Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this quarterly report and in our 2023 Form 10-K. The discussion below contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations. See “Cautionary Note Regarding Forward-Looking Statements.”

Introduction and Business Overview

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We are a premier consumer financial services company delivering one of the industry's most complete, digitally-enabled product suites. Our experience, expertise and scale encompass a broad spectrum of industries including digital, health and wellness, retail, telecommunications, home, auto, outdoor, pet and more. We have an established and diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers, which we refer to as our “partners.” For the three and nine months ended September 30, 2024, we financed $45.0 billion and $134.2 billion of purchase volume, respectively, and had 70.4 million and 71.1 million average active accounts, respectively, and at September 30, 2024, we had $102.2 billion of loan receivables.

We offer our credit products primarily through our wholly-owned subsidiary, the Bank. In addition, through the Bank, we offer, directly to retail, affinity relationships and commercial customers, a range of deposit products insured by the Federal Deposit Insurance Corporation (“FDIC”), including certificates of deposit, individual retirement accounts (“IRAs”), money market accounts, savings accounts and sweep and affinity deposits. We also take deposits at the Bank through third-party securities brokerage firms that offer our FDIC-insured deposit products to their customers. We have significantly expanded our online direct banking operations in recent years and our deposit base has continued to serve as a source of stable and diversified low cost funding for our credit activities. At September 30, 2024, we had $82.3 billion in deposits, which represented 84% of our total funding sources.

Our Sales Platforms

_________________________________________________________________

We conduct our operations through a single business segment. Profitability and expenses, including funding costs, credit losses and operating expenses, are managed for the business as a whole. Substantially all of our revenue activities are within the United States. We primarily manage our credit products through five sales platforms (Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle). Those platforms are organized by the types of partners we work with, and are measured on interest and fees on loans, loan receivables, active accounts and other sales metrics.

Home & Auto

Our Home & Auto sales platform provides comprehensive payments and financing solutions with integrated in-store and digital experiences through a broad network of partners and merchants providing home and automotive merchandise and services, as well as our Synchrony Car Care network and Synchrony HOME credit card offering. Our Home & Auto sales platform partners include a wide range of key retailers in the home improvement, furniture, bedding, flooring, appliance and electronics industry, such as Ashley HomeStores LTD, Floor & Decor, Lowe's, and Mattress Firm, as well as automotive merchandise and services, such as Chevron and Discount Tire. In addition, we also have program agreements with manufacturers, buying groups and industry associations, such as Generac, Nationwide Marketing Group and the Home Furnishings Association.

Digital

Our Digital sales platform provides comprehensive payments and financing solutions with integrated digital experiences through partners and merchants who primarily engage with their consumers through digital channels. Our Digital sales platform includes key partners delivering digital payment solutions, such as PayPal, including our Venmo program, online marketplaces, such as Amazon and eBay, and digital-first brands and merchants, such as Verizon, the Qurate brands, and Fanatics.

Diversified & Value

Our Diversified & Value sales platform provides comprehensive payments and financing solutions with integrated in-store and digital experiences through large retail partners who deliver everyday value to consumers shopping for daily needs or important life moments. Our Diversified & Value sales platform is comprised of five large retail partners: Belk, Fleet Farm, JCPenney, Sam's Club and TJX Companies, Inc.

Health & Wellness

Our Health & Wellness sales platform provides comprehensive healthcare payments and financing solutions, through a network of providers and health systems, for those seeking health and wellness care for themselves, their families and their pets, and includes our CareCredit brand, as well as partners such as Walgreens.

Lifestyle

Lifestyle provides comprehensive payments and financing solutions with integrated in-store and digital experiences through partners and merchants who offer merchandise in power sports, outdoor power equipment, and other industries such as sporting goods, apparel, jewelry and music. Our Lifestyle sales platform partners include a wide range of key retailers in the apparel, specialty retail, outdoor, music and luxury industry, such as American Eagle, Dick's Sporting Goods, Guitar Center, Kawasaki, Pandora, Polaris, Suzuki and Sweetwater.

Corp, Other

Corp, Other includes activity and balances related to certain program agreements with retail partners and merchants that will not be renewed beyond their current expiration date and certain programs that were previously terminated, which are not managed within the five sales platforms discussed above. Corp, Other also includes amounts related to changes in the fair value of equity investments and realized gains or losses associated with the sale of businesses and investments.

Our Credit Products

____________________________________________________________________________________________

Through our sales platforms, we offer three principal types of credit products: credit cards, commercial credit products and consumer installment loans. We also offer our Payment Security program, which is a debt cancellation product.

The following table sets forth each credit product by type and indicates the percentage of our total loan receivables that are under standard terms only or pursuant to a promotional financing offer at September 30, 2024.


			Promotional Offer
Credit Product	Standard Terms Only		Deferred Interest		Other Promotional		Total
Credit cards	59.2	%	18.5	%	14.3	%	92.0	%
Commercial credit products	1.8		—		0.1		1.9
Consumer installment loans	—		0.2		5.8		6.0
Other	0.1		—		—		0.1
Total	61.1	%	18.7	%	20.2	%	100.0	%

Credit Cards

We offer the following principal types of credit cards:

Private Label Credit Cards.** Private label credit cards are partner-branded credit cards (e.g., Lowe’s or Amazon) or program-branded credit cards (e.g., Synchrony Car Care or CareCredit) that are used primarily for the purchase of goods and services from the partner or within the program network. In addition, in some cases, cardholders may be permitted to access their credit card accounts for cash advances. Credit under our private label credit cards typically is extended either on standard terms only or pursuant to a promotional financing offer.
Dual Cards and General Purpose Co-Branded Cards.** Our patented Dual Cards are credit cards that function as private label credit cards when used to purchase goods and services from our partners, and as general purpose credit cards when used to make purchases from other retailers wherever cards from those card networks are accepted or for cash advance transactions. We also offer general purpose co-branded credit cards that do not function as private label credit cards, as well as a Synchrony-branded general purpose credit card. Dual Cards and general purpose co-branded credit cards are offered across all of our sales platforms and credit is typically extended on standard terms only. We offer either Dual Cards or general purpose co-branded credit cards through over 15 of our large partners, of which the majority are Dual Cards, as well as our CareCredit Dual Card. Consumer Dual Cards and Co-Branded cards totaled 26% of our total loan receivables portfolio at September 30, 2024.

Commercial Credit Products

We offer private label cards and Dual Cards for commercial customers that are similar to our consumer offerings. We also offer a commercial pay-in-full accounts receivable product to a wide range of business customers.

Installment Loans

We originate secured installment loans to consumers (and a limited number of commercial customers) in the United States, primarily for power products in our Outdoor market (motorcycles, ATVs and lawn and garden). We also offer unsecured installment loans primarily in our Home and Auto and Health and Wellness sales platforms and through our various other installment products, such as our Synchrony Pay Later solutions, including pay monthly and pay in 4 products, for short-term loans. Installment loans are closed-end credit accounts where the customer pays down the outstanding balance in installments. Installment loans are generally assessed periodic finance charges using fixed interest rates. Installment loans at September 30, 2024 include loan receivables related to Ally Financial Inc.'s point of sale financing business, ("Ally Lending") that was acquired in March 2024.

Business Trends and Conditions

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We believe our business and results of operations will be impacted in the future by various trends and conditions. For a discussion of certain trends and conditions, see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Trends and Conditions” in our 2023 Form 10-K. For a discussion of how certain trends and conditions impacted the three and nine months ended September 30, 2024, see “—Results of Operations.”

CFPB final rule on credit card late fees.

On March 5, 2024, the CFPB released a final rule amending its regulations that implement the Truth in Lending Act to, among other things, lower the safe harbor dollar amount for credit card late fees from the prior $30 (adjusted to $41 for each subsequent late payment within the next six billing cycles) to $8 and to eliminate the automatic annual inflation adjustment to such safe harbor dollar amount. The final rule, when effective, will result in a significant reduction in our interest and fees on loan receivables. Industry organizations have challenged the final rule in court, and the ultimate outcome of such challenge, including the impact on the final rule, is uncertain. The final rule had an original effective date of May 14, 2024; however, on May 10, 2024, the United States District Court for the Northern District of Texas granted an injunction and stay of the final rule, and the injunction granted remains in effect.

Due to the pending litigation discussed above, which has resulted in a delay in the final rule’s effective date, it remains uncertain whether the final rule will become effective in 2024. As a result, the magnitude of the adverse effects to our results of operations in 2024 also remains uncertain.

In anticipation that the final rule will become effective, we are in the process of implementing a number of product, policy and pricing changes to adjust for the significant reduction in our late fee income. The effects of these changes have started to be reflected in our Consolidated Statement of Income for the three and nine months ended September 30, 2024.

While we continue to believe that over time, the strategies we have identified and are in the process of implementing will fully offset the decline in late fee income resulting from an effective final rule, it may take time for such product, policy and pricing changes to offset the expected reduction in late fees. In addition, we expect that upon the final rule becoming effective, the combined net effects of the final rule and our mitigating strategies would result in a decrease in payments to partners pursuant to our retailer share arrangements. However, the effects of the final rule are also subject to other factors that could increase the adverse effects to our results of operations, including our ability to successfully implement the product, policy and pricing changes we have identified, as well as any potential changes in consumer behavior in response to these changes or the final rule itself.

