Synchrony Financial SYF Form 10-Q filing Q1 FY2026

PART II - OTHER INFORMATION

Item 1. Legal Proceedings 57

Item 1A. Risk Factors 57

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 57

Item 3. Defaults Upon Senior Securities 57

Item 4. Mine Safety Disclosures 57

Item 5. Other Information 58

ITEM 1. FINANCIAL STATEMENTS

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Earnings (Unaudited)

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Amounts presented net of taxes.

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Financial Position (Unaudited)

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Changes in Equity (Unaudited)

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

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:

(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:

(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

(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

(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

(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:

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.

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

Gross Charge-offs for Consumer Installment Loans by Origination Year

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:

(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:

(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:

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:

(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:

(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:

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:

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

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

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:

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

(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

(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

(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

(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

Synchrony Bank

(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:

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

(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:

(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.

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 2025 Form 10-K. The discussion below contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations. See “Cautionary Note Regarding Forward-Looking Statements.”

Introduction and Business Overview ____________________________________________________________________________________________

We are a premier consumer financial services company delivering one of the industry's most complete digitally-enabled product suites. Our experience, expertise and scale encompass a broad spectrum of industries including digital, health and wellness, retail, telecommunications, home, auto, outdoor, pet and more. We have an established and diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers, which we refer to as our “partners.” For the three months ended March 31, 2026, we financed $43.0 billion of purchase volume and had 68.8 million average active accounts and at March 31, 2026, we had $100.1 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 March 31, 2026, we had $82.9 billion in deposits, which represented 83% of our total funding sources.

Our Sales Platforms

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. Our Home & Auto sales platform partners include a wide range of key retailers in the home improvement, furniture, bedding, flooring, appliance and electronics industries, 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 digital-first brands and merchants, such as the QVC Group, Inc., 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 six large retail partners: Belk, Fleet Farm, JCPenney, OnePay, 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

Our Lifestyle sales platform 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, 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, as well as fee income generated from Versatile Credit. 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

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

The following table sets forth each credit product by type and indicates the percentage of our total loan receivables that are under standard terms only or pursuant to a promotional financing offer at March 31, 2026:

Credit Cards

We offer the following principal types of credit cards:

• Private Label Credit Cards. Private label credit cards are partner-branded credit cards (e.g., Lowe’s or Amazon) or program-branded credit cards (e.g., Synchrony Car Care or CareCredit) that are used primarily for the purchase of goods and services from the partner or within the program network. In addition, in some cases, cardholders may be permitted to access their credit card accounts for cash advances. Credit under our private label credit cards is extended either on standard terms only or pursuant to a promotional financing offer.
• Co-Branded Cards. Our co-branded cards comprise our patented Dual Cards and general purpose co-branded credit cards. Our 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 a Synchrony-branded general purpose credit card. Our co-branded cards are offered across all of our sales platforms and credit is typically extended on standard terms only. We offer co-branded cards through over 15 of our large partners, of which the majority are Dual Cards, as well as our CareCredit Dual Card. Our consumer co-branded cards totaled 34% of our total loan receivables portfolio at March 31, 2026.

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 in the United States, primarily in our Lifestyle sales platform for power products in our Outdoor market (motorcycles, ATVs and lawn and garden). We also offer unsecured installment loans to consumers across all of our sales platforms through various products, such as Synchrony's Pay Later solutions. Installment loans are closed-end credit accounts where the customer pays down the outstanding balance in installments. Installment loans, other than our Synchrony Pay Later Pay in 4 product, are generally assessed periodic finance charges using fixed interest rates.

Business Trends and Conditions

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 2025 Form 10-K. For a discussion of how certain trends and conditions impacted the three months ended March 31, 2026, see “—Results of Operations.”

Seasonality

Our business is typically influenced by a seasonal pattern, with purchase volume and loan receivables typically rising beginning in the third quarter and generally peaking in fourth quarter, including the impacts of consumer spending for U.S. holidays, then declining through the first and second quarters as customers pay their balances down.

Delinquency rates and delinquent loan receivables balances typically rise in the third and fourth quarters as customer payment rates decline, resulting in higher net charge-off rates in the first half of the calendar year. Delinquent loan receivables at year-end are more likely to return to current status than those delinquent at interim period ends. Consistent with this historical experience, our allowance for credit losses as a percentage of total loan receivables is generally higher at interim period ends than at year-end and may increase mid-year even when certain credit metrics improve.

