Synchrony Financial (SYF)

Greg Ketron Director of Investor Relations
Margaret Keane President & Chief Executive Officer
Brian Doubles Executive Vice President & Chief Financial Officer
Sanjay Sakhrani KBW
Terry Ma Barclays
Rick Shane JPMorgan
Chris Brendler Buckingham
Matthew O'Neill Autonomous Research
Dominick Gabriele Oppenheimer
David Scharf JMP Securities
John Hecht Jefferies
Call transcript
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Welcome to the Synchrony Financial First Quarter 2019 Earnings Conference Call. My name is Vanessa, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. the to turn now will call Mr. over I Relations. Ketron, Director Investor of Greg

Greg Ketron

everyone, Thanks for call. conference operator. joining and to Good morning welcome our quarterly earnings us. Thanks

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

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

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

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

President and accuracy Financial does our third-parties. authorized Synchrony complete Finally, on nor webcasts provided Keane, are Chief our our The teleconference questions. of this will guarantee and by Officer Chief After only located Executive is transcripts present call Vice Brian will Officer; Financial Executive and Doubles, we open we the edit President not Margaret for earnings presentation, website. responsible not morning. the for the results and up

pleasure turn to to the my it's over Now, call Margaret.

Margaret Keane

discuss which a net $X.XX income of maintained billion, basis, earnings several share. joining active continued receivables our being the thanks We the drive several up today. portfolio we which X%. slide held-for-sale, and On Walmart volume portfolio, $X.X detail Greg. is in $X.XX. begin results our impacted and by grew quarter for Walmart the over which core The per XX%. Brian us were XX% grew results the of or the in interest areas X%. call. generated solid release purchase of across first performance of loans to Loan reserve Included in generated Good average positively quarters everyone loan morning this accounts in business, key last Thanks receivables moved momentum helped will X. and more strong I'll the to XXXX. related the later excludes We growth on

partner We P.C. also recently Payment key our and partnership leading we analytics build appliance new have Solutions recently options Richard Son this and In a Son, valued will financing for to leverage to and our relationships card operated experience. enhance and renewed technologies mobile our extended P.C. customers. the sales a Richard marketing on platform, customer continue and consumer & exclusive further long-term some added family-owned extended partnership our extension is we program The provided and electronics in their will promotional which company. partnerships. with & and financing credit exciting

partnering and on marketing offers app credit and for service and a are special in their card. branded We payments, customers and receive programs which purchasing can shop, promotions and loyalty mobile

successful partnership. and We are long build on to excited continue this to

air financing range wide the a Rheem of with for and HVAC Rheem also a and more. products purchase announced conditioners, including We continue offers residential multi-year heating providing water commercial extension and to a and heaters of furnaces, services. products water program

forward for Rheem options and been to XX to value customers. to customers financing their Rheem look providing have We for deliver continuing years and

have will Payment continue Suzuki extension program. to Solutions signed platform, our access Qualifying buyers is extension. for powersports financing category, our one Powersports in longest and are this so to an Suzuki is in a us installment Suzuki category in options products dealer pleased and this Additionally, we special running offers to and network recently exclusive announce through marine multi-year for States. we its our the of of United important programs

six-month our that Care this the broader create Synchrony announced cards. needs. Cardholders we solution acceptance of ability now utility and even cover that is comprehensive to recently to have for network To strategic at to auto-related our our to categories Car One end, Car for more network our we grow parts priorities Care manage that expanded more greater acceptance one across use convenient categories, auto is a on financial payment The including spending their gas, resource XX also needs than XXX,XXX locations parking, now purchases service, more. Car card Synchrony Care $XXX. ridesharing for want than consumers auto to car washes, and and financing with method. valuable offers promotional

at back one on credit card card six or more, participating including to of cardholders now at in financing. months $XXX. up months to purchases promotional on The nationwide. offers HOME locations is valuable now purchases qualifying over rewards And under months financing Synchrony our million XX receive addition, cash accepted addition In X% purchases of promotional locations. is can This $XXX thousands for XX

this ticket they giving larger the card, for We flexibility purchases. the are on propositions home expand cardholders want to pleased value