For a discussion of risks related to a CFPB final late fee rule, please see “—Risk Factors Relating to our Business—The CFPB’s proposed rule on credit card late fees, if adopted, would materially adversely affect our business and results of operations”, in our 2023 Form 10-K.

Growth in loan receivables and interest income.

During the three months ended September 30, 2024, we experienced a decrease in purchase volume of 4.3% compared to the prior year period, primarily driven by lower consumer spending and the impacts from credit actions we have taken across our portfolio where we have seen indications of higher probability of default. We expect these same factors to now result in a low single digit decrease in purchase volume for the year ending December 31, 2024. As a result, while we still anticipate loan receivables to increase for the remainder of 2024, we expect the rate of growth to moderate.

All of the factors discussed above and in our 2023 Form 10-K, such as customer payment behavior and the CFPB final rule on credit card late fees, will continue to have an effect on our loan receivables and interest income. For additional discussion of those factors, please see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Trends and Conditions-CFPB final rule on credit card late fees" and "—Growth in loan receivables and interest income” in our 2023 Form 10-K.

Seasonality

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We experience fluctuations in transaction volumes and the level of loan receivables as a result of higher seasonal consumer spending and payment patterns that typically result in an increase of loan receivables from August through a peak in late December, with reductions in loan receivables typically occurring over the first and second quarters of the following year as customers pay their balances down.

The seasonal impact to transaction volumes and the loan receivables balance typically results in fluctuations in our results of operations, delinquency metrics and the allowance for credit losses as a percentage of total loan receivables between quarterly periods.

In addition to the seasonal variance in loan receivables discussed above, we also typically experience a seasonal increase in delinquency rates and delinquent loan receivables balances during the third and fourth quarters of each year due to lower customer payment rates, resulting in higher net charge-off rates in the first half of the calendar year. Our delinquency rates and delinquent loan receivables balances typically decrease during the subsequent first and second quarters as customers begin to pay down their loan balances and return to current status, resulting in lower net charge-off rates in the second half of the calendar year. Because customers who were delinquent during the fourth quarter of a calendar year have a higher probability of returning to current status when compared to customers who are delinquent at the end of each of our interim reporting periods, we expect that a higher proportion of delinquent accounts outstanding at an interim period end will result in charge-offs, as compared to delinquent accounts outstanding at a year end. Consistent with this historical experience, we generally experience a higher allowance for credit losses as a percentage of total loan receivables at the end of an interim period, as compared to the end of a calendar year. In addition, even in instances of improving credit metrics such as declining past due amounts, we may experience an increase in our allowance for credit losses at an interim period end compared to the prior year end, reflecting these same seasonal trends.

However, in addition to these seasonal trends, the moderation in customer payment behavior from the previously elevated levels we experienced in recent periods, has also significantly impacted our key financial metrics, such as our net charge-off rate, and also the fluctuations experienced between quarterly periods. The effects from these changes in customer payment behavior have resulted and may continue to result in either partial, or in some instances full, offset to the impact from the ongoing seasonal trends discussed above.

Results of Operations

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Highlights for the Three and Nine Months Ended September 30, 2024

Below are highlights of our performance for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023, as applicable, except as otherwise noted.

Net earnings increased to $789 million from $628 million and to $2.7 billion from $1.8 billion for the three and nine months ended September 30, 2024. The increase in the three months ended September 30, 2024 was primarily driven by higher net interest income and lower retailer share arrangements, partially offset by an increase in provision for credit losses. The increase in the nine months ended September 30, 2024 was primarily driven by the after-tax gain on sale related to Pets Best of $802 million, as well as the same trends experienced in the three months ended September 30, 2024.
Loan receivables increased 4.4% to $102.2 billion at September 30, 2024 compared to $97.9 billion at September 30, 2023, primarily driven by lower customer payment rates and the completion of the Ally Lending acquisition, partially offset by lower purchase volume.
Net interest income increased 5.7% to $4.6 billion and 7.1% to $13.4 billion for the three and nine months ended September 30, 2024, respectively. Interest and fees on loans increased 7.2% and 10.5% for the three and nine months ended September 30, 2024, respectively, primarily driven by growth in average loan receivables, the impact of our product, pricing and policy changes and lower payment rate, partially offset by higher reversals. For the three and nine months ended September 30, 2024, interest expense increased 18.5% and 33.8%, respectively, due to higher benchmark rates and higher interest-bearing liabilities.
Retailer share arrangements decreased 6.6% to $914 million and 10.6% to $2.5 billion for the three and nine months ended September 30, 2024, respectively, primarily due to higher net charge-offs.
Over-30 day loan delinquencies as a percentage of period-end loan receivables increased 38 basis points to 4.78% at September 30, 2024 compared to September 30, 2023. The net charge-off rate increased 146 basis points to 6.06% and increased 164 basis points to 6.26% for the three and nine months ended September 30, 2024, respectively.
Provision for credit losses increased by $109 million, or 7.3%, and $1.0 billion, or 24.3%, for the three and nine months ended September 30, 2024, respectively, primarily driven by higher net charge-offs, partially offset by lower reserve builds. The reserve build in the nine months ended September 30, 2024 included $180 million related to the Ally Lending acquisition. Our allowance coverage ratio (allowance for credit losses as a percentage of period-end loan receivables) increased to 10.79% at September 30, 2024, as compared to 10.40% at September 30, 2023.
Other income increased by $27 million to $119 million, and by $1.2 billion to $1.4 billion for the three and nine months ended September 30, 2024, respectively. The increase in the three months ended September 30, 2024 was primarily driven by the impact of our product, pricing and policy change related fees, partially offset by the impact of the Pets Best disposition and venture investment gains and losses. The increase in the nine months ended September 30, 2024 was primarily driven by the $1.1 billion gain on sale related to the Pets Best disposition.
Other expense increased by $35 million, or 3.0%, and $130 million, or 3.8%, for the three and nine months ended September 30, 2024, respectively. The increase in the three and nine months ended September 30, 2024 was primarily driven by costs related to the Ally Lending acquisition, technology investments, and preparatory expenses related to the late fee rule change, partially offset by lower operational losses.
At September 30, 2024, deposits represented 84% of our total funding sources. Total deposits increased by 1.4% to $82.3 billion at September 30, 2024, compared to December 31, 2023.
During the nine months ended September 30, 2024, we declared and paid cash dividends totaling $51 million on our Series A 5.625% fixed rate non-cumulative perpetual preferred stock and our Series B 8.250% fixed rate reset non-cumulative perpetual preferred stock.
During the nine months ended September 30, 2024, we repurchased $900 million of our outstanding common stock, and declared and paid cash dividends of $0.75 per share, or $301 million in the aggregate. In April 2024, the Board of Directors approved an incremental share repurchase program of up to $1.0 billion, through June 30, 2025, and maintained the quarterly dividend at its current amount of $0.25 per common share. At September 30, 2024 we had a total share repurchase authorization of $700 million remaining. For more information, see “Capital—Dividend and Share Repurchases.”
In March 2024, we sold our wholly-owned subsidiary, Pets Best, for consideration comprising a combination of cash and an equity interest in Independence Pet Holdings, Inc. The sale resulted in the recognition of a gain on sale of $1.1 billion, or $802 million net of tax.
In March 2024, we acquired Ally Lending for cash consideration of $2.0 billion. The assets and liabilities of Ally Lending primarily included loan receivables with an unpaid principal balance of $2.2 billion. See Note 3. Acquisitions and Dispositions to our condensed consolidated financial statements for additional information.

2024 Partner Agreements

During the nine months ended September 30, 2024, we continued to expand and diversify our portfolio with the addition or renewal of more than 55 partners, as well as enter new strategic relationships, which included the following:

In our Home & Auto sales platform, we announced our new partnerships with Bel Furniture and The Carpet Guys and extended our program agreements with Associated Materials, BrandsMart and Jerome's Furniture Warehouse.
In our Digital sales platform, we announced our new partnership with Virgin Red and extended our program agreement with Cathay Pacific and Verizon.
In our Health & Wellness sales platform, we expanded our network through our new partnerships with Bond Veterinary, Lakefield Veterinary Group, LaserAway and Western Veterinary and extended our program agreements with Bosley, Innovetive, LCA Vision and SCI. We also launched the integration of our CareCredit card with Pets Best to enable direct insurance claim reimbursement for customers.
In our Lifestyle sales platform, we announced our new partnerships with BRP and Gibson and extended our program agreements with CF Moto, Daniel's, Dick's Sporting Goods, and EC Barton and Reeds.
We added two new strategic technology partnerships with Adit Practice Management Software and ServiceTitan, both of which expand access for customers to our suite of credit products.
We entered into a relationship with Atlanticus Holdings Corporation to deliver a preferred second look financing solution for private label credit cards and installment loan products across our business.

Summary Earnings

The following table sets forth our results of operations for the periods indicated.


