OneMain Holdings, Inc. · NYSE:OMF
OneMain — Debt Investor Presentation (June 2021)
39 slides from OneMain's debt investor presentation, June 2021
Slide 1: OneMain Financial Company Overview & Social Bond Framework
OneMain Financial Company Overview & Social Bond Framework June 2021
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: Important Information
Important Information breach of a representation or warranty made in connection with such transactions; the costs and effects of any actual or alleged violations of any federal, state, or local laws, rules or regulations, including any associated litigation and damage to our reputation; the costs an
Slide 4: Company Overview
OneMain Financial. Company Overview
Slide 5: OneMain's differentiated business model
OneMain’s differentiated business model Customer Credit Capital & Liquidity Largest Non-Prime Installment Unparalleled Understanding of Significant Capital Generation* Lender, Uniquely Positioned to Target Customer From From Consistently Attractive Serve Customers Proprietary Experience / Data Retur
Slide 6: Our future vision
Our future vision To be the lender of choice for the non-prime consumer Unsecured Insurance Loans Financial Secured Wellness Progress to a Loans Meet the needs Credit better future of today OneMain Builder/ Products & services Lending products Customers Secured that increase Card Credit engagement,
Slide 7: Our customers are hardworking Americans
Our customers are hardworking Americans – Hardworking Americans face financial circumstances and are underserved by traditional financial institutions – They possess limited savings to cushion against unexpected life events – Many look to consolidate debt to reduce monthly payments and simplify thei
Slide 8: Our lending products meet customer needs
Our lending products meet customer needs OneMain determines Team member presents product and discusses eligibility for each product alternatives with customer each customer Customer-specific financial budgeting Unsecured Personal Loan Options reviewed Ability-to-pay ✓ Loan products analysis Secured
Slide 9: Responsible, affordable, and transparent lending
Responsible, affordable, and transparent lending OneMain’s goal is to improve the financial well-being of hardworking Americans by offering responsible transparent financial products • Payments that fit each unique situation and household budget Affordability • Self-cap rates at 36%, even when not r
Slide 10: Each customer receives a personalized budget
Each customer receives a personalized budget Ability-to-pay Budget worksheet1 Purpose Bill Consolidation ✓ Tailored, in-depth ✓ Take home pay (net Loan option 1 Loan option 2 review of borrower’s income) Type Unsecured Type Direct Auto Size $5,250 Size $13,000 financial needs ✓ Less: Debt payments A
Slide 11: Proprietary data, decisioning & AI models deliver superior loss performance
Proprietary data, decisioning & AI models deliver superior loss performance Underwriting Model Powered by AI … … Drives Superior Loss Performance Model Predictive Power1 2019 Net Charge-offs 165% 19.7% 158% 138% 126% 12.4% 8.5% 100% 6.0% 2.6% 0.7% FICO 2016 2017 2018 2019 Non-prime Prime Non-prime P
Slide 12: Continued focus on strengthening balance sheet
Continued focus on strengthening balance sheet Improved Profile Higher Ratings & Lower Cost of Funds 2016 1Q21 2016 1Q21 Net Leverage 7.7x1 4.7x ABS top tranche A AAA Undrawn $5B $7B conduits WA ABS spread2 2.3% 1.7% Unencumbered $4B $9B receivables Corporate / Bond B / B3 BB- / Ba3 (S&P / Moody’s)
Slide 13: Strong financial results
Strong financial results C&I Ending Net Receivables* Capital Generation* ($ in billions) ($ in millions) $1,134 $18.4 $1,056 $18.1 $975 $17.6 $725 $16.2 2018 1 2019 2020 1Q21 2018 1 2019 2020 1Q21 LTM C&I Net Charge-Off Ratio* C&I Operating Expense Ratio* 6.5% 6.0% 8.1% 5.5% 5.1% 7.5% 6.9% 6.9% 2018
