BREAD FINANCIAL HOLDINGS, INC.

Previous wording

We have continued to diversify our product mix with our brand partners through growth of our co-brand credit card programs, which, relative to our private label credit card programs, have higher credit sales per account and an improved credit risk mix that generally results in higher transactor balances, lower delinquencies and late fees, as well as lower losses. We also offer our proprietary credit cards along with the expansion of our Bread Pay products, which are our installment loans and “split-pay” offerings.

Current wording

We have continued to diversify our product mix with our brand partners through growth of our co-brand credit card programs, which, relative to our private label credit card programs, have higher Credit sales per account and an improved credit risk mix that generally results in higher transactor balances, lower delinquencies and late fees, as well as lower losses. We also offer our proprietary credit cards along with an expanding range of our Bread Pay products, which are our installment loans and “split-pay” offerings.

Previous wording

This Business Environment section provides an overview of our results of operations and financial position for the second quarter of 2026, as well as our related outlook for the remainder of 2026 and certain of the uncertainties associated with achieving that outlook. This section should be read in conjunction with the other information included or incorporated by reference in this Form 10-Q, including “Consolidated Results of Operations,” “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” herein, and in our 2025 Form 10-K and Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which provide further discussion of variances in our results of operations over the periods of comparison, along with other factors that could impact future results and the Company achieving its outlook. Unless otherwise specified, the discussion included herein is for the three months ended June 30, 2026, compared with the same period in the prior year.

Current wording

This Business Environment section provides an overview of our results of operations and financial position for the third quarter of 2026, as well as our related outlook for the remainder of 2026 and certain of the uncertainties associated with achieving that outlook. This section should be read in conjunction with the other information included or incorporated by reference in this Form 10-Q, including “Consolidated Results of Operations,” “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” herein, and in our 2025 Form 10-K and other Quarterly Reports on Form 10-Q, which provide further discussion of variances in our results of operations over the periods of comparison, along with other factors that could impact future results and the Company achieving its outlook. Unless otherwise specified, the discussion included herein is for the three months ended September 30, 2026, compared with the same period in the prior year.

Previous wording

Credit sales of $7.5 billion were up 11% year-over-year driven by the addition of new brand partners and increased general-purpose spending. Average and end-of-period credit card and other loans increased 3% to $18.2 billion and 5% to $18.5 billion, respectively, driven by new brand partners and increased credit sales. Total interest income was up 3% from the second quarter of 2025. Higher Average credit card and other loans balances, the ongoing effects of pricing actions (such as increases to our annual percentage rates) and lower reversals of finance charges and late fees, resulting from lower gross credit losses were partially offset by both a lower average Prime interest rate, which affects variable rate Credit card and other loans, and lower billed late fees. Our improved delinquency trends across our loan portfolio, as well as the gradual shift in product mix to a declining proportion of private label accounts, which tend to have higher billed late fees, have resulted in lower overall billed late fees. Net interest margin increased year-over-year to 18.49%, from 17.71%, as loan yields continued to benefit from the effects of pricing actions, and funding costs continued to improve. We anticipate the year-over-year benefits associated with our pricing actions to slow throughout the year as the majority of our credit card loan portfolio will have repriced. Net interest margin is also expected to be affected by the ongoing gradual improvement in our payment and delinquency rate trends, and the continued shift in our product and risk mix. Non-interest income decreased $1 million from the second quarter of 2025, driven by increased costs associated with brand partner retailer share arrangements, partially offset by both an increase in interchange and merchant discount fees, due to the addition of new brand partners, and an increase in revenue from our payment protection products as a result of new enrollment channels. We expect Non-interest income will continue to decrease throughout the year as a result of both higher credit sales-related payments to brand partners, and higher brand partner profit sharing as a result of improving loan yields and gross credit losses. Overall, Total net interest and non-interest income for the quarter was $1.0 billion, up 7% versus the second quarter of 2025.

