OneMain Holdings Inc.

07/29/2025 | Press release | Distributed by Public on 07/29/2025 04:31

Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
An index to our management's discussion and analysis follows:
Topic Page
Forward-Looking Statements
45
Overview
46
Recent Developments and Outlook
47
Results of Operations
48
Segment Results
52
Credit Quality
55
Liquidity and Capital Resources
58
Critical Accounting Policies and Estimates
64
Recent Accounting Pronouncements
64
Seasonality
64
Forward-Looking Statements
This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, but instead represent only management's current beliefs regarding future events. By their nature, forward-looking statements are subject to risks, uncertainties, assumptions, and other important factors that may cause actual results, performance, or achievements to differ materially from those expressed in or implied by such forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake any obligation to update or revise these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments, or otherwise, except as required by law. Forward-looking statements include, without limitation, statements concerning future plans, objectives, goals, projections, strategies, events, or performance, and underlying assumptions and other statements related thereto. Statements preceded by, followed by or that otherwise include the words "anticipates," "appears," "assumes," "believes," "can," "continues," "could," "estimates," "expects," "forecasts," "foresees," "goals," "intends," "likely," "objective," "plans," "projects," "target," "trend," "remains," and similar expressions or future or conditional verbs such as "could," "may," "might," "should," "will," or "would" are intended to identify forward-looking statements, but these words are not the exclusive means of identifying forward-looking statements. Important factors that could cause actual results, performance, or achievements to differ materially from those expressed in or implied by forward-looking statements include, without limitation, the following:
•adverse changes and volatility in general economic conditions, including the interest rate environment and the financial markets;
•the sufficiency of our allowance for finance receivable losses;
•increased levels of unemployment and personal bankruptcies;
•the current inflationary environment and related trends affecting our customers;
•natural or accidental events such as earthquakes, hurricanes, pandemics, floods, or wildfires affecting our customers, collateral, or our facilities;
•a failure in or breach of our information, operational or security systems, or infrastructure or those of third parties, including as a result of cyber incidents, war, or other disruptions;
•the adequacy of our credit risk scoring models;
•geopolitical risks, including recent geopolitical actions outside the U.S.;
•adverse changes in our ability to attract and retain employees or key executives;
•increased competition or adverse changes in customer responsiveness to our distribution channels or products;
•changes in federal, state, or local laws, regulations, or regulatory policies and practices or increased regulatory scrutiny of our business or industry;
•risks associated with our insurance operations;
•the costs and effects of any actual or alleged violations of any federal, state, or local laws, rules or regulations;
•the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority;
•our substantial indebtedness and our continued ability to access the capital markets and maintain adequate current sources of funds to satisfy our cash flow requirements;
•our ability to comply with all of our covenants; and
•the effects of any downgrade of our debt ratings by credit rating agencies.
We also direct readers to the other risks and uncertainties discussed in Part I - Item 1A. "Risk Factors" included in our Annual Report and in other documents we file with the SEC.
If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. You should specifically consider the factors identified in this report and in the documents we file with the SEC that could cause actual results to differ before making an investment decision to purchase our securities and should not place undue reliance on any of our forward-looking statements. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.
Overview
We offer consumer loans, which consist of personal loans and auto finance, credit cards, and other products to help customers meet everyday needs and take steps to improve their financial well-being. We service the loans that we retain on our balance sheet, as well as loans owned by third parties. Additionally, our insurance subsidiaries offer optional credit and non-credit insurance and other optional products. We also offer two credit cards, BrightWay and BrightWay+, which are designed to offer a highly digital customer experience while also rewarding customers for responsible credit activity. Our resources allow us to operate in 47 states and provide a seamless experience through our customers' preferred channels, including in person, online or over the phone, using our digital platforms, distribution partnerships, or working with our expert team members at more than 1,300 locations.
OUR PRODUCTS
Our product offerings include:
•Personal Loans -We offer personal loans through our branch network, central operations, direct mail, digital affiliates, and our website, www.onemainfinancial.com,to customers who need timely access to cash. Our personal loans are non-revolving, with a fixed rate, have fixed terms generally between three and six years, and are secured by automobiles, other titled collateral, or are unsecured. At June 30, 2025, we had approximately 2.3 million personal loans totaling $20.8 billion of net finance receivables, of which 52% were secured by titled property, compared to approximately 2.4 million personal loans totaling $20.8 billion of net finance receivables, of which 50% were secured by titled property at December 31, 2024. We also service personal loans for our whole loan sale partners.
•Auto Finance - We offer secured auto financing originated at the point of purchase through a growing network of franchise and independent dealerships. The loans are non-revolving, with a fixed rate, and have fixed terms generally between three and six years. At June 30, 2025, we had approximately 138 thousand auto finance loans totaling $2.3 billion of net finance receivables, compared to approximately 127 thousand auto finance loans totaling $2.1 billion of net finance receivables at December 31, 2024. We also service auto finance loans for our whole loan sale partners and loans originated by third parties.
•Credit Cards - BrightWay and BrightWay+ credit cards originate through a third-party bank partner from which we purchase the receivable balances. The credit cards are offered across our branch network, as well as through direct mail, our digital affiliates, and our website. Credit cards are open-ended, revolving, with a fixed rate, and are unsecured. At June 30, 2025, we had approximately 920 thousand open credit card customer accounts, totaling $752 million of net finance receivables, compared to approximately 783 thousand open credit card customer accounts, totaling $643 million of net finance receivables at December 31, 2024.
