Synchrony Financial : Q3’20 Earnings Press Release (with financial tables)

Investor Relations	Media Relations
Greg Ketron	Sue Bishop
[phone]	[phone]

For Immediate Release: October 20, 2020

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

Included Restructuring Charge of $89 million, or $0.11 Per Diluted Share, and Provision for Credit Losses

Included CECL Impact of $66 Million, or $0.09 Per Diluted Share

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

Results included*:

• Loan receivables decreased 6% to $78.5 billion, or 5% on a Core** basis
• Interest and fees on loans decreased 22% to $3.8 billion, or 12% on a Core basis
• Purchase volume decreased 6% to $36.0 billion, or flat on a Core basis
• Average active accounts decreased 16% to 64.3 million, or 8% on a Core basis
• Deposits decreased $2.5 billion, or 4%, to $63.5 billion
• Renewed and extended a key relationship with Sam's Club
• Successfully launched the new Venmo program
• Added and extended Payment Solutions relationships with 4 Wheel Parts, Kane's Furniture, Levin Furniture and Mattress, SVP Sewing Brands LLC, and System Pavers
• CareCredit successfully launched healthcare system partnerships with Lehigh Valley Health Network, St. Luke's University Health Network, and Cox Health and added and extended relationships with Blue River Pet Care and NVA
• Returned $129 million in capital through common stock dividends

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

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

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Business and Financial Results for the Third Quarter of 2020*

Earnings

• Net interest income decreased $932 million, or 21%, to $3.5 billion, mainly due to the impact of COVID-19 and the Walmart consumer portfolio sale.
• Retailer share arrangements decreased $117 million, or 12%, to $899 million, reflecting the impact of COVID-19 on program performance.
• Provision for credit losses increased $191 million, or 19%, to $1.2 billion, mainly driven by the reserve increase for the projected impact of COVID-19 related losses and the prior year reserve reduction related to Walmart, partially offset by lower net charge-offs.
• Other income increased $46 million, or 54%, to $131 million, largely driven by lower loyalty program costs which included the effects of the sale of the Walmart consumer portfolio.
• Other expense was flat; the restructuring charge and expenses related to the COVID-19 response were offset by cost reductions from Walmart, lower purchase volume and accounts, and reductions in certain discretionary spend.
• Net earnings totaled $313 million compared to $1.1 billion last year.

Balance Sheet

• Period-endloan receivables decreased 6%, or 5% on a Core basis; purchase volume decreased 6%, or flat on a Core basis; and average active accounts decreased 16%, or 8% on a Core basis.
• Deposits decreased $2.5 billion, or 4%, to $63.5 billion and comprised 80% of funding.
• The Company's balance sheet remained strong with total liquidity (liquid assets and undrawn credit facilities) of $26.8 billion, or 28.0% of total assets.
• The Company has elected to defer the regulatory capital effects of CECL for two years; the estimated Common Equity Tier 1 ratio was 15.8% compared to 14.5%, and the estimated Tier 1 Capital ratio was 16.7% compared to 14.5%, reflecting the Company's strong capital generation capabilities. The estimated Tier 1 Capital ratio also reflects the $750 million preferred stock issuance in November 2019.

Key Financial Metrics

• Return on assets was 1.3% and return on equity was 10.3%.
• Net interest margin was 13.80%.
• Efficiency ratio was 39.7%.

Credit Quality

• Loans 30+ days past due as a percentage of total period-end loan receivables were 2.67% compared to 4.47% last year; excluding the Walmart consumer portfolio, the rate was down approximately 175 basis points compared to last year.
• Through September 30th, we had granted minimum payment forbearance to a cumulative total of approximately 2 million accounts, or $3.8 billion in account balances at the time of forbearance. As of September 30th, only 119,000 accounts or $227 million in account balances remained in forbearance.
• Net charge-offs as a percentage of total average loan receivables were 4.42% compared to 5.35% last year; excluding the Walmart consumer portfolio, the rate decreased approximately 45 basis points compared to last year.
• The allowance for credit losses as a percentage of total period-end loan receivables was 12.92%.

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Sales Platforms

• • Retail Card period-end loan receivables decreased 6%, driven primarily by the impact from COVID-19, partially offset by growth in digital partners. Interest and fees on loans decreased 27%, purchase volume decreased 7%, and average active accounts decreased 19%, driven primarily by the sale of the Walmart consumer portfolio and the decline in loan receivables.
  • Payment Solutions period-end loan receivables decreased 5%; period-end loan receivables decreased 1% on a Core basis primarily due to the impact from COVID-19, partially offset by growth in Power. Interest and fees on loans decreased 10%, driven primarily by lower late fees. Purchase volume decreased 6% and average active accounts decreased 7%.
  • CareCredit period-end loan receivables decreased 7%, driven primarily by the impact from COVID-19. Interest and fees on loans decreased 8%, driven primarily by lower merchant discount as a result of the decline in purchase volume, which decreased 3%. Average active accounts decreased 8%.
• All comparisons are for the third quarter of 2020 compared to the third quarter of 2019, unless otherwise noted.
• Financial measures shown above on a Core basis are non-GAAP measures and exclude from both the prior year and the current year amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively. See non-GAAP reconciliation in the financial tables.

Corresponding Financial Tables and Information

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

Conference Call and Webcast Information

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

About Synchrony Financial

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

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

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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.

