Slide 1: 4Q'22 Financial Results
4Q'22 FINANCIAL RESULTS January 23, 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: 2022 Year in Review
2022 Year in Review GROW & DIVERSIFY DELIVER GENERATE WIN NEW PROGRAMS, BEST-IN-CLASS STRONG FINANCIAL PARTNERS PRODUCTS & CUSTOMER RESULTS MARKETS EXPERIENCES +25% $3.0 billion NEW ACCOUNT VISITS to Synchrony Marketplace NET EARNINGS 30+ NEW PARTNER DEALS +80% API TRANSACTIONS 3.1% ROA DRIVING VALU
Slide 4: Delivering Consistent Returns over Time
Delivering Consistent Returns over Time Credit 12% Normalization COVID-19 CARD Act Took Effect Pandemic 10% RAR(a) 8% GFC 6% RSA/ALR (c) 4% NCOs/ALR (c) 2% -% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Prime & Super Prime/EOP(b)(c) 63% 72% 72% 74% 74% 72% 78% 74% RSA / Pur
Slide 5: 4Q'22 Financial Highlights
4Q'22 Financial Highlights SUMMARY FINANCIAL METRICS CAPITAL $1.26 15.58% 12.8% DILUTED EPS NET INTEREST MARGIN CET1 compared to $1.48 compared to 15.77% liquid assets of $14.2 billion, 13.6% of total assets $92.5 billion 3.48% $71.7 billion LOAN RECEIVABLES NET CHARGE-OFFS DEPOSITS compared to $80.
Slide 6: 4Q'22 Business Highlights
4Q'22 Business Highlights BUSINESS EXPANSION GROWTH METRICS CONSUMER PERFORMANCE Purchase Volume New Accounts(c) $ billions 2% (13)% $43.0 $47.9 Core(a) 11% Core(a) 6.6 6.4 (3)% Dual Card / Co-Brand(b) $16.0 $19.3 21% (d) Loan receivables Purchase Volume per Account $ billions 15% 3% Core(a) $80.5 $
Slide 7: Financial Results
Financial Results Summary earnings statement 4Q'22 Highlights B/(W) $577 million Net earnings, $1.26 diluted EPS $ in millions, except per share statistics 4Q'22 4Q'21 $ % • Net interest income up 7% Total interest income $4,708 $4,053 $655 16 % – Interest and fees on loans up 13% driven primarily b
Slide 8: 4Q'22 Platform Results
(a) 4Q'22 Platform Results Loan receivables $ in billions Home & Digital Diversified & Health & Lifestyle Auto Value Wellness 12% 17% 16% 19% 9% 4Q'21 4Q'22 V% 4Q'21 4Q'22 V% 4Q'21 4Q'22 V% 4Q'21 4Q'22 V% 4Q'21 4Q'22 V% Purchase $10.9 $11.9 9% $13.5 $14.8 10% $1.5 $1.5 2% $14.2 $16.3 15% $3.1 $3.5 1
Slide 9: Net Interest Income
Net Interest Income Net Interest Income 4Q'22 Highlights $ in millions 7% • Net interest income increased 7% % of average interest-earning assets – Interest and fees on loans up 13% driven by growth in average loan receivables, partially offset by impacts of portfolios sold during 2Q’22 – Interest e
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 90+ days past due Allowance for credit losses $ in millions, % of period-end loan receivables $ in millions, % of period-end lo
Slide 11: Other Expense
Other Expense Other expense $ in millions 3% 4Q'22 Highlights • Total other expense up 3% – Increase primarily driven by higher employee costs, technology investments and higher transaction volume, partially offset by $75 million of asset impairments and certain incremental marketing investments rec
Slide 12: Funding, Capital and Liquidity
Funding, Capital and Liquidity (a) Funding sources Liquidity $ in billions $ in billions V$ $0.8 Unsecured $(1.1) Securitization Deposits $9.4 V% Deposits 81% 84% 3 pts. Liquid assets $13.0 $14.2 Undrawn credit facilities $ 2.7 $ 3.0 Securitization 10% 7% (3) pts. Total liquidity $15.7 $17.2 Unsecur
Slide 13: 2023 Outlook
2023 Outlook Key Driver Full Year Framework FY 2023 • Driven by continued Purchase Volume growth across all sales platforms Loan Receivables Growth • Payment rate moderation expected to continue, remaining above pre-pandemic 8 – 10% levels during 2023 • Follow normal seasonal trends adjusted for the
Slide 14: Footnotes
Footnotes All amounts and metrics included in this presentation are as of, or for the three months ended, December 31, 2022, unless otherwise stated. References in this presentation to “HFS” are to Loan receivables held for sale Delivering Resilient Returns through Cycles (b) Classification of Prime
Slide 15: Synchrony: Changing What's Possible
»/" synchrony CHANGING WHAT’S POSSIBLE
Slide 16: Gain on Sale Re-Investment
Gain on Sale Re-Investment The following table sets forth the details of impacts of the gain on sale $ in millions, except per share statistics 2Q’22 3Q’22 4Q’22 Total Gain on Sale from conveyance of HFS portfolios $120 $120 Marketing / Growth Investments: RSA* 10 Other Income - loyalty program cost
Slide 17: 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 December 31, Total $ and accounts in millions 2021 2022 Loan receivables $80,740 $92,470 Less: Gap and BP Loan receivables (278) (98) Core Loan receivables $80
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. $ in millions At December 31, Total 2021 2022 Tier 1 Capital $ 14,003 $ 12,493 Less: CECL transition adjustment (2,292) (1,719) Tier 1 capital (CECL
Slide 19: Non-GAAP Reconciliation Continued
Non-GAAP Reconciliation Continued The following table sets forth the components of our Tangible common equity $ in millions At December 31, Total 2021 2022 GAAP Total Equity $13,655 $12,873 Less: Preferred Stock (734) (734) Less: Goodwill (1,105) (1,105) Less: Intangible assets, net (1,168) (1,287)
Slide 20: 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 Year ended December 31, 2009 Net charge-offs as a % of average loan receivables, including held for sale: GAAP 11.26 % Securitization adjus