01—Abstract
Summary
Summary of the 8-K filed July 17, 2024. Cited figures are marked; the original filing is the authoritative source.
Synchrony Financial furnished Exhibit 99.1 under Item 7.01 of this Form 8-K, presenting its monthly charge-off and delinquency statistics for the thirteen months ended June 30, 2024.
The statistics are unaudited and expressed in billions of dollars. The company states that it intends to furnish these statistics monthly, and that for the last month of each calendar quarter they will be furnished alongside its quarterly financial results announcement. The information is furnished, not filed, for purposes of Section 18 of the Exchange Act.
Period-end loan receivables were $102.3 billiona at June 30, 2024, compared with $94.8 billion at June 30, 2023. The 30+ day delinquency rate was 4.5% at June 30, 2024, up from 3.8% a year earlier, and peaked at 5.0% in February 2024 before easing. The net charge-off rate was 6.1% for the month ended June 30, 2024, compared with 4.7% for the month ended June 30, 2023.
The adjusted net charge-off rate, which includes a recovery adjustment, was also 6.1%b for June 2024. 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 filing notes that consumer credit card loan receivables represented approximately 92%c of total period-end loan receivables at June 30, 2024. It also reports the number of charge-off cycle dates by month, which the company says can cause monthly charge-off amounts to vary without a corresponding change in portfolio performance.
02—Key points
Key Highlights
- Period-end loan receivables were $102.3 billion at June 30, 2024, up from $94.8 billion at June 30, 2023.
- The 30+ day delinquency rate was 4.5% at June 30, 2024, compared with 3.8% at June 30, 2023, and reached a thirteen-month high of 5.0% in February 2024.
- The net charge-off rate was 6.1% for June 2024, compared with 4.7% for June 2023.
- The adjusted net charge-off rate was 6.1% for June 2024 and 6.4% for May 2024, with the recovery adjustment allocated evenly across quarterly months.
- The company 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 June 30, 2024.
- The company intends to furnish these statistics monthly, with quarter-end month figures released alongside quarterly earnings.
03—Questions
Frequently Asked Questions
What is the 30+ day delinquency trend reported in this filing?
The 30+ day delinquency rate was 4.5% at June 30, 2024, compared with 3.8% at June 30, 2023. It was 5.0% at February 29, 2024, the highest level in the thirteen-month period, and declined to 4.5% by May and June 2024.
How did net charge-off rates change over the period?
The net charge-off rate was 6.1% for June 2024, versus 4.7% for June 2023. It peaked at 6.7% in April 2024 and was 6.5% in February 2024 and 6.6% in March 2024 before easing to 6.5% in May 2024 and 6.1% in June 2024.
What does the company say is driving the higher delinquency and charge-off rates?
The filing states that the year-over-year increase in the 30+ delinquency rate at June 30, 2024 and in the net charge-off rate for June 2024 reflect the continued impact of moderation in customer payment rates.
Why can monthly charge-off amounts fluctuate?
The filing explains that charge-offs are executed on charge-off cycle dates, which vary by month based on the calendar and billing cycles. The number of cycle dates varies between months, so charged-off amounts can change without a corresponding change in portfolio performance.
How often will Synchrony furnish 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 together with its announcement of quarterly financial results.
04—Continue