Bread Financial (BFH) investor relations material

Strategic transformation and business focus

• Multi-year transformation to a pure-play financial services company, emphasizing credit cards, installment loans, and direct-to-consumer deposits, now nearly 50% of funding.

• Significant tech modernization and talent investment, with a completed capital stack transformation and disciplined financial management.

• Focus on middle-income consumers, avoiding both super prime and subprime segments, targeting the resilient middle of the market.

Consumer and economic outlook

• Consumers have shown resilience despite inflation and higher unemployment, with stable to slightly improving credit and spending trends.

• Inflationary pressures from oil and tariffs are being monitored, but recent CPI data is solid and job markets remain stable.

• Gas prices are manageable for now, but sustained increases could pressure middle-income families and overall inflation.

Credit performance and guidance

• Credit metrics are improving, with a 90 basis point loss rate improvement year-over-year, now at 7.7% and expected to reach the lower end of the 7.2%-7.4% guidance.

• New vintages show higher credit quality and income, supporting a path toward a 6% target loss rate over time.

• Early-stage delinquency is better than pre-pandemic, but further improvement is needed for consumers to recover from delinquency.