PR Newswire | Jan 29, 2021 06:31AM EST

Diluted Share

01/29 05:30 CST

Synchrony Reports Fourth Quarter Net Earnings of $738 Million or $1.24 Per Diluted Share- Trends Improving, Still Impacted by Pandemic- Building for the Future with 9 Renewals, 7 New Programs, and an Acquisition- Board Approved $1.6 Billion Share Repurchase Program STAMFORD, Conn., Jan. 29, 2021

STAMFORD, Conn., Jan. 29, 2021 /PRNewswire/ -- Synchrony Financial (NYSE: SYF) today announced fourth quarter 2020 earnings results amid the continuing Coronavirus (COVID-19) pandemic. Synchrony reported fourth quarter 2020 net earnings of $738 million, or $1.24 per diluted share.

Key Highlights*.

* Loan receivables decreased 6% to $81.9 billion * Interest and fees on loans decreased 11% to $4.0 billion * Purchase volume decreased 1% to $39.9 billion * Average active accounts decreased 10% to 66.3 million * Deposits decreased $2.3 billion, or 4%, to $62.8 billion * Renewed Payment Solutions programs with Mattress Firm and Kawasaki, and added a new program with Doosan Bobcat * Added new CareCredit programs with Walgreens and the Community Veterinary Partners, renewed program with Aspen Dental, and acquired Allegro Credit, a leading provider of point-of-sale consumer financing for audiology products and dental services * Returned $128 million in capital through common stock dividends * The Board of Directors approved a share repurchase program of up to $1.6 billion, commencing in the first quarter of 2021, subject to capital plan and any regulatory restrictions

"Last year brought challenges the likes of which we have never before experienced, and I am proud of how we came together as an organization to help our employees, partners, customers, and communities. We never lost sight of the necessity to build for the future, one in which the acceleration of digital adoption is profound. We quickly deployed digital assets to help our partners navigate this new environment and we continue to make investments for the future. In 2020, we renewed 41 key relationships, won 25 new deals, and launched promising new programs with Verizon and Venmo. We also took a deep look at our organization to decisively reduce costs to appropriately align the expenses of our business while maintaining investments in our long-term strategy," said Margaret Keane, Chief Executive Officer, Synchrony Financial. "With Synchrony in a position of strength, now is the right time to implement the leadership transition announced earlier this month. Effective April 1, I will transition to the role of Executive Chair of our Board of Directors, and Brian Doubles will become President and CEO, allowing him to continue the incredible progress that has been made and drive the next stage of Synchrony's exciting growth journey."

Business and Financial Results for the Fourth Quarter of 2020*

Earnings

* Net interest income decreased $370 million, or 9%, to $3.7 billion, mainly due to the impact of COVID-19. * Retailer share arrangements increased $18 million, or 2%, to $1.0 billion, reflecting the improvement in net charge-offs. * Provision for credit losses decreased $354 million, or 32%, to $750 million, mainly driven by lower net charge-offs, partially offset by a $119 million reserve increase. * Other income decreased $22 million, or 21%, to $82 million, largely driven by higher loyalty program costs. * Other expense decreased $79 million, or 7%, to $1.0 billion, mainly driven by lower purchase volume and accounts, lower employee costs, and lower operational losses. * Net earnings increased $7 million, or 1%, to $738 million .

Balance Sheet

* Period-end loan receivables decreased 6%; purchase volume decreased 1%; and average active accounts decreased 10%. * Deposits decreased $2.3 billion, or 4%, to $62.8 billion and comprised 80% of funding. * The Company's balance sheet remained strong with total liquidity (liquid assets and undrawn credit facilities) of $23.7 billion, or 24.7% 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 15.9% compared to 14.1%, and the estimated Tier 1 Capital ratio was 16.8% compared to 15.0%, reflecting the Company's strong capital generation capabilities. * The Board of Directors approved a share repurchase program of up to $1.6 billion, commencing in the first quarter of 2021 and expiring December 31, 2021.

Key Financial Metrics

* Return on assets was 3.1% and return on equity was 23.6%. * Net interest margin was 14.64%. * Efficiency ratio was 37.1%.

Credit Quality

* Loans 30+ days past due as a percentage of total period-end loan receivables were 3.07% compared to 4.44% last year. * Net charge-offs as a percentage of total average loan receivables were 3.16% compared to 5.15% last year. * The allowance for credit losses as a percentage of total period-end loan receivables was 12.54%.

Sales Platforms

* Retail Card period-end loan receivables decreased 8%, driven primarily by the impact from COVID-19, partially offset by growth in digital partners. Interest and fees on loans decreased 13%, driven primarily by COVID-19 and the decline in loan receivables. Purchase volume increased 1% and average active accounts decreased 10%. * Payment Solutions period-end loan receivables decreased 2%, primarily due to the impact from COVID-19, partially offset by growth in Power Sports and Home Specialty. Interest and fees on loans decreased 9%, driven primarily by lower yield on loan receivables. Purchase volume decreased 7% and average active accounts decreased 9%. * CareCredit period-end loan receivables decreased 7%, driven primarily by the impact from COVID-19. Interest and fees on loans decreased 4%, driven primarily by lower merchant discount as a result of the decline in purchase volume, which decreased 6%. Average active accounts decreased 10%.

