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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):
April 28, 2022

graphic


BREAD FINANCIAL HOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter)


Delaware
 
001-15749
 
31-1429215
(State or Other Jurisdiction
 
(Commission
 
(IRS Employer
of Incorporation)
 
File Number)
 
Identification No.)


3095 LOYALTY CIRCLE
COLUMBUS, Ohio 43219
(Address and Zip Code of Principal Executive Offices)

(614) 729-4000
(Registrant’s Telephone Number, including Area Code)

NOT APPLICABLE
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

☐
  
Written communications pursuant to Rule 425 under the Securities Act
     
☐
  
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     
☐
  
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
     
☐
  
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
  
Trading symbol
  
Name of each exchange on which registered
Common Stock, par value $0.01 per share
  
BFH
  
NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    [  ]



Item 2.02 Results of Operations and Financial Condition.

On April 28, 2022, Bread Financial Holdings, Inc. (the "Company") issued a press release regarding its results of operations for the first quarter ended March 31, 2022.  A copy of this press release is furnished as Exhibit 99.1.


Item 7.01 Regulation FD Disclosure.

On April 28, 2022, the Company issued a press release regarding its results of operations for the first quarter ended March 31, 2022.  A copy of this press release is furnished as Exhibit 99.1.

Attached as Exhibit 99.2 is a presentation to be given to investors and others by senior officers of the Company.


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.
  
Document Description
     
 
Press Release dated April 28, 2022 announcing the results of operations for the first quarter ended March 31, 2022.
     
 
Investor Presentation Materials.
     
104
  
Cover Page Interactive Data File (embedded within the Inline XBRL document).

Note: The information contained in this report (including Exhibits 99.1 and 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
Bread Financial Holdings, Inc.
       
Date: April 28, 2022
By:
  
/s/ Joseph L. Motes III
     
Joseph L. Motes III
     
Executive Vice President, Chief
Administrative Officer, General
Counsel and Secretary




 Financial  First Quarter 2022    Full Year 2021    Summary   Total Company  Continuing Operations(a)   Total Company  Continuing Operations(a)  Net Income ($ millions)  $210  $211  $801  $797  Earnings per Diluted Share  $4.20  $4.21  $16.02  $15.95  Business Highlights “On the heels of announcing our Company rebrand in March, we successfully launched the Bread Cashback™ American Express® Card. Bread Cashback offers industry-leading benefits and complements our existing suite of financial products, as we continue to ensure our customers have access to robust solutions to serve their payment, lending, and saving needs at all stages of their financial lives. In particular, this proprietary card provides an additional opportunity to drive acquisition and growth, with a strong value proposition appealing especially within the Millennial and Gen Z consumer base,” said Ralph Andretta, president and chief executive officer of Bread Financial.“During the quarter we announced the launch of a new co-brand credit card with Victoria’s Secret, as well as the long-term renewal of our relationship. As our largest and longest-tenured brand partner, we are thrilled to expand our relationship and offer our credit and loyalty products to Victoria’s Secret customers for years to come. “Building on our recent new business development success, we launched a pilot for a new Harley-Davidson private label credit card to provide promotional finance plans for general merchandise, parts and accessories, service and more through participating Harley-Davidson dealers. Additionally, we continue to add new online brand partners on our Bread Pay™ platform, including our recent launch with Wayfair,” Andretta noted.  1  Bread Financial | April 28, 2022  Bread Financial Reports First Quarter 2022 Results     CEO Commentary  “First quarter results demonstrated the significant progress of our strategic transformation and highlighted our focus on profitable growth. We continued to produce double-digit sales growth and accelerated year-over-year loan growth. Pre-tax pre-provision earnings increased 24% and 16% from first quarter 2021 and fourth quarter 2021 levels, respectively. We are delivering on our business transformation objectives and are focused on building long-term value for our stockholders.“We have positioned Bread Financial to experience lower than historical average loss levels as a result of our proactive risk management, including a more balanced product portfolio with higher co-brand and proprietary card balances. This resulted in an improved credit profile from pre-pandemic levels, providing confidence in sustained performance as questions around credit normalization increase. We planned for the normalization of consumer payment behavior, which is reflected in our guidance; to-date, results are within our range of expectations, although the pace of payment normalization is slower than originally forecasted. “We are closely monitoring geopolitical and macroeconomic conditions and the long term effects of persistent inflation on the economy and consumers. Additionally, we will continue to manage our risk strategies with real-time analytics, making adjustments as necessary in this dynamic environment.“Despite the macroeconomic headwinds, we are optimistic on our overall outlook for 2022 as consumer health remains stronger than pre-pandemic levels, and the diversification of our full product suite and brand partner verticals positions us to drive responsible, profitable growth, as well as an improving underlying risk profile.”  - Ralph Andretta, president and chief executive officer  COLUMBUS, Ohio, April 28, 2022 – Bread Financial Holdings, Inc. (NYSE: BFH), a tech-forward financial services company that provides simple, personalized payment, lending, and saving solutions, today announced results for the first quarter ended March 31, 2022.First quarter net income was $210 million, or $4.20 per diluted share  Reflective of the spinoff of Loyalty Ventures Inc.Rebranded to Bread Financial to reflect streamlined, tech-forward financial services business; expanded products and direct-to-consumer offeringsTotal revenue of $921 million, up $119 million, or 15%, versus 1Q21Credit metrics remained strong with a delinquency rate of 4.1% and a net loss rate of 4.8%      Exhibit 99.1 
 
 “Bread Financial had a very positive start to the year with sales growth ahead of our expectations. Revenue increased 15% compared to the first quarter of 2021, driven primarily from balance sheet growth and improved net interest margin. We remain focused on increasing our investments, especially around digital talent and product innovation, which we expect would result in increased expenses each quarter throughout 2022. Net losses were slightly better than our outlook for the quarter as a result of slower than expected payment normalization and resilient consumer health. However, we maintained conservative economic scenario weightings in our credit reserve modeling given the increasing interest rate environment, inflation, and the war in Ukraine.“We remain focused on risk-reward tradeoff that positions us to maintain profitable growth in the periods ahead; we are committed to ensuring our investments deliver long-term stockholder value and we remain confident in our ability to responsibly execute on our growth strategy and achieve our financial targets.”  CFO Commentary  - Perry Beberman, executive vice president and chief financial officer    2022 Full Year CFO OutlookMacroeconomic Assumptions: “We remain vigilant in monitoring macroeconomic conditions and the impact on consumers and our brand partners. Our outlook assumes a moderation in the consumer payment rate throughout 2022. Payment rate variability is a key determinant for the high- and low-ends of our forecasted ranges. We expect rate increases by the Federal Reserve during the year to result in a nominal benefit to total net interest income, which is included in our outlook.Average Loan Growth: “Based on our new business expectations, visibility into our pipeline, and the current economic outlook, we now anticipate full year 2022 average credit card and other loan growth in the low-double-digit range relative to 2021, up from a high-single to low-double-digit range. Total Revenue Growth: “Total revenue growth for 2022 is anticipated to be aligned with average loan growth, with potential upside from improved net interest margin.Total Expense Growth: “As a result of ongoing investment in technology modernization, digital advancement, marketing, and product innovation, along with strong portfolio growth, we continue to anticipate total expenses will increase in 2022, while ensuring we deliver modest positive operating leverage for the full year. The pace and timing of our investments will be calibrated to align with our revenue growth outlook, including our planned incremental investment of more than $125 million in digital and product innovation, marketing, and technology enhancements during the year. Net Loss Rate: “We continue to expect a net loss rate in the low-to-mid 5% range for 2022 as credit metrics begin to normalize from historically low rates due to the expiration of federal stimulus and assistance programs. We remain confident in our long-term guidance of a through-the-cycle average net loss rate below our historical average of 6%.Effective Tax Rate: “We expect our full year effective tax rate to be in the range of 25% to 26% with quarter-over-quarter volatility due to the timing of various discrete items.”    2  Bread Financial | April 28, 2022 
 
     +14%  +15%  +24%  -27%  -22%  +0.3%  -0.2%    Key Operating and Financial Metrics(a)      Credit Metrics  Continuing Operations(a)  Quarter Ended        Year Ended        March 31,        December 31,      ($ in millions, except per share amounts)  2022  2021  Change    2021  2020  Change  Total net interest and non-interest income (“Revenue”)  $921   $802   15%    $3,272   $3,298   (1)%   Net principal losses  $199   $198   1%    $720   $1,083   (34)%   Reserve build (release)  $(6)   $(165)  nm    ($176)  $183   nm  Provision for credit losses  $193   $33   nm    $544   $1,266   (57)%  Total non-interest expenses  $426   $402   6%    $1,684   $1,731   (3)%  Income from continuing operations before income taxes  $302   $367   (18)%    $1,044   $301   247%  Income from continuing operations  $211   $268   (21)%    $797   $208   283%  Income from continuing operations per diluted share  $4.21   $5.38   (22)%    $15.95   $4.35   267%  Weighted average shares outstanding – diluted  50.0  49.8      50.0  47.9    **********************************                Pre-tax pre-provision earnings (“PPNR”)*  $495   $400   24%    $1,588   $1,567   1%  (a) Reflective of the spinoff of Loyalty Ventures Inc. for all periods presented.nm – not meaningful* Pre-tax pre-provision earnings is a non-GAAP financial measure.  3  Bread Financial | April 28, 2022  Diluted EPS 
 
 First Quarter 2022 Compared to First Quarter 2021 – Continuing OperationsCredit sales increased 14% to $6.9 billion as consumer spending continued to remain strong. Average and end-of-period credit card and other loans increased 5% and 8% to $16.7 and $16.8 billion, respectively, driven by strong credit sales and the recovering economy. Revenue increased 15%, or $119 million, resulting from higher average loan balances, improved loan yields, and improvement in our cost of funds.Total non-interest expenses increased 6%, or $24 million, as employee compensation and benefit costs increased 13%, or $20 million, primarily driven by increased salaries, continued digital and technology modernization-related hiring, and higher volume-related staffing levels.PPNR, a non-GAAP measure (as defined and reconciled below), improved by $95 million, or 24%, reflecting profitable loan growth and improved funding costs.Net income from continuing operations decreased $57 million, as the PPNR improvement described above was more than offset by a $165 million net reserve release in provision for credit losses in the prior year period.Delinquency rate of 4.1% increased from 3.8% in 1Q21 as a result of gradual consumer payment rate normalization.Net loss rate of 4.8% improved from 5.0% in 1Q21 and remains well-below our historical average net loss rate primarily due to improved economic conditions and proactive risk management.Repurchased 200,000 shares in the first quarter of 2022.  ContactsInvestor Relations: Brian Vereb (Brian.Vereb@breadfinancial.com), 614-528-4516 Media Relations: Shelley Whiddon (Shelley.Whiddon@breadfinancial.com), 214-494-3811 Rachel Stultz (Rachel.Stultz@breadfinancial.com), 614-729-4890  4  Bread Financial | April 28, 2022 
 
 Forward-Looking StatementsThis release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as "believe," "expect," "anticipate," "estimate," "intend," "project," "plan," "likely," "may," "should" or other words or phrases of similar import. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding, and the guidance we give with respect to, our anticipated operating or financial results, future financial performance and outlook, initiation or completion of strategic initiatives, including our ability to realize the intended benefits of the spinoff of the LoyaltyOne® segment, future dividend declarations, and future economic conditions, including, but not limited to, market conditions, inflation, developments in the geopolitical environment, including the war in Ukraine, and the ongoing effects of the global COVID-19 pandemic, which remain difficult to predict.We believe that our expectations are based on reasonable assumptions. Forward-looking statements, however, are subject to a number of risks and uncertainties that could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, and no assurances can be given that our expectations will prove to have been correct. These risks and uncertainties include, but are not limited to, factors set forth in the Risk Factors section in our Annual Report on Form 10-K for the most recently ended fiscal year, which may be updated in Item 1A of, or elsewhere in, our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K. Our forward-looking statements speak only as of the date made, and we undertake no obligation, other than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.Non-GAAP Financial MeasuresWe prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). However, certain information included within this release, including the supplemental schedules and related investor presentation, constitutes non-GAAP financial measures. Our calculations of non-GAAP financial measures may differ from the calculations of similarly titled measures by other companies. In particular, Pre-tax pre-provision earnings (PPNR) is calculated by increasing Income from continuing operations before income taxes by Provision for credit losses. We use PPNR internally as a metric to evaluate our results of operations before income taxes, excluding the volatility that can occur within Provision for credit losses; we believe the use of this non-GAAP financial measure provides additional clarity in understanding our results of operations and trends. For a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure, please see the financial tables and information that follows.Conference Call / Webcast InformationBread Financial will host a conference call on Thursday, April 28, 2022 at 8:30 a.m. (Eastern Time) to discuss the Company’s first quarter 2022 results. The conference call will be available via the Internet at www.breadfinancial.com. There will be several slides accompanying the webcast. Please go to the website at least 15 minutes prior to the call to register, download and install any necessary software. The recorded webcast will also be available on the Company’s website.A replay of the conference call will be available two hours after the end of the call until 11:59 p.m. ET on Thursday, May 12, 2022. To access the replay, please dial (866) 813-9403 or (929) 458-6194 and reference conference ID number “990394”.  5  Bread Financial | April 28, 2022 
 
 About Bread Financial™   Bread FinancialTM (NYSE: BFH) is a tech-forward financial services company providing simple, personalized payment, lending and saving solutions. The company creates opportunities for its customers and partners through digitally enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Driven by a digital-first approach, data insights and white-label technology, Bread Financial delivers growth for its partners through a comprehensive product suite, including private label and co-brand credit cards, installment lending, and buy now, pay later (BNPL). Bread Financial also offers direct-to-consumer solutions that give customers more access, choice and freedom through its branded Bread CashbackTM American Express® Credit Card and Bread SavingsTM products. Formerly Alliance Data, Bread Financial is an S&P MidCap 400 company headquartered in Columbus, Ohio, and committed to sustainable business practices powered by its 6,000+ global associates. To learn more about Bread Financial, visit BreadFinancial.com or follow us on Facebook, LinkedIn, Twitter and Instagram.  6  Bread Financial | April 28, 2022 
 
        Three Months Ended March 31,                  Year EndedMarch 31,                         2022          2021          2022          2021          Interest income:                                                     Interest and fees on loans     $  1,066      $  941       $  3,861        $  3,931        Interest on cash and investment securities        2         1          7           21        Total interest income        1,068         942          3,868           3,952        Interest expense:                                                  Interest on deposits       34        47          167           238        Interest on borrowings        45         60          216           261        Total interest expense        79         107          383           499        Net interest income        989         835          3,485           3,453        Non-interest income:                                              Interchange revenue, net of retailer share arrangements       (96  )      (68  )        (369  )        (332  )     Other        28         35          156           177        Total non-interest income        (68  )       (33  )        (213  )        (155  )     Total net interest and non-interest income        921         802          3,272           3,298        Provision for credit losses        193         33          544           1,266        Total net interest and non-interest income, after provision for credit losses        728         769          2,728            2,032        Non-interest expenses:                                                  Employee compensation and benefits       179        159          671           609        Card and processing expenses       82        78          323           396        Information processing and communication       56        51          216           191        Marketing expense       31        42          160           143        Depreciation and amortization       21        25          92           106        Other        57         47          222           286        Total non-interest expenses        426         402          1,684           1,731        Income from continuing operations before income taxes        302         367          1,044           301        Provision for income taxes        91         99          247           93        Income from continuing operations        211         268          797           208        (Loss) income from discontinued operations, net of taxes         (1  )       18          4           6        Net income     $  210      $  286       $  801        $  214                                                           Basic earnings per share:                                              Income from continuing operations     $  4.23      $  5.39       $  16.02        $  4.36        (Loss) income from discontinued operations        (0.01  )       0.37          0.07           0.11        Net income per share     $  4.22      $  5.76       $  16.09        $  4.47                                                           Diluted earnings per share:                                              Income from continuing operations     $  4.21      $  5.38       $  15.95        $  4.35        (Loss) income from discontinued operations        (0.01  )       0.36          0.07           0.11        Net income per diluted share     $  4.20      $  5.74       $  16.02        $  4.46                                                           Weighted average shares:                                              Basic        49.9         49.7          49.7           47.8        Diluted        50.0         49.8          50.0           47.9                                                           Pre-tax pre-provision earnings*:                                              Income from continuing operations before income taxes     $  302      $  367       $  1,044        $  301        Provision for credit losses        193         33          544           1,266        Pre-tax pre-provision earnings     $  495      $  400       $  1,588        $  1,567        BREAD FINANCIAL HOLDINGSUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In millions, except per share amounts)  * Pre-tax pre-provision earnings (“PPNR”) is a non-GAAP financial measure.  7  Bread Financial | April 28, 2022 
 
