Bread Financial : Q4 2022 Slide Presentation

Bread Financial

Fourth Quarter and Full Year 2022 Results

January 26, 2023

Ralph Andretta

President & CEO

Perry Beberman

EVP & CFO

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Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as "believe," "expect," "anticipate," "estimate," "intend," "project," "plan," "likely," "may," "should" or other words or phrases of similar import. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding, and the guidance we give with respect to, our anticipated operating or financial results, future financial performance and outlook, future dividend declarations, and future economic conditions.

We believe that our expectations are based on reasonable assumptions. Forward-looking statements, however, are subject to a number of risks and uncertainties that are difficult to predict and, in many cases, beyond our control. Accordingly, our actual results could differ materially from the projections, anticipated results or other expectations expressed in this release, and no assurances can be given that our expectations will prove to have been correct. Factors that could cause the outcomes to differ materially include, but are not limited to, the following: macroeconomic conditions, including market conditions, inflation, rising interest rates, unemployment levels and the increased probability of a recession, and the related impact on consumer payment rates, savings rates and other behavior; global political and public health events and conditions, including the ongoing war in Ukraine and the continuing effects of the global COVID-19 pandemic; future credit performance, including the level of future delinquency and write-off rates; the loss of, or reduction in demand from, significant brand partners or customers in the highly competitive markets in which we compete; the concentration of our business in U.S. consumer credit; inaccuracies in the models and estimates on which we rely, including the amount of our Allowance for credit losses and our credit risk management models; the inability to realize the intended benefits of acquisitions, dispositions and other strategic initiatives, including the spinoff of our former LoyaltyOne® segment; our level of indebtedness and ability to access financial or capital markets; pending and future legislation, regulation, supervisory guidance, and regulatory and legal actions, including, but not limited to, those related to financial regulatory reform and consumer financial services practices, as well as any such actions with respect to late fees, interchange fees or other charges; impacts arising from or relating to the transition of our credit card processing services to third party service providers that we completed in 2022; and failures or breaches in our operational or security systems, including as a result of cyberattacks, unanticipated impacts from technology modernization projects or otherwise. The foregoing factors, along with other risks and uncertainties that could cause actual results to differ materially from those expressed or implied in forward-looking statements, are described in greater detail under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the most recently ended fiscal year, which may be updated in Item 1A of, or elsewhere in, our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2022. Our forward-looking statements speak only as of the date made, and we undertake no obligation, other than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.

Non-GAAP Financial Measures

We prepare our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (GAAP). However, certain information included within this presentation, constitutes non-GAAP financial measures. Our calculations of non-GAAP financial measures may differ from the calculations of similarly titled measures by other companies. In particular, Pretax pre-provisionearnings (PPNR) is calculated by increasing/decreasing Income from continuing operations before income taxes by the net build/release in Provision for credit losses. We use PPNR as a metric to evaluate our results of operations before income taxes, excluding the volatility that can occur within Provision for credit losses. Tangible common equity over Tangible assets (TCE/TA) represents Total stockholders' equity reduced by Goodwill and intangible assets, net, (TCE) divided by Tangible assets (TA), which is Total assets reduced by Goodwill and intangible assets, net. We use TCE/TA as a metric to evaluate the Company's capital adequacy and estimate its ability to cover potential losses. Tangible book value per common share represents TCE divided by shares outstanding. We use Tangible book value per common share as a metric to estimate the Company's potential value in relation to tangible assets per share. We believe the use of these non-GAAP financial measures provide additional clarity in understanding our results of operations and trends. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, please see the "Reconciliation of GAAP to Non-GAAP Financial Measures".

©2023 Bread Financial

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Continued Business Transformation in 2022

Transforming our Company to deliver sustainable, profitable growth

		Invested more than $125 million in technology
Rebranded to Bread Financial, a tech-forward	Successfully launched new brand partners and	modernization, digital advancement, marketing,
financial services company	renewed long-term relationships	and product innovation

Expanded our product suite and	Enhanced our core technology and	Recognized for our prioritization of
direct-to-consumer offerings	digital capabilities	Environmental, Social, and Governance

©2023 Bread Financial

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Achievement of 2022 Financial Outlook

Full Year 2021	Full Year 2022	Full Year 2022
Actuals	Outlook	Actuals
Average loans	Up low	Up 13%
$15,656 million	double digits	$17,768 million
Revenue	Aligned with / better than	Up 17%
$3,272 million	loan growth	$3,826 million
Total non-interest expenses	Positive operating leverage	Positive operating leverage = 2%
$1,684 million	$1,932 million
Net loss rate	Low-to-mid	5.4%
4.6%	5% range

Additional Financial Achievements

• Quality growth as PPNR increased 19% compared with 2021
• Strengthened financial resilience through improvement in capital positioning and debt reduction
• Increased credit loss absorption capacity through loan loss reserves
• Grew retail deposits on our Bread Savings platform to $5.5 billion, an increase of $2.3 billion or 72%

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©2023 Bread Financial	4
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4Q22 Business Development Highlights

New Brand Partnerships

Brand Partner Renewal

Select New Bread Pay Partners

Continued strong	boutique tech retailer	luxury handbags	tires, wheels &	online jewelry &	exercise & fitness
merchant adoption			auto parts	accessories retailer	equipment
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