1Q'17 Financial Results
April 28, 2017
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.
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; retaining existing partners and attracting new partners,
concentration of our revenue in a small number of Retail Card partners, promotion and support of our products by our partners, and financial performance of our partners; cyber-attacks or other security
breaches; higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to securitize our loans, occurrence of an early
amortization of our securitization facilities, loss of the right to service or subservice our securitized loans, and lower payment rates on our securitized loans; our ability to grow our deposits in the future;
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, the sufficiency of our allowance for loan losses and the accuracy of the assumptions or estimates used in preparing our financial statements; 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 strategic investments; reductions in interchange fees; fraudulent activity; failure of third parties to provide various
services that are important to our operations; disruptions in the operations of our computer systems and data centers; 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; damage to our reputation; our ability to
attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions and state sales tax rules and regulations; a material indemnification obligation to GE under
the tax sharing and separation agreement with GE if we cause the split-off from GE or certain preliminary transactions to fail to qualify for tax-free treatment or in the case of certain significant transfers of
our stock following the split-off; regulation, supervision, examination and enforcement of our business by governmental authorities, the impact of the Dodd-Frank Wall Street Reform and Consumer
Protection Act and 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 Synchrony Bank's ability to pay dividends to us; regulations relating to privacy, information security and data protection; use of third-
party vendors and ongoing third-party business relationships; and failure to comply with anti-money laundering and anti-terrorism financing laws.
For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included
elsewhere in this presentation and in our public filings, including under the heading “Risk Factors” in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed on
February 23, 2017. You should not consider any list of such factors to be an exhaustive statement of all of 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. Differences between this
presentation and the supplemental financials may occur due to rounding.
Non-GAAP Measures
The information provided herein includes certain capital ratios, which are not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The reconciliations of such measures to
the most directly comparable GAAP measures are included in the appendix of this presentation.
Disclaimers
3
1Q'17 Highlights
• $499 million Net Earnings, $0.61 diluted EPS
• Strong growth metrics
‒ Loan Receivables up 11%
‒ Net Interest Income up 12%
‒ Purchase Volume up 7%
‒ Average Active Accounts up 5%
• Net Charge-Offs of 5.33% compared to 4.74% in the prior year
• Provision for Loan Losses up 45%; reserve build driven by
growth, credit normalization and softer recovery pricing
• Efficiency Ratio 30.3% compared to 30.4% in the prior year
• Deposits up $6.6 billion compared to prior year, comprising 72%
of funding
• Strong capital and liquidity
‒ 18.0% CET1 & $16.2 billion liquid assets
• Paid quarterly dividend of $0.13 per share and repurchased
$238 million of common stock
Financial Highlights
(a) CET1 % calculated under the Basel III transitional guidelines
Business Highlights
• Renewed key relationships
• Acquired Citi Health Card portfolio and
GPShopper
• Launched new programs
(a)
4
Growth Metrics
1Q'16 1Q'17 1Q'16 1Q'17
1Q'16 1Q'17 1Q'16 1Q'17
+7% Purchase Volume
$ in billions
Loan Receivables
$ in billions
Average Active Accounts
in millions
Interest and Fees on Loans
$ in millions
$27.0
$28.9
$65.8
$73.3
$3,877
$3,498 69.6 66.1
+5% +11%
+11%
5
Platform Results
Retail Card
Loan Receivables, $ in billions
$45.1
$49.9
1Q'16 1Q'17
• Strong Loan Receivables
growth across partner programs
• Interest and Fees on Loans up
10% driven by Loan
Receivables growth
Payment Solutions
Loan Receivables, $ in billions
$13.4
$15.3
1Q'16 1Q'17
• Broad-based Loan Receivables
growth led by home furnishings
and auto
• Interest and Fees on Loans up
13% driven by Loan Receivables
growth
CareCredit
Loan Receivables, $ in billions
$7.3
$8.1
1Q'16 1Q'17
• Loan Receivables growth led by
dental and veterinary
• Interest and Fees on Loans up
11% driven by Loan Receivables
growth
Purchase Volume
Accounts
$21.6
53.0
$23.0
55.0
+7%
+4%
$3.4
8.1
$3.7
9.1
+9%
+12%
$2.0
5.0
$2.2
5.5
+10%
+9%
Interest and
Fees on Loans
$2,614 $2,888 +10% $457 $515 +13% $427 $474 +11%
+11% +11%
(a)
(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
V% V% V%
+14%
6
Financial Results
Summary Earnings Statement
1Q’17 Highlights
$ in millions, except ratios
Total Interest Income $3,913 $3,520 $393 11%
Total Interest Expense 326 311 (15) (5)%
Net Interest Income (NII) 3,587 3,209 378 12%
Retailer Share Arrangements (RSA) (684) (670) (14) (2)%
NII, after RSA 2,903 2,539 364 14%
Provision for Loan Losses 1,306 903 (403) (45)%
Other Income 93 92 1 1%
Other Expense 908 800 (108) (14)%
Pre-Tax Earnings 782 928 (146) (16)%
Provision for Income Taxes 283 346 63 18%
Net Earnings $499 $582 $(83) (14)%
Return on Assets 2.3% 2.8% (0.5)pts.
1Q'17 1Q'16 % $
B/(W) • $499 million Net Earnings
• 2.3% Return on Assets
• Net Interest Income up 12% driven by growth in
Loan Receivables
‒ Interest and Fees on Loans up 11% driven by
average Loan Receivables growth
‒ Interest Expense increase driven by growth
• Provision for Loan Losses up 45%; reserve
build driven by growth, credit normalization and
softer recovery pricing
‒ Net Charge-Offs of 5.33% compared to
4.74% in the prior year
• Other Expense up 14%
‒ Other Expense increase driven primarily by
growth
7
Net Interest Income
1Q’17 Highlights
• Net Interest Income increased 12%
compared to prior year driven by
growth in Loan Receivables
‒ Interest and Fees on Loans
increased 11% compared to prior
year driven by average Loan
Receivables growth
• Net Interest Margin up 34bps.
‒ Loan Receivables mix as a percent
of total Earning Assets increased
from 81.3% to 82.5%
‒ Loan Receivables yield 21.21%,
down 4bps. versus prior year
‒ Total Interest-Bearing Liabilities
cost decreased 6bps. to 1.84%,
due to more favorable funding mix
Net Interest Income
$ in millions, % of average Interest-Earning Assets
15.84% 16.18%
1Q'16 1Q'17
+12%
$3,209
$3,587
8
Asset Quality Metrics
$668 $693
$633
$697
Allowance for Loan Losses
$ in millions, % of period-end Loan Receivables
5.59%
$3,255
5.38%
$3,302
5.31%
$3,371
5.12%
$3,497
$780
5.50%
$3,620
$747
5.70%
$3,894
$1,056
1.81%
$933
1.52%
$1,102
1.73%
$1,273
1.86%
$1,212
1.84%
$1,143
1.67%
$765
$1,334
1.89% 5.82%
$4,115
$2,772
$2,209 $2,171
$2,553 $2,538 $2,585
4.02% 3.79% 3.53%
4.06% 3.85% 3.79%
$3,008
4.26%
$3,295
$1,546
2.03%
$4,344
5.69%
$847
4.32%
4Q'15 1Q'15 2Q'15 3Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17
$3,120
4.25%
4Q'15 1Q'15 2Q'15 3Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17
4Q'15 1Q'15 2Q'15 3Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17
4Q'15 1Q'15 2Q'15 3Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17
$1,508
2.06%
$4,676
6.37%
4.56% 4.64% 4.03% 4.25%
4.74% 4.51% 4.39% 4.65%
5.33%
$974
Net Charge-Offs
$ in millions, % of average Loan Receivables including held for sale
30+ Days Past Due
$ in millions, % of period-end Loan Receivables
90+ Days Past Due
$ in millions, % of period-end Loan Receivables
9
Other Expense
Employee Costs $280 $325 $45 16%
Professional Fees 146 151 5 3%
Marketing/BD 94 94 - -%
Information Processing 82 90 8 10%
Other 198 248 50 25%
Other Expense $800 $908 $108 14%
Efficiency 30.4% 30.3% (0.1)pts.
$800
(a) “Other Expense” divided by sum of “NII, after RSA” plus “Other Income”
(1)
V$ V%
+14%
(a)
$908
1Q'16 1Q'17
1Q’17 Highlights
• Efficiency Ratio 30.3% vs.
30.4% prior year
• Other Expense increased 14% vs.
prior year
• Employee Costs up $45 million
‒ Driven primarily by employees
added for growth
• Information Processing up $8
million
‒ Driven by continued IT investment
and purchase volume growth
• Other up $50 million
‒ Driven by operational losses and
growth
Other Expense
$ in millions
10
Funding, Capital and Liquidity
(b)
Liquid Assets $14.9 $16.2
Undrawn Credit Facilities 7.3 5.6
Total Liquidity $22.2 $21.8
Basel III (fully phased-in) 17.5% 17.7%
Liquidity
% of Total Assets, $ in billions
1Q'17
24.4%
27.2%
1Q'16
Capital Ratios
Common Equity Tier 1 % - Basel III transitional
1Q’16
(c) Does not include unencumbered assets in the Bank that could be pledged
(c)
1Q’17
(a) Estimated percentages and amounts
(b) Calculated under the Basel III transition guidelines
18.1% 18.0%
(a)
Funding Sources
$ in billions
1Q'16 1Q'17 Variance
Deposits 69% 72% +3pts.
Securitization 19% 17% (2)pts.
3rd Party Debt 12% 11% (1)pts.
$71.8
Deposits
Securitization
3rd Party Debt
V$
$45.0
$12.4
$8.1
$51.6
$12.4
$7.8 $65.5 $(0.3)
$ -
+$6.6
11
1Q'17 Wrap Up
• Net Earnings of $499 million or $0.61 Earnings Per Diluted Share
• Strong growth metrics
‒ Loan Receivables up 11%
‒ Net Interest Income up 12%
‒ Purchase Volume up 7%
‒ Average Active Accounts up 5%
• Renewed key partners: Belk, QVC and Midas
• Acquired Citi Health Card portfolio and GPShopper
• Launched new programs with Synchrony Car Care and Cathay Pacific
• Fast-growing deposit platform—Deposits at $52 billion comprising 72% of funding
• Strong balance sheet, $16.2 billion of Liquid Assets and 18.0% CET1
• Paid quarterly common stock dividend of $0.13 per share and repurchased $238 million
of common stock
(a) CET1 % calculated under the Basel III transition guidelines
(a)
Engage with us.
13
Appendix
14
Non-GAAP Reconciliation
We present certain capital ratios. Our Basel III Tier 1 common ratio, calculated on a fully phased-in basis, 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.
This ratio is not currently required by regulators to be disclosed, and therefore is considered a non-GAAP
measure. We believe this capital ratio is a useful measure to investors because it is widely used by analysts
and regulators to assess the capital position of financial services companies, although this ratio may not be
comparable to similarly titled measures reported by other companies.
15
Non-GAAP Reconciliation
The following table sets forth a reconciliation of each component of our capital ratios to the comparable GAAP
component at March 31, 2017.
COMMON EQUITY MEASURES
GAAP Total common equity ....................................................................................................
Less: Goodwill ...............................................................................................................
Less: Intangible assets, net .............................................................................................
Tangible common equity ........................................................................................................
Adjustments for certain deferred tax liabilities and certain items
in accumulated comprehensive income (loss) ................................................................
Basel III – Common equity Tier 1 (fully phased-in) ............................................................
Adjustments related to capital components during transition ........................................
Basel III – Common equity Tier 1 (transition) ...................................................................
Risk-weighted assets – Basel III (fully phased-in) ..............................................................
Risk-weighted assets – Basel III (transition) .......................................................................
$14,363
(992)
(826)
$12,545
340
$12,885
154
$13,039
$72,596
$72,627
$ in millions at
March 31, 2017