On this page of StockholderLetter.com we present the latest annual shareholder letter from BREAD FINANCIAL HOLDINGS, INC. — ticker symbol BFH. Reading current and past BFH letters to shareholders can bring important insights into the investment thesis.

Newsweek s Most Responsible Companies Newsweek s Most Trustworthy Companies in America MAY 2025-MAY 2026 USA JUN 2025-JUN 2026 INDIA Great Place to Work Certified (both U.S. and India) Great Place to Work Best Workplaces in Fintech (India) Benchmark Portal Center of Excellence 2025 Highlights Increased Net Income to: Increased Diluted EPS to: $521M $10.96 (87% increase) (98% increase) Increased Tangible Book Value Per Common Share* to: 10 of 10 Largest Programs Secured into at Least: $57.57 2028 (23% increase) Increased Share Repurchases to: Increased Common Stock Dividend by: $310M 10% (5.6x increase) ($0.23 per share) Grew Consumer Deposits to: Consumer Deposits Account for: $8.5B 48% of 4Q25 total funding FORBES Best Large Employer * Tangible book value per common share is a non-GAAP financial measure; see the reconciliation included in this Annual Report. The figures above are as of, or for the year ended, December 31, 2025 from continuing operations, and comparative figures are measured against December 31, 2024.
Dear Bread Financial Stakeholders Our 2025 financial results reflect disciplined execution, financial resilience, and meaningful progress across our strategic priorities to support significant long-term growth opportunities. Throughout the year, we focused on growing responsibly, improving our credit performance metrics, optimizing our capital structure, expanding direct-to-consumer deposits, and further enhancing our enterprise risk management framework. These actions, combined with consistent operating performance, contributed to credit rating upgrades and positive outlooks from leading rating agencies. Just as importantly, we advanced operational excellence and maintained disciplined expense management through efficiency initiatives, technology modernization, automation, and increased enterprisewide implementation of AI, driving operating leverage. Additionally, we returned capital to shareholders through share repurchases and an increased dividend, while strengthening our balance sheet. Entering 2026, we believe the foundation we have built positions us well to navigate an evolving economic environment and create sustainable, long-term value for our shareholders, partners, and customers. Our core business is strong, our team is executing well, and we enter 2026 with momentum supported by solid financial performance, strong cash flow, and a healthy balance sheet. Ralph Andretta President and CEO 2025 Business Drivers In 2025, consumer financial health remained resilient, driving a 3.0% year-over-year increase in credit sales through higher transaction sizes and increased transaction frequency. We strengthened our portfolio of brand partners by signing and renewing programs across a diversified range of industry verticals, including travel and entertainment, technology, and home. Notable additions include Bed Bath & Beyond, Raymour & Flanagan, Vivint, and crypto.com. The multiyear extension of our long-standing relationship with Caesars Entertainment marked an important milestone, as all our top 10 programs are now renewed into at least 2028. Our differentiated platform, which combines a full product suite, advanced technology, and loyalty-driven customer engagement, helps us attract and retain high quality partners. In parallel, execution and discipline remained central to our strategy in 2025. We delivered positive operating leverage while advancing our ongoing technology transformation, including investments in cloud migration, automation, and artificial intelligence. These efforts enhanced scalability, improved the customer experience, and strengthened our risk management. Adjusted expenses declined year-over-year as our operational excellence efforts -- embedded in our culture efficiency. drove measurable improvement in
Stakeholder Letter Our Financial Performance We delivered meaningful improvement in profitability and credit performance in 2025. Revenue increased modestly, supported by pricing actions and lower funding costs, partially offset by lower late fees as consumer deposit offerings, which increased 11% year over year to $8.5 billion and represented 48% of average total funding for the fourth quarter of 2025, up from 43% a year earlier. We continued to proactively optimize our capital delinquency trends improved. Net interest margin structure through targeted debt and preferred equity expanded to 18.9%. Average loans declined 1% as higher payment rates and disciplined credit management actions. We opportunistically repurchased our outstanding convertible notes and 9.75% senior notes, pressured balances. Credit performance improved completed offerings of 8.375% subordinated notes and throughout the year, resulting in a lower provision for credit losses and a 70-basis point improvement in our reserve rate to 11.2%, while our full-year net loss rate 6.75% senior notes, and issued $75 million of 8.625% preferred stock, lowering our overall funding costs. improved to 7.7%, exceeding our outlook. Operational $350 million to shareholders through the repurchase of $310 million in shares and payment of $40 million in excellence initiatives contributed to positive operating leverage and along with lower provision, a significant increase in income from continuing operations. Additional 2025 Highlights Community Investments: Number of Sustainable Plastic Credit Cards Issued: $14M 1.9M Increase in Paperless Billing Rate by: Number of Awards for Positive Workplace and Business Practices: 7% pts 20 While maintaining strong capital levels, we returned dividends. These actions reinforce the momentum of our business and our commitment to return capital to shareholders. We consider a strong balance sheet to be foundational to our strategy and are pleased with the progress we made throughout the year. We will continue to be disciplined and strategic with our deployment of capital as we prioritize investing in the business to drive long-term growth and while returning