☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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51-0483352
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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777 Long Ridge Road
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Stamford,
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Connecticut
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06902
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common stock, par value $0.001 per share
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SYF
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New York Stock Exchange
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Depositary Shares Each Representing a 1/40th Interest in a Share of 5.625% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A
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SYFPrA
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New York Stock Exchange
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Large Accelerated Filer
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☒
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Accelerated Filer
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☐
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Non-Accelerated Filer
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☐
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Smaller Reporting Company
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☐
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Emerging Growth Company
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☐
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PART I - FINANCIAL INFORMATION
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Page
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Item 1. Financial Statements:
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PART II - OTHER INFORMATION
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•
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“we,” “us,” “our” and the “Company” are to SYNCHRONY FINANCIAL and its subsidiaries;
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•
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“Synchrony” are to SYNCHRONY FINANCIAL only;
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•
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the “Bank” are to Synchrony Bank (a subsidiary of Synchrony);
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•
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the “Board of Directors” or “Board” are to Synchrony's board of directors;
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•
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“GE” are to General Electric Company and its subsidiaries; and
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•
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“FICO” are to a credit score developed by Fair Isaac & Co., which is widely used as a means of evaluating the likelihood that credit users will pay their obligations.
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Promotional Offer
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||||||
Credit Product
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Standard Terms Only
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Deferred Interest
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Other Promotional
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Total
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||||
Credit cards
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62.0
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%
|
|
17.9
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%
|
|
15.9
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%
|
|
95.8
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%
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Commercial credit products
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1.6
|
|
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—
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|
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—
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|
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1.6
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Consumer installment loans
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—
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|
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—
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|
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2.5
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|
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2.5
|
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Other
|
0.1
|
|
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—
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|
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—
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|
|
0.1
|
|
Total
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63.7
|
%
|
|
17.9
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%
|
|
18.4
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%
|
|
100.0
|
%
|
•
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Private Label Credit Cards. Private label credit cards are partner-branded credit cards (e.g., Lowe’s or Amazon) or program-branded credit cards (e.g., Synchrony Car Care or CareCredit) that are used primarily for the purchase of goods and services from the partner or within the program network. In addition, in some cases, cardholders may be permitted to access their credit card accounts for cash advances. In Retail Card, credit under our private label credit cards typically is extended on standard terms only, and in Payment Solutions and CareCredit, credit under our private label credit cards typically is extended pursuant to a promotional financing offer.
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•
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Dual Cards and General Purpose Co-Brand Cards. Our patented Dual Cards are credit cards that function as private label credit cards when used to purchase goods and services from our partners, and as general purpose credit cards when used to make purchases from other retailers whenever cards from those card networks are accepted or for cash advance transactions. We also offer general purpose co-branded credit cards that do not function as private label cards, as well as, in limited circumstances, a Synchrony-branded general purpose credit card. Credit extended under our Dual Cards and general purpose co-branded credit cards typically is extended on standard terms only. We offer either Dual Cards or general purpose co-branded credit cards across all of our sales platforms, spanning 22 ongoing credit partners and our CareCredit Dual Card, of which the majority are Dual Cards. Consumer Dual Cards and Co-Branded cards totaled 23% of our total loan receivables portfolio at September 30, 2020.
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•
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Growth in loan receivables and interest income.
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•
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Adoption of ASU 2016-13 Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (“CECL”).
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•
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Asset quality.
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•
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Retailer share arrangement payments under our program agreements.
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•
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Extended duration of our Retail Card program agreements.
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•
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Growth in interchange revenues and loyalty program costs.
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•
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Capital and liquidity levels.
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•
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Growth in loan receivables and interest income. We have experienced significant declines in consumer purchase activity following the outbreak of COVID-19 and associated governmental preventative measures, such as closures of non-essential businesses. Interest and fees on loans decreased 16% for the nine months ended September 30, 2020 compared to the prior year period. The sale of the Walmart consumer portfolio sale drove a decline compared to the prior year period of approximately 11%. The remaining decrease in interest and fees on loans, along with a decline in loan receivables of 6% and a reduction in purchase volume for our ongoing partners of 3%, in all instances at or for the nine months ended September 30, 2020, were primarily due to the impacts of COVID-19. In addition, we have experienced a reduction in benchmark interest rates and we have also provided, for a temporary period of time, forbearance in terms of deferrals of minimum payments and waivers of interest and fees for qualifying cardholders that are impacted by COVID-19 and request relief. The decreases in loan receivables and benchmark interest rates along with the forbearance actions have led to the reductions in interest income for the nine months ended September 30, 2020. While we experienced growth in purchase volume compared to the prior year for the month of September 2020, we expect the above factors will likely result in a reduction in the growth of our interest income for the remainder of 2020. As noted above, the extent of the impacts from these conditions is currently uncertain and dependent on various factors. These factors include, the nature of and duration for which the preventative measures remain in place, including responses to increases in COVID-19 infections nationally that may occur, and the type of any additional stimulus measures and other policy responses that the U.S. government may adopt.
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•
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Adoption of ASU 2016-13 Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments (“CECL”). In response to the COVID-19 pandemic, in March 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law and includes a provision that permits financial institutions to defer temporarily the use of CECL. However, in a related action, the joint federal bank regulatory agencies issued an interim final rule that allows banking organizations to mitigate the effects of the CECL accounting standard in their regulatory capital. Banking organizations that are required under U.S. accounting standards to adopt CECL this year can elect to mitigate the estimated cumulative regulatory capital effects of CECL for up to two years. This two-year delay is in addition to the three-year transition period that the agencies had already made available. The Company has elected to adopt the option provided by the interim final rule, which will largely delay the effects of CECL on its regulatory capital for the next two years, after which the effects will be phased-in over a three-year period from January 1, 2022 through December 31, 2024. Under the interim final rule, the amount of adjustments to regulatory capital deferred until the phase-in period includes both the initial impact of our adoption of CECL at January 1, 2020 and 25% of subsequent changes in our allowance for credit losses during each quarter of the two-year period ended December 31, 2021.
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•
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Asset quality. Prior to COVID-19, we had experienced slightly improving asset quality trends that reflected stable U.S. unemployment rates and consumer confidence. In addition, over-30 day loan delinquencies as a percentage of period-end loan receivables decreased to 2.67% at September 30, 2020 from 4.47% at September 30, 2019, primarily driven by an improvement in customer payment behavior. Beginning in March 2020, we have taken certain forbearance actions for our customers impacted by COVID-19. Through September 30th, we have granted minimum payment forbearance to a cumulative total of approximately 2.0 million accounts, or $3.8 billion in account balances at the time of forbearance. At September 30th, only 0.1 million accounts or $227 million in account balances remained in forbearance. To date, while not having a material impact to the Company’s overall delinquency metrics at September 30, 2020, we have experienced a higher incidence rate of accounts becoming delinquent following their exit from these short-term programs, as compared to accounts that did not enter the forbearance program. We anticipate that this post-program performance and the current levels of filings for unemployment benefits in the United States, while partially mitigated by the effects of governmental actions such as the CARES Act which included unemployment benefits that expired in July 2020, will result in an increase from current levels in the Company’s delinquencies and net charge-off rate for the remainder of 2020 and into 2021. Similarly, we have experienced an increase to our allowance for credit losses and provision for credit losses during the three and nine months ended September 30, 2020 attributable to the impact of COVID-19. To the extent the current environment continues beyond our expectations or deteriorates further, we may experience further increases to our allowance for credit losses and provision for credit losses related to COVID-19.
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•
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Retailer share arrangement payments under our program agreements. To the extent we experience further reductions in interest income and also increases in expected net charge-offs related to COVID-19 discussed above, we expect that the growth in absolute terms of our payments to our partners under our retailer share arrangements, compared to the prior year, will decrease.
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•
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Net earnings decreased 70.4% to $313 million for the three months ended September 30, 2020 and decreased 78.5% to $647 million for the nine months ended September 30, 2020 primarily driven by lower net interest income and higher provision for credit losses, partially offset by a decrease in retailer share arrangements. These changes were primarily due to the impact of COVID-19 and the effects from the sale of the Walmart consumer portfolio in 2019.
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•
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We adopted the new CECL accounting guidance in January 2020 and recorded an increase to our allowance for loan losses of $3.0 billion. In addition, the increases in provision for credit losses for the three and nine months ended September 30, 2020 included $66 million, or $50 million after-tax, and $650 million, or $491 million after-tax, respectively, attributable to applying the new CECL guidance as compared to the prior accounting guidance.
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•
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Loan receivables decreased 5.6% to $78.5 billion at September 30, 2020 compared to September 30, 2019, primarily driven by lower purchase volume and a decrease in average active accounts for our ongoing partner programs due to the impact of COVID-19, as well as the sale of loan receivables associated with the Yamaha portfolio.
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•
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Net interest income decreased 21.2% to $3.5 billion and 15.9% to $10.7 billion for the three and nine months ended September 30, 2020, respectively, primarily due to a decrease in interest and fees on loans due to the impact of COVID-19 and the Walmart consumer portfolio sale, partially offset by a decrease in interest expense reflecting lower benchmark interest rates.
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•
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Retailer share arrangements decreased 11.5% to $899 million and 8.2% to $2.6 billion for the three and nine months ended September 30, 2020, respectively, reflecting the impact of COVID-19 on program performance.
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•
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Over-30 day loan delinquencies as a percentage of period-end loan receivables decreased 180 basis points to 2.67% at September 30, 2020, and the net charge-off rate decreased 93 basis points to 4.42% and 75 basis points to 5.05% for the three and nine months ended September 30, 2020, respectively.
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•
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Provision for credit losses increased by $191 million, or 18.7%, and $1.5 billion, or 48.2%, for the three and nine months ended September 30, 2020, respectively. The increases were primarily driven by higher reserve builds reflecting the projected impacts of COVID-19, the increases attributable to CECL discussed above and the effects of the prior year reductions in reserves for credit losses related to the Walmart consumer portfolio sale of $326 million and $1.1 billion, respectively. These increases were partially offset by lower net charge-offs. Our allowance coverage ratio (allowance for credit losses as a percent of period-end loan receivables) increased to 12.92% at September 30, 2020, as compared to 6.74% at September 30, 2019, primarily due to the impact of the CECL implementation and impacts from COVID-19.
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•
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Other expense remained flat and decreased by $111 million, or 3.5%, for the three and nine months ended September 30, 2020, respectively, primarily driven by the cost reductions related to the sale of the Walmart consumer portfolio, lower purchase volume and average active accounts and reductions in certain discretionary spend. These decreases in expenses were offset by a restructuring charge of $89 million recorded in the current quarter, as well as expenditures related to our response to COVID-19. The decrease for the nine months ended September 30, 2020 also included lower professional fees due to interim servicing costs in the prior year associated with acquired portfolios, partially offset by higher operational losses.
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•
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At September 30, 2020, deposits represented 80% of our total funding sources. Total deposits decreased by 2.5% to $63.5 billion at September 30, 2020, compared to December 31, 2019.
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•
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During the nine months ended September 30, 2020, we declared and paid cash dividends on our Series A 5.625% non-cumulative preferred stock of $42.34 per share, or $32 million.
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•
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During the nine months ended September 30, 2020, we repurchased $1.0 billion of our outstanding common stock, and declared and paid cash dividends of $0.66 per share, or $392 million. In response to COVID-19, we have suspended share repurchases until we have greater visibility as to the current economic environment.
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•
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In our Retail Card sales platform, we launched new programs with Harbor Freight Tools, Venmo and Verizon and extended our program agreement with Sam's Club.
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•
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In our Payment Solutions sales platform, we announced our new partnerships with Adorama, Club Champion, HiSun, Levin Furniture and Mattress, Modani Furniture and Piaggio, extended our program agreements with ABC Warehouse, Bernina, CarX, Englert, 4 Wheel Parts, Hanks, Icahn Enterprises LP automotive brands (Pep Boys, AAMCO Transmissions, Precision Tune Auto Care, Cottman Transmission and Auto Plus Auto Parts), Kane's Furniture, Living Spaces, Puronics, SVP Sewing Brands LLC, System Pavers and Vanderhall and completed the sale of loan receivables associated with the Yamaha portfolio.
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•
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In our CareCredit sales platform, we expanded our network through our new partnership with AdventHealth, launched other healthcare system partnerships with Lehigh Valley Health Network, St. Luke's University Health Network and Cox Health, extended Pets Best's relationship with Progressive, and renewed our agreements with Blue River Petcare, NVA,Vision Group Holdings and West Coast Dental.
