Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
 
FORM 8-K
 
 
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
April 21, 2020
Date of Report
(Date of earliest event reported) 
 
 
SYNCHRONY FINANCIAL
(Exact name of registrant as specified in its charter) 
 
 
Delaware
 
001-36560
 
51-0483352
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)

777 Long Ridge Road
 
 
Stamford,
Connecticut
 
06902
(Address of principal executive offices)
 
(Zip Code)
(203) 585-2400
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, par value $0.001 per share
SYF
New York Stock Exchange
Depositary Shares Each Representing a 1/40th Interest in a Share of 5.625% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A
SYFPrA
New York Stock Exchange




Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
 
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨




Item 2.02    Results of Operations and Financial Condition.
On April 21, 2020, Synchrony Financial (the “Company”) issued a press release setting forth the Company’s first quarter 2020 earnings. A copy of the Company’s press release is being furnished as Exhibit 99.1 and hereby incorporated by reference. The information furnished pursuant to this Item 2.02, including Exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
 
Item 9.01    Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being furnished as part of this report:

 
 
 
Number
  
Description
 
 
99.1
  
Press release, dated April 21, 2020, issued by Synchrony Financial
99.2
 
Financial Data Supplement of the Company for the quarter ended March 31, 2020
99.3
 
Financial Results Presentation of the Company for the quarter ended March 31, 2020
99.4
 
Explanation of Non-GAAP Measures
104
 
The cover page from this Current Report on Form 8-K, formatted in Inline XBRL





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
 
 
 
 
 
 
 
 
SYNCHRONY FINANCIAL
 
 
 
 
Date: April 21, 2020
 
 
 
By:
 
/s/ Jonathan Mothner
 
 
 
 
Name:
 
Jonathan Mothner
 
 
 
 
Title:
 
Executive Vice President, General Counsel and Secretary






EXHIBIT INDEX
 
 
 
 
Number
  
Description
 
 
  
 
 
 
104
 
The cover page from this Current Report on Form 8-K, formatted in Inline XBRL




Exhibit 99.1

syf1q16eprimage15.jpg
Investor Relations    Media Relations
Greg Ketron    Sue Bishop
(203) 585-6291    (203) 585-2802
For Immediate Release: April 21, 2020
Synchrony Financial Reports First Quarter Net Earnings of $286 Million or $0.45 Per Diluted Share Increase in Provision for Credit Losses Includes CECL Impact of $101 Million or $0.13 Per Diluted Share

STAMFORD, Conn. – Synchrony Financial (NYSE: SYF) today announced first quarter 2020 earnings results amid the global Coronavirus (COVID-19) pandemic. As a company founded in 1932 to help people during the great depression, the company is committed to supporting its employees, partners, customers and communities during the uncertainty of today’s health and economic crisis.
“I am encouraged and inspired by the resolve of our society to come together in moments of crisis. To all those working around the clock - especially our healthcare professionals and first responders on the front lines, and those behind the scenes, including our dedicated employees who are working to serve our customers and partners, thank you. Supporting our communities is paramount and Synchrony will continue to do all we can to support those who support us,” said Margaret Keane, Chief Executive Officer of Synchrony Financial.
Synchrony reported first quarter 2020 net earnings of $286 million, or $0.45 per diluted share; this includes an increase in the provision for credit losses as a result of CECL implementation in January 2020 of $101 million, or $76 million after-tax, which equates to an EPS reduction of $0.13. Highlights included*:
•
Loan receivables increased 3% to $82.5 billion; loan receivables grew 4% on a Core** basis
•
Interest and fees on loans decreased 7% to $4.3 billion; interest and fees on loans increased 5% on a Core basis
•
Purchase volume decreased 1% to $32.0 billion; purchase volume was up 6% on a Core basis
•
Average active accounts decreased 7% to 72 million; average active accounts grew 4% on a Core basis
•
Deposits grew $0.5 billion, or 1%, to $64.6 billion
•
Significant actions taken in response to COVID-19: taking action to ensure the health and safety of employees and stabilize operations while mitigating the uncertainty and financial pressures faced by consumers and partners
•
Extended and renewed several key relationships and continue to work with both Verizon and Venmo to prepare for launches later this year
•
Paid quarterly common stock dividend of $0.22 per share and repurchased $1.0 billion of Synchrony Financial common stock; suspended remaining authorized share repurchase capacity of $366 million in response to COVID-19

“The underlying strength of our business and balance sheet, combined with our experience, heritage, culture and talented employees will enable us to navigate these uncertain times. Our focus is clear and we have prioritized to deliver on the most critical initiatives to ensure success: we will protect our employees while continuing to deliver for our cardholders, retailers, merchants and providers,“ said Margaret Keane, Chief Executive Officer of Synchrony Financial.


1

Business and Financial Highlights for the First Quarter of 2020*
Earnings
•
Net interest income decreased $336 million, or 8%, to $3.9 billion, mainly due to the Walmart consumer portfolio sale.
•
Retailer share arrangements decreased $28 million, or 3%, to $926 million, mainly driven by a higher credit loss reserve build related to COVID-19.
•
Provision for credit losses increased $818 million, or 95%, to $1.7 billion, mainly driven by the Walmart credit loss reserve reduction last year that totaled $522 million and a higher reserve build related to COVID-19 and CECL in the first quarter, partially offset by lower net charge-offs.
•
Other income increased $5 million, or 5%, to $97 million.
•
Other expense decreased $41 million, or 4%, mainly due to the cost reductions from Walmart.
•
Net earnings totaled $286 million compared to $1.1 billion last year.
Balance Sheet
•
Period-end loan receivables increased 3%; on a Core basis, loan receivables increased 4%; purchase volume growth was 6% and average active accounts increased 4%.
•
Deposits grew to $64.6 billion, up $0.5 billion, or 1%, and comprised 79% of funding.
•
The Company’s balance sheet remained strong with total liquidity (liquid assets and undrawn credit facilities) of $24.8 billion, or 25.3% 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 14.3%, compared to 14.5%, and the estimated Tier 1 Capital ratio was 15.2% compared to 14.5%, reflecting the Company's strong capital generation capabilities while deploying capital through organic growth, program acquisitions, and continued execution of our capital plans. The estimated Tier 1 Capital ratio also reflects the $750 million preferred stock issuance in November 2019.
Key Financial Metrics
•
Return on assets was 1.1% and return on equity was 9.1%.
•
Net interest margin was 15.15%.
•
Efficiency ratio was 32.7%.
Credit Quality
•
Loans 30+ days past due as a percentage of total period-end loan receivables were 4.24% compared to 4.92% last year; excluding the Walmart consumer portfolio, the rate was down approximately 15 basis points compared to last year.
•
Net charge-offs as a percentage of total average loan receivables were 5.36% compared to 6.06% last year; excluding the Walmart consumer portfolio, the rate decreased approximately 15 basis points compared to last year.
•
The allowance for credit losses as a percentage of total period-end loan receivables was 11.13%, which included a $3.0 billion increase in the allowance upon the adoption of CECL on January 1, 2020.
Sales Platforms
•
Retail Card period-end loan receivables grew 2%; period-end loan receivables increased 3% on a Core basis primarily driven by digital partners. Interest and fees on loans decreased 12%, purchase volume

2

decreased 3%, and average active accounts decreased 10%, primarily driven by the sale of the Walmart consumer portfolio.
•
Payment Solutions period-end loan receivables grew 3%; period-end loan receivables increased 7% on a Core basis led by home furnishings and home specialty. Interest and fees on loans increased 3%, primarily driven by the loan receivables growth. Purchase volume growth was 2% and average active accounts increased 2%.
•
CareCredit period-end loan receivables grew 7%, led by dental and veterinary. Interest and fees on loans increased 9%, primarily driven by the loan receivables growth. Purchase volume growth was 2% and average active accounts increased 5%.
* All comparisons are for the first quarter of 2020 compared to the first quarter of 2019, unless otherwise noted.
** Financial measures shown above on a Core basis are non-GAAP measures and exclude from both the prior year and the current year amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively. See non-GAAP reconciliation in the financial tables.
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, 2019, as filed February 13, 2020, and the Company’s forthcoming Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. 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 21, 2020, at 8:30 a.m. Eastern Time, Margaret Keane, Chief Executive Officer, Brian Doubles, President, and Brian Wenzel, 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 be available on the website or by dialing (888) 843-7419 (U.S. domestic) or (630) 652-3042 (international), passcode 12020#, and can be accessed beginning approximately two hours after the event through May 5, 2020.
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.


