Exhibit 99.2


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL SUMMARY
 
 
 
 
 
 
 
 
 
 
(unaudited, in millions, except per share statistics)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Mar 31,
2014
 
1Q'15 vs. 1Q'14
EARNINGS
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
2,875

 
$
2,978

 
$
2,879

 
$
2,720

 
$
2,743

 
$
132

4.8
 %
Retailer share arrangements
(660
)
 
(698
)
 
(693
)
 
(590
)
 
(594
)
 
(66
)
11.1
 %
Net interest income, after retailer share arrangements
2,215

 
2,280

 
2,186

 
2,130

 
2,149

 
66

3.1
 %
Provision for loan losses
687

 
797

 
675

 
681

 
764

 
(77
)
(10.1
)%
Net interest income, after retailer share arrangements and provision for loan losses
1,528

 
1,483

 
1,511

 
1,449

 
1,385

 
143

10.3
 %
Other income
101

 
162

 
96

 
112

 
115

 
(14
)
(12.2
)%
Other expense
746

 
792

 
728

 
797

 
610

 
136

22.3
 %
Earnings before provision for income taxes
883

 
853

 
879

 
764

 
890

 
(7
)
(0.8
)%
Provision for income taxes
331

 
322

 
331

 
292

 
332

 
(1
)
(0.3
)%
Net earnings
$
552

 
$
531

 
$
548

 
$
472

 
$
558

 
$
(6
)
(1.1
)%
Net earnings attributable to common stockholders
$
552

 
$
531

 
$
548

 
$
472

 
$
558

 
$
(6
)
(1.1
)%
 


 


 


 
 
 
 
 
 
 
COMMON SHARE STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS
$
0.66

 
$
0.64

 
$
0.70

 
$
0.67

 
$
0.79

 
$
(0.13
)
(16.5
)%
Diluted EPS
$
0.66

 
$
0.64

 
$
0.70

 
$
0.67

 
$
0.79

 
$
(0.13
)
(16.5
)%
Common stock price
$
30.35

 
$
29.75

 
$
24.55

 
n/a

 
n/a

 
$
30.35

n/a

Book value per share
$
13.24

 
$
12.57

 
$
11.92

 
$
9.06

 
$
8.57

 
$
4.67

54.5
 %
Tangible book value per share(1)
$
11.43

 
$
10.81

 
$
10.25

 
$
7.06

 
$
6.56

 
$
4.87

74.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning common shares outstanding
833.8

 
833.8

 
705.3

 
705.3

 
705.3

 
128.5

18.2
 %
Issuance of common shares through initial public offering
—

 
—

 
128.5

 
—

 
—

 
—

NM

Shares repurchased
—

 
—

 
—

 
—

 
—

 
—

NM

Ending common shares outstanding
833.8

 
833.8

 
833.8

 
705.3

 
705.3

 
128.5

18.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
833.8

 
833.8

 
781.8

 
705.3

 
705.3

 
128.5

18.2
 %
Weighted average common shares outstanding (fully diluted)
835.0

 
834.3

 
781.9

 
705.3

 
705.3

 
129.7

18.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Tangible Common Equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP
Measures and Calculations of Regulatory Measures.

1


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
SELECTED METRICS
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions, except account data)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Mar 31,
2014
 
1Q'15 vs. 1Q'14
PERFORMANCE METRICS
 
 
 
 
 
 
 
 
 
 
 
 
Return on assets(1)
3.0
%
 
2.7
%
 
3.2
%
 
3.1
%
 
3.9
%
 


(0.9
)%
Return on equity(2)
20.8
%
 
20.2
%
 
26.8
%
 
29.9
%
 
35.3
%
 


(14.5
)%
Return on tangible common equity(3)
24.1
%
 
23.4
%
 
32.4
%
 
38.5
%
 
44.2
%
 


(20.1
)%
Net interest margin(4)
15.79
%
 
15.60
%
 
17.11
%
 
17.84
%
 
18.83
%
 


(3.04
)%
Efficiency ratio(5)
32.2
%
 
32.4
%
 
31.9
%
 
35.5
%
 
26.9
%
 


5.3
 %
Other expense as a % of average loan receivables, including held for sale
5.06
%
 
