OMF - Earnings call transcript Q1 2019

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Operator

Welcome to the OneMain Financial First Quarter 2019 Earnings Conference Call and Webcast. Hosting the call today from OneMain is Kathryn Miller, Head of Investor Relations. Today's call is being recorded. [Operator Instructions]. It is now my pleasure to turn the floor over to Kathryn Miller.

begin. may You

Kathryn Miller

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

important to by XXXX and contains presentation statements can begin Investor measures. me in section of Pages the investor concerning use and directing which be quarter Let The first of you X our non-GAAP forward-looking the X presentation, the found disclosures Relations of website.

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

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

a Our include of and Chief session. formal President Doug our Conrad, Shulman, Michael we'll and CEO; Officer. will this remarks, conduct formal After the Financial morning our remarks conclusion from call Q&A our

over call Doug. So me turn now let the to

Douglas Shulman

the I'm quarter. drivers Thanks, a first XXXX of is be of results great strong the very Kathryn, off our during start. morning, key and with good everyone. many across to to business pleased you today. We achieved

continued diluted be through a up strong. take you & Credit earnings $X.XX Let Consumer to share, me Insurance were XX% year-over-year. few. per

year-over-year. our delinquency period a the early- last both XX And Our basis net declined points same X.X%, late-stage charge-off and rates our from rate year. was improvement

XXXX. first XX also the from operating down improved, quarter ratio basis Our points expense of

strides in during funding also the first made liquidity quarter. We and further our

a sheet conservative As before, a having liquidity runway. committed we are with long balance I to said very

conduit capacity and strategic earnings priorities of $X.X we targeted business. generation our on by secured had first at debt quarter. and million. Overall, well great go all for this As rates quarter, a detail, at Micah greater outlined We're $XXX core in we billion we are attractive we will issued to of the through enhancing strengths expanded the of unsecured and our another the achieving year, our way which

Micah Before the detail, quarter's some review call our turn which I the over we're I'd to building strengths. in our ways to to more on results in of highlight like

First, our return profile.

and Our driving business servicing a national network, collections hybrid strong branch with digital robust is model central results. capabilities and

an about than segment operating by generated performance Our standing return quarter, branches, last to of to continuing points basis These We're other receivables not first analytics will experience, driven a our C&I streamlined in lead experience productivity application technology and year, advanced better in are But a in we customer our and XX customer on part of leverage. the still. including stronger X.X% credit teams. innovations. increased improved invest in and our process, our enhanced

resiliency and resiliency Our and the stability the secured receivables our business quarter, years. achieved ending proactively in in of through first liquidity. We're of of ensuring representing funding all business. also to X This of enhances net reached growth our our the the last lending approach XX% we've the

maturities, the which our average we've of lengthening discussed X.X duration past, years. in been As we now the unsecured is around

markets. in event no and unencumbered unsecured our we've in runway we've debt as And We assets any of given -- comes maturities, increased even more total timing XX% in securities our significant our more towards due of capital have our the profile, unsecured staggered giving strengthened us that our liquidity of also unsecured liquidity than the shifted disruptions so the debt, year.

capital. now, excess as business Lastly, of XX%, our tangible generates all by the equity common in with you considerable know on return

reinvesting and leverage prioritize we are to continue capital our call, mentioned time, operating will generate expect the continued that last best allocate experience, value. call our to generation. our in customer And by to Over focused business balance a sheet, deploying a manner we Xx, Micah. paying considerable I year, and we in With let capital and me this As as shareholders. continue we long-term disciplined on dividends profitability in to to strong that underwriting, capital conservative over that, turn builds the shareholder we deleveraging the

Micah Conrad

good and Doug, morning. Thanks,

or share. results million or across-the-board. was were We up strong This from year. of for $X.XX Our a income $X.XX the first diluted million earned $XXX period quarter last net $XXX per same

net $X.XX basis in share. per earned $XXX an first the compared segment million on income Our diluted quarter to or This $X.XX $XXX of adjusted or C&I million XXXX.

earnings As maturity. past, about $XX impact million will C&I the the included debt and to December our continue purchase declining quarter Non-C&I the impacts of in by pretax driven we've to acquisition-related in and our of accounting. GAAP redemption charges first of XXXX charges the converge highlighted related

after-tax non-C&I approximately for the year an million $XX expect basis XXXX. run impacts to on We of full

move which secured, year. billion, performance. XX% was Let's were secured Ending receivables reflecting net up to were drivers $X.X of year-over-year. of XX% the $X.X the $X.X growth our from on financial quarter last billion for of C&I $XX.X key and billion, Originations billion

by of first and in grew fewer led secured reversals over an longer increase profitability the XX.X%, Our generally of improved was income the compared XX quarter. the enhance XX-day of quarter over billion, XXXX. portfolio which business quarter to Increase stability delinquencies, same first to the about basis reflected to which in $X.X the continue the points Yield term. period will

this higher-average expect Interest so million, up of was the $XXX Our receivables This increase we year. primarily APRs to yields our year's X% remainder levels. from last secured origination reflected yield. income higher remained year interest by the stable the Total was our income adjustments revenue investment driven growth, at level due for first higher as and up other last despite cash This equity our balances. to mark-to-market quarter, $XXX higher in portfolio largely insurance XX% on as well income. securities million versus positive was on continue in

was performance credit mentioned, Doug across-the-board. strong As

to XX delinquency was the first rate quarter. X.X% for XX Our

period Our points basis versus X.X%. ratio improvement charge-off the of rate And was XX XX-plus our last same was delinquency year. an net X.X%,

sequentially loan reserve generally seasonality of secured Our typical points by higher well X.X% to decline the basis our of as $X portfolio's reflected million benefit mix. level XX receivables. as or This decreased

quarter in operating an XX our $XXX points $XXX million, as continue greater well leverage The of were First the expenses increases and scale proportion primarily of in year-over-year, of a OpEx platform increase receivables, million debt the X% increase With in expense was inflationary delivered in basis growth up our of quarter, to we interest both investment higher-average and reflecting debt. X% largely a business. as unsecured balances ratio. year lastly, the million ago. a improvement $XXX from And first average reflected

targeted our expect off $XXX we to million Now funding mix, of between that XXXX. interest $XXX million and remainder level the we've expense for per reached quarter

our Now sheet. on to balance

our total markets. delever issuance built funding well know, of we as long-tenor on focused funding of to our and of and million direct enhancing to largest this X%. on balanced X-year issued the average been our personal balance a streamlined offering debt X-year million, QX progress we've liquidity. sheet, liquidity, a significantly auto As very we over From mix, maturities our loan revolving in revolving extended successfully as you the We in our continued year, the secured a revolving duration This below continue debt capital last as a $XXX rates and ABS we've $X.X included at to of particular, our access billion transaction in perspective, $XXX date. unsecured

of unsecured of at billion also as latter notes mid-April. completed to issued million was of $XXX us million. a allowed This X-year majority XXXX a maturity $X the XXXX in We $XXX over well X%. as just The redeem

years, our not tenor is until XXXX. net scheduled now average unsecured end X.X the mentioned, the and is unsecured our Doug As of debt of maturity

to by while quarter. on reduce was the tangible Our leverage Xx markets of the favorable. remain access the also end debt leverage ratio at We our to year-end continuing to when X.Xx track

In excess impact would that about from the debt leverage the X.X issuance, our turn opportunistic been lower. resulted have a fact, excluding cash of

we our turn operations of conduit along maturities We unencumbered runway We and accessing capital $X.X All-in, as liquidity without sources markets. roster terms results the well to significant the total strong capacity These $X.X added very further Doug. an in $X.X in of balance with the drove XXth billion had provide our diversified We of assets liquidity expanded our that, our undrawn also as back also sheet. about to our longer I'll to cash. both sources quarter of billion. with our first quarter. billion the And call bank during and

Douglas Shulman

Micah. Thanks,

on this business the a to We in is to are major continue going very business on We're the strong to position. that performance. focus of the levers pleased build such

credit prudently ensure to will maximize manage we that returns. risk-adjusted We

a with sheet balance conservative a have liquidity to continue will We long runway.

with will differentiated branch operating customer ensure the experience provide capabilities, that efficiencies we drive business. through model to central digital great and we and our We in a will continue business

that, with the me let the and over joining for thank you us, to I'll operator for back turn call So Q&A.

Operator

Instructions]. [Operator

John Our Jefferies. of question coming first is from Hecht

John Hecht

customers. billion the and have the the stats number of do wondering, then I'm of of originations. recurring $X.X any terms question is new is in And that of guys composition First one, what Doug, it process. guys of you the on loan be end, approval experience. means second been what front kind mentioned the question investing for you you in wondering, and I'm investing would what have the customer is

Douglas Shulman

Yes.

of mix new they customers access a also possible. but credit we're comes great we provide the new as team easy the returning focused across and So of making experiences experience, customer as sure company originations, and customers we and don't value, great as to on to seamless all and and as lines. down our a try then we products our the a nice break really, have When it product existing, to as very

we it so ways. of do And a number in

in-person great model proven to First, one. relationship our has be a branch-based

trained great putting that first we that do country, across X,XXX And our people thing the so make know we our they're the is in customer priority well have the we they and sure branches first. is

So we're branches. lot In our experience also for we training a online branches are in technology, rolling a branches, out online. in We're in the and development. and new both in customer-facing the people investing investing the

can they through see what walk options, have. So they

making And making wait, loans We're when pictures auto. we have so can screens. we're things can upload also take while chats do they secured sure branches and cars things in of we by enhanced iPads we're people so putting like and do the

and the that as our customers flow-through understand. online, I us possible. sure as are come best-in-class and our in learn investing both and making page process is in And we're simple to things application about to to in make also landing continuing like think our streamlined easy the we're acceptable, when sure

call our top-to-bottom on we engage talk really or centrally when how also customers person, they how how somebody we're so in one them with both taking of view, they of with in phone, they online. -- And centers kind with invest engage we the and how us engage that to

really so doing work And we're across-the-board.

Operator

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

Michael Kaye

like looks the over from equation been credit the your are year-over-year Also, change to just tightening you last continue moderate around perhaps, if loan you've cycle. of what demand the the few quarters. to edges side wondering originations in interested underwriting, the I as seeing on we're know customers. in I'm It really your was later

Douglas Shulman

Yes. financial is applications Look, and and lot actually for a profile. markets. ones financial tremendous first us credit, the are get of there's all, meet underserved than our our more demand are always key lot risk/return more broadly that a in customers of The we for services

book about it return do every them. want requirements do our risk talk and way we us, want is by determined And to that and single to loan we with we the that to And with with want business that's so business profile. customers credit the

of combination marketing, experience, us; about know people excellent this I have we so customer which a so about. good And talked

sure credit that a, when ends underwriting, our they we're we're then with people and intelligence going our where best-in-class underwriting ends our to technology. What disciplined. tweaking is come well. to say our using continually we're through -- make artificial process would our underwriting, So in, I it begins And make and about sure flow we're with

we as go. So we keep evolving and learning

for We secured a customers only that certain loan. have qualify

being to like I'd being And -- so have our with look, about yes, we're prudent underwriting. -- we been talk

keep Over years looking last we'll months, recognizing and have that, done XX XX we some expansion. that we're around the tightening an at economic into the edges,

Michael Kaye

Makes sense.

just the momentum secured solve to an is wondering outcome have don't question originations. but you with with penetration second seeing customer how The mix further I necessarily try sense your on you're you continued good much know secured the as to in core secured your product. your lending for, base you

Douglas Shulman

-- customers. for customers two they customers like said, have and for an qualify I great Look, for we product, lot both on them, product of Yes. think are loan loan. qualify a loans for. really give just customers secured some secured the unsecured We we based and of a our qualify some the And choice secured

you for but outcome because As solving not our said, particular customers -- a choice. we we're give

from will As just XX% said, anticipate a over this year to mix the get fluctuate to several result, to customer to there's seen on we grow. do a the think of that are over quarter the what portfolio going quarter. later of We secured, With last room quarters. or XX% based demand we've on originations

Operator

from of UBS. of line the Wasserstrom Our next Eric question comes

Eric Wasserstrom

of different questions. couple A

at First, just underwriting stage? the some you standards touched or about just topics reflected in Is you being pricing Can think on -- on? that conditions. pricing changes you that any this of other all

Micah Conrad

cetera, to, in the and we're our et of pricing. time-to-time, reflected That today. competitive confidence secured, I remainder we're I that mix think I But continue gives the markets. expect is Eric, we even about included year mentioned, pricing stable. with also originations, remain talked the respect would our of test Micah. underwriting, higher it's we pricing mean is mix secured do in anything the yields with Doug this to us of to in from say APRs stable. And our I the as in remain our how ensure

Eric Wasserstrom

then are terms that you reserve at And just it. Got adequacy. point? this in topic approaching How of

Micah Conrad

terms In reserves? our current of

Eric Wasserstrom

Correct.

