OneMain Q2 Earnings Call Highlights

Key Points

• OneMain delivered portfolio growth in Q2 2026: Originations rose 10% year over year to $4.3 billion, managed receivables increased 7% to $26.9 billion and revenue grew 6% to $1.6 billion. GAAP earnings declined to $1.32 per diluted share from $1.40 a year earlier, largely due to higher loss provisions.
• Credit trends improved sequentially, supporting management’s expectation that losses will decline in the second half of 2026 and into 2027. However, net charge-offs remained above year-ago levels, and reserves increased to 11.6% of net receivables.
• Auto finance and credit cards continued to expand rapidly: Auto originations grew 19%, while credit card accounts increased 44% year over year and credit card charge-offs improved. OneMain maintained its full-year guidance, including 6%–9% managed receivables growth and C&I net charge-offs of 7.4%–7.9%.

OneMain NYSE: OMF reported second-quarter 2026 results marked by receivables and originations growth, improving early-stage delinquency trends and continued investment in its auto finance, credit card and technology initiatives.

Chairman and Chief Executive Officer Doug Shulman said the company generated 10% year-over-year growth in originations, supporting managed receivables growth of 7%. He said OneMain maintained a conservative underwriting posture while expanding products and improving the customer experience.

“Credit performance was good and tracked in line with our expectations, and early delinquency trends continued to improve,” Shulman said.

Second-Quarter Results and Portfolio Growth

OneMain reported GAAP net income of $152 million, or $1.32 per diluted share, compared with $1.40 per diluted share in the second quarter of 2025. C&I adjusted net income was $1.31 per diluted share, down from $1.45 a year earlier.

Chief Financial Officer Jenny Osterhout said higher revenue during the quarter was offset by higher provisions for losses, primarily reflecting a larger reserve build tied to stronger receivables growth. Capital generation, the company’s principal management metric, rose 3% year over year to $229 million.

• Managed receivables ended the quarter at $26.9 billion, up $1.6 billion, or 7%, from a year earlier.
• Quarterly originations totaled $4.3 billion, up 10% year over year.
• Total revenue increased 6% to $1.6 billion.
• Interest income rose 6% to $1.4 billion, while other revenue increased 6% to $207 million.
• Operating expenses rose 6% to $439 million, with the operating-expense ratio flat year over year at 6.7%.

Consumer loan yield was 22.7%, up 16 basis points sequentially and 11 basis points from a year earlier. Osterhout said the company expects consumer loan yield to remain around recent levels, with typical seasonal moderation in the second half of the year.

Credit Trends Point to Lower Losses

Management highlighted improving delinquency trends as a basis for its expectation that losses will decline in the second half of 2026 and continue improving in 2027.

Thirty- to 89-day delinquency, excluding Foresight, was 2.82% at June 30, down 7 basis points from a year earlier. The company said its 30-plus delinquency rate excluding Foresight declined 4 basis points year over year to 5.03%, while 90-plus delinquency was 3 basis points above the prior-year level, an improvement from the 14-basis-point year-over-year increase recorded in the first quarter.

Second-quarter C&I net charge-offs were 8.2%, down 21 basis points sequentially but 63 basis points above the prior-year quarter. Consumer loan net charge-offs, excluding credit cards, were 7.8%, down 25 basis points sequentially and up 58 basis points from a year earlier.

Osterhout said the year-over-year increase in consumer loan losses was expected and stemmed largely from elevated 90-plus delinquency in the prior quarter rolling through to losses. She said improving late-stage delinquency and early-stage trends provide confidence that losses will improve substantially in the back half of the year.

Recoveries totaled $117 million, or 1.9% of average net receivables. During the question-and-answer session, Osterhout said approximately 20% of recoveries came from loan sales, with the remainder generated through internal recovery efforts. She attributed the results to investments in collection capabilities, additional charged-off loan inventory and sales to partners when economics were attractive.

Loan loss reserves ended the quarter at $2.9 billion, or 11.6% of net receivables, compared with 11.5% in the prior quarter. Osterhout said the increase reflected portfolio mix, particularly the growing credit card business, which carries a reserve rate nearly twice that of the consumer loan portfolio. She said the overall reserve ratio could rise to around 11.7% in the second half.

Auto Finance and Credit Cards Continue to Expand

OneMain surpassed 4 million customer accounts during the quarter, an increase of 14% from a year earlier. Shulman said account growth was aided by auto finance and credit cards, along with product innovation in personal lending.

Auto finance originations increased 19% from a year earlier, while auto finance receivables reached $3 billion, up 14%. Management said expansion of the dealer network, underwriting enhancements and partnerships supported growth, while credit performance remained in line with expectations and outperformed the broader industry.

The credit card business also expanded rapidly. Credit card receivables reached $161 million, while customer accounts rose to 1.3 million, up 155,000 sequentially and more than 400,000 from a year earlier. Osterhout said accounts increased 44% year over year and purchase volume increased 57%, supported by new rewards options and enhancements to the BrightWay card offering.

Credit card net charge-offs declined 186 basis points year over year to 17.7%, and 30-plus delinquencies fell 146 basis points. Shulman said marginal operating costs per account declined about 25% year over year as the business scaled.

In personal loans, OneMain cited progress with its enhanced debt-consolidation offering and newer home-fixture secured product. Shulman said the debt-consolidation initiative includes outbound marketing, streamlined offer creation and improved direct-payoff systems. The company said most debt-consolidation customers improve their credit scores, while the majority of these loans are secured and carry lower losses than the overall personal loan portfolio.

Funding, Capital Returns and Outlook

During the quarter, OneMain issued a $1.1 billion three-year revolving asset-backed security at pricing of about 5.1%. The company ended the period with $7.5 billion in bank lines and net leverage of 5.5 times, within its targeted 4-times-to-6-times range.

OneMain repurchased 576,000 shares for $32 million in the second quarter. First-half repurchases totaled $137 million, including 2.5 million shares, more than three times the amount repurchased in the first half of 2025. The company’s annualized regular dividend was $4.20 per share.

Shulman said share repurchases would remain dependent on business capital needs, market conditions and other strategic opportunities. He said the company will first invest in loans that meet its 20% return-on-equity threshold and maintain its dividend before allocating remaining capital to buybacks or other uses.

The company reiterated its full-year 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%.

Management said OneMain has not changed its underwriting standards despite the improved credit outlook. Shulman said the company continues to apply a 30% stress overlay introduced in 2022 and that its “weather vane” testing has not yet met the company’s 20% return-on-equity threshold for expanding its credit box.

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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