Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Earnings (Unaudited)

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	Three months ended March 31,
($ in millions, except per share data)	2024		2023
Interest income:
Interest and fees on loans (Note 5)	$	5,293	$	4,616
Interest on cash and debt securities	275		170
Total interest income	5,568		4,786
Interest expense:
Interest on deposits	954		557
Interest on borrowings of consolidated securitization entities	105		77
Interest on senior and subordinated unsecured notes	104		101

Total interest expense	1,163		735
Net interest income	4,405		4,051
Retailer share arrangements	(764)		(917)

Provision for credit losses (Note 5)	1,884		1,290
Net interest income, after retailer share arrangements and provision for credit losses	1,757		1,844
Other income:
Interchange revenue	241		232
Protection product revenue	141		115
Loyalty programs	(319)		(298)
Other (Note 3)	1,094		16
Total other income	1,157		65
Other expense:
Employee costs	496		451
Professional fees	220		186
Marketing and business development	125		131
Information processing	186		166
Other	179		185
Total other expense	1,206		1,119
Earnings before provision for income taxes	1,708		790
Provision for income taxes (Note 14)	415		189
Net earnings	$	1,293	$	601
Net earnings available to common stockholders	$	1,282	$	590

Earnings per share (Note 12)
Basic	$	3.17	$	1.36
Diluted	$	3.14	$	1.35

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

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	Three months ended March 31,
($ in millions)	2024		2023

Net earnings	$	1,293	$	601

Other comprehensive income (loss)
Debt securities	(1)		24
Currency translation adjustments	—		(1)
Employee benefit plans	—		—
Other comprehensive income (loss)	(1)		23

Comprehensive income	$	1,292	$	624

Amounts presented net of taxes.

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Financial Position (Unaudited)

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($ in millions)	At March 31, 2024		At December 31, 2023
Assets
Cash and equivalents	$	20,021	$	14,259
Debt securities (Note 4)	3,005		3,799
Loan receivables: (Notes 5 and 6)
Unsecuritized loans held for investment	81,642		81,554
Restricted loans of consolidated securitization entities	20,091		21,434
Total loan receivables	101,733		102,988
Less: Allowance for credit losses	(10,905)		(10,571)
Loan receivables, net	90,828		92,417

Goodwill (Note 7)	1,073		1,018
Intangible assets, net (Note 7)	800		815
Other assets	5,446		4,915
Assets held for sale (Note 3)	—		256
Total assets	$	121,173	$	117,479

Liabilities and Equity
Deposits: (Note 8)
Interest-bearing deposit accounts	$	83,160	$	80,789
Non-interest-bearing deposit accounts	394		364
Total deposits	83,554		81,153
Borrowings: (Notes 6 and 9)
Borrowings of consolidated securitization entities	8,016		7,267

Senior and subordinated unsecured notes	8,117		8,715
Total borrowings	16,133		15,982
Accrued expenses and other liabilities	6,204		6,334
Liabilities held for sale (Note 3)	—		107
Total liabilities	$	105,891	$	103,576

Equity:
Preferred stock, par share value $0.001 per share; 1,250,000 and 750,000 shares authorized at March 31, 2024 and December 31, 2023, respectively; 1,250,000 and 750,000 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively, and aggregate liquidation preference of $1,250 at March 31, 2024 and $750 at December 31, 2023	$	1,222	$	734
Common Stock, par share value $0.001 per share; 4,000,000,000 shares authorized; 833,984,684 shares issued at both March 31, 2024 and December 31, 2023; 401,410,596 and 406,875,775 shares outstanding at March 31, 2024 and December 31, 2023, respectively	1		1
Additional paid-in capital	9,768		9,775
Retained earnings	19,790		18,662
Accumulated other comprehensive income (loss):
Debt securities	(34)		(33)
Currency translation adjustments	(38)		(38)
Employee benefit plans	3		3
Treasury stock, at cost; 432,574,088 and 427,108,909 shares at March 31, 2024 and December 31, 2023, respectively	(15,430)		(15,201)

Total equity	15,282		13,903
Total liabilities and equity	$	121,173	$	117,479

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Changes in Equity (Unaudited)

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	Preferred Stock			Common Stock
($ in millions, shares in thousands)	Shares Issued	Amount		Shares Issued	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Equity

Balance at January 1, 2023	750	$	734	833,985	$	1	$	9,718	$	16,716	$	(125)	$	(14,171)	$	12,873

Cumulative effect of change in accounting principle	—	—		—	—		—		222		—		—		222
Adjusted balance, beginning of period	750	$	734	833,985	$	1	$	9,718	$	16,938	$	(125)	$	(14,171)	$	13,095
Net earnings	—	—		—	—		—		601		—		—		601
Other comprehensive income	—	—		—	—		—		—		23		—		23

Purchases of treasury stock	—	—		—	—		—		—		—		(404)		(404)
Stock-based compensation	—	—		—	—		(13)		(59)		—		61		(11)
Dividends - preferred stock ($14.06 per share)	—	—		—	—		—		(11)		—		—		(11)
Dividends - common stock ($0.23 per share)	—	—		—	—		—		(100)		—		—		(100)

Balance at March 31, 2023	750	$	734	833,985	$	1	$	9,705	$	17,369	$	(102)	$	(14,514)	$	13,193


	Preferred Stock			Common Stock
($ in millions, shares in thousands)	Shares Issued	Amount		Shares Issued	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Equity
Balance at January 1, 2024	750	$	734	833,985	$	1	$	9,775	$	18,662	$	(68)	$	(15,201)	$	13,903


Net earnings				—	—		—		1,293		—		—		1,293
Other comprehensive income	—	—		—	—		—		—		(1)		—		(1)
Issuance of preferred stock	500	488		—	—		—		—		—		—		488
Purchases of treasury stock	—	—		—	—		—		—		—		(300)		(300)
Stock-based compensation	—	—		—	—		(7)		(52)		—		71		12
Dividends - preferred stock ($14.06 per share)	—	—		—	—		—		(11)		—		—		(11)
Dividends - common stock ($0.25 per share)	—	—		—	—		—		(102)		—		—		(102)

Balance at March 31, 2024	1,250	$	1,222	833,985	$	1	$	9,768	$	19,790	$	(69)	$	(15,430)	$	15,282

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

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	Three months ended March 31,
($ in millions)	2024		2023
Cash flows - operating activities
Net earnings	$	1,293	$	601
Adjustments to reconcile net earnings to cash provided from operating activities
Provision for credit losses	1,884		1,290
Deferred income taxes	27		(88)
Depreciation and amortization	119		111
(Increase) decrease in interest and fees receivable	(2)		(34)
(Increase) decrease in other assets	45		19
Increase (decrease) in accrued expenses and other liabilities	(204)		(177)
Gain on sale of business	(1,069)		—
All other operating activities	155		164
Cash provided from (used for) operating activities	2,248		1,886

Cash flows - investing activities
Maturity and sales of debt securities	982		1,458
Purchases of debt securities	(163)		(391)
Acquisitions, net of cash acquired	(1,935)		—
Proceeds from sale of business, net of cash and restricted cash sold	491		—

Net (increase) decrease in loan receivables, including held for sale	1,504		(234)
All other investing activities	(81)		(141)
Cash provided from (used for) investing activities	798		692

Cash flows - financing activities
Borrowings of consolidated securitization entities
Proceeds from issuance of securitized debt	747		250
Maturities and repayment of securitized debt	—		(250)
Senior and subordinated unsecured notes
Proceeds from issuance of senior and subordinated unsecured notes	—		740
Maturities and repayment of senior and subordinated unsecured notes	(600)		—


Dividends paid on preferred stock	(11)		(11)
Proceeds from issuance of preferred stock	488		—
Net increase (decrease) in deposits	2,396		2,720
Purchases of treasury stock	(300)		(404)
Dividends paid on common stock	(102)		(100)
All other financing activities	(14)		(33)
Cash provided from (used for) financing activities	2,604		2,912

Increase (decrease) in cash and equivalents, including restricted amounts	5,650		5,490
Cash and equivalents, including restricted amounts, at beginning of period	14,421		10,430
Cash and equivalents at end of period:
Cash and equivalents	20,021		15,303
Restricted cash and equivalents included in other assets	50		617
Total cash and equivalents, including restricted amounts, at end of period	$	20,071	$	15,920

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

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NOTE 1. BUSINESS DESCRIPTION

Synchrony Financial (the “Company”) provides a range of credit products through financing programs it has established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers. We primarily offer private label, Dual Card, co-brand and general purpose credit cards, as well as short- and long-term installment loans, and savings products insured by the Federal Deposit Insurance Corporation (“FDIC”) through Synchrony Bank (the “Bank”).

