OneMain Holdings (OMF)·Q4 2025 Earnings Summary
OneMain Holdings Beats Q4 as Credit Quality Stabilizes, Shares Rise After-Hours
February 5, 2026 · by Fintool AI Agent
OneMain Holdings (OMF) delivered a strong Q4 2025, beating both EPS and revenue estimates as the nonprime consumer lender benefited from receivable growth, improved portfolio yield, and better-than-expected credit performance. Net income surged 62% YoY to $204 million, capping a year where the company generated $783 million in earnings—up 54% from 2024. Shares rose 1.9% in after-hours trading to $64.40.
Did OneMain Beat Earnings?
Yes—comfortably. OneMain beat on both the top and bottom line:
The EPS beat was driven by three factors: (1) higher interest income from 6% receivable growth, (2) improved portfolio yield, and (3) a lower-than-expected provision build.
Full-year 2025 results were equally impressive:
Ask Fintool AI AgentWhat Drove the Quarter?
Interest Income Surge
Interest income reached $1.4 billion in Q4, up 8% YoY, fueled by:
- Receivable growth: Managed receivables hit $26.3B, up 6% YoY
- Yield improvement: Consumer loan portfolio yield rose to 22.5%, up from 22.2% in Q4 2024
- Product mix: Credit card receivables grew to $936M from $643M YoY (+46%)
Credit Performance
Credit quality was the key investor concern heading into earnings—and the results were better than feared:
The sequential uptick in delinquencies reflects normal seasonality—the Q4 QoQ change of +24 bps is better than the pre-pandemic seasonal average of +33 bps. More importantly, 30+ delinquency was flat YoY at 5.65% and consumer loan net charge-offs improved 7 bps YoY to 7.56%, suggesting the portfolio is performing within expectations.
Capital Generation
Management's key internal metric—capital generation—hit $225 million in Q4, up 23% from $183 million in Q4 2024. Full-year capital generation reached $913 million vs. $685 million in 2024, a 33% increase.
Capital generation return on receivables improved to 3.6% in Q4 and 3.8% for the full year.
What Did Management Say?
"It was an excellent year with very strong earnings growth and meaningful progress on our strategic initiatives. All of the momentum we have built over the past few years came through in our 2025 results."
— Doug Shulman, Chairman and CEO
Management highlighted several key developments:
- C&I adjusted EPS of $6.66 — up 36% YoY, with capital generation of $913M (+33%)
- AI-powered productivity tool — launched this month to help branch teams access policies and guidelines faster
- Ally Financial partnership — new pass-through arrangement on ClearPass program, already rolled out to ~1,700 dealers
- Homeowner secured lending product — launching this month, secured by home fixtures with beneficial pricing similar to auto secured loans
How Is OneMain Returning Capital?
OneMain continues aggressive shareholder returns within a disciplined capital allocation framework:
The dividend remains well-supported by capital generation of $225M quarterly and a strong capital position with net leverage of 5.4x. Management's capital allocation priorities are: (1) Business investment, (2) Regular dividend, (3) Share repurchases.
Ask Fintool AI AgentHow Did the Stock React?
OMF shares closed the regular session at $63.20, down 1.4% ahead of results. After the earnings release, the stock moved up 1.9% to $64.40 in after-hours trading.
The muted initial reaction likely reflects that much of the good news was already priced in—OMF is up ~66% from its 52-week low of $38.00. The stock trades at roughly 9.8x forward earnings.
What Changed From Last Quarter?
The sequential delinquency and charge-off uptick is seasonal—Q4 typically sees higher credit stress due to holiday spending. Originations also dipped seasonally. The 30+ delinquency QoQ change of +24 bps is better than the pre-pandemic seasonal average of +33 bps.
What Did Management Guide for 2026?
Management provided 2026 guidance with continued conservative credit posture:
The guidance implies management expects stable-to-improving credit performance and continued operating leverage. The receivables growth target of 6-9% signals confidence in organic expansion.
New Products Driving Growth
BrightWay Credit Card
OneMain's digital-first credit card continues strong momentum:
BrightWay rewards good credit behavior with a highly-rated app and strong customer engagement metrics.
