Bread Financial Holdings, Inc. · NYSE:BFH
Bread Financial — Q1 2025 Earnings Presentation
24 slides from Bread Financial's earnings presentation, Apr 24, 2025
Slide 1: First quarter 2025 results
First quarter 2025 results April 24, 2025 © 2 0 2 2 B r e a d F i n a n c i a l |
Slide 2: Key highlights
First quarter 2025 Demonstrated financial resilience and opportunistic capital allocation • Enhanced financial resilience through responsible growth, proactive risk management, prudent capital allocation Key to strengthen our balance sheet, and ongoing operational excellence initiatives. • Net incom
Slide 3: First quarter 2025 financial highlights
First quarter 2025 financial highlights Continuing operations(1) Year-over-year comparisons • Credit sales of $6.1 billion increased 1%, driven by increased general-purpose spending. Revenue • Average loans of $18.2 billion decreased 2%, primarily due to the macroeconomic environment throughout $970
Slide 4: Summary P&L results
Summary P&L results Continuing operations ($ in millions) 1Q25 1Q24 $ change % change Pretax pre-provision earnings⁽¹⁾ Total interest income $ 1,231 $ 1,300 $ (69) (5) ($ in millions) Total interest expense 225 248 (23) (9) Net interest income 1,006 1,052 (46) (4) -3% Total non-interest income (36)
Slide 5: Net interest margin
Net interest margin Interest-earning asset yields and mix Interest-bearing liability costs and funding mix Loan yield Avg. earning asset yield Net interest margin Cost of total interest-bearing liabilities Cost of deposits 28.6% 27.7% 27.4% 26.6% 27.0% 26.1% 26.4% 26.5% 25.7% 24.8% 5.4% 5.4% 5.4% 5.
Slide 6: Funding, capital, and liquidity
Funding, capital, and liquidity Funding sources CET1 and total risk-based capital (TRBC) ratios walk ($ in billions) $18.5 $18.3 % of funding $1.4 CET1 TRBC $1.1 5% $3.7 $4.2 23% 1Q24 12.6 % 14.0 % Unsecured borrowings Net earnings 2.0 % 2.0 % Secured borrowings Risk-weighted asset changes 0.3 % 0.4
Slide 7: Credit quality and allowance
Credit quality and allowance Delinquency rates Net loss rates 6.3% 5-year peak rate: 6.5% 5-year peak rate: 8.6% 5.7% 6.5% 5.5% 6.4% 8.5% 8.6% 6.2% 8.2% 6.0% 5.9% 5.9% 8.0% 8.0% 8.0% 7.8% 5-year avg rate: ~5.1% 7.0% 6.9% 5-year avg rate: ~6.5% 5-year low rate: 3.3% 5-year low rate: 3.9% 1Q23 2Q23 3Q
Slide 8: 2025 financial outlook
2025 financial outlook As of 4/24/2025 Our 2025 outlook assumed no late fee reduction related to the CFPB late fee rule, which has recently been vacated.(1) Full year 2024 actuals Full year 2025 outlook Commentary Based on an updated range of economic scenarios and expected impacts on consumer spend
Slide 9: Appendix
Appendix © 2 0 2 2 ©2025 Bread Financial 9 B r e a d F i n a n c i a l |
Slide 10: Building on our position of strength
Building on our position of strength 2025 focus areas Responsible Manage to the Disciplined Operational growth macroeconomic capital allocation excellence Scale diversified product and regulatory and risk Accelerate continuous suite enabling growth and environment management improvement initiatives
Slide 11: Total non-interest expenses
Total non-interest expenses Total non-interest expenses Continuing operations ($ in millions) 1Q25 vs. 1Q24 change in non-interest expenses -1% ($ in millions) $482 $477 Employee comp. and benefits: $2 1% Card and processing: -5% $(4) Info. processing and comm.: $7 9% Marketing: $7 25% 1Q24 1Q25 Dep
Slide 12: Diversified product and partner mix
Diversified product and partner mix Product diversification Partner diversification End-of-period loans Credit sales End-of-period loans Credit sales 1% 2% 2% 5% 4% 4% 4% 4% 37% 54% 4% 4% 4% 5% 3% 6% 7% 13% 33% 17% 57% 40% 23% 19% 24% 24% 1Q25 1Q25 1Q25 1Q25 Private label Co-brand Proprietary Bread
Slide 13: Summary financial highlights
