Bread Financial Holdings, Inc.

Good morning, and welcome to Bread Financial's second quarter 2026 earnings conference call. My name is Shannon, and I'll be coordinating your call today. At this time, all priorities have been placed on the listen-only mode. Along today's presentation, the floor will be open for your questions. To register a question, please press star followed by 1-1. It is now my pleasure to introduce Mr. Brian Vereb, Head of Investor Relations at Bread Financial. The floor is yours.

Thank you. Copy of the slides we will be reviewing and the earnings release can be found on the investor relations section of our website at bredfinancial.com. On the call today, we have Ralph Andretta, President and Chief Executive Officer, and Perry Beberman, Executive Vice President and Chief Financial Officer. 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. With that, I would like to turn the call over to Ralph Andretta.

Thank you, Brian, and good morning to everyone joining us today. We are pleased with the strong financial results Bread Financial delivered in the second quarter. We saw accelerating credit sales, continued loan and deposit growth, increased revenue and PPNR, and improving credit performance. These results demonstrate the strength of our business model and the benefits of our continued emphasis on responsible growth and Operational Excellence, positioning Bread Financial for sustained positive long-term performance. For the quarter, net income was $146 million and tangible book value per common share increased 22% year-over-year to $63.66. Adjusted PPNR grew 11% year-over-year, supported by 7% revenue growth and ongoing disciplined expense management. Our strong execution across product mix and industry verticals is reflected in our second quarter credit sales growth of 11% year-over-year and 5% end-of-period loan growth. Our growth in the quarter was broad. Our existing co-brand partnerships, especially in travel and sporting goods, continue to see healthy growth. In addition, we continue to expand our reach to a forward program launch. New home partnership with Raymoor & Flanagan, Furniture First, and Ethan Allen and our Bread Pay partnership with Vivint. These relationships reinforce the value we deliver through flexible payment solutions, disciplined underwriting and a strong partner focus. End of period direct to consumer deposits grew 16% year over year to $9.4 billion. This marks our second strongest quarter of growth since the program began in 2019. Our direct-to-consumer deposits now comprise 50% of our funding mix, achieving an important milestone for the company and a target we set during our initial investor day. I am pleased with the growth and see further opportunity to build on this success. Also during the second quarter, we continue to optimize our capital stack, issuing a second round of preferred stock and repurchasing 7% of our outstanding common shares. We will remain disciplined in our capital allocation strategy, prioritizing responsible profitable loan growth and strategic investments in our business. Our results underscore our success in executing our priorities despite ongoing macroeconomic uncertainty. Persistent inflation continues to influence household decision making. Even so, our consumers' financial health remains resilient as evidenced by continued sales growth, a stable payment rate, and improving credit performance. We saw improvement in both our net loss rate and delinquency rate, reflecting the benefits of proactive credit risk management, disciplined underwriting and the quality of our customer base. We will remain appropriately cautious given the broader macroeconomic environment. These trends reinforce our confidence in our business outlook and the effectiveness of the actions we have taken. Finally, turning to our investment priorities, we continue to make targeted investments that support growth for Bread Financial and our partners. These efforts span digital and technology enhancements across the enterprise, including the responsible use of AI. We are strategically integrating AI in ways that advance operational excellence by improving productivity and efficiency, enabling innovation, and enhancing risk management. Additionally, we are collaborating with our partners to develop use cases in agentic commerce and servicing, further advancing innovation across the customer experience. We prioritize AI outcomes that remove friction and drive results so ideas can turn into measurable progress for our brand partners and customers. As I highlighted, this was another strong quarter for our company. Our success is a result of the efforts of our associates and leadership team. As we transform Bread Financial over the past six years, we focused on building a resilient business through strengthening our balance sheet, investing in areas that drive responsible, profitable growth and efficiencies. The transformation of our company is now evident in our results. Investors are increasingly recognizing the value our business model creates and the remaining catalyst to drive further improvement in our financial results. We are proud of the progress and remain focused on delivering sustainable shareholder returns over the long term. Now we'll pass it over to Perry.