OneMain Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Today's conference is scheduled to begin momentarily. Until that time, you will again be placed on music loans. Thank you. Welcome to OneMain Financial second quarter 2021 earnings conference call and webcast. Hosting the call today from OneMain is Peter Pullian, head of Investor Relations. Today's call is being recorded. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. We do ask that you limit yourself to one question and one follow-up, and please pick up your handset to allow optimal sound quality. Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn the floor over to Peter Pullian. You may begin.

Thank you, Nicole. Good morning, everyone, and thank you for joining us. Let me begin by directing you to pages two and three of the second quarter 2021 investor presentation, which contains important disclosures concerning forward-looking statements and the use of non-GAAP measures. The presentation can be found in the investor relations section of our website. Our discussion today will contain certain forward-looking statements reflecting management's current beliefs about the company's future, financial performance, and business prospects. And these forward-looking statements are subject to inherent risks and uncertainties and speak only as of today. Factors that could cause actual results to differ materially from these forward-looking statements are set forth in our earnings press release and include the effects of the COVID-19 pandemic on our business, our customers, and the economy in general. We caution you not to place undue reliance on forward-looking statements. If you may be listening to this via replay at some point after today, we remind you that the remarks made herein are as of today, July 22nd, and have not been updated subsequent to this call. Our call this morning will include formal remarks from Doug Schulman, our Chairman and Chief Executive Officer, and Micah Conrad, our Chief Financial Officer. After the conclusion of our formal remarks, we will conduct a question and answer session. Now let me turn the call over to Doug.

Thanks, Peter, and good morning, everyone. We appreciate you joining us today. We'll spend the majority of our time on today's call covering our second quarter performance, but I will also spend time discussing some of the strategic initiatives underway that will allow us to continue to realize our mission of improving the financial well-being of hardworking Americans. Our second quarter performance demonstrates the resilience of our business model, as we saw strong loan originations in the latter half of the quarter, resulting in notable growth in receivables, as well as record low losses. Capital generation was strong in the quarter, and we remain well positioned for continued growth as the economic recovery continues. In the quarter, we generated $310 million of capital, $98 million more than the prior year, up 46%. CNI adjusted earnings for the quarter were $2.66 per share. Our credit performance remains very strong and continues to benefit from the proactive credit tightening actions that we implemented at the start of the pandemic. the unprecedented levels of government support over the past 15 months, and our robust underwriting capabilities. Second quarter losses were 4.4%, and we feel confident about the continuation of this excellent credit performance over the remainder of this year. Receivables, which we refer to as managed receivables in our presentation, grew 3% year over year and 4% sequentially. It's worth highlighting the growth in our loan book was higher than the overall near-prime installment loan market, which declined about 3% year over year. We believe our strong performance in comparison to the market is driven by our growth initiatives, including our continued product innovation, new channels, and advanced analytics across multiple functions within the company. Recall that in early 2020, as the pandemic began, we committed to working closely with our customers to help them through a difficult time. But we also said we would continue to stay focused on our longer-term initiatives that would position us for growth as the pandemic waned and the economy strengthened. we are now starting to see positive results from many of those initiatives. The economic and business trends we observed in the quarter were positive. Unemployment rates and jobless claims have started to normalize, and after a year of economic uncertainty driven by pandemic restrictions, a recession, and multiple government stimulus packages, we are now seeing consumer demand pick up. Recent Fed data shows personal consumption is up sharply since the start of the year. Importantly, demand for our product has rebounded to pre-pandemic levels. We saw originations improve each month of the quarter, with June activity resulting in a record high for the company. With that said, we will closely monitor economic conditions, including the potential for a The recent strong economic backdrop is positive for our current suite of products, but also for the products we expect to offer customers in the near future. Let me elaborate a bit on that. If you turn to slide seven of the presentation, I'd like to touch on the future vision that we discussed on this call last quarter because it is guiding our priorities and the actions we are taking at one main. Our vision is to be the lender of choice to near prime consumers, meeting their current needs when they have a mismatch between income and savings on the one hand and expenses on the other, while also providing products and services that help customers progress to a more promising financial future. We will leverage our foundational strengths to continue to be the leader in near prime installment lending. but we are also expanding our suite of products, services, and experiences to deepen our customer relationships, increase engagement, and enhance our proprietary data set, all of which will provide real value to customers and make it more likely that they will want to do business with us in the future. Over the past few quarters, we've discussed our plans to extend our product offering with the rollout of a differentiated, digitally-enabled credit card designed specifically for the near-prime consumer. I'm pleased to say that we remain on target to be in market later this year with the initial tests beginning in the next several months. As with our other product rollouts, we will be deliberate and run a pilot before a full rollout. The pilot will test uptake, line usage, and credit before scaling receivables in the latter part of 2022, with the expectation that our credit card will be a multibillion-dollar receivables product over the coming years. Once we get through the initial launch and testing, In addition to scaling the credit card, we also anticipate further expanding our lending products to include a hybrid product, which will combine characteristics of both card and loan solutions to provide even more financial flexibility for qualified customers. We're really excited about the future of our product set and the value that it will provide to customers. We also closed on the acquisition of Trim during the quarter. We are now in the integration process and look forward to offering the multitude of trim solutions to our current loan customers as we continue to focus on our mission of improving the financial well-being of hardworking Americans. Finally, as I mentioned earlier, the significant investments we are making in technology, new channels, new products, and digital capabilities continue to have a positive impact on our results. There is no doubt that the growth in receivables we reported this quarter would not have occurred without our innovations in product size and pricing, as well as our expanded digital channels. Before I turn the call over to Micah, I'd like to briefly comment on capital deployment. Consistent with our previously established framework of considering an enhanced dividend each first and third quarter and recognizing the strength and resilience of our business, we announced a third quarter enhanced dividend of $3.50 per share, which combined with our regular quarterly dividend of $0.70 per share, returns $4.20 per share to shareholders this quarter. In addition, as we discussed on our last call, we commenced a programmatic share repurchase program and bought back 612,000 shares for a total of $35 million during the second quarter. Using our capital allocation framework as a guide, we will continue to invest in loans that provide value to our customers and meet our risk return criteria. invest in the business to position us for the future, and return capital to shareholders. With that, let me turn the call over to Micah to take you through the financial detail of the second quarter.