All right, everybody. Before we get started, I'm going to read some quick disclosures. For important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. The taking of photographs and use of recording devices is not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. Today I'm delighted to have with us Synchrony's Chief Financial Officer, Brian Wenzel. Brian, welcome.
Good morning, Jeff. Thanks for the invitation to be here.
Yep, and it looks like you brought some good news with you today. Maybe before we get into that, let's talk about the positioning of the business. Lots has happened over the last few years from the regulatory side with the CFPB late fee rule. You've had rising consumer delinquencies across the industry, but it looks like we're finally moving past some of these issues. Given this backdrop, can you just talk a bit about how you see the Synchrony story evolving over the next few years? What are your top priorities as you manage the business?
Yeah, so thanks for that question, Jeff. You know, I'd like to start off with the fact that, you know, you talk about this environment. You know, we've come through a pandemic, a very unique, you know, credit environment, with really a lot of extension of credit to individuals. You look at the regulatory environment and how that shifted and the execution by the entire Synchrony team, we're incredibly proud of. As we move through this period, that execution really is the foundation as we move forward. I think as you think about the stories that play out, number one, we've invested heavily in our capabilities over the last large number of years.
When you look at our digital capabilities, our abilities to embed our products with our partners, you know, the way to meet the customer where they want it to be. If you look, number two, at our multi-product strategy and the ability to have multi-products so we can meet customer needs, we can meet our partners' needs, things like that. You look at the continual advancements that we have made in our advanced underwriting platform, that is all positioning us. We are going to continue to invest in those areas. We have, you know, I like to say some productive paranoia about competition. We always want to stay ahead. I think those are things we are going to continue to invest, that have both, you know, not only short-term benefits but really for the long term.
The way that manifests itself into the company is, number one, we hope, and really believe that the partnerships that we have, that we'll be in a good position to extend those partnerships. We have a large number of our top 25 that are beyond 2027 expiration date. We want to continue to have a good track record on renewing those ones and showing our desire. I think number two, when you look at new relationships in the market, we're going to win our fair share of those. I mean, we're always going to maintain pricing discipline. That's one of our hallmarks. We think with our capabilities, we may not be the lowest priced provider, but we're going to win our fair share of that.
I think we're going to continue to build on what is enviable among a lot of people, this incredible amount of scale. When you have 70 million unique customers, that is scale that most people find attractive, particularly to our partners who are looking for not only to increase sales but to bring them new customers.
Speaking of winning your fair share, the other day you just announced your new Walmart OnePay partnership. What brought you back to the Walmart relationship? How is this going to differ from the prior offering? Maybe any lessons learned in the prior offering? Can you speak to how that relationship on the corporate side is maybe different this time around? You know, maybe dive into any of the preliminary details around economics, value propositions, goals, where do you see the size of that program going over time? Maybe you can give us all of that info.
Yeah, I only have 31 minutes left, but we'll try to unpack that question a little bit. You know, let's start at the beginning. You know, Walmart is an iconic retailer. It has tremendous scale, breadth, delivers value to millions of Americans. We are proud to partner with them. We are excited to partner with them. They have a unique ability to win in this retail environment. We are going to build on our two-decade-long experiences with them to continue to partner and drive that forward. It is a testament for us with regard to our capabilities. They obviously left in 2019, went to another issuer. I think they had choices to make this time around.
and they came back to us, which really goes back to, again, our digital capabilities, our advanced underwriting, and our ability really to execute in the retail environment. So, again, you know, for our team, it really is, you know, a confirmation of the things that we're doing right and investing in the business. We're also excited to work with OnePay. I mean, they have created an app and a customer experience, that we think when we're putting our product in there with that, it's really going to drive engagement with consumers. and then you look at, you know, the way in which, you know, given their ownership structure, the way in which they've secured placement inside of Walmart that our product's going to be offered to really drive value and drive incremental sales.
You know, as you take a step back and, you know, one of the questions you asked about, how is this going to be different than last time? You know, number one, this is a de novo book, right? So the past book's not coming. So we're starting from scratch. We're going to build from scratch. The value proposition's going to look different. The way in which it's going to be presented to the consumer, whether it's, you know, through the OnePay app or through other channels, will be different. You know, and really that placement inside of Walmart is going to be one of the keys. As you step back from that and say, "Okay, great, we're excited about the relationship," what does that really mean to Synchrony, as we move forward?
