credit team there that's consistently evaluating performance of the portfolio by partner by vertical by channel and I think to some degree we want to see how <unk> develops across the industry again, I talked about a share of consumer so what other issuers are doing or not doing.

Speaker 4: You know can't have a full throw effect on so so again We'll watch those things is there's not a telltale sign say you know once this happens We will go but our team you have a lot of tools. We use a lot of data You know, we're using much more decision trade

Can have a flow through effect to us. So so again, we will watch those things is there is not a telltale signs that once this happens we will go but our team has a lot of tools. We use a lot of data we're using much more decision tree and non score based measures in order to assess that again the data elements of the different partners will tell us out of the consumers' performing.

Brian Wenzel: So again, we'll watch those things. There's not a telltale sign to say, you know, once this happens, we will go. But our team has a lot of tools. We use a lot of data. You know, we're using much more decision trade and non score based measures in order to assess that. And again, the data elements that we get from partners will tell us how the consumers performing. So we'll continue to look at that.

Speaker 4: and non-score-based measures in order to assess that. And again, the data elements that we get from partners will tell us how the consumers performing. So...

Speaker 4: We'll take you look at that and again, you know, Brian said it, I said we don't move the credit box around that often because our partners want consistency and origination. Our customers want to have consistent underwriting from us. And that's that's part of our lower line low and gross strategy.

We will continue to look at that and again.

Brian Wenzel: And again, you know, Brian said it. I said we don't move the credit box around that often because our partners want consistency and origination. Our customers want to have consistent underwriting from us. And that's that's part of our lower line low and gross strategy. Thank you.

Brian said it I said, we don't move the credit box around that often because our partners want consistency in origination our customers want to have consistent underwriting from us and that's that's part of our lower line.

Our loan growth strategy.

Speaker 1: Thank you. We'll move next to John Pincari with the Record ISI. Please go ahead.

Thank you.

John Pincari: Well, we'll move next. John Pincari with Evercourt ISI. Please go ahead.

Well move next to John <unk> with Evercore ISI. Please go ahead.

Good morning.

John Pincari: Morning. Regarding the back of the late stage, can you maybe just give us a little bit of color, how do you think about the timing of the offset that you're negotiating at this time? You know, with your partners, you mentioned pricing and I'm assuming there's other factors, maybe if you could just talk about the, you know, once the rule goes in place, what's at the timing should we expect in terms of being able to see some of the offset to that initial impact?

Good morning, Jim.

Speaker 10: Regarding the back to the late seeds, can you maybe just give us what we're going to call or how to think about the timing of the offset that you're negotiating at this time with your partners when you mention pricing and I'm assuming there's other factors maybe if you could just talk about the you know once the rule goes in place what type of timing should we expect in terms of being able to see some of the offset to that initial impact.

Regarding the back to the late fees can you, maybe just give us a little bit of color on how to think about the timing of the offset that you're that you're negotiating at this time with your partners you mentioned pricing and Im assuming theres. Other factors, maybe if you could just talk about the.

Once the rule goes in place what type of timing should we expect in terms of being able to see some of the offset to that.

Initial impact.

Yes, so look I mean, obviously there are still things related to timing that we don't know yet and primarily that's when when the rule goes into effect.

Speaker 10: Yeah, so look, obviously there's still things related to timing that we don't know yet. And primarily that's when the rule goes into effect, the impact of any litigation as well as the implementation period in the final rule. You know, the original rule has written with 60 days, which is clearly not enough time to get this done. So we think that, you know, hopefully it'll be longer than that.

John Pincari: Yeah, so look, obviously there's still things related to timing that we don't know yet. And primarily that's when, when the rule goes into effect, the impact of any litigation as well as the implementation period in the final rule. You know, the original rule has written with 60 days, which is clearly not enough time to get this done. So we think that, you know, hopefully it'll be longer than that. And those are the discussions that we're having with each of our partners.

The impact of any litigation as well as the implementation period in the final rule.

The original rule as written was 60 days, which is clearly not enough time to get this done. So we think that hopefully it will be longer than that.

Speaker 10: And those are the discussions that we're having with each of our partners. And that will influence the nature of the pricing actions and the timing in which they go in. I can't be really more specific than that, but we've got a really good plan in place, partner by partner. We've been working on this for over six months. We feel good about the conversations that we've had and the actions that we're going to take if the final rule goes into effect is written.

Are the discussions that we're having with each of our partners and.

John Pincari: And that will influence the nature of the pricing actions and the timing in which they, in which they go in. I can't be really more specific than that, but we've got a really good plan in place, partner by partner. We've been working on this for over six months. We feel good about the conversations that we've had and the actions that we're going to take if the final rule goes into effect is written.

That will influence the nature of the pricing actions and the timing in which they which they go in.

John Pincari: Okay, thank you.

I can't be really more specific than that but we've got a really good plan in place partner by partner, we've been working on this for over six months.

