Synchrony Financial
For the period ended Sep 30, 2026. Filed Oct 22, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 22, 2026
SYF$73.74-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-23.
0001601712-26-000033
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsIndex to Condensed Consolidated Financial StatementsCondensed Consolidated Statements of Earnings –Three and six months ended June 30, 2026 and 2025Condensed Consolidated Statements of Comprehensive Income –Three and six months ended June 30, 2026 and 2025Condensed Consolidated Statements of Financial Position –June 30, 2026 and December 31, 2025Condensed Consolidated Statements of Changes in Equity –Three and six months ended June 30, 2026 and 2025Condensed Consolidated Statements of Cash Flows –Three and six months ended June 30, 2026 and 2025Notes to Condensed Consolidated Financial StatementsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-22.
0001601712-26-000043
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsIndex to Condensed Consolidated Financial StatementsCondensed Consolidated Statements of Earnings –Three and nine months ended September 30, 2026 and 2025Condensed Consolidated Statements of Comprehensive Income –Three and nine months ended September 30, 2026 and 2025Condensed Consolidated Statements of Financial Position –September 30, 2026 and December 31, 2025Condensed Consolidated Statements of Changes in Equity –Three and nine months ended September 30, 2026 and 2025Condensed Consolidated Statements of Cash Flows –Three and nine months ended September 30, 2026 and 2025Notes to Condensed Consolidated Financial StatementsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 393 previous paragraphs and 406 current paragraphs.
286 unchanged; 101 reworded; 16 added; 6 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 82 previous and 83 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
•Retailer share arrangements increased $72 million and $282 million for the three and nine months ended September 30, 2026, respectively, primarily reflecting program performance.
Current report
2026 Partner Agreements and Other Business Developments
Current report
•we integrated with Vetspire to embed flexible financing from CareCredit directly into Vetspire’s AI-enabled veterinary practice management platform.
Current report
•we announced a new integration with Stripe, making it easier for both Synchrony and Stripe's providers and health and wellness retailers to offer CareCredit financing as part of their online checkout experience.
Current report
•During the third quarter, we also continued to expand the Company's AI strategy as we:
Current report
•established a partnership with OpenAI, combining strategic agentic commerce collaboration with enterprise AI access.
Current report
•joined the Personal Agent Protocol ("Poppy") initiative led by Sierra and Meta as a design partner, reflecting our commitment to helping define the open standards that will underpin the future of agentic commerce.
Current report
The yield on average interest-earning assets decreased 31 basis points and increased 3 basis points for the three and nine months ended September 30, 2026, respectively.
Current report
Other income decreased by $22 million, or 17.3%, and $19 million, or 4.8%, for the three and nine months ended September 30, 2026, respectively.
Current report
The decreases for the three and nine months ended September 30, 2026 were primarily driven by higher loyalty costs, partially offset by increases in interchange revenue and protection product revenue.
Current report
Purchase volume increased by 4.8% and 7.3% for the three and nine months ended September 30, 2026, respectively, primarily reflecting higher spend per average active account across our Digital partners. Average active accounts decreased by 1.6% and increased 0.7% for the three and nine months ended September 30, 2026, respectively.
Current report
During the nine months ended September 30, 2026, we made repayments totaling $500 million of senior unsecured notes issued by Synchrony Financial.
Current report
On July 31, 2026, the OCC and FDIC issued a proposal that would revise how they evaluate an insured depository institution’s record of satisfying the credit needs of its entire communities, including low- and moderate-income individuals and neighborhoods, under the Community Reinvestment Act (“CRA”). The Bank is currently designated as a Limited Purpose bank under the CRA and therefore is generally evaluated on the basis of its community development activity in the geography in which its main office is located. The proposal seeks comment on, among other things, changing the eligibility criteria for, or eliminating altogether, the Limited Purpose designation. We are evaluating the potential impact of the proposal on the Bank.
