(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
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)) |
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Emerging growth company |
Number | Description | |||||||
99.1 | Press release, dated April 18, 2022, issued by Synchrony Financial | |||||||
99.2 | Financial Data Supplement of the Company for the quarter ended March 31, 2022 | |||||||
99.3 | Financial Results Presentation of the Company for the quarter ended March 31, 2022 | |||||||
99.4 | Explanation of Non-GAAP Measures | |||||||
104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL |
SYNCHRONY FINANCIAL | ||||||||||||||||||||
Date: April 18, 2022 | By: | /s/ Jonathan Mothner | ||||||||||||||||||
Name: | Jonathan Mothner | |||||||||||||||||||
Title: | Executive Vice President, General Counsel and Secretary |
Number | Description | |||||||
104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL |
For Immediate Release Synchrony Financial (NYSE: SYF) April 18, 2022 |
4.0% Return on Assets | 15.0% CET1 Ratio | $1.1B Capital Returned | CEO COMMENTARY | |||||||||||||||||||||||||||||
“Synchrony’s first quarter results reflected both the core strengths of our business and the continued execution of our key strategic priorities,” said Brian Doubles, Synchrony’s President and Chief Executive Officer. “We deeply understand the needs and expectations of our customers and partners, which enables us to deliver financing solutions and experiences that strongly resonate — building long-lasting relationships and greater value over time. “Synchrony’s differentiated business model consistently positions us as the partner of choice. Whether we are powering financing experiences for local merchants, healthcare providers or national brands, we are able to meet our customers where, when and however they want to be met. The scalability of our technology platform, the breadth of our product suite and the depth of our lending insights across many industries, positions us to consistently deliver sustainable and attractive outcomes for all our stakeholders.” | ||||||||||||||||||||||||||||||||
$83.0B Loans includes Loan Receivables of $78.9B and loans HFS of $4.0B | ||||||||||||||||||||||||||||||||
Net Earnings of $932 Million or $1.77 Per Diluted Share | ||||||||||||||||||||||||||||||||
Consumer remains strong, leading to broad-based purchase volume and loan growth, and strong credit trends | ||||||||||||||||||||||||||||||||
Board approved an incremental $2.8 billion share repurchase authorization and, effective third quarter 2022, a planned 5% increase in regular common dividend | ||||||||||||||||||||||||||||||||
STAMFORD, Conn. – Synchrony Financial (NYSE: SYF) today announced first quarter 2022 net earnings of $932 million, or $1.77 per diluted share, compared to $1.0 billion, or $1.73 per diluted share in the first quarter 2021. First quarter 2022 net earnings included a $22 million post-tax benefit, or $0.04 per diluted share, due to reserve reductions related to held for sale portfolios. | ||||||||||||||||||||||||||||||||
KEY OPERATING & FINANCIAL METRICS* | ||||||||||||||||||||||||||||||||
PURCHASE VOLUME AND CREDIT TRENDS REFLECT CONSUMER STRENGTH, DRIVING CONTINUED STRONG PERFORMANCE | ||||||||||||||||||||||||||||||||
•Purchase volume increased 17% to $40.5 billion •Loans of $83.0 billion, including $78.9 billion of loan receivables and $4.0 billion of loan receivables held for sale, increased 8% •Average active accounts increased 6% to 70.1 million •New accounts increased 10% to 5.5 million •Net interest margin increased 182 basis points to 15.80% •Efficiency ratio increased 110 basis points to 37.2% •Return on assets decreased 30 basis points to 4.0% •Return on equity decreased 430 basis points to 27.5% |
CFO COMMENTARY | BUSINESS AND FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2022* | |||||||||||||||||||||||||
“Synchrony’s strong first quarter results demonstrated the value we provide to our customers and partners, alike,” said Brian Wenzel, Synchrony’s Executive Vice President and Chief Financial Officer. “We achieved double-digit growth in purchase volume across four of our five sales platforms, and loan receivables growth accelerated across all five, thanks in part to some moderation in payment rate. “Credit trends continued to reflect both the health of the consumer and the resilience that comes from our sophisticated underwriting capabilities. “As loss levels gradually normalize toward our optimal underwriting target, interest income and receivables will continue to grow and RSA’s will moderate — enabling our business to continue to generate financial results within a consistent, peer-leading range of returns.” | ||||||||||||||||||||||||||
BUSINESS HIGHLIGHTS | ||||||||||||||||||||||||||
CONTINUED TO EXPAND PORTFOLIO AND EXTEND CUSTOMER REACH | ||||||||||||||||||||||||||
•Added or renewed more than 15 programs, including Generac Power Systems, Mattress Warehouse, Guitar Center and NAPA Auto Care •Broadened CareCredit network through multi-year strategic partnership with Mercyhealth to expand patient financing options •Launched ability to pay for Electric Vehicle charging with Synchrony Car Care credit cards | ||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||
EARNINGS GROWTH DRIVEN BY STRENGTH ACROSS KEY BUSINESS DRIVERS | ||||||||||||||||||||||||||