Micah Conrad

quarter, we mean companies through every reserves. I our a most evaluate Yes. process, go as do to

towards at and been our the the from along I quarters very receivables reserves of We're as -- as see this that for continued stable last is reflects lower the have numbers, mix remember. many rates can loss a secured with as that. What X.X% you quarter. percentage can that lending As that come

Eric Wasserstrom

horizon? operating of it. leverage sort lastly, on how you guys think And medium-term we about just Got should for a

Micah Conrad

with we as mind. we're running in that continue drive saw the operating long-term to I Yes. from the leverage business mean note I'll you results. priorities

as for Doug expense leverage, also those which the But course, will, mentioned, the of the the is of other efficiencies business. future. receivables. we're component in So both investing number. the into also We're And of driving there's operating materialize

OpEx receivables to growth with in continue So drive a we drive than that to less continue equal as growth leverage result. and

Douglas Shulman

of nationwide. we're I Yes. scale We've base, just business, a inherent leverage in which there's operating business. a add, would got that in cost our We're some is fixed.

and going cost, you're and -- necessarily we profile. on bring management incremental the of we're part or the value operating to is customers Also, that's our And which team, our resiliency an for revenue that stability cost so our drive with being out doesn't so a the or focused incremental seeing. anything it business adds our leverage risk or think of to disciplined we're very don't

being cutting position current very So at investments team, also we're as business a disciplined to but management the the aren't future, time. making value adding for things about in the that us

top management discipline then and leverage operating that inherent of also we're both there's that. So layering on

Operator

Our line comes the of JPMorgan. from of question Shane Rick next

Richard Shane

the bit the a consumer at. reserves reserve forward. sort finance than reserve forward look products, think environment. a that some moving get how a your at of basis. to be move will will on had Historically, And companies CECL about love of by that you'll to so the second they the and the I'd tied more going you the question what of, requirements. we how looking little capital thoughts other on capital curious we bit then at holistic I'm have agencies rating to policy conversations be essentially a in bank, been the look levels look, advantage they you've little is, from -- the not guys to three if off you're as has reserve shorter and bank a being looking the want your I not sort reserve of with

Micah Conrad

this Rick, is Yes. Micah.

you GAAP a roll So somewhere product, question, reserves, our was of by have in that emergence loss X reserves we to reserve -- which reserves. first it. course, We look X.X think we we And or -- at and into of build first, we well, today. the When do as about range for we so your how policy. the the X-month up levels, our noted, follow

obviously payments different products and cetera. So dynamics losses, have speeds with et

process at this in various we're obviously the When as point. CECL, in other have So for basis. look the in quarterly think to are, working numbers of, companies CECL we scenarios a on that what about our don't we've through that at parallel. many of means we We are models anything new and terms But running us. share

for something have later in the you to expect We year.

are agencies, certainly in how thinking agencies we conversations the -- lot about the don't with rating they're them. terms a don't rating We we for about of it. In of speak

I note want from known on ask the and So CECL dividend to horizon. what -- receive upgrades probably But first rating and I would would after are earnings, Moody's very the today. we we did also and we with our that views announced them their Right both quarter S&P.

Richard Shane

congratulations the on new Micah, job.

Micah Conrad

Rick. you, Thank it. I appreciate

Operator

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

Moshe Orenbuch

Was just from of standpoint there in has that? that crosscurrents the any increased any during whether kind in were an pretty various quarter, or would any economic first of potential demand sort given the normal. you and of of balance there terms if year impact impacts that of that How were the wondering the are characterize things --

Douglas Shulman

impacted we tax and implemented bunch immediately People it a was the material impact was government I Yes. quite consumer base. shutdown defer effect about you as that not credit quarter. deterioration no plan and like other in the our us, the material on a then levering no I'd customer our allowing profiles, wasn't up our consumer. of consumers impact generally, any a in there or there then about on balance markets. their seeing saw, the have And delinquency didn't seeing refunds stress of the seeing looking sure not so on think And The and but we during and lots Look, customer are things the impact. we on way That's There about like of government things payments exactly. not were at first -- shutdown, signs sheets, any asked at, were have we major payments the same. to lot, refund. look remained say crosscurrents. are There was strong that and had are any labor We're performance proud We're issues shutdown, noise other tax business. not one

