SYNCHRONY FINANCIAL MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

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The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our condensed consolidated
financial statements and related notes included elsewhere in this quarterly
report and in our 2021 Form 10-K. The discussion below contains forward-looking
statements that are based upon current expectations and are subject to
uncertainty and changes in circumstances. Actual results may differ materially
from these expectations. See "Cautionary Note Regarding Forward-Looking
Statements."

Introduction and Business Overview
____________________________________________________________________________________________
We are a premier consumer financial services company delivering one of the
industry's most complete, digitally-enabled product suites. Our experience,
expertise and scale encompass a broad spectrum of industries including digital,
health and wellness, retail, telecommunications, home, auto, powersports, pet
and more. We have an established and diverse group of national and regional
retailers, local merchants, manufacturers, buying groups, industry associations
and healthcare service providers, which we refer to as our "partners." For the
three months ended March 31, 2022, we financed $40.5 billion of purchase volume
and had 70.1 million average active accounts, and at March 31, 2022, we had
$78.9 billion of loan receivables.

We offer our credit products primarily through our wholly-owned subsidiary, the
Bank. In addition, through the Bank, we offer, directly to retail, affinity
relationships and commercial customers, a range of deposit products insured by
the Federal Deposit Insurance Corporation ("FDIC"), including certificates of
deposit, individual retirement accounts ("IRAs"), money market accounts, savings
accounts and sweep and affinity deposits. We also take deposits at the Bank
through third-party securities brokerage firms that offer our FDIC-insured
deposit products to their customers. We have significantly expanded our online
direct banking operations in recent years and our deposit base serves as a
source of stable and diversified low cost funding for our credit activities. At
March 31, 2022, we had $63.6 billion in deposits, which represented 83% of our
total funding sources.

Our Sales Platforms
_________________________________________________________________

We conduct our operations through a single business segment. Profitability and
expenses, including funding costs, credit losses and operating expenses, are
managed for the business as a whole. Substantially all of our revenue activities
are within the United States. We primarily manage our credit products through
five sales platforms (Home & Auto, Digital, Diversified & Value, Health &
Wellness and Lifestyle). Those platforms are organized by the types of partners
we work with, and are measured on interest and fees on loans, loan receivables,
active accounts and other sales metrics.

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Home and automobile

Our Home & Auto sales platform provides comprehensive payments and financing
solutions with integrated in-store and digital experiences through a broad
network of partners and merchants providing home and automotive merchandise and
services, as well as our Synchrony Car Care network and Synchrony HOME credit
card offering. Our Home & Auto sales platform partners include a wide range of
key retailers in the home improvement, furniture, bedding, appliance and
electronics industry, such as Ashley HomeStores LTD, Lowe's, and Mattress Firm,
as well as automotive merchandise and services, such as Chevron and Discount
Tire. In addition, we also have program agreements with buying groups,
manufacturers and industry associations, such as Nationwide Marketing Group and
the Home Furnishings Association.

Digital

Our Digital sales platform provides comprehensive payments and financing
solutions with integrated digital experiences through partners and merchants who
primarily engage with their consumers through digital channels. Our Digital
sales platform includes key partners delivering digital payment solutions, such
as PayPal, including our Venmo program, online marketplaces, such as Amazon and
eBay, and digital-first brands and merchants, such as Verizon, the Qurate
brands, and Fanatics.

Diversified and value

Our Diversified & Value sales platform provides comprehensive payments and
financing solutions with integrated in-store and digital experiences through
large retail partners who deliver everyday value to consumers shopping for daily
needs or important life moments. Our Diversified & Value sales platform is
comprised of five large retail partners: Belk, Fleet Farm, JCPenney, Sam's Club
and TJX Companies, Inc.

Health & Wellness

Our Health & Wellness sales platform provides comprehensive healthcare payments
and financing solutions, through a network of providers and health systems, for
those seeking health and wellness care for themselves, their families and their
pets, and includes key brands such as CareCredit and Pets Best, as well as
partners such as Walgreens.
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Way of life

Lifestyle provides comprehensive payments and financing solutions with
integrated in-store and digital experiences through partners and merchants who
offer merchandise in power sports, outdoor power equipment, and other industries
such as sporting goods, apparel, jewelry and music. Our Lifestyle sales platform
partners includes a wide range of key retailers in the apparel, specialty
retail, outdoor, music and luxury industry, such as
American Eagle, Dick's Sporting Goods, Guitar Center, Polaris and Pandora.

