Exhibit 99.2


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL SUMMARY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, in millions, except per share statistics)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
Nine Months Ended
 
 
 
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
 
Dec 31,
2017
 
Sep 30,
2017
 
3Q'18 vs. 3Q'17
 
Sep 30,
2018
 
Sep 30,
2017
 
YTD'18 vs. YTD'17
EARNINGS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
4,206

 
$
3,737

 
$
3,842

 
$
3,916

 
$
3,876

 
$
330

8.5
 %
 
$
11,785

 
$
11,100

 
$
685

6.2
 %
Retailer share arrangements
(871
)
 
(653
)
 
(720
)
 
(779
)
 
(805
)
 
(66
)
8.2
 %
 
(2,244
)
 
(2,158
)
 
(86
)
4.0
 %
Net interest income, after retailer share arrangements
3,335

 
3,084

 
3,122

 
3,137

 
3,071

 
264

8.6
 %
 
9,541

 
8,942

 
599

6.7
 %
Provision for loan losses
1,451

 
1,280

 
1,362

 
1,354

 
1,310

 
141

10.8
 %
 
4,093

 
3,942

 
151

3.8
 %
Net interest income, after retailer share arrangements and provision for loan losses
1,884

 
1,804

 
1,760

 
1,783

 
1,761

 
123

7.0
 %
 
5,448

 
5,000

 
448

9.0
 %
Other income
63

 
63

 
75

 
62

 
76

 
(13
)
(17.1
)%
 
201

 
226

 
(25
)
(11.1
)%
Other expense
1,054

 
975

 
988

 
970

 
958

 
96

10.0
 %
 
3,017

 
2,777

 
240

8.6
 %
Earnings before provision for income taxes
893

 
892

 
847

 
875

 
879

 
14

1.6
 %
 
2,632

 
2,449

 
183

7.5
 %
Provision for income taxes
222

 
196

 
207

 
490

 
324

 
(102
)
(31.5
)%
 
625

 
899

 
(274
)
(30.5
)%
Net earnings
$
671

 
$
696

 
$
640

 
$
385

 
$
555

 
$
116

20.9
 %
 
$
2,007

 
$
1,550

 
$
457

29.5
 %
Net earnings attributable to common stockholders
$
671

 
$
696

 
$
640

 
$
385

 
$
555

 
$
116

20.9
 %
 
$
2,007


$
1,550


$
457

29.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted net earnings(1)
$
671

 
$
696

 
$
640

 
$
545

 
$
555

 
$
116

20.9
 %
 
$
2,007

 
$
1,550

 
$
457

29.5
 %
 


 


 


 
 
 
 
 
 
 
 


 


 


 
COMMON SHARE STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS
$
0.91

 
$
0.93

 
$
0.84

 
$
0.49

 
$
0.70

 
$
0.21

30.0
 %
 
$
2.68

 
$
1.93

 
$
0.75

38.9
 %
Diluted EPS
$
0.91

 
$
0.92

 
$
0.83

 
$
0.49

 
$
0.70

 
$
0.21

30.0
 %
 
$
2.66

 
$
1.93

 
$
0.73

37.8
 %
Adjusted diluted EPS(1)
$
0.91

 
$
0.92

 
$
0.83

 
$
0.70

 
$
0.70

 
$
0.21

30.0
 %
 
$
2.66

 
$
1.93

 
$
0.73

37.8
 %
Dividend declared per share
$
0.21

 
$
0.15

 
$
0.15

 
$
0.15

 
$
0.15

 
$
0.06

40.0
 %
 
$
0.51

 
$
0.41

 
$
0.10

24.4
 %
Common stock price
$
31.08

 
$
33.38

 
$
33.53

 
$
38.61

 
$
31.05

 
$
0.03

0.1
 %
 
$
31.08

 
$
31.05

 
$
0.03

0.1
 %
Book value per share
$
19.47

 
$
19.37

 
$
18.88

 
$
18.47

 
$
18.40

 
$
1.07

5.8
 %
 
$
19.47

 
$
18.40

 
$
1.07

5.8
 %
Tangible common equity per share(2)
$
16.51

 
$
16.84

 
$
16.55

 
$
16.22

 
$
16.15

 
$
0.36

2.2
 %
 
$
16.51

 
$
16.15

 
$
0.36

2.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning common shares outstanding
746.6

 
760.3

 
770.5

 
782.6

 
795.3

 
(48.7
)
(6.1
)%
 
770.5

 
817.4

 
(46.9
)
(5.7
)%
Issuance of common shares
—

 
—

 
—

 
—

 
—

 
—

—
 %
 
—

 
—

 
—

—
 %
Stock-based compensation
2.4

 
0.3

 
0.2

 
0.1

 
0.1

 
2.3

NM

 
2.9

 
0.3

 
2.6

NM

Shares repurchased
(30.3
)
 
(14.0
)
 
(10.4
)
 
(12.2
)
 
(12.8
)
 
(17.5
)
136.7
 %
 
(54.7
)
 
(35.1
)
 
(19.6
)
55.8
 %
Ending common shares outstanding
718.7

 
746.6

 
760.3

 
770.5

 
782.6

 
(63.9
)
(8.2
)%
 
718.7

 
782.6

 
(63.9
)
(8.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
734.9

 
752.2

 
763.7

 
778.7

 
787.3

 
(52.4
)
(6.7
)%
 
750.2

 
801.3

 
(51.1
)
(6.4
)%
Weighted average common shares outstanding (fully diluted)
738.8

 
758.3

 
770.3

 
784.0

 
790.9

 
(52.1
)
(6.6
)%
 
755.7

 
805.0

 
(49.3
)
(6.1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.

1


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED METRICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions, except account data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Nine Months Ended
 
 
 
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
 
Dec 31,
2017
 
Sep 30,
2017
 
3Q'18 vs. 3Q'17
 
Sep 30,
2018
 
Sep 30,
2017
 
YTD'18 vs. YTD'17
PERFORMANCE METRICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on assets(1)
2.7
%
 
2.9
%
 
2.7
%
 
1.6
%
 
2.4
%
 


0.3
 %
 
2.8
%
 
2.3
%
 


0.5
 %
Return on equity(2)
18.5
%
 
19.4
%
 
18.2
%
 
10.5
%
 
15.3
%
 


3.2
 %
 
18.7
%
 
14.4
%
 


4.3
 %
Return on tangible common equity(3)
21.5
%
 
22.1
%
 
20.7
%
 
12.0
%
 
17.4
%
 


4.1
 %
 
21.5
%
 
16.4
%
 


5.1
 %
Adjusted return on assets(4)
2.7
%
 
2.9
%
 
2.7
%
 
2.3
%
 
2.4
%
 
 
0.3
 %
 
2.8
%
 
2.3
%
 
 
0.5
 %
Adjusted return on equity(4)
18.5
%
 
19.4
%
 
18.2
%
 
14.9
%
 
15.3
%
 
 
3.2
 %
 
18.7
%
 
14.4
%
 
 
4.3
 %
Adjusted return on tangible common equity(5)
21.5
%
 
22.1
%
 
20.7
%
 
17.0
%
 
17.4
%
 
 
4.1
 %
 
21.5
%
 
16.4
%
 
 
5.1
 %
Net interest margin(6)
16.41
%
 
15.33
%
 
16.05
%
 
16.24
%
 
16.74
%
 


(0.33
)%
 
15.94
%
 
16.38
%
 


(0.44
)%
Efficiency ratio(7)
31.0
%
 
31.0
%
 
30.9
%
 
30.3
%
 
30.4
%
 


0.6
 %
 
31.0
%
 
30.3
%
 


0.7
 %
Other expense as a % of average loan receivables, including held for sale
4.82
%
 
5.02
%
 
5.07
%
 
4.91
%
 
4.99
%
 


(0.17
)%
 
4.96
%
 
4.96
%
 


—
 %
Effective income tax rate
24.9
%
 
22.0
%
 
24.4
%
 
56.0
%
 
36.9
%
 


(12.0
)%
 
23.7
%
 
36.7
%
 


(13.0
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY METRICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs as a % of average loan receivables, including held for sale
4.97
%
 
5.97
%
 
6.14
%
 
5.78
%
 
4.95
%
 


0.02
 %
 
5.67
%
 
5.23
%
 


0.44
 %
30+ days past due as a % of period-end loan receivables(8)
4.59
%
 
4.17
%
 
4.52
%
 
4.67
%
 
4.80
%
 


(0.21
)%
 
4.59
%
 
4.80
%
 


(0.21
)%
90+ days past due as a % of period-end loan receivables(8)
2.09
%
 
1.98
%
 
2.28
%
 
2.28
%
 
2.22
%
 


(0.13
)%
 
2.09
%
 
2.22
%
 


(0.13
)%
Net charge-offs
$
1,087

 
$
1,159

 
$
1,198

 
$
1,141

 
$
950

 
$
137

14.4
 %
 
$
3,444

 
$
2,925

 
$
519

17.7
 %
Loan receivables delinquent over 30 days(8)
$
4,021

 
$
3,293

 
$
3,521

 
$
3,831

 
$
3,694

 
$
327

8.9
 %
 
$
4,021

 
$
3,694

 
$
327

8.9
 %
Loan receivables delinquent over 90 days(8)
$
1,833

 
$
1,561

 
$
1,776

 
$
1,869

 
$
1,707

 
$
126

7.4
 %
 
$
1,833

 
$
1,707

 
$
126

7.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses (period-end)
$
6,223

 
$
5,859

 
$
5,738

 
$
5,574

 
$
5,361

 
$
862

16.1
 %
 
$
6,223

 
$
5,361

 
$
862

16.1
 %
Allowance coverage ratio(9)
7.11
%
 
7.43
%
 
7.37
%
 
6.80
%
 
6.97
%
 


0.14
 %
 
7.11
%
 
6.97
%
 


0.14
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BUSINESS METRICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(10)
$
36,443

