Q3 2025 OneMain Holdings Inc Earnings Call

Today's call is being recorded.

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It is now my pleasure to turn the floor over to Peter Paul Young you may begin.

Thank you operator.

Good morning, everyone and thank you for joining US let me begin by directing you to page two of the third quarter 2025, Investor presentation, which contains important disclosures concerning forward looking statements and the use of non-GAAP measures. The presentation can be found in the Investor Relations section of the Onemain website.

Our discussion today will contain certain forward looking statements, reflecting management's current beliefs about the company's future financial performance and business prospects and these forward looking statements are subject to inherent risks and uncertainties and speak only as of today.

Factors that could cause actual results to differ materially from these forward looking statements are set forth in our earnings press release.

We caution you not to place undue reliance on forward looking statements.

If you may be listening to this via replay at some point. After today, we remind you that the remarks made herein are as of today October 31, and have not been updated subsequent to this call.

Our call. This morning will include formal remarks from Doug Shulman, our chairman and Chief Executive Officer, and Jenny <unk>, Our Chief Financial Officer.

Speaker #1: Please stand by. Your program is about to begin. If you need assistance during your conference today, please press star zero. Welcome to the OneMain Financial, third quarter 2025 earnings conference call and webcast.

After the conclusion of our formal remarks, we will conduct a question and answer session.

I'd like to now turn the call over to Doug.

Thanks, Pete Good morning, everyone. Thank you for joining US today, let me start by saying, we're really pleased with our results. This quarter. We had very good revenue growth and continue to see very positive credit trends. This led to excellent growth and capital generation the primary.

Speaker #1: Hosting the call today from OneMain is Peter Poillon, Head of Investor Relations. Today's call is being recorded. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation.

Metric against which we manage our business.

We also made meaningful progress in our new products and strategic initiatives, all of which sets us up for significant value creation in the near and long term.

Speaker #1: If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two.

Let me talk about a few of the highlights for the quarter.

Speaker #1: We do ask that you limit yourself to one question and one follow-up, and please pick up your handset to allow for optimal sound quality.

Capital generation was $272 million up 29% year over year.

Speaker #1: Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn the floor over to Peter Poillon. You may begin.

C&I adjusted earnings were $1 90 per share up 51%. Our total revenue grew 9% and receivables grew 6% year over year.

Speaker #2: Thank you, Operator. Good morning, everyone, and thank you for joining us. Let me begin by directing you to page two of the third quarter 2025 investor presentation, which contains important disclosures concerning forward-looking statements and the use of non-GAAP measures.

Originations increased 5% driven by our expanded use of granular data and analytics combined with continued innovation in our products and customer experience.

We continue to see positive trends across our credit metrics are 30, plus delinquency was 541%, which is down 16 basis points year over year as compared to up two basis points in the third quarter of 2024.

Speaker #2: The presentation can be found in the Investor Relations section of the OneMain website. Our discussion today will contain certain forward-looking statements reflecting management's current beliefs about the company's future, financial performance, and business prospects.

Speaker #2: And these forward-looking statements are subject to inherent risks and uncertainties and speak only as of today. Factors that could cause actual results to differ materially from these forward-looking statements are set forth in our earnings press release.

C&I net charge offs were 7% in the quarter down 51 basis points compared to the third quarter of 2024.

Consumer loan net charge offs were six 7% down 66 basis points compared to last year, we're really pleased with the improvement in net charge offs year over year, which reflects ongoing careful management of our portfolio and the strong performance.

Speaker #2: We caution you not to place undue reliance on forward-looking statements. If you are listening to this via replay at some point after today, we remind you that the remarks made herein are as of today, October 31, and have not been updated subsequent to this call.

Speaker #2: Our call this morning will include formal remarks from Doug Shulman, our Chairman and Chief Executive Officer, and Jenny Osterhout, our Chief Financial Officer. After the conclusion of our formal remarks, we will conduct a question-and-answer session.

<unk> of recent vintages.

Despite some continued economic uncertainty our customers are holding up well.

Delinquencies are in line with expectations losses continue to come down and we really like the credit profile of the customers we are booking today.

Speaker #2: I'd like to now turn the call over to Doug.

Speaker #3: Thanks, Pete. Good morning, everyone. Thank you for joining us today. Let me start by saying we're really pleased with our results this quarter. We had very good revenue growth and continue to see very positive credit trends.

Last quarter I provided an update on some recent initiatives that are helping to drive originations in our core personal loan business, even as we maintain our conservative underwriting posture.

Speaker #3: This led to excellent growth in capital generation. The primary metric against which we manage our business. We also made meaningful progress in our new products and strategic initiatives.

They include a simplified debt consolidation product new data sources that automate customer information to reduce friction in the application process.

Speaker #3: All of which sets us up for significant value creation in the near and long term. Let me talk about a few of the highlights for the quarter.

Streamlined loan renewal for certain customers and creating a loan origination channel through our credit card business.

Speaker #3: Capital generation was $272 million up 29% year over year. C&I adjusted earnings were $1.90 per share, up 51%. Our total revenue grew 9% and receivables grew 6% year over year.

We are continually innovating across our company to expand reach enhance offers an improved customer experience. For example, we've been expanding our strategy to increase customer eligibility by offering smaller initial loan amounts to some customers than letting them.

Speaker #3: Originations increased 5%. Driven by our expanded use of granular data and analytics, combined with continued innovation in our products and customer experience. We continue to see positive trends across our credit metrics.

With us as they exhibit positive credit behaviors. This has allowed us to expand our customer base without taking on more risk and provide more customers responsible access to credit.

We're constantly optimizing and using data and analytics to find additional pockets of growth by fine tuning pricing loan amounts and product offerings at a very granular level.

Speaker #3: Our 30-plus delinquency was 5.41%, which is down 16 basis points year over year, as compared to up 2 basis points in the third quarter of 2024.

Let me turn to the progress we are making in our bright way credit cards, and Onemain auto finance businesses.

Speaker #3: C&I net charge-offs were 7% in the quarter, down 51 basis points compared to the third quarter of 2024. Consumer loan net charge-offs were 6.7%, down 66 basis points compared to last year.

Cros are multi product platform, we now provide access to credit to about $3 7 million customers, that's up 10% from a year ago much of the growth in our customer base is attributable to credit card and auto finance.

Speaker #3: We're really pleased with the improvement in net charge-offs year over year, which reflects ongoing careful management of our portfolio and the strong performance of recent vintages.

In our credit card business, we ended the quarter with $834 million of receivables.

And earlier this month, we passed the 1 million Mark and credit card customers a notable milestone for the business.

Speaker #3: Despite some continued economic uncertainty, our customers are holding up well. Delinquencies are in line with expectations, losses continue to come down, and we really like the credit profile of the customers we are booking today.

Since 2021, when we launched our card business I have said it is strategically valuable and complementary to our traditional personal loan franchise. It adds a daily transactional product to our more episodic personal loan product.

Speaker #3: Last quarter, I provided an update on some recent initiatives that are helping to drive originations in our core personal loan business, even as we maintain our conservative underwriting posture.

In credit cards create meaningful long term deep relationships with customers.

The average card customer has a credit card for about 10 years, our customers often start with a 500 or $700 line of credit which can grow over time.

Speaker #3: They include a simplified debt consolidation product, new data sources, that automate customer information, to reduce friction in the application process, streamlined loan renewal for certain customers, and creating a loan origination channel through our credit card business.

Our card customers more engaged than the typical borrower checking their balance making payments and selecting rewards our average customer logs into our App every week and we have the ability to offer customers alone or other products over time with zero <unk>.

Speaker #3: We are continually innovating across our company to expand reach and enhance offers and improve customer experience. For example, we've been expanding a strategy to increase customer eligibility by offering smaller initial loan amounts to some customers, then letting them grow with us as they exhibit positive credit behaviors.

Cost of acquisition since they are already on our platform. So with 1 million customers in growing this business is very valuable to our franchise.

Additionally, I am really pleased with what we're seeing in some important financial metrics of our card business revenue yield continues to increase now over 32% and our credit card net charge offs were down nearly 300 basis points from last quarter, while some of the improvement.

Speaker #3: This has allowed us to expand our customer base without taking on more risk, and provide more customers responsible access to credit. We are constantly optimizing and using data and analytics to find additional pockets of growth by fine-tuning pricing, loan amounts, and product offerings, at a very granular level.

<unk> is due to typical seasonal patterns. The strong performance was also a result of continual efforts to refine underwriting enhanced servicing and the overall maturing of the business.

Speaker #3: Let me turn to the progress we are making in our Brightway credit cards and OneMain Auto Finance businesses. Across our multi-product platform, we now provide access to credit to about 3.7 million customers, that's up 10% from a year ago.

In our auto finance business, we ended the quarter with over $2 $7 billion of receivables up about $100 million from the last quarter.

Speaker #3: Much of the growth in our customer base is attributable to credit card and auto finance. In our credit card business, we ended the quarter with $834 million of receivables.

Similar to our personal loan and credit card businesses, we have maintained a conservative underwriting posture and feel great about our auto portfolio, which continues to perform in line with expectations, we believe that our experienced team.