References to the “Company”, “we”, “us” and “our” are to Synchrony Financial and its consolidated subsidiaries unless the context otherwise requires.

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”).

Preparing financial statements in conformity with U.S. GAAP requires us to make estimates based on assumptions about current, and for some estimates, future, economic and market conditions (for example, unemployment, housing, interest rates and market liquidity) which affect reported amounts and related disclosures in our condensed consolidated financial statements. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially affect our results of operations and financial position. Among other effects, such changes could result in incremental losses on loan receivables, future impairments of debt securities, goodwill and intangible assets, increases in reserves for contingencies, establishment of valuation allowances on deferred tax assets and increases in our tax liabilities.

We primarily conduct our business within the United States and substantially all of our revenues are from U.S. customers. The operating activities conducted by our non-U.S. affiliates use the local currency as their functional currency. The effects of translating the financial statements of these non-U.S. affiliates to U.S. dollars are included in equity. Asset and liability accounts are translated at period-end exchange rates, while revenues and expenses are translated at average rates for the respective periods.

Consolidated Basis of Presentation

The Company’s financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all of our subsidiaries – i.e., entities in which we have a controlling financial interest, most often because we hold a majority voting interest. To determine if we hold a controlling financial interest in an entity, we first evaluate if we are required to apply the variable interest entity (“VIE”) model to the entity, otherwise the entity is evaluated under the voting interest model. We consolidate certain securitization entities under the VIE model. See Note 6. Variable Interest Entities.

Interim Period Presentation

The condensed consolidated financial statements and notes thereto are unaudited. These statements include all adjustments (consisting of normal recurring accruals) that we considered necessary to present a fair statement of our results of operations, financial position and cash flows. The results reported in these condensed consolidated financial statements should not be considered as necessarily indicative of results that may be expected for the entire year. These condensed consolidated financial statements should be read in conjunction with our 2023 annual consolidated financial statements and the related notes in our Annual Report on Form 10-K for the year ended December 31, 2023 (our "2023 Form 10-K").

New Accounting Standards

Recently Issued But Not Yet Adopted Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements and requires enhanced disclosures about significant segment expenses. The Company will adopt this guidance on a retrospective basis on its effective date, which for us is beginning within our December 31, 2024 Form 10-K.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disclosure of specific categories in the rate reconciliation, as well as additional qualitative information about the reconciliation, and additional disaggregated information about income taxes paid. The Company will adopt this guidance on its effective date, which for us is beginning within our December 31, 2025 Form 10-K, and is currently determining the method of adoption.

Equity Method Investments

We use the equity method of accounting for investments where we have significant influence, but not control, over the operating and financial policies of the investee. Our assessment of significant influence includes factors such as our ownership interest, legal form, and representation on the board of directors. The Company generally records the initial investment at cost or fair value, as appropriate. Subsequently, we adjust each investment for our proportionate share of net income or loss in the investee. We amortize, where appropriate, differences between the Company’s cost basis and underlying equity in net assets, which are reported in Other Income. The Company evaluates equity method investments for other-than-temporary impairment when events or changes in circumstance indicate that the carrying amount of the investment might not be recoverable.

See Note 2. Basis of Presentation and Summary of Significant Accounting Policies to our 2023 annual consolidated financial statements in our 2023 Form 10-K, for additional information on our other significant accounting policies.

NOTE 3. ACQUISITIONS AND DISPOSITIONS

Ally Lending

On March 1, 2024, we acquired Ally Financial Inc.'s point of sale financing business, ("Ally Lending") for cash consideration of $2.0 billion. This acquisition deepens our presence and reach in the home improvement and health and wellness sectors, including high-growth specialty areas such as roofing, HVAC, and windows, as well as in cosmetic, audiology, and dentistry.

The Ally Lending acquisition has been accounted for as a business combination using the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair value as of the acquisition date.



($ in millions)	Fair Value Estimate
Assets acquired
Cash	$	34
Loan receivables	1,875
Intangible assets, net	23
Other assets	2
Total	$	1,934

Liabilities assumed
Other liabilities	(16)
Total net identifiable assets acquired	$	1,918
Less: Total cash consideration paid	$	1,969
Goodwill	$	51

The above represents the provisional estimated fair values of the respective assets acquired and liabilities assumed as of the date of acquisition. We have not yet completed the valuation of the assets acquired and liabilities assumed. Any subsequent measurement period adjustments to our provisional estimate, including changes to the loan discount discussed below, may be recognized during the measurement period, which shall not exceed one year after the acquisition date.

The acquisition primarily included loan receivables with an unpaid principal balance of $2.2 billion. These loan receivables are reported within Consumer installment loans in Note 5. Loan Receivables and Allowance for Credit Losse. To determine the provisional fair value of loans at acquisition, we estimate expected cash flows and discount those cash flows using an observable market rate of interest, when available, adjusted for factors that a market participant would consider in determining fair value. In determining fair value, expected cash flows are adjusted to include prepayment, default rate, and loss severity estimates. The difference between the fair value and the amount contractually due is recorded as a loan discount or premium at acquisition. A provisional loan discount of $271 million was recorded at acquisition date, which is to be amortized into interest income over the estimated remaining life of the loans, as described within Note 2. Basis of Presentation and Summary of Significant Accounting Policies within our 2023 Form 10-K.

Loans acquired without a more-than-insignificant credit deterioration since origination are measured under the Allowance for Credit Losses model, as described within Note 2. Basis of Presentation and Summary of Significant Accounting Policies within our 2023 Form 10-K. The Company’s best estimate at the date of acquisition of contractual cash flows not expected to be collected was $189 million, which is included within our allowance for credit losses and recognized through provision for credit losses in our Condensed Consolidated Statements of Earnings.

Included in the acquisition was $64 million of loans that have experienced more-than-insignificant deterioration in credit quality since origination (referred to as “purchased credit deteriorated” or “PCD” assets) that were not immediately written off at the acquisition date and are subject to specific guidance upon acquisition. An allowance for PCD assets of $39 million was recorded at the date of acquisition. Subsequent to initial recognition, the accounting for the PCD assets will generally follow the Allowance for Credit Losses model described within Note 2. Basis of Presentation and Summary of Significant Accounting Policies of our 2023 Form 10-K.

The results of operations related to the acquired business are included in our Condensed Consolidated Statements of Earnings subsequent to the acquisition date and were not material for the three months ended March 31, 2024.

Pets Best

In March 2024, we sold our wholly-owned subsidiary, Pets Best Insurance Services, LLC (“Pets Best”) to Poodle Holdings, Inc. (“Buyer”) for consideration comprising a combination of cash and an equity interest of less than 10% in Independence Pet Holdings, Inc., ("IPH") an affiliate of Buyer. In connection with the sale, IPH also appointed two Synchrony executives to its board of directors. The sale of Pets Best resulted in the recognition of a gain on sale of $1.1 billion or $802 million, net of tax. The pre-tax gain amount has been recognized within the Other component of Other Income in our Condensed Consolidated Statements of Earnings.

