[{"_1":2,"_3":-5,"_4":-5},"loaderData",{"_5":6,"_7":8},"actionData","errors","root",{"_99":100},"en-item",{"_9":10,"_10":11},"kind","item",{"_12":13,"_14":15,"_16":17,"_18":19,"_20":21,"_22":23,"_24":25,"_26":27,"_28":29,"_30":31,"_32":31,"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":-5,"_48":49,"_50":-5,"_51":-5,"_52":53,"_54":55,"_56":57,"_58":42,"_59":42,"_60":61,"_62":42,"_63":64},"id","gfbw0m0v26fj5dnt4uy82e0lj","revision",3,"title","Bread Financial提交截至2026年9月30日季度的10-Q：第三季度净利润1.56亿美元，修订全年展望","originalTitle","10-Q - BREAD FINANCIAL HOLDINGS, INC. (0001101215) (Filer)","summary","Bread Financial披露，2026年第三季度持续经营收入为2.09亿美元，净利润1.56亿美元，稀释后每股收益3.82美元；上年同期分别为1.96亿美元、1.88亿美元和3.96美元。","reason","材料涵盖公司季度业绩、信贷表现、资本与流动性状况及全年展望，可用于了解其经营变化和风险披露。","source",{"_12":90,"_91":92,"_9":93,"_94":42,"_95":96,"_97":98},"links",{"_87":88,"_78":89},"publishedAt","2026-10-26T21:48:26.000Z","discoveredAt","2026-10-27T10:02:15.524Z","timelineAt","category","ai-products","tags",[84,85,86],"stockSymbols",[83],"score",65,"selected",true,"channel","news","story",{"_73":74,"_16":75},"x","readingMode","full","author","language","body",{"_64":77,"_78":-5,"_79":80,"_81":82},"outline",[],"relatedStories",[76],"indexable","markdownAvailable","group",{"_65":66,"_45":67,"_68":69,"_70":71,"_72":69},"hasTranslation","bodyLanguage","zh","factId","fS8wOx6k-9CA",{"_73":74,"_16":75},"reportCount",1,"additionalSourceCount",0,"developmentCount","publicId","b3c2aa53-2fe8-4ba4-9e0e-dc14297ba4d2","Bread Financial公布三季度业绩并修订全年展望",{"_73":74,"_16":75},"

美国

证券交易委员会

华盛顿特区 20549

10-Q 表

（勾选一项）

x 根据《1934 年证券交易法》第 13 或 15(d) 条提交的季度报告

截至 2026 年 9 月 30 日的季度

或

o 根据《1934 年证券交易法》第 13 或 15(d) 条提交的过渡报告

委员会档案编号 001-15749

_______________________________________

BREAD FINANCIAL HOLDINGS, INC.

（注册人章程中规定的确切名称）

$\"2026-04-10_15-08-46.jpg\"$


特拉华州	31-1429215
（注册成立或组织所在州或其他司法管辖区）	（美国国税局雇主识别号）

3095 Loyalty Circle
俄亥俄州哥伦布市	43219
（主要行政办公室地址）	（邮政编码）

(614) 729-4000

（注册人电话号码，包括区号）

_______________________________________

根据该法第 12(b) 条注册的证券：

各类别名称

交易代码

注册所在交易所名称

普通股，每股面值 $0.01

BFH

NYSE

存托股份，每股代表 1/40 份 8.625% A 系列非累积永久优先股权益

BFH PrA

NYSE

存托股份，每股代表 1/40 份 8.875% B 系列固定利率重置非累积永久优先股权益

BFH PrB

NYSE

请勾选以表明注册人 (1) 是否已在此前 12 个月内（或注册人须提交此类报告的较短期间内）提交《1934 年证券交易法》第 13 或 15(d) 条要求提交的所有报告，以及 (2) 在过去 90 天内是否一直受此类申报要求约束。是 x 否 o

请勾选以表明注册人是否已在此前 12 个月内（或注册人须提交此类文件的较短期间内）以电子方式提交根据 S-T 条例第 405 条（本章 §232.405）要求提交的每个交互式数据文件。是 x 否 o

请勾选以表明注册人是大型加速申报公司、加速申报公司、非加速申报公司、较小申报公司还是新兴成长型公司。参见《交易法》规则 12b-2 中“大型加速申报公司”“加速申报公司”“较小申报公司”和“新兴成长型公司”的定义。

大型加速申报公司 x 加速申报公司 o 非加速申报公司 o 较小申报公司 o 新兴成长型公司 o

如果是新兴成长型公司，请勾选注册人是否选择不使用《交易法》第 13(a) 条规定的延长过渡期，以遵守任何新的或修订后的财务会计准则。 o

请勾选以说明注册人是否为空壳公司（定义见《法案》Rule 12b-2）。是 o 否 x

截至2026年10月 21日，普通股流通股数为37,961,242股。

BREAD FINANCIAL HOLDINGS, INC.


		页码
	第一部分：财务信息
第1项。	财务报表（未经审计）
	截至2026年和2025年9月30日止三个月和九个月的合并收益表	27
	截至2026年和2025年9月30日止三个月和九个月的合并综合收益表	28
	截至2026年9月30日和2025年12月31日的合并资产负债表	29
	截至2026年和2025年9月30日止三个月和九个月的合并股东权益变动表	30
	截至2026年和2025年9月30日止九个月的合并现金流量表	32
	附注：合并财务报表	33
第2项。	管理层对财务状况和经营业绩的讨论与分析（MD&A）	1
第3项。	有关市场风险的定量和定性披露	57
第4项。	控制与程序	57

	第二部分：其他信息
第1项。	法律诉讼	58
第1A项。	风险因素	58
第2项。	未注册的股权证券销售及所得款项用途	58
第3项。	优先证券违约	58
第4项。	矿山安全披露	58
第5项。	其他信息	58
第6项。	附件	60
签名	62

第一部分：财务信息

第2项。管理层对财务状况和经营业绩的讨论与分析（MD&A）。

以下关于我们经营业绩和财务状况的讨论与分析，应与本季度报告其他部分所载未经审计的合并财务报表及相关附注，以及我们截至2025年12月31日止年度的10-K表年度报告（以下简称“2025年10-K表”）中所载经审计的合并财务报表及相关附注一并阅读。该年度报告已于2026年2月13日提交给美国证券交易委员会（SEC）。本讨论与分析中的部分信息构成前瞻性陈述，涉及风险和不确定性。实际结果可能与这些前瞻性陈述所述内容存在重大差异。请参阅本报告其他部分所载的“有关前瞻性陈述的警示说明”。可能导致或促成这些差异的因素包括但不限于下文讨论的因素，以及我们向SEC提交的其他文件中指出的因素，包括2025年10-K表以及本季度报告和其他10-Q表季度报告中的“风险因素”和“管理层对财务状况和经营业绩的讨论与分析”部分。

概述

我们是一家以科技为先导的金融服务公司，为数百万美国消费者提供简单、个性化的支付、借贷和储蓄解决方案。我们的支付解决方案通过联名信用卡、零售商自有品牌信用卡以及分期付款产品，为旅游和娱乐、专业服饰、健康与美容、珠宝、体育用品、科技和电子产品以及家居和家具领域的一些知名品牌带来增长，并为我们共同服务的客户提供选择和价值。此外，我们还提供 Bread Financial 通用信用卡和储蓄产品，助力客户追求热爱的事物，享受更美好的生活。

我们持续通过与品牌合作伙伴拓展联名信用卡项目，实现产品组合多元化。与零售商自有品牌信用卡项目相比，联名信用卡项目的每账户信用卡销售额更高，信用风险组合更优，通常带来更多全额还款客户的余额、更低的逾期率和滞纳金，以及更低的损失。我们还提供自有品牌信用卡，并不断拓展 Bread Pay 产品系列，包括分期贷款和“分拆付款”服务。

我们的合作伙伴群体包括大型消费类企业，其中包括一些知名品牌（按字母顺序排列）：AAA、Academy Sports + Outdoors、Caesars、Dell Technologies、Hard Rock International、NFL、Raymour & Flanigan、Saks Fifth Avenue、Signet、Ulta 和 Victoria’s Secret，以及中小型企业（SMB）。我们的合作伙伴群体覆盖广泛的行业和零售垂直领域，分布均衡，包括旅游和娱乐、特色服饰、健康与美容、珠宝、体育用品、技术与电子产品，以及家居和家具。我们相信，全面的支付、贷款和储蓄解决方案，以及相关的营销、数据和分析服务，为我们带来了显著的竞争优势，产品适用于所有客户群体（Z 世代、千禧一代、X 世代和婴儿潮一代）。我们产品和服务的广度与质量，加上以客户为中心的方式，使我们能够建立并维持长期的合作伙伴关系。我们通过单一可报告分部开展业务，主要收入来源是各类信用卡及其他贷款产品产生的贷款利息和费用，其次是与品牌合作伙伴的合同关系。

在本报告中，除非另有说明或上下文另有所指，“Bread Financial”“BFH”“本公司”“我们”或“我们的”均指合并口径下的 Bread Financial Holdings, Inc. 及其子公司。提及“母公司”时，指单独口径下的 Bread Financial Holdings, Inc.。此外，本报告中，我们可能将与我们开展业务的零售商及其他公司称为“合作伙伴”“品牌合作伙伴”或“客户”；但使用“合作伙伴”“合作”或任何类似术语，并不表示或暗示存在正式的法律合伙关系，也不以任何方式改变 Bread Financial 与任何第三方之间关系的条款。我们通过受保存款机构子公司 Comenity Bank 和 Comenity Capital Bank 提供信贷产品，两者在本文中合称为“银行”。

非 GAAP 财务指标

我们根据美国公认会计原则（GAAP）编制合并财务报表。不过，本报告中的某些信息属于非 GAAP 财务

指标。我们对非 GAAP 财务指标的计算方式可能与其他公司对名称相似指标的计算方式不同。具体而言：

•我们此前回购过债务，并且未来可能不时继续回购债务，包括任何尚未偿还的优先无担保票据、次级票据或可转换票据。在此类交易中，我们可能支付溢价以促成回购，或在某些情况下折价回购；从 GAAP 角度看，这会影响总非利息支出，并相应影响普通股股东可获得的净收益，进而影响摊薄后每股普通股收益。对于此前的债务回购，我们对这三个财务报表项目列示调整，以剔除债务回购的影响。我们使用调整后总非利息支出、调整后普通股股东可获得的净收益和调整后摊薄后每股普通股收益来评估公司的持续经营情况，剔除债务回购影响可能带来的波动。

•税前拨备前收益（PPNR）指持续经营所得在扣除所得税和信用损失拨备前的金额。剔除债务回购影响后的 PPNR则从 PPNR 中剔除当期任何债务回购产生的损失或收益。我们将PPNR和剔除债务回购影响后的 PPNR作为指标，用于评估所得税前的经营业绩，剔除信用损失拨备的变动以及债务回购影响的一次性特征。

•平均有形普通股权益回报率（ROTCE）指持续经营所得减去优先股股东股息后的年化金额，除以平均有形普通股权益。有形普通股权益（TCE）指总股东权益扣除优先股、商誉和无形资产净额后的金额。我们使用ROTCE作为指标来评估公司的业绩。

•每股普通股有形账面价值指 TCE 除以已发行普通股数量。我们将每股普通股有形账面价值这一行业通用指标与 ROTCE 一并用于评估资本和业绩。

我们认为，使用这些非 GAAP 财务指标有助于更清晰地理解我们的经营业绩和趋势。有关这些非 GAAP 财务指标与最直接可比的 GAAP 指标之间的调节，请参阅表 6：GAAP 与非 GAAP 财务指标调节表。

业务环境

本“业务环境”部分概述了我们2026年第三季度的经营业绩和财务状况，以及我们对2026年剩余时间的相关展望和实现该展望所涉及的若干不确定性。本部分应与本10-Q表格中包含或以引用方式纳入的其他信息一并阅读，包括本文中的“合并经营业绩”“关于前瞻性陈述的警示说明”和“风险因素”，以及我们2025年10-K表格和其他10-Q季度报告；这些文件进一步讨论了比较期间经营业绩差异的原因，以及可能影响未来业绩和公司实现展望的其他因素。除非另有说明，本文讨论的期间为截至2026年9月30日的三个月，并与上年同期进行比较。

信贷销售额为$7.4 billion，同比增长9%，主要得益于新老品牌合作伙伴均实现增长，以及一般用途消费增加。信用卡及其他贷款的平均余额和期末余额分别增长6%至$18.6 billion、增长7%至$18.9 billion，主要得益于新合作关系的拓展、信贷销售额增加以及信贷总损失减少。总利息收入较2025年第三季度增长4%，主要由于信用卡及其他贷款平均余额上升、定价措施（例如提高年利率）的持续影响，以及信贷总损失减少所致的融资费用和滞纳金冲销减少。这些因素部分被平均Prime利率下降（该利率影响浮动利率信用卡及其他贷款）以及账单滞纳金减少所抵消。我们整个贷款组合的逾期趋势改善，加上产品结构逐步转变、私人品牌账户占比下降（此类账户的账单滞纳金往往较高），使整体账单滞纳金减少。净利差同比从18.81%升至18.89%，原因是定价措施持续使贷款收益率受益，资金成本也继续改善。我们预计，随着信用卡贷款组合中的大多数贷款已完成重新定价，定价措施带来的同比收益将继续减弱。净利差预计还将受到付款和逾期率趋势持续逐步改善，以及产品和风险结构持续变化的影响。非利息收入较2025年第三季度减少$17 million，原因是信贷销售额增加、贷款收益率改善和信贷总损失减少，导致品牌合作伙伴零售商分成安排的相关成本上升；这一影响部分被新品牌合作伙伴业务规模扩大带来的交换费收入增加，以及新注册渠道带来的支付保障产品收入增加所抵消，

商户折扣费，以及新注册渠道带来的支付保障产品收入增加。总体而言，本季度净利息及非利息收入总额为$1.0 billion，较2025年第三季度增长5%。

截至2026年9月30日的三个月，信用损失准备金增加，原因是计提了21 million美元的准备金，且净本金损失为300 million美元；而上年同期释放了28 million美元的准备金，净本金损失为327 million美元。

截至2026年9月30日，我们的信用损失准备金较2025年12月31日略有下降，这是由于信用卡及其他贷款余额的信用质量有所改善。截至2026年9月30日和2025年9月30日，我们的准备金率分别为11.12%和11.72%，反映了信用指标改善以及新增账户质量更高。我们继续在信用准备金模型中审慎设置经济情景权重，以确保信用损失准备金充足，能够应对各种可能的宏观经济结果；其中包括贸易政策和全球冲突持续带来的不确定性，以及对通胀和失业率的后续影响。从整体信用质量来看，Vantage 评分高于650的客户占比仍高于疫情前水平，这得益于审慎的信用管理和更加多元化的产品组合，尤其是联名卡在我们投资组合中的占比提高。

非利息支出总额为487 million美元，同比增长 11 million美元，主要是由于软件投资增加以及技术相关服务合同成本上升，信息处理和通信支出增加了13 million美元；员工薪酬和福利支出因工资上涨而增加了6 million美元，但部分被折旧和摊销支出的下降所抵消，后者是由于资本化软件和收购软件的摊销减少。

所得税准备金同比增加45 million美元，原因是上年同期确认了一项一次性税收优惠。

2026年第三季度，我们继续努力加强并优化合并资产负债表。截至2026年9月30日，消费者存款增长21%，达到9.9 billion美元；消费者存款平均占总资金来源的53%，高于一年前的47%。我们于10月1日成功完成银行合并，这使我们更有利于逐步增加消费者存款这一核心资金来源，并通过规模更大、结构更精简的银行架构，提升资产负债表和资金安排的灵活性。本季度，我们通过回购股票向股东回馈价值，回购了0.7 million股普通股，金额为75 million美元；截至2026年9月30日，剩余股票回购授权额度为374 million美元。我们还使用手头现金回购了24 million美元的2035年到期、利率为8.375%的固定利率重置次级票据；截至2026年9月30日，剩余未偿本金为326 million美元。我们的普通股一级资本比率（CET1）为13.1%，低于2025年第三季度的14.0%；期间净收益的影响被普通股回购、股息支付、风险加权资产增长以及债务回购的影响所抵消，且后者影响更大。

我们修订后的2026年财务展望基于年初至今的强劲业绩，反映出消费者持续展现韧性、通胀仍高于联邦储备委员会（FRB）2%的目标利率，以及劳动力市场总体稳定。

基于我们当前的经济展望、对新业务管线和合作伙伴增长的了解，以及净本金损失率预计将持续改善和我们对持卡人付款率将保持强劲的预期，我们现在预计2026年平均信用卡及其他贷款较2025全年增长约4%。总净利息及非利息收入预计较2025全年增长约5%，主要由平均信用卡及其他贷款增长带动。由于融资成本改善，我们预计全年净利差将略高于2025年。我们持续专注于拓展和丰富产品组合，包括探索如何利用我们的贷款发放和服务相关能力。

我们根据收入创造情况和对业务的持续投资来管理费用增长。因此，我们预计2026年将实现正向经营杠杆（不包括债务回购的税前影响；这是一项非GAAP财务指标）。我们将继续投资于AI能力、技术现代化、营销和产品创新，以推动增长并提升效率。

鉴于信贷指标持续改善，我们的2026年财务展望现假设全年净本金损失率低于7%。这一更新后的指引考虑了我们对当前逾期贷款管线的了解，以及

具有韧性的消费者、稳定的宏观经济状况、我们审慎的信贷管理，以及风险和产品组合的持续变化。

在2026年财务展望中，我们预计全年标准化有效税率将在25%至27%之间，且因某些离散项目的时间安排而出现季度环比波动。

总体而言，我们第三季度的业绩进一步印证了盈利模式的质量和持久性，以及我们恪守的财务纪律。我们对执行战略、实现有吸引力的回报并为股东创造长期价值的能力仍充满信心。

注：对于上述非GAAP财务指标，我们无法提供前瞻性2026年财务展望与其最直接可比的前瞻性GAAP指标之间的定量调节，因为若不付出不合理努力，我们无法可靠地预测该前瞻性GAAP指标的所有必要组成部分。

合并经营业绩

以下讨论说明了随附表格所列截至2026年9月30日的三个月和九个月经营业绩与上年同期相比的差异。请结合上文“业务环境”部分的讨论阅读本讨论。

表1：财务业绩摘要


	截至9月30日的三个月，		截至9月30日的九个月，
	2026		2025		变动额		变动百分比	2026		2025		变动额	变动百分比
（百万美元，每股金额和百分比除外）
净利息及非利息收入总额	$	1,017			$	971		46			5		$	3,027		$	2,870			157	5
信用损失准备金	321			299			22		7			937		869		68			8
非利息支出总额	487			476			11		2			1,442		1,433		9			1
持续经营业务税前收入	209			196			13		6			648		568		80			14
所得税准备金	53			8			45		539			165		100		65			66
持续经营业务收入	156			188			(32)		(17)			483		468		15			3
终止经营业务亏损，扣除所得税后 (1)	—			—			—		—			—		(4)		4			(100)
净收入	156			188			(32)		(17)			483		464		19			4
向优先股股东宣派的股息	(6)			—			(6)		nm		(10)		—		(10)			nm
普通股股东可获得的净收入	$	150			$	188		(38)			(20)		$	473		$	464			9	2
普通股股东可获得的调整后净收入 *(2)	$	151			$	191		(40)			(21)		$	475		$	479			(4)	(1)

