filings.toolsItem 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 and six months ended June 30, 2025, we financed $46.1 billion and $86.8 billion of purchase volume, respectively and had 68.1 million and 68.8 million average active accounts, respectively and at June 30, 2025, we had $99.8 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 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 June 30, 2025, we had $82.3 billion in deposits, which represented 84% 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 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 June 30, 2025.
| Promotional Offer | |||||||||||||||||||||||
| Credit Product | Standard Terms Only | Deferred Interest | Other Promotional | Total | |||||||||||||||||||
| Credit cards | 61.4 | % | 18.0 | % | 12.8 | % | 92.2 | % | |||||||||||||||
| Commercial credit products | 2.0 | — | — | 2.0 | |||||||||||||||||||
| Consumer installment loans | — | 0.2 | 5.5 | 5.7 | |||||||||||||||||||
| Other | 0.1 | — | — | 0.1 | |||||||||||||||||||
| Total | 63.5 | % | 18.2 | % | 18.3 | % | 100.0 | % |
Credit Cards
We offer the following principal types of credit cards:
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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.
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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 June 30, 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 and six months ended June 30, 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 have incorporated the review of these product, pricing and policy changes with our partners into our usual business practice of monitoring overall program performance, including assessing whether any adjustments to these changes are warranted. As a result of these reviews, we expect to make minor modifications to these changes in 2025.
Extended duration of our credit card program agreements.
In July 2025, we extended our program agreement with Amazon, one of our five largest programs based upon interest and fees on loans for the year ended December 31, 2024. Following the renewal of this program, the current expiration dates for program agreements with our five largest partners range from 2030 through 2035. In addition, during the six months ended June 30, 2025, we have added or renewed over 25 partners, including our program agreement with Amazon. As a result, a total of 22 of our 25 largest program agreements now have an expiration date in 2027 or beyond. These 22 program agreements represented, in the aggregate as a percentage of the total attributable to our 25 largest programs, 98% of our interest and fees on loans for the year ended December 31, 2024 and 97% of our loan receivables at December 31, 2024.
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. These fluctuations are generally most evident between the fourth quarter and the first quarter of the following year.
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.
Results of Operations
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Highlights for the Three and Six Months Ended June 30, 2025
Below are highlights of our performance for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, as applicable, except as otherwise noted.
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Net earnings increased to $967 million from $643 million and decreased to $1.7 billion from $1.9 billion for the three and six months ended June 30, 2025, respectively. The increase in the three months ended June 30, 2025 was primarily driven by a decrease in provision for credit losses, partially offset by higher retailer share arrangements. The decrease in the six months ended June 30, 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.
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Loan receivables decreased 2.5% to $99.8 billion at June 30, 2025 compared to $102.3 billion at June 30, 2024, primarily reflecting the impact of lower purchase volume and higher payment rates, as well as the reclassification of $0.2 billion of loan receivables to loan receivables held for sale.
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Net interest income increased 2.6% to $4.5 billion and 2.0% to $9.0 billion for the three and six months ended June 30, 2025, respectively, primarily driven by higher loan receivables yield and a reduction in interest expense. For the three and six months ended June 30, 2025, interest expense decreased 9.5% and 8.1%, respectively, primarily due to lower interest-bearing liabilities cost associated with lower benchmark rates. Interest and fees on loans increased 0.5% and 0.4% for the three and six months ended June 30, 2025, respectively, primarily reflecting the impact of our product, pricing and policy changes, partially offset by a combination of lower benchmark rates and lower late fee incidence.
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Retailer share arrangements increased 22.5% to $992 million and 19.9% to $1.9 billion for the three and six months ended June 30, 2025, respectively, primarily reflecting lower net charge-offs and the impact of our product, pricing and policy changes.
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Over-30 day loan delinquencies as a percentage of period-end loan receivables decreased 29 basis points to 4.18% at June 30, 2025 compared to June 30, 2024. The net charge-off rate decreased 72 basis points to 5.70% for the three and six months ended June 30, 2025.
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Provision for credit losses decreased by $545 million, or 32.2%, and $938 million, or 26.2%, for the three and six months ended June 30, 2025, respectively, primarily driven by reserve releases in the current year as compared to builds in the prior year, as well as lower net charge-offs. Our allowance coverage ratio (allowance for credit losses as a percentage of period-end loan receivables) decreased to 10.59% at June 30, 2025, as compared to 10.74% at June 30, 2024.
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Other income increased by $1 million to $118 million, and decreased by $1.0 billion to $267 million for the three and six months ended June 30, 2025, respectively. The increase in the three months ended June 30, 2025 was primarily driven by the impact of our product, pricing and policy change related fees in the current year period, partially offset by a gain of $51 million related to an exchange of Visa Class B-1 common stock in the prior year period. The decrease in the six months ended June 30, 2025 was 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.
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Other expense increased by $68 million, or 5.8%, and $105 million, or 4.4%, for the three and six months ended June 30, 2025, respectively. The increases in the three and six months ended June 30, 2025 were primarily driven by higher employee costs, partially offset by lower operational losses and late fee rule preparatory expenses in the prior year. The increase in the six months ended June 30, 2025 was also driven by costs related to technology investments.
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At June 30, 2025, deposits represented 84% of our total funding sources. Total deposits increased by 0.2% to $82.3 billion at June 30, 2025, compared to December 31, 2024.
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During the six months ended June 30, 2025, we declared and paid cash dividends totaling $42 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.
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During the six months ended June 30, 2025, we repurchased $1.1 billion of our outstanding common stock, and declared and paid cash dividends of $0.55 per share, or $211 million in the aggregate. 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. At June 30, 2025 we had a total share repurchase authorization of $2.0 billion remaining. For more information, see “Capital—Dividend and Share Repurchases.”
2025 Partner Agreements
During the six months ended June 30, 2025, and to date, we continued to expand and diversify our portfolio with the addition or renewal of more than 25 partners, which included the following:
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In our Home & Auto sales platform, we extended our program agreements with Ashley HomeStores, Inc., Discount Tire, Gardner White and Home Furnishings Association.
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In our Digital sales platform, we announced our new partnership with Sun Country Airlines and extended our program agreement with Amazon.
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In our Diversified & Value sales platform, we announced our new partnership with OnePay to become the exclusive issuer of a general purpose and private label credit card program at Walmart
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In our Health & Wellness sales platform, we expanded our network through our new partnership with Texas A&M University Veterinary Medical Teaching Hospital.
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In our Lifestyle sales platform, we extended our program agreement with American Eagle.
During the second quarter of 2025, we also entered into an agreement to sell loan receivables associated with a Home & Auto partner program agreement. The sale of the portfolio, which is subject to customary closing conditions, is expected to be completed in the fourth quarter of 2025.
Summary Earnings
The following table sets forth our results of operations for the periods indicated.
