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Michelle Romero: Michelle.Romero@syf.com Tyler Allen: Tyler.Allen@syf.com
Press Release
April 28, 2017, 4:54 PM EDT
“We continued to execute our business strategies which helped us generate strong organic growth in each of our sales platforms. We are augmenting organic growth with the launch of new programs and the expansion of our network, while remaining focused on the application and development of digital innovations and analytics capabilities. Furthermore, we continued strong growth in our direct deposit platform, which supports our operating objectives,” said Margaret Keane, President and Chief Executive Officer of Synchrony Financial. “We have maintained solid returns and a strong balance sheet as we continue to focus on growth and returning capital to shareholders.”
Business and Financial Highlights for the First Quarter of 2017
All comparisons below are for the first quarter of 2017 compared to the first quarter of 2016, unless otherwise noted.
Earnings
Balance Sheet
Key Financial Metrics
Credit Quality
Sales Platforms
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 in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed February 23, 2017, and the Company’s forthcoming Quarterly Report on Form 10-Q for the quarter ended March 31, 2017. 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, April 28, 2017, at 8:30 a.m. Eastern Time, Margaret Keane, President and Chief Executive Officer, and Brian Doubles, 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 be available on the website or by dialing (888) 843-7419 (U.S. domestic) or (630) 652-3042 (international), passcode 12017#, and can be accessed beginning approximately two hours after the event through May 12, 2017.
About Synchrony Financial
Synchrony Financial (NYSE: SYF) is one of the nation’s premier consumer financial services companies. Our roots in consumer finance trace back to 1932, and today we are the largest provider of private label credit cards in the United States based on purchase volume and receivables.* We provide a range of credit products through programs we have established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers to help generate growth for our partners and offer financial flexibility to our customers. Through our partners’ over 365,000 locations across the United States and Canada, and their websites and mobile applications, we offer our customers a variety of credit products to finance the purchase of goods and services. Synchrony Financial offers private label and co-branded Dual Card™ credit cards, promotional financing and installment lending, loyalty programs and FDIC-insured savings products through Synchrony Bank. More information can be found at www.synchronyfinancial.com, facebook.com/SynchronyFinancial,www.linkedin.com/company/synchrony-financial and twitter.com/SYFNews.
*Source: The Nilson Report (May 2016, Issue # 1087) - based on 2015 data.
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; retaining existing partners and attracting new partners, concentration of our revenue in a small number of Retail Card partners, promotion and support of our products by our partners, and financial performance of our partners; cyber-attacks or other security breaches; higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to securitize our loans, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loans, and lower payment rates on our securitized loans; our ability to grow our deposits in the future; 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, the sufficiency of our allowance for loan losses and the accuracy of the assumptions or estimates used in preparing our financial statements; 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 strategic investments; reductions in interchange fees; fraudulent activity; failure of third parties to provide various services that are important to our operations; disruptions in the operations of our computer systems and data centers; 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; damage to our reputation; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions 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 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 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, 2016, as filed on February 23, 2017. You should not consider any list of such factors to be an exhaustive statement of all of 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 capital ratios, 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
1Q'17 vs. 1Q'16
Mar 31,
Dec 31,
Sep 30,
Jun 30,
2017
2016
EARNINGS
Net interest income
$3,587
$3,628
$3,481
$3,212
$3,209
$378
11.80%
Retailer share arrangements
-684
-811
-757
-664
-670
-14
2.10%
Net interest income, after retailer share arrangements
2,903
2,817
2,724
2,548
2,539
364
14.30%
Provision for loan losses
1,306
1,076
986
1,021
903
403
44.60%
Net interest income, after retailer share arrangements and provision for loan losses
1,597
1,741
1,738
1,527
1,636
-39
-2.40%
Other income
93
85
84
83
92
1
1.10%
Other expense
908
918
859
839
800
108
13.50%
Earnings before provision for income taxes
782
963
771
928
-146
-15.70%
Provision for income taxes
283
332
359
282
346
-63
-18.20%
Net earnings
$499
$576
$604
$489
$582
($83)
-14.30%
Net earnings attributable to common stockholders
COMMON SHARE STATISTICS
Basic EPS
$0.61
$0.70
$0.73
$0.59
($0.09)
-12.90%
Diluted EPS
$0.58
Dividend declared per share
$0.13
-
NM
Common stock price
$34.30
$36.27
$28.00
$25.28
$28.66
$5.64
19.70%
Book value per share
$17.71
$17.37
$16.94
$16.45
$15.84
$1.87
Tangible common equity per share(1)
$15.47
$15.34
$14.90
$14.46
$13.86
$1.61
11.60%
Beginning common shares outstanding
817.4
825.5
833.9
833.8
-16.4
-2.00%
Issuance of common shares
- %
Stock-based compensation
0.1
Shares repurchased
-6.6
-8.1
-8.5
Ending common shares outstanding
810.8
-23
-2.80%
Weighted average common shares outstanding
813.1
820.5
828.4
-20.7
-2.50%
Weighted average common shares outstanding (fully diluted)
817.1
823.8
830.6
836.2
835.5
-18.4
-2.20%
(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.
