01—Abstract
Summary
Summary of the 8-K filed March 15, 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 February 29, 2024, under Item 7.01 of Form 8-K (Regulation FD).
The unaudited figures show period-end loan receivables of $100.0 billiona at February 29, 2024, down from $101.3 billion in January 2024 and $103.0 billion in December 2023, and average loan receivables of $100.3 billion for the month. Credit metrics deteriorated year over year. The 30+ delinquency rate was 5.0% at February 29, 2024, compared with 3.9% at February 28, 2023.
The net charge-off rate for February 2024 was 6.5%b, compared with 4.7% a year earlier, and the adjusted net charge-off rate was also 6.5%, versus 4.7%. The filing attributes the year-over-year increases in both the 30+ delinquency rate and the net charge-off rate to the continued impact of moderation in customer payment rates.
The filing states that the company will continue to furnish these statistics monthly, and that for the last month of each calendar quarter they will be furnished alongside its quarterly financial results. The filing also notes that consumer credit card loan receivables represent approximately 94%c of total period-end loan receivables at February 29, 2024.
02—Key points
Key Highlights
- Period-end loan receivables were $100.0 billion at February 29, 2024, versus $101.3 billion at January 31, 2024 and $103.0 billion at December 31, 2023.
- The 30+ delinquency rate rose to 5.0% at February 29, 2024, up from 4.9% in January 2024 and 3.9% in February 2023.
- The net charge-off rate was 6.5% for February 2024, compared with 5.8% in January 2024 and 4.7% in February 2023.
- The adjusted net charge-off rate was 6.5% for February 2024, compared with 6.0% in January 2024 and 4.7% in February 2023.
- The filing attributes the year-over-year increases in the 30+ delinquency rate and net charge-off rate to the continued impact of moderation in customer payment rates.
- Consumer credit card loan receivables represent approximately 94% of total period-end loan receivables at February 29, 2024.
- The statistics are unaudited and furnished under Item 7.01, not deemed filed under Section 18 of the Exchange Act; the company will continue monthly reporting, with quarter-end months released alongside earnings.
03—Questions
Frequently Asked Questions
How did credit quality trend in February 2024 compared with a year earlier?
The 30+ delinquency rate was 5.0% at February 29, 2024, versus 3.9% at February 28, 2023. The net charge-off rate was 6.5% versus 4.7%, and the adjusted net charge-off rate was 6.5% versus 4.7%. The filing states that both year-over-year increases reflect the continued impact of moderation in customer payment rates.
Why does the monthly net charge-off rate move from month to month?
The filing explains that charge-offs are executed on charge-off cycle dates that fall on various days each month, and the number of such dates varies with the calendar and billing cycles. Monthly charged-off amounts can therefore vary without a corresponding change in portfolio performance. The adjusted net charge-off rate adds a recovery adjustment that allocates recoveries, including debt sales, evenly across each quarter's three months.
How large is the loan portfolio covered by these statistics?
Period-end loan receivables were $100.0 billion at February 29, 2024, and average loan receivables, including held for sale, were $100.3 billion for the month. The filing states that consumer credit card loan receivables represent approximately 94% of total period-end loan receivables at that date.
When will investors receive these statistics going forward?
The company intends to furnish these statistics monthly. For the last month of each calendar quarter, the statistics will be furnished at the same time as the company's announcement of its quarterly financial results.
04—Continue