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Interest income | $ | 5,586 | $ | 5,582 | $ | 11,136 | $ | 11,150 | |||||||||||||||
| Interest expense | 1,065 | 1,177 | 2,151 | 2,340 | |||||||||||||||||||
| Net interest income | 4,521 | 4,405 | 8,985 | 8,810 | |||||||||||||||||||
| Retailer share arrangements | (992) | (810) | (1,887) | (1,574) | |||||||||||||||||||
| Provision for credit losses | 1,146 | 1,691 | 2,637 | 3,575 | |||||||||||||||||||
| Net interest income, after retailer share arrangements and provision for credit losses | 2,383 | 1,904 | 4,461 | 3,661 | |||||||||||||||||||
| Other income | 118 | 117 | 267 | 1,274 | |||||||||||||||||||
| Other expense | 1,245 | 1,177 | 2,488 | 2,383 | |||||||||||||||||||
| Earnings before provision for income taxes | 1,256 | 844 | 2,240 | 2,552 | |||||||||||||||||||
| Provision for income taxes | 289 | 201 | 516 | 616 | |||||||||||||||||||
| Net earnings | $ | 967 | $ | 643 | $ | 1,724 | $ | 1,936 | |||||||||||||||
| Net earnings available to common stockholders | $ | 946 | $ | 624 | $ | 1,682 | $ | 1,906 |
Other Financial and Statistical Data
The following table sets forth certain other financial and statistical data for the periods indicated.
| At and for the | At and for the | ||||||||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Financial Position Data (Average): | |||||||||||||||||||||||
| Loan receivables, including held for sale | $ | 99,236 | $ | 101,478 | $ | 100,123 | $ | 101,218 | |||||||||||||||
| Total assets | $ | 120,441 | $ | 119,864 | $ | 120,467 | $ | 119,450 | |||||||||||||||
| Deposits | $ | 82,426 | $ | 83,145 | $ | 82,606 | $ | 83,067 | |||||||||||||||
| Borrowings | $ | 16,195 | $ | 15,976 | $ | 16,119 | $ | 15,994 | |||||||||||||||
| Total equity | $ | 16,755 | $ | 15,522 | $ | 16,726 | $ | 15,067 | |||||||||||||||
| Selected Performance Metrics: | |||||||||||||||||||||||
| Purchase volume(1)(2) | $ | 46,084 | $ | 46,846 | $ | 86,804 | $ | 89,233 | |||||||||||||||
| Home & Auto | $ | 11,459 | $ | 12,350 | $ | 20,905 | $ | 22,741 | |||||||||||||||
| Digital | $ | 13,647 | $ | 13,403 | $ | 26,126 | $ | 26,031 | |||||||||||||||
| Diversified & Value | $ | 15,393 | $ | 15,333 | $ | 29,125 | $ | 29,356 | |||||||||||||||
| Health & Wellness | $ | 4,007 | $ | 4,089 | $ | 7,781 | $ | 8,069 | |||||||||||||||
| Lifestyle | $ | 1,432 | $ | 1,525 | $ | 2,600 | $ | 2,769 | |||||||||||||||
| Corp, Other | $ | 146 | $ | 146 | $ | 267 | $ | 267 | |||||||||||||||
| Average active accounts (in thousands)(2)(3) | 68,050 | 70,974 | 68,810 | 71,402 | |||||||||||||||||||
| Net interest margin(4) | 14.78 | % | 14.46 | % | 14.76 | % | 14.50 | % | |||||||||||||||
| Net charge-offs | $ | 1,411 | $ | 1,621 | $ | 2,999 | $ | 3,206 | |||||||||||||||
| Net charge-offs (annualized) as a % of average loan receivables, including held for sale | 5.70 | % | 6.42 | % | 6.04 | % | 6.37 | % | |||||||||||||||
| Allowance coverage ratio(5) | 10.59 | % | 10.74 | % | 10.59 | % | 10.74 | % | |||||||||||||||
| Return on assets(6) | 3.2 | % | 2.2 | % | 2.9 | % | 3.3 | % | |||||||||||||||
| Return on equity(7) | 23.1 | % | 16.7 | % | 20.8 | % | 25.8 | % | |||||||||||||||
| Equity to assets(8) | 13.91 | % | 12.95 | % | 13.88 | % | 12.61 | % | |||||||||||||||
| Other expense (annualized) as a % of average loan receivables, including held for sale | 5.03 | % | 4.66 | % | 5.01 | % | 4.73 | % | |||||||||||||||
| Efficiency ratio(9) | 34.1 | % | 31.7 | % | 33.8 | % | 28.0 | % | |||||||||||||||
| Effective income tax rate | 23.0 | % | 23.8 | % | 23.0 | % | 24.1 | % | |||||||||||||||
| Selected Period-End Data: | |||||||||||||||||||||||
| Loan receivables | $ | 99,776 | $ | 102,284 | $ | 99,776 | $ | 102,284 | |||||||||||||||
| Allowance for credit losses | $ | 10,564 | $ | 10,982 | $ | 10,564 | $ | 10,982 | |||||||||||||||
| 30+ days past due as a % of period-end loan receivables(10) | 4.18 | % | 4.47 | % | 4.18 | % | 4.47 | % | |||||||||||||||
| 90+ days past due as a % of period-end loan receivables(10) | 2.06 | % | 2.19 | % | 2.06 | % | 2.19 | % | |||||||||||||||
| Total active accounts (in thousands)(2)(3) | 68,186 | 70,991 | 68,186 | 70,991 |
(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 June 30 ($ 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) | $ | 20,699 | $ | 228 | 4.42 | % | $ | 18,337 | $ | 249 | 5.46 | % | |||||||||||||||||||||||||||||
| Securities available for sale | 2,774 | 30 | 4.34 | % | 2,731 | 32 | 4.71 | % | |||||||||||||||||||||||||||||||||
| Loan receivables, including held for sale(3): | |||||||||||||||||||||||||||||||||||||||||
| Credit cards | 91,460 | 5,076 | 22.26 | % | 93,267 | 5,013 | 21.62 | % | |||||||||||||||||||||||||||||||||
| Consumer installment loans | 5,692 | 207 | 14.59 | % | 6,085 | 243 | 16.06 | % | |||||||||||||||||||||||||||||||||
| Commercial credit products | 1,981 | 43 | 8.71 | % | 2,001 | 43 | 8.64 | % | |||||||||||||||||||||||||||||||||
| Other | 103 | 2 | 7.79 | % | 125 | 2 | 6.44 | % | |||||||||||||||||||||||||||||||||
| Total loan receivables, including held for sale | 99,236 | 5,328 | 21.54 | % | 101,478 | 5,301 | 21.01 | % | |||||||||||||||||||||||||||||||||
| Total interest-earning assets | 122,709 | 5,586 | 18.26 | % | 122,546 | 5,582 | 18.32 | % | |||||||||||||||||||||||||||||||||
| Non-interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 868 | 887 | |||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | (10,797) | (10,878) | |||||||||||||||||||||||||||||||||||||||
| Other assets | 7,661 | 7,309 | |||||||||||||||||||||||||||||||||||||||
| Total non-interest-earning assets | (2,268) | (2,682) | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 120,441 | $ | 119,864 | |||||||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposit accounts | $ | 82,014 | $ | 855 | 4.18 | % | $ | 82,749 | $ | 967 | 4.70 | % | |||||||||||||||||||||||||||||
| Borrowings of consolidated securitization entities | 7,926 | 104 | 5.26 | % | 7,858 | 110 | 5.63 | % | |||||||||||||||||||||||||||||||||
| Senior and subordinated unsecured notes | 8,269 | 106 | 5.14 | % | 8,118 | 100 | 4.95 | % | |||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 98,209 | 1,065 | 4.35 | % | 98,725 | 1,177 | 4.80 | % | |||||||||||||||||||||||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Non-interest-bearing deposit accounts | 412 | 396 | |||||||||||||||||||||||||||||||||||||||
| Other liabilities | 5,065 | 5,221 | |||||||||||||||||||||||||||||||||||||||
| Total non-interest-bearing liabilities | 5,477 | 5,617 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | 103,686 | 104,342 | |||||||||||||||||||||||||||||||||||||||