the network expanding data We are this that be also platform, incorporates via machine patients and analytics will learning new CareCredit options. part new partnership experience estimates financial digital now payment Simplee. a with Simplee of CareCredit advanced a and to partnership, experience Through provide personalized our self-service

innovative the We are be happy network. to part Simplee of

into is our expand businesses. product adjacent example through the Another An extending complementary to and for business. entry strategic priority this of and us is diversify offerings

business This their Pets a options veterinarians need allow and expertise builds payment Best Our on decades get of of will a acquisition veterinary represents of agent. owners acquisition our in general the recent comprehensive pet entry us to care This families our to into pet. for complementary they market. the acquisition as for managing suite offer help pet the insurance

is that Pets our a adding enables products to our and offerings. acquisition seek, the type for This partners expand We offerings. excited Best network and are customers us and sense about our one to of we product makes

front. adding increased that and know usage you translates progress As ultimately considerable made have on utility to we

choose our of cards. Concurrent and of quarter. sales the has Retail mobile whatever to in channel in the been quarter Overall, rise cardholders important growing they utilization this for the rate CareCredit, over their ensure reuse use quarter channel for for XX% us. across is Equally our the use. have are penetration XX%. sales quarter e-commerce XX% Overall, experiences, a first same and consumers penetration last was with was Card For access growing. have we account XX% rewards to our was of been of first strong making of the cards information with to The digital digital online, shopping Digital our example, ease investments year. happening as application alone the

accounts growth primarily also strength active X%, on Interest for invest turn increased our We develop XX% Interest CareCredit XX%. future Interest Brian the luxury seamless fees Payment growth and quarter. program to fees up up over with average by platform, increased the In partnerships largely areas broad-based and Loans X%, delivered and to growth, digital loans XX%. financial loan and are slide growth. Purchase and loans receivable volume the organic were also another specialties. experiences. also technology on success. reclassification of was were volume grew continue driven they were our purchase of our increased of X%. loans X%. our and it results average offset resulted increased receivables growth. was the Card, home portfolio. furnishings and helping accounts PayPal then driven on increased growth products relationships, generate fees strong dental up excluding primarily for X% sales drive Walmart solid up solid last XX%. which to in led quarter. We the Credit veterinary few results and spend and innovative five on Walmart detail receivables to X% Retail a up generated continued valuable to over volume accounts strategic active Solutions remain and growth. acquisition, generate was platform sales was the that driven in the our on and loan by Purchase partner portfolio, customer These by across Average year I'll performance moments particular focus X%. loan X% renewing by X%, in but by results and Receivables our critical were of active

to our platforms, sales as to continue across the and partners our continued With growth extend turn utility call Brian. of deliver to card increase all and cardholders. solid add I'll solutions relationships, that, three we We value to over provide

Brian Doubles

a number start to per diluted being million generated held-for-sale on the slide billion or first areas. to after included the moved loans of We I'll million the This Margaret. the related we $XXX reserve share. The quarter. of EPS growth Thanks, portfolio to quarter $X.XX tax release totaled morning release year-over-year presentation. in of strong This earnings reported benefit Walmart quarter. $X.XX $XXX and or six provide $X.X an of the during

Interest were program year. on fees Excluding the PayPal Walmart loan addition last over portfolio, Credit loan receivables up XX%. and up the receivables reflecting last of year, the XX% were

RSAs improved reserve over generated with as also volume to as up with The average well year. growth XX% year. well active was X% balance growth. in build growth. expectations. program or the to trends quarter, was in million our core this from X% X.X% account last We growth we on positive last Lower Overall, deliver per a across returns continued percentage average drove $XXX as of growth active the the we're XX% receivables balances, solid for with the increased performance business, line increased RSAs in pleased as organic accounts compared as increase. the last average average risk-adjusted year. continued and Purchase average growth,

did release for later. We XXXX, more will in or from average to continue with to Credit XX% $XX prior to detail losses metrics we the to the program for the impacted in growth have Other which quarters, will presentation. to the and Credit the driven Walmart begun later PayPal provision run loan comparing detail percentage rate, decreased quality addition last of X.X% this X% versus asset receivables as the program, in X.X% The The or continue addition the cover and third PayPal a this compared primarily quarter last ahead I expenses be related in driven to the will certain of year. growth. million the expect of Walmart year, in beginning RSAs be program execute cost reserve the PayPal The $XXX related business we of range more million cover rate expenses increased until portfolio. year. to with by mainly against of year, by actions the the to quarters expense I later slow by conveyance growth are rate

