Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q3 2023 Earnings Presentation
18 slides from Onemain's earnings presentation, Oct 25, 2023
Slide 1: 3Q23 Financial Results
3Q23 Financial Results NYSE: OMF | October 25, 2023
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 Future Vision is to Deepen & Broaden Customer Relationships
Our Future Vision is to Deepen & Broaden Customer Relationships Unsecured Financial Loans Wellness Secured Loans Insurance Progress to a Meet the needs better future Credit of today Card Products & Services that increase engagement, Lending products OneMain Bill Negotiation build loyalty & provide A
Slide 4: 3Q23 Financial Highlights
3Q23 Financial Highlights $3.3 billion $232 million $7.4 billion Originations Capital Generation* Undrawn Bank Facilities With conservative credit posture C&I Adj. Net Income* $189 million 6 renewals YTD $21.9 billion 17.2% $1.4 billion Managed Receivables* Net Interest Margin* ABS Issuance Up 7% Yo
Slide 5: 3Q23 Financial Results
3Q23 Financial Results ($ in millions, except Average Assets and Average Net Receivables in billions, and per share statistics) Earnings Summary C&I* Adjusted Earnings Summary 3Q23 2Q23 3Q22 3Q23 2Q23 3Q22 Consumer & Insurance* $252 $162 $246 Interest Income $1,166 $1,115 $1,116 Other Net Revenue 13
Slide 6: Originations & Receivables (C&I)
Originations & Receivables (C&I)* ($ in billions, unless noted) Loan Originations Highlights $3.9 $3.7 $3.6 $3.5 $3.3 • Continue to tighten underwriting in lower ROE segments; 8% YoY $2.8 decline in originations • Continued positive competitive dynamics and growth in secured lending distribution cha
Slide 7: Targeted & Disciplined BrightWay Credit Card Rollout
Targeted & Disciplined BrightWay® Credit Card Rollout ~340 thousand $232 million 85%+ digital 4.5+ stars Credit Cards Receivables Payments made in app App store ratings up ~110 thousand QoQ up $73 million QoQ Top spending categories Rewarding Retail milestones, great digital Restaurants experience G
Slide 8: Loan Delinquency & Net Charge-off Trends (C&I)
Loan Delinquency & Net Charge-off Trends (C&I)* ($ in millions) Highlights • 30+ delinquency down 25bps YTD, in line with normal seasonal trends • Net charge-offs continue to be supported by strong back-end collections and recoveries 30-89 Days Delinquent 90+ Days Delinquent $610 $621 $544 $534 $535
Slide 9: Portfolio performance is supported by credit tightening
Portfolio performance is supported by credit tightening Highlights • Origination vintages after August 2022 credit tightening are expected to be ~65% of portfolio by year-end 20231 • Portfolio delinquency reflects normal seasonal patterns • OneMain’s unique business model results in superior credit
Slide 10: Loss Reserve Trends (C&I)
Loss Reserve Trends (C&I)* ($ in millions) Highlights • Coverage ratio of 11.62% reflecting the continued uncertain macroeconomic environment $2,449 $2,392 $2,315 $2,298 $2,259 $2,132 $2,077 $1,968 11.58% 11.60% 11.66% 11.62% 11.44% 10.94% 10.96% 10.68% 1/1/2020 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 (D
Slide 11: Operating Expenses (C&I)
Operating Expenses (C&I)* ($ in millions) Highlights • 3Q23 operating expense of $373 includes continued investment for growth in new products and distribution channels, data science, technology and digital capabilities • Continued expense discipline driving operating leverage of our business Quarte
Slide 12: Balance Sheet and Funding
Balance Sheet and Funding Unsecured Bank Facilities ($ in billions, unless noted) Secured $7.4 $7.4 $7.4 $7.4 $7.4 Highlights $1.3 $1.3 $1.3 $1.3 $1.3 • Significant liquidity with $7.4 of committed bank facilities • Well-positioned funding profile with balanced debt mix and staggered maturities $6.2
Slide 13: Capital Allocation Framework
Capital Allocation Framework 1 2 Business Investment • Managed receivables* up 7% YoY Regular Dividend 3 • Continuing to invest in new • Board declared regular quarterly products and distribution channels, dividend of $1.00 per share Share Repurchases data science, technology and payable November 10
Slide 14: 2023 Strategic Priorities (C&I)
2023 Strategic Priorities (C&I)*1 Key Metrics 7/26/2023 10/25/2023 Managed Receivables Growth 5.0 – 8.0% ~7.0% Loan Net Charge-offs 7.0 – 7.5% ~7.4% Operating Expense Ratio ~7.1% ~7.0% *See appendix for Non-GAAP Financial Measures reconciliations along with defined terms. 1. See Cautionary Note Rega
Slide 15: Appendix
Appendix
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, $ in millions) 3Q23 2Q23 1Q23 4Q22 3Q22 FY22 FY21 Consumer & Insurance $250 $138 $236 $244 $247 $1,169 $1,788 Other (4) - (1) (1) 1 - (7) Segment to GAAP adjustment - - - (10) (2) (14) (40) Income before income taxes - GAAP basis $246 $138 $235 $233 $2
Slide 17: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-GAAP Measures (cont’d) (unaudited, $ in millions) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 Consumer & Insurance $21,068 $20,511 $19,810 $19,987 $19,754 Segment to GAAP adjustment (1) (1) (1) (1) (2) Net finance receivables - GAAP basis $21,067 $20,510 $19,809 $19,986
Slide 18: Defined Terms
Defined Terms • 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 cor