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    OMF
    Earnings call· Mar 2026(Q1 FY26)

    OneMain Holdings Q1 FY26 earnings call OMF

    May 1, 2026 Source

    Executive summary

    OneMain Holdings Q1 FY26 — Strong Capital Generation and Diversified Growth

    OneMain Holdings delivered strong Q1 FY26 results, driven by robust capital generation and diversified growth across personal loans, auto finance, and credit card businesses. The company maintained disciplined underwriting while expanding its portfolio, with credit performance tracking expectations despite some back book headwinds. Strategic investments in technology and AI are enhancing efficiency and product innovation, supporting confidence in full-year financial objectives.

    Highlights

    5

    • Capital generation was $194 million in the quarter.

    • C&I adjusted earnings were $1.95 per share, up 13% year-over-year.

    • Total revenue and receivables each grew 6% year-over-year.

    • Credit card receivables increased 45% year-over-year to just under $1 billion.

    • Auto finance receivables grew 14% year-over-year to $2.8 billion.

    Concerns

    3

    • Back book (5% of portfolio) accounts for 14% of 30-plus delinquencies, performing at 2x expected rate.

    • Operating expenses were $437 million, up 9% compared to a year ago.

    • C&I net charge-offs were 8.4%, up 24 basis points year-over-year.

    Guidance & targets

    6
    CategoryTargetConfidence
    Managed receivables growth
    6% to 9%
    high materiality
    High
    C&I net charge-offs
    7.4% to 7.9%
    high materiality
    High
    Operating expense ratio
    approximately 6.6%
    high materiality
    High
    Quarterly claims expense
    mid- to high $50 million range
    medium materiality
    Medium
    Funding costs
    remain at approximately this level
    medium materiality
    Medium
    Consumer loan yields
    remain around current levels
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Personal Loans
    Saw good performance as initiatives continue to gain traction. 60% of originations are in the lowest risk customers.
    Originations: $3.1 billionOriginations growth YoY: 3%
    		————
    Auto Finance
    Receivables grew 14% year-over-year. Originations benefited from dealer network expansion and new partnership activity. Credit performance was in line with expectations and continues to outperform the broader industry.
    Receivables: $2.8 billion
    		—14%——
    Credit Card
    Delivered strong results with receivables increasing 45% year-over-year. Customer accounts are up 40% year-over-year. Saw increased yields, improvement in loss trends, and decreased unit costs. Crossed $1 billion in card receivables in April. Now profitable.
    Receivables: just under $1 billionCustomer accounts: nearly 1.2 millionCustomer accounts growth YoY: 40%Total revenue yield: 33.9%Net charge-offs: 18%Net charge-offs YoY change: down 176 bps30-plus delinquency YoY change: fell 105 bps
    		—45%——

    Operational metrics

    29
    C&I adjusted earnings per share
    $1.95up 13% year-over-year
    Q1 FY26

    Reflects strong quarterly performance.

    Capital generation
    $194 millioncomparable to Q1 FY25
    Q1 FY26

    Generated higher excess capital due to seasonally lower growth needs.

    Managed receivables
    $26.1 billionup 6% from a year ago
    Q1 FY26

    Growth supported by personal loan originations and newer businesses.

    Originations
    $3.1 billionincreased 3% compared to Q1 FY25
    Q1 FY26

    Opportunities to continue growth across products.

    Consumer loan yield
    22.5%up 13 basis points year-over-year
    Q1 FY26

    Resulting from proactive steps to optimize pricing in certain customer segments.

    Total revenue
    $1.6 billionup 6% compared to Q1 FY25
    Q1 FY26

    Driven by receivables growth and yield improvements.

    Interest income
    $1.4 billiongrew 6% from Q1 FY25
    Q1 FY26

    Driven by receivables growth and yield improvements.

    Other revenue
    $198 millionup 4% from last year
    Q1 FY26

    Primarily due to higher servicing fees on growing portfolio and higher credit card revenue.

