OMF - Earnings call transcript Q3 2024

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Operator

Good day, everyone, and welcome to today's OneMain Financial Q3 2024 Earnings Call. [Operator Instructions] Today's call is being recorded. I will be standing by if you should need any assistance.

It is now my pleasure to turn the conference over to Mr. Peter Poillon.

Peter Poillon

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

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

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

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

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

over to like now the turn I'd to Doug. call

Douglas Shulman

up a C&I you direction, OneMain Pete. for good earnings in today. about significantly results both strategic position generation years initiatives, and Thanks, for the Credit our make for our share $XXX come. on to per we to quarter. quarter last this were was and adjusted morning, in progress and success positive Capital Good We everyone, good from to trending $X.XX million thank quarter, the are results us continue joining feel very and year-to-date.

by an expanded loan XX% grew while total and increase our in revenue receivables X%. grew Our year-over-year product offerings, originations driven

year-over-year tight was going ago, profitable since forward. underwriting growth quarter origination very growth. last of seen third X The that environment find box tightened momentum pause factors X the years time our continued we analytics we grew quarter, and originations to growth to we I first of XX% more expect This than we've granular and year-over-year. here, see briefly constructive our is in Despite originations, of credit saw volume that quarter innovation product current pockets and competitive the the result in continued use data this our discussed

we We are tight underwriting as pleased even have posture. maintain to originations strong a

seeing. to way Turning credit. look the at Any we are trends it, you like we

in down best points serve same model in points as disciplined average which of compared up movements swift These of quarter down XX- points and consumer. how year to took year-to-date only was true and for compared X.XX%, last the points from pre last our basis Our XX-day XX XX quarter XX since last trends These up ago, action points X XX understanding down points a our year is basis to was result credit time, up positive the on pandemic. unparalleled basis quarter-over-quarter delinquency on as X on the basis X that and basis years basis as the better-than-normal to credit to trends unique non-prime average seasonal Delinquency hold an years. underwriting well. pre-pandemic business we are

in down quarter given expectations X.X% quarter Net delinquency year. our about points the charge-offs were in and the last with the earlier consistent basis from XXX levels

first in our positive recession, trajectory consumer losses Our peak the Barring about feel half saw of believe business business. we the earnings in loan very XXXX. of us credit trends make our a we

and macroeconomic trends reduced rates, forward. tailwinds like will even future going this stable expect provide continued lead to in could and interest capital employment growth And inflation years. more generation We in XXXX lower positive

completed we offering kind million X%. clear competitive of funding just an balance the strong as unsecured net of mature finance The bonds continue social to in of the provide fabric program over Our illustrates or In lending for August, residing stand This by individuals $XXX is will out loans nation. access focused credit responsible the to proceeds and a secure interest and of and the credit counties us. as of at advantages credit OneMain risk part across rate entire how Reserve. Federal at we to defined

under at to Credit customers Both to and more performance important are needs of brand. products. the credit and commitment customers We billion and newer than consumers different today help end. with their meet shareholders. remains and our business journey. cards finance financial quarter industry to Auto our more in times $X.X in performance. meet are and well while we their financial expectations at products better multiple for and auto finance our integration line future were driving going auto business our Foursight to now of different us auto our comparable allowing about OneMain X.X now in entire The profitable our operating progress is the Moving million auto a parts receivables better needs growth finance are have with

All platform positioned underwriting auto consolidation, the users. our on are the integration, including now in but positioning We the franchise cost card plan moving growth tight parts be data and the we years. and competitive great and have in technology vendor maintain our very We'll business independent of both well more. of the for believe future serve cautious integration capability progressing to about feel consolidation are and

led our of redeem business new than more invest growth, customer to experience credit and channels. we more and as a enhance that efficiently more data continue us in XXX,XXX calls to that balances, check analytics features well but our cautious our down to credit customer an while accounts business, as the as run measured broaden more. quarter. online environment, cost. customers million profitably added during has the We're also and In in partnerships year-over-year our and $XX acquisition receivables help self-service using launching the the to service app we make the card reward improved developing been We've This payments, per view our are digital being card XX% user given in more reducing also

when time accelerate to are ready. So we the growth, comes

confident to differentiated the our resonates are product We us will develop with we position business we card continue well to customer, target that for that have a and future expansion.