Slide 14: OneMain Corporate Social Responsibility
OneMain Corporate Social Responsibility
Slide 15: Our approach to CSR is a natural extension of our mission
Our approach to CSR is a natural extension of our mission OneMain is committed to providing responsible lending solutions to help our customers meet their financial needs and improve their financial well-being Mission : to improve the financial well-being of hardworking Americans Customers Communiti
Slide 16: We are committed to our customers & communities
We are committed to our customers & communities Helped approximately 300,000 affected Offer financial education courses through customers with various borrower assistance tools partnership with EverFi for anyone, whether they due to the economic impacts of COVID-19 are a OneMain customer or not Dona
Slide 17: We focus on financial literacy, online and in our communities
We focus on financial literacy, online and in our communities Featured Articles Guidebooks Community Town Halls Micro-courses 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 purposes. OneMain does
Slide 18: 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 Race Gender Generation 18% 37% 47% 28% 14% 52% 62% 3% 27% 2% 3% 2% Caucasian African American Gen Z (<24) Male Female Millenials (25-43) Hispanic Asian Gen X (44-55) Other Baby Boomers (56-74) Grea
Slide 19: Supplier diversity is fundamental to our business
Supplier diversity is fundamental to our business “In 2018, we began partnering with OneMain Financial to deliver strategic value and provide complete risk visibility, remediation prioritization and collaboration across teams. We couldn’t be happier working with OneMain teams. OneMain's leadership i
Slide 20: Social Bond Framework
OneMain Financial. Social Bond Framework
Slide 21: OneMain Social Bond framework
OneMain Social Bond framework • An amount equivalent to the net proceeds will be allocated to finance or re-finance, in part or in full, a Use of Proceeds portfolio of new or existing loans (collectively, the “Eligible Portfolio”) that meet the Eligibility Criteria • The Loan Portfolio will be compr
Slide 22: Framework aligns with ICMA and UN goals
Framework aligns with ICMA and UN goals Alignment with ICMA Social Bond Principles (“SBP”) and UN Sustainable Development Goals (“SDG”) ICMA SBP Alignment Category 1.4 By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as Finan
Slide 23: S&P Global Ratings – Framework Alignment Opinion
S&P Global Ratings – Framework Alignment Opinion In our view, OneMain Financial’s (OneMain) Social Bond framework, is aligned with the four components of the Social Bond Principles 2020 (SBP). OneMain’s social bond framework aims to contribute to the support of socioeconomic progress and empowerment
Slide 24: 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: Individuals not included in the formal credit 1 economy (i.e. not connected to mainstream
Slide 25: 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 Selected attributes as Unequal Access Total OMF Population2 of 12/31/20: Population2 Loan Balance $7
Slide 26: Successful borrower outcomes throughout our portfolio
Successful borrower outcomes throughout our portfolio 30+ Delinquency*1 Net Charge-offs*1 4.0% 5.6% 5.5% 3.9% Rest of US Credit Insecure Areas Rest of US Credit Insecure Areas Highlights A loan you can afford: our ability-to-pay analysis results in low delinquency and charge-off rates that demonstra
Slide 27: We are a leading HY FIG Issuer
We are a leading HY FIG Issuer OMF is a benchmark HY FIG Issuer • Second largest HY FIG program, after Ford Credit • Unsecured funding mix increased from 44% to 57% since 2018 • Highly liquid bond complex with balanced maturities 2022-2030 • 3 Moody’s rating upgrades since 2017 OMF Bonds Outstanding
Slide 28: Appendix
Appendix OneMain Financial.