Summary financial highlights Continuing operations 1Q25 vs 1Q25 vs 1Q25 1Q24 4Q24 ($ in millions) 1Q24 4Q24 Credit sales $ 6,106 $ 6,030 1% $ 7,898 (23%) Average credit card and other loans $ 18,164 $ 18,546 (2%) $ 18,156 —% End-of-period credit card and other loans $ 17,815 $ 18,185 (2%) $ 18,896 (
Slide 14: Summary financial highlights – trending
Summary financial highlights – trending Continuing operations ($ in millions) 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 Credit sales $ 7,373 $ 7,057 $ 6,668 $ 7,802 $ 6,030 $ 6,570 $ 6,464 $ 7,898 $ 6,106 Year-over-year change 7% (13%) (13%) (23%) (18%) (7%) (3%) 1% 1% Average credit card and oth
Slide 15: Summary P&L results – trending
Summary P&L results – trending Continuing operations ($ in millions) 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 Total interest income $ 1,335 $ 1,197 $ 1,301 $ 1,312 $ 1,300 $ 1,228 $ 1,277 $ 1,219 $ 1,231 Total interest expense 218 205 219 237 248 241 240 231 225 Net interest income 1,117 992 1,0
Slide 16: Net interest margin
Net interest margin 1Q25 Interest income / ($ in millions) Average balance Average yield / rate expense Cash and investment securities $ 4,423 $ 46 4.2% Credit card and other loans 18,164 1,185 26.5% Total interest-earning assets 22,587 1,231 22.1% Direct-to-consumer (Retail) 7,798 87 4.5% Wholesale
Slide 17: Capital
Capital Rolling 4 ($ in millions) 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 quarter avg. Total company Common equity tier 1 capital ratio(1) 11.8% 12.1% 12.9% 12.2% 12.6% 13.8% 13.3% 12.4% 12.0% 12.9% Total risk-based capital ratio(2) 13.2% 13.4% 14.2% 13.6% 14.0% 15.1% 14.6% 13.8% 15.5% 14.8% To
Slide 18: Credit quality trends
Credit quality trends Delinquency rates 15-year peak rate: 6.5% 5.7% 6.5% 6.4% 5.5% 5.5% 6.3% 6.2% 6.0% 5.9% 5.9% 15-year avg rate: ~4.9% 5.7% 4.4% 4.1% 3.8% 3.9% 3.3% 15-year low rate: 3.3% 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 Net loss rates 15-year peak r
Slide 19: Additional footnotes and definitions of terms
Additional footnotes and definitions of terms Notes (1) Beginning in 2024, we revised the calculation of average balances to more closely align with industry practice by incorporating an average daily balance. Prior to 2024, average balances represent the average balance at the beginning and end of
Slide 20: Additional footnotes and definitions of terms
Additional footnotes and definitions of terms Net interest margin (1) Net interest margin: Net interest margin represents annualized Net interest income divided by average Total interest-earning assets. Capital (1) Common equity tier 1 capital ratio: Common equity tier 1 capital ratio represents tie
Slide 21: Forward-looking statements
Forward-looking statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be iden
Slide 22: Non-GAAP financial measures
Non-GAAP financial measures We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (GAAP). However, certain information included herein constitutes Non-GAAP Financial Measures. Our calculations of Non-GAAP Financia
Slide 23: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures ($ in millions, except per share amounts) 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 Adjusted total non-interest expenses Total non-interest expenses $ 544 $ 530 $ 502 $ 516 $ 482 $ 469 $ 574 $ 536 $ 477 Impact from repurchased Convertible Note
Slide 24: Reconciliation of GAAP to Non-GAAP financial measures
Reconciliation of GAAP to Non-GAAP financial measures ($ in millions) 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 Pretax pre-provision earnings (PPNR) Income (loss) before income taxes $ 638 $ 86 $ 225 $ 19 $ 188 $ 180 $ 40 $ (27) $ 197 Provision for credit losses 107 336 304 482 321 290 369 417 29
Bread Financial Holdings — Q1 2025 Earnings Presentation on 6ix