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Three months ended September 30,
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Nine months ended September 30,
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||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Interest income
|
$
|
3,837
|
|
|
$
|
4,981
|
|
|
$
|
12,074
|
|
|
$
|
14,505
|
|
Interest expense
|
380
|
|
|
592
|
|
|
1,331
|
|
|
1,735
|
|
||||
Net interest income
|
3,457
|
|
|
4,389
|
|
|
10,743
|
|
|
12,770
|
|
||||
Retailer share arrangements
|
(899
|
)
|
|
(1,016
|
)
|
|
(2,598
|
)
|
|
(2,829
|
)
|
||||
Provision for credit losses
|
1,210
|
|
|
1,019
|
|
|
4,560
|
|
|
3,076
|
|
||||
Net interest income, after retailer share arrangements and provision for credit losses
|
1,348
|
|
|
2,354
|
|
|
3,585
|
|
|
6,865
|
|
||||
Other income
|
131
|
|
|
85
|
|
|
323
|
|
|
267
|
|
||||
Other expense
|
1,067
|
|
|
1,064
|
|
|
3,055
|
|
|
3,166
|
|
||||
Earnings before provision for income taxes
|
412
|
|
|
1,375
|
|
|
853
|
|
|
3,966
|
|
||||
Provision for income taxes
|
99
|
|
|
319
|
|
|
206
|
|
|
950
|
|
||||
Net earnings
|
$
|
313
|
|
|
$
|
1,056
|
|
|
$
|
647
|
|
|
$
|
3,016
|
|
Net earnings available to common stockholders
|
$
|
303
|
|
|
$
|
1,056
|
|
|
$
|
615
|
|
|
$
|
3,016
|
|
|
At and for the
|
|
At and for the
|
||||||||||||
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Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Financial Position Data (Average):
|
|
|
|
|
|
|
|
||||||||
Loan receivables, including held for sale
|
$
|
78,005
|
|
|
$
|
90,556
|
|
|
$
|
80,368
|
|
|
$
|
89,752
|
|
Total assets
|
$
|
96,340
|
|
|
$
|
106,413
|
|
|
$
|
98,333
|
|
|
$
|
105,542
|
|
Deposits
|
$
|
63,876
|
|
|
$
|
65,898
|
|
|
$
|
64,380
|
|
|
$
|
64,826
|
|
Borrowings
|
$
|
16,017
|
|
|
$
|
21,117
|
|
|
$
|
17,207
|
|
|
$
|
21,577
|
|
Total equity
|
$
|
12,139
|
|
|
$
|
14,828
|
|
|
$
|
12,303
|
|
|
$
|
14,812
|
|
Selected Performance Metrics:
|
|
|
|
|
|
|
|
||||||||
Purchase volume(1)(2)
|
$
|
36,013
|
|
|
$
|
38,395
|
|
|
$
|
99,210
|
|
|
$
|
109,199
|
|
Retail Card
|
$
|
27,374
|
|
|
$
|
29,282
|
|
|
$
|
75,762
|
|
|
$
|
83,472
|
|
Payment Solutions
|
$
|
5,901
|
|
|
$
|
6,281
|
|
|
$
|
16,099
|
|
|
$
|
17,478
|
|
CareCredit
|
$
|
2,738
|
|
|
$
|
2,832
|
|
|
$
|
7,349
|
|
|
$
|
8,249
|
|
Average active accounts (in thousands)(2)(3)
|
64,270
|
|
|
76,695
|
|
|
67,246
|
|
|
76,653
|
|
||||
Net interest margin(4)
|
13.80
|
%
|
|
16.29
|
%
|
|
14.17
|
%
|
|
16.04
|
%
|
||||
Net charge-offs
|
$
|
866
|
|
|
$
|
1,221
|
|
|
$
|
3,037
|
|
|
$
|
3,896
|
|
Net charge-offs as a % of average loan receivables, including held for sale
|
4.42
|
%
|
|
5.35
|
%
|
|
5.05
|
%
|
|
5.80
|
%
|
||||
Allowance coverage ratio(5)
|
12.92
|
%
|
|
6.74
|
%
|
|
12.92
|
%
|
|
6.74
|
%
|
||||
Return on assets(6)
|
1.3
|
%
|
|
3.9
|
%
|
|
0.9
|
%
|
|
3.8
|
%
|
||||
Return on equity(7)
|
10.3
|
%
|
|
28.3
|
%
|
|
7.0
|
%
|
|
27.2
|
%
|
||||
Equity to assets(8)
|
12.60
|
%
|
|
13.93
|
%
|
|
12.51
|
%
|
|
14.03
|
%
|
||||
Other expense as a % of average loan receivables, including held for sale
|
5.44
|
%
|
|
4.66
|
%
|
|
5.08
|
%
|
|
4.72
|
%
|
||||
Efficiency ratio(9)
|
39.7
|
%
|
|
30.8
|
%
|
|
36.1
|
%
|
|
31.0
|
%
|
||||
Effective income tax rate
|
24.0
|
%
|
|
23.2
|
%
|
|
24.2
|
%
|
|
24.0
|
%
|
||||
Selected Period-End Data:
|
|
|
|
|
|
|
|
||||||||
Loan receivables
|
$
|
78,521
|
|
|
$
|
83,207
|
|
|
$
|
78,521
|
|
|
$
|
83,207
|
|
Allowance for credit losses
|
$
|
10,146
|
|
|
$
|
5,607
|
|
|
$
|
10,146
|
|
|
$
|
5,607
|
|
30+ days past due as a % of period-end loan receivables(10)
|
2.67
|
%
|
|
4.47
|
%
|
|
2.67
|
%
|
|
4.47
|
%
|
||||
90+ days past due as a % of period-end loan receivables(10)
|
1.24
|
%
|
|
2.07
|
%
|
|
1.24
|
%
|
|
2.07
|
%
|
||||
Total active accounts (in thousands)(2)(3)
|
64,800
|
|
|
77,094
|
|
|
64,800
|
|
|
77,094
|
|
(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 accounts 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.
|
(4)
|
Net interest margin represents net interest income divided by average interest-earning assets.
|
(5)
|
Allowance coverage ratio represents allowance for credit losses divided by total period-end loan receivables.
|
(6)
|
Return on assets represents net earnings as a percentage of average total assets.
|
(7)
|
Return on equity represents net earnings as a percentage of average total equity.
|
(8)
|
Equity to assets represents average total equity as a percentage of average total assets.
|
(9)
|
Efficiency ratio represents (i) other expense, divided by (ii) sum of net interest income, plus other income, less retailer share arrangements.
|
(10)
|
Based on customer statement-end balances extrapolated to the respective period-end date.
|
|
2020
|
|
2019
|
||||||||||||||||||
Three months ended September 30 ($ in millions)
|
Average
Balance
|
|
Interest
Income /
Expense
|
|
Average
Yield /
Rate(1)
|
|
Average
Balance
|
|
Interest
Income/
Expense
|
|
Average
Yield /
Rate(1)
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning cash and equivalents(2)
|
$
|
13,664
|
|
|
$
|
4
|
|
|
0.12
|
%
|
|
$
|
10,947
|
|
|
$
|
59
|
|
|
2.14
|
%
|
Securities available for sale
|
7,984
|
|
|
12
|
|
|
0.60
|
%
|
|
5,389
|
|
|
32
|
|
|
2.36
|
%
|
||||
Loan receivables, including held for sale(3):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Credit cards
|
74,798
|
|
|
3,752
|
|
|
19.96
|
%
|
|
87,156
|
|
|
4,807
|
|
|
21.88
|
%
|
||||
Consumer installment loans
|
1,892
|
|
|
46
|
|
|
9.67
|
%
|
|
2,022
|
|
|
48
|
|
|
9.42
|
%
|
||||
Commercial credit products
|
1,238
|
|
|
22
|
|
|
7.07
|
%
|
|
1,329
|
|
|
35
|
|
|
10.45
|
%
|
||||
Other
|
77
|
|
|
1
|
|
|
NM
|
|
|
49
|
|
|
—
|
|
|
—
|
%
|
||||
Total loan receivables, including held for sale
|
78,005
|
|
|
3,821
|
|
|
19.49
|
%
|
|
90,556
|
|
|
4,890
|
|
|
21.42
|
%
|
||||
Total interest-earning assets
|
99,653
|
|
|
3,837
|
|
|
15.32
|
%
|
|
106,892
|
|
|
4,981
|
|
|
18.49
|
%
|
||||
Non-interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
1,489
|
|
|
|
|
|
|
1,374
|
|
|
|
|
|
||||||||
Allowance for credit losses
|
(9,823
|
)
|
|
|
|
|
|
(5,773
|
)
|
|
|
|
|
||||||||
Other assets
|
5,021
|
|
|
|
|
|
|
3,920
|
|
|
|
|
|
||||||||
Total non-interest-earning assets
|
(3,313
|
)
|
|
|
|
|
|
(479
|
)
|
|
|
|
|
||||||||
Total assets
|
$
|
96,340
|
|
|
|
|
|
|
$
|
106,413
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposit accounts
|
$
|
63,569
|
|
|
$
|
245
|
|
|
1.53
|
%
|
|
$
|
65,615
|
|
|
$
|
411
|
|
|
2.49
|
%
|
Borrowings of consolidated securitization entities
|
8,057
|
|
|
53
|
|
|
2.62
|
%
|
|
11,770
|
|
|
88
|
|
|
2.97
|
%
|
||||
Senior unsecured notes
|
7,960
|
|
|
82
|
|
|
4.10
|
%
|
|
9,347
|
|
|
93
|
|
|
3.95
|
%
|
||||
Total interest-bearing liabilities
|
79,586
|
|
|
380
|
|
|
1.90
|
%
|
|
86,732
|
|
|
592
|
|
|
2.71
|
%
|
||||
Non-interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-interest-bearing deposit accounts
|
307
|
|
|
|
|
|
|
283
|
|
|
|
|
|
||||||||
Other liabilities
|
4,308
|
|
|
|
|
|
|
4,570
|
|
|
|
|
|
||||||||
Total non-interest-bearing liabilities
|
4,615
|
|
|
|
|
|
|
4,853
|
|
|
|
|
|
||||||||
Total liabilities
|
84,201
|
|
|
|
|
|
|
91,585
|
|
|
|
|
|
||||||||
Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total equity
|
12,139
|
|
|
|
|
|
|
14,828
|
|
|
|
|
|
||||||||
Total liabilities and equity
|
$
|
96,340
|
|
|
|
|
|
|
$
|
106,413
|
|
|
|
|
|
||||||
Interest rate spread(4)
|
|
|
|
|
13.42
|
%
|
|
|
|
|
|
15.78
|
%
|
||||||||
Net interest income
|
|
|
$
|
3,457
|
|
|
|
|
|
|
$
|
4,389
|
|
|
|
||||||
Net interest margin(5)
|
|
|
|
|
13.80
|
%
|
|
|
|
|
|
16.29
|
%
|
|
2020
|
|
2019
|
||||||||||||||||||
Nine months ended September 30 ($ in millions)
|
Average
Balance
|
|
Interest
Income /
Expense
|
|
Average
Yield /
Rate(1)
|
|
Average
Balance
|
|
Interest
Income/
Expense
|
|
Average
Yield /
Rate(1)
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning cash and equivalents(2)
|
$
|
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(3):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
%
|
||||
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
|
|
|
|
|
|
||||||
Interest rate spread(4)
|
|
|
|
|
13.73
|
%
|
|
|
|
|
|
15.53
|
%
|
||||||||
Net interest income
|
|
|
$
|
10,743
|
|
|
|
|
|
|
$
|
12,770
|
|
|
|
||||||
Net interest margin(5)
|
|
|
|
|
14.17
|
%
|
|
|
|
|
|
16.04
|
%
|
(1)
|
Average yields/rates are based on total interest income/expense over average balances.
|
(2)
|
Includes average restricted cash balances of $214 million and $1.2 billion for the three months ended September 30, 2020 and 2019, respectively, and $612 million and $879 million for the nine months ended September 30, 2020 and 2019, respectively.
|
(3)
|
Interest income on loan receivables includes fees on loans of $487 million and $737 million for the three months ended September 30, 2020 and 2019, respectively, and $1.6 billion and $2.1 billion for the nine months ended September 30, 2020 and 2019, respectively.
|
(4)
|
Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
|
(5)
|
Net interest margin represents net interest income divided by average total interest-earning assets.