Moshe Orenbuch

Great.

as you out kind rest yes, so of And it the XXXX, look steady pretty goes. of of as much, kind

Douglas Shulman

seeing best we're book. both issues predictor nationally, our the We delinquency signs with not our of rates Look, Yes. in customers. are regionally and deterioration looked and of

macro we're close best bellwether And need expansion. economic adjustments labor the major that the we of health if and make are customers, markets said, seeing quite With we're to. the keeping an On we're we'll eye see of and into things, years XX we're on issues. that mindful the side, not our a

Moshe Orenbuch

Great. sheet. balance the of Switching side to the other

a bit could the for... -- about had kind And substantially maybe secured process that gotten made side. fact a financing for and execution into lot of a to and maturities you you lot better You you thought that allude moving your liquid. of more kind that on that plays discussion you've did the making little the just about of and how of Micah, talk

Micah Conrad

develop years continued been side, we've secured Yes. They've X our on X in or I good programs. for mean a now. place to the

We to make headway. continue

transactions. top rating tranche our of We secured AAA all on have a of the

investors, back our performed. spend assets, a just certainly attract it time And has really and more. we I -- relationship. that also certainly We have helped come investors. lot assets performing people And think for So with of a with question becomes of

do the in you first about of on So balance we We terms really good the come been great with funding, in very We've able to year to in our tenor sheet feel and quarter. our five secured the that's to that with opportunistic feel on the place. have and the unsecured as We've ABS it very, a rates side And markets. secured. well. the be auto good really, very great good we're the cash execution, along had see

Operator

DeVries is Our the of next Mark from Barclays. line of question

Mark DeVries

follow-up a had I CECL. on First,

we you I referring indicated think more some Or year. expect year disclosures runs in the it get you later well? just your later to for disclosure expect we in to as means around the should Were some parallel what the reserves? can

Micah Conrad

Yes. Thanks, Mark. I appreciate question. the

parallel I we the As CECL. process we're all in economic don't with that scenarios those said, -- runs, of following all along come doing

mean also We at reserving. of forward terms that are in looking does going what ongoing

January of we we to the what in at be some will that think to when think of build what I terms will end I be on reserve the share the year, point. ready estimates get focused would transition to hope helpful. also on that's that what at understand CECL potentially let do looking some you help the impacts and how non-GAAP know are measures and we with we versus today

Douglas Shulman

Yes. we since CECL, CECL met, questions. I -- X

of me around obvious, XX strength is which all. as But sheet. on in January on numbers having and some liquidity And about, Let at of business apart, we through lot And having we're and focused been economic in we've a not And moving we'll we're so and cycles. be it's business. state will the sure balance we've the remain on making change business liquidity a so focused X, disciplined this our extremely December all is resilient talked runway super the credit. why on just that a day are focused

the It's the run the to business going on we so run business based And to change going we're all. not how fundamentals. at

we'll on later said, give in CECL what the do color will year come back and accounting from an more standpoint. Micah you as Although

Mark DeVries

us year? is end running are, the end the -- X% quarter expect kind And you higher range Got growth guidance range they X%, for at things as you of that high earlier. it. if hold obviously we to XX% at provided the the of It's the Should -- helpful. of of end loan would this loan to then up

Douglas Shulman

We're not our changing guidance.

output. growth of an I as think

make a disciplined make we attracting we're very not and booking manage manage the it disciplined on customers incredibly back manage we're pops we the We end will having program want, back loans on to growth. do the customers, actually a converting booking what do We credit sure our what marketing level. pops and granular And good end. sure out the and be rates. we credit, and out So

not -- based don't business really growth the we're on a managing we So target.

it's leaving But is as now, is. We've hard We've So this to came say. the right demand. we're marketing. credit got underwriting. great X% got guidance quarter, we've and And and what got out

Micah Conrad

Yes. And keep in mind, Mark, we were flat quarter-over-quarter on receivables as we were last year.

first quarter quarter typical is the So a flat for us.

what in second really quarters what X% into we is So And year. when as built get to we last of that's over seeing the you're we the growth. start quarter, see

Operator

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

Kevin Barker

Just to the about of other C&I? that expecting mean cadence $XX million between million of talk earlier. some you're and Could Micah $XX made -- that non of non-C&I million $XX comments follow impact the that up difference on year you I this the

