BFH Filings — Bread Financial Holdings, Inc. - FilingSpy
BFH
Bread Financial Holdings, Inc.
A financial services company that issues co-brand and private-label credit cards for dozens of brands, including Ulta Beauty, the NFL, and Dell, through its two banks, Comenity Bank and Comenity Capital Bank, plus installment loans and savings accounts. Founded in 1996 as Alliance Data Systems from the merger of J.C. Penney's credit card unit and The Limited's credit card bank, it renamed itself Bread Financial in 2022 after acquiring Bread, a buy-now-pay-later startup.
Q2 2026 revenue rose 6.9% to $993M as loan growth and pricing actions offset lower late fees
Loan growth returned to low-single-digit expansion this quarter. rose 6.9% to $993M and rose 20.7% to $3.55 as average loans increased 3% and widened, while the credit-loss provision climbed to $313M. The business is growing loans again, but credit provisioning is ticking up ahead of a planned bank merger.
Key takeaways
Credit sales grew 11% to $7.5B and average credit card and other loans increased 3% to $18.2B, driven by new brand partners and general-purpose spending, lifting 6.9% to $993M after two prior quarters of decline.
expanded to 18.49% from 17.71% as loan yields benefited from pricing actions and lower funding costs, partially offset by lower late fees.
rose 5% to $146M and rose 20.7% to $3.55, with the year-ago quarter's $139M comparison now fully cycled past the one-off portfolio sale gain.
Section summaries
Management's Discussion and Analysis
Q2 2026 net income rose 5% to $144M on 7% higher total net interest and non-interest income, driven by loan growth and pricing actions.
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Credit sales grew 11% to $7.5B, and average credit card and other loans increased 3% to $18.2B, driven by new brand partners and general-purpose spending.
The rose to $313M from $274M on a smaller of $3M versus $74M, even as net principal losses fell to $316M from $348M.
Total non-interest expenses were flat at $483M; the company issued $135M of preferred stock, repurchased $241M of common shares, and grew direct-to-consumer deposits 16% to $9.4B.
Full-year 2026 outlook calls for low- to mid-single-digit average loan growth, a net principal loss rate of 7.0%–7.1%, and flat to slightly higher.
What changed
Q2 2025 flagged the total net interest and non-interest income against a flat 2025 outlook after two straight quarterly declines; Q2 2026 rose 6.9%, reversing that trend.
The Q1 2026 watch item on the Q2 provision after a $303M figure with a $28M : Q2 provision rose to $313M with the release shrinking to $3M.
Full-year 2026 net principal loss rate was guided at 7.2%–7.4% with Q1 at 7.33%; Q2 printed inside that band at 7.0%–7.1% guided for the year after net principal losses fell to $316M.
The 2025 10-K flagged completion of the and merger in the second half of 2026; the Q2 filing reaffirms the plan with no change reported.
Risk factors showed no material change from the 2025 10-K, including the LoyaltyOne spinoff lawsuit and IRS tax-free status challenge carried over as contingent exposure.
What to watch
Q3 2026 after the $313M Q2 figure as the $3M base settles
Completion of the and merger in the second half of 2026
Full-year 2026 net principal loss rate against the 7.0%–7.1% guide as Q2 prints within range
Total net against the guided low-single-digit 2026 growth after Q2 rose 6.9%
expanded to 18.49% from 17.71%, as loan yields benefited from pricing actions and funding costs improved, partially offset by lower late fees.
rose to $313M from $274M, with a smaller reserve release ($3M vs. $74M) and lower net principal losses ($316M vs. $348M).
Total non-interest expenses were flat at $483M; adjusted expenses rose 3% due to higher wages and medical claims, partly offset by lower debt impacts.
The company issued $135M of preferred stock and repurchased $241M of common shares; CET1 ratio was 12.9%, and DTC deposits grew 16% to $9.4B.
Full-year 2026 outlook: average loan growth low- to mid-single digits, 7.0%–7.1%, and flat to slightly higher.
Quantitative and Qualitative Disclosures About Market Risk
Market Risk Market risk is the risk to current or anticipated earnings, capital or economic value arising from changes in the market value of portfolios, securities or other financial instruments. Market Risk includes interest rate risk which is the risk arising from movements i…
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Market Risk
Market risk is the risk to current or anticipated earnings, capital or economic value arising from changes in the market value of portfolios, securities or other financial instruments. Market Risk includes interest rate risk which is the risk arising from movements in interest rates. Our principal market risk exposures arise from volatility in interest rates and changes in the relationship between the interest rates on our assets (such as Credit card and other loans and Investments) and the interest rates on our liabilities (such as Deposits, Debt issued by consolidated variable interest entities and Long-term and other debt), which may include repricing risk, basis risk, yield curve risk and options risk, and their resulting impact on economic value, capitalization levels, and earnings.
There has been no material change from our 2025 Form 10-K related to our exposure to interest rate risk or other market risks.
Refer to (i) Part II, Item 1A, “Risk Factors—We may be adversely affected by LVI’s ongoing bankruptcy proceedings or pending or future litigation or other disputes involving or relating to LVI.” of our 2025 Form 10-K, (ii) Note 15, “Commitments and Contingencies” to our unaudite…
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Refer to (i) Part II, Item 1A, “Risk Factors—We may be adversely affected by LVI’s ongoing bankruptcy proceedings or pending or future litigation or other disputes involving or relating to LVI.” of our 2025 Form 10-K, (ii) Note 15, “Commitments and Contingencies” to our unaudited Consolidated Financial Statements, and (iii) “Risk Factors—Legal, Regulatory and Compliance Risks” of our 2025 Form 10-K, each of which is incorporated herein by reference.
There have been no material changes to the Risk Factors previously disclosed in our 2025 Form 10-K. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. For…
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There have been no material changes to the Risk Factors previously disclosed in our 2025 Form 10-K. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. For a discussion of the recent trends and uncertainties impacting our business, see also “Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) — Business Environment.”