	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2024		2023		2024		2023
Interest income	$	5,785	$	5,354	$	16,935	$	15,161
Interest expense	1,176		992		3,516		2,628
Net interest income	4,609		4,362		13,419		12,533
Retailer share arrangements	(914)		(979)		(2,488)		(2,783)

Provision for credit losses	1,597		1,488		5,172		4,161
Net interest income, after retailer share arrangements and provision for credit losses	2,098		1,895		5,759		5,589
Other income	119		92		1,393		218
Other expense	1,189		1,154		3,572		3,442
Earnings before provision for income taxes	1,028		833		3,580		2,365
Provision for income taxes	239		205		855		567
Net earnings	$	789	$	628	$	2,725	$	1,798
Net earnings available to common stockholders	$	768	$	618	$	2,674	$	1,767

Other Financial and Statistical Data

The following table sets forth certain other financial and statistical data for the periods indicated.


	At and for the						At and for the
	Three months ended September 30,						Nine months ended September 30,
($ in millions)	2024			2023			2024			2023
Financial Position Data (Average):
Loan receivables, including held for sale	$	102,009		$	96,230		$	101,484		$	93,198
Total assets	$	119,389		$	110,335		$	119,429		$	108,209
Deposits	$	82,487		$	76,353		$	82,872		$	74,750
Borrowings	$	15,785		$	14,806		$	15,924		$	14,683
Total equity	$	15,815		$	13,758		$	15,318		$	13,537
Selected Performance Metrics:
Purchase volume(1)(2)	$	44,985		$	47,006		$	134,218		$	135,839
Home & Auto	$	11,361		$	12,273		$	34,369		$	35,989
Digital	$	13,352		$	13,808		$	39,383		$	39,541
Diversified & Value	$	14,992		$	15,445		$	44,348		$	44,240
Health & Wellness	$	3,867		$	3,990		$	11,936		$	11,695
Lifestyle	$	1,411		$	1,490		$	4,180		$	4,372
Corp, Other	$	2		$	—		$	2		$	2
Average active accounts (in thousands)(2)(3)	70,424			70,308			71,052			69,842
Net interest margin(4)	15.04		%	15.36		%	14.68		%	15.17		%
Net charge-offs	$	1,553		$	1,116		$	4,759		$	3,218
Net charge-offs (annualized) as a % of average loan receivables, including held for sale	6.06		%	4.60		%	6.26		%	4.62		%
Allowance coverage ratio(5)	10.79		%	10.40		%	10.79		%	10.40		%
Return on assets(6)	2.6		%	2.3		%	3.0		%	2.2		%
Return on equity(7)	19.8		%	18.1		%	23.8		%	17.8		%
Equity to assets(8)	13.25		%	12.47		%	12.83		%	12.51		%
Other expense (annualized) as a % of average loan receivables, including held for sale	4.64		%	4.76		%	4.70		%	4.94		%
Efficiency ratio(9)	31.2		%	33.2		%	29.0		%	34.5		%
Effective income tax rate	23.2		%	24.6		%	23.9		%	24.0		%
Selected Period-End Data:
Loan receivables	$	102,193		$	97,873		$	102,193		$	97,873
Allowance for credit losses	$	11,029		$	10,176		$	11,029		$	10,176
30+ days past due as a % of period-end loan receivables(10)	4.78		%	4.40		%	4.78		%	4.40		%
90+ days past due as a % of period-end loan receivables(10)	2.33		%	2.06		%	2.33		%	2.06		%
Total active accounts (in thousands)(3)	69,965			70,137			69,965			70,137

(1)Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.

(2)Includes activity and accounts associated with loan receivables held for sale.

(3)Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

(4)Net interest margin represents annualized net interest income divided by average total interest-earning assets.

(5)Allowance coverage ratio represents allowance for credit losses divided by total period-end loan receivables.

(6)Return on assets represents annualized net earnings as a percentage of average total assets.

(7)Return on equity represents annualized net earnings as a percentage of average total equity.

(8)Equity to assets represents average total equity as a percentage of average total assets.

(9)Efficiency ratio represents (i) other expense, divided by (ii) sum of net interest income, plus other income, less retailer share arrangements.

(10)Based on customer statement-end balances extrapolated to the respective period-end date.

Average Balance Sheet

The following tables set forth information for the periods indicated regarding average balance sheet data, which are used in the discussion of interest income, interest expense and net interest income that follows.


	2024						2023
Three months ended September 30 ($ in millions)	Average Balance		Interest Income / Expense		Average Yield / Rate(1)		Average Balance		Interest Income/ Expense		Average Yield / Rate(1)
Assets
Interest-earning assets:
Interest-earning cash and equivalents(2)	$	17,316	$	235	5.40	%	$	12,753	$	172	5.35	%
Securities available for sale	2,587		28		4.31	%	3,706		31		3.32	%
Loan receivables, including held for sale(3):
Credit cards	93,785		5,236		22.21	%	90,587		5,003		21.91	%
Consumer installment loans	6,107		238		15.50	%	3,656		108		11.72	%
Commercial credit products	1,992		46		9.19	%	1,861		38		8.10	%
Other	125		2		6.37	%	126		2		6.30	%
Total loan receivables, including held for sale	102,009		5,522		21.54	%	96,230		5,151		21.24	%
Total interest-earning assets	121,912		5,785		18.88	%	112,689		5,354		18.85	%
Non-interest-earning assets:
Cash and due from banks	847						964
Allowance for credit losses	(10,994)						(9,847)
Other assets	7,624						6,529
Total non-interest-earning assets	(2,523)						(2,354)
Total assets	$	119,389					$	110,335
Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	82,100	$	968	4.69	%	$	75,952	$	800	4.18	%
Borrowings of consolidated securitization entities	7,817		108		5.50	%	6,096		86		5.60	%

Senior and subordinated unsecured notes	7,968		100		4.99	%	8,710		106		4.83	%

Total interest-bearing liabilities	97,885		1,176		4.78	%	90,758		992		4.34	%
Non-interest-bearing liabilities:
Non-interest-bearing deposit accounts	387						401
Other liabilities	5,302						5,418
Total non-interest-bearing liabilities	5,689						5,819
Total liabilities	103,574						96,577
Equity
Total equity	15,815						13,758
Total liabilities and equity	$	119,389					$	110,335
Interest rate spread(4)					14.10	%					14.51	%
Net interest income			$	4,609					$	4,362
Net interest margin(5)					15.04	%					15.36	%


	2024						2023
Nine months ended September 30 ($ in millions)	Average Balance		Interest Income / Expense		Average Yield / Rate(1)		Average Balance		Interest Income/ Expense		Average Yield / Rate(1)
Assets
Interest-earning assets:
Interest-earning cash and equivalents(2)	$	17,685	$	720	5.44	%	$	13,107	$	490	5.00	%
Securities available for sale	2,915		99		4.54	%	4,138		92		2.97	%
Loan receivables, including held for sale(3):
Credit cards	93,757		15,345		21.86	%	87,914		14,179		21.56	%
Consumer installment loans	5,644		630		14.91	%	3,375		285		11.29	%
Commercial credit products	1,957		134		9.15	%	1,789		108		8.07	%
Other	126		7		7.42	%	120		7		7.80	%
Total loan receivables, including held for sale	101,484		16,116		21.21	%	93,198		14,579		20.91	%
Total interest-earning assets	122,084		16,935		18.53	%	110,443		15,161		18.35	%
Non-interest-earning assets:
Cash and due from banks	892						987
Allowance for credit losses	(10,850)						(9,552)
Other assets	7,303						6,331
Total non-interest-earning assets	(2,655)						(2,234)
Total assets	$	119,429					$	108,209
Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	82,481	$	2,889	4.68	%	$	74,340	$	2,074	3.73	%
Borrowings of consolidated securitization entities	7,686		323		5.61	%	6,062		241		5.32	%

Senior and subordinated unsecured notes	8,238		304		4.93	%	8,621		313		4.85	%

Total interest-bearing liabilities	98,405		3,516		4.77	%	89,023		2,628		3.95	%
Non-interest-bearing liabilities:
Non-interest-bearing deposit accounts	391						410
Other liabilities	5,315						5,239
Total non-interest-bearing liabilities	5,706						5,649
Total liabilities	104,111						94,672
Equity
Total equity	15,318						13,537
Total liabilities and equity	$	119,429					$	108,209
Interest rate spread(4)					13.76	%					14.41	%
Net interest income			$	13,419					$	12,533
Net interest margin(5)					14.68	%					15.17	%

(1)Average yields/rates are based on annualized total interest income/expense divided by average balances.

(2)Includes average restricted cash balances of $57 million and $151 million for the three months ended September 30, 2024 and 2023, respectively, and $76 million and $324 million for the nine months ended September 30, 2024 and 2023, respectively.

(3)Interest income on loan receivables includes fees on loans, which primarily consist of late fees on our credit products, of $652 million and $694 million for the three months ended September 30, 2024 and 2023, respectively, and $1.9 billion and $2.0 billion for the nine months ended September 30, 2024 and 2023, respectively.

(4)Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.

(5)Net interest margin represents annualized net interest income divided by average total interest-earning assets.

For a summary description of the composition of our key line items included in our Statements of Earnings, see Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K.

Interest Income

Interest income increased by $431 million, or 8.1%, and $1.8 billion, or 11.7%, for the three and nine months ended September 30, 2024, respectively, primarily driven by increases in interest and fees on loans of 7.2% and 10.5%, respectively. The increases in the three and nine months ended September 30, 2024 in interest and fees on loans were primarily driven by growth in average loan receivables, the impact of our product, pricing and policy changes and lower customer payment rates, partially offset by higher reversals.