The Company’s initial equity investment in IPH was recorded in Other Assets on our Condensed Consolidated Statements of Financial Position and is accounted for under the equity method of accounting. The investment was recorded at its estimated fair value at the date acquired of $605 million, which also represented the carrying value of the investment at March 31, 2024. The estimated fair value at acquisition date was determined using a weighted average methodology of three approaches: a market approach which includes using a multiple of projected revenues, precedent transactions and an intrinsic value analysis. The market-multiple approach was established based on a selected group of publicly traded companies. The use of selected precedent transaction multiples was calibrated to the valuation outcome using the market approach. Intrinsic value analysis determines implied multiples primarily based upon recent market studies and forecasted performance.

NOTE 4. DEBT SECURITIES

All of our debt securities are classified as available-for-sale and are held to meet our liquidity objectives or to comply with the Community Reinvestment Act (“CRA”). Our debt securities consist of the following:


	March 31, 2024								December 31, 2023
			Gross		Gross						Gross		Gross
	Amortized		unrealized		unrealized		Estimated		Amortized		unrealized		unrealized		Estimated
($ in millions)	cost		gains		losses		fair value		cost		gains		losses		fair value
U.S. government and federal agency	$	1,463	$	—	$	—	$	1,463	$	2,264	$	1	$	(1)	$	2,264
State and municipal	9		—		—		9		10		—		—		10
Residential mortgage-backed(a)	375		—		(41)		334		392		—		(38)		354
Asset-backed(b)	1,196		2		(7)		1,191		1,167		4		(8)		1,163
Other	8				—		8		8		—		—		8

Total(c)	$	3,051	$	2	$	(48)	$	3,005	$	3,841	$	5	$	(47)	$	3,799

(a) All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages.

(b) Our asset-backed securities are collateralized by credit card and auto loans.

(c) At March 31, 2024 and December 31, 2023, the estimated fair value of debt securities pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve discount window advances was $344 million and $360 million, respectively.

The following table presents the estimated fair values and gross unrealized losses of our available-for-sale debt securities:


	In loss position for
	Less than 12 months				12 months or more
			Gross				Gross
	Estimated		unrealized		Estimated		unrealized
($ in millions)	fair value		losses		fair value		losses
At March 31, 2024
U.S. government and federal agency	$	1,117	$	—	$	—	$	—
State and municipal	—		—		6		—
Residential mortgage-backed	—		—		328		(41)
Asset-backed	304		(1)		277		(6)
Other	—		—		8		—
Total	$	1,421	$	(1)	$	619	$	(47)

At December 31, 2023
U.S. government and federal agency	$	495	$	—	$	399	$	(1)
State and municipal	—		—		9		—
Residential mortgage-backed	1		—		346		(38)
Asset-backed	171		—		244		(8)
Other	—		—		8		—
Total	$	667	$	—	$	1,006	$	(47)

We regularly review debt securities for impairment resulting from credit loss using both qualitative and quantitative criteria, as necessary based on the composition of the portfolio at period end. Based on our assessment, no material impairments for credit losses were recognized during the period.

We presently do not intend to sell our debt securities that are in an unrealized loss position and believe that it is not more likely than not that we will be required to sell these securities before recovery of our amortized cost.

Contractual Maturities of Investments in Available-for-Sale Debt Securities


	Amortized		Estimated		Weighted
At March 31, 2024 ($ in millions)	cost		fair value		Average yield (a)
Due
Within one year	$	1,923	$	1,918	4.9	%
After one year through five years	$	766	$	766	5.2	%
After five years through ten years	$	169	$	157	1.8	%
After ten years	$	193	$	164	2.0	%

(a)Weighted average yield is calculated based on the amortized cost of each security. In calculating yield, no adjustment has been made with respect to any tax-exempt obligations.

All securities are presented above based upon contractual maturity date, except our asset-backed securities which are allocated based upon expected final payment date. We expect actual maturities to differ from contractual maturities because borrowers have the right to prepay certain obligations.

There were no material realized gains or losses recognized for the three months ended March 31, 2024 and 2023.

Although we generally do not have the intent to sell any specific securities held at March 31, 2024, in the ordinary course of managing our debt securities portfolio, we may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield, liquidity requirements and funding obligations.

NOTE 5. LOAN RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES


($ in millions)	March 31, 2024		December 31, 2023
Credit cards	$	93,736	$	97,043
Consumer installment loans	5,957		3,977
Commercial credit products	1,912		1,839
Other	128		129
Total loan receivables, before allowance for credit losses(a)(b)(c)	$	101,733	$	102,988

(a)Total loan receivables include $20.1 billion and $21.4 billion of restricted loans of consolidated securitization entities at March 31, 2024 and December 31, 2023, respectively. See Note 6. Variable Interest Entities for further information on these restricted loans.

(b)At March 31, 2024 and December 31, 2023, loan receivables included deferred costs and purchase discounts, net of deferred income, of $(120) million and $213 million, respectively.

(c)At March 31, 2024 and December 31, 2023, $23.2 billion and $22.4 billion, respectively, of loan receivables were pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve discount window advances.

Allowance for Credit Losses**(a)(b)**


($ in millions)	Balance at January 1, 2024		Provision charged to operations(c)		Gross charge-offs		Recoveries		Other(d)		Balance at March 31, 2024
Credit cards	$	10,156	$	1,508	$	(1,761)	$	291	$	—	$	10,194
Consumer installment loans	279		345		(90)		8		39		581
Commercial credit products	131		29		(35)		2		—		127
Other	5		(2)		—		—		—		3
Total	$	10,571	$	1,880	$	(1,886)	$	301	$	39	$	10,905


($ in millions)	Balance at January 1, 2023		Impact of ASU 2022-02 Adoption		Post-Adoption Balance at January 1, 2023		Provision charged to operations		Gross charge-offs		Recoveries		Balance at March 31, 2023
Credit cards	$	9,225	$	(294)	$	8,931	$	1,159	$	(1,162)	$	224	$	9,152
Consumer installment loans	208		1		209		85		(44)		5		255
Commercial credit products	87		(1)		85		48		(31)		2		104
Other	7		—		8		(2)		—		—		6
Total	$	9,527	$	(294)	$	9,233	$	1,290	$	(1,237)	$	231	$	9,517

(a)The allowance for credit losses at March 31, 2024 and 2023 reflects our estimate of expected credit losses for the life of the loan receivables on our Condensed Consolidated Statements of Financial Position at March 31, 2024 and 2023 which include the consideration of current and expected macroeconomic conditions that existed at those dates.

(b)Excluded from the table above are allowance for credit losses for loan receivables acquired and immediately written off within the period presented.

(c)Provision for credit losses in the Condensed Consolidated Statements of Earnings for the three months ended March 31, 2024 includes $4 million associated with off-balance sheet credit exposures recorded in Accrued expenses and other liabilities in the Condensed Consolidated Statements of Financial Position.

(d)Primarily represents allowance for credit losses for PCD assets.

The reasonable and supportable forecast period used in our estimate of credit losses at March 31, 2024 was 12 months, consistent with the forecast period utilized since the adoption of CECL. Beyond the reasonable and supportable forecast period, we revert to historical loss information at the loan receivables segment level over a 6-month period, gradually increasing the weight of historical losses by an equal amount each month during the reversion period, and utilize historical loss information thereafter for the remaining life of the portfolio. The reversion period and methodology remain unchanged since the adoption of CECL.

Losses on loan receivables, including those which are modified for borrowers experiencing financial difficulty, are estimated and recognized upon origination of the loan, based on expected credit losses for the life of the loan balance at March 31, 2024. Expected credit loss estimates are developed using both quantitative models and qualitative adjustments, and incorporates a macroeconomic forecast, as described within Note 2. Basis of Presentation and Summary of Significant Accounting Policies to our 2023 annual consolidated financial statements within our 2023 Form 10-K. The current and forecasted economic conditions at the balance sheet date influenced our current estimate of expected credit losses, which reflects our expectations of the macroeconomic environment. We continued to experience a decrease in payment rates and at March 31, 2024, total delinquent balances as a percentage of total loan receivables remained consistent with the prior quarter. We also experienced an increase in net charge-offs during the three months ended March 31, 2024 and expect net charge-offs to continue to increase in the first half of 2024. These conditions are reflected in our current estimate of expected credit losses, which remain generally consistent with the prior quarter. Our allowance for credit losses increased to $10.9 billion during the three months ended March 31, 2024, primarily reflecting the impact of the Ally Lending acquisition. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies to our 2023 annual consolidated financial statements within our 2023 Form 10-K for additional information on our significant accounting policies related to our allowance for credit losses.

Delinquent and Non-accrual Loans

The following table provides information on our delinquent and non-accrual loans:


At March 31, 2024 ($ in millions)	30-89 days delinquent			90 or more days delinquent			Total past due			90 or more days delinquent and accruing			Total non-accruing
Credit cards	$	2,189		$	2,377		$	4,566		$	2,377		$	—
Consumer installment loans	121			33			154			—			33
Commercial credit products	51			49			100			49			—

Total delinquent loans	$	2,361		$	2,459		$	4,820		$	2,426		$	33
Percentage of total loan receivables	2.3		%	2.4		%	4.7		%	2.4		%	—		%


At December 31, 2023 ($ in millions)	30-89 days delinquent			90 or more days delinquent			Total past due			90 or more days delinquent and accruing			Total non-accruing
Credit cards	$	2,375		$	2,290		$	4,665		$	2,290		$	—
Consumer installment loans	96			23			119			—			23
Commercial credit products	61			40			101			40			—

Total delinquent loans	$	2,532		$	2,353		$	4,885		$	2,330		$	23
Percentage of total loan receivables	2.5		%	2.3		%	4.7		%	2.3		%	—		%

Credit Quality Indicators

Our loan receivables portfolio includes both secured and unsecured loans. Secured loan receivables are largely comprised of consumer installment loans secured by equipment. Unsecured loan receivables are largely comprised of our open-ended consumer and commercial revolving credit card loans. As part of our credit risk management activities, on an ongoing basis, we assess overall credit quality by reviewing information related to the performance of a customer’s account with us, including delinquency information, as well as information from credit bureaus relating to the customer’s broader credit performance. We utilize VantageScore credit scores to assist in our assessment of credit quality. VantageScore credit scores are obtained at origination of the account and are refreshed, at a minimum quarterly, but could be as often as weekly, to assist in predicting customer behavior. We categorize these credit scores into the following three credit score categories: (i) 651 or higher, which are considered the strongest credits; (ii) 591 to 650, considered moderate credit risk; and (iii) 590 or less, which are considered weaker credits. There are certain customer accounts, including for our commercial credit products, for which a VantageScore score is not available where we use alternative sources to assess their credit quality and predict behavior. The following table provides the most recent VantageScore scores, or equivalent, available for our revolving credit card and commercial credit product customers at March 31, 2024, December 31, 2023 and March 31, 2023, respectively, as a percentage of each class of loan receivable. The table below excludes 0.3%, 0.3% and 0.3% of our total loan receivables balance for our credit cards and commercial credit products at each of March 31, 2024, December 31, 2023 and March 31, 2023, respectively, which represents those customer accounts for which a VantageScore score, or equivalent, is not available.


	March 31, 2024						December 31, 2023						March 31, 2023
	651 or		591 to		590 or		651 or		591 to		590 or		651 or		591 to		590 or
	higher		650		less		higher		650		less		higher		650		less
Credit cards	71	%	20	%	9	%	72	%	19	%	9	%	73	%	19	%	8	%

Commercial credit products	86	%	7	%	7	%	83	%	10	%	7	%	86	%	7	%	7	%

Consumer Installment Loans

Delinquency trends are the primary credit quality indicator for our consumer installment loans, which we use to monitor credit quality and risk within the portfolio. The tables below include information on our consumer installment loans by origination year. The amounts for the current year period include information related to the loans acquired through the Ally Lending acquisition. See Note 3. Acquisitions and Dispositions for additional information.

Consumer Installment Loans by Origination Year


	By origination year
At or for the three months ended March 31, 2024 ($ in millions)	2024		2023		2022		2021		2020		Prior		Total
Amortized cost basis	$	809	$	2,665	$	1,470	$	649	$	287	$	77	$	5,957
30-89 days delinquent	4		53		38		16		7		3		121
90 or more days delinquent	—		15		12		4		2		—		33
Current period gross charge-offs(a)	—		47		25		12		5		1		90


	By origination year
At December 31, 2023 ($ in millions)	2023		2022		2021		2020		2019		Prior		Total
Amortized cost basis	$	2,097	$	931	$	541	$	312	$	69	$	27	$	3,977
30-89 days delinquent	44		25		15		9		2		1		96
90 or more days delinquent	11		6		4		2		—		—		23

(a)Gross charge-offs for the three months ended March 31, 2023 were not material.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The Company adopted ASU 2022-02 at January 1, 2023 on a modified retrospective basis through a cumulative adjustment to retained earnings. The new guidance is applicable for all loans modified to borrowers experiencing financial difficulties since January 1, 2023. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies - Allowance for Credit Losses -Loan Modifications to Borrowers Experiencing Financial Difficulty within our 2023 Form 10-K for additional information on our significant accounting policies related to loan modifications to borrowers experiencing financial difficulty.

The following table provides information on our loan modifications made to borrowers experiencing financial difficulty during the periods presented, which do not include loans that are classified as loan receivables held for sale:


Three months ended March 31	2024				2023
($ in millions)	Amount		% of Loan Receivables			Amount		% of Loan Receivables
Long-term modifications
Credit cards	$	471	0.5	%		$	377	0.4	%
Consumer installment loans	—					—		—	%
Commercial credit products	2		0.1	%		1		0.1	%
Short-term modifications
Credit cards	247		0.3	%		139		0.2	%
Consumer installment loans	—					—		—	%
Commercial credit products	—					—		—	%
Total	$	720	0.7	%		$	517	0.6	%

Financial Effects of Loan Modifications to Borrowers Experiencing Financial Difficulty

As part of our loan modifications to borrowers experiencing financial difficulty, we may provide multiple concessions to minimize our economic loss and improve long-term loan performance and collectability. For long-term modifications made in the three months ended March 31, 2024 and 2023, the financial effect of these modifications reduced the weighted-average interest rates by 97% for both periods, respectively. For short-term modifications made in the three months ended March 31, 2024 and 2023, unpaid balances of $15 million and $11 million, respectively, were forgiven.