We feel good about the conversations that we've had and the actions that we're going to take if the final rule goes into effect as written.

Okay. Thank you.

Speaker 8: Okay, thank you. And my second question is kind of a two-parter. First of all, the incremental credit actions that you implemented in the third quarter, you may be just elaborate there around what exactly you did in the third quarter versus what you've been doing previously. You've been separately mentioned that the...

John Pincari: My second question is kind of a two-parter. First of all, the incremental credit actions that you implemented in the third quarter, maybe just elaborate there around what exactly you did in the third quarter versus what you've been doing previously. You've been separately, you mentioned that the RSAs are not as heavy in the health of all this sector, or business line. Can you talk about how much lower and then other product areas that may also have a lower RSA?

Second question is kind of a two parter first one.

The incremental credit actions that you implemented in the third quarter can you maybe just elaborate there around.

What exactly you did in the third quarter versus what you've been doing previously you've been separately you mentioned that the.

Speaker 10: RSAs are not as heavy in the health of all this sector D or business line. Can you talk about how much lower and then other other product areas that may also have a lower RSA? Thanks.

RSA.

The amount is heavy in the health and wellness sector.

Our business line can you talk about.

How much lower and then other other product areas that may also have a lower RSA.

Speaker 4: Yeah, so with regard to the credit actions we took, a lot of it is around originations, but not around necessarily score cutoffs as much as it is.

Yes.

John Pincari: Thanks. Yeah, so with regard to the credit actions, we took a lot of it is around originations, but not around necessarily score cutoffs as much as it is. Different out data elements are different criteria that we factor differently in account of originations. We also are working on account management type actions, so figures that come from the bureaus of certain attributes are criteria where we would turn in a form or watch to a car line decrease or a closed account.

In regard to the credit actions we took.

A lot of it is around originations, but not around necessarily score cutoffs as much as it is different data elements are different criterias that we factored differently in account originations we also.

Speaker 4: different data elements or different criteria that we factor differently in account of originations. We also are working on account management type actions so figures that come from the bureaus of certain attributes or criteria is where we would turn in a form or watch to a prior line decrease or a closed account. So those are the five two flavors of it. Again, it's honestly a shift in cutoff. It's really focusing on different criteria that are coming into our underwriting account management engine.

Our working on account management type actions, so it triggers that come from the bureaus.

Certain attributes or criteria, where we return in a form or watch to a a credit line decrease or closed accounts. So those are the two flavors of it again, it's honestly shipping cutoff, it's really focusing on different criteria that are coming into our underwriting account management engine.

John Pincari: So those are the five two flavors of it. Again, it's honestly a shift in cutoff, it's really focusing on different criteria that are coming into our underwriting account management engine. With regard to the second part of your question on the RSA, you know, we just highlight, you know, health and wellness, and I think we said it forward, you know, there's not a lot of RSA sitting in that particular sales platform, so it's that platform grows at a faster rate as a little bit of an influence on the overall RSA for the company. Outside of that, we're not going to go into the different sales platforms from there, because we're just going to have some level into the sales platforms. Okay, thanks, Brian.

Saul Martinez: Thanks, Sean.

Speaker 4: with regard to the second part of your question on the RSA, you know, we just highlight, you know, health and wellness, and I think we said it before, you know, there's not a lot of RSA sitting in that particular sales platform. So is that platform grows at a faster rate as a little bit of an influence on the overall RSA for the company outside of that? We're not gonna go into the different sales platforms from there, because we're just do have some level in each of the sales platforms. Okay.

With regard to the second part of your question on the RSA.

I'll just highlight.

The wellness.

And I think we said it before there's not a lot of RSA sitting in that particular sales platform. So as that platform grows at a faster rate is a little bit of an influence on the overall RSA for the company outside of that we're not going to go into the different sales platforms from there because the risk to have some level in each of our sales platforms.

Okay. Thanks, Brian .

Thanks and have a good day.

Saul Martinez: Have a good day.

Speaker 1: Thank you. We'll take our next question from the here Batia with Think of America. Please go ahead.

Thank you we'll take our next question from Mihir Bhatia with Bank of America. Please go ahead.

Rick Shane: Thank you.

Rick Shane: We'll take our next question from here, Batia with Think of America. Please go ahead. Good morning. Thank you for taking my question. What did it start with? Just going back to the discussion around credit. You know, your credit items sort of fully are implied. I think a full queue, pretty close to the 5.5%, you know, getting back to your long-term target. That was curious on how you see that evolving. You know, you've talked about keeping underwriting pretty 30, but you've also tightened.

Speaker 11: You're morning. Thank you for taking my question. What is it start with just going back to the discussion around credit? You know, your credit guidance for the full year implies I think a full queue pretty close to the 5.5%. You know, it's getting back to your long term target. That was curious on how you see that evolving. I know you've talked about.

