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 2.02 Results of Operations and Financial Condition.
On July 28, 2022, Bread Financial Holdings, Inc. (the “Company”) issued a press release regarding its results of operations for the second
quarter ended June 30, 2022 (the “Q2 2022 Earnings Release”). A copy of the Q2 2022 Earnings Release is furnished as Exhibit 99.1 hereto.
Item 7.01 Regulation FD Disclosure.
In connection with the Q2 2022 Earnings Release, on July 28, 2022, the Company made available an investor presentation that may be used by
the Company’s senior management during meetings and calls with analysts, investors and other market participants, a copy of which is furnished as Exhibit 99.2 hereto and is posted on the Company’s website at www.breadfinancial.com on the “Investors”
page under “Events & Presentations.” Information on the Company’s website does not constitute a part of this Current Report on Form 8-K.
In addition, on July 28, 2022, the Company issued a press
release announcing a new, multi-year agreement with AAA. A copy of the press release announcing the Company’s agreement with AAA is furnished as Exhibit 99.3 hereto.
Item 8.01 Other Events.
On July 28, 2022, the Company issued a press release announcing that the Board of Directors of the Company declared a quarterly cash
dividend of $0.21 per share of common stock, payable on September 16, 2022 to stockholders of record at the close of business on August 12, 2022. A copy of the press release announcing the Company‘s quarterly dividend is attached as Exhibit 99.4
hereto.
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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Press Release dated July 28, 2022 announcing the Company’s results of operations for the second quarter ended June 30, 2022.
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Investor Presentation dated July 28, 2022.
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Press Release dated July 28, 2022 announcing the Company’s agreement with AAA.
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Press Release dated July 28, 2022 announcing the Company’s quarterly dividend.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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Note: Except for the information
in Item 8.01 hereof (including Exhibit 99.4 hereto), the information contained in this report (including Exhibits 99.1, 99.2 and 99.3) 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: July 28, 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
“We continue to successfully renew many of our longstanding relationships including a multi-year renewal
with Torrid, a direct-to-consumer apparel and intimates brand in North America that serves over three million customers through its e-commerce channel and more than 600 stores nationwide. We remain committed to working closely with Torrid to
drive customer loyalty, acquisition, and increased spending in the coming years. Financial Second Quarter 2022 Year-to-Date 2022 Summary Total Company Continuing Operations(a) Total Company Continuing Operations(a) Net Income ($
millions) $12 $12 $223 $224 Earnings per Diluted Share $0.25 $0.25 $4.46 $4.47 Business Highlights “We are pleased to have announced a long-term relationship with AAA, while also reaching a definitive contract to acquire AAA’s
existing credit card portfolio, expected to close in the fourth quarter. Serving more than 56 million U.S. members, AAA is one of North America’s largest and most trusted membership organizations. With enhanced cardholder value propositions,
our program with AAA will include two unique co-brand products, the AAA Travel Advantage Visa Credit Card and AAA Daily Advantage Visa Credit Card, both of which cater to the modern consumers’ evolving payment and loyalty rewards
preferences. The AAA program further diversifies our portfolio and demonstrates our continued focus on loan growth,” said Ralph Andretta, president and chief executive officer of Bread Financial. 1 Bread Financial Reports Second Quarter 2022
Results CEO Commentary “Our second quarter results demonstrated the benefits of the strategic actions we have implemented since 2020. Our business transformation efforts continue to enable sustainable, profitable growth, leading to a pretax
pre-provision earnings (PPNR) increase of 24% versus the second quarter of 2021. End-of-period loans grew 13% year-over-year driven by continued strong sales growth. Our credit metrics remained better than historical levels as a result of our
disciplined, proactive risk management and the continued strength of the consumer. “Through the execution of our strategy, we have strengthened our financial resilience as evidenced by the improvement in our capital and funding metrics as
well as the diversification across both our product portfolio with increasing co-brand and proprietary card balances and industry verticals. Through product and brand partner diversification, our credit profile has improved from pre-pandemic
levels, providing confidence in sustained performance as credit continues to normalize. Although the consumer remains well-positioned, our seasoned leadership team will remain proactive in our discipline around underwriting, risk management, and
recession readiness. “During the quarter, we completed the planned transition of our credit card processing services to Fiserv, including the secure transfer of millions of data records, and migrated to the cloud. These are core components of
our broader technology modernization and business transformation efforts. Our team is committed and fully engaged to ensure expected platform performance is achieved. We are pleased with achieving these milestones, which are expected to improve
our long-term operational efficiencies, scalability, risk management, and speed-to-market. “We continue to make strategic investments that will drive profitable growth, while utilizing the tools necessary to manage through the full economic
cycle.” - Ralph Andretta, president and chief executive officer COLUMBUS, Ohio, July 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 financial results for the second quarter ended June 30, 2022. Reflective of the spinoff of Loyalty Ventures Inc. Second quarter net income was $12 million, or $0.25 per diluted share, including a reserve build
of $166 million and a $21 million write-down in the carrying value of the Company’s investment in Loyalty Ventures Inc. Total second quarter revenue was $893 million, up $129 million, or 17%, versus the second quarter of 2021. Expected
normalization of credit metrics continued in the second quarter with a delinquency rate of 4.4% and a net loss rate of 5.6%, which included the previously disclosed 30 basis point, or $13 million increase from the effects of the purchase of
previously written-off accounts that were sold to a third-party debt collection agency. Bread Financial | July 28, 2022 “Our recent business development wins of iconic brands and renewals with our valued brand partners reflect the successful
execution of our strategy to drive sustainable, profitable growth and we anticipate this success will continue given our strong pipeline.” Andretta noted.
