filings.toolsItem 1. FINANCIAL STATEMENTS
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Item 1. FINANCIAL STATEMENTS
Synchrony Financial and subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
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| Three months ended March 31, | |||||||||||||||||||||||
| ($ in millions, except per share data) | 2026 | 2025 | |||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||
| Interest and fees on loans (Note 4) | $ | 5,413 | $ | 5,312 | |||||||||||||||||||
| Interest on cash and debt securities | 190 | 238 | |||||||||||||||||||||
| Total interest income | 5,603 | 5,550 | |||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||
| Interest on deposits | 770 | 882 | |||||||||||||||||||||
| Interest on borrowings of consolidated securitization entities | 106 | 104 | |||||||||||||||||||||
| Interest on senior and subordinated unsecured notes | 92 | 100 | |||||||||||||||||||||
| Total interest expense | 968 | 1,086 | |||||||||||||||||||||
| Net interest income | 4,635 | 4,464 | |||||||||||||||||||||
| Retailer share arrangements | (1,070) | (895) | |||||||||||||||||||||
| Provision for credit losses (Note 4) | 1,335 | 1,491 | |||||||||||||||||||||
| Net interest income, after retailer share arrangements and provision for credit losses | 2,230 | 2,078 | |||||||||||||||||||||
| Other income: | |||||||||||||||||||||||
| Interchange revenue | 264 | 238 | |||||||||||||||||||||
| Protection product revenue | 161 | 147 | |||||||||||||||||||||
| Loyalty programs | (361) | (311) | |||||||||||||||||||||
| Other | 69 | 75 | |||||||||||||||||||||
| Total other income | 133 | 149 | |||||||||||||||||||||
| Other expense: | |||||||||||||||||||||||
| Employee costs | 515 | 506 | |||||||||||||||||||||
| Professional fees | 209 | 217 | |||||||||||||||||||||
| Marketing and business development | 114 | 116 | |||||||||||||||||||||
| Information processing | 262 | 219 | |||||||||||||||||||||
| Other | 216 | 185 | |||||||||||||||||||||
| Total other expense | 1,316 | 1,243 | |||||||||||||||||||||
| Earnings before provision for income taxes | 1,047 | 984 | |||||||||||||||||||||
| Provision for income taxes (Note 12) | 242 | 227 | |||||||||||||||||||||
| Net earnings | $ | 805 | $ | 757 | |||||||||||||||||||
| Net earnings available to common stockholders | $ | 784 | $ | 736 | |||||||||||||||||||
| Earnings per share (Note 11) | |||||||||||||||||||||||
| Basic | $ | 2.29 | $ | 1.91 | |||||||||||||||||||
| Diluted | $ | 2.27 | $ | 1.89 |
See accompanying notes to condensed consolidated financial statements.
Synchrony Financial and subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
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| Three months ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||||||||||||||
| Net earnings | $ | 805 | $ | 757 | |||||||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||
| Debt securities | (6) | 8 | |||||||||||||||||||||
| Currency translation adjustments | (2) | (1) | |||||||||||||||||||||
| Employee benefit plans and other | — | (1) | |||||||||||||||||||||
| Other comprehensive income (loss) | (8) | 6 | |||||||||||||||||||||
| Comprehensive income | $ | 797 | $ | 763 |
Amounts presented net of taxes.
See accompanying notes to condensed consolidated financial statements.
Synchrony Financial and subsidiaries
Condensed Consolidated Statements of Financial Position (Unaudited)
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| ($ in millions) | At March 31, 2026 | At December 31, 2025 | |||||||||
| Assets | |||||||||||
| Cash and equivalents | $ | 20,559 | $ | 14,973 | |||||||
| Debt securities (Note 3) | 3,040 | 2,348 | |||||||||
| Loan receivables: (Notes 4 and 5) | |||||||||||
| Unsecuritized loans held for investment | 78,423 | 81,408 | |||||||||
| Restricted loans of consolidated securitization entities | 21,662 | 22,400 | |||||||||
| Total loan receivables | 100,085 | 103,808 | |||||||||
| Less: Allowance for credit losses | (10,428) | (10,442) | |||||||||
| Loan receivables, net | 89,657 | 93,366 | |||||||||
| Goodwill | 1,363 | 1,363 | |||||||||
| Intangible assets, net (Note 6) | 1,223 | 1,255 | |||||||||
| Other assets | 5,659 | 5,790 | |||||||||
| Total assets | $ | 121,501 | $ | 119,095 | |||||||
| Liabilities and Equity | |||||||||||
| Deposits: (Note 7) | |||||||||||
| Interest-bearing deposit accounts | $ | 82,478 | $ | 80,748 | |||||||
| Non-interest-bearing deposit accounts | 416 | 396 | |||||||||
| Total deposits | 82,894 | 81,144 | |||||||||
| Borrowings: (Notes 5 and 8) | |||||||||||
| Borrowings of consolidated securitization entities | 8,915 | 8,415 | |||||||||
| Senior and subordinated unsecured notes | 7,513 | 6,767 | |||||||||
| Total borrowings | 16,428 | 15,182 | |||||||||
| Accrued expenses and other liabilities | 5,702 | 6,003 | |||||||||
| Total liabilities | $ | 105,024 | $ | 102,329 | |||||||
| Equity: | |||||||||||
| Preferred stock, par value $0.001 per share; 300 million shares authorized, 1.25 million shares issued and outstanding at March 31, 2026 and December 31, 2025 | $ | 1,222 | $ | 1,222 | |||||||
| Common stock, par value $0.001 per share; 4.0 billion shares authorized; 834 million shares issued at both March 31, 2026 and December 31, 2025; 337 million and 347 million shares outstanding at March 31, 2026 and December 31, 2025, respectively | 1 | 1 | |||||||||
| Additional paid-in capital | 9,844 | 9,902 | |||||||||
| Retained earnings | 25,210 | 24,598 | |||||||||
| Accumulated other comprehensive income (loss): | |||||||||||
| Debt securities | (12) | (6) | |||||||||
| Currency translation adjustments | (52) | (50) | |||||||||
| Employee benefit plans and other | 8 | 8 | |||||||||
| Treasury stock, at cost; 497 million and 487 million shares at March 31, 2026 and December 31, 2025, respectively | (19,744) | (18,909) | |||||||||
| Total equity | 16,477 | 16,766 | |||||||||
| Total liabilities and equity | $ | 121,501 | $ | 119,095 |
See accompanying notes to condensed consolidated financial statements.
