Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this quarterly report and in our 2024 Form 10-K. The discussion below contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations. See “Cautionary Note Regarding Forward-Looking Statements.”

Introduction and Business Overview

____________________________________________________________________________________________

We are a premier consumer financial services company delivering one of the industry's most complete digitally-enabled product suites. Our experience, expertise and scale encompass a broad spectrum of industries including digital, health and wellness, retail, telecommunications, home, auto, outdoor, pet and more. We have an established and diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers, which we refer to as our “partners.” For the three months ended March 31, 2025, we financed $40.7 billion of purchase volume and had 69.3 million average active accounts and at March 31, 2025, we had $99.6 billion of loan receivables.

We offer our credit products primarily through our wholly-owned subsidiary, the Bank. In addition, through the Bank, we offer, directly to retail, affinity relationships and commercial customers, a range of deposit products insured by the Federal Deposit Insurance Corporation (“FDIC”), including certificates of deposit, individual retirement accounts (“IRAs”), money market accounts, savings accounts and sweep and affinity deposits. We also take deposits at the Bank through third-party securities brokerage firms that offer our FDIC-insured deposit products to their customers. Our deposit base has continued to serve as a source of stable and diversified low-cost funding for our credit activities. At March 31, 2025, we had $83.4 billion in deposits, which represented 83% of our total funding sources.

Our Sales Platforms

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

Home & Auto

Our Home & Auto sales platform provides comprehensive payments and financing solutions with integrated in-store and digital experiences through a broad network of partners and merchants providing home and automotive merchandise and services, as well as our Synchrony Car Care network and Synchrony HOME credit card offering. In March 2024, we completed our acquisition of Ally Financial Inc.'s point-of-sale financing business ("Ally Lending"), which deepened our presence in the home improvement sector, including specialty areas such as roofing, HVAC and windows. Our Home & Auto sales platform partners include a wide range of key retailers in the home improvement, furniture, bedding, flooring, appliance and electronics industry, such as Ashley HomeStores, Inc., Floor & Decor, Lowe's, and Mattress Firm, as well as automotive merchandise and services, such as Chevron and Discount Tire. In addition, we also have program agreements with manufacturers, buying groups and industry associations, such as Generac, Nationwide Marketing Group and the Home Furnishings Association.

Digital

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

Diversified & Value

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

Health & Wellness

Our Health & Wellness sales platform provides comprehensive healthcare payments and financing solutions, through a network of providers and health related retail locations, for those seeking health and wellness care for themselves, their families and their pets, and includes our CareCredit brand, as well as partners such as Walgreens.

Lifestyle

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

Corp, Other

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

Our Credit Products

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Through our sales platforms, we offer three principal types of credit products: credit cards, commercial credit products and consumer installment loans. We also offer our Payment Security program, which is a debt cancellation product.

The following table sets forth each credit product by type and indicates the percentage of our total loan receivables that are under standard terms only or pursuant to a promotional financing offer at March 31, 2025.


			Promotional Offer
Credit Product	Standard Terms Only		Deferred Interest		Other Promotional		Total
Credit cards	60.9	%	18.1	%	13.2	%	92.2	%
Commercial credit products	1.8		—		0.1		1.9
Consumer installment loans	—		0.2		5.6		5.8
Other	0.1		—		—		0.1
Total	62.8	%	18.3	%	18.9	%	100.0	%

Credit Cards

We offer the following principal types of credit cards:

Private Label Credit Cards.** Private label credit cards are partner-branded credit cards (e.g., Lowe’s or Amazon) or program-branded credit cards (e.g., Synchrony Car Care or CareCredit) that are used primarily for the purchase of goods and services from the partner or within the program network. In addition, in some cases, cardholders may be permitted to access their credit card accounts for cash advances. Credit under our private label credit cards typically is extended either on standard terms only or pursuant to a promotional financing offer.
Dual Cards and General Purpose Co-Branded Cards.** Our patented Dual Cards are credit cards that function as private label credit cards when used to purchase goods and services from our partners, and as general purpose credit cards when used to make purchases from other retailers wherever cards from those card networks are accepted or for cash advance transactions. We also offer general purpose co-branded credit cards that do not function as private label credit cards, as well as a Synchrony-branded general purpose credit card. Dual Cards and general purpose co-branded credit cards are offered across all of our sales platforms and credit is typically extended on standard terms only. We offer either Dual Cards or general purpose co-branded credit cards through over 15 of our large partners, of which the majority are Dual Cards, as well as our CareCredit Dual Card. Consumer Dual Cards and Co-Branded cards totaled 28% of our total loan receivables portfolio at March 31, 2025.

Commercial Credit Products

We offer private label cards and Dual Cards for commercial customers that are similar to our consumer offerings. We also offer a commercial pay-in-full accounts receivable product to a wide range of business customers.

Installment Loans

We originate secured installment loans to consumers (and a limited number of commercial customers) in the United States, primarily for power products in our Outdoor market (motorcycles, ATVs and lawn and garden). We also offer unsecured installment loans primarily in our Home & Auto and Health & Wellness sales platforms and through our various other installment products, such as our Synchrony Pay Later solutions, including pay monthly and Pay in 4 products, for short-term loans. Installment loans are closed-end credit accounts where the customer pays down the outstanding balance in installments. Installment loans are generally assessed periodic finance charges using fixed interest rates.

Business Trends and Conditions

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We believe our business and results of operations will be impacted in the future by various trends and conditions. For a discussion of certain trends and conditions, see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Trends and Conditions” in our 2024 Form 10-K and see below for recent developments. For a discussion of how certain trends and conditions impacted the three months ended March 31, 2025, see “—Results of Operations.”

CFPB final rule on credit card late fees.

On March 5, 2024, the CFPB released a final rule amending its regulations that implement the Truth in Lending Act to lower the safe harbor dollar amount for credit card late fees from the prior $30 (adjusted to $41 for each subsequent late payment within the next six billing cycles) to $8 and to eliminate the automatic annual inflation adjustment to such safe harbor dollar amount. The final rule had an original effective date of May 14, 2024. Industry organizations challenged the final rule in court, and on May 10, 2024, the United States District Court for the Northern District of Texas granted an injunction and stay of the final rule.

On April 14, 2025, in the litigation challenging the final late fee rule, the CFPB and the plaintiff industry organizations filed a joint motion asking the court to vacate the final rule and dismiss the case. On April 15, 2025, the court granted this motion. As such, the final rule has been vacated.

In anticipation that the final rule would become effective, we implemented a number of product, pricing and policy changes in the prior year. In light of the final rule being vacated, we plan to review the product, pricing and policy changes with our partners, consistent with our usual business practice of monitoring overall program performance, including assessing whether any adjustments are warranted.

Seasonality

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

The seasonal impact to purchase volume and the loan receivables balance typically results in fluctuations in our results of operations, delinquency metrics and the allowance for credit losses as a percentage of total loan receivables between quarterly periods.

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

The seasonal trends discussed above are most evident between the fourth quarter and the first quarter of the following year, particularly with respect to our loan receivables which decreased by $5.1 billion, or 4.9% to $99.6 billion at March 31, 2025 compared to $104.7 billion at December 31, 2024, and our allowance for credit losses as a percentage of total loan receivables that increased to 10.87% at March 31, 2025, from 10.44% at December 31, 2024.

Results of Operations

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Highlights for the Three Months Ended March 31, 2025

Below are highlights of our performance for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, as applicable, except as otherwise noted.

