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):
(Exact Name of Registrant as Specified in Charter)
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(State or Other Jurisdiction
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(Commission
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(IRS Employer
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of Incorporation)
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File Number)
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Identification No.)
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(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:
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Written communications pursuant to Rule 425 under the Securities Act
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading symbol
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Name of each exchange on which registered
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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 7.01 Regulation FD Disclosure.
Attached as Exhibit 99.1 is a presentation to be given to investors and others by senior officers of Bread Financial Holdings, Inc.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Document Description
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Investor Presentation Materials.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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The information contained in this report (including Exhibit 99.1) 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.
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Bread Financial Holdings, Inc.
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Date: June 14, 2022
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By:
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/s/ Joseph L. Motes III
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Joseph L. Motes III
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Executive Vice President, Chief
Administrative Officer, General
Counsel and Secretary
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Exhibit 99.1
Bread FinancialMorgan Stanley U.S. Financials, Payments & CRE ConferenceJune 14, 2022 ©2022 Bread
Financial | Confidential & Proprietary 1
2 A tech-forward financial services company providing simple, personalized payment, lending, and saving
solutions ©2022 Bread Financial
©2022 Bread Financial Credit sales remain up double digits year-over-year through May Average and End
of Period loans for May up 12% year-over-year Payments rates remain elevated across Vantage ranges versus pre-pandemic levels; seeing gradual moderation Delinquency rate remains strong, with May at 4% and a stable outlook for 2022 May net
loss rate negatively impacted by ~90 basis points related to a pending contractual dispute. Excluding the impact, the 2Q22 net loss rate is still expected to be near the high end of our full year guidance of low- to mid-5% Fiserv conversion
remains on track 3 Mid-Quarter 2Q22 Financial Update
Our Business Transformation A leading provider of tech-forward payment, lending, and saving
solutions 4 Guiding business principles to drive sustainable, profitable growth Expanded our product suite and direct-to-consumer offerings Enhanced our core technology and digital capabilities Focused on improving our capital ratios and
reducing our leverage Increased emphasis on Environmental, Social, and Governance ©2022 Bread Financial Strong corporategovernance Proactive risk management Prudent balance sheetmanagement Disciplined expense management
Milestone Events New leadership team & continued Board refreshment Launched the Comenity®
Mastercard® Launched enhanced digital capabilities for our brand partners Transitioned core processing to Fiserv Acquired versatile payment platform with installment loan and split pay (BNPL) Record year for new signings and
renewals Announced strategic platform relationships 2020 2021 Completed spinoff of Loyalty Ventures 5 2022 Launched Bread CashbackTM American Express® Credit Card Rebranded as atech-forward financial services company ©2022 Bread
Financial
U.S. Consumer Penetration 1 in 7 American adults, including 1 in 5 U.S. female adults We’ve put a card
in the wallets of Savings Products Differentiated Products & Brand Partnerships 6 Private Label Credit Card Co-Brand Credit Card Proprietary Credit Card Installment Loans Split-Pay (BNPL) Gen Z Millennial Gen X Baby
Boomer Expanded product offerings provide consumer choice across the total addressable market Budget/Cash Flow Rewards/Convenience Product Graduation from credit building products to a full suite of financial offerings Product
Optimization presents the right product, to the right customer, at the right time ©2022 Bread Financial Card Partner Loyalty >90% 15 years Partner renewal rate Average tenure Well Diversified ~130 Card partner programs in
multiple industry verticals Long history of brand partnership success
Product Diversification 7 ©2022 Bread Financial Private Label(Closed Network) Co-Brand (Open
Network) Proprietary (Open Network) BNPL Long history of successes with programs tailored to build customer loyalty with our partners’ brands Traditional PLCC average loan ~$400; also provide promotional “Big Ticket” PLCC financing Higher