稀释后普通股每股收益	$	3.82			$	3.96		(0.14)			(4)		$	11.54		$	9.65			1.89	20
调整后稀释后普通股每股收益 *(2)	$	3.84			$	4.02		(0.18)			(4)		$	11.60		$	9.96			1.64	16


净利息收益率 (3)	18.89	%		18.81	%			0.08			18.87	%	18.19	%			0.7
平均股本回报率 (4)	17.7	%		22.4	%			(4.7)			18.6	%	19.2	%			(0.6)
平均有形普通股权益回报率 *(5)	23.6	%		28.6	%			(5.0)			24.3	%	24.8	%			(0.5)
持续经营业务有效所得税率	25.5	%		4.3	%			21.2			25.5	%	17.5	%			8.0

______________________________

*代表一项非 GAAP 财务指标。请参阅“非 GAAP 财务指标”以及表 6：GAAP 与非 GAAP 财务指标的调节。

(1)包括与此前披露的终止经营业务相关的金额，该业务涉及我们于 2021 年分拆前忠诚度业务板块 LoyaltyOne，以及于 2019 年出售前 Epsilon 业务板块。更多信息请参阅未经审计合并财务报表附注 1“业务说明、列报基础及重要会计政策”。

(2)针对债务回购的影响，对普通股股东可获得的净收入和稀释后普通股每股收益进行了调整。

(3)净利息收益率指年化净利息收入除以平均计息资产总额。另请参阅表 5：净利息收益率。

(4)平均股本回报率指年化持续经营业务收入除以平均股东权益总额。

(5)平均有形普通股权益回报率（ROTCE）指年化持续经营业务收入减去优先股股息后，除以平均有形普通股权益。有形普通股权益（TCE）指股东权益总额扣除优先股以及商誉和无形资产净额。

(nm) 无意义，表示变动幅度达到或超过 1,000%。

表 2：信用损失准备金扣除后的净利息及非利息收入总额摘要


	截至 9 月 30 日的三个月		截至 9 月 30 日的九个月
	2026		2025		变动额		变动百分比	2026		2025		变动额	变动百分比
（百万，百分比除外）
利息收入
贷款利息和费用	$	1,254			$	1,198		56			5		$	3,673	$	3,531		142	4
现金及投资证券利息	40			44			(4)		(10)			114		135	(21)		(15)
利息收入总额	1,294			1,242			52		4			3,787		3,666	121		3
利息支出
存款利息	148			139			9		6			420		417	3		1
借款利息	51			71			(20)		(29)			166		238	(72)		(30)
利息支出总额	199			210			(11)		(6)			586		655	(69)		(10)
净利息收入	1,095			1,032			63		6			3,201		3,011	190		6
非利息收入
扣除零售商分成安排后的交换费收入	(144)			(111)			(33)		30			(361)		(289)	(72)		25
其他	66			50			16		33			187		148	39		27
非利息收入总额	(78)			(61)			(17)		27			(174)		(141)	(33)		23
净利息及非利息收入总额	1,017			971			46		5			3,027		2,870	157		5
信用损失准备金	321			299			22		7			937		869	68		8
信贷损失准备后的利息及非利息收入总额	$	696			$	672		24			4		$	2,090	$	2,001		89	4

信贷损失准备后的利息及非利息收入总额

利息收入：截至2026年9月30日的三个月和九个月，利息收入总额均有所增加，原因如下：

•贷款利息及费用有所增加，原因是信用卡及其他贷款平均余额上升、定价调整持续生效，以及因总信贷损失降低而导致的融资费用和滞纳金冲回减少。这些因素部分被平均最优惠利率下降（影响浮动利率信用卡及其他贷款）以及账单滞纳金减少所抵消。综合而言，这些因素使截至2026年9月30日的九个月融资费用和滞纳金收益率提高约25个基点。截至2026年9月30日的三个月，融资费用和滞纳金收益率下降约25个基点，原因是本年度期间账单滞纳金减少，且信用卡及其他贷款平均余额上升。拖欠率降低以及产品组合逐步转向自有品牌账户占比较低的结构（此类账户的账单滞纳金通常较高），使账单滞纳金总额下降。

•现金及投资证券利息有所下降，原因是平均利率降低，导致在相应比较期间利息收入分别减少$7 million和$21 million；三个月期间平均余额上升，利息收入增加$3 million，部分抵消了这一影响。

利息支出：截至2026年9月30日的三个月和九个月，利息支出总额均有所下降，原因如下：

•存款利息有所增加，原因是消费者存款平均余额上升，在相应比较期间分别使资金成本增加$18 million和$39 million；平均利率下降则部分抵消了这一影响，在相同期间分别使利息支出减少$9 million和$36 million。

•借款利息有所下降，原因是平均借款额减少，在相应比较期间使资金成本减少$13 million和$51 million；平均利率下降则在相同期间进一步使资金成本分别减少$7 million和$21 million。

非利息收入：截至2026年9月30日的三个月和九个月，非利息收入总额均有所下降，原因如下：

•扣除零售商分成安排后的交换收入（通常对我们而言属于抵减收入项目）有所增加，原因是品牌合作伙伴零售商分成安排相关成本上升；比较期间新品牌合作伙伴业务规模扩大带来的交换费和商户折扣费增加，部分抵消了这一影响。

•其他有所增加，主要由于新增登记渠道带动支付保障产品收入增加。

信贷损失准备在截至2026年9月30日的三个月和九个月期间均有所增加。三个月期间的增加主要由2,100万美元的准备金增加和3亿美元的净本金损失所致；上年同期则为2,800万美元的准备金转回和3.27亿美元的净本金损失。九个月期间的增加主要由1,000万美元的准备金转回和9.47亿美元的净本金损失所致；上年同期则为1.71亿美元的准备金转回和10.4亿美元的净本金损失。截至2026年和2025年9月30日，我们的准备金率分别为11.12%和11.72%，反映出信贷指标改善以及新增账户质量提高。我们继续在信贷准备金模型中对经济情景采用适当审慎的权重，以确保信贷损失准备充足，应对各种可能的宏观经济结果，包括贸易政策和全球冲突仍存在的不确定性，以及其对通胀和失业率的下游影响。

表3：非利息支出总额摘要


	截至9月30日的三个月		截至9月30日的九个月
	2026		2025		变动金额		变动百分比	2026		2025		变动金额	变动百分比
（百万美元，百分比除外）
非利息支出
员工薪酬和福利	$	228			$	222		6			3		$	673	$	648		25	4
卡片和处理费用	79			81			(2)		(3)			240		244	(4)		(2)
信息处理和通信	85			72			13		19			242		230	12		5
营销费用	35			38			(3)		(6)			106		106	—		1
折旧和摊销	17			20			(3)		(13)			55		61	(6)		(11)
其他	43			43			—		(2)			126		144	(18)		(12)
非利息支出总额	$	487			$	476		11			2		$	1,442	$	1,433		9	1

调整后非利息支出总额 (1)	$	486			$	473		13			3		$	1,439	$	1,414		25	2

__________________________________

(1)对非利息支出总额进行调整，以剔除债务回购的影响：截至2026年和2025年9月30日的三个月分别为100万美元和300万美元；截至2026年和2025年9月30日的九个月分别为300万美元和1,900万美元。因此，该指标属于非公认会计准则财务指标。参见“非公认会计准则财务指标”及表6：公认会计准则与非公认会计准则财务指标的调节。

非利息支出总额

非利息支出：截至2026年9月30日的三个月和九个月期间，非利息支出总额均有所增加。调整后非利息支出总额（该非公认会计准则财务指标已剔除债务回购的影响）在上述比较期间也有所增加。

•员工薪酬和福利增加，主要是由于年度绩效加薪和激励薪酬导致工资支出上升；九个月期间还受到医疗理赔增加的影响，部分被卓越运营举措所抵消。

•信息处理和通信增加，主要是由于新增软件投资以及与技术相关的服务合同成本上升。

•折旧和摊销减少，主要是由于资本化和收购软件相关的摊销降低。

•其他在三个月期间基本持平，在九个月期间有所下降，主要是由于我们回购债务产生的同比净影响。

所得税

截至2026年9月30日的三个月和九个月，所得税拨备均有所增加。截至2026年和2025年9月30日止三个月的有效税率分别为25.5%和4.3%；截至2026年和2025年9月30日止九个月的有效税率分别为25.5%和17.5%。比较期间所得税拨备和有效税率均有所上升，主要归因于上年确认的一项一次性税收优惠。

已终止经营业务

已终止经营业务亏损（扣除所得税后）包括与此前披露的已终止经营业务相关的金额：该业务涉及我们于2021年剥离前 LoyaltyOne 业务部门，以及于2019年出售前 Epsilon 业务部门；相关金额主要涉及合同赔偿和税务事项。更多信息请参阅我们截至2021年12月31日止年度的 Form 10-K 年度报告所载合并财务报表附注22“已终止经营业务和银行控股公司财务列报”。

表4：持续经营业务财务摘要


	截至9月30日止三个月或截至该日		截至9月30日止九个月或截至该日
	2026		2025		变动百分比	2026		2025		变动百分比
（百万美元，每股金额和百分比除外）
信贷销售额	$	7,424		$	6,787	9			$	21,471		$	19,707	9
税前、拨备前净收入 *(1)	530		495		7		1,585		1,437		10
剔除债务回购影响后的税前、拨备前净收入 *(1)	531		498		7		1,588		1,456		9
信用卡及其他贷款平均余额	18,591		17,596		6		18,358		17,813		3
期末信用卡及其他贷款	18,850		17,655		7		18,850		17,655		7
期末消费者存款	$	9,900		$	8,188	21			9,900		8,188		21

有效税率	25.5	%		4.3	%	21.2			25.5	%		17.5	%	8.0

平均资产回报率 (2)	2.7	%		3.4	%	(0.7)			2.9	%		2.8	%	0.1
平均权益回报率 (3)	17.7	%		22.4	%	(4.7)			18.6	%		19.2	%	(0.6)
平均有形普通股权益回报率 *(4)	23.6	%		28.6	%	(5.0)			24.3	%		24.8	%	(0.5)

净利差 (5)	18.89	%		18.81	%	0.08			18.87	%		18.19	%	0.68
贷款收益率 (6)	26.76	%		27.01	%	(0.25)			26.75	%		26.51	%	0.24

效率比率 (7)	47.9	%		49.0	%	(1.1)			47.6	%		49.9	%	(2.3)
调整后效率比率 (7)	47.8	%		48.7	%	(0.9)			47.5	%		49.3	%	(1.8)


普通股一级资本比率 (8)	13.1	%		14.0	%	(0.9)			13.1	%		14.0	%	(0.9)



每股普通股账面价值 (9)	$	85.23		$	72.08	18			$	85.23		$	72.08	18
每股普通股有形账面价值 *(10)	$	66.95		$	56.36	19			$	66.95		$	56.36	19

每股普通股现金股息	$	0.23		$	0.21	10			$	0.69		$	0.63	10

还款率 (11)	14.7	%		14.9	%	(0.2)			15.0	%		14.9	%	0.1

逾期率 (12)	5.57	%		6.04	%	(0.47)			5.57	%		6.04	%	(0.47)
本金净损失率 (13)	6.40	%		7.39	%	(0.99)			6.90	%		7.81	%	(0.91)
准备金率 (14)	11.12	%		11.72	%	(0.60)			11.12	%		11.72	%	(0.60)

__________________________________

*表示一项非公认会计原则财务指标。请参阅“非公认会计原则财务指标”和表6：公认会计原则财务指标与非公认会计原则财务指标的调节。

(1)税前、拨备前净收入指持续经营业务所得税前收入与信贷损失拨备之和。剔除债务回购影响后的税前、拨备前净收入，是指从该指标中剔除本期债务回购的影响。

(2)平均资产回报率指年化持续经营业务收入除以平均总资产。

(3)平均股本回报率表示持续经营收入年化后除以平均股东权益总额。

(4)平均有形普通股权益回报率（ROTCE）表示持续经营收入年化后减去优先股股东股息，再除以平均有形普通股权益。有形普通股权益（TCE）表示股东权益总额扣除优先股以及商誉和无形资产净额后的金额。

(5)净息差表示净利息收入年化后除以平均生息资产总额。另请参见表5：净息差。

(6)贷款收益率表示贷款利息和费用年化后除以信用卡及其他贷款平均余额。

(7)效率比率表示非利息支出总额除以净利息及非利息收入总额。调整后效率比率不包括本期债务回购的影响。

(8)普通股一级资本比率表示一级资本扣除优先股后除以风险加权资产总额。在计算一级资本时，我们遵循巴塞尔III标准法，因此股东权益总额已扣除商誉和无形资产净额。更多信息请参见本报告其他部分所载“立法、监管事项与资本充足性”。

(9)每股普通股账面价值表示股东权益总额减去优先股后除以发行在外普通股股数。

(10)每股普通股有形账面价值表示TCE除以发行在外普通股股数。

(11)还款率表示本期消费者还款额除以本期月初信用卡及其他贷款余额总额；适用期间包括持有待售贷款。

(12)逾期率表示期末合同逾期未还的余额（即逾期30天或以上的本金余额）除以同一期末信用卡及其他贷款未偿本金总额。

(13)本金净损失率为年化比率，表示本期本金净损失除以同期信用卡及其他贷款平均余额，采用日均余额计算方法。

(14)准备金率表示信贷损失准备金除以期末信用卡及其他贷款余额。

(nm) 无意义，表示差异达到或超过1,000%。

表5：净息差


	截至2026年9月30日的三个月		截至2025年9月30日的三个月
	平均余额		利息收入/支出		平均收益率/利率		平均余额		利息收入/支出		平均收益率/利率
（百万美元，百分比除外）
现金及投资证券	$	4,412			$	40			3.55	%		$	4,173	$	44	4.18	%
信用卡及其他贷款	18,591			1,254			26.76	%		17,596			1,198	27.01	%
生息资产总额	23,003			1,294			22.31	%		21,769			1,242	22.64	%

消费者存款	9,633			96			3.94	%		8,139			86	4.23	%
批发存款	5,487			52			3.79	%		5,296			53	3.94	%
计息存款	15,120			148			3.89	%		13,435			139	4.11	%

有担保借款	2,387			34			5.50	%		2,872			43	5.88	%
无担保借款	836			17			8.18	%		1,129			28	9.92	%
计息借款	3,223			51			6.20	%		4,001			71	7.02	%
计息负债总额	$	18,343			$	199			4.29	%		$	17,436	$	210	4.78	%

净利息收入			$	1,095							$	1,032

净息差 (1)			18.89	%						18.81	%


	截至2026年9月30日的九个月		截至2025年9月30日的九个月
	平均余额		利息收入 / 支出		平均收益率 / 利率		平均余额		利息收入 / 支出		平均收益率 / 利率
（百万，百分比除外）
现金及投资证券	$	4,316			$	114			3.53	%		$	4,322	$	135	4.17	%
信用卡及其他贷款	18,358			3,673			26.75	%		17,813			3,531	26.50	%
计息资产总额	22,674			3,787			22.33	%		22,135			3,666	22.14	%

消费者存款	9,070			269			3.96	%		7,994			262	4.38	%
批发存款	5,397			151			3.75	%		5,228			155	3.96	%
计息存款	14,467			420			3.88	%		13,222			417	4.21	%

有担保借款	2,803			113			5.42	%		3,481			152	5.84	%
无担保借款	852			53			8.27	%		1,159			86	9.92	%
计息借款	3,655			166			6.09	%		4,640			238	6.86	%
计息负债总额	$	18,122			$	586			4.33	%		$	17,862	$	655	4.90	%

净利息收入			$	3,201							$	3,011

净息差 (1)			18.87	%						18.19	%

______________________________

(1)净息差指年化净利息收入除以平均计息资产总额。

表6：GAAP与非GAAP财务指标的调节


	截至9月30日止三个月		截至9月30日止九个月
	2026		2025		变化百分比		2026	2025		变化百分比
（百万，百分比除外）
归属于普通股股东的调整后净利润
归属于普通股股东的净利润	$	150			$	188		(20)			$	473		$	464	2
债务回购的影响	1			3			(65)		2			15		(84)
归属于普通股股东的调整后净利润	$	151			$	191		(21)			$	475		$	479	(1)

调整后摊薄后普通股每股收益
摊薄后普通股每股收益	$	3.82			$	3.96		(4)			$	11.54		$	9.65	20
债务回购的影响	0.02			0.06			(57)		0.06			0.31		(81)
调整后摊薄后普通股每股收益	$	3.84			$	4.02		(4)			$	11.60		$	9.96	16






调整后非利息支出总额
非利息支出总额	$	487			$	476		2			$	1,442		$	1,433	1
债务回购的影响	1			3			(60)		3			19		(82)
调整后非利息支出总额	$	486			$	473		3			$	1,439		$	1,414	2

税前拨备前利润（PPNR）
持续经营业务税前利润	$	209			$	196		6			$	648		$	568	14
信贷损失准备金	321			299			7		937			869		8
税前拨备前利润（PPNR）	530			495			7		1,585			1,437		10
债务回购的影响	1			3			(60)		3			19		(82)
剔除债务回购影响后的PPNR	$	531			$	498		7			$	1,588		$	1,456	9

平均有形普通股权益
平均股东权益总额	$	3,497			$	3,335		5			$	3,464		$	3,255	6
减：平均优先股	(201)			—			无意义	(139)			—		无意义
减：平均商誉及无形资产净额	(699)			(728)			(4)		(707)			(736)		(4)
平均有形普通股权益	$	2,597			$	2,607		—			$	2,618		$	2,519	4

有形普通股权益（TCE）
股东权益总额	$	3,437			$	3,317		4			$	3,437		$	3,317	4
减：优先股	(201)			—			无意义	(201)			—		无意义
减：商誉及无形资产净额	(694)			(723)			(4)		(694)			(723)		(4)
有形普通股权益（TCE）	$	2,542			$	2,594		(2)			$	2,542		$	2,594	(2)

______________________________

(nm) 无意义，表示差异达到或超过1,000%。

资产质量

鉴于我们业务的性质，资产的信用质量，尤其是信用卡及其他贷款的信用质量，是影响我们持续财务表现和整体财务状况的关键因素。对于信用卡及其他贷款组合，我们密切监控逾期率和本金净损失率。这些指标反映了我们的承保情况、组合固有的信用风险以及催收和回收工作的成效等因素。这些比率也更广泛地反映了总体宏观经济状况，包括以下因素的累积影响：

相对于工资增长持续的通胀，以及较高的利率。信用卡及其他贷款组合的规模也会影响我们的逾期率和本金净损失率，因为该规模是计算这些比率时的分母。因此，组合规模的变化（无论是由于收紧信贷、收购或处置组合，还是其他原因）都可能导致逾期率和本金净损失率发生变动，而这些变动未必能反映整体组合的基础信用质量。