Current report
On September 30, 2026, the Federal Reserve Board released final rules modifying supervisory stress testing requirements and the stress capital buffer framework. Among other changes, the final rules move the “as of” date for a firm’s new stress capital buffer from October 1st of the year in which the firm participates in the Federal Reserve Board’s supervisory stress test to January 1st of the following year. As a result, because 2028 is the next supervisory stress test in which we are required to participate, we will receive final notice of any changes to our stress test capital buffer of 2.5% by September 30, 2028, and any changes would not take effect until January 1, 2029.
Current report
Senior Unsecured Notes
Current report
The following table summarizes the issuances of Synchrony Financial fixed-to-floating rate senior unsecured notes during the nine months ended September 30, 2026:
Removed paragraphs (6)
Previous report
2026 Partner Agreements
Previous report
The yield on average interest-earning assets increased by one basis point and 21 basis points for the three and six months ended June 30, 2026, respectively.
Previous report
Other income increased by $19 million, or 16.1%, and $3 million, or 1.1%, for the three and six months ended June 30, 2026, respectively.
Previous report
Purchase volume increased by 9.2% and 8.7% for the three and six months ended June 30, 2026, respectively, primarily reflecting strong performance across partners with broad diversified offerings which drove both higher spend per average active account and higher average active accounts. Average active accounts increased by 1.4% and 2.0% for the three and six months ended June 30, 2026, respectively.
Previous report
Loan receivables increased 2.4% to $102.2 billion at June 30, 2026, compared to $99.8 billion at June 30, 2025 reflecting higher purchase volume, including the impact of the acquisition of the Lowe's commercial co-branded credit card portfolio, partially offset by the effects of higher payment rates.
Previous report
(d)Includes $750 million principal amount issued in February 2026, interest rate fixed at 4.947% through February 24, 2031; resets February 25, 2031 to floating rate based on compounded Secured Overnight Financing Rate ("SOFR") plus 153 basis points through maturity in February 2032.
Reworded paragraphs (101)
Previous wording
We are a premier consumer financial services company delivering one of the industry's most complete digitally-enabled product suites. Our experience, expertise and scale encompass a broad spectrum of industries including digital, health and wellness, retail, telecommunications, home, auto, outdoor, pet and more. We have an established and diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers, which we refer to as our “partners.” For the three and six months ended June 30, 2026, we financed $49.8 billion and $92.8 billion of purchase volume, respectively, and had 68.3 million and 68.7 million average active accounts, respectively, and at June 30, 2026, we had $102.2 billion of loan receivables.
Current wording
We are a premier consumer financial services company delivering one of the industry's most complete digitally-enabled product suites. Our experience, expertise and scale encompass a broad spectrum of industries including digital, health and wellness, retail, telecommunications, home, auto, outdoor, pet and more. We have an established and diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers, which we refer to as our “partners.” For the three and nine months ended September 30, 2026, we financed $49.7 billion and $142.5 billion of purchase volume, respectively, and had 68.3 million and 68.6 million average active accounts, respectively, and at September 30, 2026, we had $103.3 billion of loan receivables.
Previous wording
We offer our credit products primarily through our wholly-owned subsidiary, the Bank. In addition, through the Bank, we offer, directly to retail, affinity relationships and commercial customers, a range of deposit products insured by the Federal Deposit Insurance Corporation (“FDIC”), including certificates of deposit, individual retirement accounts (“IRAs”), money market accounts, savings accounts and sweep and affinity deposits. We also take deposits at the Bank through third-party firms that offer our FDIC-insured deposit products to their customers. Our deposit base has continued to serve as a source of stable and diversified low-cost funding for our credit activities. At June 30, 2026, we had $82.8 billion in deposits, which represented 83% of our total funding sources.
Current wording
We offer our credit products primarily through our wholly-owned subsidiary, the Bank. In addition, through the Bank, we offer, directly to retail, affinity relationships and commercial customers, a range of deposit products insured by the Federal Deposit Insurance Corporation (“FDIC”), including certificates of deposit, individual retirement accounts (“IRAs”), money market accounts, savings accounts and sweep and affinity deposits. We also take deposits at the Bank through third-party firms that offer our FDIC-insured deposit products to their customers. Our deposit base has continued to serve as a source of stable and diversified low-cost funding for our credit activities. At September 30, 2026, we had $83.0 billion in deposits, which represented 83% of our total funding sources.
