Synchrony Financial · NYSE:SYF
Synchrony Financial — Q1 2017 Earnings Presentation
15 slides from Synchrony Financial's earnings presentation, Apr 28, 2017
Slide 1: 1Q'17 Financial Results
1Q'17 Financial Results April 28, 2017 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: 1Q'17 Highlights
3 1Q'17 Highlights • $499 million Net Earnings, $0.61 diluted EPS • Strong growth metrics ‒ Loan Receivables up 11% ‒ Net Interest Income up 12% ‒ Purchase Volume up 7% ‒ Average Active Accounts up 5% • Net Charge-Offs of 5.33% compared to 4.74% in the prior year • Provision for Loan Losses up 45%;
Slide 4: Growth Metrics
4 Growth Metrics 1Q'16 1Q'17 1Q'16 1Q'17 1Q'16 1Q'17 1Q'16 1Q'17 +7% Purchase Volume $ in billions Loan Receivables $ in billions Average Active Accounts in millions Interest and Fees on Loans $ in millions $27.0 $28.9 $65.8 $73.3 $3,877 $3,498 69.6 66.1 +5% +11% +11%
Slide 5: Platform Results
5 Platform Results Retail Card Loan Receivables, $ in billions $45.1 $49.9 1Q'16 1Q'17 • Strong Loan Receivables growth across partner programs • Interest and Fees on Loans up 10% driven by Loan Receivables growth Payment Solutions Loan Receivables, $ in billions $13.4 $15.3 1Q'16 1Q'17 • Broad-base
Slide 6: Financial Results Summary
6 Financial Results Summary Earnings Statement 1Q’17 Highlights $ in millions, except ratios Total Interest Income $3,913 $3,520 $393 11% Total Interest Expense 326 311 (15) (5)% Net Interest Income (NII) 3,587 3,209 378 12% Retailer Share Arrangements (RSA) (684) (670) (14) (2)% NII, after RSA 2,90
Slide 7: Net Interest Income
7 Net Interest Income 1Q’17 Highlights • Net Interest Income increased 12% compared to prior year driven by growth in Loan Receivables ‒ Interest and Fees on Loans increased 11% compared to prior year driven by average Loan Receivables growth • Net Interest Margin up 34bps. ‒ Loan Receivables mix as
Slide 8: Asset Quality Metrics
8 Asset Quality Metrics $668 $693 $633 $697 Allowance for Loan Losses $ in millions, % of period-end Loan Receivables 5.59% $3,255 5.38% $3,302 5.31% $3,371 5.12% $3,497 $780 5.50% $3,620 $747 5.70% $3,894 $1,056 1.81% $933 1.52% $1,102 1.73% $1,273 1.86% $1,212 1.84% $1,143 1.67% $765 $1,334 1.89%
Slide 9: Other Expense
9 Other Expense Employee Costs $280 $325 $45 16% Professional Fees 146 151 5 3% Marketing/BD 94 94 - -% Information Processing 82 90 8 10% Other 198 248 50 25% Other Expense $800 $908 $108 14% Efficiency 30.4% 30.3% (0.1)pts. $800 (a) “Other Expense” divided by sum of “NII, after RSA” plus “Other In
Slide 10: Funding, Capital and Liquidity
10 Funding, Capital and Liquidity (b) Liquid Assets $14.9 $16.2 Undrawn Credit Facilities 7.3 5.6 Total Liquidity $22.2 $21.8 Basel III (fully phased-in) 17.5% 17.7% Liquidity % of Total Assets, $ in billions 1Q'17 24.4% 27.2% 1Q'16 Capital Ratios Common Equity Tier 1 % - Basel III transitional 1Q’1
Slide 11: 1Q'17 Wrap Up
11 1Q'17 Wrap Up • Net Earnings of $499 million or $0.61 Earnings Per Diluted Share • Strong growth metrics ‒ Loan Receivables up 11% ‒ Net Interest Income up 12% ‒ Purchase Volume up 7% ‒ Average Active Accounts up 5% • Renewed key partners: Belk, QVC and Midas • Acquired Citi Health Card portfolio
Slide 12: Synchrony Financial: Engage with us.
s{! synchrony FINANCIAL Engage with us.
Slide 13: Appendix
13 Appendix
Slide 14: Non-GAAP Reconciliation
14 Non-GAAP Reconciliation 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 March 31, 2017. COMMON EQUITY MEASURES GAAP Total common equity .....................................................................................