Synchrony Financial · NYSE:SYF
Synchrony Financial — Q1 2023 Earnings Presentation
16 slides from Synchrony Financial's earnings presentation, Apr 19, 2023
Slide 1: 1Q'23 Financial Results
1Q'23 FINANCIAL RESULTS April 19, 2023
Slide 2: Disclaimers
Disclaimers Cautionary Statement Regarding Forward-Looking Statements The following slides are part of a presentation by Synchrony Financial in connection with reporting quarterly financial results. No representation is made that the information in these slides is complete. For additional informatio
Slide 3: 1Q'23 Financial Highlights
1Q'23 Financial Highlights SUMMARY FINANCIAL METRICS CAPITAL $1.35 15.22% 12.5% DILUTED EPS NET INTEREST MARGIN CET1 compared to $1.77 compared to 15.80% liquid assets of $18.7 billion, 17.4% of total assets $91.1 billion 4.49% $74.4 billion LOAN RECEIVABLES NET CHARGE-OFFS DEPOSITS compared to $78.
Slide 4: 1Q'23 Business Highlights
1Q'23 Business Highlights BUSINESS EXPANSION GROWTH METRICS CONSUMER PERFORMANCE Purchase Volume New Accounts(c) $ billions 3% (7)% Core(a) 11% Core(a) (1)% $37.3 $41.6 5.2 5.2 Dual Card / Co-Brand(b) $13.9 $17.0 22% (d) Loan receivables Purchase Volume per Account $ billions 15% 4% Core(a) $78.7 $9
Slide 5: Financial Results
Financial Results Summary earnings statement 1Q'23 Highlights B/(W) $601 million Net earnings, $1.35 diluted EPS $ in millions, except per share statistics 1Q'23 1Q'22 $ % • Net interest income up 7% Total interest income $4,786 $4,022 $764 19 % – Interest and fees on loans up 15% driven primarily b
Slide 6: 1Q'23 Platform Results
(a) 1Q'23 Platform Results Loan receivables $ in billions Home & Digital Diversified & Health & Lifestyle Auto Value Wellness 12% 18% 17% 21% 11% 1Q'22 1Q'23 V% 1Q'22 1Q'23 V% 1Q'22 1Q'23 V% 1Q'22 1Q'23 V% 1Q'22 1Q'23 V% Purchase $11.2 $12.3 10% $10.3 $10.9 6% $11.6 $13.4 16% $3.1 $3.7 19% $1.2 $1.3
Slide 7: Net Interest Income
Net Interest Income 1Q'23 Highlights Net Interest Income 7% $ in millions • Net interest income increased 7% % of average interest-earning assets − Interest and fees on loans up 15% driven by growth in average loan receivables, partially offset by impacts of portfolios sold during 2Q’22 − Interest e
Slide 8: Asset Quality Metrics
Asset Quality Metrics 30+ days past due Net charge-offs $ in millions, % of period-end loan receivables $ in millions, % of average loan receivables including held for sale 90+ days past due Allowance for credit losses (a) $ in millions, % of period-end loan receivables $ in millions, % of period-en
Slide 9: Other Expense
Other Expense Other expense $ in millions 8% 1Q'23 Highlights • Total other expense up 8% − Increase primarily driven by higher employee costs, operational losses and technology investments − Employee cost increase primarily driven by higher headcount and increased average compensation rates − Incre
Slide 10: Funding, Capital and Liquidity
Funding, Capital and Liquidity (a) Funding sources Liquidity $ in billions $ in billions V$ $1.6 Unsecured $0.1 Securitization Deposits $10.8 V% Deposits 83% 83% 0 pts. Liquid assets $14.7 $18.7 Undrawn credit facilities $ 3.1 $ 3.0 Securitization 8% 7% (1) pts. Total liquidity $17.8 $21.7 Unsecured
Slide 11: Synchrony Bank Direct Deposit Overview
(a) Synchrony Bank Direct Deposit Overview Insured/Uninsured Direct Deposit Balance Mix 1Q’23 Net Direct Deposit Flows Observations $ in billions • Our customer demographic and focus on consumer deposits Uninsured ~10% ~9% results in a stable and largely insured deposit base • Coverage of cash at th
Slide 12: 2023 Outlook
2023 Outlook Full Year 2023 Key Driver Previous Current Trends / Update • 1Q Purchase Volume growth & payment rate moderation exceeded Loan Receivables expectations Growth 8 – 10% 10+% • Expect payment rate moderation to continue through year, but remain above pre-pandemic levels through year-end •
Slide 13: Footnotes
Footnotes All amounts and metrics included in this presentation are as of, or for the three months ended, March 31, 2023, unless otherwise stated. 1Q'23 Business Highlights (b) Dual Card / Co-Brand metrics shown above are consumer only and excludes amounts related to portfolios that were sold in 2Q’
Slide 14: Synchrony - Changing What's Possible
»/" synchrony CHANGING WHAT’S POSSIBLE
Slide 15: Non-GAAP Reconciliation
Non-GAAP Reconciliation The following table sets forth the components of our Core key metrics for the periods indicated below. Quarter Ended March 31 Total $ and accounts in millions 2022 2023 Loan receivables $78,916 $91,129 Less: Gap and BP Loan receivables (234) (80) Core Loan receivables $78,682
Slide 16: Non-GAAP Reconciliation Continued
Non-GAAP Reconciliation Continued The following table sets forth the components of our Tier 1 Capital + Reserves ratio for the periods indicated below. $ in millions At March 31 Total 2022 2023 Tier 1 Capital $ 13,254 $ 12,207 Less: CECL transition adjustment (1,719) (1,146) Tier 1 capital (CECL ful