Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q3 2022 Earnings Presentation
20 slides from Onemain's earnings presentation, Oct 27, 2022
Slide 1: 3Q22 Financial Results
3Q22 Financial Results NYSE: OMF | October 26, 2022
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: 3Q22 Highlights
3Q22 Highlights Growth From Expanded • Managed Receivables* of $20.5 billion, up $1.3 billion, or 7%, vs 3Q21 Customer Value • Targeted and disciplined BrightWay credit card rollout underway Proposition • Continue to invest in new products and channels, data science, and digital capabilities to posi
Slide 4: 3Q22 Financial Results
3Q22 Financial Results ($ in millions, except Average Assets and Average Net Receivables in billions, and per share statistics) Earnings Summary C&I* Adjusted Earnings Summary 3Q22 2Q22 3Q21 3Q22 2Q22 3Q21 Consumer & Insurance* $250 $311 $421 Interest Income $1,116 $1,104 $1,111 Other Net Revenue 13
Slide 5: Future Vision Deepens & Broadens Customer Relationships
Future Vision Deepens & Broadens Customer Relationships OneMain Customers Unsecured Financial Loans Wellness Secured Loans Insurance Progress to a Meet the needs better future Credit of today Card Products & Services that Bill increase engagement, Lending products Negotiation build loyalty & provide
Slide 6: Targeted & Disciplined BrightWay Credit Card Rollout
Targeted & Disciplined BrightWay Credit Card Rollout • Targeted and disciplined BrightWay rollout underway • 104,000 cards and $79 million in receivables at September 30 • Card spend utilized for everyday purchases • Digital engagement remains strong: 85%+ of payments made in app • App store ratings
Slide 7: Originations & Receivables (C&I)
Originations & Receivables (C&I)* ($ in billions unless noted) Personal Loan Originations Highlights $3.8 $3.9 $3.8 $3.9 $3.6 • Significantly tightened underwriting standards in 3Q22, closely $3.2 $2.9 $3.0 monitoring performance given the evolving macroeconomic $2.3 environment • Continued growth d
Slide 8: Personal Loan Delinquency & Net Charge-off Trends (C&I)
Personal Loan Delinquency & Net Charge-off Trends (C&I)* ($ in millions) Highlights • Early delinquency stable with QoQ change consistent with historical seasonal trends • High-touch business model positions OneMain to work closely with customers across the delinquency spectrum • Net charge-offs in
Slide 9: OneMain's Unique Business Model Drives Better Credit Outcomes
OneMain’s Unique Business Model Drives Better Credit Outcomes Highlights • Across the industry, lower credit quality/lower FICO consumers feeling economic pressures • OneMain has proven ability to dynamically adjust underwriting and drive results in an evolving macroeconomic environment Change in Pe
Slide 10: In a Position of Strength Through the Cycle
In a Position of Strength Through the Cycle Our Strengths Our Priorities Strong balance sheet, long liquidity runway and Actively Managing Credit & Continuing to Serve our Customers Responsibly significant loss absorption capacity • Significantly tightened our underwriting standards while also attra
Slide 11: Loss Reserve Trends (C&I)
Loss Reserve Trends (C&I)* ($ in millions) Highlights • Reserve coverage increase to 11.4% from 11.0% • Reserve increase due to receivables growth and weakened macroeconomic environment $2,259 $2,102 $2,132 $2,075 $2,070 $2,077 $1,968 $2,011 11.8% 11.4% 11.1% 11.0% 11.0% 10.9% 10.9% 10.7% 1/1/2020 1
Slide 12: Operating Expenses (C&I)
Operating Expenses (C&I)* ($ in millions) Highlights • 3Q22 operating expense of $359 million o Majority of year-over-year increase reflects continued investment in new products and distribution channels, data science, and digital capabilities o 2020 and 2021 expenses reflect aggressive cost reducti
Slide 13: Balance Sheet Metrics
Balance Sheet Metrics Liquidity Undrawn Bank Capacity ($ in billions unless noted) Available Cash Highlights • Well-positioned funding profile with balanced debt mix and staggered maturities $7.3 $6.4 $6.4 $6.5 $6.9 • 24+ months of liquidity under stress scenarios1 • Issued $1 billion 2-year revolvi
Slide 14: Uniquely Positioned Balance Sheet
Uniquely Positioned Balance Sheet Improved Profile Higher Ratings & Lower Cost of Funds 2016 3Q22 2016 3Q22 Net Leverage* 7.7x1 5.6x ABS top tranche A+ AAA Total Bank Capacity $5B $7.4B Interest Expense* 5.5%2 4.5% Unencumbered loans* $4B $9.5B Corporate / Bond B / B3 BB / Ba2 (S&P / Moody’s) Secure
Slide 15: Capital Allocation Framework
Capital Allocation Framework 1 2 Invest in the business and portfolio growth while Provide a predictable regular 3 maintaining leverage of 4-6x dividend that can continue • Portfolio generates 30%+ return on adjusted capital* through a stress environment Make share repurchases a • Continuing to inve
Slide 16: 2022 Strategic Priorities (C&I)
2022 Strategic Priorities (C&I)*1 ($ in millions) July 27, 2022 Current Managed Receivables Growth Lower end of 5-10% range Unchanged Net Charge-offs 6.1 – 6.5% Lower end of range Operating Expense Ratio ~7.1% Unchanged Capital Generation $1,010 – $1,060 Higher end of range *See appendix for Non-GAA
Slide 17: Appendix
Appendix
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, $ in millions) 3Q22 2Q22 1Q22 4Q21 3Q21 Consumer & Insurance $251 $281 $396 $359 $388 Other 1 0 0 (1) (1) Segment to GAAP adjustment (2) (1) 0 (3) (11) Income before income taxes - GAAP basis $250 $280 $396 $355 $376 Pretax income - segment accounting
Slide 19: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) (unaudited, $ in millions) 9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021 Consumer & Insurance $19,754 $19,449 $18,981 $19,215 $18,847 Segment to GAAP adjustment (2) (1) (2) (3) (4) Net finance receivables - GAAP basis $19,752 $19,448 $18,979 $19,212
Slide 20: Glossary
Glossary • Adjusted capital = adjusted tangible common equity + allowance for finance receivable losses (ALLL), net of tax • Available cash and cash equivalents = cash and cash equivalents – cash and cash equivalents held at our regulated insurance subsidiaries or is unavailable for general corporat