Core Viewpoint - Bread Financial Holdings, Inc. announced its fourth quarter and full year 2025 financial results, highlighting its position as a tech-forward financial services company providing flexible payment, lending, and saving solutions [1]. Group 1: Financial Performance - The company released its financial results for the fourth quarter and full year 2025, with all earnings-related materials available on its investor relations website [1]. - A conference call will be hosted by the President and CEO Ralph Andretta and CFO Perry Beberman to discuss the results [2]. Group 2: Company Overview - Bread Financial is recognized for offering personalized payment, lending, and saving solutions to millions of U.S. consumers, including general purpose credit cards and savings products [3]. - The company supports growth for well-known brands in various sectors such as travel & entertainment, health & beauty, jewelry, and specialty apparel through private label and co-brand credit cards [3]. - Bread Financial is celebrating 30 years of success in 2026, emphasizing its commitment to performance and sustainability [4].

Financial Performance - Full year 2025 revenue reached $3.8 billion, with adjusted net income of $572 million and net income of $578 million[13] - Adjusted earnings per diluted share for the fourth quarter were $2.07, compared to $0.41 in the prior year[22] - Net income for Q4 2025 was $53 million, up from $7 million in Q4 2024, with adjusted net income reaching $95 million compared to $20 million in the same period last year[59] - Income from continuing operations per diluted share for Q4 2025 was $1.16, significantly higher than $0.15 in Q4 2024[59] - Adjusted net income per diluted share for 2025 was $12.09, compared to $7.69 in 2024, reflecting strong operational performance[59] Credit Metrics - The net loss rate improved to 7.7%, down from 8.2% in 2024, while the delinquency rate decreased to 5.8% from 5.9%[18] - The company anticipates ongoing gradual improvement in credit metrics due to disciplined credit risk management[6] - The net loss rate for 2025 is 7.7%, with an expected improvement to 7.2% to 7.4% in 2026 due to resilient consumer behavior and disciplined credit management[37] - The provision for credit losses decreased to $373 million in Q4 2025 from $417 million in Q4 2024, indicating improved credit performance[61] Operational Efficiency - Total non-interest expenses decreased by $72 million, or 3%, reflecting operational excellence initiatives[18] - The adjusted efficiency ratio improved from 57% in 4Q24 to 51% in 4Q25, indicating better operational efficiency[47] - Adjusted total non-interest expenses for Q4 2025 were $500 million, a decrease from $525 million in Q4 2024, while total non-interest expenses were $555 million in Q4 2025 compared to $536 million in Q4 2024[59] Capital Management - The CET1 capital ratio increased from 12.4% in 4Q24 to 13.0% in 4Q25, reflecting net earnings and risk-weighted asset changes[31] - Average tangible common equity increased to $2,655 million in Q4 2025 from $2,465 million in Q4 2024, indicating a solid capital position[61] - The company reported a total stockholders' equity of $3,327 million in Q4 2025, up from $3,051 million in Q4 2024[61] - Capital allocation strategies will be disciplined to ensure appropriate returns on investments while maintaining a strong balance sheet[39] Growth Projections - Average loans for 2025 are projected at $17,850 million, with growth expected to be up low single digits in 2026[37] - Revenue for 2025 is reported at $3,845 million, with a similar low single-digit growth anticipated for 2026[37] - Direct-to-consumer deposits increased by 11% year-over-year to $8.5 billion, representing 48% of average total funding[6] - Credit sales for the fourth quarter were $8.1 billion, a 2% increase driven by new partner growth[24] Shareholder Returns - The company repurchased 5.7 million common shares for $310 million and increased the quarterly cash dividend by 10%[6] - The impacts from debt repurchases were $42 million in Q4 2025, compared to $13 million in Q4 2024, affecting net income positively[59] - The weighted average shares outstanding on a diluted basis decreased to 46.0 million in Q4 2025 from 50.9 million in Q4 2024, contributing to higher earnings per share[59] Future Focus - The company plans to focus on responsible growth and operational excellence in 2026, emphasizing technology advancements and risk management[38] - Liquid assets at the end of 4Q25 were $3.6 billion, down from $3.7 billion in 4Q24, representing 26.4% of total assets[30] - The delinquency rate peaked at 6.5% over the last five years, with a current rate of 5.9%[35]

Core Viewpoint - Bread Financial Holdings, Inc. has declared quarterly dividends for both its preferred and common stock for the first quarter of 2026, reflecting its ongoing commitment to returning value to shareholders [1]. Dividend Announcements - The Board declared a quarterly cash dividend of $26.35 per share on its 8.625% Non-Cumulative Perpetual Preferred Stock, Series A, payable on March 16, 2026, to stockholders of record as of February 27, 2026 [2]. - A quarterly cash dividend of $0.23 per share was declared on the common stock, also payable on March 16, 2026, to common stockholders of record at the close of business on February 27, 2026 [3]. Company Overview - Bread Financial is a tech-forward financial services company that offers simple, personalized payment, lending, and saving solutions to millions of U.S. consumers, enhancing customer experiences and supporting various brands in multiple sectors [4]. - The company is celebrating 30 years of success in 2026, indicating a long-standing presence and experience in the financial services industry [5].

Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of Bread Financial Holdings (BFH) and Brookfield Asset Management (BAM) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revi ...

Core Insights - Bread Financial Holdings (BFH) is anticipated to show revenue growth but a decline in earnings for Q4 2025, with revenues expected at $949 million, reflecting a 2.5% increase year-over-year [1][9] - The earnings consensus estimate is 38 cents per share, indicating a year-over-year decrease of 7.3% [2] Revenue and Earnings Estimates - The Zacks Consensus Estimate for BFH's fourth-quarter revenues is $949 million, which is a 2.5% growth from the previous year [1] - The earnings estimate for BFH is 38 cents per share, with no changes in the past week, representing a 7.3% decline year-over-year [2] Earnings Surprise History - BFH has a strong earnings surprise history, having beaten the Zacks Consensus Estimate in the last four quarters with an average surprise of 55.17% [3] Earnings Prediction Model - The model indicates a potential earnings beat for BFH, supported by a positive Earnings ESP of +32.20%, as the Most Accurate Estimate is 51 cents, higher than the consensus estimate [4] - BFH currently holds a Zacks Rank of 2 (Buy), which further supports the likelihood of an earnings beat [5] Factors Influencing Q4 Results - BFH's Q4 results are expected to benefit from product diversification, partner co-brand growth, proprietary cards, and the expansion of Bread Pay, which is likely to drive credit sales [6] - Credit sales are estimated at $8.2 billion, indicating a 3.3% year-over-year increase [6] - Total interest income is projected to be $1.3 billion, reflecting a 2.6% increase year-over-year, surpassing the consensus estimate of $1.2 billion [7] Loan and Interest Expense Estimates - Average and end-of-period credit card and other loans are estimated at $173.5 billion and $18.2 billion, respectively, influenced by payment rates and gross losses [8] - Interest expense is expected to rise to $238.2 million, suggesting a 3.1% year-over-year increase [8] Net Interest Margin and Non-Interest Expenses - The net interest margin may be negatively impacted by lower billed late fees and an elevated cash position, although pricing changes may provide some offset [10] - An increase in non-interest expenses is likely to contribute to a higher net loss rate, while share buybacks may help support the bottom line [10]

Group 1 - Proposed credit card interest rate cap policy could severely impact the $70 billion credit card debt securitization market, but investors believe the likelihood of implementation is low, resulting in a muted market reaction [1] - Analysts from JPMorgan indicated that a 10% interest rate cap would significantly reduce the excess spread, a key profitability metric, to levels comparable to those during the 2008 financial crisis [1] - The credit card asset-backed securities market is highly sensitive to the interest rate cap policy, which could block high-interest borrowers from accessing credit cards, leading to a significant contraction in the market [2][3] Group 2 - If the interest rate cap is enforced, banks are expected to tighten credit issuance, leading to a decline in overall loan volumes and a reduction in the issuance of credit card asset-backed securities [3] - Current data shows that credit card ABS has dropped from a peak of 36% of total ABS issuance in 2009 to just 9% [2] - The stock market reacted negatively, with significant declines in shares of banks and credit card issuers, particularly those with a higher proportion of low-quality borrowers [4] Group 3 - Analysts predict that if the interest rate cap is made permanent, it could lead to systemic adjustments in credit card companies' strategies, including reduced credit issuance to non-prime consumers and increased fees [4][5] - Major banks like Citigroup, JPMorgan, and Bank of America could see a decline in earnings per share ranging from 1% to 10% due to the proposed policy [5] - The potential impact on credit card companies' book values could be severe, with estimates suggesting declines of 20% to 40% for certain firms under the temporary cap [5][6]

Group 1 - The proposed 10% credit card interest rate cap by President Trump could significantly impact the banking sector and extend to consumer-related industries such as airlines and retail, potentially forcing consumers to seek higher-cost borrowing options [1][2] - Issuing banks may adopt multiple strategies to mitigate the pressure from the interest rate cap, including increasing fees, reducing consumer rewards, cutting operational expenses, and tightening credit limits, especially if the policy becomes permanent [1][2] - There is considerable doubt about the feasibility of implementing this cap, as previous attempts have failed, and analysts suggest that legislative action from Congress may be required [2][3] Group 2 - Analysts from Morgan Stanley predict that credit card companies' book values could suffer significant declines, with potential drops of 20% to 40% for certain firms under the temporary cap [3][4] - The impact on earnings per share for major credit card issuers could be severe, with estimates suggesting a 10% decline for Citigroup by 2026, while other banks like JPMorgan Chase and Bank of America may see smaller impacts ranging from -1% to -4% [2][3] - The stock market has already reacted to these risks, with companies that have a higher proportion of low-score borrowers experiencing the largest declines in stock prices [4]