3

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 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 new 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; a material indemnification obligation to GE under the Tax Sharing and Separation Agreement with GE if we cause the split-off from GE or certain preliminary transactions to fail to qualify for tax-free treatment or in the case of certain significant transfers of our stock following the split-off; 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

4

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, 2019, as filed on February 13, 2020, and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as filed on April 21, 2020. 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 “Core” financial measures that have been adjusted to exclude amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively, 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.


5
Exhibit 99.2


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL SUMMARY
 
 
 
 
 
 
 
 
 
 
(unaudited, in millions, except per share statistics)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
Mar 31,
2020
 
Dec 31,
2019
 
Sep 30,
2019
 
Jun 30,
2019
 
Mar 31,
2019
 
1Q'20 vs. 1Q'19
EARNINGS
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
3,890

 
$
4,029

 
$
4,389

 
$
4,155

 
$
4,226

 
$
(336
)
(8.0
)%
Retailer share arrangements
(926
)
 
(1,029
)
 
(1,016
)
 
(859
)
 
(954
)
 
28

(2.9
)%
Provision for credit losses
1,677

 
1,104

 
1,019

 
1,198

 
859

 
818

95.2
 %
Net interest income, after retailer share arrangements and provision for credit losses
1,287

 
1,896

 
2,354

 
2,098

 
2,413

 
(1,126
)
(46.7
)%
Other income
97

 
104

 
85

 
90

 
92

 
5

5.4
 %
Other expense
1,002

 
1,079

 
1,064

 
1,059

 
1,043

 
(41
)
(3.9
)%
Earnings before provision for income taxes
382

 
921

 
1,375

 
1,129

 
1,462

 
(1,080
)
(73.9
)%
Provision for income taxes
96

 
190

 
319

 
276

 
355

 
(259
)
(73.0
)%
Net earnings
$
286

 
$
731

 
$
1,056

 
$
853

 
$
1,107

 
$
(821
)
(74.2
)%
Net earnings available to common stockholders
$
275

 
$
731

 
$
1,056

 
$
853

 
$
1,107

 
$
(832
)
(75.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 


 


 
 
 
 
 
 
 
COMMON SHARE STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS
$
0.45

 
$
1.15

 
$
1.60

 
$
1.25

 
$
1.57

 
$
(1.12
)
(71.3
)%
Diluted EPS
$
0.45

 
$
1.15

 
$
1.60

 
$
1.24

 
$
1.56

 
$
(1.11
)
(71.2
)%
Dividend declared per share
$
0.22

 
$
0.22

 
$
0.22

 
$
0.21

 
$
0.21

 
$
0.01

4.8
 %
Common stock price
$
16.09

 
$
36.01

 
$
34.09

 
$
34.67

 
$
31.90

 
$
(15.81
)
(49.6
)%
Book value per share
$
19.27

 
$
23.31

 
$
23.13

 
$
22.03

 
$
21.35

 
$
(2.08
)
(9.7
)%
Tangible common equity per share(1)
$
15.35

 
$
19.50

 
$
19.68

 
$
18.60

 
$
17.96

 
$
(2.61
)
(14.5
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning common shares outstanding
615.9

 
653.7

 
668.9

 
688.8

 
718.8

 
(102.9
)
(14.3
)%
Issuance of common shares
—

 
—

 
—

 
—

 
—

 
—

—
 %
Stock-based compensation
0.9

 
0.6

 
0.4

 
1.2

 
0.9

 
—

—
 %
Shares repurchased
(33.6
)
 
(38.4
)
 
(15.6
)
 
(21.1
)
 
(30.9
)
 
(2.7
)
8.7
 %
Ending common shares outstanding
583.2

 
615.9

 
653.7

 
668.9

 
688.8

 
(105.6
)
(15.3
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
604.9

 
633.7

 
658.3

 
683.6

 
706.3

 
(101.4
)
(14.4
)%
Weighted average common shares outstanding (fully diluted)
607.4

 
637.7

 
661.7

 
686.5

 
708.9

 
(101.5
)
(14.3
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.

 
 
 
 
 
 
 
 
 
 
 
 

1


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
SELECTED METRICS
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
 
Mar 31,
2020
 
Dec 31,
2019
 
Sep 30,
2019
 
Jun 30,
2019
 
Mar 31,
2019
 
1Q'20 vs. 1Q'19
 
PERFORMANCE METRICS
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on assets(1)
1.1
%
 
2.7
%
 
3.9
%
 
3.3
%
 
4.3
%
 


(3.2
)%
 
Return on equity(2)
9.1
%
 
19.0
%
 
28.3
%
 
23.1
%
 
30.4
%
 


(21.3
)%
 
Return on tangible common equity(3)
11.6
%
 
23.0
%
 
33.4
%
 
27.4
%
 
35.8
%
 


(24.2
)%
 
Net interest margin(4)
15.15
%
 
15.01
%
 
16.29
%
 
15.75
%
 
16.08
%
 


(0.93
)%
 
Efficiency ratio(5)
32.7
%
 
34.8
%
 
30.8
%
 
31.3
%
 
31.0
%
 


1.7
 %
 
Other expense as a % of average loan receivables, including held for sale
4.77
%
 
5.01
%
 
4.66
%
 
4.78
%
 
4.71
%
 


0.06
 %
 
Effective income tax rate
25.1
%
 
20.6
%
 
23.2
%
 
24.4
%
 
24.3
%
 


0.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY METRICS
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs as a % of average loan receivables, including held for sale
5.36
%
 
5.15
%
 
5.35
%
 
6.01
%
 
6.06
%
 


(0.70
)%
 
30+ days past due as a % of period-end loan receivables(6)
4.24
%
 
4.44
%
 
4.47
%
 
4.43
%
 
4.92
%
 


(0.68
)%
 
90+ days past due as a % of period-end loan receivables(6)
2.10
%
 
2.15
%
 
2.07
%
 
2.16
%
 
2.51
%
 


(0.41
)%
 
Net charge-offs
$
1,125

 
$
1,109

 
$
1,221

 
$
1,331

 
$
1,344

 
$
(219
)
(16.3
)%
 
Loan receivables delinquent over 30 days(6)
$
3,500

 
$
3,874

 
$
3,723

 
$
3,625

 
$
3,957

 
$
(457
)
(11.5
)%
 
Loan receivables delinquent over 90 days(6)
$
1,735

 
$
1,877

 
$
1,723

 
$
1,768

 
$
2,019

 
$
(284
)
(14.1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses (period-end)
$
9,175

 
$
5,602

 
$
5,607

 
$
5,809

 
$
5,942

 
$
3,233

54.4
 %
 
Allowance coverage ratio(7)
11.13
%
 
6.42
%
 
6.74
%
 
7.10
%
 
7.39
%
 


3.74
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BUSINESS METRICS
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(8)(9)
$
32,042

 
$
40,212

 
$
38,395

 
$
38,291

 
$
32,513

 
$
(471
)
(1.4
)%
 
Period-end loan receivables
$
82,469

 
$
87,215

 
$
83,207

 
$
81,796

 
$
80,405

 
$
2,064

2.6
 %
 
Credit cards
$
79,832

 
$
84,606

 
$
79,788

 
$
78,446

 
$
77,251

 
$
2,581

3.3
 %
 
Consumer installment loans
$
1,390

 
$
1,347

 
$
2,050

 
$
1,983

 
$
1,860

 
$
(470
)
(25.3
)%
 
Commercial credit products
$
1,203

 
$
1,223

 
$
1,317

 
$
1,328

 
$
1,256

 
$
(53
)
(4.2
)%
 
Other
$
44

 
$
39

 
$
52

 
$
39

 
$
38

 
$
6

15.8
 %
 
Average loan receivables, including held for sale
$
84,428

 
$
85,376

 
$
90,556

 
$
88,792

 
$
89,903

 
$
(5,475
)
(6.1
)%
 
Period-end active accounts (in thousands)(9)(10)
68,849

 
75,471

 
77,094

 
76,065

 
74,812

 
(5,963
)
(8.0
)%
 
Average active accounts (in thousands)(9)(10)
72,078

 
73,734

 
76,695

 
75,525

 
77,132

 
(5,054
)
(6.6
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIQUIDITY
 
 
 
 
 
 
 
 
 
 
 
 
 
Liquid assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and equivalents
$
13,704

 
$
12,147

 
$
11,461

 
$
11,755

 
$
12,963

 
$
741

5.7
 %
 
Total liquid assets
$
19,225

 
$
17,322

 
$
15,201

 
$
16,665

 
$
17,360

 
$
1,865

10.7
 %
 
Undrawn credit facilities
 
 
 
 
 
 
 
 
 
 
 
 
 
Undrawn credit facilities
$
5,600

 
$
6,050

 
$
6,500

 
$
7,050

 
$
6,050

 
$
(450
)
(7.4
)%
 
Total liquid assets and undrawn credit facilities
$
24,825

 
$
23,372

 
$
21,701

 
$
23,715

 
$
23,410

 
$
1,415

6.0
 %
 
Liquid assets % of total assets
19.61
%
 
16.52
%
 
14.35
%
 
15.66
%
 
16.47
%
 


3.14
 %
 
Liquid assets including undrawn credit facilities % of total assets
25.32
%
 
22.30
%
 
20.48
%
 
22.29
%
 
22.21
%
 


3.11
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.
 

