Synchrony Reports First Quarter Net Earnings of $1.0 Billion or $1.73 Per Diluted Share

STAMFORD, Conn., April 27, 2021 /PRNewswire/ -- Synchrony Financial SYF today announced first quarter 2021 earnings results amid the continuing Coronavirus (COVID-19) pandemic. Synchrony reported first quarter 2021 net earnings of $1.0 billion, or $1.73 per diluted share.

Key Highlights*:

  • Loan receivables decreased 7% to $76.9 billion
  • Interest and fees on loans decreased 14% to $3.7 billion
  • Purchase volume increased 8% to $34.7 billion
  • Average active accounts decreased 8% to 66.3 million
  • Deposits decreased $1.9 billion, or 3%, to $62.7 billion
  • Renewed 10 programs including American Eagle, Ashley HomeStores LTD, CITGO, and Phillips 66
  • Added 10 new programs including Prime Healthcare, Mercyhealth, Emory Healthcare, and Southern Veterinary Partners in the CareCredit network
  • Gap Inc. program agreement will not be renewed and will expire in April 2022; expect strategic options will be accretive to diluted earnings per share relative to renewal terms and if the portfolio is sold we expect to redeploy approximately $1 billion of capital
  • Returned $328 million in capital through share repurchases of $200 million and common stock dividends

"As we begin to emerge from the pandemic, Synchrony is well positioned for a strong recovery and bright future. We're driving growth for Synchrony and our partners by investing in enhanced digital and data capabilities, seamless customer experiences, new products and capabilities, and expanding our networks.  As we navigated the challenges of the past year, we further strengthened our competitive position and accelerated initiatives to help our partners compete and win in this dynamic environment," said Brian Doubles, President and Chief Executive Officer, Synchrony. "Though first quarter results continued to be impacted by the pandemic with slower loan growth, lower net interest income and resultant lower margins, credit continues to perform exceedingly well and we are driving operational efficiency.  I am confident in our success as we accelerate our strategy and position the company for long-term growth."

Business and Financial Results for the First Quarter of 2021*

Earnings

  • Net interest income decreased $451 million, or 12%, to $3.4 billion, mainly due to lower finance charges and late fees.
  • Retailer share arrangements increased $63 million, or 7%, to $1.0 billion, reflecting the improvement in net charge-offs.
  • Provision for credit losses decreased $1.3 billion, or 80%, to $334 million, driven by lower reserves and net charge-offs.
  • Other income increased $34 million, or 35%, to $131 million, largely driven by investment income.
  • Other expense decreased $70 million, or 7%, to $932 million, mainly driven by lower operational losses and lower marketing and business development costs, partially offset by an increase in employee costs.
  • Net earnings increased $739 million to $1.0 billion.

Balance Sheet

  • Period-end loan receivables decreased 7%; purchase volume increased 8%; and average active accounts decreased 8%.
  • Deposits decreased $1.9 billion, or 3%, to $62.7 billion and comprised 81% of funding.
  • The Company's balance sheet remained strong with total liquidity (liquid assets and undrawn credit facilities) of $28.0 billion, or 29.2% of total assets.
  • The Company has elected to defer the regulatory capital effects of CECL for two years; the estimated Common Equity Tier 1 ratio was 17.4% compared to 14.3%, and the estimated Tier 1 Capital ratio was 18.3% compared to 15.2%, reflecting the Company's strong capital generation capabilities.

Key Financial Metrics

  • Return on assets was 4.3% and return on equity was 31.8%.
  • Net interest margin was 13.98%.
  • Efficiency ratio was 36.1%.

Credit Quality

  • Loans 30+ days past due as a percentage of total period-end loan receivables were 2.83% compared to 4.24% last year.
  • Net charge-offs as a percentage of total average loan receivables were 3.62% compared to 5.36% last year.
  • The allowance for credit losses as a percentage of total period-end loan receivables was 12.88%.

