0001101215-26-000016 | 10-K | XBRL Viewer | Bread Financial Holdings INC

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INVESTMENTS - Investments (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Investments, Debt and Equity Securities [Abstract]
Available-for-sale debt securities	$ 171	$ 170
Equity securities	50	47
Investment securities	221	217
Total investment securities	221	217
Equity method and other investments	63	49
Total Investments	$ 284	$ 266

- Definition

Amount of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

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+ Details

- Definition

Amount of investment in equity security measured at fair value with change in fair value recognized in net income (FV-NI).

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+ Details

- Definition

Fair value portion of investment securities, including, but not limited to, marketable securities, derivative financial instruments, and investments accounted for under the equity method.

+ References + Details

REGULATORY MATTERS AND CAPITAL ADEQUACY

12 Months Ended

Dec. 31, 2025

Regulated Operations [Abstract]

REGULATORY MATTERS AND CAPITAL ADEQUACY

Regulatory Matters

Our business is subject to extensive federal and state laws and regulations, as well as related regulation and supervision, including by the FDIC, CFPB and other federal and state authorities. Pending and future laws and regulations (federal and state) may adversely impact our business. Without limiting the foregoing, CB is subject to various regulatory capital requirements administered by the Delaware Office of the State Bank Commissioner and the FDIC. CCB is also subject to various regulatory capital requirements administered by the Utah Department of Financial Institutions and the FDIC. Failure to meet minimum capital requirements can trigger certain mandatory and possibly additional discretionary actions by our regulators. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, both Banks must meet specific capital guidelines that involve quantitative measures of their assets and liabilities as calculated

under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by these regulators about components, risk weightings and other factors. In addition, both Banks are limited in the amounts they can pay as dividends to the Parent Company.

Quantitative measures, established by regulations to ensure capital adequacy, require the Banks to maintain minimum amounts and ratios of Tier 1 capital to average assets, and Common equity tier 1, Tier 1 capital and Total capital, each to risk weighted assets. Failure to meet these minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions by the Banks’ regulators that if undertaken, could have a direct material effect on CB’s and/or CCB’s operating activities, as well as our operating activities. Based on these regulations, as of December 31, 2025 and 2024, each Bank met all capital requirements to which it was subject, and maintained capital ratios in excess of the minimums required to qualify as well capitalized. The Banks seek to maintain capital levels and ratios in excess of the minimum regulatory requirements inclusive of the 2.5% Capital Conservation Buffer. Although Bread Financial is not a bank holding company as defined under the Bank Holding Company Act, we seek to maintain capital levels and ratios in excess of the minimums required for bank holding companies.

The following table provides the actual capital ratios and minimum ratios for the Company, as well as each Bank, as of December 31:


	Ratio/Dollar Value						Minimum Ratio for Capital Adequacy Purposes *		Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions
(Millions, except percentages)	2025			2024
Total Company
Common equity tier 1 capital ratio (1)	13.0		%	12.4		%	4.5	%	N/A
Tier 1 capital ratio (2)	13.4			12.4			6.0		N/A
Total risk-based capital ratio (3)	16.8			13.8			8.0		N/A
Tier 1 leverage capital ratio (4)	12.4			11.5			4.0		N/A
Total risk-weighted assets (5)	$	19,755		$	19,928

Comenity Bank
Common equity tier 1 capital ratio (1)	15.1		%	16.5		%	4.5	%	6.5	%
Tier 1 capital ratio (2)	15.1			16.5			6.0		8.0
Total risk-based capital ratio (3)	16.5			17.9			8.0		10.0
Tier 1 leverage capital ratio (4)	14.1			15.3			4.0		5.0

Comenity Capital Bank
Common equity tier 1 capital ratio (1)	13.5		%	15.4		%	4.5	%	6.5	%
Tier 1 capital ratio (2)	14.1			15.4			6.0		8.0
Total risk-based capital ratio (3)	17.5			16.7			8.0		10.0
Tier 1 leverage capital ratio (4)	13.2			14.3			4.0		5.0

__________________________________

*The listed capital adequacy ratios exclude the Capital Conservation Buffer.

(1)Common equity tier 1 capital ratio represents tier 1 capital reduced by Preferred stock divided by total risk-weighted assets. In the calculation of tier 1 capital, we follow the Basel III Standardized Approach and therefore Total stockholders’ equity has been reduced by Goodwill and intangible assets, net.

(2)Tier 1 capital ratio represents tier 1 capital divided by total risk-weighted assets. In the calculation of tier 1 capital, we follow the Basel III Standardized Approach and therefore Total stockholders’ equity has been reduced, primarily by Goodwill and intangible assets, net. For us, tier 1 capital is primarily comprised of CET1 capital and Preferred stock.

(3)Total risk-based capital ratio represents total capital divided by total risk-weighted assets. In the calculation of total capital, we follow the Basel III Standardized Approach and therefore tier 1 capital has been increased by tier 2 capital, which for us is

comprised of subordinated notes, as well as the allowable portion of the Allowance for credit losses.

(4)Tier 1 leverage capital ratio represents tier 1 capital divided by total average assets, after certain adjustments.

(5)Total risk-weighted assets are generally measured by allocating assets, and specified off-balance sheet exposures, to various risk categories as defined by the Basel III Standardized Approach.

We are also involved, from time to time, in reviews, investigations, subpoenas, supervisory actions and other proceedings (both formal and informal) by governmental agencies regarding our business, which could subject us to significant fines, penalties, obligations to change our business practices, significant restrictions on our existing business or ability to develop new business, cease-and-desist orders, safety-and-soundness directives or other requirements resulting in increased expenses, diminished income and damage to our reputation.

In November 2023 following the consent of the Board of Managers of Comenity Servicing LLC (the Servicer), the FDIC issued a consent order to the Servicer. The Servicer is not one of our Bank subsidiaries, but is our wholly-owned subsidiary that services substantially all of our loans. The consent order arose out of the June 2022 transition of our credit card processing services to strategic outsourcing partners and addresses certain shortcomings in the Servicer’s information technology (IT) systems development, project management, business continuity management, cloud operations, and third-party oversight. The Servicer entered into the consent order for the purpose of resolving these matters without admitting or denying any violations of law or regulation set forth in the order. The consent order does not contain any monetary penalties or fines.

The Servicer continues to take significant steps to strengthen the organization’s IT governance and address the other issues identified in the consent order, working diligently to ensure that all requirements of the consent order are satisfied. Without limiting the generality of the foregoing, the Servicer has taken steps to address each provision within the consent order and continues to comply with each ongoing requirement. The Servicer is committed to complying with the longer-term requirements of the consent order, including the enhancement of its compliance management processes and related corporate governance, compliance with the applicable system conversion requirements, and enhanced risk management and reporting. The Servicer has submitted all required deliverables under the consent order to the FDIC for its review and consideration. The Board of Managers of the Servicer continues to oversee its compliance with the requirements of the consent order and provide effective challenge to the Servicer’s management toward that end. The Board of Directors of each of the Banks also receives reporting about the Servicer and monitors the Servicer’s compliance with the provisions of the consent order.

On December 17, 2025, we filed applications with the federal and respective state banking regulators for permission to merge CB with and into CCB, with CCB being the surviving entity. Pending regulatory approval and the expiration of any applicable waiting periods, the merger of CB and CCB is expected to occur in the second half of 2026. The merger is not expected to have a significant impact on our consolidated financial position, results of operations, or liquidity.

CREDIT CARD AND OTHER LOANS

12 Months Ended

Dec. 31, 2025

Receivables [Abstract]

CREDIT CARD AND OTHER LOANS

Our payment and lending solutions result in the origination of Credit card and other loans, which are recorded at the time a borrower enters into a point-of-sale transaction with a merchant. Credit card loans represent revolving lines of credit and have a range of terms that include credit limits, interest rates and fees, which can be revised over time based on new

information about the cardholder, in accordance with applicable regulations and the governing terms and conditions. Cardholders choosing to make a payment of less than the full balance due, instead of paying in full, are subject to finance charges and are required to make monthly payments based on pre-established amounts. Other loans, which consist primarily of our pay-over-time products, which include installment loans and “split-pay” offerings, have a range of fixed terms such as interest rates, fees and repayment periods, and borrowers are required to make pre-established monthly payments over the term of the loan in accordance with the applicable terms and conditions. Credit card and other loans include principal and any related accrued interest and fees and are presented on the Consolidated Balance Sheets net of the Allowance for credit losses. We continue to accrue interest and fee income on all accounts, except in limited circumstances, until the related balance and all related interest and fees are paid or charged-off.

We generally classify our Credit card and other loans as held for investment. We sell a majority of our credit card loans originated by Comenity Bank (CB) and by Comenity Capital Bank (CCB), to certain of our master securitization trusts (the Trusts), which are consolidated VIEs, and therefore these loans are restricted for securitization investors. All new originations of Credit card and other loans are determined to be held for investment at origination because we have the intent and ability to hold them for the foreseeable future. In determining what constitutes the foreseeable future, we consider the average life and homogenous nature of our Credit card and other loans. In assessing whether our Credit card and other loans continue to be held for investment, we also consider capital levels and scheduled maturities of funding instruments used. The assertion regarding the intent and ability to hold Credit card and other loans for the foreseeable future can be made with a high degree of certainty given the maturity distribution of our direct-to-consumer (DTC or retail) deposits and other funding instruments; the demonstrated ability to replace maturing time-based deposits and other borrowings with new deposits or borrowings; and historic payment activity on Credit card and other loans. Due to the homogenous nature of our credit card loans, amounts are classified as held for investment on a brand partner portfolio basis. From time to time certain credit card loans are classified as held for sale, as determined on a brand partner portfolio basis. We carry held for sale loans at the lower of aggregate cost or fair value and continue to recognize finance charges on an accrual basis. Cash flows associated with Credit card and other loans originated or purchased for investment are classified as Cash flows from investing activities, regardless of any subsequent change in intent and ability.

The following table provides Credit card and other loans, as of December 31:


	2025		2024
(Millions)
Credit card loans	$	18,417	$	18,586
Other loans	388		310
Total credit card and other loans (1)(2)	18,805		18,896
Less: Allowance for credit losses	(2,106)		(2,241)
Credit card and other loans, net	$	16,699	$	16,655

__________________________________

(1)Includes $10.7 billion and $12.4 billion of Credit card and other loans available to settle obligations of consolidated VIEs as of December 31, 2025 and 2024, respectively.

(2)Includes $378 million of accrued interest and fees that have not yet been billed to cardholders as of both December 31, 2025 and 2024.

Credit Card and Other Loans Aging

The following table provides the delinquency trends of our Credit card and other loans portfolio, based on the amortized cost, as of the dates presented:


	Aging Analysis of Delinquent Amortized Cost Credit Card and Other Loans (1)
	31 to 60 Days Past Due		61 to 90 Days Past Due		91 or more Days Past Due		Total		Total Current		Total
(Millions)
December 31, 2025	$	359	$	282	$	676	$	1,317	$	17,076	$	18,393

December 31, 2024	$	369	$	288	$	730	$	1,387	$	17,105	$	18,492

______________________________

(1)Other loans delinquencies have been included with credit card loan delinquencies in the table above, as amounts were insignificant as of each period presented. As permitted by GAAP, the primary difference between the amortized cost basis included in the table above and the carrying value of our Credit card and other loans relates to the exclusion of unbilled finance charges and fees from the amortized cost basis. For both December 31, 2025 and 2024, accrued interest and fees that have not yet been billed to cardholders were $378 million, and included in Credit card and other loans on the Consolidated Balance Sheets.

From time to time we may re-age cardholders’ accounts, with the intent of assisting delinquent cardholders who have experienced financial difficulties but who demonstrate both an ability and willingness to repay the amounts due. This practice affects credit card loan delinquencies and principal losses. Accounts meeting specific defined criteria are re-aged when the cardholder makes one or more consecutive payments aggregating to a certain pre-defined amount of their account balance. Upon re-aging, the outstanding balance of a delinquent account is returned to current status. Our re-aged accounts as a percentage of Total credit card and other loans represented 3.0%, 4.1% and 2.6%, for the years ended December 31, 2025, 2024, and 2023 respectively. Our re-aging practices comply with regulatory guidelines.

Credit Quality Indicators for Our Credit Card and Other Loans

Given the nature of our business, the credit quality of our assets, in particular our Credit card and other loans, is a key determinant underlying our ongoing financial performance and overall financial condition. When it comes to our Credit card and other loans portfolio, we closely monitor Delinquency rates and Net principal loss rates, which reflect, among other factors, our underwriting, the inherent credit risk in our portfolio and the success of our collection and recovery efforts. These rates also reflect, more broadly, the general macroeconomic conditions, including the compounding effect of persistent inflation relative to wage growth, and higher interest rates. Our Delinquency and Net principal loss rates are also impacted by the size of our Credit card and other loans portfolio, which serves as the denominator in the calculation of these rates. Accordingly, changes in the size of our portfolio (whether due to credit tightening, acquisitions or dispositions of portfolios, or otherwise) may cause movements in our Delinquency and Net principal loss rates that are not necessarily indicative of the underlying credit quality of the overall portfolio.

Delinquencies: An account is contractually delinquent if we do not receive the minimum payment due by the specified due date. Our policy is to continue to accrue interest and fee income on all accounts, except in limited circumstances, until the balance and all related interest and fees are paid or charged-off. After an account becomes 30 days past due, a proprietary collection scoring algorithm automatically scores the risk of the account becoming further delinquent; based upon the level of risk indicated, a collection strategy is deployed, which may include tech-enabled, targeted collections strategies to engage with cardholders in the most efficient communication channel. If after exhausting all in-house collection efforts we are unable to collect on the account, we may engage collection agencies or outside attorneys to continue those efforts, or sell the charged-off balances.

The Delinquency rate is calculated by dividing outstanding principal balances that are contractually delinquent (i.e., principal balances greater than 30 days past due) as of the end of the period, by the outstanding principal amount of Credit card and other loans as of the same period-end. As of December 31, 2025 and 2024, our Delinquency rates were 5.8% and 5.9%, respectively.

Net Principal Losses: Our net principal losses include the principal amount of Credit card and other loans that are deemed uncollectible, less recoveries, and exclude charged-off interest, fees and third-party fraud losses (including synthetic fraud).

Charged-off interest and fees reduce Interest and fees on loans, while third-party fraud losses are recorded in Card and processing expenses. Our credit card loans, including unpaid interest and fees, are generally charged-off in the month during which an account becomes 180 days past due. Our pay-over-time products, which include installment loans and “split-pay” offerings, including unpaid interest, are generally charged-off when a loan becomes 120 days past due. However, in the case of a customer bankruptcy or death, Credit card and other loans, including unpaid interest and fees, as applicable, are charged-off 60 days after receipt of the notification of the bankruptcy or death, but in any case no later than 180 days past due for credit card loans and 120 days past due for installment loans and “split-pay” offerings. We record the actual losses for unpaid interest and fees as a reduction to Interest and fees on loans, which were $924 million, $1,027 million and $954 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The Net principal loss rate is calculated by dividing net principal losses for the period by the Average credit card and other loans for the same period. Beginning in January 2024, we revised the calculation of Average credit card and other loans to more closely align with industry practice by incorporating an average daily balance. Prior to 2024, Average credit card and other loans represent the average balance of the loans at the beginning and end of each month, averaged over the periods indicated. For the years ended December 31, 2025, 2024 and 2023, our Net principal loss rates were 7.7%, 8.2%, and 7.5%, respectively.

Overall Credit Quality: As part of our credit risk management activities for our credit card loans portfolio, we assess overall credit quality by reviewing information from credit bureaus and other sources relating to our cardholders’ broader credit performance. We utilize VantageScore (Vantage) credit scores to assist in our assessment of credit quality. Vantage credit scores are obtained at origination of the account and are refreshed monthly thereafter to assist in predicting customer behavior. We categorize these Vantage credit scores into the following three credit score categories: (i) 661 or higher, which are considered the strongest credits and therefore have the lowest credit risk; (ii) 601 to 660, considered to have moderate credit risk; and (iii) 600 or less, which are considered weaker credits and therefore have the highest credit risk. In certain limited circumstances there are customer accounts for which a Vantage score is not available and we use alternative sources to assess credit risk and predict behavior. The table below excludes less than 0.1% of the total credit card loans balance as of both December 31, 2025 and 2024, representing those customer accounts for which a Vantage credit score is not available. The following table reflects the distribution of credit card loans by Vantage score as of December 31:


	Vantage
	2025						2024
	661 or Higher		601 to 660		600 or Less		661 or Higher		601 to 660		600 or Less
Credit card loans	59	%	27	%	14	%	58	%	27	%	15	%

As part of our credit risk management activities for our Other loans portfolio, we also assess overall credit quality by reviewing information from credit bureaus. We have historically utilized Fair Isaac Corporation (FICO) credit scores to assist in our assessment of the credit quality for our Other loans portfolio, but in early 2024 we completed a transition to Vantage scoring. The scoring scale produced by both FICO and Vantage is similar in that scores of 600 or less are considered weaker scores and as per our categorization method would have the highest credit risk. The amortized cost basis of Other loans totaled $365 million and $298 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025, approximately 88% of these loans were originated with customers with scores of 661 or above, and correspondingly approximately 12% of these loans were originated with customers with scores below 661. Similarly, as of December 31, 2024, approximately 84% and 16% of these loans were originated with customers with Vantage scores of 661 or above, and below 661, respectively.

Modified Credit Card Loans

Consumer Relief Programs

As part of our collections strategy, we may offer temporary and short term programs in order to improve the likelihood of collections and meet the needs of our customers. For example, as a result of hurricanes Helene and Milton in September and October of 2024, respectively, we froze delinquency progression for cardholders in Federal Emergency Management Agency identified impact zones for one billing cycle. Our modifications, for customers who have requested assistance and meet certain qualifying requirements, come in the form of reduced payment requirements, interest rate reductions and late fee waivers. We do not offer programs involving the forgiveness of principal. These temporary loan modifications may assist in cases where we believe the customer will recover from the short-term hardship and resume scheduled payments.

Under these consumer relief programs, those accounts receiving relief may not advance to the next delinquency cycle, including charge-off, in the same time frame that would have occurred had the relief not been granted. We evaluate our consumer relief programs to determine if they represent a more than insignificant delay in payment granted to borrowers experiencing financial difficulty, in which case they would then be considered a Loan Modification. Loans in these short term programs that are determined to be Loan Modifications, will be included as such in the disclosure below.

Credit Card Loans – Modifications for Borrowers Experiencing Financial Difficulty (Loan Modifications)

In instances where cardholders are experiencing financial difficulty, we may modify our credit card loans with the intention of minimizing losses and improving collectability, while providing cardholders with financial relief; such credit card loans are classified as Loan Modifications, exclusive of the temporary, short-term consumer relief programs described above. Loan Modifications include concessions consisting primarily of a reduced minimum payment, late fee waiver, and/or an interest rate reduction. The majority of concessions remain in place for a period no longer than 12 months; however, for certain modifications the concessions remain in place through the payoff of the credit card loans if the cardholder complies with the terms of the program.

Loan Modification concessions do not include the forgiveness of unpaid principal, but may involve the reversal of certain unpaid interest or fee assessments, and the cardholder’s ability to make future purchases is either limited, or suspended until the cardholder successfully exits from the modification program. In accordance with the terms of our workout programs, the credit agreement reverts back to its original contractual terms (including the contractual interest rate) when the customer exits the program, which is either when all payments have been made in accordance with the program, or when the customer defaults out of the program.

Loan Modifications are collectively evaluated for impairment on a pooled basis in measuring the appropriate Allowance for credit losses. The following table provides information relating to credit card loans to borrowers experiencing financial difficulty that were granted a concession under a Loan Modification program during the years ended December 31:


	2025			2024			2023
(Millions, except percentages)
Account balance (1)	$	325		$	303		$	269
% of Total credit card loans	1.8		%	1.7		%	1.4		%
Weighted average interest rate reduction (% points)	23.5		%	22.0		%	19.2		%

__________________________________

(1)Represents the outstanding balances as of December 31, 2025, 2024 and 2023 of all Loan Modifications undertaken in the past twelve months, for credit card loans that remain in modification programs on December 31, 2025, 2024 and 2023, respectively. The outstanding balances include principal, accrued interest and fees.

Interest income on these impaired credit card loans is accounted for in the same manner as non-impaired credit card loans, and cash collections are allocated according to the same payment hierarchy methodology applied for credit card loans not in Loan Modification programs.

The following table provides the performance of our credit card loans that were modified within the 12 months prior to the dates presented and remain in a Loan Modification program as of the dates presented:


	Aging Analysis of Delinquent Amortized Cost Loan Modifications – Credit Card Loans
	31 to 60 Days Past Due		61 to 90 Days Past Due		91 or more Days Past Due		Total		Total Current		Total
(Millions)
December 31, 2025	$	24	$	22	$	26	$	72	$	253	$	325

December 31, 2024	$	21	$	18	$	22	$	61	$	242	$	303

The following table provides additional information regarding credit card Loan Modifications that have subsequently defaulted within 12 months of their modification dates for the years ended December 31; the probability of default is factored into the Allowance for credit losses:


	2025		2024		2023
(Millions, except for Number of modifications)
Number of modifications	14,196		15,663		14,196
Outstanding balance	$	29	$	29	$	23

Unfunded Lending Commitments

We manage potential credit risk in unfunded lending commitments by reviewing each potential customer’s credit application and evaluating the applicant’s financial history and ability and perceived willingness to repay. Credit card loans are made primarily on an unsecured basis, and our Cardholders reside throughout the U.S. and are not significantly concentrated in any one geographic area.

We manage our potential risk in credit commitments by limiting the total amount of credit, both by individual customer and across our credit card loan portfolio, by monitoring the size and maturity of our loan portfolio and applying consistent risk-based underwriting standards reflective of current and anticipated macroeconomic conditions. We have the unilateral ability to cancel or reduce unused credit card lines at any time. Unused credit card lines available to cardholders totaled approximately $98 billion and $103 billion as of December 31, 2025 and 2024, respectively. While this amount represented the total available unused credit card lines, we have not experienced and do not anticipate that all cardholders will access their entire available line at any given point in time.

Portfolio Sales

As of December 31, 2025 and 2024, there were no credit card loans held for sale.

During the year ended December 31, 2025, we did not sell any credit card loan portfolios.

In late April 2024 we sold a credit card loan portfolio for cash consideration of $102 million. We recognized a gain on sale in April 2024 that was subsequently adjusted during the second half of 2024, and again one final time during the first half of 2025, to recognize an incremental amount due under the purchase and sale agreement.

We previously announced the non-renewal of our contract with BJ’s Wholesale Club (BJ’s) and the sale of the BJ’s portfolio, which closed in late February 2023, for a total purchase price of $2.5 billion on a loan portfolio of $2.3 billion, resulting in a $230 million Gain on portfolio sale.

Portfolio Acquisitions

During the year ended December 31, 2025, we did not acquire any credit card loan portfolios.

In August 2024, we acquired a credit card loan portfolio for cash consideration of approximately $378 million.

CREDIT CARD AND OTHER LOANS - Aging Analysis (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	$ 325	$ 303
Total
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	72	61
31 to 60 Days Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	24	21
61 to 90 Days Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	22	18
91 or more Days Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	26	22
Total Current
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	$ 253	$ 242

Cover Page - USD ($) $ in Billions	12 Months Ended
Cover Page - USD ($) $ in Billions	Dec. 31, 2025	Feb. 06, 2026	Jun. 30, 2025
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2025
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-15749
Entity Registrant Name	BREAD FINANCIAL HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	31-1429215
Entity Address, Address Line One	3095 Loyalty Circle
Entity Address, City or Town	Columbus
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43219
City Area Code	614
Local Phone Number	729-4000
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction Flag	false
Entity Shell Company	false
Entity Public Float			$ 2.7
Entity Common Stock, Shares Outstanding		43,115,116
Documents Incorporated by Reference	Certain information called for by Part III is incorporated by reference to certain sections of the Proxy Statement for the 2026 Annual Meeting of our stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2025.
Entity Central Index Key	0001101215
Document Fiscal Year Focus	2025
Document Fiscal Period Focus	FY
Amendment Flag	false
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	BFH
Security Exchange Name	NYSE
Series A 8.625% Non-Cumulative Perpetual Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Depository Shares, Each Representing a 1/40th Interest in a Share of 8.625% Non-Cumulative Perpetual Preferred Stock, Series A
Trading Symbol	BFH PrA
Security Exchange Name	NYSE

PREFERRED STOCK AND COMMON STOCK - Preferred Stock (Details) $ / shares in Units, $ in Millions	1 Months Ended	12 Months Ended
	Nov. 30, 2025 USD ($) $ / shares shares	Dec. 31, 2025 USD ($) $ / shares shares	Dec. 31, 2024 USD ($) $ / shares shares	Dec. 31, 2023 USD ($)
Debt Instrument [Line Items]
Preferred stock, issued (in shares) \| shares		75,000.0	0
Preferred stock, authorized (in shares) \| shares		75,000.0	75,000.0
Net proceeds from the issuance of preferred stock \| $		$ 71	$ 0	$ 0
Preferred stock, par or stated value per share \| $ / shares		$ 0.01	$ 0.01
Preferred stock, liquidation preference, value \| $		$ 75
Series A Preferred Stock
Debt Instrument [Line Items]
Preferred stock, issued (in shares) \| shares	75,000
Preferred stock, authorized (in shares) \| shares	75,000
Net proceeds from the issuance of preferred stock \| $	$ 75
Preferred stock, dividend rate, percentage	8.625%
Preferred stock, par or stated value per share \| $ / shares	$ 0.01
Preferred stock, liquidation preference (in per share) \| $ / shares	$ 1,000
Series A 8.625% Non-Cumulative Perpetual Preferred Stock
Debt Instrument [Line Items]
Preferred stock, convertible, conversion ratio	0.025
Preferred stock, liquidation preference (in per share) \| $ / shares	$ 25

DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2025

Other Liabilities Disclosure [Abstract]

Schedule of Deposit by Type

Deposits were categorized as interest-bearing or non-interest-bearing as follows, as of December 31:


	2025		2024
(Millions)
Interest-bearing	$	13,891	$	13,055
Non-interest-bearing (including cardholder credit balances)	25		27
Total deposits	$	13,916	$	13,082

Deposits by deposit type were as follows as of December 31:


	2025		2024
(Millions)
Savings accounts
Direct-to-consumer (retail)	$	4,329	$	3,226
Wholesale	3,371		3,601
Certificates of deposit
Direct-to-consumer (retail)	4,193		4,461
Wholesale	1,998		1,767
Cardholder credit balances	25		27
Total deposits	$	13,916	$	13,082

Schedule of Time Deposit Maturities

The scheduled maturities of certificates of deposit were as follows as of December 31, 2025:


(Millions)
2026 (1)	$	4,420
2027	1,295
2028	366
2029	59
2030	51
Thereafter	—
Total certificates of deposit	$	6,191

______________________________

(1)The 2026 balance includes $4 million in unamortized debt issuance costs, which are associated with the entire portfolio of certificates of deposit.

