ONEMAIN HOLDINGS, INC. REPORTS FIRST QUARTER 2024 RESULTS

• 1Q 2024 Diluted EPS of $1.29
• 1Q 2024 C&I adjusted diluted EPS of $1.45
• 1Q 2024 Managed receivables of $22.0 billion
• Raised quarterly dividend by 4% to $1.04 per share
• Repurchased 109 thousand shares for $5 million in 1Q

NEW YORK, April 30, 2024 /PRNewswire/ -- OneMain Holdings, Inc. (NYSE:OMF), the leader in offering nonprime consumers responsible access to credit, today reported pretax income of $204 million and net income of $155 million for the first quarter of 2024, compared to $235 million and $179 million, respectively, in the prior year quarter. Earnings per diluted share were $1.29 in the first quarter of 2024, compared to $1.48 in the prior year quarter. The current year quarter included a $27 million restructuring charge associated with expense initiatives that are expected to drive efficiencies across the organization and create capacity for future strategic investments.

On April 30, 2024, OneMain declared a quarterly dividend of $1.04 per share, a 4% increase from the prior quarterly dividend of $1.00 per share. The dividend is payable on May 17, 2024, to record holders of the Company's common stock as of the close of business on May 10, 2024.

During the quarter, the Company repurchased approximately 109 thousand shares of common stock for $5 million.

"We are very pleased with our performance so far in 2024 and encouraged by the direction of credit," said Doug Shulman, Chairman and CEO of OneMain. "We remain highly focused on serving our customers well through the cycle while also executing on our strategic initiatives, including new products and channels."

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 $233 million and adjusted net income was $175 million for the first quarter of 2024, compared to $236 million and $177 million, respectively, in the prior year quarter. Adjusted earnings per diluted share were $1.45 for the first quarter of 2024, compared to $1.46 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 $155 million for the first quarter 2024, compared to $179 million in the prior year quarter. The decline was driven by higher net charge-offs and higher interest expense partially offset by an increase in interest income in the current quarter compared to the prior year period.

Managed receivables, which includes loans serviced for our whole loan sale partners, were $22.0 billion at March 31, 2024, up 6% from $20.6 billion at March 31, 2023.

Consumer loan originations totaled $2.5 billion in the first quarter of 2024, down 10% from $2.8 billion in the prior year quarter.

Interest income and total revenue in the first quarter of 2024 was $1.2 billion and $1.4 billion, respectively, up 7% from prior year quarter of $1.1 billion and $1.3 billion. This growth was driven by higher average net finance receivables.

Interest expense was $276 million in the first quarter of 2024, up 16% from $238 million in the prior year quarter, due to an increase in average debt as we continue to grow the business and a higher average cost of funds.

The provision for finance receivable losses was $431 million in the first quarter of 2024, up $46 million compared to the prior year period. During the first quarter of 2024, the allowance for finance receivable losses decreased $26 million, driven by a seasonal decline in receivables.

Operating expense for the first quarter of 2024 was $362 million, flat to the prior year quarter reflecting continued investment in the business offset by improved efficiencies across the organization.

Funding and Liquidity

As of March 31, 2024, the Company had principal debt balances outstanding of $19.8 billion, 58% of which was secured. The Company had $831 million of cash and cash equivalents, which included $165 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 $1.3 billion of undrawn committed capacity from an unsecured corporate revolver, $6.7 billion of undrawn committed capacity under revolving conduit facilities and credit card variable funding note facilities, and $8.3 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 Tuesday, April 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 90154, 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, regulatory settlements, net gain or loss resulting from repurchases and repayments of debt, acquisition- related transaction and integration expenses, 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 Statements

This 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.

 

 

 

 

 

 

 

 

Defined Terms

• Adjusted capital = adjusted tangible common equity + allowance for finance receivable losses (ALLL), net of tax
• Adjusted tangible common equity (TCE) = total shareholders' equity – goodwill – other intangible assets + junior subordinated debt
• Auto finance = financing at the point of purchase through a network of auto dealerships
• Available cash and cash equivalents = cash and cash equivalents – cash and cash equivalents held at our regulated insurance subsidiaries or is unavailable for general corporate purposes
• Average assets = average of monthly average assets (assets at the beginning and end of each month divided by two) in the period
• Average managed receivables = C&I average net receivables + average receivables serviced for our whole loan sale partners
• C&I adjusted diluted EPS = C&I adjusted net income (non-GAAP) / weighted average diluted shares
• Capital generation = C&I adjusted net income – change in C&I allowance for finance receivable losses, net of tax
• Capital generation return on receivables = annualized capital generation / C&I average net receivables
• Consumer loans = personal loans and auto finance
• Finance receivables serviced for our whole loan sale partners = unpaid principal balance plus accrued interest of loans sold as part of our whole loan sale program
• Managed receivables = C&I net finance receivables + finance receivables serviced for our whole loan sale partners
• Net adjusted debt = long-term debt – junior subordinated debt – available cash and cash equivalents
• Net leverage = net adjusted debt / adjusted capital
• Opex ratio = annualized C&I operating expenses / average managed receivables
• Other net revenue = other revenues – insurance policy benefits and claims expense
• Personal loans = loans secured by titled collateral or unsecured and offered through our branch network, central operations, or digital platform
• Pretax capital generation = C&I pretax adjusted net income – change in C&I allowance for finance receivable losses
• Purchase volume = credit card purchase transactions + cash advances – returns
• Return on assets (ROA) = annualized net income / average total assets
• Return on receivables (C&I ROR) = annualized C&I adjusted net income / C&I average net receivables
• Total Revenue = C&I interest income + C&I total other revenue
• Unencumbered receivables = unencumbered unpaid principal balance of personal loans and credit cards. For precompute personal loans, unpaid principal balance is the gross contractual payments less the unaccreted balance of unearned finance charges. Credit cards exclude billed interest, fees, and closed accounts with balances

OneMain Holdings, Inc.

Investor Contact:

Peter R. Poillon, 212-359-2432

[email protected]

Media Contact:

Kelly Ogburn, 410-537-9028

[email protected]

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SOURCE OneMain Holdings, Inc.