Speaker #3: And earlier this month, we passed the $1 million mark, in credit card customers, a notable milestone for the business. Since 2021, when we launched our card business, I have said it is strategically valuable and complementary to our traditional personal loan franchise.

Underwriting rigor backed by decades of serving the non prime consumer and our ability to offer loans through both independent and franchise dealerships are all competitive advantages as we grow our credit card and auto finance businesses. We are focused on carefully managed.

Speaker #3: It adds a daily transactional product to our more episodic personal loan product. In credit cards, we create meaningful long-term deep relationships with customers. The average card customer has a credit card for about 10 years.

Credit enhancing our product offerings and driving efficiencies to reduce unit costs as we scale.

This quarter once again demonstrated the strength of our balance sheet, we issued two unsecured bonds totaling $1 $6 billion with tight spreads. We've now raised $4 $9 billion in 2025 across for unsecured bonds and <unk>.

Speaker #3: Our customers often start with a $500 or $700 line of credit, which can grow over time. A card customer is more engaged than a typical borrower.

<unk> ABS securities at attractive pricing and we've also expanded our forward flow program or.

Speaker #3: Checking their balance, making payments, and selecting rewards. Our average customer logs into our app every week. And we have the ability to offer customers a loan or other products over time, with zero cost of acquisition since they are already on our platform.

Our strong balance sheet and sustained access to diversified capital sources gives us a distinct competitive advantage.

I want to highlight two things that exemplify who and what we are as a company.

Speaker #3: So with $1 million customers and growing, this business is very valuable to our franchise. Additionally, I'm really pleased with what we're seeing in some important financial metrics of our card business.

I've spoken before about credit worthy by Onemain are free financial Education program.

Since its inception Creditworthy has reached almost 5000 high schools or about 18% of all high schools nationwide as.

Speaker #3: Revenue yield continues to increase, now over 32%, and our credit card net charge-offs were down nearly 300 basis points from last quarter. While some of the improvement is due to typical seasonal patterns, the strong performance was also a result of continual efforts to refine underwriting and enhance servicing, and the overall maturing of the business.

As we deepen our impact across the U S. Recently, we surpassed the mark of teaching 500000 students the importance of building and maintaining good credit and how to do just that.

With hundreds of employees volunteering as teachers and mentors in the program. We are dedicated to helping teens across America build a strong financial foundation.

Speaker #3: In our auto finance business, we ended the quarter with over $2.7 billion of receivables. Up about $100 million from the last quarter. Similar to our personal loan and credit card businesses, we have maintained a conservative underwriting posture and feel great about our auto portfolio.

Second I'm also pleased that Onemain has been named as one of America's Top 100, most loved workplaces for 2025 by the best practice Institute.

Speaker #3: Which continues to perform in line with expectations. We believe that our experienced team, underwriting rigor, backed by decades of serving the non-prime consumer, and our ability to offer loans through both independent and franchise dealerships are all competitive advantages.

This recognition is based on direct feedback from our team members, who create tremendous value for our customers and our shareholders.

Gets to the heart of our culture of teamwork respect.

Innovation and accountability.

Speaker #3: As we grow our credit card and auto finance businesses, we are focused on carefully managing credit, enhancing our product offerings, and driving efficiencies to reduce unit costs as we scale.

I truly believe that if you have team members working together and going the extra mile every day it will drive outstanding results for the company.

The expanded reach of credit worthy and our recognition for the fourth year running as the most loved workplace speak to our differentiated business model with deep ties in the community and a culture that rewards delivering results, while providing outstanding service to our.

<unk>, both of which are critical to the long term success and shareholder value of Onemain.

Let me end with capital allocation.

As I've said before our first use of capital is extending credit to customers, who meet our risk return thresholds.

We then make strategic investments in the business to drive long term shareholder value like product innovation, our people data science technology and digital capabilities to name a few.

We are committed to our regular dividend and are increasing it by <unk> quarterly or <unk> on an annual basis. The annual dividend is now $4 20 per share, which translates to a 7% yield at our current share price.

Excess capital beyond that will largely be used for either share repurchases or strategic purposes.

This month, our board approved a $1 billion share repurchase program from now through 2028, all things being equal we expect share repurchases to be a bigger part of our capital return strategy going forward as we drive more excess capital generation and future.

Years.

This quarter, we repurchased 540000 shares for $32 million year to date, we've repurchased over one 3 million shares already meaningfully exceeding our repurchases in 2024.

Our dividend increase and new share repurchase authorization reflect our continued confidence in the strength of our business.

In summary, we feel great about the quarter and the first nine months of the year. The strong performance is the result of our continued disciplined actions to optimize our credit box deliver innovation to drive originations and expand our product offerings and distribution channels.

With that let me turn the call over to Jenny.

Thanks, Doug and good morning, everyone.

Let me begin by saying, we had a great third quarter.

The results reflect broad based continued improvement across our key financial metrics highlighted by continued strong revenue growth.

Good credit performance and capital generation that grew 29% year over year.

Let me end with capital allocation.

We also further demonstrated the strength of our funding program by raising $1 6 billion across two bonds in the quarter.

As I've said before, our first use of capital is extending credit to customers who meet our risk-return thresholds.

Third quarter, GAAP net income of $199 million or $1 67 per diluted share was up 27% from $1.31 per diluted share.

We then make strategic investments in the business that drive long-term shareholder value like product Innovation. Our people data science, technology, and digital capabilities to name a few

In the third quarter of 2024.

C&I adjusted net income of $1 90 per diluted share was up 51% from $1 26.

We are committed to our regular dividend and are increasing it by 1. Cent quarterly or 4 cents on an annual basis.

In the third quarter of 2024.

The annual dividend is now $4 per share, which translates to a 7% yield at our current share price.

Capital generation, the metric against which we manage and measure our business totaled $272 million up $61 million from $211 million in the third quarter of 2024, reflecting strong receivables growth across our products higher portfolio yields.

S capital beyond that will largely be used for either share repurchases or strategic purposes?

This month, our board approved. A 1 billion dollar share, repurchase program from now through 2028.

And continued improvement in our credit performance.

Capital generation per share of $2 28.

As we drive more excess capital generation in future years.

It was up 30% from $1 75 and.

In the third quarter of last year.

Managed receivables ended the quarter at $25 9 billion.

Up $1 6 billion or 6% from a year ago.

This quarter, we repurchased 540,000 shares for 32 million year to date. We've repurchased over 1.3, million shares, already. Meaningfully. Exceeding, our repurchases in 2024

Third quarter originations of $3 9 billion were up 5% year over year consistent with our expectations.

Our dividend increase and new share repurchase authorization reflect our continued confidence in the strength of our business.

As discussed last quarter, we are now more than a year into the successful personal loan growth initiatives that we implemented in June of last year, we identified pockets of growth and high credit quality segments that met our capital return framework, while maintaining a tight credit posture and we've been able to achieve strong grew.

In summary, we feel great about the quarter and the first nine months of the year. The strong performance is the result of our continued disciplined actions to optimize our credit box, deliver innovation to drive originations, and expand our product offerings and distribution channels.

<unk> without relaxing our underwriting standards.

With that, let me turn the call over to Jenny.

We continue to execute new initiatives utilizing deep analytics to optimize pricing and low risk segments of the business that will drive profitable growth in the quarters ahead. In fact, we expect originations growth to increase to high single digits in the fourth quarter.

Thanks Doug and good morning everyone.

Let me Begin by saying we had a great third quarter.

Third quarter consumer loan yields with 22, 6% flat from the second quarter, but up 49 basis points year over year.

The results reflect broad-based momentum across our key financial metrics, highlighted by continued strong revenue growth, good credit performance, and capital generation that grew 29% year-over-year.

The improvement was driven by the sustained impact of our pricing actions taken since the second quarter of 2023.

We also further demonstrated the strength of our funding program by raising 1.6 billion dollars across 2 Bonds in the quarter.

This tailwind was partially offset by an increasing mix of lower yield lower loss auto finance receivable.

We expect we can maintain yield at approximately this level for the near term.

Third quarter, gaap net, income of, 199 million or 1.67 cents per diluted, share was up 27% from 1.31 cents per diluted share.

Also as Doug mentioned, we saw a nice increase in our credit card revenue yield compared to the third quarter of 2024.

in the third quarter of 2024,

Was up 151 basis points to 32, 4%.

The combination of these yield improvements across our businesses is a notable driver of our year over year revenue growth.

Dni adjusted net income of 1.90 per diluted. Share was up 51% from 1.26 cents in the third quarter of 2024.

Total revenue this quarter was $1 $6 billion.

Up 9% compared to the third quarter of 2024.

Interest income of $1 4 billion grew 9% from the prior year driven by receivables growth and the yield improvements I just mentioned.

Capital generation the metric against which we manage and measure our business totaled 272 million up 61 million from 211 million in the third quarter of 2024 reflecting strong receivables growth across our products higher portfolio yields and continued improvement in our credit performance.