in to capabilities, digital and our to also to make will the enhancements program, back deposit office. platforms our continue automate and direct strategic investments investments our sales We mobile and and streamline

program. growth. generate we strong of our to margin quarter. points impacting I'll as by interest-bearing to receivables net last XX.XX%. continued X XX.XX% We the compared addition net to receivables and of the rates. interest income Credit slide company interest increase with adding to due last liabilities results in costs. impact and X.XX% last loan increase from So the benefited PayPal program interest The an acquisition benchmark decline our The support in in margin and cover average in deployed the higher excess XX the margin receivables driven a receivables reflecting was up in of versus primarily Net The The the loan versus of a income total loan the was liquidity yield basis was Also was overall mainly margin Credit XX Credit of and a points PayPal first to liability liquidity yield expectations. XX.XX%, year, year move was basis the decline interest-bearing margin compared higher PayPal and on the year's mainly line was to cost receivables XX% growth. to program trends. mix

fluctuation margin will slight with overall, in a as year. the expectations. decline potential well portfolio our was the our the run to year including some quarter line in normal So continue later this range second as the We sale for Walmart seasonality around XX.XX% the margin to in with believe XX%

trends key X. our slide credit on cover I'll Next,

last In that expected delinquency the year. loan The trends. increase approximately $X the the X.XX% the to XX-plus prior nearly loan Walmart loan for portfolio held X.XX% terms sale of XX-plus in last period-end is and primarily receivables of sale. $XXX to to reclassification to the rates versus receivables of billion charge-off receivables, Only due expect which in with in million. remain specific Walmart delinquency quarter, I'll we the delinquency The delinquency dynamics was rate rate in to start X.XX% was the compared year, X.XX% was

percentage Given and continue receivables and high majority the on loan delinquencies delinquent of receivables the accounts for delinquency portfolio period-end Also is the that rates delinquent to represent held $XXX in the the PayPal Credit we in a in billion loan the of are of nearly program. report reported these of the in the period-end $X Walmart The skewed total. rates exclusion sale impacting receivables the higher. from the million addition

Credit the refinements improved approximately If points trends. that XX-plus you exclude improving of the rate to impact by of Walmart reflecting program the basis the stable PayPal delinquency XX-plus resulted in XX approximately five by have points, underwriting our portfolio improved impact and rate delinquency and the basis the credit

rate compared charge-offs. net Moving was last year. The net charge-off on X.XX% to X.XX% to

Credit program. was this offset by improve, from addition the PayPal of the impact partially to the continued trends credit While

charge-off down XX loan losses The of quarter and core the the release receivables fourth Credit program portfolio was as percent reserve X.XX% related was net to rate a Excluding build points for the basis million. Walmart last compared was $XX to Walmart the year. portfolio approximately excluding impact the the by from allowance PayPal the and reserve

As than expectations, lower improving our was I refinements we core made. from credit the reserve underwriting the resulting build to trends the noted earlier, due

occur the anticipate the the late the Looking million of be Walmart $XXX portfolio will range. by in sale third be driven build the to or million we average will and year. in still range We $XXX the expect still $XXX reserves reductions for and million forward, core $XXX in reserve early to quarter expect second will quarter in the growth additional the fourth third the related We largely in quarters. to this second to million

we higher XX second to We due be quarter also as to full basis in have XX recovery to begin program. to recoveries impact expect from closer prior points and of net to to as timing and see Credit quarters. the first X% in The of charge-offs the percentage been the addition compared quarter the the the average quarter rate of was we in the receivables PayPal a X.XX% running first

with in Credit most from in that accounting PayPal charge-off benefit program, the year. XXXX acquiring the is the net portfolio line Regarding our This now we through outlook. credit-related resulted expectations last included largely our of purchase are and

