Enviva Partners LP
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Energy : Oil, Gas & Consumable Fuels | Small Cap Growth
Company profile

Enviva Partners, LP is a supplier of utility-grade wood pellets to power generators. The Company procures wood fiber and processes it into utility-grade wood pellets and loads the finished wood pellets into railcars, trucks and barges that are transported to deep-water marine terminals, where they are received, stored and loaded onto oceangoing vessels for transport to the Company's principally Northern European customers. The Company's principal product, utility-grade wood pellets, is a traded energy commodity that is used as a substitute for coal in both dedicated and co-fired power generation and combined heat and power plants. It enables power generators to generate electricity. The Company's customers use its wood pellets as a substitute fuel for coal in dedicated biomass or co-fired coal power plants. Wood pellets are exported from the Company's deep-water marine terminal in Chesapeake, Virginia, from a deep-water marine terminal in Wilmington, North Carolina.

Closing Price
$45.85
Day's Change
-0.58 (-1.25%)
Bid
--
Ask
--
B/A Size
--
Day's High
46.51
Day's Low
45.60
Volume
(Light)
Volume:
53,811

10-day average volume:
69,828
53,811

Synchrony Reports Third Quarter Net Earnings of $313 Million or $0.52 Per Diluted Share

6:30 am ET October 20, 2020 (PR Newswire) Print

Synchrony Financial (NYSE: SYF) today announced third quarter 2020 earnings results amid the continuing Coronavirus (COVID-19) pandemic. Synchrony reported third quarter 2020 net earnings of $313 million, or $0.52 per diluted share; this included a restructuring charge of $89 million, or $67 million after tax, which equates to an EPS reduction of $0.11, and an increase in the provision for credit losses as a result of CECL implementation earlier this year of $66 million, or $50 million after tax, which equates to an EPS reduction of $0.09.

https://mma.prnewswire.com/media/804087/synchrony.jpg

Results included*:

-- Loan receivables decreased 6% to $78.5 billion, or 5% on a Core** basis

-- Interest and fees on loans decreased 22% to $3.8 billion, or 12% on a Core basis

-- Purchase volume decreased 6% to $36.0 billion, or flat on a Core basis

-- Average active accounts decreased 16% to 64.3 million, or 8% on a Core basis

-- Deposits decreased $2.5 billion, or 4%, to $63.5 billion

-- Renewed and extended a key relationship with Sam's Club

-- Successfully launched the new Venmo program

-- Added and extended Payment Solutions relationships with 4 Wheel Parts, Kane's Furniture, Levin Furniture and Mattress, SVP Sewing Brands LLC, and System Pavers

-- CareCredit successfully launched healthcare system partnerships with Lehigh Valley Health Network, St. Luke's University Health Network, and Cox Health and added and extended relationships with Blue River Pet Care and NVA

-- Returned $129 million in capital through common stock dividends

"During times of crisis and uncertainty, it is imperative to lead with the fundamental values and principles upon which an organization is built. At Synchrony, we continue to put our employees, partners, customers, shareholders and communities at the forefront of our decision making. Moving in an agile fashion, we quickly reallocated our resources to focus on the most critical priorities to sustain and drive business growth," said Margaret Keane, Chief Executive Officer, Synchrony Financial.

"In the third quarter, we successfully launched an innovative, digital-first program with Venmo, renewed and extended our relationship with Sam's Club, while also extending several programs and adding new partnerships. We've also deployed an array of enhanced digital solutions for our partners and cardholders, further strengthening our market position and meeting the evolving demands of the new environment," she added.

Business and Financial Results for the Third Quarter of 2020*

Earnings

-- Net interest income decreased $932 million, or 21%, to $3.5 billion, mainly due to the impact of COVID-19 and the Walmart consumer portfolio sale.

-- Retailer share arrangements decreased $117 million, or 12%, to $899 million, reflecting the impact of COVID-19 on program performance.

-- Provision for credit losses increased $191 million, or 19%, to $1.2 billion, mainly driven by the reserve increase for the projected impact of COVID-19 related losses and the prior year reserve reduction related to Walmart, partially offset by lower net charge-offs.

-- Other income increased $46 million, or 54%, to $131 million, largely driven by lower loyalty program costs which included the effects of the sale of the Walmart consumer portfolio.

-- Other expense was flat; the restructuring charge and expenses related to the COVID-19 response were offset by cost reductions from Walmart, lower purchase volume and accounts, and reductions in certain discretionary spend.

-- Net earnings totaled $313 million compared to $1.1 billion last year.

Balance Sheet

-- Period-end loan receivables decreased 6%, or 5% on a Core basis; purchase volume decreased 6%, or flat on a Core basis; and average active accounts decreased 16%, or 8% on a Core basis.

-- Deposits decreased $2.5 billion, or 4%, to $63.5 billion and comprised 80% of funding.

-- The Company's balance sheet remained strong with total liquidity (liquid assets and undrawn credit facilities) of $26.8 billion, or 28.0% of total assets.

-- The Company has elected to defer the regulatory capital effects of CECL for two years; the estimated Common Equity Tier 1 ratio was 15.8% compared to 14.5%, and the estimated Tier 1 Capital ratio was 16.7% compared to 14.5%, reflecting the Company's strong capital generation capabilities. The estimated Tier 1 Capital ratio also reflects the $750 million preferred stock issuance in November 2019.

Key Financial Metrics

-- Return on assets was 1.3% and return on equity was 10.3%.

-- Net interest margin was 13.80%.

-- Efficiency ratio was 39.7%.

Credit Quality

-- Loans 30+ days past due as a percentage of total period-end loan receivables were 2.67% compared to 4.47% last year; excluding the Walmart consumer portfolio, the rate was down approximately 175 basis points compared to last year.

-- Through September 30th, we had granted minimum payment forbearance to a cumulative total of approximately 2 million accounts, or $3.8 billion in account balances at the time of forbearance. As of September 30th, only 119,000 accounts or $227 million in account balances remained in forbearance.

-- Net charge-offs as a percentage of total average loan receivables were 4.42% compared to 5.35% last year; excluding the Walmart consumer portfolio, the rate decreased approximately 45 basis points compared to last year.

-- The allowance for credit losses as a percentage of total period-end loan receivables was 12.92%.

Sales Platforms

-- Retail Card period-end loan receivables decreased 6%, driven primarily by the impact from COVID-19, partially offset by growth in digital partners. Interest and fees on loans decreased 27%, purchase volume decreased 7%, and average active accounts decreased 19%, driven primarily by the sale of the Walmart consumer portfolio and the decline in loan receivables.

-- Payment Solutions period-end loan receivables decreased 5%; period-end loan receivables decreased 1% on a Core basis primarily due to the impact from COVID-19, partially offset by growth in Power. Interest and fees on loans decreased 10%, driven primarily by lower late fees. Purchase volume decreased 6% and average active accounts decreased 7%.

-- CareCredit period-end loan receivables decreased 7%, driven primarily by the impact from COVID-19. Interest and fees on loans decreased 8%, driven primarily by lower merchant discount as a result of the decline in purchase volume, which decreased 3%. Average active accounts decreased 8%.

* All comparisons are for the third quarter of 2020 compared to the third quarter of 2019, unless otherwise noted. ** Financial measures shown above on a Core basis are non-GAAP measures and exclude from both the prior year and the current year amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively. See non-GAAP reconciliation in the financial tables.

Corresponding Financial Tables and Information

No representation is made that the information in this news release is complete. Investors are encouraged to review the foregoing summary and discussion of Synchrony Financial's earnings and financial condition in conjunction with the detailed financial tables and information that follow and the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed February 13, 2020, and the Company's forthcoming Quarterly Report on Form 10-Q for the quarter ended September 30, 2020. The detailed financial tables and other information are also available on the Investor Relations page of the Company's website at www.investors.synchronyfinancial.com. This information is also furnished in a Current Report on Form 8-K filed with the SEC today.

Conference Call and Webcast Information

On Tuesday, October 20, 2020, at 8:30 a.m. Eastern Time, Margaret Keane, Chief Executive Officer, Brian Doubles, President, and Brian Wenzel Sr., Executive Vice President and Chief Financial Officer, will host a conference call to review the financial results and outlook for certain business drivers. The conference call can be accessed via an audio webcast through the Investor Relations page on the Synchrony Financial corporate website, www.investors.synchronyfinancial.com, under Events and Presentations. A replay will also be available on the website.

About Synchrony Financial

Synchrony (NYSE: SYF) is a premier consumer financial services company. We deliver a wide range of specialized financing programs, as well as innovative consumer banking products, across key industries including digital, retail, home, auto, travel, health and pet. Synchrony enables our partners to grow sales and loyalty with consumers. We are one of the largest issuers of private label credit cards in the United States; we also offer co-branded products, installment loans and consumer financing products for small- and medium-sized businesses, as well as healthcare providers.

Synchrony is changing what's possible through our digital capabilities, deep industry expertise, actionable data insights, frictionless customer experience and customized financing solutions.

For more information, visit www.synchrony.com and Twitter: @Synchrony.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains certain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "targets," "outlook," "estimates," "will," "should," "may" or words of similar meaning, but these words are not the exclusive means of identifying forward-looking statements. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include global political, economic, business, competitive, market, regulatory and other factors and risks, such as: the impact of macroeconomic conditions and whether industry trends we have identified develop as anticipated, including the future impacts of the novel coronavirus disease ("COVID-19") outbreak and measures taken in response thereto for which future developments are highly uncertain and difficult to predict; retaining existing partners and attracting new partners, concentration of our revenue in a small number of Retail Card partners, and promotion and support of our products by our partners; cyber-attacks or other security breaches; disruptions in the operations of our computer systems and data centers; the financial performance of our partners; the sufficiency of our allowance for credit losses and the accuracy of the assumptions or estimates used in preparing our financial statements, including those related to the new CECL accounting guidance; higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to grow our deposits in the future; damage to our reputation; our ability to securitize our loan receivables, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loan receivables, and lower payment rates on our securitized loan receivables; changes in market interest rates and the impact of any margin compression; effectiveness of our risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, our ability to manage our credit risk; our ability to offset increases in our costs in retailer share arrangements; competition in the consumer finance industry; our concentration in the U.S. consumer credit market; our ability to successfully develop and commercialize new or enhanced products and services; our ability to realize the value of acquisitions and strategic investments; reductions in interchange fees; fraudulent activity; failure of third parties to provide various services that are important to our operations; international risks and compliance and regulatory risks and costs associated with international operations; alleged infringement of intellectual property rights of others and our ability to protect our intellectual property; litigation and regulatory actions; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions and/or interpretations, and state sales tax rules and regulations; a material indemnification obligation to GE under the Tax Sharing and Separation Agreement with GE if we cause the split-off from GE or certain preliminary transactions to fail to qualify for tax-free treatment or in the case of certain significant transfers of our stock following the split-off; regulation, supervision, examination and enforcement of our business by governmental authorities, the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislative and regulatory developments and the impact of the Consumer Financial Protection Bureau's regulation of our business; impact of capital adequacy rules and liquidity requirements; restrictions that limit our ability to pay dividends and repurchase our common stock, and restrictions that limit the Synchrony Bank's ability to pay dividends to us; regulations relating to privacy, information security and data protection; use of third-party vendors and ongoing third-party business relationships; and failure to comply with anti-money laundering and anti-terrorism financing laws.

For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this news release and in our public filings, including under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed on February 13, 2020, and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, as filed on July 23, 2020. You should not consider any list of such factors to be an exhaustive statement of all the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

Non-GAAP Measures

The information provided herein includes measures we refer to as "tangible common equity" and certain "Core" financial measures that have been adjusted to exclude amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively, which are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please see the detailed financial tables and information that follow. For a statement regarding the usefulness of these measures to investors, please see the Company's Current Report on Form 8-K filed with the SEC today.