Other revenue of $200 million grew 11% compared to the third quarter of 2024 primes.

Primarily driven by higher gain on sale associated with our larger whole loan sale program and increased credit card revenue associated with the growing card portfolio.

Capital generation per share of $2.28 was up 30% from 1.75 in the third quarter of last year.

Interest expense for the quarter with $320 million.

Manage receivables and did the quarter at 25.96% from a year ago.

Up 7% compared to the third quarter of 2024, driven by the increase in average debt to support our receivables growth.

Third quarter, originations of 3.9 billion dollars were up 5% year-over-year consistent with our expectations.

Interest expense as a percentage of average net receivables in the quarter was five 2%.

That to the prior year, but down from five 4% last quarter.

<unk> the actions, we took to proactively manage our debt stack.

Notably the refinancing of our 9% bond due in 2029.

As discussed last quarter, we are now more than a year into the successful personal loan growth initiatives that we implemented in June of last year. We identified pockets of growth in high credit quality segments, that met our Capital return framework. While maintaining a tight credit posture and we've been able to achieve strong growth without relaxing our underwriting standards.

The strong execution of the funding we've done so far this year combined with our liability management enabled us to reduce our funding cost below our initial 2025 expectation.

Third quarter provision expense was $488 million.

Comprising net charge offs of $428 million and a $60 million increase to our reserves driven by the increase in receivables during the third quarter.

We continue to execute new initiatives, utilizing deep analytics to optimize pricing in low-risk segments of the business that will drive profitable growth in the quarters of head. In fact, we expect originations growth to increase to high single digits in the fourth quarter.

Third quarter consumer loan yield was 22.6%, flat from the second quarter but up 49 basis points year-over-year.

Our loan loss ratio remained flat quarter over quarter at 11, 5%.

I will discuss credit in more detail momentarily.

The improvement was driven by the sustained impact of our pricing actions taken since the second quarter of 2023.

Policyholder benefits and claims expense for the quarter was $48 million up from $43 million in the third quarter last year.

This Tailwind was partially offset by an increasing mix of lower yield lower loss Auto Finance receivables.

As I previously mentioned, we expect quarterly <unk> expense in the low $50 million range in the quarters ahead.

We expect we can maintain yield at approximately this level for the near-term.

Let's turn to credit where our performance continues to be very good.

Also, as Doug mentioned, we saw a nice increase in our credit card revenue yield compared to the third quarter of 2024.

Begin by looking at consumer loan delinquency trends on slide eight.

It was up 151 basis points to 32.4%.

30, plus delinquency on September 30, excluding foresight was 541% down 16 basis points compared to a year ago as the back book continues to run off and the better performing front book growth.

The combination of these yield improvements across our businesses is a notable driver of our year-over-year, Revenue growth.

Total revenue. This quarter was 1.6 billion dollars up 9% compared to the third quarter of 2024

30, plus delinquency increased by 34 basis points sequentially, which is consistent with pre pandemic seasonal trends.

Interesting, come $1.4 billion grew 9% from the prior year, driven by receivables growth and the yield improvements I just mentioned.

On slide nine you see our front book vintages comprised of consumer loans originated after our August 2022 credit tightening now make up 92% of total receivable.

% compared to the third quarter of 2024.

The performance of the front book remains in line with our expectation and it's driving the delinquency and loss improvements we are seeing.

Primarily driven by higher gain on sale associated, with our larger hole loan sale program, and increased credit card Revenue associated with the growing card portfolio.

While the back book continues to diminish now, making up 8% of the total portfolio. It still represents 19% of our 30 plus delinquency.

Interest expense for the quarter was 320 million up 7% compared to the third quarter of 2024 driven by the increase in average debt to support our receivables growth.

So relatively small the back book continues to disproportionately weigh on credit results.

Interest expense as a percentage of average net receivables in the quarter was 5.2%.

We expect it will contribute less each quarter ahead with our newer vintages increasing in share.

Flat to the prior year but down from 5.4% last quarter.

And I should note that the pace of performance contribution will depend on the rate of growth of new originations as well as the back books performing.

Reflecting the actions. We took to proactively manage our step stack. Most notably, the refinancing of our 9% Bond due in 2029.

Let's now turn to charge offs and reserves as shown on slide 10.

C&I net charge offs, which include credit cards or 7.0% of average net receivables in the third quarter down 51 basis points from a year ago.

The strong execution of the funding we've done so far this year, combined with our liability management, enabled us to reduce our funding costs below our initial 2025 expectations.

Consumer loan net charge offs, which exclude credit cards were six 7% in the quarter.

Third quarter provision expense was $488 million, comprising net charge-offs of $428 million and a $60 million increase to our reserves driven by the increase in receivables during the third quarter.

<unk> 66 basis points year over year.

This follows the trends, we have seen an improving delinquencies along with better back end roll rates and recoveries and we are really pleased with the trajectory of losses.

Our loan loss ratio remained flat quarter over quarter at 11.5%. I'll discuss credit in more detail momentarily.

We continue to see strong performance from our newer vintages.

While there will be typical seasonality, we expect to see continuing year over year loss improvement over the remainder of 2025 and into 2026.

Policyholder benefits and claims expense for the quarter was $48 million, up from $43 million in the third quarter last year.

As I've previously mentioned, we expect quarterly pbnc expense in the low fifty million dollar range in the quarters ahead.

Let me update you on the credit trends of our $834 million credit card portfolio.

Let's turn to credit where our performance continues to be very good.

I'll begin by looking at consumer loan delinquency Trends, on slide 8.

Net charge offs and our card portfolio improved sequentially by 288 basis points to 16, 7%.

We anticipated a significant improvement in card losses based on prior quarter's delinquency trends, which were better than typical card portfolio seasonality.

30 plus delinquency on September 30th. Excluding foresight was 5.41% down 16 basis points compared to a year ago as the back book continues to run off and the better performing from book grows.

This strong performance was further aided by enhancements in our servicing and recovery capabilities and our card business.

30 plus delinquency increased by 34 basis points sequentially, which is consistent with pre-pandemic seasonal trends.

We remain pleased with the overall quality of the credit card portfolio and feel confident that we are building an enduring profitable business for the long term.

Recoveries remained strong this quarter amounting to $88 million.

On slide 9. You see our front book vintages comprised of Consumer loans originated after our August 2022. Credit tightening, now make up 92% of total receivables.

Up 12% year over year, and one 5% of receivables as we continue to optimize our recovery strategy.

The performance of the front book remains in line with our expectations and is driving the delinquency and loss improvements. We are seeing.

Loan loss reserves ended the quarter at $2 8 billion.

Our loan loss reserve ratio, which remained flat to prior quarter and prior year at 11, 5% at quarter end includes a 40 basis point impact from our higher yield higher loss credit card portfolio.

While the back book continues to diminish, now making up 8% of the total portfolio. It still represents 19% of our 30 plus delinquency.

Though relatively small, the back book continues to disproportionately weigh on credit results.

We expect it. Will contribute less each quarter ahead with our newer vintages increasing in share.

Now, let's turn to slide 11 opt.

Operating expenses were $427 million up.

Up 8% compared to a year ago to six 6% Opex ratio. This quarter is modestly better than last quarter and in line with our full year expectation as we continue to invest in technology data analytics and new products, we feel great about the inherent operating leverage of our business.

And I should note that the pace of performance contribution will depend on the rate of growth of new originations, as well as the back books performance.

Let's now turn to charge-offs and reserves, as shown on slide 10.

Cni. Net charge offs, which include credit cards, or 7.0% of average net receivables in the third quarter down 51 basis points from a year ago.

It has been consistently demonstrated over the past several years as our Opex ratio has declined from seven 5% in 2019 to its current level.

Consumer loan, net charge offs, which exclude credit cards were 6.7% in the quarter down 66 basis, points year-over-year.

We remain disciplined in our spending balancing responsible investments with our focus on driving long term growth and efficiency to deliver operating leverage for the future.

This follows the trends we have seen in improving delinquencies, along with better back-end rule rates and recoveries, and we are really pleased with the trajectory of losses.

Now, let's turn to funding and our balance sheet on slide 12.

We continue to see strong performance from our newer vintages.

During the quarter, we continued to optimize our balance sheet. We believe our focus on balance sheet strength is a clear competitive advantage and enhances the stability of our business.

While there will be typical seasonality, we expect to see continuing year-over-year loss improvements over the remainder of 2025 and into 2026.

As a leading issuer over the years, we've consistently invested in our capital markets program.

Let me update. You on the credit trends of our 834 million credit card portfolio.

Focused on maintaining best in class execution and controls and as a result have built at loyal and diversified investor base.

Net charge offs in our card portfolio. Improved sequentially by 288 basis points to 16.7%.

In August we issued a $750 million unsecured bond at six and one 8% maturing in May 2030.

We anticipated a significant Improvement in card losses. Based on prior, quarters delinquency Trends, which were better than typical card portfolio. Seasonality.

The proceeds of that issuance were used to redeem the remaining balance of our most expensive security the 9% coupon bonds scheduled to mature in January 2029.

