SYNCHRONY FINANCIAL | |||||||||||||||||||||||||||||||||||||||
FINANCIAL SUMMARY | |||||||||||||||||||||||||||||||||||||||
(unaudited, in millions, except per share statistics) | |||||||||||||||||||||||||||||||||||||||
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | 4Q'17 vs. 4Q'16 | Dec 31, 2017 | Dec 31, 2016 | YTD'17 vs. YTD'16 | |||||||||||||||||||||||||||||||
EARNINGS | |||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 3,916 | $ | 3,876 | $ | 3,637 | $ | 3,587 | $ | 3,628 | $ | 288 | 7.9 | % | $ | 15,016 | $ | 13,530 | $ | 1,486 | 11.0 | % | |||||||||||||||||
Retailer share arrangements | (779 | ) | (805 | ) | (669 | ) | (684 | ) | (811 | ) | 32 | (3.9 | )% | (2,937 | ) | (2,902 | ) | (35 | ) | 1.2 | % | ||||||||||||||||||
Net interest income, after retailer share arrangements | 3,137 | 3,071 | 2,968 | 2,903 | 2,817 | 320 | 11.4 | % | 12,079 | 10,628 | 1,451 | 13.7 | % | ||||||||||||||||||||||||||
Provision for loan losses | 1,354 | 1,310 | 1,326 | 1,306 | 1,076 | 278 | 25.8 | % | 5,296 | 3,986 | 1,310 | 32.9 | % | ||||||||||||||||||||||||||
Net interest income, after retailer share arrangements and provision for loan losses | 1,783 | 1,761 | 1,642 | 1,597 | 1,741 | 42 | 2.4 | % | 6,783 | 6,642 | 141 | 2.1 | % | ||||||||||||||||||||||||||
Other income | 62 | 76 | 57 | 93 | 85 | (23 | ) | (27.1 | )% | 288 | 344 | (56 | ) | (16.3 | )% | ||||||||||||||||||||||||
Other expense | 970 | 958 | 911 | 908 | 918 | 52 | 5.7 | % | 3,747 | 3,416 | 331 | 9.7 | % | ||||||||||||||||||||||||||
Earnings before provision for income taxes | 875 | 879 | 788 | 782 | 908 | (33 | ) | (3.6 | )% | 3,324 | 3,570 | (246 | ) | (6.9 | )% | ||||||||||||||||||||||||
Provision for income taxes | 490 | 324 | 292 | 283 | 332 | 158 | 47.6 | % | 1,389 | 1,319 | 70 | 5.3 | % | ||||||||||||||||||||||||||
Net earnings | $ | 385 | $ | 555 | $ | 496 | $ | 499 | $ | 576 | $ | (191 | ) | (33.2 | )% | $ | 1,935 | $ | 2,251 | $ | (316 | ) | (14.0 | )% | |||||||||||||||
Net earnings attributable to common stockholders | $ | 385 | $ | 555 | $ | 496 | $ | 499 | $ | 576 | $ | (191 | ) | (33.2 | )% | $ | 1,935 | $ | 2,251 | $ | (316 | ) | (14.0 | )% | |||||||||||||||
Adjusted net earnings(1) | $ | 545 | $ | 555 | $ | 496 | $ | 499 | $ | 576 | $ | (31 | ) | (5.4 | )% | $ | 2,095 | $ | 2,251 | $ | (156 | ) | (6.9 | )% | |||||||||||||||
COMMON SHARE STATISTICS | |||||||||||||||||||||||||||||||||||||||
Basic EPS | $ | 0.49 | $ | 0.70 | $ | 0.62 | $ | 0.61 | $ | 0.70 | $ | (0.21 | ) | (30.0 | )% | $ | 2.43 | $ | 2.71 | $ | (0.28 | ) | (10.3 | )% | |||||||||||||||
Diluted EPS | $ | 0.49 | $ | 0.70 | $ | 0.61 | $ | 0.61 | $ | 0.70 | $ | (0.21 | ) | (30.0 | )% | $ | 2.42 | $ | 2.71 | $ | (0.29 | ) | (10.7 | )% | |||||||||||||||
Adjusted diluted EPS(1) | $ | 0.70 | $ | 0.70 | $ | 0.61 | $ | 0.61 | $ | 0.70 | $ | — | — | % | $ | 2.62 | $ | 2.71 | $ | (0.09 | ) | (3.3 | )% | ||||||||||||||||
Dividend declared per share | $ | 0.15 | $ | 0.15 | $ | 0.13 | $ | 0.13 | $ | 0.13 | $ | 0.02 | 15.4 | % | $ | 0.56 | $ | 0.26 | $ | 0.30 | 115.4 | % | |||||||||||||||||
Common stock price | $ | 38.61 | $ | 31.05 | $ | 29.82 | $ | 34.30 | $ | 36.27 | $ | 2.34 | 6.5 | % | $ | 38.61 | $ | 36.27 | $ | 2.34 | 6.5 | % | |||||||||||||||||
Book value per share | $ | 18.47 | $ | 18.40 | $ | 18.02 | $ | 17.71 | $ | 17.37 | $ | 1.10 | 6.3 | % | $ | 18.47 | $ | 17.37 | $ | 1.10 | 6.3 | % | |||||||||||||||||
Tangible common equity per share(2) | $ | 16.22 | $ | 16.15 | $ | 15.79 | $ | 15.47 | $ | 15.34 | $ | 0.88 | 5.7 | % | $ | 16.22 | $ | 15.34 | $ | 0.88 | 5.7 | % | |||||||||||||||||
Beginning common shares outstanding | 782.6 | 795.3 | 810.8 | 817.4 | 825.5 | (42.9 | ) | (5.2 | )% | 817.4 | 833.8 | (16.4 | ) | (2.0 | )% | ||||||||||||||||||||||||
Issuance of common shares | — | — | — | — | — | — | — | % | — | — | — | — | % | ||||||||||||||||||||||||||
Stock-based compensation | 0.1 | 0.1 | 0.2 | — | — | 0.1 | NM | 0.4 | 0.2 | 0.2 | 100.0 | % | |||||||||||||||||||||||||||
Shares repurchased | (12.2 | ) | (12.8 | ) | (15.7 | ) | (6.6 | ) | (8.1 | ) | (4.1 | ) | 50.6 | % | (47.3 | ) | (16.6 | ) | (30.7 | ) | 184.9 | % | |||||||||||||||||
Ending common shares outstanding | 770.5 | 782.6 | 795.3 | 810.8 | 817.4 | (46.9 | ) | (5.7 | )% | 770.5 | 817.4 | (46.9 | ) | (5.7 | )% | ||||||||||||||||||||||||
Weighted average common shares outstanding | 778.7 | 787.3 | 804.0 | 813.1 | 820.5 | (41.8 | ) | (5.1 | )% | 795.6 | 829.2 | (33.6 | ) | (4.1 | )% | ||||||||||||||||||||||||
Weighted average common shares outstanding (fully diluted) | 784.0 | 790.9 | 807.4 | 817.1 | 823.8 | (39.8 | ) | (4.8 | )% | 799.7 | 831.5 | (31.8 | ) | (3.8 | )% | ||||||||||||||||||||||||
(1) Adjusted net earnings and Adjusted diluted EPS are non-GAAP measures. These measures represent the corresponding GAAP measure, adjusted to exclude the effects to Provision for income taxes in the quarter ended December 31, 2017, resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The effects primarily relate to additional tax expense arising from the remeasurement of our net deferred tax asset to reflect the reduction in the U.S. corporate tax rate from 35% to 21%. For a corresponding reconciliation to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures. | |||||||||||||||||||||||||||||||||||||||
