We get started here. Kicking off the conference for the second year in a row. We're excited to once again have Synchrony Financial. Synchrony has continued to manage the credit cycle better than most as losses during 2023 have remained below pre-pandemic levels, all while continuing to deliver double-digit growth and continuing to return capital to shareholders.
Joining us to bring their insights are CEO, Brian Doubles; and CFO, Brian Wenzel. So today's presentation is going to be a fireside chat. So Brian, Brian, welcome.
I want to start with the health of the consumer. We've seen spending volumes slow a bit. Average transaction values are leveling up, but they're still up 5%, but it's clear the consumer is feeling some stress. So maybe just talk about what you're seeing out of the consumer, any recent changes in spending patterns, whether across prime or near prime. And where do you see us headed?
Yes. I think -- well, first, Ryan, thanks for having us. We're happy to be here today.
I think the consumer has continued to be very resilient all year. And I think the trends that we're seeing now as we head into the fourth quarter are similar to what we talked about in October at earnings. We're seeing -- we're still seeing good spend. I think the consumer broadly is healthy. It's definitely different as you break it down by cohort. So not surprisingly, in the lower income brackets, we're starting to see them shift a little bit of their purchasing behavior. They're clearly managing to a budget. So if the average basket size or ticket size is roughly the same, they're rotating into lower-cost goods inside of that basket to kind of manage to that budget.
I think that's actually prudent. That's healthy. That doesn't concern us, but you can definitely see some differences as you look at lower income and then prime and kind of super prime have just continued to outperform. And I think you talked a little bit about credit. We continue to see credit kind of normalize in line with our expectations. Nothing concerning there. We have lagged the industry. So we're just now reaching 2019 levels. So I think that's a testament to prudent underwriting in kind of last 2 or 3 years some of the investments that we've made in PRISM and our credit underwriting tools and the data that we're using and sharing with partners. So generally, I think we're pretty constructive on the consumer overall.
Got it. And Brian, you referenced a trend similar to what you had highlighted on the earnings call. Maybe just a quick view in terms of what you're seeing in 4Q, whether it's spending, any changes to credit margin or loan growth expectations in the near term?
Yes. No, listen, I think as we entered into the fourth quarter from earnings, we were optimistic about holiday and how it's turning out. The consumer continues to be resilient through this period, just to touch on holiday for a second or if you think about Black Friday through Cyber Monday, we were up a little over 5%, so between 5% and 6%. When I look at that in holiday-centric partners and platforms to take out care credit, take out some of the furniture, et cetera. So that was fairly good.
When you look longer because in retail now, the promotional period has dragged down. So if you look at it from November 1 through last week, we're probably a point lower than that for holiday, but that's okay because you actually pick up an extra day an extra weekend day with the longer holiday period. So we feel good about -- we feel good about the spend. The payment rate is declining as we anticipated. So loan growth and performance, we feel good about it from the information we gave you back in October.
Got it. So this has obviously been a challenging backdrop for retailers on putting up negative same-store sales. You guys have been growing spend. You've been growing accounts. Brian, maybe just talk about some of the things you're doing to help your partners manage through a slower sales environment.
Yes. I think one of the things that has always been true in this business is that in times like this, where things start to get a little bit tougher for our partners, they lean even more heavily on the card programs. The card customers tend to be their best customers, their most loyal customers. And this is where we get even more engagement from our partners on, okay, what do we do to re-engage, re-energize that loyal base of customers. And that's all the work we do with our data analytics teams, life cycle marketing, campaigns, promotions. And so we've really accelerated a lot of that activity in the back half of this year, and I think that's helping.
The other thing that's true in times like this, where on the consumer side, where they're trying to kind of make every dollar stretch as far as they can, that first purchase discount really matters, the promotions and the offers and that life cycle marketing that we're doing, that really resonates with consumers. So I think we're attacking it from both sides. And I think you got a really engaged partner base, which is great. and they're trying to make holiday as good as they can make it. And then you've got on the consumer side, you've got an environment with -- it's a little bit more uncertain, and I think they're just trying to make that dollar stretch as far as they can. And that's where we come in, and our products actually add a lot of value there.
Thinking about your different platforms you have. Maybe just talk about what you're the most excited about, obviously, all of them into 2024. And maybe talk about some of the investments you're making across them to drive growth.
