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Key Takeaways BFH expects credit sales growth from strong consumer spending, new partners, and holiday demand.Average loans are set to rise, alongside higher credit sales.Strategic investments in digital innovation, technology, and marketing aim to drive growth.Bread Financial Holdings, Inc. (BFH) closed at $66.19 on Friday, near its 52-week high of $67.33. This proximity underscores investor confidence. It has the ingredients for further price appreciation.The stock is trading above the 50-day and 200-day ...

COLUMBUS, Ohio, Sept. 02, 2025 (GLOBE NEWSWIRE) -- Bread Financial® Holdings, Inc. (NYSE: BFH), a tech-forward financial services company that provides simple, personalized payment, lending, and saving solutions to millions of U.S consumers, today announced the company’s participation in the Barclays 23rd Annual Global Financial Services Conference on Tuesday, September 9. Bread Financial President and Chief Executive Officer Ralph Andretta, along with EVP and Chief Financial Officer Perry Beberman will par ...

COLUMBUS, Ohio, Aug. 27, 2025 (GLOBE NEWSWIRE) -- Bread Financial® Holdings, Inc. (NYSE: BFH) (“Bread Financial” or the “Company”) today announced that its Board of Directors (the “Board”) has authorized a new plan to repurchase up to $200 million of shares of its common stock. There is no expiration date for the repurchase plan. “We are pleased with the progress we have made to strengthen our company. Bread Financial is well-positioned to execute against our capital priorities to grow responsibly, maintain ...

COLUMBUS, Ohio, Aug. 22, 2025 (GLOBE NEWSWIRE) -- Bread Financial Holdings, Inc. (NYSE: BFH) (“Bread Financial” or the “Company”) announced that its previously announced cash tender offers (the “Tender Offers”) described in the Offer to Purchase, dated July 24, 2025 (as amended, the “Offer to Purchase”) expired at 5:00 p.m., New York City time, on August 21, 2025 (the “Expiration Date”). The following table sets forth the total aggregate principal amount of the Company’s 9.750% Senior Notes due 2029 (the “2 ...

Performance Update - Bread Financial Holdings, Inc. reported a net loss rate of 7.6% for July 2025, down from 8.0% in July 2024, indicating an improvement in credit performance [1] - The delinquency rate decreased to 5.8% as of July 31, 2025, compared to 6.2% a year earlier, reflecting better loan management [1] - Net principal losses for July 2025 were $114 million, a slight decrease from $120 million in July 2024 [1] Company Overview - Bread Financial is a tech-forward financial services company that offers personalized payment, lending, and saving solutions to millions of U.S. consumers [2] - The company provides general purpose credit cards and savings products, aiming to empower customers and enhance their quality of life [2] - Bread Financial also supports growth for recognized brands in various sectors through private label and co-brand credit cards [2]

COLUMBUS, Ohio, Aug. 07, 2025 (GLOBE NEWSWIRE) -- Bread Financial Holdings, Inc. (NYSE: BFH) ("Bread Financial" or the "Company") announced that as of 5:00 p.m., New York City time, on August 6, 2025 (the "Early Participation Date"), pursuant to and in accordance with its previously announced cash tender offers (the "Tender Offers") described in the Offer to Purchase, dated July 24, 2025 (as it may be amended or supplemented, the "Offer to Purchase"), $28,402,000 in aggregate principal amount of the Company ...

