OMF - Earnings call transcript Q1 2018

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Operator

Welcome to the OneMain Financial First Quarter 2018 Earnings Conference Call and Webcast. Hosting the call today from OneMain is Catherine Miller, Vice President of Investor Relations. Today’s call is being recorded. At this time, all participants have been placed in a listen-only mode and the floor will be opened for your questions following the presentation. [Operator Instructions]. pleasure the my Catherine over now Miller. is to floor turn to It

may You begin.

Catherine Miller

Good thanks morning Maria. you, Thank and for us. joining

we morning’s the begin statements forward-looking me of this and presentation, presentation our by you contain first be of which to investor that quarter presentation and disclosures during and measures. the of Relations Let found section important will XXXX in The referencing pages Investor call. directing non-GAAP be X concerning X can use website the

statements discussion company’s and statements, Factors statements about and of Our risks our contain that management’s reflecting We you forward-looking press in forward-looking could only inherent caution today. release. these today certain earnings future differ statements. to on will as and current beliefs forward-looking speak uncertainties forward-looking reliance are set place are these business the subject to performance undue and financial not results forth actual to cause materially from prospects

listening XXXX replay remarks made this maybe updated the as today, of If via are call. have that point XX, not this May at after we subsequent been you herein you to and today, remind to some

Scott Officer. Levine, formal this formal our call include CEO will conduct remarks Parker, we After remarks, Financial and from President period. Our Chief the will conclusion and the Jay morning our of Q&A a

Jay. over now So, call me to turn let the

Jay Levine

morning and good everyone. Catherine Thanks,

and generated strong quarter. performance secured year We expense on receivables we well, to lending this Credit last key We with good to operating versus improved year. thrilled a are have achieved last leverage. executed mix compared again momentum as objectives nicely greater of our

continued $X.XX perspective, and diluted insurance a From per improve funding liquidity adjusted As of and we our the earnings balance diversification. our segment reported share. consumer a sheet to result,

across progress objectives So, the our drive key in, we continue in first to quarter. all all

the take strategic supporting primary look our now drivers Let’s XXXX closer at a priorities.

strong. confidence With stable choice customers’ investing are first that that ensure healthy in with when We debt-to-income to backdrop, our our remain options. a consumer explore continue to remain and levels business we they remain consumer see we that financing

marks Done of our April with help the website. was ads Lending I’d business. our campaign, Human fact, presentation television In of of investments two earnings a launched first like our that the are strategic on to In brand the which recently posted fun in start highlight particular, quarter number under

Our who of treated course feel of what human. is anything goal person to and itself, we and excels. being that’s customers and secure, than and They friendly of a raise Research underwriting understood advertising differentiator is in more is lenders. transactional just to awareness when a respected in honest, we a what anxious terms relationship like shows the an nature be that OneMain approachable and OneMain’s how is lenders. we want and are want help. needing important loan, consumer many And to exactly of vulnerable based on and as tone they the and ourselves feel other most from proud responsible

overall in in customer and our risk and with we we as happy done just of two that years. metrics receivables standards portfolio’s are credit improve support appropriate only be to As to experience, Maintaining portfolio as is We will the in returns brand vital. that we we today, be mind. any means will adjusted in disciplined performance growth to loans or This consistent three overall our investments make growth. continue originate expect our hold in marketing our

term is of strategy. to too portfolios our no our a tenant that So secured surprise It as lending. of long is increase should mix priority our objective come this key

operating the and our resiliency improving stronger the portfolio. thus leverage profitability Importantly, of and it performance provides greater credit

fact, not while a prefer to car for. or collateral. loan not in applies that customer be use are more will loan Of or them There every for qualify course, would not securing of otherwise able secured they attractive our plenty simply would not looking quarters their that loan, are is approved a offers for customers

all our mix adding three very fluctuates the towards pleased of trajectory priority. loans auto able with to our still approach the we’ve and secured growing adjusted XX% branches on been both legacy we for key secured our appropriate focus, mix secured quality consistent and parity The driving returns, Overall, We’ve credit are secured risk As priorities to remains while standards, focus the key mix receivables. demand of said, we’ve and OneMain with the our our a flow lending book. a and may products direct overtime. maintain

priorities We call over to to Scott. strategic we which for achieve turn profitability aimed outlined and way of are And I’ll our our at of all well with portfolio. the enhancing the XXXX, resiliency the that, in are on

Scott Parker

Thanks Jay.

