Form 8-K Synchrony Financial For: Oct 21

October 21, 2016 6:30 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

October 21, 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 October 21, 2016, Synchrony Financial (the “Company”) issued a press release setting forth the Company’s third 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 October 21, 2016, issued by Synchrony Financial
99.2		Financial Data Supplement of the Company for the quarter ended September 30, 2016
99.3		Financial Results Presentation of the Company for the quarter ended September 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: October 21, 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 October 21, 2016, issued by Synchrony Financial
99.2		Financial Data Supplement of the Company for the quarter ended September 30, 2016
99.3		Financial Results Presentation of the Company for the quarter ended September 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: October 21, 2016

Synchrony Financial Reports Third Quarter Net Earnings of $604 Million or $0.73 Per Diluted Share

STAMFORD, Conn. – Synchrony Financial (NYSE: SYF) today announced third quarter 2016 net earnings of $604 million, or $0.73 per diluted share. Highlights for the quarter included:


•	Net interest income increased 12% from the third quarter of 2015 to $3.5 billion


•	Loan receivables grew $7 billion, or 11%, from the third quarter of 2015 to $71 billion


•	Purchase volume increased 8% from the third quarter of 2015


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


•	Renewed key relationships – TJX Companies, hhgregg, Nationwide Marketing Group and American Dental Association


•	Signed new partnerships with Nissan and At Home


•	Launched The Container Store and Google Store programs


•	Commenced quarterly common stock dividend payment of $0.13 per share and repurchased $238 million of Synchrony Financial common stock

“Broad-based growth across our sales platforms generated double-digit loan receivables and net interest income growth and strong purchase volume growth this quarter. Organic growth is an important business driver for us and we are pleased to have recently renewed several key relationships. We also signed new partnerships and launched new programs. Strong deposit growth continued this quarter as we remain focused on this important source of funding to support our business,” said Margaret Keane, President and Chief Executive Officer of Synchrony Financial. “We are pleased to have initiated our quarterly dividend and share repurchase program during the quarter. We are focusing resources on driving strong organic growth and pursuing new profitable partnership opportunities, while also returning capital to shareholders through dividends and share repurchases—a testament to the strength of our business model and strategic focus.”

Business and Financial Highlights for the Third Quarter of 2016

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

Earnings


•	Net interest income increased $378 million, or 12%, to $3.5 billion, primarily driven by strong loan receivables growth. Net interest income after retailer share arrangements increased 14%.


•	Provision for loan losses increased $284 million to $986 million due to higher loan loss reserve build and loan receivables growth.


•	Other income was unchanged at $84 million primarily due to higher interchange income offset by higher loyalty program expense.


•	Other expense increased $16 million to $859 million, primarily driven by business growth.


•	Net earnings totaled $604 million compared to $574 million in the third quarter of 2015.

Balance Sheet


•	Period-end loan receivables growth remained strong at 11%, primarily driven by purchase volume growth of 8% and average active account growth of 7%.


•	Deposits grew to $50 billion, up $9 billion, or 23%, and comprised 71% of funding compared to 63% last year.


•	The Company’s balance sheet remained strong with total liquidity (liquid assets and undrawn credit facilities) of $24 billion, or 27% of total assets.


•	The estimated Common Equity Tier 1 ratio under Basel III subject to transition provisions was 18.2% and the estimated fully phased-in Common Equity Tier 1 ratio under Basel III was 17.9%.

Key Financial Metrics


•	Return on assets was 2.8% and return on equity was 17.4%.


•	Net interest margin increased 30 basis points to 16.27%.


•	Efficiency ratio was 30.6%, a 362 basis point improvement from the third 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 4.26% compared to 4.02% last year.


•	Net charge-offs as a percentage of total average loan receivables were 4.38% compared to 4.02% last year.


•	The allowance for loan losses as a percentage of total period-end loan receivables was 5.82% compared to 5.31% last year.

Sales Platforms


•	Retail Card interest and fees on loans increased 11%, driven primarily by purchase volume growth of 7% and period-end loan receivables growth of 11%. Average active account growth was 6%. Loan receivables growth was broad-based across partner programs.


•	Payment Solutions interest and fees on loans increased 14%, driven primarily by purchase volume growth of 14% and period-end loan receivables growth of 14%. Average active account growth was 13%. Loan receivables growth was led by the home furnishings, automotive, and power product categories.


•	CareCredit 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 8%. 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, and the Company’s forthcoming Quarterly Report on Form 10-Q for the quarter ended September 30, 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, October 21, 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 32016#, and can be accessed beginning approximately two hours after the event through November 4, 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 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																				Nine Months Ended
	Sep 30, 2016			Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			3Q'16 vs. 3Q'15					Sep 30, 2016			Sep 30, 2015			YTD'16 vs. YTD'15
EARNINGS
Net interest income	$	3,481		$	3,212		$	3,209		$	3,208		$	3,103		$	378		12.2	%	$	9,902		$	8,885		$	1,017		11.4	%
Retailer share arrangements	(757		)	(664		)	(670		)	(734		)	(723		)	(34		)	4.7	%	(2,091		)	(2,004		)	(87		)	4.3	%
Net interest income, after retailer share arrangements	2,724			2,548			2,539			2,474			2,380			344			14.5	%	7,811			6,881			930			13.5	%
Provision for loan losses	986			1,021			903			823			702			284			40.5	%	2,910			2,129			781			36.7	%
Net interest income, after retailer share arrangements and provision for loan losses	1,738			1,527			1,636			1,651			1,678			60			3.6	%	4,901			4,752			149			3.1	%
Other income	84			83			92			87			84			—			—	%	259			305			(46		)	(15.1	)%
Other expense	859			839			800			870			843			16			1.9	%	2,498			2,394			104			4.3	%
Earnings before provision for income taxes	963			771			928			868			919			44			4.8	%	2,662			2,663			(1		)	0.0	%
Provision for income taxes	359			282			346			321			345			14			4.1	%	987			996			(9		)	(0.9	)%
Net earnings	$	604		$	489		$	582		$	547		$	574		$	30		5.2	%	$	1,675		$	1,667		$	8		0.5	%
Net earnings attributable to common stockholders	$	604		$	489		$	582		$	547		$	574		$	30		5.2	%	$	1,675		$	1,667		$	8		0.5	%

COMMON SHARE STATISTICS
Basic EPS	$	0.73		$	0.59		$	0.70		$	0.66		$	0.69		$	0.04		5.8	%	$	2.01		$	2.00		$	0.01		0.5	%
Diluted EPS	$	0.73		$	0.58		$	0.70		$	0.65		$	0.69		$	0.04		5.8	%	$	2.01		$	2.00		$	0.01		0.5	%
Dividend declared per share	$	0.13		$	—		$	—		$	—		$	—		$	0.13		NM		$	0.13		$	—		$	0.13		NM
Common stock price	$	28.00		$	25.28		$	28.66		$	30.41		$	31.30		$	(3.30	)	(10.5	)%	$	28.00		$	31.30		$	(3.30	)	(10.5	)%
Book value per share	$	16.94		$	16.45		$	15.84		$	15.12		$	14.58		$	2.36		16.2	%	$	16.94		$	14.58		$	2.36		16.2	%
Tangible common equity per share⁽¹⁾	$	14.90		$	14.46		$	13.86		$	13.14		$	12.67		$	2.23		17.6	%	$	14.90		$	12.67		$	2.23		17.6	%

Beginning common shares outstanding	833.9			833.8			833.8			833.8			833.8			0.1			0.0	%	833.8			833.8			—			—	%
Issuance of common shares	—			—			—			—			—			—			—	%	—			—			—			—	%
Stock-based compensation	0.1			0.1			—			—			—			0.1			NM		0.2			—			0.2			NM
Shares repurchased	(8.5		)	—			—			—			—			(8.5		)	NM		(8.5		)	—			(8.5		)	NM
Ending common shares outstanding	825.5			833.9			833.8			833.8			833.8			(8.3		)	(1.0	)%	825.5			833.8			(8.3		)	(1.0	)%

Weighted average common shares outstanding	828.4			833.9			833.8			833.8			833.8			(5.4		)	(0.6	)%	832.1			833.8			(1.7		)	(0.2	)%
Weighted average common shares outstanding (fully diluted)	830.6			836.2			835.5			835.8			835.8			(5.2		)	(0.6	)%	834.1			835.4			(1.3		)	(0.2	)%

(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																				Nine Months Ended
	Sep 30, 2016			Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			3Q'16 vs. 3Q'15					Sep 30, 2016			Sep 30, 2015			YTD'16 vs. YTD'15
PERFORMANCE METRICS
Return on assets⁽²⁾	2.8		%	2.4		%	2.8		%	2.7		%	2.9		%				(0.1	)%	2.7		%	3.0		%				(0.3	)%
Return on equity⁽³⁾	17.4		%	14.6		%	18.1		%	17.5		%	19.2		%				(1.8	)%	16.7		%	19.7		%				(3.0	)%
Return on tangible common equity⁽⁴⁾	19.8		%	16.6		%	20.8		%	20.1		%	22.0		%				(2.2	)%	19.1		%	22.7		%				(3.6	)%
Net interest margin⁽⁵⁾	16.27		%	15.86		%	15.76		%	15.73		%	15.97		%				0.30	%	15.94		%	15.81		%				0.13	%
Efficiency ratio⁽⁶⁾	30.6		%	31.9		%	30.4		%	34.0		%	34.2		%				(3.6	)%	31.0		%	33.3		%				(2.3	)%
Other expense as a % of average loan receivables, including held for sale	4.92		%	5.04		%	4.82		%	5.28		%	5.35		%				(0.43	)%	4.92		%	5.25		%				(0.33	)%
Effective income tax rate	37.3		%	36.6		%	37.3		%	37.0		%	37.5		%				(0.2	)%	37.1		%	37.4		%				(0.3	)%

CREDIT QUALITY METRICS
Net charge-offs as a % of average loan receivables, including held for sale	4.38		%	4.49		%	4.70		%	4.23		%	4.02		%				0.36	%	4.51		%	4.37		%				0.14	%
30+ days past due as a % of period-end loan receivables⁽⁷⁾	4.26		%	3.79		%	3.85		%	4.06		%	4.02		%				0.24	%	4.26		%	4.02		%				0.24	%
90+ days past due as a % of period-end loan receivables⁽⁷⁾	1.89		%	1.67		%	1.84		%	1.86		%	1.73		%				0.16	%	1.89		%	1.73		%				0.16	%
Net charge-offs	$	765		$	747		$	780		$	697		$	633		$	132		20.9	%	$	2,292		$	1,994		$	298		14.9	%
Loan receivables delinquent over 30 days⁽⁷⁾	$	3,008		$	2,585		$	2,538		$	2,772		$	2,553		$	455		17.8	%	$	3,008		$	2,553		$	455		17.8	%
Loan receivables delinquent over 90 days⁽⁷⁾	$	1,334		$	1,143		$	1,212		$	1,273		$	1,102		$	232		21.1	%	$	1,334		$	1,102		$	232		21.1	%

