Core Insights - Bread Financial Holdings, Inc. (BFH) reported a fourth-quarter operating income of $2.07 per share, significantly exceeding the Zacks Consensus Estimate by 417.5% and showing a year-over-year increase of 406% [1] - Revenues rose 5.3% year over year to $975 million, surpassing the consensus estimate by 3.62% [1] - The strong performance was attributed to pricing changes, although it was partially offset by lower billed late fees and higher retailer share arrangements [1] Financial Performance - Credit sales reached $8.1 billion, marking a 2% year-over-year increase, driven by new partner growth and increased general-purpose spending [2] - Average loans decreased by 1% to $18 billion, while end-of-period loans declined by 0.5% to $18.8 billion due to higher payment rates and elevated gross losses [2] - Total interest income increased by 2% to $1.2 billion, beating the Zacks Consensus Estimate by 1.9% but missing the internal model estimate by 0.4% [3] - Net interest margin improved by 110 basis points to 18.9%, compared to the Zacks Consensus Estimate of 18% [3] - Total non-interest expenses decreased by 5% to $500 million, influenced by the impact of repurchased debt [3] - The delinquency rate improved to 5.8%, down from 5.9% year over year [3] Loss and Earnings Metrics - The net loss rate improved by 60 basis points year over year to 7.4% [4] - Pre-tax pre-provision earnings increased by 7% year over year to $420 million [4] - Adjusted PPNR, a non-GAAP financial measure, rose by 19% year over year to $475 million [4] Capital and Shareholder Returns - Cash and cash equivalents at the end of the fourth quarter were $3.6 billion, a decrease of 2% from the previous year-end [5] - Tangible book value increased by 23% year over year to $57.57 per share [5] - Return on average equity rose by 530 basis points year over year to 6.2% [5] - The board of directors raised the dividend by 10% to 23 cents per share, payable on March 16, 2026 [6] - BFH repurchased $120 million, or 1.9 million shares, during the fourth quarter, with $240 million remaining under share repurchase authorization at the end of 2026 [6] Full-Year Performance - For the full year 2025, BFH reported an operating income of $12.09 per share, exceeding the Zacks Consensus Estimate by 87.1% and increasing by 57% year over year [9] - Total operating revenues for the year were $3.8 billion, in line with the Zacks Consensus Estimate, with a year-over-year increase of 0.2% [9] - Credit sales for the full year reached $27.8 billion, up 3% year over year [9] 2026 Outlook - BFH anticipates that interest rate cuts by the Federal Reserve may modestly pressure total net interest income [10] - The company expects total revenue growth in the low single digits compared to full-year 2025, aligning with average loan growth [10] - The net loss rate is projected to be between 7.2% and 7.4%, with improvements expected due to consumer resilience and effective credit management [10] - The normalized effective tax rate for the full year is expected to be in the range of 25% to 27% [11]

Core Viewpoint - RBC Capital analyst Jon Arfstrom has lowered the price target for Synchrony (SYF) to $85 from $91 while maintaining a Sector Perform rating after reviewing the company's Q4 results [1] Group 1: Q4 Results - The Q4 results were encouraging, showing improvement in year-over-year spending volumes and credit metrics [1] - The outlook for 2026 is seen as mostly consistent with recent commentary and expectations [1]

Core Insights - Synchrony Financial reported a strong finish to 2025, highlighting record fourth-quarter purchase volume and improving credit trends while returning significant capital to shareholders [5][7]. Financial Performance - Fourth-quarter purchase volume reached a record $49 billion, up 3% year over year, reflecting strengthening spend per account and improving trends across most platforms [2][5]. - For the full year, Synchrony delivered $3.6 billion in net earnings, or $9.28 per diluted share, with a return on average assets of 3.0% and return on tangible common equity of 25.8% [3]. - Fourth-quarter net earnings were $751 million, or $2.04 per diluted share, which included a $0.14 restructuring charge [4][7]. - The company returned $1.1 billion to shareholders in Q4 and $3.3 billion for the year, including share repurchases and dividends [6][16]. Credit Metrics - Credit metrics improved, with the net charge-off rate decreasing to 5.37% and 30+ day delinquency at 4.49% [20][14]. - The allowance for credit losses was 10.06% of loan receivables at quarter-end, down from 10.35% in the previous quarter [14]. Revenue and Expenses - Net revenue was $3.8 billion, flat year over year, as higher net interest income was offset by increased retailer share arrangements [11]. - Net interest income rose 4% to $4.8 billion, with the net interest margin expanding 82 basis points to 15.83% [6][11]. - Other expenses increased 10% to $1.4 billion, reflecting higher employee costs and technology investments [13]. Strategic Initiatives - Synchrony added or renewed more than 25 partners in the quarter and over 75 for the year, including a new agreement with Bob's Discount Furniture [17]. - The Pay Later offering is now available to over 6,200 merchants, driving at least a 10% average increase in sales [18]. 2026 Outlook - For 2026, Synchrony provided an EPS outlook of $9.10 to $9.50, expecting mid-single-digit ending receivables growth [21]. - The company anticipates the net charge-off rate to align with its long-term target of 5.5% to 6% [22].