Yes, I have to be careful because I'll hear about it afterwards. You didn't mention my platform. Look, I think clearly, health and wellness is a platform all year. We've seen outsized growth. Third quarter year-to-date receivables were up 21%. We're making some big investments there. It's a huge market for us. It's $400 billion in elective health care spend that we're going after. Financing is a relatively small portion of that. So we see a ton of opportunity. 705 of that business is dental and pet care. So it's elective procedures. It's not typically covered by insurance. And so we continue to see a lot of opportunity there. We're launching new products. We're in over 80% of the dentist offices in the United States. We're in over 70% of the vet practices in the U.S. So we've got great scale and great coverage across the U.S. And it's a really powerful brand and a powerful network. I'll tell you out of all of our products, we get the highest customer satisfaction scores, the highest NPS scores in CareCredit. So I think that's a big area of opportunity. And then the other platform I'd probably highlight is digital. We've had a great year. We're partnered with really strong players in the technology space with PayPal and Amazon, the new programs, Venmo and Verizon are performing really well, and we're seeing a lot of growth there. So we're also very excited about what we're seeing in digital.
You talked about pet care. You recently announced the sale of Pets Best to Poodle Holdings. My wife has been in the market for pet insurance so we just got a puppy...
We've done some applications...
I'm sure she'll take a look at it. And you're generating a pretty nice $750 million pretax -- post-tax gain. Can you maybe just walk through the transaction, why this made sense at this point in time? And maybe can we talk about the financial impact, how will this impact both the P&L and how are we thinking about the use of the proceeds?
Yes. So look, this was a great opportunity for us to create a lot of value in a relatively short period of time. So we bought Pets Best back in 2019 for about $100 million. And we grew the pets in force from about 125,000 pets when we bought the business to -- I think it will be around 800,000 by the end of this year. So we saw great growth. We invest in the business, and we are approached by IPH to acquire it. Like I said, created a lot of value. So we bought it for $100 million, we're going to record a $750 million after-tax gain. And at the same time, it's very strategic for us because we're becoming an investor and IPH is a larger pet vertical. And there's nice synergies there longer term for us with CareCredit, synergies for us to work together longer term. So we are very committed to the pet space. This doesn't change that at all. It was just a nice way for us to actually kind of expand the long-term strategic goals that we have. I don't know if you want to talk about the financial piece of that?
Yes. So the FX gained $750 million. We expect it to close hopefully in the first quarter pending regulatory and certain normal closing conditions. And for us, obviously, the generation of capital allows us to do 2 things: one, to grow our RWAs. Brian talked about the opportunities that we have in health and wellness and digital and a little bit of the above-average growth we had. So we're obviously investing in RWAs, maintaining the dividend. And then we'll look at where other places we can invest or return the capital back to our shareholders, but we'll see what plays out. So it's a good way to unlock value on the balance sheet, as Brian said, maintain the exposure to the pet insurance space.
Brian, maybe to drill down, you referenced above-average loan growth. I think you've been targeting 11% this year. Can you maybe just talk broadly about expectations for growth? What do you expect to drive it? You referenced payment rates continuing to come down? And do you -- while I know we'll get guidance next year, do you expect us to slow that historically targeted range of 7% to 10%.
Yes. I think when you look at this year, what drove what I would call the above-average growth from our long-term target of 7% to 10% was twofold: one, the continued strength of the consumer exiting out of the pandemic period, whether it was a lot of hourly wage growth inflation or excess savings. So you had above average spending, number one. Number two, you still have payment rate normalization that happened. So that drove balances. As I look forward in '24 and then into 25, we're expecting the payment rate to really come back in line with a more normalized rate, number one. And then two, you're going to be back to more normalized spending. That spending, as Brian talks about with our partners because we are with the most engaged will be above average relative to the retail partners. And when you combine those 2 things, it should put us back into our long-term framework, which for us, given the balance sheet and our capital generation is a terrific place to be from a growth standpoint.
Brian, maybe sticking with growth. Maybe just talk about the opportunity set for new business wins, both de novos and portfolio acquisitions. Obviously, there's rumors in the market about some portfolios moving around, maybe one that some people in this building are familiar with. How do you think about the cost of acquiring a large portfolio and the level of interest for the company?
