Press Release

January 19, 2018, 10:37 AM EST

Synchrony Financial Reports Fourth Quarter Net Earnings of $385 Million or $0.49 Per Diluted Share Including Impact from Tax Cuts and Jobs Act; $545 Million or $0.70 Excluding Impact

Dateline:
STAMFORD, Conn.
 
Public Company Information:
NYSE: SYF
 
STAMFORD, Conn.--(BUSINESS WIRE)--Synchrony Financial (NYSE: SYF) today announced fourth quarter 2017 net earnings of $385 million, or $0.49 per diluted share including the impact from the Tax Cuts and Jobs Act (“Tax Act”) of 2017, and $545 million, or $0.70 per diluted share excluding $160 million of additional tax expense related to the impact from the Tax Act. Highlights for the quarter included:
  • Net interest income increased 8% from the fourth quarter of 2016 to $3.9 billion
  • Loan receivables grew $6 billion, or 7%, from the fourth quarter of 2016 to $82 billion
  • Purchase volume increased 3% from the fourth quarter of 2016 to $37 billion
  • Deposits grew over $4 billion, or 9%, from the fourth quarter of 2016 to $56 billion
  • Announced agreement to significantly expand strategic consumer credit relationship with PayPal, acquiring PayPal’s U.S. consumer credit receivables portfolio and becoming the exclusive issuer of the PayPal Credit online consumer financing program; expected to close in the third quarter of 2018
  • Renewed relationships: Men’s Wearhouse, Home Furnishings Association, Husqvarna Viking, Sweetwater, Bosley, and Sono Bello
  • Quarterly common stock dividend payment of $0.15 per share and repurchased $430 million of Synchrony Financial common stock
  • The Tax Act resulted in $160 million of additional tax expense primarily due to the Tax Act’s reduction in the corporate tax rate that resulted in a remeasurement of our net deferred tax asset

“Substantial progress was made on our strategic priorities not only in the fourth quarter, but throughout 2017. Our business continues to deliver organic growth, leveraging innovative marketing, promotions, and value propositions. We are making investments in our robust data, analytics and digital capabilities, further enhancing the experience of our partners and cardholders. And we are supporting our business with continued growth in our direct deposit platform. We accomplished all of this while maintaining a strong balance sheet and returning capital to shareholders through growth and the execution of our capital plan,” said Margaret Keane, President and Chief Executive Officer of Synchrony Financial. “Synchrony Financial continues to be well positioned for long-term growth and we look forward to driving further value for our partners, cardholders, and shareholders in 2018.”

Business and Financial Highlights for the Fourth Quarter of 2017

All comparisons below are for the fourth quarter of 2017 compared to the fourth quarter of 2016, unless otherwise noted.

Earnings

  • Net interest income increased $288 million, or 8%, to $3.9 billion, primarily driven by strong loan receivables growth. Net interest income after retailer share arrangements increased 11%.
  • Provision for loan losses increased $278 million to $1.4 billion primarily driven by credit normalization.
  • Other income was down $23 million to $62 million, primarily due to higher loyalty program expense, partially offset by higher interchange revenue.
  • Other expense increased $52 million, or 6%, to $970 million, primarily driven by growth and marketing.
  • Net earnings totaled $385 million including the impact from the Tax Act that resulted in $160 million of additional tax expense primarily due to the Tax Act’s reduction in the corporate tax rate that resulted in a remeasurement of our net deferred tax asset; excluding this impact of the Tax Act, net earnings totaled $545 million compared to $576 million in the fourth quarter of 2016.

Balance Sheet

  • Period-end loan receivables growth remained strong at 7%, primarily driven by purchase volume growth of 3% and average active account growth of 4%.
  • Deposits grew to $56 billion, up $4 billion, or 9%, and comprised 73% of funding compared to 72% last year.
  • The Company’s balance sheet remained strong with total liquidity (liquid assets and undrawn credit facilities) of $21 billion, or 22% of total assets.
  • The estimated Common Equity Tier 1 ratio under Basel III subject to transition provisions was 16.0% and the estimated fully phased-in Common Equity Tier 1 ratio under Basel III was 15.8%.

Key Financial Metrics

  • Return on assets was 1.6% and return on equity was 10.5%, including the impact from the Tax Act; excluding the impact of the Tax Act, return on assets was 2.3% and return on equity was 14.9%.
  • Net interest margin was 16.24% compared to 16.26% in the fourth quarter of 2016.
  • Efficiency ratio was 30.3%, compared to 31.6% in the fourth quarter of 2016. The efficiency ratio for 2017 was 30.3%, compared to 31.1% in 2016. The improvement in both the fourth quarter and full-year efficiency ratio reflected the strong operating leverage generated by the business.

Credit Quality

  • Loans 30+ days past due as a percentage of total period-end loan receivables were 4.67% compared to 4.32% last year.
  • Net charge-offs as a percentage of total average loan receivables were 5.78% compared to 4.65% last year.
  • The allowance for loan losses as a percentage of total period-end loan receivables was 6.80% compared to 5.69% last year.