“In the second quarter, Bread Financial exhibited year-over-year improvements in several of our key
financial metrics. Revenue increased 17% compared with the second quarter of 2021, driven by continued loan growth. For the fifth consecutive quarter, PPNR growth improved year-over-year by double-digits, highlighting the quality growth we are
focused on delivering. “While the health of the consumer remains strong, which is evident from our delinquency and net loss rates remaining below the historical averages, we continue to closely monitor the evolving macroeconomic landscape. As we
have mentioned previously, our expectation of and planning for the normalization of consumer payment behavior is reflected in our 2022 guidance, and our results this quarter are within the range of our expectations. Given ongoing macroeconomic
uncertainties, we have maintained conservative economic scenario weightings in our credit reserve modeling, with an increasing probability of a recession due to more persistent inflation. “Despite these macroeconomic headwinds, we remain
confident in our full year guidance and we will continue to manage our business considering risk-reward tradeoffs to maintain sustainable, profitable growth in the periods ahead.” CFO Commentary - Perry Beberman, executive vice president and
chief financial officer 2022 Full Year CFO Outlook Macroeconomic Assumptions: “We continue to be vigilant in monitoring macroeconomic conditions and the impact on consumers and our brand partners. Our outlook continues to assume a moderation in
the consumer payment rate throughout 2022. Payment rate variability is a key determinant for the high- and low-ends of our forecast. We expect ongoing interest rate increases by the Federal Reserve during the year to result in a nominal benefit
to total net interest income, which is also included in our outlook. Average Loan Growth: “Based on our new and renewed business announcements, visibility into our pipeline, and the current economic outlook, we continue to anticipate full
year 2022 average credit card and other loans growth will be in the low-double-digit range relative to 2021. Total Revenue: “Total revenue growth for 2022 is anticipated to align with average loan growth, with potential upside from improved
full year net interest margin. Total Expenses: “As a result of ongoing investment in technology modernization, digital advancement, marketing, and product innovation, along with strong portfolio growth, we continue to expect increased
expenses sequentially each quarter throughout 2022. We remain focused on delivering modest positive operating leverage for the full year as the pace and timing of our investments will be managed to align with our full year revenue and growth
outlook. Net Loss Rate: “We continue to expect a net loss rate in the low-to-mid 5% range for 2022 as credit metrics 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 also continue to expect our full year normalized 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 | July 28, 2022
+10% +17% +24% +1.1% +0.5% Key Operating and Financial Metrics(a) Credit Metrics (a) Reflective of
the spinoff of Loyalty Ventures Inc. for all periods presented. nm – not meaningful * Pretax pre-provision earnings (PPNR) is a non-GAAP financial measure. See “Non-GAAP Financial Measures” below. 3 Diluted EPS Bread Financial | July 28,
2022 $0.25 Continuing Operations(a) Quarter Ended Year-to-Date June 30, through June 30, ($ in millions, except per share amounts) 2022 2021 Change 2022 2021 Change Total net interest and non-interest income (“Revenue”) $893 $764
17% $1,814 $1,566 16% Net principal losses $238 $194 23% $438 $392 12% Reserve build (release) $166 $(208) (180)% $160 $(373) (143)% Provision for credit losses $404 $(14) nm $598 $19 nm Total non-interest
expenses $473 $424 12% $897 $826 9% Income from continuing operations before income taxes $16 $354 (95)% $319 $721 (56)% Income from continuing operations $12 $263 (95)% $224 $531 (58)% Income from continuing
operations per diluted share $0.25 $5.25 (95)% $4.47 $10.63 (58)% Weighted average shares outstanding – diluted 49.9 50.0 50.0 49.9 ********************************** Pretax pre-provision earnings (PPNR)* $420 $340 24% $917
$740 24%
Second Quarter 2022 Compared with Second Quarter 2021 – Continuing Operations Credit sales increased 10%
to $8.1 billion as consumer spending remained strong. Average and end-of-period credit card and other loans increased 11% and 13% to $17.0 and $17.8 billion, respectively, driven by strong credit sales. Revenue increased 17%, or $129
million, resulting from higher average loan balances and improved loan yields partially offset by a $21 million write-down in the carrying value of our equity method investment in Loyalty Ventures Inc. Net Interest Margin increased 130 basis
points year-over-year and was lower sequentially due to seasonality. Total non-interest expenses increased 12%, or $49 million, as employee compensation and benefit costs increased 18%, or $29 million, marketing expenses increased 41%, or $15
million, and investments were made in the Bread Pay platform as part of our technology modernization initiative. PPNR, a non-GAAP financial measure, improved by $80 million, or 24%, reflecting sustainable, profitable growth and continued
success with our business transformation efforts. Net income from continuing operations decreased $251 million, as the improvement in PPNR was offset by a $166 million net reserve build in provision for credit losses reflecting both loan
growth in the quarter of nearly $1 billion and conservative economic scenario weightings due to more persistent inflation. Net income from continuing operations was also impacted by a $21 million write-down in the carrying value of our equity
method investment in Loyalty Ventures Inc. and a $13 million increase from the effects of the purchase of previously written-off accounts that were sold to a third-party debt collection agency. Delinquency rate of 4.4% increased from a
historical low of 3.3% in 2Q21 and 4.1% in 1Q22 as a result of expected consumer payment rate normalization. Net loss rate of 5.6% increased from 5.1% in 2Q21, inclusive of a 30 basis point increase from the effects of the purchase of
previously written-off accounts that were sold to a third-party debt collection agency; this matter remains subject to an ongoing legal dispute with the debt collection agency. 4 Bread Financial | July 28, 2022 Contacts Investor 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
Forward-Looking Statements This 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, future economic conditions, including, but
not limited to, market conditions, persistent inflation, rising interest rates, the increased probability of a recession and related impacts on consumer behavior, future legislative or regulatory actions that could have impact on our business and
results of operations, including any such actions that may be taken with respect to late fees or other charges, developments in the geopolitical environment, including the war in Ukraine, and the ongoing effects of the global COVID-19 pandemic,
all of which factors 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 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, Pretax pre-provision earnings (PPNR) is calculated by increasing/decreasing Income from continuing operations before income taxes by the net build/release in Provision for credit losses. We use PPNR as a metric to
evaluate our results of operations before income taxes, excluding the volatility that can occur within Provision for credit losses. Tangible common equity over Tangible assets (TCE/TA) represents Total stockholders’ equity reduced by Goodwill and
intangible assets, net, (TCE) divided by Tangible assets (TA), which is Total assets reduced by Goodwill and intangible assets, net. We use TCE/TA as a metric to evaluate the Company’s capital adequacy and estimate its ability to cover potential
losses. Tangible book value per common share represents TCE divided by shares outstanding. We use Tangible book value per common share as a metric to estimate the Company’s potential value in relation to tangible assets per share. We believe the
use of these non-GAAP financial measures provide additional clarity in understanding our results of operations and trends. 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. Conference Call / Webcast Information Bread Financial will host a conference call on Thursday, July 28, 2022 at 8:30 a.m. (Eastern Time) to discuss the Company’s second 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, August 11, 2022. To access the replay, please
dial (866) 813-9403 or (929) 458-6194 and reference conference ID number “564340”. 5 Bread Financial | July 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.
