01—Abstract
Summary
Summary of the 8-K filed December 10, 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 November 30, 2024, in Exhibit 99.1 under Item 7.01 of this Form 8-K.
The company said it will continue to furnish these statistics monthly, and for the last month of each calendar quarter they will be furnished alongside its quarterly earnings announcement. The information is furnished, not filed, and is not subject to Section 18 liability. At November 30, 2024, period-end loan receivables were $102.9 billiona, up from $101.2 billion a year earlier, and average loan receivables, including held for sale, were $101.8 billion versus $99.1 billion in November 2023.
The 30+ delinquency rate rose to 4.9%b from 4.7%, and the net charge-off rate rose to 6.2% from 5.6%. The adjusted net charge-off rate was also 6.2%, compared with 5.6% a year earlier. The company attributes the year-over-year increases in the 30+ delinquency rate and the net charge-off rate to the continued impact of moderation in customer payment rates.
The filing notes that consumer credit card loan receivables represent approximately 92%c of total period-end loan receivables at November 30, 2024. It also explains that monthly charge-offs can vary because charge-offs are executed on charge-off cycle dates, whose number differs by month, and that the recovery adjustment allocates recoveries, including debt sales, evenly across each quarter's three months.
02—Key points
Key Highlights
- Period-end loan receivables were $102.9 billion at November 30, 2024, compared with $101.2 billion at November 30, 2023.
- Average loan receivables, including held for sale, were $101.8 billion for the month ended November 30, 2024, versus $99.1 billion a year earlier.
- The 30+ delinquency rate was 4.9% at November 30, 2024, up from 4.7% at November 30, 2023.
- The net charge-off rate was 6.2% for the month ended November 30, 2024, up from 5.6% in November 2023.
- The adjusted net charge-off rate was 6.2% for November 2024, compared with 5.6% for November 2023.
- 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 loan receivables represent approximately 92% of total period-end loan receivables at November 30, 2024.
03—Questions
Frequently Asked Questions
Why is Synchrony furnishing these statistics?
The company furnishes monthly charge-off and delinquency statistics under Item 7.01 (Regulation FD Disclosure) through Exhibit 99.1. It states it intends to continue doing so monthly, and for the last month of each calendar quarter the statistics will be furnished together with its quarterly financial results announcement.
How did delinquency and charge-off rates change year over year?
At November 30, 2024, the 30+ delinquency rate was 4.9%, compared with 4.7% a year earlier. The net charge-off rate for the month ended November 30, 2024 was 6.2%, compared with 5.6% in November 2023. The company attributes both year-over-year increases to the continued impact of moderation in customer payment rates.
How did the loan portfolio size change?
Period-end loan receivables were $102.9 billion at November 30, 2024, up from $101.2 billion at November 30, 2023. Average loan receivables, including held for sale, were $101.8 billion for November 2024, compared with $99.1 billion for November 2023.
Why can monthly charge-off figures fluctuate?
The filing explains that charge-offs are executed on charge-off cycle dates, which fall on various days each month, and the number of such dates varies with the calendar and billing cycles. As a result, charged-off receivables can vary between months without a corresponding change in portfolio performance. The company also notes that the recovery adjustment spreads recoveries, including debt sales, evenly across each quarter's three months, and that these estimates may differ from actual quarterly results.
What is the adjusted net charge-off rate and how does it differ from the net charge-off rate?
The adjusted net charge-off rate is a non-GAAP measure that adds the recovery adjustment to net charge-offs, expressed as a percentage of average loan receivables, including held for sale. The company says it views this measure as useful to investors because it is a monthly figure more indicative of quarterly and annual net charge-off rates. For November 30, 2024, both the net charge-off rate and the adjusted net charge-off rate were 6.2%.
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