- Definition

Tabular disclosure of type of deposit liability.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph e
-Publisher SEC

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph d
-Publisher SEC

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph c
-Publisher SEC

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph a
-Subparagraph (5)
-Publisher SEC

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph a
-Subparagraph (4)
-Publisher SEC

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph a
-Subparagraph (3)
-Publisher SEC

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph a
-Subparagraph (2)
-Publisher SEC

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph a
-Subparagraph (1)
-Publisher SEC

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph a
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Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
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-Number 229
-Section 1406
-Paragraph f
-Subparagraph (1)
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Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
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Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
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-Section 1406
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Reference 14: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph f
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Reference 15: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph f
-Subparagraph (2)(ii)
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+ Details

CREDIT CARD AND OTHER LOANS - Credit Cards (Details) - Credit Card Loans - Contractual Interest Rate Reduction - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Financing Receivable, Troubled Debt Restructuring [Line Items]
Account Balances	$ 325	$ 303	$ 269
% of Total credit card loans	1.80%	1.70%	1.40%
Weighted average interest rate reduction (% points)	23.50%	22.00%	19.20%

FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair Value Level Disclosure (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Assets disclosed at fair value
Investment securities	$ 221	$ 217
Total assets measured at fair value	221	217
Level 1
Assets disclosed at fair value
Investment securities	50	47
Total assets measured at fair value	50	47
Level 2
Assets disclosed at fair value
Investment securities	171	170
Total assets measured at fair value	171	170
Level 3
Assets disclosed at fair value
Investment securities	0	0
Total assets measured at fair value	$ 0	$ 0

- Definition

Fair value portion of investment securities, including, but not limited to, marketable securities, derivative financial instruments, and investments accounted for under the equity method.

+ References + Details

INVESTMENTS - Amortized Cost (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Investments, Debt and Equity Securities [Abstract]
Amortized Cost	$ 189	$ 195
Unrealized Gains	0	0
Unrealized Losses	(18)	(25)
Fair Value	$ 171	$ 170

- Definition

Amount of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

+ Details

OTHER ASSETS (Tables)

12 Months Ended

Dec. 31, 2025

Other Assets [Abstract]

Schedule of Other Assets

The following provides a summary of Other assets as of December 31:


	2025		2024
(Millions)
Deferred tax asset, net	$	616	$	708
Deferred contract costs (1)	205		228
Accounts receivable, net (2)	148		145
Right-of-use assets – operating leases	63		87
Restricted cash (3)	24		35

Other (4)	187		200
Total other assets	$	1,243	$	1,403

______________________________

(1)See Note 1, “Description of Business, Basis of Presentation and Significant Accounting Policies” for a discussion of impairment of certain deferred contract costs.

(2)Primarily related to federal, state and foreign income tax receivables (including a tax-related receivable in the amount of approximately $50 million, net, which we are entitled to receive through LVI), and amounts receivable from various brand partners.

(3)Restricted cash primarily includes cash restricted for principal and interest repayments of debt issued by our consolidated VIEs, as well as other restricted amounts including cash pledged to collateralize our derivative contracts.

(4)Primarily comprised of prepaid expenses and non-income-based tax receivables.

PARENT COMPANY FINANCIAL STATEMENTS - Narrative (Details) $ in Millions	Dec. 31, 2023 USD ($)
Bread Financial Payments, Inc.
Condensed Balance Sheet Statements, Captions [Line Items]
Equity method investment	$ 318

INVESTMENTS - Narrative (Details) - USD ($)	12 Months Ended
INVESTMENTS - Narrative (Details) - USD ($)	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Debt Securities, Available-for-Sale [Line Items]
AFS Allowance for credit losses	$ 0	$ 0
Gains or losses from the sale of AFS securities	0	$ 0	$ 0
Collateralized Mortgage-Backed Securities
Debt Securities, Available-for-Sale [Line Items]
Available-for-sale, mortgage-backed securities with no stated maturities, amortized cost	158,000,000
Available-for-sale, mortgage-backed securities with no stated maturities, fair value	$ 143,000,000
Weighted average yield (as a percent)	3.21%
Municipal Bonds
Debt Securities, Available-for-Sale [Line Items]
Weighted average yield (as a percent)		3.86%
Available-for-sale, mortgage-backed securities with stated maturities - greater than ten years, amortized cost	$ 31,000,000
Available-for-sale, mortgage-backed securities with stated maturities - greater than ten years, fair value	$ 28,000,000

SECURITIZATIONS

12 Months Ended

Dec. 31, 2025

Offsetting [Abstract]

SECURITIZATIONS

We account for transfers of financial assets as either sales or financings. Transfers of financial assets that are accounted for as a sale are removed from the Consolidated Balance Sheets with any realized gain or loss reflected in the Consolidated Statements of Income during the period in which the sale occurs. Transfers of financial assets that are not accounted for as a sale are treated as a financing.

We regularly securitize the majority of our credit card loans through the transfer of those loans to one of our Trusts. We perform the decision making for the Trusts, as well as servicing the cardholder accounts that generate the credit card loans held by the Trusts. In our capacity as a servicer, we administer the loans, collect payments and charge-off uncollectible balances. Servicing fees are earned by a subsidiary, which are eliminated in consolidation.

The Trusts are consolidated VIEs because they have insufficient equity at risk to finance their activities – the issuance of debt securities and notes, collateralized by the underlying credit card loans. Because we perform the decision making and servicing for the Trusts, we have the power to direct the activities that most significantly impact the Trusts’ economic performance (the collection of the underlying credit card loans). In addition, we hold all of the variable interests in the Trusts, with the exception of the liabilities held by third-parties. These variable interests provide us with the right to receive benefits and the obligation to absorb losses, which could be significant to the Trusts. As a result of these considerations, we are deemed to be the primary beneficiary of the Trusts and therefore consolidate the Trusts.

The Trusts issue debt securities and notes, which are non-recourse to us. The collections on the securitized credit card loans held by the Trusts are available only for payment of those debt securities and notes, or other obligations arising in the securitization transactions. For our securitized credit card loans, during the initial phase of a securitization reinvestment period, we generally retain principal collections in exchange for the transfer of additional credit card loans into the securitized pool of assets. During the amortization or accumulation period of a securitization, the investors’ share of principal collections (in certain cases, up to a maximum specified amount each month) is either distributed to the investors or held in an account until it accumulates to the total amount due, at which time it is paid to the investors in a lump sum.

Under the Indentures of each Trust and their Indenture Supplements, we are required to maintain minimum interests in our Trusts ranging from 4% to 10% of the securitized credit card loans. This requirement is met through a transferor’s interest and is supplemented through excess funding deposits which represent cash amounts deposited with the trustee of the securitizations. Cash collateral, restricted deposits are generally released proportionately as investors are repaid. Under the terms of the Trusts, the occurrence of certain triggering events associated with the performance of the securitized credit card loans in each Trust could result in certain required actions, including payment of Trust expenses, the establishment of reserve funds, or early amortization of the debt securities and/or notes, in a worst-case scenario. During the years ended December 31, 2025, 2024 and 2023, no such triggering events occurred.

The following tables provide the total securitized credit card loans, and related delinquencies, and net principal losses of securitized credit card loans for the periods presented:


	December 31, 2025		December 31, 2024
(Millions)
Total credit card loans – available to settle obligations of consolidated VIEs	$	10,708	$	12,408
Of which: principal amount of credit card loans 91 days or more past due	$	257	$	305


	Year Ended December 31, 2025		Year Ended December 31, 2024		Year Ended December 31, 2023
(Millions)
Net principal losses of securitized credit card loans	$	786	$	852	$	801

DEPOSITS - Deposits by Type (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Deposit Liability [Line Items]
Certificates of deposit	$ 6,191
Cardholder credit balances	25	$ 27
Total deposits	13,916	13,082
Direct-to-consumer (retail)
Deposit Liability [Line Items]
Savings accounts	4,329	3,226
Certificates of deposit	4,193	4,461
Wholesale
Deposit Liability [Line Items]
Savings accounts	3,371	3,601
Certificates of deposit	1,998	1,767
Cardholder credit balances
Deposit Liability [Line Items]
Cardholder credit balances	$ 25	$ 27

OTHER ASSETS

12 Months Ended

Dec. 31, 2025

Other Assets [Abstract]

OTHER ASSETS

The following provides a summary of Other assets as of December 31:


	2025		2024
(Millions)
Deferred tax asset, net	$	616	$	708
Deferred contract costs (1)	205		228
Accounts receivable, net (2)	148		145
Right-of-use assets – operating leases	63		87
Restricted cash (3)	24		35

Other (4)	187		200
Total other assets	$	1,243	$	1,403

______________________________

(1)See Note 1, “Description of Business, Basis of Presentation and Significant Accounting Policies” for a discussion of impairment of certain deferred contract costs.

(4)Primarily comprised of prepaid expenses and non-income-based tax receivables.

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2025

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

We are a tech-forward financial services company that provides simple, personalized payment, lending, and saving solutions to millions of U.S. consumers. Our payment solutions, including Bread Financial general purpose credit cards and savings products, empower our customers and their passions for a better life. Additionally, we deliver growth for some of the most recognized brands in travel and entertainment, health and beauty, jewelry and specialty apparel through our private label and co-brand credit cards and pay-over-time products providing choice and value to our shared customers.

We have continued to diversify our product mix with our brand partners through growth of our co-brand credit card programs, which, relative to our private label credit card programs, have higher credit sales per account and an improved credit risk mix that generally results in higher transactor balances, lower delinquencies and late fees, as well as lower losses. We also offer our proprietary credit cards along with the expansion of our Bread Pay products, which are our installment loans and “split-pay” offerings.

Our partner base consists of large consumer-based businesses, including well-known brands such as (alphabetically) AAA, Academy Sports + Outdoors, Caesars, Dell Technologies, Hard Rock International, the NFL, Raymour & Flanigan, Saks Fifth Avenue, Signet, Ulta and Victoria’s Secret, as well as small- and medium-sized businesses (SMBs). Our partner base is well diversified across a broad range of industries and retail verticals, including travel and entertainment, specialty apparel, health and beauty, jewelry, sporting goods, technology and electronics, as well as home and furniture. We believe our comprehensive suite of payment, lending and saving solutions, along with our related marketing and data and analytics, allows us to offer products relevant across all customer segments (Gen Z, Millennial, Gen X and Baby Boomers). The breadth and quality of our product and service offerings, coupled with our customer-centric approach, have enabled us to establish and maintain long-standing partner relationships. We operate our business through a single reportable segment, with our primary source of revenue being from Interest and fees on loans from our various credit card and other loan products, and to a lesser extent from contractual relationships with our brand partners.

Throughout this report, unless stated or the context implies otherwise, the terms “Bread Financial”, “BFH”, the “Company”, “we”, “our” or “us” refer to Bread Financial Holdings, Inc. and its subsidiaries on a consolidated basis. References to “Parent Company” refer to Bread Financial Holdings, Inc. on a parent-only standalone basis. In addition, in this report we may refer to the retailers and other companies with whom we do business as our “partners”, “brand partners”, or “clients”, provided that the use of the term “partner”, “partnering” or any similar term does not mean or imply a formal legal partnership, and is not meant in any way to alter the terms of Bread Financial’s relationship with any third parties. We offer our credit products through our insured depository institution subsidiaries, Comenity Bank and Comenity Capital Bank, which together are referred to herein as the “Banks.”

BASIS OF PRESENTATION

These audited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The audited Consolidated Financial Statements also include amounts that relate to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. Such amounts have been classified within Discontinued operations and primarily relate to the after-tax impact of contractual indemnification and tax-related matters. For additional information about our previously disclosed discontinued operations please refer to Note 22, “Discontinued Operations and Bank Holding Company Financial Presentation” to the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.

SIGNIFICANT ACCOUNTING POLICIES

We present our accounting policies within the Notes to the audited Consolidated Financial Statements to which they relate; the table below lists such accounting policies and the related Notes. The remaining significant accounting policies applied are included following the table.

Significant Accounting Policy

Note Number

Note Title

Credit Card and Other Loans

Note 2

Credit Card and Other Loans

Allowance for Credit Losses

Note 3

Allowance for Credit Losses

Transfers of Financial Assets

Note 4

Securitizations

Investments

Note 5

Investments

Goodwill

Note 6

Goodwill and Intangible Assets, Net

Intangible Assets, Net

Note 6

Goodwill and Intangible Assets, Net

Stock-Based Compensation Expense

Note 14

Stock-Based Compensation

Income Taxes

Note 17

Income Taxes

Earnings Per Share

Note 18

Earnings Per Share

Principles of Consolidation

The accompanying audited Consolidated Financial Statements include the accounts of BFH and all subsidiaries in which we have a controlling financial interest. For voting interest entities, a controlling financial interest is determined when we are able to exercise control over the operating and financial decisions of the investee. For variable interest entities (VIEs), which are themselves determined based on the amount and characteristics of the equity in the entity, we have a controlling financial interest when we are determined to be the primary beneficiary. The primary beneficiary is the party having both (i) the power to exercise control over the activities that most significantly impact the VIE’s financial performance, as well as (ii) the obligation to absorb the losses of, or the right to receive the benefits from, the VIE that could potentially be significant to that VIE. We are the primary beneficiary of our master securitization trusts and therefore consolidate these securitization trusts within our audited Consolidated Financial Statements.

In cases where we do not have a controlling financial interest, but we are able to exert significant influence over the operating and financial decisions of the investee, we account for such investments under the equity method.

All intercompany transactions have been eliminated.

Segment Reporting

We operate as a single reportable segment, where we manage our business and assess financial performance on a consolidated basis. Our single reportable segment’s primary source of revenue is from Interest and fees on loans from our various credit card and other loan products, and to a lesser extent from contractual relationships with our brand partners. Our primary expense is Provision for credit losses driven by Net principal losses from our various credit card and other loan products. Our key financial metrics include the growth in and yield on our Credit card and other loans, Net interest margin, operating leverage and Efficiency ratio, our various capital ratios, Return on average tangible common equity, and credit-related ratios such as our Delinquency rate, Net principal loss rate and Reserve rate. Our Chief Operating Decision Maker (CODM) regularly receives and reviews consolidated operating results and uses our key financial metrics to evaluate the performance of the Company, focusing primarily on Income from continuing operations before income taxes from the Consolidated Statements of Income, to make decisions regarding the allocation of resources and assessment of performance. The function of CODM is performed by our President and Chief Executive Officer.

Amounts Based on Estimates and Judgments

The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments about future events that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities as of the date of the audited Consolidated Financial Statements, as well as the reported amounts of income and

expenses during the reporting periods. The most significant of those estimates and judgments relate to our Allowance for credit losses and Goodwill; actual results could differ.

Consolidated Statements of Income

We recognize revenue when obligations under the terms of a contract with a customer are satisfied. Payments made pursuant to contractual arrangements with our brand partners or other customers are classified as contra-revenue, except where we receive goods, services or other benefits for which the fair value is determinable and measurable, in which case they are recorded as expense. Our primary source of revenue is from Interest and fees on loans from our various credit card and other loan products, and to a lesser extent from contractual relationships with our brand partners. The following describes our recognition policies across the various sources of revenue we earn.

Interest and fees on loans: Represents revenue earned on customer accounts owned by us, and is recognized in the period earned in accordance with the contractual provisions of the credit agreements. Interest and fees continue to accrue on all accounts, except in limited circumstances, until the account balance and all related interest and fees are paid or charged-off, which happens in the month during which an account becomes 180 days past due for credit card loans or 120 days past due for other loans, which consist primarily of our pay-over-time products, which include installment loans and “split-pay” offerings. Charge-offs of unpaid interest and fees are recorded as a reduction of Interest and fees on loans. Direct loan origination costs on Credit card and other loans are deferred and amortized on a straight-line basis over a one-year period for credit card loans, or for other loans, over the life of the loan, and are recorded as a reduction of Interest and fees on loans. As of December 31, 2025 and 2024, the remaining unamortized deferred direct loan origination costs were $42 million and $45 million, respectively, and included in Total credit card and other loans.

Interest on cash and investment securities: Represents revenue earned on cash and cash equivalents as well as investments in debt securities, and is recognized in the period earned.

Interchange revenue, net of retailer share arrangements: Represents revenue earned from merchants, including our brand partners, and cardholders from processing and servicing accounts, and is recognized as such services are performed. Such revenue primarily consists of merchant and interchange fees, which are transaction fees charged to the merchant for the processing of credit card transactions and are recognized at the time the cardholder transaction occurs. Our credit card program agreements may also provide for royalty payments, or retailer share arrangements, to our brand partners based on purchase volume or if certain contractual incentives are met (such as if the economic performance of the program exceeds a contractually defined threshold), or for new accounts acquired. These amounts are recorded as contra-revenue, i.e., as a reduction of revenue, in the period incurred. Also recorded as a contra-revenue, costs of cardholder reward arrangements are recognized when the rewards are earned by the cardholders and are generally classified as a reduction of revenue. Where we are responsible for reward redemption under the cardholder reward arrangements, we maintain a liability included in Other liabilities on the Consolidated Balance Sheets. Our liability is impacted by the terms and conditions of the specific reward arrangements, the costs of fulfillment, and anticipated redemption rates. Where our brand partners are responsible for reward redemption under the cardholder reward arrangements, our obligation to cover certain costs of rewards earned by the cardholders is satisfied as we make payments to the brand partners and, typically, no liability is recognized.

Other non-interest income: Represents ancillary revenues earned from cardholders, consisting primarily of monthly fees from the purchase of certain payment protection products, which are recognized based on the average cardholder account balance over time and can be cancelled at any point by the cardholder, as well as paper statement fees and losses from our equity method investment in Loyalty Ventures Inc. (LVI).

Contract costs: We recognize contract costs, such as up-front payments made pursuant to contractual agreements with brand partners, as assets. Such costs are deferred and recognized on a straight-line basis over the term of the related agreement. Depending on the nature of the contract costs, the amortization is recorded as either a contra-revenue through a reduction to Non-interest income, or as a charge to Non-interest expenses, in the Consolidated Statements of Income. Amortization of contract costs recorded as a reduction of Interchange revenue, net of retailer share arrangements, was $42 million, $51 million and $59 million for the years ended December 31, 2025, 2024 and 2023, respectively; amortization of contract costs recorded across various Non-interest expense categories totaled $10 million for the year ended December 31, 2025 and $12 million in both 2024 and 2023. As of December 31, 2025 and 2024, the remaining unamortized contract costs were $205 million and $228 million, respectively, and are included in Other assets on the Consolidated Balance Sheets.

We perform an impairment assessment when events or changes in circumstances indicate that the carrying amount of our contract costs may not be recoverable. No impairment charges were recognized during either of the years ended December 31, 2025 or 2024. However, for the year ended December 31, 2023 we recognized a $7 million impairment charge in Other non-interest expenses in our Consolidated Statements of Income for certain of our deferred contract costs.

Interest expense: Represents interest incurred primarily to fund Credit card and other loans, general corporate purposes and liquidity needs, and is recognized as incurred. Interest expense is divided between Interest on deposits, which relates to interest expense on Deposits taken from customers, and Interest on borrowings, which relates to interest expense on our Long-term and other debt.

Card and processing expenses: Primarily represents costs incurred in relation to customer service activities, including embossing, and postage and mailing, as well as fraud and credit bureau inquiries. These costs are expensed as incurred.

Information processing and communication expenses: Represents costs incurred in relation to data processing, and software license and maintenance charges. These costs are expensed as incurred.

Marketing expenses: Represents costs incurred in campaign development and initial placement of advertising, which are expensed in the period in which the advertising first takes place. Other marketing expenses are expensed as incurred.

Consolidated Balance Sheets

Cash and cash equivalents: Includes cash and due from banks, interest-bearing cash balances such as those invested in money market funds, as well as other highly liquid short-term investments with an original maturity of three months or less. As of December 31, 2025 and 2024, respectively, cash and due from banks was $386 million and $330 million, interest-bearing cash balances were $3.2 billion and $3.1 billion, and short-term investments were $26 million and $272 million. Restricted cash primarily includes cash restricted for principal and interest repayments of debt issued by our consolidated VIEs, as well as other restricted amounts including cash pledged to collateralize our derivative contracts. Restricted cash is recorded in Other assets on the Consolidated Balance Sheets and totaled $24 million and $35 million as of December 31, 2025 and 2024, respectively.

Property and equipment: Furniture, equipment and leasehold improvements are carried at cost less accumulated depreciation, and depreciation is recognized on a straight-line basis. Costs incurred during construction are capitalized; depreciation begins once the asset is placed in service and is also recognized on a straight-line basis. Our furniture and equipment is depreciated over the estimated useful lives of the assets, which range from less than one year to 10 years, while leasehold improvements are depreciated over the lesser of the remaining terms of the respective leases, or the useful lives of the improvements, and range from one year to 16 years. Depreciation expense, including purchased software, totaled $20 million, $20 million and $19 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Costs associated with the acquisition or development of internal-use software are also capitalized and recorded in Property and equipment. Once the internal-use software is ready for its intended use, the cost is amortized on a straight-line basis over the software’s estimated useful life. As of December 31, 2025, our internal-use software has estimated useful lives ranging from one year to 10 years. As of December 31, 2025 and 2024, the net amount of unamortized capitalized internal-use software costs included in Property and equipment on the Consolidated Balance Sheets was $54 million and $71 million, respectively. Amortization expense on capitalized internal-use software costs totaled $30 million, $35 million and $60 million for the years ended December 31, 2025, 2024 and 2023, respectively.

We review long-lived assets and asset groups for impairment whenever events or circumstances indicate their carrying amounts may not be recoverable. An impairment is recognized if the carrying amount is not recoverable and exceeds the asset or asset group’s fair value. No impairment of a long-lived asset or asset group was recognized during the years ended December 31, 2025, 2024 and 2023.

Leases: We have various operating leases for facilities and equipment which are recorded as lease-related assets (i.e., right-of-use assets) and liabilities for those leases with terms greater than 12 months. We do not have any finance leases. We determine if an arrangement is a lease or contains a lease at inception, and we do not separate lease and non-lease components. Right-of-use assets are recognized as of the lease commencement date at amounts equal to the respective lease liabilities, adjusted for any prepaid lease payments, initial direct costs and lease incentives, and are recorded in Other assets on the Consolidated Balance Sheets. Our lease liabilities are recognized as of the lease commencement date, or upon

modification of the lease, at the present value of the contractual fixed lease payments, discounted using our incremental borrowing rate (as the rate implicit in the lease is typically not readily determinable) and are recorded within Other liabilities on the Consolidated Balance Sheets. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Leases with an initial term of 12 months or less are not recognized on the Consolidated Balance Sheets; lease expense for these leases is recognized on a straight-line basis over the lease terms. Total lease expense for the years ended December 31, 2025, 2024 and 2023 was $15 million, $14 million, and $25 million, respectively, including variable lease costs and sublease income, which were insignificant.

As with other long-lived assets, right-of-use assets are reviewed for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable. No impairment of a right-of-use asset was recognized during the years ended December 31, 2025, 2024 and 2023.

Derivatives: From time to time we may enter into derivative transactions to support our overall risk management activities. Our primary financial risks stem from the impact on our earnings and economic value of equity due to changes in interest rates, and to a lesser extent, changes in foreign exchange rates, and therefore we may use derivative financial instruments to manage our exposure to these financial risks. We do not trade or speculate in derivatives. Subject to the criteria set forth in GAAP, we will either designate our derivatives in qualifying hedging relationships, or as economic hedges should the criteria in GAAP not be met. All derivatives that we enter into are recognized at fair value in our Consolidated Balance Sheets, where our derivative receivables are included in Other assets and our derivative payables are included in Other liabilities. As permitted by GAAP, when a legally enforceable master netting agreement exists between us and the derivative counterparty, we present derivative receivables and derivative payables with the same counterparty on a net basis in the Consolidated Balance Sheets, including any related cash collateral receivables and payables. We have managed our interest rate sensitivity in part by changing the duration and re-pricing characteristics of a portion of our variable rate credit card loan portfolio by using interest rate swaps. We also use foreign currency forwards to limit our earnings and capital exposures to foreign exchange risk by hedging our limited exposures denominated in foreign currencies, in particular, Canadian dollars.

We have entered into receive-fixed, pay-floating interest rate swaps to modify the interest rate characteristics of designated credit card loans from a floating rate to a fixed rate in order to reduce the impact of changes in forecasted future cash flows due to fluctuations in market interest rates. We designate our interest rate swaps as qualifying accounting cash flow hedges. As of December 31, 2025 and 2024, we had outstanding interest rate swaps with a total notional amount of $500 million and $1.5 billion. The impacts of our cash flow hedges were insignificant to the Consolidated Financial Statements for the periods presented on both a gross basis and, where applicable, a net basis.

We have also entered into foreign currency forwards to limit our Canadian dollar exposure, which we account for as economic hedges (as the criteria under GAAP for designation have not been met). As of December 31, 2025 and 2024, we had outstanding foreign currency forwards with a total notional amount of $45 million and $73 million, respectively. The impacts of our economic hedges were insignificant to the Consolidated Financial Statements for the periods presented.

The notional amounts disclosed above are not exchanged on our derivatives. While these notional amounts provide an indication of the volume of our derivative activity, they significantly exceed, in our view, the possible losses that could arise from the associated transactions.

CONCENTRATIONS

We depend on a limited number of large partner relationships for a significant portion of our revenue. As of and for the year ended December 31, 2025, our five largest credit card programs (based on Total net interest and non-interest income) accounted for approximately 49% of our Total net interest and non-interest income excluding the gain on sale and 44% of our End-of-period credit card and other loans. In particular, our programs with (alphabetically) Signet Jewelers, Ulta Beauty and Victoria’s Secret & Co. and its retail affiliates, each accounted for 10% or more of our Total net interest and non-interest income for the year ended December 31, 2025. A decrease in business from, or the loss of, any of our significant partners for any reason, could have a material adverse effect on our business.

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS


Accounting Standards Recently Adopted during 2025
Standard	Guidance	Timing and Financial Statement Impact
Income Taxes: Improvements to Income Tax Disclosures Issued December, 2023	Requires greater disaggregation of rate reconciliation and income taxes paid information, as well as other changes intended to enhance the transparency and decision-usefulness of income tax disclosures.	Adopted effective with this report on a prospective basis. Adoption required enhancements to our income tax disclosures but did not have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Accounting Standards Recently Issued but Not Yet Adopted as of December 31, 2025
Standard	Guidance	Timing and Financial Statement Impact
Debt – Debt with Conversion and Other Options: Induced Conversions of Convertible Debt Instruments Issued November, 2024	Improves the relevance and consistency in application of the induced conversion guidance for (a) convertible debt instruments with cash conversion features and (b) debt instruments that are not currently convertible.	Adopted January 1, 2026. Adoption had no impact on our financial reporting and will not have any impact in the near term as all of our Convertible Notes had been extinguished and no Convertible Notes remained outstanding as of December 31, 2025. Additionally, adoption did not have a significant impact on our operational processes, controls and governance in support of the new guidance.
Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses Issued November, 2024	Requires disaggregated disclosure of certain income statement expenses on the face of the Consolidated Statements of Income, and further disaggregation of certain expense captions into specified categories in disclosures within the notes to the Consolidated Financial Statements.	Effective beginning with our Annual Report on Form 10-K for the year ending December 31, 2027, and effective for interim reporting periods beginning in 2028. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Intangibles – Goodwill and Other – Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software Issued September, 2025	Amends certain aspects of the accounting for and disclosure of internal-use software costs, including removing all references to prescriptive and sequential software development stages to align better with current software development methods, e.g., agile.	Effective January 1, 2028. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Financial Instruments – Credit Losses: Purchased Loans Issued November, 2025	Amends the accounting for acquired loans (excluding credit cards) that meet certain criteria at acquisition (referred to as purchased seasoned loans) by recognizing them at their purchase price plus an allowance for expected credit losses (i.e., the gross-up approach).	Effective January 1, 2027. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

We have adopted equity compensation plans to advance the interests of BFH by rewarding certain employees for their contributions to the financial success of BFH and thereby motivating them to continue to make such contributions in the future. Under the Omnibus Incentive Plans described further below, certain shares of common stock are reserved for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock unit awards (RSUs), performance share awards, cash incentive awards, deferred stock units, and other stock-based and cash-based awards to selected officers, employees, non-employee directors and consultants performing services for us or our affiliates, with only employees being eligible to receive incentive stock options. As well, the maximum amount that may be awarded under any of our equity compensation plans to any independent member of our Board of Directors in any one calendar year may not exceed $1 million.