let me Finally, touch capital allocation. on

unchanged. Our priorities remain

invest First risk and meet advance competitive us continuing science including new business success data the our while the loans in also return foremost, and invest we ongoing that well channels to for making to as to position products further our position. all in as technology and terms,

per In the quarter, regular X% repurchased at be price. to committed approximately also at important share about are today's yields the We Share our growth, market come. dividend, annually, The shares part million. repurchases for we be years will economic XXX,XXX an repurchases $X.XX which future in determined of and our capital, capital will pace capital by a conditions number needed return excess share our to of timing. including for of strategy factors, $XX

With that, Jenny. let call me to the over turn

Jenny Osterhout

everyone. and Doug, good Thanks, morning,

Our unsecured funding of second third improvement management in revenue with trends, growth, by issuance. quarter our and sheet great continued strong ever originations our credit social high-quality bond execution balance growth, highlighted the was thoughtful expense

generation quarter XXXX. per million last third $XX.X for receivables XXXX. Third to from Adjusting portfolio up quarter the diluted income XX% our year billion, net Managed the diluted on compares charge-offs, $X.XX by of growth. Foursight in macroeconomic billion, of was a higher was ago. at C&I $X.XX reflecting down acquisition the in from per year, quarter or which third adjusted the finished $XXX partially organic impacts $XXX current environment quarter this quarter $X.X the share offset third $XXX or income to per up quarter of our share Capital billion net down million, $X.XX growth the net $X.XX of diluted X%. amounted $X.X revenues GAAP from in the was million from share,

Demand strong. for remains quite our product

XX% strong is posture. while underwriting Third year-over-year. billion environment the as the along originations result focused of drive our And quarter $X.X our efforts discussed, Doug originations to competitive maintaining this growth conservative up constructive of with were

net or approach in credit requirements our there segments appetite. we We change are our overall expand our continuously analyzing or can but to for is box tighten no where credit return

fourth with end we We expect continue billion receivables. of quarter this feel growth comfortable through year $XX.X will the least that and origination the at to very

while in discipline. growth originations been maintaining pricing This has achieved

consumer up basis quarter XX.X%, XX year. prior over points points loan basis XX originations approximately APR was and since Third last quarter

yields In levels fact, pricing second raised XXXX, the have since above are as in our forward book These our of the cumulatively, APR going pricing quarter will we support basis points. gradually average approximately portfolio, and matures. the XXX

due to from yield third the basis can compared take which to expanded to basis And year-on-year finance see while points auto hold loan quarter up has the consumer quarter. second improved consumer yield this You last XX in year points XX compare XX.X% prior starting below remains of was our quarter. portfolio our loan

revenue. to Moving

was and This maturity modestly allowance since proactively Interest in receivables versus an comprising support our third quarter, I X.X% X.X% higher in is funds of $X.X proceeds $XXX quarter. quarter, last was down for year-over-year, million XXXX. of mentioned million percent expense and net receivables increase Total of last was X% driven from was quarter driven increase total manage our the up up due $XXX year. billion, our an of the noting other by charge-offs by that expense prior prior the growth as debt to $XXX receivables $X.X X% was cost stack. interest revenue in second comprises to the quarter those year, worth million, $XX was the It million from to up increase million of average our $XXX compared as receivables higher timing use which, billion, in the and million, revenue year. and a issuance interest X% to the expense during of driven quarter, revenue $XX which to income average by of quarter elevated debt down Provision

$XX and bit lawsuits I claims expense $XX performance ahead, policyholder claims around we minute. our million adjustments in XXXX. and third quarter benefits the in Reflecting will in positive expect the on In reserve was to more a quarter from quarters for portfolio. Policyholders benefits million compared $XX detail for a in claims million favorable touch expense.