 
$
34,268

 
$
29,626

 
$
36,565

 
$
32,893

 
$
3,550

10.8
 %
 
$
100,337

 
$
95,249

 
$
5,088

5.3
 %
Period-end loan receivables
$
87,521

 
$
78,879

 
$
77,853

 
$
81,947

 
$
76,928

 
$
10,593

13.8
 %
 
$
87,521

 
$
76,928

 
$
10,593

13.8
 %
Credit cards
$
84,319

 
$
75,753

 
$
74,952

 
$
79,026

 
$
73,946

 
$
10,373

14.0
 %
 
$
84,319

 
$
73,946

 
$
10,373

14.0
 %
Consumer installment loans
$
1,789

 
$
1,708

 
$
1,590

 
$
1,578

 
$
1,561

 
$
228

14.6
 %
 
$
1,789

 
$
1,561

 
$
228

14.6
 %
Commercial credit products
$
1,353

 
$
1,356

 
$
1,275

 
$
1,303

 
$
1,384

 
$
(31
)
(2.2
)%
 
$
1,353

 
$
1,384

 
$
(31
)
(2.2
)%
Other
$
60

 
$
62

 
$
36

 
$
40

 
$
37

 
$
23

62.2
 %
 
$
60

 
$
37

 
$
23

62.2
 %
Average loan receivables, including held for sale
$
86,783

 
$
77,853

 
$
79,090

 
$
78,369

 
$
76,165

 
$
10,618

13.9
 %
 
$
81,270

 
$
74,803

 
$
6,467

8.6
 %
Period-end active accounts (in thousands)(11)
75,457

 
69,767

 
68,891

 
74,541

 
69,008

 
6,449

9.3
 %
 
75,457

 
69,008

 
6,449

9.3
 %
Average active accounts (in thousands)(11)
75,482

 
69,344

 
71,323

 
71,348

 
69,331

 
6,151

8.9
 %
 
72,594

 
69,319

 
3,275

4.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIQUIDITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liquid assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and equivalents
$
12,068

 
$
15,675

 
$
13,044

 
$
11,602

 
$
13,915

 
$
(1,847
)
(13.3
)%
 
$
12,068

 
$
13,915

 
$
(1,847
)
(13.3
)%
Total liquid assets
$
18,214

 
$
21,491

 
$
18,557

 
$
15,087

 
$
16,391

 
$
1,823

11.1
 %
 
$
18,214

 
$
16,391

 
$
1,823

11.1
 %
Undrawn credit facilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Undrawn credit facilities
$
5,125

 
$
6,500

 
$
6,000

 
$
6,000

 
$
5,650

 
$
(525
)
(9.3
)%
 
$
5,125

 
$
5,650

 
$
(525
)
(9.3
)%
Total liquid assets and undrawn credit facilities
$
23,339

 
$
27,991

 
$
24,557

 
$
21,087

 
$
22,041

 
$
1,298

5.9
 %
 
$
23,339

 
$
22,041

 
$
1,298

5.9
 %
Liquid assets % of total assets
17.42
%
 
21.68
%
 
19.42
%
 
15.75
%
 
17.71
%
 


(0.29
)%
 
17.42
%
 
17.71
%
 


(0.29
)%
Liquid assets including undrawn credit facilities % of total assets
22.32
%
 
28.24
%
 
25.70
%
 
22.01
%
 
23.82
%
 


(1.50
)%
 
22.32
%
 
23.82
%
 


(1.50
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.
 
 
 
 
 
 
 

2


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENTS OF EARNINGS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Nine Months Ended
 
 
 
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
 
Dec 31,
2017
 
Sep 30,
2017
 
3Q'18 vs. 3Q'17
 
Sep 30,
2018
 
Sep 30,
2017
 
YTD'18 vs. YTD'17
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
4,617

 
$
4,081

 
$
4,172

 
$
4,233

 
$
4,182

 
$
435

10.4
 %
 
$
12,870

 
$
11,986

 
$
884

7.4
 %
Interest on investment securities
77

 
93

 
72

 
58

 
51

 
26

51.0
 %
 
242

 
130

 
112

86.2
 %
Total interest income
4,694

 
4,174

 
4,244

 
4,291

 
4,233

 
461

10.9
 %
 
13,112

 
12,116

 
996

8.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
314

 
273

 
249

 
233

 
219

 
95

43.4
 %
 
836

 
615

 
221

35.9
 %
Interest on borrowings of consolidated securitization entities
86

 
80

 
74

 
70

 
65

 
21

32.3
 %
 
240

 
193

 
47

24.4
 %
Interest on third-party debt
88

 
84

 
79

 
72

 
73

 
15

20.5
 %
 
251

 
208

 
43

20.7
 %
Total interest expense
488

 
437

 
402

 
375

 
357

 
131

36.7
 %
 
1,327

 
1,016

 
311

30.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
4,206

 
3,737

 
3,842

 
3,916

 
3,876

 
330

8.5
 %
 
11,785

 
11,100

 
685

6.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retailer share arrangements
(871
)
 
(653
)
 
(720
)
 
(779
)
 
(805
)
 
(66
)
8.2
 %
 
(2,244
)
 
(2,158
)
 
(86
)
4.0
 %
Net interest income, after retailer share arrangements
3,335

 
3,084

 
3,122

 
3,137

 
3,071

 
264

8.6
 %
 
9,541

 
8,942

 
599

6.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
1,451

 
1,280

 
1,362

 
1,354

 
1,310

 
141

10.8
 %
 
4,093

 
3,942

 
151

3.8
 %
Net interest income, after retailer share arrangements and provision for loan losses
1,884

 
1,804

 
1,760

 
1,783

 
1,761

 
123

7.0
 %
 
5,448

 
5,000

 
448

9.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interchange revenue
182

 
177

 
158

 
179

 
164

 
18

11.0
 %
 
517

 
474

 
43

9.1
 %
Debt cancellation fees
65

 
66

 
66

 
69

 
67

 
(2
)
(3.0
)%
 
197

 
203

 
(6
)
(3.0
)%
Loyalty programs
(196
)
 
(192
)
 
(155
)
 
(193
)
 
(168
)
 
(28
)
16.7
 %
 
(543
)
 
(511
)
 
