Synchrony Financial Reports Third Quarter Net Earnings of $555 Million or $0.70 Per Diluted Share
STAMFORD, Conn.--(BUSINESS WIRE)-- Synchrony Financial (NYSE: SYF) today announced third quarter 2017 net earnings of $555 million, or $0.70 per diluted share. Highlights for the quarter included:
- Net interest income increased 11% from the third quarter of 2016 to $3.9 billion
- Loan receivables grew $6 billion, or 9%, from the third quarter of 2016 to $77 billion
- Purchase volume increased 4% from the third quarter of 2016
- Strong deposit growth continued, up $5 billion, or 9%, over the third quarter of 2016
- Renewed relationships: Yamaha, BrandsMart U.S.A., Nautilus, Mars Petcare, and Evine
- Launched new programs with At Home and zulily
- Launched new 2% Cash Back value proposition at PayPal
- Launched new CareCredit Dual Card™
- Quarterly common stock dividend payment of $0.15 per share and repurchased $390 million of Synchrony Financial common stock
“Our focus on strong organic growth across our sales platforms has helped deliver another solid quarter. Renewing key relationships remains a priority—we recently renewed several programs in addition to launching two new ones. Compelling value propositions are integral to driving program growth and we are pleased to continue to launch innovative solutions that provide value to our partners and cardholders. Our deposit base comprises a significant portion of our funding and, as such, generating deposit growth through attractive rates and great customer service is a priority,” said Margaret Keane, President and Chief Executive Officer of Synchrony Financial. “We have maintained solid returns and a strong balance sheet and remain focused on returning capital to shareholders.”
Business and Financial Highlights for the Third Quarter of 2017
All comparisons below are for the third quarter of 2017 compared to the third quarter of 2016, unless otherwise noted.
Earnings
- Net interest income increased $395 million, or 11%, to $3.9 billion, primarily driven by strong loan receivables growth. Net interest income after retailer share arrangements increased 13%.
- Provision for loan losses increased $324 million to $1.3 billion driven by credit normalization and loan receivables growth.
- Other income was down $8 million to $76 million, primarily due to higher loyalty program expense, partially offset by higher interchange revenue.
- Other expense increased $99 million to $958 million, primarily driven by business growth.
- Net earnings totaled $555 million compared to $604 million in the third quarter of 2016.
Balance Sheet
- Period-end loan receivables growth remained strong at 9%, primarily driven by purchase volume growth of 4% and average active account growth of 4%.
- Deposits grew to $54 billion, up $5 billion, or 9%, and comprised 73% of funding compared to 71% last year.
- The Company’s balance sheet remained strong with total liquidity (liquid assets and undrawn credit facilities) of $22 billion, or 24% of total assets.
- The estimated Common Equity Tier 1 ratio under Basel III subject to transition provisions was 17.3% and the estimated fully phased-in Common Equity Tier 1 ratio under Basel III was 17.2%.
Key Financial Metrics
- Return on assets was 2.4% and return on equity was 15.3%.
- Net interest margin increased 40 basis points to 16.74%.
- Efficiency ratio was 30.4%, compared to 30.6% in the third quarter of 2016, driven by strong positive operating leverage. Year-to-date efficiency ratio was 30.3%, compared to 31.0% in the prior year.
Credit Quality
- Loans 30+ days past due as a percentage of total period-end loan receivables were 4.80% compared to 4.26% last year.
- Net charge-offs as a percentage of total average loan receivables were 4.95% compared to 4.39% last year.
- The allowance for loan losses as a percentage of total period-end loan receivables was 6.97% compared to 5.82% last year.
Sales Platforms
- Retail Card interest and fees on loans increased 11%, driven primarily by period-end loan receivables growth of 9%. Purchase volume growth was 4% and average active account growth was 3%. Loan receivables growth was broad-based across partner programs.
- Payment Solutions interest and fees on loans increased 11%, driven primarily by period-end loan receivables growth of 9%. Purchase volume growth was 6%, adjusted to exclude the impact from the hhgregg bankruptcy, and average active account growth was 9%. Loan receivables growth was led by home furnishings and automotive.
- CareCredit interest and fees on loans increased 9%, driven primarily by period-end loan receivables growth of 10%. Purchase volume growth was 9% and average active account growth was 9%. Loan receivables growth was led by dental and veterinary.
Corresponding Financial Tables and Information
No representation is made that the information in this news release is complete. Investors are encouraged to review the foregoing summary and discussion of Synchrony Financial's earnings and financial condition in conjunction with the detailed financial tables and information that follow and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed February 23, 2017, and the Company’s forthcoming Quarterly Report on Form 10-Q for the quarter ended September 30, 2017. The detailed financial tables and other information are also available on the Investor Relations page of the Company’s website at www.investors.synchronyfinancial.com. This information is also furnished in a Current Report on Form 8-K filed with the SEC today.
Conference Call and Webcast Information
On Friday, October 20, 2017, at 8:30 a.m. Eastern Time, Margaret Keane, President and Chief Executive Officer, and Brian Doubles, Executive Vice President and Chief Financial Officer, will host a conference call to review the financial results and outlook for certain business drivers. The conference call can be accessed via an audio webcast through the Investor Relations page on the Synchrony Financial corporate website, www.investors.synchronyfinancial.com, under Events and Presentations. A replay will be available on the website or by dialing (888) 843-7419 (U.S. domestic) or (630) 652-3042 (international), passcode 32017#, and can be accessed beginning approximately two hours after the event through November 3, 2017.
About Synchrony Financial
Synchrony Financial (NYSE: SYF) is one of the nation’s premier consumer financial services companies. Our roots in consumer finance trace back to 1932, and today we are the largest provider of private label credit cards in the United States based on purchase volume and receivables.* We provide a range of credit products through programs we have established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers to help generate growth for our partners and offer financial flexibility to our customers. Through our partners’ over 365,000 locations across the United States and Canada, and their websites and mobile applications, we offer our customers a variety of credit products to finance the purchase of goods and services. Synchrony Financial offers private label credit cards, Dual Card™ and general purpose co-branded credit cards, promotional financing and installment lending, loyalty programs and FDIC-insured savings products through Synchrony Bank. More information can be found at www.synchronyfinancial.com, facebook.com/SynchronyFinancial, www.linkedin.com/company/synchrony-financial and twitter.com/SYFNews.
*Source: The Nilson Report (June 2017, Issue # 1112) - based on 2016 data.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains certain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “targets,” “outlook,” “estimates,” “will,” “should,” “may” or words of similar meaning, but these words are not the exclusive means of identifying forward-looking statements. Forward-looking statements are based on management’s current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include global political, economic, business, competitive, market, regulatory and other factors and risks, such as: the impact of macroeconomic conditions and whether industry trends we have identified develop as anticipated; 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 news release and in our public filings, including under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 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.