•Optional Products - We offer our customers optional credit insuranceproducts (life, disability, and involuntary unemployment insurance) and optional non-credit insurance products through both our branch network and our central operations. Credit insurance and non-credit insurance products are provided by our affiliated insurance companies. We offer Guaranteed Asset Protection ("GAP") coverage as a waiver product or insurance. We also offer optional membership plans from an unaffiliated company.
OUR SEGMENT
At June 30, 2025, Consumer and Insurance ("C&I") is our only reportable segment, which includes consumer loans, credit cards, and optional products. At June 30, 2025, we had $25.2 billion of managed receivables due from approximately 3.5 million customer accounts, compared to $24.7 billion of managed receivables due from approximately 3.4 million customer accounts at December 31, 2024.
The remaining components (which we refer to as "Other") consist of our liquidating SpringCastle Portfolio servicing activity and our non-originating legacy operations, which primarily include our liquidating real estate loans held for sale and reported in Other assets in our condensed consolidated balance sheets. See Note 13 of the Notes to the Condensed Consolidated Financial Statements included in this report for more information about our segment.
Recent Developments and Outlook
RECENT DEVELOPMENTS
Issuances and Redemption of Unsecured Debt
On March 13, 2025, OMFC issued a total of $600 million aggregate principal amount of 6.750% Senior Notes due 2032.
On June 11, 2025, OMFC issued a total of $800 million aggregate principal amount of 7.125% Senior Notes due 2032.
On June 27, 2025, OMFC paid a net aggregate amount of $822 million, inclusive of accrued interest and premium, to complete a partial redemption of its 7.125% Senior Notes due 2026.
For information about the issuance of our unsecured debt, see "Liquidity and Capital Resources" under Management's Discussion and Analysis of Financial Condition and Results of Operations in this report.
Securitization Transactions Completed - ODART 2025-1 and OMFIT 2025-1
For information regarding the issuances of our secured debt, see "Liquidity and Capital Resources" under Management's
Discussion and Analysis of Financial Condition and Results of Operations in this report.
Election of Members to the OMH Board of Directors
On March 17, 2025, Andrew D. Macdonald was elected to the OMH Board of Directors.
On June 10, 2025, Christopher A. Halmy was elected to the OMH Board of Directors.
Cash Dividends to OMH's Common Stockholders
For information regarding the quarterly dividends declared by OMH, see "Liquidity and Capital Resources" under Management's Discussion and Analysis of Financial Condition and Results of Operations in this report.
OUTLOOK
We actively monitor the current macroeconomic environment and remain prepared for any developments that may impact our business. Our financial condition and results of operations could be affected by macroeconomic conditions, including changes in unemployment, inflation, interest rates, consumer confidence, and geopolitical actions outside of the U.S. We incorporate updates to our macroeconomic assumptions, as necessary, which could lead to adjustments in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.
Our experienced management team remains focused on maintaining a strong balance sheet with a long liquidity runway and adequate capital while maintaining a conservative and disciplined underwriting model. We believe we are well positioned to serve our customers and execute on our strategic priorities, including:
•striving to be the lender of choice for nonprime consumers and improve their financial well-being;
•continuing to expand our product offerings and grow our receivables;
•maintaining a rigorous focus on maximizing returns while minimizing credit risk;
•leveraging our scale and cost discipline across the Company to deliver improved operating leverage; and
•maintaining a strong liquidity level with diversified funding sources.
We believe our commitment to closely monitor the macroeconomic environment, retain disciplined underwriting, drive strategic growth initiatives, and attract and retain top talent strengthens our ability to navigate challenges and seize opportunities. With a robust balance sheet and a focus on our key initiatives, we are confident in our ability to increase shareholder value and remain resilient and adaptable to navigate an ever-evolving economic, social, political, and regulatory landscape.
Results of Operations
The results of OMFC are consolidated into the results of OMH. Due to the nominal differences between OMFC and OMH, content throughout this section relates only to OMH. See Note 1 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information.
OMH'S CONSOLIDATED RESULTS
The following table below presents OMH's consolidated operating results and selected financial statistics. A further discussion of OMH's operating results for our operating segment is provided under "Segment Results" below.
