Attached files
| file | filename |
|---|---|
| EX-99.4 - EXHIBIT 99.4 - Synchrony Financial | non-gaapmeasures3q20.htm |
| EX-99.2 - EXHIBIT 99.2 - Synchrony Financial | financialtables3q20.htm |
| EX-99.1 - EXHIBIT 99.1 - Synchrony Financial | earningsrelease3q20.htm |
| 8-K - 8-K - Synchrony Financial | a8-k3q20earnings.htm |
Exhibit 99.3 3Q’20 Financial Results October 20, 2020
Disclaimers Cautionary Statement Regarding Forward-Looking Statements The following slides are part of a presentation by Synchrony Financial in connection with reporting quarterly financial results. No representation is made that the information in these slides is complete. For additional information, see the earnings release and financial supplement included as exhibits to our Current Report on Form 8-K filed today and available on our website (www.synchronyfinancial.com) and the SEC's website (www.sec.gov). All references to net earnings and net income are intended to have the same meaning. This presentation contains certain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "targets," "outlook," "estimates," "will," "should," "may" or words of similar meaning, but these words are not the exclusive means of identifying forward-looking statements. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include global political, economic, business, competitive, market, regulatory and other factors and risks, such as: the impact of macroeconomic conditions and whether industry trends we have identified develop as anticipated, including the future impacts of the novel coronavirus disease (“COVID-19”) outbreak and measures taken in response thereto for which future developments are highly uncertain and difficult to predict; retaining existing partners and attracting new partners, concentration of our revenue in a small number of Retail Card partners, and promotion and support of our products by our partners; cyber-attacks or other security breaches; disruptions in the operations of our computer systems and data centers; the financial performance of our partners; the sufficiency of our allowance for credit losses and the accuracy of the assumptions or estimates used in preparing our financial statements, including those related to the new CECL accounting guidance; higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to grow our deposits in the future; damage to our reputation; our ability to securitize our loan receivables, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loan receivables, and lower payment rates on our securitized loan receivables; changes in market interest rates and the impact of any margin compression; effectiveness of our risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, our ability to manage our credit risk; our ability to offset increases in our costs in retailer share arrangements; competition in the consumer finance industry; our concentration in the U.S. consumer credit market; our ability to successfully develop and commercialize new or enhanced products and services; our ability to realize the value of acquisitions and strategic investments; reductions in interchange fees; fraudulent activity; failure of third parties to provide various services that are important to our operations; international risks and compliance and regulatory risks and costs associated with international operations; alleged infringement of intellectual property rights of others and our ability to protect our intellectual property; litigation and regulatory actions; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions and/or interpretations, and state sales tax rules and regulations; a material indemnification obligation to GE under the Tax Sharing and Separation Agreement with GE if we cause the split-off from GE or certain preliminary transactions to fail to qualify for tax-free treatment or in the case of certain significant transfers of our stock following the split-off; regulation, supervision, examination and enforcement of our business by governmental authorities, the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislative and regulatory developments and the impact of the Consumer Financial Protection Bureau’s regulation of our business; impact of capital adequacy rules and liquidity requirements; restrictions that limit our ability to pay dividends and repurchase our common stock, and restrictions that limit the Synchrony Bank’s ability to pay dividends to us; regulations relating to privacy, information security and data protection; use of third-party vendors and ongoing third-party business relationships; and failure to comply with anti-money laundering and anti-terrorism financing laws. For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this presentation and in our public filings, including under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed on February 13, 2020, and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, as filed on July 23, 2020. You should not consider any list of such factors to be an exhaustive statement of all the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law. 2
3Q’20 Highlights Financial Highlights Business Highlights • $313 million Net earnings, $0.52 diluted EPS • Renewed and extended a key relationship ‒ Other expense for the quarter included the impact from a restructuring charge of $89 million, or $67 million after-tax, which equates to an EPS reduction of $0.11 ‒ Increase in provision for credit losses for the quarter included • Launched a new program impact from CECL implementation of $66 million, or $50 million after-tax, which equates to an EPS reduction of $0.09 • Core Growth metrics(a) down in 3Q’20 primarily due to COVID-19: ‒ Loan receivables down 6%; down 5% on a Core basis ‒ Interest and fees on loans down 22%; down 12% on a Core basis • Added and extended partnerships ‒ Purchase volume down 6%; flat on a Core basis ‒ Average active accounts down 16%; down 8% on a Core basis • Net charge-offs 4.42% compared to 5.35% in the prior year • Provision for credit losses up 19% primarily driven by reserve increase • Launched new partnerships with health systems for projected impact of COVID-19 related losses and prior year reserve reduction related to Walmart, partially offset by lower net charge offs • Efficiency ratio 39.7% compared to 30.8% in the prior year • Deposits down $2.5 billion compared to prior year • Strong capital and liquidity • Renewed and extended CareCredit relationships ‒ 15.8% CET1 & $21.4 billion liquid assets ‒ Maintained $0.22 dividend, which equates to $129 million of capital returned to shareholders (a) Growth Metrics shown above on a Core basis are non-GAAP measures and excludes from both the prior year and the current year amounts related to the Walmart and Yamaha 3 portfolios, sold in October 2019 and January 2020, respectively. See non-GAAP reconciliation in the appendix.
