Here’s why Bread Financial shares are up after the first quarter

  • Pain Financial Holdings, Inc. BFH announced first-quarter FY22 revenue growth (total net interest and non-interest income) of 15% year-over-year to $921 million, missing the consensus of $936.4 million.
  • Higher average loan balances, improved loan yields and improved cost of funds fueled growth.
  • Credit sales rose 14% year-on-year to $6.9 billion as consumer spending remained strong.
  • Net interest income increased 18.4% year-on-year to $989 million.
  • EPS of $4.21 missed the consensus of $4.41.
  • The delinquency rate of 4.1% increased from 3.8% in 1Q21 due to the gradual normalization of the consumer payment rate.
  • The net loss rate of 4.8% improved from 5.0% in 1Q21 and remained well below its historical average net loss rate.
  • Bread Financial forecasts total revenue growth for 2022 in line with average loan growth, with upside potential from improving net interest margin.
  • Bread Financial forecasts average credit card and other loan growth for the whole of 2022 in the lower double-digit range compared to 2021, moving from high range to low double-digit range.
  • Price Action: Shares of BFH traded up 6% to $56.87 when last checked on Thursday.

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