At or for the
Three Months Ended June 30, 		At or for the
Six Months Ended June 30,
(dollars in millions, except per share amounts) 2025 2024 2025 2024
Interest income $ 1,339 $ 1,219 $ 2,648 $ 2,392
Interest expense 317 297 629 574
Provision for finance receivable losses 511 575 967 1,006
Net interest income after provision for finance receivable losses
511 347 1,052 812
Other revenues 176 174 364 354
Other expenses 473 429 927 870
Income before income taxes
214 92 489 296
Income taxes 47 21 109 71
Net income $ 167 $ 71 $ 380 $ 225
Share Data:
Earnings per share:
Diluted $ 1.40 $ 0.59 $ 3.18 $ 1.87
Selected Financial Statistics (a)
Total finance receivables:
Net finance receivables $ 23,870 $ 22,365 $ 23,870 $ 22,365
Average net receivables $ 23,600 $ 22,141 $ 23,526 $ 21,704
Gross charge-off ratio (b)
9.05 % 9.84 % 9.37 % 9.98 %
Recovery ratio (1.48) % (1.37) % (1.51) % (1.41) %
Net charge-off ratio (b)
7.57 % 8.47 % 7.86 % 8.56 %
At or for the
Three Months Ended June 30, 		At or for the
Six Months Ended June 30,
(dollars in millions, except per share amounts) 2025 2024 2025 2024
Selected Financial Statistics, continued (a)
Personal loans:
Net finance receivables $ 20,814 $ 20,073 $ 20,814 $ 20,073
Origination volume $ 3,534 $ 3,293 $ 6,213 $ 5,647
Number of accounts 2,340,944 2,326,811 2,340,944 2,326,811
Number of accounts originated 328,162 312,955 576,247 543,805
Auto finance:
Net finance receivables $ 2,304 $ 1,826 $ 2,304 $ 1,826
Origination volume $ 373 $ 290 $ 716 $ 458
Number of accounts 138,405 113,456 138,405 113,456
Number of accounts originated 16,645 14,421 32,402 24,780
Consumer loans:
Net finance receivables $ 23,118 $ 21,899 $ 23,118 $ 21,899
Yield 22.70 % 22.12 % 22.62 % 22.12 %
Origination volume $ 3,907 $ 3,582 $ 6,929 $ 6,105
Number of accounts 2,479,349 2,440,267 2,479,349 2,440,267
Number of accounts originated 344,807 327,376 608,649 568,585
Net charge-off ratio (b)
7.19 % 8.31 % 7.50 % 8.44 %
30-89 Delinquency ratio 3.04 % 3.12 % 3.04 % 3.12 %
Credit cards:
Net finance receivables $ 752 $ 466 $ 752 $ 466
Purchase volume $ 305 $ 218 $ 554 $ 386
Number of open accounts 920,311 612,292 920,311 612,292
Debt balances:
Long-term debt balance $ 22,053 $ 20,671 $ 22,053 $ 20,671
Average daily debt balance $ 21,805 $ 20,894 $ 21,740 $ 20,298
(a) See "Glossary" at the beginning of this report for formulas and definitions of our key performance ratios.
(b) The calculations for the three and six months ended June 30, 2024 have been adjusted for policy alignment associated with the Foursight Acquisition. See Note 4 of the Notes to the Consolidated Financial Statements in Part II - Item 8 of our Annual Report for additional information.
Comparison of Consolidated Results for Three and Six Months Ended June 30, 2025 and 2024
Interest incomeincreased $120 million or 10% and $256 million or 11% for the three and six months ended June 30, 2025 when compared to the same periods in 2024 due to growth in average net receivables and an increase in yield.
Interest expenseincreased $20 million or 7% and $55 million or 10% for the three and six months ended June 30, 2025 when compared to the same periods in 2024 due to an increase in average debt to support our receivables growth and a higher average cost of funds.
Provision for finance receivable lossesdecreased $64 million or 11% and $39 million or 4% for the three and six months ended June 30, 2025 when compared to the same periods in 2024 reflecting the impact of the Foursight Acquisition in the second quarter of 2024 and lower net charge-offs, partially offset by growth in receivables in the current period.
Other revenues increased $2 million or 1% and $10 million or 3% for the three and six months ended June 30, 2025 when compared to the same periods in 2024 due to a higher gain on sales of finance receivables and an increase in credit card revenue from growth in receivables, partially offset by losses on the repurchases and repayments of debt and a decrease in investment revenue due to lower average corporate cash balances.
Other expenses increased $44 million or 10% and $57 million or 6% for the three and six months ended June 30, 2025 when compared to the same periods in 2024 driven by increases in salaries and benefits expense and general operating expenses due to growth in receivables and our strategic investments in the business. The increase for the six months ended was partially offset by restructuring charges in the prior period not present in the current period.
Income taxes increased $26 million or 122% and $38 million or 55% for the three and six months ended June 30, 2025 when compared to the same periods in 2024 due to higher pretax income.
NON-GAAP FINANCIAL MEASURES
Management uses C&I adjusted pretax income (loss), a non-GAAP financial measure, as a key performance measure of our segment. C&I adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes net gain or loss resulting from repurchases and repayments of debt, restructuring charges, acquisition-related transaction and integration expenses, and other items and strategic activities. Management believes C&I adjusted pretax income (loss) is useful in assessing the profitability of our segment.
Management also uses pretax capital generation, a non-GAAP financial measure, as a key performance measure of our segment. This measure represents C&I adjusted pretax income as discussed above and excludes the change in our C&I allowance for finance receivable losses in the period while still considering the C&I net charge-offs incurred during the period. Management believes that pretax capital generation is useful in assessing the capital created in the period impacting the overall capital adequacy of the Company. Management believes that the Company's reserves, combined with its equity, represent the Company's loss absorption capacity.
Management utilizes both C&I adjusted pretax income (loss) and pretax capital generation in evaluating our performance. Additionally, both of these non-GAAP measures are consistent with the performance goals established in OMH's executive compensation program. C&I adjusted pretax income (loss) and pretax capital generation are non-GAAP financial measures and should be considered supplemental to, but not as a substitute for or superior to, income (loss) before income taxes, net income, or other measures of financial performance prepared in accordance with GAAP.