5.16
%
 
5.09
%
 
5.77
%
 
4.51
%
 


0.55
 %
Effective income tax rate
37.5
%
 
37.7
%
 
37.7
%
 
38.2
%
 
37.3
%
 


0.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY METRICS
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs as a % of average loan receivables, including held for sale
4.53
%
 
4.32
%
 
4.05
%
 
4.88
%
 
4.86
%
 


(0.33
)%
30+ days past due as a % of period-end loan receivables
3.79
%
 
4.14
%
 
4.26
%
 
3.82
%
 
4.09
%
 


(0.30
)%
90+ days past due as a % of period-end loan receivables
1.81
%
 
1.90
%
 
1.85
%
 
1.65
%
 
1.93
%
 


(0.12
)%
Net charge-offs
$
668

 
$
663

 
$
579

 
$
673

 
$
658

 
$
10

1.5
 %
Loan receivables delinquent over 30 days
$
2,209

 
$
2,536

 
$
2,416

 
$
2,097

 
$
2,220

 
$
(11
)
(0.5
)%
Loan receivables delinquent over 90 days
$
1,056

 
$
1,162

 
$
1,051

 
$
908

 
$
1,046

 
$
10

1.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses (period-end)
$
3,255

 
$
3,236

 
$
3,102

 
$
3,006

 
$
2,998

 
$
257

8.6
 %
Allowance coverage ratio(6)
5.59
%
 
5.28
%
 
5.46
%
 
5.48
%
 
5.52
%
 


0.07
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
BUSINESS METRICS
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(7)
$
23,139

 
$
30,081

 
$
26,004

 
$
25,978

 
$
21,086

 
$
2,053

9.7
 %
Period-end loan receivables
$
58,248

 
$
61,286

 
$
56,767

 
$
54,873

 
$
54,285

 
$
3,963

7.3
 %
Credit cards
$
55,866

 
$
58,880

 
$
54,263

 
$
52,406

 
$
52,008

 
$
3,858

7.4
 %
Consumer installment loans
$
1,062

 
$
1,063

 
$
1,081

 
$
1,047

 
$
963

 
$
99

10.3
 %
Commercial credit products
$
1,295

 
$
1,320

 
$
1,404

 
$
1,405

 
$
1,299

 
$
(4
)
(0.3
)%
Other
$
25

 
$
23

 
$
19

 
$
15

 
$
15

 
$
10

66.7
 %
Average loan receivables, including held for sale
$
59,775

 
$
59,547

 
$
57,391

 
$
55,363

 
$
55,495

 
$
4,280

7.7
 %
Period-end active accounts (in thousands)(8)
59,761

 
64,286

 
60,489

 
59,248

 
57,349

 
2,412

4.2
 %
Average active accounts (in thousands)(8)
61,604

 
61,667

 
59,907

 
58,386

 
59,342

 
2,262

3.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
LIQUIDITY
 
 
 
 
 
 
 
 
 
 
 
 
Liquid assets
 
 
 
 
 
 
 
 
 
 
 
 
Cash and equivalents
$
11,218

 
$
11,828

 
$
14,808

 
$
6,782

 
$
5,331

 
$
5,887

110.4
 %
Total liquid assets
$
13,813

 
$
12,942

 
$
14,077

 
$
6,119

 
$
4,806

 
$
9,007

187.4
 %
Undrawn credit facilities
 
 
 
 
 
 
 
 
 
 
 
 
Undrawn committed securitization financings
$
6,600

 
$
6,100

 
$
5,650

 
$
5,650

 
$
450

 
$
6,150

NM

Total liquid assets and undrawn credit facilities
$
20,413

 
$
19,042

 
$
19,727

 
$
11,769

 
$
5,256

 
$
15,157

NM

Liquid assets % of total assets
18.99
%
 
17.09
%
 
19.16
%
 
9.69
%
 
8.11
%
 


10.88
 %
Liquid assets including undrawn committed securitization financings % of total assets
28.07
%
 
25.15
%
 
26.85
%
 
18.63
%
 
8.87
%
 


19.20
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
(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 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, after retailer share arrangements, plus other income.
(6) Allowance coverage ratio represents allowance for loan losses divided by total period-end loan receivables.
(7) 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.
(8) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

2


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
STATEMENTS OF EARNINGS
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Mar 31,
2014
 
