Bread Financial Reports 7% Increase in Net Income for Q2 2026

Bread Financial Holdings, Inc. reported its financial results for the second quarter of 2026, revealing a total net interest and non-interest income of $993 million, a 7% increase from $929 million in the same period last year. The company’s provision for credit losses rose to $313 million, up 14% from $274 million in the prior year, reflecting a combination of a reserve release and net principal losses. Net income for the quarter was $146 million, or $3.55 per diluted share, compared to $139 million, or $2.94 per diluted share, in the second quarter of 2025, marking a 5% increase in net income year-over-year.

The company experienced significant growth in credit sales, which reached $7.5 billion, an 11% increase from $6.8 billion in the previous year. Average credit card and other loans increased by 3% to $18.2 billion, while end-of-period loans rose by 5% to $18.5 billion. The net interest margin improved to 18.49%, up from 17.71% in the prior year, driven by higher loan yields and improved funding costs. However, non-interest income decreased slightly by $1 million, attributed to increased costs associated with brand partner retailer share arrangements.

Strategically, Bread Financial has diversified its product offerings, particularly through the expansion of co-brand credit card programs, which have shown higher credit sales per account and improved credit risk metrics. The company also issued $135 million in preferred stock during the quarter, which contributed to its capital structure optimization. Additionally, Bread Financial repurchased 2.8 million shares of common stock for $241 million, leaving an outstanding share repurchase authorization of $449 million as of June 30, 2026.

Operationally, the company reported a decrease in its allowance for credit losses to $2.075 billion, down from $2.106 billion at the end of 2025, reflecting improved credit quality and a reduction in the overall loan balance. The delinquency rate improved to 5.25% from 5.75% year-over-year, while the net principal loss rate decreased to 6.98% from 7.88%. The company’s direct-to-consumer deposits increased by 16% to $9.4 billion, representing 50% of total funding, up from 45% a year ago.

Looking ahead, Bread Financial anticipates continued growth in average credit card and other loans in the low- to mid-single digits for 2026, alongside a similar increase in total net interest and non-interest income. The company expects its net interest margin to remain flat to slightly higher than in 2025, driven by ongoing pricing actions and improving cost of funds. Bread Financial remains focused on expanding its product offerings and leveraging technology to enhance operational efficiency and customer engagement.