Previous wording
Our Home & Auto sales platform provides comprehensive payments and financing solutions with integrated in-store and digital experiences through a broad network of partners and merchants providing home and automotive merchandise and services, as well as our Synchrony Car Care network and Synchrony HOME credit card offering. Our Home & Auto sales platform partners include a wide range of key retailers in the home improvement, furniture, bedding, flooring, appliance and electronics industries, such as Ashley HomeStores, Inc., Floor & Decor, Lowe's, and Mattress Firm, as well as automotive merchandise and services, such as Chevron and Discount Tire. In addition, we also have program agreements with manufacturers, buying groups and industry associations, such as Generac, Nationwide Marketing Group and the Home Furnishings Association.
Current wording
Our Home & Auto sales platform provides comprehensive payments and financing solutions with integrated in-store and digital experiences through a broad network of partners and merchants providing home and automotive merchandise and services, as well as through our Synchrony Car Care network and Synchrony HOME credit card offering. Our Home & Auto sales platform partners include a wide range of key retailers in the home improvement, furniture, bedding, flooring, appliance and electronics industries, such as Ashley HomeStores, Inc., Floor & Decor, Lowe's, and Mattress Firm, as well as in the automotive merchandise and services sector, such as Chevron and Discount Tire. In addition, we also have program agreements with manufacturers, buying groups and industry associations, such as Generac, Nationwide Marketing Group and the Home Furnishings Association.
Previous wording
Our Diversified & Value sales platform provides comprehensive payments and financing solutions with integrated in-store and digital experiences through large retail partners who deliver everyday value to consumers shopping for daily needs or important life moments. Our Diversified & Value sales platform is comprised of six large retail partners: Belk, Fleet Farm, JCPenney, OnePay, Sam's Club and TJX Companies, Inc.
Current wording
Our Diversified & Value sales platform provides comprehensive payments and financing solutions with integrated in-store and digital experiences through large retail partners who deliver everyday value to consumers shopping for daily needs or important life moments. Our Diversified & Value sales platform is comprised of our large retail partners: Belk, Fleet Farm, JCPenney, Sam's Club and TJX Companies, Inc., as well as a partnership with OnePay as the exclusive issuer of a general purpose and private label card program at Walmart.
Previous wording
•Co-Branded Cards. Our co-branded cards comprise our patented Dual Cards and general purpose co-branded credit cards. Our Dual Cards are credit cards that function as private label credit cards when used to purchase goods and services from our partners, and as general purpose credit cards when used to make purchases from other retailers wherever cards from those card networks are accepted or for cash advance transactions. We also offer a Synchrony-branded general purpose credit card. Our co-branded cards are offered across all of our sales platforms and credit is typically extended on standard terms only. We offer consumer co-branded cards through over 15 of our large partners, of which the majority are Dual Cards, as well as our CareCredit Dual Card. Our consumer co-branded cards totaled 34% of our total loan receivables portfolio at June 30, 2026.
Current wording
•Co-Branded Cards. Our co-branded cards comprise our patented Dual Cards and general purpose co-branded credit cards. Our Dual Cards are credit cards that function as private label credit cards when used to purchase goods and services from our partners, and as general purpose credit cards when used to make purchases from other retailers wherever cards from those card networks are accepted or for cash advance transactions. We also offer a Synchrony-branded general purpose credit card. Our co-branded cards are offered across all of our sales platforms and credit is typically extended on standard terms only. We offer consumer co-branded cards through over 15 of our large partners, of which the majority are Dual Cards, as well as our CareCredit Dual Card. Our consumer co-branded cards totaled 35% of our total loan receivables portfolio at September 30, 2026.
Previous wording
We offer private label cards and Dual Cards for commercial customers that are similar to our consumer offerings, and includes the Lowe's commercial co-branded credit card portfolio acquired in April 2026. We also offer a commercial pay-in-full accounts receivable product to a wide range of business customers.
Current wording
We offer private label cards and Dual Cards for commercial customers that are similar to our consumer offerings, including the Lowe's commercial co-branded credit card portfolio acquired in April 2026. We also offer a commercial pay-in-full accounts receivable product to a wide range of business customers.
Previous wording
We believe our business and results of operations will be impacted in the future by various trends and conditions. For a discussion of certain trends and conditions, see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Trends and Conditions” in our 2025 Form 10-K. For a discussion of how certain trends and conditions impacted the three and six months ended June 30, 2026, see “—Results of Operations.”
Current wording
We believe our business and results of operations will be impacted in the future by various trends and conditions. For a discussion of certain trends and conditions, see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Trends and Conditions” in our 2025 Form 10-K. For a discussion of how certain trends and conditions impacted the three and nine months ended September 30, 2026, see “—Results of Operations.”
Previous wording
Summary Highlights for the Three and Six Months Ended June 30, 2026
Current wording
Summary Highlights for the Three and Nine Months Ended September 30, 2026
Previous wording
Net earnings decreased to $885 million from $967 million and was flat at $1.7 billion for the three and six months ended June 30, 2026, respectively, primarily reflecting the following key drivers:
Current wording
Net earnings decreased to $892 million from $1.1 billion and decreased to $2.6 billion from $2.8 billion for the three and nine months ended September 30, 2026, respectively, primarily reflecting the following key drivers:
Previous wording
•Increases in net interest income of $87 million and $258 million for the three and six months ended June 30, 2026, respectively, primarily driven by decreases in interest expense and increases in interest and fees on loans, partially offset by lower interest income from our liquidity portfolio.
Current wording
•Net interest income increased $89 million and $347 million for the three and nine months ended September 30, 2026, respectively, primarily driven by higher interest and fees on loans and lower interest expense, partially offset by lower interest income from our liquidity portfolio.
Previous wording
•Provision for credit losses increased $55 million for the three months ended June 30, 2026, primarily driven by a lower reserve release in the current year period, partially offset by a decrease in net charge-offs. Provision for credit losses decreased $101 million in the six months ended June 30, 2026, primarily driven by a decrease in net charge-offs, partially offset by a lower reserve release in the current year period.
Current wording
•Provision for credit losses increased $120 million and $19 million for the three and nine months ended September 30, 2026, respectively. The increase for the three months ended September 30, 2026 was primarily driven by a reserve build in the current year period versus a reserve release in the prior year period, partially offset by a decrease in net charge-offs. The increase for the nine months ended September 30, 2026 was primarily driven by a lower reserve release in the current year period, partially offset by a decrease in net charge-offs.
Previous wording
•Retailer share arrangements increased $35 million and $210 million for the three and six months ended June 30, 2026, respectively, reflecting program performance and higher purchase volume, and other expense increased $86 million and $159 million for the three and six months ended June 30, 2026, respectively, primarily driven by higher operational losses and costs related to technology investments.
Current wording
•Other expense increased $123 million and $282 million for the three and nine months ended September 30, 2026, respectively, primarily driven by higher operational losses, costs related to technology investments and higher marketing expenses.
Previous wording
•Loan receivables increased 2.4% to $102.2 billion at June 30, 2026 compared to June 30, 2025, reflecting higher purchase volume, including the impact of the acquisition of the Lowe's commercial co-branded credit card portfolio, partially offset by the effects of higher payment rates.
Current wording
•Loan receivables increased 3.2% to $103.3 billion at September 30, 2026 compared to September 30, 2025, reflecting higher purchase volume, including the impacts of partner expansion, the acquisition of the Lowe's commercial co-branded credit card portfolio and higher spend per average active account, partially offset by the effects of higher payment rates.
Previous wording
•Over-30 day loan delinquencies as a percentage of period-end loan receivables decreased 2 basis points to 4.16% at June 30, 2026 from 4.18% at June 30, 2025. The net charge-off rate decreased 27 basis points and 61 basis points for the three and six months ended June 30, 2026, respectively, to 5.43% for both periods.
Current wording
•Over-30 day loan delinquencies as a percentage of period-end loan receivables decreased 5 basis points to 4.34% at September 30, 2026 from 4.39% at September 30, 2025. The net charge-off rate decreased 37 basis points and 53 basis points to 4.79% and 5.21% for the three and nine months ended September 30, 2026, respectively.
Previous wording
•Our allowance coverage ratio (allowance for credit losses as a percentage of period-end loan receivables) decreased to 10.09% at June 30, 2026, as compared to 10.59% at June 30, 2025.
Current wording
•Our allowance coverage ratio (allowance for credit losses as a percentage of period-end loan receivables) decreased to 10.01% at September 30, 2026, compared to 10.35% at September 30, 2025.
Previous wording
•At June 30, 2026, deposits represented 83% of our total funding sources. Total deposits increased by 2.0% to $82.8 billion at June 30, 2026, compared to December 31, 2025.
Current wording
•At September 30, 2026, deposits represented 83% of our total funding sources. Total deposits increased by 2.2% to $83.0 billion at September 30, 2026, compared to December 31, 2025.
Previous wording
•In June 2026, we issued depositary shares representing $500 million of 7.250% fixed rate reset non-cumulative perpetual preferred stock, Series C, with dividends payable quarterly beginning in August 2026.
Current wording
•In June 2026, we issued depositary shares representing $500 million of 7.250% fixed rate reset non-cumulative perpetual preferred stock, Series C, with quarterly dividend payments that commenced in August 2026.
Previous wording
•During the six months ended June 30, 2026, we repurchased $1.8 billion of our outstanding common stock, and declared and paid cash dividends of $0.60 per share, or $204 million in the aggregate.
Current wording
•During the nine months ended September 30, 2026, we repurchased $2.9 billion of our outstanding common stock, and declared and paid cash dividends of $0.94 per share, or $314 million in the aggregate.
Previous wording
•At June 30, 2026, we had a total remaining share repurchase authorization of $5.7 billion under the program that was announced in April 2026 and does not have an expiration date. In addition, the Company announced that the Board approved an increase of our quarterly dividend to $0.34 per common share commencing in the third quarter of 2026.
Current wording
•At September 30, 2026, we had a total remaining share repurchase authorization of $4.6 billion under the program that was announced in April 2026 and does not have an expiration date. In addition, the Company announced that the Board approved an increase of our quarterly dividend to $0.34 per common share, which commenced in the third quarter of 2026.
Previous wording
During the six months ended June 30 2026, and to date, we continued to expand and diversify our portfolio with the addition or renewal of more than 30 partners, which included the following:
Current wording
During the nine months ended September 30, 2026, and to date, we continued to expand and diversify our portfolio with the addition or renewal of more than 40 partners, which included the following:
Previous wording
•In our Health & Wellness sales platform, we also expanded CareCredit partnerships with pet insurance providers, Figo and Embrace, to enable reimbursements back to CareCredit accounts, making the solution available for more than 1.7 million pets.
Current wording
•we expanded CareCredit partnerships with pet insurance providers, Figo and Embrace, to enable reimbursements back to CareCredit accounts, making the solution available for more than 1.7 million pets.
Previous wording
(2)Includes average restricted cash balances of $691 million and $642 million for the three months ended June 30, 2026 and 2025, respectively, and $377 million and $666 million for the six months ended June 30, 2026 and 2025, respectively.
Current wording
(2)Includes average restricted cash balances of $688 million and $159 million for the three months ended September 30, 2026 and 2025, respectively, and $482 million and $495 million for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
(3)Interest income on loan receivables includes fees on loans, which primarily consist of late fees on our credit products, of $508 million and $560 million for the three months ended June 30, 2026 and 2025, respectively, and $1.1 billion for both of the six months ended June 30, 2026 and 2025.
