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OneMain Holdings, Inc. Reports Third Quarter 2021 Results

  • 3Q 2021 Diluted EPS of $2.17
  • 3Q 2021 C&I adjusted diluted EPS of $2.37
  • 3Q 2021 C&I managed receivables of $19.1 billion
  • 3Q 2021 C&I net charge-off ratio of 3.52%
  • Declared quarterly dividend of $0.70 per share
  • Repurchased 2.4 million shares for $141 million in 3Q

OneMain Holdings, Inc. (NYSE: OMF), the country’s largest near-prime installment lender with a mission of improving the financial well-being of hardworking Americans, today reported pretax income of $376 million and net income of $288 million for the third quarter of 2021, compared to $341 million and $250 million, respectively, in the prior year quarter. Earnings per diluted share were $2.17 in the third quarter of 2021, compared to $1.86 in the prior year quarter.

On October 20, 2021, OneMain declared a quarterly dividend of $0.70 per share payable on November 9, 2021, to record holders of the company's common stock as of the close of business on November 2, 2021. The company expects to maintain a minimum quarterly dividend of $0.70 per share going forward. Dividends above the minimum are evaluated by the Board of Directors every first and third quarters, consistent with prior quarters and the company's capital allocation strategy.

During the quarter, the Company repurchased approximately 2.4 million shares of common stock for $141 million, including a 1.7 million share block repurchase for $99 million, which was specifically authorized and completed as part of the July secondary offering.

“Our strategic initiatives and favorable economic conditions have put our company on the trajectory of meaningful expansion, resulting in strong year-to-date growth in receivables,” said Doug Shulman, Chairman and CEO of OneMain. “During the third quarter demand for our core lending products was strong, and we also initiated the roll-out of our BrightWay credit cards, which we expect will be the next driver of growth for our company. With our leading lending products, a credit card that reinforces credit-building behaviors, and a suite of financial wellness solutions under Trim, we continue to execute on our vision of being the lender of choice for near-prime consumers.”

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 generated adjusted pretax income of $421 million and adjusted net income of $316 million for the third quarter of 2021, compared to $393 million and $294 million, respectively, in the prior year quarter. Adjusted earnings per diluted share were $2.37 for the third quarter of 2021, compared to $2.19 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 $360 million for the third quarter of 2021, representing a 22% increase versus the prior year period.

Originations totaled $3.9 billion in the third quarter of 2021, up 34% from $2.9 billion in the prior year quarter. The percentage of secured originations was 49% in the third quarter of 2021, down from 53% in the prior year quarter.

Managed receivables, which include loans serviced for our whole loan sale partners, were $19.1 billion at September 30, 2021. Sales of finance receivables totaled $160 million in the quarter, and the recognized gain on sales, recorded in Other revenue, was $15 million. The Company continues to service these loans.

Ending net finance receivables reached $18.8 billion at September 30, 2021, up 6% from $17.8 billion at September 30, 2020.

Secured receivables were 51% of ending net finance receivables at September 30, 2021, down from 53% at September 30, 2020.

Average net finance receivables were $18.5 billion in the third quarter of 2021, up 5% from $17.7 billion in the prior year quarter.

Interest income in the third quarter of 2021 was $1.1 billion, up 2% compared to the prior year quarter, reflecting higher average net finance receivables, partially offset by the lower portfolio yield in the third quarter of 2021 compared to the prior year period.

Yield was 23.77% in the third quarter of 2021, down from 24.34% in the prior year quarter. The decrease generally reflected the impact of pricing and growth initiatives with higher credit quality receivables.

The provision for finance receivable losses was $224 million in the third quarter of 2021, down from $232 million in the prior year quarter, primarily driven by the decrease in net charge-offs due to improved credit performance aligning with governmental stimulus payments compared to the prior year period, partially offset by a build in our allowance for finance receivable losses due to the growth in our loan portfolio.

The 30-89 day delinquency ratio was 2.20% at September 30, 2021, up from 1.76% at June 30, 2021, and 1.95% at September 30, 2020.

The 90+ day delinquency ratio was 1.57% at September 30, 2021, up from 1.36% at June 30, 2021, and 1.49% at September 30, 2020.

The net charge-off ratio was 3.52% in the third quarter of 2021, down from 4.41% in the second quarter of 2021 and 5.20% in the prior year quarter.

Operating expense for the third quarter of 2021 was $338 million, up 12% from $302 million in the prior year quarter reflecting receivables growth and strategic investments in the business, including new products, compared to COVID-19 cost cutting measures in the prior year.

Funding and Liquidity

As of September 30, 2021, the Company had principal debt balances outstanding of $18.0 billion, 39% of which was secured. The Company had $821 million of cash and cash equivalents, which included $205 million of cash and cash equivalents held at their regulated insurance subsidiaries or for other operating activities that are unavailable for general corporate purposes.