Non-GAAP Measures
The information provided herein includes measures we refer to as “tangible common equity” and certain capital ratios, which are not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please see the detailed financial tables and information that follow. For a statement regarding the usefulness of these measures to investors, please see the Company’s Current Report on Form 8-K filed with the SEC today.
| SYNCHRONY FINANCIAL | ||||||||||||||||||||||||||||||||||||||||||
| FINANCIAL SUMMARY | ||||||||||||||||||||||||||||||||||||||||||
| (unaudited, in millions, except per share statistics) | ||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||
|
Sep 30,
2017 |
Jun 30,
2017 |
Mar 31,
2017 |
Dec 31,
2016 |
Sep 30,
2016 |
3Q'17 vs. 3Q'16 |
Sep 30,
2017 |
Sep 30,
2016 |
YTD'17 vs. YTD'16 | ||||||||||||||||||||||||||||||||||
|
EARNINGS |
||||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 3,876 | $ | 3,637 | $ | 3,587 | $ | 3,628 | $ | 3,481 | $ | 395 | 11.3 | % | $ | 11,100 | $ | 9,902 | $ | 1,198 | 12.1 | % | ||||||||||||||||||||
| Retailer share arrangements | (805 | ) | (669 | ) | (684 | ) | (811 | ) | (757 | ) | (48 | ) | 6.3 | % | (2,158 | ) | (2,091 | ) | (67 | ) | 3.2 | % | ||||||||||||||||||||
| Net interest income, after retailer share arrangements | 3,071 | 2,968 | 2,903 | 2,817 | 2,724 | 347 | 12.7 | % | 8,942 | 7,811 | 1,131 | 14.5 | % | |||||||||||||||||||||||||||||
| Provision for loan losses | 1,310 | 1,326 | 1,306 | 1,076 | 986 | 324 | 32.9 | % | 3,942 | 2,910 | 1,032 | 35.5 | % | |||||||||||||||||||||||||||||
| Net interest income, after retailer share arrangements and provision for loan losses | 1,761 | 1,642 | 1,597 | 1,741 | 1,738 | 23 | 1.3 | % | 5,000 | 4,901 | 99 | 2.0 | % | |||||||||||||||||||||||||||||
| Other income | 76 | 57 | 93 | 85 | 84 | (8 | ) | (9.5 | )% | 226 | 259 | (33 | ) | (12.7 | )% | |||||||||||||||||||||||||||
| Other expense | 958 | 911 | 908 | 918 | 859 | 99 | 11.5 | % | 2,777 | 2,498 | 279 | 11.2 | % | |||||||||||||||||||||||||||||
| Earnings before provision for income taxes | 879 | 788 | 782 | 908 | 963 | (84 | ) | (8.7 | )% | 2,449 | 2,662 | (213 | ) | (8.0 | )% | |||||||||||||||||||||||||||
| Provision for income taxes | 324 | 292 | 283 | 332 | 359 | (35 | ) | (9.7 | )% | 899 | 987 | (88 | ) | (8.9 | )% | |||||||||||||||||||||||||||
| Net earnings | $ | 555 | $ | 496 | $ | 499 | $ | 576 | $ | 604 | $ | (49 | ) | (8.1 | )% | $ | 1,550 | $ | 1,675 | $ | (125 | ) | (7.5 | )% | ||||||||||||||||||
| Net earnings attributable to common stockholders | $ | 555 | $ | 496 | $ | 499 | $ | 576 | $ | 604 | $ | (49 | ) | (8.1 | )% | $ | 1,550 | $ | 1,675 | $ | (125 | ) | (7.5 | )% | ||||||||||||||||||
|
COMMON SHARE STATISTICS |
||||||||||||||||||||||||||||||||||||||||||
| Basic EPS | $ | 0.70 | $ | 0.62 | $ | 0.61 | $ | 0.70 | $ | 0.73 | $ | (0.03 | ) | (4.1 | )% | $ | 1.93 | $ | 2.01 | $ | (0.08 | ) | (4.0 | )% | ||||||||||||||||||
| Diluted EPS | $ | 0.70 | $ | 0.61 | $ | 0.61 | $ | 0.70 | $ | 0.73 | $ | (0.03 | ) | (4.1 | )% | $ | 1.93 | $ | 2.01 | $ | (0.08 | ) | (4.0 | )% | ||||||||||||||||||
| Dividend declared per share | $ | 0.15 | $ | 0.13 | $ | 0.13 | $ | 0.13 | $ | 0.13 | $ | 0.02 | 15.4 | % | $ | 0.41 | $ | 0.13 | $ | 0.28 | NM | |||||||||||||||||||||
| Common stock price | $ | 31.05 | $ | 29.82 | $ | 34.30 | $ | 36.27 | $ | 28.00 | $ | 3.05 | 10.9 | % | $ | 31.05 | $ | 28.00 | $ | 3.05 | 10.9 | % | ||||||||||||||||||||
| Book value per share | $ | 18.40 | $ | 18.02 | $ | 17.71 | $ | 17.37 | $ | 16.94 | $ | 1.46 | 8.6 | % | $ | 18.40 | $ | 16.94 | $ | 1.46 | 8.6 | % | ||||||||||||||||||||
| Tangible common equity per share(1) | $ | 16.15 | $ | 15.79 | $ | 15.47 | $ | 15.34 | $ | 14.90 | $ | 1.25 | 8.4 | % | $ | 16.15 | $ | 14.90 | $ | 1.25 | 8.4 | % | ||||||||||||||||||||
| Beginning common shares outstanding | 795.3 | 810.8 | 817.4 | 825.5 | 833.9 | (38.6 | ) | (4.6 | )% | 817.4 | 833.8 | (16.4 | ) | (2.0 | )% | |||||||||||||||||||||||||||
| Issuance of common shares | - | - | - | - | - | - | - | % | - | - | - | - | % | |||||||||||||||||||||||||||||
| Stock-based compensation | 0.1 | 0.2 | - | - | 0.1 | - | - | % | 0.3 | 0.2 | 0.1 | 50.0 | % | |||||||||||||||||||||||||||||
| Shares repurchased | (12.8 | ) | (15.7 | ) | (6.6 | ) | (8.1 | ) | (8.5 | ) | (4.3 | ) | 50.6 | % | (35.1 | ) | (8.5 | ) | (26.6 | ) | NM | |||||||||||||||||||||
| Ending common shares outstanding | 782.6 | 795.3 | 810.8 | 817.4 | 825.5 | (42.9 | ) | (5.2 | )% | 782.6 | 825.5 | (42.9 | ) | (5.2 | )% | |||||||||||||||||||||||||||
| Weighted average common shares outstanding | 787.3 | 804.0 | 813.1 | 820.5 | 828.4 | (41.1 | ) | (5.0 | )% | 801.3 | 832.1 | (30.8 | ) | (3.7 | )% | |||||||||||||||||||||||||||
| Weighted average common shares outstanding (fully diluted) | 790.9 | 807.4 | 817.1 | 823.8 | 830.6 | (39.7 | ) | (4.8 | )% | 805.0 | 834.1 | (29.1 | ) | (3.5 | )% | |||||||||||||||||||||||||||
| (1) Tangible Common Equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures. |
| SYNCHRONY FINANCIAL | ||||||||||||||||||||||||||||||||||||||||||
| SELECTED METRICS | ||||||||||||||||||||||||||||||||||||||||||
| (unaudited, $ in millions, except account data) | ||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||
|
Sep 30,
2017 |
Jun 30,
2017 |
Mar 31,
2017 |
Dec 31,
2016 |
Sep 30,
2016 |
3Q'17 vs. 3Q'16 |
Sep 30,
2017 |
Sep 30,
2016 |
YTD'17 vs. YTD'16 | ||||||||||||||||||||||||||||||||||
|
PERFORMANCE METRICS |
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| Return on assets(1) | 2.4 | % | 2.2 | % | 2.3 | % | 2.6 | % | 2.8 | % | (0.4 | )% | 2.3 | % | 2.7 | % | (0.4 | )% | ||||||||||||||||||||||||
