Bread Financial Holdings, Inc. Q1 FY2026 earnings call

Celebrate 30 years in business and 25 years as public company in 2026. Credit sales grew 7% y-o-y driven by new partner launches and increased shopping activity. Launched new credit card relationships with Ford and Ethan Allen, and payment options with Academy Sports. Strong first quarter financial results with net income $181 million, revenue growth 5%, tangible book value per common share up 26%. Invest in digital and technology including AI. Credit metrics improved with delinquency and net loss rates down

Credit sales grew 7% year over year in Q1 to $6.5 billion. Average loans increased 1% to $18.3 billion, end-of-period loans rose 2% to $18.1 billion. Direct-to-consumer deposits grew 10% y-o-y to $8.7 billion, accounting for 48% of total funding. Revenue increased $48 million or 5%. Total net interest income grew 6% y-o-y. Non-interest income was $13 million. Non-interest expenses decreased $5 million. Net interest margin was 19.3%. Liquidity position strong with $6.4 billion in liquid assets and undrawn credit facilities. CET1 ratio was 13.3%. Delinquency rate was 5.59%, net loss rate 7.33%, reserve rate 11.46%

2026 outlook unchanged. Expected low single-digit average credit card and other loan growth, total revenue growth low single digits. Net interest margin higher than 2025. Non-interest income to increase due to higher retail share arrangements. Second quarter expenses expected to increase. Net loss rate targeted at low end of 7.2%-7.4%. Full-year normalized effective tax rate 25%-27%

Uncertainty in macro environment. Elevated oil prices impacting consumers. Low consumer sentiment and confidence. Uncertainty regarding trade policy and global conflicts affecting inflation and unemployment. Weightings in credit reserve modeling based on wide macroeconomic dynamics

Q: Broad question on guidance and loan growth guidance being low single digits.

A: Pleased with Q1 results, reaffirm guidance, loan growth to be low single digits on average.

Q: Share repurchases cadence and long-term CET1 framework.

A: Cadence informed by growth and capital ratios, share repurchases dependent on preferred share issuance and market conditions.

Q: How pricing changes flow through and levers for NIM.

A: Pricing changes tailwind slowing, NIM affected by product mix, cash mix, credit quality, funding.

Q: Durability of travel and entertainment strength.

A: Consumers thoughtful, T&E strong but gas prices may impact.

Q: Impact of loan growth and NFL portfolio changes.

A: Loan growth no effect on total loans, excited about NFL and American Express partnership.

Q: Competitive dynamic and macro impact.

A: Strong in home, beauty, automotive verticals, monitoring elevated oil prices and consumer sentiment.

Q: Late fee mitigation and charge off rate.

A: Pricing change benefit muted, loss rate target around 6% or below, tax refunds impact monitored but not overwhelming