Sales Platforms

  • Impacts from 2020 shutdowns and higher payment rates affecting platforms' receivables growth to varying degrees in the first quarter.
  • Retail Card period-end loan receivables decreased 9%. Interest and fees on loans decreased 16%, driven primarily by the decline in loan receivables and lower yield. Purchase volume increased 11% and average active accounts decreased 7%.
  • Payment Solutions period-end loan receivables decreased 1%, with continued strength in Power Sports and Home Specialty. Interest and fees on loans decreased 11%, driven primarily by lower late fees, finance charges, and merchant discount. Purchase volume increased 3% and average active accounts decreased 9%.
  • CareCredit period-end loan receivables decreased 8%. Interest and fees on loans decreased 7%, driven primarily by lower late fees and merchant discount. Purchase volume was flat and average active accounts decreased 11%.

* All comparisons are for the first quarter of 2021 compared to the first quarter of 2020, unless otherwise noted.

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 the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed February 11, 2021, and the Company's forthcoming Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.  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 Tuesday, April 27, 2021, at 8:30 a.m. Eastern Time, Brian Doubles, President and Chief Executive Officer, and Brian Wenzel Sr., 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 also be available on the website.

About Synchrony Financial

Synchrony SYF is a premier consumer financial services company. We deliver a wide range of specialized financing programs, as well as innovative consumer banking products, across key industries including digital, retail, home, auto, travel, health and pet. Synchrony enables our partners to grow sales and loyalty with consumers. We are one of the largest issuers of private label credit cards in the United States; we also offer co-branded products, installment loans and consumer financing products for small- and medium-sized businesses, as well as healthcare providers.

Synchrony is changing what's possible through our digital capabilities, deep industry expertise, actionable data insights, frictionless customer experience and customized financing solutions.

For more information, visit www.synchrony.com and Twitter: @Synchrony.

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, including the future impacts of the novel coronavirus disease ("COVID-19") outbreak and measures taken in response thereto for which future developments are highly uncertain and difficult to predict; retaining existing partners and attracting new partners, concentration of our revenue in a small number of Retail Card partners, and promotion and support of our products by our partners; cyber-attacks or other security breaches; disruptions in the operations of our and our outsourced partners' computer systems and data centers; the financial performance of our partners; the sufficiency of our allowance for credit losses and the accuracy of the assumptions or estimates used in preparing our financial statements, including those related to the CECL accounting guidance; higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to grow our deposits in the future; damage to our reputation; our ability to securitize our loan receivables, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loan receivables, and lower payment rates on our securitized loan receivables; 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; 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 acquisitions and strategic investments; reductions in interchange fees; fraudulent activity; failure of third parties to provide various services that are important to our operations; 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; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions and/or interpretations, and state sales tax rules and regulations; 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 other legislative and regulatory developments 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 the 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, 2020, as filed on February 11, 2021. You should not consider any list of such factors to be an exhaustive statement of all 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 "CECL fully phased-in" capital measures, 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.

Investor Relations

Jennifer Church 

(203) 585-6508                       

Media Relations

Sue Bishop

(203) 585-2802

 

SYNCHRONY FINANCIAL

FINANCIAL SUMMARY

(unaudited, in millions, except per share statistics)



Quarter Ended







Mar 31,

2021



Dec 31,

2020



Sep 30,

2020



Jun 30,

2020



Mar 31,

2020



1Q'21 vs. 1Q'20

EARNINGS

























Net interest income

$3,439



$3,659



$3,457



$3,396



$3,890



$(451)

(11.6)%

Retailer share arrangements

(989)



(1,047)



(899)



(773)



(926)



(63)

6.8%



























Provision for credit losses

334



750



1,210



1,673



1,677



(1,343)

(80.1)%

Net interest income, after retailer share arrangements and provision for credit losses

2,116



1,862



1,348



950



1,287



829

64.4%

Other income

131



82



131



95



97



34

35.1%

Other expense

932



1,000



1,067



986



1,002



(70)