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

Non-GAAP Measures

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

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SYNCHRONY FINANCIAL
FINANCIAL SUMMARY
(unaudited, in millions, except per share statistics)
						Quarter Ended													Nine Months Ended
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			3Q'20 vs. 3Q'19			Sep 30,			Sep 30,			YTD'20 vs. YTD'19
		2020			2020			2020			2019			2019					2020			2019
EARNINGS
Net interest income	$	3,457	$	3,396	$	3,890	$	4,029	$	4,389	$	(932)	(21.2)%	$	10,743	$	12,770	$	(2,027)	(15.9)%
Retailer share arrangements		(899)			(773)			(926)			(1,029)			(1,016)			117	(11.5)%			(2,598)			(2,829)			231	(8.2)%
Provision for credit losses		1,210			1,673			1,677			1,104			1,019			191	18.7 %			4,560			3,076			1,484	48.2 %
Net interest income, after retailer share arrangements and provision for credit
	1,348			950			1,287			1,896			2,354			(1,006)	(42.7)%			3,585			6,865			(3,280)	(47.8)%
losses
Other income		131			95			97			104			85			46	54.1 %			323			267			56	21.0 %
Other expense		1,067			986			1,002			1,079			1,064			3	0.3 %			3,055			3,166			(111)	(3.5)%
Earnings before provision for income taxes
	412			59			382			921			1,375			(963)	(70.0)%			853			3,966			(3,113)	(78.5)%
Provision for income taxes		99			11			96			190			319			(220)	(69.0)%			206			950			(744)	(78.3)%
Net earnings
$	313	$	48	$	286	$	731	$	1,056	$	(743)	(70.4)%	$	647	$	3,016	$	(2,369)	(78.5)%
Net earnings available to common stockholders
$	303		$	37		$	275		$	731		$	1,056		$	(753)	(71.3)%		$	615		$	3,016		$	(2,401)	(79.6)%
COMMON SHARE STATISTICS
Basic EPS	$	0.52	$	0.06	$	0.45	$	1.15	$	1.60	$	(1.08)	(67.5)%	$	1.04	$	4.42	$	(3.38)	(76.5)%
Diluted EPS	$	0.52	$	0.06	$	0.45	$	1.15	$	1.60	$	(1.08)	(67.5)%	$	1.04	$	4.40	$	(3.36)	(76.4)%
Dividend declared per share	$	0.22	$	0.22	$	0.22	$	0.22	$	0.22	$	-	- %	$	0.66	$	0.64	$	0.02	3.1 %
Common stock price	$	26.17	$	22.16	$	16.09	$	36.01	$	34.09	$	(7.92)	(23.2)%	$	26.17	$	34.09	$	(7.92)	(23.2)%
Book value per share	$	19.47	$	19.13	$	19.27	$	23.31	$	23.13	$	(3.66)	(15.8)%	$	19.47	$	23.13	$	(3.66)	(15.8)%
Tangible common equity per share(1)	$	15.75	$	15.28	$	15.35	$	19.50	$	19.68	$	(3.93)	(20.0)%	$	15.75	$	19.68	$	(3.93)	(20.0)%
Beginning common shares outstanding		583.7			583.2			615.9			653.7			668.9			(85.2)	(12.7)%			615.9			718.8			(102.9)	(14.3)%
Issuance of common shares		-			-			-			-			-			-	- %			-			-			-	- %
Stock-based compensation		0.1			0.5			0.9			0.6			0.4			(0.3)	(75.0)%			1.5			2.5			(1.0)	(40.0)%
Shares repurchased		-			-			(33.6)			(38.4)			(15.6)			15.6	(100.0)%			(33.6)			(67.6)			34.0	(50.3)%
Ending common shares outstanding
	583.8			583.7			583.2			615.9			653.7			(69.9)	(10.7)%			583.8			653.7			(69.9)	(10.7)%
Weighted average common shares outstanding		583.8			583.7			604.9			633.7			658.3			(74.5)	(11.3)%			590.8			682.5			(91.7)	(13.4)%
Weighted average common shares outstanding (fully diluted)		584.8			584.4			607.4			637.7			661.7			(76.9)	(11.6)%			592.2			685.6			(93.4)	(13.6)%