       March 31, 2022       December 31, 2021       Assets                       Cash and cash equivalents      $  2,930    $  3,046    Credit card and other loans:                  Total credit card and other loans        16,843      17,399    Allowance for credit losses         (1,826  )     (1,832  )  Credit card and other loans, net         15,017       15,567    Investment securities       233      239    Property and equipment, net       220      215    Goodwill and intangible assets, net        682      687    Other assets        1,856      1,992    Total assets      $  20,938    $  21,746                          Liabilities and Stockholders’ Equity                 Deposits      $  10,646    $  11,027    Debt issued by consolidated variable interest entities       4,816      5,453    Long-term and other debt        1,962      1,986    Other liabilities        1,246      1,194    Total liabilities         18,670       19,660    Stockholders’ equity         2,268       2,086    Total liabilities and stockholders’ equity      $  20,938    $  21,746                          Shares of common stock outstanding       49.8      49.8    BREAD FINANCIAL HOLDINGSUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(In millions)  8  Bread Financial | April 28, 2022 
 
 Note: The unaudited Condensed Consolidated Statements of Cash Flows are presented reflecting the combined cash flows from continuing and discontinued operations.  BREAD FINANCIAL HOLDINGSUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)  9  Bread Financial | April 28, 2022               Three Months Ended March 31,                              2022            2021                                      Cash Flows from Operating Activities:                           Net income           $  210          $  286    Adjustments to reconcile net income to net cash provided by operating activities:                           Provision for credit losses              193             33    Depreciation and amortization            21          34    Deferred income taxes            (48)          (26)    Non-cash stock compensation            7          7    Amortization of deferred financing costs              6             8     Amortization of deferred origination costs              21             16     Change in other operating assets and liabilities:                             Change in other assets            (2)          60    Change in other liabilities            73          95    Other              16             4     Net cash provided by operating activities              497             517                                 Cash Flows from Investing Activities:                           Change in credit card and other loans              339             1,034     Change in redemption settlement assets              —             (13)     Capital expenditures              (20)             (12)     Purchase of investment securities              (18)             (22)     Maturities of investment securities              12             22     Other              (3)             —     Net cash provided by investing activities              310             1,009                                 Cash Flows from Financing Activities:                           Unsecured borrowings under debt agreements              175             —     Repayments/maturities of unsecured borrowings under debt agreements              (200)             (25)     Debt issued by consolidated variable interest entities              525             175     Repayments/maturities of debt issued by consolidated variable interest entities              (1,162)             (2,039)     Net (decrease) increase in deposits              (405)             162     Dividends paid              (10)             (11)     Repurchase of common stock              (12)             —     Other              (7)             (3)     Net cash used in financing activities              (1,096)             (1,741)                                 Effect of exchange rate changes on cash, cash equivalents and restricted cash              —             (1)     Change in cash, cash equivalents and restricted cash              (289)             (216)     Cash, cash equivalents and restricted cash at beginning of period              3,923             3,463     Cash, cash equivalents and restricted cash at end of period           $  3,634          $  3,247                                         
 
 BREAD FINANCIAL HOLDINGSUNAUDITED SUMMARY FINANCIAL HIGHLIGHTS(In millions, except per share amounts and percentages)  10  Bread Financial | April 28, 2022         Three Months Ended March 31,                                       Year EndedMarch 31,                         2022             2021             Change             2021       2020       Change                                                                        Credit sales     $   6,887            $   6,043           14%             $  29,603     $  24,707     20%     Average credit card and other loans     $   16,650            $   15,785           5%             $  15,656     $  16,367     (4)%     End-of-period credit card and other loans     $  16,843            $  15,537           8%             $  17,399     $  16,784     4%     End-of-period direct-to-consumer deposits     $   3,561            $   2,152           66%             $  3,180     $  1,700     87%                                                                          Return on average assets(1)        4.0%              4.9%          (0.9)%                3.6%        0.9%     2.7%     Return on average equity(2)        38.5%              66.3%          (27.8)%                40.7%        16.7%     24.0%                                                                          Net interest margin(3)        19.4%              17.7%          1.7%                18.2%        16.8%     1.4%     Loan yield(4)        25.6%              23.8%          1.8%                24.7%        24.0%     0.7%                                                                          Efficiency ratio(5)        46.2%              50.1%          (3.9)%                51.5%        52.5%     (1.0)%                                                                          Tangible book value per common share(6)     $  31.87           $  21.32          49.5%             $  28.09     $  16.34     71.9%     Tangible common equity / tangible assets ratio (TCE/TA) (7)        7.8%              5.2%          2.6%                6.6%        3.7%     2.9%     Cash dividend per common share     $  0.21           $  0.21          —%             $  0.84     $  1.26     (33.3)%                                                                          Delinquency rate        4.1%              3.8%          0.3%                4.6%        6.6%     (2.0)%     Net loss rate        4.8%              5.0%          (0.2)%                3.9%        4.4%     (0.5)%     Reserve rate        10.8%              11.9%          (1.1)%                10.5%        12.0%     (1.5)%     Return on average assets represents annualized Income from continuing operations divided by average Total assets.Return on average equity represents annualized Income from continuing operations divided by average Total stockholders’ equity.Net interest margin represents annualized Net interest income divided by average Total interest-earning assets.Loan yield represents annualized Interest and fees on loans divided by Average credit card and other loans.Efficiency ratio represents Total non-interest expenses divided by Total net interest and non-interest income.Tangible book value per common share represents Total stockholders’ equity less Intangible assets, net, and Goodwill divided by shares outstanding.Tangible common equity represents Total stockholders’ equity less Intangible assets, net, and Goodwill. Tangible assets represents Total assets less Intangible assets, net, and Goodwill. 
 