(7.0)%

Earnings before provision for income taxes

1,315



944



412



59



382



933

244.2%

Provision for income taxes

290



206



99



11



96



194

202.1%

Net earnings

$1,025



$738



$313



$48



$286



$739

258.4%

Net earnings available to common stockholders

$1,014



$728



$303



$37



$275



$739

268.7%















































































COMMON SHARE STATISTICS

























Basic EPS   

$1.74



$1.25



$0.52



$0.06



$0.45



$1.29

286.7%

Diluted EPS   

$1.73



$1.24



$0.52



$0.06



$0.45



$1.28

284.4%



























Dividend declared per share

$0.22



$0.22



$0.22



$0.22



$0.22



$-

- %

Common stock price

$40.66



$34.71



$26.17



$22.16



$16.09



$24.57

152.7%

Book value per share   

$21.86



$20.49



$19.47



$19.13



$19.27



$2.59

13.4%

Tangible common equity per share(1)

$17.95



$16.72



$15.75



$15.28



$15.35



$2.60

16.9%



























Beginning common shares outstanding

584.0



583.8



583.7



583.2



615.9



(31.9)

(5.2)%

Issuance of common shares

-



-



-



-



-



-

- %

Stock-based compensation

2.2



0.2



0.1



0.5



0.9



1.3

144.4%

Shares repurchased

(5.1)



-



-



-



(33.6)



28.5

(84.8)%

Ending common shares outstanding

581.1



584.0



583.8



583.7



583.2



(2.1)

(0.4)%



























Weighted average common shares outstanding 

583.3



583.9



583.8



583.7



604.9



(21.6)

(3.6)%

Weighted average common shares outstanding (fully diluted) 

587.5



586.6



584.8



584.4



607.4



(19.9)

(3.3)%





























(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)



Quarter Ended







Mar 31,

2021



Dec 31,

2020



Sep 30,

2020



Jun 30,

2020



Mar 31,

2020



1Q'21 vs. 1Q'20

PERFORMANCE METRICS

























Return on assets(1)

4.3%



3.1%



1.3%



0.2%



1.1%





3.2%

Return on equity(2)

31.8%



23.6%



10.3%



1.6%



9.1%





22.7%

Return on tangible common equity(3)

40.8%



30.4%



13.1%



1.6%



11.6%





29.2%



























Net interest margin(4)

13.98%



14.64%



13.80%



13.53%



15.15%





(1.17)%

Efficiency ratio(5)

36.1%



37.1%



39.7%



36.3%



32.7%





3.4%

Other expense as a % of average loan receivables, including held for sale

4.82%



5.01%



5.44%



5.04%



4.77%





0.05%

Effective income tax rate

22.1%



21.8%



24.0%



18.6%



25.1%





(3.0)%





















































CREDIT QUALITY METRICS

























Net charge-offs as a % of average loan receivables, including held for sale

3.62%



3.16%



4.42%



5.35%



5.36%





(1.74)%

30+ days past due as a % of period-end loan receivables(6)

2.83%



3.07%



2.67%



3.13%



4.24%





(1.41)%

90+ days past due as a % of period-end loan receivables(6)

1.52%



1.40%



1.24%



1.77%



2.10%





(0.58)%

Net charge-offs

$699



$631



$866



$1,046



$1,125



$(426)

(37.9)%

Loan receivables delinquent over 30 days(6)

$2,175



$2,514



$2,100



$2,453



$3,500



$(1,325)

(37.9)%

Loan receivables delinquent over 90 days(6)

$1,170



$1,143



$973



$1,384



$1,735



$(565)

(32.6)%



























Allowance for credit losses (period-end)

$9,901



$10,265



$10,146



$9,802



$9,175



$726

7.9%

Allowance coverage ratio(7)

12.88%



12.54%



12.92%



12.52%



11.13%





1.75%



























BUSINESS METRICS

























Purchase volume(8)(9)

$34,749



$39,874



$36,013



$31,155



$32,042



$2,707

8.4%

Period-end loan receivables

$76,858



$81,867



$78,521



$78,313



$82,469



$(5,611)

(6.8)%

Credit cards

$73,244



$78,455



$75,204



$75,353



$79,832



$(6,588)