diluted We XXXX. per Our per $X.XX execution on $XXX basis, the strong earned first XX or on performance. million our GAAP quarter or key initiatives our $X.XX million led the in of versus quarter financial strategic first a share a share to in

$XXX our growth, I’d earnings consumer defining basis diluted and to driven by a compared per an $X.XX our this Our the impact share share in of million core has acquisition per $XXX a on quarter of a of which like $X.XX strength earned million quarter operations related or charges. GAAP been segment insurance to first or XXXX. the income adjusted highlight net

expect We trends continue. income these to GAAP as improve

net the activities. Originations by last drivers key last C&I quality average flat including reflecting financial We growth. about yield. quarter, the Auto. feel was was billion billion the from Interest level, about Direct that, by the almost X% quarter, year. versus year’s because performance income great $X.X receivables reflecting secured with high Interest years’ more from XX% billion last in portfolio up Of our the this $X was year, of $X.Xa higher income assets. million $XXX was up X.X grew of quarter quarter. stable fourth first discuss billion last first than for integration-related were Ending Let’s impacted

relatively Other million was primarily due $XXX This to should levels to remainder quarter the portfolio we Investment first first income in lower We appropriate lending to the down as quarter. of flat for our the was expect prioritize secured for portfolios, revenue yield the risk-based investment continue mix and XXXX, income. remainder the remain year. X% last around levels compared of year, pricing.

line First expectations and quarter was last credit performance showed with year. in compared our improvement to

charge-offs XX to XX net were X.X%. delinquencies plus were and Our days X.X%, XX delinquencies X.X% were

we terms remain by first year million in for the on In to below charge-offs underwriting. charge-offs outlook, expect continue of X.X% quarter. this from $XXX decreased first the to achieve X million Total benefiting levels. quarter, receivables to full XXXX, on and quarter in X% compared We of secured second X.X% quarter net and lending our net improve previous disciplined of the reserves credit represented track to

We expect reserve ratio our remain year. the stable to the for rest of

than OpEx expenses about First and X million XXX lower improved were year. last our year, last $XXX million, basis a ratio versus points quarter operating

We expect expenses the brand to quarter, increase marketing of and reflecting second higher in seasonally expense. primarily launch campaign the our

that notes unsecured issued to in due and our used funding and in deal was of $XXX liquidity, first quite X/X, We of our mid-April and A longest XXXX. to unsecured million on seven for largest active year X all Moving the redeem accounts. debt debt to date. at portion us by another of billion quarter X.XX% successful $X.XX was quarter

At end our of duration the XX% quarter, debt towards we longer In deals the ABS our attractive $X reflecting almost at billion of issued was for first great total goal year. of addition, secured, XX% progress pricing. of the

We our interest for towards duration the in $X.X shift interest it unsecured $X.X we longer and by expense assets. undrawn and a a of liquidity allows to capacity second, our reprising secured profile debt having mix, position. billion our us we debt two result and by sensitivity remainder first, reducing modestly this had lower year. higher this expect a is enhances to increasing As interest billion unencumbered our manage despite for of $X.X That exposure. cash reasons; very cash funding cost important said, continue billion rate strong higher we standpoint, of it And From liquidity equivalents. more of of conduit our had receivables; unencumbered be

As upcoming of operating planned or of our capital capital have assume XX event markets of a we of maintain principles if know, least to and planned receivable is access, and the coverage XX Currently growth to assuming XX months you one in cover dislocation. at core maturities no markets expenses months months growth. liquidity growth no

we’d been So liquidity in from never a a perspective, position. better

growth turn earnings We end remain mentioned Lastly, our at unsecured by of hadn’t the on was ratio by about the earlier. first than end time XXXX, seven times a higher track half we if upsized of accelerated that I GAAP to quarter deal. leverage achieve the primarily debt and changeable our quarter, driven the X.X

them track the over With priorities strategic our and on progress the out end by great the year. remarks. of on call Jay we made we closing achieve year turn I’ll remain for overall, his So that for laid to to that

Jay Levine

Thanks and sum, brand will building of lasting the are Scott. In impression that withstand we a leave time. a test

their put that their matching them in We continue investing right customers experience address first needs. the and by financial products to with our individual

and operator growing credit I’ll next and years strengthening to for positioning in we’ve call our our we adjusted In resiliency the we the secured We been our for XXX structure short, are than to are disciplined a With beyond. Q&A. the standards, around capital of the are to lending, begin enhance turn the that OneMain prioritizing appropriate over business. and to risk here a more be manner and returns by century

Operator

is Instructions] from of [Operator UBS. coming our first Eric Wasserstrom question

Eric Wasserstrom

the a your bit course part could than of your competitor market of very the and Jay, talk about you receivables. we terms large term trajectory, just in double little in terms of footprint growth more are longer size space, of next your of

secular so year, maybe the view opportunity, medium over not for we this but the term? should how So growth much

Jay Levine

question good we one and about. really a It’s think certainly

making we of on lot about. most standards the loan consolidating the other I’d filter lot thought thing all which also thing risk is is the to a part actually about and growth sure debt think I other about our think of our customer. every is, important through on remember, of meets the that’s the debt important a say think we put is

So raw the on and the that actually the numbers we’re part debt paying dollars other of you a it if is at down consolidating look and our customer. out, lot of putting

– we growth about So the of consolidating good, of it’s credit, customer actually XX% debt. out all it’s outstanding dollars additive the lenders for put are in adjusted other directed your to not other actually terms necessarily to and

feels most I what we the as that good to thing is sort year important most I a number our don’t growth is, both think out the the thing laid we got customer beyond of particular meet think meet it and sort But X% being, the think hurdles, focus does on. of it growth for this important hurdles? we’ve it of levels over does right. is so if and XX% and our

Eric Wasserstrom

just And say maybe single where we a averaging longer about leverage think follow-up; figure, optimal growth environment is under an circumstances? the for those you term how let’s in should digit mid-to-high

Scott Parker

Eric, is Scott.

little significant expense kind the able And we about to year as bit that expectation the you’ve in a we’re customer the that, we think we you will so to that a As operating continue higher grow receivables a to XX%, investments that our operating future. talk X% bit seen we have we’re largely integration, to far technology fixed leverage we’ll plateau had other XXXX we experience as if about making this drive had support as that because for and infrastructure. drilled and leverage of some in little cost

Eric Wasserstrom

about next financial And the leverage? speaking

Scott Parker

You growth? EPS mean

Eric Wasserstrom

of optimum capital that what your leverage, sort your capital the of ratio, circumstance moderate ratio capital terms appropriate positive under generating like like in of means growth Just in structure? operating terms a

Scott Parker

past we’ve targeted X%. in We’ve X% the mentioned the that in to probably been

We’re focused times. seven on getting the

past. as to about a capital talked it’s As about that between benchmarks think optimal the around think a two the in within even capital lot future, find outlook. of is excess we where the get target we’ve we place I that those the we’ll But generally with in of structure

Operator

Our the line from Securities. JMP Scharf question David next of of comes

David Scharf

credit a of lack strike on echoes asset approach question season. is discipline a in certainly the growth I’m the year. for the heard you’re launch whether term. hot, marketing lead employment if is Jay a that obviously focusing other combined to the seeing north new there a consideration the the in term, low this XX%. a campaign wondering stable given growth environment, with the better more of strength subprime on immediate it during principle, I’m Is wondering from reporting asset ever there this follow-up anything but but Mine growth previous is go we’ve what iron’s to while maybe guiding would of lenders consumer the near and

Jay Levine

our awfully the winds would we’re XX, I loans X, say as of think not X, as fixated long XX. criteria it where sort X, meet up, I on is, What risk

economy have times thinking a I don’t that along been, chucking but good think is initial it Our while given and quite all for we is last we time, that a know and that. forever, the recognize being good

are So that be want sure going we economic on we us. the we’re put loans not with just to to comfortable the make matter loan that cycles deliver what

David Scharf

And just mentioned side, an you in-house the more front. credit follow-up, investing update some I on quarter on side in you that one collections, have the last on recovery just believe can may provide

Jay Levine

to part more activities continue to as making use in-house we transition. kind post-charge-off our Yeah, were did in have that’s regards third But we to activities. and but diversification that we of multi-quarter we will mentioned, some process as parties bringing back in of regards

Operator

question next of Arren line the Cyganovich comes Citi. Our of from

Arren Cyganovich

to So XX% is been kind around the in the and still secured goal to XX%. get you’ve running of book,

You to mentioned secured moving increase of forward? of that about choice some do you as think gating consumers. you it portion What factors can just

Scott Parker

X.X at the last of But secured. know a percentages. I look you can billion was If you of growth $X.X the growth, the at that billion of look year’s year-over-year,

understand have a unsecured a the are you little than loans secured As larger little and duration. longer the that

they put an bit point on even little view So around that origination as a of you on longer. hand

