01—Abstract
Summary
Summary of the 10-Q filed April 24, 2025. Cited figures are marked; the original filing is the authoritative source.
Synchrony Financial reported first-quarter 2025 net earnings of $757 milliona, down from $1.3 billion in the prior-year quarter, which included an after-tax gain of $802 million on the sale of Pets Best.
Net interest income rose 1.3% to $4.5 billionb as interest expense fell 6.6% on lower benchmark rates, while interest and fees on loans were flat. Retailer share arrangements increased 17.1% to $895 million, and the provision for credit losses fell $393 million to $1.49 billion, aided by a $97 million reserve release versus a $299 million build a year earlier. The net charge-off rate rose to 6.38% from 6.31%, while over-30 day delinquencies improved to 4.52% from 4.74%.
Loan receivables declined to $99.6 billionc, reflecting seasonality and lower purchase volume of $40.7 billion. Funding and liquidity remained strong, with deposits of $83.4 billion representing 83% of total funding sources and liquid assets of $23.8 billion at March 31, 2025. The company repurchased $600 million of common stock during the quarter and completed its prior repurchase program.
In April 2025, the Board approved a new program of up to $2.5 billiond through June 30, 2026, and the quarterly common dividend will increase to $0.30 per share starting in the second quarter of 2025. The filing also notes that the CFPB's credit card late fee rule was vacated on April 15, 2025, and that management plans to review the related product, pricing and policy changes with partners.
Regulatory capital ratios remained above well-capitalized levels, with a common equity Tier 1 ratio of 13.2% at March 31, 2025, down from 13.3% at year-end 2024, largely reflecting the final phase-in of the CECL capital transition adjustment. Management described its disclosure controls as effective, and the filing reports no material changes to risk factors.
02—Key points
Key Highlights
- Net earnings fell to $757 million from $1.3 billion, mainly because the prior year included an after-tax gain of $802 million on the Pets Best sale and retailer share arrangements rose.
- Net interest income increased 1.3% to $4.5 billion as interest expense decreased 6.6% on lower benchmark rates.
- Provision for credit losses decreased $393 million to $1.49 billion, including a $97 million reserve release, while the net charge-off rate rose to 6.38%.
- Over-30 day delinquencies improved to 4.52% of period-end loan receivables from 4.74% a year earlier.
- Loan receivables declined to $99.6 billion and purchase volume decreased to $40.7 billion, reflecting seasonality and lower consumer spend.
- Deposits of $83.4 billion funded 83% of total funding sources, and liquid assets rose to $23.8 billion.
- The Board approved a new share repurchase program of up to $2.5 billion through June 30, 2026, and the quarterly dividend will rise to $0.30 per share in Q2 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed April 24, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Net Income | $757.00M$1.29B | −41.5% |
| EPS (Basic) | $1.91$3.17 | −39.7% |
| EPS (Diluted) | $1.89$3.14 | −39.8% |
| Shares Outstanding (Basic) | 385.20M404.70M | −4.8% |
| Shares Outstanding (Diluted) | 389.40M408.20M | −4.6% |
05—Questions
Frequently Asked Questions
Why did net earnings decline year over year?
Net earnings fell to $757 million from $1.3 billion, primarily because the prior-year quarter included an after-tax gain of $802 million on the sale of Pets Best and retailer share arrangements increased. These effects were partially offset by a lower provision for credit losses.
How did credit quality trend in the quarter?
The provision for credit losses decreased to $1.49 billion, aided by a $97 million reserve release. Over-30 day delinquencies improved to 4.52% from 4.74%, but the net charge-off rate increased to 6.38% from 6.31%, and the allowance coverage ratio rose to 10.87%.
What is the status of the CFPB credit card late fee rule?
On April 15, 2025, the court granted a joint motion to vacate the CFPB's final rule, which had lowered the late fee safe harbor to $8. The filing says the company plans to review the product, pricing and policy changes it made in anticipation of the rule with its partners.
What capital return actions did Synchrony announce?
The company repurchased $600 million of common stock in the quarter and completed its prior program. In April 2025, the Board approved a new program of up to $2.5 billion through June 30, 2026, and the quarterly common dividend will increase to $0.30 per share starting in the second quarter of 2025.
How strong is the company's funding and liquidity position?
Deposits totaled $83.4 billion and represented 83% of total funding sources. Liquid assets were $23.8 billion, up from $17.2 billion at December 31, 2024, and the company had $11.5 billion of available Federal Reserve discount window capacity.
06—Continue