Synchrony Financial · NYSE:SYF
Synchrony Financial — Q3 2022 Earnings Presentation
17 slides from Synchrony Financial's earnings presentation, Oct 25, 2022
Slide 1: 3Q'22 Financial Results
3Q'22 FINANCIAL RESULTS October 25, 2022
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: 3Q'22 Financial Highlights
3Q'22 Financial Highlights SUMMARY FINANCIAL METRICS CAPITAL $1.47 15.52% 14.3% DILUTED EPS NET INTEREST MARGIN CET1 compared to $2.00 compared to 15.45% liquid assets of $16.6 billion, 16.4% of total assets $86.0 billion 3.00% $68.4 billion LOAN RECEIVABLES NET CHARGE-OFFS DEPOSITS compared to $76.
Slide 4: 3Q'22 Business Highlights
3Q'22 Business Highlights BUSINESS EXPANSION GROWTH METRICS CONSUMER PERFORMANCE Purchase Volume New Accounts(c) $ billions 6% (6)% $38.4 $44.6 Core(a) 16% Core(a) 5.7 5.8 2% Dual Card / Co-Brand(b) $13.7 $17.5 28% (d) Loan receivables Purchase Volume per Account $ billions 13% 8% Core(a) $75.5 $85.
Slide 5: Financial Results
Financial Results Summary earnings statement 3Q'22 Highlights B/(W) • $703 million Net earnings, $1.47 diluted EPS $ in millions, except per share statistics 3Q'22 3Q'21 $ % • Net interest income up 7% Total interest income $4,342 $3,898 $444 11 % – Interest and fees on loans up 10% driven primarily
Slide 6: 3Q'22 Platform Results
(a) 3Q'22 Platform Results Loan receivables $ in billions Home & Digital Diversified & Health & Lifestyle Auto Value Wellness 11% 17% 15% 17% 9% 3Q'21 3Q'22 V% 3Q'21 3Q'22 V% 3Q'21 3Q'22 V% 3Q'21 3Q'22 V% 3Q'21 3Q'22 V% Purchase $11.1 $12.3 11% $11.0 $12.9 18% $12.0 $14.5 20% $3.0 $3.5 16% $1.3 $1.4
Slide 7: Net Interest Income
Net Interest Income Net Interest Income 7% 3Q'22 Highlights $ in millions % of average interest-earning assets • Net interest income increased 7% – Interest and fees on loans up 10% driven by growth in average loan receivables, partially offset by impacts of portfolios sold during Q2’22 – Interest e
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 90+ days past due Allowance for credit losses $ in millions, % of period-end loan receivables $ in millions, % of period-end lo
Slide 9: Other Expense
Other Expense Other expense $ in millions 11% 3Q'22 Highlights • Total Other expense up 11% – Increase primarily driven by higher employee costs and other expense – Total other expense includes $27 million of additional marketing and growth reinvestment of 2Q Gain on Sale proceeds – Employee cost in
Slide 10: Funding, Capital and Liquidity
Funding, Capital and Liquidity (a) Funding sources Liquidity $ in billions $ in billions V$ $1.4 Unsecured $0.1 Securitization Deposits $8.1 V% Deposits 82% 82% 0 pts. Liquid assets $14.7 $16.6 Undrawn credit facilities $ 3.7 $ 3.7 Securitization 9% 8% (1) pts. Total liquidity $18.4 $20.3 Unsecured
Slide 11: 2022 Outlook
2022 Outlook (comments and trends in comparison to 2021, except where noted) Full Year 2022 Key Driver Previous Current Trends / Update Loan Receivables • Sustained strength in Purchase Volume Growth 10%+ ~12% • Underlying payment rate trends • Modestly lower in 2nd half driven by seasonal receivabl
Slide 12: 3Q'22 Key Business Themes
3Q'22 Key Business Themes Core business differentiators are driving strong & resilient SY financial results Diversified platforms, spend categories and customer base enhances the resiliency of our business Consumer remains strong, as reflected by broad-based spend, elevated paymentrates and gradual
Slide 13: Footnotes
Footnotes All amounts and metrics included in this presentation are as of, or for the three months ended, September 30, 2022, unless otherwise stated. References in this presentation to “HFS” are to Loan receivables held for sale 3Q'22 Business Highlights (b) Dual Card / Co-Brand metrics shown above
Slide 14: Synchrony: Changing What's Possible
»/" synchrony CHANGING WHAT’S POSSIBLE
Slide 15: 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 Q4’22 Q2’22 Q3’22 Estimated Total Gain on Sale from conveyance of HFS portfolios $120 $120 Marketing / Growth Investments: RSA* 10 Other Income - loyalty pr
Slide 16: 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 September 30 Total $ and accounts in millions 2021 2022 Loan receivables $76,388 $86,012 Less: Gap and BP Loan receivables (850) (124) Core Loan receivables $7
Slide 17: 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 September 30, Total 2021 2022 Tier 1 Capital $ 14,314 $ 13,012 Less: CECL transition adjustment (2,274) (1,719) Tier 1 capital (CE