February 8, 2025

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Form 8-K Synchrony Financial For: Apr 27


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Investor Relations    Media Relations

Jennifer Church    Sue Bishop

(203) 585-6508    (203) 585-2802

For Immediate Release: April 27, 2021

Synchrony Reports First Quarter Net Earnings of $1.0 Billion or

$1.73 Per Diluted Share

Growth Drivers Accelerating; Remain Impacted by Pandemic

Credit Quality Continues to be Strong, Provision for Credit Losses Down 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

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

Key Highlights*:

Loan receivables decreased 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} to $76.9 billion

Interest and fees on loans decreased 14{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} to $3.7 billion

Purchase volume increased 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} to $34.7 billion

Average active accounts decreased 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} to 66.3 million

Deposits decreased $1.9 billion, or 3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, to $62.7 billion

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

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

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

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

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


Business and Financial Results for the First Quarter of 2021*

Earnings

Net interest income decreased $451 million, or 12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, to $3.4 billion, mainly due to lower finance charges and late fees.

Retailer share arrangements increased $63 million, or 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, to $1.0 billion, reflecting the improvement in net charge-offs.

Provision for credit losses decreased $1.3 billion, or 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, to $334 million, driven by lower reserves and net charge-offs.

Other income increased $34 million, or 35{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, to $131 million, largely driven by investment income.

Other expense decreased $70 million, or 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, to $932 million, mainly driven by lower operational losses and lower marketing and business development costs, partially offset by an increase in employee costs.

Net earnings increased $739 million to $1.0 billion.

Balance Sheet

Period-end loan receivables decreased 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}; purchase volume increased 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}; and average active accounts decreased 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}.

Deposits decreased $1.9 billion, or 3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, to $62.7 billion and comprised 81{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of funding.

The Company’s balance sheet remained strong with total liquidity (liquid assets and undrawn credit facilities) of $28.0 billion, or 29.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of total assets.

The Company has elected to defer the regulatory capital effects of CECL for two years; the estimated Common Equity Tier 1 ratio was 17.4{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} compared to 14.3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, and the estimated Tier 1 Capital ratio was 18.3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} compared to 15.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, reflecting the Company’s strong capital generation capabilities.

Key Financial Metrics

Return on assets was 4.3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and return on equity was 31.8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}.

Net interest margin was 13.98{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}.

Efficiency ratio was 36.1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}.

Credit Quality

Loans 30+ days past due as a percentage of total period-end loan receivables were 2.83{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} compared to 4.24{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} last year.

Net charge-offs as a percentage of total average loan receivables were 3.62{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} compared to 5.36{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} last year.

The allowance for credit losses as a percentage of total period-end loan receivables was 12.88{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}.

Sales Platforms

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

Retail Card period-end loan receivables decreased 9{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. Interest and fees on loans decreased 16{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, driven primarily by the decline in loan receivables and lower yield. Purchase volume increased 11{14cc2b5881a050199a960a1a3483042b446231310
e72f0dc471a7a1eddd6b0c3} and average active accounts decreased 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}.

Payment Solutions period-end loan receivables decreased 1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, with continued strength in Power Sports and Home Specialty. Interest and fees on loans decreased 11{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, driven primarily by lower late fees,


finance charges, and merchant discount. Purchase volume increased 3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and average active accounts decreased 9{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}.

CareCredit period-end loan receivables decreased 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. Interest and fees on loans decreased 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, driven primarily by lower late fees and merchant discount. Purchase volume was flat and average active accounts decreased 11{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}.

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

Corresponding Financial Tables and Information

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

Conference Call and Webcast Information

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

About Synchrony Financial

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

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

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


Cautionary Statement Regarding Forward-Looking Statements

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

For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this news release and in our public filings, including under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed on February 11, 2021. You should not consider


any list of such factors to be an exhaustive statement of all the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

Non-GAAP Measures

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

SYNCHRONY FINANCIAL
FINANCIAL SUMMARY
(unaudited, in millions, except per share statistics)
Quarter Ended
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
Mar 31,
2020
1Q’21 vs. 1Q’20
EARNINGS
Net interest income $ 3,439  $ 3,659  $ 3,457  $ 3,396 
$ 3,890  $ (451) (11.6) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Retailer share arrangements (989) (1,047) (899) (773) (926) (63) 6.8  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Provision for credit losses 334  750  1,210  1,673  1,677  (1,343) (80.1) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Net interest income, after retailer share arrangements and provision for credit losses 2,116  1,862  1,348  950  1,287  829  64.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Other income 131  82  131  95  97  34  35.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other expense 932  1,000  1,067  986  1,002  (70) (7.0) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Earnings before provision for income taxes 1,315  944  412  59  382  933  244.2  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Provision for income taxes 290  206  99  11  96  194  202.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net earnings $ 1,025  $ 738  $ 313  $ 48  $ 286  $ 739  258.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Net earnings available to common stockholders $ 1,014  $ 728  $ 303  $ 37  $ 275  $ 739  268.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

COMMON SHARE STATISTICS
Basic EPS $ 1.74  $ 1.25  $ 0.52  $ 0.06  $ 0.45  $ 1.29  286.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Diluted EPS $ 1.73  $ 1.24  $ 0.52  $ 0.06  $ 0.45  $ 1.28  284.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Dividend declared per share $ 0.22  $ 0.22  $ 0.22  $ 0.22  $ 0.22  $ —  —  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Common stock price $ 40.66  $ 34.71  $ 26.17  $ 22.16  $ 16.09  $ 24.57  152.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Book value per share $ 21.86  $ 20.49  $ 19.47  $ 19.13  $ 19.27  $ 2.59  13.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Tangible common equity per share(1)

