AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 2/6 · 19/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Exclusive access and cooperative operations support current distribution benefits, but the passages cannot establish durable switching costs. CareCredit acceptance breadth does not by itself demonstrate network effects.
durability · — · Decades-long relationships and continued renewals show persistence, but contract expiration, termination rights and unknown renewal economics prevent establishing moat durability.
customer dependency · — · Program cooperation suggests integration, but no migration burdens or partner dependence on uniquely available capabilities are demonstrated. Deposit customers can readily switch.
erosion resilience · — · New and renewed partnerships coexist with nonrenewing programs and concentration. The evidence does not establish whether incumbent advantages withstand competing bids without economic concessions.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · First-half 2026 loan yield increased 18 basis points, primarily attributed to product, pricing and policy changes. Second-quarter yield declined 11 basis points despite those offsets. This demonstrates mixed realized outcomes, with no isolated measure of price increases.
retention · 2/4 · Long relationships and disclosed extensions demonstrate repeat partner demand. Consumer evidence is mixed: 2025 purchase volume was nearly unchanged while year-end active accounts declined, and Health & Wellness average active accounts declined in 2026. These are indirect retention indicators, not measured renewal or churn rates.
margin resilience · 2/4 · Pricing-related yield support and rising net interest income demonstrate some resilience. Lower benchmark-driven funding expense also contributed, while first-half and second-quarter net earnings declined. These results do not isolate pricing protection of margins after credit losses and partner sharing.
contractual freedom · 2/4 · Cardholder agreements permit specified charges and fees, and implemented pricing changes demonstrate some practical discretion. Partner negotiations, economic sharing and regulation constrain that discretion; unilateral freedom to reset all terms is not established. Potential regulatory restrictions are not treated as already effective.
Predictability—
Missing exact annual revenue, free cash flow or FCF margin; operating cash flow and capex must both be reported for all five years.
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade, currentRatioGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- interestCoverageGrade
- 12.43
- cashInterestPaid
- 4162.00
- cashInterestCoverage
- 2.37
Capital allocation—
Missing required inputs: operatingReturn, sbcRevenue, cashConversionGrade. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -8.30
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half 2026 disclosures show actual cash generation, receivables investment, financing and substantial common-share repurchases, alongside a lower share count and maintained well-capitalized status. Preferred issuance and a decline in CET1 temper the assessment. Operating cash flow is not treated as freely distributable cash for a lender, and buyback value creation is unproven.
incentive alignment · 3/4 · Issued 2025 awards combine RSUs with a majority PSU allocation, three-year performance conditions, EPS and ROE metrics, a relative TSR modifier and compensation recovery provisions. These are demonstrated arrangements rather than proposals; future vesting and actual executive ownership levels remain unestablished.
execution · 2/4 · An exclusive program launch, additional partnerships and renewals, and pricing-related revenue support demonstrate delivery. Declining active accounts in supplied comparisons, nonrenewing programs and lower 2026 earnings make overall execution mixed. Operating outcomes provide indirect evidence of management effectiveness without proving management caused every change.
governance · 3/4 · Disclosed governance includes 11 independent directors out of 12, independent committees, a non-executive chair, annual elections, single-class voting and an active Risk Committee. These support strong governance structures, while not proving exceptional oversight effectiveness or the outcome of the subsequent annual election.
Evidence
Exclusivity
Our program agreements are typically exclusive for the products we offer and limit our partners’ ability to originate or promote other private label or co-branded credit cards during the term of the agreement.
Our Partner Agreements / Exclusivity · Filed 08/02/2024
At December 31, 2025, the length of our relationship with each of our five largest partners was over 10 years, and in the case of Lowe's, 46 years.
Home & Auto / partner relationship longevity · Filed 06/02/2026
At December 31, 2025, the length of our relationship with each of our three largest partners was over 10 years, and in the case of PayPal, 21 years.
Digital / partner relationship longevity · Filed 06/02/2026
In September 2025, we launched our new partnership with OnePay to become the exclusive issuer of a general purpose and private label credit card program at Walmart.