(32
)
6.3
 %
Other
12

 
12

 
6

 
7

 
13

 
(1
)
(7.7
)%
 
30

 
60

 
(30
)
(50.0
)%
Total other income
63

 
63

 
75

 
62

 
76

 
(13
)
(17.1
)%
 
201

 
226

 
(25
)
(11.1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee costs(1)
365

 
351

 
358

 
330

 
333

 
32

9.6
 %
 
1,074

 
974

 
100

10.3
 %
Professional fees
232

 
177

 
166

 
159

 
161

 
71

44.1
 %
 
575

 
470

 
105

22.3
 %
Marketing and business development
131

 
110

 
121

 
156

 
124

 
7

5.6
 %
 
362

 
342

 
20

5.8
 %
Information processing
105

 
99

 
104

 
99

 
96

 
9

9.4
 %
 
308

 
274

 
34

12.4
 %
Other(1)
221

 
238

 
239

 
226

 
244

 
(23
)
(9.4
)%
 
698

 
717

 
(19
)
(2.6
)%
Total other expense
1,054

 
975

 
988

 
970

 
958

 
96

10.0
 %
 
3,017

 
2,777

 
240

8.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings before provision for income taxes
893

 
892

 
847

 
875

 
879

 
14

1.6
 %
 
2,632

 
2,449

 
183

7.5
 %
Provision for income taxes
222

 
196

 
207

 
490

 
324

 
(102
)
(31.5
)%
 
625

 
899

 
(274
)
(30.5
)%
Net earnings attributable to common shareholders
$
671

 
$
696

 
$
640

 
$
385

 
$
555

 
$
116

20.9
 %
 
$
2,007

 
$
1,550

 
$
457

29.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) We have reclassified certain amounts within Employee costs to Other for all periods in 2017 to conform to the current period classifications.
 
 
 
 
 
 
 


3


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENTS OF FINANCIAL POSITION
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
 
Dec 31,
2017
 
Sep 30,
2017
 
Sep 30, 2018 vs.
Sep 30, 2017
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Cash and equivalents
$
12,068

 
$
15,675

 
$
13,044

 
$
11,602

 
$
13,915

 
$
(1,847
)
(13.3
)%
Debt securities
7,281

 
6,779

 
6,259

 
4,473

 
3,302

 
3,979

120.5
 %
Loan receivables:
 
 
 
 
 
 
 
 
 
 
 
 
Unsecuritized loans held for investment
59,868

 
50,884

 
52,469

 
55,526

 
53,997

 
5,871

10.9
 %
Restricted loans of consolidated securitization entities
27,653

 
27,995

 
25,384

 
26,421

 
22,931

 
4,722

20.6
 %
Total loan receivables
87,521

 
78,879

 
77,853

 
81,947

 
76,928

 
10,593

13.8
 %
Less: Allowance for loan losses
(6,223
)
 
(5,859
)
 
(5,738
)
 
(5,574
)
 
(5,361
)
 
(862
)
16.1
 %
Loan receivables, net
81,298

 
73,020

 
72,115

 
76,373

 
71,567

 
9,731

13.6
 %
Goodwill
1,024

 
1,024

 
991

 
991

 
991

 
33

3.3
 %
Intangible assets, net
1,105

 
863

 
780

 
749

 
772

 
333

43.1
 %
Other assets
1,769

 
1,761

 
2,370

 
1,620

 
2,001

 
(232
)
(11.6
)%
Total assets
$
104,545

 
$
99,122

 
$
95,559

 
$
95,808

 
$
92,548

 
$
11,997

13.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposit accounts
$
62,030

 
$
58,734

 
$
56,285

 
$
56,276

 
$
54,232

 
$
7,798

14.4
 %
Non-interest-bearing deposit accounts
287

 
277

 
285

 
212

 
222

 
65

29.3
 %
Total deposits
62,317

 
59,011

 
56,570

 
56,488

 
54,454

 
7,863

14.4
 %
Borrowings:
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings of consolidated securitization entities
14,187

 
12,170

 
12,214

 
12,497

 
11,891

 
2,296

19.3
 %
Senior unsecured notes
9,554

 
9,551

 
8,801

 
8,302

 
8,008

 
1,546

19.3
 %
Total borrowings
23,741

 
21,721

 
21,015

 
20,799

 
19,899

 
3,842

19.3
 %
Accrued expenses and other liabilities
4,491

 
3,932

 
3,618

 
4,287

 
3,793

 
698

18.4
 %
Total liabilities
90,549

 
84,664

 
81,203

 
81,574

 
78,146

 
12,403

15.9
 %
Equity:
 
 
 
 
 
 
 
 
 
 
 
 
Common stock
1

 
1

 
1

 
1

 
1

 
—

—
 %
Additional paid-in capital
9,470

 
9,486

 
9,470

 
9,445

 
9,429

 
41

0.4
 %
Retained earnings
8,355

 
7,906

 
7,334

 
6,809

 
6,543

 
1,812

27.7
 %
Accumulated other comprehensive income:
(99
)
 
(93
)
 
(86
)
 
(64
)
 
(40
)
 
(59
)
147.5
 %
Treasury Stock
(3,731
)
 
(2,842
)
 
(2,363
)
 
(1,957
)
 
(1,531
)
 