SELECTED METRICS
(unaudited, $ in millions, except account data)
PERFORMANCE METRICS
Return on assets(1)
2.30%
2.60%
2.80%
2.40%
-0.50%
Return on equity(2)
14.10%
16.20%
17.30%
14.50%
18.10%
-4.00%
Return on tangible common equity(3)
16.10%
18.40%
19.60%
16.50%
20.70%
-4.60%
Net interest margin(4)
16.18%
16.26%
16.34%
15.94%
15.84%
0.34%
Efficiency ratio(5)
30.30%
31.60%
30.60%
31.90%
30.40%
-0.10%
Other expense as a % of average loan receivables, including held for sale
4.97%
5.04%
4.93%
5.07%
4.86%
0.11%
Effective income tax rate
36.20%
36.60%
37.30%
-1.10%
CREDIT QUALITY METRICS
Net charge-offs as a % of average loan receivables, including held for sale
5.33%
4.65%
4.39%
4.51%
4.74%
0.59%
30+ days past due as a % of period-end loan receivables(6)
4.25%
4.32%
4.26%
3.79%
3.85%
0.40%
90+ days past due as a % of period-end loan receivables(6)
2.06%
2.03%
1.89%
1.67%
1.84%
0.22%
Net charge-offs
$974
$847
$765
$747
$780
$194
24.90%
Loan receivables delinquent over 30 days(6)
$3,120
$3,295
$3,008
$2,585
$2,538
22.90%
Loan receivables delinquent over 90 days(6)
$1,508
$1,546
$1,334
$1,143
$1,212
$296
24.40%
Allowance for loan losses (period-end)
$4,676
$4,344
$4,115
$3,894
$3,620
$1,056
29.20%
Allowance coverage ratio(7)
6.37%
5.69%
5.82%
5.70%
5.50%
0.87%
BUSINESS METRICS
Purchase volume(8)
$28,880
$35,369
$31,615
$31,507
$26,977
$1,903
7.10%
Period-end loan receivables
$73,350
$76,337
$70,644
$68,282
$65,849
$7,501
11.40%
Credit cards
$70,587
$73,580
$67,858
$65,511
$63,309
$7,278
11.50%
Consumer installment loans
$1,411
$1,384
$1,361
$1,293
$1,184
$227
19.20%
Commercial credit products
$1,311
$1,333
$1,385
$1,389
$1,318
($7)
Other
$41
$40
$89
$38
$3
7.90%
Average loan receivables, including held for sale
$74,132
$72,476
$69,316
$66,561
$66,194
$7,938
12.00%
Period-end active accounts (in thousands)(9)
67,905
71,890
66,781
66,491
64,689
3,216
5.00%
Average active accounts (in thousands)(9)
69,629
68,701
66,639
65,531
66,134
3,495
5.30%
LIQUIDITY
Liquid assets
Cash and equivalents
$11,392
$9,321
$13,588
$11,787
$12,500
($1,108)
-8.90%
Total liquid assets
$16,158
$13,612
$16,362
$13,956
$14,915
$1,243
8.30%
Undrawn credit facilities
$5,600
$6,700
$7,150
$7,025
$7,325
($1,725)
-23.50%
Total liquid assets and undrawn credit facilities
$21,758
$20,312
$23,512
$20,981
$22,240
($482)
Liquid assets % of total assets
18.14%
15.09%
18.77%
16.94%
18.27%
-0.13%
Liquid assets including undrawn credit facilities % of total assets
24.43%
22.52%
26.98%
25.47%
27.24%
-2.81%
(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 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, after retailer share arrangements, plus other income.