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 | July 28, 2022
BREAD FINANCIAL HOLDINGS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In millions, except
per share amounts) * Pretax pre-provision earnings (PPNR) is a non-GAAP financial measure. 7 Bread Financial | July 28, 2022 Three Months Ended Six Months Ended
June 30, June 30, 2022 2021 2022 2021 Interest income Interest and fees on loans $ 1,064 $ 913 $
2,130 $ 1,854 Interest on cash and investment securities 9 2 11 3 Total interest income 1,073 915 2,141 1,857 Interest expense Interest
on deposits 41 43 76 90 Interest on borrowings 54 57 98 117 Total interest expense 95 100 174 207 Net interest income 978
815 1,967 1,650 Non-interest income Interchange revenue, net of retailer share arrangements (102) (85) (198) (153) Other 17 34
45 69 Total non-interest income (85) (51) (153) (84) Total net interest and non-interest income 893 764 1,814 1,566 Provision for credit losses 404
(14) 598 19 Total net interest and non-interest income, after provision for credit losses 489 778 1,216 1,547 Non-interest expenses Employee compensation and
benefits 191 162 370 320 Card and processing expenses 84 83 166 161 Information processing and communication 61 55 117 106 Marketing
expenses 50 35 80 77 Depreciation and amortization 30 22 51 47 Other 57 67 113 115 Total non-interest expenses 473 424
897 826 Income from continuing operations before income taxes 16 354 319 721 Provision for income taxes 4 91 95 190 Income from continuing operations 12
263 224 531 Income (loss) from discontinued operations, net of income taxes — 11 (1) 29 Net income $ 12 $ 274 $ 223 $ 560 Basic
income per share Income from continuing operations $ 0.25 $ 5.29 $ 4.48 $ 10.68 Income (loss) from discontinued operations $ — $ 0.21 $ (0.01) $ 0.58 Net
income per share $ 0.25 $ 5.50 $ 4.47 $ 11.26 Diluted income per share Income from continuing operations $ 0.25 $ 5.25 $
4.47 $ 10.63 Income (loss) from discontinued operations $ — $ 0.22 $ (0.01) $ 0.58 Net income per share $ 0.25 $ 5.47 $ 4.46 $ 11.21 Weighted average
common shares outstanding Basic 49.8 49.7 49.8 49.7 Diluted 49.9 50.0 50.0 49.9 Pretax pre-provision earnings (PPNR)*
$ 420 $ 340 $ 917 $ 740
BREAD FINANCIAL HOLDINGS, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) 8 Bread
Financial | July 28, 2022 June 30, December 31, 2022 2021 Assets Cash and cash equivalents $ 3,111 $ 3,046 Credit card and other loans Total credit card and other loans 17,769 17,399 Allowance for credit losses
(1,992) (1,832) Credit card and other loans, net 15,777 15,567 Available-for-sale securities 224 239 Property and equipment, net 219 215 Goodwill and intangible assets, net 694 687 Other assets 1,786 1,992
Total assets $ 21,811 $ 21,746 Liabilities and Stockholders’ Equity Deposits $ 11,028 $ 11,027 Debt issued by consolidated variable interest entities 5,498 5,453 Long-term and other debt 1,939 1,986 Other
liabilities 1,071 1,194 Total liabilities 19,536 19,660 Stockholders’ equity 2,275 2,086 Total liabilities and stockholders’ equity $ 21,811 $ 21,746 Shares of common stock outstanding 49.8 49.8
Note: The unaudited Condensed Consolidated Statements of Cash Flows are presented reflecting the combined
cash flows from continuing and discontinued operations. BREAD FINANCIAL HOLDINGS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) 9 Bread Financial | July 28, 2022 Six Months Ended June 30,
2022 2021 Cash Flows from Operating Activities Net income $ 223 $ 560 Adjustments to reconcile net income to net cash provided by operating activities Provision for credit
losses 598 19 Depreciation and amortization 51 66 Deferred income taxes (102) 22 Non-cash stock compensation 16 16 Amortization of deferred financing costs 12 16 Amortization of deferred origination
costs 43 34 Change in other operating assets and liabilities Change in other assets (32) (59) Change in other liabilities (106) 54 Other 40 5 Net cash provided by operating
activities 743 733 Cash Flows from Investing Activities Change in credit card and other loans (596) 666 Change in redemption settlement assets — (41) Purchase of credit card
portfolio (249) (32) Capital expenditures (43) (35) Purchase of investment securities (23) (60) Maturities of investment securities 18 35 Other (4) 2 Net cash
provided by investing activities (897) 535 Cash Flows from Financing Activities Unsecured borrowings under debt agreements 218 31 Repayments/maturities of unsecured borrowings under debt
agreements (269) (82) Debt issued by consolidated variable interest entities 1,588 2,065 Repayments/maturities of debt issued by consolidated variable interest
entities (1,543) (3,173) Net decrease in deposits (22) (176) Payment of deferred financing costs (7) (8) Dividends paid (22) (21) Repurchase of common
stock (12) — Other (3) (1) Net cash used in financing activities (72) (1,365) Effect of exchange rate changes on cash, cash equivalents and restricted
cash — 1 Change in cash, cash equivalents and restricted cash (226) (96) Cash, cash equivalents and restricted cash at beginning of period 3,923 3,463 Cash, cash equivalents and
restricted cash at end of period $ 3,697 $ 3,367
BREAD FINANCIAL HOLDINGS, INC. UNAUDITED SUMMARY FINANCIAL HIGHLIGHTS (In millions, except per share
amounts and percentages) 10 Bread Financial | July 28, 2022 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 Change 2022 2021 Change Credit sales $ 8,140 $ 7,401 10% $ 15,028 $ 13,445
12% Average credit card and other loans $ 17,003 $ 15,282 11% $ 16,827 $ 15,533 8% End-of-period credit card and other loans $ 17,769 $ 15,724 13% $ 17,769 $ 15,724 13% End-of-period direct-to-consumer deposits