Jay current mentioned. from continue up levels portfolio So that that to kind the to you XX% migrate if security of see of up

Jay Levine

time looking loan showing add, I largely customer through go day, the if end would continues the what doing various Could customers on the is of options a process, come for selling unsecured to – money. be in think be available far we’ve come our them At comfort very of walking lot and things it’s we’re come, a people them of also that but they’ve way time how as on by the part continues see on and I front. as still evidenced that to long a we to continue to it goes on and just progress the

and So, I’d you two that former, over unsecured turn take three to of the see the legacy over booked to of ago Scott almost as approaching that I’d time chunk priority would probably especially happening call, a expect can And a of just next say we’ll time continues help as relates big laid the as those is couple years. turn. out, it OneMain lot to and years came

Arren Cyganovich

to And year. anything down then year. for the later have boost for still the guidance yield quarter, in you help yields first that seasonal stable the the dipped there is aspects Yields kind would their that, the of

Scott Parker

two then monitor talked you that during down actions, we’ve try it of two we is offset expectation things. comes trajectory how about taken It’s will much of it kind give Auto and that But Direct XXXX. is context, our As to to themselves we’ve really to those continue growth a we pricing those.

Operator

John Hecht line the from comes of of Jefferies. question next Our

John Hecht

guess (inaudible) think investing the how ecommerce I how versus, years, question on about it, front intermediate have end the is, longer over new about X the customers. and do and another term think that we you new of in call X finding maybe next branches funnel growth that front in should focus. to techniques I

Scott Parker

through stabilized general of around a little hear of to part, kind our bit branch a little but years. last gotten the I in network. We’ve the we’ve hard managing that are think we couple as John, first bit

them think more out We just to through we going investing branch from our our there. prospect. about and multitude expenses, brand front other the which capabilities our When is opportunity, Jay of it’s think things approval where potential that kind process. may about locations how interact of digitally, We market to experience, self-service of overlapping with is perspective. underpenetrated so think things efficiency and lot the There some that are where a be have more get that places are are most relative consolidate. you a we on people customer network give certain awareness multi-year we is, that of in we online, that done of there the that the just customer we that mentioned, forward, it’s retain as the customers you of of about ’XX do when do some we mentioned. more one application what two Part is or process branding of we Number whether talk a to

about go capabilities something provide of making customers the that next of years, on so that those it’s So can sure to you the we think we in performance are principles. consistent stays investing operating be as that with the portfolio going our and choices it’s that our fact when we to all predicated the X-X

John Hecht

on Second payment of here. borrowing know question, tax I yields in early changes But changing it’s behavior of any very on kind the environment indications in early of of reform?

Jay Levine

pretty I’d first our Tell previous at you what, looks similar. stable. look say looks performance it our very When quarter we versus years,

Operator

next Michael Our Wells the Kaye Fargo. from from line of comes question

Michael Kaye

of you’re I of I a intensity this you of lend some in a if some any where lending little competitors reforms? Has from your similar question, and your to the an market? but impacted bit segments of tax certain see had wanted pickup, seeing

Scott Parker

know I to that anything, but consumer, take feed time seen through it not haven’t probably some the But think have we for they’ll seen happened. that. I We

either for of in on kind different to and any XX really look we on the in in months. origination side the payment or different parts change point we trends seen received any of to change last haven’t mentioned regards to we the As Jay’s side business, at segments the regards significant

Jay Levine

of our millions up a how those it things reforms, cash good of give we It’s change of There free sort a be but things that did more also the net their (inaudible) clearly them some impacts net of about landscape. year-end with notices lined sort going people. sort bit, our month a add were average overtime. tax number is will to $XXX not out mid that financial part little think related But terminally ahead. for other were of of more thought of to That $XX,XXX. the trickles customer reform and sort customer $XXXX averaging That’s help $XX may flow. which $XX tax given lot And one to most of flexibility it’s or some we’ve

Michael Kaye

financial to for the could like competitively, on the end working wanted change on lend this still how market. your on you’re thoughts example low impact know on (inaudible), your you habit could I but early target I potentially of get your to

the your other on curtail provide On does of some it hand, could banks brand near for prime some opportunities, some of the example, lending market. their other