•Interest and fees on loans increased 7% to $4 billion, primarily driven by growth in average loan receivables. •Net interest income increased $350 million, or 10%, to $3.8 billion, mainly due to higher interest and fees on loans and decrease in interest expense. •Retailer share arrangements increased $115 million, or 12%, to $1.1 billion, primarily driven by strong program performance. •Provision for credit losses increased $187 million, or 56%, to $521 million, driven by a lower reserve release compared to prior year and partially offset by lower net charge-offs. •Other income decreased $23 million, or 18%, to $108 million, primarily reflecting higher loyalty costs associated with higher purchase volume, and lower investment gains. •Other expense increased $107 million, or 11%, to $1.0 billion, driven by higher employee, marketing and business development, and technology costs. Other expense also included the impact of $10 million related to certain employee and legal matters. •Net earnings decreased to $932 million, including a $22 million post-tax benefit, or $0.04 per diluted share, due to reserve reductions related to the held for sale portfolios. | ||||||||||||||||||||||||||
CREDIT QUALITY | ||||||||||||||||||||||||||
CREDIT PERFORMANCE CONTINUED TO BE DRIVEN BY A STRONG CONSUMER | ||||||||||||||||||||||||||
•Loans 30+ days past due as a percentage of total period-end loan receivables were 2.78% compared to 2.83% last year, reflecting a decrease of 5 basis points. Excluding the impact of the held for sale portfolios from both periods, the year over year decline was approximately 15 basis points. •Net charge-offs as a percentage of total average loan receivables were 2.73% compared to 3.62% last year, reflecting a decrease of 89 basis points. •The allowance for credit losses as a percentage of total period-end loan receivables was 10.96% compared to 10.76% in the fourth quarter 2021. |
SALES PLATFORM HIGHLIGHTS | |||||||||||||||||||||||
DIVERSITY ACROSS OUR PLATFORMS CONTINUES TO PROVIDE RESILIENCE | |||||||||||||||||||||||
•Home & Auto purchase volume increased 10%, reflecting continued strength in Home and an improvement in Auto. Period-end loan receivables increased 6%, as strong customer spend was partially offset by elevated payment rates. Interest and fees on loans were up by 5% compared to the prior year. Average active accounts also increased 2%. •Digital purchase volume increased 20%, generally reflecting higher cardholder engagement across our established programs as well as continued momentum in our recently launched programs. Period-end loan receivables increased 11%, reflecting the impact of strong purchase volume that was partially offset by high payment rates. Interest and fees on loans increased 13%, driven primarily by loan receivables growth. Average active accounts increased 10%, reflecting particular strength among our established programs. •Diversified & Value purchase volume increased 25%, reflecting strong retailer performance and higher customer engagement. Period-end loan receivables increased 7% reflecting continued strength in purchase volume, partially offset by high payment rates. Interest and fees on loans increased 5%, driven by loan receivables growth, and average active accounts increased 10%. •Health & Wellness purchase volume increased 17%, reflecting strength across the network, particularly in Dental, given the benefit of increases in patient volume compared to the prior year. Period-end loan receivables increased 12%, as strong purchase volume was partially offset by high payment rates throughout the prior year. Interest and fees on loans increased 10%, driven primarily by loan receivables growth, and average active accounts increased 6%. •Lifestyle purchase volume increased 4%, reflecting strong retailer sales and growth in Music and Specialty, partially offset by the ongoing impact of inventory shortages in Power and particularly strong growth in the year ago period. Period-end loan receivables increased 8%, reflecting the impact of several quarters of strong purchase volume and the longer-term nature of the financing products. Interest and fees on loans increased 6%, driven primarily by loan receivables growth, and average active accounts were relatively flat. | |||||||||||||||||||||||
BALANCE SHEET, LIQUIDITY & CAPITAL | |||||||||||||||||||||||
FUNDING, CAPITAL & LIQUIDITY REMAIN ROBUST | |||||||||||||||||||||||
•Loans of $83.0 billion, including $78.9 billion of loan receivables and $4.0 billion of loan receivables held for sale, increased 8%; purchase volume increased 17% and average active accounts increased 6%. •Deposits increased $814 million, or 1%, to $63.6 billion and comprised 83% of funding. •Total liquidity (liquid assets and undrawn credit facilities) of $17.8 billion, or 18.7% of total assets. •The company returned $1.1 billion in capital to shareholders, including $967 million of share repurchases and $114 million of common stock dividends. •The Company’s Board approved an incremental share repurchase authorization of $2.8 billion for the period ending June 2023. Inclusive of the $251 million of remaining authorization at March 31, 2022, the Company has a total share repurchase authorization of $3.1 billion. •The Company’s Board approved a 5% increase of the common dividend to $0.23 per share effective in third quarter 2022. •The estimated Common Equity Tier 1 ratio was 15.0% compared to 17.4%, and the estimated Tier 1 Capital ratio was 15.9% compared to 18.3%. The first year phase-in of the impact of CECL on our regulatory capital resulted in a reduction to our CET1 ratio of approximately 60 basis points. | |||||||||||||||||||||||