Number one, because it is a de novo book, you're going to look at something that has a different loss profile, different loss content than existed prior. Number one. I think number two, the value proposition is going to be richer than it had been before. And we're going to drive engagement, whether it's through the dual card in the world or back through Walmart's channels and properties. What that allows us to do is it allows us to drive greater engagement, allows us to drive incremental sales for Walmart. Then what it allows us to do is actually charge, you know, and have a pricing structure that is equivalent to higher value proposition. When you look at the risk-adjusted return, Jeff, we should see a higher risk-adjusted return than we had in the past, the past relationship.
The way that culminates, you know, in a de novo program, you know, as you would expect, you know, there's a lot of technology costs this year, launch costs, you know, this year that we're going to incur. The first couple of years, you know, we're going to have significant reserve postings for the asset as it kind of comes on. When you get through the reserve postings, right, for these couple of early years in the deal, you then look at the return that our business case is built upon. That return profile is accretive to our long-term financial targets of two and a half. You know, we look through it and say, you know, we're willing to invest here for growth. We're excited about that.
At the end of the day, the profile of it's going to look different than it did back in 2019 when, you know, when we exited the relationship. We're excited about it. Again, it's a testament to our capabilities. We're looking forward to working with OnePay and really excited to deliver value for the Walmart consumer.
Okay, great. Maybe, you know, a little bit of a J curve there as you build it out, but, you know, bigger focus on the underwriting de novo program. Any sort of thoughts on the timeline to maybe getting to full speed there or where that portfolio can go over time? Is that something that could become a top 10 for you?
Yeah, you know, listen, when we started 20 years ago, you know, it was a de novo program, right? And we built that program up to close to $10 billion in receivables. You know, clearly Walmart has a scale that if we execute correctly, you know, the three of us, there's, you know, there it does have the opportunity to really be a top five program or a top 10 program. That's not necessarily something we focus on. We focus on trying to sit back and say, how do we deliver value to Walmart? How do we deliver value to the Walmart consumer? It has the potential just given the size. We're excited about the product that we're going to put out, because we think it will resonate with those consumers.
Okay, great. Maybe switching gears a bit, let's focus on the consumer, and the health of the consumer. You've previously talked about moderating consumer spend, but the absence of lower payment rates at the same time is kind of a positive indicator for consumers managing through. Are you continuing to see that? Has any of the softer, the weaker soft data you've seen in confidence and some of these tariff-related concerns that have flared up, has any of that shown up in your data yet?
Yeah, you know, a lot of times in our business, when you think about the discretionary aspects of our business, so thinking to inside of the home side of, of our home and auto business or some of the things in lifestyle, we tend to see things, you know, sometimes before they resonate in consumer confidence. I think the pullback we saw on discretionary spending, which really started the latter part of June last year through the back half of the year, that preceded the consumer confidence. If you go back to January, Jeff, one of the things we did show, which was weekly sales, because everyone said the consumer is pulling back and, you know, you heard certain issuers talking about changes in their book.
What you saw with us was relative consistency, and then you saw some of the seasonal changes that manifested itself in March. If you kind of roll that forward, we have not seen any significant changes from that pattern as we've kind of moved forward. We're not seeing the consumer from a spending perspective really change behavior. To go a step deeper into that, Jeff, what I'd say is when we look at ATF and ATV for a second, what we're seeing is some interesting—some of the clients we've seen in average transaction value has slowed. It's actually improving, is probably another way to look at it, is improving as we move through the second quarter. That's positive.
We're seeing stabilization and we are seeing some green shoots in some areas of discretionary, mainly around soft goods, not necessarily around hard goods. You know, we're seeing some signs. I think as we move towards the back half of the year, the comps do get a little bit easier. You know, we came off a first quarter, which was a record first quarter for our company. Again, you're going to start lapping some of the softness that we see. I think to pull it up to 10,000 ft, I think as you look at our business, what you're going to see is greater pressure in home and auto and lifestyle.
What you're going to see is, you know, flat to maybe some positivity, you know, really, you know, driven by health and wellness, digital and diversified in value.
Okay, great. So it sounds like there's some green shoots in discretionary spend. You haven't seen a pull forward either from tariffs, like you said last quarter, or maybe anything else you could sort of talk through quarter to date on spending trends?