Sales Platforms

  • Retail Card interest and fees on loans increased 8%, driven primarily by period-end loan receivables growth of 7%. Purchase volume and average active account growth was 3%. Loan receivables growth was broad-based across partner programs.
  • Payment Solutions interest and fees on loans increased 10%, driven primarily by period-end loan receivables growth of 8%. Purchase volume growth was 9%, adjusted to exclude the impact from the hhgregg bankruptcy, and average active account growth was 7%. Loan receivables growth was led by home furnishing and automotive.
  • CareCredit interest and fees on loans increased 8%, driven primarily by period-end loan receivables growth of 10%. Purchase volume and average active account growth was 8%. 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 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 Annual Report on Form 10-K for the year ended December 31, 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, January 19, 2018, 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 42017#, and can be accessed beginning approximately two hours after the event through February 2, 2018.

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 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,” certain capital ratios, and certain financial measures that have been adjusted to exclude the effects from the Tax Act, 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

4Q'17 vs. 4Q'16

Twelve Months Ended

YTD'17 vs. YTD'16

 

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Dec 31,

Dec 31,

2017

2017

2017

2017

2016

2017

2016

EARNINGS

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$3,916

$3,876

$3,637

$3,587

$3,628

$288

7.90%

$15,016

$13,530

$1,486

11.00%

Retailer share arrangements

-779

-805

-669

-684

-811

32

-3.90%

-2,937

-2,902

-35

1.20%

Net interest income, after retailer share arrangements

3,137

3,071

2,968

2,903

2,817

320

11.40%

12,079

10,628

1,451

13.70%

Provision for loan losses

1,354

1,310

1,326

1,306

1,076

278

25.80%

5,296

3,986

1,310

32.90%

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

1,783

1,761

1,642

1,597

1,741

42

2.40%

6,783

6,642

141

2.10%

Other income

62

76

57

93

85

-23

-27.10%

288

344

-56

-16.30%

Other expense

970

958

911

908

918

52

5.70%

3,747

3,416

331

9.70%

Earnings before provision for income taxes

875

879

788

782

908

-33

-3.60%

3,324

3,570

-246

-6.90%

Provision for income taxes

490

324

292

283

332

158

47.60%

1,389

1,319

70

5.30%

Net earnings

$385

$555

$496

$499

$576

($191)

-33.20%

$1,935

$2,251

($316)

-14.00%

Net earnings attributable to common stockholders

$385

$555

$496

$499

$576

($191)

-33.20%

$1,935

$2,251

($316)

-14.00%

Adjusted net earnings (1)

$545

$555

$496

$499

$576

($31)

-5.40%

$2,095

$2,251

($156)

-6.90%

COMMON SHARE STATISTICS

 

 

 

 

 

 

 

 

 

 

 

Basic EPS

$0.49

$0.70

$0.62

$0.61

$0.70

($0.21)

-30.00%

$2.43

$2.71

($0.28)

-10.30%

Diluted EPS

$0.49

$0.70

$0.61

$0.61

$0.70

($0.21)

-30.00%

$2.42

$2.71

($0.29)

-10.70%

Adjusted diluted EPS(1)

$0.70

$0.70

$0.61

$0.61

$0.70

$-

- %

$2.62

$2.71

($0.09)

-3.30%

Dividend declared per share

$0.15

$0.15

$0.13

$0.13

$0.13

$0.02

15.40%

$0.56

$0.26

$0.30

115.40%

Common stock price

$38.61

$31.05

$29.82

$34.30

$36.27

$2.34

6.50%

$38.61

$36.27

$2.34

6.50%

Book value per share

$18.47

$18.40

$18.02

$17.71

$17.37

$1.10

6.30%

$18.47

$17.37

$1.10

6.30%

Tangible common equity per share(2)

$16.22

$16.15

$15.79

$15.47

$15.34

$0.88

5.70%

$16.22

$15.34

$0.88

5.70%

Beginning common shares outstanding

782.6

795.3

810.8

817.4

825.5

-42.9

-5.20%

817.4

833.8

-16.4

-2.00%

Issuance of common shares

-

-

-

-

-

-

- %

-

-

-

- %

Stock-based compensation

0.1

0.1

0.2

-

-

0.1

NM

0.4

0.2

0.2

100.00%

Shares repurchased

-12.2

-12.8

-15.7

-6.6

-8.1

-4.1

50.60%

-47.3

-16.6

-30.7

184.90%

Ending common shares outstanding

770.5

782.6

795.3

810.8

817.4

-46.9

-5.70%

770.5

817.4

-46.9

-5.70%

Weighted average common shares outstanding

778.7

787.3

804

813.1

820.5

-41.8

-5.10%

795.6

829.2

-33.6

-4.10%

Weighted average common shares outstanding (fully diluted)

784

790.9

807.4

817.1

823.8

-39.8

-4.80%

799.7

831.5

-31.8

-3.80%

(1) Adjusted net earnings and Adjusted diluted EPS are non-GAAP measures. These measures represent the corresponding GAAP measure, adjusted to exclude the effects to Provision for income taxes in the quarter ended December 31, 2017, resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The effects primarily relate to additional tax expense arising from the remeasurement of our net deferred tax asset to reflect the reduction in the U.S. corporate tax rate from 35% to 21%. For a corresponding reconciliation to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

(2) Tangible Common Equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

SYNCHRONY FINANCIAL

SELECTED METRICS

(unaudited, $ in millions, except account data)

 