Performance of Loans Modified to Borrowers Experiencing Financial Difficulty

The following tables provide information on the performance of loans modified to borrowers experiencing financial difficulty which have been modified within the previous 12 months and remain in a modification program at March 31, 2024. For the comparative period, amounts represent loans that were modified subsequent to January 1, 2023 and remained in a modification program at March 31, 2023:


	Amortized cost basis
At March 31, 2024 ($ in millions)	Current			30-89 days delinquent			90 or more days delinquent			Total past due(a)
Long-term modifications
Credit cards	$	928		$	175		$	151		$	326
Consumer installment loans	—			—			—			—
Commercial credit products	2			1			1			2
Short-term modifications
Credit cards	71			41			50			91
Consumer installment loans	—			—			—			—
Commercial credit products	—			—			—			—

Total delinquent modified loans	$	1,001		$	217		$	202		$	419
Percentage of total loan receivables	1.0		%	0.2		%	0.2		%	0.4		%


	Amortized cost basis
At March 31, 2023 ($ in millions)	Current			30-89 days delinquent			90 or more days delinquent			Total past due(a)
Long-term modifications
Credit cards	$	209		$	89		$	65		$	154
Consumer installment loans	—			—			—			—
Commercial credit products	—			—			1			1
Short-term modifications
Credit cards	28			18			44			62
Consumer installment loans	—			—			—			—
Commercial credit products	—			—			—			—

Total delinquent modified loans	$	237		$	107		$	110		$	217
Percentage of total loan receivables	0.3		%	0.1		%	0.1		%	0.2		%

(a) Once a loan has been modified, it only returns to current status (re-aged) after three consecutive monthly program payments are received post the modification date.

Payment Defaults

The following table presents the type, number and amount of loans to borrowers experiencing financial difficulty that enrolled in a long-term modification program within the previous 12 months from March 31, 2024, or between January 1, 2023 and March 31, 2023 for the comparative period, and experienced a payment default and charged-off during the period presented:


Three months ended March 31	2024			2023
($ in millions, accounts in thousands)	Accounts defaulted	Loans defaulted		Accounts defaulted	Loans defaulted
Credit cards	47	$	118	2	$	7
Consumer installment loans	—	—		—	—
Commercial credit products	—	1		—	—

Total	47	$	119	2	$	7

Of the loans modified to borrowers experiencing financial difficulty that enrolled in a short-term modification program within the previous 12 months from March 31, 2024, or between January 1, 2023 and March 31, 2023 for the comparative period, 51% and 14% had fully completed all required payments and successfully exited the program during the three months ended March 31, 2024 and 2023, respectively.

Unfunded Lending Commitments

We manage the potential risk in credit commitments by limiting the total amount of credit, both by individual customer and in total, by monitoring the size and maturity of our portfolios and by applying the same credit standards for all of our credit products. Unused credit card lines available to our customers totaled approximately $428 billion and $427 billion at March 31, 2024 and December 31, 2023, respectively. While these amounts represented the total available unused credit card lines, we have not experienced and do not anticipate that all of our customers will access their entire available line at any given point in time.

Interest Income by Product

The following table provides additional information about our interest and fees on loans, including merchant discounts, from our loan receivables, including held for sale:


	Three months ended March 31,
($ in millions)	2024		2023
Credit cards(a)	$	5,096	$	4,497
Consumer installment loans	149		83
Commercial credit products	45		34
Other	3		2
Total(b)	$	5,293	$	4,616

(a)Interest income on credit cards that was reversed related to accrued interest receivables written off was $592 million and $415 million for the three months ended March 31, 2024 and 2023, respectively.

(b)Deferred merchant discounts to be recognized in interest income at March 31, 2024 and December 31, 2023, were $1.8 billion and $1.9 billion, respectively, which are included in Accrued expenses and other liabilities in our Condensed Consolidated Statement of Financial Position.

NOTE 6. VARIABLE INTEREST ENTITIES

We use VIEs to securitize loan receivables and arrange asset-backed financing in the ordinary course of business. Investors in these entities only have recourse to the assets owned by the entity and not to our general credit. We do not have implicit support arrangements with any VIE and we did not provide non-contractual support for previously transferred loan receivables to any of these VIEs in the three months ended March 31, 2024 and 2023. Our VIEs are able to accept new loan receivables and arrange new asset-backed financings, consistent with the requirements and limitations on such activities placed on the VIE by existing investors. Once an account has been designated to a VIE, the contractual arrangements we have require all existing and future loan receivables originated under such account to be transferred to the VIE. The amount of loan receivables held by our VIEs in excess of the minimum amount required under the asset-backed financing arrangements with investors may be removed by us under removal of accounts provisions. All loan receivables held by a VIE are subject to claims of third-party investors.

In evaluating whether we have the power to direct the activities of a VIE that most significantly impact its economic performance, we consider the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and our decision-making role, if any, in those activities that significantly determine the entity’s economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important.

In determining whether we have the right to receive benefits or the obligation to absorb losses that could potentially be significant to a VIE, we evaluate all of our economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity’s design, including: the entity’s capital structure, contractual rights to earnings or losses, subordination of our interests relative to those of other investors, as well as any other contractual arrangements that might exist that could have the potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of our economic interests is a matter that requires the exercise of professional judgment.

We consolidate VIEs where we have the power to direct the activities that significantly affect the VIEs' economic performance, typically because of our role as either servicer or administrator for the VIEs. The power to direct exists because of our role in the design and conduct of the servicing of the VIEs’ assets as well as directing certain affairs of the VIEs, including determining whether and on what terms debt of the VIEs will be issued.

The loan receivables in these entities have risks and characteristics similar to our other financing receivables and were underwritten to the same standard. Accordingly, the performance of these assets has been similar to our other comparable loan receivables, and the blended performance of the pools of receivables in these entities reflects the eligibility criteria that we apply to determine which receivables are selected for transfer. Contractually, the cash flows from these financing receivables must first be used to pay third-party debt holders, as well as other expenses of the entity. Excess cash flows, if any, are available to us. The creditors of these entities have no claim on our other assets.

The table below summarizes the assets and liabilities of our consolidated securitization VIEs described above:


($ in millions)	March 31, 2024		December 31, 2023
Assets
Loan receivables, net(a)	$	18,259	$	19,537

Other assets(b)	49		47
Total	$	18,308	$	19,584

Liabilities
Borrowings	$	8,016	$	7,267
Other liabilities	31		31
Total	$	8,047	$	7,298

(a) Includes $1.8 billion and $1.9 billion of related allowance for credit losses resulting in gross restricted loans of $20.1 billion and $21.4 billion at March 31, 2024 and December 31, 2023, respectively.

(b) Includes $47 million and $45 million of segregated funds held by the VIEs at March 31, 2024 and December 31, 2023, respectively, which are classified as restricted cash and equivalents and included as a component of Other assets in our Condensed Consolidated Statements of Financial Position.

The balances presented above are net of intercompany balances and transactions that are eliminated in our condensed consolidated financial statements.

We provide servicing for all of our consolidated VIEs. Collections are required to be placed into segregated accounts owned by each VIE in amounts that meet contractually specified minimum levels. These segregated funds are invested in cash and cash equivalents and are restricted as to their use, principally to pay maturing principal and interest on debt and the related servicing fees. Collections above these minimum levels are remitted to us on a daily basis.

Income (principally, interest and fees on loans) earned by our consolidated VIEs was $1.0 billion and $948 million for the three months ended March 31, 2024 and 2023, respectively. Related expenses consisted primarily of provision for credit losses of $165 million and $120 million for the three months ended March 31, 2024 and 2023, respectively, and interest expense of $105 million and $77 million for the three months ended March 31, 2024 and 2023, respectively. These amounts do not include intercompany transactions, principally fees and interest, which are eliminated in our condensed consolidated financial statements.

Non-consolidated VIEs

As part of our community reinvestment initiatives, we invest in affordable housing properties and receive affordable housing tax credits for these investments. These investments included in our Condensed Consolidated Statement of Financial Position totaled $713 million and $736 million at March 31, 2024 and December 31, 2023, respectively, and represents our total exposure for these entities.

For the three months ended March 31, 2024 and 2023, we recognized amortization expense of $23 million and $20 million, respectively, and tax credits and other tax benefits of $28 million and $24 million, respectively, associated with investments in affordable housing properties within income tax expense or benefit.