|
Three months ended September 30 ($ in millions)
|
2020
|
|
%
|
|
2019
|
|
%
|
||||||
Loan receivables, including held for sale
|
$
|
78,005
|
|
|
78.3
|
%
|
|
$
|
90,556
|
|
|
84.7
|
%
|
Liquidity portfolio and other
|
21,648
|
|
|
21.7
|
%
|
|
16,336
|
|
|
15.3
|
%
|
||
Total average interest-earning assets
|
$
|
99,653
|
|
|
100.0
|
%
|
|
$
|
106,892
|
|
|
100.0
|
%
|
Nine months ended September 30 ($ in millions)
|
2020
|
|
%
|
|
2019
|
|
%
|
||||||
Loan receivables, including held for sale
|
$
|
80,368
|
|
|
79.4
|
%
|
|
$
|
89,752
|
|
|
84.3
|
%
|
Liquidity portfolio and other
|
20,910
|
|
|
20.6
|
%
|
|
16,668
|
|
|
15.7
|
%
|
||
Total average interest-earning assets
|
$
|
101,278
|
|
|
100.0
|
%
|
|
$
|
106,420
|
|
|
100.0
|
%
|
Three months ended September 30 ($ in millions)
|
2020
|
|
%
|
|
2019
|
|
%
|
||||||
Interest-bearing deposit accounts
|
$
|
63,569
|
|
|
79.9
|
%
|
|
$
|
65,615
|
|
|
75.6
|
%
|
Borrowings of consolidated securitization entities
|
8,057
|
|
|
10.1
|
%
|
|
11,770
|
|
|
13.6
|
%
|
||
Senior unsecured notes
|
7,960
|
|
|
10.0
|
%
|
|
9,347
|
|
|
10.8
|
%
|
||
Total average interest-bearing liabilities
|
$
|
79,586
|
|
|
100.0
|
%
|
|
$
|
86,732
|
|
|
100.0
|
%
|
Nine months ended September 30 ($ in millions)
|
2020
|
|
%
|
|
2019
|
|
%
|
||||||
Interest-bearing deposit accounts
|
$
|
64,075
|
|
|
78.9
|
%
|
|
$
|
64,546
|
|
|
74.9
|
%
|
Borrowings of consolidated securitization entities
|
8,966
|
|
|
11.0
|
%
|
|
12,315
|
|
|
14.3
|
%
|
||
Senior unsecured notes
|
8,241
|
|
|
10.1
|
%
|
|
9,262
|
|
|
10.8
|
%
|
||
Total average interest-bearing liabilities
|
$
|
81,282
|
|
|
100.0
|
%
|
|
$
|
86,123
|
|
|
100.0
|
%
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Interchange revenue
|
$
|
172
|
|
|
$
|
197
|
|
|
$
|
467
|
|
|
$
|
556
|
|
Debt cancellation fees
|
68
|
|
|
64
|
|
|
206
|
|
|
201
|
|
||||
Loyalty programs
|
(155
|
)
|
|
(203
|
)
|
|
(447
|
)
|
|
(562
|
)
|
||||
Other
|
46
|
|
|
27
|
|
|
97
|
|
|
72
|
|
||||
Total other income
|
$
|
131
|
|
|
$
|
85
|
|
|
$
|
323
|
|
|
$
|
267
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Employee costs
|
$
|
382
|
|
|
$
|
359
|
|
|
$
|
1,033
|
|
|
$
|
1,070
|
|
Professional fees
|
187
|
|
|
205
|
|
|
573
|
|
|
668
|
|
||||
Marketing and business development
|
107
|
|
|
139
|
|
|
309
|
|
|
397
|
|
||||
Information processing
|
125
|
|
|
127
|
|
|
364
|
|
|
363
|
|
||||
Other
|
266
|
|
|
234
|
|
|
776
|
|
|
668
|
|
||||
Total other expense
|
$
|
1,067
|
|
|
$
|
1,064
|
|
|
$
|
3,055
|
|
|
$
|
3,166
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Effective tax rate
|
24.0
|
%
|
|
23.2
|
%
|
|
24.2
|
%
|
|
24.0
|
%
|
||||
Provision for income taxes
|
$
|
99
|
|
|
$
|
319
|
|
|
$
|
206
|
|
|
$
|
950
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Purchase volume
|
$
|
27,374
|
|
|
$
|
29,282
|
|
|
$
|
75,762
|
|
|
$
|
83,472
|
|
Period-end loan receivables
|
$
|
49,595
|
|
|
$
|
52,697
|
|
|
$
|
49,595
|
|
|
$
|
52,697
|
|
Average loan receivables, including held for sale
|
$
|
49,503
|
|
|
$
|
60,660
|
|
|
$
|
51,181
|
|
|
$
|
60,494
|
|
Average active accounts (in thousands)
|
47,065
|
|
|
58,082
|
|
|
49,197
|
|
|
58,156
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest and fees on loans
|
$
|
2,619
|
|
|
$
|
3,570
|
|
|
$
|
8,296
|
|
|
$
|
10,414
|
|
Retailer share arrangements
|
$
|
(877
|
)
|
|
$
|
(998
|
)
|
|
$
|
(2,533
|
)
|
|
$
|
(2,774
|
)
|
Other income
|
$
|
84
|
|
|
$
|
65
|
|
|
$
|
199
|
|
|
$
|
200
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Purchase volume
|
$
|
5,901
|
|
|
$
|
6,281
|
|
|
$
|
16,099
|
|
|
$
|
17,478
|
|
Period-end loan receivables
|
$
|
19,550
|
|
|
$
|
20,478
|
|
|
$
|
19,550
|
|
|
$
|
20,478
|
|
Average loan receivables, including held for sale
|
$
|
19,247
|
|
|
$
|
20,051
|
|
|
$
|
19,551
|
|
|
$
|
19,654
|
|
Average active accounts (in thousands)
|
11,497
|
|
|
12,384
|
|
|
12,031
|
|
|
12,354
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest and fees on loans
|
$
|
650
|
|
|
$
|
721
|
|
|
$
|
1,988
|
|
|
$
|
2,092
|
|
Retailer share arrangements
|
$
|
(20
|
)
|
|
$
|
(15
|
)
|
|
$
|
(56
|
)
|
|
$
|
(48
|
)
|
Other income
|
$
|
13
|
|
|
$
|
(1
|
)
|
|
$
|
40
|
|
|
$
|
11
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Purchase volume
|
$
|
2,738
|
|
|
$
|
2,832
|
|
|
$
|
7,349
|
|
|
$
|
8,249
|
|
Period-end loan receivables
|
$
|
9,376
|
|
|
$
|
10,032
|
|
|
$
|
9,376
|
|
|
$
|
10,032
|
|
Average loan receivables
|
$
|
9,255
|
|
|
$
|
9,845
|
|
|
$
|
9,636
|
|
|
$
|
9,604
|
|
Average active accounts (in thousands)
|
5,708
|
|
|
6,229
|
|
|
6,018
|
|
|
6,143
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest and fees on loans
|
$
|
552
|
|
|
$
|
599
|
|
|
$
|
1,685
|
|
|
$
|
1,707
|
|
Retailer share arrangements
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
$
|
(9
|
)
|
|
$
|
(7
|
)
|
Other income
|
$
|
34
|
|
|
$
|
21
|
|
|
$
|
84
|
|
|
$
|
56
|
|
($ in millions)
|
At September 30, 2020
|
|
(%)
|
|
At December 31, 2019
|
|
(%)
|
||||||
Loans
|
|
|
|
|
|
||||||||
Credit cards
|
$
|
75,204
|
|
|
95.8
|
%
|
|
$
|
84,606
|
|
|
97.1
|
%
|
Consumer installment loans
|
1,987
|
|
|
2.5
|
%
|
|
1,347
|
|
|
1.5
|
|
||
Commercial credit products
|
1,270
|
|
|
1.6
|
%
|
|
1,223
|
|
|
1.4
|
|
||
Other
|
60
|
|
|
0.1
|
%
|
|
39
|
|
|
—
|
|
||
Total loans
|
$
|
78,521
|
|
|
100.0
|
%
|
|
$
|
87,215
|
|
|
100.0
|
%
|
($ in millions)
|
Loan Receivables
Outstanding
|
|
% of Total Loan
Receivables
Outstanding
|
|||
State
|
||||||
Texas
|
$
|
8,067
|
|
|
10.3
|
%
|
California
|
$
|
8,023
|
|
|
10.2
|
%
|
Florida
|
$
|
6,750
|
|
|
8.6
|
%
|
New York
|
$
|
4,322
|
|
|
5.5
|
%
|
North Carolina
|
$
|
3,250
|
|
|
4.1
|
%
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Net charge-off rate
|
4.42
|
%
|
|
5.35
|
%
|
|
5.05
|
%
|
|
5.80
|
%
|
($ in millions)
|
|
Amounts under prior accounting guidance(1)
|
|
Impact of adoption of CECL
|
|
Ongoing implementation of CECL model
|
|
GAAP reported amounts
|
||||||||
At September 30, 2020
|
|
|
|
|
||||||||||||
Allowance for credit losses
|
|
$
|
6,475
|
|
|
$
|
3,021
|
|
|
$
|
650
|
|
|
$
|
10,146
|
|
Allowance coverage ratio
|
|
8.25
|
%
|
|
3.85
|
%
|
|
0.82
|
%
|
|
12.92
|
%
|
(1)
|
Amounts shown above as if the prior accounting guidance remained in effect are non-GAAP measures and are presented only in this initial year after adoption for comparability with the prior year reported GAAP metrics.
|
|
2020
|
|
2019
|
||||||||||||||||
Three months ended September 30 ($ in millions)
|
Average
Balance
|
|
%
|
|
Average
Rate
|
|
Average
Balance
|
|
%
|
|
Average
Rate
|
||||||||
Deposits(1)
|
$
|
63,569
|
|
|
79.9
|
%
|
|
1.5
|
%
|
|
$
|
65,615
|
|
|
75.6
|
%
|
|
2.5
|
%
|
Securitized financings
|
8,057
|
|
|
10.1
|
|
|
2.6
|
|
|
11,770
|
|
|
13.6
|
|
|
3.0
|
|
||
Senior unsecured notes
|
7,960
|
|
|
10.0
|
|
|
4.1
|
|
|
9,347
|
|
|
10.8
|
|
|
4.0
|
|
||
Total
|
$
|
79,586
|
|
|
100.0
|
%
|
|
1.9
|
%
|
|
$
|
86,732
|
|
|
100.0
|
%
|
|
2.7
|
%
|
(1)
|
Excludes $307 million and $283 million average balance of non-interest-bearing deposits for the three months ended September 30, 2020 and 2019, respectively. Non-interest-bearing deposits comprise less than 10% of total deposits for the three months ended September 30, 2020 and 2019.
|
|
2020
|
|
2019
|
||||||||||||||||
Nine months ended September 30 ($ in millions)
|
Average
Balance
|
|
%
|
|
Average
Rate
|
|
Average
Balance
|
|
%
|
|
Average
Rate
|
||||||||
Deposits(1)
|
$
|
64,075
|
|
|
78.9
|
%
|
|
1.9
|
%
|
|
$
|
64,546
|
|
|
74.9
|
%
|
|
2.5
|
%
|
Securitized financings
|
8,966
|
|
|
11.0
|
|
|
2.8
|
|
|
12,315
|
|
|
14.3
|
|
|
3.0
|
|
||
Senior unsecured notes
|
8,241
|
|
|
10.1
|
|
|
4.1
|
|
|
9,262
|
|
|
10.8
|
|
|
4.0
|
|
||
Total
|
$
|
81,282
|
|
|
100.0
|
%
|
|
2.2
|
%
|
|
$
|
86,123
|
|
|
100.0
|
%
|
|
2.7
|
%
|
(1)
|
Excludes $305 million and $280 million average balance of non-interest-bearing deposits for the nine months ended September 30, 2020 and 2019, respectively. Non-interest-bearing deposits comprise less than 10% of total deposits for the nine months ended September 30, 2020 and 2019.