Synchrony Financial and subsidiaries
Condensed Consolidated Statements of Changes in Equity (Unaudited)
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| Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions, shares in thousands) | Shares Issued | Amount | Shares Issued | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2025 | 1,250 | $ | 1,222 | 833,985 | $ | 1 | $ | 9,853 | $ | 21,635 | $ | (59) | $ | (16,072) | $ | 16,580 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | — | 757 | — | — | 757 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | 6 | — | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchases of treasury stock | — | — | — | — | — | — | — | (605) | (605) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | (49) | (65) | — | 75 | (39) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends - Series A preferred stock ($14.06 per share) | — | — | — | — | — | (11) | — | — | (11) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends - Series B preferred stock ($20.63 per share) | — | — | — | — | — | (10) | — | — | (10) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends - common stock ($0.25 per share) | — | — | — | — | — | (97) | — | — | (97) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | 1,250 | $ | 1,222 | 833,985 | $ | 1 | $ | 9,804 | $ | 22,209 | $ | (53) | $ | (16,602) | $ | 16,581 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions, shares in thousands) | Shares Issued | Amount | Shares Issued | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2026 | 1,250 | $ | 1,222 | 833,985 | $ | 1 | $ | 9,902 | $ | 24,598 | $ | (48) | $ | (18,909) | $ | 16,766 | |||||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | — | 805 | — | — | 805 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | (8) | — | (8) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchases of treasury stock | — | — | — | — | — | — | — | (907) | (907) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | (58) | (68) | — | 72 | (54) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends - Series A preferred stock ($14.06 per share) | — | — | — | — | — | (10) | — | — | (10) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends - Series B preferred stock ($20.63 per share) | — | — | — | — | — | (11) | — | — | (11) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends - common stock ($0.30 per share) | — | — | — | — | — | (104) | — | — | (104) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | 1,250 | $ | 1,222 | 833,985 | $ | 1 | $ | 9,844 | $ | 25,210 | $ | (56) | $ | (19,744) | $ | 16,477 | |||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
Synchrony Financial and subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
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| Three months ended March 31, | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Cash flows - operating activities | |||||||||||
| Net earnings | $ | 805 | $ | 757 | |||||||
| Adjustments to reconcile net earnings to cash provided from operating activities | |||||||||||
| Provision for credit losses | 1,335 | 1,491 | |||||||||
| Deferred income taxes | 28 | 54 | |||||||||
| Depreciation and amortization | 143 | 125 | |||||||||
| All other operating activities | 206 | 128 | |||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions and dispositions | |||||||||||
| (Increase) decrease in interest and fees receivable | (124) | (33) | |||||||||
| (Increase) decrease in other assets | 102 | 1 | |||||||||
| Increase (decrease) in accrued expenses and other liabilities | (312) | (323) | |||||||||
| Cash provided from (used for) operating activities | 2,183 | 2,200 | |||||||||
| Cash flows - investing activities | |||||||||||
| Maturity and sales of debt securities | 500 | 855 | |||||||||
| Purchases of debt securities | (1,190) | (480) | |||||||||
| Net (increase) decrease in loan receivables, including held for sale | 2,358 | 3,428 | |||||||||
| All other investing activities | (144) | (200) | |||||||||
| Cash provided from (used for) investing activities | 1,524 | 3,603 | |||||||||
| Cash flows - financing activities | |||||||||||
| Borrowings of consolidated securitization entities | |||||||||||
| Proceeds from issuance of securitized debt | 498 | 747 | |||||||||
| Maturities and repayment of securitized debt | — | — | |||||||||
| Senior and subordinated unsecured notes | |||||||||||
| Proceeds from issuance of senior and subordinated unsecured notes | 745 | 796 | |||||||||
| Maturities and repayment of senior and subordinated unsecured notes | — | — | |||||||||
| Dividends paid on preferred stock | (21) | (21) | |||||||||
| Net increase (decrease) in deposits | 1,748 | 1,370 | |||||||||
| Purchases of treasury stock | (900) | (605) | |||||||||
| Dividends paid on common stock | (104) | (97) | |||||||||
| All other financing activities | (87) | (71) | |||||||||
| Cash provided from (used for) financing activities | 1,879 | 2,119 | |||||||||
| Increase (decrease) in cash and equivalents, including restricted amounts | 5,586 | 7,922 | |||||||||
| Cash and equivalents, including restricted amounts, at beginning of period | 15,017 | 14,755 | |||||||||
| Cash and equivalents at end of period: | |||||||||||
| Cash and equivalents | 20,559 | 21,629 | |||||||||
| Restricted cash and equivalents included in other assets | 44 | 1,048 | |||||||||
| Total cash and equivalents, including restricted amounts, at end of period | $ | 20,603 | $ | 22,677 |
See accompanying notes to condensed consolidated financial statements.
Synchrony Financial and subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
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NOTE 1. BUSINESS DESCRIPTION
Synchrony Financial (the “Company”) provides a range of credit products through financing programs it has established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers. Through Synchrony Bank (the “Bank”), we primarily offer private label credit cards, co-branded credit cards, comprising our Dual Card offering and general purpose co-branded credit cards, and a Synchrony-branded general purpose credit card, as well as short- and long-term installment loans, and savings products insured by the Federal Deposit Insurance Corporation (“FDIC”). We conduct our operations through a single business segment. See Note 13. Segment Reporting for additional information.
References to the “Company”, “we”, “us” and “our” are to Synchrony Financial and its consolidated subsidiaries unless the context otherwise requires.
NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed consolidated financial statements were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”).
Preparing financial statements in conformity with U.S. GAAP requires us to make estimates based on assumptions about current, and for some estimates, future, economic and market conditions (for example, unemployment, interest rates and market liquidity) which affect reported amounts and related disclosures in our condensed consolidated financial statements. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially affect our results of operations and financial position. Among other effects, such changes could result in incremental losses on loan receivables, future impairments of debt securities, goodwill and intangible assets, increases in reserves for contingencies, establishment of valuation allowances on deferred tax assets and increases in our tax liabilities.
We primarily conduct our business within the United States and substantially all of our revenues are from U.S. customers. The operating activities conducted by our non-U.S. affiliates use the local currency as their functional currency. The effects of translating the financial statements of these non-U.S. affiliates to U.S. dollars are included in equity. Asset and liability accounts are translated at period-end exchange rates, while revenues and expenses are translated at average rates for the respective periods.
Consolidated Basis of Presentation
The Company’s financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all of our subsidiaries – i.e., entities in which we have a controlling financial interest, most often because we hold a majority voting interest, as well as certain variable interest entities ("VIE's").
Interim Period Presentation
The condensed consolidated financial statements and notes thereto are unaudited. These statements include all adjustments (consisting of normal recurring accruals) that we considered necessary to present a fair statement of our results of operations, financial position and cash flows. The results reported in these condensed consolidated financial statements should not be considered as necessarily indicative of results that may be expected for the entire year. These condensed consolidated financial statements should be read in conjunction with our 2025 annual consolidated financial statements and the related notes in our Annual Report on Form 10-K for the year ended December 31, 2025 (our "2025 Form 10-K").
New Accounting Standards
Recently Issued But Not Yet Adopted Accounting Standards
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires disaggregated information about certain income statement line items in a tabular format in the notes to the financial statements. The Company will adopt this guidance on its effective date, which for us is beginning within our December 31, 2027 Form 10-K, and is currently determining the method of adoption, however, it is not expected to have a material impact on our Consolidated Financial Statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40). This ASU amends certain aspects of the accounting for and disclosure of software costs. This ASU requires an entity to start capitalizing software costs when both management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in this update are effective for the Company beginning in January 2028, through either a prospective, modified, or retrospective transition approach, with early adoption permitted. The Company is currently evaluating the updated guidance to assess the impact and the method of adoption.
In November 2025, the FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326) – Purchased Loans. ASU expands the population of purchased financial assets subject to the gross-up approach in Topic 326. As a result of this update, loans (excluding credit cards) acquired without credit deterioration and deemed “seasoned” as defined in the ASU will follow the gross-up approach at acquisition and the initial allowance for credit losses at acquisition is added to the amortized cost basis of the loans. The Company is currently evaluating the updated guidance, which is effective prospectively beginning January 2027, with early adoption permitted.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), which improves the navigability of the required interim disclosures, provides clarity as to when it is applicable, and provides additional guidance on what disclosures are required in interim reporting periods by establishing a disclosure principle. The guidance is effective for interim reporting periods beginning in 2028 and can be applied either prospectively or retrospectively. The Company is currently evaluating the updated guidance to assess the impact and determining its method of adoption.
See Note 2. Basis of Presentation and Summary of Significant Accounting Policies to our 2025 annual consolidated financial statements in our 2025 Form 10-K, for additional information on our significant accounting policies.
NOTE 3. DEBT SECURITIES
All of our debt securities are classified as available-for-sale and are held to meet our liquidity objectives or to comply with the Community Reinvestment Act (“CRA”). Our debt securities consist of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Gross | Gross | Gross | Gross | ||||||||||||||||||||||||||||||||||||||||||||
| Amortized | unrealized | unrealized | Estimated | Amortized | unrealized | unrealized | Estimated | ||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | cost | gains | losses | fair value | cost | gains | losses | fair value | |||||||||||||||||||||||||||||||||||||||
| U.S. government and federal agency | $ | 2,178 | $ | 5 | $ | (2) | $ | 2,181 | $ | 1,485 | $ | 7 | $ | — | $ | 1,492 | |||||||||||||||||||||||||||||||
| State and municipal | 34 | — | — | 34 | 35 | — | — | 35 | |||||||||||||||||||||||||||||||||||||||
| Residential mortgage-backed(a) | 313 | — | (22) | 291 | 318 | 1 | (22) | 297 | |||||||||||||||||||||||||||||||||||||||
| Asset-backed(b) | 523 | 3 | — | 526 | 509 | 6 | — | 515 | |||||||||||||||||||||||||||||||||||||||
| Other | 8 | — | — | 8 | 8 | 1 | — | 9 | |||||||||||||||||||||||||||||||||||||||
| Total**(c)** | $ | 3,056 | $ | 8 | $ | (24) | $ | 3,040 | $ | 2,355 | $ | 15 | $ | (22) | $ | 2,348 |
(a) All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages.