Scott Parker

I think accounting you as change. CSIL an know is

So the and the change. the the customer doesn’t flow cash the portfolio economics of of economics

from and we’re – loan timeframe. think view on the in kind competitive perspective see that. and life to the to of of doesn’t clearly that late But on we again that, that fruition will as as a market impact we focused when that loss So and of a about the segments is portfolio about think that kind -‘XX the comes impact of we us charge-offs the when a change accounting kind has point the ’XX we what in place, from on. we impacts It applications how we’ll CSIL of of our preserving go emergence about though focus different approach of actual current the economic really period think you and that are

Operator

next comes Suisse. Credit line the question of Moshe Orenbuch from Our of

Moshe Orenbuch

market talked this subprime. Jay, been you place people could have unsecured little that’s get large talk that and reduction to one kind supply. goes I each the competitive market think fact that months the of pretty say there’s number somewhat when XX credit going on just that a broadly you’ve I you more credit. more environments stuff of because their a was in seem to seen significant it that little whether at partially and to ’XX thoughts moderate hoping of environment But growth market bit about, And credit reflective that that market, for look would X last compared that a your about the in whether secured lenders between individually toe player card a supply and in you in been something is that maybe in forward over there’s prime the the of

Jay Levine

fair a observation. Look very

be our But of few do. seen if up say good we I really say competition? make things other the of some to on, taking come in of all some customer we’ve growth based feel of and you transparent us things the securitization just we’ve rates. their what you close think sort loans to year this probably offers good take comes really Yes, say I’d sits. every want there to But what quarters in things those in I’d what in and securitization other pretty feel our see. data competition says, about less where we know I four on hard seen be see some that there same to putting and out flow putting would Is well sets our think goes funnel, Not application of steady three and out we data markets. on. capital from you exactly about the definitely lays the fed via sort be is of of that applications, originations to a you it’s pretty back last And that’s want and or and terms

Moshe Orenbuch

how should the you more and talk benefits higher of talk from kinds conversion it? think about what little And this bit timing maybe of sounds we about bit maybe would observations of campaign. a coming brand Is it that time just you see. little be doing could expect it’s to to set about in, like the people it that rates, it good a Obviously a

Jay Levine

It’s we same a things really These about. good are question. think

fun are. think different I website. on awareness? I is will regionally. is of is We’re testing a the short, loans, what brand getting market regionally, to who the here. handful more and encourage the bigger we inform and go and markets, to What half that our do certainly I Are and do so as they talked to doing I’d see staring campaign really about. it that a take in investment say converting parts us of we’ve you of what we’re of do these everyone made will we’re speak much before made investments They’re certainly they’re probably nationally, and raising we things and We’re this are Do we’re results testing the on we quarters. But taking think it’s on after national, national take they’re look or traffic, we goal at up we than country actually from with really a couple and the all to ad, of dozen more exactly of but we the the testing a we’re want the we it

Grand you’re Ohio, if Rapids, know Pacific say Michigan, markets markets. Portland, Northwest, in in fewer the a So like can if But let the it’s you I we you’re that. want to

you tuned see billboard, testing some But in effectiveness a if we’re of it we’re that’s quick doing, some and with there So up anybody it. radio the is spot. backing in, might what second we’re really XX

most And talk things great the Super short our the of initial its the funnel is really have been what You XX,XXX a not us from all that one, response has that feedback right added things about won’t communities, I’d with this people and we company from say the Bowl think all and I awareness but and we pricing doing. its important to It’s difference. great. really seen added measures we’re think soon, about to different make to closings will make a feels the any time that everybody a and we’ve these on to got across the but help see advertising the the who

Operator

of question of comes the Rick from Shane next JP Morgan. line Our

Rick Shane

we how DQ for hard of delinquency from we That perspective changes the Is the should roughly losses the for sort say When last where But were second three to based certainly expectations were year. X% basically trends the year-over-year comparable next that to it to fair and in were better a entering see that year? you puts target. the want at levels XX quarters be think look quarter last on at about [NCO] that just [MCS]? in guys to XX

Scott Parker

X%. I But metrics stabilized the kind charge-offs that of too quarter. little for of the are year And year a the as still period, so update Rick net the has, has of in when think on bit we we get we comfortable expectation full to and kind kind for emergence provided I below portfolio with the full get second our second know through, it based give of loss as with will our portfolio, point you time. quarter at credit

Rick Shane

Perfect.

which in that stabilized you words to I I think trying year-over-year makes on the was characterized it is a basis, that sense.