| Equity | |||||||||||||||||||||||||||||||||||||||||
| Total equity | 16,755 | 15,522 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 120,441 | $ | 119,864 | |||||||||||||||||||||||||||||||||||||
| Interest rate spread**(4)** | 13.91 | % | 13.53 | % | |||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 4,521 | $ | 4,405 | |||||||||||||||||||||||||||||||||||||
| Net interest margin**(5)** | 14.78 | % | 14.46 | % |
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| Six months ended June 30 ($ 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) | $ | 19,625 | $ | 431 | 4.43 | % | $ | 17,871 | $ | 485 | 5.46 | % | |||||||||||||||||||||||||||||
| Securities available for sale | 3,001 | 65 | 4.37 | % | 3,082 | 71 | 4.63 | % | |||||||||||||||||||||||||||||||||
| Loan receivables, including held for sale(3): | |||||||||||||||||||||||||||||||||||||||||
| Credit cards | 92,345 | 10,131 | 22.12 | % | 93,743 | 10,109 | 21.69 | % | |||||||||||||||||||||||||||||||||
| Consumer installment loans | 5,762 | 418 | 14.63 | % | 5,409 | 392 | 14.57 | % | |||||||||||||||||||||||||||||||||
| Commercial credit products | 1,912 | 88 | 9.28 | % | 1,939 | 88 | 9.13 | % | |||||||||||||||||||||||||||||||||
| Other | 104 | 3 | 5.82 | % | 127 | 5 | 7.92 | % | |||||||||||||||||||||||||||||||||
| Total loan receivables, including held for sale | 100,123 | 10,640 | 21.43 | % | 101,218 | 10,594 | 21.05 | % | |||||||||||||||||||||||||||||||||
| Total interest-earning assets | 122,749 | 11,136 | 18.29 | % | 122,171 | 11,150 | 18.35 | % | |||||||||||||||||||||||||||||||||
| Non-interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 868 | 915 | |||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | (10,866) | (10,777) | |||||||||||||||||||||||||||||||||||||||
| Other assets | 7,716 | 7,141 | |||||||||||||||||||||||||||||||||||||||
| Total non-interest-earning assets | (2,282) | (2,721) | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 120,467 | $ | 119,450 | |||||||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposit accounts | $ | 82,191 | $ | 1,737 | 4.26 | % | $ | 82,674 | $ | 1,921 | 4.67 | % | |||||||||||||||||||||||||||||
| Borrowings of consolidated securitization entities | 8,058 | 208 | 5.21 | % | 7,620 | 215 | 5.67 | % | |||||||||||||||||||||||||||||||||
| Senior and subordinated unsecured notes | 8,061 | 206 | 5.15 | % | 8,374 | 204 | 4.90 | % | |||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 98,310 | 2,151 | 4.41 | % | 98,668 | 2,340 | 4.77 | % | |||||||||||||||||||||||||||||||||
| Non-interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Non-interest-bearing deposit accounts | 415 | 393 | |||||||||||||||||||||||||||||||||||||||
| Other liabilities | 5,016 | 5,322 | |||||||||||||||||||||||||||||||||||||||
| Total non-interest-bearing liabilities | 5,431 | 5,715 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | 103,741 | 104,383 | |||||||||||||||||||||||||||||||||||||||
| Equity | |||||||||||||||||||||||||||||||||||||||||
| Total equity | 16,726 | 15,067 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 120,467 | $ | 119,450 | |||||||||||||||||||||||||||||||||||||
| Interest rate spread**(4)** | 13.88 | % | 13.58 | % | |||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 8,985 | $ | 8,810 | |||||||||||||||||||||||||||||||||||||
| Net interest margin**(5)** | 14.76 | % | 14.50 | % |
(1)Average yields/rates are based on annualized total interest income/expense divided by average balances.
(2)Includes average restricted cash balances of $642 million and $61 million for the three months ended June 30, 2025 and 2024, respectively, and $666 million and $85 million for the six months ended June 30, 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 $560 million and $609 million for the three months ended June 30, 2025 and 2024, respectively, and $1.1 billion and $1.3 billion for the six months ended June 30, 2025 and 2024, respectively.
(4)Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(5)Net interest margin represents annualized net interest income divided by average total interest-earning assets.
For a summary description of the composition of our key line items included in our Statements of Earnings, see Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K.
Interest Income
Interest income was flat for the three and six months ended June 30, 2025, reflecting higher interest and fees on loans, offset by lower interest income from our liquidity portfolio. The trend in interest and fees on loans reflects the impacts of our product, pricing and policy changes, offset by a combination of lower benchmark rates and lower late fee incidence, as well as a decrease in average loan receivables.
Average interest-earning assets
| Three months ended June 30 ($ in millions) | 2025 | % | 2024 | % | |||||||||||||||||||
| Loan receivables, including held for sale | $ | 99,236 | 80.9 | % | $ | 101,478 | 82.8 | % | |||||||||||||||
| Liquidity portfolio and other | 23,473 | 19.1 | % | 21,068 | 17.2 | % | |||||||||||||||||
| Total average interest-earning assets | $ | 122,709 | 100.0 | % | $ | 122,546 | 100.0 | % |
| Six months ended June 30 ($ in millions) | 2025 | % | 2024 | % | |||||||||||||||||||
| Loan receivables, including held for sale | $ | 100,123 | 81.6 | % | $ | 101,218 | 82.8 | % | |||||||||||||||
| Liquidity portfolio and other | 22,626 | 18.4 | % | 20,953 | 17.2 | % | |||||||||||||||||
| Total average interest-earning assets | $ | 122,749 | 100.0 | % | $ | 122,171 | 100.0 | % |
Average loan receivables, including held for sale, decreased 2.2% and 1.1% for the three and six months ended June 30, 2025, respectively, primarily driven by lower purchase volume and higher payment rates. Purchase volume decreased by 1.6% and 2.7% for the three and six months ended June 30, 2025, respectively, reflecting selective consumer spending as well as the impact of previous credit actions.
Yield on average interest-earning assets
The yield on average interest-earning assets decreased for the three and six months ended June 30, 2025 primarily due to a decrease in the percentage of interest-earning assets attributable to loan receivables and a lower yield on our liquidity portfolio, partially offset by an increase in the yield on average loan receivables. The loan receivable yield increased 53 basis points to 21.54% and 38 basis points to 21.43% for the three and six months ended June 30, 2025, driven by the impacts of our product, pricing and policy changes, partially offset by a combination of lower benchmark rates and lower late fee incidence.