Yeah, you know, the consumer, you know, the consumer's concerned about tariffs, but it really has not impacted prices significantly other than some things in the grocery store. I don't know if people went out and tried to buy a guacamole, but they're fairly expensive now. So puts a different meaning on Taco Tuesdays. But really the consumer has not altered behavioral patterns as it relates to tariffs yet. Clearly, we think if tariffs go in, there will be an inflationary aspect to it. But I think in our conversation with our merchants and retailers, they're working hard to try to figure out how to minimize the effect of tariffs.
Most certainly, the larger partners have greater flexibility as it relates to adjusting their supply chains or not taking on that cost where I think some of the mid-size and smaller-sized merchants will have a tougher time, if tariffs come into play. To date, we have not seen anything that's discernible relative to tariffs.
Hopefully you haven't given up your guacamole yet. But unlike, you know, not unlike the rest of the industry on credit, Synchrony has seen higher delinquencies and credit losses in recent years, but you've arguably performed better than peers. Your outlook now calls for losses to fall back in the long-term guidance range or the long-term framework of 5.5%-6%. How have you been able to achieve this? What's different about the Synchrony approach? And then maybe you could also layer in the main numbers you just put out this morning. Looked pretty solid. I think we saw a nice number, I believe, of, I think it was for the losses for the quarter, I mean, for the month of May, 5.2% versus the guide of, you know, 5.8%-6%. So maybe square those.
Yeah. Let's just start at the baseline, Jeff. You know, one of the things we've invested heavily in, in the last eight years has been our advanced underwriting. One of the keys for us is the use of data in decision-making process. We're real-time and we're taking that data into real-time decisions. That differentiates itself. We're not on a lag score or a trended score. Yes, we use scores, but we use other forms of data to make informed decisions. A lot of that data comes from our partners in order to assess their capability. That baseline is key number one. I think number two, you know, we have a discipline relative to credit, where we have a line strategy that is generally lower than our peers.
What that means is when you have the probability of default, you have those defaults, the loss at default is generally lower. We're able to control loss. Our volatility relative to others will always be less. We've shown that chart where it's in our investor relations day a couple of years ago. Many times during earnings, we've shown it back to the great financial crisis. Our volatility is generally lower than peers. That's number two. I think number three, you know, our focus is around risk-adjusted margins. When we saw losses getting outside of that and really having a lower risk-adjusted margin, it wasn't very efficient for us from a capital standpoint. We said, "Listen, we'd rather sacrifice growth.
We'd rather make sure that we're efficiently growing here. We've taken, you know, broader credit actions both in 2023 and 2024 in order to curtail what we thought were riskier populations, whether that was through square migration, people who had student loans that potentially had an ability to pay issue, whether that were people who were taking out that consolidation loans. We were tighter around credit. We thought that's prudent. Others may not have done that, but we were willing to sacrifice growth in order to accomplish that. That's manifested itself of, you know, we've exceeded our loss target, you know, last year. You know, we're going to be back inside that target, we hope, you know, for 2025.
Most certainly the performance through May gives us, you know, an indication that that has a higher likelihood of happening. I think when you look at May, we're pleased with the performance, right? Our delinquency is 4.2% on a dollar basis. It's one of the lower ones we've had. That sets us up nicely for the back half of the year. I think when you look at the loss, you know, charge-off rate of 5.2% for the month of May, I caution people that is on a 25-day cycle, right? When you look at it on a cycle-adjusted basis, it is performing better quarter, month on month and better in seasonality. The loss content itself, you know, is better.
I think when you look at delinquency and the way delinquency is developing, it's developing in line to better than seasonality. When we take a step back, we're pleased with that performance, and really what the credit actions we've done in order to kind of get back to that appropriate risk-adjusted margin have really worked, the way we hopefully designed.
You just mentioned some of this on student, but that's been a hot topic of late for investors. I know you were taking some action there over the past few years. Can you just remind us of your exposure to students and maybe how those borrowers are performing versus some of the more draconian stats we see out there in the federal lending program, which may have some issues unrelated to you, but just maybe comment on that and, you know, are you noticing any impact from things like lower credit scores for those consumers that forgot to pay?
