Bread Financial
Fourth Quarter and Full Year 2022 Results
January 26, 2023
Ralph Andretta
President & CEO
Perry Beberman
EVP & CFO
©
2
0
2
2
B r e a d
F i n a
c i a l
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as "believe," "expect," "anticipate," "estimate," "intend," "project," "plan," "likely," "may," "should" or other words or phrases of similar import. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding, and the guidance we give with respect to, our anticipated operating or financial results, future financial performance and outlook, future dividend declarations, and future economic conditions.
We believe that our expectations are based on reasonable assumptions. Forward-looking statements, however, are subject to a number of risks and uncertainties that are difficult to predict and, in many cases, beyond our control. Accordingly, our actual results could differ materially from the projections, anticipated results or other expectations expressed in this release, and no assurances can be given that our expectations will prove to have been correct. Factors that could cause the outcomes to differ materially include, but are not limited to, the following: macroeconomic conditions, including market conditions, inflation, rising interest rates, unemployment levels and the increased probability of a recession, and the related impact on consumer payment rates, savings rates and other behavior; global political and public health events and conditions, including the ongoing war in Ukraine and the continuing effects of the global COVID-19 pandemic; future credit performance, including the level of future delinquency and write-off rates; the loss of, or reduction in demand from, significant brand partners or customers in the highly competitive markets in which we compete; the concentration of our business in U.S. consumer credit; inaccuracies in the models and estimates on which we rely, including the amount of our Allowance for credit losses and our credit risk management models; the inability to realize the intended benefits of acquisitions, dispositions and other strategic initiatives, including the spinoff of our former LoyaltyOne® segment; our level of indebtedness and ability to access financial or capital markets; pending and future legislation, regulation, supervisory guidance, and regulatory and legal actions, including, but not limited to, those related to financial regulatory reform and consumer financial services practices, as well as any such actions with respect to late fees, interchange fees or other charges; impacts arising from or relating to the transition of our credit card processing services to third party service providers that we completed in 2022; and failures or breaches in our operational or security systems, including as a result of cyberattacks, unanticipated impacts from technology modernization projects or otherwise. The foregoing factors, along with other risks and uncertainties that could cause actual results to differ materially from those expressed or implied in forward-looking statements, are described in greater detail under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the most recently ended fiscal year, which may be updated in Item 1A of, or elsewhere in, our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2022. Our forward-looking statements speak only as of the date made, and we undertake no obligation, other than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.
Non-GAAP Financial Measures
We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (GAAP). However, certain information included within this presentation, constitutes non-GAAP financial measures. Our calculations of non-GAAP financial measures may differ from the calculations of similarly titled measures by other companies. In particular, Pretax pre-provisionearnings (PPNR) is calculated by increasing/decreasing Income from continuing operations before income taxes by the net build/release in Provision for credit losses. We use PPNR as a metric to evaluate our results of operations before income taxes, excluding the volatility that can occur within Provision for credit losses. Tangible common equity over Tangible assets (TCE/TA) represents Total stockholders' equity reduced by Goodwill and intangible assets, net, (TCE) divided by Tangible assets (TA), which is Total assets reduced by Goodwill and intangible assets, net. We use TCE/TA as a metric to evaluate the Company's capital adequacy and estimate its ability to cover potential losses. Tangible book value per common share represents TCE divided by shares outstanding. We use Tangible book value per common share as a metric to estimate the Company's potential value in relation to tangible assets per share. We believe the use of these non-GAAP financial measures provide additional clarity in understanding our results of operations and trends. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, please see the "Reconciliation of GAAP to Non-GAAP Financial Measures".
©2023 Bread Financial | 2 |
Continued Business Transformation in 2022
Transforming our Company to deliver sustainable, profitable growth
Invested more than $125 million in technology | ||
Rebranded to Bread Financial, a tech-forward | Successfully launched new brand partners and | modernization, digital advancement, marketing, |
financial services company | renewed long-term relationships | and product innovation |
Expanded our product suite and | Enhanced our core technology and | Recognized for our prioritization of |
direct-to-consumer offerings | digital capabilities | Environmental, Social, and Governance |
©2023 Bread Financial | 3 |
Achievement of 2022 Financial Outlook
Full Year 2021 | Full Year 2022 | Full Year 2022 |
Actuals | Outlook | Actuals |
Average loans | Up low | Up 13% |
$15,656 million | double digits | $17,768 million |
Revenue | Aligned with / better than | Up 17% |
$3,272 million | loan growth | $3,826 million |
Total non-interest expenses | Positive operating leverage | Positive operating leverage = 2% |
$1,684 million | $1,932 million | |
Net loss rate | Low-to-mid | 5.4% |
4.6% | 5% range | |
Additional Financial Achievements
- Quality growth as PPNR increased 19% compared with 2021
- Strengthened financial resilience through improvement in capital positioning and debt reduction
- Increased credit loss absorption capacity through loan loss reserves
- Grew retail deposits on our Bread Savings platform to $5.5 billion, an increase of $2.3 billion or 72%
☑
☑
☑
☑
©2023 Bread Financial | 4 |
4 |
4Q22 Business Development Highlights
New Brand Partnerships | Brand Partner Renewal |
Select New Bread Pay Partners
Continued strong | boutique tech retailer | luxury handbags | tires, wheels & | online jewelry & | exercise & fitness | |
merchant adoption | auto parts | accessories retailer | equipment | |||
©2023 Bread Financial | 5 |
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Bread Financial Holdings Inc. published this content on 26 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 January 2023 12:22:08 UTC.