(2,200
)
143.7
 %
Total equity
13,996

 
14,458

 
14,356

 
14,234

 
14,402

 
(406
)
(2.8
)%
Total liabilities and equity
$
104,545

 
$
99,122

 
$
95,559

 
$
95,808

 
$
92,548

 
$
11,997

13.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 

4


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
 
 
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
$
7,901

 
$
39

 
1.96
%
 
$
13,097

 
$
59

 
1.81
%
 
$
12,434

 
$
47

 
1.53
%
 
$
13,591

 
$
43

 
1.26
%
 
$
11,895

 
$
37

 
1.23
%
Securities available for sale
7,022

 
38

 
2.15
%
 
6,803

 
34

 
2.00
%
 
5,584

 
25

 
1.82
%
 
3,725

 
15

 
1.60
%
 
3,792

 
14

 
1.46
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan receivables:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit cards, including held for sale
83,609

 
4,538

 
21.53
%
 
74,809

 
4,010

 
21.50
%
 
76,181

 
4,099

 
21.82
%
 
75,389

 
4,161

 
21.90
%
 
73,172

 
4,111

 
22.29
%
Consumer installment loans
1,753

 
41

 
9.28
%
 
1,648

 
37

 
9.01
%
 
1,572

 
36

 
9.29
%
 
1,568

 
36

 
9.11
%
 
1,543

 
35

 
9.00
%
Commercial credit products
1,355

 
37

 
10.83
%
 
1,346

 
34

 
10.13
%
 
1,286

 
36

 
11.35
%
 
1,375

 
35

 
10.10
%
 
1,392

 
36

 
10.26
%
Other
66

 
1

 
NM

 
50

 
—

 
—
%
 
51

 
1

 
NM

 
37

 
1

 
NM

 
58

 
—

 
—
%
Total loan receivables, including held for sale
86,783

 
4,617

 
21.11
%
 
77,853

 
4,081

 
21.03
%
 
79,090

 
4,172

 
21.39
%
 
78,369

 
4,233

 
21.43
%
 
76,165

 
4,182

 
21.78
%
Total interest-earning assets
101,706

 
4,694

 
18.31
%
 
97,753

 
4,174

 
17.13
%
 
97,108

 
4,244

 
17.72
%
 
95,685

 
4,291

 
17.79
%
 
91,852

 
4,233

 
18.28
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
1,217

 
 
 
 
 
1,161

 
 
 
 
 
1,197

 
 
 
 
 
1,037

 
 
 
 
 
877

 
 
 
 
Allowance for loan losses
(5,956
)
 
 
 
 
 
(5,768
)
 
 
 
 
 
(5,608
)
 
 
 
 
 
(5,443
)
 
 
 
 
 
(5,125
)
 
 
 
 
Other assets
3,482

 
 
 
 
 
3,068

 
 
 
 
 
3,010

 
 
 
 
 
3,219

 
 
 
 
 
3,517

 
 
 
 
Total non-interest-earning assets
(1,257
)
 
 
 
 
 
(1,539
)
 
 
 
 
 
(1,401
)
 
 
 
 
 
(1,187
)
 
 
 
 
 
(731
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
100,449

 
 
 
 
 
$
96,214

 
 
 
 
 
$
95,707

 
 
 
 
 
$
94,498

 
 
 
 
 
$
91,121

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposit accounts
$
60,123

 
$
314

 
2.07
%
 
$
57,303

 
$
273

 
1.91
%
 
$
56,356

 
$
249

 
1.79
%
 
$
55,690

 
$
233

 
1.66
%
 
$
53,294

 
$
219

 
1.63
%
Borrowings of consolidated securitization entities
12,306

 
86

 
2.77
%
 
11,821

 
80

 
2.71
%
 
12,410

 
74

 
2.42
%
 
12,425

 
70

 
2.24
%
 
11,759

 
65

 
2.19
%
Senior unsecured notes
9,552

 
88

 
3.66
%
 
9,114

 
84

 
3.70
%
 
8,795

 
79

 
3.64
%
 
7,940

 
72

 
3.60
%
 
8,251

 
73

 
3.51
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing liabilities
81,981

 
488

 
2.36
%
 
78,238

 
437

 
2.24
%
 
77,561

 
402

 
2.10
%
 
76,055

 
375

 
1.96
%
 
73,304

 
357

 
1.93
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing deposit accounts
275

 
 
 
 
 
270

 
 
 
 
 
300

 
 
 
 
 
218

 
 
 
 
 
232

 
 
 
 
Other liabilities
3,772

 
 
 
 
 
3,299

 
 
 
 
 
3,570

 
 
 
 
 
3,716

 
 
 
 
 
3,154

 
 
 
 
Total non-interest-bearing liabilities
4,047

 
 
 
 
 
3,569

 
 
 
 
 
3,870

 
 
 
 
 
3,934

 
 
 
 
 
3,386

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities
86,028

 
 
 
 
 
81,807

 
 
 
 
 
81,431

 
 
 
 
 
79,989

 
 
 
 
 
76,690

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total equity
14,421

 
 
 
 
 
14,407

 
 
 
 
 
14,276

 
 
 
 
 
14,509

 
 
 
 
 
14,431

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities and equity
$
100,449

 
 
 
 
 
$
96,214

 
 
 
 
 
$
95,707

 
 
 
 
 
$
94,498

 
 
 
 
 
$
91,121

 
 
 
 
Net interest income
 
 
$
4,206

 
 
 
 
 
$
3,737

 
 
 
 
 
$
3,842

 
 
 
 
 
$
3,916

 
 
 
 
 
$
3,876

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread(1)
 
 
 
 
15.95
%
 
 
 
 
 
14.89
%
 
 
 
 
 
15.62
%
 
 
 
 
 
15.83
%
 
 
 
 
 
16.35
%
Net interest margin(2)
 
 
 
 
16.41
%
 
 
 
 
 
15.33
%
 
 
 
 
 
16.05
%
 
 
 
 
 
16.24
%
 
 
 
 
 
16.74
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.