$ 17.95  $ 16.72  $ 15.75  $ 15.28  $ 15.35  $ 2.60  16.9  {14cc2b5881a050199a960a1a3483042b446231310e72f0d
c471a7a1eddd6b0c3}
Beginning common shares outstanding 584.0  583.8  583.7  583.2  615.9  (31.9) (5.2) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Issuance of common shares —  —  —  —  —  —  —  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Stock-based compensation 2.2  0.2  0.1  0.5  0.9  1.3  144.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Shares repurchased (5.1) —  —  —  (33.6) 28.5  (84.8) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Ending common shares outstanding 581.1  584.0  583.8  583.7  583.2  (2.1) (0.4) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Weighted average common shares outstanding 583.3  583.9  583.8  583.7  604.9  (21.6) (3.6) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Weighted average common shares outstanding (fully diluted) 587.5  586.6  584.8  584.4  607.4  (19.9) (3.3) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

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

SYNCHRONY FINANCIAL
SELECTED METRICS
(unaudited, $ in millions)
Quarter Ended
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
Mar 31,
2020
1Q’21 vs. 1Q’20
PERFORMANCE METRICS

Return on assets(1)

4.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 0.2  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.2  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Return on equity(2)

31.8  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 23.6  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 10.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.6  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 9.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 22.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Return on tangible common equity(3)

40.8  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 30.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 13.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.6  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 11.6  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 29.2  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net interest margin(4)

13.98  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 14.64  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 13.80  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 13.53  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 15.15  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (1.17) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Efficiency ratio(5)

36.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 37.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 39.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 36.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 32.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other expense as a {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of average loan receivables, including held for sale 4.82  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 5.01  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 5.44  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 5.04  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 4.77  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}< /span> 0.05  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Effective income tax rate 22.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 21.8  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 24.0  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 18.6  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 25.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (3.0) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
CREDIT QUALITY METRICS
Net charge-offs as a {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of average loan receivables, including held for sale 3.62  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.16  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 4.42  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 5.35  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 5.36  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (1.74) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

30+ days past due as a {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of period-end loan receivables(6)

2.83  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6
b0c3}
3.07  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 2.67  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.13  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 4.24  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (1.41) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

90+ days past due as a {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of period-end loan receivables(6)

1.52  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.40  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.24  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.77  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 2.10  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (0.58) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Net charge-offs $ 699  $ 631  $ 866  $ 1,046  $ 1,125  $ (426) (37.9) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Loan receivables delinquent over 30 days(6)

$ 2,175  $ 2,514  $ 2,100  $ 2,453  $ 3,500 

$ (1,325) (37.9) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Loan receivables delinquent over 90 days(6)

$ 1,170  $ 1,143  $ 973  $ 1,384  $ 1,735  $ (565) (32.6) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Allowance for credit losses (period-end) $ 9,901  $ 10,265  $ 10,146  $ 9,802  $ 9,175  $ 726  7.9  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Allowance coverage ratio(7)

12.88  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 12.54  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 12.92  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 12.52  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 11.13  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

1.75  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
BUSINESS METRICS

Purchase volume(8)(9)

$ 34,749  $ 39,874  $ 36,013  $ 31,155  $ 32,042  $ 2,707  8.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Period-end loan receivables $ 76,858  $ 81,867  $ 78,521  $ 78,313  $ 82,469  $ (5,611) (6.8) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Credit cards $ 73,244  $ 78,455  $ 75,204  $ 75,353  $ 79,832  $ (6,588) (8.3) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Consumer installment loans $ 2,319  $ 2,125  $ 1,987  $ 1,779  $ 1,390  $ 929  66.8  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Commercial credit products $ 1,248  $ 1,250  $ 1,270  $ 1,140  $ 1,203  $ 45  3.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other $ 47  $ 37  $ 60  $ 41  $ 44  $ 6.8  {
14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Average loan receivables, including held for sale $ 78,358  $ 79,452  $ 78,005  $ 78,697  $ 84,428  $ (6,070) (7.2) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

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

65,219  68,540  64,800  63,430  68,849  (3,630) (5.3) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

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

66,280  66,261  64,270  64,836  72,078  (5,798) (8.0) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
LIQUIDITY
Liquid assets
Cash and equivalents $ 16,620  $ 11,524  $ 13,552  $ 16,344  $ 13,704  $ 2,916  21.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total liquid assets $ 22,636  $ 18,321  $ 21,402  $ 22,352  $ 19,225  $ 3,411  17.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Undrawn credit facilities
Undrawn credit facilities $ 5,400  $ 5,400  $ 5,400  $ 5,650 

$ 5,600  $ (200) (3.6) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total liquid assets and undrawn credit facilities $ 28,036  $ 23,721  $ 26,802  $ 28,002  $ 24,825  $ 3,211  12.9  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Liquid assets {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of total assets 23.62  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 19.09  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 22.37  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 23.15  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 19.61  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 4.01  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Liquid assets including undrawn credit facilities {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of total assets 29.25  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 24.72  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 28.02  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 29.00  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 25.32  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.93  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
(1) Return on assets represents net earnings as a percentage of average total assets.
(2) Return on equity represents net earnings as a percentage of average total equity.
(3) Return on tangible common equity represents net earnings available to common stockholders as a percentage of average tangible common equity. Tangible common equity (“TCE”) is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(4) Net interest margin represents net interest income divided by average interest-earning assets.
(5) Efficiency ratio represents (i) other expense, divided by (ii) net interest income, plus other income, less retailer share arrangements.
(6) Based on customer statement-end balances extrapolated to the respective period-end date.
(7) Allowance coverage ratio represents allowance for credit losses divided by total period-end loan receivables.
(8) Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.
(9) Includes activity and accounts associated with loan receivables held for sale.
(10) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

SYNCHRONY FINANCIAL
STATEMENTS OF EARNINGS
(unaudited, $ in millions)
Quarter Ended
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
Mar 31,
2020
1Q’21 vs. 1Q’20
Interest income:
Interest and fees on loans $ 3,732  $ 3,981  $ 3,821  $ 3,808 

$ 4,340  $ (608) (14.0) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Interest on cash and debt securities 10  12  16  22  67  (57) (85.1) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total interest income 3,742  3,993  3,837  3,830  4,407  (665) (15.1) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Interest expense:
Interest on deposits 170  200  245  293 

