Bread Financial Reports Q2 2025 Results with $929M Income and 4% Net Income Increase

Bread Financial Holdings, Inc. reported its financial results for the second quarter of 2025, revealing a total net interest and non-interest income of $929 million, a decrease of 1% compared to $939 million in the same period last year. The company’s provision for credit losses also saw a decline, dropping to $274 million from $290 million year-over-year. Net income for the quarter was $139 million, up 4% from $133 million in the prior year, resulting in a net income per diluted share of $2.94, an increase of 11% from $2.66.

The company experienced a 4% increase in credit sales, totaling $6.8 billion, driven by new brand partner growth and higher general-purpose spending. However, the end-of-period credit card and other loans remained flat at $17.7 billion, with average loans decreasing by 1%. The decline in average loans was attributed to macroeconomic challenges that have led to lower consumer spending and elevated gross credit losses over the past year. The net interest margin for the quarter was reported at 17.7%, slightly down from 18.0% in the previous year, primarily due to lower billed late fees and a shift in product mix towards co-brand cards.

Strategically, Bread Financial has continued to diversify its product offerings, particularly through the growth of its co-brand credit card programs, which have shown higher credit sales per account and improved credit risk metrics. The company also completed a $150 million share repurchase program, acquiring 3.2 million shares, and executed a tender offer for $150 million of its 9.750% Senior Notes due 2029, aimed at reducing higher-cost debt. Additionally, direct-to-consumer deposits increased by 12% to $8.1 billion, now representing 45% of total funding.

Operationally, Bread Financial reported a decrease in its allowance for credit losses to $2.1 billion, reflecting improved credit metrics and higher-quality new account acquisitions. The company’s reserve rate stood at 11.9% as of June 30, 2025. The percentage of cardholders with Vantage scores of 660 or higher remained above pre-pandemic levels, indicating a more diversified and healthier credit portfolio. Looking ahead, the company anticipates that average credit card and other loans will remain flat to slightly lower for the remainder of 2025, while total net interest and non-interest income is expected to be relatively flat, influenced by ongoing pricing actions and shifts in product mix.