Synchrony Reports First Quarter Net Earnings of $1.0 Billion or $1.73 Per Diluted Share

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- Growth Drivers Accelerating; Remain Impacted by Pandemic

- Credit Quality Continues to be Strong, Provision for Credit Losses Down 80%

STAMFORD, Conn., April 27, 2021 /PRNewswire/ -- Synchrony Financial (NYSE: SYF) today announced first quarter 2021 earnings results amid the continuing Coronavirus (COVID-19) pandemic. Synchrony reported first quarter 2021 net earnings of $1.0 billion, or $1.73 per diluted share.

Synchrony Logo (PRNewsfoto/Synchrony)
Synchrony Logo (PRNewsfoto/Synchrony)

Key Highlights*:

  • Loan receivables decreased 7% to $76.9 billion

  • Interest and fees on loans decreased 14% to $3.7 billion

  • Purchase volume increased 8% to $34.7 billion

  • Average active accounts decreased 8% to 66.3 million

  • Deposits decreased $1.9 billion, or 3%, to $62.7 billion

  • Renewed 10 programs including American Eagle, Ashley HomeStores LTD, CITGO, and Phillips 66

  • Added 10 new programs including Prime Healthcare, Mercyhealth, Emory Healthcare, and Southern Veterinary Partners in the CareCredit network

  • Gap Inc. program agreement will not be renewed and will expire in April 2022; expect strategic options will be accretive to diluted earnings per share relative to renewal terms and if the portfolio is sold we expect to redeploy approximately $1 billion of capital

  • Returned $328 million in capital through share repurchases of $200 million and common stock dividends

"As we begin to emerge from the pandemic, Synchrony is well positioned for a strong recovery and bright future. We're driving growth for Synchrony and our partners by investing in enhanced digital and data capabilities, seamless customer experiences, new products and capabilities, and expanding our networks. As we navigated the challenges of the past year, we further strengthened our competitive position and accelerated initiatives to help our partners compete and win in this dynamic environment," said Brian Doubles, President and Chief Executive Officer, Synchrony. "Though first quarter results continued to be impacted by the pandemic with slower loan growth, lower net interest income and resultant lower margins, credit continues to perform exceedingly well and we are driving operational efficiency. I am confident in our success as we accelerate our strategy and position the company for long-term growth."

Business and Financial Results for the First Quarter of 2021*

Earnings

  • Net interest income decreased $451 million, or 12%, to $3.4 billion, mainly due to lower finance charges and late fees.

  • Retailer share arrangements increased $63 million, or 7%, to $1.0 billion, reflecting the improvement in net charge-offs.

  • Provision for credit losses decreased $1.3 billion, or 80%, to $334 million, driven by lower reserves and net charge-offs.

  • Other income increased $34 million, or 35%, to $131 million, largely driven by investment income.

  • Other expense decreased $70 million, or 7%, to $932 million, mainly driven by lower operational losses and lower marketing and business development costs, partially offset by an increase in employee costs.

  • Net earnings increased $739 million to $1.0 billion.

Balance Sheet

  • Period-end loan receivables decreased 7%; purchase volume increased 8%; and average active accounts decreased 8%.

  • Deposits decreased $1.9 billion, or 3%, to $62.7 billion and comprised 81% of funding.

  • The Company's balance sheet remained strong with total liquidity (liquid assets and undrawn credit facilities) of $28.0 billion, or 29.2% of total assets.

  • The Company has elected to defer the regulatory capital effects of CECL for two years; the estimated Common Equity Tier 1 ratio was 17.4% compared to 14.3%, and the estimated Tier 1 Capital ratio was 18.3% compared to 15.2%, reflecting the Company's strong capital generation capabilities.

Key Financial Metrics

  • Return on assets was 4.3% and return on equity was 31.8%.

  • Net interest margin was 13.98%.

  • Efficiency ratio was 36.1%.

Credit Quality

  • Loans 30+ days past due as a percentage of total period-end loan receivables were 2.83% compared to 4.24% last year.

