Form 8-K Synchrony Financial For: Jul 22

July 22, 2016 6:31 AM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

July 22, 2016

Date of Report

(Date of earliest event reported)

SYNCHRONY FINANCIAL

(Exact name of registrant as specified in its charter)



Delaware	001-36560	51-0483352
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)



777 Long Ridge Road, Stamford, Connecticut		06902
(Address of principal executive offices)		(Zip Code)

(203) 585-2400

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On July 22, 2016, Synchrony Financial (the “Company”) issued a press release setting forth the Company’s second quarter 2016 earnings. A copy of the Company’s press release is being furnished as Exhibit 99.1 and hereby incorporated by reference. The information furnished pursuant to this Item 2.02, including Exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are being furnished as part of this report:




Number		Description

99.1		Press release, dated July 22, 2016, issued by Synchrony Financial
99.2		Financial Data Supplement of the Company for the quarter ended June 30, 2016
99.3		Financial Results Presentation of the Company for the quarter ended June 30, 2016
99.4		Explanation of Non-GAAP Measures

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




	SYNCHRONY FINANCIAL

Date: July 22, 2016	By:	/s/ Jonathan Mothner
	Name:	Jonathan Mothner
	Title:	Executive Vice President, General Counsel and Secretary

EXHIBIT INDEX




Number		Description

99.1		Press release, dated July 22, 2016, issued by Synchrony Financial
99.2		Financial Data Supplement of the Company for the quarter ended June 30, 2016
99.3		Financial Results Presentation of the Company for the quarter ended June 30, 2016
99.4		Explanation of Non-GAAP Measures

Exhibit 99.1

Contacts:

Investor Relations Media Relations

Greg Ketron Samuel Wang

(203) 585-6291 (203) 585-2933

For Immediate Release: July 22, 2016

Synchrony Financial Reports Second Quarter Net Earnings of $489 Million or $0.58 Per Diluted Share

STAMFORD, Conn. – Synchrony Financial (NYSE: SYF) today announced second quarter 2016 net earnings of $489 million, or $0.58 per diluted share. Highlights for the quarter included:


•	Net interest income increased 10% from the second quarter of 2015 to $3.2 billion


•	Loan receivables grew $7 billion, or 11%, from the second quarter of 2015 to $68 billion


•	Purchase volume increased 9% from the second quarter of 2015


•	Strong deposit growth continued, up $9 billion, or 23%, over the second quarter of 2015


•	Renewed key relationships – Ashley Homestore, Suzuki, VCA Animal Hospitals, and American Society of Plastic Surgeons


•	Signed new partnerships with Cathay Pacific and Fareportal


•	Launched Mattress Firm and Marvel card programs


•	Announced quarterly common stock dividend of $0.13 per share and share repurchase program of up to $952 million for the four quarters ending June 30, 2017

“We delivered another quarter of strong operational and financial performance with solid growth generated in each of our sales platforms. We signed several new partners and renewed key programs and increased deposits by $9 billion over last year to support our growing business,” said Margaret Keane, President and Chief Executive Officer of Synchrony Financial. “Furthermore, we are pleased to commence payment of dividends to our shareholders and opportunistically repurchase our stock. These actions not only reflect the strength of our capital position and financial performance, but also the power of our business model and our confidence in future opportunities.”

Business and Financial Highlights for the Second Quarter of 2016

All comparisons below are for the second quarter of 2016 compared to the second quarter of 2015, unless otherwise noted.

Earnings


•	Net interest income increased $305 million, or 10%, to $3.2 billion, primarily driven by strong loan receivables growth. Net interest income after retailer share arrangements increased 11%.


•	Provision for loan losses increased $281 million to $1,021 million due to higher loan loss reserve build and loan receivables growth in the second quarter of 2016.


•	Other income decreased $37 million to $83 million, driven by a $20 million gain on portfolio sales in the second quarter of 2015, and an increase in loyalty programs, partially offset by higher interchange income.


•	Other expense increased $34 million to $839 million, primarily driven by business growth.


•	Net earnings totaled $489 million compared to $541 million in the second quarter of 2015.

Balance Sheet


•	Period-end loan receivables growth remained strong at 11%, primarily driven by purchase volume growth of 9% and average active account growth of 8%.


•	Deposits grew to $46 billion, up $9 billion, or 23%, and comprised 71% of funding compared to 61% last year.


•	Fully paid off Bank Term Loan on April 5, 2016.


•	The Company’s balance sheet remained strong with total liquidity (liquid assets and undrawn securitization capacity) of $21 billion, or 25% of total assets.


•	The estimated Common Equity Tier 1 ratio under Basel III subject to transition provisions was 18.5% and the estimated fully phased-in Common Equity Tier 1 ratio under Basel III was 18.0%.

Key Financial Metrics


•	Return on assets was 2.4% and return on equity was 14.6%.


•	Net interest margin increased 9 basis points to 15.86%.


•	Efficiency ratio was 31.9%, a 157 basis point improvement from the second quarter of 2015, driven by positive operating leverage arising from strong revenue growth that exceeded expense growth.

Credit Quality


•	Loans 30+ days past due as a percentage of total period-end loan receivables were 3.79% compared to 3.53% last year.


•	Net charge-offs as a percentage of total average loan receivables were 4.49% compared to 4.63% last year.


•	The allowance for loan losses as a percentage of total period-end loan receivables was 5.70% compared to 5.38% last year.

Sales Platforms


•	Retail Card interest and fees on loans increased 11%, driven primarily by purchase volume growth of 8% and period-end loan receivables growth of 10%. Average active account growth was 7%. Loan receivables growth was broad-based across partner programs.


•	Payment Solutions interest and fees on loans increased 13%, driven primarily by purchase volume growth of 16% and period-end loan receivables growth of 15%. Average active account growth was 13%. Loan receivables growth was led by the home furnishings and automotive product categories.


•	CareCredit interest and fees on loans increased 5%, driven primarily by purchase volume growth of 10% and period-end loan receivables growth of 10%. Average active account growth was 7%. Loan receivables growth was led by the dental and veterinary specialties.

Corresponding Financial Tables and Information

No representation is made that the information in this news release is complete. Investors are encouraged to review the foregoing summary and discussion of Synchrony Financial's earnings and financial condition in conjunction with the detailed financial tables and information that follow and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed February 25, 2016, the Company’s forthcoming Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 and the Form 8-K furnished by the Company on June 14, 2016. The detailed financial tables and other information are also available on the Investor Relations page of the Company’s website at www.investors.synchronyfinancial.com. This information is also furnished in a Current Report on Form 8-K filed with the SEC today.

Conference Call and Webcast Information

On Friday, July 22, 2016, at 8:30 a.m. Eastern Time, Margaret Keane, President and Chief Executive Officer, and Brian Doubles, Executive Vice President and Chief Financial Officer, will host a conference call to review the financial results and outlook for certain business drivers. The conference call can be accessed via an audio webcast through the Investor Relations page on Synchrony Financial’s corporate website, www.investors.synchronyfinancial.com, under Events and Presentations. A replay will be available on the website or by dialing (888) 843-7419 (U.S. domestic) or (630) 652-3042 (international), passcode 22016#, and can be accessed beginning approximately two hours after the event through August 5, 2016.

About Synchrony Financial

Synchrony Financial (NYSE: SYF) is one of the nation’s premier consumer financial services companies. Our roots in consumer finance trace back to 1932, and today we are the largest provider of private label

credit cards in the United States based on purchase volume and receivables.* We provide a range of credit products through programs we have established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers to help generate growth for our partners and offer financial flexibility to our customers. Through our partners’ over 350,000 locations across the United States and Canada, and their websites and mobile applications, we offer our customers a variety of credit products to finance the purchase of goods and services. Synchrony Financial (formerly GE Capital Retail Finance) offers private label and co-branded Dual Card™ credit cards, promotional financing and installment lending, loyalty programs and FDIC-insured savings products through Synchrony Bank. More information can be found at www.synchronyfinancial.com, facebook.com/SynchronyFinancial,www.linkedin.com/company/synchrony-financial and twitter.com/SYFNews.

