OneMain Holdings Stock Gains 1.3% on Q2 Earnings Beat, Provisions Dip

Shares of OneMain Holdings OMF gained 1.3% following the release of its second-quarter 2025 results. Second-quarter 2025 adjusted earnings of $1.45 per share surpassed the Zacks Consensus Estimate of $1.25. Moreover, the bottom line increased 42.2% from the year-ago quarter.

Results were primarily aided by an increase in net interest income (“NII”) and other revenues. Also, a decline in provisions was a tailwind. However, a rise in total other expenses was an undermining factor.

After considering non-recurring items, net income available to common shareholders (on a GAAP basis) was $167 million, up from $71 million in the prior-year quarter.

OMF’s NII Improves, Expenses Rise

NII rose 10.8% from the prior-year quarter to $1.02 billion. The increase was primarily driven by higher net finance receivables and improved yield.

Total other revenues were $176 million, up 1.1% from the prior-year quarter. The rise was driven by an increase in gains on sales of finance receivables and other revenues.

Total other expenses rose 10.3% year over year to $473 million on account of higher operating expenses, and insurance policy benefits and claims.

OneMain Holdings’ Credit Quality: A Mixed Bag

The provision for finance receivable losses was $511 million, down 11.1% from the prior-year quarter. In the reported quarter, OneMain Holdings recorded net charge-offs of $445 million, down 10.3% from the prior-year quarter.

However, the company reported 30-89-day delinquencies of $706 million, up 2.8% from the prior-year quarter. The allowance ratio of 11.54% was up from 11.46% in the prior-year quarter.

OMF’s Net Finance Receivables & Debt Increases

As of June 30, 2025, net finance receivables amounted to $23.9 billion, up 2.3% from the prior quarter end. Long-term debt increased 2.6% from the prior quarter end to $22.1 billion.

OneMain Holdings’ Share Repurchase Update

In the reported quarter, the company repurchased 460 thousand shares for $21 million.

Our View on OMF

OneMain Holdings’ efforts to grow credit card and auto finance loans alongside strategic acquisitions are expected to support its financials. A decent balance sheet and liquidity position are other positives. However, rising expenses and deteriorating asset quality are woes.

OneMain Holdings, Inc. Price, Consensus and EPS Surprise

 

OneMain Holdings, Inc. price-consensus-eps-surprise-chart | OneMain Holdings, Inc. Quote

Currently, OneMain Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of OMF’s Peers

Ally Financial’s ALLY second-quarter 2025 adjusted earnings of 99 cents per share surpassed the Zacks Consensus Estimate of 78 cents. Further, the bottom line reflected a jump of 35.6% from the year-ago quarter.

Ally’s results benefited from a rise in net finance revenues and other revenues. Further, lower non-interest expenses and reduced provision provided support. However, declines in net finance receivables, and loans and deposits were the undermining factors for ALLY.

Capital One’s COF second-quarter 2025 adjusted earnings of $5.48 per share widely surpassed the Zacks Consensus Estimate of $3.83. The bottom line also compared favorably with $4.06 in the prior quarter.

Capital One’s results benefited from higher net interest income and non-interest income. Also, loans and deposits improved in the quarter. However, the increase in expenses and jump in provisions were undermining factors.

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This article originally published on Zacks Investment Research (zacks.com).

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