Q2 2026 Bread Financial Holdings Inc Earnings Call Transcript
Key Points
- Bread Financial Holdings Inc (BFH) reported strong financial results for the second quarter, with net income reaching $146 million and a 22% year-over-year increase in tangible book value per common share.
- The company achieved an 11% year-over-year growth in adjusted pre-provision net revenue (PPNR), supported by a 7% increase in revenue and disciplined expense management.
- Credit sales grew by 11% year over year, with a 5% increase in end-of-period loans, driven by strong execution across product mix and industry verticals.
- Direct-to-consumer deposits grew 16% year over year to $9.4 billion, now comprising 50% of the company's funding mix, marking a significant milestone.
- The company continues to optimize its capital stack, issuing preferred stock and repurchasing 7% of its outstanding common shares, demonstrating disciplined capital allocation.
- Despite strong results, the company remains cautious due to ongoing macroeconomic uncertainty and persistent inflation, which could impact consumer decision-making.
- Higher provisions for credit losses and income taxes partially offset the increase in net income, reflecting a reserve release of only $3 million compared to $74 million last year.
- Non-interest income was lower year over year by 4%, driven by higher retailer share arrangements and lower billed late fees.
- The company anticipates expenses will increase sequentially in the third and fourth quarters due to growth-related variable expenses and continued investments.
- The pace of share repurchase activity is expected to slow in the third quarter as loan growth is anticipated to increase, impacting capital allocation flexibility.
Good morning, and welcome to Bread Financial's second-quarter 2026 earnings conference call. My name is Shannon, and I will be coordinating your call today.
(Operator Instructions) It is now my pleasure to introduce Mr. Brian Vereb, Head of Investor Relations at Bread Financial. The floor is yours, sir.
Thank you. Copies of the slides we will be reviewing, and the earnings release can be found on the investor relations section of our website at breadfinancial.com.
On the call today, we have Ralph Andretta, President and Chief Executive Officer, and Perry Beberman, Executive Vice President and Chief Financial Officer.
Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are based on management's current expectations and assumptions and are subject to the risks and uncertainties described in the company's earnings release and other
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