1Q'15 vs. 1Q'14
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
3,140

 
$
3,252

 
$
3,116

 
$
2,920

 
$
2,928

 
$
212

7.2
 %
Interest on investment securities
10

 
8

 
7

 
6

 
5

 
5

100.0
 %
Total interest income
3,150

 
3,260

 
3,123

 
2,926

 
2,933

 
217

7.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
137

 
139

 
126

 
109

 
96

 
41

42.7
 %
Interest on borrowings of consolidated securitization entities
52

 
57

 
57

 
54

 
47

 
5

10.6
 %
Interest on third-party debt
82

 
78

 
46

 
—

 
—

 
82

NM

Interest on related party debt
4

 
8

 
15

 
43

 
47

 
(43
)
(91.5
)%
Total interest expense
275

 
282

 
244

 
206

 
190

 
85

44.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
2,875

 
2,978

 
2,879

 
2,720

 
2,743

 
132

4.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Retailer share arrangements
(660
)
 
(698
)
 
(693
)
 
(590
)
 
(594
)
 
(66
)
11.1
 %
Net interest income, after retailer share arrangements
2,215

 
2,280

 
2,186

 
2,130

 
2,149

 
66

3.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
687

 
797

 
675

 
681

 
764

 
(77
)
(10.1
)%
Net interest income, after retailer share arrangements and provision for loan losses
1,528

 
1,483

 
1,511

 
1,449

 
1,385

 
143

10.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income:
 
 
 
 
 
 
 
 
 
 
 
 
Interchange revenue
100

 
120

 
101

 
92

 
76

 
24

31.6
 %
Debt cancellation fees
65

 
67

 
68

 
70

 
70

 
(5
)
(7.1
)%
Loyalty programs
(78
)
 
(91
)
 
(84
)
 
(63
)
 
(43
)
 
(35
)
81.4
 %
Other
14

 
66

 
11

 
13

 
12

 
2

16.7
 %
Total other income
101

 
162

 
96

 
112

 
115

 
(14
)
(12.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense:
 
 
 
 
 
 
 
 
 
 
 
 
Employee costs
239

 
227

 
239

 
207

 
193

 
46

23.8
 %
Professional fees(1)
162

 
139

 
149

 
145

 
130

 
32

24.6
 %
Marketing and business development
82

 
165

 
115

 
97

 
83

 
(1
)
(1.2
)%
Information processing
63

 
60

 
47

 
53

 
52

 
11

21.2
 %
Other(1)
200

 
201

 
178

 
295

 
152

 
48

31.6
 %
Total other expense
746

 
792

 
728

 
797

 
610

 
136

22.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before provision for income taxes
883

 
853

 
879

 
764

 
890

 
(7
)
(0.8
)%
Provision for income taxes
331

 
322

 
331

 
292

 
332

 
(1
)
(0.3
)%
Net earnings attributable to common shareholders
$
552

 
$
531

 
$
548

 
$
472

 
$
558

 
$
(6
)
(1.1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) We have reclassified certain amounts within Professional fees to Other for all periods presented to conform to the current period classifications.


3


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENTS OF FINANCIAL POSITION
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Mar 31,
2014
 
Mar 31, 2015 vs.
Mar 31, 2014
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Cash and equivalents
$
11,218

 
$
11,828

 
$
14,808

 
$
6,782

 
$
5,331

 
$
5,887

110.4
 %
Investment securities
3,121

 
1,598

 
325

 
298

 
265

 
2,856

NM

Loan receivables:
 
 
 
 
 
 
 
 
 
 
 
 
Unsecuritized loans held for investment
33,424

 
34,335

 
30,474

 
28,280

 
29,101

 
4,323

14.9
 %
Restricted loans of consolidated securitization entities
24,824

 
26,951

 
26,293

 
26,593

 
25,184

 
(360
)
(1.4
)%
Total loan receivables
58,248

 
61,286

 
56,767

 
54,873

 
54,285

 
3,963

7.3
 %
Less: Allowance for loan losses
(3,255
)
 
(3,236
)
 
(3,102
)
 
(3,006
)
 
(2,998
)
 