(6) Based on customer statement-end balances extrapolated to the respective period-end date.
(7) Allowance coverage ratio represents allowance for loan 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) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.
STATEMENTS OF EARNINGS
(unaudited, $ in millions)
Interest income:
Interest and fees on loans
$3,877
$3,919
$3,771
$3,494
$3,498
$379
10.80%
Interest on investment securities
36
28
25
21
22
14
63.60%
Total interest income
3,913
3,947
3,796
3,515
3,520
393
11.20%
Interest expense:
Interest on deposits
194
188
179
172
12.80%
Interest on borrowings of consolidated securitization entities
65
64
63
59
58
7
12.10%
Interest on third-party debt
67
81
-17.30%
Total interest expense
326
319
315
303
311
15
4.80%
3,587
3,628
3,481
3,212
3,209
378
Other income:
Interchange revenue
145
167
154
151
130
Debt cancellation fees
68
4
6.30%
Loyalty programs
-137
-157
-145
-135
-110
-27
24.50%
17
8
9
112.50%
Total other income
Other expense:
Employee costs
325
301
280
45
Professional fees
164
174
146
5
3.40%
Marketing and business development
94
107
Information processing
90
88
87
82
9.80%
248
221
195
196
198
50
25.30%
Total other expense
STATEMENTS OF FINANCIAL POSITION
Mar 31, 2017 vs. Mar 31, 2016
Assets
Investment securities
5,328
5,110
3,356
2,723
2,949
2,379
80.70%
Loan receivables:
Unsecuritized loans held for investment
50,398
52,332
47,517
44,854
41,730
8,668
20.80%
Restricted loans of consolidated securitization entities
22,952
24,005
23,127
23,428
24,119
-1,167
-4.80%
Total loan receivables
73,350
76,337
70,644
68,282
65,849
7,501
Less: Allowance for loan losses
-4,676
-4,344
-4,115
-3,894
-3,620
-1,056
Loan receivables, net
68,674
71,993
66,529
64,388
62,229
6,445
10.40%
Goodwill
992
949
43
4.50%
Intangible assets, net
826
712
733
704
702
124
17.70%
Other assets
1,838
2,122
2,004
1,833
2,327
-489
-21.00%
Total assets
$89,050
$90,207
$87,159
$82,384
$81,656
$7,394
9.10%
Liabilities and Equity
Deposits:
Interest-bearing deposit accounts
$51,359
$51,896
$49,611
$46,220
$44,721
$6,638
14.80%
Non-interest-bearing deposit accounts
246
159
204
207
256
-10
-3.90%
Total deposits
51,605
52,055
49,815
46,427
44,977
6,628
14.70%
Borrowings:
Borrowings of consolidated securitization entities
12,433
12,388
12,411
12,236
12,423
10
0.10%
Bank term loan
1,494
-1,494
Senior unsecured notes
7,761
7,759
7,756
7,059
6,559
1,202
18.30%
Total borrowings
20,194
20,147
20,167
19,295
20,476
-282
-1.40%
Accrued expenses and other liabilities
2,888
3,809
3,196
2,947
2,999
-111
-3.70%
Total liabilities
74,687
76,011
73,178
68,669
68,452
6,235
Equity:
Common stock
Additional paid-in capital
9,405
9,393
9,381
9,370
9,359
46
0.50%
Retained earnings
5,724
5,330
4,861
4,364
3,875
1,849
47.70%
Accumulated other comprehensive income:
-55
-53
-24
-20
-31
77.40%
Treasury Stock
-712
-475
-238
Total equity
14,363
14,196
13,981
13,715
13,204
1,159
8.80%
Total liabilities and equity
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
31-Mar-17
31-Dec-16
30-Sep-16
30-Jun-16
31-Mar-16
Interest
Average
Income/
Yield/
Balance
Expense
Rate
Interest-earning assets:
Interest-earning cash and equivalents
$10,552
$21
0.81%
$12,210
$17
0.55%
$12,480
$16
0.51%
$11,623
$14
0.48%
$12,291
0.52%
Securities available for sale
5,213
1.17%
4,076
11
1.07%
2,960
1.21%
2,858
0.99%
2,977
6
Credit cards, including held for sale
71,365
3,811
21.66%
69,660
3,851
21.99%
66,519
3,705
22.16%
63,876
3,432
21.61%
63,688
3,436
21.70%
1,389
32
9.34%
1,373
31
8.98%
1,333
9.25%
1,233
9.13%
1,154
27
9.41%
1,317
34
10.47%
1,386
10.33%
1,401
35
9.94%
1,388
33
9.56%
1,313
10.72%
61
57
39
Total loan receivables, including held for sale
74,132
3,877
21.21%
72,476
3,919
21.51%
69,316
3,771
21.64%
66,561
3,494
21.11%
66,194
3,498
21.25%
Total interest-earning assets
89,897
17.65%
88,762
17.69%
84,756
17.82%
81,042
17.44%
81,462
17.38%
Non-interest-earning assets:
Cash and due from banks
802
739
862
895
1,367
Allowance for loan losses
-4,408
-4,228
-3,933
-3,732
-3,590
3,177
3,479
3,189
3,208
3,271
Total non-interest-earning assets
-429
118
371
1,048
$89,468
$88,752
$84,874
$81,413
$82,510
Liabilities
Interest-bearing liabilities:
$51,829
1.52%
$51,006
$188
1.47%
$47,895
1.56%
$45,523
$179
1.58%
$44,304
$172
12,321
2.14%
12,389
12,254
2.05%
12,211
1.94%
12,860
1.81%
Bank term loan(1)
2,170
24
4.45%
7,760
3.50%
7,757
3.44%
7,448
3.42%
6,861
6,557
Total interest-bearing liabilities
71,910
71,152
1.78%
67,597
1.85%
64,660
1.88%
65,891
1.90%
Non-interest-bearing liabilities
240
176
208
235
Other liabilities
2,995
3,321
3,175
3,002
3,455
Total non-interest-bearing liabilities
3,235
3,497
3,379
3,210
3,690
75,145
74,649
70,976
67,870
69,581
Equity
14,323
14,103
13,898
13,543
12,929
Interest rate spread(2)
15.81%
15.91%
15.97%
15.56%
15.48%
Net interest margin(3)
(1) The effective interest rates for the Bank term loan for the quarters ended June 30, 2016, March 31, 2016 were 2.51% and 2.47% respectively. The Bank term loan effective rate excludes the impact of charges incurred in connection with prepayments of the loan.
(2) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average interest-earning assets.
BALANCE SHEET STATISTICS
(unaudited, $ in millions, except per share statistics)
Total common equity
$14,363
$14,196
$13,981
$13,715
$13,204
$1,159
Total common equity as a % of total assets
16.13%
15.74%
16.04%
16.65%
16.17%
-0.04%
Tangible assets
$87,232
$88,546
$85,477
$80,731
$80,005
$7,227
9.00%
Tangible common equity(1)
$12,545
$12,535
$12,299
$12,062
$11,553
$992
8.60%
Tangible common equity as a % of tangible assets(1)
14.38%
14.16%
14.39%
14.94%
14.44%
-0.06%
REGULATORY CAPITAL RATIOS(2)
Basel III Transition
Total risk-based capital ratio(3)
19.30%
18.50%
19.50%
19.80%
19.40%
Tier 1 risk-based capital ratio(4)
18.00%
17.20%
18.20%
Tier 1 leverage ratio(5)
15.00%
15.40%
15.70%
14.90%
Common equity Tier 1 capital ratio(6)
Basel III Fully Phased-in
17.00%
17.90%
17.50%
(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 metrics at March 31, 2017 are preliminary and therefore subject to change.