* All comparisons are for the fourth quarter of 2020 compared to the fourth quarter of 2019, unless otherwise noted.

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 Annual Report on Form 10-K for the year ended December 31, 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 Friday, January 29, 2021, 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 September 30, 2020, as filed on October 22, 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 "CECL fully phased-in" capital measures, 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 Twelve Months Ended

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, 4Q'20 vs. 4Q'19 Dec 31, Dec 31, YTD'20 vs. YTD'19 2020 2020 2020 2020 2019 2020 2019

EARNINGS

Net interest $3,659 $3,457 $3,396 $3,890 $4,029 $(370) (9.2)% $14,402 $16,799 $(2,397) (14.3)%income

Retailershare (1,047) (899) (773) (926) (1,029) (18) 1.7% (3,645) (3,858) 213 (5.5)%arrangements

Provisionfor credit 750 1,210 1,673 1,677 1,104 (354) (32.1)% 5,310 4,180 1,130 27.0%losses

Net interestincome,afterretailershare 1,862 1,348 950 1,287 1,896 (34) (1.8)% 5,447 8,761 (3,314) (37.8)%arrangementsandprovisionfor creditlosses

Other income 82 131 95 97 104 (22) (21.2)% 405 371 34 9.2%

Other 1,000 1,067 986 1,002 1,079 (79) (7.3)% 4,055 4,245 (190) (4.5)%expense

Earningsbeforeprovision 944 412 59 382 921 23 2.5% 1,797 4,887 (3,090) (63.2)%for incometaxes

Provisionfor income 206 99 11 96 190 16 8.4% 412 1,140 (728) (63.9)%taxes

Net earnings $738 $313 $48 $286 $731 $7 1.0% $1,385 $3,747 $(2,362) (63.0)%

Net earningsavailable to $728 $303 $37 $275 $731 $(3) (0.4)% $1,343 $3,747 $(2,404) (64.2)%commonstockholders

COMMON SHARESTATISTICS

Basic EPS $1.25 $0.52 $0.06 $0.45 $1.15 $0.10 8.7% $2.28 $5.59 $(3.31) (59.2)%

Diluted $1.24 $0.52 $0.06 $0.45 $1.15 $0.09 7.8% $2.27 $5.56 $(3.29) (59.2)%EPS

Dividenddeclared per $0.22 $0.22 $0.22 $0.22 $0.22 $- - % $0.88 $0.86 $0.02 2.3%share

Common stock $34.71 $26.17 $22.16 $16.09 $36.01 $(1.30) (3.6)% $34.71 $36.01 $(1.30) (3.6)%price

Book value $20.49 $19.47 $19.13 $19.27 $23.31 $(2.82) (12.1)% $20.49 $23.31 $(2.82) (12.1)%per share

Tangiblecommon $16.72 $15.75 $15.28 $15.35 $19.50 $(2.78) (14.3)% $16.72 $19.50 $(2.78) (14.3)%equity pershare^(1)

Beginningcommon 583.8 583.7 583.2 615.9 653.7 (69.9) (10.7)% 615.9 718.8 (102.9) (14.3)%sharesoutstanding

Issuance ofcommon - - - - - - - % - - - - %shares

Stock-based 0.2 0.1 0.5 0.9 0.6 (0.4) (66.7)% 1.7 3.1 (1.4) (45.2)%compensation

Shares - - - (33.6) (38.4) 38.4 (100.0)% (33.6) (106.0) 72.4 (68.3)%repurchased

Endingcommon 584.0 583.8 583.7 583.2 615.9 (31.9) (5.2)% 584.0 615.9 (31.9) (5.2)%sharesoutstanding

Weightedaveragecommon 583.9 583.8 583.7 604.9 633.7 (49.8) (7.9)% 589.0 670.2 (81.2) (12.1)%sharesoutstanding

Weightedaveragecommonshares 586.6 584.8 584.4 607.4 637.7 (51.1) (8.0)% 590.8 673.5 (82.7) (12.3)%outstanding(fullydiluted)

(1) Tangible Common Equity ("TCE") is a non-GAAP measure. For correspondingreconciliation of TCE to a GAAP financial measure, see Reconciliation ofNon-GAAP Measures and Calculations of Regulatory Measures.

