Business Wire | Jul 27, 2020 04:30PM EDT

OneMain Holdings, Inc. Reports Second Quarter 2020 Results

Jul. 27, 2020

EVANSVILLE, Ind.--(BUSINESS WIRE)--Jul. 27, 2020--OneMain Holdings, Inc. (NYSE: OMF) today reported pretax income of $118 million and net income of $89 million for the second quarter of 2020, compared to $256 million and $194 million, respectively, in the prior year quarter. Earnings per diluted share were $0.66 in the second quarter of 2020, compared to $1.42 in the prior year quarter.

On July 27, 2020, OneMain declared a dividend of $2.33 per share payable on August 18, 2020 to record holders of the company's common stock as of the close of business on August 10, 2020. The company expects to maintain a minimum quarterly dividend of $0.33 per share going forward. Excess dividends above the minimum will be evaluated by the Board every first and third quarters, as is consistent with prior quarters and the company's capital allocation strategy.

"We continued our focus on serving customers and supporting our team members and communities during this public health and economic crisis," said Doug Shulman, President and CEO of OneMain. "The core strengths of our business - sophisticated underwriting, hybrid operating model, and strong balance sheet - have enabled us to effectively navigate the uncertain market conditions and drive solid financial results. We are confident that the proven flexibility in our business model will continue to serve our customers well and drive significant value over the long-term."

The following segment results are reported on a non-GAAP basis. Refer to the required reconciliations of non-GAAP to comparable GAAP measures at the end of this press release.

Consumer and Insurance Segment ("C&I")

C&I generated adjusted pretax income of $143 million and adjusted net income of $107 million for the second quarter of 2020, compared to $291 million and $221 million, respectively, in the prior year quarter. Adjusted earnings per diluted share were $0.80 for the second quarter of 2020, compared to $1.62 in the prior year quarter.

Management runs the business based on C&I adjusted net income excluding the change in loan loss reserves net of tax, which was $212 million for the second quarter of 2020 and represented a 6% decrease versus the prior year period. Management believes this reflects the capital generation of the business.

Originations totaled $2.0 billion in the second quarter of 2020, down 47% from $3.9 billion in the prior year quarter. The percentage of secured originations was 57% in the second quarter of 2020, up from 55% in the prior year quarter.

Ending net finance receivables reached $17.7 billion at June 30, 2020, up 4% from $17.0 billion in the prior year quarter. Secured receivables represented $780 million of the increase in ending net finance receivables from the prior year and were 53% of ending net finance receivables at June 30, 2020, up from 50% in the prior year quarter.

Average net finance receivables were $17.9 billion in the second quarter of 2020, up 8% from $16.6 billion in the prior year quarter.

Yield was 24.09% in the second quarter of 2020, down from 24.17% in the prior year quarter, generally reflecting lower late fee revenue.

Interest income in the second quarter of 2020 was $1.1 billion, up from $999 million in the prior year quarter, reflecting higher average receivables.

The provision for finance receivable losses was $422 million in the second quarter of 2020, up from $263 million in the prior year quarter, primarily due to the adoption of CECL and related changes in our macroeconomic outlook assumptions.

The 30-89 day delinquency ratio was 1.63% at June 30, 2020, down from 2.26% at March 31, 2020 and down from 2.15% at June 30, 2019.

The 90+ day delinquency ratio was 1.89% at June 30, 2020, down from 2.16% at March 31, 2020 and up from 1.72% at June 30, 2019.

The net charge-off ratio was 6.33% in the second quarter of 2020, down from 6.46% in the first quarter of 2020 and up from 6.20% in the prior year quarter.

Operating expense for the second quarter of 2020 was $297 million, down 7% from $319 million in the prior year quarter primarily related to lower variable expenses associated with lower originations.

Other

During the second quarter of 2020, Other generated an adjusted pretax loss of $1 million compared to $4 million in the prior year quarter. Other consists of our liquidating servicing activity from the SpringCastle Portfolio and our non-originating legacy operations, which includes primarily our liquidating real estate loans.

Funding and Liquidity

As of June 30, 2020, the company had principal debt balances outstanding of $18.3 billion, 43% of which was secured and 57% of which was unsecured. The company had $2.7 billion of cash and cash equivalents, which included $240 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that are unavailable for general corporate purposes.