 

2


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
STATEMENTS OF EARNINGS
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
 
Mar 31,
2020
 
Dec 31,
2019
 
Sep 30,
2019
 
Jun 30,
2019
 
Mar 31,
2019
 
1Q'20 vs. 1Q'19
 
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
4,340

 
$
4,492

 
$
4,890

 
$
4,636

 
$
4,687

 
$
(347
)
(7.4
)%
 
Interest on cash and debt securities
67

 
93

 
91

 
102

 
99

 
(32
)
(32.3
)%
 
Total interest income
4,407

 
4,585

 
4,981

 
4,738

 
4,786

 
(379
)
(7.9
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
356

 
383

 
411

 
397

 
375

 
(19
)
(5.1
)%
 
Interest on borrowings of consolidated securitization entities
73

 
80

 
88

 
90

 
100

 
(27
)
(27.0
)%
 
Interest on senior unsecured notes
88

 
93

 
93

 
96

 
85

 
3

3.5
 %
 
Total interest expense
517

 
556

 
592

 
583

 
560

 
(43
)
(7.7
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
3,890

 
4,029

 
4,389

 
4,155

 
4,226

 
(336
)
(8.0
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retailer share arrangements
(926
)
 
(1,029
)
 
(1,016
)
 
(859
)
 
(954
)
 
28

(2.9
)%
 
Provision for credit losses
1,677

 
1,104

 
1,019

 
1,198

 
859

 
818

95.2
 %
 
Net interest income, after retailer share arrangements and provision for credit losses
1,287

 
1,896

 
2,354

 
2,098

 
2,413

 
(1,126
)
(46.7
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interchange revenue
161

 
192

 
197

 
194

 
165

 
(4
)
(2.4
)%
 
Debt cancellation fees
69

 
64

 
64

 
69

 
68

 
1

1.5
 %
 
Loyalty programs
(158
)
 
(181
)
 
(203
)
 
(192
)
 
(167
)
 
9

(5.4
)%
 
Other
25

 
29

 
27

 
19

 
26

 
(1
)
(3.8
)%
 
Total other income
97

 
104

 
85

 
90

 
92

 
5

5.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee costs
324

 
385

 
359

 
358

 
353

 
(29
)
(8.2
)%
 
Professional fees
197

 
199

 
205

 
231

 
232

 
(35
)
(15.1
)%
 
Marketing and business development
111

 
152

 
139

 
135

 
123

 
(12
)
(9.8
)%
 
Information processing
123

 
122

 
127

 
123

 
113

 
10

8.8
 %
 
Other
247

 
221

 
234

 
212

 
222

 
25

11.3
 %
 
Total other expense
1,002

 
1,079

 
1,064

 
1,059

 
1,043

 
(41
)
(3.9
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before provision for income taxes
382

 
921

 
1,375

 
1,129

 
1,462

 
(1,080
)
(73.9
)%
 
Provision for income taxes
96

 
190

 
319

 
276

 
355

 
(259
)
(73.0
)%
 
Net earnings
$
286

 
$
731

 
$
1,056

 
$
853

 
$
1,107

 
$
(821
)
(74.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings available to common stockholders
$
275

 
$
731

 
$
1,056

 
$
853

 
$
1,107

 
$
(832
)
(75.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 


3


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENTS OF FINANCIAL POSITION
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Mar 31,
2020
 
Dec 31,
2019
 
Sep 30,
2019
 
Jun 30,
2019
 
Mar 31,
2019
 
Mar 31, 2020 vs. Mar 31, 2019
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Cash and equivalents
$
13,704

 
$
12,147

 
$
11,461

 
$
11,755

 
$
12,963

 
$
741

5.7
 %
Debt securities
6,146

 
5,911

 
4,584

 
6,147

 
5,506

 
640

11.6
 %
Loan receivables:
 
 
 
 
 
 
 
 
 
 
 
 
Unsecuritized loans held for investment
54,765

 
58,398

 
56,220

 
55,178

 
54,907

 
(142
)
(0.3
)%
Restricted loans of consolidated securitization entities
27,704

 
28,817

 
26,987

 
26,618

 
25,498

 
2,206

8.7
 %
Total loan receivables
82,469

 
87,215

 
83,207

 
81,796

 
80,405

 
2,064

2.6
 %
Less: Allowance for credit losses(1)
(9,175
)
 
(5,602
)
 
(5,607
)
 
(5,809
)
 
(5,942
)
 
(3,233
)
54.4
 %
Loan receivables, net
73,294

 
81,613

 
77,600

 
75,987

 
74,463

 
(1,169
)
(1.6
)%
Loan receivables held for sale
5

 
725

 
8,182

 
8,096

 
8,052

 
(8,047
)
(99.9
)%
Goodwill
1,078

 
1,078

 
1,078

 
1,078

 
1,076

 
2

0.2
 %
Intangible assets, net
1,208

 
1,265

 
1,177

 
1,215

 
1,259

 
(51
)
(4.1
)%
Other assets
2,603

 
2,087

 
1,861

 
2,110

 
2,065

 
538

26.1
 %
Total assets
$
98,038

 
$
104,826

 
$
105,943

 
$
106,388

 
$
105,384

 
$
(7,346
)
(7.0
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposit accounts
$
64,302

 
$
64,877

 
$
65,677

 
$
65,382

 
$
63,787

 
$
515

0.8
 %
Non-interest-bearing deposit accounts
313

 
277

 
295

 
263

 
273

 
40

14.7
 %
Total deposits
64,615

 
65,154

 
65,972

 
65,645

 
64,060

 
555

0.9
 %
Borrowings:
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings of consolidated securitization entities
9,291

 
10,412

 
10,912

 
11,941

 
12,091

 
(2,800
)
(23.2
)%
Senior unsecured notes
7,957

 
9,454

 
9,451

 
9,303

 
9,800

 
(1,843
)
(18.8
)%
Total borrowings
17,248

 
19,866

 
20,363

 
21,244

 
21,891

 
(4,643
)
(21.2
)%
Accrued expenses and other liabilities
4,205

 
4,718

 
4,488

 
4,765

 
4,724

 
(519
)
(11.0
)%
Total liabilities
86,068

 
89,738

 
90,823

 
91,654

 
90,675

 
(4,607
)
(5.1
)%
Equity:
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
734

 
734

 
—

 
—

 
—

 
734

NM

Common stock
1

 
1

 
1

 
1

 
1

 
—

—
 %
Additional paid-in capital
9,523

 
9,537

 
9,520

 
9,500

 
9,489

 
34

0.4
 %
Retained earnings
9,960

 
12,117

 
11,533

 
10,627

 
9,939

 
21

0.2
 %
Accumulated other comprehensive income:
(49
)
 
(58
)
 
(44
)
 
(43
)
 
(56
)
 
7

(12.5
)%
Treasury stock
(8,199
)
 
(7,243
)
 
(5,890
)
 
(5,351
)
 
(4,664
)
 
(3,535
)
75.8
 %
Total equity
11,970

 
15,088

 
15,120

 
14,734

 
14,709

 
(2,739
)
(18.6
)%
Total liabilities and equity
$
98,038

 
$
104,826

 
$
105,943

 
$
106,388

 
$
105,384

 
$
(7,346
)
(7.0
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses ("CECL") that measures the allowance for credit losses based on management’s best estimate of expected credit losses for the life of our loan receivables. Prior periods presented reflect measurement of the allowance based on management’s estimate of probable incurred credit losses in accordance with the previous accounting guidance effective for those periods.