These seasonal impacts to purchase volume and our loan receivables balances may materially affect our results of operations, delinquency metrics and the allowance for credit losses as a percentage of total loan receivables with the most pronounced effects typically occurring between the fourth quarter and the subsequent first quarter. Our loan receivables decreased by $3.7 billion, or 3.6% to $100.1 billion at March 31, 2026 compared to $103.8 billion at December 31, 2025, and our allowance for credit losses as a percentage of total loan receivables increased to 10.42% at March 31, 2026, from 10.06% at December 31, 2025, reflecting these same seasonal trends.

Results of Operations

Summary Highlights for the Three Months Ended March 31, 2026

Earnings

Trends disclosed below are compared to the three months ended March 31, 2025, as applicable, except as otherwise noted.

Net earnings increased to $805 million from $757 million for the three months ended March 31, 2026, primarily reflecting the following key drivers:

• Increase in net interest income of $171 million, primarily driven by lower interest expense and an increase in interest and fees on loans of 1.9%, partially offset by lower interest income on our liquidity portfolio.
• Decrease in provision for credit losses of $156 million, primarily driven by lower net charge-offs, partially offset by a $97 million reserve release in the prior year period.
• These drivers were partially offset by higher retailer share arrangements of $175 million and higher other expense of $73 million.

Loan receivables and Asset Quality

• Loan receivables were flat at $100.1 billion at March 31, 2026, reflecting higher purchase volume offset by the effects of higher payment rates.
• Over-30 day loan delinquencies as a percentage of period-end loan receivables increased 2 basis points to 4.54% at March 31, 2026 from 4.52% at March 31, 2025. The net charge-off rate decreased 96 basis points to 5.42% for the three months ended March 31, 2026.
• Our allowance coverage ratio (allowance for credit losses as a percentage of period-end loan receivables) decreased to 10.42% at March 31, 2026, as compared to 10.87% at March 31, 2025.

Funding, Liquidity and Capital

• At March 31, 2026, deposits represented 83% of our total funding sources. Total deposits increased by 2.2% to $82.9 billion at March 31, 2026, compared to December 31, 2025.
• During the three months ended March 31, 2026, we repurchased $900 million of our outstanding common stock, and declared and paid cash dividends of $0.30 per share, or $104 million in the aggregate.
• In April 2026, the Company announced that the Board approved a new share repurchase program of up to $6.5 billion of the Company’s common stock, which commences in the second quarter of 2026 and, in a change from our prior share repurchase programs, does not have an expiration date. The new share repurchase program replaces the Company’s prior program, which was scheduled to expire on June 30, 2026. The pace and amount of share repurchases under the program are flexible, and will be executed from time to time subject to various factors, including capital levels, financial performance, market conditions and legal and regulatory requirements, and in accordance with our capital plans. In addition, the Board approved a planned increase to our quarterly dividend to $0.34 per common share commencing in the third quarter of 2026.

2026 Partner Agreements

During the three months ended March 31, 2026, and to date, we continued to expand and diversify our portfolio with the addition or renewal of more than 15 partners, which included the following:

New partnerships:

• Indian Motorcycle Lifestyle

Program extensions:

• Harbor Freight Home & Auto
• Miracle-Ear Health & Wellness
• Expanded CareCredit partnerships with pet insurance providers, Figo and Embrace, to enable reimbursements back to CareCredit accounts, making the solution available for more than 1.7 million pets.

Other Financial and Statistical Data

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

(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 table sets 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:

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

(2) Includes average restricted cash balances of $60 million and $690 million for the three months ended March 31, 2026 and 2025, respectively.

(3) Interest income on loan receivables includes fees on loans, which primarily consist of late fees on our credit products, of $559 million and $588 million for the three months ended March 31, 2026 and 2025, 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 2025 Form 10-K.

Interest Income

Interest income increased by $53 million, or 1.0% for the three months ended March 31, 2026, reflecting an increase of 1.9% in interest and fees on loans, partially offset by lower interest income from our liquidity portfolio. The increase in interest and fees on loans was primarily driven by the impact of our product, pricing and policy changes, partially offset by lower benchmark rates.