(257
)
8.6
 %
Loan receivables, net
54,993

 
58,050

 
53,665

 
51,867

 
51,287

 
3,706

7.2
 %
Loan receivables held for sale
359

 
332

 
1,493

 
1,458

 
—

 
359

NM

Goodwill
949

 
949

 
949

 
949

 
949

 
—

—
 %
Intangible assets, net
557

 
519

 
449

 
463

 
464

 
93

20.0
 %
Other assets
1,524

 
2,431

 
1,780

 
1,358

 
949

 
575

60.6
 %
Total assets
$
72,721

 
$
75,707

 
$
73,469

 
$
63,175

 
$
59,245

 
$
13,476

22.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposit accounts
$
34,788

 
$
34,847

 
$
32,480

 
$
30,258

 
$
27,123

 
$
7,665

28.3
 %
Non-interest-bearing deposit accounts
162

 
108

 
209

 
204

 
235

 
(73
)
(31.1
)%
Total deposits
34,950

 
34,955

 
32,689

 
30,462

 
27,358

 
7,592

27.8
 %
Borrowings:
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings of consolidated securitization entities
13,817

 
14,967

 
15,091

 
15,114

 
14,642

 
(825
)
(5.6
)%
Bank term loan
5,651

 
8,245

 
7,495

 
—

 
—

 
5,651

NM

Senior unsecured notes
4,592

 
3,593

 
3,593

 
—

 
—

 
4,592

NM

Related party debt
—

 
655

 
1,405

 
7,859

 
8,062

 
(8,062
)
(100.0
)%
Total borrowings
24,060

 
27,460

 
27,584

 
22,973

 
22,704

 
1,356

6.0
 %
Accrued expenses and other liabilities
2,675

 
2,814

 
3,255

 
3,347

 
3,141

 
(466
)
(14.8
)%
Total liabilities
61,685

 
65,229

 
63,528

 
56,782

 
53,203

 
8,482

15.9
 %
Equity:
 
 
 
 
 
 
 
 
 
 
 
 
Parent’s net investment
—

 
—

 
—

 
—

 
6,052

 
(6,052
)
(100.0
)%
Common stock
1

 
1

 
1

 
1

 
—

 
1

NM

Additional paid-in capital
9,418

 
9,408

 
9,401

 
6,399

 
—

 
9,418

NM

Retained earnings
1,631

 
1,079

 
548

 
—

 
—

 
1,631

NM

Accumulated other comprehensive income:
(14
)
 
(10
)
 
(9
)
 
(7
)
 
(10
)
 
(4
)
40.0
 %
Total equity
11,036

 
10,478

 
9,941

 
6,393

 
6,042

 
4,994

82.7
 %
Total liabilities and equity
$
72,721

 
$
75,707

 
$
73,469

 
$
63,175

 
$
59,245

 
$
13,476

22.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 

4


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Mar 31, 2015
 
Dec 31, 2014
 
Sep 30, 2014
 
Jun 30, 2014
 
Mar 31, 2014
 
 
 
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
$
11,331

 
$
6

 
0.21
%
 
$
13,631

 
$
7

 
0.20
%
 
$
9,793

 
$
4

 
0.16
%
 
$
5,489

 
$
3

 
0.22
%
 
$
4,001

 
$
2

 
0.21
%
Securities available for sale
2,725

 
4

 
0.60
%
 
962

 
1

 
0.40
%
 
309

 
3

 
3.89
%
 
285

 
3

 
4.22
%
 
250

 
3

 
4.92
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan receivables:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit cards, including held for sale
57,390

 
3,079

 
21.76
%
 
57,075

 
3,186

 
21.68
%
 
54,891

 
3,054

 
22.32
%
 
52,957

 
2,860

 
21.66
%
 
53,211

 
2,867

 
22.10
%
Consumer installment loans
1,057

 
25

 
9.59
%
 
1,072

 
27

 
9.78
%
 
1,070

 
25

 
9.37
%
 
1,004

 
24

 
9.59
%
 
959

 
23

 
9.84
%
Commercial credit products
1,305

 
36

 
11.19
%
 
1,379

 
38

 
10.70
%
 
1,412

 
37

 
10.51
%
 
1,387

 
36

 
10.41
%
 
1,311

 
38

 
11.89
%
Other
23

 
—

 
—
%
 
21

 
1

 
NM

 
18

 
—

 
—
%
 
15

 
—

 
—
%
 
14

 
—

 
—
%
Total loan receivables, including held for sale
59,775

 
3,140

 
21.30
%
 
59,547

 
3,252

 
21.21
%
 
57,391

 
3,116

 
21.78
%
 
55,363

 
2,920

 
21.16
%
 
55,495

 
2,928

 
21.64
%
Total interest-earning assets
73,831

 
3,150

 
17.30
%
 
74,140

 
3,260

 
17.07
%
 
67,493

 
3,123

 
18.56
%
 
61,137

 
2,926

 
19.20
%
 
59,746

 
2,933

 
20.13
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
497

 
 
