Financial Analysis

"BORROWINGS June 30, 2026 December 31, 2025 ($ in millions) Maturity date Interest Rate Weighted average interest rate Outstanding Amount (a)(b) Outstanding Amount (a)(b) Borrowings of consolidated securitization entities: Fixed securitized borrowings (c) 2026 - 2029 4.06% - 5.74% 4.90 % $ 5,991 $ 5,490 Floating securitized borrowings 2027 - 2028 4.32% - 4.75% 4.48 % 2,925 2,925 Total borrowings of consolidated securitization entities 4.76 % 8,916 8,415 Senior unsecured notes: Synchrony Financial senior unsecured notes: Fixed senior unsecured notes 2026 - 2031 2.88% - 5.15% 3.90 % 2,893 2,892 Fixed-to-floating senior unsecured notes (d) 2029 - 2036 4.95% - 6.00% 5.46 % 3,281 2,534 Synchrony Bank senior unsecured notes: Fixed senior unsecured notes 2027 5.63% 5.63 % 599 599 Total senior unsecured notes 4.81 % 6,773 6,025 Subordinated unsecured notes: Synchrony Financial subordinated unsecured notes: Fixed subordinated unsecured notes 2033 7.25% 7.25 % 743 742 Total senior and subordinated unsecured notes 5.05 % 7,516 6,767 Total borrowings $ 16,432 $ 15,182 ___________________ (a) Includes unamortized debt premiums, discounts and issuance costs. (b) The Company may redeem certain borrowings prior to their original contractual maturity dates in accordance with the optional redemption provision specified in the respective instruments. (c) Includes $1.0 billion of fixed securitized borrowings which matured and were repaid in July 2026. (d) Includes $750 million principal amount i …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENTS For a description of how we estimate fair value, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies in our 2025 annual consolidated financial statements within our 2025 Form 10-K. The following tables present our assets measured at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis were not material for the periods presented. Recurring Fair Value Measurements At June 30, 2026 ($ in millions) Level 1 Level 2 Level 3 Total (a) Assets Debt securities U.S. government and federal agency $ $ 3,460 $ $ 3,460 State and municipal 33 33 Residential mortgage-backed 311 311 Asset-backed 552 552 Other 9 9 Other (b) 35 5 40 Total $ 35 $ 4,323 $ 47 $ 4,405 At December 31, 2025 ($ in millions) Level 1 Level 2 Level 3 Total (a) Assets Debt securities U.S. government and federal agency $ $ 1,492 $ $ 1,492 State and municipal 35 35 Residential mortgage-backed 297 297 Asset-backed 515 515 Other 9 9 Other (b) 15 7 22 Total $ 15 $ 2,304 $ 51 $ 2,370 _______________________ (a) For the six months ended June 30 2026 and 2025, there were no fair value measurements transferred between levels and changes in our Level 3 assets were not material. (b) Other is primarily comprised of equity investments measured at fair value, which are included in Other assets in our Condensed Consolidated Statements of Financial Position. Level 3 Fair Value Measurements Our Level 3 recurring fair value measurements primarily relate …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

INCOME TAXES Unrecognized Tax Benefits ($ in millions) June 30, 2026 December 31, 2025 Unrecognized tax benefits, excluding related interest expense and penalties (a) $ 237 $ 218 Portion that, if recognized, would reduce tax expense and effective tax rate (b) $ 187 $ 172 ____________________ (a) Interest and penalties related to unrecognized tax benefits were not material for all periods presented. (b) Comprised of federal unrecognized tax benefits and state and local unrecognized tax benefits net of the effects of associated U.S. federal income taxes. Excludes amounts attributable to any related valuation allowances resulting from associated increases in deferred tax assets. We establish a liability that represents the difference between a tax position taken (or expected to be taken) on an income tax return and the amount of taxes recognized in our financial statements. The liability associated with the unrecognized tax benefits is adjusted periodically when new information becomes available. In the current year, the Company executed a Memorandum of Understanding with the IRS to participate voluntarily in the IRS Compliance Assurance Process (CAP) program for the 2026 tax year, and thus the tax year is under IRS review. The IRS is also examining our 2025 tax year, and we expect the review will be completed in the current year. Additionally, we are under examination in various states going back to 2019. We believe that there are no issues or claims that are likely to signific …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEGAL PROCEEDINGS AND REGULATORY MATTERS In the normal course of business, from time to time, we have been named as a defendant in various legal proceedings, including arbitrations, class actions and other litigation, arising in connection with our business activities. Certain of the legal actions include claims for substantial compensatory and/or punitive damages, or claims for indeterminate amounts of damages. We are also involved, from time to time, in reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our business (collectively, regulatory matters), which could subject us to significant fines, penalties, obligations to change our business practices or other requirements resulting in increased expenses, diminished income and damage to our reputation. We contest liability and/or the amount of damages as appropriate in each pending matter. In accordance with applicable accounting guidance, we establish an accrued liability for legal and regulatory matters when those matters present loss contingencies which are both probable and reasonably estimable. Legal proceedings and regulatory matters are subject to many uncertain factors that generally cannot be predicted with assurance, and we may be exposed to losses in excess of any amounts accrued. For some matters, we are able to determine that an estimated loss, while not probable, is reasonably possible. For other matters, including those that have not yet progressed through dis …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