Average interest-earning assets

Average loan receivables, including held for sale, were flat compared to the three months ended March 31, 2025, reflecting higher purchase volume offset by the effects of higher payment rates. Purchase volume increased by 5.6% for the three months ended March 31, 2026, primarily reflecting the impacts of partner expansion and higher spend per average active account.

Yield on average interest-earning assets

The yield on average interest-earning assets increased for the three months ended March 31, 2026 primarily due to increases in the yield on average loan receivables and the mix of loan receivables as a percentage of interest-earning assets versus the prior year, partially offset by a lower yield on our liquidity portfolio. The loan receivables yield increased 47 basis points to 21.80% for the three months ended March 31, 2026, primarily driven by the impacts of our product, pricing and policy changes, partially offset by the impact of lower benchmark rates.

Interest Expense

Interest expense decreased by $118 million, or 10.9%, for the three months ended March 31, 2026, primarily due to lower interest-bearing liabilities cost associated with lower benchmark rates. Our cost of funds decreased to 4.04% for the three months ended March 31, 2026, compared to 4.48% for the three months ended March 31, 2025.

Average interest-bearing liabilities

Net Interest Income

Net interest income increased by $171 million, or 3.8%, for the three months ended March 31, 2026, resulting from the changes in interest income and interest expense discussed above.

Retailer Share Arrangements

Retailer share arrangements increased by $175 million, or 19.6%, for the three months ended March 31, 2026, reflecting program performance which included lower net charge-offs and the impact of our product, pricing and policy changes.

Provision for Credit Losses

Provision for credit losses decreased by $156 million, or 10.5%, for the three months ended March 31, 2026, primarily driven by lower net charge-offs, partially offset by a reserve release in the prior year period.

Net charge-offs for the three months ended March 31, 2026 decreased by $242 million. The net charge-off rate for the three months ended March 31, 2026 decreased by 96 basis points to 5.42%, as compared to the prior year period, and we expect our net charge-off rate for the year ended December 31, 2026 will be below our long-term target range of 5.5% to 6.0%.

The reserve release for the three months ended March 31, 2026 was $11 million, as compared to a reserve release of $97 million in the prior year period.

Other Income

Other income decreased by $16 million to $133 million, for the three months ended March 31, 2026.

The decrease in the three months ended March 31, 2026 was primarily driven by higher loyalty costs, partially offset by higher interchange revenue and protection product revenue.

Other Expense

Other expense increased by $73 million, or 5.9%, for the three months ended March 31, 2026.

The increase in the three months ended March 31, 2026 was primarily driven by higher information processing costs and higher other expense. The increase in information processing costs was primarily related to technology investments, as well as higher association fees related to the purchase volume growth on our co-branded cards. The increase in other expense was primarily driven by higher operational losses.

Provision for Income Taxes

The effective tax rate for the three months ended March 31, 2026 was flat compared to the prior year. The effective tax rate differs from the applicable U.S. federal statutory tax rate primarily due to state income taxes.

Platform Analysis

As discussed above under “—Our Sales Platforms,” we offer our credit products primarily through five sales platforms (Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle). The following is a discussion of certain supplemental information for the three months ended March 31, 2026, for each of our five sales platforms and Corp, Other.

In 2025, we sold $0.2 billion of loan receivables associated with a Home & Auto partner program agreement. All related prior-period reported metrics for our Home & Auto sales platform and Corp, Other have been recast to reflect activity related to this portfolio within Corp, Other below.

Home & Auto

Home & Auto interest and fees on loans decreased by $23 million, or 1.6%, for the three months ended March 31, 2026, primarily driven by lower average loan receivables, partially offset by higher loan receivables yield. The decrease in average loan receivables was primarily driven by higher payment rates. The increase in loan receivables yield reflects the impact of product, pricing and policy changes, partially offset by lower late fee incidence.

Purchase volume was flat for the three months ended March 31, 2026, reflecting higher spend per average active account and partner expansion in Furniture and Electronics, offset by selective spend in Home Improvement and lower average active accounts. Average active accounts decreased by 5.9% for the three months ended March 31, 2026.

Other income decreased by $1 million, or 1.8%, for the three months ended March 31, 2026, primarily due to higher loyalty costs.