2020 Omnibus Incentive Plan

The 2020 Omnibus Incentive Plan (the 2020 Plan) became effective July 1, 2020 and reserved 2,400,000 shares of common stock for future grants. The 2020 Plan expires on June 30, 2030; provided that, pursuant to the terms of the 2022 Omnibus Incentive Plan (as defined below), no new grants are permitted to be made under the 2020 Plan.

2022 Omnibus Incentive Plan

The 2022 Omnibus Incentive Plan (the 2022 Plan) became effective July 1, 2022 and reserved 3,075,000 shares of common stock for future grants. The 2022 Plan expires on June 30, 2032, provided that pursuant to the terms of the 2024 Omnibus Incentive Plan (the 2024 Plan), no new grants are permitted to be made under the 2022 Plan, and all of the shares that remained available for grant under the 2022 Plan (203,687 shares) were rolled over into the 2024 Plan under the terms thereof, together with any shares that may be forfeited under the outstanding equity awards under the 2022 Plan, as discussed in more detail below.

2024 Omnibus Incentive Plan

In April 2024, our Board of Directors adopted the 2024 Plan, which was subsequently approved by our stockholders on May 14, 2024. The 2024 Plan became effective May 14, 2024 and expires on May 13, 2034. The 2024 Plan reserves 5,000,000 new shares of common stock for future grants. In addition, the 2024 Plan (i) permitted us to roll over the shares that remained available for grant under the 2022 Plan at the time the 2024 Plan was approved (203,687 shares as of May 14, 2024) and (ii) permits us to roll over and re-issue shares that are forfeited under outstanding equity awards under the 2022 Plan. As of December 31, 2025 61,300 shares had been forfeited and rolled over from the 2022 Plan to the 2024 Plan, and 1,574,387 shares remained subject to outstanding equity awards under the 2022 Plan.

On May 14, 2024 we registered up to an aggregate of 7,667,594 shares of our common stock authorized for issuance in accordance with the 2024 Plan pursuant to a Registration Statement on Form S-8, File No. 333-279495. Terms of all awards under the 2024 Plan are determined by the Board of Directors or the Compensation & Human Capital Committee of the Board of Directors or its designee at the time of award.

Stock-based Compensation Expense

Stock-based compensation expense is measured at the grant date of the award, based on the fair value of the award, and is recognized ratably over the requisite service period. Stock-based compensation expense recognized in Employee compensation and benefits expense in the Consolidated Statements of Income for the years ended December 31, 2025, 2024 and 2023 was $56 million, $54 million and $44 million, respectively, with corresponding income tax benefits of $10 million, $9 million and $8 million, respectively.

As the amount of stock-based compensation expense recognized is based on awards ultimately expected to vest, the amount recognized in the Consolidated Statements of Income has been reduced for estimated forfeitures. We estimate forfeitures at each grant date based on historical experience, with forfeiture estimates to be revised, if necessary, in subsequent periods should actual forfeitures differ from those estimates. Forfeitures were estimated at 4% for the year ended December 31, 2025, and were estimated at 5% for the years ended December 31, 2024 and 2023.

As of December 31, 2025, there was approximately $63 million of unrecognized expense, adjusted for estimated forfeitures, related to non-vested, stock-based equity awards granted to employees, which is expected to be recognized over a weighted average remaining period of approximately 1.6 years.

Restricted Stock Unit Awards

The following table summarizes RSUs activity for our stock-based compensation plans:


	Performance- Based(1)	Service- Based	Total	Weighted Average Fair Value
Balance as of December 31, 2022	164,946	1,107,663	1,272,609	$	68.86
Shares granted	175,587	1,172,465	1,348,052	38.02
Shares vested	(9,254)	(434,049)	(443,303)	67.49
Shares forfeited	—	(87,527)	(87,527)	53.82
Balance as of December 31, 2023	331,279	1,758,552	2,089,831	$	49.89
Shares granted	243,312	1,307,833	1,551,145	37.78
Shares vested	(95,133)	(730,635)	(825,768)	56.58
Shares forfeited	—	(68,012)	(68,012)	43.39
Balance as of December 31, 2024	479,458	2,267,738	2,747,196	$	41.54
Shares granted	157,788	867,302	1,025,090	61.93
Shares vested	(99,184)	(962,815)	(1,061,999)	47.05
Shares forfeited	—	(59,233)	(59,233)	45.17
Balance as of December 31, 2025	538,062	2,112,992	2,651,054	$	47.20
Outstanding and Expected to Vest			2,621,537	$	46.85

______________________________

(1) Shares granted reflect a 100% target attainment of the respective performance-based metric. Shares forfeited include those RSUs forfeited as a result of BFH not meeting the respective performance-based metric conditions.

For Service-based and Performance-based awards, the fair value of the RSUs was estimated using our closing share price on the date of grant. Service-based RSUs typically vest ratably over a three-year period. Performance-based RSUs typically cliff vest at the end of three years, if specified performance measures tied to our financial performance are met, which are measured annually over the three-year period. Performance-based RSUs granted in 2025 include a market-based relative total stockholder return modifier which is measured over the three-year vesting period. For Performance-based awards granted in 2023 and 2024, the predefined vesting criteria permit a range from 0% to 150% to be earned. For Performance-based awards granted in 2025, the predefined vesting criteria permit a range from 0% to 160% to be earned, including the +/- 10% relative total stockholder return modifier, which is measured against a defined peer group. Accruals of compensation cost for an award with a performance condition are based on the probable outcome of that performance condition.

For RSUs vested during the years ended December 31, 2025, 2024 and 2023, the total fair value, based upon our stock price at the date the RSUs vested, was $50 million, $47 million and $30 million, respectively. As of December 31, 2025, the aggregate intrinsic value of RSUs outstanding and expected to vest was $194 million.

EMPLOYEE BENEFIT PLANS (Details) - USD ($)	12 Months Ended
EMPLOYEE BENEFIT PLANS (Details) - USD ($)	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023	Jul. 01, 2015	Jun. 30, 2015	Jul. 20, 2001
Defined Contribution Plan Disclosure [Line Items]
Employee contribution	3.00%
Percent of matching contribution	50.00%
Percentage of employees' contribution matched by employer	6.00%
401(k) Retirement Savings Plan
Defined Contribution Plan Disclosure [Line Items]
Number of shares available for issuance (in shares)	107,291
Minimum age limit of employees covered by the plan	18 years
Number of shares registered for issuance (in shares)						1,500,000
Employer contributions	$ 30,000,000	$ 29,000,000	$ 30,000,000
Supplemental Employee Retirement Plan
Defined Contribution Plan Disclosure [Line Items]
Vested percentage	100.00%
Deferred compensation liability	$ 29,000,000	$ 25,000,000
2015 Employee Stock Purchase Plan \| Employee Stock
Defined Contribution Plan Disclosure [Line Items]
Maximum amount of common stock permitted to be purchased annually per employee	$ 25,000
Maximum percentage of voting power after purchase of common stock under ESPP	5.00%
Offering period under ESPP	6 months
Purchase price of common stock as a percentage of fair market value of shares	85.00%
Number of shares available for issuance (in shares)	425,831			1,000,000	1,441,327
Number of shares issued under the ESPP (in shares)	94,497
Weighted-average issue price of shares issued under the ESPP (in dollars per share)	$ 54.69
Number of shares issued under the ESPP since the inception of the plan (in shares)	1,015,496
2005 Employee Stock Purchase Plan \| Employee Stock
Defined Contribution Plan Disclosure [Line Items]
Number of shares available for issuance (in shares)					441,327

CREDIT CARD AND OTHER LOANS - Financing Receivable (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	$ 18,805	$ 18,896
Less: Allowance for credit losses	(2,106)	(2,241)	$ (2,328)	$ (2,464)
Credit card and other loans, net	16,699	16,655
Credit card and loan receivables restricted for securitization investors	10,708	12,408
Unbilled to cardholders	378	378
Variable Interest Entity, Primary Beneficiay
Financing Receivable, Allowance for Credit Loss [Line Items]
Credit card and loan receivables restricted for securitization investors	10,708	12,408
Credit card loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	18,417	18,586
Other loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	388	310
Less: Allowance for credit losses	$ (26)	$ (30)

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2025

Investments, Debt and Equity Securities [Abstract]

Schedule of Investment

The following table provides a summary of our Investments as of December 31:


	2025		2024
(Millions)
Investment securities
Available-for-sale debt securities	$	171	$	170
Equity securities	50		47
Total investment securities	221		217
Equity method and other investments	63		49
Total Investments	$	284	$	266

Schedule of Gain (loss) on Investments

The table below provides unrealized gains and losses on AFS debt securities as of December 31:


	2025								2024
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
(Millions)
Available-for-sale securities	$	189	$	—	$	(18)	$	171	$	195	$	—	$	(25)	$	170
Total	$	189	$	—	$	(18)	$	171	$	195	$	—	$	(25)	$	170

Schedule of Unrealized losses and Fair Value for Investments that Were in an Unrealized Loss Position, Aggregated by Investment Category and the Length of Time that Individual Securities have been in a Continuous Loss Position

The following tables provide information about AFS debt securities in a gross unrealized loss position and the length of time that individual securities have been in a continuous unrealized loss position, as of December 31:


	2025
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	—	$	—	$	135	$	(18)	$	135	$	(18)
Total	$	—	$	—	$	135	$	(18)	$	135	$	(18)


	2024
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	27	$	—	$	140	$	(25)	$	167	$	(25)
Total	$	27	$	—	$	140	$	(25)	$	167	$	(25)

SECURITIZATIONS (Details) - USD ($) $ in Millions	12 Months Ended
SECURITIZATIONS (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Offsetting Assets [Line Items]
Total credit card loans – available to settle obligations of consolidated VIEs	$ 10,708	$ 12,408
Of which: principal amount of credit card loans 91 days or more past due	257	305
Net principal losses of securitized credit card loans	$ 786	$ 852	$ 801
Minimum
Offsetting Assets [Line Items]
Minimum interests requirement (as a percent)	4.00%
Maximum
Offsetting Assets [Line Items]
Minimum interests requirement (as a percent)	10.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 815
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 7A
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480434/815-10-50-7A

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 815
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480434/815-10-50-8

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 815
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480434/815-10-50-8

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 815
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Subparagraph (a)
-Publisher FASB
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+ Details

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
ASSETS
Cash and cash equivalents	$ 3,604	$ 3,679
Credit card and other loans
Total credit card and other loans (includes loans available to settle obligations of consolidated variable interest entities: 2025, $10,708; 2024, $12,408)	18,805	18,896
Allowance for credit losses	(2,106)	(2,241)
Credit card and other loans, net	16,699	16,655
Investments (includes investment securities carried at fair value: 2025, $221; 2024, $217)	284	266
Property and equipment, net	117	142
Goodwill and intangible assets, net	716	746
Other assets	1,243	1,403
Total assets	22,663	22,891
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	13,916	13,082
Debt issued by consolidated variable interest entities	3,422	4,558
Long-term and other debt	886	999
Other liabilities	1,112	1,201
Total liabilities	19,336	19,840
Commitments and contingencies (Note 20)
Stockholders’ equity
Preferred stock, $0.01 par value; authorized, 75.0 thousand shares; issued and outstanding: 2025, 75.0 thousand shares; 2024, no shares	0	0
Common stock, $0.01 par value; authorized, 200.0 million shares; issued and outstanding: 2025, 44.1 million shares; 2024, 49.1 million shares	0	1
Additional paid-in capital	1,868	2,073
Retained earnings	1,475	999
Accumulated other comprehensive loss	(16)	(22)
Total stockholders’ equity	3,327	3,051
Total liabilities and stockholders’ equity	$ 22,663	$ 22,891

Income Taxes - Schedule of Income Taxes Paid (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Income Tax Disclosure [Abstract]
Federal	$ 33
State and local	18
Foreign	2
Total income taxes paid during the year, net of refunds	53	$ 227	$ 292
Income Tax Paid, by Individual Jurisdiction [Line Items]
Income taxes paid	18
CALIFORNIA
Income Tax Disclosure [Abstract]
State and local	4
Income Tax Paid, by Individual Jurisdiction [Line Items]
Income taxes paid	$ 4

PARENT COMPANY FINANCIAL STATEMENTS (Details) - USD ($)	3 Months Ended				12 Months Ended
PARENT COMPANY FINANCIAL STATEMENTS (Details) - USD ($)	Dec. 31, 2025	Sep. 30, 2025	Jun. 30, 2025	Mar. 31, 2025	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Statements of Income
Total interest income					$ 4,912,000,000	$ 5,024,000,000	$ 5,145,000,000
Interest income (expense)					4,058,000,000	4,064,000,000	4,266,000,000
Loss from equity method investment					0	0	(6,000,000)
Total net interest and non-interest income					3,845,000,000	3,838,000,000	4,289,000,000
Total non-interest expenses					1,988,000,000	2,060,000,000	2,092,000,000
Income before income taxes and equity in undistributed net income of subsidiaries					615,000,000	381,000,000	968,000,000
Benefit for income taxes					(94,000,000)	(102,000,000)	(231,000,000)
Net income available to common stockholders					518,000,000	277,000,000	718,000,000
Total comprehensive income, net of tax					524,000,000	274,000,000	720,000,000
Assets:
Cash and cash equivalents	$ 3,604,000,000				3,604,000,000	3,679,000,000	3,590,000,000
Other assets	1,243,000,000				1,243,000,000	1,403,000,000
Total assets	22,663,000,000				22,663,000,000	22,891,000,000
Liabilities:
Long-term and other debt	886,000,000				886,000,000	999,000,000
Other liabilities	1,112,000,000				1,112,000,000	1,201,000,000
Total liabilities	19,336,000,000				19,336,000,000	19,840,000,000
Stockholders’ equity	3,327,000,000				3,327,000,000	3,051,000,000	2,918,000,000	$ 2,265,000,000
Total liabilities and stockholders’ equity	22,663,000,000				22,663,000,000	22,891,000,000
Deposits with banking subsidiaries	210,000,000				210,000,000	0
Statements of Cash Flows
Net cash provided by (used in) operating activities					2,092,000,000	1,859,000,000	1,987,000,000
Cash flows from investing activities:
Net cash provided by investing activities					(1,371,000,000)	(1,169,000,000)	788,000,000
Cash flows from financing activities:
Payment of deferred financing costs					(24,000,000)	(15,000,000)	(63,000,000)
Payment of Capped Call transactions					0	0	(39,000,000)
Dividends and dividend equivalent rights paid	(10,000,000)	$ (10,000,000)	$ (10,000,000)	$ (10,000,000)	(40,000,000)
Repurchases of common stock					(313,000,000)	(55,000,000)	(35,000,000)
Net proceeds from the issuance of preferred stock					71,000,000	0	0
Other					(17,000,000)	(7,000,000)	(2,000,000)
Net cash used in financing activities					(807,000,000)	(592,000,000)	(3,086,000,000)
Change in cash, cash equivalents and restricted cash					(86,000,000)	98,000,000	(311,000,000)
Cash, cash equivalents and restricted cash at beginning of period				3,714,000,000	3,714,000,000	3,616,000,000	3,927,000,000
Cash, cash equivalents and restricted cash at end of period	3,628,000,000				3,628,000,000	3,714,000,000	3,616,000,000
Parent Company
Statements of Income
Total interest income					62,000,000	11,000,000	12,000,000
Total interest expense					108,000,000	116,000,000	111,000,000
Interest income (expense)					(46,000,000)	(105,000,000)	(99,000,000)
Dividends from subsidiaries					834,000,000	910,000,000	1,063,000,000
Loss from equity method investment					0	0	(6,000,000)
Total net interest and non-interest income					788,000,000	805,000,000	958,000,000
Total non-interest expenses					76,000,000	121,000,000	12,000,000
Income before income taxes and equity in undistributed net income of subsidiaries					712,000,000	684,000,000	946,000,000
Benefit for income taxes					31,000,000	38,000,000	31,000,000
Income before equity in undistributed net income of subsidiaries					743,000,000	722,000,000	977,000,000
Equity in undistributed net loss of subsidiaries					(225,000,000)	(445,000,000)	(259,000,000)
Net income available to common stockholders					518,000,000	277,000,000	718,000,000
Total comprehensive income, net of tax					518,000,000	277,000,000	718,000,000
Assets:
Cash and cash equivalents	312,000,000				312,000,000	21,000,000
Investment in subsidiaries	3,080,000,000				3,080,000,000	3,195,000,000
Intercompany receivables, net	733,000,000				733,000,000	773,000,000
Other assets	93,000,000				93,000,000	123,000,000
Total assets	4,218,000,000				4,218,000,000	4,112,000,000
Liabilities:
Long-term and other debt	886,000,000				886,000,000	999,000,000
Other liabilities	5,000,000				5,000,000	62,000,000
Total liabilities	891,000,000				891,000,000	1,061,000,000
Stockholders’ equity	3,327,000,000				3,327,000,000	3,051,000,000
Total liabilities and stockholders’ equity	4,218,000,000				4,218,000,000	4,112,000,000
Statements of Cash Flows
Net cash provided by (used in) operating activities					482,000,000	(182,000,000)	(422,000,000)
Cash flows from investing activities:
Investment in subsidiaries					(75,000,000)	0	0
Net increase in amounts due from subsidiaries					(450,000,000)	0	0
Dividends received					834,000,000	910,000,000	1,063,000,000
Net cash provided by investing activities					309,000,000	910,000,000	1,063,000,000
Cash flows from financing activities:
Borrowings under debt agreements					900,000,000	300,000,000	1,401,000,000
Repayments of borrowings under debt agreements					(1,079,000,000)	(894,000,000)	(1,882,000,000)
Payment of deferred financing costs					(20,000,000)	(10,000,000)	(45,000,000)
Payment of Capped Call transactions					0	0	(39,000,000)
Dividends and dividend equivalent rights paid					(42,000,000)	(43,000,000)	(42,000,000)
Repurchases of common stock					(313,000,000)	(55,000,000)	(35,000,000)
Other					(17,000,000)	(7,000,000)	(2,000,000)
Net cash used in financing activities					(500,000,000)	(709,000,000)	(644,000,000)
Change in cash, cash equivalents and restricted cash					291,000,000	19,000,000	(3,000,000)
Cash, cash equivalents and restricted cash at beginning of period				$ 21,000,000	21,000,000	2,000,000	5,000,000
Cash, cash equivalents and restricted cash at end of period	$ 312,000,000				$ 312,000,000	$ 21,000,000	$ 2,000,000

Insider Trading Policies and Procedures	12 Months Ended
Insider Trading Policies and Procedures	Dec. 31, 2025
Insider Trading Policies and Procedures [Line Items]
Insider Trading Policies and Procedures Adopted	true

INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Deferred tax assets
Deferred revenue	$ 14	$ 12
Allowance for credit losses	513	534
Net operating loss carryforwards and other carryforwards	47	48
Operating lease liabilities	19	29
Research & development expenses	23	53
Accrued expenses and other	80	87
Total deferred tax assets	696	763
Valuation allowance	(20)	(19)
Deferred tax assets, net of valuation allowance	676	744
Deferred tax liabilities
Deferred income	2	2
Depreciation	30	0
Right of use assets	13	19
Intangible assets	15	15
Total deferred tax liabilities	60	36
Net deferred tax assets	616	708
Deferred Tax Assets [Line Items]
Deferred tax asset, net	616	708
Other Assets
Deferred tax liabilities
Net deferred tax assets	616	708
Deferred Tax Assets [Line Items]
Deferred tax asset, net	$ 616	$ 708

GOODWILL AND INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets consisted of the following as of December 31:


	2025
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Premium on purchased credit card loan portfolios	$	172	$	(94)	$	78	3-13 years
Non-compete agreements	2		(2)		—		5 years
	174		(96)		78
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	178	$	(96)	$	82


	2024
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets

Premium on purchased credit card loan portfolios	$	221	$	(113)	$	108	3-13 years
Non-compete agreements	2		(2)		—		5 years
	$	223	$	(115)	$	108
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	227	$	(115)	$	112

Schedule of Indefinite-Lived Intangible Assets

Intangible assets consisted of the following as of December 31:


	2025
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Premium on purchased credit card loan portfolios	$	172	$	(94)	$	78	3-13 years
Non-compete agreements	2		(2)		—		5 years
	174		(96)		78
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	178	$	(96)	$	82


	2024
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets

Premium on purchased credit card loan portfolios	$	221	$	(113)	$	108	3-13 years
Non-compete agreements	2		(2)		—		5 years
	$	223	$	(115)	$	108
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	227	$	(115)	$	112

Schedule of Estimated Amortization Expense Related to Intangible Assets

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows for the years ending December 31:


(Millions)
2026	$	29
2027	24
2028	7
2029	7
2030	6
Thereafter	5
	$	78

PREFERRED STOCK AND COMMON STOCK - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended				12 Months Ended
	Dec. 31, 2025	Sep. 30, 2025	Jun. 30, 2025	Mar. 31, 2025	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023	Jan. 29, 2026
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Cash dividend declared (usd per share)	$ 0.23	$ 0.21	$ 0.21	$ 0.21	$ 0.86	$ 0.84	$ 0.84
Dividends paid	$ 10	$ 10	$ 10	$ 10	$ 40
Subsequent Event \| O2026Q1 Preferred Dividends
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Cash dividend (usd per share)								$ 26.35
Subsequent Event \| O2026Q1 Common Dividends
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Cash dividend (usd per share)								$ 0.23

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(01)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(02)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(03)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

+ Details

BORROWINGS OF LONG-TERM AND OTHER DEBT - Narrative (Details)		1 Months Ended				12 Months Ended
	Jun. 13, 2023	Nov. 30, 2025 USD ($)	Aug. 31, 2025 USD ($)	Jun. 30, 2025 USD ($)	Mar. 31, 2025 USD ($)	Dec. 31, 2025 USD ($)	Dec. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Mar. 10, 2025 USD ($)	Jan. 31, 2025 USD ($)	Oct. 31, 2024 USD ($)	Aug. 31, 2024 USD ($)	May 31, 2024 USD ($)	Jan. 31, 2024 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
Loss on debt extinguishment						$ 74,000,000	$ 117,000,000	$ 7,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Remaining borrowing capacity						$ 700,000,000
Convertible senior notes due 2028
Debt Instrument [Line Items]
Stated interest rate						4.25%
Debt amount issued						$ 10,000,000
Repurchase amount						16,000,000
Additional paid-in capital related to the induced conversion premium						4,000,000
Convertible senior notes due 2028 \| Other Non-interest Expense
Debt Instrument [Line Items]
Debt instrument, inducement expense						$ 3,000,000
2023 Credit Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity											$ 700,000,000
Senior notes due 2026 \| Senior Notes
Debt Instrument [Line Items]
Stated interest rate						7.00%										7.00%
Debt amount issued																$ 500,000,000
Repurchase amount										$ 100,000,000				$ 400,000,000
4.250% Convertible Senior Notes Due 2028 \| Convertible senior notes due 2028
Debt Instrument [Line Items]
Stated interest rate															4.25%
Debt amount issued															$ 316,000,000
Conversion ratio	0.0260247
4.250% Convertible Senior Notes Due 2028 \| Convertible Senior Notes Due 2028
Debt Instrument [Line Items]
Debt Instrument, repurchased instruments															1
Senior notes due 2029 \| Senior Notes
Debt Instrument [Line Items]
Stated interest rate		6.75%		9.75%		9.75%
Repurchase amount		$ 719,000,000	$ 31,000,000	$ 150,000,000
Principal amount per note		1,000	1,000	1,000
Repurchase amount per note including accrued unpaid interest		1,068	1,070	1,071
Loss on debt extinguishment		$ 55,000,000	3,000,000	$ 13,000,000
Subordinated Notes Due 2035 \| Senior Notes
Debt Instrument [Line Items]
Stated interest rate						8.38%
Repurchase amount			$ 100,000
Subordinated Note Due 2035 \| Subordinated Debt
Debt Instrument [Line Items]
Stated interest rate									8.375%
Debt amount issued					$ 400,000,000
Repurchase amount					$ 100,000				$ 250,000,000
Debt instrument, repurchase percentage, principal amount									8.375%
Basis spread					4.30%
Senior Notes Due 2031 \| Senior Notes
Debt Instrument [Line Items]
Stated interest rate						6.75%
Senior Notes Due 2031 \| Subordinated Debt
Debt Instrument [Line Items]
Stated interest rate		6.75%
Debt amount issued		$ 500,000,000
Series 2024-A Public Term Asset-Backed Notes
Debt Instrument [Line Items]
Debt amount issued													$ 570,000,000
Series 2024-A Asset-Backed Term Notes - Class A
Debt Instrument [Line Items]
Stated interest rate													5.47%
Debt amount issued													$ 500,000,000
Series 2024-A Asset-Backed Term Notes - Class M
Debt Instrument [Line Items]
Debt amount issued													44,000,000
Series 2024-A Asset-Backed Term Notes - Class B
Debt Instrument [Line Items]
Debt amount issued													$ 26,000,000
Series 2024 B Asset Backed Term Notes
Debt Instrument [Line Items]
Debt amount issued												$ 500,000,000
Series 2024-B Asset-Backed Term Notes - Class A
Debt Instrument [Line Items]
Stated interest rate												4.62%
Debt amount issued												$ 500,000,000

PREFERRED STOCK AND COMMON STOCK (Tables)

12 Months Ended

Dec. 31, 2025

Stockholders' Equity Note [Abstract]

Schedule of Class of Treasury Stock

The following table provides information about our common stock repurchases under our various Board of Directors approved share repurchase authorizations, for the periods presented:


(Millions)	Amount Authorized for Repurchase		Number of Shares Repurchased (1)	Approximate Dollar Value of Shares Repurchased (2)		Amount Remaining for Future Repurchases
For the three months ended:
March 31, 2025	$	150	2.1	$	102	$	48
June 30, 2025	—		1.1	48		—
September 30, 2025	200		0.6	40		160
December 31, 2025	200		1.9	120		$	240
Total	$	550	5.7	$	310

______________________________

(1)Following their repurchase, these shares ceased to be outstanding shares of common stock and are now treated as authorized but unissued shares of common stock.

(2)Excludes excise taxes on stock repurchases.

Schedule of Dividends Declared

The table below summarizes the cash dividend activity we had on our common stock for the dates presented:


(Millions, except per share amounts)
Dividend Declaration Date	Dividend Payment Date	Amount Per Common Share		Amount (1)

January 30, 2025	March 21, 2025	$	0.21	$	10
April 24, 2025	June 13, 2025	$	0.21	10
July 24, 2025	September 12, 2025	$	0.21	10
October 23, 2025	December 12, 2025	$	0.23	10
				$	40

______________________________

(1)Excludes dividend equivalent rights paid during the period.