driven the portfolio Credit portfolio, by continue to later be range expect will impact increase of year-over-year charge-offs by the We XXXX the sale the net X.X% slight in this from offset with the for X.X% Walmart year. PayPal entirely to the partially

leveled-off effects to improvement is assuming the trends charge-off we to forward show conditions. the we our and Walmart continue of Excluding and summary, expect PayPal net with the trends in In move XXXX. rate expected are showing to stability have to economic as flat line credit stable and expectations be

returns. We to see for continue attractive growth opportunities risk-adjusted continued good at

growth. were billion, PayPal for slide expenses our expenses year, to and came last by quarter. I'll over Moving X, program and of at cover the $X in Overall, the primarily Credit acquisition X% up the driven

earlier, will this the on on to actions periods, efficiency ratio compared and execute certain same we for growth The line conveyance cost last year Walmart noted rate level this as I in was the later XX% prior ahead have year our we to begun quarter, and expectations. with the and the continue of to as As slow program execute progresses. year did the

funding our capital growth mix program. through liquidity Credit The the slide have while on-boarding and deploying levels capital to and XX. highlights we maintained key PayPal are, Moving strong and

which and year share the our We last increased we repurchases. size made the our of capital execution also announced deploying capital this progress on dividends the plan through May, of

sheet a profile. liquidity are We to capital balance robust with a and maintaining strong committed

deposits our deposits This direct or program. the last year, puts our XX% to billion $X.X through deposit primarily XX%, funding grown compared our at of XX% Over year. we've last

notes, five-year million to continuing In had continue We growth. $XXX we we as to ability demand to in out rates The growth retain Overall, expect with and by issued significantly service, $XXX attract billion line in were oversubscribed. attractive having maturity. our Longer expect a deposits pleased with our grow to direct receivables continue a strong having and as issuances senior deposit million digital our well in March, term, great to with drive offer unsecured are XX-year $X.XX our building to customer and our maturity deposit we customers. and program capabilities.

year, and of to liquidity. III our under We Turning acquisition reflecting through continued growth impact capital the and Basel XX.X% This capital execution phased-in phased-in capital a Credit deployment quarter of CETX portfolio compares on ended to fully last plan. the basis at the the PayPal fully of rules. XX.X% the

we on stock to board $X.XX announced X.X a our During paid of quarter the share during share million last completes XXX the dividend XX.X shares approved plan May. we per execute million stock during We This repurchased and of the quarter. repurchase the first capital repurchased the continued represented and common quarter, last May. common billion program

plan. capital XXXX our Regarding

Our March. reviewed the plan and the and in of similar This our Directors plan Board timeline regulators by was late is years. to submitted in we our approved to previous

nearly deployment our was to XX.X% supporting program assets. the is from acquisition. support of we continue on strategy XX% credit execute growth. to year, PayPal we the Overall, last While buybacks, to including that capital point, continued of to and liquidity undrawn this total which equated deployment does $XX.X would through freed as Total releases our plan Walmart include some of in capital at outlined reserve This capital billion, of I our portfolio, regular the our reflecting both liquidity, from include as the credit to previously. facilities, cannot down addition that anticipated ongoing of the from deployment as up our well specific plans dividends sale the capital and be share it capital

sources to diversified capital plan share strong repurchases. to and strong and we And and our in We expect continue form a capital of deploying sheet liquidity balance execution growth funding maintaining very levels. through capital committed with and of further are dividends the

to believe for I in current with our the a margin quarter year and the with the for conclude our We Overall, the XX.XX% will line year. around quarter. improved the seasonality, in the to as in average well as expectations as this sale range reserve the potential were run quarter. the later Lower a growth, our fluctuation wanted quarter, I core normal quarter, recap percentage as was in performed year. for program line second portfolio Walmart the continue performance XX% some of margin well decline expectations. second slight Before X.X% as the build RSAs with view for to the in first including our receivables drivers

align As this with a RSA quarters, moderating the percentage. we the expect more will growth builds on in to reserve future have impact

expect RSA be range to in We X.X% the XXXX. for continue to X% percentage the to

Regarding credit.

