How did Synchrony's fourth quarter 2024 earnings compare with the prior year?

Net earnings were $774 million, or $1.91 per diluted share, compared with $440 million, or $1.03 per diluted share, in the fourth quarter of 2023. The filing attributes the improvement to higher net interest income and a lower provision for credit losses, which included a $100 million reserve release versus a $402 million reserve build a year earlier.

Are credit quality trends improving?

Mixed. Loans 30+ days past due improved to 4.70% from 4.74%, but net charge-offs rose to 6.45% of average loan receivables from 5.58%. The allowance for credit losses was 10.44% of period-end loan receivables, down from 10.79% in the third quarter of 2024. Management said it remains confident in returning to its long-term net charge-off target.

What is the company's 2025 outlook?

The filing projects period-end loan receivables growth of low single digits, net revenue of $15.2 to $15.7 billion, net charge-offs of 5.8% to 6.1%, and an efficiency ratio of 31.5% to 32.5%. The outlook excludes any impact of the CFPB late fee rule, which the company notes would make the outlook inapplicable if it takes effect.

How strong is Synchrony's capital and liquidity position?

The estimated Common Equity Tier 1 ratio was 13.3%, up from 12.2% a year earlier, and the Tier 1 Capital ratio was 14.5%, up from 12.9%. Total liquid assets and undrawn credit facilities were $19.8 billion, or 16.6% of total assets. As of December 31, 2024, the company had $600 million remaining under its share repurchase authorization.

What drove the decline in purchase volume and new accounts?

The filing attributes the decline to credit actions taken from mid-2023 through early 2024, along with more selective acquisition and lower consumer traffic in Home & Auto. Purchase volume fell 3% to $48.0 billion, and new accounts fell 19% to 5.0 million, while average active accounts fell 2% to 70.3 million.

Synchrony Financial 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed January 28, 2025. Cited figures are marked; the original filing is the authoritative source.

Synchrony Financial (NYSE: SYF) reported fourth quarter 2024 net earnings of $774 million^a, or $1.91 per diluted share, compared to $440 million, or $1.03 per diluted share in the fourth quarter of 2023.

Net interest income rose 3% to $4.6 billion^b, driven by higher interest and fees on loans. Provision for credit losses fell $243 million to $1.6 billion, reflecting a $100 million reserve release versus a $402 million reserve build a year earlier, partially offset by higher net charge-offs. Net charge-offs were 6.45% of average loan receivables, up from 5.58% a year earlier, and 30+ day delinquencies improved slightly to 4.70%.

Operating metrics were mixed. Purchase volume decreased 3% to $48.0 billion^c, average active accounts decreased 2% to 70.3 million, and new accounts decreased 19% to 5.0 million, reflecting credit actions taken from mid-2023 through early 2024. Period-end loan receivables grew 2% to $104.7 billion.

Other expense decreased 4% to $1.3 billion, while other income rose to $128 million^d, primarily from PPPC-related fees, partially offset by the Pets Best disposition. Management said it remains confident in returning to its long-term net charge-off target. Capital and liquidity strengthened.

The estimated CET1 ratio rose to 13.3% from 12.2%, and the company returned $197 million to shareholders, including $100 million of share repurchases and $97 million of common dividends. Deposits totaled $82.1 billion and comprised 84% of funding. The filing's outlook for full-year 2025 calls for low single-digit period-end loan receivables growth, net revenue of $15.2 to $15.7 billion, net charge-offs of 5.8% to 6.1%, and an efficiency ratio of 31.5% to 32.5%, and it excludes any impact of the CFPB late fee rule.

02—Key points

Key Highlights

Q4 2024 net earnings of $774 million ($1.91 diluted EPS), up from $440 million ($1.03) in Q4 2023.
Net interest income up 3% to $4.6 billion; provision for credit losses down $243 million to $1.6 billion, including a $100 million reserve release.
Net charge-offs rose to 6.45% of average loan receivables from 5.58%, while 30+ day past due loans improved to 4.70% from 4.74%.
Purchase volume fell 3% to $48.0 billion; new accounts fell 19% to 5.0 million, reflecting prior credit actions.
Period-end loan receivables grew 2% to $104.7 billion; deposits reached $82.1 billion, 84% of funding.
Estimated CET1 ratio rose to 13.3% from 12.2%; $197 million returned to shareholders, including $100 million in share repurchases.
2025 outlook: net revenue of $15.2 to $15.7 billion, net charge-offs of 5.8% to 6.1%, and an efficiency ratio of 31.5% to 32.5%, excluding any late fee rule impact.

03—Questions

Frequently Asked Questions

How did Synchrony's fourth quarter 2024 earnings compare with the prior year?
Net earnings were $774 million, or $1.91 per diluted share, compared with $440 million, or $1.03 per diluted share, in the fourth quarter of 2023. The filing attributes the improvement to higher net interest income and a lower provision for credit losses, which included a $100 million reserve release versus a $402 million reserve build a year earlier.
Are credit quality trends improving?
Mixed. Loans 30+ days past due improved to 4.70% from 4.74%, but net charge-offs rose to 6.45% of average loan receivables from 5.58%. The allowance for credit losses was 10.44% of period-end loan receivables, down from 10.79% in the third quarter of 2024. Management said it remains confident in returning to its long-term net charge-off target.
What is the company's 2025 outlook?
The filing projects period-end loan receivables growth of low single digits, net revenue of $15.2 to $15.7 billion, net charge-offs of 5.8% to 6.1%, and an efficiency ratio of 31.5% to 32.5%. The outlook excludes any impact of the CFPB late fee rule, which the company notes would make the outlook inapplicable if it takes effect.
How strong is Synchrony's capital and liquidity position?
The estimated Common Equity Tier 1 ratio was 13.3%, up from 12.2% a year earlier, and the Tier 1 Capital ratio was 14.5%, up from 12.9%. Total liquid assets and undrawn credit facilities were $19.8 billion, or 16.6% of total assets. As of December 31, 2024, the company had $600 million remaining under its share repurchase authorization.
What drove the decline in purchase volume and new accounts?
The filing attributes the decline to credit actions taken from mid-2023 through early 2024, along with more selective acquisition and lower consumer traffic in Home & Auto. Purchase volume fell 3% to $48.0 billion, and new accounts fell 19% to 5.0 million, while average active accounts fell 2% to 70.3 million.

04—Continue

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