OMH's reconciliations of income before income tax expense on a Segment Accounting Basis to C&I adjusted pretax income (non-GAAP) and pretax capital generation (non-GAAP) were as follows:
Three Months Ended
June 30, 		Six Months Ended
June 30,
(dollars in millions) 2025 2024 2025 2024
Consumer and Insurance
Income before income taxes - Segment Accounting Basis
$ 211 $ 145 $ 481 $ 348
Adjustments:
Net loss on repurchases and repayments of debt
20 12 25 14
Restructuring charges - - - 27
Acquisition-related transaction and integration expenses - 2 1 3
Other
- 4 - 4
Adjusted pretax income (non-GAAP)
231 163 507 396
Provision for finance receivable losses 511 515 967 946
Net charge-offs (446) (496) (919) (953)
Pretax capital generation (non-GAAP) $ 296 $ 182 $ 555 $ 389
Segment Results
The results of OMFC are consolidated into the results of OMH. Due to the nominal differences between OMFC and OMH, content throughout this section relates only to OMH. See Note 1 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information.
See Note 13 of the Notes to the Condensed Consolidated Financial Statements included in this report for a description of our segment and methodologies used to allocate revenues and expenses to our C&I segment and for reconciliations of segment total to condensed consolidated financial statement amounts.
CONSUMER AND INSURANCE
The following table below presents OMH's adjusted pretax income and selected financial statistics for C&I on an adjusted Segment Accounting Basis.
At or for the
Three Months Ended June 30, 		At or for the
Six Months Ended June 30,
(dollars in millions) 2025 2024 2025 2024
Interest income $ 1,333 $ 1,210 $ 2,635 $ 2,382
Interest expense 317 295 628 572
Provision for finance receivable losses 511 515 967 946
Net interest income after provision for finance receivable losses
505 400 1,040 864
Other revenues 195 184 386 365
Other expenses 469 421 919 833
Adjusted pretax income (non-GAAP) $ 231 $ 163 $ 507 $ 396
Selected Financial Statistics (a)
Total finance receivables:
Net finance receivables $ 23,901 $ 22,428 $ 23,901 $ 22,428
Average net receivables $ 23,634 $ 22,210 $ 23,564 $ 21,738
Gross charge-off ratio (b)
9.05 % 9.82 % 9.37 % 9.97 %
Recovery ratio (1.48) % (1.37) % (1.50) % (1.41) %
Net charge-off ratio (b)
7.57 % 8.45 % 7.87 % 8.55 %
At or for the
Three Months Ended June 30, 		At or for the
Six Months Ended June 30,
(dollars in millions) 2025 2024 2025 2024
Selected Financial Statistics, continued (a)
Personal loans:
Net finance receivables $ 20,814 $ 20,073 $ 20,814 $ 20,073
Origination volume $ 3,534 $ 3,293 $ 6,213 $ 5,647
Number of accounts 2,340,944 2,326,811 2,340,944 2,326,811
Number of accounts originated 328,162 312,955 576,247 543,805
Auto finance:
Net finance receivables $ 2,335 $ 1,889 $ 2,335 $ 1,889
Origination volume $ 373 $ 290 $ 716 $ 458
Number of accounts 138,405 113,456 138,405 113,456
Number of accounts originated 16,645 14,421 32,402 24,780
Consumer loans:
Net finance receivables $ 23,149 $ 21,962 $ 23,149 $ 21,962
Yield 22.58 % 21.91 % 22.48 % 22.01 %
Origination volume $ 3,907 $ 3,582 $ 6,929 $ 6,105
Number of accounts 2,479,349 2,440,267 2,479,349 2,440,267
Number of accounts originated 344,807 327,376 608,649 568,585
Net charge-off ratio (b)
7.19 % 8.29 % 7.51 % 8.43 %
30-89 Delinquency ratio 3.05 % 3.13 % 3.05 % 3.13 %
Credit cards:
Net finance receivables $ 752 $ 466 $ 752 $ 466
Purchase volume $ 305 $ 218 $ 554 $ 386
Number of open accounts 920,311 612,292 920,311 612,292
(a) See "Glossary" at the beginning of this report for formulas and definitions of our key performance ratios.
(b) The calculations for the three and six months ended June 30, 2024 have been adjusted for policy alignment associated with the Foursight Acquisition. See Note 4 of the Notes to the Consolidated Financial Statements in Part II - Item 8 of our Annual Report for additional information.
Comparison of Adjusted Pretax Income for Three and Six Months Ended June 30, 2025 and 2024
Interest incomeincreased $123 million or 10% and $253 million or 11% for the three and six months ended June 30, 2025 when compared to the same periods in 2024 due to growth in average net receivables and an increase in yield.
Interest expenseincreased $22 million or 7% and $56 million or 10% for the three and six months ended June 30, 2025 when compared to the same periods in 2024 due to an increase in average debt to support our receivables growth and a higher average cost of funds.
Provision for finance receivable losses remained consistent for the three months ended June 30, 2025 when compared to the same period in 2024 due to lower net charge-offs, partially offset by growth in receivables in the current period.
Provision for finance receivable losses increased $21 million or 2% for the six months ended June 30, 2025 when compared to the same period in 2024 due to growth in receivables, partially offset by lower net charge-offs in the current period.
Other revenues increased $11 million or 6% and $21 million or 6% for the three and six months ended June 30, 2025 when compared to the same periods in 2024 due to a higher gain on sales of finance receivables and an increase in credit card revenue from growth in receivables, partially offset by a decrease in investment revenue due to lower average corporate cash balances.