Slide turn X look at trends. loan Let's deliquency to and consumer

points of XX-day this X. basis and both X.XX%, can up are X to down excluding points see notably XX, on you basis Foursight, September was pattern, seasonal delinquency as XX quarter-over-quarter, better which end on year is Our since normal than of the last Slide XX

conservative for to on our our XX- trends the of has delinquency slower compared improved of indicators year-over-year performance. growth book adjust year. delinquency as last you If These positive from loss credit box, are notably our future pace XX-day to

trends charge-off as delinquency As you know, improve, will trends follow.

translate to is credit our of the on and X that last ahead. impact loss management today, over should in improved active our positive pleased we're results So a years performance that delinquency quarters the making

define of quality We a that XXXX while Our pleased of we vintages, originations of front line as which It are booking our as performance portfolio, book quarter delinquencies. today the total total receivables book the back as and remain of to represents with up the remains we XX-plus the ago. noting starting August XX% is comprise now XX% with of performance the XX% the loans and XX% expectations. worth it makes of in also front book compared

which continue We our to front vintages, going book delinquency the forward. should metrics and see loss transition further to benefit overall book

losses as diligent strong remain million ended in loan macroeconomic $X.X XXXX, of look of half to first XXX where shown maximize C&I in about the were the basis were average in second portfolio. credit reserves net X.X% strategies Let's loss steady receivables Loan quarter remain patterns quarter and X.X% We from charge-offs in in exclude ahead. seasonal consumer in the the amounting peaked that expectations X.X% quarter. or card to steady on value. the our to third we loan our environment and assuming net and quarter, charge-offs line Consumer receivables in which the as net recovery turn remained billion. points our a confident Slide Recoveries That's quarter. XX. of reserve down $XX with and charge-offs, now at we

$XX reserve remained at coverage in growth, driven Our our XX.X%. million portfolio while reserves the increased by by quarter, steady

the of remain to year, For this rest coverage at changes. approximately level. the subject any macroeconomic expect we to

Slide acquisition continued our Foursight by ago to Operating were in and million the X the year quarter, April $XXX X% future compared growth. turn for a let's Now expenses to of investment driven XX. on up

from points operating year quarter, ratio Our X.X% from third quarter. basis was the expense XX in ago last up modestly a quarter down and

and in time. As technology. the in expect And data future we mentioned moderate continue also last are new it on trend expense our for investing to management, OpEx on our to we committed down ratio to tireless over people, call, quarter-to-quarter, while products, science may while focus we from the

balance turn sheet Now in our Slide XX. to funding let's on

During [ million $XXX the The of with and at again executed list third ]. offering a quarter oversubscribed strong bonds we XXX% quarter, was unsecured X-year issued well investors. once social this a

have We this of X.Xx have XXXX March of no at the Xx excellent Net and to within leverage quarter year unsecured leverage X funding our next. was flexibility and the maturities remainder until third over range. the end comfortably

with Let me finish XXXX priority. Slide up reviewing briefly XX, our

We expect our managed year with end receivables original least $XX.X to above guidance. at the of billion

range. year to X.X% the is range. for at year, the our of charge-offs at expected end our be we end We at expect net approximately Interest higher higher revenue land expense the expect and our full growth of to

all shareholders. which managed ratio better our range constant guidance current of to positive than team's expectations, to laid and strong metrics around operating our out outcomes are our original Other expectations have than the the receivables, X.X%. performance expect at beginning our within financial customers for year, of is commitment we we the our the demonstrating for of Finally, be expense driving

origination, with a generation can steady we're drive forward we we credit, our in macroeconomic environment supporting we quarter. yields leverage, believe day, by conclude trends, And pleased this as I'll growth future. these operating capital significant with and the results look in

me call over let turn that, With to the Doug. back

Douglas Shulman

Jenny. Thanks,

done is direction work to last in the the years credit. in continued business X of up All that the positive serve we've our of the and customers showing manage

potential in going business and our products and team the how We growth best company nonprime customers navigated affecting drive experienced the our business of our like tailwinds demonstrating financial to the and the history our positioning, many how long has the performance. our new through core our believe we competitive and of uncertainties proud are many understanding including We consumer, forward. of have serve

about while business with performing future. the pleased we're the excited So how today, we're is even more

our great the All our OneMain, is come in this of who a driven make and drive of to customers to difference day for shareholders. of work every by team value lives members to the

for let up me that, With it questions. open

Operator

Ma open floor Terry our is coming the is first from questions. with And question Instructions] And for now Barclays. [Operator

Terry Ma

Foursight start the Just off that for net policy X.X% almost last impact of to a house keeping your not? with. adjustment range charge-off of to Does full quarter the include question year guidance Does X.X%. the or

Jenny Osterhout

policy quarter morning. include the That good or in X. last does impact Jenny, of Foursight the the

Terry Ma

it. got So

So is policy it not kind out does strip the charge-offs incremental of from the adjustment what you mean?

