Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 24, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Synchrony Financial | |
Entity Central Index Key | 1,601,712 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 825,465,791 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Interest income: | ||||
Interest and fees on loans (Note 4) | $ 3,771 | $ 3,379 | $ 10,763 | $ 9,685 |
Interest on investment securities | 25 | 13 | 68 | 34 |
Total interest income | 3,796 | 3,392 | 10,831 | 9,719 |
Interest expense: | ||||
Interest on deposits | 188 | 159 | 539 | 442 |
Interest on third-party debt | 64 | 76 | 210 | 229 |
Interest on related party debt | 0 | 0 | 0 | 4 |
Total interest expense | 315 | 289 | 929 | 834 |
Net interest income | 3,481 | 3,103 | 9,902 | 8,885 |
Retailer share arrangements | (757) | (723) | (2,091) | (2,004) |
Net interest income, after retailer share arrangements | 2,724 | 2,380 | 7,811 | 6,881 |
Provision for loan losses (Note 4) | 986 | 702 | 2,910 | 2,129 |
Net interest income, after retailer share arrangements and provision for loan losses | 1,738 | 1,678 | 4,901 | 4,752 |
Other income: | ||||
Interchange revenue | 154 | 135 | 435 | 358 |
Debt cancellation fees | 67 | 61 | 194 | 187 |
Loyalty programs | (145) | (122) | (390) | (294) |
Other | 8 | 10 | 20 | 54 |
Total other income | 84 | 84 | 259 | 305 |
Other expense: | ||||
Employee costs | 311 | 268 | 892 | 757 |
Professional fees | 174 | 162 | 474 | 480 |
Marketing and business development | 92 | 115 | 293 | 305 |
Information processing | 87 | 77 | 250 | 214 |
Other | 195 | 221 | 589 | 638 |
Total other expense | 859 | 843 | 2,498 | 2,394 |
Earnings before provision for income taxes | 963 | 919 | 2,662 | 2,663 |
Provision for income taxes (Note 12) | 359 | 345 | 987 | 996 |
Net earnings | $ 604 | $ 574 | $ 1,675 | $ 1,667 |
Earnings per share | ||||
Basic (in usd per share) | $ 0.73 | $ 0.69 | $ 2.01 | $ 2 |
Diluted (in usd per share) | 0.73 | 0.69 | 2.01 | 2 |
Common Stock, Dividends, Per Share, Declared | $ 0.13 | $ 0 | $ 0.13 | $ 0 |
Variable Interest Entity, Primary Beneficiary | ||||
Interest expense: | ||||
Interest on borrowings of consolidated securitization entities | $ 63 | $ 54 | $ 180 | $ 159 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 604 | $ 574 | $ 1,675 | $ 1,667 |
Other comprehensive income (loss) | ||||
Investment securities | 0 | 2 | 17 | (1) |
Currency translation adjustments | (4) | (5) | 2 | (10) |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax, Portion Attributable to Parent | 0 | 0 | (2) | 1 |
Other comprehensive income (loss) | (4) | (3) | 17 | (10) |
Comprehensive income | $ 600 | $ 571 | $ 1,692 | $ 1,657 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Financial Position - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Assets | |||
Cash and equivalents | $ 13,588 | $ 12,325 | |
Investment securities (Note 3) | 3,356 | 3,142 | |
Loan receivables: (Notes 4 and 5) | [1],[2] | 70,644 | 68,290 |
Less: Allowance for loan losses | (4,115) | (3,497) | |
Loan receivables, net | 66,529 | 64,793 | |
Goodwill | 949 | 949 | |
Intangible assets, net (Note 6) | 733 | 701 | |
Other assets(a) | [3] | 2,004 | 2,080 |
Total assets | 87,159 | 83,990 | |
Deposits: (Note 7) | |||
Interest-bearing deposit accounts | 49,611 | 43,215 | |
Non-interest-bearing deposit accounts | 204 | 152 | |
Total deposits | 49,815 | 43,367 | |
Borrowings: (Notes 5 and 8) | |||
Bank term loan | 0 | 4,133 | |
Senior unsecured notes | 7,756 | 6,557 | |
Long-term Debt | [4] | 20,167 | 24,279 |
Accrued expenses and other liabilities | 3,196 | 3,740 | |
Total liabilities | 73,178 | 71,386 | |
Equity: | |||
Common Stock, par share value $0.001 per share; 4,000,000,000 shares authorized, 833,984,684 and 833,828,340 shares issued at September 30, 2016 and December 31, 2015, respectively, 825,464,400 and 833,828,340 shares outstanding at September 30, 2016 and December 31, 2015, respectively | 1 | 1 | |
Additional paid-in capital | 9,381 | 9,351 | |
Treasury Stock, Value | (238) | 0 | |
Retained earnings | 4,861 | 3,293 | |
Accumulated other comprehensive income (loss): | |||
Investment securities | 7 | (10) | |
Currency translation adjustments | (17) | (19) | |
Other | (14) | (12) | |
Total equity | 13,981 | 12,604 | |
Total liabilities and equity | 87,159 | 83,990 | |
Restricted cash and cash equivalents | 379 | 391 | |
Restricted loans of consolidated securitization entities | |||
Assets | |||
Loan receivables: (Notes 4 and 5) | 23,127 | 25,464 | |
Borrowings: (Notes 5 and 8) | |||
Borrowings of consolidated securitization entities | [4] | 12,411 | 13,589 |
Unsecuritized Loans Held for Investment [Member] | |||
Assets | |||
Loan receivables: (Notes 4 and 5) | $ 47,517 | $ 42,826 | |
[1] | At September 30, 2016 and December 31, 2015, loan receivables included deferred expense, net of deferred income, of $72 million and $63 million, respectively. | ||
[2] | Total loan receivables include $23.1 billion and $25.5 billion of restricted loans of consolidated securitization entities at September 30, 2016 and December 31, 2015, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. | ||
[3] | Other assets include restricted cash and equivalents of $379 million and $391 million at September 30, 2016 and December 31, 2015, respectively. | ||
[4] | The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance cost. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Financial Position Statement (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock par value (in usd per share) | $ 0.001 | $ 0.001 |
Common Stock Shares Authorized | 4,000,000,000 | 4,000,000,000 |
Common Stock Shares Issued | 833,984,684 | 833,828,340 |
Common Stock Shares Outstanding | 825,464,400 | 833,828,340 |
Treasury Stock, Shares | 8,520,284 | 0 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Balance (in shares) at Dec. 31, 2014 | 833,765,000 | |||||
Balance at Dec. 31, 2014 | $ 10,478 | $ 1 | $ 9,408 | $ 1,079 | $ (10) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 1,667 | 1,667 | ||||
Other comprehensive income | (10) | (10) | ||||
Other | (1) | (1) | ||||
Balance (in shares) at Sep. 30, 2015 | 833,824,000 | |||||
Balance at Sep. 30, 2015 | 12,158 | $ 1 | 9,431 | 2,746 | (20) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 59,000 | |||||
Adjustments to Additional Paid in Capital, Share-based Compensation and Exercise of Stock Options | 24 | 24 | ||||
Purchases of treasury stock | $ (238) | (238) | ||||
Balance (in shares) at Dec. 31, 2015 | 833,828,340 | 833,828,000 | ||||
Balance at Dec. 31, 2015 | $ 12,604 | $ 1 | 9,351 | 3,293 | (41) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 1,675 | 1,675 | ||||
Other comprehensive income | $ 17 | 17 | ||||
Balance (in shares) at Sep. 30, 2016 | 833,984,684 | 833,985,000 | ||||
Balance at Sep. 30, 2016 | $ 13,981 | $ 1 | 9,381 | 4,861 | $ (24) | $ (238) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 157,000 | |||||
Adjustments to Additional Paid in Capital, Share-based Compensation and Exercise of Stock Options | 30 | $ 30 | ||||
Dividends, Common Stock, Cash | $ (107) | $ (107) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows - operating activities | ||
Net earnings | $ 1,675 | $ 1,667 |
Adjustments to reconcile net earnings to cash provided from operating activities | ||
Provision for loan losses | 2,910 | 2,129 |
Deferred income taxes | 47 | (32) |
Depreciation and amortization | 164 | 127 |
(Increase) decrease in interest and fees receivable | (105) | (18) |
(Increase) decrease in other assets | 29 | 8 |
Increase (decrease) in accrued expenses and other liabilities | (321) | 125 |
All other operating activities | 388 | 289 |
Cash provided from (used for) operating activities | 4,787 | 4,295 |
Cash flows - investing activities | ||
Maturity and redemption of investment securities | 1,038 | 2,747 |
Purchases of investment securities | (1,241) | (4,747) |
Acquisition of loan receivables | (54) | (1,056) |
Net (increase) decrease in restricted cash and equivalents | 12 | 787 |
Proceeds from sale of loan receivables | 0 | 392 |
Net (increase) decrease in loan receivables | (4,773) | (3,433) |
All other investing activities | (133) | (300) |
Cash provided from (used for) investing activities | (5,151) | (5,610) |
Borrowings of consolidated securitization entities | ||
Proceeds from issuance of securitized debt | 3,766 | 2,793 |
Maturities and repayment of securitized debt | (4,949) | (4,132) |
Third-party debt | ||
Proceeds from issuance of third-party debt | 1,193 | 1,983 |
Maturities and repayment of third-party debt | (4,151) | (3,594) |
Related party debt | ||
Maturities and repayment of related party debt | 0 | (655) |
Net increase (decrease) in deposits | 6,119 | 5,364 |
Purchase of treasury stock | (238) | 0 |
Dividends paid on common stock | (107) | 0 |
All other financing activities | (6) | (1) |
Cash provided from (used for) financing activities | 1,627 | 1,758 |
Increase (decrease) in cash and equivalents | 1,263 | 443 |
Cash and equivalents at beginning of period | 12,325 | 11,828 |
Cash and equivalents at end of period | $ 13,588 | $ 12,271 |
Business Description
Business Description | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description | BUSINESS DESCRIPTION Synchrony Financial (the “Company”) provides a range of credit products through programs it has established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers. We offer private label and co-branded Dual Card credit cards, promotional financing and installment lending, loyalty programs and FDIC-insured savings products through Synchrony Bank (the “Bank”). In November 2015, Synchrony Financial became a stand-alone savings and loan holding company following the completion of General Electric Company’s (“GE”) exchange offer, in which GE exchanged shares of GE common stock for all of the shares of our common stock it owned (the “Separation”). References to the “Company”, “we”, “us” and “our” are to Synchrony Financial and its consolidated subsidiaries unless the context otherwise requires. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Preparing financial statements in conformity with U.S. GAAP requires us to make estimates based on assumptions about current, and for some estimates future, economic and market conditions (for example, unemployment, housing, interest rates and market liquidity) which affect reported amounts and related disclosures in our condensed consolidated financial statements. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially affect our results of operations and financial position. Among other effects, such changes could result in incremental losses on loan receivables, future impairments of investment securities, goodwill and intangible assets, increases in reserves for contingencies, establishment of valuation allowances on deferred tax assets and increases in our tax liabilities. We conduct our operations within the United States and Canada. Substantially all of our revenues are from U.S. customers. The operating activities conducted by our non-U.S. affiliates use the local currency as their functional currency. The effects of translating the financial statements of these non-U.S. affiliates to U.S. dollars are included in equity. Asset and liability accounts are translated at year-end exchange rates, while revenues and expenses are translated at average rates for the respective periods. Consolidated Basis of Presentation The Company’s financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all of our subsidiaries – i.e., entities in which we have a controlling financial interest, most often because we hold a majority voting interest. To determine if we hold a controlling financial interest in an entity, we first evaluate if we are required to apply the variable interest entity (“VIE”) model to the entity, otherwise the entity is evaluated under the voting interest model. Where we hold current or potential rights that give us the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (“power”) combined with a variable interest that gives us the right to receive potentially significant benefits or the obligation to absorb potentially significant losses (“significant economics”), we have a controlling financial interest in that VIE. Rights held by others to remove the party with power over the VIE are not considered unless one party can exercise those rights unilaterally. We consolidate certain securitization entities under the VIE model because we have both power and significant economics. See Note 5. Variable Interest Entities . Interim Period Presentation The condensed consolidated financial statements and notes thereto are unaudited. These statements include all adjustments (consisting of normal recurring accruals) that we considered necessary to present a fair statement of our results of operations, financial position and cash flows. The results reported in these condensed consolidated financial statements should not be considered as necessarily indicative of results that may be expected for the entire year. These condensed consolidated financial statements should be read in conjunction with our 2015 annual consolidated and combined financial statements and the related notes in our Annual Report on Form 10-K for the year ended December 31, 2015 (our "2015 Form 10-K"). Summary of Significant Accounting Policies 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, for issuance costs associated with our borrowings and certain brokered deposits, we have revised our presentation of other assets, borrowings and interest-bearing deposit accounts for each period presented to conform to the current period presentation. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies to our 2015 annual consolidated and combined financial statements in our 2015 Form 10-K, for additional information on our significant accounting policies. |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | INVESTMENT SECURITIES All of our investment securities are classified as available-for-sale and are held to meet our liquidity objectives and to comply with the Community Reinvestment Act. Our investment securities consist of the following: September 30, 2016 December 31, 2015 Gross Gross Gross Gross Amortized unrealized unrealized Estimated Amortized unrealized unrealized Estimated ($ in millions) cost gains losses fair value cost gains losses fair value Debt U.S. government and federal agency $ 2,100 $ 1 $ — $ 2,101 $ 2,768 $ — $ (7 ) $ 2,761 State and municipal 47 2 — 49 51 1 (3 ) 49 Residential mortgage-backed (a) 1,183 9 (1 ) 1,191 323 1 (7 ) 317 Equity 15 — — 15 15 — — 15 Total $ 3,345 $ 12 $ (1 ) $ 3,356 $ 3,157 $ 2 $ (17 ) $ 3,142 _______________________ (a) All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At September 30, 2016 and December 31, 2015 , $370 million and $317 million, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. The following table presents the estimated fair values and gross unrealized losses of our available-for-sale investment securities: In loss position for Less than 12 months 12 months or more Gross Gross Estimated unrealized Estimated unrealized ($ in millions) fair value losses fair value losses At September 30, 2016 Debt U.S. government and federal agency $ — $ — $ — $ — State and municipal 1 — 5 — Residential mortgage-backed 114 — 42 (1 ) Equity 1 — — — Total $ 116 $ — $ 47 $ (1 ) At December 31, 2015 Debt U.S. government and federal agency $ 2,611 $ (7 ) $ — $ — State and municipal 40 (3 ) — — Residential mortgage-backed 175 (3 ) 91 (4 ) Equity 1 — — — Total $ 2,827 $ (13 ) $ 91 $ (4 ) We regularly review investment securities for impairment using both qualitative and quantitative criteria. We presently do not intend to sell our debt securities that are in an unrealized loss position and believe that it is not more likely than not that we will be required to sell these securities before recovery of our amortized cost. There were no other-than-temporary impairments recognized for the three and nine months ended September 30, 2016 and 2015 . Contractual Maturities of Investments in Available-for-Sale Debt Securities (excluding residential mortgage-backed securities) Amortized Estimated At September 30, 2016 ($ in millions) cost fair value Due Within one year $ 2,100 $ 2,101 After one year through five years $ 1 $ 1 After five years through ten years $ 1 $ 1 After ten years $ 45 $ 47 We expect actual maturities to differ from contractual maturities because borrowers have the right to prepay certain obligations. There were no material realized gains or losses recognized for the three and nine months ended September 30, 2016 and 2015 . Although we generally do not have the intent to sell any specific securities held at September 30, 2016 , in the ordinary course of managing our investment securities portfolio, we may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield, liquidity requirements and funding obligations. |