Current wording

Credit sales of $7.4 billion were up 9% year-over-year driven by growth in both our new and existing brand partners and increased general-purpose spending. Average and end-of-period credit card and other loans increased 6% to $18.6 billion and 7% to $18.9 billion, respectively, driven by the growth in our new partnerships, increased Credit sales and lower gross credit losses. Total interest income was up 4% from the third quarter of 2025 due primarily to higher Average credit card and other loans balances, the ongoing effects of pricing actions (such as increases to our annual percentage rates) and lower reversals of finance charges and late fees, resulting from lower gross credit losses. These attributes were partially offset by both a lower average Prime interest rate, which affects variable rate Credit card and other loans, and lower billed late fees. Our improved delinquency trends across our loan portfolio, as well as the gradual shift in product mix to a declining proportion of private label accounts, which tend to have higher billed late fees, have resulted in lower overall billed late fees. Net interest margin increased year-over-year to 18.89%, from 18.81%, as loan yields continued to benefit from the effects of pricing actions, and funding costs continued to improve. We anticipate the year-over-year benefits associated with our pricing actions will continue to diminish as a majority of our credit card loan portfolio will have repriced. Net interest margin is also expected to be affected by the ongoing gradual improvement in our payment and delinquency rate trends, and the continued shift in our product and risk mix. Non-interest income decreased $17 million from the third quarter of 2025, driven by increased costs associated with brand partner retailer share arrangements as a result of higher Credit sales, improving loan yields and lower gross credit losses, partially offset by both an increase in interchange and merchant discount fees, due to the scaling of new brand partners, and an increase in revenue from our payment protection products as a result of new enrollment channels. Overall, Total net interest and non-interest income for the quarter was $1.0 billion, up 5% versus the third quarter of 2025.

Previous wording

Provision for credit losses increased during the three months ended June 30, 2026 driven by a $3 million reserve release and net principal losses of $316 million, compared with a $74 million reserve release and net principal losses of $348 million in the prior year period.

Current wording

Provision for credit losses increased during the three months ended September 30, 2026 driven by a $21 million reserve build and net principal losses of $300 million, compared with a $28 million reserve release and net principal losses of $327 million in the prior year period.

Previous wording

Our Allowance for credit losses decreased as of June 30, 2026, relative to December 31, 2025, due primarily to a lower Credit card and other loans balance, as seasonally higher transactor balances from the fourth quarter of 2025 were paid down in the first quarter of 2026, as well as the improving credit quality in our credit card and other loans portfolio. Our reserve rate was 11.23% and 11.89% as of June 30, 2026 and 2025, respectively, reflecting our improving credit metrics and higher-quality new account acquisitions. We continue to maintain appropriately prudent weightings on the economic scenarios in our credit reserve modeling to ensure the adequacy of our Allowance for credit losses given the wide range of potential macroeconomic outcomes, including ongoing uncertainty regarding trade policy and global conflicts, and downstream impacts on inflation and unemployment. From an overall credit quality perspective, our percentage of customers with Vantage scores greater than 650 remains above pre-pandemic levels due to prudent credit management and a more diversified product mix, in particular with co-brand cards representing a larger proportion of our portfolio.

Current wording

Our Allowance for credit losses slightly decreased as of September 30, 2026, relative to December 31, 2025, due to improving credit quality in our Credit card and other loans balance. Our reserve rate was 11.12% and 11.72% as of September 30, 2026 and 2025 reflecting our improving credit metrics and higher-quality new account acquisitions. We continue to maintain appropriately prudent weightings on the economic scenarios in our credit reserve modeling to ensure the adequacy of our Allowance for credit losses given the wide range of potential macroeconomic outcomes, including ongoing uncertainty regarding trade policy and global conflicts, and downstream impacts on inflation and unemployment. From an overall credit quality perspective, our percentage of customers with Vantage scores greater than 650 remains above pre-pandemic levels due to prudent credit management and a more diversified product mix, in particular with co-brand cards representing a larger proportion of our portfolio.

Previous wording

Provision for income taxes increased $16 million year-over-year, driven by an increase in Income from continuing operations before income taxes, as well as a discrete tax benefit in the prior year period.

Current wording

Provision for income taxes increased $45 million year-over-year, driven by a discrete tax benefit in the prior year period.

Previous wording

During the quarter, we further optimized our capital structure by issuing $135 million of 8.875% preferred stock. With this issuance and continued strong earnings we were able to return value to stockholders through share repurchases, buying back 2.8 million shares, or $241 million, of common stock during the quarter, resulting in $449 million of outstanding share repurchase authorization as of June 30, 2026. Our Common equity tier one capital ratio (CET1) of 12.9% decreased from 13.0% in the second quarter of 2025, as net earnings over the period were more than offset by our common stock repurchases, debt repurchases and dividend payments. Additionally, relative to the second quarter of 2025 direct-to-consumer (DTC) deposits increased 16% to $9.4 billion as of June 30, 2026, with average DTC deposits representing 50% of our total funding, up from 45% a year ago.