    Interest expense
    $322 millionup 4% compared to Q1 FY25
    Q1 FY26

    Driven by an increase in average debt to support receivables growth.

    Interest expense as percentage of average net receivables
    5.3%down from 5.4% in Q1 FY25
    Q1 FY26

    Helping profitability as the book grows.

    Provision expense
    $465 million
    Q1 FY26

    Decrease in reserves driven by seasonal sequential decline in receivables.

    Policyholder benefits and claims expense
    $52 millionup from $49 million in Q1 FY25
    Q1 FY26

    Expect quarterly claims expense in the mid- to high $50 million range over the remainder of the year.

    30 to 89-day delinquency (excluding Foursight)
    2.62%down 1 basis point compared to a year ago
    March 31, 2026

    In line with expectations and modestly better than Q4 FY25 performance.

    Sequential improvement in 30 to 89-day delinquency
    48 basis pointsbetter than 43 basis points last year and pre-pandemic
    Q1 FY26

    Indicates strong performance in early delinquencies.

    Recoveries
    $104 millionup 18% year-over-year
    Q1 FY26

    Strong recoveries continued to support results, largely due to enhancements to internal recovery strategies.

    Recoveries as percentage of receivables
    1.7%up from 1.5% in Q1 FY25
    Q1 FY26

    Reflects continued enhancements to internal recovery strategies.

    Credit card reserve rate
    dropped 80 basis pointsfrom last quarter
    Q1 FY26

    Reflects sustained improvements in the card portfolio, though it maintains a higher reserve rate than the consumer loan book.

    Credit card portfolio contribution to overall reserve rate
    approximately 40 basis points
    Q1 FY26

    Expected to increase slightly over the remainder of the year consistent with portfolio growth.

    Operating expenses
    $437 millionup 9% compared to a year ago
    Q1 FY26

    Driven by thoughtful investment in growth initiatives, newer products, and data/technology capabilities.

    OpEx ratio
    6.8%
    Q1 FY26

    Expected to be lower as the year progresses due to lower quarterly expense growth and expected receivables growth.

    ABS issuance
    $850 million
    March 2026

    Executed at attractive pricing, demonstrating strong demand and market access.

    Bank lines
    $7.5 billionunchanged from last quarter
    Q1 FY26

    Add significant liquidity and funding flexibility.

    Net leverage
    5.4xin line with last quarter
    Q1 FY26

    Within the targeted range of 4 to 6x.

    Dividend per share
    $4.20
    Annual

    Represents a 7% yield at today's share price.

    Shares repurchased
    1.9 million
    Q1 FY26

    Part of a broader capital return strategy, with $176 million repurchased over the last two quarters.

    Branch footprint reduction
    about 100
    Last couple of years

    From a peak of ~2000 to ~1400, then down by ~100 over the last couple of years, remaining somewhat steady.

    Credit box stress overlay
    30%
    Current

    Applied to models to ensure a 20% marginal return on tangible equity.

    ROE threshold
    20%
    Current

    Each loan must meet this threshold.

    Originations in lowest risk customers
    60%
    Current

    Indicates strong competitive position and focus on profitability.

    Industry KPIs

    11
    MetricValueDetails
    Fee revenue$198 millionUSD
    Funding mix$850 millionUSD
    Delinquencies2.62%%
    Capital returns$105 millionUSD
    Credit quality mix60%%
    Net charge off rate8.4%%
    Loans card receivables$26.1 billionUSD
    Provision reserve rate$465 millionUSD
    New accounts card acquisitionsnearly 1.2 millionaccounts
    Billed business purchase volume$3.1 billionUSD
    Net interest margin yield on receivables22.5%%

    Product announcements

    5
    ProductTypeDetails
    Debt consolidation loansupdate
    Home fixture secured loan productlaunch
    Agentic AI tool for insurance recoverylaunch
    AI tool for internal information accesslaunch
    OneMain MyMoneyupdate

    Deals & partnerships

    1
    AllyPartnership to grow dealer network in auto finance

    OneMain continued to grow its dealer network across the country, including through its partnership with Ally, benefiting auto originations.

