Synchrony Financial (SYF)

Greg Ketron Director, IR
Margaret Keane CEO
Brian Wenzel EVP & CFO
Brian Doubles President
John Hecht Jefferies
Moshe Orenbuch Crédit Suisse
Don Fandetti Wells Fargo
Ryan Cary Bank of America
Betsy Graseck Morgan Stanley
David Scharf JMP Securities
Vincent Caintic Stephens
Dominick Gabriele Oppenheimer
Sanjay Sakhrani KBW
Call transcript
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Welcome to the Synchrony Financial First Quarter 2020 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, you may begin.

Greg Ketron

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

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

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

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

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

is are and teleconference transcripts responsible Financial earnings third-parties. only The Finally, for by on our edit webcast our authorized does nor the website. of provided Synchrony not located guarantee accuracy not

call the Brian Doubles. this Wenzel, Margaret morning Brian On Keane, and are

turn Margaret. over call I to now will the

Margaret Keane

Thanks everyone. Greg. Good morning,

the facing an on the to frontlines, our and partners. world of including professionals first customers to and responders global the dedicated healthcare scenes, and serve behind the our are Today working by clock, pandemic. as I around country as want first working unprecedented are employees start those our all thanking especially who those our well

of society acts, of much I've am the one by from done. this continues in impacted this may also long to hope sadness is I I certainly support. come in loss, and seen of after different our all together resolve It's ways suffer been inspired selfless While encouraged the things and goodness, community we have and us crisis. and

as can all continue we difficult in companies to execute customers, I also to us global health and our environment. leaders. community, and do also our commit This to our support crisis challenging challenging we It extraordinarily employees, will you. individuals is an is partners, our to as

word this extraordinary thanks time. Synchrony, up difficult in leaders Thank stepped through many ways in you. And here to of incredibly so who one more the have

XXXXs company founded talented deliver Great employees, faced financing of we XXXX. began was Our and most other these strengths our in recently, Depression, combination use the associates a for in our to crisis our This heritage, the as navigate strong financial difficult us Synchrony the cardholders, and culture, to great refrigerators continue retailers, our periods, our enable many has is and protect times, and to merchants, will that uncertain providers. in

results to in response me I the our greater will first, provide Later call, for the with detail the you our COVID-XX outbreak. let share quarter. first But in

were or which attributable provision after-tax, or credit share. $XXX the First as a increase diluted CECL losses million an The by million CECL $X.XX per for $X.XX. $XX of EPS in quarter January. This included implementation $XXX reduced million earnings increase was to in result

last portfolio, during accounts and purchase fees, interest grew areas core increased On key efficiency the Walmart solid basis and volume several generated We quarter. average X%, which in was X%. and loan drove in which excludes Yamaha increase X% deposits cost Walmart growth active ratio X% The over a to a deposits the X%, receivables increased from direct deposits the excess growth slowed We grow quarter. grew given the over sales, million we the year. we And for over of the at prior-year. although rate lower $XXX did XX.X% or X% portfolio continue liquidity

to our deposits growth. attract funding invest existing and an we bank And important remains our new customers. Our retain to direct deposit in for continue platform source help

care growing key several and to our extended partnership, we renewed We added and credit relationships, network. added we

to We during closely XXXX. be working excited new these to and programs Verizon and Venmo continue with launch are

the launch the environment programs second develops, Venmo. the will half the for launch we on in current be anticipate and how dependent date for for Verizon launch ultimate a While a mid-year

to data frictionless analytics our focused remain winning highly the and which digital on innovation, key of experiences, continue our customer success We relationships. accelerating creating new programs are and to capabilities

XX% digital total penetration digital the and of compared is to in Walmart. quarter application. last year, same key alone Driving In excluding sales The XX% XX% first Retail digital mobile self-penetration were our quarter, our Card, success. applications channel was the grew to

in or we During million stock quarter, billion and per dividends. X share common repurchased Synchrony $X.XX of paid $XXX the common stock

strength We with business. our of the pleased are

volumes a in the we later Brian experience second call. However, which cover the in of did from significant purchase will reduction half COVID-XX March in

The is duration difficult very quantify the ultimate crisis right this now, impact to still largely magnitude and unknown. from with

However, believe, through to an we uncertain time. we advantageous position have navigate this

from some times of is a crisis in stress. the we've be during made surgical well-positioned perspective to have of addition Further, buffer effective RSAs credit in to our portfolio recent more the has Our we proven great financial years. made an given historically modifications changes since

business and us rapidly and enhancements. changes to nimble We implement partner more centric ability have are the model, a giving than ever,

manage unprecedented have Combine access our analytics partners to tool we We and lake through have built also us that at powerful a this data to that information the robust an capabilities, across level. period. our business help gives another with

the which crucial has capabilities manage through by another built, time empowering and them help to helping shift across to partners digital this tool, us The online win important digital business are mobile to channel. volume our we've partner

and for action Synchrony Now I taken like employees, spend to would on some focusing time partners, communities. the has

We communities providers. the operate merchants global of while crisis, consideration assist for empathy been constituency evolve. crisis in and in act and health in assisting to spirit and we needs still have will continue have stemming live each with taken actions the cardholders, our we as this meeting we the Each retailers, the action has which of to taken these and

support and safety across company. of quickly colleagues put in our our strengths the the are place to wellness, We decisively the globe. and employees health, moved of Our that actions

We functions, all contact XXX% our to support work service operation from our employees safe. are working our associates and keeping frontline has from our company are plan implementing a from This allowed home. U.S., structure. while customers, In our employees stabilize across for home to us from center

associates are the We colleagues care the our doctor to or expanded care Copays support and to by cost that emergency consult professional, childcare so enhancing medical backup of employee assisting our wishes have benefits, elder covering any include who for for our needed. benefit virtual a visits

providing financial planning also programs. along wellness with are We employee and assistance

provided customers without every role assisting center bead. missing playing our single one-time a are contact in our them to a bonus associates, day special their thank essential we For they for

we them deal addition, fund to are this challenges help financial may In impact our setting associates unexpected period. which during up emergency an with

For experiencing the have financial are assist hardship, consumers to these cardholders ability period. that difficult during extremely we this

interest extend period. promotional waive charges, will while and fees financing we can We

minimum waive for will certain existing accounts. also We on qualifying payments balances

those to will For expand if we evaluate criteria. necessary limits meet the seeking credit ability our to credit our they line purchases,