*All comparisons are for the first quarter of 2022 compared to the first quarter of 2021, 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, 2021, as filed February 10, 2022, and the Company’s forthcoming Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. 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 | ||||||||||||||
On Monday, April 18, 2022, at 8:00 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. |
Investor Relations | Media Relations | ||||
Kathryn Miller | Sue Bishop | ||||
(203) 585-6291 | (203) 585-2802 |
SYNCHRONY FINANCIAL | ||||||||||||||||||||||||||||||||||||||
FINANCIAL SUMMARY | ||||||||||||||||||||||||||||||||||||||
(unaudited, in millions, except per share statistics) | ||||||||||||||||||||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||||||||||||||||||||
Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | 1Q'22 vs. 1Q'21 | |||||||||||||||||||||||||||||||||
EARNINGS | ||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 3,789 | $ | 3,830 | $ | 3,658 | $ | 3,312 | $ | 3,439 | $ | 350 | 10.2 | % | ||||||||||||||||||||||||
Retailer share arrangements | (1,104) | (1,267) | (1,266) | (1,006) | (989) | (115) | 11.6 | % | ||||||||||||||||||||||||||||||
Provision for credit losses | 521 | 561 | 25 | (194) | 334 | 187 | 56.0 | % | ||||||||||||||||||||||||||||||
Net interest income, after retailer share arrangements and provision for credit losses | 2,164 | 2,002 | 2,367 | 2,500 | 2,116 | 48 | 2.3 | % | ||||||||||||||||||||||||||||||
Other income | 108 | 167 | 94 | 89 | 131 | (23) | (17.6) | % | ||||||||||||||||||||||||||||||
Other expense | 1,039 | 1,122 | 961 | 948 | 932 | 107 | 11.5 | % | ||||||||||||||||||||||||||||||
Earnings before provision for income taxes | 1,233 | 1,047 | 1,500 | 1,641 | 1,315 | (82) | (6.2) | % | ||||||||||||||||||||||||||||||
Provision for income taxes | 301 | 234 | 359 | 399 | 290 | 11 | 3.8 | % | ||||||||||||||||||||||||||||||
Net earnings | $ | 932 | $ | 813 | $ | 1,141 | $ | 1,242 | $ | 1,025 | $ | (93) | (9.1) | % | ||||||||||||||||||||||||
Net earnings available to common stockholders | $ | 922 | $ | 803 | $ | 1,130 | $ | 1,232 | $ | 1,014 | $ | (92) | (9.1) | % | ||||||||||||||||||||||||
COMMON SHARE STATISTICS | ||||||||||||||||||||||||||||||||||||||
Basic EPS | $ | 1.79 | $ | 1.49 | $ | 2.02 | $ | 2.13 | $ | 1.74 | $ | 0.05 | 2.9 | % | ||||||||||||||||||||||||
Diluted EPS | $ | 1.77 | $ | 1.48 | $ | 2.00 | $ | 2.12 | $ | 1.73 | $ | 0.04 | 2.3 | % | ||||||||||||||||||||||||
Dividend declared per share | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | — | — | % | ||||||||||||||||||||||||
Common stock price | $ | 34.82 | $ | 46.39 | $ | 48.88 | $ | 48.52 | $ | 40.66 | $ | (5.84) | (14.4) | % | ||||||||||||||||||||||||
Book value per share | $ | 25.06 | $ | 24.53 | $ | 24.13 | $ | 23.48 | $ | 21.86 | $ | 3.20 | 14.6 | % | ||||||||||||||||||||||||
Tangible common equity per share(1) | $ | 20.60 | $ | 20.21 | $ | 20.12 | $ | 19.64 | $ | 17.95 | $ | 2.65 | 14.8 | % | ||||||||||||||||||||||||
Beginning common shares outstanding | 526.8 | 547.2 | 573.4 | 581.1 | 584.0 | (57.2) | (9.8) | % | ||||||||||||||||||||||||||||||
Issuance of common shares | — | — | — | — | — | — | — | % | ||||||||||||||||||||||||||||||
Stock-based compensation | 1.4 | 0.1 | 0.5 | 1.0 | 2.2 | (0.8) | (36.4) | % | ||||||||||||||||||||||||||||||
Shares repurchased | (22.0) | (20.5) | (26.7) | (8.7) | (5.1) | (16.9) | NM | |||||||||||||||||||||||||||||||
Ending common shares outstanding | 506.2 | 526.8 | 547.2 | 573.4 | 581.1 | (74.9) | (12.9) | % | ||||||||||||||||||||||||||||||
Weighted average common shares outstanding | 515.3 | 537.8 | 560.6 | 577.2 | 583.3 | (68.0) | (11.7) | % | ||||||||||||||||||||||||||||||
Weighted average common shares outstanding (fully diluted) | 519.5 | 543.0 | 565.6 | 581.7 | 587.5 | (68.0) | (11.6) | % | ||||||||||||||||||||||||||||||
(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, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | 1Q'22 vs. 1Q'21 | |||||||||||||||||||||||||||||||||
PERFORMANCE METRICS | ||||||||||||||||||||||||||||||||||||||
Return on assets(1) | 4.0 | % | 3.4 | % | 4.9 | % | 5.3 | % | 4.3 | % | (0.3) | % | ||||||||||||||||||||||||||
Return on equity(2) | 27.5 | % | 23.0 | % | 32.1 | % | 36.5 | % | 31.8 | % | (4.3) | % | ||||||||||||||||||||||||||
Return on tangible common equity(3) | 34.9 | % | 28.7 | % | 40.1 | % | 46.3 | % | 40.8 | % | (5.9) | % | ||||||||||||||||||||||||||
Net interest margin(4) | 15.80 | % | 15.77 | % | 15.45 | % | 13.78 | % | 13.98 | % | 1.82 | % | ||||||||||||||||||||||||||
Efficiency ratio(5) | 37.2 | % | 41.1 | % | 38.7 | % | 39.6 | % | 36.1 | % | 1.1 | % | ||||||||||||||||||||||||||
Other expense as a % of average loan receivables, including held for sale | 5.09 | % | 5.44 | % | 4.84 | % | 4.95 | % | 4.82 | % | 0.27 | % | ||||||||||||||||||||||||||
Effective income tax rate | 24.4 | % | 22.3 | % | 23.9 | % | 24.3 | % | 22.1 | % | 2.3 | % | ||||||||||||||||||||||||||
CREDIT QUALITY METRICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs as a % of average loan receivables, including held for sale | 2.73 | % | 2.37 | % | 2.18 | % | 3.57 | % | 3.62 | % | (0.89) | % | ||||||||||||||||||||||||||
30+ days past due as a % of period-end loan receivables(6) | 2.78 | % | 2.62 | % | 2.42 | % | 2.11 | % | 2.83 | % | (0.05) | % | ||||||||||||||||||||||||||
90+ days past due as a % of period-end loan receivables(6) | 1.30 | % | 1.17 | % | 1.05 | % | 1.00 | % | 1.52 | % | (0.22) | % | ||||||||||||||||||||||||||