Loan Receivables and Allowance
Loan Receivables and Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Loan Receivables and Allowance for Loan Losses | LOAN RECEIVABLES AND ALLOWANCE FOR LOAN LOSSES ($ in millions) September 30, 2016 December 31, 2015 Credit cards $ 67,858 $ 65,773 Consumer installment loans 1,361 1,154 Commercial credit products 1,385 1,323 Other 40 40 Total loan receivables, before allowance for losses (a)(b) $ 70,644 $ 68,290 _______________________ (a) Total loan receivables include $23.1 billion and $25.5 billion of restricted loans of consolidated securitization entities at September 30, 2016 and December 31, 2015 , respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. (b) At September 30, 2016 and December 31, 2015 , loan receivables included deferred expense, net of deferred income, of $72 million and $63 million , respectively. Allowance for Loan Losses ($ in millions) Balance at Provision charged to operations Gross charge-offs Recoveries Balance at Credit cards $ 3,800 $ 964 $ (919 ) $ 172 $ 4,017 Consumer installment loans 39 11 (11 ) 4 43 Commercial credit products 53 12 (13 ) 2 54 Other 2 (1 ) — — $ 1 Total $ 3,894 $ 986 $ (943 ) $ 178 $ 4,115 ($ in millions) Balance at Provision charged to operations Gross charge-offs Recoveries Balance at September 30, 2015 Credit cards $ 3,229 $ 691 $ (765 ) $ 147 $ 3,302 Consumer installment loans 23 6 (8 ) 2 23 Commercial credit products 49 5 (11 ) 2 45 Other 1 — — — $ 1 Total $ 3,302 $ 702 $ (784 ) $ 151 $ 3,371 ($ in millions) Balance at January 1, 2016 Provision charged to operations Gross charge-offs Recoveries Balance at Credit cards $ 3,420 $ 2,836 $ (2,820 ) $ 581 $ 4,017 Consumer installment loans 26 38 (31 ) 10 43 Commercial credit products 50 36 (39 ) 7 54 Other 1 — — — $ 1 Total $ 3,497 $ 2,910 $ (2,890 ) $ 598 $ 4,115 ($ in millions) Balance at January 1, 2015 Provision charged to operations Gross charge-offs Recoveries Balance at Credit cards $ 3,169 $ 2,083 $ (2,413 ) $ 463 $ 3,302 Consumer installment loans 22 15 (24 ) 10 23 Commercial credit products 45 30 (35 ) 5 45 Other — 1 — — 1 Total $ 3,236 $ 2,129 $ (2,472 ) $ 478 $ 3,371 Delinquent and Non-accrual Loans At September 30, 2016 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing Credit cards $ 1,624 $ 1,315 $ 2,939 $ 1,315 $ — Consumer installment loans 18 3 21 — 3 Commercial credit products 32 16 48 16 — Total delinquent loans $ 1,674 $ 1,334 $ 3,008 $ 1,331 $ 3 Percentage of total loan receivables (a) 2.4 % 1.9 % 4.3 % 1.9 % — % At December 31, 2015 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing Credit cards $ 1,451 $ 1,257 $ 2,708 $ 1,257 $ — Consumer installment loans 16 3 19 — 3 Commercial credit products 32 13 45 13 — Total delinquent loans $ 1,499 $ 1,273 $ 2,772 $ 1,270 $ 3 Percentage of total loan receivables (a) 2.2 % 1.9 % 4.1 % 1.9 % — % ______________________ (a) Percentages are calculated based on period-end balances. Impaired Loans and Troubled Debt Restructurings Most of our non-accrual loan receivables are smaller balance loans evaluated collectively, by portfolio, for impairment and therefore are outside the scope of the disclosure requirements for impaired loans. Accordingly, impaired loans represent restructured smaller balance homogeneous loans meeting the definition of a Troubled Debt Restructuring (“TDR”). We use certain loan modification programs for borrowers experiencing financial difficulties. These loan modification programs include interest rate reductions and payment deferrals in excess of three months, which were not part of the terms of the original contract. We have both internal and external loan modification programs. The internal loan modification programs include both temporary and permanent programs. For our credit card customers, the temporary hardship program primarily consists of a reduced minimum payment and an interest rate reduction, both lasting for a period no longer than 12 months. The permanent workout program involves changing the structure of the loan to a fixed payment loan with a maturity no longer than 60 months and reducing the interest rate on the loan. The permanent program does not normally provide for the forgiveness of unpaid principal but may allow for the reversal of certain unpaid interest or fee assessments. We also make loan modifications for customers who request financial assistance through external sources, such as consumer credit counseling agency programs. These loans typically receive a reduced interest rate but continue to be subject to the original minimum payment terms and do not normally include waiver of unpaid principal, interest or fees. The following table provides information on loans that entered a loan modification program during the periods presented: Three months ended September 30, Nine months ended September 30, ($ in millions) 2016 2015 2016 2015 Credit cards $ 164 $ 135 $ 415 $ 362 Consumer installment loans — — — — Commercial credit products 1 1 2 4 Total $ 165 $ 136 $ 417 $ 366 Our allowance for loan losses on TDRs is generally measured based on the difference between the recorded loan receivable and the present value of the expected future cash flows, discounted at the original effective interest rate of the loan. Interest income from loans accounted for as TDRs is accounted for in the same manner as other accruing loans. The following table provides information about loans classified as TDRs and specific reserves. We do not evaluate credit card loans for impairment on an individual basis but instead estimate an allowance for loan losses on a collective basis. As a result, there are no impaired loans for which there is no allowance. At September 30, 2016 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 810 $ (281 ) $ 529 $ 713 Consumer installment loans — — — — Commercial credit products 6 (3 ) 3 6 Total $ 816 $ (284 ) $ 532 $ 719 At December 31, 2015 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 756 $ (256 ) $ 500 $ 659 Consumer installment loans — — — — Commercial credit products 7 (3 ) 4 6 Total $ 763 $ (259 ) $ 504 $ 665 Financial Effects of TDRs As part of our loan modifications for borrowers experiencing financial difficulty, we may provide multiple concessions to minimize our economic loss and improve long-term loan performance and collectability. The following table presents the types and financial effects of loans modified and accounted for as TDRs during the periods presented: Three months ended September 30, 2016 2015 ($ in millions) Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Credit cards $ 12 $ 45 $ 793 $ 12 $ 38 $ 721 Consumer installment loans — — — — — — Commercial credit products — 1 6 — — 7 Total $ 12 $ 46 $ 799 $ 12 $ 38 $ 728 Nine months ended September 30, 2016 2015 ($ in millions) Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Credit cards $ 36 $ 130 $ 778 $ 37 $ 110 $ 718 Consumer installment loans — — — — — — Commercial credit products — 1 6 — 1 8 Total $ 36 $ 131 $ 784 $ 37 $ 111 $ 726 Payment Defaults The following table presents the type, number and amount of loans accounted for as TDRs that enrolled in a modification plan within the previous 12 months and experienced a payment default during the periods presented. A customer defaults from a modification program after two consecutive missed payments. Three months ended September 30, 2016 2015 ($ in millions) Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Credit cards 14,779 $ 30 12,406 $ 24 Consumer installment loans — — — — Commercial credit products 34 — 49 1 Total 14,813 $ 30 12,455 $ 25 Nine months ended September 30, 2016 2015 ($ in millions) Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Credit cards 29,982 $ 61 24,692 $ 49 Consumer installment loans — — — — Commercial credit products 82 — 91 1 Total 30,064 $ 61 24,783 $ 50 Credit Quality Indicators Our loan receivables portfolio includes both secured and unsecured loans. Secured loan receivables are largely comprised of consumer installment loans secured by equipment. Unsecured loan receivables are largely comprised of our open-ended consumer and commercial revolving credit card loans. As part of our credit risk management activities, on an ongoing basis, we assess overall credit quality by reviewing information related to the performance of a customer’s account with us, as well as information from credit bureaus, such as a Fair Isaac Corporation (“FICO”) or other credit scores, relating to the customer’s broader credit performance. FICO scores are generally obtained at origination of the account and are refreshed, at a minimum quarterly, but could be as often as weekly, to assist in predicting customer behavior. We categorize these credit scores into the following three credit score categories: (i) 661 or higher, which are considered the strongest credits; (ii) 601 to 660, considered moderate credit risk; and (iii) 600 or less, which are considered weaker credits. There are certain customer accounts for which a FICO score is not available where we use alternative sources to assess their credit and predict behavior. The following table provides the most recent FICO scores available for our customers at September 30, 2016 and December 31, 2015 , respectively, as a percentage of each class of loan receivable. The table below excludes 0.8% and 0.9% of our total loan receivables balances at September 30, 2016 and December 31, 2015 , respectively, which represents those customer accounts for which a FICO score is not available. September 30, 2016 December 31, 2015 661 or 601 to 600 or 661 or 601 to 600 or higher 660 less higher 660 less Credit cards 72.8 % 19.8 % 7.4 % 73.0 % 19.8 % 7.2 % Consumer installment loans 78.3 % 16.2 % 5.5 % 77.7 % 16.6 % 5.7 % Commercial credit products 87.0 % 8.5 % 4.5 % 86.8 % 8.7 % 4.5 % Unfunded Lending Commitments We manage the potential risk in credit commitments by limiting the total amount of credit, both by individual customer and in total, by monitoring the size and maturity of our portfolios and by applying the same credit standards for all of our credit products. Unused credit card lines available to our customers totaled approximately $343 billion and $322 billion at September 30, 2016 and December 31, 2015 , respectively. While these amounts represented the total available unused credit card lines, we have not experienced and do not anticipate that all of our customers will access their entire available line at any given point in time. Interest Income by Product The following table provides additional information about our interest and fees on loans from our loan receivables, including held for sale: Three months ended September 30, Nine months ended September 30, ($ in millions) 2016 2015 2016 2015 Credit cards $ 3,705 $ 3,315 $ 10,573 $ 9,500 Consumer installment loans 31 27 86 78 Commercial credit products 35 36 103 106 Other — 1 1 1 Total $ 3,771 $ 3,379 $ 10,763 $ 9,685 |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2016 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES We use VIEs to securitize loans and arrange asset-backed financing in the ordinary course of business. Investors in these entities only have recourse to the assets owned by the entity and not to our general credit. We do not have implicit support arrangements with any VIE and we did not provide non-contractual support for previously transferred loan receivables to any VIE in the three and nine months ended September 30, 2016 and 2015 . Our VIEs are able to accept new loan receivables and arrange new asset-backed financings, consistent with the requirements and limitations on such activities placed on the VIE by existing investors. Once an account has been designated to a VIE, the contractual arrangements we have require all existing and future loans originated under such account to be transferred to the VIE. The amount of loan receivables held by our VIEs in excess of the minimum amount required under the asset-backed financing arrangements with investors may be removed by us under random removal of accounts provisions. All loan receivables held by a VIE are subject to claims of third-party investors. In evaluating whether we have the power to direct the activities of a VIE that most significantly impact its economic performance, we consider the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and our decision-making role, if any, in those activities that significantly determine the entity’s economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important. In determining whether we have the right to receive benefits or the obligation to absorb losses that could potentially be significant to a VIE, we evaluate all of our economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity’s design, including: the entity’s capital structure, contractual rights to earnings or losses, subordination of our interests relative to those of other investors, as well as any other contractual arrangements that might exist that could have the potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of our economic interests is a matter that requires the exercise of professional judgment. We consolidate our VIEs because we have the power to direct the activities that significantly affect the VIEs' economic performance, typically because of our role as either servicer or administrator for the VIEs. The power to direct exists because of our role in the design and conduct of the servicing of the VIEs’ assets as well as directing certain affairs of the VIEs, including determining whether and on what terms debt of the VIEs will be issued. The loan receivables in these entities have risks and characteristics