Jenny Osterhout

Correct.

Terry Ma

it. Got

constructed then of And guys just when guide guess, helpful. base beginning That's I I'm Okay. I midpoint. guess was the year, the you the case this at the assuming

closer the provide? you any to Any on provide it's of So to guide end the can back the range? or driving book color or by Whether driven what's kind of be front the can you not higher color book?

Jenny Osterhout

Yes. We're coming in within our guidance.

outcome past seen -- happy we should We an environment and We've in of delinquency the we're we throughout shouldn't we've landing. in that the inning [indiscernible] the they the improve around then that rates drive slower saw provided our and the we're macro where don't given -- growth much expected some surprising few be loss it year costs. So with think how year.

of all range year range. but [indiscernible] expect that sort at So end for higher driving of the [indiscernible] the in [indiscernible] the to

Terry Ma

follow-up. then And helpful. That's it. just more maybe one Got

just half first of this forward. peak of provide You kind the indicated gives some going in confidence charge-offs expect that what to Maybe color on you of you year.

Jenny Osterhout

look your I later. really, off X charge think delinquencies, they you when at about quarters drive

and [indiscernible] we're you last better account of we're but should what [indiscernible]. if travel, year quarter is flat, see start that [indiscernible] that took you than translate this see and into delinquency. so seeing could growth to liking direction have would the So we really, [indiscernible] been relatively like into

Douglas Shulman

I tighter And I about That's things of credit last all think all [indiscernible]. right become [indiscernible]. bigger the talking much has think, for the about, of in been couple Terry, delinquency it's we've our it's [indiscernible] numbers box how which is managing a part

Operator

question Fargo. take with we'll Kaye next Michael our next, from Wells And

Michael Kaye

translate a loan projections. expectations, higher for at question than really to our a least into compared didn't the but have balances lot originations. it were I about my They higher quarter,

anything So maybe consider? of factors or like other is of perhaps wondering, or should that percentage there more some in mix renewals originations, prepayments this I'm higher quarter a

Douglas Shulman

I grow with We're do think we originations. know, you as happy as so outcome. our Michael. But an

So we have good credit a tight a box, competitive really we have position.

able our of with Some bank originations. are to especially of the have competitors, market. We've building been on kind price still out

to happy originations uptick. It's as in see expected, And numbers. so we're I in think, the

with There's origination can side. not I'm balances just nothing So your translation about you surprising. -- follow up about Martin sure

Michael Kaye

little a so quarter, talk see basis don't asset to think, you points to about quarter-on-quarter. much. asked flattish so I they're up want yields, quarter-on-quarter, wanted to them be surprised XX nicely, bit would thought there I Okay. more up the And last

that on your So And near expectations? anything upside we that should kind in the asset was term? continue at there see surprised least momentum to of the yields versus

Jenny Osterhout

take Yes. that. I'll

XX.X%. Our XX third basis was was the about quarter from points second yield up quarter. That

we've second pricing to quarter, and been the the environment On competitive about through some time. over able gradually in those hold those really come actions been and of we've starting to make talking take

those start through. did see we come so some And of to

I since spoke and going basis to most about predict those I through. And are that's XXXX those our coming loan very of from to XXX earlier. the second quarter when think exactly driver points it's portfolio, come major of the for are hard increase personal that that

finance for mind, so book our growing book. in doing we've we're yielding growing and also originations a And been that auto this lower -- and lower growing our my loss about talking while we've and been content, and while,

And for to seeing of pricing take through that come yield. all time So you're and it is helping.

fields major going. little stay you say pricing you expect where that in in if terms should competitive But we over environment. start bump. wouldn't that through saw I I'd a to see think time, of come yield bump, I this

Operator

And Caintic from our next with BTIG. Vincent question comes

Vincent Caintic

credit. on one First

credit So this morning. commentary very helpful

could And at see if we should seasonality net charge-off you you but what year-over-year to If broad rate? maybe typical us could question, charge-off the expecting expect improvement us the that rate. positive -- be just to a also help thinking point about do a you remind and net with

