Synchrony Financial - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
8-K - 8-K - Synchrony Financial	a8-k1q16earnings.htm
EX-99.1 - EXHIBIT 99.1 - Synchrony Financial	earningsrelease1q16.htm
EX-99.4 - EXHIBIT 99.4 - Synchrony Financial	non-gaapmeasures33116.htm
EX-99.3 - EXHIBIT 99.3 - Synchrony Financial	a1q16earningspresentatio.htm

Exhibit 99.2



SYNCHRONY FINANCIAL
FINANCIAL SUMMARY
(unaudited, in millions, except per share statistics)
	Quarter Ended
	Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Mar 31, 2015			1Q'16 vs. 1Q'15
EARNINGS
Net interest income	$	3,209		$	3,208		$	3,103		$	2,907		$	2,875		$	334		11.6	%
Retailer share arrangements	(670		)	(734		)	(723		)	(621		)	(660		)	(10		)	1.5	%
Net interest income, after retailer share arrangements	2,539			2,474			2,380			2,286			2,215			324			14.6	%
Provision for loan losses	903			823			702			740			687			216			31.4	%
Net interest income, after retailer share arrangements and provision for loan losses	1,636			1,651			1,678			1,546			1,528			108			7.1	%
Other income	92			87			84			120			101			(9		)	(8.9	)%
Other expense	800			870			843			805			746			54			7.2	%
Earnings before provision for income taxes	928			868			919			861			883			45			5.1	%
Provision for income taxes	346			321			345			320			331			15			4.5	%
Net earnings	$	582		$	547		$	574		$	541		$	552		$	30		5.4	%
Net earnings attributable to common stockholders	$	582		$	547		$	574		$	541		$	552		$	30		5.4	%

COMMON SHARE STATISTICS
Basic EPS	$	0.70		$	0.66		$	0.69		$	0.65		$	0.66		$	0.04		6.1	%
Diluted EPS	$	0.70		$	0.65		$	0.69		$	0.65		$	0.66		$	0.04		6.1	%
Common stock price	$	28.66		$	30.41		$	31.30		$	32.93		$	30.35		$	(1.69	)	(5.6	)%
Book value per share	$	15.84		$	15.12		$	14.58		$	13.89		$	13.24		$	2.60		19.6	%
Tangible common equity per share⁽¹⁾	$	13.86		$	13.14		$	12.67		$	12.06		$	11.43		$	2.43		21.3	%

Beginning common shares outstanding	833.8			833.8			833.8			833.8			833.8			—			—	%
Issuance of common shares	—			—			—			—			—			—			—	%
Shares repurchased	—			—			—			—			—			—			—	%
Ending common shares outstanding	833.8			833.8			833.8			833.8			833.8			—			—	%

Weighted average common shares outstanding	833.8			833.8			833.8			833.8			833.8			—			—	%
Weighted average common shares outstanding (fully diluted)	835.5			835.8			835.8			835.4			835.0			0.5			0.1	%

(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⁽¹⁾
(unaudited, $ in millions, except account data)
	Quarter Ended
	Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Mar 31, 2015			1Q'16 vs. 1Q'15
PERFORMANCE METRICS
Return on assets⁽²⁾	2.8		%	2.7		%	2.9		%	2.9		%	3.0		%			(0.2	)%
Return on equity⁽³⁾	18.1		%	17.5		%	19.2		%	19.2		%	20.8		%			(2.7	)%
Return on tangible common equity⁽⁴⁾	20.8		%	20.1		%	22.0		%	22.2		%	24.1		%			(3.3	)%
Net interest margin⁽⁵⁾	15.76		%	15.73		%	15.97		%	15.77		%	15.79		%			(0.03	)%
Efficiency ratio⁽⁶⁾	30.4		%	34.0		%	34.2		%	33.5		%	32.2		%			(1.8	)%
Other expense as a % of average loan receivables, including held for sale	4.82		%	5.28		%	5.35		%	5.37		%	5.06		%			(0.24	)%
Effective income tax rate	37.3		%	37.0		%	37.5		%	37.2		%	37.5		%			(0.2	)%