  • Net charge-offs as a percentage of total average loan receivables were 3.62% compared to 5.36% last year.

  • The allowance for credit losses as a percentage of total period-end loan receivables was 12.88%.

Sales Platforms

  • Impacts from 2020 shutdowns and higher payment rates affecting platforms' receivables growth to varying degrees in the first quarter.

  • Retail Card period-end loan receivables decreased 9%. Interest and fees on loans decreased 16%, driven primarily by the decline in loan receivables and lower yield. Purchase volume increased 11% and average active accounts decreased 7%.

  • Payment Solutions period-end loan receivables decreased 1%, with continued strength in Power Sports and Home Specialty. Interest and fees on loans decreased 11%, driven primarily by lower late fees, finance charges, and merchant discount. Purchase volume increased 3% and average active accounts decreased 9%.

  • CareCredit period-end loan receivables decreased 8%. Interest and fees on loans decreased 7%, driven primarily by lower late fees and merchant discount. Purchase volume was flat and average active accounts decreased 11%.

* All comparisons are for the first quarter of 2021 compared to the first quarter of 2020, unless otherwise noted.

Corresponding Financial Tables and Information

No representation is made that the information in this news release is complete. Investors are encouraged to review the foregoing summary and discussion of Synchrony Financial's earnings and financial condition in conjunction with the detailed financial tables and information that follow and the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed February 11, 2021, and the Company's forthcoming Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. The detailed financial tables and other information are also available on the Investor Relations page of the Company's website at www.investors.synchronyfinancial.com. This information is also furnished in a Current Report on Form 8-K filed with the SEC today.

Conference Call and Webcast Information

On Tuesday, April 27, 2021, at 8:30 a.m. Eastern Time, Brian Doubles, President and Chief Executive Officer, and Brian Wenzel Sr., Executive Vice President and Chief Financial Officer, will host a conference call to review the financial results and outlook for certain business drivers. The conference call can be accessed via an audio webcast through the Investor Relations page on the Synchrony Financial corporate website, www.investors.synchronyfinancial.com, under Events and Presentations. A replay will also be available on the website.

About Synchrony Financial

Synchrony (NYSE: SYF) is a premier consumer financial services company. We deliver a wide range of specialized financing programs, as well as innovative consumer banking products, across key industries including digital, retail, home, auto, travel, health and pet. Synchrony enables our partners to grow sales and loyalty with consumers. We are one of the largest issuers of private label credit cards in the United States; we also offer co-branded products, installment loans and consumer financing products for small- and medium-sized businesses, as well as healthcare providers.

Synchrony is changing what's possible through our digital capabilities, deep industry expertise, actionable data insights, frictionless customer experience and customized financing solutions.

For more information, visit www.synchrony.com and Twitter: @Synchrony.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains certain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "targets," "outlook," "estimates," "will," "should," "may" or words of similar meaning, but these words are not the exclusive means of identifying forward-looking statements. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include global political, economic, business, competitive, market, regulatory and other factors and risks, such as: the impact of macroeconomic conditions and whether industry trends we have identified develop as anticipated, including the future impacts of the novel coronavirus disease ("COVID-19") outbreak and measures taken in response thereto for which future developments are highly uncertain and difficult to predict; retaining existing partners and attracting new partners, concentration of our revenue in a small number of Retail Card partners, and promotion and support of our products by our partners; cyber-attacks or other security breaches; disruptions in the operations of our and our outsourced partners' computer systems and data centers; the financial performance of our partners; the sufficiency of our allowance for credit losses and the accuracy of the assumptions or estimates used in preparing our financial statements, including those related to the CECL accounting guidance; higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to grow our deposits in the future; damage to our reputation; our ability to securitize our loan receivables, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loan receivables, and lower payment rates on our securitized loan receivables; changes in market interest rates and the impact of any margin compression; effectiveness of our risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, our ability to manage our credit risk; our ability to offset increases in our costs in retailer share arrangements; competition in the consumer finance industry; our concentration in the U.S. consumer credit market; our ability to successfully develop and commercialize new or enhanced products and services; our ability to realize the value of acquisitions and strategic investments; reductions in interchange fees; fraudulent activity; failure of third parties to provide various services that are important to our operations; international risks and compliance and regulatory risks and costs associated with international operations; alleged infringement of intellectual property rights of others and our ability to protect our intellectual property; litigation and regulatory actions; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions and/or interpretations, and state sales tax rules and regulations; regulation, supervision, examination and enforcement of our business by governmental authorities, the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislative and regulatory developments and the impact of the Consumer Financial Protection Bureau's regulation of our business; impact of capital adequacy rules and liquidity requirements; restrictions that limit our ability to pay dividends and repurchase our common stock, and restrictions that limit the Synchrony Bank's ability to pay dividends to us; regulations relating to privacy, information security and data protection; use of third-party vendors and ongoing third-party business relationships; and failure to comply with anti-money laundering and anti-terrorism financing laws.