similar to our other financing receivables and were underwritten to the same standard. Accordingly, the performance of these assets has been similar to our other comparable loan receivables; however, the blended performance of the pools of receivables in these entities reflects the eligibility criteria that we apply to determine which receivables are selected for transfer. Contractually, the cash flows from these financing receivables must first be used to pay third-party debt holders, as well as other expenses of the entity. Excess cash flows, if any, are available to us. The creditors of these entities have no claim on our other assets. The table below summarizes the assets and liabilities of our consolidated securitization VIEs described above. ($ in millions) September 30, 2016 December 31, 2015 Assets Loan receivables, net (a) $ 22,041 $ 24,338 Other assets (b) 127 127 Total $ 22,168 $ 24,465 Liabilities Borrowings $ 12,411 $ 13,589 Other liabilities 20 30 Total $ 12,431 $ 13,619 _______________________ (a) Includes $1.1 billion of related allowance for loan losses resulting in gross restricted loans of $23.1 billion and $25.5 billion at September 30, 2016 and December 31, 2015 , respectively. (b) Includes $118 million of segregated funds held by the VIEs at September 30, 2016 and December 31, 2015 , respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Condensed Consolidated Statements of Financial Position. The balances presented above are net of intercompany balances and transactions that are eliminated in our condensed consolidated financial statements. We provide servicing for all of our consolidated VIEs. Collections are required to be placed into segregated accounts owned by each VIE in amounts that meet contractually specified minimum levels. These segregated funds are invested in cash and cash equivalents and are restricted as to their use, principally to pay maturing principal and interest on debt and the related servicing fees. Collections above these minimum levels are remitted to us on a daily basis. Income (principally, interest and fees on loans) earned by our consolidated VIEs was $1.1 billion and $1.2 billion for the three months ended September 30, 2016 and 2015 , respectively. Related expenses consisted primarily of provision for loan losses of $212 million and $191 million for the three months ended September 30, 2016 and 2015 , respectively, and interest expense of $63 million and $54 million for the three months ended September 30, 2016 and 2015 , respectively. Income (principally, interest and fees on loans) earned by our consolidated VIEs was $3.4 billion and $3.7 billion for the nine months ended September 30, 2016 and 2015 , respectively. Related expenses consisted primarily of provision for loan losses of $729 million and $713 million for the nine months ended September 30, 2016 and 2015 , respectively, and interest expense of $180 million and $159 million for the nine months ended September 30, 2016 and 2015 , respectively. These amounts do not include intercompany transactions, principally fees and interest, which are eliminated in our condensed consolidated financial statements. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS September 30, 2016 December 31, 2015 ($ in millions) Weighted average useful life Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Customer-related 9 years $ 1,126 $ (591 ) $ 535 $ 1,045 $ (505 ) $ 540 Capitalized software 5 years 335 (137 ) 198 253 (92 ) 161 Total $ 1,461 $ (728 ) $ 733 $ 1,298 $ (597 ) $ 701 During the nine months ended September 30, 2016 , we recorded additions to intangible assets subject to amortization of $163 million , primarily related to capitalized software expenditures related to the build of our stand-alone information technology infrastructure, as well as customer-related intangible assets. Customer-related intangible assets primarily relate to retail partner contract acquisitions and extensions, as well as purchased credit card relationships. Amortization expense related to retail partner contracts was $26 million and $21 million for the three months ended September 30, 2016 and 2015 , respectively, and $76 million and $63 million for the nine months ended September 30, 2016 and September 30, 2015, respectively and is included as a component of marketing and business development expense in our Condensed Consolidated Statements of Earnings. All other amortization expense was $18 million and $17 million for the three months ended September 30, 2016 and 2015 , respectively, and $55 million and $42 million for the nine months ended September 30, 2016 and 2015, respectively and is included as a component of other expense in our Condensed Consolidated Statements of Earnings. |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2016 | |
Banking and Thrift [Abstract] | |
Deposits | DEPOSITS September 30, 2016 December 31, 2015 ($ in millions) Amount Average rate (a) Amount Average rate (a) Interest-bearing deposits $ 49,611 1.6 % $ 43,215 1.6 % Non-interest-bearing deposits 204 — 152 — Total deposits $ 49,815 $ 43,367 ____________________ (a) Based on interest expense for the nine months ended September 30, 2016 and the year ended December 31, 2015 and average deposits balances. At September 30, 2016 and December 31, 2015 , interest-bearing deposits included $14.0 billion and $11.9 billion , respectively, of certificates of deposit of $100,000 or more. Of the total certificates of deposit of $100,000 or more, $4.3 billion and $3.6 billion were certificates of deposit of $250,000 or more at September 30, 2016 and December 31, 2015 , respectively. At September 30, 2016 , our interest-bearing time deposits maturing for the remainder of 2016 and over the next four years and thereafter were as follows: ($ in millions) 2016 2017 2018 2019 2020 Thereafter Deposits $ 2,942 $ 13,921 $ 4,089 $ 4,141 $ 2,855 $ 4,051 The above maturity table excludes $15.3 billion of demand deposits with no defined maturity. In addition, at September 30, 2016 , we had $2.3 billion of broker network deposit sweeps procured through a program arranger who channels brokerage account deposits to us. Unless extended, the contracts associated with these broker network deposit sweeps will terminate between 2019 and 2021 . |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2016 | |
Banking and Thrift [Abstract] | |
Borrowings | BORROWINGS September 30, 2016 December 31, 2015 ($ in millions) Maturity date Interest Rate Weighted average interest rate Outstanding Amount (a) Outstanding Amount (a) Borrowings of consolidated securitization entities: Fixed securitized borrowings 2017 - 2021 1.35% - 4.47% 1.90 % $ 8,704 $ 6,383 Floating securitized borrowings 2017 - 2019 1.02% - 1.64% 1.32 % 3,707 7,206 Total borrowings of consolidated securitization entities 1.72 % 12,411 13,589 Senior unsecured notes: Fixed senior unsecured notes 2017 - 2026 1.87% - 4.50% 3.41 % 6,809 6,308 Floating senior unsecured notes 2017 - 2020 1.98% - 2.20% 2.14 % 947 249 Total senior unsecured notes 3.25 % 7,756 6,557 Bank term loan — 4,133 Total borrowings $ 20,167 $ 24,279 ___________________ (a) The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance cost. The following table summarizes the maturities of the principal amount of our borrowings of consolidated securitization entities and senior unsecured notes for the remainder of 2016 and over the next four years and thereafter: ($ in millions) 2016 2017 2018 2019 2020 Thereafter Borrowings $ — $ 4,377 $ 3,157 $ 6,435 $ 2,098 $ 4,158 Third-Party Debt Bank Term Loan During the nine months ended September 30, 2016 , we prepaid $4.1 billion representing all of the remaining outstanding indebtedness under the Bank Term Loan. Senior Unsecured Notes 2016 Issuances ($ in millions) : Issuance Date Principal Amount Maturity Interest Rate May 9, 2016 $ 500 2017 Floating rate (three-month LIBOR plus 1.40%) August 4, 2016 $ 500 2026 3.700% senior unsecured notes August 9, 2016 $ 200 2017 Floating rate (three-month LIBOR plus 1.40%) Credit Facilities As additional sources of liquidity, we have certain undrawn credit facilities, primarily related to our securitization program. In July 2016, we entered into a three -year unsecured revolving credit facility with private lenders (the “Revolving Credit Facility”), which provides $0.5 billion of committed capacity. At September 30, 2016 , we had an aggregate of $6.6 billion of undrawn committed capacity under our securitization programs and all of the committed capacity under the Revolving Credit Facility was undrawn, subject to customary borrowing conditions. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS For a description of how we estimate fair value, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies in our 2015 annual consolidated and combined financial statements in our 2015 Form 10-K. The following tables present our assets and liabilities measured at fair value on a recurring basis. Included in the tables are debt and equity securities. Recurring Fair Value Measurements The following tables present our assets measured at fair value on a recurring basis. At September 30, 2016 ($ in millions) Level 1 Level 2 Level 3 Total Assets Investment securities Debt U.S. Government and Federal Agency $ — $ 2,101 $ — $ 2,101 State and municipal — — 49 49 Residential mortgage-backed — 1,191 — 1,191 Equity 15 — — 15 Total $ 15 $ 3,292 $ 49 $ 3,356 At December 31, 2015 ($ in millions) Assets Investment securities Debt U.S. Government and Federal Agency $ — $ 2,761 $ — $ 2,761 State and municipal — — 49 49 Residential mortgage-backed — 317 — 317 Equity 15 — — 15 Total $ 15 $ 3,078 $ 49 $ 3,142 For the nine months ended September 30, 2016 , there were no securities transferred between Level 1 and Level 2 or between Level 2 and Level 3. At September 30, 2016 and December 31, 2015 , we did not have any significant liabilities measured at fair value on a recurring basis. Our Level 3 recurring fair value measurements primarily relate to state and municipal debt instruments which are valued using non-binding broker quotes or other third-party sources. For a description of our process to evaluate third-party pricing servicers, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies in our 2015 annual consolidated and combined financial statements in our 2015 Form 10-K. Our state and municipal debt securities are classified as available-for-sale with changes in fair value included in accumulated other comprehensive income. The following table presents the changes in our Level 3 debt instruments that are measured on a recurring basis for the three and nine months ended September 30, 2016 and 2015 . Changes in Level 3 Instruments Three months ended September 30, Nine months ended September 30, ($ in millions) 2016 2015 2016 2015 Balance at beginning of period $ 49 $ 54 $ 49 $ 60 Net realized/unrealized gains (losses) 2 — 4 2 Purchases — — — — Sales — — — (6 ) Settlements (2 ) (4 ) (4 ) (6 ) Balance at end of period $ 49 $ 50 $ 49 $ 50 Non-Recurring Fair Value Measurements We hold certain assets that have been measured at fair value on a non-recurring basis at September 30, 2016 and 2015 . These assets can include repossessed assets and cost method investments that are written down to fair value when they are impaired, as well as loan receivables held for sale. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. The assets held by us that were measured at fair value on a non-recurring basis and the effects of the remeasurement to fair value were not material for all periods presented. Financial Assets and Financial Liabilities Carried at Other than Fair Value Carrying Corresponding fair value amount At September 30, 2016 ($ in millions) value Total Level 1 Level 2 Level 3 Financial Assets Financial assets for which carrying values equal or approximate fair value: Cash and equivalents (a) $ 13,588 $ 13,588 $ 13,388 $ 200 $ — Other assets (b) $ 379 $ 379 $ 379 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 66,529 $ 73,444 $ — $ — $ 73,444 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 49,815 $ 50,486 $ — $ 50,486 $ — Borrowings of consolidated securitization entities $ 12,411 $ 12,507 $ — $ 9,248 $ 3,259 Senior unsecured notes $ 7,756 $ 8,057 $ — $ 8,057 $ — Carrying Corresponding fair value amount At December 31, 2015 ($ in millions) value Total Level 1 Level 2 Level 3 Financial Assets Financial assets for which carrying values equal or approximate fair value: Cash and equivalents (a) $ 12,325 $ 12,325 $ 11,865 $ 460 $ — Other assets (b) $ 391 $ 391 $ 391 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 64,793 $ 71,386 $ — $ — $ 71,386 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 43,367 $ 43,840 $ — $ 43,840 $ — Borrowings of consolidated securitization entities $ 13,589 $ 13,562 $ — $ 7,566 $ 5,996 Bank term loan $ 4,133 $ 4,125 $ — $ — $ 4,125 Senior unsecured notes $ 6,557 $ 6,574 $ — $ 6,574 $ — _______________________ (a) For cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less. (b) This balance relates to restricted cash and equivalents, which is included in other assets. (c) Under certain retail partner program agreements, the expected sales proceeds related to the sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above. |
Regulatory and Capital Adequacy
Regulatory and Capital Adequacy | 9 Months Ended |
Sep. 30, 2016 | |
Banking and Thrift [Abstract] | |
