Synchrony Financial · NYSE:SYF
Synchrony Financial — Q4 2024 Earnings Presentation
21 slides from Synchrony Financial's earnings presentation, Jan 28, 2025
Slide 1: 4Q'24 Financial Results
4Q'24 FINANCIAL RESULTS January 28, 2025
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 and should be read in conjunction with the earnings release and financial supplement included as exhib
Slide 3: 2024 Year in Review
2024 Year in Review GROW & DIVERSIFY DELIVER GENERATE WIN NEW PROGRAMS, BEST-IN-CLASS STRONG FINANCIAL PARTNERS PRODUCTS & CUSTOMER RESULTS MARKETS EXPERIENCES 45+ $3.5 PARTNER billion ~228MM VISITS TO NET EARNINGS RENEWALS SYNCHRONY MARKETPLACE Synchrony Pay Later 2.9% 85% ROA GROWTH IN ACCOUNTS PR
Slide 4: Delivering Consistent Returns Over Time
Delivering Consistent Returns Over Time Rising Interest Credit COVID-19 Rate & Credit Loss 12% Normalization Pandemic Environment CARD Act Took Effect 10% 8% RAR* GFC NCOs/ALR(b) 6% 4% RSA/ALR(b) 2% 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Prime & Super Prim
Slide 5: 4Q'24 Financial Highlights
4Q'24 Financial Highlights SUMMARY FINANCIAL METRICS CAPITAL $1.91 15.01% 13.3% DILUTED EPS NET INTEREST MARGIN CET1 compared to $1.03 compared to 15.10% liquid assets of $17.2 billion, 14.4% of total assets $104.7 billion 6.45% $82.1 billion LOAN RECEIVABLES NET CHARGE-OFFS DEPOSITS compared to $10
Slide 6: 4Q'24 Business Highlights
4Q'24 Business Highlights BUSINESS EXPANSION GROWTH METRICS CONSUMER PERFORMANCE Purchase volume New accounts (c) $ billions $49.3 $48.0 (3)% 6.2 (19)% 5.0 4Q'23 4Q'24 4Q'23 4Q'24 Dual Card / $21.0 $21.3 1% Co-Brand (a) (d) Loan receivables Purchase volume per account $ billions $103.0 $104.7 $690 $
Slide 7: Financial Results: Summary earnings statement
Financial Results Summary earnings statement 4Q'24 Highlights B/(W) $774 million Net earnings, $1.91 Diluted EPS $ in millions, except per share statistics 4Q'24 4Q'23 $ % • Net interest income up 3% Total interest income $5,710 $5,549 $161 3% – Interest and fees on loans up 3% driven primarily by g
Slide 8: 4Q'24 Platform Results
(a) 4Q'24 Platform Results Loan receivables Home & Digital Diversified & Health & Lifestyle Auto Value Wellness —% 1% 1% 6% 3% $32.0 $32.0 $28.9 $29.3 $20.7 $20.9 $15.4 $14.5 $6.7 $6.9 4Q'23 4Q'24 V% 4Q'23 4Q'24 V% 4Q'23 4Q'24 V% 4Q'23 4Q'24 V% 4Q'23 4Q'24 V% Purchase $11.4 $10.7 (6)% $15.5 $15.3 (1
Slide 9: Net Revenue
Net Revenue Net revenue 4Q'24 Highlights $ in millions 4% • Net revenue increased $142 million, or 4% $3,801 $3,659 – Net interest income increased $126 million, or 3%, driven $71 $128 primarily by higher interest & fees on loans – Loan receivables yield of 21.27%, up 8 bps primarily driven by repri
Slide 10: Other Expense
Other Expense Other Expense $ in millions (4)% 4Q'24 Highlights $1,316 • Total Other expense down 4% $1,267 – Decrease primarily driven by prior year restructuring costs and other notable expenses (see appendix for details) and lower operational losses, partially offset by costs related to the Ally
Slide 11: Asset Quality Metrics
Asset Quality Metrics 30+ days past due Net charge-offs $ in millions, % of period-end loan receivables $ in millions, annualized as a % of average loan receivables including held for sale 6.31% 6.42% 6.45% 4.74% 4.74% 4.78% 4.70% 6.06% 4.40% 4.47% 5.58% $1,585 $1,621 $1,661 3.81% 3.84% 4.75% $1,553
Slide 12: Delinquency Trends
Delinquency Trends 30+ days past due % of period-end loan receivables (left axis); rate change versus prior year in basis points (right axis) Basis point change versus prior year +109 +93 +38 -4 bps 5.0% +63 0 bps 2.5% 4.74% 4.74% 4.78% 4.70% 4.47% 0.0% 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 3Q'2
Slide 13: Funding, Capital and Liquidity
Funding, Capital and Liquidity Funding sources CET1% Walk $ in billions $97.1 $97.5 % 4Q'23 CET1% 12.2% Unsecured $8.6 $7.6 8% Net Earnings 2.8% Securitization $7.3 $7.8 8% Risk Weighted Asset changes (0.1)% Common & Preferred dividends (0.5)% Deposits $81.2 $82.1 84% Share repurchases (1.0)% CECL t
Slide 14: 2025 Outlook
2025 Outlook Baseline Macroeconomic Assumptions Additional Assumptions (excludes effects of qualitative overlays) U/E Rate GDP Growth Fed Funds Deposit Betas • Stable macroeconomic environment (YE’25) (FY’25) (YE’25) (FY’25) • No impact of late fee rule included, given the uncertainty regarding the
Slide 15: Footnotes
Footnotes All amounts and metrics included in this presentation are as of, or for the three months ended, December 31, 2024, unless otherwise stated. Delivering Consistent Returns Over Time a. Classification of Prime & Super Prime refers to VantageScore credit scores of 651 or higher for 2019-2024 a
Slide 16: Synchrony: Changing What's Possible
»/ synchrony CHANGING WHAT’S POSSIBLE
Slide 17: Notable Other Expense Items - 4Q
Notable Other Expense Items - 4Q The following table sets forth notable items incurred during 4Q'24 and 4Q'23 included in Total Other expense. $ in millions Quarter Ended December 31 2023 2024 Preparatory expenses related to Late Fee rule change $7 $8 Restructuring costs: Voluntary employee early re
Slide 18: Transaction related activity and other notable items - 2024
Transaction related activity and other notable items - 2024 The following table sets forth transaction related activity and other notable items incurred during 2024. $ in millions 1Q 2Q 3Q 4Q 2024 Transaction related activity Disposition of Pets Best: Total Other income - Pets Best gain on sale $1,0
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation* The following table sets forth the components of our Tier 1 Capital + Reserves ratio for the periods indicated below. $ in millions At December 31 2023 2024 Tier 1 Capital $ 13,334 $ 15,239 Less: CECL transition adjustment (1,146) (573) Tier 1 capital (CECL fully phased-in)
Slide 20: Non-GAAP Reconciliation (Continued)
Non-GAAP Reconciliation (Continued) The following table sets forth a reconciliation between GAAP results and non-GAAP adjusted results. At December 31 2023 2024 Tangible common equity ($ in millions): GAAP Total equity $13,903 $16,580 Less: Preferred stock (734) (1,222) Less: Goodwill (1,105) (1,274
Slide 21: Non-GAAP Reconciliation (Continued)
Non-GAAP Reconciliation (Continued) The following table sets forth a reconciliation between GAAP results and non-GAAP managed-basis results for 2009. $ in millions 21