(3) Total risk-based capital ratio is the ratio of total risk-based capital divided by risk-weighted assets.
(4) Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided by risk-weighted assets.
(5) 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.
(6) 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.
PLATFORM RESULTS
RETAIL CARD
Purchase volume(1)(2)
$22,952
$28,996
$25,285
$25,411
$21,550
$1,402
6.50%
$49,905
$52,701
$48,010
$46,705
$45,113
$4,792
10.60%
$50,644
$49,476
$47,274
$45,593
$45,479
$5,165
Average active accounts (in thousands)(2)(3)
55,049
54,489
52,959
52,314
52,969
2,080
3.90%
Interest and fees on loans(2)
$2,888
$2,909
$2,790
$2,614
$274
10.50%
Other income(2)
$77
$70
$69
$79
($2)
Retailer share arrangements(2)
($681)
($801)
($752)
($656)
($661)
($20)
3.00%
PAYMENT SOLUTIONS
Purchase volume(1)
$3,686
$4,194
$4,152
$3,903
$3,392
$294
8.70%
15,320
$15,567
$14,798
$13,997
$13,420
$1,900
14.20%
Average loan receivables
15,424
$15,076
$14,367
$13,554
$13,430
$1,994
Average active accounts (in thousands)(3)
9,090
8,844
8,461
8,153
8,134
956
$515
$523
$505
$467
$457
$58
12.70%
$4
$-
($1)
($9)
($3)
$6
-85.70%
CARECREDIT
$2,242
$2,179
$2,178
$2,193
$2,035
$207
10.20%
$8,125
$8,069
$7,836
$7,580
$7,316
$809
11.10%
$8,064
$7,924
$7,675
$7,414
$7,285
$779
10.70%
5,490
5,368
5,219
5,064
5,031
459
$474
$487
$476
$442
$427
$47
11.00%
$12
$11
$9
33.30%
TOTAL SYF
$93
$85
$84
$83
$92
$1
($684)
($811)
($757)
($664)
($670)
($14)
(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.
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES(1)
COMMON EQUITY MEASURES
GAAP Total common equity
Less: Goodwill
-992
-949
Less: Intangible assets, net
-826
-733
-704
-702
Tangible common equity
Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss)
340
337
299
281
Basel III - Common equity Tier 1 (fully phased-in)
$12,885
$12,872
$12,598
$12,344
$11,834
Adjustment related to capital components during transition
263
273
266
265
Basel III - Common equity Tier 1 (transition)
$13,039
$13,135
$12,871
$12,610
$12,099
RISK-BASED CAPITAL
Common equity Tier 1
Add: Allowance for loan losses includible in risk-based capital
954
994
923
890
869
Risk-based capital
$13,993
$14,129
$13,794
$13,500
$12,968
ASSET MEASURES
Total average assets(2)
Adjustments for:
Disallowed goodwill, other disallowed intangible assets (net of related deferred tax liabilities) and other
-1,358
-1,059
-1,117
-1,113
Total assets for leverage purposes
$88,110
$87,693
$83,757
$80,300
$81,393
Risk-weighted assets - Basel III (fully phased-in)(3)
$72,596
$75,941
$70,448
$68,462
$67,697
Risk-weighted assets - Basel III (transition)(3)
$72,627
$76,179
$70,660
$68,188
$66,689
TANGIBLE COMMON EQUITY PER SHARE
GAAP book value per share
-1.22
-1.16
-1.14
-1.02
-0.87
-0.9
-0.85
-0.84
Tangible common equity per share
(1) Regulatory measures at March 31, 2017 are presented on an estimated basis.
(2) Total average assets are presented based upon the use of daily averages.
(3) 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 Investor Relations Greg Ketron, 203-585-6291 or Media Relations Samuel Wang, 203-585-2933
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