01—Abstract
Summary
Summary of the 10-Q filed July 23, 2026. Cited figures are marked; the original filing is the authoritative source.
Synchrony Financial reported net earnings of $885 milliona for the three months ended June 30, 2026, down from $967 million a year earlier, and $1.69 billion for the six months, roughly flat against $1.72 billion.
Diluted earnings per share rose to $2.59b for the quarter from $2.50 and to $4.85 for the six months from $4.38, reflecting the share count reduction from buybacks. Net interest income grew 1.9% in the quarter and 2.9% year to date, driven by lower interest expense, while the provision for credit losses rose $55 million in the quarter because of a smaller reserve release. Other expense increased $86 million in the quarter, primarily from higher operational losses and technology costs.
Credit performance improved year over year. The net charge-off rate was 5.43%c for both the three- and six-month periods, down 27 basis points and 61 basis points respectively, and the company expects its 2026 full-year net charge-off rate to be below its long-term target range of 5.5% to 6.0%. Over-30 day delinquencies were 4.16% of period-end loan receivables, compared with 4.18% a year earlier.
Loan receivables totaled $102.2 billiond, up 2.4% from June 30, 2025, and deposits of $82.8 billion funded 83% of total funding sources. Capital returns remained significant. The company repurchased $1.8 billion of common stock in the first half, has $5.7 billion remaining under a new $6.5 billion authorization with no expiration date, and plans to raise its quarterly common dividend to $0.34 per share from the third quarter of 2026.
It also issued $500 million of 7.250% fixed-rate reset preferred stock in June 2026. The common equity Tier 1 ratio was 13.2%, down from 13.5% at December 31, 2025, mainly due to repurchases and dividends.
02—Key points
Key Highlights
- Net earnings were $885 million for the quarter versus $967 million a year earlier, and $1.69 billion for the six months versus $1.72 billion; diluted EPS was $2.59 for the quarter versus $2.50.
- Net interest income rose $87 million (1.9%) in the quarter and $258 million (2.9%) year to date, as interest expense fell 8.5% in the quarter; net interest margin was 15.08% versus 14.78%.
- Net charge-off rate was 5.43% for both periods, down 27 basis points (quarter) and 61 basis points (six months); the company expects the full-year 2026 rate below its 5.5% to 6.0% long-term target range.
- Provision for credit losses increased $55 million in the quarter due to a lower reserve release ($163 million versus $265 million), and other expense rose $86 million to $1.33 billion, driven by operational losses and technology costs.
- Loan receivables reached $102.2 billion, up 2.4% year over year, and deposits of $82.8 billion represented 83% of total funding sources.
- The company repurchased $1.8 billion of common stock in the first half, has $5.7 billion remaining under its 2026 program, and will raise the quarterly dividend to $0.34 per share starting in the third quarter.
- Credit ratings include S&P BBB- on senior unsecured debt with a Positive outlook and Fitch BBB with a Stable outlook; common equity Tier 1 ratio was 13.2% versus 13.5% at year-end 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 23, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Net Income | $885.00M$967.00M | −8.5% |
| EPS (Basic) | $2.61$2.51 | +4.0% |
| EPS (Diluted) | $2.59$2.50 | +3.6% |
| Shares Outstanding (Basic) | 331.30M376.20M | −11.9% |
| Shares Outstanding (Diluted) | 334.10M379.10M | −11.9% |
05—Questions
Frequently Asked Questions
Why did net earnings decline in the second quarter even though net interest income increased?
Net earnings fell to $885 million from $967 million mainly because the provision for credit losses increased $55 million, reflecting a smaller reserve release of $163 million versus $265 million a year earlier. Other expense also rose $86 million, primarily due to higher operational losses and technology investment costs, and the effective tax rate increased to 25.4% from 23.0%. These offset the $87 million increase in net interest income and a $19 million rise in other income.
How is credit quality trending?
Credit quality improved year over year. The net charge-off rate was 5.43% for both the three- and six-month periods, down from 5.70% and 6.04% respectively in the prior year periods. Over-30 day delinquencies were 4.16% of period-end loan receivables versus 4.18% a year earlier, and the allowance coverage ratio declined to 10.09% from 10.59%.
What are the company's capital return plans?
The company repurchased $1.8 billion of common stock in the first half of 2026 and had $5.7 billion remaining under a new $6.5 billion share repurchase program announced in April 2026, which has no expiration date. The Board approved raising the quarterly common dividend to $0.34 per share beginning in the third quarter of 2026, and the company issued $500 million of 7.250% fixed-rate reset preferred stock in June 2026.
What drove the growth in loan receivables and purchase volume?
Loan receivables increased 2.4% to $102.2 billion at June 30, 2026 from a year earlier, reflecting higher purchase volume, including the acquisition of the Lowe's commercial co-branded credit card portfolio, partially offset by higher payment rates. Purchase volume increased 8.1% to $49.8 billion for the quarter, primarily reflecting partner expansion and higher spend per average active account.
How strong is the company's liquidity and funding position?
At June 30, 2026, the company had $19.8 billion of liquid assets, up from $16.6 billion at December 31, 2025. It also had $13.1 billion of available borrowing capacity through the Federal Reserve discount window and $2.6 billion of undrawn securitization capacity. Deposits of $82.8 billion funded 83% of total funding sources, and the company stated it was in compliance with all debt covenants at June 30, 2026.
06—Continue