CREDIT QUALITY METRICS
Net charge-offs as a % of average loan receivables, including held for sale	4.70		%	4.23		%	4.02		%	4.63		%	4.53		%			0.17	%
30+ days past due as a % of period-end loan receivables⁽⁷⁾	3.85		%	4.06		%	4.02		%	3.53		%	3.79		%			0.06	%
90+ days past due as a % of period-end loan receivables⁽⁷⁾	1.84		%	1.86		%	1.73		%	1.52		%	1.81		%			0.03	%
Net charge-offs	$	780		$	697		$	633		$	693		$	668		$	112	16.8	%
Loan receivables delinquent over 30 days⁽⁷⁾	$	2,538		$	2,772		$	2,553		$	2,171		$	2,209		$	329	14.9	%
Loan receivables delinquent over 90 days⁽⁷⁾	$	1,212		$	1,273		$	1,102		$	933		$	1,056		$	156	14.8	%

Allowance for loan losses (period-end)	$	3,620		$	3,497		$	3,371		$	3,302		$	3,255		$	365	11.2	%
Allowance coverage ratio⁽⁸⁾	5.50		%	5.12		%	5.31		%	5.38		%	5.59		%			(0.09	)%

BUSINESS METRICS
Purchase volume⁽⁹⁾	$	26,977		$	32,460		$	29,206		$	28,810		$	23,139		$	3,838	16.6	%
Period-end loan receivables	$	65,849		$	68,290		$	63,520		$	61,431		$	58,248		$	7,601	13.0	%
Credit cards	$	63,309		$	65,773		$	60,920		$	58,827		$	55,866		$	7,443	13.3	%
Consumer installment loans	$	1,184		$	1,154		$	1,171		$	1,138		$	1,062		$	122	11.5	%
Commercial credit products	$	1,318		$	1,323		$	1,380		$	1,410		$	1,295		$	23	1.8	%
Other	$	38		$	40		$	49		$	56		$	25		$	13	52.0	%
Average loan receivables, including held for sale	$	66,705		$	65,406		$	62,504		$	60,094		$	59,775		$	6,930	11.6	%
Period-end active accounts (in thousands)⁽¹⁰⁾	64,689			68,314			62,831			61,718			59,761			4,928		8.2	%
Average active accounts (in thousands)⁽¹⁰⁾	66,134			64,892			62,247			60,923			61,604			4,530		7.4	%

LIQUIDITY
Liquid assets
Cash and equivalents	$	12,500		$	12,325		$	12,271		$	10,621		$	11,218		$	1,282	11.4	%
Total liquid assets	$	14,915		$	14,836		$	15,305		$	13,660		$	13,813		$	1,102	8.0	%
Undrawn credit facilities
Undrawn committed securitization financings	$	7,325		$	6,075		$	6,550		$	6,125		$	6,600		$	725	11.0	%
Total liquid assets and undrawn credit facilities	$	22,240		$	20,911		$	21,855		$	19,785		$	20,413		$	1,827	9.0	%
Liquid assets % of total assets	18.27		%	17.66		%	19.30		%	18.07		%	19.04		%			(0.77	)%
Liquid assets including undrawn committed securitization financings % of total assets	27.24		%	24.90		%	27.56		%	26.17		%	28.13		%			(0.89	)%

(1) Certain balance sheet amounts and related metrics have been updated to reflect the adoption of ASU 2015-03. More detail on this update is in footnote (1) on the Statements of Financial Position.
(2) Return on assets represents net earnings as a percentage of average total assets.
(3) Return on equity represents net earnings as a percentage of average total equity.
(4) Return on tangible common equity represents net earnings 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.
(5) Net interest margin represents net interest income divided by average interest-earning assets.
(6) Efficiency ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income.
(7) Based on customer statement-end balances extrapolated to the respective period-end date.
(8) Allowance coverage ratio represents allowance for loan losses divided by total period-end loan receivables.
(9) 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.
(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
	Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Mar 31, 2015			1Q'16 vs. 1Q'15
Interest income:
Interest and fees on loans	$	3,498		$	3,494		$	3,379		$	3,166		$	3,140		$	358		11.4	%
Interest on investment securities	22			15			13			11			10			12			120.0	%
Total interest income	3,520			3,509			3,392			3,177			3,150			370			11.7	%

Interest expense:
Interest on deposits	172			165			159			146			137			35			25.5	%
Interest on borrowings of consolidated securitization entities	58			56			54			53			52			6			11.5	%
Interest on third-party debt	81			80			76			71			82			(1		)	(1.2	)%
Interest on related party debt	—			—			—			—			4			(4		)	(100.0	)%
Total interest expense	311			301			289			270			275			36			13.1	%