SYNCHRONY FINANCIAL
FINANCIAL SUMMARY
(unaudited, in millions, except per share statistics)
                                                                                       Quarter Ended                                                                      Nine Months Ended
                                                                                       Sep 30,     Jun 30,     Mar 31,     Dec 31,     Sep 30,     3Q'20 vs. 3Q'19        Sep 30,     Sep 30,     YTD'20 vs. YTD'19
                                                                                       2020        2020        2020        2019        2019                               2020        2019
EARNINGS
Net interest income                                                                    $3,457      $3,396      $3,890      $4,029      $4,389      $(932)     (21.2)%     $10,743     $12,770     $(2,027)   (15.9)%
Retailer share arrangements                                                            (899)       (773)       (926)       (1,029)     (1,016)     117        (11.5)%     (2,598)     (2,829)     231        (8.2)%
Provision for credit losses                                                            1,210       1,673       1,677       1,104       1,019       191        18.7%       4,560       3,076       1,484      48.2%
Net interest income, after retailer share arrangements and provision for credit losses 1,348       950         1,287       1,896       2,354       (1,006)    (42.7)%     3,585       6,865       (3,280)    (47.8)%
Other income                                                                           131         95          97          104         85          46         54.1%       323         267         56         21.0%
Other expense                                                                          1,067       986         1,002       1,079       1,064       3          0.3%        3,055       3,166       (111)      (3.5)%
Earnings before provision for income taxes                                             412         59          382         921         1,375       (963)      (70.0)%     853         3,966       (3,113)    (78.5)%
Provision for income taxes                                                             99          11          96          190         319         (220)      (69.0)%     206         950         (744)      (78.3)%
Net earnings                                                                           $313        $48         $286        $731        $1,056      $(743)     (70.4)%     $647        $3,016      $(2,369)   (78.5)%
Net earnings available to common stockholders                                          $303        $37         $275        $731        $1,056      $(753)     (71.3)%     $615        $3,016      $(2,401)   (79.6)%
COMMON SHARE STATISTICS
Basic EPS                                                                              $0.52       $0.06       $0.45       $1.15       $1.60       $(1.08)    (67.5)%     $1.04       $4.42       $(3.38)    (76.5)%
Diluted EPS                                                                            $0.52       $0.06       $0.45       $1.15       $1.60       $(1.08)    (67.5)%     $1.04       $4.40       $(3.36)    (76.4)%
Dividend declared per share                                                            $0.22       $0.22       $0.22       $0.22       $0.22       $-         - %         $0.66       $0.64       $0.02      3.1%
Common stock price                                                                     $26.17      $22.16      $16.09      $36.01      $34.09      $(7.92)    (23.2)%     $26.17      $34.09      $(7.92)    (23.2)%
Book value per share                                                                   $19.47      $19.13      $19.27      $23.31      $23.13      $(3.66)    (15.8)%     $19.47      $23.13      $(3.66)    (15.8)%
Tangible common equity per share(1)                                                    $15.75      $15.28      $15.35      $19.50      $19.68      $(3.93)    (20.0)%     $15.75      $19.68      $(3.93)    (20.0)%
Beginning common shares outstanding                                                    583.7       583.2       615.9       653.7       668.9       (85.2)     (12.7)%     615.9       718.8       (102.9)    (14.3)%
Issuance of common shares                                                              -           -           -           -           -           -          - %         -           -           -          - %
Stock-based compensation                                                               0.1         0.5         0.9         0.6         0.4         (0.3)      (75.0)%     1.5         2.5         (1.0)      (40.0)%
Shares repurchased                                                                     -           -           (33.6)      (38.4)      (15.6)      15.6       (100.0)%    (33.6)      (67.6)      34.0       (50.3)%
Ending common shares outstanding                                                       583.8       583.7       583.2       615.9       653.7       (69.9)     (10.7)%     583.8       653.7       (69.9)     (10.7)%
Weighted average common shares outstanding                                             583.8       583.7       604.9       633.7       658.3       (74.5)     (11.3)%     590.8       682.5       (91.7)     (13.4)%
Weighted average common shares outstanding (fully diluted)                             584.8       584.4       607.4       637.7       661.7       (76.9)     (11.6)%     592.2       685.6       (93.4)     (13.6)%
(1) Tangible Common Equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
SYNCHRONY FINANCIAL
SELECTED METRICS
(unaudited, $ in millions)
                                                                            Quarter Ended                                                                                                                       Nine Months Ended
                                                                            Sep 30,            Jun 30,            Mar 31,            Dec 31,            Sep 30,            3Q'20 vs. 3Q'19                      Sep 30,            Sep 30,            YTD'20 vs. YTD'19
                                                                            2020               2020               2020               2019               2019                                                    2020               2019
PERFORMANCE METRICS
Return on assets(1)                                                         1.3%               0.2%               1.1%               2.7%               3.9%                                 (2.6)%             0.9%               3.8%                                 (2.9)%
Return on equity(2)                                                         10.3%              1.6%               9.1%               19.0%              28.3%                                (18.0)%            7.0%               27.2%                                (20.2)%
Return on tangible common equity(3)                                         13.1%              1.6%               11.6%              23.0%              33.4%                                (20.3)%            8.8%               32.2%                                (23.4)%
Net interest margin(4)                                                      13.80%             13.53%             15.15%             15.01%             16.29%                               (2.49)%            14.17%             16.04%                               (1.87)%
Efficiency ratio(5)                                                         39.7%              36.3%              32.7%              34.8%              30.8%                                8.9%               36.1%              31.0%                                5.1%
Other expense as a % of average loan receivables, including held for sale   5.44%              5.04%              4.77%              5.01%              4.66%                                0.78%              5.08%              4.72%                                0.36%
Effective income tax rate                                                   24.0%              18.6%              25.1%              20.6%              23.2%                                0.8%               24.2%              24.0%                                0.2%
CREDIT QUALITY METRICS
Net charge-offs as a % of average loan receivables, including held for sale 4.42%              5.35%              5.36%              5.15%              5.35%                                (0.93)%            5.05%              5.80%                                (0.75)%
30+ days past due as a % of period-end loan receivables(6)                  2.67%              3.13%              4.24%              4.44%              4.47%                                (1.80)%            2.67%              4.47%                                (1.80)%
90+ days past due as a % of period-end loan receivables(6)                  1.24%              1.77%              2.10%              2.15%              2.07%                                (0.83)%            1.24%              2.07%                                (0.83)%
Net charge-offs                                                             $866               $1,046             $1,125             $1,109             $1,221             $(355)            (29.1)%            $3,037             $3,896             $(859)            (22.0)%
Loan receivables delinquent over 30 days(6)                                 $2,100             $2,453             $3,500             $3,874             $3,723             $(1,623)          (43.6)%            $2,100             $3,723             $(1,623)          (43.6)%
Loan receivables delinquent over 90 days(6)                                 $973               $1,384             $1,735             $1,877             $1,723             $(750)            (43.5)%            $973               $1,723             $(750)            (43.5)%
Allowance for credit losses (period-end)                                    $10,146            $9,802             $9,175             $5,602             $5,607             $4,539            81.0%              $10,146            $5,607             $4,539            81.0%