|
Three months ended September 30 ($ in millions)
|
2020
|
|
2019
|
||||||||||||||||
Average
Balance
|
|
%
|
|
Average
Rate
|
|
Average
Balance
|
|
%
|
|
Average
Rate
|
|||||||||
Direct deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit (including IRA certificates of deposit)
|
$
|
29,810
|
|
|
46.9
|
%
|
|
2.0
|
%
|
|
$
|
34,100
|
|
|
52.0
|
%
|
|
2.6
|
%
|
Savings accounts (including money market accounts)
|
22,680
|
|
|
35.7
|
|
|
0.8
|
|
|
18,856
|
|
|
28.7
|
|
|
2.1
|
|
||
Brokered deposits
|
11,079
|
|
|
17.4
|
|
|
1.7
|
|
|
12,659
|
|
|
19.3
|
|
|
2.7
|
|
||
Total interest-bearing deposits
|
$
|
63,569
|
|
|
100.0
|
%
|
|
1.5
|
%
|
|
$
|
65,615
|
|
|
100.0
|
%
|
|
2.5
|
%
|
Nine months ended September 30 ($ in millions)
|
2020
|
|
2019
|
||||||||||||||||
Average
Balance
|
|
% of
Total
|
|
Average
Rate
|
|
Average
Balance
|
|
% of
Total
|
|
Average
Rate
|
|||||||||
Direct deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit (including IRA certificates of deposit)
|
$
|
31,871
|
|
|
49.7
|
%
|
|
2.2
|
%
|
|
$
|
33,147
|
|
|
51.3
|
%
|
|
2.5
|
%
|
Savings accounts (including money market accounts)
|
21,121
|
|
|
33.0
|
|
|
1.2
|
|
|
18,626
|
|
|
28.9
|
|
|
2.1
|
|
||
Brokered deposits
|
11,084
|
|
|
17.3
|
|
|
1.9
|
|
|
12,773
|
|
|
19.8
|
|
|
2.7
|
|
||
Total interest-bearing deposits
|
$
|
64,076
|
|
|
100.0
|
%
|
|
1.9
|
%
|
|
$
|
64,546
|
|
|
100.0
|
%
|
|
2.5
|
%
|
($ in millions)
|
3 Months or
Less
|
|
Over
3 Months
but within
6 Months
|
|
Over
6 Months
but within
12 Months
|
|
Over
12 Months
|
|
Total
|
||||||||||
U.S. deposits (less than FDIC insurance limit)(1)(2)
|
$
|
26,943
|
|
|
$
|
5,910
|
|
|
$
|
8,771
|
|
|
$
|
9,037
|
|
|
$
|
50,661
|
|
U.S. deposits (in excess of FDIC insurance limit)(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Certificates of deposit (including IRA certificates of deposit)
|
1,182
|
|
|
1,934
|
|
|
2,417
|
|
|
1,448
|
|
|
6,981
|
|
|||||
Savings accounts (including money market accounts)
|
5,827
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,827
|
|
|||||
Brokered deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sweep accounts
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Total
|
$
|
33,976
|
|
|
$
|
7,844
|
|
|
$
|
11,188
|
|
|
$
|
10,485
|
|
|
$
|
63,493
|
|
(1)
|
Includes brokered certificates of deposit for which underlying individual deposit balances are assumed to be less than $250,000.
|
(2)
|
The standard deposit insurance amount is $250,000 per depositor, for each account ownership category. Deposits in excess of FDIC insurance limit presented above include partially uninsured accounts.
|
($ in millions)
|
Less Than
One Year
|
|
One Year
Through
Three
Years
|
|
Four Years
Through
Five
Years
|
|
After Five
Years
|
|
Total
|
||||||||||
Scheduled maturities of long-term borrowings—owed to securitization investors:
|
|
|
|
|
|
|
|
|
|
||||||||||
SYNCT(1)
|
$
|
1,725
|
|
|
$
|
3,191
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,916
|
|
SFT
|
—
|
|
|
300
|
|
|
—
|
|
|
—
|
|
|
300
|
|
|||||
SYNIT(1)
|
1,000
|
|
|
1,600
|
|
|
—
|
|
|
—
|
|
|
2,600
|
|
|||||
Total long-term borrowings—owed to securitization investors
|
$
|
2,725
|
|
|
$
|
5,091
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,816
|
|
(1)
|
Excludes any subordinated classes of SYNCT notes and SYNIT notes that we owned at September 30, 2020.
|
|
Note Principal Balance
($ in millions)
|
|
# of Series
Outstanding
|
|
Three-Month Rolling
Average Excess
Spread(1)
|
||||
SYNCT
|
$
|
5,144
|
|
|
9
|
|
|
~15.6% to 17.9%
|
|
SFT
|
$
|
300
|
|
|
7
|
|
|
16.3
|
%
|
SYNIT
|
$
|
2,600
|
|
|
1
|
|
|
16.6
|
%
|
(1)
|
Represents the excess spread (generally calculated as interest income collected from the applicable pool of loan receivables less applicable net charge-offs, interest expense and servicing costs, divided by the aggregate principal amount of loan receivables in the applicable pool) for SFT or, in the case of SYNCT and SYNIT, a range of the excess spreads relating to the particular series issued within each trust and omitting any series that have not been outstanding for at least three full monthly periods, in each case calculated in accordance with the applicable trust or series documentation, for the three securitization monthly periods ended September 30, 2020.
|
Issuance Date
|
|
Interest Rate(1)
|
|
Maturity
|
|
Principal Amount Outstanding(2)
|
||
($ in millions)
|
|
|
|
|
|
|
||
Fixed rate senior unsecured notes:
|
|
|
|
|
|
|
||
Synchrony Financial
|
|
|
|
|
|
|
||
August 2014
|
|
3.750%
|
|
August 2021
|
|
$
|
750
|
|
August 2014
|
|
4.250%
|
|
August 2024
|
|
1,250
|
|
|
July 2015
|
|
4.500%
|
|
July 2025
|
|
1,000
|
|
|
August 2016
|
|
3.700%
|
|
August 2026
|
|
500
|
|
|
December 2017
|
|
3.950%
|
|
December 2027
|
|
1,000
|
|
|
March 2019
|
|
4.375%
|
|
March 2024
|
|
600
|
|
|
March 2019
|
|
5.150%
|
|
March 2029
|
|
650
|
|
|
July 2019
|
|
2.850%
|
|
July 2022
|
|
750
|
|
|
Synchrony Bank
|
|
|
|
|
|
|
||
June 2017
|
|
3.000%
|
|
June 2022
|
|
750
|
|
|
May 2018
|
|
3.650%
|
|
May 2021
|
|
750
|
|
|
Total fixed rate senior unsecured notes
|
|
|
|
|
|
$
|
8,000
|
|
(1)
|
Weighted average interest rate of all senior unsecured notes at September 30, 2020 was 3.94%.
|
(2)
|
The amounts shown exclude unamortized debt discount, premiums and issuance cost.
|
|
S&P
|
|
Fitch Ratings
|
Synchrony Financial
|
|
|
|
Senior unsecured debt
|
BBB-
|
|
BBB-
|
Preferred stock
|
BB-
|
|
B+
|
Outlook for Synchrony Financial senior unsecured debt
|
Negative
|
|
Negative
|
Synchrony Bank
|
|
|
|
Senior unsecured debt
|
BBB
|
|
BBB-
|
Outlook for Synchrony Bank senior unsecured debt
|
Negative
|
|
Negative
|
Common Stock Cash Dividends Declared
|
|
Month of Payment
|
|
Amount per Common Share
|
|
Amount
|
||||
($ in millions, except per share data)
|
|
|
|
|
|
|
||||
Three months ended March 31, 2020
|
|
February 2020
|
|
$
|
0.22
|
|
|
$
|
135
|
|
Three months ended June 30, 2020
|
|
May 2020
|
|
0.22
|
|
|
128
|
|
||
Three months ended September 30, 2020
|
|
August, 2020
|
|
0.22
|
|
|
129
|
|
||
Total dividends declared
|
|
|
|
$
|
0.66
|
|
|
$
|
392
|
|
Preferred Stock Cash Dividends Declared
|
|
Month of Payment
|
|
Amount per Preferred Share
|
|
Amount
|
||||
($ in millions, except per share data)
|
|
|
|
|
|
|
||||
Three months ended March 31, 2020
|
|
February 2020
|
|
$
|
14.22
|
|
|
$
|
11
|
|
Three months ended June 30, 2020
|
|
May 2020
|
|
14.06
|
|
|
11
|
|
||
Three months ended September 30, 2020
|
|
August, 2020
|
|
14.06
|
|
|
10
|
|
||
Total dividends declared
|
|
|
|
$
|
42.34
|
|
|
$
|
32
|
|
Common Shares Repurchased Under Publicly Announced Programs
|
|
Total Number of Shares Purchased
|
|
Dollar Value of Shares Purchased
|
|||
($ and shares in millions)
|
|
|
|
|
|||
Three months ended March 31, 2020
|
|
33.6
|
|
|
$
|
984
|
|
Three months ended June 30, 2020
|
|
—
|
|
|
—
|
|
|
Three months ended September 30, 2020
|
|
—
|
|
|
—
|
|
|
Total
|
|
33.6
|
|
|
$
|
984
|
|
|
Basel III
|
||||||||||||
|
At September 30, 2020
|
|
At December 31, 2019
|
||||||||||
($ in millions)
|
Amount
|
|
Ratio(1)
|
|
Amount
|
|
Ratio(1)
|
||||||
Total risk-based capital
|
$
|
13,925
|
|
|
18.1
|
%
|
|
$
|
14,211
|
|
|
16.3
|
%
|
Tier 1 risk-based capital
|
$
|
12,891
|
|
|
16.7
|
%
|
|
$
|
13,064
|
|
|
15.0
|
%
|
Tier 1 leverage
|
$
|
12,891
|
|
|
13.3
|
%
|
|
$
|
13,064
|
|
|
12.6
|
%
|
Common equity Tier 1 capital
|
$
|
12,157
|
|
|
15.8
|
%
|
|
$
|
12,330
|
|
|
14.1
|
%
|
Risk-weighted assets
|
$
|
76,990
|
|
|
|
|
$
|
87,302
|
|
|
|
(1)
|
Tier 1 leverage ratio represents total Tier 1 capital as a percentage of total average assets, after certain adjustments. All other ratios presented above represent the applicable capital measure as a percentage of risk-weighted assets.
|
|
At September 30, 2020
|
|
At December 31, 2019
|
|
Minimum to be Well-
Capitalized
under Prompt Corrective Action Provisions
|
||||||||||
($ in millions)
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Ratio
|
||||||
Total risk-based capital
|
$
|
12,260
|
|
|
17.9
|
%
|
|
$
|
11,911
|
|
|
15.6
|
%
|
|
10.0%
|
Tier 1 risk-based capital
|
$
|
11,340
|
|
|
16.6
|
%
|
|
$
|
10,907
|
|
|
14.3
|
%
|
|
8.0%
|
Tier 1 leverage
|
$
|
11,340
|
|
|
13.0
|
%
|
|
$
|
10,907
|
|
|
11.9
|
%
|
|
5.0%
|
Common equity Tier 1 capital
|
$
|
11,340
|
|
|
16.6
|
%
|
|
$
|
10,907
|
|
|
14.3
|
%
|
|
6.5%
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions, except per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Interest income:
|
|
|
|
|
|
|
|
||||||||
Interest and fees on loans (Note 4)
|
$
|
3,821
|
|
|
$
|
4,890
|
|
|
$
|
11,969
|
|
|
$
|
14,213
|
|
Interest on cash and debt securities
|
16
|
|
|
91
|
|
|
105
|
|
|
292
|
|
||||
Total interest income
|
3,837
|
|
|
4,981
|
|
|
12,074
|
|
|
14,505
|
|
||||
Interest expense:
|
|
|
|
|
|
|
|
||||||||
Interest on deposits
|
245
|
|
|
411
|
|
|
894
|
|
|
1,183
|
|
||||
Interest on borrowings of consolidated securitization entities
|
53
|
|
|
88
|
|
|
185
|
|
|
278
|
|
||||
Interest on senior unsecured notes
|
82
|
|
|
93
|
|
|
252
|
|
|
274
|
|
||||
Total interest expense
|
380
|
|
|
592
|
|
|
1,331
|
|
|
1,735
|
|
||||
Net interest income
|
3,457
|
|
|
4,389
|
|
|
10,743
|
|
|
12,770
|
|
||||
Retailer share arrangements
|
(899
|
)
|
|
(1,016
|
)
|
|
(2,598
|
)
|
|
(2,829
|
)
|
||||
Provision for credit losses (Note 4)
|
1,210
|
|
|
1,019
|
|
|
4,560
|
|
|
3,076
|
|
||||
Net interest income, after retailer share arrangements and provision for credit losses
|
1,348
|
|
|
2,354
|
|
|
3,585
|
|
|
6,865
|
|
||||
Other income:
|
|
|
|
|
|
|
|
||||||||
Interchange revenue
|
172
|
|
|
197
|
|
|
467
|
|
|
556
|
|
||||
Debt cancellation fees
|
68
|
|
|
64
|
|
|
206
|
|
|
201
|
|
||||
Loyalty programs
|
(155
|
)
|
|
(203
|
)
|
|
(447
|
)
|
|
(562
|
)
|
||||
Other
|
46
|
|
|
27
|
|
|
97
|
|
|
72
|
|
||||
Total other income
|
131
|
|
|
85
|
|
|
323
|
|
|
267
|
|
||||
Other expense:
|
|
|
|
|
|
|
|
||||||||
Employee costs
|
382
|
|
|
359
|
|
|
1,033
|
|
|
1,070
|
|
||||
Professional fees
|
187
|
|
|
205
|
|
|
573
|
|
|
668
|
|
||||
Marketing and business development
|
107
|
|
|
139
|
|
|
309
|
|
|
397
|
|
||||
Information processing
|
125
|
|
|
127
|
|
|
364
|
|
|
363
|
|
||||
Other
|
266
|
|
|
234
|
|
|
776
|
|
|
668
|
|
||||
Total other expense
|
1,067
|
|
|
1,064
|
|
|
3,055
|
|
|
3,166
|
|
||||
Earnings before provision for income taxes
|
412
|
|
|
1,375
|
|
|
853
|
|
|
3,966
|
|
||||
Provision for income taxes (Note 13)
|
99
|
|
|
319
|
|
|
206
|
|
|
950
|
|
||||
Net earnings
|
$
|
313
|
|
|
$
|
1,056
|
|
|
$
|
647
|
|
|
$
|
3,016
|
|
Net earnings available to common stockholders
|
$
|
303
|
|
|
$
|
1,056
|
|
|
$
|
615
|
|
|
$
|
3,016
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.52
|
|
|
$
|
1.60
|
|
|
$
|
1.04
|
|
|
$
|
4.42
|
|
Diluted
|
$
|
0.52
|
|
|
$
|
1.60
|
|
|
$
|
1.04
|
|
|
$
|
4.40
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
313
|
|
|
$
|
1,056
|
|
|
$
|
647
|
|
|
$
|
3,016
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Debt securities