(2) 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, except account data) | |||||||||||||||||||||||||||||||||||||||
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | 4Q'17 vs. 4Q'16 | Dec 31, 2017 | Dec 31, 2016 | YTD'17 vs. YTD'16 | |||||||||||||||||||||||||||||||
PERFORMANCE METRICS | |||||||||||||||||||||||||||||||||||||||
Return on assets(1) | 1.6 | % | 2.4 | % | 2.2 | % | 2.3 | % | 2.6 | % | (1.0 | )% | 2.1 | % | 2.7 | % | (0.6 | )% | |||||||||||||||||||||
Return on equity(2) | 10.5 | % | 15.3 | % | 13.8 | % | 14.1 | % | 16.2 | % | (5.7 | )% | 13.4 | % | 16.5 | % | (3.1 | )% | |||||||||||||||||||||
Return on tangible common equity(3) | 12.0 | % | 17.4 | % | 15.7 | % | 16.1 | % | 18.4 | % | (6.4 | )% | 15.3 | % | 18.8 | % | (3.5 | )% | |||||||||||||||||||||
Adjusted return on assets(4) | 2.3 | % | 2.4 | % | 2.2 | % | 2.3 | % | 2.6 | % | (0.3 | )% | 2.3 | % | 2.7 | % | (0.4 | )% | |||||||||||||||||||||
Adjusted return on equity(4) | 14.9 | % | 15.3 | % | 13.8 | % | 14.1 | % | 16.2 | % | (1.3 | )% | 14.5 | % | 16.5 | % | (2.0 | )% | |||||||||||||||||||||
Adjusted return on tangible common equity(5) | 17.0 | % | 17.4 | % | 15.7 | % | 16.1 | % | 18.4 | % | (1.4 | )% | 16.6 | % | 18.8 | % | (2.2 | )% | |||||||||||||||||||||
Net interest margin(6) | 16.24 | % | 16.74 | % | 16.20 | % | 16.18 | % | 16.26 | % | (0.02 | )% | 16.35 | % | 16.10 | % | 0.25 | % | |||||||||||||||||||||
Efficiency ratio(7) | 30.3 | % | 30.4 | % | 30.1 | % | 30.3 | % | 31.6 | % | (1.3 | )% | 30.3 | % | 31.1 | % | (0.8 | )% | |||||||||||||||||||||
Other expense as a % of average loan receivables, including held for sale | 4.91 | % | 4.99 | % | 4.93 | % | 4.97 | % | 5.04 | % | (0.13 | )% | 4.95 | % | 4.98 | % | (0.03 | )% | |||||||||||||||||||||
Effective income tax rate | 56.0 | % | 36.9 | % | 37.1 | % | 36.2 | % | 36.6 | % | 19.4 | % | 41.8 | % | 36.9 | % | 4.9 | % | |||||||||||||||||||||
CREDIT QUALITY METRICS | |||||||||||||||||||||||||||||||||||||||
Net charge-offs as a % of average loan receivables, including held for sale | 5.78 | % | 4.95 | % | 5.42 | % | 5.33 | % | 4.65 | % | 1.13 | % | 5.37 | % | 4.57 | % | 0.80 | % | |||||||||||||||||||||
30+ days past due as a % of period-end loan receivables(8) | 4.67 | % | 4.80 | % | 4.25 | % | 4.25 | % | 4.32 | % | 0.35 | % | 4.67 | % | 4.32 | % | 0.35 | % | |||||||||||||||||||||
90+ days past due as a % of period-end loan receivables(8) | 2.28 | % | 2.22 | % | 1.90 | % | 2.06 | % | 2.03 | % | 0.25 | % | 2.28 | % | 2.03 | % | 0.25 | % | |||||||||||||||||||||
Net charge-offs | $ | 1,141 | $ | 950 | $ | 1,001 | $ | 974 | $ | 847 | $ | 294 | 34.7 | % | $ | 4,066 | $ | 3,139 | $ | 927 | 29.5 | % | |||||||||||||||||
Loan receivables delinquent over 30 days(8) | $ | 3,831 | $ | 3,694 | $ | 3,208 | $ | 3,120 | $ | 3,295 | $ | 536 | 16.3 | % | $ | 3,831 | $ | 3,295 | $ | 536 | 16.3 | % | |||||||||||||||||
Loan receivables delinquent over 90 days(8) | $ | 1,869 | $ | 1,707 | $ | 1,435 | $ | 1,508 | $ | 1,546 | $ | 323 | 20.9 | % | $ | 1,869 | $ | 1,546 | $ | 323 | 20.9 | % | |||||||||||||||||
Allowance for loan losses (period-end) | $ | 5,574 | $ | 5,361 | $ | 5,001 | $ | 4,676 | $ | 4,344 | $ | 1,230 | 28.3 | % | $ | 5,574 | $ | 4,344 | $ | 1,230 | 28.3 | % | |||||||||||||||||
Allowance coverage ratio(9) | 6.80 | % | 6.97 | % | 6.63 | % | 6.37 | % | 5.69 | % | 1.11 | % | 6.80 | % | 5.69 | % | 1.11 | % | |||||||||||||||||||||
BUSINESS METRICS | |||||||||||||||||||||||||||||||||||||||
Purchase volume(10) | $ | 36,565 | $ | 32,893 | $ | 33,476 | $ | 28,880 | $ | 35,369 | $ | 1,196 | 3.4 | % | $ | 131,814 | $ | 125,468 | $ | 6,346 | 5.1 | % | |||||||||||||||||
Period-end loan receivables | $ | 81,947 | $ | 76,928 | $ | 75,458 | $ | 73,350 | $ | 76,337 | $ | 5,610 | 7.3 | % | $ | 81,947 | $ | 76,337 | $ | 5,610 | 7.3 | % | |||||||||||||||||
Credit cards | $ | 79,026 | $ | 73,946 | $ | 72,492 | $ | 70,587 | $ | 73,580 | $ | 5,446 | 7.4 | % | $ | 79,026 | $ | 73,580 | $ | 5,446 | 7.4 | % | |||||||||||||||||
Consumer installment loans | $ | 1,578 | $ | 1,561 | $ | 1,514 | $ | 1,411 | $ | 1,384 | $ | 194 | 14.0 | % | $ | 1,578 | $ | 1,384 | $ | 194 | 14.0 | % | |||||||||||||||||
Commercial credit products | $ | 1,303 | $ | 1,384 | $ | 1,386 | $ | 1,311 | $ | 1,333 | $ | (30 | ) | (2.3 | )% | $ | 1,303 | $ | 1,333 | $ | (30 | ) | (2.3 | )% | |||||||||||||||
Other | $ | 40 | $ | 37 | $ | 66 | $ | 41 | $ | 40 | $ | — | — | % | $ | 40 | $ | 40 | $ | — | — | % | |||||||||||||||||
Average loan receivables, including held for sale | $ | 78,369 | $ | 76,165 | $ | 74,090 | $ | 74,132 | $ | 72,476 | $ | 5,893 | 8.1 | % | $ | 75,702 | $ | 68,649 | $ | 7,053 | 10.3 | % | |||||||||||||||||