Cash and cash equivalents, together with the Company’s potential borrowings of $7.3 billion of undrawn committed capacity under their 14 revolving conduit facilities and $11.0 billion of unencumbered gross finance receivables, provides a liquidity runway in excess of 24 months under numerous stress scenarios and assuming no access to the capital markets. This liquidity runway calculation contemplates all the cash needs of the Company.

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 the expense associated with the cash-settled stock-based awards, direct costs associated with COVID-19, net loss resulting from repurchases and repayments of debt, acquisition-related transaction and integration expenses, 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 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.

Conference Call & Webcast Information

OneMain management will host a conference call and webcast to discuss our third quarter 2021 results and other general matters at 8:30 am Eastern Time on Thursday, October 21, 2021. Both the call and webcast are open to the general public. The general public is invited to listen to the call by dialing 888-632-3385 (U.S. domestic) or 785-424-1673 (international), and using conference ID 72058, or via a live audio webcast through the Investor Relations section of the OneMain Financial website. For those unable to listen to the live broadcast, a replay will be available on our website, or by dialing 800-839-8318 (U.S. domestic) or 402-220-6071, and using conference ID 72058, beginning approximately two hours after the event. An investor presentation will be available on the Investor Relations page of OneMain’s website at www.omf.com prior to the start of the conference call.

About OneMain Holdings, Inc.

OneMain Financial (NYSE: OMF) is the country’s largest near-prime installment lender, with a mission of improving the financial well-being of hardworking Americans. With approximately 1,400 locations throughout 44 states, the Company is committed to helping people with their personal loan needs. OneMain and its team members are dedicated to the communities where they live and work.

This document contains summarized information concerning OneMain Holdings, Inc. (the “Company”) and the Company’s 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 (“Form 10-K”) and Quarterly Reports on Form 10-Q (“Form 10-Qs”) 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. Such reports are or will be available in the Investor Relations section of the Company's 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. Forward-looking statements may be identified by words such as “anticipates,” “appears,” “are likely,” “believes,” “estimates,” “expects,” “foresees,” “intends,” “plans,” “projects” and similar expressions or future or conditional verbs such as “would,” “should,” “could,” “may,” or “will,” 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 in general economic conditions, including the interest rate environment and the financial markets; risks associated with COVID-19 and the measures taken in response thereto; the sufficiency of our allowance for credit losses; increased levels of unemployment and personal bankruptcies; natural or accidental events such as earthquakes, hurricanes, pandemics or floods affecting our customers, collateral, or our facilities; disruptions in the operation of our information systems, or other events disrupting business or commerce; a failure in or breach of our operational or security systems or infrastructure or those of third parties, including as a result of cyber-attacks; our credit risk scoring models may be inadequate; 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 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 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.

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.

 
 
 
 

OneMain Holdings, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

 

 

 

 

Quarter-to-Date

 

Year-to-Date

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

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

1,113

 

 

 

$

1,071

 

 

 

$

1,089

 

 

 

$

3,244

 

 

 

$

3,273

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(237

)

 

 

(231

)

 

 

(255

)

 

 

(703

)

 

 

(781

)

 

Provision for finance receivable losses

 

(226

)

 

 

(132

)

 

 

(231

)

 

 

(356

)

 

 

(1,186

)

 

Net interest income after provision for finance receivable losses

 

650

 

 

 

708

 

 

 

603

 

 

 

2,185

 

 

 

1,306

 

 

 

 

 

 

 

 

 

 

 

 

 

Other revenues:

 

 

 

 

 

 

 

 

 

 

Insurance

 

109

 

 

 

107

 

 

 

109

 

 

 

323

 

 

 

334

 

 

Investment

 

14

 

 

 

17

 

 

 

17

 

 

 

47

 

 

 

56

 

 

Net loss on repurchases and repayments of debt

 

(1

)

 

 

(1

)

 

 

(38

)

 

 

(49

)

 

 

(38

)

 

Other (1)

 

33

 

 

 

27

 

 

 

13

 

 

 

75

 

 

 

38

 

 

Total other revenues

 

155

 

 

 

150

 

 

 

101

 

 

 

396

 

 

 

390

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expenses:

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

(384

)

 

 

(347

)

 

 

(320

)

 

 

(1,070

)

 

 

(993

)

 

Insurance policy benefits and claims

 

(45

)

 

 

(48

)

 

 

(43

)

 

 

(125

)

 

 

(201

)

 

Total other expenses

 

(429

)

 

 

(395

)

 

 

(363

)

 

 

(1,195

)

 

 

(1,194

)

 

Income before income taxes

 

376

 

 

 

463

 

 

 

341

 

 

 

1,386

 

 

 

502

 

 

Income taxes

 

(88

)

 

 

(113

)

 

 

(91

)

 

 

(335

)

 

 

(131

)

 

Net income

 

$

288

 

 