Average interest-earning assets


Three months ended September 30 ($ in millions)	2024		%		2023		%
Loan receivables, including held for sale	$	102,009	83.7	%	$	96,230	85.4	%
Liquidity portfolio and other	19,903		16.3	%	16,459		14.6	%
Total average interest-earning assets	$	121,912	100.0	%	$	112,689	100.0	%


Nine months ended September 30 ($ in millions)	2024		%		2023		%
Loan receivables, including held for sale	$	101,484	83.1	%	$	93,198	84.4	%
Liquidity portfolio and other	20,600		16.9	%	17,245		15.6	%
Total average interest-earning assets	$	122,084	100.0	%	$	110,443	100.0	%

Average loan receivables, including held for sale, increased 6.0% and 8.9% for the three and nine months ended September 30, 2024, respectively, primarily driven by lower customer payment rates and the impact of the Ally Lending acquisition, partially offset by lower purchase volume. Purchase volume decreased by 4.3% and 1.2% for the three and nine months ended September 30, 2024, respectively, reflecting lower consumer spend as well as the impact of credit actions, partially offset by the Ally Lending acquisition. The decrease for the nine months ended September 30, 2024 was also partially offset by growth in average active accounts of 1.7%.

Yield on average interest-earning assets

The yield on average interest-earning assets increased for the three and nine months ended September 30, 2024 primarily due to increases in the yield on average loan receivables. The loan receivable yield increased 30 basis points for both the three and nine months ended September 30, 2024 to 21.54% and 21.21%, respectively.

Interest Expense

Interest expense increased by $184 million to $1.2 billion, and $888 million to $3.5 billion, for the three and nine months ended September 30, 2024, respectively, due to higher benchmark rates and higher interest-bearing liabilities. Our cost of funds increased to 4.78% and 4.77% for the three and nine months ended September 30, 2024, respectively, compared to 4.34% and 3.95% for the three and nine months ended September 30, 2023, respectively.

Average interest-bearing liabilities


Three months ended September 30 ($ in millions)	2024		%		2023		%
Interest-bearing deposit accounts	$	82,100	83.9	%	$	75,952	83.7	%
Borrowings of consolidated securitization entities	7,817		8.0	%	6,096		6.7	%
Senior and subordinated unsecured notes	7,968		8.1	%	8,710		9.6	%

Total average interest-bearing liabilities	$	97,885	100.0	%	$	90,758	100.0	%


Nine months ended September 30 ($ in millions)	2024		%		2023		%
Interest-bearing deposit accounts	$	82,481	83.8	%	$	74,340	83.5	%
Borrowings of consolidated securitization entities	7,686		7.8	%	6,062		6.8	%
Senior and subordinated unsecured notes	8,238		8.4	%	8,621		9.7	%

Total average interest-bearing liabilities	$	98,405	100.0	%	$	89,023	100.0	%

Net Interest Income

Net interest income increased by $247 million, or 5.7%, and $886 million, or 7.1%, for the three and nine months ended September 30, 2024, respectively, resulting from the changes in interest income and interest expense discussed above.

Retailer Share Arrangements

Retailer share arrangements decreased by $65 million, or 6.6%, and $295 million, or 10.6%, for the three and nine months ended September 30, 2024, respectively, primarily due to higher net charge-offs.

Provision for Credit Losses

Provision for credit losses increased by $109 million, or 7.3%, and $1.0 billion, or 24.3%, for the three and nine months ended September 30, 2024, respectively, primarily driven by higher net charge-offs, partially offset by lower reserve builds in the current year. The net charge-off rate for the three months ended September 30, 2024 increased by 146 basis points to 6.06%, as compared to the prior year period, and was 97 basis points above the average of the third quarters of 2017 through 2019. The reserve build in the nine months ended September 30, 2024 included $180 million related to the Ally Lending acquisition.

Other Income


	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2024		2023		2024		2023
Interchange revenue	$	256	$	267	$	760	$	761
Protection product revenue	145		131		411		371
Loyalty programs	(346)		(358)		(1,011)		(1,001)
Other	64		52		1,233		87
Total other income	$	119	$	92	$	1,393	$	218

Other income increased by $27 million to $119 million, and $1.2 billion to $1.4 billion, for the three and nine months ended September 30, 2024, respectively. The increase in other income for the three months ended September 30, 2024 was primarily driven by the impact of our product, pricing and policy change related fees across all five of our sales platforms. This impact was partially offset by lower commission fees following the Pets Best disposition in March 2024 and venture investment losses in the three months ended September 30, 2024 as compared to net investment gains recognized in the prior year period.

The increase for the nine months ended September 30, 2024 was primarily driven by the gain on sale related to the Pets Best disposition. The pre-tax gain amount of $1.1 billion is included within the Other component of Other Income in our Condensed Consolidated Statements of Earnings for the nine months ended September 30, 2024.

Other Expense


	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2024		2023		2024		2023
Employee costs	$	464	$	444	$	1,394	$	1,346
Professional fees	231		219		687		614
Marketing and business development	123		125		377		389
Information processing	203		177		596		522
Other	168		189		518		571
Total other expense	$	1,189	$	1,154	$	3,572	$	3,442

Other expense increased by $35 million, or 3.0% and by $130 million, or 3.8%, for the three and nine months ended September 30, 2024, respectively.

The increase in the three and nine months ended September 30, 2024 were primarily driven by costs related to the Ally Lending acquisition, technology investments, and preparatory expenses related to the late fee rule change, partially offset by lower operational losses. Technology investments primarily reflect higher amortization of capitalized software expenditures.

Provision for Income Taxes


	Three months ended September 30,						Nine months ended September 30,
($ in millions)	2024			2023			2024			2023
Effective tax rate	23.2		%	24.6		%	23.9		%	24.0		%
Provision for income taxes	$	239		$	205		$	855		$	567

The effective tax rate for the three months ended September 30, 2024 decreased compared to the same period in the prior year primarily due to the resolution of certain tax matters in the current period. The effective tax rate for the nine months ended September 30, 2024 decreased slightly compared to the same period in the prior year. For both periods presented, the effective tax rate differs from the applicable U.S. federal statutory tax rate primarily due to state income taxes.

Platform Analysis

As discussed above under “—Our Sales Platforms,” we offer our credit products primarily through five sales platforms (Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle), which management measures based on their revenue-generating activities. The following is a discussion of certain supplemental information for the three and nine months ended September 30, 2024, for each of our five sales platforms and Corp, Other.

Home & Auto


	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2024		2023		2024		2023
Purchase volume	$	11,361	$	12,273	$	34,369	$	35,989
Period-end loan receivables	$	32,542	$	31,648	$	32,542	$	31,648
Average loan receivables, including held for sale	$	32,613	$	31,239	$	32,358	$	30,386
Average active accounts (in thousands)	19,157		19,223		19,136		18,894

Interest and fees on loans	$	1,489	$	1,367	$	4,290	$	3,867
Other income	$	56	$	28	$	127	$	80

Home & Auto interest and fees on loans increased by $122 million, or 8.9%, and increased by $423 million, or 10.9%, for the three and nine months ended September 30, 2024, respectively, primarily driven by higher average loan receivables and higher benchmark rates. The increase in average loan receivables for both periods primarily reflects the completion of the Ally Lending acquisition as well as the impact of lower customer payment rates, partially offset by lower purchase volume. Purchase volume decreased 7.4% and 4.5% for the three and nine months ended September 30, 2024, as the impact of the Ally Lending acquisition was more than offset by a combination of lower consumer traffic, fewer large ticket purchases and the impact of credit actions.

Other income increased by $28 million, or 100.0%, and $47 million, or 58.8%, for the three and nine months ended September 30, 2024, respectively. The increases for the three and nine months ended September 30, 2024 were primarily due to the impact of product, pricing and policy change related fees, lower loyalty costs and higher protection product revenue.

Digital


	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2024		2023		2024		2023
Purchase volume	$	13,352	$	13,808	$	39,383	$	39,541
Period-end loan receivables	$	27,771	$	26,685	$	27,771	$	26,685
Average loan receivables, including held for sale	$	27,704	$	26,266	$	27,776	$	25,484
Average active accounts (in thousands)	20,787		20,768		21,033		20,641

Interest and fees on loans	$	1,593	$	1,530	$	4,704	$	4,315
Other income	$	4	$	(6)	$	10	$	(7)

Digital interest and fees on loans increased by $63 million, or 4.1%, and $389 million, or 9.0%, for the three and nine months ended September 30, 2024, respectively, primarily driven by higher average loan receivables, lower payment rates and higher benchmark rates. Purchase volume decreased by 3.3% and 0.4% for the three and nine months ended September 30, 2024, primarily driven by lower consumer spend per account and the impact of credit actions. Average active accounts remained flat and increased by 1.9%, for the three and nine months ended September 30, 2024, respectively.

