Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q2 2024 Earnings Presentation
19 slides from Onemain's earnings presentation, Jul 31, 2024
Slide 1: 2Q24 Financial Results
2Q24 Financial Results NYSE: OMF | July 31, 2024
Slide 2: Important Information
Important Information The following slides are part of a presentation by OneMain Holdings, Inc. (the "Company") in connection with reporting quarterly financial results and are intended to be viewed as part of that presentation. No representation is made that the information in these slides is compl
Slide 3: Our Vision is to be the Lender of Choice for the Nonprime Consumer
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 3
Slide 4: 2Q24 Financial Highlights
2Q24 Financial Highlights $3.6 billion $136 million 3.2 million Originations Capital Generation* Customer Accounts With conservative credit posture C&I Adj. Net Income* $122 million Up 19% YoY $23.7 billion $1.4 billion $1.1 billion Managed Receivables* C&I Total Revenue* 5.99% ABS Issuance Up 11% Y
Slide 5: 2Q24 Financial Results
2Q24 Financial Results ($ in millions, except Average Assets and Average Net Receivables in billions, and per share statistics) Earnings Summary C&I* Adjusted Earnings Summary 2Q24 1Q24 2Q23 2Q24 1Q24 2Q23 Consumer & Insurance* $163 $233 $162 Interest Income $1,210 $1,172 $1,115 Other Net Revenue 13
Slide 6: Originations & Receivables (C&I)
Originations & Receivables (C&I)* ($ in billions, unless noted) Consumer Loan Originations Highlights $3.7 $3.6 $3.3 • $3.6 billion of originations in 2Q24 reflects normal seasonal trends $3.0 $2.8 $2.5 • YoY decrease driven by credit tightening and pricing actions • Auto finance originations of $29
Slide 7: 2Q24 New Products Highlights
2Q24 New Products Highlights ($ 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 8: Consumer Loan Delinquency Trends (C&I)
Consumer Loan Delinquency Trends (C&I)*1 ($ in millions) Highlights 30+ Days Delinquent $1,294 • 30-89 delinquency of 2.97%, down 31bps YTD, consistent with normal $1,156 $1,153 $1,125 $1,042 $1,036 seasonal patterns • Excluding impact of slowing originations, 30-89 delinquency trends 6.16% would ha
Slide 9: Portfolio Performance is Supported by Credit Tightening (C&I)
Portfolio Performance is Supported by Credit Tightening (C&I)*1 Highlights • 30-89 delinquency of 2.97%, down 31bps YTD, consistent with normal seasonal patterns; excluding impact of slowing originations, 30-89 delinquency trends would have been better than normal seasonal patterns • Front book2 is
Slide 10: Consumer Loan Net Charge-off Trends (C&I)
Consumer Loan Net Charge-off Trends (C&I)* ($ in millions) Highlights • 2Q24 consumer loan net charge-offs of 8.29%, down 29bps QoQ, in line with expectations • Continue to see strong back-end collections and recoveries $478 $445 $408 $376 $379 $347 8.58% 8.29% 7.72% 7.60% 7.70% 6.68% 1Q23 2Q23 3Q23
Slide 11: Loss Reserve Trends (C&I)
Loss Reserve Trends (C&I)* ($ in millions) Highlights • $117 million increase in reserve reflects Foursight acquisition and organic growth of total portfolio during the quarter • 2Q24 reserve coverage of 11.5% $2,571 $2,449 $2,480 $2,454 $2,392 $2,298 11.6% 11.7% 11.6% 11.6% 11.6% 11.5% 1Q23 2Q23 3Q
Slide 12: Operating Expenses (C&I)
Operating Expenses (C&I)* ($ in millions) Highlights • 2Q24 OpEx Ratio of 6.4%, down 65bps from 7.1% in 2Q23; continue to expect FY24 OpEx Ratio of ~6.7% as we invest for future growth • 2Q24 operating expense of $374 million, up 1% YoY, reflects investment in new products and capabilities and acqui
Slide 13: Balance Sheet & Funding
Balance Sheet & Funding Unsecured Bank Facilities ($ in billions, unless noted) Secured $7.7 $8.0 $8.0 $7.4 $7.4 Highlights $1.3 $1.3 $1.3 $1.3 $1.3 • Well-positioned funding profile with balanced debt mix, staggered maturities and significant liquidity $6.2 $6.2 $6.4 $6.7 $6.7 • Issued $1.1 billion
Slide 14: Capital Allocation Framework
Capital Allocation Framework 1 2 Business Investment • Balance sheet growth Regular Dividend 3 • Continue to invest in new products • Board declared regular quarterly and channels, data science, technology and digital capabilities dividend of $1.04 per share, Share Repurchases payable August 16 • Re
Slide 15: 2024 Strategic Priorities (C&I)
2024 Strategic Priorities (C&I)* Key Metrics February 7, 2024 July 31, 2024 Managed Receivables ~$24.0 billion ~$24.5 billion Revenue Growth 6.0 – 8.0% 6.0 – 8.0% Interest Expense1 ~5.2% ~5.2% Consolidated Net Charge-offs2 7.7 – 8.3% 7.7 – 8.3% Operating Expense Ratio ~6.7% ~6.7% *See appendix for N
Slide 16: Appendix
Appendix
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, $ in millions) 2Q24 1Q24 4Q23 3Q23 2Q23 FY23 FY22 Consumer & Insurance $145 $203 $220 $250 $138 $845 $1,169 Other - - (1) (4) - (6) - Segment to GAAP adjustment (53) 1 1 - - 1 (14) Income before income taxes - GAAP basis $92 $204 $220 $246 $138 $840 $1
Slide 18: Reconciliation of Non-GAAP Measures (cont’d)
Reconciliation of Non-GAAP Measures (cont’d) (unaudited, $ in millions) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Consumer & Insurance $22,428 $21,083 $21,349 $21,068 $20,511 Segment to GAAP adjustment (63) - - (1) (1) Net finance receivables - GAAP basis $22,365 $21,083 $21,349 $21,067 $20
Slide 19: 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