(b) Our asset-backed securities are collateralized by credit card and auto loans.
(c) At March 31, 2026 and December 31, 2025, the estimated fair value of debt securities pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve discount window advances was $255 million and $470 million, respectively.
The following table presents the estimated fair values and gross unrealized losses of our available-for-sale debt securities:
| In loss position for | |||||||||||||||||||||||
| Less than 12 months | 12 months or more | ||||||||||||||||||||||
| Gross | Gross | ||||||||||||||||||||||
| Estimated | unrealized | Estimated | unrealized | ||||||||||||||||||||
| ($ in millions) | fair value | losses | fair value | losses | |||||||||||||||||||
| At March 31, 2026 | |||||||||||||||||||||||
| U.S. government and federal agency | $ | 1,048 | $ | (2) | $ | — | $ | — | |||||||||||||||
| State and municipal | 16 | — | 5 | — | |||||||||||||||||||
| Residential mortgage-backed | 40 | — | 214 | (22) | |||||||||||||||||||
| Asset-backed | 92 | — | — | — | |||||||||||||||||||
| Other | — | — | — | — | |||||||||||||||||||
| Total**(a)** | $ | 1,196 | $ | (2) | $ | 219 | $ | (22) | |||||||||||||||
| At December 31, 2025 | |||||||||||||||||||||||
| U.S. government and federal agency | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| State and municipal | 17 | — | 5 | — | |||||||||||||||||||
| Residential mortgage-backed | — | — | 229 | (22) | |||||||||||||||||||
| Asset-backed | — | — | — | — | |||||||||||||||||||
| Other | — | — | — | — | |||||||||||||||||||
| Total**(a)** | $ | 17 | $ | — | $ | 234 | $ | (22) |
(a)Consists of 233 and 211 securities in gross unrealized loss positions at March 31, 2026 and December 31, 2025, respectively.
We regularly review debt securities for impairment resulting from credit loss using both qualitative and quantitative criteria, as necessary, based on the composition of the portfolio at period end. Based on our assessment, no material impairments from credit losses were recognized during the period.
We presently do not intend to sell our debt securities that are in an unrealized loss position and believe that it is not more likely than not that we will be required to sell these securities before recovery of our amortized cost.
Contractual Maturities of Investments in Available-for-Sale Debt Securities
| At March 31, 2026 ($ in millions) | Due within 1 year | Due after 1 year through 5 years | Due after 5 years through 10 years | Due after 10 years | Total | ||||||||||||||||||||||||
| U.S. government and federal agency | $ | 1,148 | $ | 1,033 | $ | — | $ | — | $ | 2,181 | |||||||||||||||||||
| State and municipal | — | 6 | — | 28 | 34 | ||||||||||||||||||||||||
| Residential mortgage-backed | 1 | 18 | 124 | 148 | 291 | ||||||||||||||||||||||||
| Asset-backed | 179 | 347 | — | — | 526 | ||||||||||||||||||||||||
| Other | — | 8 | — | — | 8 | ||||||||||||||||||||||||
| Total estimated fair value | $ | 1,328 | $ | 1,412 | $ | 124 | $ | 176 | $ | 3,040 | |||||||||||||||||||
| Amortized cost | $ | 1,327 | $ | 1,408 | $ | 134 | $ | 187 | $ | 3,056 | |||||||||||||||||||
| Weighted average yield(a) | 4.0 | % | 4.0 | % | 1.4 | % | 4.0 | % | 3.9 | % | |||||||||||||||||||
(a)Weighted average yield is calculated based on the amortized cost of each security. In calculating yield, no adjustment has been made with respect to any tax-exempt obligations.
All securities are presented above based upon contractual maturity date, except our asset-backed securities which are allocated based upon expected final payment date. We expect actual maturities to differ from contractual maturities because borrowers have the right to prepay certain obligations.
There were no material realized gains or losses recognized for the three months ended March 31, 2026 and 2025.
Although we generally do not have the intent to sell any specific securities held at March 31, 2026, in the ordinary course of managing our debt securities portfolio, we may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield, liquidity requirements and funding obligations.
NOTE 4. LOAN RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Credit cards | $ | 92,764 | $ | 96,346 | |||||||
| Consumer installment loans | 5,357 | 5,548 | |||||||||
| Commercial credit products | 1,886 | 1,833 | |||||||||
| Other | 78 | 81 | |||||||||
| Total loan receivables, before allowance for credit losses**(a)(b)(c)** | $ | 100,085 | $ | 103,808 |
(a)Total loan receivables include $21.7 billion and $22.4 billion of restricted loans of consolidated securitization entities at March 31, 2026 and December 31, 2025, respectively. See Note 5. Variable Interest Entities for further information.
(b)At March 31, 2026 and December 31, 2025, loan receivables included deferred costs, net of purchase discounts and deferred income, of $(32) million and $(53) million, respectively.
(c)At March 31, 2026 and December 31, 2025, $20.0 billion and $18.3 billion, respectively, of loan receivables were pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve discount window advances.
Loan Receivables Acquired
In April 2026, we completed our acquisition of the Lowe's commercial co-branded credit card portfolio, comprising of approximately $0.7 billion of outstanding loan receivables. This transaction was accounted for as an asset purchase.
Allowance for Credit Losses
| ($ in millions) | Balance at January 1, 2026 | Provision charged to operations**(a)** | Gross charge-offs | Recoveries | Other | Balance at March 31, 2026 | |||||||||||||||||||||||||||||
| Credit cards | $ | 9,789 | $ | 1,148 | $ | (1,642) | $ | 409 | $ | — | $ | 9,704 | |||||||||||||||||||||||
| Consumer installment loans | 543 | 154 | (101) | 18 | — | 614 | |||||||||||||||||||||||||||||
| Commercial credit products | 109 | 30 | (33) | 3 | — | 109 | |||||||||||||||||||||||||||||
| Other | 1 | — | — | — | — | 1 | |||||||||||||||||||||||||||||
| Total | $ | 10,442 | $ | 1,332 | $ | (1,776) | $ | 430 | $ | — | $ | 10,428 |
| ($ in millions) | Balance at January 1, 2025 | Provision charged to operations**(a)** | Gross charge-offs | Recoveries | Other | Balance at March 31, 2025 | |||||||||||||||||||||||||||||
| Credit cards | $ | 10,259 | $ | 1,336 | $ | (1,822) | $ | 360 | $ | — | $ | 10,133 | |||||||||||||||||||||||
| Consumer installment loans | 542 | 135 | (110) | 17 | — | 584 | |||||||||||||||||||||||||||||
| Commercial credit products | 127 | 16 | (35) | 2 | — | 110 | |||||||||||||||||||||||||||||
| Other | 1 | — | — | — | — | 1 | |||||||||||||||||||||||||||||
| Total | $ | 10,929 | $ | 1,487 | $ | (1,967) | $ | 379 | $ | — | $ | 10,828 |
(a)Provision for credit losses in our Condensed Consolidated Statements of Earnings also includes amounts associated with off-balance sheet credit exposures recorded in Accrued expenses and other liabilities in the Condensed Consolidated Statements of Financial Position.
The reasonable and supportable forecast period used in our estimate of credit losses at March 31, 2026 was 12 months, consistent with the forecast period utilized since the adoption of CECL. Beyond the reasonable and supportable forecast period, we revert to historical loss information at the loan receivables segment level over a 6-month period on a straight-line basis, and utilize historical loss information thereafter for the remaining life of the portfolio.
Losses on loan receivables, including those which are modified for borrowers experiencing financial difficulty, are estimated and recognized upon origination of the loan, and updated based on expected credit losses for the life of the loan balance at the period end date. Expected credit loss estimates are developed using both quantitative models and qualitative adjustments, and incorporates a macroeconomic forecast. The current and forecasted economic conditions at the balance sheet date are reflected in our current estimate of expected credit losses, as well as expectations of the macroeconomic environment. Our allowance for credit losses remained flat at $10.4 billion at March 31, 2026, as compared to December 31, 2025, reflecting asset quality trends in line with the prior quarter. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies to our 2025 annual consolidated financial statements within our 2025 Form 10-K, for additional information on our significant accounting policies related to our allowance for credit losses.
