Synchrony Financial : Q3'20 Earnings Presentation

3Q'20 Financial Results

October 20, 2020

Disclaimers

Cautionary Statement Regarding Forward-Looking Statements

The following slides are part of a presentation by Synchrony Financial in connection with reporting quarterly financial results. No representation is made that the information in these slides is complete. For additional information, see the earnings release and financial supplement included as exhibits to our Current Report on Form 8-K filed today and available on our website (www.synchronyfinancial.com) and the SEC's website (www.sec.gov). All references to net earnings and net income are intended to have the same meaning.

This presentation 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 presentation and in our public filings, including under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year

ended December 31, 2019, as filed on February 13, 2020, and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, as filed on July 23, 2020. You

should not consider any list of such factors to be an exhaustive statement of all the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

2

3Q'20 Highlights

Financial Highlights

• $313 million Net earnings, $0.52 diluted EPS
• • Other expense for the quarter included the impact from a restructuring charge of $89 million, or $67 million after-tax, which equates to an EPS reduction of $0.11
  • Increase in provision for credit losses for the quarter included impact from CECL implementation of $66 million, or $50 million after-tax, which equates to an EPS reduction of $0.09
• Core Growth metrics(a) down in 3Q'20 primarily due to COVID-19:
• • Loan receivables down 6%; down 5% on a Core basis
  • Interest and fees on loans down 22%; down 12% on a Core basis
  • Purchase volume down 6%; flat on a Core basis
  • Average active accounts down 16%; down 8% on a Core basis
• Net charge-offs 4.42% compared to 5.35% in the prior year
• Provision for credit losses up 19% primarily driven by reserve increase for projected impact of COVID-19 related losses and prior year reserve reduction related to Walmart, partially offset by lower net charge offs
• Efficiency ratio 39.7% compared to 30.8% in the prior year
• Deposits down $2.5 billion compared to prior year
• Strong capital and liquidity
• • 15.8% CET1 & $21.4 billion liquid assets
  • Maintained $0.22 dividend, which equates to $129 million of capital returned to shareholders

Business Highlights

• Renewed and extended a key relationship
• Launched a new program
• Added and extended partnerships

• Launched new partnerships with health systems

• Renewed and extended CareCredit relationships

(a) Growth Metrics shown above on a Core basis are non-GAAP measures and excludes from both the prior year and the current year amounts related to the Walmart and Yamaha	3
portfolios, sold in October 2019 and January 2020, respectively. See non-GAAP reconciliation in the appendix.

Venmo Credit Card

Apply in the	Unique Plastic	Use Mobile Phone to
Venmo App	Design	Scan Plastic

Native, easy experience	Five designs, personalized	Activate card	Send payments or
	with customer's QR code		split purchases
Smart, Dynamic	Easy Spend	Real-time
Rewards	Tracking	Alerts

Automatically added to	+ Virtual card for online	Notification channel/ type
Venmo account	transactions	controlled by cardholder

4

Accelerating Digital and Product Innovation

Expanded Digital Products &

Capabilities

• Next Gen Native SDK for Partner Integration
• Customer Alerting & Controls Platform
• Expansive API Platform
• SetPay Installment Product
• Adaptive Digital Rewards

Contactless Digital

Technology

• QR & Barcodes
• Digital Cards
• Direct To Device

Path To Purchase Credit Integration

Financing offer

Home Pageintegrated throughout customer experience

Product Page

Shopping Cart

Check Out

Check Out

29%

Mobile Channel

Application Growth*

* 3Q20 vs 3Q19 excluding Walmart

~60%

Digital

Applications*

* Percentage of Total Applications

47%

Online

Sales*

* Percentage of Retail Card total

>65%

Digital

Payments*

* 3Q20 % of Total Payments

~$8B

Payments Made

Through SyPI®*

* Through 3Q20

5

COVID-19 Impact on Core Metrics(a)

Purchase Volume Growth

% in YoY Growth Rates

Jan Feb Mar Apr May Jun Jul Aug Sep

10% 13%

5%

(6)%	(0)%	(3)%	(2)%
	(12)%
	(27)%

Platform Purchase Volume Growth

% in YoY Growth Rates

	Jan	Feb Mar Apr	May Jun Jul	Aug Sep
10%	13%		0%	1%	7%
Retail Card
	(2)%	(9)%	(3)%
		(21)%
10%	13%		1%
Payment
			(4)%	(7)% (4)%
Solutions	(11)%	(15)%
		(41)%
14%	18%		0%		5%
CareCredit			(4)%	(14)%

(22)%	(29)%
(60)%

New Accounts (b)

6.3	(17)%
5.3

3Q'193Q'20

YTD

17.7

14.1

(20)%

Purchase Volume per Account(c)

$517

$560

8%

3Q'193Q'20

Average Balance per Account(d)

$1,168

$1,214

4%

3Q'193Q'20

1. All metrics exclude from both the prior year and the current year amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively.

(b) New Accounts represent accounts that were approved in the respective period, in millions.	6
(c) Purchase Volume per Account is calculated as the Purchase volume divided by Average active accounts, in $.
(d) Average Balance per Account is calculated as the Average loan receivables divided by Average active accounts, in $.

COVID Forbearance Impact - Program-to-Date through Sept 30th

Min Pay Due (MPD)		Performance Statistics				Credit Score(a)
Enrollments	57%
$ in millions, accounts in thousands					11%
		Program-to-Date				Enrolled	30%			41%
$3,813		At Sept 30, 2020				Never Enrolled
			27%
		2,023	16%	35%			36%
			7%							17%
$227	119					24%
													6%
Balance	Accounts	Credit Line Utilization Payment Rate		Currently Enrolled	Not Enrolled
									< 600		601-660		661-720		721+

MPD Enrollment by

Date and Delinquency

Thousands	40
35

30

25

20

15

10

5

0

Current & < 30 days past due 30 + days past due

Payment Behavior of			Post-Program
Enrolled Accounts(b)			Delinquency (c)
					Current at Enrollment	6.5X
8%			DQ at Enrollment
34%
					3.3X
58%
					Q3'20: $15
		No Pay				Q3'20: $1
		Pay Less than Full Balance
		Pay Balance in Full			Entry Rate

1. Based on most recent FICO scores available for our customers in each period, weighted by balance, as a % of period-end receivables. If FICO score was not available, credit

bureau-based scores were mapped to a FICO equivalent. If neither score was available, the account was excluded.

7

1. Reflects September performance for percent of accounts by payment status ever enrolled in the program.
2. Entry rate performance based on August delinquency for accounts graduating from forbearance program in July 2020 as compared to accounts never enrolled.

Financial Results

Summary earnings statement

$ in millions, except per share statistics								B/(W)
	3Q'20			3Q'19			$			%
Total interest income	$3,837	$4,981	$(1,144) (23)%
Total interest expense	380		592		212		36%
Net interest income (NII)	3,457		4,389		(932)	(21)%
Retailer share arrangements (RSA)	(899)		(1,016)		117		12%
Provision for credit losses	1,210		1,019		(191)		(19)%
Other income	131		85		46		54%
Other expense	1,067		1,064		(3)		(0)%
Pre-Tax earnings	412		1,375		(963)	(70)%
Provision for income taxes	99		319		220		69%
Net earnings	313		1,056		(743)	(70)%
Preferred dividends	10		0		(10)			NM
Net earnings available to common	$303		$1,056	$(753) (71)%
stockholders
Diluted earnings per share	$0.52		$1.60		$(1.08)

3Q'20 Highlights

• $313 million Net earnings, $0.52 diluted EPS
• Net interest income down 21% driven by the impact of COVID-19 and the Walmart sale
• • Interest and fees on loans down 22% driven by the impact of COVID-19 and the Walmart sale
  • Interest expense decrease driven primarily by lower benchmark rates
• Retailer share arrangements down 12%
• Provision for credit losses up 19%
• • Increase is primarily driven by reserve increase for projected impact of COVID-19 related losses and prior year reserve reduction related to Walmart
  • Net charge-offs of 4.42% compared to 5.35% in the prior year primarily driven by the Walmart sale
• Other expense flat

8

Growth Metrics

Purchase volume
(6)%

Loan receivables

(6)%

$ in billions
$38.4	$36.0

$ in billions

$83.2$78.5

Core(a)

$36.0

$36.0

0%

	3Q'19	3Q'20
Dual Card /	$13.7	$13.1	(5)%
Co-Brand(b)

Average active accounts
(16)%
in millions
76.7
		64.3
Core(a)	69.7	64.3	(8)%

3Q'193Q'20

Core(a)

$82.3

$78.5

(5)%

	3Q'19	3Q'20
Dual Card /	$19.7	$18.3	(7)%
Co-Brand(b)

Interest and fees on loans
(22)%
$ in millions
$4,890
		$3,821
Core(a) $4,359	$3,821	(12)%

3Q'193Q'20

a)	Financial measures shown above on a Core basis are non-GAAP measures. See non-GAAP reconciliation in the appendix.	9
b)	Dual Card / Co-Brand Purchase volume and Loan receivables shown above are consumer only and excludes from the prior year amounts related to the Walmart portfolio.

Platform Results(a)

Retail Card

Loan receivables, $ in billions

Payment Solutions

Loan receivables, $ in billions

CareCredit

Loan receivables, $ in billions

$52.7

(6)%

$49.5

(5)%

$20.5 $19.6

$10.0

(7)%

$9.4

Core(b) $52.6

$49.5

(6)%

	3Q'19	3Q'20	V%
Purchase volume	$29.3	$27.4	(7)%
Accounts	58.1	47.1	(19)%
Interest and	$3,570	$2,619	(27)%
fees on loans

• Receivable reduction primarily due to COVID-19 partially offset by growth in digital partners
• Interest and fees on loans down 27% driven primarily by the Walmart sale and the decline in loan receivables

$19.7

$19.6

(1)%

3Q'19	3Q'20	V%
$6.3	$5.9	(6)%
12.4	11.5	(7)%
$721	$650	(10)%

• Core receivable reduction primarily due to COVID-19 partially offset by growth in Power
• Interest and fees on loans down 10% driven primarily by lower late fees

3Q'19	3Q'20	V%
$2.8	$2.7	(3)%
6.2	5.7	(8)%
$599	$552	(8)%

• Receivable reduction primarily due to COVID-19
• Interest and fees on loans down 8% driven primarily by lower merchant discount as a result of the decline in purchase volume

(a)	Accounts represent average active accounts in millions, which are credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in	10
	the current month. Purchase volume $ in billions and Interest and fees on loans $ in millions.
(b)	Loan receivables shown above on a Core basis is a non-GAAP measure. See non-GAAP reconciliation in the appendix.

Net Interest Income

Net interest income

$ in millions, % of average interest-earning assets

(21)%

$4,389

$3,457

16.29%

13.80%

3Q'193Q'20

3Q'20 Highlights

• Net interest income decreased 21% compared to prior year driven by the impact of COVID-19 and the Walmart sale
• • Interest and fees on loans decreased 22% compared to prior year primarily driven by the impact of COVID-19 and the Walmart sale
• Net interest margin (NIM) down 249bps.
• • Mix of Interest-earnings assets: (1.24)%
  • • Loan receivables mix as a percent of total Earning Assets decreased from 84.7% to 78.3%
  • Loan receivables yield: (1.64)%
  • • Loan receivables yield of 19.49%, down 193bps. versus prior year including approximately 75bps. of impact from Prime rate movement
  • Liquidity portfolio yield: (0.29)%
  • Interest-bearingliabilities cost: 0.68%
  • • Total cost decreased 81bps. to 1.90% due primarily to lower benchmark rates and lower deposit pricing

NIM Walk

3Q'19 NIM	16.29%
Mix of Interest-earning assets	(1.24)%
Loan receivables yield	(1.64)%
Liquidity portfolio yield	(0.29)%
Interest-bearing liabilities cost	0.68%
3Q'20 NIM	13.80%

11

Asset Quality Metrics

30+ days past due

$ in millions, % of period-end loan receivables

	$4,430
$4,021		$3,957	$3,625	$3,723	$3,874
			$3,500
4.59%	4.76%	4.92%	4.43%	4.47%	4.44%		$2,453	$2,100
	4.24%
							3.13%	2.67%	(a)
3Q'18	4Q'18	1Q'19	2Q'19	3Q'19	4Q'19	1Q'20	2Q'20	3Q'20
90+ days past due
$ in millions, % of period-end loan receivables
	$2,135	$2,019
				$1,877
$1,833			$1,768	$1,723	$1,735
							$1,384
2.09%	2.29%	2.51%	2.16%	2.07%	2.15%	2.10%		$973
		1.77%
								(a)
								1.24%
3Q'18	4Q'18	1Q'19	2Q'19	3Q'19	4Q'19	1Q'20	2Q'20	3Q'20

Net charge-offs
$ in millions, % of average loan receivables including held for sale
	$1,248	$1,344	$1,331
			$1,221
					$1,125
$1,087					$1,109	$1,046
								$866
	5.54%	6.06%	6.01%	5.35%	5.15%	5.36%	5.35%	(a)
4.97%
						4.42%
3Q'18	4Q'18	1Q'19	2Q'19	3Q'19	4Q'19	1Q'20	2Q'20	3Q'20

Allowance for credit losses(b)

$ in millions, % of period-end loan receivables

$9,802 $10,146

$9,175

12.52% 12.92%

$6,223 $6,427 $5,942 $5,809 $5,607 $5,602 11.13%

$6,053 $6,197 $6,475

7.11% 6.90% 7.39% 7.10% 6.74% 6.42%

7.34%	7.91%	8.25%

3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20

1. Excluding the Walmart Portfolio, 3Q'20 30+ rate was down ~175bps versus 3Q'19; 3Q'20 net charge-off rate was down ~45bps versus 3Q'19; 3Q'20 90+ rate was down ~80bps

versus 3Q'19.	12
(b) Allowance for credit losses reflects adoption of CECL on January 1, 2020, which included a $3.0 billion increase in reserves upon adoption. For comparability purposes, allowance
for loan losses in FY20 is also presented. This measure reflects the prior accounting guidance and is a non-GAAP measure for FY20. See non-GAAP reconciliation in appendix.

Other Expense

Other expense				0%
												3Q'20 Highlights
$ in millions
$1,064	$1,067
														•	Other expense flat
																- The restructuring charge and expenses related
																to the COVID-19 response were offset by cost
																reductions from Walmart, lower purchase
																volume and accounts, and reductions in
																certain discretionary spend
														• Efficiency ratio 39.7% vs. 30.8% prior year
																- Other expense was negatively impacted by the
																restructuring charge and expenditures related
																to our response to COVID-19
			3Q'19		3Q'20		V$		V%
																- Excluding these impacts, efficiency ratio would
Employee costs	$359		$382		$23	6%				have been 3.7pts lower in 3Q'20, or 36.0% for
Professional fees	205		187		(18)	(9)%				the quarter
Marketing/BD	139		107		(32)	(23)%			- Increase in ratio driven by decrease in
				revenue, which is a result of both lower
Information processing	127		125		(2)	(2)%				receivables and lower interest and fee yield
Other	234		266		32	14%
Other expense	$1,064	$1,067		$3	0%
Efficiency(a)	30.8%	39.7%					8.9 pts.

13

(a) "Other expense" divided by sum of "NII" plus "Other income" less "Retailer share arrangements (RSA)".

Funding, Capital and Liquidity

Funding sources

$ in billions

	$86.3	$79.3	V$
Unsecured	$9.4		$(1.4)
	$8.0
Securitization	$10.9	$(3.1)
$7.8

Deposits

$66.0

$63.5

$(2.5)

	3Q'19	3Q'20	Variance
Deposits	76%	80%	+4 pts.
Securitization	13%	10%	(3) pts.
Unsecured	11%	10%	(1) pt.
Liquidity(a)	$21.7	$26.8
$ in billions

Capital ratios (b)

CET1 Capital Ratio

14.5% 15.8%

3Q'193Q'20 Transition

Tier 1 Capital Ratio

14.5% 16.7%

3Q'193Q'20 Transition

Total Capital Ratio

15.8% 18.1%

3Q'19 3Q'20

Tier 1 Capital +

Transition

Credit Loss Reserve Ratio(c)

	3Q'19	3Q'20
Liquid assets	$15.2	$21.4
Undrawn credit facilities	6.5	5.4

20.7%

27.3%

Total liquidity	$21.7	$26.8
% of Total assets	20.5%	28.0%

1. Does not include unencumbered assets in the Bank that could be pledged.

3Q'19 3Q'20 Fully Phased-in

1. Capital ratios reflect election to delay for two years an estimate of CECL's effect on regulatory capital in accordance with the interim final rule issued by U.S. banking agencies in 1Q'20.
2. The "Tier 1 Capital + Reserves Ratio" is the sum of our "Tier 1 Capital" and "Allowance for Credit Losses," divided by our "Total Risk-Weighted Assets". For 3Q'20, both Tier 1 Capital and 14 Risk-Weighted Assets are adjusted to reflect the fully phased-in impact of CECL. These adjusted metrics are non-GAAP measures, see non-GAAP reconciliation in appendix.