Good morning. Thank you for taking my question I wanted to start with.

Just going back to the discussion around credit.

Credit guidance for the full year implies I think <unk> pretty close to the $5 five but that it's getting back to your long term target.

Curious on how you see that evolving I know you've talked about.

Speaker 11: keeping underwriting pretty 30 that you also tighten. We've seen some pretty fast normalization here in the back half of this year. Do you think it gets about your 5.56% target for a little bit in 2024 before coming back down? You know, kind of a gift back from the strong news you had over the last couple of years.

Underwriting pretty steady, but you've also.

Rick Shane: We've seen some pretty fast normalization here in the backhouse of this year. Do you think it gets about your 5.5% to 6% target for a little bit in 2024 before coming back down? You know, kind of a gift back from the strong news you had over the last couple of years?

Pretty fast normalization here in the back half of this year.

Above five.

Five 5% to 6% target for a little bit in 2024 before coming back down you don't kind of get back from the strong you had over the last couple of years.

Speaker 4: Yeah, well, good morning, my here. You know, the first thing I'd say, and I don't think we've got enough credit for it as a company, but we still haven't reached, and again, I know it's seven basis points in one. We still not have reached our pre-pandemic, the win-quity metrics.

Yeah, Good morning, Lee here.

Brian Wenzel: Yeah, well, good morning, you know, the first thing I'd say, and I don't think we've got enough credit for it as a company, but we still haven't reached, and again, I know it's seven basic points at one. We still not have reached our pre-pandemic delinquency metrics. I think there's only a couple of issuers that are in that category. So I wouldn't, I wouldn't, I think we shouldn't undersell that number one. I think number two, when you look at the performance, I'm not sure I would characterize it accelerating in the fourth quarter.

First thing I'd say.

And I don't think we've got enough credit for it as a company.

But we still haven't reached and again I know at seven basis points and we still not have reached our pre pandemic delinquency metrics I think theres only a couple of issuers that are in that category. So I wouldn't I wouldn't I think we shouldnt undersell that number one I think number two when you look at the performance.

Speaker 4: I think there's only a couple of issuers that are in that category. So I wouldn't, I wouldn't, I think we shouldn't undersell that number.

Speaker 4: I think number two, when you look at the performance, I'm not sure I would characterize it accelerating in the fourth quarter. If you go back and look at the growth on a dollar basis.

Not sure I would characterize it as accelerating in the fourth quarter. If you go back and look at the growth on a dollar basis.

Brian Wenzel: If you go back and look at the growth on a dollar basis in 17 and 18 and average versus this, you know, they grew on average 18 to 19 percent. In the 17 and 18 period, we grew, you know, in this quarter, 18 and 20 percent, on a 30 plus and 90 plus basis. So probably in line, when I say we'll see the value when you look at the growth of percentages, you know, if you think about BEPS, they were 40 and 20 or 50 and 20, were 56 and a little bit over over 20.

Speaker 4: on 17 and 18 on average versus this, you know, they grew on average 18 to 19 percent. And the 70 and 18 period and we grew, you know, in this quarter 18 and 20 percent, on a 30 plus and 90 plus basis. So probably in line, when I say we'll see the value when you look at the growth of percentages.

In 17, and 18 on average versus this they grew.

On average 18% to 19%.

70, <unk> period, and we grew in this quarter 2018, and 20% on a 30, plus 90 plus basis. So.

Probably in line I would say, we will seasonality when you look at the relative percentages.

Speaker 4: you know, if you think about BEPS, they were 40 and 20 or 50 and 20 or 56 and a little bit over over 20. So there's not a big deterioration. I sit here and say characterizing that way. You know what? As we look at the...

If you think about <unk>, they were 40% and 20 or $50 $20 56 in a little bit over over 20%. So it's not there's not a big deterioration I would sit there and say characterize it that way.

Brian Wenzel: So it's not, there's not a big deterioration. I'd sit there and say characterize it that way. You know what, as we look at the The performance for Natchargos next year is a full year basis. One of the reasons why I think we've taken a little bit here, getting in the share consumers, we're trying to maintain losses inside that five and a half to six. And saying at the portfolio well to perform there, because that's where we think the optimized risk adjusted margin is for us as a company.

As we look at the.

Speaker 4: the performance for next hard loss next year, the full year basis, one of reasons why I think we've paid in a little bit here, again getting the share consumers, we're trying to maintain losses inside that five and a half to six.

The performance for net charge offs next year as a full year basis, one of the reasons why I think we've tightened a little bit here given the share consumers we're trying to.

Maintained losses inside that five five to six and selling at the portfolio well to perform there because thats, where we think the optimized.

Speaker 4: and turning it to portfolio well to perform there because that's where we think the optimize.

Speaker 4: uh... risk adjusted margin is for us in the company no others you know clearly are thinking now that they're there were they're willing to take a higher net hard-off rate uh... and lower margin that's not where we want operate company the plate apples not as effective for us

Risk adjusted margin is for us as a company I know others clearly our thinking now that theyre going to they are willing to take a higher net charge off rate.