Delinquent and Non-accrual Loans
The following tables provide information on our delinquent and non-accrual loan receivables:
| At March 31, 2026 ($ in millions) | 30-89 days delinquent | 90 or more days delinquent | Total past due | 90 or more days delinquent and accruing | Total non-accruing | ||||||||||||||||||||||||
| Credit cards | $ | 2,065 | $ | 2,193 | $ | 4,258 | $ | 2,193 | $ | — | |||||||||||||||||||
| Consumer installment loans | 144 | 46 | 190 | — | 46 | ||||||||||||||||||||||||
| Commercial credit products | 50 | 45 | 95 | 45 | — | ||||||||||||||||||||||||
| Total delinquent loans | $ | 2,259 | $ | 2,284 | $ | 4,543 | $ | 2,238 | $ | 46 | |||||||||||||||||||
| Percentage of total loan receivables | 2.2 | % | 2.3 | % | 4.5 | % | 2.2 | % | — | % |
| At December 31, 2025 ($ in millions) | 30-89 days delinquent | 90 or more days delinquent | Total past due | 90 or more days delinquent and accruing | Total non-accruing | ||||||||||||||||||||||||
| Credit cards | $ | 2,223 | $ | 2,181 | $ | 4,404 | $ | 2,181 | $ | — | |||||||||||||||||||
| Consumer installment loans | 144 | 31 | 175 | — | 31 | ||||||||||||||||||||||||
| Commercial credit products | 45 | 36 | 81 | 36 | — | ||||||||||||||||||||||||
| Total delinquent loans | $ | 2,412 | $ | 2,248 | $ | 4,660 | $ | 2,217 | $ | 31 | |||||||||||||||||||
| Percentage of total loan receivables | 2.3 | % | 2.2 | % | 4.5 | % | 2.1 | % | — | % |
Credit Quality Indicators
Our loan receivables portfolio includes both secured and unsecured loans. Secured loan receivables are largely comprised of consumer installment loans secured by equipment. Unsecured loan receivables are largely comprised of our open-end consumer and commercial revolving credit card loans. As part of our credit risk management activities, on an ongoing basis, we assess overall credit quality by reviewing information related to the performance of a customer’s account with us, including delinquency information, as well as information from credit bureaus relating to the customer’s broader credit performance. We utilize VantageScore credit data and scores to assist in our assessment of consumer credit quality. VantageScore credit data and scores are obtained at origination of the account and are refreshed, at a minimum quarterly, but could be as often as weekly, to assist in predicting customer behavior. We categorize these credit scores into the following three credit score categories: (i) 651 or higher, which are considered the strongest credits; (ii) 591 to 650, considered moderate credit risk; and (iii) 590 or less, which are considered weaker credits. There are certain customer accounts, including for our commercial credit products, for which a VantageScore credit score may not be available where we use alternative sources to assess their credit quality and predict behavior. The following table provides the most recent VantageScore credit scores, or equivalent, available for our revolving credit card and commercial credit product customers at March 31, 2026, December 31, 2025 and March 31, 2025, respectively, as a percentage of each class of loan receivables. The table below excludes 0.3%, 0.4% and 0.3% of our total loan receivables balance for our credit cards and commercial credit products at March 31, 2026, December 31, 2025 and March 31, 2025, respectively, which represents those customer accounts for which a VantageScore credit score, or equivalent, is not available.
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 651 or | 591 to | 590 or | 651 or | 591 to | 590 or | 651 or | 591 to | 590 or | |||||||||||||||||||||||||||||||||||||||||||||
| higher | 650 | less | higher | 650 | less | higher | 650 | less | |||||||||||||||||||||||||||||||||||||||||||||
| Credit cards | 73 | % | 19 | % | 8 | % | 74 | % | 18 | % | 8 | % | 72 | % | 19 | % | 9 | % | |||||||||||||||||||||||||||||||||||
| Commercial credit products | 82 | % | 12 | % | 6 | % | 83 | % | 11 | % | 6 | % | 83 | % | 11 | % | 6 | % |
Consumer Installment Loans
Delinquency trends are the primary credit quality indicator for our consumer installment loans, which we use to monitor credit quality and risk within the portfolio. The tables below include information on our consumer installment loans by origination year.
Consumer Installment Loans by Origination Year
| By origination year | |||||||||||||||||||||||||||||||||||||||||
| At March 31, 2026 ($ in millions) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Total | ||||||||||||||||||||||||||||||||||
| Amortized cost basis | $ | 478 | $ | 1,743 | $ | 1,338 | $ | 954 | $ | 580 | $ | 264 | $ | 5,357 | |||||||||||||||||||||||||||
| 30-89 days delinquent | $ | 12 | $ | 42 | $ | 31 | $ | 28 | $ | 21 | $ | 10 | $ | 144 | |||||||||||||||||||||||||||
| 90 or more days delinquent | $ | — | $ | 12 | $ | 10 | $ | 10 | $ | 10 | $ | 4 | $ | 46 |
| By origination year | |||||||||||||||||||||||||||||||||||||||||
| At December 31, 2025 ($ in millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | ||||||||||||||||||||||||||||||||||
| Amortized cost basis | $ | 1,959 | $ | 1,524 | $ | 1,091 | $ | 655 | $ | 241 | $ | 78 | $ | 5,548 | |||||||||||||||||||||||||||
| 30-89 days delinquent | $ | 37 | $ | 37 | $ | 35 | $ | 23 | $ | 9 | $ | 3 | $ | 144 | |||||||||||||||||||||||||||
| 90 or more days delinquent | $ | 9 | $ | 9 | $ | 7 | $ | 4 | $ | 1 | $ | 1 | $ | 31 |
Gross Charge-offs for Consumer Installment Loans by Origination Year
| By origination year | |||||||||||||||||||||||||||||||||||||||||
| For the three months ended ($ in millions) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Total | ||||||||||||||||||||||||||||||||||
| March 31, 2026 | $ | — | $ | 33 | $ | 25 | $ | 22 | $ | 14 | $ | 7 | $ | 101 | |||||||||||||||||||||||||||
| March 31, 2025 | $ | — | $ | — | $ | 37 | $ | 37 | $ | 25 | $ | 11 | $ | 110 |
Loan Modifications to Borrowers Experiencing Financial Difficulty
The following table provides information on our loan modifications made to borrowers experiencing financial difficulty during the periods presented, which do not include loans that are classified as loan receivables held for sale:
| Three months ended March 31, | 2026 | 2025 | ||||||||||||||||||||||||||||||
| ($ in millions) | Amount**(a)** | % of Total Class of Loan Receivables | Amount | % of Total Class of Loan Receivables | ||||||||||||||||||||||||||||
| Long-term modifications | ||||||||||||||||||||||||||||||||
| Credit cards | $ | 398 | 0.4 | % | $ | 439 | 0.5 | % | ||||||||||||||||||||||||
| Consumer installment loans | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Commercial credit products | 2 | 0.1 | % | 3 | 0.2 | % | ||||||||||||||||||||||||||
| Short-term modifications | ||||||||||||||||||||||||||||||||
| Credit cards | 218 | 0.2 | % | 255 | 0.3 | % | ||||||||||||||||||||||||||
| Consumer installment loans | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Commercial credit products | 1 | — | % | 1 | — | % | ||||||||||||||||||||||||||
| Total | $ | 619 | 0.6 | % | $ | 698 | 0.7 | % |
(a)Represents balance at enrollment date. Long-term and short-term loan modifications made to borrowers for the three months ended March 31, 2026 had amortized cost balances at March 31, 2026 of $385 million and $131 million, respectively.
Financial Effects of Loan Modifications to Borrowers Experiencing Financial Difficulty
As part of our loan modifications to borrowers experiencing financial difficulty, we may provide multiple concessions to minimize our economic loss and improve long-term loan performance and collectability.
For long-term modifications made in the three months ended March 31, 2026 and 2025, the financial effect of these modifications reduced the weighted-average interest rates by 97% for all periods presented. For short-term modifications made in the three months ended March 31, 2026 and 2025, unpaid balances of $11 million and $15 million, respectively, were forgiven related to borrowers who successfully exited the program.