Period-end active accounts (in thousands)(11) | 74,541 | 69,008 | 69,277 | 67,905 | 71,890 | 2,651 | 3.7 | % | 74,541 | 71,890 | 2,651 | 3.7 | % | ||||||||||||||||||||||||||
Average active accounts (in thousands)(11) | 71,348 | 69,331 | 68,635 | 69,629 | 68,701 | 2,647 | 3.9 | % | 69,968 | 66,928 | 3,040 | 4.5 | % | ||||||||||||||||||||||||||
LIQUIDITY | |||||||||||||||||||||||||||||||||||||||
Liquid assets | |||||||||||||||||||||||||||||||||||||||
Cash and equivalents | $ | 11,602 | $ | 13,915 | $ | 12,020 | $ | 11,392 | $ | 9,321 | $ | 2,281 | 24.5 | % | $ | 11,602 | $ | 9,321 | $ | 2,281 | 24.5 | % | |||||||||||||||||
Total liquid assets | $ | 15,087 | $ | 16,391 | $ | 15,274 | $ | 16,158 | $ | 13,612 | $ | 1,475 | 10.8 | % | $ | 15,087 | $ | 13,612 | $ | 1,475 | 10.8 | % | |||||||||||||||||
Undrawn credit facilities | |||||||||||||||||||||||||||||||||||||||
Undrawn credit facilities | $ | 6,000 | $ | 5,650 | $ | 6,650 | $ | 5,600 | $ | 6,700 | $ | (700 | ) | (10.4 | )% | $ | 6,000 | $ | 6,700 | $ | (700 | ) | (10.4 | )% | |||||||||||||||
Total liquid assets and undrawn credit facilities | $ | 21,087 | $ | 22,041 | $ | 21,924 | $ | 21,758 | $ | 20,312 | $ | 775 | 3.8 | % | $ | 21,087 | $ | 20,312 | $ | 775 | 3.8 | % | |||||||||||||||||
Liquid assets % of total assets | 15.75 | % | 17.71 | % | 16.76 | % | 18.14 | % | 15.09 | % | 0.66 | % | 15.75 | % | 15.09 | % | 0.66 | % | |||||||||||||||||||||
Liquid assets including undrawn credit facilities % of total assets | 22.01 | % | 23.82 | % | 24.06 | % | 24.43 | % | 22.52 | % | (0.51 | )% | 22.01 | % | 22.52 | % | (0.51 | )% | |||||||||||||||||||||
(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) Adjusted return on assets represents Adjusted net earnings as a percentage of average total assets. Adjusted return on equity represents Adjusted net earnings as a percentage of average total equity. Adjusted net earnings is a non-GAAP measure. For a corresponding reconciliation of Adjusted net earnings to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures. | |||||||||||||||||||||||||||||||||||||||
(5) Adjusted return on tangible common equity represents Adjusted net earnings as a percentage of average tangible common equity. Both Adjusted net earnings and tangible common equity are non-GAAP measures. For corresponding reconciliations to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures. | |||||||||||||||||||||||||||||||||||||||
(6) Net interest margin represents net interest income divided by average interest-earning assets. | |||||||||||||||||||||||||||||||||||||||
(7) Efficiency ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income. | |||||||||||||||||||||||||||||||||||||||
(8) Based on customer statement-end balances extrapolated to the respective period-end date. | |||||||||||||||||||||||||||||||||||||||
(9) Allowance coverage ratio represents allowance for loan losses divided by total period-end loan receivables. | |||||||||||||||||||||||||||||||||||||||
(10) 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. | |||||||||||||||||||||||||||||||||||||||
(11) 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 | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | 4Q'17 vs. 4Q'16 | Dec 31, 2017 | Dec 31, 2016 | YTD'17 vs. YTD'16 | |||||||||||||||||||||||||||||||
Interest income: | |||||||||||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 4,233 | $ | 4,182 | $ | 3,927 | $ | 3,877 | $ | 3,919 | $ | 314 | 8.0 | % | $ | 16,219 | $ | 14,682 | $ | 1,537 | 10.5 | % | |||||||||||||||||
Interest on investment securities | 58 | 51 | 43 | 36 | 28 | 30 | 107.1 | % | 188 | 96 | 92 | 95.8 | % | ||||||||||||||||||||||||||
Total interest income | 4,291 | 4,233 | 3,970 | 3,913 | 3,947 | 344 | 8.7 | % | 16,407 | 14,778 | 1,629 | 11.0 | % | ||||||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||||||||||||||||||
Interest on deposits | 233 | 219 | 202 | 194 | 188 | 45 | 23.9 | % | 848 | 727 | 121 | 16.6 | % | ||||||||||||||||||||||||||
Interest on borrowings of consolidated securitization entities | 70 | 65 | 63 | 65 | 64 | 6 | 9.4 | % | 263 | 244 | 19 | 7.8 | % | ||||||||||||||||||||||||||
Interest on third-party debt | 72 | 73 | 68 | 67 | 67 | 5 | 7.5 | % | 280 | 277 | 3 | 1.1 | % | ||||||||||||||||||||||||||
Total interest expense | 375 | 357 | 333 | 326 | 319 | 56 | 17.6 | % | 1,391 | 1,248 | 143 | 11.5 | % | ||||||||||||||||||||||||||
Net interest income | 3,916 | 3,876 | 3,637 | 3,587 | 3,628 | 288 | 7.9 | % | 15,016 | 13,530 | 1,486 | 11.0 | % | ||||||||||||||||||||||||||
Retailer share arrangements | (779 | ) | (805 | ) | (669 | ) | (684 | ) | (811 | ) | 32 | (3.9 | )% | (2,937 | ) | (2,902 | ) | (35 | ) | 1.2 | % | ||||||||||||||||||
Net interest income, after retailer share arrangements | 3,137 | 3,071 | 2,968 | 2,903 | 2,817 | 320 | 11.4 | % | 12,079 | 10,628 | 1,451 | 13.7 | % | ||||||||||||||||||||||||||
Provision for loan losses | 1,354 | 1,310 | 1,326 | 1,306 | 1,076 | 278 | 25.8 | % | 5,296 | 3,986 | 1,310 | 32.9 | % | ||||||||||||||||||||||||||