Our other investments in non-consolidated VIEs, totaled $259 million and $252 million at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024, the Company also had investment commitments of $192 million related to these investments.

NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill


($ in millions)	2024
Balance at January 1	$	1,018
Change in amounts allocated to disposition of business(a)	4
Goodwill recognized upon acquisition	51
Balance at March 31	$	1,073

(a) The change in the three months ended March 31, 2024 was based upon the carrying amount of net assets of Pets Best and the final valuation of consideration received at closing.

Intangible Assets


	March 31, 2024						December 31, 2023
($ in millions)	Gross carrying amount		Accumulated amortization		Net		Gross carrying amount		Accumulated amortization		Net
Capitalized software	$	2,066	$	(1,331)	$	735	$	2,065	$	(1,302)	$	763
Other	191		(126)		65		204		(152)		52
Total	$	2,257	$	(1,457)	$	800	$	2,269	$	(1,454)	$	815

During the three months ended March 31, 2024, we recorded additions to intangible assets subject to amortization of $64 million, primarily related to capitalized software expenditures, as well as intangible assets of $23 million related to the Ally Lending acquisition. See Note 3. Acquisitions and Dispositions for additional information.

Amortization expense was $80 million and $70 million for the three months ended March 31, 2024 and 2023, respectively, and is included as a component of Other expense in our Condensed Consolidated Statements of Earnings.

NOTE 8. DEPOSITS


	March 31, 2024				December 31, 2023
($ in millions)	Amount		Average rate(a)		Amount		Average rate(a)
Interest-bearing deposits	$	83,160	4.6	%	$	80,789	3.9	%
Non-interest-bearing deposits	394		—		364		—
Total deposits	$	83,554			$	81,153

(a)Based on interest expense for the three months ended March 31, 2024 and the year ended December 31, 2023 and average deposits balances.

At March 31, 2024 and December 31, 2023, interest-bearing deposits included $10.7 billion and $10.0 billion, respectively, of certificates of deposit that exceeded applicable FDIC insurance limits, which are generally $250,000 per depositor for each account ownership category. These amounts include partially insured certificates of deposit.

At March 31, 2024, our interest-bearing time deposits maturing for the remainder of 2024 and over the next four years and thereafter were as follows:


($ in millions)			2024						2025						2026						2027						2028						Thereafter
Deposits			$	25,691					$	17,744					$	1,719					$	2,726					$	1,455					$	282

The above maturity table excludes $29.3 billion of demand deposits with no defined maturity, of which $27.3 billion are savings accounts. In addition, at March 31, 2024, we had $4.3 billion of broker network deposit sweeps procured through a program arranger who channels brokerage account deposits to us that are also excluded from the above maturity table. Unless extended, the contracts associated with these broker network deposit sweeps will terminate between 2025 and 2026.

NOTE 9. BORROWINGS


	March 31, 2024						December 31, 2023
($ in millions)	Maturity date	Interest Rate	Weighted average interest rate		Outstanding Amount(a)(b)		Outstanding Amount(a)(b)
Borrowings of consolidated securitization entities:
Fixed securitized borrowings	2025 - 2027	3.37% - 5.74%	4.69	%	$	4,166	$	3,417
Floating securitized borrowings	2024 - 2026	6.07% - 6.28%	6.14	%	3,850		3,850
Total borrowings of consolidated securitization entities			5.39	%	8,016		7,267

Senior unsecured notes:
Synchrony Financial senior unsecured notes:
Fixed senior unsecured notes	2024 - 2031	2.87% - 5.15%	4.20	%	5,882		6,480


Synchrony Bank senior unsecured notes:
Fixed senior unsecured notes	2025 - 2027	5.40% - 5.63%	5.49	%	1,494		1,494

Total senior unsecured notes			4.46	%	7,376		7,974

Subordinated unsecured notes:
Synchrony Financial subordinated unsecured notes:
Fixed subordinated unsecured notes	2033	7.25%	7.25	%	741		741
Total senior and subordinated unsecured notes			4.72	%	8,117		8,715

Total borrowings					$	16,133	$	15,982

(a)Includes unamortized debt premiums, discounts and issuance costs.

(b)The Company may redeem certain borrowings prior to their original contractual maturity dates in accordance with the optional redemption provision specified in the respective instruments.

Debt Maturities

The following table summarizes the maturities of the principal amount of our borrowings of consolidated securitization entities and senior and subordinated unsecured notes for the remainder of 2024 and over the next four years and thereafter:


($ in millions)			2024						2025						2026						2027						2028						Thereafter
Borrowings			$	2,875					$	6,050					$	2,750					$	2,350					$	—					$	2,150

Additional Sources of Liquidity

We have undrawn committed capacity under certain credit facilities, primarily related to our securitization programs and also have access to the Federal Reserve discount window.

At March 31, 2024 and December 31, 2023, we had an aggregate of $2.5 billion of undrawn committed capacity under our securitization financings, subject to customary borrowing conditions, from private lenders under our securitization programs, and an aggregate of $0.5 billion of undrawn committed capacity under our unsecured revolving credit facility with private lenders.

At March 31, 2024 and December 31, 2023, we had $10.8 billion and $10.4 billion, respectively, in undrawn Federal Reserve discount window borrowing capacity based on the amount and type of assets pledged.

NOTE 10. FAIR VALUE MEASUREMENTS

For a description of how we estimate fair value, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies in our 2023 annual consolidated financial statements within our 2023 Form 10-K. The following tables present our assets and liabilities measured at fair value on a recurring basis.

Recurring Fair Value Measurements


At March 31, 2024 ($ in millions)	Level 1		Level 2		Level 3		Total(a)
Assets
Debt securities
U.S. government and federal agency	$	—	$	1,463	$	—	$	1,463
State and municipal	—		—		9		9
Residential mortgage-backed	—		335		—		335
Asset-backed	—		1,191		—		1,191
Other	—		—		8		8
Other(b)	14		—		9		23
Total	$	14	$	2,989	$	26	$	3,029

Liabilities
Other(c)	—		—		4		4
Total	$	—	$	—	$	4	$	4

At December 31, 2023 ($ in millions)
Assets
Debt securities
U.S. government and federal agency	$	—	$	2,264	$	—	$	2,264
State and municipal	—		—		10		10
Residential mortgage-backed	—		354		—		354
Asset-backed	—		1,162		—		1,162
Other	—		—		8		8
Other(b)	14		—		10		24
Total	$	14	$	3,780	$	28	$	3,822

Liabilities
Other(c)	—		—		$	4	$	4

Total	$	—	$	—	$	4	$	4

(a) For the three months ended March 31, 2024 and 2023, there were no fair value measurements transferred between levels.

(b) Other is primarily comprised of equity investments measured at fair value, which are included in Other assets in our Condensed Consolidated Statement of Financial Position, as well as certain financial assets for which we have elected the fair value option which are included in Loan receivables in our Condensed Consolidated Statement of Financial Position.

(c) Other is primarily comprised of certain financial liabilities for which we have elected the fair value option, which are included in Accrued expenses and other liabilities in our Condensed Consolidated Statement of Financial Position.

Level 3 Fair Value Measurements

Our Level 3 recurring fair value measurements primarily relate to state and municipal and corporate debt instruments, which are valued using non-binding broker quotes or other third-party sources, and financial assets and liabilities for which we have elected the fair value option. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies and Note 10. Fair Value Measurements in our 2023 annual consolidated financial statements within our 2023 Form 10-K for a description of our process to evaluate third-party pricing servicers. Our state and municipal debt securities are classified as available-for-sale with changes in fair value included in Accumulated other comprehensive income.