Jenny Osterhout

give have fourth terms refunds. So with seeing and our we're the the 'XX quarter we second And providing Vincent, seasonality, quarter tax low now come But this see sense at this of our the let results start better where growing quarter one we rate. and loss not expect with of third been our the been translates would And first. will year-on-year in 'XX. higher our in soon, take the we've what I'll guidance delinquencies first on you're to that me at call just typical back delinquencies a better be into they have growth better quarter. and a X.XX% losses in if is

So last losses been excluding have then than quarters -- year. those better [indiscernible], to later. they would And into later translate X

think going you to start give that right give should down. thumb not sense see I again, to when guide think losses now. we're specific a really XXXX But a of I So you're on going to

Vincent Caintic

did should helpful. wondering relatedly, and that then dynamic be that about it front book we I'm trends just at And think be just point rate see growth some we the from positive origination volume that. nice do That's talking to the so what for the grow about curious Okay. was book been we've talking you that think forward? should And going you I'm how time. about front primarily thinking kind year-over-year. of

Douglas Shulman

Yes.

with customer we're paying product not will earlier, in originate to great tight box. the have digital Then the originations We credit great doing to we're price we're we been you all I investments see full experience, we're [indiscernible]. had, to fact mentioned fair going not I as that and have and quite We're at the a for think be it for right we're [indiscernible] in growth with put pleased our credit actually keeping now. customers value having marketing, successful with a that -- output originations proposition, the managing it [indiscernible] our a box. starts it's though not we

we what see. So we like

good really set. [indiscernible] have marketing it and We depends demand on

Operator

And our next Jefferies. question with comes from Hecht John

John Hecht

loans environment. that there sets, I'm that about does talking across worth and auto, constructive Or out? fairly is is are Doug pointing any -- all the personal the wondering, a X credit differences product competitive card? that

Douglas Shulman

a mean, box tight a XX% it's very we box. credit in is overlay we across credit That all means to X, No, question. I a, and just good everyone, remind Yes. a based which [indiscernible]. have have our stress similar in we'll in move the then model seeing our and and on if XX% a still [indiscernible] even the we run uptick actually there's overlays into our we market what recession that need have and in an we we're

tight. quite we're So

got think pretty part, pursuing that I plenty pockets those in demand, see new in in market of especially of we're those products, only their the each we've auto we tightly the confident. modulating products, testing very were feel

and in some customers. credit think dynamics a prices [indiscernible] doing someone offer affiliate place quality you loans that's producing can we see a and in it we is at we're and winning the the really in business that is [indiscernible], loan prevalent where market else I attractive of most our there, business on we're personal higher sites see where make the

seeing. the what we're bulk where that's of So

challengers auto for too, players less frankly, were think it's and us growing we small think card is, as such were business just I important play I [indiscernible]. that [indiscernible] that

John Hecht

enter just does How with maybe space a helpful. that also influence And credit strategic maybe That's over course the that Okay. of forward does various to we've of then the follow-on flow of thinking? lot dynamics? competitive related purchases just the time, agreements seen outright private portfolios. a And the and affect your is that

Douglas Shulman

have balance of we two, the that a there's then environment. robust make all one have ABS unsecured so we bank doing put is program fairly excess and can we sure have have balance, to keep to reasons we [indiscernible]. But a on of about any and lot plenty of fortress in sheet, the liquidity debt, a long-term our Yes. we Look we talk one facilities

the we've markets cycles and saw, at pandemic I capital have. of lot [indiscernible], people seen the think A came least didn't [indiscernible]. you X

we think of lot in depth mid-XXXX, now or fold or [indiscernible] the market up a then [indiscernible] I out of facilities time market. the again, jump and of competitors dried who actually in [indiscernible]. they And

market think As for you of yield. now searching a investors yield said, looking the I lot and are in back

So it I it and lumpy, be avenue will use competitors think affect will that who [indiscernible].

Operator

we'll Orenbuch question our Cowen. from take Moshe And with next TD

Moshe Orenbuch

bit Great clear message questions I has you've talk think or credit. to that to what And thoughts environment pretty it better. as of your think portfolio Can your see gotten or would macro bunch was a rate that from come are on getting delinquencies I to rate been take a the little about the But flat. either down? you reserve both the start reserve

Jenny Osterhout

[indiscernible].

You're to I $XX it expect it the today. million change pretty this in our levels -- good in by quarter, our feel our year. increased anything portfolio. reflected our There actually about wouldn't right, was rate reserve no materially change that reserve and growth -- we this coverage

levels stance consistent mix and conservative to in portfolio. reserves direction and the charge-offs, of product any of a sort change have the We macro on reserve the dependent really

before to comfortable where the what So is reserves, we want release [indiscernible]. very feel and with book we

Moshe Orenbuch

types of use as on who private out And aren't create -- and maybe if wondering before, loans, there that of indirectly? service there through -- is the those reasonable the from turndowns to a based that continuing or equity just selling them participation other is mean, of kind I often and question benefit And firms? something streams revenue are something that that by higher by it. John's possibility the and directly lenders larger up Got either you've perhaps following arrangements I'm way, considered their upon there

Douglas Shulman

something good business. loan a sale it's sell No, a on a our it's but is that of little variation do channel have a variation, we We auto actually necessarily different in a bit just off, whole where having -- downs not we funding. our there's to turn Yes. Moshe. question, And

auto path. built loan pursue to pipes flexibility pipes business, the our is One to we of choose we to the built full in if the have and we have reasons that sales that

definitely What on chase can about want about. are that want we bandied profitable? how it's to figure out the So off we normally incremental put conditions? we we It's of always to just what market book, and revenue get. go thought would traded we and then what much turn And down what's something kind return stuff our

we it. So do bit more answer good say, think consider we'll our for it's on of yes, if good our shareholders, we'll little it's have And do a a would a today, to it. definitely ROE We we to it radar. it and wrong going return and keep of

Jenny Osterhout

than balance sheet -- Yes. I the but we putting would putting loans on just always off balance own I about most and now, whole programs sheet and this add. We're all the could economics point, Jenny. of think that's put for it's that loan market the it's is pretty competitive sale is our same would just shareholders. I what reviewing we best mean right and we return the like -- economics.

and and whole get loan We with have we do that program. do loan sale we flexibility we the full the funding like that sales, But servicing on have fee. sale that gain

we there And it's I'd want say. so it, if

Operator

next from of our Bhatia We'll Mihir America. take Bank question with

Mihir Bhatia

more to at the go getting pretty type changes consistently and the the looking X environment there at I any confident. origination growth to get any loosening edges. book better, type seeing quarter. wondering, you're imagine tightened of I I box of Was you was back this making there any but -- compared the know wanted years materially ago, And to your was I you've credit

feel little you with credit on like you maybe a that you just underwriting anything the standards be may start loosening going like this So deep can quarter, a tad bit or where bit?

Douglas Shulman

loosen we're at And detail. look based box technology But both digital investment risk are micro Mihir. we've and some aggregate. invasion I that talked adjusting Thanks, Jenny we doing. pockets rate, in channel it the product, investment product very in and or on about mentioned in We this always not and geography, the before in did we earlier, quarter of

the years, at had data. is the one you to give growth of we payroll helped some me for which quarter, of did end X quarter, of which this access example Let we've things the drive second the

of can electronics. directly So we to documents prove sure very for make asked us, you now through you and like sources, it's data it we apply to to employers for a tap you a loan to when and fraud lot ask just verification. especially new access upload with can actually, something careful that, into you $XXX,XXX. with put We base say we make income people up introduce get accurate. it We used We're and then some

And so X or bringing put it inspecting the that. of upload documents. watch methods saw plugging actually versus better we credit even branch and and ago place our it's quite credit traditional into reliable, slightly was the years We are we that into good because of in the that

says But better come or a something. it experience branch or because have into much to don't it's also document do upload you customer a either a

rate. number So it creates of process. customers the The pull-through and slight uptick apply a all in the through way who the go

innovations [indiscernible]. it relaxing always And model business credit and benefit for the just of of improve customers like so we're not that our it's product tweaking obviously any that, to the

Mihir Bhatia

it. Got is that No, helpful.