Current wording

Our efforts to further strengthen and optimize our Consolidated Balance Sheet continued in the third quarter of 2026. Consumer deposits increased 21% to $9.9 billion as of September 30, 2026, with average consumer deposits representing 53% of our total funding, up from 47% a year ago. The successful completion of our bank merger on October 1 better positions us to further increase consumer deposits as a core funding source over time and provides additional balance sheet and funding flexibility with a larger, simplified bank structure. During the quarter we were able to return value to stockholders through share repurchases, buying back 0.7 million shares, or $75 million of common stock, resulting in $374 million of remaining share repurchase authorization as of September 30, 2026. We also repurchased $24 million of our 8.375% Fixed-Rate Reset Subordinated Notes Due 2035 utilizing cash on hand, and have $326 million in remaining principal outstanding as of September 30, 2026. Our Common equity tier one capital ratio (CET1) of 13.1% decreased from 14.0% in the third quarter of 2025, as net earnings over the period were more than offset by the impact from our common stock repurchases, dividend payments, risk weighted assets growth, as well as debt repurchases.

Previous wording

Based on our current economic outlook and visibility into our new business pipeline and partner growth, as well as both the expected continued improvement in our Net principal loss rate and our ongoing expectations for strong cardholder payment rates, we now expect growth in 2026 Average credit card and other loans to be up low- to mid-single digits on a percentage point basis from full year 2025. Growth in Total net interest and non-interest income is now also anticipated to be up low- to mid-single digits on a percentage point basis from 2025, primarily driven by the growth in Average credit card and other loans. We anticipate our full year Net interest margin to be flat to slightly higher than 2025 as a result of continued, albeit slowing benefits from implemented pricing actions and an improving cost of funds, partially offset by lower billed late fees from improving delinquency trends, and continued shifts in risk and product mix which are driving improvement in our payment rate trends. We continually focus on expanding and diversifying our product offerings, including ways to leverage our loan origination and servicing-related capabilities.

Current wording

Based on our current economic outlook and visibility into our new business pipeline and partner growth, as well as both the expected continued improvement in our Net principal loss rate and our ongoing expectations for strong cardholder payment rates, we now expect growth in 2026 Average credit card and other loans to be up approximately 4% from full year 2025. Growth in Total net interest and non-interest income is now anticipated to be up approximately 5% from full year 2025, primarily driven by the growth in Average credit card and other loans. We anticipate our full year Net interest margin to be slightly higher than 2025 as a result of improved funding costs. We continually focus on expanding and diversifying our product offerings, including ways to leverage our loan origination and servicing-related capabilities.

Previous wording

Our 2026 financial outlook now assumes a full year Net principal loss rate ranging from 7.0% to 7.1% given a resilient consumer, our disciplined credit management, and continued risk and product mix shifts.

Current wording

Given the continued improvement in our credit metrics, our 2026 financial outlook now assumes a full year Net principal loss rate to be below 7%. This updated guidance contemplates our visibility into the current delinquency pipeline and a resilient consumer, combined with stable macroeconomic conditions, our disciplined credit management and continued risk and product mix shifts.

Previous wording

Overall, our second quarter results demonstrate the strength of our earnings power and the benefits of disciplined capital management. We remain confident in our ability to execute on our strategy and deliver attractive returns while creating long-term value for our stockholders.

Current wording

Overall, our third quarter results reinforce the quality and durability of our earnings model and the underlying financial discipline. We remain confident in our ability to execute on our strategy and deliver attractive returns while creating long-term value for our stockholders.

Previous wording

The following discussion provides commentary on the variances in our results of operations for the three and six months ended June 30, 2026, compared with the same periods in the prior year, as presented in the accompanying tables. This discussion should be read in conjunction with the discussion under “Business Environment” above.

Current wording

The following discussion provides commentary on the variances in our results of operations for the three and nine months ended September 30, 2026, compared with the same periods in the prior year, as presented in the accompanying tables. This discussion should be read in conjunction with the discussion under “Business Environment” above.