The changes in our Level 3 assets and liabilities that are measured on a recurring basis for the three months ended March 31, 2024 and 2023, respectively, were not material.

Financial Assets and Financial Liabilities Carried at Other Than Fair Value


	Carrying		Corresponding fair value amount
At March 31, 2024 ($ in millions)	value		Total		Level 1		Level 2		Level 3
Financial Assets
Financial assets for which carrying values equal or approximate fair value:
Cash and equivalents(a)	$	20,021	$	20,021	$	20,021	$	—	$	—
Other assets(a)(b)	$	50	$	50	$	50	$	—	$	—

Financial assets carried at other than fair value:
Loan receivables, net(c)	$	90,819	$	103,231	$	—	$	—	$	103,231


Financial Liabilities
Financial liabilities carried at other than fair value:
Deposits	$	83,554	$	83,516	$	—	$	83,516	$	—
Borrowings of consolidated securitization entities	$	8,016	$	8,001	$	—	$	4,150	$	3,851

Senior and subordinated unsecured notes	$	8,117	$	7,826	$	—	$	7,826	$	—

	Carrying		Corresponding fair value amount
At December 31, 2023 ($ in millions)	value		Total		Level 1		Level 2		Level 3
Financial Assets
Financial assets for which carrying values equal or approximate fair value:
Cash and equivalents(a)	$	14,259	$	14,259	$	14,259	$	—	$	—
Other assets(a)(b)	$	50	$	50	$	50	$	—	$	—
Assets held for sale(d)	$	112	$	112	$	112	$	—	$	—
Financial assets carried at other than fair value:
Loan receivables, net(c)	$	92,407	$	104,761	$	—	$	—	$	104,761


Financial Liabilities
Financial liabilities carried at other than fair value:
Deposits	$	81,153	$	80,935	$	—	$	80,935	$	—
Borrowings of consolidated securitization entities	$	7,267	$	7,250	$	—	$	3,411	$	3,839

Senior and subordinated unsecured notes	$	8,715	$	8,423	$	—	$	8,423	$	—

(a) For cash and equivalents and restricted cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments.

(b) This balance relates to restricted cash and equivalents, which is included in Other assets.

(c) Excludes financial assets for which we have elected the fair value option. Under certain retail partner program agreements, the expected sales proceeds in the event of a sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above.

(d) Includes $19 million of cash and equivalents and $93 million of restricted cash and equivalents.

Equity Securities Without Readily Determinable Fair Values


	Three months ended March 31,
At or for the periods ended March 31 ($ in millions)	2024		2023
Carrying value(a)	$	272	$	250
Upward adjustments(b)	—		—
Downward adjustments(b)	—		—

(a) Carrying value reflects cumulative purchases and sales in addition to upward and downward carrying value changes, and at December 31, 2023 was $270 million.

(b) Between January 1, 2018 and March 31, 2024, cumulative upward and downward carrying value adjustments were $205 million and $(14) million, respectively.

NOTE 11. REGULATORY AND CAPITAL ADEQUACY

As a savings and loan holding company and a financial holding company, we are subject to regulation, supervision and examination by the Federal Reserve Board and subject to the capital requirements as prescribed by Basel III capital rules and the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Bank is a federally chartered savings association. As such, the Bank is subject to regulation, supervision and examination by the Office of the Comptroller of the Currency of the U.S. Treasury (the “OCC”), which is its primary regulator, and by the Consumer Financial Protection Bureau (“CFPB”). In addition, the Bank, as an insured depository institution, is supervised by the FDIC.

Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could limit our business activities and have a material adverse effect on our consolidated financial statements. Under capital adequacy guidelines, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require us and the Bank to maintain minimum amounts and ratios (set forth in the tables below) of Total, Tier 1 and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined).

For Synchrony Financial to be a well-capitalized savings and loan holding company, the Bank must be well-capitalized and Synchrony Financial must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve Board to meet and maintain a specific capital level for any capital measure.

The Company elected to adopt the option provided by the interim final rule issued by joint federal bank regulatory agencies, which largely delayed the effects of CECL on its regulatory capital. Beginning in the first quarter of 2022, the effects are being phased-in over a three-year period through 2024 and will be fully phased-in beginning in the first quarter of 2025. Under the interim final rule, the amount of adjustments to regulatory capital deferred until the phase-in period included both the initial impact of our adoption of CECL at January 1, 2020 and 25% of subsequent changes in our allowance for credit losses during the two-year period ended December 31, 2021, collectively the “CECL regulatory capital transition adjustment”. Beginning in the first quarter of 2024 only 25% of the CECL regulatory capital transition adjustment is deferred in our regulatory capital amounts and ratios, as compared to 50% at December 31, 2023.

At March 31, 2024 and December 31, 2023, Synchrony Financial met all applicable requirements to be deemed well-capitalized pursuant to Federal Reserve Board regulations. At March 31, 2024 and December 31, 2023, the Bank also met all applicable requirements to be deemed well-capitalized pursuant to OCC regulations and for purposes of the Federal Deposit Insurance Act. There are no conditions or events subsequent to March 31, 2024 that management believes have changed the Company's or the Bank’s capital category.

The actual capital amounts, ratios and the applicable required minimums of the Company and the Bank are as follows:

Synchrony Financial


At March 31, 2024 ($ in millions)	Actual				Minimum for capital adequacy purposes
	Amount		Ratio(a)		Amount		Ratio(b)
Total risk-based capital	$	16,347	15.8	%	$	8,259	8.0	%
Tier 1 risk-based capital	$	14,207	13.8	%	$	6,195	6.0	%
Tier 1 leverage	$	14,207	12.0	%	$	4,719	4.0	%
Common equity Tier 1 Capital	$	12,985	12.6	%	$	4,646	4.5	%


At December 31, 2023 ($ in millions)	Actual				Minimum for capital adequacy purposes
	Amount		Ratio(a)		Amount		Ratio(b)
Total risk-based capital	$	15,464	14.9	%	$	8,277	8.0	%
Tier 1 risk-based capital	$	13,334	12.9	%	$	6,208	6.0	%
Tier 1 leverage	$	13,334	11.7	%	$	4,563	4.0	%
Common equity Tier 1 Capital	$	12,600	12.2	%	$	4,656	4.5	%

Synchrony Bank


At March 31, 2024 ($ in millions)	Actual				Minimum for capital adequacy purposes				Minimum to be well-capitalized under prompt corrective action provisions
	Amount		Ratio(a)		Amount		Ratio(b)		Amount		Ratio
Total risk-based capital	$	14,769	15.1	%	$	7,840	8.0	%	$	9,800	10.0	%
Tier 1 risk-based capital	$	12,690	12.9	%	$	5,880	6.0	%	$	7,840	8.0	%
Tier 1 leverage	$	12,690	11.4	%	$	4,454	4.0	%	$	5,567	5.0	%
Common equity Tier I capital	$	12,690	12.9	%	$	4,410	4.5	%	$	6,370	6.5	%


At December 31, 2023 ($ in millions)	Actual				Minimum for capital adequacy purposes				Minimum to be well-capitalized under prompt corrective action provisions
	Amount		Ratio(a)		Amount		Ratio(b)		Amount		Ratio
Total risk-based capital	$	14,943	15.3	%	$	7,822	8.0	%	$	9,778	10.0	%
Tier 1 risk-based capital	$	12,880	13.2	%	$	5,867	6.0	%	$	7,822	8.0	%
Tier 1 leverage	$	12,880	12.0	%	$	4,302	4.0	%	$	5,377	5.0	%
Common equity Tier I capital	$	12,880	13.2	%	$	4,400	4.5	%	$	6,356	6.5	%

(a)Capital ratios are calculated based on the Basel III Standardized Approach rules. Capital amounts and ratios at March 31, 2024 and at December 31, 2023 in the above tables reflect the applicable CECL regulatory capital transition adjustment.