```python import urllib.parse def generate_report_outline(outline_data): markdown_lines = [] def format_chunk_references(chunk_nums): if not chunk_nums: return "" return "".join(f"[{num}](index={num}&type=chunk)" for num in sorted(chunk_nums)) Manually apply bolding to key metrics in insight content as per requirements This step would ideally be part of the input data or a more advanced NLP process. For this task, it's hardcoded based on analysis of the provided content. def apply_bolding_to_insights(item): if 'key_points' in item and item['key_points']: for kp in item['key_points']: if kp['type'] == 'insight': content = kp['content'] if "The provision for credit losses decreased" in content: content = content.replace("$74 million reserve release in Q2 2025", "**$74 million reserve release in Q2 2025**") content = content.replace("$92 million release in the prior-year period", "**$92 million release in the prior-year period**") content = content.replace("11.9% as of June 30, 2025", "**11.9% as of June 30, 2025**") elif "The company strengthened its balance sheet" in content: content = content.replace("$150 million share repurchase program", "**$150 million share repurchase program**") content = content.replace("$150 million tender offer for its 9.750% Senior Notes due 2029", "**$150 million tender offer for its 9.750% Senior Notes due 2029**") content = content.replace("13.0%", "**13.0%**") elif "The 2025 financial outlook was updated" in content: content = content.replace("7.8% and 7.9%", "**7.8% and 7.9%**") elif "Total non-interest expenses increased" in content: content = content.replace("$12 million YoY", "**$12 million YoY**") elif "The effective tax rate for Q2 2025" in content: content = content.replace("20.5%", "**20.5%**") content = content.replace("26.0% in Q2 2024", "**26.0% in Q2 2024**") elif "Key financing activities in H1 2025" in content: content = content.replace("$100M of 7.000% Senior Notes", "**$100M of 7.000% Senior Notes**") content = content.replace("$150M tender offer for 9.750% Senior Notes", "**$150M tender offer for 9.750% Senior Notes**") content = content.replace("$400M of 8.375% Subordinated Notes", "**$400M of 8.375% Subordinated Notes**") elif "Direct-to-consumer (DTC) deposits increased" in content: content = content.replace("12% year-over-year to $8.1 billion", "**12% year-over-year to $8.1 billion**") content = content.replace("45% of total funding", "**45% of total funding**") elif "The company completed its authorized $150 million stock repurchase program" in content: content = content.replace("$150 million stock repurchase program", "**$150 million stock repurchase program**") content = content.replace("3.2 million shares", "**3.2 million shares**") elif "In two separate actions, the liquidating trustee for LVI is seeking damages" in content: content = content.replace("$750 million", "**$750 million**") kp['content'] = content if 'children' in item and item['children']: for child in item['children']: apply_bolding_to_insights(child) Apply bolding to the entire outline data Deep copy the outline to avoid modifying the original input if it's used elsewhere import copy processed_outline_data = copy.deepcopy(outline_data) for item in processed_outline_data: apply_bolding_to_insights(item) def _generate_raw_lines(item): raw_lines = [] level = item['level'] title = item['title'] item_id = item['item_id'] summary = item['summary'] start_page = item.get('start_page') heading_prefix = '' * level if start_page is not None: encoded_item_id = urllib.parse.quote(item_id) raw_lines.append(f"{heading_prefix} [{title}](index={start_page}&type=section&id={encoded_item_id})") else: raw_lines.append(f"{heading_prefix} {title}") has_summary = False if summary: Ensure summary is a single sentence and remove trailing period formatted_summary = summary.replace('\n', ' ').strip() if formatted_summary.endswith('.'): formatted_summary = formatted_summary[:-1] raw_lines.append(formatted_summary) has_summary = True if 'key_points' in item and item['key_points']: if has_summary: Blank line between summary and key points raw_lines.append("") for kp in item['key_points']: if kp['type'] == 'insight': content = kp['content'].replace('\n', ' ').strip() if content.endswith('.'): content = content[:-1] references = format_chunk_references(kp.get('chunk_num', [])) raw_lines.append(f"- {content}{references}") elif kp['type'] == 'table': raw_lines.append(f" {kp['title']}") raw_lines.append(kp['content']) Process children if 'children' in item and item['children']: for child in item['children']: raw_lines.extend(_generate_raw_lines(child)) Add a blank line at the end of this section's content (including children's content) This blank line will be removed later if it's not needed (e.g., between parent and first child heading). Only add if this section actually produced some content (summary or key_points or children) and it's not just a heading with no content. if has_summary or ('key_points' in item and item['key_points']) or ('children' in