Interest Expense
Interest expense decreased by $112 million to $1.1 billion and $189 million to $2.2 billion, for the three and six months ended June 30, 2025, respectively, primarily due to lower interest-bearing liabilities cost associated with lower benchmark rates. Our cost of funds decreased to 4.35% and 4.41% for the three and six months ended June 30, 2025, respectively, compared to 4.80% and 4.77% for the three and six months ended June 30, 2024, respectively.
Average interest-bearing liabilities
| Three months ended June 30 ($ in millions) | 2025 | % | 2024 | % | |||||||||||||||||||
| Interest-bearing deposit accounts | $ | 82,014 | 83.5 | % | $ | 82,749 | 83.8 | % | |||||||||||||||
| Borrowings of consolidated securitization entities | 7,926 | 8.1 | % | 7,858 | 8.0 | % | |||||||||||||||||
| Senior and subordinated unsecured notes | 8,269 | 8.4 | % | 8,118 | 8.2 | % | |||||||||||||||||
| Total average interest-bearing liabilities | $ | 98,209 | 100.0 | % | $ | 98,725 | 100.0 | % |
| Six months ended June 30 ($ in millions) | 2025 | % | 2024 | % | |||||||||||||||||||
| Interest-bearing deposit accounts | $ | 82,191 | 83.6 | % | $ | 82,674 | 83.8 | % | |||||||||||||||
| Borrowings of consolidated securitization entities | 8,058 | 8.2 | % | 7,620 | 7.7 | % | |||||||||||||||||
| Senior and subordinated unsecured notes | 8,061 | 8.2 | % | 8,374 | 8.5 | % | |||||||||||||||||
| Total average interest-bearing liabilities | $ | 98,310 | 100.0 | % | $ | 98,668 | 100.0 | % |
Net Interest Income
Net interest income increased by $116 million, or 2.6%, and $175 million, or 2.0%, for the three and six months ended June 30, 2025, respectively, resulting from the changes in interest income and interest expense discussed above.
Retailer Share Arrangements
Retailer share arrangements increased by $182 million, or 22.5% and $313 million to 19.9%, for the three and six months ended June 30, 2025, respectively, reflecting lower net charge-offs and the impact of our product, pricing and policy changes.
Provision for Credit Losses
Provision for credit losses decreased by $545 million, or 32.2%, and $938 million, or 26.2%, for the three and six months ended June 30, 2025, respectively, primarily driven by reserve releases in the current year as compared to reserve builds in the prior year, as well as lower net charge-offs. The reserve releases for the three and six months ended June 30, 2025 were $265 million and $362 million, respectively, as compared to reserve builds of $70 million and $369 million, respectively, in the prior year periods. The reserve build in the six months ended June 30, 2024 included $180 million related to the Ally Lending acquisition.
Net charge-offs for the three and six months ended June 30, 2025 decreased by $210 million and $207 million, respectively. The net charge-off rate for the three and six months ended June 30, 2025 decreased by 72 basis points to 5.70%, and 33 basis points to 6.04%, respectively, as compared to the prior year periods.
Other Income
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Interchange revenue | $ | 268 | $ | 263 | $ | 506 | $ | 504 | |||||||||||||||
| Protection product revenue | 144 | 125 | 291 | 266 | |||||||||||||||||||
| Loyalty programs | (360) | (346) | (671) | (665) | |||||||||||||||||||
| Other | 66 | 75 | 141 | 1,169 | |||||||||||||||||||
| Total other income | $ | 118 | $ | 117 | $ | 267 | $ | 1,274 |
Other income increased by $1 million to $118 million, and decreased by $1.0 billion, to $267 million, for the three and six months ended June 30, 2025, respectively.
The increase in the three months ended June 30, 2025 was primarily driven by the impact of our product, pricing and policy change related fees in the current year period, partially offset by a gain of $51 million related to an exchange of Visa Class B-1 common stock in the prior year period.
The decrease in the six months ended June 30, 2025 was primarily driven by the $1.1 billion gain on sale related to Pets Best in the prior year, partially offset by the impact of our product, pricing and policy change related fees in the current year period.
Other Expense
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Employee costs | $ | 509 | $ | 434 | $ | 1,015 | $ | 930 | |||||||||||||||
| Professional fees | 236 | 236 | 453 | 456 | |||||||||||||||||||
| Marketing and business development | 127 | 129 | 243 | 254 | |||||||||||||||||||
| Information processing | 215 | 207 | 434 | 393 | |||||||||||||||||||
| Other | 158 | 171 | 343 | 350 | |||||||||||||||||||
| Total other expense | $ | 1,245 | $ | 1,177 | $ | 2,488 | $ | 2,383 |
Other expense increased by $68 million, or 5.8%, and $105 million, or 4.4% for the three and six months ended June 30, 2025, respectively.
The increase in the three months ended June 30, 2025 was primarily driven by an increase in employee costs, partially offset by lower operational losses and late fee rule preparatory expenses in the prior year. The increase in employee costs was primarily driven by higher variable compensation, as well as additional headcount to support technology investments and higher medical benefit costs. The increase in variable compensation included mark-to-market adjustments for deferred compensation plans, higher stock-based compensation expense and higher incentive compensation, including an inflation bonus for our non-exempt employees.
The increase in the six months ended June 30, 2025 was also driven by higher information processing costs related to technology investments, in addition to the factors discussed above for the three months ended June 30, 2025.
Provision for Income Taxes
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Effective tax rate | 23.0 | % | 23.8 | % | 23.0 | % | 24.1 | % | |||||||||||||||
| Provision for income taxes | $ | 289 | $ | 201 | $ | 516 | $ | 616 |
The effective tax rate for the three and six months ended June 30, 2025 decreased compared to the same period in the prior year primarily due to an increase in tax benefits from stock-based compensation combined with a tax benefit from remeasuring the deferred tax asset for increases in state tax rates in the current period. The effective tax rate differs from the applicable U.S. federal statutory tax rate primarily due to state income taxes.
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law, which included certain modifications to U.S. tax law. The Company is currently evaluating the provisions of the Act but does not expect the Act to have a material impact on our Consolidated Financial Statements.
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 and six months ended June 30, 2025, for each of our five sales platforms and Corp, Other.
In the second quarter of 2025, we entered into an agreement to sell $0.2 billion of loan receivables associated with a Home & Auto partner program agreement. In connection with this agreement, revenue activities for the portfolio are no longer managed within our Home & Auto sales platform. All related metrics previously reported within our Home & Auto sales platform, are now reported within Corp, Other below. We have also recast all prior-period reported metrics for our Home & Auto sales platform and Corp, Other to conform to the current-period presentation.
Home & Auto
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Purchase volume | $ | 11,459 | $ | 12,350 | $ | 20,905 | $ | 22,741 | |||||||||||||||
| Period-end loan receivables | $ | 30,374 | $ | 32,611 | $ | 30,374 | $ | 32,611 | |||||||||||||||
| Average loan receivables, including held for sale | $ | 30,137 | $ | 32,385 | $ | 30,472 | $ | 32,023 | |||||||||||||||
| Average active accounts (in thousands) | 17,831 | 19,205 | 17,899 | 19,039 | |||||||||||||||||||
| Interest and fees on loans | $ | 1,395 | $ | 1,409 | $ | 2,797 | $ | 2,781 | |||||||||||||||
| Other income | $ | 52 | $ | 37 | $ | 108 | $ | 69 |
Home & Auto interest and fees on loans decreased by $14 million, or 1.0%, and increased by $16 million, or 0.6%, for the three and six months ended June 30, 2025, respectively.
