Bread Financial Reports a Loss in Q4 as Higher Credit Losses and Reserve Builds Pressure Results

No-moat-rated Bread Financial Holdings reported weak fourth-quarter results as the benefit of impressive loan growth during the quarter was overwhelmed by a significant jump in the bank's provisioning for loan losses. Bread's net revenue growth during the quarter was excellent, increasing 21% from last year and 5.5% from last quarter to $1.03 billion. On a less positive note, the bank reported a net loss of $2.68 per share compared with a gain of $2.69 just last quarter. The decline in earnings was primarily due to higher provisioning, as Bread built $380 million in reserves this quarter versus a $187 million build in the prior-year quarter. While reserve builds are partially a reflection of Bread's strong loan growth, higher net charge-offs also played a role as Bread's credit losses have normalized at a faster rate than its peers.