Synchrony Financial NYSE: SYF reported what it called “strong momentum” to start 2026, highlighting record first-quarter purchase volume, improved credit performance and a new, open-ended share repurchase authorization. Executives also pointed to continued consumer resilience and growth initiatives tied to partner expansion, new program launches and broader distribution for CareCredit.
Record purchase volume and co-brand strength
President and CEO Brian Doubles said the company posted record first-quarter purchase volume of $43 billion, reflecting “the enduring appeal of Synchrony’s multi-product suite.” He said customers were active across the portfolio, contributing to sequential improvement in average active account trends, higher spend per account across all five platforms, and 6% growth in total portfolio purchase volume versus a year ago.
Doubles broke out performance by platform, citing growth in several areas:
- Diversified & Value purchase volume grew 9%, “primarily reflecting the impact of partner expansion.”
- Digital purchase volume increased 8%, driven by customer response to enhanced offerings and refreshed value propositions.
- Home & Lifestyle purchase volume rose 7%, led by “other apparel and goods and luxury,” partially offset by lower average active accounts.
- Health & Wellness purchase volume increased 3%, reflecting growth in pet and audiology.
- Home and auto purchase volume was flat, with partner expansion in furniture and electronics offset by selective spend in home improvement and lower average active accounts.
The company’s co-branded credit cards, including Dual Cards, represented 51% of total purchase volume in the quarter and increased 20% year over year, which Doubles attributed to product upgrades, higher broad-based spend and improved utility across programs.
Consumer spending and payment trends
Management emphasized improving discretionary trends. Doubles said the mix of discretionary spend within Synchrony’s out-of-partner portfolio increased during the quarter for the third consecutive quarter of year-over-year improvement, and discretionary spend growth continued to accelerate faster than non-discretionary growth, also for the third consecutive quarter.
He noted that even in March—when fuel prices began to rise—discretionary strength was seen in categories such as retail, entertainment and electronics. Doubles said spending on fuel was up significantly during March in non-discretionary spend, but total portfolio spend per account growth remained strong.
Chief Financial Officer Brian Wenzel reported a 16.3% payment rate, about 50 basis points higher than last year and about 110 basis points above the pre-pandemic first-quarter average. Wenzel attributed the higher payment rate to portfolio and product mix shifts, new portfolio seasoning, prior credit actions and higher average tax refunds.
On the question of whether the elevated payment rate represents a permanent reset, Wenzel said he does not believe it is permanent, describing two drivers: higher credit quality mix following credit actions (including a shift toward super-prime) and a portfolio mix effect as promotional financings declined, which “artificially bring[s] the payment rate up.” He also said newer accounts tend to pay at a slightly higher level.
Financial results: earnings, margin and credit performance
Wenzel said Synchrony generated $805 million of net earnings, or $2.27 per diluted share. The company reported a 2.7% return on average assets and 24.5% return on tangible common equity, along with an 8% increase in tangible book value per share.
Ending loan receivables were flat at $100 billion, though Wenzel said the company saw a “positive inflection” in ending loan receivables, increasing by about $477 million by quarter-end, as higher purchase volume was generally offset by elevated payment rates.
Net interest income increased 4% to $4.6 billion, supported by higher interest and fees and lower interest expense. Wenzel said interest and fees increased 2%, partially offset by lower benchmark rates, while interest expense declined 11% due to lower benchmark rates.
Synchrony’s net interest margin increased 76 basis points to 15.5%, which Wenzel attributed to higher loan receivables yield (including the impact of PPPCs), lower funding costs and a higher mix of loan receivables as a percentage of interest-earning assets, partially offset by a lower liquidity portfolio yield.
On credit, Wenzel said 30+ and 90+ delinquency rates were generally in line with the prior year. Net charge-offs were 5.42%, down from 6.38% in the prior-year period. He also said the allowance for credit losses was 10.42% of loan receivables, up sequentially from 10.06% in the fourth quarter due to seasonality, and down from 10.87% in the first quarter of 2025.