4


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Mar 31, 2020
 
Dec 31, 2019
 
Sep 30, 2019
 
Jun 30, 2019
 
Mar 31, 2019
 
 
 
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
$
12,902

 
$
42

 
1.31
%
 
$
16,269

 
$
68

 
1.66
%
 
$
10,947

 
$
59

 
2.14
%
 
$
10,989

 
$
66

 
2.41
%
 
$
11,033

 
$
65

 
2.39
%
Securities available for sale
5,954

 
25

 
1.69
%
 
4,828

 
25

 
2.05
%
 
5,389

 
32

 
2.36
%
 
6,010

 
36

 
2.40
%
 
5,640

 
34

 
2.44
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan receivables, including held for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit cards
81,716

 
4,272

 
21.03
%
 
81,960

 
4,409

 
21.34
%
 
87,156

 
4,807

 
21.88
%
 
85,488

 
4,557

 
21.38
%
 
86,768

 
4,611

 
21.55
%
Consumer installment loans
1,432

 
35

 
9.83
%
 
2,058

 
48

 
9.25
%
 
2,022

 
48

 
9.42
%
 
1,924

 
44

 
9.17
%
 
1,844

 
42

 
9.24
%
Commercial credit products
1,243

 
33

 
10.68
%
 
1,311

 
34

 
10.29
%
 
1,329

 
35

 
10.45
%
 
1,330

 
34

 
10.25
%
 
1,252

 
34

 
11.01
%
Other
37

 
—

 
—
%
 
47

 
1

 
NM

 
49

 
—

 
—
%
 
50

 
1

 
NM

 
39

 
—

 
—
%
Total loan receivables, including held for sale
84,428

 
4,340

 
20.67
%
 
85,376

 
4,492

 
20.87
%
 
90,556

 
4,890

 
21.42
%
 
88,792

 
4,636

 
20.94
%
 
89,903

 
4,687

 
21.14
%
Total interest-earning assets
103,284

 
4,407

 
17.16
%
 
106,473

 
4,585

 
17.08
%
 
106,892

 
4,981

 
18.49
%
 
105,791

 
4,738

 
17.96
%
 
106,576

 
4,786

 
18.21
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
1,450

 
 
 
 
 
1,326

 
 
 
 
 
1,374

 
 
 
 
 
1,271

 
 
 
 
 
1,335

 
 
 
 
Allowance for credit losses
(8,708
)
 
 
 
 
 
(5,593
)
 
 
 
 
 
(5,773
)
 
 
 
 
 
(5,911
)
 
 
 
 
 
(6,341
)
 
 
 
 
Other assets
4,696

 
 
 
 
 
3,872

 
 
 
 
 
3,920

 
 
 
 
 
3,752

 
 
 
 
 
3,729

 
 
 
 
Total non-interest-earning assets
(2,562
)
 
 
 
 
 
(395
)
 
 
 
 
 
(479
)
 
 
 
 
 
(888
)
 
 
 
 
 
(1,277
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
100,722

 
 
 
 
 
$
106,078

 
 
 
 
 
$
106,413

 
 
 
 
 
$
104,903

 
 
 
 
 
$
105,299

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposit accounts
$
64,366

 
$
356

 
2.22
%
 
$
65,380

 
$
383

 
2.32
%
 
$
65,615

 
$
411

 
2.49
%
 
$
64,226

 
$
397

 
2.48
%
 
$
63,776

 
$
375

 
2.38
%
Borrowings of consolidated securitization entities
9,986

 
73

 
2.94
%
 
10,831

 
80

 
2.93
%
 
11,770

 
88

 
2.97
%
 
11,785

 
90

 
3.06
%
 
13,407

 
100

 
3.02
%
Senior unsecured notes
8,807

 
88

 
4.02
%
 
9,452

 
93

 
3.90
%
 
9,347

 
93

 
3.95
%
 
9,543

 
96

 
4.03
%
 
8,892

 
85

 
3.88
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing liabilities
83,159

 
517

 
2.50
%
 
85,663

 
556

 
2.58
%
 
86,732

 
592

 
2.71
%
 
85,554

 
583

 
2.73
%
 
86,075

 
560

 
2.64
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing deposit accounts
299

 
 
 
 
 
281

 
 
 
 
 
283

 
 
 
 
 
271

 
 
 
 
 
286

 
 
 
 
Other liabilities
4,672

 
 
 
 
 
4,906

 
 
 
 
 
4,570

 
 
 
 
 
4,260

 
 
 
 
 
4,148

 
 
 
 
Total non-interest-bearing liabilities
4,971

 
 
 
 
 
5,187

 
 
 
 
 
4,853

 
 
 
 
 
4,531

 
 
 
 
 
4,434

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities
88,130

 
 
 
 
 
90,850

 
 
 
 
 
91,585

 
 
 
 
 
90,085

 
 
 
 
 
90,509

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total equity
12,592

 
 
 
 
 
15,228

 
 
 
 
 
14,828

 
 
 
 
 
14,818

 
 
 
 
 
14,790

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities and equity
$
100,722

 
 
 
 
 
$
106,078

 
 
 
 
 
$
106,413

 
 
 
 
 
$
104,903

 
 
 
 
 
$
105,299

 
 
 
 
Net interest income
 
 
$
3,890

 
 
 
 
 
$
4,029

 
 
 
 
 
$
4,389

 
 
 
 
 
$
4,155

 
 
 
 
 
$
4,226

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread(1)
 
 
 
 
14.66
%
 
 
 
 
 
14.50
%
 
 
 
 
 
15.78
%
 
 
 
 
 
15.23
%
 
 
 
 
 
15.57
%
Net interest margin(2)
 
 
 
 
15.15
%
 
 
 
 
 
15.01
%
 
 
 
 
 
16.29
%
 
 
 
 
 
15.75
%
 
 
 
 
 
16.08
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.

5


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions, except per share statistics)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Mar 31,
2020
 
Dec 31,
2019
 
Sep 30,
2019
 
Jun 30,
2019
 
Mar 31,
2019
 
Mar 31, 2020 vs.
Mar 31, 2019
BALANCE SHEET STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
Total common equity
$
11,236

 
$
14,354

 
$
15,120

 
$
14,734

 
$
14,709

 
$
(3,473
)
(23.6
)%
Total common equity as a % of total assets
11.46
%
 
13.69
%
 
14.27
%
 
13.85
%
 
13.96
%
 

(2.50
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Tangible assets
$
95,752

 
$
102,483

 
$
103,688

 
$
104,095

 
$
103,049

 
$
(7,297
)
(7.1
)%
Tangible common equity(1)
$
8,950

 
$
12,011

 
$
12,865

 
$
12,441

 
$
12,374

 
$
(3,424
)
(27.7
)%
Tangible common equity as a % of tangible assets(1)
9.35
%
 
11.72
%
 
12.41
%
 
11.95
%
 
12.01
%
 

(2.66
)%
Tangible common equity per share(1)
$
15.35

 
$
19.50

 
$
19.68

 
$
18.60

 
$
17.96

 
$
(2.61
)
(14.5
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
REGULATORY CAPITAL RATIOS(2)(3)
 
 
 
 
 
 
 
 
 
 
 
 

Basel III - CECL Transition
 
Basel III
 
 
 
Total risk-based capital ratio(4)
16.5
%
 
16.3
%
 
15.8
%
 
15.6
%
 
15.8
%
 
 
 
Tier 1 risk-based capital ratio(5)
15.2
%
 
15.0
%
 
14.5
%
 
14.3
%
 
14.5
%
 
 
 
Tier 1 leverage ratio(6)
12.3
%
 
12.6
%
 
12.6
%
 
12.4
%
 
12.3
%
 
 
 
Common equity Tier 1 capital ratio
14.3
%
 
14.1
%
 
14.5
%
 
14.3
%
 
14.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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, 2020 are preliminary and therefore subject to change.
(3) Capital ratios at 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.



 
 
 
 
 
 
 
 
 
 
 
 
 

6


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
PLATFORM RESULTS
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Mar 31,
2020
 
Dec 31,
2019
 
Sep 30,
2019
 
Jun 30,
2019
 
Mar 31,
2019
 
1Q'20 vs. 1Q'19
RETAIL CARD
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1)(2)
$
24,008

 
$
30,968

 
$
29,282

 
$
29,530

 
$
24,660

 
$
(652
)
(2.6
)%
Period-end loan receivables
$
52,390

 
$
56,387

 
$
52,697

 
$
52,307

 
$
51,572

 
$
818

1.6
 %
Average loan receivables, including held for sale
$
53,820

 
$
54,505

 
$
60,660

 
$
59,861

 
$
60,964

 
$
(7,144
)
(11.7
)%
Average active accounts (in thousands)(2)(3)
53,018

 
54,662

 
58,082

 
57,212

 
58,632

 
(5,614
)
(9.6
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
3,037

 
$
3,143

 
$
3,570

 
$
3,390

 
$
3,454

 
$
(417
)
(12.1
)%
Other income
$
59

 
$
77

 
$
65

 
$
59

 
$
76

 
$
(17
)
(22.4
)%
Retailer share arrangements
$
(904
)
 
$
(988
)
 
$
(998
)
 
$
(836
)
 
$
(940
)
 
$
36

(3.8
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
PAYMENT SOLUTIONS
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1)(2)
$
5,375