Performance of Loans Modified to Borrowers Experiencing Financial Difficulty
The following tables provide information on the performance of loans modified to borrowers experiencing financial difficulty which have been modified within the previous 12 months from the applicable balance sheet date and remained in a modification program at March 31, 2026 and 2025, respectively:
| Amortized cost basis | |||||||||||||||||||||||
| At March 31, 2026 ($ in millions) | Current | 30-89 days delinquent | 90 or more days delinquent | Total past due**(a)** | |||||||||||||||||||
| Long-term modifications | |||||||||||||||||||||||
| Credit cards | $ | 922 | $ | 144 | $ | 113 | $ | 257 | |||||||||||||||
| Consumer installment loans | — | — | — | — | |||||||||||||||||||
| Commercial credit products | 4 | 1 | 1 | 2 | |||||||||||||||||||
| Short-term modifications | |||||||||||||||||||||||
| Credit cards | 58 | 33 | 40 | 73 | |||||||||||||||||||
| Consumer installment loans | — | — | — | — | |||||||||||||||||||
| Commercial credit products | — | — | — | — | |||||||||||||||||||
| Total loans modified | $ | 984 | $ | 178 | $ | 154 | $ | 332 | |||||||||||||||
| Percentage of total loan receivables | 1.0 | % | 0.2 | % | 0.1 | % | 0.3 | % |
| Amortized cost basis | |||||||||||||||||||||||
| At March 31, 2025 ($ in millions) | Current | 30-89 days delinquent | 90 or more days delinquent | Total past due**(a)** | |||||||||||||||||||
| Long-term modifications | |||||||||||||||||||||||
| Credit cards | $ | 997 | $ | 163 | $ | 131 | $ | 294 | |||||||||||||||
| Consumer installment loans | — | — | — | — | |||||||||||||||||||
| Commercial credit products | 4 | 1 | 1 | 2 | |||||||||||||||||||
| Short-term modifications | |||||||||||||||||||||||
| Credit cards | 65 | 40 | 48 | 88 | |||||||||||||||||||
| Consumer installment loans | — | — | — | — | |||||||||||||||||||
| Commercial credit products | — | — | — | — | |||||||||||||||||||
| Total loans modified | $ | 1,066 | $ | 204 | $ | 180 | $ | 384 | |||||||||||||||
| Percentage of total loan receivables | 1.1 | % | 0.2 | % | 0.2 | % | 0.4 | % |
(a) Once a loan has been modified, it only returns to current status if the borrower pays the total minimum payment due or if the loan is re-aged after three consecutive monthly program payments are received post the modification date.
Payment Defaults
The following table presents loans to borrowers experiencing financial difficulty that enrolled in a long-term modification program within the previous 12 months from the applicable balance sheet date, and experienced a payment default and charged-off during the period presented:
| For the three months ended March 31 ($ in millions) | 2026 | 2025 | |||||||||
| Credit cards | $ | 101 | $ | 110 | |||||||
| Consumer installment loans | — | — | |||||||||
| Commercial credit products | 1 | 1 | |||||||||
| Total | $ | 102 | $ | 111 |
Of the loans modified to borrowers experiencing financial difficulty that enrolled in a short-term modification program within the previous 12 months from the applicable balance sheet date, 60% had fully completed all required payments and successfully exited the program during both the three months ended March 31, 2026 and 2025.
Unfunded Lending Commitments
We manage the potential risk in credit commitments by limiting the total amount of credit, both by individual customer and in total, by monitoring the size and maturity of our portfolios and by applying a consistent underwriting approach for all of our credit products. Unused credit card lines available to our customers totaled approximately $443 billion and $440 billion at March 31, 2026 and December 31, 2025, respectively. While these amounts represented the total available unused credit card lines, we have not experienced and do not anticipate that all of our customers will access their entire available line at any given point in time.
Interest Income by Product
The following table provides additional information about our interest and fees on loans, including merchant discounts, from our loan receivables, including held for sale:
| Three months ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||||||||||||||
| Credit cards**(a)** | $ | 5,152 | $ | 5,055 | |||||||||||||||||||
| Consumer installment loans | 188 | 211 | |||||||||||||||||||||
| Commercial credit products | 72 | 45 | |||||||||||||||||||||
| Other | 1 | 1 | |||||||||||||||||||||
| Total**(b)** | $ | 5,413 | $ | 5,312 |
(a)Interest income on credit cards that was reversed related to accrued interest receivables written off was $611 million and $646 million for the three months ended March 31, 2026 and 2025, respectively.
(b)Deferred merchant discounts to be recognized in interest income at March 31, 2026 and December 31, 2025, were $1.7 billion and $1.8 billion, respectively, which are included in Accrued expenses and other liabilities in our Condensed Consolidated Statements of Financial Position.
NOTE 5. VARIABLE INTEREST ENTITIES
We use VIEs to securitize loan receivables and arrange public and private asset-backed financing in the ordinary course of business through Synchrony Card Issuance Trust, as well as private asset-backed financing through Synchrony Credit Card Master Note Trust and Synchrony Sales Finance Master Trust. Investors in these entities only have recourse to the assets owned by the entity and not to our general credit. We do not have implicit support arrangements with any VIE and we did not provide non-contractual support for previously transferred loan receivables to any of these VIEs in the three months ended March 31, 2026 and 2025. Our VIEs are able to accept new loan receivables and arrange new asset-backed financings, consistent with the requirements and limitations on such activities placed on the VIE by existing investors. Once an account has been designated to a VIE, the contractual arrangements we have require all existing and future loan receivables originated under such account to be transferred to the VIE. The amount of loan receivables held by our VIEs in excess of the minimum amount required under the asset-backed financing arrangements with investors may be removed by us under removal of accounts provisions. All loan receivables held by a VIE are subject to claims of third-party investors.
The loan receivables in these entities have risks and characteristics similar to our other loan receivables and were underwritten to the same standard. Accordingly, the performance of these assets has been similar to our other comparable loan receivables, and the blended performance of the pools of receivables in these entities reflects the eligibility criteria that we apply to determine which receivables are selected for transfer. Contractually, the cash flows from these loan receivables must first be used to pay third-party debt holders, as well as other expenses of the entity. Excess cash flows, if any, are available to us. The creditors of these entities have no claim on our other assets.
The table below summarizes the assets and liabilities of our consolidated securitization VIEs described above:
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Assets | |||||||||||
| Loan receivables, net(a) | $ | 19,702 | $ | 20,457 | |||||||
| Other assets(b) | 45 | 46 | |||||||||
| Total | $ | 19,747 | $ | 20,503 | |||||||
| Liabilities | |||||||||||
| Borrowings | $ | 8,915 | $ | 8,415 | |||||||
| Other liabilities | 27 | 28 | |||||||||
| Total | $ | 8,942 | $ | 8,443 |
(a) Includes $2.0 billion and $1.9 billion of related allowance for credit losses resulting in gross restricted loan receivables of $21.7 billion and $22.4 billion at March 31, 2026 and December 31, 2025, respectively.
(b) Includes $42 million of segregated funds held by the VIEs at both March 31, 2026 and December 31, 2025, which are classified as restricted cash and equivalents and included as a component of Other assets in our Condensed Consolidated Statements of Financial Position.
The balances presented above are net of intercompany balances and transactions that are eliminated in our condensed consolidated financial statements, including amounts related to servicing of the loan receivables held by our VIEs.
We provide servicing for all of our consolidated VIEs. Collections are required to be placed into segregated accounts owned by each VIE in amounts that meet contractually specified minimum levels. These segregated funds are invested in cash and cash equivalents and are restricted as to their use, principally to pay maturing principal and interest on debt and the related servicing fees. Collections above these minimum levels are remitted to us on a daily basis.
The table below summarizes selected financial metrics of our consolidated securitization VIEs described above:
| Three months ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||||||||||||||
| Interest and fees on loans | $ | 1,125 | $ | 1,050 | |||||||||||||||||||
| Provision for credit losses | $ | 241 | $ | 202 | |||||||||||||||||||
| Interest expense | $ | 106 | $ | 104 |
These amounts do not include intercompany transactions, which are eliminated in our condensed consolidated financial statements.
Non-consolidated VIEs
As part of our community reinvestment initiatives, we invest in funds that invest in affordable housing properties and receive affordable housing tax credits for these investments. We account for these investments using the proportional amortization method, where the costs of the investment are amortized in proportion to the income tax credits and other income tax benefits received. These investments are included in Other assets within our Condensed Consolidated Statements of Financial Position and totaled $903 million and $943 million at March 31, 2026 and December 31, 2025, respectively. At March 31, 2026, we are committed to provide funding related to these investments of $459 million, which is expected to be paid between 2026 and 2042, and is reported within Other liabilities within our Condensed Consolidated Statements of Financial Position.
