Synchrony Financial SYF · USD

SEGMENT REPORTINGWe conduct our operations through a single business segment, which derives interest and fee income earned on our credit products we offer to our customers. Our credit products include private label, dual, co-brand and general purpose credit cards, as well as short- and long-term installment loans. Revenue generating activities are aligned through five sales platforms (Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle). Those platforms are organized by the types of partners we work with to reach our customers. Substantially all of our interest and fees on loans and long-lived assets relate to our operations within the United States.Pursuant to ASC 280, Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance.The chief operating decision maker, our President and Chief Executive Officer, uses consolidated net earnings to assess the performance and profitability of our single business segment. While revenue generating activities are aligned through our five sales platforms, expense activities, including funding costs, credit losses and operating expenses, are managed for the Company as a whole. As a result, detailed profitability information for each sales platform is not used by our chief operating decision maker. The chief operating decision maker uses consolidated net earnings to assess performance by comparing to and monitoring against budget and prior year results. This information is used to manage resources to drive business and net earnings growth, including investment in key strategic priorities, as well as determine the Company's ability to return capital to shareholders.

DEBT SECURITIES All of our debt securities are classified as available-for-sale and are held to meet our liquidity objectives or to comply with the Community Reinvestment Act (“CRA”). Our debt securities consist of the following: December 31, 2025December 31, 2024GrossGrossGrossGrossAmortizedunrealizedunrealizedEstimatedAmortizedunrealizedunrealizedEstimated ($ in millions)costgainslossesfair valuecostgainslossesfair valueU.S. government and federal agency$1,485 $7 $— $1,492 $1,841 $3 $— $1,844 State and municipal35 — — 35 17 — (1)16 Residential mortgage-backed(a)318 1 (22)297 324 — (35)289 Asset-backed(b)509 6 — 515 919 4 (1)922 Other8 1 — 9 8 — — 8 Total(c)$2,355 $15 $(22)$2,348 $3,109 $7 $(37)$3,079 _____________(a) All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. (b) Our asset-backed securities are collateralized by credit card and auto loans.(c) At December 31, 2025 and 2024, the estimated fair value of debt securities pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve discount window advances was $470 million and $551 million, respectively.The following table presents the estimated fair values and gross unrealized losses of our available-for-sale debt securities: In loss position forLess than 12 months12 months or moreGrossGrossEstimatedunrealizedEstimatedunrealized ($ in millions)fair valuelossesfair valuelossesAt December 31, 2025U.S. government and federal agency$— $— $— $— State and municipal17 — 5 — Residential mortgage-backed— — 229 (22)Asset-backed— — — — Other— — — — Total(a)$17 $— $234 $(22)At December 31, 2024U.S. government and federal agency$199 $— $— $— State and municipal12 (1)3 — Residential mortgage-backed5 — 279 (35)Asset-backed79 (1)4 — Other— — — — Total(a)$295 $(2)$286 $(35)______________________(a)Consists of 211 and 224 securities in gross unrealized loss positions as of December 31, 2025 and 2024, respectively. We regularly review debt securities for impairment resulting from credit loss using both qualitative and quantitative criteria, as necessary based on the composition of the portfolio at period end. Based on our assessment, no material impairments from credit losses were recognized during the period.

INCOME TAXES Earnings before Provision for Income TaxesFor the years ended December 31 ($ in millions)202520242023U.S.$4,574 $4,519 $2,873 Non-U.S.47 34 31 Earnings before provision for income taxes$4,621 $4,553 $2,904 Provision for Income TaxesFor the years ended December 31 ($ in millions)202520242023Current provision for income taxesU.S. federal$705 $990 $943 U.S. state and local167 155 171 Non-U.S.13 7 10 Total current provision for income taxes885 1,152 1,124 Deferred provision (benefit) for income taxesU.S. federal184 (80)(384)U.S. state and local1 (17)(73)Non-U.S.(1)(1)(1)Deferred provision (benefit) for income taxes184 (98)(458)Total provision for income taxes$1,069 $1,054 $666 Reconciliation of Our Effective Tax Rate to the U.S. Federal Statutory Income Tax RateFor the years ended December 31 ($ in millions)202520242023Rate ComponentAmountRateAmountRateAmountRateU.S. federal statutory income tax rate$970 21.0 %$956 21.0 %$610 21.0 %U.S. state and local income taxes, net of federal effect156 3.4 153 3.4 103 3.5 U.S. federalTax credits(58)(1.3)(37)(0.8)(43)(1.5)Nontaxable and nondeductible items9 0.2 18 0.4 6 0.2 Other reconciling items15 0.3 8 0.1 12 0.4 Non-U.S. tax effects1 — — — 3 0.1 Changes in prior year uncertain tax benefits(24)(0.5)(44)(1.0)(25)(0.8)Effective tax rate$1,069 23.1 %$1,054 23.1 %$666 22.9 %State and Local Income TaxesThe jurisdictions that contributed to the majority of our U.S state and local income taxes are California, Connecticut and New York for all years presented, while Florida, Illinois, New Jersey, Pennsylvania and Texas also contributed to the majority in certain years. Income Taxes PaidFor the years ended December 31 ($ in millions)202520242023U.S. federal$559 $922 $941 U.S. state and localCalifornia43 — 26 All other states100 156 149 Non-U.S.