Allowance for loan losses (period-end)	$	4,115		$	3,894		$	3,620		$	3,497		$	3,371		$	744		22.1	%	$	4,115		$	3,371		$	744		22.1	%
Allowance coverage ratio⁽⁸⁾	5.82		%	5.70		%	5.50		%	5.12		%	5.31		%				0.51	%	5.82		%	5.31		%				0.51	%

BUSINESS METRICS
Purchase volume⁽⁹⁾	$	31,615		$	31,507		$	26,977		$	32,460		$	29,206		$	2,409		8.2	%	$	90,099		$	81,155		$	8,944		11.0	%
Period-end loan receivables	$	70,644		$	68,282		$	65,849		$	68,290		$	63,520		$	7,124		11.2	%	$	70,644		$	63,520		$	7,124		11.2	%
Credit cards	$	67,858		$	65,511		$	63,309		$	65,773		$	60,920		$	6,938		11.4	%	$	67,858		$	60,920		$	6,938		11.4	%
Consumer installment loans	$	1,361		$	1,293		$	1,184		$	1,154		$	1,171		$	190		16.2	%	$	1,361		$	1,171		$	190		16.2	%
Commercial credit products	$	1,385		$	1,389		$	1,318		$	1,323		$	1,380		$	5		0.4	%	$	1,385		$	1,380		$	5		0.4	%
Other	$	40		$	89		$	38		$	40		$	49		$	(9	)	(18.4	)%	$	40		$	49		$	(9	)	(18.4	)%
Average loan receivables, including held for sale	$	69,525		$	66,943		$	66,705		$	65,406		$	62,504		$	7,021		11.2	%	$	67,856		$	60,946		$	6,910		11.3	%
Period-end active accounts (in thousands)⁽¹⁰⁾	66,781			66,491			64,689			68,314			62,831			3,950			6.3	%	66,781			62,831			3,950			6.3	%
Average active accounts (in thousands)⁽¹⁰⁾	66,639			65,531			66,134			64,892			62,247			4,392			7.1	%	66,204			61,762			4,442			7.2	%

LIQUIDITY
Liquid assets
Cash and equivalents	$	13,588		$	11,787		$	12,500		$	12,325		$	12,271		$	1,317		10.7	%	$	13,588		$	12,271		$	1,317		10.7	%
Total liquid assets	$	16,362		$	13,956		$	14,915		$	14,836		$	15,305		$	1,057		6.9	%	$	16,362		$	15,305		$	1,057		6.9	%
Undrawn facilities
Undrawn facilities	$	7,150		$	7,025		$	7,325		$	6,075		$	6,550		$	600		9.2	%	$	7,150		$	6,550		$	600		9.2	%
Total liquid assets and undrawn facilities	$	23,512		$	20,981		$	22,240		$	20,911		$	21,855		$	1,657		7.6	%	$	23,512		$	21,855		$	1,657		7.6	%
Liquid assets % of total assets	18.77		%	16.94		%	18.27		%	17.66		%	19.30		%				(0.53	)%	18.77		%	19.30		%				(0.53	)%
Liquid assets including undrawn facilities % of total assets	26.98		%	25.47		%	27.24		%	24.90		%	27.56		%				(0.58	)%	26.98		%	27.56		%				(0.58	)%

(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																				Nine Months Ended
	Sep 30, 2016			Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			3Q'16 vs. 3Q'15					Sep 30, 2016			Sep 30, 2015			YTD'16 vs. YTD'15
Interest income:
Interest and fees on loans	$	3,771		$	3,494		$	3,498		$	3,494		$	3,379		$	392		11.6	%	$	10,763		$	9,685		$	1,078		11.1	%
Interest on investment securities	25			21			22			15			13			12			92.3	%	68			34			34			100.0	%
Total interest income	3,796			3,515			3,520			3,509			3,392			404			11.9	%	10,831			9,719			1,112			11.4	%

Interest expense:
Interest on deposits	188			179			172			165			159			29			18.2	%	539			442			97			21.9	%
Interest on borrowings of consolidated securitization entities	63			59			58			56			54			9			16.7	%	180			159			21			13.2	%
Interest on third-party debt	64			65			81			80			76			(12		)	(15.8	)%	210			229			(19		)	(8.3	)%
Interest on related party debt	—			—			—			—			—			—			—	%	—			4			(4		)	(100.0	)%
Total interest expense	315			303			311			301			289			26			9.0	%	929			834			95			11.4	%

Net interest income	3,481			3,212			3,209			3,208			3,103			378			12.2	%	9,902			8,885			1,017			11.4	%

Retailer share arrangements	(757		)	(664		)	(670		)	(734		)	(723		)	(34		)	4.7	%	(2,091		)	(2,004		)	(87		)	4.3	%
Net interest income, after retailer share arrangements	2,724			2,548			2,539			2,474			2,380			344			14.5	%	7,811			6,881			930			13.5	%

Provision for loan losses	986			1,021			903			823			702			284			40.5	%	2,910			2,129			781			36.7	%
Net interest income, after retailer share arrangements and provision for loan losses	1,738			1,527			1,636			1,651			1,678			60			3.6	%	4,901			4,752			149			3.1	%

Other income:
Interchange revenue	154			151			130			147			135			19			14.1	%	435			358			77			21.5	%
Debt cancellation fees	67			63			64			62			61			6			9.8	%	194			187			7			3.7	%
Loyalty programs	(145		)	(135		)	(110		)	(125		)	(122		)	(23		)	18.9	%	(390		)	(294		)	(96		)	32.7	%
Other	8			4			8			3			10			(2		)	(20.0	)%	20			54			(34		)	(63.0	)%
Total other income	84			83			92			87			84			—			—	%	259			305			(46		)	(15.1	)%

Other expense:
Employee costs	311			301			280			285			268			43			16.0	%	892			757			135			17.8	%
Professional fees	174			154			146			165			162			12			7.4	%	474			480			(6		)	(1.3	)%
Marketing and business development	92			107			94			128			115			(23		)	(20.0	)%	293			305			(12		)	(3.9	)%
Information processing	87			81			82			83			77			10			13.0	%	250			214			36			16.8	%
Other	195			196			198			209			221			(26		)	(11.8	)%	589			638			(49		)	(7.7	)%
Total other expense	859			839			800			870			843			16			1.9	%	2,498			2,394			104			4.3	%

Earnings before provision for income taxes	963			771			928			868			919			44			4.8	%	2,662			2,663			(1		)	0.0	%
Provision for income taxes	359			282			346			321			345			14			4.1	%	987			996			(9		)	(0.9	)%
Net earnings attributable to common stockholders	$	604		$	489		$	582		$	547		$	574		$	30		5.2	%	$	1,675		$	1,667		$	8		0.5	%



SYNCHRONY FINANCIAL
STATEMENTS OF FINANCIAL POSITION⁽¹⁾
(unaudited, $ in millions)
	Quarter Ended
	Sep 30, 2016			Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Sep 30, 2016 vs. Sep 30, 2015
Assets
Cash and equivalents	$	13,588		$	11,787		$	12,500		$	12,325		$	12,271		$	1,317		10.7	%
Investment securities	3,356			2,723			2,949			3,142			3,596			(240		)	(6.7	)%
Loan receivables:
Unsecuritized loans held for investment	47,517			44,854			41,730			42,826			38,325			9,192			24.0	%
Restricted loans of consolidated securitization entities	23,127			23,428			24,119			25,464			25,195			(2,068		)	(8.2	)%
Total loan receivables	70,644			68,282			65,849			68,290			63,520			7,124			11.2	%
Less: Allowance for loan losses	(4,115		)	(3,894		)	(3,620		)	(3,497		)	(3,371		)	(744		)	22.1	%
Loan receivables, net	66,529			64,388			62,229			64,793			60,149			6,380			10.6	%
Goodwill	949			949			949			949			949			—			—	%
Intangible assets, net	733			704			702			701			646			87			13.5	%
Other assets	2,004			1,833			2,327			2,080			1,679			325			19.4	%
Total assets	$	87,159		$	82,384		$	81,656		$	83,990		$	79,290		$	7,869		9.9	%

Liabilities and Equity
Deposits:
Interest-bearing deposit accounts	$	49,611		$	46,220		$	44,721		$	43,215		$	40,323		$	9,288		23.0	%
Non-interest-bearing deposit accounts	204			207			256			152			140			64			45.7	%
Total deposits	49,815			46,427			44,977			43,367			40,463			9,352			23.1	%
Borrowings:
Borrowings of consolidated securitization entities	12,411			12,236			12,423			13,589			13,624			(1,213		)	(8.9	)%
Bank term loan	—			—			1,494			4,133			4,630			(4,630		)	(100.0	)%
Senior unsecured notes	7,756			7,059			6,559			6,557			5,560			2,196			39.5	%
Related party debt	—			—			—			—			—			—			—	%
Total borrowings	20,167			19,295			20,476			24,279			23,814			(3,647		)	(15.3	)%
Accrued expenses and other liabilities	3,196			2,947			2,999			3,740			2,855			341			11.9	%
Total liabilities	73,178			68,669			68,452			71,386			67,132			6,046			9.0	%
Equity:
Common stock	1			1			1			1			1			—			—	%
Additional paid-in capital	9,381			9,370			9,359			9,351			9,431			(50		)	(0.5	)%
Retained earnings	4,861			4,364			3,875			3,293			2,746			2,115			77.0	%
Accumulated other comprehensive income:	(24		)	(20		)	(31		)	(41		)	(20		)	(4		)	20.0	%
Treasury Stock	(238		)	—			—			—			—			(238		)	NM
Total equity	13,981			13,715			13,204			12,604			12,158			1,823			15.0	%
Total liabilities and equity	$	87,159		$	82,384		$	81,656		$	83,990		$	79,290		$	7,869		9.9	%

(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
	September 30, 2016							June 30, 2016							March 31, 2016							December 31, 2015							September 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	$	12,574		$	16	0.51	%	$	11,692		$	14	0.48	%	$	12,185		$	16	0.53	%	$	12,070		$	9	0.30	%	$	11,059		$	7	0.25	%
Securities available for sale	3,018			9		1.19	%	2,805			7		1.00	%	2,995			6		0.81	%	3,445			6		0.69	%	3,534			6		0.67	%

Loan receivables:
Credit cards, including held for sale	66,746			3,705		22.08	%	64,269			3,432		21.48	%	64,194			3,436		21.53	%	62,834			3,432		21.67	%	59,890			3,315		21.96	%
Consumer installment loans	1,331			31		9.27	%	1,235			28		9.12	%	1,159			27		9.37	%	1,163			26		8.87	%	1,160			27		9.23	%
Commercial credit products	1,390			35		10.02	%	1,373			33		9.67	%	1,313			35		10.72	%	1,361			36		10.49	%	1,400			36		10.20	%
Other	58			—		—	%	66			1		NM		39			—		—	%	48			—		—	%	54			1		NM
Total loan receivables, including held for sale	69,525			3,771		21.58	%	66,943			3,494		20.99	%	66,705			3,498		21.09	%	65,406			3,494		21.19	%	62,504			3,379		21.45	%
Total interest-earning assets	85,117			3,796		17.74	%	81,440			3,515		17.36	%	81,885			3,520		17.29	%	80,921			3,509		17.20	%	77,097			3,392		17.46	%

Non-interest-earning assets:
Cash and due from banks	641							774							1,277							1,268							1,216
Allowance for loan losses	(3,977		)					(3,729		)					(3,583		)					(3,440		)					(3,341		)
Other assets	3,240							3,209							3,256							3,133							2,869
Total non-interest-earning assets	(96		)					254							950							961							744

Total assets	$	85,021						$	81,694						$	82,835						$	81,882						$	77,841

Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	47,926		$	188	1.56	%	$	45,490		$	179	1.58	%	$	44,101		$	172	1.57	%	$	42,079		$	165	1.56	%	$	39,048		$	159	1.62	%
Borrowings of consolidated securitization entities	12,369			63		2.03	%	12,291			59		1.93	%	12,950			58		1.80	%	13,550			56		1.64	%	13,715			54		1.56	%
Bank term loan⁽²⁾	—			—		—	%	374			7		7.53	%	2,565			24		3.76	%	4,507			28		2.46	%	4,878			29		2.36	%
Senior unsecured notes	7,408			64		3.44	%	6,809			58		3.43	%	6,558			57		3.50	%	5,810			52		3.55	%	5,312			47		3.51	%
Related party debt	—			—		—	%	—			—		—	%	—			—		—	%	—			—		—	%	—			—		—	%
Total interest-bearing liabilities	67,703			315		1.85	%	64,964			303		1.88	%	66,174			311		1.89	%	65,946			301		1.81	%	62,953			289		1.82	%

Non-interest-bearing liabilities
Non-interest-bearing deposit accounts	203							217							226							147							149
Other liabilities	3,314							3,046							3,534							3,396							2,859
Total non-interest-bearing liabilities	3,517							3,263							3,760							3,543							3,008

Total liabilities	71,220							68,227							69,934							69,489							65,961

Equity
Total equity	13,801							13,467							12,901							12,393							11,880

Total liabilities and equity	$	85,021						$	81,694						$	82,835						$	81,882						$	77,841
Net interest income				$	3,481						$	3,212						$	3,209						$	3,208						$	3,103

Interest rate spread⁽³⁾						15.89	%						15.48	%						15.40	%						15.39	%						15.64	%
Net interest margin⁽⁴⁾						16.27	%						15.86	%						15.76	%						15.73	%						15.97	%

(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, and September 30, 2015 were 2.51%, 2.47%, 2.26%, and 2.23%, 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)

	Nine Months Ended September 30, 2016							Nine Months Ended September 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	$	12,172		$	46	0.50	%	$	11,144		$	19	0.23	%
Securities available for sale	2,960			22		0.99	%	3,066			15		0.65	%

Loan receivables:
Credit cards, including held for sale	65,201			10,573		21.66	%	58,442			9,500		21.73	%
Consumer installment loans	1,242			86		9.25	%	1,107			78		9.42	%
Commercial credit products	1,360			103		10.12	%	1,361			106		10.41	%
Other	53			1		NM		36			1		NM
Total loan receivables, including held for sale	67,856			10,763		21.19	%	60,946			9,685		21.25	%
Total interest-earning assets	82,988			10,831		17.43	%	75,156			9,719		17.29	%

Non-interest-earning assets:
Cash and due from banks	942							782
Allowance for loan losses	(3,764		)					(3,304		)
Other assets	3,250							2,759
Total non-interest-earning assets	428							237

Total assets	$	83,416						$	75,393

Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	45,913		$	539	1.57	%	$	36,677		$	442	1.61	%
Borrowings of consolidated securitization entities	12,578			180		1.91	%	13,952			159		1.52	%
Bank term loan⁽²⁾	1,026			31		4.04	%	5,625			108		2.57	%
Senior unsecured notes	6,948			179		3.44	%	4,667			121		3.47	%
Related party debt	—			—		—	%	163			4		3.28	%
Total interest-bearing liabilities	66,465			929		1.87	%	61,084			834		1.83	%

Non-interest-bearing liabilities
Non-interest-bearing deposit accounts	212							153
Other liabilities	3,363							2,846
Total non-interest-bearing liabilities	3,575							2,999

Total liabilities	70,040							64,083

Equity
Total equity	13,376							11,310

Total liabilities and equity	$	83,416						$	75,393
Net interest income				$	9,902						$	8,885

Interest rate spread⁽³⁾						15.56	%						15.46	%
Net interest margin⁽⁴⁾						15.94	%						15.81	%

(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 9 months ended September 30, 2016 and September 30, 2015 were 2.48% and 2.22%, 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
	Sep 30, 2016			Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Sep 30, 2016 vs. Sep 30, 2015
BALANCE SHEET STATISTICS
Total common equity	$	13,981		$	13,715		$	13,204		$	12,604		$	12,158		$	1,823	15.0	%
Total common equity as a % of total assets	16.04		%	16.65		%	16.17		%	15.01		%	15.33		%			0.71	%