shareholder value through buybacks and dividend payments. Creating Value Through Sustainable Business Practices As a purpose driven company, responsible growth is central to how we create long term value for our stakeholders. We embed responsible business practices into our operations, decision making, and strategy ensuring our actions align with our values and support sustainable outcomes. Over the past year, we further strengthened this approach by integrating environmental, social, and governance priorities across Strong Balance Sheet and Disciplined Capital Allocation the business, supported by disciplined execution, sound governance, and a clear commitment to ethical decision making. We further strengthened our balance sheet in 2025. Tangible book value per common share increased $11, or 23%, reflecting durable earnings and disciplined Our sustainability strategy reflects this focus and our capital management. We optimized our capital structure, reduced funding costs, and diversified our customer experience, invest in our people, and serve as a trusted partner in the communities we depend on. By funding base. Our customer-first, digitally-enabled approach enhanced our Bread Savings direct-to2 Bread Financial | 2025 Annual Report promise to empower customers by building financial wellbeing and confidence. It guides how we elevate the strengthening our environmental commitments and embedding responsible practices throughout the
Stakeholder Letter organization, we build resilience, manage risk, and our people, ensuring they have the tools, development position the company to deliver enduring value. opportunities, and support needed to grow. To do that, we activated a new operating model for enhanced collaboration and faster delivery of high-quality A key source of pride for both myself and our associates is the commitment to community-oriented values that are deeply ingrained in our culture. Our community strategy focuses on collective impact to drive positive societal outcomes. We bring together people from across the organization to create change through partnership-driven philanthropy, community investments, and associate-led volunteerism. We align our community initiatives with our business strategy to drive change across three purpose-driven priorities: Financial Wellness, Thriving Communities and Protecting Our Planet. Our commitment is reflected in the actions we take and the partnerships we maintain through support of organizations like the Bob Woodruff Foundation, Kids Mental Health Foundation, ROX, and Nationwide Children s Hospital. We amplify our impact through other significant contributions to organizations such as The Nature Conservancy, Canine Companions, and Girls Inc. We are encouraged that our progress continues to be recognized externally, including being named among the World s Best Companies for Sustainable Growth and America s Most Sustainable Companies, as well as one of America s Greatest Workplaces for Culture, Belonging & Community. These recognitions reflect the strength of our strategy and our associates. We will build on this momentum as we advance our ambitions and continue taking deliberate actions that create value for our stakeholders and the communities we serve. Our Associates: Key to our Success Our success begins with the people across our products and trained over 1,000 associates to better understand their roles and new processes. Additionally, we provide our associates with various learning opportunities to help ensure we develop and maintain a pipeline of talent available to promote associates to leadership positions, commensurate with business needs. During 2025 we provided advancement and new career opportunities for over 700 associates in the U.S. and India. We believe that when associates feel supported and empowered, it leads to stronger execution, better customer experiences, and improved business performance. These efforts help foster a culture of accountability, collaboration, and continuous improvement, enabling high-performing teams and strengthening our ability to attract and retain top talent. We are also supported by a strong leadership team that is key to our ability to deliver results and navigate change. The leadership team is focused on setting clear strategic priorities, allocating resources thoughtfully, and maintaining a culture rooted in accountability and performance. We place a strong emphasis on developing talent and building leadership capabilities at every level of the organization, recognizing that long-term success depends on a deep bench. At the same time, we remain closely connected to our frontline teams and customers, allowing us to respond quickly as operating conditions and consumer expectations evolve. This leadership approach supports consistent execution today while positioning the company for success tomorrow. The Year Ahead customers and represent our brand. Their dedication, adaptability, and pride in their work are essential in a Looking ahead to 2026, our 30th year since the company's inception, we are building on the strong foundation established in 2025 as we continue to fast-paced operating execute on our strategic priorities and invest in long- environment. I am proud of how our associates term value creation. Our core business is strong, our team is executing well, and we enter the year with organization who and show up constantly every day evolving to serve continue to lead through change, adapt to new challenges, and deliver for our customers and partners. As we execute our strategy and prepare for continued momentum supported by solid financial performance, industry and technology evolution, we are investing in remain committed to responsible growth, leveraging strong cash flow, and a healthy balance sheet. We Bread Financial | 2025 Annual Report 3
 • shareholder letter icon 4/7/2026 Letter Continued (Full PDF)
 • stockholder letter icon 4/5/2023 BFH Stockholder Letter
 • stockholder letter icon 4/3/2024 BFH Stockholder Letter
 • stockholder letter icon 4/2/2025 BFH Stockholder Letter
 • stockholder letter icon More "Business Services & Equipment" Category Stockholder Letters
 • Benford's Law Stocks icon BFH Benford's Law Stock Score = 98