Many there us grow and for of been with have been partners our decades to businesses. them we their help have

it. them to are We here protect help now

disruption. to they to have customers We aggressive dependable with of products approach can and this partners that time their an ensure and provide we continue our during service use taken

there our to easy-to-use our disruption digital helping partners. to availability all relationship them investments are and been them in to helping has actively and assets customers making managers serve their fast Our no of and our are their

to agile to dedicated their Our time teams solutions structure is customers. and are and working our real foster helping tirelessly partners our support

organizations culture. of are and of part The work Synchrony's national fabric communities affected of COVID-XX. million the country $X local committed core where a areas we That's to those assist such live we the have most and why by help

the as Puerto Rico, will organizations like India, We be America and U.S., well as and Feeding the in groups on Wheels supporting Meals in Philippines.

who have in such in in the machines. community to communities Employees numerous sewing XD employees network GearUp who Synchrony's sell actively contributed a our and selling engaged of sewing using through sizes a shield have of initiative. printing, making gowns partners Also, as face are assist number where as certain our cardholders our to have as well hours masks we engaged protective

leveraged are to transfer of also medical various in need CareCredit in as our where location donate people network can serving and is engaging our communities items of facilities. PPE the we and have We Synchrony a items,

facing while our various on and employees, for for the time. resources, our But the unprecedented the strength, nearly has navigated century, to health been and businesses communities. associates, customers, their have global continuing extraordinary maintaining invest and partners, are the also by and times a crisis in of Synchrony this partners, we customers, supporting long-term. Having an resolve economic We to business for fight in uncertainty our focus our

model business our to our And objectives, crisis that of we initiatives. and am have will I maintaining on we through confidence the sheet, significant while of business, I the have navigate taken strategic constituents. our strength in our and opportunities proud actions our balance focus this successfully, long-term what continue for

With and quarter, COVID-XX the the drivers. consider business review views the over that, impact the on seeing, to the we key our Wenzel I'll key on to to some for trends turn of financial framework Brian the help performance call outlook are of

Brian Wenzel

Thanks, Margaret, everyone. and morning, good

community everyone The appreciated. safe of a for grocery workers healthcare stores inspiring deeply is me those selflessness our from to working dedication and on to workers, who's first First, and responders, Margaret's vaccines. keep and echo let or secure working thanks in these our lot

who world to all In customers. thank to you. to working are of to new employees the Thank adjusting our around continue addition, I serve ways partners and want our

turning I'll X of the for our financial the Slide in results presentation. Now start to quarter. first

the to we're aspects volume the seeing well now quarter move as important of facing. impact I as results, our highlight that business of cover from the to first COVID-XX trends into key from early given perspective, environment are current are I Before some the want we purchase of

and between for shows February, increased to March well March. X related total year-over-year volume of where half first cards then company, the purchase half second world and and the as for Dual the the COVID-XX significantly. is our split as Co-Branded sales month the impact growth Slide from for January,

world at second strong retail significantly non-essential half In the of high closed. mid-March for and with mandates growth and volume levels, federal the and state activity total stores and of a event entertainment double-digit number through growth travel, sales curtailed both volumes. increased Purchase as were March was company the

XX% respectively both into April. March. purchase a half the declined result, world As The in are second XX% the of sales by continuing and trends total significantly volume decreasing company for and

in category, restriction period, the restriction the month of post-travel of spend same period. end world the categories, experienced at and post-January, pre-travel significantly rates discount overall we specialty then periods increased growth the year-over-year entertainment, and the trends. restaurant, the significantly the January, similar to as while quarter, during spend gas, first sales Looking growth of Grocery, drugstore declined by defined changes during industry travel through

significantly were world sales XX% only travel and impacted, While of gas, these restaurants categories. entertainment, incurred in XXXX

will still magnitude duration receivable are this and our these forward. volume is impact trends and Obviously, impact The given largely of that pandemic still is the purchase ultimate loan the growth at unknown this point. uncertain going

Slide crisis. processes that This quality financial higher XXXX and to have been asset asset going very we've into effective highlight improve is strategy in credit a through of asset versus advance base overall X, managing made our great disciplined in to Moving our we result quality base underwriting underwriting the quality. the today direct our

highlight I'd program. management our like various credit aspects to of

disciplined First, we have in experienced very we're credit and underwriting. to our very approach a team

and credit across sales programs all our platforms. control in our underwriting and we Second, decisions

management. channel to are for by in tailored strategies the industry which partner credit account unique operate we origination and Our as

shown As score measure have above the using the left XX% compared XXX XX% the FICO to comparative FICO side the XXXX. on of portfolio of page, in as

balances of XX% lower, to portfolio reduced FICO or the XXX in a of portfolio X% the that XXX the above quality; of a exposure are XXX higher significant loss in in FICOs to balances shifted importantly, X% our or XXX to in we've from FICO XXXX. is This at with compared we XX% FICO More with below or higher. generating portfolio range increase improvement

our new decision quality the since portfolio reflected As of in this we quality credit financial strategic we made account improve our origination crisis, and the mix to great of XXXX. the the exited is

in we XXXX XXX, the above of advanced FICOs FICOs Over originated We're or have accounts accounts using techniques had having also XX% originated XXX XX% XXX of since or lower. underwriting what the less were FICO higher, have of portfolio. that than of we managing with X%

validate acquisition, are Some account different and customer to example attributes for we XX to than this of sources to utilizing authenticate data are more and up identity. X,XXX creditworthiness

more engagement a use multi algorithmic to effective customer and synthetic as are We credit outcomes, with other target credit, to designated to approach employing behavior, malicious leveraging lines. clients as partners IDs, specific assign our well fraud,

these passively in the as This For approved customers quarter creditworthiness the the reevaluate from mix manage triggers time exposure, in account bureau XXX FICO target volume utilize of technology deployed for shows The side quarter right to at hand and well quarter management, we're the internal of first the XX% in purchase the XXXX, and to techniques customers' evident plus latest as the the selectively volume is from XXXX. credit leveraging underwriting continuing dynamically improvement credit high the behavior. to XX% XXXX. mix chart page on which the being first first purchase more to mix risk purchase we shows the in of compared to volume authenticate

rate a don't by any Finally, industry been now well it growing Retail portfolio and Card is and we concentrations. faster should at payment we've be significant that in geographic have diversified solutions portfolios than CareCredit our