Net interest income, after retailer share arrangements and provision for loan losses | 1,783 | 1,761 | 1,642 | 1,597 | 1,741 | 42 | 2.4 | % | 6,783 | 6,642 | 141 | 2.1 | % | ||||||||||||||||||||||||||
Other income: | |||||||||||||||||||||||||||||||||||||||
Interchange revenue | 179 | 164 | 165 | 145 | 167 | 12 | 7.2 | % | 653 | 602 | 51 | 8.5 | % | ||||||||||||||||||||||||||
Debt cancellation fees | 69 | 67 | 68 | 68 | 68 | 1 | 1.5 | % | 272 | 262 | 10 | 3.8 | % | ||||||||||||||||||||||||||
Loyalty programs | (193 | ) | (168 | ) | (206 | ) | (137 | ) | (157 | ) | (36 | ) | 22.9 | % | (704 | ) | (547 | ) | (157 | ) | 28.7 | % | |||||||||||||||||
Other | 7 | 13 | 30 | 17 | 7 | — | — | % | 67 | 27 | 40 | 148.1 | % | ||||||||||||||||||||||||||
Total other income | 62 | 76 | 57 | 93 | 85 | (23 | ) | (27.1 | )% | 288 | 344 | (56 | ) | (16.3 | )% | ||||||||||||||||||||||||
Other expense: | |||||||||||||||||||||||||||||||||||||||
Employee costs | 333 | 335 | 321 | 325 | 315 | 18 | 5.7 | % | 1,314 | 1,207 | 107 | 8.9 | % | ||||||||||||||||||||||||||
Professional fees | 159 | 161 | 158 | 151 | 164 | (5 | ) | (3.0 | )% | 629 | 638 | (9 | ) | (1.4 | )% | ||||||||||||||||||||||||
Marketing and business development | 156 | 124 | 124 | 94 | 130 | 26 | 20.0 | % | 498 | 423 | 75 | 17.7 | % | ||||||||||||||||||||||||||
Information processing | 99 | 96 | 88 | 90 | 88 | 11 | 12.5 | % | 373 | 338 | 35 | 10.4 | % | ||||||||||||||||||||||||||
Other | 223 | 242 | 220 | 248 | 221 | 2 | 0.9 | % | 933 | 810 | 123 | 15.2 | % | ||||||||||||||||||||||||||
Total other expense | 970 | 958 | 911 | 908 | 918 | 52 | 5.7 | % | 3,747 | 3,416 | 331 | 9.7 | % | ||||||||||||||||||||||||||
Earnings before provision for income taxes | 875 | 879 | 788 | 782 | 908 | (33 | ) | (3.6 | )% | 3,324 | 3,570 | (246 | ) | (6.9 | )% | ||||||||||||||||||||||||
Provision for income taxes | 490 | 324 | 292 | 283 | 332 | 158 | 47.6 | % | 1,389 | 1,319 | 70 | 5.3 | % | ||||||||||||||||||||||||||
Net earnings attributable to common stockholders | $ | 385 | $ | 555 | $ | 496 | $ | 499 | $ | 576 | $ | (191 | ) | (33.2 | )% | $ | 1,935 | $ | 2,251 | $ | (316 | ) | (14.0 | )% | |||||||||||||||
SYNCHRONY FINANCIAL | |||||||||||||||||||||||||
STATEMENTS OF FINANCIAL POSITION | |||||||||||||||||||||||||
(unaudited, $ in millions) | |||||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Dec 31, 2017 vs. Dec 31, 2016 | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Cash and equivalents | $ | 11,602 | $ | 13,915 | $ | 12,020 | $ | 11,392 | $ | 9,321 | $ | 2,281 | 24.5 | % | |||||||||||
Investment securities | 4,488 | 3,317 | 3,997 | 5,328 | 5,110 | (622 | ) | (12.2 | )% | ||||||||||||||||
Loan receivables: | |||||||||||||||||||||||||
Unsecuritized loans held for investment | 55,526 | 53,997 | 52,550 | 50,398 | 52,332 | 3,194 | 6.1 | % | |||||||||||||||||
Restricted loans of consolidated securitization entities | 26,421 | 22,931 | 22,908 | 22,952 | 24,005 | 2,416 | 10.1 | % | |||||||||||||||||
Total loan receivables | 81,947 | 76,928 | 75,458 | 73,350 | 76,337 | 5,610 | 7.3 | % | |||||||||||||||||
Less: Allowance for loan losses | (5,574 | ) | (5,361 | ) | (5,001 | ) | (4,676 | ) | (4,344 | ) | (1,230 | ) | 28.3 | % | |||||||||||
Loan receivables, net | 76,373 | 71,567 | 70,457 | 68,674 | 71,993 | 4,380 | 6.1 | % | |||||||||||||||||
Goodwill | 991 | 991 | 991 | 992 | 949 | 42 | 4.4 | % | |||||||||||||||||
Intangible assets, net | 749 | 772 | 787 | 826 | 712 | 37 | 5.2 | % | |||||||||||||||||
Other assets | 1,605 | 1,986 | 2,888 | 1,838 | 2,122 | (517 | ) | (24.4 | )% | ||||||||||||||||
Total assets | $ | 95,808 | $ | 92,548 | $ | 91,140 | $ | 89,050 | $ | 90,207 | $ | 5,601 | 6.2 | % | |||||||||||
Liabilities and Equity | |||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||
Interest-bearing deposit accounts | $ | 56,276 | $ | 54,232 | $ | 52,659 | $ | 51,359 | $ | 51,896 | $ | 4,380 | 8.4 | % | |||||||||||
Non-interest-bearing deposit accounts | 212 | 222 | 226 | 246 | 159 | 53 | 33.3 | % | |||||||||||||||||
Total deposits | 56,488 | 54,454 | 52,885 | 51,605 | 52,055 | 4,433 | 8.5 | % | |||||||||||||||||
Borrowings: | |||||||||||||||||||||||||
Borrowings of consolidated securitization entities | 12,497 | 11,891 | 12,204 | 12,433 | 12,388 | 109 | 0.9 | % | |||||||||||||||||
Bank term loan | — | — | — | — | — | — | — | % | |||||||||||||||||
Senior unsecured notes | 8,302 | 8,008 | 8,505 | 7,761 | 7,759 | 543 | 7.0 | % | |||||||||||||||||
Total borrowings | 20,799 | 19,899 | 20,709 | 20,194 | 20,147 | 652 | 3.2 | % | |||||||||||||||||
Accrued expenses and other liabilities | 4,287 | 3,793 | 3,214 | 2,888 | 3,809 | 478 | 12.5 | % | |||||||||||||||||
Total liabilities | 81,574 | 78,146 | 76,808 | 74,687 | 76,011 | 5,563 | 7.3 | % | |||||||||||||||||
Equity: | |||||||||||||||||||||||||
Common stock | 1 | 1 | 1 | 1 | 1 | — | — | % | |||||||||||||||||
Additional paid-in capital | 9,445 | 9,429 | 9,415 | 9,405 | 9,393 | 52 | 0.6 | % | |||||||||||||||||