Retail share arrangements (RSAs) were $1.1 billion, or 4.31% of average loan receivables, up $175 million from the prior year. Provision for credit losses decreased $156 million to $1.3 billion, primarily due to lower net charge-offs, partially offset by a reserve release in the prior year.
Expenses, technology investments, and AI focus
Other expense increased 6% to $1.3 billion, which Wenzel said was driven by technology investment costs and higher operational losses. The efficiency ratio was 35.6%, about 220 basis points higher than last year, reflecting higher expenses and the impact of higher RSAs.
In Q&A, Wenzel said expense pressure included higher association fees paid to Mastercard and Visa due to higher co-brand volumes, as well as continuing cloud and related technology investments. He characterized certain operational losses as “a little bit more idiosyncratic in the first quarter” and said they should reduce as the year progresses.
Doubles also discussed artificial intelligence initiatives, including “agentic commerce,” describing efforts to ensure Synchrony’s financing offers remain embedded as purchasing paths evolve. He said one likely near-term scenario is that AI-driven product research leads consumers back to merchant sites where Synchrony is already embedded, while another potential scenario is purchases completed within AI platforms—where embedded financing options could become critical. Doubles added that partners have incentives to ensure Synchrony cards remain an option in those checkout experiences.
On generative AI for productivity, Doubles said the company has been working on it for more than a year, noting that “90% of the professional workforce is using it across all functions.” He said early benefits include speed to market and the ability to redeploy resources to more strategic work.
Partner activity, CareCredit expansion, capital actions and outlook
Doubles said Synchrony added or renewed more than 15 partners in the quarter, including Indian Motorcycle, Harbor Freight and Miracle-Ear. He described renewals and extensions that expand private label financing options, including a Harbor Freight private label program offering “the option of 5% back or zero interest equal payment installment loans.”
He also highlighted CareCredit distribution gains, including expanded strategic partnerships with Planet DDS, which he said will integrate CareCredit across more than 2,500 Cloud 9 orthodontic practices and more than 15,000 Denticon dental practices. Doubles said CareCredit can now be used at about 85% of U.S. vet locations and cited new partnerships with Figo and Embrace Pet Insurance that enable approved claims to be reimbursed directly as a credit to a consumer’s CareCredit account after paying with the card. He said those partnerships extend the pet insurance reimbursement ecosystem to more than 1.7 million insured pets.
On funding and capital, Wenzel said direct deposits grew $3.1 billion while broker deposits declined $3.7 billion compared to last year. The company issued $750 million of five-year senior unsecured debt at a 4.95% coupon and a $500 million three-year secured public bond from the Synchrony Card Issuance Trust with a 4.22% coupon. Deposits represented 83% of total funding at March 31.
Synchrony returned $1.0 billion to shareholders in the quarter, including $900 million of share repurchases and $104 million of common dividends. Wenzel said the board approved a new share repurchase program of up to $6.5 billion that began in the second quarter and, unlike prior authorizations, does not have an expiration date.
Looking ahead, Wenzel reaffirmed expectations for accelerated growth in purchase volume and average active accounts without further broad-based credit refinements. He said Synchrony expects mid-single-digit growth in ending loan receivables by year-end, with growth accelerating seasonally in the back half, supported by core portfolio growth and recently launched and soon-to-be-launched programs including Walmart OnePay, Bob’s Discount Furniture, RH, and about $725 million of Lowe’s commercial co-branded loan receivables added in early April.
Wenzel said net charge-offs are expected to peak in the second quarter and be less than 5.5% for the full year. He also said the company remains on track to deliver $9.10 to $9.50 in diluted earnings per share for 2026.
About Synchrony Financial NYSE: SYF
Synchrony Financial NYSE: SYF is a consumer financial services company that specializes in providing point-of-sale financing and private-label, co-branded and branded credit card programs. The company serves as a payments and lending partner to retailers, digital merchants and service providers, offering consumer financing solutions designed to drive customer engagement and sales. Synchrony also operates a direct bank that offers deposit products, including savings accounts and certificates of deposit, which support its funding and customer-facing product suite.
Its core product set includes private-label and co-branded credit cards, general-purpose credit cards, installment loan programs and promotional financing options that are integrated into merchants' checkout experiences.
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