OneMain Q1 Earnings Call Highlights

Key Points

• OneMain posted a strong start to 2026 with GAAP EPS of $1.93, managed receivables of $26.1 billion (up 6% YoY), total revenue up 6%, and $194 million of capital generation in the quarter.
• Credit metrics were broadly stable: 30–89 day delinquency was 2.62% (down 1 bp YoY, with a 48 bp sequential improvement), C&I net charge-offs were seasonally elevated at 8.4%, and management reiterated full‑year C&I net charge‑off guidance of 7.4%–7.9%.
• The company is scaling new businesses and capital actions — credit card receivables rose ~45% to just under $1 billion and the card business is now profitable, funding was strengthened via an $850 million ABS issuance, net leverage was 5.4x, and management favors incremental capital returns through share repurchases alongside a $4.20 annual dividend.

OneMain NYSE: OMF reported what management described as a strong start to 2026, with first-quarter results that company leaders said were in line with expectations as receivables and revenue rose and credit metrics remained stable. Chairman and CEO Doug Shulman told investors the company was “quite pleased with the financial results of the quarter,” adding that OneMain’s customers “remain resilient” and that the company is confident in its ability to execute its 2026 financial objectives while maintaining “a conservative underwriting posture.”

Quarterly performance and capital generation

Shulman said capital generation totaled $194 million during the quarter. CFO Jenny Osterhout reported GAAP net income per diluted share of $1.93, up from $1.78 in the first quarter of 2025, while C&I adjusted net income per diluted share was $1.95, up from $1.72 a year earlier.

Managed receivables ended the quarter at $26.1 billion, up $1.5 billion, or 6%, year-over-year. Osterhout said originations were $3.1 billion, a 3% increase from the prior-year quarter. Total revenue was $1.6 billion, up 6% compared to the first quarter of 2025, with interest income of $1.4 billion also up 6% on receivables growth and yield improvements. Other revenue of $198 million increased 4%, which Osterhout attributed primarily to higher servicing fees on a growing third-party serviced portfolio and higher credit card revenue as the card business scales.

Credit trends: delinquencies, losses, and recoveries

Management said credit performance tracked expectations. Shulman noted 30-89 day delinquency declined year-over-year, reversing what he described as “last quarter’s slight increase,” and said quarter-over-quarter improvement was “better than last year and better than the pre-pandemic average.”

Osterhout reported 30-89 day delinquency (excluding Foresight) at 2.62% as of March 31, down 1 basis point from a year earlier, and said the sequential improvement was 48 basis points, compared with 43 basis points last year and in the pre-pandemic benchmark period.

Net charge-offs were seasonally elevated, executives said. Shulman reported C&I net charge-offs of 8.4%, and consumer loan net charge-offs (excluding credit cards) of 8.0%, both described as in line with expectations. Osterhout said first-quarter provision expense was $465 million, made up of net charge-offs of $512 million and a $47 million decrease in reserves tied to a seasonal sequential decline in receivables. The loan loss reserve ratio was 11.5%, flat year-over-year and sequentially.

Osterhout also highlighted stronger recoveries, which rose 18% year-over-year to $104 million, with recoveries as a percentage of receivables increasing to 1.7% from 1.5% a year earlier. She said the increase was “largely due to continued enhancements to our internal recovery strategies,” while noting that bulk sales of charged-off loans were “slightly less than prior year.”

On portfolio dynamics, Osterhout said the “back book,” representing about 5% of the portfolio, still accounted for 14% of 30+ delinquencies, a larger impact than typically expected for older vintages. In response to analyst questions, she said those loans were going delinquent at roughly “a 2x higher rate than we would have expected,” and added that as loans “burn off” over time and as newer vintages enter the book, management expects performance to move closer to historical ranges.

For 2026, Osterhout reiterated guidance for full-year C&I net charge-offs of 7.4% to 7.9%, saying seasonal patterns should drive losses down in the second half following improvements in early delinquencies. She also said the growing credit card portfolio, which has “higher yields and higher loss content,” would continue to pressure overall losses as it scales.

Business highlights: personal loans, auto finance, and credit cards

Shulman said receivables growth was supported by initiatives aimed at “high-quality personal loan originations” as well as contributions from newer businesses in auto finance and credit cards.

• Personal loans: Shulman said OneMain continues to refine its debt consolidation offering to make the experience more seamless, describing customer benefits such as a single amortizing monthly payment and noting that “in a majority of the cases” customer credit scores improved, alongside better credit performance for OneMain. He also cited an “uptick” in customers choosing to share bank data, which he said can support better terms, improved credit outcomes, and enhanced models. Shulman added that a pilot for a home fixture secured loan product was “performing very well,” attracting “high-quality customers.”
• Auto finance: Shulman reported auto receivables grew 14% year-over-year to $2.8 billion, with credit performance “in line with expectations” and continuing to outperform the broader industry. He said the company expanded its dealer network, including through its partnership with Ally. Shulman also said OneMain began piloting an “agentic AI tool” to automate negotiations with insurers on damaged vehicles, with initial results exceeding expectations in improving insurance recovery outcomes.
• Credit cards: Shulman said credit card receivables increased 45% year-over-year to just under $1 billion, with customer accounts up 40% to nearly 1.2 million. He pointed to increased yields, improving loss trends, and lower unit costs. Osterhout said that in April, OneMain crossed $1 billion in card receivables, calling it a milestone in scaling the BrightWay card product.

On credit cards specifically, Osterhout told analysts the card business is now profitable and said that, for the non-prime consumer, credit cards can offer a “similar or slightly higher return profile” compared to personal loans. She pointed to revenue yields in the low 30s and discussed a longer-term view of credit performance “coming in closer to a 15%-17% range,” while emphasizing a focus on unit operating expenses as the business scales.

Funding, expenses, and capital allocation

Osterhout described funding as a highlight, saying OneMain strengthened its balance sheet and accessed markets favorably. She noted that in early March, the company issued an $850 million three-year revolving ABS at 4.63%, which she said reflected strong demand despite “escalating geopolitical tensions and market uncertainty.” Osterhout added that steps taken last year to reduce secured funding mix and address near-term maturities helped reduce interest expense and increased flexibility for 2026 issuance. Bank lines totaled $7.5 billion, unchanged from the prior quarter, and net leverage ended the quarter at 5.4x, within the company’s 4-6x target range.

On profitability drivers, Osterhout said interest expense was $322 million, up 4% year-over-year on higher average debt, while interest expense as a percentage of average net receivables was 5.3%, down from 5.4% in the prior-year quarter. She said the company expects funding costs to remain around current levels throughout 2026.

Operating expenses were $437 million, up 9% from a year earlier, which Osterhout said was driven by investments in newer products and solutions and in data and technology. The operating expense ratio was 6.8% in the quarter; Osterhout said the company remained confident in full-year guidance of approximately 6.6% as expense growth moderates and receivables grow.

Shulman reiterated that capital allocation priorities start with extending credit that meets risk-adjusted returns and investing in the business. He cited the company’s regular dividend of $4.20 per share annually, which he said represented a 7% yield at the share price at the time of the call. Both Shulman and Osterhout said the company expects incremental capital returns to be weighted more toward share repurchases going forward. OneMain repurchased 1.9 million shares for $105 million in the first quarter, after repurchasing a combined 3.1 million shares for $176 million over the last two quarters.

Regulatory and legal updates, and outlook

Asked about the company’s bank application, Shulman said there were “no updates this quarter,” with timing uncertain, but added OneMain remains optimistic and is having “constructive dialogues with the FDIC and the Utah Department of Financial Institutions.”

On a state attorneys general lawsuit filed in March, Shulman said the company’s position is that the claims are “untrue” and “have no merit,” arguing the states are attempting to relitigate issues previously reviewed and resolved with the CFPB. He said OneMain is “happy to go to court on this” and does not view the matter as material to the business.

Management reiterated its 2026 guidance, including managed receivables growth of 6% to 9%, C&I net charge-offs of 7.4% to 7.9%, and an operating expense ratio of approximately 6.6%. Shulman said the company remains cautious in underwriting amid uncertainty, pointing to geopolitical tensions and energy prices as a broader risk, while noting unemployment remains low. “We’re not seeing it show up in our numbers,” he said of weaker consumer sentiment.

Shulman also discussed OneMain’s approach to underwriting, saying the company maintains a conservative credit posture, including what he described as a “30% stress overlay” on modeled losses, and continues to make “adjustments every month” by customer, geography, and product type. He said current conditions did not change confidence in guidance, barring a major macroeconomic downturn.

About OneMain NYSE: OMF

OneMain Financial NYSE: OMF is a leading consumer finance company specializing in unsecured personal loans for middle-income customers. The company offers tailored loan products designed to address a variety of needs, including debt consolidation, home improvement financing, large purchases and emergency expenses. Through a combination of branch-based service and digital channels, OneMain aims to deliver a personalized borrowing experience with flexible repayment options and transparent terms.

Tracing its roots back to the Commercial Credit Company founded in 1912, OneMain has evolved through a series of mergers and corporate transformations.

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