 

$

350

 

 

 

$

250

 

 

 

$

1,051

 

 

 

$

371

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of diluted shares

 

132.9

 

 

 

134.6

 

 

 

134.5

 

 

 

134.1

 

 

 

135.0

 

 

Diluted EPS

 

$

2.17

 

 

 

$

2.60

 

 

 

$

1.86

 

 

 

$

7.84

 

 

 

$

2.75

 

 

Book value per basic share

 

$

23.74

 

 

 

$

26.42

 

 

 

$

23.25

 

 

 

$

23.74

 

 

 

$

23.25

 

 

Return on assets

 

5.1

%

 

6.5

%

 

4.5

%

 

6.4

%

 

2.2

%

 

 

 

 

 

 

 

 

 

 

 

Provision for finance receivable losses

 

$

226

 

 

 

$

132

 

 

 

$

231

 

 

 

356

 

 

 

1,186

 

 

Less: Net charge-offs

 

(165

)

 

 

(194

)

 

 

(231

)

 

 

(564

)

 

 

(809

)

 

Change in allowance for finance receivable losses

 

$

61

 

 

 

$

(62

)

 

 

$

 

 

 

$

(208

)

 

 

$

377

 

 

 

 

 

 

 

 

 

 

 

 

 

Net finance receivables

 

18,843

 

 

 

18,163

 

 

 

17,817

 

 

 

18,843

 

 

 

17,817

 

 

Finance receivables serviced for our whole loan sale partners (2)

 

283

 

 

 

149

 

 

 

 

 

 

283

 

 

 

 

 

Managed receivables

 

$

19,126

 

 

 

$

18,312

 

 

 

$

17,817

 

 

 

$

19,126

 

 

$

17,817

 

 

 

 

 

 

 

 

 

 

 

 

 

Average net receivables

 

18,545

 

 

 

17,717

 

 

 

17,740

 

 

 

18,029

 

 

 

18,010

 

 

Average receivables serviced for our whole loan sale partners (2)

 

211

 

 

 

114

 

 

 

 

 

 

115

 

 

 

 

 

Average managed receivables

 

$

18,756

 

 

 

$

17,831

 

 

 

$

17,740

 

 

 

$

18,144

 

 

$

18,010

 

 

 

 

 

Note:

Year-to-Date may not sum due to rounding.

(1)

2Q21, 3Q20, YTD 3Q21, and YTD 3Q20 include the fair value impairment of the remaining loans in finance receivables held for sale.

(2)

Receivables serviced for our whole loan sale partners reflect the unpaid principal balance and the accrued interest of loans sold as part of our Whole Loan Sale program.

 
 
 
 
 

OneMain Holdings, Inc.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

 

 

As of

 

 

 

 

 

 

 

(unaudited, $ in millions)

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

821

 

 

 

$

1,787

 

 

 

$

1,944

 

 

Investment securities

 

1,963

 

 

 

1,969

 

 

 

1,882

 

 

Net finance receivables

 

18,843

 

 

 

18,163

 

 

 

17,817

 

 

Unearned insurance premium and claim reserves

 

(750

)

 

 

(728

)

 

 

(778

)

 

Allowance for finance receivable losses

 

(2,061

)

 

 

(2,000

)

 

 

(2,324

)

 

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

 

16,032

 

 

 

15,435

 

 

 

14,715

 

 

Restricted cash and restricted cash equivalents

 

459

 

 

 

507

 

 

 

497

 

 

Goodwill

 

1,437

 

 

 

1,437

 

 

 

1,422

 

 

Other intangible assets

 

278

 

 

 

287

 

 

 

315

 

 

Other assets

 

973

 

 

 

955

 

 

 

1,082

 

 

Total assets

 

$

21,963

 

 

 

$

22,377

 

 

 

$

21,857

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Long-term debt

 

$

17,661

 

 

 

$

17,605

 

 

 

$

17,531

 

 

Insurance claims and policyholder liabilities

 

616

 

 

 

617

 

 

 

620

 

 

Deferred and accrued taxes

 

9

 

 

 

10

 

 

 

55

 

 

Other liabilities

 

556

 

 

 

608

 

 

 

528

 

 

Total liabilities

 

18,842

 

 

 

18,840

 

 

 

18,734

 

 

 

 

 

 

 

 

 

Common stock

 

1

 

 

 

1

 

 

 

1

 

 

Additional paid-in capital

 

1,665

 

 

 

1,661

 

 

 

1,651

 

 

Accumulated other comprehensive income (loss)

 

77

 

 

 

85

 

 

 

79

 

 

Retained earnings

 

1,554

 

 

 

1,825

 

 

 

1,392

 

 

Treasury stock

 

(176

)

 

 

(35

)

 

 

 

 

Total shareholders’ equity

 

3,121

 

 

 

3,537

 

 

 

3,123

 

 

Total liabilities and shareholders’ equity

 

$

21,963

 

 

 

$

22,377

 

 

 

$

21,857

 

 

 
 
 
 
 

OneMain Holdings, Inc.

CONSOLIDATED KEY FINANCIAL METRICS (UNAUDITED)

 

 

 

 

 

As of or Quarter-to-Date

 

 

 

 

 

 

 

(unaudited, $ in millions)

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

 

 

 

 

 

 

Non-TDR Net Finance Receivables

 

$

18,187

 

 

$

17,483

 

 

$

17,116

 

TDR Net Finance Receivables

 

656

 

 

680

 

 

701

 

Net Finance Receivables

 

$

18,843

 

 

$

18,163

 

 

$

17,817

 

 

 

 

 

 

 

 

Average Net Receivables

 

$

18,545

 

 

$

17,717

 

 

$

17,740

 

Average Daily Debt Balances

 

17,680

 

 

16,860

 

 

17,546

 

Origination Volume

 

3,870

 

 

3,835

 

 

2,887

 

 

 

 

 

 

 

 

Non-TDR Allowance

 

$

1,780

 

 

$

1,695

 

 

$

2,003

 

TDR Allowance

 

281

 

 

305

 

 

321

 

Allowance

 

$

2,061

 

 

$

2,000

 

 

$

2,324

 

 

 

 

 

 

 

 

Non-TDR Allowance Ratio

 

9.79

%

 

9.69

%

 

11.70

%

TDR Allowance Ratio

 

42.87

%

 

44.86

%

 

45.85

%

Allowance Ratio

 

10.94

%

 

11.01

%

 

13.05

%

 

 

 

 

 

 

 

Gross Charge-Offs

 

$

223

 

 

$

252

 

 

$

274

 

Recoveries

 

(58

)

 

(58

)

 

(43

)

Net Charge-Offs

 

$

165

 

 

$

194

 

 

$

231

 

 

 

 

 

 

 

 

Gross Charge-Off Ratio

 

4.76

%

 

5.70

%

 

6.14

%

Recovery Ratio

 

(1.24

%)

 

(1.29

%)

 

(0.95

%)

Net Charge-Off Ratio

 

3.52

%

 

4.40

%

 

5.19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-89 Delinquency

 

$

415

 

 

$

319

 

 

$

346

 

30+ Delinquency

 

710

 

 

566

 

 

612

 

60+ Delinquency

 

452

 

 

365

 

 

397

 

90+ Delinquency

 

295

 

 

247

 

 

266

 

 

 

 

 

 

 

 

30-89 Delinquency Ratio

 

2.20

%

 

1.76

%

 

1.95

%

30+ Delinquency Ratio

 

3.77

%

 

3.12

%

 

3.44

%

60+ Delinquency Ratio

 

2.40

%

 

2.01

%

 

2.23

%

90+ Delinquency Ratio

 

1.57

%

 

1.36

%

 

1.49

%

 

 

 

Note:

Delinquency ratios are calculated as a percentage of net finance receivables. Charge-off and recovery ratios are calculated as a percentage of average net finance receivables. Ratios may not sum due to rounding.

 
 
 
 
 

OneMain Holdings, Inc.

BALANCE SHEET METRICS (UNAUDITED)

 

 

 

 

 

As of

 

 

 

 

 

 

 

(unaudited, $ in millions)

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Cash and cash equivalents

 

$

821

 

 

 

$

1,787

 

 

 

$

1,944

 

 

Cash and cash equivalents unavailable for general corporate purposes

 

205

 

 

 

158

 

 

 

233

 

 

Unencumbered gross finance receivables

 

10,964

 

 

 

9,732

 

 

 

8,345

 

 

Undrawn conduit facilities

 

7,300

 

 

 

7,300

 

 

 

7,200

 

 

 

 

 

 

 

 

 

Long-term debt

 

$

17,661

 

 

 

$

17,605

 

 

 

$

17,531

 

 

Less: Junior subordinated debt

 

(172

)

 

 

(172

)

 

 

(172

)

 

Adjusted Debt

 

$

17,489

 

 

 

$

17,433

 

 

 

$

17,359

 

 

Less: Available cash and cash equivalents

 

(616

)

 

 

(1,629

)

 

 

(1,711

)

 

Net Adjusted Debt

 

$

16,873

 

 

 

$

15,804

 

 

 

$

15,648

 

 

 

 

 

 

 

 

 

Total Shareholders' Equity

 

$

3,121

 

 

 

$

3,537

 

 

 

$

3,123

 

 

Less: Goodwill

 

(1,437

)

 

 

(1,437

)

 

 

(1,422

)

 

Less: Other intangible assets

 

(278

)

 

 

(287

)

 

 

(315

)

 

Plus: Junior subordinated debt

 

172

 

 

 

172

 

 

 

172

 

 

Adjusted Tangible Common Equity

 

$

1,578

 

 

 

$

1,985

 

 

 

$

1,558

 

 

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

 

1,546

 

 

 

1,500

 

 

 

1,742

 

 

Adjusted Capital

 

$

3,124

 

 

 

$

3,485

 

 

 

$

3,300

 

 

 

 

 

 

 

 

 

Net Leverage (Net Adjusted Debt to Adjusted Capital)

 

5.4

x

 

4.5

x

 

4.7

x

 

 

 

 

(1)

 

Income taxes assume a 25% tax rate for 2021 and 2020.

