Synchrony Financial ( SYF ) shares are trading lower premarket on Tuesday. The company reported fourth-quarter net interest income that rose 2.8% year-over-year to $4.59 billion, beating the consensus of $4.46 billion.

Higher interest and fees on loans drove net interest income growth. Net revenue rose 3.9% Y/Y to $3.801 billion, while net interest margin declined 9 basis points to 15.01% in the quarter.

Period-end loan receivables rose 1.7% Y/Y to $104.7 billion, and purchase volume declined 2.8% Y/Y to $48 billion in the quarter.

Interest and fees on loans increased 3% Y/Y to $5.5 billion, driven by average loan receivables growth, impact of product and pricing and policy changes.

Synchrony's average active accounts declined 2% Y/Y to 70.3 million, but deposits grew 1% Y/Y to $82.1 billion in the quarter.

SYF returned $197 million in capital to shareholders, including $100 million in share repurchases and $97 million in common stock dividends.

Provision for credit losses was $1.6 billion, a decrease of $243 million led by a reserve release of $100 million.

Net earnings increased 76% Y/Y to $774 million. The company reported EPS of $1.91, missing the consensus of $1.93.

Synchrony's return on assets increased 110 bps to 2.6%, while the efficiency ratio declined 270 basis points to 33.3%.

The estimated Common Equity Tier 1 ratio was 13.3%, compared to 12.2% in the prior year, and the estimated Tier 1 Capital ratio was 14.5%, compared to 12.9% in the prior year.

During the quarter, Synchrony added or renewed around 30 programs, including Generac and P.C. Richard & Son.

In January, the company expanded its collaboration with Sam's Club and extended its nearly 25-year partnership with JCPenney, which now includes Synchrony Pay Later.

Brian Wenzel, Synchrony's Executive Vice President and Chief Financial Officer, stated, "While Synchrony's credit actions between mid-2023 through early 2024 continued to impact our new account and purchase volume growth during the fourth quarter, our customers continued to seek access to our flexible financing solutions — reflecting the strong appeal of our value propositions and utility of our offerings in a persistently inflationary environment.”

”Importantly, Synchrony's credit actions also enabled further improvement in the trajectory of our delinquency performance and, as a result, we remain confident in our ability to return to our long-term net charge-off target.”

”In addition, our RSA maintained the alignment of the interests between Synchrony and our partners, and Synchrony drove operating efficiency even as we continued to invest in our business.”

FY25 Outlook: Synchrony expects net revenue of $15.2 billion – $15.7 billion, period-end loan receivables growth in low single-digits and efficiency ratio of 31.5% – 32.5%.

Investors can gain exposure to the stock via iShares FinTech Active ETF ( BPAY ) and First Trust Dorsey Wright Momentum & Value ETF ( DVLU ) .

Price Action: SYF shares are down 3.92% at $67.12 premarket at the last check Tuesday.

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