All right. I just want to thank everybody for coming. Kicking off the conference for the fourth straight year, we're excited to once again have Synchrony Financial joining us. So, Synchrony had another strong year, winning back a major partner, managed credit better than most, and has bought back a ton of stock to help drive earnings growth. Here to share their insights on how the momentum is going to continue into 2026. CEO Brian Doubles and CFO Brian Wenzel. Today's presentation is gonna be a fireside chat. So, Brian, let's kick it off. Despite a lot of noise in the macro, it's been another successful year for the company. You renewed over 40 partners, including bringing back Walmart. Credit continues to be strong, returned a lot of capital.
So, given that backdrop, maybe just talk about how you think the position is positioned into 2026, and really what are the key things that you're focused on?
Yeah, Ryan, first, thanks for having us. Excited to be here. I think, I'm really proud of how the team executed in 2025. I think we're set up well as we head into 2026. You mentioned a lot of the things that we executed. I feel really good about credit. I feel really good about the return to growth. We launched, you know, Walmart OnePay, Amazon Pay Later, physical card with PayPal. So there's a lot to be excited about, and most of those are, you know, very early days as we sit here in 2025, but we'll pay some big dividends, I think, as we get into 2026 and beyond. You know, if you look at the platforms, I feel really good about Health and Wellness and the investments that we're making there.
Those are certainly paying off, and we're trying to deepen the moat that we have around that business. Digital performing well, you know, just given the partner mix there, you know, we should continue to see probably outsized growth there as you get into 2026. D&V will be bolstered by, obviously, Walmart OnePay. We're thrilled with the early results there. It is still very early, but, you know, fastest growing program in our history. And, and we feel great about how that's positioned. And so everywhere you look inside the business, you know, I, I feel, I feel really good heading into 2026. And then the other thing that, you know, we talked about, when we did third quarter earnings was we still have the ability to open up a little bit more on credit.
Mm-hmm.
So, very proud of how the team performed and how they were able to dial in credit in 2025 and get it back, you know, at or a little bit below our target range. That gives us some opportunity to open up a little bit. You know, assuming the consumer continues to be as resilient as they've been, that'll provide another little tailwind as we get into 2026.
So speaking of the consumer, let's spend a minute or two talking about the health of consumer. You know, you talked about, you know, loan growth has been slow, but it sounds like, you know, there's signs that it could improve. Spend volume turned positive in 3Q due to both average transaction volume and frequency. Both have been improving. Maybe just talk about what you're seeing from the consumer, and maybe just talk a little bit about difference between the prime and subprime cohorts.
Yeah, sure. So, you know, look, third quarter +2% on purchase volume. It was nice to see that inflection point. I think that bodes well as we get into the fourth quarter and into 2026. You mentioned ATV and ATF, both improving, and they're improving across all credit segments. We're seeing a little bit more improvement in the non-prime segment just given, you know, we're lapping some of the credit actions that we took, remixed that segment a little bit. Prime's performing pretty well, and then we're seeing outsized growth as I think everybody is in the super prime.
Mm-hmm.
Segment. I mean, they're being, you know, that segment in particular, they're being bolstered by the stock market gains, better consumer confidence at that level. And so I think that'll continue into 2026 as well.
Maybe just to, you know, narrow in on the near term, maybe as a follow-up, maybe talk about what you're seeing in terms of spend in Q4, any noticeable trends that are noticing in terms of spend patterns around the holidays?
Yeah, look, I think fourth quarter, so I would say a couple of things. First, you know, the momentum that we saw in the third quarter has continued as we get into October, November. So November was a little bit better than October. I think that gives us some confidence. I think BW can talk a little bit about specifically holiday and what we're seeing there, but the trends that we highlight in the third quarter seem to be continuing as, as we get into the fourth. And I think that provides a pretty good, a pretty good setup as we get into, to 2026. I don't know if there's anything you want to touch on on holiday.