5


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
Sep 30, 2018
 
Nine Months Ended
Sep 30, 2017
 
 
 
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
$
11,128

 
$
145

 
1.74
%
 
$
11,073

 
$
86

 
1.04
%
Securities available for sale
6,475

 
97

 
2.00
%
 
4,732

 
44

 
1.24
%
 
 
 
 
 
 
 
 
 
 
 
 
Loan receivables:
 
 
 
 
 
 
 
 
 
 
 
Credit cards, including held for sale
78,227

 
12,647

 
21.62
%
 
71,920

 
11,780

 
21.90
%
Consumer installment loans
1,658

 
114

 
9.19
%
 
1,465

 
101

 
9.22
%
Commercial credit products
1,329

 
107

 
10.76
%
 
1,363

 
104

 
10.20
%
Other
56

 
2

 
4.77
%
 
55

 
1

 
2.43
%
Total loan receivables, including held for sale
81,270

 
12,870

 
21.17
%
 
74,803

 
11,986

 
21.42
%
Total interest-earning assets
98,873

 
13,112

 
17.73
%
 
90,608

 
12,116

 
17.88
%
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
1,192

 
 
 
 
 
836

 
 
 
 
Allowance for loan losses
(5,779
)
 
 
 
 
 
(4,774
)
 
 
 
 
Other assets
3,188

 
 
 
 
 
3,334

 
 
 
 
Total non-interest-earning assets
(1,399
)
 
 
 
 
 
(604
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
97,474

 
 
 
 
 
$
90,004

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposit accounts
$
57,941

 
$
836

 
1.93
%
 
$
52,325

 
$
615

 
1.57
%
Borrowings of consolidated securitization entities
12,178

 
240

 
2.63
%
 
12,096

 
193

 
2.13
%
Senior unsecured notes
9,156

 
251

 
3.67
%
 
7,983

 
208

 
3.48
%
Total interest-bearing liabilities
79,275

 
1,327

 
2.24
%
 
72,404

 
1,016

 
1.88
%
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing deposit accounts
282

 
 
 
 
 
230

 
 
 
 
Other liabilities
3,548

 
 
 
 
 
2,971

 
 
 
 
Total non-interest-bearing liabilities
3,830

 
 
 
 
 
3,201

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities
83,105

 
 
 
 
 
75,605

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
 
 
 
 
 
Total equity
14,369

 
 
 
 
 
14,399

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities and equity
$
97,474

 
 
 
 
 
$
90,004

 
 
 
 
Net interest income
 
 
$
11,785

 
 
 
 
 
$
11,100

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread(1)
 
 
 
 
15.49
%
 
 
 
 
 
16.00
%
Net interest margin(2)
 
 
 
 
15.94
%
 
 
 
 
 
16.38
%
 
 
 
 
 
 
 
 
 
 
 
 
(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.


6


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions, except per share statistics)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
 
Dec 31,
2017
 
Sep 30,
2017
 
Sep 30, 2018 vs.
Sep 30, 2017
BALANCE SHEET STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
Total common equity
$
13,996

 
$
14,458

 
$
14,356

 
$
14,234

 
$
14,402

 
$
(406
)
(2.8
)%
Total common equity as a % of total assets
13.39
%
 
14.59
%
 
15.02
%
 
14.86
%
 
15.56
%
 

(2.17
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Tangible assets
$
102,416

 
$
97,235

 
$
93,788

 
$
94,068

 
$
90,785

 
$
11,631

12.8
 %
Tangible common equity(1)
$
11,867

 
$
12,571

 
$
12,585

 
$
12,494

 
$
12,639

 
$
(772
)
(6.1
)%
Tangible common equity as a % of tangible assets(1)
11.59
%
 
12.93
%
 
13.42
%
 
13.28
%
 
13.92
%
 

(2.33
)%
Tangible common equity per share(1)
$
16.51

 
$
16.84

 
$
16.55

 
$
16.22

 
$
16.15

 
$
0.36

2.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
REGULATORY CAPITAL RATIOS(2)
 
 
 
 
 
 
 
 
 
 
 
 

Basel III Fully Phased-in(3)
 
Basel III Transition
 
 
 
Total risk-based capital ratio(4)
15.5
%
 
18.0
%
 
18.1
%
 
17.3
%
 
18.7
%
 
 
 
Tier 1 risk-based capital ratio(5)
14.2
%
 
16.6
%
 
16.8
%
 
16.0
%
 
17.3
%
 
 
 
Tier 1 leverage ratio(6)
12.3
%
 
13.6
%
 
13.7
%
 
13.8
%
 
14.6
%
 
 
 
Common equity Tier 1 capital ratio
14.2
%
 
16.6
%
 
16.8
%
 
16.0
%
 
17.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basel III Fully Phased-in
 
 
 
Common equity Tier 1 capital ratio
14.2
%
 
16.6
%
 
16.8
%
 
15.8
%
 
17.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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 September 30, 2018 are preliminary and therefore subject to change.
(3) Amounts presented do not reflect certain modifications to the regulatory capital rules proposed by the federal banking agencies in September 2017, which among other things, may increase the risk weighting of certain deferred tax assets from 100% to 250% if the proposed rule becomes effective.
(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.