Company, Other

Corp, Other includes activity and balances related to certain program agreements
with retail partners and merchants that will not be renewed beyond their current
expiry date and certain programs that were previously terminated, which are not
managed within the five sales platforms discussed above, and primarily includes
amounts associated with our program agreements with Gap Inc. and BP which are
scheduled to expire in the second quarter of 2022. Corp, Other also includes
amounts related to changes in the fair value of equity investments and realized
gains or losses associated with the sale of investments.


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Our Credit Products
____________________________________________________________________________________________
Through our sales platforms, we offer three principal types of credit products:
credit cards, commercial credit products and consumer installment loans. We also
offer a debt cancellation product.

The following table sets forth each credit product by type and indicates the
percentage of our total loan receivables that are under standard terms only or
pursuant to a promotional financing offer at March 31, 2022.

                                                                                     Promotional Offer
Credit Product                             Standard Terms Only         Deferred Interest           Other Promotional                Total
Credit cards                                           57.5  %                     20.6  %                      16.4  %                  94.5  %
Commercial credit products                              1.9                           -                            -                      1.9
Consumer installment loans                              0.1                         0.1                          3.3                      3.5
Other                                                   0.1                           -                            -                      0.1
Total                                                  59.6  %                     20.7  %                      19.7  %                 100.0  %


Credit Cards

We offer the following main types of credit cards:

•Private Label Credit Cards. Private label credit cards are partner-branded
credit cards (e.g., Lowe's or Amazon) or program-branded credit cards (e.g.,
Synchrony Car Care or CareCredit) that are used primarily for the purchase of
goods and services from the partner or within the program network. In addition,
in some cases, cardholders may be permitted to access their credit card accounts
for cash advances. Credit under our private label credit cards typically is
extended either on standard terms only or pursuant to a promotional financing
offer.

•Dual Cards and General Purpose Co-Branded Cards. Our patented Dual Cards are
credit cards that function as private label credit cards when used to purchase
goods and services from our partners, and as general purpose credit cards when
used to make purchases from other retailers wherever cards from those card
networks are accepted or for cash advance transactions. We also offer general
purpose co-branded credit cards that do not function as private label credit
cards, as well as a Synchrony-branded general purpose credit card. Dual Cards
and general purpose co-branded credit cards are offered across all of our sales
platforms and credit is typically extended on standard terms only. We offer
either Dual Cards or general purpose co-branded credit cards through 21 credit
partners, of which the majority are Dual Cards, as well as our CareCredit Dual
Card. Consumer Dual Cards and Co-Branded cards totaled 25% of our total loan
receivables portfolio, including held for sale, at March 31, 2022.

Trade credit products

We offer private label cards and dual cards for business customers that are similar to our consumer offerings. We also offer an accounts receivable payment in full business product to a wide range of business customers.

Installment loans

We originate installment loans to consumers (and a limited number of commercial
customers) in the United States, primarily in the power products market
(motorcycles, ATVs and lawn and garden), as well as through our various SetPay
installment products (such as our SetPay Pay in 4 product for short-term loans).
Installment loans are closed-end credit accounts where the customer pays down
the outstanding balance in installments. Installment loans are generally
assessed periodic finance charges using fixed interest rates.

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Business Trends and Conditions
____________________________________________________________________________________________
We believe our business and results of operations will be impacted in the future
by various trends and conditions. For a discussion of certain trends and
conditions, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Business Trends and Conditions" in our 2021 Form 10-K. For
a discussion of how certain trends and conditions impacted the three months
ended March 31, 2022, see "-Results of Operations."


Seasonality

______________________________________________________________________________________________

We experience fluctuations in transaction volumes and the level of loan
receivables as a result of higher seasonal consumer spending and payment
patterns that typically result in an increase of loan receivables from August
through a peak in late December, with reductions in loan receivables occurring
over the first and second quarters of the following year as customers pay their
balances down.

The seasonal impact on transaction volumes and loan receivables balance generally causes our operating results, default metrics and allowance for credit losses as a percentage of total loans receivable to fluctuate between periods. quarterly.