SYNCHRONY FINANCIAL

SELECTED METRICS

(unaudited, $ in millions)

Quarter Ended Twelve Months Ended

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, 4Q'20 vs. 4Q'19 Dec 31, Dec 31, YTD'20 vs. YTD'19 2020 2020 2020 2020 2019 2020 2019

PERFORMANCE METRICS

Return on assets^(1) 3.1% 1.3% 0.2% 1.1% 2.7% 0.4% 1.4% 3.5% (2.1)%

Return on equity^(2) 23.6% 10.3% 1.6% 9.1% 19.0% 4.6% 11.2% 25.1% (13.9)%

Return on tangible common equity^(3) 30.4% 13.1% 1.6% 11.6% 23.0% 7.4% 14.4% 29.9% (15.5)%

Net interest margin^(4) 14.64% 13.80% 13.53% 15.15% 15.01% (0.37)% 14.29% 15.78% (1.49)%

Efficiency ratio^(5) 37.1% 39.7% 36.3% 32.7% 34.8% 2.3% 36.3% 31.9% 4.4%

Other expense as a % of average loan receivables, including held for sale 5.01% 5.44% 5.04% 4.77% 5.01% 0.00% 5.06% 4.79% 0.27%

Effective income tax rate 21.8% 24.0% 18.6% 25.1% 20.6% 1.2% 22.9% 23.3% (0.4)%

CREDIT QUALITY METRICS

Net charge-offs as a % of average loan receivables, including held for sale 3.16% 4.42% 5.35% 5.36% 5.15% (1.99)% 4.58% 5.65% (1.07)%

30+ days past due as a % of period-end loan receivables^(6) 3.07% 2.67% 3.13% 4.24% 4.44% (1.37)% 3.07% 4.44% (1.37)%

90+ days past due as a % of period-end loan receivables^(6) 1.40% 1.24% 1.77% 2.10% 2.15% (0.75)% 1.40% 2.15% (0.75)%

Net charge-offs $631 $866 $1,046 $1,125 $1,109 $(478) (43.1)% $3,668 $5,005 $(1,337) (26.7)%

Loan receivables delinquent over 30 days^(6) $2,514 $2,100 $2,453 $3,500 $3,874 $(1,360) (35.1)% $2,514 $3,874 $(1,360) (35.1)%

Loan receivables delinquent over 90 days^(6) $1,143 $973 $1,384 $1,735 $1,877 $(734) (39.1)% $1,143 $1,877 $(734) (39.1)%

Allowance for credit losses (period-end) $10,265 $10,146 $9,802 $9,175 $5,602 $4,663 83.2% $10,265 $5,602 $4,663 83.2%

Allowance coverage ratio^(7) 12.54% 12.92% 12.52% 11.13% 6.42% 6.12% 12.54% 6.42% 6.12%

BUSINESS METRICS

Purchase volume^(8)(9) $39,874 $36,013 $31,155 $32,042 $40,212 $(338) (0.8)% $139,084 $149,411 $(10,327) (6.9)%

Period-end loan receivables $81,867 $78,521 $78,313 $82,469 $87,215 $(5,348) (6.1)% $81,867 $87,215 $(5,348) (6.1)%

Credit cards $78,455 $75,204 $75,353 $79,832 $84,606 $(6,151) (7.3)% $78,455 $84,606 $(6,151) (7.3)%

Consumer installment loans $2,125 $1,987 $1,779 $1,390 $1,347 $778 57.8% $2,125 $1,347 $778 57.8%

Commercial credit products $1,250 $1,270 $1,140 $1,203 $1,223 $27 2.2% $1,250 $1,223 $27 2.2%

Other $37 $60 $41 $44 $39 $(2) (5.1)% $37 $39 $(2) (5.1)%

Average loan receivables, including held for sale $79,452 $78,005 $78,697 $84,428 $85,376 $(5,924) (6.9)% $80,138 $88,649 $(8,511) (9.6)%

Period-end active accounts (in thousands)^(9)(10) 68,540 64,800 63,430 68,849 75,471 (6,931) (9.2)% 68,540 75,471 (6,931) (9.2)%

Average active accounts (in thousands)^(9)(10) 66,261 64,270 64,836 72,078 73,734 (7,473) (10.1)% 67,131 75,721 (8,590) (11.3)%

LIQUIDITY

Liquid assets

Cash and equivalents $11,524 $13,552 $16,344 $13,704 $12,147 $(623) (5.1)% $11,524 $12,147 $(623) (5.1)%

Total liquid assets $18,321 $21,402 $22,352 $19,225 $17,322 $999 5.8% $18,321 $17,322 $999 5.8%

Undrawn credit facilities

Undrawn credit facilities $5,400 $5,400 $5,650 $5,600 $6,050 $(650) (10.7)% $5,400 $6,050 $(650) (10.7)%

Total liquid assets and undrawn credit facilities $23,721 $26,802 $28,002 $24,825 $23,372 $349 1.5% $23,721 $23,372 $349 1.5%

Liquid assets % of total assets 19.09% 22.37% 23.15% 19.61% 16.52% 2.57% 19.09% 16.52% 2.57%

Liquid assets including undrawn credit facilities % of total assets 24.72% 28.02% 29.00% 25.32% 22.30% 2.42% 24.72% 22.30% 2.42%

(1) Return on assets represents net earnings as a percentage of average totalassets.