Quarter Ended

4Q'17 vs. 4Q'16

Twelve Months Ended

YTD'17 vs. YTD'16

 

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Dec 31,

Dec 31,

2017

2017

2017

2017

2016

2017

2016

PERFORMANCE METRICS

 

 

 

 

 

 

 

 

 

 

 

Return on assets(1)

1.60%

2.40%

2.20%

2.30%

2.60%

 

-1.00%

2.10%

2.70%

 

-0.60%

Return on equity(2)

10.50%

15.30%

13.80%

14.10%

16.20%

 

-5.70%

13.40%

16.50%

 

-3.10%

Return on tangible common equity(3)

12.00%

17.40%

15.70%

16.10%

18.40%

 

-6.40%

15.30%

18.80%

 

-3.50%

Adjusted return on assets(4)

2.30%

2.40%

2.20%

2.30%

2.60%

 

-0.30%

2.30%

2.70%

 

-0.40%

Adjusted return on equity(4)

14.90%

15.30%

13.80%

14.10%

16.20%

 

-1.30%

14.50%

16.50%

 

-2.00%

Adjusted return on tangible common equity(5)

17.00%

17.40%

15.70%

16.10%

18.40%

 

-1.40%

16.60%

18.80%

 

-2.20%

Net interest margin(6)

16.24%

16.74%

16.20%

16.18%

16.26%

 

-0.02%

16.35%

16.10%

 

0.25%

Efficiency ratio(7)

30.30%

30.40%

30.10%

30.30%

31.60%

 

-1.30%

30.30%

31.10%

 

-0.80%

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

4.91%

4.99%

4.93%

4.97%

5.04%

 

-0.13%

4.95%

4.98%

 

-0.03%

Effective income tax rate

56.00%

36.90%

37.10%

36.20%

36.60%

 

19.40%

41.80%

36.90%

 

4.90%

CREDIT QUALITY METRICS

 

 

 

 

 

 

 

 

 

 

 

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

5.78%

4.95%

5.42%

5.33%

4.65%

 

1.13%

5.37%

4.57%

 

0.80%

30+ days past due as a % of period-end loan receivables(8)

4.67%

4.80%

4.25%

4.25%

4.32%

 

0.35%

4.67%

4.32%

 

0.35%

90+ days past due as a % of period-end loan receivables(8)

2.28%

2.22%

1.90%

2.06%

2.03%

 

0.25%

2.28%

2.03%

 

0.25%

Net charge-offs

$1,141

$950

$1,001

$974

$847

$294

34.70%

$4,066

$3,139

$927

29.50%

Loan receivables delinquent over 30 days(8)

$3,831

$3,694

$3,208

$3,120

$3,295

$536

16.30%

$3,831

$3,295

$536

16.30%

Loan receivables delinquent over 90 days(8)

$1,869

$1,707

$1,435

$1,508

$1,546

$323

20.90%

$1,869

$1,546

$323

20.90%

Allowance for loan losses (period-end)

$5,574

$5,361

$5,001

$4,676

$4,344

$1,230

28.30%

$5,574

$4,344

$1,230

28.30%

Allowance coverage ratio(9)

6.80%

6.97%

6.63%

6.37%

5.69%

 

1.11%

6.80%

5.69%

 

1.11%

BUSINESS METRICS

 

 

 

 

 

 

 

 

 

 

 

Purchase volume(10)

$36,565

$32,893

$33,476

$28,880

$35,369

$1,196

3.40%

$131,814

$125,468

$6,346

5.10%

Period-end loan receivables

$81,947

$76,928

$75,458

$73,350

$76,337

$5,610

7.30%

$81,947

$76,337

$5,610

7.30%

Credit cards

$79,026

$73,946

$72,492

$70,587

$73,580

$5,446

7.40%

$79,026

$73,580

$5,446

7.40%

Consumer installment loans

$1,578

$1,561

$1,514

$1,411

$1,384

$194

14.00%

$1,578

$1,384

$194

14.00%

Commercial credit products

$1,303

$1,384

$1,386

$1,311

$1,333

($30)

-2.30%

$1,303

$1,333

($30)

-2.30%

Other

$40

$37

$66

$41

$40

$-

- %

$40

$40

$-

- %

Average loan receivables, including held for sale

$78,369

$76,165

$74,090

$74,132

$72,476

$5,893

8.10%

$75,702

$68,649

$7,053

10.30%

Period-end active accounts (in thousands)(11)

74,541

69,008

69,277

67,905

71,890

2,651

3.70%

74,541

71,890

2,651

3.70%

Average active accounts (in thousands)(11)

71,348

69,331

68,635

69,629

68,701

2,647

3.90%

69,968

66,928

3,040

4.50%

LIQUIDITY

 

 

 

 

 

 

 

 

 

 

 

Liquid assets

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents

$11,602

$13,915

$12,020

$11,392

$9,321

$2,281

24.50%

$11,602

$9,321

$2,281

24.50%

Total liquid assets

$15,087

$16,391

$15,274

$16,158

$13,612

$1,475

10.80%

$15,087

$13,612

$1,475

10.80%

Undrawn credit facilities

 

 

 

 

 

 

 

 

 

 

 

Undrawn credit facilities

$6,000

$5,650

$6,650

$5,600

$6,700

($700)

-10.40%

$6,000

$6,700

($700)

-10.40%

Total liquid assets and undrawn credit facilities

$21,087

$22,041

$21,924

$21,758

$20,312

$775

3.80%

$21,087

$20,312

$775

3.80%

Liquid assets % of total assets

15.75%

17.71%

16.76%

18.14%

15.09%

 

0.66%

15.75%

15.09%

 

0.66%

Liquid assets including undrawn credit facilities % of total assets

22.01%

23.82%

24.06%

24.43%

22.52%

 

-0.51%

22.01%

22.52%

 

-0.51%

(1) Return on assets represents net earnings as a percentage of average total assets.

(2) Return on equity represents net earnings as a percentage of average total equity.

(3) Return on tangible common equity represents net earnings as a percentage of average tangible common equity. Tangible common equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

(4) Adjusted return on assets represents Adjusted net earnings as a percentage of average total assets. Adjusted return on equity represents Adjusted net earnings as a percentage of average total equity. Adjusted net earnings is a non-GAAP measure. For a corresponding reconciliation of Adjusted net earnings to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

(5) Adjusted return on tangible common equity represents Adjusted net earnings as a percentage of average tangible common equity. Both Adjusted net earnings and tangible common equity are non-GAAP measures. For corresponding reconciliations to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

(6) Net interest margin represents net interest income divided by average interest-earning assets.

(7) Efficiency ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income.

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

(9) Allowance coverage ratio represents allowance for loan losses divided by total period-end loan receivables.

(10) Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.

(11) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

SYNCHRONY FINANCIAL

STATEMENTS OF EARNINGS

(unaudited, $ in millions)

 

Quarter Ended

4Q'17 vs. 4Q'16

Twelve Months Ended

YTD'17 vs. YTD'16

 

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Dec 31,

Dec 31,

2017

2017

2017

2017

2016

2017

2016

Interest income:

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$4,233

$4,182

$3,927

$3,877

$3,919

$314

8.00%

$16,219

$14,682

$1,537

10.50%

Interest on investment securities

58

51

43

36

28

30

107.10%

188

96

92

95.80%

Total interest income

4,291

4,233

3,970

3,913

3,947

344

8.70%

16,407

14,778

1,629

11.00%

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

233

219

202

194

188

45

23.90%

848

727

121

16.60%

Interest on borrowings of consolidated securitization entities

70

65

63

65

64

6

9.40%

263

244

19

7.80%

Interest on third-party debt

72

73

68

67

67

5

7.50%

280

277

3

1.10%

Total interest expense

375

357

333

326

319

56

17.60%

1,391

1,248

143

11.50%

Net interest income

3,916

3,876

3,637

3,587

3,628

288

7.90%

15,016

13,530

1,486

11.00%

Retailer share arrangements

-779

-805

-669

-684

-811

32

-3.90%

-2,937

-2,902

-35

1.20%

Net interest income, after retailer share arrangements

3,137

3,071

2,968

2,903

2,817

320

11.40%

12,079

10,628

1,451

13.70%

Provision for loan losses

1,354

1,310

1,326

1,306

1,076

278

25.80%

5,296

3,986

1,310

32.90%

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

1,783

1,761

1,642

1,597

1,741

42

2.40%

6,783

6,642

141

2.10%

Other income:

 

 

 

 

 

 

 

 

 

 

 

Interchange revenue

179

164

165

145

167

12

7.20%

653

602

51

8.50%

Debt cancellation fees

69

67

68

68

68

1

1.50%

272

262

10

3.80%

Loyalty programs

-193

-168

-206

-137

-157

-36

22.90%

-704

-547

-157

28.70%

Other

7

13

30

17

7

-

- %

67

27

40

148.10%

Total other income

62

76

57

93

85

-23

-27.10%

288

344

-56

-16.30%

Other expense:

 

 

 

 

 

 

 

 

 

 

 

Employee costs

333

335

321

325

315

18

5.70%

1,314

1,207

107

8.90%

Professional fees

159

161

158

151

164

-5

-3.00%

629

638

-9

-1.40%

Marketing and business development

156

124

124

94

130

26

20.00%

498

423

75

17.70%

Information processing

99

96

88

90

88

11

12.50%

373

338

35

10.40%

Other

223

242

220

248

221

2

0.90%

933

810

123

15.20%

Total other expense

970

958

911

908

918

52

5.70%

3,747

3,416

331

9.70%

Earnings before provision for income taxes

875

879

788

782

908

-33

-3.60%

3,324

3,570

-246

-6.90%

Provision for income taxes

490

324

292

283

332

158

47.60%

1,389

1,319

70

5.30%

Net earnings attributable to common stockholders

$385

$555

$496

$499

$576

($191)

-33.20%

$1,935

$2,251

($316)

-14.00%

SYNCHRONY FINANCIAL

STATEMENTS OF FINANCIAL POSITION

(unaudited, $ in millions)

 

Quarter Ended

Dec 31, 2017 vs. Dec 31, 2016

 

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

2017

2017

2017

2017

2016

Assets

 

 

 

 

 

 

 

Cash and equivalents

$11,602

$13,915

$12,020

$11,392

$9,321

$2,281

24.50%

Investment securities

4,488

3,317

3,997

5,328

5,110

-622

-12.20%

Loan receivables:

 

 

 

 

 

 

 

Unsecuritized loans held for investment

55,526

53,997

52,550

50,398

52,332

3,194

6.10%

Restricted loans of consolidated securitization entities

26,421

22,931

22,908

22,952

24,005

2,416

10.10%

Total loan receivables

81,947

76,928

75,458

73,350

76,337

5,610

7.30%

Less: Allowance for loan losses

-5,574

-5,361

-5,001

-4,676

-4,344

-1,230

28.30%

Loan receivables, net

76,373

71,567

70,457

68,674

71,993

4,380

6.10%

Goodwill

991

991

991

992

949

42

4.40%

Intangible assets, net

749

772

787

826

712

37

5.20%

Other assets

1,605

1,986

2,888

1,838

2,122

-517

-24.40%

Total assets

$95,808

$92,548

$91,140

$89,050

$90,207

$5,601

6.20%

Liabilities and Equity

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Interest-bearing deposit accounts

$56,276

$54,232

$52,659

$51,359

$51,896

$4,380

8.40%

Non-interest-bearing deposit accounts

212

222

226

246

159

53

33.30%

Total deposits

56,488

54,454

52,885

51,605

52,055

4,433

8.50%

Borrowings:

 

 

 

 

 

 

 

Borrowings of consolidated securitization entities

12,497

11,891

12,204

12,433

12,388

109

0.90%

Bank term loan

-

-

-

-

-

-

- %

Senior unsecured notes

8,302

8,008

8,505

7,761

7,759

543

7.00%

Total borrowings

20,799

19,899

20,709

20,194

20,147

652

3.20%

Accrued expenses and other liabilities

4,287

3,793

3,214

2,888

3,809

478

12.50%

Total liabilities

81,574

78,146

76,808

74,687

76,011

5,563

7.30%

Equity:

 

 

 

 

 

 

 

Common stock

1

1

1

1

1

-

- %

Additional paid-in capital

9,445

9,429

9,415

9,405

9,393

52

0.60%

Retained earnings

6,809

6,543

6,109

5,724

5,330

1,479

27.70%

Accumulated other comprehensive income

-64

-40

-49

-55

-53

-11

20.80%

Treasury Stock

-1,957

-1,531

-1,144

-712

-475

-1,482

NM

Total equity

14,234

14,402

14,332

14,363

14,196

38

0.30%

Total liabilities and equity

$95,808

$92,548

$91,140

$89,050

$90,207

$5,601

6.20%

SYNCHRONY FINANCIAL

AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN

(unaudited, $ in millions)

 

Quarter Ended

 

31-Dec-17

30-Sep-17

30-Jun-17

31-Mar-17

31-Dec-16

 

 

Interest

Average

 

Interest

Average

 

Interest

Average

 

Interest

Average

 

Interest

Average

 

Average

Income/

Yield/

Average

Income/

Yield/

Average

Income/

Yield/

Average

Income/

Yield/

Average

Income/

Yield/

 

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning cash and equivalents

$13,591

$43

1.26%

$11,895

$37

1.23%

$10,758

$28

1.04%

$10,552

$21

0.81%

$12,210

$17

0.55%

Securities available for sale

3,725

15

1.60%

3,792

14

1.46%

5,195

15

1.16%

5,213

15

1.17%

4,076

11

1.07%

Loan receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit cards, including held for sale

75,389

4,161

21.90%

73,172

4,111

22.29%

71,206

3,858

21.73%

71,365

3,811

21.66%

69,660

3,851

21.99%

Consumer installment loans

1,568

36

9.11%

1,543

35

9.00%

1,461

34

9.33%

1,389

32

9.34%

1,373

31

8.98%

Commercial credit products

1,375

35

10.10%

1,392

36

10.26%

1,378

34

9.90%

1,317

34

10.47%

1,386

36

10.33%

Other

37

1

NM

58

-

- %

45

1

NM

61

-

- %

57

1

NM

Total loan receivables, including held for sale

78,369

4,233

21.43%

76,165

4,182

21.78%

74,090

3,927

21.26%

74,132

3,877

21.21%

72,476

3,919

21.51%

Total interest-earning assets

95,685

4,291

17.79%

91,852

4,233

18.28%

90,043

3,970

17.68%

89,897

3,913

17.65%

88,762

3,947

17.69%

Non-interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

1,037

 

 

877

 

 

829

 

 

802

 

 

739

 

 

Allowance for loan losses

(5,443)

 

 

(5,125)

 

 

(4,781)

 

 

(4,408)

 

 

(4,228)

 

 

Other assets

3,219

 

 

3,517

 

 

3,303

 

 

3,177

 

 

3,479

 

 

Total non-interest-earning assets

(1,187)

 

 

(731)

 

 

(649)

 

 

(429)

 

 

(10)

 

 

Total assets

$94,498

 

 

$91,121

 

 

$89,394

 

 

$89,468

 

 