356  (186) (52.2) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Interest on borrowings of consolidated securitization entities 51  52  53  59  73  (22) (30.1) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Interest on senior unsecured notes 82  82  82  82  88  (6) (6.8) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total interest expense 303  334  380  434  517  (214) (41.4) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net interest income 3,439  3,659  3,457  3,396  3,890  (451) (11.6) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Retailer share arrangements (989) (1,047) (899) (773) (926) (63) 6.8  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Provision for credit losses 334  750  1,210 

1,673  1,677  (1,343) (80.1) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Net interest income, after retailer share arrangements and provision for credit losses 2,116  1,862  1,348  950  1,287  829  64.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other income:
Interchange revenue 171  185  172  134  161  10  6.2  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Debt cancellation fees 69  72  68  69  69  —  —  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Loyalty programs (179) (202) (155) (134) (158) (21) 13.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other 70  27  46  26  25  45  180.0  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total other income 131  82  131  95  97  34  35.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Other expense:
Employee costs 364  347  382  327  324  40  12.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Professional fees 190  186  187  189  197  (7) (3.6) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Marketing and business development 95  139  107  91  111  (16) (14.4) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Information processing 131  128  125  116  123 

6.5  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other 152  200  266  263  247  (95) (38.5) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total other expense 932  1,000  1,067  986  1,002  (70) (7.0) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Earnings before provision for income taxes 1,315  944  412  59  382  933  244.2  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Provision for income taxes 290  206  99  11  96  194  202.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Net earnings $ 1,025  $ 738  $ 313  $ 48  $ 286  $ 739  258.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Net earnings available to common stockholders $ 1,014  $ 728  $ 303  $ 37  $ 275  $ 739  268.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

SYNCHRONY FINANCIAL
STATEMENTS OF FINANCIAL POSITION
(unaudited, $ in millions)
Quarter Ended
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
Mar 31,
2020
Mar 31, 2021 vs. Mar 31, 2020
Assets
Cash and equivalents $ 16,620  $ 11,524 

$ 13,552  $ 16,344  $ 13,704  $ 2,916  21.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Debt securities 6,550  7,469  8,432  6,623  6,146  404  6.6  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Loan receivables:
Unsecuritized loans held for investment 53,823  56,472  52,613  52,629  54,765  (942) (1.7) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Restricted loans of consolidated securitization entities 23,035  25,395  25,908  25,684  27,704  (4,669) (16.9) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total loan receivables 76,858  81,867  78,521 

78,313  82,469  (5,611) (6.8) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Less: Allowance for credit losses (9,901) (10,265) (10,146) (9,802) (9,175) (726) 7.9  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Loan receivables, net 66,957  71,602  68,375  68,511  73,294  (6,337) (8.6) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Loan receivables held for sale 23  18  NM
Goodwill 1,104  1,078  1,078  1,078  1,078  26  2.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Intangible assets, net 1,169  1,125  1,091  1,166  1,208  (39) (3.2) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other assets 3,431  3,145  3,126  2,818  2,603  828  31.8  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total assets $ 95,854  $ 95,948  $ 95,658  $ 96,544  $ 98,038  $ (2,184) (2.2) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Liabilities and Equity
Deposits:

Interest-bearing deposit accounts $ 62,419  $ 62,469  $ 63,195  $ 63,857  $ 64,302  $ (1,883) (2.9) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Non-interest-bearing deposit accounts 342  313  298  291  313  29  9.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total deposits 62,761  62,782  63,493  64,148  64,615  (1,854) (2.9) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Borrowings:
Borrowings of consolidated securitization entities 7,193  7,810  7,809  8,109  9,291  (2,098) (22.6) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Senior unsecured notes 7,967  7,965  7,962  7,960  7,957  10  0.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total borrowings 15,160  15,775  15,771  16,069  17,248  (2,088) (12.1) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Accrued expenses and other liabilities 4,494  4,690  4,295  4,428  4,205  289  6.9  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total liabilities 82,415  83,247  83,559  84,645  86,068  (3,653) (4.2) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Equity:
Preferred stock 734  734  734  734  734  —  — 
Common stock —  —  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Additional paid-in capital 9,592  9,570  9,552  9,532  9,523  69  0.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Retained earnings 11,470  10,621  10,024  9,852  9,960  1,510  15.2  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Accumulated other comprehensive income (loss) (56) (51) (31) (37) (49) (7) 14.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Treasury stock (8,302) (8,174) (8,181) (8,183) (8,199) (103) 1.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total equity 13,439  12,701  12,099  11,899  11,970  1,469  12.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total liabilities and equity $ 95,854  $ 95,948  $ 95,658  $ 96,544  $ 98,038  $ (2,184) (2.2) {14cc2b5881a050199a960a1a3483042b4462
31310e72f0dc471a7a1eddd6b0c3}

SYNCHRONY FINANCIAL
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
(unaudited, $ in millions)
Quarter Ended
Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Interest Average Interest Average Interest Average Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate Balance Expense Rate Balance Expense Rate Balance Expense Rate
Assets

Interest-earning assets:
Interest-earning cash and equivalents $ 14,610  $ 0.11  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} $ 11,244  $ 0.14  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} $ 13,664  $ 0.12  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} $ 15,413  $ 0.08  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} $ 12,902  $ 42  1.31  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Securities available for sale 6,772  0.36  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 8,706  0.37  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 7,984  12  0.60  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 6,804  19  1.12  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 5,954  25  1.69  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Loan receivables, including held for sale:
Credit cards 74,865  3,657  19.81  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 76,039  3,908  20.45  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 74,798  3,752  19.96  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 75,942  3,740 

