Bread Financial (BFH) investor relations material

Financial performance and credit trends

• End-of-period loan growth reached 3.7%, driven by new partner launches and declining loss rates.

• Loss rate improved to 6.98%, about 99 basis points better than last year, with delinquencies also improving.

• Net interest margin (NIM) is expected to be seasonally down in Q2, with expenses guided just under $500 million.

• Non-interest expense pressure from RSA payments is now expected to be closer to $30 million, better than previous guidance.

• Credit sales growth is accelerating, outpacing average loan growth, and installment lending is picking up.

Strategic transformation and business model evolution

• Significant transformation over the past five years, including paying down over 70% of debt and building excess capital.

• Enhanced enterprise risk management and technology investments have improved operational discipline and partner wins.

• Shifted target customer to middle-income households, distancing from subprime comparisons.

• Focused on responsible growth, maintaining strong capital ratios, and optimizing the balance sheet.

Competitive landscape and partner strategy

• Success in co-brand business attributed to experienced teams and flexible technology, winning deals with major brands.

• Pipeline remains strong, with selective pursuit of deals that fit return profiles and risk appetite.

• Competitive environment remains rational, with relationship and tech delivery as key differentiators.

• Installment loan products are prioritized for larger purchases, keeping customers within partner ecosystems.