Synchrony Financial · NYSE:SYF
Synchrony Financial — Q2 2016 Earnings Presentation
15 slides from Synchrony Financial's earnings presentation, Jul 22, 2016
Slide 1: 2Q'16 Financial Results
2Q’16 Financial Results July 22, 2016 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: 2Q'16 Highlights
3 2Q'16 Highlights Financial highlights • $489 million Net earnings, $0.58 diluted EPS • Purchase volume +9%, Loan receivables +11%, Net interest income +10% • Net charge-offs were 4.49% compared to 4.63% in the prior year 30+ delinquency at 3.79% compared to 3.53% in the prior year • Expenses +4%
Slide 4: Growth Metrics
4 Growth Metrics +9% Purchase volume $ in billions Loan receivables $ in billions Average active accounts In millions Interest and fees on loans $ in millions 2Q'15 2Q'16 $28.8 $31.5 $61.4 $68.3 $3,494 $3,166 65.5 60.9 +8% +10% +11% 2Q'15 2Q'16 2Q'15 2Q'16 2Q'15 2Q'16
Slide 5: Platform Results
5 Platform Results Retail Card Loan receivables, $ in billions $42.3 $46.7 2Q'15 2Q'16 Strong receivable growth across partner programs Interest and fees on loans up 11% driven primarily by receivable growth Payment Solutions Loan receivables, $ in billions $12.2 $14.0 2Q'15 2Q'16 Broad receiv
Slide 6: Financial Results Summary
6 Financial Results Summary earnings statement Second quarter 2016 highlights $ in millions, except ratios Total interest income $3,515 $3,177 $338 11% Total interest expense (303) (270) (33) (12)% Net interest income (NII) 3,212 2,907 305 10% Retailer share arrangements (RSA) (664) (621) (43) (7)%
Slide 7: Net Interest Income
7 Net Interest Income Second quarter 2016 highlights • Net interest income increased 10% compared to prior year driven by growth in receivables Interest and fees on loans increased 10% compared to prior year driven by average loan receivable growth • Net interest margin up 9bps. Liquid assets as
Slide 8: Asset Quality Metrics
8 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 $2,772 $2,416 $579 $2,536 $663 $2,209 $668 $2,171 $693 $633 $2,553 $697 4.05% 4.32% 4.53% 4.63% 4.02% 4.23% Allowance for loa
Slide 9: Other Expense
9 Other expense $ in millions Other Expense Employee costs $250 $301 $51 20% Professional fees 156 154 (2) (1)% Marketing/BD 108 107 (1) (1)% Information processing 74 81 7 9% Other 217 196 (21) (10)% Other expense $805 $839 $34 4% Efficiency 33.5% 31.9% (1.6)pts. $805 (a) “Other Expense” divided by
Slide 10: Funding, Capital and Liquidity
10 Funding, Capital and Liquidity (c) Liquid assets $13.7 $14.0 Undrawn securitization capacity 6.1 7.0 Total liquidity $19.8 $21.0 % of total assets 26.2% 25.5% Common equity Tier 1 $12.6 $12.3 Risk-weighted assets $68.2 $68.5 Liquidity $ in billions 2Q'16 $21.0 $19.8 2Q'15 Capital ratios 2Q'16, $
Slide 11: 2Q'16 Wrap Up
11 2Q'16 Wrap Up • Net earnings of $489 million … $0.58 earnings per diluted share • Broad based growth … Purchase volume +9%, Loan receivables +11%, Net interest income +10% • Renewed key partners … Ashley Homestore, American Society of Plastic Surgeons, Suzuki and VCA Animal Hospitals • Signed new
Slide 12: Synchrony Financial – Engage with us.
s{! synchrony FINANCIAL Engage with us.
Slide 13: Appendix
13 Appendix
Slide 14: Non-GAAP Reconciliations
14 Non-GAAP Reconciliations We present certain capital ratios. Our Basel III Tier 1 common ratio, calculated on a fully phased-in basis, is a preliminary estimate reflecting management’s interpretation of the final Basel III capital rules adopted in July 2013 by the Federal Reserve Board, which have
Slide 15: Non-GAAP Reconciliation
15 Non-GAAP Reconciliation The following table sets forth a reconciliation of each component of our capital ratios to the comparable GAAP component at June 30, 2016. COMMON EQUITY MEASURES GAAP Total common equity ......................................................................................