Our cash and cash equivalents, together with our potential borrowings of $7.1 billion of undrawn committed capacity under our 14 revolving conduit facilities, and $8.7 billion of unencumbered personal loans, provides a liquidity runway through 2022 under numerous stress scenarios and assuming no access to the capital markets. This liquidity runway calculation contemplates all the cash needs of the Company.

Use of Non-GAAP Financial Measures

We report the operating results of Consumer and Insurance and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for certain costs, primarily interest expense and other expenses, to reflect the manner in which we assess our business results and (ii) excludes the impact of applying purchase accounting (eliminates premiums/discounts on our finance receivables and long-term debt at acquisition, as well as the amortization/accretion in future periods). Consumer and Insurance adjusted pretax income (loss), Consumer and Insurance adjusted net income (loss), Consumer and Insurance adjusted earnings (loss) per diluted share and Other adjusted pretax income (loss) are key performance measures used by management in evaluating the performance of our business. Consumer and Insurance adjusted pretax income (loss) and Other adjusted pretax income (loss) represent income (loss) before income taxes on a Segment Accounting Basis and excludes direct costs associated with COVID-19, net losses resulting from repurchases and repayments of debt, acquisition-related transaction and integration expenses, net gain on sale of cost method investment, restructuring charges, additional net gain on sale of Spring Castle interests, and net loss on sale of real estate loans. Management believes these non-GAAP financial measures are useful in assessing the profitability of our segment.

Management also uses pretax capital generation and capital generation, non-GAAP financial measures, as a key performance measure of our segment. Consumer and Insurance adjusted pretax income (loss) excluding loan loss reserves represents adjusted pretax income as discussed above and excludes the change in our allowance for finance receivable losses in the period while still considering the net charge-offs during the period. Management believes that these non-GAAP measures are useful in assessing the capital created in the period impacting the overall capital adequacy of the Company. Management believes that the Company's reserves, combined with its equity, represent the Company's loss absorption capacity.

Management utilizes these non-GAAP measures in evaluating our performance. Additionally, these non-GAAP measures are consistent with the performance goals established in OMH's executive compensation program. These non-GAAP financial measures should be considered supplemental to, but not as a substitute for or superior to, income (loss) before income taxes, net income, or other measures of financial performance prepared in accordance with GAAP.

Conference Call & Webcast Information

OneMain management will host a conference call and webcast to discuss our second quarter 2020 results and other general matters at 8:00 am Eastern Time on Tuesday, July 28, 2020. Both the call and webcast are open to the general public. The general public is invited to listen to the call by dialing 877-330-3668 (U.S. domestic) or 678-304-6859 (international), and using conference ID 2969328, or via a live audio webcast through the Investor Relations section of the website. For those unable to listen to the live broadcast, a replay will be available on our website, or by dialing 800-585-8367 (U.S. domestic) or 404-537-3406, and using conference ID 2969328, beginning approximately two hours after the event. The replay of the conference call will be available via audio webcast through August 12, 2020. An investor presentation will be available on the Investor Relations page of OneMain's website at https://www.omf.com prior to the start of the conference call.

This document contains summarized information concerning OneMain Holdings, Inc. (the "Company") and the Company's business, operations, financial performance and trends. No representation is made that the information in this document is complete. For additional financial, statistical and business related information see the Company's most recent Annual Report on Form 10-K ("Form 10-K") and Quarterly Reports on Form 10-Q ("Form 10-Qs") filed with the U.S. Securities and Exchange Commission (the "SEC"), as well as the Company's other reports filed with the SEC from time to time. Such reports are or will be available in the Investor Relations section of the Company's website ( https://www.omf.com) and the SEC's website ( http://www.sec.gov).