BFH Shareholder/Stockholder Letter Transcript:


Newsweek   s
Most Responsible
Companies
Newsweek   s
Most Trustworthy
Companies in
America
MAY 2025-MAY 2026
USA
JUN 2025-JUN 2026
INDIA
Great Place to
Work Certified
(both U.S. and India)
Great Place
to Work Best
Workplaces in
Fintech (India)
Benchmark Portal
Center of Excellence
2025 Highlights
Increased Net Income to:
Increased Diluted EPS to:
$521M
$10.96
(87% increase)
(98% increase)
Increased Tangible Book Value
Per Common Share* to:
10 of 10 Largest Programs
Secured into at Least:
$57.57
2028
(23% increase)
Increased Share
Repurchases to:
Increased Common Stock
Dividend by:
$310M
10%
(5.6x increase)
($0.23 per share)
Grew Consumer
Deposits to:
Consumer Deposits
Account for:
$8.5B
48%
of 4Q25 total funding
FORBES
Best Large Employer
* Tangible book value per common share is a non-GAAP financial measure; see the
reconciliation included in this Annual Report.
The figures above are as of, or for the year ended, December 31, 2025 from continuing
operations, and comparative figures are measured against December 31, 2024.

Dear Bread Financial
Stakeholders
Our 2025 financial results reflect disciplined execution,
financial resilience, and meaningful progress across
our strategic priorities to support significant long-term
growth opportunities. Throughout the year, we focused
on growing responsibly, improving our credit
performance metrics, optimizing our capital structure,
expanding direct-to-consumer deposits, and further
enhancing our enterprise risk management framework.
These actions, combined with consistent operating
performance, contributed to credit rating upgrades
and positive outlooks from leading rating agencies.
Just as importantly, we advanced operational
excellence and maintained disciplined expense
management through efficiency initiatives, technology
modernization, automation, and increased enterprisewide implementation of AI, driving operating leverage.
Additionally, we returned capital to shareholders
through share repurchases and an increased dividend,
while strengthening our balance sheet. Entering 2026,
we believe the foundation we have built positions us
well to navigate an evolving economic environment
and create sustainable, long-term value for our
shareholders, partners, and customers.
   Our core business is strong, our
team is executing well, and we
enter
2026
with
momentum
supported
by
solid
financial
performance, strong cash flow,
and a healthy balance sheet.   
Ralph Andretta
President and CEO
2025 Business Drivers
In 2025, consumer financial health remained resilient,
driving a 3.0% year-over-year increase in credit sales
through
higher
transaction
sizes
and
increased
transaction frequency. We strengthened our portfolio of
brand partners by signing and renewing programs
across a diversified range of industry verticals,
including travel and entertainment, technology, and
home. Notable additions include Bed Bath & Beyond,
Raymour & Flanagan, Vivint, and crypto.com. The multiyear extension of our long-standing relationship with
Caesars
Entertainment
marked
an
important
milestone, as all our top 10 programs are now renewed
into at least 2028. Our differentiated platform, which
combines a full product suite, advanced technology,
and loyalty-driven customer engagement, helps us
attract and retain high quality partners.
In parallel, execution and discipline remained central to
our strategy in 2025. We delivered positive operating
leverage while advancing our ongoing technology
transformation, including investments in cloud
migration, automation, and artificial intelligence. These
efforts enhanced scalability, improved the customer
experience, and strengthened our risk management.
Adjusted expenses declined year-over-year as our