In addition to the seasonal variance in loan receivables discussed above, we
also typically experience a seasonal increase in delinquency rates and
delinquent loan receivables balances during the third and fourth quarters of
each year due to lower customer payment rates resulting in higher net charge-off
rates in the first and second quarters. Our delinquency rates and delinquent
loan receivables balances typically decrease during the subsequent first and
second quarters as customers begin to pay down their loan balances and return to
current status resulting in lower net charge-off rates in the third and fourth
quarters. Because customers who were delinquent during the fourth quarter of a
calendar year have a higher probability of returning to current status when
compared to customers who are delinquent at the end of each of our interim
reporting periods, we expect that a higher proportion of delinquent accounts
outstanding at an interim period end will result in charge-offs, as compared to
delinquent accounts outstanding at a year end. Consistent with this historical
experience, we generally experience a higher allowance for credit losses as a
percentage of total loan receivables at the end of an interim period, as
compared to the end of a calendar year. In addition, despite improving credit
metrics such as declining past due amounts, we may experience an increase in our
allowance for credit losses at an interim period end compared to the prior year
end, reflecting these same seasonal trends.

The seasonal trends discussed above are most evident between the fourth quarter
and the first quarter of the following year. In addition to these seasonal
trends, we continue to experience improvements in customer payment behavior,
which include the effects of governmental stimulus actions, industry-wide
forbearance measures and elevated consumer savings. Customer payments as a
percentage of beginning-of-period loan receivables for the three months ended
March 31, 2022 were approximately 45 basis points higher than the prior year
period, and are significantly elevated compared to historical averages.

Loan receivables decreased by $1.8 billion, or 2.3% to $78.9 billion at March
31, 2022 compared to $80.7 billion at December 31, 2021, and our allowance for
credit losses as a percentage of total loan receivables increased to 10.96% at
March 31, 2022, from 10.76% at December 31, 2021, reflecting the seasonal trends
discussed above. Past due balances increased to $2.2 billion at March 31, 2022
from $2.1 billion at December 31, 2021 as the effects from some moderation in
elevated payment rates exceeded the impact of the seasonal trends we
experienced.
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Results of Operations ____________________________________________________________________________________________ Highlights for the Three Months Ended March 31, 2022

Below are highlights of our performance for the three months ended March 31,
2022 compared to the three months ended March 31, 2021, as applicable, except as
otherwise noted.

•Net earnings decreased to $932 million from $1.0 billion. The decrease in the
three months ended March 31, 2022 was primarily driven by increases in provision
for credit losses, retailer share arrangements and other expense, partially
offset by higher net interest income.

•Loan receivables increased to $78.9 billion at March 31, 2022 compared to $76.9
billion at March 31, 2021, driven by strong purchase volume growth, partially
offset by the reclassification of loan receivables associated with the Gap Inc
and BP portfolios to loan receivables held for sale. Loan receivables held for
sale at March 31, 2022 were $4.0 billion. Excluding the impact of the
reclassifications of these portfolios to loan receivables held for sale, loan
receivables increased 7.9% reflecting strong purchase volume growth of 16.5%,
partially offset by elevated customer payment rates.

•Net interest income increased 10.2% to $3.8 billion for the three months ended
March 31, 2022. Interest and fees on loans increased by $276 million, or 7.4%,
driven by growth in average loan receivables and interest expense decreased by
$70 million, or 23.1%, primarily attributed to lower benchmark rates and lower
funding liabilities.

• Stock ownership agreements with retailers increased by 11.6% to reach $1.1 billion for the three months ended March 31, 2022primarily due to the program’s continued strong performance.

•Over-30 day loan delinquencies as a percentage of period-end loan receivables
decreased 5 basis points to 2.78% at March 31, 2022. Excluding amounts related
to the held for sale portfolios, the decrease compared to the prior year was
approximately 15 basis points. The net charge-off rate decreased 89 basis points
to 2.73% for the three months ended March 31, 2022.

•Provision for credit losses increased by $187 million, or 56.0% for the three
months ended March 31, 2022 primarily driven by a lower reserve release compared
to prior year, partially offset by lower net charge-offs. The reduction in
reserves for credit losses in the current year included a $29 million reserve
reduction related to the held for sale portfolios. Our allowance coverage ratio
(allowance for credit losses as a percent of period-end loan receivables)
decreased to 10.96% at March 31, 2022, as compared to 12.88% at March 31, 2021.

