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OneMain Holdings, Inc. Reports Third Quarter 2023 Results

10/25/2023
  • 3Q 2023 Diluted EPS of $1.61
  • 3Q 2023 C&I adjusted diluted EPS of $1.57
  • 3Q 2023 Managed receivables of $21.9 billion
  • Declared quarterly dividend of $1.00 per share
  • Repurchased 268 thousand shares for $11 million in 3Q

OneMain Holdings, Inc. (NYSE: OMF), the leader in offering nonprime customers responsible access to credit, today reported pretax income of $246 million and net income of $194 million for the third quarter of 2023, compared to $246 million and $185 million, respectively, in the prior year quarter. Earnings per diluted share were $1.61 in the third quarter of 2023, compared to $1.49 in the prior year quarter.

On October 25, 2023, OneMain declared a quarterly dividend of $1.00 per share, payable on November 10, 2023, to record holders of the Company's common stock as of the close of business on November 6, 2023.

During the quarter, the Company repurchased approximately 268 thousand shares of common stock for $11 million.

“OneMain remains very well positioned in the current environment,” said Doug Shulman, Chairman and CEO of OneMain. “Our strong balance sheet, superior credit risk management, and new products position us well for the future.”

The following segment results are reported on a non-GAAP basis. Refer to the required reconciliations of non-GAAP to comparable GAAP measures at the end of this press release.

Consumer and Insurance Segment (“C&I”)

C&I adjusted pretax income was $252 million and adjusted net income was $189 million for the third quarter of 2023, compared to $246 million and $184 million, respectively, in the prior year quarter. Adjusted earnings per diluted share were $1.57 for the third quarter of 2023, compared to $1.49 in the prior year quarter.

Management runs the business based on C&I capital generation, which it defines as C&I adjusted net income excluding the after-tax change in C&I allowance for finance receivable losses while still considering the current period C&I net charge-offs. C&I capital generation was $232 million for the third quarter 2023, compared to $280 million in the prior year quarter. The decline was driven by higher net charge-offs in the current quarter compared to the prior year period.

Managed receivables, which includes loans serviced for our whole loan sale partners, were $21.9 billion at September 30, 2023, up 7% from $20.5 billion at September 30, 2022.

Personal loan originations totaled $3.3 billion in the third quarter of 2023, down 8% from $3.6 billion in the prior year quarter.

Interest income in the third quarter of 2023 was $1.2 billion, up 4% from $1.1 billion in the prior year quarter, reflecting higher average net finance receivables, offset by a lower portfolio yield.

Personal loan yield was 22.2% in the third quarter of 2023, down from 22.6% in the prior year quarter, reflecting impacts from the current macroeconomic environment.

The provision for finance receivable losses was $410 million in the third quarter of 2023, down $10 million compared to the prior year period. During the third quarter of 2023, the allowance for finance receivable losses increased $57 million, driven by growth in receivables.

 

September

June 30,

September

C&I Select Delinquency and Loss Ratios

30, 2023

2023

30, 2022

Personal loans:

 

 

 

 

 

 

30+ days delinquency ratio

5.55

%

5.09

%

5.22

%

90+ days delinquency ratio

2.57

%

2.33

%

2.41

%

30-89 days delinquency ratio

2.98

%

2.76

%

2.81

%

Net charge-offs

6.68

%

7.60

%

5.89

%

Operating expense for the third quarter of 2023 was $373 million, up 4% from $359 million in the prior year quarter reflecting continued investment in the business.

Funding and Liquidity

As of September 30, 2023, the Company had principal debt balances outstanding of $20.1 billion, 59% of which was secured. The Company had $1.2 billion of cash and cash equivalents, which included $169 million of cash and cash equivalents held at regulated insurance subsidiaries or for other operating activities that are unavailable for general corporate purposes.

Cash and cash equivalents, together with the Company’s $1.25 billion of undrawn committed capacity from an unsecured corporate revolver, $6.2 billion of undrawn committed capacity under revolving conduit facilities, and $7.5 billion of unencumbered loans, provides significant liquidity resources.

Conference Call & Webcast Information

OneMain management will host a conference call and webcast to discuss the Company's results, outlook, and related matters at 9:00 am Eastern Time on Wednesday, October 25, 2023. Both the call and webcast are open to the general public. The general public is invited to listen to the call by dialing 800-343-1703 (U.S. domestic) or 785-424-1116 (international), and using conference ID 59337, or via a live audio webcast through the Investor Relations section of the OneMain Financial website at http://investor.onemainfinancial.com. For those unable to listen to the live broadcast, a replay will be available on our website after the event. An investor presentation will be available on the Investor Relations page of the OneMain Financial website prior to the start of the conference call.

About OneMain Holdings, Inc.

OneMain Financial (NYSE: OMF) is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans. We empower our customers to solve today’s problems and reach a better financial future through personalized solutions available online and in 1,400 locations across 44 states. OneMain is committed to making a positive impact on the people and the communities we serve. For additional information, please visit www.OneMainFinancial.com.

Use of Non-GAAP Financial Measures

We report the operating results of Consumer and Insurance using the Segment Accounting Basis, which (i) reflects our allocation methodologies for interest expense and operating costs, to reflect the manner in which we assess our business results and (ii) excludes the impact of applying purchase accounting (eliminates premiums/discounts on our finance receivables and long-term debt at acquisition, as well as the amortization/accretion in future periods). Consumer and Insurance adjusted pretax income (loss), Consumer and Insurance adjusted net income (loss), and Consumer and Insurance adjusted earnings (loss) per diluted share are key performance measures used to evaluate the performance of our business. Consumer and Insurance adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes regulatory settlements, net gain or loss resulting from repurchases and repayments of debt, the expense associated with cash- settled stock-based awards, and other items and strategic activities, which include direct costs associated with COVID-19 and restructuring charges. We believe these non-GAAP financial measures are useful in assessing the profitability of our segment.

We also use Consumer and Insurance pretax capital generation and Consumer and Insurance capital generation, non-GAAP financial measures, as a key performance measure of our segment. Consumer and Insurance pretax capital generation represents Consumer and Insurance adjusted pretax income, as discussed above, and excludes the change in our Consumer and Insurance allowance for finance receivable losses in the period while still considering the Consumer and Insurance net charge-offs incurred during the period. Consumer and Insurance capital generation represents the after-tax effect of Consumer and Insurance pretax capital generation. We believe that these non-GAAP measures are useful in assessing the capital created in the period impacting the overall capital adequacy of the Company. We believe that the Company’s reserves, combined with its equity, represent the Company's loss absorption capacity.

We utilize these non-GAAP measures in evaluating our performance. Additionally, these non-GAAP measures are consistent with the performance goals established in OMH’s executive compensation program. These non-GAAP financial measures should be considered supplemental to, but not as a substitute for or superior to, income (loss) before income taxes, net income, or other measures of financial performance prepared in accordance with GAAP.

This document contains summarized information concerning the Company and its business, operations, financial performance and trends. No representation is made that the information in this document is complete. For additional financial, statistical and business related information see the Company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission (the “SEC”), as well as the Company’s other reports filed with the SEC from time to time, which are or will be available in the Investor Relations section of the OneMain Financial website (www.omf.com) and the SEC's website (www.sec.gov).

Cautionary Note Regarding Forward-Looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements preceded by, followed by or that otherwise include the words “anticipates,” “appears,” “assumes,” “believes,” “can,” “continues,” “could,” “estimates,” “expects,” “forecasts,” “foresees,” “goal,” “intends,” “likely,” “objective,” “plans,” “projects,” “target,” “trend,” “remains,” and similar expressions or future or conditional verbs such as “could,” “may,” “might,” “should,” “will” or “would” are intended to identify forward-looking statements, but these words are not the exclusive means of identifying forward-looking statements.

Forward-looking statements are not statements of historical fact but instead represent only management’s current beliefs regarding future events, objectives, goals, projections, strategies, performance, and future plans, and underlying assumptions and other statements related thereto. You should not place undue reliance on these forward-looking statements. By their nature, forward-looking statements are subject to risks, uncertainties, assumptions and other important factors that may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements. Important factors that could cause actual results, performance, or achievements to differ materially from those expressed in or implied by forward-looking statements include, without limitation, the following: adverse changes and volatility in general economic conditions, including the interest rate environment and the financial markets; the sufficiency of our allowance for finance receivable losses; increased levels of unemployment and personal bankruptcies; the current inflationary environment and related trends affecting our customers; natural or accidental events such as earthquakes, hurricanes, pandemics, floods or wildfires affecting our customers, collateral, or our facilities; a failure in or breach of our information, operational or security systems or infrastructure or those of third parties, including as a result of cyber-attacks, war or other disruptions; the adequacy of our credit risk scoring models; adverse changes in our ability to attract and retain employees or key executives; increased competition or adverse changes in customer responsiveness to our distribution channels or products; changes in federal, state, or local laws, regulations, or regulatory policies and practices or increased regulatory scrutiny of our business or industry; risks associated with our insurance operations; the costs and effects of any actual or alleged violations of any federal, state, or local laws, rules or regulations; the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority; our substantial indebtedness and our continued ability to access the capital markets and maintain adequate current sources of funds to satisfy our cash flow requirements; our ability to comply with all of our covenants; the effects of any downgrade of our debt ratings by credit rating agencies; and other risks and uncertainties described in the “Risk Factors” and “Management’s Discussion and Analysis” sections of the Company’s most recent Form 10-K filed with the SEC and in the Company’s other filings with the SEC from time to time.

The liquidity runway scenario disclosed in the press release is based on management’s estimates and assumptions for internal strategic planning purposes and does not constitute guidance or financial projections and should not be regarded or relied on as such.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. You should specifically consider the factors identified in this document that could cause actual results to differ before making an investment decision to purchase our securities. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

Forward looking statements included in this document speak only as of the date on which they were made. We undertake no obligation to update or revise any forward-looking statements, whether written or oral, to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments or otherwise, except as required by law.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

Quarter Ended

Fiscal Year

 

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Sep 30,

 

(unaudited, $ in millions, except per share amounts)

2023

2023

2023

2022

2022

 

2022

 

 

2021

 

 

Interest income

 

$

 

1,167

 

 

 

$

 

1,117

 

 

 

$

 

1,094

 

 

 

$

 

1,122

 

 

 

$

 

1,118

 

 

 

$

 

4,435

 

 

 

$

 

4,364

 

 

Interest expense

 

(267

)

 

(244

)

 

(239

)

 

(231

)

 

(223

)

 

(892

)

 

(937

)

Net interest income

 

900

 

 

873

 

 

855

 

 

891

 

 

895

 

 

3,543

 

 

3,427

 

Provision for finance receivable losses

 

(410

)

 

(479

)

 

(385

)

 

(404

)

 

(421

)

 

(1,402

)

 

(593

)

Net interest income after provision for finance receivable losses

 

490

 

 

394

 

 

470

 

 

487

 

 

474

 

 

2,141

 

 

2,834

 

 

Insurance

 

 

 

113

 

 

 

 

 

112

 

 

 

 

 

111

 

 

 

 

 

111

 

 

 

 

 

111

 

 

 

 

 

445

 

 

 

 

 

434

 

 

Investment

 

32

 

 

27

 

 

25

 

 

22

 

 

16

 

 

61

 

 

65

 

Gain on sales of finance receivables

 

11

 

 

13

 

 

17

 

 

13

 

 

17

 

 

63

 

 

47

 

Net gain (loss) on repurchases and repayments of debt

 

 

 

 

 

 

 

(1

)

 

2

 

 

(27

)

 

(78

)

Other

 

29

 

 

33

 

 

24

 

 

24

 

 

24

 

 

87

 

 

63

 

Total other revenues

 

185

 

 

185

 

 

177

 

 

169

 

 

170

 

 

629

 

 

531

 

Operating expenses

 

(381

)

 

(397

)

 

(365

)

 

(384

)

 

(363

)

 

(1,457

)

 

(1,448

)

Insurance policy benefits and claims

 

(48

)

 

(44

)

 

(47

)

 

(39

)

 

(35

)

 

(158

)

 

(176

)

Total other expenses

 

(429

)

 

(441

)

 

(412

)

 

(423

)

 

(398

)

 

(1,615

)

 

(1,624

)

 

Income before income taxes

 

 

 

246

 

 

 

 

 

138

 

 

 

 

 

235

 

 

 

 

 

233

 

 

 

 

 

246

 

 

 

 

 

1,155

 

 

 

 

 

1,741

 

 

Income taxes

 

(52

)

 

(35

)

 

(56

)

 

(57

)

 

(61

)

 

(283

)

 

(427

)

Net income

$

194

 

$

103

 

$

179

 

$

176

 

$

185

 

$

872

 

$

1,314

 

 

Weighted average number of diluted shares

 

 

 

120.8

 

 

 

 

 

120.6

 

 

 

 

 

121.0

 

 

 

 

 

121.9

 

 

 

 

 

123.6

 

 

 

 

 

124.4

 

 

 

 

 

133.1

 

 

Diluted EPS

$

1.61

 

$

0.85

 

$

1.48

 

$

1.44

 

$

1.49

 

$

7.01

 

$

9.88

 

Book value per basic share

$

25.86

 

$

25.39

 

$

25.55

 

$

24.91

 

$

24.56

 

$

24.91

 

$

23.76

 

Return on assets

 

3.2

%

 

1.8

%

 

3.2

%

 

3.1

%

 

3.3

%

 

3.9

%

 

6.0

%

Change in allowance for finance receivable losses

$

(57

)

$

(94

)

$

(3

)

$

(56

)

$

(128

)

$

(216

)

$

174

 

Net charge-offs

 

(353

)

 

(385

)

 

(382

)

 

(348

)

 

(293

)

 

(1,186

)

 

(767

)

Provision for finance receivable losses

$

(410

)

$

(479

)

$

(385

)

$

(404

)

$

(421

)

$

(1,402

)

$

(593

)

 

Note:

On January 1, 2023, the Company adopted ASU 2018-12, Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts. In accordance with this standard, the Company has recast its prior period financial information to reflect the effects of the adoption.

 

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

 

 

As of

 

 

 

 

Sep 30,

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

(unaudited, $ in millions)

2023

2023

2023

2022

2022

 

Assets

 

 

 

 

 

Cash and cash equivalents

$

1,190

 

$

1,021

 

$

544

 

$

498

 

$

536

 

Investment securities

 

1,635

 

 

1,710

 

 

1,786

 

 

1,800

 

 

1,747

 

Net finance receivables

 

21,067

 

 

20,510

 

 

19,809

 

 

19,986

 

 

19,752

 

Unearned insurance premium and claim reserves

 

(772

)

 

(761

)

 

(740

)

 

(749

)

 

(747

)

Allowance for finance receivable losses

 

(2,449

)

 

(2,392

)

 

(2,298

)

 

(2,311

)

 

(2,255

)

Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses

 

 

 

17,846

 

 

 

 

 

17,357

 

 

 

 

 

16,771

 

 

 

 

 

16,926

 

 

 

 

 

16,750

 

 

Restricted cash and restricted cash equivalents

 

580

 

 

532

 

 

531

 

 

461

 

 

483

 

Goodwill

 

1,437

 

 

1,437

 

 

1,437

 

 

1,437

 

 

1,437

 

Other intangible assets

 

260

 

 

260

 

 

261

 

 

261

 

 

272

 

Other assets

 

1,198

 

 

1,194

 

 

1,113

 

 

1,154

 

 

1,116

 

Total assets

$

24,146

 

$

23,511

 

$

22,443

 

$

22,537

 

$

22,341

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Long-term debt

$

19,851

 

$

19,195

 

$

18,206

 

$

18,281

 

$

18,202

 

Insurance claims and policyholder liabilities

 

599

 

 

616

 

 

615

 

 

620

 

 

601

 

Deferred and accrued taxes

 

6

 

 

5

 

 

22

 

 

5

 

 

5

 

Other liabilities

 

581

 

 

637

 

 

519

 

 

616

 

 

522

 

Total liabilities

 

21,037

 

 

20,453

 

 

19,362

 

 

19,522

 

 

19,330

 

 

Common stock

 

 

 

1

 

 

 

 

 

1

 

 

 

 

 

1

 

 

 

 

 

1

 

 

 

 

 

1

 

 

Additional paid-in capital

 

1,706

 

 

1,702

 

 

1,693

 

 

1,689

 

 

1,685

 

Accumulated other comprehensive income (loss)

 

(129

)

 

(114

)

 

(108

)

 

(127

)

 

(124

)

Retained earnings

 

2,240

 

 

2,168

 

 

2,188

 

 

2,119

 

 

2,061

 

Treasury stock

 

(709

)

 

(699

)

 

(693

)

 

(667

)

 

(612

)

Total shareholders’ equity

 

3,109

 

 

3,058

 

 

3,081

 

 

3,015

 

 

3,011

 

Total liabilities and shareholders’ equity

$

24,146

 

$

23,511

 

$

22,443

 

$

22,537

 

$

22,341

 

 

Note:

On January 1, 2023, the Company adopted ASU 2018-12, Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts. In accordance with this standard, the Company has recast its prior period financial information to reflect the effects of the adoption.

 

CONSOLIDATED KEY FINANCIAL METRICS (UNAUDITED)

 

 

 

As of

 

 

 

 

Sep 30,

 

Jun 30,

 

Mar 31,

 

Dec 31,

 

Sep 30,

(unaudited, $ in millions)

2023

2023

2023

2022

2022

Liquidity

 

 

 

 

 

Cash and cash equivalents

$

1,190

 

$

1,021

 

$

544

 

$

498

 

$

536

 

Cash and cash equivalents unavailable for general corporate purposes

 

169

 

 

196

 

 

177

 

 

147

 

 

142

 

Unencumbered loans

 

7,493

 

 

8,424

 

 

8,457

 

 

9,304

 

 

9,465

 

Undrawn conduit facilities

 

6,175

 

 

6,175

 

 

6,075

 

 

6,125

 

 

5,675

 

Undrawn corporate revolver

 

1,250

 

 

1,250

 

 

1,250

 

 

1,250

 

 

1,250

 

Drawn conduit facilities

 

 

 

 

 

100

 

 

50

 

 

500

 

 

Net adjusted debt

 

$

 

18,658

 

 

 

$

 

18,198

 

 

 

$

 

17,667

 

 

 

$

 

17,758

 

 

 

$

 

17,636

 

 

 

Total Shareholders' equity

 

$

 

3,109

 

 

 

$

 

3,058

 

 

 

$

 

3,081

 

 

 

$

 

3,015

 

 

 

$

 

3,011

 

 

Goodwill

 

(1,437

)

 

(1,437

)

 

(1,437

)

 

(1,437

)

 

(1,437

)

Other intangible assets

 

(260

)

 

(260

)

 

(261

)

 

(261

)

 

(272

)

Junior subordinated debt

 

172

 

 

172

 

 

172

 

 

172

 

 

172

 

Adjusted tangible common equity

 

1,584

 

 

1,533

 

 

1,555

 

 

1,489

 

 

1,474

 

Allowance for finance receivable losses, net of tax (1)

 

1,837

 

 

1,794

 

 

1,724

 

 

1,733

 

 

1,691

 

Adjusted capital

$

3,421

 

$

3,327

 

$

3,279

 

$

3,222

 

$

3,165

 

 

Net leverage (net adjusted debt to adjusted capital)

 

5.5x

 

5.5x

 

5.4x

 

5.5x

 

5.6x

 

Note:

On January 1, 2023, the Company adopted ASU 2018-12, Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts. In accordance with this standard, the Company has recast its prior period financial information to reflect the effects of the adoption.

(1)

Income taxes assume a 25% tax rate.

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)

 

Quarter Ended

 

Fiscal Year

(unaudited, $ in millions)

Sep 30,

2023

Jun 30,

2023

Mar 31,

2023

Dec 31,

2022

Sep 30,

2022

 

 

2022

 

 

2021

 

 

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

 

$

246

 

$

1,155

 

$

1,741

 

 

Consumer & Insurance pretax income

 

$

 

250

 

 

 

$

 

138

 

 

 

$

 

236

 

 

 

$

 

244

 

 

 

$

 

247

 

 

 

$

 

1,169

 

 

 

$

 

1,788

 

 

Regulatory settlements

 

 

 

24

 

 

 

 

 

 

 

 

 

 

 

Net loss (gain) on repurchases and repayments of debt (1)

 

 

 

 

 

 

 

 

 

(3

)

 

26

 

 

70

 

Cash-settled stock-based awards

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

54

 

Other (2)

 

2

 

 

 

 

 

 

5

 

 

4

 

 

11

 

 

6

 

Consumer & Insurance adjusted pretax income (non-GAAP)

$

252

 

$

162

 

$

236

 

$

249

 

$

246

 

$

1,206

 

$

1,918

 

 

Reconciling items (3)

 

$

 

(2

 

)

 

$

 

(24

 

)

 

$

 

 

 

 

$

 

(15

 

)

 

$

 

(1

 

)

 

$

 

(51

 

)

 

$

 

(171

 

)

 

 

Consumer & Insurance

 

 

$

 

 

21,068

 

 

 

 

 

$

 

 

20,511

 

 

 

 

 

$

 

 

19,810

 

 

 

 

 

$

 

 

19,987

 

 

 

 

 

$

 

 

19,754

 

 

 

 

 

$

 

 

19,987

 

 

 

 

 

$

 

 

19,215

 

 

 

Segment to GAAP adjustment

 

(1

)

 

(1

)

 

(1

)

 

(1

)

 

(2

)

 

(1

)

 

(3

)

Net finance receivables - GAAP basis

$

21,067

 

$

20,510

 

$

19,809

 

$

19,986

 

$

19,752

 

$

19,986

 

$

19,212

 

 

Consumer & Insurance

 

$

 

2,449

 

 

 

$

 

2,392

 

 

 

$

 

2,298

 

 

 

$

 

2,315

 

 

 

$

 

2,259

 

 

 

$

 

2,315

 

 

 

$

 

2,102

 

 

Segment to GAAP adjustment

 

 

 

 

 

 

 

(4

)

 

(4

)

 

(4

)

 

(7

)

Allowance for finance receivable losses - GAAP basis

$

2,449

 

$

2,392

 

$

2,298

 

$

2,311

 

$

2,255

 

$

2,311

 

$

2,095

 

 

Note:

On January 1, 2023, the Company adopted ASU 2018-12, Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts. In accordance with this standard, the Company has recast its prior period financial information to reflect the effects of the adoption.

(1)

Amounts differ from those presented on "Consolidated Statements of Operations (Unaudited)" page as a result of purchase accounting adjustments that are not applicable on a segment accounting basis.

(2)

Includes strategic activities and other items. For fiscal year 2021, refer to the earnings release and financial supplements included as an exhibit to the Company’s Current Report on Form 8-K filed February 2, 2022, and available in the Investor Relations section of the Company’s website (www.omf.com) and the SEC’s website (www.sec.gov).

(3)

Reconciling items consist of Segment to GAAP adjustment and the adjustments to Pretax income – segment accounting basis for C&I and Other. The adjustments to Other adjusted pretax income (loss) are not disclosed in the table above due to immateriality.

 

CONSUMER & INSURANCE SEGMENT (UNAUDITED) (Non-GAAP)

 

Quarter Ended

Fiscal Year

 

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Sep 30,

 

 

(unaudited, in millions, except per share amounts)

 

2023

 

 

2023

 

 

2023

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

Interest income

 

$

 

1,166

 

 

 

$

 

1,115

 

 

 

$

 

1,092

 

 

 

$

 

1,121

 

 

 

$

 

1,116

 

 

 

$

 

4,429

 

 

 

$

 

4,355

 

 

Interest expense

 

(265

)

 

(242

)

 

(238

)

 

(230

)

 

(221

)

 

(886

)

 

(930

)

Net interest income

 

901

 

 

873

 

 

854

 

 

891

 

 

895

 

 

3,543

 

 

3,425

 

Provision for finance receivable losses

 

(410

)

 

(479

)

 

(385

)

 

(404

)

 

(420

)

 

(1,399

)

 

(587

)

Net interest income after provision for finance receivable losses

 

491

 

 

394

 

 

469

 

 

487

 

 

475

 

 

2,144

 

 

2,838

 

Insurance

 

113

 

 

112

 

 

111

 

 

111

 

 

111

 

 

445

 

 

434

 

Investment

 

32

 

 

27

 

 

25

 

 

22

 

 

16

 

 

61

 

 

65

 

Gain on sales of finance receivables

 

11

 

 

13

 

 

17

 

 

13

 

 

17

 

 

63

 

 

47

 

Other

 

26

 

 

30

 

 

23

 

 

22

 

 

21

 

 

75

 

 

51

 

Total other revenues

 

182

 

 

182

 

 

176

 

 

168

 

 

165

 

 

644

 

 

597

 

Operating expenses

 

(373

)

 

(370

)

 

(362

)

 

(367

)

 

(359

)

 

(1,424

)

 

(1,341

)

Insurance policy benefits and claims

 

(48

)

 

(44

)

 

(47

)

 

(39

)

 

(35

)

 

(158

)

 

(176

)

Total other expenses

 

(421

)

 

(414

)

 

(409

)

 

(406

)

 

(394

)

 

(1,582

)

 

(1,517

)

Adjusted pretax income (non-GAAP)

 

252

 

 

162

 

 

236

 

 

249

 

 

246

 

 

1,206

 

 

1,918

 

Income taxes (1)

 

(63

)

 

(40

)

 

(59

)

 

(63

)

 

(62

)

 

(302

)

 

(480

)

Adjusted net income (non-GAAP)

$

189

 

$

122

 

$

177

 

$

186

 

$

184

 

$

904

 

$

1,438

 

 

Weighted average number of diluted shares

 

 

 

120.8

 

 

 

 

 

120.6

 

 

 

 

 

121.0

 

 

 

 

 

121.9

 

 

 

 

 

123.6

 

 

 

 

 

124.4

 

 

 

 

 

133.1

 

 

C&I adjusted diluted EPS

$

1.57

 

$

1.01

 

$

1.46

 

$

1.53

 

$

1.49

 

$

7.27

 

$

10.81

 

 

Note:

On January 1, 2023, the Company adopted ASU 2018-12, Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts. In accordance with this standard, the Company has recast its prior period financial information to reflect the effects of the adoption.

(1)

Income taxes assume a 25% tax rate.

 

CONSUMER & INSURANCE SEGMENT METRICS (UNAUDITED)

 

Quarter Ended

 

Fiscal Year

(unaudited, $ in millions)

Sep 30,

2023

Jun 30,

2023

Mar 31,

2023

Dec 31,

2022

Sep 30,

2022

 

 

2022

 

 

2021

 

 

Net finance receivables - personal loans

 

$

 

20,836

 

 

 

$

 

20,352

 

 

 

$

 

19,688

 

 

 

$

 

19,880

 

 

 

$

 

19,675

 

 

 

$

 

19,880

 

 

 

$

 

19,190

 

 

Net finance receivables - credit cards

 

232

 

 

159

 

 

122

 

 

107

 

 

79

 

 

107

 

 

25

 

Net finance receivables

$

21,068

 

$

20,511

 

$

19,810

 

$

19,987

 

$

19,754

 

$

19,987

 

$

19,215

 

Allowance for finance receivable losses

$

2,449

 

$

2,392

 

$

2,298

 

$

2,315

 

$

2,259

 

$

2,315

 

$

2,102

 

Allowance ratio

 