$88,752

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposit accounts

$55,690

$233

1.66%

$53,294

$219

1.63%

$51,836

$202

1.56%

$51,829

$194

1.52%

$51,006

$188

1.47%

Borrowings of consolidated securitization entities

12,425

70

2.24%

11,759

65

2.19%

12,213

63

2.07%

12,321

65

2.14%

12,389

64

2.06%

Bank term loan

-

-

- %

-

-

- %

-

-

- %

-

-

- %

-

-

- %

Senior unsecured notes

7,940

72

3.60%

8,251

73

3.51%

7,933

68

3.44%

7,760

67

3.50%

7,757

67

3.44%

Total interest-bearing liabilities

76,055

375

1.96%

73,304

357

1.93%

71,982

333

1.86%

71,910

326

1.84%

71,152

319

1.78%

Non-interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposit accounts

218

 

 

232

 

 

218

 

 

240

 

 

176

 

 

Other liabilities

3,716

 

 

3,154

 

 

2,752

 

 

2,995

 

 

3,321

 

 

Total non-interest-bearing liabilities

3,934

 

 

3,386

 

 

2,970

 

 

3,235

 

 

3,497

 

 

Total liabilities

79,989

 

 

76,690

 

 

74,952

 

 

75,145

 

 

74,649

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

14,509

 

 

14,431

 

 

14,442

 

 

14,323

 

 

14,103

 

 

Total liabilities and equity

$94,498

 

 

$91,121

 

 

$89,394

 

 

$89,468

 

 

$88,752

 

 

Net interest income

 

$3,916

 

 

$3,876

 

 

$3,637

 

 

$3,587

 

 

$3,628

 

Interest rate spread (1)

 

 

15.83%

 

 

16.35%

 

 

15.82%

 

 

15.81%

 

 

15.91%

Net interest margin (2)

 

 

16.24%

 

 

16.74%

 

 

16.20%

 

 

16.18%

 

 

16.26%

(1) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.

(2) Net interest margin represents net interest income divided by average interest-earning assets.

SYNCHRONY FINANCIAL

AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN

(unaudited, $ in millions)

 

Twelve Months Ended

Twelve Months Ended

31-Dec-17

31-Dec-16

 

 

Interest

Average

 

Interest

Average

 

Average

Income/

Yield/

Average

Income/

Yield/

 

Balance

Expense

Rate

Balance

Expense

Rate

Assets

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

Interest-earning cash and equivalents

$11,707

$129

1.10%

$12,152

$63

0.52%

Securities available for sale

4,449

59

1.33%

3,220

33

1.02%

Loan receivables:

 

 

 

 

 

 

Credit cards, including held for sale

72,795

15,941

21.90%

65,947

14,424

21.87%

Consumer installment loans

1,491

137

9.19%

1,274

117

9.18%

Commercial credit products

1,366

139

10.18%

1,372

139

10.13%

Other

50

2

4.00%

56

2

3.57%

Total loan receivables, including held for sale

75,702

16,219

21.42%

68,649

14,682

21.39%

Total interest-earning assets

91,858

16,407

17.86%

84,021

14,778

17.59%

Non-interest-earning assets:

 

 

 

 

 

 

Cash and due from banks

887

 

 

965

 

 

Allowance for loan losses

(4,942)

 

 

(3,872)

 

 

Other assets

3,304

 

 

3,286

 

 

Total non-interest-earning assets

(751)

 

 

379

 

 

Total assets

$91,107

 

 

$84,400

 

 

Liabilities

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

Interest-bearing deposit accounts

$53,173

$848

1.59%

$47,194

$727

1.54%

Borrowings of consolidated securitization entities

12,179

263

2.16%

12,428

244

1.96%

Bank term loan(1)

-

-

- %

556

31

5.58%

Senior unsecured notes

7,972

280

3.51%

7,158

246

3.44%

Total interest-bearing liabilities

73,324

1,391

1.90%

67,336

1,248

1.85%

Non-interest-bearing liabilities

 

 

 

 

 

 

Non-interest-bearing deposit accounts

227

 

 

205

 

 

Other liabilities

3,129

 

 

3,239

 

 

Total non-interest-bearing liabilities

3,356

 

 

3,444

 

 

Total liabilities

76,680

 

 

70,780

 

 

Equity

 

 

 

 

 

 

Total equity

14,427

 

 

13,620

 

 

Total liabilities and equity

$91,107

 

 

$84,400

 

 

Net interest income

 

$15,016

 

 

$13,530

 

Interest rate spread (2)

 

 

15.96%

 

 

15.74%

Net interest margin (3)

 

 

16.35%

 

 

16.10%

(1) The effective interest rate for the Bank term loan for the 12 months ended December 31, 2016 was 2.48%. The Bank term loan effective rate excludes the impact of charges incurred in connection with prepayments of the loan.

(2) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average interest-earning assets.