 Bread FinancialFirst Quarter 2022 Results  ©2022 Bread Financial | Confidential & Proprietary  1  Ralph AndrettaPresident & CEOPerry BebermanEVP & CFO  April 28, 2022  Exhibit 99.2 
 
 Forward-Looking Statements  This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as "believe," "expect," "anticipate," "estimate," "intend," "project," "plan," "likely," "may," "should" or other words or phrases of similar import. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding, and the guidance we give with respect to, our anticipated operating or financial results, future financial performance and outlook, initiation or completion of strategic initiatives, including our ability to realize the intended benefits of the spinoff of the LoyaltyOne® segment, future dividend declarations, and future economic conditions, including, but not limited to, market conditions, inflation, developments in the geopolitical environment, including the war in Ukraine, and the ongoing effects of the global COVID-19 pandemic, which remain difficult to predict.We believe that our expectations are based on reasonable assumptions. Forward-looking statements, however, are subject to a number of risks and uncertainties that could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, and no assurances can be given that our expectations will prove to have been correct. These risks and uncertainties include, but are not limited to, factors set forth in the Risk Factors section in our Annual Report on Form 10-K for the most recently ended fiscal year, which may be updated in Item 1A of, or elsewhere in, our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K. Our forward-looking statements speak only as of the date made, and we undertake no obligation, other than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.  Non-GAAP Financial Measures  We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). However, certain information included within this presentation, constitutes non-GAAP financial measures. Our calculations of non-GAAP financial measures may differ from the calculations of similarly titled measures by other companies. In particular, Pre-tax pre-provision earnings (“PPNR”) is calculated by increasing Income from continuing operations before income taxes by Provision for credit losses. We use PPNR internally as a metric to evaluate our results of operations before income taxes, excluding the volatility that can occur within Provision for credit losses; we believe the use of this non-GAAP financial measure provides additional clarity in understanding our results of operations and trends. For a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure, please see the financial tables and information that follows. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, please see the financial tables and information that follows.  ©2022 Bread Financial  2 
 
 3   A tech-forward financial services company providing simple, personalized payment, lending, and saving solutions  ©2022 Bread Financial 
 
 Proactive risk management Prudent balance sheet management Disciplined expense management  Our Ongoing Business Transformation    Leading provider of tech-forward payment, lending, and saving solutions  4  Key Foundational Elements  Expanding our product suite and direct-to-consumer offerings    Enhancing our core technology and digital capabilities    Improving our capital ratios and reducing our leverage    Increasing emphasis on Environmental, Social, and Governance    ©2022 Bread Financial 
 
 Continued progress toward our long-term financial goalsRebranded to Bread Financial to reflect our broad suite of digitally-enabled payment, lending, and saving solutions focused on consumer choice, ease, and trustConsistent double-digit sales growth, up 14% versus 1Q21Growth continues to accelerate as average and end-of-period loans increased 5% and 8%, respectively, versus 1Q21Focused on profitable growth with robust business development activities and pipeline opportunities  Monitoring macroeconomic environment & consumer healthClosely monitoring impact from inflation, rising interest rates, and changes in spending and saving habitsConsumer financial health remains stronger than pre-pandemic levelsProactive credit risk management is a key tenet of our strategyDiversified products and brand partner verticals reduce our risk, improving our credit profile  ©2022 Bread Financial | Confidential & Proprietary  5  Key Highlights  ©2022 Bread Financial  5 
 
 Unlimited 2% cashbackNo annual feeNo foreign transaction feesPremium protection benefitsAmerican Express lifestyle benefitsInstant mobile acquisition and wallet provisioning  Business Development Highlights    Brand Partner Announcements & Renewals    New Bread Cashback Card    Select New Bread Pay Partners  6  ©2022 Bread Financial   
 
    Financial Results  ($ in millions, except per share amounts)  1Q22  1Q21    $ Change    % Change    Income from continuing operations, net of taxes  $211  $268    $(57)    (21)  %  (Loss) income from discontinued operations, net of taxes  (1)  18    (19)    (102)    Net income  $210  $286    $(76)    (26)  %  *************************************************************************************************************************************                Net income per diluted share from continuing operations  $4.21  $5.38    $(1.17)    (22)  %  Net (loss) income per diluted share from discontinued operations  (0.01)  0.36    (0.37)    (103)    Net income per diluted share  $4.20  $5.74    $(1.54)    (27)  %                  Weighted average shares outstanding – diluted (in millions)  50.0  49.8            7           ©2022 Bread Financial 
 
   First Quarter 2022 Financial HighlightsContinuing Operations  8  Credit sales of $6.9 billion were up 14% versus 1Q21First quarter average loans of $16.7 billion were up 5% versus 1Q21Revenue increased 15% versus 1Q21, while total non-interest expenses increased 6%Net income from continuing operations of $211 million was down 21% versus 1Q21, as PPNR growth was more than offset by a significantly lower reserve release in 1Q22Credit metrics remained strong with a delinquency rate of 4.1% and a net loss rate of 4.8% for the quarter  $921 million  Revenue  $211 million  Net Income from Continuing Operations  $4.21  Diluted EPSfrom Continuing Operations  8  ©2022 Bread Financial 
 
 Financial Results – Continuing Operations  ($ in millions, except per share)  1Q22  1Q21    $ Change    % Change      2022 YTD  FY21    % Change     Total interest income  $1,068  $942    $126    13  %      $3,868    (2)  %   Total interest expense  79  107    (28)    (26)        383    (23)    Net interest income  989  835    154    18        3,485    1                                 Total non-interest income  (68)  (33)    (35)    108        (213)    38                                Revenue  921  802    119    15        3,272    (1)                                 Net principal losses  199  198    1    1        720    (34)     Reserve build (release)  (6)  (165)    159    nm        (176)    nm     Provision for credit losses  193  33    160    nm        544    (57)                                 Total non-interest expenses  426  402    24    6        1,684    (3)                                Income before income taxes  302  367    (65)    (18)        1,044    247                                 Provision for income taxes  91  99    (8)    (7)        247    168                                Net income  $211  $268    $(57)    (21)  %      $797    283  %                               Net income per diluted share  $4.21  $5.38    $(1.17)    (22)  %      $15.95    267  %   Weighted average shares outstanding – diluted  50.0  49.8    0.2    0  %      50.0    4  %  ************************************************************************************************************************                            Pre-tax pre-provision earnings (“PPNR”)*  $495  $400    $95    24  %      $1,588    1  %  * Pre-tax pre-provision earnings is a non-GAAP financial measure.  nm – not meaningful  9  +24%  ©2022 Bread Financial 
 
 Net Interest Margin    Average interest-bearing liabilities ($ in billions)    Loan yield Avg. earning asset yield Net interest margin   Cost of total int.-bearing liab. Cost of deposits  Average interest-earning assets ($ in billions)  10  ©2022 Bread Financial   
 
 Credit Quality and Allowance  Reserve Rate ($ in millions)  Net Loss Rate  Delinquency Rate  5 year Max rate: 7.6%  5 year Min rate: 3.9%  5 year Avg rate: ~6.0%  * Calculated as the percentage of the Allowance for credit losses to end-of-period Credit card and other loans.  Revolving Credit Risk Distribution(Vantage score)  5 year Max rate: 6.0%  5 year Avg rate: ~5.0%  5 year Min rate: 3.3%  11  ©2022 Bread Financial 
 
 2022 Financial Outlook  Full Year 2021Actuals  Full Year 2022Outlook  Commentary  Average loans $15,656 million  Up low double digits  Continued sales momentum and net partner additions driving strong profitable growthOn a year-over-year basis, expect year-end loan growth to be stronger than full year average loan growth given success of new business development activities in 2022Outlook includes new signings, both announced & unannounced, expected to add incremental year-end balances of greater than $2 billion  Revenue$3,272 million  Aligned with loan growth  Net interest income growth is expected to be favorable to full year average loan growth year-over-year, with a nominal benefit from continued Federal Reserve rate hikes in 2022Non-interest income year-over-year change is expected to partially offset the favorability in Net interest income (financial impacts from divesting our interest in LVI* are not included in the outlook)  Total non-interest expenses$1,684 million  Positive operating leverage  Includes a planned incremental strategic investment of more than $125 million in technology modernization, digital advancement, marketing, and product innovation driving future growth and efficienciesWe expect expenses will increase sequentially each quarter throughout 2022We will manage the pace of our investments to align with our revenue & growth outlook  Net loss rate4.6%  Low-to-mid 5% range  Expect credit metrics to normalize in 2022 off of historically low rates, yet remain below our historical through-the-cycle average of ~6.0%  *Bread Financial has a 19% ownership stake in Loyalty Ventures Inc.  12  ©2022 Bread Financial 
 
 Appendix  ©2022 Bread Financial | Confidential & Proprietary  13 
 
 Average Loans and Credit Sales  ($ in billions)    Loans continue to inflect higher with strong year-over-year credit sales growth providing momentum  14  ©2022 Bread Financial 
 
 Total Non-Interest Expenses  $ in millions  +6%  Total non-interest expenses were up 6% versus 1Q21Employee compensation and benefit costs increased 13%, primarily driven by increased salaries, continued digital and technology modernization-related hiring, and higher volume-related staffing levels.Marketing expenses decreased primarily due to timing of marketing spend in the current year and higher marketing costs related to card program enhancements in 1Q21.Other expenses increased primarily due to legal and other business activity costs.  -4%  5%  13%  8%  (27)%  (16)%  20%  15  ©2022 Bread Financial 
 
 Summary Financial HighlightsContinuing Operations  ($ in millions)  1Q22  1Q21  1Q22 vs    4Q21  1Q22 vs    2022 YTD  FY21  2022 YTD vs        1Q21      4Q21        FY21  Credit sales  $6,887  $6,043  14%    $8,778  (22)%      $29,603  20%  Average credit card and other loans  $16,650  $15,785  5%    $16,086  4%      $15,656  (4)%  End-of-period credit card and other loans  $16,843  $15,537  8%    $17,399  (3)%      $17,399  4%  End-of-period direct-to-consumer deposits  $3,561  $2,152  66%    $3,180  12%      $3,180  87%                        Return on average assets(1)  4.0%  4.9%  (0.9)%    1.1%  2.9%      3.6%  2.7%  Return on average equity(2)  38.5%  66.3%  (27.8)%    11.1%  27.4%      40.7%  24.0%                        Net interest margin(3)  19.4%  17.7%  1.7%    18.8%  0.6%      18.2%  1.4%  Loan yield(4)  25.6%  23.8%  1.8%    25.2%  0.4%      24.7%  0.7%                        Efficiency ratio(5)  46.2%  50.1%  (3.9)%    50.0%  (3.8)%      51.5%  (1.0)%                        Tangible book value per common share(6)  $31.87  $21.32  49.5%    $28.09  13.5%      $28.09  71.9%  Tangible common equity / tangible assets ratio (TCE/TA) (7)  7.8%  5.2%  2.6%    6.6%  1.2%      6.6%  2.9%  Cash dividend declared per common share  $0.21  $0.21  —%    $0.21  —%      $0.84  (33.3)%                        30+ day delinquency rate  4.1%  3.8%  0.3%    3.9%  0.2%      3.9%  (0.5)%  Net loss rate  4.8%  5.0%  (0.2)%    4.4%  0.4%      4.6%  (2.0)%  Reserve rate  10.8%  11.9%  (1.1)%    10.5%  0.3%      10.5%  (1.5)%  (1) Return on average assets represents annualized Income from continuing operations divided by average Total assets.  (2) Return on average equity represents annualized Income from continuing operations divided by average Total stockholders’ equity.  (3) Net interest margin represents annualized Net interest income divided by average total interest-earning assets.    (4) Loan yield represents annualized Interest and fees on Credit card and other loans divided by Average credit card and other loans.(5) Efficiency ratio represents Total non-interest expenses divided by Total net interest and non-interest income.  (6) Tangible book value per common share represents Total stockholders’ equity less Intangible assets, net, and Goodwill divided by shares outstanding.  (7)Tangible common equity represents Total stockholders’ equity less Intangible assets, net, and Goodwill. Tangible assets represents Total assets less Intangible assets, net, and Goodwill.  16  ©2022 Bread Financial 
 
 (1) Return on average assets represents annualized Income from continuing operations divided by average Total assets.  (2) Return on average equity represents annualized Income from continuing operations divided by average Total stockholders’ equity.  (3) Net interest margin represents annualized Net interest income divided by average total interest-earning assets.    Summary Financial HighlightsContinuing Operations  ($ in millions)  1Q20  2Q20  3Q20  4Q20  1Q21  2Q21  3Q21  4Q21  1Q22    2022 YTD  FY21  Credit sales  $6,099  $4,799  $6,152  $7,657  $6,043  $7,401  $7,380  $8,778  $6,887      $29,603   Year-over-year change  (3)%  (36)%  (21)%  (18)%  (1)%  54%  20%  15%  14%      20%  Average credit card and other loans  $18,294  $16,116  $15,300  $15,759  $15,785  $15,282  $15,471  $16,086  $16,650      $15,656   Year-over-year change  9%  (4)%  (12)%  (13)%  (14)%  (5)%  1%  2%  5%      (4)%  End-of-period credit card and other loans  $17,732  $15,809  $15,599  $16,784  $15,537  $15,724  $15,690  $17,399  $16,843      $17,399   Year-over-year change  5%  (10)%  (13)%  (14)%  (12)%  (1)%  1%  4%  8%      4%  End-of-period direct-to-consumer deposits  $1,192  $1,843  $1,707  $1,700  $2,152  $2,398  $3,052  $3,180  $3,561      $3,180   Year-over-year change  nm*  144%  57%  46%  81%  30%  79%  87%  66%      87%                            Return on average assets(1)  —%  0.3%  2.1%  1.4%  4.9%  4.8%  3.7%  1.1%  4.0%      3.6%  Return on average equity(2)  (0.2)%  7.0%  37.2%  21.3%  66.3%  56.4%  38.0%  11.1%  38.5%      40.7%                            Net interest margin(3)  19.5%  13.7%  16.1%  17.8%  17.7%  17.3%  18.9%  18.8%  19.4%      18.2%  Loan yield(4)  26.6%  21.3%  23.9%  24.1%  23.8%  23.9%  25.6%  25.2%  25.6%      24.7%                            Efficiency ratio(5)  40.4%  60.6%  51.0%  63.4%  50.1%  55.5%  50.6%  50.0%  46.2%      51.5%                            Tangible book value per common share(6)  $15.41  $16.99  $20.68  $16.34  $21.32  $27.12  $31.18  $28.09  $31.87      $28.09  Tangible common equity / Tangible assets ratio (TCE/TA) (7)  3.1%  3.6%  4.7%  3.7%  5.2%  6.4%  7.2%  6.6%  7.8%      6.6%  Cash dividend declared per common share  $0.63  $0.21  $0.21  $0.21  $0.21  $0.21  $0.21  $0.21  $0.21      $0.84                            30+ day delinquency rate  6.0%  4.3%  4.7%  4.4%  3.8%  3.3%  3.8%  3.9%  4.1%      3.9%  Net loss rate  7.0%  7.6%  5.8%  6.0%  5.0%  5.1%  3.9%  4.4%  4.8%      4.6%  Reserve rate  12.1%  13.3%  13.3%  12.0%  11.9%  10.4%  10.5%  10.5%  10.8%      10.5%  *nm – not meaningful  17  ©2022 Bread Financial  (4) Loan yield represents annualized Interest and fees on Credit card and other loans divided by Average credit card and other loans.(5) Efficiency ratio represents Total non-interest expenses divided by Total net interest and non-interest income.  (6) Tangible book value per common share represents Total stockholders’ equity less Intangible assets, net, and Goodwill divided by shares outstanding.  (7)Tangible common equity represents Total stockholders’ equity less Intangible assets, net, and Goodwill. Tangible assets represents Total assets less Intangible assets, net, and Goodwill. 
 