11.62

%

 

11.66

%

 

11.60

%

 

11.58

%

 

11.44

%

 

11.58

%

 

10.94

%

 

Net finance receivables

 

 

 

21,068

 

 

 

 

 

20,511

 

 

 

 

 

19,810

 

 

 

 

 

19,987

 

 

 

 

 

19,754

 

 

 

 

 

19,987

 

 

 

 

 

19,215

 

 

Finance receivables serviced for our whole loan sale partners

 

864

 

 

849

 

 

839

 

 

766

 

 

698

 

 

766

 

 

414

 

Managed receivables

$

21,932

 

$

21,360

 

$

20,649

 

$

20,753

 

$

20,452

 

$

20,753

 

$

19,629

 

 

Average net finance receivables - personal loans

 

$

 

20,640

 

 

 

$

 

19,999

 

 

 

$

 

19,767

 

 

 

$

 

19,803

 

 

 

$

 

19,553

 

 

 

$

 

19,377

 

 

 

$

 

18,284

 

 

Average net finance receivables - credit cards

 

193

 

 

137

 

 

115

 

 

92

 

 

71

 

 

65

 

 

2

 

Average net receivables

 

20,833

 

 

20,136

 

 

19,882

 

 

19,895

 

 

19,624

 

 

19,442

 

 

18,286

 

Average receivables serviced for our whole loan sale partners

 

864

 

 

852

 

 

812

 

 

734

 

 

659

 

 

610

 

 

174

 

Average managed receivables

$

21,697

 

$

20,988

 

$

20,694

 

$

20,629

 

$

20,283

 

$

20,052

 

$

18,460

 

 

 

 

 

 

 

 

 

Note: Ratios may not sum due to rounding.

 

CONSUMER & INSURANCE KEY METRICS (UNAUDITED) (Non-GAAP)

 

Quarter Ended

 

Fiscal Year

(unaudited, in millions)

Sep 30,

2023

Jun 30,

2023

Mar 31,

2023

Dec 31,

2022

Sep 30,

2022

 

 

2022

 

 

2021

 

Adjusted pretax income (non-GAAP)

$

252

 

$

162

 

$

236

 

$

249

 

$

246

 

$

1,206

 

$

1,918

 

Provision for finance receivable losses

 

410

 

 

479

 

 

385

 

 

404

 

 

420

 

 

1,399

 

 

587

 

Net charge-offs

 

(353

)

 

(385

)

 

(382

)

 

(348

)

 

(293

)

 

(1,186

)

 

(768

)

Change in C&I allowance for finance receivable losses (non-GAAP)

 

57

 

 

94

 

 

3

 

 

56

 

 

127

 

 

213

 

 

(181

)

Pretax capital generation (non-GAAP)

 

309

 

 

256

 

 

239

 

 

305

 

 

373

 

 

1,419

 

 

1,737

 

Capital generation, net of tax(1) (non-GAAP)

$

232

 

$

192

 

$

179

 

$

229

 

$

280

 

$

1,064

 

$

1,303

 

 

C&I average net receivables

 

$

 

20,833

 

 

 

$

 

20,136

 

 

 

$

 

19,882

 

 

 

$

 

19,895

 

 

 

$

 

19,624

 

 

 

$

 

19,442

 

 

 

$

 

18,286

 

 

Capital generation return on receivables (non-GAAP)

 

4.4

%

 

3.8

%

 

3.7

%

 

4.6

%

 

5.6

%

 

5.5

%

 

7.1

%

 

Note:

Consumer & Insurance financial information is presented on an adjusted Segment Accounting Basis. Amounts may not sum due to rounding.

On January 1, 2023, the Company adopted ASU 2018-12, Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts. In accordance with this standard, the Company has recast its prior period financial information to reflect the effects of the adoption.

(1)

Income taxes assume a 25% rate.

 

CONSUMER & INSURANCE PERSONAL LOANS METRICS (UNAUDITED)

 

Quarter Ended

 

Fiscal Year

 

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Sep 30,

 

 

 

(unaudited, $ in millions)

 

2023

 

 

2023

 

 

2023

 

 

2022

 

 

2022

 

 

 

2022

 

 

2021

 

 

Gross charge-offs

 

$

 

410

 

 

 

$

 

446

 

 

 

$

 

445

 

 

 

$

 

402

 

 

 

$

 

349

 

 

 

$

 

1,431

 

 

 

$

 

990

 

 

Recoveries

 

(63

)

 

(67

)

 

(69

)

 

(58

)

 

(59

)

 

(252

)

 

(222

)

Net charge-offs

$

347

 

$

379

 

$

376

 

$

344

 

$

290

 

$

1,179

 

$

768

 

Gross charge-off ratio

 