 
 
 
 
 
 
 
 
 
 
 
 
 

7


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PLATFORM RESULTS
 
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
Nine Months Ended
 
 
 
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
 
Dec 31,
2017
 
Sep 30,
2017
 
3Q'18 vs. 3Q'17
 
Sep 30,
2018
 
Sep 30,
2017
 
YTD'18 vs. YTD'17
RETAIL CARD
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1)(2)
$
29,264

 
$
27,340

 
$
23,382

 
$
29,839

 
$
26,347

 
$
2,917

11.1
 %
 
$
79,986

 
$
76,400

 
$
3,586

4.7
 %
Period-end loan receivables
$
60,564

 
$
52,918

 
$
52,531

 
$
56,230

 
$
52,119

 
$
8,445

16.2
 %
 
$
60,564

 
$
52,119

 
$
8,445

16.2
 %
Average loan receivables, including held for sale
$
60,389

 
$
52,427

 
$
53,673

 
$
53,256

 
$
51,817

 
$
8,572

16.5
 %
 
$
55,522

 
$
51,002

 
$
4,520

8.9
 %
Average active accounts (in thousands)(2)(3)
59,846

 
54,092

 
55,927

 
56,113

 
54,471

 
5,375

9.9
 %
 
57,140

 
54,639

 
2,501

4.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans(2)
$
3,465

 
$
2,993

 
$
3,096

 
$
3,133

 
$
3,102

 
$
363

11.7
 %
 
$
9,554

 
$
8,890

 
$
664

7.5
 %
Other income(2)
$
51

 
$
48

 
$
65

 
$
49

 
$
61

 
$
(10
)
(16.4
)%
 
$
164

 
$
163

 
$
1

0.6
 %
Retailer share arrangements(2)
$
(851
)
 
$
(644
)
 
$
(714
)
 
$
(771
)
 
$
(795
)
 
$
(56
)
7.0
 %
 
$
(2,209
)
 
$
(2,133
)
 
$
(76
)
3.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PAYMENT SOLUTIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1)
$
4,606

 
$
4,288

 
$
3,823

 
$
4,366

 
$
4,178

 
$
428

10.2
 %
 
$
12,717

 
$
11,794

 
$
923

7.8
 %
Period-end loan receivables
$
17,639

 
$
16,875

 
$
16,513

 
$
16,857

 
$
16,153

 
$
1,486

9.2
 %
 
$
17,639

 
$
16,153

 
$
1,486

9.2
 %
Average loan receivables
$
17,234

 
$
16,562

 
$
16,629

 
$
16,386

 
$
15,848

 
$
1,386

8.7
 %
 
$
16,810

 
$
15,538

 
$
1,272

8.2
 %
Average active accounts (in thousands)(3)
9,675

 
9,433

 
9,545

 
9,421

 
9,183

 
492

5.4
 %
 
9,569

 
9,108

 
461

5.1
 %
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
601

 
$
566

 
$
562

 
$
574

 
$
559

 
$
42

7.5
 %
 
$
1,729

 
$
1,607

 
$
122

7.6
 %
Other income
$
4

 
$
4

 
$
2

 
$
2

 
$
2

 
$
2

100.0
 %
 
$
10

 
$
12

 
$
(2
)
(16.7
)%
Retailer share arrangements
$
(17
)
 
$
(7
)
 
$
(4
)
 
$
(5
)
 
$
(9
)
 
$
(8
)
88.9
 %
 
$
(28
)
 
$
(19
)
 
$
(9
)
47.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CARECREDIT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1)
$
2,573

 
$
2,640

 
$
2,421

 
$
2,360

 
$
2,368

 
$
205

8.7
 %
 
$
7,634

 
$
7,055

 
$
579

8.2
 %
Period-end loan receivables
$
9,318

 
$
9,086

 
$
8,809

 
$
8,860

 
$
8,656

 
$
662

7.6
 %
 
$
9,318

 
$
8,656

 
$
662

7.6
 %
Average loan receivables
$
9,160

 
$
8,864

 
$
8,788

 
$
8,727

 
$
8,500

 
$
660

7.8
 %
 
$
8,938

 
$
8,263

 
$
675

8.2
 %
Average active accounts (in thousands)(3)
5,961

 
5,819

 
5,851

 
5,814

 
5,677

 
284

5.0
 %
 
5,885

 
5,572

 
313

5.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
551

 
$
522

 
$
514

 
$
526

 
$
521

 
$
30

5.8
 %
 
$
1,587

 
$
1,489

 
$
98

6.6
 %
Other income
$
8

 
$
11

 
$
8

 
$
11

 
$
13

 
$
(5
)
(38.5
)%
 
$
27

 
$
51

 
$
(24
)
(47.1
)%
Retailer share arrangements
$
(3
)
 
$
(2
)
 
$
(2
)
 
$
(3
)
 
$
(1
)
 
$
(2
)
NM

 
$
(7
)
 
$
(6
)
 
$
(1
)
16.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL SYF
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume(1)(2)
$
36,443