DEPOSITS - Interest and Non-Interest Bearing (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Other Liabilities Disclosure [Abstract]
Interest-bearing	$ 13,891	$ 13,055
Cardholder credit balances	25	27
Total deposits	$ 13,916	$ 13,082

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended				12 Months Ended
	Dec. 31, 2025	Sep. 30, 2025	Jun. 30, 2025	Mar. 31, 2025	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Statement of Stockholders' Equity [Abstract]
Common stock dividends and dividend equivalent rights declared (in dollars per share)	$ 0.23	$ 0.21	$ 0.21	$ 0.21	$ 0.86	$ 0.84	$ 0.84

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Accounting Policies [Line Items]
Period for which interest and fee income accrue until balance, interest and fees paid or charged off	180 days
Period for which interest and fee income accrue until balance, interest and other fees are paid or charged off on installment loan receivables	120 days
Amortization term of direct loan amortization costs	1 year
Unamortized deferred costs related to loan origination	$ 42,000,000	$ 45,000,000
Unamortized contract costs	205,000,000	228,000,000
Impairment of contract costs	0	0	$ 7,000,000
Cash and due from banks	386,000,000	330,000,000
Interest-bearing deposits	3,200,000,000	3,100,000,000
Short-term investments	26,000,000	272,000,000
Restricted cash	24,000,000	35,000,000
Depreciation	20,000,000	20,000,000	19,000,000
Unamortized capitalized software costs	54,000,000	71,000,000
Amortization on capitalized software	30,000,000	35,000,000	60,000,000
Impairment charges	0	0	0
Lease cost	15,000,000	14,000,000	25,000,000
Interest Rate Swap
Accounting Policies [Line Items]
Notional amount	500,000,000	1,500,000,000
Not Designated as Hedging Instrument, Economic Hedge
Accounting Policies [Line Items]
Notional amount	$ 45,000,000	73,000,000
Minimum \| Furniture and Equipment
Accounting Policies [Line Items]
Estimated useful life	1 year
Minimum \| Leasehold Improvements
Accounting Policies [Line Items]
Estimated useful life	1 year
Minimum \| Internal-Use Software
Accounting Policies [Line Items]
Estimated useful life	1 year
Maximum \| Furniture and Equipment
Accounting Policies [Line Items]
Estimated useful life	10 years
Maximum \| Leasehold Improvements
Accounting Policies [Line Items]
Estimated useful life	16 years
Maximum \| Internal-Use Software
Accounting Policies [Line Items]
Estimated useful life	10 years
Customer Concentration Risk \| Revenue Benchmark \| Five Largest Credit Card Programs
Accounting Policies [Line Items]
Concentration risk	49.00%
Customer Concentration Risk \| Liabilities, Total \| Five Largest Credit Card Programs
Accounting Policies [Line Items]
Concentration risk	44.00%
Interchange Revenue, Net of Retailer Share Arrangements
Accounting Policies [Line Items]
Amortization of contract costs	$ 42,000,000	51,000,000	59,000,000
Non-Interest Expenses
Accounting Policies [Line Items]
Amortization of contract costs	$ 10,000,000	$ 12,000,000	$ 12,000,000

BORROWINGS OF LONG-TERM AND OTHER DEBT

12 Months Ended

Dec. 31, 2025

Debt Disclosure [Abstract]

BORROWINGS OF LONG-TERM AND OTHER DEBT

Long-term and other debt consisted of the following as of December 31:


Description	2025		2024		Contractual Maturities	Interest Rates
(Millions, except percentages)
Long-term and other debt:
Revolving line of credit	$	—	$	—	October 2028	(1)
Senior notes due 2026	—		100		January 2026	7.00%
Convertible senior notes due 2028	—		10		June 2028	4.25%
Senior notes due 2029	—		900		March 2029	9.75%
Senior notes due 2031	500		—		May 2031	6.75%
Subordinated notes due 2035	400		—		June 2035	8.38%
Subtotal	900		1,010
Less: Unamortized debt issuance costs	14		11
Total long-term and other debt	$	886	$	999

Debt issued by consolidated VIEs:
Fixed rate asset-backed term note securities	$	1,350	$	1,350	Various – May 2026 to Jul. 2027	4.62% to 5.47%
Conduit asset-backed securities	2,075		3,213		Various – Oct. 2026 to Feb. 2027	(2)
Subtotal	3,425		4,563
Less: Unamortized debt issuance costs	3		5
Total debt issued by consolidated VIEs	$	3,422	$	4,558

Total borrowings of long-term and other debt	$	4,308	$	5,557

______________________________

(1)The interest rate is based upon the Secured Overnight Financing Rate (SOFR) plus an applicable margin.

(2)The interest rate is based upon SOFR, or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. As of December 31, 2025, the interest rates ranged from 4.77% to 4.81% with a weighted average rate of 4.78%. As of December 31, 2024, the interest rates ranged from 5.48% to 5.60% with a weighted average rate of 5.54%.

Certain of our long-term debt agreements include various restrictive financial and non-financial covenants. If we do not comply with certain of these covenants and an event of default occurs and remains uncured, the maturity of amounts outstanding may be accelerated and become payable, and, with respect to our credit agreement, the associated commitments may be terminated. As of December 31, 2025, we were in compliance with all such covenants.

Long-term and Other Debt

Throughout 2025 we engaged in a number of financing-related transactions, including the issuances of senior and subordinated notes, the completion of tender offers to repurchase certain outstanding senior and subordinated notes, the redemption of certain senior notes and the completion of the repurchases of 100% of our outstanding convertible senior notes. Each of these transactions, as well as other matters relating to our liquidity and capital resources during the year, are described in more detail below.

Credit Agreement

In October 2024, we entered into our amended credit agreement with the Parent Company, as borrower, certain of our domestic subsidiaries, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent and lender, and various other financial institutions, as lenders, which provides for a $700 million senior unsecured revolving credit facility (the Revolving Credit Facility), which matures in October 2028. As of December 31, 2025, our Revolving Credit Facility was undrawn and all $700 million remained available for future borrowings.

Senior Notes Due 2026, 2028, 2029 and 2031

The Senior Notes set forth below are each governed by their respective indenture that includes usual and customary negative covenants and events of default. These Senior Notes are unsecured and are guaranteed on a senior unsecured basis

by certain of our existing and future domestic restricted subsidiaries that incur or in any other manner become liable for any debt under our domestic credit facilities, including the Revolving Credit Facility.

7.000% Senior Notes Due 2026

In September 2020, we issued and sold $500 million aggregate principal amount of 7.000% Senior Notes due January 15, 2026 (Senior Notes due 2026). In January 2024, we redeemed $400 million in aggregate principal amount of the Senior Notes due 2026, and in January 2025, with cash on hand, we redeemed the remaining $100 million in aggregate principal amount of our Senior Notes due 2026.

4.25% Convertible Senior Notes Due 2028

In June 2023, we issued and sold $316 million aggregate principal amount of 4.25% Convertible Senior Notes due 2028 (the Convertible Notes). Before we repurchased 100% of our outstanding Convertible Notes, the Convertible Notes bore interest at an annual rate of 4.25%, payable semi-annually in arrears on June 15 and December 15 of each year. The Convertible Notes were scheduled to mature on June 15, 2028, unless earlier repurchased, redeemed or converted.

During 2025, through discrete, privately-negotiated repurchase transactions, we repurchased the remaining $10 million in aggregate principal amount of outstanding Convertible Notes. The aggregate purchase price, or settlement value, for the repurchases during 2025 was $16 million, which was funded with cash on hand. In connection with the repurchases, we recognized a $3 million inducement expense in Other non-interest expenses representing the total settlement value, inclusive of transaction fees, in excess of the total conversion value (calculated in accordance with the indenture governing the Convertible Notes), as well as a $4 million reduction in Additional paid-in capital (APIC) related to the total conversion value paid in excess of the carrying value of the Convertible Notes repurchased and a deferred tax impact. As of December 31, 2025, all of the Convertible Notes had been extinguished and no Convertible Notes remained outstanding.

Prior to the repurchases of the Convertible Notes, the embedded conversion feature within the Convertible Notes was both considered indexed to the Company’s own equity and met the equity classification conditions; therefore, it did not require derivative accounting. Upon entering into the repurchase agreements that themselves required cash settlement of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes, the embedded conversion feature no longer met the equity classification conditions; therefore, requiring bifurcation and derivative accounting.

In connection with the issuance of the Convertible Notes, we entered into privately negotiated capped call (Capped Call) transactions with certain financial institution counterparties. At that time, these transactions were expected generally to reduce potential dilution to our common stock upon any conversion of Convertible Notes and/or offset any cash payments we were required to make in excess of the principal amount of the Convertible Notes, with such reduction and/or offset subject to a cap, based on the cap price.

All of the Capped Call transactions continue to remain outstanding, notwithstanding that no Convertible Notes remain outstanding. Although we do not trade or speculate in derivatives, we may seek to opportunistically terminate the Capped Call transactions (in full or in part from time to time) or leave the Capped Call transactions outstanding, possibly until maturity, in any such case with the objective of optimizing the stockholder value we receive under these transactions. The value that we ultimately realize from the Capped Call transactions (either in the form of cash or shares of our common stock, at our election) is subject to a number of variables, most significantly our stock price at the time the Capped Call transactions are terminated, and is subject to other potential adjustments based on the amount of our quarterly dividend, the volume of our share repurchases and other factors.

For additional information on the June 2023 issuance of our Convertible Notes and the subsequent repurchases in 2024, as well as information on our Capped Call transactions, refer to Note 10, “Borrowings of Long-Term and Other Debt” to the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

9.750% Senior Notes Due 2029

In June 2025, we completed a cash tender offer (the Tender Offer) pursuant to which we repurchased $150 million aggregate principal amount of our 9.750% Senior Notes due 2029 (Senior Notes due 2029). The consideration paid in the Tender Offer for each $1,000 principal amount of the Senior Notes due 2029 was $1,071, plus accrued and unpaid interest. In connection with the repurchase, we recognized a $13 million loss on extinguishment in Other non-interest expenses representing the total settlement value, inclusive of transaction fees, in excess of the carrying value of the Senior Notes due 2029.

In August 2025, we completed another cash tender offer (the Third Quarter Tender Offer) pursuant to which we repurchased $31 million in aggregate principal amount of our Senior Notes due 2029, as well as $0.1 million aggregate principal amount of 8.375% Subordinated Notes due 2035. The consideration paid in the Third Quarter Tender Offer for each $1,000 principal amount of the Senior Notes due 2029 was $1,070, plus accrued and unpaid interest. In connection with the repurchase, we recognized a $3 million loss on extinguishment in Other non-interest expenses representing the total settlement value, inclusive of transaction fees, in excess of the carrying value of the Senior Notes due 2029. See further discussion of our 8.375% Subordinated Notes due 2035, below.

In November 2025, we redeemed the remaining $719 million in aggregate principal amount of our Senior Notes due 2029 with the net proceeds from the issuance of the 6.750% Senior Notes due 2031 (as discussed below), together with cash on hand. The consideration paid in the redemption for each $1,000 principal amount of the Senior Notes due 2029 was $1,068, plus accrued and unpaid interest. In connection with the redemption, we recognized a $55 million loss on extinguishment in Other non-interest expenses representing the total settlement value, inclusive of transaction fees, in excess of the carrying value of the Senior Notes due 2029. There were no Senior Notes due 2029 outstanding as of December 31, 2025. For additional information on the issuance of our Senior Notes due 2029, refer to Note 10, “Borrowings of Long-Term and Other Debt” to the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

6.750% Senior Notes Due 2031

In November 2025, we issued $500 million aggregate principal amount of 6.750% Senior Notes due 2031 (Senior Notes due 2031). The Senior Notes due 2031 accrue interest on the outstanding principal amount at a rate of 6.750% per annum from November 6, 2025, payable semi-annually in arrears, on May 15 and November 15 of each year, beginning on May 15, 2026. The Senior Notes due 2031 will mature on May 15, 2031, unless subject to earlier repurchase or redemption. We used the net proceeds from the offering of the Senior Notes due 2031, together with cash on hand, to fund the redemption in full of our outstanding Senior Notes due 2029.

8.375% Subordinated Notes Due 2035

In March 2025, we issued and sold $400 million in aggregate principal amount of 8.375% Fixed-Rate Reset Subordinated Notes due 2035 (the Subordinated Notes). The Subordinated Notes accrue interest on the outstanding principal amount (i) at a rate per annum equal to 8.375% from, and including, March 10, 2025, to, but excluding, June 15, 2030 (the Reset Date), and (ii) from, and including, the Reset Date to, but excluding, the maturity date at a rate per annum equal to the Five-Year U.S. Treasury Rate as of the date that is two business days prior to the Reset Date, plus 430 basis points. Interest on the Subordinated Notes is payable semiannually in arrears on June 15 and December 15 of each year. The Subordinated Notes will mature on June 15, 2035, unless subject to earlier repurchase or redemption. As noted above, as part of the Third Quarter Tender Offer, we repurchased $0.1 million aggregate principal amount of Subordinated Notes.

We used $250 million of the net proceeds from the Subordinated Notes offering to enter into a subordinated promissory note between Parent Company, as lender, and CCB, as borrower, on terms substantially the same as those of the Subordinated Notes. The subordinated promissory note is eliminated in consolidation.

Debt Issued by Consolidated VIEs

An asset-backed security is a security whose value and income payments are derived from and collateralized by a specified pool of underlying assets – in our case, our credit card loans. The sale of the pool of underlying assets to investors is accomplished through a securitization process. We regularly sell our credit card loans to our Trusts, which are

consolidated. The liabilities of these consolidated VIEs include asset-backed securities for which creditors, or beneficial interest holders, do not have recourse to our general credit.

Conduit Facilities

We maintained committed syndicated bank Conduit Facilities to support the funding of our credit card loans for our Trusts. Borrowings outstanding under each private Conduit Facility bear interest at a margin above SOFR, or the asset-backed commercial paper costs of each individual conduit provider.

The table below summarizes our conduit capacities, borrowings and maturities for the periods presented:


(Millions)	December 31, 2024				Commitment		December 31, 2025
Conduit Facilities	Capacity		Drawn (6)		Change		Capacity		Drawn		Maturity Date (7)
Comenity Bank
WFNMNT 2009-VFN (1)	$	2,650	$	1,955	$	(900)	$	1,750	$	1,363	October 2026
WFNMT 2009-VFC1 (2)	—		141		—		—		—		—
Comenity Capital Bank
WFCMNT 2009-VFN (3)	2,250		867		(250)		2,000		712		February 2027
CCAST 2023-VFN1 (4)	250		250		(250)		—		—		—
CCAST 2024-VFN1 (5)	200		—		(200)		—		—		—
Total	$	5,350	$	3,213	$	(1,600)	$	3,750	$	2,075

______________________________

(1)2009-VFN Conduit issued under World Financial Network Credit Card Master Note Trust (WFNMNT). In October 2025, the 2009-VFN Conduit commitment was reduced by $900 million to $1.75 billion, and the Maturity Date was extended to October 2026.

(2)2009-VFC1 Conduit issued under World Financial Network Credit Card Master Trust III (WFNMT) was retired following controlled amortization, meaning the period in which principal collections are accumulated to pay down the outstanding principal amount of the notes issued under the Conduit Facility, in June 2025 pursuant to the termination, consent and waiver agreement.

(3)2009-VFN Conduit issued under World Financial Capital Master Note Trust (WFCMNT). In February 2025, the 2009-VFN Conduit commitment was reduced by $250 million to $2 billion, and the Maturity Date was extended to February 2026. Then in December 2025, the Maturity Date of the 2009-VFN Conduit was further extended to February 2027.

(4)2023-VFN1 Conduit issued under Comenity Capital Asset Securitization Trust (CCAST). The purchase commitment expired on September 29, 2025 and the 2023-VFN1 Conduit was retired on October 1, 2025 pursuant to the termination, consent and waiver agreement.

(5)2024-VFN1 Conduit issued under CCAST was retired in February 2025 pursuant to the termination, consent and waiver agreement.

(6)Amounts drawn do not include $1.1 billion of debt in the form of subordinated notes issued by WFNMNT and WFCMNT as of December 31, 2024, which were not sold, but were retained by us as credit enhancements and therefore have been eliminated from the Total. The credit enhancements represented by subordinated notes issued by WFCMNT and WFNMNT were replaced with excess collateral amounts in February 2025 and October 2025, respectively, as defined in the relevant indenture supplements.

(7)Maturity Date with respect to conduit borrowings means the date on which the revolving period for the applicable Conduit Facility expires. The revolving period may be extended or renewed (unless an early amortization event occurs prior to the Maturity Date). Absent the extension or renewal of the revolving period, the Conduit Facility shall enter controlled amortization on the Maturity Date and may no longer be drawn upon.

Fixed Rate Asset-Backed Term Notes

In May 2024, WFNMNT issued $570 million of Series 2024-A public term asset-backed notes, which mature in April 2027. The offering consisted of $500 million of Class A notes with a fixed interest rate of 5.47% per year, $44 million of zero coupon Class M notes, and $26 million of zero coupon Class B notes. The Class M and B notes were retained by us and are eliminated in consolidation. In addition, in August 2024 WFNMNT issued $500 million of Series 2024-B public term asset-backed notes, which mature in July 2027. The offering consisted of $500 million of Class A notes with a fixed interest rate of 4.62% per year. There were no asset-backed notes issued in 2025.

Maturities

The future principal payments for our Long-term and other debt are as follows, as of December 31, 2025:


Year	Long-Term and Other Debt		Debt Issued by Consolidated VIEs		Total
(Millions)
2026	$	—	$	1,713	$	1,713
2027	—		1,712		1,712
2028	—		—		—
2029	—		—		—
2030	—		—		—
Thereafter	900		—		900
Total maturities	900		3,425		4,325
Unamortized debt issuance costs	(14)		(3)		(17)
	$	886	$	3,422	$	4,308

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8A
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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+ Details

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 518	$ 277	$ 718
Other comprehensive income (loss)
Unrealized gain (loss) on available-for-sale debt securities	7	(4)	2
Tax (expense) benefit	(2)	1	0
Unrealized gain (loss) on available-for-sale debt securities, net of tax	5	(3)	2
Unrealized gain on cash flow hedges	1	0	0
Tax expense	0	0	0
Unrealized gain on cash flow hedges, net of tax	1	0	0
Other comprehensive income (loss), net of tax	6	(3)	2
Total comprehensive income, net of tax	$ 524	$ 274	$ 720

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2025

Accounting Policies [Abstract]

Schedule of other significant accounting policies

Significant Accounting Policy

Note Number

Note Title

Credit Card and Other Loans

Note 2

Credit Card and Other Loans

Allowance for Credit Losses

Note 3

Allowance for Credit Losses

Transfers of Financial Assets

Note 4

Securitizations

Investments

Note 5

Investments

Goodwill

Note 6

Goodwill and Intangible Assets, Net

Intangible Assets, Net

Note 6

Goodwill and Intangible Assets, Net

Stock-Based Compensation Expense

Note 14

Stock-Based Compensation

Income Taxes

Note 17

Income Taxes

Earnings Per Share

Note 18

Earnings Per Share

Schedule of New Accounting Pronouncements


Accounting Standards Recently Adopted during 2025
Standard	Guidance	Timing and Financial Statement Impact
Income Taxes: Improvements to Income Tax Disclosures Issued December, 2023	Requires greater disaggregation of rate reconciliation and income taxes paid information, as well as other changes intended to enhance the transparency and decision-usefulness of income tax disclosures.	Adopted effective with this report on a prospective basis. Adoption required enhancements to our income tax disclosures but did not have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Accounting Standards Recently Issued but Not Yet Adopted as of December 31, 2025
Standard	Guidance	Timing and Financial Statement Impact
Debt – Debt with Conversion and Other Options: Induced Conversions of Convertible Debt Instruments Issued November, 2024	Improves the relevance and consistency in application of the induced conversion guidance for (a) convertible debt instruments with cash conversion features and (b) debt instruments that are not currently convertible.	Adopted January 1, 2026. Adoption had no impact on our financial reporting and will not have any impact in the near term as all of our Convertible Notes had been extinguished and no Convertible Notes remained outstanding as of December 31, 2025. Additionally, adoption did not have a significant impact on our operational processes, controls and governance in support of the new guidance.
Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses Issued November, 2024	Requires disaggregated disclosure of certain income statement expenses on the face of the Consolidated Statements of Income, and further disaggregation of certain expense captions into specified categories in disclosures within the notes to the Consolidated Financial Statements.	Effective beginning with our Annual Report on Form 10-K for the year ending December 31, 2027, and effective for interim reporting periods beginning in 2028. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Intangibles – Goodwill and Other – Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software Issued September, 2025	Amends certain aspects of the accounting for and disclosure of internal-use software costs, including removing all references to prescriptive and sequential software development stages to align better with current software development methods, e.g., agile.	Effective January 1, 2028. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Financial Instruments – Credit Losses: Purchased Loans Issued November, 2025	Amends the accounting for acquired loans (excluding credit cards) that meet certain criteria at acquisition (referred to as purchased seasoned loans) by recognizing them at their purchase price plus an allowance for expected credit losses (i.e., the gross-up approach).	Effective January 1, 2027. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.

INVESTMENTS

12 Months Ended

Dec. 31, 2025

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

Investments include investment securities and various other investments primarily held by the Banks for Community Reinvestment Act (CRA) purposes. Investment securities consist of available-for-sale (AFS) debt securities, which are mortgage-backed securities and municipal bonds, and equity securities, which are mutual funds. Investment securities are carried at fair value on the Consolidated Balance Sheets. We also have other investments, which primarily include a portfolio of investments in certain limited partnerships and limited liability companies accounted for under the equity method, and therefore are recorded at cost and adjusted each period for our share of the investee’s earnings or losses, less any impairment. Other investments also include an insignificant tax credit investment where we elected to apply the proportional amortization method of accounting, for which the impacts of both the amortization of the investment and income tax benefits are fully recognized in the Provision for income taxes. Refer to Note 12, “Fair Values of Financial Instruments” for a description of our methodology for determining the fair values of our investment securities.

The following table provides a summary of our Investments as of December 31:


	2025		2024
(Millions)
Investment securities
Available-for-sale debt securities	$	171	$	170
Equity securities	50		47
Total investment securities	221		217
Equity method and other investments	63		49
Total Investments	$	284	$	266

For AFS debt securities in an unrealized loss position, any estimated credit losses are recognized in the Consolidated Statements of Income by establishing or adjusting an existing Allowance for credit losses for such losses. We typically invest in highly-rated securities with low probabilities of default; therefore, we did not have an Allowance for credit losses as of either December 31, 2025 or 2024, and did not recognize any credit losses for the periods presented. Any unrealized gains, or any portion of an AFS debt security’s non-credit-related unrealized losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax. The gross unrealized losses on our AFS debt securities are primarily attributable to an increase in the current benchmark interest rate. Any realized gains and losses are recorded in Other non-interest expenses in the Consolidated Statements of Income upon disposition of the AFS debt security, using the specific identification method. Gains and losses on investments in equity securities and CRA-related equity method investments are recorded in Other non-interest expenses in the Consolidated Statements of Income.

The table below provides unrealized gains and losses on AFS debt securities as of December 31:


	2025								2024
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
(Millions)
Available-for-sale securities	$	189	$	—	$	(18)	$	171	$	195	$	—	$	(25)	$	170
Total	$	189	$	—	$	(18)	$	171	$	195	$	—	$	(25)	$	170


	2025
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	—	$	—	$	135	$	(18)	$	135	$	(18)
Total	$	—	$	—	$	135	$	(18)	$	135	$	(18)


	2024
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	27	$	—	$	140	$	(25)	$	167	$	(25)
Total	$	27	$	—	$	140	$	(25)	$	167	$	(25)

As of December 31, 2025, our AFS debt securities included mortgage-backed securities and municipal bonds. The mortgage-backed securities, which do not have a single maturity date, have an amortized cost and estimated fair value of $158 million and $143 million, respectively, with a weighted average yield of 3.21%. The municipal bonds which all have a maturity date greater than ten years, have an amortized cost and estimated fair value of $31 million and $28 million, respectively, with a weighted average yield of 3.86%. Weighted average yield is computed using the effective yield of each security owned at the end of the period, weighted based on the amortized cost of each security. The effective yield considers the contractual coupon, amortization of premiums and accretion of discounts. Accrued interest on our AFS debt securities is included in Other assets on the Consolidated Balance Sheets and was insignificant as of both December 31, 2025 and 2024.

There were no realized gains or losses from the sale of any investment securities for the years ended December 31, 2025, 2024 and 2023.

DEPOSITS

12 Months Ended

Dec. 31, 2025

Other Liabilities Disclosure [Abstract]

DEPOSITS

. DEPOSITS

Deposits were categorized as interest-bearing or non-interest-bearing as follows, as of December 31:


	2025		2024
(Millions)
Interest-bearing	$	13,891	$	13,055
Non-interest-bearing (including cardholder credit balances)	25		27
Total deposits	$	13,916	$	13,082

Deposits by deposit type were as follows as of December 31:


	2025		2024
(Millions)
Savings accounts
Direct-to-consumer (retail)	$	4,329	$	3,226
Wholesale	3,371		3,601
Certificates of deposit
Direct-to-consumer (retail)	4,193		4,461
Wholesale	1,998		1,767
Cardholder credit balances	25		27
Total deposits	$	13,916	$	13,082

The scheduled maturities of certificates of deposit were as follows as of December 31, 2025:


(Millions)
2026 (1)	$	4,420
2027	1,295
2028	366
2029	59
2030	51
Thereafter	—
Total certificates of deposit	$	6,191

______________________________

(1)The 2026 balance includes $4 million in unamortized debt issuance costs, which are associated with the entire portfolio of certificates of deposit.

As of December 31, 2025 and 2024, retail deposits that exceeded applicable Federal Deposit Insurance Corporation (FDIC) insurance limits, which are generally $250,000 per depositor, per insured bank, per ownership category, were estimated to be $638 million (5% of Total deposits) and $531 million (4% of Total deposits), respectively. The measurement of estimated uninsured deposits aligns with regulatory guidelines.

PARENT COMPANY FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

PARENT COMPANY FINANCIAL STATEMENTS

The following Parent Company financial statements are provided in accordance with the rules of the SEC, which require such disclosure when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets. Certain of our subsidiaries may be restricted in distributing cash or other assets to the Parent Company, which could be utilized to service our indebtedness. The stand-alone parent-only financial statements are presented below.

Parent Company – Condensed Statements of Income and Comprehensive Income


	Years Ended December 31,
	2025		2024		2023
(Millions)
Total interest income	$	62	$	11	$	12
Total interest expense	108		116		111
Net interest expense	(46)		(105)		(99)
Dividends from subsidiaries	834		910		1,063
Loss from equity method investment	—		—		(6)
Total net interest and non-interest income	788		805		958
Total non-interest expenses	76		121		12
Income before income taxes and equity in undistributed net income of subsidiaries	712		684		946
Benefit for income taxes	31		38		31
Income before equity in undistributed net income of subsidiaries	743		722		977
Equity in undistributed net loss of subsidiaries	(225)		(445)		(259)
Net income	$	518	$	277	$	718

Total comprehensive income, net of tax	$	518	$	277	$	718

Parent Company – Condensed Balance Sheets


	December 31,
	2025		2024
(Millions)
Assets
Cash and cash equivalents (1)	$	312	$	21
Investment in subsidiaries	3,080		3,195
Intercompany receivables, net	733		773

Other assets	93		123
Total assets	$	4,218	$	4,112
Liabilities
Long-term and other debt	$	886	$	999

Other liabilities	5		62
Total liabilities	891		1,061
Stockholders’ equity	3,327		3,051
Total liabilities and stockholders’ equity	$	4,218	$	4,112

______________________________

(1) Includes $210 million in deposits with CCB as of December 31, 2025. There were no deposits with either of our Banks as of December 31, 2024.