The strong performance was further aided by enhancements in our servicing and Recovery capabilities in our card business.

In September we issued an $800 million bond at six 5% maturing in March 2033.

For the long term.

<unk> bonds have strong demand from new and returning investors and were issued at near record tight credit spreads.

Including these two bond issuances, we now have issued seven times in the last six quarters in the unsecured market lowering our issuance cost derisking, our balance sheet and reducing our secured funding mix to 54%.

Recoveries remain strong. This quarter amounting to 88 million up, 12%, year-over-year, and 1.5% of receivables. As we continue to optimize our recovery strategy.

This creates a lot of flexibility for us going forward.

We also recently signed a $2 $4 billion whole loan sale forward flow agreement with a long term partner.

Loan loss reserves at the end of the quarter were $2.8 billion, with our loan loss reserve ratio remaining flat compared to the prior quarter and the prior year at 11.5%. This includes a 40 basis point impact from our higher yield and higher loss credit card portfolio.

Now, let's turn to slide 11.

Agreement substantially increases and extend our current loan sale commitment that provides further capital and funding optionality for the future.

The current agreement that calls for $75 million of loan sale commitments per month will continue through the end of this year and then increase to $100 million per month starting in January.

Operating expenses were 427 million up. 8% compared to a year ago to 6.6%, Opex ratio. This quarter is modestly better than last quarter and in line with our full year expectation, as we continue to invest in technology data analytics and new products

We're very pleased with the terms and the economics of the agreement and believe this further demonstrates the attractiveness of our loans and great confidence in the performance of our portfolio.

We feel great about the inherent operating, leverage of our business which has been consistently demonstrated over the past several years. As our Opex ratio has declined from 7.5% in 2019 to its current level

Overall from a balance sheet perspective, given the strong issuance year to date and the larger forward flow whole loan sale program, we feel great about our ability to continue to opportunistically issue when markets are most attractive in the quarters ahead.

We remain disciplined in our spending balancing responsible Investments with our focus on driving long-term growth, and efficiency to deliver operating leverage for the future.

Now, let's turn to funding and our balance sheet on slide 12.

Additionally, our overall liquidity profile is as strong as ever with bank facilities totaling $7 5 billion.

During the quarter, we continued to optimize our balance sheet.

Unchanged from last quarter end and unencumbered receivables of $10 9 billion.

We believe our focus on balance sheet strength is a clear, competitive advantage and enhances the stability of our business.

Our net leverage at the end of the third quarter was five five times flat to last quarter.

as a leading issue over the years, we've consistently invested in our Capital markets program

Turning to slide 14, our full year 2025 guidance.

We focused on maintaining best-in-class execution and controls, and as a result, we have built a loyal and diversified investor base.

First we are narrowing our full year managed receivables growth guidance to the higher end of the range. We now expect manage receivables to grow in the range of 6% to 8% compared to our prior 5% to 8% guidance held previously.

In August, we issued a 750 million unsecured Bond at 618%. Maturing in May 2030.

And given our growth in receivables along with our improving asset yields. We now expect full year total revenue growth of approximately 9%.

The proceeds of that issuance were used to redeem the remaining balance of our most expensive security, the 9% coupon bonds scheduled to mature in January 2029.

This is above our guidance range of 6% to 8%.

In September, we issued a million dollar bond at 6.5% maturing in March 2033.

We continue to expect C&I net charge offs to come in between seven five and seven 8% at the lower end of the range. We gave at the beginning of the year.

Both bonds have strong demand from new and returning investors and we're issued at near record tight credit spreads.

And our expected operating expense ratio remains unchanged at approximately six 6% for the year.

Including these two bond issuances, we have now issued seven times in the last six quarters in the unsecured market, lowering our issuance cost, de-risking our balance sheet, and reducing our secured funding mix to 54%.

As all our key financial metrics move in the right direction, we expect capital generation in 2025, we will significantly exceed 2024, reflecting strong momentum in our business.

This creates a lot of flexibility for us going forward.

We also recently signed a $2.4 billion whole loan sale forward flow agreement with a long-term partner.

We have another excellent quarter in the books as we approach the end of the year and look ahead to 2026, we see opportunity to continue to deliver outstanding shareholder value in the quarters and years ahead.

The agreement substantially increases and extends a current loan sale commitment that provides further capital and funding optionality for the future.

And with that let me turn the call over to Doug.

Thanks, Jenny let me close by saying, we really like our competitive positioning we built our business for the long run with best in class credit management, and our fortress balance sheet.

The current agreement that calls for $75 million of loan sale commitments per month will continue through the end of this year and then increase to $100 million per month starting in January.

We are driving growth by innovating across products digital experience and data science, we are deeply committed to the communities, where our customers live and work and have a great team delivering for our customers every day the strong.

We're very pleased with the terms and the economics of the agreement, and believe this further demonstrates the attractiveness of our loans and great confidence in the performance of our portfolio.

The results of this quarter are a reflection of all of this and we look forward to continuing to drive value for our customers and our shareholders going forward with that let me open it up for questions.

Overall, from a balance sheet perspective, given the strong issuance year to date and the larger forward flow whole loan sale program. We feel great about our ability to continue to opportunistically issue when markets are most attractive in the quarters ahead.

Additionally, our overall liquidity profile is as strong as ever with bank facilities, totaling 7.5 billion dollars, unchanged from last quarter end and unencumbered receivables of 10.9 billion.

The floor is now opened for questions.

At this time, if you have a question or comment please press star one on your Touchtone phone.

Our net leverage at the end of the third quarter was 5.5 times, flat to last quarter.

If at any point. Your question is answered you may remove yourself from the queue by pressing star two.

Turning to slide 14, our full-year 2025 guidance.

Again, we do ask that while you pose your question that you pick up your handset to provide optimal sound quality.

Thank you.

First question comes from Terry MA with Barclays. Please go ahead.

Hey, Thank you good morning, so theres been a lot of chatter about the health of the non prime consumer maybe some cracks.

First, we're narrowing our full year managed receivables growth. Guidance to the higher end of the range. We now expect manage receivables to grow in the range of 6 to 8% compared to our prior 5 to 8% guidance held previously.

So in up in auto.

Both of which you have exposure to so maybe just talk about what you guys are seeing more recently, maybe help us tie that to your commentary about higher origination growth in the fourth quarter.

And given our growth and receivables along with our improving asset yields. We now expect full year, total revenue growth of approximately 9%

Of our guidance range of 6% to 8%.

Sure.

I guess regarding auto we're not seeing anything negative in our auto credit in all of our auto continues to perform in line with expectations.

We continue to expect CNI, net charge-offs to come in between 7.5% and 7.8% at the lower end of the range we gave at the beginning of the year.

Zooming out on the.

And our expected operating expense ratio remains unchanged at approximately 6.6% for the year.

Consumer I think you've got to keep in mind that we see plenty of opportunity and we lend to individual consumers and the customers we have on our books and the customers were seeing.

As all our key financial metrics. Move in the right direction. We expect Capital generation in 2025 will significantly exceed 2024 reflecting strong momentum in our business.

Youll come through our channels are holding up very well and we underwrite to net disposable income. So after somebody has paid.

Okay, Sir taxes.

We have another excellent quarter in the books as we approach the end of the year and look ahead to 2026. We see opportunity to continue to deliver outstanding shareholder value in the quarters and years ahead.

Covers all of their other credit pays all of their expenses how much is leftover we're.

I'm with that. Let me turn the call over to Doug.

We're seeing net disposable income for the consumers who come in and continue to be strong and as you know we have a lot of different cuts that we used for our underwriting whether it be risk the collateral of the type of product the geography, and so we're seeing lots of opportunity and we're not seeing it.

Thanks, Jenny. Let me close by saying we really like our competitive positioning. We built our business for the long run, with best-in-class credit management and a fortress balance sheet.

<unk> with the customers that we have on our books.

I think the consumer generally in the non prime consumer generally has been stable for the last 18 months I mean, if you look at the macro data while unemployment ticked up some it's still at a.

We are driving growth by innovating across products, digital experience and data science. We are deeply committed to the communities, where our customers live and work and have a great team delivering for our customers every day.

A good place.

Sure.

Wages cumulatively have increased they don't seem to be increasing as much anymore infill.

The strong results of this quarter are a reflection of all of this and we look forward to continuing to drive value for our customers and our shareholders going forward with that. Let me open it up for questions.

Inflation is much more in check than it than it was.

The floor is now open for questions.

Savings remained pretty stable for the last 18 months.

At this time, if you have a question or comment, please press star 1 on your touchtone phone.

We also do a qualitative.

Survey of our branch managers on a regular basis, who are out talking to our customers seeing new customers.

If at any point, your question is answered. You may remove yourself from the queue, by pressing star 2.

And we looked at how's the customer doing are you seeing signs of stress et cetera.

Again, we do ask that while you pose your question, you pick up your handset to provide optimal sound quality.

Thank you.

That is stable we just did one yes. The results are very similar this year now as they were a year ago.

Our first question comes from Terry Mall with Barclays. Please go ahead.