Other expenses increased $48 million or 11% and $86 million or 10% for the three and six months ended June 30, 2025 when compared to the same periods in 2024 driven by increases in salaries and benefits expense and general operating expenses due to growth in receivables and our strategic investments in the business.
Credit Quality
FINANCE RECEIVABLES
Our net finance receivables, consisting of consumer loans and credit cards, were $23.9 billion at June 30, 2025 and $23.6 billion at December 31, 2024. We consider the delinquency status of our finance receivables as our key credit quality indicator. We monitor the delinquency of our finance receivable portfolio, including the migration between the delinquency buckets and changes in the delinquency trends to manage our exposure to credit risk in the portfolio. Our branch and central operation team members work closely with customers as necessary and offer a variety of borrower assistance programs to help support our customers.
DELINQUENCY
We monitor delinquency trends to evaluate the risk of future credit losses and employ advanced analytical tools to manage performance. Team members are actively engaged in collection activities throughout the early stages of delinquency. We closely track and report the percentage of receivables that are contractually 30-89 days past due as a benchmark of portfolio quality, collections effectiveness, and as a strong indicator of losses in coming quarters.
When consumer loans are contractually 60 days past due, we consider these accounts to be at an increased risk for loss and move collection of these accounts to our central collection operations. Use of our central operations teams for managing late-stage delinquency allows us to apply more advanced collection techniques and tools to drive credit performance and operational efficiencies.
We consider our consumer loans to be nonperforming at 90 days contractually past due, at which point we stop accruing finance charges and reverse finance charges previously accrued. For credit cards, we accrue finance charges and fees until charge-off at 180 days contractually past due, at which point we reverse finance charges and fees previously accrued.
The delinquency information for net finance receivables on a Segment Accounting Basis was as follows:
Consumer and Insurance
(dollars in millions)
Consumer Loans
Credit Cards
June 30, 2025
Current
$ 21,952 $ 665
30-89 days past due
706 38
90+ days past due
491 49
Total net finance receivables
$ 23,149 $ 752
Delinquency ratio
30-89 days past due
3.05 % 5.01 %
30+ days past due 5.17 % 11.58 %
90+ days past due 2.12 % 6.57 %
December 31, 2024
Current
$ 21,633 $ 558
30-89 days past due 743 37
90+ days past due
579 48
Total net finance receivables
$ 22,955 $ 643
Delinquency ratio
30-89 days past due
3.24 % 5.78 %
30+ days past due 5.76 % 13.26 %
90+ days past due 2.52 % 7.47 %
ALLOWANCE FOR FINANCE RECEIVABLE LOSSES
We estimate and record an allowance for finance receivable losses to cover the expected lifetime credit losses on our finance receivables. Our allowance for finance receivable losses may fluctuate based upon changes in portfolio growth, credit quality, and economic conditions.
Our methodology to estimate expected credit losses uses recent macroeconomic forecasts, which include forecasts for unemployment. We leverage projections from various industry leading providers. We also consider inflationary pressures, consumer confidence levels, and elevated interest rates that may continue to impact the economic outlook. At June 30, 2025, our economic forecast used a reasonable and supportable period of 12 months. We may experience further changes to the macroeconomic assumptions within our forecast, as well as changes to our loan loss performance outlook, both of which could lead to further changes in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.
Changes in our allowance for finance receivable losses were as follows:
(dollars in millions) Consumer and Insurance Segment to
GAAP
Adjustment 		Consolidated
Total
Consumer Loans
Credit Cards
Three Months Ended June 30, 2025
Balance at beginning of period
$ 2,541 $ 152 $ (5) $ 2,688
Provision for finance receivable losses
460 51 - 511
Charge-offs
(496) (37) 1 (532)
Recoveries
85 2 - 87
Balance at end of period
$ 2,590 $ 168 $ (4) $ 2,754
Three Months Ended June 30, 2024
Balance at beginning of period
$ 2,376 $ 78 $ - $ 2,454
Provision for finance receivable losses
473 42 60 575
Charge-offs
(553) (18) - (571)
Recoveries
75 - - 75
Other *
98 - (67) 31
Balance at end of period
$ 2,469 $ 102 $ (7) $ 2,564
Six Months Ended June 30, 2025
Balance at beginning of period
$ 2,572 $ 138 $ (5) $ 2,705
Provision for finance receivable losses
869 98 - 967
Charge-offs
(1,022) (73) 2 (1,093)
Recoveries
171 5 (1) 175
Balance at end of period
$ 2,590 $ 168 $ (4) $ 2,754
Net finance receivables
$ 23,149 $ 752 $ (31) $ 23,870
Allowance ratio
11.19 % 22.28 % N/A 11.54 %
Six Months Ended June 30, 2024
Balance at beginning of period
$ 2,415 $ 65 $ - $ 2,480
Provision for finance receivable losses
879 67 60 1,006
Charge-offs
(1,075) (31) - (1,106)
Recoveries
152 1 - 153
Other *
98 - (67) 31
Balance at end of period
$ 2,469 $ 102 $ (7) $ 2,564
Net finance receivables
$ 21,962 $ 466 $ (63) $ 22,365
Allowance ratio
11.24 % 21.95 % N/A 11.47 %
* Represents allowance for finance receivable losses recognized on PCD loans acquired in the Foursight Acquisition.