ACQUISITIONS AND DISPOSITIONS Ally LendingOn March 1, 2024, we acquired Ally Financial Inc.'s point-of-sale financing business ("Ally Lending") for cash consideration of $2.0 billion. This acquisition deepened our presence and reach in the home improvement and health and wellness sectors, including high-growth specialty areas such as roofing, HVAC, and windows, as well as in cosmetic, audiology, and dentistry. The Ally Lending acquisition was accounted for as a business combination using the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair value as of the acquisition date. The valuation of the assets acquired and liabilities assumed was completed in 2024, and during the year ended December 31, 2024, measurement period adjustments were recognized related to the acquisition as detailed in the table below.($ in millions)Amounts Recognized as of Acquisition Date (as previously reported as of March 31, 2024)Measurement Period AdjustmentsAmounts Recognized as of Acquisition Date (as adjusted)Assets acquiredCash$34 $— $34 Loan receivables(a)1,875 (198)1,677 Intangible assets, net23 (5)18 Other assets2 — 2 Total $1,934 $(203)$1,731 Liabilities assumedOther liabilities(16)2 (14)Total net identifiable assets acquired$1,918 $(201)$1,717 Less: Total cash consideration paid1,969 — 1,969 Goodwill$51 $201 $252 _______________________(a) Loan discounts are recognized into interest income over the estimated remaining life of the acquired loans. The amounts above represent the estimated fair values of the respective assets acquired and liabilities assumed as of the date of acquisition. The estimated fair values reflect market participant assumptions about facts and circumstances that existed at the acquisition date. The measurement period adjustments reflected above did not result from events occurring subsequent to the acquisition date. The goodwill recognized related to the acquisition is tax-deductible and reflected the expected synergies and operational efficiencies arising from the transaction.The acquisition primarily included loan receivables with an unpaid principal balance of $2.2 billion. These loan receivables are reported within Consumer installment loans in Note 5. Loan Receivables and Allowance for Credit Losses.

Our information security program includes administrative, technical and physical safeguards and is designed to provide an appropriate level of protection to maintain the confidentiality, integrity and availability of our Company’s, our partners' and our customers’ information, as well as our information systems. This includes protecting against known and evolving threats to the security of customer records and information, and against unauthorized or unintended access, compromise, disruption, loss or destruction of our Company's, our partners' and our customers' records or information and of our information systems.We have layers of protective controls embedded throughout our technology environment designed to create a solid security shield between actual or potential threats and our assets. Further, our information security program is designed to adapt to an evolving landscape of emerging and available technology and related threats, such as artificial intelligence ("AI"). Through the evaluation of data gathered from external sources about emerging threats and incidents, assessments of internal incidents and strategic technology investments, security controls are adjusted on an as needed basis. Key components of our information security program, include:•Application, Infrastructure, Hardware and Software Security: We have a comprehensive set of controls and requirements designed to protect our data, applications, infrastructure, hardware and software. We have also developed and implemented capabilities to identify, analyze and remediate threats and vulnerabilities. throughout our technology environment.•Identity and Access Management: We maintain identity and access management controls to reduce the risk of unauthorized or unintended access to critical systems and sensitive information. •Information Security Incident Response: We have a systematic, coordinated and cross-functional approach to analyze, investigate, contain and resolve information security incidents. •Business Continuity and Recovery: We employ business continuity, backup and disaster recovery procedures for all the systems that are used for storing, processing and transferring customer information, and we periodically test and validate our disaster recovery plans to assess our resilience capabilities.

DEPOSITSDepositsAt December 31 ($ in millions)20252024Interest-bearing deposits:Money market and other demand deposits$2,837 $2,264 Savings29,777 28,605 Certificates of deposit:Direct42,229 41,055 Brokered3,316 5,891 Brokered sweep accounts2,589 3,849 Total interest-bearing deposits80,748 81,664 Total non-interest-bearing deposits396 398 Total deposits$81,144 $82,062 Certificates of DepositAt December 31, 2025, our certificates of deposit maturing over the next five years and thereafter were as follows: ($ in millions)20262027202820292030ThereafterCertificates of deposit$34,275 $5,490 $2,335 $1,186 $2,070 $189 At December 31, 2025 and 2024, direct certificates of deposit of $12.3 billion and $11.2 billion, respectively, were of denominations at or exceeding applicable FDIC insurance limits, which are generally $250,000 per depositor for each account ownership category. These amounts include partially insured certificates of deposit. At December 31, 2025 and 2024, the portion of these direct certificates of deposit estimated to be uninsured was $4.2 billion and $3.7 billion, respectively. Brokered certificates of deposit are assumed to be individual deposit balances within applicable FDIC insurance limits.Brokered Sweep DepositsOur broker network deposit sweeps are procured through a program arranger who channels account deposits to us. Unless extended, the contracts associated with these broker network deposit sweeps will terminate between 2026 and 2029.

BORROWINGS20252024At December 31 ($ in millions)Maturity dateInterest RateWeighted average interest rateOutstanding Amount(a)(b)Outstanding Amount(a)(b)Borrowings of consolidated securitization entities:Fixed securitized borrowings2026 - 20284.06% - 5.74%4.97 %$5,490 $4,917 Floating securitized borrowings2027 - 20284.44% - 4.85%4.59 %2,925 2,925 Total borrowings of consolidated securitization entities4.84 %8,415 7,842 Senior unsecured notes:Synchrony Financial senior unsecured notes:Fixed senior unsecured notes2026 - 20312.88% - 5.15%3.90 %2,892 4,637 Fixed-to-floating senior unsecured notes2029 - 20365.02% - 6.00%5.62 %2,534 745 Synchrony Bank senior unsecured notes:Fixed senior unsecured notes20275.63%5.63 %599 1,497 Total senior unsecured notes4.79 %6,025 6,879 Subordinated unsecured notes:Synchrony Financial subordinated unsecured notes:Fixed subordinated unsecured notes20337.25%7.25 %742 741 Total senior and subordinated unsecured notes5.06 %6,767 7,620 Total borrowings$15,182 $15,462 ___________________(a)Includes unamortized debt premiums, discounts and issuance costs.(b)The Company may redeem certain borrowings prior to their original contractual maturity dates in accordance with the optional redemption provision specified in the respective instruments.Debt MaturitiesThe following table summarizes the maturities of the principal amount of our borrowings of consolidated securitization entities and senior and subordinated unsecured notes over the next five years and thereafter: ($ in millions)20262027202820292030ThereafterBorrowings$2,250 $5,350 $2,925 $1,150 $750 $2,800 Senior Unsecured NotesThe following table summarizes the issuances of Synchrony Financial fixed-to-floating rate senior unsecured notes during the year ended December 31, 2025:($ in millions):Issuance DatePrincipal AmountFixed Interest RateInterest Rate Reset DateFloating Rate Spread(a)MaturityMarch 2025$800 5.450%March 6, 2030168 bpsMarch 2031July 2025$500 5.019%July 29, 2028139.5 bpsJuly 2029July 2025$500 6.000%July 29, 2035207 bpsJuly 2036___________________(a)Floating rate applicable at interest rate reset date through maturity, based on compounded Secured Overnight Financing Rate plus floating rate spread noted above.

EARNINGS PER SHAREBasic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the assumed conversion of all dilutive securities, which are calculated using the treasury stock method.The following table presents the calculation of basic and diluted earnings per common share:Years ended December 31,($ in millions, except per share data)202520242023Net earnings$3,552 $3,499 $2,238 Preferred stock dividends(83)(72)(42)Net earnings available to common stockholders$3,469 $3,427 $2,196 Weighted average common shares outstanding, basic369.9 396.5 421.2 Effect of dilutive securities4.0 4.1 2.3 Weighted average common shares outstanding, dilutive373.9 400.6 423.5 Earnings per basic common share$9.38 $8.64 $5.21 Earnings per diluted common share$9.28 $8.55 $5.19 We have issued stock-based awards under the Synchrony Financial 2024 Long-Term Incentive Plan, along with prior incentive plans. Awards that were considered anti-dilutive and therefore were excluded from the computation of diluted earnings per common share were less than 1 million shares for both the years ended December 31, 2025 and 2024, and 4 million shares for the year ended December 31, 2023.