 
 
 
 

OneMain Holdings, Inc.

CONSOLIDATED RETURN ON RECEIVABLES (UNAUDITED)

 

 

 

 

 

 

 

 

 

Quarter-to-Date

 

Year-to-Date

 

 

 

 

 

 

 

 

 

 

 

(unaudited, $ in millions)

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

 

 

 

 

 

 

 

 

 

 

 

Revenue (1)

 

26.2

%

 

26.6

%

 

25.7

%

 

26.1

%

 

25.7

%

Net Charge-Off

 

(3.5

%)

 

(4.4

%)

 

(5.2

%)

 

(4.2

%)

 

(6.0

%)

Risk Adjusted Margin

 

22.7

%

 

22.2

%

 

20.5

%

 

21.9

%

 

19.7

%

Operating Expenses

 

(8.2

%)

 

(7.9

%)

 

(7.2

%)

 

(7.9

%)

 

(7.4

%)

Unlevered Return on Receivables

 

14.4

%

 

14.3

%

 

13.4

%

 

13.9

%

 

12.3

%

Interest Expense

 

(5.1

%)

 

(5.2

%)

 

(5.7

%)

 

(5.2

%)

 

(5.8

%)

Change in Allowance

 

(1.3

%)

 

1.4

%

 

%

 

1.5

%

 

(2.8

%)

Income Tax Expense (2)

 

(1.9

%)

 

(2.6

%)

 

(2.1

%)

 

(2.5

%)

 

(1.0

%)

Return on Receivables

 

6.2

%

 

7.9

%

 

5.6

%

 

7.8

%

 

2.7

%

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

(384

)

 

(347

)

 

(320

)

 

(1,070

)

 

(993

)

Average Managed Receivables (3)

 

18,756

 

 

17,831

 

 

17,740

 

 

18,144

 

 

18,010

 

Operating Expense % of Average Managed Receivables

 

(8.1

%)

 

(7.8

%)

 

(7.2

%)

 

(7.9

%)

 

(7.4

%)

 

 

 

Note:

All ratios are based on consolidated results as a percentage of average net finance receivables. Ratios may not sum due to rounding.

(1)

Revenue includes interest income on finance receivables plus other revenues less insurance policy benefits and claims.

(2)

Income taxes assume a 25% tax rate for 2021 and 2020.

(3)

Average managed receivables include average net receivables and average receivables serviced for our whole loan sale partners.

 
 
 
 
 

OneMain Holdings, Inc.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)

 

 

 

 

 

 

 

 

 

Quarter-to-Date

 

Year-to-Date

 

 

 

 

 

 

 

 

 

 

 

(unaudited, $ in millions)

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

 

 

 

 

 

 

 

 

 

 

 

Consumer & Insurance

 

$

388

 

 

 

$

474

 

 

 

$

351

 

 

 

$

1,429

 

 

 

$

530

 

 

Other

 

(1

)

 

 

(2

)

 

 

(2

)

 

 

(6

)

 

 

(5

)

 

Segment to GAAP Adjustment

 

(11

)

 

 

(9

)

 

 

(8

)

 

 

(37

)

 

 

(23

)

 

Income Before Income Taxes - GAAP basis

 

$

376

 

 

 

$

463

 

 

 

$

341

 

 

 

$

1,386

 

 

 

$

502

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax Income - Segment Accounting Basis

 

$

388

 

 

 

$

474

 

 

 

$

351

 

 

 

$

1,429

 

 

 

$

530

 

 

Cash-settled stock-based awards

 

31

 

 

 

 

 

 

 

 

 

31

 

 

 

 

 

Direct costs associated with COVID-19

 

1

 

 

 

2

 

 

 

4

 

 

 

5

 

 

 

13

 

 

Acquisition-related transaction and integration expenses

 

 

 

 

 

 

 

2

 

 

 

 

 

 

10

 

 

Net loss on repurchases and repayments of debt (1)

 

1

 

 

 

1

 

 

 

35

 

 

 

40

 

 

 

35

 

 

Restructuring Charges

 

 

 

 

 

 

 

1

 

 

 

 

 

 

7

 

 

Consumer & Insurance Adjusted Pretax Income (non-GAAP)

 

$

421

 

 

 

$

477

 

 

 

$

393

 

 

 

$

1,505

 

 

 

$

595

 

 

 

 

 

Note:

Year-to-Date may not sum due to rounding.

(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.

 
 
 
 
 

OneMain Holdings, Inc.

RECONCILIATION OF KEY SEGMENT METRICS (UNAUDITED) (Non-GAAP)

 

 

 

 

 

As of

 

 

 

 

 

 

 

(unaudited, $ in millions)

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

 

 

 

 

 

 

Consumer & Insurance

 

$

18,847

 

 

 

$

18,168

 

 

 

$

17,826

 

 

Segment to GAAP Adjustment

 

(4

)

 

 

(5

)

 

 

(9

)

 

Net Finance Receivables - GAAP basis

 

$

18,843

 

 

 

$

18,163

 

 

 

$

17,817

 

 

 

 

 

 

 

 

 

Consumer & Insurance

 

$

2,070

 

 

 

$

2,011

 

 

 

$

2,342

 

 

Segment to GAAP Adjustment

 

(9

)

 

 

(11

)

 

 

(18

)

 

Allowance for Finance Receivable Losses - GAAP basis

 

$

2,061

 

 

 

$

2,000

 

 

 

$

2,324

 

 

 
 
 
 
 

OneMain Holdings, Inc.

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

 

 

 

 

 

 

 

 

 

Quarter-to-Date

 

Year-to-Date

 

 

 

 

 

 

 

 

 

 

 

(unaudited, in millions, except per share amounts)

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

1,111

 

 

 

$

1,069

 

 

 

$

1,086

 

 

 

$

3,237

 

 

 

$

3,260

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(235

)

 

 

(230

)

 

 

(250

)

 

 

(698

)

 

 

(765

)

 

Provision for finance receivable losses

 

(224

)

 

 

(130

)

 

 

(232

)

 

 

(351

)

 

 

(1,184

)

 

Net interest income after provision for finance receivable losses

 

652

 

 

709

 

 

 

604

 

 

 

2,188

 

 

 

1,311

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance

 

109

 

 

 

107

 

 

 

109

 

 

 

323

 

 

 

334

 

 

Investment

 

14

 

 

 

17

 

 

 

17

 

 

 

47

 

 

 

56

 

 

Other

 

29

 

 

 

24

 

 

 

8

 

 

 

65

 

 

 

25

 

 

Total other revenues

 

152

 

 

 

148

 

 

 

134

 

 

 

435

 

 

 

415

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

(338

)

 

 

(332

)

 

 

(302

)

 

 

(993

)

 

 

(930

)

 

Insurance policy benefits and claims

 

(45

)

 

 

(48

)

 

 

(43

)

 

 

(125

)

 

 

(201

)

 

Total other expenses

 

(383

)

 

 

(380

)

 

 

(345

)

 

 

(1,118

)

 

 

(1,131

)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted pretax income (non-GAAP)

 

421

 

 

 

477

 

 

 

393

 

 

 

1,505

 

 

 

595

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes (1)

 

(105

)

 

 

(119

)

 

 

(99

)

 

 

(376

)

 

 

(149

)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (non-GAAP)

 

$

316

 

 

 

$

358

 

 

 

$

294

 

 

 

$

1,129

 

 

 

$

446

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of diluted shares

 

132.9

 

 

 

134.6

 

 

 

134.5

 

 

 

134.1

 

 

 

135.0

 

 

C&I adjusted diluted EPS (2)

 

$

2.37

 

 

 

$

2.66

 

 

 

$

2.19

 

 

 

$

8.42

 

 

 

$

3.31

 

 

 

 

 

 

 

 

 

 

 

 

 

Net finance receivables

 

18,847

 

 

 

18,168

 

 

 

17,826

 

 

 

18,847

 

 

 

17,826

 

 

Finance receivables serviced for our whole loan sale partners (3)

 

283

 

 

 

149

 

 

 

 

 

 

283

 

 

 

 

 

Managed receivables

 

$

19,130

 

 

 

$

18,317

 

 

 

$

17,826

 

 

 

$

19,130

 

 

 

$

17,826

 

 

 

 

 

 

 

 

 

 

 

 

 

Average net receivables

 

18,549

 

 

 

17,722

 

 

 

17,740

 

 

 

18,034

 

 

 

18,023

 

 

Average receivables serviced for our whole loan sale partners (3)

 

211

 

 

 

114

 

 

 

 

 

 

115

 

 

 

 

 

Average managed receivables

 

$

18,760

 

 

 

$

17,836

 

 

 

$

17,740

 

 

 

$

18,149

 

 

 

$

18,023

 

 

 

 

 

Note:

Year-to-Date may not sum due to rounding.

(1)

Income taxes assume a 25% tax rate for 2021 and 2020.

(2)

C&I adjusted diluted EPS is calculated as the C&I adjusted net income (non-GAAP) divided by the weighted average number of diluted shares outstanding.