Previous wording

Interest income: Total interest income increased for the three and six months ended June 30, 2026, due to the following:

Current wording

Interest income: Total interest income increased for the three and nine months ended September 30, 2026, due to the following:

Previous wording

•Interest and fees on loans increased due to higher Average credit card and other loans balances, the ongoing effects of pricing actions and lower reversals of finance charges and late fees, resulting from lower gross credit losses, partially offset by both lower average Prime interest rates which affects variable rate Credit card and other loans, and lower billed late fees; collectively increasing the yield from finance charges and late fees by approximately 32 basis points and 49 basis points, over the respective periods of comparison. Our lower delinquency volumes and the gradual shift in product mix to a lower proportion of private label accounts, which tend to have higher billed late fees, have resulted in lower overall billed late fees.

Current wording

•Interest and fees on loans increased due to higher Average credit card and other loans balances, the ongoing effects of pricing actions and lower reversals of finance charges and late fees, resulting from lower gross credit losses. These attributes were partially offset by both lower average Prime interest rates which affects variable rate Credit card and other loans, and lower billed late fees. Collectively, these drivers had the effect of increasing the yield from finance charges and late fees for the nine months ended September 30, 2026 by approximately 25 basis points. For the three months ended September 30, 2026, the yield from finance charges and late fees decreased by approximately 25 basis points due to lower billed late fees in the current year period and higher Average Credit card and other loans. Our lower delinquency volumes and the gradual shift in product mix to a lower proportion of private label accounts, which tend to have higher billed late fees, have resulted in lower overall billed late fees.

Previous wording

•Interest on cash and investment securities decreased due to lower average interest rates, which decreased interest income by $7 million and $14 million, over the respective periods of comparison, as well as lower average balances in the six month period, which decreased interest income by $2 million.

Current wording

•Interest on cash and investment securities decreased due to lower average interest rates, which decreased interest income by $7 million and $21 million, over the respective periods of comparison, partially offset in the three month period by higher average balances, which increased interest income by $3 million.

Previous wording

Interest expense: Total interest expense decreased for the three and six months ended June 30, 2026, due to the following:

Current wording

Interest expense: Total interest expense decreased for the three and nine months ended September 30, 2026, due to the following:

Previous wording

$12 million. Interest on deposits decreased for the six month period due to lower average interest rates, which decreased interest expense by $27 million, partially offset by higher average DTC deposit balances, which increased funding costs by $22 million.

Current wording

•Interest on deposits increased due to higher average consumer deposit balances, which increased funding costs by $18 million and $39 million, over the respective periods of comparison, partially offset by lower average interest rates, which decreased interest expense by $9 million and $36 million, over those same respective periods.

Previous wording

•Interest on borrowings decreased due to lower average borrowings, which decreased funding costs by $17 million and $36 million, over the respective periods of comparison, and lower average interest rates, which decreased funding costs by $8 million and $15 million, over those same respective periods.

Current wording

•Interest on borrowings decreased due to lower average borrowings, which decreased funding costs by $13 million and $51 million, over the respective periods of comparison, and lower average interest rates, which decreased funding costs by $7 million and $21 million, over those same respective periods.

Previous wording

Non-interest income: Total non-interest income decreased for the three and six months ended June 30, 2026, due to the following:

Current wording

Non-interest income: Total non-interest income decreased for the three and nine months ended September 30, 2026, due to the following:

Previous wording

•Interchange revenue, net of retailer share arrangements, typically a contra-revenue item for us, increased due to an increase in costs associated with brand partner retailer share arrangements, partially offset by an increase in interchange and merchant discount fees due to the addition of new brand partners over the periods of comparison.

Current wording

•Interchange revenue, net of retailer share arrangements, typically a contra-revenue item for us, increased due to an increase in costs associated with brand partner retailer share arrangements, partially offset by an increase in interchange and merchant discount fees due to the scaling of new brand partners over the periods of comparison.

Previous wording

Provision for credit losses increased for the three and six months ended June 30, 2026. For the three month period, the increase was driven by a $3 million reserve release and net principal losses of $316 million, compared with a $74 million reserve release and net principal losses of $348 million in the prior year period. For the six month period, the increase was driven by a $31 million reserve release and net principal losses of $647 million, compared with a $143 million reserve release and net principal losses of $713 million in the prior year period. Our reserve rate was 11.23% and 11.89% as of June 30, 2026 and 2025, respectively, reflecting our improving credit metrics and higher-quality new account acquisitions. We continue to maintain appropriately prudent weightings on the economic scenarios in our credit reserve modeling to ensure the adequacy of our Allowance for credit losses given the wide range of potential macroeconomic outcomes, including ongoing uncertainty regarding trade policy and global conflicts, and downstream impacts on inflation and unemployment.

Current wording

Provision for credit losses increased for the three and nine months ended September 30, 2026. For the three month period, the increase was driven by a $21 million reserve build and net principal losses of $300 million, compared with a $28 million reserve release and net principal losses of $327 million in the prior year period. For the nine month period, the increase was driven by a $10 million reserve release and net principal losses of $947 million, compared with a $171 million reserve release and net principal losses of $1,040 million in the prior year period. Our reserve rate was 11.12% and 11.72% as of September 30, 2026 and 2025, respectively, reflecting our improving credit metrics and higher-quality new account acquisitions. We continue to maintain appropriately prudent weightings on the economic scenarios in our credit reserve modeling to ensure the adequacy of our Allowance for credit losses given the wide range of potential macroeconomic outcomes, including ongoing uncertainty regarding trade policy and global conflicts, and downstream impacts on inflation and unemployment.

Previous wording

(1)Adjusts Total non-interest expenses for the impacts from our debt repurchases, representing $13 million for the three months ended June 30, 2025, and $2 million and $15 million for the six months ended June 30, 2026 and 2025, respectively, and therefore represent Non-GAAP financial measures. See “Non-GAAP Financial Measures” and Table 6: Reconciliation of GAAP to Non-GAAP Financial Measures.

Current wording

(1)Adjusts Total non-interest expenses for the impacts from our debt repurchases, representing $1 million and $3 million for the three months ended September 30, 2026 and 2025, and $3 million and $19 million for the nine months ended September 30, 2026 and 2025, respectively, and therefore represent Non-GAAP financial measures. See “Non-GAAP Financial Measures” and Table 6: Reconciliation of GAAP to Non-GAAP Financial Measures.

Previous wording

Non-interest expenses: Total non-interest expenses were relatively flat for both the three and six months ended June 30, 2026. Adjusted total non-interest expenses, which represents a Non-GAAP financial measure and has been adjusted for the impacts from our debt repurchases, increased 3% and 1% for the three and six months ended June 30, 2026, respectively.

Current wording

Non-interest expenses: Total non-interest expenses increased for both the three and nine months ended September 30, 2026. Adjusted total non-interest expenses, which represents a Non-GAAP financial measure and has been adjusted for the impacts from our debt repurchases, also increased over those same periods of comparison.

Previous wording

•Employee compensation and benefits increased primarily due to higher wages related to annual merit increases and incentive compensation, as well as increased medical claims, partially offset by operational excellence initiatives.

Current wording

•Employee compensation and benefits increased primarily due to higher wages related to annual merit increases and incentive compensation, and during the nine month period increased medical claims, partially offset by operational excellence initiatives.

Previous wording

•Other decreased due primarily to the net impacts year-over-year from our debt repurchases.

Current wording

•Other was essentially flat during the three month period, and decreased during the nine month period due primarily to the net impacts year-over-year from our debt repurchases.

Previous wording

The Provision for income taxes increased for the three and six months ended June 30, 2026. The effective tax rate was 25.7% and 20.5% for the three months ended June 30, 2026 and 2025, respectively, and 25.4% and 24.5% for the six months ended June 30, 2026 and 2025, respectively. Both the increases in the Provision for income taxes and in the effective tax rates over the periods of comparison were primarily driven by a discrete tax benefit in the prior year period related to a California law change.

Current wording

The Provision for income taxes increased for the three and nine months ended September 30, 2026. The effective tax rate was 25.5% and 4.3% for the three months ended September 30, 2026 and 2025, respectively, and 25.5% and 17.5% for the nine months ended September 30, 2026 and 2025, respectively. Both the increases in the Provision for income taxes and in the effective tax rates over the periods of comparison were primarily attributable to a discrete tax benefit in the prior year.

