BFH · Bread Financial Holdings, Inc.

Bread Financial delivered a strong first quarter in 2026, with net income of $181 million, up 32% year-over-year, driven by a 5% increase in total revenue to $1.018 billion. The revenue growth was primarily attributable to the implementation of pricing changes and lower interest expense, partially offset by lower billed late fees and higher retailer share arrangements. Net interest margin improved to 19.25% from 18.06% a year ago, benefiting from pricing changes and lower funding costs. Credit sales grew 7% to $6.5 billion, marking six consecutive quarters of year-over-year growth, driven by new partner growth and increased general-purpose spending. Average loans increased 1% to $18.3 billion, and end-of-period loans rose 2% to $18.1 billion, reflecting a return to loan growth. Credit metrics continued to improve, with the delinquency rate down 34 basis points to 5.59% and the net loss rate down 83 basis points to 7.33%. The company maintained strong capital levels, with a CET1 ratio of 13.3%, up from 12.0% a year ago. Management highlighted the launch of new credit card relationships with Ford and Ethan Allen, and the expansion of Bread Pay installment loans with partners including AAA, Dell, and Ford. The company repurchased 2.0 million shares for $150 million and increased its common stock repurchase authorization by $600 million, bringing total availability to $690 million. Additionally, the Board declared a quarterly common dividend of $0.23 per share and a preferred dividend of $21.56 per share, both payable on June 15, 2026. For the full year 2026, management expects average loan growth and total revenue growth to be up low single digits, a net loss rate in the range of 7.2% to 7.4%, and an effective tax rate of 25% to 27%. The company also repurchased $50 million of subordinated debt during the quarter. Overall, the results demonstrate improved credit performance, disciplined expense management, and strategic capital allocation, positioning the company for continued growth.