Synchrony Financial · NYSE:SYF
Synchrony Financial — Q3 2021 Earnings Presentation
18 slides from Synchrony Financial's earnings presentation, Oct 19, 2021
Slide 1: 3Q'21 Financial Results
3Q'21 FINANCIAL RESULTS October 19, 2021
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: 3Q'21 Financial Highlights
3Q'21 Financial Highlights SUMMARY FINANCIAL METRICS CAPITAL $2.00 15.45% 17.1% DILUTED EPS NET INTEREST MARGIN CET1 compared to $0.52; compared to 13.80% liquid assets of $14.7 billion, $0.33 benefit from Gap 16.0% of total assets portfolio move to HFS $79.8 billion 2.18% $60.3 billion LOANS NET CH
Slide 4: 3Q'21 Business Highlights
3Q'21 Business Highlights BUSINESS EXPANSION CONSUMER PERFORMANCE DIGITAL New Accounts (a) 17% ~65% DIGITAL PAYMENTS* *3Q'21 % of Total Payments Purchase Volume per Account (b) ~55% DIGITAL APPLICATIONS 11% ~35% MOBILE CHANNEL APPLICATIONS (c) Average Balance per Account (3)% ~40% ONLINE SALES* *Exc
Slide 5: Synchrony Mastercard - Diversified Growth at Attractive Returns
Synchrony Mastercard - Diversified Growth at Attractive Returns (a) 5
Slide 6: Financial Results
Financial Results Summary earnings statement 3Q'21 Highlights B/(W) $ in millions, except per share statistics 3Q'21 3Q'20 $ % • $1.1 billion Net earnings, $2.00 diluted EPS Total interest income $3,898 $3,837 $61 2% – Reserve release related to Gap portfolio to HFS Total interest expense 240 380 14
Slide 7: Growth Metrics
Growth Metrics Purchase volume 16% Loan receivables (3)% $ in billions $ in billions $44.0 $39.0 $74.5 $74.5 $76.1 $76.3 2% $33.5 Dual Card / Dual Card / Co-Brand $13.1 $16.9 29% Co-Brand(b) $18.3 $19.1 4% Average active accounts 5% Interest and fees on loans 2% in millions $ in millions 59.4 62.1 $
Slide 8: 3Q'21 Platform Results
(a) 3Q'21 Platform Results Loan receivables $ in billions Home Digital Diversified Health & Lifestyle & Auto & Value Wellness 2% 4% (3)% 5% 8% 3Q'20 3Q'21 V% 3Q'20 3Q'21 V% 3Q'20 3Q'21 V% 3Q'20 3Q'21 V% 3Q'20 3Q'21 V% Purchase Volume $10.7 $11.8 10% $9.0 $11.0 21% $9.6 $12.0 25% $2.7 $3.0 10% $1.3 $
Slide 9: Net Interest Income
Net Interest Income Net Interest Income 3Q'21 Highlights $ in millions 6% % of average interest-earning assets • Net interest income increased 6% – Interest and fees on loans up 2% as average loan receivables increased • Net interest margin (NIM) up 165 bps – Mix of Interest-earnings assets: 106 bps
Slide 10: 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 (a) (c) 90+ days past due Allowance for credit losses $ in millions, % of period-end loan receivables $ in millions, % of perio
Slide 11: Other Expense
Other Expense Other expense $ in millions (10)% 3Q'21 Highlights • Other expense down 10% – Decrease primarily driven by prior year restructuring charge of $89 million and lower operational losses • Efficiency ratio 38.7% vs. 39.7% prior year B/(W) 3Q'20 3Q'21 V$ V% Employee costs $382 $369 $13 3% P
Slide 12: Funding, Capital and Liquidity
Funding, Capital and Liquidity (a) Funding sources Liquidity $ in billions $ in billions Unsecured V$ Securitization $(1.5) $(1.5) Deposits $(3.2) V% Deposits 80% 82% +2 pts. Liquid assets $21.4 $14.7 Undrawn credit facilities 5.4 3.7 Securitization 10% 9% (1) pt. Total liquidity $26.8 $18.4 Unsecur
Slide 13: Expectations for 4Q'21 Key Drivers
Expectations for 4Q’21 Key Drivers (comments and trends in comparison to 3Q21, except where noted) Purchase Volume Continued strength into holiday season Modest sequential acceleration, reflecting strength in purchase volume Loan Receivables partially offset by continued elevation in payment rates N
Slide 14: 3Q'21 Key Business Themes
3Q'21 Key Business Themes Enhancing customer Generating strong growth reach & utility • Purchase volume of $42 billion, +16% • Launched Walgreens credit card and announced PayPal savings program • Originated 6 million new accounts, +17% • Broadened distribution network through and 18 million new acc
Slide 15: Footnotes
Footnotes References in this presentation to “HFS” are to Loan receivables Held for Sale. 3Q'21 Business Highlights | slide 4: a. New Accounts represent accounts that were approved in the respective period, in millions. b. Purchase Volume per Account is calculated as the Purchase volume divided by A
Slide 16: Synchrony - Changing What's Possible
»/" synchrony CHANGING WHAT’S POSSIBLE
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation The following table sets forth the components of our Loan receivables for the periods indicated below. At September 30, $ in millions Total CORE LOAN RECEIVABLES 2020 2021 Loan receivables $78,521 $76,388 Loan receivables held for sale 4 3,450 Loan receivables including held
Slide 18: 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. At September 30, Total $ in millions 2020 2021 Tier 1 Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .