UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 001-36560 (Commission File Number) SYNCHRONY FINANCIAL | --- | --- | |-------------------------------------------------------------------------------------------- ...

Core Points - Synchrony has made a $100,000 donation to Women in HVACR to support scholarships for women in the HVACR industry as part of its Education as an Equalizer initiative [1][2][3] - The donation will be distributed as $50,000 in 2024 and an additional $50,000 in 2025, building on Synchrony's existing support for WHVACR [2] - The initiative aims to enhance diversity and provide opportunities for women in trade industries, which is believed to enrich the industry and provide a broader range of perspectives [2][3] Company and Industry Overview - Synchrony is a premier consumer financial services company that offers a comprehensive suite of digitally enabled products across various industries, including retail, health, and automotive [5] - The Synchrony Foundation's philanthropic efforts include over $19 million donated to more than 400 charitable organizations in 2023, alongside over 19,200 volunteer hours logged by employees [3] - Women in HVACR is an organization focused on improving the lives of its members through networking, mentoring, and education, aimed at empowering women in the HVACR industry [4]

Core Viewpoint - Synchrony Financial (NYSE: SYF) is positioned as a depositor bank that utilizes its capital to underwrite consumer loans, indicating a focus on consumer finance and lending opportunities [1] Company Overview - Synchrony Financial has been highlighted for its high-yield debt opportunities, suggesting a favorable investment environment for income-focused investors [1] Investment Focus - The analysis emphasizes income investing strategies through various financial instruments such as common shares, preferred shares, or bonds, reflecting a diversified approach to investment [1]

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Core Insights - The article compares Synchrony (SYF) and Brookfield Asset Management (BAM) to determine which stock is more attractive to value investors [1] - SYF has a stronger Zacks Rank of 2 (Buy) compared to BAM's Zacks Rank of 3 (Hold), indicating a more favorable earnings outlook for SYF [1] Valuation Metrics - SYF has a forward P/E ratio of 9.26, significantly lower than BAM's forward P/E of 36, suggesting SYF is undervalued [2] - The PEG ratio for SYF is 1.26, while BAM's PEG ratio is 2.47, indicating SYF's expected earnings growth is more favorable relative to its valuation [2] - SYF's P/B ratio stands at 1.51, compared to BAM's P/B of 7.02, further highlighting SYF's relative undervaluation [2] Value Grades - SYF has a Value grade of A, while BAM has a Value grade of D, reinforcing the conclusion that SYF is the superior value option at this time [3]

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When I wrote about Synchrony Financial (NYSE: SYF ) last quarter , the shares had been on a big run, peaking above the rare $50 level only seen in I retired early after 22 years in the energy industry with roles in engineering, planning, and financial analysis. I have managed my own portfolio since 1998 and have met my goal to match the S+P 500 return over the long term with lower volatility and higher income. I mostly write on positions I already hold or am considering changing. I prefer to hold positions ...

Synchrony Financial (SYF) reported third-quarter 2024 adjusted earnings per share (EPS) of $1.94, which comfortably beat the Zacks Consensus Estimate of $1.77. The bottom line also increased from $1.48 per share a year ago. Net interest income improved 5.7% year over year to $4.6 billion in the third quarter. Also, it beat the consensus mark by 2.1%. The strong quarterly results were supported by increased interest and fees on loans and an expanding loan receivables portfolio. While expenses did increase, t ...

Financial Data and Key Metrics Changes - Synchrony reported net earnings of $789 million, or $1.94 per diluted share, with a return on average assets of 2.6% and a return on tangible common equity of 24.3% [5][19] - Net revenue grew 10% to $3.8 billion, driven by higher interest and fees, lower RSA, and increased other income [17] - Provision for credit losses increased to $1.6 billion, reflecting higher net charge-offs and a reserve build [18] Business Line Data and Key Metrics Changes - The company added 4.7 million new accounts and generated $45 billion in purchase volume, although growth was impacted by a modest pullback in consumer spending [6] - Average active accounts remained stable year-over-year, while ending receivables grew by 4% [7] - Dual and co-branded cards accounted for 43% of total purchase volume, decreasing by 2% due to selective consumer spending [8] Market Data and Key Metrics Changes - Platform purchase volume growth ranged from down 3% to down 7% year-over-year, reflecting lower spend per account [7] - Non-prime customers reduced their average transaction values by about 5% year-over-year, while prime transaction values moderated by 3% [9] - The 30-plus delinquency rate was 4.78%, up from 4.40% the previous year, and the net charge-off rate was 6.06%, compared to 4.60% in the prior year [19][20] Company Strategy and Development Direction - Synchrony is focused on delivering financial solutions with compelling value propositions and broad utility, enhancing customer loyalty and driving risk-adjusted returns [11][30] - The company added or renewed over 15 partners, including Dick's Sporting Goods and Gibson, to expand its strategic partnerships [12][13] - Synchrony is adapting to consumer behavior changes and managing credit actions to strengthen its portfolio for long-term growth [20][24] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are making healthy spending decisions aligned with their priorities and budgets, despite inflationary pressures [11] - The company expects low single-digit declines in purchase volume for the fourth quarter, with payment rates moderating [26] - Synchrony anticipates delivering fully diluted earnings per share between $8.45 and $8.55 for the full year 2024, reflecting strong core business performance [28] Other Important Information - Total liquid assets and undrawn credit facilities were $22.4 billion, representing 18.8% of total assets [22] - The company returned $399 million to shareholders during the third quarter, consisting of share repurchases and dividends [23] - Synchrony is planning for the potential implementation of the late fee rule, with ongoing assessments of its impact on business operations [57][59] Q&A Session Summary Question: Can you unpack the NII guide for us? - Management explained that the NII for Q4 is expected to be impacted by higher reversals and lower late fee income, which will offset interest income benefits [32] Question: Do you expect losses to follow seasonality? - Management indicated that delinquency trends are stable and that they expect to return to a normalized level of losses over time [36] Question: Can you quantify the components of the loan yield increase? - Management refrained from breaking out individual components but confirmed that the benefits from PPPCs are reflected in the interest yield line [38] Question: How has credit performance evolved relative to expectations? - Management noted that actions taken earlier in the year were to protect against potential deterioration, and current performance is in line with expectations [40] Question: What is the outlook for the reserve rate trend line? - Management expects the reserve rate at year-end to be in line with the previous year, with a gradual return to normalized levels as delinquency rates stabilize [54] Question: What is the plan if the late fee rule does not go into effect? - Management stated that they are planning as if the late fee rule will be implemented and have not considered rolling back any changes made [59]

3Q'24 FINANCIAL RESULTS October 16, 2024 Disclaimers Cautionary Statement Regarding Forward-Looking Statements The following slides are part of a presentation by Synchrony Financial in connection with reporting quarterly financial results and should be read in conjunction with 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 earn ...