Bread Financial Holdings, Inc.

Good morning and welcome to Bred Financial's first quarter earnings conference call. My name is Daisy and I'll be coordinating your call today. At this time, all parties have been placed on a listen-only mode. Following today's presentation, the floor will be open for questions. To register a question, please press star followed by one on your telephone keypad. It is now my pleasure to introduce Mr. Brian Verab, Head of Investor Relations at Bred Financial to begin. So Brian, please go ahead.

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 Beiberman, 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 based on management's current expectations and assumptions and are subject to the risks and uncertainties described in the company's earnings release and other filings with the SEC. Also on today's call, our speakers will reference certain non-GAAP financial measures, which we believe will provide useful information for investors. Reconciliation of those measures to GAAP are included in our quarterly earnings materials 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 good morning to everyone joining the call. I will begin today's call by reviewing our key focus areas as we continue to execute our business transformation. Then, given the recent volatility in the banking sector, I will highlight the company's strong financial standing and the actions we have taken to improve our stability. Finally, Peru will review the financials for the first quarter. We have made great progress in the first quarter, including building our total company TCE to TA capital ratio above the 9% level. Starting on slide three, our current initiatives center on four key focus areas, growing responsibly, strengthening our balance sheet, optimizing data and technology, and strategically investing in our business. Sustainable, profitable growth has been a focal point for our management team over the past three years and that will continue moving forward. Our business development pipeline remains active with first quarter new partner launches including All Pet Credit, the Cleveland Cavaliers, Michaels, the New York Yankees, and World Market. Also, we are pleased to announce the extension of our longstanding relationship with Signet, the world's largest retailer of diamond jewelry. With the extension, our five largest brand partners based on outstanding loan balances are now secured through at least 2028. We will continue to support organic and new partner growth that we expect will deliver long term value. We will continue to enhance our capital position, refine our funding structure, and proactively manage our credit, liquidity, and interest rate risk to strengthen our balance sheet. Additionally, as we near the end of significant tech modernization initiatives, we have begun to leverage the innovative capabilities gained through the Fiserv platform, converting to the cloud, and Alveria, our new collection solution, all to benefit from scale, platform optimization, and speed to market. Finally, our technology and product innovation will continue in 2023. Just this month, we received industry recognition for our Bread Cashback card launch being named Best Credit Card Payment Solution by the FinTech Breakthrough Awards. This acknowledgement highlights our team's dedication to creating innovative, transparent, and easy-to-use payment solutions that serve the ever-changing needs of our consumers. We will continue this spirit of innovation with a focus on expanding our digital and mobile customer engagement to provide customers with enhanced experiences. As always, we remain disciplined in our investing to drive long-term growth. Moving to slide four. Through our business transformation efforts, we have made decisions to enhance financial resiliency of our company. Over the past three years, we have improved our product, partner, and funding diversification, strengthened our balance sheet, and enhanced our credit risk management and underlying credit distribution. We continuously update our credit risk management models and underwriting criteria with an emphasis on proactively managing credit lines and balances. We believe that our improved risk profile coupled with our more diverse portfolio and brand partner base strongly position us to manage through the entire economic cycle and outperform historic levels. Slide five provides additional color on our balance sheet management and discipline financial oversight. Starting with our funding. We have a diverse, stable, and growing funding base. Notably, we experienced net positive inflows of deposit balances on our bread savings direct-to-consumer platform during the first quarter, up 3% from year end, as well as over the last two weeks of March when many banks experienced net deposit outflows. Our program consists of nearly 100,000 accounts with more than 90% of total deposits within the FDIC insurance limits. We remain confident in our ability to efficiently fund our long-term growth objectives and further broaden our funding base with growth from direct-to-consumer deposits going forward. Our disciplined approach to financial management is reflected in our liquidity portfolio. It consists of nearly all cash held at the Federal Reserve with no held to maturity securities. We remain committed to prudent interest rate management with regard to interest rate risk asset and liability management. Strengthening our balance sheet has been fundamental to our business transformation and we are pleased with our progress. We significantly improved our capital ratios, including nearly tripling our TCE to TA ratio since the first quarter of 2020 to over 9% at quarter end. We reduced our parent level debt by nearly 40% since my arrival over three years ago and remain committed to further reducing our leverage over the coming years. Finally, we built our credit loss absorption capacity with a 300 basis point increase in our reserve rate from our CECL day one rate in 2020. These significant accomplishments over the past three years are a testament and dedication and commitment to the entire Bread Financial team. And in closing, it is that team that has enabled Bread Financial to recently earn a spot are Newsweek's America's Most Trustworthy Companies list of 2023. The essential qualities that underpin successful companies, credibility, transparency, and trustworthiness, are consistent with our values as an organization, and we are confident that leading Bread Financial with integrity and strong governance will deliver long-term value for our stakeholders. I'll now pass it to Perry to review the financials. Thanks, Ralph.