The current delinquency status of our finance receivable portfolio, inclusive of recent borrower performance and loss performance, volume of our modified finance receivable activity, level and recoverability of collateral securing our finance receivable portfolio, portfolio mix, and the reasonable and supportable forecast of economic conditions are the primary drivers that can cause fluctuations in our allowance ratio from period to period. We monitor the allowance ratio to ensure we have a sufficient level of allowance for finance receivable losses based on the estimated lifetime expected credit losses in our finance receivable portfolio. The allowance for finance receivable losses as a percentage of net finance receivables increased slightly from the prior year period primarily due to the change in portfolio mix. See Note 4 of the Notes to the Condensed Consolidated Financial Statements included in this report for more information about the changes in the allowance for finance receivable losses.
Liquidity and Capital Resources
SOURCES AND USES OF FUNDS
We finance the majority of our operating liquidity and capital needs through a combination of cash flows from operations, secured debt, unsecured debt, borrowings from revolving conduit facilities and credit card revolving VFN facilities, whole loan sales, and equity. We may also utilize other sources in the future. As a holding company, all of the funds generated from our operations are earned by our operating subsidiaries. Our operating subsidiaries' primary cash needs relate to funding our lending activities, our debt service obligations, our operating expenses, payment of insurance claims, and supporting strategic initiatives.
We have previously purchased portions of our unsecured indebtedness, and we may elect to purchase additional portions of our unsecured indebtedness or securitized borrowings in the future. Future purchases may be made through the open market, privately negotiated transactions with third parties, or pursuant to one or more tender or exchange offers, all of which are subject to terms, prices, and consideration we may determine at our discretion.
During the six months ended June 30, 2025, OMH generated net income of $380 million. OMH's net cash inflow from operating and investing activities totaled $95 million for the six months ended June 30, 2025. At June 30, 2025, our scheduled interest payments for the remainder of 2025 totaled $291 million and there were no scheduled principal payments for 2025 on our existing unsecured debt. As of June 30, 2025, we had $9.7 billion of unencumbered receivables.
Based on our estimates and considering the risks and uncertainties of our plans, we believe that we will have adequate liquidity to finance and operate our businesses and repay our obligations as they become due.
OMFC's Issuances and Repurchases of Unsecured Debt
On March 13, 2025, OMFC issued a total of $600 million aggregate principal amount of 6.750% Senior Notes due 2032 under the Base Indenture, as supplemented by the Twentieth Supplemental Indenture, pursuant to which OMH provided a guarantee on an unsecured basis.
On June 11, 2025, OMFC issued a total of $800 million aggregate principal amount of 7.125% Senior Notes due 2032 under the Base Indenture, as supplemented by the Twenty-First Supplemental Indenture, pursuant to which OMH provided a guarantee on an unsecured basis.
On June 27, 2025, OMFC paid a net aggregate amount of $822 million, inclusive of accrued interest and premium, to complete a partial redemption of its 7.125% Senior Notes due 2026.
From time to time we may purchase portions of our unsecured indebtedness through the open market. During the six months ended June 30, 2025, we repurchased $280 million of our unsecured notes.
OMFC's Unsecured Corporate Revolver
At June 30, 2025, the borrowing capacity of our corporate revolver was $1.1 billion.
Securitizations, Revolving Conduit Facilities, and Credit Card Revolving VFN Facilities
During the six months ended June 30, 2025, we completed two new consumer loan securitization (ODART 2025-1 and OMFIT 2025-1, see "Securitized Borrowings" below) and redeemed two consumer loan securitizations (OMFIT 2018-2 and FCRT 2021-2 ). During the six months ended June 30, 2025, we entered into no new revolving conduit facilities. At June 30, 2025, the borrowing capacity of our revolving conduit facilities was $6.0 billion. At June 30, 2025, we had $13.9 billion of consumer loan gross finance receivables pledged as collateral for our securitizations, revolving conduit facilities, and private secured term funding facility.
During the six months ended June 30, 2025, we entered into no new credit card revolving VFN facilities. On January 18, 2025, the borrowing capacity of OneMain Financial Credit Card Trust - Series 2024-VFN2 increased to $250 million. At June 30, 2025, the borrowing capacity of our credit card revolving VFN facilities was $400 million. At June 30, 2025, we had $432 million of credit card principal balances held in OneMain Financial Credit Card Trust ("OMFCT") for our credit card revolving VFN facilities.
Private Secured Term Funding
On June 16, 2025, we terminated a private secured term funding facility with a maximum borrowing capacity of $375 million. At June 30, 2025, the maximum borrowing capacity of $350 million was outstanding under the remaining private secured term funding facility. Principal payments on any outstanding balances are not required until after October 2027 followed by a subsequent amortization period, which upon expiration the outstanding principal is due and payable.
See Notes 6 and 7 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information on our long-term debt, securitization transactions, private secured term funding, revolving conduit facilities, and credit card revolving VFN facilities.
Credit Ratings
Our credit ratings impact our ability to access capital markets and our borrowing costs. Rating agencies base their ratings on numerous factors, including liquidity, capital adequacy, asset quality, quality of earnings, and the probability of systemic support. Significant changes in these factors could result in different ratings.
The table below outlines OMFC's long-term corporate debt ratings and outlook by rating agencies:
As of June 30, 2025
Rating Outlook
S&P BB Stable
Moody's Ba2 Stable
KBRA BB+ Stable
Currently, no other entity has a corporate debt rating, though they may be rated in the future.
Stock Repurchased
During the six months ended June 30, 2025, OMH repurchased 782,773 shares of its common stock through its stock repurchase program for an aggregate total of $37 million, including commissions and fees. As of June 30, 2025, OMH held a total of 16,803,289 shares of treasury stock.
For additional information regarding the shares repurchased, see Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Part II included in this report.
Cash Dividend to OMH's Common Stockholders
As of June 30, 2025, the dividend declarations for the current year by the Board were as follows:
Declaration Date Record Date Payment Date Dividend Per Share Amount Paid
(in millions)
January 31, 2025 February 12, 2025 February 20, 2025 $ 1.04 $ 124
April 29, 2025 May 9, 2025 May 16, 2025 1.04 124
Total $ 2.08 $ 248
To provide funding for the dividend, OMFC paid dividends of $246 million to OMH during the six months ended June 30, 2025.
On July 25, 2025, OMH declared a dividend of $1.04 per share payable on August 13, 2025 to record holders of OMH's common stock as of the close of business on August 4, 2025. To provide funding for the OMH dividend, the OMFC Board of Directors authorized a dividend in the amount of up to $125 million payable on or after August 6, 2025.
While OMH intends to pay its minimum quarterly dividend, currently $1.04 per share, for the foreseeable future, all subsequent dividends will be reviewed and declared at the discretion of the Board and will depend on many factors, including our financial condition, earnings, cash flows, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends, and other considerations that the Board deems relevant. OMH's dividend payments may change from time to time, and the Board may choose not to continue to declare dividends in the future. See our "Dividend Policy" in Part II - Item 5 included in our Annual Report for further information.
Whole Loan Sale Transactions
We have whole loan sale flow agreements with third parties, with current terms of less than one year, in which we agreed to sell a remaining total of $450 million gross receivables of newly originated unsecured personal loans along with any associated accrued interest.
During the three and six months ended June 30, 2025, we sold a total of $260 million and $514 million of gross finance receivables, respectively, compared to $193 million and $303 million during the same periods in 2024. See Note 3 of the Notes to the Condensed Consolidated Financial Statements in this report for further information on the whole loan sale transactions.
LIQUIDITY
OMH's Operating Activities
Net cash provided by operations of $1.4 billion for the six months ended June 30, 2025 reflected net income of $380 million, the impact of non-cash items including provision for finance receivable losses of $967 million, and an unfavorable change in working capital of $58 million. Net cash provided by operations of $1.3 billion for the six months ended June 30, 2024 reflected net income of $225 million, the impact of non-cash items including provision for finance receivable losses of $1.0 billion, and an unfavorable change in working capital of $101 million.
OMH's Investing Activities
Net cash used for investing activities of $1.3 billion for the six months ended June 30, 2025 was due to net principal originations and purchases of finance receivables and purchases of available-for-sale and other securities, partially offset by the proceeds from sales of finance receivables and calls, sales, and maturities of available-for-sale and other securities. Net cash used for investing activities of $1.2 billion for the six months ended June 30, 2024 was due to net principal originations purchases of finance receivables and purchases of available-for-sale and other securities, partially offset by the proceeds from sales of finance receivables and calls, sales, and maturities of available-for-sale and other securities.
OMH's Financing Activities
Net cash provided by financing activities of $274 million for the six months ended June 30, 2025 was due to the issuances and borrowings of long-term debt, partially offset by repayments and repurchases of long-term debt and cash dividends paid. Net cash used for financing activities of $290 million for the six months ended June 30, 2024 was due to repayments and repurchases of long-term debt and cash dividends paid, partially offset by the issuances and borrowings of long-term debt.
OMH's Cash and Investments
At June 30, 2025, we had $769 million of cash and cash equivalents, which included $185 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that is unavailable for general corporate purposes.
At June 30, 2025, we had $1.7 billion of investment securities, which are all held as part of our insurance operations and are unavailable for general corporate purposes.
Liquidity Risks and Strategies
OMFC's credit ratings are non-investment grade, which has a significant impact on our cost and access to capital. This, in turn, can negatively affect our ability to manage our liquidity and our ability or cost to refinance our indebtedness. There are numerous risks to our financial results, liquidity, capital raising, and debt refinancing plans, some of which may not be quantified in our current liquidity forecasts. These risks are further described in our "Liquidity and Capital Resources" of Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II - Item 7 included in our Annual Report.
The principal factors that could decrease our liquidity are customer delinquencies and defaults, a decline in customer prepayments, rising interest rates, and a prolonged inability to adequately access capital market funding. We intend to support our liquidity position by utilizing strategies that are further described in our "Liquidity and Capital Resources" of Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II - Item 7 included in our Annual Report. However, it is possible that the actual outcome of one or more of our plans could be materially different than expected or that one or more of our significant judgments or estimates could prove to be materially incorrect.
OUR INSURANCE SUBSIDIARIES
Our insurance subsidiaries are subject to state regulations that limit their ability to pay dividends. AHL and Triton did not pay dividends during the six months ended June 30, 2025 and 2024. See Note 11 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report for further information on these state restrictions and the dividends paid by our insurance subsidiaries in 2024.
OUR DEBT AGREEMENTS
The debt agreements which OMFC and its subsidiaries are a party to include customary terms and conditions, including covenants and representations and warranties. See Note 9 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report for more information on the restrictive covenants under OMFC's debt agreements, as well as the guarantees of OMFC's long-term debt.
Securitized Borrowings
We execute private securitizations under Rule 144A of the Securities Act of 1933, as amended. As of June 30, 2025, our structured financings consisted of the following:
(dollars in millions) Issue Amount (a) Initial Collateral Balance Current
Note Amounts
Outstanding (a)
Current Collateral Balance (b)
Current
Weighted Average
Interest Rate 		Original
Revolving
Period
OMFIT 2019-2 900 947 900 995 3.30 % 7 years
OMFIT 2019-A 789 892 750 892 3.78 % 7 years
OMFIT 2020-2 1,000 1,053 1,000 1,053 2.03 % 5 years
OMFIT 2021-1 850 904 850 904 2.57 % 5 years
OMFIT 2022-S1 600 652 539 558 4.33 % 3 years
OMFIT 2022-2 1,000 1,099 594 692 5.37 % 2 years
OMFIT 2022-3 979 1,090 517 810 6.03 % 2 years
OMFIT 2023-1 825 920 825 920 5.82 % 5 years
OMFIT 2023-2 1,400 1,566 1,400 1,566 6.11 % 3 years
OMFIT 2024-1 1,100 1,222 1,100 1,222 5.99 % 7 years
OMFIT 2025-1 1,000 1,124 1,000 1,124 4.97 % 3 years
ODART 2019-1 737 750 276 309 4.04 % 5 years
ODART 2021-1 1,000 1,053 314 322 1.22 % 2 years
ODART 2022-1 600 632 308 314 5.10 % 2 years
ODART 2023-1 750 792 750 792 5.63 % 3 years
ODART 2025-1 900 926 900 926 5.48 % 5 years
FCRT 2022-1 293 294 54 52 3.27 % N/A
FCRT 2022-2 215 233 38 57 6.35 % N/A
FCRT 2023-1 182 199 57 74 6.06 % N/A
FCRT 2023-2 200 208 88 93 6.61 % N/A
FCRT 2024-1 210 214 112 116 6.23 % N/A
Total securitizations $ 15,530 $ 16,770 $ 12,372 $ 13,791
(a) Issue Amount includes the retained interest amounts as applicable and the Current Note Amounts Outstanding balances reflect pay-downs subsequent to note issuance and exclude retained interest amounts.
(b) Inclusive of in-process replenishments of collateral for securitized borrowings in a revolving status as of June 30, 2025.
Revolving Conduit Facilities
We had access to 17 revolving conduit facilities with a total borrowing capacity of $6.0 billion as of June 30, 2025:
(dollars in millions) Advance Maximum Balance Amount
Drawn
OneMain Financial Funding VII, LLC $ 600 $ -
OneMain Financial Auto Funding I, LLC 550 -
Hudson River Funding, LLC 500 -
OneMain Financial Funding XI, LLC 425 -
OneMain Financial Funding VIII, LLC 400 -
River Thames Funding, LLC 400 -
OneMain Financial Funding X, LLC 400 -
OneMain Financial Funding XII, LLC 400 -
Mystic River Funding, LLC 350 -
Thayer Brook Funding, LLC 350 1
Columbia River Funding, LLC 350 -
Hubbard River Funding, LLC 250 -
New River Funding Trust 250 -
St. Lawrence River Funding, LLC 250 -
OneMain Foursight Auto I, LLC 175 -
OneMain Foursight Auto II, LLC 175 -
OneMain Foursight Auto III, LLC 175 -
Total $ 6,000 $ 1
Credit Card Revolving VFN Facilities
We also had access to two credit card revolving VFN facilities with a total borrowing capacity of $400 million as of June 30, 2025:
(dollars in millions) Advance Maximum Balance Amount
Drawn
OneMain Financial Credit Card Trust - Series 2024-VFN1 $ 150 $ -
OneMain Financial Credit Card Trust - Series 2024-VFN2 250 -
Total
$ 400 $ -
OFF-BALANCE SHEET ARRANGEMENTS
We have no material off-balance sheet arrangements as defined by SEC rules, and we had no material off-balance sheet exposure to losses associated with unconsolidated VIEs at June 30, 2025 or December 31, 2024.
Critical Accounting Policies and Estimates
We describe our significant accounting policies used in the preparation of our condensed consolidated financial statements in Note 2 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report. We consider the allowance for finance receivable losses to be a critical accounting policy because it involves critical accounting estimates and a significant degree of management judgment.
There have been no material changes to our critical accounting policies or to our methodologies for deriving critical accounting estimates during the six months ended June 30, 2025.
Recent Accounting Pronouncements
See Note 2 of the Notes to the Condensed Consolidated Financial Statements included in this report for discussion of recently issued accounting pronouncements.
Seasonality
Our consumer loan volume and demand are generally lowest during the first quarter of the year following the holiday season and as a result of tax refunds, and then increases through the end of the year. Delinquencies follow similar trends, being generally lower during the first quarter of the year and rising throughout the remainder of the year. These seasonal trends contribute to fluctuations in our operating results and cash needs throughout the year.
OneMain Holdings Inc. published this content on July 29, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on July 29, 2025 at 10:31 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]