Well, so I think, look, if I look at the pipeline today more broadly. It tends to skew a little bit more towards start-up opportunities, but very scalable start-up opportunities, smaller programs that have an existing portfolio. And there's 1 or 2 bigger deals that will probably come to market here. I think across all of those, but particularly on the bigger deals, this is where making sure that you've got a couple of things is really important. You've got to have a really good risk return equation. You got to have really good alignment with the partner. And that's probably the most important thing. We've seen deals that get really challenged when the partnership doesn't work because one partner is doing well and the other one is not. And when we price new business, but particularly on the larger programs, getting that alignment is critical. You want to make sure that both partners really like the program in good times and in bad times. And one of the things that we've always done as we price all new business through a cycle. And we look at it every year and we say, okay, are we still going to like this deal if this happens? Okay, -- are they still going to like it, right? Because you want that alignment on how you're growing the program. You want alignment on pricing and underwriting and all those things are just so important. And you got to get that right on the small deals, but it's absolutely critical to get that right on the larger programs. So that's the lens that we look at everything through. I think we're pretty disciplined. We don't get kind of too over our skis in really good times, and we make sure that we're anticipating times of uncertainty or times when things don't look quite as good. And I think that's important.
So you guys have done a very good job locking up a lot of your key partners, I think the top 5 are signed through 26 and many are [ now ] up for renewal for the next few years. I think you've renewed over 40 this year. Given the environment in slower growth, inflation pressure, worsening credit, maybe just talk about how negotiations with partners have changed over the last 12 months? What are the biggest things they're asking for? And how has the pendulum swung in terms of the economics of the -- of the renewals?
Yes. I wouldn't say it's changed a lot, Ryan. I think -- look, the #1 thing that they're looking for is capabilities, product set capabilities, technology platform, integration, customer experience, how easy is it to apply, how are you leveraging data? Because at the end of the day, they all leverage these programs to drive growth. That's what gets them engaged in the program. And that's what they really care about. So that -- none of that has changed. Certainly, some of the financial assumptions that go into some of these models have changed. You got higher interest rates, you normalizing credit. So obviously, we factor those things in. But back to my earlier comments, we priced for this environment, but we also price for an environment that looks very different than what we're operating in today. If you're going to sign a 7- or 10-year deal or a 5- to 7-year extension, whatever it is, you got to really think about how that deal is going to look in years 3 and 4, where you've got maybe a different interest rate environment. You got different consumer behaviors and different growth prospects. There's just a lot of things that you've got to contemplate in that to make sure that, again, both parties like that deal in every one of those years.
You just announced that you guys won J.Crew from another issuer. And given the comments that you just made about bringing on new deals, maybe just talk a little bit about how the competition has evolved for new business wins? And how is it leading to new opportunities for industry leaders like yourself?
Yes. First, we're really excited to launch a program with J.Crew. We're very excited about that. I think, again, that came down to capabilities and the investments that we've made. We're also going to launch as part of that, a co-brand card. So J.Crew customers will have the ability to use the card out of store and earn rewards and come back in. So we think that's -- that will be a great program for us, and we're really excited about it. I think in terms of the competition more broadly, it continues to be fairly rational. And we were encouraged by that as we kind of went through the last couple of years, when everything looked really good, you had best ever credit performance and low interest rates. -- it's tempting to start to build that in to your model and say, okay, you just assume that, that goes on forever. We didn't see a ton of that. And now I think that we're in a period of a little bit more uncertainty. I see you see more conservatism being built in and the competition is being fairly rational right now. So that's kind of my general sense, which is great for us because like I said, we price for good times and bad times. So if everybody else is being a little conservative, I think that's good. I think the other thing we've seen on the competitive front is we have seen some of the fintechs pullback in different pockets a little bit. We've heard that from our merchants and our partners, and I think that's good for us. We've been anchored in the multiproduct strategy, and we think that's the strategy that wins out over the long term.
Just spend a minute or 2 talking about late fees, just to get your latest views. When are you expecting we're going to get the final rule? And how are your efforts to offset progressing?
Yes. So look, I can't predict when we're going to get a final rule. I would just tell you that we're ready for it. We're prepared. We've been working on this for months now. We're obviously, just to state the obvious, disappointed in the rule. We think there are a lot of unintended consequences that weren't properly evaluated as part of that. I do think it will make credit more expensive for those that pay on time. I think for those that pay late, they'll get a benefit. But many customers without pricing offsets will -- won't have access to credit. And I think that's -- those are the customers that need credit the most. And we know based on our data in our portfolio that customers we approved today, we wouldn't be able to with an $8 late fee. So we've -- across the vast majority of the business, we have pricing actions agreed. We're ready to go when we see the final rule. We spend a lot of time on this, and we're prepared for it.
And as you're engaging with merchants to discuss the offsets, Brian, you and I have talked about this. Maybe just talk about how the discussion is going? Are merchants willing to accept less, maybe just as you think about yield increases as an offset? Have you done testing? And how has it gone?