operational excellence efforts -- embedded in our
culture

efficiency.
drove
measurable
improvement
in

Stakeholder Letter
Our Financial Performance
We delivered meaningful improvement in profitability
and credit performance in 2025. Revenue increased
modestly, supported by pricing actions and lower
funding costs, partially offset by lower late fees as
consumer deposit offerings, which increased 11% year
over year to $8.5 billion and represented 48% of
average total funding for the fourth quarter of 2025, up
from 43% a year earlier.
We continued to proactively optimize our capital
delinquency trends improved. Net interest margin
structure through targeted debt and preferred equity
expanded to 18.9%. Average loans declined 1% as higher
payment rates and disciplined credit management
actions. We opportunistically repurchased our
outstanding convertible notes and 9.75% senior notes,
pressured balances. Credit performance improved
completed offerings of 8.375% subordinated notes and
throughout the year, resulting in a lower provision for
credit losses and a 70-basis point improvement in our
reserve rate to 11.2%, while our full-year net loss rate
6.75% senior notes, and issued $75 million of 8.625%
preferred stock, lowering our overall funding costs.
improved to 7.7%, exceeding our outlook. Operational
$350 million to shareholders through the repurchase of
$310 million in shares and payment of $40 million in
excellence initiatives contributed to positive operating
leverage and along with lower provision, a significant
increase in income from continuing operations.
Additional 2025 Highlights
Community
Investments:
Number of Sustainable
Plastic Credit Cards Issued:
$14M 1.9M
Increase in Paperless
Billing Rate by:
Number of Awards for
Positive Workplace and
Business Practices:
7% pts 20
While maintaining strong capital levels, we returned
dividends. These actions reinforce the momentum of
our business and our commitment to return capital to
shareholders.
We consider a strong balance sheet to be foundational
to our strategy and are pleased with the progress we
made throughout the year. We will continue to be
disciplined and strategic with our deployment of
capital as we prioritize investing in the business to drive
long-term growth and while returning shareholder
value through buybacks and dividend payments.
Creating Value Through Sustainable
Business Practices
As a purpose  driven company, responsible growth is
central to how we create long  term value for our
stakeholders. We embed responsible business
practices into our operations, decision  making, and
strategy   ensuring our actions align with our values
and support sustainable outcomes. Over the past year,
we further strengthened this approach by integrating
environmental, social, and governance priorities across
Strong Balance Sheet and Disciplined
Capital Allocation
the business, supported by disciplined execution,
sound governance, and a clear commitment to ethical
decision  making.
We further strengthened our balance sheet in 2025.
Tangible book value per common share increased $11,
or 23%, reflecting durable earnings and disciplined
Our sustainability strategy reflects this focus and our
capital management. We optimized our capital
structure, reduced funding costs, and diversified our
customer experience, invest in our people, and serve as
a trusted partner in the communities we depend on. By
funding base. Our customer-first, digitally-enabled
approach enhanced our Bread Savings direct-to2
Bread Financial | 2025 Annual Report
promise to empower customers by building financial
wellbeing and confidence. It guides how we elevate the
strengthening our environmental commitments and
embedding responsible practices throughout the

Stakeholder Letter
organization, we build resilience, manage risk, and
our people, ensuring they have the tools, development
position the company to deliver enduring value.
opportunities, and support needed to grow. To do that,
we activated a new operating model for enhanced
collaboration and faster delivery of high-quality
A key source of pride for both myself and our
associates is the commitment to community-oriented
values that are deeply ingrained in our culture. Our
community strategy focuses on collective impact to
drive positive societal outcomes. We bring together
people from across the organization to create change
through partnership-driven philanthropy, community
investments, and associate-led volunteerism. We align
our community initiatives with our business strategy to
drive change across three purpose-driven priorities:
Financial
Wellness,
Thriving
Communities
and
Protecting Our Planet.
Our commitment is reflected in the actions we take
and the partnerships we maintain through support of
organizations like the Bob Woodruff Foundation, Kids
Mental Health Foundation, ROX, and Nationwide
Children   s Hospital. We amplify our impact through
other significant contributions to organizations such as
The Nature Conservancy, Canine Companions, and
Girls Inc.
We are encouraged that our progress continues to be
recognized externally, including being named among
the World   s Best Companies for Sustainable Growth
and America   s Most Sustainable Companies, as well as
one of America   s Greatest Workplaces for Culture,
Belonging & Community. These recognitions reflect the
strength of our strategy and our associates. We will
build on this momentum as we advance our ambitions
and continue taking deliberate actions that create
value for our stakeholders and the communities we
serve.
Our Associates: Key to our Success
Our success begins with the people across our
products and trained over 1,000 associates to better
understand their roles and new processes. Additionally,
we provide our associates with various learning
opportunities to help ensure we develop and maintain
a pipeline of talent available to promote associates to
leadership positions, commensurate with business
needs. During 2025 we provided advancement and
new career opportunities for over 700 associates in the
U.S. and India. We believe that when associates feel
supported and empowered, it leads to stronger
execution, better customer experiences, and improved
business performance. These efforts help foster a
culture of accountability, collaboration, and continuous
improvement, enabling high-performing teams and
strengthening our ability to attract and retain top
talent.
We are also supported by a strong leadership team
that is key to our ability to deliver results and navigate
change. The leadership team is focused on setting
clear
strategic
priorities,
allocating
resources
thoughtfully, and maintaining a culture rooted in
accountability and performance. We place a strong
emphasis on developing talent and building leadership
capabilities at every level of the organization,
recognizing that long-term success depends on a
deep bench. At the same time, we remain closely
connected to our frontline teams and customers,
allowing us to respond quickly as operating conditions
and consumer expectations evolve. This leadership
approach supports consistent execution today while
positioning the company for success tomorrow.
The Year Ahead
customers and represent our brand. Their dedication,
adaptability, and pride in their work are essential in a
Looking ahead to 2026, our 30th year since the
company's inception, we are building on the strong
foundation established in 2025 as we continue to
fast-paced
operating
execute on our strategic priorities and invest in long-
environment. I am proud of how our associates
term value creation. Our core business is strong, our
team is executing well, and we enter the year with
organization
who
and
show
up
constantly
every
day
evolving
to
serve
continue to lead through change, adapt to new
challenges, and deliver for our customers and partners.
As we execute our strategy and prepare for continued
momentum supported by solid financial performance,
industry and technology evolution, we are investing in
remain committed to responsible growth, leveraging
strong cash flow, and a healthy balance sheet. We
Bread Financial | 2025 Annual Report
3


shareholder letter icon 4/7/2026 Letter Continued (Full PDF)
 

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