Bread Financial (BFH) Bank of America Financial Services Conference 2026 summary

Financial performance and outlook

• January saw stable loan growth and lower losses and delinquencies, with expectations for a seasonal uptick in February before normalizing.

• First quarter non-interest expenses are projected to be slightly down from the previous quarter, excluding one-time charges.

• Guidance for 2024 anticipates low single-digit loan growth, supported by new partners and improved credit quality.

• Net interest margin (NIM) is expected to be flat to slightly up, aided by ongoing pricing changes and portfolio mix.

• Reserve rates are expected to gradually trend down, targeting around 10% long-term as loss rates improve.

Business transformation and strategy

• Significant transformation since COVID, including strengthening the balance sheet, paying down debt, and achieving a 57% tangible value at year-end.

• Ability to simultaneously invest in the business, strengthen the balance sheet, and return value to shareholders.

• Product offerings have expanded from private label cards to include co-brand, direct-to-consumer, buy now/pay later, and installment loans.

• Vertical diversification includes beauty, jewelry, technology, home improvement, electronics, and sports.

• Partners are receptive to expanded product sets, which increase customer penetration and engagement.

Customer and credit trends

• Core customer base is middle-income, reflecting the broader economy and demonstrating resilience amid inflation and macro challenges.

• Customers are adjusting spending habits but remain resilient, supporting ongoing credit improvement and sales growth.

• Credit loss rates are targeted to glide down to around 6%, with current levels above 7% but improving.

• Credit actions are balanced to avoid harming partner relationships or investor returns.

• Partners collaborate closely on credit guidelines, prioritizing responsible growth and profitability.