Regulatory and Capital Adequacy | REGULATORY AND CAPITAL ADEQUACY As a savings and loan holding company, we are subject to regulation, supervision and examination by the Federal Reserve Board. The Bank is a federally chartered savings association. As such, the Bank is subject to regulation, supervision and examination by the OCC, which is its primary regulator, and by the Consumer Financial Protection Bureau (“CFPB”). In addition, the Bank, as an insured depository institution, is supervised by the Federal Deposit Insurance Corporation. Following the approval from the Federal Reserve Board to become a stand-alone savings and loan holding company, the Company is now subject to the capital requirements as prescribed by Basel III capital rules and the requirements of the Dodd-Frank Act. Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could limit our business activities and have a material adverse effect on our consolidated financial statements. Under capital adequacy guidelines, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require us and the Bank to maintain minimum amounts and ratios (set forth in the following table) of Total, Tier 1 and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). For Synchrony Financial to be a well-capitalized savings and loan holding company, the Bank must be well-capitalized and Synchrony Financial must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve Board to meet and maintain a specific capital level for any capital measure. At September 30, 2016 and December 31, 2015 , Synchrony Financial met all applicable requirements to be deemed well-capitalized pursuant to Federal Reserve Board regulations, and the Bank also met all applicable requirements to be deemed well-capitalized pursuant to OCC regulations and for purposes of the Federal Deposit Insurance Act. There are no conditions or events subsequent to September 30, 2016 that management believes have changed the Company's or the Bank’s capital category. The actual capital amounts, ratios and the applicable required minimums of the Company and the Bank are as follows: Synchrony Financial At September 30, 2016 ($ in millions) Actual Minimum for capital adequacy purposes Amount Ratio (a) Amount Ratio (b) Total risk-based capital $ 13,794 19.5 % $ 5,653 8.0 % Tier 1 risk-based capital $ 12,871 18.2 % $ 4,240 6.0 % Tier 1 leverage $ 12,871 15.3 % $ 3,356 4.0 % Common equity Tier 1 Capital $ 12,871 18.2 % $ 3,180 4.5 % At December 31, 2015 ($ in millions) Actual Minimum for capital adequacy purposes Amount Ratio (a) Amount Ratio Total risk-based capital $ 12,531 18.1 % $ 5,538 8.0 % Tier 1 risk-based capital $ 11,633 16.8 % $ 4,153 6.0 % Tier 1 leverage $ 11,633 14.4 % $ 3,236 4.0 % Common equity Tier 1 Capital $ 11,633 16.8 % $ 3,115 4.5 % Synchrony Bank At September 30, 2016 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio (b) Amount Ratio Total risk-based capital $ 9,559 17.4 % $ 4,407 8.0 % $ 5,509 10.0 % Tier 1 risk-based capital $ 8,836 16.0 % $ 3,306 6.0 % $ 4,407 8.0 % Tier 1 leverage $ 8,836 13.3 % $ 2,659 4.0 % $ 3,324 5.0 % Common equity Tier I capital $ 8,836 16.0 % $ 2,479 4.5 % $ 3,581 6.5 % At December 31, 2015 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio Amount Ratio Total risk-based capital $ 8,442 16.6 % $ 4,064 8.0 % $ 5,080 10.0 % Tier 1 risk-based capital $ 7,781 15.3 % $ 3,048 6.0 % $ 4,064 8.0 % Tier 1 leverage $ 7,781 13.1 % $ 2,384 4.0 % $ 2,980 5.0 % Common equity Tier I capital $ 7,781 15.3 % $ 2,286 4.5 % $ 3,302 6.5 % _______________________ (a) Capital ratios are calculated based on the Basel III Standardized Approach rules, subject to applicable transition provisions, at September 30, 2016 and December 31, 2015 . (b) For calendar year 2016, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 0.625 percent age points to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. The Bank may pay dividends on its stock, with consent or non-objection from the OCC and the Federal Reserve Board, among other things, if its regulatory capital would not thereby be reduced below the applicable regulatory capital requirements. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the assumed conversion of all dilutive securities. The following table presents the calculation of basic and diluted earnings per share: Three months ended September 30, Nine months ended September 30, (in millions, except per share data) 2016 2015 2016 2015 Net earnings $ 604 $ 574 $ 1,675 $ 1,667 Weighted average common shares outstanding, basic 828 834 832 834 Effect of dilutive securities 3 2 2 1 Weighted average common shares outstanding, dilutive 831 836 834 835 Earnings per basic common share $ 0.73 $ 0.69 $ 2.01 $ 2.00 Earnings per diluted common share $ 0.73 $ 0.69 $ 2.01 $ 2.00 We have issued certain stock based awards under the Synchrony Financial 2014 Long-Term Incentive Plan. A total of approximately 3 million and 1 million shares related to these awards were considered anti-dilutive and therefore were excluded from the computation of diluted earnings per share for the three and nine months ended September 30, 2016 and 2015 , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES For periods up to and including the date of Separation, we were included in the consolidated U.S. federal and state income tax returns of GE, where applicable, but also filed certain separate state and foreign income tax returns. For periods after the date of Separation, we file separate consolidated U.S. federal and state income tax returns. The tax provision is presented on a separate company basis as if we were a separate filer for tax purposes for all periods presented. The effects of tax adjustments and settlements from taxing authorities are presented in our condensed consolidated financial statements in the period in which they occur. Our current obligations for taxes are settled with the relevant tax authority, or GE, as applicable, on an estimated basis and adjusted in later periods as appropriate and are reflected in our consolidated financial statements in the periods in which those settlements occur. We recognize the current and deferred tax consequences of all transactions that have been recognized in the financial statements using the provisions of the enacted tax laws. In calculating the provision for interim income taxes, in accordance with Accounting Standards Codification 740, Income Taxes , we apply an estimated annual effective tax rate to year-to-date ordinary income. At the end of each interim period, we estimate the effective tax rate expected to be applicable for the full fiscal year. See “ Management's Discussion and Analysis—Critical Accounting Estimates ” in our 2015 Form 10-K, for a discussion of the significant judgments and estimates related to income taxes. For periods prior to separation, we are under continuous examination by the Internal Revenue Service (“IRS”) and the tax authorities of various states as part of their audit of GE’s tax returns. The IRS is currently auditing GE's consolidated U.S. income tax returns for 2012 and 2013. We are under examination in various states going back to 2008 as part of their audit of GE’s tax returns. We are not currently under audit with respect to any post-separation periods. We believe that there are no issues or claims that are likely to significantly impact our results of operations, financial position or cash flows. We further believe that we have made adequate provision for all income tax uncertainties that could result from such examinations. Tax Sharing and Separation Agreement In connection with our initial public offering in August 2014 (“IPO”), we entered into a Tax Sharing and Separation Agreement (“TSSA”), which governs certain separation-related tax matters between the Company and GE following the IPO. The TSSA governs the allocation of the responsibilities for the taxes of the GE group between GE and the Company. The TSSA also allocates rights, obligations and responsibilities in connection with certain administrative matters relating to the preparation of tax returns and control of tax audits and other proceedings relating to taxes. See Note 14. Income Taxes to our 2015 annual consolidated and combined financial statements in our 2015 Form 10-K for additional information on the TSSA. Unrecognized Tax Benefits ($ in millions) September 30, 2016 December 31, 2015 Unrecognized tax benefits, excluding related interest expense and penalties $ 167 $ 327 Portion that, if recognized, would reduce tax expense and effective tax rate (a) 90 79 Accrued interest on unrecognized tax benefits 10 3 Accrued penalties on unrecognized tax benefits — — ____________________ (a) Includes gross state and local unrecognized tax benefits net of the effects of associated U.S. federal income taxes. Excludes amounts attributable to any related valuation allowances resulting from associated increases in deferred tax assets. We compute our unrecognized tax benefits on a separate return basis. For unrecognized tax benefits associated with periods prior to 2014, we will settle our liabilities, as required, in accordance with the TSSA. The amount of uncertain tax liabilities that may be resolved in the next twelve months is not expected to be material to our results of operations. |
Legal Proceedings and Regulator
Legal Proceedings and Regulatory Matters | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Regulatory Matters | LEGAL PROCEEDINGS AND REGULATORY MATTERS In the normal course of business, from time to time, we have been named as a defendant in various legal proceedings, including arbitrations, class actions and other litigation, arising in connection with our business activities. Certain of the legal actions include claims for substantial compensatory and/or punitive damages, or claims for indeterminate amounts of damages. We are also involved, from time to time, in reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our business (collectively, “regulatory matters”), which could subject us to significant fines, penalties, obligations to change our business practices or other requirements resulting in increased expenses, diminished income and damage to our reputation. We contest liability and/or the amount of damages as appropriate in each pending matter. In accordance with applicable accounting guidance, we establish an accrued liability for legal and regulatory matters when those matters present loss contingencies which are both probable and reasonably estimable. Legal proceedings and regulatory matters are subject to many uncertain factors that generally cannot be predicted with assurance, and we may be exposed to losses in excess of any amounts accrued. For some matters, we are able to determine that an estimated loss, while not probable, is reasonably possible. For other matters, including those that have not yet progressed through discovery and/or where important factual information and legal issues are unresolved, we are unable to make such an estimate. We currently estimate that the reasonably possible losses for legal proceedings and regulatory matters, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a possible loss, are immaterial. This represents management’s estimate of possible loss with respect to these matters and is based on currently available information. This estimate of possible loss does not represent our maximum loss exposure. The legal proceedings and regulatory matters underlying the estimate will change from time to time and actual results may vary significantly from current estimates. Our estimate of reasonably possible losses involves significant judgment, given the varying stages of the proceedings, the existence of numerous yet to be resolved issues, the breadth of the claims (often spanning multiple years), unspecified damages and/or the novelty of the legal issues presented. Based on our current knowledge, we do not believe that we are a party to any pending legal proceeding or regulatory matters that would have a material adverse effect on our condensed consolidated financial condition or liquidity. However, in light of the uncertainties involved in such matters, the ultimate outcome of a particular matter could be material to our operating results for a particular period depending on, among other factors, the size of the loss or liability imposed and the level of our earnings for that period, and could adversely affect our business and reputation. Below is a description of certain of our regulatory matters and legal proceedings. Regulatory Matters On December 10, 2013, we entered into a Consent Order with the CFPB relating to our CareCredit platform, which required us to pay up to $34.1 million to qualifying customers and change certain business practices. Some of the business practice changes required by the Consent Order are similar to requirements in an Assurance of Discontinuance that we entered into with the Attorney General for the State of New York on June 3, 2013. The payments required by the Consent Order were completed in 2015. Our settlements with the CFPB and the New York State Attorney General do not preclude other regulators or state attorneys general from seeking additional monetary or injunctive relief with respect to CareCredit. On June 19, 2014, we entered into a Consent Order with the CFPB (the “2014 CFPB Consent Order”) related to the CFPB’s review of the Bank’s debt cancellation products and its marketing practices in its telesales channel related to those products. The 2014 CFPB Consent Order required us to refund $56 million to cardholders who enrolled in a debt cancellation product over the telephone from January 2010 to October 2012 ( $11 million of which was refunded prior to the 2014 CFPB Consent Order), pay civil money penalties of $3.5 million and change certain business practices. In 2015, we completed the consumer refunds. The 2014 CFPB Consent Order also resolved a separate CFPB investigation related to potential violations of the Equal Credit Opportunity Act as a result of the Bank’s omission of certain Spanish-speaking customers and customers residing in Puerto Rico from certain statement credit and settlement offers that were made to certain delinquent customers. The Bank identified this issue through an audit of its collection operations, reported it to the CFPB and initiated a remediation program. In 2015, we completed our consumer remediation program, which consisted of approximately $185 million of balance credits and waivers to previously charged-off accounts and approximately $15 million of other credits or payments. This remediation program included $132 million of voluntary remediation completed prior to the 2014 CFPB Consent Order. In addition to the consumer remediation, the 2014 CFPB Consent Order required us to implement a fair lending compliance plan (including fair lending reviews, audits and training). Although we do not believe that the 2014 CFPB Consent Order itself will have a material adverse effect on our results of operations going forward, we cannot be sure whether the 2014 CFPB Consent Order will have an adverse impact on our reputation or whether any similar actions will be brought by state attorneys general or others, all of which could have a material adverse effect on us. On October 30, 2014, the United States Trustee, which is part of the DOJ, filed an application in In re Nyree Belton , a Chapter 7 bankruptcy case pending in the U.S. Bankruptcy Court for the Southern District of New York for orders authorizing discovery of the Bank pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, related to an investigation of the Bank’s credit reporting. The discovery, which is ongoing, concerns allegations made in Belton et al. v. GE Capital Consumer Lending , a putative class action adversary proceeding pending in the same Bankruptcy Court. In the Belton adversary proceeding, which was filed on April 30, 2014, plaintiff alleges that the Bank violates the discharge injunction under Section 524(a)(2) of the Bankruptcy Code by attempting to collect discharged debts and by failing to update and correct credit information to credit reporting agencies to show that such debts are no longer due and owing because they have been discharged in bankruptcy. Plaintiff seeks declaratory judgment, injunctive relief and an unspecified amount of damages. On December 15, 2014, the Bankruptcy Court entered an order staying the adversary proceeding pending an appeal to the District Court of the Bankruptcy Court’s order denying the Bank’s motion to compel arbitration. On October 14, 2015, the District Court reversed the Bankruptcy Court and on November 4, 2015, the Bankruptcy Court granted the Bank's motion to compel arbitration. On October 15, 2015, the Bank received a Civil Investigative Demand from the CFPB seeking information related to the Bank’s credit bureau reporting with respect to sold accounts. The information sought by the CFPB generally relates to the allegations made in Belton et al. v. GE Capital Consumer Lending. On May 9, 2016, the Bank received a NORA (Notice of Opportunity to Respond and Advise) letter from the CFPB indicating that the