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OneMain NYSE: OMF executives highlighted what they called an “excellent” 2025 marked by strong earnings growth, improving credit trends, and continued expansion across personal loans, auto finance, and credit cards, during the company’s fourth-quarter 2025 earnings call held Feb. 5.
Management cites strong 2025 earnings and capital generation
Chairman and CEO Doug Shulman said full-year C&I earnings per share were $6.66, up 36% year over year, while capital generation rose 33% to $913 million. He attributed the performance to “significant revenue growth, accelerated loss improvement, and continued focus on efficiency.”
Shulman also pointed to balance sheet execution, noting the company raised $5.9 billion in 2025 and grew receivables 6% to more than $26 billion while maintaining what he described as a “tight credit posture.”
For the fourth quarter, Shulman reported C&I adjusted earnings of $1.59 per share, up 37% from the prior year period, and capital generation of $225 million, up 23%. He said receivables increased 6% year over year and revenue rose 8%. Fourth-quarter 30-plus delinquency for consumer loans was 5.65%, which management said was in line with expectations and better than pre-pandemic seasonal trends.
Revenue, yields, and funding costs
CFO Jenny Osterhout said fourth-quarter GAAP net income totaled $204 million, or $1.72 per diluted share, up 64% from $1.05 per diluted share a year earlier. She reiterated that capital generation increased to $225 million from $183 million in the year-ago quarter.
Managed receivables ended 2025 at $26.3 billion, up 6%. Fourth-quarter originations were $3.6 billion, up 3% year over year, while full-year consumer loan originations increased 8%.
On pricing, Osterhout said fourth-quarter consumer loan yield was 22.5%, up 26 basis points from the prior-year quarter, supported by pricing actions taken over the past few years. She said the benefit was partially offset by a higher mix of auto finance receivables, which carry lower yields but also lower losses. Looking ahead, management expects consumer loan yields to remain around current levels in 2026, assuming a steady mix and competitive environment.
Total revenue in the quarter was $1.6 billion, up 8%. Interest income of $1.4 billion rose 8% on receivables growth and yield improvement. Other revenue increased 10% to $195 million, primarily due to higher gains on sale tied to a larger whole loan sale program and higher credit card revenue as the card portfolio grew.
Interest expense was $323 million, up 4% year over year, driven by higher average debt to support growth. However, Osterhout said interest expense as a percentage of average net receivables declined to 5.2% from 5.3% a year ago. She said liability management, including refinancing 9% debt in the third quarter, helped reduce funding costs below the company’s initial 2025 expectations. For 2026, management expects interest expense as a percent of receivables to be similar to 2025, noting more than 90% of expected average debt is already on the books at fixed rates.
Credit performance: backbook headwinds and card normalization
Credit results improved in 2025, according to management. Shulman said full-year C&I net charge-offs were 7.7%, down 46 basis points from 2024, while consumer loan net charge-offs fell 63 basis points year over year. In the fourth quarter, C&I net charge-offs were 7.9% and consumer loan net charge-offs were 7.6%.
Osterhout said fourth-quarter provision expense was $542 million, consisting of $492 million of net charge-offs and a $50 million reserve build driven by receivables growth. The loan loss reserve ratio was 11.5%, flat sequentially and year over year, and management said its macro assumptions remain consistent, reflecting uncertainty around inflation and unemployment.
Executives discussed a continued performance gap between the “front book” (post-August 2022 originations after credit tightening) and the “backbook” (pre-August 2022). Osterhout said the backbook represented 17% of 30-plus delinquencies despite being just 6% of the portfolio, which she described as an ongoing headwind.
Recoveries were also highlighted as a tailwind. Osterhout said fourth-quarter recoveries rose 16% year over year to $89 million, representing 1.4% of receivables.
In credit cards, management said losses improved in the second half of 2025. Osterhout reported credit card net charge-offs improved 22 basis points year over year to 17.1% in the quarter, while 30-plus delinquency for cards improved by 83 basis points versus the prior year. She said the company’s expected long-term range for card net charge-offs is 15% to 17% and noted card reserve levels are around 22%.
Executives also cautioned that as the credit card portfolio grows, it will mechanically pressure C&I loss rates higher because credit cards carry higher loss expectations even as they contribute to revenue yield.
Product initiatives: personal loan innovation, auto partnership, and card scaling
Shulman outlined multiple product and operational initiatives intended to expand originations without loosening underwriting standards. In personal loans, he highlighted ongoing growth in debt consolidation, which management said typically reduces a customer’s payment by about 25% on the consolidated debt. He also cited efforts to reduce friction, including automated income verification, pre-populated auto collateral information, increased use of bank data for real-time decisioning, and a streamlined renewal product for top customers.
Shulman said the company created a new product that links a paycheck directly to OneMain’s payment system, aimed at expanding credit while reducing risk. He also said OneMain is introducing a new secured lending product for homeowners that secures the loan with home fixtures, with pricing similar to its auto secured loan. On the call, management said new products are piloted before broader rollout, with performance evaluated against pull-through rates, credit outcomes, and pricing relative to risk-adjusted returns.
Operationally, Shulman said OneMain expanded central sales and collections to support real-time customer service during high-volume periods and launched an AI-powered tool that provides staff with faster access to internal policies and guidelines, with the goal of boosting productivity and decision-making.
In auto finance, Shulman said receivables grew to $2.8 billion in 2025, and the company completed migration of legacy auto lending operations onto new technology infrastructure. He also said OneMain expanded its dealer sales force and entered new dealerships and markets. A key development was a new partnership with Ally Financial under its ClearPass program, described as a pass-through arrangement. Shulman said the program has been rolled out to about 1,700 dealers, with plans to scale further.
In credit cards, Shulman said receivables reached $936 million and accounts rose to nearly 1.1 million customers at year-end. In the fourth quarter, the company added $102 million in receivables and 88,000 accounts. He said digital engagement improvements reduced customer calls per account, lowering marginal operating expense per account by 25% in 2025. Credit cards represented about 4% of total receivables, but management said capital generation in the segment is accelerating as efficiency improves and losses decline.
Capital return, balance sheet actions, and 2026 outlook
Management emphasized shareholder returns and balance sheet positioning. Shulman noted the annual dividend rate of $4.20 per share, which he said represented about a 7% yield at the share price at the time of the call. In October, the board approved a $1 billion share repurchase program through 2028. The company repurchased 1.2 million shares for $70 million in the fourth quarter, compared with $32 million in the third quarter and $35 million in all of 2024. Shulman said incremental capital returns are expected to be weighted more toward buybacks in 2026 and beyond, while maintaining the dividend, unless more attractive strategic uses arise.
Osterhout said total capital returned to shareholders (dividends plus repurchases) was $639 million in 2025, up 20% from 2024.
On funding, Osterhout said OneMain issued a $1 billion unsecured bond at 6.3% due September 2033 and used proceeds in part to redeem approximately $400 million of a 7.1% unsecured bond. She said the company now has no scheduled maturities until January 2027. In 2025, OneMain issued $4 billion in unsecured bonds across five issuances and completed two revolving ABS issuances totaling $1.9 billion. The secured funding mix decreased to 50% from 59% in late 2024, which management said improved flexibility while reducing interest expense as a percentage of receivables.
The company’s Forward Flow whole loan sale program was also discussed. Osterhout said the $2.4 billion program runs through mid-2028, with about half executed in 2026, and is expected to lead to slightly higher quarterly gains on sale and higher servicing income over time. Management characterized the program as providing funding diversification and strategic optionality.
For 2026, Osterhout guided to managed receivables growth of 6% to 9% and C&I net charge-offs of 7.4% to 7.9%, assuming continued labor market softness and persistent inflation. She said losses are expected to follow seasonal patterns, running above the range in the first half and below it in the second half. The company expects an OpEx ratio of about 6.6%, modestly better than 2025.
In Q&A, management said tax season is an important driver of seasonal credit trends, but the company did not yet have an expectation for refund levels. Osterhout said stronger-than-expected refunds could push results toward the lower end of loss guidance, while Shulman said he would not expect higher refunds to significantly mute growth, given product and channel initiatives.
Executives also addressed the company’s application for an industrial loan company (ILC) license. Shulman said he would not predict timing or outcome but estimated it would take about a year to set up if approved, with positive effects likely a 2027 event assuming progress in 2026. He said an ILC would be “additive and accretive,” enabling broader customer reach, a more standardized nationwide rate and operational structure, an in-house bank for the card business, and access to deposits to further diversify funding.
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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