Core Viewpoint - The proposed 10% cap on credit card interest rates by President Trump could significantly impact the banking sector and extend to consumer-related industries such as airlines and retail, potentially forcing consumers to seek higher-cost borrowing alternatives [1][2] Group 1: Impact on Credit Card Issuers - Credit card issuers may respond to the interest rate cap by increasing fees, reducing consumer rewards, cutting operational costs, and tightening credit limits, especially if the cap becomes permanent [1][2] - Analysts from Morgan Stanley predict that under the temporary cap, the book value of companies like Bread Financial, Synchrony Financial, and American Express could decline by 20% to 40% [3] - The impact on earnings per share for major credit card companies could be severe, with estimates suggesting a reduction of 80% for American Express and 60% for Citigroup [3] Group 2: Broader Economic Implications - The credit card industry is crucial to the U.S. economy, which is approximately 70% driven by consumer spending, with credit card spending accounting for just over 20% [2] - A tightening of credit by issuers could lead consumers to turn to less regulated and more expensive lending options, such as payday loans [1][2] - The potential for reduced credit availability could have a cascading effect on industries reliant on credit card revenue, particularly airlines and retail [2] Group 3: Market Reactions - Stock prices of companies with a higher proportion of low-credit borrowers have already begun to reflect the risks, with significant declines observed in shares of Bread Financial, Synchrony Financial, and others [4] - Major banks like Citigroup and JPMorgan also experienced stock price drops, indicating market concerns over the proposed policy's implications [4] - Analysts note that while the event's impact is broad, the likelihood of the cap being implemented remains low, but uncertainty in the industry has increased significantly [4]

Core Viewpoint - The U.S. financial sector experienced a significant decline following President Trump's call for a 10% cap on credit card interest rates, raising concerns about the profitability of banks and credit card companies [1][2] Group 1: Impact on Credit Card Companies - Credit card-related stocks saw notable declines, with Bread Financial (BFH.US) dropping over 10%, Synchrony Financial (SYF.US) down more than 8%, and First Capital Credit (COF.US) falling over 6.4% [1] - Analysts indicated that the proposed interest rate cap would directly compress the credit card spread, challenging business models that rely on high rates to cover risk costs [1] - If the 10% cap is implemented, credit card businesses could face overall losses, particularly affecting subprime credit cards [2] Group 2: Impact on Large Banks - Major banks such as Bank of America (BAC.US), Citigroup (C.US), and JPMorgan Chase (JPM.US), which have significant exposure to credit card operations, also saw their stock prices decline [1] - Analysts noted that Citigroup has the highest exposure in credit card business, followed by JPMorgan Chase, which was reflected in their stock performance [2] - The financial sector is expected to remain volatile in the short term, with future movements dependent on the likelihood of Trump's affordability proposal advancing in Congress [2]

Core Viewpoint - Trump's proposal to cap credit card interest rates at 10% has led to a significant decline in the stock prices of credit card issuers and related companies, raising concerns about the potential impact on their profitability and the credit market overall [1][2]. Group 1: Market Reaction - Following Trump's announcement, stocks of credit card companies such as Synchrony Financial and Bread Financial fell nearly 10%, while American Express and Citigroup dropped over 4% [1]. - Barclays experienced a significant intraday drop of 4.8%, marking its largest decline since October 17 of the previous year, highlighting the vulnerability of its U.S. retail banking segment, which heavily relies on credit card operations [3]. Group 2: Implications of the Proposal - If implemented, the proposed interest rate cap would result in the lowest credit card rates since 1994, with current average rates at 19.65% for general credit cards and 30.14% for store cards [2]. - Major banking associations have opposed the proposal, arguing it could push consumers towards less regulated and more expensive alternatives, potentially reducing access to credit for lower-income individuals [2]. - A study indicated that a similar interest rate cap in Illinois led to a 38% reduction in loans issued to subprime borrowers within six months, suggesting significant negative effects on credit availability [2]. Group 3: Company-Specific Insights - Barclays' U.S. retail banking division is projected to generate £3.6 billion in revenue by 2025, with credit card operations being a crucial component, contributing significantly to its income despite lower profit margins [3]. - Analysts suggest that any regulatory cap on credit card rates would have a pronounced impact on Barclays compared to European banks, emphasizing the importance of the U.S. market for its credit card business [3].