We million the range build and portfolio early or reserve expect by core anticipate the will $XXX We second in will the $XXX quarter the $XXX third and the occur second additional quarters. $XXX quarter reductions third average in to million in be in million largely be the this We for fourth growth in the late related reserves still sale to million the expect year. range. will driven still Walmart the to of to

see our the line from expectations the to with as first XXXX to net outlook. PayPal quarter, expect the and charge-off addition included XX is in and of impact to due the program. also compared to we This the higher timing be charge-offs in We began in net points to Credit full of the our XX second quarter basis recoveries

X.X% later the by a impact expect will XXXX, the the entirely this be continue Credit partially for sale of Walmart charge-offs to driven PayPal in with slight the offset portfolio We compared XXXX increase X.X% year. to portfolio, by the from range to net

PayPal the is to Excluding the of be expected Walmart, flat NCO effects and to XXXX. rate

Turning to expenses.

generate to be returns. it generate and business long-term continue summary, positive ratio XX% We full efficiency with to that, attractive strong turn In Margaret. the leverage I'll year. With over back to continues around for operating still expect to growth the the

Margaret Keane

as strategic quick and to provide a in results partnerships, strong the wrap-up then on I'll actionable Q&A. continue generated and data Brian. this for investments analytics organic open quarter forward-thinking growth, our be renewals, We focus factors technology program call key will our Thanks, success.

We extensions number generated quarters. the pleased last have over significant renewals and with we of the are several

$X.XX that better in We repurchases create To on are returned we that cardholders. partners quarterly for making million per for capital a of we're dividend. more focus for end, our and seamless our billion value $X.X share shareholders. value delivering maintaining through our share investments a And XXX experience our and

deploying up program turn focused the remain open Greg we Q&A. organic back to now call and on through to the growth acquisitions. continued Additionally, I'll capital

Greg Ketron

on Thanks, comments Margaret. That our the quarter. concludes

many We the possible. as will now as that [Operator start we you accommodate begin the Operator, please Q&A of session. so session, Instructions] can Q&A


Thank you.

our [Operator first Sanjay We session. begin will from we KBW. question now our question-and-answer And Instructions] Sakhrani have with

Sanjay Sakhrani

just Thanks. the could uneven about our it's little Good release what be a And down a past. change than higher bit, just a Solutions RSA, you bit oil expectations. unchanged. the doesn't secondly, been to to I guys was drove disclosure clear, that? which just Walmart RSA hoping the gas of guidance the us trend reserve I morning. sense segment, you to you give then RSA of flow range between just hoping the a on through And on Payment right? for Brian, was talk is because that could the Thanks. the and sequencing drill little little kept And the just in obviously

Brian Doubles

Yes. Sure Sanjay.

you middle reserve first let said what not the and So run the that take your me did just RSA. confirm through release question Walmart

not that So the The a what increase quarter year-over-year really the reserve that build. was core RSA of in the terms and of was lower driver driver largest we recorded. in

programs, of many compared year. We pushed to saw also so overall the our a up in prior better the rate that also performance

of down. will to balance a percentage think of that the back back is RSA And to that seasonal reserve goes you in bring build still would growth-driven X.X% high change look year, million quarter, mix range, no then program driver. that expectation. point in normal the at the in the million third We a so hit And real balance build communicated the about expect to that a that January. and be $XXX reserve gas was still just that we so our what now on expect on no movement it year, what consider And to So from core back Solutions. to so portfolios RSA range, then, to change credit into we expectation Payment when then $XXX retail oil X.X% as the we in you the the to the

So really the synergies idea gas Those now, for there putting was together now really that there the strategically. some growth those be auto good used but can is network, in we're there. seeing cards real just programs

in And volume in Solutions so depress purchase It the Payment really bit for we year-over-year, the X% was in purchase numbers move. growth did so little that volume Solutions. the reported a rationale Payment

adjust purchase, volume X%, line so you gas have If with oil been that very would for up and in receivables. much

Sanjay Sakhrani



thank And you.

our from Barclays. DeVries question have with We Mark next

Terry Ma

get has for to growth just in color this Ma some I trending. wanted Mark. Terry the Hey on been good is morning, how PayPal

get receivables growth of just been sense growth could has the back mentioned You so half would the ex so you of could hoping year? this trend how toward we Walmart up disaggregate a XX%