In the we had great financial the our the summary, improved asset substantially compared portfolio have crisis. quality of we during to portfolio

tools We can better with efficacy ever have underwriting changes quickly and deploy developed and before. capabilities and greater than more

managed than on our see the in loss chart can credit higher Slide general The perspective, the X periods to that you slightly rate in losses. issuers in purpose dating XXXX relatively line XXXX. card is to how for top in in private in perception longer-term perform credit cards back when general was general issuers on shows that loss a great crisis label purpose you XX% credit with card we performance cards financial XX% loss the perform a from range peaked a worse will But basis. view of

than being One experience of lower is purpose cards. is that lower similar the general to of loss us due keys the the average the loss to being severity for balance generally

first balance year. average per last quarter, was the For $X,XXX flat active account to is the which

wide basis, XXX basis through card you we crisis, purpose this points the peers on higher margin a the over than yield the general adjusted group. look a risk risk adjusted yield with at If a peer outperformed by running

card As losses outperformance we increase cycle, of again was X. and points purpose RSAs the have yield shown has lower and over also compared declined, a buffer. through right hand remained Slide issuers evident beyond XXXX beginning provide chart costs risk This move as in the in adjusted XXXX general as basis XXXX our in XXX the post-crisis. to corner credit

program factors RSAs the to as strong of credit the RSAs related, RSAs mix. normalized receivables of of revenue, the In business countercyclical average through more the important driver and RSA financial model. The adjusted nature RSAs our both expenses, While a countercyclical percentage our XXXX, yield are X.X%, through of highlight the XXXX resiliency of other average impact also such as in declined X.XX% profitable to XX% remain earnings and below the nature of crisis XXXX. ability great for were as risk elements

crisis in return The company generated of the X% a at around height XXXX. on the assets

situation was the in context elements to great you financial give from our apart the Given the current we charge-offs while it of from the important similar expecting items sets historical some be to felt key level I've crisis, highlighted on business the the we're earlier, industry. resulting that not others to

implementation to of This for million which or the first as January. first a CECL results we of X. was included Slide provision Moving This quarter after-tax diluted the morning, The million of reduced in EPS financial result share. per $XXX credit an increase by on million the quarter increase or $XXX earnings $X.XX. losses, $X.XX in $XX reported

interest basis, driven on Walmart On purchase by receivables were X% growth X% growth was loan a which and a X% over solid core were year. and up loan Yamaha several and up On excludes receivables. last receivables accounts generated fees areas volume X. basis on average We X% in in noted and Slide the as year-over-year core portfolios, active increased

cards XX% Co-Branded first the the On loan card with we Slide XX% we of pleased total receivables over volumes X% and to prior-year. X% receivable the business. prior-year. the X, Dual these grew growth we the portfolio we're purchase underlying account have total and to Co-Branded They level provide over and in across included accounted the for and products. Dual volume generate the for of Overall, quarter and diversification grew have of purchase balances loan

I with in of of As we quarter. accelerated the move the occurring the earlier noted impact the through as quarter COVID-XX impact late most

precise a are more still duration substantial We forecast the is given unknown magnitude provide expecting difficult quarter, impact. the at it's impact this to more this a but and the largely point, of

quarter, in credit from expected end lower range X% $XX RSAs year. a higher quarter for receivables as the the at million percentage reserve decreased X.X% first the we or of RSAs due builds. of last the average loss were to

lower credit year. totaled the primarily driven reserve $XXX million, $XXX related for The first increased year net The the last the due quarter build partially reserve million. that in credit by increase. increase the losses. and Walmart projected COVID-XX in of largely remaining by the loss last provision to losses was reduction from or impact $XXX build The higher offset million quarter charge-offs first XX% reserve was for accounted The

expense COVID-XX increased $X operational cost due and expenses down offset to million, partially Other related income losses was response. Other reductions $XX or from by million. X% Walmart, the to higher

overall, COVID-XX. of outside the the first from to results the quarter solid continued impacts So generate in company

Slide X. down digital with our driven primarily Walmart X% I to take sale In the solid core were loan our the of growth results highlight by will other by portfolio. moment driven a growth Retail platform partners; on receivable was metrics Card

furnishings and volume renewed We key quarter. Purchase increased growth. of Interest and average a in resulted loan new delivered X%. Payment growth receivable this receivable core in home loan by growth driven home that primarily strong the platform sales partnerships strength a specialty number X% across Solutions of and quarter with and active and broad-based signed increased loan X%. partners on accounts fees

to partnerships continue organically of other volume helps drive card growth networks. purchase higher excluding networks, which These us solid stands now approximately at results. through as with gas such card along driving XX% We with that and initiatives, our to reuse, drive oil

led CareCredit of veterinary also specialties. X% quarter; was growth another receivable dental our and strong delivered by

fees on X%. was loans volume average accounts and driven Interest primarily our growth. the increased active and by Purchase up increased X% X% receivable loan

the XX% our during We new over network our quarter. reuse network of our the Network utility continue first rate drive we've helped card to expand has X,XXX to added the provider in to to locations expansion quarter. as the purchase volume and

helped see platform results COVID-XX Retail We did as of progressed. store in offset on mitigate start some the impact, in quarter help results, volume pronounced less areas the impact. this closing a store impacted In some the while have while promotional strong effects and purchase also the Payment the as of Solutions growth digital In home offerings that Card, of COVID-XX impact. to saw specialty we closings growth such

veterinary For elective offset see during CareCredit, quarter, be to areas partially procedures. March. performance of many into as reductions continue we latter expect as store the We of such the the effects closings will and pronounced by in do part good carry next occurred in more the

XX.X% sale sale in XX.XX% receivables and decrease driven core receivables the margin margin during decrease by primarily driven our main by from of mix year, to sale performance and benchmark move of and lower higher XX XX.XX% the total net liabilities last year's cost X% basis a Slide fees mix the income a to in decreased cover point basis the total driving A of interest that last XX a in yield as assets. Walmart interest liquidity were of I'll October in decrease receivables interest resulted in basis compared interest driven On XX to loan bearing Walmart factors offset interest from XX.XX%. loan was primarily the quarter trends. increased primarily XX.X% the last due The declined by of rates. portfolio on of proceeds fees percent a and a the loan to the loans portfolio, on year. X%. partially X.XX% to The X% by decline driven of by The the income portfolio. point net from interest margin Walmart margin earning Net mainly

credit cover Next, XX. I'll our key on trends Slide

rate specific XX-plus X.XX% compared of terms with last year. In start trends. dynamics XX-plus was to and rate The the X.XX% delinquency the delinquency in delinquency the year X.XX% last X.XX% to was I'll compared quarter,

Walmart XX-plus basis last and If XX-plus XX was the down delinquency points rate compared down the approximately portfolio, delinquency approximately the you five to exclude the impact of points, rate basis was year.

