OneMain Holdings, Inc.

please stand by your program is about to begin if you need assistance on today's conference please press star zero welcome to the one main financial first quarter 2025 earnings conference call and webcast hosting the call today from one main is peter poyon 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 Poyan. 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 first quarter 2025 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 one main 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 the 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, April 29th, 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. Good morning, everyone, and thank you for joining us today. We feel great about the results in the first quarter, especially the continued positive credit trends. The decisive actions that we took to tighten our underwriting, optimize pricing, and find opportunities for growth without loosening our credit box are now showing up in the bottom line. and have put us on an upward trajectory of capital generation and earnings. We remain confident in our ability to execute on the 2025 financial objectives that we laid out at the beginning of the year. We are operating from a position of strength. Like every company, we are operating in an uncertain and rapidly evolving macroeconomic environment. However, as you know, We've been underwriting loans over the past few years with an extra stress cushion, and we feel very well positioned today, given our experienced team, resilient business model, fortress balance sheet, credit expertise, and long experience serving the non-prime consumer. We also continue to make excellent progress on our strategic initiatives, which is positioning us well for long-term profitable growth. Let me provide a few of the highlights of the quarter. Capital generation of $194 million was up 25% year over year. C&I adjusted earnings were $1.72 per share, up 19%. Our receivables grew 12% year over year, and total revenue grew 10%. Originations grew 20% or 13% on an organic basis. We continue to acquire high-quality customers at attractive pricing, even as we maintain the same conservative underwriting posture that we've had over the past two and a half years. The strong originations are a result of the continued constructive competitive environment and our expanded use of granular data and analytics, as well as product innovation, to opportunistically drive growth. Turning to credit, the positive trends in delinquencies that we saw emerge in 2024 have continued. And those trends are resulting in lower net charge-offs. Our 30-plus delinquency was 5.08%, which is down 49 basis points year over year, as compared to up 28 basis points at this time last year. C&I net charge-offs were 8.2% in the quarter, down 49 basis points compared to the first quarter last year. and consumer loan net charge-offs were 7.8%, down 75 basis points year over year. These results reinforce our view that we are coming down from peak losses in 2024 and have a lot of tailwinds behind us. We now provide access to credit to over 3.4 million customers, That's up 14% from a year ago. A substantial portion of that growth is attributable to our Brightway credit cards and one main auto. We view these products as important to our future growth strategies as we acquire and engage our customers across our multi-product platform. In our credit card business, we ended the period with $676 million of card receivables. While we've been measured in our credit card growth, given the uncertain market conditions, we remain focused on building a resilient and profitable business for the long term that provides great value to our customers and attractive returns for our shareholders. In our auto finance business, We ended the quarter with $2.5 billion of receivables. Credit performance remains in line with expectations and better than comparable industry performance. We continue to drive efficiencies between our legacy independent dealer business and newer franchise dealer business as we build a world-class auto finance platform for the future. Similar to personal loans, our underwriting posture in credit cards and auto remains conservative. That said, we continue to invest in these businesses for the future, as we are quite confident that these products are attractive to the consumers that we serve. We're prepared to ramp growth at the appropriate time. Let me talk for a couple minutes about the recent uncertainty caused by trade policy. I obviously don't know the final outcome of tariff negotiations, nor do I know the second-order effects on economic growth, employment, inflation, or interest rates. What I do know is that, to date, we are not seeing any weakness in the consumers that we serve and that I believe we are uniquely positioned to manage during these uncertain times. We have one of the strongest and most diversified balance sheets in the industry. We maintain 24 months of liquidity runway at any given time. Even if we keep the current pace of originations, we have already pre-funded much of what we need for the year, leaving us a lot of flexibility in terms of how and when we fund. For the rest of the year, we have multiple options, including issuing unsecured debt, issuing abs or should we need to drawing from our 7.5 billion dollars of available bank lines and we expect our interest expense to stay within a tight range since we have set up our debt stack with fixed rate long-dated staggered maturities from a credit perspective For almost three years, we've been applying an additional 30% stress assumption to our credit models on top of the stress that we've already seen in the past few years. This means that if the losses on the loans we originated since the summer of 2022 saw 30% stress, we would still clear our 20% return on equity hurdles. stated another way, even if we see increases in inflation or unemployment, we have built-in cushion for our book to remain very profitable. We have a lot of experience managing our business in uncertain times. We're maintaining our already conservative credit posture and are very alert to any changes we see in our customer behavior. I feel confident that our team and business model, balance sheet, credit expertise, and experience serving the non-prime customer positions us very well to manage anything that comes our way. We've also been making progress on long-term strategic options. Let me spend a moment discussing our recent application to the Utah Department of Financial Institutions and the FDIC to form one main bank, an industrial loan company, typically referred to as an ILC. First, I want to be clear that if our application is not approved, we feel very confident in the current business plan that we laid out at our investor day and are executing on now. It would be great If we got an ILC, but it is not necessary for the success of one main. If approved, the ILC would be a small subsidiary of one main financial. It would not affect our capital allocation strategy because with an ILC, our parent company would not become a bank holding company. There's real strategic value in a subsidiary industrial bank. because it would allow us to provide access to credit to more customers and drive capital generation. It would also allow us to diversify funding, simplify our operating model, and drive some operating efficiencies in our credit card business. In terms of timing, While we believe we're uniquely qualified for approval, there's no guarantee that our application will be granted, and it's difficult to say how long the process might take. Let me close on capital allocation, where our priorities are unchanged. We continue to focus on the long-term success of our business, including strategically investing in our expanded product set, data science, and digital innovation, as well as profitable growth. Our regular annual dividend of $4.16 per share yields about 9% at today's share price. We repurchased 323,000 shares for approximately $16 million during the first quarter. We will continue to pace our repurchases based on a number of factors, including excess capital available, economic conditions, and market dynamics. With that, let me turn the call over to Jenny.