Allowance coverage ratio(7)                                                 12.92%             12.52%             11.13%             6.42%              6.74%                                6.18%              12.92%             6.74%                                6.18%
BUSINESS METRICS
Purchase volume(8)(9)                                                       $36,013            $31,155            $32,042            $40,212            $38,395            $(2,382)          (6.2)%             $99,210            $109,199           $(9,989)          (9.1)%
Period-end loan receivables                                                 $78,521            $78,313            $82,469            $87,215            $83,207            $(4,686)          (5.6)%             $78,521            $83,207            $(4,686)          (5.6)%
Credit cards                                                                $75,204            $75,353            $79,832            $84,606            $79,788            $(4,584)          (5.7)%             $75,204            $79,788            $(4,584)          (5.7)%
Consumer installment loans                                                  $1,987             $1,779             $1,390             $1,347             $2,050             $(63)             (3.1)%             $1,987             $2,050             $(63)             (3.1)%
Commercial credit products                                                  $1,270             $1,140             $1,203             $1,223             $1,317             $(47)             (3.6)%             $1,270             $1,317             $(47)             (3.6)%
Other                                                                       $60                $41                $44                $39                $52                $8                15.4%              $60                $52                $8                15.4%
Average loan receivables, including held for sale                           $78,005            $78,697            $84,428            $85,376            $90,556            $(12,551)         (13.9)%            $80,368            $89,752            $(9,384)          (10.5)%
Period-end active accounts (in thousands)(9)(10)                            64,800             63,430             68,849             75,471             77,094             (12,294)          (15.9)%            64,800             77,094             (12,294)          (15.9)%
Average active accounts (in thousands)(9)(10)                               64,270             64,836             72,078             73,734             76,695             (12,425)          (16.2)%            67,246             76,653             (9,407)           (12.3)%
LIQUIDITY
Liquid assets
Cash and equivalents                                                        $13,552            $16,344            $13,704            $12,147            $11,461            $2,091            18.2%              $13,552            $11,461            $2,091            18.2%
Total liquid assets                                                         $21,402            $22,352            $19,225            $17,322            $15,201            $6,201            40.8%              $21,402            $15,201            $6,201            40.8%
Undrawn credit facilities
Undrawn credit facilities                                                   $5,400             $5,650             $5,600             $6,050             $6,500             $(1,100)          (16.9)%            $5,400             $6,500             $(1,100)          (16.9)%
Total liquid assets and undrawn credit facilities                           $26,802            $28,002            $24,825            $23,372            $21,701            $5,101            23.5%              $26,802            $21,701            $5,101            23.5%
Liquid assets % of total assets                                             22.37%             23.15%             19.61%             16.52%             14.35%                               8.02%              22.37%             14.35%                               8.02%
Liquid assets including undrawn credit facilities % of total assets         28.02%             29.00%             25.32%             22.30%             20.48%                               7.54%              28.02%             20.48%                               7.54%
(1) Return on assets represents net earnings as a percentage of average total assets.
(2) Return on equity represents net earnings as a percentage of average total equity.
(3) Return on tangible common equity represents net earnings available to common stockholders as a percentage of average tangible common equity. Tangible common equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(4) Net interest margin represents net interest income divided by average interest-earning assets.
(5) Efficiency ratio represents (i) other expense, divided by (ii) net interest income, plus other income, less retailer share arrangements.
(6) Based on customer statement-end balances extrapolated to the respective period-end date.
(7) Allowance coverage ratio represents allowance for credit losses divided by total period-end loan receivables.
(8) Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.
(9) Includes activity and accounts associated with loan receivables held for sale.
(10) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.
SYNCHRONY FINANCIAL
STATEMENTS OF EARNINGS
(unaudited, $ in millions)
                                                                                       Quarter Ended                                                  Nine Months Ended
                                                                                       Sep 30,  Jun 30,  Mar 31,  Dec 31,  Sep 30,  3Q'20 vs. 3Q'19   Sep 30,  Sep 30,  YTD'20 vs. YTD'19
                                                                                       2020     2020     2020     2019     2019                       2020     2019
Interest income:
Interest and fees on loans                                                             $3,821   $3,808   $4,340   $4,492   $4,890   $(1,069) (21.9)%  $11,969  $14,213  $(2,244) (15.8)%
Interest on cash and debt securities                                                   16       22       67       93       91       (75)     (82.4)%  105      292      (187)    (64.0)%
Total interest income                                                                  3,837    3,830    4,407    4,585    4,981    (1,144)  (23.0)%  12,074   14,505   (2,431)  (16.8)%
Interest expense:
Interest on deposits                                                                   245      293      356      383      411      (166)    (40.4)%  894      1,183    (289)    (24.4)%
Interest on borrowings of consolidated securitization entities                         53       59       73       80       88       (35)     (39.8)%  185      278      (93)     (33.5)%
Interest on senior unsecured notes                                                     82       82       88       93       93       (11)     (11.8)%  252      274      (22)     (8.0)%
Total interest expense                                                                 380      434      517      556      592      (212)    (35.8)%  1,331    1,735    (404)    (23.3)%
Net interest income                                                                    3,457    3,396    3,890    4,029    4,389    (932)    (21.2)%  10,743   12,770   (2,027)  (15.9)%
Retailer share arrangements                                                            (899)    (773)    (926)    (1,029)  (1,016)  117      (11.5)%  (2,598)  (2,829)  231      (8.2)%
Provision for credit losses                                                            1,210    1,673    1,677    1,104    1,019    191      18.7%    4,560    3,076    1,484    48.2%
Net interest income, after retailer share arrangements and provision for credit losses 1,348    950      1,287    1,896    2,354    (1,006)  (42.7)%  3,585    6,865    (3,280)  (47.8)%
Other income:
Interchange revenue                                                                    172      134      161      192      197      (25)     (12.7)%  467      556      (89)     (16.0)%
Debt cancellation fees                                                                 68       69       69       64       64       4        6.3%     206      201      5        2.5%
Loyalty programs                                                                       (155)    (134)    (158)    (181)    (203)    48       (23.6)%  (447)    (562)    115      (20.5)%
Other                                                                                  46       26       25       29       27       19       70.4%    97       72       25       34.7%
Total other income                                                                     131      95       97       104      85       46       54.1%    323      267      56       21.0%
Other expense:
Employee costs                                                                         382      327      324      385      359      23       6.4%     1,033    1,070    (37)     (3.5)%
Professional fees                                                                      187      189      197      199      205      (18)     (8.8)%   573      668      (95)     (14.2)%
Marketing and business development                                                     107      91       111      152      139      (32)     (23.0)%  309      397      (88)     (22.2)%
Information processing                                                                 125      116      123      122      127      (2)      (1.6)%   364      363      1        0.3%
Other                                                                                  266      263      247      221      234      32       13.7%    776      668      108      16.2%
Total other expense                                                                    1,067    986      1,002    1,079    1,064    3        0.3%     3,055    3,166    (111)    (3.5)%