behavior. I salience you staying you and into talk just Maybe I looking coming to just Are consumers the branch. it and coming Are now to looking banks branch question, tight. more origination to mentioned, you a competition quite you guess lines your towards increasingly pretty little the shifting that? think sounds the then And Because feels engage consumer at of seeing your really just is along bit wondering like about Can consumers or online network. of seeing interesting. like online, more the are into apps still the branch through come

seeing any you're if impact curious from just so that. And

Douglas Shulman

Yes. can behavior our for digital, the option on you lot of look, we pandemic, of you you. We to actually to and We can co-browse I or different documents. with the the show post have us people app products. their disclosure We the a mean, the shifted can consumers browser. interact take with through on

last And online. so we couple But our vast have of any start customers of not the seen movements. years, the majority major in

apply they So online.

interaction, through personal and are to with to choose app. it Some them through and want of branch us a through people who to some them browser of there do their choose or their-- phone the into their that on come have because

omnichannel. are gives who a real community. competitive know us, a branch. have business doing us. even by brand, them they like we confidence to Our with into it people never and know in for branches our be to a come company, strategy the presence, physical huge is We say people People in a think We're differentiator that drive

a secured the So with to It it else. to it to addition brand someone your customer. pure much some effects I physical think deal in do know just has get makes easier

and so more like the do focused some are very continue [indiscernible]. having But on be also And to trends of digitally. more banks we people major to

Operator

with Rick to Thank next go you. JPMorgan. Shane We'll

Richard Shane

this receivables little I'd shift talk to a loan about and basis then like bit about well. think on and mix a yields risk-adjusted as

So obviously, on buckets. be successful high-grading portfolio, higher-quality you to have appear guys what yields been your the raising

we impact start drag we yield? As on the [ of on When how yield. a about those on could particularly as products top bit you square the start products, for see ] to line little a grow basis to alternative the think should

those little think have to bottom opportunity more products think excuse particularly a adjusted leverage more -- when we line, do bit about receivable new when we or because will generate risk-adjusted X But you on to comparable continue returns, asset think those of some class. you levered importantly, that a basis returns, return about me, probably

Jenny Osterhout

Thanks. Yes.

receivables is book, just me Let of that. of about $XX.X today our is our take business which One, in Listen, start me auto billion receivables. with $X.X billion let

right. And -- have into impact are there you're as shift mix in we our of obviously on an book, there yield, it's yield. grow -- lot consumer So auto that but becomes will yield are Today, today, portion and it today. our as that in there it's a larger also that on absolutely things go loan included of that a and

loan taking loan from and products. it So we've also both that our personal coming a lot actions pricing personal product, that on coming consumer is our been auto of [indiscernible] It APR very and is loans. auto. increasing deliberate And from also originations, in our in in

continue that will Our improvement. but then yielding, of impact of lower is impact to and that of is better get auto, there And lower depending and on the the over that's also course, rate but pace content the loss yields from credit, time, which feel that business.

there. about expect is auto Investor the time. the And see go, going yield And in laid you'll on terms returns loans is think our you with we're I we even to returns. lower. similar see we of our over over where that should what those But growth some so to start book personal on In expectations time, Day, to gradually in we to what seeing we out of the grow overall, of see is auto like card slightly of credit higher slightly thinking and terms than

Richard Shane

it. Got

If I you've in in terms one of really think bucket That's XX kind Can maybe pricing last your yield loan you investors give If then dial loan are of on a the us terms quality try book. can follow-up. had And this. of of basis a much just think like-for-like we power in sense personal Okay. incremental over we months? about on how helpful. top to wondering. the that's what sort

Jenny Osterhout

quarter [indiscernible] that that's one XXXX. our since that lot I the think that the we've around pricing the second basis coming there, is coming loan earlier XXX points consumer A the that raised of I best higher. one that of power is at is from is portfolio gave

our If higher because end our of mean, that lower you on adjustments, the the of think most the about is less where book we're end normally of making competition I there's book. of pricing on

time, of over go this environment, to there's not pricing. on much just room in think type more I I'm So that sure

in, through. about that seeing more already is pricing we've put the this come again, So

Operator

And DeVries Deutsche our we'll question take Mark next with Bank. from

Mark DeVries

guidance to on Understanding Yes. don't charge-offs give for XXXX. want you

that versus with if helpful to I'm similar trends to it you trend we Q-on-Q talk what to you've several quarters could that, for X bps the up at still to just to thing look XX. And delinquencies think kind I of to quarter need the only is early-stage this about seasonality? relative trend that also last relative you see will over charge-offs improvement you main in observed be want in trajectory Am kind is for the think to what in the delinquency thinking seen seasonality right pre-pandemic I us of the year-over-year. about average right about down of