Core Insights - Synchrony Financial reported a record fourth-quarter purchase volume of $49 billion, marking a 3% year-over-year increase, driven by strengthened spending patterns and growth in co-branded cards [2] - The company's CEO noted steady consumer behavior, with increased transaction frequency and average ticket sizes, indicating resilience in consumer spending [4] - The Pay Later product has become integral to Synchrony's strategy, available at over 6,200 merchants, and is associated with at least a 10% increase in sales when combined with revolving credit [5][6] Financial Performance - Overall card activity showed broad improvement, with co-brand and dual cards accounting for about half of the fourth-quarter purchase volume and growing 16% year-over-year [7] - Digital platform purchase volume rose by 6%, while health and wellness spending increased by 4%, reflecting trends in consumer preferences [8] - Revenues for the quarter were approximately $3.8 billion, slightly below consensus expectations, leading to a 6% drop in shares during early trading [9] Strategic Developments - Synchrony is focusing on digital enhancements, reporting an 18% increase in total digital visits and a 17% rise in sales, attributed to improvements in its marketplace, website, and mobile app [9] - Investments in AI search, mobile wallet integration, and platform connectivity are seen as key drivers for increasing consumer engagement [10] - The partnership with Walmart is highlighted as a significant growth contributor, with the retailer being described as Synchrony's fastest-growing program [10][11] Regulatory Concerns - Management expressed strong opposition to proposed 10% APR caps, arguing that such measures would reduce credit availability, particularly impacting lower-income consumers [12] - The company supports around 400,000 small and mid-sized businesses, warning that credit caps could disrupt merchant economics and consumer access to credit [12][13] - Synchrony anticipates mid-single-digit receivables growth in 2026, supported by the maturation of new programs and improved core volumes [13]

Core Insights - An 18-month CD is highlighted as a competitive option for earning returns on savings without long-term commitment, offering higher interest rates than typical savings accounts while providing more flexibility than longer-term CDs [1] Best 18-Month CDs - Ally Bank offers the top-rated 18-month CD with a 3.6% APY and no minimum opening deposit requirement, with daily compounding interest [3] - Synchrony Bank provides a competitive 3.8% APY with no minimum opening deposit, but has a penalty of 180 days' simple interest for early withdrawals [4] - Marcus by Goldman Sachs features a 4% APY with a minimum deposit of $500, and early withdrawal incurs a penalty of 180 days' interest [5] - Limelight Bank's CD offers a 3.85% APY with a minimum deposit of $1,000, with daily compounding and quarterly credited interest [10] - Live Oak Bank has a 3.7% APY but requires the highest minimum deposit of $2,500, with a 90-day simple interest penalty for early withdrawals [11] - America First Credit Union provides a 3.95% APY with a $500 minimum deposit, and dividends are compounded and credited monthly [12] - Bank5Connect offers a 3.5% APY with a $500 minimum deposit, with a six-month interest penalty for early withdrawals [13] - Bask Bank features a 3.75% APY with a $1,000 minimum deposit, and early withdrawal incurs a penalty of 180 days' interest [15] - TAB Bank has a 3.87% APY with a $1,000 minimum deposit and daily compounding interest [20] - Bread Savings offers a 3.75% APY with a higher minimum deposit of $1,500, with daily compounding and monthly credited interest [22] Methodology for Best 18-Month CDs - The evaluation of the best 18-month CDs was based on over 300 data points, focusing on metrics such as annual percentage yield (APY), minimum opening deposit, and compounding frequency [24][25] - Accounts with higher APYs received more points, while those with lower or no minimum deposit requirements ranked more favorably [26]

Core Insights - The article emphasizes the benefits of 1-year certificates of deposit (CDs) as a low-risk investment option for savers seeking better yields than traditional savings accounts while avoiding long-term commitments [1] Group 1: Best 1-Year CDs - Ally Bank offers a competitive 3.75% APY with a $0 minimum deposit, making it accessible for new savers [3] - Synchrony Bank provides a 3.8% APY with no minimum deposit, but has a 90-day interest penalty for early withdrawals [4] - Marcus by Goldman Sachs features a 4% APY, requiring a minimum deposit of $500, with a 90-day interest penalty for early withdrawals [5] - America First Credit Union has a 3.95% APY with a $500 minimum deposit and a 60-day interest penalty for early withdrawals [11] - Capital One offers a 3.9% APY with no minimum deposit, but imposes a penalty of three to six months' interest for early withdrawals [12] - American Express National Bank provides a 3.25% APY with no minimum deposit and a 270-day interest penalty for early withdrawals [13] - Bask Bank has a 3.75% APY with a $1,000 minimum deposit and a 90-day interest penalty for early withdrawals [14] - TAB Bank offers a 3.9% APY with a $1,000 minimum deposit and a 90-day interest penalty for early withdrawals [15] - Live Oak Bank features a 4% APY with a $2,500 minimum deposit and a 90-day interest penalty for early withdrawals [21] - Quontic Bank rounds out the list with a 3% APY and a $500 minimum deposit, with a penalty equal to the interest for the full term for early withdrawals [22] Group 2: FAQs and Methodology - The highest 1-year CD rate currently available is 4% APY, offered by both Marcus by Goldman Sachs and Live Oak Bank, with minimum deposits of $500 and $2,500 respectively [23] - A $10,000 CD at a 4% APY would yield approximately $408 in interest over one year, while at the national average rate of 1.61%, it would yield about $162 [24] - The evaluation methodology for the best 1-year CDs involved over 300 data points, focusing on metrics such as APY, minimum opening deposit, and compounding frequency [29][30]

Group 1 - EU retaliation tariffs are back in focus, reviving trade risk and raising concerns about second-order effects on supply chains and margins, particularly for globally exposed companies [1][3] - Industrials and multinationals with European exposure are likely to feel the pressure first when tariff narratives resurface [3] Group 2 - The introduction of credit card APR caps starting January 20 poses a risk for financials, raising questions about margin compression and reduced credit availability [4] - Stocks related to consumer lending and payments, such as SOFI, AXP, COF, SYF, and NU, are reacting to headline risks ahead of any finalized policy [4] Group 3 - The software sector is experiencing a risk-off rotation, with investors selling high-multiple growth names to de-risk portfolios amid policy uncertainty [5] - High-multiple software and data platforms like Snowflake, MongoDB, Salesforce, Adobe, and Datadog are under pressure as investors seek perceived safety and liquidity [5]

Core Viewpoint - Deutsche Bank has released a report on the outlook for the U.S. consumer finance sector in 2026, focusing on the earnings guidance of seven companies, which is expected to have a greater impact on stock prices than the actual Q4 performance [1] Group 1: Company-Specific Guidance - American Express (AXP): Deutsche Bank expects a short-term revenue growth slowdown to 8.5% for FY2026, below the market expectation of 9.0%, with diluted EPS projected at $17.75, slightly above the consensus of $17.56 [2] - Synchrony Financial (SYF): Projected loan receivables growth of 4.75% for 2026, exceeding the market expectation of 3.14%, but net revenue forecasted at $15.7 billion, below the market's $16.5 billion [2] - Ally Financial (ALLY): Expected average earning assets growth of 1.7% in 2026, with net interest margin rising to 3.72%, slightly above the market expectation of 3.70% [3] - OneMain Holdings (OMF): Projected management receivables growth of 6.55% for 2026, below the market expectation of 8.00%, with revenue growth of 6.15%, also slightly below the consensus [3] - SoFi Technologies (SOFI): Management reiterated EPS guidance of $0.55-$0.80 for 2026, with a midpoint forecast of $0.67, significantly above the market consensus of $0.58 [4] - Navient Corp (NAVI): Expected NIM for private education loans to rise to 2.81% in 2026, with core EPS projected at $1.15, benefiting from market opportunities due to the cancellation of the GRAD PLUS program [5] Group 2: Market Trends and Influences - The guidance from these companies is expected to influence stock prices more than their Q4 actual performance, highlighting the importance of forward-looking statements in the consumer finance sector [1] - The report indicates that the consumer finance sector is experiencing varying growth rates, with some companies facing challenges due to market saturation and regulatory changes [2][3][4]

Group 1 - The White House's chief economic advisor, Kevin Hassett, suggested that large banks could voluntarily offer credit cards to Americans with stable incomes but lacking credit access, in response to President Trump's push to lower living costs [1][2] - President Trump previously called for a cap on credit card interest rates at 10%, a proposal that faced widespread opposition from bank executives and industry lobbyists, who argued it could disrupt consumer behavior and the financial system [1][2] - Hassett's alternative proposal targets individuals who are under-leveraged financially due to a lack of credit access, emphasizing that these individuals have sufficient income and stability to support credit limits [1][2] Group 2 - Banks indicated that if required to issue credit cards at a 10% interest rate, the most realistic response would be to scale back their credit card operations rather than lowering rates across the board [2] - Hassett noted that the government has communicated with several large bank CEOs, some of whom believe that the President's views on affordability have a basis in reality [2] - The concept of the "Trump credit card" remains in the conceptual stage, with no substantial discussions between a major credit card issuer and the government reported yet [2]

Group 1 - The White House's chief economic advisor, Kevin Hassett, suggested that large banks could voluntarily offer credit cards to individuals with stable incomes who lack access to credit channels, in response to President Trump's push to lower living costs [1] - President Trump previously called for a cap on credit card interest rates at 10%, a proposal that faced widespread opposition from bank executives and industry lobbyists, who argued it would be difficult to implement and could disrupt consumption and the financial system [1] - Hassett's alternative proposal targets individuals who have not fully utilized financial leverage due to a lack of credit access but possess sufficient income and stability to support credit limits [1] Group 2 - Banks indicated that if required to issue credit cards at a 10% interest rate, the most realistic response would be to scale back credit card operations rather than lowering rates across the board [2] - Hassett noted that implementing a mandatory interest rate cap would likely require new congressional legislation [2] - The concept of the "Trump credit card" remains in the conceptual stage, with no substantial discussions between major credit card issuers and the government reported yet [2]