Yeah. First of all, Ryan, thank you for being here. Thanks for inviting us, but when you think about holiday, I want to first kind of define holiday, right? Because I think you're going to hear this term a lot today and tomorrow. You know, holiday for us, we define it as really November 1st through, call it the Christmas timeframe, number one. Number two, we look at holiday for retailers that are really impacted by holiday. So it's about two-thirds of our sales, about a third of it is non-holiday related. So when we look at that, you know, with that definition for a second, we look at holiday, I'd say November 1st through the, you know, call it the Black Friday or Thanksgiving week, was actually very strong. So there was a pull forward of sales.
You know, there was some promotional activity that drove that. So we saw really, you know, good growth. That moderated a bit really during the Thanksgiving week and the week after. But then again, you look at this weekend; this weekend was again really strong. So, you know, kind of windows that are really being driven by, you know, I, I'd say some promotional activity. If I go down deeper and I look at that holiday mix by platform, that curve that I just talked about is consistent across all the platforms. So it's not idiosyncratic. It's not any outside influences. It is consistent across that. So that is what we see.
I think when we look at external data, you know, relative to that period, I think we, you know, generally were positive to that or consistent with that at worst, so I think we're in a good place. Listen, a lot of, you know, anecdotally, a lot of our partners, we actually gained penetration, you know, so far during this period. You know, we feel good about holiday. Brian talked about the trajectory of sales being, you know, improving throughout the year, which is a really good exit point for us as we close out 2025.
Maybe while we're talking about near-term dynamics, you released your 8-K this morning, which I was in the office for, and, you know, showed credit trends continuing to outperform seasonality. I think on a positive note, loan growth is showing signs of improving, which I think was very encouraging. Maybe just talk a little bit about what you released this morning, maybe any other pieces of 4Q guidance that you wanted to comment on as we sit here today.
Yeah, you know, first of all, we, you know, Ryan, you know this, we don't actually do inter-quarter guidance changes really. But you know, we were really pleased. Brian talked about it. We're really pleased with credit. You know, you think about delinquencies being at 4.5%, you know, both 30+ and really 90+ . We don't disclose that better than seasonality. So you know, the credit actions that we deployed for a very purposeful reason have performed. And so I look at that, which is a great setup for 2026. You know, you look at charge-off rates consistent with what we've seen. So when you look at it, it's better than seasonality. Loan growth is, as you said, down 1% versus down 2%. Again, payment rates higher than, you know, than we normally have.
But that's really a result of taking out some of the non-prime and a little bit more super prime and a little bit of mix into the portfolio of core versus promotional. So it's as intended. And so I think as we go out, credit really, you know, is demonstrated here. I think performed well. The growth performed, you know, well versus our expectations. So, you know, we feel good about the exit point of 2025 into 2026.
Maybe to shift gears a little bit, talk a little bit about, you know, the platforms and loan growth. Brian, you touched upon these, in your, in your opening remarks. Maybe just spend a little time digging a little deeper in terms of where you're seeing strength. You talked about Digital, Health, and Wellness. You know, what type of transactions are still underperforming? And how, how do you think this positions the business into next year?
Yeah. So I would probably start with the two that I would expect to have continued outsized growth relative to the others are Digital and H ealth and Wellness, and with diversified value being a close third. And you know, starting with digital, I think just given the partner mix, you know, what we've launched with Amazon Pay Later, physical card at PayPal, I think we're feeling really good momentum there as we head into 2026. It's a massive user base that we can tap into, huge markets that those partners serve. And just gaining a tiny bit of penetration and getting a little bit of scale is worth a lot at the top of the house. So I feel really good about Digital.
Health and Wellness, as you know, that's a business that we've been investing heavily in for the last five years. We're the industry leader there. We continue to try and build out that moat. We're integrated into 40 different ISVs across dental and veterinary. And, you know, that gives us some confidence that we're every day just trying to make it easier to finance elective healthcare procedures because it's, we all know insurance is covering less and less.
Mm-hmm.
We've got a market-leading position in an enormous market, where financing, frankly, is really underpenetrated. You know, if you look at the amount of those elective procedures that get, that get financed, it's still very small. Most of it actually gets done by the provider themselves. And so that's a huge opportunity. And again, competitively, we're really well positioned there.
Then stepping into diversified value, you know, this is where I think you're going to see that platform do very well in the coming years on the back largely of, of Walmart OnePay. You know, we've been thrilled with the early results. It's a great program. Obviously, we're tapping into a massive, sales opportunity when you look at the size and scale of Walmart. Great program, technologically very advanced. We're very excited about the early returns.
I mentioned it's the fastest growing program that we've ever launched, that I've ever been around, and I've been in the business for 20 years. So a lot to be excited there. And I think that'll buoy the D&V platform. Lifestyle has come back a little bit. You know, Lifestyle and Home and Auto, I'd say, because they're bigger ticket and largely elective, you know, those are businesses that will continue to improve, but probably just not at the same pace as the other three. Lifestyle has come back and improved sequentially. So has Home and Auto. You know, if you think about Home and Auto, you know, there was a massive pull forward coming out of the pandemic. Everybody remodeled their houses. They bought all the furniture and redid home offices and did all that stuff.
So I think that business has been lagging a little bit the other four platforms. I do think that will come back as consumer confidence comes back. I think the consumer right now, bigger ticket purchases, they're being, they're being more thoughtful. And I think that's actually, that's a great thing from a credit perspective, by the way. You know, we don't want our consumers to be, to overextend and, and buy things that they don't necessarily need right now. But I think as we get into 2026, I would expect those platforms to continue to improve as well.
So you brought up Walmart a couple of times. I guess in second quarter, you announced that you'd agreed to bring them back as a partner. Maybe just talk about why, why this made sense for you, what you're doing differently, and what, what is the path to this becoming a top five to top ten partner that you've talked about?
Yeah. Well, I have to remind everybody we always had Sam's Club. So we still had a big presence in Bentonville, and Sam's Club is a fantastic program for us. And I think we continued to execute that very well during the time that we didn't have Walmart, which helped us obviously win the Walmart program back. It will be a different program. It is a different program for a number of reasons. First, it's very technologically advanced, so very tech forward. It kind of mirrors what we do with PayPal and Venmo in the sense that it's completely integrated in the OnePay app. That's a fantastic app, by the way, for those that haven't seen it. Seamless customer experience. You apply for the card all the way through to servicing. You can do inside of the app.
So I think that, that's going to be really attractive, and it, it helps us drive those new accounts. Like we want to, we want to keep everybody in that app experience. And so that's one thing I would highlight. The placement that we're getting across Walmart is fantastic. It's fantastic. And I think that's, that's a differentiator. So whether you're on Walmart.com, whether you're in the store, in the checkout, QR codes, you just see it very prominently. And we know, you know, we've been in this business forever. We know that that, that is one of, if not the most important things to drive new accounts. And I think that's a big part of how, you know, we're driving best ever new account growth in a de novo program, the last thing I just highlight is the, the ValProps is, is really terrific, right?
So for Walmart+ customers, and we are getting, we're over-indexing in Walmart+ customers applying for the card, which is what we want.
Mm-hmm.
So they say 5% unlimited cash back. If you're just, if you're not a Walmart+, you get 3% cash back. So a really attractive ValProp, which, you know, I think for, you know, in this kind of environment in particular, people are looking for a deal and they're looking to, you know, maximize those dollars and how far they go.
Maybe just one quick follow-up. You, I think you noted several times that this is the strongest launch ever. You know, what should we be watching to assure that things are on track with this partner?
If we're going to talk about it every quarter, anecdotally, we're never going to give you program-specific details. You know that. I would continue to watch the D&V performance, and then we're going to give you some insight every quarter as we go out. If you're a Walmart shopper, you'll see it hopefully very prominently across their properties in store and digital.
Gotcha. I'm a Walmart+.
Good. So am I. So am I.
So, you talked a little bit before about the, you know, the credit actions that had been taken. I believe recently you talked about unwinding some, I think about 30%, for the focus on health and wellness and digital. Talk a little bit about the changes you've made. And then second, I think you talked about unwinding in three phases over the next period of time, around two years. What would be the next, what would be the next two phases entail, and what are you watching to determine whether or not you could actually move those up?