(2) Return on equity represents net earnings as a percentage of average totalequity.

(3) Return on tangible common equity represents net earnings available tocommon stockholders as a percentage of average tangible common equity. Tangiblecommon equity ("TCE") is a non-GAAP measure. For corresponding reconciliationof TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures andCalculations of Regulatory Measures.

(4) Net interest margin represents net interest income divided by averageinterest-earning assets.

(5) Efficiency ratio represents (i) other expense, divided by (ii) net interestincome, plus other income, less retailer share arrangements.

(6) Based on customer statement-end balances extrapolated to the respectiveperiod-end date.

(7) Allowance coverage ratio represents allowance for credit losses divided bytotal period-end loan receivables.

(8) Purchase volume, or net credit sales, represents the aggregate amount ofcharges incurred on credit cards or other credit product accounts less returnsduring the period.

(9) Includes activity and accounts associated with loan receivables held forsale.

(10) Active accounts represent credit card or installment loan accounts onwhich there has been a purchase, payment or outstanding balance in the currentmonth.

SYNCHRONY FINANCIAL

STATEMENTS OF EARNINGS

(unaudited, $ in millions)

Quarter Ended Twelve Months Ended

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, 4Q'20 vs. 4Q'19 Dec 31, Dec 31, YTD'20 vs. YTD'19 2020 2020 2020 2020 2019 2020 2019

Interestincome:

Interest and $3,981 $3,821 $3,808 $4,340 $4,492 $(511) (11.4)% $15,950 $18,705 $(2,755) (14.7)%fees on loans

Interest oncash and debt 12 16 22 67 93 (81) (87.1)% 117 385 (268) (69.6)%securities

Total interest 3,993 3,837 3,830 4,407 4,585 (592) (12.9)% 16,067 19,090 (3,023) (15.8)%income

Interestexpense:

Interest on 200 245 293 356 383 (183) (47.8)% 1,094 1,566 (472) (30.1)%deposits

Interest onborrowings ofconsolidated 52 53 59 73 80 (28) (35.0)% 237 358 (121) (33.8)%securitizationentities

Interest onsenior 82 82 82 88 93 (11) (11.8)% 334 367 (33) (9.0)%unsecurednotes

Total interest 334 380 434 517 556 (222) (39.9)% 1,665 2,291 (626) (27.3)%expense

Net interest 3,659 3,457 3,396 3,890 4,029 (370) (9.2)% 14,402 16,799 (2,397) (14.3)%income

Retailer share (1,047) (899) (773) (926) (1,029) (18) 1.7% (3,645) (3,858) 213 (5.5)%arrangements

Provision for 750 1,210 1,673 1,677 1,104 (354) (32.1)% 5,310 4,180 1,130 27.0%credit losses

Net interestincome, afterretailer sharearrangements 1,862 1,348 950 1,287 1,896 (34) (1.8)% 5,447 8,761 (3,314) (37.8)%and provisionfor creditlosses

Other income:

Interchange 185 172 134 161 192 (7) (3.6)% 652 748 (96) (12.8)%revenue

Debtcancellation 72 68 69 69 64 8 12.5% 278 265 13 4.9%fees

Loyalty (202) (155) (134) (158) (181) (21) 11.6% (649) (743) 94 (12.7)%programs

Other 27 46 26 25 29 (2) (6.9)% 124 101 23 22.8%

Total other 82 131 95 97 104 (22) (21.2)% 405 371 34 9.2%income

Other expense:

Employee costs 347 382 327 324 385 (38) (9.9)% 1,380 1,455 (75) (5.2)%

Professional 186 187 189 197 199 (13) (6.5)% 759 867 (108) (12.5)%fees

Marketing andbusiness 139 107 91 111 152 (13) (8.6)% 448 549 (101) (18.4)%development

Information 128 125 116 123 122 6 4.9% 492 485 7 1.4%processing

Other 200 266 263 247 221 (21) (9.5)% 976 889 87 9.8%

Total other 1,000 1,067 986 1,002 1,079 (79) (7.3)% 4,055 4,245 (190) (4.5)%expense

Earningsbefore 944 412 59 382 921 23 2.5% 1,797 4,887 (3,090) (63.2)%provision forincome taxes

Provision for 206 99 11 96 190 16 8.4% 412 1,140 (728) (63.9)%income taxes

Net earnings $738 $313 $48 $286 $731 $7 1.0% $1,385 $3,747 $(2,362) (63.0)%

Net earningsavailable to $728 $303 $37 $275 $731 $(3) (0.4)% $1,343 $3,747 $(2,404) (64.2)%commonstockholders

SYNCHRONY FINANCIAL

STATEMENTS OF FINANCIAL POSITION

(unaudited, $ in millions)

Quarter Ended

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Dec 31, 2020 vs. 2020 2020 2020 2020 2019 Dec 31, 2019