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

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SYNCHRONY FINANCIAL
SELECTED METRICS
(unaudited, $ in millions)
						Quarter Ended												Nine Months Ended
		Sep 30,			Jun 30,			Mar 31,		Dec 31,			Sep 30,			3Q'20 vs. 3Q'19			Sep 30,				Sep 30,				YTD'20 vs. YTD'19
		2020			2020			2020			2019			2019					2020				2019
PERFORMANCE METRICS
Return on assets(1)		1.3%			0.2%			1.1%			2.7%			3.9%				(2.6)%			0.9	%			3.8	%				(2.9)%
Return on equity(2)		10.3%			1.6%			9.1%			19.0%			28.3%				(18.0)%			7.0	%			27.2	%				(20.2)%
Return on tangible common equity(3)		13.1%			1.6%			11.6%			23.0%			33.4%				(20.3)%			8.8	%			32.2	%				(23.4)%
Net interest margin(4)		13.80%			13.53%			15.15%			15.01%			16.29%				(2.49)%			14.17	%			16.04	%				(1.87)%
Efficiency ratio(5)		39.7%			36.3%			32.7%			34.8%			30.8%				8.9 %			36.1	%			31.0	%				5.1	%
Other expense as a % of average loan receivables, including held for sale		5.44%			5.04%			4.77%			5.01%			4.66%				0.78 %			5.08	%			4.72	%				0.36	%
Effective income tax rate		24.0%			18.6%			25.1%			20.6%			23.2%				0.8 %			24.2	%			24.0	%				0.2	%
CREDIT QUALITY METRICS
Net charge-offs as a % of average loan receivables, including held for sale		4.42%			5.35%			5.36%			5.15%			5.35%				(0.93)%			5.05	%			5.80	%				(0.75)%
30+ days past due as a % of period-end loan receivables(6)		2.67%			3.13%			4.24%			4.44%			4.47%				(1.80)%			2.67	%			4.47	%				(1.80)%
90+ days past due as a % of period-end loan receivables(6)		1.24%			1.77%			2.10%			2.15%			2.07%				(0.83)%			1.24	%			2.07	%				(0.83)%
Net charge-offs	$	866	$	1,046	$	1,125		$	1,109	$	1,221	$	(355)	(29.1)%	$	3,037		$	3,896		$	(859)	(22.0)%
Loan receivables delinquent over 30 days(6)	$	2,100	$	2,453	$	3,500		$	3,874	$	3,723	$	(1,623)	(43.6)%	$	2,100		$	3,723		$	(1,623)	(43.6)%
Loan receivables delinquent over 90 days(6)	$	973	$	1,384	$	1,735		$	1,877	$	1,723	$	(750)	(43.5)%	$	973		$	1,723		$	(750)	(43.5)%
Allowance for credit losses (period-end)	$	10,146	$	9,802	$	9,175		$	5,602	$	5,607	$	4,539	81.0 %	$	10,146		$	5,607		$	4,539	81.0	%
Allowance coverage ratio(7)		12.92%			12.52%			11.13%			6.42%			6.74%				6.18 %			12.92	%			6.74	%				6.18	%
BUSINESS METRICS
Purchase volume(8)(9)	$	36,013	$	31,155	$	32,042		$	40,212	$	38,395	$	(2,382)	(6.2)%	$	99,210		$	109,199		$	(9,989)	(9.1)%
Period-end loan receivables	$	78,521	$	78,313	$	82,469		$	87,215	$	83,207	$	(4,686)	(5.6)%	$	78,521		$	83,207		$	(4,686)	(5.6)%
Credit cards	$	75,204	$	75,353	$	79,832		$	84,606	$	79,788	$	(4,584)	(5.7)%	$	75,204		$	79,788		$	(4,584)	(5.7)%
Consumer installment loans	$	1,987	$	1,779	$	1,390		$	1,347	$	2,050	$	(63)	(3.1)%	$	1,987		$	2,050		$	(63)	(3.1)%
Commercial credit products	$	1,270	$	1,140	$	1,203		$	1,223	$	1,317	$	(47)	(3.6)%	$	1,270		$	1,317		$	(47)	(3.6)%
Other	$	60	$	41	$	44		$	39	$	52	$	8	15.4 %	$	60		$	52		$	8	15.4	%
Average loan receivables, including held for sale	$	78,005	$	78,697	$	84,428		$	85,376	$	90,556	$	(12,551)	(13.9)%	$	80,368		$	89,752		$	(9,384)	(10.5)%
Period-end active accounts (in thousands)(9)(10)		64,800			63,430			68,849			75,471			77,094			(12,294)	(15.9)%			64,800				77,094				(12,294)	(15.9)%
Average active accounts (in thousands)(9)(10)		64,270			64,836			72,078			73,734			76,695			(12,425)	(16.2)%			67,246				76,653				(9,407)	(12.3)%
LIQUIDITY
Liquid assets
Cash and equivalents	$	13,552	$	16,344	$	13,704		$	12,147	$	11,461	$	2,091	18.2 %	$	13,552		$	11,461		$	2,091	18.2	%
Total liquid assets	$	21,402	$	22,352	$	19,225		$	17,322	$	15,201	$	6,201	40.8 %	$	21,402		$	15,201		$	6,201	40.8	%
Undrawn credit facilities
Undrawn credit facilities	$	5,400	$	5,650	$	5,600		$	6,050	$	6,500	$	(1,100)	(16.9)%	$	5,400		$	6,500		$	(1,100)	(16.9)%
Total liquid assets and undrawn credit facilities	$	26,802	$	28,002	$	24,825		$	23,372	$	21,701	$	5,101	23.5 %	$	26,802		$	21,701		$	5,101	23.5	%
Liquid assets % of total assets		22.37%			23.15%			19.61%			16.52%			14.35%				8.02 %			22.37	%			14.35	%				8.02	%
Liquid assets including undrawn credit facilities % of total assets		28.02%			29.00%			25.32%			22.30%			20.48%				7.54 %			28.02	%			20.48	%				7.54	%

1. Return on assets represents net earnings as a percentage of average total assets.
2. Return on equity represents net earnings as a percentage of average total equity.
3. Return on tangible common equity represents net earnings available to common stockholders as a percentage of average tangible common equity. Tangible common equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
4. Net interest margin represents net interest income divided by average interest-earning assets.
5. Efficiency ratio represents (i) other expense, divided by (ii) net interest income, plus other income, less retailer share arrangements.
6. Based on customer statement-end balances extrapolated to the respective period-end date.
7. Allowance coverage ratio represents allowance for credit losses divided by total period-end loan receivables.
8. Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.
9. Includes activity and accounts associated with loan receivables held for sale.
10. Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