Previous wording

Our primary sources of liquidity include cash generated from operating activities, our bank credit facility, issuances of senior and/or subordinated unsecured notes and preferred stock by our Parent Company, as well as financings through our securitization programs, and deposits with the Banks. In particular, our DTC deposits increased 16% year-over-year to $9.4 billion as of June 30, 2026, with our average direct-to-consumer deposits representing 50% of total funding, up from 45% a year ago. More broadly, we continuously evaluate opportunities to renew and expand our various sources of liquidity. We aim to satisfy our financing needs with a diverse set of funding sources, and we seek to maintain diversity of funding sources by type of instrument, by tenor and by investor base, among other factors, which we believe will mitigate the impact of disruptions in any one type of instrument, tenor or investor.

Current wording

Our primary sources of liquidity include cash generated from operating activities, our bank credit facility, issuances of senior and/or subordinated unsecured notes and preferred stock by our Parent Company, as well as financings through our securitization programs, and deposits with the Banks. In particular, our consumer deposits increased 21% year-over-year to $9.9 billion as of September 30, 2026, with our average consumer deposits representing 53% of total funding, up from 47% a year ago. More broadly, we continuously evaluate opportunities to renew and expand our various sources of liquidity. We aim to satisfy our financing needs with a diverse set of funding sources, and we seek to maintain diversity of funding sources by type of instrument, by tenor and by investor base, among other factors, which we believe will mitigate the impact of disruptions in any one type of instrument, tenor or investor.

Previous wording

The table below provides a summary of the credit ratings for the outstanding senior unsecured debt, subordinated debt and preferred stock of Bread Financial Holdings, Inc. In October 2025 all three credit rating agencies issued their updated credit ratings and related outlooks, which remain unchanged as of June 30, 2026, and were as follows:

Current wording

The table below provides a summary of the credit ratings for the outstanding senior unsecured debt, subordinated debt and preferred stock of our Parent Company as of the dates presented:

Previous wording

We also seek to maintain appropriate and stable credit ratings for our credit card securitizations. The table below provides a summary of the structured finance credit ratings for certain of the asset-backed securities issued through World Financial Network Credit Card Master Note Trust (WFNMNT) from the rating agencies (DBRS, S&P and Fitch), specifically the outstanding Class A notes of WFNMNT as of June 30, 2026:

Current wording

We also seek to maintain appropriate and stable credit ratings for our credit card securitizations. The table below provides a summary of the structured finance credit ratings for certain of the asset-backed securities issued through World Financial

Previous wording

Credit ratings are not a recommendation to buy or hold any securities and they may be revised or revoked at any time at the sole discretion of the rating agency. Downgrades in the ratings of our unsecured or secured debt could result in higher funding costs, as well as reductions in our borrowing capacity in the unsecured or secured debt markets. We believe our mix of funding, including the proportion of our DTC and wholesale deposits, to total funding, reduces the impact that a credit rating downgrade could have on our funding costs and capacity.

Current wording

Credit ratings are not a recommendation to buy or hold any securities and they may be revised or revoked at any time at the sole discretion of the rating agency. Downgrades in the ratings of our unsecured or secured debt could result in higher funding costs, as well as reductions in our borrowing capacity in the unsecured or secured debt markets. We believe our mix of funding, including the proportion of our consumer and wholesale deposits, to total funding, reduces the impact that a credit rating downgrade could have on our funding costs and capacity.

Previous wording

During the first half of 2026, we repurchased $50 million in aggregate principal amount of the 8.375% Fixed-Rate Reset Subordinated Notes Due 2035 in the open market with cash on hand.

Current wording

Throughout 2026, we have repurchased $74 million in aggregate principal amount of our 8.375% Fixed-Rate Reset Subordinated Notes Due 2035, in the open market, with cash on hand.