(8.3)%

Consumer installment loans

$2,319



$2,125



$1,987



$1,779



$1,390



$929

66.8%

Commercial credit products

$1,248



$1,250



$1,270



$1,140



$1,203



$45

3.7%

Other

$47



$37



$60



$41



$44



$3

6.8%

Average loan receivables, including held for sale

$78,358



$79,452



$78,005



$78,697



$84,428



$(6,070)

(7.2)%

Period-end active accounts (in thousands)(9)(10)

65,219



68,540



64,800



63,430



68,849



(3,630)

(5.3)%

Average active accounts (in thousands)(9)(10)

66,280



66,261



64,270



64,836



72,078



(5,798)

(8.0)%



























LIQUIDITY

























Liquid assets

























Cash and equivalents

$16,620



$11,524



$13,552



$16,344



$13,704



$2,916

21.3%

Total liquid assets

$22,636



$18,321



$21,402



$22,352



$19,225



$3,411

17.7%

Undrawn credit facilities

























Undrawn credit facilities

$5,400



$5,400



$5,400



$5,650



$5,600



$(200)

(3.6)%

Total liquid assets and undrawn credit facilities

$28,036



$23,721



$26,802



$28,002



$24,825



$3,211

12.9%

Liquid assets % of total assets

23.62%



19.09%



22.37%



23.15%



19.61%





4.01%

Liquid assets including undrawn credit facilities % of total assets

29.25%



24.72%



28.02%



29.00%



25.32%





3.93%





























(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 available to common stockholders 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, plus other income, less retailer share arrangements.

(6) Based on customer statement-end balances extrapolated to the respective period-end date.

(7) Allowance coverage ratio represents allowance for credit 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) Includes activity and accounts associated with loan receivables held for sale.

(10) 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







Mar 31,

2021



Dec 31,

2020



Sep 30,

2020



Jun 30,

2020



Mar 31,

2020



1Q'21 vs. 1Q'20

Interest income:

























Interest and fees on loans

$3,732



$3,981



$3,821



$3,808



$4,340



$(608)

(14.0)%

Interest on cash and debt securities

10



12



16



22



67



(57)

(85.1)%

Total interest income

3,742



3,993



3,837



3,830



4,407



(665)

(15.1)%



























Interest expense:

























Interest on deposits

170



200



245



293



356



(186)

(52.2)%

Interest on borrowings of consolidated securitization entities

51



52



53



59



73



(22)

(30.1)%

Interest on senior unsecured notes

82



82



82



82



88



(6)

(6.8)%



























Total interest expense

303



334



380



434



517



(214)

(41.4)%



























Net interest income

3,439



3,659



3,457



3,396



3,890



(451)

(11.6)%



























Retailer share arrangements

(989)



(1,047)



(899)



(773)



(926)



(63)

6.8%





















































Provision for credit losses

334



750



1,210



1,673



1,677



(1,343)

(80.1)%

Net interest income, after retailer share arrangements and provision for credit losses

2,116



1,862



1,348



950



1,287



829

64.4%



























Other income:

























Interchange revenue

171



185



172



134



161



10

6.2%

Debt cancellation fees

69



72



68



69



69



-

- %

Loyalty programs

(179)



(202)



(155)



(134)



(158)



(21)

13.3%

Other

70



27



46



26



25



45

180.0%

Total other income

131



82



131



95



97



34

35.1%



























Other expense:

























Employee costs

364



347



382



327



324



40

12.3%

Professional fees

190



186



187



189



197



(7)

(3.6)%

Marketing and business development

95



139



107



91



111



(16)

(14.4)%

Information processing

131



128



125



116



123



8

6.5%

Other

152



200



266



263



247



(95)

(38.5)%

Total other expense

932



1,000



1,067



986



1,002



(70)

(7.0)%



























Earnings before provision for income taxes

1,315



944



412



59



382



933

244.2%

Provision for income taxes

290



206



99



11



96



194

202.1%

Net earnings

$1,025



$738



$313



$48



$286



$739

258.4%



























Net earnings available to common stockholders

$1,014



$728



$303



$37



$275



$739

268.7%

 