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SYNCHRONY FINANCIAL
STATEMENTS OF EARNINGS
(unaudited, $ in millions)
					Quarter Ended										Nine Months Ended
	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,			3Q'20 vs. 3Q'19	Sep 30,		Sep 30,		YTD'20 vs. YTD'19
		2020			2020			2020			2019			2019				2020			2019
Interest income:
Interest and fees on loans	$	3,821	$	3,808	$	4,340	$	4,492	$	4,890	$	(1,069)	(21.9)%		$	11,969	$	14,213	$	(2,244)	(15.8)%
Interest on cash and debt securities		16			22			67			93			91			(75)	(82.4)%			105			292			(187)	(64.0)%
Total interest income
	3,837			3,830			4,407			4,585			4,981			(1,144)	(23.0)%			12,074			14,505			(2,431)	(16.8)%
Interest expense:
Interest on deposits		245			293			356			383			411			(166)	(40.4)%			894			1,183			(289)	(24.4)%
Interest on borrowings of consolidated securitization entities		53			59			73			80			88			(35)	(39.8)%			185			278			(93)	(33.5)%
Interest on senior unsecured notes		82			82			88			93			93			(11)	(11.8)%			252			274			(22)	(8.0)%
Total interest expense		380			434			517			556			592			(212)	(35.8)%			1,331			1,735			(404)	(23.3)%
Net interest income
	3,457			3,396			3,890			4,029			4,389			(932)	(21.2)%			10,743			12,770			(2,027)	(15.9)%
Retailer share arrangements		(899)			(773)			(926)			(1,029)			(1,016)			117	(11.5)%			(2,598)			(2,829)			231	(8.2)%
Provision for credit losses		1,210			1,673			1,677			1,104			1,019			191	18.7 %			4,560			3,076			1,484	48.2 %
Net interest income, after retailer share arrangements		1,348			950			1,287			1,896			2,354			(1,006)	(42.7)%			3,585			6,865			(3,280)	(47.8)%
and provision for credit losses
Other income:
Interchange revenue		172			134			161			192			197			(25)	(12.7)%			467			556			(89)	(16.0)%
Debt cancellation fees		68			69			69			64			64			4	6.3 %			206			201			5	2.5 %
Loyalty programs		(155)			(134)			(158)			(181)			(203)			48	(23.6)%			(447)			(562)			115	(20.5)%
Other		46			26			25			29			27			19	70.4 %			97			72			25	34.7 %
Total other income
	131			95			97			104			85			46	54.1 %			323			267			56	21.0 %
Other expense:
Employee costs		382			327			324			385			359			23	6.4 %			1,033			1,070			(37)	(3.5)%
Professional fees		187			189			197			199			205			(18)	(8.8)%			573			668			(95)	(14.2)%
Marketing and business development		107			91			111			152			139			(32)	(23.0)%			309			397			(88)	(22.2)%
Information processing		125			116			123			122			127			(2)	(1.6)%			364			363			1	0.3 %
Other		266			263			247			221			234			32	13.7 %			776			668			108	16.2 %
Total other expense		1,067			986			1,002			1,079			1,064			3	0.3 %			3,055			3,166			(111)	(3.5)%
Earnings before provision for income taxes
	412			59			382			921			1,375			(963)	(70.0)%			853			3,966			(3,113)	(78.5)%
Provision for income taxes		99			11			96			190			319			(220)	(69.0)%			206			950			(744)	(78.3)%
Net earnings
$	313		$	48		$	286		$	731		$	1,056		$	(743)	(70.4)%		$	647		$	3,016		$	(2,369)	(78.5)%
Net earnings available to common stockholders
$	303		$	37		$	275		$	731		$	1,056		$	(753)	(71.3)%		$	615		$	3,016		$	(2,401)	(79.6)%

3

SYNCHRONY FINANCIAL
STATEMENTS OF FINANCIAL POSITION
(unaudited, $ in millions)
							Quarter Ended
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Sep 30, 2020 vs. Sep 30, 2019
		2020			2020			2020			2019			2019
Assets
Cash and equivalents	$	13,552	$	16,344	$	13,704	$	12,147	$	11,461	$	2,091	18.2 %
Debt securities		8,432			6,623			6,146			5,911			4,584			3,848	83.9 %
Loan receivables:
Unsecuritized loans held for investment		52,613			52,629			54,765			58,398			56,220			(3,607)	(6.4)%
Restricted loans of consolidated securitization entities		25,908			25,684			27,704			28,817			26,987			(1,079)	(4.0)%
Total loan receivables		78,521			78,313			82,469			87,215			83,207			(4,686)	(5.6)%
Less: Allowance for credit losses(1)		(10,146)			(9,802)			(9,175)			(5,602)			(5,607)			(4,539)	81.0 %
Loan receivables, net		68,375			68,511			73,294			81,613			77,600			(9,225)	(11.9)%
Loan receivables held for sale		4			4			5			725			8,182			(8,178)	(100.0)%
Goodwill		1,078			1,078			1,078			1,078			1,078			-	- %
Intangible assets, net		1,091			1,166			1,208			1,265			1,177			(86)	(7.3)%
Other assets		3,126			2,818			2,603			2,087			1,861			1,265	68.0 %
Total assets	$	95,658		$	96,544		$	98,038		$	104,826		$	105,943		$	(10,285)	(9.7)%
Liabilities and Equity
Deposits:
Interest-bearing deposit accounts	$	63,195	$	63,857	$	64,302	$	64,877	$	65,677	$	(2,482)	(3.8)%
Non-interest-bearing deposit accounts		298			291			313			277			295			3	1.0 %
Total deposits
	63,493			64,148			64,615			65,154			65,972			(2,479)	(3.8)%
Borrowings:
Borrowings of consolidated securitization entities		7,809			8,109			9,291			10,412			10,912			(3,103)	(28.4)%
Senior unsecured notes		7,962			7,960			7,957			9,454			9,451			(1,489)	(15.8)%
Total borrowings
	15,771			16,069			17,248			19,866			20,363			(4,592)	(22.6)%
Accrued expenses and other liabilities		4,295			4,428			4,205			4,718			4,488			(193)	(4.3)%
Total liabilities
	83,559			84,645			86,068			89,738			90,823			(7,264)	(8.0)%
Equity:
Preferred stock		734			734			734			734			-			734	NM
Common stock		1			1			1			1			1			-	- %
Additional paid-in capital		9,552			9,532			9,523			9,537			9,520			32	0.3 %
Retained earnings		10,024			9,852			9,960			12,117			11,533			(1,509)	(13.1)%
Accumulated other comprehensive income (loss)		(31)			(37)			(49)			(58)			(44)			13	(29.5)%
Treasury stock		(8,181)			(8,183)			(8,199)			(7,243)			(5,890)			(2,291)	38.9 %
Total equity
	12,099			11,899			11,970			15,088			15,120			(3,021)	(20.0)%
Total liabilities and equity	$	95,658		$	96,544		$	98,038		$	104,826		$	105,943		$	(10,285)	(9.7)%