Yeah, so we did quite a bit of work, when there was forbearance programs in place. And while there wasn't reporting on delinquency, we worked with the credit bureaus in order to understand, you know, attributes of who had student loans, number one. Number two, we had the ability to understand whether or not the balance was changing. So we didn't need necessarily delinquency flag. We said, "Okay, if your balance was, for example, $100 and next month it's $100, we can arguably say you're not paying your student loan." So we had unique data in there, to look at. When you look at the bifurcation of student loans, for the portion that's in our portfolio, the majority of those people are actually making payments, which is good. There is a portion that is not making payments.
Overall, when we look at the student loan population, what you try to do is pull it apart and we create it against or look at it against similar credit cohorts. When I look at it against similar credit cohorts, by that credit grade, what we see in behavioral patterns is that the student loan, you know, people who have student loans are performing at or slightly better than, you know, credit cohorts that did not have student loans. We do not necessarily see a negative impact with regard to student loans. What I would also say, Jeff, is the noise around student loans, first of all, there's a lot of confusion with people who aren't paying and saying, "Listen, my servicer changed three times.
I don't even know who my servicer is. I think the long period of time and the way servicers have shifted, between prior to the pandemic, through the pandemic, and now has created confusion in the market. Not everyone is actually reporting accurate information to the bureaus or reporting to the bureaus. I think people just need to take some pause. What I'd sit back and say in our portfolio, most certainly it's on par with to maybe slightly better from a performance perspective.
Okay, great. It sounds like credit trends are going pretty good so far this year. You know, given everything we just discussed, how should we be thinking about your reserve ratio from here? You don't really guide on that, obviously, but you talked about the 5.3%+ triangulated unemployment rate last quarter. I think, you know, we've seen some Moody forecasts or industry forecasts out there go a little bit higher on that front. How should we be thinking about that over the rest of the year? What would take it higher or lower?
Yeah, you know, let's just kind of put a bow on credit. I think we're pleased with the performance rates. Whether you're thinking about reserving miles, it's what's your performance. Again, for us, I'll just highlight again, entry rate's better than pre-pandemic. We are seeing improvement in delinquency stages. There had been some, you know, we always get the question of, you know, you're credit restrictive today. Are you going to be, you know, when are you going to start being less credit restrictive? Again, we continue to evaluate that, Jeff, and we focus on it. We will take some actions into this quarter, into probably the back half of the year to be, you know, in certain small pockets to maybe be slightly less restrictive.
What that does is, okay, as we look forward, as I think about the quantitative portion of the model, that should be getting better as your loss forecasts get better and you're back inside your long-term underwriting targets, which is a downward bias onto the reserve rate, number one. Number two, I think when we stepped at the end of the quarter, in March, you know, I think this was right before Liberation Day, right before some of the questions with regard to the economy. Given some of the uncertainty, you know, we posted a $200 million macroeconomic reserve in the first quarter, really based upon a deteriorated macro that was worse at that point.
Go back to the, you know, that February baseline, which informs the reserve, worse than a Moody's S5, which is a fairly severe, you know, recessionary environment. As we step through, you know, obviously the baseline's out for May. That baseline's slightly worse than the February baseline. In theory, there could be a minor impact to the quantitative reserve, but most certainly I think the macro kind of covers it. As you look forward, I think a framework to think about it, Jeff, is if you continue to perform well on the performance of delinquency and the charge-off profile, number one. I think we get some clarity with regard to tariffs and the impact on the economy.
What you'd see is if I have greater certainty, the macroeconomic kind of comes down, the quantitative comes down, and you begin to get back to what would be a day one CSL of 9.7%. You know, the bias, you know, in theory, if the macroeconomic environment clears, is to begin that trend. We would expect it to move down. Obviously, if the macroeconomic environment deteriorates, then, you know, you may be in a situation where you have a higher rate for a little bit longer period of time. It's also important to know, you know, as we've said before, our reserve model, if unemployment's under 4.5%, if it moves around a little bit under 4.5%, it doesn't really have an impact, you know, significantly on our model.
You know, it's almost like a neutral rate of unemployment inside our reserving methodology is at that 4.5%.
As you think about the growth outlook for the back half of the year, you mentioned the easier comps in the back half of the year. You have also talked about how, you know, you would consider maybe changing your profile on the underwriting a little bit if the credit continues to perform. Have delinquency trends improved enough at this point for that to happen to maybe have you start letting off the brakes a little bit, or what else needs to happen there? You know, maybe just broadening that out longer term, what gets you back towards your 7-10% long-term growth target?