Net charge-offs | $ | 558 | $ | 489 | $ | 432 | $ | 684 | $ | 699 | $ | (141) | (20.2) | % | ||||||||||||||||||||||||
Loan receivables delinquent over 30 days(6) | $ | 2,194 | $ | 2,114 | $ | 1,850 | $ | 1,653 | $ | 2,175 | $ | 19 | 0.9 | % | ||||||||||||||||||||||||
Loan receivables delinquent over 90 days(6) | $ | 1,026 | $ | 942 | $ | 804 | $ | 784 | $ | 1,170 | $ | (144) | (12.3) | % | ||||||||||||||||||||||||
Allowance for credit losses (period-end) | $ | 8,651 | $ | 8,688 | $ | 8,616 | $ | 9,023 | $ | 9,901 | $ | (1,250) | (12.6) | % | ||||||||||||||||||||||||
Allowance coverage ratio(7) | 10.96 | % | 10.76 | % | 11.28 | % | 11.51 | % | 12.88 | % | (1.92) | % | ||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||
Purchase volume(8)(9) | $ | 40,490 | $ | 47,072 | $ | 41,912 | $ | 42,121 | $ | 34,749 | $ | 5,741 | 16.5 | % | ||||||||||||||||||||||||
Period-end loan receivables | $ | 78,916 | $ | 80,740 | $ | 76,388 | $ | 78,374 | $ | 76,858 | $ | 2,058 | 2.7 | % | ||||||||||||||||||||||||
Credit cards | $ | 74,596 | $ | 76,628 | $ | 72,289 | $ | 74,429 | $ | 73,244 | $ | 1,352 | 1.8 | % | ||||||||||||||||||||||||
Consumer installment loans | $ | 2,719 | $ | 2,675 | $ | 2,614 | $ | 2,507 | $ | 2,319 | $ | 400 | 17.2 | % | ||||||||||||||||||||||||
Commercial credit products | $ | 1,530 | $ | 1,372 | $ | 1,401 | $ | 1,379 | $ | 1,248 | $ | 282 | 22.6 | % | ||||||||||||||||||||||||
Other | $ | 71 | $ | 65 | $ | 84 | $ | 59 | $ | 47 | $ | 24 | 51.1 | % | ||||||||||||||||||||||||
Average loan receivables, including held for sale | $ | 82,747 | $ | 81,784 | $ | 78,714 | $ | 76,821 | $ | 78,358 | $ | 4,389 | 5.6 | % | ||||||||||||||||||||||||
Period-end active accounts (in thousands)(9)(10) | 69,122 | 72,420 | 67,245 | 66,892 | 65,219 | 3,903 | 6.0 | % | ||||||||||||||||||||||||||||||
Average active accounts (in thousands)(9)(10) | 70,127 | 69,397 | 67,189 | 65,810 | 66,280 | 3,847 | 5.8 | % | ||||||||||||||||||||||||||||||
LIQUIDITY | ||||||||||||||||||||||||||||||||||||||
Liquid assets | ||||||||||||||||||||||||||||||||||||||
Cash and equivalents | $ | 10,541 | $ | 8,337 | $ | 9,806 | $ | 11,117 | $ | 16,620 | $ | (6,079) | (36.6) | % | ||||||||||||||||||||||||
Total liquid assets | $ | 14,687 | $ | 12,989 | $ | 14,664 | $ | 16,297 | $ | 22,636 | $ | (7,949) | (35.1) | % | ||||||||||||||||||||||||
Undrawn credit facilities | ||||||||||||||||||||||||||||||||||||||
Undrawn credit facilities | $ | 3,100 | $ | 2,700 | $ | 3,700 | $ | 4,900 | $ | 5,400 | $ | (2,300) | (42.6) | % | ||||||||||||||||||||||||
Total liquid assets and undrawn credit facilities | $ | 17,787 | $ | 15,689 | $ | 18,364 | $ | 21,197 | $ | 28,036 | $ | (10,249) | (36.6) | % | ||||||||||||||||||||||||
Liquid assets % of total assets | 15.42 | % | 13.57 | % | 15.95 | % | 17.71 | % | 23.62 | % | (8.20) | % | ||||||||||||||||||||||||||
Liquid assets including undrawn credit facilities % of total assets | 18.67 | % | 16.39 | % | 19.97 | % | 23.04 | % | 29.25 | % | (10.58) | % | ||||||||||||||||||||||||||
(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, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | 1Q'22 vs. 1Q'21 | |||||||||||||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 4,008 | $ | 4,042 | $ | 3,887 | $ | 3,567 | $ | 3,732 | $ | 276 | 7.4 | % | ||||||||||||||||||||||||
Interest on cash and debt securities | 14 | 11 | 11 | 11 | 10 | 4 | 40.0 | % | ||||||||||||||||||||||||||||||
Total interest income | 4,022 | 4,053 | 3,898 | 3,578 | 3,742 | 280 | 7.5 | % | ||||||||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||||||||||||
Interest on deposits | 127 | 119 | 131 | 146 | 170 | (43) | (25.3) | % | ||||||||||||||||||||||||||||||
Interest on borrowings of consolidated securitization entities | 33 | 33 | 41 | 44 | 51 | (18) | (35.3) | % | ||||||||||||||||||||||||||||||
Interest on senior unsecured notes | 73 | 71 | 68 | 76 | 82 | (9) | (11.0) | % | ||||||||||||||||||||||||||||||
Total interest expense | 233 | 223 | 240 | 266 | 303 | (70) | (23.1) | % | ||||||||||||||||||||||||||||||
Net interest income | 3,789 | 3,830 | 3,658 | 3,312 | 3,439 | 350 | 10.2 | % | ||||||||||||||||||||||||||||||
Retailer share arrangements | (1,104) | (1,267) | (1,266) | (1,006) | (989) | (115) | 11.6 | % | ||||||||||||||||||||||||||||||
Provision for credit losses | 521 | 561 | 25 | (194) | 334 | 187 | 56.0 | % | ||||||||||||||||||||||||||||||
Net interest income, after retailer share arrangements and provision for credit losses | 2,164 | 2,002 | 2,367 | 2,500 | 2,116 | 48 | 2.3 | % | ||||||||||||||||||||||||||||||
Other income: | ||||||||||||||||||||||||||||||||||||||
Interchange revenue | 230 | 254 | 232 | 223 | 171 | 59 | 34.5 | % | ||||||||||||||||||||||||||||||
Debt cancellation fees | 89 | 79 | 70 | 66 | 69 | 20 | 29.0 | % | ||||||||||||||||||||||||||||||
Loyalty programs | (258) | (310) | (256) | (247) | (179) | (79) | 44.1 | % | ||||||||||||||||||||||||||||||
Other | 47 | 144 | 48 | 47 | 70 | (23) | (32.9) | % | ||||||||||||||||||||||||||||||
Total other income | 108 | 167 | 94 | 89 | 131 | (23) | (17.6) | % | ||||||||||||||||||||||||||||||
Other expense: | ||||||||||||||||||||||||||||||||||||||
Employee costs | 402 | 409 | 369 | 359 | 364 | 38 | 10.4 | % | ||||||||||||||||||||||||||||||
Professional fees | 210 | 207 | 196 | 189 | 190 | 20 | 10.5 | % | ||||||||||||||||||||||||||||||
Marketing and business development | 116 | 167 | 110 | 114 | 95 | 21 | 22.1 | % | ||||||||||||||||||||||||||||||
