OMF - Earnings call transcript Q1 2021

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Operator

Welcome to the OneMain Financial First Quarter 2021 Earnings Conference Call and Webcast. Hosting the call today from OneMain is Peter Poillon, Head 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 open for your questions following the presentation. [Operator Instructions]. pleasure begin. the my Peter over now to Poillon is to floor turn to It ahead. go Please

Peter Poillon

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

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

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

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

question-and-answer conclusion will the morning of Officer; Chairman and our and from remarks, include Chief session. this call After Doug formal Our will Executive Financial Chief Micah remarks formal Shulman, a conduct Officer. our Conrad, we our

turn me over let now So Doug. the call to

Doug Shulman

Thanks Peter.

call, tremendous $XXX our I'd joining years first each more resilience, past functions, We're were continued everybody capital on shown cover sharing else first and the on I XX%. Good losses, quarters, model quarter, The pandemic. OneMain to our As positioned the last again, our this of prior-year the year quarter joined the Head we the like significant during per resiliency our to several to corporate views and But over of lies how what come the through first him want Central, say who've also for the most some been market call. and new and unpredictable for generation, on to earnings In our in team our business this come. business per $X.XX Investor the to of and you to ahead in welcome of Reflecting we customers we million and to generated has on dedication going shown capital, team. time adjusted other or all us the other well validated record of side Relations our to of share I'm we're quarter growth today's this performance to has our $XX is low into for which you past know, morning year. performance today. C&I and appreciate who Peter I incredible up million the quarter. as share. stability reflecting proud spend difficult back the than OneMain out branches, want of

benefit and as well the continue Our unprecedented outlook pandemic, start the from of and the credit are levels recent at of as credit strong incredibly government did proactive we to tightening performance support. the

with loan originations our with credit XX% true stimulus in payments, February cannot new near year-over-year, own the originations consumers balances the while while we a XX% to seeing to April, year. consistent This when the Two and And in borrowing. X.X% in performance a predict moved already balances created of declining headwind originations the credit, prime part declining industry, balances we less tailwind we're the rebound across X%. year-on-year, were receive for injections credit as That in losses in rebound near card quarter exact required said, XXXX prime of installment we stimulus to the a the of the First declining activity vision back latter originations quarter, stimulus, and and remainder feel levels. economic me expect installment as confident for and as improve strong of pandemic. emerge was fiscal we brings fiscal we our see wanes, we the and reopening resuming, opportunities to from timing future see continues. the This economic loan

it Over together pieces let of this But minutes few the a several vision. quarters, spend in we discussed last me context. pulling

you take me earnings our Page X of to presentation. Let

Our also help income them of near future. savings, have choice and to to they make current a expenses, consumers when vision is mismatch lender products the but a progress providing to and needs between be prime meeting that their services better

it to next customer choose several to experiences consumers more near lending expect a leader can more and get us see our years, in the of offer from make continue proprietary increase give will the be products, that but relationships, you prime product also and OneMain. us that deepen data, their likely installment to suite lending, next will engagement, services, Over

near uniquely proprietary include to and foundational a digital leading partner the prime be prime position branch base, the nationwide us strength Our mature all near large funding, for expertise, data, underwriting and consumer. customer distribution, of which

on few this elaborate me key Let elements a vision. of

to capabilities card the and be personal relationships, extension five developing a represents while It second We're a prime proprietary the through the cards of XXXXs more and also our will a merge customers addressing we're credit A It'll of natural product we of hybrid the behaviors. best future. the new and product, customer bring our digital consistent developing into that of the help second of selected a As broadening secure our credit a from to deepen card product, ecosystem. will will network loan our needs team bank customer consumer access discussed a half and features time, and groups, terms good times near our contracted in our Incorporating the one. and year. in as market. customers product, have in We've also loan the credit of half will size which platform, build quarter, differentiated loans enhance and out launched purchasing a the infrastructure key different issuer partner, including aperture hours We've market reinforce customers. is card designing last ahead data which is provider, we solutions. the fraud reward other and into payment partners, design research behaviors, new launch. building of first, progress be centric focus made Over of habits, building our anticipate and and MasterCard underwriting

and dollar this support and to years, expect to over product multibillion coming are growth. the receivables line We be cards the a infrastructure designing platform

we mentioned relationships, expand deepen proprietary our to increase on of suite give and services I plan and earlier, that data. more As engagement, us products our customer

