ONEMAIN HOLDINGS, INC. REPORTS THIRD QUARTER 2024 RESULTS

3Q 2024 Diluted EPS of $1.31

3Q 2024 C&I adjusted diluted EPS of $1.26

3Q 2024 Managed receivables of $24.3 billion

Declared quarterly dividend of $1.04 per share

Repurchased 420 thousand shares for $19 million in 3Q

NEW YORK, Oct. 30, 2024 /PRNewswire/ -- OneMain Holdings, Inc. (NYSE:OMF), the leader in offering nonprime consumers responsible access to credit, today reported pretax income of $207 million and net income of $157 million for the third quarter of 2024, compared to $246 million and $194 million, respectively, in the prior year quarter. Earnings per diluted share were $1.31 in the third quarter of 2024, compared to $1.61 in the prior year quarter.

On October 30, 2024, OneMain declared a quarterly dividend of $1.04 per share, payable on November 18, 2024, to record holders of the Company's common stock as of the close of business on November 12, 2024.

On October 16, 2024, the Board of Directors extended the share repurchase program to December 31, 2026. During the quarter, the Company repurchased approximately 420 thousand shares of common stock for $19 million.

"OneMain delivered excellent performance for the quarter with strong originations and revenue growth and continued improvements in credit trends," said Doug Shulman, Chairman and CEO of OneMain. "Our investments in technology, data science and new products position us well to drive shareholder value now and in the future."

The following segment results are reported on a non-GAAP basis. Refer to the required reconciliations of non-GAAP to comparable GAAP measures at the end of this press release.

Consumer and Insurance Segment ("C&I")

C&I adjusted pretax income was $202 million and adjusted net income was $151 million for the third quarter of 2024, compared to $252 million and $189 million, respectively, in the prior year quarter. Adjusted earnings per diluted share were $1.26 for the third quarter of 2024, compared to $1.57 in the prior year quarter.

Management runs the business based on C&I capital generation, which it defines as C&I adjusted net income excluding the after-tax change in C&I allowance for finance receivable losses while still considering the current period C&I net charge-offs. C&I capital generation was $211 million for the third quarter 2024, compared to $232 million in the prior year quarter. The decline was primarily driven by higher net charge-offs, partially offset by increased revenue from portfolio growth in the current quarter compared to the prior year period.

Managed receivables, which includes loans serviced for our whole loan sale partners and auto finance loans originated by third parties, were $24.3 billion at September 30, 2024, up 11% from $21.9 billion at September 30, 2023.

Consumer loan originations totaled $3.7 billion in the third quarter of 2024, up 13% from $3.3 billion in the prior year quarter.

Total revenue, comprising interest income and total other revenue, was $1.5 billion in the second quarter of 2024, up 8% from $1.3 billion in the prior year quarter. Interest income in the third quarter of 2024 was $1.3 billion, up 9% from $1.2 billion in the prior year quarter. This growth was driven by higher average net finance receivables.

Interest expense was $299 million in the third quarter of 2024, up 13% from $265 million in the prior year quarter, due to an increase in average debt to support our receivables growth and a higher average cost of funds.

The provision for finance receivable losses was $512 million in the third quarter of 2024, up $102 million compared to the prior year period. During the third quarter of 2024, the allowance for finance receivable losses increased $80 million driven by growth in receivables.

C&I Select Delinquency and Loss Ratios

September 30, 2024

June 30, 2024

September 30, 2023

Consumer loans:

30+ days delinquency ratio

5.63

%

5.45

%

5.55 %

90+ days delinquency ratio

2.49

%

2.33

%

2.57 %

30-89 days delinquency ratio

3.14

%

3.13

%

2.98 %

Net charge-offs

7.33

%

8.29

%

6.68 %

 

Operating expense for the third quarter of 2024 was $396 million, up 6% from $373 million in the prior year quarter reflecting continued investment in the business and the addition of Foursight, partially offset by focused expense initiatives.

Funding and Liquidity

As of September 30, 2024, the Company had principal debt balances outstanding of $21.4 billion, 59% of which was secured. The Company had $577 million of cash and cash equivalents, which included $266 million of cash and cash equivalents held at regulated insurance subsidiaries or for other operating activities that are unavailable for general corporate purposes.

Cash and cash equivalents, together with the Company's $1.1 billion of undrawn committed capacity from an unsecured corporate revolver, $7.0 billion of undrawn committed capacity under revolving conduit facilities and credit card variable funding note facilities, and $9.0 billion of unencumbered receivables, provides significant liquidity resources.

Conference Call & Webcast Information

OneMain management will host a conference call and webcast to discuss the Company's results, outlook, and related matters at 9:00 am Eastern Time on Wednesday, October 30, 2024. Both the call and webcast are open to the general public. The general public is invited to listen to the call by dialing 800-343-1703 (U.S. domestic) or 785-424-1116 (international), and using conference ID 14920, or via a live audio webcast through the Investor Relations section of the OneMain Financial website at http://investor.onemainfinancial.com. For those unable to listen to the live broadcast, a replay will be available on our website after the event. An investor presentation will be available on the Investor Relations page of the OneMain Financial website prior to the start of the conference call.

About OneMain Holdings, Inc.

OneMain Financial (NYSE:OMF) is the leader in offering nonprime consumers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans. We empower our customers to solve today's problems and reach a better financial future through personalized solutions available online and in 1,300 locations across 44 states. OneMain is committed to making a positive impact on the people and the communities we serve. For additional information, please visit www.OneMainFinancial.com.

Use of Non-GAAP Financial Measures

We report the operating results of Consumer and Insurance using the Segment Accounting Basis, which (i) reflects our allocation methodologies for interest expense and operating costs, to reflect the manner in which we assess our business results and (ii) excludes the impact of applying purchase accounting (eliminates premiums/discounts on our finance receivables and long-term debt at acquisition, as well as the amortization/accretion in future periods). Consumer and Insurance adjusted pretax income (loss), Consumer and Insurance adjusted net income (loss), and Consumer and Insurance adjusted earnings (loss) per diluted share are key performance measures used to evaluate the performance of our business. Consumer and Insurance adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes restructuring charges, net loss resulting from repurchases and repayments of debt, acquisition-related transaction and integration expenses, regulatory settlements, and other items and strategic activities, which include direct costs associated with COVID-19 and the expense associated with cash-settled stock-based awards. We believe these non-GAAP financial measures are useful in assessing the profitability of our segment.

We also use Consumer and Insurance pretax capital generation and Consumer and Insurance capital generation, non-GAAP financial measures, as a key performance measure of our segment. Consumer and Insurance pretax capital generation represents Consumer and Insurance adjusted pretax income, as discussed above, and excludes the change in our Consumer and Insurance allowance for finance receivable losses in the period while still considering the Consumer and Insurance net charge-offs incurred during the period. Consumer and Insurance capital generation represents the after-tax effect of Consumer and Insurance pretax capital generation. We believe that these non-GAAP measures are useful in assessing the capital created in the period impacting the overall capital adequacy of the Company. We believe that the Company's reserves, combined with its equity, represent the Company's loss absorption capacity.

We utilize these non-GAAP measures in evaluating our performance. Additionally, these non-GAAP measures are consistent with the performance goals established in OMH's executive compensation program. These non-GAAP financial measures should be considered supplemental to, but not as a substitute for or superior to, income (loss) before income taxes, net income, or other measures of financial performance prepared in accordance with GAAP.

This document contains summarized information concerning the Company and its business, operations, financial performance and trends. No representation is made that the information in this document is complete. For additional financial, statistical and business related information see the Company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission (the "SEC"), as well as the Company's other reports filed with the SEC from time to time, which are or will be available in the Investor Relations section of the OneMain Financial website (www.omf.com) and the SEC's website (www.sec.gov).

Cautionary Note Regarding Forward-Looking StatementsThis document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements preceded by, followed by or that otherwise include the words "anticipates," "appears," "assumes," "believes," "can," "continues," "could," "estimates," "expects," "forecasts," "foresees," "goal," "intends," "likely," "objective," "plans," "projects," "target," "trend," "remains," and similar expressions or future or conditional verbs such as "could," "may," "might," "should," "will" or "would" are intended to identify forward-looking statements, but these words are not the exclusive means of identifying forward-looking statements.

Forward-looking statements are not statements of historical fact but instead represent only management's current beliefs regarding future events, objectives, goals, projections, strategies, performance, and future plans, and underlying assumptions and other statements related thereto. You should not place undue reliance on these forward-looking statements. By their nature, forward-looking statements are subject to risks, uncertainties, assumptions and other important factors that may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements. Important factors that could cause actual results, performance, or achievements to differ materially from those expressed in or implied by forward-looking statements include, without limitation, the following: adverse changes and volatility in general economic conditions, including the interest rate environment and the financial markets; the sufficiency of our allowance for finance receivable losses; increased levels of unemployment and personal bankruptcies; the current inflationary environment and related trends affecting our customers; natural or accidental events such as earthquakes, hurricanes, pandemics, floods or wildfires affecting our customers, collateral, or our facilities; a failure in or breach of our information, operational or security systems or infrastructure or those of third parties, including as a result of cyber incidents, war or other disruptions; the adequacy of our credit risk scoring models; geopolitical risks, including recent geopolitical actions outside the U.S.; adverse changes in our ability to attract and retain employees or key executives; increased competition or adverse changes in customer responsiveness to our distribution channels or products; changes in federal, state, or local laws, regulations, or regulatory policies and practices or increased regulatory scrutiny of our business or industry; risks associated with our insurance operations; the costs and effects of any actual or alleged violations of any federal, state, or local laws, rules or regulations; the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority; our substantial indebtedness and our continued ability to access the capital markets and maintain adequate current sources of funds to satisfy our cash flow requirements; our ability to comply with all of our covenants; the effects of any downgrade of our debt ratings by credit rating agencies; and other risks and uncertainties described in the "Risk Factors" and "Management's Discussion and Analysis" sections of the Company's most recent Form 10-K filed with the SEC and in the Company's other filings with the SEC from time to time.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. You should specifically consider the factors identified in this document that could cause actual results to differ before making an investment decision to purchase our securities. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

