Cover Document
Cover Document - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 20, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-36560 | |
Entity Registrant Name | SYNCHRONY FINANCIAL | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 51-0483352 | |
Entity Address, Address Line One | 777 Long Ridge Road | |
Entity Address, City or Town | Stamford, | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06902 | |
City Area Code | 203 | |
Local Phone Number | 585-2400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Smaller Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 581,598,847 | |
Entity Central Index Key | 0001601712 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | SYF | |
Security Exchange Name | NYSE | |
Series A Preferred Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Depositary Shares Each Representing a 1/40th Interest in a Share of 5.625% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A | |
Trading Symbol | SYFPrA | |
Security Exchange Name | NYSE |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Interest income: | ||
Interest and fees on loans (Note 4) | $ 3,732 | $ 4,340 |
Interest on cash and debt securities | 10 | 67 |
Total interest income | 3,742 | 4,407 |
Interest expense: | ||
Interest on deposits | 170 | 356 |
Interest on senior unsecured notes | 82 | 88 |
Total interest expense | 303 | 517 |
Net interest income | 3,439 | 3,890 |
Retailer share arrangements | (989) | (926) |
Provision for credit losses (Note 4) | 334 | 1,677 |
Net interest income, after retailer share arrangements and provision for credit losses | 2,116 | 1,287 |
Other income: | ||
Interchange revenue | 171 | 161 |
Debt cancellation fees | 69 | 69 |
Loyalty programs | (179) | (158) |
Other | 70 | 25 |
Total other income | 131 | 97 |
Other expense: | ||
Employee costs | 364 | 324 |
Professional fees | 190 | 197 |
Marketing and business development | 95 | 111 |
Information processing | 131 | 123 |
Other | 152 | 247 |
Total other expense | 932 | 1,002 |
Earnings before provision for income taxes | 1,315 | 382 |
Provision for income taxes (Note 12) | 290 | 96 |
Net earnings | 1,025 | 286 |
Net earnings available to common stockholders | $ 1,014 | $ 275 |
Earnings per share | ||
Basic (in usd per share) | $ 1.74 | $ 0.45 |
Diluted (in usd per share) | $ 1.73 | $ 0.45 |
Variable Interest Entity, Primary Beneficiary | ||
Interest income: | ||
Interest and fees on loans (Note 4) | $ 1,100 | $ 1,300 |
Interest expense: | ||
Interest on borrowings of consolidated securitization entities | 51 | 73 |
Provision for credit losses (Note 4) | $ (57) | $ 536 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 1,025 | $ 286 |
Other comprehensive income (loss) | ||
Debt securities | (6) | 17 |
Currency translation adjustments | 2 | (8) |
Employee benefit plans | (1) | 0 |
Other comprehensive income (loss) | (5) | 9 |
Comprehensive income | $ 1,020 | $ 295 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Financial Position - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Assets | |||
Cash and equivalents | $ 16,620 | $ 11,524 | |
Debt securities (Note 3) | 6,550 | 7,469 | |
Loan receivables: (Notes 4 and 5) | [1],[2] | 76,858 | 81,867 |
Less: Allowance for credit losses | (9,901) | (10,265) | |
Loan receivables, net | 66,957 | 71,602 | |
Loan receivables held for sale (Note 4) | 23 | 5 | |
Goodwill | 1,104 | 1,078 | |
Intangible assets, net (Note 6) | 1,169 | 1,125 | |
Other assets | 3,431 | 3,145 | |
Total assets | 95,854 | 95,948 | |
Deposits: (Note 7) | |||
Interest-bearing deposit accounts | 62,419 | 62,469 | |
Non-interest-bearing deposit accounts | 342 | 313 | |
Total deposits | 62,761 | 62,782 | |
Borrowings: (Notes 5 and 8) | |||
Senior unsecured notes | 7,967 | 7,965 | |
Total borrowings | [3] | 15,160 | 15,775 |
Accrued expenses and other liabilities | 4,494 | 4,690 | |
Total liabilities | 82,415 | 83,247 | |
Equity: | |||
Preferred stock, par share value $0.001 per share; 750,000 shares authorized; 750,000 shares issued and outstanding at both March 31, 2021 and December 31, 2020 and aggregate liquidation preference of $750 at both March 31, 2021 and December 31, 2020 | 734 | 734 | |
Common Stock, par share value $0.001 per share; 4,000,000,000 shares authorized; 833,984,684 shares issued at both March 31, 2021 and December 31, 2020; 581,129,526 and 584,009,550 shares outstanding at March 31, 2021 and December 31, 2020, respectively | 1 | 1 | |
Additional paid-in capital | 9,592 | 9,570 | |
Retained earnings | 11,470 | 10,621 | |
Accumulated other comprehensive income (loss): | |||
Debt securities | 19 | 25 | |
Currency translation adjustments | (20) | (22) | |
Employee benefit plans | (55) | (54) | |
Treasury stock, at cost; 252,855,158 and 249,975,134 shares at March 31, 2021 and December 31, 2020, respectively | (8,302) | (8,174) | |
Total equity | 13,439 | 12,701 | |
Total liabilities and equity | 95,854 | 95,948 | |
Restricted loans of consolidated securitization entities | |||
Assets | |||
Loan receivables: (Notes 4 and 5) | 23,035 | 25,395 | |
Less: Allowance for credit losses | (2,400) | (2,700) | |
Loan receivables, net | [4] | 20,598 | 22,683 |
Other assets | [5] | 437 | 52 |
Total assets | 21,035 | 22,735 | |
Borrowings: (Notes 5 and 8) | |||
Borrowings of consolidated securitization entities | [3] | 7,193 | 7,810 |
Total liabilities | 7,213 | 7,833 | |
Unsecuritized Loans Held for Investment [Member] | |||
Assets | |||
Loan receivables: (Notes 4 and 5) | $ 53,823 | $ 56,472 | |
[1] | Total loan receivables include $23.0 billion and $25.4 billion of restricted loans of consolidated securitization entities at March 31, 2021 and December 31, 2020, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. | ||
[2] | At March 31, 2021 and December 31, 2020, loan receivables included deferred costs, net of deferred income, of $158 million and $153 million, respectively. | ||
[3] | The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. | ||
[4] | Includes $2.4 billion and $2.7 billion of related allowance for credit losses resulting in gross restricted loans of $23.0 billion and $25.4 billion at March 31, 2021 and December 31, 2020, respectively. | ||
[5] | Includes $433 million and $48 million of segregated funds held by the VIEs at March 31, 2021 and December 31, 2020, respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Condensed Consolidated Statements of Financial Position. |
Consolidated Statements of Fina
Consolidated Statements of Financial Position Statement (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 750,000 | 750,000 |
Preferred Stock, Shares Outstanding | 750,000 | 750,000 |
Preferred Stock, Shares Issued | 750,000 | 750,000 |
Preferred Stock, Liquidation Preference, Value | $ 750 | $ 750 |
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 | 833,984,684 |
Common Stock, Shares, Outstanding | 581,129,526 | 584,009,550 |
Treasury Stock, Shares | 252,855,158 | 249,975,134 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Retained EarningsCumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Preferred Stock, Shares Issued | 750,000 | ||||||||||
Balance (in shares) at Dec. 31, 2019 | 833,985,000 | ||||||||||
Balance at Dec. 31, 2019 | $ 15,088 | $ 12,812 | $ 734 | $ 1 | $ 9,537 | $ 12,117 | $ 9,841 | $ (58) | $ (7,243) | ||
Balance (Accounting Standards Update 2016-13) at Dec. 31, 2019 | $ (2,276) | $ (2,276) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net earnings | 286 | 286 | |||||||||
Other comprehensive income | 9 | 9 | |||||||||
Purchases of treasury stock | (985) | (985) | |||||||||
Stock-based compensation (in shares) | 0 | ||||||||||
Stock-based compensation | $ (6) | (14) | |||||||||
Stock-based compensation, treasury stock issued | 29 | ||||||||||
Treasury Stock Reissued at Lower than Repurchase Price | (21) | ||||||||||
Preferred Stock, Dividends Per Share, Declared | $ 14.22 | ||||||||||
Dividends, Preferred Stock, Cash | $ (11) | (11) | |||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.22 | ||||||||||
Dividends, Common Stock, Cash | $ (135) | (135) | |||||||||
Balance (in shares) at Mar. 31, 2020 | 833,985,000 | ||||||||||
Balance at Mar. 31, 2020 | $ 11,970 | $ 734 | $ 1 | 9,523 | 9,960 | (49) | (8,199) | ||||
Preferred Stock, Shares Issued | 750,000 | ||||||||||
Preferred Stock, Shares Issued | 750,000 | 750,000 | |||||||||
Balance (in shares) at Dec. 31, 2020 | 833,984,684 | 833,985,000 | |||||||||
Balance at Dec. 31, 2020 | $ 12,701 | $ 734 | $ 1 | 9,570 | 10,621 | (51) | (8,174) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net earnings | 1,025 | 1,025 | |||||||||
Other comprehensive income | (5) | (5) | |||||||||
Purchases of treasury stock | (200) | (200) | |||||||||
Stock-based compensation (in shares) | 0 | ||||||||||
Stock-based compensation | $ 57 | 22 | |||||||||
Stock-based compensation, treasury stock issued | 72 | ||||||||||
Treasury Stock Reissued at Lower than Repurchase Price | (37) | ||||||||||
Preferred Stock, Dividends Per Share, Declared | $ 14.06 | ||||||||||
Dividends, Preferred Stock, Cash | $ (11) | (11) | |||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.22 | ||||||||||
Dividends, Common Stock, Cash | $ (128) | (128) | |||||||||
Balance (in shares) at Mar. 31, 2021 | 833,984,684 | 833,985,000 | |||||||||
Balance at Mar. 31, 2021 | $ 13,439 | $ 734 | $ 1 | $ 9,592 | $ 11,470 | $ (56) | $ (8,302) | ||||
Preferred Stock, Shares Issued | 750,000 | 750,000 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows - operating activities | ||
Net earnings | $ 1,025 | $ 286 |
Adjustments to reconcile net earnings to cash provided from operating activities | ||
Provision for credit losses | 334 | 1,677 |
Deferred income taxes | 114 | (109) |
Depreciation and amortization | 95 | 96 |
(Increase) decrease in interest and fees receivable | 288 | (41) |
(Increase) decrease in other assets | 87 | (71) |
Increase (decrease) in accrued expenses and other liabilities | (234) | (481) |
All other operating activities | 130 | 180 |
Cash provided from (used for) operating activities | 1,839 | 1,537 |
Cash flows - investing activities | ||
Maturity and sales of debt securities | 2,514 | 1,175 |
Purchases of debt securities | (1,621) | (1,382) |
Proceeds from sale of loan receivables | 0 | 709 |
Net (increase) decrease in loan receivables, including held for sale | 3,996 | 3,464 |
All other investing activities | (252) | (79) |
Cash provided from (used for) investing activities | 4,637 | 3,887 |
Borrowings of consolidated securitization entities | ||
Proceeds from issuance of securitized debt | 250 | 500 |
Maturities and repayment of securitized debt | (868) | (1,623) |
Senior unsecured notes | ||
Maturities and repayment of senior unsecured notes | 0 | (1,500) |
Dividends paid on preferred stock | (11) | (11) |
Net increase (decrease) in deposits | (35) | (528) |
Purchases of treasury stock | (200) | (985) |
Dividends paid on common stock | (128) | (135) |
All other financing activities | 13 | (5) |
Cash provided from (used for) financing activities | (979) | (4,287) |
Increase (decrease) in cash and equivalents, including restricted amounts | 5,497 | 1,137 |
Cash and equivalents, including restricted amounts, at beginning of period | 11,604 | 12,647 |
Cash and equivalents | 16,620 | 13,704 |
Restricted cash and equivalents included in other assets | 481 | 80 |
Total cash and equivalents, including restricted amounts, at end of period | $ 17,101 | $ 13,784 |
Business Description
Business Description | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description | BUSINESS DESCRIPTION Synchrony Financial (the “Company”) provides a range of credit products through financing 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 primarily offer private label, Dual Card and general purpose co-branded credit cards, promotional financing and installment lending, and savings products insured by the Federal Deposit Insurance Corporation ("FDIC") through Synchrony Bank (the “Bank”). 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 | 3 Months Ended |
Mar. 31, 2021 | |
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 debt 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 primarily 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 period-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 2020 annual consolidated financial statements and the related notes in our Annual Report on Form 10-K for the year ended December 31, 2020 (our "2020 Form 10-K"). See Note 2. Basis of Presentation and Summary of Significant Accounting Policies to our 2020 annual consolidated financial statements in our 2020 Form 10-K, for additional information on our other significant accounting policies. |
Debt Securities
Debt Securities | 3 Months Ended |
Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | DEBT SECURITIES All of our debt securities are classified as available-for-sale and are held to meet our liquidity objectives or to comply with the Community Reinvestment Act (“CRA”). Our debt securities consist of the following: March 31, 2021 December 31, 2020 Gross Gross Gross Gross Amortized unrealized unrealized Estimated Amortized unrealized unrealized Estimated ($ in millions) cost gains losses fair value cost gains losses fair value U.S. government and federal agency $ 2,989 $ 1 $ — $ 2,990 $ 3,926 $ 1 $ — $ 3,927 State and municipal 37 — (2) 35 40 — (1) 39 Residential mortgage-backed (a) 769 22 (3) 788 817 25 — 842 Asset-backed (b) 2,721 8 — 2,729 2,652 9 — 2,661 Other 8 — — 8 — — — — Total $ 6,524 $ 31 $ (5) $ 6,550 $ 7,435 $ 35 $ (1) $ 7,469 _______________________ (a) All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At March 31, 2021 and December 31, 2020, $194 million and $229 million of residential mortgage-backed securities, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. (b) Our asset-backed securities are collateralized by credit card and auto loans. The following table presents the estimated fair values and gross unrealized losses of our available-for-sale debt securities: In loss position for Less than 12 months 12 months or more Gross Gross Estimated unrealized Estimated unrealized ($ in millions) fair value losses fair value losses At March 31, 2021 U.S. government and federal agency $ 106 $ — $ — $ — State and municipal 1 — 20 (2) Residential mortgage-backed 130 (3) — — Asset-backed 766 — — — Other — — — — Total $ 1,003 $ (3) $ 20 $ (2) At December 31, 2020 U.S. government and federal agency $ — $ — $ — $ — State and municipal 3 — 21 (1) Residential mortgage-backed 6 — — — Asset-backed 242 — — — Total $ 251 $ — $ 21 $ (1) We regularly review debt securities for impairment resulting from credit loss using both qualitative and quantitative criteria, as necessary based on the composition of the portfolio at period end. Based on our assessment, no material impairments for credit losses were recognized during the period. 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. Contractual Maturities of Investments in Available-for-Sale Debt Securities Amortized Estimated Weighted At March 31, 2021 ($ in millions) cost fair value Average yield (a) Due Within one year $ 3,689 $ 3,693 0.4 % After one year through five years $ 2,025 $ 2,029 0.4 % After five years through ten years $ 157 $ 164 2.5 % After ten years $ 653 $ 664 1.7 % _____________________ (a) Weighted average yield is calculated based on the amortized cost of each security. In calculating yield, no adjustment has been made with respect to any tax-exempt obligations. 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 months ended March 31, 2021 and 2020. |
Loan Receivables and Allowance
Loan Receivables and Allowance for Credit Losses | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Loan Receivables and Allowance for Credit Losses | LOAN RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES ($ in millions) March 31, 2021 December 31, 2020 Credit cards $ 73,244 $ 78,455 Consumer installment loans 2,319 2,125 Commercial credit products 1,248 1,250 Other 47 37 Total loan receivables, before allowance for credit losses (a)(b) $ 76,858 $ 81,867 _______________________ (a) Total loan receivables include $23.0 billion and $25.4 billion of restricted loans of consolidated securitization entities at March 31, 2021 and December 31, 2020, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. (b) At March 31, 2021 and December 31, 2020, loan receivables included deferred costs, net of deferred income, of $158 million and $153 million, respectively. Allowance for Credit Losses ($ in millions) Balance at January 1, 2021 Provision charged to operations Gross charge-offs Recoveries Other Balance at Credit cards $ 10,076 $ 341 $ (901) $ 219 $ — $ 9,735 Consumer installment loans 127 (18) (15) 5 1 100 Commercial credit products 61 10 (9) 2 — 64 Other 1 1 — — — 2 Total $ 10,265 $ 334 $ (925) $ 226 $ 1 $ 9,901 ($ in millions) Balance at January 1, 2020 Impact of ASU 2016-13 Adoption Post-Adoption Balance at January 1, 2020 Provision charged to operations Gross charge-offs Recoveries Balance at Credit cards $ 5,506 $ 2,989 $ 8,495 $ 1,635 $ (1,395) $ 294 $ 9,029 Consumer installment loans 46 26 72 24 (16) 3 83 Commercial credit products 49 6 55 18 (14) 3 62 Other 1 — 1 — — — 1 Total $ 5,602 $ 3,021 $ 8,623 $ 1,677 $ (1,425) $ 300 $ 9,175 Our allowance for credit losses at March 31, 2021 and December 31, 2020 reflects our estimate of expected credit losses for the life of the loan receivables on our consolidated statement of financial position. The reasonable and supportable forecast period used in our estimate of credit losses at March 31, 2021 was 12 months, consistent with the forecast period utilized since adoption of CECL. Beyond the reasonable and supportable forecast period, we revert to historical mean information at the loan receivables segment level over a 6-month period, gradually increasing the weight of historical losses by an equal amount each month during the reversion period, and utilize historical loss information thereafter for the remaining life of the portfolio. The reversion period and methodology remain unchanged since the adoption of CECL. Losses on loan receivables are estimated and recognized upon origination of the loan, based on expected credit losses for the life of the loan balance at March 31, 2021. Expected credit loss estimates are developed using both quantitative models and qualitative adjustments, and incorporates a macroeconomic forecast, as described within the 2020 Form 10-K. The current and forecasted economic conditions at the balance sheet date including the impact of the COVID-19 pandemic influenced our current estimate of expected credit losses. These conditions have improved as compared to December 31, 2020. We also continue to experience improvements in customer payment behavior, which include the effects of recent governmental stimulus actions, that has contributed to a reduction in loan receivables balances and delinquent accounts. Accordingly, our allowance for credit losses decreased by $364 million to $9.9 billion during the three months ended March 31, 2021. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies to our 2020 annual consolidated financial statements in our 2020 Form 10-K, for additional information on our significant accounting policies related to our allowance for credit losses. Delinquent and Non-accrual Loans At March 31, 2021 ($ 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 $ 964 $ 1,154 $ 2,118 $ 1,154 $ — Consumer installment loans 19 4 23 — 4 Commercial credit products 22 12 34 12 — Total delinquent loans $ 1,005 $ 1,170 $ 2,175 $ 1,166 $ 4 Percentage of total loan receivables 1.3 % 1.5 % 2.8 % 1.5 % — % At December 31, 2020 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing Credit cards $ 1,325 $ 1,128 $ 2,453 $ 1,128 $ — Consumer installment loans 26 5 31 — 5 Commercial credit products 20 10 30 10 — Total delinquent loans $ 1,371 $ 1,143 $ 2,514 $ 1,138 $ 5 Percentage of total loan receivables 1.7 % 1.4 % 3.1 % 1.4 % — % Troubled Debt Restructurings 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. Our TDR loans do not include loans that are classified as loan receivables held for sale or short-term modifications made on a good faith basis in response to COVID-19. We have both internal and external loan modification programs. We use long-term modification programs for borrowers experiencing financial difficulty as a loss mitigation strategy to improve long-term collectability of the loans that are classified as TDRs. The long-term 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 long-term 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 our TDR loan modifications during the periods presented: Three months ended March 31, ($ in millions) 2021 2020 Credit cards $ 261 $ 225 Consumer installment loans — — Commercial credit products 1 1 Total $ 262 $ 226 Our allowance for credit 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 on an individual basis but instead estimate an allowance for credit losses on a collective basis. At March 31, 2021 ($ in millions) Total recorded Related allowance Net recorded investment Unpaid principal balance Credit cards $ 1,309 $ (584) $ 725 $ 1,143 Consumer installment loans — — — — Commercial credit products 4 (2) 2 4 Total $ 1,313 $ (586) $ 727 $ 1,147 At December 31, 2020 ($ in millions) Total recorded Related allowance Net recorded investment Unpaid principal balance Credit cards $ 1,238 $ (561) $ 677 $ 1,084 Consumer installment loans — — — — Commercial credit products 4 (2) 2 4 Total $ 1,242 $ (563) $ 679 $ 1,088 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 March 31, 2021 2020 ($ in millions) Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Credit cards $ 11 $ 79 $ 1,273 $ 12 $ 72 $ 1,148 Consumer installment loans — — — — — — Commercial credit products — — 4 — — 4 Total $ 11 $ 79 $ 1,277 $ 12 $ 72 $ 1,152 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 from the applicable balance sheet date and experienced a payment default and charged-off during the periods presented. Three months ended March 31, 2021 2020 ($ in millions) Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Credit cards 16,933 $ 47 20,402 $ 49 Consumer installment loans — — — — Commercial credit products 38 — 18 — Total 16,971 $ 47 20,420 $ 49 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 relating to the customer’s broader credit performance. We utilize Vantage credit scores to assist in our assessment of credit quality. Vantage credit scores are 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) 651 or higher, which are considered the strongest credits; (ii) 591 to 650, considered moderate credit risk; and (iii) 590 or less, which are considered weaker credits. There are certain customer accounts for which a Vantage score is not available where we use alternative sources to assess their credit and predict behavior. The following table provides the most recent Vantage scores available for our customers at March 31, 2021 and December 31, 2020, respectively, as a percentage of each class of loan receivable. For comparability purposes and to provide the best illustration of how the credit risk inherent in our loan portfolios has changed over time, the credit quality information at March 31, 2020 has also been presented to show applicable Vantage score categories. The table below excludes 0.6%, 0.3% and 0.3% of our total loan receivables balance at each of March 31, 2021, December 31, 2020 and March 31, 2020, respectively, which represents those customer accounts for which a Vantage score is not available. March 31, 2021 December 31, 2020 March 31, 2020 651 or 591 to 590 or 651 or 591 to 590 or 651 or 591 to 590 or higher 650 less higher 650 less higher 650 less Credit cards 77 % 18 % 5 % 77 % 17 % 6 % 70 % 21 % 9 % Consumer installment loans 79 % 17 % 4 % 78 % 18 % 4 % 75 % 19 % 6 % Commercial credit products 93 % 4 % 3 % 92 % 5 % 3 % 90 % 5 % 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 $414 billion and $413 billion at March 31, 2021 and December 31, 2020, respectively. While these amounts represented the total available unused credit card lines, we have not experienced and do not anticipate that all of our customers will access their entire available line at any given point in time. Interest Income by Product The following table provides additional information about our interest and fees on loans, including merchant discounts, from our loan receivables, including held for sale: Three months ended March 31, ($ in millions) 2021 2020 Credit cards (a) $ 3,657 $ 4,272 Consumer installment loans 53 35 Commercial credit products 21 33 Other 1 — Total $ 3,732 $ 4,340 _______________________ |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2021 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES We use VIEs to securitize loan receivables 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 months ended March 31, 2021 and 2020. 