逾期：如果我们未能在规定到期日之前收到最低还款额，则该账户在合同上即属逾期。除有限情形外，我们的政策是对所有账户继续计提利息和费用收入，直至余额及所有相关利息和费用均已偿还或核销。账户逾期超过30天后，专有的催收评分算法会自动评估该账户进一步逾期的风险；根据所显示的风险水平，我们会采取相应的催收策略，其中可能包括启用技术的定向催收策略，以通过最高效的沟通渠道联系持卡人。如果在用尽所有内部催收措施后仍无法收回账户款项，我们可能会聘请催收机构或外部律师继续催收，或出售已核销余额。

逾期率的计算方式为：以期末合同上逾期的未偿本金余额（即逾期30天或以上的本金余额）除以同一期末信用卡及其他贷款的未偿本金总额。

下表根据所列日期的未偿本金余额，列示了信用卡及其他贷款组合的逾期趋势：

表7：信用卡及其他贷款逾期趋势


	2026年9月30日		占总额的百分比		2025年12月31日		占总额的百分比
（百万，百分比除外）
信用卡及其他贷款未偿余额 ─ 本金	$	16,584			100.00	%		$	16,886			100.00	%
合同上逾期的未偿余额：
逾期30至59天	283			1.70	%		283			1.67	%
逾期60至89天	205			1.24	%		215			1.27	%
逾期90天或以上	435			2.63	%		473			2.81	%
合计	$	923			5.57	%		$	971			5.75	%

作为我们催收策略的一部分，我们可能会提供临时和短期计划，以提高催收成功的可能性并满足客户需求。对于已申请协助且符合特定资格要求的客户，我们会通过降低还款要求、降低利率和免除滞纳金的方式进行调整。我们不提供免除本金的计划。这些临时贷款调整可能有助于那些我们认为能够从短期困难中恢复并恢复按期还款的客户。根据这些消费者纾困计划，获得纾困的账户可能不会像未获得纾困时那样在同一时间进入下一个逾期阶段，包括核销阶段。我们会评估消费者纾困计划，以确定其是否构成向遭遇财务困难的借款人提供的、超过微不足道程度的付款延期；若是，则这些计划将被视为贷款调整。更多信息请参见我们未经审计的合并财务报表附注2“信用卡及其他贷款——调整后的信用卡贷款”。

本金净损失：我们的本金净损失包括被认定无法收回的信用卡及其他贷款本金金额，扣除收回款项后计算，不包括已核销的利息、费用和第三方欺诈损失（包括合成欺诈）。已核销的利息和费用会减少贷款利息及费用收入，而第三方欺诈损失则计入卡片及处理费用。我们的信用卡贷款（包括未付利息和费用）通常在账户逾期满180天的当月核销。我们的先买后付产品（包括分期贷款和“分拆付款”服务）通常在贷款逾期满120天时核销，其中包括未付利息。但在客户破产或死亡的情况下，信用卡及其他贷款（酌情包括未付利息和费用）会在收到破产或死亡通知后60天核销；无论如何，信用卡贷款最迟不超过逾期180天，分期贷款和“分拆付款”服务最迟不超过逾期120天。

本金净损失率的计算方法为：将该期间的本金净损失除以同期信用卡及其他贷款平均余额，平均余额采用日均余额计算法。下表列示了所示期间的本金净损失：

表8：信用卡及其他贷款本金净损失


	截至9月30日的三个月		截至9月30日的九个月
	2026		2025		2026		2025
（百万，百分比除外）
信用卡及其他贷款平均余额	$	18,591			$	17,596			$	18,358		$	17,813
本金净损失	300			327			947			1,040
本金净损失占信用卡及其他贷款平均余额的百分比	6.40	%		7.39	%		6.90	%		7.81	%

合并流动性和资本资源

概述

我们始终高度重视流动性和资本。我们的融资、流动性和资本政策旨在确保业务拥有充足的流动性和资本资源，以支持日常运营和业务增长，维持母公司优先无担保票据、次级票据、优先股及公开担保融资相关的信用评级，并以具有成本效益且审慎的方式，在预期和非预期的市场环境下满足监管及政策要求，包括适用于 Comenity Bank (CB) 和 Comenity Capital Bank (CCB) 的联邦存款保险公司法规所规定的资本充足率和杠杆率要求。

我们的主要流动性来源包括经营活动产生的现金、银行信贷额度、母公司发行的优先和/或次级无担保票据及优先股、通过证券化计划进行的融资，以及银行存款。具体而言，截至 2026 年 9 月 30 日，我们的消费者存款同比增长 21%，达到 99 亿美元；消费者存款平均占总融资的 53%，高于一年前的 47%。更广泛而言，我们持续评估续期和拓展各类流动性来源的机会。我们力求通过多元化的融资来源满足融资需求，并致力于按工具类型、期限和投资者群体等维度保持融资来源多样化；我们认为，这将减轻任何一种工具、期限或投资者群体发生中断所带来的影响。

我们的主要流动性用途包括承销信用卡及其他贷款、按期支付债务本金和利息、运营费用、资本支出（包括数字化和产品创新以及技术升级）、回购股权和债务证券，以及支付股息。

过去我们曾赎回或回购未偿债务，包括优先或次级无担保票据；未来也可能不时通过赎回、现金购买或交换其他证券，在公开市场购买、要约收购、私下协商交易或其他方式进行此类操作。此类回购或交换将取决于当时的市场状况、流动性需求、合同限制及其他因素，并可能通过现有现金、循环信贷额度借款、发行新债务证券或其他流动性来源提供资金。涉及金额可能较大。

未来我们还需要额外融资，以在现有债务到期时或到期前偿还或再融资，并为业务增长提供资金；融资方式可能包括发行额外债务或股权证券，或进行其他资本市场或融资交易。作为融资战略和资本结构优化的一部分，我们已发行次级票据和公开交易的优先股；未来我们可能会继续寻求进一步优化资本结构。鉴于部分未偿债务工具即将到期，且取决于当时的宏观经济状况，我们可能需要在波动和/或不利的市场中偿还、展期或再融资部分或全部未来到期债务。

Because of the alternatives available to us, as discussed above, we believe our short-term and long-term sources of liquidity are adequate to fund not only our current operations, but also our near-term and long-term funding requirements including dividend payments, debt service obligations and repayment of debt maturities and other amounts that may ultimately be paid in connection with contingencies. However, the adequacy of our liquidity could be impacted by various factors, including pending or future legislation, regulation or litigation, macroeconomic conditions and volatility in the financial and capital markets, limiting our access to or increasing our cost of capital, which could make capital unavailable, or available but on terms that are unfavorable to us. These factors could significantly reduce our financial flexibility and cause us to contract or not grow our business, which could have a material adverse effect on our results of operations and financial condition.

We have a robust liquidity risk management framework in place which includes ongoing monitoring of our liquidity and funding positions against our risk appetite metrics and key risk indicators. During times where there may be potential risks from adverse developments in the banking industry and/or increased financial sector volatility, we may invoke our contingency funding plans to enhance daily monitoring of our liquidity and funding positions, determine potential mitigating actions, if necessary, and provide enhanced reporting to our Boards of Directors, at both the Bread Financial and Bank-levels, and regulators.

We maintain a significant majority of our liquidity portfolio on deposit within the Federal Reserve banking system, and we also have a small investment securities portfolio, classified as available-for-sale, which we hold in relation to the Community Reinvestment Act. We do not have any investment securities classified as held-to-maturity.

Credit Ratings

We obtain credit ratings for our Parent Company from the three major credit rating agencies, Moody’s Investor Services (Moody’s), Standard & Poor’s (S&P) and Fitch Ratings (Fitch), in order to facilitate debt financings and broaden the investor base for our Parent Company debt securities.

Our management approach is designed, among other things, to maintain appropriate and stable credit ratings from the credit rating agencies which help support our access to cost-effective unsecured funding as a component of our overall liquidity and capital resources.

In October 2026 two of our credit rating agencies refreshed their credit ratings and related outlooks for our Parent Company. Moody’s upgraded their credit ratings of our Parent Company’s senior unsecured debt, subordinated debt and preferred stock and changed their outlook from “Positive” to “Stable” in conjunction with their upgrades. Fitch affirmed their credit ratings for our senior unsecured debt and preferred stock, and upgraded their credit ratings of our subordinated debt; they also affirmed their “Stable” outlook in conjunction with this refresh of their credit ratings. S&P has not published updated ratings as of the date of this report.

The table below provides a summary of the credit ratings for the outstanding senior unsecured debt, subordinated debt and preferred stock of our Parent Company as of the dates presented:

September 30, 2026

October 27, 2026

Bread Financial Holdings, Inc.

Moody’s

S&P

Fitch

Moody’s

S&P

Fitch

Senior unsecured debt

Ba2

BB-

Ba1

BB-

Subordinated debt

Ba2

B+

Ba1

BB-

Preferred stock

—

B-

Ba3

—

B-

Outlook

Positive

Stable

Positive

Stable

We also seek to maintain appropriate and stable credit ratings for our credit card securitizations. The table below provides a summary of the structured finance credit ratings for certain of the asset-backed securities issued through World Financial

Table of Contents

Network Credit Card Master Note Trust (WFNMNT) from the rating agencies (DBRS, S&P and Fitch), specifically the outstanding Class A notes of WFNMNT as of September 30, 2026:

WFNMNT

DBRS (1)

S&P

Fitch

Class A notes

AAA

______________________________

(1)Does not include our Series 2024-B public asset-backed-notes.

Credit ratings are not a recommendation to buy or hold any securities and they may be revised or revoked at any time at the sole discretion of the rating agency. Downgrades in the ratings of our unsecured or secured debt could result in higher funding costs, as well as reductions in our borrowing capacity in the unsecured or secured debt markets. We believe our mix of funding, including the proportion of our consumer and wholesale deposits, to total funding, reduces the impact that a credit rating downgrade could have on our funding costs and capacity.

Funding Sources

As referenced above, our primary sources of liquidity include cash generated from operating activities, our bank credit facility, issuances of senior or subordinated unsecured notes and preferred stock by our Parent Company, as well as financings through our securitization programs, and deposits with the Banks.

Certain of our long-term debt agreements include various restrictive financial and non-financial covenants. If we do not comply with certain of these covenants and an event of default occurs and remains uncured, the maturity of amounts outstanding may be accelerated and become payable, and, with respect to our credit agreement, the associated commitments may be terminated. As of September 30, 2026, we were in compliance with all such covenants.

Credit Agreement

In October 2024, we entered into our amended Credit Agreement with the Parent Company, as borrower, certain of our domestic subsidiaries, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent and lender, and various other financial institutions, as lenders, which provides for a $700 million senior unsecured revolving credit facility (the Revolving Credit Facility), which matures in October 2028. As of September 30, 2026, our Revolving Credit Facility was undrawn and all $700 million remained available for future borrowings.

In September 2026, we entered into an amendment to our Credit Agreement in connection with our previously-disclosed merger of CB with and into CCB, with CCB being the surviving entity. The merger was approved by the applicable regulators on July 31, 2026, and was consummated on October 1, 2026.

Senior and Subordinated Unsecured Notes

The following table provides a summary of our outstanding Long-term and other debt, consisting of senior and subordinated unsecured notes, as of September 30, 2026:

Table 9: Long-term and other debt


Description	Issuance Date	Maturity	Interest Rate	Principal Amount Originally Issued		Principal Amount Outstanding
(Millions, except percentages)
Senior notes due 2031	November 2025	May 2031	6.750%	$	500			$	500
Subordinated notes due 2035	March 2025	June 2035	8.375%	400			326
				$	900			$	826

Throughout 2026, we have repurchased $74 million in aggregate principal amount of our 8.375% Fixed-Rate Reset Subordinated Notes Due 2035, in the open market, with cash on hand.

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Deposits

The Banks use a variety of deposit products to finance their operating activities, including funding for non-securitized credit card and other loans, and to fund their securitization enhancement requirements. The Banks offer consumer deposit products, including Individual Retirement Accounts, as well as deposits sourced through contractual arrangements with various financial counterparties (often referred to as wholesale deposits, and includes brokered deposits) and various non-maturity deposit products that are generally redeemable on demand by the customer, and as such have no scheduled maturity date. The Banks have also issued certificates of deposit with scheduled maturity dates ranging between October 2026 and September 2031, in denominations of at least $1,000, on which interest is paid either monthly or at maturity. The following table summarizes these consumer and wholesale deposit products by type and associated attributes as of the dates presented:

Table 10: Interest-bearing Deposits


	September 30, 2026		December 31, 2025
(Millions, except percentages)
Deposits
Consumer deposits	$	9,900			$	8,523
Wholesale	5,579			5,368
Total interest-bearing deposits	$	15,479			$	13,891

Non-maturity deposit products
Non-maturity deposits	$	8,963			$	7,700
Interest rate range	0.850% - 4.18%		0.70% - 4.05%
Weighted-average interest rate	3.94	%		3.74	%

Certificates of deposit
Certificates of deposit	$	6,516			$	6,191
Interest rate range	0.850% - 4.95%		0.850% - 5.31%
Weighted-average interest rate	4.08	%		4.12	%

As of September 30, 2026 and December 31, 2025, consumer deposits that exceeded applicable Federal Deposit Insurance Corporation (FDIC) insurance limits, which are generally $250,000 per depositor, per insured bank, per ownership category, were estimated to be $786 million (5% of Total deposits) and $638 million (5% of Total deposits), respectively. The measurement of estimated uninsured deposits aligns with regulatory guidelines.

Securitization Programs Including Conduit Facilities

We sell a majority of the credit card loans originated by the Banks to certain of our master trusts (the Trusts). These securitization programs are a principal vehicle through which we finance the Banks’ credit card loans. For this purpose, we use a combination of public term asset-backed notes and private conduit facilities (the Conduit Facilities) with a consortium of lenders, including domestic money center, regional and international banks. Both our public term asset-backed notes and borrowings under the Conduit Facilities in the form of variable funding notes (VFNs) are included in Debt issued by consolidated Variable Interest Entities (VIEs) in the Consolidated Balance Sheets. Throughout 2026, $399 million of public term asset-backed notes matured and were repaid, of which $49 million were previously retained by us and therefore eliminated from the Consolidated Balance Sheets.

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The table below summarizes our conduit capacities, borrowings and maturities for the periods presented:

Table 11: Conduit Borrowing Capacity Rollforward and Maturities


(Millions)	December 31, 2025		Commitment		September 30, 2026
Conduit Facilities	Capacity		Drawn		Change		Capacity	Drawn		Maturity Date (4)
Comenity Bank
WFNMNT 2009-VFN (1)	$	1,750			$	1,363		$	—		$	1,750		$	1,056	October 2027

Comenity Capital Bank
WFCMNT 2009-VFN (2)	2,000			712			(2,000)		—		—		—
BFCIT 2026-VFN1 (3)	—			—			2,000		2,000		265		September 2028


Total	$	3,750			$	2,075		$	—		$	3,750		$	1,321

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(1)2009-VFN Conduit issued under World Financial Network Credit Card Master Note Trust (WFNMNT). In September 2026, the Maturity Date of the 2009-VFN Conduit was extended to October 2027.

(2)2009-VFN Conduit issued under World Financial Capital Master Note Trust (WFCMNT) was retired on September 1, 2026 pursuant to the related Omnibus Termination, Consent and Waiver Agreement.

(3)2026-VFN1 Conduit issued under Bread Financial Card Issuance Trust (BFCIT) on September 1, 2026. With the merger of CB with and into CCB, BFCIT will serve as our principal revolving master trust vehicle for the issuance of VFNs and other asset-backed funding arrangements going forward.

(4)Maturity Date with respect to conduit borrowings means the date on which the revolving period for the applicable Conduit Facility expires. The revolving period may be extended or renewed (unless an early amortization event occurs prior to the Maturity Date). Absent the extension or renewal of the revolving period, the Conduit Facility shall enter controlled amortization on the Maturity Date and may no longer be drawn upon.

As of September 30, 2026, we had approximately $11.5 billion of securitized credit card loans. Securitizations require credit enhancements, which may be provided in the form of cash, spread deposits, excess collateral, additional loans and/or subordinated classes. The credit enhancement is principally based on the outstanding balances of the series issued by the Trusts and by the performance of the credit card loans in the Trusts.

Early amortization events as defined within each asset-backed securitization transaction are generally driven by asset performance. We do not believe it is reasonably likely that an early amortization event will occur due to asset performance. However, if an early amortization event were declared for a Trust, the trustee of the particular Trust would retain the interest in the loans along with the excess spread that would otherwise be paid to our Bank subsidiary until the investors were fully repaid. The occurrence of an early amortization event would significantly limit or negate our ability to securitize additional credit card loans.

We have secured and continue to secure the necessary commitments to fund our credit card and other loans. However, certain of these commitments are short-term in nature and subject to renewal. There is no guarantee that these funding sources, when they mature, will be renewed on similar terms, or at all, as they are dependent on the availability of the asset-backed securitization and deposit markets at the time.

Regulation RR (Credit Risk Retention) adopted by the FDIC, the SEC, the FRB and certain other federal regulators mandates a minimum five percent risk retention requirement for securitizations. Such risk retention requirements may limit our liquidity by restricting the amount of asset-backed securities we are able to issue or affecting the timing of future issuances of asset-backed securities. We satisfy such risk retention requirements by maintaining a seller’s interest calculated in accordance with Regulation RR.

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Equity

Preferred Stock

As reflected in the table below, in May 2026 we authorized and issued 135,000 shares of preferred stock as depositary shares (the Depositary Shares) for gross proceeds of $135 million, with each Depositary Share representing a 1/40th interest in our Series B 8.875% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share (the Series B Preferred Stock). The Series B Preferred Stock has a liquidation preference of $25 per Depositary Share (equivalent to $1,000 per share of Series B Preferred Stock) and as of September 30, 2026, the aggregate liquidation value was $135 million. We used the net proceeds of the offering to enter into a preferred stock transaction with one of our subsidiary banks, CCB, pursuant to which CCB issued preferred stock to Parent Company on terms substantially the same as those of the Series B Preferred Stock. The CCB preferred stock is eliminated in consolidation.

The following table provides information about our preferred stock as of the dates presented:

Table 12: Preferred Stock Issued and Outstanding


			Per Annum Dividend Rate						Carrying Amount
Series (1)	Issuance Date	Earliest Redemption Date			Total Shares	Liquidation Preference		September 30, 2026		December 31, 2025
(Millions, except share amounts)
Series A	November 25, 2025	December 15, 2030	8.625	%		75,000			$	75			$	72			$	71
Series B	May 12, 2026	December 15, 2031	8.875	%		135,000			135			130			—
Total							$	210			$	202			$	71

______________________________

(1)Issued as depositary shares representing 1/40th interest in a share of the corresponding series of non-cumulative perpetual preferred stock, par value $0.01 per share. Dividends are payable quarterly in arrears on March 15, June 15, September 15 and December 15, at a fixed rate, in each case when, as and if declared by our Board of Directors.

Stock Repurchase Authorizations

Periodically, we repurchase shares of our common stock pursuant to Board-approved share repurchase authorizations. The rationale for our repurchase authorizations, and the amounts thereof, is to execute against our previously disclosed capital priorities to grow responsibly, maintain balance sheet strength, and return value to stockholders.