19.81  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 81,716  4,272  21.03  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Consumer installment loans 2,219  53  9.69  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 2,057  50  9.67  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1,892  46  9.67  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1,546  37  9.63  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1,432  35  9.83  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Commercial credit products 1,231  21  6.92  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1,293  23  7.08  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1,238  22  7.07  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1,150  30  10.49  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1,243  33  10.68  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other 43  NM 63  —  —  77  NM 59  NM 37  —  —  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total loan receivables, including held for sale 78,358  3,732  19.32  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 79,452  3,981  19.93  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 78,005  3,821  19.49  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 78,697  3,808  19.46  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 84,428  4,340  20.67  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total interest-earning assets 99,740  3,742  15.22  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 99,402  3,993  15.98  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 99,653  3,837  15.32  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 100,914  3,830  15.26  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 103,284  4,407  17.16  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Non-interest-earning assets:
Cash and due from banks 1,635  1,525  1,489  1,486  1,450 
Allowance for credit losses (10,225) (10,190) (9,823) (9,221) (8,708)
Other assets 5,305  5,228  5,021  4,779  4,696 
Total non-interest-earning assets (3,285) (3,437) (3,313) (2,956) (2,562)

Total assets $ 96,455  $ 95,965  $ 96,340  $ 97,958  $ 100,722 
Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts $ 62,724  $ 170  1.10  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} $ 62,800  $ 200  1.27  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} $ 63,569  $ 245  1.53  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} $ 64,298  $ 293  1.83  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} $ 64,366  $ 356  2.22  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Borrowings of consolidated securitization entities 7,694  51  2.69  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 7,809  52  2.65  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 8,057  53  2.62  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 8,863  59  2.68  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 9,986  73  2.94  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Senior unsecured notes 7,965  82  4.18  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 7,963  82  4.10  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 7,960  82  4.10  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 7,958  82  4.14  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 8,807  88  4.02  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total interest-bearing liabilities 78,383  303  1.57  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 78,572  334  1.
69 
{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 79,586  380  1.90  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 81,119  434  2.15  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 83,159  517  2.50  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Non-interest-bearing liabilities
Non-interest-bearing deposit accounts 346  308  307  309  299 
Other liabilities 4,655 

4,663  4,308  4,349  4,672 
Total non-interest-bearing liabilities 5,001  4,971  4,615  4,658  4,971 
Total liabilities 83,384  83,543  84,201  85,777  88,130 

Equity
Total equity 13,071  12,422  12,139  12,181  12,592 
Total liabilities and equity $ 96,455  $ 95,965  $ 96,340  $ 97,958  $ 100,722 
< span>Net interest income $ 3,439  $ 3,659  $ 3,457  $ 3,396  $ 3,890 

Interest rate spread(1)

13.65  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 14.29  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 13.42  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 13.11  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 14.66  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net interest margin(2)

13.98  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 14.64  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 13.80  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 13.53  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

15.15  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
(1) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average interest-earning assets.

SYNCHRONY FINANCIAL
BALANCE SHEET STATISTICS
(unaudited, $ in millions, except per share statistics)
Quarter Ended
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
Mar 31,
2020
Mar 31, 2021 vs.
Mar 31, 2020
BALANCE SHEET STATISTICS
Total common equity $ 12,705  $ 11,967  $ 11,365  $ 11,165  $ 11,236  $ 1,469  13.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Total common equity as a {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of total assets 13.25  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 12.47  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 11.88  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 11.56  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 11.46  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.79  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Tangible assets $ 93,581  $ 93,745  $ 93,489  $ 94,300  $ 95,752  $ (2,171) (2.3) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Tangible common equity(1)

$ 10,432 

$ 9,764  $ 9,196  $ 8,921  $ 8,950  $ 1,482  16.6  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Tangible common equity as a {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of tangible assets(1)

11.15  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 10.42  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 9.84  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 9.46  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 9.35  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.80  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Tangible common equity per share(1)

$ 17.95  $ 16.72  $ 15.75  $ 15.28  $ 15.35  $ 2.60  16.9  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

REGULATORY CAPITAL RATIOS(2)(3)

Basel III – CECL Transition

Total risk-based capital ratio(4)

19.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 18.1 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 18.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 17.6  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 16.5  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Tier 1 risk-based capital ratio(5)

18.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 16.8  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 16.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 16.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 15.2  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Tier 1 leverage ratio(6)

14.5  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 14.0  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 13.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 12.7  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 12.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Common equity Tier 1 capital ratio 17.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 15.9  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 15.8  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 15.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 14.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

(1) Tangible common equity (“TCE”) is a non-GAAP measure. We believe TCE is a more meaningful measure of the net asset value of the Company to investors. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(2) Regulatory capital ratios at March 31, 2021 are preliminary and therefore subject to change.
(3) Capital ratios starting March 31, 2020 reflect election to delay for two years an estimate of CECL’s effect on regulatory capital in accordance with the interim final rule issued by U.S. banking agencies in March 2020.
(4) Total risk-based capital ratio is the ratio of total risk-based capital divided by risk-weighted assets.
(5) Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided by risk-weighted assets.
(6) Tier 1 leverage ratio is the ratio of Tier 1 capital divided by total average assets, after certain adjustments. Tier 1 leverage ratios are based upon the use of daily averages for all periods presented.

SYNCHRONY FINANCIAL
PLATFORM RESULTS

(unaudited, $ in millions)
Quarter Ended
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
Mar 31,
2020
1Q’21 vs. 1Q’20
RETAIL CARD

Purchase volume(1)(2)

$ 26,540  $ 31,256  $ 27,374  $ 24,380  $ 24,008  $ 2,532  10.5  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Period-end loan receivables $ 47,855  $ 52,130  $ 49,595  $ 49,967  $ 52,390  $ (4,535) (8.7) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Average loan receivables, including held for sale $ 49,044  $ 50,235  $ 49,503  $ 50,238  $ 53,820  $ (4,776) (8.9) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

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

49,078  49,001  47,065  46,970  53,018  (3,940) (7.4) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Interest and fees on loans $ 2,547  $ 2,719  $ 2,619  $ 2,640  $ 3,037  $ (490) (16.1) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Other income $ 66  $ 50  $ 84  $ 56  $ 59  $ 11.9  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Retailer share arrangements $ (970) $ (1,026) $ (877) $ (752) $ (904) $ (66) 7.3  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
PAYMENT SOLUTIONS