Cautionary Note Regarding Forward-Looking Statements

This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but instead represent only management's current beliefs regarding future events. By their nature, forward-looking statements are subject to risks, uncertainties, assumptions and other important factors that may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements. We caution you not to place undue reliance on these forward-looking statements that speak only as of the date on which they were made. We do not undertake any obligation to update or revise these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments or otherwise, except as required by law. Forward-looking statements include, without limitation, statements concerning future plans (including statements regarding the timing, declaration, amount and payment of any future dividends), objectives, goals, projections, strategies, events or performance, and underlying assumptions and other statements related thereto. Statements preceded by, followed by or that otherwise include the words "anticipates," "appears," "are likely," "believes," "estimates," "expects," "foresees," "intends," "plans," "projects" and similar expressions or future or conditional verbs such as "would," "should," "could," "may," or "will," are intended to identify forward-looking statements. Important factors that could cause actual results, performance or achievements to differ materially from those expressed in or implied by forward-looking statements include, without limitation, the following: adverse changes in general economic conditions, including the interest rate environment and the financial markets; risks associated with the COVID-19 pandemic and the mitigation efforts by governments to the pandemic and related effects on us, our customers, and employees; our estimates of the allowance for finance receivable losses may not be adequate to absorb actual losses, causing our provision for finance receivable losses to increase, which would adversely affect our results of operations; increased levels of unemployment and personal bankruptcies; a change in the proportion of secured loans may affect our personal loan receivables and portfolio yield; adverse changes in the rate at which we can collect or potentially sell our finance receivables portfolio; natural or accidental events such as earthquakes, hurricanes, tornadoes, fires, or floods affecting our customers, collateral, or our branches or other operating facilities; war, acts of terrorism, riots, civil disruption, pandemics, disruptions in the operation of our information systems, or other events disrupting business or commerce; risks related to the acquisition or sale of assets or businesses or the formation, termination or operation of joint ventures or other strategic alliances, including increased loan delinquencies or net charge-offs, integration or migration issues, increased costs of servicing, incomplete records, and retention of customers; a failure in or breach of our operational or security systems or infrastructure or those of third parties, including as a result of cyber-attacks, or other cyber-related incidents involving the loss, theft or unauthorized disclosure of personally identifiable information, or "PII," of our present or former customers; our credit risk scoring models may be inadequate to properly assess the risk of customer unwillingness or lack of capacity to repay; adverse changes in our ability to attract and retain employees or key executives to support our businesses; increased competition, or changes in customer responsiveness to our distribution channels, an inability to make technological improvements, and the ability of our competitors to offer a more attractive range of personal loan products than we offer; changes in federal, state, or local laws, regulations, or regulatory policies and practices that adversely affect our ability to conduct business or the manner in which we currently are permitted to conduct business, such as licensing requirements, pricing limitations or restrictions on the method of offering products, as well as changes that may result from increased regulatory scrutiny of the sub-prime lending industry, our use of third-party vendors and real estate loan servicing, or changes in corporate or individual income tax laws or regulations, including effects of the Tax Cuts and Jobs Act and the Coronavirus Aid, Relief, and Economic Security Act; risks associated with our insurance operations, including insurance claims that exceed our expectations or insurance losses that exceed our reserves; our inability to successfully implement our growth strategy for our consumer lending business or successfully acquire portfolios of personal loans; declines in collateral values or increases in actual or projected delinquencies or net charge-offs; potential liability relating to finance receivables which we have sold or securitized or may sell or securitize in the future if it is determined that there was a non-curable breach of a representation or warranty made in connection with such transactions; the costs and effects of any actual or alleged violations of any federal, state or local laws, rules or regulations, including any associated litigation; the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority and any associated litigation; our continued ability to access the capital markets and maintain adequate current sources of funds to satisfy our cash flow requirements; our ability to comply with our debt covenants; our ability to generate sufficient cash to service all of our indebtedness; any material impairment or write-down of the value of our assets; the ownership of our common stock continues to be highly concentrated, which may prevent other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest; the effects of any downgrade of our debt ratings by credit rating agencies, which could have a negative impact on our cost of and/or access to capital; our substantial indebtedness, which could prevent us from meeting our obligations under our debt instruments and limit our ability to react to changes in the economy or our industry or our ability to incur additional borrowings; our ability to maintain sufficient capital levels in our regulated and unregulated subsidiaries; changes in accounting standards or tax policies and practices and the application of such new standards, policies and practices; management estimates and assumptions, including estimates and assumptions about future events, may prove to be incorrect; various risks relating to continued compliance with the Settlement Agreement with the U.S. Department of Justice; and other risks and uncertainties described in the "Risk Factors" and "Management's Discussion and Analysis" sections of the Company's most recent Form 10-K and Form 10-Qs filed with the SEC and in the Company's other filings with the SEC from time to time.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. You should specifically consider the factors identified in this document that could cause actual results to differ before making an investment decision to purchase our securities and should not place undue reliance on any of our forward-looking statements. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

OneMain Holdings, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)



Quarter-to-Date Year-to-Date

(unaudited, inmillions, except 6/30/2020 3/31/2020 6/30/2019 6/30/2020 6/30/2019per share amounts)