The following table provides information about our common stock repurchases under our various Board-approved share repurchase authorizations, for the periods presented:

Table 13: Authorized Share Repurchases


(Millions)	Amount Authorized for Repurchase		Number of Shares Repurchased (1)	Approximate Dollar Value of Shares Repurchased (2)	Amount Remaining for Future Repurchases
As of December 31, 2025					$	240
For the three months ended:
March 31, 2026	$	600		2.0	$	150	$	690
June 30, 2026	—		2.8	241		449
September 30, 2026	—		0.7	75		374

Total	$	600		5.5	$	466

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(1)Upon repurchase, these shares were retired and ceased to be outstanding shares of common stock, and are now treated as authorized but unissued shares of common stock. Does not include the 1.5 million shares that were retired in connection with the termination of our Capped Call transactions, discussed below.

(2)Excludes excise taxes on stock repurchases.

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Capped Call Transactions

In connection with the prior issuance of our 4.25% Convertible Senior Notes due 2028 (Convertible Notes), we entered into privately negotiated capped call (Capped Call) transactions with certain financial institution counterparties in June 2023. At that time, these transactions were expected generally to reduce potential dilution to our common stock upon any conversion of Convertible Notes and/or offset any cash payments we were required to make in excess of the principal amount of the Convertible Notes, with such reduction and/or offset subject to a cap, based on the cap price. As of December 31, 2025, all of the Capped Call transactions remained outstanding, notwithstanding that no Convertible Notes were outstanding at that time. For additional information on the June 2023 issuance of our Convertible Notes and the subsequent repurchases in 2024 and 2025, as well as information on our Capped Call transactions, refer to Note 10, “Borrowings of Long-Term and Other Debt” to the audited Consolidated Financial Statements included in our Annual Reports on Form 10-K for the years ended December 31, 2025 and 2024.

In February 2026 we entered into a separate, privately negotiated termination agreement (each, a Capped Call Unwind Agreement) with each financial institution counterparty to the Capped Call transactions, thereby terminating all of the outstanding Capped Call transactions, and resulting in the receipt of an aggregate 1.5 million shares of our common stock, with a value of $111 million, from the Capped Call counterparties pursuant to the Capped Call Unwind Agreements. Following their receipt, these shares were retired and ceased to be outstanding shares of common stock, and are now treated as authorized but unissued shares of common stock.

Dividends

The table below summarizes the cash dividend activity we had on our preferred and common stock for the dates presented:

Table 14: Dividends


(Millions, except per share amounts)	Preferred Stock - Series A	Preferred Stock - Series B		Common Stock
Dividend Declaration Date	Dividend Payment Date	Amount Per Share		Amount		Amount Per Share		Amount	Amount Per Share		Amount (1)
January 29, 2026	March 16, 2026	$	26.35			$	2		$	—		$	—			$	0.23	$	10
April 23, 2026	June 15, 2026	21.56			2			—		—		0.23			9
July 23, 2026	September 15, 2026	21.56			2			30.32		4		0.23			10

				$	6				$	4				$	29

______________________________

(1)Excludes dividend equivalent rights paid during the period.

On October 22, 2026, our Board of Directors declared quarterly cash dividends of (i) $21.56 per share on our Series A preferred stock, (ii) $22.19 per share on our Series B preferred stock, and (iii) $0.25 per share on our common stock, each payable on December 15, 2026, to the applicable stockholders of record at the close of business on November 30, 2026. The declaration and payment of future dividends on our preferred and common stock are subject to approval by our Board of Directors, based upon a review of relevant considerations and regulatory and other restrictions on our ability to pay dividends, including restrictions imposed by the terms of each series of our outstanding preferred stock.

Contractual Obligations

In the normal course of business, we enter into various contractual obligations that may require future cash payments, the vast majority of which relate to deposits, debt issued by consolidated VIEs, long-term and other debt, and operating contracts and leases.

We believe that we will have access to sufficient resources to meet these commitments.

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Cash Flows

The table below summarizes our cash flow activity for the periods indicated, followed by a discussion of the variance drivers impacting our Operating, Investing and Financing activities:

Table 15: Cash Flows


	Nine Months Ended September 30,
	2026		2025
(Millions)
Total cash provided by (used in):
Operating activities	$	1,621			$	1,524
Investing activities	(1,028)			132
Financing activities	(15)			(1,591)
Net increase in cash, cash equivalents and restricted cash	$	578			$	65

Cash Flows from Operating Activities primarily include Net income adjusted for (i) non-cash items included in Net income, such as Provision for credit losses, Depreciation and amortization, deferred taxes and other non-cash items, and (ii) changes in the balances of operating assets and liabilities, which can fluctuate in the normal course of business due to the amount and timing of payments. We generated Cash flows from operating activities of $1,621 million and $1,524 million for the nine months ended September 30, 2026 and 2025, respectively. The Net cash provided by operating activities during these periods was primarily driven by cash generated from Net income after adjusting for the Provision for credit losses.

Cash Flows from Investing Activities primarily include changes in Credit card and other loans. Net cash used in investing activities was $1,028 million for the nine months ended September 30, 2026 and Net cash provided by investing activities was $132 million for the nine months ended September 30, 2025. The Net cash used in investing activities for the nine months ended September 30, 2026 was primarily driven by Net principal losses and an increase in installment loans, partially offset by the seasonal paydown of credit card loans. The Net cash provided by investing activities for the nine months ended September 30, 2025 was primarily due to the seasonal paydown of Credit card and other loans.

Cash Flows from Financing Activities primarily include changes in deposits and long-term debt. Cash used in financing activities was $15 million and $1,591 million for the nine months ended September 30, 2026 and 2025, respectively. The Net cash used in financing activities during the nine months ended September 30, 2026 was primarily driven by net repayments of debt issued by consolidated variable interest entities (i.e., securitizations) and the repurchases of common stock and subordinated debt, partially offset by a net increase in deposits and net proceeds from the issuance of preferred stock. For the nine months ended September 30, 2025 the net cash used in financing activities was primarily driven by repayments of debt issued by consolidated variable interest entities and the repurchases of common stock, partially offset by the net increase in deposits.

INFLATION AND SEASONALITY

Although we cannot precisely determine the impact of inflation on our operations, we have generally sought to rely on operating efficiencies from scale, technology modernization and digital advancement along with other operational excellence initiatives, as well as expansion in lower cost jurisdictions to offset increased costs of employee compensation and other operating expenses impacted by inflation. We also recognize that a customer’s ability and willingness to repay us has been negatively impacted by factors such as recent inflation and elevated interest rates, and any persistent effects therefrom, which may result in higher delinquencies and increased credit losses, as reflected in our elevated Reserve rate. If the efforts to control inflation in the U.S. and globally are not successful and inflationary pressures and resulting adverse economic impacts continue to persist, including due to changes to, or the imposition of, tariffs and/or trade barriers, increased fuel prices and ongoing wars and international tensions and uncertainties, they could further increase repayment pressure on consumers as well as the risk of a recessionary environment or stagflation which may adversely impact our business, results of operations and financial condition.

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With respect to seasonality, our revenues, earnings and cash flows are affected by increased consumer spending patterns leading up to and including the holiday shopping season in the fourth quarter of each year and, to a lesser extent, during the first quarter of each year as Credit card and other loans are paid down. Net principal loss rates for our Credit card and other loans portfolio also have historically exhibited seasonal patterns and generally tend to be the highest in the first quarter of the year and lowest in the third quarter. While the effects of the seasonal trends discussed above remain evident, macroeconomic trends, such as those discussed within the Business Environment sections of our quarterly and annual reports on Form 10-Q and Form 10-K generally have a more significant impact on our key financial metrics and can outweigh any seasonal impacts that we may experience.

LEGISLATIVE, REGULATORY MATTERS AND CAPITAL ADEQUACY

Our business is subject to extensive federal and state laws and regulations, as well as related regulation and supervision, including by the FDIC, Consumer Financial Protection Bureau (CFPB) and other federal and state authorities. Pending and future laws and regulations (federal and state) may adversely impact our business. Without limiting the foregoing, CB is subject to various regulatory capital requirements administered by the Delaware Office of the State Bank Commissioner and the FDIC. CCB is also subject to various regulatory capital requirements administered by the Utah Department of Financial Institutions and the FDIC. Failure to meet minimum capital requirements can trigger certain mandatory and possibly additional discretionary actions by our regulators. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, both Banks must meet specific capital guidelines that involve quantitative measures of their assets and liabilities as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by these regulators about components, risk weightings and other factors. In addition, both Banks are limited in the amounts they can pay as dividends to the Parent Company.

Quantitative measures, established by regulations to ensure capital adequacy, require the Banks to maintain minimum amounts and ratios of Tier 1 capital to average assets, and Common equity tier 1, Tier 1 capital and Total capital, each to risk-weighted assets. Failure to meet these minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions by the Banks’ regulators that if undertaken, could have a direct material effect on CB’s and/or CCB’s operating activities, as well as our operating activities. Based on these regulations, as of September 30, 2026 and 2025, each Bank met all capital requirements to which it was subject, and maintained capital ratios in excess of the minimums required to qualify as well capitalized. The Banks seek to maintain capital levels and ratios in excess of the minimum regulatory requirements inclusive of the 2.5% Capital Conservation Buffer. Although Bread Financial is not a bank holding company as defined under the Bank Holding Company Act, we seek to maintain capital levels and ratios in excess of the minimums required for bank holding companies.

On December 17, 2025, we filed applications with the federal and respective state banking regulators for permission to merge CB with and into CCB, with CCB being the surviving entity. The merger was approved by the applicable regulators on July 31, 2026, and was consummated on October 1, 2026. The merger is not expected to have a significant impact on our consolidated financial position, results of operations, or liquidity. For additional discussion, refer to “Part I, Item 1. Business — Supervision and Regulation — Planned Merger of CB with and into CCB” in our 2025 Form 10-K.

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The following table provides the actual capital ratios and minimum ratios for the Company, as well as each Bank, as of the periods presented:

Table 16: Capital Ratios


	Ratio/Dollar Value		Minimum Ratio for Capital Adequacy Purposes *		Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions
(Millions, except percentages)	September 30, 2026		December 31, 2025
Total Company
Common equity tier 1 capital ratio (1)	13.1	%		13.0	%		4.5	%	N/A
Tier 1 capital ratio (2)	14.1			13.4			6.0		N/A
Total risk-based capital ratio (3)	17.1			16.8			8.0		N/A
Tier 1 leverage capital ratio (4)	12.4			12.4			4.0		N/A
Total risk-weighted assets (5)	$	19,728			$	19,755

Comenity Bank
Common equity tier 1 capital ratio (1)	15.5	%		15.1	%		4.5	%	6.5	%
Tier 1 capital ratio (2)	15.5			15.1			6.0		8.0
Total risk-based capital ratio (3)	16.9			16.5			8.0		10.0
Tier 1 leverage capital ratio (4)	13.6			14.1			4.0		5.0

Comenity Capital Bank
Common equity tier 1 capital ratio (1)	12.4	%		13.5	%		4.5	%	6.5	%
Tier 1 capital ratio (2)	14.1			14.1			6.0		8.0
Total risk-based capital ratio (3)	17.5			17.5			8.0		10.0
Tier 1 leverage capital ratio (4)	12.5			13.2			4.0		5.0

______________________________

*The listed capital adequacy ratios exclude the Capital Conservation Buffer.

(1)Common equity tier 1 capital ratio represents tier 1 capital reduced by Preferred stock, divided by total risk-weighted assets. In the calculation of tier 1 capital, we follow the Basel III Standardized Approach and therefore Total stockholders’ equity has been reduced by Goodwill and intangible assets, net. See below for a reconciliation of our Total stockholders’ equity under GAAP to tier 1 and tier 2 capital under the Basel III Standardized Approach.

(2)Tier 1 capital ratio represents tier 1 capital divided by total risk-weighted assets. In the calculation of tier 1 capital, we follow the Basel III Standardized Approach and therefore Total stockholders’ equity has been reduced, primarily by Goodwill and intangible assets, net. For us, tier 1 capital is primarily comprised of CET1 capital and Preferred stock. See below for a reconciliation of our Total stockholders’ equity under GAAP to tier 1 and tier 2 capital under the Basel III Standardized Approach.

(3)Total risk-based capital ratio represents total capital divided by total risk-weighted assets. In the calculation of total capital, we follow the Basel III Standardized Approach and therefore tier 1 capital has been increased by tier 2 capital, which for us is comprised of subordinated notes, as well as the allowable portion of the Allowance for credit losses. See below for a reconciliation of our Total stockholders’ equity under GAAP to tier 1 and tier 2 capital under the Basel III Standardized Approach.

(4)Tier 1 leverage capital ratio represents tier 1 capital divided by total average assets, after certain adjustments.

(5)Total risk-weighted assets are generally measured by allocating assets, and specified off-balance sheet exposures, to various risk categories as defined by the Basel III Standardized Approach.

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The following table provides a reconciliation of our Total stockholders’ equity under GAAP to Basel III Standardized Approach Common equity tier 1 capital, Tier 1 capital, Tier 2 capital and Total capital, as of the date presented:

Table 17: Capital Reconciliations


	September 30, 2026
(Millions)
Total stockholders’ equity	$	3,437

Less:
Preferred stock	201
Total common stockholders’ equity	3,236

Less:
Goodwill (1)	593
Intangible assets	60
Other	3
Common equity tier 1 capital	2,580

Add:
Preferred stock	201
Tier 1 capital	2,781

Subordinated notes	326
Qualifying allowance for credit losses (2)	269
Tier 2 capital	595

Total capital	$	3,376

__________________________________

(1)Goodwill, net of the related $41 million deferred tax liability.

(2)Represents the allowable portion of the Allowance for credit losses, which is a maximum of 1.25% of RWA.

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The following table provides the changes in our Basel III Standardized Approach Common equity tier 1 capital, Tier 1 capital and Tier 2 capital for the period presented:

Table 18: Capital Rollforwards


	Three months ended September 30, 2026		Nine months ended September 30, 2026
(Millions)
Common equity tier 1 capital beginning balance	$	2,493			$	2,569
Net income	156			483
Dividends declared on preferred and common stock	(16)			(39)
Repurchases of common stock	(76)			(472)

Changes in additional paid-in capital	16			17


Changes in intangible assets	7			22

Common equity tier 1 capital	2,580			2,580

Additional Tier 1 capital beginning balance	201			71
Change in preferred stock	—			130
Tier 1 capital	2,781			2,781

Tier 2 capital beginning balance	614			670
Change in subordinated notes	(24)			(75)
Change in qualifying allowance for credit losses	5			—
Tier 2 capital	595			595

Total capital	$	3,376			$	3,376

Further information about each Bank’s capital components and calculations can be found in each Bank’s Consolidated Reports of Condition and Income Form FFIEC 041 (Call Reports) as filed with the FDIC.

We are also involved, from time to time, in reviews, investigations, subpoenas, supervisory actions and other proceedings (both formal and informal) by governmental agencies regarding our business, which could subject us to significant fines, penalties, obligations to change our business practices, significant restrictions on our existing business or ability to develop new business, cease-and-desist orders, safety-and-soundness directives or other requirements resulting in increased expenses, diminished income and damage to our reputation.

In November 2023 following the consent of the Board of Managers of Comenity Servicing LLC (the Servicer), the FDIC issued a consent order to the Servicer. The Servicer is not one of our Bank subsidiaries, but is our wholly-owned subsidiary that services substantially all of our loans. The consent order arose out of the June 2022 transition of our credit card processing services to strategic outsourcing partners and addresses certain shortcomings in the Servicer’s information technology (IT) systems development, project management, business continuity management, cloud operations, and third-party oversight. The Servicer entered into the consent order for the purpose of resolving these matters without admitting or denying any violations of law or regulation set forth in the order. The consent order did not contain any monetary penalties or fines. The consent order was terminated by the FDIC on March 31, 2026.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no significant changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)” included in our 2025 Form 10-K.

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RECENTLY ISSUED ACCOUNTING STANDARDS

See the “Recently Issued Accounting Standards” in Note 1, “Description of Business, Basis of Presentation and Significant Accounting Policies” to the unaudited Consolidated Financial Statements.

Cautionary Note Regarding Forward-Looking Statements

This Form 10-Q and the documents incorporated by reference herein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “project,” “plan,” “likely,” “may,” “should” or other words or phrases of similar import. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding, and the guidance we give with respect to, our anticipated operating or financial results, future financial performance and outlook, future dividend declarations or stock repurchases and future economic conditions.

We believe that our expectations are based on reasonable assumptions. Forward-looking statements, however, are subject to a number of risks and uncertainties that are difficult to predict and, in many cases, beyond our control. Accordingly, our actual results could differ materially from the projections, anticipated results or other expectations expressed in this report, and no assurances can be given that our expectations will prove to have been correct. Factors that could cause the outcomes to differ materially include, but are not limited to, the following:

•macroeconomic conditions, including inflation, interest rates, labor market conditions, financial and capital market conditions, recessionary pressures or concerns over a prolonged economic slowdown, and the related impact on consumer spending behavior, payments, debt levels, savings rates and other behaviors;

•domestic and international political events and conditions, including significant shifts in trade policy, such as changes to, or the imposition of, tariffs and/or trade barriers and consequently any economic impacts, volatility, uncertainty and geopolitical instability resulting therefrom, as well as ongoing wars, military conflicts, and international tensions or hostilities;

•local or global public health issues, climate-related events, impacts to the power grid, and natural disasters;

•future credit performance of our customers, including the level of future delinquency and charge-off rates;

•loss of, or reduction in demand for services and/or products from, significant brand partners or customers in the highly competitive markets in which we operate, including competition from new and non-traditional competitors, such as financial technology companies, and with respect to new products, services and technologies, such as the emergence or increase in popularity of agentic commerce, digital payment platforms and currencies and other alternative payment and deposit solutions;

•the concentration of our business in U.S. consumer credit;

•increases or volatility in the Allowance for credit losses that may result from the application of the current expected credit loss (CECL) model;

•inaccuracies in the models and estimates on which we rely, including our credit risk management models and the amount of our Allowance for credit losses;

•increases in fraudulent activity;

•failure to identify, complete or successfully integrate or disaggregate business acquisitions, divestitures and other strategic initiatives, including, with respect to divested businesses, any associated guarantees, indemnities or other liabilities;

•the extent to which our results are dependent upon our brand partners, including our brand partners’ financial performance and reputation, as well as the effective promotion and support of our products by brand partners;

•increases in the cost of doing business, including market interest rates;

•our level of indebtedness and inability to access financial or capital markets, including asset-backed securitization funding or deposits markets;

•restrictions that limit our ability to pay dividends and repurchase our stock, and restrictions that limit our Banks’ ability to pay dividends to us;

•pending and future litigation;

•pending and future federal, state, local and foreign legislation, executive action, regulation, supervisory guidance and regulatory and legal actions including, but not limited to, those related to financial regulatory reform and

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consumer financial services practices, as well as any such actions that would place limits on credit card interest rates or late fees, interchange fees or other charges;

•increases in regulatory capital requirements or other support for our Banks;

•failures, or breaches in our operational or security systems, including as a result of cyberattacks, unanticipated impacts from technology modernization projects, failure of our information security controls or otherwise;

•loss of consumer information or other data due to compromised physical or cyber security, including disruptive attacks from financially motivated bad actors and third-party supply chain issues;

•any liability or other adverse impacts arising out of or related to the spinoff of our former LoyaltyOne segment or the bankruptcy filings of Loyalty Ventures Inc. (LVI) and certain of its subsidiaries, including the pending litigation against us in connection with the spinoff; and

•those factors identified in our filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our 2025 Form 10-K and this quarterly report.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected.

Any forward-looking statements contained in this Form 10-Q speak only as of the date made, and we undertake no obligation, other than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.

Table of Conte nt s

Item 1. Financial Statements.

BREAD FINANCIAL HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026		2025		2026		2025
(Millions, except per share amounts)
Interest income
Interest and fees on loans	$	1,254			$	1,198			$	3,673			$	3,531
Interest on cash and investment securities	40			44			114			135
Total interest income	1,294			1,242			3,787			3,666
Interest expense
Interest on deposits	148			139			420			417
Interest on borrowings	51			71			166			238
Total interest expense	199			210			586			655
Net interest income	1,095			1,032			3,201			3,011
Non-interest income
Interchange revenue, net of retailer share arrangements	(144)			(111)			(361)			(289)
Other	66			50			187			148
Total non-interest income	(78)			(61)			(174)			(141)
Total net interest and non-interest income	1,017			971			3,027			2,870
Provision for credit losses	321			299			937			869
Total net interest and non-interest income, after provision for credit losses	696			672			2,090			2,001
Non-interest expenses
Employee compensation and benefits	228			222			673			648
Card and processing expenses	79			81			240			244
Information processing and communication	85			72			242			230
Marketing expenses	35			38			106			106
Depreciation and amortization	17			20			55			61
Other	43			43			126			144
Total non-interest expenses	487			476			1,442			1,433
Income from continuing operations before income taxes	209			196			648			568
Provision for income taxes	53			8			165			100
Income from continuing operations	156			188			483			468
Loss from discontinued operations, net of income taxes (1)	—			—			—			(4)
Net income	156			188			483			464
Dividends declared to preferred stockholders	(6)			—			(10)			—
Net income available to common stockholders	$	150			$	188			$	473			$	464

Basic earnings per common share (Note 13)
Income from continuing operations	$	3.91			$	4.04			$	11.75			$	9.88
Loss from discontinued operations	—			—			$	—			$	(0.09)
Net income per share	$	3.91			$	4.04			$	11.75			$	9.79

Diluted earnings per common share (Note 13)
Income from continuing operations	$	3.82			$	3.96			$	11.54			$	9.74
Loss from discontinued operations	—			—			$	—			$	(0.09)
Net income per share	$	3.82			$	3.96			$	11.54			$	9.65





Weighted average common shares outstanding (Note 13)
Basic	38.3		46.5		40.3		47.4
Diluted	39.3		47.5		41.0		48.1

______________________________

(1)Includes amounts that related to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. For additional information, refer to Note 1, “Description of Business, Basis of Presentation and Significant Accounting Policies” to the unaudited Consolidated Financial Statements.

See Notes to the unaudited Consolidated Financial Statements.

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BREAD FINANCIAL HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026		2025		2026		2025
(Millions)
Net income	$	156			$	188		$	483	$	464

Other comprehensive (loss) income
Unrealized (loss) gain on available-for-sale debt securities	(10)			3			(11)		6
Tax benefit (expense)	3			—			3		(1)
Unrealized (loss) gain on available-for-sale debt securities, net of tax	(7)			3			(8)		5

Unrealized (loss) gain on cash flow hedges	(1)			—			(1)		1
Tax expense	—			—			—		—
Unrealized (loss) gain on cash flow hedges, net of tax	(1)			—			(1)		1





Other comprehensive (loss) income, net of tax	(8)			3			(9)		6

Total comprehensive income, net of tax	$	148			$	191		$	474	$	470

See Notes to the unaudited Consolidated Financial Statements.

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BREAD FINANCIAL HOLDINGS, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS


	September 30, 2026		December 31, 2025
(Millions, except per share amounts)
ASSETS
Cash and cash equivalents	$	3,961			$	3,604
Credit card and other loans
Total credit card and other loans (includes loans available to settle obligations of consolidated variable interest entities: September 30, 2026, $11,489; December 31, 2025, $10,708)	18,850			18,805
Allowance for credit losses	(2,096)			(2,106)
Credit card and other loans, net	16,754			16,699
Investments (includes investment securities carried at fair value: September 30, 2026, $201; December 31, 2025, $221)	279			284
Property and equipment, net	97			117
Goodwill and intangible assets, net	694			716
Other assets	1,506			1,243
Total assets	$	23,291			$	22,663
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits	$	15,502			$	13,916
Debt issued by consolidated variable interest entities	2,320			3,422
Long-term and other debt	814			886
Other liabilities	1,218			1,112
Total liabilities	19,854			19,336
Commitments and contingencies (Note 15)
Stockholders’ equity
Preferred stock, $0.01 par value; authorized, 210.0 thousand shares; issued and outstanding: 210.0 thousand shares as of September 30, 2026 and 75.0 thousand shares as of December 31, 2025	—			—
Common stock, $0.01 par value; authorized, 200.0 million shares; issued and outstanding: 38.0 million shares as of September 30, 2026 and 44.1 million shares as of December 31, 2025.	—			—
Additional paid-in capital	1,543			1,868
Retained earnings	1,919			1,475
Accumulated other comprehensive loss	(25)			(16)
Total stockholders’ equity	3,437			3,327
Total liabilities and stockholders’ equity	$	23,291			$	22,663

See Notes to the unaudited Consolidated Financial Statements.

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BREAD FINANCIAL HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


Three Months Ended September 30, 2026	Preferred Stock		Common Stock		Additional Paid-In Capital				Retained Earnings		Accumulated Other Comprehensive Loss	Total Stockholders’ Equity
Shares		Amount		Shares		Amount
(Millions, except preferred shares in thousands and per share amounts)
Balance as of June 30, 2026	210.0		$	—			38.7		$	—		$	1,603		$	1,779		$	(17)	$	3,365
Net income	—		—			—		—			—			156	—		156
Other comprehensive loss	—		—			—		—			—			—	(8)		(8)
Stock-based compensation	—		—			—		—			16			—	—		16

Repurchases of common stock	—		—			(0.8)		—			(76)			—	—		(76)


Preferred stock dividends (1)	—		—			—		—			—			(6)	—		(6)
Common stock dividends and dividend equivalent rights (1)	—		—			—		—			—			(10)	—		(10)
Issuance of shares to employees, net of shares withheld for employee taxes	—		—			0.1		—			—			—	—		—
Balance as of September 30, 2026	210.0		$	—			38.0		$	—		$	1,543		$	1,919		$	(25)	$	3,437


Three Months Ended September 30, 2025	Preferred Stock		Common Stock		Additional Paid-In Capital				Retained Earnings		Accumulated Other Comprehensive Loss	Total Stockholders’ Equity
Shares		Amount		Shares		Amount
(Millions, except preferred shares in thousands and per share amounts)
Balance as of June 30, 2025	—		$	—			46.6		$	1		$	1,929		$	1,255		$	(19)	$	3,166
Net income	—		—			—		—			—			188	—		188
Other comprehensive income	—		—			—		—			—			—	3		3
Stock-based compensation	—		—			—		—			13			—	—		13
Repurchases of common stock	—		—			(0.6)		—			(40)			—	—		(40)
Repurchases of Convertible Notes	—		—			—		—			(2)			—	—		(2)

Common stock dividends and dividend equivalent rights (1)	—		—			—		—			—			(11)	—		(11)

Balance as of September 30, 2025	—		$	—			46.0		$	1		$	1,900		$	1,432		$	(16)	$	3,317

__________________________________

(1)For information regarding dividends declared during the periods presented, refer to Note 10, “Preferred Stock and Common Stock - Dividends” to our unaudited Consolidated Financial Statements.

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BREAD FINANCIAL HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


Nine Months Ended September 30, 2026	Preferred Stock		Common Stock		Additional Paid-In Capital				Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
Shares		Amount		Shares		Amount
(Millions, except preferred shares in thousands and per share amounts)
Balance as of December 31, 2025	75.0		$	—			44.1		$	—			$	1,868			$	1,475			$	(16)			$	3,327

Net income	—		—			—		—			—					483	—			483
Other comprehensive loss	—		—			—		—			—					—	(9)			(9)
Stock-based compensation	—		—			—		—			45					—	—			45
Issuance of preferred stock	135.0		—			—		—			130					—	—			130

Repurchases of common stock	—		—			(5.5)		—			(472)					—	—			(472)
Termination of Capped Call transactions	—		—			(1.5)		—			(1)					—	—			(1)

Preferred stock dividends (1)	—		—			—		—			—					(10)	—			(10)
Common stock dividends and dividend equivalent rights (1)	—		—			—		—			—					(29)	—			(29)
Issuance of shares to employees, net of shares withheld for employee taxes	—		—			0.9		—			(27)					—	—			(27)
Balance as of September 30, 2026	210.0			$	—			38.0			$	—			$	1,543			$	1,919			$	(25)			$	3,437


Nine Months Ended September 30, 2025	Preferred Stock		Common Stock		Additional Paid-In Capital				Retained Earnings		Accumulated Other Comprehensive Loss	Total Stockholders’ Equity
Shares		Amount		Shares		Amount
(Millions, except preferred shares in thousands and per share amounts)
Balance as of December 31, 2024	—		$	—			49.1		$	1		$	2,073		$	999		$	(22)	$	3,051
Net income	—		—			—		—			—			464	—		464
Other comprehensive income	—		—			—		—			—			—	6		6
Stock-based compensation	—		—			—		—			41			—	—		41

Repurchases of common stock	—		—			(3.8)		—			(190)			—	—		(190)
Repurchase of Convertible Notes	—		—			—		—			(4)			—	—		(4)

Common stock dividends and dividend equivalent rights (1)	—		—			—		—			—			(31)	—		(31)
Issuance of shares to employees, net of shares withheld for employee taxes	—		—			0.7		—			(20)			—	—		(20)
Balance as of September 30, 2025	—		$	—			46.0		$	1		$	1,900		$	1,432		$	(16)	$	3,317

__________________________________

(1)For information regarding dividends declared during the periods presented, refer to Note 10, “Preferred Stock and Common Stock - Dividends” to our unaudited Consolidated Financial Statements.

See Notes to the unaudited Consolidated Financial Statements.

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BREAD FINANCIAL HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended September 30,
	2026		2025
(Millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	483			$	464
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses	937			869
Depreciation and amortization	55			61
Deferred income taxes	2			95
Non-cash stock-based compensation	46			41
Amortization of deferred financing costs	12			12
Amortization of deferred origination costs	54			57

Loss on debt extinguishment	3			19
Originations of loans held-for-sale (1)	(776)			—
Proceeds from sales and paydowns of loans held-for-sale (1)	767			—
Change in other operating assets and liabilities
Change in other assets	(63)			53
Change in other liabilities	101			(131)
Other	—			(16)
Net cash provided by operating activities	1,621			1,524
CASH FLOWS FROM INVESTING ACTIVITIES
Change in credit card and other loans	(1,014)			156


Purchases of investments	(15)			(20)
Maturities of investments	15			16
Other, including capital expenditures	(14)			(20)
Net cash (used in) provided by investing activities	(1,028)			132
CASH FLOWS FROM FINANCING ACTIVITIES
Unsecured borrowings under debt agreements	—			400
Repayments/maturities of unsecured borrowings under debt agreements	(76)			(312)
Debt issued by consolidated variable interest entities	415			25
Repayments/maturities of debt issued by consolidated variable interest entities	(1,519)			(1,903)
Net increase in deposits	1,585			454
Payment of deferred financing costs	(8)			(13)
Net proceeds from the issuance of preferred stock	130			—
Repurchases of common stock	(472)			(190)
Dividends and dividend equivalent rights paid	(39)			(31)

Other	(31)			(21)
Net cash used in financing activities	(15)			(1,591)
Change in cash, cash equivalents and restricted cash	578			65
Cash, cash equivalents and restricted cash at beginning of period	3,628			3,714
Cash, cash equivalents and restricted cash at end of period	$	4,206			$	3,779
SUPPLEMENTAL CASH FLOW INFORMATION
Cash and cash equivalents reconciliation
Cash and cash equivalents	$	3,961			$	3,764
Restricted cash included within Other assets	245			15
Total cash, cash equivalents and restricted cash	$	4,206			$	3,779

______________________________

(1)Relates to originations of installment loans held for sale and subsequently sold under a new partnership. See Note 2, \"Credit Card and Other Loans - Credit Card Loan Portfolio and Installment Loan Sales\" to our unaudited Consolidated Financial Statements.

The unaudited Consolidated Statements of Cash Flows are presented with the combined cash flows from continuing and discontinued operations.

See Notes to the unaudited Consolidated Financial Statements.

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

We are a tech-forward financial services company that provides simple, personalized payment, lending and saving solutions to millions of U.S. consumers. Our payment solutions deliver growth for some of the most recognized brands in travel and entertainment, specialty apparel, health and beauty, jewelry, sporting goods, technology and electronics, as well as home and furniture through our co-brand and private label credit cards and pay-over-time products providing choice and value to our shared customers. Additionally, we offer Bread Financial general purpose credit cards and saving products that empower our customers and their passions for a better life.

We have continued to diversify our product mix with our brand partners through growth of our co-brand credit card programs, which, relative to our private label credit card programs, have higher Credit sales per account and an improved credit risk mix that generally results in higher transactor balances, lower delinquencies and late fees, as well as lower losses. We also offer our proprietary credit cards along with an expanding range of our Bread Pay products, which are our installment loans and “split-pay” offerings.

Our partner base consists of large consumer-based businesses, including well-known brands such as (alphabetically) AAA, Academy Sports + Outdoors, Caesars, Dell Technologies, Hard Rock International, the NFL, Raymour & Flanigan, Saks Fifth Avenue, Signet, Ulta and Victoria’s Secret, as well as small- and medium-sized businesses (SMBs). Our partner base is well diversified across a broad range of industries and retail verticals, including travel and entertainment, specialty apparel, health and beauty, jewelry, sporting goods, technology and electronics, as well as home and furniture. We believe our comprehensive suite of payment, lending and saving solutions, along with our related marketing and data and analytics, allows us to offer products relevant across all customer segments (Gen Z, Millennial, Gen X and Baby Boomers). The breadth and quality of our product and service offerings, coupled with our customer-centric approach, have enabled us to establish and maintain long-standing partner relationships. We operate our business through a single reportable segment, with our primary source of revenue being from Interest and fees on loans from our various credit card and other loan products, and to a lesser extent from contractual relationships with our brand partners.

Throughout this report, unless stated or the context implies otherwise, the terms “Bread Financial,” “BFH,” the “Company,” “we,” “our” or “us” refer to Bread Financial Holdings, Inc. and its subsidiaries on a consolidated basis. References to “Parent Company” refer to Bread Financial Holdings, Inc. on a parent-only standalone basis. In addition, in this report we may refer to the retailers and other companies with whom we do business as our “partners,” “brand partners,” or “clients,” provided that the use of the term “partner,” “partnering” or any similar term does not mean or imply a formal legal partnership, and is not meant in any way to alter the terms of Bread Financial’s relationship with any third parties. We offer our credit products through our insured depository institution subsidiaries, Comenity Bank and Comenity Capital Bank, which together are referred to herein as the “Banks.”

BASIS OF PRESENTATION

These unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 13, 2026 (the 2025 Form 10-K). If not significantly different, certain note disclosures included therein have been omitted from these unaudited Consolidated Financial Statements.

The unaudited Consolidated Financial Statements included herein reflect all adjustments, which consist of normal, recurring adjustments that are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The unaudited Consolidated Financial Statements also include amounts that relate to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. Such amounts have been classified within Discontinued operations and primarily relate to the after-tax impact of contractual indemnification and tax-related matters. For additional information about our previously disclosed discontinued operations please refer to Note 22, “Discontinued Operations and Bank Holding Company Financial Presentation” to the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. Results of operations reported for interim periods are not necessarily indicative of results for the

Table of Con tents

BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

entire year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosures of contingent assets and liabilities. These accounting estimates and assumptions reflect the best judgment of management, but actual results could differ. The most significant of those estimates and assumptions relate to the Allowance for credit losses and Goodwill.

The accompanying unaudited Consolidated Financial Statements include the accounts of the Company and all subsidiaries in which we have a controlling financial interest. All intercompany transactions have been eliminated.

SIGNIFICANT ACCOUNTING POLICIES

There have been no material changes to our significant accounting policies as discussed in Note 1, “Description of Business, Basis of Presentation and Significant Accounting Policies” included in our 2025 Form 10-K.

Table of Con tents

BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RECENTLY ISSUED ACCOUNTING STANDARDS






Accounting Standards Recently Adopted during 2026
Standard	Guidance	Timing and Financial Statement Impact
Debt – Debt with Conversion and Other Options: Induced Conversions of Convertible Debt Instruments Issued November, 2024	Improves the relevance and consistency in application of the induced conversion guidance for (a) convertible debt instruments with cash conversion features and (b) debt instruments that are not currently convertible.	Adopted January 1, 2026. Adoption had no impact on our financial reporting and will not have any impact in the near term as all of our Convertible Notes had been extinguished and no Convertible Notes remained outstanding as of December 31, 2025. Additionally, adoption did not have a significant impact on our operational processes, controls and governance in support of the new guidance.
Accounting Standards Recently Issued but Not Yet Adopted as of September 30, 2026
Standard	Guidance	Timing and Financial Statement Impact
Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses Issued November, 2024	Requires disaggregated disclosure within the notes to the Consolidated Financial Statements of certain income statement expenses on the face of the Consolidated Statements of Income, and further disaggregation of certain expense captions into specified categories.	Effective beginning with our Annual Report on Form 10-K for the year ending December 31, 2027, and effective for interim reporting periods beginning in 2028. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Intangibles – Goodwill and Other – Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software Issued September, 2025	Amends certain aspects of the accounting for and disclosure of internal-use software costs, including removing all references to prescriptive and sequential software development stages to align better with current software development methods, e.g., agile.	Effective January 1, 2028. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Financial Instruments – Credit Losses: Purchased Loans Issued November, 2025	Amends the accounting for acquired loans (excluding credit cards) that meet certain criteria at acquisition (referred to as purchased seasoned loans) by recognizing them at their purchase price plus an allowance for expected credit losses (i.e., the gross-up approach).	Effective January 1, 2027. Early adoption is permitted, although we do not plan to early adopt. Adoption is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.