Purchase volume(1)(2)< /span>

$ 5,561  $ 5,942  $ 5,901  $ 4,823  $ 5,375  $ 186  3.5  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Period-end loan receivables $ 19,682  $ 20,153  $ 19,550  $ 19,119  $ 19,973  $ (291) (1.5) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Average loan receivables, including held for sale $ 19,867  $ 19,734  $ 19,247  $ 19,065  $ 20,344  $ (477) (2.3) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

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

11,496  11,536  11,497  11,900  12,681  (1,185) (9.3) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Interest and fees on loans $ 627  $ 673  $ 650  $ 632  $ 706  $ (79) (11.2) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other income $ 19  $ $ 13  $ 14  $ 13  $ 46.2 
Retailer share arrangements $ (15) $ (17) $ (20) $ (18) $ (18) $ (16.7) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
CARECREDIT

Purchase volume(1)

$ 2,648  $ 2,676  $ 2,738  $ 1,952  $ 2,659  $ (11) (0.4) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Period-end loan receivables $ 9,321  $ 9,584  $ 9,376  $ 9,227  $ 10,106  $ (785) (7.8) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471
a7a1eddd6b0c3}
Average loan receivables, including held for sale $ 9,447  $ 9,483  $ 9,255  $ 9,394  $ 10,264  $ (817) (8.0) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Average active accounts (in thousands)(3)

5,706  5,724  5,708  5,966  6,379  (673) (10.6) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Interest and fees on loans $ 558  $ 589  $ 552  $ 536  $ 597  $ (39) (6.5) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other income $ 46 

$ 28  $ 34  $ 25  $ 25  $ 21  84.0  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Retailer share arrangements $ (4) $ (4) $ (2) $ (3) $ (4) $ —  —  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
TOTAL SYF

Purchase volume(1)(2)

$ 34,749  $ 39,874  $ 36,013  $ 31,155  $ 32,042  $ 2,707  8.4  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Period-end loan receivables $ 76,858  $ 81,867  $ 78,521  $ 78,313  $ 82,469  $ (5,611) (6.8) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Average loan receivables, including held for sale $ 78,358  $ 79,452  $ 78,005  $ 78,697  $ 84,428  $ (6,070) (7.2) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

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

66,280  66,261  64,270  64,836  72,078  (5,798) (8.0)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Interest and fees on loans $ 3,732  $ 3,981  $ 3,821  $ 3,808  $ 4,340  $ (608) (14.0) {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Other income $ 131  $ 82  $ 131  $ 95  $ 97  $ 34  35.1  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Retailer share arrangements $ (989) $ (1,047) $ (899) $ (773) $ (926) $ (63) 6.8  {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
(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.

SYNCHRONY FINANCIAL

RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES(1)

(unaudited, $ in millions, except per share statistics)
Quarter Ended
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
Mar 31,
2020

COMMON EQUITY AND REGULATORY CAPITAL MEASURES(2)

GAAP Total equity $ 13,439  $ 12,701  $ 12,099  $ 11,899  $ 11,970 
Less: Preferred stock (734) (734) (734) (734) (734)
Less: Goodwill (1,104) (1,078) (1,078) (1,078) (1,078)
Less: Intangible assets, net (1,169) (1,125) (1,091) (1,166) (1,208)
Tangible common equity $ 10,432  $ 9,764  $ 9,196  $ 8,921  $ 8,950 
Add: CECL transition amount 2,595  2,686  2,656  2,570  2,417 
Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss) 354  341  305  302  304 
Common equity Tier 1 $ 13,381  $ 12,791  $ 12,157  $ 11,793  $ 11,671 
Preferred stock 734  734  734  734  734 
Tier 1 capital $ 14,115 

$ 13,525  $ 12,891  $ 12,527  $ 12,405 
Add: Allowance for credit losses includible in risk-based capital 1,031  1,079  1,034  1,031  1,082 
Total Risk-based capital $ 15,146  $ 14,604  $ 13,925  $ 13,558  $ 13,487 

ASSET MEASURES(2)

Total average assets $ 96,455  $ 95,965  $ 96,340  $ 97,958  $ 100,722 
Adjustments for:
Add: CECL transition amount 2,595  2,686  2,656  2,570  2,417 
Disallowed goodwill and other disallowed intangible assets
(net of related deferred tax liabilities) and other
(1,987) (1,924) (1,906) (1,980) (2,010)
Total assets for leverage purposes $ 97,063  $ 96,727  $ 97,090  $ 98,548  $ 101,129 
Risk-weighted assets $ 76,965  $ 80,561  $ 76,990  $ 77,048  $ 81,639 
CECL FULLY PHASED-IN CAPITAL MEASURES
Tier 1 capital $ 14,115  $ 13,525  $ 12,891  $ 12,527  $ 12,405 
Less: CECL transition adjustment (2,595) (2,686) (2,656) (2,570) (2,417)
Tier 1 capital (CECL fully phased-in) $ 11,520  $ 10,839  $ 10,235  $ 9,957  $ 9,988 
Add: Allowance for credit losses 9,901  10,265  10,146  9,802  9,175 
Tier 1 capital (CECL fully phased-in) + Reserves for credit losses $ 21,421  $ 21,104  $ 20,381  $ 19,759  $ 19,163 
Risk-weighted assets $ 76,965  $ 80,561  $ 76,990  $ 77,048  $ 81,639 
Less: CECL transition adjustment (2,386) (2,477) (2,447) (2,361) (2,204)
Risk-weighted assets (CECL fully phased-in) $ 74,579  $ 78,084  $ 74,543  $ 74,687  $ 79,435 

TANGIBLE COMMON EQUITY PER SHARE
GAAP book value per share $ 21.86  $ 20.49  $ 19.47  $ 19.13  $ 19.27 
Less: Goodwill (1.90) (1.85) (1.85) (1.85) (1.85)
Less: Intangible assets, net (2.01) (1.92) (1.87) (2.00) (2.07)
Tangible common equity per share $ 17.95  $ 16.72  $ 15.75  $ 15.28  $ 15.35 