For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this news release and in our public filings, including under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed on February 11, 2021. You should not consider any list of such factors to be an exhaustive statement of all the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

Non-GAAP Measures

The information provided herein includes measures we refer to as "tangible common equity", and certain "CECL fully phased-in" capital measures, which are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please see the detailed financial tables and information that follow. For a statement regarding the usefulness of these measures to investors, please see the Company's Current Report on Form 8-K filed with the SEC today.

Investor Relations
Jennifer Church
(203) 585-6508

Media Relations
Sue Bishop
(203) 585-2802

SYNCHRONY FINANCIAL

FINANCIAL SUMMARY

(unaudited, in millions, except per share statistics)


Quarter Ended




Mar 31,
2021


Dec 31,
2020


Sep 30,
2020


Jun 30,
2020


Mar 31,
2020


1Q'21 vs. 1Q'20

EARNINGS













Net interest income

$3,439


$3,659


$3,457


$3,396


$3,890


$(451)

(11.6)%

Retailer share arrangements

(989)


(1,047)


(899)


(773)


(926)


(63)

6.8%














Provision for credit losses

334


750


1,210


1,673


1,677


(1,343)

(80.1)%

Net interest income, after retailer share arrangements and provision for credit losses

2,116


1,862


1,348


950


1,287


829

64.4%

Other income

131


82


131


95


97


34

35.1%

Other expense

932


1,000


1,067


986


1,002


(70)

(7.0)%

Earnings before provision for income taxes

1,315


944


412


59


382


933

244.2%

Provision for income taxes

290


206


99


11


96


194

202.1%

Net earnings

$1,025


$738


$313


$48


$286


$739

258.4%

Net earnings available to common stockholders

$1,014


$728


$303


$37


$275


$739

268.7%








































COMMON SHARE STATISTICS













Basic EPS

$1.74


$1.25


$0.52


$0.06


$0.45


$1.29

286.7%

Diluted EPS

$1.73


$1.24


$0.52


$0.06


$0.45


$1.28

284.4%














Dividend declared per share

$0.22


$0.22


$0.22


$0.22


$0.22


$-

- %

Common stock price

$40.66


$34.71


$26.17


$22.16


$16.09


$24.57

152.7%

Book value per share

$21.86


$20.49


$19.47


$19.13


$19.27


$2.59

13.4%

Tangible common equity per share(1)

$17.95


$16.72


$15.75


$15.28


$15.35


$2.60

16.9%














Beginning common shares outstanding

584.0


583.8


583.7


583.2


615.9


(31.9)

(5.2)%

Issuance of common shares

-


-


-


-


-


-

- %

Stock-based compensation

2.2


0.2


0.1


0.5


0.9


1.3

144.4%

Shares repurchased

(5.1)


-


-


-


(33.6)


28.5

(84.8)%

Ending common shares outstanding

581.1


584.0


583.8


583.7


583.2


(2.1)

