NEW YORK--(BUSINESS WIRE)--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