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

4

SYNCHRONY FINANCIAL

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

																		Quarter Ended
			Sep 30, 2020					Jun 30, 2020					Mar 31, 2020					Dec 31, 2019					Sep 30, 2019
				Interest	Average					Interest	Average					Interest	Average					Interest	Average					Interest	Average
	Average		Income/	Yield/		Average		Income/	Yield/		Average		Income/	Yield/		Average		Income/	Yield/		Average		Income/	Yield/
	Balance		Expense	Rate		Balance		Expense	Rate		Balance		Expense	Rate		Balance		Expense	Rate		Balance		Expense	Rate
Assets
Interest-earning assets:
Interest-earning cash and equivalents	$	13,664	$	4		0.12%	$	15,413	$	3		0.08%	$	12,902	$	42			1.31%	$	16,269	$	68		1.66%	$	10,947	$	59		2.14%
Securities available for sale		7,984			12		0.60%			6,804			19		1.12%			5,954			25			1.69%			4,828			25		2.05%			5,389			32		2.36%
Loan receivables, including held for sale:
Credit cards		74,798			3,752		19.96%			75,942			3,740		19.81%			81,716			4,272			21.03%			81,960			4,409		21.34%			87,156			4,807		21.88%
Consumer installment loans		1,892			46		9.67%			1,546			37		9.63%			1,432			35			9.83%			2,058			48		9.25%			2,022			48		9.42%
Commercial credit products		1,238			22		7.07%			1,150			30		10.49%			1,243			33			10.68%			1,311			34		10.29%			1,329			35		10.45%
Other		77			1		NM			59			1		NM			37			-	- %			47			1		NM			49			-	- %
Total loan receivables, including held for sale		78,005			3,821		19.49%			78,697			3,808		19.46%			84,428			4,340			20.67%			85,376			4,492		20.87%			90,556			4,890		21.42%
Total interest-earning assets		99,653			3,837		15.32%			100,914			3,830		15.26%			103,284			4,407			17.16%			106,473			4,585		17.08%			106,892			4,981		18.49%
Non-interest-earning assets:
Cash and due from banks		1,489								1,486								1,450									1,326								1,374
Allowance for credit losses		(9,823)								(9,221)								(8,708)									(5,593)								(5,773)
Other assets		5,021								4,779								4,696									3,872								3,920
Total non-interest-earning assets		(3,313)								(2,956)								(2,562)									(395)								(479)
Total assets
$	96,340							$	97,958							$	100,722								$	106,078							$	106,413
Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	63,569	$	245		1.53%	$	64,298	$	293		1.83%	$	64,366	$	356			2.22%	$	65,380	$	383		2.32%	$	65,615	$	411		2.49%
Borrowings of consolidated securitization entities		8,057			53		2.62%			8,863			59		2.68%			9,986			73			2.94%			10,831			80		2.93%			11,770			88		2.97%
Senior unsecured notes		7,960			82		4.10%			7,958			82		4.14%			8,807			88			4.02%			9,452			93		3.90%			9,347			93		3.95%
Total interest-bearing liabilities
	79,586			380		1.90%			81,119			434		2.15%			83,159			517			2.50%			85,663			556		2.58%			86,732			592		2.71%
Non-interest-bearing liabilities
Non-interest-bearing deposit accounts		307								309								299									281								283
Other liabilities		4,308								4,349								4,672									4,906								4,570
Total non-interest-bearing liabilities		4,615								4,658								4,971									5,187								4,853
Total liabilities
	84,201								85,777								88,130									90,850								91,585
Equity
Total equity		12,139								12,181								12,592									15,228								14,828
Total liabilities and equity
$	96,340							$	97,958							$	100,722								$	106,078							$	106,413
Net interest income			$	3,457						$	3,396						$	3,890							$	4,029						$	4,389
Interest rate spread(1)							13.42%								13.11%									14.66%								14.50%								15.78%
Net interest margin(2)							13.80%								13.53%									15.15%								15.01%								16.29%

1. Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
2. Net interest margin represents net interest income divided by average interest-earning assets.

