Bread Financial™ Announces Approval of $30 Million Share Repurchase Program
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Insights
The announcement of a $30 million share buyback program by Bread Financial Holdings, Inc. represents a strategic use of capital that can potentially lead to an increase in shareholder value. Share buybacks typically signal a company's confidence in its own financial health and future prospects. By reducing the number of shares outstanding, earnings per share (EPS) may increase, potentially making the stock more attractive to investors.
However, it is crucial to evaluate the company's balance sheet strength and opportunity cost of the buyback. If the company is using debt to finance the repurchase, or if it's foregoing other investment opportunities with higher returns, the long-term benefits may be compromised. Investors should assess the company's previous capital allocation efficiency and compare the repurchase yield to the cost of capital to determine the buyback's financial prudence.
The timing and scale of Bread Financial's share repurchase program can impact market perception. The buyback is set to offset dilution from employee restricted stock units, which is a common practice among public companies to align employee interests with those of shareholders. The market often views repurchase programs as a positive development, provided the company is not perceived to be trying to artificially inflate the stock price.
It's important to monitor the stock's trading volume and price trends before and after the buyback announcement. If the company repurchases shares when the stock is undervalued, it could be seen as a savvy move. Conversely, if repurchases occur when the stock is overvalued, it might suggest poor timing or a lack of better investment opportunities, potentially leading to negative market sentiment.
When a company like Bread Financial Holdings announces a share buyback, it must comply with SEC Rule 10b-18, which provides a 'safe harbor' under which companies can repurchase shares without being deemed to manipulate the market. Compliance with this rule involves meeting certain conditions regarding the manner, timing, price and volume of the repurchases.
Investors should note that the repurchase program is subject to market conditions, legal and regulatory restrictions and required approvals, which means that the execution of the buyback is not guaranteed. The company has the flexibility to suspend or terminate the program, which can affect the anticipated positive outcomes of the buyback. Stakeholders should be aware of these contingencies and the possible impact on the company's financial strategy.
COLUMBUS, Ohio, Feb. 21, 2024 (GLOBE NEWSWIRE) -- Bread Financial Holdings, Inc. (NYSE: BFH), a tech-forward financial services company that provides simple, personalized payment, lending and saving solutions, today announced that its Board of Directors has approved a new plan to purchase up to
As part of Bread Financial’s continued commitment to its stated capital priorities, the share buyback is designed to offset the impact of dilution associated with issuances of employee restricted stock units.
The board’s authorization permits the Company to make open market share repurchases from time-to-time through December 31, 2024 in compliance with SEC Rule 10b-18 and subject to market conditions and other factors, including legal and regulatory restrictions and required approvals, up to the aggregate amount authorized by the board. The repurchase program does not obligate the Company to acquire any specific number of shares and may be suspended or terminated at any time.
About Bread Financial™
Bread Financial™ (NYSE: BFH) is a tech-forward financial services company providing simple, personalized payment, lending and saving solutions. The company creates opportunities for its customers and partners through digitally enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Driven by a digital-first approach, data insights and white-label technology, Bread Financial delivers growth for its partners through a comprehensive suite of payment solutions that includes private label and co-brand credit cards and Bread Pay™ buy now, pay later products. Bread Financial also offers direct-to-consumer products that give customers more access, choice and freedom through its branded Bread Cashback™ American Express® Credit Card and Bread Savings™ products.
Headquartered in Columbus, Ohio, Bread Financial is powered by its approximately 7,000 global associates and is committed to sustainable business practices. To learn more about Bread Financial, visit BreadFinancial.com or follow us on Facebook, LinkedIn, Twitter/X and Instagram.
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, including, among other things, statements regarding our intended share repurchases and the expected impact on share count dilution. We believe that our expectations are based on reasonable assumptions. Forward-looking statements, however, are based only on currently available information and our current beliefs, expectations and assumptions, and are subject to a number of risks and uncertainties that are difficult to predict and, in many cases, beyond our control, including risk and uncertainties 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. 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.
Investors/Analysts
Brian Vereb
Brian.Vereb@BreadFinancial.com
Susan Haugen
Susan.Haugen@BreadFinancial.com
Media
Rachel Stultz
Rachel.Stultz@BreadFinancial.com
FAQ
What did Bread Financial Holdings, Inc. (BFH) announce regarding share repurchases?
What is the duration of the share buyback program announced by BFH?
What factors can influence BFH's share repurchase activities?
Is BFH obligated to acquire a specific number of shares through the repurchase program?