Digital

Digital interest and fees on loans increased by $88 million, or 5.7%, for the three months ended March 31, 2026, primarily driven by higher loan receivables yield, reflecting the impacts of product, pricing and policy changes, as well as higher average loan receivables, partially offset by lower benchmark rates.

Purchase volume increased by 8.2% for the three months ended March 31, 2026, primarily driven by higher spend per average active account and customer response to enhanced product offerings and refreshed value propositions. Average active accounts increased by 2.7% for the three months ended March 31, 2026.

Diversified & Value

Diversified & Value interest and fees on loans increased by $17 million, or 1.4%, for the three months ended March 31, 2026, primarily driven by higher average loan receivables reflecting the impact of partner expansion, partially offset by a decrease in loan receivables yield. The decrease in loan receivables yield primarily reflects lower benchmark rates, partially offset by the impacts of product, pricing and policy changes.

Purchase volume increased 8.7%, for the three months ended March 31, 2026, primarily reflecting the impact of partner expansion, in addition to higher spend per average active account. Average active accounts increased by 1.5% for the three months ended March 31, 2026.

Other income decreased by $18 million, for the three months ended March 31, 2026. The decrease in the three months ended March 31, 2026 was primarily due to higher loyalty costs, partially offset by higher interchange revenue.

Health & Wellness

Health & Wellness interest and fees on loans increased by $34 million, or 3.7%, for the three months ended March 31, 2026. The increase in the three months ended March 31, 2026 was primarily driven by an increase in loan receivables yield, reflecting the impact of product, pricing and policy changes.

Purchase volume increased 2.6% for the three months ended March 31, 2026, reflecting growth in Pet and Audiology, partially offset by lower spend in Cosmetic and Dental. In addition, higher spend per average active account exceeded the impact of lower average active accounts. Average active accounts decreased 1.2% for the three months ended March 31, 2026.

Other income increased by $5 million, or 6.7%, for the three months ended March 31, 2026. The increase in the three months ended March 31, 2026 was primarily due to higher protection product revenue and higher interchange revenue, partially offset by higher loyalty costs.

Lifestyle

Lifestyle interest and fees on loans decreased by $3 million, or 1.1%, for the three months ended March 31, 2026. The decrease for the three months ended March 31, 2026 was primarily driven by lower average loan receivables and lower benchmark rates.

Purchase volume increased by 6.6% for the three months ended March 31, 2026, primarily driven by Other Apparel and Goods and Luxury, partially offset by lower average active accounts. Average active accounts decreased 2.5% for the three months ended March 31, 2026.

Corp, Other

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 4. 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:

Loan receivables decreased 3.6% to $100.1 billion at March 31, 2026, compared to $103.8 billion at December 31, 2025, primarily driven by the seasonality of our business.

Loan receivables were flat compared to $99.6 billion at March 31, 2025 reflecting higher purchase volume offset by the effects of higher payment rates.

Our loan receivables portfolio had the following geographic concentration at March 31, 2026:

Delinquencies

Over-30 day loan delinquencies as a percentage of period-end loan receivables was 4.54% at March 31, 2026, remaining generally in line with prior periods, increasing by two basis points from 4.52% at March 31, 2025, and by five basis points from 4.49% at December 31, 2025.

Net Charge-Offs

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

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

Allowance for Credit Losses

The allowance for credit losses totaled $10.4 billion at March 31, 2026, compared to $10.4 billion at December 31, 2025, and $10.8 billion at March 31, 2025, and reflects our estimate of expected credit losses for the life of the loan receivables on our Condensed Consolidated Statements of Financial Position.

The allowance for credit losses remained flat compared to December 31, 2025, reflecting asset quality trends in line with the prior quarter.

The decrease in allowance for credit losses compared to March 31, 2025 primarily reflects the impact of prior credit actions and elevated customer payment rates, as well as expectations of the macroeconomic environment. Our allowance for credit losses as a percentage of total period-end loan receivables increased to 10.42% at March 31, 2026, from 10.06% at December 31, 2025 and decreased from 10.87% at March 31, 2025. See Note 4. Loan Receivables and Allowance for Credit Losses to our condensed consolidated financial statements for additional information.

Funding, Liquidity and Capital Resources

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

Funding Sources

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

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

(1) Excludes $414 million and $418 million average balance of non-interest-bearing deposits for the three months ended March 31, 2026 and 2025, respectively. Non-interest-bearing deposits comprise less than 10% of total deposits for the three months ended March 31, 2026 and 2025.