| Return on equity(2) | 15.3 | % | 13.8 | % | 14.1 | % | 16.2 | % | 17.3 | % | (2.0 | )% | 14.4 | % | 16.6 | % | (2.2 | )% | ||||||||||||||||||||||||
| Return on tangible common equity(3) | 17.4 | % | 15.7 | % | 16.1 | % | 18.4 | % | 19.6 | % | (2.2 | )% | 16.4 | % | 18.9 | % | (2.5 | )% | ||||||||||||||||||||||||
| Net interest margin(4) | 16.74 | % | 16.20 | % | 16.18 | % | 16.26 | % | 16.34 | % | 0.40 | % | 16.38 | % | 16.05 | % | 0.33 | % | ||||||||||||||||||||||||
| Efficiency ratio(5) | 30.4 | % | 30.1 | % | 30.3 | % | 31.6 | % | 30.6 | % | (0.2 | )% | 30.3 | % | 31.0 | % | (0.7 | )% | ||||||||||||||||||||||||
| Other expense as a % of average loan receivables, including held for sale | 4.99 | % | 4.93 | % | 4.97 | % | 5.04 | % | 4.93 | % | 0.06 | % | 4.96 | % | 4.95 | % | 0.01 | % | ||||||||||||||||||||||||
| Effective income tax rate | 36.9 | % | 37.1 | % | 36.2 | % | 36.6 | % | 37.3 | % | (0.4 | )% | 36.7 | % | 37.1 | % | (0.4 | )% | ||||||||||||||||||||||||
|
CREDIT QUALITY METRICS |
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| Net charge-offs as a % of average loan receivables, including held for sale | 4.95 | % | 5.42 | % | 5.33 | % | 4.65 | % | 4.39 | % | 0.56 | % | 5.23 | % | 4.54 | % | 0.69 | % | ||||||||||||||||||||||||
| 30+ days past due as a % of period-end loan receivables(6) | 4.80 | % | 4.25 | % | 4.25 | % | 4.32 | % | 4.26 | % | 0.54 | % | 4.80 | % | 4.26 | % | 0.54 | % | ||||||||||||||||||||||||
| 90+ days past due as a % of period-end loan receivables(6) | 2.22 | % | 1.90 | % | 2.06 | % | 2.03 | % | 1.89 | % | 0.33 | % | 2.22 | % | 1.89 | % | 0.33 | % | ||||||||||||||||||||||||
| Net charge-offs | $ | 950 | $ | 1,001 | $ | 974 | $ | 847 | $ | 765 | $ | 185 | 24.2 | % | $ | 2,925 | $ | 2,292 | $ | 633 | 27.6 | % | ||||||||||||||||||||
| Loan receivables delinquent over 30 days(6) | $ | 3,694 | $ | 3,208 | $ | 3,120 | $ | 3,295 | $ | 3,008 | $ | 686 | 22.8 | % | $ | 3,694 | $ | 3,008 | $ | 686 | 22.8 | % | ||||||||||||||||||||
| Loan receivables delinquent over 90 days(6) | $ | 1,707 | $ | 1,435 | $ | 1,508 | $ | 1,546 | $ | 1,334 | $ | 373 | 28.0 | % | $ | 1,707 | $ | 1,334 | $ | 373 | 28.0 | % | ||||||||||||||||||||
| Allowance for loan losses (period-end) | $ | 5,361 | $ | 5,001 | $ | 4,676 | $ | 4,344 | $ | 4,115 | $ | 1,246 | 30.3 | % | $ | 5,361 | $ | 4,115 | $ | 1,246 | 30.3 | % | ||||||||||||||||||||
| Allowance coverage ratio(7) | 6.97 | % | 6.63 | % | 6.37 | % | 5.69 | % | 5.82 | % | 1.15 | % | 6.97 | % | 5.82 | % | 1.15 | % | ||||||||||||||||||||||||
|
BUSINESS METRICS |
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| Purchase volume(8) | $ | 32,893 | $ | 33,476 | $ | 28,880 | $ | 35,369 | $ | 31,615 | $ | 1,278 | 4.0 | % | $ | 95,249 | $ | 90,099 | $ | 5,150 | 5.7 | % | ||||||||||||||||||||
| Period-end loan receivables | $ | 76,928 | $ | 75,458 | $ | 73,350 | $ | 76,337 | $ | 70,644 | $ | 6,284 | 8.9 | % | $ | 76,928 | $ | 70,644 | $ | 6,284 | 8.9 | % | ||||||||||||||||||||
| Credit cards | $ | 73,946 | $ | 72,492 | $ | 70,587 | $ | 73,580 | $ | 67,858 | $ | 6,088 | 9.0 | % | $ | 73,946 | $ | 67,858 | $ | 6,088 | 9.0 | % | ||||||||||||||||||||
| Consumer installment loans | $ | 1,561 | $ | 1,514 | $ | 1,411 | $ | 1,384 | $ | 1,361 | $ | 200 | 14.7 | % | $ | 1,561 | $ | 1,361 | $ | 200 | 14.7 | % | ||||||||||||||||||||
| Commercial credit products | $ | 1,384 | $ | 1,386 | $ | 1,311 | $ | 1,333 | $ | 1,385 | $ | (1 | ) | (0.1 | )% | $ | 1,384 | $ | 1,385 | $ | (1 | ) | (0.1 | )% | ||||||||||||||||||
| Other | $ | 37 | $ | 66 | $ | 41 | $ | 40 | $ | 40 | $ | (3 | ) | (7.5 | )% | $ | 37 | $ | 40 | $ | (3 | ) | (7.5 | )% | ||||||||||||||||||
| Average loan receivables, including held for sale | $ | 76,165 | $ | 74,090 | $ | 74,132 | $ | 72,476 | $ | 69,316 | $ | 6,849 | 9.9 | % | $ | 74,803 | $ | 67,364 | $ | 7,439 | 11.0 | % | ||||||||||||||||||||
| Period-end active accounts (in thousands)(9) | 69,008 | 69,277 | 67,905 | 71,890 | 66,781 | 2,227 | 3.3 | % | 69,008 | 66,781 | 2,227 | 3.3 | % | |||||||||||||||||||||||||||||
| Average active accounts (in thousands)(9) | 69,331 | 68,635 | 69,629 | 68,701 | 66,639 | 2,692 | 4.0 | % | 69,319 | 66,204 | 3,115 | 4.7 | % | |||||||||||||||||||||||||||||
|
LIQUIDITY |
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| Liquid assets | ||||||||||||||||||||||||||||||||||||||||||
| Cash and equivalents | $ | 13,915 | $ | 12,020 | $ | 11,392 | $ | 9,321 | $ | 13,588 | $ | 327 | 2.4 | % | $ | 13,915 | $ | 13,588 | $ | 327 | 2.4 | % | ||||||||||||||||||||
| Total liquid assets | $ | 16,391 | $ | 15,274 | $ | 16,158 | $ | 13,612 | $ | 16,362 | $ | 29 | 0.2 | % | $ | 16,391 | $ | 16,362 | $ | 29 | 0.2 | % | ||||||||||||||||||||
| Undrawn credit facilities | ||||||||||||||||||||||||||||||||||||||||||
| Undrawn credit facilities | $ | 5,650 | $ | 6,650 | $ | 5,600 | $ | 6,700 | $ | 7,150 | $ | (1,500 | ) | (21.0 | )% | $ | 5,650 | $ | 7,150 | $ | (1,500 | ) | (21.0 | )% | ||||||||||||||||||
| Total liquid assets and undrawn credit facilities | $ | 22,041 | $ | 21,924 | $ | 21,758 | $ | 20,312 | $ | 23,512 | $ | (1,471 | ) | (6.3 | )% | $ | 22,041 | $ | 23,512 | $ | (1,471 | ) | (6.3 | )% | ||||||||||||||||||
| Liquid assets % of total assets | 17.71 | % | 16.76 | % | 18.14 | % | 15.09 | % | 18.77 | % | (1.06 | )% | 17.71 | % | 18.77 | % | (1.06 | )% | ||||||||||||||||||||||||
| Liquid assets including undrawn credit facilities % of total assets | 23.82 | % | 24.06 | % | 24.43 | % | 22.52 | % | 26.98 | % | (3.16 | )% | 23.82 | % | 26.98 | % | (3.16 | )% | ||||||||||||||||||||||||
| (1) Return on assets represents net earnings as a percentage of average total assets. |
| (2) Return on equity represents net earnings as a percentage of average total equity. |
| (3) Return on tangible common equity represents net earnings as a percentage of average tangible common equity. Tangible common equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures. |
| (4) Net interest margin represents net interest income divided by average interest-earning assets. |
| (5) Efficiency ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income. |
| (6) Based on customer statement-end balances extrapolated to the respective period-end date. |
| (7) Allowance coverage ratio represents allowance for loan losses divided by total period-end loan receivables. |
| (8) Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period. |
| (9) 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 | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||
|
Sep 30,
2017 |
Jun 30,
2017 |
Mar 31,
2017 |
Dec 31,
2016 |
Sep 30,
2016 |
3Q'17 vs. 3Q'16 |
Sep 30,
2017 |
Sep 30,
2016 |
YTD'17 vs. YTD'16 | ||||||||||||||||||||||||||||||||||
| Interest income: | ||||||||||||||||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 4,182 | $ | 3,927 | $ | 3,877 | $ | 3,919 | $ | 3,771 | $ | 411 | 10.9 | % | $ | 11,986 | $ | 10,763 | $ | 1,223 | 11.4 | % | ||||||||||||||||||||
| Interest on investment securities | 51 | 43 | 36 | 28 | 25 | 26 | 104.0 | % | 130 | 68 | 62 | 91.2 | % | |||||||||||||||||||||||||||||
| Total interest income | 4,233 | 3,970 | 3,913 | 3,947 | 3,796 | 437 | 11.5 | % | 12,116 | 10,831 | 1,285 | 11.9 | % | |||||||||||||||||||||||||||||
| Interest expense: | ||||||||||||||||||||||||||||||||||||||||||
| Interest on deposits | 219 | 202 | 194 | 188 | 188 | 31 | 16.5 | % | 615 | 539 | 76 | 14.1 | % | |||||||||||||||||||||||||||||
| Interest on borrowings of consolidated securitization entities | 65 | 63 | 65 | 64 | 63 | 2 | 3.2 | % | 193 | 180 | 13 | 7.2 | % | |||||||||||||||||||||||||||||
| Interest on third-party debt | 73 | 68 | 67 | 67 | 64 | 9 | 14.1 | % | 208 | 210 | (2 | ) | (1.0 | )% | ||||||||||||||||||||||||||||
| Total interest expense | 357 | 333 | 326 | 319 | 315 | 42 | 13.3 | % | 1,016 | 929 | 87 | 9.4 | % | |||||||||||||||||||||||||||||
| Net interest income | 3,876 | 3,637 | 3,587 | 3,628 | 3,481 | 395 | 11.3 | % | 11,100 | 9,902 | 1,198 | 12.1 | % | |||||||||||||||||||||||||||||
| Retailer share arrangements | (805 | ) | (669 | ) | (684 | ) | (811 | ) | (757 | ) | (48 | ) | 6.3 | % | (2,158 | ) | (2,091 | ) | (67 | ) | 3.2 | % | ||||||||||||||||||||
| Net interest income, after retailer share arrangements | 3,071 | 2,968 | 2,903 | 2,817 | 2,724 | 347 | 12.7 | % | 8,942 | 7,811 | 1,131 | 14.5 | % | |||||||||||||||||||||||||||||
| Provision for loan losses | 1,310 | 1,326 | 1,306 | 1,076 | 986 | 324 | 32.9 | % | 3,942 | 2,910 | 1,032 | 35.5 | % | |||||||||||||||||||||||||||||
| Net interest income, after retailer share arrangements and provision for loan losses | 1,761 | 1,642 | 1,597 | 1,741 | 1,738 | 23 | 1.3 | % | 5,000 | 4,901 | 99 | 2.0 | % | |||||||||||||||||||||||||||||
| Other income: | ||||||||||||||||||||||||||||||||||||||||||
| Interchange revenue | 164 | 165 | 145 | 167 | 154 | 10 | 6.5 | % | 474 | 435 | 39 | 9.0 | % | |||||||||||||||||||||||||||||
| Debt cancellation fees | 67 | 68 | 68 | 68 | 67 | - | - | % | 203 | 194 | 9 | 4.6 | % | |||||||||||||||||||||||||||||
| Loyalty programs | (168 | ) | (206 | ) | (137 | ) | (157 | ) | (145 | ) | (23 | ) | 15.9 | % | (511 | ) | (390 | ) | (121 | ) | 31.0 | % | ||||||||||||||||||||
| Other | 13 | 30 | 17 | 7 | 8 | 5 | 62.5 | % | 60 | 20 | 40 | NM | ||||||||||||||||||||||||||||||
| Total other income | 76 | 57 | 93 | 85 | 84 | (8 | ) | (9.5 | )% | 226 | 259 | (33 | ) | (12.7 | )% | |||||||||||||||||||||||||||
| Other expense: | ||||||||||||||||||||||||||||||||||||||||||
| Employee costs | 335 | 321 | 325 | 315 | 311 | 24 | 7.7 | % | 981 | 892 | 89 | 10.0 | % | |||||||||||||||||||||||||||||
| Professional fees | 161 | 158 | 151 | 164 | 174 | (13 | ) | (7.5 | )% | 470 | 474 | (4 | ) | (0.8 | )% | |||||||||||||||||||||||||||
| Marketing and business development | 124 | 124 | 94 | 130 | 92 | 32 | 34.8 | % | 342 | 293 | 49 | 16.7 | % | |||||||||||||||||||||||||||||
| Information processing | 96 | 88 | 90 | 88 | 87 | 9 | 10.3 | % | 274 | 250 | 24 | 9.6 | % | |||||||||||||||||||||||||||||
| Other | 242 | 220 | 248 | 221 | 195 | 47 | 24.1 | % | 710 | 589 | 121 | 20.5 | % | |||||||||||||||||||||||||||||
| Total other expense | 958 | 911 | 908 | 918 | 859 | 99 | 11.5 | % | 2,777 | 2,498 | 279 | 11.2 | % | |||||||||||||||||||||||||||||
| Earnings before provision for income taxes | 879 | 788 | 782 | 908 | 963 | (84 | ) | (8.7 | )% | 2,449 | 2,662 | (213 | ) | (8.0 | )% | |||||||||||||||||||||||||||
| Provision for income taxes | 324 | 292 | 283 | 332 | 359 | (35 | ) | (9.7 | )% | 899 | 987 | (88 | ) | (8.9 | )% | |||||||||||||||||||||||||||
|
Net earnings attributable to common shareholders |
$ | 555 | $ | 496 | $ | 499 | $ | 576 | $ | 604 | $ | (49 | ) | (8.1 | )% | $ | 1,550 | $ | 1,675 | $ | (125 | ) | (7.5 | )% | ||||||||||||||||||
| SYNCHRONY FINANCIAL | |||||||||||||||||||||||||||
| STATEMENTS OF FINANCIAL POSITION | |||||||||||||||||||||||||||
| (unaudited, $ in millions) | |||||||||||||||||||||||||||
| Quarter Ended | |||||||||||||||||||||||||||
|
Sep 30,
2017 |
Jun 30,
2017 |
Mar 31,
2017 |
Dec 31,
2016 |
Sep 30,
2016 |
Sep 30, 2017 vs.