Venmo Credit Card Apply in the Unique Plastic Use Mobile Phone to Venmo App Design Scan Plastic Native, easy experience Five designs, personalized Activate card Send payments or with customer’s QR code split purchases Smart, Dynamic Easy Spend Real-time Rewards Tracking Alerts Automatically added to + Virtual card for online Notification channel/ type Venmo account transactions controlled by cardholder 4
Accelerating Digital and Product Innovation Expanded Digital Products & Path To Purchase Credit Integration Capabilities 29% Mobile Channel Application Growth* * 3Q20 vs 3Q19 excluding Walmart ▪ Next Gen Native SDK for Partner Integration Financing offer Home Page integrated throughout ~60% ▪ Customer Alerting & customer experience Digital Controls Platform Applications* * Percentage of Total Applications ▪ Expansive API Platform ▪ SetPay Installment Product 47% Product Page Online ▪ Adaptive Digital Rewards Sales* * Percentage of Retail Card total Contactless Digital >65% Technology Shopping Cart Digital Payments* ▪ QR & Barcodes * 3Q20 % of Total Payments ▪ Digital Cards ~$8B ▪ Direct To Device Payments Made Check Out Through SyPI®* Check Out * Through 3Q20 5
COVID-19 Impact on Core Metrics(a) Purchase Volume Growth New Accounts (b) % in YoY Growth Rates 6.3 (17)% Jan Feb Mar Apr May Jun Jul Aug Sep 5.3 13% 10% 5% (0)% (3)% (2)% 3Q'19 3Q'20 (6)% (12)% YTD 17.7 14.1 (20)% (c) (27)% Purchase Volume per Account $517 $560 8% Platform Purchase Volume Growth % in YoY Growth Rates Jan Feb Mar Apr May Jun Jul Aug Sep 10% 13% 7% 0% 1% Retail Card 3Q'19 3Q'20 (2)% (3)% (9)% (d) (21)% Average Balance per Account 13% 10% 1% Payment $1,168 $1,214 4% (4)% (4)% Solutions (11)% (15)% (7)% (41)% 14% 18% 0% 5% CareCredit (4)% (14)% (22)% (29)% (60)% 3Q'19 3Q'20 (a) All metrics exclude from both the prior year and the current year amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively. (b) New Accounts represent accounts that were approved in the respective period, in millions. 6 (c) Purchase Volume per Account is calculated as the Purchase volume divided by Average active accounts, in $. (d) Average Balance per Account is calculated as the Average loan receivables divided by Average active accounts, in $.
COVID Forbearance Impact – Program-to-Date through Sept 30th Min Pay Due (MPD) Performance Statistics Credit Score (a) Enrollments 57% $ in millions, accounts in thousands 11% Program-to-Date Enrolled 41% 30% $3,813 At Sept 30, 2020 Never Enrolled 27% 35% 36% 2,023 16% 7% 17% $227 119 24% 6% Balance Accounts Credit Line Utilization Payment Rate Currently Enrolled Not Enrolled < 600 601-660 661-720 721+ MPD Enrollment by Payment Behavior of Post-Program Date and Delinquency Enrolled Accounts (b) Delinquency (c) Current at Enrollment 40 6.5X 35 DQ at Enrollment 30 8% 25 34% Thousands 20 15 3.3X 10 58% 5 Q3’20: $15 0 No Pay Q3’20: $1 Current & < 30 days past due Pay Less than Full Balance 30 + days past due Pay Balance in Full Entry Rate (a) Based on most recent FICO scores available for our customers in each period, weighted by balance, as a % of period-end receivables. If FICO score was not available, credit bureau-based scores were mapped to a FICO equivalent. If neither score was available, the account was excluded. 7 (b) Reflects September performance for percent of accounts by payment status ever enrolled in the program. (c) Entry rate performance based on August delinquency for accounts graduating from forbearance program in July 2020 as compared to accounts never enrolled.
