OneMain Holdings Q1 Earnings Beat on Higher NII, Stock Down 1.1%

Core Viewpoint - OneMain Holdings reported strong adjusted earnings for Q1 2025, exceeding consensus estimates, but faced challenges with rising expenses and declining loan balances [1][2][3]. Financial Performance - Adjusted earnings per share were $1.72, surpassing the Zacks Consensus Estimate of $1.55, and increased by 18.6% year-over-year [1]. - Net income available to common shareholders on a GAAP basis was $213 million, up from $155 million in the prior-year quarter [2]. - Net interest income (NII) rose by 11.2% to $96 million, driven by higher net finance receivables and improved yield [3]. - Total other revenues increased by 4.4% to $188 million, attributed to gains on sales of finance receivables [3]. Expenses and Provisions - Total other expenses rose by 2.7% to $453 million due to higher operating expenses [3]. - The provision for finance receivable losses was $456 million, up 5.8% from the prior-year quarter [4]. - Net charge-offs were $473 million, reflecting a 3.5% increase year-over-year [4]. Credit Quality - Delinquencies of 30-89 days increased to $630 million, up 12.1% [4]. - The allowance ratio decreased to 11.52% from 11.64% in the prior-year quarter [4]. Balance Sheet and Debt - Total net finance receivables as of March 31, 2025, were $23.4 billion, down 1% from the prior quarter [5]. - Long-term debt increased slightly to $21.5 billion [5]. Share Repurchase - The company repurchased 323 thousand shares for $16 million during the reported quarter [6]. Strategic Outlook - OneMain Holdings aims to grow credit card and auto finance loans, supported by lower interest rates and strategic acquisitions, although rising expenses and deteriorating asset quality present challenges [7].