 
$
6,402

 
$
6,281

 
$
5,948

 
$
5,249

 
$
126

2.4
 %
Period-end loan receivables
$
19,973

 
$
20,528

 
$
20,478

 
$
19,766

 
$
19,379

 
$
594

3.1
 %
Average loan receivables, including held for sale
$
20,344

 
$
20,701

 
$
20,051

 
$
19,409

 
$
19,497

 
$
847

4.3
 %
Average active accounts (in thousands)(2)(3)
12,681

 
12,713

 
12,384

 
12,227

 
12,406

 
275

2.2
 %
 

 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
706

 
$
737

 
$
721

 
$
685

 
$
686

 
$
20

2.9
 %
Other income
$
13

 
$
4

 
$
(1
)
 
$
11

 
$
1

 
$
12

NM

Retailer share arrangements
$
(18
)
 
$
(37
)
 
$
(15
)
 
$
(21
)
 
$
(12
)
 
$
(6
)
50.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
CARECREDIT
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1)
$
2,659

 
$
2,842

 
$
2,832

 
$
2,813

 
$
2,604

 
$
55

2.1
 %
Period-end loan receivables
$
10,106

 
$
10,300

 
$
10,032

 
$
9,723

 
$
9,454

 
$
652

6.9
 %
Average loan receivables, including held for sale
$
10,264

 
$
10,170

 
$
9,845

 
$
9,522

 
$
9,442

 
$
822

8.7
 %
Average active accounts (in thousands)(3)
6,379

 
6,359

 
6,229

 
6,086

 
6,094

 
285

4.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
597

 
$
612

 
$
599

 
$
561

 
$
547

 
$
50

9.1
 %
Other income
$
25

 
$
23

 
$
21

 
$
20

 
$
15

 
$
10

66.7
 %
Retailer share arrangements
$
(4
)
 
$
(4
)
 
$
(3
)
 
$
(2
)
 
$
(2
)
 
$
(2
)
100.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL SYF
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1)(2)
$
32,042

 
$
40,212

 
$
38,395

 
$
38,291

 
$
32,513

 
$
(471
)
(1.4
)%
Period-end loan receivables
$
82,469

 
$
87,215

 
$
83,207

 
$
81,796

 
$
80,405

 
$
2,064

2.6
 %
Average loan receivables, including held for sale
$
84,428

 
$
85,376

 
$
90,556

 
$
88,792

 
$
89,903

 
$
(5,475
)
(6.1
)%
Average active accounts (in thousands)(2)(3)
72,078

 
73,734

 
76,695

 
75,525

 
77,132

 
(5,054
)
(6.6
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
4,340

 
$
4,492

 
$
4,890

 
$
4,636

 
$
4,687

 
$
(347
)
(7.4
)%
Other income
$
97

 
$
104

 
$
85

 
$
90

 
$
92

 
$
5

5.4
 %
Retailer share arrangements
$
(926
)
 
$
(1,029
)
 
$
(1,016
)
 
$
(859
)
 
$
(954
)
 
$
28

(2.9
)%
(1) 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.
(2) Includes activity and balances associated with loan receivables held for sale.
(3) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.



7


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES(1)
 
 
(unaudited, $ in millions, except per share statistics)
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Mar 31,
2020
 
Dec 31,
2019
 
Sep 30,
2019
 
Jun 30,
2019
 
Mar 31,
2019
COMMON EQUITY AND REGULATORY CAPITAL MEASURES(2)
 
 
 
 
 
 
 
 
 
GAAP Total equity
$
11,970

 
$
15,088

 
$
15,120

 
$
14,734

 
$
14,709

Less: Preferred stock
(734
)
 
(734
)
 
—

 
—

 
—

Less: Goodwill
(1,078
)
 
(1,078
)
 
(1,078
)
 
(1,078
)
 
(1,076
)
Less: Intangible assets, net
(1,208
)
 
(1,265
)
 
(1,177
)
 
(1,215
)
 
(1,259
)
Tangible common equity
$
8,950

 
$
12,011

 
$
12,865

 
$
12,441

 
$
12,374

Add: CECL transition amount
2,417

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss)
304

 
319

 
290

 
283

 
287

Common equity Tier 1
$
11,671

 
$
12,330

 
$
13,155

 
$
12,724

 
$
12,661

Preferred stock
734

 
734

 
—

 
—

 
—

Tier 1 capital
$
12,405

 
$
13,064

 
$
13,155

 
$
12,724

 
$
12,661

 
 
 
 
 
 
 
 
 
 
Add: Allowance for credit losses includible in risk-based capital
1,082

 
1,147

 
1,190

 
1,169

 
1,152

Total Risk-based capital
$
13,487

 
$
14,211

 
$
14,345

 
$
13,893

 
$
13,813

 
 
 
 
 
 
 
 
 
 
ASSET MEASURES(2)
 
 
 
 
 
 
 
 
 
Total average assets
$
100,722

 
$
106,078

 
$
106,413

 
$
104,903

 
$
105,299

Adjustments for:
 
 
 
 
 
 
 
 
 
Add: CECL transition amount
2,417

 
—

 
—

 
—

 
—

Disallowed goodwill and other disallowed intangible assets
(net of related deferred tax liabilities) and other
(2,010
)
 
(2,059
)
 
(1,975
)
 
(2,003
)
 
(2,039
)
Total assets for leverage purposes
$
101,129

 
$
104,019

 
$
104,438

 
$
102,900

 
$
103,260

 
 
 
 
 
 
 
 
 
 
Risk-weighted assets
$
81,639

 
$
87,302

 
$
90,772

 
$
88,890

 
$
87,331

 
 
 
 
 
 
 
 
 
 
CECL FULLY PHASED-IN CAPITAL MEASURES
 
 
 
 
 
 
 
 
 
Tier 1 capital
$
12,405

 
$
13,064

 
$
13,155

 
$
12,724

 
$
12,661

Less: CECL transition adjustment
(2,417
)
 
—

 
—

 
—

 
—

Tier 1 capital (CECL fully phased-in)
$
9,988

 
$
13,064

 
$
13,155

 
$
12,724

 
$
12,661

Add: Allowance for credit losses
9,175

 
5,602

 
5,607

 
5,809

 
5,942

Tier 1 capital (CECL fully phased-in) + Reserves for credit losses
$
19,163

 
$
18,666

 
$
18,762

 
$
18,533

 
$
18,603

 
 
 
 
 
 
 
 
 
 
Risk-weighted assets
$
81,639

 
$
87,302

 
$
90,772

 
$
88,890

 
$
87,331

Less: CECL transition adjustment
(2,204
)
 
—

 
—

 
—

 
—

Risk-weighted assets (CECL fully phased-in)
$
79,435

 
$
87,302

 
$
90,772

 
$
88,890

 
$
87,331

 
 
 
 
 
 
 
 
 
 
TANGIBLE COMMON EQUITY PER SHARE
 
 
 
 
 
 
 
 
 
GAAP book value per share
$
19.27

 
$
23.31

 
$
23.13

 
$
22.03

 
$
21.35

Less: Goodwill
(1.85
)
 
(1.75
)
 
(1.65
)
 
(1.61
)
 
(1.56
)
Less: Intangible assets, net
(2.07
)
 
(2.06
)
 
(1.80
)
 
(1.82
)
 
(1.83
)
Tangible common equity per share
$
15.35

 
$
19.50

 
$
19.68

 
$
18.60

 
$
17.96

 
 
 
 
 
 
 
 
 
 
(1) Regulatory measures at March 31, 2020 are presented on an estimated basis.
(2) Capital ratios at 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.


8


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
RECONCILIATION OF NON-GAAP MEASURES (Continued)
 
 
(unaudited, $ in millions, except per share statistics)
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Mar 31,
2020
 
Dec 31,
2019
 
Sep 30,
2019
 
Jun 30,
2019
 
Mar 31,
2019
ALLOWANCE FOR LOAN LOSSES (1)
 
 
 
 
 
 
 
 
 
Allowance for credit losses
$
9,175

 
N/A

 
N/A

 
N/A

 
N/A

Less: Impact from CECL(2)
(3,122
)
 
—

 
—

 
—

 
—

Allowance for loan losses(1)
$
6,053

 
$
5,602

 
$
5,607

 
$
5,809

 
$
5,942

 
 
 
 
 
 
 
 
 
 
ALLOWANCE FOR LOAN LOSSES AS A % OF PERIOD-END LOAN RECEIVABLES
 
 
 
 
 
 
 
 
 
Allowance for credit losses as a % of period-end loan receivables
11.13
 %
 
N/A

 
N/A

 
N/A

 
N/A

Less: Impact from CECL(2)
(3.79
)%
 
—
%
 
—
%
 
—
%
 
—
%
Allowance for loan losses as a % of period-end loan receivables
7.34
 %
 
6.42
%
 
6.74
%
 
7.10
%
 
7.39
%
 
 
 
 
 
 
 
 
 
 
CORE PURCHASE VOLUME
 
 
 
 
 
 
 
 
 
Purchase Volume
$
32,042

 
$
40,212

 
$
38,395

 
$
38,291

 
$
32,513

Less: Walmart and Yamaha Purchase volume
—

 
(267
)
 
(2,381
)
 
(2,512
)
 
(2,151
)
Core Purchase volume
$
32,042

 
$
39,945

 
$
36,014

 
$
35,779

 
$
30,362

 
 
 
 
 
 
 
 
 
 
CORE LOAN RECEIVABLES
 
 
 
 
 
 
 
 
 
Loan receivables
$
82,469

 
$
87,215

 
$
83,207

 
$
81,796

 
$
80,405

Less: Walmart and Yamaha Loan receivables
—

 
(3
)
 
(872
)
 
(1,188
)
 
(1,420
)
Core Loan receivables
$
82,469

 
$
87,212

 
$
82,335

 
$
80,608

 
$
78,985

 
 
 
 
 
 
 
 
 
 
Retail Card Loan receivables
$
52,390

 
$
56,387

 
$
52,697

 
$
52,307

 
$
51,572

Less: Walmart Loan receivables
—

 
—

 
(112
)
 
(431
)
 
(692
)
Core Loan receivables
$
52,390

 
$
56,387

 
$
52,585

 
$
51,876

 
$
50,880

 
 
 
 
 
 
 
 
 
 
Payment Solutions Loan receivables
$
19,973

 
$
20,528

 
$
20,478

 
$
19,766

 
$
19,379

Less: Yamaha Loan receivables
—

 
(3
)
 
(760
)
 
(757
)
 
(728
)
Core Loan receivables
$
19,973

 
$
20,525

 
$
19,718

 
$
19,009

 
$
18,651

 
 
 
 
 
 
 
 
 
 
CORE AVERAGE ACTIVE ACCOUNTS (in thousands)
 
 
 
 
 
 
 
 
 
Average active accounts (in thousands)
72,078

 
73,734

 
76,695

 
75,525

 
77,132

Less: Walmart and Yamaha average Active accounts (in thousands)
—

 
(1,777
)
 
(7,001
)
 
(7,215
)
 
(7,618
)
Core Average active accounts (in thousands)
72,078

 
71,957

 
69,694

 
68,310

 
69,514

 
 
 
 
 
 
 
 
 
 
CORE INTEREST AND FEES ON LOANS
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
4,340

 
$
4,492

 
$
4,890

 
$
4,636

 
$
4,687

Less: Walmart and Yamaha Interest and fees on loans
—

 
(69
)
 
(531
)
 
(520
)
 
(549
)
Core Interest and fees on loans
$
4,340

 
$
4,423

 
$
4,359

 
$
4,116

 
$
4,138

 
 
 
 
 
 
 
 
 
 
(1) Beginning in 1Q'20, allowance for loan losses is calculated based upon accounting standards no longer effective, and as such is a Non-GAAP measure.
(2) Impact from CECL reflects the additional allowance for credit losses recorded in accordance with ASC 2016-13, as compared to the allowance for credit losses required had the prior accounting guidance been applied.


9

Exhibit 99.3 1Q’20 Financial Results April 21, 2020

 
Disclaimers Cautionary Statement Regarding Forward-Looking Statements The following slides are part of a presentation by Synchrony Financial in connection with reporting quarterly financial results. No representation is made that the information in these slides is complete. For additional information, see the earnings release and financial supplement included as exhibits to our Current Report on Form 8-K filed today and available on our website (www.synchronyfinancial.com) and the SEC's website (www.sec.gov). All references to net earnings and net income are intended to have the same meaning. This presentation 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 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 new 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; a material indemnification obligation to GE under the Tax Sharing and Separation Agreement with GE if we cause the split-off from GE or certain preliminary transactions to fail to qualify for tax-free treatment or in the case of certain significant transfers of our stock following the split-off; 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 presentation 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, 2019, as filed on February 13, 2020, and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as filed on April 21, 2020. 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. 2

 
1Q’20 Highlights Financial Highlights COVID-19 Response We have taken action to ensure the health and safety of our • $286 million Net earnings, $0.45 diluted EPS employees, and stabilized our operations while mitigating the ‒ Increase in provision for credit losses for the quarter uncertainty and financial pressures faced by consumers and included impact from CECL implementation of $101 our partners million, or $76 million after-tax, which equates to an EPS Supporting our Associates: reduction of $0.13 – Implementing 100% work from home for all • Solid Core Growth metrics(a) in 1Q’20 employees including our contact centers – Enhanced benefits including virtual doctor visits (no ‒ Loan receivables up 3%; up 4% on a Core basis cost) and expanded childcare & healthcare coverage ‒ Interest and fees on loans down 7%; up 5% on a Core – Providing financial planning and employee basis assistance & wellness programs ‒ Purchase volume down 1%; up 6% on a Core basis Serving our Consumers: – ‒ Average active accounts down 7%; up 4% on a Core basis Supporting those who may be experiencing financial hardship, which may include waiving minimum • Net charge-offs 5.36% compared to 6.06% in the prior year payments, fees & charges – Extending promotional financing periods • Provision for credit losses up 95% primarily driven by prior Serving our Partners: year reserve reduction related to Walmart and reserve increase for projected impact of COVID-19 related losses – Leveraging digital capabilities to help our partners continue to serve their customers • Efficiency ratio 32.7% compared to 31.0% in the prior year – Providing education resources, launched charitable giving campaign and are waiving certain fees • Deposits up $0.5 billion compared to prior year Caring for our Communities: • Strong capital and liquidity – Committed $5 million to help local and national ‒ 14.3% CET1 & $19.2 billion liquid assets organizations to assist those areas most affected by Coronavirus (focusing on food and PPE) ‒ Returned $1.1 billion in capital through $1.0 billion of share – Launched Synchrony #GearUp leveraging our repurchases and $135 million in common stock dividends employee, partner and cardholder networks to make & distribute PPE including 3D printing of masks (a) Growth Metrics shown above on a Core basis are non-GAAP measures and excludes from the prior year amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively. See non-GAAP reconciliation in the appendix. 3

 
COVID-19 Impact on Sales Purchase Volume Growth (a) World Sales by Category (b,c) % in YoY Growth Rates % in YoY Growth Rates 13% 14% 11% 10% Grocery Stores 35% Non Grocery Food 12% 22% January February March 1-17 Drug Stores 9% 16% Discount Stores 11% (26)% 16% March (b) Restaurants 16% World Sales Growth 18-31 (9)% % in YoY Growth Rates Entertainment 17% 15% (8)% 12% 14% Gas 22% (3)% Travel 11% (34)% January February March 1-17 Pre-Travel Restriction 1/1/20 - 1/28/20 Post-Travel Restriction 1/29/20 - 3/31/20 Restaurants, Entertainment, Gas, and Travel = (27)% 27% of 2019 Retail Card consumer world sales March 18-31 (a) Purchase volume growth rates excludes from both the prior year and the current year amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively. (b) World sales that occur on a Dual Card or Co-Brand card anywhere other than where the card was originated and excludes from the prior year amounts related to the Walmart portfolio sold in October 2019 4 (c) World sales are for consumer sales from our Retail Card platform (excluding from the prior year amounts related to the Walmart portfolio sold in October 2019) for the four categories with the largest positive, and the four categories with the largest negative change in growth rate pre- and post-travel restriction

 
Focus on Higher Quality Asset Base Stronger Portfolio Disciplined Underwriting Improving Purchase Volume Mix (a) (a) Consumer FICO FICO, consumer accounts opened Consumer FICO since beginning of 2010 2008 1Q'20 1Q'16 1Q'20 36% 37% 65% 61% 33% 721+ 45% 28% 20% 19% 18% 661-720 36% 26% 23% 9% 11% 10% 601-660 18% 2% 2% ≤ 600 1% <600 601-660 661-720 721+ At Origination <600 601-660 661-720 721+ Advanced Underwriting Acquisition: Account Management: • Utilizing up to 16 different data sources and more than 4,000 attributes to evaluate credit worthiness and authenticate • Utilizing internal and credit bureau triggers to dynamically customer identity reevaluate a customer’s credit worthiness to manage credit • Employing a multi-algorithmic approach to target specific exposure outcomes – credit, fraud, synthetic id’s, and other malicious • Leveraging the latest technology to passively authenticate behavior customers and more selectively target high risk behavior • Leveraging client specific data to use customer engagement with our partners to assign credit lines (a) Based on most recent FICO scores available for our customers in each period, weighted by balance, as a % of period-end receivables. If FICO score was not available, credit bureau 5 based scores were mapped to a FICO equivalent. If neither score was available, the account was excluded.

 
Historical Net Charge-Offs, Risk-Adjusted Yield, and RSAs (a) Net Charge-Off Ratio Delivered Strong Risk-Adjusted Returns; 12.00% RSAs Act as Countercyclical Buffer SYF • Net charge-off performance was generally 10.00% Bank Card Average consistent with general purpose card issuers 8.00% during the financial crisis • Risk-adjusted yield outperformed general purpose off Ratio 6.00% - card issuers by >700 bps through the financial crisis 4.00% • Risk-adjusted yield outperformance has remained 2.00% >600 bps post-crisis Net Net Charge • RSAs as a % of average receivables declined to 0.00% 1.60% in 2009 vs. the average of 4.43% from 2013- 2016 Risk-Adjusted Yield Historical RSA Performance 18.00% 5.00% 4.43% 16.00% 4.50% 14.00% 4.00% 3.50% 12.00% 3.00% 10.00% 2.50% 8.00% 2.00% 6.00% Adjusted Adjusted Yield 1.50% - SYF RSA/Average Receivables 4.00% 1.00% Risk 2.00% Bank Card Average RSA/Average Receivables 0.50% RSA %: 2013-2016 Average 0.00% 0.00% (a) Data on a managed-basis for 2009. See non-GAAP reconciliation in appendix. Sources: Company filings. See calculation descriptions of bank card averages in appendix. 6

 
Financial Results Summary earnings statement 1Q’20 Highlights B/(W) $ in millions, except per share statistics 1Q’20 1Q’19 $ % • $286 million Net earnings, $0.45 diluted EPS Total interest income $4,407 $4,786 $(379) (8)% • Net interest income down 8% driven by the Walmart sale Total interest expense 517 560 43 8% − Interest and fees on loans down 7% driven by the Net interest income (NII) 3,890 4,226 (336) (8)% Walmart sale Retailer share arrangements (RSA) (926) (954) 28 3% − Interest expense decrease driven primarily by lower benchmark rates Provision for credit losses 1,677 859 (818) (95)% • Retailer share arrangements down 3% Other income 97 92 5 5% • Provision for credit losses up 95% Other expense 1,002 1,043 41 4% − Increase is primarily driven by prior year reserve Pre-Tax earnings 382 1,462 (1,080) (74)% reduction related to Walmart and reserve increase for projected impact of COVID-19 Provision for income taxes 96 355 259 73% related losses Net earnings 286 1,107 (821) (74)% − Net charge-offs of 5.36% compared to 6.06% in Preferred dividends 11 0 (11) NM the prior year primarily driven by the Walmart sale • Other expense down 4% Net earnings available to common $275 $1,107 $(832) (75)% stockholders Diluted earnings per share $0.45 $1.56 $(1.11) 7

 
Growth Metrics Purchase volume (1)% Loan receivables +3% $ in billions $ in billions $32.5 $32.0 $80.4 $82.5 Core (a) $30.4 $32.0 +6% Core (a) $79.0 $82.5 +4% 1Q'19 1Q'20 1Q'19 1Q'20 Dual Card / Dual Card / (b) $11.4 $12.3 +8% (b) $18.7 $19.9 +6% Co-Brand Co-Brand Average active accounts (7)% Interest and fees on loans (7)% in millions $ in millions 77.1 $4,687 72.1 $4,340 Core (a) 69.5 72.1 +4% Core (a) $4,138 $4,340 +5% 1Q'19 1Q'20 1Q'19 1Q'20 a) Financial measures shown above on a Core basis are non-GAAP measures. See non-GAAP reconciliation in the appendix. b) Dual Card / Co-Brand Purchase volume and Loan receivables shown above are consumer only and excludes from the prior year amounts related to the Walmart portfolio. 8

 
Platform Results(a) Retail Card Payment Solutions CareCredit Loan receivables, $ in billions Loan receivables, $ in billions Loan receivables, $ in billions +2% +3% +7% $20.0 $10.1 $51.5 $52.4 $19.4 $9.5 Core(b) $50.8 $52.4 +3% $18.7 $20.0 +7% 1Q'19 1Q'20 V% 1Q'19 1Q'20 V% 1Q'19 1Q'20 V% Purchase volume $24.7 $23.9 (3)% $5.2 $5.4 +2% $2.6 $2.7 +2% Accounts 58.6 53.0 (10)% 12.4 12.7 +2% 6.1 6.4 +5% Interest and $3,454 $3,037 (12)% $686 $706 +3% $547 $597 +9% fees on loans • Core receivable growth primarily • Strong growth led by home • Strong growth led by dental and driven by digital partners furnishings and home specialty veterinary • Interest and Fees on Loans down • Interest and Fees on Loans up 3% • Interest and Fees on Loans up 9% 12% driven primarily by the driven by receivable growth driven by receivable growth Walmart sale (a) Accounts represent average active accounts in millions, which are credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month. Purchase volume $ in billions and Interest and fees on loans $ in millions. (b) Loan receivables shown above on a Core basis is a non-GAAP measure. See non-GAAP reconciliation in the appendix. 9

 
Net Interest Income Net interest income $ in millions, % of average interest-earning assets 1Q’20 Highlights (8)% • Net interest income decreased 8% compared to prior year driven by the Walmart sale $4,226 $3,890 − Interest and fees on loans decreased 7% compared to prior year driven by the Walmart sale • Net interest margin down 93bps. − Loan receivables mix as a percent of total Earning Assets decreased from 84.4% to 81.7% 16.08% driven by the proceeds of the Walmart sale 15.15% − Loan receivables yield 20.67%, down 47bps. versus prior year primarily driven by the Walmart sale − Total interest-bearing liabilities cost decreased 14bps. to 2.50%, due primarily to lower benchmark rates 1Q'19 1Q'20 10

 
Asset Quality Metrics 30+ days past due Net charge-offs $ in millions, % of period-end loan receivables $ in millions, % of average loan receivables including held for sale $4,430 $1,344 $4,021 $3,957 $3,874 $1,331 $3,723 $1,248 $1,221 $3,521 $3,625 $3,500 $1,198 $1,159 $3,293 $1,087 $1,109 $1,125 4.92% 4.52% 4.59% 4.76% (a) 4.17% 4.43% 4.47% 4.44% 4.24% 6.14% 5.97% 5.54% 6.06% 6.01% (a) 4.97% 5.35% 5.15% 5.36% 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 90+ days past due Allowance for credit losses(b) $ in millions, % of period-end loan receivables $ in millions, % of period-end loan receivables $9,175 $2,135 $2,019 $1,833 $1,877 $1,776 $1,768 $1,723 $1,735 11.13% $1,561 $6,427 $5,859 $6,223 $5,942 $5,738 $5,809 $5,607 $5,602 7.37% 7.43% 7.39% $6,053 7.11% 6.90% 7.10% 6.74% 2.51% 6.42% 2.28% 2.29% (a) 1.98% 2.09% 2.16% 2.07% 2.15% 2.10% 7.34% 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 (a) Excluding the Walmart Portfolio, 1Q’20 30+ rate was down ~15ps versus 1Q’19; 1Q’20 net charge-off rate was down ~15bps versus 1Q’19; 1Q’20 90+ rate was down ~5bps versus 1Q’19 (b) Allowance for credit losses reflects adoption of CECL on January 1, 2020, which included a $3.0 billion increase in reserves upon adoption. For comparability purposes, allowance for 11 loan losses at 1Q'20 is also presented. This measure reflects the prior accounting guidance and is a non-GAAP measure at 1Q'20. See non-GAAP reconciliation in appendix.

 
Other Expense Other expense $ in millions (4)% 1Q’20 Highlights $1,043 $1,002 • Other expense down 4% • Efficiency ratio increased 1.7pts to 32.7% – Other expense was negatively impacted by operational losses and certain expenditures related to our response to COVID-19 – Excluding these impacts, efficiency ratio was flat compared to the prior year 1Q'19 1Q'20 V$ V% Employee costs $353 $324 $(29) (8)% Professional fees 232 197 (35) (15)% Marketing/BD 123 111 (12) (10)% Information processing 113 123 10 9% Other 222 247 25 11% Other expense $1,043 $1,002 $(41) (4)% (a) Efficiency 31.0% 32.7% 1.7 pts. (a) “Other expense” divided by sum of “NII” plus “Other income” less “Retailer share arrangements (RSA)” 12

 
Funding, Capital and Liquidity Funding sources Capital ratios (b) $ in billions CET1 Capital Ratio $86.0 $81.9 V$ $9.8 14.5% 14.3% Unsecured $8.0 $(1.8) Securitization $12.1 $9.3 $(2.8) 1Q’19 1Q’20 Transition Deposits $64.1 $64.6 +$0.5 Tier 1 Capital Ratio 14.5% 15.2% 1Q'19 1Q'20 Variance 1Q’19 1Q’20 Deposits 75% 79% +4 pts. Total Capital Ratio Transition Securitization 14% 11% (3) pts. 15.8% 16.5% Unsecured 11% 10% (1) pts. Liquidity (a) $24.8 $ in billions $23.4 1Q’19 1Q’20 Tier 1 Capital + (c) Transition Credit Loss Reserve Ratio 21.3% 24.1% 1Q'19 1Q'20 Liquid assets $17.4 $19.2 Undrawn credit facilities 6.0 5.6 Total liquidity $23.4 $24.8 1Q’19 1Q’20 % of Total assets 22.2% 25.3% Fully Phased-in (a) Does not include unencumbered assets in the Bank that could be pledged (b) Capital ratios 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 13 (c) The “Tier 1 Capital + Reserves Ratio” is the sum of our “Tier 1 Capital” and “Allowance for Credit Losses,” divided by our “Total Risk-Weighted Assets”. For 1Q’20, both Tier 1 Capital and Risk-Weighted Assets are adjusted to reflect the fully phased-in impact of CECL. These adjusted metrics are non-GAAP measures, see non-GAAP reconciliation in appendix.

 
1Q’20 Wrap Up • Net earnings of $286 million … $0.45 diluted earnings per share • Increase in provision for credit losses for the quarter included impact from CECL implementation of $101 million, or $76 million after-tax, which equates to an EPS reduction of $0.13 • Significant actions taken in response to COVID-19 • Full work at home plan for all Synchrony employees including expanded health benefits • Consumer relief actions for impacted cardholders • Enablement of sales and support of merchant / provider sales & digital efforts • Given the implications stemming from COVID-19, previously provided guidance should no longer be relied upon • Solid Core Growth metrics(a) … Purchase volume +6%, Loan receivables +4%, Average Active Accounts +4%, Interest and fees on loans +5% • Extended and renewed several key relationships and continue to work with both Verizon and Venmo to prepare for launches later this year • Strong deposit platform … deposits at $64.6 billion comprising 79% of funding • Returned $1.1 billion in capital through $1.0 billion of share repurchases and $135 million in dividends • Strong balance sheet, 14.3% CET1 and $19.2 billion of liquid assets (a) Growth Metrics shown above on a Core basis are non-GAAP measures and excludes from both the prior year and the current year amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively. See non-GAAP reconciliation in the appendix. 14

 
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Appendix a) Net Charge-Off Ratio bank card average peers include: AXP U.S. Card Services prior to 2014 and AXP U.S. Consumer Services starting in 2014, BAC U.S. Credit Card, C Citi-Branded Cards North America, COF Domestic Card, DFS Credit Card, JPM Credit Card, and WFC Consumer Credit Card. SYF – total company level. Risk Adjusted Yield bank card average peers include: BAC U.S. Credit Card, C Citi-Branded Cards North America, COF Domestic Card, DFS Credit Card, and WFC Consumer Credit Card. SYF – total company level. SYF yield calculated as loan receivable yield less net charge- off rate. Peer information calculated as credit card yield less net charge-off rate on credit cards. Citi-Branded Card yield calculated as average quarterly yield less net charge-off rate on credit cards (average quarterly net charge-off rate). 16

 
Non-GAAP Reconciliation(a) The following table sets forth the components of our Growth Metrics and impact from CECL for the periods indicated below. At March 31, Total Retail Card Payment Solutions 2019 2020 2019 2020 2019 2020 Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $80.4 $82.5 $51.5 $52.4 $19.4 $20.0 Less: Walmart and Yamaha Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . (1.4) - (0.7) - (0.7) - Core Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $79.0 $82.5 $50.8 $52.4 $18.7 $20.0 Allowance for credit losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,942 $9,175 Less: 1Q’20 impact from CECL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (3,122) Allowance for loan losses . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,942 $6,053 Allowance for credit losses as a % of period-end loan receivables . . . . . . . . 7.39% 11.13% Less: 1Q’20 impact from CECL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (3.79)% Allowance for loan losses as a % of period-end loan receivables . . . . 7.39% 7.34% For the quarter ended March 31, Total 2019 2020 Purchase volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $32.5 $32.0 Less: Walmart and Yamaha Purchase volume . . . . . . . . . . . . . . . . . . . . (2.1) - Core Purchase volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30.4 $32.0 Average active accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77.1 72.1 Less: Walmart and Yamaha Average active accounts . . . . . . . . . . . . . . (7.6) - Core Average active accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.5 72.1 Interest and fees on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,687 $4,340 Less: Walmart and Yamaha Interest and fees on loans . . . . . . . . . . . . . (549) - Core Interest and fees on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,138 $4,340 (a) Accounts represent average active accounts in millions, which are credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in 17 the current month. Loan receivables and Purchase volume $ in billions. Interest and fees on loans, Allowance for credit losses, and Allowance for loan losses $ in millions.

 
Non-GAAP Reconciliation (continued) The following table sets forth a reconciliation between GAAP results and non-GAAP managed-basis results for 2009. Twelve months ended December 31, 2009 Net charge-offs as a % of average loan receivables, including held for sale: GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.26% Securitization adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.59)% Managed-basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.67% Interest and fees on loans as a % of average loan receivables, including held for sale: GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.74% Securitization adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.75% Managed-basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.49% Retailer share arrangements as a % of average loan receivables, including held for sale: GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.40% Securitization adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.80)% Managed-basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.60% Risk-adjusted yield(a): GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.48% Securitization adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.34% Managed-basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.82% (a) Risk-adjusted yield is equal to interest and fees on loans as a % of average loan receivables less net charge-offs as a % of average loan receivables. 18

 
Non-GAAP Reconciliation (continued)(a) The following table sets forth the components of our Tier 1 Capital + Reserves ratio for the periods indicated below. At March 31, Total 2019 2020 Tier 1 capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,661 $12,405 Less: CECL transition adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (2,417) Tier 1 capital (CECL fully phased-in) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,661 $9,988 Add: Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,942 9,175 Tier 1 capital (CECL fully phased-in) plus Reserves for credit losses. $18,603 $19,163 Risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $87,331 $81,639 Less: CECL transition adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (2,204) Risk-weighted assets (CECL fully phased-in) . . . . . . . . . . . . . . . . . . . . . . $87,331 $79,435 (a) Estimated at March 31, 2020, $ in millions 19

 
Exhibit 99.4

Explanation of Non-GAAP Measures
The information provided in this Form 8-K and exhibits includes measures which are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP").
We present certain financial measures that have been adjusted to exclude amounts related to the Walmart and Yamaha portfolios from the prior year periods presented, which we refer to as "Core" financial measures, in this Form 8-K and exhibits. These Core financial measures are not measures presented in accordance with GAAP. Given the sale of the Walmart and Yamaha portfolios which were completed in October 2019 and January 2020, respectively, we believe the presentation of certain Core financial measures is a more meaningful measure to investors of the Company's ongoing credit programs.
On January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (“CECL”). For the initial year of adoption of the new accounting standard, we present what both our allowance for credit losses and allowance for credit losses as a percentage of our period-end loan receivables (“allowance coverage ratio”) would have been if the prior accounting guidance was still in effect. These measures are non-GAAP measures. We believe the presentation of these measures is meaningful to investors in providing comparability with the corresponding GAAP measures we report in prior year periods when the prior accounting guidance was effective.
In addition, we also present certain capital measures in this Form 8-K and exhibits. Our “fully-phased Tier 1 Capital and Credit Loss Reserve Ratio” is not required by regulators to be disclosed, and therefore is considered a non-GAAP measure. We believe this ratio is a useful measure to investors as it provides a meaningful measure of what the Company’s total loss absorption capacity would be if the transitional rules currently in effect, which permit the temporary deferral of the regulatory capital effects of CECL, were no longer available for us to apply.
We also present a measure we refer to as “tangible common equity” in this Form 8-K and exhibits. Tangible common equity itself is not a measure presented in accordance with GAAP. We believe tangible common equity is a more meaningful measure to investors of the net asset value of the Company.
The reconciliations of the above non-GAAP measures to the applicable comparable GAAP financial measure are included in the detailed financial tables included in Exhibit 99.2.
Within Exhibit 99.3 we present certain historical financial information for 2009 on a "managed" basis. These metrics presented on a managed basis are non-GAAP measures. A reconciliation of the corresponding GAAP financial metrics to the financial information presented on a managed basis is included in the appendix of Exhibit 99.3.