Current wording
(3)Interest income on loan receivables includes fees on loans, which primarily consist of late fees on our credit products, of $558 million and $592 million for the three months ended September 30, 2026 and 2025, respectively, and $1.6 billion and $1.7 billion for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Interest income was flat for the three months ended June 30, 2026 reflecting an increase of 1.0% in interest and fees on loans offset by lower interest income from our liquidity portfolio. Interest income increased $50 million, or 0.4%, for the six months ended June 30, 2026 reflecting an increase of 1.4% in interest and fees on loans, partially offset by lower interest income from our liquidity portfolio. The increases in interest and fees on loans for the three and six months ended June 30, 2026 were primarily driven by growth in average loan receivables, as well as the impact of our product, pricing and policy changes for the six months ended June 30, 2026.
Current wording
Interest income increased by $57 million, or 1.0%, and $107 million, or 0.6%, for the three and nine months ended September 30, 2026, respectively, reflecting increases of 1.5% and 1.4% in interest and fees on loans, respectively, partially offset by lower interest income from our liquidity portfolio. The increases in interest and fees on loans for the three and nine months ended September 30, 2026 were primarily driven by growth in average loan receivables. The increase for the nine months ended September 30, 2026 was also driven by the impact of our product, pricing and policy changes.
Previous wording
Average loan receivables, including held for sale, increased 1.5% and 0.6% for the three and six months ended June 30, 2026, respectively, reflecting higher purchase volume, partially offset by the effects of higher payment rates. Purchase volume increased by 8.1% and 6.9% for the three and six months ended June 30, 2026, respectively, primarily reflecting the impacts of partner expansion and higher spend per average active account.
Current wording
Average loan receivables, including held for sale, increased 2.4% and 1.2% for the three and nine months ended September 30, 2026, respectively, reflecting higher purchase volume, partially offset by the effects of higher payment rates. Purchase volume increased by 8.0% and 7.3% for the three and nine months ended September 30, 2026, respectively, primarily reflecting the impacts of partner expansion, the acquisition of the Lowe's commercial co-branded credit card portfolio and higher spend per average active account.
Previous wording
The change in yield for the three months ended June 30, 2026 reflects the impact of the mix of loan receivables as a percentage of interest-earning assets versus the prior year, partially offset by decreases in the yield on both loan receivables and our liquidity portfolio. The loan receivables yield decreased 11 basis points to 21.43% for the three months ended June 30, 2026 primarily driven by lower benchmark rates and lower assessed late fees, partially offset by the impacts of our product, pricing and policy changes.
Current wording
The decrease in yield on average interest-earning assets for the three months ended September 30, 2026 reflects decreases in the yield on both loan receivables and our liquidity portfolio. The loan receivables yield decreased 20 basis points to 21.69% for the three months ended September 30, 2026 primarily driven by lower assessed late fees. The decrease in the yield on our liquidity portfolio was primarily driven by lower benchmark rates.
Previous wording
The increase in yield on average interest-earning assets for the six months ended June 30, 2026 was primarily driven by an 18 basis point increase in loan receivables yield, as well as the mix of loan receivables as a percentage of interest-earning assets. The higher loan receivables yield was primarily driven by the impacts of our product, pricing and policy changes, partially offset by the impact of lower benchmark rates and lower assessed late fees.
Current wording
The increase in yield on average interest-earning assets for the nine months ended September 30, 2026 was primarily driven by a 6 basis point increase in loan receivables yield. The higher loan receivables yield was primarily driven by the impacts of our product, pricing and policy changes, partially offset by lower benchmark rates and lower assessed late fees.
Previous wording
Interest expense decreased by $90 million, or 8.5%, and $208 million, or 9.7%, for the three and six months ended June 30, 2026, respectively, primarily due to lower interest-bearing liabilities cost associated with lower benchmark rates. Our cost of funds decreased to 3.96% and 4.00% for the three and six months ended June 30, 2026, respectively, compared to 4.35% and 4.41% for the respective prior year periods.