|
—
|
|
|
3
|
|
|
29
|
|
|
35
|
|
||||
Currency translation adjustments
|
6
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Employee benefit plans
|
—
|
|
|
(3
|
)
|
|
(1
|
)
|
|
(4
|
)
|
||||
Other comprehensive income (loss)
|
6
|
|
|
(1
|
)
|
|
27
|
|
|
31
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
319
|
|
|
$
|
1,055
|
|
|
$
|
674
|
|
|
$
|
3,047
|
|
($ in millions)
|
At September 30, 2020
|
|
At December 31, 2019
|
||||
Assets
|
|
|
|
||||
Cash and equivalents
|
$
|
13,552
|
|
|
$
|
12,147
|
|
Debt securities (Note 3)
|
8,432
|
|
|
5,911
|
|
||
Loan receivables: (Notes 4 and 5)
|
|
|
|
||||
Unsecuritized loans held for investment
|
52,613
|
|
|
58,398
|
|
||
Restricted loans of consolidated securitization entities
|
25,908
|
|
|
28,817
|
|
||
Total loan receivables
|
78,521
|
|
|
87,215
|
|
||
Less: Allowance for credit losses
|
(10,146
|
)
|
|
(5,602
|
)
|
||
Loan receivables, net
|
68,375
|
|
|
81,613
|
|
||
Loan receivables held for sale (Note 4)
|
4
|
|
|
725
|
|
||
Goodwill
|
1,078
|
|
|
1,078
|
|
||
Intangible assets, net (Note 6)
|
1,091
|
|
|
1,265
|
|
||
Other assets
|
3,126
|
|
|
2,087
|
|
||
Total assets
|
$
|
95,658
|
|
|
$
|
104,826
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Deposits: (Note 7)
|
|
|
|
||||
Interest-bearing deposit accounts
|
$
|
63,195
|
|
|
$
|
64,877
|
|
Non-interest-bearing deposit accounts
|
298
|
|
|
277
|
|
||
Total deposits
|
63,493
|
|
|
65,154
|
|
||
Borrowings: (Notes 5 and 8)
|
|
|
|
||||
Borrowings of consolidated securitization entities
|
7,809
|
|
|
10,412
|
|
||
Senior unsecured notes
|
7,962
|
|
|
9,454
|
|
||
Total borrowings
|
15,771
|
|
|
19,866
|
|
||
Accrued expenses and other liabilities
|
4,295
|
|
|
4,718
|
|
||
Total liabilities
|
$
|
83,559
|
|
|
$
|
89,738
|
|
|
|
|
|
||||
Equity:
|
|
|
|
||||
Preferred stock, par share value $0.001 per share; 750,000 shares authorized; 750,000 shares issued and outstanding at both September 30, 2020 and December 31, 2019 and aggregate liquidation preference of $750 at both September 30, 2020 and December 31, 2019
|
$
|
734
|
|
|
$
|
734
|
|
Common Stock, par share value $0.001 per share; 4,000,000,000 shares authorized; 833,984,684 shares issued at both September 30, 2020 and December 31, 2019; 583,766,270 and 615,925,168 shares outstanding at September 30, 2020 and December 31, 2019, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
9,552
|
|
|
9,537
|
|
||
Retained earnings
|
10,024
|
|
|
12,117
|
|
||
Accumulated other comprehensive income (loss):
|
|
|
|
||||
Debt securities
|
28
|
|
|
(1
|
)
|
||
Currency translation adjustments
|
(25
|
)
|
|
(24
|
)
|
||
Employee benefit plans
|
(34
|
)
|
|
(33
|
)
|
||
Treasury stock, at cost; 250,218,414 and 218,059,516 shares at September 30, 2020 and December 31, 2019, respectively
|
(8,181
|
)
|
|
(7,243
|
)
|
||
Total equity
|
12,099
|
|
|
15,088
|
|
||
Total liabilities and equity
|
$
|
95,658
|
|
|
$
|
104,826
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
($ in millions,
shares in thousands)
|
Shares Issued
|
|
Amount
|
|
Shares Issued
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Treasury Stock
|
|
Total Equity
|
||||||||||||||||
Balance at
January 1, 2019
|
—
|
|
|
$
|
—
|
|
|
833,985
|
|
|
$
|
1
|
|
|
$
|
9,482
|
|
|
$
|
8,986
|
|
|
$
|
(62
|
)
|
|
$
|
(3,729
|
)
|
|
$
|
14,678
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,107
|
|
|
—
|
|
|
—
|
|
|
1,107
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(967
|
)
|
|
(967
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(17
|
)
|
|
—
|
|
|
32
|
|
|
22
|
|
|||||||
Dividends - common stock
($0.21 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|||||||
Balance at
March 31, 2019
|
—
|
|
|
$
|
—
|
|
|
833,985
|
|
|
$
|
1
|
|
|
$
|
9,489
|
|
|
$
|
9,939
|
|
|
$
|
(56
|
)
|
|
$
|
(4,664
|
)
|
|
$
|
14,709
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
853
|
|
|
—
|
|
|
—
|
|
|
853
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(725
|
)
|
|
(725
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
(20
|
)
|
|
—
|
|
|
38
|
|
|
29
|
|
|||||||
Dividends - common stock
($0.21 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|||||||
Balance at
June 30, 2019
|
—
|
|
|
$
|
—
|
|
|
833,985
|
|
|
$
|
1
|
|
|
$
|
9,500
|
|
|
$
|
10,627
|
|
|
$
|
(43
|
)
|
|
$
|
(5,351
|
)
|
|
$
|
14,734
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,056
|
|
|
—
|
|
|
—
|
|
|
1,056
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(550
|
)
|
|
(550
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
(5
|
)
|
|
—
|
|
|
11
|
|
|
26
|
|
|||||||
Dividends - common stock
($0.22 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|||||||
Balance at
September 30, 2019
|
—
|
|
|
$
|
—
|
|
|
833,985
|
|
|
$
|
1
|
|
|
$
|
9,520
|
|
|
$
|
11,533
|
|
|
$
|
(44
|
)
|
|
$
|
(5,890
|
)
|
|
$
|
15,120
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
($ in millions,
shares in thousands)
|
Shares Issued
|
|
Amount
|
|
Shares Issued
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Treasury Stock
|
|
Total Equity
|
||||||||||||||||
Balance at
January 1, 2020
|
750
|
|
|
$
|
734
|
|
|
833,985
|
|
|
$
|
1
|
|
|
$
|
9,537
|
|
|
$
|
12,117
|
|
|
$
|
(58
|
)
|
|
$
|
(7,243
|
)
|
|
$
|
15,088
|
|
Cumulative effect of change in accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,276
|
)
|
|
—
|
|
|
—
|
|
|
(2,276
|
)
|
|||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
286
|
|
|
—
|
|
|
—
|
|
|
286
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(985
|
)
|
|
(985
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(21
|
)
|
|
—
|
|
|
29
|
|
|
(6
|
)
|
|||||||
Dividends - preferred stock
($14.22 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||||
Dividends - common stock
($0.22 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(135
|
)
|
|
—
|
|
|
—
|
|
|
(135
|
)
|
|||||||
Balance at
March 31, 2020
|
750
|
|
|
$
|
734
|
|
|
833,985
|
|
|
$
|
1
|
|
|
$
|
9,523
|
|
|
$
|
9,960
|
|
|
$
|
(49
|
)
|
|
$
|
(8,199
|
)
|
|
$
|
11,970
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
(17
|
)
|
|
—
|
|
|
16
|
|
|
8
|
|
|||||||
Dividends - preferred stock
($14.06 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||||
Dividends - common stock
($0.22 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
|||||||
Balance at
June 30, 2020
|
750
|
|
|
$
|
734
|
|
|
833,985
|
|
|
$
|
1
|
|
|
$
|
9,532
|
|
|
$
|
9,852
|
|
|
$
|
(37
|
)
|
|
$
|
(8,183
|
)
|
|
$
|
11,899
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
313
|
|
|
—
|
|
|
—
|
|
|
313
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
(2
|
)
|
|
—
|
|
|
2
|
|
|
20
|
|
|||||||
Dividends - preferred stock
($14.06 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||||
Dividends - common stock
($0.22 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(129
|
)
|
|
—
|
|
|
—
|
|
|
(129
|
)
|
|||||||
Other
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Balance at September 30, 2020
|
750
|
|
|
$
|
734
|
|
|
833,985
|
|
|
$
|
1
|
|
|
$
|
9,552
|
|
|
$
|
10,024
|
|
|
$
|
(31
|
)
|
|
$
|
(8,181
|
)
|
|
$
|
12,099
|
|
|
Nine months ended September 30,
|
||||||
($ in millions)
|
2020
|
|
2019
|
||||
Cash flows - operating activities
|
|
|
|
||||
Net earnings
|
$
|
647
|
|
|
$
|
3,016
|
|
Adjustments to reconcile net earnings to cash provided from operating activities
|
|
|
|
||||
Provision for credit losses
|
4,560
|
|
|
3,076
|
|
||
Deferred income taxes
|
(468
|
)
|
|
103
|
|
||
Depreciation and amortization
|
290
|
|
|
273
|
|
||
(Increase) decrease in interest and fees receivable
|
394
|
|
|
(430
|
)
|
||
(Increase) decrease in other assets
|
(85
|
)
|
|
46
|
|
||
Increase (decrease) in accrued expenses and other liabilities
|
(483
|
)
|
|
125
|
|
||
All other operating activities
|
546
|
|
|
445
|
|
||
Cash provided from (used for) operating activities
|
5,401
|
|
|
6,654
|
|
||
|
|
|
|
||||
Cash flows - investing activities
|
|
|
|
||||
Maturity and sales of debt securities
|
4,943
|
|
|
6,766
|
|
||
Purchases of debt securities
|
(7,423
|
)
|
|
(5,178
|
)
|
||
Proceeds from sale of loan receivables
|
709
|
|
|
—
|
|
||
Net (increase) decrease in loan receivables, including held for sale
|
4,798
|
|
|
(2,016
|
)
|
||
All other investing activities
|
(266
|
)
|
|
(514
|
)
|
||
Cash provided from (used for) investing activities
|
2,761
|
|
|
(942
|
)
|
||
|
|
|
|
||||
Cash flows - financing activities
|
|
|
|
||||
Borrowings of consolidated securitization entities
|
|
|
|
||||
Proceeds from issuance of securitized debt
|
675
|
|
|
3,345
|
|
||
Maturities and repayment of securitized debt
|
(3,282
|
)
|
|
(6,877
|
)
|
||
Senior unsecured notes
|
|
|
|
||||
Proceeds from issuance of senior unsecured notes
|
—
|
|
|
1,985
|
|
||
Maturities and repayment of senior unsecured notes
|
(1,500
|
)
|
|
(2,100
|
)
|
||
Dividends paid on preferred stock
|
(32
|
)
|
|
—
|
|
||
Net increase (decrease) in deposits
|
(1,656
|
)
|
|
1,940
|
|
||
Purchases of treasury stock
|
(985
|
)
|
|
(2,242
|
)
|
||
Dividends paid on common stock
|
(392
|
)
|
|
(440
|
)
|
||
All other financing activities
|
(11
|
)
|
|
22
|
|
||
Cash provided from (used for) financing activities
|
(7,183
|
)
|
|
(4,367
|
)
|
||
|
|
|
|
||||
Increase (decrease) in cash and equivalents, including restricted amounts
|
979
|
|
|
1,345
|
|
||
Cash and equivalents, including restricted amounts, at beginning of period
|
12,647
|
|
|
10,376
|
|
||
Cash and equivalents at end of period:
|
|
|
|
||||
Cash and equivalents
|
13,552
|
|
|
11,461
|
|
||
Restricted cash and equivalents included in other assets
|
74
|
|
|
260
|
|
||
Total cash and equivalents, including restricted amounts, at end of period
|
$
|
13,626
|
|
|
$
|
11,721
|
|
|
September 30, 2020
|
|
December 31, 2019
|
||||||||||||||||||||||||||||
|
|
|
Gross
|
|
|
Gross
|
|
|
|
|
|
|
Gross
|
|
|
Gross
|
|
|
|
||||||||||||
|
Amortized
|
|
|
unrealized
|
|
|
unrealized
|
|
|
Estimated
|
|
|
Amortized
|
|
|
unrealized
|
|
|
unrealized
|
|
|
Estimated
|
|
||||||||
($ in millions)
|
cost
|
|
|
gains
|
|
|
losses
|
|
|
fair value
|
|
|
cost
|
|
|
gains
|
|
|
losses
|
|
|
fair value
|
|
||||||||
U.S. government and federal agency
|
$
|
5,198
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
5,199
|
|
|
$
|
2,468
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2,469
|
|
State and municipal
|
40
|
|
|
—
|
|
|
(1
|
)
|
|
39
|
|
|
46
|
|
|
1
|
|
|
(2
|
)
|
|
45
|
|
||||||||
Residential mortgage-backed(a)
|
804
|
|
|
26
|
|
|
—
|
|
|
830
|
|
|
1,029
|
|
|
6
|
|
|
(9
|
)
|
|
1,026
|
|
||||||||
Asset-backed(b)
|
2,353
|
|
|
11
|
|
|
—
|
|
|
2,364
|
|
|
2,368
|
|
|
3
|
|
|
—
|
|
|
2,371
|
|
||||||||
Total
|
$
|
8,395
|
|
|
$
|
38
|
|
|
$
|
(1
|
)
|
|
$
|
8,432
|
|
|
$
|
5,911
|
|
|
$
|
11
|
|
|
$
|
(11
|
)
|
|
$
|
5,911
|
|
(a)
|
All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At September 30, 2020 and December 31, 2019, $267 million and $351 million of residential mortgage-backed securities, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances.
|
(b)
|
All of our asset-backed securities are collateralized by credit card loans.
|
|
In loss position for
|
||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
||||||||||||
|
|
|
Gross
|
|
|
|
|
Gross
|
|
||||||
|
Estimated
|
|
|
unrealized
|
|
|
Estimated
|
|
|
unrealized
|
|
||||
($ in millions)
|
fair value
|
|
|
losses
|
|
|
fair value
|
|
|
losses
|
|
||||
At September 30, 2020
|
|
|
|
|
|
|
|
||||||||
U.S. government and federal agency
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and municipal
|
3
|
|
|
—
|
|
|
22
|
|
|
(1
|
)
|
||||
Residential mortgage-backed
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Asset-backed
|
242
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
254
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
||||||||
At December 31, 2019
|
|
|
|
|
|
|
|
||||||||
U.S. government and federal agency
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and municipal
|
—
|
|
|
—
|
|
|
24
|
|
|
(2
|
)
|
||||
Residential mortgage-backed
|
76
|
|
|
—
|
|
|
618
|
|
|
(9
|
)
|
||||
Asset-backed
|
202
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
278
|
|
|
$
|
—
|
|
|
$
|
642
|
|
|
$
|
(11
|
)
|
|
Amortized
|
|
|
Estimated
|
|
|
Weighted
|
|
||
At September 30, 2020 ($ in millions)
|
cost
|
|
|
fair value
|
|
|
Average yield (a)
|
|
||
Due
|
|
|
|
|
|
|||||
Within one year
|
$
|
6,553
|
|
|
$
|
6,560
|
|
|
0.4
|
%
|
After one year through five years
|
$
|
999
|
|
|
$
|
1,004
|
|
|
0.7
|
%
|
After five years through ten years
|
$
|
147
|
|
|
$
|
153
|
|
|
2.5
|
%
|
After ten years
|
$
|
696
|
|
|
$
|
715
|
|
|
1.9
|
%
|
(a)
|
Weighted average yield is calculated based on the amortized cost of each security. In calculating yield, no adjustment has been made with respect to any tax-exempt obligations.
|
($ in millions)
|
September 30, 2020
|
|
December 31, 2019
|
||||
Credit cards
|
$
|
75,204
|
|
|
$
|
84,606
|
|
Consumer installment loans
|
1,987
|
|
|
1,347
|
|
||
Commercial credit products
|
1,270
|
|
|
1,223
|
|
||
Other
|
60
|
|
|
39
|
|
||
Total loan receivables, before allowance for losses(a)(b)
|
$
|
78,521
|
|
|
$
|
87,215
|
|
(a)
|
Total loan receivables include $25.9 billion and $28.8 billion of restricted loans of consolidated securitization entities at September 30, 2020 and December 31, 2019, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans.
|
(b)
|
At September 30, 2020 and December 31, 2019, loan receivables included deferred costs, net of deferred income, of $130 million and $140 million, respectively.
|
($ in millions)
|
Balance at July 1, 2020
|
|
|
Provision charged to operations
|
|
|
Gross charge-offs
|
|
|
Recoveries
|
|
|
Balance at
September 30, 2020 |
|
|||||
Credit cards
|
$
|
9,637
|
|
|
$
|
1,143
|
|
|
$
|
(1,052
|
)
|
|
$
|
202
|
|
|
$
|
9,930
|
|
Consumer installment loans
|
103
|
|
|
50
|
|
|
(9
|
)
|
|
4
|
|
|
148
|
|
|||||
Commercial credit products
|
61
|
|
|
17
|
|
|
(13
|
)
|
|
2
|
|
|
67
|
|
|||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Total
|
$
|
9,802
|
|
|
$
|
1,210
|
|
|
$
|
(1,074
|
)
|
|
$
|
208
|
|
|
$
|
10,146
|
|
($ in millions)
|
Balance at January 1, 2020
|
|
|
Impact of ASU 2016-13 Adoption
|
|
|
Post-Adoption Balance at January 1, 2020
|
|
|
Provision charged to operations
|
|
|
Gross charge-offs
|
|
|
Recoveries
|
|
|
Balance at
September 30, 2020 |
|
|||||||
Credit cards
|
$
|
5,506
|
|
|
$
|
2,989
|
|
|
$
|
8,495
|
|
|
$
|
4,411
|
|
|
$
|
(3,712
|
)
|
|
$
|
736
|
|
|
$
|
9,930
|
|
Consumer installment loans
|
46
|
|
|
26
|
|
|
72
|
|
|
102
|
|
|
(36
|
)
|
|
10
|
|
|
148
|
|
|||||||
Commercial credit products
|
49
|
|
|
6
|
|
|
55
|
|
|
47
|
|
|
(42
|
)
|
|
7
|
|
|
67
|
|
|||||||
Other
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Total
|
$
|
5,602
|
|
|
$
|
3,021
|
|
|
$
|
8,623
|
|
|
$
|
4,560
|
|
|
$
|
(3,790
|
)
|
|
$
|
753
|
|
|
$
|
10,146
|
|
($ in millions)
|
Balance at July 1, 2019
|
|
|
Provision charged to operations
|
|
|
Gross charge-offs
|
|
|
Recoveries
|
|
|
Balance at
September 30, 2019 |
|
|||||
Credit cards
|
$
|
5,702
|
|
|
$
|
993
|
|
|
$
|
(1,422
|
)
|
|
$
|
225
|
|
|
$
|
5,498
|
|
Consumer installment loans
|
50
|
|
|
18
|
|
|
(16
|
)
|
|
4
|
|
|
56
|
|
|||||
Commercial credit products
|
55
|
|
|
9
|
|
|
(14
|
)
|
|
2
|
|
|
52
|
|
|||||
Other
|
2
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Total
|
$
|
5,809
|
|
|
$
|
1,019
|
|
|
$
|
(1,452
|
)
|
|
$
|
231
|
|
|
$
|
5,607
|
|
($ in millions)
|
Balance at January 1, 2019
|
|
|
Provision charged to operations
|
|
|
Gross charge-offs
|
|
|
Recoveries
|
|
|
Balance at
September 30, 2019 |
|
|||||
Credit cards
|
$
|
6,327
|
|
|
$
|
2,994
|
|
|
$
|
(4,584
|
)
|
|
$
|
761
|
|
|
$
|
5,498
|
|
Consumer installment loans
|
44
|
|
|
46
|
|
|
(47
|
)
|
|
13
|
|
|
56
|
|
|||||
Commercial credit products
|
55
|
|
|
35
|
|
|
(43
|
)
|
|
5
|
|
|
52
|
|
|||||
Other
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|||||
Total
|
$
|
6,427
|
|
|
$
|
3,076
|
|
|
$
|
(4,675
|
)
|
|
$
|
779
|
|
|
$
|
5,607
|
|
(a)
|
The allowance for credit losses at September 30, 2020 reflects our estimate of expected credit losses for the life of the loan receivables on our condensed consolidated statement of financial position at September 30, 2020, which includes the consideration of current and expected macroeconomic conditions that existed at that date.
|
(b)
|
Comparative information is presented in accordance with applicable accounting standards in effect prior to the adoption of ASU 2016-13.
|
At September 30, 2020 ($ in millions)
|
30-89 days delinquent
|
|
|
90 or more days delinquent
|
|
|
Total past due
|
|
|
90 or more days delinquent and accruing
|
|
|
Total non-accruing
|
|
|||||
Credit cards
|
$
|
1,091
|
|
|
$
|
958
|
|
|
$
|
2,049
|
|
|
$
|
958
|
|
|
$
|
—
|
|
Consumer installment loans
|
23
|
|
|
4
|
|
|
27
|
|
|
—
|
|
|
4
|
|
|||||
Commercial credit products
|
13
|
|
|
11
|
|
|
24
|
|
|
11
|
|
|
—
|
|
|||||
Total delinquent loans
|
$
|
1,127
|
|
|
$
|
973
|
|
|
$
|
2,100
|
|
|
$
|
969
|
|
|
$
|
4
|
|
Percentage of total loan receivables
|
1.4
|
%
|
|
1.2
|
%
|
|
2.7
|
%
|
|
1.2
|
%
|
|
—
|
%
|
At December 31, 2019 ($ in millions)
|
30-89 days delinquent
|
|
|
90 or more days delinquent
|
|
|
Total past due
|
|
|
90 or more days delinquent and accruing
|
|
|
Total non-accruing(a)
|
|
|||||
Credit cards
|
$
|
1,936
|
|
|
$
|
1,852
|
|
|
$
|
3,788
|
|
|
$
|
1,850
|
|
|
$
|
—
|
|
Consumer installment loans
|
21
|
|
|
7
|
|
|
28
|
|
|
—
|
|
|
7
|
|
|||||
Commercial credit products
|
40
|
|
|
18
|
|
|
58
|
|
|
18
|
|
|
—
|
|
|||||
Total delinquent loans
|
$
|
1,997
|
|
|
$
|
1,877
|
|
|
$
|
3,874
|
|
|
$
|
1,868
|
|
|
$
|
7
|
|
Percentage of total loan receivables
|
2.3
|
%
|
|
2.2
|
%
|
|
4.4
|
%
|
|
2.1
|
%
|
|
—
|
%
|
(a)
|
Excludes purchase credit deteriorated loan receivables.
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Credit cards
|
$
|
197
|
|
|
$
|
226
|
|
|
$
|
549
|
|
|
$
|
633
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial credit products
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Total
|
$
|
198
|
|
|
$
|
227
|
|
|
$
|
551
|
|
|
$
|
636
|
|
At September 30, 2020 ($ in millions)
|
Total recorded
investment
|
|
|
Related allowance
|
|
|
Net recorded investment
|
|
|
Unpaid principal balance
|
|
||||
Credit cards
|
$
|
1,109
|
|
|
$
|
(522
|
)
|
|
$
|
587
|
|
|
$
|
985
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial credit products
|
3
|
|
|
(2
|
)
|
|
1
|
|
|
3
|
|
||||
Total
|
$
|
1,112
|
|
|
$
|
(524
|
)
|
|
$
|
588
|
|
|
$
|
988
|
|
At December 31, 2019 ($ in millions)
|
Total recorded
investment
|
|
|
Related allowance
|
|
|
Net recorded investment
|
|
|
Unpaid principal balance
|
|
||||
Credit cards
|
$
|
1,146
|
|
|
$
|
(550
|
)
|
|
$
|
596
|
|
|
$
|
1,019
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial credit products
|
4
|
|
|
(2
|
)
|
|
2
|
|
|
4
|
|
||||
Total
|
$
|
1,150
|
|
|
$
|
(552
|
)
|
|
$
|
598
|
|
|
$
|
1,023
|
|
Three months ended September 30,
|
2020
|
|
2019
|
||||||||||||||||||||
($ in millions)
|
Interest income recognized during period when loans were impaired
|
|
|
Interest income that would have been recorded with original terms
|
|
|
Average recorded investment
|
|
|
Interest income recognized during period when loans were impaired
|
|
|
Interest income that would have been recorded with original terms
|
|
|
Average recorded investment
|
|
||||||
Credit cards
|
$
|
11
|
|
|
$
|
67
|
|
|
$
|
1,112
|
|
|
$
|
11
|
|
|
$
|
67
|
|
|
$
|
1,074
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial credit products
|
—
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
1
|
|
|
4
|
|
||||||
Total
|
$
|
11
|
|
|
$
|
68
|
|
|
$
|
1,115
|
|
|
$
|
11
|
|
|
$
|
68
|
|
|
$
|
1,078
|
|
Nine months ended September 30,
|
2020
|
|
2019
|
||||||||||||||||||||
($ in millions)
|
Interest income recognized during period when loans were impaired
|
|
|
Interest income that would have been recorded with original terms
|
|
|
Average recorded investment
|
|
|
Interest income recognized during period when loans were impaired
|
|
|
Interest income that would have been recorded with original terms
|
|
|
Average recorded investment
|
|
||||||
Credit cards
|
$
|
32
|
|
|
$
|
206
|
|
|
$
|
1,130
|
|
|
$
|
33
|
|
|
$
|
197
|
|
|
$
|
1,103
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial credit products
|
—
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
1
|
|
|
4
|
|
||||||
Total
|
$
|
32
|
|
|
$
|
207
|
|
|
$
|
1,133
|
|
|
$
|
33
|
|
|
$
|
198
|
|
|
$
|
1,107
|
|
Three months ended September 30,
|
2020
|
|
2019
|
||||||||||
($ in millions)
|
Accounts defaulted
|
|
|
Loans defaulted
|
|
|
Accounts defaulted
|
|
|
Loans defaulted
|
|
||
Credit cards
|
14,440
|
|
|
$
|
38
|
|
|
15,059
|
|
|
$
|
37
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Commercial credit products
|
278
|
|
|
1
|
|
|
40
|
|
|
—
|
|
||
Total
|
14,718
|
|
|
$
|
39
|
|
|
15,099
|
|
|
$
|
37
|
|
Nine months ended September 30,
|
2020
|
|
2019
|
||||||||||
($ in millions)
|
Accounts defaulted
|
|
|
Loans defaulted
|
|
|
Accounts defaulted
|
|
|
Loans defaulted
|
|
||
Credit cards
|
38,885
|
|
|
$
|
102
|
|
|
36,529
|
|
|
$
|
88
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Commercial credit products
|
319
|
|
|
1
|
|
|
80
|
|
|
1
|
|
||
Total
|
39,204
|
|
|
$
|
103
|
|
|
36,609
|
|
|
$
|
89
|
|
|
September 30, 2020
|
|
December 31, 2019
|
|
September 30, 2019
|
|||||||||||||||||||||
|
661 or
|
|
|
601 to
|
|
|
600 or
|
|
|
661 or
|
|
|
601 to
|
|
|
600 or
|
|
|
661 or
|
|
|
601 to
|
|
|
600 or
|
|
|
higher
|
|
|
660
|
|
|
less
|
|
|
higher
|
|
|
660
|
|
|
less
|
|
|
higher
|
|
|
660
|
|
|
less
|
|
Credit cards
|
77
|
%
|
|
17
|
%
|
|
6
|
%
|
|
74
|
%
|
|
18
|
%
|
|
8
|
%
|
|
75
|
%
|
|
19
|
%
|
|
6
|
%
|
Consumer installment loans
|
79
|
%
|
|
16
|
%
|
|
5
|
%
|
|
76
|
%
|
|
17
|
%
|
|
7
|
%
|
|
80
|
%
|
|
14
|
%
|
|
6
|
%
|
Commercial credit products
|
93
|
%
|
|
4
|
%
|
|
3
|
%
|
|
90
|
%
|
|
5
|
%
|
|
5
|
%
|
|
91
|
%
|
|
5
|
%
|
|
4
|
%
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Credit cards(a)
|
$
|
3,752
|
|
|
$
|
4,807
|
|
|
$
|
11,764
|
|
|
$
|
13,975
|
|
Consumer installment loans
|
46
|
|
|
48
|
|
|
118
|
|
|
134
|
|
||||
Commercial credit products
|
22
|
|
|
35
|
|
|
85
|
|
|
103
|
|
||||
Other
|
1
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Total
|
$
|
3,821
|
|
|
$
|
4,890
|
|
|
$
|
11,969
|
|
|
$
|
14,213
|
|
(a)
|
Interest income on credit cards that was reversed related to accrued interest receivables written off was $330 million and $443 million for the three months ended September 30, 2020 and 2019, respectively, and $1.2 billion and $1.5 billion for the nine months ended September 30, 2020 and 2019, respectively.
|
($ in millions)
|
September 30, 2020
|
|
December 31, 2019
|
||||
Assets
|
|
|
|
||||
Loan receivables, net(a)
|
$
|
23,038
|
|
|
$
|
27,217
|
|
Other assets(b)
|
47
|
|
|
68
|
|
||
Total
|
$
|
23,085
|
|
|
$
|
27,285
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Borrowings
|
$
|
7,809
|
|
|
$
|
10,412
|
|
Other liabilities
|
24
|
|
|
32
|
|
||
Total
|
$
|
7,833
|
|
|
$
|
10,444
|
|
(a)
|
Includes $2.9 billion of related allowance for credit losses resulting in gross restricted loans of $25.9 billion at September 30, 2020 and $1.6 billion of related allowance for loan losses resulting in gross restricted loans of $28.8 billion at December 31, 2019.
|
(b)
|
Includes $42 million and $62 million of segregated funds held by the VIEs at September 30, 2020 and December 31, 2019, respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Condensed Consolidated Statements of Financial Position.
|
|
September 30, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
($ in millions)
|
Gross carrying amount
|
|
|
Accumulated amortization
|
|
|
Net
|
|
|
Gross carrying amount
|
|
|
Accumulated amortization
|
|
|
Net
|
|
||||||
Customer-related
|
$
|
1,735
|
|
|
$
|
(1,049
|
)
|
|
$
|
686
|
|
|
$
|
1,749
|
|
|
$
|
(952
|
)
|
|
$
|
797
|
|
Capitalized software and other
|
931
|
|
|
(526
|
)
|
|
405
|
|
|
861
|
|
|
(393
|
)
|
|
468
|
|
||||||
Total
|
$
|
2,666
|
|
|
$
|
(1,575
|
)
|
|
$
|
1,091
|
|
|
$
|
2,610
|
|
|
$
|
(1,345
|
)
|
|
$
|
1,265
|
|
|
September 30, 2020
|
|
December 31, 2019
|
||||||||||
($ in millions)
|
Amount
|
|
|
Average rate(a)
|
|
|
Amount
|
|
|
Average rate(a)
|
|
||
Interest-bearing deposits
|
$
|
63,195
|
|
|
1.9
|
%
|
|
$
|
64,877
|
|
|
2.4
|
%
|
Non-interest-bearing deposits
|
298
|
|
|
—
|
|
|
277
|
|
|
—
|
|
||
Total deposits
|
$
|
63,493
|
|
|
|
|
$
|
65,154
|
|
|
|
(a)
|
Based on interest expense for the nine months ended September 30, 2020 and the year ended December 31, 2019 and average deposits balances.
|
($ in millions)
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
|
2024
|
|
|
Thereafter
|
|
||||||
Deposits
|
$
|
5,228
|
|
|
$
|
20,255
|
|
|
$
|
4,430
|
|
|
$
|
1,736
|
|
|
$
|
2,315
|
|
|
$
|
782
|
|
|
September 30, 2020
|
|
December 31, 2019
|
||||||||||||
($ in millions)
|
Maturity date
|
|
Interest Rate
|
|
Weighted average interest rate
|
|
Outstanding Amount(a)
|
|
Outstanding Amount(a)
|
||||||
Borrowings of consolidated securitization entities:
|
|
|
|
|
|
|
|
|
|
||||||
Fixed securitized borrowings
|
2021 - 2023
|
|
2.21% - 3.87%
|
|
|
2.88
|
%
|
|
$
|
5,509
|
|
|
$
|
7,512
|
|
Floating securitized borrowings
|
2021 - 2023
|
|
0.78% - 1.06%
|
|
|
0.89
|
%
|
|
2,300
|
|
|
2,900
|
|
||
Total borrowings of consolidated securitization entities
|
|
|
|
|
2.30
|
%
|
|
7,809
|
|
|
10,412
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Senior unsecured notes:
|
|
|
|
|
|
|
|
|
|
||||||
Synchrony Financial senior unsecured notes:
|
|
|
|
|
|
|
|
|
|
||||||
Fixed senior unsecured notes
|
2021 - 2029
|
|
2.80% - 5.15%
|
|
|
4.08
|
%
|
|
6,466
|
|
|
7,211
|
|
||
Floating senior unsecured notes
|
N/A
|
|
—
|
%
|
|
—
|
%
|
|
—
|
|
|
250
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
Synchrony Bank senior unsecured notes:
|
|
|
|
|
|
|
|
|
|
||||||
Fixed senior unsecured notes
|
2021 - 2022
|
|
3.00% - 3.65%
|
|
|
3.33
|
%
|
|
1,496
|
|
|
1,493
|
|
||
Floating senior unsecured notes
|
N/A
|
|
—
|
%
|
|
—
|
%
|
|
—
|
|
|
500
|
|
||
Total senior unsecured notes
|
|
|
|
|
3.94
|
%
|
|
7,962
|
|
|
9,454
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Total borrowings
|
|
|
|
|
|
|
$
|
15,771
|
|
|
$
|
19,866
|
|
(a)
|
The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance cost.
|
($ in millions)
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
|
2024
|
|
|
Thereafter
|
|
||||||
Borrowings
|
$
|
—
|
|
|
$
|
4,825
|
|
|
$
|
4,784
|
|
|
$
|
1,207
|
|
|
$
|
1,850
|
|
|
$
|
3,150
|
|
At September 30, 2020 ($ in millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total(a)
|
|
||||
Assets
|
|
|
|
|
|
|
|
||||||||
Debt securities
|
|
|
|
|
|
|
|
||||||||
U.S. government and federal agency
|
$
|
—
|
|
|
$
|
5,199
|
|
|
$
|
—
|
|
|
$
|
5,199
|
|
State and municipal
|
—
|
|
|
—
|
|
|
39
|
|
|
39
|
|
||||
Residential mortgage-backed
|
—
|
|
|
830
|
|
|
—
|
|
|
830
|
|
||||
Asset-backed
|
—
|
|
|
2,364
|
|
|
—
|
|
|
2,364
|
|
||||
Other assets(b)
|
15
|
|
|
—
|
|
|
19
|
|
|
34
|
|
||||
Total
|
$
|
15
|
|
|
$
|
8,393
|
|
|
$
|
58
|
|
|
$
|
8,466
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
||||||||
At December 31, 2019 ($ in millions)
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Debt securities
|
|
|
|
|
|
|
|
||||||||
U.S. government and federal agency
|
$
|
—
|
|
|
$
|
2,469
|
|
|
$
|
—
|
|
|
$
|
2,469
|
|
State and municipal
|
—
|
|
|
—
|
|
|
45
|
|
|
45
|
|
||||
Residential mortgage-backed
|
—
|
|
|
1,026
|
|
|
—
|
|
|
1,026
|
|
||||
Asset-backed
|
—
|
|
|
2,371
|
|
|
—
|
|
|
2,371
|
|
||||
Other assets(b)
|
15
|
|
|
—
|
|
|
21
|
|
|
36
|
|
||||
Total
|
$
|
15
|
|
|
$
|
5,866
|
|
|
$
|
66
|
|
|
$
|
5,947
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
13
|
|
(a)
|
For the nine months ended September 30, 2020 and 2019, there were no fair value measurements transferred between levels.
|
(b)
|
Other assets primarily relate to equity investments measured at fair value.
|
|
Carrying
|
|
|
Corresponding fair value amount
|
|||||||||||||||
At September 30, 2020 ($ in millions)
|
value
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial assets for which carrying values equal or approximate fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and equivalents(a)
|
$
|
13,552
|
|
|
$
|
13,552
|
|
|
$
|
11,752
|
|
|
$
|
1,800
|
|
|
$
|
—
|
|
Other assets(a)(b)
|
$
|
74
|
|
|
$
|
74
|
|
|
$
|
74
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financial assets carried at other than fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loan receivables, net(c)
|
$
|
68,375
|
|
|
$
|
81,504
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81,504
|
|
Loan receivables held for sale(c)
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial liabilities carried at other than fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
63,493
|
|
|
$
|
64,156
|
|
|
$
|
—
|
|
|
$
|
64,156
|
|
|
$
|
—
|
|
Borrowings of consolidated securitization entities
|
$
|
7,809
|
|
|
$
|
7,990
|
|
|
$
|
—
|
|
|
$
|
5,692
|
|
|
$
|
2,298
|
|
Senior unsecured notes
|
$
|
7,962
|
|
|
$
|
8,554
|
|
|
$
|
—
|
|
|
$
|
8,554
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Carrying
|
|
|
Corresponding fair value amount
|
|||||||||||||||
At December 31, 2019 ($ in millions)
|
value
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial assets for which carrying values equal or approximate fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and equivalents(a)
|
$
|
12,147
|
|
|
$
|
12,147
|
|
|
$
|
10,799
|
|
|
$
|
1,348
|
|
|
$
|
—
|
|
Other assets(a)(b)
|
$
|
500
|
|
|
$
|
500
|
|
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financial assets carried at other than fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loan receivables, net(c)
|
$
|
81,613
|
|
|
$
|
90,941
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
90,941
|
|
Loan receivables held for sale(c)
|
$
|
725
|
|
|
$
|
726
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
726
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial liabilities carried at other than fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
65,154
|
|
|
$
|
65,544
|
|
|
$
|
—
|
|
|
$
|
65,544
|
|
|
$
|
—
|
|
Borrowings of consolidated securitization entities
|
$
|
10,412
|
|
|
$
|
10,513
|
|
|
$
|
—
|
|
|
$
|
7,613
|
|
|
$
|
2,900
|
|
Senior unsecured notes
|
$
|
9,454
|
|
|
$
|
9,924
|
|
|
$
|
—
|
|
|
$
|
9,924
|
|
|
$
|
—
|
|
(a)
|
For cash and equivalents and restricted cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less or acquired within three months or less of their maturity.
|
(b)
|
This balance relates to restricted cash and equivalents, which is included in other assets.
|
(c)
|
Under certain retail partner program agreements, the expected sales proceeds related to the sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above.
|
At September 30, 2020 ($ in millions)
|
Actual
|
|
Minimum for capital
adequacy purposes
|
||||||||||
|
Amount
|
|
Ratio(a)
|
|
|
Amount
|
|
|
Ratio(b)
|
|
|||
Total risk-based capital
|
$
|
13,925
|
|
|
18.1
|
%
|
|
$
|
6,159
|
|
|
8.0
|
%
|
Tier 1 risk-based capital
|
$
|
12,891
|
|
|
16.7
|
%
|
|
$
|
4,619
|
|
|
6.0
|
%
|
Tier 1 leverage
|
$
|
12,891
|
|
|
13.3
|
%
|
|
$
|
3,884
|
|
|
4.0
|
%
|
Common equity Tier 1 Capital
|
$
|
12,157
|
|
|
15.8
|
%
|
|
$
|
3,465
|
|
|
4.5
|
%
|
At December 31, 2019 ($ in millions)
|
Actual
|
|
Minimum for capital
adequacy purposes
|
||||||||||
|
Amount
|
|
Ratio(a)
|
|
|
Amount
|
|
|
Ratio(b)
|
|
|||
Total risk-based capital
|
$
|
14,211
|
|
|
16.3
|
%
|
|
$
|
6,984
|
|
|
8.0
|
%
|
Tier 1 risk-based capital
|
$
|
13,064
|
|
|
15.0
|
%
|
|
$
|
5,238
|
|
|
6.0
|
%
|
Tier 1 leverage
|
$
|
13,064
|
|
|
12.6
|
%
|
|
$
|
4,161
|
|
|
4.0
|
%
|
Common equity Tier 1 Capital
|
$
|
12,330
|
|
|
14.1
|
%
|
|
$
|
3,929
|
|
|
4.5
|
%
|
At September 30, 2020 ($ in millions)
|
Actual
|
|
Minimum for capital
adequacy purposes
|
|
Minimum to be well-capitalized under prompt corrective action provisions
|
|||||||||||||||
|
Amount
|
|
Ratio(a)
|
|
Amount
|
|
|
Ratio(b)
|
|
|
Amount
|
|
|
Ratio
|
|
|||||
Total risk-based capital
|
$
|
12,260
|
|
|
17.9
|
%
|
|
$
|
5,470
|
|
|
8.0
|
%
|
|
$
|
6,837
|
|
|
10.0
|
%
|
Tier 1 risk-based capital
|
$
|
11,340
|
|
|
16.6
|
%
|
|
$
|
4,102
|
|
|
6.0
|
%
|
|
$
|
5,470
|
|
|
8.0
|
%
|
Tier 1 leverage
|
$
|
11,340
|
|
|
13.0
|
%
|
|
$
|
3,479
|
|
|
4.0
|
%
|
|
$
|
4,349
|
|
|
5.0
|
%
|
Common equity Tier I capital
|
$
|
11,340
|
|
|
16.6
|
%
|
|
$
|
3,077
|
|
|
4.5
|
%
|
|
$
|
4,444
|
|
|
6.5
|
%
|
At December 31, 2019 ($ in millions)
|
Actual
|
|
Minimum for capital
adequacy purposes
|
|
Minimum to be well-capitalized under prompt corrective action provisions
|
|||||||||||||||
|
Amount
|
|
Ratio(a)
|
|
Amount
|
|
Ratio(b)
|
|
Amount
|
|
Ratio
|
|||||||||
Total risk-based capital
|
$
|
11,911
|
|
|
15.6
|
%
|
|
$
|
6,094
|
|
|
8.0
|
%
|
|
$
|
7,618
|
|
|
10.0
|
%
|
Tier 1 risk-based capital
|
$
|
10,907
|
|
|
14.3
|
%
|
|
$
|
4,571
|
|
|
6.0
|
%
|
|
$
|
6,094
|
|
|
8.0
|
%
|
Tier 1 leverage
|
$
|
10,907
|
|
|
11.9
|
%
|
|
$
|
3,671
|
|
|
4.0
|
%
|
|
$
|
4,589
|
|
|
5.0
|
%
|
Common equity Tier I capital
|
$
|
10,907
|
|
|
14.3
|
%
|
|
$
|
3,428
|
|
|
4.5
|
%
|
|
$
|
4,952
|
|
|
6.5
|
%
|
(a)
|
Capital ratios are calculated based on the Basel III Standardized Approach rules. Capital amounts and ratios at September 30, 2020 in the above tables reflect the application of the CECL regulatory capital transition adjustment.
|
(b)
|
At September 30, 2020 and at December 31, 2019, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 2.5 percentage points to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees.
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(in millions, except per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net earnings
|
$
|
313
|
|
|
$
|
1,056
|
|
|
$
|
647
|
|
|
$
|
3,016
|
|
Preferred stock dividends
|
(10
|
)
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
||||
Net earnings available to common stockholders
|
$
|
303
|
|
|
$
|
1,056
|
|
|
$
|
615
|
|
|
$
|
3,016
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, basic
|
583.8
|
|
|
658.3
|
|
|
590.8
|
|
|
682.5
|
|
||||
Effect of dilutive securities
|
1.0
|
|
|
3.4
|
|
|
1.4
|
|
|
3.1
|
|
||||
Weighted average common shares outstanding, dilutive
|
584.8
|
|
|
661.7
|
|
|
592.2
|
|
|
685.6
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Earnings per basic common share
|
$
|
0.52
|
|
|
$
|
1.60
|
|
|
$
|
1.04
|
|
|
$
|
4.42
|
|
Earnings per diluted common share
|
$
|
0.52
|
|
|
$
|
1.60
|
|
|
$
|
1.04
|
|
|
$
|
4.40
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||
($ in millions)
|
2020
|
|
2020
|
||||
Operating lease and other asset impairments
|
$
|
45
|
|
|
$
|
45
|
|
Employee-related costs
|
44
|
|
|
44
|
|
||
Total restructuring costs
|
$
|
89
|
|
|
$
|
89
|
|
($ in millions)
|
September 30, 2020
|
|
December 31, 2019
|
||||
Unrecognized tax benefits, excluding related interest expense and penalties(a)
|
$
|
278
|
|
|
$
|
255
|
|
Portion that, if recognized, would reduce tax expense and effective tax rate(b)
|
$
|
201
|
|
|
$
|
172
|
|
(a)
|
Interest and penalties related to unrecognized tax benefits were not material for all periods presented.
|
(b)
|
Comprised of federal unrecognized tax benefits and state and local unrecognized tax benefits net of the effects of associated U.S. federal income taxes. Excludes amounts attributable to any related valuation allowances resulting from associated increases in deferred tax assets.
|
Basis Point Change
|
|
At September 30, 2020
|
||
($ in millions)
|
|
|
||
-100 basis points
|
|
$
|
(76
|
)
|
+100 basis points
|
|
$
|
113
|
|
•
|
a continued decline in purchase volume, which ultimately impacts the growth of our loan receivables;
|
•
|
a decline in the growth of our interest income, due to reductions in benchmark interest rates and an expectation that we will provide, for a temporary period of time, forbearance in terms of interest and fee waivers for our cardholders impacted by COVID-19; and
|
•
|
increases in our delinquencies and net charge-off rate and our allowance for credit losses, given the levels of filings for unemployment benefits in the U.S.
|
•
|
continued store closures by partners or if one or more partners becomes subject to a bankruptcy proceeding;
|
•
|
third-party disruptions, including potential outages at third-party operated call centers and other suppliers;
|
•
|
increased cyber and payment fraud risk related to COVID-19, as cybercriminals attempt to profit from the disruption, given increased online banking, e-commerce and other online activity;
|
•
|
challenges to the availability and reliability of our network due to changes to normal operations, including the possibility of one or more clusters of COVID-19 cases affecting our employees or affecting the systems or employees of our partners; and
|
•
|
an increased volume of unanticipated customer and regulatory requests for information and support, or additional regulatory requirements, which could require additional resources and costs to address, including, for example, government initiatives to reduce or eliminate payments costs.
|
($ in millions, except per share data)
|
Total Number of Shares Purchased(a)
|
|
|
Average Price Paid Per Share(b)
|
|
|
Total Number of Shares Purchased as Part of Publicly Announced Programs(c)
|
|
|
Maximum Dollar Value of Shares That May Yet Be Purchased Under the Programs(b)
|
|
||
July 1 - 31, 2020
|
15,697
|
|
|
$
|
21.61
|
|
|
—
|
|
|
$
|
—
|
|
August 1 - 31, 2020
|
2,098
|
|
|
23.70
|
|
|
—
|
|
|
—
|
|
||
September 1 - 30, 2020
|
268
|
|
|
26.95
|
|
|
—
|
|
|
—
|
|
||
Total
|
18,063
|
|
|
$
|
21.93
|
|
|
—
|
|
|
$
|
—
|
|
(a)
|
Includes 15,697 shares, 2,098 shares and 268 shares withheld in July, August and September, respectively, to offset tax withholding obligations that occur upon the delivery of outstanding shares underlying performance stock awards, restricted stock awards or upon the exercise of stock options.
|
(b)
|
Amounts exclude commission costs.
|
(c)
|
In response to COVID-19, we have suspended our share repurchase activities until we have greater visibility as to the current economic environment.
|
Exhibit Number
|
Description
|
101.INS
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
104
|
The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in Inline XBRL (included as Exhibit 101)
|
*
|
Filed electronically herewith.
|
October 22, 2020
|
|
/s/ Brian J. Wenzel Sr.
|
Date
|
|
Brian J. Wenzel Sr.
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
|
1.
|
The first sentence of Section 1(j) (definition of “Executive”) of the Plan is hereby amended in its entirety to read as follows:
|
2.
|
Section 1(k) (definition of “Executive Vice President”) of the Plan is hereby amended in its entirety to read as follows:
|
3.
|
Section 1(p) (definition of “Severance Period”) of the Plan is hereby amended in its entirety to read as follows:
|
4.
|
Section 1 (“Definitions”) of the Plan is hereby amended to add the following two new definitions in alphabetical order and to assign the appropriate subsection numbers thereto, and to renumber the remaining subsections of Section 1 and all cross-references accordingly:
|
5.
|
Section 2(a)(ii) of the Plan is hereby amended in its entirety to read as follows:
|
6.
|
The first sentence of Section 2(b) of the Plan is hereby amended in its entirety to read as follows:
|
1.
|
Section 1(q) (definition of “Severance Base Salary Amount”) of the Plan is hereby amended in its entirety to read as follows:
|
2.
|
Section 1(r) (definition of “Severance Period”) of the Plan is hereby amended in its entirety to read as follows:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Synchrony Financial;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Margaret M. Keane
|
Margaret M. Keane
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Synchrony Financial;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Brian J. Wenzel Sr.
|
Brian J. Wenzel Sr.
Chief Financial Officer
|
1.
|
The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
|
/s/ Margaret M. Keane
|
Margaret M. Keane
Chief Executive Officer
|
/s/ Brian J. Wenzel Sr.
|
Brian J. Wenzel Sr.
Chief Financial Officer
|