CFPB Office of Enforcement is considering whether to recommend that the CFPB take legal action relating to this matter. Other Matters The Bank or the Company is or has been a defendant in a number of putative class actions alleging claims under the federal Telephone Consumer Protection Act (“TCPA”) as a result of phone calls made by the Bank. The complaints generally have alleged that the Bank or the Company placed calls to consumers by an automated telephone dialing system or using a pre-recorded message or automated voice without their consent and seek up to $1,500 for each violation, without specifying an aggregate amount. There is presently only one case outstanding, Abdeljalil et al. v. GE Capital Retail Bank , which was filed on August 22, 2012 in the U.S. District Court for the Southern District of California. In Abdeljalil , the plaintiffs assert that they received calls on their cellular telephones relating to accounts not belonging to them. On March 26, 2015, the Court entered an order granting class certification under Federal Rule of Civil Procedure 23(b)(3) (for damages) and denying class certification under Federal Rule of Civil Procedure 23(b)(2) (for injunctive relief). In the first quarter of 2016, the Bank entered an agreement to resolve the Abdeljalil action on a class basis. Pursuant to the agreement, a related case ( Hofer et al. v. Synchrony Bank , which was filed on November 4, 2014 in the U.S. District Court for the Eastern District of Missouri), was dismissed on February 11, 2016. On June 16, 2016, the Court entered an order preliminarily approving the settlement. In addition to the Abdeljalil and Hofer matters discussed above , the Bank has resolved ten other putative class actions that made similar claims under the TCPA on an individual basis with the class representative. Travaglio et al. v. GE Capital Retail Bank and Allied Interstate LLC was filed on January 17, 2014 in the U.S. District Court for the Middle District of Florida and dismissed on October 9, 2014. Fitzhenry v. Lowe’s Companies Inc. and GE Capital Retail Bank was filed on May 29, 2014 in the U.S. District Court for the District of South Carolina and dismissed on October 20, 2014. Cowan v. GE Capital Retail Bank was filed on May 14, 2014 in the U.S. District Court for the District of Connecticut and dismissed on July 8, 2015. Pittman et al. v. GE Capital d/b/a GE Capital Retail Bank was filed on July 29, 2014 in the U.S. District Court for the Northern District of Alabama and dismissed on August 20, 2015. Dubanoski et al. v. Wal-Mart Stores, Inc., for which the Bank indemnified the defendant, was filed on February 27, 2015 in the United States District Court for the Northern District of Illinois and dismissed on September 1, 2015. Mintz et al v. Synchrony Bank was filed on December 28, 2015 in the U.S. District Court for the Eastern District of New York and dismissed on May 11, 2016. Deutsche et al. v. Synchrony Bank et al. was filed on March 27, 2016 in the U.S. District Court for the District of New Jersey and dismissed on June 27, 2016. Ciotti et al. v. Synchrony Financial et al. was filed on April 27, 2016 in the U.S. District Court for the Southern District of California and dismissed on June 2, 2016. Johnson et al. v. Wal-Mart Stores, Inc. and Synchrony Financial was filed on April 22, 2016 in the U.S. District Court for the Eastern District of California and dismissed on September 8, 2016. Anand v. Synchrony Bank and Synchrony Financial was filed on June 22, 2016 in the United States District Court for the Northern District of Illinois and dismissed on September 15, 2016. In addition to the TCPA class action lawsuits related to phone calls, the Company is a defendant in a putative class action lawsuit alleging claims under the TCPA relating to facsimiles. In Michael W. Kincaid, DDS et al. v. Synchrony Financial , plaintiff alleges that the Company violated the TCPA by sending fax advertisements without consent and without required notices, and seeks up to $1,500 for each violation. The amount of damages sought in the aggregate is unspecified. The original complaint was filed in U.S. District Court for the Northern District of Illinois on January 20, 2016. On August 11, 2016, the Court granted the Company’s motion to dismiss based on the lack of personal jurisdiction. On August 15, 2016, the plaintiff re-filed the case in the Southern District of Ohio. |
Basis of Presentation and Sum21
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Preparing financial statements in conformity with U.S. GAAP requires us to make estimates based on assumptions about current, and for some estimates future, economic and market conditions (for example, unemployment, housing, interest rates and market liquidity) which affect reported amounts and related disclosures in our condensed consolidated financial statements. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially affect our results of operations and financial position. Among other effects, such changes could result in incremental losses on loan receivables, future impairments of investment securities, goodwill and intangible assets, increases in reserves for contingencies, establishment of valuation allowances on deferred tax assets and increases in our tax liabilities. We conduct our operations within the United States and Canada. Substantially all of our revenues are from U.S. customers. The operating activities conducted by our non-U.S. affiliates use the local currency as their functional currency. The effects of translating the financial statements of these non-U.S. affiliates to U.S. dollars are included in equity. Asset and liability accounts are translated at year-end exchange rates, while revenues and expenses are translated at average rates for the respective periods. Consolidated Basis of Presentation The Company’s financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all of our subsidiaries – i.e., entities in which we have a controlling financial interest, most often because we hold a majority voting interest. To determine if we hold a controlling financial interest in an entity, we first evaluate if we are required to apply the variable interest entity (“VIE”) model to the entity, otherwise the entity is evaluated under the voting interest model. Where we hold current or potential rights that give us the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (“power”) combined with a variable interest that gives us the right to receive potentially significant benefits or the obligation to absorb potentially significant losses (“significant economics”), we have a controlling financial interest in that VIE. Rights held by others to remove the party with power over the VIE are not considered unless one party can exercise those rights unilaterally. We consolidate certain securitization entities under the VIE model because we have both power and significant economics. See Note 5. Variable Interest Entities . |
Interim Period Presentation | Interim Period Presentation The condensed consolidated financial statements and notes thereto are unaudited. These statements include all adjustments (consisting of normal recurring accruals) that we considered necessary to present a fair statement of our results of operations, financial position and cash flows. The results reported in these condensed consolidated financial statements should not be considered as necessarily indicative of results that may be expected for the entire year. These condensed consolidated financial statements should be read in conjunction with our 2015 annual consolidated and combined financial statements and the related notes in our Annual Report on Form 10-K for the year ended December 31, 2015 (our "2015 Form 10-K"). |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | Our investment securities consist of the following: September 30, 2016 December 31, 2015 Gross Gross Gross Gross Amortized unrealized unrealized Estimated Amortized unrealized unrealized Estimated ($ in millions) cost gains losses fair value cost gains losses fair value Debt U.S. government and federal agency $ 2,100 $ 1 $ — $ 2,101 $ 2,768 $ — $ (7 ) $ 2,761 State and municipal 47 2 — 49 51 1 (3 ) 49 Residential mortgage-backed (a) 1,183 9 (1 ) 1,191 323 1 (7 ) 317 Equity 15 — — 15 15 — — 15 Total $ 3,345 $ 12 $ (1 ) $ 3,356 $ 3,157 $ 2 $ (17 ) $ 3,142 _______________________ (a) All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At September 30, 2016 and December 31, 2015 , $370 million and $317 million, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. |
Available-for-sale Securities, Continuous Loss Position, Fair Value | The following table presents the estimated fair values and gross unrealized losses of our available-for-sale investment securities: In loss position for Less than 12 months 12 months or more Gross Gross Estimated unrealized Estimated unrealized ($ in millions) fair value losses fair value losses At September 30, 2016 Debt U.S. government and federal agency $ — $ — $ — $ — State and municipal 1 — 5 — Residential mortgage-backed 114 — 42 (1 ) Equity 1 — — — Total $ 116 $ — $ 47 $ (1 ) At December 31, 2015 Debt U.S. government and federal agency $ 2,611 $ (7 ) $ — $ — State and municipal 40 (3 ) — — Residential mortgage-backed 175 (3 ) 91 (4 ) Equity 1 — — — Total $ 2,827 $ (13 ) $ 91 $ (4 ) |
Investments Classified by Contractual Maturity Date | Contractual Maturities of Investments in Available-for-Sale Debt Securities (excluding residential mortgage-backed securities) Amortized Estimated At September 30, 2016 ($ in millions) cost fair value Due Within one year $ 2,100 $ 2,101 After one year through five years $ 1 $ 1 After five years through ten years $ 1 $ 1 After ten years $ 45 $ 47 |
Loan Receivables and Allowanc23
Loan Receivables and Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | ($ in millions) September 30, 2016 December 31, 2015 Credit cards $ 67,858 $ 65,773 Consumer installment loans 1,361 1,154 Commercial credit products 1,385 1,323 Other 40 40 Total loan receivables, before allowance for losses (a)(b) $ 70,644 $ 68,290 _______________________ (a) Total loan receivables include $23.1 billion and $25.5 billion of restricted loans of consolidated securitization entities at September 30, 2016 and December 31, 2015 , respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. (b) At September 30, 2016 and December 31, 2015 , loan receivables included deferred expense, net of deferred income, of $72 million and $63 million , respectively. |
Allowance for Credit Losses on Financing Receivables | Allowance for Loan Losses ($ in millions) Balance at Provision charged to operations Gross charge-offs Recoveries Balance at Credit cards $ 3,800 $ 964 $ (919 ) $ 172 $ 4,017 Consumer installment loans 39 11 (11 ) 4 43 Commercial credit products 53 12 (13 ) 2 54 Other 2 (1 ) — — $ 1 Total $ 3,894 $ 986 $ (943 ) $ 178 $ 4,115 ($ in millions) Balance at Provision charged to operations Gross charge-offs Recoveries Balance at September 30, 2015 Credit cards $ 3,229 $ 691 $ (765 ) $ 147 $ 3,302 Consumer installment loans 23 6 (8 ) 2 23 Commercial credit products 49 5 (11 ) 2 45 Other 1 — — — $ 1 Total $ 3,302 $ 702 $ (784 ) $ 151 $ 3,371 ($ in millions) Balance at January 1, 2016 Provision charged to operations Gross charge-offs Recoveries Balance at Credit cards $ 3,420 $ 2,836 $ (2,820 ) $ 581 $ 4,017 Consumer installment loans 26 38 (31 ) 10 43 Commercial credit products 50 36 (39 ) 7 54 Other 1 — — — $ 1 Total $ 3,497 $ 2,910 $ (2,890 ) $ 598 $ 4,115 ($ in millions) Balance at January 1, 2015 Provision charged to operations Gross charge-offs Recoveries Balance at Credit cards $ 3,169 $ 2,083 $ (2,413 ) $ 463 $ 3,302 Consumer installment loans 22 15 (24 ) 10 23 Commercial credit products 45 30 (35 ) 5 45 Other — 1 — — 1 Total $ 3,236 $ 2,129 $ (2,472 ) $ 478 $ 3,371 |
Past Due Financing Receivables | Delinquent and Non-accrual Loans At September 30, 2016 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing Credit cards $ 1,624 $ 1,315 $ 2,939 $ 1,315 $ — Consumer installment loans 18 3 21 — 3 Commercial credit products 32 16 48 16 — Total delinquent loans $ 1,674 $ 1,334 $ 3,008 $ 1,331 $ 3 Percentage of total loan receivables (a) 2.4 % 1.9 % 4.3 % 1.9 % — % At December 31, 2015 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing Credit cards $ 1,451 $ 1,257 $ 2,708 $ 1,257 $ — Consumer installment loans 16 3 19 — 3 Commercial credit products 32 13 45 13 — Total delinquent loans $ 1,499 $ 1,273 $ 2,772 $ 1,270 $ 3 Percentage of total loan receivables (a) 2.2 % 1.9 % 4.1 % 1.9 % — % ______________________ (a) Percentages are calculated based on period-end balances |
Troubled Debt Restructurings on Financing Receivables | The following table provides information on loans that entered a loan modification program during the periods presented: Three months ended September 30, Nine months ended September 30, ($ in millions) 2016 2015 2016 2015 Credit cards $ 164 $ 135 $ 415 $ 362 Consumer installment loans — — — — Commercial credit products 1 1 2 4 Total $ 165 $ 136 $ 417 $ 366 |
Impaired Financing Receivables | The following table provides information about loans classified as TDRs and specific reserves. We do not evaluate credit card loans for impairment on an individual basis but instead estimate an allowance for loan losses on a collective basis. As a result, there are no impaired loans for which there is no allowance. At September 30, 2016 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 810 $ (281 ) $ 529 $ 713 Consumer installment loans — — — — Commercial credit products 6 (3 ) 3 6 Total $ 816 $ (284 ) $ 532 $ 719 At December 31, 2015 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 756 $ (256 ) $ 500 $ 659 Consumer installment loans — — — — Commercial credit products 7 (3 ) 4 6 Total $ 763 $ (259 ) $ 504 $ 665 The following table presents the types and financial effects of loans modified and accounted for as TDRs during the periods presented: Three months ended September 30, 2016 2015 ($ in millions) Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Credit cards $ 12 $ 45 $ 793 $ 12 $ 38 $ 721 Consumer installment loans — — — — — — Commercial credit products — 1 6 — — 7 Total $ 12 $ 46 $ 799 $ 12 $ 38 $ 728 Nine months ended September 30, 2016 2015 ($ in millions) Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Credit cards $ 36 $ 130 $ 778 $ 37 $ 110 $ 718 Consumer installment loans — — — — — — Commercial credit products — 1 6 — 1 8 Total $ 36 $ 131 $ 784 $ 37 $ 111 $ 726 |
Troubled Debt Restructurings on Financing Receivables, Subsequent Default | The following table presents the type, number and amount of loans accounted for as TDRs that enrolled in a modification plan within the previous 12 months and experienced a payment default during the periods presented. A customer defaults from a modification program after two consecutive missed payments. Three months ended September 30, 2016 2015 ($ in millions) Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Credit cards 14,779 $ 30 12,406 $ 24 Consumer installment loans — — — — Commercial credit products 34 — 49 1 Total 14,813 $ 30 12,455 $ 25 Nine months ended September 30, 2016 2015 ($ in millions) Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Credit cards 29,982 $ 61 24,692 $ 49 Consumer installment loans — — — — Commercial credit products 82 — 91 1 Total 30,064 $ 61 24,783 $ 50 |