Net interest income	3,209			3,208			3,103			2,907			2,875			334			11.6	%

Retailer share arrangements	(670		)	(734		)	(723		)	(621		)	(660		)	(10		)	1.5	%
Net interest income, after retailer share arrangements	2,539			2,474			2,380			2,286			2,215			324			14.6	%

Provision for loan losses	903			823			702			740			687			216			31.4	%
Net interest income, after retailer share arrangements and provision for loan losses	1,636			1,651			1,678			1,546			1,528			108			7.1	%

Other income:
Interchange revenue	130			147			135			123			100			30			30.0	%
Debt cancellation fees	64			62			61			61			65			(1		)	(1.5	)%
Loyalty programs	(110		)	(125		)	(122		)	(94		)	(78		)	(32		)	41.0	%
Other	8			3			10			30			14			(6		)	(42.9	)%
Total other income	92			87			84			120			101			(9		)	(8.9	)%

Other expense:
Employee costs	280			285			268			250			239			41			17.2	%
Professional fees	146			165			162			156			162			(16		)	(9.9	)%
Marketing and business development	94			128			115			108			82			12			14.6	%
Information processing	82			83			77			74			63			19			30.2	%
Other	198			209			221			217			200			(2		)	(1.0	)%
Total other expense	800			870			843			805			746			54			7.2	%

Earnings before provision for income taxes	928			868			919			861			883			45			5.1	%
Provision for income taxes	346			321			345			320			331			15			4.5	%
Net earnings attributable to common shareholders	$	582		$	547		$	574		$	541		$	552		$	30		5.4	%



SYNCHRONY FINANCIAL
STATEMENTS OF FINANCIAL POSITION⁽¹⁾
(unaudited, $ in millions)
	Quarter Ended
	Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Mar 31, 2015			Mar 31, 2016 vs. Mar 31, 2015
Assets
Cash and equivalents	$	12,500		$	12,325		$	12,271		$	10,621		$	11,218		$	1,282		11.4	%
Investment securities	2,949			3,142			3,596			3,682			3,121			(172		)	(5.5	)%
Loan receivables:
Unsecuritized loans held for investment	41,730			42,826			38,325			36,019			33,424			8,306			24.9	%
Restricted loans of consolidated securitization entities	24,119			25,464			25,195			25,412			24,824			(705		)	(2.8	)%
Total loan receivables	65,849			68,290			63,520			61,431			58,248			7,601			13.0	%
Less: Allowance for loan losses	(3,620		)	(3,497		)	(3,371		)	(3,302		)	(3,255		)	(365		)	11.2	%
Loan receivables, net	62,229			64,793			60,149			58,129			54,993			7,236			13.2	%
Loan receivables held for sale	—			—			—			—			359			(359		)	(100.0	)%
Goodwill	949			949			949			949			949			—			—	%
Intangible assets, net	702			701			646			575			557			145			26.0	%
Other assets	2,327			2,080			1,679			1,640			1,362			965			70.9	%
Total assets	$	81,656		$	83,990		$	79,290		$	75,596		$	72,559		$	9,097		12.5	%

Liabilities and Equity
Deposits:
Interest-bearing deposit accounts	$	44,721		$	43,215		$	40,323		$	37,539		$	34,695		$	10,026		28.9	%
Non-interest-bearing deposit accounts	256			152			140			143			162			94			58.0	%
Total deposits	44,977			43,367			40,463			37,682			34,857			10,120			29.0	%
Borrowings:
Borrowings of consolidated securitization entities	12,423			13,589			13,624			13,933			13,802			(1,379		)	(10.0	)%
Bank term loan	1,494			4,133			4,630			5,126			5,622			(4,128		)	(73.4	)%
Senior unsecured notes	6,559			6,557			5,560			4,569			4,567			1,992			43.6	%
Related party debt	—			—			—			—			—			—			—	%
Total borrowings	20,476			24,279			23,814			23,628			23,991			(3,515		)	(14.7	)%
Accrued expenses and other liabilities	2,999			3,740			2,855			2,708			2,675			324			12.1	%
Total liabilities	68,452			71,386			67,132			64,018			61,523			6,929			11.3	%
Equity:
Common stock	1			1			1			1			1			—			—	%
Additional paid-in capital	9,359			9,351			9,431			9,422			9,418			(59		)	(0.6	)%
Retained earnings	3,875			3,293			2,746			2,172			1,631			2,244			137.6	%
Accumulated other comprehensive income:	(31		)	(41		)	(20		)	(17		)	(14		)	(17		)	121.4	%
Total equity	13,204			12,604			12,158			11,578			11,036			2,168			19.6	%
Total liabilities and equity	$	81,656		$	83,990		$	79,290		$	75,596		$	72,559		$	9,097		12.5	%