Brian Wenzel: I know others, you know, clearly are thinking now that they're willing to take a higher Natchargos rate. And a lower margin. And that's not where we want to operate this company in the playcaples, not as effective force. So we're going to this point around that. So again, when I look at that and you go back to earlier in the call, I talked about some of the vintage performance and other things that we see that gives us, you know, some of them will comfort that we have a pretty good view of the directory.

Brian Wenzel: Thank you.

And a lower margin thats, not where we want operating company and deploy capital is not as effective for us.

Speaker 4: So we're going to be this point around that. So again, when I look at that and you go back to early in the call, I talked about some of the vintage performance and other things that we see that gives us, you know, some of us will comfort that we have a pretty good view of the trajectory.

So we're going to discipline around that so again when I look at that and if you go back to earlier in the call I talked about some of the vintage performance.

And the other things that we've seen it gives us.

Some level of comfort.

We have a pretty good view of the trajectory.

Speaker 7: No, thank you. And then maybe just switching gears completely a little bit. We're gonna ask about the BNBL offering at low.

Thank you.

Mihir Bhatia: And then maybe just switching to completely a little bit. We're going to ask about the BNBL offering at loads. You know, BNBL obviously not as topical today as maybe 12 or 24 months ago, but I think he rolled it out this quarter or very recently. It looks like you have the exclusive provider for the BNBL offering there. And it's a white label. Basically also synchrony pay, which they're calling loads pay. Now, what do you want to do?

And then maybe just switching gears completely a little bit I wanted to ask about.

The <unk> offering at Lowe's.

Speaker 11: You know BNP are obviously not as topical today as maybe 12 or 24 months ago. But I think he ruled it out this quarter or very recently. It looks like you have the exclusive provider for the BNP offering there. And it's a white label basically up with Synchrony Pay which they're calling Lowe's Pay. Now what I was wondering if you could just expand on that a little bit. Just talk about.

It'll be all obviously not.

Topical today, as maybe 12 or 24 months ago, but I think we've rolled it out this quarter or very recently it looks like you have the exclusive provider for the BNP offering there.

The white label, basically help with synchrony payer, which they're calling lowest fare.

I wanted to I was wondering if you could just maybe expand on that a little bit just talk about.

Mihir Bhatia: You can just get the expand on that a little bit. Just talk about, you know, what are the economics look like? Is it tied to your card offering in some way? Is this a competitive process? Is this an aim? Are you looking to expand and build out with other retailers? Are you thinking about that product?

Speaker 11: you know, what do the economics look like? Is it tied to your card offering in some way? Is this a competitive process? Is this an area you're looking to expand and build out with other retailers? Are you thinking about that product?

What are the economics look like is it tied to your cloud offering in some way with the competitive process that area youre looking to expand and build out with other retailers and how you're thinking about that product.

Yes, sure so maybe to start more broadly I think.

Speaker 10: Yeah, sure. So maybe to start more broadly, you know, I think this has been an area where we've been investing with our partners. I think the pay later products that we offer it's a great way really just to engage more customers and offer them a new financing offer that's got really nice utility. We are seeing proof that the product does provide both value to us and to our partners.

Brian Doubles: Thank you. Yeah, sure. So maybe just start more broadly. You know, I think this has been an area where we've been investing with our partners. I think the pay later products that we offer. It's a great way really just to engage more customers and offer them a new financing offer. It's got really nice utility. We are seeing proof that the product does provide both value to us and to our partners. You know, if you look at the results this quarter year over year, we've grown installment and pay later products 29%.

This has been an area, where we've been investing with our partners I think the pay later products that we offer it as a great way really just to engage more customers.

And offer them a new financing offer that's got really nice utility.

We are seeing proof that the product does provide both value to us and to our partners.

Speaker 10: You know, if you look at the results this quarter year over year, we've grown installment and pay later products 29%.

If you look at the results this quarter year over year, we've grown installment and pay later products 29%.

Brian Doubles: So we're clearly over indexing in that product. You know, so you're pretty good. You know, I think the multi product strategy that we've been talking about for well over a year now is starting to pay off and you're seeing that with what we announced and launched with lows. You know, the lows pay is a white label version of that. And so one of the things that's really important. Our strategy is flexibility, both in terms of how we offer the product inside of our partners, but flexibility to the consumer as well.

Speaker 10: So we're clearly over indexing in that product. You know, so you took pretty good, you know, I think the multi-product strategy that we've been talking about for a well over a year now is starting to pay off and you're seeing that with what we announced and launched with lows.

So we're clearly over indexing in that product. So we can feel pretty good I think the multi product strategy that we've been talking about for well over a year now is starting to pay off and you are saying that with what we announced and launched with Lowe's.