Financing Receivable Credit Quality Indicators | The following table provides the most recent FICO scores available for our customers at September 30, 2016 and December 31, 2015 , respectively, as a percentage of each class of loan receivable. The table below excludes 0.8% and 0.9% of our total loan receivables balances at September 30, 2016 and December 31, 2015 , respectively, which represents those customer accounts for which a FICO score is not available. September 30, 2016 December 31, 2015 661 or 601 to 600 or 661 or 601 to 600 or higher 660 less higher 660 less Credit cards 72.8 % 19.8 % 7.4 % 73.0 % 19.8 % 7.2 % Consumer installment loans 78.3 % 16.2 % 5.5 % 77.7 % 16.6 % 5.7 % Commercial credit products 87.0 % 8.5 % 4.5 % 86.8 % 8.7 % 4.5 % |
Interest Income and Interest Expense Disclosure | The following table provides additional information about our interest and fees on loans from our loan receivables, including held for sale: Three months ended September 30, Nine months ended September 30, ($ in millions) 2016 2015 2016 2015 Credit cards $ 3,705 $ 3,315 $ 10,573 $ 9,500 Consumer installment loans 31 27 86 78 Commercial credit products 35 36 103 106 Other — 1 1 1 Total $ 3,771 $ 3,379 $ 10,763 $ 9,685 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Variable Interest Entities [Abstract] | |
Schedule of Variable Interest Entities | The table below summarizes the assets and liabilities of our consolidated securitization VIEs described above. ($ in millions) September 30, 2016 December 31, 2015 Assets Loan receivables, net (a) $ 22,041 $ 24,338 Other assets (b) 127 127 Total $ 22,168 $ 24,465 Liabilities Borrowings $ 12,411 $ 13,589 Other liabilities 20 30 Total $ 12,431 $ 13,619 _______________________ (a) Includes $1.1 billion of related allowance for loan losses resulting in gross restricted loans of $23.1 billion and $25.5 billion at September 30, 2016 and December 31, 2015 , respectively. (b) Includes $118 million of segregated funds held by the VIEs at September 30, 2016 and December 31, 2015 , respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Condensed Consolidated Statements of Financial Position. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | September 30, 2016 December 31, 2015 ($ in millions) Weighted average useful life Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Customer-related 9 years $ 1,126 $ (591 ) $ 535 $ 1,045 $ (505 ) $ 540 Capitalized software 5 years 335 (137 ) 198 253 (92 ) 161 Total $ 1,461 $ (728 ) $ 733 $ 1,298 $ (597 ) $ 701 |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Banking and Thrift [Abstract] | |
Schedule of Deposit Liabilities | September 30, 2016 December 31, 2015 ($ in millions) Amount Average rate (a) Amount Average rate (a) Interest-bearing deposits $ 49,611 1.6 % $ 43,215 1.6 % Non-interest-bearing deposits 204 — 152 — Total deposits $ 49,815 $ 43,367 ____________________ (a) Based on interest expense for the nine months ended September 30, 2016 and the year ended December 31, 2015 and average deposits balances. |
Schedule of Maturities of Deposit Liabilities | At September 30, 2016 , our interest-bearing time deposits maturing for the remainder of 2016 and over the next four years and thereafter were as follows: ($ in millions) 2016 2017 2018 2019 2020 Thereafter Deposits $ 2,942 $ 13,921 $ 4,089 $ 4,141 $ 2,855 $ 4,051 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Banking and Thrift [Abstract] | |
Schedule of Debt | September 30, 2016 December 31, 2015 ($ in millions) Maturity date Interest Rate Weighted average interest rate Outstanding Amount (a) Outstanding Amount (a) Borrowings of consolidated securitization entities: Fixed securitized borrowings 2017 - 2021 1.35% - 4.47% 1.90 % $ 8,704 $ 6,383 Floating securitized borrowings 2017 - 2019 1.02% - 1.64% 1.32 % 3,707 7,206 Total borrowings of consolidated securitization entities 1.72 % 12,411 13,589 Senior unsecured notes: Fixed senior unsecured notes 2017 - 2026 1.87% - 4.50% 3.41 % 6,809 6,308 Floating senior unsecured notes 2017 - 2020 1.98% - 2.20% 2.14 % 947 249 Total senior unsecured notes 3.25 % 7,756 6,557 Bank term loan — 4,133 Total borrowings $ 20,167 $ 24,279 ___________________ (a) The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance cost. |
Schedule of Maturities of Long-term Debt | the maturities of the principal amount of our borrowings of consolidated securitization entities and senior unsecured notes for the remainder of 2016 and over the next four years and thereafter: ($ in millions) 2016 2017 2018 2019 2020 Thereafter Borrowings $ — $ 4,377 $ 3,157 $ 6,435 $ 2,098 $ 4,158 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following tables present our assets measured at fair value on a recurring basis. At September 30, 2016 ($ in millions) Level 1 Level 2 Level 3 Total Assets Investment securities Debt U.S. Government and Federal Agency $ — $ 2,101 $ — $ 2,101 State and municipal — — 49 49 Residential mortgage-backed — 1,191 — 1,191 Equity 15 — — 15 Total $ 15 $ 3,292 $ 49 $ 3,356 At December 31, 2015 ($ in millions) Assets Investment securities Debt U.S. Government and Federal Agency $ — $ 2,761 $ — $ 2,761 State and municipal — — 49 49 Residential mortgage-backed — 317 — 317 Equity 15 — — 15 Total $ 15 $ 3,078 $ 49 $ 3,142 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents the changes in our Level 3 debt instruments that are measured on a recurring basis for the three and nine months ended September 30, 2016 and 2015 . Changes in Level 3 Instruments Three months ended September 30, Nine months ended September 30, ($ in millions) 2016 2015 2016 2015 Balance at beginning of period $ 49 $ 54 $ 49 $ 60 Net realized/unrealized gains (losses) 2 — 4 2 Purchases — — — — Sales — — — (6 ) Settlements (2 ) (4 ) (4 ) (6 ) Balance at end of period $ 49 $ 50 $ 49 $ 50 |
Fair Value, by Balance Sheet Grouping | Financial Assets and Financial Liabilities Carried at Other than Fair Value Carrying Corresponding fair value amount At September 30, 2016 ($ in millions) value Total Level 1 Level 2 Level 3 Financial Assets Financial assets for which carrying values equal or approximate fair value: Cash and equivalents (a) $ 13,588 $ 13,588 $ 13,388 $ 200 $ — Other assets (b) $ 379 $ 379 $ 379 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 66,529 $ 73,444 $ — $ — $ 73,444 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 49,815 $ 50,486 $ — $ 50,486 $ — Borrowings of consolidated securitization entities $ 12,411 $ 12,507 $ — $ 9,248 $ 3,259 Senior unsecured notes $ 7,756 $ 8,057 $ — $ 8,057 $ — Carrying Corresponding fair value amount At December 31, 2015 ($ in millions) value Total Level 1 Level 2 Level 3 Financial Assets Financial assets for which carrying values equal or approximate fair value: Cash and equivalents (a) $ 12,325 $ 12,325 $ 11,865 $ 460 $ — Other assets (b) $ 391 $ 391 $ 391 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 64,793 $ 71,386 $ — $ — $ 71,386 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 43,367 $ 43,840 $ — $ 43,840 $ — Borrowings of consolidated securitization entities $ 13,589 $ 13,562 $ — $ 7,566 $ 5,996 Bank term loan $ 4,133 $ 4,125 $ — $ — $ 4,125 Senior unsecured notes $ 6,557 $ 6,574 $ — $ 6,574 $ — _______________________ (a) For cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less. (b) This balance relates to restricted cash and equivalents, which is included in other assets. (c) Under certain retail partner program agreements, the expected sales proceeds related to the sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above. |
Regulatory and Capital Adequa29
Regulatory and Capital Adequacy (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Banking and Thrift [Abstract] | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The actual capital amounts, ratios and the applicable required minimums of the Company and the Bank are as follows: Synchrony Financial At September 30, 2016 ($ in millions) Actual Minimum for capital adequacy purposes Amount Ratio (a) Amount Ratio (b) Total risk-based capital $ 13,794 19.5 % $ 5,653 8.0 % Tier 1 risk-based capital $ 12,871 18.2 % $ 4,240 6.0 % Tier 1 leverage $ 12,871 15.3 % $ 3,356 4.0 % Common equity Tier 1 Capital $ 12,871 18.2 % $ 3,180 4.5 % At December 31, 2015 ($ in millions) Actual Minimum for capital adequacy purposes Amount Ratio (a) Amount Ratio Total risk-based capital $ 12,531 18.1 % $ 5,538 8.0 % Tier 1 risk-based capital $ 11,633 16.8 % $ 4,153 6.0 % Tier 1 leverage $ 11,633 14.4 % $ 3,236 4.0 % Common equity Tier 1 Capital $ 11,633 16.8 % $ 3,115 4.5 % Synchrony Bank At September 30, 2016 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio (b) Amount Ratio Total risk-based capital $ 9,559 17.4 % $ 4,407 8.0 % $ 5,509 10.0 % Tier 1 risk-based capital $ 8,836 16.0 % $ 3,306 6.0 % $ 4,407 8.0 % Tier 1 leverage $ 8,836 13.3 % $ 2,659 4.0 % $ 3,324 5.0 % Common equity Tier I capital $ 8,836 16.0 % $ 2,479 4.5 % $ 3,581 6.5 % At December 31, 2015 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio Amount Ratio Total risk-based capital $ 8,442 16.6 % $ 4,064 8.0 % $ 5,080 10.0 % Tier 1 risk-based capital $ 7,781 15.3 % $ 3,048 6.0 % $ 4,064 8.0 % Tier 1 leverage $ 7,781 13.1 % $ 2,384 4.0 % $ 2,980 5.0 % Common equity Tier I capital $ 7,781 15.3 % $ 2,286 4.5 % $ 3,302 6.5 % _______________________ (a) Capital ratios are calculated based on the Basel III Standardized Approach rules, subject to applicable transition provisions, at September 30, 2016 and December 31, 2015 . (b) For calendar year 2016, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 0.625 percent age points to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted earnings per share: Three months ended September 30, Nine months ended September 30, (in millions, except per share data) 2016 2015 2016 2015 Net earnings $ 604 $ 574 $ 1,675 $ 1,667 Weighted average common shares outstanding, basic 828 834 832 834 Effect of dilutive securities 3 2 2 1 Weighted average common shares outstanding, dilutive 831 836 834 835 Earnings per basic common share $ 0.73 $ 0.69 $ 2.01 $ 2.00 Earnings per diluted common share $ 0.73 $ 0.69 $ 2.01 $ 2.00 |
Incomes Taxes (Tables)
Incomes Taxes (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Unrecognized Tax Benefits | ($ in millions) September 30, 2016 December 31, 2015 Unrecognized tax benefits, excluding related interest expense and penalties $ 167 $ 327 Portion that, if recognized, would reduce tax expense and effective tax rate (a) 90 79 Accrued interest on unrecognized tax benefits 10 3 Accrued penalties on unrecognized tax benefits — — ____________________ (a) Includes gross state and local unrecognized tax benefits net of the effects of associated U.S. federal income taxes. Excludes amounts attributable to any related valuation allowances resulting from associated increases in deferred tax assets. |
Investment Securities - Schedul
Investment Securities - Schedule of Available for Sale Securities (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Equity | |||
Amortized cost | $ 15 | $ 15 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated fair value | 15 | 15 | |
Total | |||
Amortized cost | 3,345 | 3,157 | |
Gross unrealized gains | 12 | 2 | |
Gross unrealized losses | (1) | (17) | |
Estimated fair value | 3,356 | 3,142 | |
U.S. Government and Federal Agency | |||
Debt | |||
Amortized cost | 2,100 | 2,768 | |
Gross unrealized gains | 1 | 0 | |
Gross unrealized losses | 0 | (7) | |
Estimated fair value | 2,101 | 2,761 | |
State and municipal | |||
Debt | |||
Amortized cost | 47 | 51 | |
Gross unrealized gains | 2 | 1 | |
Gross unrealized losses | 0 | (3) | |
Estimated fair value | 49 | 49 | |
Residential mortgage-backed | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Residential Mortgage Backed Securities pledged as collateral to the Federal Reserve | 370 | 317 | |
Debt | |||
Amortized cost | [1] | 1,183 | 323 |
Gross unrealized gains | [1] | 9 | 1 |
Gross unrealized losses | [1] | (1) | (7) |
Estimated fair value | [1] | $ 1,191 | $ 317 |
[1] | At September 30, 2016 and December 31, 2015, $370 million and $317 million, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. |
Investment Securities - Continu
Investment Securities - Continuous Unrealized Losses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||||
Other than temporary impairment | $ 0 | $ 0 | $ 0 | $ 0 | |
Estimated fair value | |||||
Less than 12 months | 116,000,000 | 116,000,000 | $ 2,827,000,000 | ||
12 months or more | 47,000,000 | 47,000,000 | 91,000,000 | ||
Gross unrealized losses | |||||
Less than 12 months | 0 | 0 | (13,000,000) | ||
12 months or more | (1,000,000) | (1,000,000) | (4,000,000) | ||
U.S. Government and Federal Agency | |||||
Estimated fair value | |||||
Less than 12 months | 0 | 0 | 2,611,000,000 | ||
12 months or more | 0 | 0 | 0 | ||
Gross unrealized losses | |||||
Less than 12 months | 0 | 0 | (7,000,000) | ||
12 months or more | 0 | 0 | 0 | ||
State and municipal | |||||
Estimated fair value | |||||
Less than 12 months | 1,000,000 | 1,000,000 | 40,000,000 | ||
12 months or more | 5,000,000 | 5,000,000 | 0 | ||
Gross unrealized losses | |||||
Less than 12 months | 0 | 0 | (3,000,000) | ||
12 months or more | 0 | 0 | 0 | ||
Residential mortgage-backed | |||||
Estimated fair value | |||||
Less than 12 months | 114,000,000 | 114,000,000 | 175,000,000 | ||
12 months or more | 42,000,000 | 42,000,000 | 91,000,000 | ||
Gross unrealized losses | |||||
Less than 12 months | 0 | 0 | (3,000,000) | ||
12 months or more | (1,000,000) | (1,000,000) | (4,000,000) | ||
Equity Securities [Member] | |||||
Estimated fair value | |||||
Less than 12 months | 1,000,000 | 1,000,000 | 1,000,000 | ||
12 months or more | 0 | 0 | 0 | ||
Gross unrealized losses | |||||
Less than 12 months | 0 | 0 | 0 | ||
12 months or more | $ 0 | $ 0 | $ 0 |
Investment Securities - Contrac
Investment Securities - Contractual Maturities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Securities, Gross Realized Gain (Loss) | $ 0 | $ 0 | $ 0 | $ 0 |
US States and Political Subdivisions Debt Securities and US Government Corporations and Agencies Securities | ||||
Amortized Cost | ||||
Within one year | 2,100,000,000 | 2,100,000,000 | ||
After one year through five years | 1,000,000 | 1,000,000 | ||
After five years through ten years | 1,000,000 | 1,000,000 | ||
After ten years | 45,000,000 | 45,000,000 | ||
Estimated Fair Value | ||||
Within one year | 2,101,000,000 | 2,101,000,000 | ||
After one year through five years | 1,000,000 | 1,000,000 | ||
After five years through ten years | 1,000,000 | 1,000,000 | ||
After ten years | $ 47,000,000 | $ 47,000,000 |
Loan Receivables and Allowanc35
Loan Receivables and Allowance for Loan Losses - Loan Receivables (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Interest income recognized during period when loans were impaired | $ 12 | $ 12 | $ 36 | $ 37 | ||
Loan receivables: (Notes 4 and 5) | [1],[2] | 70,644 | 70,644 | $ 68,290 | ||
Loans receivables, deferred income | 72 | 72 | 63 | |||
Credit cards | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Interest income recognized during period when loans were impaired | 12 | 12 | 36 | 37 | ||