Assets

Cash and equivalents $11,524 $13,552 $16,344 $13,704 $12,147 $(623) (5.1)%

Debt securities 7,469 8,432 6,623 6,146 5,911 1,558 26.4%

Loan receivables:

Unsecuritized loans 56,472 52,613 52,629 54,765 58,398 (1,926) (3.3)%held for investment

Restricted loans ofconsolidated 25,395 25,908 25,684 27,704 28,817 (3,422) (11.9)%securitizationentities

Total loan 81,867 78,521 78,313 82,469 87,215 (5,348) (6.1)%receivables

Less: Allowance for (10,265) (10,146) (9,802) (9,175) (5,602) (4,663) 83.2%credit losses^(1)

Loan receivables, 71,602 68,375 68,511 73,294 81,613 (10,011) (12.3)%net

Loan receivables 5 4 4 5 725 (720) (99.3)%held for sale

Goodwill 1,078 1,078 1,078 1,078 1,078 - - %

Intangible assets, 1,125 1,091 1,166 1,208 1,265 (140) (11.1)%net

Other assets 3,145 3,126 2,818 2,603 2,087 1,058 50.7%

Total assets $95,948 $95,658 $96,544 $98,038 $104,826 $(8,878) (8.5)%

Liabilities andEquity

Deposits:

Interest-bearing $62,469 $63,195 $63,857 $64,302 $64,877 $(2,408) (3.7)%deposit accounts

Non-interest-bearing 313 298 291 313 277 36 13.0%deposit accounts

Total deposits 62,782 63,493 64,148 64,615 65,154 (2,372) (3.6)%

Borrowings:

Borrowings ofconsolidated 7,810 7,809 8,109 9,291 10,412 (2,602) (25.0)%securitizationentities

Senior unsecured 7,965 7,962 7,960 7,957 9,454 (1,489) (15.7)%notes

Total borrowings 15,775 15,771 16,069 17,248 19,866 (4,091) (20.6)%

Accrued expenses and 4,690 4,295 4,428 4,205 4,718 (28) (0.6)%other liabilities

Total liabilities 83,247 83,559 84,645 86,068 89,738 (6,491) (7.2)%

Equity:

Preferred stock 734 734 734 734 734 - - %

Common stock 1 1 1 1 1 - - %

Additional paid-in 9,570 9,552 9,532 9,523 9,537 33 0.3%capital

Retained earnings 10,621 10,024 9,852 9,960 12,117 (1,496) (12.3)%

Accumulated othercomprehensive income (51) (31) (37) (49) (58) 7 (12.1)%(loss)

Treasury stock (8,174) (8,181) (8,183) (8,199) (7,243) (931) 12.9%

Total equity 12,701 12,099 11,899 11,970 15,088 (2,387) (15.8)%

Total liabilities $95,948 $95,658 $96,544 $98,038 $104,826 $(8,878) (8.5)%and equity

(1) Effective January 1, 2020, the Company adopted ASU 2016-13, FinancialInstruments-Credit Losses ("CECL") that measures the allowance for creditlosses based on management's best estimate of expected credit losses for thelife of our loan receivables. Prior periods presented reflect measurement ofthe allowance based on management's estimate of probable incurred credit lossesin accordance with the previous accounting guidance effective for thoseperiods.

SYNCHRONY FINANCIAL

AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN

(unaudited, $ in millions)

Quarter Ended

Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 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 $11,244 $4 0.14% $13,664 $4 0.12% $15,413 $3 0.08% $12,902 $42 1.31% $16,269 $68 1.66%and equivalents

Securities available for 8,706 8 0.37% 7,984 12 0.60% 6,804 19 1.12% 5,954 25 1.69% 4,828 25 2.05%sale

Loan receivables,including held for sale:

Credit cards 76,039 3,908 20.45% 74,798 3,752 19.96% 75,942 3,740 19.81% 81,716 4,272 21.03% 81,960 4,409 21.34%

Consumer installment 2,057 50 9.67% 1,892 46 9.67% 1,546 37 9.63% 1,432 35 9.83% 2,058 48 9.25%loans

Commercial credit 1,293 23 7.08% 1,238 22 7.07% 1,150 30 10.49% 1,243 33 10.68% 1,311 34 10.29%products

Other 63 - - % 77 1 NM 59 1 NM 37 - - % 47 1 NM

Total loan receivables, 79,452 3,981 19.93% 78,005 3,821 19.49% 78,697 3,808 19.46% 84,428 4,340 20.67% 85,376 4,492 20.87%including held for sale

Total interest-earning 99,402 3,993 15.98% 99,653 3,837 15.32% 100,914 3,830 15.26% 103,284 4,407 17.16% 106,473 4,585 17.08%assets

Non-interest-earningassets:

Cash and due from banks 1,525 1,489 1,486 1,450 1,326

Allowance for credit (10,190) (9,823) (9,221) (8,708) (5,593)losses

Other assets 5,228 5,021 4,779 4,696 3,872

Totalnon-interest-earning (3,437) (3,313) (2,956) (2,562) (395)assets

Total assets $95,965 $96,340 $97,958 $100,722 $106,078

Liabilities

Interest-bearingliabilities:

Interest-bearing deposit $62,800 $200 1.27% $63,569 $245 1.53% $64,298 $293 1.83% $64,366 $356 2.22% $65,380 $383 2.32%accounts

Borrowings ofconsolidated 7,809 52 2.65% 8,057 53 2.62% 8,863 59 2.68% 9,986 73 2.94% 10,831 80 2.93%securitization entities

Senior unsecured notes 7,963 82 4.10% 7,960 82 4.10% 7,958 82 4.14% 8,807 88 4.02% 9,452 93 3.90%

Total interest-bearing 78,572 334 1.69% 79,586 380 1.90% 81,119 434 2.15% 83,159 517 2.50% 85,663 556 2.58%liabilities

Non-interest-bearingliabilities

Non-interest-bearing 308 307 309 299 281deposit accounts

Other liabilities 4,663 4,308 4,349 4,672 4,906

Totalnon-interest-bearing 4,971 4,615 4,658 4,971 5,187liabilities

Total liabilities 83,543 84,201 85,777 88,130 90,850

Equity

Total equity 12,422 12,139 12,181 12,592 15,228

Total liabilities and $95,965 $96,340 $97,958 $100,722 $106,078equity

Net interest income $3,659 $3,457 $3,396 $3,890 $4,029

Interest rate spread^(1) 14.29% 13.42% 13.11% 14.66% 14.50%

Net interest margin^(2) 14.64% 13.80% 13.53% 15.15% 15.01%

(1) Interest rate spread represents the difference between the yield on totalinterest-earning assets and the rate on total interest-bearing liabilities.

(2) Net interest margin represents net interest income divided by averageinterest-earning assets.

SYNCHRONY FINANCIAL

AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN

(unaudited, $ in millions)

Twelve Months Ended Twelve Months Ended Dec 31, 2020 Dec 31, 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 $13,301 $53 0.40% $12,320 $258 2.09%

Securities available for sale 7,367 64 0.87% 5,464 127 2.32%

Loan receivables, including held for sale:

Credit cards 77,115 15,672 20.32% 85,334 18,384 21.54%

Consumer installment loans 1,733 168 9.69% 1,963 182 9.27%

Commercial credit products 1,231 108 8.77% 1,306 137 10.49%

Other 59 2 3.39% 46 2 4.35%

Total loan receivables, including held for 80,138 15,950 19.90% 88,649 18,705 21.10%sale

Total interest-earning assets 100,806 16,067 15.94% 106,433 19,090 17.94%

Non-interest-earning assets:

Cash and due from banks 1,488 1,327

Allowance for credit losses (9,488) (5,902)

Other assets 4,932 3,819

Total non-interest-earning assets (3,068) (756)

Total assets $97,738 $105,677

Liabilities

Interest-bearing liabilities:

Interest-bearing deposit accounts $63,755 $1,094 1.72% $64,756 $1,566 2.42%

Borrowings of consolidated securitization 8,675 237 2.73% 11,941 358 3.00%entities

-

Senior unsecured notes 8,171 334 4.09% 9,310 367 3.94%

Total interest-bearing liabilities 80,601 1,665 2.07% 86,007 2,291 2.66%

Non-interest-bearing liabilities

Non-interest-bearing deposit accounts 306 280

Other liabilities 4,498 4,473

Total non-interest-bearing liabilities 4,804 4,753

Total liabilities 85,405 90,760

Equity

Total equity 12,333 14,917

Total liabilities and equity $97,738 $105,677

Net interest income $14,402 $16,799

Interest rate spread^(1) 13.87% 15.28%

Net interest margin^(2) 14.29% 15.78%

(1) Interest rate spread represents the difference between the yield on totalinterest-earning assets and the rate on total interest-bearing liabilities.

(2) Net interest margin represents net interest income divided by averageinterest-earning assets.

SYNCHRONY FINANCIAL

BALANCE SHEET STATISTICS

(unaudited, $ in millions, except per share statistics)

Quarter Ended

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Dec 31, 2020 vs. 2020 2020 2020 2020 2019 Dec 31, 2019

BALANCE SHEET STATISTICS

Total common equity $11,967 $11,365 $11,165 $11,236 $14,354 $(2,387) (16.6)%

Total common equity as a % of total assets 12.47% 11.88% 11.56% 11.46% 13.69% (1.22)%

Tangible assets $93,745 $93,489 $94,300 $95,752 $102,483 $(8,738) (8.5)%

Tangible common equity^(1) $9,764 $9,196 $8,921 $8,950 $12,011 $(2,247) (18.7)%

Tangible common equity as a % of tangible assets^(1) 10.42% 9.84% 9.46% 9.35% 11.72% (1.30)%