Let me start on that, and then I'll hand it to -- so I think, look, the thing that -- back to the point on alignment with the partners. If we have customers that we approved today that we wouldn't be able to approve with an $8 late fee. And they don't want to lose those customers and neither do we. So our goal has always been to protect our partners and approve largely the same customers as we do today. And those have been our overriding kind of tenants on this. And our partners are aligned with that. So as we talk about pricing actions and other mitigants, there are very constructive conversations, and we reach agreement, we say, okay, this is what we have to do to kind of protect the customers that we underwrite to that. Do you want to add...
Yes. Listen, as Brian said, we spent the last 9 months or so working on this. We went through a lot of different mitigants, Ryan, evaluating what we could do, the relative impacts. We've tested some of it. Obviously, this is going to be a large-scale repricing not only for our business but for the industry, and we're prepared in a way in which we can do it with the overarching goal of how do we get back to the same level of return and the same level of sales, but that's going to vary a little bit partner by partner given the demographics and their brand, but there have been very productive conversations. So again, between the testing, the research that we've done, we feel good about -- if the rule does come down, as Brian said, at this point, the rule come down like the proposed rule, we'll be ready to act.
And just to bring together just a couple of points that you said, any sort of updated expectations on how long you think this will take to offset? And you referenced returns when we're sitting here a couple of years from now, do you think Synchrony will be to be able to generate the same type of returns that it was before we got into these rules?
Yes. Let me start with the latter point. Our goal is to get back to the same level of return, right? That's the goal. Obviously, we'll see what consumer behavior does to that. But with regard to timing, I know this is a big question. And unfortunately, I can't give you clarity with regard to that. I'd say we are prepared when the rule does come out. There are a number of different factors to think about, one -- a, one is rule come out; b, what happens with litigation. And then we'll have to make a determination of when do you start with some of the mitigants in that context. And when the ultimate rule is effective, the time frame in it. So there are a couple of factors there. I think I know investors and analysts want to understand exactly how this plays out. I think when the rule comes out and we have a little bit of time to just look at it, I think we'll probably be able to give you some perspective of how to think about it. But again, the overarching goal is to get back to where we are today, but it will look a little bit different probably on the P&L.
Maybe shifting gears, talk a little bit about credit. We did see losses uptick in October, which is consistent with your full year guidance. I think at EPS, you had highlighted that flow to loss has been increasing. Maybe just talk about what is driving that? Are you seeing the impact of student loans coming through? And could we see near-term losses coming in higher than expected?
Yes. So let me impact that question a little bit. So first of all, Brian talked about the different cohorts as you think about, you think about the population, the lower cohort, right? So think about non-prime and probably the edge of prime. They're back to pre-pandemic levels, maybe some pockets a little bit worse. So what we see in delinquency is lower entry rates. So the people who normally come in prime people do go into delinquency for losing a job or health-related matters. We're not seeing as much of that. So what you're seeing is lower population as they get into delinquency, the flow to loss is worse than 2019 because the mix is different. And what it tells you is that the consumer, once they get into that situation, don't have access to liquidity given that they can't get a personal loan, home equity line, if they have a home is not available, they don't have the savings. So we see that flow a little bit more severe. We're seeing a lot more debt settlement activity. So that's what you're seeing. I think as you move forward, Ryan, what we anticipate is that the entry rate normalizes. When the entry rate normalizes because you have people that are going to flow in delinquencies that have more access to liquidity, you'll actually see the collection performance rise and probably come back in line with the prepaid debit period. The question is we've taken actions both in the second and third quarter. to tighten up a little bit because I think we look at it to share consumer. We're doing that in like to say, "Hey, listen, we want to maintain our loss profile inside of our target range." That's the optimal place to be. So we're taking actions in order to do that. And as we look at the portfolio today, the formation, we look at we're going to be able to achieve that. So as we sit here, the one thing I want to say, Ryan, unfortunately, you're confidence early so you couldn't get to November delinquency. I know you wanted it. I sit back and say what you should expect as we think about the fourth quarter, delinquency rates will rise here in the fourth quarter, both seasonality, a little bit of performance. And then as you think about next year, we'll be back with more definitive guidance in January, but expect to see losses peak in the first half of the year. And again, we think we come back and stay next year inside of our long-term target of 5.5% to 6% on...