5

SYNCHRONY FINANCIAL

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

			Nine Months Ended					Nine Months Ended
					Sep 30, 2020							Sep 30, 2019
					Interest	Average						Interest	Average
		Average			Income/	Yield/			Average			Income/	Yield/
		Balance			Expense	Rate			Balance			Expense	Rate
Assets
Interest-earning assets:
Interest-earning cash and equivalents	$	13,992	$	49		0.47%	$	10,989	$	190		2.31%
Securities available for sale		6,918			56		1.08%			5,679			102		2.40%
Loan receivables, including held for sale:
Credit cards, including held for sale		77,476			11,764		20.28%			86,471			13,975		21.61%
Consumer installment loans		1,624			118		9.71%			1,931			134		9.28%
Commercial credit products		1,210			85		9.38%			1,304			103		10.56%
Other		58			2		4.61%			46			1		2.91%
Total loan receivables, including held for sale		80,368			11,969		19.89%			89,752			14,213		21.17%
Total interest-earning assets		101,278			12,074		15.92%			106,420			14,505		18.22%
Non-interest-earning assets:
Cash and due from banks		1,475								1,327
Allowance for loan losses		(9,253)								(6,006)
Other assets		4,833								3,801
Total non-interest-earning assets		(2,945)								(878)
Total assets
$	98,333							$	105,542
Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	64,075	$	894		1.86%	$	64,546	$	1,183		2.45%
Borrowings of consolidated securitization entities		8,966			185		2.76%			12,315			278		3.02%
Senior unsecured notes		8,241			252		4.08%			9,262			274		3.96%
Total interest-bearing liabilities		81,282			1,331		2.19%			86,123			1,735		2.69%
Non-interest-bearing liabilities
Non-interest-bearing deposit accounts		305								280
Other liabilities		4,443								4,327
Total non-interest-bearing liabilities		4,748								4,607
Total liabilities
	86,030								90,730
Equity
Total equity		12,303								14,812
Total liabilities and equity
$	98,333							$	105,542
Net interest income			$	10,743						$	12,770
Interest rate spread(1)							13.73%								15.53%
Net interest margin(2)							14.17%								16.04%

1. Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
2. Net interest margin represents net interest income divided by average interest-earning assets.

6

SYNCHRONY FINANCIAL BALANCE SHEET STATISTICS

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

							Quarter Ended
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Sep 30, 2020 vs.
		2020			2020			2020			2019			2019			Sep 30, 2019
BALANCE SHEET STATISTICS																	(3,755)	(24.8)%
Total common equity	$	11,365	$	11,165	$	11,236	$	14,354	$	15,120	$
Total common equity as a % of total assets		11.88%			11.56%			11.46%			13.69%			14.27%				(2.39)%
Tangible assets	$	93,489	$	94,300	$	95,752	$	102,483	$	103,688	$	(10,199)	(9.8)%
Tangible common equity(1)	$	9,196	$	8,921	$	8,950	$	12,011	$	12,865	$	(3,669)	(28.5)%
Tangible common equity as a % of tangible assets(1)		9.84%			9.46%			9.35%			11.72%			12.41%				(2.57)%
Tangible common equity per share(1)	$	15.75	$	15.28	$	15.35	$	19.50	$	19.68	$	(3.93)	(20.0)%
REGULATORY CAPITAL RATIOS(2)(3)
		Basel III - CECL Transition				Basel III
Total risk-based capital ratio(4)
	18.1%			17.6%			16.5%			16.3%			15.8%
Tier 1 risk-based capital ratio(5)		16.7%			16.3%			15.2%			15.0%			14.5%
Tier 1 leverage ratio(6)		13.3%			12.7%			12.3%			12.6%			12.6%
Common equity Tier 1 capital ratio		15.8%			15.3%			14.3%			14.1%			14.5%

1. Tangible common equity ("TCE") is a non-GAAP measure. We believe TCE is a more meaningful measure of the net asset value of the Company to investors. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
2. Regulatory capital ratios at September 30, 2020 are preliminary and therefore subject to change.
3. Capital ratios starting March 31, 2020 reflect election to delay for two years an estimate of CECL's effect on regulatory capital in accordance with the interim final rule issued by U.S. banking agencies in March 2020.
4. Total risk-based capital ratio is the ratio of total risk-based capital divided by risk-weighted assets.
5. Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided by risk-weighted assets.
6. Tier 1 leverage ratio is the ratio of Tier 1 capital divided by total average assets, after certain adjustments. Tier 1 leverage ratios are based upon the use of daily averages for all periods presented.