 Financial ResultsContinuing Operations          ($ in millions, except per share)  1Q20  2Q20  3Q20  4Q20  1Q21  2Q21  3Q21  4Q21  1Q22    2022 YTD  FY21   Total interest income  $1,227  $860  $915  $950  $942  $915  $994  $1,017  $1,068      $3,868   Total interest expense  146  127  114  112  107  100  91  84  79      383  Net interest income  1,081  733  801  838  835  815  903  933  989      3,485                             Total non-interest income  (11)  (28)  (47)  (69)  (33)  (51)  (52)  (78)  (68)      (213)                            Revenue  1,070  705  754  769  802  764  851  855  921      3,272                             Net principal losses   320    305    223    235    198    194    152    176   199       720    Reserve build (release)  336   (55)  (16)  (82)  (165)  (208)  9   187  (6)         Provision for credit losses  656  250  207  153  33  (14)  161  363  193      544                             Total non-interest expenses  432  427  385  487  402  424  431  427  426      1,684                            (Loss) income before income taxes  (18)  28  162  129  367  354  259  65  302      1,044                             (Benefit) provision for income taxes  (17)  8  47  55  99  91  53  4  91      247                            Net (loss) income  $(1)  $20  $115  $74  $268  $263  $206  $61  $211      $797                             Net (loss) income per diluted share  $(0.01)  $0.41  $2.41  $1.54  $5.38  $5.25  $4.11  $1.21  $4.21      $15.95   Weighted average shares outstanding – diluted   47.7  47.7  47.8  48.4  49.8  50.0  50.0  50.0  50.0      50.0  **************************************************************************************************************************************************************************                          Reconciliation of GAAP to Non-GAAP Financial Measures:                          (Loss) income before income taxes  $(18)  $28  $162  $129  $367  $354  $259  $65  $302      $1,044   Provision for credit losses  656  250  207  153  33  (14)  161  363  193      544  Pre-tax pre-provision earnings (“PPNR”)*  $638  $278  $369  $282  $400  $340  $420  $428  $495      $1,588   Gain on portfolio sales  20  —  —  —  —  —  10  —  —       10  PPNR less gain on portfolio sales*  $618  $278  $369  $282  $400  $340  $410  $428  $495      $1,578  * Pre-tax pre-provision earnings and Pre-tax pre-provision earnings less gain on portfolio sales are non-GAAP financial measures.   18  ©2022 Bread Financial 
 
 Net Interest Margin    1Q22                YTD 2022      ($ in millions)  Average Balance    Interest Income / Expense    Average Yield / Rate    Average Balance    Interest Income / Expense    Average Yield / Rate   Cash and investment securities  $3,794    $2    0.3%    $3,480    $7    0.21%   Credit card and other loans  16,650    1,066    25.6%    15,656    3,861    24.66%  Total interest-earning assets  20,444    1,068    20.9%    19,136    3,868    20.21%                           Direct-to-consumer deposits (retail)  3,278    6    0.8%    2,490    23    0.91%   Wholesale deposits  7,523    28    1.5%    7,509    144    1.92%  Interest-bearing deposits  10,801    34    1.3%    9,999    167    1.67%                           Secured borrowings  4,994    20    1.6%    4,596    112    2.43%   Unsecured borrowings  2,004    25    5.0%    2,699    104    3.84%  Interest-bearing borrowings  6,998    45    2.6%                                      Total interest-bearing liabilities  $17,799    $79    1.8%    $17,294    $383    2.21%                          Net Interest Income      $989            $3,485                              Net interest margin*      19.4%            18.21%      * Net interest margin represents annualized Net interest income divided by average Total interest-earning assets.   19  ©2022 Bread Financial 
 
 Capital and Liquidity  Banks Combined Capital Ratios  1Q20  2Q20  3Q20  4Q20  1Q21  2Q21  3Q21  4Q21  1Q22  Common equity tier 1 capital ratio(2)  15.9%  18.3%  18.8%  18.4%  21.0%  22.1%  22.6%  20.0%  20.8%  Tier 1 capital ratio(3)  15.9%  18.3%  18.8%  18.4%  21.0%  22.1%  22.6%  20.0%  20.8%  Total risk-based capital ratio(4)  17.3%  19.7%  20.1%  19.7%  22.3%  23.4%  23.9%  21.3%  22.1%  Tier 1 leverage capital ratio(5)  12.8%  14.2%  16.1%  17.1%  17.8%  19.2%  19.5%  18.6%  18.2%  Parent Level:Liquidity as of March 31, 2022, of $0.8 billion, consisting of cash on hand plus revolver capacityBank Level (Banks Combined):As of March 31, 2022, the banks finished the quarter with $2.9 billion in cash on hand and $3.3 billion in equityTotal risk based capital ratio at 22.1% - over double the 10% threshold to be considered well-capitalized; CET1 at 20.8%Funding in place for expected growth outlook – with continued long-term strategic focus on retail deposit growth  (1) Tangible common equity represents Total stockholders’ equity less Intangible assets, net, and Goodwill. Tangible assets represents Total assets less Intangible assets, net, and Goodwill.(2) The Common equity tier 1 capital ratio represents common equity tier 1 capital divided by total risk-weighted assets.(3) The Tier 1 capital ratio represents tier 1 capital divided by total risk-weighted assets.(4) The Total risk-based capital ratio represents total capital divided by total risk-weighted assets. (5) The Tier 1 leverage capital ratio represents tier 1 capital divided by total assets for leverage ratio.   20  Tangible Common Equity/Tangible Assets Ratio(1)  Support Profitable Growth & Growth Investments  Efficient Return of Capital to Shareholders  Improve Capital Metrics  Capital Priorities  ©2022 Bread Financial 
 
 Sales and New Account Data  In-store vs. Digital Sales  Digital includes all non-store new accounts and Bread  $ in billions  In-store vs. Digital New Accounts  in millions  21  ©2022 Bread Financial      Digital  In-store