Tangible assets	$	85,477		$	80,731		$	80,005		$	82,340		$	77,695		$	7,782	10.0	%
Tangible common equity⁽²⁾	$	12,299		$	12,062		$	11,553		$	10,954		$	10,563		$	1,736	16.4	%
Tangible common equity as a % of tangible assets⁽²⁾	14.39		%	14.94		%	14.44		%	13.30		%	13.60		%			0.79	%
Tangible common equity per share⁽²⁾	$	14.90		$	14.46		$	13.86		$	13.14		$	12.67		$	2.23	17.6	%

REGULATORY CAPITAL RATIOS⁽³⁾
	Basel III Transition
Total risk-based capital ratio⁽⁴⁾	19.5		%	19.8		%	19.4		%	18.1		%	18.8		%
Tier 1 risk-based capital ratio⁽⁵⁾	18.2		%	18.5		%	18.1		%	16.8		%	17.5		%
Tier 1 leverage ratio⁽⁶⁾	15.3		%	15.6		%	14.8		%	14.4		%	14.6		%
Common equity Tier 1 capital ratio⁽⁷⁾	18.2		%	18.5		%	18.1		%	16.8		%	17.5		%

	Basel III Fully Phased-in
Common equity Tier 1 capital ratio⁽⁷⁾	17.9		%	18.0		%	17.5		%	15.9		%	16.7		%

(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 September 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																				Nine Months Ended
	Sep 30, 2016			Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			3Q'16 vs. 3Q'15					Sep 30, 2016			Sep 30, 2015			YTD'16 vs. YTD'15
RETAIL CARD
Purchase volume⁽¹⁾⁽²⁾	$	25,285		$	25,411		$	21,550		$	26,768		$	23,560		$	1,725		7.3	%	$	72,246		$	65,422		$	6,824		10.4	%
Period-end loan receivables	$	48,010		$	46,705		$	45,113		$	47,412		$	43,432		$	4,578		10.5	%	$	48,010		$	43,432		$	4,578		10.5	%
Average loan receivables, including held for sale	$	47,420		$	45,861		$	45,900		$	44,958		$	42,933		$	4,487		10.5	%	$	46,491		$	41,853		$	4,638		11.1	%
Average active accounts (in thousands)⁽²⁾⁽³⁾	52,959			52,314			52,969			52,038			49,953			3,006			6.0	%	52,834			49,671			3,163			6.4	%

Interest and fees on loans⁽²⁾	$	2,790		$	2,585		$	2,614		$	2,594		$	2,508		$	282		11.2	%	$	7,989		$	7,180		$	809		11.3	%
Other income⁽²⁾	$	70		$	69		$	79		$	76		$	70		$	—		—	%	$	218		$	263		$	(45	)	(17.1	)%
Retailer share arrangements⁽²⁾	$	(752	)	$	(656	)	$	(661	)	$	(723	)	$	(708	)	$	(44	)	6.2	%	$	(2,069	)	$	(1,965	)	$	(104	)	5.3	%

PAYMENT SOLUTIONS
Purchase volume⁽¹⁾	$	4,152		$	3,903		$	3,392		$	3,714		$	3,635		$	517		14.2	%	$	11,447		$	9,954		$	1,493		15.0	%
Period-end loan receivables	$	14,798		$	13,997		$	13,420		$	13,543		$	12,933		$	1,865		14.4	%	$	14,798		$	12,933		$	1,865		14.4	%
Average loan receivables	$	14,391		$	13,644		$	13,482		$	13,192		$	12,523		$	1,868		14.9	%	$	13,865		$	12,183		$	1,682		13.8	%
Average active accounts (in thousands)⁽³⁾	8,461			8,153			8,134			7,896			7,468			993			13.3	%	8,261			7,335			926			12.6	%

Interest and fees on loans	$	505		$	467		$	457		$	462		$	442		$	63		14.3	%	$	1,429		$	1,257		$	172		13.7	%
Other income	$	3		$	3		$	4		$	3		$	5		$	(2	)	(40.0	)%	$	10		$	14		$	(4	)	(28.6	)%
Retailer share arrangements	$	(3	)	$	(7	)	$	(7	)	$	(10	)	$	(13	)	$	10		(76.9	)%	$	(17	)	$	(35	)	$	18		(51.4	)%

CARECREDIT
Purchase volume⁽¹⁾	$	2,178		$	2,193		$	2,035		$	1,978		$	2,011		$	167		8.3	%	$	6,406		$	5,779		$	627		10.8	%
Period-end loan receivables	$	7,836		$	7,580		$	7,316		$	7,335		$	7,155		$	681		9.5	%	$	7,836		$	7,155		$	681		9.5	%
Average loan receivables	$	7,714		$	7,438		$	7,323		$	7,256		$	7,048		$	666		9.4	%	$	7,500		$	6,910		$	590		8.5	%
Average active accounts (in thousands)⁽³⁾	5,219			5,064			5,031			4,958			4,826			393			8.1	%	5,109			4,756			353			7.4	%

Interest and fees on loans	$	476		$	442		$	427		$	438		$	429		$	47		11.0	%	$	1,345		$	1,248		$	97		7.8	%
Other income	$	11		$	11		$	9		$	8		$	9		$	2		22.2	%	$	31		$	28		$	3		10.7	%
Retailer share arrangements	$	(2	)	$	(1	)	$	(2	)	$	(1	)	$	(2	)	$	—		—	%	$	(5	)	$	(4	)	$	(1	)	25.0	%

