Synchrony Financial · NYSE:SYF
Synchrony Financial — Q1 2021 Earnings Presentation
18 slides from Synchrony Financial's earnings presentation, Apr 27, 2021
Slide 1: 1Q'21 Financial Results
1Q’21 FINANCIAL RESULTS APRIL 27, 2021
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'21 Financial Highlights
1Q’21 Financial Highlights SUMMARY FINANCIAL METRICS CAPITAL $1.73 13.98% 17.4% DILUTED EPS NET INTEREST MARGIN CET1 compared to $0.45 compared to 15.15% liquid assets of $22.6 billion, 23.6% of total assets $76.9 billion 3.62% $62.7 billion LOAN RECEIVABLES NET CHARGE-OFFS DEPOSITS compared to $82.
Slide 4: 1Q'21 Business Highlights
1Q’21 Business Highlights BUSINESS EXPANSION CONSUMER PERFORMANCE DIGITAL ACCELERATION New Accounts (a) 4.9 5.0 3% ~60% DIGITAL APPLICATIONS* *Percentage of Total Applications 1Q'20 1Q'21 Purchase Volume per Account (b) 50% ONLINE SALES* $445 $524 18% *Percentage of Retail Card Total 1Q'20 1Q'21 ~65
Slide 5: CareCredit – Leading Franchise, Positioned for Growth
CareCredit – Leading Franchise, Positioned for Growth Capitalize on Changing Healthcare and Pet Landscape, Increase Focus on Wellness Market Core Growth Expansion ‘Vet to Pet’ Overview (a) ~$405B Continue to unlock growth opportunities in Enhance product offerings to grow core Continue integration o
Slide 6: CareCredit – At a Glance
CareCredit – At a Glance ENGAGEMENT DEPTH GROWTH 92% (a) >40 $9.3 billion CUSTOMER SATISFACTION NUMBER OF SPECIALTIES LOAN RECEIVABLES up from 78% in 2009 expanded into 13 new up 44% from 1Q’14 specialties since 2018 77 (a) 13 ~250,000 NET PROMOTER SCORE HEALTH SYSTEMS PROVIDER LOCATIONS over 80% hi
Slide 7: Financial Results Summary
Financial Results Summary earnings statement $ in millions, except per share statistics 1Q’21 1Q’20 $ B/(W) % 1Q’21 Highlights Total interest income $3,742 $4,407 $(665) (15)% • $1.0 billion Net earnings, $1.73 diluted EPS Total interest expense 303 517 214 41% • Net interest income down 12% Net int
Slide 8: Growth Metrics
Growth Metrics Purchase volume 8% Loan receivables (7)% $ in billions $ in billions $82.5 $76.9 $32.0 $34.7 $44.0 $94.0 1Q'20 1Q'21 1Q'20 1Q'21 Dual Card / Dual Card / Co-Brand $12.3 $13.0 6% Co-Brand $19.9 $17.9 (10)% Average active accounts (8)% Interest and fees on loans (14)% in millions $ in mi
Slide 9: Platform Results
(a) Platform Results Retail Card (9)% Loan receivables, $ in billions • Receivable reduction primarily due 1Q’21 to 2020 shutdowns and higher 1Q'20 1Q’20 V% $52.4 payment rates. Broad-based Purchase volume $23.9 $26.5 11% strength in purchase volume. Accounts 53.0 49.1 (7)% 1Q'21 $47.9 Accounts • In
Slide 10: Net Interest Income
Net Interest Income Net Interest Income 1Q’21 Highlights $ in millions (12)% % of average interest-earning assets • Net interest income decreased 12% − Driven by lower finance charges and late fees $3,890 • Net interest margin (NIM) down 117 bps $3,439 − Loan receivables yield: (111) bps o Receivabl
Slide 11: 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 $1,344 $1,331 $3,957 $3,874 $1,221 $3,625 $3,723 $1,125 $3,500 $1,109 $1,046 $866 4.92% $2,453 $2,514 4.43% 4.47% 4.44% 4.24% $
Slide 12: Other Expense
Other Expense Other Expense $ in millions (7)% 1Q’21 Highlights $1,002 $932 Other expense down 7% • Decrease primarily due to lower operational losses, lower Marketing and Business Development costs partially offset by Employee costs Efficiency ratio 36.1% vs. 32.7% prior year • Increase driven by l
Slide 13: Funding, Capital and Liquidity
Funding, Capital and Liquidity Funding Sources Liquidity(a) $ in billions $ in billions $28.0 $81.9 $24.8 $77.9 V$ Unsecured $8.0 $8.0 $0 Securitization $9.3 $7.2 $(2.1) Deposits $64.6 $62.7 $(1.9) 1Q'20 1Q'21 V% 1Q'20 1Q'21 Deposits 79% 81% +2 pts. Liquid assets $19.2 $22.6 Undrawn credit facilitie
Slide 14: 2021 Framework on Key Drivers
2021 Framework on Key Drivers (comments and trends in comparison to 2020, except where noted) • 1H’21: 1Q stronger than anticipated, 2Q higher comparing against 2020 Covid restrictions Purchase Volume • 2H’21: improving growth trends as pandemic impact moderates and macroeconomic growth accelerates
Slide 15: 1Q'21 Key Business Themes
1Q’21 Key Business Themes Payment rates remain Growth accelerates a headwind • Purchase volume of $35 billion, +8% • Loan receivables of $77 billion down (7)% • Originated 5 million new accounts, +3% • NIM of 13.98% down (117) bps • Leverage digital capabilities Continue CareCredit Credit outperform
Slide 16: Footnotes
Footnotes 1Q’21 Business Highlights | slide 4: (a) New Accounts represent accounts that were approved in the respective period, in millions. (b) Purchase Volume per Account is calculated as the Purchase volume divided by Average active accounts, in $. (c) Average Balance per Account is calculated as
Slide 17: Synchrony – Changing What's Possible
»/ synchrony CHANGING WHAT’S POSSIBLE
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation* The following table sets forth the components of our Tier 1 Capital + Reserve ratio for the periods indicated below. At March 31, Total 2020 2021 Tier 1 capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,4