Earnings before provision for income taxes                                             412      59       382      921      1,375    (963)    (70.0)%  853      3,966    (3,113)  (78.5)%
Provision for income taxes                                                             99       11       96       190      319      (220)    (69.0)%  206      950      (744)    (78.3)%
Net earnings                                                                           $313     $48      $286     $731     $1,056   $(743)   (70.4)%  $647     $3,016   $(2,369) (78.5)%
Net earnings available to common stockholders                                          $303     $37      $275     $731     $1,056   $(753)   (71.3)%  $615     $3,016   $(2,401) (79.6)%
SYNCHRONY FINANCIAL
STATEMENTS OF FINANCIAL POSITION
(unaudited, $ in millions)
                                                         Quarter Ended
                                                         Sep 30,                              Jun 30,  Mar 31,  Dec 31,                              Sep 30,                              Sep 30, 2020 vs.
                                                         2020                                 2020     2020     2019                                 2019                                 Sep 30, 2019
Assets
Cash and equivalents                                     $13,552                              $16,344  $13,704  $12,147                              $11,461                              $2,091                              18.2%
Debt securities                                          8,432                                6,623    6,146    5,911                                4,584                                3,848                               83.9%
Loan receivables:
Unsecuritized loans held for investment                  52,613                               52,629   54,765   58,398                               56,220                               (3,607)                             (6.4)%
Restricted loans of consolidated securitization entities 25,908                               25,684   27,704   28,817                               26,987                               (1,079)                             (4.0)%
Total loan receivables                                   78,521                               78,313   82,469   87,215                               83,207                               (4,686)                             (5.6)%
Less: Allowance for credit losses(1)                     (10,146)                             (9,802)  (9,175)  (5,602)                              (5,607)                              (4,539)                             81.0%
Loan receivables, net                                    68,375                               68,511   73,294   81,613                               77,600                               (9,225)                             (11.9)%
Loan receivables held for sale                           4                                    4        5        725                                  8,182                                (8,178)                             (100.0)%
Goodwill                                                 1,078                                1,078    1,078    1,078                                1,078                                -                                   - %
Intangible assets, net                                   1,091                                1,166    1,208    1,265                                1,177                                (86)                                (7.3)%
Other assets                                             3,126                                2,818    2,603    2,087                                1,861                                1,265                               68.0%
Total assets                                             $95,658                              $96,544  $98,038  $104,826                             $105,943                             $(10,285)                           (9.7)%
Liabilities and Equity
Deposits:
Interest-bearing deposit accounts                        $63,195                              $63,857  $64,302  $64,877                              $65,677                              $(2,482)                            (3.8)%
Non-interest-bearing deposit accounts                    298                                  291      313      277                                  295                                  3                                   1.0%
Total deposits                                           63,493                               64,148   64,615   65,154                               65,972                               (2,479)                             (3.8)%
Borrowings:
Borrowings of consolidated securitization entities       7,809                                8,109    9,291    10,412                               10,912                               (3,103)                             (28.4)%
Senior unsecured notes                                   7,962                                7,960    7,957    9,454                                9,451                                (1,489)                             (15.8)%
Total borrowings                                         15,771                               16,069   17,248   19,866                               20,363                               (4,592)                             (22.6)%
Accrued expenses and other liabilities                   4,295                                4,428    4,205    4,718                                4,488                                (193)                               (4.3)%
Total liabilities                                        83,559                               84,645   86,068   89,738                               90,823                               (7,264)                             (8.0)%
Equity:
Preferred stock                                          734                                  734      734      734                                  -                                    734                                 NM
Common stock                                             1                                    1        1        1                                    1                                    -                                   - %
Additional paid-in capital                               9,552                                9,532    9,523    9,537                                9,520                                32                                  0.3%
Retained earnings                                        10,024                               9,852    9,960    12,117                               11,533                               (1,509)                             (13.1)%
Accumulated other comprehensive income (loss)            (31)                                 (37)     (49)     (58)                                 (44)                                 13                                  (29.5)%
Treasury stock                                           (8,181)                              (8,183)  (8,199)  (7,243)                              (5,890)                              (2,291)                             38.9%
Total equity                                             12,099                               11,899   11,970   15,088                               15,120                               (3,021)                             (20.0)%
Total liabilities and equity                             $95,658                              $96,544  $98,038  $104,826                             $105,943                             $(10,285)                           (9.7)%
(1) Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses ("CECL") that measures the allowance for credit losses based on management's best estimate of expected credit losses for the life of our loan receivables. Prior periods presented reflect measurement of the allowance based on management's estimate of probable incurred credit losses in accordance with the previous accounting guidance effective for those periods.
SYNCHRONY FINANCIAL
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
(unaudited, $ in millions)
                                                   Quarter Ended
                                                   Sep 30, 2020                                    Jun 30, 2020                        Mar 31, 2020                   Dec 31, 2019                 Sep 30, 2019
                                                                    Interest         Average                     Interest   Average               Interest   Average            Interest  Average            Interest  Average
                                                   Average          Income/          Yield/        Average       Income/    Yield/     Average    Income/    Yield/   Average   Income/   Yield/   Average   Income/   Yield/
                                                   Balance          Expense          Rate          Balance       Expense    Rate       Balance    Expense    Rate     Balance   Expense   Rate     Balance   Expense   Rate
Assets
Interest-earning assets:
Interest-earning cash and equivalents              $13,664          $4               0.12%         $15,413       $3         0.08%      $12,902    $42        1.31%    $16,269   $68       1.66%    $10,947   $59       2.14%
Securities available for sale                      7,984            12               0.60%         6,804         19         1.12%      5,954      25         1.69%    4,828     25        2.05%    5,389     32        2.36%
Loan receivables, including held for sale:
Credit cards                                       74,798           3,752            19.96%        75,942        3,740      19.81%     81,716     4,272      21.03%   81,960    4,409     21.34%   87,156    4,807     21.88%
Consumer installment loans                         1,892            46               9.67%         1,546         37         9.63%      1,432      35         9.83%    2,058     48        9.25%    2,022     48        9.42%