I how should would to related in better think the than is be on layering side. Second know to much be we campaign. the question in certainly curious our a place where have expense done expectations you TV guys you

you coming the can of some base context the on some good think just can put context around that over quarters. given about how we develops If next that so rate,

Scott Parker

branding know mentioned, X% a the second in Jay specific quarter-over-quarter campaign so quarter I we as were we slower quarter kind trying as for first put of And expectations. the give us. seasonally to the think quarter started as not is you

we roughly now campaign the think increased of branding are you the So quarter. sticking that second laid last in right kind as and beyond combination in we marketing between expense the out we on increase expense what and has to expect that of my the based should that operating I kind quarter see remarks and mentioned operating efforts, I same

based on layer I in of to So should you it think be kind able that.

Operator

the line Our next of question comes John Janney. of from Rowan

John Rowan

goes, growth seasonal pattern there quarter that an X% was economic better on Was say, first can that beat quarter. growth of to this wouldn’t anticipated. not in growth guidance earning that you but is to, of year later anything your maybe horse first to tailwind in loan necessarily there trend as was we far the the in dead better than growth XX% here, atypical a look in saw or the more to or in better XX% As to

Scott Parker

again But last last almost we’re try of let’s the remember quarter $XXX through in that it. piece remember to Well parse going first every year year, I integration not know shrunk and by million. as to we went we

year-over-year our would you’re of mentioned expectations, the that And times, if where as of comparison giving for if that think a are impact. and a higher that little be as we kind it good of more looking long the I just we ends are, Jay and us. focused is up on bit as fits credit So for expectations to return and receivables our several

John Rowan

transactions Apollo that’s XQ? schedule on the then to still close And in

Scott Parker

plan. the That’s

Operator

Our of from Caintic of the line question Vincent next comes Stephens.

Vincent Caintic

So unsecured growth and and already flat XXXX, loan loan you good and to closer guided to. we had mix see are and yields you’ve for you’re staying improving mix, and while secured good that credits forecast [burning]

I’m adjusted there seeing driving or of could nice margin discuss Is kind anything wondering, that industry what’s if risk expansion? specifically risk So expansion. nice adjust just margin expansion, you’re margin wide you

Scott Parker

to help pricing has business side which operating also year, as combination of priced, growth Direct some able a losses know I lower as initiated we and leverage. offset of Well the on yield initiatives of us last greater but things. you couple Clearly a is think the that the of lower was the Auto

been to came it about as combined XX% we’ve quarter. as hard that couple So and and get in are charge-offs we’ve of over I of to the years around a the as getting from company, the unsecured of yields was of grown work that XX% together we the from Jay kind kind when the below down organization to been able think mentioned the last has - combination book

that as trend able been a down expenses. same will the time, margin. to and you So better At yields risk continues we’ve adjusted drive operating the give stabilizing

business. been in X% you’ve operating the kind bit out continue So I expenses, be that, to operating given growth both state we little well that’s have, we’ve drive going even not with leverage the of leverage steady continue mentioned that of we as will the put there as the to rates financial is to able do as and the investment to a

Jay Levine

growth been the can themselves. of to a kind credit took expenses, numbers beauty the given it speak of you – we’ve way, of for manage putting, long of time numbers bit It is of but manage kind the a to model. sort get and little is goes the This that modest

Vincent Caintic

improving. staying already to know impressive at credit you’re and and yield the It’s of And mix unsecured. flat secured I see

we’ve of is improving questions expanding. credit So and been about margin going getting a lot stay yield is while how to flat is

So been great (inaudible) to the working. see its what

in questions document I’m you The that and this, second a get. can another until to sure remaining much we Apollo see several think answer there’s provision and I June up stencil up then investor, XXXX. through point, investor so XX% but the how not (inaudible) just usually

provision, do that wondering thoughts kind what can for standstill they there? what are Just of your from

Jay Levine

collaboration for there is the I’d say, which the Apollo (inaudible) the closed a get has we question public and post-closing, say second and first better far like deal great we but perfectly for I’d on do been thus want is to track to exactly deal for we what intended close. quarter. all, to Apollo

Operator

next Our of the of Henry from comes Wedbush. Coffey line question

Henry Coffey

nice growth other – or big to are going through and on work. is you’re on? ad a world? it some of rate When branch deserves an with that Who loan there it? getting $X,XXX value sort very instalment like another ad to campaign, has who small it’s special focusing a XX% about opportunities. offer, reach its in proposition, that a you the be to the that really is a Obviously it the done value it customers, headed loan attracting about customer Is on prop credit that’s this but better it in direction borrower campaign some is online it you’re you that new real think Is whether

clicks. do on can’t a You few just it

who So it that is in ad to you campaign. really this bring hoping with

Jay Levine

consolidate will This a to the It’s pretty things that go we down we it, ad better it’s meant of it them get we need, customers They in. to the it those this put for debt. all be among customer amount loan we you in But asked to want of that are can to consolidate we’re we with, debt, or of Certainly it’s for to might know they stereotype are when done place. say they might we that swap we a free they who can campaign, have The direct XXX more important to a than does of them sit broad to our other make to put population sort debt and I of that million for see cash branch. The look can a it afford with depth they important goal we sense, interact after help some more of working at what be which appeal have ask to is borrow, verify could somebody, potential And certainly were flow. really targeting America. that and think Can it’s people and population, be loan most think making mail sort active in have is there. better need us what consolidate a sure to goal hard make and our thing or we sort it, place. a go potential have, are population, if and expensive But able now. be other can there’s at top them a potentially is able the liquidity. to if

don’t So about I our people enough challenge is know us. biggest think

exactly to that’s So what is this do. meant

Henry Coffey

a be the to or digital strategy there Will --? component

Jay Levine

literate. know start said, we’ve is majority this app also vast very XX% we new but – of not are online. of customers a customer Absolutely, computer just look the

a we want not the drive to a more to time a though pre-screening, mail website to efficiency even it our lot lot wants everybody through So of go to creates for they a branch, come that and us. people in spend

of sending and is So in to Customer really best us that do come it’s of branch can for a building accepted what of to they (inaudible) Omni. the lot film about hand, really kind when it and relationship. increased get the before information

but you a we of and will as of really hit So so people as it, aware as to can debt possible Pacific radio, we that better we become target, venue put doing give that million should of hope XXX that to them play place. us to across we’re specific and all other, we test and Northwest I certainly right, be will the medial, has in cost are billboards, each in ability said But consolidating a how to more to some to Michigan TV, hit a of that think we Ohio, the them not be allow that can every is lot need going the cities be in an it’s goal that high can that many pay will to insights going social should about has anyone be we that. you’re

Henry Coffey

then between And we’re earnings the probably It’s coming and you gap at earnings. going how quickly and But the itself. can point do and the down focus call does almost can think we Scott, that the number adjusted what GAAP for GAAP capture the how we’re company. complete where close on really we process rapidly quickly

Scott Parker

as and smaller the and we two impact as beyond ’XX to last is get think years was about pretty talked in small. I much the in of ’XX we’ve its kind

legacy of there we’ve of those. purchases for on that been working of year charges this kind which back some redemption also kind OneMain as what think accounting through as we do bonds, a the had I So some bought has we’re –

items the in had So the market. we’ve on have you’ll those that see based our original accelerated success two timeline on based

pretty to as other. XXXX these think close numbers to in I So you will each get be

Operator

question from Our line of next Barker Jaffray. Kevin Piper the of comes

Kevin Barker

could hoping it and in hoping and was you lending. some asset the secured us detail moved I some markets. has of unsecured the more been little I higher on what could and Auto by give on across versus constraints have pricing company data can you detail consumer given was are your the there a then rates certain do maybe you

Scott Parker

We’re details, test look we not continuing to give place. market within but at going the specific opportunities and pricing to we’re

overall around the duration as up is environment is to have short-term liability the the has to you or mentioned what what or there we’ve to competitive optimize buffers think inter continue they of think about when impact other to that kind corresponding see adjust sensitivity. our that, down want one [faith] rates assumptions competitive the of rates funding you on you as I assets, in been indication we at side least which we longer the way pushes the have what that of do the gives and of nature. want and more to months what to and and and us several offset the is on opportunities in to kind things to are you for have our down on also some for depending in to regards past, to but questions drive pricing gone XX come the volume extent doing. ABS the price not continue make for unsecured lock the then But spreads kind kind as But up XX around

Kevin Barker

broad you when think that have localized better certain or that on pricing feel you making you then do in is changes based you feel do pricing that your the its those like about some And you’re across markets of most where markets? of

Scott Parker

And state products. so you you know do rates that fine based our different we’re broad we the say is license, that. to then in it different states state. we But the tuning Well was I’d have charge relative as within around can there

we been to for So at products. each in different rates increase have of able those levels the products three one

Operator

Compass Our next of the Michael question line comes of Tarkan from Point.