Diversified & Value


	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2024		2023		2024		2023
Purchase volume	$	14,992	$	15,445	$	44,348	$	44,240
Period-end loan receivables	$	19,466	$	18,865	$	19,466	$	18,865
Average loan receivables, including held for sale	$	19,413	$	18,565	$	19,455	$	18,074
Average active accounts (in thousands)	19,960		20,410		20,448		20,571

Interest and fees on loans	$	1,209	$	1,168	$	3,588	$	3,329
Other income	$	(11)	$	(28)	$	(50)	$	(63)

Diversified & Value interest and fees on loans increased by $41 million, or 3.5%, and $259 million, or 7.8%, for the three and nine months ended September 30, 2024, respectively, primarily driven by growth in average loan receivables, lower payment rates and higher benchmark rates. Purchase volume decreased by 2.9% for the three months ended September 30, 2024 primarily driven by lower consumer spend per account and the impact of credit actions. Purchase volume remained flat for the nine months ended September 30, 2024. Average active accounts decreased by 2.2% and 0.6%, for the three and nine months ended September 30, 2024, respectively.

Health & Wellness


	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2024		2023		2024		2023
Purchase volume	$	3,867	$	3,990	$	11,936	$	11,695
Period-end loan receivables	$	15,439	$	14,019	$	15,439	$	14,019
Average loan receivables, including held for sale	$	15,311	$	13,600	$	15,041	$	12,927
Average active accounts (in thousands)	7,801		7,276		7,713		7,076

Interest and fees on loans	$	956	$	844	$	2,736	$	2,365
Other income	$	68	$	74	$	182	$	189

Health & Wellness interest and fees on loans increased by $112 million, or 13.3%, and $371 million, or 15.7%, for the three and nine months ended September 30, 2024, respectively, primarily driven by higher average loan receivables. The growth in average loan receivables for both periods reflected higher purchase volume over the last 12 months and lower customer payment rates, as well as the completion of the Ally Lending acquisition. Purchase volume decreased 3.1%, and average active accounts increased 7.2% for the three months ended September 30, 2024, as lower spend in Dental, Cosmetic and Vision, combined with the impact of credit actions, was partially offset by growth in Pet and Audiology. Purchase volume increased 2.1%, and average active accounts increased 9.0% for the nine months ended September 30, 2024, reflecting growth in Pet and Audiology, partially offset by lower spend in Vision and Dental.

Other income decreased by $6 million, or 8.1%, and $7 million, or 3.7%, for the three and nine months ended September 30, 2024, respectively. The decreases for the three and nine months ended September 30, 2024 were primarily due to lower commission fees following the Pets Best disposition, partially offset by higher protection product revenue and the impact of product, pricing and policy change related fees.

Lifestyle


	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2024		2023		2024		2023
Purchase volume	$	1,411	$	1,490	$	4,180	$	4,372
Period-end loan receivables	$	6,831	$	6,483	$	6,831	$	6,483
Average loan receivables, including held for sale	$	6,823	$	6,383	$	6,726	$	6,137
Average active accounts (in thousands)	2,677		2,556		2,668		2,572

Interest and fees on loans	$	270	$	249	$	783	$	704
Other income	$	9	$	8	$	23	$	22

Lifestyle interest and fees on loans increased by $21 million, or 8.4%, and $79 million, or 11.2%, for the three and nine months ended September 30, 2024, respectively, primarily driven by growth in average loan receivables and higher benchmark rates. The growth in average loan receivables for both periods reflected lower customer payment rates. Purchase volume decreased by 5.3% and 4.4% for the three and nine months ended September 30, 2024, respectively, reflecting lower transaction values and the impact of credit actions.

Corp, Other


	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2024		2023		2024		2023
Purchase volume	$	2	$	—	$	2	$	2
Period-end loan receivables	$	144	$	173	$	144	$	173
Average loan receivables, including held for sale	$	145	$	177	$	128	$	190
Average active accounts (in thousands)	42		75		54		88

Interest and fees on loans	$	5	$	(7)	$	15	$	(1)
Other income	$	(7)	$	16	$	1,101	$	(3)

Other income for the nine months ended September 30, 2024 in Corp, Other primarily included the gain on sale related to the Pets Best disposition of $1.1 billion.

Loan Receivables

____________________________________________________________________________________________

Loan receivables are our largest category of assets and represent our primary source of revenue. The following discussion provides supplemental information regarding our loan receivables portfolio. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies and Note 5. Loan Receivables and Allowance for Credit Losses to our condensed consolidated financial statements for additional information related to our loan receivables.

The following table sets forth the composition of our loan receivables portfolio by product type at the dates indicated.


($ in millions)	At September 30, 2024		%		At December 31, 2023		%
Loan receivables
Credit cards	$	94,008	92.0	%	$	97,043	94.2	%
Consumer installment loans	6,125		6.0		3,977		3.9
Commercial credit products	1,936		1.9		1,839		1.8
Other	124		0.1		129		0.1
Total loan receivables	$	102,193	100.0	%	$	102,988	100.0	%

Loan receivables decreased 0.8% to $102.2 billion at September 30, 2024 compared to $103.0 billion at December 31, 2023, primarily driven by the seasonality of our business and lower purchase volume, partially offset by the Ally Lending acquisition and lower customer payment rates. Loan receivables related to the Ally Lending acquisition are included within Consumer installment loans at September 30, 2024 in the table above.

Loan receivables increased 4.4% to $102.2 billion at September 30, 2024 compared to $97.9 billion at September 30, 2023 driven by lower customer payment rates and the completion of the Ally Lending acquisition, partially offset by lower purchase volume.

Our loan receivables portfolio had the following geographic concentration at September 30, 2024.


($ in millions)	Loan Receivables Outstanding		% of Total Loan Receivables Outstanding
State
Texas	$	11,273	11.0	%
California	$	10,513	10.3	%
Florida	$	9,521	9.3	%
New York	$	4,865	4.8	%
North Carolina	$	4,300	4.2	%

Delinquencies

Over-30 day loan delinquencies as a percentage of period-end loan receivables increased to 4.78% at September 30, 2024 from 4.40% at September 30, 2023, and increased from 4.74% at December 31, 2023. These increases were primarily driven by lower customer payment rates.

Net Charge-Offs

Net charge-offs consist of the unpaid principal balance of loans held for investment that we determine are uncollectible, net of recovered amounts. We exclude accrued and unpaid finance charges and fees and third-party fraud losses from charge-offs. Charged-off and recovered finance charges and fees are included in interest and fees on loans while third-party fraud losses are included in other expense. Charge-offs are recorded as a reduction to the allowance for credit losses and subsequent recoveries of previously charged-off amounts are credited to the allowance for credit losses. Costs incurred to recover charged-off loans are recorded as collection expense and included in Other expense in our Condensed Consolidated Statements of Earnings.

The table below sets forth the net charge-offs and ratio of annualized net charge-offs to average loan receivables, including held for sale, (“net charge-off rate”) for the periods indicated.


	Three months ended September 30,
	2024				2023
($ in millions)	Amount		Rate		Amount		Rate
Credit cards	$	1,429	6.06	%	$	1,040	4.56	%
Consumer installment loans	89		5.80	%	49		5.32	%
Commercial credit products	35		6.99	%	26		5.54	%
Other	—		—	%	1		3.08	%
Total net charge-offs	$	1,553	6.06	%	$	1,116	4.60	%


	Nine months ended September 30,
	2024				2023
($ in millions)	Amount		Rate		Amount		Rate
Credit cards	$	4,392	6.26	%	$	3,003	4.57	%
Consumer installment loans	263		6.22	%	127		5.03	%
Commercial credit products	103		7.03	%	87		6.50	%
Other	1		1.06	%	1		1.10	%
Total net charge-offs	$	4,759	6.26	%	$	3,218	4.62	%

Allowance for Credit Losses

The allowance for credit losses totaled $11.0 billion at September 30, 2024, compared to $10.6 billion at December 31, 2023, respectively, and $10.2 billion at September 30, 2023, and reflects our estimate of expected credit losses for the life of the loan receivables on our Condensed Consolidated Statement of Financial Position. Our allowance for credit losses as a percentage of total period end loan receivables increased to 10.79% at September 30, 2024, from 10.26% at December 31, 2023 and increased from 10.40% at September 30, 2023.

The increase in allowance for credit losses compared to December 31, 2023 and September 30, 2023 includes the addition of the Ally Lending portfolio. See Note 5. Loan Receivables and Allowance for Credit Losses to our condensed consolidated financial statements for additional information.

Funding, Liquidity and Capital Resources

____________________________________________________________________________________________

We maintain a strong focus on liquidity and capital. Our funding, liquidity and capital policies are designed to ensure that our business has the liquidity and capital resources to support our daily operations, our business growth, our credit ratings and our regulatory and policy requirements, in a cost effective and prudent manner through expected and unexpected market environments.

Funding Sources

Our primary funding sources include cash from operations, deposits (direct and brokered deposits), securitized financings and senior and subordinated unsecured notes.