net year. The compared to by charge-off improving credit driven Focusing net trends. last primarily X.XX% on net charge-off Walmart charge-off reduction and was rate X.XX% The trends. was in rate

increase X.XX%. of was was rate This impact the charge-off portfolio, the basis of better net fourth year. quarter expectation approximately XX than net Walmart points XX point around lower Excluding rate charge-off basis the than last of in

credit receivables for allowance as The included day a XX.XX% which a implementation, transition percent $X.XX billion adjustment. post-seasonal was losses loan one of

reserve under CECL the the to of Excluding quarter. impact accounted method. higher COVID-XX under effect under was due the build which the of overall method would the most than have ALLL quarter CECL, build in $XXX for The allowance million of the reserve the expected in reserve The was first and first the $XXX been X.XX%. provisioning ALLL million

summary, the slightly our credit than COVID-XX expectations impact. first the In trends better excluding were quarter

duration efforts move The the difficult as to impact is the forward. be point, will by magnitude the of the impacted COVID-XX. as well and cardholders this the effects we CARES trends providing given our uncertainty Act this to the pandemic, credit around extent relief impacted expect potential the as to of by We at from and assess

partially last quarter. by Slide came to losses attributable operational cover the from response Walmart. Moving $XX certain expenses was X% or offset The cost decline XX, COVID-XX. billion million driven to in related This I'll expenditures down expenses $X reductions was by and to to at year. higher Overall from our expenses for

for efficiency XX% XX.X% last quarter the versus year. ratio The was

efficiency from operational impact the the the and prior-year. expenses, Excluding was to flat COVID-XX the losses, ratio compared

at year. puts XX% million, XX% compared or to year, our over over XX, Slide This $XXX deposits deposits of last last Moving X%. the grown to refunding we've

overall direct growth the excess continue deposit our year. did quarter first While in sale cost over deposits the portfolio for X% higher the last the we quarter, prior a the lower given of pace Walmart at liquidity in the we fourth year, slowed slightly grow to

our last was year. which over XX% Total liquidity facilities billion up total $XX.X This including assets. equates credit is XX% undrawn from of

detail liquidity on issued two position, transition capital Before had should our electing and March, noted primary the I it be agencies the of the to banking by we're provide benefits. joint rules take that in which benefit federal

transition First, allows it this for to at be provisioning transition CECL of year. the XX.X% portion under delays and same last a with effects adjustment quarter They're the transition an With incremental adjustment. the of we deferred two the CECL second, levels under amortized CET-X years; and first current period ended the framework, rules. the the

issuance. capital CECL stock rules, issuance to preferred total reflecting as XX.X% year capital compared last to ratio XX.X% the Tier-X the last well the preferred transition also under XX November. ratio The XX.X% basis is reflecting increased points

a basis stock Tier-X the and increase the over increased basis CECL XXX the reserves a XX.X%, preferred of result on reserves increase fully capital plus faith-in ratio point the as implementing ratio And reflecting in a issuance. to prior-year,

for current continue the We of During of dividend end remaining paid share plan and share plan first capacity cycle. XXX a billion capital million of authorized the quarter. plan per announced the of of on had we or repurchase last quarter, the stock the $X.XX the $X first At common the billion during quarter, we we shares common million $X XX.X repurchased stock May. capital execute to

greater being decision this under uncertainty, economic current the halt further and environment. prudent depth possible, of purchases and had to current the as the of we've visibility magnitude we as Given so plan share made the

strong We're outlined to execute committed funding levels. with we and operating capital to sheet and the strategy a liquidity sources, continue very we strong Overall, diversified on previously. maintaining with balance

In closing, our updates we normally to provide outlook.

very exists of CARES Given the countering the such our actions ultimate and the the time. is the assess customers, COVID-XX impact may pandemic, for assistance and to at uncertainties regulatory Act, the payment actions government the number and duration have of severity of impact that as difficult regarding this that

of guidance our we January, provide a As expectations uncertain, for drivers we Since our drivers. changed and and I help be provide But can't is in versus should the longer magnitude result, the have that to key impacts a consider outlook the duration upon. XXXX. outlook relied want environment around current no outlook key the ranges on any provided to framework the

this in digital. has impact this well as our receivable mitigate anticipate COVID-XX other And first receivable of partners, late well-positioned on on deterioration presumably year. our growth in Regarding the particularly may a We volume significant purchase impact improves, in year-over-year the later quarter. loan help the purchase this until continued some growth, volumes situation purchase basis to net through for digital is and volume of leveraging overall expertise impact growth deterioration The we're help ultimately rate. as partners providers. our will What

resulting from temporary a our time. we from investment the in interest reduction rate cuts, reduction of the income waivers a of forbearance margin, portfolio, of period well in as by as will considering fee liquidity impact Fed interest impacted potential net prime terms rates in When be a in for

portfolio increase in in the expected the loan number rates revolver are the offsetting compression from higher generated lower is receivable an expense of accounts of lower. and benchmark as income margin interest Partially the interest

it should the While noted revenues share to impact be funding we also the RSA. of and costs

be from the RSAs will we'll also Also fully pronounced credit January, realized higher the we in costs as year. impact as in more sharing the the half addition of of more through net CECL interest Regarding on the second income noted in RSAs year. impact to a see impacts, move

an are the pandemic While strong quality highlighted more credit portfolio which advanced that as this the in increase rate in call. in we and crisis, noted capabilities and and are trends overall be charge-off as great financial the have expect we net we that the year progresses, the were should it earlier entered tools

higher higher share ultimately of for losses. Similar of the mitigating recoveries revenue, to the costs believe materialize also we impact also the will we Finally, RSA. partially impact higher credit

pandemic, we have to to gain visibility expectations we While in the cannot build specific the expectations, we duration severity current provide reserve the define charge-off into be better higher be guidance. expect reserve expected than until visibility, we'll Once forward. more and a more position greater the we going and original builds of

efficiency Regarding will expense revenue some expense impact impact we and levels And activity reduction levels. ratio, of through the to this opportunities. look mitigate

and into liquidity to environment. have the will strong is situation sheet, with the situation this business greater visibility go position. and of assess and and a the continue Fundamentally, guidance remains balance we We current provide capital, resilient, when we effects into strong the

back call With that, turn over the Margaret. I'll to

Margaret Keane

we'll Q&A. Thanks, and Brian. open I'll to provide call the a quick then wrap up

continue to in health believe crisis. of this and us associates We resiliency global business strength will help our model that navigate the the our

We on and merchants, are cardholders execute retailers, continuing period. for and to providers this with support during our our difficult empathy focused

on products We also this beyond will on our but in to period. strengths on business, to are today, to strategic expect build investments deliver our and our focused the make focused continuing execution services, customers

Thank situation. and the with the you continue very as you your today. this participating deal very families for typical to on wish I And we want to call all best

Greg the turn back call the to to Q&A. open up now I'll

Greg Ketron

That comments concludes quarter. our on the

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

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

Q&A the start please Operator, session.


Thank you.

We begin question-and-answer Instructions]. session. the will now [Operator

comes from Our with Jefferies. question first John Hecht

John Hecht

call. and much very the morning thanks for comments in guys Good the

Brian Wenzel

John. morning, Good

Margaret Keane

Good morning.