Net earnings decreased to $757 million from $1.3 billion for the three months ended March 31, 2025. The decrease in the three months ended March 31, 2025 was primarily driven by the after-tax gain on sale related to Pets Best of $802 million in the prior year, and higher retailer share arrangements, partially offset by a decrease in provision for credit losses.
Loan receivables decreased 2.1% to $99.6 billion at March 31, 2025 compared to $101.7 billion at March 31, 2024, primarily reflecting the impact of lower purchase volume.
Net interest income increased 1.3% to $4.5 billion for the three months ended March 31, 2025 primarily driven by a reduction in interest expense. For the three months ended March 31, 2025, interest expense decreased 6.6% primarily due to lower benchmark rates. Interest and fees on loans was flat for the three months ended March 31, 2025, primarily driven by the impact of our product, pricing and policy changes, offset by lower benchmark rates and lower late fee incidence.
Retailer share arrangements increased 17.1% to $895 million for the three months ended March 31, 2025, primarily reflecting program performance which includes the impact of our product, pricing and policy changes.
Over-30 day loan delinquencies as a percentage of period-end loan receivables decreased 22 basis points to 4.52% at March 31, 2025 compared to March 31, 2024. The net charge-off rate increased 7 basis points to 6.38% for the three months ended March 31, 2025.
Provision for credit losses decreased by $393 million, or 20.9%, for the three months ended March 31, 2025, primarily driven by a reserve release of $97 million versus a reserve build of $299 million in the prior year which included a $190 million reserve build related to the Ally Lending acquisition. Our allowance coverage ratio (allowance for credit losses as a percentage of period-end loan receivables) increased to 10.87% at March 31, 2025, as compared to 10.72% at March 31, 2024.
Other income decreased by $1.0 billion to $149 million, for the three months ended March 31, 2025 primarily driven by the $1.1 billion gain on sale related to Pets Best in the prior year, partially offset by the impact of our product, pricing and policy change related fees in the current year period.
Other expense increased by $37 million, or 3.1%, for the three months ended March 31, 2025. The increase in the three months ended March 31, 2025 was primarily driven by costs related to technology investments, and also included the impacts of a charitable contribution and a restructuring charge related to our Ally Lending business.
At March 31, 2025, deposits represented 83% of our total funding sources. Total deposits increased by 1.7% to $83.4 billion at March 31, 2025, compared to December 31, 2024.
During the three months ended March 31, 2025, we declared and paid cash dividends totaling $21 million on our Series A 5.625% fixed rate non-cumulative perpetual preferred stock and our Series B 8.250% fixed rate reset non-cumulative perpetual preferred stock.
During the three months ended March 31, 2025, we repurchased $600 million of our outstanding common stock, and declared and paid cash dividends of $0.25 per share, or $97 million in the aggregate. At March 31, 2025, we completed our prior share repurchase program, and in April 2025 we announced that the Board of Directors approved a new share repurchase program of up to $2.5 billion, through June 30, 2026, and increased our quarterly dividend to $0.30 per common share commencing in the second quarter of 2025. For more information, see “Capital—Dividend and Share Repurchases.”

2025 Partner Agreements

During the three months ended March 31, 2025, and to date, we continued to expand and diversify our portfolio with the addition or renewal of more than 10 partners, which included the following:

In our Home & Auto sales platform, we extended our program agreements with Ashley HomeStores, Inc. and Discount Tire.
In our Digital sales platform, we announced our new partnership with Sun Country Airlines.
In our Health & Wellness sales platform, we expanded our network through our new partnership with Texas A&M University Veterinary Medical Teaching Hospital.
In our Lifestyle sales platform, we extended our program agreement with American Eagle.

Summary Earnings

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


	Three months ended March 31,
($ in millions)	2025		2024
Interest income	$	5,550	$	5,568
Interest expense	1,086		1,163
Net interest income	4,464		4,405
Retailer share arrangements	(895)		(764)

Provision for credit losses	1,491		1,884
Net interest income, after retailer share arrangements and provision for credit losses	2,078		1,757
Other income	149		1,157
Other expense	1,243		1,206
Earnings before provision for income taxes	984		1,708
Provision for income taxes	227		415
Net earnings	$	757	$	1,293
Net earnings available to common stockholders	$	736	$	1,282

Other Financial and Statistical Data

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


	At and for the
	Three months ended March 31,
($ in millions)	2025			2024
Financial Position Data (Average):
Loan receivables, including held for sale	$	101,021		$	100,957
Total assets	$	120,493		$	119,034
Deposits	$	82,788		$	82,988
Borrowings	$	16,041		$	16,013
Total equity	$	16,695		$	14,614
Selected Performance Metrics:
Purchase volume(1)(2)	$	40,720		$	42,387
Home & Auto	$	9,567		$	10,512
Digital	$	12,479		$	12,628
Diversified & Value	$	13,732		$	14,023
Health & Wellness	$	3,774		$	3,980
Lifestyle	$	1,168		$	1,244
Corp, Other	$	—		$	—
Average active accounts (in thousands)(2)(3)	69,315			71,667
Net interest margin(4)	14.74		%	14.55		%
Net charge-offs	$	1,588		$	1,585
Net charge-offs (annualized) as a % of average loan receivables, including held for sale	6.38		%	6.31		%
Allowance coverage ratio(5)	10.87		%	10.72		%
Return on assets(6)	2.5		%	4.4		%
Return on equity(7)	18.4		%	35.6		%
Equity to assets(8)	13.86		%	12.28		%
Other expense (annualized) as a % of average loan receivables, including held for sale	4.99		%	4.80		%
Efficiency ratio(9)	33.4		%	25.1		%
Effective income tax rate	23.1		%	24.3		%
Selected Period-End Data:
Loan receivables	$	99,608		$	101,733
Allowance for credit losses	$	10,828		$	10,905
30+ days past due as a % of period-end loan receivables(10)	4.52		%	4.74		%
90+ days past due as a % of period-end loan receivables(10)	2.29		%	2.42		%
Total active accounts (in thousands)(2)(3)	67,787			70,754

(1)Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.

(2)Includes activity and accounts associated with loan receivables held for sale.

(3)Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

(4)Net interest margin represents annualized net interest income divided by average total interest-earning assets.

(5)Allowance coverage ratio represents allowance for credit losses divided by total period-end loan receivables.

(6)Return on assets represents annualized net earnings as a percentage of average total assets.

(7)Return on equity represents annualized net earnings as a percentage of average total equity.

(8)Equity to assets represents average total equity as a percentage of average total assets.

(9)Efficiency ratio represents (i) other expense, divided by (ii) sum of net interest income, plus other income, less retailer share arrangements.

(10)Based on customer statement-end balances extrapolated to the respective period-end date.