The decrease in the three months ended June 30, 2025 was primarily driven by lower average loan receivables, partially offset by higher loan receivables yield. The increase in the six months ended June 30, 2025 was 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 increases in loan receivables yield reflects the impact of product, pricing and policy changes, partially offset by lower late fee incidence. The decreases in average loan receivables was primarily driven by lower purchase volume and higher payment rates. Purchase volume decreased 7.2% and 8.1% for the three and six months ended June 30, 2025, respectively, reflecting the combination of selective consumer spending amidst macroeconomic uncertainty and previous credit actions.
Other income increased by $15 million, or 40.5%, and $39 million, or 56.5%, for the three and six months ended June 30, 2025, respectively, primarily due to the impact of product, pricing and policy change related fees.
Digital
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Purchase volume | $ | 13,647 | $ | 13,403 | $ | 26,126 | $ | 26,031 | |||||||||||||||
| Period-end loan receivables | $ | 27,786 | $ | 27,704 | $ | 27,786 | $ | 27,704 | |||||||||||||||
| Average loan receivables, including held for sale | $ | 27,571 | $ | 27,542 | $ | 27,892 | $ | 27,812 | |||||||||||||||
| Average active accounts (in thousands) | 20,368 | 20,920 | 20,554 | 21,142 | |||||||||||||||||||
| Interest and fees on loans | $ | 1,576 | $ | 1,544 | $ | 3,120 | $ | 3,111 | |||||||||||||||
| Other income | $ | — | $ | — | $ | 9 | $ | 6 |
Digital interest and fees on loans increased by $32 million, or 2.1%, and $9 million, or 0.3% for the three and six months ended June 30, 2025, respectively, primarily driven by higher loan receivable yield, which included the impacts of product, pricing and policy changes, offset by lower benchmark rates and lower late fee incidence. Purchase volume increased by 1.8% and 0.4% for the three and six months ended June 30, 2025, as growth in new accounts and consumer spend per account was partially offset by fewer active accounts, which included the impact of previous credit actions. Average active accounts decreased by 2.6% and 2.8% for the three and six months ended June 30, 2025, respectively.
Diversified & Value
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Purchase volume | $ | 15,393 | $ | 15,333 | $ | 29,125 | $ | 29,356 | |||||||||||||||
| Period-end loan receivables | $ | 19,510 | $ | 19,516 | $ | 19,510 | $ | 19,516 | |||||||||||||||
| Average loan receivables, including held for sale | $ | 19,338 | $ | 19,360 | $ | 19,504 | $ | 19,477 | |||||||||||||||
| Average active accounts (in thousands) | 19,471 | 20,253 | 19,858 | 20,691 | |||||||||||||||||||
| Interest and fees on loans | $ | 1,159 | $ | 1,165 | $ | 2,337 | $ | 2,379 | |||||||||||||||
| Other income | $ | (3) | $ | (22) | $ | (3) | $ | (39) |
Diversified & Value interest and fees on loans decreased by $6 million, or 0.5%, and $42 million, or 1.8%, for the three and six months ended June 30, 2025, respectively, primarily driven by lower loan receivables yield, reflecting lower benchmark rates and lower late fee incidence, partially offset by the impact of product, pricing and policy changes.
Purchase volume was flat for the three and six months ended June 30, 2025, respectively, as growth in consumer spend per account was offset by fewer active accounts, which included the impact of previous credit actions. Average active accounts decreased by 3.9% and 4.0% for the three and six months ended June 30, 2025, respectively.
Health & Wellness
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Purchase volume | $ | 4,007 | $ | 4,089 | $ | 7,781 | $ | 8,069 | |||||||||||||||
| Period-end loan receivables | $ | 15,309 | $ | 15,280 | $ | 15,309 | $ | 15,280 | |||||||||||||||
| Average loan receivables, including held for sale | $ | 15,215 | $ | 15,111 | $ | 15,247 | $ | 14,904 | |||||||||||||||
| Average active accounts (in thousands) | 7,697 | 7,752 | 7,740 | 7,670 | |||||||||||||||||||
| Interest and fees on loans | $ | 923 | $ | 911 | $ | 1,837 | $ | 1,780 | |||||||||||||||
| Other income | $ | 66 | $ | 48 | $ | 141 | $ | 114 |
Health & Wellness interest and fees on loans increased by $12 million, or 1.3%, and $57 million, or 3.2%, for the three and six months ended June 30, 2025, respectively. The increase in the three months ended June 30, 2025 was primarily driven by growth in average loan receivables and loan receivables yield, reflecting the impact of product, pricing and policy changes, partially offset by lower late fee incidence. The increase in the six months ended June 30, 2025 was primarily driven by growth in loan receivables yield, reflecting the impact of product, pricing and policy changes, partially offset by higher reversals.
Purchase volume decreased 2.0% and 3.6%, for the three and six months ended June 30, 2025, respectively, reflecting lower spend in industries such as Cosmetic and Dental, combined with the impact of previous credit actions, partially offset by growth in Pet and Audiology. Average active accounts decreased 0.7% and increased 0.9% for the three and six months ended June 30, 2025, respectively.
Other income increased by $18 million, or 37.5%, and $27 million, or 23.7%, for the three and six months ended June 30, 2025, respectively, primarily due to higher protection product revenue and the impact of product, pricing, and policy change related fees. The increase in the three months ended June 30, 2025 was partially offset by higher loyalty costs and the increase in the six months ended June 30, 2025 was partially offset by lower commission fees following the Pets Best disposition.
Lifestyle
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Purchase volume | $ | 1,432 | $ | 1,525 | $ | 2,600 | $ | 2,769 | |||||||||||||||
| Period-end loan receivables | $ | 6,673 | $ | 6,822 | $ | 6,673 | $ | 6,822 | |||||||||||||||
| Average loan receivables, including held for sale | $ | 6,646 | $ | 6,723 | $ | 6,681 | $ | 6,677 | |||||||||||||||
| Average active accounts (in thousands) | 2,531 | 2,662 | 2,598 | 2,665 | |||||||||||||||||||
| Interest and fees on loans | $ | 261 | $ | 258 | $ | 522 | $ | 513 | |||||||||||||||
| Other income | $ | 9 | $ | 6 | $ | 19 | $ | 14 |
Lifestyle interest and fees on loans increased by $3 million, or 1.2%, and $9 million, or 1.8%, for the three and six months ended June 30, 2025, respectively. The increase for the three months ended June 30, 2025 was primarily driven by higher loan receivables yield, reflecting the impact of product, pricing and policy changes partially offset by lower benchmark rates and lower average loan receivables. The increase in the six months ended June 30, 2025 was primarily driven by higher loan receivables yield, reflecting the impact of product, pricing and policy changes partially offset by lower late fee incidence and lower benchmark rates.
Purchase volume decreased by 6.1% for both the three and six months ended June 30, 2025, respectively, primarily driven by decreases in Outdoor and Luxury, as well as in Specialty for the six months ended June 30, 2025, as consumers continued to manage discretionary spend.