Yeah, you know, it's important to understand it. I want to, I'll start where you really ended, which is where are we today and then where we're heading, right? Let's just be clear. The impact today is twofold. Number one, the restrictive credit actions is a significant portion, the majority portion of the decline in purchase volume that's impacted receivables. The second is this discerning customer who has pulled back on certain discretionary purchases, whether that's in the furniture space. We see it in health and wellness. When you think about Lasik or cosmetic and things like that, you see it in lifestyle, which are some of the platforms I indicated earlier that have some pressure. That's a short term.
I think, you know, I talked about we're going to make some, you know, minor adjustments to the credit profile in the back half of the year. That wasn't really factored into the guides. I don't think really has a material impact, but most certainly we're beginning that. That's going to be a journey. We've always talked about we're not going to flip a switch and just go back to, you know, the standards from 2022. It's also important to say we never really justify, we don't accordion the credit box. I think that, you know, in the short term, you're going to see, you know, some of the credit restrictions lift over the course of, you know, 18 months or so. That helps.
I think the important part is the consumer hopefully becomes more confident, being willing to make those larger ticket discretionary purchases. That combined with, you know, I'd say lower comps in the back half of the year, again, you know, driven by those two factors, we should begin to see the ramp up. You know, when we look at our partner mix, when we look at our penetration, we look at the opportunities that we have with our partners, you know, we feel good about the ability to get back to our long-term average and our long-term targets of being high single digits, you know, relative to growth.
Just to sort of put a pin on that, lifting of the credit actions not factored into the full year guide, but you're going to look to do that maybe over the next 18 months. Is that?
Yeah, I mean, that, that's always arising. The question becomes, when do you have the certainty? You know, we like to, we like to have certainty. I'm sure a lot of other people like to have certainty around tariffs and the impact on the economy. Tariffs clearly are inflationary. It's unclear exactly where the tariff burden will fall, inside the economic chain. It, it's too early to say that, but that's something that we watch. Once that clears and we continue to see the performance we're seeing today, that would give us indications that we, again, we should consider lifting those restrictions. It's going to come over time. You know, we're doing things, you know, our plan this year that was including the guidance is we're doing more upgrades than we did last year from private label to dual card.
That's one of the benefits of having a multi-product portfolio is we can migrate customers who really want a different product and are eligible for a different product. Those are things that we can do. Again, it is not materially driving the estimate, but those are things that we'll begin to do more in earnest as we get comfortable with the macro.
And maybe we could also talk about the PPPCs, the pricing changes you put through in advance of the late fee rule, which obviously did not go through. How are you and your partners thinking about using these gains you have seen so far? Are most of the conversations you are having centered around maybe reinvesting that into value enhancements? Could those reinvestments maybe provide an uplift to loan growth over the next few years? Are you finding that those pricing changes you took a little bit more proactively, are they giving you a bit of a competitive edge in your conversations when it comes to renewals or new deals?
Yeah, so I think Brian did a very good job of articulating our strategy in April. You know, we had the, you know, I hate to say this, the benefit of all of our CATs had test versus control. So we can go to our partners and we're going to our partners with a couple of things. One, here's the landscape that has changed over the last two years relative to pricing and cards. Two, here is the impact on test versus control for accounts that received the change in terms and what that means. Three, we sit back and say, based upon performance, here is the financial contribution or attributes that you have relative to the program. You know, the discussions we're going to engage in is, is how do you think about those?
You know, there are situations where they'll just stay as they are. There are situations where we may say, listen, we may take, because we have extra, you know, or more revenue, will we take on a different credit profile to get back to a slightly higher, but acceptable risk-adjusted return? Would we put more into the value prop, right? If you have a higher price, we can afford to make greater, greater value, which would hopefully drive, you know, increased sales? Or do we just adjust, you know, price, which most likely does not necessarily lead to volume? We are starting to have those conversations. It is not something that, you know, we have spread. We are having those conversations with partners today.
I think the thing where we've had probably more focus has been around, you know, our promotional financing business, some of the promo fees that we charge that are in the market, but we put in place. Those are ones that probably first will get some adjustment, you know, to really conform to market, number one, and two, really help to, you know, try to stimulate discretionary purchases. It's important to know on those promotional financing fees because what you record, when you make the sale, gets amortized in over the life of the promo, it really didn't have any financial, you know, material financial impact, you know, our results to date. If we adjust that going forward, that is going to be something that's more of a lost opportunity.