 
$
34,268

 
$
29,626

 
$
36,565

 
$
32,893

 
$
3,550

10.8
 %
 
$
100,337

 
$
95,249

 
$
5,088

5.3
 %
Period-end loan receivables
$
87,521

 
$
78,879

 
$
77,853

 
$
81,947

 
$
76,928

 
$
10,593

13.8
 %
 
$
87,521

 
$
76,928

 
$
10,593

13.8
 %
Average loan receivables, including held for sale
$
86,783

 
$
77,853

 
$
79,090

 
$
78,369

 
$
76,165

 
$
10,618

13.9
 %
 
$
81,270

 
$
74,803

 
$
6,467

8.6
 %
Average active accounts (in thousands)(2)(3)
75,482

 
69,344

 
71,323

 
71,348

 
69,331

 
6,151

8.9
 %
 
72,594

 
69,319

 
3,275

4.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans(2)
$
4,617

 
$
4,081

 
$
4,172

 
$
4,233

 
$
4,182

 
$
435

10.4
 %
 
$
12,870

 
$
11,986

 
$
884

7.4
 %
Other income(2)
$
63

 
$
63

 
$
75

 
$
62

 
$
76

 
$
(13
)
(17.1
)%
 
$
201

 
$
226

 
$
(25
)
(11.1
)%
Retailer share arrangements(2)
$
(871
)
 
$
(653
)
 
$
(720
)
 
$
(779
)
 
$
(805
)
 
$
(66
)
8.2
 %
 
$
(2,244
)
 
$
(2,158
)
 
$
(86
)
4.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.
 
 
 
 
 
 
 

8


SYNCHRONY FINANCIAL
 
 
 
 
 
 
 
 
 
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES(1)
 
 
(unaudited, $ in millions, except per share statistics)
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Sep 30,
2018
 
Jun 30,
2018
 
Mar 31,
2018
 
Dec 31,
2017
 
Sep 30,
2017
COMMON EQUITY MEASURES
 
 
 
 
 
 
 
 
 
GAAP Total common equity
$
13,996

 
$
14,458

 
$
14,356

 
$
14,234

 
$
14,402

Less: Goodwill
(1,024
)
 
(1,024
)
 
(991
)
 
(991
)
 
(991
)
Less: Intangible assets, net
(1,105
)
 
(863
)
 
(780
)
 
(749
)
 
(772
)
Tangible common equity
$
11,867

 
$
12,571

 
$
12,585

 
$
12,494

 
$
12,639

 
 
 
 
 
 
 
 
 
 
Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss)
311

 
287

 
278

 
254

 
344

Basel III - Common equity Tier 1 (fully phased-in)
$
12,178

 
$
12,858

 
$
12,863

 
$
12,748

 
$
12,983

Adjustment related to capital components during transition
 
 

 

 
142

 
142

Basel III - Common equity Tier 1 (transition)

 

 

 
$
12,890

 
$
13,125

 
 
 
 
 
 
 
 
 
 
RISK-BASED CAPITAL
 
 
 
 
 
 
 
 
 
Common equity Tier 1
$
12,178

 
$
12,858

 
$
12,863

 
$
12,890

 
$
13,125

Add: Allowance for loan losses includible in risk-based capital
1,137

 
1,027

 
1,015

 
1,064

 
1,001

Risk-based capital
$
13,315

 
$
13,885

 
$
13,878

 
$
13,954

 
$
14,126

 
 
 
 
 
 
 
 
 
 
ASSET MEASURES
 
 
 
 
 
 
 
 
 
Total average assets
$
100,449

 
$
96,214

 
$
95,707

 
$
94,498

 
$
91,121

Adjustments for:
 
 
 
 
 
 
 
 
 
Disallowed goodwill and other disallowed intangible assets
(net of related deferred tax liabilities) and other
(1,836
)
 
(1,670
)
 
(1,560
)
 
(1,392
)
 
(1,304
)
Total assets for leverage purposes
$
98,613

 
$
94,544

 
$
94,147

 
$
93,106

 
$
89,817

 
 
 
 
 
 
 
 
 
 
Risk-weighted assets - Basel III (fully phased-in)
$
85,941

 
$
77,322

 
$
76,509

 
$
80,526

 
$
75,614

Risk-weighted assets - Basel III (transition)
 
 


 


 
$
80,669

 
$
75,729

 
 
 
 
 
 
 
 
 
 
TANGIBLE COMMON EQUITY PER SHARE
 
 
 
 
 
 
 
 
 
GAAP book value per share
$
19.47

 
$
19.37

 
$
18.88

 
$
18.47

 
$
18.40

Less: Goodwill
(1.42
)
 
(1.37
)
 
(1.30
)
 
(1.29
)
 
(1.27
)
Less: Intangible assets, net
(1.54
)
 
(1.16
)
 
(1.03
)
 
(0.96
)
 
(0.98
)
Tangible common equity per share
$
16.51

 
$
16.84

 
$
16.55

 
$
16.22

 
$
16.15

 
 
 
 
 
 
 
 
 
 
ADJUSTED NET EARNINGS
 
 
 
 
 
 
 
 
 
GAAP net earnings
$
671

 
$
696

 
$
640

 
$
385

 
$
555

Adjustment for tax law change(2)
—

 
—

 
—

 
160

 
—

Adjusted net earnings
$
671

 
$
696

 
$
640

 
$
545

 
$
555

 
 
 
 
 
 
 
 
 
 
ADJUSTED DILUTED EPS
 
 
 
 
 
 
 
 
 
GAAP diluted EPS
$
0.91

 
$
0.92

 
$
0.83

 
$
0.49

 
$
0.70

Adjustment for tax law change(2)
—

 
—

 
—

 
0.21

 
—

Adjusted diluted EPS
$
0.91

 
$
0.92

 
$
0.83

 
$
0.70

 
$
0.70

 
 
(1) Regulatory measures at September 30, 2018 are presented on an estimated basis.
(2) Adjustment to exclude the effects to Provision for income taxes in the quarter ended December 31, 2017, resulting from the Tax Act.
 
 

9