(1) Regulatory measures at March 31, 2021 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

1Q’21 FINANCIAL RESULTS A P R I L 2 7 , 2 0 2 1 Exhibit 99.3


 

2 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. All comparisons are for the first quarter of 2021 compared to the first quarter of 2020, unless otherwise noted. 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 and our outsourced partners’ computer systems and data centers; the financial performance of our partners; the sufficiency of our allowance for credit losses and the accuracy of the assumptions or estimates used in preparing our financial statements, including those related to the CECL accounting guidance; higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to grow our deposits in the future; damage to our reputation; our ability to securitize our loan receivables, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loan receivables, and lower payment rates on our securitized loan receivables; changes in market interest rates and the impact of any margin compression; effectiveness of our risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, our ability to manage our credit risk; our ability to offset increases in our costs in retailer share arrangements; competition in the consumer finance industry; our concentration in the U.S. consumer credit market; our ability to successfully develop and commercialize new or enhanced products and services; our ability to realize the value of acquisitions and strategic investments; reductions in interchange fees; fraudulent activity; failure of third-parties to provide various services that are important to our operations; international risks and compliance and regulatory risks and costs associated with international operations; alleged infringement of intellectual property rights of others and our ability to protect our intellectual property; litigation and regulatory actions; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions and/or interpretations, and state sales tax rules and regulations; regulation, supervision, examination and enforcement of our business by governmental authorities, the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and other legislative and regulatory developments and the impact of the Consumer Financial Protection Bureau’s (the “CFPB”) 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 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 Relating to Our Business” and “Risk Factors Relating to Regulation” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed on February 11, 2021. You should not consider any list of such factors to be an exhaustive statement of all the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law. Disclaimers


 

3 $1.73 DILUTED EPS compared to $0.45 13.98{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} NET INTEREST MARGIN compared to 15.15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 17.4{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} CET1 liquid assets of $22.6 billion, 23.6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of total assets SUMMARY FINANCIAL METRICS CAPITAL 1Q’21 Financial Highlights $76.9 billion LOAN RECEIVABLES compared to $82.5 billion 66.3 million AVERAGE ACTIVE ACCOUNTS compared to 72.1 million $328 million CAPITAL RETURNED $200 million of share repurchases $62.7 billion DEPOSITS 81{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of funding 3.62{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} NET CHARGE-OFFS compared to 5.36{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 36.1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} EFFICIENCY RATIO compared to 32.7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}


 

4 1Q’21 Business Highlights ~60{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} DIGITAL APPLICATIONS* *Percentage of Total Applications 50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} ONLINE SALES* *Percentage of Retail Card Total ~65{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} DIGITAL PAYMENTS* *1Q’21 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of Total Payments 14{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} MOBILE CHANNEL APPLICATION GROWTH BUSINESS EXPANSION CONSUMER PERFORMANCE DIGITAL ACCELERATION 4.9 5.0 1Q’20 1Q’21 $445 $524 1Q’20 1Q’21 $1,171 $1,182 1Q’20 1Q’21 3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 18{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} New Accounts Purchase Volume per Account Average Balance per Account (a) (b) (c)


 

5 ~$405B Health OOP Expenditures ~$100B Pet Expenditures Ability to leverage our distribution and scale to access both markets to deliver new products, financing alternatives and experiences Market Overview Capitalize on Changing Healthcare and Pet Landscape, Increase Focus on Wellness Core Growth Expansion ‘Vet to Pet’ Continue to unlock growth opportunities in Dental, Veterinary and Specialty Markets Simplify customer and provider experience Extended flexible payments are currently a small component of OOP expense Enhance product offerings to grow core medical Access health systems and practice management systems More points of access to healthcare services Continue integration of Pets Best insurance offering capturing payment synergies Grow presence in pet insurance market Expand into adjacent pet products, services and retail (a) (b) CareCredit – Leading Franchise, Positioned for Growth


 

6 ~250,000 PROVIDER LOCATIONS up 41{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} from 1Q’14 >40 NUMBER OF SPECIALTIES expanded into 13 new specialties since 2018 $9.3 billion LOAN RECEIVABLES up 44{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} from 1Q’14 ENGAGEMENT DEPTH GROWTH 77 NET PROMOTER SCORE over 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} higher than the industry average ~59{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} REPEAT SALES compared to ~54{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in 1Q’19 5.7 million ACTIVE ACCOUNTS up 28{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} from 1Q’14 13 HEALTH SYSTEMS launched 8 new programs in 2020 >350,000 PETS IN FORCE up 174{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} since acquisition of Pets Best 92{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} CUSTOMER SATISFACTION up from 78{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in 2009 CareCredit – At a Glance (a) (a)


 

7 Financial Results • $1.0 billion Net earnings, $1.73 diluted EPS • Net interest income down 12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} − Interest and fees on loans down 14{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} driven by increase in payment rate and lower delinquencies − Interest expense decrease driven primarily by lower benchmark rates • Provision for credit losses down 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} −Decrease is driven by reserve change and lower net charge-offs − Lower reserves driven by improved macroeconomic outlook and lower receivables −Net charge-offs of 3.62{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} compared to 5.36{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in the prior year driven by the impact of improvements in customer payment behavior • Other expense down 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} −Decrease primarily due to lower operational losses 1Q’21 Highlights Summary earnings statement Total interest income $3,742 $4,407 $(665) (15){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Total interest expense 303 517 214 41{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Net interest income (NII) 3,439 3,890 (451) (12){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Retailer share arrangements (RSA) (989) (926) (63) (7){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Provision for credit losses 334 1,677 1,343 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Other income 131 97 34 35{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Other expense 932 1,002 70 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Pre-tax earnings 1,315 382 933 244{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Provision for income taxes 290 96 (194) (202){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Net earnings 1,025 286 739 258{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Preferred dividends 11 11 0 0{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Net earnings available to common $1,014 $275 $739 269{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} stockholders Diluted earnings per share $1.73 $0.45 $1.28 $ in millions, except per share statistics B/(W) 1Q’21 1Q’20 $ {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}