John Hecht

the about XX% half second you Brian, sales your in and XX%, just of cited volumes wondering, March. I'm guys down

Just do far about seen your Is the for trying the of kind far quarters. you've type thus in of through that we April modeling thus April? what how seen contraction near-term and think the about to think

Brian Wenzel

accelerated the From half was again morning. XX% slightly. Good John. back it thanks, about of which down March, Yes,

et is the assets, open the Dual in a essential retailers spend but about clearly Again, the are that's range that cetera. we part for in strength deemed running to and think of of and down in April. with some of the down to to stronger But similar grocery, the pretty when that again, So digital and just consistently XX% little and card, continue we it. we're are highlighted do earnings digital in on XX% they're you e-commerce the the first the drugstore, drive have gas regard world very entertainment categories travel, being chart,

XX% pretty that it's decline that, steady So year-over-year. in low

John Hecht

Okay, levels, great. about allowance think relative models the you of that are have the we kind point what versus think to And in this at Recession of where the I unemployment the the your economic or this very in assumptions of just your period? driven what contemplating economic the -- context Great second time economic -- question that's guess helpful. level how XXXX Thanks, do about kind

Brian Wenzel

Sure John.

this through or we me ACL building So kind quarter how of about think let go about reserve. in we the thought how

assumptions. the know you external provide vary with across institutions use we As own assumptions, come economic our -- pretty widely of that up assumptions we that the many -- don't

then about very gradual kind as second a at So rate across really that quarter settled think looked scenarios -- down a several different perform and kind our recovery given to and how we a set around looked a one several as that to on relative XXXX. to approaching for unemployment of one back assumptions institutions, more at XX% decline X%. modeled then saw variation the where the you scenarios we from peak XXXX And X.X% different then second in place of the it and many gets in many, unemployment book in in unemployment we was about would half of probably and they a

GDP key second again in and for And years, the bankruptcy down about second staying With the obviously for full-year. a for the that, rising but significant that. quarter recovery of next in half then being with couple is assumption was also the contraction XX% elevated very

kind thought it. we about how that's of So

different stressed, take that consumer you through back the the had you scenarios that had a lag, do the very, timing you of you financial go coming set when very not was and the unemployment crisis, and where to of the consumer. great amount stimulus Now, to have

it. try pretty it's different -- compare a it's pretty back So to to scenario to

advanced amount And portfolio then and technology very, look is have above shifted if of you and really amount gone, Obviously, our assets the fundamentally the that go we tools in underwriting The XXX Walmart's at back John, significantly. we've the invested portfolio, very different. different. is the

we feel comfortable. So,

us. in or quality improve mid-March, improving to saw As quality we good that today actually sit until we very the of to year-over-year up positive credit continuing kind was is which credit portfolio here

came in consumer a the So great stead.

of have pandemic, perspective. a this have very then We of kind and ton very, loan coming economic our situation from of we so, the stimulus out different through, really


We Suisse. with Moshe Orenbuch have our next Crédit question from

Moshe Orenbuch

portfolio likely and you about for, percentage to you with hoping of of that giving I deferments are granularity are was people a kind do as work quarter? detail like little you of point, bit going in future the that in Great. give you around say, what see -- the the of the it's that's would be could of more some any what kind and to what asking how like, bucket end just to of little the achieve second what kind

Brian Wenzel

Sure, Moshe. good morning,

So forbearance that we're down our let customers. me the to break providing

thing charges, asking is calls late the for if has waiver waiving a So impacted, we those. or are customer been in first a a of that if they're interest and we're doing fee

waive For qualifying counts, we min also the payment. will

up payment actually in for that if on min if bring three due current. them and to So kind if you're the stage account current, to months defer hold too of due their you're back the

give to a opportunity word. really in a of more bit little kind the situation them their get So

of extending up the promotional book periods expiration in of the We're promo. to XX the deferral also are days, the for

providing the are forms those So people. that of relief primary we're to those

accounts for billion at to-date, So advantage have that it's taken about how and about many XXX,XXX you balances. $X.X people in if look us, of

deferral that time. of program. to our this at we'll small you if help we think have needing offer And again, continue seen has taken yet the min percentage pay it, amount a cardholders So this point. But that about through to not people that of advantage tremendous

Moshe Orenbuch

the Got from maybe or Thanks just they're for and Brian, talk with is, you can little from either you now them? And discussions bit are it partners Margaret, asking about you what it. a just what retail asking and you that. you're your having

Margaret Keane

the the all Obviously, of call operation. stabilization pretty say one really gate, of the I'd was our miraculous from out home employees which get to to probably was our actually including thing do, work the center. was biggest so Yes, right of things we hard worked

right at So we're to work home now. pretty XXX% close

servicing mixed making customers. kind And have actually partners closed. who bag who our levels I we service from customers, important. think big servicing sure and are we're then and have We we So meeting really for retailers the have here exceeding level, we opening a a of customers. that are servicing And who we're have because online was retailers their have very

our with the all perspective, we're their from things our both partners say on reacting having both we're that the to a relationship focused in would right teams managers end want perspective. And with from credit are doing them. for the make and retail a dialogues in highly I -- connecting our but providers they're So Obviously they way right forbearance also them. consumer and daily sure

say, note thrilled we are about who to we where partners how feel this. of was really service nice pretty I would we've pretty we to through got customers good our from see one able a our been

way. that we're clear the all So have dialogue we sure We're having back. and making sitting highly engaged, not those along conversations


Wells We Fargo. next Don have our Fandetti question from with

Don Fandetti

QX like you Can could feel helpful. out? go that morning. QX of assumption around good allowance that's XX%. you have you. reserve would higher. was around little your the is you at I higher talk April. Thank Hi, talk assume in that you build, let's bit that you'd needs sort be to flush wondering mentioned Brian, the I about Can And unemployment assume would versus XX%, I a say I in if

Brian Wenzel

you, Don. Yes, thank

So in think make we use the for the under reserve. the a it, about point and methodology if estimate CECL the at obviously set you ACL, we of which really time, assumptions

peak in of into to the is most a And quarter. again, peak, going second and how But disparity As there's it certainly important move like? as is we regard recovery critical. lot it, April bridges parts a people of the of how through does most period how landscape, be look you period people development the is happen quickly the it the to down down? retail that unemployment does stepped the this again, one the wide stimulus in development of with move what pretty from among the that consumer move time down of So, will

a Don. only that coming but you If unemployment yes, in we're that at higher the the deterioration in of through assumptions stimulus days there and posts into the in of kind reserve recovery period be the XX follow the second the point, effects on there would and say is peak quarter then this quarter,

as We recovery how with are see that posts, really period really and to move exact the need you through those in see. we important clarity, stimulus really the develop quarter effects assumptions again and attributes. the can't the second here give would So I reserve we of


And with of question next we from our Ryan have Bank Cary America.