item and item['children']): raw_lines.append("") return raw_lines all_raw_lines = [] for item in processed_outline_data: all_raw_lines.extend(_generate_raw_lines(item)) Post-processing to remove redundant blank lines, especially between parent and child headings final_output_lines = [] i = 0 while i < len(all_raw_lines): current_line = all_raw_lines[i] final_output_lines.append(current_line) Check for pattern: Heading -> Blank Line -> Child Heading if current_line.startswith('') and i + 2 < len(all_raw_lines): next_line = all_raw_lines[i+1] next_next_line = all_raw_lines[i+2] if next_line == "" and next_next_line.startswith(''): current_level = len(current_line.split(' ')[0]) next_next_level = len(next_next_line.split(' ')[0]) if next_next_level > current_level: Parent heading followed by blank line then child heading Skip the blank line by advancing 'i' i += 1 i += 1 Remove any trailing blank lines at the very end of the report while final_output_lines and final_output_lines[-1] == "": final_output_lines.pop() return "\n".join(final_output_lines) ``` Part I: FINANCIAL INFORMATION [Item 1. Financial Statements](index=30&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the three and six months ended June 30, 2025, and 2024, including the Consolidated Statements of Income, Comprehensive Income, Balance Sheets, Stockholders' Equity, and Cash Flows, providing a comprehensive view of the company's financial performance and position Consolidated Statements of Income Highlights (Three Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total net interest and non-interest income | $929 | $939 | (1.1%) | | Provision for credit losses | $274 | $290 | (5.5%) | | Total non-interest expenses | $481 | $469 | 2.6% | | Income from continuing operations | $139 | $133 | 4.5% | | Net income | $139 | $133 | 4.5% | | Diluted EPS | $2.94 | $2.66 | 10.5% | Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Assets | $21,821 | $22,891 | | Credit card and other loans, net | $15,558 | $16,655 | | Total Deposits | $13,340 | $13,082 | | Total Liabilities | $18,655 | $19,840 | | Total Stockholders' Equity | $3,166 | $3,051 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=3&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20%28MD%26A%29) This section provides management's perspective on the company's financial condition and results of operations for the second quarter of 2025, covering the overall business environment, detailed analysis of operating results, asset quality, liquidity, capital resources, and regulatory matters, with key themes including stable credit sales growth, improving credit metrics, active balance sheet management through debt and share repurchases, and an updated financial outlook for 2025 reflecting continued consumer resiliency [Overview](index=3&type=section&id=OVERVIEW) Bread Financial is a tech-forward financial services company providing personalized payment, lending, and saving solutions, diversifying its product mix with co-brand credit cards and Bread Pay products, serving a wide range of well-known brand partners and operating as a single reportable segment, deriving primary revenue from interest and fees on loans - The company operates as a single reportable segment, with its primary revenue source being interest and fees on loans from its credit card and other loan products[14](index=14&type=chunk) - Bread Financial is diversifying its product mix by growing its co-brand credit card programs and expanding its Bread Pay products, which include installment loans and "split-pay" offerings[13](index=13&type=chunk) - The partner base includes major brands such as AAA, Dell Technologies, the NFL, Saks Fifth Avenue, Ulta, and Victoria's Secret, diversified across various retail verticals[14](index=14&type=chunk) [Business Environment](index=4&type=section&id=BUSINESS%20ENVIRONMENT) In Q2 2025, credit sales grew 4% year-over-year to $6.8 billion, driven by new partners and higher spending, though loan balances remained flat, with net interest margin decreasing to 17.7% from 18.0% due to lower late fees, and the company actively managed its balance sheet by completing a $150 million share repurchase and a $150 million debt tender offer, updating its 2025 financial outlook to reflect a lower net principal loss rate of 7.8% to 7.9%, with average loans expected to be flat to slightly lower than 2024 Q2 2025 Performance Highlights | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Credit Sales | $6.8 billion | +4% | | Average credit card and other loans | $17.7 billion | -1% | | Net Interest Margin | 17.7% | -0.3 ppt | - The provision for credit losses decreased, driven by a **$74 million reserve release in Q2 2025** compared to a **$92 million release in the prior-year period**. The allowance for credit loss reserve rate was **11.9% as of June 30, 2025**[22](index=22&type=chunk)[23](index=23&type=chunk) - The company strengthened its balance sheet by completing a **$150 million share repurchase program** and a **$150 million tender offer for its 9.750% Senior Notes due 2029**. The Common Equity Tier 1 (CET1) ratio was **13.0%**[25](index=25&type=chunk) - The 2025 financial outlook was updated to assume a full-year Net Principal Loss Rate between **7.8% and 7.9%**, an improvement from previous expectations, due to better-than-expected credit performance in the first half of the year[30](index=30&type=chunk) [Consolidated Results of Operations](index=7&type=section&id=CONSOLIDATED%20RESULTS%20OF%20OPERATIONS) For Q2 2025, total net interest and non-interest income decreased 1% YoY to $929 million, with net income increasing 4% to $139 million and diluted EPS growing 11% to $2.94, driven by lower interest and fees on loans due to fewer late fees, partially offset by pricing actions, while total non-interest expenses rose 3%, primarily due to a $13 million impact from debt repurchases, and the effective tax rate fell to 20.5% from 26.0% due to a discrete tax benefit Financial Performance Summary (Three Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Total net interest and non-interest income | $929 | $939 | (1)% | | Provision for credit losses | $274 | $290 | (5)% | | Total non-interest expenses | $481 | $469 | 3% | | Net income | $139 | $133 | 4% | | Net income per diluted share | $2.94 | $2.66 | 11% | - Interest and fees on loans decreased primarily due to lower billed late fees resulting from lower delinquency volumes and a product mix shift away from private label accounts[38](index=38&type=chunk) - Total non-interest expenses increased by **$12 million YoY** for the quarter, while adjusted total non-interest expenses (a non-GAAP measure excluding impacts from repurchased debt) remained relatively flat[40](index=40&type=chunk)[41](index=41&type=chunk) - The effective tax rate for Q2 2025 was **20.5%**, down from **26.0% in Q2 2024**, primarily due to a discrete tax benefit related to a California law change[44](index=44&type=chunk) [Asset Quality](index=15&type=section&id=ASSET%20QUALITY) Asset quality improved in Q2 2025, with the delinquency rate on credit card and other loans decreasing to 5.7% as of June 30, 2025, from 5.9% at the end of 2024, and the annualized net principal loss rate for the quarter also improved to 7.9% from 8.6% in the prior-year period, though hurricane-related customer assistance actions in late 2024 negatively impacted Q2 2025 losses by approximately $13 million Delinquency Trends on Credit Card and Other Loans | Delinquency Status | June 30, 2025 (% of Total) | Dec 31, 2024 (% of Total) | | :--- | :--- | :--- | | 31 to 60 days | 1.7% | 1.7% | | 61 to 90 days | 1.3% | 1.3% | | 91 or more days | 2.8% | 2.9% | | **Total Delinquent** | **5.7%** | **5.9%** | Net Principal Loss Rate | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | 7.9% | 8.6% | | Six Months Ended June 30 | 8.0% | 8.6% | - Hurricane-related customer assistance actions taken in late 2024 negatively impacted net principal losses in the second quarter of 2025[57](index=57&type=chunk) [Consolidated Liquidity and Capital Resources](index=16&type=section&id=CONSOLIDATED%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintains a strong liquidity and capital position, with primary funding sources including operating cash flow, deposits, and securitization programs, and in the first half of 2025, executed several financing transactions to optimize its balance sheet, including issuing $400 million in subordinated notes and repurchasing various other notes, while direct-to-consumer (DTC) deposits grew 12% YoY to $8.1 billion, representing 45% of total funding, and the company also completed a $150 million share repurchase program - In Q4 2024, both Moody's and Fitch upgraded their credit ratings outlook for the company from "Stable" to "Positive"[70](index=70&type=chunk) - Key financing activities in H1 2025 included redeeming **$100M of 7.000% Senior Notes**, completing a **$150M tender offer for 9.750% Senior Notes**, and issuing **$400M of 8.375% Subordinated Notes**[73](index=73&type=chunk)[76](index=76&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - Direct-to-consumer (DTC) deposits increased **12% year-over-year to $8.1 billion** as of June 30, 2025, now comprising **45% of total funding**[25](index=25&type=chunk)[48](index=48&type=chunk) - The company completed its authorized **$150 million stock repurchase program** during the first half of 2025, acquiring **3.2 million shares**[99](index=99&type=chunk)[254](index=254&type=chunk) [Legislative, Regulatory Matters and Capital Adequacy](index=24&type=section&id=LEGISLATIVE%2C%20REGULATORY%20MATTERS%20AND%20CAPITAL%20ADEQUACY) The company and its subsidiary banks are subject to extensive regulation and must meet specific capital requirements, with both banks classified as "well capitalized" as of June 30, 2025, and the company's consolidated Common Equity Tier 1 (CET1) ratio at 13.0%, while an outstanding FDIC consent order from November 2023 with its servicing subsidiary related to IT systems does not include