2. CREDIT CARD AND OTHER LOANS

Our payment and lending solutions result in the origination of Credit card and other loans, which are recorded at the time a borrower enters into a point-of-sale transaction with a merchant. Credit card loans represent revolving lines of credit and have a range of terms that include credit limits, interest rates and fees, which can be revised over time based on new information about the cardholder, in accordance with applicable regulations and the governing terms and conditions. Cardholders choosing to make a payment of less than the full balance due, instead of paying in full, are subject to finance charges and are required to make monthly payments based on pre-established amounts. Other loans consist primarily of our pay-over-time products, which include installment loans and “split-pay” offerings, and have a range of fixed terms such as interest rates, fees and repayment periods, and require borrowers to make pre-established monthly payments over the term of the loan in accordance with the applicable terms and conditions. Credit card and other loans include principal and any related accrued interest and fees and are presented on the Consolidated Balance Sheets net of the Allowance for credit

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

losses. We continue to accrue interest and fee income on all accounts, except in limited circumstances, until the related balance and all related interest and fees are paid or charged-off.

We generally classify our Credit card and other loans as held for investment. We sell a majority of our credit card loans originated by Comenity Bank (CB) and by Comenity Capital Bank (CCB) to certain of our master securitization trusts (the Trusts), which are consolidated Variable Interest Entities (VIEs), and therefore these loans are restricted for securitization investors. New originations of Credit card and other loans are generally determined to be held for investment at origination because we have the intent and ability to hold them for the foreseeable future. In determining what constitutes the foreseeable future, we consider the average life and homogenous nature of our Credit card and other loans. In assessing whether our Credit card and other loans continue to be held for investment, we also consider capital levels and scheduled maturities of funding instruments used. The assertion regarding the intent and ability to hold Credit card and other loans for the foreseeable future can be made with a high degree of certainty given the maturity distribution of our consumer deposits and other funding instruments; the demonstrated ability to replace maturing time-based deposits and other borrowings with new deposits or borrowings; and historic payment activity on Credit card and other loans. Due to the homogenous nature of our credit card loans, amounts are classified as held for investment on a brand partner portfolio basis. Certain credit card loans and installment loans are classified as held for sale, as determined on a brand partner portfolio or program basis. We carry held for sale loans at the lower of aggregate cost or fair value, include such loans in Other assets on the Consolidated Balance Sheets, and typically continue to recognize finance charges on an accrual basis. Cash flows associated with Credit card and other loans originated or purchased for investment are classified as Cash flows from investing activities, regardless of any subsequent change in intent and ability. Cash flows associated with Credit card and other loans originated with the intent to sell are classified as Cash flows from operating activities, regardless of any subsequent change in intent. The disclosures below relate to our held for investment Credit card and other loans portfolios unless otherwise indicated.

The following table provides Credit card and other loans, as of the dates presented:


	September 30, 2026		December 31, 2025
(Millions)
Credit card loans	$	18,031			$	18,417
Other loans	819			388
Total credit card and other loans (1)(2)	18,850			18,805
Less: Allowance for credit losses	(2,096)			(2,106)
Credit card and other loans, net	$	16,754			$	16,699

__________________________________

(1)Includes $11.5 billion and $10.7 billion of Credit card and other loans available to settle obligations of consolidated VIEs as of September 30, 2026 and December 31, 2025, respectively.

(2)Includes $404 million and $378 million, of accrued interest and fees that have not yet been billed to cardholders as of September 30, 2026 and December 31, 2025, respectively.

Credit Card and Other Loans Aging

The following table provides the delinquency trends of our Credit card and other loans portfolio, based on the amortized cost, as of the dates presented:


	Aging Analysis of Delinquent Amortized Cost Credit Card and Other Loans (1)
	30 to 59 Days Past Due		60 to 89 Days Past Due	90 or more Days Past Due		Total	Total Current		Total
(Millions)
September 30, 2026	$	366		$	276		$	642		$	1,284	$	17,117	$	18,401

December 31, 2025	$	359		$	282		$	676		$	1,317	$	17,076	$	18,393

__________________________________

(1)Other loans delinquencies have been included with credit card loan delinquencies in the table above, as amounts were insignificant as of each period presented. As permitted by GAAP, the primary difference between the amortized cost basis included in the table

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above and the carrying value of our Credit card and other loans relates to the exclusion of unbilled finance charges and fees from the amortized cost basis. As of September 30, 2026 and December 31, 2025, accrued interest and fees that have not yet been billed to cardholders were $404 million and $378 million, respectively, included in Credit card and other loans on the Consolidated Balance Sheets.

From time to time we may re-age cardholders’ accounts, with the intent of assisting delinquent cardholders who have experienced financial difficulties but who demonstrate both an ability and willingness to repay the amounts due. This practice affects credit card loan delinquencies and principal losses. Accounts meeting specific defined criteria are re-aged when the cardholder makes one or more consecutive payments aggregating to a certain pre-defined amount of their account balance. Upon re-aging, the outstanding balance of a delinquent account is returned to current status. Our re-aged accounts as a percentage of Total credit card and other loans represented 2.8% and 2.9% for the three months ended September 30, 2026 and 2025, respectively, and 3.1% and 3.2% for the nine months ended September 30, 2026 and 2025, respectively. Our re-aging practices comply with regulatory guidelines.

Credit Quality Indicators for Our Credit Card and Other Loans

Given the nature of our business, the credit quality of our assets, in particular our Credit card and other loans, is a key determinant underlying our ongoing financial performance and overall financial condition. When it comes to our Credit card and other loans portfolio, we closely monitor Delinquency rates and Net principal loss rates, which reflect, among other factors, our underwriting, the inherent credit risk in our portfolio and the success of our collection and recovery efforts. These rates also reflect, more broadly, the general macroeconomic conditions, including the compounding effect of persistent inflation relative to wage growth, and higher interest rates. Our Delinquency rates and Net principal loss rates are also impacted by the size of our Credit card and other loans portfolio, which serves as the denominator in the calculation of these rates. Accordingly, changes in the size of our portfolio (whether due to credit tightening, acquisitions or dispositions of portfolios, or otherwise) may cause movements in our Delinquency and Net principal loss rates that are not necessarily indicative of the underlying credit quality of the overall portfolio.

Delinquencies: An account is contractually delinquent if we do not receive the minimum payment due by the specified due date. Our policy is to continue to accrue interest and fee income on all accounts, except in limited circumstances, until the balance and all related interest and fees are paid or charged-off. After an account becomes 30 days past due, a proprietary collection scoring algorithm automatically scores the risk of the account becoming further delinquent; based upon the level of risk indicated, a collection strategy is deployed, which may include tech-enabled, targeted collections strategies to engage with cardholders in the most efficient communication channel. If after exhausting all in-house collection efforts we are unable to collect on the account, we may engage collection agencies or outside attorneys to continue those efforts, or sell the charged-off balances.

The Delinquency rate is calculated by dividing outstanding principal balances that are contractually delinquent (i.e., principal balances 30 days past due or more) as of the end of the period, by the outstanding principal amount of Credit card and other loans as of the same period-end. As of September 30, 2026 and December 31, 2025 our Delinquency rates were 5.57% and 5.75%, respectively.

Net Principal Losses: Our net principal losses include the principal amount of Credit card and other loans that are deemed uncollectible, less recoveries, and exclude charged-off interest, fees and third-party fraud losses (including synthetic fraud). Charged-off interest and fees reduce Interest and fees on loans, while third-party fraud losses are recorded in Card and processing expenses. Our credit card loans, including unpaid interest and fees, are generally charged-off in the month during which an account becomes 180 days past due. Our pay-over-time products, which include installment loans and “split-pay” offerings, including unpaid interest, are generally charged-off when a loan becomes 120 days past due. However, in the case of a customer bankruptcy or death, Credit card and other loans, including unpaid interest and fees, as applicable, are charged-off 60 days after receipt of the notification of the bankruptcy or death, but in any case no later than 180 days past due for credit card loans and 120 days past due for installment loans and “split-pay” offerings. We record the actual losses for unpaid interest and fees as a reduction to Interest and fees on loans, which were $207 million and $212 million for the three months ended September 30, 2026 and 2025, respectively, and $648 million and $698 million for the nine months ended September 30, 2026 and 2025, respectively.

The Net principal loss rate is calculated by dividing net principal losses for the period by the Average credit card and other loans for the same period, using an average daily balance calculation methodology. For the three months ended

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September 30, 2026 and 2025, our Net principal loss rates were 6.40% and 7.39%, respectively, and for the nine months ended September 30, 2026 and 2025, respectively, our Net principal loss rates were 6.90% and 7.81%, respectively.

Overall Credit Quality: As part of our credit risk management activities for our Credit card and other loans portfolio, we assess overall credit quality by reviewing information from credit bureaus and other sources relating to our cardholders’ broader credit performance. We utilize VantageScore (Vantage) credit scores to assist in our assessment of credit quality. Vantage credit scores are obtained at origination of the account and, for credit card loans, are refreshed monthly thereafter to assist in predicting customer behavior. We categorize these Vantage credit scores into the following three credit score ranges: (i) 651 or higher have the lowest credit risk; (ii) 591 to 650 are considered to have moderate credit risk; and (iii) 590 or lower have the highest credit risk. In certain limited circumstances there are customer accounts for which a Vantage score is not available and we use alternative sources to assess credit risk and predict behavior. The table below excludes less than 0.1% of the total credit card loans and total other loans balances as of both September 30, 2026 and December 31, 2025, representing those customer accounts for which a Vantage credit score is not available. The following table reflects the distribution of credit card and other loans by Vantage score as of the dates presented:


	September 30, 2026		December 31, 2025
	651 or Higher		591 to 650		590 or Lower	651 or Higher		591 to 650		590 or Lower
Credit card loans	64	%		24	%	12	%		64	%	23	%	13	%
Other loans (1)	96	%		4	%	—	%		90	%	9	%	1	%

__________________________________

(1)Represents Vantage score distribution for our pay-over-time products that had an amortized cost basis of $787 million and $365 million as of September 30, 2026 and December 31, 2025, respectively.

Modified Credit Card Loans

Consumer Relief Programs

As part of our collections strategy, we may offer temporary and short term programs in order to improve the likelihood of collections and meet the needs of our customers. Our modifications, for customers who have requested assistance and meet certain qualifying requirements, come in the form of reduced payment requirements, interest rate reductions and late fee waivers. We do not offer programs involving the forgiveness of principal. These temporary loan modifications may assist in cases where we believe the customer will recover from the short-term hardship and resume scheduled payments. Under these consumer relief programs, those accounts receiving relief may not advance to the next delinquency cycle, including charge-off, in the same time frame that would have occurred had the relief not been granted. We evaluate our consumer relief programs to determine if they represent a more than insignificant delay in payment granted to borrowers experiencing financial difficulty, in which case they would then be considered a Loan Modification. Loans in these short term programs that are determined to be Loan Modifications, will be included as such in the disclosure below. We do not offer Loan Modifications on our Other loans (i.e., our pay-over-time products).

Credit Card Loans – Modifications for Borrowers Experiencing Financial Difficulty (Loan Modifications)

In instances where cardholders are experiencing financial difficulty, we may modify our credit card loans with the intention of minimizing losses and improving collectability, while providing cardholders with financial relief; such credit card loans are classified as Loan Modifications, exclusive of the temporary, short-term consumer relief programs described above. Loan Modifications include concessions consisting primarily of a reduced minimum payment, late fee waiver, and/or an interest rate reduction. The majority of concessions remain in place for a period no longer than 12 months; however, for certain modifications the concessions remain in place through the payoff of the credit card loans if the cardholder complies with the terms of the program.

Loan Modification concessions do not include the forgiveness of unpaid principal, but may involve the reversal of certain unpaid interest or fee assessments, and the cardholder’s ability to make future purchases is either limited or suspended until the cardholder successfully exits from the modification program. In accordance with the terms of our workout programs, the credit agreement reverts back to its original contractual terms (including the contractual interest rate) when the

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customer exits the program, which is either when all payments have been made in accordance with the program, or when the customer defaults out of the program.

Loan Modifications are collectively evaluated for impairment on a pooled basis in measuring the appropriate Allowance for credit losses. The following table provides information relating to credit card loans to borrowers experiencing financial difficulty that were granted a concession under a Loan Modification program during the periods presented:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026		2025		2026		2025
(Millions, except percentages)
Account balance (1)	$	90			$	100			$	251		$	258
% of Total credit card loans	0.5	%		0.6	%		1.4	%		1.5	%
Weighted average interest rate reduction (% points)	23.9	%		23.2	%		23.9	%		23.1	%

__________________________________

(1)Represents the outstanding balances as of September 30, 2026 and 2025, of all Loan Modifications undertaken in the past three and nine months, respectively, for credit card loans that remain in modification programs as of September 30, 2026 and 2025, respectively. The outstanding balances include principal, accrued interest and fees.

Interest income on these impaired credit card loans is accounted for in the same manner as non-impaired credit card loans, and cash collections are allocated according to the same payment hierarchy methodology applied for credit card loans not in Loan Modification programs.

The following table provides the performance of our credit card loans that were modified within the 12 months prior to the dates presented and remain in a Loan Modification program as of the dates presented:


	Aging Analysis of Delinquent Amortized Cost Loan Modifications - Credit Card Loans
	30 to 59 Days Past Due		60 to 89 Days Past Due	90 or more Days Past Due		Total	Total Current		Total
(Millions)
September 30, 2026	$	20		$	18		$	20		$	58	$	251	$	309

December 31, 2025	$	24		$	22		$	26		$	72	$	253	$	325

The following table provides additional information regarding credit card Loan Modifications that have subsequently defaulted within 12 months of their modification dates, for the periods presented; the probability of default is factored into the Allowance for credit losses:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026		2025		2026		2025
(Millions, except for Number of modifications)
Number of modifications	6,764			7,124			14,419		14,099
Outstanding balance	$	14			$	15		$	29	$	29

Unfunded Lending Commitments

We manage potential credit risk in unfunded lending commitments by reviewing each potential customer’s credit application and evaluating the applicant’s financial history and ability and perceived willingness to repay. Credit card loans are made primarily on an unsecured basis, and our Cardholders reside throughout the U.S. and are not significantly concentrated in any one geographic area.

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We manage our potential risk in credit commitments by limiting the total amount of credit, both by individual customer and across our credit card loan portfolio, by monitoring the size and maturity of our loan portfolio and applying consistent risk-based underwriting standards reflective of current and anticipated macroeconomic conditions. We have the unilateral ability to cancel or reduce unused credit card lines at any time. Unused credit card lines available to cardholders totaled approximately $97 billion and $98 billion as of September 30, 2026 and December 31, 2025, respectively. While this amount represented the total available unused credit card lines, we have not experienced and do not anticipate that all cardholders will access their entire available line at any given point in time.

Credit Card Loan Portfolio and Installment Loan Sales

As of September 30, 2026 and December 31, 2025, there were no credit card loans held for sale.

In the interest of expanding and diversifying our product offerings, we are now leveraging our loan origination, compliance and servicing-related capabilities through a partnership that relies upon established merchant networks to originate and sell installment loans, while providing compliance oversight. Installment loans sold under this program meet the conditions for sale accounting and are derecognized upon transfer. For the three and nine months ended September 30, 2026, fees earned under this program were insignificant. Over those same respective periods in 2025, we did not earn any such fees as this was a new program in 2026. As of September 30, 2026, installment loans held for sale are included in Other assets on the Consolidated Balance Sheet and were insignificant. As of December 31, 2025, there were no installment loans held for sale.

Credit Card Loan Portfolio Acquisitions

During the three months ended September 30, 2026 and September 30, 2025, we did not acquire any credit card loan portfolios.

3. ALLOWANCE FOR CREDIT LOSSES

The Allowance for credit losses represents our estimate of expected credit losses over the estimated life of our Credit card and other loans, incorporating future macroeconomic forecasts in addition to information about past events and current conditions. Our estimate under the Current Expected Credit Loss (CECL) approach is significantly influenced by the composition, characteristics and quality of our portfolio of Credit card and other loans, as well as the prevailing economic conditions and forecasts utilized. The Allowance for credit losses includes an estimate for uncollectible principal as well as billed, unpaid interest and fees. Principal losses, net of recoveries are deducted from the Allowance for credit losses. Losses of unpaid interest and fees are recorded as a reduction to Interest and fees on loans upon charge-off. The Allowance for credit losses is maintained through an adjustment to the Provision for credit losses and is evaluated for appropriateness on a quarterly basis.

In estimating our Allowance for credit losses, for each identified segment of loans sharing similar risk characteristics, management uses modeling and estimation techniques based on historical loss experience, current conditions, reasonable and supportable forecasts and other relevant factors. This modeling uses historical data and applicable macroeconomic variables with statistical analysis and behavioral relationships, to determine expected credit performance. Our quantitative estimate of expected credit losses under CECL is impacted by certain forecasted macroeconomic variables. We consider the macroeconomic forecast used to be reasonable and supportable over the estimated life of the Credit card and other loans portfolio, with no reversion period. In addition to the quantitative estimate of expected credit losses, we also incorporate qualitative adjustments for certain factors such as Company-specific risks, changes in current macroeconomic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the Allowance for credit losses reflects our best estimate of current expected credit losses.

Credit Card Loans

We use a “pooled” approach to estimate expected credit losses for financial assets with similar risk characteristics. We have evaluated multiple risk characteristics across our credit card loans portfolio, and determined delinquency status and overall credit quality to be the most significant characteristics for estimating expected credit losses. To estimate our Allowance for credit losses, we segment our credit card loans on the basis of delinquency status, credit quality risk score and product. These risk characteristics are evaluated on at least an annual basis, or more frequently as facts and

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circumstances warrant. In determining the estimated life of our credit card loans, payments were applied to the measurement date balance with no payments allocated to future purchase activity. We use a combination of First In First Out and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD Act) methodologies to model balance paydown.

Other Loans

We measure our Allowance for credit losses on Other loans, consisting primarily of our installment loans and “split-pay” offerings, using a statistical model to estimate projected losses over the remaining terms of the loans, inclusive of an assumption for prepayments where material. The model is based on the historical statistical relationship between loan loss performance and certain macroeconomic data pooled based on credit quality risk score, term of the underlying loans, vintage and geographic location. As of September 30, 2026 and December 31, 2025, the Allowance for credit losses on Other loans was $53 million and $26 million, respectively.

Allowance for Credit Losses Rollforward

The following table provides our Allowance for credit losses for our Credit card and other loans. The amount of the related Allowance for credit losses on other loans is insignificant and therefore has been included in the table below for the periods presented:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026		2025		2026		2025
(Millions)
Beginning balance	$	2,075			$	2,098		$	2,106	$	2,241

Provision for credit losses (1)	321			299			937		869

Net principal losses (2)	(300)			(327)			(947)		(1,040)
Ending balance	$	2,096			$	2,070		$	2,096	$	2,070

__________________________________

(1)Provision for credit losses includes a build/release for the Allowance for credit losses, as well as replenishment of Net principal losses. Beginning on January 1, 2026 any changes in the estimate for uncollectible unpaid interest and fees is recognized as part of the Provision for credit losses; previously such changes were recognized as part of Interest and fees on loans.

(2)Net principal losses are presented net of recoveries of $79 million and $82 million for the three months ended September 30, 2026 and 2025, respectively, and $253 million and $267 million for the nine months ended September 30, 2026 and 2025, respectively.