SYNCHRONY FINANCIAL

BALANCE SHEET STATISTICS

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

 

Quarter Ended

Dec 31, 2017 vs. Dec 31, 2016

 

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

2017

2017

2017

2017

2016

BALANCE SHEET STATISTICS

 

 

 

 

 

 

 

Total common equity

$14,234

$14,402

$14,332

$14,363

$14,196

$38

0.30%

Total common equity as a % of total assets

14.86%

15.56%

15.73%

16.13%

15.74%

 

-0.88%

Tangible assets

$94,068

$90,785

$89,362

$87,232

$88,546

$5,522

6.20%

Tangible common equity(1)

$12,494

$12,639

$12,554

$12,545

$12,535

($41)

-0.30%

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

13.28%

13.92%

14.05%

14.38%

14.16%

 

-0.88%

Tangible common equity per share(1)

$16.22

$16.15

$15.79

$15.47

$15.34

$0.88

5.70%

REGULATORY CAPITAL RATIOS (2)

 

 

 

 

 

 

 

Basel III Transition

Total risk-based capital ratio(3)

17.30%

18.70%

18.70%

19.30%

18.50%

 

 

Tier 1 risk-based capital ratio(4)

16.00%

17.30%

17.40%

18.00%

17.20%

 

 

Tier 1 leverage ratio(5)

13.80%

14.60%

14.80%

14.80%

15.00%

 

 

Common equity Tier 1 capital ratio(6)

16.00%

17.30%

17.40%

18.00%

17.20%

 

 

Basel III Fully Phased-in

Common equity Tier 1 capital ratio(6)

15.80%

17.20%

17.20%

17.70%

17.00%

 

 

(1) Tangible common equity ("TCE") is a non-GAAP measure. We believe TCE is a more meaningful measure of the net asset value of the Company to investors. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

(2) Regulatory capital metrics at December 31, 2017 are preliminary and therefore subject to change.

(3) Total risk-based capital ratio is the ratio of total risk-based capital divided by risk-weighted assets.

(4) Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided by risk-weighted assets.

(5) Tier 1 leverage ratio is the ratio of Tier 1 capital divided by total average assets, after certain adjustments. Tier 1 leverage ratios are based upon the use of daily averages for all periods presented.

(6) Common equity Tier 1 capital ratio is the ratio of common equity Tier 1 capital to total risk-weighted assets, each as calculated under Basel III rules. Common equity Tier 1 capital ratio (fully phased-in) is an estimate reflecting management’s interpretation of the final Basel III rules adopted in July 2013 by the Federal Reserve Board, which have not been fully implemented, and our estimate and interpretations are subject to, among other things, ongoing regulatory review and implementation guidance.

SYNCHRONY FINANCIAL

PLATFORM RESULTS

(unaudited, $ in millions)

 

Quarter Ended

4Q'17 vs. 4Q'16

Twelve Months Ended

YTD'17 vs. YTD'16

 

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Dec 31,

Dec 31,

2017

2017

2017

2017

2016

2017

2016

RETAIL CARD

 

 

 

 

 

 

 

 

 

 

 

Purchase volume(1)(2)

$29,839

$26,347

$27,101

$22,952

$28,996

$843

2.90%

$106,239

$101,242

$4,997

4.90%

Period-end loan receivables

$56,230

$52,119

$51,437

$49,905

$52,701

$3,529

6.70%

$56,230

$52,701

$3,529

6.70%

Average loan receivables, including held for sale

$53,256

$51,817

$50,533

$50,644

$49,476

$3,780

7.60%

$51,570

$46,963

$4,607

9.80%

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

56,113

54,471

54,058

55,049

54,489

1,624

3.00%

55,142

53,344

1,798

3.40%

Interest and fees on loans(2)

$3,133

$3,102

$2,900

$2,888

$2,909

$224

7.70%

$12,023

$10,898

$1,125

10.30%

Other income(2)

$49

$61

$25

$77

$70

($21)

-30.00%

$212

$288

($76)

-26.40%

Retailer share arrangements(2)

($771)

($795)

($657)

($681)

($801)

$30

-3.70%

($2,904)

($2,870)

($34)

1.20%

PAYMENT SOLUTIONS

 

 

 

 

 

 

 

 

 

 

 

Purchase volume(1)

$4,366

$4,178

$3,930

$3,686

$4,194

$172

4.10%

$16,160

$15,641

$519

3.30%

Period-end loan receivables

$16,857

$16,153

$15,595

$15,320

$15,567

$1,290

8.30%

$16,857

$15,567

$1,290

8.30%

Average loan receivables

$16,386

$15,848

$15,338

$15,424

$15,076

$1,310

8.70%

$15,752

$14,110

$1,642

11.60%

Average active accounts (in thousands)(3)

9,421

9,183

9,031

9,090

8,844

577

6.50%

9,192

8,410

782

9.30%

Interest and fees on loans

$574

$559

$533

$515

$523

$51

9.80%

$2,181

$1,952

$229

11.70%

Other income

$2

$2

$6

$4

$3

($1)

-33.30%

$14

$13

$1

7.70%

Retailer share arrangements

($5)

($9)

($9)

($1)

($9)

$4

-44.40%

($24)

($26)

$2

-7.70%

CARECREDIT

 

 

 

 

 

 

 

 

 

 

 

Purchase volume(1)

$2,360

$2,368

$2,445

$2,242

$2,179

$181

8.30%

$9,415

$8,585

$830

9.70%

Period-end loan receivables

$8,860

$8,656

$8,426

$8,125

$8,069

$791

9.80%

$8,860

$8,069

$791

9.80%

Average loan receivables

$8,727

$8,500

$8,219

$8,064

$7,924

$803

10.10%

$8,380

$7,576

$804

10.60%

Average active accounts (in thousands)(3)