Loan receivables: (Notes 4 and 5) | 67,858 | 67,858 | 65,773 | |||
Consumer installment loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Interest income recognized during period when loans were impaired | 0 | 0 | 0 | 0 | ||
Loan receivables: (Notes 4 and 5) | 1,361 | 1,361 | 1,154 | |||
Commercial credit products | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Interest income recognized during period when loans were impaired | 0 | $ 0 | 0 | $ 0 | ||
Loan receivables: (Notes 4 and 5) | 1,385 | 1,385 | 1,323 | |||
Other | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loan receivables: (Notes 4 and 5) | 40 | 40 | 40 | |||
Variable Interest Entity, Primary Beneficiary | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loan receivables: (Notes 4 and 5) | $ 23,100 | $ 23,100 | $ 25,500 | |||
[1] | At September 30, 2016 and December 31, 2015, loan receivables included deferred expense, net of deferred income, of $72 million and $63 million, respectively. | |||||
[2] | Total loan receivables include $23.1 billion and $25.5 billion of restricted loans of consolidated securitization entities at September 30, 2016 and December 31, 2015, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. |
Loan Receivables and Allowanc36
Loan Receivables and Allowance for Loan Losses - Allowance for Loan Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | $ 3,894 | $ 3,302 | $ 3,497 | $ 3,236 |
Provision for loan losses | 986 | 702 | 2,910 | 2,129 |
Gross charge-offs | (943) | (784) | (2,890) | (2,472) |
Recoveries | 178 | 151 | 598 | 478 |
Ending Balance | 4,115 | 3,371 | 4,115 | 3,371 |
Credit cards | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 3,800 | 3,229 | 3,420 | 3,169 |
Provision for loan losses | 964 | 691 | 2,836 | 2,083 |
Gross charge-offs | (919) | (765) | (2,820) | (2,413) |
Recoveries | 172 | 147 | 581 | 463 |
Ending Balance | 4,017 | 3,302 | 4,017 | 3,302 |
Consumer installment loans | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 39 | 23 | 26 | 22 |
Provision for loan losses | 11 | 6 | 38 | 15 |
Gross charge-offs | (11) | (8) | (31) | (24) |
Recoveries | 4 | 2 | 10 | 10 |
Ending Balance | 43 | 23 | 43 | 23 |
Commercial credit products | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 53 | 49 | 50 | 45 |
Provision for loan losses | 12 | 5 | 36 | 30 |
Gross charge-offs | (13) | (11) | (39) | (35) |
Recoveries | 2 | 2 | 7 | 5 |
Ending Balance | 54 | 45 | 54 | 45 |
Other | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 2 | 1 | 1 | 0 |
Provision for loan losses | (1) | 0 | 0 | 1 |
Gross charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Ending Balance | $ 1 | $ 1 | $ 1 | $ 1 |
Loan Receivables and Allowanc37
Loan Receivables and Allowance for Loan Losses - Delinquent and Non Accrual Status (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Financing Receivable, Past Due Amount | |||
Total past due | $ 3,008 | $ 2,772 | |
90 or more days delinquent and accruing | 1,331 | 1,270 | |
Total non-accruing | $ 3 | $ 3 | |
Financing Receivable, Percentage of Total Loan Receivables | |||
Percentage of total loan receivables, 30-89 days delinquent | [1] | 2.40% | 2.20% |
Percentage of total loan receivables, 90 or more days delinquent | [1] | 1.90% | 1.90% |
Percentage of total loan receivables, Past due | [1] | 4.30% | 4.10% |
Percentage of total loan receivables, 90 or more days delinquent and accruing | [1] | 1.90% | 1.90% |
Percentage of total loan receivables, Total non-accruing | [1] | 0.00% | 0.00% |
Credit cards | |||
Financing Receivable, Past Due Amount | |||
Total past due | $ 2,939 | $ 2,708 | |
90 or more days delinquent and accruing | 1,315 | 1,257 | |
Total non-accruing | 0 | 0 | |
Consumer installment loans | |||
Financing Receivable, Past Due Amount | |||
Total past due | 21 | 19 | |
90 or more days delinquent and accruing | 0 | 0 | |
Total non-accruing | 3 | 3 | |
Commercial credit products | |||
Financing Receivable, Past Due Amount | |||
Total past due | 48 | 45 | |
90 or more days delinquent and accruing | 16 | 13 | |
Total non-accruing | 0 | 0 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,674 | 1,499 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | Credit cards | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,624 | 1,451 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | Consumer installment loans | |||
Financing Receivable, Past Due Amount | |||
Total past due | 18 | 16 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | Commercial credit products | |||
Financing Receivable, Past Due Amount | |||
Total past due | 32 | 32 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,334 | 1,273 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Credit cards | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,315 | 1,257 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Consumer installment loans | |||
Financing Receivable, Past Due Amount | |||
Total past due | 3 | 3 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial credit products | |||
Financing Receivable, Past Due Amount | |||
Total past due | $ 16 | $ 13 | |
[1] | Percentages are calculated based on period-end balances. |
Loan Receivables and Allowanc38
Loan Receivables and Allowance for Loan Losses - Loans Entered into a Loan Modification Program (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total loans entered into a modification program | $ 165 | $ 136 | $ 417 | $ 366 |
Credit cards | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total loans entered into a modification program | 164 | 135 | 415 | 362 |
Consumer installment loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total loans entered into a modification program | 0 | 0 | 0 | 0 |
Commercial credit products | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total loans entered into a modification program | $ 1 | $ 1 | $ 2 | $ 4 |
Loan Receivables and Allowanc39
Loan Receivables and Allowance for Loan Losses - Classified as TDRs (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | $ 816 | $ 763 |
Related allowance | (284) | (259) |
Net recorded investment | 532 | 504 |
Unpaid principal balance | 719 | 665 |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 810 | 756 |
Related allowance | (281) | (256) |
Net recorded investment | 529 | 500 |
Unpaid principal balance | 713 | 659 |
Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 0 | 0 |
Related allowance | 0 | 0 |
Net recorded investment | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 6 | 7 |
Related allowance | (3) | (3) |
Net recorded investment | 3 | 4 |
Unpaid principal balance | $ 6 | $ 6 |
Loan Receivables and Allowanc40
Loan Receivables and Allowance for Loan Losses - Financial Effects of TDRs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income recognized during period when loans were impaired | $ 12 | $ 12 | $ 36 | $ 37 |
Interest income that would have been recorded with original terms | 46 | 38 | 131 | 111 |
Average recorded investment | 799 | 728 | 784 | 726 |
Credit cards | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income recognized during period when loans were impaired | 12 | 12 | 36 | 37 |
Interest income that would have been recorded with original terms | 45 | 38 | 130 | 110 |
Average recorded investment | 793 | 721 | 778 | 718 |
Consumer installment loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income recognized during period when loans were impaired | 0 | 0 | 0 | 0 |
Interest income that would have been recorded with original terms | 0 | 0 | 0 | 0 |
Average recorded investment | 0 | 0 | 0 | 0 |
Commercial credit products | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income recognized during period when loans were impaired | 0 | 0 | 0 | 0 |
Interest income that would have been recorded with original terms | 1 | 0 | 1 | 1 |
Average recorded investment | $ 6 | $ 7 | $ 6 | $ 8 |
Loan Receivables and Allowanc41
Loan Receivables and Allowance for Loan Losses - Payment Defaults (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($)contract | Sep. 30, 2015USD ($)contract | Sep. 30, 2016USD ($)contract | Sep. 30, 2015USD ($)contract | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts defaulted | contract | 14,813 | 12,455 | 30,064 | 24,783 |
Loans defaulted | $ | $ 30 | $ 25 | $ 61 | $ 50 |
Credit cards | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts defaulted | contract | 14,779 | 12,406 | 29,982 | 24,692 |
Loans defaulted | $ | $ 30 | $ 24 | $ 61 | $ 49 |
Consumer installment loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts defaulted | contract | 0 | 0 | 0 | 0 |
Loans defaulted | $ | $ 0 | $ 0 | $ 0 | $ 0 |
Commercial credit products | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts defaulted | contract | 34 | 49 | 82 | 91 |
Loans defaulted | $ | $ 0 | $ 1 | $ 0 | $ 1 |
Loan Receivables and Allowanc42
Loan Receivables and Allowance for Loan Losses - Credit Quality Indicators (Details) | Sep. 30, 2016 | Dec. 31, 2015 |
661 or higher | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 72.80% | 73.00% |
661 or higher | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 78.30% | 77.70% |
661 or higher | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 87.00% | 86.80% |
601 to 660 | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 19.80% | 19.80% |
601 to 660 | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 16.20% | 16.60% |
601 to 660 | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 8.50% | 8.70% |
600 or less | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 7.40% | 7.20% |
600 or less | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 5.50% | 5.70% |
600 or less | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 4.50% | 4.50% |
Loan Receivables and Allowanc43
Loan Receivables and Allowance for Loan Losses - Interest Income by Product (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest and fees on loans (Note 4) | $ 3,771 | $ 3,379 | $ 10,763 | $ 9,685 |
Credit cards | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest and fees on loans (Note 4) | 3,705 | 3,315 | 10,573 | 9,500 |
Consumer installment loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest and fees on loans (Note 4) | 31 | 27 | 86 | 78 |
Commercial credit products | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest and fees on loans (Note 4) | 35 | 36 | 103 | 106 |
Other | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest and fees on loans (Note 4) | $ 0 | $ 1 | $ 1 | $ 1 |
Loan Receivables and Allowanc44
Loan Receivables and Allowance for Loan Losses - Narrative (Details) - USD ($) $ in Billions | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of loan receivable with no FICO score | 0.80% | 0.90% |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused line of credit | $ 343 | $ 322 |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Variable Interest Entity [Line Items] | |||||||
Loan receivables, net | $ 66,529 | $ 64,793 | |||||
Other assets(b) | [1] | 2,004 | 2,080 | ||||
Total assets | 87,159 | 83,990 | |||||
Total liabilities | 73,178 | 71,386 | |||||
Allowance for loan losses | (4,115) | $ (3,894) | (3,497) | $ (3,371) | $ (3,302) | $ (3,236) | |
Loan receivable, before allowance for losses | [2],[3] | 70,644 | 68,290 | ||||
Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Loan receivables, net | [4] | 22,041 | 24,338 | ||||
Other assets(b) | [5] | 127 | 127 | ||||
Total assets | 22,168 | 24,465 | |||||
Borrowings | 12,411 | 13,589 | |||||
Other liabilities | 20 | 30 | |||||
Total liabilities | 12,431 | 13,619 | |||||
Allowance for loan losses | (1,100) | (1,100) | |||||
Loan receivable, before allowance for losses | 23,100 | 25,500 | |||||
Other Assets [Member] | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Restricted cash and cash equivalents | $ 118 | $ 118 | |||||
[1] | Other assets include restricted cash and equivalents of $379 million and $391 million at September 30, 2016 and December 31, 2015, respectively. | ||||||
[2] | At September 30, 2016 and December 31, 2015, loan receivables included deferred expense, net of deferred income, of $72 million and $63 million, respectively. | ||||||
[3] | Total loan receivables include $23.1 billion and $25.5 billion of restricted loans of consolidated securitization entities at September 30, 2016 and December 31, 2015, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. | ||||||
[4] | Includes $1.1 billion of related allowance for loan losses resulting in gross restricted loans of $23.1 billion and $25.5 billion at September 30, 2016 and December 31, 2015, respectively. | ||||||
[5] | Includes $118 million of segregated funds held by the VIEs at September 30, 2016 and December 31, 2015, respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Condensed Consolidated Statements of Financial Position. |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Variable Interest Entity [Line Items] | ||||||||
Loans and Leases Receivable, Allowance | $ 4,115 | $ 3,371 | $ 4,115 | $ 3,371 | $ 3,894 | $ 3,497 | $ 3,302 | $ 3,236 |
Interest and fees on loans (Note 4) | 3,771 | 3,379 | 10,763 | 9,685 | ||||
Provision for loan losses | 986 | 702 | 2,910 | 2,129 | ||||
Variable Interest Entity, Primary Beneficiary | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Loans and Leases Receivable, Allowance | 1,100 | 1,100 | $ 1,100 | |||||
Interest and fees on loans (Note 4) | 1,100 | 1,200 | 3,400 | 3,700 | ||||
Provision for loan losses | 212 | 191 | 729 | 713 | ||||
Interest on borrowings of consolidated securitization entities | $ 63 | $ 54 | $ 180 | $ 159 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 1,461 | $ 1,298 |
Accumulated amortization | (728) | (597) |
Net | $ 733 | 701 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years | |
Gross carrying amount | $ 1,126 | 1,045 |
Accumulated amortization | (591) | (505) |
Net | $ 535 | 540 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years | |
Gross carrying amount | $ 335 | 253 |
Accumulated amortization | (137) | (92) |
Net | $ 198 | $ 161 |
Intangible Assets Narrative (De
Intangible Assets Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets acquired | $ 163 | |||
Selling and Marketing Expense [Member] | Retail Partner Contracts | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 26 | $ 21 | 76 | $ 63 |
Other Expense | Finite-Lived Intangible Assets, Excluding Retail Partner Contracts | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 18 | $ 17 | $ 55 | $ 42 |
Deposits - Schedule of Deposit
Deposits - Schedule of Deposit Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |||
Interest-bearing deposits, amount | $ 49,611 | $ 43,215 | |
Average Rate Domestic Deposits | [1] | 1.60% | 1.60% |
Non-interest-bearing deposits, amount | $ 204 | $ 152 | |
Total deposits | $ 49,815 | $ 43,367 | |
[1] | Based on interest expense for the nine months ended September 30, 2016 and the year ended December 31, 2015 and average deposits balances. |
Deposits - Maturity Schedule (D
Deposits - Maturity Schedule (Details) $ in Millions | Sep. 30, 2016USD ($) |
Banking and Thrift [Abstract] | |
2,016 | $ 2,942 |
2,017 | 13,921 |
2,018 | 4,089 |
2,019 | 4,141 |
2,020 | 2,855 |
Thereafter | $ 4,051 |
Deposits - Narrative (Details)
Deposits - Narrative (Details) - USD ($) $ in Billions | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Deposits [Line Items] | ||
