Onemain Holdings, Inc. · NYSE:OMF
Onemain — Debt Investor Presentation (August 2024)
36 slides from Onemain's debt investor presentation, August 2024
Slide 1: OneMain Financial Business Update and Social Bond Framework
OneMain Financial OneMain Financial Business Update and Social Bond Framework NYSE: OMF | August 2024
Slide 2: Important Information
Important Information This presentation contains summarized consolidated information concerning OneMain Holdings, Inc. (the “Company”) and the Company’s business, operations, financial performance and trends. No representation is made that the information in this presentation is complete. For additi
Slide 3: Business Update
Business Update OneMain Financial Better Borrowing. Brighter Future.
Slide 4: OneMain Customers
Our vision is to be the lender of choice for the nonprime consumer Meet their Progress to a needs today better future Unsecured loans OneMain Financial wellness Secured loans Customers Insurance Auto finance Bill negotiation Credit cards Secured card 4
Slide 5: OneMain is a trusted partner to nonprime consumers
OneMain is a trusted partner to nonprime consumers ~18 million 3.2 million customers served1 current customer accounts2 ~70 million 90% data records on individual customer satisfaction3 Americans ~$200 billion ~20% of originations1 market share4 Note: Data as of December 31, 2023, unless otherwise n
Slide 6: We provide responsible access to credit
We provide responsible access to credit Personalized service through ~631 average FICO ✓ ✓ community-based branch network ✓ Affordable products with transparent, $65k to $70k annual gross income ✓ easy-to-understand pricing and terms ✓ Pressure-free approach with help from ~10 years in the same resi
Slide 7: Our nationwide branch network provides us with unique capabilities
Our nationwide branch network provides us with unique capabilities Unique capabilities largest branch network ~1,300 branches1 7th (including banks)2 Personalized service Staff performs both originations and collections Thoughtful customer budgeting and underwriting Community of prospects live withi
Slide 8: Branch network enhanced by digital and central capabilities
Our nationwide branch network is enhanced by digital and central capabilities Branch Enhance customer Drive operating engagement and efficiencies satisfaction Originations Servicing Collections Enable multiple Increase capacity product delivery Supported by a strong compliance and control culture 8
Slide 9: We have built a differentiated business model
We have built a differentiated business model Digital Branch-based Regional banks Competitive Advantages OneMain lenders lenders & credit unions Nonprime focus / ~18MM ~$200B Customers Cumulative proprietary data Served2 Originations2 Funding breadth ~90% $7.9B Of New Customer Unencumbered and acces
Slide 10: Proprietary data and advanced analytics drive performance
Proprietary data and advanced analytics drive performance across the business Proprietary data Advanced analytics ~$200B cumulative originations1 Underwriting Originations 3.2MM current customer accounts2 ~18MM customers served1 ~50% customers do business with us at least twice3 Servicing Marketing
Slide 11: Unique underwriting combines advanced analytics with human interaction
Our unique underwriting combines advanced analytics with human interaction Proprietary data, history, customer furnished info Bureau data Alternative data vendors Bank data Identity verification Enhanced Income and asset verification by human interaction Consultative budgeting process / ability-to-p
Slide 12: We deliver superior credit results through the cycle
We deliver superior credit results through the cycle Quarterly credit performance since 4Q 2016 12.0% 10.8% 7.4% 6.3% 5.7% 3.7% 3.7% Average loan net charge-offs 2.2% 1.9% 1.3% Standard deviation OneMain dv01 KBRA dv01 KBRA (C&I* Consumer Loan Metrics) nonprime1 nonprime2 total1 prime2 Avg FICO3,4 ~
Slide 13: Credit performance underpinned by strong front book
Credit performance underpinned by strong front book Front book1 / back book mix Front book1 (as of 2Q 2024) Performing in line with expectations 76% of consumer loan receivables 57% 76% Back book Will continue to decline over time 43% 24% 43% of delinquent consumer loan receivables % of ending net %
Slide 14: We are expanding our products to meet more customer needs
We are expanding our products to meet more customer needs Simplifying and Everyday needs Credit building managing debt and transactions Episodic Purchasing a car Saving and expenses budgeting Our customers’ needs Our products Personal loans BrightWay cards Auto finance Trim by OneMain and optional p
Slide 15: 2Q24 New Products Highlights
2Q24 New Products Highlights ($ in millions) BrightWay® Credit Cards Auto Finance Everyday transactions Financing at the point of purchase • Digital first offering that rewards good credit behavior • More than a decade of experience in secured lending with best-in-class capabilities and strong credi
Slide 16: Business model produces strong results through the cycle
Business model produces strong results through the cycle Managed Receivables* Capital Generation* ($ in billions) ($ in millions) $22.2 $20.8 $1,303 $19.6 $18.4 $18.1 $1,056 $1,064 $975 $794 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 C&I Consumer Loan Net Charge-off Ratio Opex Ratio* 7.4% 7.5
Slide 17: Our balance sheet is a strength and a competitive differentiator
Our balance sheet is a strength and a competitive differentiator $3-4 billion 4.2 years $0 annual debt issuance weighted-average bond unsecured debt maturities OMFIT | ODART | Unsecured notes | Whole loan sale maturity until March 2026 Balanced AAA $1.1 billion debt mix ABS top tranche April ABS iss
Slide 18: Strong liquidity runway of 24+ months
Strong liquidity runway of 24+ months ($ in billions) Liquidity sources Undrawn secured credit facilities $6.7 16 diverse bank partners provide $8.0B of available credit facilities Undrawn unsecured credit facility $1.3 Capital generation* under ’08/’09 stress >$0.5 ~$8.5 Conservative assumptions An
Slide 19: Economic model protects capital in changing economic conditions
Economic model protects capital in changing economic conditions ~2x loss coverage in income statement $3.5B 12.5% Reserves (net of tax) 7.7 – 8.3% ~6.5% Adjusted tangible common equity* LTM pre-provision return 1 Normalized C&I 2024E C&I 2Q24 adjusted capital * net charge-offs * net charge-offs* *Se
Slide 20: Strong compliance and controls culture
Strong compliance and controls culture Seasoned regulatory and compliance teams consistent with legacy bank ownership 3 Lines of defense ~5,600 Branch Team Members responsible Business for day-to-day risk mitigation Legal, Risk, HR, Finance and Compliance ensure accurate documentation of policies an
Slide 21: OneMain Impact
OneMain Impact OneMain Financial Better Borrowing. Brighter Future.
