Synchrony Financial third-quarter net earnings fall to $892 million from a year earlier

Synchrony Financial (SYF) reported third-quarter 2026 net earnings of $892 million, or $2.68 per diluted share, the company said Tuesday in an 8-K filing that attached its earnings release.

Net earnings fell 17% from a year earlier, when the company reported $1.1 billion, or $2.86 per diluted share. The decrease was $185 million.

Here's how the company did:

• Diluted earnings per share: $2.68 vs. $2.86 a year earlier
• Net earnings: $892 million vs. $1.1 billion a year earlier
• Net interest income: $4,809 million vs. $4,720 million a year earlier
• Interest and fees on loans: $5,591 million vs. $5,510 million a year earlier
• Return on assets: 2.9%, down 70 basis points from a year earlier

Net interest income rose $89 million, or 2%, to $4.8 billion. The company said the increase came from higher interest and fees and lower interest expense, partly offset by lower investment income.

Purchase volume rose 8% to $49.7 billion, compared with $49.8 billion in the second quarter. Average active accounts were flat at 68.3 million.

Loan receivables rose 3% to $103.3 billion at the end of the period.

“Synchrony delivered another strong performance in the third quarter, highlighted by broad-based purchase volume growth across all five of our sales platforms,” said President and Chief Executive Officer Brian Doubles.

Doubles also said spend reached a record third-quarter level, and that both discretionary and non-discretionary out-of-partner spend rose by double digits.

Provision for credit losses rose $120 million, or 10%, to $1.3 billion. The company said the increase was driven mainly by a $30 million reserve build, compared with a $152 million release a year earlier, partly offset by $62 million in lower net charge-offs.

Net charge-offs were 4.79% of average loan receivables, down from 5.16% a year earlier and 5.43% in the second quarter. Loans 30 or more days past due were 4.34% of period-end loan receivables, against 4.39% a year earlier.

Other expense rose $123 million, or 10%, to $1.4 billion, primarily from higher operational losses, technology investments and marketing expenses. The efficiency ratio was 35.9%, up 330 basis points from a year earlier.

Other income fell $22 million, or 17%, to $105 million, primarily due to higher loyalty costs. Retailer share arrangements rose $72 million, or 7%, to $1.1 billion, reflecting program performance.

Diversified & Value purchase volume rose 13% to $17.4 billion, reflecting partner expansion and higher gas prices. Home & Auto purchase volume rose 9% to $12.1 billion, reflecting new programs, select furniture retailers and higher gas prices. Digital purchase volume rose 5% to $14.7 billion.

The company added or renewed 10 partners in the quarter, including La-Z-Boy and Fender. It also established a partnership with OpenAI and announced an integration with Stripe that will let providers offer CareCredit financing at online checkout.

“Synchrony's third quarter financial performance reflected disciplined execution across our strategic priorities,” said Executive Vice President and Chief Financial Officer Brian Wenzel.

The company returned $1.2 billion to shareholders in the quarter, including $1.1 billion of share repurchases and $110 million of common stock dividends. It had approximately $4.6 billion remaining under its repurchase authorization as of Sept. 30.

Dividends declared were $0.34 per share, up from $0.30 a year earlier.

Deposits rose 4%, or $3.1 billion, to $83.0 billion and made up 83% of funding. The estimated Common Equity Tier 1 ratio was 12.9%, compared with 14.3% a year earlier. The company said these regulatory capital figures are preliminary and subject to change.

The company updated its full-year 2026 outlook in a presentation attached as Exhibit 99.3. It expects mid-single-digit growth in ending loan receivables, earnings per diluted share of about $9.50, and a net charge-off rate below 5.5%.

The company also expects retailer share arrangements as a percentage of average loan receivables to stay within a 4.0% to 4.5% target range, and other expense in the fourth quarter to be generally in line with the third quarter. The filing does not restate the prior outlook figures, so the change cannot be measured against them.

Doubles and Wenzel will host a conference call at 8 a.m. Eastern on Tuesday, Oct. 20 to review the results and outlook.

The filing also included a financial supplement, a results presentation and an explanation of non-GAAP measures.