Sep 30, 2016 |
||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||
| Cash and equivalents | $ | 13,915 | $ | 12,020 | $ | 11,392 | $ | 9,321 | $ | 13,588 | $ | 327 | 2.4 | % | |||||||||||||
| Investment securities | 3,317 | 3,997 | 5,328 | 5,110 | 3,356 | (39 | ) | (1.2 | )% | ||||||||||||||||||
| Loan receivables: | |||||||||||||||||||||||||||
| Unsecuritized loans held for investment | 53,997 | 52,550 | 50,398 | 52,332 | 47,517 | 6,480 | 13.6 | % | |||||||||||||||||||
| Restricted loans of consolidated securitization entities | 22,931 | 22,908 | 22,952 | 24,005 | 23,127 | (196 | ) | (0.8 | )% | ||||||||||||||||||
| Total loan receivables | 76,928 | 75,458 | 73,350 | 76,337 | 70,644 | 6,284 | 8.9 | % | |||||||||||||||||||
| Less: Allowance for loan losses | (5,361 | ) | (5,001 | ) | (4,676 | ) | (4,344 | ) | (4,115 | ) | (1,246 | ) | 30.3 | % | |||||||||||||
| Loan receivables, net | 71,567 | 70,457 | 68,674 | 71,993 | 66,529 | 5,038 | 7.6 | % | |||||||||||||||||||
| Goodwill | 991 | 991 | 992 | 949 | 949 | 42 | 4.4 | % | |||||||||||||||||||
| Intangible assets, net | 772 | 787 | 826 | 712 | 733 | 39 | 5.3 | % | |||||||||||||||||||
| Other assets | 1,986 | 2,888 | 1,838 | 2,122 | 2,004 | (18 | ) | (0.9 | )% | ||||||||||||||||||
| Total assets | $ | 92,548 | $ | 91,140 | $ | 89,050 | $ | 90,207 | $ | 87,159 | $ | 5,389 | 6.2 | % | |||||||||||||
| Liabilities and Equity | |||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||
| Interest-bearing deposit accounts | $ | 54,232 | $ | 52,659 | $ | 51,359 | $ | 51,896 | $ | 49,611 | $ | 4,621 | 9.3 | % | |||||||||||||
| Non-interest-bearing deposit accounts | 222 | 226 | 246 | 159 | 204 | 18 | 8.8 | % | |||||||||||||||||||
| Total deposits | 54,454 | 52,885 | 51,605 | 52,055 | 49,815 | 4,639 | 9.3 | % | |||||||||||||||||||
| Borrowings: | |||||||||||||||||||||||||||
| Borrowings of consolidated securitization entities | 11,891 | 12,204 | 12,433 | 12,388 | 12,411 | (520 | ) | (4.2 | )% | ||||||||||||||||||
| Bank term loan | - | - | - | - | - | - | - | % | |||||||||||||||||||
| Senior unsecured notes | 8,008 | 8,505 | 7,761 | 7,759 | 7,756 | 252 | 3.2 | % | |||||||||||||||||||
| Total borrowings | 19,899 | 20,709 | 20,194 | 20,147 | 20,167 | (268 | ) | (1.3 | )% | ||||||||||||||||||
| Accrued expenses and other liabilities | 3,793 | 3,214 | 2,888 | 3,809 | 3,196 | 597 | 18.7 | % | |||||||||||||||||||
| Total liabilities | 78,146 | 76,808 | 74,687 | 76,011 | 73,178 | 4,968 | 6.8 | % | |||||||||||||||||||
| Equity: | |||||||||||||||||||||||||||
| Common stock | 1 | 1 | 1 | 1 | 1 | - | - | % | |||||||||||||||||||
| Additional paid-in capital | 9,429 | 9,415 | 9,405 | 9,393 | 9,381 | 48 | 0.5 | % | |||||||||||||||||||
| Retained earnings | 6,543 | 6,109 | 5,724 | 5,330 | 4,861 | 1,682 | 34.6 | % | |||||||||||||||||||
| Accumulated other comprehensive income: | (40 | ) | (49 | ) | (55 | ) | (53 | ) | (24 | ) | (16 | ) | 66.7 | % | |||||||||||||
| Treasury Stock | (1,531 | ) | (1,144 | ) | (712 | ) | (475 | ) | (238 | ) | (1,293 | ) | NM | ||||||||||||||
| Total equity | 14,402 | 14,332 | 14,363 | 14,196 | 13,981 | 421 | 3.0 | % | |||||||||||||||||||
| Total liabilities and equity | $ | 92,548 | $ | 91,140 | $ | 89,050 | $ | 90,207 | $ | 87,159 | $ | 5,389 | 6.2 | % | |||||||||||||
| SYNCHRONY FINANCIAL | ||||||||||||||||||||||||||||||||||||||||||||||||||
| AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (unaudited, $ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 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 | $ | 11,895 | $ | 37 | 1.23 | % | $ | 10,758 | $ | 28 | 1.04 | % | $ | 10,552 | $ | 21 | 0.81 | % | $ | 12,210 | $ | 17 | 0.55 | % | $ | 12,480 | $ | 16 | 0.51 | % | ||||||||||||||||||||
| Securities available for sale | 3,792 | 14 | 1.46 | % | 5,195 | 15 | 1.16 | % | 5,213 | 15 | 1.17 | % | 4,076 | 11 | 1.07 | % | 2,960 | 9 | 1.21 | % | ||||||||||||||||||||||||||||||
| Loan receivables: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit cards, including held for sale | 73,172 | 4,111 | 22.29 | % | 71,206 | 3,858 | 21.73 | % | 71,365 | 3,811 | 21.66 | % | 69,660 | 3,851 | 21.99 | % | 66,519 | 3,705 | 22.16 | % | ||||||||||||||||||||||||||||||
| Consumer installment loans | 1,543 | 35 | 9.00 | % | 1,461 | 34 | 9.33 | % | 1,389 | 32 | 9.34 | % | 1,373 | 31 | 8.98 | % | 1,333 | 31 | 9.25 | % | ||||||||||||||||||||||||||||||
| Commercial credit products | 1,392 | 36 | 10.26 | % | 1,378 | 34 | 9.90 | % | 1,317 | 34 | 10.47 | % | 1,386 | 36 | 10.33 | % | 1,401 | 35 | 9.94 | % | ||||||||||||||||||||||||||||||
| Other | 58 | - | - | % | 45 | 1 | NM | 61 | - | - | % | 57 | 1 | NM | 63 | - | - | % | ||||||||||||||||||||||||||||||||
| Total loan receivables, including held for sale | 76,165 | 4,182 | 21.78 | % | 74,090 | 3,927 | 21.26 | % | 74,132 | 3,877 | 21.21 | % | 72,476 | 3,919 | 21.51 | % | 69,316 | 3,771 | 21.64 | % | ||||||||||||||||||||||||||||||
| Total interest-earning assets | 91,852 | 4,233 | 18.28 | % | 90,043 | 3,970 | 17.68 | % | 89,897 | 3,913 | 17.65 | % | 88,762 | 3,947 | 17.69 | % | 84,756 | 3,796 | 17.82 | % | ||||||||||||||||||||||||||||||
| Non-interest-earning assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 877 | 829 | 802 | 739 | 862 | |||||||||||||||||||||||||||||||||||||||||||||