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 loan receivables 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 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 VIEs where 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, and 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) March 31, 2021 December 31, 2020 Assets Loan receivables, net (a) $ 20,598 $ 22,683 Other assets (b) 437 52 Total $ 21,035 $ 22,735 Liabilities Borrowings $ 7,193 $ 7,810 Other liabilities 20 23 Total $ 7,213 $ 7,833 _______________________ (a) Includes $2.4 billion and $2.7 billion of related allowance for credit losses resulting in gross restricted loans of $23.0 billion and $25.4 billion at March 31, 2021 and December 31, 2020, respectively. (b) Includes $433 million and $48 million of segregated funds held by the VIEs at March 31, 2021 and December 31, 2020, respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Condensed Consolidated Statements of Financial Position. The balances presented above are net of intercompany balances and transactions that are eliminated in our condensed consolidated financial statements. We provide servicing for all of our consolidated VIEs. Collections are required to be placed into segregated accounts owned by each VIE in amounts that meet contractually specified minimum levels. These segregated funds are invested in cash and cash equivalents and are restricted as to their use, principally to pay maturing principal and interest on debt and the related servicing fees. Collections above these minimum levels are remitted to us on a daily basis. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS March 31, 2021 December 31, 2020 ($ in millions) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Customer-related $ 1,794 $ (1,117) $ 677 $ 1,734 $ (1,081) $ 653 Capitalized software and other 1,108 (616) 492 1,043 (571) 472 Total $ 2,902 $ (1,733) $ 1,169 $ 2,777 $ (1,652) $ 1,125 During the three months ended March 31, 2021, we recorded additions to intangible assets subject to amortization of $127 million, primarily related to capitalized software expenditures, 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. During the three months ended March 31, 2021 and 2020, we recorded additions to customer-related intangible assets subject to amortization of $62 million and $5 million, respectively, primarily related to payments made to acquire and extend certain retail partner relationships. These additions had a weighted average amortizable life of 5 years for both the three months ended March 31, 2021 and 2020. |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2021 | |
Deposits [Abstract] | |
Deposits | DEPOSITS March 31, 2021 December 31, 2020 ($ in millions) Amount Average rate (a) Amount Average rate (a) Interest-bearing deposits $ 62,419 1.1 % $ 62,469 1.7 % Non-interest-bearing deposits 342 — 313 — Total deposits $ 62,761 $ 62,782 ____________________ (a) Based on interest expense for the three months ended March 31, 2021 and the year ended December 31, 2020 and average deposits balances. At March 31, 2021 and December 31, 2020, interest-bearing deposits included $5.7 billion and $6.5 billion, respectively, of certificates of deposit that exceeded applicable FDIC insurance limits, which are generally $250,000 per depositor. At March 31, 2021, our interest-bearing time deposits maturing for the remainder of 2021 and over the next four years and thereafter were as follows: ($ in millions) 2021 2022 2023 2024 2025 Thereafter Deposits $ 14,664 $ 8,895 $ 2,002 $ 2,350 $ 659 $ 254 The above maturity table excludes $28.4 billion of demand deposits with no defined maturity, of which $27.0 billion are savings accounts. In addition, at March 31, 2021, we had $5.2 billion of broker network deposit sweeps procured through a program arranger who channels brokerage account deposits to us that are also excluded from the above maturity table. Unless extended, the contracts associated with these broker network deposit sweeps will terminate between 2021 and 2028. |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS March 31, 2021 December 31, 2020 ($ in millions) Maturity date Interest Rate Weighted average interest rate Outstanding Amount (a) Outstanding Amount (a) Borrowings of consolidated securitization entities: Fixed securitized borrowings 2021 - 2023 2.21% - 3.87% 2.87 % $ 4,893 $ 5,510 Floating securitized borrowings 2021 - 2023 0.75% - 1.01% 0.82 % 2,300 2,300 Total borrowings of consolidated securitization entities 2.21 % 7,193 7,810 Senior unsecured notes: Synchrony Financial senior unsecured notes: Fixed senior unsecured notes 2021 - 2029 2.80% - 5.15% 4.08 % 6,470 6,468 Synchrony Bank senior unsecured notes: Fixed senior unsecured notes 2021 - 2022 3.00% - 3.65% 3.33 % 1,497 1,497 Total senior unsecured notes 3.94 % 7,967 7,965 Total borrowings $ 15,160 $ 15,775 ___________________ (a) The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. Debt Maturities 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 2021 and over the next four years and thereafter: ($ in millions) 2021 2022 2023 2024 2025 Thereafter Borrowings $ 3,957 $ 4,583 $ 1,657 $ 1,850 $ 1,000 $ 2,150 Credit Facilities As additional sources of liquidity, we have undrawn committed capacity under certain credit facilities, primarily related to our securitization programs. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
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 2020 annual consolidated financial statements in our 2020 Form 10-K. The following tables present our assets and liabilities measured at fair value on a recurring basis. Recurring Fair Value Measurements At March 31, 2021 ($ in millions) Level 1 Level 2 Level 3 Total (a) Assets Debt securities U.S. government and federal agency $ — $ 2,990 $ — $ 2,990 State and municipal — — 35 35 Residential mortgage-backed — 788 — 788 Asset-backed — 2,729 — 2,729 Other — — 8 8 Other assets (b) 15 — 9 24 Total $ 15 $ 6,507 $ 52 $ 6,574 At December 31, 2020 ($ in millions) Assets Debt securities U.S. government and federal agency $ — $ 3,927 $ — $ 3,927 State and municipal — — 39 39 Residential mortgage-backed — 842 — 842 Asset-backed — 2,661 — 2,661 Other assets (b) 16 — 14 30 Total $ 16 $ 7,430 $ 53 $ 7,499 Liabilities Contingent consideration — — 11 11 Total $ — $ — $ 11 $ 11 _______________________ (a) For the three months ended March 31, 2021 and 2020, there were no fair value measurements transferred between levels. (b) Other assets primarily relate to equity investments measured at fair value. Level 3 Fair Value Measurements 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. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies and Note 9. Fair Value Measurements in our 2020 annual consolidated financial statements in our 2020 Form 10-K for a description of our process to evaluate third-party pricing servicers and a description of our contingent consideration arrangements, respectively. Our state and municipal debt securities are classified as available-for-sale with changes in fair value included in accumulated other comprehensive income. The changes in our Level 3 assets and liabilities that are measured on a recurring basis for the three months ended March 31, 2021 and 2020 were not material. Financial Assets and Financial Liabilities Carried at Other Than Fair Value Carrying Corresponding fair value amount At March 31, 2021 ($ 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) $ 16,620 $ 16,620 $ 16,620 $ — $ — Other assets (a)(b) $ 481 $ 481 $ 481 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 66,957 $ 80,092 $ — $ — $ 80,092 Loan receivables held for sale (c) $ 23 $ 23 $ — $ — $ 23 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 62,761 $ 63,280 $ — $ 63,280 $ — Borrowings of consolidated securitization entities $ 7,193 $ 7,328 $ — $ 5,027 $ 2,301 Senior unsecured notes $ 7,967 $ 8,534 $ — $ 8,534 $ — Carrying Corresponding fair value amount At December 31, 2020 ($ in millions) value Total Level 1 Level 2 Level 3 Financial Assets Financial assets for which carrying values equal or approximate fair value: Cash and equivalents (a) $ 11,524 $ 11,524 $ 11,524 $ — $ — Other assets (a)(b) $ 81 $ 81 $ 81 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 71,602 $ 85,234 $ — $ — $ 85,234 Loan receivables held for sale (c) $ 5 $ 5 $ — $ — $ 5 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 62,782 $ 63,382 $ — $ 63,382 $ — Borrowings of consolidated securitization entities $ 7,810 $ 7,977 $ — $ 5,680 $ 2,297 Senior unsecured notes $ 7,965 $ 8,704 $ — $ 8,704 $ — _______________________ (a) For cash and equivalents and restricted cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less or acquired within three months or less of their maturity. (b) This balance relates to restricted cash and equivalents, which is included in other assets. |
Regulatory and Capital Adequacy
Regulatory and Capital Adequacy | 3 Months Ended |
Mar. 31, 2021 | |
Banking Regulation, Risk-Based Information [Abstract] | |
Regulatory and Capital Adequacy | REGULATORY AND CAPITAL ADEQUACY As a savings and loan holding company and a financial holding company, we are subject to regulation, supervision and examination by the Federal Reserve Board and subject to the capital requirements as prescribed by Basel III capital rules and the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Bank is a federally chartered savings association. As such, the Bank is subject to regulation, supervision and examination by the Office of the Comptroller of the Currency of the U.S. Treasury (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 FDIC. 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 tables below) 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. In March 2020 the joint federal bank regulatory agencies issued an interim final rule that allows banking organizations that implement CECL in 2020 to mitigate the effects of the CECL accounting standard in their regulatory capital for two years. The Company has elected to adopt the option provided by the interim final rule, which will largely delay the effects of CECL on its regulatory capital through the end of 2021, after which the effects will be phased-in over a three-year period from January 1, 2022 through December 31, 2024, collectively the “CECL regulatory capital transition adjustment”. See Note 10. Regulatory and Capital Adequacy to our 2020 annual consolidated financial statements in our 2020 Form 10-K, for additional information. At March 31, 2021 and December 31, 2020, Synchrony Financial met all applicable requirements to be deemed well-capitalized pursuant to Federal Reserve Board regulations. At March 31, 2021 and December 31, 2020, 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 March 31, 2021 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 March 31, 2021 ($ in millions) Actual Minimum for capital Amount Ratio (a) Amount Ratio (b) Total risk-based capital $ 15,146 19.7 % $ 6,157 8.0 % Tier 1 risk-based capital $ 14,115 18.3 % $ 4,618 6.0 % Tier 1 leverage $ 14,115 14.5 % $ 3,883 4.0 % Common equity Tier 1 Capital $ 13,381 17.4 % $ 3,463 4.5 % At December 31, 2020 ($ in millions) Actual Minimum for capital Amount Ratio (a) Amount Ratio (b) Total risk-based capital $ 14,604 18.1 % $ 6,445 8.0 % Tier 1 risk-based capital $ 13,525 16.8 % $ 4,834 6.0 % Tier 1 leverage $ 13,525 14.0 % $ 3,869 4.0 % Common equity Tier 1 Capital $ 12,791 15.9 % $ 3,625 4.5 % Synchrony Bank At March 31, 2021 ($ in millions) Actual Minimum for capital Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio (b) Amount Ratio Total risk-based capital $ 13,658 19.9 % $ 5,500 8.0 % $ 6,875 10.0 % Tier 1 risk-based capital $ 12,734 18.5 % $ 4,125 6.0 % $ 5,500 8.0 % Tier 1 leverage $ 12,734 14.5 % $ 3,505 4.0 % $ 4,382 5.0 % Common equity Tier I capital $ 12,734 18.5 % $ 3,094 4.5 % $ 4,469 6.5 % At December 31, 2020 ($ in millions) Actual Minimum for capital Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio (b) Amount Ratio Total risk-based capital $ 12,784 17.8 % $ 5,747 8.0 % $ 7,184 10.0 % Tier 1 risk-based capital $ 11,821 16.5 % $ 4,310 6.0 % $ 5,747 8.0 % Tier 1 leverage $ 11,821 13.6 % $ 3,484 4.0 % $ 4,356 5.0 % Common equity Tier I capital $ 11,821 16.5 % $ 3,233 4.5 % $ 4,669 6.5 % _______________________ (a) Capital ratios are calculated based on the Basel III Standardized Approach rules. Capital amounts and ratios at March 31, 2021 and at December 31, 2020 in the above tables reflect the application of the CECL regulatory capital transition adjustment. (b) At March 31, 2021 and at December 31, 2020, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 2.5 percentage points to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
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 common share reflects the assumed conversion of all dilutive securities. The following table presents the calculation of basic and diluted earnings per common share: Three months ended March 31, (in millions, except per share data) 2021 2020 Net earnings $ 1,025 $ 286 Preferred stock dividends (11) (11) Net earnings available to common stockholders $ 1,014 $ 275 Weighted average common shares outstanding, basic 583.3 604.9 Effect of dilutive securities 4.2 2.5 Weighted average common shares outstanding, dilutive 587.5 607.4 Earnings per basic common share $ 1.74 $ 0.45 Earnings per diluted common share $ 1.73 $ 0.45 We have issued certain stock-based awards under the Synchrony Financial 2014 Long-Term Incentive Plan. A total of 1 million shares and 5 million shares for the three months ended March 31, 2021 and 2020, respectively, related to these awards, were considered anti-dilutive and therefore were excluded from the computation of diluted earnings per common share. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Unrecognized Tax Benefits ($ in millions) March 31, 2021 December 31, 2020 Unrecognized tax benefits, excluding related interest expense and penalties (a) $ 228 $ 268 Portion that, if recognized, would reduce tax expense and effective tax rate (b) $ 167 $ 183 ____________________ (a) Interest and penalties related to unrecognized tax benefits were not material for all periods presented. (b) Comprised of federal unrecognized tax benefits and state and local unrecognized tax benefits net of the effects of associated U.S. federal income taxes. Excludes amounts attributable to any related valuation allowances resulting from associated increases in deferred tax assets. We establish a liability that represents the difference between a tax position taken (or expected to be taken) on an income tax return and the amount of taxes recognized in our financial statements. The liability associated with the unrecognized tax benefits is adjusted periodically when new information becomes available. The amount of unrecognized tax benefits that is reasonably possible to be resolved in the next twelve months is expected to be $56 million, of which $30 million, if recognized, would reduce the Company's tax expense and effective tax rate. In the current period, the Company executed a Memorandum of Understanding with the IRS to participate voluntarily in the IRS Compliance Assurance Process (“CAP”) program for the 2021 tax year, and thus the tax year is under IRS review. Under the CAP program, the IRS reviews the federal tax positions of the Company to identify and resolve any tax issues that may arise throughout the tax year. The objectives of the CAP program are to resolve issues in an efficient and contemporaneous manner and eliminate the need for a lengthy post-filing examination. We expect that the IRS review of our 2021 return will be substantially completed prior to its filing in 2022. During the period, in connection with the CAP program, the IRS completed their examination of our 2017 and 2018 tax years. The IRS is currently examining our 2019-2021 tax years. We expect that the IRS will complete the examinations of the 2019-2020 tax years in the next 12 months. Additionally, we are under examination in various states going back to 2014. |
Legal Proceedings and Regulator
Legal Proceedings and Regulatory Matters | 3 Months Ended |
Mar. 31, 2021 | |
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. The Bank or the Company is, or has been, defending a number of putative class actions alleging claims under the federal Telephone Consumer Protection Act 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. Campbell et al. v. Synchrony Bank was filed on January 25, 2017 in the U.S. District Court for the Northern District of New York. The original complaint named only J.C. Penney Company, Inc. and J.C. Penney Corporation, Inc. as the defendants but was amended on April 7, 2017 to replace those defendants with the Bank. Neal et al. v. Wal-Mart Stores, Inc. and Synchrony Bank , for which the Bank is indemnifying Wal-Mart, was filed on January 17, 2017 in the U.S. District Court for the Western District of North Carolina. The original complaint named only Wal-Mart Stores, Inc. as a defendant but was amended on March 30, 2017 to add Synchrony Bank as an additional defendant. On October 2, 2020, Synchrony entered an agreement to resolve the Campbell and Neal lawsuits, which had been consolidated before the United States District Court for the Western District of North Carolina, on a class basis. On October 19, 2020, the District Court entered an order preliminarily approving the class action settlement. On March 19, 2021, the District Court granted final approval of the settlement and entered final judgment and order of dismissal. Scott et al. v. Synchrony Financial was filed on February 12, 2021 in the Circuit Court of the Fourth Judicial Circuit in and for Duval County, Florida. Turizo et al. v. Synchrony Financial was filed on February 25, 2021 in the Circuit Court of the Seventeenth Judicial Circuity in and for Broward County, Florida. Unlike the Neal, Campbell and Scott actions, which relate to phone calls, the Turizo complaint is based on the alleged receipt of a text message. In April 2021, Synchrony reached agreements in principle with the representative plaintiffs in both the Scott and Turizo cases to resolve those matters on an individual basis. On November 2, 2018, a putative class action lawsuit, Retail Wholesale Department Store Union Local 338 Retirement Fund v. Synchrony Financial, et al. , was filed in the U.S. District Court for the District of Connecticut, naming as defendants the Company and two of its officers. The lawsuit asserts violations of the Exchange Act for allegedly making materially misleading statements and/or omitting material information concerning the Company’s underwriting practices and private-label card business, and was filed on behalf of a putative class of persons who purchased or otherwise acquired the Company’s common stock between October 21, 2016 and November 1, 2018. The complaint seeks an award of unspecified compensatory damages, costs and expenses. On February 5, 2019, the court appointed Stichting Depositary APG Developed Markets Equity Pool as lead plaintiff for the putative class. On April 5, 2019, an amended complaint was filed, asserting a new claim for violations of the Securities Act in connection with statements in the offering materials for the Company’s December 1, 2017 note offering. The Securities Act claims are filed on behalf of persons who purchased or otherwise acquired Company bonds in or traceable to the December 1, 2017 note offering between December 1, 2017 and November 1, 2018. The amended complaint names as additional defendants two additional Company officers, the Company’s board of directors, and the underwriters of the December 1, 2017 note offering. The amended complaint is captioned Stichting Depositary APG Developed Markets Equity Pool and Stichting Depositary APG Fixed Income Credit Pool v. Synchrony Financial et al. On March 26, 2020, the District Court recaptioned the case In re Synchrony Financial Securities Litigation and on March 31, 2020, the District Court granted the defendants’ motion to dismiss the complaint with prejudice. On April 20, 2020, plaintiffs filed a notice to appeal the decision to the United States Court of Appeals for the Second Circuit. On February 16, 2021, the Court of Appeals affirmed the District Court’s dismissal of the Securities Act claims and all of the claims under the Exchange Act with the exception of a claim relating to a single statement on January 19, 2018 regarding whether Synchrony was receiving pushback on credit from its retail partners. On January 28, 2019, a purported shareholder derivative action, Gilbert v. Keane, et al. , was filed in the U.S. District Court for the District of Connecticut against the Company as a nominal defendant, and certain of the Company’s officers and directors. The lawsuit alleges breach of fiduciary duty claims based on the allegations raised by the plaintiff in the Stichting Depositar APG class action, unjust enrichment, waste of corporate assets, and that the defendants made materially misleading statements and/or omitted material information in violation of the Exchange Act. The complaint seeks a declaration that the defendants breached and/or aided and abetted the breach of their fiduciary duties to the Company, unspecified monetary damages with interest, restitution, a direction that the defendants take all necessary actions to reform and improve corporate governance and internal procedures, and attorneys’ and experts’ fees. On March 11, 2019, a second purported shareholder derivative action, Aldridge v. Keane, et al. , was filed in the U.S. District Court for the District of Connecticut. The allegations in the Aldridge complaint are substantially similar to those in the Gilbert complaint. On March 26, 2020, the District Court recaptioned the Gilbert and Aldridge cases as In re Synchrony Financial Derivative Litigation. On April 30, 2014 Belton et al. v. GE Capital Consumer Lending |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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 debt 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 primarily 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 period-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 PresentationThe 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 2020 annual consolidated financial statements and the related notes in our Annual Report on Form 10-K for the year ended December 31, 2020 (our "2020 Form 10-K"). |
Debt Securities (Tables)
Debt Securities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | Our debt securities consist of the following: March 31, 2021 December 31, 2020 Gross Gross Gross Gross Amortized unrealized unrealized Estimated Amortized unrealized unrealized Estimated ($ in millions) cost gains losses fair value cost gains losses fair value U.S. government and federal agency $ 2,989 $ 1 $ — $ 2,990 $ 3,926 $ 1 $ — $ 3,927 State and municipal 37 — (2) 35 40 — (1) 39 Residential mortgage-backed (a) 769 22 (3) 788 817 25 — 842 Asset-backed (b) 2,721 8 — 2,729 2,652 9 — 2,661 Other 8 — — 8 — — — — Total $ 6,524 $ 31 $ (5) $ 6,550 $ 7,435 $ 35 $ (1) $ 7,469 _______________________ (a) All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At March 31, 2021 and December 31, 2020, $194 million and $229 million of residential mortgage-backed securities, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. (b) Our asset-backed securities are collateralized by credit card and auto loans. |
Available-for-sale Securities, Continuous Loss Position, Fair Value | The following table presents the estimated fair values and gross unrealized losses of our available-for-sale debt securities: In loss position for Less than 12 months 12 months or more Gross Gross Estimated unrealized Estimated unrealized ($ in millions) fair value losses fair value losses At March 31, 2021 U.S. government and federal agency $ 106 $ — $ — $ — State and municipal 1 — 20 (2) Residential mortgage-backed 130 (3) — — Asset-backed 766 — — — Other — — — — Total $ 1,003 $ (3) $ 20 $ (2) At December 31, 2020 U.S. government and federal agency $ — $ — $ — $ — State and municipal 3 — 21 (1) Residential mortgage-backed 6 — — — Asset-backed 242 — — — Total $ 251 $ — $ 21 $ (1) |
Investments Classified by Contractual Maturity Date | Contractual Maturities of Investments in Available-for-Sale Debt Securities Amortized Estimated Weighted At March 31, 2021 ($ in millions) cost fair value Average yield (a) Due Within one year $ 3,689 $ 3,693 0.4 % After one year through five years $ 2,025 $ 2,029 0.4 % After five years through ten years $ 157 $ 164 2.5 % After ten years $ 653 $ 664 1.7 % _____________________ (a) Weighted average yield is calculated based on the amortized cost of each security. In calculating yield, no adjustment has been made with respect to any tax-exempt obligations. |
Loan Receivables and Allowanc_2
Loan Receivables and Allowance for Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | ($ in millions) March 31, 2021 December 31, 2020 Credit cards $ 73,244 $ 78,455 Consumer installment loans 2,319 2,125 Commercial credit products 1,248 1,250 Other 47 37 Total loan receivables, before allowance for credit losses (a)(b) $ 76,858 $ 81,867 _______________________ (a) Total loan receivables include $23.0 billion and $25.4 billion of restricted loans of consolidated securitization entities at March 31, 2021 and December 31, 2020, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. (b) At March 31, 2021 and December 31, 2020, loan receivables included deferred costs, net of deferred income, of $158 million and $153 million, respectively. |
Allowance for Credit Losses on Financing Receivables | Allowance for Credit Losses ($ in millions) Balance at January 1, 2021 Provision charged to operations Gross charge-offs Recoveries Other Balance at Credit cards $ 10,076 $ 341 $ (901) $ 219 $ — $ 9,735 Consumer installment loans 127 (18) (15) 5 1 100 Commercial credit products 61 10 (9) 2 — 64 Other 1 1 — — — 2 Total $ 10,265 $ 334 $ (925) $ 226 $ 1 $ 9,901 ($ in millions) Balance at January 1, 2020 Impact of ASU 2016-13 Adoption Post-Adoption Balance at January 1, 2020 Provision charged to operations Gross charge-offs Recoveries Balance at Credit cards $ 5,506 $ 2,989 $ 8,495 $ 1,635 $ (1,395) $ 294 $ 9,029 Consumer installment loans 46 26 72 24 (16) 3 83 Commercial credit products 49 6 55 18 (14) 3 62 Other 1 — 1 — — — 1 Total $ 5,602 $ 3,021 $ 8,623 $ 1,677 $ (1,425) $ 300 $ 9,175 |
Past Due Financing Receivables | Delinquent and Non-accrual Loans At March 31, 2021 ($ 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 $ 964 $ 1,154 $ 2,118 $ 1,154 $ — Consumer installment loans 19 4 23 — 4 Commercial credit products 22 12 34 12 — Total delinquent loans $ 1,005 $ 1,170 $ 2,175 $ 1,166 $ 4 Percentage of total loan receivables 1.3 % 1.5 % 2.8 % 1.5 % — % At December 31, 2020 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing Credit cards $ 1,325 $ 1,128 $ 2,453 $ 1,128 $ — Consumer installment loans 26 5 31 — 5 Commercial credit products 20 10 30 10 — Total delinquent loans $ 1,371 $ 1,143 $ 2,514 $ 1,138 $ 5 Percentage of total loan receivables 1.7 % 1.4 % 3.1 % 1.4 % — % |
Troubled Debt Restructurings on Financing Receivables | The following table provides information on our TDR loan modifications during the periods presented: Three months ended March 31, ($ in millions) 2021 2020 Credit cards $ 261 $ 225 Consumer installment loans — — Commercial credit products 1 1 Total $ 262 $ 226 |
Impaired Financing Receivables | The following table provides information about loans classified as TDRs and specific reserves. We do not evaluate credit card loans on an individual basis but instead estimate an allowance for credit losses on a collective basis. At March 31, 2021 ($ in millions) Total recorded Related allowance Net recorded investment Unpaid principal balance Credit cards $ 1,309 $ (584) $ 725 $ 1,143 Consumer installment loans — — — — Commercial credit products 4 (2) 2 4 Total $ 1,313 $ (586) $ 727 $ 1,147 At December 31, 2020 ($ in millions) Total recorded Related allowance Net recorded investment Unpaid principal balance Credit cards $ 1,238 $ (561) $ 677 $ 1,084 Consumer installment loans — — — — Commercial credit products 4 (2) 2 4 Total $ 1,242 $ (563) $ 679 $ 1,088 Three months ended March 31, 2021 2020 ($ in millions) Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Credit cards $ 11 $ 79 $ 1,273 $ 12 $ 72 $ 1,148 Consumer installment loans — — — — — — Commercial credit products — — 4 — — 4 Total $ 11 $ 79 $ 1,277 $ 12 $ 72 $ 1,152 |
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 from the applicable balance sheet date and experienced a payment default and charged-off during the periods presented. Three months ended March 31, 2021 2020 ($ in millions) Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Credit cards 16,933 $ 47 20,402 $ 49 Consumer installment loans — — — — Commercial credit products 38 — 18 — Total 16,971 $ 47 20,420 $ 49 |
Financing Receivable Credit Quality Indicators | The following table provides the most recent Vantage scores available for our customers at March 31, 2021 and December 31, 2020, respectively, as a percentage of each class of loan receivable. For comparability purposes and to provide the best illustration of how the credit risk inherent in our loan portfolios has changed over time, the credit quality information at March 31, 2020 has also been presented to show applicable Vantage score categories. The table below excludes 0.6%, 0.3% and 0.3% of our total loan receivables balance at each of March 31, 2021, December 31, 2020 and March 31, 2020, respectively, which represents those customer accounts for which a Vantage score is not available. March 31, 2021 December 31, 2020 March 31, 2020 651 or 591 to 590 or 651 or 591 to 590 or 651 or 591 to 590 or higher 650 less higher 650 less higher 650 less Credit cards 77 % 18 % 5 % 77 % 17 % 6 % 70 % 21 % 9 % Consumer installment loans 79 % 17 % 4 % 78 % 18 % 4 % 75 % 19 % 6 % Commercial credit products 93 % 4 % 3 % 92 % 5 % 3 % 90 % 5 % 5 % |
Interest Income and Interest Expense Disclosure | The following table provides additional information about our interest and fees on loans, including merchant discounts, from our loan receivables, including held for sale: Three months ended March 31, ($ in millions) 2021 2020 Credit cards (a) $ 3,657 $ 4,272 Consumer installment loans 53 35 Commercial credit products 21 33 Other 1 — Total $ 3,732 $ 4,340 _______________________ |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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) March 31, 2021 December 31, 2020 Assets Loan receivables, net (a) $ 20,598 $ 22,683 Other assets (b) 437 52 Total $ 21,035 $ 22,735 Liabilities Borrowings $ 7,193 $ 7,810 Other liabilities 20 23 Total $ 7,213 $ 7,833 _______________________ (a) Includes $2.4 billion and $2.7 billion of related allowance for credit losses resulting in gross restricted loans of $23.0 billion and $25.4 billion at March 31, 2021 and December 31, 2020, respectively. (b) Includes $433 million and $48 million of segregated funds held by the VIEs at March 31, 2021 and December 31, 2020, respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Condensed Consolidated Statements of Financial Position. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | March 31, 2021 December 31, 2020 ($ in millions) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Customer-related $ 1,794 $ (1,117) $ 677 $ 1,734 $ (1,081) $ 653 Capitalized software and other 1,108 (616) 492 1,043 (571) 472 Total $ 2,902 $ (1,733) $ 1,169 $ 2,777 $ (1,652) $ 1,125 |
Deposits (Tables)
Deposits (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Deposits [Abstract] | |
Schedule of Deposit Liabilities | March 31, 2021 December 31, 2020 ($ in millions) Amount Average rate (a) Amount Average rate (a) Interest-bearing deposits $ 62,419 1.1 % $ 62,469 1.7 % Non-interest-bearing deposits 342 — 313 — Total deposits $ 62,761 $ 62,782 ____________________ (a) Based on interest expense for the three months ended March 31, 2021 and the year ended December 31, 2020 and average deposits balances. |
Schedule of Maturities of Deposit Liabilities | At March 31, 2021, our interest-bearing time deposits maturing for the remainder of 2021 and over the next four years and thereafter were as follows: ($ in millions) 2021 2022 2023 2024 2025 Thereafter Deposits $ 14,664 $ 8,895 $ 2,002 $ 2,350 $ 659 $ 254 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | March 31, 2021 December 31, 2020 ($ in millions) Maturity date Interest Rate Weighted average interest rate Outstanding Amount (a) Outstanding Amount (a) Borrowings of consolidated securitization entities: Fixed securitized borrowings 2021 - 2023 2.21% - 3.87% 2.87 % $ 4,893 $ 5,510 Floating securitized borrowings 2021 - 2023 0.75% - 1.01% 0.82 % 2,300 2,300 Total borrowings of consolidated securitization entities 2.21 % 7,193 7,810 Senior unsecured notes: Synchrony Financial senior unsecured notes: Fixed senior unsecured notes 2021 - 2029 2.80% - 5.15% 4.08 % 6,470 6,468 Synchrony Bank senior unsecured notes: Fixed senior unsecured notes 2021 - 2022 3.00% - 3.65% 3.33 % 1,497 1,497 Total senior unsecured notes 3.94 % 7,967 7,965 Total borrowings $ 15,160 $ 15,775 ___________________ (a) The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. |
Schedule of Maturities of Long-term Debt | 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 2021 and over the next four years and thereafter: ($ in millions) 2021 2022 2023 2024 2025 Thereafter Borrowings $ 3,957 $ 4,583 $ 1,657 $ 1,850 $ 1,000 $ 2,150 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following tables present our assets and liabilities measured at fair value on a recurring basis. Recurring Fair Value Measurements At March 31, 2021 ($ in millions) Level 1 Level 2 Level 3 Total (a) Assets Debt securities U.S. government and federal agency $ — $ 2,990 $ — $ 2,990 State and municipal — — 35 35 Residential mortgage-backed — 788 — 788 Asset-backed — 2,729 — 2,729 Other — — 8 8 Other assets (b) 15 — 9 24 Total $ 15 $ 6,507 $ 52 $ 6,574 At December 31, 2020 ($ in millions) Assets Debt securities U.S. government and federal agency $ — $ 3,927 $ — $ 3,927 State and municipal — — 39 39 Residential mortgage-backed — 842 — 842 Asset-backed — 2,661 — 2,661 Other assets (b) 16 — 14 30 Total $ 16 $ 7,430 $ 53 $ 7,499 Liabilities Contingent consideration — — 11 11 Total $ — $ — $ 11 $ 11 _______________________ (a) For the three months ended March 31, 2021 and 2020, there were no fair value measurements transferred between levels. (b) Other assets primarily relate to equity investments measured at fair value. |
Fair Value, by Balance Sheet Grouping | Financial Assets and Financial Liabilities Carried at Other Than Fair Value Carrying Corresponding fair value amount At March 31, 2021 ($ 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) $ 16,620 $ 16,620 $ 16,620 $ — $ — Other assets (a)(b) $ 481 $ 481 $ 481 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 66,957 $ 80,092 $ — $ — $ 80,092 Loan receivables held for sale (c) $ 23 $ 23 $ — $ — $ 23 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 62,761 $ 63,280 $ — $ 63,280 $ — Borrowings of consolidated securitization entities $ 7,193 $ 7,328 $ — $ 5,027 $ 2,301 Senior unsecured notes $ 7,967 $ 8,534 $ — $ 8,534 $ — Carrying Corresponding fair value amount At December 31, 2020 ($ in millions) value Total Level 1 Level 2 Level 3 Financial Assets Financial assets for which carrying values equal or approximate fair value: Cash and equivalents (a) $ 11,524 $ 11,524 $ 11,524 $ — $ — Other assets (a)(b) $ 81 $ 81 $ 81 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 71,602 $ 85,234 $ — $ — $ 85,234 Loan receivables held for sale (c) $ 5 $ 5 $ — $ — $ 5 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 62,782 $ 63,382 $ — $ 63,382 $ — Borrowings of consolidated securitization entities $ 7,810 $ 7,977 $ — $ 5,680 $ 2,297 Senior unsecured notes $ 7,965 $ 8,704 $ — $ 8,704 $ — _______________________ (a) For cash and equivalents and restricted cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less or acquired within three months or less of their maturity. (b) This balance relates to restricted cash and equivalents, which is included in other assets. |
Regulatory and Capital Adequa_2
Regulatory and Capital Adequacy (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Banking Regulation, Risk-Based Information [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 March 31, 2021 ($ in millions) Actual Minimum for capital Amount Ratio (a) Amount Ratio (b) Total risk-based capital $ 15,146 19.7 % $ 6,157 8.0 % Tier 1 risk-based capital $ 14,115 18.3 % $ 4,618 6.0 % Tier 1 leverage $ 14,115 14.5 % $ 3,883 4.0 % Common equity Tier 1 Capital $ 13,381 17.4 % $ 3,463 4.5 % At December 31, 2020 ($ in millions) Actual Minimum for capital Amount Ratio (a) Amount Ratio (b) Total risk-based capital $ 14,604 18.1 % $ 6,445 8.0 % Tier 1 risk-based capital $ 13,525 16.8 % $ 4,834 6.0 % Tier 1 leverage $ 13,525 14.0 % $ 3,869 4.0 % Common equity Tier 1 Capital $ 12,791 15.9 % $ 3,625 4.5 % Synchrony Bank At March 31, 2021 ($ in millions) Actual Minimum for capital Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio (b) Amount Ratio Total risk-based capital $ 13,658 19.9 % $ 5,500 8.0 % $ 6,875 10.0 % Tier 1 risk-based capital $ 12,734 18.5 % $ 4,125 6.0 % $ 5,500 8.0 % Tier 1 leverage $ 12,734 14.5 % $ 3,505 4.0 % $ 4,382 5.0 % Common equity Tier I capital $ 12,734 18.5 % $ 3,094 4.5 % $ 4,469 6.5 % At December 31, 2020 ($ in millions) Actual Minimum for capital Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio (b) Amount Ratio Total risk-based capital $ 12,784 17.8 % $ 5,747 8.0 % $ 7,184 10.0 % Tier 1 risk-based capital $ 11,821 16.5 % $ 4,310 6.0 % $ 5,747 8.0 % Tier 1 leverage $ 11,821 13.6 % $ 3,484 4.0 % $ 4,356 5.0 % Common equity Tier I capital $ 11,821 16.5 % $ 3,233 4.5 % $ 4,669 6.5 % _______________________ (a) Capital ratios are calculated based on the Basel III Standardized Approach rules. Capital amounts and ratios at March 31, 2021 and at December 31, 2020 in the above tables reflect the application of the CECL regulatory capital transition adjustment. (b) At March 31, 2021 and at December 31, 2020, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 2.5 percentage points to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted earnings per common share: Three months ended March 31, (in millions, except per share data) 2021 2020 Net earnings $ 1,025 $ 286 Preferred stock dividends (11) (11) Net earnings available to common stockholders $ 1,014 $ 275 Weighted average common shares outstanding, basic 583.3 604.9 Effect of dilutive securities 4.2 2.5 Weighted average common shares outstanding, dilutive 587.5 607.4 Earnings per basic common share $ 1.74 $ 0.45 Earnings per diluted common share $ 1.73 $ 0.45 |
Incomes Taxes (Tables)
Incomes Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Unrecognized Tax Benefits | ($ in millions) March 31, 2021 December 31, 2020 Unrecognized tax benefits, excluding related interest expense and penalties (a) $ 228 $ 268 Portion that, if recognized, would reduce tax expense and effective tax rate (b) $ 167 $ 183 ____________________ (a) Interest and penalties related to unrecognized tax benefits were not material for all periods presented. (b) Comprised of federal unrecognized tax benefits and state and local unrecognized tax benefits net of the effects of associated U.S. federal income taxes. Excludes amounts attributable to any related valuation allowances resulting from associated increases in deferred tax assets. |
Debt Securities - Schedule of A
Debt Securities - Schedule of Available for Sale Securities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Total | |||
Amortized cost | $ 6,524 | $ 7,435 | |
Gross unrealized gains | 31 | 35 | |
Gross unrealized losses | (5) | (1) | |
Estimated fair value | 6,550 | 7,469 | |
U.S. government and federal agency | |||
Debt | |||
Amortized cost | 2,989 | 3,926 | |
Gross unrealized gains | 1 | 1 | |
Gross unrealized losses | 0 | 0 | |
Estimated fair value | 2,990 | 3,927 | |
State and municipal | |||
Debt | |||
Amortized cost | 37 | 40 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | (2) | (1) | |
Estimated fair value | 35 | 39 | |
Residential mortgage-backed | |||
Debt Securities, Available-for-sale [Line Items] | |||
Residential Mortgage Backed Securities pledged as collateral to the Federal Reserve | 194 | 229 | |
Debt | |||
Amortized cost | [1] | 769 | 817 |
Gross unrealized gains | [1] | 22 | 25 |
Gross unrealized losses | [1] | (3) | 0 |
Estimated fair value | [1] | 788 | 842 |
Asset-backed | |||
Debt | |||
Amortized cost | [2] | 2,721 | 2,652 |
Gross unrealized gains | [2] | 8 | 9 |
Gross unrealized losses | [2] | 0 | 0 |
Estimated fair value | [2] | 2,729 | 2,661 |
Other Debt Obligations | |||
Debt | |||
Amortized cost | 8 | 0 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated fair value | $ 8 | $ 0 | |
[1] | All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At March 31, 2021 and December 31, 2020, $194 million and $229 million of residential mortgage-backed securities, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. | ||
[2] | Our asset-backed securities are collateralized by credit card and auto loans. |
Debt Securities - Continuous Un
Debt Securities - Continuous Unrealized Losses (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Estimated fair value | ||
Less than 12 months | $ 1,003 | $ 251 |
12 months or more | 20 | 21 |
Gross unrealized losses | ||
Less than 12 months | (3) | 0 |
12 months or more | (2) | (1) |
U.S. government and federal agency | ||
Estimated fair value | ||
Less than 12 months | 106 | 0 |
12 months or more | 0 | 0 |
Gross unrealized losses | ||
Less than 12 months | 0 | 0 |
12 months or more | 0 | 0 |
State and municipal | ||
Estimated fair value | ||
Less than 12 months | 1 | 3 |
12 months or more | 20 | 21 |
Gross unrealized losses | ||
Less than 12 months | 0 | 0 |
12 months or more | (2) | (1) |
Residential mortgage-backed | ||
Estimated fair value | ||
Less than 12 months | 130 | 6 |
12 months or more | 0 | 0 |
Gross unrealized losses | ||
Less than 12 months | (3) | 0 |
12 months or more | 0 | 0 |
Asset-backed | ||
Estimated fair value | ||
Less than 12 months | 766 | 242 |
12 months or more | 0 | 0 |
Gross unrealized losses | ||
Less than 12 months | 0 | 0 |
12 months or more | 0 | $ 0 |
Other Debt Obligations | ||
Estimated fair value | ||
Less than 12 months | 0 | |
12 months or more | 0 | |
Gross unrealized losses | ||
Less than 12 months | 0 | |
12 months or more | $ 0 |
Debt Securities - Contractual M
Debt Securities - Contractual Maturities (Details) $ in Millions | Mar. 31, 2021USD ($) | |
Amortized Cost | ||
Within one year | $ 3,689 | |
After one year through five years | 2,025 | |
After five years through ten years | 157 | |
After ten years | 653 | |
Estimated Fair Value | ||
Within one year | 3,693 | |
After one year through five years | 2,029 | |
After five years through ten years | 164 | |
After ten years | $ 664 | |
Weighted Average Yield | ||
Within one year | 0.40% | [1] |
After one year through five years | 0.40% | [1] |
After five years through ten years | 2.50% | [1] |
After ten years | 1.70% | [1] |
[1] | Weighted average yield is calculated based on the amortized cost of each security. In calculating yield, no adjustment has been made with respect to any tax-exempt obligations. |
Loan Receivables and Allowanc_3
Loan Receivables and Allowance for Credit Losses - Loan Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | [1],[2] | $ 76,858 | $ 81,867 |
Loan Receivable, Deferred Income | 158 | 153 | |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 73,244 | 78,455 | |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 2,319 | 2,125 | |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 1,248 | 1,250 | |
Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 47 | 37 | |
Variable Interest Entity, Primary Beneficiary | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | $ 23,035 | $ 25,395 | |
[1] | Total loan receivables include $23.0 billion and $25.4 billion of restricted loans of consolidated securitization entities at March 31, 2021 and December 31, 2020, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. | ||
[2] | At March 31, 2021 and December 31, 2020, loan receivables included deferred costs, net of deferred income, of $158 million and $153 million, respectively. |
Loan Receivables and Allowanc_4
Loan Receivables and Allowance for Credit Losses - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ 10,265 | $ 8,623 | ||
Provision for credit losses | 334 | 1,677 | ||
Gross charge-offs | (925) | (1,425) | ||
Recoveries | 226 | 300 | ||
Other | 1 | |||
Ending Balance | 9,901 | 9,175 | ||
Balance at January 1, 2020 prior to adoption of ASU 2016-13 | $ 5,602 | |||
Financing Receivable, Allowance for Credit Loss, Period Increase (Decrease) | 364 | |||
Credit cards | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 10,076 | 8,495 | ||
Provision for credit losses | 341 | 1,635 | ||
Gross charge-offs | (901) | (1,395) | ||
Recoveries | 219 | 294 | ||
Other | 0 | |||
Ending Balance | 9,735 | 9,029 | ||
Balance at January 1, 2020 prior to adoption of ASU 2016-13 | 5,506 | |||
Consumer installment loans | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 127 | 72 | ||
Provision for credit losses | (18) | 24 | ||
Gross charge-offs | (15) | (16) | ||
Recoveries | 5 | 3 | ||
Other | 1 | |||
Ending Balance | 100 | 83 | ||
Balance at January 1, 2020 prior to adoption of ASU 2016-13 | 46 | |||
Commercial credit products | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 61 | 55 | ||
Provision for credit losses | 10 | 18 | ||
Gross charge-offs | (9) | (14) | ||
Recoveries | 2 | 3 | ||
Other | 0 | |||
Ending Balance | 64 | 62 | ||
Balance at January 1, 2020 prior to adoption of ASU 2016-13 | 49 | |||
Other | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 1 | 1 | ||
Provision for credit losses | 1 | 0 | ||
Gross charge-offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Other | 0 | |||
Ending Balance | $ 2 | $ 1 | ||
Balance at January 1, 2020 prior to adoption of ASU 2016-13 | $ 1 | |||
Accounting Standards Update 2016-13 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Impact of ASU 2016-13 Adoption | $ 3,021 | |||
Accounting Standards Update 2016-13 | Credit cards | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Impact of ASU 2016-13 Adoption | 2,989 | |||
Accounting Standards Update 2016-13 | Consumer installment loans | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Impact of ASU 2016-13 Adoption | 26 | |||
Accounting Standards Update 2016-13 | Commercial credit products | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Impact of ASU 2016-13 Adoption | 6 | |||
Accounting Standards Update 2016-13 | Other | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Impact of ASU 2016-13 Adoption | $ 0 |
Loan Receivables and Allowanc_5
Loan Receivables and Allowance for Credit Losses - Delinquent and Non Accrual Status (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and Leases Receivable, Maximum Maturity Period for Loans in Permanent Modification Program | 60 months | |
Financing Receivable, Past Due Amount | ||
Total past due | $ 2,175 | $ 2,514 |
90 or more days delinquent and accruing | 1,166 | 1,138 |
Total non-accruing | $ 4 | $ 5 |
Financing Receivable, Percentage of Total Loan Receivables | ||
Percentage of total loan receivables, 30-89 days delinquent | 1.30% | 1.70% |
Percentage of total loan receivables, 90 or more days delinquent | 1.50% | 1.40% |
Percentage of total loan receivables, Past due | 2.80% | 3.10% |
Percentage of total loan receivables, 90 or more days delinquent and accruing | 1.50% | 1.40% |
Percentage of total loan receivables, Total non-accruing | 0.00% | 0.00% |
Credit cards | ||
Financing Receivable, Past Due Amount | ||
Total past due | $ 2,118 | $ 2,453 |
90 or more days delinquent and accruing | 1,154 | 1,128 |
Total non-accruing | 0 | 0 |
Consumer installment loans | ||
Financing Receivable, Past Due Amount | ||
Total past due | 23 | 31 |
90 or more days delinquent and accruing | 0 | 0 |
Total non-accruing | 4 | 5 |
Commercial credit products | ||
Financing Receivable, Past Due Amount | ||
Total past due | 34 | 30 |
90 or more days delinquent and accruing | 12 | 10 |
Total non-accruing | 0 | 0 |
Financing Receivables, 30 to 89 Days Past Due [Member] | ||
Financing Receivable, Past Due Amount | ||
Total past due | 1,005 | 1,371 |
Financing Receivables, 30 to 89 Days Past Due [Member] | Credit cards | ||
Financing Receivable, Past Due Amount | ||
Total past due | 964 | 1,325 |
Financing Receivables, 30 to 89 Days Past Due [Member] | Consumer installment loans | ||
Financing Receivable, Past Due Amount | ||
Total past due | 19 | 26 |
Financing Receivables, 30 to 89 Days Past Due [Member] | Commercial credit products | ||
Financing Receivable, Past Due Amount | ||
Total past due | 22 | 20 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Past Due Amount | ||
Total past due | 1,170 | 1,143 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Credit cards | ||
Financing Receivable, Past Due Amount | ||
Total past due | 1,154 | 1,128 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Consumer installment loans | ||
Financing Receivable, Past Due Amount | ||
Total past due | 4 | 5 |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial credit products | ||
Financing Receivable, Past Due Amount | ||
Total past due | $ 12 | $ 10 |
Loan Receivables and Allowanc_6
Loan Receivables and Allowance for Credit Losses - Loans Entered into a Loan Modification Program (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | $ 262 | $ 226 |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | 261 | 225 |
Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | 0 | 0 |
Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | $ 1 | $ 1 |
Loan Receivables and Allowanc_7
Loan Receivables and Allowance for Credit Losses - Classified as TDRs (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | $ 1,313 | $ 1,242 |
Related allowance | (586) | (563) |
Net recorded investment | 727 | 679 |
Unpaid principal balance | 1,147 | 1,088 |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 1,309 | 1,238 |
Related allowance | (584) | (561) |
Net recorded investment | 725 | 677 |
Unpaid principal balance | 1,143 | 1,084 |
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 | 4 | 4 |
Related allowance | (2) | (2) |
Net recorded investment | 2 | 2 |
Unpaid principal balance | $ 4 | $ 4 |
Loan Receivables and Allowanc_8
Loan Receivables and Allowance for Credit Losses - Financial Effects of TDRs (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing Receivable, Allowance for Credit Loss | $ 9,901 | $ 9,175 | $ 10,265 | $ 8,623 |
Interest income recognized during period when loans were impaired | 11 | 12 | ||
Interest income that would have been recorded with original terms | 79 | 72 | ||
Average recorded investment | 1,277 | 1,152 | ||
Credit cards | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing Receivable, Allowance for Credit Loss | 9,735 | 9,029 | 10,076 | 8,495 |
Interest income recognized during period when loans were impaired | 11 | 12 | ||
Interest income that would have been recorded with original terms | 79 | 72 | ||
Average recorded investment | 1,273 | 1,148 | ||
Consumer installment loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing Receivable, Allowance for Credit Loss | 100 | 83 | 127 | 72 |
Interest income recognized during period when loans were impaired | 0 | 0 | ||
Interest income that would have been recorded with original terms | 0 | 0 | ||
Average recorded investment | 0 | 0 | ||
Commercial credit products | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing Receivable, Allowance for Credit Loss | 64 | 62 | 61 | 55 |
Interest income recognized during period when loans were impaired | 0 | 0 | ||
Interest income that would have been recorded with original terms | 0 | 0 | ||
Average recorded investment | 4 | 4 | ||
Other | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing Receivable, Allowance for Credit Loss | $ 2 | $ 1 | $ 1 | $ 1 |
Loan Receivables and Allowanc_9
Loan Receivables and Allowance for Credit Losses - Payment Defaults (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($)contract | Mar. 31, 2020USD ($)contract | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts defaulted | contract | 16,971 | 20,420 |
Loans defaulted | $ | $ 47 | $ 49 |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts defaulted | contract | 16,933 | 20,402 |
Loans defaulted | $ | $ 47 | $ 49 |
Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts defaulted | contract | 0 | 0 |
Loans defaulted | $ | $ 0 | $ 0 |
Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts defaulted | contract | 38 | 18 |
Loans defaulted | $ | $ 0 | $ 0 |
Loan Receivables and Allowan_10
Loan Receivables and Allowance for Credit Losses - Credit Quality Indicators (Details) | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing Receivable, Credit Quality Indicators, Percentage of Loan Receivables with No Vantage Score | 0.60% | 0.30% | 0.30% |
Credit cards | Six Hundred and Fifty-One or Higher | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of class of loan receivable | 77.00% | 77.00% | 70.00% |
Credit cards | Five Hundred and Ninety-One to Six Hundred and Fifty | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of class of loan receivable | 18.00% | 17.00% | 21.00% |
Credit cards | Five Hundred and Ninety or Less | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of class of loan receivable | 5.00% | 6.00% | 9.00% |
Consumer installment loans | Six Hundred and Fifty-One or Higher | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of class of loan receivable | 79.00% | 78.00% | 75.00% |
Consumer installment loans | Five Hundred and Ninety-One to Six Hundred and Fifty | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of class of loan receivable | 17.00% | 18.00% | 19.00% |
Consumer installment loans | Five Hundred and Ninety or Less | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of class of loan receivable | 4.00% | 4.00% | 6.00% |
Commercial credit products | Six Hundred and Fifty-One or Higher | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of class of loan receivable | 93.00% | 92.00% | 90.00% |
Commercial credit products | Five Hundred and Ninety-One to Six Hundred and Fifty | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of class of loan receivable | 4.00% | 5.00% | 5.00% |
Commercial credit products | Five Hundred and Ninety or Less | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of class of loan receivable | 3.00% | 3.00% | 5.00% |
Loan Receivables and Allowan_11
Loan Receivables and Allowance for Credit Losses - Interest Income by Product (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | $ 3,732 | $ 4,340 | |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | [1] | 3,657 | 4,272 |
Financing Receivable, Accrued Interest, Writeoff | 305 | 477 | |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 53 | 35 | |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 21 | 33 | |
Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | $ 1 | $ 0 | |
[1] | Interest income on credit cards that was reversed related to accrued interest receivables written off was $305 million and $477 million for the three months ended March 31, 2021 and 2020, respectively |
Loan Receivables and Allowan_12
Loan Receivables and Allowance for Credit Losses - Narrative (Details) - USD ($) $ in Billions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Allowance for Credit Loss, Reasonable and Supportable Forecast Period | 12 months | |
Financing Receivable, Allowance for Credit Loss, Reversion Period | 6 months | |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused Commitments to Extend Credit | $ 414 | $ 413 |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |||||
Loan receivables, net | $ 66,957 | $ 71,602 | |||
Other assets | 3,431 | 3,145 | |||
Total assets | 95,854 | 95,948 | |||
Total liabilities | 82,415 | 83,247 | |||
Financing Receivable, Allowance for Credit Loss | 9,901 | 10,265 | $ 9,175 | $ 8,623 | |
Allowance for loan losses | $ 5,602 | ||||
Loan receivable, before allowance for losses | [1],[2] | 76,858 | 81,867 | ||
Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Loan receivables, net | [3] | 20,598 | 22,683 | ||
Other assets | [4] | 437 | 52 | ||
Total assets | 21,035 | 22,735 | |||
Borrowings | [5] | 7,193 | 7,810 | ||
Other liabilities | 20 | 23 | |||
Total liabilities | 7,213 | 7,833 | |||
Financing Receivable, Allowance for Credit Loss | 2,400 | 2,700 | |||
Loan receivable, before allowance for losses | 23,035 | 25,395 | |||
Variable Interest Entity, Primary Beneficiary | Other Assets [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Restricted Cash Equivalents | $ 433 | $ 48 | |||
[1] | Total loan receivables include $23.0 billion and $25.4 billion of restricted loans of consolidated securitization entities at March 31, 2021 and December 31, 2020, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. | ||||
[2] | At March 31, 2021 and December 31, 2020, loan receivables included deferred costs, net of deferred income, of $158 million and $153 million, respectively. | ||||
[3] | Includes $2.4 billion and $2.7 billion of related allowance for credit losses resulting in gross restricted loans of $23.0 billion and $25.4 billion at March 31, 2021 and December 31, 2020, respectively. | ||||
[4] | Includes $433 million and $48 million of segregated funds held by the VIEs at March 31, 2021 and December 31, 2020, respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Condensed Consolidated Statements of Financial Position. | ||||
[5] | The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | ||||
Allowance for credit losses | $ 9,901 | $ 9,175 | $ 10,265 | $ 8,623 |
Allowance for loan losses | $ 5,602 | |||
Interest and fees on loans | 3,732 | 4,340 | ||
Provision for credit losses | 334 | 1,677 | ||
Variable Interest Entity, Primary Beneficiary | ||||
Variable Interest Entity [Line Items] | ||||
Allowance for credit losses | 2,400 | 2,700 | ||
Interest and fees on loans | 1,100 | 1,300 | ||
Provision for credit losses | (57) | 536 | ||
Interest on borrowings of consolidated securitization entities | 51 | $ 73 | ||
Variable Interest Entity, Primary Beneficiary | Other Assets [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Restricted Cash Equivalents | $ 433 | $ 48 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 2,902 | $ 2,777 |
Accumulated amortization | (1,733) | (1,652) |
Net | 1,169 | 1,125 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,794 | 1,734 |
Accumulated amortization | (1,117) | (1,081) |
Net | 677 | 653 |
Capitalized software and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,108 | 1,043 |
Accumulated amortization | (616) | (571) |
Net | $ 492 | $ 472 |
Intangible Assets Narrative (De
Intangible Assets Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 127 | |
Customer-Related Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets acquired | $ 62 | $ 5 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years | 5 years |
Selling and Marketing Expense [Member] | Retail Partner Contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 32 | $ 32 |
Other Expense | Finite-Lived Intangible Assets, Excluding Retail Partner Contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 50 | $ 50 |
Deposits - Schedule of Deposit
Deposits - Schedule of Deposit Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Deposits [Abstract] | |||
Interest-bearing deposits, amount | $ 62,419 | $ 62,469 | |
Non-interest-bearing deposits, amount | 342 | 313 | |
Total deposits | $ 62,761 | $ 62,782 | |
Average Rate Domestic Deposits | [1] | 1.10% | 1.70% |
[1] | Based on interest expense for the three months ended March 31, 2021 and the year ended December 31, 2020 and average deposits balances. |
Deposits - Maturity Schedule (D
Deposits - Maturity Schedule (Details) $ in Millions | Mar. 31, 2021USD ($) |
Maturities of Time Deposits [Abstract] | |
2021 | $ 14,664 |
2022 | 8,895 |
2023 | 2,002 |
2024 | 2,350 |
2025 | 659 |
Thereafter | $ 254 |
Deposits - Narrative (Details)
Deposits - Narrative (Details) - USD ($) $ in Billions | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of Deposits [Line Items] | ||
Time Deposits, at or Above FDIC Insurance Limit | $ 5.7 | $ 6.5 |
Demand deposits with no defined maturity | 28.4 | |
Deposits, Savings Deposits | 27 | |
Program Arranger | ||
Schedule of Deposits [Line Items] | ||
Broker network deposit sweeps | $ 5.2 |
Borrowings - Borrowings Schedul
Borrowings - Borrowings Schedule (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Amount | |||
Total borrowings | [1] | $ 15,160 | $ 15,775 |
Senior unsecured notes | |||
Amount | |||
Unsecured debt | [1] | $ 7,967 | 7,965 |
Average rate | |||
Weighted average interest rate | 3.94% | ||
Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Amount | |||
Unsecured debt | [1] | $ 6,470 | 6,468 |
Average rate | |||
Weighted average interest rate | 4.08% | ||
Subsidiaries [Member] | Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Amount | |||
Unsecured debt | [1] | $ 1,497 | 1,497 |
Average rate | |||
Weighted average interest rate | 3.33% | ||
Variable Interest Entity, Primary Beneficiary | |||
Average rate | |||
Weighted average interest rate | 2.21% | ||
Borrowings of consolidated securitization entities | [1] | $ 7,193 | 7,810 |
Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings | |||
Average rate | |||
Weighted average interest rate | 2.87% | ||
Borrowings of consolidated securitization entities | [1] | $ 4,893 | 5,510 |
Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings | |||
Average rate | |||
Weighted average interest rate | 0.82% | ||
Borrowings of consolidated securitization entities | [1] | $ 2,300 | $ 2,300 |
Minimum | Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.80% | ||
Minimum | Subsidiaries [Member] | Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ||
Minimum | Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.21% | ||
Minimum | Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 0.75% | ||
Maximum | Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.15% | ||
Maximum | Subsidiaries [Member] | Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.65% | ||
Maximum | Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.87% | ||
Maximum | Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings | |||
Average rate | |||
Debt Instrument, Interest Rate, Stated Percentage | 1.01% | ||
[1] | The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. |
Borrowings - Borrowings Maturit
Borrowings - Borrowings Maturity Schedule (Details) $ in Millions | Mar. 31, 2021USD ($) |
Maturities of Long-term Debt [Abstract] | |
2021 | $ 3,957 |
2022 | 4,583 |
2023 | 1,657 |
2024 | 1,850 |
2025 | 1,000 |
Thereafter | $ 2,150 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) $ in Billions | Mar. 31, 2021USD ($) |
Variable Interest Entity, Primary Beneficiary | |
Debt Instrument [Line Items] | |
Remaining undrawn capacity | $ 4.9 |
Revolving Credit Facility | Unsecured Debt | |
Debt Instrument [Line Items] | |
Undrawn capacity | $ 0.5 |
Fair Value Measurement - Recurr
Fair Value Measurement - Recurring Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets | $ 3,431 | $ 3,145 | |
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets | [1],[2] | 24 | 30 |
Total | [1] | 6,574 | 7,499 |
Business Combination, Contingent Consideration, Liability | [1] | 11 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | [1] | 11 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets | [2] | 15 | 16 |
Total | 15 | 16 | |
Business Combination, Contingent Consideration, Liability | 0 | ||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 0 | ||
Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets | [2] | 0 | 0 |
Total | 6,507 | 7,430 | |
Business Combination, Contingent Consideration, Liability | 0 | ||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 0 | ||
Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets | [2] | 9 | 14 |
Total | 52 | 53 | |
Business Combination, Contingent Consideration, Liability | 11 | ||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 11 | ||
U.S. government and federal agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 2,990 | 3,927 | |
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 | [1] | 2,990 | 3,927 |
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 | 2,990 | 3,927 | |
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 | 35 | 39 | |
State and municipal | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [1] | 35 | 39 |
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 | 35 | 39 | |
Residential mortgage-backed | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [3] | 788 | 842 |
Residential mortgage-backed | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [1] | 788 | 842 |
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 | 788 | 842 | |
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 | |
Asset-backed | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [4] | 2,729 | 2,661 |
Asset-backed | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [1] | 2,729 | 2,661 |
Asset-backed | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
Asset-backed | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 2,729 | 2,661 | |
Asset-backed | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
Other Debt Obligations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 8 | $ 0 | |
Other Debt Obligations | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 8 | ||
Other Debt Obligations | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | ||
Other Debt Obligations | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | ||
Other Debt Obligations | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | $ 8 | ||
[1] | For the three months ended March 31, 2021 and 2020, there were no fair value measurements transferred between levels. | ||
[2] | Other assets primarily relate to equity investments measured at fair value. | ||
[3] | All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At March 31, 2021 and December 31, 2020, $194 million and $229 million of residential mortgage-backed securities, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. | ||
[4] | Our asset-backed securities are collateralized by credit card and auto loans. |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value Asset and Liabilities Carried at Other than Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | $ 16,620 | $ 11,524 |
Other assets | [1],[2] | 481 | 81 |
Loan receivables, net | [3] | 80,092 | 85,234 |
Loans Held-for-sale, Fair Value Disclosure | [3] | 23 | 5 |
Deposits | 63,280 | 63,382 | |
Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 16,620 | 11,524 |
Other assets | [1],[2] | 481 | 81 |
Loan receivables, net | [3] | 66,957 | 71,602 |
Loans Held-for-sale, Fair Value Disclosure | [3] | 23 | 5 |
Deposits | 62,761 | 62,782 | |
Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 16,620 | 11,524 |
Other assets | [1],[2] | 481 | 81 |
Loan receivables, net | [3] | 0 | 0 |
Loans Held-for-sale, Fair Value Disclosure | [3] | 0 | 0 |
Deposits | 0 | 0 | |
Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 0 | 0 |
Other assets | [1],[2] | 0 | 0 |
Loan receivables, net | [3] | 0 | 0 |
Loans Held-for-sale, Fair Value Disclosure | [3] | 0 | 0 |
Deposits | 63,280 | 63,382 | |
Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 0 | 0 |
Other assets | [1],[2] | 0 | 0 |
Loan receivables, net | [3] | 80,092 | 85,234 |
Loans Held-for-sale, Fair Value Disclosure | [3] | 23 | 5 |
Deposits | 0 | 0 | |
Senior Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 8,534 | 8,704 | |
Senior Notes | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 7,967 | 7,965 | |
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 | 8,534 | 8,704 | |
Senior Notes | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Fair Value Disclosure | 0 | 0 | |
Variable Interest Entity, Primary Beneficiary | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 7,328 | 7,977 | |
Variable Interest Entity, Primary Beneficiary | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 7,193 | 7,810 | |
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 | 5,027 | 5,680 | |
Variable Interest Entity, Primary Beneficiary | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | $ 2,301 | $ 2,297 | |
[1] | For cash and equivalents and restricted cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less or acquired within three months or less of their maturity. | ||
[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 in the event of a 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 Adequa_3
Regulatory and Capital Adequacy (Capital Amounts and Ratios) (Details) - Basel III $ in Millions | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Capital conservation buffer | 0.025 | 0.025 | |
Total risk-based capital | |||
Actual | $ 15,146 | $ 14,604 | |
Actual (percent) | [1] | 0.197 | 0.181 |
Minimum for capital adequacy purposes | $ 6,157 | $ 6,445 | |
Minimum for capital adequacy purposes (percent) | [2] | 0.080 | 0.080 |
Tier 1 risk-based capital | |||
Banking Regulation, Tier One Risk-Based Capital, Actual | $ 14,115 | $ 13,525 | |
Actual (percent) | [1] | 0.183 | 0.168 |
Minimum for capital adequacy purposes | $ 4,618 | $ 4,834 | |
Minimum for capital adequacy purposes (percent) | [2] | 0.060 | 0.060 |
Tier 1 leverage | |||
Banking Regulation, Tier One Leverage Capital, Actual | $ 14,115 | $ 13,525 | |
Actual (percent) | [1] | 0.145 | 0.140 |
Minimum for capital adequacy purposes | $ 3,883 | $ 3,869 | |
Minimum for capital adequacy purposes (percent) | [2] | 0.040 | 0.040 |
Common equity Tier I capital | |||
Common equity, actual | $ 13,381 | $ 12,791 | |
Common equity, actual (percent) | [1] | 0.174 | 0.159 |
Common equity, minimum for capital adequacy purposes | $ 3,463 | $ 3,625 | |
Common Equity Tier One Capital Required for Capital Adequacy to Risk Weighted Assets | [2] | 0.045 | 0.045 |
Synchrony Bank | |||
Total risk-based capital | |||
Actual | $ 13,658 | $ 12,784 | |
Actual (percent) | [1] | 0.199 | 0.178 |
Minimum for capital adequacy purposes | $ 5,500 | $ 5,747 | |
Minimum for capital adequacy purposes (percent) | [2] | 0.080 | 0.080 |
Minimum to be well-capitalized under prompt corrective action provisions | $ 6,875 | $ 7,184 | |
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 0.100 | 0.100 | |
Tier 1 risk-based capital | |||
Banking Regulation, Tier One Risk-Based Capital, Actual | $ 12,734 | $ 11,821 | |
Actual (percent) | [1] | 0.185 | 0.165 |
Minimum for capital adequacy purposes | $ 4,125 | $ 4,310 | |
Minimum for capital adequacy purposes (percent) | [2] | 0.060 | 0.060 |
Minimum to be well-capitalized under prompt corrective action provisions | $ 5,500 | $ 5,747 | |
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 0.080 | 0.080 | |
Tier 1 leverage | |||
Banking Regulation, Tier One Leverage Capital, Actual | $ 12,734 | $ 11,821 | |
Actual (percent) | [1] | 0.145 | 0.136 |
Minimum for capital adequacy purposes | $ 3,505 | $ 3,484 | |
Minimum for capital adequacy purposes (percent) | [2] | 0.040 | 0.040 |
Minimum to be well-capitalized under prompt corrective action provisions | $ 4,382 | $ 4,356 | |
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 0.050 | 0.050 | |
Common equity Tier I capital | |||
Common equity, actual | $ 12,734 | $ 11,821 | |
Common equity, actual (percent) | [1] | 0.185 | 0.165 |
Common equity, minimum for capital adequacy purposes | $ 3,094 | $ 3,233 | |
Common Equity Tier One Capital Required for Capital Adequacy to Risk Weighted Assets | [2] | 0.045 | 0.045 |
Common equity, minimum to be well-capitalized under prompt corrective action provisions | $ 4,469 | $ 4,669 | |
Common Equity Tier One Capital Required to be Well Capitalized Risk Weighted Assets | 0.065 | 0.065 | |
[1] | Capital ratios are calculated based on the Basel III Standardized Approach rules. Capital amounts and ratios at March 31, 2021 and at December 31, 2020 in the above tables reflect the application of the CECL regulatory capital transition adjustment. | ||
[2] | At March 31, 2021 and at December 31, 2020, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 2.5 percentage points to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. |
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 | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net earnings | $ 1,025 | $ 286 |
Preferred stock dividends | (11) | (11) |
Net earnings available to common stockholders | $ 1,014 | $ 275 |
Weighted average common shares outstanding, basic (in shares) | 583.3 | 604.9 |
Effect of dilutive securities (in shares) | 4.2 | 2.5 |
Weighted average common shares outstanding, dilutive (in shares) | 587.5 | 607.4 |
Earnings per basic common share (in usd per share) | $ 1.74 | $ 0.45 |
Earnings per diluted common share (in usd per share) | $ 1.73 | $ 0.45 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 1 | 5 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Unrecognized tax benefits, excluding related interest expense and penalties | [1] | $ 228 | $ 268 |
Portion that, if recognized, would reduce tax expense and effective tax rate | [2] | 167 | $ 183 |
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 56 | ||
Decrease in Unrecognized Tax Benefits That Would Impact Effective Tax Rate | $ 30 | ||
[1] | Interest and penalties related to unrecognized tax benefits were not material for all periods presented. | ||
[2] | Comprised of federal unrecognized tax benefits and state and local unrecognized tax benefits net of the effects of associated U.S. federal income taxes. Excludes amounts attributable to any related valuation allowances resulting from associated increases in deferred tax assets. |