The following table summarizes information concerning our funding sources during the periods indicated:


	2024						2023
Three months ended September 30 ($ in millions)	Average Balance		%		Average Rate		Average Balance		%		Average Rate
Deposits(1)	$	82,100	83.9	%	4.7	%	$	75,952	83.7	%	4.2	%
Securitized financings	7,817		8.0		5.5	%	6,096		6.7		5.6	%
Senior and subordinated unsecured notes	7,968		8.1		5.0	%	8,710		9.6		4.8	%

Total	$	97,885	100.0	%	4.8	%	$	90,758	100.0	%	4.3	%

(1)Excludes $387 million and $401 million average balance of non-interest-bearing deposits for the three months ended September 30, 2024 and 2023, respectively. Non-interest-bearing deposits comprise less than 10% of total deposits for the three months ended September 30, 2024 and 2023.


	2024						2023
Nine months ended September 30 ($ in millions)	Average Balance		%		Average Rate		Average Balance		%		Average Rate
Deposits(1)	$	82,481	83.8	%	4.7	%	$	74,340	83.5	%	3.7	%
Securitized financings	7,686		7.8		5.6	%	6,062		6.8		5.3	%
Senior and subordinated unsecured notes	8,238		8.4		4.9	%	8,621		9.7		4.9	%


Total	$	98,405	100.0	%	4.8	%	$	89,023	100.0	%	3.9	%

(1)Excludes $391 million and $410 million average balance of non-interest-bearing deposits for the nine months ended September 30, 2024 and 2023, respectively. Non-interest-bearing deposits comprise less than 10% of total deposits for the nine months ended September 30, 2024 and 2023.

Deposits

We obtain deposits directly from retail, affinity relationships and commercial customers (“direct deposits”) or through third-party brokerage firms that offer our deposits to their customers (“brokered deposits”). At September 30, 2024, we had $71.6 billion in direct deposits and $10.7 billion in deposits originated through brokerage firms (including network deposit sweeps procured through a program arranger that channels brokerage account deposits to us). A key part of our liquidity plan and funding strategy is to continue to utilize our direct deposit base as a source of stable and diversified low-cost funding.

Our direct deposits are primarily from retail customers and include a range of FDIC-insured deposit products, including certificates of deposit, IRAs, money market accounts, savings accounts, sweep and affinity deposits.

Brokered deposits are primarily from retail customers of large brokerage firms. We have relationships with 10 brokers that offer our deposits through their networks. Our brokered deposits consist primarily of certificates of deposit that bear interest at a fixed rate. These deposits generally are not subject to early withdrawal.

Our ability to attract deposits is sensitive to, among other things, the interest rates we pay, and therefore, we bear funding risk if we fail to pay higher rates, or interest rate risk if we are required to pay higher rates, to retain existing deposits or attract new deposits. To mitigate these risks, our funding strategy includes a range of deposit products, and we seek to maintain access to multiple other funding sources, including securitized financings (including our undrawn committed and uncommitted capacity) and unsecured debt.

The following table summarizes certain information regarding our interest-bearing deposits by type (all of which constitute U.S. deposits) for the periods indicated:


Three months ended September 30 ($ in millions)	2024									2023
Average Balance			%			Average Rate			Average Balance			%			Average Rate
Direct deposits:
Certificates of deposit (including IRA certificates of deposit)	$	40,454		49.3	%		4.9	%		$	34,436		45.3	%		4.1	%
Savings, money market, and demand accounts	30,281			36.9			4.5	%		28,746			37.9			4.4	%
Brokered deposits	11,365			13.8			4.6	%		12,770			16.8			4.0	%
Total interest-bearing deposits	$	82,100		100.0	%		4.7	%		$	75,952		100.0	%		4.2	%


Nine months ended September 30 ($ in millions)	2024									2023
Average Balance			%			Average Rate			Average Balance			%			Average Rate
Direct deposits:
Certificates of deposit (including IRA certificates of deposit)	$	40,614		49.3	%		4.8	%		$	32,115		43.2	%		3.5	%
Savings, money market, and demand accounts	29,467			35.7			4.6	%		29,180			39.3			3.9	%
Brokered deposits	12,400			15.0			4.5	%		13,045			17.5			3.8	%
Total interest-bearing deposits	$	82,481		100.0	%		4.7	%		$	74,340		100.0	%		3.7	%

Our deposit liabilities provide funding with maturities ranging from one day to ten years. At September 30, 2024, the weighted average maturity of our interest-bearing time deposits was one year. See Note 8. Deposits to our condensed consolidated financial statements for more information on the maturities of our time deposits.

The following table summarizes deposits by contractual maturity at September 30, 2024:


($ in millions)	3 Months or Less		Over 3 Months but within 6 Months		Over 6 Months but within 12 Months		Over 12 Months		Total
U.S. deposits (less than FDIC insurance limit)(1)(2)	$	32,972	$	6,572	$	17,483	$	7,745	$	64,772
U.S. deposits (in excess of FDIC insurance limit)(2)
Direct deposits:
Certificates of deposit (including IRA certificates of deposit)	1,485		2,322		5,620		1,587		11,014
Savings, money market, and demand accounts	6,498		—		—		—		6,498


Total	$	40,955	$	8,894	$	23,103	$	9,332	$	82,284

(1)Includes brokered certificates of deposit for which underlying individual deposit balances are assumed to be less than $250,000.

(2)The standard deposit insurance amount is $250,000 per depositor, for each account ownership category. Deposits in excess of FDIC insurance limit presented above include partially insured accounts. Our estimate of the uninsured portion of these deposit balances at September 30, 2024 was approximately $6.0 billion.

Securitized Financings

We access the asset-backed securitization market using the Synchrony Card Issuance Trust (“SYNIT”) through which we may issue asset-backed securities through both public transactions and private transactions funded by financial institutions and commercial paper conduits. In addition, we issue asset-backed securities in private transactions through the Synchrony Credit Card Master Note Trust (“SYNCT”) and the Synchrony Sales Finance Master Trust (“SFT”).

The following table summarizes expected contractual maturities of the investors’ interests in securitized financings, excluding debt premiums, discounts and issuance costs at September 30, 2024.


($ in millions)	Less Than One Year		One Year Through Three Years		Four Years Through Five Years		After Five Years		Total
Scheduled maturities of long-term borrowings—owed to securitization investors:
SYNCT	$	550	$	1,100	$	—	$	—	$	1,650
SFT	450		1,000		—		—		1,450
SYNIT(1)	1,675		3,250		—		—		4,925
Total long-term borrowings—owed to securitization investors	$	2,675	$	5,350	$	—	$	—	$	8,025

(1)Excludes any subordinated classes of SYNIT notes that we owned at September 30, 2024.

We retain exposure to the performance of trust assets through: (i) in the case of SYNCT, SFT and SYNIT, subordinated retained interests in the loan receivables transferred to the trust in excess of the principal amount of the notes for a given series that provide credit enhancement for a particular series, as well as a pari passu seller’s interest in each trust and (ii) in the case of SYNIT, any subordinated classes of notes that we own.

All of our securitized financings include early repayment triggers, referred to as early amortization events, including events related to material breaches of representations, warranties or covenants, inability or failure of the Bank to transfer loan receivables to the trusts as required under the securitization documents, failure to make required payments or deposits pursuant to the securitization documents, and certain insolvency-related events with respect to the related securitization depositor, Synchrony (solely with respect to SYNCT) or the Bank. In addition, an early amortization event will occur with respect to a series if the excess spread as it relates to a particular series or for the trust, as applicable, falls below zero. Following an early amortization event, principal collections on the loan receivables in the applicable trust are applied to repay principal of the trust's asset-backed securities rather than being available on a revolving basis to fund the origination activities of our business. The occurrence of an early amortization event also would limit or terminate our ability to issue future series out of the trust in which the early amortization event occurred. No early amortization event has occurred with respect to any of the securitized financings in SYNCT, SFT or SYNIT.

The following table summarizes for each of our trusts the three-month rolling average excess spread at September 30, 2024.


	Note Principal Balance ($ in millions)		# of Series Outstanding	Three-Month Rolling Average Excess Spread(1)
SYNCT	$	1,650	3	~ 14.8 - 15.6%
SFT	$	1,450	5	12.5	%
SYNIT	$	4,925	1	17.2	%

(1)Represents the excess spread (generally calculated as interest income collected from the applicable pool of loan receivables less applicable net charge-offs, interest expense and servicing costs, divided by the aggregate principal amount of loan receivables in the applicable pool) for SFT or, in the case of SYNCT, a range of the excess spreads relating to the particular series issued within such trust or, in the case of SYNIT, the excess spread relating to the one outstanding series issued within such trust, in all cases omitting any series that have not been outstanding for at least three full monthly periods and calculated in accordance with the applicable trust or series documentation, for the three securitization monthly periods ended September 30, 2024.

Senior and Subordinated Unsecured Notes

During the nine months ended September 30, 2024, we made repayments totaling $1.85 billion of senior unsecured notes issued by Synchrony Financial.

The following table provides a summary of our outstanding fixed rate senior and subordinated unsecured notes at September 30, 2024, which includes $750 million of senior unsecured notes issued by Synchrony Financial in August 2024.


