Bread Financial Holdings, Inc. reported a challenging third quarter for fiscal year 2024, with significant declines in revenue and profitability compared to the same period in 2023. Total net interest and non-interest income for the quarter ended September 30, 2024, was $983 million, down 5% from $1,031 million in Q3 2023. This decline was primarily driven by a decrease in credit sales, which totaled $6.5 billion, reflecting a 3% year-over-year decrease attributed to self-moderated consumer spending and strategic credit tightening.
The company's net income for Q3 2024 plummeted to $2 million, a stark contrast to $171 million reported in Q3 2023, marking a 99% decrease. The income from continuing operations also saw a significant drop, falling to $3 million from $173 million in the prior year. The net interest margin decreased to 18.8%, down from 20.6% in Q3 2023, influenced by reduced late fees and higher funding costs.
For the nine months ended September 30, 2024, total net interest and non-interest income was $2.913 billion, down 11% from $3.273 billion in the same period in 2023. Net income for the nine-month period also decreased by 60%, totaling $270 million compared to $675 million in 2023. The adjusted net income per diluted share for Q3 2024 was $1.83, down 47% from $3.42 in Q3 2023.
The company experienced an increase in the provision for credit losses, with a reserve build of $22 million in Q3 2024, compared to no reserve build in Q3 2023. Net principal losses rose to $347 million in Q3 2024 from $304 million in the same quarter of the previous year. The allowance for credit losses decreased due to lower loan balances, maintaining a conservative reserve rate of 12.2%.
Total non-interest expenses for Q3 2024 increased by 14% to $574 million, primarily due to a $96 million increase from repurchased Convertible Notes. However, adjusted total non-interest expenses decreased by 5% when excluding this impact.
Strategically, the company is responding to regulatory changes, including the CFPB's final rule on credit card late fees, and has implemented a mitigation strategy amid ongoing litigation. The financial outlook for 2024 anticipates slower credit sales growth and a low-single-digit decline in average credit card and other loans compared to 2023. The company also repurchased $238 million of Convertible Notes in August 2024, incurring a total of $96 million in inducement expenses related to these transactions.
About BREAD FINANCIAL HOLDINGS, INC.
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