Risk Factors Update Summary

• The company expects the acquisition of Ally Lending and sale of Pets Best to close in Q1 2024. These transactions will be subject to fair value measurements. This change might result in significant changes in the company's financial statements.
• Acquiring Ally Lending for $2.2 billion in loan receivables and selling Pets Best Insurance Services.
• Synchrony may become subject to long-term debt requirements due to proposed rulemaking, impacting funding strategy and potentially increasing funding costs.
• A final rule increases FDIC insurance costs for Synchrony, with a special assessment of $9 million recognized in Q4 2023.
• Interest income on loan receivables increased from $16 billion in 2022 to $19 billion in 2023. This change might indicate a significant shift in the company's revenue streams.
• Increase in total loan receivables from $92.47 billion to $102.98 billion.
• Financial liabilities increased by $12,354 million, with deposits increasing by $218 million.
• Proposed changes to capital requirements for banking organizations with over $100 billion in assets may impact Synchrony's ability to pay dividends or repurchase stock.
• Amortization expense increased from $294 million to $392 million for intangible assets.
• Cash and equivalents increased by $19 million, including $93 million of restricted cash and equivalents.
• Late fees on credit products generated $982 million in 2022 and $1.0 billion in 2023. A significant reduction in late fees could impact the company's revenue and competitiveness.
• Senior and subordinated unsecured notes increased by $434 million to $7,964 million.
• Increase in borrowings from $14.19 billion to $15.98 billion, including senior notes issuance.
• The company's net charge-offs and allowances for credit losses increased from 3% in 2022 to 4% in 2023. This change might indicate a higher risk in the company's loan portfolio.
• New accounting standards resulted in a $294 million reduction in the allowance for credit losses, with a corresponding increase to retained earnings of $222 million.
• Fair value of debt securities increased from $3.78 billion to $3.82 billion.
• Loan receivables from customers with a VantageScore accounted for 26% in 2022 and 27% in 2023. This change might indicate a slight increase in the credit risk profile of the company's customers.
• Changes in presentation moved contract costs related to retailer partner agreements from Intangible assets to Other assets on the financial statements.
• Interchange fees received by the company increased from $982 million in 2022 to $1.0 billion in 2023. This change might indicate a growth in transaction volumes or fee structures.
• Amortized cost basis of consumer installment loans decreased from $931 million to $719 million.
• The FASB issued ASU 2023-07 and ASU 2023-09, impacting segment reporting and income tax disclosures, to be adopted in future filings.
• The company's total consolidated assets increased from $98.2 billion in 2022 to $100 billion in 2023. This change might impact the company's regulatory requirements and risk management strategies.
• Delinquent loans decreased from $2.53 billion to $2.33 billion, with a decrease in delinquent credit cards.
• Loan modifications for borrowers experiencing financial difficulty may lead to restructurings and potential classification as Troubled Debt Restructurings (TDRs).