OneMain Holdings, Inc.

Please stand by your program is about to begin. If you need assistance on today's program, please press star zero. Welcome to the one main financial fourth quarter 2024 earnings conference call and webcast. Hosting the call today from one main 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 telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. We do ask that you limit yourself to one question and one follow-up and please pick up your handset to allow for 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, Operator. Good morning, everyone, and thank you for joining us. Let me begin by directing you to page two of the fourth quarter 2024 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 the OneMain 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. 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, January 31st, and have not been updated subsequent to this call. Our call this morning will include formal remarks from Doug Shulman, our Chairman and Chief Executive Officer, and Jenny Osterhout, our Chief Financial Officer. After the conclusion of our formal remarks, we will conduct a question and answer session. I'd like to now turn the call over to Doug.

Thanks, Pete, and good morning, everyone. Thank you for joining us today. In 2024, we made significant progress in our personal loan business, as well as our new products, credit card and auto lending, setting us up to drive growth in both receivables and capital generation. During the year, we continued to focus on helping our customers improve their financial well-being and finding opportunities to lend even as we keep a very tight credit box. We also completed our acquisition of Foresight, bringing new capabilities to our auto lending business, continued the build-out of our Brightway credit cards, proactively managed expenses, and further refined our best-in-class data science and analytics. The result was steady improvement in credit, solid growth in originations, and a customer base that grew 15% to 3.4 million customers. Here are some highlights from the year. In 2024, we generated $685 million of capital, despite incurring peak loan losses at the beginning of the year, demonstrating the incredibly strong and resilient business model of OneMain. We expect that 2024 represented a cyclical low in earnings and will be followed by an upward trajectory in earnings and capital generation in 2025 and beyond. I'm very pleased that we met or exceeded all of the 2024 expectations that we laid out for investors at the beginning of the year. This was the result of our personalized approach that allows us to stay very close to our customers, active credit management, disciplined focus on expenses, and strategic investment in the business. For the full year, our receivables grew 11% to $24.7 billion. Some of the factors contributing to this were the growth of the auto business, including our acquisition, a positive competitive environment, focused initiatives to help improve personal loan originations without changing our conservative credit posture, and growth in the Brightway credit cards. In our personal loan business, we continued to invest in data science, new data sources, and credit models to even further enhance our best-in-class underwriting capability. We invested in our technology and branch network, refining the way we interact with customers to increase efficiency and enhance customer experience. And we launched new products and channels, including credit card to loan cross-marketing in our mobile app, loan payments linked to paychecks, and a new debt consolidation offering. We fully integrated our auto acquisition, giving us new capabilities in auto lending. We entered 2025 well-positioned to compete through both franchise and independent dealerships. We grew our credit card portfolio to about 780,000 accounts. While being cautious in our growth, we've been highly focused on continuously improving the user experience to make sure our customers have access to a differentiated, highly digital card product, while we also continue to drive operating efficiencies. In 2024, we continue to demonstrate our incredibly strong balance sheet and funding programs. We raised $3.9 billion in funding, including $2.4 billion in high-yield bond issuances and $1.1 billion in seven-year secure funding. We also expanded our whole loan sale program and renewed multiple bank lines and our corporate revolver. Our diversified funding program ensures we have significant excess liquidity and continues to be a strategic differentiator of OneMain. We also focused on helping our customers manage their financial wellness and on supporting the communities where we live and work. Trim by OneMain, our financial wellness platform that helps customers save money on household bills and manage everyday expenses, continued to help our customers improve their financial well-being. TRIM is free to OneMain customers and has saved them millions of dollars through bill negotiations and subscription cancellations. Credit worthy by OneMain, our financial education program for high school students reached more than 400,000 students in more than 4,000 high schools across the country. with many of our team members volunteering and engaging with students throughout the year. I mention Trim and Creditworthy because they illustrate the kind of company that we are. Recently, OneMain was recognized both in the Newsweek Excellence Index and in Time Magazine America's Best Midsize Companies list. for various aspects of business excellence, including growth and innovation, employee satisfaction, and ethical practices. I only named a few, but I'm proud of all of our accomplishments in 2024 and believe the future has never been brighter for one Maine. Let me now turn to the results of the fourth quarter. Capital generation was $183 million, and C&I adjusted earnings were $1.16 per share. Our receivables grew 11% year over year, and total revenue grew 9%. Despite our continued conservative underwriting posture, for the second consecutive quarter, originations grew double digits year over year. The strong origination growth is a result of the constructive competitive environment throughout most of 2024 and our expanded use of granular data analytics and product innovation to opportunistically drive growth. Turning to credit, the positive trends that we saw in the third quarter have continued into year end. Our 30 to 89 delinquency was 3.06%, which is down 22 basis points year over year compared to up 21 basis points a year ago. We're also seeing better-than-normal seasonal trends in the quarter-over-quarter movements. Delinquency was up only five basis points from last quarter. Last year, it was up 30 basis points in the same quarter, and pre-pandemic, it was up 13 basis points on average. So we liked the trends that we are seeing. Net charge-offs were 7.9% in the quarter, up 36 basis points from last quarter, which is much better than the trends we have seen the last two years, and also better than normal seasonal trends we saw pre-pandemic. And consumer loan net charge-offs were 7.6%, which is down seven basis points year over year. These positive credit trends in both delinquencies and charge-offs reinforce our view that losses in our consumer loan portfolio peaked in the first half of 2024. Moving to our newer products, One main auto receivables increased $105 million in the quarter to $2.4 billion at year end. The credit performance in auto remains in line with our expectations and better than comparable industry performance. In our credit card business, we added $93 million in receivables during the quarter and ended the year with receivables totaling $643 million. We continue to focus on building the foundations of a great card business, which we will grow when the time is right. Let me touch on capital allocation, where our priorities are unchanged. First and foremost, we invest in the business to position us for ongoing success. In 2025, we will continue to invest in growth data science, technology and digital innovation, enhanced loan products, as well as our auto and credit card businesses. We're also committed to our regular dividend, which at $4.16 per share annually yields about 7% at today's share price. During the year, we repurchased about 755,000 shares for approximately $35 million. We will pace our future share repurchases based on a number of factors, including our excess capital, capital needed for growth, economic conditions, and market dynamics. As we turn to 2025, we feel great about all of the key drivers of our business. We continue to serve more customers and grow receivables as we enhance our personal loan business and add new products. We have actively managed credit through a tricky economic environment the past several years and expect to see continued improvements into 2025. Our balance sheet is as strong and diversified as it has ever been and we continue to invest in the business while being disciplined in expense management. Barring any shifts in the macroeconomic environment, we expect to see increased earnings and capital generation in 2025 and beyond. With that, let me turn the call over to Jenny.