 

8 $4,340 $3,732 1Q’20 1Q’21 $82.5 $76.9 1Q’20 1Q’21 $32.0 $34.7 1Q’20 1Q’21 72.1 66.3 1Q’20 1Q’21 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}Purchase volume $ in billions Loan receivables $ in billions Average active accounts in millions Interest and fees on loans $ in millions $94.0 $4,686 $44.0 75.1 Dual Card / Co-Brand $12.3 (10){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Dual Card / Co-Brand$13.0 $19.9 $17.9 Growth Metrics (7){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (8){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (14){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}


 

9 $19.7 $20.0 1Q ‘2 1 1Q ‘2 0 $47.9 $52.4 1Q ‘2 1 1Q ‘2 0 Platform Results CareCredit Loan receivables, $ in billions (8){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} $9.3 $10.1 1Q ‘2 1 1Q ‘2 0 Payment Solutions Loan receivables, $ in billions (1){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Retail Card Loan receivables, $ in billions (9){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Accounts $23.9 53.0 $3,037 $26.5 49.1 $2,547 11{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (7){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (16){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} V{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Purchase volume Interest and fees on loans 1Q’211Q’20 Accounts (a) • Receivable reduction primarily due to 2020 shutdowns and higher payment rates. Broad-based strength in purchase volume. • Interest and fees on loans down 16{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} driven primarily by lower loan receivables and lower yield. • Receivable reduction primarily due to 2020 shutdowns and higher payment rates. Continued strength in Power Sports and Home Specialty. • Interest and fees on loans down 11{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} driven by lower late fees, finance charges, and merchant discount. • Receivable reduction primarily due to 2020 shutdowns and higher payment rates. • Interest and fees on loans down 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} driven primarily by lower late fees and merchant discount. $5.4 12.7 $706 $5.6 11.5 $627 3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (9){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (11){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} V{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Purchase volume Interest and fees on loans 1Q’211Q’20 Accounts $2.7 6.4 $597 $2.6 5.7 $558 (0){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (11){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (7){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} V{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Purchase volume Interest and fees on loans 1Q’211Q’20 Accounts


 

10 Net Interest Income Net Interest Income $ in millions {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of average interest-earning assets (12){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} • Net interest income decreased 12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} −Driven by lower finance charges and late fees • Net interest margin (NIM) down 117 bps − Loan receivables yield: (111) bps o Receivables yield of 19.32{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, down 135 bps, driven by higher payment rates and lower delinquencies −Mix of Interest-earnings assets: (61) bps o Receivable mix decreased as a percent of total Earning Assets to 78.6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} from 81.7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} − Liquidity portfolio yield: (23) bps − Interest-bearing liabilities cost: 78 bps o Total cost decreased by 93 bps to 1.57{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} due primarily to lower benchmark rates • 1Q’21 payment rate is ~200 bps higher compared to 5-year historical average 1Q’21 Highlights $3,890 $3,439 15.15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 13.98{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1Q’20 1Q’21 1Q’20 NIM 15.15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Loan receivables yield (1.11){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Mix of Interest-earning assets (0.61){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Liquidity portfolio yield (0.23){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Interest-bearing liabilities cost 0.78{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1Q’21 NIM 13.98{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} NIM Walk 17.8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 15.8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 19.4{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 15.6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 15.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 15.9{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Jan ’21 Feb ’21 Mar ’21 Avg. (‘16- ‘20) Payment Rate Trends (a)


 

11 Asset Quality Metrics Allowance for credit losses (a) $ in millions, {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of period-end loan receivables $3,957 $3,625 $3,723 $3,874 $3,500 $2,453 $2,100 $2,514 $2,175 4.92{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 4.43{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 4.47{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 4.44{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 4.24{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.13{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 2.67{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.07{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 2.83{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1Q’19 2Q’19 3Q’19 4Q’19 1Q’20 2Q’20 3Q’20 4Q’20 1Q’21 $1,344 $1,331 $1,221 $1,109 $1,125 $1,046 $866 $631 $699 6.06{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 6.01{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 5.35{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 5.15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 5.36{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 5.35{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 4.42{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.16{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.62{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1Q’19 2Q’19 3Q’19 4Q’19 1Q’20 2Q’20 3Q’20 4Q’20 1Q’21 Net charge-offs $ in millions, {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of average loan receivables including held for sale 30+ days past due $ in millions, {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of period-end loan receivables $2,019 $1,768 $1,723 $1,877 $1,735 $1,384 $973 $1,143 $1,170 2.51{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 2.16{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 2.07{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 2.15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 2.10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.77{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.24{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.40{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1.52{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1Q’19 2Q’19 3Q’19 4Q’19 1Q’20 2Q’20 3Q’20 4Q’20 1Q’21 90+ days past due $ in millions, {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of period-end loan receivables $5,942 $5,809 $5,607 $5,602 $9,175 $9,802 $10,146 $10,265 $9,901 7.39{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 7.10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 6.74{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 6.42{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 11.13{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 12.52{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 12.92{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 12.54{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 12.88{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1Q’19 2Q’19 3Q’19 4Q’19 1Q’20 2Q’20 3Q’20 4Q’20 1Q’21


 

12 Other Expense $1,002 $932 1Q’20 1Q’21 Other Expense $ in millions (7){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Other expense down 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} • Decrease primarily due to lower operational losses, lower Marketing and Business Development costs partially offset by Employee costs Efficiency ratio 36.1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} vs. 32.7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} prior year • Increase driven by lower revenue partially offset by reduction in Other expense V$ V{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Employee costs $324 $364 $40 12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Professional fees 197 190 (7) (4){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Marketing/BD 111 95 (16) (14){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Information processing 123 131 8 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Other 247 152 (95) (38){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Other expense $1,002 $932 $(70) (7){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Efficiency(a) 32.7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 36.1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 3.4 pts. 1Q’20 1Q’21 1Q’21 Highlights


