Synchrony Financial · NYSE:SYF
Synchrony Financial — Q1 2015 Earnings Presentation
17 slides from Synchrony Financial's earnings presentation, Apr 17, 2015
Slide 1: 1Q'15 Financial Results
1Q’15 Financial Results April 17, 2015 Exhibit 99.3
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
2 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 information, see the
Slide 3: 1Q'15 Highlights
3 1Q'15 Highlights Financial highlights • $552 million Net earnings, $0.66 EPS • Strong growth across the business Purchase volume +10%, Loan receivables +7%, Platform revenue +5% • Asset quality continues to improve Net charge-offs improved from 4.86% to 4.53% compared to prior year 30+ delin
Slide 4: Digital, Loyalty and Analytics Capabilities
4 Digital, Loyalty and Analytics Capabilities LOYALTY ANALYTICS MOBILE • Digital wallets: Apple Pay Samsung Pay CurrentC • Mobile services: Application Servicing Rewards Payment • Digital cards • GPShopper investment Proprietary Closed-Loop Network • Enables valuable data capture • Integrate
Slide 5: Growth Metrics
5 Growth Metrics +10% Purchase volume $ in billions Loan receivables $ in billions Active accounts Average active accounts in millions Platform revenue $ in millions 1Q'14 1Q'15 $21.1 $23.1 $54.3 $58.2 $2,581 $2,449 61.6 59.3 +4% +5% +7% 1Q'14 1Q'15 1Q'14 1Q'15 1Q'14 1Q'15
Slide 6: Platform Results
6 Platform Results Retail Card Loan receivables, $ in billions $37.2 $39.7 1Q'14 1Q'15 Strong receivable growth across partner programs Platform revenue up 5% driven by receivable growth Payment Solutions Loan receivables, $ in billions $10.6 $11.8 1Q'14 1Q'15 Broad receivable growth led by ho
Slide 7: Financial Results Summary
7 Financial Results Summary earnings statement First quarter 2015 highlights $ in millions, except ratios Total interest income $3,150 $2,933 $217 7% Total interest expense 275 190 (85) (45)% Net interest income (NII) 2,875 2,743 132 5% Retailer share arrangements (RSA) (660) (594) (66) (11)% NII, a
Slide 8: Net Interest Income
8 Net Interest Income First quarter 2015 highlights • Net interest income up 5% driven by growth in receivables partially offset by higher funding costs Interest and fees on loans up 7% in-line with loan receivable growth • Net interest margin decline driven primarily by increase in liquidity Li
Slide 9: Asset Quality Metrics
9 Asset Quality Metrics Net charge-offs $ in millions, % of average loan receivables including held for sale 30+ days past due $ in millions, % of period-end loan receivables Allowance for loan losses $ in millions, % of period-end loan receivables 90+ days past due $ in millions, % of period-end lo
Slide 10: Other Expense
10 Other expense $ in millions Other Expense Employee cost $193 $239 $46 24% Professional fees 130 162 32 25% Marketing/BD 83 82 (1) (1)% Information processing 52 63 11 21% Other 152 200 48 32% Other expense $610 $746 $136 22% Efficiency 26.9% 32.2% 5.3pts. $610 • Expense increase primarily driven
Slide 11: Funding, Capital and Liquidity
11 Funding, Capital and Liquidity (b) Liquid assets $4.8 $13.8 Undrawn securitization capacity 0.5 6.6 Total liquidity $5.3 $20.4 % of total assets 8.9% 28.1% Tier 1 common $9.8 $9.8 Risk weighted assets $58.2 $59.9 Liquidity $ in billions 1Q'15 $20.4 $5.3 1Q'14 Capital ratios 1Q'15, $ in billions B
Slide 12: 1Q'15 Wrap Up
12 1Q’15 Wrap Up • Net earnings of $552 million … $0.66 earnings per share • Broad based growth … Purchase volume +10%, Loan receivables +7%, Platform revenue +5% • Continuing to expand our digital, loyalty and analytic capabilities to drive our partners’ sales and our growth • Renewed Amazon under
Slide 13: Engage with us.
s{! synchrony FINANCIAL Engage with us.
Slide 14: Appendix
Appendix i]! synchrony 14
Slide 15: Non GAAP Reconciliations
15 Non GAAP Reconciliations In order to assess and internally report the revenue performance of our three sales platforms, we use measures we refer to as “platform revenue” and “platform revenue excluding retailer share arrangements.” Platform revenue is the sum of three line items in our Condensed
Slide 16: Non-GAAP Reconciliation
16 Non-GAAP Reconciliation The following table sets forth each component of our platform revenue for periods indicated below. ($ in millions) 2015 2014 Platform Revenue Total: Interest and fees on loans . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Slide 17: Common Equity Measures
17 COMMON EQUITY MEASURES GAAP Total common equity…………………………………………………..……. Less: Goodwill…………………………………………………………..……. Less: Intangible assets, net……………………………………………..…….. Tangible common equity……………………………………………………..…… Adjustments for certain other intangible assets, deferred tax liabilities and certai