Record First-Quarter Purchase Volume
Synchrony generated a record Q1 purchase volume of $43.0 billion, up 6% year-over-year, driven by multi-product engagement and higher spend per account across platforms.
Synchrony Financial
· SYF
April 21st, 2026
Summary
- Earnings Call Date:
- 2026-04-21
- Change Since:
- -1.29%
- Next Earnings Date:
- 2026-07-21
Earnings Call Sentiment
PositiveThe call presented a predominantly positive operational and financial picture: record purchase volumes, strong co-brand performance, improving credit metrics (notably a 96-basis-point reduction in net charge-offs), margin expansion, solid profitability and meaningful shareholder returns. Offsetting items include flat year-over-year receivables, modest declines in liquidity and capital ratios, higher operating expenses and a seasonal expectation of Q2 net charge-off peaking. Management provided an optimistic outlook for mid-single-digit receivables growth by year-end, NII growth, and an EPS guide of $9.10–$9.50, signaling confidence in continued momentum despite near-term headwinds.
Company Guidance
Synchrony expects mid‑single‑digit growth in ending loan receivables by year‑end (seasonally accelerating into the back half of 2026), driven by higher purchase volume and average active accounts and new program additions (including ~ $725M of Lowe’s commercial co‑brand receivables added in April); net interest income is expected to grow in 2026 as PPPCs build and funding costs decline (partially offset by lower late‑fee incidence); net charge‑offs are expected to be less than 5.5% for the full year with NCOs peaking in Q2; RSAs should increase but remain within the long‑term 4.0%–4.5% of average receivables (Q1 RSA was $1.1B, 4.31%); other expense growth is expected to trend in line with loan receivables; management reaffirmed no further broad‑based credit refinements and provided an EPS guide of $9.10–$9.50 while remaining positioned to return excess capital (new share buyback authorization up to $6.5B).
Strong Co-Brand Performance
Co-branded credit cards (including dual cards) comprised 51% of total purchase volume and increased 20% year-over-year, reflecting product upgrades and enhanced utility across card programs.
Platform-Level Growth
Platform purchase volume growth: Diversified & Value +9%, Digital +8%, Lifestyle +7%, Health & Wellness +3%, while Home & Auto was flat; discretionary spend accelerated and outpaced nondiscretionary for the third consecutive quarter.
Improved Credit Metrics
Net charge-off rate improved to 5.42% from 6.38% a year ago (down 96 basis points); provision for credit losses decreased $156 million to $1.3 billion, and RSA (reserve for ... ) was $1.1 billion or 4.31% of average loan receivables.
Net Interest Income and Margin Expansion
Net interest income increased 4% to $4.6 billion; net interest margin rose 76 basis points year-over-year to 15.5%, driven by higher loan receivables yields (including PPPC impact) and lower funding costs (interest expense down 11%).
Profitability and Capital Generation
Net earnings were $805 million (EPS $2.27 diluted), return on average assets 2.7%, return on tangible common equity 24.5%, and tangible book value per share increased 8% year-over-year.
Funding & Liability Improvements
Direct deposits grew by $3.1 billion while brokered deposits declined $3.7 billion year-over-year; deposits represented 83% of total funding. Issued $750 million senior unsecured debt (coupon 4.95%) and $500 million secured bond (coupon 4.22%).
Capital Return to Shareholders & Buyback Authorization
Returned $1.0 billion to shareholders in Q1 (≈$900 million repurchases, $104 million dividends) and Board approved a new open-ended $6.5 billion share repurchase program replacing the prior program.
Strategic Partnerships and Distribution Expansion
Added or renewed 15+ partners including Indian Motorcycle, Harbor Freight, Miracle-Ear; expanded CareCredit partnerships (Planet DDS, FIGO, Embrace) and broadened CareCredit acceptance on walmart.com to increase consumer financing access.
Customer Acquisition Traction
New account originations accelerated ~15% in Q1 with early April trends consistent to slightly stronger, supporting management's expectation of second-half receivable acceleration.
Workplace Recognition
Ranked #1 Best Company to Work For in the U.S. by Fortune Magazine and Great Place to Work in 2026, underscoring employee engagement and culture.
Operator
Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Please standby. Your program is about to begin. Good morning, and welcome to the Synchrony Financial First Quarter 2026 Earnings Conference Call. Please refer to the company's Investor Relations site for access to the earnings materials. Please be advised that today's conference call is being recorded.
Currently, all callers have been placed in a listen-only mode. The call will open for your questions following the conclusion of management's prepared remarks. I will now turn the call over to Kathryn Miller, Senior Vice President of Investor Relations. You may begin.
Kathryn Miller
Thank you and good morning, everyone. Welcome to our quarterly earnings conference call. In addition to today's press release, we have provided a presentation that covers the topics we plan to address during our call. The press release, detailed financial schedules and presentation are available on our website, synchronyfinancial.com. This information can be accessed by going to the Investor Relations section of the website. Before we get started, I wanted to remind you that our comments today will include forward-looking statements. These statements are subject to risks and uncertainty, and actual results could differ materially. We list the factors that might cause actual results to differ materially in our SEC filings, which are available on our website.
During the call, we will refer to non-GAAP financial measures in discussing the com...
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