Bread Financial Holdings, Inc.

Good morning, and welcome to Bread Financial's second quarter earnings conference call. My name is Amber, and I will be coordinating your call today. At this time, all parties have been placed in a listen-only mode. Following today's presentation, the floor will be open for your questions. To register a question, please press star followed by one. It is now my pleasure to introduce Mr. Brian Vera, Head of Investor Relations at Bread Financial. The floor is yours.

Thank you. Copies of the slides we will be reviewing and the earnings release can be found on the investor relations section of our website. On the call today, we have Ralph Andretta, President and Chief Executive Officer of Bread Financial, and Perry Biberman, Executive Vice President and Chief Financial Officer of Bread Financial. Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risk and uncertainties described in the company's earnings release and other filings with the SEC. Bread Financial has no obligation to update the information presented on the call. Also on today's call, our speakers will reference certain non-GAAP financial metrics, which we believe will provide useful information for investors. Reconciliation of those measures to GAAP are included in our quarterly earnings material posted on our investor relations website at BredFinancial.com. With that, I would like to turn the call over to Ralph Andretta.

Thank you, Brian, and thank you to everyone for joining the call this morning. I will start on slide three by highlighting a few key updates from the quarter. We continue to make progress towards our long-term financial goals driven by our focus on sustainable, profitable growth. In the second quarter, consumer activity remained strong, with credit sales up 10% from the second quarter of 2021, with particular strength from our beauty and jewelry verticals and our co-brand and proprietary cards. This growth was a result of increased shopping trips, not just transaction size, which indicates that consumers continue to shop and engage. We are seeing an increase in customer spend in both discretionary and non-discretionary categories across both our co-grant and proprietary cards. We are pleased with the continued acceleration of our loan growth with end of period loans up 13% on a year-over-year basis. We are building on the momentum from our new brand launch with remarkable growth in our consumer deposit balances through our bread savings offerings. with retail deposit balances up 75% year over year. Additionally, we are seeing early success with our American Express bred cash back card offering within the Millennial and Gen X consumer base. Launched in April, we are experiencing strong top of wallet behavior with the majority of cardholders spend in everyday categories, and we are acquiring customers in their channel of choice with an emphasis on mobile new accounts. Our business development wins to date, including our AAA multi-card program, reflect a successful execution of our growth strategy. We are excited about our recent new business additions and renewals, and given our strong pipeline, we anticipate continued growth into the future. We continue to improve our strategic positioning, bolstered by our technology modernization and business transformation efforts. Perry will highlight our actions to enhance our financial resilience and recession readiness, which are critical as a potential economic recession looms. Our seasoned leadership team has extensive experience successfully navigating the full economic cycle, including economic downturns and continuously monitors economic data and the financial health of our customers. The consumer overall remains in a good financial position. While consumer sentiment has weakened, retail sales continue to rise, the unemployment rate is very low, and wage growth has been trending upward, especially in the lower income segments. However, we recognize that growing concerns about a potential recession coupled with the expected normalization, delinquencies, and payments creates uncertainty. And we have reflected that in our conservative CECL reserves. Payment and delinquency rates are normalizing, coming off historical lows of 2021, and we remain confident in our full year guidance. Moving to slide four, I will highlight some of our business development success. This morning, we announced a new long-term relationship with AAA, one of North America's largest and most trusted membership organizations serving more than 56 million US members. We also reached a definitive contract to acquire AAA's existing credit card portfolio, expected in the fourth quarter. As one of the largest full-service leisure travel organizations in North America, providing a wide range of travel services and discounts, as well as a variety of insurance products, the addition of AAA further diversifies our portfolio. Through two unique co-brand offerings, With enhanced cardholder value propositions, we are excited to help AAA drive top of wallet usage, loyalty, and growth. Also during the quarter, we signed a multi-year renewal with our long-time valued brand partner, Tourette, a direct-to-consumer apparel and intimates brand in North America that serves over three million customers through its e-commerce platform and their over 600 stores nationwide. We will use our expertise in specialty retail, coupled with digital modernization to further drive spend, acquisition, and loyalty in this fast-growing industry. Additionally, we expanded our Caesars Card Rewards program, introducing an improved value proposition designed to enhance loyalty and improve cardholder experience. Caesars Rewards remains the largest loyalty program in the industry. Turning to Bread Pay, we signed over 50 new small and medium-sized partners in the second quarter, and we continue to grow our platform with a focus on profitable and disciplined lending. Also, our partnership with Sezzle launched in the second quarter, providing us with access to Sezzle's extensive merchant network for installment lending. As I mentioned previously, we are encouraged by the continued strength of our business development activity and pipeline success. We believe we are well-positioned to continue to add additional quality partners while further diversifying our portfolio. Slide five highlights our technology monetization progress. Our digital monetization efforts have helped us drive convenience and choice for the consumer. Our full product suite coupled with our data and analytics expertise provide personalized experiences offering the right product for the consumer in their channel of choice. At the end of the quarter, we migrated to the cloud and transitioned our core processing system, including tens of millions of data records to Fiserv, further simplifying our business model and increasing our flexibility and capabilities. While any systems migration of this magnitude comes with some degree of anticipated conversion challenges, our teams are working to ensure the fair resolution for all cardholders and brand partners that may have been impacted during this time. By completing this major milestone to modernize our technology, Bread Financial is better positioned to drive enhanced capabilities, long-term operational efficiencies, scalability, and faster speed to market coming forward. Overall, we are pleased with how our business transformation efforts have materialized. We have achieved many targeted milestones, including expanding our product offerings, advancing our digital capabilities, enhancing our talent, strengthening our balance sheet, and adding and renewing iconic and diversified brand partners to support our continued growth. We remain focused on providing financial resilience and sustainable, profitable earnings growth for years to come. I will now turn it over to our CFO, Perry Bieberman, to review the financials.