5,814

5,677

5,546

5,490

5,368

446

8.30%

5,634

5,174

460

8.90%

Interest and fees on loans

$526

$521

$494

$474

$487

$39

8.00%

$2,015

$1,832

$183

10.00%

Other income

$11

$13

$26

$12

$12

($1)

-8.30%

$62

$43

$19

44.20%

Retailer share arrangements

($3)

($1)

($3)

($2)

($1)

($2)

NM

($9)

($6)

($3)

50.00%

TOTAL SYF

 

 

 

 

 

 

 

 

 

 

 

Purchase volume(1)(2)

$36,565

$32,893

$33,476

$28,880

$35,369

$1,196

3.40%

$131,814

$125,468

$6,346

5.10%

Period-end loan receivables

$81,947

$76,928

$75,458

$73,350

$76,337

$5,610

7.30%

$81,947

$76,337

$5,610

7.30%

Average loan receivables, including held for sale

$78,369

$76,165

$74,090

$74,132

$72,476

$5,893

8.10%

$75,702

$68,649

$7,053

10.30%

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

71,348

69,331

68,635

69,629

68,701

2,647

3.90%

69,968

66,928

3,040

4.50%

Interest and fees on loans(2)

$4,233

$4,182

$3,927

$3,877

$3,919

$314

8.00%

$16,219

$14,682

$1,537

10.50%

Other income(2)

$62

$76

$57

$93

$85

($23)

-27.10%

$288

$344

($56)

-16.30%

Retailer share arrangements(2)

($779)

($805)

($669)

($684)

($811)

$32

-3.90%

($2,937)

($2,902)

($35)

1.20%

(1) Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.

(2) Includes activity and balances associated with loan receivables held for sale.

(3) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

SYNCHRONY FINANCIAL

RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES (1)

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

 

Quarter Ended

Twelve Months Ended

 

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Dec 31,

2017

2017

2017

2017

2016

2017

COMMON EQUITY MEASURES

 

 

 

 

 

 

GAAP Total common equity

$14,234

$14,402

$14,332

$14,363

$14,196

 

Less: Goodwill

-991

-991

-991

-992

-949

 

Less: Intangible assets, net

-749

-772

-787

-826

-712

 

Tangible common equity

$12,494

$12,639

$12,554

$12,545

$12,535

 

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

254

344

337

340

337

 

Basel III - Common equity Tier 1 (fully phased-in)

$12,748

$12,983

$12,891

$12,885

$12,872

 

Adjustment related to capital components during transition

142

142

146

154

263

 

Basel III - Common equity Tier 1 (transition)

$12,890

$13,125

$13,037

$13,039

$13,135

 

RISK-BASED CAPITAL

 

 

 

 

 

 

Common equity Tier 1

$12,890

$13,125

$13,037

$13,039

$13,135

 

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

1,064

1,001

985

954

994

 

Risk-based capital

$13,954

$14,126

$14,022

$13,993

$14,129

 

ASSET MEASURES

 

 

 

 

 

 

Total average assets(2)

$94,498

$91,121

$89,394

$89,468

$88,752

 

Adjustments for:

 

 

 

 

 

 

Disallowed goodwill and other disallowed intangible assets (net of related deferred tax liabilities) and other

-1,392

-1,304

-1,325

-1,358

-1,059

 

Total assets for leverage purposes

$93,106

$89,817

$88,069

$88,110

$87,693

 

Risk-weighted assets - Basel III (fully phased-in) (3)

$80,526

$75,614

$74,748

$72,596

$75,941

 

Risk-weighted assets - Basel III (transition) (3)

$80,669

$75,729

$74,792

$72,627

$76,179

 

TANGIBLE COMMON EQUITY PER SHARE

 

 

 

 

 

 

GAAP book value per share

$18.47

$18.40

$18.02

$17.71

$17.37

 

Less: Goodwill

-1.29

-1.27

-1.25

-1.22

-1.16

 

Less: Intangible assets, net

-0.96

-0.98

-0.98

-1.02

-0.87

 

Tangible common equity per share

$16.22

$16.15

$15.79

$15.47

$15.34

 

ADJUSTED NET EARNINGS

 

 

 

 

 

 

GAAP net earnings

$385

$555

$496

$499

$576

$1,935

Adjustment for tax law change(4)

160

-

-

-

-

160

Adjusted net earnings

$545

$555

$496

$499

$576

$2,095

ADJUSTED DILUTED EPS

 

 

 

 

 

 

GAAP diluted EPS

$0.49

$0.70

$0.61

$0.61

$0.70

$2.42

Adjustment for tax law change(4)

0.21

-

-

-

-

0.2

Adjusted diluted EPS

$0.70

$0.70

$0.61

$0.61

$0.70

$2.62

(1) Regulatory measures at December 31, 2017 are presented on an estimated basis.

(2) Total average assets are presented based upon the use of daily averages.

(3) Key differences between Basel III transitional rules and fully phased-in Basel III rules in the calculation of risk-weighted assets include, but not limited to, risk weighting of deferred tax assets and adjustments for certain intangible assets.

(4) Adjustment to exclude the effects to Provision for income taxes in the quarter ended December 31, 2017, resulting from the Tax Act.
Contact:

Synchrony Financial
Investor Relations
Greg Ketron, 203-585-6291
or
Media Relations
Sue Bishop, 203-585-2802
susan.bishopmangino@syf.com