Interest bearing deposits with certificates of $100,000 or more | $ 14 | $ 11.9 |
Time Deposit, $100,000 or More, Portion That is $250,000 or More | 4.3 | $ 3.6 |
Program Arranger | ||
Schedule of Deposits [Line Items] | ||
Broker network deposit sweeps | 2.3 | |
Demand deposits | ||
Schedule of Deposits [Line Items] | ||
Demand deposits | $ 15.3 |
Borrowings - Borrowings Schedul
Borrowings - Borrowings Schedule (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Amount | |||
Unsecured debt | $ 0 | $ 4,133 | |
Long-term Debt | [1] | 20,167 | 24,279 |
Senior unsecured notes | |||
Amount | |||
Unsecured debt | [1] | $ 7,756 | 6,557 |
Average rate | |||
Weighted average interest rate | 3.25% | ||
New Bank Term Loan Facility [Member] | |||
Amount | |||
Unsecured debt | [1] | $ 0 | 4,133 |
Fixed Senior Unsecured Notes [Member] | Senior unsecured notes | |||
Amount | |||
Unsecured debt | [1] | $ 6,809 | 6,308 |
Average rate | |||
Weighted average interest rate | 3.41% | ||
Floating Senior Secured Notes [Member] | Senior unsecured notes | |||
Amount | |||
Unsecured debt | [1] | $ 947 | 249 |
Average rate | |||
Weighted average interest rate | 2.14% | ||
Variable Interest Entity, Primary Beneficiary | |||
Average rate | |||
Weighted average interest rate | 1.72% | ||
Borrowings of consolidated securitization entities | [1] | $ 12,411 | 13,589 |
Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings [Member] | |||
Average rate | |||
Weighted average interest rate | 1.90% | ||
Borrowings of consolidated securitization entities | [1] | $ 8,704 | 6,383 |
Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings [Member] | |||
Average rate | |||
Weighted average interest rate | 1.32% | ||
Borrowings of consolidated securitization entities | [1] | $ 3,707 | $ 7,206 |
Minimum [Member] | Fixed Senior Unsecured Notes [Member] | Senior unsecured notes | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 1.87% | ||
Minimum [Member] | Floating Senior Secured Notes [Member] | Senior unsecured notes | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 1.98% | ||
Minimum [Member] | Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings [Member] | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 1.35% | ||
Minimum [Member] | Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings [Member] | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 1.02% | ||
Maximum [Member] | Fixed Senior Unsecured Notes [Member] | Senior unsecured notes | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | ||
Maximum [Member] | Floating Senior Secured Notes [Member] | Senior unsecured notes | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.20% | ||
Maximum [Member] | Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings [Member] | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.47% | ||
Maximum [Member] | Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings [Member] | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 1.64% | ||
[1] | The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance cost. |
Borrowings - Borrowings Maturit
Borrowings - Borrowings Maturity Schedule (Details) $ in Millions | Sep. 30, 2016USD ($) |
Banking and Thrift [Abstract] | |
2,016 | $ 0 |
2,017 | 4,377 |
2,018 | 3,157 |
2,019 | 6,435 |
2,020 | 2,098 |
Thereafter | $ 4,158 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) $ in Millions | Aug. 09, 2016 | May 09, 2016 | Jul. 31, 2016 | Sep. 30, 2016 | Aug. 04, 2016 |
Variable Interest Entity, Primary Beneficiary | |||||
Debt Instrument [Line Items] | |||||
Remaining undrawn capacity | $ 6,600 | ||||
Senior Notes | Floating Rate Senior Notes Due 2017 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 200 | $ 500 | |||
Senior Notes | Fixed Rate Senior Notes Due 2026 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 500 | ||||
Stated interest rate | 3.70% | ||||
Unsecured Debt | Bank Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Repayment of third party debt | 4,100 | ||||
London Interbank Offered Rate (LIBOR) [Member] | Senior Notes | Floating Rate Senior Notes Due 2017 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 1.40% | 1.40% | |||
Revolving Credit Facility | Unsecured Debt | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Expiration Period | 3 years | ||||
Undrawn capacity | $ 500 |
Fair Value Measurement - Recurr
Fair Value Measurement - Recurring Fair Value Measurements(Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | $ 15 | $ 15 | |
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | 15 | 15 | |
Total | 3,356 | 3,142 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | 15 | 15 | |
Total | 15 | 15 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | 0 | 0 | |
Total | 3,292 | 3,078 | |
Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | 0 | 0 | |
Total | 49 | 49 | |
U.S. Government and Federal Agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 2,101 | 2,761 | |
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 2,101 | 2,761 | |
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 2,101 | 2,761 | |
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
State and municipal | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 49 | 49 | |
State and municipal | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 49 | 49 | |
State and municipal | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
State and municipal | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
State and municipal | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 49 | 49 | |
Residential mortgage-backed | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [1] | 1,191 | 317 |
Residential mortgage-backed | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 1,191 | 317 | |
Residential mortgage-backed | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
Residential mortgage-backed | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 1,191 | 317 | |
Residential mortgage-backed | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | $ 0 | $ 0 | |
[1] | At September 30, 2016 and December 31, 2015, $370 million and $317 million, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. |
Fair Value Measurement - Change
Fair Value Measurement - Changes in Level 3 Instruments (Details) - Level 3 - Fair Value, Measurements, Recurring - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | $ 49 | $ 54 | $ 49 | $ 60 |
Net realized/unrealized gains (losses) | 2 | 0 | 4 | 2 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | (6) |
Settlements | (2) | (4) | (4) | (6) |
Balance at end of period | $ 49 | $ 50 | $ 49 | $ 50 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value Asset and Liabilities Carried at Other than Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | $ 13,588 | $ 12,325 |
Other assets | [2] | 379 | 391 |
Loan receivables, net | [3] | 73,444 | 71,386 |
Deposits | 50,486 | 43,840 | |
Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 13,588 | 12,325 |
Other assets | [2] | 379 | 391 |
Loan receivables, net | [3] | 66,529 | 64,793 |
Deposits | 49,815 | 43,367 | |
Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 13,388 | 11,865 |
Other assets | [2] | 379 | 391 |
Loan receivables, net | [3] | 0 | 0 |
Deposits | 0 | 0 | |
Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 200 | 460 |
Other assets | [2] | 0 | 0 |
Loan receivables, net | [3] | 0 | 0 |
Deposits | 50,486 | 43,840 | |
Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 0 | 0 |
Other assets | [2] | 0 | 0 |
Loan receivables, net | [3] | 73,444 | 71,386 |
Deposits | 0 | 0 | |
Variable Interest Entity, Primary Beneficiary | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 12,507 | 13,562 | |
Variable Interest Entity, Primary Beneficiary | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 12,411 | 13,589 | |
Variable Interest Entity, Primary Beneficiary | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 0 | 0 | |
Variable Interest Entity, Primary Beneficiary | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 9,248 | 7,566 | |
Variable Interest Entity, Primary Beneficiary | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 3,259 | 5,996 | |
Bank Term Loan | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 4,125 | ||
Bank Term Loan | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 4,133 | ||
Bank Term Loan | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 0 | ||
Bank Term Loan | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 0 | ||
Bank Term Loan | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 4,125 | ||
Senior Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 8,057 | 6,574 | |
Senior Notes | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 7,756 | 6,557 | |
Senior Notes | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 0 | 0 | |
Senior Notes | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 8,057 | 6,574 | |
Senior Notes | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | $ 0 | $ 0 | |
[1] | For cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less. | ||
[2] | This balance relates to restricted cash and equivalents, which is included in other assets. | ||
[3] | Under certain retail partner program agreements, the expected sales proceeds related to the sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above. |
Regulatory and Capital Adequa58
Regulatory and Capital Adequacy (Capital Amounts and Ratios) (Details) - Basel III - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||||
Capital conservation buffer | 0.625% | |||
Common equity Tier I capital | ||||
Common equity, actual | $ 8,836 | $ 7,781 | ||
Common equity, actual (percent) | [1] | 16.00% | 15.30% | |
Common equity, minimum for capital adequacy purposes | $ 2,479 | $ 2,286 | ||
Common equity, minimum for capital adequacy purposes (percent) | 4.50% | [2] | 4.50% | |
Common equity, minimum to be well-capitalized under prompt corrective action provisions | $ 3,581 | $ 3,302 | ||
Common equity, minimum to be well-capitalized under prompt corrective action provisions (percent) | 6.50% | 6.50% | ||
Total risk-based capital | ||||
Actual | $ 9,559 | $ 8,442 | ||
Actual (percent) | [1] | 17.40% | 16.60% | |
Minimum for capital adequacy purposes | $ 4,407 | $ 4,064 | ||
Minimum for capital adequacy purposes (percent) | 8.00% | [2] | 8.00% | |
Minimum to be well-capitalized under prompt corrective action provisions | $ 5,509 | $ 5,080 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 10.00% | 10.00% | ||
Tier 1 risk-based capital | ||||
Tier One Risk Based Capital | $ 8,836 | $ 7,781 | ||
Actual (percent) | [1] | 16.00% | 15.30% | |
Minimum for capital adequacy purposes | $ 3,306 | $ 3,048 | ||
Minimum for capital adequacy purposes (percent) | 6.00% | [2] | 6.00% | |
Minimum to be well-capitalized under prompt corrective action provisions | $ 4,407 | $ 4,064 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 8.00% | 8.00% | ||
Tier 1 leverage | ||||
Tier One Leverage Capital | $ 8,836 | $ 7,781 | ||
Actual (percent) | [1] | 13.30% | 13.10% | |
Minimum for capital adequacy purposes | $ 2,659 | $ 2,384 | ||
Minimum for capital adequacy purposes (percent) | 4.00% | [2] | 4.00% | |
Minimum to be well-capitalized under prompt corrective action provisions | $ 3,324 | $ 2,980 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 5.00% | 5.00% | ||
Parent Company | ||||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||||
Capital conservation buffer | 0.625% | |||
Common equity Tier I capital | ||||
Common equity, actual | $ 12,871 | $ 11,633 | ||
Common equity, actual (percent) | [1] | 18.20% | 16.80% | |
Common equity, minimum for capital adequacy purposes | $ 3,180 | $ 3,115 | ||
Common equity, minimum for capital adequacy purposes (percent) | 4.50% | [2] | 4.50% | |
Total risk-based capital | ||||
Actual | $ 13,794 | $ 12,531 | ||
Actual (percent) | [1] | 19.50% | 18.10% | |
Minimum for capital adequacy purposes | $ 5,653 | $ 5,538 | ||
Minimum for capital adequacy purposes (percent) | 8.00% | [2] | 8.00% | |
Tier 1 risk-based capital | ||||
Tier One Risk Based Capital | $ 12,871 | $ 11,633 | ||
Actual (percent) | [1] | 18.20% | 16.80% | |
Minimum for capital adequacy purposes | $ 4,240 | $ 4,153 | ||
Minimum for capital adequacy purposes (percent) | 6.00% | [2] | 6.00% | |
Tier 1 leverage | ||||
Tier One Leverage Capital | $ 12,871 | $ 11,633 | ||
Actual (percent) | [1] | 15.30% | 14.40% | |
Minimum for capital adequacy purposes | $ 3,356 | $ 3,236 | ||
Minimum for capital adequacy purposes (percent) | 4.00% | [2] | 4.00% | |
[1] | Capital ratios are calculated based on the Basel III Standardized Approach rules, subject to applicable transition provisions, at September 30, 2016 and December 31, 2015 | |||
[2] | For calendar year 2016, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 0.625 percentage points to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 604 | $ 574 | $ 1,675 | $ 1,667 |
Weighted average common shares outstanding, basic (in shares) | 828 | 834 | 832 | 834 |
Effect of dilutive securities (in shares) | 3 | 2 | 2 | 1 |
Weighted average common shares outstanding, dilutive (in shares) | 831 | 836 | 834 | 835 |
Earnings per basic common share (in usd per share) | $ 0.73 | $ 0.69 | $ 2.01 | $ 2 |
Earnings per diluted common share (in usd per share) | $ 0.73 | $ 0.69 | $ 2.01 | $ 2 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount less than | 3,000,000 | 1,000,000 | 3,000,000 | 1,000,000 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits, excluding related interest expense and penalties | $ 167 | $ 327 |
Portion that, if recognized, would reduce tax expense and effective tax rate | 90 | 79 |
Accrued interest on unrecognized tax benefits | 10 | 3 |
Accrued penalties on unrecognized tax benefits | $ 0 | $ 0 |
Legal Proceedings and Regulat62
Legal Proceedings and Regulatory Matters (Details) | Jun. 19, 2014USD ($) | Jan. 17, 2014USD ($) | Sep. 30, 2016putative_class_action | Sep. 30, 2015USD ($) | Dec. 10, 2013USD ($) |
Loss Contingencies [Line Items] | |||||
Number of putative class actions | putative_class_action | 1 | ||||
Loss Contingency, Claims Settled, Number | putative_class_action | 10 | ||||
CareCredit CFPB Consent Order | Customer Refund | |||||
Loss Contingencies [Line Items] | |||||
Amount of settlement | $ 56,000,000 | ||||
2014 CFPB Consent Order | |||||
Loss Contingencies [Line Items] | |||||
Remediation, Amount Refunded Prior to Settlement | 11,000,000 | ||||
Payment of civil money penalties | $ 3,500,000 | ||||
2014 CFPB and DOJ Consent Order | |||||
Loss Contingencies [Line Items] | |||||
Remediation, Amount Refunded Prior to Settlement | $ 132,000,000 | ||||
Amount of settlement that consists of balance credits and waivers to previously charged-off account | 185,000,000 | ||||
Other Credits or Payments | $ 15,000,000 | ||||
Travaglio et al. v. GE Capital Retail Bank and Allied Interstate LLC | |||||
Loss Contingencies [Line Items] | |||||
Damages sought per violation | $ 1,500 | ||||
Abdeljalil et al. v. GE Capital Retail Bank [Member] | |||||
Loss Contingencies [Line Items] | |||||
Damages sought per violation | $ 1,500 | ||||
Maximum [Member] | CareCredit CFPB Consent Order | |||||
Loss Contingencies [Line Items] | |||||
Loss Contingency, Estimate of Possible Loss | $ 34,100,000 |