Diversified & Value / exclusive OnePay program launch · Filed 06/02/2026
2026 Partner Agreements
During the six months ended June 30 2026, and to date, we continued to expand and diversify our portfolio with the addition or renewal of more than 30 partners, which included the following:
New partnerships:
• Indian Motorcycle
Program extensions:
• Adorama
Digital
• Amerivet Partners
• Harbor Freight
• LaserAway
• Miracle-Ear
• Roto-Rooter
• Suzuki
•In our Health & Wellness sales platform, we also 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.
2026 Partner Agreements / additions, extensions and CareCredit integrations · Filed 23/07/2026
The terms of the programs all require cooperative efforts between us and our partners of varying natures and degrees to establish and operate the programs.
Certain Defined Terms / cooperative program operations · Filed 23/07/2026
We also signed an exclusive multi-year agreement for a new consumer private label credit card with Bob’s Discount Furniture.
2025 business achievements / exclusive multi-year agreement · Filed 29/04/2026
In addition, programs with manufacturers, buying groups and industry associations generally are made available to certain partners such as individual retail outlets, dealers and merchants under dealer agreements, which typically may be terminated at will by us or our partner on short notice (e.g., 15 days).
Risk factors / dealer agreement termination rights · Filed 06/02/2026
In addition, existing relationships may be renewed with less favorable terms to the Company in response to, among other things, increased competition for such relationships.
Risk factors / potentially less favorable renewal terms · Filed 06/02/2026
These programs accounted in aggregate for 54% of our total interest and fees on loans for the year ended December 31, 2025, and 52% of loan receivables at December 31, 2025.
Risk factors / largest program concentration · Filed 06/02/2026
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 / terminated and nonrenewing programs · Filed 23/07/2026
Non-bank providers of pay-over-time solutions, such as Affirm, Afterpay, Klarna and others, extend consumer credit-like offerings but do not face the same restrictions, such as capital requirements and other regulatory requirements, as banks which also could place us at a competitive disadvantage.
Competition / named pay-over-time providers · Filed 06/02/2026
There is significant competition for our existing partners, and our failure to retain our existing larger partner relationships upon the expiration or our earlier loss of a relationship upon the exercise of a partner’s early termination rights, or the expiration or termination of a substantial number of smaller partner relationships, could have a material adverse effect on our results of operations (including growth rates) and financial condition to the extent we do not acquire new partners of similar size and profitability or otherwise grow our business.
Risk factors / competition for existing partners · Filed 06/02/2026
In our retail deposits business, we have acquisition and servicing capabilities similar to other direct banking competitors.
Competition / comparable deposit acquisition and servicing capabilities · Filed 06/02/2026
Competition among direct banks is intense because online banking provides customers the ability to rapidly deposit and withdraw funds and open and close accounts in favor of products and services offered by competitors.
Competition / deposit account switching · Filed 06/02/2026
The loan receivables yield decreased 11 basis points to 21.43% for the three months ended June 30, 2026 primarily driven by lower benchmark rates and lower assessed late fees, partially offset by the impacts of our product, pricing and policy changes.
Interest income / second-quarter loan yield and pricing effects · Filed 23/07/2026
The increase in yield on average interest-earning assets for the six months ended June 30, 2026 was primarily driven by an 18 basis point increase in loan receivables yield, as well as the mix of loan receivables as a percentage of interest-earning assets.
Interest income / first-half loan yield increase · Filed 23/07/2026
The higher loan receivables yield was primarily driven by the impacts of our product, pricing and policy changes, partially offset by the impact of lower benchmark rates and lower assessed late fees.
Interest income / first-half product, pricing and policy effects · Filed 23/07/2026
Interest Expense Interest expense decreased by $90 million, or 8.5%, and $208 million, or 9.7%, for the three and six months ended June 30, 2026, respectively, primarily due to lower interest-bearing liabilities cost associated with lower benchmark rates.
Interest expense / benchmark-driven funding cost reduction · Filed 23/07/2026
15 Table of Contents Average interest-bearing liabilities Three months ended June 30 ($ in millions) 2026 % 2025 % Interest-bearing deposit accounts $ 82,279 83.4 % $ 82,014 83.5 % Borrowings of consolidated securitization entities 8,915 9.0 7,926 8.1 Senior and subordinated unsecured notes 7,514 7.6 8,269 8.4 Total average interest-bearing liabilities $ 98,708 100.0 % $ 98,209 100.0 % Six months ended June 30 ($ in millions) 2026 % 2025 % Interest-bearing deposit accounts $ 81,993 83.7 % $ 82,191 83.6 % Borrowings of consolidated securitization entities 8,700 8.9 8,058 8.2 Senior and subordinated unsecured notes 7,286 7.4 8,061 8.2 Total average interest-bearing liabilities $ 97,979 100.0 % $ 98,310 100.0 % Net Interest Income Net interest income increased by $87 million, or 1.9%, and $258 million, or 2.9%, for the three and six months ended June 30, 2026, respectively, resulting from the changes in interest income and interest expense discussed above.
Net Interest Income / quarterly and first-half growth · Filed 23/07/2026
Average active accounts decreased 1.5% and 1.4% for the three and six months ended June 30, 2026, respectively.
Health & Wellness / average active account declines · Filed 23/07/2026
In addition to periodic interest charges, we may impose other charges and fees on credit card accounts, including, as applicable and provided in the cardholder agreement, cash advance transaction fees, paper statement fees, and late fees where a customer has not paid at least the minimum payment due by the required due date.
Our Credit Products / fees permitted by cardholder agreements · Filed 06/02/2026
If future regulatory or legislative restrictions or prohibitions are imposed that affect our ability to offer promotional financing, including deferred interest, for certain of our products or require us to make significant changes to our business practices, and we are unable to develop compliant alternatives with acceptable returns, these restrictions or prohibitions could have a material adverse impact on our business, results of operations and financial condition.
Regulatory risk factors / potential promotional financing restrictions · Filed 06/02/2026
12
Retailer Share Arrangements
Most of our program agreements with large retail and certain other partners contain retailer share arrangements that provide for payments to our partner if the economic performance of the program exceeds a contractually-defined threshold.
Our Partner Agreements / retailer share arrangements · Filed 08/02/2024
37 Table of Contents Synchrony Financial and subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) ____________________________________________________________________________________________ Six months ended June 30, ($ in millions) 2026 2025 Cash flows - operating activities Net earnings $ 1,690 $ 1,724 Adjustments to reconcile net earnings to cash provided from operating activities Provision for credit losses 2,536 2,637 Deferred income taxes 34 31 Depreciation and amortization 288 247 All other operating activities 378 280 Changes in operating assets and liabilities, net of effects of acquisitions and dispositions (Increase) decrease in interest and fees receivable (238) (65) (Increase) decrease in other assets 37 (9) Increase (decrease) in accrued expenses and other liabilities (122) (85) Cash provided from (used for) operating activities 4,603 4,760 Cash flows - investing activities Maturity and sales of debt securities 855 1,205 Purchases of debt securities (2,885) (1,006) Acquisition of loan receivables (809) — Net (increase) decrease in loan receivables, including held for sale (436) 1,607 All other investing activities (388) (444) Cash provided from (used for) investing activities (3,663) 1,362 Cash flows - financing activities Borrowings of consolidated securitization entities Proceeds from issuance of securitized debt 498 1,495 Maturities and repayment of securitized debt — (1,000) Senior and subordinated unsecured notes Proceeds from issuance of senior and subordinated unsecured notes 745 794 Maturities and repayment of senior and subordinated unsecured notes — (750) Dividends paid on preferred stock (42) (42) Proceeds from issuance of preferred stock 494 — Net increase (decrease) in deposits 1,659 195 Purchases of treasury stock (1,778) (1,109) Dividends paid on common stock (204) (211) All other financing activities (89) (70) Cash provided from (used for) financing activities 1,283 (698) Increase (decrease) in cash and equivalents, including restricted amounts 2,223 5,424 Cash and equivalents, including restricted amounts, at beginning of period 15,017 14,755 Cash and equivalents at end of period: Cash and equivalents 16,193 19,457 Restricted cash and equivalents included in other assets 1,047 722 Total cash and equivalents, including restricted amounts, at end of period $ 17,240 $ 20,179 See accompanying notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Cash Flows / first-half 2026 · Filed 23/07/2026
The following table sets forth the composition of our capital ratios for the Company calculated under the Basel III Standardized Approach rules at June 30, 2026 and December 31, 2025, respectively: At June 30, 2026 At December 31, 2025(1) ($ in millions) Amount Ratio(2) Amount Ratio(2) Total risk-based capital $ 17,782 16.9 % $ 17,691 16.7 % Tier 1 risk-based capital $ 15,616 14.9 % $ 15,512 14.6 % Tier 1 leverage $ 15,616 13.0 % $ 15,512 13.3 % Common equity Tier 1 capital $ 13,900 13.2 % $ 14,290 13.5 % Risk-weighted assets $ 104,969 $ 105,934 ______________________ (1)Amounts and ratios at December 31, 2025 have been recast to reflect the change in presentation of internal-use capitalized software on our Condensed Consolidated Statements of Financial Position.
Capital / June 2026 ratios and recast December 2025 comparison · Filed 23/07/2026
At June 30, 2026, Synchrony Financial met all minimum capital ratio requirements and the requirements to be deemed well-capitalized.
Capital / well-capitalized status · Filed 23/07/2026
The following table presents the calculation of basic and diluted earnings per common share: Three months ended June 30, Six months ended June 30, ($ and shares in millions, except per share data) 2026 2025 2026 2025 Net earnings $ 885 $ 967 $ 1,690 $ 1,724 Preferred stock dividends (21) (21) (42) (42) Net earnings available to common stockholders $ 864 $ 946 $ 1,648 $ 1,682 Weighted average common shares outstanding, basic 331.3 376.2 336.8 380.7 Effect of dilutive securities 2.8 2.9 3.2 3.5 Weighted average common shares outstanding, dilutive 334.1 379.1 $ 340.0 384.2 Earnings per basic common share $ 2.61 $ 2.51 $ 4.89 $ 4.42 Earnings per diluted common share $ 2.59 $ 2.50 $ 4.85 $ 4.38 We have issued stock-based awards under the Synchrony Financial 2024 Long-Term Incentive Plan, along with prior incentive plans.
Earnings Per Share / earnings, share count and issued stock awards · Filed 23/07/2026
In 2025, the target LTI awards for NEOs were delivered 45% in RSUs and 55% in PSUs, each issued under the Synchrony Financial 2024 Long-Term Incentive Plan.
2025 Long-Term Incentive Awards / issued award mix · Filed 29/04/2026
Performance Share Units (PSUs) - 55% of LTI Award We issued performance-based, long-term PSUs in 2025 that are scheduled to vest based on financial performance over the 2025-2027 (3-year) performance period.
Performance Share Units / issued awards and performance period · Filed 29/04/2026
The PSUs will be paid in shares of common stock if we achieve pre-defined goals relating to our cumulative annual diluted earnings per common share (“EPS”) and average return on equity (“ROE”), each weighted 50%.
Performance Share Units / EPS and ROE conditions · Filed 29/04/2026
Final payout will be subject to a TSR modifier of +/-20% of the amounts reflected above based on our TSR performance relative to peers used to set executive pay levels at the time of grant.
2025 Executive Compensation / relative TSR modifier · Filed 29/04/2026
Under the policy, in the event that the Company is required to prepare an accounting restatement due to material noncompliance of the Company with any financial reporting requirement under the securities laws, the Company will take action to recover from any current or former executive officer who received any annual or long-term incentive compensation paid, awarded or granted during the three-year period preceding the date on which the Company is required to prepare an accounting restatement, based on the erroneous data, in excess of what would have been paid to the executive officer under the accounting restatement.