Average Balance Sheet

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


	2025						2024
Three months ended March 31 ($ in millions)	Average Balance		Interest Income / Expense		Average Yield / Rate(1)		Average Balance		Interest Income/ Expense		Average Yield / Rate(1)
Assets
Interest-earning assets:
Interest-earning cash and equivalents(2)	$	18,539	$	203	4.44	%	$	17,405	$	236	5.45	%
Securities available for sale	3,231		35		4.39	%	3,432		39		4.57	%
Loan receivables, including held for sale(3):
Credit cards	93,241		5,055		21.99	%	94,216		5,096		21.75	%
Consumer installment loans	5,833		211		14.67	%	4,734		149		12.66	%
Commercial credit products	1,842		45		9.91	%	1,878		45		9.64	%
Other	105		1		3.86	%	129		3		9.35	%
Total loan receivables, including held for sale	101,021		5,312		21.33	%	100,957		5,293		21.09	%
Total interest-earning assets	122,791		5,550		18.33	%	121,794		5,568		18.39	%
Non-interest-earning assets:
Cash and due from banks	868						944
Allowance for credit losses	(10,936)						(10,677)
Other assets	7,770						6,973
Total non-interest-earning assets	(2,298)						(2,760)
Total assets	$	120,493					$	119,034
Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	82,370	$	882	4.34	%	$	82,598	$	954	4.65	%
Borrowings of consolidated securitization entities	8,191		104		5.15	%	7,383		105		5.72	%

Senior and subordinated unsecured notes	7,850		100		5.17	%	8,630		104		4.85	%

Total interest-bearing liabilities	98,411		1,086		4.48	%	98,611		1,163		4.74	%
Non-interest-bearing liabilities:
Non-interest-bearing deposit accounts	418						390
Other liabilities	4,969						5,419
Total non-interest-bearing liabilities	5,387						5,809
Total liabilities	103,798						104,420
Equity
Total equity	16,695						14,614
Total liabilities and equity	$	120,493					$	119,034
Interest rate spread(4)					13.86	%					13.64	%
Net interest income			$	4,464					$	4,405
Net interest margin(5)					14.74	%					14.55	%

(1)Average yields/rates are based on annualized total interest income/expense divided by average balances.

(2)Includes average restricted cash balances of $690 million and $109 million for the three months ended March 31, 2025 and 2024, respectively.

(3)Interest income on loan receivables includes fees on loans, which primarily consist of late fees on our credit products, of $588 million and $652 million for the three months ended March 31, 2025 and 2024, respectively.

(4)Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.

(5)Net interest margin represents annualized net interest income divided by average total interest-earning assets.

For a summary description of the composition of our key line items included in our Statements of Earnings, see Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K.

Interest Income

Interest income was flat for the three months ended March 31, 2025, reflecting the trend in interest and fees on loans, as the impacts of our product, pricing and policy changes were offset by a combination of lower benchmark rates and lower late fee incidence, as well as lower interest income from our liquidity portfolio.

Average interest-earning assets


Three months ended March 31 ($ in millions)	2025		%		2024		%
Loan receivables, including held for sale	$	101,021	82.3	%	$	100,957	82.9	%
Liquidity portfolio and other	21,770		17.7	%	20,837		17.1	%
Total average interest-earning assets	$	122,791	100.0	%	$	121,794	100.0	%

Average loan receivables, including held for sale, was flat for the three months ended March 31, 2025, primarily driven by the impact of the Ally Lending acquisition, offset by lower purchase volume. Purchase volume decreased by 3.9% for the three months ended March 31, 2025, primarily reflecting lower consumer spend as well as the impact of credit actions.

Yield on average interest-earning assets

The yield on average interest-earning assets decreased for the three months ended March 31, 2025 primarily due to a lower yield on our liquidity portfolio, partially offset by an increase in the yield on average loan receivables. The loan receivable yield increased 24 basis points for the three months ended March 31, 2025 to 21.33%, driven by the impacts of our product, pricing and policy changes, partially offset by lower benchmark rates and lower late fee incidence.

Interest Expense

Interest expense decreased by $77 million to $1.1 billion, for the three months ended March 31, 2025, primarily due to lower benchmark rates. Our cost of funds decreased to 4.48% for the three months ended March 31, 2025, compared to 4.74% for the three months ended March 31, 2024.

Average interest-bearing liabilities


Three months ended March 31 ($ in millions)	2025		%		2024		%
Interest-bearing deposit accounts	$	82,370	83.7	%	$	82,598	83.8	%
Borrowings of consolidated securitization entities	8,191		8.3	%	7,383		7.5	%
Senior and subordinated unsecured notes	7,850		8.0	%	8,630		8.7	%

Total average interest-bearing liabilities	$	98,411	100.0	%	$	98,611	100.0	%

Net Interest Income

Net interest income increased by $59 million, or 1.3%, for the three months ended March 31, 2025, resulting from the changes in interest income and interest expense discussed above.

Retailer Share Arrangements

Retailer share arrangements increased by $131 million, or 17.1%, for the three months ended March 31, 2025, reflecting program performance which includes the impact of our product, pricing and policy changes.

Provision for Credit Losses

Provision for credit losses decreased by $393 million, or 20.9%, for the three months ended March 31, 2025, primarily driven by a reserve release of $97 million versus a reserve build of $299 million in the prior year which included a $190 million reserve build related to the Ally Lending acquisition. The net charge-off rate for the three months ended March 31, 2025 increased by 7 basis points to 6.38%, as compared to the prior year period.

Other Income


	Three months ended March 31,
($ in millions)	2025		2024
Interchange revenue	$	238	$	241
Protection product revenue	147		141
Loyalty programs	(311)		(319)
Other	75		1,094
Total other income	$	149	$	1,157

Other income decreased by $1.0 billion to $149 million for the three months ended March 31, 2025, primarily driven by a $1.1 billion gain on sale related to Pets Best in the prior year, partially offset by the impact of our product, pricing and policy change related fees. The pre-tax gain amount of $1.1 billion was included within the Other component of Other Income in our Condensed Consolidated Statements of Earnings.

Other Expense


	Three months ended March 31,
($ in millions)	2025		2024
Employee costs	$	506	$	496
Professional fees	217		220
Marketing and business development	116		125
Information processing	219		186
Other	185		179
Total other expense	$	1,243	$	1,206

Other expense increased by $37 million, or 3.1%, for the three months ended March 31, 2025.

The increase in the three months ended March 31, 2025 was primarily driven by costs related to technology investments in information processing, and also included the impacts of a charitable contribution in other and a restructuring charge related to our Ally Lending business in employee costs.

Provision for Income Taxes


	Three months ended March 31,
($ in millions)	2025			2024
Effective tax rate	23.1		%	24.3		%
Provision for income taxes	$	227		$	415

The effective tax rate for the three months ended March 31, 2025 decreased compared to the same period in the prior year primarily due to an increase in tax benefits from stock-based compensation in the current period combined with a reduction in pretax income. The effective tax rate differs from the applicable U.S. federal statutory tax rate primarily due to state income taxes.

Platform Analysis

As discussed above under “—Our Sales Platforms,” we offer our credit products primarily through five sales platforms (Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle). The following is a discussion of certain supplemental information for the three months ended March 31, 2025, for each of our five sales platforms and Corp, Other.

Home & Auto


	Three months ended March 31,
($ in millions)	2025		2024
Purchase volume	$	9,567	$	10,512
Period-end loan receivables	$	30,460	$	32,615
Average loan receivables, including held for sale	$	31,018	$	31,865
Average active accounts (in thousands)	18,030		18,969

Interest and fees on loans	$	1,413	$	1,382
Other income	$	57	$	33

Home & Auto interest and fees on loans increased by $31 million, or 2.2%, for the three months ended March 31, 2025, primarily driven by higher loan receivables yield and the impacts of the Ally Lending acquisition in March 2024, partially offset by lower average loan receivables. The increase in loan receivables yield reflects the impact of product, pricing and policy changes, partially offset by lower late fee incidence. Purchase volume decreased 9.0% for the three months ended March 31, 2025, driven by a combination of lower consumer traffic and the impact of credit actions.