Maybe just to flesh out some of those comments that you made, you talked about taking actions, tightening. Maybe just talk about some of the puts and takes that are driving the peaking in the first half of the year and then my words starting to follow a more normal seasonality? And how do you think about -- I know you've made tightening? How do you think about the risk of that going above the high end of your targeted range?
Yes. First of all, 2 things: one, I don't think we enough credit, Ryan. We are probably the second class issuer to reach normalized levels here in the fourth quarter. So -- and that's a factor of 2 things: one, during the pandemic period, we did not accordion our credit box. We didn't shut a way down. We didn't expand it in order to kind of get growth. We stay much more consistent in our underwriting, number one. Brian touched on the investments we made in advanced underwriting. So we're not -- we're less score reliant. So I think those 2 factors have really helped us try to build in. As we look in the second quarter, one of the things we started to see, which we saw on the betting part of the pandemic was score migration. And we saw -- when we saw a large score migration into non-prime, we decided we're going to take action, right? Because we were concerned about those accounts. As we moved into the third quarter and we saw some of the flow-through to losses I talked about, I think we wanted to tighten some of that exposure at default and tightened origination a little bit, not dramatically because, again, we don't -- we're not -- we're very consistent when it comes to underwriting. So we tightened that up. So new accounts will be a little bit lower next year than our historical run rate. But I think we feel good about the ability to contain losses inside our long-term range, assuming the environment stays somewhat similar to where it is today.
Yes, that we've gone back and fully normalized, you've gone through seasoning of a lot of the portfolio. Does that change the way you think about credit performance if we were to see a downturn? David was talking in his opening remarks that he thought there was going to be a recession in '23. Obviously, there wasn't. And it feels like the chances of soft land are increasing. But how does that look for Synchrony if we're sitting here a year from now and thinking about a potential recession?
A couple of things. You started out with the question about a downturn now. I think there are so many unique aspects of where we are today with higher interest rates, lower liquidity for consumers. So I do think industry-wide downturn looks a little bit different. But I do think one of the real benefits here is that the unemployment rates starting from such a low point that even if you have a downturn, it's going to look different than it did before. I think for us, we have the ability on a lower line strategy. We have less volatility, Ryan, if you go back and look at either the GFC normalization that happened in the '16, '17 window, we have less volatility than what I'd say, normal co-brands because we don't have that big line and exposure at default. So I think even in a downturn, it will be less volatile than many other card issuers.
You referenced that in my words that you have visibility in terms of the peaking of the losses. Your allowance is still above that benchmark of day 1 CECL that we all use for some reason. Just given your -- the look-ahead view of the economy, where do we go on the allowance from here? And how do you think about some of the puts and takes?
Yes. So first of all, our reserve building this year has generally been growth driven. We have qualitative reserves on for what I'd say is an adverse macroeconomic background. We have a qualitative on for potential student loan deterioration whatnot, that shows up in 2024. So I think we've reserved and where we sit today, we feel very good in what's adequately reserved. If you believe the environment kind of muddles through whether it could be a shallow type recession or downturn or if it kind of stays in a soft landing. I think what you'd expect to see is that the reserve rate to migrate back towards day 1 probably will not get there next year, but it will trend down. That's not probably as linear as people think it just kind of go quarter-on-quarter, and our provisioning is mainly going to be hopefully growth-driven as we move forward here. But again, from a rate basis, I would expect it to decline in this environment.
One thing that makes Synchrony unique relative to some others is the presence of the RSA, which serves as an offset, particularly in times like we've seen now with credit losses rising. With is still going up relative to what you've seen over the first couple of quarters in the year, you've talked about a 4% to 4.5% range. How do we get back into that range? And you've highlighted mix as a driver. What do you think some of the puts and takes are? And how does it perform in that scenario that you just laid out?
The first thing, Ryan, I know we have a lot of dialogue with you about the RSA. And a couple of years ago, when it was above 6%, it was because losses were low, interest rates were low. Revenue is still hanging in there a little bit. So in that environment, Brian talked earlier about alignment of interest, our partners made more money, we paid more out in the RSA, that's working as designed. Now as you flow through you sit back and say the interest rates went from effectively nothing to now 5-plus percent when you think about charge-offs getting back in the normalized period. Again, that's a buffer that's pushed us below our long-term target of 4% to 4.5%. I think as you move forward, what you're going to see is as that rate continues on because we'll be, I said, effectively 4.85% for the full year, approximately. As you move into next year being the long-term target, that's obviously a downward bias on the RSA. But again, our net interest margin being approximately [ 50- 50 ] for the year, as that migrates up, that should push the RSA back up into the range. So how those 2 dynamics work and whether or not we get stability with regard to interest rates were they begin to decline. That's how it slides back into there. into that range. It's just really more about timing of those 2 elements, the revenue and the charge-offs coming online and then how interest rates move.