•Other expenses increased by $107 millionor 11.5% for the three months ended
March 31, 2022primarily due to higher employee, marketing, business development and technology costs.

•TO March 31, 2022, deposits accounted for 83% of our total funding sources. Total deposits increased by 2.1% to $63.6 billion to March 31, 2022compared to
December 31, 2021.

• During the three months ended March 31, 2022we declared and paid cash dividends on our 5.625% Series A Non-Cumulative Preferred Shares $14.06 per share, or $10 million.

•In April 2022, we announced that our Board approved an incremental share
repurchase authorization of $2.8 billion through June 2023 and plans to increase
our quarterly dividend by 5% to $0.23 per common share commencing in the third
quarter of 2022. During the three months ended March 31, 2022, we repurchased
$967 million of our outstanding common stock, and declared and paid cash
dividends of $0.22 per share, or $114 million. Inclusive of the $251 million of
remaining authorized share repurchase capacity at March 31, 2022 we have a total
share repurchase authorization of $3.1 billion. For more information, see
"Capital-Dividend and Share Repurchases."

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Partner agreements 2022

During the quarter ended March 31, 2022we continued to expand and diversify our portfolio with the addition or renewal of more than 15 partners, including:

• In our Home & Auto sales platform, we announced our new partnership with
Furnitureland South and extended our agreements with Cardi’s, Generac Power Systems, Mattress warehouseNAPA AutoCare and New South Window Solutions.

• In our Health and Wellness sales platform, we have expanded our network thanks to our new partnerships with Buffalo Veterinary Group and Service Corporation International and extended our agreements with Encore Vet Group.

•In our Lifestyle retail platform, we have extended our program agreements with Guitar Center and Reeds.

Summary Earnings

The following table sets forth our results of operations for the periods
indicated.

                                                                     Three months ended March 31,
($ in millions)                                                        2022                  2021
Interest income                                                  $        4,022          $    3,742
Interest expense                                                            233                 303
Net interest income                                                       3,789               3,439
Retailer share arrangements                                              (1,104)               (989)

Provision for credit losses                                                 521                 334
Net interest income, after retailer share arrangements and
provision for credit losses                                               2,164               2,116
Other income                                                                108                 131
Other expense                                                             1,039                 932
Earnings before provision for income taxes                                1,233               1,315
Provision for income taxes                                                  301                 290
Net earnings                                                     $          932          $    1,025
Net earnings available to common stockholders                    $          

922 $1,014


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Other financial and statistical data

The following table sets forth certain other financial and statistical data for
the periods indicated.

                                                                            At and for the
                                                                     Three months ended March 31,
($ in millions)                                                       2022                   2021
Financial Position Data (Average):
Loan receivables, including held for sale                       $      82,747           $    78,358
Total assets                                                    $      95,556           $    96,455
Deposits                                                        $      62,688           $    63,070
Borrowings                                                      $      14,046           $    15,659
Total equity                                                    $      13,731           $    13,071
Selected Performance Metrics:
Purchase volume(1)(2)                                           $      40,490           $    34,749
Home & Auto                                                     $      10,260           $     9,337
Digital                                                         $      11,196           $     9,340
Diversified & Value                                             $      11,558           $     9,220
Health & Wellness                                               $       3,107           $     2,648
Lifestyle                                                       $       1,195           $     1,154
Corp, Other                                                     $       3,174           $     3,050
Average active accounts (in thousands)(2)(3)                           70,127                66,280
Net interest margin(4)                                                  15.80   %             13.98  %
Net charge-offs                                                 $         558           $       699

Net write-offs as % of average loan receivables, including held for sale

                                                            2.73   %              3.62  %
Allowance coverage ratio(5)                                             10.96   %             12.88  %
Return on assets(6)                                                       4.0   %               4.3  %
Return on equity(7)                                                      27.5   %              31.8  %
Equity to assets(8)                                                     14.37   %             13.55  %
Other expense as a % of average loan receivables, including
held for sale                                                            5.09   %              4.82  %
Efficiency ratio(9)                                                      37.2   %              36.1  %
Effective income tax rate                                                24.4   %              22.1  %
Selected Period-End Data:
Loan receivables                                                $      78,916           $    76,858
Allowance for credit losses                                     $       8,651           $     9,901
30+ days past due as a % of period-end loan receivables(10)              2.78   %              2.83  %
90+ days past due as a % of period-end loan receivables(10)              1.30   %              1.52  %
Total active accounts (in thousands)(2)(3)                             69,122                65,219