Clawback Policies / recovery requirements · Filed 29/04/2026
Other Governance Highlights Include: 11 out of 12 directors are independent Experienced Board members with a broad range of skills and backgrounds Each of the Audit Committee, MDCC, Nominating and Corporate Governance Committee, Risk Committee and Technology Committee is comprised exclusively of independent directors Non-executive Chair of the Board Annual election of all directors Majority voting standard for directors in uncontested elections Stockholder special meetings may be called upon the request of a majority of stockholders Single-class voting structure (one share, one vote) No stockholder rights plan Stock ownership requirements for our executive officers and directors Nominating and Corporate Governance Committee regularly reviews overall corporate governance framework 2026 Annual Meeting and Proxy Statement / 13 Table of Contents Corporate Governance Board of Directors We believe that our directors possess the highest personal and professional ethics, as well as deep industry knowledge and expertise, and are committed to representing the long-term interests of our stockholders.
Corporate Governance / independence and shareholder rights · Filed 29/04/2026
Parker 9 Meetings in 2025 Primary Responsibilities: •Assisting our Board in its oversight of our enterprise-wide risk management framework, including as it relates to credit and investment, market, liquidity, operational, cyber security (including information security and data privacy), compliance, third-party relationship and strategic risks •Reviewing and, at least annually, approving our risk governance framework, and our risk assessment and risk management practices, guidelines and policies, including significant policies that management uses to manage credit and investment, market, liquidity, operational, compliance and strategic risks • Reviewing and, at least annually, recommending to our Board for approval, our enterprise-wide risk appetite, including our liquidity risk tolerance, and reviewing and approving our strategy relating to managing key risks and other policies on the establishment of risk limits as well as the guidelines and policies for monitoring and mitigating such risks • Meeting separately, at least quarterly, with our CRO and the Bank’s CRO to discuss the Company’s risk assessment and risk management practices and related guidelines and policies •Receiving periodic reports from management on the metrics used to measure, monitor and manage known and emerging risks, including management’s view on acceptable and appropriate levels of exposure •Receiving reports from our internal audit, risk management and independent liquidity review functions on the results of risk management reviews and assessments, including the Company’s internal control system over operational and regulatory controls and of the adequacy of the processes for controlling the Company’s activities and managing its risk • Reviewing and approving, at least annually, the Company’s enterprise-wide capital and liquidity framework (including our contingency funding plan) for addressing liquidity needs during liquidity stress events • Reviewing, at least quarterly, in coordination with the Bank’s Risk Committee, the Company’s allowance for credit losses methodology, liquidity, risk appetite, regulatory capital and ratios, and internal capital adequacy assessment processes, as well as our annual capital plan and the Bank’s resolution plan at least annually • Reviewing, at least quarterly, information provided by senior management to determine whether we are operating within our established risk appetite and sharing reports with the Board, at least semi-annually, reflecting the Company’s material risks, mitigation strategies and any relevant public disclosure considerations • Reviewing the status of financial services regulatory examinations • Reviewing the independence, authority and effectiveness of our risk management function •Approving the appointment of, evaluating and, when appropriate, approving the replacement of the CRO •Reviewing the disclosure regarding risk contained in our annual and quarterly reports filed with the SEC Technology Committee Members: Mr.
Corporate Governance / Risk Committee meetings and responsibilities · Filed 29/04/2026
During 2025, we financed $182.3 billion of purchase volume, and at December 31, 2025, we had $103.8 billion of loan receivables and 70.7 million active accounts.
Our Company / 2025 purchase volume and active accounts · Filed 06/02/2026
During 2024, we financed $182.2 billion of purchase volume, and at December 31, 2024, we had $104.7 billion of loan receivables and 71.5 million active accounts.
Our Company / 2024 purchase volume and active accounts · Filed 07/02/2025
We offer customers a CareCredit-branded private label credit card that may be used across our network of CareCredit providers, as well as our CareCredit Dual Card product that can be also used outside of our CareCredit network, and our Walgreens private label and Dual Card.
Health & Wellness / CareCredit network usability · Filed 06/02/2026
At December 31, 2025, our network of Health & Wellness providers, health-focused retailers and traditional retailers that offer health and wellness products collectively exceeded 290,000 locations.
Health & Wellness / network location count · Filed 06/02/2026