Yeah. So, the credit action on, you know, after changes we made really in the fourth quarter of this year were stemmed around a couple of different areas. They were really centered around people that we knew, right? So, during this period of time, we actually restricted credit line increases. We weren't doing proactive ones. We were doing reactive ones. So if you called in and asked for it, now we're actually doing proactive ones. The customers that we knew, that had good behavior with us, you know, we're increasing that. And those are great growth programs. We know the customers. We have the account already. So it drives, you know, faster growth. But that's not the reason why we did it, just because it was a safer way to step out, number one.
Number two, you know, being the fact that we have a Private Label on the Dual Card, we down, you know, downsold a little bit more into Private Label. So some of the upsell into Dual Card. So we're doing more upgrades from the Private Label program into Dual Card, and we're originating more back into Dual Cards, you know, a little bit more origination oriented there. That will give us a good boost around people that we know. There's some account management things where we're doing credit line decreases. We're doing the decreases, but we're not ratcheting as hard down.
Mm-hmm.
So, I think there's safe ways for us to step out here so that, you know, yes, we're going to be inside our long-term framework this year. We want to be inside our long-term framework. And given the delinquency, we will certainly should be. And we'll be back in January to talk about that in more depth. So we're maintaining that discipline to be really efficient. As you kind of step into phase two or phase three, even though we don't necessarily talk about that in the company, I think what you're going to start to see is more on the origination side of the equation, taking a little bit more risk there. Again, we want to make sure that industry participants are not being super aggressive.
You see it at the high end, but you don't, you don't want that middle to kind of overextend, which is what we saw really in 2021 and 2022. So I think you'll see a little bit more around origination. I think the focus had been around Health and Wellness and Digital. I think it broadens out a little bit, into the other platforms. So I think you see that. So it will be over the course of the next year plus, I think, till we're back to a credit aperture that's similar to what we did back in 2022.
So sort of to bring together all the comments on loan growth, it feels like unwinding the curtailment, the strength of Walmart, a relatively stable economy. It feels like we're pretty poised to have improving growth over the medium term. I think you made a comment just now that you see us heading back to the long-term framework. Maybe just talk about, I know we'll get guidance in January, how you're thinking broad strokes about 2026 and over the medium term, you know, what will it take us to get back to that, you know, call it 7%-10% growth that you guys historically targeted?
Yeah. You know, Brian, Brian, you know, mentioned Walmart. Walmart will clearly be a strong tailwind to growth, right? Just given the velocity of people that go through, whether it's the online properties or the physical properties, that will be a tailwind. The credit aperture change, again, we haven't, you know, we'll step out. We, you know, as we kind of did our 2026 plan, we kind of focus on, you know, this first phase. That will provide a little bit of tailwind. And then what you're naturally seeing is that consumer being more willing, given the portfolio of customers we have, more willing to engage in the spend. So we see strength. You know, Brian talked about it in his opening comments. You know, we're seeing strength in discretionary spending, across cohorts. That has continued into November.
It's been great for us, you know, given the portfolio mix that we have today. So we continue to see that even in Home and Auto, right, which has been, probably our most challenged, you know, sales platform because of the bigger ticket. We actually see in furniture, it's actually doing well.
Mm-hmm.
Right? Where you're seeing more pressure is the bigger ticket home specialty when you're, you know, whether it's generators, windows, roofing, etc. That's where people aren't putting the money. So, so I, I think we see green shoots across the, the core, if I call it that, that will also be a tailwind. So I, I think, you know, we, we've kind of turned the corner. No one wants to be in a low growth mode. But, Ryan, you know, really this year we took out the majority of the sales, and the decline was, was our actions because we wanted credit to be in the right place. We think that's a competitive strength moving forward.
So Brian, I wanted to spend a minute on the organic pipeline. You know, you highlighted Walmart. There were you won a portion of Lowe's, Pay Later at Amazon, a handful of others. Maybe just talk about what the environment looks like for new business wins, whether it's startups or portfolios from competitors, and talk a little bit about where the pipeline is geared towards.
Yeah. Yeah. Look, the business development team is very busy, as they always are. There's a pretty good pipeline of de novo opportunities, of programs that have existing portfolios that we're involved in. You know, I would say the thing that's changed over the last couple of years though is the what I would call a non-traditional business development opportunity. So this is where we're really working to expand distribution of our products, right? So this could be through ISVs, multi-source financing platforms, e-carts, etc. You know, these aren't. You have a merchant or a provider, and we're providing financing. This is really how they are running their businesses? In the case of health and wellness, we're integrated in 40 different ISVs, right? And that makes it easy for those providers to offer our financing. It's not a separate step.
It's kind of integrated in everything they do. So our business development teams are spending as much time on those types of opportunities. You know, last year we launched a partnership with ServiceTitan in Home and Auto. That, that'll be great for us, right? That, that's a way to, again, expand distribution of our products and make them easy to access for consumers. So, you know, when we think about our organic pipeline, it's really changed in the last couple of years to be the traditional stuff that we always talk about, you know, new programs like Walmart, expanding products inside of an existing partner like we did with Amazon with Pay Later. But this whole other category now, which is really expanding distribution. And that will, you know, as Agentic Commerce expands and grows, that'll provide additional opportunities for us.
It's going to change, it's going to change the purchasing path. We have to have our financing products integrated in whatever that eventually becomes. But that's a different mindset. That's, that's not. You're partnering with a traditional merchant who's selling goods. You're trying to get inside of that purchasing path and make sure our financing products are front and center as consumers are making that decision to buy.
So.
I just wanted to say, because you talked about competition, I think the competition, fortunately, is still pretty rational. It's been that way for three or four years. I think some of the uncertainty over the last two or three years on credit and some of the uncertainty around the economy, I think it tends to have that effect on the competition on other issuers where they're like, "Okay, nobody's getting too crazy on price." You're not seeing a lot of terms that are way out of whack. Look, at the end of the day, I feel great about our ability to compete. You know, we're winning the deals we should win, and we're winning for the right reasons, right? We're winning based on our products, our capabilities, the multi-product suite that we have.
Prism, our underwriting platform, is a huge differentiator. So, you know, I feel really good about how we're competitively positioned in this environment.
And speaking of competition, you could see it in the stats. I think, you know, many of your largest partners are renewed till 2030. 2025 through 2027 or later, 97% of balances. Not a lot of risks of losing partners. But maybe just speak about recent trends in renewals, where is the pendulum swinging, and how do things like PPP Cs factor in?
Yeah. We're thrilled we were able to put together such a great renewal cycle, and most of those were done well ahead of the contractual date. You know, there's always things in the program that either the partner wants to change or maybe we want to change. And frankly, if it's working, right, if the program is successful and we're delivering for the partner and we're happy and they're happy, there's no reason not to renew and extend.
Mm-hmm.
You know, with that said, it can be a distraction too.
Yeah.
You're spending a lot of time working on the renewal and not necessarily on growing the program. So I do think that was, it's a qualitative kind of concept, but we definitely felt some of that. So it's great to have that big renewal wave behind us, and you know, you mentioned PPP Cs. I, that was kind of like an if-then statement as we were going through some of the negotiations. If it happens, we'll do this. If it doesn't happen, we'll do this, but I wouldn't say it played a big role.
Yeah. It didn't play a big role.
It didn't play a big role.
I guess maybe just as a follow-up to that, maybe for Brian Wenzel, you know, there was a couple of tweaks to the PPP Cs. I think it was you mentioned last quarter. You know, how are you thinking about these over the longer term? Do you expect them to be competed away or spread around the partners and consumers over time? What is sort of the long-term trajectory of these?
Yeah. You know, listen, I think we made some adjustments to it. It really was around one major partner and some small tweaks around it. We're not really in any discussions to adjust it with partners, which I think people feel comfortable. We really haven't seen in the data any negative reaction, right, relative to the PPP Cs. I think as you look at 2026 and beyond, you know, the question for us that we'll face is to some degree, would we want to reinvest any of that back into value propositions or, you know, potentially given the margin expansion that inherently comes with it? Would you change the credit aperture a little bit? That's something we haven't made any decisions on. We'll see what happens in 2026.
But you know, for now that they're sticking and we feel comfortable with that. But listen, we've seen some really positive trends in the business. When you think about the you know the statement, we've seen you know a significant adoption of e. That's a great thing for us you know when you engage someone more digitally into the you know into the program. So you know they're here. You know as far as competing away, this is one where I think people say, "Well, if someone come in and they'll bid down the price or whatever." You know most of these programs come with change you know change in control and FMV.
So it's not easy to just kind of come in and say, "Okay, I'm going to bid down the price because they're going to have to pay us a big FMV," which they're going to have to amortize. So in theory, it doesn't create an advantage for someone that says, "Listen, I'll come in and take a lower price because they're going to have to pay us," which is, you know, indifferent to some degree. So it's something with our partners. We'll continue to, you know, engage with them the same way we did when we put the actions in place around what makes the most sense for the consumers and that program itself.
I think the good news is that it's not, it won't be, there's no event, right? This is now just like normal course, right? It'll be program by program. And by the way, our teams are looking at this and have always looked at this. Like, where do we want it? If we make a tweak over here on price, what kind of growth do we get, right? If we want to go, if we've got a little bit more margin and we go deeper, like we do that already today, what kind of growth will it drive?
So I think there's, you know, now this is just kind of in the business and the runway, and every one of those will be kind of adjudicated separately in terms of, you know, if we do something over here, what's the return on that investment?
Let's. We touched on it earlier, but let's talk a little bit about credit. You guys have performed in line or better than most peers in terms of credit performance. Brian wants me to say better than everybody. I guess first.
That's actually true, but l et's try to be modest.
First, maybe just talk about what has driven this outperformance, and then second, again, I'm sure we'll get guidance in January, but you've been running at sort of the low end of your targeted range. You've obviously been in a restrictive credit stance, you know, the past few years. What about, you think all this means for credit over the medium term?
Yeah. You know, yes, we've been restrictive, but, you know, this year we're opening over 20 million accounts, which I want to say is a streak for us that if you look at the last 20 years, I want to say other than one or two years, we've opened more than 20 million accounts. So we're continuing to do that. You know, credit for us was important. We wanted to maintain discipline around accounts that we originated at the right margin. We don't need growth for growth's sake. You know, I think most people look at our company, don't buy us for growth. They buy us for return. And I think we were disciplined relative to return. We're going to be disciplined relative to return.
I think as you look at the actions, whether it's phase one, two, or three, we're going to maintain that discipline so that we maintain the right risk-adjusted margin. And the great news is we have a ton of capital to do that, you know, through the course. So, you know, credit for us is going to be a strength. And I think we took actions, you know, faster than others. Others said that, you know, listen, you know, we're going to take more risk at the margin. They're willing to take a lower return. We just said that's not our model. And we're comfortable with the growth profile. The great news is, you know, we've kind of bottomed out. We're returning to growth.
I think as we, you know, more rational credit actions across the industry take place and we work through the oversupply of credit, it's going to be a tailwind to us with regard to growth. So I think we're incredibly well positioned in 2026 and beyond, both from a growth perspective as well as a credit perspective.
And then sort of as a follow-up, because of the strong credit performance, we've obviously seen the allowance come down. I think you mentioned it's likely to continue to have a downward bias. You know, I know a big part of this is mechanical, but how do you balance bringing down the reserve to reflect improved credit? But obviously we're, you know, continuing to see uncertainty in the macro.
Listen, there should be a downward bias because of the credit posture. You know, the biggest question for us on the reserves is going to be the macro and when do we have. I probably said this for the last four years, when do we have clarity relative to the macro, right? I think as a company, we don't believe we're going into a recession, but there is increased pressure right now. And so we're, you know, we're probably a little bit more negative on the macro relative to the reserve. I think as that clears, number one, I think the credit actions and our reliance more on data and Prism, as Brian talked about, the advanced underwriting system, there will be a downward bias to the reserve.
I think that actually helps us because you potentially can get some great decreases as you're growing into it. So some of the unfortunate consequences of Cecil offset each other as you kind of go into that growth mode. So that's what we hope, is that the coverage continues to come down as a rate perspective, albeit dollars are going to go up because of loan growth.
Let's spend just a minute or so talking about the net interest margin. You had a ton of success this year, bringing the margin up driven by a handful of things, PPP Cs, lower liquidity. You did a great job optimizing the funding. And it feels like the rate environment is becoming more conducive for your balance sheet. So maybe just talk about the path back to at or above 16% margin and what are sort of the key drivers to getting there.
You know, the biggest variable for us obviously is liquidity, right? And to a large degree, we've been able to, you know, expand deposits. You know, if you go back five years ago, you know, we used to take in deposits at 1%- 1.5%, and we'd get back 10 basis points from the Fed. Now we're taking in deposits at 3.65%-3.80%. We're getting 4% back or 3.90% from the Fed. So it's a positive economic trend. So we're going to continue to take deposits. That depresses NIM a little bit. That will ultimately get deployed into loan receivables, which is an upward bias to NIM.
I think as you look forward, you know, maturation of the PPP Cs tailwind, you know, to a large degree, you're going to see some of the compression we saw on the fixed side of the book because, you know, the promos, you know, which are fixed versus our funding stack, you know, which resets a little bit quicker. I think that becomes a tailwind, that compression over time, you know, the next two years kind of unwinds. You know, at the end of the day, you know, interest expense, you know, prime and investment portfolio will kind of offset each other. So there are more, I'd say, tailwinds to NIM.
Mm-hmm.
You know, the couple of headwinds that you have is number one, you know, late fees are going to go down, right, as credits come in the box. And two, on a NIM basis, because your average balance is going up, there's a little bit of a bias. So, I think we feel good about, you know, NIM. It just takes time given the compression and interest rates where we are.
Two last questions to get through here in the last two minutes. So first, let's just shift to talk about capital. You know, CET1 stands at over 13.5%. You recently upped the buyback by $1 billion- $3.5 billion. If my calculus is correct, you know, when you finish this allotment, you should still have about 13% CET1. Obviously, that's subject to the pace of loan growth, and that's still well in excess of your 11% target. Maybe just talk about the path and time frames getting closer to the 11% . And can we continue to see this pace of buyback even with improving loan growth?
Yeah. You know, listen, we're going to be aggressive, but prudent. You know, we realize that capital's a strength, but it's not necessarily something we want to keep on the balance sheet, you know, for us. We generate a ton of capital. I think when you look at it, we'll generate over 300 basis points of CET1. So going forward, you know, the good news is we don't have to do the Cecil transition that's behind us. Even with the RWA growth that we have, maybe look at expanding the dividend a little bit, you know, we can kind of continue on this pace. But we, you know, want to get down. We understand that where we are is not necessarily the most efficient. But, you know, listen, this year, RWAs are a little bit lighter than expectations.
You know, earnings, you can argue maybe a little bit better. So, you know, we'll use that as a strength for us, you know, as we move forward.
So, Brian, I think the last couple of years we've always ended on the same question. You know, last year we sat here. I said it was the best performing stock in the coverage. And this year had another outstanding year of performance. I guess when you look ahead, obviously the stock has done much better. What do you think is still left for investors here?
I think it's all the stuff we talked about. I mean, we're, I think we're incredibly well positioned. I think we made all the right investments in the business, and you look across the platforms. We talked about Health and Wellness and Digital. Like, there's so many green shoots, and it's still very early days on some of the most impactful things that we're executing. You know, it's very early on Walmart. It's very early on Amazon Pay Later. We got this huge wave of renewals behind us now, which is great just from the standpoint that, okay, we're not thinking about that. We're spending time with our partners focused on growth.
I think the technology investments we're making, whether it's how we integrate into ISVs, the investments we're making to get out in front of Agentic Commerce and the investments we're making GenAI, the investments we made in Prism, which are providing a great tailwind and help that outperformance. I know I'm running the clock down on it, but those are all reasons to be really excited for, you know, the next handful of years.
Awesome. Well, with that, please join me in thanking the team.
Thanks, Brian.