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(1)Purchase volume, or net credit sales, represents the aggregate amount of
charges incurred on credit cards or other credit product accounts less returns
during the period.
(2)Includes activity and accounts associated with loan receivables held for
sale.
(3)Active accounts represent credit card or installment loan accounts on which
there has been a purchase, payment or outstanding balance in the current month.
(4)Net interest margin represents net interest income divided by average
interest-earning assets.
(5)Allowance coverage ratio represents allowance for credit losses divided by
total period-end loan receivables.
(6)Return on assets represents net earnings as a percentage of average total
assets.
(7)Return on equity represents net earnings as a percentage of average total
equity.
(8)Equity to assets represents average total equity as a percentage of average
total assets.
(9)Efficiency ratio represents (i) other expense, divided by (ii) sum of net
interest income, plus other income, less retailer share arrangements.
(10)Based on customer statement-end balances extrapolated to the respective
period-end date.
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Average balance sheet

The following tables set forth information for the periods indicated regarding
average balance sheet data, which are used in the discussion of interest income,
interest expense and net interest income that follows.

                                                                         2022                                                     2021
                                                                     Interest            Average                              Interest            Average
                                                    Average          Income /            Yield /             Average           Income/            Yield /

Three months completed March, 31st (in millions of dollars) Balance Expenditure

            Rate(1)             Balance           Expense            

Tariff(1)

Assets

Interest-earning assets:
Interest-earning cash and equivalents(2)          $  8,976          $      5                 0.23  %       $ 14,610          $      4                 0.11  %
Securities available for sale                        5,513                 9                 0.66  %          6,772                 6                 0.36  %
Loan receivables, including held for sale(3):
Credit cards                                        78,564             3,913                20.20  %         74,865             3,657                19.81  %
Consumer installment loans                           2,682                66                 9.98  %          2,219                53                 9.69  %
Commercial credit products                           1,434                28                 7.92  %          1,231                21                 6.92  %
Other                                                   67                 1                      NM             43                 1                      NM
Total loan receivables, including held for sale     82,747             4,008                19.64  %         78,358             3,732                19.32  %
Total interest-earning assets                       97,236             4,022                16.78  %         99,740             3,742                15.22  %
Non-interest-earning assets:
Cash and due from banks                              1,626                                                    1,635
Allowance for credit losses                         (8,675)                                                 (10,225)
Other assets                                         5,369                                                    5,305
Total non-interest-earning assets                   (1,680)                                                  (3,285)
Total assets                                      $ 95,556                                                 $ 96,455
Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts                 $ 62,314          $    127                 0.83  %       $ 62,724          $    170                 1.10  %
Borrowings of consolidated securitization
entities                                             6,827                33                 1.96  %          7,694                51                 2.69  %

Senior unsecured notes                               7,219                73                 4.10  %          7,965                82                 4.18  %

Total interest-bearing liabilities                  76,360               233                 1.24  %         78,383               303                 1.57  %
Non-interest-bearing liabilities:
Non-interest-bearing deposit accounts                  374                                                      346
Other liabilities                                    5,091                                                    4,655
Total non-interest-bearing liabilities               5,465                                                    5,001
Total liabilities                                   81,825                                                   83,384
Equity
Total equity                                        13,731                                                   13,071
Total liabilities and equity                      $ 95,556                                                 $ 96,455
Interest rate spread(4)                                                                     15.54  %                                                 13.65  %
Net interest income                                                 $  3,789                                                 $  3,439
Net interest margin(5)                                                                      15.80  %                                                 13.98  %


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(1)Average yields/rates are based on total interest income/expense over average
balances.
(2)Includes average restricted cash balances of $614 million and $423 million
for the three months ended March 31, 2022 and 2021, respectively.
(3)Interest income on loan receivables includes fees on loans of $652 million
and $514 million for the three months ended March 31, 2022 and 2021,
respectively.
(4)Interest rate spread represents the difference between the yield on total
interest-earning assets and the rate on total interest-bearing liabilities.
(5)Net interest margin represents net interest income divided by average total
interest-earning assets.
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For a summary description of the composition of our material items included in our statements of operations, see the MD&A and Discussion of Financial Condition and Results of Operations in our 2021 Form 10-K.

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