Ryan Cary

you're well morning. my Good you hope and I taking all question. thank for

seeing would all couple versus a fair otherwise? pieces, plans of predict, than about government moving a programs further unemployment is it the a for magnitude the out understand more elevated the and pushed months? all to support And the hard Well couple else to net quarters is of forbearance impact, you charge-offs provide little on I how Given be they equal, could assuming will with pace insight ramping. potential you're charge-offs turning assume of you itself how is the think

Brian Wenzel

you and morning, wishes. good thank for Ryan, Yes, your

really for to that of a We charge-offs XXXX. into the obviously that will it stimulus period today, think package quarter, in bridge the us latter the delay which you to here for net of Again, quarter been much would begin isn't, would about potential consumers as time. the I and charge-offs. So we the expect see hasn't probably third begin elevate part help could some fourth forbearance think

here out first end at honest to develop quarter we to that timing again Again, the this think peak to that the the in and of in we second the going begins as our the be on of we've come is you. really reserve quarter, depend with the magnitude recovery but covered ACL how here

Ryan Cary

of the you Okay. the spend discussions you're pace beyond? business pipeline? new on the the a partnerships. time the impact And some how the XXXX and around having with I current programs could or discuss you And I of prospect can retailers out called does quarter. both environment during deals impact But couple was in signing you renewing know new hoping

Margaret Keane

conversations to Yes, to bit, all been deal the slowed have there. would I and business. believe activity a And look in to I challenges fit we the would to make be we've say pipeline want at there year things, see with rest going maybe of good are it But the we we have we sitting facing now, deals, think good or that think the -- little the been on three have are go trying to decent very sure all I discriminatory not, We've the But conversations, but that's deals right pipeline. a just able good having We'll as and with have feel and progresses. be pretty we do people have platforms, are do the to continue we things they on where pipeline. as in to say had I about activity.

Brian Wenzel

enterprise, or cycle. about is a think we deal, at this the deal a economics to when beginning Yes, the about them. Clearly, seven plan, you about relationship them, Clearly the think an we what as always of I XX-year these the the target through to that really, as at we would of think whenever cycle scenario, we, year add, look through potential think depth Ryan, you that, go economic a highlighted we Margaret really relations, price would with about deterioration and when will as it.

-- we bit So do return will a this risk we really deal is that it a if what more meets probably at only we that as are think conservative conservative a point. and little view adjusted


question Graseck with Betsy Morgan our have We Stanley. next from

Betsy Graseck

Two questions.

the in degree for? give of of RSA and the magnitude puts you RSA, First think related half be remarks on us two takes coming the looking you to CECL year mentioned back maybe the the there impact could would will I Brian you're of prepared and in the that some that day

Brian Wenzel

Yes, and morning. thank you, good

January kind it, about bit. little a changed as So, world's think from of you

reserve that just want perspective between and make I ALLL. First, sure the on the to the difference for have that a CECL provision and quarter we

$XX build million, about I’m $XXX million. really $XXX million COVID-XX and think reserve that the related you being for the of $XXX quarter is to sorry million, total If

vast core we quality than in of came our the So the expectations less higher as credit of we that the kind quarter really majority book, experienced quarter. the which reflected from the entered

whole As is you the CECL. it, think million $XXX about

if as highlighted to to the the $XXX $XXX pass-through the the million, But million think RSA. to that you pass-through the ALLL, did we $XXX about RSA did we So going is is to CECL will million. it's ultimately that we extent what's if subject

expect, year a lowering and we of we the RSA what So dollars would a ALR. the as I of step would obviously say through dollar sequential -- it percent as

second So more and second the that into the see that really you year. then will half quarter in of the

Betsy Graseck


second into that is it's of of part so recognition the half moving reason the revenue the the of And your clients, on function assuming? the retailer I'm

Brian Wenzel

the RSAs Sharing did RSA. us it of from No, not the Betsy, really how it. that change CECL through the is it's And -- lag the as and economic. passed we through to again, just a slight just we implemented had mechanics

So, there difference. no is

about whether slight in comes XXXX, it's the ALLL a think on or you the through lag. just reserve RSA CECL itself If

year. change just as move it it again, we to the of was -- on type the other But benefit the how program we on economics, expect with agreement. And retail second So or you'll it revenue of then that agreements in it's than more recognition just our half. how works begin program more the through their some mechanics the the partners, works more in mechanics throughout the sequential to feel

Betsy Graseck

your CareCredit technology partners? partners if the given Right, over the your then just had is months. follow-up question, or I'm your up for functionality that got are you that is Margaret, it. expand could either about or enhance systems couple you to opportunities types wondering here for there last or thinking or picking offerings? of of functionality to your How And we've opportunities can deliver retail changes you just what the other

Margaret Keane

say interests. of those out two we were were starting before I'd starting perk a kept We've Yes, bit warm. to there things. the that our to get little opportunities pandemic, One, even

how play you got to now really valuations wait out. see think right I to

are jump of interest are quickly. to there, not we're too that there out are us. anything things So to But going into certainly but that

initiatives done have of we've or bit hold little XXXX second off On till We've a other some to teams looked planning realigned think accelerate that that is things we XXXX. can and on working I we actually, to the and piece, thing focus digital our strategic think some stopped that the were have the for we do. we we things our

against out we in penetration there. are Obviously, help end come And certainly our took our we're and us company. go volume those agile putting teams digital I winning coming this consumers and for think to side of capability digital the partners on and And -- going and more we them of through terms the as or our that's through capability. digital more give online the

a know thing. really we this So critical is

have already if not even off teams but driving forward. started Brian Doubles, opportunities kicked it So there. we I the only it you and don't I the externally, and would add have and know think anything

Brian Doubles

went maybe for obvious would were were things this that Margaret them help thing them we as, only very every through the strategic Yes, And us difficult to there said, that I get add accelerate our to project the business. in through partners time. we And did were move quickly. things actually asking

agile So there. in redeployed we

as partners didn't things were that, And special paused things in our things said, And of that open did that then, Margaret then this environment some some make still we there just around online. very that for promotions still have and stores we were are some active sense.

the or of back a reissues, and stable. Dual we half things like kind little upgrade, we had some the things that moved year when more card the delayed become card So of that, to repositioned


Scharf JMP question with David Securities. is next from Our

David Scharf

my providing Hi, to question the on balances for circumstances. previous good morning, I forbearance, and accounts taking recently highlighted. all of much as on relatively quickly Hey be just the and and thanks question you wanted modest can given thanks I the guess follow-up for as color number expected,

maybe is Just curious from of policies? trying they're mean get have billing accounts that a advantage get now of a take to aware that relief sense should of most these potential about in the number and we balances ultimately think people for that sense been I to available month cycle, you sense them, through a what a just the how