3Q'20 Wrap Up

• Net earnings of $313 million … $0.52 diluted earnings per share
• • Other expense for the quarter included the impact from a restructuring charge of $89 million, or $67 million after-tax, which equates to an EPS reduction of $0.11
  • Increase in provision for credit losses for the quarter included impact from CECL implementation of $66 million, or $50 million after-tax, which equates to an EPS reduction of $0.09
• Core Growth metrics(a) down due to impact of COVID-19 … Purchase volume flat, Loan receivables (5)%, Average Active Accounts (8)%, Interest and fees on loans (12)%
• Renewed and extended a key relationship with Sam's Club
• Launched a new program with Venmo
• Added and extended partnerships with Four Wheel Parts, Kane's Furniture, Levin Furniture, SVP
  Sewing Brands and System Pavers
• Launched new partnerships with health systems: Lehigh, St Luke's and Cox Health
• Renewed and extended CareCredit relationships with Blue River Petcare and NVA
• Strong deposit platform … deposits at $63.5 billion now contributing 80% of funding
• Maintained $0.22 dividend, which equates to $129 million of capital returned to shareholders
• Strong balance sheet, 15.8% CET1 and $21.4 billion of liquid assets

(a) Growth Metrics shown above on a Core basis are non-GAAP measures and excludes from both the prior year and the current year amounts related to the Walmart and Yamaha	15
portfolios, sold in October 2019 and January 2020, respectively. See non-GAAP reconciliation in the appendix.

Engage with us.

Appendix

17

Non-GAAP Reconciliation(a)

The following table sets forth the components of our Growth Metrics and impact from CECL for the periods indicated below.

														At Sept 30,
				Total							Retail Card				Payment Solutions
		2019				2020		2019	2020	2019	2020
Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$83.2				$78.5		$52.7	$49.6	$20.5	$19.6
Less: Walmart and Yamaha Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . .	(0.9)				-			(0.1)			-				(0.8)			-
Core Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$82.3				$78.5		$52.6	$49.6	$19.7	$19.6
Allowance for credit losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		N/A	$10,146
Less: 3Q'20 impact from CECL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	-					(3,671)
Allowance for loan losses . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$5,607				$6,475
Allowance for credit losses as a % of period-end loan receivables . . . . . . . .	N/A	12.92%
Less: 3Q'20 impact from CECL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	-					(4.67)%
Allowance for loan losses as a % of period-end loan receivables . . . .	6.74%				8.25%

For the quarter ended

Sept 30,

Total

2019 2020

Purchase volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less: Walmart and Yamaha Purchase volume . . . . . . . . . . . . . . . . . . . .

Core Purchase volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Average active accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less: Walmart and Yamaha Average active accounts . . . . . . . . . . . . . .

Core Average active accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest and fees on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less: Walmart and Yamaha Interest and fees on loans . . . . . . . . . . . . .

Core Interest and fees on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$38.4 (2.4)

$36.0

76.7

(7.0)

69.7

$4,890 (531)

$4,359

$36.0

-

$36.0

64.3

-

64.3

$3,821

-

$3,821

(a) Accounts represent average active accounts in millions, which are credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in 18 the current month. Loan receivables and Purchase volume $ in billions. Interest and fees on loans, Allowance for credit losses, and Allowance for loan losses $ in millions.

Non-GAAP Reconciliation (continued)(a)

The following table sets forth the components of our Tier 1 Capital + Reserves ratio for the periods indicated below.

			At Sept 30,
				Total
	2019		2020
Tier 1 capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$13,155	$12,891
Less: CECL transition adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	-		(2,656)
Tier 1 capital (CECL fully phased-in) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$13,155	$10,235
Add: Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,607		10,146
Tier 1 capital (CECL fully phased-in) plus Reserves for credit losses.	$18,762	$20,381
Risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$90,772	$76,990
Less: CECL transition adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	-		(2,447)
Risk-weighted assets (CECL fully phased-in) . . . . . . . . . . . . . . . . . . . . . .	$90,772	$74,543

19

1. Estimated at September 30, 2020, $ in millions.