Core Insights - OneMain Holdings, Inc. (OMF) shares have increased by 17.8% over the past six months, outperforming the S&P 500 Index's growth of 14.8% and the industry average of 29.6% [1][7] - OMF's performance is superior to peers such as Ally Financial (ALLY), which rose by 13.2%, and Navient Corporation (NAVI), which declined by 10.2% [1] Revenue Growth - OneMain Holdings has experienced a compound annual growth rate (CAGR) of 3.6% in revenues from 2019 to 2024, driven by growth in net interest income (NII) [4] - The company aims to sustain revenue growth through a diversified product base and a strategic loan mix [4][5] - Revenue estimates for the current quarter (12/2025) are projected at $1.07 billion, with a year-over-year growth estimate of 6.36% [8] Financial Position - As of September 30, 2025, OneMain Holdings had total debt of $23 billion and cash and cash equivalents of $1.4 billion, indicating a decent balance sheet position [8] - The company has a trailing 12-month return on equity (ROE) of 22.70%, significantly higher than the industry average of 11.41% [10][11] Challenges - OneMain Holdings faces rising expenses, with total other expenses showing a CAGR of 3% over the last five years, primarily due to increased salaries and benefits [15] - The company's provision for finance receivable losses has a CAGR of 9.1%, indicating potential underwriting concerns [18] Future Outlook - Analysts are optimistic about OneMain Holdings' earnings growth potential, with recent upward revisions in earnings estimates for 2025 and 2026 [21] - The company is well-positioned for top-line expansion, supported by its diverse product offerings and efforts to grow its credit card and auto finance businesses [20]

Financial Performance - Originations reached $3.9 billion, a 5% year-over-year increase[13] - Capital Generation increased to $272 million, up 29% year-over-year[14] - Managed Receivables totaled $25.9 billion, reflecting a 6% year-over-year growth[15] - Consumer & Insurance (C&I) Adjusted Diluted EPS increased significantly to $1.90, a 51% year-over-year increase[17] Portfolio Quality - C&I Net Charge-offs decreased by 51 basis points year-over-year to 70%[17] - Consumer Loan Net Charge-offs decreased by 66 basis points year-over-year to 67%[17] - The company's 30+ delinquency rate was 541%, down 16bps year-over-year[47,50] New Products & Receivables - Credit Card Receivables grew to $834 million[16] - Auto Managed Receivables reached $2.7 billion[15] - BrightWay credit card rollout saw 11% quarter-over-quarter receivables growth[38] Capital Allocation - The company declared a dividend of $105 per share, an increase from $104[17] - The dividend yield is approximately 7% based on the closing share price on October 29, 2025[17] - The board authorized a $1 billion share repurchase program through December 31, 2028[17]

Financial Performance - Originations increased to $3.9 billion, up 9% year-over-year[13] - Capital Generation reached $222 million, a 63% increase year-over-year[14] - Managed Receivables totaled $25.2 billion, up 7% year-over-year[15] - Consumer & Insurance (C&I) Total Revenue was $1.5 billion, a 10% increase year-over-year[15] - C&I Adjusted Earnings Per Share (EPS) increased to $1.45, up 42% year-over-year[19] Credit Quality - C&I Net Charge-offs decreased to 7.6%, down 88 basis points year-over-year[16] - Consumer Loan Net Charge-offs decreased to 7.2%, down 110 basis points year-over-year[18] - 30+ delinquency of 5.07%, down 29bps YoY[50] Balance Sheet and Funding - The company issued $1 billion in Asset-Backed Securities (ABS) and $800 million in unsecured debt[20] - The company repurchased 460 thousand shares for $21 million in 2Q25[78]

Financial Data and Key Metrics Changes - The company reported earnings of $0.65 per share for Q2 2025, with total loans growing by 1% quarter-over-quarter and 3% year-over-year [9] - Net interest income reached a record $300 million, up $43 million or 17% compared to the same period last year [10][11] - The return on tangible common equity was 12.96%, a 62 basis point improvement from Q1 [12] Business Line Data and Key Metrics Changes - Commercial and industrial (C&I) loans grew by over $700 million in the first half of 2025, with $356 million added in Q2 alone [6][10] - Total average quarterly loans increased by nearly $400 million versus Q1, with C&I leading the growth [14] - Non-interest income for Q2 was $67 million, a 3% increase year-over-year [22] Market Data and Key Metrics Changes - Core customer deposits were up 4.3% compared to the same period last year, despite seasonal outflows in Q2 [10][15] - The net interest margin climbed above 3%, reflecting a strong profitability profile [13] Company Strategy and Development Direction - The company is focused on executing its strategic plan, which includes enhancing profitability through a mix shift in its asset base [5][12] - There is a strong emphasis on organic growth in customer relationships, with the best organic checking household growth in nearly a decade [5][16] - The company aims to reduce reliance on wholesale funding by increasing lower-cost core customer deposits [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow core customer deposits in the second half of the year, citing strong household growth trends and a growing commercial pipeline [10][16] - The management remains vigilant regarding credit quality, with a proactive approach to managing portfolios amid macroeconomic uncertainties [8][30] Other Important Information - The company added nine basis points to its CET1 capital in Q2, totaling a 19 basis point increase year-to-date [7] - The efficiency ratio improved to below 56%, the lowest level since early 2023 [23] Q&A Session Summary Question: Seasonal decline in deposits - Management acknowledged the seasonal decline but noted that it was anticipated and that they expect a rebound in the second half of the year due to a growing commercial pipeline [36][39] Question: Update on office CRE portfolio - Management indicated that the office CRE portfolio is evolving positively, with proactive clients benefiting from improvements [46][48] Question: Margin outlook and deposit pricing strategy - Management discussed the importance of asset-side growth in maintaining margin strength and emphasized disciplined pricing strategies for deposits [53][59] Question: Thoughts on acquisitions - Management stated that any potential acquisition would need to be a good strategic, financial, and cultural fit, emphasizing the priority of executing their current strategic plan [68][70] Question: Increase in ACL for C&I portfolio - Management explained that the increase in the allowance for credit losses (ACL) for the C&I portfolio is primarily due to growth in that segment [72] Question: Sustainability of positive operating leverage - Management expressed confidence in sustaining positive operating leverage into 2026, driven by growth in commercial loans and disciplined expense management [79][81]

Core Insights - OneMain Holdings, Inc. (OMF) shares reached a 52-week high of $60.08, with a 47.8% increase over the past three months, outperforming the industry and S&P 500 Index [1][8] - The company's revenue has shown a five-year compound annual growth rate (CAGR) of 3.6%, driven by growth in net interest income [4] - OneMain Holdings has a trailing 12-month return on equity (ROE) of 19.30%, significantly higher than the industry average of 10.11% [11][12] Revenue Growth - The company aims to enhance margins by reducing Back Book over time and has strengthened its auto finance capabilities through the acquisition of Foursight [5] - OneMain Holdings is expected to continue top-line growth due to its diversified product base and efforts to expand credit card and auto finance businesses [4][5] Financial Position - As of March 31, 2025, OneMain Holdings had total debt of $22.2 billion and cash and cash equivalents of $1.4 billion, indicating a decent balance sheet position [9] - The company has a share repurchase program worth $1 billion, with $609.8 million remaining as of March 31, 2025 [11] Expense Trends - Total other expenses have seen a CAGR of 3% over the last five years, primarily due to rising salaries and benefits [15] - Elevated expenses are expected to persist as the company invests in new products and capabilities [16] Asset Quality Concerns - Provision for finance receivable losses has a CAGR of 9.1% over the past five years, indicating underwriting concerns [19] - The allowance ratio has consistently increased, suggesting challenges in asset quality that may hinder growth [21] Valuation Metrics - OMF stock has a P/E (F1) ratio of 9.68, below the industry average of 11.72, indicating it may be undervalued [22] - Despite the attractive valuation, analysts have revised earnings estimates lower for 2025 and 2026, reflecting concerns over growth potential [25]

Financial Performance - Originations reached $3 billion, a 20% year-over-year increase (13% organic)[13] - Capital Generation was $194 million, with C&I Adjusted EPS at $1.72[14] - C&I Total Revenue increased by 10% year-over-year to $1.5 billion[22] - Adjusted Pretax Income for Consumer & Insurance (C&I) was $275 million[25] Receivables and Portfolio - Managed Receivables totaled $24.6 billion, up 12% year-over-year (6% organic)[15] - Auto Managed Receivables amounted to $2.5 billion, with originations of $342 million[15] - Credit Card Receivables reached $676 million across 836 thousand customer accounts[16] Credit Quality - Consumer Loan net charge-offs decreased by 75bps year-over-year to 7.8%[17] - Consumer Loan 30+ Day Delinquency decreased by 49bps year-over-year to 5.08%[18] - C&I net charge-offs were 8.2%[17] Strategic Priorities - The company expects Managed Receivables Growth of 50%-80% in 2025[83] - The company expects Revenue Growth of 60%-80% in 2025[83] - The company expects an Operating Expense Ratio of ~6.6% in 2025[83]