For the three months ended September 30, 2026 the balance of the Allowance for credit losses slightly increased primarily due to the increase in Credit card and other loans, partially offset by a lower reserve rate. Our reserve rate was 11.12% and 11.23% as of September 30, 2026 and June 30, 2026, respectively. For the nine months ended September 30, 2026, the balance of the Allowance for credit losses slightly decreased due to the decrease in the reserve rate from 11.20% at December 31, 2025. The reductions in the reserve rates across both periods of comparison are reflecting our improving credit metrics and higher-quality new account acquisitions. We continue to maintain appropriately prudent weightings on the economic scenarios in our credit reserve modeling to ensure the adequacy of our Allowance for credit losses given the wide range of potential macroeconomic outcomes, including ongoing uncertainty regarding trade policy and global conflicts, and downstream impacts on inflation and unemployment.

4. SECURITIZATIONS

We account for transfers of financial assets as either sales or financings. Transfers of financial assets that are accounted for as a sale are removed from the Consolidated Balance Sheets with any realized gain or loss reflected in the Consolidated Statements of Income during the period in which the sale occurs. Transfers of financial assets that are not accounted for as a sale are treated as a financing.

We regularly securitize a majority of our credit card loans through the transfer of those loans to one of our Trusts. We perform the decision making for the Trusts, as well as servicing the cardholder accounts that generate the credit card loans

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held by the Trusts. In our capacity as a servicer, we administer the loans, collect payments and charge-off uncollectible balances. Servicing fees are earned by a subsidiary, which are eliminated in consolidation.

The Trusts are consolidated VIEs because they have insufficient equity at risk to finance their activities – the issuance of debt securities and notes, collateralized by the underlying credit card loans. Because we perform the decision making and servicing for the Trusts, we have the power to direct the activities that most significantly impact the Trusts’ economic performance (the collection of the underlying credit card loans). In addition, we hold all of the variable interests in the Trusts, with the exception of the liabilities held by third-parties. These variable interests provide us with the right to receive benefits and the obligation to absorb losses, which could be significant to the Trusts. As a result of these considerations, we are deemed to be the primary beneficiary of the Trusts and therefore consolidate the Trusts.

The Trusts issue debt securities and notes, which are non-recourse to us. The collections on the securitized credit card loans held by the Trusts are available only for payment of those debt securities and notes, or other obligations arising in the securitization transactions. For our securitized credit card loans, during the initial phase of a securitization reinvestment period, we generally retain principal collections in exchange for the transfer of additional credit card loans into the securitized pool of assets. During the amortization or accumulation period of a securitization, the investors’ share of principal collections (in certain cases, up to a maximum specified amount each month) is either distributed to the investors or held in an account until it accumulates to the total amount due, at which time it is paid to the investors in a lump sum.

Under the Indentures of each Trust and their Indenture Supplements, we are required to maintain minimum interests in our Trusts ranging from 4% to 8% of the securitized credit card loans. This requirement is met through a transferor’s interest and is supplemented through excess funding deposits which represent cash amounts deposited with the trustee of the securitizations. Cash collateral, restricted deposits are generally released proportionately as investors are repaid. Under the terms of the Trusts, the occurrence of certain triggering events associated with the performance of the securitized credit card loans in each Trust could result in certain required actions, including payment of Trust expenses, the establishment of reserve funds, or early amortization of the debt securities and/or notes, in a worst-case scenario. During the three and nine months ended September 30, 2026 and 2025, no such triggering events occurred.

The following tables provide the total securitized credit card loans, and related delinquencies and net principal losses of securitized credit card loans, for the periods presented:


	September 30, 2026		December 31, 2025
(Millions)
Total credit card loans – available to settle obligations of consolidated VIEs	$	11,489		$	10,708
Of which: principal amount of credit card loans 90 days or more past due	$	152		$	257


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026		2025	2026		2025
(Millions)
Net principal losses of securitized credit card loans	$	139		$	192		$	474	$	609

5. INVESTMENTS

Investments include investment securities and various other investments primarily held by the Banks for Community Reinvestment Act (CRA) purposes. Investment securities consist of available-for-sale (AFS) debt securities, which are mortgage-backed securities and municipal bonds, and equity securities, which are mutual funds. Investment securities are carried at fair value on the Consolidated Balance Sheets. We also have other investments, which primarily include a portfolio of investments in certain limited partnerships and limited liability companies accounted for under the equity method, and therefore are recorded at cost and adjusted each period for our share of the investee’s earnings or losses, less any impairment. Other investments also includes an insignificant tax credit investment where we elected to apply the proportional amortization method of accounting, for which the impacts of both the amortization of the investment and income tax benefits are fully recognized in the Provision for income taxes. Refer to Note 8, “Fair Values of Financial Instruments” for a description of our methodology for determining the fair values of our investment securities.

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The following table provides a summary of our Investments as of the dates presented:


	September 30, 2026		December 31, 2025
(Millions)
Investment securities
Available-for-sale debt securities	$	152			$	171
Equity securities	49			50
Total investment securities	201			221
Equity method and other investments	78			63
Total Investments	$	279			$	284

For AFS debt securities in an unrealized loss position, any estimated credit losses are recognized in the Consolidated Statements of Income by establishing or adjusting an existing Allowance for credit losses for such losses. We typically invest in highly-rated securities with low probabilities of default; therefore, we did not have an Allowance for credit losses as of September 30, 2026 and December 31, 2025, and did not recognize any credit losses for the periods presented. Any unrealized gains, or any portion of an AFS debt security’s non-credit-related unrealized losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax. The gross unrealized losses on our AFS debt securities are primarily attributable to an increase in the current benchmark interest rate. Any realized gains and losses are recorded in Other non-interest expenses in the Consolidated Statements of Income upon disposition of the AFS debt security, using the specific identification method. Gains and losses on investments in equity securities and CRA-related equity method investments are recorded in Other non-interest expenses in the Consolidated Statements of Income.

The table below provides unrealized gains and losses on AFS debt securities as of the dates presented:


	September 30, 2026		December 31, 2025
	Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value	Amortized Cost		Unrealized Gains	Unrealized Losses		Fair Value
(Millions)
Available-for-sale securities	$	180		$	—		$	(28)		$	152		$	189	$	—	$	(18)	$	171
Total	$	180		$	—		$	(28)		$	152		$	189	$	—	$	(18)	$	171

The following tables provide information about AFS debt securities in a gross unrealized loss position and the length of time that individual securities have been in a continuous unrealized loss position, as of the dates presented:


	September 30, 2026
	Less than 12 months		12 Months or Greater	Total
	Fair Value		Unrealized Losses	Fair Value		Unrealized Losses	Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	41		$	(2)		$	111		$	(26)	$	152	$	(28)
Total	$	41		$	(2)		$	111		$	(26)	$	152	$	(28)


	December 31, 2025
	Less than 12 months		12 Months or Greater	Total
	Fair Value		Unrealized Losses	Fair Value		Unrealized Losses	Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	—		$	—		$	135		$	(18)	$	135	$	(18)
Total	$	—		$	—		$	135		$	(18)	$	135	$	(18)

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

As of September 30, 2026 our AFS debt securities included mortgage-backed securities and municipal bonds. The mortgage-backed securities, which do not have a single maturity date, have an amortized cost and estimated fair value of $152 million and $128 million, respectively, with a weighted average yield of 3.24%. The municipal bonds which all have a maturity date greater than ten years, have an amortized cost and estimated fair value of $28 million and $24 million, respectively, with a weighted average yield of 3.82%. Weighted average yield is computed using the effective yield of each security owned at the end of the period, weighted based on the amortized cost of each security. The effective yield considers the contractual coupon, amortization of premiums and accretion of discounts. Accrued interest on our AFS debt securities is included in Other assets on the Consolidated Balance Sheets and was insignificant as of both September 30, 2026 and December 31, 2025.

There were no realized gains or losses from the sale of any investment securities for the three and nine months ended September 30, 2026 and 2025.

6. DEPOSITS

Deposits were categorized as interest-bearing or non-interest-bearing as follows, as of the dates presented:


	September 30, 2026		December 31, 2025
(Millions)
Interest-bearing	$	15,479			$	13,891
Non-interest-bearing (including cardholder credit balances)	23			25
Total deposits	$	15,502			$	13,916

Deposits by deposit type were as follows as of the dates presented:


	September 30, 2026		December 31, 2025
(Millions)
Savings accounts
Consumer deposits	$	5,234			$	4,329
Wholesale	3,729			3,371
Certificates of deposit
Consumer deposits	4,666			4,194
Wholesale	1,850			1,997
Cardholder credit balances	23			25
Total deposits	$	15,502			$	13,916

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The scheduled maturities of certificates of deposit were as follows as of September 30, 2026:


(Millions)
2026 (1)	$	1,052
2027	4,152
2028	1,102
2029	103
2030	68
Thereafter	38
Total certificates of deposit	$	6,515

__________________________________

(1)The 2026 balance includes $3 million in unamortized debt issuance costs, which are associated with the entire portfolio of certificates of deposit.

7. OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

The following table provides the components of Other non-interest income for the periods presented:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026		2025		2026		2025
(Millions)
Payment protection products	$	46			$	29		$	124	$	85
Paper statement fees	20			21			62		58
Other	—			—			1		5
Total other non-interest income	$	66			$	50		$	187	$	148

The following table provides the components of Other non-interest expenses for the periods presented:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026		2025		2026		2025
(Millions)
Professional services and regulatory fees	$	27			$	26		83		82
Occupancy expense	5			6			14		16
Debt repurchases	1			3			3		19
Other (1)	10			8			26		27
Total other non-interest expenses	$	43			$	43		$	126		$	144

__________________________________

(1)Primarily related to costs associated with various other individually insignificant operating activities.

8. FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair value is defined under GAAP as the price that would be required to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; with such a transaction based on the principal market, or in the absence of a principal market the most advantageous market for the specific instrument. GAAP provides

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

for a three-level fair value hierarchy that classifies the inputs to valuation techniques used to measure fair value, defined as follows:

Level 1: Inputs that are unadjusted quoted prices for identical assets or liabilities in active markets that the entity can access.

Level 2: Inputs, other than those included within Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, or inputs other than quoted prices that are observable for the asset or liability.

Level 3: Inputs that are unobservable (e.g., internally derived assumptions) and reflect an entity’s assumptions about estimates market participants would use in pricing the asset or liability based on the best information available under the circumstances. In particular, Level 3 inputs and valuation techniques involve judgment and as a result are not necessarily indicative of amounts we would realize in a current market exchange. The use of different assumptions or estimation techniques may have a material effect on the estimated fair value amounts.

We monitor the market conditions and evaluate the fair value hierarchy levels at least quarterly. For the three and nine months ended September 30, 2026 and 2025, there were no transfers into or out of Level 3, and no transfers between Levels 1 and 2.

The following table summarizes the carrying values and fair values of our financial assets and financial liabilities as of the dates presented:


	September 30, 2026		December 31, 2025
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Millions)
Financial assets
Credit card and other loans, net	$	16,754			$	18,466		$	16,699	$	18,747
Investment securities	201			201			221		221
Financial liabilities
Deposits	15,502			15,480			13,916		13,928
Debt issued by consolidated VIEs	2,320			2,322			3,422		3,442
Long-term and other debt	$	814			$	827		$	886	$	931

Valuation Techniques Used in the Fair Value Measurement of Financial Assets and Financial Liabilities

Credit card and other loans, net: Our Credit card and other loans are recorded at amortized cost, less the Allowance for credit losses, on the Consolidated Balance Sheets. In estimating the fair values, we use a discounted cash flow model (i.e., Level 3 inputs), primarily because a comparable whole loan sales market for similar loans does not exist, and therefore there is a lack of observable pricing inputs. We use various internally derived inputs, including projected income, discount rates and forecasted charge-offs. Economic value attributable to future loans generated by the cardholder accounts is not included in the fair values.

Investment securities: Investment securities consist of AFS debt securities, including both mortgage-backed securities and municipal bonds, as well as equity securities, which are mutual funds, and are recorded at fair value on the Consolidated Balance Sheets. Quoted prices of identical or similar investment securities in active markets are used to estimate the fair values (i.e., Level 1 or Level 2 inputs).

Derivative assets and liabilities: We use derivatives to manage our interest rate and foreign currency risk exposures. When quoted market prices are available and used to value our derivatives, we classify them as Level 1. However, the majority of our derivatives do not have readily available quoted market prices. Therefore, we value most of our derivatives using vendor-based models. We primarily rely on market observable inputs for these models, including, for example, interest rate

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

yield curves and currency rates. These inputs can vary depending on the type of derivatives and nature of the underlying rate, price or index upon which the value of the derivative is based. We typically classify derivatives as Level 2 as significant inputs can be observed in a liquid market and the underlying model itself does not require significant judgment. At least annually, we reaffirm our understanding of the valuation techniques applied in our vendor-based models and validate the valuation output on a quarterly basis. Our derivatives are included in Other assets or Other liabilities on the Consolidated Balance Sheets. The fair value impacts of our derivative assets and liabilities were insignificant to the Consolidated Financial Statements for the periods presented on both a gross basis and, where applicable, a net basis.

Deposits: Money market and other non-maturity deposits carrying values approximate their fair values because they are short-term in duration and have no defined maturity. GAAP requires that the fair values of deposit liabilities with no stated maturities equal their carrying values and does not permit recognition of the inherent funding value of the instruments. Certificates of deposit are recorded at their historical issuance cost on the Consolidated Balance Sheets, adjusted for unamortized fees, with the fair value being estimated based on the currently observable market rates available to us for similar deposits with similar remaining maturities (i.e., Level 2 inputs). Interest payable is included within Other liabilities on the Consolidated Balance Sheets.

Debt issued by consolidated VIEs: We record Debt issued by our consolidated VIEs at amortized cost (including unamortized fees, issuance costs, premiums and discounts, where applicable) on the Consolidated Balance Sheets. Fair value is estimated based on the currently observable market rates available to us for similar debt instruments with similar remaining maturities or quoted market prices for the same transaction (i.e., Level 2 inputs). Interest payable is included within Other liabilities on the Consolidated Balance Sheets.

Long-term and other debt: We record Long-term and other debt at amortized cost (including unamortized fees, issuance costs, premiums and discounts, where applicable) on the Consolidated Balance Sheets. Fair value is estimated based on the currently observable market rates available to us for similar debt instruments with similar remaining maturities, or quoted market prices for the same transaction (i.e., Level 2 inputs). Interest payable is included within Other liabilities on the Consolidated Balance Sheets.

Financial Instruments Measured at Fair Value on a Recurring Basis

The following tables summarize our financial instruments measured at fair value on a recurring basis, categorized by the fair value hierarchy described in the preceding paragraphs, as of the dates presented:


	September 30, 2026
	Total		Level 1	Level 2		Level 3
(Millions)
Investment securities	$	201		$	49		$	152	$	—
Total assets measured at fair value	$	201		$	49		$	152	$	—


	December 31, 2025
	Total		Level 1	Level 2		Level 3
(Millions)
Investment securities	$	221		$	50		$	171	$	—
Total assets measured at fair value	$	221		$	50		$	171	$	—

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including equity method investments, property and equipment, right-of-use assets, deferred contract costs, goodwill and intangible assets. These assets are not measured at fair value on a recurring basis but are subject to fair value adjustments in certain circumstances, such as upon impairment. We did not have any impairments for the three and nine months ended September 30, 2026 and 2025.

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Financial Instruments Disclosed but Not Carried at Fair Value

The fair values of financial instruments that are measured at amortized cost are estimates, and require management’s judgment; therefore, these fair value estimates may not be indicative of future fair values, nor can our fair value be estimated by aggregating all of the amounts presented. The following tables summarize our financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of the dates presented:


	September 30, 2026
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets
Credit card and other loans, net	$	18,466			$	—		$	—	$	18,466
Total	$	18,466			$	—		$	—	$	18,466

Financial liabilities
Deposits	$	15,480			$	—		$	15,480	$	—
Debt issued by consolidated VIEs	2,322			—			2,322		—
Long-term and other debt	827			—			827		—
Total	$	18,629			$	—		$	18,629	$	—


	December 31, 2025
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets
Credit card and other loans, net	$	18,747			$	—		$	—	$	18,747
Total	$	18,747			$	—		$	—	$	18,747

Financial liabilities
Deposits	$	13,928			$	—		$	13,928	$	—
Debt issued by consolidated VIEs	3,442			—			3,442		—
Long-term and other debt	931			—			931		—
Total	$	18,301			$	—		$	18,301	$	—

9. STOCK-BASED COMPENSATION

During the nine months ended September 30, 2026, we awarded 649,304 service-based restricted stock units (RSUs) with a weighted average grant date fair market value per share of $73.80 as determined on the date of grant. Service-based restricted stock units typically vest ratably over three years provided that the participant is employed by us on each such vesting date, subject to certain limited exceptions.

During the nine months ended September 30, 2026, we awarded 169,462 performance-based RSUs with a fair market value of approximately $73.16. Performance-based RSUs cliff vest at the end of three years, if specific performance measures tied to our financial performance are met. For the performance-based RSUs awarded in 2026, the predefined vesting criteria permit a range from 0% to 160% to be earned, subject to a market-based condition. Accruals of compensation cost for an award with a performance condition are based on the probable outcome of that performance condition. If the performance targets are met, these awards will vest with respect to the entire award on February 17, 2029, provided that the participant is employed by us on the vesting date, subject to certain limited exceptions.

For the three months ended September 30, 2026 and 2025, we recognized $15 million and $14 million in stock-based compensation expense, respectively. For the nine months ended September 30, 2026 and 2025, we recognized $46 million and $41 million in stock-based compensation expense, respectively.

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. PREFERRED STOCK AND COMMON STOCK

Preferred Stock

The following table provides information about our preferred stock issued and outstanding as of the dates presented:


			Per Annum Dividend Rate						Carrying Amount
Series (1)	Issuance Date	Earliest Redemption Date			Total Shares	Liquidation Preference		September 30, 2026		December 31, 2025
(Millions, except share amounts)
Series A	November 25, 2025	December 15, 2030	8.625	%		75,000			$	75			$	72			$	71
Series B	May 12, 2026	December 15, 2031	8.875	%		135,000			135			130			—
Total							$	210			$	202			$	71

______________________________

Stock Repurchase Authorizations

The following table provides information about our common stock repurchases under our various Board-approved share repurchase authorizations, for the periods presented:


(Millions)	Amount Authorized for Repurchase		Number of Shares Repurchased (1)	Approximate Dollar Value of Shares Repurchased (2)	Amount Remaining for Future Repurchases
As of December 31, 2025					$	240
For the three months ended:
March 31, 2026	$	600		2.0	$	150	$	690
June 30, 2026	—		2.8	241		449
September 30, 2026	—		0.7	75		374

Total	$	600		5.5	$	466

______________________________

(2)Excludes excise taxes on stock repurchases.