Margaret Keane


as we've partnership So program had PayPal said the is expected with we that to perform. had them. it I say performing We would great

But on some just the not we We're integrated. really growing program. had portfolios of very across our working are PayPal. growth We

know I don't add that. anything well. So business I'd actually of really if say you'd Brian the performing core to the is

Brian Doubles

didn't half in related I first comping you're to last year we would Margaret just said, outsized periods will growth The PayPal X% the with into similar because why as PayPal. it add X% still the growth seeing good have to is the we're against down to only rate be PayPal first the that's half in on come But That we the and year. year of half growth second really expect range. seeing that thing

Terry Ma

it. expect as much quarters? Okay next related a How Walmart follow-up. can OpEx just to got And few we Thanks. over the takeout

Brian Doubles

Walmart. the I say made back with Yes on what announcement we when track we on would communicated we're

detailed We're the very So we got executing those across plans. business.

fact that prior If broadly, were to expenses PayPal at X% and on. year. up look was you entirely the the just the brought we by more portfolio that But compared driven really Credit they that

-- PayPal exclude year-over-year. the you program If expenses were the exclude and flat PayPal,

So on some fact later this that reflective portfolio areas to the that the certain Walmart the able of ahead restructuring year. of we're business is really do of sale

cost feel a later Walmart The takeout. the to So majority costs moves come out that will to the of transition. this I think related program. We're focused we're the support Obviously, about portfolio ensuring on year. on we pretty smooth after continuing good focused very

So those place costs portfolio stay the of moves. until in the majority

in see cost full really benefit you the the So of takeout XXXX.

Terry Ma

Okay, got it. you. Thank


we And with have question our next from JPMorgan. Rick Shane

Rick Shane

guys, move through thinking should fixed behaviorally any loans sensitivity? thanks portfolio just I there seasonality this wanted floating as PayPal deeper the asset bit for versus should existing a existing morning. the different is mix in of pay in spending my between about the Hey questions little versus portfolio. year? consider be downs And terms and we of terms taking we anything the on dive rate to in Is there we different that portfolio

Brian Doubles

to wouldn't to We portfolio. mean I to just to relative I get PayPal. on net-net -- PayPal. return things Rick And the of did in rest similar. that pretty that build very said the delinquency at APR Obviously program to it in through a you some and address go increases runs Seasonality like that. look similar back have account what a slightly profile. anything higher specific in we build we've past net Yeah, charge-off the

you differently. would to So there's think PayPal specific highlight about nothing I should

Rick Shane

you Great. it Thank me. That’s guys. for

Brian Doubles

Thanks, Rick.


And our next question comes from Chris Brendler with Buckingham.

Chris Brendler

in July? disclosure that own really PayPal beneficial how's the to on I your have it portfolio that on PayPal or term? Walmart still are that you performed would even And a I as transfer your Hi, a sense; then well. metrics had to Thanks. platform? do taking appreciate my thanks. on question of PayPal morning give the near and Good servicing servicing for PayPal metrics. say in credit And since So Can impact quantitatively, you servicing But the impact us qualitatively just thanks expect you to on loans? credit question. also and transfer more you trying the you that maybe acquired additional a once is those portfolio

Margaret Keane


it's terms like delinquency, we growth, of say thought performing in perform both I'd first So, terms in of performance. exactly of and it in would terms overall so

So about be convert are big shift terms our our following the that I how direction happens And in June. anyway. feel of the now which pretty servicing is pretty today they overall once do performance will at it They in happy because in accounts a performing. on conversion system, they're don't we we system. it how will and anticipate happen the portfolio until again our what do portfolio they're to good the of to

see So I anything don't really there.

I we could cost the out bit cost of just of of leverage a because scale. think, our part little of this get probably obviously,

Chris Brendler

Pets be a me is terms Okay, part great. Best. just of… it you to is on big Can how operation material know lending not One it's a to revenue? to impact follow-up and quick going in CareCredit wanted very I -- and interesting assume that insurance to is

Margaret Keane

-- it big It's won't a impact Yeah. not to have going have on the…

Brian Doubles

term. short the In

Margaret Keane

term. short the …in

Chris Brendler

Thanks, Great. guys.