Speaker 10: You know, the lowest pay is a white label version of that. And so one of the things that's really important to our strategy is flexibility both in terms of how we offer the product inside of our partners, but flexibility to the consumer as well. So we're willing to offer that as synchrony pay later. And we do that for a number of partners.

The lowest pay as a white label version of that and so one of the things that's really important to our strategy.

Is flexibility both in terms of how we offer the product inside of our partners, but flexibility to the consumer as well. So we are willing to offer that as synchrony pay later and we do that for a number of partners.

Brian Doubles: So we're willing to offer that as synchrony pay later and we do that for a number of partners, or we're also willing to white label it, which I think is a real competitive advantage for us because a lot of partners are a lot of competitors are not willing to do that. We're seeing really good traction. I'm along so far, and we're just really pleased to be able to offer another product inside of our lowest partnership.

Speaker 10: We're also willing to white label it, which I think is a real competitive advantage for us because a lot of competitors are not willing to do that. We're seeing really good traction on the launch so far, and we're just really pleased to be able to offer another product in front of our lowest partnership.

We're also willing to white label at which I think is a real competitive advantage for us because a lot of partners or a lot of competitors are not willing to do that.

We're seeing really good traction on the launch so far and we're just really pleased to be able to offer another product inside of our lowest partnership.

Okay. Thank you.

Brian Doubles: Thank you. Thanks. Thanks me here.

Donald Fandetti: Thank you.

Thanks, Thanks Pierre.

Speaker 1: Thank you. We'll take our next question from Don Fendetti with World Swargo. Please go ahead.

Thank you we'll take our next question from Don Vendetti with Wells Fargo. Please go ahead.

Donald Fandetti: We'll take our next question from Don Fendetti with Wells Fargo. Please go ahead.

I.

Speaker 10: I'm a little bit more about the health of the consumer in terms of the lower end versus the higher end. And also do you feel more comfortable on one or the other based on what you're seeing going forward?

Brian Wenzel: I'll cut a little bit more about the health of the consumer in terms of the lower end versus the higher end, and also do you feel more comfortable on one or the other based on what you're seeing going forward? Yeah, so I think when you look at the consumer across three different metrics, the spending metrics, the payment metrics, and then obviously the credit metrics. Let me start with the credit first. That consumer is the one who is struggling with these little bit more of those back to pre-pandemic levels in delinquency and their performance in delinquency, and then deeper, non-prime performing a little bit worse.

Took a little bit more about the health of the consumer in terms of the lower end versus the higher end and also do you feel more comfortable on one or the other based on what youre seeing going forward.

Yes, So I think when you look at the consumer across three different metrics the spending metrics.

Speaker 4: Yeah, so I think when you look at the consumer across three different metrics, the spending metrics.

Speaker 4: on the payment metrics and then then obviously the credit metrics. Let me start with credit first. You know, that that consumers the one who is struggling with a little bit more of those back to pre-pandemic levels.

The payment metrics and then obviously the credit metrics, let me sorry, Craig first.

That consumer is the one.

Who is struggling we see little bit more of those back to pre pandemic levels.

Speaker 4: in delinquency and their performance in delinquency and then deeper, not on prime, a performing a little bit worse. So from a credit standpoint, they get in delinquency. They don't really have the ability to secure out of it and are using other forms like settlements and that's certainly companies in order to kind of solve some of it. And that to be expecting this environment that they just don't have as much access to liquidity. Again, what's keeping that consumer base going is a broad base.

In delinquency and their performance in delinquency and then deeper non prime outperformed a little bit worse. So so from a credit standpoint.

Brian Wenzel: So from a credit standpoint, they get into delinquency, they don't really have the ability to cure out of it, and they're using other forms like settlements, and that's only companies in order to kind of solve some of it. And that to be expecting this environment, they just don't have as much access to liquidity. Again, what's keeping that consumer based going is a broad-based wage increase that has helped fuel that. So even though they may have spent the dollars that they got through the pandemic, stimulus packages, they do see larger wage gains.

They get in delinquency, they don't really have the ability to secure out of it and are using other forms like settlements and debts.

That's only companies in order to kind of solve some of it and that's to be expected in this environment. There just don't have as much access to liquidity again, what's keeping that consumer base going as a broad based.

Speaker 4: wage increase that has helped fuel that so you know they may have spent the dollars that they got to the pandemic You know stimulus packages They do see larger wage again So so again, what we're continuously is why the transaction values are a little bit lower for them the frequencies up and they're continuing to spend it we think a very

Wage increase that has helped fueled that so even though they may have spent the dollars that they got through the pandemic.

Stimulus packages, they do see larger wage again, so so again, we're continuing to see as one of the transaction values are a little bit lower within the frequencies up and they're continuing to spend that we think are very.