The table below summarizes amortization expense and tax credits and other tax benefits associated with investments in affordable housing properties included in Provision for income taxes in our Condensed Consolidated Statements of Earnings:
| Three months ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||||||||||||||
| Amortization expense | $ | 40 | $ | 27 | |||||||||||||||||||
| Tax credits and other benefits | $ | (49) | $ | (33) |
Our other investments in non-consolidated VIEs totaled $293 million and $301 million at March 31, 2026 and December 31, 2025, respectively, and are included in Other assets within our Condensed Consolidated Statements of Financial Position. At March 31, 2026, the Company also had investment commitments of $207 million related to these investments. We may be required to fund these commitments between 2026 and 2046.
NOTE 6. INTANGIBLE ASSETS
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | Gross carrying amount | Accumulated amortization | Net | Gross carrying amount | Accumulated amortization | Net | |||||||||||||||||||||||||||||||||||
| Capitalized software | $ | 3,143 | $ | (2,020) | $ | 1,123 | $ | 3,072 | $ | (1,921) | $ | 1,151 | |||||||||||||||||||||||||||||
| Other | 247 | (147) | 100 | 247 | (143) | 104 | |||||||||||||||||||||||||||||||||||
| Total | $ | 3,390 | $ | (2,167) | $ | 1,223 | $ | 3,319 | $ | (2,064) | $ | 1,255 |
During the three months ended March 31, 2026, we recorded additions to intangible assets subject to amortization of $73 million, primarily related to capitalized software expenditures.
Amortization expense was $105 million and $86 million for the three months ended March 31, 2026 and 2025, respectively, and is included as a component of Other expense in our Condensed Consolidated Statements of Earnings.
NOTE 7. DEPOSITS
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Interest-bearing deposits: | |||||||||||
| Money market and other demand deposits | $ | 2,998 | $ | 2,837 | |||||||
| Savings | 30,138 | 29,777 | |||||||||
| Certificates of deposit: | |||||||||||
| Direct | 43,631 | 42,229 | |||||||||
| Brokered | 3,122 | 3,316 | |||||||||
| Brokered sweep accounts | 2,589 | 2,589 | |||||||||
| Total interest-bearing deposits | 82,478 | 80,748 | |||||||||
| Total non-interest-bearing deposits | 416 | 396 | |||||||||
| Total deposits | $ | 82,894 | $ | 81,144 |
Certificates of Deposit
At March 31, 2026, our certificates of deposit maturing for the remainder of 2026 and over the next four years and thereafter were as follows:
| ($ in millions) | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | ||||||||||||||||||||||||||||||||
| Certificates of deposit | $ | 27,990 | $ | 12,735 | $ | 2,388 | $ | 1,263 | $ | 2,085 | $ | 292 |
At March 31, 2026 and December 31, 2025, direct certificates of deposit of $12.8 billion and $12.3 billion, respectively, were of denominations at or exceeding applicable FDIC insurance limits, which are generally $250,000 per depositor for each account ownership category. These amounts include partially insured certificates of deposit. At March 31, 2026 and December 31, 2025, the portion of these direct certificates of deposit estimated to be uninsured was $4.4 billion and $4.2 billion, respectively. Brokered certificates of deposit are assumed to be individual deposit balances within applicable FDIC insurance limits.
Brokered Sweep Deposits
Our broker network deposit sweeps are procured through a program arranger who channels account deposits to us. Unless extended, the contracts associated with these broker network deposit sweeps will terminate between 2026 and 2029.
NOTE 8. BORROWINGS
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||
| ($ in millions) | Maturity date | Interest Rate | Weighted average interest rate | Outstanding Amount**(a)(b)** | Outstanding Amount**(a)(b)** | ||||||||||||||||||||||||
| Borrowings of consolidated securitization entities: | |||||||||||||||||||||||||||||
| Fixed securitized borrowings | 2026 - 2029 | 4.06% - 5.74% | 4.90 | % | $ | 5,990 | $ | 5,490 | |||||||||||||||||||||
| Floating securitized borrowings | 2027 - 2028 | 4.36% - 4.66% | 4.48 | % | 2,925 | 2,925 | |||||||||||||||||||||||
| Total borrowings of consolidated securitization entities | 4.77 | % | 8,915 | 8,415 | |||||||||||||||||||||||||
| Senior unsecured notes: | |||||||||||||||||||||||||||||
| Synchrony Financial senior unsecured notes: | |||||||||||||||||||||||||||||
| Fixed senior unsecured notes | 2026 - 2031 | 2.88% - 5.15% | 3.90 | % | 2,892 | 2,892 | |||||||||||||||||||||||
| Fixed to floating senior unsecured notes(c) | 2029 - 2036 | 4.95% - 6.00% | 5.46 | % | 3,280 | 2,534 | |||||||||||||||||||||||
| Synchrony Bank senior unsecured notes: | |||||||||||||||||||||||||||||
| Fixed senior unsecured notes | 2027 | 5.63% | 5.63 | % | 599 | 599 | |||||||||||||||||||||||
| Total senior unsecured notes | 4.81 | % | 6,771 | 6,025 | |||||||||||||||||||||||||
| Subordinated unsecured notes: | |||||||||||||||||||||||||||||
| Synchrony Financial subordinated unsecured notes: | |||||||||||||||||||||||||||||
| Fixed subordinated unsecured notes | 2033 | 7.25% | 7.25 | % | 742 | 742 | |||||||||||||||||||||||
| Total senior and subordinated unsecured notes | 5.05 | % | 7,513 | 6,767 | |||||||||||||||||||||||||
| Total borrowings | $ | 16,428 | $ | 15,182 |
(a)Includes unamortized debt premiums, discounts and issuance costs.
(b)The Company may redeem certain borrowings prior to their original contractual maturity dates in accordance with the optional redemption provision specified in the respective instruments.
(c)Includes $750 million principal amount issued in February 2026, interest rate fixed at 4.947% through February 24, 2031; resets February 25, 2031 to floating rate based on compounded Secured Overnight Financing Rate ("SOFR") plus 153 basis points through maturity in February 2032.
Additional Sources of Liquidity
We have undrawn committed and uncommitted capacity under our credit facilities from private lenders under our securitization programs, subject to customary borrowing conditions, and also have access to the Federal Reserve discount window. At both March 31, 2026 and December 31, 2025, we had:
-
an aggregate of $2.6 billion of undrawn capacity under our securitization financings, of which $2.1 billion was committed and $450 million was uncommitted, and
-
available borrowing capacity through the Federal Reserve discount window of $10.4 billion at March 31, 2026 and $10.0 billion at December 31, 2025, based on the amount and type of assets pledged.
NOTE 9. FAIR VALUE MEASUREMENTS
For a description of how we estimate fair value, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies in our 2025 annual consolidated financial statements within our 2025 Form 10-K.
The following tables present our assets measured at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis were not material for the periods presented.
Recurring Fair Value Measurements
| At March 31, 2026 ($ in millions) | Level 1 | Level 2 | Level 3 | Total**(a)** | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Debt securities | |||||||||||||||||||||||
| U.S. government and federal agency | $ | — | $ | 2,181 | $ | — | $ | 2,181 | |||||||||||||||
| State and municipal | — | — | 34 | 34 | |||||||||||||||||||
| Residential mortgage-backed | — | 291 | — | 291 | |||||||||||||||||||
| Asset-backed | — | 526 | — | 526 | |||||||||||||||||||
| Other | — | — | 8 | 8 | |||||||||||||||||||
| Other(b) | 14 | — | 6 | 20 | |||||||||||||||||||
| Total | $ | 14 | $ | 2,998 | $ | 48 | $ | 3,060 | |||||||||||||||
| At December 31, 2025 ($ in millions) | Level 1 | Level 2 | Level 3 | Total**(a)** | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Debt securities | |||||||||||||||||||||||
| U.S. government and federal agency | $ | — | $ | 1,492 | $ | — | $ | 1,492 | |||||||||||||||
| State and municipal | — | — | 35 | 35 | |||||||||||||||||||
| Residential mortgage-backed | — | 297 | — | 297 | |||||||||||||||||||
| Asset-backed | — | 515 | — | 515 | |||||||||||||||||||
| Other | — | — | 9 | 9 | |||||||||||||||||||
| Other(b) | 15 | — | 7 | 22 | |||||||||||||||||||
| Total | $ | 15 | $ | 2,304 | $ | 51 | $ | 2,370 |
(a) For the three months ended March 31, 2026 and 2025, there were no fair value measurements transferred between levels and changes in our Level 3 assets and liabilities were not material.