Margaret Keane

you. Thank

Brian Doubles

Thank you.


from question next Autonomous Matthew Research. O'Neill our have We with

Matthew O’Neill

sort Me more into newer original co-brand hoping PayPal, was and the maybe repricing I is the or update way book, which finding versus questions. size my Bill extent details Later taking maybe for you of, the could are the what some program. APR Thanks hi. an to give overall Yes, the their APRs the around

Brian Doubles


year changes feel would of in balance say this APR those. next to earlier the of the those the into of half they're bleed rolled we probably first we out really year before I but benefit and over, going So,

basis yield now XX if at right little the points So was year-over-year. down it a the you over company, on overall look

PayPal, exclude the slightly have you a which overall business, yields up year-over-year. actually run If yield would than lower been does at

its APR the So way that lift yet. hasn't yield worked through

of You'll that really the XXXX. see towards and end this year into

Matthew O’Neill

Thanks. helpful. That was

Brian Doubles

what And second Matt? your was part the question, of

Matthew O’Neill

was PayPal. unrelated an on did on CECL. however, it have That I follow-up,

very updated risk on perspective, it focused RSA And regulators as at, with of at If looking regulators. you maybe the from inclusive as Or looking the the views you or guys the and on discussion that are sharing? it are you holistic any implicit alone? guys far a had is guys

Brian Doubles

is That Yeah. question. great

So reserves the that to range result we we to from lifetime of move will an in out CECL model there. Obviously, coverage. level haven't given put increase a just incurred the a

running currently in are We parallel.

working allocation a product like some card that some of going are and like portfolio There's the credit out not discussion areas is there methodologies implementation the life of payment are things expectation. the for double all We our of that. revolving to reserves through big that

you But capital probably highlighted this is losses. working our do quarter out should the So, most the unexpected third time. in I now. how you capital we've less all expect we'll then run would as range In a through need big question more parallel likely on going in open with for forward. regulators a after And period correctly right of put regulators you we're view theory, for reserves aside, set the the that the

In terms all factor -- the in of our we we the built our RSAs tests they're actually models. in RSAs, into of stress

RSAs the that for buffering credit in stress have get scenario. that do a effect we So,

factor our in. do that our we part It is testing stress plans. capital and models of So,

Matthew O'Neill

Thank Appreciate very it. Great. much. you

Brian Doubles

Thanks. Great.


thank And you.

with from question Oppenheimer. Gabriele Dominick Our next comes

Dominick Gabriele

of are my we've competitors so the total of a act to seen for of have Can Hi, the taking touch deposit some just questions. rates trying you their on kind balancing funding the balances? balances your of and those with rates for on additional deposit cut actually some drive thanks as -- percent And paid much the products. between what

XXXX? you. that going you does funding think costs your Thank mean about what into So, if forward

Brian Doubles


of a say things. would I So, couple

look at our we a far. actually deposit than the been it's through bit cycle so we when rate little expected First, beta better

has includes the PayPal. That around year pre-funding we were last been where XX%. beta period our So,

were period, on competitive time that rates. we very During

our that rates trends of year we year need and so rate as We've moved be growth some the all. as so well this at are seeing the as pre-fund deposit to this given don't won't this large fact far on seen actually hoping actually really to portfolio, competitive we we're year. Just have we we haven't a strong far

So, doesn't source we are view said betas think higher funds expect the change that look business. I norm. pay the But our with it that still than most deposits to for of all our slightly attractive

Dominick Gabriele

and Thanks in CareCredit accelerate there of some nice CareCredit? you've if growth these Walgreens some in more. then partnerships about continue that and to could much. Can how And steady I can And so you had then year-over-year. Absolutely. new talk one growth receivables potentially ask

Margaret Keane

Yes sure.

care to consumers as up opportunity costs. So, Obviously, a you continue general we see health us. for go CareCredit the really gives big segment for payments and and CareCredit those opportunity to

the really the the is customers And so really into the of partnerships; -- of we've example One, things. grow expanding we today. are two, card third is the the but in that that out to really allow to core that Walgreens. a they expanding in what things not new verticals of an winning by bought in we at we're a utility use are area nice And card like buy traction of Walgreens where so And then looking other couple there. been is outside office we continuing seeing building

to we would a anything one and really decision be alone about expense. is year XX different where thing those situations position want elective procedures care health that we death of related of are health is to part kind last expanded that. their into consumers This where say want care really or that never credit So, making I in to are The all like procedures verticals. some segregate we life

we the growth are to And looking accelerate verticals to so really really in ways into. that expect expand at I we looking we say continue growth verticals to would in we're see nice CareCredit and and today in are to

So, pretty excited.