| Allowance for loan losses | (5,125 | ) | (4,781 | ) | (4,408 | ) | (4,228 | ) | (3,933 | ) | ||||||||||||||||||||||||||||||||||||||||
| Other assets | 3,517 | 3,303 | 3,177 | 3,479 | 3,189 | |||||||||||||||||||||||||||||||||||||||||||||
| Total non-interest-earning assets | (731 | ) | (649 | ) | (429 | ) | (10 | ) | 118 | |||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 91,121 | $ | 89,394 | $ | 89,468 | $ | 88,752 | $ | 84,874 | ||||||||||||||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposit accounts | $ | 53,294 | $ | 219 | 1.63 | % | $ | 51,836 | $ | 202 | 1.56 | % | $ | 51,829 | $ | 194 | 1.52 | % | $ | 51,006 | $ | 188 | 1.47 | % | $ | 47,895 | $ | 188 | 1.56 | % | ||||||||||||||||||||
| Borrowings of consolidated securitization entities | 11,759 | 65 | 2.19 | % | 12,213 | 63 | 2.07 | % | 12,321 | 65 | 2.14 | % | 12,389 | 64 | 2.06 | % | 12,254 | 63 | 2.05 | % | ||||||||||||||||||||||||||||||
| Bank term loan | - | - | - | % | - | - | - | % | - | - | - | % | - | - | - | % | - | - | - | % | ||||||||||||||||||||||||||||||
| Senior unsecured notes | 8,251 | 73 | 3.51 | % | 7,933 | 68 | 3.44 | % | 7,760 | 67 | 3.50 | % | 7,757 | 67 | 3.44 | % | 7,448 | 64 | 3.42 | % | ||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 73,304 | 357 | 1.93 | % | 71,982 | 333 | 1.86 | % | 71,910 | 326 | 1.84 | % | 71,152 | 319 | 1.78 | % | 67,597 | 315 | 1.85 | % | ||||||||||||||||||||||||||||||
| Non-interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-interest-bearing deposit accounts | 232 | 218 | 240 | 176 | 204 | |||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 3,154 | 2,752 | 2,995 | 3,321 | 3,175 | |||||||||||||||||||||||||||||||||||||||||||||
| Total non-interest-bearing liabilities | 3,386 | 2,970 | 3,235 | 3,497 | 3,379 | |||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 76,690 | 74,952 | 75,145 | 74,649 | 70,976 | |||||||||||||||||||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total equity | 14,431 | 14,442 | 14,323 | 14,103 | 13,898 | |||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 91,121 | $ | 89,394 | $ | 89,468 | $ | 88,752 | $ | 84,874 | ||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 3,876 | $ | 3,637 | $ | 3,587 | $ | 3,628 | $ | 3,481 | ||||||||||||||||||||||||||||||||||||||||
| Interest rate spread(1) | 16.35 | % | 15.82 | % | 15.81 | % | 15.91 | % | 15.97 | % | ||||||||||||||||||||||||||||||||||||||||
| Net interest margin(2) | 16.74 | % | 16.20 | % | 16.18 | % | 16.26 | % | 16.34 | % | ||||||||||||||||||||||||||||||||||||||||
| (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) | ||||||||||||||||||||
|
Nine Months Ended
Sep 30, 2017 |
Nine Months Ended
Sep 30, 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 | $ | 11,073 | $ | 86 | 1.04 | % | $ | 12,132 | $ | 46 | 0.51 | % | ||||||||
| Securities available for sale | 4,732 | 44 | 1.24 | % | 2,932 | 22 | 1.00 | % | ||||||||||||
| Loan receivables: | ||||||||||||||||||||
| Credit cards, including held for sale | 71,920 | 11,780 | 21.90 | % | 64,701 | 10,573 | 21.83 | % | ||||||||||||
| Consumer installment loans | 1,465 | 101 | 9.22 | % | 1,240 | 86 | 9.26 | % | ||||||||||||
| Commercial credit products | 1,363 | 104 | 10.20 | % | 1,367 | 103 | 10.06 | % | ||||||||||||
| Other | 55 | 1 | 2.43 | % | 56 | 1 | 2.39 | % | ||||||||||||
| Total loan receivables, including held for sale | 74,803 | 11,986 | 21.42 | % | 67,364 | 10,763 | 21.34 | % | ||||||||||||
| Total interest-earning assets | 90,608 | 12,116 | 17.88 | % | 82,428 | 10,831 | 17.55 | % | ||||||||||||
| Non-interest-earning assets: | ||||||||||||||||||||
| Cash and due from banks | 836 | 1,041 | ||||||||||||||||||
| Allowance for loan losses | (4,774 | ) | (3,752 | ) | ||||||||||||||||
| Other assets | 3,334 | 3,222 | ||||||||||||||||||
| Total non-interest-earning assets | (604 | ) | 511 | |||||||||||||||||
| Total assets | $ | 90,004 | $ | 82,939 | ||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing deposit accounts | $ | 52,325 | $ | 615 | 1.57 | % | $ | 45,915 | $ | 539 | 1.57 | % | ||||||||
| Borrowings of consolidated securitization entities | 12,096 | 193 | 2.13 | % | 12,441 | 180 | 1.93 | % | ||||||||||||
| Bank term loan(1) | - | - | - | % | 742 | 31 | 5.58 | % | ||||||||||||
| Senior unsecured notes | 7,983 | 208 | 3.48 | % | 6,957 | 179 | 3.44 | % | ||||||||||||
| Total interest-bearing liabilities | 72,404 | 1,016 | 1.88 | % | 66,055 | 929 | 1.88 | % | ||||||||||||
| Non-interest-bearing liabilities | ||||||||||||||||||||
| Non-interest-bearing deposit accounts | 230 | 215 | ||||||||||||||||||
| Other liabilities | 2,971 | 3,211 | ||||||||||||||||||
| Total non-interest-bearing liabilities | 3,201 | 3,426 | ||||||||||||||||||
| Total liabilities | 75,605 | 69,481 | ||||||||||||||||||
| Equity | ||||||||||||||||||||
| Total equity | 14,399 | 13,458 | ||||||||||||||||||
| Total liabilities and equity | $ | 90,004 | $ | 82,939 | ||||||||||||||||
| Net interest income | $ | 11,100 | $ | 9,902 | ||||||||||||||||
| Interest rate spread(2) | 16.00 | % | 15.67 | % | ||||||||||||||||
| Net interest margin(3) | 16.38 | % | 16.05 | % | ||||||||||||||||
| (1) The effective interest rate for the Bank term loan for the 9 months ended September 30, 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 | ||||||||||||||||||||||||||
|
Sep 30,
2017 |
Jun 30,
2017 |
Mar 31,
2017 |
Dec 31,
2016 |
Sep 30,
2016 |
Sep 30, 2017 vs.