Brian Wenzel

Thanks Yes, question. the for great.

social or have used assets, media to our been them to the available are out they've if assets channels, our cetera by impacted digital we get for So COVID-XX. et cardholders that benefits

number taking calls a So call this still program. to outreach our have large we center. we are certainly of Well,

So of other than different we when about the of the think not needed, some we are it consumers about part they talking is peers. dollar our to you

theirs Our even But label. retail balance Duel is much low of average strategy. than again smaller our private the cards given percentage more growth are and

cycle. everyone X% So balances through we it's again of the a reasonable. pretty has think But billing been

think I this in place of through it part plan go again, as I on think we XX. is in this, March they And put

make be We I continued they may of work will certain on time mean, to sure who as that starting plan, assets people to forward, a and will that But need that maybe a had the will them. or furlough begin grow. we see assistance customers for we that they need have but effects, forbearance, provide obviously, number do we're realize continue move we're to again, to assistance our using just to so helping period

David Scharf

purchase just it, partner to are able somewhat segments digital improvement physically discount of a to moment, volume I deemed the percentage to on exposure and within closed of And are you side and wondering for within trends clubs, you've to-date. in of sort from the well, April it. home the places essential Ignoring be Got factor. just open benefited fact having are number got the the is product provide Card actually appreciate Retail on three a retail I'm partners color a that all that obviously, staying of follow-up mitigating that services.

bit Just trying to a --? get little of

Margaret Keane

monitoring be been presence. closed, have they actually say we've Card Retail but the most Yes, side, that digital while some would they on all may I

things partners more Payment that doing actually we certain think So where XXX,XXX I online. little of there bit side, capability. are the to some have it gets are or that's one of online know seeing, have don't a of which Obviously, closed close a or to slowly merchants some what little over complicated we're on our really Solutions them

then things, Believe have seeing in obviously Emergency dental out that's happening. all little not, really is seen happening. seen still spike we're emergency And of there two spike in who it young a you for is still we've little what we've kids CareCredit, a there or orthopedics.

home and things bikes themselves and hurting are people their like that. in on So their

states say do region you there what So it's as where But the stores those partners hard a make that capability; give to digital also know, a a have delivering. very would sure number. trying little with we're you still are and we're I is varies some to wherever by open to it we're are we open. is focused

So give little to mix. hard a it's you a such a because number or percentage


thank you. And

Our next Stephens. from with question is Vincent Caintic

Vincent Caintic

thanks. Hey, Good thanks much and my so taking morning question. for

Just quick two ones.

understanding So and and about maybe thinking declines assets purchase to start volume the shrink.

just rightsize deposits pricing side are thinking just deposits? the deposits how funding asset? the to you case -- how and that, low I'm the to you thinking willing in price I of are On about Or of

Brian Wenzel

Vince. Yes, question, the for thanks

clearly, that funding or way the is is stack view the in the we as using the our cost not economic so in, of side environment effective. And market the think we're secured unsecured about

the back continue at are XX% quarter, probably the that the debts we'll of for deposits So the funding of first of percent overall a as end stack. which us, grow to

So look lean a there. more little bit to

For couple look there. stay of competitive have a we to it's we to that primary in be, going market. competitors And us,

way, marketing as this invest to don't like So we and much in things that. have

we what high on on XX a top in also yield of moved we savings, XXXX. this least with yield movements down regard on year high have down down to down actually points basis moved already were rate deposit basis, at on our savings; we we're XX So the certificate

to that that. one our sources but to continue we'll primary market, So evaluate of be would that relative

to that able So continue that throughout to down XXXX. hopefully be our trend is view or we'll down trend

Vincent Caintic

there see I quick question XXXX and charge-off net X.X%. was is Okay. or a on were your RSAs and any in that? correlation follow-up, you of way Slide about still that the ratio X deck RSAs. Thank look follow-up appropriate Is the When and a think XX% to

Brian Wenzel

provide what clearly, tell you, that Yes, RSAs is Vincent, I move and countercyclical buffer. will

crisis. have to through. the the come do comes earlier the fact as the you that don't scenario it percentages. reduction want draw curve that the Walmart, a direct have a call, similar I when will rate see financial economic I great will again, indicated, the fact RSA on to So And percent the don't correlation shape very see to you different but now this in between charge-off The through, benefit correlation, we as of exact as that the you charge-offs the


Our Dominick with next question is from Oppenheimer. Gabriele

Dominick Gabriele

a for to Thanks and reserve perhaps so the versus it the much for cushion the possibility them the growth, those think instead you create looks the purchase taking basically -- given given some do of that provided. full-year as think of book. for also loans? my detail far CECL expectations, question. that appreciate full-year your think contraction volume changes do the really loan growth potential all unemployment the about builds big Wouldn't and and So over reduction versus really the the quarter-over-quarter be And When variability? do year-over-year you've I that actual from in reserve as releases you about reduction you could about build the quarter-to-quarter? in given pieces? think about two the zero -- do like me how And reserve provide you

Brian Wenzel

first thing, question. you thank for first your the Yes,

I of and couple XX a the be what between down and to XX%. happened being snapshot about down think careful weeks being right. We we gave first XX% on here to try purchase be XX% have XX March on to to points, then you a data bit around April little transparent of volume for March

landscape retail online, the left, that mandates unclear of look when shape like that really curve. retail comes and is and back the what right, What's will

would sure of not if a purchase remainder in the we're XX% the volume you, be to purchase I'm about, thinking for necessarily the company I decline for I going So have were retail volume or year.

So number one. that's, that's

the are also have environment we two, remember you Number rates going that are, see to through in when to economic payment of this time, going you decline. period you're

point an upward things moving really in at look two about will will the a as for bias then against from that to see you'll those on other. you It so be time. the So have reserving each theory think rate, portfolio asset in what us perspective we

Again, assumption? you'll zero. if macroeconomic as is of inside I'm you're to are There at in going do you you online, come economic in not portfolio What is factors several decline the So for say losses that be therefore okay, do necessarily I we've see sure see to I'd and moving directions, back going used are your that March, believe different see move forward. credit retail the assumptions provisions we then the deterioration for that.