Slide 22: We are a socially responsible company
We are a socially responsible company Underserved communities Financial wellness Community engagement Large presence in credit-at-risk Bill negotiation, subscription Expanding our free financial communities1 cancellation, budgeting, education program and transaction tracking nationwide for high scho
Slide 23: Committed to our people, customers, and communities
We are committed to our people, customers, and communities Our approach is guided by our three priorities: Building trust and strong Providing responsible lending solutions with Contributing to our communities through relationships with our stakeholders affordable rates and ability-to-pay underwriti
Slide 24: We focus on financial literacy, online and in our communities
We focus on financial literacy, online and in our communities Featured Articles Guidebooks Financial Education Workshops Family Resource Center Budgeting Tools $267 $320 $427 $480 $199 $239 $318 $358 $166 $199 $265 $298 $147 $176 $235 $264 Note: This calculator is provided only for educational purpo
Slide 25: Our customers reflect the diversity of Americans
Our customers reflect the diversity of Americans and often come to us with a need that isn’t being met Race1 Gender1 Generation2 20% 41% 18% 49% 28% 51% 57% 2% 24% 2% 3% 1% 4% Caucasian Asian Male Millennials Gen Z African American Native American Female Gen X Greatest Generation Hispanic Multiracia
Slide 26: Longstanding support for D&I brokers
Longstanding support for D&I brokers “Academy is honored to be a partner to OneMain Financial. We applaud their effort supporting customers in underserved communities by facilitating access to loans, guiding individuals through personal budgets, and helping to create financial literacy. A Social Bon
Slide 27: Social Bond Framework
Social Bond Framework OneMain Financial Better Borrowing. Brighter Future.
Slide 28: OneMain Social Bond Framework
OneMain Social Bond Framework • OMFC intends to allocate an amount equivalent to the net proceeds from this offering to finance or refinance, in part or in full, a portfolio of new or existing loans that meet the eligibility criteria of our Social Bond Framework (the “Framework”). Pending Use of Pro
Slide 29: OneMain's Social Bond Framework
OneMain’s Social Bond Framework • The Loan Portfolio will be comprised of loans (“Eligible Loans”) to individuals residing with mailing addresses in those counties identified as ‘Credit-At-Risk’ or ‘Credit Insecure’ counties (“Credit Insecure Areas”)1 Eligibility Criteria • Furthermore, at least 75%
Slide 30: S&P Global Ratings – Framework Alignment Opinion
S&P Global Ratings – Framework Alignment Opinion Through its social bond framework, OneMain intends to support socioeconomic progress and the financial empowerment of borrowers in underserved areas that face credit-restrictive lending options and many of whom are lower-income individuals. OneMain wo
Slide 31: What is the Fed Credit Insecurity Index?
What is the Fed Credit Insecurity Index? Higher index scores identify communities with a larger share of residents unlikely to obtain ‘credit at choice’ The index score is based on measures of two populations: 1 Individuals not included in the formal credit economy (i.e. not connected to mainstream
Slide 32: Fair and affordable terms to all borrowers
Fair and affordable terms to all borrowers OneMain is committed to the communities in which our team members live and work; evidenced in part by our portfolio being over indexed to underserved areas1 A loan you can afford: • Our ability-to-pay analysis results in low delinquency and charge-off rates
Slide 33: Appendix
Appendix OneMain Financial Better Borrowing. Brighter Future.
Slide 34: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, $ in millions) 2Q24 FY23 FY22 FY21 FY20 FY19 Consumer & Insurance $145 $845 $1,169 $1,788 $1,021 $1,168 Other - (6) - (7) (9) (3) Segment to GAAP adjustment (53) 1 (14) (40) (35) (67) Income before income taxes - GAAP basis $92 $840 $1,155 $1,741 $977
Slide 35: Defined Terms
Defined Terms • Adjusted capital = adjusted tangible common equity + allowance for finance receivable losses (ALLL), net of tax • 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
Slide 36: Thank you
Thank you Please reach out with any questions CONTACTS David Schulz Ryan Gamble Treasurer Assistant Treasurer David.Schulz@omf.com Ryan.Gamble@omf.com (212) 359-2426 (212) 359-2429
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