Interest income 1,077 1,106 1,000 2,184 1,955



Interest expense (271) (255) (238) (527) (473)

Provision forfinance receivable (423) (531) (268) (954) (554) losses

Net interest incomeafter provision for 383 320 494 703 928 finance receivablelosses



Other Revenues:

Insurance 109 117 114 226 224

Investment 29 9 24 38 50

Net loss onrepurchases and - - (12) - (33) repayments of debt

Net gain on sale of - - - - 3 real estate loans

Other ^(1), (2) 10 15 30 25 60

Total other 148 141 156 289 304 revenues



Other Expenses

Operating expenses (323) (350) (344) (674) (680)

Insurance policy (90) (68) (50) (157) (94) benefits and claims

Total other (413) (418) (394) (831) (774) expenses

Income before 118 43 256 161 458 income taxes

Income taxes (29) (11) (62) (40) (112)

Net income $ 89 $ 32 $ 194 $ 121 $ 346



Weighted averagenumber of diluted 134.4 136.1 136.2 135.3 136.2 shares

Diluted EPS $ 0.66 $ 0.24 $ 1.42 $ 0.90 $ 2.54

Book value per $ 23.61 $ 22.73 $ 30.43 $ 23.61 $ 30.43 basic share

Return on assets 1.5 % 0.6 % 3.7 % 1.0 % 3.3 %



Provision forfinance receivable 423 531 268 954 554 losses

Less: Net (281) (296) (257) (577) (541) charge-offs

Change in allowancefor finance $ 142 $ 235 $ 11 $ 377 $ 13 receivable losses



Note: Year-to-Date may not sum due to rounding.

(1) 2Q19 and YTD 2Q19 includes a $7 additional net gain on the sale of the SpringCastle interests.

YTD 2Q19 includes the fair value impairment of the remaining loans in(2) held for sale after certain real estate loan sales. It also includes a gain on sale related to an investment held at cost.

OneMain Holdings, Inc.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)



As of



(unaudited, $ in millions) 6/30/2020 3/31/2020 6/30/2019



Assets

Cash and cash equivalents $ 2,740 $ 4,203 $ 786

Investment securities 1,862 1,800 1,721

Net finance receivables 17,721 18,269 16,980

Unearned insurance premium and claim (791) (797) (720) reserves

Allowance for finance receivable losses (2,324) (2,182) (744)

Net finance receivables, less unearnedinsurance premium and claim reserves and 14,606 15,290 15,516 allowance for finance receivable losses

Restricted cash and restricted cash 487 575 420 equivalents

Goodwill 1,422 1,422 1,422

Other intangible assets 324 334 362

Other assets ^(1) 1,067 1,069 790

Total assets $ 22,508 $ 24,693 $ 21,017



Liabilities and Shareholders' Equity

Long-term debt $ 18,010 $ 20,443 $ 15,551

Insurance claims and policyholder 630 633 648 liabilities

Deferred and accrued taxes 124 68 34

Other liabilities 573 497 643

Total liabilities 19,337 21,641 16,876



Common stock 1 1 1

Additional paid-in capital 1,648 1,645 1,683

Accumulated other comprehensive income 65 (6) 28 (loss)

Retained earnings 1,457 1,412 2,429

Total shareholders' equity 3,171 3,052 4,141

Total liabilities and shareholders' $ 22,508 $ 24,693 $ 21,017 equity



Effective 1Q20, the Finance Receivables Held for Sale are included within(1) 'Other assets'. Prior periods' balance sheet presentations have been revised to conform with this new alignment.

OneMain Holdings, Inc.

CONSOLIDATED KEY FINANCIAL METRICS (UNAUDITED)



As of or Quarter-to-Date



(unaudited, $ in millions) 6/30/2020 3/31/2020 6/30/2019



Non-TDR Net Finance Receivables $ 17,019 $ 17,581 $ 16,431

TDR Net Finance Receivables 702 688 549

Net Finance Receivables $ 17,721 $ 18,269 $ 16,980



Average Net Receivables $ 17,909 $ 18,380 $ 16,538

Average Daily Debt Balances 19,772 17,675 15,974

Origination Volume 2,047 2,589 3,879



Non-TDR Allowance $ 2,003 $ 1,880 $ 517

TDR Allowance 321 302 227

Allowance $ 2,324 $ 2,182 $ 744



Non-TDR Allowance Ratio 11.77 % 10.70 % 3.15 %

TDR Allowance Ratio 45.80 % 43.88 % 41.37 %

Allowance Ratio 13.12 % 11.95 % 4.38 %



Gross Charge-Offs $ 321 $ 337 $ 290

Recoveries (40) (41) (33)