 
 
 
1,220

 
 
 
 
 
1,260

 
 
 
 
 
637

 
 
 
 
 
561

 
 
 
 
Allowance for loans losses
(3,272
)
 
 
 
 
 
(3,160
)
 
 
 
 
 
(3,058
)
 
 
 
 
 
(3,005
)
 
 
 
 
 
(2,931
)
 
 
 
 
Other assets
2,802

 
 
 
 
 
2,831

 
 
 
 
 
2,605

 
 
 
 
 
2,446

 
 
 
 
 
2,045

 
 
 
 
Total non-interest-earning assets
27

 
 
 
 
 
891

 
 
 
 
 
807

 
 
 
 
 
78

 
 
 
 
 
(325
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
73,858

 
 
 
 
 
$
75,031

 
 
 
 
 
$
68,300

 
 
 
 
 
$
61,215

 
 
 
 
 
$
59,421

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposit accounts
$
34,981

 
$
137

 
1.59
%
 
$
33,980

 
$
139

 
1.59
%
 
$
31,459

 
$
126

 
1.61
%
 
$
28,568

 
$
109

 
1.53
%
 
$
26,317

 
$
96

 
1.50
%
Borrowings of consolidated securitization entities
14,101

 
52

 
1.50
%
 
14,766

 
57

 
1.50
%
 
15,102

 
57

 
1.51
%
 
14,727

 
54

 
1.47
%
 
14,830

 
47

 
1.30
%
Bank term loan(1)
6,531

 
47

 
2.92
%
 
8,057

 
46

 
2.22
%
 
3,747

 
28

 
3.00
%
 
—

 
—

 
—
%
 
—

 
—

 
—
%
Senior unsecured notes(1)
4,093

 
35

 
3.47
%
 
3,593

 
32

 
3.46
%
 
1,797

 
18

 
4.02
%
 
—

 
—

 
—
%
 
—

 
—

 
—
%
Related party debt(1)
407

 
4

 
3.99
%
 
843

 
8

 
3.68
%
 
4,582

 
15

 
1.31
%
 
7,959

 
43

 
2.17
%
 
8,286

 
47

 
2.33
%
Total interest-bearing liabilities
60,113

 
275

 
1.86
%
 
61,239

 
282

 
1.79
%
 
56,687

 
244

 
1.73
%
 
51,254

 
206

 
1.61
%
 
49,433

 
190

 
1.58
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing deposit accounts
142

 
 
 
 
 
182

 
 
 
 
 
206

 
 
 
 
 
221

 
 
 
 
 
331

 
 
 
 
Other liabilities
2,854

 
 
 
 
 
3,382

 
 
 
 
 
3,208

 
 
 
 
 
3,412

 
 
 
 
 
3,182

 
 
 
 
Total non-interest-bearing liabilities
2,996

 
 
 
 
 
3,564

 
 
 
 
 
3,414

 
 
 
 
 
3,633

 
 
 
 
 
3,513

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities
63,109

 
 
 
 
 
64,803

 
 
 
 
 
60,101

 
 
 
 
 
54,887

 
 
 
 
 
52,946

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total equity
10,749

 
 
 
 
 
10,228

 
 
 
 
 
8,199

 
 
 
 
 
6,328

 
 
 
 
 
6,475

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities and equity
$
73,858

 
 
 
 
 
$
75,031

 
 
 
 
 
$
68,300

 
 
 
 
 
$
61,215

 
 
 
 
 
$
59,421

 
 
 
 
Net interest income
 
 
$
2,875

 
 
 
 
 
$
2,978

 
 
 
 
 
$
2,879

 
 
 
 
 
$
2,720

 
 
 
 
 
$
2,743

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread(2)
 
 
 
 
15.44
%
 
 
 
 
 
15.28
%
 
 
 
 
 
16.83
%
 
 
 
 
 
17.59
%
 
 
 
 
 
18.55
%
Net interest margin(3)
 