Issuance Date	Interest Rate(1)	Maturity	Principal Amount Outstanding(2)
($ in millions)
Fixed rate senior unsecured notes:
Synchrony Financial
July 2015	4.500%	July 2025	1,000
August 2016	3.700%	August 2026	500
December 2017	3.950%	December 2027	1,000
March 2019	5.150%	March 2029	650
October 2021	2.875%	October 2031	750
June 2022	4.875%	June 2025	750
Synchrony Bank
August 2022	5.400%	August 2025	900
August 2022	5.625%	August 2027	600

Fixed to floating rate senior unsecured notes:
Synchrony Financial
August 2024	5.935%(3)	August 2030	750

Fixed rate subordinated unsecured notes:
Synchrony Financial
February 2023	7.250%	February 2033	750
Total fixed rate and fixed to floating rate senior and subordinated unsecured notes			$	7,650

(1)Weighted average interest rate of all senior and subordinated unsecured notes at September 30, 2024 was 4.91%.

(2)The amounts shown exclude unamortized debt discounts, premiums and issuance costs.

(3)Interest rate fixed through August 1, 2029; resets August 2, 2029 to floating rate based on compounded Secured Overnight Financing Rate ("SOFR") plus 213 basis points.

Short-Term Borrowings

Except as described above, there were no material short-term borrowings for the periods presented.

Covenants

The indentures pursuant to which our senior and subordinated unsecured notes have been issued include various covenants. If we do not satisfy any of these covenants, the maturity of amounts outstanding thereunder may be accelerated and become payable. We were in compliance with all of these covenants at September 30, 2024.

At September 30, 2024, we were not in default under any of our credit facilities.

Credit Ratings

Our borrowing costs and capacity in certain funding markets, including securitizations and senior and subordinated debt, may be affected by the credit ratings of the Company, the Bank and the ratings of our asset-backed securities.

The table below reflects our current credit ratings and outlooks:


	S&P	Fitch Ratings
Synchrony Financial
Senior unsecured debt	BBB-	BBB-
Subordinated unsecured debt	BB+	BB+
Preferred stock	BB-	B+
Outlook for Synchrony Financial	Stable	Positive
Synchrony Bank
Senior unsecured debt	BBB	BBB-
Outlook for Synchrony Bank	Stable	Positive

In addition, certain of the asset-backed securities issued by SYNIT are rated by Fitch, S&P and/or Moody’s. A credit rating is not a recommendation to buy, sell or hold securities, may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. Downgrades in these credit ratings could materially increase the cost of our funding from, and restrict our access to, the capital markets.

Liquidity

____________________________________________________________________________________________

We seek to ensure that we have adequate liquidity to sustain business operations, fund asset growth, satisfy debt obligations and to meet regulatory expectations under normal and stress conditions.

We maintain policies outlining the overall framework and general principles for managing liquidity risk across our business, which is the responsibility of our Asset and Liability Management Committee, a management committee under the oversight of the Risk Committee of our Board of Directors. We employ a variety of metrics to monitor and manage liquidity. We perform regular liquidity stress testing and contingency planning as part of our liquidity management process. We evaluate a range of stress scenarios including Company specific and systemic events that could impact funding sources and our ability to meet liquidity needs.

We maintain a liquidity portfolio, which at September 30, 2024 had $19.7 billion of liquid assets, primarily consisting of cash and equivalents, less cash in transit which is not considered to be liquid, compared to $16.8 billion of liquid assets at December 31, 2023. The increase in liquid assets was primarily due to deposit growth and the issuances of securitized debt and preferred stock, as well as the proceeds from the Pets Best disposition. We believe our liquidity position at September 30, 2024 remains strong as we continue to operate in a period of uncertain economic conditions and we will continue to closely monitor our liquidity as economic conditions change.

As a general matter, investments included in our liquidity portfolio are expected to be highly liquid, giving us the ability to readily convert them to cash. The level and composition of our liquidity portfolio may fluctuate based upon the level of expected maturities of our funding sources as well as operational requirements and market conditions.

We also have access to several additional sources of liquidity beyond our liquidity portfolio. At September 30, 2024, we had an aggregate of $11.4 billion of available borrowing capacity through the Federal Reserve’s discount window. In addition, we had $2.7 billion of undrawn capacity on our securitized financings, subject to customary borrowing conditions, from private lenders under our securitization programs, of which $2.2 billion was committed and $450 million was uncommitted, as well as $500 million of undrawn committed capacity under our unsecured revolving credit facility with private lenders. We also have other unencumbered assets in the Bank available to be used to generate additional liquidity through secured borrowings or asset sales or to be pledged to the Federal Reserve Board for credit at the discount window.

We rely significantly on dividends and other distributions and payments from the Bank for liquidity; however, bank regulations, contractual restrictions and other factors limit the amount of dividends and other distributions and payments that the Bank may pay to us. For a discussion of regulatory restrictions on the Bank’s ability to pay dividends, see “Regulation—Risk Factors Relating to Regulation—We are subject to restrictions that limit our ability to pay dividends and repurchase our common stock; the Bank is subject to restrictions that limit its ability to pay dividends to us, which could limit our ability to pay dividends, repurchase our common stock or make payments on our indebtedness” and “Regulation—Regulation Relating to Our Business—Savings Association Regulation—Dividends and Stock Repurchases” in our 2023 Form 10-K.

Capital

____________________________________________________________________________________________

Our primary sources of capital have been earnings generated by our business and existing equity capital. We seek to manage capital to a level and composition sufficient to support the risks of our business, meet regulatory requirements, adhere to rating agency targets and support future business growth. The level, composition and utilization of capital are influenced by changes in the economic environment, strategic initiatives and legislative and regulatory developments. Within these constraints, we are focused on deploying capital in a manner that will provide attractive returns to our stockholders.

Beginning in 2024, we are now subject to the Federal Reserve Board's formal capital plan submission requirements and have submitted our capital plan to the Federal Reserve Board.

Dividend and Share Repurchases


Common Stock Cash Dividends Declared	Month of Payment	Amount per Common Share		Amount
($ in millions, except per share data)
Three months ended March 31, 2024	February 2024	$	0.25	$	102
Three months ended June 30, 2024	May 2024	0.25		100
Three months ended September 30, 2024	August 2024	0.25		99
Total dividends declared		$	0.75	$	301


Series A Preferred Stock Cash Dividends Declared	Month of Payment	Amount per Preferred Share		Amount
($ in millions, except per share data)
Three months ended March 31, 2024	February 2024	$	14.06	$	11
Three months ended June 30, 2024	May 2024	14.06		10
Three months ended September 30, 2024	August 2024	14.06		11
Total Series A dividends declared		$	42.18	$	32


Series B Preferred Stock Cash Dividends Declared	Month of Payment	Amount per Preferred Share		Amount
($ in millions, except per share data)

Three months ended June 30, 2024	May 2024	$	18.79	$	9
Three months ended September 30, 2024	August 2024	20.63		10
Total Series B dividends declared		$	39.42	$	19

In February 2024, we issued depositary shares representing $500 million of Series B 8.250% fixed rate reset non-cumulative perpetual preferred stock, with dividends payable quarterly beginning in May 2024. The declaration and payment of future dividends to holders of our common and preferred stock will be at the discretion of the Board and will depend on many factors. For a discussion of regulatory and other restrictions on our ability to pay dividends and repurchase stock, see “Regulation—Risk Factors Relating to Regulation—We are subject to restrictions that limit our ability to pay dividends and repurchase our common stock; the Bank is subject to restrictions that limit its ability to pay dividends to us, which could limit our ability to pay dividends, repurchase our common stock or make payments on our indebtedness” in our 2023 Form 10-K.


Common Shares Repurchased Under Publicly Announced Programs	Total Number of Shares Purchased	Dollar Value of Shares Purchased
($ and shares in millions)
Three months ended March 31, 2024	7.5	$	300
Three months ended June 30, 2024	6.9	300
Three months ended September 30, 2024	6.6	300
Total	21.0	$	900

During the nine months ended September 30, 2024, we repurchased $900 million of common stock as part of our 2023 share repurchase program. In April 2024, the Board of Directors approved an incremental share repurchase program of up to $1.0 billion through June 30, 2025 (the "2024 plan"). At September 30, 2024, $700 million of the authorization capacity under the 2024 plan remained outstanding. Repurchases under this program are subject to market conditions and other factors, including legal and regulatory restrictions and required approvals, if any.

Regulatory Capital Requirements - Synchrony Financial

As a savings and loan holding company, we are required to maintain minimum capital ratios, under the applicable U.S. Basel III capital rules. For more information, see “Regulation—Savings and Loan Holding Company Regulation” in our 2023 Form 10-K.

For Synchrony Financial to be a well-capitalized savings and loan holding company, Synchrony Bank must be well-capitalized and Synchrony Financial must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve Board to meet and maintain a specific capital level for any capital measure. At September 30, 2024, Synchrony Financial met all the requirements to be deemed well-capitalized.

The following table sets forth the composition of our capital ratios for the Company calculated under the Basel III Standardized Approach rules at September 30, 2024 and December 31, 2023, respectively.


	Basel III
	At September 30, 2024				At December 31, 2023
($ in millions)	Amount		Ratio(1)		Amount		Ratio(1)
Total risk-based capital	$	16,864	16.4	%	$	15,464	14.9	%
Tier 1 risk-based capital	$	14,723	14.3	%	$	13,334	12.9	%
Tier 1 leverage	$	14,723	12.5	%	$	13,334	11.7	%
Common equity Tier 1 capital	$	13,501	13.1	%	$	12,600	12.2	%
Risk-weighted assets	$	103,103			$	103,460

(1)Tier 1 leverage ratio represents total Tier 1 capital as a percentage of total average assets, after certain adjustments. All other ratios presented above represent the applicable capital measure as a percentage of risk-weighted assets.