^*Source: The Nilson Report (May 2016, Issue # 1087) - based on 2015 data.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains certain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. Forward-looking statements may be identified by words such as “outlook,” “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “targets,” “estimates,” “will,” “should,” “may” or words of similar meaning, but these words are not the exclusive means of identifying forward-looking statements. Forward-looking statements are based on management’s current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include global political, economic, business, competitive, market, regulatory and other factors and risks, such as: the impact of macroeconomic conditions and whether industry trends we have identified develop as anticipated; retaining existing partners and attracting new partners, concentration of our revenue in a small number of Retail Card partners, promotion and support of our products by our partners, and financial performance of our partners; higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to securitize our loans, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loans, and lower payment rates on our securitized loans; our ability to grow our deposits in the future; changes in market interest rates and the impact of any margin compression; effectiveness of our risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, our ability to manage our credit risk, the sufficiency of our allowance for loan losses and the accuracy of the assumptions or estimates used in preparing our financial statements; our ability to offset increases in our costs in retailer share arrangements; competition in the consumer finance industry; our concentration in the U.S. consumer credit market; our ability to successfully develop and commercialize new or enhanced products and services; our ability to realize the value of strategic investments; reductions in interchange fees; fraudulent activity; cyber-attacks or other security breaches; failure of third parties to provide various services that are important to our operations; our transition to a replacement third-party vendor to manage the technology platform for our online retail deposits; disruptions in the operations of our computer systems and data centers; international risks and compliance and regulatory risks and costs associated with international operations; alleged infringement of intellectual property rights of others and our ability to protect our intellectual property; litigation and regulatory actions; damage to our reputation; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax

positions and state sales tax rules and regulations; a material indemnification obligation to GE under the tax sharing and separation agreement with GE if we cause the split-off from GE or certain preliminary transactions to fail to qualify for tax-free treatment or in the case of certain significant transfers of our stock following the split-off; obligations associated with being an independent public company; regulation, supervision, examination and enforcement of our business by governmental authorities, the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the impact of the Consumer Financial Protection Bureau’s regulation of our business; changes to our methods of offering our CareCredit products; impact of capital adequacy rules and liquidity requirements; restrictions that limit our ability to pay dividends and repurchase our common stock, and restrictions that limit Synchrony Bank’s ability to pay dividends to us; regulations relating to privacy, information security and data protection; use of third-party vendors and ongoing third-party business relationships; and failure to comply with anti-money laundering and anti-terrorism financing laws.

For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this news release and in our public filings, including under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed on February 25, 2016. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

Non-GAAP Measures

The information provided herein includes measures we refer to as “tangible common equity” and certain capital ratios, which are not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please see the detailed financial tables and information that follow. For a statement regarding the usefulness of these measures to investors, please see the Company’s Current Report on Form 8-K filed with the SEC today.

Exhibit 99.2



SYNCHRONY FINANCIAL
FINANCIAL SUMMARY
(unaudited, in millions, except per share statistics)
	Quarter Ended																				Six Months Ended
	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			2Q'16 vs. 2Q'15					Jun 30, 2016			Jun 30, 2015			YTD'16 vs. YTD'15
EARNINGS
Net interest income	$	3,212		$	3,209		$	3,208		$	3,103		$	2,907		$	305		10.5	%	$	6,421		$	5,782		$	639		11.1	%
Retailer share arrangements	(664		)	(670		)	(734		)	(723		)	(621		)	(43		)	6.9	%	(1,334		)	(1,281		)	(53		)	4.1	%
Net interest income, after retailer share arrangements	2,548			2,539			2,474			2,380			2,286			262			11.5	%	5,087			4,501			586			13.0	%
Provision for loan losses	1,021			903			823			702			740			281			38.0	%	1,924			1,427			497			34.8	%
Net interest income, after retailer share arrangements and provision for loan losses	1,527			1,636			1,651			1,678			1,546			(19		)	(1.2	)%	3,163			3,074			89			2.9	%
Other income	83			92			87			84			120			(37		)	(30.8	)%	175			221			(46		)	(20.8	)%
Other expense	839			800			870			843			805			34			4.2	%	1,639			1,551			88			5.7	%
Earnings before provision for income taxes	771			928			868			919			861			(90		)	(10.5	)%	1,699			1,744			(45		)	(2.6	)%
Provision for income taxes	282			346			321			345			320			(38		)	(11.9	)%	628			651			(23		)	(3.5	)%
Net earnings	$	489		$	582		$	547		$	574		$	541		$	(52	)	(9.6	)%	$	1,071		$	1,093		$	(22	)	(2.0	)%
Net earnings attributable to common stockholders	$	489		$	582		$	547		$	574		$	541		$	(52	)	(9.6	)%	$	1,071		$	1,093		$	(22	)	(2.0	)%

COMMON SHARE STATISTICS
Basic EPS	$	0.59		$	0.70		$	0.66		$	0.69		$	0.65		$	(0.06	)	(9.2	)%	$	1.28		$	1.31		$	(0.03	)	(2.3	)%
Diluted EPS	$	0.58		$	0.70		$	0.65		$	0.69		$	0.65		$	(0.07	)	(10.8	)%	$	1.28		$	1.31		$	(0.03	)	(2.3	)%
Common stock price	$	25.28		$	28.66		$	30.41		$	31.30		$	32.93		$	(7.65	)	(23.2	)%	$	25.28		$	32.93		$	(7.65	)	(23.2	)%
Book value per share	$	16.45		$	15.84		$	15.12		$	14.58		$	13.89		$	2.56		18.4	%	$	16.45		$	13.89		$	2.56		18.4	%
Tangible common equity per share⁽¹⁾	$	14.46		$	13.86		$	13.14		$	12.67		$	12.06		$	2.40		19.9	%	$	14.46		$	12.06		$	2.40		19.9	%

Beginning common shares outstanding	833.8			833.8			833.8			833.8			833.8			—			—	%	833.8			833.8			—			—	%
Issuance of common shares	—			—			—			—			—			—			—	%	—			—			—			—	%
Stock-based compensation	0.1			—			—			—			—			0.1			NM		0.1			—			0.1			NM
Shares repurchased	—			—			—			—			—			—			—	%	—			—			—			—	%
Ending common shares outstanding	833.9			833.8			833.8			833.8			833.8			0.1			—	%	833.9			833.8			0.1			—	%

Weighted average common shares outstanding	833.9			833.8			833.8			833.8			833.8			0.1			—	%	833.9			833.8			0.1			—	%
Weighted average common shares outstanding (fully diluted)	836.2			835.5			835.8			835.8			835.4			0.8			0.1	%	835.8			835.2			0.6			0.1	%

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



SYNCHRONY FINANCIAL
SELECTED METRICS⁽¹⁾
(unaudited, $ in millions, except account data)
	Quarter Ended																				Six Months Ended
	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			2Q'16 vs. 2Q'15					Jun 30, 2016			Jun 30, 2015			YTD'16 vs. YTD'15
PERFORMANCE METRICS
Return on assets⁽²⁾	2.4		%	2.8		%	2.7		%	2.9		%	2.9		%				(0.5	)%	2.6		%	3.0		%				(0.4	)%
Return on equity⁽³⁾	14.6		%	18.1		%	17.5		%	19.2		%	19.2		%				(4.6	)%	16.3		%	20.0		%				(3.7	)%
Return on tangible common equity⁽⁴⁾	16.6		%	20.8		%	20.1		%	22.0		%	22.2		%				(5.6	)%	18.7		%	23.1		%				(4.4	)%
Net interest margin⁽⁵⁾	15.86		%	15.76		%	15.73		%	15.97		%	15.77		%				0.09	%	15.80		%	15.75		%				0.05	%
Efficiency ratio⁽⁶⁾	31.9		%	30.4		%	34.0		%	34.2		%	33.5		%				(1.6	)%	31.1		%	32.8		%				(1.7	)%
Other expense as a % of average loan receivables, including held for sale	5.04		%	4.82		%	5.28		%	5.35		%	5.37		%				(0.33	)%	4.92		%	5.20		%				(0.28	)%
Effective income tax rate	36.6		%	37.3		%	37.0		%	37.5		%	37.2		%				(0.6	)%	37.0		%	37.3		%				(0.3	)%