Sep 30, 2016 |
|||||||||||||||||||||
|
BALANCE SHEET STATISTICS |
||||||||||||||||||||||||||
| Total common equity | $ | 14,402 | $ | 14,332 | $ | 14,363 | $ | 14,196 | $ | 13,981 | $ | 421 | 3.0 | % | ||||||||||||
| Total common equity as a % of total assets | 15.56 | % | 15.73 | % | 16.13 | % | 15.74 | % | 16.04 | % | (0.48 | )% | ||||||||||||||
| Tangible assets | $ | 90,785 | $ | 89,362 | $ | 87,232 | $ | 88,546 | $ | 85,477 | $ | 5,308 | 6.2 | % | ||||||||||||
| Tangible common equity(1) | $ | 12,639 | $ | 12,554 | $ | 12,545 | $ | 12,535 | $ | 12,299 | $ | 340 | 2.8 | % | ||||||||||||
| Tangible common equity as a % of tangible assets(1) | 13.92 | % | 14.05 | % | 14.38 | % | 14.16 | % | 14.39 | % | (0.47 | )% | ||||||||||||||
| Tangible common equity per share(1) | $ | 16.15 | $ | 15.79 | $ | 15.47 | $ | 15.34 | $ | 14.90 | $ | 1.25 | 8.4 | % | ||||||||||||
|
REGULATORY CAPITAL RATIOS(2) |
||||||||||||||||||||||||||
| Basel III Transition | ||||||||||||||||||||||||||
| Total risk-based capital ratio(3) | 18.7 | % | 18.7 | % | 19.3 | % | 18.5 | % | 19.5 | % | ||||||||||||||||
| Tier 1 risk-based capital ratio(4) | 17.3 | % | 17.4 | % | 18.0 | % | 17.2 | % | 18.2 | % | ||||||||||||||||
| Tier 1 leverage ratio(5) | 14.6 | % | 14.8 | % | 14.8 | % | 15.0 | % | 15.4 | % | ||||||||||||||||
| Common equity Tier 1 capital ratio(6) | 17.3 | % | 17.4 | % | 18.0 | % | 17.2 | % | 18.2 | % | ||||||||||||||||
| Basel III Fully Phased-in | ||||||||||||||||||||||||||
| Common equity Tier 1 capital ratio(6) | 17.2 | % | 17.2 | % | 17.7 | % | 17.0 | % | 17.9 | % | ||||||||||||||||
| (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, 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 a preliminary 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 | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||
|
Sep 30,
2017 |
Jun 30,
2017 |
Mar 31,
2017 |
Dec 31,
2016 |
Sep 30,
2016 |
3Q'17 vs. 3Q'16 |
Sep 30,
2017 |
Sep 30,
2016 |
YTD'17 vs. YTD'16 | ||||||||||||||||||||||||||||||||||
|
RETAIL CARD |
||||||||||||||||||||||||||||||||||||||||||
| Purchase volume(1)(2) | $ | 26,347 | $ | 27,101 | $ | 22,952 | $ | 28,996 | $ | 25,285 | $ | 1,062 | 4.2 | % | $ | 76,400 | $ | 72,246 | $ | 4,154 | 5.7 | % | ||||||||||||||||||||
| Period-end loan receivables | $ | 52,119 | $ | 51,437 | $ | 49,905 | $ | 52,701 | $ | 48,010 | $ | 4,109 | 8.6 | % | $ | 52,119 | $ | 48,010 | $ | 4,109 | 8.6 | % | ||||||||||||||||||||
| Average loan receivables, including held for sale | $ | 51,817 | $ | 50,533 | $ | 50,644 | $ | 49,476 | $ | 47,274 | $ | 4,543 | 9.6 | % | $ | 51,002 | $ | 46,119 | $ | 4,883 | 10.6 | % | ||||||||||||||||||||
| Average active accounts (in thousands)(2)(3) | 54,471 | 54,058 | 55,049 | 54,489 | 52,959 | 1,512 | 2.9 | % | 54,639 | 52,834 | 1,805 | 3.4 | % | |||||||||||||||||||||||||||||
| Interest and fees on loans(2) | $ | 3,102 | $ | 2,900 | $ | 2,888 | $ | 2,909 | $ | 2,790 | $ | 312 | 11.2 | % | $ | 8,890 | $ | 7,989 | $ | 901 | 11.3 | % | ||||||||||||||||||||
| Other income(2) | $ | 61 | $ | 25 | $ | 77 | $ | 70 | $ | 70 | $ | (9 | ) | (12.9 | )% | $ | 163 | $ | 218 | $ | (55 | ) | (25.2 | )% | ||||||||||||||||||
| Retailer share arrangements(2) | $ | (795 | ) | $ | (657 | ) | $ | (681 | ) | $ | (801 | ) | $ | (752 | ) | $ | (43 | ) | 5.7 | % | $ | (2,133 | ) | $ | (2,069 | ) | $ | (64 | ) | 3.1 | % | |||||||||||
|
PAYMENT SOLUTIONS |
||||||||||||||||||||||||||||||||||||||||||
| Purchase volume(1) | $ | 4,178 | $ | 3,930 | $ | 3,686 | $ | 4,194 | $ | 4,152 | $ | 26 | 0.6 | % | $ | 11,794 | $ | 11,447 | $ | 347 | 3.0 | % | ||||||||||||||||||||
| Period-end loan receivables | $ | 16,153 | $ | 15,595 | $ | 15,320 | $ | 15,567 | $ | 14,798 | $ | 1,355 | 9.2 | % | $ | 16,153 | $ | 14,798 | $ | 1,355 | 9.2 | % | ||||||||||||||||||||
| Average loan receivables | $ | 15,848 | $ | 15,338 | $ | 15,424 | $ | 15,076 | $ | 14,367 | $ | 1,481 | 10.3 | % | $ | 15,538 | $ | 13,786 | $ | 1,752 | 12.7 | % | ||||||||||||||||||||
| Average active accounts (in thousands)(3) | 9,183 | 9,031 | 9,090 | 8,844 | 8,461 | 722 | 8.5 | % | 9,108 | 8,261 | 847 | 10.3 | % | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 559 | $ | 533 | $ | 515 | $ | 523 | $ | 505 | $ | 54 | 10.7 | % | $ | 1,607 | $ | 1,429 | $ | 178 | 12.5 | % | ||||||||||||||||||||
| Other income | $ | 2 | $ | 6 | $ | 4 | $ | 3 | $ | 3 | $ | (1 | ) | (33.3 | )% | $ | 12 | $ | 10 | $ | 2 | 20.0 | % | |||||||||||||||||||
| Retailer share arrangements | $ | (9 | ) | $ | (9 | ) | $ | (1 | ) | $ | (9 | ) | $ | (3 | ) | $ | (6 | ) | NM | $ | (19 | ) | $ | (17 | ) | $ | (2 | ) | 11.8 | % | ||||||||||||
|
CARECREDIT |
||||||||||||||||||||||||||||||||||||||||||
| Purchase volume(1) | $ | 2,368 | $ | 2,445 | $ | 2,242 | $ | 2,179 | $ | 2,178 | $ | 190 | 8.7 | % | $ | 7,055 | $ | 6,406 | $ | 649 | 10.1 | % | ||||||||||||||||||||
| Period-end loan receivables | $ | 8,656 | $ | 8,426 | $ | 8,125 | $ | 8,069 | $ | 7,836 | $ | 820 | 10.5 | % | $ | 8,656 | $ | 7,836 | $ | 820 | 10.5 | % | ||||||||||||||||||||
| Average loan receivables | $ | 8,500 | $ | 8,219 | $ | 8,064 | $ | 7,924 | $ | 7,675 | $ | 825 | 10.7 | % | $ | 8,263 | $ | 7,459 | $ | 804 | 10.8 | % | ||||||||||||||||||||
| Average active accounts (in thousands)(3) | 5,677 | 5,546 | 5,490 | 5,368 | 5,219 | 458 | 8.8 | % | 5,572 | 5,109 | 463 | 9.1 | % | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 521 | $ | 494 | $ | 474 | $ | 487 | $ | 476 | $ | 45 | 9.5 | % | $ | 1,489 | $ | 1,345 | $ | 144 | 10.7 | % | ||||||||||||||||||||
| Other income | $ | 13 | $ | 26 | $ | 12 | $ | 12 | $ | 11 | $ | 2 | 18.2 | % | $ | 51 | $ | 31 | $ | 20 | 64.5 | % | ||||||||||||||||||||
| Retailer share arrangements | $ | (1 | ) | $ | (3 | ) | $ | (2 | ) | $ | (1 | ) | $ | (2 | ) | $ | 1 | (50.0 | )% | $ | (6 | ) | $ | (5 | ) | $ | (1 | ) | 20.0 | % | ||||||||||||
|
TOTAL SYF |
||||||||||||||||||||||||||||||||||||||||||
| Purchase volume(1)(2) | $ | 32,893 | $ | 33,476 | $ | 28,880 | $ | 35,369 | $ | 31,615 | $ | 1,278 | 4.0 | % | $ | 95,249 | $ | 90,099 | $ | 5,150 | 5.7 | % | ||||||||||||||||||||
| Period-end loan receivables | $ | 76,928 | $ | 75,458 | $ | 73,350 | $ | 76,337 | $ | 70,644 | $ | 6,284 | 8.9 | % | $ | 76,928 | $ | 70,644 | $ | 6,284 | 8.9 | % | ||||||||||||||||||||
| Average loan receivables, including held for sale | $ | 76,165 | $ | 74,090 | $ | 74,132 | $ | 72,476 | $ | 69,316 | $ | 6,849 | 9.9 | % | $ | 74,803 | $ | 67,364 | $ | 7,439 | 11.0 | % | ||||||||||||||||||||
| Average active accounts (in thousands)(2)(3) | 69,331 | 68,635 | 69,629 | 68,701 | 66,639 | 2,692 | 4.0 | % | 69,319 | 66,204 | 3,115 | 4.7 | % | |||||||||||||||||||||||||||||
| Interest and fees on loans(2) | $ | 4,182 | $ | 3,927 | $ | 3,877 | $ | 3,919 | $ | 3,771 | $ | 411 | 10.9 | % | $ | 11,986 | $ | 10,763 | $ | 1,223 | 11.4 | % | ||||||||||||||||||||
| Other income(2) | $ | 76 | $ | 57 | $ | 93 | $ | 85 | $ | 84 | $ | (8 | ) | (9.5 | )% | $ | 226 | $ | 259 | $ | (33 | ) | (12.7 | )% | ||||||||||||||||||
| Retailer share arrangements(2) | $ | (805 | ) | $ | (669 | ) | $ | (684 | ) | $ | (811 | ) | $ | (757 | ) | $ | (48 | ) | 6.3 | % | $ | (2,158 | ) | $ | (2,091 | ) | $ | (67 | ) | 3.2 | % | |||||||||||
| (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 | ||||||||||||||||||||
|
Sep 30,
2017 |
Jun 30,
2017 |
Mar 31,
2017 |
Dec 31,
2016 |
Sep 30,
2016 |
||||||||||||||||
|
COMMON EQUITY MEASURES |
||||||||||||||||||||
| GAAP Total common equity | $ | 14,402 | $ | 14,332 | $ | 14,363 | $ | 14,196 | $ | 13,981 | ||||||||||
| Less: Goodwill | (991 | ) | (991 | ) | (992 | ) | (949 | ) | (949 | ) | ||||||||||
| Less: Intangible assets, net | (772 | ) | (787 | ) | (826 | ) | (712 | ) | (733 | ) | ||||||||||
| Tangible common equity | $ | 12,639 | $ | 12,554 | $ | 12,545 | $ | 12,535 | $ | 12,299 | ||||||||||
| Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss) | 344 | 337 | 340 | 337 | 299 | |||||||||||||||
| Basel III - Common equity Tier 1 (fully phased-in) | $ | 12,983 | $ | 12,891 | $ | 12,885 | $ | 12,872 | $ | 12,598 | ||||||||||
| Adjustment related to capital components during transition | 142 | 146 | 154 | 263 | 273 | |||||||||||||||
| Basel III - Common equity Tier 1 (transition) | $ | 13,125 | $ | 13,037 | $ | 13,039 | $ | 13,135 | $ | 12,871 | ||||||||||
|
RISK-BASED CAPITAL |
||||||||||||||||||||
| Common equity Tier 1 | $ | 13,125 | $ | 13,037 | $ | 13,039 | $ | 13,135 | $ | 12,871 | ||||||||||
| Add: Allowance for loan losses includible in risk-based capital | 1,001 | 985 | 954 | 994 | 923 | |||||||||||||||
| Risk-based capital | $ | 14,126 | $ | 14,022 | $ | 13,993 | $ | 14,129 | $ | 13,794 | ||||||||||
|
ASSET MEASURES |
||||||||||||||||||||
| Total average assets(2) | $ | 91,121 | $ | 89,394 | $ | 89,468 | $ | 88,752 | $ | 84,874 | ||||||||||
| Adjustments for: | ||||||||||||||||||||
|
Disallowed goodwill and other disallowed intangible assets (net of related deferred tax liabilities) and other |
(1,304 | ) | (1,325 | ) | (1,358 | ) | (1,059 | ) | (1,117 | ) | ||||||||||
| Total assets for leverage purposes | $ | 89,817 | $ | 88,069 | $ | 88,110 | $ | 87,693 | $ | 83,757 | ||||||||||
| Risk-weighted assets - Basel III (fully phased-in)(3) | $ | 75,614 | $ | 74,748 | $ | 72,596 | $ | 75,941 | $ | 70,448 | ||||||||||
| Risk-weighted assets - Basel III (transition)(3) | $ | 75,729 | $ | 74,792 | $ | 72,627 | $ | 76,179 | $ | 70,660 | ||||||||||
|
TANGIBLE COMMON EQUITY PER SHARE |
||||||||||||||||||||
| GAAP book value per share | $ | 18.40 | $ | 18.02 | $ | 17.71 | $ | 17.37 | $ | 16.94 | ||||||||||
| Less: Goodwill | (1.27 | ) | (1.25 | ) | (1.22 | ) | (1.16 | ) | (1.14 | ) | ||||||||||
| Less: Intangible assets, net | (0.98 | ) | (0.98 | ) | (1.02 | ) | (0.87 | ) | (0.90 | ) | ||||||||||
| Tangible common equity per share | $ | 16.15 | $ | 15.79 | $ | 15.47 | $ | 15.34 | $ | 14.90 | ||||||||||
| (1) Regulatory measures at September 30, 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. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20171020005107/en/
Synchrony Financial
Investor Relations:
Greg Ketron,
203-585-6291
or
Media Relations
Lisa Lanspery,
203-585-6143
Source: Synchrony Financial
Released October 20, 2017