Synchrony Financial (NYSE:SYF) Q4 2019 Earnings Conference Call - Final Transcript

Jan 24, 2020 • 07:30 am ET


Synchrony Financial (NYSE:SYF) Q4 2019 Earnings Conference Call - Final Transcript


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Welcome to the Synchrony Financial Fourth Quarter 2019 Earnings Conference Call. My name is Vanessa and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded.

I will now turn the call over to Mr. Greg Ketron, Director of Investor Relations. Greg, you may begin.

Greg Ketron

Thanks, operator. Good morning everyone and welcome to our quarterly earnings conference call. Thanks for joining us. In addition to today's press release, we have provided a presentation that covers the topics we plan to address during our call. The press release, detailed financial schedules and presentation are available on our website, This information can be accessed by going to the Investor Relations section of the website.

Before we get started, I wanted to remind you that our comments today will include forward-looking statements. These statements are subject to risks and uncertainty, and actual results could differ materially, we list the factors that might cause actual results to differ materially in our SEC filings, which are available on our website. During the call, we will refer to non-GAAP financial measures in discussing the company's performance. You can find a reconciliation of these measures to GAAP financial measures in our materials for today's call. Finally, Synchrony Financial is not responsible for and does not edit nor guarantee the accuracy of our earnings teleconference transcripts provided by third parties. The only authorized webcasts are located on our website.

Now it's my pleasure to turn the call over to Margaret.

Margaret Keane

Thanks Greg. Good morning everyone and thanks for joining us today. 2019 marked another year of significant transformation for Synchrony. Across all of our sales platforms, we renewed more than 50 existing partnerships, while also signing 30 new business deals. We expanded our CareCredit card network and our auto and home networks. We significantly enhanced the digital experience for cardholders, and substantially grew our direct-to-consumer deposit platform.

During our five years as a public company, we have made significant investments in people and technology, and that has propelled the company forward and enabled the development of innovative offerings for our partners and enhanced our capabilities and user experiences for our cardholders.

In the fourth quarter, earnings were $731 million or $1.15 per diluted share, which included the remaining reduction in the reserve related to the sale of the Walmart consumer portfolio in October. The reduction totaled $38 million or $28 million after tax, and provided an EPS benefit of $0.05 for the quarter, as outlined in slide 3 of the presentation.

Loan receivables were down 6%. However, on a core basis, which excludes Walmart and the Yamaha portfolio that we moved to loans held for sale in the fourth quarter, loan receivables were up 5%. On a core basis, the loan receivables growth drove 5% growth in interest and fees. Purchase volume was up 7%, and average active accounts increased 3%. The efficiency ratio was