Retained earnings | 6,809 | 6,543 | 6,109 | 5,724 | 5,330 | 1,479 | 27.7 | % | |||||||||||||||||
Accumulated other comprehensive income | (64 | ) | (40 | ) | (49 | ) | (55 | ) | (53 | ) | (11 | ) | 20.8 | % | |||||||||||
Treasury Stock | (1,957 | ) | (1,531 | ) | (1,144 | ) | (712 | ) | (475 | ) | (1,482 | ) | NM | ||||||||||||
Total equity | 14,234 | 14,402 | 14,332 | 14,363 | 14,196 | 38 | 0.3 | % | |||||||||||||||||
Total liabilities and equity | $ | 95,808 | $ | 92,548 | $ | 91,140 | $ | 89,050 | $ | 90,207 | $ | 5,601 | 6.2 | % | |||||||||||
SYNCHRONY FINANCIAL | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(unaudited, $ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 13,591 | $ | 43 | 1.26 | % | $ | 11,895 | $ | 37 | 1.23 | % | $ | 10,758 | $ | 28 | 1.04 | % | $ | 10,552 | $ | 21 | 0.81 | % | $ | 12,210 | $ | 17 | 0.55 | % | ||||||||||||||||||||||||
Securities available for sale | 3,725 | 15 | 1.60 | % | 3,792 | 14 | 1.46 | % | 5,195 | 15 | 1.16 | % | 5,213 | 15 | 1.17 | % | 4,076 | 11 | 1.07 | % | ||||||||||||||||||||||||||||||||||
Loan receivables: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit cards, including held for sale | 75,389 | 4,161 | 21.90 | % | 73,172 | 4,111 | 22.29 | % | 71,206 | 3,858 | 21.73 | % | 71,365 | 3,811 | 21.66 | % | 69,660 | 3,851 | 21.99 | % | ||||||||||||||||||||||||||||||||||
Consumer installment loans | 1,568 | 36 | 9.11 | % | 1,543 | 35 | 9.00 | % | 1,461 | 34 | 9.33 | % | 1,389 | 32 | 9.34 | % | 1,373 | 31 | 8.98 | % | ||||||||||||||||||||||||||||||||||
Commercial credit products | 1,375 | 35 | 10.10 | % | 1,392 | 36 | 10.26 | % | 1,378 | 34 | 9.90 | % | 1,317 | 34 | 10.47 | % | 1,386 | 36 | 10.33 | % | ||||||||||||||||||||||||||||||||||
Other | 37 | 1 | NM | 58 | — | — | % | 45 | 1 | NM | 61 | — | — | % | 57 | 1 | NM | |||||||||||||||||||||||||||||||||||||
Total loan receivables, including held for sale | 78,369 | 4,233 | 21.43 | % | 76,165 | 4,182 | 21.78 | % | 74,090 | 3,927 | 21.26 | % | 74,132 | 3,877 | 21.21 | % | 72,476 | 3,919 | 21.51 | % | ||||||||||||||||||||||||||||||||||
Total interest-earning assets | 95,685 | 4,291 | 17.79 | % | 91,852 | 4,233 | 18.28 | % | 90,043 | 3,970 | 17.68 | % | 89,897 | 3,913 | 17.65 | % | 88,762 | 3,947 | 17.69 | % | ||||||||||||||||||||||||||||||||||
Non-interest-earning assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and due from banks | 1,037 | 877 | 829 | 802 | 739 | |||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | (5,443 | ) | (5,125 | ) | (4,781 | ) | (4,408 | ) | (4,228 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Other assets | 3,219 | 3,517 | 3,303 | 3,177 | 3,479 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total non-interest-earning assets | (1,187 | ) | (731 | ) | (649 | ) | (429 | ) | (10 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 94,498 | $ | 91,121 | $ | 89,394 | $ | 89,468 | $ | 88,752 | ||||||||||||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposit accounts | $ | 55,690 | $ | 233 | 1.66 | % | $ | 53,294 | $ | 219 | 1.63 | % | $ | 51,836 | $ | 202 | 1.56 | % | $ | 51,829 | $ | 194 | 1.52 | % | $ | 51,006 | $ | 188 | 1.47 | % | ||||||||||||||||||||||||
Borrowings of consolidated securitization entities | 12,425 | 70 | 2.24 | % | 11,759 | 65 | 2.19 | % | 12,213 | 63 | 2.07 | % | 12,321 | 65 | 2.14 | % | 12,389 | 64 | 2.06 | % | ||||||||||||||||||||||||||||||||||
Bank term loan | — | — | — | % | — | — | — | % | — | — | — | % | — | — | — | % | — | — | — | % | ||||||||||||||||||||||||||||||||||
Senior unsecured notes | 7,940 | 72 | 3.60 | % | 8,251 | 73 | 3.51 | % | 7,933 | 68 | 3.44 | % | 7,760 | 67 | 3.50 | % | 7,757 | 67 | 3.44 | % | ||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 76,055 | 375 | 1.96 | % | 73,304 | 357 | 1.93 | % | 71,982 | 333 | 1.86 | % | 71,910 | 326 | 1.84 | % | 71,152 | 319 | 1.78 | % | ||||||||||||||||||||||||||||||||||
Non-interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-interest-bearing deposit accounts | 218 | 232 | 218 | 240 | 176 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 3,716 | 3,154 | 2,752 | 2,995 | 3,321 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total non-interest-bearing liabilities | 3,934 | 3,386 | 2,970 | 3,235 | 3,497 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 79,989 | 76,690 | 74,952 | 75,145 | 74,649 | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total equity | 14,509 | 14,431 | 14,442 | 14,323 | 14,103 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 94,498 | $ | 91,121 | $ | 89,394 | $ | 89,468 | $ | 88,752 | ||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 3,916 | $ | 3,876 | $ | 3,637 | $ | 3,587 | $ | 3,628 | ||||||||||||||||||||||||||||||||||||||||||||
Interest rate spread(1) | 15.83 | % | 16.35 | % | 15.82 | % | 15.81 | % | 15.91 | % | ||||||||||||||||||||||||||||||||||||||||||||
Net interest margin(2) | 16.24 | % | 16.74 | % | 16.20 | % | 16.18 | % | 16.26 | % | ||||||||||||||||||||||||||||||||||||||||||||
(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 | |||||||||||||||||||||