(b) Other is primarily comprised of equity investments measured at fair value, which are included in Other assets in our Condensed Consolidated Statements of Financial Position.
Level 3 Fair Value Measurements
Our Level 3 recurring fair value measurements primarily relate to state and municipal and corporate debt instruments, which are valued using non-binding broker quotes or other third-party sources. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies in our 2025 annual consolidated financial statements within our 2025 Form 10-K for a description of our process to evaluate third-party pricing servicers. Our state and municipal debt securities are classified as available-for-sale with changes in fair value included in Accumulated other comprehensive income in our Condensed Consolidated Statements of Financial Position.
Financial Assets and Financial Liabilities Carried at Other Than Fair Value
| Carrying | Corresponding fair value amount | ||||||||||||||||||||||||||||
| At March 31, 2026 ($ in millions) | value | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
| Financial Assets | |||||||||||||||||||||||||||||
| Financial assets for which carrying values equal or approximate fair value(a): | |||||||||||||||||||||||||||||
| Cash and equivalents | $ | 20,559 | $ | 20,559 | $ | 19,511 | $ | 1,048 | $ | — | |||||||||||||||||||
| Accrued interest receivable | $ | 44 | $ | 44 | $ | 44 | $ | — | $ | — | |||||||||||||||||||
| Other assets(b) | $ | 44 | $ | 44 | $ | 44 | $ | — | $ | — | |||||||||||||||||||
| Financial assets carried at other than fair value: | |||||||||||||||||||||||||||||
| Loan receivables, net(c) | $ | 89,655 | $ | 102,866 | $ | — | $ | — | $ | 102,866 | |||||||||||||||||||
| Financial Liabilities | |||||||||||||||||||||||||||||
| Financial liabilities for which carrying values equal or approximate fair value(a): | |||||||||||||||||||||||||||||
| Accrued interest payable | $ | 229 | $ | 229 | $ | 229 | $ | — | $ | — | |||||||||||||||||||
| Financial liabilities carried at other than fair value: | |||||||||||||||||||||||||||||
| Deposits(d) | $ | 82,894 | $ | 83,115 | $ | — | $ | 83,115 | $ | — | |||||||||||||||||||
| Borrowings of consolidated securitization entities | $ | 8,915 | $ | 8,944 | $ | — | $ | 6,022 | $ | 2,922 | |||||||||||||||||||
| Senior and subordinated unsecured notes | $ | 7,513 | $ | 7,450 | $ | — | $ | 7,450 | $ | — | |||||||||||||||||||
| Carrying | Corresponding fair value amount | ||||||||||||||||||||||||||||
| At December 31, 2025 ($ in millions) | value | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
| Financial Assets | |||||||||||||||||||||||||||||
| Financial assets for which carrying values equal or approximate fair value(a): | |||||||||||||||||||||||||||||
| Cash and equivalents | $ | 14,973 | $ | 14,973 | $ | 14,973 | $ | — | $ | — | |||||||||||||||||||
| Accrued interest receivable | $ | 27 | $ | 27 | $ | 27 | $ | — | $ | — | |||||||||||||||||||
| Other assets(b) | $ | 44 | $ | 44 | $ | 44 | $ | — | $ | — | |||||||||||||||||||
| Financial assets carried at other than fair value: | |||||||||||||||||||||||||||||
| Loan receivables, net(c) | $ | 93,364 | $ | 106,591 | $ | — | $ | — | $ | 106,591 | |||||||||||||||||||
| Financial Liabilities | |||||||||||||||||||||||||||||
| Financial liabilities for which carrying values equal or approximate fair value(a): | |||||||||||||||||||||||||||||
| Accrued interest payable | $ | 287 | $ | 287 | $ | 287 | $ | — | $ | — | |||||||||||||||||||
| Financial liabilities carried at other than fair value: | |||||||||||||||||||||||||||||
| Deposits(d) | $ | 81,144 | $ | 81,374 | $ | — | $ | 81,374 | $ | — | |||||||||||||||||||
| Borrowings of consolidated securitization entities | $ | 8,415 | $ | 8,477 | $ | — | $ | 5,559 | $ | 2,918 | |||||||||||||||||||
| Senior and subordinated unsecured notes | $ | 6,767 | $ | 6,870 | $ | — | $ | 6,870 | $ | — |
(a) Carrying value approximates fair value as the financial assets and liabilities are liquid in nature or have a short-term maturity.
(b) This balance relates to restricted cash and equivalents, which is included in Other assets in our Condensed Consolidated Statements of Financial Position.
(c) Excludes financial assets for which we have elected the fair value option. Under certain retail partner program agreements, the expected sales proceeds in the event of a sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above.
(d)Includes demand deposits with no defined maturity.
Equity Securities Without Readily Determinable Fair Values
| Three months ended | |||||||||||||||||||||||
| At or for the periods ended March 31 ($ in millions) | 2026 | 2025 | |||||||||||||||||||||
| Carrying value(a) | $ | 268 | $ | 275 | |||||||||||||||||||
| Upward adjustments(b) | $ | — | $ | — | |||||||||||||||||||
| Downward adjustments(b) | $ | — | $ | — |
(a) Carrying value reflects cumulative purchases and sales in addition to upward and downward carrying value changes, and at December 31, 2025 was $269 million.
(b) Between January 1, 2018 and March 31, 2026, cumulative upward and downward carrying value adjustments for equity securities held at March 31, 2026 were $201 million and $(10) million, respectively.
NOTE 10. REGULATORY AND CAPITAL ADEQUACY
At March 31, 2026 and December 31, 2025, Synchrony Financial met all minimum capital requirements and the applicable requirements to be deemed well-capitalized pursuant to Federal Reserve Board regulations. At March 31, 2026 and December 31, 2025, the Bank also met all applicable requirements to be deemed well-capitalized pursuant to OCC regulations and for purposes of the Federal Deposit Insurance Act. There are no conditions or events subsequent to March 31, 2026 that management believes have changed the Company's or the Bank’s capital category.
The actual capital amounts, ratios and the applicable required minimums of the Company and the Bank are as follows:
Synchrony Financial
| At March 31, 2026 ($ in millions) | Actual | Minimum for capital adequacy purposes | |||||||||||||||
| Amount | Ratio**(a)** | Ratio**(b)** | |||||||||||||||
| Total risk-based capital | $ | 16,339 | 16.0 | % | 8.0 | % | |||||||||||
| Tier 1 risk-based capital | $ | 14,207 | 13.9 | % | 6.0 | % | |||||||||||
| Tier 1 leverage | $ | 14,207 | 12.1 | % | 4.0 | % | |||||||||||
| Common equity Tier 1 Capital | $ | 12,985 | 12.7 | % | 4.5 | % |
| At December 31, 2025 ($ in millions) | Actual | Minimum for capital adequacy purposes | |||||||||||||||
| Amount | Ratio**(a)** | Ratio**(b)** | |||||||||||||||
| Total risk-based capital | $ | 16,632 | 15.8 | % | 8.0 | % | |||||||||||
| Tier 1 risk-based capital | $ | 14,464 | 13.8 | % | 6.0 | % | |||||||||||
| Tier 1 leverage | $ | 14,464 | 12.5 | % | 4.0 | % | |||||||||||
| Common equity Tier 1 Capital | $ | 13,242 | 12.6 | % | 4.5 | % |
Synchrony Bank
| At March 31, 2026 ($ in millions) | Actual | Minimum for capital adequacy purposes | Minimum to be well-capitalized under prompt corrective action provisions | ||||||||||||||||||||
| Amount | Ratio**(a)** | Ratio**(b)** | Ratio | ||||||||||||||||||||
| Total risk-based capital | $ | 15,943 | 16.4 | % | 8.0 | % | 10.0 | % | |||||||||||||||
| Tier 1 risk-based capital | $ | 13,863 | 14.2 | % | 6.0 | % | 8.0 | % | |||||||||||||||
| Tier 1 leverage | $ | 13,863 | 12.3 | % | 4.0 | % | 5.0 | % | |||||||||||||||
| Common equity Tier 1 capital | $ | 13,863 | 14.2 | % | 4.5 | % | 6.5 | % |
| At December 31, 2025 ($ in millions) | Actual | Minimum for capital adequacy purposes | Minimum to be well-capitalized under prompt corrective action provisions | ||||||||||||||||||||
| Amount | Ratio**(a)** | Ratio**(b)** | Ratio | ||||||||||||||||||||
| Total risk-based capital | $ | 15,844 | 15.8 | % | 8.0 | % | 10.0 | % | |||||||||||||||
| Tier 1 risk-based capital | $ | 13,731 | 13.7 | % | 6.0 | % | 8.0 | % | |||||||||||||||
| Tier 1 leverage | $ | 13,731 | 12.4 | % | 4.0 | % | 5.0 | % | |||||||||||||||
| Common equity Tier 1 capital | $ | 13,731 | 13.7 | % | 4.5 | % | 6.5 | % |
(a)Capital ratios are calculated based on the Basel III Standardized Approach rules.