 

13 Funding, Capital and Liquidity Funding Sources $ in billions Deposits Securitization Unsecured $64.6 $62.7 $9.3 $7.2 $8.0 $8.0 1Q’20 1Q’21 $81.9 $77.9 Deposits Securitization Unsecured V$ $0 $(2.1) $(1.9) V{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Liquidity (a) $ in billions $24.8 $28.0 1Q’20 1Q’21 Liquid assets Undrawn credit facilities Total liquidity {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of Total assets CET1 Capital Ratio 14.3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 17.4{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1Q’20 1Q’21 Tier 1 Capital Ratio 15.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 18.3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1Q’20 1Q’21 Total Capital Ratio 16.5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 19.7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1Q’20 1Q’21 Tier 1 Capital + Credit Loss Reserve Ratio 24.1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 28.7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 1Q’20 1Q’21 Capital Ratios (b) 79{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 11{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 81{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 9{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} +2 pts. (2) pts. 0 pt. $19.2 5.6 $24.8 25.3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} $22.6 5.4 $28.0 29.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} *The “Tier 1 Capital + Credit Loss Reserve Ratio” is the sum of our “Tier 1 Capital” and “Allowance for Credit Losses,” divided by our “Total Risk-Weighted Assets.” 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 *


 

14 2021 Framework on Key Drivers Purchase Volume • 1H’21: 1Q stronger than anticipated, 2Q higher comparing against 2020 Covid restrictions • 2H’21: improving growth trends as pandemic impact moderates and macroeconomic growth accelerates Loan Receivable Growth • 1H’21: continued higher payment rates from stimulus expected to impact loan growth • 2H’21: slowing payment rates and purchase volume growth contribute to loan growth • Gap non-renewal may result in assets being reclassified to held-for-sale in ‘21 Net Interest Margin • Overall: no long-term change to NIM when excluding excess liquidity • 1H’21: higher payment rates will contribute to continued excess liquidity impacting asset mix • 2H’21: asset growth reduces excess liquidity and slowing payment rates positively impacts interest and fee yields leading to increasing NIM Provision for Credit Losses • DQs & NCOs: increase from current levels in NCOs and delinquencies in 2H‘21, with peak delinquencies now expected ~1Q‘22 • Reserve: largely driven by asset growth, credit performance and impacts from change in the macroeconomic scenario; certain scenarios could indicate further reserve releases RSAs – {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of ALR • 1H’21: RSA to remain elevated, primarily reflecting strong program performance • 2H’21: RSA trends lower generally reflecting higher NCOs partially offset by higher revenue Operating Expenses • Continued realization of the expense reduction plan through ‘21 • Partially offsetting cost reductions will be an increase for growth related items (e.g., active accounts, higher marketing expenses, etc.) and an increase for delinquent accounts (comments and trends in comparison to 2020, except where noted)


 

15 Growth accelerates Payment rates remain a headwind Credit outperforms Continue CareCredit Expansion • Purchase volume of $35 billion, +8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} • Originated 5 million new accounts, +3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} • Leverage digital capabilities • Loan receivables of $77 billion down (7){14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} • NIM of 13.98{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} down (117) bps • Delinquencies down (141) bps for 30+ (58) bps for 90+ • NCOs down (174) bps • Capitalize on changing Healthcare and Pet Landscape • Deliver new products, financing alternatives and experiences 1Q’21 Key Business Themes


 

16 Footnotes 1Q’21 Business Highlights | slide 4: (a) New Accounts represent accounts that were approved in the respective period, in millions. (b) Purchase Volume per Account is calculated as the Purchase volume divided by Average active accounts, in $. (c) Average Balance per Account is calculated as the Average loan receivables divided by Average active accounts, in $. CareCredit: Leading Franchise, Positioned for Growth | slide 5: (a) Total out-of-pocket for human health expenditures per National Health Expenditure Data (2019): Centers for Medicare/Medicaid Services. (b) Total 2020 U.S. Pet Industry Expenditures per The American Pet Products Association (APPA). CareCredit: At a Glance | slide 6: (a) Based on Q3 2020 Cardholder Engagement Study by Chadwick Martin Bailey. Platform Results | slide 9: (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. Net Interest Income | slide 10: (a) Payment rate is calculated as customer payments divided by beginning of period loan receivables. Payment rate data excludes amounts related to the Walmart portfolio, which was sold in October 2019. Asset Quality Metrics| slide 11: (a) Allowance for credit losses reflects adoption of CECL on January 1, 2020, which included a $3.0 billion increase in reserves upon adoption. Other Expense| slide 12: (a) “Other expense” divided by sum of “NII” plus “Other income” less “Retailer share arrangements (RSA)”. Funding, Capital and Liquidity | slide 13: (a) Does not include unencumbered assets in the Bank that could be pledged. (b) Capital ratios reflect election to delay an estimate of CECL’s effect on regulatory capital for two years in accordance with the interim final rule issued by U.S. banking agencies in March 2020. CET1, Tier 1, and Total Capital Ratio are on a Transition basis.


 


 

18 Non-GAAP Reconciliation* $12,405 (2,417) $9,988 9,175 $19,163 $81,639 (2,204) $79,435 The following table sets forth the components of our Tier 1 Capital + Reserve ratio for the periods indicated below. 2020 2021 Total At March 31, Tier 1 capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: CECL transition adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tier 1 capital (CECL fully phased-in) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add: Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tier 1 capital (CECL fully phased-in) plus Reserves for credit losses. Risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: CECL transition adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Risk-weighted assets (CECL fully phased-in) . . . . . . . . . . . . . . . . . . . . . . $14,115 (2,595) $11,520 9,901 $21,421 $76,965 (2,386) $74,579 * – Estimated at March 31, 2021, $ in millions.


 

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 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.

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