Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q4 2022 Earnings Presentation
22 slides from Onemain's earnings presentation, Feb 7, 2023
Slide 1: 4Q22 Financial Results
4Q22 Financial Results NYSE: OMF | February 7, 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: 2022 Highlights
2022 Highlights Advancing our mission to improve the financial well-being of hardworking Americans 6% $1,070 million 9 Named a Top 100 Most Loved Managed Capital Generated* Workplace® by Newsweek Receivables Growth* $13.9 billion $781 million Originations Capital Returned 9 Named as a Morningstar Su
Slide 4: FY2022 Financial Results
FY2022 Financial Results ($ in millions, except Average Assets and Average Net Receivables in billions, and per share statistics) Earnings Summary C&I* Adjusted Earnings Summary 2022 2021 2022 2021 Consumer & Insurance* $1,214 $1,918 Interest Income $4,429 $4,355 Other Net Revenue 494 421 Other 0 (6
Slide 5: 4Q22 Financial Highlights
4Q22 Financial Highlights Portfolio Financials Balance Sheet $3.5 billion $233 million $7.4 billion Originations Capital Generation* Undrawn Bank Facilities With conservative credit posture Capital Generation RoR* 4.6% Significant liquidity $20.8 billion 17.8% $796 million Managed Receivables* Net I
Slide 6: 4Q22 Financial Results
4Q22 Financial Results ($ in millions, except Average Assets and Average Net Receivables in billions, and per share statistics) Earnings Summary C&I* Adjusted Earnings Summary 4Q22 3Q22 4Q21 4Q22 3Q22 4Q21 Consumer & Insurance* $254 $250 $413 Interest Income $1,121 $1,116 $1,119 Other Net Revenue 13
Slide 7: Originations & Receivables (C&I)
Originations & Receivables (C&I)* ($ in billions, unless noted) Loan Originations Highlights $3.8 $3.9 $3.8 $3.9 $3.6 $3.5 Maintained tightened underwriting standards and closely monitoring $3.2 $3.0 performance given the evolving macroeconomic environment $2.3 Continued receivables growth despi
Slide 8: Targeted & Disciplined BrightWay Credit Card Rollout
Targeted & Disciplined BrightWay Credit Card Rollout Targeted and disciplined BrightWay rollout continues into 2023 >135,000 cards and $107 million in receivables at year end 2022 Expect receivables to reach $400 ² $500 million at year end 20231 Digital engagement remains strong: 85%+ of pay
Slide 9: Loan Delinquency & Net Charge-off Trends (C&I)
Loan Delinquency & Net Charge-off Trends (C&I)* ($ in millions) Highlights Recent delinquency trends consistent with seasonal patterns Net charge-offs continue to be supported by strong back-end collections and recoveries 30-89 Days Delinquent 90+ Days Delinquent $544 $610 $553 $474 $529 $418 $4
Slide 10: Unique Business Model Supports Better Credit Outcomes
Unique Business Model Supports Better Credit Outcomes Highlights 2QH0DLQ·V unique hybrid business model combines superior underwriting with a nationwide branch network, central teams, and digital tools Ability to work closely with customers across the delinquency spectrum drives better credit ou
Slide 11: Originations from new, higher credit quality vintages becoming a bigger part of the portfolio
Originations from new, higher credit quality vintages becoming a bigger part of the portfolio Highlights ~$6 billion originated since early Aug-2022 credit tightening ² performance in line with expectations and at approximately pre-pandemic levels Post tightening originations now represent 27% o
Slide 12: Operating Expenses (C&I)
Operating Expenses (C&I)* ($ in millions) Highlights FY22 operating expense of $1,424 includes continued investment for growth in new products and distribution channels, data science, technology and digital capabilities 4Q22/FY22 OpEx Ratio of 7.1% demonstrates continued expense discipline and t
Slide 13: Investing for Growth While Maintaining Expense Discipline
Investing for Growth While Maintaining Expense Discipline ($ in millions) C&I Operating Expense* New Products & Channels, Data Science, Technology & Digital Core Expense $1,424 $1,341 $1,290 + ~$50 $1,250 $317 $165 $257 $185 $1,125 +2 ² 3% $1,065 $1,084 $1,107 1 FY19 FY20 FY21 FY22 FY23E *See append
Slide 14: Balance Sheet and Funding
Balance Sheet and Funding Committed Bank Facilities Unsecured corporate revolver ($ in billions, unless noted) Conduit facilities $7.4 $7.4 Highlights $7.0 $7.0 $7.0 $1.0 $1.0 $1.3 $1.3 $1.3 Significant liquidity with $7.4 of committed bank facilities Well-positioned funding profile with balance
Slide 15: Capital Allocation Framework
Capital Allocation Framework 1 2 Invest in the business and portfolio growth while Provide a predictable regular 3 maintaining leverage of 4-6x dividend that can continue Portfolio generates strong return on adjusted capital* through a stress environment Make share repurchases a Grew managed rec
Slide 16: 2023 Strategic Priorities (C&I)
2023 Strategic Priorities (C&I)*1 ($ in millions) Key Metrics 2022 2023E Assumptions and Commentary Reflects a continuation of current conservative underwriting posture, prepared to adjust should macroeconomic environment change Low to mid- Managed Receivables Growth 6% single digits Includes $400 ²
Slide 17: Our Future Vision Deepens & Broadens Customer Relationships
Our Future Vision Deepens & Broadens Customer Relationships Unsecured Financial Loans Wellness Secured Loans Insurance Progress to a Meet the needs better future Credit of today Card Products & Services that increase engagement, Lending products OneMain Bill Negotiation build loyalty & provide Auto
Slide 18: Appendix
Appendix
Slide 19: Loss Reserve Trends (C&I)
Loss Reserve Trends (C&I)* ($ in millions) Highlights Reserve increase reflects growth in loan and card receivables and modest coverage increase to 11.6% $2,315 $2,259 $2,102 $2,132 $2,075 $2,070 $2,077 $2,011 $1,968 11.8% 11.6% 11.4% 11.1% 11.0% 11.0% 10.9% 10.9% 10.7% 1/1/2020 1Q21 2Q21 3Q21 4Q2
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, $ in millions) 4Q22 3Q22 2Q22 1Q22 4Q21 FY22 FY21 Consumer & Insurance $249 $251 $281 $396 $359 $1,177 $1,788 Other (1) 1 - - (1) - (7) Segment to GAAP adjustment (10) (2) (1) - (3) (14) (40) Income before income taxes - GAAP basis $238 $250 $280 $396
Slide 21: Reconciliation of Non-GAAP Measures (cont'd)
Reconciliation of Non-*$$30HDVXUHV FRQW·G (unaudited, $ in millions) 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 Consumer & Insurance $19,987 $19,754 $19,449 $18,981 $19,215 Segment to GAAP adjustment (1) (2) (1) (2) (3) Net finance receivables - GAAP basis $19,986 $19,752 $19,448 $18,979 $1
Slide 22: 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 ² cash and cash equivalents held at our regulated insurance subsidiaries or is unavailable for general cor