Current wording
Interest expense decreased by $32 million, or 3.2%, and $240 million, or 7.6%, for the three and nine months ended September 30, 2026, respectively, primarily due to lower interest-bearing liabilities cost associated with lower benchmark rates. Our cost of funds decreased to 3.93% and 3.97% for the three and nine months ended September 30, 2026, respectively, compared to 4.20% and 4.34% for the respective prior year periods.
Previous wording
Net interest income increased by $87 million, or 1.9%, and $258 million, or 2.9%, for the three and six months ended June 30, 2026, respectively, resulting from the changes in interest income and interest expense discussed above.
Current wording
Net interest income increased by $89 million, or 1.9%, and $347 million, or 2.5%, for the three and nine months ended September 30, 2026, respectively, resulting from the changes in interest income and interest expense discussed above.
Previous wording
Retailer share arrangements increased by $35 million, or 3.5%, and $210 million, or 11.1%, for the three and six months ended June 30, 2026, respectively, reflecting program performance, which included lower net charge-offs, and the impact of our product, pricing and policy changes, as well as higher purchase volume.
Current wording
Retailer share arrangements increased by $72 million, or 7.0%, and $282 million, or 9.7%, for the three and nine months ended September 30, 2026, respectively, primarily reflecting program performance, which included lower net charge-offs. The increase for the nine months ended September 30, 2026 also reflected higher purchase volume.
Previous wording
Provision for credit losses increased by $55 million, or 4.8%, and decreased by $101 million, or 3.8%, for the three and six months ended June 30, 2026, respectively. The increase in the three months ended June 30, 2026 was primarily driven by a lower reserve release in the current year period, partially offset by lower net charge-offs. The decrease in the six months ended June 30, 2026 was primarily driven by lower net charge-offs, partially offset by a lower reserve release in the current year period.
Current wording
Provision for credit losses increased by $120 million, or 10.5%, and by $19 million, or 0.5%, for the three and nine months ended September 30, 2026, respectively. The increase for the three months ended September 30, 2026 was primarily driven by a reserve build in the current year period versus a reserve release in the prior year period, partially offset by a decrease in net charge-offs. The increase for the nine months ended September 30, 2026 was primarily driven by a lower reserve release in the current year period, partially offset by a decrease in net charge-offs.
Previous wording
The reserve releases for the three and six months ended June 30, 2026 were $163 million and $174 million, respectively, as compared to reserve releases of $265 million and $362 million in the respective prior year periods.
Current wording
The reserve build in the three months ended September 30, 2026 was $30 million and the reserve release for the nine months ended September 30, 2026 was $144 million, as compared to reserve releases of $152 million and $514 million in the respective prior year periods.
Previous wording
Net charge-offs for the three and six months ended June 30, 2026 decreased by $47 million and $289 million, respectively. The net charge-off rate decreased by 27 basis points and 61 basis points for the three and six months ended June 30, 2026, respectively, to 5.43% for both periods, and we expect our net charge-off rate for the year ended December 31, 2026 will be below our long-term target range of 5.5% to 6.0%.
Current wording
Net charge-offs for the three and nine months ended September 30, 2026 decreased by $62 million and $351 million, respectively. The net charge-off rate decreased by 37 basis points and 53 basis points for the three and nine months ended September 30, 2026, respectively, to 4.79% and 5.21%, and we expect our net charge-off rate for the year ended December 31, 2026 will be below our long-term target range of 5.5% to 6.0%.
Previous wording
The increases in the three and six months ended June 30, 2026 were primarily driven by increases in other income, interchange revenue, and protection product revenue. These increases were partially offset by higher loyalty costs. During the three months ended June 30, 2026, we participated in the Visa exchange offer, which included the exchange of Visa Class B-2 common stock for Visa Class C common stock, which was recorded at fair value. The increases in other income for the three and six months ended June 30, 2026 were driven primarily by a gain of $30 million related to the exchange of Visa Class B-2 common stock.