CREDIT QUALITY METRICS
Net charge-offs as a % of average loan receivables, including held for sale	4.49		%	4.70		%	4.23		%	4.02		%	4.63		%				(0.14	)%	4.59		%	4.56		%				0.03	%
30+ days past due as a % of period-end loan receivables⁽⁷⁾	3.79		%	3.85		%	4.06		%	4.02		%	3.53		%				0.26	%	3.79		%	3.53		%				0.26	%
90+ days past due as a % of period-end loan receivables⁽⁷⁾	1.67		%	1.84		%	1.86		%	1.73		%	1.52		%				0.15	%	1.67		%	1.52		%				0.15	%
Net charge-offs	$	747		$	780		$	697		$	633		$	693		$	54		7.8	%	$	1,527		$	1,361		$	166		12.2	%
Loan receivables delinquent over 30 days⁽⁷⁾	$	2,585		$	2,538		$	2,772		$	2,553		$	2,171		$	414		19.1	%	$	2,585		$	2,171		$	414		19.1	%
Loan receivables delinquent over 90 days⁽⁷⁾	$	1,143		$	1,212		$	1,273		$	1,102		$	933		$	210		22.5	%	$	1,143		$	933		$	210		22.5	%

Allowance for loan losses (period-end)	$	3,894		$	3,620		$	3,497		$	3,371		$	3,302		$	592		17.9	%	$	3,894		$	3,302		$	592		17.9	%
Allowance coverage ratio⁽⁸⁾	5.70		%	5.50		%	5.12		%	5.31		%	5.38		%				0.32	%	5.70		%	5.38		%				0.32	%

BUSINESS METRICS
Purchase volume⁽⁹⁾	$	31,507		$	26,977		$	32,460		$	29,206		$	28,810		$	2,697		9.4	%	$	58,484		$	51,949		$	6,535		12.6	%
Period-end loan receivables	$	68,282		$	65,849		$	68,290		$	63,520		$	61,431		$	6,851		11.2	%	$	68,282		$	61,431		$	6,851		11.2	%
Credit cards	$	65,511		$	63,309		$	65,773		$	60,920		$	58,827		$	6,684		11.4	%	$	65,511		$	58,827		$	6,684		11.4	%
Consumer installment loans	$	1,293		$	1,184		$	1,154		$	1,171		$	1,138		$	155		13.6	%	$	1,293		$	1,138		$	155		13.6	%
Commercial credit products	$	1,389		$	1,318		$	1,323		$	1,380		$	1,410		$	(21	)	(1.5	)%	$	1,389		$	1,410		$	(21	)	(1.5	)%
Other	$	89		$	38		$	40		$	49		$	56		$	33		58.9	%	$	89		$	56		$	33		58.9	%
Average loan receivables, including held for sale	$	66,943		$	66,705		$	65,406		$	62,504		$	60,094		$	6,849		11.4	%	$	66,963		$	60,124		$	6,839		11.4	%
Period-end active accounts (in thousands)⁽¹⁰⁾	66,491			64,689			68,314			62,831			61,718			4,773			7.7	%	66,491			61,718			4,773			7.7	%
Average active accounts (in thousands)⁽¹⁰⁾	65,531			66,134			64,892			62,247			60,923			4,608			7.6	%	65,996			61,478			4,518			7.3	%

LIQUIDITY
Liquid assets
Cash and equivalents	$	11,787		$	12,500		$	12,325		$	12,271		$	10,621		$	1,166		11.0	%	$	11,787		$	10,621		$	1,166		11.0	%
Total liquid assets	$	13,956		$	14,915		$	14,836		$	15,305		$	13,660		$	296		2.2	%	$	13,956		$	13,660		$	296		2.2	%
Undrawn credit facilities
Undrawn committed securitization financings	$	7,025		$	7,325		$	6,075		$	6,550		$	6,125		$	900		14.7	%	$	7,025		$	6,125		$	900		14.7	%
Total liquid assets and undrawn credit facilities	$	20,981		$	22,240		$	20,911		$	21,855		$	19,785		$	1,196		6.0	%	$	20,981		$	19,785		$	1,196		6.0	%
Liquid assets % of total assets	16.94		%	18.27		%	17.66		%	19.30		%	18.07		%				(1.13	)%	16.94		%	18.07		%				(1.13	)%
Liquid assets including undrawn committed securitization financings % of total assets	25.47		%	27.24		%	24.90		%	27.56		%	26.17		%				(0.70	)%	25.47		%	26.17		%				(0.70	)%

(1) Certain balance sheet amounts and related metrics have been updated to reflect the adoption of ASU 2015-03. More detail on this update is in footnote (1) on the Statements of Financial Position.
(2) Return on assets represents net earnings as a percentage of average total assets.
(3) Return on equity represents net earnings as a percentage of average total equity.
(4) Return on tangible common equity represents net earnings as a percentage of average tangible common equity. Tangible Common Equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(5) Net interest margin represents net interest income divided by average interest-earning assets.
(6) Efficiency ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income.
(7) Based on customer statement-end balances extrapolated to the respective period-end date.
(8) Allowance coverage ratio represents allowance for loan losses divided by total period-end loan receivables.
(9) 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.
(10) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.



SYNCHRONY FINANCIAL
STATEMENTS OF EARNINGS
(unaudited, $ in millions)
	Quarter Ended																				Six Months Ended
	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			2Q'16 vs. 2Q'15					Jun 30, 2016			Jun 30, 2015			YTD'16 vs. YTD'15
Interest income:
Interest and fees on loans	$	3,494		$	3,498		$	3,494		$	3,379		$	3,166		$	328		10.4	%	$	6,992		$	6,306		$	686		10.9	%
Interest on investment securities	21			22			15			13			11			10			90.9	%	43			21			22			104.8	%
Total interest income	3,515			3,520			3,509			3,392			3,177			338			10.6	%	7,035			6,327			708			11.2	%

Interest expense:
Interest on deposits	179			172			165			159			146			33			22.6	%	351			283			68			24.0	%
Interest on borrowings of consolidated securitization entities	59			58			56			54			53			6			11.3	%	117			105			12			11.4	%
Interest on third-party debt	65			81			80			76			71			(6		)	(8.5	)%	146			153			(7		)	(4.6	)%
Interest on related party debt	—			—			—			—			—			—			—	%	—			4			(4		)	(100.0	)%
Total interest expense	303			311			301			289			270			33			12.2	%	614			545			69			12.7	%

Net interest income	3,212			3,209			3,208			3,103			2,907			305			10.5	%	6,421			5,782			639			11.1	%

Retailer share arrangements	(664		)	(670		)	(734		)	(723		)	(621		)	(43		)	6.9	%	(1,334		)	(1,281		)	(53		)	4.1	%
Net interest income, after retailer share arrangements	2,548			2,539			2,474			2,380			2,286			262			11.5	%	5,087			4,501			586			13.0	%

Provision for loan losses	1,021			903			823			702			740			281			38.0	%	1,924			1,427			497			34.8	%
Net interest income, after retailer share arrangements and provision for loan losses	1,527			1,636			1,651			1,678			1,546			(19		)	(1.2	)%	3,163			3,074			89			2.9	%