$ 4,191 $ 2,398 75% $ 4,191 $ 2,398 75% Return on average assets(1) 0.2% 4.8% (4.6)% 2.1% 4.9% (2.8)% Return on average equity(2) 2.2% 56.4% (54.2)% 19.9% 61.0% (41.1)% Net interest
margin(3) 18.6% 17.3% 1.3% 19.0% 17.5% 1.5% Loan yield(4) 25.0% 23.9% 1.1% 25.3% 23.9% 1.4% Efficiency ratio(5) 52.9% 55.5% (2.6)% 49.5% 52.7% (3.2)% Tangible common equity / tangible assets ratio (TCE/TA)
(6) 7.5% 6.4% 1.1% 7.5% 6.4% 1.1% Tangible book value per common share(7) $ 31.75 $ 27.12 17.1% $ 31.75 $ 27.12 17.1% Cash dividend per common share $ 0.21 $ 0.21 0.0% $ 0.42 $ 0.42 0.0% Delinquency
rate 4.4% 3.3% 1.1% 4.4% 3.3% 1.1% Net loss rate(8) 5.6% 5.1% 0.5% 5.2% 5.0% 0.2% Reserve rate 11.2% 10.4% 0.8% 11.2% 10.4% 0.8% (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 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 common equity (TCE) represents Total stockholders’ equity reduced by Goodwill and intangible assets, net. Tangible assets (TA) represents Total assets reduced by Goodwill and intangible assets, net. TCE/TA is a non-GAAP
financial measure. (7) Tangible book value per common share represents TCE divided by shares outstanding, and is a non-GAAP financial measure. (8) The three and six months ended June 30, 2022 Net loss rates include 30 basis point and 15 basis
point increases, respectively, from the effects of the purchase of previously written-off accounts that were sold to a third-party debt collection agency; this matter remains subject to an ongoing legal dispute with the debt collection agency
BREAD FINANCIAL HOLDINGS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In millions, except
percentages) 11 Bread Financial | July 28, 2022 nm – not meaningful Three Months Ended June 30, Six Months Ended June 30, 2022 2021 Change 2022 2021 Change Pretax pre-provision earnings (PPNR) Income
from continuing operations before income taxes $16 $354 (95)% $319 $721 (56)% Provision for credit losses 404 (14) nm 598 19 nm Pretax pre-provision earnings (PPNR) $420 $340 24% $917 $740 24% Tangible common equity
(TCE) Total stockholders’ equity 2,275 2,048 11% 2,275 2,048 11% Less: Goodwill and intangible assets, net (694) (699) (1)% (694) (699) (1)% Tangible common equity (TCE) $1,581 $1,349 17% $1,581 $1,349 17% Tangible
assets (TA) Total assets 21,811 21,812 — 21,811 21,812 — Less: Goodwill and intangible assets, net (694) (699) (1)% (694) (699) (1)% Tangible assets (TA) $21,117 $21,113 — $21,117 $21,113 —
Bread FinancialSecond Quarter 2022 Results ©2022 Bread Financial | Confidential &
Proprietary 1 Ralph Andretta President & CEO Perry Beberman EVP & CFO July 28, 2022
Forward-Looking Statements This 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, future economic conditions, including, but
not limited to, market conditions, persistent inflation, rising interest rates, the increased probability of a recession and related impacts on consumer behavior, future legislative or regulatory actions that could have impact on our business and
results of operations, including any such actions that may be taken with respect to late fees or other charges, developments in the geopolitical environment, including the war in Ukraine, and the ongoing effects of the global COVID-19 pandemic,
all of which factors 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 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, Pretax pre-provision earnings (PPNR) is calculated by increasing/decreasing Income from continuing operations before income taxes by the net build/release in Provision for credit losses. We use PPNR as a metric to
evaluate our results of operations before income taxes, excluding the volatility that can occur within Provision for credit losses. Tangible common equity over Tangible assets (TCE/TA) represents Total stockholders’ equity reduced by Goodwill and
intangible assets, net, (TCE) divided by Tangible assets (TA), which is Total assets reduced by Goodwill and intangible assets, net. We use TCE/TA as a metric to evaluate the Company’s capital adequacy and estimate its ability to cover potential
losses. Tangible book value per common share represents TCE divided by shares outstanding. We use Tangible book value per common share as a metric to estimate the Company’s potential value in relation to tangible assets per share. We believe the
use of these non-GAAP financial measures provide additional clarity in understanding our results of operations and trends. 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
Business transformation efforts continue Advanced technology modernization through digital enhancements
and processing transition Continued diversification across both products and industry verticals Strong foundation of seasoned financial services industry executive leadership with success in managing through full economic cycles Strengthened
financial resilience to deliver sustainable, profitable growth ©2022 Bread Financial | Confidential & Proprietary 3 Key Highlights ©2022 Bread Financial 3 Quality growth with strong core performance trends Consistent credit sales
growth, up 10% versus 2Q21 Growth continues to accelerate as average and end-of-period loans increased 11% and 13%, respectively, versus 2Q21 Pretax pre-provision earnings* up 24% versus 2Q21; 5th consecutive quarter up double-digits Remain
focused on sustainable, profitable growth with a robust business development pipeline Closely monitoring impact from inflation, rising interest rates, and changes in spending & savings * See “Non-GAAP Financial Measures.”
