01—Abstract
Summary
Summary of the 8-K filed January 23, 2024. Cited figures are marked; the original filing is the authoritative source.
Synchrony Financial furnished its monthly charge-off and delinquency statistics for the thirteen months ended December 31, 2023 under Item 7.01 (Regulation FD) of this Form 8-K.
The unaudited data, presented in billions of dollars, show period-end loan receivables of $103.0 billiona at December 31, 2023, up from $92.5 billion at December 31, 2022, and average loan receivables, including held for sale, of $102.0 billion for the month. Credit metrics moved higher year over year. The 30+ days past due rate as a percentage of period-end loan receivables was 4.7% at December 31, 2023, compared with 3.7% a year earlier.
Net charge-offs (annualized) were 5.7%b of average loan receivables for December 2023, compared with 3.5% for December 2022. Adjusted net charge-offs, a non-GAAP measure that includes a recovery adjustment, were 5.6% for December 2023 versus 3.4% for December 2022. The filing states that these year-over-year increases reflect the normalization of credit trends.
The company intends to furnish these statistics monthly. For the last month of each calendar quarter, the statistics will be released together with its quarterly financial results. The filing notes that consumer credit card loan receivables represent approximately 94%c of total period-end loan receivables at December 31, 2023, and that monthly charge-off figures can vary with the number of charge-off cycle dates in each month.
02—Key points
Key Highlights
- Period-end loan receivables were $103.0 billion at December 31, 2023, versus $92.5 billion at December 31, 2022.
- The 30+ days past due rate was 4.7% of period-end loan receivables at December 31, 2023, up from 3.7% at December 31, 2022.
- Net charge-offs (annualized) were 5.7% of average loan receivables for December 2023, up from 3.5% in December 2022.
- Adjusted net charge-offs, a non-GAAP measure, were 5.6% for December 2023 compared with 3.4% for December 2022.
- Adjusted net charge-off rates were 5.6% in October and November 2023, compared with 4.4% in September 2023.
- Consumer credit card loan receivables represent approximately 94% of total period-end loan receivables at December 31, 2023.
- Going forward, the company will furnish these statistics monthly, with quarter-end month figures released alongside quarterly earnings.
03—Questions
Frequently Asked Questions
Why did the company furnish these monthly credit statistics?
The company furnished the monthly charge-off and delinquency statistics for the thirteen months ended December 31, 2023 under Item 7.01 (Regulation FD Disclosure) and states it intends to continue doing so monthly.
How did delinquencies change year over year at December 31, 2023?
The 30+ days past due rate, as a percentage of period-end loan receivables, was 4.7% at December 31, 2023, compared with 3.7% at December 31, 2022. The filing says this year-over-year increase reflects the normalization of credit trends.
How did net charge-offs compare in December 2023 and December 2022?
Annualized net charge-offs were 5.7% of average loan receivables, including held for sale, for December 2023, compared with 3.5% for December 2022. Adjusted net charge-offs, which include a recovery adjustment of (0.1)% for the month, were 5.6% and 3.4%, respectively.
What is the difference between net charge-offs and adjusted net charge-offs?
Adjusted net charge-offs add a recovery adjustment that allocates recoveries, including debt sales, evenly across the three months of each quarter. The filing describes adjusted net charge-offs as a non-GAAP financial measure that is more indicative of quarterly and annual net charge-off rates.
Why can monthly charge-off figures fluctuate?
The filing explains that charge-offs are executed on charge-off cycle dates, and the number of cycle dates in each month varies with the calendar and billing cycle timing. This can cause charged-off receivables to vary between months without a corresponding change in portfolio performance.
04—Continue