(0.4)%














Weighted average common shares outstanding

583.3


583.9


583.8


583.7


604.9


(21.6)

(3.6)%

Weighted average common shares outstanding (fully diluted)

587.5


586.6


584.8


584.4


607.4


(19.9)

(3.3)%















(1) Tangible Common Equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

SYNCHRONY FINANCIAL

SELECTED METRICS

(unaudited, $ in millions)


Quarter Ended




Mar 31,
2021


Dec 31,
2020


Sep 30,
2020


Jun 30,
2020


Mar 31,
2020


1Q'21 vs. 1Q'20

PERFORMANCE METRICS













Return on assets(1)

4.3%


3.1%


1.3%


0.2%


1.1%



3.2%

Return on equity(2)

31.8%


23.6%


10.3%


1.6%


9.1%



22.7%

Return on tangible common equity(3)

40.8%


30.4%


13.1%


1.6%


11.6%



29.2%














Net interest margin(4)

13.98%


14.64%


13.80%


13.53%


15.15%



(1.17)%

Efficiency ratio(5)

36.1%


37.1%


39.7%


36.3%


32.7%



3.4%

Other expense as a % of average loan receivables, including held for sale

4.82%


5.01%


5.44%


5.04%


4.77%



0.05%

Effective income tax rate

22.1%


21.8%


24.0%


18.6%


25.1%



(3.0)%



























CREDIT QUALITY METRICS













Net charge-offs as a % of average loan receivables, including held for sale

3.62%


3.16%


4.42%


5.35%


5.36%



(1.74)%

30+ days past due as a % of period-end loan receivables(6)

2.83%


3.07%


2.67%


3.13%


4.24%



(1.41)%

90+ days past due as a % of period-end loan receivables(6)

1.52%


1.40%


1.24%


1.77%


2.10%



(0.58)%

Net charge-offs

$699


$631


$866


$1,046


$1,125


$(426)

(37.9)%

Loan receivables delinquent over 30 days(6)

$2,175


$2,514


$2,100


$2,453


$3,500


$(1,325)

(37.9)%

Loan receivables delinquent over 90 days(6)

$1,170


$1,143


$973


$1,384


$1,735


$(565)

(32.6)%














Allowance for credit losses (period-end)

$9,901


$10,265


$10,146


$9,802


$9,175


$726

7.9%

Allowance coverage ratio(7)

12.88%


12.54%


12.92%


12.52%


11.13%



1.75%














BUSINESS METRICS













Purchase volume(8)(9)

$34,749


$39,874


$36,013


$31,155


$32,042


$2,707

8.4%

Period-end loan receivables

$76,858


$81,867


$78,521


$78,313


$82,469


$(5,611)

(6.8)%

Credit cards

$73,244


$78,455


$75,204


$75,353


$79,832


$(6,588)

(8.3)%

Consumer installment loans

$2,319


$2,125


$1,987


$1,779


$1,390


$929

66.8%

Commercial credit products

$1,248


$1,250


$1,270


$1,140


$1,203


$45

3.7%

Other

$47


$37


$60


$41


$44


$3

6.8%

Average loan receivables, including held for sale

$78,358


$79,452


$78,005


$78,697


$84,428


$(6,070)

(7.2)%

Period-end active accounts (in thousands)(9)(10)

65,219


68,540


64,800


63,430


68,849


(3,630)

(5.3)%

Average active accounts (in thousands)(9)(10)

66,280


66,261


64,270


64,836


72,078


(5,798)

(8.0)%














LIQUIDITY













Liquid assets













Cash and equivalents

$16,620


$11,524


$13,552


$16,344


$13,704


$2,916

21.3%

Total liquid assets

$22,636


$18,321


$21,402


$22,352


$19,225


$3,411

17.7%

Undrawn credit facilities













Undrawn credit facilities

$5,400


$5,400


$5,400


$5,650


$5,600


$(200)

(3.6)%

Total liquid assets and undrawn credit facilities

$28,036


$23,721


$26,802


$28,002


$24,825


$3,211

12.9%

Liquid assets % of total assets

23.62%


19.09%


22.37%


23.15%


19.61%



4.01%

Liquid assets including undrawn credit facilities % of total assets

29.25%


24.72%


28.02%


29.00%


25.32%



3.93%















(1) Return on assets represents net earnings as a percentage of average total assets.