New Accounting Standards Recently Issued But Not Yet Adopted Accounting Standards In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires disaggregated information about certain income statement line items in a tabular format in the notes to the financial statements. The Company will adopt this guidance on its effective date, which for us is beginning within our December 31, 2027 Form 10-K, and is currently determining the method of adoption, however, it is not expected to have a material impact on our Consolidated Financial Statements. In September 2025, the FASB issued ASU 2025-06, Intangibles Goodwill and Other Internal-Use Software (Subtopic 350-40). This ASU amends certain aspects of the accounting for and disclosure of software costs. This ASU requires an entity to start capitalizing software costs when both management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in this update are effective for the Company beginning in January 2028, through either a prospective, modified, or retrospective transition approach, with early adoption permitted. The Company is currently evaluating the updated guidance to assess the impact and the method of adoption. In November 2025, the FASB issued ASU 2025-08, Financial Instruments C …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

SEGMENT REPORTING We conduct our operations through a single business segment, which derives interest and fee income earned on our credit products we offer to our customers. There have not been any changes to the basis of segmentation or the measurement of performance as compared to our 2025 Form 10-K. The following table presents segment information for the periods presented herein: Three months ended June 30, Six months ended June 30, ($ in millions) 2026 2025 2026 2025 Interest and fees on loans $ 5,380 $ 5,328 $ 10,793 $ 10,640 Interest on cash and debt securities 203 258 393 496 Total interest income 5,583 5,586 11,186 11,136 Total interest expense 975 1,065 1,943 2,151 Net interest income 4,608 4,521 9,243 8,985 Retailer share arrangements (1,027) (992) (2,097) (1,887) Reserve build (release) (163) (265) (174) (362) Net charge-offs 1,364 1,411 2,710 2,999 Provision for credit losses 1,201 1,146 2,536 2,637 Other income: Other income 137 118 270 267 Total other income 137 118 270 267 Other expense: Employee costs 516 509 1,031 1,015 Professional fees 220 236 429 453 Marketing and business development 137 127 251 243 Information processing 248 215 510 434 Fraud-related operational losses 78 34 166 75 Other segment items (a) 132 124 260 268 Total other expense 1,331 1,245 2,647 2,488 Provision for income taxes 301 289 543 516 Net earnings $ 885 $ 967 $ 1,690 $ 1,724 _____________ (a) Represents the total amount of other expenses included in Net earnings, including postage …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

EQUITY AND OTHER STOCK RELATED INFORMATION Preferred Stock At June 30, 2026 and December 31, 2025, the Company had 1.26 million and 1.25 million shares, respectively, of preferred stock outstanding, which had previously been approved by our Board for issuance. In addition, subject to approval from the Board, we have the ability to issue additional series of preferred stock up to a maximum of 300 million shares at a par value of $0.001 per share authorized for issuance. The following table summarizes the Company's preferred stock issued and outstanding at June 30, 2026 and December 31, 2025. Series Issuance Date Redeemable by Issuer Beginning Per Annum Dividend Rate Liquidation Preference per Share Total Shares Outstanding June 30, 2026 December 31, 2025 ($ in millions, except per share data) Series A (a) November 14, 2019 November 15, 2024 5.625% $1,000 750,000 $ 734 $ 734 Series B (a) February 23, 2024 May 15, 2029 8.25% (b) $1,000 500,000 $ 488 $ 488 Series C (a) June 5, 2026 August 15, 2031 7.25% (c) $100,000 5,000 $ 494 $ $ 1,716 $ 1,222 _______________________ (a) Issued as depositary shares, each representing a 1/40th interest in a share of Series A and B non-cumulative perpetual preferred stock, and representing a 1/100th interest in a share of Series C non-cumulative perpetual preferred stock. Dividends are payable quarterly on February 15, May 15, August 15 and November 15 of each calendar year at a fixed rate, in each case when, as and if declared by the Board of Di …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing