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OneMain Holdings' Q4 2024 Financial Performance

OneMain Holdings, Inc. (NYSE: OMF), a significant player in providing credit access to nonprime consumers, released its financial results for the fourth quarter of 2024 on January 31, 2025. Despite fluctuations in net income, the company reported a promising outlook as it navigated through a resilient economic landscape.

Financial Highlights

In Q4 2024, OneMain recorded a pretax income of $164 million, translating to a net income of $126 million. This marked a decline from the $220 million pretax income and $165 million net income reported in the same quarter of the previous year. Diluted earnings per share (EPS) were recorded at $1.05, down from $1.38 a year earlier. Nevertheless, the annual data presents a broader picture, with total net income totaling $509 million for the entire year, compared to $641 million in 2023.

The company declared a quarterly dividend of $1.04 per share, reinforcing its commitment to shareholder value, to be distributed on February 20, 2025.

During the quarter, OneMain also repurchased around 75,000 shares, showcasing its confidence in long-term growth despite the short-term profit adjustments. Doug Shulman, the firm's Chairman and CEO, expressed optimism regarding the company's credit trends and profitability outlook, noting improvements across various metrics.

Operational Insights

OneMain’s Consumer and Insurance Segment (CI) reflected a CI adjusted pretax income of $185 million, alongside adjusted net income of $139 million for Q4 2024. These figures contrasted with the prior year's Q4 results, which had CI adjusted pretax income of $223 million and adjusted net income of $167 million. For the entire year, adjusted net income from this segment was $587 million, down from $655 million in 2023, with adjusted EPS also decreasing from $5.43 to $4.89.

Managed receivables reached an impressive $24.7 billion by the end of December 2024, marking an 11% increase from the previous year's $22.2 billion. This growth was driven by a notable rise in consumer loan originations, which totaled $3.5 billion for Q4, a 16% increase compared to $3 billion in the same quarter of the prior year.

Total revenue for Q4 2024 amounted to $1.5 billion, which is a 9% uptick from the previous year's $1.4 billion. Interest income specifically grew by 11%, owing to an increase in average net finance receivables. However, interest expenses also experienced a 15% increase, reflecting higher costs associated with the company's debt to support its lending operations.

The provision for finance receivable losses was reported at $523 million for Q4, marking a rise of $77 million from the previous year, indicative of the challenges posed by an evolving credit environment.

Delinquency and Charge-Off Trends

The company reported continued challenges concerning delinquency rates in consumer loans. The 30+ days delinquency ratio was recorded at 5.76%, a slight increase from 6.16% in the previous year, while the 90+ days delinquency ratio improved marginally to 2.52% from 2.88% a year prior. Net charge-offs indicated a competitive pressure point, being at 7.63% for the quarter compared to 7.70% in Q4 2023.

Outlook for 2025

Looking ahead, OneMain Holdings aims to leverage its improved credit trends to enhance profitability in 2025. The management team is focused on driving profitable growth while maximizing shareholder value. As CEOs and industry analysts monitor the economic landscape closely, OneMain’s proactive strategies indicate a robust plan for navigating potential challenges and capitalizing on market opportunities in the new year.

As OneMain Holdings continues to evolve, its commitment to providing responsible credit access remains unwavering, fostering positive impacts on the communities it serves. The upcoming conference call scheduled for January 31, 2025, will further illuminate the company’s strategic direction as stakeholders seek clarity on future growth trajectories.