Previous wording

The Banks use a variety of deposit products to finance their operating activities, including funding for non-securitized credit card and other loans, and to fund their securitization enhancement requirements. The Banks offer DTC retail deposit products, including Individual Retirement Accounts, as well as deposits sourced through contractual arrangements with various financial counterparties (often referred to as wholesale deposits, and includes brokered deposits) and various non-maturity deposit products that are generally redeemable on demand by the customer, and as such have no scheduled maturity date. The Banks have also issued certificates of deposit with scheduled maturity dates ranging between July 2026 and June 2031, in denominations of at least $1,000, on which interest is paid either monthly or at maturity. The following table summarizes these retail and wholesale deposit products by type and associated attributes as of the dates presented:

Current wording

The Banks use a variety of deposit products to finance their operating activities, including funding for non-securitized credit card and other loans, and to fund their securitization enhancement requirements. The Banks offer consumer deposit products, including Individual Retirement Accounts, as well as deposits sourced through contractual arrangements with various financial counterparties (often referred to as wholesale deposits, and includes brokered deposits) and various non-maturity deposit products that are generally redeemable on demand by the customer, and as such have no scheduled maturity date. The Banks have also issued certificates of deposit with scheduled maturity dates ranging between October 2026 and September 2031, in denominations of at least $1,000, on which interest is paid either monthly or at maturity. The following table summarizes these consumer and wholesale deposit products by type and associated attributes as of the dates presented:

Previous wording

As of June 30, 2026 and December 31, 2025, retail deposits that exceeded applicable Federal Deposit Insurance Corporation (FDIC) insurance limits, which are generally $250,000 per depositor, per insured bank, per ownership category, were estimated to be $736 million (5% of Total deposits) and $638 million (5% of Total deposits), respectively. The measurement of estimated uninsured deposits aligns with regulatory guidelines.

Current wording

As of September 30, 2026 and December 31, 2025, consumer deposits that exceeded applicable Federal Deposit Insurance Corporation (FDIC) insurance limits, which are generally $250,000 per depositor, per insured bank, per ownership category, were estimated to be $786 million (5% of Total deposits) and $638 million (5% of Total deposits), respectively. The measurement of estimated uninsured deposits aligns with regulatory guidelines.

Previous wording

We sell the majority of the credit card loans originated by the Banks to certain of our master trusts (the Trusts). These securitization programs are a principal vehicle through which we finance the Banks’ credit card loans. For this purpose, we use a combination of public term asset-backed notes and private conduit facilities (the Conduit Facilities) with a consortium of lenders, including domestic money center, regional and international banks. Both our public term asset-backed notes and borrowings under the Conduit Facilities are included in Debt issued by consolidated Variable Interest Entities (VIEs) in the Consolidated Balance Sheets. During the three months ended June 30, 2026, $399 million of public term asset-backed notes matured and were repaid, of which $49 million were previously retained by us and therefore eliminated from the Consolidated Balance Sheets.

Current wording

We sell a majority of the credit card loans originated by the Banks to certain of our master trusts (the Trusts). These securitization programs are a principal vehicle through which we finance the Banks’ credit card loans. For this purpose, we use a combination of public term asset-backed notes and private conduit facilities (the Conduit Facilities) with a consortium of lenders, including domestic money center, regional and international banks. Both our public term asset-backed notes and borrowings under the Conduit Facilities in the form of variable funding notes (VFNs) are included in Debt issued by consolidated Variable Interest Entities (VIEs) in the Consolidated Balance Sheets. Throughout 2026, $399 million of public term asset-backed notes matured and were repaid, of which $49 million were previously retained by us and therefore eliminated from the Consolidated Balance Sheets.

Previous wording

(1)2009-VFN Conduit issued under World Financial Network Credit Card Master Note Trust (WFNMNT).

Current wording

(1)2009-VFN Conduit issued under World Financial Network Credit Card Master Note Trust (WFNMNT). In September 2026, the Maturity Date of the 2009-VFN Conduit was extended to October 2027.

Previous wording

(2)2009-VFN Conduit issued under World Financial Capital Master Note Trust (WFCMNT).

Current wording

(2)2009-VFN Conduit issued under World Financial Capital Master Note Trust (WFCMNT) was retired on September 1, 2026 pursuant to the related Omnibus Termination, Consent and Waiver Agreement.

Previous wording

(3)Maturity Date with respect to conduit borrowings means the date on which the revolving period for the applicable Conduit Facility expires. The revolving period may be extended or renewed (unless an early amortization event occurs prior to the Maturity Date). Absent the extension or renewal of the revolving period, the Conduit Facility shall enter controlled amortization on the Maturity Date and may no longer be drawn upon.