(3)

Receivables serviced for our whole loan sale partners reflect the unpaid principal balance and the accrued interest of loans sold as part of our Whole Loan Sale program.

 
 
 
 
 

OneMain Holdings, Inc.

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

 

 

 

 

 

 

 

 

 

Quarter-to-Date

 

Year-to-Date

 

 

 

 

 

 

 

 

 

 

 

(unaudited, $ in millions)

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

 

 

 

 

 

 

 

 

 

 

 

Revenue (1)

 

26.1

%

 

26.4

%

 

26.4

%

 

26.3

%

 

25.8

%

Net Charge-Off

 

(3.5

%)

 

(4.4

%)

 

(5.2

%)

 

(4.2

%)

 

(6.0

%)

Risk Adjusted Margin

 

22.6

%

 

22.0

%

 

21.2

%

 

22.1

%

 

19.8

%

Operating Expenses

 

(7.2

%)

 

(7.5

%)

 

(6.8

%)

 

(7.4

%)

 

(6.9

%)

Unlevered Return on Receivables

 

15.3

%

 

14.5

%

 

14.4

%

 

14.7

%

 

12.9

%

Interest Expense

 

(5.0

%)

 

(5.2

%)

 

(5.6

%)

 

(5.2

%)

 

(5.7

%)

Change in Allowance

 

(1.3

%)

 

1.5

%

 

%

 

1.6

%

 

(2.8

%)

Income Tax Expense (2)

 

(2.3

%)

 

(2.7

%)

 

2.2

%

 

(2.8

%)

 

(1.1

%)

Return on Receivables

 

6.8

%

 

8.1

%

 

6.6

%

 

8.4

%

 

3.3

%

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

(338

)

 

(332

)

 

(302

)

 

(993

)

 

(930

)

Average Managed Receivables (3)

 

18,760

 

 

17,836

 

 

17,740

 

 

18,149

 

 

18,023

 

Operating Expense % of Average Managed Receivables

 

(7.2

%)

 

(7.5

%)

 

(6.8

%)

 

(7.3

%)

 

(6.9

%)

 

 

 

Note:

Consumer & Insurance financial information is presented on an adjusted Segment Accounting Basis. All ratios are shown as a percentage of C&I average net finance receivables. Ratios may not sum due to rounding.

(1)

Revenue includes interest income on finance receivables plus other revenues less insurance policy benefits and claims.

(2)

Income taxes assume a 25% tax rate for 2021 and 2020.

(3)

Average managed receivables include average net receivables and average receivables serviced for our whole loan sale partners.

 
 
 
 
 

OneMain Holdings, Inc.

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

 

 

 

 

 

 

 

 

 

Quarter-to-Date

 

Year-to-Date

 

 

 

 

 

 

 

 

 

 

 

(unaudited, in millions)

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

 

 

 

 

 

 

 

 

 

 

 

Provision for finance receivable losses

 

$

224

 

 

 

$

130

 

 

 

$

232

 

 

 

$

351

 

 

 

$

1,184

 

 

Less: Net charge-offs

 

(165

)

 

 

(194

)

 

 

(232

)

 

 

(564

)

 

 

(810

)

 

Change in C&I allowance for finance receivable losses

(non-GAAP)

 

59

 

 

 

(64

)

 

 

 

 

 

(213

)

 

 

374

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted pretax income (non-GAAP)

 

421

 

 

 

477

 

 

 

393

 

 

 

1,505

 

 

 

595

 

 

Pretax capital generation (non-GAAP)

 

480

 

 

 

413

 

 

 

393

 

 

 

1,292

 

 

 

969

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

360

 

 

 

$

310

 

 

 

$

294

 

 

 

$

969

 

 

 

$

727

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Adjusted Capital

 

$

3,485

 

 

 

$

3,308

 

 

 

$

3,339

 

 

 

$

3,587

 

 

 

$

3,367

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

360

 

 

 

310

 

 

 

294

 

 

 

969

 

 

 

727

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Common Stock Repurchased

 

(141

)

 

 

(35

)

 

 

 

 

 

(176

)

 

 

(45

)

 

Less: Cash Dividends

 

(559

)

 

 

(95

)

 

 

(315

)

 

 

(1,188

)

 

 

(747

)

 

Capital Returns

 

(700

)

 

 

(130

)

 

 

(315

)

 

 

(1,364

)

 

 

(792

)

 

 

 

 

 

 

 

 

 

 

 

 

Less: Adjustments to C&I, net of tax (1), (2)

 

(25

)

 

 

(5

)

 

 

(43

)

 

 

(71

)

 

 

(72

)

 

Less: Change in the Assumed Tax Rate (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

(8

)

 

Less: Withholding Tax on Share-based Compensation

 

 

 

 

 

 

 

 

 

 

(6

)

 

 

(6

)

 

