SYNCHRONY FINANCIAL | |||||||||||||||||||||||||||||||||||||||||||||||||||
MONTHLY CHARGE-OFF AND DELINQUENCY STATISTICS | |||||||||||||||||||||||||||||||||||||||||||||||||||
AS OF AND FOR EACH OF THE THIRTEEN MONTHS ENDED | |||||||||||||||||||||||||||||||||||||||||||||||||||
(unaudited, $ in billions) | |||||||||||||||||||||||||||||||||||||||||||||||||||
The following table provides monthly charge-off and delinquency statistics as of and for each of the thirteen months ended February 28, 2018. The increase in net charge-offs for the month ended February 28, 2018 compared to the prior year was primarily due to credit normalization, as well as lower recoveries due to a reduction in sales of charged-off accounts. There is no change to the Company's expectations for both our net charge-off rate for the year ended December 31, 2018 and our loan loss reserve build in the first quarter of 2018 from the outlook provided during the Company’s 4Q 2017 earnings conference call held on January 19, 2018. | |||||||||||||||||||||||||||||||||||||||||||||||||||
Feb 28, 2018 | Jan 31, 2018 | Dec 31, 2017 | Nov 30, 2017 | Oct 31, 2017 | Sep 30, 2017 | Aug 31, 2017 | Jul 31, 2017 | Jun 30, 2017 | May 31, 2017 | Apr 30, 2017 | Mar 31, 2017 | Feb 28, 2017 | |||||||||||||||||||||||||||||||||||||||
Period-end loan receivables | $ | 78.4 | $ | 80.1 | $ | 81.9 | $ | 79.5 | $ | 77.4 | $ | 76.9 | $ | 76.8 | $ | 76.2 | $ | 75.5 | $ | 75.0 | $ | 73.8 | $ | 73.4 | $ | 73.7 | |||||||||||||||||||||||||
Average loan receivables, including held for sale | $ | 79.1 | $ | 80.6 | $ | 80.6 | $ | 77.7 | $ | 76.8 | $ | 76.8 | $ | 76.1 | $ | 75.6 | $ | 75.1 | $ | 73.8 | $ | 73.4 | $ | 73.0 | $ | 74.2 | |||||||||||||||||||||||||
30+ days past due as a % of period-end loan receivables | 4.9 | % | 4.8 | % | 4.7 | % | 4.8 | % | 4.9 | % | 4.8 | % | 4.5 | % | 4.4 | % | 4.3 | % | 4.1 | % | 4.1 | % | 4.3 | % | 4.5 | % | |||||||||||||||||||||||||
Net charge-offs (annualized) as a % of average loan receivables, including held for sale(1) | 6.7 | % | 6.0 | % | 5.5 | % | 5.9 | % | 5.9 | % | 4.8 | % | 5.0 | % | 5.0 | % | 5.0 | % | 5.5 | % | 5.7 | % | 4.9 | % | 5.6 | % | |||||||||||||||||||||||||
Recovery adjustment(2) | — | % | (0.1 | )% | 0.2 | % | (0.1 | )% | (0.1 | )% | — | % | — | % | 0.1 | % | 0.1 | % | 0.1 | % | (0.1 | )% | 0.3 | % | — | % | |||||||||||||||||||||||||
Adjusted net charge-offs as a % of average loan receivables, including held for sale(3) | 6.7 | % | 5.9 | % | 5.7 | % | 5.8 | % | 5.8 | % | 4.8 | % | 5.0 | % | 5.1 | % | 5.1 | % | 5.6 | % | 5.6 | % | 5.2 | % | 5.6 | % | |||||||||||||||||||||||||
(1) Charge-offs are executed on charge-off cycle dates which occur on various days during each calendar month. The number of different charge-off cycle dates in each month varies based on such factors as the calendar and the timing of billing cycles. As a result, the amount of charged-off receivables can vary between monthly periods with no corresponding change in the performance of the portfolio. The following table sets forth the number of different charge-off cycle dates for our consumer credit card receivables, which represent greater than 96% of total period end receivables at February 28, 2018, for the calendar months indicated. | |||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
January | 30 | 29 | |||||||||||||||||||||||||||||||||||||||||||||||||
February | 28 | 28 | |||||||||||||||||||||||||||||||||||||||||||||||||
March | 28 | 25 | |||||||||||||||||||||||||||||||||||||||||||||||||
April | 28 | 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
May | 29 | 28 | |||||||||||||||||||||||||||||||||||||||||||||||||
June | 27 | 26 | |||||||||||||||||||||||||||||||||||||||||||||||||
July | 28 | 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
August | 28 | 28 | |||||||||||||||||||||||||||||||||||||||||||||||||
September | 26 | 28 | |||||||||||||||||||||||||||||||||||||||||||||||||
October | 30 | 29 | |||||||||||||||||||||||||||||||||||||||||||||||||
November | 28 | 27 | |||||||||||||||||||||||||||||||||||||||||||||||||
December | 28 | 28 | |||||||||||||||||||||||||||||||||||||||||||||||||
(2) Represents adjustment to allocate recoveries, including debt sales, evenly across the three calendar months of each respective quarterly reporting period. The adjustments for periods other than for the last month of each calendar quarter incorporate estimated recoveries for the applicable full quarterly reporting period. Such estimates are subject to change within each applicable quarter and may differ from actual quarterly results. | |||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Adjusted net charge-offs represent a non-GAAP financial measure. Adjusted net charge-offs as a % of average loan receivables, including held for sale, represent the Company's net charge-off rate for each month including the 'recovery adjustment' defined above. We believe the presentation of this measure is useful to investors as it represents a monthly measure which is more indicative of both our quarterly and annual net charge-off rates. | |||||||||||||||||||||||||||||||||||||||||||||||||||