Financial Results Summary earnings statement 3Q’20 Highlights B/(W) $ in millions, except per share statistics 3Q’20 3Q’19 $ % • $313 million Net earnings, $0.52 diluted EPS Total interest income $3,837 $4,981 $(1,144) (23)% • Net interest income down 21% driven by the impact of COVID-19 and the Walmart sale Total interest expense 380 592 212 36% − Interest and fees on loans down 22% driven by Net interest income (NII) 3,457 4,389 (932) (21)% the impact of COVID-19 and the Walmart sale Retailer share arrangements (RSA) (899) (1,016) 117 12% − Interest expense decrease driven primarily by lower benchmark rates Provision for credit losses 1,210 1,019 (191) (19)% • Retailer share arrangements down 12% Other income 131 85 46 54% • Provision for credit losses up 19% Other expense 1,067 1,064 (3) (0)% − Increase is primarily driven by reserve increase for Pre-Tax earnings 412 1,375 (963) (70)% projected impact of COVID-19 related losses and prior year reserve reduction related to Walmart Provision for income taxes 99 319 220 69% − Net charge-offs of 4.42% compared to 5.35% in Net earnings 313 1,056 (743) (70)% the prior year primarily driven by the Walmart sale Preferred dividends 10 0 (10) NM • Other expense flat Net earnings available to common $303 $1,056 $(753) (71)% stockholders Diluted earnings per share $0.52 $1.60 $(1.08) 8
Growth Metrics Purchase volume (6)% Loan receivables (6)% $ in billions $ in billions $83.2 $38.4 $36.0 $78.5 Core (a) $36.0 $36.0 0% Core (a) $82.3 $78.5 (5)% 3Q'19 3Q'20 3Q'19 3Q'20 Dual Card / Dual Card / (b) $13.7 $13.1 (5)% (b) $19.7 $18.3 (7)% Co-Brand Co-Brand Average active accounts (16)% Interest and fees on loans (22)% in millions $ in millions 76.7 $4,890 64.3 $3,821 Core (a) 69.7 64.3 (8)% Core (a) $4,359 $3,821 (12)% 3Q'19 3Q'20 3Q'19 3Q'20 a) Financial measures shown above on a Core basis are non-GAAP measures. See non-GAAP reconciliation in the appendix. 9 b) Dual Card / Co-Brand Purchase volume and Loan receivables shown above are consumer only and excludes from the prior year amounts related to the Walmart portfolio.
Platform Results(a) Retail Card Payment Solutions CareCredit Loan receivables, $ in billions Loan receivables, $ in billions Loan receivables, $ in billions (6)% (5)% (7)% $52.7 $20.5 $19.6 $10.0 $49.5 $9.4 Core(b) $52.6 $49.5 (6)% $19.7 $19.6 (1)% 3Q'19 3Q'20 V% 3Q'19 3Q'20 V% 3Q'19 3Q'20 V% Purchase volume $29.3 $27.4 (7)% $6.3 $5.9 (6)% $2.8 $2.7 (3)% Accounts 58.1 47.1 (19)% 12.4 11.5 (7)% 6.2 5.7 (8)% Interest and $3,570 $2,619 (27)% $721 $650 (10)% $599 $552 (8)% fees on loans • Receivable reduction primarily due • Core receivable reduction primarily • Receivable reduction primarily to COVID-19 partially offset by due to COVID-19 partially offset by due to COVID-19 growth in digital partners growth in Power • Interest and fees on loans down • Interest and fees on loans down • Interest and fees on loans down 10% 8% driven primarily by lower 27% driven primarily by the Walmart driven primarily by lower late fees merchant discount as a result of sale and the decline in loan the decline in purchase volume receivables (a) Accounts represent average active accounts in millions, which are credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in 10 the current month. Purchase volume $ in billions and Interest and fees on loans $ in millions. (b) Loan receivables shown above on a Core basis is a non-GAAP measure. See non-GAAP reconciliation in the appendix.