Parent Company – Condensed Statements of Cash Flows


	Years Ended December 31,
	2025		2024		2023
(Millions)
Net cash provided by (used in) operating activities	$	482	$	(182)	$	(422)
Cash flows from investing activities:
Investment in subsidiaries	(75)		—		—
Net increase in amounts due from subsidiaries	(450)		—		—
Dividends received	834		910		1,063

Net cash provided by investing activities	309		910		1,063
Cash flows from financing activities:
Borrowings under debt agreements	900		300		1,401
Repayments of borrowings under debt agreements	(1,079)		(894)		(1,882)
Payment of deferred financing costs	(20)		(10)		(45)
Payment of capped call transactions	—		—		(39)
Dividends paid	(42)		(43)		(42)
Repurchases of common stock	(313)		(55)		(35)
Net proceeds from the issuance of preferred stock	71		—		—
Other	(17)		(7)		(2)
Net cash used in financing activities	(500)		(709)		(644)
Change in cash, cash equivalents and restricted cash	291		19		(3)
Cash, cash equivalents and restricted cash at beginning of year	21		2		5
Cash, cash equivalents and restricted cash at end of year	$	312	$	21	$	2

Non-cash financing activities related to the Parent Company – Condensed Statements of Cash Flows for the years ended December 31, 2025 and 2024 include the impact to Additional paid-in capital related to the debt issuance costs from the repurchased Convertible Notes.

Non-cash investing activities related to the Parent Company – Condensed Statements of Cash Flows for the year ended December 31, 2023 include a $318 million non-cash dividend in the form of an intercompany return of capital from Bread Financial Payments, Inc. to the Parent Company.

BORROWINGS OF LONG-TERM AND OTHER DEBT - Maturities (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Long-Term and Other Debt
2026	$ 0
2027	0
2028	0
2029	0
2030	0
Thereafter	900
Total maturities	900
Unamortized debt issuance costs	(14)
Total long-term and other debt	886	$ 999
Debt Issued by Consolidated VIEs
2026	1,713
2027	1,712
2028	0
2029	0
2030	0
Thereafter	0
Total maturities	3,425
Unamortized debt issuance costs	(3)
Total debt issued by consolidated VIEs	3,422	$ 4,558
2026	1,713
2027	1,712
2028	0
2029	0
2030	0
Thereafter	900
Total maturities	4,325
Unamortized debt issuance costs	(17)
Long-term debt and other debt	$ 4,308

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2025

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in each component of Accumulated other comprehensive loss, net of tax effects, are as follows for the periods presented:


	Net Unrealized Losses on AFS Securities		Net Unrealized Gains on Cash Flow Hedges		Foreign Currency Translation Losses		Accumulated Other Comprehensive Loss
(Millions)
Balance as of December 31, 2022	$	(18)	$	—	$	(3)	$	(21)
Changes in other comprehensive income	2		—		—		2
Balance as of December 31, 2023	$	(16)	$	—	$	(3)	$	(19)
Changes in other comprehensive loss	(3)		—		—		(3)
Balance as of December 31, 2024	$	(19)	$	—	$	(3)	$	(22)
Changes in other comprehensive income	5		1		—		6
Balance as of December 31, 2025	$	(14)	$	1	$	(3)	$	(16)

STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions	12 Months Ended			24 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	May 14, 2024	Jul. 01, 2022	Jun. 22, 2022	Jul. 01, 2020
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Maximum award amount	$ 1
Common stock reserved for future issuance (in shares)					7,667,594
Stock-based compensation expense	56	$ 54	$ 44
Income tax benefits related to stock-based compensation expense	$ 10	$ 9	$ 8
Forfeiture rate (as a percent)	4.00%	5.00%	5.00%
Unrecognized expenses	$ 63
Approximate weighted average period for recognizing expenses	1 year 7 months 6 days
Service- Based
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award vesting period	3 years
Performance-based restricted stock unit awards
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award vesting period	3 years
Performance-based restricted stock unit awards \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Earned percentage	0.00%			0.00%
Performance-based restricted stock unit awards \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Earned percentage	160.00%			150.00%
Restricted Stock Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Total fair value of units vested	$ 50	$ 47	$ 30
Aggregate intrinsic value of units outstanding and expected to vest	$ 194
2020 Omnibus Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares of common stock reserved for grant (in shares)								2,400,000
2022 Omnibus Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock reserved for future issuance (in shares)					5,000,000		3,075,000
Number of shares available for issuance (in shares)	1,574,387				203,687	203,687
2024 Omnibus Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares available for issuance (in shares)	61,300

REGULATORY MATTERS AND CAPITAL ADEQUACY (Tables)

12 Months Ended

Dec. 31, 2025

Regulated Operations [Abstract]

Schedule of Actual Capital Ratios and Minimum Ratios


	Ratio/Dollar Value						Minimum Ratio for Capital Adequacy Purposes *		Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions
(Millions, except percentages)	2025			2024
Total Company
Common equity tier 1 capital ratio (1)	13.0		%	12.4		%	4.5	%	N/A
Tier 1 capital ratio (2)	13.4			12.4			6.0		N/A
Total risk-based capital ratio (3)	16.8			13.8			8.0		N/A
Tier 1 leverage capital ratio (4)	12.4			11.5			4.0		N/A
Total risk-weighted assets (5)	$	19,755		$	19,928

Comenity Bank
Common equity tier 1 capital ratio (1)	15.1		%	16.5		%	4.5	%	6.5	%
Tier 1 capital ratio (2)	15.1			16.5			6.0		8.0
Total risk-based capital ratio (3)	16.5			17.9			8.0		10.0
Tier 1 leverage capital ratio (4)	14.1			15.3			4.0		5.0

Comenity Capital Bank
Common equity tier 1 capital ratio (1)	13.5		%	15.4		%	4.5	%	6.5	%
Tier 1 capital ratio (2)	14.1			15.4			6.0		8.0
Total risk-based capital ratio (3)	17.5			16.7			8.0		10.0
Tier 1 leverage capital ratio (4)	13.2			14.3			4.0		5.0

__________________________________

*The listed capital adequacy ratios exclude the Capital Conservation Buffer.

comprised of subordinated notes, as well as the allowable portion of the Allowance for credit losses.

(4)Tier 1 leverage capital ratio represents tier 1 capital divided by total average assets, after certain adjustments.

(5)Total risk-weighted assets are generally measured by allocating assets, and specified off-balance sheet exposures, to various risk categories as defined by the Basel III Standardized Approach.

BORROWINGS OF LONG-TERM AND OTHER DEBT (Tables)

12 Months Ended

Dec. 31, 2025

Debt Disclosure [Abstract]

Schedule of Debt

Long-term and other debt consisted of the following as of December 31:


Description	2025		2024		Contractual Maturities	Interest Rates
(Millions, except percentages)
Long-term and other debt:
Revolving line of credit	$	—	$	—	October 2028	(1)
Senior notes due 2026	—		100		January 2026	7.00%
Convertible senior notes due 2028	—		10		June 2028	4.25%
Senior notes due 2029	—		900		March 2029	9.75%
Senior notes due 2031	500		—		May 2031	6.75%
Subordinated notes due 2035	400		—		June 2035	8.38%
Subtotal	900		1,010
Less: Unamortized debt issuance costs	14		11
Total long-term and other debt	$	886	$	999

Debt issued by consolidated VIEs:
Fixed rate asset-backed term note securities	$	1,350	$	1,350	Various – May 2026 to Jul. 2027	4.62% to 5.47%
Conduit asset-backed securities	2,075		3,213		Various – Oct. 2026 to Feb. 2027	(2)
Subtotal	3,425		4,563
Less: Unamortized debt issuance costs	3		5
Total debt issued by consolidated VIEs	$	3,422	$	4,558

Total borrowings of long-term and other debt	$	4,308	$	5,557

______________________________

(1)The interest rate is based upon the Secured Overnight Financing Rate (SOFR) plus an applicable margin.

Schedule of Conduit Facilities

The table below summarizes our conduit capacities, borrowings and maturities for the periods presented:


(Millions)	December 31, 2024				Commitment		December 31, 2025
Conduit Facilities	Capacity		Drawn (6)		Change		Capacity		Drawn		Maturity Date (7)
Comenity Bank
WFNMNT 2009-VFN (1)	$	2,650	$	1,955	$	(900)	$	1,750	$	1,363	October 2026
WFNMT 2009-VFC1 (2)	—		141		—		—		—		—
Comenity Capital Bank
WFCMNT 2009-VFN (3)	2,250		867		(250)		2,000		712		February 2027
CCAST 2023-VFN1 (4)	250		250		(250)		—		—		—
CCAST 2024-VFN1 (5)	200		—		(200)		—		—		—
Total	$	5,350	$	3,213	$	(1,600)	$	3,750	$	2,075

______________________________

(5)2024-VFN1 Conduit issued under CCAST was retired in February 2025 pursuant to the termination, consent and waiver agreement.

Schedule of Maturities

The future principal payments for our Long-term and other debt are as follows, as of December 31, 2025:


Year	Long-Term and Other Debt		Debt Issued by Consolidated VIEs		Total
(Millions)
2026	$	—	$	1,713	$	1,713
2027	—		1,712		1,712
2028	—		—		—
2029	—		—		—
2030	—		—		—
Thereafter	900		—		900
Total maturities	900		3,425		4,325
Unamortized debt issuance costs	(14)		(3)		(17)
	$	886	$	3,422	$	4,308

ALLOWANCE FOR CREDIT LOSSES (Tables)

12 Months Ended

Dec. 31, 2025

Credit Loss [Abstract]

Schedule of Company's Allowance for Loan Loss

The following table provides our Allowance for credit losses for our Credit card and other loans. The amount of the related Allowance for credit losses on other loans is insignificant and therefore has been included in the table below as of December 31:


	2025		2024		2023
(Millions)
Beginning balance	$	2,241	$	2,328	$	2,464

Provision for credit losses (1)	1,242		1,397		1,229
Change in the estimate for uncollectible unpaid interest and fees	—		5		10
Net principal losses (2)	(1,377)		(1,489)		(1,375)
Ending balance	$	2,106	$	2,241	$	2,328

______________________________

(1)Provision for credit losses includes a build/release for the Allowance for credit losses, as well as replenishment of Net principal losses.

(2)Net principal losses are presented net of recoveries of $347 million, $367 million and $332 million for the years ended December 31, 2025, 2024 and 2023, respectively. Net principal losses for the year ended December 31, 2023 include an adjustment of $10 million related to the effects of the purchase of previously written-off accounts that were sold to a third-party debt collection agency; no such adjustment was made for the years ended December 31, 2025 and 2024.

INCOME TAXES - Reconciliation (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Amount
Income from continuing operations, before income taxes	$ 615	$ 381	$ 968
U.S. Federal statutory tax	129	80	203
State and local income taxes, net of federal benefits	5	15	27
Tax credits	(3)
Non-deductible expenses	5
Changes in unrecognized tax benefits	(39)
Other adjustments	(3)	(1)	(2)
Effective income tax	$ 94	$ 102	$ 231
Percent
U.S. Federal statutory tax	21.00%
State and local income taxes, net of federal benefits	0.80%
Tax credits	(0.50%)
Non-deductible expenses	0.90%
Changes in unrecognized tax benefits	(6.50%)
Other adjustments	(0.50%)
Effective income tax	15.20%

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2025

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the years ended December 31:


	2025		2024		2023
(Millions, except per share amounts)
Numerator
Income from continuing operations	$	521	$	279	$	737
Loss from discontinued operations, net of income taxes (1)	(3)		(2)		(19)
Net income available to common stockholders	$	518	$	277	$	718

Denominator
Weighted average common stock outstanding – basic	46.8		49.6		49.8
Weighted average effect of dilutive securities
Add: net effect of dilutive unvested restricted stock awards (2)	0.8		0.7		0.2
Add: dilutive effect of Convertible Notes (3)(4)	—		0.1		—
Weighted average common stock outstanding – diluted	47.6		50.4		50.0

Basic EPS
Income from continuing operations	$	11.15	$	5.63	$	14.79
Loss from discontinued operations	$	(0.08)	$	(0.05)	$	(0.40)
Net income per share	$	11.07	$	5.58	$	14.39

Diluted EPS
Income from continuing operations	$	10.96	$	5.54	$	14.74
Loss from discontinued operations	$	(0.07)	$	(0.05)	$	(0.40)
Net income per share	$	10.89	$	5.49	$	14.34

______________________________

(1)Includes amounts that related to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. For additional information refer to Note 1, “Description of Business, Basis of Presentation and Significant Accounting Policies” to the audited Consolidated Financial Statements.

(2)As the effect would have been anti-dilutive, for the years ended December 31, 2025, 2024 and 2023, approximately 0.4 million, 0.6 million, and 1.2 million, respectively, restricted stock awards were excluded from each calculation of weighted average dilutive common shares.

(3)The conversion feature of the Convertible Notes had a dilutive impact on EPS when the average market price of our common stock for the period exceeded the conversion price of $38.43 per share, and has been reflected in the table above. As of December 31, 2025, all of the Convertible Notes have been extinguished and no Convertible Notes remain outstanding.

(4)In connection with the issuance of the Convertible Notes, we entered into privately negotiated Capped Calls with certain financial institution counterparties. Diluted weighted average common stock does not include the impact of the Capped Calls we entered into concurrently with the issuance of the Convertible Notes, as the effect would have been anti-dilutive.

INCOME TAXES

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

We file income tax returns in U.S. federal, state, local and foreign jurisdictions, as applicable. Provisions for current income tax liabilities are calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings also include deferred income tax provisions and provisions for uncertain tax positions.

Differences between the audited Consolidated Financial Statements and tax bases of assets and liabilities give rise to deferred tax assets and liabilities, which measure the future tax effects of items recognized in the audited Consolidated Financial Statements. Changes in deferred income tax assets and liabilities associated with components of Stockholders’ equity are charged or credited directly to Stockholders’ equity. Otherwise, changes in deferred income tax assets and liabilities are included as a component of Provision for income taxes. The effect on deferred income tax assets and liabilities attributable to changes in enacted tax rates is charged or credited to Provision for income taxes in the period of enactment.

Deferred tax assets require certain estimates and judgments in order to determine whether it is more likely than not that all or a portion of the benefit of a deferred tax asset will not be realized. In evaluating our deferred tax assets on a quarterly basis as new facts and circumstances emerge, we analyze and estimate the impact of future taxable income, reversing temporary differences and available tax planning strategies. Uncertainties can lead to changes in the ultimate realization of deferred tax assets. A liability for unrecognized tax benefits, representing the difference between a tax position taken or expected to be taken in a tax return and the benefit recognized in the audited Consolidated Financial Statements, inherently requires estimates and judgments. A tax position is recognized only when it is more likely than not to be sustained, based purely on its technical merits after examination by the relevant taxing authority, and the amount recognized is the benefit we believe is more likely than not to be realized upon ultimate settlement. We evaluate our tax positions as new facts and circumstances become available, making adjustments to unrecognized tax benefits as appropriate. Uncertainties can mean the tax benefits ultimately realized differ from amounts previously recognized, with any differences recorded in Provision for income taxes, along with amounts for estimated interest and penalties.

The components of our Income from continuing operations before income taxes and Provision for income taxes included in the Consolidated Statements of Income were as follows for the years ended December 31:


	2025		2024		2023
(Millions)
Components of Income from continuing operations before income taxes
Domestic	$	608	$	375	$	964
Foreign	7		6		4
Total Income from continuing operations before income taxes	$	615	$	381	$	968

Components of Provision for income taxes
Current
Federal	$	36	$	156	$	261
State and local	(34)		29		37
Foreign	2		2		1
Total current income tax expense	4		187		299
Deferred
Federal	98		(73)		(65)
State and local	(7)		(10)		(2)
Foreign	(1)		(2)		(1)
Total deferred income tax expense (benefit)	90		(85)		(68)
Total Provision for income taxes	$	94	$	102	$	231

The following table presents Income taxes paid, net of refunds for the year ended December 31:


	2025
(Millions)
Federal	$	33
State and local	18
Foreign	2
Total income taxes paid during the year, net of refunds (1)	$	53

______________________________

(1) During the year ended December 31, 2025 Income taxes paid, net of refunds, for the State of California were $4 million, which exceeded 5% of our Total income taxes paid, net of refunds.

In accordance with the applicable accounting guidance in effect for the year ended December 31, 2025, the following table reconciles the U.S. Federal statutory tax amount and rate to our actual effective income tax amount and rate for the year ended December 31:


	2025
	Amount		Percent
(Millions)
Income from continuing operations, before income taxes	$	615

U.S. Federal statutory tax	129		21.0	%
State and local income taxes, net of federal income tax effect (1)	5		0.8	%



Tax credits	(3)		(0.5)	%



Non-deductible expenses	5		0.9	%



Changes in unrecognized tax benefits	(39)		(6.5)	%
Other adjustments	(3)		(0.5)	%

Effective income tax	$	94	15.2	%

______________________________

(1) In 2025, state taxes in New York and Utah made up the majority (greater than 50 percent) of the tax effect in this category.

In accordance with the applicable accounting guidance in effect for the years ended December 31, 2024 and 2023, the following table reconciles the U.S. Federal statutory tax amount to our recorded Provision for income taxes for the years ended December 31:


	2024		2023
(Millions)
Expected expense at statutory rate	$	80	$	203
Increase (decrease) in income taxes resulting from:
State and local income taxes, net of federal income tax effect	15		27
Non-deductible expenses	29		8
Valuation allowance	(1)		(5)
Audit resolutions	(20)		—
Other	(1)		(2)
Total	$	102	$	231

For the tax year ended December 31, 2025, the decrease in the State and local income taxes, net of federal income tax effect is primarily related to a tax law change in the State of California.

For the year ended December 31, 2024, the increase in the non-deductible expenses from prior periods is primarily related to the non-deductible portion of our repurchased Convertible Notes transactions. We also utilized a portion of our capital loss, and therefore released the associated portion of valuation allowance against it. In addition, our tax expense decreased by approximately $20 million as a result of favorable audit resolutions.

For the year ended December 31, 2023, we utilized a portion of our capital loss, and therefore released the associated portion of the valuation allowance against it.

The following table provides the significant components of Deferred tax assets and liabilities as of December 31:


	2025		2024
(Millions)
Deferred tax assets
Deferred revenue	$	14	$	12
Allowance for credit losses	513		534
Net operating loss carryforwards and other carryforwards	47		48
Operating lease liabilities	19		29
Research & development expenses	23		53
Accrued expenses and other	80		87
Total deferred tax assets	696		763
Valuation allowance	(20)		(19)
Deferred tax assets, net of valuation allowance	676		744
Deferred tax liabilities
Deferred income	$	2	$	2
Depreciation	30		—
Right of use assets	13		19
Intangible assets	15		15
Total deferred tax liabilities	60		36

Net deferred tax assets	$	616	$	708

Amounts recognized on the Consolidated Balance Sheets:
Other assets	$	616	$	708

As of December 31, 2025, included in our U.S. tax returns are approximately $107 million of U.S. federal net operating loss carryovers (NOLs) and federal capital losses of approximately $48 million to offset capital gains. With the exception of NOLs generated after December 31, 2017, these attributes expire at various times through the year 2034. As of December 31, 2025, we have state NOLs of approximately $237 million available to offset future state taxable income, as well as state capital losses of approximately $15 million to offset capital gains. With the exception of some state NOLs generated after December 31, 2017, these NOLs and capital losses will expire at various times through the year 2043. As of December 31, 2025, we have tax credits in foreign jurisdictions of approximately $4 million available to offset future tax liabilities. These credits expire at various times through the year 2041.

In 2024 we recorded a tax expense of approximately $7 million in Additional paid-in capital related to the tax impact of the repurchased Convertible Notes, specifically, the write-off of the associated deferred tax asset.

We use the portfolio approach relating to the release of stranded tax effects recorded in Accumulated other comprehensive loss.

The following table presents changes in unrecognized tax benefits:


(Millions)
Balance as of December 31, 2022	$	242
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(11)
Increases related to current year tax positions	13
Settlements during the period	(10)
Lapses of applicable statutes of limitations	(20)
Balance as of December 31, 2023	$	215
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(40)
Increases related to current year tax positions	9
Settlements during the period	(21)
Lapses of applicable statutes of limitations	(10)
Balance as of December 31, 2024	$	154
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(27)
Increases related to current year tax positions	4

Lapses of applicable statutes of limitations	(10)
Balance as of December 31, 2025	$	122

We recognize potential accrued interest and penalties related to unrecognized tax benefits in Provision for income taxes. We have potential cumulative interest and penalties with respect to unrecognized tax benefits of approximately $62 million, $86 million and $84 million as of December 31, 2025, 2024 and 2023, respectively. For those same years we recorded a benefit of approximately $19 million and expenses of $2 million and $9 million, respectively, in Provision for income taxes for potential interest and penalties for unrecognized tax benefits.

As of December 31, 2025, 2024 and 2023, we had unrecognized tax benefits of approximately $155 million, $200 million and $226 million, respectively, that, if recognized, would impact the effective tax rate.

With few exceptions, U.S. federal income tax returns are no longer subject to examination for years before 2022, and state and local income tax and foreign income tax returns are no longer subject to examination for years before 2021.

- Definition

The entire disclosure for income tax.

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+ Details

OTHER LIABILITIES (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Other Liabilities [Abstract]
Accounts payable and other brand partner liabilities	$ 289	$ 326
Accrued liabilities	290	295
Long-term tax reserves	189	250
Operating lease liabilities	$ 85	$ 128
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Total other liabilities	Total other liabilities
Other	$ 259	$ 202
Total other liabilities	$ 1,112	$ 1,201

- Definition

Amount of liabilities classified as other.

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CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

12 Months Ended

Dec. 31, 2025

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of Changes in Each Component of Accumulated Comprehensive Income (loss), Net of Tax Effects

The changes in each component of Accumulated other comprehensive loss, net of tax effects, are as follows for the periods presented:


	Net Unrealized Losses on AFS Securities		Net Unrealized Gains on Cash Flow Hedges		Foreign Currency Translation Losses		Accumulated Other Comprehensive Loss
(Millions)
Balance as of December 31, 2022	$	(18)	$	—	$	(3)	$	(21)
Changes in other comprehensive income	2		—		—		2
Balance as of December 31, 2023	$	(16)	$	—	$	(3)	$	(19)
Changes in other comprehensive loss	(3)		—		—		(3)
Balance as of December 31, 2024	$	(19)	$	—	$	(3)	$	(22)
Changes in other comprehensive income	5		1		—		6
Balance as of December 31, 2025	$	(14)	$	1	$	(3)	$	(16)

BORROWINGS OF LONG-TERM AND OTHER DEBT - Conduit Facilities (Details) - USD ($) $ in Millions	1 Months Ended		12 Months Ended
	Oct. 31, 2025	Feb. 28, 2025	Dec. 31, 2025	Dec. 31, 2024
Debt Instrument [Line Items]
Drawn				$ 1,100
2009-VFN Conduit Facility
Debt Instrument [Line Items]
Capacity	$ 1,750	$ 2,000
Commitment change increase (decrease)	$ (900)	$ (250)
Comenity Bank \| Line of Credit \| WFNMNT 2009-VFN
Debt Instrument [Line Items]
Capacity			$ 1,750	2,650
Drawn			1,363	1,955
Commitment change increase (decrease)			(900)
Comenity Bank \| Line of Credit \| WFNMT 2009-VFC1
Debt Instrument [Line Items]
Capacity			0	0
Drawn			0	141
Commitment change increase (decrease)			0
Comenity Capital Bank \| Line of Credit
Debt Instrument [Line Items]
Capacity			3,750	5,350
Drawn			2,075	3,213
Commitment change increase (decrease)			(1,600)
Comenity Capital Bank \| Line of Credit \| WFCMNT 2009-VFN
Debt Instrument [Line Items]
Capacity			2,000	2,250
Drawn			712	867
Commitment change increase (decrease)			(250)
Comenity Capital Bank \| Line of Credit \| CCAST 2023-VFN1
Debt Instrument [Line Items]
Capacity			0	250
Drawn			0	250
Commitment change increase (decrease)			(250)
Comenity Capital Bank \| Line of Credit \| CCAST 2024-VFN1
Debt Instrument [Line Items]
Capacity			0	200
Drawn			0	$ 0
Commitment change increase (decrease)			$ (200)

EARNINGS PER SHARE (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions

12 Months Ended

Dec. 31, 2025

Dec. 31, 2024

Dec. 31, 2023

Numerator:

Income from continuing operations

$ 521

$ 279

$ 737

Loss from discontinued operations, net of income taxes

^[1]

(3)

(2)

(19)

Net income available to common stockholders

$ 518

$ 277

$ 718

Denominator:

Weighted average common stock outstanding- basic (in shares)

46.8

49.6

49.8

Add: net effect of dilutive unvested restricted stock awards (in shares)

0.8

0.7

0.2

Add: dilutive effect of Convertible Notes (in shares)

0.0

0.1

0.0

Weighted average common stock outstanding - diluted (in shares)

47.6

50.4

50.0

Basic EPS

Income from continuing operations (in dollars per share)

$ 11.15

$ 5.63

$ 14.79

Loss from discontinued operations (in dollars per share)

(0.08)

(0.05)

(0.40)

Net income per share (in dollars per share)

11.07

5.58

14.39

Diluted EPS

Income from continuing operations (in dollars per share)

10.96

5.54

14.74

Loss from discontinued operations (in dollars per share)

(0.07)

(0.05)

(0.40)

Net income per share (in dollars per share)

$ 10.89

$ 5.49

$ 14.34

Share awards excluded in the computation of diluted earnings per share (in shares)

0.4

0.6

1.2

Convertible senior notes due 2028

Diluted EPS

Conversion price (usd per share)

$ 38.43

[1]

Includes amounts that related to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. For additional information refer to Note 1, “Description of Business, Basis of Presentation and Significant Accounting Policies” to the audited Consolidated Financial Statements.