linked education data customer spending announce subscription our analytics negotiation Trim, per propels digital always in tools over proprietary gives expect financial offer been for and channel loyalty in acquire within squarely our proven of our wellness consumers with current to data and transactions for depth wellbeing use that financial bank help FinTech underwriting to access the another product services part mission are and and financial financial of a services tangible insurance save Our development our capabilities, and and Americans bill customer team offering, generating wellness improve increased bill services their customers, and more products we're acquisition benefits customers users a on we valued data. acquisition provides and hardworking the Trim by deeply account. excited lead gives existing a of fits can these monthly XXX,XXX savings have brings for with X annual analyze to core strategy negotiation. our to engagement us Trim's $XX expenses, Augmenting initial and This with that marketing. billion to to added our and will that engagement customers. monitoring we customer-focused personalized approximately and than

customer As us half services digital and digital and channels, network new in supplement have incredibly significant investments the our capability to enabled branch relationships customers we and our we our their to make and close our with in digitally continue nearly important enabling These investments deepen to quarter. technology, strong first loans capability. with

in and hardworking we of future have our the vision robust the confident financial excess years generate our result that continue the expand to robust end, for goal, capital. Even the improve of services, to come. growth will with company making, feel channels, existing To products, to we We in capital that our remains the wellbeing we're consistent. investments we framework simple Americans. As a allocation

growth. portfolio in we'll First, invest disciplined

as shareholders. returns. to initiatives the of this transaction today, to this. continue business. two also Consistent transactions. be in today they generate and with invest we'll we're tuck-in consider as beyond but our The we examples bias smaller previous evidenced inorganic will business, of calls I've Any that also by towards are on the continued priorities opportunities Second, returned We'll these Trim to capital a arise, enhancements framework, excess evolution our capital the announcing recognizing with discussed

increasing minimum dividend per We’re annually. repurchase. by to XX% share or also commencing dividend $XXX a regular programmatic or We're share, quarterly $X.XX $X.XX our million

our should third a a to increased As creation. a supplement natural continue macro dividends to and first to. bias With plan These environment additional this our is that consistency appropriate. company's to the to accustomed repurchase and provide have more and increased towards they shareholders yields without regularity our we robust a with we'll this sacrificing have institute enhancements conviction minimum and our normalized move to with time additional prospects, to value every dividends growth dividend year around program said as quarter become drive

and serve COVID the we we through that, the in greatly fundamentals progressing turn near of and economy. macro you the business, news of position to prospects. from the all last of for plan reopening emerge to we from business let customers, Most and of to vaccines first our the to-date U.S. me resiliency notably the spoke. environment our and the our As With the We to confident with our and take the and in increased core our the growth quarter. the financial stability time and to have is our details our make strategic Micah feel employees, conviction rollout improved shareholders. well, future of us the constituents, pandemic our great made over has communities, is of The call pivots

Micah Conrad

as coverage. we year-ago or future And $XX remained share C&I operating allowed had very Thanks, earned $X.XX basis, earned improving confidence That's diluted improved, the share us the per reserve last compares in interest million business. diluted earned an greater net billion over million million per prior-year stimulus. government driven quarter in investment the in Doug, in as of $XX.X expense of of the performance X.XX% unchanged $XXX to performance healthy, versus rounds in tracked also Interest maturities. expense reduce and X% further of our share receivables income has were given impact $X.XX Capital down from the credit earnings, two $XX.X fourth last million, from generation the bonds. the the portfolio, COVID-related $XXX prior-year. our we actions on or liability a were $X funds sequentially million as Along lines, up quarter while benefit from essentially of quarter, QX as down XX% from issuance the by quarter which and building. quarter. loan loss X% $X.X the X% we $XX or XQ million continue strong or $XXX we or we our yields to first taken or redeem January, a first our We and in of improvement $XX in the income, our cost quarter our lower outlook X% $XXX was income prior-year, to discussed in we to in $X.XX those C&I of impacted versus everyone. excluding million expenses was quarter economic was below $XXX Interest reserves, over year-over-year. was bond impacts $XXX million the us accelerated diluted at morning, down prior-year Ending reserve as changes level, $XX loan by reflecting We for in even per and the the down million XXXX our $X.XX good or the first portion quarter. we've which significant receivables billion adjusted proceeds early to net year, billion X% of diluted call, down utilized management On million, adjusted million reduce of That loss share. from a extending per first

the year. quarter. levels We expense quarter reflects Policyholder million since last claims to first a of was expected quarter $XXX expect involuntary of unemployment near was moderated claims and the have million we our first of first as Other revenue the the back benefits pandemic a in related and track million in $X the the $XX and elevated are materialize remainder consistently reserve favorable first the we first in to fewer in. our prior-year work anticipated. interest flat originally to million IUI seeing expense positive of expense quarter sequentially. at set sooner customers year-over-year quarter, quarter to for flow claims down to In was April, portfolio. down XXXX, $XX going insurance We're as $XX adjustment than million our claims claims expense $XX compared million IUI and experience

year. to claims normal expense toward course expect levels We over the the of trend

XX, $X.X in originations receivables review quarter programs The XXXX. combined first to XX reduced impacts the trends. loan of first originated billion with season from in as XX% dive We Slide demand into the to government proxy we is quarter turn our first a take our tax anticipated. quarter. quarter stimulus had pre-pandemic Slide XXXX, Let's first down quarter, and normal compares the quarterly On believe our comparable XXXX. first appropriate quarter we performance to we XXXX for trends more originations a slide which monthly deeper a than origination This in

an we relationship and between is consumer relief exists call loans. As slide. on programs this on demand relationship our inverse evident discussed last for That government

that per which passed December. the by late originations in impacted person level First stimulus the January of in were $XXX was

improved be were the early right seeing for the per person we XXXX considerably, of levels of March, trend month. at This middle the trends As month. distributed and until to performance the into near February, moved or continued we in most into checks $X,XXX started up

Importantly, to of To that XXXX, consistent were month healthy. February April, improved and we underlying demand similar performance confidence the giving remains end, early us saw we're seeing March with throughout what February. that in trends

well future particularly that we're backdrop returns, positioned to our strong is results. of given take advantage delinquency demand macro As the evident in growth opportunities,

new our We higher an have to growth optimistic to recently originations where new give channel product about demand, to initiatives expectations strategic continue levels, we capabilities, pricing, expectation introduced and improve. seasonal the initiatives underwriting in including except loss with from stimulus reopening, us digital partners. economic confidence of normalized pre-pandemic we've impact losses. several industries high-risk We're These in increases enhancement, and that for underwrite will normal combined diminishing

latest which Slide to Let's XX through short-term debt now were A walk of a creates recent the supporting directed stimulus credit repayment, credit trends. even growth our it portion and turn benefit significant funds, round, has as our of particularly to headwind. the performance,

losses effect that began, tightening from and government year see quarters. credit has with can stimulus on delinquency decisive these a pandemic last our You charts as very positive the over had recent along

delinquency in basis XX basis First points plus X.XX%, was quarter XQ X.X%, year-over-year. XX year-over-year. down delinquency point XX to net XX basis charge-offs reached XXX were year-over-year. a lows improvement of X.XX%, historic points XX down

the quarter of XX the our quarter We XX to second in plus heels performance. on to strengthen first XX expect

improvement give below from Our always XXXX there in confidence charge-off to us strong see about to outlook unknowns come feel full-year environment, That's significant at XXXX we net our now credit delinquency X%. X%. the and performance net we a macro expectation through full-year continue we'll levels while good in approximately XXXX the original are for and charge-offs of expect that

for first million under million. shown In reduced Our our reduction reserves includes a quarter, We loan reserves associated of billion our an XX.X%. performance This XX. improved ratio our our loss outlook on by portfolio reserve ratio about our and end lower with $XXX to-date. trends just and under $XXX of a This receivables $XX macro XXXX billion to and reserve at we to conditions ended XX.X% are strong brought million reserves Slide reduction with $X.X of future just the from balance, $X.X XQ. and the

million and higher closely continue points basis of performance and about or to accordingly. the reserves pre-pandemic remain adjust trends after approximately our our track We'll macro levels CECL. XXX reserves $XXX Our introduction than portfolio

expense XX, receivables. took from response X% to cost than to was to first in and of emergence the continue year's $XXX last first the million, benefit lower we quarter average Slide Expenses operating X.X% quarter Turning the enhancements new investment of credit continued of XQ and the reflect including increase. year capabilities, operating in quarterly sequential and our card, in in last which our pandemic in platform, products our digital to contributed total actions

of that throughout remainder demand grow expect expenses will our We investments, quarter-to-quarter loan modestly and improvements with continued acceleration XXXX. of the in operating

Let's now XX. the move on on balance Slide to sheet

conduit $X.X billion sources undrawn We continue $X.X receivables. maintain of and cash, available $X.X significant billion of in capacity, liquidity with to billion of unencumbered

our completed we and early the In per partner we of expect a two sales. April, agreement per Flow the month we quarter, now pricing. program the million at also for second added to million whole of at million $XX very partner $XX next from $XX per per During first loan to whole month. quarter Forward our We attractive loan million month $XX the expanded years with $XXX sales million

As remain of provides sources majority loan loan funding strategic production on the our we flexibility. sheet. balance we quarter, The additional program our sale committed discussed keeping and broadens to last our whole

us use of XX% potentially position the further As long-term growth. customers quarter the up the serve business very $XXX In to from sales attractive we the was capital first XXXX. of we capital generation program earnings. for an to example, loan Whole and efficient generate the also can allow quarter, some first range expand million,

as as February. $X.XX times dividend in reflecting cash per Our our leverage was ratio we share paid X.X generation, capital the strong well

than end the of total was aftertax year-ago. the billion adjusted reserves quarter, includes capital, which and equity at higher X.X% adjusted a $X.X Our tangible

announced XX, and framework, our investing our to previous with portfolio Consistent shareholders. that every cadence financial strategic to and returning considerable quarterly XXXX. of a this, capital updated enhance minimum delivering some delivered allocation share and strategy. evaluate allocation with above Slide guidance. capital our consistently Turning commencing future, consistent paid be third and for May, to our in in XX, first I've have let's we're programmatic capital priorities continue We'll minimum we increased business repurchase $X.XX shared dividend dividends growth while In to on where to attractive per share the we to to closing, our returns, move quarter our full-year Slide

yield stable near year. maintain We of expect at remainder or our receivables over the to on the XX%

range expect receivables. and between expense X.X% We interest X.X% of to

mentioned now charge-offs X%. full-year we around earlier, in I net As come expect will at

Our should This operating including XXXX. X% $XXX our million X% digital to operating grow after X% includes in investments expenses new channels, products approximately year-over-year in our our declining model, and of and initiatives. future,

we'll maintain Doug. to in to Lastly, With that, turn a six continue leverage back our I'll of four the call to range times. net

Doug Shulman

Micah. Thanks, fundamentals strong future. in core of investing our The heavily we're remains business and our

a created impact for the our company have government remain economy stimulus overall. very the While headwind effect And believe I in positive the outstanding. on growth quarter, of credit that the will results stimulus

through organization, pandemic centric vision. strong future capital. which to strengths in grounded developed A Our underwriting customer core we reinforced proprietary of our and the data, has have the prime the near on experience unmatched understanding customer, access

we in so, I'm deliver with We achievable OneMain help we targets, become $X.X choice I've X, business double the more in our what some wellbeing. which near with more improve to depth on Slide is that and least financial continue have and and a strategy conviction proud aiming value leading our we have customer also to the this XXXX. to customers, To goal and OneMain ambitious, at of of strategy In years, and and aspire these laid out very them two with for existing our where communities, for unique can been in we're breadth base, doing employees, deeper strengths products, of majority to foundational five-year build. of of significant capital will to earnings we of gives make but or and will the to more is goals billion a us business at consumers. their our Our customer business, grounded prime generation the achieved we've tangible, lender of grow lasting to-date. simultaneously two-and-a-half our relationships shareholders. our

what continue the Overall, we about along fully economy with excited ahead. into continue more the even improve we growing lies expect to as as reopens. I'm environment demand to However, XXXX,

have accelerated come. we XXXX made us us into over years, XXXX we're We and the and years also the believe joining the for position and several growth to that your past to investments in questions. will in happy for today take we Thanks

Operator

[Operator floor you. is Thank questions. now for The Instructions]. open

first Fargo. question Michael Wells from Kaye coming is Our of

Michael Kaye

and smaller contributing? I color to more is weakest, if newer dollar the see product could trends, wanted some Good prime of strongest, back where on these customer morning. by geography, maybe to coming products provide you much it and demand like how are

Micah Conrad

is All it’s Thanks all question. Hope right, Michael, the for Micah. well.

same significant think demand seeing see I we're the there's differences, pockets here. geographically, I don't relatively think we

For see instance, that But Texas are we we had speaking, some storm impacted impact in consistent broadly state. that across country. February the in pretty levels demand in that

demand underlying levels. confident the XXXX dissipated see are came stimulus slide we've to as have February, there, that can impacts originations it come and back when seen you as back presentation, our as of in recently the when in XXXX We summer is

level demand relatively I consistent. the is think product

unsecured we through happen secured and see one process in no of probably with early you a budgets consumers. we looking That's here, for when kind our some tell or but in from our of comes needs know, happening to But loan. going it's Michael, positive As part trends to April. go what's

Michael Kaye

Okay.

collection bit mean demand know, good Second the wanted to about more customer question, I hear origination I wanted I But trends. about trends. to you talked

a billion. think I saw presentation, was March, you pretty about collections I elevated the in over it talked in

is to in question QX began collection So so like, normalize that far? trends the has

Micah Conrad

I bit. April, a in mean, Yes.

inverse we correlation credit and a positive a with As correlation past, about talked between originations have we've and and demand payments. lot the very and stimulus in an

over credit a saw That output month this in in relative a a performance it's up And performance, March we in And June future so confidence, show we of to bank the happen We in had did collect year, contributes payments. little our obviously check month. normal gives to $XXX accounts. billion and it on having see did million. strong consumer we of of the performance us last in strong delinquency dollars certainly May, an

bit, overall, I are April process So April, COVID. strong, a seen since say, consumer, moderate would compelled payments still they've when though, very we've this as the post started trends been last we

feeling So very credit. outlook good very, the about for

Operator

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

Moshe Orenbuch

selling, the sales out thanks. up two I Great, in terms you're Maybe Micah, more both that sets types of guess $X.X different guess it already add little diversification can loan your is you that not about source of talking just that question are or selling of about, characteristics? is of kind kind I type mean, you an for outlet are in the more annually. to real a loans are of of a billion, typical with flush my loans you I funding

Micah Conrad

the for thanks Moshe, question. Yes,

funding The and first foremost, as -- we both arrangements, enhancement to a already $XX are we program. mean, for this view million month. terrific an it's I current this our think I have

it's So this two funding quarter. call $XXX a very And for million price. it committed years, per attractive at

we've this goal pretty happy we're around there's size As success the market. that necessarily had improving we've in so any about out in the or volumes, not past, with talked far

But if didn't I that loans. we unsecured vast or put think And majority originations funding our note today mention this selling be sheet. we're all at is remiss balance is to a would have on all balance originations of attractive the having otherwise we great of for on that our our I program sheet. committed price. remain us, what it's very and we diversification a would the Now

customer types the certainly model of and our expansion our relationships forward, in Now, could of and originating end. we're higher also at end we balance low the at what comfortable these lead moving opportunities to expect sheet holding

have we it continue with probably. important why will like the to that to going us we do mind, and that business had that's and that they talked discussions in selected as were both we for that most to So their partners was

Moshe Orenbuch

price even also a Is amount, Got that it, in Trim, wasn't the starters, that And you huge talk you're the could need use you plan? capital But acquisition thanks. just about type thinking I'm assuming relate, of for fitting the is you of much. amount a acquisition it little congratulations on a Doug, that amount? how purchase about was you think itself a special not that, the given modest it And Thank the versus forward? you -- that about as the capital a see of is bit just that you dividends very larger how buyback -- a can disclosed. go

Doug Shulman

add the and that have broad We're tried And vocal their Trim. fits Trim next think valuable improve bias capabilities that. which you the Moshe. future also but vision, been so from either make that I've Trim likely customers take transactions their Sure. as products financial tuck-in to more strategic provide wellness that to future Thanks, excited be ecosystem. help services customers we wellbeing, We've customer lending about and customers us. value our relationship, transaction very fits products, opportunistic bills, increase deepen color it'll lending transaction, squarely range in was to as current or really give customers our Trim around will welcome our it into think we little save our we our would financial helps people our we to tool money before, the a and around loyalty, and to customers, add that of customers we said a and on like that you there, our the that is be current know, smaller them doing more proprietary data, acquisitions products in we'll product Trim pretty

any And on own material a capital it product, amount, we're loan building we're material way, in But the card evolving to that's not ourselves, never out our return Never omnichannel transaction generally, as what we're we strategy. it's say the out so market, Trim transaction. it think affect our platform. decided in I won't is, we're any our build we -- feel

big want digital of for investments that through road across acquisition, made reason ourselves. we And build product, our that the real it of So loan card a down is and experience have more organically. sense we of have branches, the doing seamless we're the to a all them lot just it synergy and made might product, to

of performs as We for reasons. is create. it business business model regular out in long the have transactions is a of buyback it one now so to capital programmatic through they to dividend; how of I our us of lot confidence like bias We which quarter, the into will repurchase waning, time. Two, going in couple well the towards our returns the One it strategy. uncertainty is this program, like and Kind will this that the share things of did really affect So of the strong we shareholders around saying will that lot the instituted is, the that increased conviction fits a part sort way. a two, laid and tuck-in won't we give is this way and toolkit is business call, a feeling did uncertain you meaningful the two any future where of and economic forward. we're this, value is and be

plan and the more so, that of more quarters. dividends third With these capital to predictable. regular and evaluate think regular first in we more shareholders increased consistent return and of the special they're going I our still and to dividends said, our And all programs, both the for make buyback

gives you hopefully So some that, context. that

Operator

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

Arren Cyganovich

stimulus. happening in still appreciate on the or the -- half of expected do is your I the trends you Thanks. is have and changes been of back now for loans unclear? the the an loan because little what year, that the growth, have expectation origination all What's a bit too of level comments it

Micah Conrad

Arren, this is Micah. Good morning.

of provide that to we because get back that still comes when these think addition longer pricing, as targeted I of the the of a in bigger as levels around it a in an that trends told a involved and But purchases, financing, lot things we have in that. loan early talk confident on of ticket flows. it to product of and probability again loan. directly, our, answer to very of bit routing about smaller that's a operational or little some been enable to data like you, demand, demand about underlying surpass, unclear partnerships initiatives, example And doing some it’s things forecasting little seen we've some because analytics we've to originations capitalize we of back strategic our applications little XXXX based we're on in there will dollar us terms and enhance it's we're for now, strategic talked book have there kind work think number when priority we've it's be we near-term a hopefully to

know So when we going don't demand is come back. to

little last over when weeks, I for are Some signs it few tell can be positive very it you, the early the but of tell, comes. a to ready we'll

Arren Cyganovich

maybe remarks aspect you card then the be, Is Okay, thanks. a to card and secured about predominantly be hybrid product, the a a I will secured bit product, prepared going or also little in there in products the I'm could separate that unsecured? the assuming product talk dollar? heard And on this little more card

Doug Shulman

Yes.

product, card the next and a offered credit. Yes, half we'll be uptake, Just then position to and usage to the repeat this This the year-end, specific year, current spending their also able different customers, And be be offered habits, card line testing coming offer second them loans. qualify things. And able plan as will there'll we them be card. will and see to year. it'll we payment new to time, couple line, loan, we'll take we'll customers ways proposition, be offer be of who but in to $X,XXX not then over launching a card might and smaller on to marketing early of door customers for a the targeted

out So be the product. gate, a right card of it'll

where a a if and you TV, you open a Next that consumer could product on hybrid of checkout, at card or thing, card item, a going about, could an you our kind app convert the on on you're where more where think looks can loan air roadmap actually that that have click like buy is line loan. have to large conditioner, a your to

a it that on you forward. fixed part so will that and have payment roadmap monthly of So going the be

Operator

Piper of Sandler. Barker Kevin from comes question next Our

Kevin Barker

Thank you.

or follow-up is for on year year one is a or buyback, an those something buyback there program Just on the the this expiration lines? along date

Doug Shulman

There's not an expiration date.

Kevin Barker

attrition of in your amount develop? Okay. some customer would more for you too like Or or is early are is card the they products, this where something this to least card, of by assume certain would at to longer-term your on your going customer it tell, you engagement, following-up then that say keep the projections, around to And comments for amount a seeing, I the is expectations? going have how decrease customers be

Doug Shulman

which sure, a our of and transaction, a ongoing to with transaction pay bill they connected after For loan, a of think to extension product a back need card. basis periodic long is a app we if large card, regular the relationship customer card card ongoing But monitoring because an with daily give and allows get people people overall the them you the Trim an which loan. their potentially step lengthens paid-off pairing is services, strategy on which to as a strategy a loan, a it,

think the things come to of relationship us. a longer more towards the with more again, all All that they'll customer likely those customer, more of lead we customers, to engagement, customer. And more for value-add and to these products

paycheck the paycheck, have to not I about that's they forever. let I've really around and near little customers bit which paycheck customers enough things let customer trick the capacity the helping think think of to I us, aspire mean, future. not better articulated one is also to about to the prime to of I a a some well our move talked for paycheck

financial more tools people move to of needs ecosystem when And as card but so savings we give income pay, designing that future, their has we're that And trying a them a meets a we're their The their products way a help think. them is also better our and and reciprocity. set we to create Trim. creating value, between mismatch similar expenses, and with their have they

And that's relationships to all longer deeper so this. our lead as And of Kevin with we and that's said, see how should you -- customers. that,

Operator

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

John Rowan

that gave just you allowance, the you non-COVID that can Micah, the you gave? specific or number the COVID repeat

Micah Conrad

The non-COVID allowance.

John Rowan

the portion allowance of there to what I'm correct COVID. all out you specific the Or the was release specific a if trying figure of COVID allowance ratio is, allowance?

Micah Conrad

Yes. Okay.

you XX.X%. a It's I'll is around ratio to that little So allowance the give help. pre-COVID context

John Rowan

Okay.

Micah Conrad

in $XXX we We XX.X%. could that And Okay. lower by million. is quarter, COVID the XX.X%. the credit in from argue from explanation We've about were $XX with $XXX the reserve we from reduced at or related. estimated that your Today we're what aggregate of related fourth million remaining receivables, coming comes million

we our So levels. levels, where of to relative pre-COVID we XX.X versus at what when XXXX current of about $XXX in of a as I pre-COVID than than where back receivables, gives ratio look the million us were the and about are think are CECL lower level they January calculation which I implemented XX.X% about against that higher

John Rowan

a number? reduction the bump ratio repurchases could as earnings far should go, from another that -- expect? program, Or is allowance agreement there see there repurchase as cadence in a in pre-COVID down then to And the another another we Okay. should repurchase the be we

Doug Shulman

Yes.

that as forward. market. earnings -- got for drive drive part the the be, repurchase. this to the our just we've think strategy, not appreciation of plan capital will should It'll going share stock of strategy going episodic it return is it that of these programmatic a be have that's you We and should is think years, over we growth think think to be be I regular programmatic and a now won't that cadence, good very will in this the solid but

John Rowan

at touched product if this it any you the will sure updates roll how on out not I'm small-dollar lastly, just initiative? you but on all, And growth Okay.

Doug Shulman

we small-dollar program it's performing the So summer, well. very been launched the in

a As there's payments customers a elements back. a generally it, because reminder, the smaller, to to it's for pay are couple it's $X,XXX loan, easier

increases and And so our also less, losses rates. are it pull-through

product a unsecured and now before, our customers What take the if broad our we just when choice people they be secured more of of say part offered core a I'd small-dollar. our a that they're not variety will offering. one were so but So products, We of -- products. variety given is of offered of product they're to an customers only is choice especially a and it give give principles offered

cadence. the customers economy As loans, more unsecured are we and adjust our the credit eligible reopens box adjust secured as and for that'll

Bill number innovate addition we're, sizes now to haven't around around sure exact also customers And Services, the successful. core of so we to products market competition make been and Payment well. pricing it, both and like brand and current products, innovating continue our to adjust in the cards, meet new we're serving And disclosed it's so we quite our and

Operator

next line from Giuliano Bologna the Our of question of comes Compass Point.

Giuliano Bologna

thanks for and morning my Good taking questions.

loan you there's going time, was that's received I had roll sale if loans what might a gain migrate on to Just on of certain sense back kind start? program, curious you that through as -- sale products over and the how of kind to of different

Micah Conrad

loan loans morning, as is Micah. we've Giuliano. this Good mentioned is sale only. unsecured Yes, whole The so program,

not program, the price appetite be and that we're product is we're of the to have. grade the going but also particular about, going partner dependent only So, selling to risk through a risk that on think for type may the

the per range, the offering the again, of it we've gain to. we're helpful. much in partner $XX think so, But that million that $XXX a And $XX we'll like well million if and talked you on at the expect we're million to environment, I dependent that price in product quarter that's very on offering sale about quarter, being can second par above the somewhere see

Giuliano Bologna

more do programs? in sales? shift mix sheet, normally for Are Then to curious, because ratio secured primarily Or sense. you or then balance to loan for the use selling unsecured, from loan the unsecured might we you That part on see sale continue same on that you're to sheet. increase XX:XX be And selling want think balance continue kind makes as is tool on you're there want you looking might of your initiatives? instance, do is for ratio of you new you with to going new the also mostly about keep there that of how to that curiosity have you're that some funding because be your would secured lines, lot a going if a held should

Micah Conrad

Right.

balance on the about all whole when sales portfolio. But in that loan we we those So multiples need sheet in to the our loan unsecured whole originations are mix are question; of yes levels. our factor secured think certainly,

very just influence on a balance the ultimate that our like. you're sheet heavy mechanically, But also So have what thinking mix way. will looks obviously it on the about right

within our very this I the think be building we disclose. us to a comfortable again, how just think programs, and determined. help to were of would starting we're two products, loan of going And got level I in to and how that as balance can level, it growth future. And open that's relationship with with think helpful. funding program think in advance about to installment is view and lender, about we're giving terms a I our us I flexibility stock, particular very say really us and grow, terms I that unsecured our more partners which customer still can primarily future haven't thought strategically we're help strong a decide We've In this initiatives. everything's we discussion sheet this the diversity going But

transactions not I'm commit right now. particular level to that, willing these on any to Beyond

Giuliano Bologna

the very makes back That I'll And Thank sense you. queue. jump in that's helpful. and

Micah Conrad

It's my pleasure.

Operator

from our And the Stephens. question line come will of Caintic final of Vincent

Vincent Caintic

Thanks, good quarter. this morning. A lot of positives

about expansion, including different products. into an card your how couple stretch expand first rollouts, much a investor questions of is So about question getting, to of credit product get operational the it been I've

manage installment cards. customers good the how other a hand, So, for already they use your handle including their from credit how you have loan. being very But cash flow, different card a existing an example, credit their on on

from handle beyond, you product can So maybe your credit cards infrastructure and about could expansion underwriting your in if core you collections? with and talk how

Doug Shulman

question, good it's no, Yes, Vincent.

we've of the we in all, business. and sequenced First how been very measured brought

you to shored for the on core and lot infrastructure. technology earnings we're a And analytics, our management data had we results. really loan And business tuning use time of product, XXXX, we and around we of to discipline, XXXX, some focused up saw card, growth credit product so during start XXXX the the in that We that'll customer used kind the launching. work XXXX, and and the the launched pivots. be growth. internal decided started; in we that time And around pandemic making we're But

so later XXXX. things a and And like hybrid after come will card

we've parts lot getting we -- other of We're of And think focused capabilities, then partnering on so providers of been the infrastructure. quite a very have and disciplined. we're with we we for the we have core where best for card. synergies also them But

do but with pay recent out to customer using years, accessing what on to models, national credit with building deep business XX how we've So, we've marketing database models. we've the we've robust kind customers credit ability done distribution, do know we have? and we million proprietary near partners, of got and close who've We've us. In been also got got funding got prime to and budgeting, third-party data

you And for to and operations, credit things got of automatic central and kinds so we've product. we're dialer collection all of going capabilities, any need sort use,

team fully so with detection using we're we've we're But MasterCard, into a of we've run Head plugging separate we using Cards. contracted stood-up a also a got that by that. tools a have with we're fraud partner. Yes, And external processor, bank

variety can deep But also infrastructure infrastructure with use synergies, there's we've that partnering for already a OneMain, tapping of the a where And have into people team got places of that. who so is and we're the we're card. built-out you

this but scale we've methodically of it, to important paste lot and I is just I'm be quickly, a who last couple focused if of team over is years, to focused able And, as going on moving delivering confidence, we're the we back very and on up, and look it's execution it a very have so, execution. And very you strategy. got

Vincent Caintic

investments forward helpful. very about should with acquisition going the how me quick of rollout. card credit for is just through you. one that's Thank all we with these the Last in expenses be thinking Great,

down going Is or that for forward? XXXX? does So slow going rate XXXX? you in forward Does run accelerate it right guidance of gave kind of sort it a

Micah Conrad

clear expect X%. to the of X% the in We've our XXXX. you quite we coming-off XXXX increase expenses guidance that year is shrunk I'm for any given X% of giving So that to Keep by steer where on mind we a going of Vince. yet, full-year

This when pre-COVID quarter's compare quarter XXXX, to period. the comp in you a it first it's against

going any to cost So of be we prior that's actions to took. the

as would towards given million this constraints year-over-year some actions. cutting, $X But through ramp-up of benefit all we year-over-year the activity, comparisons quarter you cost last we're So our to increase in But X% million initiatives. sequential X% of the those seeing per more gave difference within guidance $XX with moderate like of we you. I still spending originations in XXXX quarter that the to of year's point

Peter Poillon

This morning. a busy Maria. it's I'd appreciate busy you is thank to Hey, We say and morning. know like to call. very, your the everyone Peter. Hi, on very time just this I earnings week very earning

forward hearing look everyone. the in So to Thanks, you future. from

OneMain (OMF) 27 Apr 212021 Q1 Earnings call transcript