Net Charge-Offs $ 281 $ 296 $ 257



Gross Charge-Off Ratio 7.21 % 7.35 % 7.03 %

Recoveries (0.89 %) (0.90 %) (0.80 %)

Net Charge-Off Ratio 6.32 % 6.45 % 6.23 %





30-89 Delinquency $ 289 $ 412 $ 364

30+ Delinquency 624 806 655

60+ Delinquency 456 561 435

90+ Delinquency 335 394 291



30-89 Delinquency Ratio 1.63 % 2.25 % 2.14 %

30+ Delinquency Ratio 3.52 % 4.41 % 3.86 %

60+ Delinquency Ratio 2.57 % 3.07 % 2.57 %

90+ Delinquency Ratio 1.89 % 2.16 % 1.72 %



Delinquency ratios are calculated as a percentage of net financeNote: receivables. Charge-off ratios are calculated as a percentage of average net finance receivables. Ratios may not sum due to rounding.

OneMain Holdings, Inc.

BALANCE SHEET METRICS (UNAUDITED)



As of



(unaudited, $ in millions) 6/30/2020 3/31/2020 6/30/2019



Liquidity

Cash and cash equivalents $ 2,740 $ 4,203 $ 786

Cash and cash equivalents unavailable 240 181 420 for general corporate purposes

Unencumbered personal loans 8,749 6,120 8,906

Undrawn conduit facilities 7,100 3,600 6,700



Long-term debt $ 18,010 $ 20,443 $ 15,551

Less: Junior subordinated debt (172) (172) (172)

Adjusted Debt $ 17,838 $ 20,271 $ 15,379

Less: Available cash and cash (2,500) (4,022) (366) equivalents

Net Adjusted Debt $ 15,338 $ 16,249 $ 15,013



Total Shareholders' Equity $ 3,171 $ 3,052 $ 4,141

Less: Goodwill (1,422) (1,422) (1,422)

Less: Other intangible assets (324) (334) (362)

Plus: Junior subordinated debt 172 172 172

Adjusted Tangible Common Equity $ 1,597 $ 1,468 $ 2,529

Plus: Allowance for finance receivable 1,742 1,637 566 losses, net of tax ^(1)

Adjusted Capital $ 3,339 $ 3,105 $ 3,095



Net Leverage (Net Adjusted Debt to 4.6x 5.2x 4.9x Adjusted Capital)



(1) Income taxes assume a 25% statutory tax rate for 2020 and a 24% statutory tax rate for 2019 periods.

OneMain Holdings, Inc.

CONSOLIDATED RETURN ON RECEIVABLES (UNAUDITED)



Quarter-to-Date Year-to-Date



(unaudited, $ in millions) 6/30/ 3/31/ 6/30/ 6/30/ 6/30/ 2020 2020 2019 2020 2019



Revenue ^(1) 25.5 % 25.8 % 26.8 % 25.7 % 26.7 %

Net Charge-Off (6.3 %) (6.5 %) (6.2 %) (6.4 %) (6.7 %)

Risk Adjusted Margin 19.2 % 19.4 % 20.6 % 19.3 % 20.1 %

Operating Expenses (7.3 %) (7.7 %) (8.3 %) (7.5 %) (8.4 %)

Unlevered Return on 11.9 % 11.7 % 12.3 % 11.8 % 11.7 %Receivables

Interest Expense (6.1 %) (5.6 %) (5.8 %) (5.8 %) (5.8 %)

Change in Allowance (3.2 %) (5.2 %) (0.3 %) (4.2 %) (0.2 %)

Income Tax Expense (0.7 %) (0.2 %) (1.5 %) (0.4 %) (1.4 %)

Return on Receivables 2.0 % 0.7 % 4.7 % 1.3 % 4.3 %



Note: All ratios are based on consolidated results as a percentage of average net finance receivables. Ratios may not sum due to rounding.

(1) Revenue includes interest income on finance receivables plus other revenues less insurance policy benefits and claims.