COMMITMENTS AND CONTINGENCIES	12 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2025
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time we are subject to various lawsuits, claims, disputes, or potential claims or disputes, and other proceedings, arising in the ordinary course of business that we believe, based on our current knowledge, will not have a material adverse effect on our business, consolidated financial condition or liquidity, including claims and lawsuits alleging breaches of our contractual obligations, arbitrations, class actions and other litigation, arising in connection with our business activities. However, in light of the uncertainties involved in such matters, including the fact that some pending legal proceedings are at preliminary stages or seek an indeterminate amount of damages, penalties or fines, it is possible that the outcome of legal proceedings could have a material impact on our results of operations. Certain legal proceedings involving us or our subsidiaries are described further below. On February 20, 2024, we and our general counsel were named as defendants in an adversary proceeding filed by the liquidating trustee in LVI’s Chapter 11 bankruptcy case in the United States Bankruptcy Court for the Southern District of Texas, captioned Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc., Case No. 24-03027 (Bankr. S.D. Tex.), alleging actual and constructive fraudulent transfers, among other claims, in connection with our spinoff of LVI. Also on February 20, 2024, the liquidating trustee filed an action in the United States District Court for the District of Delaware against us, each of the members of our Board of Directors at the time of the spinoff, and certain members of our management team, captioned Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc., Case No. 24-cv-00226-RGA (D. Del.), alleging certain breaches of fiduciary duties (and aiding and abetting breaches of fiduciary duties) in connection with the spinoff. Subsequently, the liquidating trustee voluntarily dismissed without prejudice the complaint in the District of Delaware and commenced on March 20, 2024 a substantially similar action in Delaware Chancery Court, captioned Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc., Case No. 2024-0277-MTZ (Del. Ch.), against the same parties and asserting the same claims. Among other things, in each of the Texas and Delaware actions, the liquidating trustee seeks damages in the amount of approximately $750 million plus interest, fees and expenses. In the Texas action, the United States Bankruptcy Court permitted certain of the claims to move past a motion to dismiss, and on January 22, 2026, the Court denied our motion for partial summary judgment on other claims; on February 5, 2026, we filed a motion for leave to appeal that decision to the United States District Court. We and certain current and former members of our management team have also been named as defendants in other litigation matters relating to the LVI spinoff. LoyaltyOne, Co. (the LVI subsidiary that operated its Canadian AIR MILES business) filed suit against us and our general counsel in the Ontario Superior Court of Justice in Canada on October 18, 2023, in an action captioned LoyaltyOne, Co. v. Bread Financial Holdings, Inc. et al. The lawsuit asserts that our general counsel, in his capacity as a pre-spinoff director of LoyaltyOne, Co., breached various fiduciary duties owed to LoyaltyOne, Co. in connection with the LVI spinoff and certain other transactions, and that Bread Financial assisted in and benefited from those breaches. The lawsuit seeks damages in the amount of $775 million. LoyaltyOne, Co. is also contesting our entitlement to certain potential tax refunds under the tax matters agreement, in proceedings pursuant to the Canadian Companies’ Creditors Arrangement Act in the Commercial List of the Ontario Superior Court of Justice, captioned In re Matter of a Plan of Compromise or Arrangement of LoyaltyOne, Co., Case No. CV-23-00696017-00CL (the Tax Matters Dispute). In July 2024, the judge presiding over the Tax Matters Dispute issued an order in our favor, and LoyaltyOne, Co. filed a motion for leave to appeal that order, which motion was dismissed by the Court of Appeal for Ontario in March 2025. LoyaltyOne, Co. has indicated that it will continue to seek to contest our entitlement to these potential tax refunds. A hearing is scheduled before the Ontario Superior Court of Justice in March 2026 at which LoyaltyOne, Co. and certain creditors of LVI are seeking a temporary stay of these Canadian proceedings pending final resolution of the U.S. litigation filed by the liquidating trustee or, alternatively, an order that LoyaltyOne, Co. is entitled to breach the tax matters agreement and retain the tax refunds at issue. Finally, on April 27, 2023, we and certain current and former members of our management team were named as defendants in a putative federal securities class action filed in the United States District Court for the Southern District of Ohio, captioned Newtyn Partners, LP v. Alliance Data Systems n/k/a Bread Financial Holdings, Inc., Case No. 23-cv-1451-EAS (S.D. Ohio), concerning disclosures made about LVI’s business prior to the spinoff. The lead plaintiff in this matter filed an amended complaint on March 21, 2024. In March 2025, the United States District Court for the Southern District of Ohio granted our and the other defendants’ motions to dismiss in full and with prejudice; the court entered judgment in favor of all defendants and terminated the case. The plaintiffs appealed the District Court’s ruling in the Newtyn Partners matter, and the United States Court of Appeals for the Sixth Circuit affirmed the dismissal of the suit in January 2026. In all these actions related to the spinoff, we believe the allegations contained in the complaints are without merit and intend to defend the cases. We cannot predict at this point the length of time that these actions will be ongoing or the liability, if any, which may arise therefrom. Some matters pending against us specify the damages sought, others seek an unspecified amount of damages or are at very early stages of the legal process. In matters where the amount of damages claimed against us are stated, the claimed amount may be exaggerated and/or unsupported. While some matters have not yet progressed sufficiently through discovery or have had development of important factual information and legal issues to enable us to estimate an amount of loss or a range of possible loss, other matters may have progressed sufficiently to enable an estimate of an amount of loss, or a range of possible loss. We accrue for a loss contingency when it is both probable that a loss has occurred, and the amount of loss can be reasonably estimated; however, there may be instances in which an exposure to a loss contingency exceeds our accrual. On a quarterly basis we evaluate developments in the legal proceedings against us that could cause an increase or decrease in the amount of the accrual that has been previously recorded.

ALLOWANCE FOR CREDIT LOSSES - Rollforward (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 2,241	$ 2,328	$ 2,464
Provision for credit losses	1,242	1,397	1,229
Change in the estimate for uncollectible unpaid interest and fees	0	5	10
Net principal losses	(1,377)	(1,489)	(1,375)
Ending balance	2,106	2,241	2,328
Recovery	$ 347	367	$ 332
Recovery adjustment		$ 10

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

FAIR VALUES OF FINANCIAL INSTRUMENTS - Assets and Liabilities Not Carried at Fair Value (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Financial assets
Credit card and other loans, net	$ 18,747	$ 19,011
Total assets measured at fair value	18,747	19,011
Financial liabilities
Deposits	13,928	13,087
Debt issued by consolidated VIEs	3,442	4,572
Long-term and other debt	931	1,085
Total liabilities measured at fair value	18,301	18,744
Level 1
Financial assets
Credit card and other loans, net	0	0
Total assets measured at fair value	0	0
Financial liabilities
Deposits	0	0
Debt issued by consolidated VIEs	0	0
Long-term and other debt	0	0
Total liabilities measured at fair value	0	0
Level 2
Financial assets
Credit card and other loans, net	0	0
Total assets measured at fair value	0	0
Financial liabilities
Deposits	13,928	13,087
Debt issued by consolidated VIEs	3,442	4,572
Long-term and other debt	931	1,085
Total liabilities measured at fair value	18,301	18,744
Level 3
Financial assets
Credit card and other loans, net	18,747	19,011
Total assets measured at fair value	18,747	19,011
Financial liabilities
Deposits	0	0
Debt issued by consolidated VIEs	0	0
Long-term and other debt	0	0
Total liabilities measured at fair value	$ 0	$ 0

FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair Value of Instruments (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Financial assets
Credit card and other loans, net	$ 18,747	$ 19,011
Investment securities	221	217
Financial liabilities
Deposits	13,928	13,087
Debt issued by consolidated VIEs	3,442	4,572
Carrying Amount
Financial assets
Credit card and other loans, net	16,699	16,655
Investment securities	221	217
Financial liabilities
Deposits	13,916	13,082
Debt issued by consolidated VIEs	3,422	4,558
Long-term and other debt	886	999
Fair Value
Financial assets
Credit card and other loans, net	18,747	19,011
Investment securities	221	217
Financial liabilities
Deposits	13,928	13,087
Debt issued by consolidated VIEs	3,442	4,572
Long-term and other debt	$ 931	$ 1,085

- Definition

Fair value portion of investment securities, including, but not limited to, marketable securities, derivative financial instruments, and investments accounted for under the equity method.

+ References + Details

- Definition

The fair value amount of long-term debt whether such amount is presented as a separate caption or as a parenthetical disclosure. Additionally, this element may be used in connection with the fair value disclosures required in the footnote disclosures to the financial statements. The element may be used in both the balance sheet and disclosure in the same submission.

+ References

+ Details

STOCK-BASED COMPENSATION - Restricted Stock Unit Awards and stock-Based Option (Details) - $ / shares	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Restricted Stock Units
Number of Shares
Balance at the beginning of the period (in shares)	2,747,196	2,089,831	1,272,609
Shares granted	1,025,090	1,551,145	1,348,052
Shares vested (in shares)	(1,061,999)	(825,768)	(443,303)
Shares forfeited (in shares)	(59,233)	(68,012)	(87,527)
Balance at the end of the period (in shares)	2,651,054	2,747,196	2,089,831
Outstanding and Expected to Vest (in shares)	2,621,537
Weighted Average Fair Value
Balance at the beginning of the period (in dollars per share)	$ 41.54	$ 49.89	$ 68.86
Shares granted (in dollars per share)	61.93	37.78	38.02
Shares vested (in dollars per share)	47.05	56.58	67.49
Shares forfeited (in dollars per share)	45.17	43.39	53.82
Balance at the end of the period (in dollars per share)	47.20	$ 41.54	$ 49.89
Outstanding and Expected to Vest (in dollars per share)	$ 46.85
Market-based restricted stock unit awards
Weighted Average Fair Value
Attainment percentage	100.00%	100.00%	100.00%
Performance- Based
Number of Shares
Balance at the beginning of the period (in shares)	479,458	331,279	164,946
Shares granted	157,788	243,312	175,587
Shares vested (in shares)	(99,184)	(95,133)	(9,254)
Shares forfeited (in shares)	0	0	0
Balance at the end of the period (in shares)	538,062	479,458	331,279
Weighted Average Fair Value
Attainment percentage	100.00%	100.00%	100.00%
Service- Based
Number of Shares
Balance at the beginning of the period (in shares)	2,267,738	1,758,552	1,107,663
Shares granted	867,302	1,307,833	1,172,465
Shares vested (in shares)	(962,815)	(730,635)	(434,049)
Shares forfeited (in shares)	(59,233)	(68,012)	(87,527)
Balance at the end of the period (in shares)	2,112,992	2,267,738	1,758,552

Cybersecurity Risk Management and Strategy Disclosure	12 Months Ended
Cybersecurity Risk Management and Strategy Disclosure	Dec. 31, 2025
Cybersecurity Risk Management, Strategy, and Governance [Line Items]
Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block]	As noted above under “Risk Management,” we maintain an information and cybersecurity risk management program, which is led by our CISO and is designed to protect the confidentiality, integrity and availability of critical information and information systems. The program is designed based on the NIST CSF 2.0; provided that this does not imply that we meet any particular technical standards, specifications or requirements, only that we use the NIST CSF 2.0 as a guide to help us identify, assess and manage cybersecurity risks relevant to our business. Our cybersecurity risk management program is integrated into our overall ERM program, and shares common methodologies, reporting channels and governance processes that apply across the ERM program to other legal, compliance, strategic, operational, and financial risk areas. Our cybersecurity risk management program includes: •risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; •a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; •the use of external service providers, where appropriate, to assess, test, train or otherwise assist with aspects of our security controls; •security tools deployed in the IT environment for protection against and monitoring for suspicious activity; •cybersecurity awareness training of our employees, including incident response personnel, and senior management; •a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and •a third-party risk management process for service providers, suppliers, and vendors. We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition. We face certain ongoing risks from cybersecurity threats such as loss or theft of data, ransomware or other disruptive attacks from financially motivated bad actors, and third-party supply chain issues that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, and financial condition. For further discussion, see “Item 1A. Risk Factors – Risk Management” and “Item 1A. Risk Factors – Cybersecurity, Technology and Vendor Risks.”
Cybersecurity Risk Management Processes Integrated [Flag]	true
Cybersecurity Risk Management Processes Integrated [Text Block]	The program is designed based on the NIST CSF 2.0; provided that this does not imply that we meet any particular technical standards, specifications or requirements, only that we use the NIST CSF 2.0 as a guide to help us identify, assess and manage cybersecurity risks relevant to our business. Our cybersecurity risk management program is integrated into our overall ERM program, and shares common methodologies, reporting channels and governance processes that apply across the ERM program to other legal, compliance, strategic, operational, and financial risk areas. Our cybersecurity risk management program includes: •risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; •a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; •the use of external service providers, where appropriate, to assess, test, train or otherwise assist with aspects of our security controls; •security tools deployed in the IT environment for protection against and monitoring for suspicious activity; •cybersecurity awareness training of our employees, including incident response personnel, and senior management; •a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and •a third-party risk management process for service providers, suppliers, and vendors.
Cybersecurity Risk Management Third Party Engaged [Flag]	true
Cybersecurity Risk Third Party Oversight and Identification Processes [Flag]	true
Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag]	false
Cybersecurity Risk Board of Directors Oversight [Text Block]	Cybersecurity Governance Our Board of Directors considers cybersecurity risk to be a critical part of its risk oversight function and has delegated to the Risk & Technology Committee primary oversight of cybersecurity and other information technology risks. The Audit Committee also reviews cybersecurity matters as part of its oversight of major financial risk exposures. The Risk & Technology Committee oversees management’s implementation of our cybersecurity risk management program, and receives regular reports from management on our cybersecurity risks. In addition, management updates the Risk & Technology Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Risk & Technology Committee periodically reports to the Board of Directors regarding its activities, including those related to cybersecurity. As part of its oversight of major financial risk exposures, the Audit Committee also reviews with management and our internal and independent auditors our risk assessments and risk management program, including with respect to cybersecurity. Board members receive presentations on cybersecurity topics from our CISO or external experts as part of the Board’s continuing education on topics that impact public companies. Our management team, including our CISO, CRO and CORO, is responsible for assessing and managing our material risks from cybersecurity threats. Our management team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our CISO works closely with our CRO and CORO, who are responsible for providing effective oversight and challenge to the activities of our CISO. Our CISO, who reports to our Executive Vice President and Chief Technology Officer, has 25 years of cybersecurity and information security experience across a number of regulated industries, including financial services, healthcare and defense and national security. Our CISO has been a Certified Information System Security Professional (CISSP) for over 20 years and serves on the governing body of various organizations focused on technology and cybersecurity, including as an Advisory Council Member to the Harvard Business Review and a Governing Board Member of Evanta, an organization of peer-CISOs. Each of our CRO (who reports to our Chief Executive Officer) and CORO (who reports to our CRO) has over 20 years of financial services experience in operations and risk management. Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, and, as appropriate, provides briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the IT environment.
Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block]	Our Board of Directors considers cybersecurity risk to be a critical part of its risk oversight function and has delegated to the Risk & Technology Committee primary oversight of cybersecurity and other information technology risks.
Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block]	The Risk & Technology Committee oversees management’s implementation of our cybersecurity risk management program, and receives regular reports from management on our cybersecurity risks. In addition, management updates the Risk & Technology Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
Cybersecurity Risk Role of Management [Text Block]	The Audit Committee also reviews cybersecurity matters as part of its oversight of major financial risk exposures. The Risk & Technology Committee oversees management’s implementation of our cybersecurity risk management program, and receives regular reports from management on our cybersecurity risks. In addition, management updates the Risk & Technology Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
Cybersecurity Risk Management Positions or Committees Responsible [Flag]	true
Cybersecurity Risk Management Positions or Committees Responsible [Text Block]	The Risk & Technology Committee periodically reports to the Board of Directors regarding its activities, including those related to cybersecurity. As part of its oversight of major financial risk exposures, the Audit Committee also reviews with management and our internal and independent auditors our risk assessments and risk management program, including with respect to cybersecurity. Board members receive presentations on cybersecurity topics from our CISO or external experts as part of the Board’s continuing education on topics that impact public companies. Our management team, including our CISO, CRO and CORO, is responsible for assessing and managing our material risks from cybersecurity threats. Our management team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our CISO works closely with our CRO and CORO, who are responsible for providing effective oversight and challenge to the activities of our CISO.
Cybersecurity Risk Management Expertise of Management Responsible [Text Block]	. Each of our CRO (who reports to our Chief Executive Officer) and CORO (who reports to our CRO) has over 20 years of financial services experience in operations and risk management.
Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block]	The Risk & Technology Committee periodically reports to the Board of Directors regarding its activities, including those related to cybersecurity. As part of its oversight of major financial risk exposures, the Audit Committee also reviews with management and our internal and independent auditors our risk assessments and risk management program, including with respect to cybersecurity. Board members receive presentations on cybersecurity topics from our CISO or external experts as part of the Board’s continuing education on topics that impact public companies.
Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag]	true

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2025

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Basic earnings (losses) per share (EPS) is based only on the weighted average number of common shares outstanding, excluding any dilutive effects of unvested restricted stock awards or other dilutive securities. Diluted EPS is based on (i) the weighted average number of common and potentially dilutive common shares (unvested restricted stock awards outstanding during the year), pursuant to the Treasury Stock method, and (ii) the potential conversion of the Convertible Notes, pursuant to the If-converted method.

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the years ended December 31:


	2025		2024		2023
(Millions, except per share amounts)
Numerator
Income from continuing operations	$	521	$	279	$	737
Loss from discontinued operations, net of income taxes (1)	(3)		(2)		(19)
Net income available to common stockholders	$	518	$	277	$	718

Denominator
Weighted average common stock outstanding – basic	46.8		49.6		49.8
Weighted average effect of dilutive securities
Add: net effect of dilutive unvested restricted stock awards (2)	0.8		0.7		0.2
Add: dilutive effect of Convertible Notes (3)(4)	—		0.1		—
Weighted average common stock outstanding – diluted	47.6		50.4		50.0

Basic EPS
Income from continuing operations	$	11.15	$	5.63	$	14.79
Loss from discontinued operations	$	(0.08)	$	(0.05)	$	(0.40)
Net income per share	$	11.07	$	5.58	$	14.39

Diluted EPS
Income from continuing operations	$	10.96	$	5.54	$	14.74
Loss from discontinued operations	$	(0.07)	$	(0.05)	$	(0.40)
Net income per share	$	10.89	$	5.49	$	14.34

______________________________

EMPLOYEE BENEFIT PLANS	12 Months Ended
EMPLOYEE BENEFIT PLANS	Dec. 31, 2025
Retirement Benefits [Abstract]
EMPLOYEE BENEFIT PLANS	EMPLOYEE BENEFIT PLANS Employee Stock Purchase Plan In March 2015, our Board of Directors adopted the 2015 Employee Stock Purchase Plan (the 2015 ESPP), which was subsequently approved by our stockholders on June 3, 2015. The 2015 ESPP became effective July 1, 2015 with no definitive expiration date; however, our Board of Directors may at any time and for any reason terminate or amend the 2015 ESPP. No employee may purchase more than $25,000 worth of stock under the 2015 ESPP in any calendar year, and no employee may purchase stock under the 2015 ESPP if such purchase would cause the employee to own more than 5% of the voting rights or value of our common stock. The 2015 ESPP provides for six-month offering periods, commencing on the first trading day of the first and third calendar quarter of each year and ending on the last trading day of each subsequent calendar quarter. The purchase price of the common stock upon exercise is 85% of the fair market value of shares on the applicable purchase date as determined by averaging the high and low trading prices of the last trading day of each six-month period as defined above. An employee elects to participate and have contributions deducted through payroll deductions. The 2015 ESPP also provides for the issuance of any remaining shares available for issuance under our 2005 Employee Stock Purchase Plan, which were 441,327 shares as of June 30, 2015. The 2015 ESPP reserved an additional 1,000,000 shares of our common stock for issuance under the 2015 Plan, bringing the maximum number of shares reserved for issuance under the 2015 ESPP to 1,441,327 shares, subject to adjustment as provided in the 2015 ESPP. During the year ended December 31, 2025, we issued 94,497 shares of common stock under the 2015 ESPP at a weighted-average issue price of $54.69. Since the 2015 ESPP became effective on July 1, 2015, 1,015,496 shares of common stock have been issued, with 425,831 shares therefore available for issuance. 401(k) Retirement Savings Plan The Bread Financial 401(k) Plan (the Plan), as amended, is a defined contribution plan that is qualified under Section 401(k) of the Internal Revenue Code of 1986. The Plan is an IRS-approved safe harbor plan design that eliminates the need for most discrimination testing. Eligible employees can participate in the Plan immediately upon joining BFH and begin receiving Company matching contributions and safe-harbor non-elective contributions. The Plan covers U.S. employees of BFH who are at least 18 years old, employees of one of our wholly-owned subsidiaries and any other subsidiary or affiliated organization that adopts the Plan; employees of BFH and all of its U.S. subsidiaries are currently covered. The Plan permits eligible employees to make Roth elective deferrals, which are included in the employee’s taxable income at the time of contribution, but not when distributed. Regular, or Non-Roth elective deferrals made by employees, together with our contributions to the Plan, and income earned on these contributions, are not taxable until withdrawn from the Plan. In 2023, we expanded our contributions to the Plan with an automatic annual deposit for eligible employees. We now automatically deposit three percent of an employee’s eligible annual pay in their 401(k) account on an annual basis, regardless of their contributions. In addition, we match an employee’s contribution fifty cents-per-dollar, up to six percent of the employee’s eligible annual compensation. For the years ended December 31, 2025, 2024 and 2023, our employer contributions were $30 million, $29 million and $30 million, respectively. Participants in the Plan can direct their contributions and our matching contribution to numerous investment options, including our common stock. On July 20, 2001, we registered 1,500,000 shares of our common stock for issuance in accordance with the Plan pursuant to a Registration Statement on Form S-8, File No. 333-65556. As of December 31, 2025, 107,291 of such shares remain available for issuance. Executive Deferred Compensation Plan We also maintain an Executive Deferred Compensation Plan (EDCP). The EDCP permits a defined group of management and highly compensated employees to defer, on a pre-tax basis, a portion of their base salary and incentive compensation (as defined in the EDCP) payable for services rendered. Deferrals under the EDCP are unfunded and subject to the claims of our creditors. Each participant in the EDCP is 100% vested in their account, and account balances accrue interest at a rate established and adjusted periodically by the Compensation & Human Capital committee of our Board of Directors. As of December 31, 2025 and 2024, our outstanding liability related to the EDCP, which was included in Other liabilities on the Consolidated Balance Sheets, was $29 million and $25 million, respectively.

INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Operating Loss Carryforwards [Line Items]
Favorable audit resolutions		$ 20	$ 0
Issuances of shares to employees, net of shares withheld for employee taxes expense	$ 16	7	2
Cumulative interest and penalties with respect to unrecognized tax benefits	62	86	84
Potential interest and penalties with respect to unrecognized tax benefits, expense (benefit)	(19)	2	9
Unrecognized tax benefits, if recognized, would impact effective tax rate	155	$ 200	$ 226
Capital Loss Carryforward
Operating Loss Carryforwards [Line Items]
Capital loss carryforward	15
Domestic Tax Jurisdiction
Operating Loss Carryforwards [Line Items]
Net operating loss carryovers	107
Capital loss carryforward	48
State and Local Jurisdiction
Operating Loss Carryforwards [Line Items]
Net operating loss carryovers	237
Foreign Tax Jurisdiction
Operating Loss Carryforwards [Line Items]
Tax credits	$ 4

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Other Noninterest Income [Abstract]
Payment protection products	$ 116	$ 120	$ 132
Paper statement fees	82	22	0
Loss from equity method investment	0	0	(6)
Other	2	2	2
Total other non-interest income	200	144	128
Other Noninterest Expenses [Abstract]
Professional services and regulatory fees	112	112	128
Debt repurchases	74	117	1
Occupancy expense	23	22	22
Other	39	49	68
Total other non-interest expenses	$ 248	$ 300	$ 219

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 3,051	$ 2,918	$ 2,265
Changes in other comprehensive (loss) income	6	(3)	2
Ending balance	3,327	3,051	2,918
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(22)	(19)	(21)
Ending balance	(16)	(22)	(19)
Net Unrealized Losses on AFS Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(19)	(16)	(18)
Changes in other comprehensive (loss) income	5	(3)	2
Ending balance	(14)	(19)	(16)
Net Unrealized Gains on Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	0	0	0
Changes in other comprehensive (loss) income	1	0	0
Ending balance	1	0	0
Foreign Currency Translation Losses
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(3)	(3)	(3)
Changes in other comprehensive (loss) income	0	0	0
Ending balance	$ (3)	$ (3)	$ (3)

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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+ Details

FAIR VALUES OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers into or out of Level 3	$ 0	$ 0
Loyalty Ventures Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity method investment, other than temporary impairment	$ 0	$ 0	$ 6,000,000

PREFERRED STOCK AND COMMON STOCK

12 Months Ended

Dec. 31, 2025

Stockholders' Equity Note [Abstract]

PREFERRED STOCK AND COMMON STOCK

Preferred Stock

In November 2025, we authorized and issued 75,000 shares of preferred stock as depositary shares (the Depositary Shares) for gross proceeds of $75 million, with each Depositary Share representing a 1/40th interest in our Series A 8.625% Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share (the Series A Preferred Stock). The Series A Preferred Stock has a liquidation preference of $25 per Depositary Share (equivalent to $1,000 per share of Series A Preferred Stock) and as of December 31, 2025, the aggregate liquidation value was $75 million. We used the net proceeds of the offering to enter into a preferred stock transaction with one of our subsidiary banks, CCB, pursuant to which CCB issued preferred

stock to Parent Company on terms substantially the same as those of the Series A Preferred Stock. The CCB preferred stock is eliminated in consolidation.

We will pay dividends on the Series A Preferred Stock quarterly in arrears, when, as, and if declared by our Board of Directors, and to the extent that we have lawfully available funds to pay such dividends, on March 15, June 15, September 15, and December 15 of each year. We expect to pay dividends on our Series A Preferred Stock beginning on March 15, 2026, subject to the above referenced conditions. We may redeem the Series A Preferred Stock at our option, subject to any regulatory approval requirements as are in effect at such time, (i) in whole or in part, on any dividend payment date on or after December 15, 2030 or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event, in either case at a redemption price equal to $1,000 per share (equivalent to $25 per Depositary Share), plus any declared and unpaid dividends. In the event we liquidate, dissolve or wind-up our business and affairs, either voluntarily or involuntarily, as noted above holders of the Series A Preferred Stock are entitled to a liquidation preference of $25 per Depositary Share, plus any declared and unpaid dividends, before we make any distribution of assets to the holders of our common stock. Holders of the Depositary Shares are entitled to all proportional rights and preferences of the Series A Preferred Stock (including dividend, voting, redemption and liquidation rights).

Stock Repurchase Programs

Periodically, we enter into stock repurchase programs, as approved by our Board of Directors. The rationale for our repurchase programs, and the amounts thereof, is to execute against our previously disclosed capital priorities to grow responsibly, maintain balance sheet strength, and return value to stockholders.

The following table provides information about our common stock repurchases under our various Board of Directors approved share repurchase authorizations, for the periods presented:


(Millions)	Amount Authorized for Repurchase		Number of Shares Repurchased (1)	Approximate Dollar Value of Shares Repurchased (2)		Amount Remaining for Future Repurchases
For the three months ended:
March 31, 2025	$	150	2.1	$	102	$	48
June 30, 2025	—		1.1	48		—
September 30, 2025	200		0.6	40		160
December 31, 2025	200		1.9	120		$	240
Total	$	550	5.7	$	310

______________________________

(1)Following their repurchase, these shares ceased to be outstanding shares of common stock and are now treated as authorized but unissued shares of common stock.

(2)Excludes excise taxes on stock repurchases.

Dividends

The table below summarizes the cash dividend activity we had on our common stock for the dates presented:


(Millions, except per share amounts)
Dividend Declaration Date	Dividend Payment Date	Amount Per Common Share		Amount (1)

January 30, 2025	March 21, 2025	$	0.21	$	10
April 24, 2025	June 13, 2025	$	0.21	10
July 24, 2025	September 12, 2025	$	0.21	10
October 23, 2025	December 12, 2025	$	0.23	10
				$	40

______________________________

(1)Excludes dividend equivalent rights paid during the period.

No cash dividends were declared or paid on our preferred stock during 2025.

On January 29, 2026, our Board of Directors declared a quarterly cash dividend of $26.35 per share on our preferred stock and $0.23 per share on our common stock, payable on March 16, 2026, to stockholders of record at the close of business on February 27, 2026.

- Definition

The entire disclosure for equity.

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+ Details

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Credit card and loan receivables restricted for securitization investors	$ 10,708	$ 12,408
Debt securities, trading, and equity securities, FV-NI	$ 221	$ 217
Preferred stock, par or stated value per share	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	75,000.0	75,000.0
Preferred stock, issued (in shares)	75,000.0	0
Preferred stock, shares outstanding (in shares)	75,000.0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares (in shares)	200,000,000.0	200,000,000.0
Common stock, outstanding shares (in shares)	44,100,000	49,100,000
Common stock, issued shares (in shares)	44,100,000	49,100,000
Variable Interest Entity, Primary Beneficiay
Credit card and loan receivables restricted for securitization investors	$ 10,708	$ 12,408

GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 634,000,000	$ 634,000,000	$ 634,000,000
Goodwill impairment	0	0	0
Accumulated goodwill impairment losses	0
Amortization of intangible assets	$ 30,000,000	$ 35,000,000	$ 37,000,000

- Definition

The aggregate expense charged against earnings to allocate the cost of intangible assets (nonphysical assets not used in production) in a systematic and rational manner to the periods expected to benefit from such assets.

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-URI https://asc.fasb.org/1943274/2147476148/220-40-50-6

+ Details

- Definition

Amount, after accumulated impairment loss, of asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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+ Details

- Definition

Amount of impairment loss from asset representing future economic benefit arising from other asset acquired in business combination or from joint venture formation or both, that is not individually identified and separately recognized.