Commercial credit products                         1,238            22               7.07%         1,150         30         10.49%     1,243      33         10.68%   1,311     34        10.29%   1,329     35        10.45%
Other                                              77               1                NM            59            1          NM         37         -          - %      47        1         NM       49        -         - %
Total loan receivables, including held for sale    78,005           3,821            19.49%        78,697        3,808      19.46%     84,428     4,340      20.67%   85,376    4,492     20.87%   90,556    4,890     21.42%
Total interest-earning assets                      99,653           3,837            15.32%        100,914       3,830      15.26%     103,284    4,407      17.16%   106,473   4,585     17.08%   106,892   4,981     18.49%
Non-interest-earning assets:
Cash and due from banks                            1,489                                           1,486                               1,450                          1,326                        1,374
Allowance for credit losses                        (9,823)                                         (9,221)                             (8,708)                        (5,593)                      (5,773)
Other assets                                       5,021                                           4,779                               4,696                          3,872                        3,920
Total non-interest-earning assets                  (3,313)                                         (2,956)                             (2,562)                        (395)                        (479)
Total assets                                       $96,340                                         $97,958                             $100,722                       $106,078                     $106,413
Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts                  $63,569          $245             1.53%         $64,298       $293       1.83%      $64,366    $356       2.22%    $65,380   $383      2.32%    $65,615   $411      2.49%
Borrowings of consolidated securitization entities 8,057            53               2.62%         8,863         59         2.68%      9,986      73         2.94%    10,831    80        2.93%    11,770    88        2.97%
Senior unsecured notes                             7,960            82               4.10%         7,958         82         4.14%      8,807      88         4.02%    9,452     93        3.90%    9,347     93        3.95%
Total interest-bearing liabilities                 79,586           380              1.90%         81,119        434        2.15%      83,159     517        2.50%    85,663    556       2.58%    86,732    592       2.71%
Non-interest-bearing liabilities
Non-interest-bearing deposit accounts              307                                             309                                 299                            281                          283
Other liabilities                                  4,308                                           4,349                               4,672                          4,906                        4,570
Total non-interest-bearing liabilities             4,615                                           4,658                               4,971                          5,187                        4,853
Total liabilities                                  84,201                                          85,777                              88,130                         90,850                       91,585
Equity
Total equity                                       12,139                                          12,181                              12,592                         15,228                       14,828
Total liabilities and equity                       $96,340                                         $97,958                             $100,722                       $106,078                     $106,413
Net interest income                                                 $3,457                                       $3,396                           $3,890                        $4,029                       $4,389
Interest rate spread(1)                                                              13.42%                                 13.11%                           14.66%                       14.50%                       15.78%
Net interest margin(2)                                                               13.80%                                 13.53%                           15.15%                       15.01%                       16.29%
(1) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average interest-earning assets.
SYNCHRONY FINANCIAL
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
(unaudited, $ in millions)
                                                   Nine Months Ended                                 Nine Months Ended
                                                   Sep 30, 2020                                      Sep 30, 2019
                                                                    Interest         Average                       Interest      Average
                                                   Average          Income/          Yield/          Average       Income/       Yield/
                                                   Balance          Expense          Rate            Balance       Expense       Rate
Assets
Interest-earning assets:
Interest-earning cash and equivalents              $13,992          $49              0.47%           $10,989       $190          2.31%
Securities available for sale                      6,918            56               1.08%           5,679         102           2.40%
Loan receivables, including held for sale:
Credit cards                                       77,476           11,764           20.28%          86,471        13,975        21.61%
Consumer installment loans                         1,624            118              9.71%           1,931         134           9.28%
Commercial credit products                         1,210            85               9.38%           1,304         103           10.56%
Other                                              58               2                4.61%           46            1             2.91%
Total loan receivables, including held for sale    80,368           11,969           19.89%          89,752        14,213        21.17%
Total interest-earning assets                      101,278          12,074           15.92%          106,420       14,505        18.22%
Non-interest-earning assets:
Cash and due from banks                            1,475                                             1,327
Allowance for credit losses                        (9,253)                                           (6,006)
Other assets                                       4,833                                             3,801
Total non-interest-earning assets                  (2,945)                                           (878)
Total assets                                       $98,333                                           $105,542
Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts                  $64,075          $894             1.86%           $64,546       $1,183        2.45%
Borrowings of consolidated securitization entities 8,966            185              2.76%           12,315        278           3.02%
                                                                    -
Senior unsecured notes                             8,241            252              4.08%           9,262         274           3.96%
                                                                                                                   0
Total interest-bearing liabilities                 81,282           1,331            2.19%           86,123        1,735         2.69%
Non-interest-bearing liabilities
Non-interest-bearing deposit accounts              305                                               280
Other liabilities                                  4,443                                             4,327
Total non-interest-bearing liabilities             4,748                                             4,607
Total liabilities                                  86,030                                            90,730
Equity
Total equity                                       12,303                                            14,812
Total liabilities and equity                       $98,333                                           $105,542
Net interest income                                                 $10,743                                        $12,770
Interest rate spread(1)                                                              13.73%                                      15.53%
Net interest margin(2)                                                               14.17%                                      16.04%
(1) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average interest-earning assets.
SYNCHRONY FINANCIAL
BALANCE SHEET STATISTICS
(unaudited, $ in millions, except per share statistics)
                                                        Quarter Ended
                                                        Sep 30,                  Jun 30,                  Mar 31,                  Dec 31,                  Sep 30,                  Sep 30, 2020 vs.
                                                        2020                     2020                     2020                     2019                     2019                     Sep 30, 2019
BALANCE SHEET STATISTICS
Total common equity                                     $11,365                  $11,165                  $11,236                  $14,354                  $15,120                  $(3,755)                (24.8)%
Total common equity as a % of total assets              11.88%                   11.56%                   11.46%                   13.69%                   14.27%                                           (2.39)%
Tangible assets                                         $93,489                  $94,300                  $95,752                  $102,483                 $103,688                 $(10,199)               (9.8)%
Tangible common equity(1)                               $9,196                   $8,921                   $8,950                   $12,011                  $12,865                  $(3,669)                (28.5)%
Tangible common equity as a % of tangible assets(1)     9.84%                    9.46%                    9.35%                    11.72%                   12.41%                                           (2.57)%
Tangible common equity per share(1)                     $15.75                   $15.28                   $15.35                   $19.50                   $19.68                   $(3.93)                 (20.0)%
REGULATORY CAPITAL RATIOS(2)(3)
                                                        Basel III - CECL Transition                                                Basel III
Total risk-based capital ratio(4)                       18.1%                    17.6%                    16.5%                    16.3%                    15.8%
Tier 1 risk-based capital ratio(5)                      16.7%                    16.3%                    15.2%                    15.0%                    14.5%
Tier 1 leverage ratio(6)                                13.3%                    12.7%                    12.3%                    12.6%                    12.6%
Common equity Tier 1 capital ratio                      15.8%                    15.3%                    14.3%                    14.1%                    14.5%
(1) Tangible common equity ("TCE") is a non-GAAP measure. We believe TCE is a more meaningful measure of the net asset value of the Company to investors. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(2) Regulatory capital ratios at September 30, 2020 are preliminary and therefore subject to change.
(3) Capital ratios starting March 31, 2020 reflect election to delay for two years an estimate of CECL's effect on regulatory capital in accordance with the interim final rule issued by U.S. banking agencies in March 2020.
(4) Total risk-based capital ratio is the ratio of total risk-based capital divided by risk-weighted assets.
(5) Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided by risk-weighted assets.
(6) Tier 1 leverage ratio is the ratio of Tier 1 capital divided by total average assets, after certain adjustments. Tier 1 leverage ratios are based upon the use of daily averages for all periods presented.
SYNCHRONY FINANCIAL
PLATFORM RESULTS
(unaudited, $ in millions)
                                                  Quarter Ended                                                             Nine Months Ended
                                                  Sep 30,    Jun 30,    Mar 31,    Dec 31,    Sep 30,   3Q'20 vs. 3Q'19     Sep 30,   Sep 30,   YTD'20 vs. YTD'19
                                                  2020       2020       2020       2019       2019                          2020      2019
RETAIL CARD
Purchase volume(1)(2)                             $27,374    $24,380    $24,008    $30,968    $29,282   $(1,908)  (6.5)%    $75,762   $83,472   $(7,710) (9.2)%
Period-end loan receivables                       $49,595    $49,967    $52,390    $56,387    $52,697   $(3,102)  (5.9)%    $49,595   $52,697   $(3,102) (5.9)%
Average loan receivables, including held for sale $49,503    $50,238    $53,820    $54,505    $60,660   $(11,157) (18.4)%   $51,181   $60,494   $(9,313) (15.4)%
Average active accounts (in thousands)(2)(3)      47,065     46,970     53,018     54,662     58,082    (11,017)  (19.0)%   49,197    58,156    (8,959)  (15.4)%
Interest and fees on loans                        $2,619     $2,640     $3,037     $3,143     $3,570    $(951)    (26.6)%   $8,296    $10,414   $(2,118) (20.3)%
Other income                                      $84        $56        $59        $77        $65       $19       29.2%     $199      $200      $(1)     (0.5)%
Retailer share arrangements                       $(877)     $(752)     $(904)     $(988)     $(998)    $121      (12.1)%   $(2,533)  $(2,774)  $241     (8.7)%
PAYMENT SOLUTIONS
Purchase volume(1)(2)                             $5,901     $4,823     $5,375     $6,402     $6,281    $(380)    (6.0)%    $16,099   $17,478   $(1,379) (7.9)%
Period-end loan receivables                       $19,550    $19,119    $19,973    $20,528    $20,478   $(928)    (4.5)%    $19,550   $20,478   $(928)   (4.5)%
Average loan receivables, including held for sale $19,247    $19,065    $20,344    $20,701    $20,051   $(804)    (4.0)%    $19,551   $19,654   $(103)   (0.5)%
Average active accounts (in thousands)(2)(3)      11,497     11,900     12,681     12,713     12,384    (887)     (7.2)%    12,031    12,354    (323)    (2.6)%
Interest and fees on loans                        $650       $632       $706       $737       $721      $(71)     (9.8)%    $1,988    $2,092    $(104)   (5.0)%
Other income                                      $13        $14        $13        $4         $(1)      $14       NM        $40       $11       $29      NM
Retailer share arrangements                       $(20)      $(18)      $(18)      $(37)      $(15)     $(5)      33.3%     $(56)     $(48)     $(8)     16.7%
CARECREDIT
Purchase volume(1)                                $2,738     $1,952     $2,659     $2,842     $2,832    $(94)     (3.3)%    $7,349    $8,249    $(900)   (10.9)%
Period-end loan receivables                       $9,376     $9,227     $10,106    $10,300    $10,032   $(656)    (6.5)%    $9,376    $10,032   $(656)   (6.5)%
Average loan receivables, including held for sale $9,255     $9,394     $10,264    $10,170    $9,845    $(590)    (6.0)%    $9,636    $9,604    $32      0.3%
Average active accounts (in thousands)(3)         5,708      5,966      6,379      6,359      6,229     (521)     (8.4)%    6,018     6,143     (125)    (2.0)%
Interest and fees on loans                        $552       $536       $597       $612       $599      $(47)     (7.8)%    $1,685    $1,707    $(22)    (1.3)%
Other income                                      $34        $25        $25        $23        $21       $13       61.9%     $84       $56       $28      50.0%
Retailer share arrangements                       $(2)       $(3)       $(4)       $(4)       $(3)      $1        (33.3)%   $(9)      $(7)      $(2)     28.6%
TOTAL SYF
Purchase volume(1)(2)                             $36,013    $31,155    $32,042    $40,212    $38,395   $(2,382)  (6.2)%    $99,210   $109,199  $(9,989) (9.1)%
Period-end loan receivables                       $78,521    $78,313    $82,469    $87,215    $83,207   $(4,686)  (5.6)%    $78,521   $83,207   $(4,686) (5.6)%
Average loan receivables, including held for sale $78,005    $78,697    $84,428    $85,376    $90,556   $(12,551) (13.9)%   $80,368   $89,752   $(9,384) (10.5)%
Average active accounts (in thousands)(2)(3)      64,270     64,836     72,078     73,734     76,695    (12,425)  (16.2)%   67,246    76,653    (9,407)  (12.3)%
Interest and fees on loans                        $3,821     $3,808     $4,340     $4,492     $4,890    $(1,069)  (21.9)%   $11,969   $14,213   $(2,244) (15.8)%
Other income                                      $131       $95        $97        $104       $85       $46       54.1%     $323      $267      $56      21.0%
Retailer share arrangements                       $(899)     $(773)     $(926)     $(1,029)   $(1,016)  $117      (11.5)%   $(2,598)  $(2,829)  $231     (8.2)%
(1) Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.
(2) Includes activity and balances associated with loan receivables held for sale.
(3) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.
SYNCHRONY FINANCIAL
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES(1)
(unaudited, $ in millions, except per share statistics)
                                                                                                              Quarter Ended
                                                                                                              Sep 30,                 Jun 30,                 Mar 31,                 Dec 31,                 Sep 30,
                                                                                                              2020                    2020                    2020                    2019                    2019
COMMON EQUITY AND REGULATORY CAPITAL MEASURES(2)
GAAP Total equity                                                                                             $12,099                 $11,899                 $11,970                 $15,088                 $15,120
Less: Preferred stock                                                                                         (734)                   (734)                   (734)                   (734)                   -
Less: Goodwill                                                                                                (1,078)                 (1,078)                 (1,078)                 (1,078)                 (1,078)
Less: Intangible assets, net                                                                                  (1,091)                 (1,166)                 (1,208)                 (1,265)                 (1,177)
Tangible common equity                                                                                        $9,196                  $8,921                  $8,950                  $12,011                 $12,865
Add: CECL transition amount                                                                                   2,656                   2,570                   2,417                   -                       -
Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss) 305                     302                     304                     319                     290
Common equity Tier 1                                                                                          $12,157                 $11,793                 $11,671                 $12,330                 $13,155