We also have unemployment insurance for a subset of our customers and we've not seen increase.

Unemployment insurance claims and so we are always on the look out and I do think Theres still remains very broadly for the U S economy, some macro uncertainty whether it's around.

Hey, thank you. Good morning. So there's been a lot of chat or about the health of the non-prime consumer, maybe some cracks, um, you know, showing up in Auto, both of you, both of which you have exposure to. So maybe just talk about what you guys are seeing more. Recently, you maybe help us tie that to your commentary about how your origination growth in the fourth quarter.

Sure. Um,

Tariffs are what's going to happen with interest rates et cetera, but we feel good about the health of the consumer.

Great. Thank you that's super helpful.

Maybe just a follow up question on credit for Jenny.

I guess regarding Auto. We're not seeing anything negative in our auto credit and all of our Auto continues to perform in line. Uh, with expectations. I think zooming out on the uh, consumer. I think you got to keep in mind that we, you know, see plenty of opportunity and we lend to

Net charge offs continue to improve year over year delinquencies.

So improving year over year.

Foresight.

Look at the magnitude of delinquency improvement ex fore sight, it's kind of moderated so maybe like just any color on kind of what's going on there and help us think about maybe just the direction of travel and kind of going forward for delinquencies. Thank you.

Individual consumers and the customers. We have on our books and the customers. We're seeing uh you know come through our channels are holding up very well and we underwrite to net disposable income. So after somebody is paid

Yes, good morning.

I'd say, most importantly to your point about the direction of travel we feel like the direction of travel is good.

<unk>.

These delinquencies are in line with our expectations.

And we expect the delinquency improvement year on year to vary. Some so we're really focused on where the book is growing and our expected losses.

And we mentioned earlier, but we consistently have seen better roll rates and recovery and we expect continued year on year improvement in our consumer loan net charge offs, which you saw.

Pays their taxes, um, covers all of their other credit, pays all their expenses. How much is left over? Um, we're seeing net disposable income for the consumers who come in continue to be strong. And, you know, as we have a lot of different, uh, cuts that we use for our underwriting, whether it be risk, the collateral, the type of product, the geography. And so, we're seeing lots of opportunity and we're not seeing issues with the customers that we have on our books. Um, I think the consumer generally and the non-prime consumer generally have been stable for the last 18 months. I mean, if you look at the macro data, while unemployment has ticked up some, it's still at a, um, in a good place. Um,

Dropping this quarter.

By 66 basis points.

And so I think as we look at the consumer loan net charge offs, we expect for them to get back within our historical range of below 7% overtime.

Thank you.

We'll go next to Mark Devries with Deutsche Bank. Please go ahead.

Wages cumulatively have increased, they don't seem to be increasing as much anymore. Um, inflation is much more in check than it than it was, um, and savings remain pretty stable for the last 18 months. Um, we also do a qualitative, uh, survey of our branch managers on a regular basis, who are out talking to our

Yes, Thanks, Doug.

Given some of your comments about the macro uncertainty and the kind of a stable consumer.

Where do you think you sit right now and kind of the spectrum of.

Underwriting between tightening and loosening and given that some of those sectors. What's your kind of bias going forward in terms of which direction it would be moving.

We really for the last several years have had quite a conservative underwriting posture.

Pacific Lee what we've done is.

Our models will tell us and all of our data science will tell us depending on the customer what.

What do we think that our losses will be over their lifetime, and we put a 30% stress overlay on top of that for our underwrite for our credit box, which basically translates into.

You know, we are always on the lookout and I do think there's still remains, you know, very broadly for the US economy. Some macro uncertainty whether it's around, you know, tariffs or what's going to happen with interest rates, Etc. But we feel, uh, good about the health of the consumer.

Even if that customer's peak losses during their lifetime worth 30% more than we think they're going to be we would still meet our 20% return on equity threshold and so across our personal loans or credit card and our auto we've chosen.

And not to not not to loosen that up.

Great, thank you. That's super helpful. Uh, maybe just a follow-up question on credit for Jenny. Um, you know, like, net charge offs, continue to improve your year-over-year delinquencies, you know, or also improving year-over-year, um, just X foresight. But as I look at the magnitude of delinquency Improvement, X foresight, it's kind of moderated, so maybe like just any color on kind of what's going on there and help us think about maybe just the direction of travel kind of going forward for delinquencies. Thank you.

<unk>.

I think theyre just remains macro uncertainty.

We're not seeing it on our book and were getting plenty of customers to book.

That meet our return threshold I think to open that up some we do whether vain testing. So we're always book in a set of loans across product customer type geography that.

Yeah, good morning. Um, I'd say most importantly, to your, to your point about the direction of travel. We feel like the direction of travel is good. Um, these delinquencies are in line with our expectations and we expect the delinquency improvements year on year to vary some, um, so we're really focused on where the book is going and our expected losses.

That are in the <unk>.

15% to 20% ROE and we'd need to see those pop above.

Our current vintages are performing in line with our expectations, but they are not outperforming and so we'd need to see outperformance and I think we need to see a little more clarity.

Uh, and we mentioned earlier, but we consistently have seen better role rates and recoveries and we expect, you know, continued year-on-year improvement in our consumer loan net charge offs, uh, which you saw, uh, dropping this quarter, uh, by 66 basis points. Um,

Yeah.

The macro our basic bent is always to err on the side of having really good customers, who can pay us back.

And so, you know, I think as we look at the consumer loan, net charge offs, we expect for them to get back within our historical range of below 7% over time.

Who meet our risk adjusted return thresholds, we don't see a lot of advantage.

Thank you.

In.

Taking extra risk.

We'll go next to Mark deise with Deutsche Bank. Please go ahead.

Our originations year on year for the first three quarters of the year are up 10%. So we're finding plenty of pockets of growth and we'd rather innovate around the kinds of things that I talked about earlier.

<unk> customer experience channel.

Yeah, thanks. Um, you know Doug given some of your comments about the macro uncertainty and the kind of the stable consumer. What where do you think you sit right now in kind of the spectrum of you know, of underwriting between tightening and loosening and and given some of the factors? What's your kind of bias going forward in terms of which direction you you'd be moving?

Because this is how we built a really strong stable company that through the cycle is going to have good return. So our bent is not to reach for growth, but instead to stick with our discipline.

And keep finding growth by innovating and serving our customers well.

Okay makes sense.

Just a follow up for Jamie on funding I think you mentioned.

You know, we, um, really for the last several years have had quite a conservative underwriting posture. Specifically, what we've done is, you know, our models will tell us, and all of our data science will tell us, you know, depending on the customer, what, um, what do we think the losses will be over their lifetime. And we put a 30% stress overlay on.

Third comments that funding costs came in lower than you expected for the year is this more of a product of term or spreads coming in better than you expected and you also alluded to.

Enhanced mature I mean flexibility.

Very low maturities anytime soon and a lot of liquidity. How are you thinking about taking advantage of that of that added flexibility in the funding markets.

Yeah. Thanks.

Obviously funding is critical to Andy any lending business and I think for US we really see it as.

A differentiating strength and competitive advantage.

So we're always looking at the opportunities as they come and I think what we saw this quarter was we were able to go out and.

<unk>.

Go out for that first $750 million unsecured bond.

Six.

613, due 2030, and what we were able to deal with that would use the proceeds to redeem the remainder of our 9% 2029 unsecured bonds. So that really allowed us to take in sort of that higher pricing that we had.

Top of that for our under, you know, for our credit box which basically translates into um even if that customer's Peak losses um during their lifetime worth 30%, more than we think, they're going to be, we would still meet our 20% return on Equity threshold and so across our personal loans, our credit card, and our Auto. We've chosen not to not, not to loosen that up. Um, you know, I think there just remains macro uncertainty. Um, we're not seeing it on our book and we're getting, you know, plenty of customers to book. Um, that meet our return threshold. I think to open that up. Some we do Weather Vein testing so we're always booking a set of loans. You know, across product customer type geography that um, that are in the, you know, 15 to 20%.

Roe and we need to see those pop above um are current vintages are performing in line with our expectations but they're not outperforming and so we need to see outperformance and I think we need to see a little more clarity um

And bring that and so are our interest.

<unk> went from an expectation of closer to five four to come in to closer to five 2% like you saw this quarter. So that was really what drove that.

Then we were also able to go out and do another issuance.

Six and a half and go all the way out to 2033. So I think we were very happy with the spreads and with the performance of what we were able to do this quarter I would also say I mean, we've gone out now seven times in the past six quarters. So I think we've really been able to.

You know, in the, in the macro, you know, our basic vent is always to err on the side of having, really good customers, who can pay us back, um, who meet our risk adjusted return thresholds. We don't see a lot of Advantage, um, in, you know, taking extra risk, um, our originations year on year, um, for the first 3 quarters of the year are up 10%. So, we're finding plenty of pockets of growth. And we'd we'd rather innovate around the kinds of things. I talked about earlier, you know, product

To go out there and I think that's a testament to the team and what they've felt that over time.

And the flexibility that I mentioned is really about if I look forward. Our next unsecured maturity is about $425 million in March of 'twenty six and then we don't have anything maturing until January of 2027, when we have about 700 $750 million maturing so.

Instead to stick with our discipline, um, and keep finding growth by innovating and serving our customers. Well,

We can continue to look for opportunities, where we can pay.

Pay down some of our <unk>.

They're priced bonds that are callable in later it needs and we can also look at our needs for growth. We also obviously are looking at are unsecured and secured mix and this has allowed us a little bit more flexibility there to determine which market. We want to go into so we really like that flexibility because it just allows us to <unk>.

<unk> to focus on maintaining a really conservative balance sheet.

Okay, makes sense. Um just to follow up for for Jenny on on funding. I think you mentioned your prep prepared comments that funding costs came in lower than you expected for the year is, is this more of a product of term or spreads coming in better than you expected? And and you also alluded to um, you know, enhanced mature. I mean flexibility right. I think you have very low maturities anytime soon and a lot of liquidity, how are you thinking about taking advantage of that of that added flexibility in the funding markets?

Yeah, thanks. Um,

Great. Thank you.

Our next question comes from Mihir Bhatia with Bank of America. Please go ahead.

Hi, Good morning, Thank you for taking my question.

Just staying on the topic of buybacks or capital I guess.

You, obviously upside through buybacks this quarter should we be any any markers you can give us on like what kind of sizing we should be thinking about every quarter.

Obviously, funding is critical to any lending business. And I think for us, we really see it as a differentiating strength in a competitive advantage. Um, you know, uh, so we're always looking at the opportunities as they come. And I think what we saw this quarter was we were able to, um, go out and uh,

Like what are you planning this all plays out of capital.

What can we look at it is it just distributing that didn't go to the capital payout ratio what is the target internally that we should be thinking about.

Yeah look we we've had a pretty consistent.

Go out for that first. 750 million unsecured Bond at um 6, uh, 6, uh, 13, due in 2030 and what we were able to do with that was use the proceeds to redeem the remainder of our 9%, 2029 on secured bonds, so that really allowed us to take in sort of that higher pricing that we had, um, and and bring that in.

Capital allocation strategy.

Which includes.

Go through it again.

That is first we're going to make every loan that meets our risk return thresholds and we put about 15% of any loan is equity we put into it. So some of it will depend what kind of opportunities and what kind of growth. We have then we're going to invest in the business for long term franchise value.

So our, um, our interest expense went from, you know, an expectation of closer to 5.4 to come in to closer to 5.2%. Like, you saw this quarter, so that was really, what drove that I mean, I'd say, you know, then we were also able to go out and do another issue in.

And then we're going to have the.

Dividend and after that we're either going to allocated to other strategic purposes or buybacks as I mentioned, we anticipate more buybacks now that we're going to have more excess capital at the bottom of that waterfall I think you've seen us ticking up our buyback I think you can anticipate it.

<unk> up into next year I think the best I can give you is we've out we've looked at it and we've allocated $1 billion through 2028, I don't think its necessarily going to be linear and we don't have specific guidance about what's going to happen quarterly.

Uh at uh 6 and a half and go all the way out to 2033. So I think we were very happy with the spreads and with the performance of what we were able to do this quarter. I mean, I would also say, I mean we've gone out now um 7 times in the past 6 quarters. So I think we've really been able to um, to go out there and I think that's a testament to the team and and to what they've built over time. Um, and and the flexibility that I mentioned is really about, you know, if I look forward our next, unsecured maturity is about 425 million in in March of 26 and then we don't have anything a maturing until January of 2027 when we have about 700 750 million maturing so,

Sandra.

Maybe switching a little bit.

On gain on sale you got a nice step up this year I think in your prepared remarks, you talked about.

For the.

Increasing the forward flow should we expect another step up in 2006 of that forward flow comes in and maybe also just take the opportunity to talk about private credit how does that compare with your traditional <unk>.

We can continue to look for opportunities of where we can, um, pay down some of our uh, higher price bonds that are callable in later needs. And we can also look at our needs for growth. We also, you know, obviously are looking at our unsecured and secured mix and, you know, this has allowed us a little bit more flexibility there, to determine which Market we want to go into, uh, so we we really like that flexibility because it just allows

Travels today any desire to expand forward flows we're going to leverage the demand for private capital like do you have the peak there.

We continue to focus on maintaining a really conservative balance sheet.

Great. Thank you.

The hold versus distribute equation. Thank you.

Our next question comes from Maher, Bhatia with Bank of America, please go ahead.

I'm going to start with your second question first and then I'll come back to the gain on sale of phone.

Just in terms of private credit I mean, I think what I'd just say there is we're always looking to evaluate opportunities.

We've got just talked about we've got great access to capital in the public markets.

<unk>.

So we're really looking at opportunities.

To provide either funding flexibility.

We're also quite focused on the economics and the terms of those deals. So I did mentioned we increase that.

Hi, uh, good morning. Uh, thank you for taking my question. Uh, if this starts just staying on the topic of buybacks or capital, I guess, um, you obviously upsized the buyback discord. Uh, should we be any markers you can give us on? Like, what kind of sizing we should be thinking about every quarter? Is it, what are you trying to solve for? Is there a capital, like what, what can we look at? Is it just distributing net income? Is it capital? What payout ratio? What is the target internally that we should be thinking about?

And extended that whole loan sale program.

Yeah. Look we um, we've had a pretty consistent

Yes, it's forward flow with attractive pricing and I think what we're happy with the diversification that gives us and we'll evaluate those opportunities as they come and.

Wouldn't.

I think of this as additive to our current strategy. So I just think of this as one more.

One more way that we go access fund.

Funding if I go back to gain on sale.

Gain on sale was about $17 million this quarter that increased from last year about $10 million from that whole loan sale program is I think going forward I'd say I'd look more at total revenue because this will both benefit I would say a little bit gain on sale, but also think of servicing fee revenue.

Capital allocation strategy, um, you know, which includes I've, you know, go through it again. Uh, that is first. We're going to make every loan that, uh, meets our risk-return thresholds, and we put about 15% of any loan as equity. We put into it. So some of it will depend, you know, what kind of opportunities and what kind of growth we have. Then we're going to invest in the business, uh, for long-term franchise value. Then we're going to have the um,

No.

I'd focus on the total revenue line and it should help some.

Thank you.

Our next question comes from Moshe Orenbuch with TD Cowen. Please go ahead.

Great. Thanks, and it's very encouraging to see the increasing your guidance for originations in loan growth.

3 of 2028. I don't think it's necessarily going to be linear. And, you know, we don't have specific guidance about what's going to happen quarterly.

Just talk a little bit about the competitive environment.

The pricing environment.

And if it's not too much to also say that.

Panda. Um, maybe, uh, switching a little bit, uh, just on, again, on sale, you've had a nice step up this year. I think you, in your prepared remarks, talked about...

How would those.

Alright.

<unk> enhanced if your IFC.

Charter is approved.

Sure.

Look it's there is plenty of competition out there.

But we think it's quite constructive.

For us I think are.

Results show that year to date originations as I mentioned are up 10% from last year, even with our tight.

For the, you know, increasing the forward flow. Should we expect another step up in 2026? As that forward flow comes in, and maybe also just take the opportunity to talk about private credit. How does that compare with your traditional channels? Uh, today, any desire to expand forward flows further and leverage the demand from private capital? Like, give us a peek behind the hood in terms of the whole versus distribute equation. Thank you.

Credit box, we expect fourth quarter, we'll see some uptick in originations from this quarter.

We're really focused on.

Originating to good customers that meet our risk adjusted returns and meet all of the right credit profile for us.

Over 60%.

Of the customers that we're booking today remain in our top two risk grades, which is where its more competitive and theres more people, playing and so and Thats made that's remained steady so we're still getting.

Plenty of pickup and really competitive spaces.

Um, I'm going to start with your second question first, and then I'll come back to the gate on sales now. Um, just in terms of private credit, I mean, I think what I would say there is, you know, we're always looking to evaluate opportunities. Um, we've got, I just talked about, we've got great access to capital and the public markets. Um, and, so we're really looking at opportunities to provide either funding flexibility. Um, and then we're also quite focused on the economics and the terms of those deals. So, I did mention we increased that, uh, and extended that whole loan sale program. Um, you know, it's forward flow with attractive pricing. And I think what? We're, we're happy with the D.

Our pricing has held we've not needed to bring down pricing as you see with our yield and thats been.

Kicked up and is as Jenny said, we expect it to be pretty steady.

Going forward.

Sure.

I think there's always opportunity to drop price and pick up more.

We're always fine tuning pricing loan size the type of product the collateral of the data sources that we use to.

To book.

Book loans so.

I think the key for US is to continue to innovate but.

Diversification that gives us and we'll evaluate those opportunities as they come. And, you know, I wouldn't I, you know, I I think of this as additive to our current strategy. So I just think of this as 1 more, um, 1 more way that we go access, um, funding. If I go back to, uh, gain on sale, you know, gain on sale was about 17 million this quarter that increased from last year about 10 million, um, from that whole loan sale program. If I, if I think going forward, I'd say um, you know, I'd look more at total revenue because this will both benefit. You know, I'd say a little bit gain on sale but also think of servicing fee Revenue. So um, I'd focus on the total revenue line and it should help some

Got it. Thank you.

We like the competitive environment.

We like our positioning and I think we're really comfortable.

<unk> said it before we just don't chase growth we.

Our next question comes from Moshe Orin Buck with TD Cowen. Please go ahead.

We book really good luck with loans that are going to have good returns, they're going to be accretive to the franchise into our shareholders.

We're seeing plenty of opportunity there.

Look I think the ILC.

Great, thanks. It's very encouraging to see the increase in your guidance for originations and loan growth. Could you talk a little bit about the competitive environment and the pricing environment?

I've said before is.

If we get it is accretive to our strategy.

It's going to allow us to serve more customers, it's going to allow us to have.

And if it's not too much to also say that, if you know, how would those, uh, how would your efforts be enhanced if your ILC, uh, Charter is approved?

Some.

Deposit funding it will allow us through the deposit funding potentially to do some more lower end of prime kind of.

Sure, um, look, there's plenty of competition out there. Um, but we think it's quite constructive, uh, for us. I think our,

Customers allow us to book our credit card through.

Our own ILC rather than through.

Our partner and so I think it is good for long term franchise value will start to compete in the market, but I think it would be a net positive.

Results show that year-to-date originations, as I mentioned are up 10% from last year, even with our type, uh, credit box, we expect, uh, fourth quarter. We'll see some uptick in originations from this quarter. Um, we're really focused on

Okay.

And we'll go next to Don <unk> with Wells Fargo.

Doug I was curious to get your perspective, I mean, theres been a lot of volatility in the ABS markets and just wanted to get your thoughts on.

How do you think those markets are going to hold up in terms of access.

And if you think there'll be cheering for kind of seasoned issuers searchers onemain.

Yeah, I mean look I'll, let I'll, let Jenny said, what I'd say is.

Through lots of volatility for many years, we've always been able to access the ABS market because people trust us as steady hands, who know how to underwrite and the collateral we put into our trust.

originating to good customers that meet our risk adjusted returns and meet all of, you know, have the right credit profile for us. Um, over 60% of the customers that were booking today remain in our top 2 risk rates which is where it's more competitive and there's more people playing and so and that's M, you know, that's remained steady. So we're still getting uh, you know, plenty of pickup and really competitive, uh, spaces. Um, you know, our pricing has held we've not needed to bring down pricing as you see, uh, with our yield. And that's been, you know, this picked up and is as Jenny said, we expect it to be pretty steady.

Uh, going forward. Um,

Are ones that we understand well so.

I think for US there is going to be plenty of access I'll, let Jenny talk more broadly.

Yes, I would just say the team is obviously constantly talking to folks in the market and I feel like we built a.

You know, I think um, there's always opportunity to drop price and pick up more. Um, you know, we're always fine-tuning pricing loans, size, the type of product, the collateral, the data sources that we use to

A pretty strong reputation in half.

Pretty developed program that's been out there for a long time and so I think we're quite confident in our ability to go out into the ABS market and obviously, we'll see what unfolds there, but I think we're.

We're pretty disciplined operators and our and our partners.

Felt pretty good about the way we run our program so.

I think we're feeling pretty good about being able to go back into ABS.

Corporate loans that are going to have good returns. They're going to be a creative to the franchise and to our shareholders and, uh, we're seeing plenty of opportunity there. Um, you know, look, I think the ilc, um,

Thank you.

We'll go next to Kyle Joseph with Stephens. Please go ahead.

Hey, good morning, Thanks for taking my questions.

Wondering if youre seeing any impacts from the government shutdown and if it had any impact on the outlook for this year.

We're not we've been through a number of government shutdowns.

It's very small part of our book folks who work for the government. So we don't see any material impact and definitely no impact on our outlook.

Got it and then just one follow up for me.

Given all the volatility in auto I know you guys highlighted that youre seeing stability in your portfolio. So that's something.

Uh you know I've said before is um if we get, it is a creative to our strategy, um it's going to allow us to serve more customers. It's going to allow us to have um some uh you know deposit funding. It'll allow us you know through the deposit funding potentially to do some more lower end of prime kind of um customers allow us to book our credit card through um our own ilc rather than through uh a partner. And so I think it, you know, it is good for long term franchise value. We'll still have to compete uh, in the market but I think it's a it would be a net positive.

Are you seeing kind of a competitive advantage and added an opportunity or are you getting more aggressive in terms of deploying capital there or is it one of those things where there is a lot of volatility and youre shying away or just kind of unchanged overall.

And we'll go next to Don Fandetti with Wells Fargo.

I would say unchanged.

We're still a very small player in auto.

We have a lot of room to grow.

Hi uh Doug just curious to get your perspective. I mean there's been a lot of volatility in ABS markets and just want to get your thoughts on. You know how you think those markets are going to hold up in terms of access. Um and if you think they'll be tearing for, you know, kind of seasoned issuers, such as 1 name.

But we're very.

Disciplined operators. So we're pacing it we're developing more dealer relationships, we're continuing to mature the business.

We're continuing to mature the models and so we like what we're booking we like the pace, we're doing that there's obviously been a lot of noise.

Not necessarily around.

Our customer base and auto, but theres been lots of different divergent noise about things with the title auto, but it really hasnt affected were going at pace carefully, but we're going to continue to grow the business.

Yeah, I mean look, I'll let I'll let Jenny say what I'd say is um, through lots of volatility for many years. We've always been able to access the ABS Market because people trust us as steady hands who know how to underwrite and you know, the collateral we put into our trust. Um, are ones that we understand well, so, um, you know, I think for us there's going to be plenty of access. I'll let Jenny talk more broadly.

Great. Thanks for taking my questions.

We'll go next to John <unk> with Evercore ISI.

Good morning.

On the.

Back to the origination front on your high single digit expectation for the fourth quarter.

But you are not.

Necessarily unwinding are loosening standards here and sounds like Youre, not yet taken a more active pricing posture or anything. So can you maybe give us a little bit more of the detail around the globe.

Uh, yeah, I just say you know, the team is obviously constantly talking to folks in the market and I feel like we've we've built a a pretty strong reputation and have um, a pretty developed program that's been out there for a long time. And so, I think we're quite confident in our ability to go out into the ABS market, and obviously, we'll see what unfolds there. But I think, you know, we're, we're pretty disciplined operators and, uh, and our partners, um, feel feel pretty good about the way we run our program. So, um, I think we're, we're feeling pretty good about being able to go back into abs.

Thank you.

We'll go next to Kyle Joseph with Stevens. Please. Go ahead.

What changed here in terms of your expectation for origination to leg up a bit in terms of the pace of growth for the fourth quarter as you look at it.

Hey, good morning, thanks for taking my questions. Um, just wondering if you're seeing any impacts from the government shutdown and and if this had any impact on the outlook for this year,

Look I think the biggest thing is.

We're always fine tuning, where we're seeing some credit outperformance in a very small pocket opportunities to increase the loan size a little bit.

you know, we're not we'd been through a number of government shutdowns. Um, it's very small part of our book folks who work for for the government so we don't see any material impact and definitely no impact on our Outlook.

Do things on pricing, we're also always adding channels.

And then I've got.

Given you the list before.

Got it and then just 1 follow-up from me. Uh yeah, given all the volatility and Auto uh I know you guys highlighted that you're seeing stability in in your portfolio. So, you know is that something uh,

We've been really leaning into product origination or I'm, sorry product innovation.

Investing in it for the last 18 months and I think Youre just seeing the results of that we have an enhanced debt consolidation product.

Are you seeing kind of a a competitive advantage in that? Is that an opportunity? Are you getting more aggressive in terms of deploying Capital there? Or is it 1 of those things where there is a lot of volatility and you're shying away or just kind of unchanged overall

Reduce friction for certain really good credit customers and the renewal process, which increases book rates.

We have added new data sources, whether it's bank data DMV data other kind of data like that.

I'd say unchanged. Um, we, you know, we're still a very small player in auto. Um, you know, we have a lot of room to grow. Um, but, you know, we're very.

We've allowed people to split their paychecks and pay us directly for.

Their paycheck, which has better credit performance, which has allowed us to book people, who choose to do that.

So a lot of it is just grinding away every day finding pockets pushing on it.

Making sure we offer a great product to customers and we are refining the business all along so I think thats, mostly what you're seeing.

Disciplined operator. So, we're pacing it. We're developing more dealer relationships, we're continuing to mature the business, um, you know, we're continuing to mature the models. And so, we like what we're booking, we like the pace, we're doing it at, there's obviously been a lot of noise, um, you know, not necessarily around, um, you know, our our customer base in Auto, but there's been lots of different Divergent noise about things with the title Auto, but it really has an affected, you know, we're going at PACE carefully, uh, but we're going to continue to grow the business.

I can just add one piece of content for that on just on originations we were at about 5% year on year growth and I mentioned this earlier, but we expect to be in the high single digits for the fourth quarter. So I just wanted to put some context around that I mean, I think Doug mentioned its all its through a lot of constant sort of looking in.

Great. Thanks for taking my questions.

We'll go next to John Panari with Evercore ISI.

Morning.

Refining but.

I just wanted to give that context.

Yeah got it thanks, Gerry and then separately just given the very favorable capital generation that you cited in your expectation for buybacks.

A bit.

How do you think.

Change in how Youre looking at M&A opportunities.

Specifically as you look at it.

High single-digit expectation for the fourth quarter. I know you indicated that you're not uh necessarily unwinding or loosening standards here and you're just sounds like you're not yet taking a more, you know, active pricing posture or anything. So can you maybe give us a little bit more of a, a detail around the the what changed here in terms of your expectation, for origination to like up a bit in terms of the pace of growth for the fourth quarter, as you look at it.

Growing the card business here and then on the auto side or even outside of that are there opportunities you see out there.

look, I think the biggest thing is

Could present from an inorganic point of view.

Anything that is in the market or we might want to be in the market that we think could accelerate our strategy around personal loans card for auto.

Or underlying things that we continue to develop whether it be data science digital capabilities et cetera, we look at and so we look at lots of opportunities every year, we've looked at well over 100 opportunities in the last five years.

And we've acted on two of them, which were two small tuck in acquisitions.

So what I'd say is if there is an opportunity that strategically makes sense accelerates our strategy financially makes sense, we think we can execute on it.

we are always fine-tuning where we're seeing, you know, some credit out performance, you know, in a very small pocket opportunities to increase the loan size, a little bit uh do things on pricing. We're also always adding channels. Um, and then, you know, I've given you the list before, um, we've been really leaning into product origination or I'm sorry, product Innovation, you know, in investing in it for the last 18 months. And I think you're just seeing the results of that, you know, we have an enhanced debt consolidation product. We've reduced friction for certain really uh good credit customers in the renewal process, which increases book rate. Um, we have added new data sources whether it's Bank data DMV,

It is in our.

What kind of risk profile of the kind of company, we want to be in the reputation we want to be as the responsible lender, who actually helps customers move to a better financial future we have.

Look at it.

It would have to be accretive to shareholders and it has to be something that we want it. So we're very.

We're very selective as you've seen over time, but we're always looking at opportunities.

Uh, other kinds of data, um, like that. Um, we've, uh, allowed people to split their paychecks and pay us directly, uh, from their paycheck, which is better credit performance. This has allowed us to book people who choose to do that. Um, and so, a lot of it is just, you know, grinding away every day, finding pockets, uh, pushing on it. Um, making sure we, you know, offer a great product to customers and we're refining the business all along. So I think that's mostly what you're seeing.

Got it alright, thanks, so much Doug.

We will go next to Vincent Qantas with BTG. Please go ahead.

Hey, good morning, Thanks for taking my questions first question, just kind of follow up on the 2025 net charge off guidance.

You've had really good credit results this year, both delinquencies and losses.

I can just add 1 1 piece of content for that on. Just unimaginable, we were at about 5% year-on-year growth. And I mentioned this earlier, but we expect to be in the, you know, the high single digits for the fourth quarter. So I just want to put some context around it. I mean I think Doug mentioned it's all it's through. A lot of constant, sort of looking and refining but um I just want to give that context.

The 225 guide.

Being unchanged as kind of does imply a very wide fourth quarter range. So I'm just wondering if you're seeing anything that maybe gives you uncertainty for fourth quarter and if you could describe what would get you to the low end and the high end of the range. Thank you.

Hi, Vincent its journey.

Last quarter, we updated our guide.

Yeah, got it. Thanks, Jamie. And then separately, just given the very, you know, favorable capital generation that you've cited in your expectation for buybacks to leg up a bit, um, how do you, you know, any change in how you're looking at M&A opportunities? Um, you know, specifically as you look at Phil growing the card business, you're, you know, and then on the auto side, is there, or even outside of that, are there...

Seven 5% to 8% to seven 5% to seven 8%. So I think we really thought that we already brought that in a bit I think as we look.

Opportunities. You see out there that, um, could present from an inorganic, uh, point of view. Thanks.

We will be looking at those roles to loss and wed.

We mentioned a little bit about the drivers of those but I mean, we've been very happy with what we've been able to do in terms of using digital tools.

To both be in contact with more customers you go delinquent and then also.

Recoveries in being able to do more with recovery. So I think.

You know, anything that is in the market or we might want to be in the market that we think could accelerate our strategy around personal loans, card, or auto, um, or underlying things that we, you know, continue to develop, whether it be data, science, digital capabilities, etc., we look at. And so, you know, we look at lots of opportunities every year. We've looked at, you know, well over a hundred opportunities in the last.

We just I think we're happy with having brought down the guide last quarter and we'll be looking at those at those roles each month as we go forward.

Okay, great that makes sense. Thank you.

And then if you can.

Could update us on your kind of long term thoughts on capital generation. It was nice to see the share repurchases, which to your point indicates.

Your confidence and what it means capital generation. So just wanted to update is $12 50, a share capital generation. So good bogey for 2028.

What are the factors that gets you there and does that $12 50, if that's still the right bogey.

That rely on the bank charter thank you.

5 years. Um, and we've you know, we've acted on 2 of them which were too small tuck in Acquisitions. Um, and so, you know what I'd say is, if you know, there's an opportunity that strategically makes sense, accelerates our strategy financially makes sense, we think we can execute on it. Um, it is in our, um, you know, kind of risk and profile of the kind of company. We want to be in the reputation, we want to be as the responsible lender who actually helps customers move to a better financial future. We we'll look at it. Um it would have to be a creative to shareholders and it have to be something that you know, we want it. So we're very um,

So we we feel really good about capital generation I've said before our goal is to generate more capital each year going forward, our north star remains.

You know, we're very selective as you've seen over time, but we're always looking at opportunities.

Got it. All right. Thanks so much, Doug.

150, we haven't put a date.

On it we definitely don't need the bank charter to get to 12 50, there'll be accretive I've said before bank charter would be something we think we're well qualified for.

We'll go next to Vincent Kantik with BTIG. Please go ahead.

Meet the requirements would be additive to the business, but not necessary, but as you said this.

You've had really good credit results this year, both delinquencies and losses.

This is bill.

Business that really generates a lot of capital.

For our shareholders, we're really happy that we have now moving into a place where we have more excess capital and we can use it for strategic purposes.

Um, the 2025 guide, you know, being unchanged, it kind of does imply a very wide fourth quarter range. So, I'm just wondering if you're seeing anything that maybe gives you uncertainty for fourth quarter and if you could describe what would get you to the, the low end and the the high end of the range. Thank you.

Okay I think we're at the top of the hour.

So wanted to thank everyone for joining as always feel free to reach out to us with follow up and we will look forward to seeing you during the quarter and.

On the next call.

Yeah.

Thank you. This does conclude today's Onemain financial third quarter 2025 earnings Conference call. Please.

Please disconnect. Your line at this time and have a wonderful day.

Yeah.

Sure. Hi Vincent, it's Jenny. Um, you know, last quarter, we updated our guide, um, from 7.5 to 8% to 7.5 to 7.8%. So, I think, you know, we'd really thought that we'd already brought that in, uh, a bit. I think, as we look, um, you know, we'll be looking at those roles to loss and, uh, we'd mentioned a little bit about the drivers of those. But I mean, we've been, um, very happy with, uh, what we've been able to do in terms of using digital tools. Uh, to both be in contact with more, customers who go delinquent and then also, um, our, our recoveries and being able to do more with recovery. So, I think, you know, we, we just, uh, I think we're, we're happy with having brought down the guide last quarter, and we'll be looking at those at those roles each month. Um, as we go forward.

Okay, great, that makes sense. Thank you. Um, and then uh, if you could update us on your kind of long-term thoughts on Capital generation, it was nice to see the share repurchases. Um which to your point indicates, um, your confidence in in 1 Main Capital generation. So just wanted to update is 1250 a share Capital generation, still a good bogey for 2028. Um and what are the factors that gets you there and does that 1250 if that's still the right bogey um this that rely on the bank Charter, thank you.

Um,

so we we feel really good about Capital generation. I've said before our our goal is to generate more Capital each year. Going forward, our Northstar remains uh, 1250, we have them, put a date, um, on it. We definitely don't need the uh, Bank Charter to get to 1250. Um, it would be a creative, you know, I've said before it Bank Charter would be something we think we're well qualified for, um, meet the requirements would be additive to the BET business but not necessary. But as you said you know, this is a business that really generates, um, a lot of capital um, for our shareholders we're really happy that we have now moving into a place where we have more Access Capital and we can use it for strategic, uh, purposes.

um,

okay, I think we're at the top of the hour. Um, so want to thank everyone for for joining. As always, feel free to reach out to us, um, with follow-up. And we'll look forward to seeing you during the quarter and, uh, you know, on the next call.

Thank you. This does conclude today's 1 Main Financial third quarter 2025 earnings conference call.

Please disconnect your line at this time and have a wonderful day.