The conversations around the promotional financing fees going to our partners about mix of promos, between different types of promos, and, and really when you think about, you know, whether we're in exclusive relationships or not, you know, how is our product positioned relative to others? Those are ongoing discussions with partners, but that's probably the first thing. Again, we're taking a fairly methodical approach with our partners to engage them the same way we did when we put the actions in place. With regard to competitive advantage, you know, we obviously believe that the value that we provide on the cards and the prices is fair to the consumers. You know, we look at an entire package of what we deliver for them, not only the product, but the experiences in order to deliver that.
We'll continue to work with our partners. We're engaged in those conversations now. Again, we'll get it done fairly expeditiously with what we want to do going forward.
As you're having those conversations, could you also maybe just touch on broader competitive intensity out there? Have you noticed any shifts there around renewals or RFPs? Are other banks entering the fray? What are the most topical things that are coming up in those or the pain points that are coming up in those conversations?
Yeah, you know, competition has been, it's interesting. I think it's been fairly consistent the last couple of years. We see certain competitors in certain places, but we don't necessarily see people all the time in exact same places. Larger relationships, you may see one or two competitors who are consistent in mid-sized relationships. So that $500 million to $1 billion, you may see different competitors there. Again, you know, it'll be interesting to see, you know, there's been some shifting in some of the competitive set. You know, TD has exited in the promotional financing business. We'll see how that changes the landscape. You know, there's been some consolidation, so we'll see how that changes. I think it's evolving. I do think what we do see is, again, some smaller fintech-type lenders.
Particularly in health and wellness, you see it in the home improvement space, etc., who are kind of coming in in different verticals in order to do it. They do not have the same scale as us either in that vertical or as a broader-based company. Again, you are seeing them a little bit more. I think you are seeing companies that have singular products, understand singular products probably are not a way forward. So they are trying to get to more of a multi-product offering, similar to us, but they again do not have the same scale as us. Then you are seeing some evolution really at the point of sale, whether it is technology and some of the waterfall capabilities, number one or two. You are seeing more integration with software vendors and providers. The landscape is shifting.
It's moved faster the last five years. Again, we have productive paranoia and we take everything incredibly seriously, whether it's a renewal or a new opportunity. Again, it's evolving, but it's fairly, it's not necessarily an aggressive marketplace. I'd say it's very balanced.
Okay, great. Maybe last one for me, just on capital return. You recently increased the dividend by 20%. You announced a new buyback authorization of about $2.5 billion. You're still operating with pretty robust levels of capital here, but the CET went up 13.2%. What's your thought process on redeploying some of this excess capital from here? Is this the time to maybe take some swings on larger portfolios out there or, you know, maybe talk us through your thought process?
Yeah, so we're, you know, obviously pleased with the capital plan we put out. Again, you referenced a 20% increase in the dividend, to $0.30 per share each quarter. That most certainly is something we want to maintain as part of our capital allocation strategy, number one. I think when you look at the share repurchase, we're double what we did last year at $2.5 billion. This year is $1.2 billion last year. When you look at that, you sit back and say, listen, we understand we're in a real position of strength when it comes to capital and how we return it back to shareholders and how we invest in the business. Our priorities, Jeff, have not shifted. Number one, inner, you know, organic growth is number one.
Organic RWA, we just have tremendous opportunities with our partners that we got to continue to capitalize to drive share, inside their franchises. One, two, it's the dividend and maintaining that dividend for shareholders. And then three comes down to share repurchases or inorganic. It gives us the opportunity to look at procs or capabilities, to be honest with you, that we constantly look at and say, can this accelerate our development of something or are we better to build it? Or we can look at other relationships. Again, we will maintain discipline when it comes to pricing. We do not need to do it. If we do not have those opportunities, we will most certainly be aggressive but prudent with our return to capital to shareholders via share repurchases.
You know, we feel good about our ability to execute that. We demonstrated by retiring over half the shares since we went public. I think that's our commitment to get that capital down. The final piece I'd say, Jeff, you know, we made our final deposit on CSL and the transition. That's behind us, but that was $600 million a year of capital. That gives us even more capital as we move forward, besides the business that generates a ton of capital to give us really flexibility and be a competitive advantage as we move forward.
All right, great. I think we're out of time. Brian, it's been a pleasure as always. Thank you.
Jeff, thank you. Thank you for your time today.