TOTAL SYF
Purchase volume⁽¹⁾⁽²⁾	$	31,615		$	31,507		$	26,977		$	32,460		$	29,206		$	2,409		8.2	%	$	90,099		$	81,155		$	8,944		11.0	%
Period-end loan receivables	$	70,644		$	68,282		$	65,849		$	68,290		$	63,520		$	7,124		11.2	%	$	70,644		$	63,520		$	7,124		11.2	%
Average loan receivables, including held for sale	$	69,525		$	66,943		$	66,705		$	65,406		$	62,504		$	7,021		11.2	%	$	67,856		$	60,946		$	6,910		11.3	%
Average active accounts (in thousands)⁽²⁾⁽³⁾	66,639			65,531			66,134			64,892			62,247			4,392			7.1	%	66,204			61,762			4,442			7.2	%

Interest and fees on loans⁽²⁾	$	3,771		$	3,494		$	3,498		$	3,494		$	3,379		$	392		11.6	%	$	10,763		$	9,685		$	1,078		11.1	%
Other income⁽²⁾	$	84		$	83		$	92		$	87		$	84		$	—		—	%	$	259		$	305		$	(46	)	(15.1	)%
Retailer share arrangements⁽²⁾	$	(757	)	$	(664	)	$	(670	)	$	(734	)	$	(723	)	$	(34	)	4.7	%	$	(2,091	)	$	(2,004	)	$	(87	)	4.3	%

(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
	Sep 30, 2016			Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015
COMMON EQUITY MEASURES
GAAP Total common equity	$	13,981		$	13,715		$	13,204		$	12,604		$	12,158
Less: Goodwill	(949		)	(949		)	(949		)	(949		)	(949		)
Less: Intangible assets, net	(733		)	(704		)	(702		)	(701		)	(646		)
Tangible common equity	$	12,299		$	12,062		$	11,553		$	10,954		$	10,563

Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss)	299			282			281			280			291
Basel III - Common equity Tier 1 (fully phased-in)	$	12,598		$	12,344		$	11,834		$	11,234		$	10,854
Adjustment related to capital components during transition	273			266			265			399			375
Basel III - Common equity Tier 1 (transition)	$	12,871		$	12,610		$	12,099		$	11,633		11,229

RISK-BASED CAPITAL
Common equity Tier 1	$	12,871		$	12,610		$	12,099		$	11,633		$	11,229
Add: Allowance for loan losses includible in risk-based capital	923			890			869			898			833
Risk-based capital	$	13,794		$	13,500		$	12,968		$	12,531		$	12,062

ASSET MEASURES
Total average assets	$	85,021		$	81,694		$	82,835		$	81,882		$	77,841
Adjustments for:
Disallowed goodwill and other disallowed intangible assets, net of related deferred tax liabilities	(1,117		)	(1,113		)	(1,117		)	(991		)	(931		)
Other	—			—			—			—			104
Total assets for leverage purposes	$	83,904		$	80,581		$	81,718		$	80,891		$	77,014

Risk-weighted assets - Basel III (fully phased-in)⁽³⁾	$	70,448		$	68,462		$	67,697		$	70,493		$	65,125
Risk-weighted assets - Basel III (transition)⁽³⁾	$	70,660		$	68,188		$	66,689		69,224			64,090

TANGIBLE COMMON EQUITY PER SHARE
GAAP book value per share	$	16.94		$	16.45		$	15.84		$	15.12		$	14.58
Less: Goodwill	(1.14		)	(1.14		)	(1.14		)	(1.14		)	(1.14		)
Less: Intangible assets, net	(0.90		)	(0.85		)	(0.84		)	(0.84		)	(0.77		)
Tangible common equity per share	$	14.90		$	14.46		$	13.86		$	13.14		$	12.67

(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 September 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.

3Q’16 Financial Results October 21, 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 3Q'16 Highlights Financial highlights • $604 million Net earnings, $0.73 diluted EPS • Purchase volume +8%, Loan receivables +11%, Net interest income +12% • Net charge-offs at 4.38% compared to 4.02% in the prior year  30+ delinquency at 4.26% compared to 4.02% in the prior year • Expenses +2% ... Efficiency ratio 30.6% compared to 34.2% in the prior year • Deposits up $9.3 billion compared to prior year, comprise 71% of funding • Strong capital and liquidity  18.2% CET1 & $16.4 billion liquid assets • Completed quarterly capital return  $0.13 quarterly dividend  $238 million share repurchase (a) (a) CET1 % calculated under the Basel III transitional guidelines Business highlights  Renewed key relationships  Signed new partnerships  Launched new programs

4 Growth Metrics 3Q'15 3Q'16 3Q'15 3Q'16 +8% Purchase volume $ in billions Loan receivables $ in billions Average active accounts in millions Interest and fees on loans $ in millions $29.2 $31.6 $63.5 $70.6 $3,771 $3,379 66.6 62.2 +7% +12% +11% 3Q'15 3Q'16 3Q'15 3Q'16