Information processing | 145 | 143 | 139 | 137 | 131 | 14 | 10.7 | % | ||||||||||||||||||||||||||||||
Other | 166 | 196 | 147 | 149 | 152 | 14 | 9.2 | % | ||||||||||||||||||||||||||||||
Total other expense | 1,039 | 1,122 | 961 | 948 | 932 | 107 | 11.5 | % | ||||||||||||||||||||||||||||||
Earnings before provision for income taxes | 1,233 | 1,047 | 1,500 | 1,641 | 1,315 | (82) | (6.2) | % | ||||||||||||||||||||||||||||||
Provision for income taxes | 301 | 234 | 359 | 399 | 290 | 11 | 3.8 | % | ||||||||||||||||||||||||||||||
Net earnings | $ | 932 | $ | 813 | $ | 1,141 | $ | 1,242 | $ | 1,025 | $ | (93) | (9.1) | % | ||||||||||||||||||||||||
Net earnings available to common stockholders | $ | 922 | $ | 803 | $ | 1,130 | $ | 1,232 | $ | 1,014 | $ | (92) | (9.1) | % | ||||||||||||||||||||||||
SYNCHRONY FINANCIAL | ||||||||||||||||||||||||||||||||||||||
STATEMENTS OF FINANCIAL POSITION | ||||||||||||||||||||||||||||||||||||||
(unaudited, $ in millions) | ||||||||||||||||||||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||||||||||||||||||||
Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Mar 31, 2022 vs. Mar 31, 2021 | |||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||
Cash and equivalents | $ | 10,541 | $ | 8,337 | $ | 9,806 | $ | 11,117 | $ | 16,620 | $ | (6,079) | (36.6) | % | ||||||||||||||||||||||||
Debt securities | 4,677 | 5,283 | 5,444 | 5,728 | 6,550 | (1,873) | (28.6) | % | ||||||||||||||||||||||||||||||
Loan receivables: | ||||||||||||||||||||||||||||||||||||||
Unsecuritized loans held for investment | 59,643 | 60,211 | 56,745 | 55,994 | 53,823 | 5,820 | 10.8 | % | ||||||||||||||||||||||||||||||
Restricted loans of consolidated securitization entities | 19,273 | 20,529 | 19,643 | 22,380 | 23,035 | (3,762) | (16.3) | % | ||||||||||||||||||||||||||||||
Total loan receivables | 78,916 | 80,740 | 76,388 | 78,374 | 76,858 | 2,058 | 2.7 | % | ||||||||||||||||||||||||||||||
Less: Allowance for credit losses | (8,651) | (8,688) | (8,616) | (9,023) | (9,901) | 1,250 | (12.6) | % | ||||||||||||||||||||||||||||||
Loan receivables, net | 70,265 | 72,052 | 67,772 | 69,351 | 66,957 | 3,308 | 4.9 | % | ||||||||||||||||||||||||||||||
Loan receivables held for sale | 4,046 | 4,361 | 3,450 | — | 23 | 4,023 | NM | |||||||||||||||||||||||||||||||
Goodwill | 1,105 | 1,105 | 1,105 | 1,105 | 1,104 | 1 | 0.1 | % | ||||||||||||||||||||||||||||||
Intangible assets, net | 1,149 | 1,168 | 1,090 | 1,098 | 1,169 | (20) | (1.7) | % | ||||||||||||||||||||||||||||||
Other assets | 3,484 | 3,442 | 3,270 | 3,618 | 3,431 | 53 | 1.5 | % | ||||||||||||||||||||||||||||||
Total assets | $ | 95,267 | $ | 95,748 | $ | 91,937 | $ | 92,017 | $ | 95,854 | $ | (587) | (0.6) | % | ||||||||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||||||||
Interest-bearing deposit accounts | $ | 63,180 | $ | 61,911 | $ | 59,998 | $ | 59,500 | $ | 62,419 | $ | 761 | 1.2 | % | ||||||||||||||||||||||||
Non-interest-bearing deposit accounts | 395 | 359 | 355 | 341 | 342 | 53 | 15.5 | % | ||||||||||||||||||||||||||||||
Total deposits | 63,575 | 62,270 | 60,353 | 59,841 | 62,761 | 814 | 1.3 | % | ||||||||||||||||||||||||||||||
Borrowings: | ||||||||||||||||||||||||||||||||||||||
Borrowings of consolidated securitization entities | 6,139 | 7,288 | 6,288 | 6,987 | 7,193 | (1,054) | (14.7) | % | ||||||||||||||||||||||||||||||
Senior unsecured notes | 7,221 | 7,219 | 6,472 | 6,470 | 7,967 | (746) | (9.4) | % | ||||||||||||||||||||||||||||||
Total borrowings | 13,360 | 14,507 | 12,760 | 13,457 | 15,160 | (1,800) | (11.9) | % | ||||||||||||||||||||||||||||||
Accrued expenses and other liabilities | 4,914 | 5,316 | 4,888 | 4,522 | 4,494 | 420 | 9.3 | % | ||||||||||||||||||||||||||||||
Total liabilities | 81,849 | 82,093 | 78,001 | 77,820 | 82,415 | (566) | (0.7) | % | ||||||||||||||||||||||||||||||
Equity: | ||||||||||||||||||||||||||||||||||||||
Preferred stock | 734 | 734 | 734 | 734 | 734 | — | — | % | ||||||||||||||||||||||||||||||
Common stock | 1 | 1 | 1 | 1 | 1 | — | — | % | ||||||||||||||||||||||||||||||
Additional paid-in capital | 9,643 | 9,669 | 9,649 | 9,620 | 9,592 | 51 | 0.5 | % | ||||||||||||||||||||||||||||||
Retained earnings | 15,003 | 14,245 | 13,562 | 12,560 | 11,470 | 3,533 | 30.8 | % | ||||||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | (121) | (69) | (64) | (56) | (56) | (65) | 116.1 | % | ||||||||||||||||||||||||||||||
Treasury stock | (11,842) | (10,925) | (9,946) | (8,662) | (8,302) | (3,540) | 42.6 | % | ||||||||||||||||||||||||||||||
Total equity | 13,418 | 13,655 | 13,936 | 14,197 | 13,439 | (21) | (0.2) | % | ||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 95,267 | $ | 95,748 | $ | 91,937 | $ | 92,017 | $ | 95,854 | $ | (587) | (0.6) | % | ||||||||||||||||||||||||