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 March 31, 2026, we had $77.2 billion in direct deposits and $5.7 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, such as securitized financings (including our undrawn committed and uncommitted capacity) and unsecured debt.

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

Our deposit liabilities provide funding with maturities ranging from one day to ten years. At March 31, 2026, the weighted average maturity of our interest-bearing time deposits was approximately one year. See Note 7. Deposits to our condensed consolidated financial statements for more information on the maturities of our time deposits.

The standard FDIC deposit insurance amount is $250,000 per depositor, for each account ownership category. Our estimate of the uninsured portion of total deposit balances, excluding any intercompany balance, at March 31, 2026 was $7.1 billion.

The following table summarizes the portion of uninsured deposits that are certificates of deposit by contractual maturity at March 31, 2026:

Securitized Financings

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

The following table summarizes expected contractual maturities of the investors’ interests in securitized financings, excluding debt premiums, discounts and issuance costs at March 31, 2026:

(1) Excludes any subordinated classes of SYNIT notes that we owned at March 31, 2026.

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. The occurrence of an early amortization event 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. For more information related to early amortization events with respect to our securitized financings, see "Funding, Liquidity and Capital Resources—Securitized Financings" in our 2025 Form 10-K.

The following table summarizes for each of our trusts the three-month rolling average excess spread at March 31, 2026:

(1) Represents the excess spread (generally calculated as interest income collected from the applicable pool of loan receivables less applicable net charge-offs, interest expense and servicing costs, divided by the aggregate principal amount of loan receivables in the applicable pool) for SFT or, in the case of SYNCT, a range of the excess spreads relating to the particular series issued within such trust or, in the case of SYNIT, the excess spread relating to the one outstanding series issued within such trust, in all cases omitting any series that have not been outstanding for at least three full monthly periods and calculated in accordance with the applicable trust or series documentation, for the three securitization monthly periods ended March 31, 2026.

Senior and Subordinated Unsecured Notes

The following table provides a summary of our outstanding senior and subordinated unsecured notes at March 31, 2026, which includes $750 million of senior unsecured notes issued by Synchrony Financial in February 2026:

(1) Weighted average interest rate of all senior and subordinated unsecured notes at March 31, 2026 was 5.05%.

(2) Floating rate applicable at interest reset date through maturity, based on compounded Secured Overnight Financing Rate plus floating rate spread noted above.

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

Short-Term Borrowings

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

Covenants

The indentures pursuant to which our senior and subordinated unsecured notes have been issued include various covenants. If we do not satisfy any of these covenants, the maturity of amounts outstanding thereunder may be accelerated and become payable. We were in compliance with all of these covenants at March 31, 2026.

At March 31, 2026, we were not in default under any of our credit facilities.

Credit Ratings

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

The table below reflects our current credit ratings and outlooks:

S&P Fitch Ratings

Synchrony Financial

Senior unsecured debt BBB- BBB

Subordinated unsecured debt BB+ BBB-

Preferred stock BB- BB-

Outlook for Synchrony Financial Stable Stable

Synchrony Bank

Senior unsecured debt BBB BBB

Outlook for Synchrony Bank Stable Stable

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

Liquidity

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

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

We maintain a liquidity portfolio, which at March 31, 2026 had $22.8 billion of liquid assets, primarily consisting of cash and equivalents, less cash in transit which is not considered to be liquid, compared to $16.6 billion of liquid assets at December 31, 2025. The increase in liquid assets primarily due to deposit growth, the issuance of both senior unsecured debt and securitized debt, as well as the seasonality of our business. We believe our liquidity position at March 31, 2026 remains strong as we continue to operate in a period of uncertain economic conditions and we will continue to closely monitor our liquidity as economic conditions change.

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

We also have access to several additional sources of liquidity beyond our liquidity portfolio. At March 31, 2026, we had an aggregate of $10.4 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. 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 2025 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 2026 capital plan to the Federal Reserve Board. We are also subject to supervisory stress tests on a biennial basis, in even calendar years, and the 2026 supervisory stress test is the first stress test in which we are required to participate. In February 2026, the Federal Reserve Board voted to maintain banking organizations’ current stress capital buffer requirements until 2027 at the earliest. Because Synchrony is only subject to supervisory stress tests on a biennial basis, we remain subject to our initial stress capital buffer of 2.5% and will receive a new stress capital buffer in 2028. For more information, see “Regulation—Savings and Loan Holding Company Regulation” in our 2025 Form 10-K.