Jenny Osterhout

say, Yes. next Listen, really what in we're at think the in what delinquency. your I losses of mean, that I'd of all, the for year's I there was is trajectory I statement -- First was accurate. mean, looking pretty

of we was, you're first and that pleased confident based today us peak hearing front today. feel think I XXXX, our in in losses with saw what one, we our performance. where the are half very number delinquencies from on We're book

the our further in expectations. should with in that drive of those that the line our So was larger delinquency performance And messages improvement book. are piece

seeing our And early starting the we're on we results. really in actions those so took XXXX tightening of benefits August in

be as Will the this of so on generally right, if of loss obviously, dependent that quarter of our the direction really were in back come with we'll with increase trying the direction come -- and the across the that's And that back that in to front a more pace get to see XXXX. macro we travel we then it's And helpful. moving first book, for we'll pace guidance results. get to macro just environment, better, back, trying come improvement, said, we're get

Mark DeVries

is just of given Could the have policies kind inventory of what recoveries also on it. are and today. what charge-off us forward, you Got your you remind going receivables the outlook larger

Jenny Osterhout

Yes.

remain to recovery pre-pandemic recovery So we positive that strong really We level had. that performance, above see trends. we continue

quarter. million quarter, recovery, debt which $XX sales. we That's million with last in had of about $X is This post in charge-off line

shift. there. would to and our right maximize now, recovery overall, not quite value versus expect something with we're and sales So looking major internal similar We're bulk decisions external collections a the But returns of much the go-forward. always of pleased versus for and making

Operator

to Thank to Janney. John you. with is open. your going And And line go John, next, Rowan we're

John Rowan

hear on was I Sorry, mute. me? Can you

Douglas Shulman

hear can you, John. we Yes,

John Rowan

Okay.

obviously, So well based to X.X of on would year. my first Year-to-date, that fourth X.X, be X.X for the for of is last after staying with X.X ahead just expenses. math, on implies year. quarter for X ratio But months, the That the number you're the get X.X-ish, -- year, expense to a

how think over I the that I for ratio number And statement just we get higher OpEx just ratio. will continue that year-over-year, that time. quarter? X.X for you to just it your OpEx is have an improve Can if to OpEx the fourth compare explain to

Jenny Osterhout

think I we still in look of at OpEx terms trends Listen, the quarters. multiple

really efficiently. from we're those which business, we there start We area. running be talk look just that So our a and focused perspective. about about come I lumpy X.X%, has it a they guidance would left around in, good Expenses year-on-year can in on running when trends, we're talking where unchanged

our past we've strength. we're So overall, a come a of operating down and couple we think great yes, leverage seeing business where of real as the lot in Can been it over from years.

And so our careful of towards we're spending.

higher map, I I would overall, that around X.X% in say But in than expect. quarter, the we fourth I'd back of range. guidance our your that's think kept terms slightly

Douglas Shulman

is that John, we're value. add, I'd don't careful part. thing things this only spending money Not the And Yes. on super add talked and I've about

for put doing in good efficient. been and program how are a We try that if a get there's it to see the company and idea So something long shut that we a place time. is there's has executed wasn't down it to

we're always FX That's so our aggressive the of And been action. ratio expense down. taking reasons one you've seen

a X next for value. create is just know, Second running [indiscernible] we sure business it's business second, competitive inherent as you But share great long-term we're also to years great position making as leverage. to this X have the

it waste So exactly we and we every day, money but get [indiscernible] too that's our we're -- [indiscernible] expenses, make we excited never I making talent. sure also work And based don't investment.

Operator

you. Thank

Douglas Shulman

we think are time. out I of

thank So I everyone today. for here want being to

day. As great has follow up to here always, available. free And with I a hope our feel everyone team. We're and

Operator

XXXX This wonderful your disconnect day. Call. Thank you. does a and have today's this Earnings Quarter at OneMain Third Financial Please line conclude time,

OneMain (OMF) 30 Oct 242024 Q3 Earnings call transcript