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN | |||||||||||||||||||||
(unaudited, $ in millions) | |||||||||||||||||||||
Twelve Months Ended Dec 31, 2017 | Twelve Months Ended Dec 31, 2016 | ||||||||||||||||||||
Interest | Average | Interest | Average | ||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Interest-earning cash and equivalents | $ | 11,707 | $ | 129 | 1.10 | % | $ | 12,152 | $ | 63 | 0.52 | % | |||||||||
Securities available for sale | 4,449 | 59 | 1.33 | % | 3,220 | 33 | 1.02 | % | |||||||||||||
Loan receivables: | |||||||||||||||||||||
Credit cards, including held for sale | 72,795 | 15,941 | 21.90 | % | 65,947 | 14,424 | 21.87 | % | |||||||||||||
Consumer installment loans | 1,491 | 137 | 9.19 | % | 1,274 | 117 | 9.18 | % | |||||||||||||
Commercial credit products | 1,366 | 139 | 10.18 | % | 1,372 | 139 | 10.13 | % | |||||||||||||
Other | 50 | 2 | 4.00 | % | 56 | 2 | 3.57 | % | |||||||||||||
Total loan receivables, including held for sale | 75,702 | 16,219 | 21.42 | % | 68,649 | 14,682 | 21.39 | % | |||||||||||||
Total interest-earning assets | 91,858 | 16,407 | 17.86 | % | 84,021 | 14,778 | 17.59 | % | |||||||||||||
Non-interest-earning assets: | |||||||||||||||||||||
Cash and due from banks | 887 | 965 | |||||||||||||||||||
Allowance for loan losses | (4,942 | ) | (3,872 | ) | |||||||||||||||||
Other assets | 3,304 | 3,286 | |||||||||||||||||||
Total non-interest-earning assets | (751 | ) | 379 | ||||||||||||||||||
Total assets | $ | 91,107 | $ | 84,400 | |||||||||||||||||
Liabilities | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Interest-bearing deposit accounts | $ | 53,173 | $ | 848 | 1.59 | % | $ | 47,194 | $ | 727 | 1.54 | % | |||||||||
Borrowings of consolidated securitization entities | 12,179 | 263 | 2.16 | % | 12,428 | 244 | 1.96 | % | |||||||||||||
Bank term loan(1) | — | — | — | % | 556 | 31 | 5.58 | % | |||||||||||||
Senior unsecured notes | 7,972 | 280 | 3.51 | % | 7,158 | 246 | 3.44 | % | |||||||||||||
Total interest-bearing liabilities | 73,324 | 1,391 | 1.90 | % | 67,336 | 1,248 | 1.85 | % | |||||||||||||
Non-interest-bearing liabilities | |||||||||||||||||||||
Non-interest-bearing deposit accounts | 227 | 205 | |||||||||||||||||||
Other liabilities | 3,129 | 3,239 | |||||||||||||||||||
Total non-interest-bearing liabilities | 3,356 | 3,444 | |||||||||||||||||||
Total liabilities | 76,680 | 70,780 | |||||||||||||||||||
Equity | |||||||||||||||||||||
Total equity | 14,427 | 13,620 | |||||||||||||||||||
Total liabilities and equity | $ | 91,107 | $ | 84,400 | |||||||||||||||||
Net interest income | $ | 15,016 | $ | 13,530 | |||||||||||||||||
Interest rate spread(2) | 15.96 | % | 15.74 | % | |||||||||||||||||
Net interest margin(3) | 16.35 | % | 16.10 | % | |||||||||||||||||
(1) The effective interest rate for the Bank term loan for the 12 months ended December 31, 2016 was 2.48%. The Bank term loan effective rate 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. | |||||||||||||||||||||
SYNCHRONY FINANCIAL | |||||||||||||||||||||||||
BALANCE SHEET STATISTICS | |||||||||||||||||||||||||
(unaudited, $ in millions, except per share statistics) | |||||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Dec 31, 2017 vs. Dec 31, 2016 | ||||||||||||||||||||
BALANCE SHEET STATISTICS | |||||||||||||||||||||||||
Total common equity | $ | 14,234 | $ | 14,402 | $ | 14,332 | $ | 14,363 | $ | 14,196 | $ | 38 | 0.3 | % | |||||||||||
Total common equity as a % of total assets | 14.86 | % | 15.56 | % | 15.73 | % | 16.13 | % | 15.74 | % | (0.88 | )% | |||||||||||||
Tangible assets | $ | 94,068 | $ | 90,785 | $ | 89,362 | $ | 87,232 | $ | 88,546 | $ | 5,522 | 6.2 | % | |||||||||||
Tangible common equity(1) | $ | 12,494 | $ | 12,639 | $ | 12,554 | $ | 12,545 | $ | 12,535 | $ | (41 | ) | (0.3 | )% | ||||||||||
Tangible common equity as a % of tangible assets(1) | 13.28 | % | 13.92 | % | 14.05 | % | 14.38 | % | 14.16 | % | (0.88 | )% | |||||||||||||
Tangible common equity per share(1) | $ | 16.22 | $ | 16.15 | $ | 15.79 | $ | 15.47 | $ | 15.34 | $ | 0.88 | 5.7 | % | |||||||||||
REGULATORY CAPITAL RATIOS(2) | |||||||||||||||||||||||||
Basel III Transition | |||||||||||||||||||||||||
Total risk-based capital ratio(3) | 17.3 | % | 18.7 | % | 18.7 | % | 19.3 | % | 18.5 | % | |||||||||||||||
Tier 1 risk-based capital ratio(4) | 16.0 | % | 17.3 | % | 17.4 | % | 18.0 | % | 17.2 | % | |||||||||||||||
Tier 1 leverage ratio(5) | 13.8 | % | 14.6 | % | 14.8 | % | 14.8 | % | 15.0 | % | |||||||||||||||
Common equity Tier 1 capital ratio(6) | 16.0 | % | 17.3 | % | 17.4 | % | 18.0 | % | 17.2 | % | |||||||||||||||
Basel III Fully Phased-in | |||||||||||||||||||||||||
Common equity Tier 1 capital ratio(6) | 15.8 | % | 17.2 | % | 17.2 | % | 17.7 | % | 17.0 | % | |||||||||||||||
(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 metrics at December 31, 2017 are preliminary and therefore subject to change. | |||||||||||||||||||||||||