Corp, Other
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Purchase volume | $ | 146 | $ | 146 | $ | 267 | $ | 267 | |||||||||||||||
| Period-end loan receivables | $ | 124 | $ | 351 | $ | 124 | $ | 351 | |||||||||||||||
| Average loan receivables, including held for sale | $ | 329 | $ | 357 | $ | 327 | $ | 325 | |||||||||||||||
| Average active accounts (in thousands) | 152 | 182 | 161 | 195 | |||||||||||||||||||
| Interest and fees on loans | $ | 14 | $ | 14 | $ | 27 | $ | 30 | |||||||||||||||
| Other income | $ | (6) | $ | 48 | $ | (7) | $ | 1,110 |
Other income for the six months ended June 30, 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 June 30, 2025 | % | At December 31, 2024 | % | |||||||||||||||||||
| Loan receivables | |||||||||||||||||||||||
| Credit cards | $ | 92,036 | 92.2 | % | $ | 96,818 | 92.5 | % | |||||||||||||||
| Consumer installment loans | 5,669 | 5.7 | 5,971 | 5.7 | |||||||||||||||||||
| Commercial credit products | 1,980 | 2.0 | 1,826 | 1.7 | |||||||||||||||||||
| Other | 91 | 0.1 | 106 | 0.1 | |||||||||||||||||||
| Total loan receivables | $ | 99,776 | 100.0 | % | $ | 104,721 | 100.0 | % |
Loan receivables decreased 4.7% to $99.8 billion at June 30, 2025, compared to $104.7 billion at December 31, 2024, primarily driven by the seasonality of our business, lower purchase volume and higher payment rates.
Loan receivables at June 30, 2025 decreased 2.5% compared to $102.3 billion at June 30, 2024 driven by lower purchase volume and higher payment rates.
The decrease in loan receivables for both periods also included the impact of the reclassification of $0.2 billion of loan receivables to loan receivables held for sale in the second quarter of 2025.
Our loan receivables portfolio had the following geographic concentration at June 30, 2025.
| ($ in millions) | Loan Receivables Outstanding | % of Total Loan Receivables Outstanding | |||||||||
| State | |||||||||||
| Texas | $ | 11,002 | 11.0 | % | |||||||
| California | $ | 10,197 | 10.2 | % | |||||||
| Florida | $ | 9,343 | 9.4 | % | |||||||
| New York | $ | 4,725 | 4.7 | % | |||||||
| North Carolina | $ | 4,215 | 4.2 | % |
Delinquencies
Over-30 day loan delinquencies as a percentage of period-end loan receivables decreased to 4.18% at June 30, 2025 from 4.47% at June 30, 2024, and decreased from 4.70% at December 31, 2024. These decreases include the impact of the previous credit actions we have 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 tables 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 June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | Amount | Rate | Amount | Rate | |||||||||||||||||||||||||||||||||||||||||||
| Credit cards | $ | 1,304 | 5.72 | % | $ | 1,493 | 6.44 | % | |||||||||||||||||||||||||||||||||||||||
| Consumer installment loans | 77 | 5.43 | % | 92 | 6.08 | % | |||||||||||||||||||||||||||||||||||||||||
| Commercial credit products | 30 | 6.07 | % | 35 | 7.03 | % | |||||||||||||||||||||||||||||||||||||||||
| Other | — | — | % | 1 | 3.21 | % | |||||||||||||||||||||||||||||||||||||||||
| Total net charge-offs | $ | 1,411 | 5.70 | % | $ | 1,621 | 6.42 | % |
| Six months ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | Amount | Rate | Amount | Rate | |||||||||||||||||||||||||||||||||||||||||||
| Credit cards | $ | 2,766 | 6.04 | % | $ | 2,963 | 6.36 | % | |||||||||||||||||||||||||||||||||||||||
| Consumer installment loans | 170 | 5.95 | % | 174 | 6.47 | % | |||||||||||||||||||||||||||||||||||||||||
| Commercial credit products | 63 | 6.64 | % | 68 | 7.05 | % | |||||||||||||||||||||||||||||||||||||||||
| Other | — | — | % | 1 | 1.58 | % | |||||||||||||||||||||||||||||||||||||||||
| Total net charge-offs | $ | 2,999 | 6.04 | % | $ | 3,206 | 6.37 | % |
Allowance for Credit Losses
The allowance for credit losses totaled $10.6 billion at June 30, 2025, compared to $10.9 billion at December 31, 2024, respectively, and $11.0 billion at June 30, 2024, and reflects our estimate of expected credit losses for the life of the loan receivables on our Condensed Consolidated Statements of Financial Position.
The decrease in allowance for credit losses compared to December 31, 2024 and June 30, 2024 primarily reflects the decrease in both loan receivables and delinquent balances as a percentage of loan receivables, as compared to the prior year period, as well as expectations of the macroeconomic environment. Our allowance for credit losses as a percentage of total period end loan receivables increased to 10.59% at June 30, 2025, from 10.44% at December 31, 2024 and decreased from 10.74% at June 30, 2024. See Note 5. Loan Receivables and Allowance for Credit Losses to our condensed consolidated financial statements for additional information.
Funding, Liquidity and Capital Resources
____________________________________________________________________________________________
We maintain a strong focus on liquidity and capital. Our funding, liquidity and capital policies are designed to ensure that our business has the liquidity and capital resources to support our daily operations, our business growth, our credit ratings and our regulatory and policy requirements, in a cost effective and prudent manner through expected and unexpected market environments.
Funding Sources
Our primary funding sources include cash from operations, deposits (direct and brokered deposits), securitized financings and senior and subordinated unsecured notes.
The following tables summarize information concerning our funding sources during the periods indicated:
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Three months ended June 30 ($ in millions) | Average Balance | % | Average Rate | Average Balance | % | Average Rate | |||||||||||||||||||||||||||||
| Deposits(1) | $ | 82,014 | 83.5 | % | 4.2 | % | $ | 82,749 | 83.8 | % | 4.7 | % | |||||||||||||||||||||||
| Securitized financings | 7,926 | 8.1 | 5.3 | % | 7,858 | 8.0 | 5.6 | % | |||||||||||||||||||||||||||
| Senior and subordinated unsecured notes | 8,269 | 8.4 | 5.1 | % | 8,118 | 8.2 | 5.0 | % | |||||||||||||||||||||||||||
| Total | $ | 98,209 | 100.0 | % | 4.3 | % | $ | 98,725 | 100.0 | % | 4.8 | % |
(1)Excludes $412 million and $396 million average balance of non-interest-bearing deposits for the three months ended June 30, 2025 and 2024, respectively. Non-interest-bearing deposits comprise less than 10% of total deposits for the three months ended June 30, 2025 and 2024.
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Six months ended June 30 ($ in millions) | Average Balance | % | Average Rate | Average Balance | % | Average Rate | |||||||||||||||||||||||||||||
| Deposits(1) | $ | 82,191 | 83.6 | % | 4.3 | % | $ | 82,674 | 83.8 | % | 4.7 | % | |||||||||||||||||||||||
| Securitized financings | 8,058 | 8.2 | 5.2 | % | 7,620 | 7.7 | 5.7 | % | |||||||||||||||||||||||||||
| Senior and subordinated unsecured notes | 8,061 | 8.2 | 5.2 | % | 8,374 | 8.5 | 4.9 | % | |||||||||||||||||||||||||||
| Total | $ | 98,310 | 100.0 | % | 4.4 | % | $ | 98,668 | 100.0 | % | 4.8 | % |
(1)Excludes $415 million and $393 million average balance of non-interest-bearing deposits for the six months ended June 30, 2025 and 2024, respectively. Non-interest-bearing deposits comprise less than 10% of total deposits for the six months ended June 30, 2025 and 2024.
Deposits
We obtain deposits directly from retail customers, affinity relationships and commercial customers (“direct deposits”) and through third-party firms that offer our deposits to their customers (“brokered deposits”). At June 30, 2025, we had $73.8 billion in direct deposits and $8.5 billion in brokered deposits consisting of certificates of deposit and network deposit sweeps procured through a program arranger that channels account deposits to us. A key part of our liquidity plan and funding strategy is to continue to utilize our direct deposit base as a source of stable and diversified low-cost funding.
Our direct deposits are primarily from retail customers and include a range of FDIC-insured deposit products, including certificates of deposit, IRAs, money market accounts, savings accounts and affinity deposits.
Brokered deposits are primarily from retail customers of large brokerage firms. We have relationships with multiple brokers that offer our deposits through their networks. Our brokered deposits primarily consist of certificates of deposit that bear interest at a fixed rate. These deposits generally are not subject to early withdrawal.
Our ability to attract deposits is sensitive to, among other things, the interest rates we pay, and therefore, we bear funding risk if we fail to pay higher rates, or interest rate risk if we are required to pay higher rates, to retain existing deposits or attract new deposits. To mitigate these risks, our funding strategy includes a range of deposit products, and we seek to maintain access to multiple other funding sources, including securitized financings (including our undrawn committed and uncommitted capacity) and unsecured debt.
The following tables summarize certain information regarding our interest-bearing deposits by type (all of which constitute U.S. deposits) for the periods indicated:
| Three months ended June 30 ($ in millions) | 2025 | 2024 | |||||||||||||||||||||||||||||||||
| Average Balance | % | Average Rate | Average Balance | % | Average Rate | ||||||||||||||||||||||||||||||
| Direct deposits: | |||||||||||||||||||||||||||||||||||
| Certificates of deposit (including IRA certificates of deposit) | $ | 40,163 | 49.0 | % | 4.4 | % | $ | 40,698 | 49.2 | % | 4.8 | % | |||||||||||||||||||||||
| Savings, money market, and demand accounts | 33,270 | 40.6 | 3.9 | % | 29,675 | 35.9 | 4.6 | % | |||||||||||||||||||||||||||
| Brokered deposits | 8,581 | 10.4 | 4.5 | % | 12,376 | 14.9 | 4.5 | % | |||||||||||||||||||||||||||
| Total interest-bearing deposits | $ | 82,014 | 100.0 | % | 4.2 | % | $ | 82,749 | 100.0 | % | 4.7 | % |
| Six months ended June 30 ($ in millions) | 2025 | 2024 | |||||||||||||||||||||||||||||||||
| Average Balance | % | Average Rate | Average Balance | % | Average Rate | ||||||||||||||||||||||||||||||
| Direct deposits: | |||||||||||||||||||||||||||||||||||
| Certificates of deposit (including IRA certificates of deposit) | $ | 40,499 | 49.3 | % | 4.5 | % | $ | 40,694 | 49.2 | % | 4.8 | % | |||||||||||||||||||||||
| Savings, money market, and demand accounts | 32,601 | 39.7 | 3.9 | % | 29,057 | 35.2 | 4.6 | % | |||||||||||||||||||||||||||
| Brokered deposits | 9,091 | 11.0 | 4.4 | % | 12,923 | 15.6 | 4.5 | % | |||||||||||||||||||||||||||
| Total interest-bearing deposits | $ | 82,191 | 100.0 | % | 4.3 | % | $ | 82,674 | 100.0 | % | 4.7 | % |
Our deposit liabilities provide funding with maturities ranging from one day to ten years. At June 30, 2025, the weighted average maturity of our interest-bearing time deposits was approximately 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 June 30, 2025 was $6.4 billion.
The following table summarizes the portion of uninsured deposits that are certificates of deposit by contractual maturity at June 30, 2025.
| ($ 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) | $ | 931 | $ | 238 | $ | 1,488 | $ | 1,102 | $ | 3,759 |
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 June 30, 2025.
| ($ in millions) | Less Than One Year**(2)** | One Year Through Three Years | Four Years Through Five Years | After Five Years | Total | ||||||||||||||||||||||||
| Scheduled maturities of borrowings—owed to securitization investors: | |||||||||||||||||||||||||||||
| SYNCT | $ | 1,150 | $ | 500 | $ | — | $ | — | $ | 1,650 | |||||||||||||||||||
| SFT | 400 | 875 | — | — | 1,275 | ||||||||||||||||||||||||
| SYNIT(1) | 675 | 4,750 | — | — | 5,425 | ||||||||||||||||||||||||
| Total borrowings—owed to securitization investors | $ | 2,225 | $ | 6,125 | $ | — | $ | — | $ | 8,350 |
(1)Excludes any subordinated classes of SYNIT notes that we owned at June 30, 2025.
(2)Includes $675 million of fixed securitized borrowings which matured and were repaid in July 2025.
We retain exposure to the performance of trust assets through: (i) in the case of SYNCT, SFT and SYNIT, subordinated retained interests in the loan receivables transferred to the trust in excess of the principal amount of the notes for a given series that provide credit enhancement for a particular series, as well as a pari passu seller’s interest in each trust and (ii) in the case of SYNIT, any subordinated classes of notes that we own.
All of our securitized financings include early repayment triggers, referred to as early amortization events, including events related to material breaches of representations, warranties or covenants, inability or failure of the Bank to transfer loan receivables to the trusts as required under the securitization documents, failure to make required payments or deposits pursuant to the securitization documents, and certain insolvency-related events with respect to the related securitization depositor, Synchrony (solely with respect to SYNCT) or the Bank. In addition, an early amortization event will occur with respect to a series if the excess spread as it relates to a particular series or for the trust, as applicable, falls below zero. Following an early amortization event, principal collections on the loan receivables in the applicable trust are applied to repay principal of the trust's asset-backed securities rather than being available on a revolving basis to fund the origination activities of our business. The occurrence of an early amortization event also would limit or terminate our ability to issue future series out of the trust in which the early amortization event occurred. No early amortization event has occurred with respect to any of the securitized financings in SYNCT, SFT or SYNIT.
The following table summarizes for each of our trusts the three-month rolling average excess spread at June 30, 2025.
| Note Principal Balance ($ in millions) | # of Series Outstanding | Three-Month Rolling Average Excess Spread**(1)** | |||||||||||||||
| SYNCT | $ | 1,650 | 3 | ~ 15.9% to 16.6% | |||||||||||||
| SFT | $ | 1,275 | 5 | 12.7 | % | ||||||||||||
| SYNIT | $ | 5,425 | 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 June 30, 2025.