(1) In January 2016, we adopted ASU 2015-03, Interest–Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires the presentation of deferred issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of the debt liability. Accordingly, we have reclassified issuance costs associated with our borrowings and certain brokered deposits, from other assets, and reflected as a reduction of borrowings and interest-bearing deposit accounts, as applicable, for each period presented to conform to the current period presentation. Related selected financial metrics included within this Financial Data Supplement have also been updated where applicable to reflect this reclassification.



SYNCHRONY FINANCIAL
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN⁽¹⁾
(unaudited, $ in millions)

	Quarter Ended
	Mar 31, 2016							Dec 31, 2015							Sep 30, 2015							Jun 30, 2015							Mar 31, 2015
				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	$	12,185		$	16	0.53	%	$	12,070		$	9	0.30	%	$	11,059		$	7	0.25	%	$	10,728		$	6	0.22	%	$	11,331		$	6	0.21	%
Securities available for sale	2,995			6		0.81	%	3,445			6		0.69	%	3,534			6		0.67	%	3,107			5		0.65	%	2,725			4		0.60	%

Loan receivables:
Credit cards, including held for sale	64,194			3,436		21.53	%	62,834			3,432		21.67	%	59,890			3,315		21.96	%	57,588			3,106		21.63	%	57,390			3,079		21.76	%
Consumer installment loans	1,159			27		9.37	%	1,163			26		8.87	%	1,160			27		9.23	%	1,101			26		9.47	%	1,057			25		9.59	%
Commercial credit products	1,313			35		10.72	%	1,361			36		10.49	%	1,400			36		10.20	%	1,372			34		9.94	%	1,305			36		11.19	%
Other	39			—		—	%	48			—		—	%	54			1		NM		33			—		—	%	23			—		—	%
Total loan receivables, including held for sale	66,705			3,498		21.09	%	65,406			3,494		21.19	%	62,504			3,379		21.45	%	60,094			3,166		21.13	%	59,775			3,140		21.30	%
Total interest-earning assets	81,885			3,520		17.29	%	80,921			3,509		17.20	%	77,097			3,392		17.46	%	73,929			3,177		17.24	%	73,831			3,150		17.30	%

Non-interest-earning assets:
Cash and due from banks	1,277							1,268							1,216							583							497
Allowance for loan losses	(3,583		)					(3,440		)					(3,341		)					(3,285		)					(3,272		)
Other assets	3,256							3,133							2,869							2,758							2,639
Total non-interest-earning assets	950							961							744							56							(136		)

Total assets	$	82,835						$	81,882						$	77,841						$	73,985						$	73,695

Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	44,101		$	172	1.57	%	$	42,079		$	165	1.56	%	$	39,048		$	159	1.62	%	$	35,816		$	146	1.64	%	$	34,887		$	137	1.59	%
Borrowings of consolidated securitization entities	12,950			58		1.80	%	13,550			56		1.64	%	13,715			54		1.56	%	14,011			53		1.52	%	14,087			52		1.50	%
Bank term loan⁽²⁾	2,565			24		3.76	%	4,507			28		2.46	%	4,878			29		2.36	%	5,374			32		2.39	%	6,498			47		2.93	%
Senior unsecured notes	6,558			57		3.50	%	5,810			52		3.55	%	5,312			47		3.51	%	4,568			39		3.42	%	4,071			35		3.49	%
Related party debt	—			—		—	%	—			—		—	%	—			—		—	%	—			—		—	%	407			4		3.99	%
Total interest-bearing liabilities	66,174			311		1.89	%	65,946			301		1.81	%	62,953			289		1.82	%	59,769			270		1.81	%	59,950			275		1.86	%

Non-interest-bearing liabilities
Non-interest-bearing deposit accounts	226							147							149							166							142
Other liabilities	3,534							3,396							2,859							2,750							2,854
Total non-interest-bearing liabilities	3,760							3,543							3,008							2,916							2,996

Total liabilities	69,934							69,489							65,961							62,685							62,946

Equity
Total equity	12,901							12,393							11,880							11,300							10,749

Total liabilities and equity	$	82,835						$	81,882						$	77,841						$	73,985						$	73,695
Net interest income				$	3,209						$	3,208						$	3,103						$	2,907						$	2,875

Interest rate spread⁽³⁾						15.40	%						15.39	%						15.64	%						15.43	%						15.44	%
Net interest margin⁽⁴⁾						15.76	%						15.73	%						15.97	%						15.77	%						15.79	%

(1) Certain balance sheet amounts and related metrics have been updated to reflect the adoption of ASU 2015-03. More detail on this update is in footnote (1) on the Statements of Financial Position.
(2) Average interest rate on liabilities calculated above utilizes monthly average balances. The effective interest rates for the Bank term loan for the quarters ended March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015, and March 31, 2015 were 2.47%, 2.26%, 2.23%, 2.21%, and 2.21%, respectively. The Bank term loan effective rate excludes the impact of charges incurred in connection with prepayments of the loan.
(3) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average interest-earning assets.



SYNCHRONY FINANCIAL
BALANCE SHEET STATISTICS⁽¹⁾
(unaudited, $ in millions, except per share statistics)

	Quarter Ended
	Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Mar 31, 2015			Mar 31, 2016 vs. Mar 31, 2015
BALANCE SHEET STATISTICS
Total common equity	$	13,204		$	12,604		$	12,158		$	11,578		$	11,036		$	2,168	19.6	%
Total common equity as a % of total assets	16.17		%	15.01		%	15.33		%	15.32		%	15.21		%			0.96	%

Tangible assets	$	80,005		$	82,340		$	77,695		$	74,072		$	71,053		$	8,952	12.6	%
Tangible common equity⁽²⁾	$	11,553		$	10,954		$	10,563		$	10,054		$	9,530		$	2,023	21.2	%
Tangible common equity as a % of tangible assets⁽²⁾	14.44		%	13.30		%	13.60		%	13.57		%	13.41		%			1.03	%
Tangible common equity per share⁽²⁾	$	13.86		$	13.14		$	12.67		$	12.06		$	11.43		$	2.43	21.3	%

REGULATORY CAPITAL RATIOS⁽³⁾
	Basel III Transition												Basel I
Total risk-based capital ratio⁽⁴⁾⁽⁹⁾	19.4		%	18.1		%	18.8		%	18.6		%	18.2		%
Tier 1 risk-based capital ratio⁽⁵⁾⁽⁹⁾	18.1		%	16.8		%	17.5		%	17.3		%	16.9		%
Tier 1 common ratio⁽⁶⁾⁽⁹⁾	n/a			n/a			n/a			n/a			16.9		%
Tier 1 leverage ratio⁽⁷⁾⁽⁹⁾	14.8		%	14.4		%	14.6		%	14.6		%	13.7		%
Common equity Tier 1 capital ratio⁽⁸⁾⁽⁹⁾	18.1		%	16.8		%	17.5		%	17.3		%	n/a

	Basel III Fully Phased-in
Common equity Tier 1 capital ratio⁽⁸⁾	17.5		%	15.9		%	16.7		%	16.5		%	16.4		%

(1) Certain balance sheet amounts and related metrics have been updated to reflect the adoption of ASU 2015-03. More detail on this update is in footnote (1) on the Statements of Financial Position.
(2) 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.
(3) Regulatory capital metrics at March 31, 2016 are preliminary and therefore subject to change. As a new savings and loan holding company, the Company historically has not been required by regulators to disclose capital ratios prior to December 31, 2015, and therefore these ratios are non-GAAP measures. See Reconciliation of Non-GAAP Measures and Calculation of Regulatory Measures for components of capital ratio calculations.
(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 common ratio is the ratio of common equity Tier 1 capital divided by risk-weighted assets.
(7) Tier 1 leverage ratio reported under Basel III transition rules is calculated based on Tier 1 capital divided by total average assets, after certain adjustments. Total assets, after certain adjustments is used as the denominator for prior periods calculated under Basel I rules.
(8) Common equity Tier 1 capital ratio is the ratio of common equity Tier 1 capital to total risk-weighted assets, each as calculated under Basel III rules. Common equity Tier 1 capital ratio (fully phased-in) is a preliminary estimate reflecting management’s interpretation of the final Basel III rules adopted in July 2013 by the Federal Reserve Board, which have not been fully implemented, and our estimate and interpretations are subject to, among other things, ongoing regulatory review and implementation guidance.
(9) Beginning June 30, 2015, regulatory capital ratios are calculated under Basel III rules subject to transition provisions. The Company reported under Basel I rules for period ending March 31, 2015.



SYNCHRONY FINANCIAL
PLATFORM RESULTS AND RECONCILIATION OF NON-GAAP MEASURES
(unaudited, $ in millions)
	Quarter Ended
	Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Mar 31, 2015			1Q'16 vs. 1Q'15
RETAIL CARD
Purchase volume^(1),(2)	$	21,550		$	26,768		$	23,560		$	23,452		$	18,410		$	3,140		17.1	%
Period-end loan receivables	$	45,113		$	47,412		$	43,432		$	42,315		$	39,685		$	5,428		13.7	%
Average loan receivables, including held for sale	$	45,900		$	44,958		$	42,933		$	41,303		$	40,986		$	4,914		12.0	%
Average active accounts (in thousands)^(2),(3)	52,969			52,038			49,953			48,981			49,617			3,352			6.8	%

Interest and fees on loans⁽²⁾	$	2,614		$	2,594		$	2,508		$	2,335		$	2,337		$	277		11.9	%
Other income⁽²⁾	79			76			70			107			86			(7		)	(8.1	)%
Platform revenue, excluding retailer share arrangements⁽²⁾	2,693			2,670			2,578			2,442			2,423			270			11.1	%
Retailer share arrangements⁽²⁾	(661		)	(723		)	(708		)	(606		)	(651		)	(10		)	1.5	%
Platform revenue⁽²⁾	$	2,032		$	1,947		$	1,870		$	1,836		$	1,772		$	260		14.7	%

PAYMENT SOLUTIONS
Purchase volume⁽¹⁾	$	3,392		$	3,714		$	3,635		$	3,371		$	2,948		$	444		15.1	%
Period-end loan receivables	$	13,420		$	13,543		$	12,933		$	12,194		$	11,833		$	1,587		13.4	%
Average loan receivables	$	13,482		$	13,192		$	12,523		$	11,971		$	11,970		$	1,512		12.6	%
Average active accounts (in thousands)⁽³⁾	8,134			7,896			7,468			7,231			7,271			863			11.9	%

Interest and fees on loans	$	457		$	462		$	442		$	412		$	403		$	54		13.4	%
Other income	4			3			5			4			5			(1		)	(20.0	)%
Platform revenue, excluding retailer share arrangements	461			465			447			416			408			53			13.0	%
Retailer share arrangements	(7		)	(10		)	(13		)	(14		)	(8		)	1			(12.5	)%
Platform revenue	$	454		$	455		$	434		$	402		$	400		$	54		13.5	%

CARECREDIT
Purchase volume⁽¹⁾	$	2,035		$	1,978		$	2,011		$	1,987		$	1,781		$	254		14.3	%
Period-end loan receivables	$	7,316		$	7,335		$	7,155		$	6,922		$	6,730		$	586		8.7	%
Average loan receivables	$	7,323		$	7,256		$	7,048		$	6,820		$	6,819		$	504		7.4	%
Average active accounts (in thousands)⁽³⁾	5,031			4,958			4,826			4,711			4,716			315			6.7	%

Interest and fees on loans	$	427		$	438		$	429		$	419		$	400		$	27		6.8	%
Other income	9			8			9			9			10			(1		)	(10.0	)%
Platform revenue, excluding retailer share arrangements	436			446			438			428			410			26			6.3	%
Retailer share arrangements	(2		)	(1		)	(2		)	(1		)	(1		)	(1		)	100.0	%
Platform revenue	$	434		$	445		$	436		$	427		$	409		$	25		6.1	%

TOTAL SYF
Purchase volume^(1),(2)	$	26,977		$	32,460		$	29,206		$	28,810		$	23,139		$	3,838		16.6	%
Period-end loan receivables	$	65,849		$	68,290		$	63,520		$	61,431		$	58,248		$	7,601		13.0	%
Average loan receivables, including held for sale	$	66,705		$	65,406		$	62,504		$	60,094		$	59,775		$	6,930		11.6	%
Average active accounts (in thousands)^(2),(3)	66,134			64,892			62,247			60,923			61,604			4,530			7.4	%

Interest and fees on loans⁽²⁾	$	3,498		$	3,494		$	3,379		$	3,166		$	3,140		$	358		11.4	%
Other income⁽²⁾	92			87			84			120			101			(9		)	(8.9	)%
Platform revenue, excluding retailer share arrangements⁽²⁾	3,590			3,581			3,463			3,286			3,241			349			10.8	%
Retailer share arrangements⁽²⁾	(670		)	(734		)	(723		)	(621		)	(660		)	(10		)	1.5	%
Platform revenue⁽²⁾	$	2,920		$	2,847		$	2,740		$	2,665		$	2,581		$	339		13.1	%

(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⁾⁽²⁾
(unaudited, $ in millions, except per share statistics)
	Quarter Ended
	Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Mar 31, 2015
COMMON EQUITY MEASURES
GAAP Total common equity	$	13,204		$	12,604		$	12,158		$	11,578		$	11,036
Less: Goodwill	(949		)	(949		)	(949		)	(949		)	(949		)
Less: Intangible assets, net	(702		)	(701		)	(646		)	(575		)	(557		)
Tangible common equity	$	11,553		$	10,954		$	10,563		$	10,054		$	9,530
Adjustments for certain other intangible assets, deferred tax liabilities and certain items in accumulated comprehensive income (loss)													293
Basel I - Common Equity Tier 1													$	9,823
Adjustments for certain other intangible assets and deferred tax liabilities													(12		)

Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss)	281			280			291			293
Basel III - Common equity Tier 1 (fully phased-in)	$	11,834		$	11,234		$	10,854		$	10,347		$	9,811
Adjustment related to capital components during transition	265			399			375			331
Basel III - Common equity Tier I (transition)	$	12,099		$	11,633		$	11,229		$	10,678

RISK-BASED CAPITAL
Common equity Tier 1⁽³⁾	$	12,099		$	11,633		$	11,229		$	10,678		$	9,823
Add: Allowance for loan losses includible in risk-based capital	869			898			833			804			757
Risk-based capital⁽³⁾	$	12,968		$	12,531		$	12,062		$	11,482		$	10,580

ASSET MEASURES
Total assets⁽⁴⁾	$	82,835		$	81,882		$	77,841		$	73,985		$	72,559
Adjustments for:
Disallowed goodwill and other disallowed intangible assets, net of related deferred tax liabilities	(1,117		)	(991		)	(931		)	(903		)	(1,213		)
Other	—			—			104			60			136
Total assets for leverage purposes⁽³⁾	$	81,718		$	80,891		$	77,014		$	73,142		$	71,482

Risk-weighted assets - Basel I	n/a			n/a			n/a			n/a			$	58,020
Risk-weighted assets - Basel III (fully phased-in)⁽⁵⁾	$	67,701		$	70,493		$	65,125		$	62,814		$	59,762
Risk-weighted assets - Basel III (transition)⁽⁵⁾	$	66,693		$	69,224		$	64,090		61,829			n/a

TANGIBLE COMMON EQUITY PER SHARE
GAAP book value per share	$	15.84		$	15.12		$	14.58		$	13.89		$	13.24
Less: Goodwill	(1.14		)	(1.14		)	(1.14		)	(1.14		)	(1.14		)
Less: Intangible assets, net	(0.84		)	(0.84		)	(0.77		)	(0.69		)	(0.67		)
Tangible common equity per share	$	13.86		$	13.14		$	12.67		$	12.06		$	11.43

(1) Certain balance sheet amounts and related metrics have been updated to reflect the adoption of ASU 2015-03. More detail on this update is in footnote (1) on the Statements of Financial Position.
(2) Regulatory measures at March 31, 2016 are presented on an estimated basis.
(3) Beginning June 30, 2015, regulatory capital amounts are calculated under Basel III rules subject to transition provisions. The company reported under Basel I rules for period ending March 31, 2015.
(4) Represents total average assets beginning June 30, 2015 and total assets for period ending March 31, 2015.
(5) Key differences between Basel III transitional rules and fully phased-in Basel III rules in the calculation of risk-weighted assets include, but not limited to, risk weighting of deferred tax assets and adjustments for certain intangible assets.

Synchrony Financial - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - April 22, 2016

Attached files

Synchrony Financial Reports