Tangible common equity per share^(1) $16.72 $15.75 $15.28 $15.35 $19.50 $(2.78) (14.3)%

REGULATORY CAPITAL RATIOS^(2)(3)

Basel III - CECL Transition Basel III

Total risk-based capital ratio^(4) 18.1% 18.1% 17.6% 16.5% 16.3%

Tier 1 risk-based capital ratio^(5) 16.8% 16.7% 16.3% 15.2% 15.0%

Tier 1 leverage ratio^(6) 14.0% 13.3% 12.7% 12.3% 12.6%

Common equity Tier 1 capital ratio 15.9% 15.8% 15.3% 14.3% 14.1%

(1) Tangible common equity ("TCE") is a non-GAAP measure. We believe TCE is amore meaningful measure of the net asset value of the Company to investors. Forcorresponding reconciliation of TCE to a GAAP financial measure, seeReconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

(2) Regulatory capital ratios at December 31, 2020 are preliminary andtherefore subject to change.

(3) Capital ratios starting March 31, 2020 reflect election to delay for twoyears an estimate of CECL's effect on regulatory capital in accordance with theinterim final rule issued by U.S. banking agencies in March 2020.

(4) Total risk-based capital ratio is the ratio of total risk-based capitaldivided by risk-weighted assets.

(5) Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided byrisk-weighted assets.

(6) Tier 1 leverage ratio is the ratio of Tier 1 capital divided by totalaverage assets, after certain adjustments. Tier 1 leverage ratios are basedupon the use of daily averages for all periods presented.

SYNCHRONY FINANCIAL

PLATFORM RESULTS

(unaudited, $ in millions)

Quarter Ended Twelve Months Ended

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, 4Q'20 vs. 4Q'19 Dec 31, Dec 31, YTD'20 vs. YTD'19 2020 2020 2020 2020 2019 2020 2019

RETAIL CARD

Purchase volume^(1)(2) $31,256 $27,374 $24,380 $24,008 $30,968 $288 0.9% $107,018 $114,440 $(7,422) (6.5)%

Period-end loan receivables $52,130 $49,595 $49,967 $52,390 $56,387 $(4,257) (7.5)% $52,130 $56,387 $(4,257) (7.5)%

Average loan receivables, including held for sale $50,235 $49,503 $50,238 $53,820 $54,505 $(4,270) (7.8)% $50,943 $58,984 $(8,041) (13.6)%

Average active accounts (in thousands)^(2)(3) 49,001 47,065 46,970 53,018 54,662 (5,661) (10.4)% 49,258 57,073 (7,815) (13.7)%

Interest and fees on loans $2,719 $2,619 $2,640 $3,037 $3,143 $(424) (13.5)% $11,015 $13,557 $(2,542) (18.8)%

Other income $50 $84 $56 $59 $77 $(27) (35.1)% $249 $277 $(28) (10.1)%

Retailer share arrangements $(1,026) $(877) $(752) $(904) $(988) $(38) 3.8% $(3,559) $(3,762) $203 (5.4)%

PAYMENT SOLUTIONS

Purchase volume^(1)(2) $5,942 $5,901 $4,823 $5,375 $6,402 $(460) (7.2)% $22,041 $23,880 $(1,839) (7.7)%

Period-end loan receivables $20,153 $19,550 $19,119 $19,973 $20,528 $(375) (1.8)% $20,153 $20,528 $(375) (1.8)%

Average loan receivables, including held for sale $19,734 $19,247 $19,065 $20,344 $20,701 $(967) (4.7)% $19,597 $19,918 $(321) (1.6)%

Average active accounts (in thousands)^(2)(3) 11,536 11,497 11,900 12,681 12,713 (1,177) (9.3)% 11,921 12,451 (530) (4.3)%

Interest and fees on loans $673 $650 $632 $706 $737 $(64) (8.7)% $2,661 $2,829 $(168) (5.9)%

Other income $4 $13 $14 $13 $4 $- - % $44 $15 $29 193.3%

Retailer share arrangements $(17) $(20) $(18) $(18) $(37) $20 (54.1)% $(73) $(85) $12 (14.1)%

CARECREDIT

Purchase volume^(1) $2,676 $2,738 $1,952 $2,659 $2,842 $(166) (5.8)% $10,025 $11,091 $(1,066) (9.6)%

Period-end loan receivables $9,584 $9,376 $9,227 $10,106 $10,300 $(716) (7.0)% $9,584 $10,300 $(716) (7.0)%

Average loan receivables, including held for sale $9,483 $9,255 $9,394 $10,264 $10,170 $(687) (6.8)% $9,598 $9,747 $(149) (1.5)%

Average active accounts (in thousands)^(3) 5,724 5,708 5,966 6,379 6,359 (635) (10.0)% 5,952 6,197 (245) (4.0)%

Interest and fees on loans $589 $552 $536 $597 $612 $(23) (3.8)% $2,274 $2,319 $(45) (1.9)%