Slide 29: Consolidated Income Statements
Consolidated Income Statements (unaudited, $ in millions, except per share statistics) 1Q21 4Q20 3Q20 2Q20 1Q20 FY20 FY19 Interest Income $1,060 $1,096 $1,089 $1,077 $1,106 $4,368 $4,127 Interest Expense (235) (246) (255) (271) (255) (1,027) (970) Provision for Finance Receivable Losses 2 (134) (231
Slide 30: Consolidated Balance Sheets
Consolidated Balance Sheets (unaudited, $ in millions) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Cash and Cash Equivalents $1,301 $2,272 $1,944 $2,740 $4,203 Investment Securities 1,951 1,922 1,882 1,862 1,800 Net Finance Receivables 17,564 18,084 17,817 17,721 18,269 Unearned Insurance Pre
Slide 31: Balance Sheet Metrics
Balance Sheet Metrics (unaudited, $ in millions) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Long-Term Debt $16,789 $17,800 $17,531 $18,010 $20,443 Less: Junior Subordinated Debt (172) (172) (172) (172) (172) Adjusted Debt $16,617 $17,628 $17,359 $17,838 $20,271 Less: Available Cash and Cash
Slide 32: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, $ in millions) 1Q21 4Q20 3Q20 2Q20 1Q20 FY20 FY19 Consumer & Insurance $567 $491 $351 $128 $51 $1,021 $1,168 Other (3) (4) (2) (1) (1) (9) (3) Segment to GAAP Adjustment (18) (11) (8) (9) (7) (35) (67) Income Before Income Taxes - GAAP basis $546 $476
Slide 33: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) (unaudited, $ in millions) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Consumer & Insurance $17,569 $18,091 $17,826 $17,732 $18,283 Other 0 0 0 0 0 Segment to GAAP Adjustment (5) (7) (9) (11) (14) Net Finance Receivables - GAAP basis $17,564 $18,08
Slide 34: Consumer & Insurance Segment (Non-GAAP)
Consumer & Insurance Segment (Non-GAAP) (unaudited, $ in millions, except per share statistics) 1Q21 4Q20 3Q20 2Q20 1Q20 FY20 FY19 Interest Income $1,057 $1,093 $1,086 $1,074 $1,101 $4,353 $4,114 Interest Expense (233) (242) (250) (266) (249) (1,007) (947) Provision for Finance Receivable Losses 3 (
Slide 35: Consumer & Insurance Segment Metrics (Non-GAAP)
Consumer & Insurance Segment Metrics (Non-GAAP) (unaudited, $ in millions, except per share statistics) 1Q21 4Q20 3Q20 2Q20 1Q20 FY20 FY19 Revenue (1) 26.4% 26.3% 26.4% 25.3% 25.6% 25.9% 26.6% Net Charge-off (4.7%) (4.2%) (5.2%) (6.3%) (6.5%) (5.5%) (6.0%) Risk Adjusted Margin 21.7% 22.1% 21.2% 19.0
Slide 36: Consumer & Insurance Capital Metrics (Non-GAAP)
Consumer & Insurance Capital Metrics (Non-GAAP) (unaudited, $ in millions) 1Q21 4Q20 3Q20 2Q20 1Q20 FY20 FY19 Provision for Finance Receivable Losses ($3) $130 $232 $422 $530 $1,313 $1,105 Less: Net Charge-offs (205) (189) (232) (282) (296) (998) (1,028) Change in C&I Allowance for Finance Receivabl
Slide 37: Consumer & Insurance Credit Metrics (Non-GAAP)
Consumer & Insurance Credit Metrics (Non-GAAP) (unaudited, $ in millions) 1Q21 4Q20 3Q20 2Q20 1Q20 FY20 FY19 Gross Charge-offs $255 $231 $274 $322 $337 $1,163 $1,172 Gross Charge-off Ratio 5.81% 5.12% 6.15% 7.22% 7.36% 6.46% 6.86% Recoveries $50 $42 $42 $40 $41 $165 $143 Recovery Ratio 1.14% 0.94% 0
Slide 38: Other (Non-GAAP)
Other (Non-GAAP) (unaudited, $ in millions) 1Q21 4Q20 3Q20 2Q20 1Q20 FY20 FY19 Interest Income $1 $2 $1 $1 $2 $6 $9 Interest Expense (1) (1) (1) (1) (1) (4) (5) Net Interest Income after Provision for Finance 0 1 0 0 1 2 4 Receivable Losses Other Revenues 4 3 4 4 4 16 26 Other Expenses (6) (6) (6) (
Slide 39: Glossary
Glossary Select Calculations: • Adjusted Capital = Adjusted Tangible Common Equity + Allowance for Finance Receivable Losses (ALLL) + Deferred Tax Asset on Allowance • Adjusted Debt = Long-Term Debt – Junior Subordinated Debt • Adjusted Tangible Common Equity (TCE) = Total Shareholders’ Equity – Goo
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