revenue yields; deeper underwriting; lower credit lines Ideal for well known brands; builds brand loyalty and enables general purpose network spend, improving diversification Majority of Co-Brand portfolio >660 Vantage score Higher credit
scores; higher credit lines; lower revenue yields General purpose cashback cards to capture incremental spend, and build and retain customer relationships Increases total addressable market, including the Millennial and Gen Z populations No
partner risk or share of economics Buy Now, Pay Later (BNPL) consists of both digital installment and split pay offerings Bolsters full suite of products to provide consumer choice with focus on Millennials and Gen Z Over 95% of loans are
installment On Top Diversifying our product mix to optimize risk-adjusted returns and deliver sustainable, profitable growth End-of-Period Loan Balances Co-Brand, proprietary, and BNPL now comprise over 1/3 of loan balances
Loan Loss reserve materially higher. Rate of 10.8%, up 480 bps from year-end 2019 and prior pre-recession
periods. Strengthened Financial Resilience 8 ©2022 Bread Financial Enhanced Credit Risk Management Diversification across products, partners, and channels Stronger underwriting resulting from enhanced technology, monitoring, and
data Prudent and proactive line management Well-established risk appetite metrics Recession readiness playbook in place In addition to strong profit margins, strengthened balance sheet ratios and credit mix provide more layers and
confidence of resilience. Strong PPNR margin and strengthened balance sheet provide improved financial resilience Capital ratios significantly improved. TCE/TA ratio at 7.8%; was negative during various periods and up 300 bps from
spin. Credit mix shifting to higher quality. Risk score mix with >660 at 61%, above the 52% pre-pandemic level and higher than any other pre-recession period. 6.0-6.5% 4.0-4.5% 2.5-3.0% PPNR Margin(1) held @ 1Q22 12% Positive Profit
Margin Less: Credit Losses Range of Net Loss Rates 5.5-6.0% 7.5-8.0% 9.0-9.5% Positive Profit Margin Maintained in Stressed Scenarios 7.2% ~12% Net Loss Rate 4.8% Expect to outperform historic loss levels due to enhanced credit
risk management (1) Pretax pre-provision earnings (PPNR) / average loans. PPNR is a non-GAAP financial measure.
Technology Innovation 9 Bolstered technology modernization of our core processing and digital
properties, driving convenience and choice Full product suite coupled with our data and analytics expertise provide personalized experiences offering the right product for the consumer in the channel of their choice Bread Pay platform
strengthens our versatile tech stack with API-configured, headless integration capabilities, and expands our total addressable market and distribution network Customer Account Center redesign provides simplified navigation, enhanced
transaction & dashboard views, and reinforces engagement with Rewards Digital Modernization Accelerate Customer Centric Growth Seamless Self Service & Engagement Deliver a Robust Set of Product and Partner Capabilities ©2022 Bread
Financial Enhanced our core technology and digital capabilities
Long-Term Company Financial Targets High single-digit annual loan growth Average of $20 billion in
2023 Positive operating leverage 2022 and beyond Net loss rate less than 6% Average through-the-cycle target range Return on Equity mid- to high-20% Range 10 Capital Priorities Announced at Investor Day in May 2021 based on 3-year
outlook ©2022 Bread Financial
Areas of focus Environmental, Social, and Governance Proxy statement features enhanced, integrated ESG
disclosure, in line with our ESG report released in May 2022. Sustainability Governance Fair & Responsible Banking Secure & Responsible Use of Data Human Capital Management Environment, Climate Risk Community
Investment Multi-Stakeholder Financial Wellness 11 ©2022 Bread Financial
Rajesh Natarajan Engaged & Diverse Board of Directors Executive Leadership Team with ~150 years of
Combined Industry Experience Bread Financial Leadership Team & Board of Directors Ralph Andretta President & CEO Val Greer EVP & Chief Commercial Officer Perry Beberman EVP & CFO Tammy McConnaughey EVP, Operations &
Credit Risk Joe Motes EVP, CAO & General Counsel Ralph Andretta Karin Kimbrough Roger Ballou Timothy Theriault John Gerspach Laurie Tucker Sharen Turney Challenging, supportive Board Responsible decision-making Active oversight
of ESG strategy and execution Successful execution of multi-year Board refreshment program 12 ©2022 Bread Financial
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 Measure 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, Pretax 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 our Quarterly Report on Form 10-Q for the most recent quarter end, filed with the Securities and Exchange Commission. ©2022 Bread
Financial 13
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. About Bread Financial™ 14 Brian Vereb Head of Investor Relations Office: (614) 528-4516 E-mail: brian.vereb@breadfinancial.com ©2022 Bread Financial