Net Interest Income 3Q’20 Highlights Net interest income • Net interest income decreased 21% compared to prior year $ in millions, % of average interest-earning assets driven by the impact of COVID-19 and the Walmart sale (21)% − Interest and fees on loans decreased 22% compared to prior year primarily driven by the impact of COVID-19 and the Walmart sale $4,389 • Net interest margin (NIM) down 249bps. − Mix of Interest-earnings assets: (1.24)% − Loan receivables mix as a percent of total Earning $3,457 Assets decreased from 84.7% to 78.3% − Loan receivables yield: (1.64)% − Loan receivables yield of 19.49%, down 193bps. versus prior year including approximately 75bps. of 16.29% impact from Prime rate movement 13.80% − Liquidity portfolio yield: (0.29)% − Interest-bearing liabilities cost: 0.68% − Total cost decreased 81bps. to 1.90% due primarily to lower benchmark rates and lower deposit pricing NIM Walk 3Q’19 NIM 16.29% 3Q'19 3Q'20 Mix of Interest-earning assets (1.24)% Loan receivables yield (1.64)% Liquidity portfolio yield (0.29)% Interest-bearing liabilities cost 0.68% 3Q’20 NIM 13.80% 11
Asset Quality Metrics 30+ days past due Net charge-offs $ in millions, % of period-end loan receivables $ in millions, % of average loan receivables including held for sale $4,430 $1,344 $1,331 $4,021 $3,957 $1,248 $1,221 $3,723 $3,874 $3,625 $1,109 $1,125 $3,500 $1,087 $1,046 $866 4.92% $2,453 4.59% 4.76% 4.43% 4.47% 4.44% 4.24% $2,100 5.54% 6.06% 6.01% 3.13% (a) 4.97% 5.35% 5.15% 5.36% 5.35% (a) 2.67% 4.42% 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 90+ days past due Allowance for credit losses(b) $ in millions, % of period-end loan receivables $ in millions, % of period-end loan receivables $9,802 $10,146 $2,135 $2,019 $9,175 $1,833 $1,877 $1,768 $1,723 $1,735 12.52% 12.92% $6,427 $1,384 $6,223 11.13% $5,942 $5,809 $5,607 $5,602 2.51% $6,197 $6,475 2.29% $973 $6,053 2.09% 2.16% 2.07% 2.15% 2.10% 7.39% 7.11% 6.90% 7.10% 1.77% 6.74% 6.42% (a) 1.24% 7.91% 8.25% 7.34% 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 (a) Excluding the Walmart Portfolio, 3Q’20 30+ rate was down ~175bps versus 3Q’19; 3Q’20 net charge-off rate was down ~45bps versus 3Q’19; 3Q’20 90+ rate was down ~80bps versus 3Q’19. (b) Allowance for credit losses reflects adoption of CECL on January 1, 2020, which included a $3.0 billion increase in reserves upon adoption. For comparability purposes, allowance 12 for loan losses in FY20 is also presented. This measure reflects the prior accounting guidance and is a non-GAAP measure for FY20. See non-GAAP reconciliation in appendix.
Other Expense Other expense 0% $ in millions 3Q’20 Highlights $1,064 $1,067 • Other expense flat – The restructuring charge and expenses related to the COVID-19 response were offset by cost reductions from Walmart, lower purchase volume and accounts, and reductions in certain discretionary spend • Efficiency ratio 39.7% vs. 30.8% prior year – Other expense was negatively impacted by the restructuring charge and expenditures related to our response to COVID-19 3Q'19 3Q'20 V$ V% – Excluding these impacts, efficiency ratio would Employee costs $359 $382 $23 6% have been 3.7pts lower in 3Q’20, or 36.0% for the quarter Professional fees 205 187 (18) (9)% – Increase in ratio driven by decrease in Marketing/BD 139 107 (32) (23)% revenue, which is a result of both lower Information processing 127 125 (2) (2)% receivables and lower interest and fee yield Other 234 266 32 14% Other expense $1,064 $1,067 $3 0% (a) Efficiency 30.8% 39.7% 8.9 pts. 13 (a) “Other expense” divided by sum of “NII” plus “Other income” less “Retailer share arrangements (RSA)”.
Funding, Capital and Liquidity Funding sources Capital ratios (b) $ in billions CET1 Capital Ratio $86.3 $79.3 V$ 14.5% 15.8% Unsecured $9.4 $8.0 $(1.4) $10.9 Securitization $7.8 $(3.1) 3Q'19 3Q'20 Transition Deposits $66.0 $63.5 $(2.5) Tier 1 Capital Ratio 14.5% 16.7% 3Q'19 3Q'20 Variance 3Q'19 3Q'20 Deposits 76% 80% +4 pts. Transition Total Capital Ratio Securitization 13% 10% (3) pts. 15.8% 18.1% Unsecured 11% 10% (1) pt. (a) Liquidity $26.8 $ in billions $21.7 3Q'19 3Q'20 Transition Tier 1 Capital + Credit Loss Reserve Ratio(c) 27.3% 3Q'19 3Q'20 20.7% Liquid assets $15.2 $21.4 Undrawn credit facilities 6.5 5.4 Total liquidity $21.7 $26.8 3Q'19 3Q'20 % of Total assets 20.5% 28.0% Fully Phased-in (a) Does not include unencumbered assets in the Bank that could be pledged. (b) Capital ratios reflect election to delay for two years an estimate of CECL’s effect on regulatory capital in accordance with the interim final rule issued by U.S. banking agencies in 1Q’20. (c) The “Tier 1 Capital + Reserves Ratio” is the sum of our “Tier 1 Capital” and “Allowance for Credit Losses,” divided by our “Total Risk-Weighted Assets”. For 3Q’20, both Tier 1 Capital and 14 Risk-Weighted Assets are adjusted to reflect the fully phased-in impact of CECL. These adjusted metrics are non-GAAP measures, see non-GAAP reconciliation in appendix.
3Q’20 Wrap Up • Net earnings of $313 million … $0.52 diluted earnings per share • Other expense for the quarter included the impact from a restructuring charge of $89 million, or $67 million after-tax, which equates to an EPS reduction of $0.11 • Increase in provision for credit losses for the quarter included impact from CECL implementation of $66 million, or $50 million after-tax, which equates to an EPS reduction of $0.09 • Core Growth metrics(a) down due to impact of COVID-19 … Purchase volume flat, Loan receivables (5)%, Average Active Accounts (8)%, Interest and fees on loans (12)% • Renewed and extended a key relationship with Sam’s Club • Launched a new program with Venmo • Added and extended partnerships with Four Wheel Parts, Kane’s Furniture, Levin Furniture, SVP Sewing Brands and System Pavers • Launched new partnerships with health systems: Lehigh, St Luke’s and Cox Health • Renewed and extended CareCredit relationships with Blue River Petcare and NVA • Strong deposit platform … deposits at $63.5 billion now contributing 80% of funding • Maintained $0.22 dividend, which equates to $129 million of capital returned to shareholders • Strong balance sheet, 15.8% CET1 and $21.4 billion of liquid assets (a) Growth Metrics shown above on a Core basis are non-GAAP measures and excludes from both the prior year and the current year amounts related to the Walmart and Yamaha portfolios, sold in October 2019 and January 2020, respectively. See non-GAAP reconciliation in the appendix. 15
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Appendix 17
Non-GAAP Reconciliation(a) The following table sets forth the components of our Growth Metrics and impact from CECL for the periods indicated below. At Sept 30, Total Retail Card Payment Solutions 2019 2020 2019 2020 2019 2020 Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $83.2 $78.5 $52.7 $49.6 $20.5 $19.6 Less: Walmart and Yamaha Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . (0.9) - (0.1) - (0.8) - Core Loan receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $82.3 $78.5 $52.6 $49.6 $19.7 $19.6 Allowance for credit losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A $10,146 Less: 3Q’20 impact from CECL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (3,671) Allowance for loan losses . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,607 $6,475 Allowance for credit losses as a % of period-end loan receivables . . . . . . . . N/A 12.92% Less: 3Q’20 impact from CECL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (4.67)% Allowance for loan losses as a % of period-end loan receivables . . . . 6.74% 8.25% For the quarter ended Sept 30, Total 2019 2020 Purchase volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $38.4 $36.0 Less: Walmart and Yamaha Purchase volume . . . . . . . . . . . . . . . . . . . . (2.4) - Core Purchase volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $36.0 $36.0 Average active accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.7 64.3 Less: Walmart and Yamaha Average active accounts . . . . . . . . . . . . . . (7.0) - Core Average active accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.7 64.3 Interest and fees on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,890 $3,821 Less: Walmart and Yamaha Interest and fees on loans . . . . . . . . . . . . . (531) - Core Interest and fees on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,359 $3,821 (a) Accounts represent average active accounts in millions, which are credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in 18 the current month. Loan receivables and Purchase volume $ in billions. Interest and fees on loans, Allowance for credit losses, and Allowance for loan losses $ in millions.
Non-GAAP Reconciliation (continued)(a) The following table sets forth the components of our Tier 1 Capital + Reserves ratio for the periods indicated below. At Sept 30, Total 2019 2020 Tier 1 capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,155 $12,891 Less: CECL transition adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (2,656) Tier 1 capital (CECL fully phased-in) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,155 $10,235 Add: Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,607 10,146 Tier 1 capital (CECL fully phased-in) plus Reserves for credit losses. $18,762 $20,381 Risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $90,772 $76,990 Less: CECL transition adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (2,447) Risk-weighted assets (CECL fully phased-in) . . . . . . . . . . . . . . . . . . . . . . $90,772 $74,543 19 (a) Estimated at September 30, 2020, $ in millions.