7

SYNCHRONY FINANCIAL
PLATFORM RESULTS
(unaudited, $ in millions)
						Quarter Ended												Nine Months Ended
		Sep 30,			Jun 30,				Mar 31,		Dec 31,			Sep 30,			3Q'20 vs. 3Q'19		Sep 30,			Sep 30,			YTD'20 vs. YTD'19
RETAIL CARD		2020			2020				2020			2019			2019				2020			2019
Purchase volume(1)(2)	$	27,374	$	24,380	$	24,008		$	30,968	$	29,282	$	(1,908)	(6.5)%		$	75,762	$	83,472	$	(7,710)	(9.2)%
Period-end loan receivables	$	49,595	$	49,967	$	52,390		$	56,387	$	52,697	$	(3,102)	(5.9)%		$	49,595	$	52,697	$	(3,102)	(5.9)%
Average loan receivables, including held for sale	$	49,503	$	50,238	$	53,820		$	54,505	$	60,660	$	(11,157)	(18.4)%		$	51,181	$	60,494	$	(9,313)	(15.4)%
Average active accounts (in thousands)(2)(3)		47,065			46,970				53,018			54,662			58,082			(11,017)	(19.0)%			49,197			58,156			(8,959)	(15.4)%
Interest and fees on loans	$	2,619	$	2,640	$	3,037		$	3,143	$	3,570	$	(951)	(26.6)%		$	8,296	$	10,414	$	(2,118)	(20.3)%
Other income	$	84	$	56	$	59		$	77	$	65	$	19	29.2 %		$	199	$	200	$	(1)	(0.5)%
Retailer share arrangements	$	(877)	$	(752)	$	(904)		$	(988)	$	(998)	$	121	(12.1)%		$	(2,533)	$	(2,774)	$	241	(8.7)%
PAYMENT SOLUTIONS
Purchase volume(1)(2)	$	5,901	$	4,823	$	5,375		$	6,402	$	6,281	$	(380)	(6.0)%		$	16,099	$	17,478	$	(1,379)	(7.9)%
Period-end loan receivables	$	19,550	$	19,119	$	19,973		$	20,528	$	20,478	$	(928)	(4.5)%		$	19,550	$	20,478	$	(928)	(4.5)%
Average loan receivables, including held for sale	$	19,247	$	19,065	$	20,344		$	20,701	$	20,051	$	(804)	(4.0)%		$	19,551	$	19,654	$	(103)	(0.5)%
Average active accounts (in thousands)(2)(3)		11,497			11,900				12,681			12,713			12,384			(887)	(7.2)%			12,031			12,354			(323)	(2.6)%
Interest and fees on loans	$	650	$	632	$	706		$	737	$	721	$	(71)	(9.8)%		$	1,988	$	2,092	$	(104)	(5.0)%
Other income	$	13	$	14	$	13		$	4	$	(1)	$	14	NM	$	40	$	11	$	29	NM
Retailer share arrangements	$	(20)	$	(18)	$	(18)		$	(37)	$	(15)	$	(5)	33.3 %		$	(56)	$	(48)	$	(8)	16.7 %
CARECREDIT
Purchase volume(1)	$	2,738	$	1,952	$	2,659		$	2,842	$	2,832	$	(94)	(3.3)%		$	7,349	$	8,249	$	(900)	(10.9)%
Period-end loan receivables	$	9,376	$	9,227	$	10,106		$	10,300	$	10,032	$	(656)	(6.5)%		$	9,376	$	10,032	$	(656)	(6.5)%
Average loan receivables, including held for sale	$	9,255	$	9,394	$	10,264		$	10,170	$	9,845	$	(590)	(6.0)%		$	9,636	$	9,604	$	32	0.3 %
Average active accounts (in thousands)(3)		5,708			5,966				6,379			6,359			6,229			(521)	(8.4)%			6,018			6,143			(125)	(2.0)%
Interest and fees on loans	$	552	$	536	$	597		$	612	$	599	$	(47)	(7.8)%		$	1,685	$	1,707	$	(22)	(1.3)%
Other income	$	34	$	25	$	25		$	23	$	21	$	13	61.9 %		$	84	$	56	$	28	50.0 %
Retailer share arrangements	$	(2)	$	(3)	$	(4)		$	(4)	$	(3)	$	1	(33.3)%		$	(9)	$	(7)	$	(2)	28.6 %
TOTAL SYF
Purchase volume(1)(2)	$	36,013	$	31,155	$	32,042		$	40,212	$	38,395	$	(2,382)	(6.2)%		$	99,210	$	109,199	$	(9,989)	(9.1)%
Period-end loan receivables	$	78,521	$	78,313	$	82,469		$	87,215	$	83,207	$	(4,686)	(5.6)%		$	78,521	$	83,207	$	(4,686)	(5.6)%
Average loan receivables, including held for sale	$	78,005	$	78,697	$	84,428		$	85,376	$	90,556	$	(12,551)	(13.9)%		$	80,368	$	89,752	$	(9,384)	(10.5)%
Average active accounts (in thousands)(2)(3)		64,270			64,836				72,078			73,734			76,695			(12,425)	(16.2)%			67,246			76,653			(9,407)	(12.3)%
Interest and fees on loans	$	3,821	$	3,808	$	4,340		$	4,492	$	4,890	$	(1,069)	(21.9)%		$	11,969	$	14,213	$	(2,244)	(15.8)%
Other income	$	131	$	95	$	97		$	104	$	85	$	46	54.1 %		$	323	$	267	$	56	21.0 %
Retailer share arrangements	$	(899)	$	(773)	$	(926)		$	(1,029)	$	(1,016)	$	117	(11.5)%		$	(2,598)	$	(2,829)	$	231	(8.2)%

1. Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.
2. Includes activity and balances associated with loan receivables held for sale.
3. Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