Forward looking statements included in this document speak only as of the date on which they were made. We undertake no obligation to update or revise any forward-looking statements, whether written or oral, to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments or otherwise, except as required by law. 

OneMain Holdings, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Quarter Ended

Fiscal Year

(unaudited, $ in millions, except per share amounts)

Sep 30,2024

Jun 30,2024

Mar 31,2024

Dec 31,2023

Sep 30,2023

2023

2022

Interest income

$       1,282

$       1,219

$       1,173

$       1,187

$       1,167

$       4,564

$       4,435

Interest expense

(301)

(297)

(277)

(270)

(267)

(1,019)

(892)

Net interest income

981

922

896

917

900

3,545

3,543

Provision for finance receivable losses

(512)

(575)

(431)

(446)

(410)

(1,721)

(1,402)

Net interest income after provision for finance receivable losses

469

347

465

471

490

1,824

2,141

Insurance

111

111

112

113

113

448

445

Investment

24

30

32

32

32

116

61

Gain on sales of finance receivables

6

6

6

10

11

52

63

Net loss on repurchases and repayments of debt

(1)

(12)

(2)

(1)

—

—

(27)

Other

42

39

32

32

29

119

87

Total other revenues

182

174

180

186

185

735

629

Operating expenses

(401)

(382)

(391)

(388)

(381)

(1,530)

(1,457)

Insurance policy benefits and claims

(43)

(47)

(50)

(49)

(48)

(189)

(158)

Total other expenses

(444)

(429)

(441)

(437)

(429)

(1,719)

(1,615)

Income before income taxes

207

92

204

220

246

840

1,155

Income taxes

(50)

(21)

(49)

(55)

(52)

(199)

(283)

Net income

$          157

$            71

$          155

$          165

$          194

$          641

$          872

Weighted average number of diluted shares

120.1

120.2

120.2

120.1

120.8

120.6

124.4

Diluted EPS

$         1.31

$         0.59

$         1.29

$         1.38

$         1.61

$         5.32

$         7.01

Book value per basic share

$       26.87

$       26.33

$       26.81

$       26.60

$       25.86

$       26.60

$       24.91

Return on assets

2.5 %

1.1 %

2.6 %

2.7 %

3.2 %

2.7 %

3.9 %

Change in allowance for finance receivable losses

$         (81)

$         (79)

$            26

$         (31)

$         (57)

$       (185)

$       (216)

Net charge-offs

(431)

(496)

(457)

(415)

(353)

(1,536)

(1,186)

Provision for finance receivable losses

$       (512)

$       (575)

$       (431)

$       (446)

$       (410)

$    (1,721)

$    (1,402)

Note:

Quarters may not sum to fiscal year due to rounding.

On January 1, 2023, the Company adopted ASU 2018-12, Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts. In accordance with this standard, the Company has recast its fiscal year 2022 financial information to reflect the effects of the adoption.

 

OneMain Holdings, Inc.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of

(unaudited, $ in millions)

Sep 30,2024

Jun 30,2024

Mar 31,2024

Dec 31,2023

Sep 30,2023

Assets

Cash and cash equivalents

$          577

$          667

$          831

$       1,014

$       1,190

Investment securities

1,581

1,681

1,691

1,719

1,635

Net finance receivables

23,075

22,365

21,083

21,349

21,067

Unearned insurance premium and claim reserves

(765)

(753)

(749)

(771)

(772)

Allowance for finance receivable losses

(2,645)

(2,564)

(2,454)

(2,480)

(2,449)

Net finance receivables, less unearned insurance premium and claim reserves and allowancefor finance receivable losses

19,665

19,048

17,880

18,098

17,846

Restricted cash and restricted cash equivalents

693

630

599

534

580

Goodwill

1,474

1,474

1,437

1,437

1,437

Other intangible assets

288

289

259

260

260

Other assets

1,300

1,296

1,211

1,232

1,198

Total assets

$     25,578

$     25,085

$     23,908

$     24,294

$     24,146

Liabilities and Shareholders' Equity

Long-term debt