OneMain Holdings, Inc.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)



Quarter-to-Date Year-to-Date



(unaudited, $ in millions) 6/30/ 3/31/ 6/30/ 6/30/ 6/30/ 2020 2020 2019 2020 2019



Consumer & Insurance $ 128 $ 51 $ 270 $ 179 $ 502

Other (1) (1) 3 (2) -

Segment to GAAP Adjustment (9) (7) (17) (16) (44)

Income Before Income Taxes - $ 118 $ 43 $ 256 $ 161 $ 458 GAAP basis



Pretax Income - Segment $ 128 $ 51 $ 270 $ 179 $ 502 Accounting Basis

Direct Costs Associated with 6 3 - 9 - COVID-19

Acquisition-RelatedTransaction and Integration 2 6 8 8 14 Expenses

Net Loss on Repurchase and - - 12 - 28 Repayment of Debt ^(1)

Net Gain on Sale of Cost - - - - (11) Method Investment

Restructuring Charges 7 - 1 7 4

Consumer & InsuranceAdjusted Pretax Income $ 143 $ 60 $ 291 $ 203 $ 537 (non-GAAP)



Pretax Loss - Segment $ (1) $ (1) $ 3 $ (2) $ - Accounting Basis

Additional Net Gain on Sale - - (7) - (7) of SpringCastle Interests

Net Loss on Sale of Real - - - - 1 Estate Loans^ (2)

Other Adjusted Pretax Loss $ (1) $ (1) $ (4) $ (2) $ (6) (non-GAAP)



Springleaf Debt Discount $ (5) $ (5) $ (5) $ (10) $ (11) Accretion

OMFH LLR Provision Catch-up (2) (2) (4) (3) (14)

OMFH Receivable Premium (1) (1) (4) (2) (9) Amortization

OMFH Receivable Discount 4 5 2 9 5 Accretion

Other (5) (4) (6) (10) (15)

Total Segment to GAAP $ (9) $ (7) $ (17) $ (16) $ (44) Adjustment



Note: Year-to-Date may not sum due to rounding.

Amounts differ from those presented on "Consolidated Statements of(1) Operations (Unaudited)" page as a result of purchase accounting adjustments that are not applicable on a Segment Accounting Basis.

In YTD 2Q19, the gain on the sale of the real estate loans sold has(2) been combined with the resulting fair value impairment of the remaining loans in finance receivables held for sale.

OneMain Holdings, Inc.

RECONCILIATION OF KEY SEGMENT METRICS (UNAUDITED) (Non-GAAP)



As of



(unaudited, $ in millions) 6/30/2020 3/31/2020 6/30/2019



Consumer & Insurance $ 17,732 $ 18,283 $ 17,016

Other - - -

Segment to GAAP Adjustment ^(1) (11) (14) (36)

Net Finance Receivables - GAAP basis $ 17,721 $ 18,269 $ 16,980



Consumer & Insurance $ 2,342 $ 2,202 $ 772

Other - - -

Segment to GAAP Adjustment (18) (20) (28)

Allowance for Finance Receivable Losses - $ 2,324 $ 2,182 $ 744 GAAP basis



As a As a result of the adoption of ASU 2016-13, we converted all purchased credit impaired finance receivables to purchased credit(1) deteriorated finance receivables in accordance with ASC Topic 326, which resulted in the gross-up of net finance receivables and allowance for finance receivable losses of $15 on January 1, 2020.

OneMain Holdings, Inc.

CONSUMER & INSURANCE SEGMENT (UNAUDITED) (Non-GAAP)



Quarter-to-Date Year-to-Date



(unaudited, in 6/30/millions, except per 6/30/2020 3/31/2020 2019 6/30/2020 6/30/2019share amounts)



Interest income $ 1,074 $ 1,101 $ 999 $ 2,174 $ 1,953



Interest expense (266) (249) (232) (515) (462)

Provision forfinance receivable (422) (530) (263) (952) (539) losses

Net interest incomeafter provision for 386 322 504 707 952 finance receivablelosses



Insurance 109 117 114 226 224

Investment 29 9 24 38 50

Other 6 10 18 17 33

Total other revenues 144 136 156 281 307



Operating expenses (297) (330) (319) (628) (627)

Insurance policy (90) (68) (50) (157) (95) benefits and claims

Total other expenses (387) (398) (369) (785) (722)



Adjusted pretax 143 60 291 203 537 income (non-GAAP)



Income taxes ^(1) (36) (15) (70) (51) (129)



Adjusted net income $ 107 $ 45 $ 221 $ 152 $ 408 (non-GAAP)



Weighted averagenumber of diluted 134.4 136.1 136.2 135.3 136.2 shares

C&I adjusted diluted $ 0.80 $ 0.33 $ 1.62 $ 1.12 $ 3.00 EPS ^(2)



Note: Year-to-Date may not sum due to rounding.