(b)At March 31, 2024 and at December 31, 2023, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 2.5 percentage points to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees.

The Bank may pay dividends on its stock, with consent or non-objection from the OCC and the Federal Reserve Board, among other things, if its regulatory capital would not thereby be reduced below the applicable regulatory capital requirements.

NOTE 12. EARNINGS PER SHARE

Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the assumed conversion of all dilutive securities, which are calculated using the treasury stock method.

The following table presents the calculation of basic and diluted earnings per common share:


	Three months ended March 31,
(in millions, except per share data)	2024		2023
Net earnings	$	1,293	$	601
Preferred stock dividends	(11)		(11)
Net earnings available to common stockholders	$	1,282	$	590

Weighted average common shares outstanding, basic	404.7		434.4
Effect of dilutive securities	3.5		2.8
Weighted average common shares outstanding, dilutive	408.2		437.2

Earnings per basic common share	$	3.17	$	1.36
Earnings per diluted common share	$	3.14	$	1.35

We have issued certain stock-based awards under the Synchrony Financial 2014 Long-Term Incentive Plan. A total of 2 million shares and 5 million shares for the three months ended March 31, 2024 and 2023, respectively, related to these awards, were considered anti-dilutive and therefore were excluded from the computation of diluted earnings per common share.

NOTE 13. EQUITY AND OTHER STOCK RELATED INFORMATION

Preferred Stock

The following table summarizes the Company's preferred stock issued and outstanding at March 31, 2024 and December 31, 2023.


Series	Issuance Date	Redeemable by Issuer Beginning	Per Annum Dividend Rate	Liquidation Preference per Share	Total Shares Outstanding	March 31, 2024		December 31, 2023
($ in millions, except per share data)
Series A(a)	November 14, 2019	November 15, 2024	5.625%	$1,000	750,000	$	734	$	734
Series B(a)	February 23, 2024	May 15, 2029	8.25%(b)	$1,000	500,000	$	488	$	—
						$	1,222	$	734

(a)Issued as depositary shares, each representing a 1/40th interest in a share of the corresponding series of non-cumulative perpetual preferred stock. Dividends are payable quarterly on February 15, May 15, August 15 and November 15 of each calendar year at a fixed rate, in each case when, as and if declared by the Board of Directors.

(b)Through May 14, 2029; resets May 15, 2029 and each date falling on the fifth anniversary at 5-Year Treasury Rate plus 4.044%.

NOTE 14. INCOME TAXES

Unrecognized Tax Benefits


($ in millions)	March 31, 2024		December 31, 2023
Unrecognized tax benefits, excluding related interest expense and penalties(a)	$	242	$	230
Portion that, if recognized, would reduce tax expense and effective tax rate(b)	$	191	$	182

(a)Interest and penalties related to unrecognized tax benefits were not material for all periods presented.

(b)Comprised of federal unrecognized tax benefits and state and local unrecognized tax benefits net of the effects of associated U.S. federal income taxes. Excludes amounts attributable to any related valuation allowances resulting from associated increases in deferred tax assets.

We establish a liability that represents the difference between a tax position taken (or expected to be taken) on an income tax return and the amount of taxes recognized in our financial statements. The liability associated with the unrecognized tax benefits is adjusted periodically when new information becomes available. The amount of unrecognized tax benefits that is reasonably possible to be resolved in the next twelve months is expected to be $39 million, of which $31 million, if recognized, would reduce the Company's tax expense and effective tax rate.

In the current year, the Company executed a Memorandum of Understanding with the IRS to participate voluntarily in the IRS Compliance Assurance Process (“CAP”) program for the 2024 tax year, and thus the tax year is under IRS review. The IRS is also examining our 2023 tax year, and we expect the review will be completed in the current year. Additionally, we are under examination in various states going back to 2014.

We believe that there are no issues or claims that are likely to significantly impact our results of operations, financial position or cash flows. We further believe that we have made adequate provision for all income tax uncertainties that could result from such examinations.

NOTE 15. LEGAL PROCEEDINGS AND REGULATORY MATTERS

In the normal course of business, from time to time, we have been named as a defendant in various legal proceedings, including arbitrations, class actions and other litigation, arising in connection with our business activities. Certain of the legal actions include claims for substantial compensatory and/or punitive damages, or claims for indeterminate amounts of damages. We are also involved, from time to time, in reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our business (collectively, “regulatory matters”), which could subject us to significant fines, penalties, obligations to change our business practices or other requirements resulting in increased expenses, diminished income and damage to our reputation. We contest liability and/or the amount of damages as appropriate in each pending matter. In accordance with applicable accounting guidance, we establish an accrued liability for legal and regulatory matters when those matters present loss contingencies which are both probable and reasonably estimable.

Legal proceedings and regulatory matters are subject to many uncertain factors that generally cannot be predicted with assurance, and we may be exposed to losses in excess of any amounts accrued.

For some matters, we are able to determine that an estimated loss, while not probable, is reasonably possible. For other matters, including those that have not yet progressed through discovery and/or where important factual information and legal issues are unresolved, we are unable to make such an estimate. We currently estimate that the reasonably possible losses for legal proceedings and regulatory matters, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a possible loss, are immaterial. This represents management’s estimate of possible loss with respect to these matters and is based on currently available information. This estimate of possible loss does not represent our potential maximum loss exposure. The legal proceedings and regulatory matters underlying the estimate will change from time to time and actual results may vary significantly from current estimates.

Our estimate of reasonably possible losses involves significant judgment, given the varying stages of the proceedings, the existence of numerous yet to be resolved issues, the breadth of the claims (often spanning multiple years), unspecified damages and/or the novelty of the legal issues presented. Based on our current knowledge, we do not believe that we are a party to any pending legal proceeding or regulatory matters that would have a material adverse effect on our condensed consolidated financial condition or liquidity. However, in light of the uncertainties involved in such matters, the ultimate outcome of a particular matter could be material to our operating results for a particular period depending on, among other factors, the size of the loss or liability imposed and the level of our earnings for that period, and could adversely affect our business and reputation.

Below is a description of certain of our regulatory matters and legal proceedings. Other than as described below, during the quarter ended March 31, 2024, there were no material changes to the legal proceedings previously disclosed in our 2023 Form 10-K.

On January 28, 2019, a purported shareholder derivative action, Gilbert v. Keane, et al., was filed in the U.S. District Court for the District of Connecticut against the Company as a nominal defendant, and certain of the Company’s officers and directors. The lawsuit alleges breach of fiduciary duty claims based on the allegations raised by the plaintiff in the Stichting Depositary APG class action, unjust enrichment, waste of corporate assets, and that the defendants made materially misleading statements and/or omitted material information in violation of the Exchange Act. The complaint seeks a declaration that the defendants breached and/or aided and abetted the breach of their fiduciary duties to the Company, unspecified monetary damages with interest, restitution, a direction that the defendants take all necessary actions to reform and improve corporate governance and internal procedures, and attorneys’ and experts’ fees.

On March 11, 2019, a second purported shareholder derivative action, Aldridge v. Keane, et al., was filed in the U.S. District Court for the District of Connecticut. The allegations in the Aldridge complaint are substantially similar to those in the Gilbert complaint.

On March 26, 2020, the District Court recaptioned the Gilbert and Aldridge cases as In re Synchrony Financial Derivative Litigation. On August 11, 2023, the parties submitted a joint status report to the District Court indicating that the parties had reached a memorandum of understanding to settle the litigation, which is not expected to have a material financial impact on the Company. On December 21, 2023, the District Court entered an order preliminarily approving the settlement. On April 5, 2024, the District Court entered an order granting final approval of the settlement.

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