Other income increased by $24 million, or 72.7%, for the three months ended March 31, 2025 was primarily due to the impact of product, pricing and policy change related fees and lower loyalty costs.

Digital


	Three months ended March 31,
($ in millions)	2025		2024
Purchase volume	$	12,479	$	12,628
Period-end loan receivables	$	27,765	$	27,734
Average loan receivables, including held for sale	$	28,216	$	28,081
Average active accounts (in thousands)	20,711		21,349

Interest and fees on loans	$	1,544	$	1,567
Other income	$	9	$	6

Digital interest and fees on loans decreased by $23 million, or 1.5%, for the three months ended March 31, 2025, respectively, primarily driven by lower loan receivables yield, reflecting lower benchmark rates and lower late fee incidence, partially offset by the impact of product, pricing and policy changes. Purchase volume decreased by 1.2% for the three months ended March 31, 2025, as growth in consumer spend per account was more than offset by fewer active accounts, reflecting a more selective acquisition strategy. Average active accounts decreased by 3.0% for the three months ended March 31, 2025.

Diversified & Value


	Three months ended March 31,
($ in millions)	2025		2024
Purchase volume	$	13,732	$	14,023
Period-end loan receivables	$	19,436	$	19,559
Average loan receivables, including held for sale	$	19,670	$	19,593
Average active accounts (in thousands)	20,114		21,032

Interest and fees on loans	$	1,178	$	1,214
Other income	$	—	$	(17)

Diversified & Value interest and fees on loans decreased by $36 million, or 3.0%, for the three months ended March 31, 2025, primarily driven by lower loan receivables yield, reflecting lower benchmark rates and lower late fee incidence, partially offset by the impact of product, pricing and policy changes. Purchase volume decreased by 2.1% for the three months ended March 31, 2025 as growth in consumer spend per account was more than offset by fewer active accounts, primarily reflecting lower consumer traffic and the impact of credit actions. Average active accounts decreased by 4.4% for the three months ended March 31, 2025.

Health & Wellness


	Three months ended March 31,
($ in millions)	2025		2024
Purchase volume	$	3,774	$	3,980
Period-end loan receivables	$	15,193	$	15,065
Average loan receivables, including held for sale	$	15,280	$	14,697
Average active accounts (in thousands)	7,776		7,611

Interest and fees on loans	$	914	$	869
Other income	$	75	$	66

Health & Wellness interest and fees on loans increased by $45 million, or 5.2%, for the three months ended March 31, 2025, primarily driven by growth in average loan receivables and higher loan receivables yield, reflecting the impact of product, pricing and policy changes, partially offset by higher reversals. The growth in average loan receivables includes the impact from the Ally Lending acquisition in March 2024. Purchase volume decreased 5.2%, for the three months ended March 31, 2025, reflecting lower spend in industries such as Dental, Cosmetic and Vision, combined with the impact of credit actions, partially offset by growth in Pet and Audiology. Average active accounts increased 2.2% for the three months ended March 31, 2025.

Other income increased by $9 million, or 13.6%, for the three months ended March 31, 2025, primarily due lower loyalty costs and the impact of product, pricing, and policy change related fees, partially offset by lower commission fees following the Pets Best disposition.

Lifestyle


	Three months ended March 31,
($ in millions)	2025		2024
Purchase volume	$	1,168	$	1,244
Period-end loan receivables	$	6,636	$	6,604
Average loan receivables, including held for sale	$	6,716	$	6,631
Average active accounts (in thousands)	2,651		2,642

Interest and fees on loans	$	261	$	255
Other income	$	10	$	8

Lifestyle interest and fees on loans increased by $6 million, or 2.4%, for the three months ended March 31, 2025, primarily driven by higher loan receivables yield, reflecting the impact of product, pricing and policy changes partially offset by lower benchmark rates, and growth in average loan receivables. Purchase volume decreased by 6.1% for the three months ended March 31, 2025, driven by lower spend in Outdoor and Specialty, as consumers continued to manage discretionary spend, and also includes the impact of credit actions.

Corp, Other


	Three months ended March 31,
($ in millions)	2025		2024
Purchase volume	$	—	$	—
Period-end loan receivables	$	118	$	156
Average loan receivables, including held for sale	$	121	$	90
Average active accounts (in thousands)	33		64

Interest and fees on loans	$	2	$	6
Other income	$	(2)	$	1,061

Other income for the three months ended March 31, 2024 in Corp, Other primarily included the gain on sale related to the Pets Best disposition of $1.1 billion.

Loan Receivables

____________________________________________________________________________________________

Loan receivables are our largest category of assets and represent our primary source of revenue. The following discussion provides supplemental information regarding our loan receivables portfolio. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies and Note 5. Loan Receivables and Allowance for Credit Losses to our condensed consolidated financial statements for additional information related to our loan receivables.

The following table sets forth the composition of our loan receivables portfolio by product type at the dates indicated.


($ in millions)	At March 31, 2025		%		At December 31, 2024		%
Loan receivables
Credit cards	$	91,909	92.2	%	$	96,818	92.5	%
Consumer installment loans	5,736		5.8		5,971		5.7
Commercial credit products	1,859		1.9		1,826		1.7
Other	104		0.1		106		0.1
Total loan receivables	$	99,608	100.0	%	$	104,721	100.0	%

Loan receivables decreased 4.9% to $99.6 billion at March 31, 2025 compared to $104.7 billion at December 31, 2024, primarily driven by the seasonality of our business and a reduction in purchase volume.

Loan receivables at March 31, 2025 decreased 2.1% compared to $101.7 billion at March 31, 2024 driven by lower purchase volume.

Our loan receivables portfolio had the following geographic concentration at March 31, 2025.


($ in millions)	Loan Receivables Outstanding		% of Total Loan Receivables Outstanding
State
Texas	$	11,010	11.1	%
California	$	10,275	10.3	%
Florida	$	9,361	9.4	%
New York	$	4,685	4.7	%
North Carolina	$	4,196	4.2	%

Delinquencies

Over-30 day loan delinquencies as a percentage of period-end loan receivables decreased to 4.52% at March 31, 2025 from 4.74% at March 31, 2024, and decreased from 4.70% at December 31, 2024. These decreases include the impact of the credit actions we have previously taken across our portfolio.

Net Charge-Offs

Net charge-offs consist of the unpaid principal balance of loans held for investment that we determine are uncollectible, net of recovered amounts. We exclude accrued and unpaid finance charges and fees and third-party fraud losses from charge-offs. Charged-off and recovered finance charges and fees are included in interest and fees on loans while third-party fraud losses are included in Other expense. Charge-offs are recorded as a reduction to the allowance for credit losses and subsequent recoveries of previously charged-off amounts are credited to the allowance for credit losses. Costs incurred to recover charged-off loans are recorded as collection expense and included in Other expense in our Condensed Consolidated Statements of Earnings.

The table below sets forth the net charge-offs and ratio of annualized net charge-offs to average loan receivables, including held for sale, (“net charge-off rate”) for the periods indicated.


