OneMain Holdings Q4 Earnings Beat on Higher NII, Stock Falls 3.2%

Core Viewpoint - OneMain Holdings reported adjusted earnings of $1.16 per share for Q4 2024, exceeding the Zacks Consensus Estimate of $1.12, but reflecting a 16.5% decline year-over-year [1] Financial Performance - The company experienced a 10% increase in net interest income (NII) to $1.01 billion, driven by higher average net finance receivables, although this was partially offset by increased average debt and higher cost of funds [4] - Total other revenues decreased by 14% to $160 million, attributed to declines in nearly all components except for other income [4] - Total other expenses rose by 10.3% to $482 million due to higher operating expenses [5] - Net income available to common shareholders on a GAAP basis was $126 million, down from $165 million in the prior-year quarter, while for 2024, adjusted earnings per share was $4.89, surpassing the consensus estimate of $4.58 but down 9.9% year-over-year [3] Credit Quality - The provision for finance receivable losses increased by 17.3% to $523 million, primarily due to a $59 million rise in the allowance for finance receivables [6] - Net charge-offs were reported at $463 million, up 11.6% from the prior-year quarter, with 30-89 days delinquencies rising to $743 million, an increase of 7.8% [6] - The allowance ratio decreased to 11.48% from 11.62% in the prior-year quarter [7] Balance Sheet and Debt - As of December 31, 2024, total net finance receivables reached $23.6 billion, a 2.1% increase from the prior quarter, while long-term debt rose by 1.4% to $21.4 billion [8] Share Repurchase - In the reported quarter, OneMain Holdings repurchased 75 thousand shares for $3 million [9] Strategic Outlook - The company aims to grow credit card and auto finance loans, supported by relatively lower interest rates and strategic acquisitions, while maintaining a decent balance sheet and liquidity position [10]