OneMain Auto
Auto finance at the point of purchase continues to scale:
Key development: Ally Financial partnership. OneMain recently partnered with Ally on their ClearPass program—a pass-through arrangement where Ally declines are routed to OneMain. Already rolled out to ~1,700 dealers with plans to scale further in 2026.
Management emphasized disciplined and conservative underwriting with unique capability to serve both independent and franchise dealers.
Credit Quality: Front Book vs Back Book
A key credit quality story: the "back book" (loans originated before August 2022 credit tightening) continues to roll off:
The back book now accounts for just 6% of receivables but still contributes 17% of 30+ delinquent loans. As this cohort continues to run off, overall portfolio performance should improve. The "front book" (post-tightening originations) continues to perform in line with expectations.
Balance Sheet Highlights
The balance sheet remains well-positioned with ample liquidity:
- Unencumbered receivables: $11.8B
- Net leverage: 5.4x (down from 5.6x YoY)
- Secured mix: 50% (down from 57% YoY)
- 2025 funding raised: $5.9 billion total
Recent funding activity: Issued $1B unsecured bond at 6.75% due 2033; redeemed $424M remaining balance of March 2026 maturity. Next unsecured maturity is January 2027.
Q&A Highlights
On ILC Bank Charter Application:
"We applied for an ILC license... I think we have a very strong application. We think we're qualified to be a bank, and we're progressing through the application process. Any positive effects are probably a 2027 event."
CEO Shulman noted an ILC would provide: nationwide standardized rate structure, own bank for the card business, and access to deposits for further balance sheet diversification.
On Loan Demand Drivers: Debt consolidation remains about a third of originations, typically reducing customer monthly payments by ~25%. Emergency needs (car repairs, home repairs) and discretionary spending (vacations, family expenses) make up the balance. Management noted no meaningful change in use of funds trends.
On Share Repurchase Pace:
"Unless we see other, more attractive strategic uses of capital, we would expect incremental capital returns to be weighted more toward share repurchases in 2026 and beyond, while maintaining our commitment to the dividend."
Q4 repurchases of $70M were double all of 2024. Management indicated bias toward increased buybacks given strong capital generation.
On Tax Refunds: CFO Jenny Osterhout noted tax season drives credit seasonality—refunds typically improve delinquencies in Q1 and push losses to seasonal lows in Q3. Better-than-expected refunds would bring results toward the lower end of guidance.
On Credit Card Long-Term Losses: Target credit card net charge-off range is 15-17%. Current levels at 17.1% are close to target, with 30+ delinquency down 83 bps YoY supporting further improvement.
On Whole Loan Sale Program: The $2.4B forward flow program runs through mid-2028, with approximately half executed in 2026. Management views this as attractive diversification with good economics.
Ask Fintool AI AgentForward Catalysts
Near-term:
- Receivable growth acceleration: Management guiding 6-9% growth in 2026 vs. 6% in 2025, driven by new products
- Credit improvement: Back book roll-off should support further NCO improvement; guidance of 7.4-7.9% implies potential for lower losses
- Operating leverage: OpEx ratio target of ~6.6% reflects continued efficiency gains
- New product scaling: BrightWay and OneMain Auto provide diversification and growth optionality
Risks to monitor:
- Consumer credit deterioration if macro environment worsens (guidance assumes "no meaningful change")
- Higher unemployment impacting nonprime borrowers
- Interest expense pressure—next unsecured maturity in January 2027
Ask Fintool AI AgentKey Takeaways
- Solid beat: EPS +7.5% and revenue +2.6% vs. consensus; C&I adjusted EPS up 36% YoY to $6.66
- Credit stable: NCO improved 7 bps YoY, 30+ delinquency flat at 5.65%
- 2026 guidance positive: 6-9% receivables growth, 7.4-7.9% NCOs, ~6.6% OpEx ratio
- New products scaling: BrightWay card +46% YoY, OneMain Auto +15% YoY, Ally partnership launching
- Strategic initiatives: AI productivity tool launched, homeowner secured lending product launching, ILC charter application progressing
- Capital return accelerating: $1.05 quarterly dividend + $70M buyback (~7% yield); bias toward higher repurchases in 2026
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