 
 
 
15.79
%
 
 
 
 
 
15.60
%
 
 
 
 
 
17.11
%
 
 
 
 
 
17.84
%
 
 
 
 
 
18.83
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Interest on liabilities calculated above utilizes monthly average balances. The effective interest rates for the quarters ended March 31, 2015, December 31, 2014 and September 30, 2014, were as follows: GECC loan 4.23%, 4.21% and 4.21%;
Bank term loan 2.21%, 2.19% and 2.21%; Senior unsecured notes 3.41%, 3.52% and 3.62% respectively. The Bank term loan effective rate for the quarters ended March 31, 2015 and September 30, 2014 excludes the impact of charges
incurred in connection with prepayments of the loan.
(2) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average interest-earning assets.
 
 
 
 
 
 
 
 
 
 
 
 

5


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions, except per share statistics)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Mar 31,
2014
 
Mar 31, 2015 vs.
Mar 31, 2014
BALANCE SHEET STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
Total common equity
$
11,036

 
$
10,478

 
$
9,941

 
$
6,393

 
$
6,042

 
$
4,994

82.7
%
Total common equity as a % of total assets
15.18
%
 
13.84
%
 
13.53
%
 
10.12
%
 
10.20
%
 

4.98
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Tangible assets
$
71,215

 
$
74,239

 
$
72,071

 
$
61,763

 
$
57,832

 
$
13,383

23.1
%
Tangible common equity(1)
$
9,530

 
$
9,010

 
$
8,543

 
$
4,981

 
$
4,629

 
$
4,901

105.9
%
Tangible common equity as a % of tangible assets(1)   
13.38
%
 
12.14
%
 
11.85
%
 
8.06
%
 
8.00
%
 

5.38
%
Tangible common equity per share(1)  
$
11.43

 
$
10.81

 
$
10.24

 
$
7.07

 
$
6.57

 
$
4.86

74.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
REGULATORY CAPITAL RATIOS(2)
 
 
 
 
 
 
 
 
 
 
 
 
Basel I
 
 
 
 
 
 
 
 
 
 
 
 
Total risk-based capital ratio(3)
18.2
%
 
16.2
%
 
16.4
%
 
 
 
 
 
 
 
Tier 1 risk-based capital ratio(4)
16.9
%
 
14.9
%
 
15.1
%
 
 
 
 
 
 
 
Tier 1 common ratio(5)
16.9
%
 
14.9
%
 
15.1
%
 
 
 
 
 
 
 
Tier 1 leverage ratio(6)
13.7
%
 
12.5
%
 
12.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basel III
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 common ratio(7)
16.4
%
 
14.5
%
 
14.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Tangible Common Equity ("TCE") is a non-GAAP measure. We believe TCE is a more meaningful measure to investors of the net asset value of the Company. For corresponding
reconciliation of TCE to a GAAP financial measure see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(2) Regulatory capital metrics as of the end of 3Q 2014 are preliminary and therefore subject to change. As a new savings and loan holding company, the Company historically has not
been required by regulators to disclose capital ratios, and therefore these ratios are non-GAAP measures. See Reconciliation of Non-GAAP Measures and Calculation of Regulatory
Measures for components of capital ratio calculations.
(3) Total risk-based capital ratio is the ratio of total risk-based capital divided by risk-weighted assets.
(4) Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided by risk-weighted assets.
(5) Tier 1 common ratio is the ratio of common equity Tier 1 capital divided by risk-weighted assets.
(6) Tier 1 leverage ratio is calculated based on Tier 1 capital divided by total assets, after certain adjustments.
(7) Our Basel III Tier 1 common ratio is the ratio of common equity Tier 1 capital to total risk-weighted assets, each as calculated in accordance with the U.S. Basel III capital rules (on a fully
phased-in basis). Our Basel III Tier 1 common ratio is a preliminary estimate reflecting management’s interpretation of the final Basel III capital rules adopted in July 2013 by the Federal
Reserve Board, which have not been fully implemented, and our estimate and interpretations are subject to, among other things, ongoing regulatory review and implementation guidance.
 