Dominick Gabriele

Great, thanks.

actually a what installment yields that of consumer loan risk yields on is clarification and think kind thinking the the do for or nice the appreciate you because your upped over, sustainable? jump, the there. So is you then yield on expectation added the And so go-forward trajectory what trajectory little that are had are of those you and there

Brian Wenzel

disposition of the Yamaha in is by That first driven quarter. being really the

Dominick Gabriele

so appreciate you. Thank it. I great. Thanks much. really Okay,

Greg Ketron

time question. more one have we for So


And thank you.

question last Sakhrani comes with Sanjay KBW. from Our

Sanjay Sakhrani

think we I Thank they're you portfolio. had the about I healthy you guys the made you When of evolving we mentioned hope the you. to when morning. sort and launches safe. And I and guess the on product you to and landscape. subject any Margaret, track. think mentioned are grow macro Verizon staying are commitments Venmo guess, Good

think ask And question on can the just second about spend related we about of that that, maybe spend, embarking and the those this think expenses backdrop? investment should to some you in we investment how we how So that? of think Thanks. guys were my about then had, I'll you broad as other that flexibility

Margaret Keane


answer one. let first me the So

I as digital we Venmo. for very we think capabilities. to Verizon those run So, clearly strategic excited are really really both we continue when us two were our build programs and And out

been there. focused So teams some the we those even two speed on those And accelerating maybe programs if we're things reduced anything; haven't agile that ahead. have launch full focus, have of any

the half able we're for launch So believe about Verizon the launches excited we mid-year second upon environment, Venmo. obviously, really being for the be them, dependent to and will

and those are working hard. really teams about excited So the

we It's our around what what pandemic, me even right? took happening team, a of despite leadership of do the step what and tried operation focus all mean step negative opportunities leadership operation a team are so Brian how bit terms step let investments. we other that things little said, stabilized. get part do say, back and further, back back one did actually a And as of I -- to step In take Doubles the we is the on the there's to also really we

come coming that on what are look we how another are out? do group we And company. have and in initiatives out? what to have We have three, of opportunities out And are like for the then, implications the the we to do And place this? long-term quick working come what

And seven us set organized that of so we've kind up that is the Brian work ourselves streams leading really have kind And way. of to we future. for

things So been of don't some comment Brian, doing. I in to we've more our little the know on you a flexibility want if

Brian Doubles

Yes, I right. that's think

So we went.

out, we continue sense examples we Verizon things Venmo said, at uncertain. project beyond also trying some frankly, lens strategic be that facing, et And to that said, the push on what right based some As now. will don't just are earlier thinking they every of to and things we cetera. crisis. But then I we'll of looked in the through through realities current through okay, move to Margaret then partners our need those faster on We're these And and need are pause, we're things said XXXX. bit of kind do go make little going business, just that the the to a things we continue, okay, then as to we achieve some of said, and delay, as

that ourselves we are, know look we U about how or out streams encompassing a we And can are work best up be some We we is need position shape, whether this. this, of that eight V out aspect different business we change in is degree there or to to coming this seven every all thinking coming our going came the for and really said of with forget future. of said,

that flex they're they're this are that shop have and to is that going are a work to we We to use going of differently, going our as as well. to out need So going pay we know we come looking different our change to We customers team differently, differently, products partners to differently. to strategies they'll spend together differently. to. going know know our going And that way the they're

okay, think vision obviously And of said, plan more three share work really through kind we move And need will we broad have a that as possible. around strategic from those and to one as in really we to buckets looked and emerge we the a I that so as future. of strong each good we we those this in

Sanjay Sakhrani

guess of -- that follow-up base not is just And follow-up little retailers just have? on might the that a your the realigned given I conclusion need a to cost the be lower, might challenges some a bit

Margaret Keane

our we definitely No, base. will have realign to cost

of our on have gate. some of to a this Obviously, we and we're like just, more just, that. base with business as travel I we we're froze done all But saving -- the cost for out the how of we’re already come what we're those like we streams some this to want of of now. the the out. Walmart, get of not reset trying That's so things do if of we things eye kinds how out of little that have one comes the we And that. bit anybody little because We've and work we cost hiring we will a on feeling ball. Brian right base, think on we list. his even But this adjust know we that smaller, actions to thing the that we've jobs, departure the to we has did see

So --

Brian Wenzel

Brian. is this Sanjay,

let me kind of just you started, where on a had bow put So right.

that all develop programs to much And that costs, reserves launch first a was that The highlighted cost significant now. on Verizon the right, the year. think two. say, to shifted component when costs, research know I So which those the you isn't the really question share with we the the your shifting development about has also of the in-app the occur, cost associated Venmo, the a timing for capabilities Venmo, be for hasn't $X.XX costs of let's and that to marketing and

is that As Margaret provide to call and current as in we environment and or not in see transparency obviously how shift get a said, we'll whether July. we our the there will material more

isn't regard started, we with earlier year. we from, change So the think that in guidance there the provided to have -- really I a

Second, to retail just to the development we'll work obviously, rightsize action of efficiency. obviously consumer, highlight to have that, as portions of take think And landscape, of type business obviously, of so about may how that the same development the the there maintain what it. costs through that in we But we'll on we Margaret fixed to the part that's are look the said large the would transparency once it, variable. I order obviously more are

Sanjay Sakhrani

I'm perfect. we guys of That's Wenzel, question, sustainability, balance a should you about how question this sort talked dividend capital sheet about you Brian shrinking? bit, quite asked are I'm sorry, Obviously, thinking How one last being the you it? ratios, about sort through just capital the does extent with excess even think occur, as to to maybe that you're discussions or a Thanks. the capital provides that walk cushion qualify of free-up therefore could regulators? having us were it and because

Brian Wenzel

sure. Yes,

capital GE came capital we out our we've We a position, strength. from probably something capital events as separation ability is higher this. that to to come our as capital out with So but a up and withstand ratio, CET-X with need needed public company separate demonstrate from like we then a stand ratio, a

have we'll well. ratios a economic to we capital migrate period as that Obviously, as our really amount ultimate down our through helps this. significant over continue So goal not capital to transition our into We changed levels to CECL was storm. that to time. feel of weather down that migrate start peer to peers capital has the this we of that the But that

dividend. important for the generate is we is can the that the really one. capital resiliency think of the number our question use to around of the and as as your business business. we priorities regard to think really us believe dividend second our growth continue about With PP&R to We Obviously, about of the existing the programs, we capital

we environment sit dividend. strength, to here The to we upon And the forecasts do we're to continue dividend have that based continue the going the current today, believe we capital pay upon financial second as that. really the that and our based is liquidity to

perspective through our whether that be would pay you And current the us from that's M&A. repurchases dividend portfolio again then a a acquisitions high the as it we're road, priority then But and and assessment, and for down committed move share it's then given obviously, to or environment dividend.

Greg Ketron

us you may this Thanks, Investor available morning. everyone for team joining further The Relations will be questions answer to any have.


And thank you, call. for this today's ladies you participating. gentlemen, Thank and conference concludes

now You disconnect. may