	Three months ended March 31,
	2025				2024
($ in millions)	Amount		Rate		Amount		Rate
Credit cards	$	1,462	6.36	%	$	1,470	6.28	%
Consumer installment loans	93		6.47	%	82		6.97	%
Commercial credit products	33		7.26	%	33		7.07	%
Other	—		—	%	—		—	%
Total net charge-offs	$	1,588	6.38	%	$	1,585	6.31	%

Allowance for Credit Losses

The allowance for credit losses totaled $10.8 billion at March 31, 2025, compared to $10.9 billion at December 31, 2024, respectively, and $10.9 billion at March 31, 2024, and reflects our estimate of expected credit losses for the life of the loan receivables on our Condensed Consolidated Statements of Financial Position. Our allowance for credit losses as a percentage of total period end loan receivables increased to 10.87% at March 31, 2025, from 10.44% at December 31, 2024 and increased from 10.72% at March 31, 2024.

The decrease in allowance for credit losses compared to December 31, 2024 and March 31, 2024 primarily reflects the decrease in both loan receivables and delinquent balances as a percentage of loan receivables, as compared to the prior year period, as well as expectations of the macroeconomic environment. See Note 5. Loan Receivables and Allowance for Credit Losses to our condensed consolidated financial statements for additional information.

Funding, Liquidity and Capital Resources

____________________________________________________________________________________________

We maintain a strong focus on liquidity and capital. Our funding, liquidity and capital policies are designed to ensure that our business has the liquidity and capital resources to support our daily operations, our business growth, our credit ratings and our regulatory and policy requirements, in a cost effective and prudent manner through expected and unexpected market environments.

Funding Sources

Our primary funding sources include cash from operations, deposits (direct and brokered deposits), securitized financings and senior and subordinated unsecured notes.

The following table summarizes information concerning our funding sources during the periods indicated:


	2025						2024
Three months ended March 31 ($ in millions)	Average Balance		%		Average Rate		Average Balance		%		Average Rate
Deposits(1)	$	82,370	83.7	%	4.3	%	$	82,598	83.8	%	4.6	%
Securitized financings	8,191		8.3		5.1	%	7,383		7.5		5.7	%
Senior and subordinated unsecured notes	7,850		8.0		5.2	%	8,630		8.7		4.8	%

Total	$	98,411	100.0	%	4.5	%	$	98,611	100.0	%	4.7	%

(1)Excludes $418 million and $390 million average balance of non-interest-bearing deposits for the three months ended March 31, 2025 and 2024, respectively. Non-interest-bearing deposits comprise less than 10% of total deposits for the three months ended March 31, 2025 and 2024.

Deposits

We obtain deposits directly from retail, affinity relationships and commercial customers (“direct deposits”) or through third-party brokerage firms that offer our deposits to their customers (“brokered deposits”). At March 31, 2025, we had $74.0 billion in direct deposits and $9.4 billion in deposits originated through brokerage firms (including network deposit sweeps procured through a program arranger that channels brokerage account deposits to us). A key part of our liquidity plan and funding strategy is to continue to utilize our direct deposit base as a source of stable and diversified low-cost funding.

Our direct deposits are primarily from retail customers and include a range of FDIC-insured deposit products, including certificates of deposit, IRAs, money market accounts, savings accounts and affinity deposits.

Brokered deposits are primarily from retail customers of large brokerage firms. We have relationships with 10 brokers that offer our deposits through their networks. Our brokered deposits primarily consist of certificates of deposit that bear interest at a fixed rate. These deposits generally are not subject to early withdrawal.

Our ability to attract deposits is sensitive to, among other things, the interest rates we pay, and therefore, we bear funding risk if we fail to pay higher rates, or interest rate risk if we are required to pay higher rates, to retain existing deposits or attract new deposits. To mitigate these risks, our funding strategy includes a range of deposit products, and we seek to maintain access to multiple other funding sources, including securitized financings (including our undrawn committed and uncommitted capacity) and unsecured debt.

The following table summarizes certain information regarding our interest-bearing deposits by type (all of which constitute U.S. deposits) for the periods indicated:


Three months ended March 31 ($ in millions)	2025									2024
Average Balance			%			Average Rate			Average Balance			%			Average Rate
Direct deposits:
Certificates of deposit (including IRA certificates of deposit)	$	40,839		49.6	%		4.6	%		$	40,690		49.3	%		4.7	%
Savings, money market, and demand accounts	31,924			38.7			4.0	%		28,438			34.4			4.6	%
Brokered deposits	9,607			11.7			4.4	%		13,470			16.3			4.5	%
Total interest-bearing deposits	$	82,370		100.0	%		4.3	%		$	82,598		100.0	%		4.6	%

Our deposit liabilities provide funding with maturities ranging from one day to ten years. At March 31, 2025, the weighted average maturity of our interest-bearing time deposits was one year. See Note 8. Deposits to our condensed consolidated financial statements for more information on the maturities of our time deposits.

The standard FDIC deposit insurance amount is $250,000 per depositor, for each account ownership category. Our estimate of the uninsured portion of total deposit balances, excluding any intercompany balance, at March 31, 2025 was $6.4 billion.

The following table summarizes the portion of uninsured deposits that are certificates of deposit by contractual maturity at March 31, 2025.


($ in millions)			3 Months or Less						Over 3 Months but within 6 Months						Over 6 Months but within 12 Months						Over 12 Months						Total
Certificates of deposit (including IRA certificates of deposit)			$	1,282					$	913					$	818					$	801					$	3,814

Securitized Financings

We access the asset-backed securitization market using the Synchrony Card Issuance Trust (“SYNIT”) through which we may issue asset-backed securities through both public transactions and private transactions funded by financial institutions and commercial paper conduits. In addition, we issue asset-backed securities in private transactions through the Synchrony Credit Card Master Note Trust (“SYNCT”) and the Synchrony Sales Finance Master Trust (“SFT”).

The following table summarizes expected contractual maturities of the investors’ interests in securitized financings, excluding debt premiums, discounts and issuance costs at March 31, 2025.


($ in millions)	Less Than One Year		One Year Through Three Years		Four Years Through Five Years		After Five Years		Total
Scheduled maturities of borrowings—owed to securitization investors:
SYNCT	$	550	$	1,100	$	—	$	—	$	1,650
SFT	—		1,275		—		—		1,275
SYNIT(1)	1,675		4,000		—		—		5,675
Total borrowings—owed to securitization investors	$	2,225	$	6,375	$	—	$	—	$	8,600

(1)Excludes any subordinated classes of SYNIT notes that we owned at March 31, 2025.

We retain exposure to the performance of trust assets through: (i) in the case of SYNCT, SFT and SYNIT, subordinated retained interests in the loan receivables transferred to the trust in excess of the principal amount of the notes for a given series that provide credit enhancement for a particular series, as well as a pari passu seller’s interest in each trust and (ii) in the case of SYNIT, any subordinated classes of notes that we own.

All of our securitized financings include early repayment triggers, referred to as early amortization events, including events related to material breaches of representations, warranties or covenants, inability or failure of the Bank to transfer loan receivables to the trusts as required under the securitization documents, failure to make required payments or deposits pursuant to the securitization documents, and certain insolvency-related events with respect to the related securitization depositor, Synchrony (solely with respect to SYNCT) or the Bank. In addition, an early amortization event will occur with respect to a series if the excess spread as it relates to a particular series or for the trust, as applicable, falls below zero. Following an early amortization event, principal collections on the loan receivables in the applicable trust are applied to repay principal of the trust's asset-backed securities rather than being available on a revolving basis to fund the origination activities of our business. The occurrence of an early amortization event also would limit or terminate our ability to issue future series out of the trust in which the early amortization event occurred. No early amortization event has occurred with respect to any of the securitized financings in SYNCT, SFT or SYNIT.

The following table summarizes for each of our trusts the three-month rolling average excess spread at March 31, 2025.


	Note Principal Balance ($ in millions)		# of Series Outstanding	Three-Month Rolling Average Excess Spread(1)
SYNCT	$	1,650	3	~ 15.3% to 15.9%
SFT	$	1,275	5	12.8	%
SYNIT	$	5,675	1	15.2	%

(1)Represents the excess spread (generally calculated as interest income collected from the applicable pool of loan receivables less applicable net charge-offs, interest expense and servicing costs, divided by the aggregate principal amount of loan receivables in the applicable pool) for SFT or, in the case of SYNCT, a range of the excess spreads relating to the particular series issued within such trust or, in the case of SYNIT, the excess spread relating to the one outstanding series issued within such trust, in all cases omitting any series that have not been outstanding for at least three full monthly periods and calculated in accordance with the applicable trust or series documentation, for the three securitization monthly periods ended March 31, 2025.

Senior and Subordinated Unsecured Notes

The following table provides a summary of our outstanding senior and subordinated unsecured notes at March 31, 2025, which includes $800 million of senior unsecured notes issued by Synchrony Financial in March 2025.


Issuance Date	Interest Rate(1)	Maturity	Principal Amount Outstanding(2)
($ in millions)
Fixed rate senior unsecured notes:
Synchrony Financial
July 2015	4.500%	July 2025	1,000
August 2016	3.700%	August 2026	500
December 2017	3.950%	December 2027	1,000
March 2019	5.150%	March 2029	650
October 2021	2.875%	October 2031	750
June 2022	4.875%	June 2025	750
Synchrony Bank
August 2022	5.400%	August 2025	900
August 2022	5.625%	August 2027	600

Fixed to floating rate senior unsecured notes:
Synchrony Financial
August 2024	5.935%(3)	August 2030	750
March 2025	5.450%(4)	March 2031	800

Fixed rate subordinated unsecured notes:
Synchrony Financial
February 2023	7.250%	February 2033	750
Total fixed rate and fixed to floating rate senior and subordinated unsecured notes			$	8,450

(1)Weighted average interest rate of all senior and subordinated unsecured notes at March 31, 2025 was 4.96%.

(2)The amounts shown exclude unamortized debt discounts, premiums and issuance costs.

(3)Interest rate fixed through August 1, 2029; resets August 2, 2029 to floating rate based on compounded Secured Overnight Financing Rate ("SOFR") plus 213 basis points.

(4)Interest rate fixed through March 6, 2030; resets March 7, 2030 to floating rate based on compounded Secured Overnight Financing Rate ("SOFR") plus 168 basis points.

Short-Term Borrowings

Except as described above, there were no material short-term borrowings for the periods presented.

Covenants

The indentures pursuant to which our senior and subordinated unsecured notes have been issued include various covenants. If we do not satisfy any of these covenants, the maturity of amounts outstanding thereunder may be accelerated and become payable. We were in compliance with all of these covenants at March 31, 2025.

At March 31, 2025, we were not in default under any of our credit facilities.

Credit Ratings

Our borrowing costs and capacity in certain funding markets, including securitizations and senior and subordinated debt, may be affected by the credit ratings of the Company, the Bank and the ratings of our asset-backed securities.

The table below reflects our current credit ratings and outlooks:


	S&P	Fitch Ratings
Synchrony Financial
Senior unsecured debt	BBB-	BBB
Subordinated unsecured debt	BB+	BBB-
Preferred stock	BB-	BB-
Outlook for Synchrony Financial	Stable	Stable
Synchrony Bank
Senior unsecured debt	BBB	BBB
Outlook for Synchrony Bank	Stable	Stable

In addition, certain of the asset-backed securities issued by SYNIT are rated by Fitch, S&P and/or Moody’s. A credit rating is not a recommendation to buy, sell or hold securities, may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. Downgrades in these credit ratings could materially increase the cost of our funding from, and restrict our access to, the capital markets.

Liquidity

____________________________________________________________________________________________

We seek to ensure that we have adequate liquidity to sustain business operations, fund asset growth, satisfy debt obligations and to meet regulatory expectations under normal and stress conditions.

We maintain policies outlining the overall framework and general principles for managing liquidity risk across our business, which is the responsibility of our Asset and Liability Management Committee, a management committee under the oversight of the Risk Committee of our Board of Directors. We employ a variety of metrics to monitor and manage liquidity. We perform regular liquidity stress testing and contingency planning as part of our liquidity management process. We evaluate a range of stress scenarios including Company specific and systemic events that could impact funding sources and our ability to meet liquidity needs.

We maintain a liquidity portfolio, which at March 31, 2025 had $23.8 billion of liquid assets, primarily consisting of cash and equivalents, less cash in transit which is not considered to be liquid, compared to $17.2 billion of liquid assets at December 31, 2024. The increase in liquid assets was primarily due to deposit growth, issuance of both senior unsecured debt and securitized debt, as well as the seasonality of our business. We believe our liquidity position at March 31, 2025 remains strong as we continue to operate in a period of uncertain economic conditions and we will continue to closely monitor our liquidity as economic conditions change.

As a general matter, investments included in our liquidity portfolio are expected to be highly liquid, giving us the ability to readily convert them to cash. The level and composition of our liquidity portfolio may fluctuate based upon the level of expected maturities of our funding sources as well as operational requirements and market conditions.

We also have access to several additional sources of liquidity beyond our liquidity portfolio. At March 31, 2025, we had an aggregate of $11.5 billion of available borrowing capacity through the Federal Reserve’s discount window. In addition, we had $2.6 billion of undrawn capacity on our securitized financings, subject to customary borrowing conditions, from private lenders under our securitization programs, of which $2.1 billion was committed and $450 million was uncommitted, as well as $500 million of undrawn committed capacity under our unsecured revolving credit facility with private lenders. We also have other unencumbered assets in the Bank available to be used to generate additional liquidity through secured borrowings or asset sales or to be pledged to the Federal Reserve Board for credit at the discount window.

We rely significantly on dividends and other distributions and payments from the Bank for liquidity; however, bank regulations, contractual restrictions and other factors limit the amount of dividends and other distributions and payments that the Bank may pay to us. For a discussion of regulatory restrictions related to the Bank’s ability to pay dividends, see “Regulation—Risk Factors Relating to Regulation—We are subject to restrictions that limit our ability to pay dividends and repurchase our common stock; the Bank is subject to restrictions that limit its ability to pay dividends to us, which could limit our ability to pay dividends, repurchase our common stock or make payments on our indebtedness,” “Regulation—Regulation Relating to Our Business—Savings Association Regulation—Dividends and Stock Repurchases” and —Liquidity," and Regulation—Savings and Loan Holding Company Regulation—Liquidity" in our 2024 Form 10-K.

Capital

____________________________________________________________________________________________

Our primary sources of capital have been earnings generated by our business and existing equity capital. We seek to manage capital to a level and composition sufficient to support the risks of our business, meet regulatory requirements, adhere to rating agency targets and support future business growth. The level, composition and utilization of capital are influenced by changes in the economic environment, strategic initiatives and legislative and regulatory developments. Within these constraints, we are focused on deploying capital in a manner that will provide attractive returns to our stockholders.

We are subject to the Federal Reserve Board's formal capital plan submission requirements and submitted our 2025 capital plan to the Federal Reserve Board. We are also now subject to supervisory stress tests on a biennial basis, in even calendar years, and currently expect that the 2026 supervisory stress test is the first stress test in which we will be required to participate.

Dividend and Share Repurchases


Common Stock Cash Dividends Declared	Month of Payment	Amount per Common Share		Amount
Three months ended ($ in millions, except per share data)
March 31, 2025	February 2025	$	0.25	$	97


Total dividends declared		$	0.25	$	97


		Series A				Series B
Preferred Stock Cash Dividends Declared	Month of Payment	Amount per Preferred Share		Amount		Amount per Preferred Share		Amount
Three months ended ($ in millions, except per share data)
March 31, 2025	February 2025	$	14.06	$	11	$	20.63	$	10


Total dividends declared		$	14.06	$	11	$	20.63	$	10

The declaration and payment of future dividends to holders of our common and preferred stock will be at the discretion of the Board and will depend on many factors. For a discussion of regulatory and other restrictions on our ability to pay dividends and repurchase stock, see “Regulation—Risk Factors Relating to Regulation—We are subject to restrictions that limit our ability to pay dividends and repurchase our common stock; the Bank is subject to restrictions that limit its ability to pay dividends to us, which could limit our ability to pay dividends, repurchase our common stock or make payments on our indebtedness” in our 2024 Form 10-K.


Common Shares Repurchased Under Publicly Announced Programs	Total Number of Shares Purchased	Dollar Value of Shares Purchased
Three months ended ($ and shares in millions)
March 31, 2025	9.8	$	600


Total	9.8	$	600

During the three months ended March 31, 2025, we repurchased $600 million of common stock as part of our share repurchase program. At March 31, 2025, we completed our prior share repurchase program, and in April 2025, we announced that the Board of Directors approved an incremental share repurchase program of up to $2.5 billion through June 30, 2026 (the "2025 plan"). Repurchases under this program are subject to market conditions and other factors, including legal and regulatory restrictions and required approvals, if any. Following this approval, the total amount of share repurchase authorization through June 30, 2026 is now $2.5 billion.

Regulatory Capital Requirements - Synchrony Financial

As a savings and loan holding company, we are required to maintain minimum capital ratios, under the applicable U.S. Basel III capital rules. For more information, see “Regulation—Savings and Loan Holding Company Regulation” in our 2024 Form 10-K.

For Synchrony Financial to be a well-capitalized savings and loan holding company, Synchrony 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. At March 31, 2025, Synchrony Financial met all the requirements to be deemed well-capitalized.

The following table sets forth the composition of our capital ratios for the Company calculated under the Basel III Standardized Approach rules at March 31, 2025 and December 31, 2024, respectively.


	Basel III
	At March 31, 2025				At December 31, 2024
($ in millions)	Amount		Ratio(1)		Amount		Ratio(1)
Total risk-based capital	$	16,798	16.5	%	$	17,407	16.5	%
Tier 1 risk-based capital	$	14,668	14.4	%	$	15,239	14.5	%
Tier 1 leverage	$	14,668	12.4	%	$	15,239	12.9	%
Common equity Tier 1 capital	$	13,446	13.2	%	$	14,017	13.3	%
Risk-weighted assets	$	101,625			$	105,417

(1)Tier 1 leverage ratio represents total Tier 1 capital as a percentage of total average assets, after certain adjustments. All other ratios presented above represent the applicable capital measure as a percentage of risk-weighted assets.

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 our regulatory capital. The effects were phased-in over a three-year transitional period through 2024, collectively the “CECL regulatory capital transition adjustment”. The effects of CECL on our regulatory capital are now fully phased-in at March 31, 2025. For more information, see “Capital—Regulatory Capital Requirements - Synchrony Financial” in our 2024 Form 10-K.

Capital amounts and ratios in the above table reflect the applicable CECL regulatory capital transition adjustment at December 31, 2024. The decrease in our common equity Tier 1 capital ratio compared to December 31, 2024 was primarily due to the final phase-in of the CECL regulatory capital transition adjustment, partially offset by a reduction in risk-weighted assets related to the decrease in loan receivables during the three months ended March 31, 2025.

Regulatory Capital Requirements - Synchrony Bank

At March 31, 2025 and December 31, 2024, the Bank met all applicable requirements to be deemed well-capitalized pursuant to OCC regulations and for purposes of the Federal Deposit Insurance Act. The following table sets forth the composition of the Bank’s capital ratios calculated under the Basel III Standardized Approach rules at March 31, 2025 and December 31, 2024, and also reflects the applicable CECL regulatory capital transition adjustment at December 31, 2024.


	At March 31, 2025				At December 31, 2024				Minimum to be Well-Capitalized under Prompt Corrective Action Provisions
($ in millions)	Amount		Ratio		Amount		Ratio		Ratio
Total risk-based capital	$	15,627	16.2	%	$	15,916	15.8	%	10.0%
Tier 1 risk-based capital	$	13,554	14.0	%	$	13,805	13.7	%	8.0%
Tier 1 leverage	$	13,554	12.0	%	$	13,805	12.4	%	5.0%
Common equity Tier 1 capital	$	13,554	14.0	%	$	13,805	13.7	%	6.5%

Failure to meet minimum capital requirements can result in the initiation of 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 business, results of operations and financial condition. See “Regulation—Risk Factors Relating to Regulation—Failure by Synchrony and the Bank to meet applicable capital adequacy and liquidity requirements could have a material adverse effect on us” in our 2024 Form 10-K.

Off-Balance Sheet Arrangements and Unfunded Lending Commitments

____________________________________________________________________________________________

We do not have any material off-balance sheet arrangements, including guarantees of third-party obligations. Guarantees are contracts or indemnification agreements that contingently require us to make a guaranteed payment or perform an obligation to a third-party based on certain trigger events. At March 31, 2025, we had not recorded any contingent liabilities in our Condensed Consolidated Statements of Financial Position related to any guarantees. See Note 6 - Variable Interest Entities to our condensed consolidated financial statements for more information on our investment commitments for unconsolidated variable interest entities.

We extend credit, primarily arising from agreements with customers for unused lines of credit on our credit cards, in the ordinary course of business. Each unused credit card line is unconditionally cancellable by us. See Note 5 - Loan Receivables and Allowance for Credit Losses to our condensed consolidated financial statements for more information on our unfunded lending commitments.

Critical Accounting Estimates

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In preparing our condensed consolidated financial statements, we have identified certain accounting estimates and assumptions that we consider to be the most critical to an understanding of our financial statements because they involve significant judgments and uncertainties. The critical accounting estimates we have identified relate to allowance for credit losses and fair value measurements. These estimates reflect our best judgment about current, and for some estimates future, economic and market conditions and their effects based on information available as of the date of these financial statements. If these conditions change from those expected, it is reasonably possible that these judgments and estimates could change, which may result in incremental losses on loan receivables, or material changes to our Condensed Consolidated Statements of Financial Position, among other effects. See below and “Management's Discussion and Analysis—Critical Accounting Estimates” in our 2024 Form 10-K, for a detailed discussion of these critical accounting estimates.

Allowance for Credit Losses

Change in methodology for Allowance for Credit Losses

At March 31, 2025, our Allowance for Credit Losses reflects changes we made during the three months ended March 31, 2025 to our methodology related to the modeling of loss projections attributable to existing loan balances and the reversion to historical mean. Our updated loss forecasting methodology utilizes a statistical, account-level model that analyzes probability of default and exposure at default for our loan receivables, as compared to our prior methodology which utilized an enhanced migration analysis to estimate credit losses. Our reversion methodology, which continues to be applied over a 6-month period, also changed from the prior weighted approach used since the adoption of CECL to apply a straight-line methodology. These changes in methodology were made prospectively to enhance our expected credit loss estimation capabilities and did not have a material effect on our Allowance for Credit Losses at March 31, 2025.