Current wording
The decrease for the nine months ended September 30, 2026 was also partially offset by a gain of $30 million related to the exchange of Visa Class B-2 common stock.
Previous wording
Other expense increased by $86 million, or 6.9%, and $159 million, or 6.4%, for the three and six months ended June 30, 2026, respectively.
Current wording
Other expense increased by $123 million, or 9.9%, and $282 million, or 7.5%, for the three and nine months ended September 30, 2026, respectively.
Previous wording
The increases for the three and six months ended June 30, 2026 were driven by higher other expense and information processing costs, reflecting increased operational losses and costs related to technology investments.
Current wording
The increases for the three and nine months ended September 30, 2026 were primarily driven by higher operational losses included in Other, higher information processing costs associated with technology investments and higher marketing and business development expense supporting business growth.
Previous wording
The effective tax rate for the three and six months ended June 30, 2026 increased compared to the same periods in the prior year primarily due to tax benefits recognized in the prior year related to the remeasurement of deferred tax assets for increases in state tax rates. The effective tax rate differs from the applicable U.S. federal statutory tax rate primarily due to state income taxes.
Current wording
The effective tax rate for the three months ended September 30, 2026 decreased compared to the same period in the prior year primarily due to favorable state tax apportionment changes. The effective tax rate for the nine months ended September 30, 2026 increased compared to the same period in the prior year primarily due to discrete tax benefits from revaluing our deferred tax assets to higher tax rates in the prior period. The effective tax rate differs from the applicable U.S. federal statutory tax rate primarily due to state income taxes.
Previous wording
As discussed above under “—Our Sales Platforms,” we offer our credit products primarily through five sales platforms (Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle). The following is a discussion of certain supplemental information for the three and six months ended June 30, 2026, for each of our five sales platforms and Corp, Other.
Current wording
As discussed above under “—Our Sales Platforms,” we offer our credit products primarily through five sales platforms (Home & Auto, Digital, Diversified & Value, Health & Wellness and Lifestyle). The following is a discussion of certain supplemental information for the three and nine months ended September 30, 2026, for each of our five sales platforms and Corp, Other.
Previous wording
Home & Auto interest and fees on loans remained flat for the three months ended June 30, 2026 and decreased by $24 million, or 0.9%, for the six months ended June 30, 2026, reflecting lower average loan receivables, offset by higher loan receivables yield. The decrease in average loan receivables was primarily driven by higher payment rates, partially offset by the impact of the acquisition of the Lowe's commercial co-branded credit card portfolio. The increase in loan receivables yield reflects the impact of product, pricing and policy changes, partially offset by lower late fee incidence.
Current wording
Home & Auto interest and fees on loans increased by $11 million, or 0.8%, for the three months ended September 30, 2026 primarily due to higher average loan receivables, reflecting the impact of the acquisition of the Lowe's commercial co-branded credit card portfolio in the current year period, partially offset by lower late fee incidence. Home & Auto interest and fees on loans remained flat for the nine months ended September 30, 2026 primarily due to a decline in average loan receivables as higher payment rates exceeded the impact of the portfolio acquisition.
Previous wording
Purchase volume increased by 5.8% and 3.1% for the three and six months ended June 30, 2026, respectively, primarily reflecting the performance of new programs. Average active accounts decreased by 2.5% and 4.0% for the three and six months ended June 30, 2026, respectively.
Current wording
Purchase volume increased by 9.1% and 5.2% for the three and nine months ended September 30, 2026, respectively, primarily reflecting the performance of new programs and select Furniture retailers, and the impact of higher gas prices. Average active accounts decreased by 2.3% and 3.5% for the three and nine months ended September 30, 2026, respectively.
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Current report — wording carried from elsewhere
•In our Health & Wellness sales platform:
Current report — wording carried from elsewhere
(a)Floating rate applicable at interest rate reset date through maturity, based on compounded Secured Overnight Financing Rate plus floating rate spread noted above.
Current report — wording carried from elsewhere
The following table summarizes the Company's preferred stock issued and outstanding at September 30, 2026 and December 31, 2025: