“Going forward, we continue to expect delinquency and loss rates to move up slowly over time, but to remain below pre-pandemic levels this year.”

In context

“and the macroeconomic outlook that we flowed through our models, which was informed by third-party macroeconomic forecast as well as the latest Fed outlook, was slightly worse this quarter relative to last quarter. The combination of our strong loan growth and the updated macroeconomic assumptions resulted in a $387 million reserve build. This reserve build, combined with low net write-offs, drove $778 million of provision expense for the third quarter. As you see on Slide 12, we ended the third quarter with $3.5 billion of reserves, with reserves for loans representing 3.2% of our balances. I would point out even with this quarter's reserve build, this remains well – the reserve levels we had pre-pandemic, driven by our improved portfolio quality today compared to that prior time period. Going forward, we continue to expect delinquency and loss rates to move up slowly over time, but to remain below pre-pandemic levels this year. I do expect to end the year with a higher level of reserves on our balance sheet and where we ended this quarter given our expected loan growth, the overall level of reserve adjustments will again be influenced by how the macroeconomic evolves in the fourth quarter. Moving next to revenue on Slide 13. Total revenues were up 24% year-over-year in the third quarter or 27% on an FX-adjusted basis. Before I get into more details about our largest revenue drivers in the next few slides, I would note that service fees and other revenue was up 39% year-over-year. Similar to last quarter, this strong growth was largely driven by a recovery in travel-related revenues. Our loan revenue line, discount revenue grew 26% year-over-year in Q3 on an FX-adjusted basis. As you can see on Slide 14, driven b”