01—Abstract
Summary
Summary of the 8-K filed June 10, 2024. Cited figures are marked; the original filing is the authoritative source.
Synchrony Financial furnished under Item 7.01 (Regulation FD) its monthly charge-off and delinquency statistics for the thirteen months ended May 31, 2024, as Exhibit 99.1.
The information is furnished, not filed, for purposes of Section 18 of the Exchange Act. The company intends to provide these statistics monthly, and for the last month of each calendar quarter they will accompany its earnings announcement for that quarter. The exhibit shows period-end loan receivables of $102.4 billiona at May 31, 2024, up from $93.9 billion at May 31, 2023.
The 30+ day delinquency rate was 4.5%b at May 31, 2024, compared with 3.8% a year earlier, and peaked at 5.0% in February 2024. The net charge-off rate for the month ended May 31, 2024 was 6.5%, compared with 5.0% in May 2023, and the adjusted net charge-off rate was 6.4%, compared with 4.9%. The company states that the year-over-year increases in the 30+ delinquency rate and the net charge-off rate reflect the continued impact of moderation in customer payment rates.
The exhibit also notes that consumer credit card loan receivables represent approximately 92%c of total period-end loan receivables at May 31, 2024. Charge-off timing varies by month because of the number of charge-off cycle dates, which the company says can cause monthly charged-off amounts to vary without a corresponding change in portfolio performance. The statistics are unaudited.
02—Key points
Key Highlights
- Period-end loan receivables were $102.4 billion at May 31, 2024, versus $93.9 billion at May 31, 2023.
- The 30+ day delinquency rate was 4.5% at May 31, 2024, versus 3.8% at May 31, 2023, after a peak of 5.0% in February 2024.
- The net charge-off rate for May 2024 was 6.5%, versus 5.0% in May 2023; the adjusted net charge-off rate was 6.4%, versus 4.9%.
- Management attributes the year-over-year increases in delinquency and net charge-off rates to the continued impact of moderation in customer payment rates.
- Consumer credit card loans represent approximately 92% of total period-end loan receivables at May 31, 2024.
- The company will furnish these statistics monthly, with quarter-end month figures released alongside quarterly earnings.
- The statistics are unaudited and furnished under Item 7.01, so they are not deemed filed under Section 18 of the Exchange Act.
03—Questions
Frequently Asked Questions
How did credit quality trend over the thirteen months ended May 31, 2024?
The 30+ day delinquency rate ranged from 3.8% (May and June 2023) to a peak of 5.0% in February 2024, and was 4.5% at May 31, 2024. The net charge-off rate ranged from 4.0% to 6.7% over the period, reaching 6.7% in April 2024 and 6.5% in May 2024.
How did loan receivables change over the period?
Period-end loan receivables rose from $93.9 billion at May 31, 2023 to $102.4 billion at May 31, 2024. The peak in the table was $103.0 billion at December 31, 2023.
What explains the year-over-year increases in delinquency and charge-offs?
The company states that the year-over-year increases in the 30+ delinquency rate at May 31, 2024 and in the net charge-off rate for May 2024 reflect the continued impact of moderation in customer payment rates.
Why can monthly charge-off figures fluctuate?
Charge-offs are executed on charge-off cycle dates that fall on various days each month. The number of cycle dates varies with the calendar and billing-cycle timing, so charged-off amounts can differ between months even when portfolio performance has not changed.
Will these statistics continue to be released, and how?
Yes. The company intends to furnish these statistics monthly. For the last month of each calendar quarter, the statistics will be furnished together with its announcement of quarterly financial results.
04—Continue