Current wording

(4)Maturity Date with respect to conduit borrowings means the date on which the revolving period for the applicable Conduit Facility expires. The revolving period may be extended or renewed (unless an early amortization event occurs prior to the Maturity Date). Absent the extension or renewal of the revolving period, the Conduit Facility shall enter controlled amortization on the Maturity Date and may no longer be drawn upon.

Previous wording

As of June 30, 2026, we had approximately $10.0 billion of securitized credit card loans. Securitizations require credit enhancements, which may be provided in the form of cash, spread deposits, excess collateral, additional loans and/or subordinated classes. The credit enhancement is principally based on the outstanding balances of the series issued by the Trusts and by the performance of the credit card loans in the Trusts.

Current wording

As of September 30, 2026, we had approximately $11.5 billion of securitized credit card loans. Securitizations require credit enhancements, which may be provided in the form of cash, spread deposits, excess collateral, additional loans and/or subordinated classes. The credit enhancement is principally based on the outstanding balances of the series issued by the Trusts and by the performance of the credit card loans in the Trusts.

Previous wording

On July 23, 2026, our Board of Directors declared a quarterly cash dividend of$21.56 per share on our Series A preferred stock, $30.32 per share on our Series B preferred stock, and $0.23 per share on our common stock, each payable on September 15, 2026, to the applicable stockholders of record at the close of business on August 31, 2026. The declaration and payment of future dividends on our preferred and common stock are subject to approval by our Board of Directors, based upon a review of relevant considerations and regulatory and other restrictions on our ability to pay dividends, including restrictions imposed by the terms of each series of our outstanding preferred stock.

Current wording

On October 22, 2026, our Board of Directors declared quarterly cash dividends of (i) $21.56 per share on our Series A preferred stock, (ii) $22.19 per share on our Series B preferred stock, and (iii) $0.25 per share on our common stock, each payable on December 15, 2026, to the applicable stockholders of record at the close of business on November 30, 2026. The declaration and payment of future dividends on our preferred and common stock are subject to approval by our Board of Directors, based upon a review of relevant considerations and regulatory and other restrictions on our ability to pay dividends, including restrictions imposed by the terms of each series of our outstanding preferred stock.

Previous wording

Cash Flows from Operating Activities primarily include Net income adjusted for (i) non-cash items included in Net income, such as Provision for credit losses, Depreciation and amortization, deferred taxes and other non-cash items, and (ii) changes in the balances of operating assets and liabilities, which can fluctuate in the normal course of business due to the amount and timing of payments. We generated Cash flows from operating activities of $1,020 million and $919 million for the six months ended June 30, 2026 and 2025, respectively. The Net cash provided by operating activities during these periods was primarily driven by cash generated from Net income after adjusting for the Provision for credit losses.

Current wording

Cash Flows from Operating Activities primarily include Net income adjusted for (i) non-cash items included in Net income, such as Provision for credit losses, Depreciation and amortization, deferred taxes and other non-cash items, and (ii) changes in the balances of operating assets and liabilities, which can fluctuate in the normal course of business due to the amount and timing of payments. We generated Cash flows from operating activities of $1,621 million and $1,524 million for the nine months ended September 30, 2026 and 2025, respectively. The Net cash provided by operating activities during these periods was primarily driven by cash generated from Net income after adjusting for the Provision for credit losses.

Previous wording

Cash Flows from Investing Activities primarily include changes in Credit card and other loans. Net cash used in investing activities was $355 million for the six months ended June 30, 2026 and Net cash provided by investing activities was $470 million for the six months ended June 30, 2025. The Net cash used in investing activities for the six months ended June 30, 2026 was primarily driven by Net principal losses and an increase in installment loans, partially offset by the seasonal paydown of credit card loans. The Net cash provided by investing activities for the six months ended June 30, 2025 was primarily due to the seasonal paydown of Credit card and other loans.

Current wording

Cash Flows from Investing Activities primarily include changes in Credit card and other loans. Net cash used in investing activities was $1,028 million for the nine months ended September 30, 2026 and Net cash provided by investing activities was $132 million for the nine months ended September 30, 2025. The Net cash used in investing activities for the nine months ended September 30, 2026 was primarily driven by Net principal losses and an increase in installment loans, partially offset by the seasonal paydown of credit card loans. The Net cash provided by investing activities for the nine months ended September 30, 2025 was primarily due to the seasonal paydown of Credit card and other loans.