Dividend and Share Repurchases

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 April 2026, the Board approved a planned increase to our quarterly dividend to $0.34 per common share commencing in the third quarter of 2026. 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 2025 Form 10-K.

During the three months ended March 31, 2026, we repurchased $900 million of common stock as part of our share repurchase program. In April 2026, the Company announced that the Board approved a new share repurchase program of up to $6.5 billion of the Company’s common stock, which commences in the second quarter of 2026 and, in a change from our prior share repurchase programs, does not have an expiration date. The new share repurchase program replaces the Company’s prior program, which was scheduled to expire on June 30, 2026. The pace and amount of share repurchases under the program are flexible, and will be executed from time to time subject to various factors, including capital levels, financial performance, market conditions and legal and regulatory requirements, and in accordance with our capital plans.

The Company's share repurchase program may be executed through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans, and may be modified, suspended or terminated at any time.

Regulatory Capital Requirements - Synchrony Financial

For Synchrony Financial to be a well-capitalized savings and loan holding company, Synchrony Bank must be well-capitalized and Synchrony Financial must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve Board to meet and maintain a specific capital level for any capital measure. At March 31, 2026, Synchrony Financial met all minimum capital ratio requirements and the requirements to be deemed well-capitalized.

The following table sets forth the composition of our capital ratios for the Company calculated under the Basel III Standardized Approach rules at March 31, 2026 and December 31, 2025, respectively:

(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 increase in our common equity Tier 1 capital ratio compared to December 31, 2025 was primarily due to a reduction in risk-weighted assets in the three months ended March 31, 2026.

Regulatory Capital Requirements - Synchrony Bank

At March 31, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025:

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 our 2025 Form 10-K. 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 2025 Form 10-K.

Off-Balance Sheet Arrangements and Unfunded Lending Commitments

We do not have any material off-balance sheet arrangements, including guarantees of third-party obligations. Guarantees are contracts or indemnification agreements that contingently require us to make a guaranteed payment or perform an obligation to a third-party based on certain trigger events. At March 31, 2026, we had not recorded any contingent liabilities in our Condensed Consolidated Statements of Financial Position related to any guarantees. See Note 5. 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 4. Loan Receivables and Allowance for Credit Losses to our condensed consolidated financial statements for more information on our unfunded lending commitments.

Critical Accounting Estimates

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 “Management's Discussion and Analysis—Critical Accounting Estimates” in our 2025 Form 10-K, for a detailed discussion of these critical accounting estimates.

New Accounting Standards

See Note 2. Basis of Presentation and Summary of Significant Accounting Policies - New Accounting Standards, to our condensed consolidated financial statements for additional information related to recent accounting pronouncements.

Regulation and Supervision

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 March 19, 2026, the federal banking agencies issued several rulemaking proposals to revise the U.S. regulatory capital framework. If finalized as proposed, the new rule would revise the standardized approach to calculating risk-weighted assets, including a 10% reduction in risk-weighting of retail exposures, and would require Category III and Category IV banking organizations, including Synchrony, to include most elements of accumulated other comprehensive income (“AOCI”) in their common equity Tier 1 capital, thereby requiring all net unrealized gains and losses on holdings of available-for-sale debt securities from changes in fair value to flow through to regulatory capital, the effects of which would be phased in over a five-year transitional period. We are evaluating the potential impacts of the proposals on the Company.

See “Regulation—Regulation Relating to Our Business” in our 2025 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.

ITEM 1. FINANCIAL STATEMENTS

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Earnings (Unaudited)

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Amounts presented net of taxes.

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Financial Position (Unaudited)

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Changes in Equity (Unaudited)

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

See accompanying notes to condensed consolidated financial statements.

Synchrony Financial and subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

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:

(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:

(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

(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

(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

(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:

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.

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

Gross Charge-offs for Consumer Installment Loans by Origination Year

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:

(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:

(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:

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:

(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:

(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:

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:

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

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

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:

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

(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

(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

(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

(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

Synchrony Bank

(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:

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

(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:

(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.