Micah Conrad

quarter, first $XX was million. On Kevin. Thanks, it Sure.

as I remainder would million. to the mentioned redemption that with XXXX in associated piece. we non-C&I respect $XX million, mentioned, the And continued pretax do that the convergence was quarter, there's of first year, $XX So with of had for that $XX say million our It I I the about maturities. impacts. expect

be not expect linear. The convergence continued path over we So definitely always do will time.

that. than we forward that, something little bit sort going a expect do we roughly just respect would a the But so other after run expect rate the we an in impact to maturity of second with of did. quarter that that And

Kevin Barker

that proactive given appreciate of of pricing the spread done bit year, Okay. debt and move issuance made to the you we gave, asset sheet, expect the guidance widening And you've I the balance some you side? with on you expense be initiatives the little as interest through the a given and then would

Micah Conrad

with balance increase actually -- expense the interest our that unsecured just also growth mean continued secured of good the done in it's say in mix that strategy but would We've of sheet. is pretty our a our I I -- to really spreads. obviously debt, increase of function strategy some the

are So and our about growth. debt our average X% with balances in up year-over-year, line receivables

largely growth we'll say forward, mix as be support the as balance change in that's million the reached unsecured targets. the quarter-to-quarter, our And So that from to or we transition, fluctuate will, of just if would would I expect its mentioned, million. to $XXX $XXX going I And now to about business course. has you largely it'll reflecting sheet

Kevin Barker

think -- the and bit see on pricing increases you the issuance some Yes. that or cost incremental do margin, I little close -- made, of And proactive in this guess -- debt done the a first you'll you've be initiatives right, quarter? to you interest of then you in have spread net how given stable, given should proactive were the

Micah Conrad

Yes.

we As remain to our fairly yields expect we earlier, said stable.

we volume in of the question. in competitive again one that signals for On think of as think be, to remainder think the that's tests door. interest we year. from going at making we I coming the APRs going there's yields look expense where the the It's and But to be of pricing bigger are time-to-time, in stable terms with that looking And answered initiatives, pricing I we obviously again well. forces impacts at run sure we're competitive those and markets and

Operator

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

Vincent Caintic

follow-ups. of Just quick a couple

even the end or your auto Is is what point, a -- maybe -- you on for the a XX% that by you portfolio kind that, so higher? limit you it probably say, up going this portfolio if wants? that So secured Or I'm about following you the guidance, the think if question, secured some should secured XX% there how on really to or year, get auto mix unsecured, between the yields the anything out thank secondly, of versus at that then talk and could could there, to And XX% of we understanding, is keeps more to break of first, -- the see? to it from about mix. mix customer wondering,

Micah Conrad

So those APRs I take can disclosed our I'll talked -- by break the first about We have product. out don't products. on and we our yields one. But

XX% will from around then an the to somewhere hard So XX%. the at APR direct and XX% be lower about auto unsecured on a XX% secured little range tends basis and to

Douglas Shulman

the on said, our then except And go choose elsewhere. to I for customers unsecured choose business they qualify do they Yes. choice, we right mix, product them, an is which for and they don't Vincent, give as us loan, the can or in with case where for

it's it will really fluctuate. I where predict So go. to wouldn't going

are As you likely a would I XX% just making. it also this generally. in trends bigger is the the go people unsecured that I that market what remind on year the said, just and choices see we market will above based With said,

And not is the cap so we a value to and there customers. can't their our provide make choice. products all sure -- or there great customers place think The of will But is a se it to. go per are I'm

And market. there's bigger unsecured theoretically, limit. the no I is think But so a

Vincent Caintic

helpful. Okay. Great. That's And last then question.

the that holding So be the around you're I right I without now, excess the guess and leverage. leverage debt-to-equity -- commentary cash -- absent appreciate the around you'd X.Xx at

buyback leverage, being of maybe midpoint the see that you're to is understanding anything it maybe Is next part to quarter forward? approaching Or you you at would question? Xx, and going kind guidance return Xx your how of of dividend? X capital be the about an even is it emphasis there? increase So now could your starting the for think from you range -- the on do else we Is