SYNCHRONY FINANCIAL | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(unaudited, $ in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 8,976 | $ | 5 | 0.23 | % | $ | 9,024 | $ | 4 | 0.18 | % | $ | 9,559 | $ | 3 | 0.12 | % | $ | 13,584 | $ | 4 | 0.12 | % | $ | 14,610 | $ | 4 | 0.11 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities available for sale | 5,513 | 9 | 0.66 | % | 5,517 | 7 | 0.50 | % | 5,638 | 8 | 0.56 | % | 5,988 | 7 | 0.47 | % | 6,772 | 6 | 0.36 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan receivables, including held for sale: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit cards | 78,564 | 3,913 | 20.20 | % | 77,642 | 3,946 | 20.16 | % | 74,686 | 3,793 | 20.15 | % | 72,989 | 3,484 | 19.15 | % | 74,865 | 3,657 | 19.81 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer installment loans | 2,682 | 66 | 9.98 | % | 2,641 | 65 | 9.76 | % | 2,555 | 64 | 9.94 | % | 2,417 | 59 | 9.79 | % | 2,219 | 53 | 9.69 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial credit products | 1,434 | 28 | 7.92 | % | 1,434 | 30 | 8.30 | % | 1,407 | 29 | 8.18 | % | 1,363 | 23 | 6.77 | % | 1,231 | 21 | 6.92 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 67 | 1 | NM | 67 | 1 | NM | 66 | 1 | NM | 52 | 1 | NM | 43 | 1 | NM | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loan receivables, including held for sale | 82,747 | 4,008 | 19.64 | % | 81,784 | 4,042 | 19.61 | % | 78,714 | 3,887 | 19.59 | % | 76,821 | 3,567 | 18.62 | % | 78,358 | 3,732 | 19.32 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets | 97,236 | 4,022 | 16.78 | % | 96,325 | 4,053 | 16.69 | % | 93,911 | 3,898 | 16.47 | % | 96,393 | 3,578 | 14.89 | % | 99,740 | 3,742 | 15.22 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and due from banks | 1,626 | 1,606 | 1,588 | 1,559 | 1,635 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses | (8,675) | (8,648) | (8,956) | (9,801) | (10,225) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other assets | 5,369 | 5,424 | 5,405 | 5,238 | 5,305 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total non-interest-earning assets | (1,680) | (1,618) | (1,963) | (3,004) | (3,285) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 95,556 | $ | 94,707 | $ | 91,948 | $ | 93,389 | $ | 96,455 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposit accounts | $ | 62,314 | $ | 127 | 0.83 | % | $ | 61,090 | $ | 119 | 0.77 | % | $ | 59,275 | $ | 131 | 0.88 | % | $ | 60,761 | $ | 146 | 0.96 | % | $ | 62,724 | $ | 170 | 1.10 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings of consolidated securitization entities | 6,827 | 33 | 1.96 | % | 7,105 | 33 | 1.84 | % | 7,051 | 41 | 2.31 | % | 7,149 | 44 | 2.47 | % | 7,694 | 51 | 2.69 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior unsecured notes | 7,219 | 73 | 4.10 | % | 6,999 | 71 | 4.02 | % | 6,471 | 68 | 4.17 | % | 7,276 | 76 | 4.19 | % | 7,965 | 82 | 4.18 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 76,360 | 233 | 1.24 | % | 75,194 | 223 | 1.18 | % | 72,797 | 240 | 1.31 | % | 75,186 | 266 | 1.42 | % | 78,383 | 303 | 1.57 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-interest-bearing liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-interest-bearing deposit accounts | 374 | 343 | 358 | 349 | 346 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 5,091 | 5,137 | 4,676 | 4,199 | 4,655 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total non-interest-bearing liabilities | 5,465 | 5,480 | 5,034 | 4,548 | 5,001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 81,825 | 80,674 | 77,831 | 79,734 | 83,384 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total equity | 13,731 | 14,033 | 14,117 | 13,655 | 13,071 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 95,556 | $ | 94,707 | $ | 91,948 | $ | 93,389 | $ | 96,455 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 3,789 | $ | 3,830 | $ | 3,658 | $ | 3,312 | $ | 3,439 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate spread(1) | 15.54 | % | 15.51 | % | 15.16 | % | 13.47 | % | 13.65 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin(2) | 15.80 | % | 15.77 | % | 15.45 | % | 13.78 | % | 13.98 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Mar 31, 2022 vs. Mar 31, 2021 | |||||||||||||||||||||||||||||||||
BALANCE SHEET STATISTICS | ||||||||||||||||||||||||||||||||||||||
Total common equity | $ | 12,684 | $ | 12,921 | $ | 13,202 | $ | 13,463 | $ | 12,705 | $ | (21) | (0.2) | % | ||||||||||||||||||||||||
Total common equity as a % of total assets | 13.31 | % | 13.49 | % | 14.36 | % | 14.63 | % | 13.25 | % | 0.06 | % | ||||||||||||||||||||||||||
Tangible assets | $ | 93,013 | $ | 93,475 | $ | 89,742 | $ | 89,814 | $ | 93,581 | $ | (568) | (0.6) | % | ||||||||||||||||||||||||
Tangible common equity(1) | $ | 10,430 | $ | 10,648 | $ | 11,007 | $ | 11,260 | $ | 10,432 | $ | (2) | — | % | ||||||||||||||||||||||||
Tangible common equity as a % of tangible assets(1) | 11.21 | % | 11.39 | % | 12.27 | % | 12.54 | % | 11.15 | % | 0.06 | % | ||||||||||||||||||||||||||
Tangible common equity per share(1) | $ | 20.60 | $ | 20.21 | $ | 20.12 | $ | 19.64 | $ | 17.95 | $ | 2.65 | 14.8 | % | ||||||||||||||||||||||||
REGULATORY CAPITAL RATIOS(2)(3) | ||||||||||||||||||||||||||||||||||||||
Basel III - CECL Transition | ||||||||||||||||||||||||||||||||||||||
Total risk-based capital ratio(4) | 17.2 | % | 17.8 | % | 19.3 | % | 20.1 | % | 19.7 | % | ||||||||||||||||||||||||||||
Tier 1 risk-based capital ratio(5) | 15.9 | % | 16.5 | % | 18.0 | % | 18.7 | % | 18.3 | % | ||||||||||||||||||||||||||||
Tier 1 leverage ratio(6) | 13.9 | % | 14.7 | % | 15.5 | % | 15.6 | % | 14.5 | % | ||||||||||||||||||||||||||||
Common equity Tier 1 capital ratio | 15.0 | % | 15.6 | % | 17.1 | % | 17.8 | % | 17.4 | % | ||||||||||||||||||||||||||||
(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, 2022 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, unrounded, $ in millions) | ||||||||||||||||||||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||||||||||||||||||||
Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | 1Q'22 vs. 1Q'21 | |||||||||||||||||||||||||||||||||
HOME & AUTO(6) | ||||||||||||||||||||||||||||||||||||||
