Synchrony Financial · NYSE:SYF
Synchrony Financial — Q1 2024 Earnings Presentation
19 slides from Synchrony Financial's earnings presentation, Apr 24, 2024
Slide 1: 1Q'24 Financial Results
1Q'24 FINANCIAL RESULTS April 24, 2024
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: 1Q'24 Financial Highlights
1Q'24 Financial Highlights SUMMARY FINANCIAL METRICS CAPITAL $3.14 14.55% 12.6% DILUTED EPS NET INTEREST MARGIN CET1 compared to $1.35 compared to 15.22% liquid assets of $21.9 billion, Excluding the Pets Best gain on sale, 18.1% of total assets 1Q’24 Adjusted Diluted EPS of $1.18,* which includes a
Slide 4: Delivering Consistent Returns Over Time
Delivering Consistent Returns Over Time Credit COVID-19 Normalization Pandemic CARD Act Took Effect RAR* GFC NCOs/ALR(b) RSA/ALR(b) (c) Prime & Super Prime/EOP(a)(b) 63% 72% 72% 74% 74% 72% 78% 73% RSA/Purchase Volume(b) 1.09% 1.83% 2.53% 2.41% 2.23% 2.58% 2.73% 1.98% LONG-TERM ~2.5+% ROA TARGETS: ~
Slide 5: 1Q'24 Business Highlights
1Q'24 Business Highlights BUSINESS EXPANSION GROWTH METRICS CONSUMER PERFORMANCE Purchase volume New accounts(c) $ billions 2% (8)% Dual Card / $17.0 $18.0 6% Co-Brand (a) (d) Loan receivables Purchase volume per account $ billions 12% (1)% Dual Card / $22.1 $26.3 19% Co-Brand (a) (b) Average active
Slide 6: Financial Results
Financial Results Summary earnings statement 1Q'24 Highlights B/(W) Net earnings of $1.3 billion or $3.14 per Diluted $ in millions, except per share statistics 1Q'24 1Q'23 $ % Share; excluding the Pets Best gain on sale, Adjusted Net earnings of $491 million or $1.18 per Total interest income $5,56
Slide 7: 1Q'24 Platform Results
(a) 1Q'24 Platform Results Loan receivables Home & Digital Diversified & Health & Lifestyle Auto Value Wellness 10% 11% 10% 20% 11% 1Q'23 1Q'24 V% 1Q'23 1Q'24 V% 1Q'23 1Q'24 V% 1Q'23 1Q'24 V% 1Q'23 1Q'24 V% Purchase $10.9 $10.5 (3)% $12.3 $12.6 3% $13.4 $14.0 4% $3.7 $4.0 8% $1.3 $1.2 (4)% volume Ac
Slide 8: Net Revenue
Net Revenue Net revenue 1Q'24 Highlights $ in millions 50% Includes Pets Best gain on sale of $1,069 • Net revenue increased $1.6 billion, or 50% $4,798 – Net interest income increased $354 million, or 9%, $3,199 driven primarily by higher interest & fees on loans $65 – Loan receivables yield of 21.
Slide 9: Other Expense
Other Expense Other Expense $ in millions 8% 1Q'24 Highlights • Total Other expense up 8% – Increase primarily driven by growth related items, technology investments, and includes transaction related activity and other notable expenses totaling $10 million (see appendix for details) – Employee cost
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)(b) 90+ days past due Allowance for credit losses $ in millions, % of period-end loan receivables $ in millions, % of period
Slide 11: Delinquency Trends
Delinquency Trends 30+ days past due Basis point change versus prior year % of period-end loan receivables (left axis); rate change versus prior year in basis points (right axis) +200 bps 5.0% +103 +110 +112 +109 +93 bps 00bps bps 2.5% 4.40% 4.74% 4.74% 3.81% 3.84% 0.0% (200) bps 1Q'20 2Q'20 3Q'20 4
Slide 12: Funding, Capital and Liquidity
Funding, Capital and Liquidity Funding sources CET1% Walk $ in billions % 1Q'23 CET1% 13.0% 8% Net Earnings 2.5% 8% Unsecured Securitization Risk Weighted Asset changes (1.3)% Common & Preferred dividends (0.5)% Deposits 84% Share repurchases (1.1)% CECL transition provisions (0.5)% Other activity,
Slide 13: 2024 Business Trends
2024 Business Trends • Receivables growth consistent with expectations; payment rate slightly lower than expectations and purchase volume below our expectations, especially in larger ticket items 1Q’24 • Net interest income growth higher than expectations due to lower than expected payment rate and
Slide 14: Footnotes
Footnotes All amounts and metrics included in this presentation are as of, or for the three months ended, March 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 2019-2023 and
Slide 15: Synchrony: Changing What's Possible
»/" synchrony CHANGING WHAT’S POSSIBLE
Slide 16: Transaction related activity and other notable items
Transaction related activity and other notable items The following table sets forth transaction related activity and notable other expense items incurred during the quarter. $ in millions Quarter Ended March 31, 2024 Transaction related activity Disposition of Pets Best: Other income - Pets Best gai
Slide 17: 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 March 31 Total 2023 2024 Tier 1 Capital $ 12,724 $ 14,207 Less: CECL transition adjustment (1,146) (573) Tier 1 capital (CECL fully phased-i
Slide 18: Non-GAAP Reconciliation (Continued)
Non-GAAP Reconciliation (Continued) The following table sets forth a reconciliation between GAAP results and non-GAAP adjusted results. $ in millions Quarter Ended March 31, 2024 Net earnings: Net earnings $1,293 Less: Pets Best gain on sale after-tax (802) Adjusted Net earnings $491 Preferred divid
Slide 19: 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 ad