Other income $28 $34 $25 $25 $23 $5 21.7% $112 $79 $33 41.8%

Retailer share arrangements $(4) $(2) $(3) $(4) $(4) $- - % $(13) $(11) $(2) 18.2%

TOTAL SYF

Purchase volume^(1)(2) $39,874 $36,013 $31,155 $32,042 $40,212 $(338) (0.8)% $139,084 $149,411 $(10,327) (6.9)%

Period-end loan receivables $81,867 $78,521 $78,313 $82,469 $87,215 $(5,348) (6.1)% $81,867 $87,215 $(5,348) (6.1)%

Average loan receivables, including held for sale $79,452 $78,005 $78,697 $84,428 $85,376 $(5,924) (6.9)% $80,138 $88,649 $(8,511) (9.6)%

Average active accounts (in thousands)^(2)(3) 66,261 64,270 64,836 72,078 73,734 (7,473) (10.1)% 67,131 75,721 (8,590) (11.3)%

Interest and fees on loans $3,981 $3,821 $3,808 $4,340 $4,492 $(511) (11.4)% $15,950 $18,705 $(2,755) (14.7)%

Other income $82 $131 $95 $97 $104 $(22) (21.2)% $405 $371 $34 9.2%

Retailer share arrangements $(1,047) $(899) $(773) $(926) $(1,029) $(18) 1.7% $(3,645) $(3,858) $213 (5.5)%

(1) Purchase volume, or net credit sales, represents the aggregate amount ofcharges incurred on credit cards or other credit product accounts less returnsduring the period.

(2) Includes activity and balances associated with loan receivables held forsale.

(3) Active accounts represent credit card or installment loan accounts on whichthere 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

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, 2020 2020 2020 2020 2019

COMMON EQUITY AND REGULATORYCAPITAL MEASURES^(2)

GAAP Total equity $12,701 $12,099 $11,899 $11,970 $15,088

Less: Preferred stock (734) (734) (734) (734) (734)

Less: Goodwill (1,078) (1,078) (1,078) (1,078) (1,078)

Less: Intangible assets, net (1,125) (1,091) (1,166) (1,208) (1,265)

Tangible common equity $9,764 $9,196 $8,921 $8,950 $12,011

Add: CECL transition amount 2,686 2,656 2,570 2,417 -

Adjustments for certain deferredtax liabilities and certain items 341 305 302 304 319in accumulated comprehensive income(loss)

Common equity Tier 1 $12,791 $12,157 $11,793 $11,671 $12,330

Preferred stock 734 734 734 734 734

Tier 1 capital $13,525 $12,891 $12,527 $12,405 $13,064

Add: Allowance for credit losses 1,079 1,034 1,031 1,082 1,147includible in risk-based capital

Total Risk-based capital $14,604 $13,925 $13,558 $13,487 $14,211

ASSET MEASURES^(2)

Total average assets $95,965 $96,340 $97,958 $100,722 $106,078

Adjustments for:

Add: CECL transition amount 2,686 2,656 2,570 2,417 -

Disallowed goodwill and otherdisallowed intangible assets (1,924) (1,906) (1,980) (2,010) (2,059)(net of related deferred taxliabilities) and other

Total assets for leverage purposes $96,727 $97,090 $98,548 $101,129 $104,019

Risk-weighted assets $80,561 $76,990 $77,048 $81,639 $87,302

CECL FULLY PHASED-IN CAPITALMEASURES

Tier 1 capital $13,525 $12,891 $12,527 $12,405 $13,064

Less: CECL transition adjustment (2,686) (2,656) (2,570) (2,417) -

Tier 1 capital (CECL fully $10,839 $10,235 $9,957 $9,988 $13,064phased-in)

Add: Allowance for credit losses 10,265 10,146 9,802 9,175 5,602

Tier 1 capital (CECL fullyphased-in) + Reserves for credit $21,104 $20,381 $19,759 $19,163 $18,666losses

Risk-weighted assets $80,561 $76,990 $77,048 $81,639 $87,302

Less: CECL transition adjustment (2,477) (2,447) (2,361) (2,204) -

Risk-weighted assets (CECL fully $78,084 $74,543 $74,687 $79,435 $87,302phased-in)

TANGIBLE COMMON EQUITY PER SHARE

GAAP book value per share $20.49 $19.47 $19.13 $19.27 $23.31

Less: Goodwill (1.85) (1.85) (1.85) (1.85) (1.75)

Less: Intangible assets, net (1.92) (1.87) (2.00) (2.07) (2.06)

Tangible common equity per share $16.72 $15.75 $15.28 $15.35 $19.50

(1) Regulatory measures at December 31, 2020 are presented on an estimatedbasis.

(2) Capital ratios starting March 31, 2020 reflect election to delay for twoyears an estimate of CECL's effect on regulatory capital in accordance with theinterim final rule issued by U.S. banking agencies in March 2020

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SOURCE Synchrony