Bread Financial Builds $8.5B Deposits, Targets 50% Funding, Sees Flat January Loan Growth
CEO Andretta highlighted a strengthened balance sheet, paying down high-cost debt and building $8.5 billion in direct-to-consumer deposits while targeting 50% of funding via deposits. CFO Beberman said January credit losses and delinquencies improved with flat loan growth, and reiterated outlook for low-single-digit loan growth and long-term loss rates near 6%.
1. Balance Sheet and Funding Initiatives
CEO Ralph Andretta cited progress in a multi-year transformation, highlighting management team build-out, paydown of high-cost senior notes through refinancings, and issuance of subordinated notes and preferred stock. The company finished the year with about $8.5 billion in direct-to-consumer deposits and aims for deposits to account for 50% of total funding.
2. January Credit and Expense Trends
CFO Perry Beberman reported fourth-quarter non-interest expenses of $500 million and expects a slight decline in first-quarter adjusted expenses excluding debt repurchase costs. He noted January credit performance showed lower losses and delinquencies alongside flat loan growth, describing the pattern as an initial inflection ahead of typical seasonal pickup.
3. Loan Growth and Loss Outlook
Management reiterated a long-term outlook for low-single-digit loan growth driven by new partner launches and improved credit quality across private-label, co-brand, direct-to-consumer and BNPL products. The company targets long-term loss rates around 6% with reserves near 10%, balancing disciplined underwriting with partner sales objectives.