Bread Financial Tightens 2026 Loan and Revenue Outlook

The Tip Desk · October 24, 2026 · 3 min read

The company now expects full-year average loans up about 4% and revenue up about 5%, and a net loss rate below 7.0%.

Bread Financial Holdings, Inc. (BFH), a tech-forward financial services company that issues co-brand and private-label cards, said average credit card and other loans of $18.6 billion rose 6% from a year earlier, faster than the 3% average-loan increase in the second quarter and 1% in the first.

End-of-period loans of $18.9 billion increased 7% year-over-year, after 5% growth in the prior quarter and 2% in the quarter before. Credit sales were $7.4 billion, up 9% from a year earlier, after 11% year-over-year growth in the second quarter and 7% in the first. The company attributed the sales increase to both new and existing brand partners and to general-purpose spending.

Revenue of $1,017 million rose 5% year-over-year, matching the first-quarter pace after 7% growth in the second quarter. The company said the increase primarily reflected loan growth, lower interest expense, and higher merchant and interchange fees, partially offset by higher retailer share arrangements and lower billed late fees. Total non-interest expenses of $487 million rose 2%, producing operating leverage. Pretax pre-provision earnings increased $35 million, or 7%, after a 14% year-over-year increase in the second quarter.

Net income of $156 million decreased 17% year-over-year because the year-earlier period included a $38 million favorable discrete tax item. Pretax income increased 6%. Diluted earnings were $3.82 a share.

Credit metrics continued to improve. The net loss rate was 6.40%, down 99 basis points from a year earlier, after 6.98% in the second quarter and 7.33% in the first. The delinquency rate was 5.57%, down 47 basis points year-over-year. The reserve rate declined 60 basis points year-over-year to 11.12%. Chief Financial Officer Perry Beberman said that, given year-to-date credit performance and current delinquency trends, the company is improving full-year 2026 net loss rate guidance for the second consecutive quarter, now projecting below 7%.

Consumer deposits increased 21% year-over-year to $9.9 billion at quarter-end, after 16% year-over-year growth in the second quarter. Average consumer deposits represented 53% of total funding, up from 47% in the prior-year period. The company said the bank merger completed on October 1 better positions it to increase consumer deposits as a core funding source.

The common equity tier 1 capital ratio was 13.1%, down from 14.0% a year earlier as a result of capital optimization. Tangible book value per common share increased 19% year-over-year to $66.95, after 22% growth in the second quarter and 26% in the first. Return on average tangible common equity was 23.6%.

During the quarter the company repurchased $75 million of common stock and $24 million of subordinated debt. The board raised the quarterly common stock dividend 9% to $0.25 a share. After the quarter, Moody’s upgraded the company to Ba1 from Ba2.

For the full year, Bread Financial now expects average loans up approximately 4% from 2025 and total revenue up approximately 5%, after the prior quarter’s low- to mid-single-digit ranges. It expects positive operating leverage in 2026, excluding pretax impacts from debt repurchases, and a normalized effective tax rate of 25% to 27%. The outlook is predicated on continued consumer resilience, inflation remaining above the Federal Reserve’s 2% target, and a generally stable labor market.