Synchrony Financial · NYSE:SYF
Synchrony Financial — Q2 2023 Earnings Presentation
15 slides from Synchrony Financial's earnings presentation, Jul 18, 2023
Slide 1: 2Q'23 Financial Results
2Q'23 FINANCIAL RESULTS July 18, 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: 2Q'23 Financial Highlights
2Q'23 Financial Highlights SUMMARY FINANCIAL METRICS CAPITAL $1.32 14.94% 12.3% DILUTED EPS NET INTEREST MARGIN CET1 compared to $1.60 compared to 15.60% liquid assets of $16.4 billion, 15.1% of total assets $94.8 billion 4.75% $75.8 billion LOAN RECEIVABLES NET CHARGE-OFFS DEPOSITS compared to $82.
Slide 4: 2Q'23 Business Highlights
2Q'23 Business Highlights BUSINESS EXPANSION GROWTH METRICS CONSUMER PERFORMANCE Purchase Volume New Accounts(c) $ billions -% (1)% Core(a) 44.6 47.3 6% -% Core(a) 5.9 5.9 Dual Card / Co-Brand(b) $17.0 $19.4 14% (d) Loan receivables Purchase Volume per Account $ billions 15% (1)% Core(a) $82.5 $94.7
Slide 5: Financial Results
Financial Results Summary earnings statement 2Q'23 Highlights B/(W) $569 million Net earnings, $1.32 diluted EPS $ in millions, except per share statistics 2Q'23 2Q'22 $ % • Net interest income up 8% Total interest income $5,021 $4,074 $947 23 % – Interest and fees on loans up 19% driven primarily b
Slide 6: 2Q'23 Platform Results
(a) 2Q'23 Platform Results Loan receivables $ in billions Home & Digital Diversified & Health & Lifestyle Auto Value Wellness 10% 18% 14% 22% 13% 2Q'22 2Q'23 V% 2Q'22 2Q'23 V% 2Q'22 2Q'23 V% 2Q'22 2Q'23 V% 2Q'22 2Q'23 V% Purchase $12.9 $12.9 -% $12.5 $13.5 8% $1.4 $1.6 10% $14.4 $15.4 7% $3.4 $4.0 1
Slide 7: Net Interest Income
Net Interest Income 2Q'23 Highlights Net Interest Income 8% $ in millions • Net interest income increased 8% % of average interest-earning assets – Interest and fees on loans up 19% driven primarily by growth in average loan receivables and higher benchmark rates, partially offset by impacts of port
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 (a) 90+ days past due Allowance for credit losses $ in millions, % of period-end loan receivables $ in millions, % of period-en
Slide 9: Other Expense
Other Expense Other expense $ in millions 8% 2Q'23 Highlights • Total other expense up 8% – Increase primarily driven by growth related items as well as operational losses and technology investments – Increases were partially offset by additional marketing and site strategy actions in 2Q’22 related
Slide 10: Funding, Capital and Liquidity
Funding, Capital and Liquidity (a) Funding sources Liquidity $ in billions $ in billions V$ $2.2 Unsecured $(0.2) Securitization Deposits $11.1 V% Deposits 84% 84% 0 pts. Liquid assets $15.2 $16.4 Undrawn credit facilities $ 3.7 $ 3.0 Securitization 8% 6% (2) pts. Total liquidity $18.9 $19.4 Unsecur
Slide 11: 2023 Outlook
2023 Outlook Full Year 2023 Key Driver Original Current Trends / Update • 1H driven by payment rate moderation and Purchase Volume growth Loan Receivables Growth 8 – 10% 10+% • Expect payment rate moderation to continue, but remain above pre- pandemic levels through year-end • 1H NIM influenced by:
Slide 12: Footnotes
Footnotes All amounts and metrics included in this presentation are as of, or for the three months ended, June 30, 2023, unless otherwise stated. 2Q'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’22
Slide 13: Synchrony: Changing What's Possible
»/" synchrony CHANGING WHAT’S POSSIBLE
Slide 14: 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 June 30 Total $ and accounts in millions 2022 2023 Loan receivables $ 82,674 $ 94,801 Less: Gap and BP Loan receivables (174) (67) Core Loan receivables $ 82,5
Slide 15: 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 June 30 Total 2022 2023 Tier 1 Capital $ 13,280 $ 12,462 Less: CECL transition adjustment (1,719) (1,146) Tier 1 capital (CECL ful