Brian Wenzel: So again, what we're continuously is why the transaction values are a little bit lower for them, the frequencies up, and they're continuing to spend it. And we think a very manageable pace. Again, when we look at our book, and I look at the average balance in our book, you know, please look at 19 versus now, it's up a cag are 5%. And you open it up a little bit more. So I think the consumer is being relatively disciplined, and there is more liquidity in the system for them.

A very manageable pace again, when we look at our book and I look at the average balance in our book.

Speaker 4: a very manageable pace. Again, when we look at our book, and I look at the average balance in our book, you know, for, please look at 19 versus now, it's up a cag or 5%. And you'll put a bies up a little bit more. So I think the consumer is being relatively disciplined and there is more liquidity in the system for them.

Please look at 19 versus now it's up a CAGR of 5% and the open to buys up a little bit more so I think the consumer is being relatively disciplined and there is more liquidity in the system for them clearly when we look at the high end consumer high end consumer is performing incredibly well their payment rates remain above 2019 levels they are showing strength.

Brian Wenzel: Clearly, when we look at high-end consumer, the high-end consumer is performing credible. Other payment rates remain above 2019 levels. They are showing strength. You know, we've skewed an high end of a prime up, probably three percentage points in the super high end, which also has helped the portfolio performance. So again, we feel good when I look at the entire portfolio, you entry into the winquencies still below 2019 levels. Thanks, Brian. Thank you.

Speaker 4: Cruelling, we look at high-end consumer, the high-end consumer is before incredible, while their pain rate is remaining above.

Speaker 4: 2019 levels, they are showing strength. You know, we've skewed an high end of a prime up, probably three percentage points in the super high end.

We've skewed in the high end of prime up by three percentage points in the Super High end, which also has helped the portfolio performance. So again, we feel good when I look at the entire portfolio entry into delinquency is still below 2019 levels.

Speaker 4: which also has helped the portfolio performance show.

Speaker 4: Again, we feel good when I look at the entire portfolio, you entry into the winquimsy is still below 2019 models.

Thanks, Brian .

Thank you.

Yes.

Speaker 1: Thank you. We'll take our next question from Rick Shane with JP Morgan. Please go ahead.

Thank you we'll take our next question from Rick.

Rick Shane: We'll pick our next question from Rick Shane, which AP Morgan, please go ahead. Hey guys, thanks for taking my question this morning. Most have been asked and answered, but I just want to talk a little bit more about the RSA guide in the improvement there when we look at the chart. Charge operate when we look at in, when we look at everything, it looks like everything is kind of within the range, but of expectations, both from an originals perspective at the beginning of the year and from the second quarter perspective.

Shane with J P. Morgan. Please go ahead.

Hey, guys. Thanks for taking my question. This morning, most have been asked and answered but I guess.

Speaker 12: Hey guys, thanks for taking my question this morning. Most have been asked and answered, but I guess we'll talk a little bit more about the RSA guide and the improvement there when we look at the...

Talk a little bit more about the RSA guide.

And the improvement there when we look.

At the.

Speaker 12: charge operate when we look at NIN, when we look at everything, it looks like everything is kind of within the range, but of expectations both from an original perspective at the beginning of the year and from the second quarter perspective. But for whatever reason you feel like the RSA charges did it be down a little bit, is that really just a function of mix or what else is contributing to that.

Charge off rate when we look at NIM when we look at everything it looks like everything is kind of within the range but.

Missions, both coming.

Originals perspective at the beginning of the year and from a second quarter perspective.

Rick Shane: But for whatever reason, you feel like the RSA charges to be down a little bit. Is that really just a function of mix or what else is contributing to that? Yeah, thanks for the question, Rick. It really is mixed between the platforms and between the portfolios and there. Each of these arrangements are different. They're unique by partner. So so certain partners are certain partners, excuse me, are performing better than others. Certain certain ones have volume based measures as well. So it really depends on where that volume goes and the performance of the individual portfolio. So that is the main driver. Okay, great. Thank you. Thanks for it.

But for whatever reason you feel like the RSA charge is going to be down a little bit.

That really just a function of mix from what else is contributing to that.

Speaker 4: Yeah, thanks for the question, Rick. It really is mixed between the platforms and between the portfolios and there. Each of these arrangements are different. They're unique by partner. So certain partners, or certain partners, excuse me, are performing better than others. Certain ones have volume-based measures as well. So it really depends on where that volume goes and the performance of the individual portfolio. So that is the main driver. Okay, great. Thank you.

Yes. Thanks for the question Rick It really is mixed between the platforms into doing the portfolios in there each of these arrangements are different there.

They are unique by partner so certain quarters are certain partners excuse me are performing better than others.

Certain ones have volume based measures as well so it really depends on where that volume goes and the performance of the individual portfolio. So that is the main driver.

Okay, great. Thank you.

Thanks for thanks, Rick.

Speaker 1: And we will take our next question from Sao Martinez with HSBC. Please go ahead.

And we will take our next question from Saul Martinez with HSBC. Please go ahead.

Saul Martinez: And we will take our next question from Saul Martinez with HSBC. Please go ahead. Hi, good morning. Thanks for taking my question. You know, look at questions I'm going to ask, but maybe I think you can just go back to your comments on your levels and your attitudes and where we go from here. You know, I guess that your reserves, you should be indicating that you feel comfortable with your reservations. And you are, I think still about 40 to 50 base points if I'm not mistaken about your day one fee for the rounds level. But you are expecting the MCO to normalize and move higher. I would expect your losses that will flow through your reasonable affordable period. We'll be moving higher and we'll move forward.

Speaker 7: Good morning, thanks for taking that question. You know, look for questions I'm going to ask, but maybe I think you can just go back to your comments on the zers level and the zers at the feet and then where we go from here. You know, I guess that you're a zers.

Hi, good morning, Thanks for taking my question.

Most of my questions have been asked but maybe if you could just go back to.

Your comments on reserve levels and reserve adequacy.

Where we go from here.

I get that.

Speaker 7: You're cheating and you're creating that, you feel comfortable with your, your revelations. And you are, I think still about 40, 50 base points that the amount of stake in above the day when CSO rounds level. But you are expecting the MCO to normalize and move higher, I would expect.

You seem to be indicating that you feel comfortable with your reserve ratio.

I think still about 40 50 basis points, if I'm not mistaken about the day when seasonal allowance levels, but you are expecting npls to normalize and move higher I would expect losses that will flow through the reasonable supportable period will be moving higher as we move forward, but maybe you can comment on.

Speaker 7: your losses that will flow through your reasonable affordable period. We will be moving higher and we will move forward. But should maybe you can comment on.

Saul Martinez: But maybe you can comment on your reserves outlook going forward and what would induce you to maybe build your reserves or what would need to happen for some additional reserves available and beyond what you need for growth. Yeah, thanks. Thanks for the question. So the way I was thinking about the reserve as we move forward is you should see a rotation as you stabilize in the length of season this normalization period that the quantitative model absorbs that trend line.

Speaker 7: on, you know, you would go forward and what would in this unit to maybe build those areas or what would need to happen for some additional reserve bills above and beyond what you need for growth.

You remove outlook going forward and what would induce you to maybe build reserves would need to happen.

For some additional reserve build above and beyond what we need for growth.

Yeah. Thanks, Thanks for the question. So the way I would think about the reserve as we move forward is you should see a rotation as you stabilize and delinquencies and as normalization period.

Speaker 4: Yeah, thanks. Thanks for the question. So the way I would think about the reserve as we move forward is you should see a rotation as you stabilize in the length of season, this normalization period that the quantitative model absorbs that trend line. And then as we get more comfortable with the macro backdrops, the effects of inflation, you know, as two loans, if they have an impact, you guys filter the portfolio, you'll see the qualitative piece to get me come down.

The quantitative model absorbs that trend trend line and then as we get more comfortable with the with the macro backdrops the effects of inflation.

Saul Martinez: And then as we get more comfortable with the macro backdrops, the effects of inflation, you know, as two loans, if they have an impact flow through the portfolio, you'll see the qualitative piece begin to come down. And effectively offset that and then you'll move down ultimately, we think towards that day one level. If the assumptions come in generally as we think about it, if you think about incremental provisioning on a rate basis here, again, most of the time we were talking about things that are growth driven in the portfolio, but truly rate rate of ones, you know, a couple of factors that we look at is clearly if you have a deterioration in collection performance that could do it, mainly that that's associated a lot of times with unemployment claims rising.

<unk> loans.

They have an impact flow through the portfolio, you'll see the qualitative piece begin to come down.

Speaker 4: And effectively offset that and then you'll move down ultimately we think towards that day one model.

Effectively offset that and then move down ultimately, we think towards that day one level.

Speaker 4: If the substance is from in general, as we think about it.

If the assumptions remain generally as we think about it if you think about incremental provisioning on a rate basis here again most of the time, we're talking about things that are growth driven.

Speaker 4: If you think about incremental provisioning on a rate basis here, again, most of the time we're talking about things that are growth-driven in the portfolio, but truly rate-rated ones. You know, a couple of factors that we look at is clearly, if you have a deterioration in collection performance, that could do it.

And the portfolio, but purely rate driven ones.

Couple of factors that we look at is clearly if you have a deterioration in collection performance that could do it.

Speaker 4: mainly it sets associated a lot of times with unemployment claims rising so that could be a second factor.

Mainly that sets associated a lot of times with unemployment claims rising so that could be that could be a second factor.

Saul Martinez: So that could be a second factor that kind goes in there, but collection performance and unemployment claims are two of the probably the bigger ones that we'd see. Again, we haven't seen trends in collections that would warrant that today. So we feel good about that. And unemployment claims have still remained historically low. So again, we think we factored into our reserve at the end of the third core, our quality of assessments for potentially deteriorating macro and we'll set the other place out. Okay. My words helpful, thanks. Thank you. Have a good day.