Purchase volume(1) | $ | 10,260 | $ | 10,919 | $ | 11,069 | $ | 11,523 | $ | 9,337 | $ | 923 | 9.9 | % | ||||||||||||||||||||||||
Period-end loan receivables | $ | 26,532 | $ | 26,781 | $ | 26,210 | $ | 25,588 | $ | 24,942 | $ | 1,590 | 6.4 | % | ||||||||||||||||||||||||
Average loan receivables, including held for sale | $ | 26,406 | $ | 26,455 | $ | 25,800 | $ | 25,111 | $ | 25,273 | $ | 1,133 | 4.5 | % | ||||||||||||||||||||||||
Average active accounts (in thousands)(3) | 17,473 | 17,655 | 17,516 | 17,307 | 17,149 | 324 | 1.9 | % | ||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 1,088 | $ | 1,126 | $ | 1,092 | $ | 993 | $ | 1,036 | $ | 52 | 5.0 | % | ||||||||||||||||||||||||
Other income | $ | 21 | $ | 18 | $ | 18 | $ | 16 | $ | 17 | $ | 4 | 23.5 | % | ||||||||||||||||||||||||
DIGITAL | ||||||||||||||||||||||||||||||||||||||
Purchase volume(1) | $ | 11,196 | $ | 13,451 | $ | 10,980 | $ | 10,930 | $ | 9,340 | $ | 1,856 | 19.9 | % | ||||||||||||||||||||||||
Period-end loan receivables | $ | 21,075 | $ | 21,751 | $ | 19,636 | $ | 19,233 | $ | 18,907 | $ | 2,168 | 11.5 | % | ||||||||||||||||||||||||
Average loan receivables, including held for sale | $ | 21,160 | $ | 20,388 | $ | 19,286 | $ | 18,783 | $ | 19,437 | $ | 1,723 | 8.9 | % | ||||||||||||||||||||||||
Average active accounts (in thousands)(3) | 19,000 | 18,375 | 17,655 | 17,258 | 17,318 | 1,682 | 9.7 | % | ||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 1,022 | $ | 1,025 | $ | 973 | $ | 891 | $ | 903 | $ | 119 | 13.2 | % | ||||||||||||||||||||||||
Other income | $ | (12) | $ | (28) | $ | (19) | $ | (28) | $ | (12) | $ | — | — | % | ||||||||||||||||||||||||
DIVERSIFIED & VALUE | ||||||||||||||||||||||||||||||||||||||
Purchase volume(1) | $ | 11,558 | $ | 14,154 | $ | 12,006 | $ | 11,618 | $ | 9,220 | $ | 2,338 | 25.4 | % | ||||||||||||||||||||||||
Period-end loan receivables | $ | 15,166 | $ | 16,075 | $ | 14,415 | $ | 14,357 | $ | 14,217 | $ | 949 | 6.7 | % | ||||||||||||||||||||||||
Average loan receivables, including held for sale | $ | 15,128 | $ | 14,999 | $ | 14,328 | $ | 14,101 | $ | 14,574 | $ | 554 | 3.8 | % | ||||||||||||||||||||||||
Average active accounts (in thousands)(3) | 19,201 | 18,829 | 17,903 | 17,301 | 17,457 | 1,744 | 10.0 | % | ||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 826 | $ | 817 | $ | 780 | $ | 729 | $ | 789 | $ | 37 | 4.7 | % | ||||||||||||||||||||||||
Other income | $ | (9) | $ | (23) | $ | (8) | $ | (2) | $ | 5 | $ | (14) | (280.0) | % | ||||||||||||||||||||||||
HEALTH & WELLNESS | ||||||||||||||||||||||||||||||||||||||
Purchase volume(1) | $ | 3,107 | $ | 3,055 | $ | 3,024 | $ | 2,988 | $ | 2,648 | $ | 459 | 17.3 | % | ||||||||||||||||||||||||
Period-end loan receivables | $ | 10,407 | $ | 10,244 | $ | 9,879 | $ | 9,515 | $ | 9,317 | $ | 1,090 | 11.7 | % | ||||||||||||||||||||||||
Average loan receivables, including held for sale | $ | 10,251 | $ | 10,057 | $ | 9,654 | $ | 9,334 | $ | 9,442 | $ | 809 | 8.6 | % | ||||||||||||||||||||||||
Average active accounts (in thousands)(3) | 6,027 | 5,922 | 5,707 | 5,585 | 5,706 | 321 | 5.6 | % | ||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 616 | $ | 603 | $ | 587 | $ | 523 | $ | 558 | $ | 58 | 10.4 | % | ||||||||||||||||||||||||
Other income | $ | 53 | $ | 42 | $ | 41 | $ | 36 | $ | 40 | $ | 13 | 32.5 | % | ||||||||||||||||||||||||
LIFESTYLE | ||||||||||||||||||||||||||||||||||||||
Purchase volume(1) | $ | 1,195 | $ | 1,462 | $ | 1,298 | $ | 1,405 | $ | 1,154 | $ | 41 | 3.6 | % | ||||||||||||||||||||||||
Period-end loan receivables | $ | 5,381 | $ | 5,479 | $ | 5,234 | $ | 5,158 | $ | 4,988 | $ | 393 | 7.9 | % | ||||||||||||||||||||||||
Average loan receivables, including held for sale | $ | 5,379 | $ | 5,297 | $ | 5,185 | $ | 5,050 | $ | 5,003 | $ | 376 | 7.5 | % | ||||||||||||||||||||||||
Average active accounts (in thousands)(3) | 2,582 | 2,548 | 2,465 | 2,442 | 2,573 | 9 | 0.3 | % | ||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 191 | $ | 194 | $ | 187 | $ | 182 | $ | 181 | $ | 10 | 5.5 | % | ||||||||||||||||||||||||
Other income | $ | 6 | $ | 6 | $ | 6 | $ | 6 | $ | 5 | $ | 1 | 20.0 | % | ||||||||||||||||||||||||
CORP, OTHER(4)(6) | ||||||||||||||||||||||||||||||||||||||
Purchase volume(1)(2) | $ | 3,174 | $ | 4,031 | $ | 3,535 | $ | 3,657 | $ | 3,050 | $ | 124 | 4.1 | % | ||||||||||||||||||||||||
Period-end loan receivables(5) | $ | 355 | $ | 410 | $ | 1,014 | $ | 4,523 | $ | 4,487 | $ | (4,132) | (92.1) | % | ||||||||||||||||||||||||
Average loan receivables, including held for sale | $ | 4,423 | $ | 4,588 | $ | 4,461 | $ | 4,442 | $ | 4,629 | $ | (206) | (4.5) | % | ||||||||||||||||||||||||
Average active accounts (in thousands)(2)(3) | 5,844 | 6,068 | 5,943 | 5,917 | 6,077 | (233) | (3.8) | % | ||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 265 | $ | 277 | $ | 268 | $ | 249 | $ | 265 | $ | — | — | % | ||||||||||||||||||||||||
Other income | $ | 49 | $ | 152 | $ | 56 | $ | 61 | $ | 76 | $ | (27) | (35.5) | % | ||||||||||||||||||||||||
TOTAL SYF | ||||||||||||||||||||||||||||||||||||||
Purchase volume(1)(2) | $ | 40,490 | $ | 47,072 | $ | 41,912 | $ | 42,121 | $ | 34,749 | $ | 5,741 | 16.5 | % | ||||||||||||||||||||||||
Period-end loan receivables(5) | $ | 78,916 | $ | 80,740 | $ | 76,388 | $ | 78,374 | $ | 76,858 | $ | 2,058 | 2.7 | % | ||||||||||||||||||||||||
Average loan receivables, including held for sale | $ | 82,747 | $ | 81,784 | $ | 78,714 | $ | 76,821 | $ | 78,358 | $ | 4,389 | 5.6 | % | ||||||||||||||||||||||||