Preferred  stock                                                                                              734                     734                     734                     734                     -
Tier 1 capital                                                                                                $12,891                 $12,527                 $12,405                 $13,064                 $13,155
Add: Allowance for credit losses includible in risk-based capital                                             1,034                   1,031                   1,082                   1,147                   1,190
Total Risk-based capital                                                                                      $13,925                 $13,558                 $13,487                 $14,211                 $14,345
ASSET MEASURES(2)
Total average assets                                                                                          $96,340                 $97,958                 $100,722                $106,078                $106,413
Adjustments for:
Add: CECL transition amount                                                                                   2,656                   2,570                   2,417                   -                       -
Disallowed goodwill and other disallowed intangible assets                                                    (1,906)                 (1,980)                 (2,010)                 (2,059)                 (1,975)
(net of related deferred tax liabilities) and other
Total assets for leverage purposes                                                                            $97,090                 $98,548                 $101,129                $104,019                $104,438
Risk-weighted assets                                                                                          $76,990                 $77,048                 $81,639                 $87,302                 $90,772
CECL FULLY PHASED-IN CAPITAL MEASURES
Tier 1 capital                                                                                                $12,891                 $12,527                 $12,405                 $13,064                 $13,155
Less: CECL transition adjustment                                                                              (2,656)                 (2,570)                 (2,417)                 -                       -
Tier 1 capital (CECL fully phased-in)                                                                         $10,235                 $9,957                  $9,988                  $13,064                 $13,155
Add: Allowance for credit losses                                                                              10,146                  9,802                   9,175                   5,602                   5,607
Tier 1 capital (CECL fully phased-in) + Reserves for credit losses                                            $20,381                 $19,759                 $19,163                 $18,666                 $18,762
Risk-weighted assets                                                                                          $76,990                 $77,048                 $81,639                 $87,302                 $90,772
Less: CECL transition adjustment                                                                              (2,447)                 (2,361)                 (2,204)                 -                       -
Risk-weighted assets (CECL fully phased-in)                                                                   $74,543                 $74,687                 $79,435                 $87,302                 $90,772
TANGIBLE COMMON EQUITY PER SHARE
GAAP book value per share                                                                                     $19.47                  $19.13                  $19.27                  $23.31                  $23.13
Less: Goodwill                                                                                                (1.85)                  (1.85)                  (1.85)                  (1.75)                  (1.65)
Less: Intangible assets, net                                                                                  (1.87)                  (2.00)                  (2.07)                  (2.06)                  (1.80)
Tangible common equity per share                                                                              $15.75                  $15.28                  $15.35                  $19.50                  $19.68
(1) Regulatory measures at September 30, 2020 are presented on an estimated basis.
(2) Capital ratios starting March 31, 2020 reflect election to delay for two years an estimate of CECL's effect on regulatory capital in accordance with the interim final rule issued by U.S. banking agencies in March 2020
SYNCHRONY FINANCIAL
RECONCILIATION OF NON-GAAP MEASURES (Continued)
(unaudited, $ in millions, except per share statistics)
                                                                  Quarter Ended
                                                                  Sep 30,                Jun 30,                Mar 31,                Dec 31,                Sep 30,
                                                                  2020                   2020                   2020                   2019                   2019
ALLOWANCE FOR LOAN LOSSES(1)
Allowance for credit losses                                       $10,146                $9,802                 $9,175                 N/A                    N/A
Less: Impact from CECL(2)                                         (3,671)                (3,605)                (3,122)                -                      -
Allowance for loan losses(1)                                      $6,475                 $6,197                 $6,053                 $5,602                 $5,607
ALLOWANCE FOR LOAN LOSSES AS A % OF PERIOD-END LOAN RECEIVABLES
Allowance for credit losses as a % of period-end loan receivables 12.92%                 12.52%                 11.13%                 N/A                    N/A
Less: Impact from CECL(2)                                         (4.67)%                (4.61)%                (3.79)%                - %                    - %
Allowance for loan losses as a % of period-end loan receivables   8.25%                  7.91%                  7.34%                  6.42%                  6.74%
CORE PURCHASE VOLUME
Purchase Volume                                                   $36,013                $31,155                $32,042                $40,212                $38,395
Less: Walmart and Yamaha Purchase volume                          -                      -                      -                      (267)                  (2,381)
Core Purchase volume                                              $36,013                $31,155                $32,042                $39,945                $36,014
CORE LOAN RECEIVABLES
Loan receivables                                                  $78,521                $78,313                $82,469                $87,215                $83,207
Less: Walmart and Yamaha Loan receivables                         -                      -                      -                      (3)                    (872)
Core Loan receivables                                             $78,521                $78,313                $82,469                $87,212                $82,335
Retail Card Loan receivables                                      $49,595                $49,967                $52,390                $56,387                $52,697
Less: Walmart Loan receivables                                    -                      -                      -                      -                      (112)
Core Loan receivables                                             $49,595                $49,967                $52,390                $56,387                $52,585
Payment Solutions Loan receivables                                $19,550                $19,119                $19,973                $20,528                $20,478
Less: Yamaha Loan receivables                                     -                      -                      -                      (3)                    (760)
Core Loan receivables                                             $19,550                $19,119                $19,973                $20,525                $19,718
CORE AVERAGE ACTIVE ACCOUNTS (in thousands)
Average active accounts (in thousands)                            64,270                 64,836                 72,078                 73,734                 76,695
Less: Walmart and Yamaha average Active accounts (in thousands)   -                      -                      -                      (1,777)                (7,001)
Core Average active accounts (in thousands)                       64,270                 64,836                 72,078                 71,957                 69,694
CORE INTEREST AND FEES ON LOANS
Interest and fees on loans                                        $3,821                 $3,808                 $4,340                 $4,492                 $4,890
Less: Walmart and Yamaha Interest and fees on loans               -                      -                      -                      (69)                   (531)
Core Interest and fees on loans                                   $3,821                 $3,808                 $4,340                 $4,423                 $4,359
(1) Beginning in 1Q'20, allowance for loan losses is calculated based upon accounting standards no longer effective, and as such is a Non-GAAP measure.
(2) Impact from CECL reflects the additional allowance for credit losses recorded in accordance with ASC 2016-13, as compared to the allowance for credit losses required had the prior accounting guidance been applied.

Investor RelationsGreg Ketron(203) 585-6291

Media RelationsSue Bishop (203) 585-2802

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