+ References + Details

CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Millions, $ in Millions

12 Months Ended

Dec. 31, 2025

Dec. 31, 2024

Dec. 31, 2023

Interest income

Interest and fees on loans

$ 4,739

$ 4,820

$ 4,961

Interest on cash and investment securities

173

204

184

Total interest income

4,912

5,024

5,145

Interest expense

Interest on deposits

554

608

541

Interest on borrowings

300

352

338

Total interest expense

854

960

879

Interest income (expense)

4,058

4,064

4,266

Non-interest income

Interchange revenue, net of retailer share arrangements

(416)

(381)

(335)

Gain on portfolio sale

230

Other

200

144

128

Total non-interest income

(213)

(226)

Total net interest and non-interest income

3,845

3,838

4,289

Provision for credit losses

1,242

1,397

1,229

Total net interest and non-interest income, after provision for credit losses

2,603

2,441

3,060

Non-interest expenses

Employee compensation and benefits

880

897

867

Card and processing expenses

322

326

428

Information processing and communication

308

300

301

Marketing expenses

150

147

161

Depreciation and amortization

116

Other

248

300

219

Total non-interest expenses

1,988

2,060

2,092

Income from continuing operations before income taxes

615

381

968

Provision for income taxes

102

231

Income from continuing operations

521

279

737

Loss from discontinued operations, net of income taxes

^[1]

(3)

(2)

(19)

Net income available to common stockholders

$ 518

$ 277

$ 718

Basic income per share (Note 18)

Income from continuing operations (in dollars per share)

$ 11.15

$ 5.63

$ 14.79

Loss from discontinued operations (in dollars per share)

(0.08)

(0.05)

(0.40)

Net income per share (in dollars per share)

11.07

5.58

14.39

Diluted income per share (Note 18)

Income from continuing operations (in dollars per share)

10.96

5.54

14.74

Loss from discontinued operations (in dollars per share)

(0.07)

(0.05)

(0.40)

Net income per share (in dollars per share)

$ 10.89

$ 5.49

$ 14.34

Weighted average common shares outstanding (Note 18)

Basic (in shares)

46.8

49.6

49.8

Diluted (in shares)

47.6

50.4

50.0

[1]

OTHER LIABILITIES

12 Months Ended

Dec. 31, 2025

Other Liabilities [Abstract]

OTHER LIABILITIES

The following provides a summary of Other liabilities as of December 31:


	2025		2024
(Millions)
Accounts payable and other brand partner liabilities	$	289	$	326
Accrued liabilities (1)	290		295
Long-term tax reserves	189		250
Operating lease liabilities	85		128
Other (2)	259		202
Total other liabilities	$	1,112	$	1,201

______________________________

(1)Primarily related to accrued payroll and benefits, professional services and regulatory fees, marketing and various other operating activities.

(2)Primarily comprised of cardholder rewards liabilities and long-term unearned revenue

PREFERRED STOCK AND COMMON STOCK - Stock Repurchase Programs (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended				12 Months Ended
	Dec. 31, 2025	Sep. 30, 2025	Jun. 30, 2025	Mar. 31, 2025	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Amount Authorized for Repurchase	$ 200	$ 200	$ 0	$ 150	$ 200
Number of shares repurchased (in shares)	1.9	0.6	1.1	2.1
Approximate Dollar Value of Shares Repurchased	$ 120	$ 40	$ 48	$ 102	313	$ 55	$ 35
Amount Remaining for Future Repurchases	240	$ 160	$ 0	$ 48	240
2025 Aggregate Stock Repurchases
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Amount Authorized for Repurchase	$ 550				$ 550
Number of shares repurchased (in shares)					5.7
Approximate Dollar Value of Shares Repurchased					$ 310

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions	Feb. 20, 2024	Oct. 18, 2023
Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc.,
Loss Contingencies [Line Items]
Loss contingency, damages sought	$ 750
LoyaltyOne, Co. v. Bread Financial Holdings, Inc. et al
Loss Contingencies [Line Items]
Loss contingency, damages sought		$ 775

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

GOODWILL AND INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill is recognized for business acquisitions when the purchase price is higher than the fair value of acquired net assets. Goodwill is not amortized but is tested for impairment at least annually.

We evaluate goodwill for impairment annually as of July 1, or more frequently if events or circumstances arise that would more likely than not reduce the fair value of our single reporting unit below its carrying value. We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying value. Alternatively, we can perform a more detailed quantitative assessment of goodwill impairment.

Qualitative factors considered in evaluating goodwill impairment include macroeconomic conditions, industry and market considerations, our overall financial performance and other relevant entity-specific factors, and/or a sustained decrease in our share price. If, after assessing these qualitative factors we conclude that it is not more likely than not that the fair value of our reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is not necessary. However, if the qualitative factors indicate it is more likely than not that the fair value of our reporting unit is less than its carrying amount, or we elect to skip the qualitative assessment, we would perform a quantitative impairment test.

The quantitative test compares the fair value of our reporting unit with its current carrying amount, including goodwill. When measuring the fair value we use widely accepted valuation techniques, leveraging a combination of the income approach based on discounted cash flows and the market approach based on valuation multiples. The key assumptions used to determine the fair value are primarily unobservable inputs (i.e., Level 3 inputs as defined under GAAP) including internally developed forecasts to estimate future cash flows, growth rates and discount rates, as well as market valuation

multiples (for the market approach). Estimated cash flows are based on internal forecasts grounded in historical performance and future expectations. To discount the estimated cash flows, we use the expected cost of equity taking into account a combination of industry and Company-specific factors we believe a third-party market participant would incorporate. We believe the discount rate applied appropriately reflects the risks and uncertainties in the financial markets generally and specifically in our internally developed forecasts. When using valuation multiples under the market approach, we apply comparable publicly traded companies’ multiples (e.g., price to tangible book value or return on tangible equity) to our reporting unit’s operating results.

In connection with our annual goodwill impairment evaluations, for the year ended December 31, 2025, we performed a qualitative assessment and determined that it was not more likely than not that the fair value of our reporting unit was less than its carrying amount. For the years ended December 31, 2024 and 2023, we elected to perform quantitative impairment assessments and concluded that the fair value of our reporting unit was in excess of its carrying amount.

Goodwill was $634 million as of December 31, 2025, 2024 and 2023. No goodwill impairment was recognized during any of those years, and there were no accumulated goodwill impairment losses as of December 31, 2025.

Intangible Assets, net

Our identifiable intangible assets consist of both amortizable and non-amortizable intangible assets. Definite-lived intangible assets are subject to amortization and are amortized on a straight-line basis over their estimated useful lives; indefinite-lived intangible assets are not amortized. We review long-lived assets and asset groups, including intangible assets, for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable; recognizing an impairment if the carrying amount is not recoverable and exceeds the fair value of the asset or asset group.

Intangible assets consisted of the following as of December 31:


	2025
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Premium on purchased credit card loan portfolios	$	172	$	(94)	$	78	3-13 years
Non-compete agreements	2		(2)		—		5 years
	174		(96)		78
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	178	$	(96)	$	82


	2024
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets

Premium on purchased credit card loan portfolios	$	221	$	(113)	$	108	3-13 years
Non-compete agreements	2		(2)		—		5 years
	$	223	$	(115)	$	108
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	227	$	(115)	$	112

Amortization expense related to intangible assets was approximately $30 million, $35 million and $37 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows for the years ending December 31:


(Millions)
2026	$	29
2027	24
2028	7
2029	7
2030	6
Thereafter	5
	$	78

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2025
Audit Information [Abstract]
Auditor Firm ID	34
Auditor Name	Deloitte & Touche LLP
Auditor Location	Columbus, Ohio

GOODWILL AND INTANGIBLE ASSETS, NET - Maturity Schedule (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Estimated amortization expense related to intangible assets for the next five years and thereafter
2026	$ 29
2027	24
2028	7
2029	7
2030	6
Thereafter	5
Net	$ 78	$ 108

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Schedule of Components of Income Before Income Taxes and Components of Income Tax Expense


	2025		2024		2023
(Millions)
Components of Income from continuing operations before income taxes
Domestic	$	608	$	375	$	964
Foreign	7		6		4
Total Income from continuing operations before income taxes	$	615	$	381	$	968

Components of Provision for income taxes
Current
Federal	$	36	$	156	$	261
State and local	(34)		29		37
Foreign	2		2		1
Total current income tax expense	4		187		299
Deferred
Federal	98		(73)		(65)
State and local	(7)		(10)		(2)
Foreign	(1)		(2)		(1)
Total deferred income tax expense (benefit)	90		(85)		(68)
Total Provision for income taxes	$	94	$	102	$	231

Schedule of Income Taxes Paid, Net of Refunds

The following table presents Income taxes paid, net of refunds for the year ended December 31:


	2025
(Millions)
Federal	$	33
State and local	18
Foreign	2
Total income taxes paid during the year, net of refunds (1)	$	53

______________________________

(1) During the year ended December 31, 2025 Income taxes paid, net of refunds, for the State of California were $4 million, which exceeded 5% of our Total income taxes paid, net of refunds.

Schedule of Reconciliation of Recorded Federal Provision for Income Taxes to the Expected Amount Computed by Applying the Federal Statutory Rate


	2025
	Amount		Percent
(Millions)
Income from continuing operations, before income taxes	$	615

U.S. Federal statutory tax	129		21.0	%
State and local income taxes, net of federal income tax effect (1)	5		0.8	%



Tax credits	(3)		(0.5)	%



Non-deductible expenses	5		0.9	%



Changes in unrecognized tax benefits	(39)		(6.5)	%
Other adjustments	(3)		(0.5)	%

Effective income tax	$	94	15.2	%

______________________________

(1) In 2025, state taxes in New York and Utah made up the majority (greater than 50 percent) of the tax effect in this category.


	2024		2023
(Millions)
Expected expense at statutory rate	$	80	$	203
Increase (decrease) in income taxes resulting from:
State and local income taxes, net of federal income tax effect	15		27
Non-deductible expenses	29		8
Valuation allowance	(1)		(5)
Audit resolutions	(20)		—
Other	(1)		(2)
Total	$	102	$	231

Schedule of Deferred Tax Assets and Liabilities

The following table provides the significant components of Deferred tax assets and liabilities as of December 31:


	2025		2024
(Millions)
Deferred tax assets
Deferred revenue	$	14	$	12
Allowance for credit losses	513		534
Net operating loss carryforwards and other carryforwards	47		48
Operating lease liabilities	19		29
Research & development expenses	23		53
Accrued expenses and other	80		87
Total deferred tax assets	696		763
Valuation allowance	(20)		(19)
Deferred tax assets, net of valuation allowance	676		744
Deferred tax liabilities
Deferred income	$	2	$	2
Depreciation	30		—
Right of use assets	13		19
Intangible assets	15		15
Total deferred tax liabilities	60		36

Net deferred tax assets	$	616	$	708

Amounts recognized on the Consolidated Balance Sheets:
Other assets	$	616	$	708

Schedule of Reconciliation of Unrecognized Tax Benefits

The following table presents changes in unrecognized tax benefits:


(Millions)
Balance as of December 31, 2022	$	242
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(11)
Increases related to current year tax positions	13
Settlements during the period	(10)
Lapses of applicable statutes of limitations	(20)
Balance as of December 31, 2023	$	215
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(40)
Increases related to current year tax positions	9
Settlements during the period	(21)
Lapses of applicable statutes of limitations	(10)
Balance as of December 31, 2024	$	154
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(27)
Increases related to current year tax positions	4

Lapses of applicable statutes of limitations	(10)
Balance as of December 31, 2025	$	122

CREDIT CARD AND OTHER LOANS - Amortized Cost Basis Credit Card and Loan Receivables (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	$ 18,393	$ 18,492
Unbilled to cardholders	378	378
Total
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	1,317	1,387
31 to 60 Days Past Due
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	359	369
61 to 90 Days Past Due
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	282	288
91 or more Days Past Due
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	676	730
Total Current
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	$ 17,076	$ 17,105

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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+ Details

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

+ References

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+ Details

BORROWINGS OF LONG-TERM AND OTHER DEBT - Schedule of Long Term Debt and Other Debt (Details) - USD ($) $ in Millions	Dec. 31, 2025	Nov. 30, 2025	Jun. 30, 2025	Dec. 31, 2024	Sep. 30, 2020
Long-term and other debt:
Long-term and other debt	$ 900
Less: Unamortized debt issuance costs	14
Total long-term and other debt	886			$ 999
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs				1,100
Less: Unamortized debt issuance costs	3
Total debt issued by consolidated VIEs	3,422			4,558
Total borrowings of long-term and other debt	4,308			5,557
Long-term and other debt
Long-term and other debt:
Long-term and other debt	900			1,010
Less: Unamortized debt issuance costs	14			11
Total long-term and other debt	886			999
Convertible senior notes due 2028
Long-term and other debt:
Long-term and other debt	$ 0			10
Debt issued by consolidated VIEs:
Interest Rates	4.25%
Senior notes due 2026 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 0			100
Debt issued by consolidated VIEs:
Interest Rates	7.00%				7.00%
Senior notes due 2029 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 0			900
Debt issued by consolidated VIEs:
Interest Rates	9.75%	6.75%	9.75%
Senior Notes Due 2031 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 500			0
Debt issued by consolidated VIEs:
Interest Rates	6.75%
Subordinated Notes Due 2035 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 400			0
Debt issued by consolidated VIEs:
Interest Rates	8.38%
Debt issued by consolidated VIEs
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs	$ 3,425			4,563
Less: Unamortized debt issuance costs	3			5
Total debt issued by consolidated VIEs	3,422			4,558
Fixed rate asset-backed term note securities
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs	$ 1,350			1,350
Fixed rate asset-backed term note securities \| Minimum
Debt issued by consolidated VIEs:
Interest Rates	4.62%
Fixed rate asset-backed term note securities \| Maximum
Debt issued by consolidated VIEs:
Interest Rates	5.47%
Conduit asset-backed securities
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs	$ 2,075			$ 3,213
Weighted average interest rate	4.78%			5.54%
Conduit asset-backed securities \| Minimum
Debt issued by consolidated VIEs:
Interest Rates	4.77%			5.48%
Conduit asset-backed securities \| Maximum
Debt issued by consolidated VIEs:
Interest Rates	4.81%			5.60%
Revolving Credit Facility \| Line of Credit
Long-term and other debt:
Long-term and other debt	$ 0			$ 0

FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2025

Fair Value Disclosures [Abstract]

Schedule of Estimated Fair Value of Company's Financial Instruments

The following table summarizes the carrying values and fair values of our financial assets and financial liabilities as of December 31:


	2025				2024
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Millions)
Financial assets
Credit card and other loans, net	$	16,699	$	18,747	$	16,655	$	19,011
Investment securities	221		221		217		217
Financial liabilities
Deposits	13,916		13,928		13,082		13,087
Debt issued by consolidated VIEs	3,422		3,442		4,558		4,572
Long-term and other debt	886		931		999		1,085

Schedule of Assets and Liabilities Carried at Fair value Measured on Recurring Basis

The following tables summarize our financial instruments measured at fair value on a recurring basis, categorized by the fair value hierarchy described in the preceding paragraphs, as of December 31:


	2025
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	221	$	50	$	171	$	—
Total assets measured at fair value	$	221	$	50	$	171	$	—


	2024
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	217	$	47	$	170	$	—
Total assets measured at fair value	$	217	$	47	$	170	$	—

Schedule of Assets and Liabilities Disclosed but not Carried at Fair Value

The following tables summarize our financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of December 31:


	2025
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets
Credit card and other loans, net	$	18,747	$	—	$	—	$	18,747
Total	$	18,747	$	—	$	—	$	18,747

Financial liabilities
Deposits	$	13,928	$	—	$	13,928	$	—
Debt issued by consolidated VIEs	3,442		—		3,442		—
Long-term and other debt	931		—		931		—
Total	$	18,301	$	—	$	18,301	$	—


	2024
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets
Credit card and other loans, net	$	19,011	$	—	$	—	$	19,011
Total	$	19,011	$	—	$	—	$	19,011

Financial liabilities
Deposits	$	13,087	$	—	$	13,087	$	—
Debt issued by consolidated VIEs	4,572		—		4,572		—
Long-term and other debt	1,085		—		1,085		—
Total	$	18,744	$	—	$	18,744	$	—

ALLOWANCE FOR CREDIT LOSSES

12 Months Ended

Dec. 31, 2025

Credit Loss [Abstract]

ALLOWANCE FOR CREDIT LOSSES

The Allowance for credit losses represents our estimate of expected credit losses over the estimated life of our Credit card and other loans, incorporating future macroeconomic forecasts in addition to information about past events and current conditions. Our estimate under the Current Expected Credit Loss (CECL) approach is significantly influenced by the composition, characteristics and quality of our portfolio of Credit card and other loans, as well as the prevailing economic conditions and forecasts utilized. The Allowance for credit losses includes an estimate for uncollectible principal as well as billed, unpaid interest and fees. Principal losses, net of recoveries are deducted from the Allowance for credit losses. Losses of unpaid interest and fees are recorded as a reduction to Interest and fees on loans upon charge-off. The Allowance for credit losses is maintained through an adjustment to the Provision for credit losses and is evaluated for appropriateness on a quarterly basis.

In estimating our Allowance for credit losses, for each identified segment of loans sharing similar risk characteristics, management uses modeling and estimation techniques based on historical loss experience, current conditions, reasonable and supportable forecasts and other relevant factors. This modeling uses historical data and applicable macroeconomic variables with statistical analysis and behavioral relationships, to determine expected credit performance. Our quantitative estimate of expected credit losses under CECL is impacted by certain forecasted macroeconomic variables. We consider the macroeconomic forecast used to be reasonable and supportable over the estimated life of the Credit card and other loans portfolio, with no reversion period. In addition to the quantitative estimate of expected credit losses, we also incorporate qualitative adjustments for certain factors such as Company-specific risks, changes in current macroeconomic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the Allowance for credit losses reflects our best estimate of current expected credit losses.

Credit Card Loans

We use a “pooled” approach to estimate expected credit losses for financial assets with similar risk characteristics. We have evaluated multiple risk characteristics across our credit card loans portfolio, and determined delinquency status and overall credit quality to be the most significant characteristics for estimating expected credit losses. To estimate our Allowance for credit losses, we segment our credit card loans on the basis of delinquency status, credit quality risk score and product. These risk characteristics are evaluated on at least an annual basis, or more frequently as facts and circumstances warrant. In determining the estimated life of our credit card loans, payments were applied to the measurement date balance with no payments allocated to future purchase activity. We use a combination of First In First Out and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD Act) methodologies to model balance paydown.

Other Loans

We measure our Allowance for credit losses on Other loans, consisting primarily of our installment loans and “split-pay” offerings, using a statistical model to estimate projected losses over the remaining terms of the loans, inclusive of an assumption for prepayments. The model is based on the historical statistical relationship between loan loss performance and certain macroeconomic data pooled based on credit quality risk score, term of the underlying loans, vintage and geographic location. As of December 31, 2025 and 2024, the Allowance for credit losses on Other loans was $26 million and $30 million, respectively.

Allowance for Credit Losses Rollforward


	2025		2024		2023
(Millions)
Beginning balance	$	2,241	$	2,328	$	2,464

Provision for credit losses (1)	1,242		1,397		1,229
Change in the estimate for uncollectible unpaid interest and fees	—		5		10
Net principal losses (2)	(1,377)		(1,489)		(1,375)
Ending balance	$	2,106	$	2,241	$	2,328

______________________________

(1)Provision for credit losses includes a build/release for the Allowance for credit losses, as well as replenishment of Net principal losses.

For the year ended December 31, 2025, the factors that influenced the decrease in the Allowance for credit losses are lower Credit card and other loans, as well as a decrease in the reserve rate over the period. Our reserve rate was 11.2% as of

December 31, 2025, reflecting our improving credit metrics and higher-quality new account acquisitions. We continue to maintain appropriately prudent weightings on the economic scenarios in our credit reserve modeling to ensure the adequacy of our Allowance for credit losses given the wide range of potential macroeconomic outcomes, including ongoing uncertainty around inflation and unemployment.

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 518	$ 277	$ 718
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses	1,242	1,397	1,229
Depreciation and amortization	80	90	116
Deferred income taxes	90	(85)	(68)
Non-cash stock-based compensation	56	54	44
Amortization of deferred financing costs	16	21	26
Amortization of deferred origination costs	75	92	92
Gain on portfolio sale	(3)	(11)	(230)
Loss on debt extinguishment	74	117	7
Change in other operating assets and liabilities
Change in other assets	57	42	28
Change in other liabilities	(96)	(109)	0
Other	(17)	(26)	25
Net cash provided by operating activities	2,092	1,859	1,987
CASH FLOWS FROM INVESTING ACTIVITIES
Change in credit card and other loans	(1,345)	(840)	(1,154)
Proceeds from sale of credit card loan portfolios	0	101	2,499
Purchases of credit card loan portfolios	0	(377)	(473)
Purchases of investments	(22)	(31)	(50)
Maturities of investments	20	14	14
Other, including capital expenditures	(24)	(36)	(48)
Net cash provided by investing activities	(1,371)	(1,169)	788
CASH FLOWS FROM FINANCING ACTIVITIES
Unsecured borrowings under debt agreements	900	300	1,401
Repayments/maturities of unsecured borrowings under debt agreements	(1,079)	(894)	(1,882)
Debt issued by consolidated variable interest entities	925	2,390	2,592
Repayments/maturities of debt issued by consolidated variable interest entities	(2,063)	(1,727)	(4,807)
Net increase (decrease) in deposits	835	(541)	(209)
Payment of deferred financing costs	(24)	(15)	(63)
Net proceeds from the issuance of preferred stock	71	0	0
Repurchases of common stock	(313)	(55)	(35)
Dividends and dividend equivalent rights paid	(42)	(43)	(42)
Payment of Capped Call transactions	0	0	(39)
Other	(17)	(7)	(2)
Net cash used in financing activities	(807)	(592)	(3,086)
Change in cash, cash equivalents and restricted cash	(86)	98	(311)
Cash, cash equivalents and restricted cash at beginning of period	3,714	3,616	3,927
Cash, cash equivalents and restricted cash at end of period	3,628	3,714	3,616
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for interest	868	922	861
Total income taxes paid during the year, net of refunds (1)	53	227	292
Cash and cash equivalents reconciliation
Cash and cash equivalents	3,604	3,679	3,590
Restricted cash included within Other Assets	24	35	26
Total cash, cash equivalents and restricted cash	$ 3,628	$ 3,714	$ 3,616

DEPOSITS - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Other Liabilities [Abstract]
Time deposits, at or above FDIC insurance limit	$ 638	$ 531
Time deposits, at or above FDIC insurance limit of total deposits	5.00%	4.00%

FAIR VALUES OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2025

Fair Value Disclosures [Abstract]

FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair value is defined under GAAP as the price that would be required to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; with such a transaction based on the principal market, or in the absence of a principal market the most advantageous market for the specific instrument. GAAP provides for a three-level fair value hierarchy that classifies the inputs to valuation techniques used to measure fair value, defined as follows:

Level 1: Inputs that are unadjusted quoted prices for identical assets or liabilities in active markets that the entity can access.

Level 2: Inputs, other than those included within Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, or inputs other than quoted prices that are observable for the asset or liability.

Level 3: Inputs that are unobservable (e.g., internally derived assumptions) and reflect an entity’s assumptions about estimates market participants would use in pricing the asset or liability based on the best information available under the circumstances. In particular, Level 3 inputs and valuation techniques involve judgment and as a result are not necessarily indicative of amounts we would realize in a current market exchange. The use of different assumptions or estimation techniques may have a material effect on the estimated fair value amounts.

We monitor the market conditions and evaluate the fair value hierarchy levels at least quarterly. For the years ended December 31, 2025 and 2024, there were no transfers into or out of Level 3, and no transfers between Levels 1 and 2.

The following table summarizes the carrying values and fair values of our financial assets and financial liabilities as of December 31:


	2025				2024
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Millions)
Financial assets
Credit card and other loans, net	$	16,699	$	18,747	$	16,655	$	19,011
Investment securities	221		221		217		217
Financial liabilities
Deposits	13,916		13,928		13,082		13,087
Debt issued by consolidated VIEs	3,422		3,442		4,558		4,572
Long-term and other debt	886		931		999		1,085

Valuation Techniques Used in the Fair Value Measurement of Financial Assets and Financial Liabilities

Credit card and other loans, net: Our Credit card and other loans are recorded at amortized cost, less the Allowance for credit losses, on the Consolidated Balance Sheets. In estimating the fair values, we use a discounted cash flow model (i.e., Level 3 inputs), primarily because a comparable whole loan sales market for similar loans does not exist, and therefore there is a lack of observable pricing inputs. We use various internally derived inputs, including projected income, discount rates and forecasted charge-offs. Economic value attributable to future loans generated by the cardholder accounts is not included in the fair values.

Investment securities: Investment securities consist of AFS debt securities, including both mortgage-backed securities and municipal bonds, as well as equity securities, which are mutual funds, and are recorded at fair value on the Consolidated Balance Sheets. Quoted prices of identical or similar investment securities in active markets are used to estimate the fair values (i.e., Level 1 or Level 2 inputs).

Derivative assets and liabilities: We use derivatives to manage our interest rate and foreign currency risk exposures. When quoted market prices are available and used to value our derivatives, we classify them as Level 1. However, the majority of our derivatives do not have readily available quoted market prices. Therefore, we value most of our derivatives using vendor-based models. We primarily rely on market observable inputs for these models, including, for example, interest rate yield curves and currency rates. These inputs can vary depending on the type of derivatives and nature of the underlying rate, price or index upon which the value of the derivative is based. We typically classify derivatives as Level 2 as significant inputs can be observed in a liquid market and the underlying model itself does not require significant judgment. At least annually, we reaffirm our understanding of the valuation techniques applied in our vendor-based models and validate the valuation output on a quarterly basis. Our derivatives are included in Other assets or Other liabilities on the Consolidated Balance Sheets. The fair value impacts of our derivative assets and liabilities were insignificant to the Consolidated Financial Statements for the periods presented on both a gross basis and, where applicable, a net basis.

Deposits: Money market and other non-maturity deposits carrying values approximate their fair values because they are short-term in duration and have no defined maturity. GAAP requires that the fair values of deposit liabilities with no stated maturities equal their carrying values and does not permit recognition of the inherent funding value of the instruments. Certificates of deposit are recorded at their historical issuance cost on the Consolidated Balance Sheets, adjusted for unamortized fees, with the fair value being estimated based on the currently observable market rates available to us for similar deposits with similar remaining maturities (i.e., Level 2 inputs). Interest payable is included within Other liabilities on the Consolidated Balance Sheets.

Debt issued by consolidated VIEs: We record Debt issued by our consolidated VIEs at amortized cost (including unamortized fees, issuance costs, premiums and discounts, where applicable) on the Consolidated Balance Sheets. Fair value is estimated based on the currently observable market rates available to us for similar debt instruments with similar remaining maturities or quoted market prices for the same transaction (i.e., Level 2 inputs). Interest payable is included within Other liabilities on the Consolidated Balance Sheets.

Long-term and other debt: We record Long-term and other debt at amortized cost (including unamortized fees, issuance costs, premiums and discounts, where applicable) on the Consolidated Balance Sheets. Fair value is estimated based on the currently observable market rates available to us for similar debt instruments with similar remaining maturities, or quoted market prices for the same transaction (i.e., Level 2 inputs). Interest payable is included within Other liabilities on the Consolidated Balance Sheets.