Average active accounts (in thousands)(2)(3) | 70,127 | 69,397 | 67,189 | 65,810 | 66,280 | 3,847 | 5.8 | % | ||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 4,008 | $ | 4,042 | $ | 3,887 | $ | 3,567 | $ | 3,732 | $ | 276 | 7.4 | % | ||||||||||||||||||||||||
Other income | $ | 108 | $ | 167 | $ | 94 | $ | 89 | $ | 131 | $ | (23) | (17.6) | % | ||||||||||||||||||||||||
(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. | ||||||||||||||||||||||||||||||||||||||
(4) Includes activity and balances associated with our program agreement with Gap Inc. and BP except where noted, which are both scheduled to expire in 2Q 2022. | ||||||||||||||||||||||||||||||||||||||
(5) Reflects the reclassification of $3.5 billion and $0.5 billion to loan receivables held for sale in 3Q 2021 and 4Q 2021, respectively. | ||||||||||||||||||||||||||||||||||||||
(6) In December 2021, we entered into an agreement to sell $0.5 billion of loan receivables associated with our program agreement with BP. In connection with this agreement, revenue activities for the BP portfolio are no longer managed within our Home & Auto sales platform. All metrics for the BP portfolio previously reported within our Home & Auto sales platform, are now reported within our Corp, Other information. We have recast all prior-period reported metrics for our Home & Auto sales platform and Corp, Other to conform to the current-period presentation. | ||||||||||||||||||||||||||||||||||||||
SYNCHRONY FINANCIAL | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES(1) | |||||||||||||||||||||||||||||
(unaudited, $ in millions, except per share statistics) | |||||||||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||||||||
Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||||||||||||||||||||||
COMMON EQUITY AND REGULATORY CAPITAL MEASURES(2) | |||||||||||||||||||||||||||||
GAAP Total equity | $ | 13,418 | $ | 13,655 | $ | 13,936 | $ | 14,197 | $ | 13,439 | |||||||||||||||||||
Less: Preferred stock | (734) | (734) | (734) | (734) | (734) | ||||||||||||||||||||||||
Less: Goodwill | (1,105) | (1,105) | (1,105) | (1,105) | (1,104) | ||||||||||||||||||||||||
Less: Intangible assets, net | (1,149) | (1,168) | (1,090) | (1,098) | (1,169) | ||||||||||||||||||||||||
Tangible common equity | $ | 10,430 | $ | 10,648 | $ | 11,007 | $ | 11,260 | $ | 10,432 | |||||||||||||||||||
Add: CECL transition amount | 1,719 | 2,292 | 2,274 | 2,376 | 2,595 | ||||||||||||||||||||||||
Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss) | 371 | 329 | 299 | 301 | 354 | ||||||||||||||||||||||||
Common equity Tier 1 | $ | 12,520 | $ | 13,269 | $ | 13,580 | $ | 13,937 | $ | 13,381 | |||||||||||||||||||
Preferred stock | 734 | 734 | 734 | 734 | 734 | ||||||||||||||||||||||||
Tier 1 capital | $ | 13,254 | $ | 14,003 | $ | 14,314 | $ | 14,671 | $ | 14,115 | |||||||||||||||||||
Add: Allowance for credit losses includible in risk-based capital | 1,106 | 1,119 | 1,052 | 1,039 | 1,031 | ||||||||||||||||||||||||
Total Risk-based capital | $ | 14,360 | $ | 15,122 | $ | 15,366 | $ | 15,710 | $ | 15,146 | |||||||||||||||||||
ASSET MEASURES(2) | |||||||||||||||||||||||||||||
Total average assets | $ | 95,556 | $ | 94,707 | $ | 91,948 | $ | 93,389 | $ | 96,455 | |||||||||||||||||||
Adjustments for: | |||||||||||||||||||||||||||||
Add: CECL transition amount | 1,719 | 2,292 | 2,274 | 2,376 | 2,595 | ||||||||||||||||||||||||
Disallowed goodwill and other disallowed intangible assets (net of related deferred tax liabilities) and other | (1,964) | (1,999) | (1,960) | (1,965) | (1,987) | ||||||||||||||||||||||||
Total assets for leverage purposes | $ | 95,311 | $ | 95,000 | $ | 92,262 | $ | 93,800 | $ | 97,063 | |||||||||||||||||||
Risk-weighted assets | $ | 83,251 | $ | 84,950 | $ | 79,597 | $ | 78,281 | $ | 76,965 | |||||||||||||||||||
CECL FULLY PHASED-IN CAPITAL MEASURES | |||||||||||||||||||||||||||||
Tier 1 capital | $ | 13,254 | $ | 14,003 | $ | 14,314 | $ | 14,671 | $ | 14,115 | |||||||||||||||||||
Less: CECL transition adjustment | (1,719) | (2,292) | (2,274) | (2,376) | (2,595) | ||||||||||||||||||||||||
Tier 1 capital (CECL fully phased-in) | $ | 11,535 | $ | 11,711 | $ | 12,040 | $ | 12,295 | $ | 11,520 | |||||||||||||||||||
Add: Allowance for credit losses | 8,651 | 8,688 | 8,616 | 9,023 | 9,901 | ||||||||||||||||||||||||
Tier 1 capital (CECL fully phased-in) + Reserves for credit losses | $ | 20,186 | $ | 20,399 | $ | 20,656 | $ | 21,318 | $ | 21,421 | |||||||||||||||||||
Risk-weighted assets | $ | 83,251 | $ | 84,950 | $ | 79,597 | $ | 78,281 | $ | 76,965 | |||||||||||||||||||
Less: CECL transition adjustment | (870) | (1,353) | (2,065) | (2,166) | (2,386) | ||||||||||||||||||||||||
Risk-weighted assets (CECL fully phased-in) | $ | 82,381 | $ | 83,597 | $ | 77,532 | $ | 76,115 | $ | 74,579 | |||||||||||||||||||
TANGIBLE COMMON EQUITY PER SHARE | |||||||||||||||||||||||||||||
GAAP book value per share | $ | 25.06 | $ | 24.53 | $ | 24.13 | $ | 23.48 | $ | 21.86 | |||||||||||||||||||
Less: Goodwill | (2.18) | (2.10) | (2.02) | (1.93) | (1.90) | ||||||||||||||||||||||||
Less: Intangible assets, net | (2.28) | (2.22) | (1.99) | (1.91) | (2.01) | ||||||||||||||||||||||||
Tangible common equity per share | $ | 20.60 | $ | 20.21 | $ | 20.12 | $ | 19.64 | $ | 17.95 | |||||||||||||||||||
(1) Regulatory measures at March 31, 2022 are presented on an estimated basis. | |||||||||||||||||||||||||||||
(2) 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. |
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