(2) Return on equity represents net earnings as a percentage of average total equity.

(3) Return on tangible common equity represents net earnings available to common stockholders as a percentage of average tangible common equity. Tangible common equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

(4) Net interest margin represents net interest income divided by average interest-earning assets.

(5) Efficiency ratio represents (i) other expense, divided by (ii) net interest income, plus other income, less retailer share arrangements.

(6) Based on customer statement-end balances extrapolated to the respective period-end date.

(7) Allowance coverage ratio represents allowance for credit losses divided by total period-end loan receivables.

(8) Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.

(9) Includes activity and accounts associated with loan receivables held for sale.

(10) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

SYNCHRONY FINANCIAL

STATEMENTS OF EARNINGS

(unaudited, $ in millions)


Quarter Ended




Mar 31,
2021


Dec 31,
2020


Sep 30,
2020


Jun 30,
2020


Mar 31,
2020


1Q'21 vs. 1Q'20

Interest income:













Interest and fees on loans

$3,732


$3,981


$3,821


$3,808


$4,340


$(608)

(14.0)%

Interest on cash and debt securities

10


12


16


22


67


(57)

(85.1)%

Total interest income

3,742


3,993


3,837


3,830


4,407


(665)

(15.1)%














Interest expense:













Interest on deposits

170


200


245


293


356


(186)

(52.2)%

Interest on borrowings of consolidated securitization entities

51


52


53


59


73


(22)

(30.1)%

Interest on senior unsecured notes

82


82


82


82


88


(6)

(6.8)%














Total interest expense

303


334


380


434


517


(214)

(41.4)%














Net interest income

3,439


3,659


3,457


3,396


3,890


(451)

(11.6)%














Retailer share arrangements

(989)


(1,047)


(899)


(773)


(926)


(63)

6.8%



























Provision for credit losses

334


750


1,210


1,673


1,677


(1,343)

(80.1)%

Net interest income, after retailer share arrangements and provision for credit losses

2,116


1,862


1,348


950


1,287


829

64.4%














Other income:













Interchange revenue

171


185


172


134


161


10

6.2%

Debt cancellation fees

69


72


68


69


69


-

- %

Loyalty programs

(179)


(202)


(155)


(134)


(158)


(21)

13.3%

Other

70


27


46


26


25


45

180.0%

Total other income

131


82


131


95


97


34

35.1%














Other expense:













Employee costs

364


347


382


...

327


324


40

12.3%

Professional fees

190


186


187


189


197


(7)

(3.6)%

Marketing and business development

95


139


107


91


111


(16)

(14.4)%

Information processing

131


128


125


116


123


8

6.5%

Other

152


200


266


263


247


(95)

(38.5)%

Total other expense

932


1,000


1,067


986


1,002


(70)

(7.0)%














Earnings before provision for income taxes

1,315


944


412


59


382


933

244.2%

Provision for income taxes

290


206


99


11


96


194

202.1%

Net earnings

$1,025


$738


$313


$48


$286


$739

258.4%














Net earnings available to common stockholders

$1,014


$728


$303


$37


$275


$739

268.7%

SYNCHRONY FINANCIAL

STATEMENTS OF FINANCIAL POSITION

(unaudited, $ in millions)


Quarter Ended




Mar 31,
2021


Dec 31,
2020


Sep 30,
2020


Jun 30,
2020


Mar 31,
2020


Mar 31, 2021 vs. Mar 31, 2020

Assets













Cash and equivalents

$16,620


$11,524


$13,552


$16,344


$13,704


$2,916

21.3%

Debt securities

6,550


7,469


8,432


6,623


6,146


404

6.6%

Loan receivables:













Unsecuritized loans held for investment

53,823


56,472


52,613


52,629


54,765


(942)

(1.7)%

Restricted loans of consolidated securitization entities

23,035


25,395


25,908


25,684


27,704


(4,669)

(16.9)%

Total loan receivables

76,858


81,867


78,521


78,313


82,469


(5,611)

(6.8)%

Less: Allowance for credit losses

(9,901)


(10,265)


(10,146)


(9,802)


(9,175)


(726)

7.9%

Loan receivables, net

66,957


71,602


68,375


68,511


73,294


(6,337)

(8.6)%

Loan receivables held for sale

23


5


4


4


5


18

NM

Goodwill

1,104


1,078


1,078


1,078


1,078


26

2.4%

Intangible assets, net

1,169


1,125


1,091


1,166


1,208


(39)

(3.2)%

Other assets

3,431


3,145


3,126


2,818


2,603


828

31.8%

Total assets

$95,854


$95,948


$95,658


$96,544


$98,038


$(2,184)

(2.2)%














Liabilities and Equity













Deposits:













Interest-bearing deposit accounts

$62,419


$62,469


$63,195


$63,857


$64,302


$(1,883)

(2.9)%

Non-interest-bearing deposit accounts

342


313


298


291


313


29

9.3%

Total deposits

62,761


62,782


63,493


64,148


64,615


(1,854)

(2.9)%

Borrowings:













Borrowings of consolidated securitization entities

7,193


7,810


7,809


8,109


9,291


(2,098)

(22.6)%














Senior unsecured notes

7,967


7,965


7,962


7,960


7,957


10

0.1%














Total borrowings

15,160


15,775


15,771


16,069


17,248


(2,088)

(12.1)%

Accrued expenses and other liabilities

4,494


4,690


4,295


4,428


4,205


289

6.9%

Total liabilities

82,415


83,247


83,559


84,645


86,068


(3,653)

(4.2)%

Equity:













Preferred stock

734


734


734


734


734


-

- %

Common stock

1


1


1


1


1


-

- %

Additional paid-in capital

9,592


9,570


9,552


9,532


9,523


69

0.7%

Retained earnings

11,470


10,621


10,024


9,852


9,960


1,510

15.2%

Accumulated other comprehensive income (loss)

(56)


(51)


(31)


(37)


(49)


(7)

14.3%

Treasury stock

(8,302)


(8,174)


(8,181)


(8,183)


(8,199)


(103)

1.3%

Total equity

13,439


12,701


12,099


11,899


11,970


1,469

12.3%

Total liabilities and equity

$95,854


$95,948


$95,658


$96,544


$98,038


$(2,184)

(2.2)%

SYNCHRONY FINANCIAL

AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN

(unaudited, $ in millions)
































Quarter Ended


Mar 31, 2021


Dec 31, 2020


Sep 30, 2020


Jun 30, 2020


Mar 31, 2020




Interest


Average




Interest


Average




Interest


Average




Interest


Average




Interest


Average


Average


Income/


Yield/


Average


Income/


Yield/


Average


Income/


Yield/


Average


Income/


Yield/


Average


Income/


Yield/


Balance


Expense


Rate


Balance


Expense


Rate


Balance


Expense


Rate


Balance


Expense


Rate


Balance


Expense


Rate

Assets






























Interest-earning assets:






























Interest-earning cash and equivalents

$14,610


$4


0.11%


$11,244


$4


0.14%


$13,664


$4


0.12%


$15,413


$3


0.08%


$12,902


$42


1.31%

Securities available for sale

6,772


6


0.36%


8,706


8


0.37%


7,984


12


0.60%


6,804


19


1.12%


5,954


25


1.69%































Loan receivables, including held for sale:






























Credit cards

74,865


3,657


19.81%


76,039


3,908


20.45%


74,798


3,752


19.96%


75,942


3,740


19.81%


81,716


4,272


21.03%

Consumer installment loans

2,219


53


9.69%


2,057


50


9.67%


1,892


46


9.67%


1,546


37


9.63%


1,432


35


9.83%

Commercial credit products

1,231


21


6.92%


1,293


23


7.08%


1,238


22


7.07%


1,150


30


10.49%


1,243


33


10.68%

Other

43


1


NM


63


-


- %


77


1


NM


59


1


NM


37


-


- %

Total loan receivables, including held for sale

78,358


3,732


19.32%


79,452


3,981


19.93%


78,005


3,821


19.49%


78,697


3,808


19.46%


84,428


4,340


20.67%

Total interest-earning assets

99,740


3,742


15.22%


99,402


3,993


15.98%


99,653


3,837


15.32%


100,914


3,830


15.26%


103,284


4,407


17.16%































Non-interest-earning assets:






























Cash and due from banks

1,635






1,525






1,489






1,486






1,450





Allowance for credit losses

(10,225)






(10,190)






(9,823)






(9,221)






(8,708)





Other assets

5,305






5,228






5,021






4,779






4,696





Total non-interest-earning assets

(3,285)






(3,437)






(3,313)






(2,956)






(2,562)



































Total assets

$96,455






$95,965






$96,340






$97,958






$100,722



































Liabilities






























Interest-bearing liabilities:






























Interest-bearing deposit accounts

$62,724


$170


1.10%


$62,800


$200


1.27%


$63,569


$245


1.53%


$64,298


$293


1.83%


$64,366


$356


2.22%

Borrowings of consolidated securitization entities

7,694


51


2.69%


7,809


52


2.65%


8,057


53


2.62%


8,863


59


2.68%


9,986


73


2.94%































Senior unsecured notes

7,965


82


4.18%


7,963


82


4.10%


7,960


82


4.10%


7,958


82


4.14%


8,807


88


4.02%































Total interest-bearing liabilities

78,383


303


1.57%


78,572


334


1.69%


79,586


380


1.90%


81,119


434


2.15%


83,159


517


2.50%































Non-interest-bearing liabilities






























Non-interest-bearing deposit accounts

346






308






307






309






299





Other liabilities

4,655






4,663






4,308






4,349






4,672





Total non-interest-bearing liabilities

5,001






4,971






4,615






4,658






4,971



































Total liabilities

83,384






83,543






84,201






85,777






88,130



































Equity






























Total equity

13,071






12,422






12,139






12,181






12,592



































Total liabilities and equity

$96,455






$95,965






$96,340






$97,958






$100,722





Net interest income



$3,439






$3,659






$3,457






$3,396






$3,890

































Interest rate spread(1)





13.65%






14.29%






13.42%






13.11%






14.66%

Net interest margin(2)





13.98%






14.64%






13.80%






13.53%






15.15%
































(1) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.

(2) Net interest margin represents net interest income divided by average interest-earning assets.

SYNCHRONY FINANCIAL

BALANCE SHEET STATISTICS

(unaudited, $ in millions, except per share statistics)















Quarter Ended




Mar 31,
2021


Dec 31,
2020


Sep 30,
2020


Jun 30,
2020


Mar 31,
2020


Mar 31, 2021 vs.
Mar 31, 2020

BALANCE SHEET STATISTICS













Total common equity

$12,705


$11,967


$11,365


$11,165


$11,236


$1,469

13.1%

Total common equity as a % of total assets

13.25%


12.47%


11.88%


11.56%


11.46%



1.79%














Tangible assets

$93,581


$93,745


$93,489


$94,300


$95,752


$(2,171)

(2.3)%

Tangible common equity(1)

$10,432


$9,764


$9,196


$8,921


$8,950


$1,482

16.6%

Tangible common equity as a % of tangible assets(1)

11.15%


10.42%


9.84%


9.46%


9.35%



1.80%

Tangible common equity per share(1)

$17.95


$16.72


$15.75


$15.28


$15.35


$2.60

16.9%














REGULATORY CAPITAL RATIOS(2)(3)