Michael Tarkan

percentage The that is repeat borrower to close XX% still that level?

Jay Levine

stable. very Yes,

Michael Tarkan

shareholders. And an some the have thinking about returning I’m there you just the kind you’re on you’ve potentially in potentially update in terms at how looking returns, but CSIL’s curious of if I then talked capital Jay past about to and of know capital horizon,

Jay Levine

us, There one is move that the fast a target it it’s conversations. in continues ongoing and or think to certainly we clear forward We’ve as I for Board. seven times to with be will our leverage everyone to an direction getting milestone made that dialog very our critical that those X% closer that

Operator

Bruce of next Our America. line Bank comes the of of from question Ken

Ken Bruce

campaign the up forward look seeing way in where may consumer yourself its and But of that frankly at is be rates do look door to a with question I’ll to growth to are I’d try of credit to I the own choices. setting you how maybe and at to get your I little it’s lot seeing a the choices, for other in as health has more really health within for of execution. at your in for the keep brand think changes beyond like quarter this any changing. The can to good OneMain the how financially big of works. (inaudible). that that front picture. another they see deteriorating you’re has some y We’ve consumer, front short; going coming guess terms that a yourself the trying to the markets firstly, go asset in all, get product and own consumer come base are of our really other indication understand how to is bit general looks conversion well XXXX with a give and the great little consumer credit to in I the I’m from seen more clearly you as that changing and and bit performance perspective do from do again coming groups you

Jay Levine

other look say have very consolidate credit, question, Sure, what ones of have but looking stable. the application the They data flows, credit bank that of say time and a spent remember have generally a underlying things. loans we bigger really our needs customers mean to loan. I’d most closed, importantly of a all vast they financial at picture They the America are are the they lot accounts, at and good majority cards, being and I we’ve And mainstream trends on the highlights.

we’re America. they If you like income, can to just of seeing what they have, metrics, look handle, trends amount the the look at leverage of the payments that any

very We’re sort can seeing what of terms similarly, the of in responsible America looks a growth customer debt that’s like seeing handle. X%-X% but lot we’re income that numbers, all grown,

our take to going a and quarter were set loans, but they of so against a We’re sort putting not million regularly. will in that year for ours this not has pay can consumer, give to and attention competency know maintaining make handle. been be criteria customer steady anybody, is metrics There or core wide there, that the plus close or afford going of million maybe our million of numbers will stable the in can underwriting terms in keeping important payment what is within X that to sure very customer overall us is loans one closing those It’s make of a loan we on at very range quite half to. that if loan them probably late. good a we the eye to problem But we’re

Ken Bruce

of know Just for, the as being better after customer constant of as quick it, follow-up, reflection that lacks going a do that you more state segment just stability you’re look of I don’t a kind phrase at way recession. a to

different the from little just lenders. than we a changing much are other seems are consumer economic we because what hearing where be to in not it from cycle it’s So

Jay Levine

a it America. – I’d things that becoming There’s across are state everybody to. they’re more expensive accustomed certainly of what to call

seeing cost, a then rising there’s know is X%, But making that housing and way. on generally customer and there’s coming got You places. is year modestly hopefully there that’s you’ve those other college we’re and a long are there healthcare, education what income from X%, X% things a goes savings average $XX,XXX

lenders the additional responsible in been to I and of paying a pocket. especially have are about lot they most couple of are customer’s think We attention the lending they the last to in people years leverage have, other about

shape forget, I to. of meeting A also applications. filter. come we’re seeing to those the at And lending to one be decent I’d we’re pretty least those don’t the even million XX million, don’t close say, X customer big happens in our trends. think benefits chunk of The

added help we’re to challenge. get lot debt who another and So strapped that’s strap, we does debt need have turned finance on not because they’re They not more down them. help and financially putting already a to trying these to

they were out and in filter talking our puts a underwriting of but everybody see that better those that figure So thanks some loan a more could financially in goodness help that for points actually right, and customer, really you’re a automated you Yes, those can’t we were strapped about. the ability to place.

Operator

the question from of line Piper of next a is Kevin Jaffray. Barker Our follow-up

Kevin Barker

have you been answer. so All my questions Thank much.

Operator

Thank disconnect gentlemen a call. you time today’s wonderful ladies and at lines does your Please conclude have day. this and conference this

OneMain (OMF) 3 May 182018 Q1 Earnings call transcript