Douglas Shulman

as call, really first company capital a time. a we've as on and return the for happy mentioned we're position to shareholders Look, to about we Vincent, be to Yes. talked in the

and our policy use profile announced our return that's year in for we the last business excess capital our shareholders. on to customers was investing so this be, an call attractive going to And to lending first, keep that because the

we're was then And turn Xx. Second, it to and X to initiated from kind of dividend. to delever down stated the using deleveraging we a

you anything will to We forward have update going we when to that. add

the kind investors, investors, a so initiating of And robust we're up the accrue past, again, dialogue we of you. talking but pleased with X% been opens We've whole in range because we'll having that the with a to a dividend. -- of benefit to set dividend investors and talk which we in didn't the all very of who initiated keep lots

Operator

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

Arren Cyganovich

edges in feel like have call earlier or been credits Do would further around you you that any expect? tightening do you tightening coming roughly you to Or You see need the where for do so. XX you're past tightening the mentioned in the there? or credit on the months

Douglas Shulman

performances pleased with our track portfolio the really -- We're We vintages. across clearly. multiple it

You see remain our delinquency strong. performance

seeing I not stressed. our that indications is As before, customer we're mentioned really base

So for not balance up economic warning strong, profiles sheets levering our leading are major Credit indicators household any remain showing signs. customers. and not are

edges, the the we're do Just been question up for what and but and -- box -- do said happen there's to also we're we the around we is meet kind is open around credit we I tightening our sometimes updating We around credit making edges have continually where credits, tighten risk/return techniques. customers see that clarification, that edges, using profile. the was sure of up profile our

long put more think we're on to didn't the that suggests not relatively So loans our standards a any quarter. And prudent. to that's see choose credit, we're our that would we indications we're team, indications the make prudent expansion, credit management We if economic as need we profile. a disciplined. first and good of certainly that could that going adjust We, what we in we will I given being see our books say And conservative There's credit be. because them. to a way to place very is in stay

Arren Cyganovich

charge-offs clarify, I is the for guidance net guess year. for And X.X% Okay. to your than less

be First emerge seasonal rest high the normal of the for to pattern quarter year? tends expect to the the Do you point.

Micah Conrad

right. as also -- we also of been has being feel delinquency, very note credit. couple that of good has lowest about quarter so But the strong, quarter highest. first future the which being third next charge-offs, historically been reliable quarters. I and That's the pretty And Yes. a predictor

Douglas Shulman

as Yes. we our saw, credit is, good I our feel and where And it's really where is really are or you delinquency looking mean about whether portfolio great. charge-offs

Operator

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

Henry Coffey

Sort loans CECL. of either to duration, What right portfolio of back or the product just by your by is overall now? average

Micah Conrad

We that disclose is this Henry, Yes. Micah. don't today.

Henry Coffey

be about years. to number? the used that Is year It X X.X to right

Micah Conrad

on going call. Again, that this disclose we're not to

Henry Coffey

maturity? What about the contractual

Micah Conrad

XX some XX Well, months loan anywhere [indiscernible] to generally a run our payments. terms on from

Henry Coffey

on duration is CECL, with where the actual contractual on then the loans? focus of likely to And or the be, the

Micah Conrad

we you CECL again That's a on we good once -- would you But on guidance focus that -- take question today. as technical. a are payments. and your books to but terms, that should is in a little model. contractual And the payments bit the consideration contractual treat Those renewals CECL

Henry Coffey

will losses, good reported the be? is So results what a sense in of terms that us should that within there thinking a of number give lifetime about

Micah Conrad

update year, the an in Later we'll for have you.

I think but answer just -- see question, you're I going. to I where think -- your

actual CECL -- probably You're better not of contractual. reflection a the our the of product, is life

Henry Coffey

CECL doesn't Well, a mean exist. that issue solving the is real problem I

Micah Conrad

That's fair.

Henry Coffey

go on thoughts to And to of focus on you to into call that then the primary something what capital know we we and some capital, But call started are amounts we've -- I don't know have it. where companies -- have are into talked time don't on the used that include sort the your I reserve of to thing. equation.

Micah Conrad

No. add to focused models that, the have models about more have the running on we'll anything later and year. talk in I to our on and building We're Henry. parallel, in don't

Operator

XXXX and Call. thank Earnings This conclude day. Financial's And a OneMain time, disconnect First today's does at Quarter lines Please have your you. Conference wonderful this

OneMain (OMF) 30 Apr 192019 Q1 Earnings call transcript