Basel III - CECL Transition




Total risk-based capital ratio(4)

19.7%


18.1%


18.1%


17.6%


16.5%




Tier 1 risk-based capital ratio(5)

18.3%


16.8%


16.7%


16.3%


15.2%

















Tier 1 leverage ratio(6)

14.5%


14.0%


13.3%


12.7%


12.3%




Common equity Tier 1 capital ratio

17.4%


15.9%


15.8%


15.3%


14.3%
































(1) Tangible common equity ("TCE") is a non-GAAP measure. We believe TCE is a more meaningful measure of the net asset value of the Company to investors. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

(2) Regulatory capital ratios at March 31, 2021 are preliminary and therefore subject to change.

(3) Capital ratios starting March 31, 2020 reflect election to delay for two years an estimate of CECL's effect on regulatory capital in accordance with the interim final rule issued by U.S. banking agencies in March 2020.

(4) Total risk-based capital ratio is the ratio of total risk-based capital divided by risk-weighted assets.

(5) Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided by risk-weighted assets.

(6) Tier 1 leverage ratio is the ratio of Tier 1 capital divided by total average assets, after certain adjustments. Tier 1 leverage ratios are based upon the use of daily averages for all periods presented.

SYNCHRONY FINANCIAL

PLATFORM RESULTS

(unaudited, $ in millions)


Quarter Ended




Mar 31,
2021


Dec 31,
2020


Sep 30,
2020


Jun 30,
2020


Mar 31,
2020


1Q'21 vs. 1Q'20

RETAIL CARD













Purchase volume(1)(2)

$26,540


$31,256


$27,374


$24,380


$24,008


$2,532

10.5%

Period-end loan receivables

$47,855


$52,130


$49,595


$49,967


$52,390


$(4,535)

(8.7)%

Average loan receivables, including held for sale

$49,044


$50,235


$49,503


$50,238


$53,820


$(4,776)

(8.9)%

Average active accounts (in thousands)(2)(3)

49,078


49,001


47,065


46,970


53,018


(3,940)

(7.4)%














Interest and fees on loans

$2,547


$2,719


$2,619


$2,640


$3,037


$(490)

(16.1)%

Other income

$66


$50


$84


$56


$59


$7

11.9%














Retailer share arrangements

$(970)


$(1,026)


$(877)


$(752)


$(904)


$(66)

7.3%



























PAYMENT SOLUTIONS













Purchase volume(1)(2)

$5,561


$5,942


$5,901


$4,823


$5,375


$186

3.5%

Period-end loan receivables

$19,682


$20,153


$19,550


$19,119


$19,973


$(291)

(1.5)%

Average loan receivables, including held for sale

$19,867


$19,734


$19,247


$19,065


$20,344


$(477)

(2.3)%

Average active accounts (in thousands)(2)(3)

11,496


11,536


11,497


11,900


12,681


(1,185)

(9.3)%














Interest and fees on loans

$627


$673


$650


$632


$706


$(79)

(11.2)%

Other income

$19


$4


$13


$14


$13


$6

46.2%














Retailer share arrangements

$(15)


$(17)


$(20)


$(18)


$(18)


$3

(16.7)%



























CARECREDIT













Purchase volume(1)

$2,648


$2,676


$2,738


$1,952


$2,659


$(11)

(0.4)%

Period-end loan receivables

$9,321


$9,584


$9,376


$9,227


$10,106


$(785)

(7.8)%

Average loan receivables, including held for sale

$9,447


$9,483


$9,255


$9,394


$10,264


$(817)

(8.0)%

Average active accounts (in thousands)(3)

5,706


5,724


5,708


5,966


6,379


(673)

(10.6)%














Interest and fees on loans

$558


$589


$552


$536


$597


$(39)

(6.5)%

Other income

$46


$28


$34


$25


$25


$21

84.0%














Retailer share arrangements

$(4)


$(4)


$(2)


$(3)


$(4)


$-

- %