“Going forward, as we've talked about for many quarters now, we continue to expect these delinquency and write-off rates to increase over time, but they are likely to remain below pre-pandemic levels in 2023.”

In context

“growth you see as our customers continue to rebuild balances. Importantly, the majority of this revolving loan growth in the U.S. continues to come from our high credit quality existing customers. We also included a disclosure this quarter showing that only 8% (ph) of our U.S. Card Member loans and receivables comes from customers with a FICO less than 660. As you then turn to credit and provision on Slides 9 through 11, this high credit quality of our customer base continues to show through in our best-in-class credit performance. Our Card Member loans and receivables write-off and delinquency rates remain below pre-pandemic levels. Delinquency rates remained flat quarter-over-quarter while write-off rates continue to move up a bit this quarter as we expected, as you can see on Slide 9. Going forward, as we've talked about for many quarters now, we continue to expect these delinquency and write-off rates to increase over time, but they are likely to remain below pre-pandemic levels in 2023. Turning now to the accounting for this credit performance on Slide 10. The quarter-over-quarter growth in our loan balances was the primary driver of our $327 million of reserve build. Although, there was also a small component from incorporating a slightly worse macroeconomic outlook this quarter relative to last quarter. This reserve build, combined with net write-offs, drove $1.2 billion of provision expense in the second quarter. As you see on Slide 11, we ended the second quarter with $4.7 billion of reserves representing 2.6% of our total loans and Card Member receivables. This reserve remains about 30 basis points below the levels we had pre-pandemic or Day 1 CECL. We continue to expect this reserve rate to increase a bit as we move through 2023, while also reflecting the continued”