Brian, the company has done excellent job managing costs in a challenging environment. How do you think about balancing investment while also driving operating leverage in the business?
Well, look, we always try to be very disciplined around costs. I mean that's one of -- that's just that's how we run the business. And we -- with that said, we always need to invest in the long-term success of the business as well. And so we -- every year, and we're kind of in our planning mode right now for 2024, we look at investments that both drive growth. But on the other side of the page, we've got a lot of great investments that drive productivity. And we're laser-focused on the efficiency ratio and delivering our long-term target there. Our team is very much aligned. We've got some uncertainty heading into next year. So we're being even more disciplined on cost. -- we're doing a lot of the things we've done in the past, but looking at real estate, looking at T&E being more disciplined around open jobs and hiring early retirement programs, things like that, that will set us up for 2024 and beyond. So we're very focused on it. We're in the middle of that planning stage right now, but this is a team that has a laser focus on the cost structure of the business.
And Brian, as we look into '24, one of the more emerging themes over the past few weeks as the market is starting to believe more and more that the Fed might actually be in the easing cycle. I think most market participants think maybe [indiscernible] is a little too dubbish -- but given the positioning of your balance sheet, I'll call it, slightly liability sensitive. Maybe just talk about some of the drivers of the margin into next year. And if the Fed does begin to ease, where do you see the margin ultimately shaking out? And what are some of the puts and takes?
Yes. The first thing when you think about our variable rate products for a second, they generally lag. So as interest rates come down or just spreads go down, you should get a tailwind with regard to lag, which we faced kind of going into it. It was -- it lags on the way up the benefit. So first of all, you get that benefit. Second of all, for some of our fixed rate product, while we have matching liabilities to -- a little bit of duration of mismatch. So I think as the portfolio resets, particularly on our [ certify ] deposit, you should get margin easing there. So those are 2 really positive trends as you kind of think about it. The question is going to be, as you start to see the rates decline, what are the betas and what are the industry, whether it's the regional banks, digital-only banks or the brick-and-mortar, how quickly they go to move rates? They don't go, rates will stick a little bit longer have a higher beta cycle. But everyone feels like they may want to move more quickly in that environment, particularly ones who are under margin pressure.
And maybe switching gears, we got about 2 minutes to go here, so I want to get through a couple more things. Capital remains very strong. You just had the successful transaction that you mentioned that will close in 1Q that will shore up the capital ratios, and you're still one of the few out there that's returning capital given all the regulations that are coming on board, maybe just talk about how you think about managing capital in the environment given the changes that are coming.
Yes. Listen, the one hallmark of our business is the ability to generate a lot of capital each year when you think of the earnings power of this business. So I think we've been able to manage through the CECL transition, which we're halfway through and return capital to shareholders. I think we generate significant capital to grow the business where it's in long-term targets are slightly higher than that. And then as you think about impending rules, we think they're very manageable. There are offsets that we can do in order to manage what is the operational risk piece or RWA inflation that you may see coming from Basel III. Again, we think there's enough discontent that, that the rules will change. But again, for us, it's manageable, and I think we look at that and we'll work through that transition when the rule comes out. But again, we feel good about it. But really go back to -- we generate a lot of capital each year, Ryan, that we can employ either into inorganic things or return money through share repurchases.
I mean I think organic growth, dividend, buybacks, I think we've retired more than half of the shares of the company since we've gone public. So we are very focused on capital return and capital allocation.
Brian, maybe quickly in the last 20 seconds here. I think I asked you the same question. And last year, stock still trades at a pretty low multiple. Last year was the macro uncertainty on credit. What do you think is misunderstood at this point? And what are you doing to fix it?
Well, I think there are some negative headwinds obviously priced into the stock right now. I think you still have the macro and the uncertainty maybe around credit and what's happening broadly across the industry. And then you've got the regulatory piece. And I think those are unknowns. I think we are prepared for both. I talked about how we're preparing and how we're prepared for late fees when we get the final rule. We're certainly prepared for any macro scenario that we see in 2024 and '25. I mean this is a very resilient business model. We've demonstrated that through cycles in the past. And so those 2 things we just kind of have to work through to abate those headwinds.
Great. Well, we're out of time. Please join me in thanking Synchrony.
Thanks.
Thanks for having us.