For periods presented prior to March 31, 2025, the Allowance for Credit Losses reflects the methodology utilized prior to these changes. See our 2024 Form 10-K for additional information on the prior methodology for our Allowance for Credit Losses, and see below for additional information on the updated methodology reflected in the Allowance for Credit Losses at March 31, 2025.

Allowance for Credit Losses

Losses on loan receivables are estimated and recognized upon origination of the loan, based on expected credit losses for the life of the loan balance as of the period end date. Expected credit loss estimates involve modeling loss projections attributable to existing loan balances, considering historical experience, current conditions and future expectations for pools of loans with similar risk characteristics over the reasonable and supportable forecast period and considers historical loss information beyond the reasonable and supportable period.

We use a probability of default and exposure at default model to estimate the expected loan loss, which considers uncollectible principal, interest and fees reflected in the loan receivables, segmented into pools of loans with similar risk characteristics, such as retailer, performance and credit attributes, as well as individual credit characteristics for each account. Our probability of default estimates the likelihood an account will be written off and the exposure at default estimates the balance of an account at the time of write-off. The model considers a macroeconomic forecast, with unemployment and certain income measures as primary variables. We also perform a qualitative assessment in addition to model estimates and apply qualitative adjustments as necessary.

We evaluate our Allowance for Credit Losses quarterly. Our estimation process includes analysis of historical data, and there is a significant amount of judgment applied in selecting inputs and analyzing the results produced by the model to determine the Allowance for Credit Losses. Other data utilized in our estimate of expected losses, includes past performance, changes in underwriting policies, bankruptcy activity such as filings, loan volumes and amounts. We also evaluate portfolio risk management techniques applied to various accounts, historical behavior of different account vintages, account seasoning, economic conditions, recent trends in delinquencies and net charge-offs, account collection management including the impact of modifications made to borrowers experiencing financial difficulty, forecasting uncertainties, expectations about the future, and a qualitative assessment of the adequacy of the allowance for credit losses. Additionally, the estimate of expected credit losses includes expected recoveries of amounts previously charged-off and expected to be charged-off.

Key factors that impact the accuracy of our historical loss forecast estimates include the models and methodology utilized, credit strategy and trends, and consideration of material changes in our loan portfolio such as changes in growth and portfolio mix.

Our credit card loan receivables generally do not have a stated life. The life of a credit card loan receivable is dependent upon the allocation of payments received, as well as a variety of other factors, including the principal balance, promotional terms, interest charges and fees and overall consumer credit profile and usage pattern. We determine the expected credit losses for credit card loan receivables as of the measurement date by using an estimated probability of default and exposure at default model, and other historical analyses, which considers the payments attributable to the measurement date balance. To do so, we utilize an approach which considers total expected future payments and applies appropriate allocations to reduce those payments in order to estimate losses pertaining to measurement date loan receivables. Based on our payments analyses, we also ensure that expected future payments from an account do not exceed the measurement date balance.

The reasonable and supportable forecast period is determined primarily based upon an assessment of the current economic outlook, including our ability to use available data to accurately forecast losses over time. The reasonable and supportable forecast period used in our estimate of credit losses at March 31, 2025 was 12 months, consistent with the forecast period utilized since adoption of CECL. The Company reassesses the reasonable and supportable forecast period on a quarterly basis. Beyond the reasonable and supportable forecast period, we revert to historical loss information at the loan receivables segment level over a 6-month period on a straight-line basis and utilize historical loss information thereafter for the remaining life of the portfolio. The historical loss information is derived from a combination of recessionary and non-recessionary performance periods, weighted by the estimated time span of each period. Similar to the reasonable and supportable forecast period, we also reassess the reversion period and historical mean on a quarterly basis, considering any required adjustments for differences in underwriting standards, portfolio mix, and other relevant data shifts over time. The reversion period, similar to the reasonable and supportable forecast period, may change in the future depending on multiple factors such as forecasting methods, portfolio changes, and macroeconomic environment.

Further, when experience is not available for new portfolios, while we accumulate experience, we may utilize our experience with the most closely analogous products and segments in our portfolio. The underlying assumptions, estimates and assessments we use to provide for losses are updated periodically to reflect our view of current and forecasted conditions and are subject to the regulatory examination process, which can result in changes to our assumptions. Changes in such estimates can significantly affect the allowance and provision for credit losses. It is possible that we will experience credit losses that are different from our current estimates.

Regulation and Supervision

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Our business, including our relationships with our customers, is subject to regulation, supervision and examination under U.S. federal, state and foreign laws and regulations. These laws and regulations cover all aspects of our business, including lending and collection practices, treatment of our customers, safeguarding deposits, customer privacy and information security, capital structure, liquidity, dividends and other capital distributions, transactions with affiliates, and conduct and qualifications of personnel. Such laws and regulations directly and indirectly affect key drivers of our profitability, including, for example, capital and liquidity, product offerings, risk management, and costs of compliance.

As a savings and loan holding company and a financial holding company, Synchrony is subject to regulation, supervision and examination by the Federal Reserve Board. As a large provider of consumer financial services, we are also subject to regulation, supervision and examination by the CFPB.

The Bank is a federally chartered savings association. As such, the Bank is subject to regulation, supervision and examination by the OCC, which is its primary regulator, and by the CFPB. In addition, the Bank, as an insured depository institution, is supervised by the FDIC.

On October 24, 2023, the Federal Reserve, FDIC, and OCC issued a final rule revising their framework for evaluating banks’ records of community reinvestment under the Community Reinvestment Act (“CRA”). On March 28, 2025, these bank regulatory agencies announced their intent to issue a proposal to rescind the October 2023 final rule and reinstate the CRA framework that existed prior to the October 2023 final rule. The Bank received a rating of “Outstanding” in its most recent performance evaluation, which was conducted using the CRA framework that existed prior to the October 2023 final rule.

See “Regulation—Regulation Relating to Our Business” in our 2024 Form 10-K for additional information on regulations that apply to us, and “—Capital” above, for discussion of the impact of regulations and supervision on our capital and liquidity, including our ability to pay dividends and repurchase stock.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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		Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	Condensed Consolidated Statements of Earnings	35
	Condensed Consolidated Statements of Comprehensive Income	36
	Condensed Consolidated Statements of Financial Position	37
	Condensed Consolidated Statements of Changes in Equity	38
	Condensed Consolidated Statements of Cash Flows	39
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	Note 1. Business Description	40
	Note 2. Basis of Presentation and Summary Significant Accounting Policies	40
	Note 3. Acquisitions and Dispositions	43
	Note 4. Debt Securities	43
	Note 5. Loan Receivables and Allowance for Credit Losses	45
	Note 6. Variable Interest Entities	50
	Note 7. Intangible Assets	52
	Note 8. Deposits	52
	Note 9. Borrowings	54
	Note 10. Fair Value Measurements	55
	Note 11. Regulatory and Capital Adequacy	57
	Note 12. Earnings Per Share	59
	Note 13. Income Taxes	59
	Note 14. Segment Reporting	60
	Note 15. Legal Proceedings and Regulatory Matters	61

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