monetary penalties Capital Ratios as of June 30, 2025 | Ratio | Total Company | Minimum for Adequacy | Minimum to be Well Capitalized | | :--- | :--- | :--- | :--- | | Common equity tier 1 capital ratio | 13.0% | 4.5% | 6.5% | | Tier 1 capital ratio | 13.0% | 6.0% | 8.0% | | Total risk-based capital ratio | 16.5% | 8.0% | 10.0% | | Tier 1 leverage capital ratio | 11.4% | 4.0% | 5.0% | - In November 2023, the FDIC issued a consent order to the company's servicing subsidiary, Comenity Servicing LLC, related to IT systems development and oversight following a 2022 platform transition, with the order containing no monetary penalties or fines[116](index=116&type=chunk)[243](index=243&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses the company's exposure to market risk, identifying interest rate risk as the principal market risk arising from movements in interest rates and their impact on the company's assets and liabilities, with no material change in its market risk exposure since its 2024 Form 10-K filing - The company's principal market risk exposure is interest rate risk, stemming from changes in rates on its assets (loans, investments) and liabilities (deposits, debt)[267](index=267&type=chunk) - There has been no material change from the 2024 Form 10-K regarding the company's exposure to interest rate risk or other market risks[268](index=268&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no changes in internal control over financial reporting occurring during the quarter that have materially affected, or are reasonably likely to materially affect, these controls - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures are effective[269](index=269&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are likely to materially affect, such controls[270](index=270&type=chunk) Part II: OTHER INFORMATION [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) This section references ongoing legal matters, particularly those stemming from the 2021 spinoff of Loyalty Ventures Inc. (LVI), with the company facing lawsuits alleging fraudulent transfers and breaches of fiduciary duty, seeking damages around $750 million, which the company believes are without merit and is defending against - The company is a defendant in multiple legal proceedings related to the spinoff of its former LoyaltyOne segment (LVI), including claims of fraudulent transfer and breach of fiduciary duty[246](index=246&type=chunk)[273](index=273&type=chunk) - In two separate actions, the liquidating trustee for LVI is seeking damages of approximately **$750 million** plus interest, fees, and expenses[246](index=246&type=chunk) - The company believes the allegations in these spinoff-related actions are without merit and intends to defend the cases[249](index=249&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) This section confirms that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the Risk Factors previously disclosed in the company's 2024 Form 10-K[274](index=274&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases during the second quarter of 2025, with a total of 1,081,151 shares purchased at an average price of $44.35 per share, completing the company's publicly announced share repurchase program Common Stock Purchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1-30 | 1,076,955 | $44.32 | | May 1-31 | 1,608 | $51.32 | | June 1-30 | 2,588 | $54.00 | | **Total** | **1,081,151** | **$44.35** | [Item 5. Other Information](index=64&type=section&id=Item%205.%20Other%20Information) This section reports that during the three months ended June 30, 2025, no Section 16 officer or director of the Parent Company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - During Q2 2025, no Section 16 officer or director adopted or terminated a Rule 10b5-1 trading arrangement[280](index=280&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section provides an index of the exhibits filed with the Form 10-Q, with key exhibits including certifications from the Chief Executive Officer and Chief Financial Officer as required by the Securities Exchange Act of 1934, as well as financial data formatted in Inline XBRL - The filing includes certifications from the CEO and CFO pursuant to Rule 13a-14(a) and Section 1350 of the Sarbanes-Oxley Act[284](index=284&type=chunk)[285](index=285&type=chunk) ```