Business Development Highlights Brand Partner Renewal New Brand Partnership Select New Bread Pay
Partners 4 ©2022 Bread Financial Serves over three million customers through its e-commerce platform and over 600 stores One of North America’s largest and most trusted membership organizations serving more than 56 million U.S.
members Foresight Sports Stock4Less Unistellar Optics Quality Water Treatment
Technology Modernization 5 Digital Modernization Accelerate Customer-Centric Growth Seamless Self
Service & Engagement Deliver a Robust Set of Product and Partner Capabilities ©2022 Bread Financial Key Benefits of Core Processing Conversion to Fiserv Faster speed-to-market for new products, brand partner launches, and portfolio
conversions Ability to manage risk more effectively and better serve our brand partners Long-term cost savings associated with improved platform efficiencies Ability to seamlessly integrate a variety of additional payment products in the
future
Second Quarter 2022 Financial Highlights 6 Credit sales of $8.1 billion were up 10% versus 2Q21 Second
quarter average loans of $17.0 billion were up 11% versus 2Q21 Revenue increased 17% versus 2Q21, inclusive of a $21 million write-down in the carrying value of the Company’s investment in Loyalty Ventures Inc., while total non-interest expenses
increased 12% Net income from continuing operations of $12 million was down 95% versus 2Q21, as PPNR growth was more than offset by higher provision for credit losses in 2Q22, including a reserve build of $166 million in the quarter Credit
metrics remained below historical averages $893 million Revenue $12 million Net Income $0.25 Diluted EPS 6 ©2022 Bread Financial
Financial Results – Continuing Operations * Pretax pre-provision earnings is a non-GAAP financial
measure. nm – not meaningful 7 ©2022 Bread Financial ($ in millions, except per share) 2Q22 2Q21 $ Chg % Chg YTD ‘22 YTD ’21 $ Chg % Chg Total interest income $1,073 $915 $158 17 % $2,141 $1,857 $284 15 % Total interest
expense 95 100 (5) (5) 174 207 (33) (16) Net interest income 978 815 163 20 1,967 1,650 317 19 Total non-interest income (85) (51) (34) 65 (153) (84) (69) 82 Revenue 893 764 129 17 1,814 1,566 248 16 Net
principal losses 238 194 44 23 438 392 46 12 Reserve build (release) 166 (208) 374 nm 160 (373) 533 nm Provision for credit losses 404 (14) 418 nm 598 19 579 nm Total non-interest
expenses 473 424 49 12 897 826 71 9 Income before income taxes 16 354 (338) (95) 319 721 (402) (56) Provision for income taxes 4 91 (87) (96) 95 190 (95) (50) Net
income $12 $263 (251) (95) % $224 $531 $(307) (58) % Net income per diluted share $0.25 $5.25 $(5.00) (95) % $4.47 $10.63 $(6.16) (58) % Weighted avg. shares outstanding –
diluted 49.9 50.0 50.0 49.9 ************************************************************************************************************************************ Pretax pre-provision earnings
(PPNR)* $420 $340 $80 24 % $917 $740 $177 24 % $ in millions +24% +24%
Net Interest Margin Average interest-bearing liabilities ($ in billions) Loan yield Avg. earning asset
yield Net interest margin Cost of total interest-bearing liabilities Cost of deposits Average interest-earning assets ($ in billions) 8 ©2022 Bread Financial
Credit Quality and Allowance Reserve Rates ($ in millions) Net Loss Rates Delinquency Rates 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% 9 ©2022 Bread Financial **2Q22 includes a 30 basis point increase from the effects of the purchase of previously written-off accounts that were sold to a third-party debt collection
agency **
2022 Financial Outlook Full Year 2021 Actuals Full Year 2022 Outlook Commentary Average loans
$15,656 million Up low double digits Continued sales growth and net partner additions driving sustainable, profitable growth On 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 2022 Outlook includes new 2022 signings, including AAA and NFL, with year-end balances of greater than $2 billion in total 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 interest rate increases Non-interest income year-over-year change is expected to partially offset the
favorability in Net interest income Total non-interest expenses $1,684 million Positive operating leverage Includes a planned incremental strategic investment of more than $125 million in technology modernization, digital advancement,
marketing, and product innovation driving future growth and efficiencies We expect expenses will increase sequentially each quarter throughout 2022 We will manage the pace of investments to align with our full year revenue & growth
outlook Net loss rate 4.6% Low-to-mid 5% range Expect credit metrics to normalize in 2022 off of historically low rates, yet remain below our historical through-the-cycle average of approximately 6.0% 10 ©2022 Bread Financial
Strengthened Financial Resilience Transforming our Company to deliver sustainable, profitable growth with
an expectation to outperform historic loss levels 11 Enhanced credit risk management and underlying credit distribution Improved balance sheet strength and funding mix ©2022 Bread Financial Strong corporategovernance Prudent balance
sheetmanagement Disciplined expense management Proactive risk management Loan loss reserve materially higher Capital ratios significantly improved Increased mix of consumer deposits Diversification across products and partners Prudent and
proactive line management Active recession readiness playbook Enhanced core capabilities Credit mix shift to higher quality Well-established risk appetite metrics Reduced debt levels
Appendix ©2022 Bread Financial | Confidential & Proprietary 12
Average Loans and Credit Sales ($ in billions) Loans continue to inflect higher with strong
year-over-year credit sales growth providing momentum 13 ©2022 Bread Financial
Total Non-Interest Expenses $ in millions +9% Total non-interest expenses were up 12% versus
2Q21 Employee compensation and benefit costs increased 18%, primarily driven by increased salaries, continued digital and technology modernization-related hiring, incentive compensation, and higher volume-related staffing levels Marketing