8

SYNCHRONY FINANCIAL
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES(1)
(unaudited, $ in millions, except per share statistics)
							Quarter Ended
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
COMMON EQUITY AND REGULATORY CAPITAL MEASURES(2)		2020			2020			2020			2019			2019
GAAP Total equity	$	12,099	$	11,899	$	11,970	$	15,088	$	15,120
Less: Preferred stock		(734)			(734)			(734)			(734)			-
Less: Goodwill		(1,078)			(1,078)			(1,078)			(1,078)			(1,078)
Less: Intangible assets, net		(1,091)			(1,166)			(1,208)			(1,265)			(1,177)
Tangible common equity	$	9,196		$	8,921		$	8,950		$	12,011		$	12,865
Add: CECL transition amount		2,656			2,570			2,417			-			-
Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss)		305			302			304			319			290
Common equity Tier 1
$	12,157		$	11,793		$	11,671		$	12,330		$	13,155
Preferred stock
	734			734			734			734			-
Tier 1 capital	$	12,891		$	12,527		$	12,405		$	13,064		$	13,155
Add: Allowance for credit losses includible in risk-based capital		1,034			1,031			1,082			1,147			1,190
Total Risk-based capital	$	13,925		$	13,558		$	13,487		$	14,211		$	14,345
ASSET MEASURES(2)
Total average assets	$	96,340	$	97,958	$	100,722	$	106,078	$	106,413
Adjustments for:
Add: CECL transition amount		2,656			2,570			2,417			-			-
Disallowed goodwill and other disallowed intangible assets		(1,906)			(1,980)			(2,010)			(2,059)			(1,975)
(net of related deferred tax liabilities) and other
Total assets for leverage purposes	$	97,090		$	98,548		$	101,129		$	104,019		$	104,438
Risk-weighted assets
$	76,990	$	77,048	$	81,639	$	87,302	$	90,772
CECL FULLY PHASED-IN CAPITAL MEASURES
Tier 1 capital	$	12,891	$	12,527	$	12,405	$	13,064	$	13,155
Less: CECL transition adjustment		(2,656)			(2,570)			(2,417)			-			-
Tier 1 capital (CECL fully phased-in)	$	10,235		$	9,957		$	9,988		$	13,064		$	13,155
Add: Allowance for credit losses		10,146			9,802			9,175			5,602			5,607
Tier 1 capital (CECL fully phased-in) + Reserves for credit losses	$	20,381		$	19,759		$	19,163		$	18,666		$	18,762
Risk-weighted assets
$	76,990	$	77,048	$	81,639	$	87,302	$	90,772
Less: CECL transition adjustment		(2,447)			(2,361)			(2,204)			-			-
Risk-weighted assets (CECL fully phased-in)	$	74,543		$	74,687		$	79,435		$	87,302		$	90,772
TANGIBLE COMMON EQUITY PER SHARE
GAAP book value per share	$	19.47	$	19.13	$	19.27	$	23.31	$	23.13
Less: Goodwill		(1.85)			(1.85)			(1.85)			(1.75)			(1.65)
Less: Intangible assets, net		(1.87)			(2.00)			(2.07)			(2.06)			(1.80)
Tangible common equity per share	$	15.75		$	15.28		$	15.35		$	19.50		$	19.68

1. Regulatory measures at September 30, 2020 are presented on an estimated basis.
2. Capital ratios starting March 31, 2020 reflect election to delay for two years an estimate of CECL's effect on regulatory capital in accordance with the interim final rule issued by U.S. banking agencies in March 2020

9

SYNCHRONY FINANCIAL
RECONCILIATION OF NON-GAAP MEASURES (Continued)
(unaudited, $ in millions, except per share statistics)
							Quarter Ended
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
ALLOWANCE FOR LOAN LOSSES(1)		2020			2020			2020			2019			2019
Allowance for credit losses	$	10,146	$	9,802	$	9,175			N/A			N/A
Less: Impact from CECL(2)		(3,671)			(3,605)			(3,122)			-			-
Allowance for loan losses(1)	$	6,475		$	6,197		$	6,053		$	5,602		$	5,607
ALLOWANCE FOR LOAN LOSSES AS A % OF PERIOD-END LOAN RECEIVABLES
Allowance for credit losses as a % of period-end loan receivables		12.92 %			12.52 %			11.13 %			N/A			N/A
Less: Impact from CECL(2)		(4.67)%			(4.61)%			(3.79)%			-%			-%
Allowance for loan losses as a % of period-end loan receivables		8.25 %			7.91 %			7.34 %			6.42%			6.74%
CORE PURCHASE VOLUME
Purchase Volume	$	36,013	$	31,155	$	32,042	$	40,212	$	38,395
Less: Walmart and Yamaha Purchase volume		-			-			-			(267)			(2,381)
Core Purchase volume	$	36,013		$	31,155		$	32,042		$	39,945		$	36,014
CORE LOAN RECEIVABLES
Loan receivables	$	78,521	$	78,313	$	82,469	$	87,215	$	83,207
Less: Walmart and Yamaha Loan receivables		-			-			-			(3)			(872)
Core Loan receivables	$	78,521		$	78,313		$	82,469		$	87,212		$	82,335
Retail Card Loan receivables	$	49,595	$	49,967	$	52,390	$	56,387	$	52,697
Less: Walmart Loan receivables		-			-			-			-			(112)
Core Loan receivables	$	49,595		$	49,967		$	52,390		$	56,387		$	52,585
Payment Solutions Loan receivables	$	19,550	$	19,119	$	19,973	$	20,528	$	20,478
Less: Yamaha Loan receivables		-			-			-			(3)			(760)
Core Loan receivables	$	19,550		$	19,119		$	19,973		$	20,525		$	19,718
CORE AVERAGE ACTIVE ACCOUNTS (in thousands)
Average active accounts (in thousands)		64,270			64,836			72,078			73,734			76,695
Less: Walmart and Yamaha average Active accounts (in thousands)		-			-			-			(1,777)			(7,001)
Core Average active accounts (in thousands)		64,270			64,836			72,078			71,957			69,694
CORE INTEREST AND FEES ON LOANS
Interest and fees on loans	$	3,821	$	3,808	$	4,340	$	4,492	$	4,890
Less: Walmart and Yamaha Interest and fees on loans		-			-			-			(69)			(531)
Core Interest and fees on loans	$	3,821		$	3,808		$	4,340		$	4,423		$	4,359

1. Beginning in 1Q'20, allowance for loan losses is calculated based upon accounting standards no longer effective, and as such is a Non-GAAP measure.
2. Impact from CECL reflects the additional allowance for credit losses recorded in accordance with ASC 2016-13, as compared to the allowance for credit losses required had the prior accounting guidance been applied.

10