 
 
 
 
 
 
 
 
 
 
 
 

6


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
PLATFORM RESULTS AND RECONCILIATION OF NON-GAAP MEASURES
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Mar 31,
2014
 
1Q'15 vs. 1Q'14
RETAIL CARD
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1),(2)
$
18,410

 
$
24,855

 
$
20,991

 
$
21,032

 
$
16,713

 
$
1,697

10.2
 %
Period-end loan receivables
$
39,685

 
$
42,308

 
$
38,466

 
$
37,238

 
$
37,175

 
$
2,510

6.8
 %
Average loan receivables, including held for sale
$
40,986

 
$
40,929

 
$
39,411

 
$
38,047

 
$
38,223

 
$
2,763

7.2
 %
Average active accounts (in thousands)(2),(3)
49,617

 
49,871

 
48,433

 
47,248

 
48,168

 
1,449

3.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans(2)
$
2,337

 
$
2,405

 
$
2,299

 
$
2,158

 
$
2,178

 
$
159

7.3
 %
Other income(2)
86

 
141

 
78

 
92

 
96

 
(10
)
(10.4
)%
Platform revenue, excluding retailer share arrangements(2)
2,423

 
2,546

 
2,377

 
2,250

 
2,274

 
149

6.6
 %
Retailer share arrangements(2)
(651
)
 
(686
)
 
(683
)
 
(577
)
 
(584
)
 
(67
)
11.5
 %
Platform revenue(2)
$
1,772

 
$
1,860

 
$
1,694

 
$
1,673

 
$
1,690

 
$
82

4.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
PAYMENT SOLUTIONS
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1)
$
2,948

 
$
3,419

 
$
3,226

 
$
3,115

 
$
2,687

 
$
261

9.7
 %
Period-end loan receivables
$
11,833

 
$
12,095

 
$
11,514

 
$
11,014

 
$
10,647

 
$
1,186

11.1
 %
Average loan receivables
$
11,970

 
$
11,772

 
$
11,267

 
$
10,785

 
$
10,775

 
$
1,195

11.1
 %
Average active accounts (in thousands)(3)
7,271

 
7,113

 
6,892

 
6,692

 
6,737

 
534

7.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
403

 
$
426

 
$
405

 
$
379

 
$
372

 
$
31

8.3
 %
Other income
5

 
9

 
7

 
8

 
8

 
(3
)
(37.5
)%
Platform revenue, excluding retailer share arrangements
408

 
435

 
412

 
387

 
380

 
28

7.4
 %
Retailer share arrangements
(8
)
 
(11
)
 
(9
)
 
(12
)
 
(9
)
 
1

(11.1
)%
Platform revenue
$
400

 
$
424

 
$
403

 
$
375

 
$
371

 
$
29

7.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
CARECREDIT
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1)
$
1,781

 
$
1,807

 
$
1,787

 
$
1,831

 
$
1,686

 
$
95

5.6
 %
Period-end loan receivables
$
6,730

 
$
6,883

 
$
6,787

 
$
6,621

 
$
6,463

 
$
267

4.1
 %
Average loan receivables
$
6,819

 
$
6,846

 
$
6,713

 
$
6,531

 
$
6,497

 
$
322

5.0
 %
Average active accounts (in thousands)(3)
4,716

 
4,683

 
4,582

 
4,446

 
4,437

 
279

6.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
400

 
$
421

 
$
412

 
$
383

 
$
378

 
$
22

5.8
 %
Other income
10

 
12

 
11

 
12

 
11

 
(1
)
(9.1
)%
Platform revenue, excluding retailer share arrangements
410

 
433

 
423

 
395

 
389

 
21

5.4
 %
Retailer share arrangements
(1
)
 
(1
)
 
(1
)
 
(1
)
 
(1
)
 
—

—
 %
Platform revenue
$
409

 
$
432

 
$
422

 
$
394

 
$
388

 
$
21

5.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL SYF
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1),(2)
$
23,139

 
$
30,081

 
$
26,004

 
$
25,978

 
$
21,086

 
$
2,053

9.7
 %
Period-end loan receivables
$
58,248

 
$
61,286

 
$
56,767

 
$
54,873

 
$
54,285

 
$
3,963

7.3
 %
Average loan receivables, including held for sale
$
59,775

 
$
59,547

 
$
57,391

 
$
55,363

 
$
55,495

 
$
4,280

7.7
 %
Average active accounts (in thousands)(2),(3)
61,604

 
61,667

 
59,907

 
58,386

 
59,342

 
2,262

3.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans(2)
$
3,140

 
$
3,252

 
$
3,116

 
$
2,920

 
$
2,928

 
$
212

7.2
 %
Other income(2)
101

 
162

 
96

 
112

 
115

 
(14
)
(12.2
)%
Platform revenue, excluding retailer share arrangements(2)
3,241

 
3,414

 
3,212

 
3,032

 
3,043

 
198

6.5
 %
Retailer share arrangements(2)
(660
)
 