Financial Instruments Measured at Fair Value on a Recurring Basis

The following tables summarize our financial instruments measured at fair value on a recurring basis, categorized by the fair value hierarchy described in the preceding paragraphs, as of December 31:


	2025
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	221	$	50	$	171	$	—
Total assets measured at fair value	$	221	$	50	$	171	$	—


	2024
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	217	$	47	$	170	$	—
Total assets measured at fair value	$	217	$	47	$	170	$	—

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including equity method investments, property and equipment, right-of-use assets, deferred contract costs, goodwill and intangible assets. These assets are not measured at fair value on a recurring basis but are subject to fair value adjustments in certain circumstances, such as upon impairment. We did not have any impairments for the years ended December 31, 2025 and 2024. For the year ended December 31, 2023, we wrote off the remaining $6 million of our equity method investment in LVI.

Financial Instruments Disclosed but Not Carried at Fair Value

The fair values of financial instruments that are measured at amortized cost are estimates, and require management’s judgment; therefore, these fair value estimates may not be indicative of future fair values, nor can our fair value be estimated by aggregating all of the amounts presented. The following tables summarize our financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of December 31:


	2025
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets
Credit card and other loans, net	$	18,747	$	—	$	—	$	18,747
Total	$	18,747	$	—	$	—	$	18,747

Financial liabilities
Deposits	$	13,928	$	—	$	13,928	$	—
Debt issued by consolidated VIEs	3,442		—		3,442		—
Long-term and other debt	931		—		931		—
Total	$	18,301	$	—	$	18,301	$	—


	2024
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets
Credit card and other loans, net	$	19,011	$	—	$	—	$	19,011
Total	$	19,011	$	—	$	—	$	19,011

Financial liabilities
Deposits	$	13,087	$	—	$	13,087	$	—
Debt issued by consolidated VIEs	4,572		—		4,572		—
Long-term and other debt	1,085		—		1,085		—
Total	$	18,744	$	—	$	18,744	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/exampleRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

OTHER LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2025

Other Liabilities [Abstract]

Schedule of Other Liabilities

The following provides a summary of Other liabilities as of December 31:


	2025		2024
(Millions)
Accounts payable and other brand partner liabilities	$	289	$	326
Accrued liabilities (1)	290		295
Long-term tax reserves	189		250
Operating lease liabilities	85		128
Other (2)	259		202
Total other liabilities	$	1,112	$	1,201

______________________________

(1)Primarily related to accrued payroll and benefits, professional services and regulatory fees, marketing and various other operating activities.

(2)Primarily comprised of cardholder rewards liabilities and long-term unearned revenue.

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

Schedule of RSUs Activity for our Stock Compensation Plans

The following table summarizes RSUs activity for our stock-based compensation plans:


	Performance- Based(1)	Service- Based	Total	Weighted Average Fair Value
Balance as of December 31, 2022	164,946	1,107,663	1,272,609	$	68.86
Shares granted	175,587	1,172,465	1,348,052	38.02
Shares vested	(9,254)	(434,049)	(443,303)	67.49
Shares forfeited	—	(87,527)	(87,527)	53.82
Balance as of December 31, 2023	331,279	1,758,552	2,089,831	$	49.89
Shares granted	243,312	1,307,833	1,551,145	37.78
Shares vested	(95,133)	(730,635)	(825,768)	56.58
Shares forfeited	—	(68,012)	(68,012)	43.39
Balance as of December 31, 2024	479,458	2,267,738	2,747,196	$	41.54
Shares granted	157,788	867,302	1,025,090	61.93
Shares vested	(99,184)	(962,815)	(1,061,999)	47.05
Shares forfeited	—	(59,233)	(59,233)	45.17
Balance as of December 31, 2025	538,062	2,112,992	2,651,054	$	47.20
Outstanding and Expected to Vest			2,621,537	$	46.85

______________________________

OTHER ASSETS (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Other Assets [Line Items]
Deferred tax asset, net	$ 616	$ 708
Deferred contract costs	205	228
Accounts receivable, net	148	145
Right-of-use assets – operating leases	$ 63	$ 87
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Total other assets	Total other assets
Restricted cash	$ 24	$ 35
Other	187	200
Total other assets	1,243	$ 1,403
LVI
Other Assets [Line Items]
Restricted cash	$ 50

INCOME TAXES - Schedule of Components of Tax (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Components of Income from continuing operations before income taxes
Domestic	$ 608	$ 375	$ 964
Foreign	7	6	4
Income from continuing operations before income taxes	615	381	968
Current
Federal	36	156	261
State and local	(34)	29	37
Foreign	2	2	1
Total current income tax expense	4	187	299
Deferred
Federal	98	(73)	(65)
State and local	(7)	(10)	(2)
Foreign	(1)	(2)	(1)
Total deferred income tax expense (benefit)	90	(85)	(68)
Effective income tax	$ 94	$ 102	$ 231

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
$ in Millions

Total

Cumulative Effect, Period of Adoption, Adjustment

^[1]

Preferred Stock

Common Stock

Additional Paid-In Capital

Retained Earnings

Cumulative Effect, Period of Adoption, Adjustment

^[1]

Accumulated Other Comprehensive Loss

Beginning balance (in shares) at Dec. 31, 2022

Beginning balance at Dec. 31, 2022

$ 2,265

$ 0

$ 1

$ 2,192

$ 93

$ (21)

Beginning balance (in shares) at Dec. 31, 2022

49,900,000

Increase (Decrease) in Stockholders' Equity

Net income

718

Other comprehensive income (loss)

Stock-based compensation

Capped call transactions for convertible senior notes due 2028, net of tax

(30)

Repurchase of common stock (in shares)

(900,000)

Repurchases of common stock

(35)

Dividends and dividend equivalent rights declared

(44)

Issuances of shares to employees, net of shares withheld for employee taxes (in shares)

300,000

Issuances of shares to employees, net of shares withheld for employee taxes

(2)

Ending balance (in shares) at Dec. 31, 2023

Ending balance at Dec. 31, 2023

2,918

$ 0

$ 1

2,169

767

(19)

Balance (in shares) at Dec. 31, 2023

49,300,000

Increase (Decrease) in Stockholders' Equity

Net income

277

Other comprehensive income (loss)

(3)

Stock-based compensation

Repurchase of common stock (in shares)

(1,000,000.0)

Repurchases of common stock

(55)

Repurchases of Convertible Notes

(88)

Dividends and dividend equivalent rights declared

(44)

Issuances of shares to employees, net of shares withheld for employee taxes (in shares)

800,000

Issuances of shares to employees, net of shares withheld for employee taxes

$ (7)

(7)

Ending balance (in shares) at Dec. 31, 2024

Ending balance at Dec. 31, 2024

$ 3,051

$ (1)

$ 0

$ 1

2,073

999

$ (1)

(22)

Balance (in shares) at Dec. 31, 2024

49,100,000

Increase (Decrease) in Stockholders' Equity

Net income

$ 518

518

Other comprehensive income (loss)

Stock-based compensation

Issuance of preferred stock (in shares)

75,000,000.0

Issuance of preferred stock

Repurchase of common stock (in shares)

(5,700,000)

Repurchases of common stock

(313)

$ (1)

(312)

Repurchases of Convertible Notes

(4)

Dividends and dividend equivalent rights declared

(42)

Issuances of shares to employees, net of shares withheld for employee taxes (in shares)

700,000

Issuances of shares to employees, net of shares withheld for employee taxes

$ (16)

(16)

Ending balance (in shares) at Dec. 31, 2025

75,000.0

75,000,000.0

Ending balance at Dec. 31, 2025

$ 3,327

$ 0

$ 1,868

$ 1,475

$ (16)

Balance (in shares) at Dec. 31, 2025

44,100,000

[1]

Represents the cumulative effect, net of tax, of adopting the proportional amortization method of accounting for our tax credit investment. For additional information refer to Note 1, “Description of Business, Basis of Presentation and Significant Accounting Policies” to the audited Consolidated Financial Statements.

INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Unrecognized Tax Benefits [Roll Forward]
Balance at the beginning of the period	$ 154	$ 215	$ 242
Increases related to prior years’ tax positions	1	1	1
Decreases related to prior years’ tax positions	(27)	(40)	(11)
Increases related to current year tax positions	4	9	13
Settlements during the period		(21)	(10)
Lapses of applicable statutes of limitations	(10)	(10)	(20)
Balance at the end of the period	$ 122	$ 154	$ 215

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2025
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

CREDIT CARD AND OTHER LOANS - Troubled Debt Restructurings (Details) - Consumer Portfolio Segment - Troubled debt restructurings that subsequently defaulted - credit card and loan receivables $ in Millions	12 Months Ended
	Dec. 31, 2025 USD ($) modification	Dec. 31, 2024 USD ($) modification	Dec. 31, 2023 USD ($) modification
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of modifications \| modification	14,196	15,663	14,196
Outstanding balance \| $	$ 29	$ 29	$ 23

REGULATORY MATTERS AND CAPITAL ADEQUACY - Actual Capital Ratios and Minimum Ratios (Details) $ in Millions	Dec. 31, 2025 USD ($)	Dec. 31, 2024 USD ($)
Tier 1 Leverage Capital Ratio
Total risk-weighted asset, Actual	$ 19,755	$ 19,928
Combined Banks
Common equity tier 1 capital ratio
2025	0.130	0.124
Minimum Ratio for Capital Adequacy Purposes *	4.50%
Tier 1 capital ratio
2025	0.134	0.124
Minimum Ratio for Capital Adequacy Purposes *	0.060
Total risk-based capital ratio
2025	0.168	0.138
Minimum Ratio for Capital Adequacy Purposes *	0.080
Tier 1 Leverage Capital Ratio
2025	0.124	0.115
Minimum Ratio for Capital Adequacy Purposes *	0.040
Comenity Bank
Common equity tier 1 capital ratio
2025	0.151	0.165
Minimum Ratio for Capital Adequacy Purposes *	6.00%
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	8.00%
Tier 1 capital ratio
2025	0.151	0.165
Minimum Ratio for Capital Adequacy Purposes *	0.045
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.065
Total risk-based capital ratio
2025	0.165	0.179
Minimum Ratio for Capital Adequacy Purposes *	0.080
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.100
Tier 1 Leverage Capital Ratio
2025	0.141	0.153
Minimum Ratio for Capital Adequacy Purposes *	0.040
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.050
Comenity Capital Bank
Common equity tier 1 capital ratio
2025	0.141	0.154
Minimum Ratio for Capital Adequacy Purposes *	6.00%
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	8.00%
Tier 1 capital ratio
2025	0.135	0.154
Minimum Ratio for Capital Adequacy Purposes *	0.045
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.065
Total risk-based capital ratio
2025	0.175	0.167
Minimum Ratio for Capital Adequacy Purposes *	0.080
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.100
Tier 1 Leverage Capital Ratio
2025	0.132	0.143
Minimum Ratio for Capital Adequacy Purposes *	0.040
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.050

CREDIT CARD AND OTHER LOANS - Credit Quality on Amortized Cost Basis (Details) - Credit card loans - No Score	Dec. 31, 2025	Dec. 31, 2024
661 or Higher
Financing Receivable, Credit Quality Indicator [Line Items]
Credit card loans	59.00%	58.00%
601 to 660
Financing Receivable, Credit Quality Indicator [Line Items]
Credit card loans	27.00%	27.00%
600 or Less
Financing Receivable, Credit Quality Indicator [Line Items]
Credit card loans	14.00%	15.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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+ Details

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

12 Months Ended

Dec. 31, 2025

Other Non-Interest Income and Other Non-Interest Expenses [Abstract]

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSE

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

The following table provides the components of Other non-interest income for the years ended December 31:


	2025		2024		2023
(Millions)
Payment protection products	$	116	$	120	$	132
Paper statement fees	82		22		—
Loss from equity method investment	—		—		(6)
Other	2		2		2
Total other non-interest income	$	200	$	144	$	128

The following table provides the components of Other non-interest expenses for the years ended December 31:


	2025		2024		2023
(Millions)
Professional services and regulatory fees	$	112	$	112	$	128
Debt repurchases	74		117		1
Occupancy expense	23		22		22
Other (1)	39		49		68
Total other non-interest expenses	$	248	$	300	$	219

______________________________

(1)Primarily related to costs associated with various other individually insignificant operating activities

CREDIT CARD AND OTHER LOANS - Narrative (Details) $ in Millions	1 Months Ended			12 Months Ended
	Aug. 31, 2024 USD ($)	Apr. 30, 2024 USD ($)	Feb. 28, 2023 USD ($)	Dec. 31, 2025 USD ($) loan	Dec. 31, 2024 USD ($) loan	Dec. 31, 2023 USD ($)
Financing Receivable, Allowance for Credit Loss [Line Items]
Re-aged accounts as percentage of total credit card and loan receivables				3.00%	4.10%	2.60%
Number of days a loan is contractually past due before resulting in charge-off				30 days
Delinquency rate				5.80%	5.90%
Actual charge-offs for unpaid interest and fees				$ 924	$ 1,027	$ 954
Net principal loss rate				7.70%	8.20%	7.50%
Percentage of financing receivable outstanding				0.10%	0.10%
Total credit card and other loans				$ 18,393	$ 18,492
Unused credit card lines available to cardholders				$ 98,000	$ 103,000
Credit card loans held for sale \| loan				0	0
Proceeds from sale of credit card loan portfolios				$ 0	$ 101	$ 2,499
Gain on portfolio sale				3	11	$ 230
BJs Wholesale Club (BJs)
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans			$ 2,300
Proceeds from sale of credit card loan portfolios			2,500
Gain on portfolio sale			$ 230
Other loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans				$ 365	$ 298
Other loans \| FICO Score, From 660 and Above
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding				88	84
Other loans \| FICO Score Below 660
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding				12
Other loans \| FICO Score, From 660 and Below
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding					16
Credit card loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Proceeds from sale of credit card loan portfolios		$ 102
Payments to acquire loans receivable	$ 378

SECURITIZATIONS (Tables)

12 Months Ended

Dec. 31, 2025

Offsetting [Abstract]

Schedule of Securitized Credit Card Receivables, Delinquencies and Net Charge-Offs

The following tables provide the total securitized credit card loans, and related delinquencies, and net principal losses of securitized credit card loans for the periods presented:


	December 31, 2025		December 31, 2024
(Millions)
Total credit card loans – available to settle obligations of consolidated VIEs	$	10,708	$	12,408
Of which: principal amount of credit card loans 91 days or more past due	$	257	$	305


	Year Ended December 31, 2025		Year Ended December 31, 2024		Year Ended December 31, 2023
(Millions)
Net principal losses of securitized credit card loans	$	786	$	852	$	801

ALLOWANCE FOR CREDIT LOSSES - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit loss	$ 2,106	$ 2,241	$ 2,328	$ 2,464
Portfolio reserve rates	11.20%
Other loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit loss	$ 26	$ 30

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

INVESTMENTS - Continuous Loss Position (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Investments, Debt and Equity Securities [Abstract]
Less than 12 months, Fair Value	$ 0	$ 27
Less than 12 months, Unrealized Losses	0	0
12 Months or Greater, Fair Value	135	140
12 Months or Greater, Unrealized Losses	(18)	(25)
Fair Value	135	167
Unrealized Losses	$ (18)	$ (25)

CREDIT CARD AND OTHER LOANS (Tables)

12 Months Ended

Dec. 31, 2025

Receivables [Abstract]

Schedule of Components of Credit Card and Other Loans

The following table provides Credit card and other loans, as of December 31:


	2025		2024
(Millions)
Credit card loans	$	18,417	$	18,586
Other loans	388		310
Total credit card and other loans (1)(2)	18,805		18,896
Less: Allowance for credit losses	(2,106)		(2,241)
Credit card and other loans, net	$	16,699	$	16,655

__________________________________

(1)Includes $10.7 billion and $12.4 billion of Credit card and other loans available to settle obligations of consolidated VIEs as of December 31, 2025 and 2024, respectively.

(2)Includes $378 million of accrued interest and fees that have not yet been billed to cardholders as of both December 31, 2025 and 2024.

Schedule of Aging Analysis of Total Credit Card and Other Loans Portfolio at Amortized Cost

The following table provides the delinquency trends of our Credit card and other loans portfolio, based on the amortized cost, as of the dates presented:


	Aging Analysis of Delinquent Amortized Cost Credit Card and Other Loans (1)
	31 to 60 Days Past Due		61 to 90 Days Past Due		91 or more Days Past Due		Total		Total Current		Total
(Millions)
December 31, 2025	$	359	$	282	$	676	$	1,317	$	17,076	$	18,393

December 31, 2024	$	369	$	288	$	730	$	1,387	$	17,105	$	18,492

______________________________


	Aging Analysis of Delinquent Amortized Cost Loan Modifications – Credit Card Loans
	31 to 60 Days Past Due		61 to 90 Days Past Due		91 or more Days Past Due		Total		Total Current		Total
(Millions)
December 31, 2025	$	24	$	22	$	26	$	72	$	253	$	325

December 31, 2024	$	21	$	18	$	22	$	61	$	242	$	303

Schedule of Composition of Obligor Credit Quality

The following table reflects the distribution of credit card loans by Vantage score as of December 31:


	Vantage
	2025						2024
	661 or Higher		601 to 660		600 or Less		661 or Higher		601 to 660		600 or Less
Credit card loans	59	%	27	%	14	%	58	%	27	%	15	%

Schedule of Information on Credit Card Loans that are Considered Troubled Debt Restructurings

The following table provides information relating to credit card loans to borrowers experiencing financial difficulty that were granted a concession under a Loan Modification program during the years ended December 31:


	2025			2024			2023
(Millions, except percentages)
Account balance (1)	$	325		$	303		$	269
% of Total credit card loans	1.8		%	1.7		%	1.4		%
Weighted average interest rate reduction (% points)	23.5		%	22.0		%	19.2		%

__________________________________

Income Taxes - Schedule of Federal Statutory Rate to Income from Continuing Operations Before Income Taxes (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Income Tax Disclosure [Abstract]
Expected expense at statutory rate	$ 129	$ 80	$ 203
State and local income taxes, net of federal income tax effect	5	15	27
Non-deductible expenses		29	8
Valuation allowance		(1)	(5)
Audit resolutions		(20)	0
Other	(3)	(1)	(2)
Effective income tax	$ 94	$ 102	$ 231

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

GOODWILL AND INTANGIBLE ASSETS, NET - Finite Lived Assets and Indefinite Lived Assets (Details) - USD ($) $ in Millions	Dec. 31, 2025	Dec. 31, 2024
Finite-Lived Intangible Assets [Line Items]
Gross Assets	$ 174	$ 223
Accumulated Amortization	(96)	(115)
Net	78	108
Total Intangible Assets
Gross Assets	178	227
Accumulated Amortization	(96)	(115)
Net	82	112
Tradename
Indefinite-lived Intangible Assets [Line Items]
Tradename	4	4
Premium on purchased credit card loan portfolios
Finite-Lived Intangible Assets [Line Items]
Gross Assets	172	221
Accumulated Amortization	(94)	(113)
Net	78	108
Total Intangible Assets
Accumulated Amortization	$ (94)	$ (113)
Premium on purchased credit card loan portfolios \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life	3 years	3 years
Premium on purchased credit card loan portfolios \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life	13 years	13 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Assets	$ 2	$ 2
Accumulated Amortization	(2)	(2)
Net	$ 0	$ 0
Useful Life	5 years	5 years
Total Intangible Assets
Accumulated Amortization	$ (2)	$ (2)

DEPOSITS - Maturity of Deposits (Details) $ in Millions	Dec. 31, 2025 USD ($)
Other Liabilities [Abstract]
2026	$ 4,420
2027	1,295
2028	366
2029	59
2030	51
Thereafter	0
Total certificates of deposit	6,191
Time deposits, unamortized debt discount	$ 4

PARENT COMPANY FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Condensed Statements of Income and Comprehensive Income

Parent Company – Condensed Statements of Income and Comprehensive Income


	Years Ended December 31,
	2025		2024		2023
(Millions)
Total interest income	$	62	$	11	$	12
Total interest expense	108		116		111
Net interest expense	(46)		(105)		(99)
Dividends from subsidiaries	834		910		1,063
Loss from equity method investment	—		—		(6)
Total net interest and non-interest income	788		805		958
Total non-interest expenses	76		121		12
Income before income taxes and equity in undistributed net income of subsidiaries	712		684		946
Benefit for income taxes	31		38		31
Income before equity in undistributed net income of subsidiaries	743		722		977
Equity in undistributed net loss of subsidiaries	(225)		(445)		(259)
Net income	$	518	$	277	$	718

Total comprehensive income, net of tax	$	518	$	277	$	718

Schedule of Condensed Balance Sheets

Parent Company – Condensed Balance Sheets


	December 31,
	2025		2024
(Millions)
Assets
Cash and cash equivalents (1)	$	312	$	21
Investment in subsidiaries	3,080		3,195
Intercompany receivables, net	733		773

Other assets	93		123
Total assets	$	4,218	$	4,112
Liabilities
Long-term and other debt	$	886	$	999

Other liabilities	5		62
Total liabilities	891		1,061
Stockholders’ equity	3,327		3,051
Total liabilities and stockholders’ equity	$	4,218	$	4,112

______________________________

(1) Includes $210 million in deposits with CCB as of December 31, 2025. There were no deposits with either of our Banks as of December 31, 2024.

Schedule of Statements of Cash Flows

Parent Company – Condensed Statements of Cash Flows


	Years Ended December 31,
	2025		2024		2023
(Millions)
Net cash provided by (used in) operating activities	$	482	$	(182)	$	(422)
Cash flows from investing activities:
Investment in subsidiaries	(75)		—		—
Net increase in amounts due from subsidiaries	(450)		—		—
Dividends received	834		910		1,063

Net cash provided by investing activities	309		910		1,063
Cash flows from financing activities:
Borrowings under debt agreements	900		300		1,401
Repayments of borrowings under debt agreements	(1,079)		(894)		(1,882)
Payment of deferred financing costs	(20)		(10)		(45)
Payment of capped call transactions	—		—		(39)
Dividends paid	(42)		(43)		(42)
Repurchases of common stock	(313)		(55)		(35)
Net proceeds from the issuance of preferred stock	71		—		—
Other	(17)		(7)		(2)
Net cash used in financing activities	(500)		(709)		(644)
Change in cash, cash equivalents and restricted cash	291		19		(3)
Cash, cash equivalents and restricted cash at beginning of year	21		2		5
Cash, cash equivalents and restricted cash at end of year	$	312	$	21	$	2

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2025

Accounting Policies [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

Principles of Consolidation

All intercompany transactions have been eliminated.

Segment Reporting

Amounts Based on Estimates and Judgments

expenses during the reporting periods. The most significant of those estimates and judgments relate to our Allowance for credit losses and Goodwill; actual results could differ.

Consolidated Statements of Income

Interest on cash and investment securities: Represents revenue earned on cash and cash equivalents as well as investments in debt securities, and is recognized in the period earned.

Information processing and communication expenses: Represents costs incurred in relation to data processing, and software license and maintenance charges. These costs are expensed as incurred.

Revenue from Contract with Customer

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents: Includes cash and due from banks, interest-bearing cash balances such as those invested in money market funds, as well as other highly liquid short-term investments with an original maturity of three months or less.Restricted cash primarily includes cash restricted for principal and interest repayments of debt issued by our consolidated VIEs, as well as other restricted amounts including cash pledged to collateralize our derivative contracts. Restricted cash is recorded in Other assets on the Consolidated Balance Sheets

Property and Equipment

Property and equipment: Furniture, equipment and leasehold improvements are carried at cost less accumulated depreciation, and depreciation is recognized on a straight-line basis. Costs incurred during construction are capitalized; depreciation begins once the asset is placed in service and is also recognized on a straight-line basis. Our furniture and equipment is depreciated over the estimated useful lives of the assetsCosts associated with the acquisition or development of internal-use software are also capitalized and recorded in Property and equipment. Once the internal-use software is ready for its intended use, the cost is amortized on a straight-line basis over the software’s estimated useful life.

Property and Equipment: Impairment

Leases

modification of the lease, at the present value of the contractual fixed lease payments, discounted using our incremental borrowing rate (as the rate implicit in the lease is typically not readily determinable) and are recorded within Other liabilities on the Consolidated Balance Sheets. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Leases with an initial term of 12 months or less are not recognized on the Consolidated Balance Sheets; lease expense for these leases is recognized on a straight-line basis over the lease terms.As with other long-lived assets, right-of-use assets are reviewed for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable.

Derivatives

Concentrations

CONCENTRATIONS

Recently Adopted and Recently Issued Accounting Standards

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS


Accounting Standards Recently Adopted during 2025
Standard	Guidance	Timing and Financial Statement Impact
Income Taxes: Improvements to Income Tax Disclosures Issued December, 2023	Requires greater disaggregation of rate reconciliation and income taxes paid information, as well as other changes intended to enhance the transparency and decision-usefulness of income tax disclosures.	Adopted effective with this report on a prospective basis. Adoption required enhancements to our income tax disclosures but did not have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Accounting Standards Recently Issued but Not Yet Adopted as of December 31, 2025
Standard	Guidance	Timing and Financial Statement Impact
Debt – Debt with Conversion and Other Options: Induced Conversions of Convertible Debt Instruments Issued November, 2024	Improves the relevance and consistency in application of the induced conversion guidance for (a) convertible debt instruments with cash conversion features and (b) debt instruments that are not currently convertible.	Adopted January 1, 2026. Adoption had no impact on our financial reporting and will not have any impact in the near term as all of our Convertible Notes had been extinguished and no Convertible Notes remained outstanding as of December 31, 2025. Additionally, adoption did not have a significant impact on our operational processes, controls and governance in support of the new guidance.
Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses Issued November, 2024	Requires disaggregated disclosure of certain income statement expenses on the face of the Consolidated Statements of Income, and further disaggregation of certain expense captions into specified categories in disclosures within the notes to the Consolidated Financial Statements.	Effective beginning with our Annual Report on Form 10-K for the year ending December 31, 2027, and effective for interim reporting periods beginning in 2028. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Intangibles – Goodwill and Other – Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software Issued September, 2025	Amends certain aspects of the accounting for and disclosure of internal-use software costs, including removing all references to prescriptive and sequential software development stages to align better with current software development methods, e.g., agile.	Effective January 1, 2028. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Financial Instruments – Credit Losses: Purchased Loans Issued November, 2025	Amends the accounting for acquired loans (excluding credit cards) that meet certain criteria at acquisition (referred to as purchased seasoned loans) by recognizing them at their purchase price plus an allowance for expected credit losses (i.e., the gross-up approach).	Effective January 1, 2027. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.

Credit Card and Other Loans

Financing Receivable

Credit Card Loans

Transfers of Financial Assets

SECURITIZATIONS

Goodwill

Intangible Assets, Net

Stock-based Compensation Expense

Income Taxes

Earnings Per Share

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES (Tables)

12 Months Ended

Dec. 31, 2025

Other Non-Interest Income and Other Non-Interest Expenses [Abstract]

Schedule of Components of Other Non-Interest Income

The following table provides the components of Other non-interest income for the years ended December 31:


	2025		2024		2023
(Millions)
Payment protection products	$	116	$	120	$	132
Paper statement fees	82		22		—
Loss from equity method investment	—		—		(6)
Other	2		2		2
Total other non-interest income	$	200	$	144	$	128

Schedule of Components of Other Non-interest Expenses

The following table provides the components of Other non-interest expenses for the years ended December 31:


	2025		2024		2023
(Millions)
Professional services and regulatory fees	$	112	$	112	$	128
Debt repurchases	74		117		1
Occupancy expense	23		22		22
Other (1)	39		49		68
Total other non-interest expenses	$	248	$	300	$	219

______________________________

(1)Primarily related to costs associated with various other individually insignificant operating activities