(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 leverage ratio is the ratio of Tier 1 capital divided by total average assets, after certain adjustments. Tier 1 leverage ratios are based upon the use of daily averages for all periods presented. | |||||||||||||||||||||||||
(6) Common equity Tier 1 capital ratio is the ratio of common equity Tier 1 capital to total risk-weighted assets, each as calculated under Basel III rules. Common equity Tier 1 capital ratio (fully phased-in) is an estimate reflecting management’s interpretation of the final Basel III 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. | |||||||||||||||||||||||||
SYNCHRONY FINANCIAL | |||||||||||||||||||||||||||||||||||||||
PLATFORM RESULTS | |||||||||||||||||||||||||||||||||||||||
(unaudited, $ in millions) | |||||||||||||||||||||||||||||||||||||||
Quarter Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | 4Q'17 vs. 4Q'16 | Dec 31, 2017 | Dec 31, 2016 | YTD'17 vs. YTD'16 | |||||||||||||||||||||||||||||||
RETAIL CARD | |||||||||||||||||||||||||||||||||||||||
Purchase volume(1)(2) | $ | 29,839 | $ | 26,347 | $ | 27,101 | $ | 22,952 | $ | 28,996 | $ | 843 | 2.9 | % | $ | 106,239 | $ | 101,242 | $ | 4,997 | 4.9 | % | |||||||||||||||||
Period-end loan receivables | $ | 56,230 | $ | 52,119 | $ | 51,437 | $ | 49,905 | $ | 52,701 | $ | 3,529 | 6.7 | % | $ | 56,230 | $ | 52,701 | $ | 3,529 | 6.7 | % | |||||||||||||||||
Average loan receivables, including held for sale | $ | 53,256 | $ | 51,817 | $ | 50,533 | $ | 50,644 | $ | 49,476 | $ | 3,780 | 7.6 | % | $ | 51,570 | $ | 46,963 | $ | 4,607 | 9.8 | % | |||||||||||||||||
Average active accounts (in thousands)(2)(3) | 56,113 | 54,471 | 54,058 | 55,049 | 54,489 | 1,624 | 3.0 | % | 55,142 | 53,344 | 1,798 | 3.4 | % | ||||||||||||||||||||||||||
Interest and fees on loans(2) | $ | 3,133 | $ | 3,102 | $ | 2,900 | $ | 2,888 | $ | 2,909 | $ | 224 | 7.7 | % | $ | 12,023 | $ | 10,898 | $ | 1,125 | 10.3 | % | |||||||||||||||||
Other income(2) | $ | 49 | $ | 61 | $ | 25 | $ | 77 | $ | 70 | $ | (21 | ) | (30.0 | )% | $ | 212 | $ | 288 | $ | (76 | ) | (26.4 | )% | |||||||||||||||
Retailer share arrangements(2) | $ | (771 | ) | $ | (795 | ) | $ | (657 | ) | $ | (681 | ) | $ | (801 | ) | $ | 30 | (3.7 | )% | $ | (2,904 | ) | $ | (2,870 | ) | $ | (34 | ) | 1.2 | % | |||||||||
PAYMENT SOLUTIONS | |||||||||||||||||||||||||||||||||||||||
Purchase volume(1) | $ | 4,366 | $ | 4,178 | $ | 3,930 | $ | 3,686 | $ | 4,194 | $ | 172 | 4.1 | % | $ | 16,160 | $ | 15,641 | $ | 519 | 3.3 | % | |||||||||||||||||
Period-end loan receivables | $ | 16,857 | $ | 16,153 | $ | 15,595 | $ | 15,320 | $ | 15,567 | $ | 1,290 | 8.3 | % | $ | 16,857 | $ | 15,567 | $ | 1,290 | 8.3 | % | |||||||||||||||||
Average loan receivables | $ | 16,386 | $ | 15,848 | $ | 15,338 | $ | 15,424 | $ | 15,076 | $ | 1,310 | 8.7 | % | $ | 15,752 | $ | 14,110 | $ | 1,642 | 11.6 | % | |||||||||||||||||
Average active accounts (in thousands)(3) | 9,421 | 9,183 | 9,031 | 9,090 | 8,844 | 577 | 6.5 | % | 9,192 | 8,410 | 782 | 9.3 | % | ||||||||||||||||||||||||||
Interest and fees on loans | $ | 574 | $ | 559 | $ | 533 | $ | 515 | $ | 523 | $ | 51 | 9.8 | % | $ | 2,181 | $ | 1,952 | $ | 229 | 11.7 | % | |||||||||||||||||
Other income | $ | 2 | $ | 2 | $ | 6 | $ | 4 | $ | 3 | $ | (1 | ) | (33.3 | )% | $ | 14 | $ | 13 | $ | 1 | 7.7 | % | ||||||||||||||||
Retailer share arrangements | $ | (5 | ) | $ | (9 | ) | $ | (9 | ) | $ | (1 | ) | $ | (9 | ) | $ | 4 | (44.4 | )% | $ | (24 | ) | $ | (26 | ) | $ | 2 | (7.7 | )% | ||||||||||
CARECREDIT | |||||||||||||||||||||||||||||||||||||||
Purchase volume(1) | $ | 2,360 | $ | 2,368 | $ | 2,445 | $ | 2,242 | $ | 2,179 | $ | 181 | 8.3 | % | $ | 9,415 | $ | 8,585 | $ | 830 | 9.7 | % | |||||||||||||||||
Period-end loan receivables | $ | 8,860 | $ | 8,656 | $ | 8,426 | $ | 8,125 | $ | 8,069 | $ | 791 | 9.8 | % | $ | 8,860 | $ | 8,069 | $ | 791 | 9.8 | % | |||||||||||||||||
Average loan receivables | $ | 8,727 | $ | 8,500 | $ | 8,219 | $ | 8,064 | $ | 7,924 | $ | 803 | 10.1 | % | $ | 8,380 | $ | 7,576 | $ | 804 | 10.6 | % | |||||||||||||||||
Average active accounts (in thousands)(3) | 5,814 | 5,677 | 5,546 | 5,490 | 5,368 | 446 | 8.3 | % | 5,634 | 5,174 | 460 | 8.9 | % | ||||||||||||||||||||||||||
Interest and fees on loans | $ | 526 | $ | 521 | $ | 494 | $ | 474 | $ | 487 | $ | 39 | 8.0 | % | $ | 2,015 | $ | 1,832 | $ | 183 | 10.0 | % | |||||||||||||||||
Other income | $ | 11 | $ | 13 | $ | 26 | $ | 12 | $ | 12 | $ | (1 | ) | (8.3 | )% | $ | 62 | $ | 43 | $ | 19 | 44.2 | % | ||||||||||||||||
Retailer share arrangements | $ | (3 | ) | $ | (1 | ) | $ | (3 | ) | $ | (2 | ) | $ | (1 | ) | $ | (2 | ) | NM | $ | (9 | ) | $ | (6 | ) | $ | (3 | ) | 50.0 | % | |||||||||
TOTAL SYF | |||||||||||||||||||||||||||||||||||||||
Purchase volume(1)(2) | $ | 36,565 | $ | 32,893 | $ | 33,476 | $ | 28,880 | $ | 35,369 | $ | 1,196 | 3.4 | % | $ | 131,814 | $ | 125,468 | $ | 6,346 | 5.1 | % | |||||||||||||||||
Period-end loan receivables | $ | 81,947 | $ | 76,928 | $ | 75,458 | $ | 73,350 | $ | 76,337 | $ | 5,610 | 7.3 | % | $ | 81,947 | $ | 76,337 | $ | 5,610 | 7.3 | % | |||||||||||||||||
Average loan receivables, including held for sale | $ | 78,369 | $ | 76,165 | $ | 74,090 | $ | 74,132 | $ | 72,476 | $ | 5,893 | 8.1 | % | $ | 75,702 | $ | 68,649 | $ | 7,053 | 10.3 | % | |||||||||||||||||
Average active accounts (in thousands)(2)(3) | 71,348 | 69,331 | 68,635 | 69,629 | 68,701 | 2,647 | 3.9 | % | 69,968 | 66,928 | 3,040 | 4.5 | % | ||||||||||||||||||||||||||
Interest and fees on loans(2) | $ | 4,233 | $ | 4,182 | $ | 3,927 | $ | 3,877 | $ | 3,919 | $ | 314 | 8.0 | % | $ | 16,219 | $ | 14,682 | $ | 1,537 | 10.5 | % | |||||||||||||||||
Other income(2) | $ | 62 | $ | 76 | $ | 57 | $ | 93 | $ | 85 | $ | (23 | ) | (27.1 | )% | $ | 288 | $ | 344 | $ | (56 | ) | (16.3 | )% | |||||||||||||||
Retailer share arrangements(2) | $ | (779 | ) | $ | (805 | ) | $ | (669 | ) | $ | (684 | ) | $ | (811 | ) | $ | 32 | (3.9 | )% | $ | (2,937 | ) | $ | (2,902 | ) | $ | (35 | ) | 1.2 | % | |||||||||
(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 | Twelve Months Ended | ||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Dec 31, 2017 | ||||||||||||||||||
COMMON EQUITY MEASURES | |||||||||||||||||||||||
GAAP Total common equity | $ | 14,234 | $ | 14,402 | $ | 14,332 | $ | 14,363 | $ | 14,196 | |||||||||||||
Less: Goodwill | (991 | ) | (991 | ) | (991 | ) | (992 | ) | (949 | ) | |||||||||||||
Less: Intangible assets, net | (749 | ) | (772 | ) | (787 | ) | (826 | ) | (712 | ) | |||||||||||||
Tangible common equity | $ | 12,494 | $ | 12,639 | $ | 12,554 | $ | 12,545 | $ | 12,535 | |||||||||||||
Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss) | 254 | 344 | 337 | 340 | 337 | ||||||||||||||||||
Basel III - Common equity Tier 1 (fully phased-in) | $ | 12,748 | $ | 12,983 | $ | 12,891 | $ | 12,885 | $ | 12,872 | |||||||||||||
Adjustment related to capital components during transition | 142 | 142 | 146 | 154 | 263 | ||||||||||||||||||
Basel III - Common equity Tier 1 (transition) | $ | 12,890 | $ | 13,125 | $ | 13,037 | $ | 13,039 | $ | 13,135 | |||||||||||||
RISK-BASED CAPITAL | |||||||||||||||||||||||
Common equity Tier 1 | $ | 12,890 | $ | 13,125 | $ | 13,037 | $ | 13,039 | $ | 13,135 | |||||||||||||
Add: Allowance for loan losses includible in risk-based capital | 1,064 | 1,001 | 985 | 954 | 994 | ||||||||||||||||||
Risk-based capital | $ | 13,954 | $ | 14,126 | $ | 14,022 | $ | 13,993 | $ | 14,129 | |||||||||||||
ASSET MEASURES | |||||||||||||||||||||||
Total average assets(2) | $ | 94,498 | $ | 91,121 | $ | 89,394 | $ | 89,468 | $ | 88,752 | |||||||||||||
Adjustments for: | |||||||||||||||||||||||
Disallowed goodwill and other disallowed intangible assets (net of related deferred tax liabilities) and other | (1,392 | ) | (1,304 | ) | (1,325 | ) | (1,358 | ) | (1,059 | ) | |||||||||||||
Total assets for leverage purposes | $ | 93,106 | $ | 89,817 | $ | 88,069 | $ | 88,110 | $ | 87,693 | |||||||||||||
Risk-weighted assets - Basel III (fully phased-in)(3) | $ | 80,526 | $ | 75,614 | $ | 74,748 | $ | 72,596 | $ | 75,941 | |||||||||||||
Risk-weighted assets - Basel III (transition)(3) | $ | 80,669 | $ | 75,729 | $ | 74,792 | $ | 72,627 | $ | 76,179 | |||||||||||||
TANGIBLE COMMON EQUITY PER SHARE | |||||||||||||||||||||||
GAAP book value per share | $ | 18.47 | $ | 18.40 | $ | 18.02 | $ | 17.71 | $ | 17.37 | |||||||||||||
Less: Goodwill | (1.29 | ) | (1.27 | ) | (1.25 | ) | (1.22 | ) | (1.16 | ) | |||||||||||||
Less: Intangible assets, net | (0.96 | ) | (0.98 | ) | (0.98 | ) | (1.02 | ) | (0.87 | ) | |||||||||||||
Tangible common equity per share | $ | 16.22 | $ | 16.15 | $ | 15.79 | $ | 15.47 | $ | 15.34 | |||||||||||||
ADJUSTED NET EARNINGS | |||||||||||||||||||||||
GAAP net earnings | $ | 385 | $ | 555 | $ | 496 | $ | 499 | $ | 576 | $ | 1,935 | |||||||||||
Adjustment for tax law change(4) | 160 | — | — | — | — | 160 | |||||||||||||||||
Adjusted net earnings | $ | 545 | $ | 555 | $ | 496 | $ | 499 | $ | 576 | $ | 2,095 | |||||||||||
ADJUSTED DILUTED EPS | |||||||||||||||||||||||
GAAP diluted EPS | $ | 0.49 | $ | 0.70 | $ | 0.61 | $ | 0.61 | $ | 0.70 | $ | 2.42 | |||||||||||
Adjustment for tax law change(4) | 0.21 | — | — | — | — | 0.20 | |||||||||||||||||
Adjusted diluted EPS | $ | 0.70 | $ | 0.70 | $ | 0.61 | $ | 0.61 | $ | 0.70 | $ | 2.62 | |||||||||||
(1) Regulatory measures at December 31, 2017 are presented on an estimated basis. | |||||||||||||||||||||||
(2) Total average assets are presented based upon the use of daily averages. | |||||||||||||||||||||||
(3) Key differences between Basel III transitional rules and fully phased-in Basel III rules in the calculation of risk-weighted assets include, but not limited to, risk weighting of deferred tax assets and adjustments for certain intangible assets. | |||||||||||||||||||||||
(4) Adjustment to exclude the effects to Provision for income taxes in the quarter ended December 31, 2017, resulting from the Tax Act. | |||||||||||||||||||||||