Core Insights - Bread Financial Holdings (BFH) reported an operating income of $3.14 per share for Q2 2025, exceeding the Zacks Consensus Estimate by 69.7% and reflecting an 18% year-over-year improvement [1][8] Revenue Performance - Revenues decreased by 1.1% year over year to $929 million, primarily due to lower finance charges and late fees from a reduced average prime rate, lower delinquencies, and a shift in risk and product mix [2][8] - The revenue figure missed the consensus estimate by 0.9% [2] Credit Sales and Loans - Credit sales increased by 4% to $6.8 billion, driven by new partner growth and increased general-purpose spending, surpassing the estimate of $6.6 billion [2][8] - Average loans decreased by 1% to $17.7 billion, attributed to the macroeconomic environment affecting consumer spending and tighter underwriting standards [3] Interest Income and Margins - Total interest income fell by 3% to $1.2 billion, aligning with estimates [3] - Net interest margin contracted by 30 basis points to 17.7%, slightly better than the Zacks Consensus Estimate of 17.4% [3] Expenses and Earnings - Total non-interest expenses rose by 3% to $481 million, driven by debt extinguishment costs [4] - Pre-tax pre-provision earnings decreased by 5% year over year to $448 million due to lower net interest income [4] Financial Position - As of June 30, 2025, cash and cash equivalents increased by 14.4% to $4.2 billion [5] - Long-term debt rose by 28.7% to $1.3 billion compared to the end of 2024 [5] - Tangible book value per share was $52.21, up 7% year over year [5] - Return on average equity was 17.5%, expanding by 80 basis points year over year [5] Share Repurchase - In April, BFH repurchased 1.1 million shares, completing a $150 million share repurchase program [6] Future Guidance - Management estimates average receivables to be flat to slightly down from 2024, with total revenues expected to remain flat year over year [9] - The net loss rate is guided to be in the range of 7.8-7.9% [9]

Financial Data and Key Metrics Changes - Adjusted net income for the second quarter of 2025 was $149 million, with adjusted earnings per diluted share of $3.15, excluding a $10 million post-tax impact from debt repurchase expenses [5] - Return on average tangible common equity was 22.7% for the quarter [5] - Revenue decreased by 1% year over year to $929 million, primarily due to lower finance charges and late fees [13] - Average loans decreased by 1% to $17.7 billion, influenced by macroeconomic challenges and elevated gross credit losses [12] Business Line Data and Key Metrics Changes - Credit sales grew by 4% year over year, driven by new partner growth and higher general purpose spending [6] - Non-interest income increased by $3 million, primarily due to recent paper statement pricing changes [14] - Total non-interest expenses increased by $12 million or 3% year over year, mainly due to debt extinguishment costs [13][15] Market Data and Key Metrics Changes - Direct to consumer deposits increased to $8.1 billion at quarter end, up 12% year over year [9] - Delinquency rate improved to 5.7%, down 30 basis points year over year [21] - Net loss rate was 7.9%, down 70 basis points year over year [22] Company Strategy and Development Direction - The company is focused on technology modernization, digital advancement, and product innovation to drive future growth [9] - A multi-year extension of the relationship with Caesars Entertainment was announced, securing top programs until at least 2028 [10] - The company aims to optimize its balance sheet and maintain a strong capital position while delivering value to shareholders [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of consumer health and spending trends, despite mixed economic data [28][30] - The full-year net loss rate guidance was adjusted to a range of 7.8% to 7.9%, reflecting better-than-expected improvements in credit metrics [25] - Management remains cautious about potential macroeconomic impacts on consumer spending and employment [30][90] Other Important Information - The company completed a $150 million share repurchase program and a $150 million tender offer for senior notes [9] - The total loss absorption capacity was reported at 25.7% of total loans, indicating a strong margin of safety [21] Q&A Session Summary Question: Health of the customer regarding credit sales and loan growth - Management noted that consumer health remains stable, with a positive trend in credit sales growth continuing into July [28][30] Question: Capital plans and buybacks - Management indicated that capital priorities remain unchanged, focusing on responsible growth and potential buybacks when appropriate [36][38] Question: Top line view and NII progression - Management acknowledged that improved delinquency rates and lower late fees are impacting top line NII, with expectations for variability in revenue [43][46] Question: Growth prospects and capital utilization - Management emphasized ongoing investments in the business and maintaining a balance between growth and shareholder returns [49][52] Question: Trends in applications and approval rates - Management reported strong application flows and appropriate approval rates based on current economic conditions [76][78] Question: Impact of BNPL and new client conversations - Management confirmed that BNPL is part of their product offerings and highlighted a robust pipeline for future growth opportunities [93][96] Question: Competitive renewal processes and risk-adjusted returns - Management described the competitive nature of the market and their proactive approach to partner renewals, ensuring alignment with hurdle rates [100]