Speaker 4: that kind goes in there, but collection performance and on 20 claims are two of the probably the bigger ones.

That kind of goes in there, but collection performance in unemployment claims are two of the probably the bigger ones.

Speaker 4: that we'd say, again, we haven't seen trends in collections.

Let's see.

Again, we haven't seen trends in collections.

Speaker 4: That would warrant that today. So so we feel good about that and on a plumbing claims are still remain historically low so

That would warrant that today, so we feel good about that and unemployment claims as still remained historically low so.

Speaker 4: Again, we think we factored into our reserve at the end of the third quarter, our quality of assessments for potentially deteriorating macro, and we'll set the Seattle upload it out.

Again, we think we factored into our reserve at the end of the third quarter qualitative assessments for a.

Potentially deteriorating macro would set to see how that plays out.

Okay. That's helpful. Thanks.

Thank you have a good day.

Speaker 1: And we are a lot of time for questions today, so we will take our final question from Erin Saganavit. Please, city, please go ahead.

Okay.

And we our allotted time for questions. Today. So we will take our final question from Erin Zyuganov. It with Citi. Please go ahead.

Operator: And we are a lot of time for questions today.

Operator: So we will take our final question from Aaron Saganavit.

Aaron Cyganovich: Please, city, please go ahead. Thanks. I'll be quick. A little bit of your your share bybacks came down just the touch. You talk about the your outlook for bybacks in the quarter of that.

Thanks.

Speaker 10: Thanks, I'll be quick. A little bit of your share bybacks came down just a touch. You talk about the your outlook for bybacks in the quarters ahead.

Quick couple of your peers share.

Share buybacks came down just a touch.

Can you talk about your outlook for buybacks in the quarters ahead.

Yes first of all good morning, Erinn glad we were able to get your question in with a very little buybacks. What we generally do not give or we have not given quarterly guidance with regard to.

Speaker 4: Yeah, first of all, good morning, Aaron. Glad we have to get your question in. With the regular buybacks, we generally do not give or we have not given quarterly guides with regard to how their purchase flow out for the quarter. At the end of the quarter, we paid $150 million remaining under the

Brian Wenzel: Yeah, first of all, good morning, Aaron. Glad we have to get your question in. With the regular bybacks, we generally do not give or we have not given quarterly guides with regard to how their purchase flow out for the quarter. At the end of the quarter, we ate 150 million dollars remaining under the current share of purchase authorization as we move through the end of the capital year in June of next year.

How their purchase flow out for the quarter at the end of the quarter, we had $850 million.

Remaining under the current share repurchase authorization as we move through the end of the capital year.

Speaker 4: Share a purchase authorization as we move through the end of the capital year.

Speaker 4: you know, in June of next year. What I probably want to be clear about with regard to that level for a second is what's not really driving through the balance of the dollar amount. So, you know, I just really want to be clear that it's not related to a change in the macro amount.

In June of next year.

Brian Wenzel: What I probably want to be clear about with regard to that that level for a second is what's not really driving to the back of the dollar now. So, so, you know, I just really want to be clear that it's not related to a change in a macro environment for us. Number one, two, it's not related to any any potential proposals on late fees and in three, it's not related to Basel 3 ending.

Probably wanted to be clear about with regard to that that level for a second is what's not really driving that the dollar amount. So.

I, just really want to be clear that is not related to a.

The change in the macro environment.

Speaker 4: for us number one two. It's not related to any potential proposals on late fees and in three. It's not related to Basel III and we have a set of mile markers.

For US number one two is not related to any any potential proposals on late fees and three.

It's not related to Basel, III, and we have a set of mile markers.

Brian Wenzel: We have a set of mile markers that we've set out in the capital plan that's more RWA based than really how our income kind of comes in versus plan. So, those are the factors and again, we considered the other factors, but that was not, you know, not factoring to our decision for the third quarter with purchases.

Speaker 4: that we've set out in the capital plan. It's more RWA based and then been really.

That we've set out in the capital plan, that's more <unk> based and then really.

Speaker 4: how our income kind of comes in versus plan. So those are the factors. And again, we considered the other factors, but that was not, you know, not factoring to our decision for the third quarter with vertices.

Our income kind of comes in versus plan. So so those are the factors and again, we consider the other factors, but that was not factored into our decision for the third quarter reverses.

Okay.

Thank you, John DeVries.

Thank you and good day.

Speaker 1: Thank you and this concludes synchronize earning conference call. You may disconnect your line at this time and have a wonderful day. Thank you.

Thank you and this concludes synchrony, earning conference call. You may disconnect. Your lines at this time and have a wonderful day. Thank you.

Thank you, and this concludes Synchrony's Erning Conference call. You may disconnect your line at this time and have a wonderful day. Thank you.

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