expenses increased primarily due to increased spending associated with higher sales and brand partner joint marketing campaigns, as well as on expanding our new brand, products and direct to consumer offerings Other expenses decreased primarily
due to lower legal and other business activity costs in the current year -3% 1% 18% 11% 41% 36% (15)% 14 ©2022 Bread Financial +12% -2%
Summary Financial HighlightsContinuing Operations 15 ©2022 Bread Financial ($ in
millions) 2Q22 2Q21 2Q22 vs 1Q22 2Q22 vs YTD ’22 YTD ’21 YTD ’22 vs 2Q21 1Q22 YTD ’21 Credit sales $8,140 $7,401 10% $6,887 18% $15,028 $13,445 12% Average credit card and other
loans $17,003 $15,282 11% $16,650 2% $16,827 $15,533 8% End-of-period credit card and other loans $17,769 $15,724 13% $16,843 6% $17,769 $15,724 13% End-of-period direct-to-consumer
deposits $4,191 $2,398 75% $3,561 18% $4,191 $2,398 75% Return on average assets(1) 0.2% 4.8% (4.6)% 4.0% (3.8)% 2.1% 4.9% (2.8)% Return on average equity(2) 2.2% 56.4% (54.2)% 38.5% (36.3)% 19.9% 61.0% (41.1)% Net
interest margin(3) 18.6% 17.3% 1.3% 19.4% (0.8)% 19.0% 17.5% 1.5% Loan yield(4) 25.0% 23.9% 1.1% 25.6% (0.6)% 25.3% 23.9% 1.4% Efficiency ratio(5) 52.9% 55.5% (2.6)% 46.2% 6.7% 49.5% 52.7% (3.2)% Tangible common equity
/ tangible assets ratio (TCE/TA)(6) 7.5% 6.4% 1.1% 7.8% (0.3)% 7.5% 6.4% 1.1% Tangible book value per common share(7) $31.75 $27.12 17.1% $31.87 (0.4)% $31.75 $27.12 17.1% Cash dividend declared per common
share $0.21 $0.21 —% $0.21 —% $0.42 $0.42 —% 30+ day delinquency rate 4.4% 3.3% 1.1% 4.1% 0.3% 4.4% 3.3% 1.1% Net loss rate(8) 5.6% 5.1% 0.5% 4.8% 0.8% 5.2% 5.0% 0.2% Reserve
rate 11.2% 10.4% 0.8% 10.8% 0.4% 11.2% 10.4% 0.8% (1) Return on average assets represents annualized Income from continuing operations divided by average Total assets. (2) Return on average equity represents annualized Income from
continuing operations divided by average Total stockholders’ equity. (3) Net interest margin represents annualized Net interest income divided by average Total interest-earning assets. (4) Loan yield represents annualized Interest and fees on
loans divided by Average credit card and other loans. (5) Efficiency ratio represents Total non-interest expenses divided by Total net interest and non-interest income. (6) Tangible common equity (TCE) represents Total stockholders’ equity
reduced by Goodwill and intangible assets, net. Tangible assets (TA) represents Total assets reduced by Goodwill and intangible assets, net. TCE/TA is a non-GAAP financial measure. (7) Tangible book value per common share represents TCE divided
by shares outstanding, and is a non-GAAP financial measure. (8) The three and six months ended June 30, 2022 Net loss rates include 30 basis point and 15 basis point increases, respectively, from the effects of the purchase of previously
written-off accounts that were sold to a third-party debt collection agency; this matter remains subject to an ongoing legal dispute with the debt collection agency.
Summary Financial HighlightsContinuing Operations ($ in
millions) 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 YTD ‘21 YTD ’22 Credit sales $4,799 $6,152 $7,657 $6,043 $7,401 $7,380 $8,778 $6,887 $8,140 $13,445 $15,028 Year-over-year
change (36)% (21)% (18)% (1)% 54% 20% 15% 14% 10% 23% 12% Average credit card and other loans $16,116 $15,300 $15,759 $15,785 $15,282 $15,471 $16,086 $16,650 $17,003 $15,533 $16,827 Year-over-year
change (4)% (12)% (13)% (14)% (5)% 1% 2% 5% 11% (10)% 8% End-of-period credit card and other loans $15,809 $15,599 $16,784 $15,537 $15,724 $15,690 $17,399 $16,843 $17,769 $15,724 $17,769 Year-over-year
change (10)% (13)% (14)% (12)% (1)% 1% 4% 8% 13% (1)% 13% End-of-period direct-to-consumer deposits $1,843 $1,707 $1,700 $2,152 $2,398 $3,052 $3,180 $3,561 $4,191 $2,398 $4,191 Year-over-year
change 144% 57% 46% 81% 30% 79% 87% 66% 75% 30% 75% Return on average assets(1) 0.3% 2.1% 1.4% 4.9% 4.8% 3.7% 1.1% 4.0% 0.2% 4.9% 2.1% Return on average
equity(2) 7.0% 37.2% 21.3% 66.3% 56.4% 38.0% 11.1% 38.5% 2.2% 61.0% 19.9% Net interest margin(3) 13.7% 16.1% 17.8% 17.7% 17.3% 18.9% 18.8% 19.4% 18.6% 17.5% 19.0% Loan
yield(4) 21.3% 23.9% 24.1% 23.8% 23.9% 25.6% 25.2% 25.6% 25.0% 23.9% 25.3% Efficiency ratio(5) 60.6% 51.0% 63.4% 50.1% 55.5% 50.6% 50.0% 46.2% 52.9% 52.7% 49.5% Tangible common equity / Tangible assets ratio
(TCE/TA)(6) 3.6% 4.7% 3.7% 5.2% 6.4% 7.2% 6.6% 7.8% 7.5% 6.4% 7.5% Tangible book value per common share(7) $16.99 $20.68 $16.34 $21.32 $27.12 $31.18 $28.09 $31.87 $31.75 $27.12 $31.75 Cash dividend declared per common
share $0.21 $0.21 $0.21 $0.21 $0.21 $0.21 $0.21 $0.21 $0.21 $0.42 $0.42 30+ day delinquency rate 4.3% 4.7% 4.4% 3.8% 3.3% 3.8% 3.9% 4.1% 4.4% 3.3% 4.4% Net loss
rate(8) 7.6% 5.8% 6.0% 5.0% 5.1% 3.9% 4.4% 4.8% 5.6% 5.0% 5.2% Reserve rate 13.3% 13.3% 12.0% 11.9% 10.4% 10.5% 10.5% 10.8% 11.2% 10.4% 11.2% 16 ©2022 Bread Financial (1) Return on average assets represents annualized
Income from continuing operations divided by average Total assets. (2) Return on average equity represents annualized Income from continuing operations divided by average Total stockholders’ equity. (3) Net interest margin represents annualized
Net interest income divided by average Total interest-earning assets. (4) Loan yield represents annualized Interest and fees on loans divided by Average credit card and other loans. (5) Efficiency ratio represents Total non-interest expenses
divided by Total net interest and non-interest income. (6) Tangible common equity (TCE) represents Total stockholders’ equity reduced by Goodwill and intangible assets, net. Tangible assets (TA) represents Total assets reduced by Goodwill and
intangible assets, net. TCE/TA is a non-GAAP financial measure. (7) Tangible book value per common share represents TCE divided by shares outstanding, and is a non-GAAP financial measure. (8) The three and six months ended June 30, 2022 Net
loss rates include 30 basis point and 15 basis point increases, respectively, from the effects of the purchase of previously written-off accounts that were sold to a third-party debt collection agency; this matter remains subject to an ongoing
legal dispute with the debt collection agency.
Financial ResultsContinuing Operations ($ in millions, except per
share) 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 YTD ’21 YTD ‘22 Total interest income $860 $915 $950 $942 $915 $994 $1,017 $1,068 $1,073 $1,857 $2,141 Total interest
expense 127 114 112 107 100 91 84 79 95 207 174 Net interest income 733 801 838 835 815 903 933 989 978 1,650 1,967 Total non-interest
income (28) (47) (69) (33) (51) (52) (78) (68) (85) (84) (153) Revenue 705 754 769 802 764 851 855 921 893 1,566 1,814 Net principal losses 305 223 235 198 194 152 176 199 238 392 438 Reserve
build (release) (55) (16) (82) (165) (208) 9 187 (6) 166 (373) 160 Provision for credit losses 250 207 153 33 (14) 161 363 193 404 19 598 Total non-interest
expenses 427 385 487 402 424 431 427 426 473 826 897 Income before income taxes 28 162 129 367 354 259 65 302 16 721 319 Provision for income taxes 8 47 55 99 91 53 4 91 4 190 95 Ne
income $20 $115 $74 $268 $263 $206 $61 $211 $12 $531 $224 Net income per diluted share $0.41 $2.41 $1.54 $5.38 $5.25 $4.11 $1.21 $4.21 $0.25 $10.63 $4.47 Weighted average shares outstanding – diluted
47.7 47.8 48.4 49.8 50.0 50.0 50.0 50.0 49.9 49.9 50.0 ************************************************************************************************************************************************************************* Pretax
pre-provision earnings (PPNR)* $278 $369 $282 $400 $340 $420 $428 $495 $420 $740 $917 17 ©2022 Bread Financial * Pretax pre-provision earnings is a non-GAAP financial measure.
Net Interest Margin 2Q22 YTD 2022 ($ in millions) Average Balance Interest Income / Expense Average
Yield / Rate Average Balance Interest Income / Expense Average Yield / Rate Cash and investment securities $3,975 $8 0.8% $3,884 $11 0.6% Credit card and other loans 17,003 1,064 25.0% 16,827 2,130 25.3% Total interest-earning
assets 20,978 1,072 20.5% 20,711 2,141 20.7% Direct-to-consumer deposits (retail) 3,865 10 1.1% 3,572 17 0.9% Wholesale deposits 6,994 31 1.8% 7,258 59 1.6% Interest-bearing deposits 10,859 41 1.5% 10,830 76 1.4%
Secured borrowings 5,331 28 2.1% 5,162 48 1.9% Unsecured borrowings 1,978 25 5.1% 1,991 50 5.1% Interest-bearing borrowings 7,309 53 2.9% 7,153 98 2.7% Total interest-bearing
liabilities $18,168 $94 2.1% $17,983 $174 1.9% Net Interest Income $978 $1,967 Net interest margin* 18.6% 19.0% * Net interest margin represents annualized Net interest income divided by average Total interest-earning assets.
18 ©2022 Bread Financial
Capital and Liquidity Banks Combined Capital
Ratios 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Common equity tier 1 capital ratio(2) 18.3% 18.8% 18.4% 21.0% 22.1% 22.6% 20.0% 20.8% 20.1% Tier 1 capital
ratio(3) 18.3% 18.8% 18.4% 21.0% 22.1% 22.6% 20.0% 20.8% 20.1% Total risk-based capital ratio(4) 19.7% 20.1% 19.7% 22.3% 23.4% 23.9% 21.3% 22.1% 21.5% Tier 1 leverage capital
ratio(5) 14.2% 16.1% 17.1% 17.8% 19.2% 19.5% 18.6% 18.2% 17.7% Parent Level: Liquidity as of June 30, 2022, of $0.8 billion, consisting of cash on hand plus revolver capacity Bank Level (Banks Combined): As of June 30, 2022, the
banks finished the quarter with $3.0 billion in cash on hand and $3.3 billion in equity Total risk based capital ratio at 21.5% - over double the 10% threshold to be considered well-capitalized; CET1 at 20.1% Funding in place for expected
growth outlook – with continued long-term strategic focus on retail deposit growth (1) Tangible common equity (TCE) represents Total stockholders’ equity reduced by Goodwill and intangible assets, net. Tangible assets (TA) represents Total
assets reduced by Goodwill and intangible assets, net. TCE/TA is a non-GAAP financial measure. (2) The Common equity tier 1 capital ratio represents common equity tier 1 capital divided by total risk-weighted assets. (3) The Tier 1 capital
ratio represents tier 1 capital divided by total risk-weighted assets. (4) The Total risk-based capital ratio represents total capital divided by total risk-weighted assets. (5) The Tier 1 leverage capital ratio represents tier 1 capital
divided by total assets for leverage ratio. 19 Tangible Common Equity/Tangible Assets Ratio(1) Support Profitable Growth & Growth Investments Efficient Return of Capital to Shareholders Improve Capital Metrics Capital Priorities ©2022
Bread Financial
Financial Results ($ in millions, except per share amounts) 2Q22 2Q21 $ Chg % Chg YTD ’22 YTD
’21 $ Chg % Chg Income from continuing operations, net of taxes $12 $263 $(251) (95) % $224 $531 $(307) (58) % (Loss) income from discontinued operations, net of taxes 0 11 (11) nm (1) 29 (30) nm Net
income $12 $274 $(262) (95) % $223 $560 $(337) (60) % *********************************************************************************************************************************************** Net income per diluted share from
continuing ops $0.25 $5.25 $(5.00) (95) % $4.47 $10.63 $(6.16) (58) % Net (loss) income per diluted share from discontinued ops 0.00 0.22 (0.22) nm (0.01) 0.58 (0.59) nm Net income per diluted
share $0.25 $5.47 $(5.22) (95) % $4.46 $11.21 $(6.75) (60) % Weighted average shares outstanding – diluted (in millions) 49.9 50.0 50.0 49.9 20 ©2022 Bread Financial nm – not meaningful
Reconciliation of GAAP to Non-GAAP Financial Measures 21 ©2022 Bread Financial ($ in
millions) 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 YTD ’21 YTD ‘22 Pretax pre-provision earnings (PPNR) Income before income taxes $28 $162 $129 $367 $354 $259 $65 $302 $16 $721 $319 Provision for credit
losses 250 207 153 33 (14) 161 363 193 404 19 598 Pretax pre-provision earnings (PPNR) $278 $369 $282 $400 $340 $420 $428 $495 $420 $740 $917 Less: Gain on portfolio sales — — — — — (10) — — — — — PPNR less
gain on portfolio sales $278 $369 $282 $400 $340 $410 $428 $495 $420 $740 $917 Tangible common equity (TCE) Total stockholders’ equity $1,155 $1,323 $1,522 $1,764 $2,048 $2,246 $2,086 $2,268 $2,275
$2,048 $2,275 Less: Goodwill and intangible assets, net (345) (336) (710) (704) (699) (694) (686) (682) (694) (699) (694) Tangible common equity (TCE) $810 $987 $812 $1,060 $1,349 $1,552 $1,400