Senior and Subordinated Unsecured Notes
During the six months ended June 30, 2025, we made repayments totaling $750 million of senior unsecured notes issued by Synchrony Financial.
The following table provides a summary of our outstanding senior and subordinated unsecured notes at June 30, 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(3) | 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 | |||||||||||||||||
| 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%(4) | August 2030 | 750 | |||||||||||||||||
| March 2025 | 5.450%(5) | 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 | $ | 7,700 | ||||||||||||||||||
(1)Weighted average interest rate of all senior and subordinated unsecured notes at June 30, 2025 was 4.97%.
(2)The amounts shown exclude unamortized debt discounts, premiums and issuance costs.
(3)Principal amount of $1.0 billion repaid in July 2025.
(4)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.
(5)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 June 30, 2025.
At June 30, 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 June 30, 2025 had $21.8 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 primarily reflects the decrease in loan receivables as compared to December 31, 2024, and the issuances of both senior unsecured debt and securitized debt. We believe our liquidity position at June 30, 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 June 30, 2025, we had an aggregate of $10.8 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 | |||||||||||||||
| June 30, 2025 | May 2025 | 0.30 | 114 | |||||||||||||||||
| Total dividends declared | $ | 0.55 | $ | 211 |
| 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 | |||||||||||||||||||||||
| June 30, 2025 | May 2025 | $ | 14.06 | $ | 10 | 20.63 | 11 | |||||||||||||||||||||||||
| Total dividends declared | $ | 28.12 | $ | 21 | $ | 41.26 | $ | 21 |
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. In addition, subject to approval from the Board, we have the ability to issue further series of preferred stock, up to a maximum of 300 million shares authorized for issuance.
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 | |||||||||||
| June 30, 2025 | 8.8 | 500 | ||||||||||||
| Total | 18.6 | $ | 1,100 |
During the six months ended June 30, 2025, we repurchased $1.1 billion of common stock as part of our share repurchase program. In April 2025, we announced that the Board of Directors approved a share repurchase program of up to $2.5 billion through June 30, 2026 (the "2025 plan"). At June 30, 2025, the Company had a total remaining share repurchase authorization of $2.0 billion under the 2025 plan. Repurchases under this program are subject to market conditions and other factors, including legal and regulatory restrictions and required approvals, if any.
Regulatory Capital Requirements - Synchrony Financial
As a savings and loan holding company, we are required to maintain minimum capital ratios, under the applicable U.S. Basel III capital rules. For more information, see “Regulation—Savings and Loan Holding Company Regulation” in our 2024 Form 10-K.
For Synchrony Financial to be a well-capitalized savings and loan holding company, Synchrony Bank must be well-capitalized and Synchrony Financial must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve Board to meet and maintain a specific capital level for any capital measure. At June 30, 2025, Synchrony Financial met all the requirements to be deemed well-capitalized.
The following table sets forth the composition of our capital ratios for the Company calculated under the Basel III Standardized Approach rules at June 30, 2025 and December 31, 2024, respectively.
| Basel III | |||||||||||||||||||||||
| At June 30, 2025 | At December 31, 2024 | ||||||||||||||||||||||
| ($ in millions) | Amount | Ratio**(1)** | Amount | Ratio**(1)** | |||||||||||||||||||
| Total risk-based capital | $ | 17,153 | 16.9 | % | $ | 17,407 | 16.5 | % | |||||||||||||||
| Tier 1 risk-based capital | $ | 15,025 | 14.8 | % | $ | 15,239 | 14.5 | % | |||||||||||||||
| Tier 1 leverage | $ | 15,025 | 12.7 | % | $ | 15,239 | 12.9 | % | |||||||||||||||
| Common equity Tier 1 capital | $ | 13,803 | 13.6 | % | $ | 14,017 | 13.3 | % | |||||||||||||||
| Risk-weighted assets | $ | 101,716 | $ | 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 were fully phased-in beginning in the first quarter of 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 increase in our common equity Tier 1 capital ratio compared to December 31, 2024 was primarily due to a reduction in risk-weighted assets related to the decrease in loan receivables during the six months ended June 30, 2025 and the retention of net earnings during the same period, partially offset by the final phase-in of the CECL regulatory capital transition adjustment.
Regulatory Capital Requirements - Synchrony Bank
At June 30, 2025 and December 31, 2024, the Bank met all applicable requirements to be deemed well-capitalized pursuant to the Office of the Comptroller of the Currency of the U.S. Treasury (the “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 June 30, 2025 and December 31, 2024, and also reflects the applicable CECL regulatory capital transition adjustment at December 31, 2024.
| At June 30, 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 | $ | 15,928 | 16.4 | % | $ | 15,916 | 15.8 | % | 10.0% | ||||||||||||||||||||
| Tier 1 risk-based capital | $ | 13,854 | 14.3 | % | $ | 13,805 | 13.7 | % | 8.0% | ||||||||||||||||||||
| Tier 1 leverage | $ | 13,854 | 12.3 | % | $ | 13,805 | 12.4 | % | 5.0% | ||||||||||||||||||||
| Common equity Tier 1 capital | $ | 13,854 | 14.3 | % | $ | 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
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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 June 30, 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 June 30, 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 in the period of implementation.
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 June 30, 2025.
Allowance for Credit Losses
Our Allowance for Credit Losses represents our best estimate of 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, such as retailer, performance and credit attributes, 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, 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.
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. Key factors that impact the accuracy of our 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 estimate of expected credit losses utilizes a reasonable and supportable forecast period of 12 months, consistent with the forecast period utilized since adoption of CECL. 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. 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. Additionally, the estimate of expected credit losses includes expected recoveries of amounts previously charged-off and expected to be charged-off.
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. To determine the expected credit losses for credit card loan receivables as of the measurement date our estimate considers the payments attributable to the measurement date balance. To do so, we utilize an approach which implicitly 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.
Further, when historical 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.
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, the CFPB filed a joint motion with the plaintiff industry organizations in the litigation 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.
On September 17, 2024, the OCC finalized a new Policy Statement Regarding Statutory Factors Under the Bank Merger Act (the “Policy Statement”), which updated the factors the OCC would apply in evaluating a proposed bank merger transaction. The Policy Statement could have potentially made it more difficult and/or costly for us to obtain OCC approval for an acquisition or otherwise resulted in more onerous conditions in approval orders than the OCC had previously imposed. On May 8, 2025, the OCC rescinded the Policy Statement.
On October 22, 2024, the CFPB issued a final rule to implement Section 1033 of the Dodd-Frank Act. Under the final rule, financial institutions such as the Bank that offer credit cards or consumer deposit accounts would be required, upon request, to make available to a consumer or third party authorized by the consumer certain information the Bank has concerning a consumer financial product or service covered by the rule, such as a credit card or a deposit account. Industry organizations challenged the final rule in court. On May 30, 2025, the CFPB filed a motion for summary judgment in the litigation, in which the CFPB stated that it had concluded that the final rule exceeded the agency’s statutory authority. As a result, the CFPB requested that the court grant the plaintiffs’ motion for summary judgment and vacate the final rule. The district court has not yet ruled on the CFPB’s motion.
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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