Synchrony Financial

Second-quarter 2026 net earnings were $885 million, or $2.59 per diluted share. Net interest income increased 2% to $4.6 billion; purchase volume grew 8% year over year to almost $50 billion; ending loan receivables grew 2% to $102 billion. Net interest margin was 15.08%, up 30 basis points from last year but down 42 basis points sequentially. Net charge-offs were 5.43%, down 27 basis points from 5.7% last year; the allowance for credit losses was 10.09%, down from 10.42% in the prior quarter and 10.59% a year ago. The company now expects 2026 diluted EPS of $9.25 to $9.50, expects full-year net charge-offs to remain below 5.5%, and expects ending loan receivables to grow mid-single digits by year-end.

Brian Doubles said the quarter showed strong demand, resilient consumer behavior, and the value of Synchrony’s diversified model. He emphasized higher spend per account, purchase volume records, and continued partner expansion, saying the company is using product breadth, underwriting, and customer experience to deepen relationships and grow. His tone was confident and upbeat, but framed around disciplined growth rather than aggression.

Brian Wenzel focused on the quarter’s financial mix: 8% purchase volume growth, 2% loan receivable growth to $102 billion, $4.6 billion of net interest income, and a 15.08% NIM. He explained that NIM was pressured sequentially by lower late fees, a higher mix of loan receivables, and seasonal funding dynamics, while lower benchmark rates helped funding costs. He also noted $1.2 billion of provision expense, a 5.43% net charge-off rate, $19.8 billion of liquid assets, a 13.2% CET1 ratio, $950 million returned to shareholders, and a $500 million preferred issuance with a 7.25% dividend. He said operating expenses in the back half should be relatively consistent with the first half and reiterated a target of CET1 around 11% over time.

Analysts focused on the second-half EPS setup, the path for NIM, RSA levels, and the implications of elevated payment rates and lower late fees. Management said much of the apparent EPS gap is about quarter-to-quarter modeling, with NIM expected to improve from the second-quarter trough as late-fee pressure abates, ALR mix normalizes, and PPPC benefits build. They also said RSAs should move up somewhat but remain within the 4%-4.5% long-term range, and that elevated payment rates largely reflect new program mix rather than a deterioration in consumer behavior.