Dominick Gabriele

appreciate really much. I Thanks it. so


our we question next David have And Scharf Securities. from JMP with

David Scharf

outside trying to a portfolio a growth get Hi good on different PayPal. my for sense angle question. organic for morning. of Maybe taking Thanks

programs five basis, Just are on receivables? declines no-name look those the retail we wondering any top outside in at of experiencing PayPal, of a ending year-over-year when

Margaret Keane

are. I believe them of don't any No.

it's think most bring retailers what is to to times customers. of because sales look card the most off, I as three becomes credit obviously base important two are driver two retailer And the have if to cases our the that performance. a times our even are are big note a really that loyal -- sales customer card cards program store, sales back that the into the retailer's in

So in not deterioration way. that have seen we

Brian Doubles

whether have Margaret's thing you look of can point, only and one about would big can term our always I any these two -- The good quarter-to-quarter, in the taking we're look have partnerships. if over year some you are to its is -- Yes. movement years, programs But all long feel add of you we we or gaining position. our penetration in pretty

Margaret Keane

aspect. important other the that's is piece note to the think digital I

the continue able traffic bigger digital and with They over. in even over that and falloff and build out the tend partners we know customer the with As customer. channel, omni-channel the store, maybe capabilities to our to becomes the a mobilely we And that best if part approach. to are offset of an we some in-store come buys back of they're

to continue digital that help to analytics our capability. really partners expand our we So use continue data those sales grow and to

David Scharf

you're which terms with not Got share it. prefaced response in that And of the... there actually able metrics you to -- are of that share sort wallet type any was my follow-up us whether through or of

Margaret Keane

give you overall I growth. of I overall yes like mobile can you kind give can --

application to continues part. and growth year. said our on digitally, the grew grow is are a we occurring of this quarter last XX% same versus now which XX% big applications So of quarter, be we

this props how their or the online we see the even value really the to terms online XX% of partners had obviously get shop get of before -- one sales. Retail important to we to we go or in actually the Card, in in value place. sales customers app in So were those things with of are work they too is And props mobile applying through our cards,

continues is grow. So a again, this channel to that

really in nicely to grow continue We the digital sales.

that to and continue performance the about happy pretty grow. we're to expect again, So

David Scharf

you. Thank Great.


Thank you.

John. with John Please comes question Jefferies. last ahead, go Our Hecht from

John Hecht

of portfolio? Sorry guys. guys. of than the of question the net portfolio the any different amount Is for on One the deferred Thanks side interest rest PayPal.

Brian Doubles

It the John. works portfolio, similarly to the rest of

John Hecht

have most get that and one your plan plans? I'd I And one publicly you'll Board you'll my to and guess -- the think of do have have will about when be Okay. of then do what but talk you mean the answered, be I the approve I'd able think asked the to and final questions able Brian secondary when is, Directors been to capital forth? so process regulators you or

Brian Doubles


So plan. like late the said, approved submitted We reviewed to the we regulators that I Board our March. and

in line what much with very that's we So year. did last

very hope. Obviously, on what side, our last mid-May, follow the look entire process done and the years, two something with you would we both Board control similar our that if don't regulators. we least at announced try So process. around is at that so be a our we've to But

timing. that in year have hopeful we we're So of result this terms a similar

John Hecht

that. Thanks. Appreciate

Brian Doubles

Thanks, John.

Greg Ketron

any Thanks in have morning Relations questions you team you this may everyone to and have. day. will Financial. for us your Synchrony be We joining Investor a The interest great answer available further hope


ladies you, This participating. thank concludes you We and gentlemen. thank And today's conference. for

You disconnect. may now