The Company elected to adopt the option provided by the interim final rule issued by joint federal bank regulatory agencies, which largely delayed the effects of CECL on our regulatory capital. Beginning in the first quarter of 2022, the effects are being phased-in over a three-year transitional period through 2024, collectively the “CECL regulatory capital transition adjustment”. The effects of CECL on our regulatory capital will be fully phased-in beginning in the first quarter of 2025. For more information, see “Capital—Regulatory Capital Requirements - Synchrony Financial” in our 2023 Form 10-K.

Capital amounts and ratios in the above table all reflect the applicable CECL regulatory capital transition adjustment for each period. The increase in our common equity Tier 1 capital ratio compared to December 31, 2023 was primarily due to the retention of net earnings during the nine months ended September 30, 2024 and the net impact of the Pets Best disposition and Ally Lending acquisition, partially offset by the third year phase-in of the impact of CECL on our regulatory capital.

Regulatory Capital Requirements - Synchrony Bank

At September 30, 2024 and December 31, 2023, the Bank met all applicable requirements to be deemed well-capitalized pursuant to OCC regulations and for purposes of the Federal Deposit Insurance Act. The following table sets forth the composition of the Bank’s capital ratios calculated under the Basel III Standardized Approach rules at September 30, 2024 and December 31, 2023, and also reflects the applicable CECL regulatory capital transition adjustment for each period.


	At September 30, 2024				At December 31, 2023				Minimum to be Well-Capitalized under Prompt Corrective Action Provisions
($ in millions)	Amount		Ratio		Amount		Ratio		Ratio
Total risk-based capital	$	15,583	15.9	%	$	14,943	15.3	%	10.0%
Tier 1 risk-based capital	$	13,499	13.8	%	$	12,880	13.2	%	8.0%
Tier 1 leverage	$	13,499	12.1	%	$	12,880	12.0	%	5.0%
Common equity Tier 1 capital	$	13,499	13.8	%	$	12,880	13.2	%	6.5%

Failure to meet minimum capital requirements can result in the initiation of certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could limit our business activities and have a material adverse effect on our business, results of operations and financial condition. See “Regulation—Risk Factors Relating to Regulation—Failure by Synchrony and the Bank to meet applicable capital adequacy and liquidity requirements could have a material adverse effect on us” in our 2023 Form 10-K.

Off-Balance Sheet Arrangements and Unfunded Lending Commitments

____________________________________________________________________________________________

We do not have any material off-balance sheet arrangements, including guarantees of third-party obligations. Guarantees are contracts or indemnification agreements that contingently require us to make a guaranteed payment or perform an obligation to a third-party based on certain trigger events. At September 30, 2024, we had not recorded any contingent liabilities in our Condensed Consolidated Statement of Financial Position related to any guarantees. See Note 6 - Variable Interest Entities to our condensed consolidated financial statements for more information on our investment commitments for unconsolidated variable interest entities (“VIE's”).

We extend credit, primarily arising from agreements with customers for unused lines of credit on our credit cards, in the ordinary course of business. Each unused credit card line is unconditionally cancellable by us. See Note 5 - Loan Receivables and Allowance for Credit Losses to our condensed consolidated financial statements for more information on our unfunded lending commitments.

Critical Accounting Estimates

____________________________________________________________________________________________

In preparing our condensed consolidated financial statements, we have identified certain accounting estimates and assumptions that we consider to be the most critical to an understanding of our financial statements because they involve significant judgments and uncertainties. The critical accounting estimates we have identified relate to allowance for credit losses and fair value measurements. These estimates reflect our best judgment about current, and for some estimates future, economic and market conditions and their effects based on information available as of the date of these financial statements. If these conditions change from those expected, it is reasonably possible that these judgments and estimates could change, which may result in incremental losses on loan receivables, or material changes to our Condensed Consolidated Statement of Financial Position, among other effects. See “Management's Discussion and Analysis—Critical Accounting Estimates” in our 2023 Form 10-K, for a detailed discussion of these critical accounting estimates.

Regulation and Supervision

____________________________________________________________________________________________

Our business, including our relationships with our customers, is subject to regulation, supervision and examination under U.S. federal, state and foreign laws and regulations. These laws and regulations cover all aspects of our business, including lending and collection practices, treatment of our customers, safeguarding deposits, customer privacy and information security, capital structure, liquidity, dividends and other capital distributions, transactions with affiliates, and conduct and qualifications of personnel. Such laws and regulations directly and indirectly affect key drivers of our profitability, including, for example, capital and liquidity, product offerings, risk management, and costs of compliance.

As a savings and loan holding company and a financial holding company, Synchrony is subject to regulation, supervision and examination by the Federal Reserve Board. As a large provider of consumer financial services, we are also subject to regulation, supervision and examination by the CFPB.

The Bank is a federally chartered savings association. As such, the Bank is subject to regulation, supervision and examination by the OCC, which is its primary regulator, and by the CFPB. In addition, the Bank, as an insured depository institution, is supervised by the FDIC.

On March 5, 2024, the CFPB released a final rule amending its regulations that implement the Truth in Lending Act to, among other things, lower the safe harbor dollar amount for credit card late fees from the prior $30 (adjusted to $41 for each subsequent late payment within the next six billing cycles) to $8 and to eliminate the automatic annual inflation adjustment to such safe harbor dollar amount. The final rule had an original effective date of May 14, 2024. Industry organizations have challenged the final rule in court, and on May 10, 2024, the United States District Court for the Northern District of Texas granted an injunction and stay of the final rule, and the injunction granted remains in effect. The final outcome of such challenge, including the impact on the final rule, is uncertain. See "Business Trends and Conditions" above for the anticipated financial impacts related to the final rule.

On June 20, 2024, the FDIC released a final rule imposing additional requirements for the content of resolution plans submitted by insured depository institutions with $100 billion or more in total assets, including the Bank, following the rule’s effective date of October 1, 2024. Under the final rule, if the FDIC deems a resolution plan filing not credible and the insured depository institution fails to resubmit a credible plan, the institution could become subject to an enforcement action. Our first resolution plan under the final rule is due on July 1, 2025 and we will be required to file a resolution plan once every three years thereafter. Additionally, we will be required to submit interim supplements annually. We are evaluating the impact of the final rule.

On July 30, 2024, the FDIC issued a proposed rule that would revise the FDIC’s regulations governing the classification and treatment of brokered deposits. The proposal would, among other changes, broaden the definition of deposit broker to include agents that place or facilitate the placement of third-party deposits at only one insured depository institution and agents that receive a fee or other remuneration in exchange for the placement of deposits. In addition, the proposal would narrow the exception to the definition of deposit broker for agents whose primary purpose is not the placement of funds with depository institutions. While we are evaluating the potential impact of the proposed rule, if the rule is finalized as proposed, the Bank may be required to classify a greater amount of its deposits obtained with the involvement of third parties as brokered deposits. An increase in the amount of brokered deposits on the Bank’s balance sheet could, among other consequences, increase the Bank’s deposit insurance assessment costs.

On September 10, 2024, the Vice Chair for Supervision at the Federal Reserve Board (the "Vice Chair"), gave a speech outlining a set of potential revisions to the July 2023 interagency proposed rule to revise the U.S. regulatory capital framework (known as the “Basel Endgame” proposal). In the speech, the Vice Chair indicated that he will recommend that the Federal Reserve Board issue a re-proposal of the rule in which banking organizations with total assets between $100 billion and $250 billion, such as Synchrony, would not be subject to the changes to their capital requirements that were included in the July 2023 Basel Endgame proposal, other than the proposed requirement to recognize unrealized gains and losses of their securities in regulatory capital. It remains uncertain whether the federal banking agencies will re-propose the Basel Endgame rule, and if so, whether the agencies will adopt the Vice Chair’s recommendations.

On September 17, 2024, the OCC finalized a new Policy Statement Regarding Statutory Factors Under the Bank Merger Act (the “Policy Statement”), which outlines factors that the OCC will consider when evaluating a proposed bank merger transaction. Also on September 17, 2024, the United States Department of Justice (the “DOJ”) withdrew its 1995 Bank Merger Guidelines and announced that it will instead evaluate the competitive impact of bank mergers using its 2023 Merger Guidelines that the DOJ applies to mergers in all industries. Compared to the 1995 Bank Merger Guidelines, the 2023 Merger Guidelines set forth more stringent concentration limits and add several largely qualitative bases on which the DOJ may challenge a merger. While the effect of these changes for particular transactions remains unclear, both the Policy Statement and the change in the DOJ’s bank merger antitrust policy may make it more difficult and/or costly for us to obtain regulatory approval for an acquisition or may otherwise result in more onerous conditions to obtain approval for an acquisition.

See “Regulation—Regulation Relating to Our Business” in our 2023 Form 10-K for additional information on regulations that apply to us, and “—Capital” above, for discussion of the impact of regulations and supervision on our capital and liquidity, including our ability to pay dividends and repurchase stock.

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