$1,586 $1,581 $1,349 $1,581 Tangible assets (TA) Total assets $22,867 $21,113 $22,547 $21,163 $21,812 $22,2
57 $21,746 $20,938 $21,811 $21,812 $21,811 Less: Goodwill and intangible assets, net (345) (336) (710) (704) (699) (694) (686) (682) (694) (699) (694) Tangible assets (TA) $22,522 $20,777 $21,837 $20,459 $21,113 $21,563 $21,060 $20,256 $21,117 $21,113 $21,117
Exhibit 99.3
 |
 |
Bread Financial, AAA Sign Long-term Agreement to Deliver Reimagined Credit Card
Program
|
•
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Relationship to offer two unique credit card products, extending accessibility of AAA
rewards to a wide range of consumers
|
|
•
|
Bread Financial signs definitive agreement to acquire the existing AAA credit card
portfolio
|
COLUMBUS, Ohio – July 28, 2022 – Bread Financial (NYSE: BFH), a tech-forward financial services company that provides
simple, flexible payment, lending and saving solutions, today announced a new, multi-year agreement with AAA, one of North America’s largest and most trusted membership organizations serving over 56 million U.S. members. Issued and supported
by Bread Financial, participating AAA clubs will offer the AAA Travel Advantage Visa Credit Card and AAA Daily Advantage Visa Credit Card, scheduled to be launched in the fourth quarter of 2022. Each card will offer unique benefits that cater to the
evolving needs of the modern consumer, designed to reward cardholders for a variety of everyday purchases and much more.
"Together, Bread Financial and AAA conducted extensive research to determine the rewards and savings benefits that cardholders want most, and I’m thrilled to
help AAA further meet the needs of many of its members,” said Val Greer, chief commercial officer, Bread Financial. “We are incredibly excited to offer our innovative capabilities, robust data and analytics, multichannel marketing and industry
expertise to help AAA drive top of wallet usage, loyalty and growth.”
Additionally, Bread Financial signed a definitive agreement to acquire the existing AAA credit card portfolio. The transaction is expected to close in early
Q4 2022, subject to customary closing conditions.
"We know that consumers have been hit hard in the wallet with the increased cost of gas and other goods,” said Marshall Doney, president and CEO, AAA. “And we
wanted to find a way to provide some much needed relief – whether at the pump, the grocery store or when planning that next dream vacation. With these two distinct cards, our members will immediately see the rewards start to stack up, especially when
combined with other AAA benefits.”
Established in 1902, AAA is America’s largest membership organization, responding to over 32 million calls for roadside assistance per year. It is also one of
the largest full-service leisure travel organizations in North America, providing a wide range of travel services and discounts as well as a variety of insurance products including auto, home and life.
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.
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 AAA
Started in 1902 by automotive enthusiasts who wanted to chart a path for better roads in America and advocate for safe mobility, AAA has transformed into one
of North America’s largest membership organizations. Today, AAA provides roadside assistance, travel, discounts, financial and insurance services to enhance the life journey of 63 million members across North America, over 56 million in the United
States. To learn more about all AAA offers or become a member, visit AAA.com.
Forward-Looking Statements
This 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, future economic conditions, including, but not limited to, market conditions, persistent inflation, rising interest rates, the
increased probability of a recession and related impacts on consumer behavior, future legislative or regulatory actions that could have impact on our business and results of operations, including any such actions that may be taken with respect to
late fees or other charges, developments in the geopolitical environment, including the war in Ukraine, and the ongoing effects of the global COVID-19 pandemic, all of which factors 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.
Bread Financial
Brian Vereb — Investor Relations
614-528-4516
Brian.Vereb@breadfinancial.com
Shelley Whiddon — Media
214-494-3811
Shelley.Whiddon@breadfinancial.com
Rachel Stultz — Media
614-729-4890
Rachel.Stultz@breadfinancial.com
AAA
Ellen Edmonds – Media
407-444-8011
eedmonds@national.aaa.com
https://newsroom.aaa.com/
Exhibit 99.4
Bread Financial Declares Dividend on Common Stock
COLUMBUS, Ohio – July 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 that its Board of Directors declared a quarterly cash dividend of $0.21 per share on the Company’s common stock, payable
on September 16, 2022 to stockholders of record at the close of business on August 12, 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.
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.
Forward-Looking Statements
This 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, future economic conditions, including, but not limited to, market conditions, persistent inflation, rising interest rates, the increased
probability of a recession and related impacts on consumer behavior, future legislative or regulatory actions that could have impact on our business and results of operations, including any such actions that may be taken with respect to late fees or
other charges, developments in the geopolitical environment, including the war in Ukraine, and the ongoing effects of the global COVID-19 pandemic, all of which factors 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.
###
Bread Financial
Brian Vereb — Investor Relations
614-528-4516
Brian.Vereb@breadfinancial.com
Shelley Whiddon — Media
214-494-3811
Shelley.Whiddon@breadfinancial.com
Rachel Stultz — Media
614-729-4890
Rachel.Stultz@breadfinancial.com
614-528-4516
Brian.Vereb@breadfinancial.com
Shelley Whiddon — Media
214-494-3811
Shelley.Whiddon@breadfinancial.com
Rachel Stultz — Media
614-729-4890
Rachel.Stultz@breadfinancial.com