SYNCHRONY FINANCIAL Barclays 24th Annual Global Financial Services Conference

Welcome, Brian. Terry, thank you.

Glad to be with you today.

Yeah. If you go back to July, we talked about the first part of the third quarter being very consistent with the second quarter, which had about an 8% purchase volume growth. I'd sit back and say we're 2 and a half months through the third quarter, and that's kind of held true. We're in that high single-digit purchase volume growth. Again, if you break it down a little bit, Terry, when you first look at the credit cohorts, what we saw earlier part of the year was strength in super prime, non-prime, and the prime was in the middle. I think when you look at it now, you see super prime continuing to pull. We see a little bit more strength in the prime, and the non-prime is just a little bit behind, but nothing that's concerning whatsoever from that perspective, number 1.

Number 2, I think when you look at the presentation we did back in July, we showed not only consistency in growth, but really the consumer's willingness in the face of affordability, in the face of higher gasoline prices, their willingness to do discretionary purchases. We've continued to see that in the third quarter. We've not seen the consumer being in any way dissuaded from those discretionary increases. That being said, you still see pockets of bigger-ticket discretionary pressure. Most certainly in outdoor and lifestyle, in health and wellness, big-ticket dental, cosmetics. You do see a little bit of that pressure too. Furniture is one that, again, a lot of winners and losers in the furniture space. But the good news is, you saw the results this morning, but Labor Day fell a little bit later this year, so sales are being pushed into September.

But all in all, the consumer from a spending behavior pattern and even a payment behavior pattern is holding very firm and very consistent with the trends we saw the first part of the year.

Yeah. First of all, from a credit standpoint, again, you continue to see strength entering delinquency. Our entry rate into delinquency is better than 2018 and 2019, which is remarkable in this period given the affordability and things like that, but has been incredibly consistent. I think early stage and late stage has been consistent. Five due is probably a little bit weaker, but all in all, from a credit standpoint, we continue to see it as a strength. And part of it is where our credit aperture is set. Because as we came through what was really an overextension of credit for a number of years, we wanted to get our loss rate back inside of the 5.5% to 6%. Now, one of the things that you sit back and say, "Well, we got to slightly less than 5.5% this year." That's the anticipation.

You have a Walmart portfolio that at the end of the day, we just finished our 12th month of origination. You're just starting to see the losses kind of come through on that, number one. Number two, we opened the credit aperture, I'd say third quarter last year. You'll begin to see those losses flow through. If you were higher into that range, you'd be bumping up against the 6%. I think we feel really good about credit. It's in a good space. Consumers are being incredibly responsible at this point in the cycle, so we feel good. Again, we sit here in September. For the most part, 2026 is baked. Now you're sitting around saying, what's the setup for the first half of 2027? Which obviously looks positive. Again, you'd expect it to tick up with Walmart and the maturation of our credit actions, but really, really positive as we exit the third quarter.

Yeah. Let me start where you ended. Some of the credit actions, we continue to take credit actions. They're more idiosyncratic. Where we see pockets of opportunity where the performance of a product, a channel, a vertical makes sense, we are continuing to widen that aperture. Again, it's not broad-based, but it's going to be idiosyncratic, which we normally do as we kind of go. From a credit standpoint, I think we feel really good about the changes we made last year. Consumers have stepped into whether it was credit line increases or new accounts that we generated, and they're being incredibly responsible. We feel good that the credit we're extending is in a good place.

Again, I think when you look at the maturation and seasoning of the credit actions as well as Walmart coming through, it is going to put the consumer in a really good space. You are going to look at this business, we will originate over 20 million new accounts this year. Credit is available for those who need it and want it, and we are there to meet their needs.