5 Platform Results Retail Card Loan receivables, $ in billions $43.4 $48.0 3Q'15 3Q'16  Strong receivable growth across partner programs  Interest and fees on loans up 11% driven by receivable growth Payment Solutions Loan receivables, $ in billions $12.9 $14.8 3Q'15 3Q'16  Broad receivable growth led by home furnishings, auto and power  Interest and fees on loans up 14% driven by receivable growth CareCredit Loan receivables, $ in billions $7.2 $7.8 3Q'15 3Q'16  Receivable growth led by dental and veterinary  Interest and fees on loans up 11% driven by receivable growth Purchase volume Accounts $23.6 49.9 $25.2 52.9 +7% +6% $3.6 7.5 $4.2 8.5 +14% +13% $2.0 4.8 $2.2 5.2 +8% +8% Interest and fees on loans $2,508 $2,790 +11% $442 $505 +14% $429 $476 +11% +11% +14% +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 Third quarter 2016 highlights $ in millions, except ratios Total interest income $3,796 $3,392 $404 12% Total interest expense (315) (289) (26) (9)% Net interest income (NII) 3,481 3,103 378 12% Retailer share arrangements (RSA) (757) (723) (34) (5)% NII, after RSA 2,724 2,380 344 14% Provision for loan losses 986 702 (284) (40)% Other income 84 84 - -% Other expense 859 843 (16) (2)% Pre-Tax earnings 963 919 44 5% Provision for income taxes 359 345 (14) (4)% Net earnings $604 $574 $30 5% Return on assets 2.8% 2.9% (0.1)pts. 3Q'16 3Q'15 % $ B/(W) • $604 million Net earnings, 2.8% ROA • Net interest income up 12% driven by growth in loan receivables  Interest and fees on loans up 12% driven by receivable growth  Interest expense increase driven by growth • Provision for loan losses driven by higher reserve build and growth  30+ delinquency 4.26% compared to 4.02% in the prior year  NCO’s 4.38% compared to 4.02% in the prior year • Other expense up 2%  Other expense increase driven by growth partially offset with lower marketing, and EMV costs in prior year which did not repeat

7 Net Interest Income Third quarter 2016 highlights • Net interest income increased 12% compared to prior year driven by growth in receivables  Interest and fees on loans increased 12% compared to prior year driven by loan receivable growth • Net interest margin up 30bps.  Loan receivables mix as a percent of total earning assets increased  Receivable yield 21.58%, up 13bps. versus prior year  Interest expense 1.85%, increased 3bps. reflecting rising benchmark rates Net interest income $ in millions, % of average interest-earning assets 15.97% 16.27% 3Q'15 3Q'16 +12% $3,103 $3,481

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 $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% $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% $3,008 4.26% $765 4.38% 3Q’16 3Q’14 3Q’15 4Q’14 1Q’15 2Q’15 4Q’15 1Q’16 2Q’16 3Q’16 $1,334 1.89% 3Q’16 5.82% $4,115 3Q’14 3Q’15 4Q’14 1Q’15 2Q’15 4Q’15 1Q’16 2Q’16 3Q’16

9 Other expense $ in millions Other Expense Employee costs $268 $311 $43 16% Professional fees 162 174 12 7% Marketing/BD 115 92 (23) (20)% Information processing 77 87 10 13% Other 221 195 (26) (12)% Other expense $843 $859 $16 2% Efficiency 34.2% 30.6% (3.6)pts. $843 (a) “Other Expense” divided by sum of “NII, after RSA” plus “Other income” (1) V$ V% +2 % (a) $859 3Q'15 3Q'16 Third quarter 2016 highlights • Expense increased 2% vs. prior year • Employee costs up $43 million  Driven by employees added for growth and replacement of certain 3rd party and GE services • Professional fees up $12 million  Driven by growth and 3rd party services • Marketing/BD costs down $23 million  Driven by redirecting marketing funds into everyday value props and reduced marketing on Retail Deposits • Information processing up $10 million  Driven by continued IT investments and purchase volume growth • Other down $26 million  Driven by reduction in payments under the GE Transition Service Agreement (TSA) and benefits from the rollout of EMV

10 Funding, Capital and Liquidity (c) Liquid assets $15.3 $16.4 Undrawn credit facilities 6.6 7.1 Total liquidity $21.9 $23.5 % of total assets 27.6% 27.0% Common equity Tier 1 $12.9 $12.6 Risk-weighted assets $70.7 $70.4 Liquidity $ in billions 3Q'16 $23.5 $21.9 3Q'15 Capital ratios 3Q'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 18.2% 17.9% Funding sources $ in billions 3Q'15 3Q'16 Variance Deposits 63% 71% +8pts. Securitization 21% 18% (3)pts. 3rd Party Debt 16% 11% (5)pts. $70.0 Deposits Securitization 3rd Party Debt V$ (a) (b) $40.5 $13.6 $10.2 $49.8 $12.4 $7.8 $64.3 (2.4) (1.2) +9.3

11 3Q'16 Wrap Up • Net earnings of $604 million … $0.73 earnings per diluted share • Broad based growth … Purchase volume +8%, Loan receivables +11%, Net interest income +12% • Renewed key partners … TJX Companies, hhgregg, American Dental Association, and Nationwide Marketing Group • Signed new partnerships with Nissan and At Home • Launched new programs with Container Store and Google • Fast-growing deposit platform … deposits at $50 billion comprising 71% of funding • Strong balance sheet, $16.4 billion of liquid assets and 18.2% CET1 (BIIIT) • Completed quarterly common stock dividend of $0.13 per share and repurchased $238 million of shares in the quarter (a) (a) CET1 % calculated under the Basel III transition guidelines

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13 Appendix

14 Non-GAAP Reconciliation 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 September 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) ....................................................................... $13,981 (949) (733) $12,299 299 $12,598 273 $12,871 $70,448 $70,660 $ in millions at September 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: Oct 21

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