Less: Adjusted Other Net Loss, net of tax (1)

(non-GAAP)

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

(3

)

 

 

(3

)

 

Plus: Other Comprehensive Income (Loss)

 

(8

)

 

 

5

 

 

 

14

 

 

 

(17

)

 

 

35

 

 

Plus: Purchased Credit Deteriorated Finance Receivables

Gross-up, net of tax (1), (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

11

 

 

Plus: Other Intangibles Amortization

 

9

 

 

 

9

 

 

 

9

 

 

 

28

 

 

 

28

 

 

Plus: Trim Acquisition

 

 

 

 

(15

)

 

 

 

 

 

(15

)

 

 

 

 

Plus: Share-based Compensation Expense, net of

forfeitures

 

4

 

 

 

4

 

 

 

3

 

 

 

16

 

 

 

13

 

 

Other

 

(21

)

 

 

(3

)

 

 

(18

)

 

 

(68

)

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

Ending Adjusted Capital

 

$

3,124

 

 

 

$

3,485

 

 

 

$

3,300

 

 

 

$

3,124

 

 

 

$

3,300

 

 

 

 

 

Note:

Year-to-Date may not sum due to rounding.

(1)

Income taxes assume a 25% tax rate for 2021 and 2020.

(2)

Includes the effects of purchase accounting adjustments excluding loan loss reserves.

(3)

As a result of the adoption of ASU 2016-13, we converted all purchased credit impaired finance receivables to purchased credit deteriorated finance receivables in accordance with ASC Topic 326, which resulted in the gross-up of net finance receivables and allowance for finance receivable losses of $15 on January 1, 2020.

 
 
 
 
 

OneMain Holdings, Inc.

CONSUMER AND INSURANCE SEGMENT - KEY FINANCIAL METRICS (UNAUDITED) (Non-GAAP)

 

 

 

 

 

As of or Quarter-to-Date

 

 

 

 

 

 

 

(unaudited, $ in millions)

 

9/30/2021

 

6/30/2021

 

9/30/2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-TDR Net Finance Receivables

 

$

18,166

 

 

$

17,460

 

 

$

17,083

 

TDR Net Finance Receivables

 

681

 

 

708

 

 

743

 

Net Finance Receivables (1)

 

$

18,847

 

 

$

18,168

 

 

$

17,826

 

 

 

 

 

 

 

 

Average Net Receivables

 

$

18,549

 

 

$

17,722

 

 

$

17,750

 

Origination Volume

 

3,870

 

 

3,385

 

 

2,887

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-TDR Allowance

 

$

1,778

 

 

$

1,693

 

 

$

1,998

 

TDR Allowance

 

292

 

 

318

 

 

344

 

Allowance (1)

 

$

2,070

 

 

$

2,011

 

 

$

2,342

 

 

 

 

 

 

 

 

Non-TDR Allowance Ratio

 

9.79

%

 

9.69

%

 

11.70

%

TDR Allowance Ratio

 

42.87

%

 

44.93

%

 

46.33

%

Allowance Ratio

 

10.98

%

 

11.07

%

 

13.14

%

 

 

 

 

 

 

 

Gross Charge-Offs

 

$

223

 

 

$

252

 

 

$

274

 

Recoveries

 

(58

)

 

(58

)

 

(42

)

Net Charge-Offs

 

$

165

 

 

$

194

 

 

$

232

 

 

 

 

 

 

 

 

Gross Charge-Off Ratio

 

4.77

%

 

5.70

%

 

6.15

%

Recovery Ratio

 

(1.24

%)

 

(1.29

%)

 

(0.95

%)

Net Charge-Off Ratio

 

3.52

%

 

4.41

%

 

5.20

%

 

 

 

 

 

 

 

30-89 Delinquency

 

$

415

 

 

$

320

 

 

$

348

 

30+ Delinquency

 

710

 

 

567

 

 

614

 

60+ Delinquency

 

452

 

 

365

 

 

398

 

90+ Delinquency

 

295

 

 

247

 

 

266

 

 

 

 

 

 

 

 

30-89 Delinquency Ratio

 

2.20

%

 

1.76

%

 

1.95

%

30+ Delinquency Ratio

 

3.77

%

 

3.12

%

 

3.44

%

60+ Delinquency Ratio

 

2.40

%

 

2.01

%

 

2.23

%

90+ Delinquency Ratio

 

1.57

%

 

1.36

%

 

1.49

%

 

 

 

Note:

Consumer & Insurance financial information is presented on an adjusted Segment Accounting Basis. Delinquency ratios are calculated as a percentage of C&I net finance receivables. Charge-off and recovery ratios are calculated as a percentage of C&I average net finance receivables. Numbers may not sum due to rounding.

(1)

For reconciliation to GAAP, see "Reconciliation of Key Segment Metrics (Unaudited) (Non-GAAP)."

 
 

 

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