(698
)
 
(693
)
 
(590
)
 
(594
)
 
(66
)
11.1
 %
Platform revenue(2)
$
2,581

 
$
2,716

 
$
2,519

 
$
2,442

 
$
2,449

 
$
132

5.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during
the period.
(2) Includes activity and balances associated with loan receivables held for sale.
 
 
 
 
 
 
 
 
 
 
 
 
(3) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

7


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES
 
 
(unaudited, $ in millions, except per share statistics)
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Mar 31,
2014
COMMON EQUITY MEASURES
 
 
 
 
 
 
 
 
 
GAAP Total common equity
$
11,036

 
$
10,478

 
$
9,941

 
$
6,393

 
$
6,042

Less: Goodwill
(949
)
 
(949
)
 
(949
)
 
(949
)
 
(949
)
Less: Intangible assets, net
(557
)
 
(519
)
 
(449
)
 
(463
)
 
(464
)
Tangible common equity
$
9,530

 
$
9,010

 
$
8,543

 
$
4,981

 
$
4,629

Adjustments for certain other intangible assets, deferred tax liabilities
and certain items in accumulated comprehensive income (loss)
293

 
287

 
292

 
 
 
 
Basel I - Tier 1 capital and Tier 1 common equity
$
9,823

 
$
9,297

 
$
8,835

 
 
 
 
Adjustments for certain other intangible assets and deferred tax liabilities
(12
)
 
(20
)
 
(24
)
 
 
 
 
Basel III - Tier I common equity
$
9,811

 
$
9,277

 
$
8,811

 
 
 
 
 
 
 
 
 
 
 
 
 
 
RISK-BASED CAPITAL
 
 
 
 
 
 
 
 
 
Basel I - Tier 1 capital and Tier 1 common equity
$
9,823

 
$
9,297

 
$
8,835

 
 
 
 
Add: Allowance for loan losses includible in risk-based capital
759

 
809

 
760

 
 
 
 
Basel I - Risk-based capital
$
10,582

 
$
10,106

 
$
9,595

 
 
 
 
 
 
 
 
 
 
 
 
 
 
ASSET MEASURES
 
 
 
 
 
 
 
 
 
Total assets
$
72,721

 
$
75,707

 
$
73,469

 
 
 
 
Adjustments for:
 
 
 
 
 
 
 
 
 
Disallowed goodwill and other disallowed intangible assets, net of
related deferred tax liabilities
(1,213
)
 
(1,181
)
 
(1,110
)
 
 
 
 
Other
136

 
79

 
4

 
 
 
 
Total assets for leverage purposes - Basel I
$
71,644

 
$
74,605

 
$
72,363

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Risk-weighted assets - Basel I
$
58,184

 
$
62,270

 
$
58,457

 
 
 
 
Additional risk weighting adjustments related to:
 
 
 
 
 
 
 
 
 
Deferred taxes
1,224

 
1,321

 
1,319

 
 
 
 
Loan receivables delinquent over 90 days
528

 
581

 
526

 
 
 
 
Other
(10
)
 
(10
)
 
(2
)
 
 
 
 
Risk-weighted assets - Basel III (fully phased-in)
$
59,926

 
$
64,162

 
$
60,300

 
 
 
 
 
 
 
 
 
 
 
 
 
 
TANGIBLE COMMON EQUITY PER SHARE
 
 
 
 
 
 
 
 
 
GAAP book value per share
$
13.24

 
$
12.57

 
$
11.92

 
$
9.06

 
$
8.57

Less: Goodwill
(1.14
)
 
(1.14
)
 
(1.14
)
 
(1.34
)
 
(1.34
)
Less: Intangible assets, net
(0.67
)
 
(0.62
)
 
(0.53
)
 
(0.66
)
 
(0.67
)
Tangible common equity per share
$
11.43

 
$
10.81

 
$
10.25

 
$
7.06

 
$
6.56


8