    Risks & headwinds

    4
    Back book credit performance

    5% of portfolio accounts for 14% of 30-plus delinquencies, performing at 2x expected rate.

    Mitigation: Natural burn-off of older loans, growth of newer, better-performing vintages.

    Geopolitical tensions and energy pricesCurrent

    Unquantified impact on broader risk.

    Mitigation: Closely monitoring trends, maintaining cautious underwriting posture.

    Macroeconomic uncertaintyOngoing

    Unquantified.

    Mitigation: Maintaining conservative underwriting posture, 30% stress overlay in credit box.

    State AG lawsuit

    Not material, no material impact on business.

    Mitigation: Claims are untrue and without merit, issues already resolved with CFPB, confident in winning in court.

    What to watch in Q2 FY26

    5

    Back book delinquency contribution

    next quarter
    Current5% of portfolio accounts for 14% of 30-plus delinquencies
    TargetShrinking contribution to delinquency

    Why it matters

    The back book's elevated delinquency rate is a headwind to overall credit metrics; its reduction is key to credit normalization.

    This quarter, we saw that back book represent about 5% of the portfolio, and it contributed 14% to that 30-plus delinquency.

    Q&A highlights

    7

    Any update on the bank application, timing, and progress?

    The bank application process is moving forward, with constructive dialogues with the FDIC and Utah Department of Financial Institutions. Timing is uncertain, but the company remains optimistic due to a strong case for approval.

    “No updates this quarter. The process continues to move forward. Timing is uncertain, but we remain optimistic because we continue to believe we have a very strong case for approval. We're having constructive dialogues with the FDIC and the Utah Department of Financial Institutions.”

    asked by John Hecht · answered by Douglas Shulman

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Initiatives & Product Innovation

    OneMain is continuously enhancing its product offerings, including refining debt consolidation loans for a more seamless experience and piloting a new home fixture secured loan product for homeowners, which is attracting high-quality customers. The company is also leveraging AI, with an agentic AI tool improving insurance recovery outcomes and broader AI deployment for product development, internal information access, and customer service pilots, aiming for faster deployment and lower costs.

    02

    Auto Finance Growth and Performance

    The auto finance business saw receivables grow 14% year-over-year to $2.8 billion, with credit performance in line with expectations and outperforming the broader industry. Originations benefited from an expanded dealer network and new partnerships, including with Ally, supporting continued growth and contribution to capital generation.

    03

    Credit Card Business Momentum and Profitability

    The credit card business delivered strong results, with receivables increasing 45% year-over-year to just under $1 billion and customer accounts up 40% to nearly 1.2 million. The business achieved increased yields, improved loss trends, and decreased unit costs, crossing $1 billion in receivables in April. Product innovation, enhanced line management, and refined marketing models are driving profitable growth and a shift towards lower-risk customers.

    04

    Customer Resilience and Credit Performance

    Despite ongoing economic uncertainty, OneMain's customers remain resilient, with credit performing well and tracking expectations. The company maintains a cautious underwriting posture, with 30 to 89-day delinquency declining year-over-year. While a 'back book' of older loans still presents a headwind, overall credit metrics are supported by strong recoveries and proactive internal strategies.

    05

    Capital Allocation and Funding Strength

    OneMain's primary capital allocation priority is extending credit that meets risk-adjusted returns and investing in the business. The company repurchased $105 million in shares during Q1, totaling $176 million over the last two quarters, alongside a regular annual dividend of $4.20 per share. The balance sheet remains a core strength, demonstrated by a successful $850 million 3-year revolving ABS issuance at attractive pricing and $7.5 billion in bank lines, providing significant liquidity and funding flexibility.

    AI-generated summary of the company’s earnings call. Not investment advice.