(1) Income taxes assume a 25% statutory tax rate for 2020 and a 24% statutory tax rate for 2019 periods.

C&I adjusted diluted EPS is calculated as the C&I adjusted net income(2) (non-GAAP) divided by the weighted average number of diluted shares outstanding.

OneMain Holdings, Inc.

CONSUMER & INSURANCE SEGMENT METRICS (UNAUDITED) (Non-GAAP)



Quarter-to-Date Year-to-Date



(unaudited, $ in millions) 6/30/ 3/31/ 6/30/ 6/30/ 6/30/ 2020 2020 2019 2020 2019



Revenue^ (1) 25.3 % 25.6 % 26.8 % 25.4 % 26.7 %

Net Charge-Off (6.3 %) (6.5 %) (6.2 %) (6.4 %) (6.7 %)

Risk Adjusted Margin 19.0 % 19.1 % 20.6 % 19.1 % 20.0 %

Operating Expenses (6.7 %) (7.2 %) (7.7 %) (7.0 %) (7.7 %)

Unlevered Return on 12.3 % 11.9 % 12.8 % 12.1 % 12.3 %Receivables

Interest Expense (6.0 %) (5.5 %) (5.6 %) (5.7 %) (5.7 %)

Change in Allowance (3.2 %) (5.1 %) (0.2 %) (4.1 %) - %

Income Tax Expense ^(2) (0.8 %) (0.3 %) (1.7 %) (0.6 %) (1.6 %)

Return on Receivables 2.4 % 1.0 % 5.4 % 1.7 % 5.0 %



Consumer & Insurance financial information is presented on an adjustedNote: Segment Accounting Basis. All ratios are shown as a percentage of C&I average net finance receivables. Ratios may not sum due to rounding.

(1) Revenue includes interest income on finance receivables plus other revenues less insurance policy benefits and claims.

(2) Income taxes assume a 25% statutory tax rate for 2020 and a 24% statutory tax rate for 2019 periods.

OneMain Holdings, Inc.

CONSUMER & INSURANCE CAPITAL METRICS (UNAUDITED) (Non-GAAP)



Quarter-to-Date Year-to-Date



(unaudited, in 6/30/2020 3/31/2020 6/30/ 6/30/2020 6/30/millions) 2019 2019



Provision for finance $ 422 $ 530 $ 263 $ 952 $ 539 receivable losses

Less: Net charge-offs (282) (296) (256) (578) (540)

Change in C&I allowancefor finance receivable 140 234 7 374 (1) losses



Adjusted pretax income 143 60 291 203 537 (non-GAAP)

Pretax capitalgeneration^(1) 283 294 298 577 536 (non-GAAP)



Capital generation, netof tax^(1), (2) $ 212 $ 221 $ 226 $ 433 $ 407 (non-GAAP)



Beginning Adjusted $ 3,105 $ 3,367 $ 3,367 Capital



Capital Generation, netof tax^(1), (2) 212 221 433 (non-GAAP)



Less: Common Stock - (45) (45) Repurchased and Retired

Less: Cash Dividends (44) (388) (432)

Capital Returns (44) (433) (477)



Less: Adjustments to C& (17) (12) (29) I, net of tax ^(2), (3)

Less: Change in the - (8) (8) Assumed Tax Rate^ (2)

Less: Withholding Taxon Share-based - (6) (6) Compensation

Less: Adjusted OtherNet Income, net of tax (1) (1) (2) ^(2) (non-GAAP)

Plus: OtherComprehensive Income 71 (50) 21 (Loss)

Plus: Purchased CreditDeteriorated Finance - 11 11 Receivables Gross-up,net of tax ^(2), (4)

Plus: Other Intangibles 10 9 19 Amortization

Plus: Share-basedCompensation Expense, 3 7 10 net of forfeitures

Other 66 (50) 16



Ending Adjusted Capital $ 3,339 $ 3,105 $ 3,339



Note: Year-to-Date may not sum due to rounding.

Pretax capital generation represents adjusted pretax income excluding(1) change in C&I allowance for finance receivable losses (non-GAAP). Capital generation represents adjusted net income excluding change in C &I allowance for finance receivable losses, net of tax (non-GAAP).

(2) Income taxes assume a 25% statutory tax rate for 2020 and a 24% statutory tax rate for 2019 periods.

(3) Includes the effects of purchase accounting adjustments excluding loan loss reserves.

As a result of the adoption of ASU 2016-13, we converted all purchased credit impaired finance receivables to purchased credit deteriorated(4) finance receivables in accordance with ASC Topic 326, which resulted in the gross-up of net finance receivables and allowance for finance receivable losses of $15 on January 1, 2020.

OneMain Holdings, Inc.

CONSUMER AND INSURANCE SEGMENT - KEY FINANCIAL METRICS (UNAUDITED)(Non-GAAP)



As of or Quarter-to-Date



(unaudited, $ in millions) 6/30/2020 3/31/2020 6/30/2019





Non-TDR Net Finance Receivables $ 16,982 $ 17,539 $ 16,388

TDR Net Finance Receivables 750 744 628

Net Finance Receivables ^(1) $ 17,732 $ 18,283 $ 17,016



Average Net Receivables $ 17,921 $ 18,397 $ 16,573

Origination Volume 2,047 2,589 3,879





Non-TDR Allowance $ 1,998 $ 1,876 $ 518

TDR Allowance 344 326 254

Allowance ^(1) $ 2,342 $ 2,202 $ 772



Non-TDR Allowance Ratio 11.77 % 10.70 % 3.16 %

TDR Allowance Ratio 45.92 % 43.88 % 40.42 %

Allowance Ratio 13.21 % 12.05 % 4.54 %



Gross Charge-Offs $ 322 $ 337 $ 294

Recoveries (40) (41) (38)

Net Charge-Offs $ 282 $ 296 $ 256



Gross Charge-Off Ratio 7.22 % 7.36 % 7.11 %

Recoveries (0.89 %) (0.90 %) (0.91 %)

Net Charge-Off Ratio 6.33 % 6.46 % 6.20 %



30-89 Delinquency $ 290 $ 413 $ 366

30+ Delinquency 625 808 659

60+ Delinquency 456 562 438

90+ Delinquency 335 395 293



30-89 Delinquency Ratio 1.63 % 2.26 % 2.15 %

30+ Delinquency Ratio 3.52 % 4.42 % 3.87 %

60+ Delinquency Ratio 2.57 % 3.07 % 2.58 %

90+ Delinquency Ratio 1.89 % 2.16 % 1.72 %





Consumer & Insurance financial information is presented on an adjusted Segment Accounting Basis. Delinquency ratios are calculated as aNote: percentage of C&I net finance receivables. Charge-off ratios are calculated as a percentage of C&I average net finance receivables. Ratios may not sum due to rounding.

(1) For reconciliation to GAAP, see "Reconciliation of Key Segment Metrics (Unaudited) (Non-GAAP)."

OneMain Holdings, Inc.

OTHER (UNAUDITED) (Non-GAAP)

Quarter-to-Date Year-to-Date



(unaudited, $ in millions) 6/30/ 3/31/ 6/30/ 6/30/ 6/30/ 2020 2020 2019 2020 2019



Interest income $ 1 $ 2 $ 2 $ 3 $ 5

Interest expense (1) (1) (1) (2) (3)

Net interest income - 1 1 1 2



Total other revenues ^(1) 4 4 5 9 15



Total other expenses (5) (6) (10) (12) (23)



Adjusted pretax loss $ (1) $ (1) $ (4) $ (2) $ (6) (non-GAAP)



Net finance receivables held $ 61 $ 63 $ 75 $ 61 $ 75 for sale ^(2)



Note: Other financial information is presented on an adjusted Segment Accounting Basis.

(1) Total other revenues include portfolio servicing fees from SpringCastle.

Effective 1Q20, the Net Finance Receivables Held for Sale are included(2) within 'Other assets' on our Consolidated Balance Sheets. Prior periods' balance sheet presentations have been revised to conform with this new alignment.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200727005703/en/

CONTACT: OneMain Holdings, Inc. Investor Contact: Kathryn Miller, 212-359-2442 Kathryn.Miller@omf.com