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Capped Call Transactions

Dividends

The table below summarizes the cash dividend activity we had on our preferred and common stock for the dates presented:


(Millions, except per share amounts)	Preferred Stock - Series A	Preferred Stock - Series B		Common Stock
Dividend Declaration Date	Dividend Payment Date	Amount Per Share		Amount		Amount Per Share		Amount		Amount Per Share		Amount (1)
January 29, 2026	March 16, 2026	$	26.35			$	2			$	—			$	—			$	0.23		$	10
April 23, 2026	June 15, 2026	$	21.56			2			$	—			—			$	0.23			9
July 23, 2026	September 15, 2026	$	21.56			2			$	30.32			4			$	0.23			10

				$	6					$	4					$	29


(Millions, except per share amounts)	Preferred Stock - Series A	Preferred Stock - Series B		Common Stock
Dividend Declaration Date	Dividend Payment Date	Amount Per Share		Amount		Amount Per Share		Amount		Amount Per Share		Amount (1)
January 30, 2025	March 21, 2025	$	—			$	—			$	—			$	—			$	0.21		$	10
April 24, 2025	June 13, 2025	$	—			—			$	—			—			$	0.21			10
July 24, 2025	September 12, 2025	$	—			—			$	—			—			$	0.21			10

				$	—					$	—					$	30

______________________________

(1)Excludes dividend equivalent rights paid during the period.

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in each component of Accumulated other comprehensive loss, net of tax effects, are as follows for the periods presented:


Three Months Ended September 30, 2026	Net Unrealized Losses on AFS Securities		Net Unrealized Gains on Cash Flow Hedges				Foreign Currency Translation Adjustments	Accumulated Other Comprehensive Loss
(Millions)
Balance as of June 30, 2026	$	(15)			$	1			$	(3)	$	(17)
Changes in other comprehensive loss	(8)			—				—		(8)
Balance as of September 30, 2026	$	(23)			$	1			$	(3)	$	(25)


Three Months Ended September 30, 2025	Net Unrealized Losses on AFS Securities		Net Unrealized Gains on Cash Flow Hedges				Foreign Currency Translation Adjustments	Accumulated Other Comprehensive Loss
(Millions)
Balance as of June 30, 2025	$	(17)			$	1			$	(3)	$	(19)
Changes in other comprehensive income	3			—				—		3
Balance as of September 30, 2025	$	(14)			$	1			$	(3)	$	(16)


Nine Months Ended September 30, 2026	Net Unrealized Losses on AFS Securities		Net Unrealized Gains on Cash Flow Hedges				Foreign Currency Translation Adjustments	Accumulated Other Comprehensive Loss
(Millions)
Balance as of December 31, 2025	$	(14)			$	1			$	(3)	$	(16)
Changes in other comprehensive loss	(9)			—				—		(9)
Balance as of September 30, 2026	$	(23)			$	1			$	(3)	$	(25)


Nine Months Ended September 30, 2025	Net Unrealized Losses on AFS Securities		Net Unrealized Gains on Cash Flow Hedges				Foreign Currency Translation Adjustments	Accumulated Other Comprehensive Loss
(Millions)
Balance as of December 31, 2024	$	(19)			$	—			$	(3)	$	(22)
Changes in other comprehensive income	5			1				—		6
Balance as of September 30, 2025	$	(14)			$	1			$	(3)	$	(16)

12. INCOME TAXES

The Provision for income taxes increased for the three and nine months ended September 30, 2026. The effective tax rate was 25.5% and 4.3% for the three months ended September 30, 2026 and 2025, respectively, and 25.5% and 17.5% for the nine months ended September 30, 2026 and 2025, respectively. Both the increases in the Provision for income taxes and in the effective tax rates over the periods of comparison were primarily attributable to a discrete tax benefit in the prior year.

We file income tax returns in U.S. federal, state, local and foreign jurisdictions, as applicable. With a few exceptions, U.S. federal income tax returns and foreign income tax returns are no longer subject to examination for years before 2022, and state and local income tax returns are no longer subject to examination for years before 2021.

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. EARNINGS PER COMMON SHARE

Basic earnings per share (EPS) is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Net income available to common stockholders reflects the deduction of dividends declared on our preferred stock. Diluted EPS reflects the assumed conversion of unvested restricted stock awards pursuant to the Treasury Stock method.

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the periods presented:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026		2025		2026		2025
(Millions, except per share amounts)
Numerator
Income from continuing operations	$	156			$	188		$	483		$	468
Loss from discontinued operations, net of income taxes (1)	—			—			—		(4)
Net income	156			188			483		$	464
Less: Preferred stock dividends	(6)			—			(10)		—
Net income available to common stockholders	$	150			$	188		$	473		$	464

Denominator
Weighted average common stock outstanding – basic	38.3			46.5			40.3		47.4

Add: net effect of dilutive unvested restricted stock awards (2)	1.0			1.0			0.7		0.7

Weighted average common stock outstanding – diluted	39.3			47.5			41.0		48.1

Basic EPS
Income from continuing operations	$	3.91			$	4.04		$	11.75		$	9.88
Loss from discontinued operations	$	—			$	—		$	—		$	(0.09)
Net income per share	$	3.91			$	4.04		$	11.75		$	9.79

Diluted EPS
Income from continuing operations	$	3.82			$	3.96		$	11.54		$	9.74
Loss from discontinued operations	$	—			$	—		$	—		$	(0.09)
Net income per share	$	3.82			$	3.96		$	11.54		$	9.65

__________________________________

(2)As the effect would have been anti-dilutive, for the nine months ended September 30, 2025, approximately 0.5 million restricted stock awards were excluded from the calculation of weighted average dilutive common shares. There were no anti-dilutive restricted stock awards for the three and nine months ended September 30, 2026; similarly, there were no anti-dilutive restricted stock awards for the three months ended September 30, 2025.

14. REGULATORY MATTERS AND CAPITAL ADEQUACY

Regulatory Matters

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

future laws and regulations (federal and state) may adversely impact our business. Without limiting the foregoing, CB is subject to various regulatory capital requirements administered by the Delaware Office of the State Bank Commissioner and the FDIC. CCB is also subject to various regulatory capital requirements administered by the Utah Department of Financial Institutions and the FDIC. Failure to meet minimum capital requirements can trigger certain mandatory and possibly additional discretionary actions by our regulators. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, both Banks must meet specific capital guidelines that involve quantitative measures of their assets and liabilities as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by these regulators about components, risk weightings and other factors. In addition, both Banks are limited in the amounts they can pay as dividends to the Parent Company.

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table provides the actual capital ratios and minimum ratios for the Company, as well as each Bank, as of the periods presented:


	Ratio/Dollar Value		Minimum Ratio for Capital Adequacy Purposes *		Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions
(Millions, except percentages)	September 30, 2026		December 31, 2025
Total Company
Common equity tier 1 capital ratio (1)	13.1	%		13.0	%		4.5	%	N/A
Tier 1 capital ratio (2)	14.1			13.4			6.0		N/A
Total risk-based capital ratio (3)	17.1			16.8			8.0		N/A
Tier 1 leverage capital ratio (4)	12.4			12.4			4.0		N/A
Total risk-weighted assets (5)	$	19,728			$	19,755

Comenity Bank
Common equity tier 1 capital ratio (1)	15.5	%		15.1	%		4.5	%	6.5	%
Tier 1 capital ratio (2)	15.5			15.1			6.0		8.0
Total risk-based capital ratio (3)	16.9			16.5			8.0		10.0
Tier 1 leverage capital ratio (4)	13.6			14.1			4.0		5.0

Comenity Capital Bank
Common equity tier 1 capital ratio (1)	12.4	%		13.5	%		4.5	%	6.5	%
Tier 1 capital ratio (2)	14.1			14.1			6.0		8.0
Total risk-based capital ratio (3)	17.5			17.5			8.0		10.0
Tier 1 leverage capital ratio (4)	12.5			13.2			4.0		5.0

______________________________

*The listed capital adequacy ratios exclude the Capital Conservation Buffer.

(4)Tier 1 leverage capital ratio represents tier 1 capital divided by total average assets, after certain adjustments.

(5)Total risk-weighted assets are generally measured by allocating assets, and specified off-balance sheet exposures, to various risk categories as defined by the Basel III Standardized Approach.

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

denying any violations of law or regulation set forth in the order. The consent order did not contain any monetary penalties or fines. The consent order was terminated by the FDIC on March 31, 2026.

15. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time we are subject to various lawsuits, claims, disputes, or potential claims or disputes, and other proceedings, arising in the ordinary course of business that we believe, based on our current knowledge, will not have a material adverse effect on our business, consolidated financial condition or liquidity, including claims and lawsuits alleging breaches of our contractual obligations, arbitrations, class actions and other litigation, arising in connection with our business activities. However, in light of the uncertainties involved in such matters, including the fact that some pending legal proceedings are at preliminary stages or seek an indeterminate amount of damages, penalties or fines, it is possible that the outcome of legal proceedings could have a material impact on our results of operations. Certain legal proceedings involving us or our subsidiaries are described further below.

On February 20, 2024, we and our general counsel were named as defendants in an adversary proceeding filed by the liquidating trustee in LVI’s Chapter 11 bankruptcy case in the United States Bankruptcy Court for the Southern District of Texas, captioned Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc., Case No. 24-03027 (Bankr. S.D. Tex.), alleging actual and constructive fraudulent transfers, among other claims, in connection with our spinoff of LVI. Also on February 20, 2024, the liquidating trustee filed an action in the United States District Court for the District of Delaware against us, each of the members of our Board of Directors at the time of the spinoff, and certain members of our management team, captioned Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc., Case No. 24-cv-00226-RGA (D. Del.), alleging certain breaches of fiduciary duties (and aiding and abetting breaches of fiduciary duties) in connection with the spinoff. Subsequently, the liquidating trustee voluntarily dismissed without prejudice the complaint in the District of Delaware and commenced on March 20, 2024 a substantially similar action in Delaware Chancery Court, captioned Pirinate Consulting Group, LLC v. Bread Financial Holdings, Inc., Case No. 2024-0277-MTZ (Del. Ch.), against the same parties and asserting the same claims. Among other things, in each of the Texas and Delaware actions, the liquidating trustee seeks damages in the amount of approximately $750 million plus interest, fees and expenses. In the Texas action, the United States Bankruptcy Court permitted certain of the claims to move past a motion to dismiss, and on January 22, 2026, the Court denied our motion for partial summary judgment on other claims; we are appealing that decision to the United States District Court for the Southern District of Texas.

We and certain current and former members of our management team have also been named as defendants in other litigation matters relating to the LVI spinoff. LoyaltyOne, Co. (the LVI subsidiary that operated its Canadian AIR MILES business) filed suit against us and our general counsel in the Ontario Superior Court of Justice in Canada on October 18, 2023, in an action captioned LoyaltyOne, Co. v. Bread Financial Holdings, Inc. et al. The lawsuit asserts that our general counsel, in his capacity as a pre-spinoff director of LoyaltyOne, Co., breached various fiduciary duties owed to LoyaltyOne, Co. in connection with the LVI spinoff and certain other transactions, and that Bread Financial assisted in and benefited from those breaches. The lawsuit seeks damages in the amount of $775 million. LoyaltyOne, Co. is also contesting our entitlement to certain potential tax refunds under the tax matters agreement, in proceedings pursuant to the Canadian Companies’ Creditors Arrangement Act in the Commercial List of the Ontario Superior Court of Justice, captioned In re Matter of a Plan of Compromise or Arrangement of LoyaltyOne, Co., Case No. CV-23-00696017-00CL (the Tax Matters Dispute). In July 2024, the judge presiding over the Tax Matters Dispute issued an order in our favor, and LoyaltyOne, Co. filed a motion for leave to appeal that order, which motion was dismissed by the Court of Appeal for Ontario in March 2025. LoyaltyOne, Co. has indicated that it will continue to seek to contest our entitlement to these potential tax refunds. In March 2026, certain creditors of LVI sought a temporary stay of these Canadian proceedings pending final resolution of the tax refund-related claims in the U.S. litigation filed by the liquidating trustee, and the Ontario Superior Court of Justice granted an interim one-year stay up to and including March 8, 2027, subject to the right of any interested party to bring a motion prior to that date to lift or vary the stay. Finally, on April 27, 2023, we and certain current and former members of our management team were named as defendants in a putative federal securities class action filed in the United States District Court for the Southern District of Ohio, captioned Newtyn Partners, LP v. Alliance Data Systems n/k/a Bread Financial Holdings, Inc., Case No. 23-cv-1451-EAS (S.D. Ohio), concerning disclosures made about LVI’s business prior to the spinoff. The lead plaintiff in this matter filed an amended complaint on March 21, 2024. In March 2025, the United States District Court for the Southern District of Ohio granted our and the other defendants’ motions to dismiss in full and with prejudice; the court entered judgment in favor of all defendants and terminated the case.

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BREAD FINANCIAL HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The plaintiffs appealed the District Court’s ruling in the Newtyn Partners matter, and the United States Court of Appeals for the Sixth Circuit affirmed the dismissal of the suit in January 2026.

In all these actions related to the spinoff, we believe the allegations contained in the complaints are without merit and intend to defend the cases. We cannot predict at this point the length of time that these actions will be ongoing or the liability, if any, which may arise therefrom.

Some matters pending against us specify the damages sought, others seek an unspecified amount of damages or are at very early stages of the legal process. In matters where the amount of damages claimed against us are stated, the claimed amount may be exaggerated and/or unsupported. While some matters have not yet progressed sufficiently through discovery or have had development of important factual information and legal issues to enable us to estimate an amount of loss or a range of possible loss, other matters may have progressed sufficiently to enable an estimate of an amount of loss, or a range of possible loss. We accrue for a loss contingency when it is both probable that a loss has occurred, and the amount of loss can be reasonably estimated; however, there may be instances in which an exposure to a loss contingency exceeds our accrual. On a quarterly basis we evaluate developments in the legal proceedings against us that could cause an increase or decrease in the amount of the accrual that has been previously recorded.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

Market risk is the risk to current or anticipated earnings, capital or economic value arising from changes in the market value of portfolios, securities or other financial instruments. Market Risk includes interest rate risk which is the risk arising from movements in interest rates. Our principal market risk exposures arise from volatility in interest rates and changes in the relationship between the interest rates on our assets (such as Credit card and other loans and Investments) and the interest rates on our liabilities (such as Deposits, Debt issued by consolidated variable interest entities and Long-term and other debt), which may include repricing risk, basis risk, yield curve risk and options risk, and their resulting impact on economic value, capitalization levels, and earnings.

There has been no material change from our 2025 Form 10-K related to our exposure to interest rate risk or other market risks.

Item 4. Controls and Procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective and designed to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II: OTHER INFORMATION

Item 1. Legal Proceedings.

Refer to (i) Part II, Item 1A, “Risk Factors—We may be adversely affected by LVI’s ongoing bankruptcy proceedings or pending or future litigation or other disputes involving or relating to LVI.” of our 2025 Form 10-K, (ii) Note 15, “Commitments and Contingencies” to our unaudited Consolidated Financial Statements, and (iii) “Risk Factors—Legal, Regulatory and Compliance Risks” of our 2025 Form 10-K, each of which is incorporated herein by reference.

Item 1A. Risk Factors.

There have been no material changes to the Risk Factors previously disclosed in our 2025 Form 10-K. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. For a discussion of the recent trends and uncertainties impacting our business, see also “Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) — Business Environment.”

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table presents information with respect to purchases of our common stock made by or on behalf of us during the three months ended September 30, 2026:


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
					(Millions)
July 1-31	254,844	$	98.52		253,789	$	424
August 1-31	229,402	$	109.45		228,403	$	399
September 1-30	237,611	$	106.42		234,836	$	374
Total	721,857	$	104.59		717,028

__________________________________

(1)During the periods presented, (i) 4,829 shares of our common stock were purchased by the administrator of our Bread Financial 401(k) Plan for the benefit of the employees who participated in that portion of the 401(k) Plan and (ii) 717,028 shares of our common stock were repurchased by the Company, pursuant to a Rule 10b5-1 trading plan previously adopted by the Company, during an open trading window.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

(a)None.

(b)None.

(c)(i) On August 31, 2026, Ralph Andretta, our President and Chief Executive Officer, entered into a “Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K, providing for the sale from time to time of an aggregate of up to 75,000 shares of our common stock. The duration of the trading arrangement is until June 30, 2027 or earlier if all transactions under the trading arrangement are complete. (ii) On August 19, 2026, Valerie

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Greer, our Executive Vice President and Chief Commercial Officer, entered into a “Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K, providing for the sale from time to time of an aggregate of up to 10,000 shares of our common stock. The duration of the trading arrangement is until February 19, 2027 or earlier if all transactions under the trading arrangement are complete. During the three months ended September 30, 2026, no other Section 16 officer or director of the Parent Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits.

a)Exhibits:

EXHIBIT INDEX

Incorporated by Reference

Exhibit No.

Filer

Description

Form

Exhibit

Filing Date

3.1

(a)

Third Amended and Restated Certificate of Incorporation of the Registrant.

8-K

3.2

6/10/16

3.2

(a)

Certificate of Amendment to Third Amended and Restated Certificate of Incorporation of the Registrant.

8-K

3.1

3/24/22

3.3

(a)

Certificate of Designations of 8.625% Non-Cumulative Perpetual Preferred Stock, Series A of the Registrant.

8-K

3.1

11/25/25

3.4

(a)

Certificate of Designations of 8.87 5% Non-Cumulative Perpetual Preferred Stock, Series B of the Registrant.

8-K

3.1

5/12/26

3.5

(a)

Sixth Amended and Restated Bylaws of the Registrant.

8-K

3.2

3/24/22

(a)

Specimen Certificate for shares of Common Stock of the Registrant.

10-Q

8/8/03

*10.1

(a)

Salary Continuation, Release and Retirement Agreement, dated July 8, 2026, by and between Bread Financial Payments, Inc., Valerie Greer and the other parties thereto, including the Post Employment Non-Disclosure, Non-Competition, and Non-Solicitation Agreement attached as Exhibit A thereto.

10.2

(a)

Amendment No. 2 to Credit Agreement, dated as of September 3, 2026, by and among Bread Financial Holdings, Inc., as borrower, and certain of its subsidiaries as guarantors, JPMorgan Chase Bank, N.A., as Administrative Agent and various other lenders.

8-K

10.1

9/8/26

*31.1

(a)

Certification of Chief Executive Officer of Bread Financial Holdings, Inc. pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

*31.2

(a)

Certification of Chief Financial Officer of Bread Financial Holdings, Inc. pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

**32.1

(a)

Certification of Chief Executive Officer of Bread Financial Holdings, Inc. pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

**32.2

(a)

Certification of Chief Financial Officer of Bread Financial Holdings, Inc. pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

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Incorporated by Reference

Exhibit No.

Filer

Description

Form

Exhibit

Filing Date

*101

(a)

The following financial information from Bread Financial Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in Inline XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements.

*104

(a)

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

__________________________________

*Filed herewith

**Furnished herewith

(a)Bread Financial Holdings, Inc.

(b)WFN Credit Company, LLC

(c)World Financial Network Credit Card Master Trust

(d)World Financial Network Credit Card Master Note Trust

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Bread Financial Holdings, Inc. has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.


	BREAD FINANCIAL HOLDINGS, INC.

DATE: October 27, 2026

	By:	/s/ RALPH J. ANDRETTA
		Ralph J. Andretta
		President and Chief Executive Officer

DATE: October 27, 2026

	By:	/s/ PERRY S. BEBERMAN
		Perry S. Beberman
		Executive Vice President and Chief Financial Officer

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