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

STAMFORD, Conn., Oct. 20, 2020 /PRNewswire/ -- 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.

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-end loan 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%.

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.

For more information, visit www.synchrony.com and Twitter: @Synchrony.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains certain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "targets," "outlook," "estimates," "will," "should," "may" or words of similar meaning, but these words are not the exclusive means of identifying forward-looking statements. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include global political, economic, business, competitive, market, regulatory and other factors and risks, such as: the impact of macroeconomic conditions and whether industry trends we have identified develop as anticipated, including the future impacts of the novel coronavirus disease ("COVID-19") outbreak and measures taken in response thereto for which future developments are highly uncertain and difficult to predict; retaining existing partners and attracting new partners, concentration of our revenue in a small number of Retail Card partners, and promotion and support of our products by our partners; cyber-attacks or other security breaches; disruptions in the operations of our computer systems and data centers; the financial performance of our partners; the sufficiency of our allowance for credit losses and the accuracy of the assumptions or estimates used in preparing our financial statements, including those related to the new CECL accounting guidance; higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to grow our deposits in the future; damage to our reputation; our ability to securitize our loan receivables, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loan receivables, and lower payment rates on our securitized loan receivables; changes in market interest rates and the impact of any margin compression; effectiveness of our risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, our ability to manage our credit risk; our ability to offset increases in our costs in retailer share arrangements; competition in the consumer finance industry; our concentration in the U.S. consumer credit market; our ability to successfully develop and commercialize new or enhanced products and services; our ability to realize the value of acquisitions and strategic investments; reductions in interchange fees; fraudulent activity; failure of third parties to provide various services that are important to our operations; international risks and compliance and regulatory risks and costs associated with international operations; alleged infringement of intellectual property rights of others and our ability to protect our intellectual property; litigation and regulatory actions; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions and/or interpretations, and state sales tax rules and regulations; a material indemnification obligation to GE under the Tax Sharing and Separation Agreement with GE if we cause the split-off from GE or certain preliminary transactions to fail to qualify for tax-free treatment or in the case of certain significant transfers of our stock following the split-off; regulation, supervision, examination and enforcement of our business by governmental authorities, the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act  and other legislative and regulatory developments and the impact of the Consumer Financial Protection Bureau's regulation of our business; impact of capital adequacy rules and liquidity requirements; restrictions that limit our ability to pay dividends and repurchase our common stock, and restrictions that limit the Synchrony Bank's ability to pay dividends to us; regulations relating to privacy, information security and data protection; use of third-party vendors and ongoing third-party business relationships; and failure to comply with anti-money laundering and anti-terrorism financing laws.

For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this news release and in our public filings, including under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed on February 13, 2020, and the Company's Quarterly Report on Form 10-Q for the quarter ended 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.

SYNCHRONY FINANCIAL
FINANCIAL SUMMARY
(unaudited, in millions, except per share statistics)
	Quarter Ended													Nine Months Ended
	Sep 30, 2020		Jun 30, 2020		Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		3Q'20 vs. 3Q'19			Sep 30, 2020		Sep 30, 2019		YTD'20 vs. YTD'19
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 losses	1,348		950		1,287		1,896		2,354		(1,006)	(42.7)%		3,585		6,865		(3,280)	(47.8)%
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.

 

SYNCHRONY FINANCIAL
SELECTED METRICS
(unaudited, $ in millions)
	Quarter Ended													Nine Months Ended
	Sep 30, 2020		Jun 30, 2020		Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		3Q'20 vs. 3Q'19			Sep 30, 2020		Sep 30, 2019		YTD'20 vs. YTD'19
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.

 

SYNCHRONY FINANCIAL
STATEMENTS OF EARNINGS
(unaudited, $ in millions)
	Quarter Ended													Nine Months Ended
	Sep 30, 2020		Jun 30, 2020		Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		3Q'20 vs. 3Q'19			Sep 30, 2020		Sep 30, 2019		YTD'20 vs. YTD'19
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 and provision for credit losses	1,348		950		1,287		1,896		2,354		(1,006)	(42.7)%		3,585		6,865		(3,280)	(47.8)%
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)%

 

SYNCHRONY FINANCIAL
STATEMENTS OF FINANCIAL POSITION
(unaudited, $ in millions)
	Quarter Ended
	Sep 30, 2020		Jun 30, 2020		Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		Sep 30, 2020 vs. Sep 30, 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.

 

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.

 

SYNCHRONY FINANCIAL
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
(unaudited, $ in millions)
	Nine Months Ended Sep 30, 2020						Nine Months Ended 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	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 credit 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%
									0
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.

 

SYNCHRONY FINANCIAL
BALANCE SHEET STATISTICS
(unaudited, $ in millions, except per share statistics)
	Quarter Ended
	Sep 30, 2020		Jun 30, 2020		Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		Sep 30, 2020 vs. Sep 30, 2019
BALANCE SHEET STATISTICS
Total common equity	$11,365		$11,165		$11,236		$14,354		$15,120		$(3,755)	(24.8)%
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.

 

SYNCHRONY FINANCIAL
PLATFORM RESULTS
(unaudited, $ in millions)
	Quarter Ended													Nine Months Ended
	Sep 30, 2020		Jun 30, 2020		Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		3Q'20 vs. 3Q'19			Sep 30, 2020		Sep 30, 2019		YTD'20 vs. YTD'19
RETAIL CARD
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.

 

SYNCHRONY FINANCIAL
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES(1)
(unaudited, $ in millions, except per share statistics)
	Quarter Ended
	Sep 30, 2020		Jun 30, 2020		Mar 31, 2020		Dec 31, 2019		Sep 30, 2019
COMMON EQUITY AND REGULATORY CAPITAL MEASURES(2)
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 (net of related deferred tax liabilities) and other	(1,906)		(1,980)		(2,010)		(2,059)		(1,975)
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

 

SYNCHRONY FINANCIAL
RECONCILIATION OF NON-GAAP MEASURES (Continued)
(unaudited, $ in millions, except per share statistics)
	Quarter Ended
	Sep 30, 2020		Jun 30, 2020		Mar 31, 2020		Dec 31, 2019		Sep 30, 2019
ALLOWANCE FOR LOAN LOSSES(1)
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.

 

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