Other income:
Interchange revenue	151			130			147			135			123			28			22.8	%	281			223			58			26.0	%
Debt cancellation fees	63			64			62			61			61			2			3.3	%	127			126			1			0.8	%
Loyalty programs	(135		)	(110		)	(125		)	(122		)	(94		)	(41		)	43.6	%	(245		)	(172		)	(73		)	42.4	%
Other	4			8			3			10			30			(26		)	(86.7	)%	12			44			(32		)	(72.7	)%
Total other income	83			92			87			84			120			(37		)	(30.8	)%	175			221			(46		)	(20.8	)%

Other expense:
Employee costs	301			280			285			268			250			51			20.4	%	581			489			92			18.8	%
Professional fees	154			146			165			162			156			(2		)	(1.3	)%	300			318			(18		)	(5.7	)%
Marketing and business development	107			94			128			115			108			(1		)	(0.9	)%	201			190			11			5.8	%
Information processing	81			82			83			77			74			7			9.5	%	163			137			26			19.0	%
Other	196			198			209			221			217			(21		)	(9.7	)%	394			417			(23		)	(5.5	)%
Total other expense	839			800			870			843			805			34			4.2	%	1,639			1,551			88			5.7	%

Earnings before provision for income taxes	771			928			868			919			861			(90		)	(10.5	)%	1,699			1,744			(45		)	(2.6	)%
Provision for income taxes	282			346			321			345			320			(38		)	(11.9	)%	628			651			(23		)	(3.5	)%
Net earnings attributable to common shareholders	$	489		$	582		$	547		$	574		$	541		$	(52	)	(9.6	)%	$	1,071		$	1,093		$	(22	)	(2.0	)%



SYNCHRONY FINANCIAL
STATEMENTS OF FINANCIAL POSITION⁽¹⁾
(unaudited, $ in millions)
	Quarter Ended
	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Jun 30, 2016 vs. Jun 30, 2015
Assets
Cash and equivalents	$	11,787		$	12,500		$	12,325		$	12,271		$	10,621		$	1,166		11.0	%
Investment securities	2,723			2,949			3,142			3,596			3,682			(959		)	(26.0	)%
Loan receivables:
Unsecuritized loans held for investment	44,854			41,730			42,826			38,325			36,019			8,835			24.5	%
Restricted loans of consolidated securitization entities	23,428			24,119			25,464			25,195			25,412			(1,984		)	(7.8	)%
Total loan receivables	68,282			65,849			68,290			63,520			61,431			6,851			11.2	%
Less: Allowance for loan losses	(3,894		)	(3,620		)	(3,497		)	(3,371		)	(3,302		)	(592		)	17.9	%
Loan receivables, net	64,388			62,229			64,793			60,149			58,129			6,259			10.8	%
Loan receivables held for sale	—			—			—			—			—			—			—	%
Goodwill	949			949			949			949			949			—			—	%
Intangible assets, net	704			702			701			646			575			129			22.4	%
Other assets	1,833			2,327			2,080			1,679			1,640			193			11.8	%
Total assets	$	82,384		$	81,656		$	83,990		$	79,290		$	75,596		$	6,788		9.0	%

Liabilities and Equity
Deposits:
Interest-bearing deposit accounts	$	46,220		$	44,721		$	43,215		$	40,323		$	37,539		$	8,681		23.1	%
Non-interest-bearing deposit accounts	207			256			152			140			143			64			44.8	%
Total deposits	46,427			44,977			43,367			40,463			37,682			8,745			23.2	%
Borrowings:
Borrowings of consolidated securitization entities	12,236			12,423			13,589			13,624			13,933			(1,697		)	(12.2	)%
Bank term loan	—			1,494			4,133			4,630			5,126			(5,126		)	(100.0	)%
Senior unsecured notes	7,059			6,559			6,557			5,560			4,569			2,490			54.5	%
Related party debt	—			—			—			—			—			—			—	%
Total borrowings	19,295			20,476			24,279			23,814			23,628			(4,333		)	(18.3	)%
Accrued expenses and other liabilities	2,947			2,999			3,740			2,855			2,708			239			8.8	%
Total liabilities	68,669			68,452			71,386			67,132			64,018			4,651			7.3	%
Equity:
Common stock	1			1			1			1			1			—			—	%
Additional paid-in capital	9,370			9,359			9,351			9,431			9,422			(52		)	(0.6	)%
Retained earnings	4,364			3,875			3,293			2,746			2,172			2,192			100.9	%
Accumulated other comprehensive income:	(20		)	(31		)	(41		)	(20		)	(17		)	(3		)	17.6	%
Total equity	13,715			13,204			12,604			12,158			11,578			2,137			18.5	%
Total liabilities and equity	$	82,384		$	81,656		$	83,990		$	79,290		$	75,596		$	6,788		9.0	%

(1) In January 2016, we adopted ASU 2015-03, Interest–Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires the presentation of deferred issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of the debt liability. Accordingly, we have reclassified issuance costs associated with our borrowings and certain brokered deposits, from other assets, and reflected as a reduction of borrowings and interest-bearing deposit accounts, as applicable, for each period presented to conform to the current period presentation. Related selected financial metrics included within this Financial Data Supplement have also been updated where applicable to reflect this reclassification.



SYNCHRONY FINANCIAL
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN⁽¹⁾
(unaudited, $ in millions)

	Quarter Ended
	Jun 30, 2016							Mar 31, 2016							Dec 31, 2015							Sep 30, 2015							Jun 30, 2015
				Interest		Average					Interest		Average					Interest		Average					Interest		Average					Interest		Average
	Average			Income/		Yield/		Average			Income/		Yield/		Average			Income/		Yield/		Average			Income/		Yield/		Average			Income/		Yield/
	Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate
Assets
Interest-earning assets:
Interest-earning cash and equivalents	$	11,692		$	14	0.48	%	$	12,185		$	16	0.53	%	$	12,070		$	9	0.30	%	$	11,059		$	7	0.25	%	$	10,728		$	6	0.22	%
Securities available for sale	2,805			7		1.00	%	2,995			6		0.81	%	3,445			6		0.69	%	3,534			6		0.67	%	3,107			5		0.65	%

Loan receivables:
Credit cards, including held for sale	64,269			3,432		21.48	%	64,194			3,436		21.53	%	62,834			3,432		21.67	%	59,890			3,315		21.96	%	57,588			3,106		21.63	%
Consumer installment loans	1,235			28		9.12	%	1,159			27		9.37	%	1,163			26		8.87	%	1,160			27		9.23	%	1,101			26		9.47	%
Commercial credit products	1,373			33		9.67	%	1,313			35		10.72	%	1,361			36		10.49	%	1,400			36		10.20	%	1,372			34		9.94	%
Other	66			1		NM		39			—		—	%	48			—		—	%	54			1		NM		33			—		—	%
Total loan receivables, including held for sale	66,943			3,494		20.99	%	66,705			3,498		21.09	%	65,406			3,494		21.19	%	62,504			3,379		21.45	%	60,094			3,166		21.13	%
Total interest-earning assets	81,440			3,515		17.36	%	81,885			3,520		17.29	%	80,921			3,509		17.20	%	77,097			3,392		17.46	%	73,929			3,177		17.24	%

Non-interest-earning assets:
Cash and due from banks	774							1,277							1,268							1,216							583
Allowance for loan losses	(3,729		)					(3,583		)					(3,440		)					(3,341		)					(3,285		)
Other assets	3,209							3,256							3,133							2,869							2,758
Total non-interest-earning assets	254							950							961							744							56

Total assets	$	81,694						$	82,835						$	81,882						$	77,841						$	73,985

Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	45,490		$	179	1.58	%	$	44,101		$	172	1.57	%	$	42,079		$	165	1.56	%	$	39,048		$	159	1.62	%	$	35,816		$	146	1.64	%
Borrowings of consolidated securitization entities	12,291			59		1.93	%	12,950			58		1.80	%	13,550			56		1.64	%	13,715			54		1.56	%	14,011			53		1.52	%
Bank term loan⁽²⁾	374			7		7.53	%	2,565			24		3.76	%	4,507			28		2.46	%	4,878			29		2.36	%	5,374			32		2.39	%
Senior unsecured notes	6,809			58		3.43	%	6,558			57		3.50	%	5,810			52		3.55	%	5,312			47		3.51	%	4,568			39		3.42	%
Related party debt	—			—		—	%	—			—		—	%	—			—		—	%	—			—		—	%	—			—		—	%
Total interest-bearing liabilities	64,964			303		1.88	%	66,174			311		1.89	%	65,946			301		1.81	%	62,953			289		1.82	%	59,769			270		1.81	%

Non-interest-bearing liabilities
Non-interest-bearing deposit accounts	217							226							147							149							166
Other liabilities	3,046							3,534							3,396							2,859							2,750
Total non-interest-bearing liabilities	3,263							3,760							3,543							3,008							2,916

Total liabilities	68,227							69,934							69,489							65,961							62,685

Equity
Total equity	13,467							12,901							12,393							11,880							11,300

Total liabilities and equity	$	81,694						$	82,835						$	81,882						$	77,841						$	73,985
Net interest income				$	3,212						$	3,209						$	3,208						$	3,103						$	2,907

Interest rate spread⁽³⁾						15.48	%						15.40	%						15.39	%						15.64	%						15.43	%
Net interest margin⁽⁴⁾						15.86	%						15.76	%						15.73	%						15.97	%						15.77	%

(1) Certain balance sheet amounts and related metrics have been updated to reflect the adoption of ASU 2015-03. More detail on this update is in footnote (1) on the Statements of Financial Position.
(2) Average interest rate on liabilities calculated above utilizes monthly average balances. The effective interest rates for the Bank term loan for the quarters ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, and June 30, 2015 were 2.51%, 2.47%, 2.26%, 2.23%, and 2.21%, respectively. The Bank term loan effective rate excludes the impact of charges incurred in connection with prepayments of the loan.
(3) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average interest-earning assets.



SYNCHRONY FINANCIAL
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN⁽¹⁾
(unaudited, $ in millions)

	Six Months Ended Jun 30, 2016							Six Months Ended Jun 30, 2015
				Interest		Average					Interest		Average
	Average			Income/		Yield/		Average			Income/		Yield/
	Balance			Expense		Rate		Balance			Expense		Rate
Assets
Interest-earning assets:
Interest-earning cash and equivalents	$	11,874		$	30	0.51	%	$	11,006		$	12	0.22	%
Securities available for sale	2,893			13		0.90	%	2,887			9		0.63	%

Loan receivables:
Credit cards, including held for sale	64,363			6,868		21.46	%	57,670			6,185		21.63	%
Consumer installment loans	1,199			55		9.22	%	1,081			51		9.51	%
Commercial credit products	1,346			68		10.16	%	1,345			70		10.50	%
Other	55			1		NM		28			—		—	%
Total loan receivables, including held for sale	66,963			6,992		21.00	%	60,124			6,306		21.15	%
Total interest-earning assets	81,730			7,035		17.31	%	74,017			6,327		17.24	%

Non-interest-earning assets:
Cash and due from banks	1,036							578
Allowance for loan losses	(3,661		)					(3,282		)
Other assets	3,246							2,710
Total non-interest-earning assets	621							6

Total assets	$	82,351						$	74,023

Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	44,807		$	351	1.58	%	$	35,445		$	283	1.61	%
Borrowings of consolidated securitization entities	12,648			117		1.86	%	14,085			105		1.50	%
Bank term loan⁽²⁾	1,466			31		4.25	%	5,981			79		2.66	%
Senior unsecured notes	6,701			115		3.45	%	4,284			74		3.48	%
Related party debt	—			—		—	%	232			4		3.48	%
Total interest-bearing liabilities	65,622			614		1.88	%	60,027			545		1.83	%

Non-interest-bearing liabilities
Non-interest-bearing deposit accounts	217							153
Other liabilities	3,331							2,820
Total non-interest-bearing liabilities	3,548							2,973

Total liabilities	69,170							63,000

Equity
Total equity	13,181							11,023

Total liabilities and equity	$	82,351						$	74,023
Net interest income				$	6,421						$	5,782

Interest rate spread⁽³⁾						15.43	%						15.41	%
Net interest margin⁽⁴⁾						15.80	%						15.75	%

(1) Certain balance sheet amounts and related metrics have been updated to reflect the adoption of ASU 2015-03. More detail on this update is in footnote (1) on the Statements of Financial Position.
(2) Average interest rate on liabilities calculated above utilizes monthly average balances. The effective interest rates for the Bank term loan for the 6 months ended June 30, 2016 and June 30, 2015 were 2.48% and 2.21%, respectively. The Bank term loan effective rate excludes the impact of charges incurred in connection with prepayments of the loan.
(3) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average interest-earning assets.



SYNCHRONY FINANCIAL
BALANCE SHEET STATISTICS⁽¹⁾
(unaudited, $ in millions, except per share statistics)

	Quarter Ended
	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Jun 30, 2016 vs. Jun 30, 2015
BALANCE SHEET STATISTICS
Total common equity	$	13,715		$	13,204		$	12,604		$	12,158		$	11,578		$	2,137	18.5	%
Total common equity as a % of total assets	16.65		%	16.17		%	15.01		%	15.33		%	15.32		%			1.33	%

Tangible assets	$	80,731		$	80,005		$	82,340		$	77,695		$	74,072		$	6,659	9.0	%
Tangible common equity⁽²⁾	$	12,062		$	11,553		$	10,954		$	10,563		$	10,054		$	2,008	20.0	%
Tangible common equity as a % of tangible assets⁽²⁾	14.94		%	14.44		%	13.30		%	13.60		%	13.57		%			1.37	%
Tangible common equity per share⁽²⁾	$	14.46		$	13.86		$	13.14		$	12.67		$	12.06		$	2.40	19.9	%

REGULATORY CAPITAL RATIOS⁽³⁾
	Basel III Transition
Total risk-based capital ratio⁽⁴⁾	19.8		%	19.4		%	18.1		%	18.8		%	18.6		%
Tier 1 risk-based capital ratio⁽⁵⁾	18.5		%	18.1		%	16.8		%	17.5		%	17.3		%
Tier 1 leverage ratio⁽⁶⁾	15.6		%	14.8		%	14.4		%	14.6		%	14.6		%
Common equity Tier 1 capital ratio⁽⁷⁾	18.5		%	18.1		%	16.8		%	17.5		%	17.3		%

	Basel III Fully Phased-in
Common equity Tier 1 capital ratio⁽⁷⁾	18.0		%	17.5		%	15.9		%	16.7		%	16.5		%

(1) Certain balance sheet amounts and related metrics have been updated to reflect the adoption of ASU 2015-03. More detail on this update is in footnote (1) on the Statements of Financial Position.
(2) Tangible common equity ("TCE") is a non-GAAP measure. We believe TCE is a more meaningful measure of the net asset value of the Company to investors. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(3) Regulatory capital metrics at June 30, 2016 are preliminary and therefore subject to change. As a new savings and loan holding company, the Company historically has not been required by regulators to disclose capital ratios prior to December 31, 2015, and therefore these ratios are non-GAAP measures. See Reconciliation of Non-GAAP Measures and Calculation of Regulatory Measures for components of capital ratio calculations.
(4) Total risk-based capital ratio is the ratio of total risk-based capital divided by risk-weighted assets.
(5) Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided by risk-weighted assets.
(6) Tier 1 leverage ratio is the ratio of Tier 1 capital divided by total average assets, after certain adjustments.
(7) Common equity Tier 1 capital ratio is the ratio of common equity Tier 1 capital to total risk-weighted assets, each as calculated under Basel III rules. Common equity Tier 1 capital ratio (fully phased-in) is a preliminary estimate reflecting management’s interpretation of the final Basel III rules adopted in July 2013 by the Federal Reserve Board, which have not been fully implemented, and our estimate and interpretations are subject to, among other things, ongoing regulatory review and implementation guidance.



SYNCHRONY FINANCIAL
PLATFORM RESULTS
(unaudited, $ in millions)
	Quarter Ended																				Six Months Ended
	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			2Q'16 vs. 2Q'15					Jun 30, 2016			Jun 30, 2015			YTD'16 vs. YTD'15
RETAIL CARD
Purchase volume⁽¹⁾⁽²⁾	$	25,411		$	21,550		$	26,768		$	23,560		$	23,452		$	1,959		8.4	%	$	46,961		$	41,862		$	5,099		12.2	%
Period-end loan receivables	$	46,705		$	45,113		$	47,412		$	43,432		$	42,315		$	4,390		10.4	%	$	46,705		$	42,315		$	4,390		10.4	%
Average loan receivables, including held for sale	$	45,861		$	45,900		$	44,958		$	42,933		$	41,303		$	4,558		11.0	%	$	45,990		$	41,302		$	4,688		11.4	%
Average active accounts (in thousands)⁽²⁾⁽³⁾	52,314			52,969			52,038			49,953			48,981			3,333			6.8	%	52,798			49,513			3,285			6.6	%

Interest and fees on loans⁽²⁾	$	2,585		$	2,614		$	2,594		$	2,508		$	2,335		$	250		10.7	%	$	5,199		$	4,672		$	527		11.3	%
Other income⁽²⁾	$	69		$	79		$	76		$	70		$	107		$	(38	)	(35.5	)%	$	148		$	193		$	(45	)	(23.3	)%
Retailer share arrangements⁽²⁾	$	(656	)	$	(661	)	$	(723	)	$	(708	)	$	(606	)	$	(50	)	8.3	%	$	(1,317	)	$	(1,257	)	$	(60	)	4.8	%

PAYMENT SOLUTIONS
Purchase volume⁽¹⁾	$	3,903		$	3,392		$	3,714		$	3,635		$	3,371		$	532		15.8	%	$	7,295		$	6,319		$	976		15.4	%
Period-end loan receivables	$	13,997		$	13,420		$	13,543		$	12,933		$	12,194		$	1,803		14.8	%	$	13,997		$	12,194		$	1,803		14.8	%
Average loan receivables	$	13,644		$	13,482		$	13,192		$	12,523		$	11,971		$	1,673		14.0	%	$	13,584		$	11,990		$	1,594		13.3	%
Average active accounts (in thousands)⁽³⁾	8,153			8,134			7,896			7,468			7,231			922			12.8	%	8,148			7,251			897			12.4	%

Interest and fees on loans	$	467		$	457		$	462		$	442		$	412		$	55		13.3	%	$	924		$	815		$	109		13.4	%
Other income	$	3		$	4		$	3		$	5		$	4		$	(1	)	(25.0	)%	$	7		$	9		$	(2	)	(22.2	)%
Retailer share arrangements	$	(7	)	$	(7	)	$	(10	)	$	(13	)	$	(14	)	$	7		(50.0	)%	$	(14	)	$	(22	)	$	8		(36.4	)%

CARECREDIT
Purchase volume⁽¹⁾	$	2,193		$	2,035		$	1,978		$	2,011		$	1,987		$	206		10.4	%	$	4,228		$	3,768		$	460		12.2	%
Period-end loan receivables	$	7,580		$	7,316		$	7,335		$	7,155		$	6,922		$	658		9.5	%	$	7,580		$	6,922		$	658		9.5	%
Average loan receivables	$	7,438		$	7,323		$	7,256		$	7,048		$	6,820		$	618		9.1	%	$	7,389		$	6,832		$	557		8.2	%
Average active accounts (in thousands)⁽³⁾	5,064			5,031			4,958			4,826			4,711			353			7.5	%	5,050			4,714			336			7.1	%

Interest and fees on loans	$	442		$	427		$	438		$	429		$	419		$	23		5.5	%	$	869		$	819		$	50		6.1	%
Other income	$	11		$	9		$	8		$	9		$	9		$	2		22.2	%	$	20		$	19		$	1		5.3	%
Retailer share arrangements	$	(1	)	$	(2	)	$	(1	)	$	(2	)	$	(1	)	$	—		—	%	$	(3	)	$	(2	)	$	(1	)	50.0	%

TOTAL SYF
Purchase volume⁽¹⁾⁽²⁾	$	31,507		$	26,977		$	32,460		$	29,206		$	28,810		$	2,697		9.4	%	$	58,484		$	51,949		$	6,535		12.6	%
Period-end loan receivables	$	68,282		$	65,849		$	68,290		$	63,520		$	61,431		$	6,851		11.2	%	$	68,282		$	61,431		$	6,851		11.2	%
Average loan receivables, including held for sale	$	66,943		$	66,705		$	65,406		$	62,504		$	60,094		$	6,849		11.4	%	$	66,963		$	60,124		$	6,839		11.4	%
Average active accounts (in thousands)⁽²⁾⁽³⁾	65,531			66,134			64,892			62,247			60,923			4,608			7.6	%	65,996			61,478			4,518			7.3	%

Interest and fees on loans⁽²⁾	$	3,494		$	3,498		$	3,494		$	3,379		$	3,166		$	328		10.4	%	$	6,992		$	6,306		$	686		10.9	%
Other income⁽²⁾	$	83		$	92		$	87		$	84		$	120		$	(37	)	(30.8	)%	$	175		$	221		$	(46	)	(20.8	)%
Retailer share arrangements⁽²⁾	$	(664	)	$	(670	)	$	(734	)	$	(723	)	$	(621	)	$	(43	)	6.9	%	$	(1,334	)	$	(1,281	)	$	(53	)	4.1	%

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



SYNCHRONY FINANCIAL
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES⁽¹⁾⁽²⁾
(unaudited, $ in millions, except per share statistics)
	Quarter Ended
	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015
COMMON EQUITY MEASURES
GAAP Total common equity	$	13,715		$	13,204		$	12,604		$	12,158		$	11,578
Less: Goodwill	(949		)	(949		)	(949		)	(949		)	(949		)
Less: Intangible assets, net	(704		)	(702		)	(701		)	(646		)	(575		)
Tangible common equity	$	12,062		$	11,553		$	10,954		$	10,563		$	10,054

Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss)	282			281			280			291			293
Basel III - Common equity Tier 1 (fully phased-in)	$	12,344		$	11,834		$	11,234		$	10,854		$	10,347
Adjustment related to capital components during transition	266			265			399			375			331
Basel III - Common equity Tier I (transition)	$	12,610		$	12,099		$	11,633		$	11,229		10,678

RISK-BASED CAPITAL
Common equity Tier 1	$	12,610		$	12,099		$	11,633		$	11,229		$	10,678
Add: Allowance for loan losses includible in risk-based capital	890			869			898			833			804
Risk-based capital	$	13,500		$	12,968		$	12,531		$	12,062		$	11,482

ASSET MEASURES
Total average assets	$	81,694		$	82,835		$	81,882		$	77,841		$	73,985
Adjustments for:
Disallowed goodwill and other disallowed intangible assets, net of related deferred tax liabilities	(1,113		)	(1,117		)	(991		)	(931		)	(903		)
Other	—			—			—			104			60
Total assets for leverage purposes	$	80,581		$	81,718		$	80,891		$	77,014		$	73,142

Risk-weighted assets - Basel III (fully phased-in)⁽³⁾	$	68,462		$	67,697		$	70,493		$	65,125		$	62,814
Risk-weighted assets - Basel III (transition)⁽³⁾	$	68,188		$	66,689		$	69,224		64,090			61,829

TANGIBLE COMMON EQUITY PER SHARE
GAAP book value per share	$	16.45		$	15.84		$	15.12		$	14.58		$	13.89
Less: Goodwill	(1.14		)	(1.14		)	(1.14		)	(1.14		)	(1.14		)
Less: Intangible assets, net	(0.85		)	(0.84		)	(0.84		)	(0.77		)	(0.69		)
Tangible common equity per share	$	14.46		$	13.86		$	13.14		$	12.67		$	12.06

(1) Certain balance sheet amounts and related metrics have been updated to reflect the adoption of ASU 2015-03. More detail on this update is in footnote (1) on the Statements of Financial Position.
(2) Regulatory measures at June 30, 2016 are presented on an estimated basis.
(3) Key differences between Basel III transitional rules and fully phased-in Basel III rules in the calculation of risk-weighted assets include, but not limited to, risk weighting of deferred tax assets and adjustments for certain intangible assets.

2Q’16 Financial Results July 22, 2016 Exhibit 99.3

2 Cautionary Statement Regarding Forward-Looking Statements The following slides are part of a presentation by Synchrony Financial in connection with reporting quarterly financial results. No representation is made that the information in these slides is complete. For additional information, see the earnings release and financial supplement included as exhibits to our Current Report on Form 8-K filed today and available on our website (www.synchronyfinancial.com) and the SEC’s website (www.sec.gov). All references to net earnings and net income are intended to have the same meaning. This presentation contains certain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. Forward-looking statements may be identified by words such as “outlook,” “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “targets,” “estimates,” “will,” “should,” “may” or words of similar meaning, but these words are not the exclusive means of identifying forward-looking statements. Forward-looking statements are based on management’s current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include global political, economic, business, competitive, market, regulatory and other factors and risks, such as: the impact of macroeconomic conditions and whether industry trends we have identified develop as anticipated; retaining existing partners and attracting new partners, concentration of our revenue in a small number of Retail Card partners, promotion and support of our products by our partners, and financial performance of our partners; higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to securitize our loans, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loans, and lower payment rates on our securitized loans; our ability to grow our deposits in the future; changes in market interest rates and the impact of any margin compression; effectiveness of our risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, our ability to manage our credit risk, the sufficiency of our allowance for loan losses and the accuracy of the assumptions or estimates used in preparing our financial statements; our ability to offset increases in our costs in retailer share arrangements; competition in the consumer finance industry; our concentration in the U.S. consumer credit market; our ability to successfully develop and commercialize new or enhanced products and services; our ability to realize the value of strategic investments; reductions in interchange fees; fraudulent activity; cyber-attacks or other security breaches; failure of third parties to provide various services that are important to our operations; our transition to a replacement third-party vendor to manage the technology platform for our online retail deposits; disruptions in the operations of our computer systems and data centers; international risks and compliance and regulatory risks and costs associated with international operations; alleged infringement of intellectual property rights of others and our ability to protect our intellectual property; litigation and regulatory actions; damage to our reputation; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions and state sales tax rules and regulations; a material indemnification obligation to GE under the tax sharing and separation agreement with GE if we cause the split-off from GE or certain preliminary transactions to fail to qualify for tax-free treatment or in the case of certain significant transfers of our stock following the split-off; obligations associated with being an independent public company; regulation, supervision, examination and enforcement of our business by governmental authorities, the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the impact of the Consumer Financial Protection Bureau’s regulation of our business; changes to our methods of offering our CareCredit products; impact of capital adequacy rules and liquidity requirements; restrictions that limit our ability to pay dividends and repurchase our common stock, and restrictions that limit Synchrony Bank’s ability to pay dividends to us; regulations relating to privacy, information security and data protection; use of third-party vendors and ongoing third-party business relationships; and failure to comply with anti-money laundering and anti-terrorism financing laws. For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this presentation and in our public filings, including under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed on February 25, 2016. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law. Differences between this presentation and the supplemental financials may occur due to rounding. Non-GAAP Measures The information provided herein includes certain capital ratios, which are not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The reconciliations of such measures to the most directly comparable GAAP measures are included in the appendix of this presentation. Disclaimers

3 2Q'16 Highlights Financial highlights • $489 million Net earnings, $0.58 diluted EPS • Purchase volume +9%, Loan receivables +11%, Net interest income +10% • Net charge-offs were 4.49% compared to 4.63% in the prior year  30+ delinquency at 3.79% compared to 3.53% in the prior year • Expenses +4% ... Efficiency ratio 31.9% compared to 33.5% in the prior year • Deposits up $8.7 billion compared to prior year, now 71% of funding • Strong capital and liquidity  18.5% CET1 & $14.0 billion liquid assets • Announced capital return to begin in 3Q’16  $0.13 quarterly dividend  $952 million annual share repurchase (a) Business highlights (a) CET1 % calculated under the Basel III transitional guidelines  Renewed key relationships  Launched new programs  Signed new partnerships

4 Growth Metrics +9% Purchase volume $ in billions Loan receivables $ in billions Average active accounts In millions Interest and fees on loans $ in millions 2Q'15 2Q'16 $28.8 $31.5 $61.4 $68.3 $3,494 $3,166 65.5 60.9 +8% +10% +11% 2Q'15 2Q'16 2Q'15 2Q'16 2Q'15 2Q'16

5 Platform Results Retail Card Loan receivables, $ in billions $42.3 $46.7 2Q'15 2Q'16  Strong receivable growth across partner programs  Interest and fees on loans up 11% driven primarily by receivable growth Payment Solutions Loan receivables, $ in billions $12.2 $14.0 2Q'15 2Q'16  Broad receivable growth led by home furnishings and auto  Interest and fees on loans up 13% driven by receivable growth CareCredit Loan receivables, $ in billions $6.9 $7.6 2Q'15 2Q'16  Receivable growth led by dental and veterinary  Interest and fees on loans up 5% driven by receivable growth Purchase volume Accounts $23.4 49.0 $25.4 52.2 +8% +7% $3.4 7.2 $3.9 8.2 +16% +13% $2.0 4.7 $2.2 5.1 +10% +7% Interest and fees on loans $2,335 $2,585 +11% $412 $467 +13% $419 $442 +5% +10% +15% +10% (a) (a) Accounts represent average active accounts in millions, which are credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month. Purchase volume $ in billions and interest and fees on loans $ in millions V% V% V%

6 Financial Results Summary earnings statement Second quarter 2016 highlights $ in millions, except ratios Total interest income $3,515 $3,177 $338 11% Total interest expense (303) (270) (33) (12)% Net interest income (NII) 3,212 2,907 305 10% Retailer share arrangements (RSA) (664) (621) (43) (7)% NII, after RSA 2,548 2,286 262 11% Provision for loan losses 1,021 740 (281) (38)% Other income 83 120 (37) (31)% Other expense 839 805 (34) (4)% Pre-Tax earnings 771 861 (90) (10)% Provision for income taxes 282 320 38 12% Net earnings $489 $541 $(52) (10)% Return on assets 2.4% 2.9% (0.5)pts. 2Q'16 2Q'15 % $ B/(W) • $489 million Net earnings, 2.4% ROA • Net interest income up 10% driven by growth in loan receivables  Interest and fees on loan receivables up 10% driven by receivable growth  Interest expense increase driven by growth • Provision for loan losses driven by higher reserve build and growth  30+ delinquency 3.79% compared to 3.53% in the prior year ... NCO’s 4.49% compared to 4.63% in the prior year • Other income down 31%  $20 million gain on portfolio sales in 2Q’15, which did not repeat and higher loyalty partially offset by interchange • Other expense up 4%  Other expense increase driven by growth

7 Net Interest Income Second quarter 2016 highlights • Net interest income increased 10% compared to prior year driven by growth in receivables  Interest and fees on loans increased 10% compared to prior year driven by average loan receivable growth • Net interest margin up 9bps.  Liquid assets as a percent of total assets declined to 16.9% from 18.1% in the prior year  Receivable yield 20.99%, down 14bps. reflecting growth in promotional balances  Interest expense 1.88%, increased 7bps. reflecting rising benchmark rates Net interest income $ in millions, % of average interest-earning assets 15.77% 15.86% 2Q'15 2Q'16 +10% $2,907 $3,212

8 Asset Quality Metrics Net charge-offs $ in millions, % of average loan receivables including held for sale 30+ days past due $ in millions, % of period-end loan receivables $2,772 $2,416 $579 $2,536 $663 $2,209 $668 $2,171 $693 $633 $2,553 $697 4.05% 4.32% 4.53% 4.63% 4.02% 4.23% Allowance for loan losses $ in millions, % of period-end loan receivables 5.46% $3,102 5.28% $3,236 5.59% $3,255 5.38% $3,302 5.31% $3,371 5.12% $3,497 $2,538 $780 4.70% 5.50% $3,620 3Q’14 3Q’15 4Q’14 1Q’15 2Q’15 4Q’15 1Q’16 2Q’16 $2,585 3Q’14 3Q’15 4Q’14 1Q’15 2Q’15 4Q’15 1Q’16 2Q’16 $747 4.49% 3Q’14 3Q’15 4Q’14 1Q’15 2Q’15 4Q’15 1Q’16 2Q’16 5.70% $3,894 90+ days past due $ in millions, % of period-end loan receivables 4.26% $1,051 4.02% 1.85% 4.14% $1,162 1.90% 3.79% $1,056 1.81% 3.53% 3Q’14 3Q’15 4Q’14 1Q’15 2Q’15 4Q’15 1Q’16 2Q’16 $933 1.52% $1,102 1.73% 4.06% $1,273 1.86% 3.85% $1,212 1.84% 3.79% $1,143 1.67% $2,097 3.82% 2Q’14 $673 4.88% 2Q’14 $908 1.65% 2Q’14 5.48% $3,006 2Q’14

9 Other expense $ in millions Other Expense Employee costs $250 $301 $51 20% Professional fees 156 154 (2) (1)% Marketing/BD 108 107 (1) (1)% Information processing 74 81 7 9% Other 217 196 (21) (10)% Other expense $805 $839 $34 4% Efficiency 33.5% 31.9% (1.6)pts. $805 (a) “Other Expense” divided by sum of “NII, after RSA” plus “Other income” (1) V$ V% +4% (a) $839 2Q'15 2Q'16 Second quarter 2016 highlights • Expense increase compared to prior year primarily driven by growth • Employee costs up $51 million  Driven by employees added for growth and replacement of certain 3rd party and GE services • Information processing up $7 million  Driven by continued IT investments and purchase volume growth • Other down $21 million  Driven by EMV benefit and a reduction in payments under the GE Transition Service Agreement (TSA)

10 Funding, Capital and Liquidity (c) Liquid assets $13.7 $14.0 Undrawn securitization capacity 6.1 7.0 Total liquidity $19.8 $21.0 % of total assets 26.2% 25.5% Common equity Tier 1 $12.6 $12.3 Risk-weighted assets $68.2 $68.5 Liquidity $ in billions 2Q'16 $21.0 $19.8 2Q'15 Capital ratios 2Q'16, $ in billions BIII CET1 T% (d) Does not include unencumbered assets in the Bank that could be pledged (d) BIII CET1 % (a) Estimated percentages and amounts (b) Calculated under the Basel III transition guidelines (c) Calculated under the fully phased-in Basel III guidelines 18.5% 18.0% Funding sources $ in billions 2Q'15 2Q'16 Variance Deposits 61% 71% +10pts. Securitization 23% 18% (5)pts. 3rd Party Debt 16% 11% (5)pts. $65.7 Deposits Securitization 3rd Party Debt V$ (a) (b) $37.7 $13.9 $9.7 $46.4 $12.2 $7.1 $61.3 (2.6) (1.7) +8.7

11 2Q'16 Wrap Up • Net earnings of $489 million … $0.58 earnings per diluted share • Broad based growth … Purchase volume +9%, Loan receivables +11%, Net interest income +10% • Renewed key partners … Ashley Homestore, American Society of Plastic Surgeons, Suzuki and VCA Animal Hospitals • Signed new partnerships with Cathay Pacific and Fareportal • Launched new programs with Mattress Firm and Marvel • Fast-growing deposit platform … deposits at $46 billion, now 71% of funding • Strong balance sheet, $14.0 billion of liquid assets and 18.5% CET1 (BIIIT) • Announced quarterly common stock dividend of $0.13 per share and share repurchase program of up to $952 million for the four quarters ending June 30, 2017 (a) (a) CET1 % calculated under the Basel III transition guidelines

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13 Appendix

14 Non-GAAP Reconciliations We present certain capital ratios. Our Basel III Tier 1 common ratio, calculated on a fully phased-in basis, is a preliminary estimate reflecting management’s interpretation of the final Basel III capital rules adopted in July 2013 by the Federal Reserve Board, which have not been fully implemented, and our estimate and interpretations are subject to, among other things, ongoing regulatory review and implementation guidance. This ratio is not currently required by regulators to be disclosed, and therefore is considered a non-GAAP measure. We believe this capital ratio is a useful measure to investors because it is widely used by analysts and regulators to assess the capital position of financial services companies, although this ratio may not be comparable to similarly titled measures reported by other companies.

15 Non-GAAP Reconciliation The following table sets forth a reconciliation of each component of our capital ratios to the comparable GAAP component at June 30, 2016. COMMON EQUITY MEASURES GAAP Total common equity .................................................................................................... Less: Goodwill ............................................................................................................... Less: Intangible assets, net ............................................................................................. Tangible common equity ........................................................................................................ Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss) ................................................................ Basel III – Common equity Tier 1 (fully phased-in) ............................................................ Adjustments related to capital components during transition ........................................ Basel III – Common equity Tier 1 (transition) ................................................................... Risk-weighted assets – Basel III (fully phased-in) .............................................................. Risk-weighted assets – Basel III (transition) ....................................................................... $13,715 (949) (704) $12,062 282 $12,344 266 $12,610 $68,462 $68,188 $ in millions at June 30, 2016

Exhibit 99.4

Explanation of Non-GAAP Measures

The information provided in this Form 8-K and exhibits includes measures which are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP").

We present certain capital ratios in this Form 8-K and exhibits. Our Basel III Tier 1 common ratio, calculated on a fully phased-in basis, is a preliminary estimate reflecting management’s interpretation of the final Basel III capital rules adopted in July 2013 by the Federal Reserve Board, which have not been fully implemented, and our estimate and interpretations are subject to, among other things, ongoing regulatory review and implementation guidance. This ratio is not currently required by regulators to be disclosed, and therefore is considered a non-GAAP measure. We believe this capital ratio is a useful measure to investors because it is widely used by analysts and regulators to assess the capital position of financial services companies, although this ratio may not be comparable to similarly titled measures reported by other companies. The reconciliation of our Basel III Tier 1 common ratio, calculated on a fully phased-in basis, to the comparable GAAP component is included in the detailed financial tables included in Exhibit 99.2.

We also present a measure we refer to as “tangible common equity” in this Form 8-K and exhibits. Tangible common equity itself is not a measure presented in accordance with GAAP. We believe tangible common equity is a more meaningful measure to investors of the net asset value of the Company. The reconciliation of tangible common equity, to total equity reported in accordance with GAAP is included in the detailed financial tables included in Exhibit 99.2.

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Form 8-K Synchrony Financial For: Jul 22

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