Bread Financial (BFH) investor relations material

Executive summary

• Net income rose to $181 million in Q1 2026, up 30% year-over-year, with diluted EPS of $4.15 and tangible book value per share up 26%.

• Credit sales increased 7% year-over-year to $6.5 billion, supported by new partnerships and improved general-purpose spending.

• End-of-period loans grew 2% year-over-year to $18.1 billion; average loans increased 1% to $18.3 billion.

• New partnerships launched with Ford and Ethan Allen; Bread Pay installment loans expanded to partners like AAA, Dell, and Academy Sports.

• Continued investment in technology, AI, and operational excellence to drive growth and efficiency.

Financial highlights

• Revenue reached $1.018 billion, up 5% year-over-year, driven by pricing changes and lower interest expense.

• Net interest margin improved to 19.25% from 18.06% year-over-year.

• Total non-interest expenses decreased 1% year-over-year, aided by a data processing credit and expense discipline.

• Tangible book value per share rose 26% year-over-year to $61.57.

• Direct-to-consumer deposits increased 10% to $8.7 billion, now 48% of total funding.

Outlook and guidance

• 2026 outlook reaffirmed: expects low single-digit growth in average loans and total revenue versus 2025.

• Net interest margin projected to be higher than 2025, with incremental benefits from pricing changes slowing.

• Net loss rate for 2026 anticipated in the range of 7.2% to 7.4%, down from 7.7% in 2025.

• Full-year normalized effective tax rate expected between 25% and 27%.

• Positive operating leverage targeted for 2026, excluding pre-tax impacts from debt repurchases.