SYNCHRONY FINANCIAL

STATEMENTS OF FINANCIAL POSITION

(unaudited, $ in millions)



Quarter Ended







Mar 31,

2021



Dec 31,

2020



Sep 30,

2020



Jun 30,

2020



Mar 31,

2020



Mar 31, 2021 vs. Mar 31, 2020

Assets

























Cash and equivalents

$16,620



$11,524



$13,552



$16,344



$13,704



$2,916

21.3%

Debt securities

6,550



7,469



8,432



6,623



6,146



404

6.6%

Loan receivables:

























Unsecuritized loans held for investment

53,823



56,472



52,613



52,629



54,765



(942)

(1.7)%

Restricted loans of consolidated securitization entities

23,035



25,395



25,908



25,684



27,704



(4,669)

(16.9)%

Total loan receivables

76,858



81,867



78,521



78,313



82,469



(5,611)

(6.8)%

Less: Allowance for credit losses

(9,901)



(10,265)



(10,146)



(9,802)



(9,175)



(726)

7.9%

Loan receivables, net

66,957



71,602



68,375



68,511



73,294



(6,337)

(8.6)%

Loan receivables held for sale

23



5



4



4



5



18

NM

Goodwill

1,104



1,078



1,078



1,078



1,078



26

2.4%

Intangible assets, net

1,169



1,125



1,091



1,166



1,208



(39)

(3.2)%

Other assets

3,431



3,145



3,126



2,818



2,603



828

31.8%

Total assets

$95,854



$95,948



$95,658



$96,544



$98,038



$(2,184)

(2.2)%



























Liabilities and Equity

























Deposits:

























Interest-bearing deposit accounts

$62,419



$62,469



$63,195



$63,857



$64,302



$(1,883)

(2.9)%

Non-interest-bearing deposit accounts

342



313



298



291



313



29

9.3%

Total deposits

62,761



62,782



63,493



64,148



64,615



(1,854)

(2.9)%

Borrowings:

























Borrowings of consolidated securitization entities

7,193



7,810



7,809



8,109



9,291



(2,098)

(22.6)%



























Senior unsecured notes

7,967



7,965



7,962



7,960



7,957



10

0.1%



























Total borrowings

15,160



15,775



15,771



16,069



17,248



(2,088)

(12.1)%

Accrued expenses and other liabilities

4,494



4,690



4,295



4,428



4,205



289

6.9%

Total liabilities

82,415



83,247



83,559



84,645



86,068



(3,653)

(4.2)%

Equity:

























Preferred stock

734



734



734



734



734



-

- %

Common stock

1



1



1



1



1



-

- %

Additional paid-in capital

9,592



9,570



9,552



9,532



9,523



69

0.7%

Retained earnings

11,470



10,621



10,024



9,852



9,960



1,510

15.2%

Accumulated other comprehensive income (loss)

(56)



(51)



(31)



(37)



(49)



(7)

14.3%

Treasury stock

(8,302)



(8,174)



(8,181)



(8,183)



(8,199)



(103)

1.3%

Total equity

13,439



12,701



12,099



11,899



11,970



1,469

12.3%

Total liabilities and equity

$95,854



$95,948



$95,658



$96,544



$98,038



$(2,184)

(2.2)%

 

SYNCHRONY FINANCIAL

AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN

(unaudited, $ in millions)































































Quarter Ended



Mar 31, 2021



Dec 31, 2020



Sep 30, 2020



Jun 30, 2020



Mar 31, 2020







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

$14,610



$4



0.11%



$11,244



$4



0.14%



$13,664



$4



0.12%



$15,413



$3



0.08%



$12,902



$42



1.31%

Securities available for sale

6,772



6



0.36%



8,706



8



0.37%



7,984



12



0.60%



6,804



19



1.12%



5,954



25



1.69%





























































Loan receivables, including held for sale:



























































Credit cards

74,865



3,657



19.81%



76,039



3,908



20.45%



74,798



3,752



19.96%



75,942



3,740



19.81%



81,716



4,272



21.03%

Consumer installment loans

2,219



53



9.69%



2,057



50



9.67%



1,892



46



9.67%



1,546



37



9.63%



1,432



35



9.83%

Commercial credit products

1,231



21



6.92%



1,293



23



7.08%



1,238



22



7.07%



1,150



30



10.49%



1,243



33



10.68%

Other

43



1



NM



63



-



- %



77



1



NM



59



1



NM



37



-



- %

Total loan receivables, including held for sale

78,358



3,732



19.32%



79,452



3,981



19.93%



78,005



3,821



19.49%



78,697



3,808



19.46%



84,428



4,340



20.67%

Total interest-earning assets

99,740



3,742



15.22%



99,402



3,993



15.98%



99,653



3,837



15.32%



100,914



3,830



15.26%



103,284



4,407



17.16%





























































Non-interest-earning assets:



























































Cash and due from banks

1,635











1,525











1,489











1,486











1,450









Allowance for credit losses

(10,225)











(10,190)











(9,823)











(9,221)











(8,708)









Other assets

5,305











5,228











5,021











4,779











4,696









Total non-interest-earning assets

(3,285)











(3,437)











(3,313)











(2,956)











(2,562)





































































Total assets

$96,455











$95,965











$96,340











$97,958











$100,722





































































Liabilities



























































Interest-bearing liabilities:



























































Interest-bearing deposit accounts

$62,724



$170



1.10%



$62,800



$200



1.27%



$63,569



$245



1.53%



$64,298



$293



1.83%



$64,366



$356



2.22%

Borrowings of consolidated securitization entities

7,694



51



2.69%



7,809



52



2.65%



8,057



53



2.62%



8,863



59



2.68%



9,986



73



2.94%





























































Senior unsecured notes

7,965



82



4.18%



7,963



82



4.10%



7,960



82



4.10%



7,958



82



4.14%



8,807



88



4.02%





























































Total interest-bearing liabilities

78,383



303



1.57%



78,572



334



1.69%



79,586



380



1.90%



81,119



434



2.15%



83,159



517



2.50%





























































Non-interest-bearing liabilities



























































Non-interest-bearing deposit accounts

346











308











307











309











299









Other liabilities

4,655











4,663











4,308











4,349











4,672









Total non-interest-bearing liabilities

5,001











4,971











4,615











4,658











4,971





































































Total liabilities

83,384











83,543











84,201











85,777











88,130





































































Equity



























































Total equity

13,071











12,422











12,139











12,181











12,592





































































Total liabilities and equity

$96,455











$95,965











$96,340











$97,958











$100,722









Net interest income





$3,439











$3,659











$3,457











$3,396











$3,890

































































Interest rate spread(1)









13.65%











14.29%











13.42%











13.11%











14.66%

Net interest margin(2)









13.98%











14.64%











13.80%











13.53%











15.15%































































(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

BALANCE SHEET STATISTICS

(unaudited, $ in millions, except per share statistics)





























Quarter Ended







Mar 31,

2021



Dec 31,

2020



Sep 30,

2020



Jun 30,

2020



Mar 31,

2020



Mar 31, 2021 vs.

Mar 31, 2020

BALANCE SHEET STATISTICS

























Total common equity

$12,705



$11,967



$11,365



$11,165



$11,236



$1,469

13.1%

Total common equity as a % of total assets

13.25%



12.47%



11.88%



11.56%



11.46%





1.79%



























Tangible assets

$93,581



$93,745



$93,489



$94,300



$95,752



$(2,171)

(2.3)%

Tangible common equity(1)

$10,432



$9,764



$9,196



$8,921



$8,950



$1,482

16.6%

Tangible common equity as a % of tangible assets(1)

11.15%



10.42%



9.84%



9.46%



9.35%





1.80%

Tangible common equity per share(1)

$17.95



$16.72



$15.75



$15.28



$15.35



$2.60

16.9%



























REGULATORY CAPITAL RATIOS(2)(3)



























Basel III - CECL Transition







Total risk-based capital ratio(4)

19.7%



18.1%



18.1%



17.6%



16.5%







Tier 1 risk-based capital ratio(5)

18.3%



16.8%



16.7%



16.3%



15.2%

































Tier 1 leverage ratio(6)

14.5%



14.0%



13.3%



12.7%



12.3%







Common equity Tier 1 capital ratio

17.4%



15.9%



15.8%



15.3%



14.3%































































(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 ratios at March 31, 2021 are preliminary and therefore subject to change.

(3) Capital ratios starting March 31, 2020 reflect election to delay for two years an estimate of CECL's effect on regulatory capital in accordance with the interim final rule issued by U.S. banking agencies in March 2020.

(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.

 

SYNCHRONY FINANCIAL

PLATFORM RESULTS

(unaudited, $ in millions)



Quarter Ended







Mar 31,

2021



Dec 31,

2020



Sep 30,

2020



Jun 30,

2020



Mar 31,

2020



1Q'21 vs. 1Q'20

RETAIL CARD

























Purchase volume(1)(2)

$26,540



$31,256



$27,374



$24,380



$24,008



$2,532

10.5%

Period-end loan receivables

$47,855



$52,130



$49,595



$49,967



$52,390



$(4,535)

(8.7)%

Average loan receivables, including held for sale

$49,044



$50,235



$49,503



$50,238



$53,820



$(4,776)

(8.9)%

Average active accounts (in thousands)(2)(3)

49,078



49,001



47,065



46,970



53,018



(3,940)

(7.4)%



























Interest and fees on loans

$2,547



$2,719



$2,619



$2,640



$3,037



$(490)

(16.1)%

Other income

$66



$50



$84



$56



$59



$7

11.9%



























Retailer share arrangements

$(970)



$(1,026)



$(877)



$(752)



$(904)



$(66)

7.3%





















































PAYMENT SOLUTIONS

























Purchase volume(1)(2)

$5,561



$5,942



$5,901



$4,823



$5,375



$186

3.5%

Period-end loan receivables

$19,682



$20,153



$19,550



$19,119



$19,973



$(291)

(1.5)%

Average loan receivables, including held for sale

$19,867



$19,734



$19,247



$19,065



$20,344



$(477)

(2.3)%

Average active accounts (in thousands)(2)(3)

11,496



11,536



11,497



11,900



12,681



(1,185)

(9.3)%



























Interest and fees on loans

$627



$673



$650



$632



$706



$(79)

(11.2)%

Other income

$19



$4



$13



$14



$13



$6

46.2%



























Retailer share arrangements

$(15)



$(17)



$(20)



$(18)



$(18)



$3

(16.7)%





















































CARECREDIT

























Purchase volume(1)

$2,648



$2,676



$2,738



$1,952



$2,659



$(11)

(0.4)%

Period-end loan receivables

$9,321



$9,584



$9,376



$9,227



$10,106



$(785)

(7.8)%

Average loan receivables, including held for sale

$9,447



$9,483



$9,255



$9,394



$10,264



$(817)

(8.0)%

Average active accounts (in thousands)(3)

5,706



5,724



5,708



5,966



6,379



(673)

(10.6)%



























Interest and fees on loans

$558



$589



$552



$536



$597



$(39)

(6.5)%

Other income

$46



$28



$34



$25



$25



$21

84.0%



























Retailer share arrangements

$(4)



$(4)



$(2)



$(3)



$(4)



$-

- %



























TOTAL SYF

























Purchase volume(1)(2)

$34,749



$39,874



$36,013



$31,155



$32,042



$2,707

8.4%

Period-end loan receivables

$76,858



$81,867



$78,521



$78,313



$82,469



$(5,611)

(6.8)%

Average loan receivables, including held for sale

$78,358



$79,452



$78,005



$78,697



$84,428



$(6,070)

(7.2)%

Average active accounts (in thousands)(2)(3)

66,280



66,261



64,270



64,836



72,078



(5,798)

(8.0)%



























Interest and fees on loans

$3,732



$3,981



$3,821



$3,808



$4,340



$(608)

(14.0)%

Other income

$131



$82



$131



$95



$97



$34

35.1%



























Retailer share arrangements

$(989)



$(1,047)



$(899)



$(773)



$(926)



$(63)

6.8%



























(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



Mar 31,

2021



Dec 31,

2020



Sep 30,

2020



Jun 30,

2020



Mar 31,

2020

COMMON EQUITY AND REGULATORY CAPITAL MEASURES(2)



















GAAP Total equity

$13,439



$12,701



$12,099



$11,899



$11,970

Less: Preferred stock

(734)



(734)



(734)



(734)



(734)

Less: Goodwill

(1,104)



(1,078)



(1,078)



(1,078)



(1,078)

Less: Intangible assets, net

(1,169)



(1,125)



(1,091)



(1,166)



(1,208)

Tangible common equity

$10,432



$9,764



$9,196



$8,921



$8,950

Add: CECL transition amount

2,595



2,686



2,656



2,570



2,417





















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

354



341



305



302



304

Common equity Tier 1 

$13,381



$12,791



$12,157



$11,793



$11,671

Preferred  stock

734



734



734



734



734

Tier 1 capital

$14,115



$13,525



$12,891



$12,527



$12,405





















Add: Allowance for credit losses includible in risk-based capital

1,031



1,079



1,034



1,031



1,082

Total Risk-based capital

$15,146



$14,604



$13,925



$13,558



$13,487





















ASSET MEASURES(2)



















Total average assets

$96,455



$95,965



$96,340



$97,958



$100,722

Adjustments for:



















Add: CECL transition amount

2,595



2,686



2,656



2,570



2,417

Disallowed goodwill and other disallowed intangible assets

(net of related deferred tax liabilities) and other

(1,987)



(1,924)



(1,906)



(1,980)



(2,010)





















Total assets for leverage purposes

$97,063



$96,727



$97,090



$98,548



$101,129





















Risk-weighted assets

$76,965



$80,561



$76,990



$77,048



$81,639





















CECL FULLY PHASED-IN CAPITAL MEASURES



















Tier 1 capital

$14,115



$13,525



$12,891



$12,527



$12,405

Less: CECL transition adjustment

(2,595)



(2,686)



(2,656)



(2,570)



(2,417)

Tier 1 capital (CECL fully phased-in)

$11,520



$10,839



$10,235



$9,957



$9,988

Add: Allowance for credit losses

9,901



10,265



10,146



9,802



9,175

Tier 1 capital (CECL fully phased-in) + Reserves for credit losses

$21,421



$21,104



$20,381



$19,759



$19,163





















Risk-weighted assets

$76,965



$80,561



$76,990



$77,048



$81,639

Less: CECL transition adjustment

(2,386)



(2,477)



(2,447)



(2,361)



(2,204)

Risk-weighted assets (CECL fully phased-in)

$74,579



$78,084



$74,543



$74,687



$79,435





















TANGIBLE COMMON EQUITY PER SHARE



















GAAP book value per share

$21.86



$20.49



$19.47



$19.13



$19.27

Less: Goodwill

(1.90)



(1.85)



(1.85)



(1.85)



(1.85)

Less: Intangible assets, net

(2.01)



(1.92)



(1.87)



(2.00)



(2.07)

Tangible common equity per share

$17.95



$16.72



$15.75



$15.28



$15.35





(1) Regulatory measures at March 31, 2021 are presented on an estimated basis.

(2) Capital ratios starting March 31, 2020 reflect election to delay for two years an estimate of CECL's effect on regulatory capital in accordance with the interim final rule issued by U.S. banking agencies in March 2020.

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/synchrony-reports-first-quarter-net-earnings-of-1-0-billion-or-1-73-per-diluted-share-301277127.html

SOURCE Synchrony Financial

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