(b)At March 31, 2026 and December 31, 2025, Synchrony Financial and the Bank also must maintain a stress capital buffer or capital conservation buffer, as applicable, in excess of minimum risk-based capital ratios, which exclude the Tier 1 leverage ratio, by at least 2.5 percentage points to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees.
The Bank may pay dividends on its stock, with consent or non-objection from the OCC and the Federal Reserve Board, among other things, if its regulatory capital would not thereby be reduced below the applicable regulatory capital requirements.
For additional information on the minimum capital requirements for both Synchrony Financial and the Bank, see "Regulation - Regulation Relating to Our Business - Capital for both Savings and Loan Holding Company Regulation and Savings Association Regulation", as applicable, in addition to Note 11. Regulatory and Capital Adequacy, in our 2025 Form 10-K.
NOTE 11. EARNINGS PER SHARE
Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the assumed conversion of all dilutive securities, which are calculated using the treasury stock method.
The following table presents the calculation of basic and diluted earnings per common share:
| Three months ended March 31, | |||||||||||||||||||||||
| ($ and shares in millions, except per share data) | 2026 | 2025 | |||||||||||||||||||||
| Net earnings | $ | 805 | $ | 757 | |||||||||||||||||||
| Preferred stock dividends | (21) | (21) | |||||||||||||||||||||
| Net earnings available to common stockholders | $ | 784 | $ | 736 | |||||||||||||||||||
| Weighted average common shares outstanding, basic | 342.4 | 385.2 | |||||||||||||||||||||
| Effect of dilutive securities | 3.6 | 4.2 | |||||||||||||||||||||
| Weighted average common shares outstanding, dilutive | 346.0 | 389.4 | |||||||||||||||||||||
| Earnings per basic common share | $ | 2.29 | $ | 1.91 | |||||||||||||||||||
| Earnings per diluted common share | $ | 2.27 | $ | 1.89 |
We have issued stock-based awards under the Synchrony Financial 2024 Long-Term Incentive Plan, along with prior incentive plans. Awards that were considered anti-dilutive and therefore were excluded from the computation of diluted earnings per common share were less than 1 million shares for each of the periods presented.
NOTE 12. INCOME TAXES
Unrecognized Tax Benefits
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Unrecognized tax benefits, excluding related interest expense and penalties(a) | $ | 228 | $ | 218 | |||||||
| Portion that, if recognized, would reduce tax expense and effective tax rate(b) | $ | 180 | $ | 172 | |||||||
(a)Interest and penalties related to unrecognized tax benefits were not material for all periods presented.
(b)Comprised of federal unrecognized tax benefits and state and local unrecognized tax benefits net of the effects of associated U.S. federal income taxes. Excludes amounts attributable to any related valuation allowances resulting from associated increases in deferred tax assets.
We establish a liability that represents the difference between a tax position taken (or expected to be taken) on an income tax return and the amount of taxes recognized in our financial statements. The liability associated with the unrecognized tax benefits is adjusted periodically when new information becomes available.
In the current year, the Company executed a Memorandum of Understanding with the IRS to participate voluntarily in the IRS Compliance Assurance Process (“CAP”) program for the 2026 tax year, and thus the tax year is under IRS review. The IRS is also examining our 2025 tax year, and we expect the review will be completed in the current year. Additionally, we are under examination in various states going back to 2019.
We believe that there are no issues or claims that are likely to significantly impact our results of operations, financial position or cash flows. We further believe that we have made adequate provision for all income tax uncertainties that could result from such examinations.
NOTE 13. SEGMENT REPORTING
We conduct our operations through a single business segment, which derives interest and fee income earned on our credit products we offer to our customers. There have not been any changes to the basis of segmentation or the measurement of performance as compared to our 2025 Form 10-K.
The following table presents segment information for the periods presented herein:
| Three months ended March 31, | |||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||||||||||||||
| Interest and fees on loans | $ | 5,413 | $ | 5,312 | |||||||||||||||||||
| Interest on cash and debt securities | 190 | 238 | |||||||||||||||||||||
| Total interest income | 5,603 | 5,550 | |||||||||||||||||||||
| Total interest expense | 968 | 1,086 | |||||||||||||||||||||
| Net interest income | 4,635 | 4,464 | |||||||||||||||||||||
| Retailer share arrangements | (1,070) | (895) | |||||||||||||||||||||
| Reserve build (release) | (11) | (97) | |||||||||||||||||||||
| Net charge-offs | 1,346 | 1,588 | |||||||||||||||||||||
| Provision for credit losses | 1,335 | 1,491 | |||||||||||||||||||||
| Other income: | |||||||||||||||||||||||
| Other income | 133 | 149 | |||||||||||||||||||||
| Total other income | 133 | 149 | |||||||||||||||||||||
| Other expense: | |||||||||||||||||||||||
| Employee costs | 515 | 506 | |||||||||||||||||||||
| Professional fees | 209 | 217 | |||||||||||||||||||||
| Marketing and business development | 114 | 116 | |||||||||||||||||||||
| Information processing | 262 | 219 | |||||||||||||||||||||
| Fraud-related operational losses | 88 | 41 | |||||||||||||||||||||
| Other segment items(a) | 128 | 144 | |||||||||||||||||||||
| Total other expense | 1,316 | 1,243 | |||||||||||||||||||||
| Provision for income taxes | 242 | 227 | |||||||||||||||||||||
| Net earnings | $ | 805 | $ | 757 | |||||||||||||||||||
_____________
(a)Represents the total amount of other expenses included in Net earnings, including postage and various other corporate overhead items such as facilities costs and telephone charges.
Our segment assets represent our Total assets as presented on the Condensed Consolidated Statements of Financial Position.
NOTE 14. LEGAL PROCEEDINGS AND REGULATORY MATTERS
In the normal course of business, from time to time, we have been named as a defendant in various legal proceedings, including arbitrations, class actions and other litigation, arising in connection with our business activities. Certain of the legal actions include claims for substantial compensatory and/or punitive damages, or claims for indeterminate amounts of damages. We are also involved, from time to time, in reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our business (collectively, “regulatory matters”), which could subject us to significant fines, penalties, obligations to change our business practices or other requirements resulting in increased expenses, diminished income and damage to our reputation. We contest liability and/or the amount of damages as appropriate in each pending matter. In accordance with applicable accounting guidance, we establish an accrued liability for legal and regulatory matters when those matters present loss contingencies which are both probable and reasonably estimable.
Legal proceedings and regulatory matters are subject to many uncertain factors that generally cannot be predicted with assurance, and we may be exposed to losses in excess of any amounts accrued.
For some matters, we are able to determine that an estimated loss, while not probable, is reasonably possible. For other matters, including those that have not yet progressed through discovery and/or where important factual information and legal issues are unresolved, we are unable to make such an estimate. We currently estimate that the reasonably possible losses for legal proceedings and regulatory matters, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a possible loss, are immaterial. This represents management’s estimate of possible loss with respect to these matters and is based on currently available information. This estimate of possible loss does not represent our potential maximum loss exposure. The legal proceedings and regulatory matters underlying the estimate will change from time to time and actual results may vary significantly from current estimates.
Our estimate of reasonably possible losses involves significant judgment, given the varying stages of the proceedings, the existence of numerous yet to be resolved issues, the breadth of the claims (often spanning multiple years), unspecified damages and/or the novelty of the legal issues presented. Based on our current knowledge, we do not believe that we are a party to any pending legal proceeding or regulatory matters that would have a material adverse effect on our condensed consolidated financial condition or liquidity. However, in light of the uncertainties involved in such matters, the ultimate outcome of a particular matter could be material to our operating results for a particular period depending on, among other factors, the size of the loss or liability imposed and the level of our earnings for that period, and could adversely affect our business and reputation.
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