7.89

%

 

8.94

%

 

9.14

%

 

8.05

%

 

7.09

%

 

7.39

%

 

5.42

%

Recovery ratio

 

(1.21

%)

 

(1.34

%)

 

(1.42

%)

 

(1.17

%)

 

(1.20

%)

 

(1.30

%)

 

(1.21

%)

Net charge-off ratio

 

6.68

%

 

7.60

%

 

7.72

%

 

6.88

%

 

5.89

%

 

6.09

%

 

4.20

%

 

Average net receivables

 

$

 

20,640

 

 

 

$

 

19,999

 

 

 

$

 

19,767

 

 

 

$

 

19,803

 

 

 

$

 

19,553

 

 

 

$

 

19,377

 

 

 

$

 

18,284

 

 

Yield

 

22.2

%

 

22.2

%

 

22.3

%

 

22.3

%

 

22.6

%

 

22.8

%

 

23.8

%

Origination volume

$

3,278

 

$

3,742

 

$

2,817

 

$

3,473

 

$

3,551

 

$

13,879

 

$

13,825

 

30+ delinquency

 

$

 

1,156

 

 

 

$

 

1,036

 

 

 

$

 

1,042

 

 

 

$

 

1,154

 

 

 

$

 

1,027

 

 

 

$

 

1,154

 

 

 

$

 

850

 

 

90+ delinquency

$

535

 

$

474

 

$

534

 

$

544

 

$

474

 

$

544

 

$

383

 

30-89 delinquency

$

621

 

$

562

 

$

508

 

$

610

 

$

553

 

$

610

 

$

467

 

30+ delinquency ratio

 

 

 

5.55

 

%

 

 

 

5.09

 

%

 

 

 

5.29

 

%

 

 

 

5.80

 

%

 

 

 

5.22

 

%

 

 

 

5.80

 

%

 

 

 

4.43

 

%

90+ delinquency ratio

 

2.57

%

 

2.33

%

 

2.72

%

 

2.74

%

 

2.41

%

 

2.74

%

 

2.00

%

30-89 delinquency ratio

 

2.98

%

 

2.76

%

 

2.58

%

 

3.07

%

 

2.81

%

 

3.07

%

 

2.43

%

 

Note:

Consumer & Insurance financial information is presented on a Segment Accounting Basis. Delinquency ratios are calculated as a percentage of C&I personal loan net finance receivables. Amounts may not sum due to rounding.

Defined Terms

  • Adjusted capital = adjusted tangible common equity + allowance for finance receivable losses (ALLL), net of tax
  • Adjusted tangible common equity (TCE) = total shareholders’ equity – goodwill – other intangible assets + junior subordinated debt
  • Available cash and cash equivalents = cash and cash equivalents – cash and cash equivalents held at our regulated insurance subsidiaries or is unavailable for general corporate purposes
  • Average assets = average of monthly average assets (assets at the beginning and end of each month divided by two) in the period
  • Average managed receivables = C&I average net receivables + average receivables serviced for our whole loan sale partners
  • C&I adjusted diluted EPS = C&I adjusted net income (non-GAAP) / weighted average diluted shares
  • Capital generation = C&I adjusted net income – change in C&I allowance for finance receivable losses, net of tax
  • Capital generation return on receivables = annualized capital generation / C&I average net receivables
  • Finance receivables serviced for our whole loan sale partners = unpaid principal balance plus accrued interest of loans sold as part of our whole loan sale program
  • Managed receivables = C&I net finance receivables + finance receivables serviced for our whole loan sale partners
  • Net adjusted debt = long-term debt – junior subordinated debt – available cash and cash equivalents
  • Net interest margin = annualized C&I net interest income / C&I average net receivables
  • Net leverage = net adjusted debt / adjusted capital
  • Opex ratio = annualized C&I operating expenses / average managed receivables
  • Other net revenue = other revenues – insurance policy benefits and claims expense
  • Pretax capital generation = C&I pretax adjusted net income – change in C&I allowance for finance receivable losses
  • Purchase volume = credit card purchase transactions + cash advances – returns
  • Return on assets (ROA) = annualized net income / average total assets
  • Return on receivables (C&I ROR) = annualized C&I adjusted net income / C&I average net receivables
  • Unencumbered loans = unencumbered gross finance receivables excluding credit cards

     

OneMain Holdings, Inc.

Investor Contact:
Peter R. Poillon, 212-359-2432 Peter.Poillon@omf.com

Media Contact:
Kelly Ogburn, 410-537-9028 Kelly.Ogburn@omf.com

Source: OneMain Holdings, Inc.
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Contact Information

OneMain Holdings, Inc.
601 N.W. Second Street
Evansville, IN 47708-1013
(812) 424-8031