OneMain Holdings Dips Despite Q4 Earnings Beat, NII & Costs Rise Y/Y

OneMain Holdings’ OMF fourth-quarter 2025 adjusted earnings of $1.59 per share surpassed the Zacks Consensus Estimate of $1.55. Moreover, the bottom line increased 37.1% from the year-ago quarter.

Results were primarily driven by an increase in net interest income (NII) and other revenues. However, a rise in total other expenses, along with higher provisions, was the undermining factor. Probably, because of these negatives, shares of the company lost 1.4% following the earnings release.

After considering non-recurring items, net income (on a GAAP basis) was $204 million, soaring 61.9% from the prior-year quarter.

For 2025, adjusted earnings of $6.66 per share surpassed the Zacks Consensus Estimate of $6.65. Moreover, the bottom line increased 36.2% from the previous year. Net income available to common shareholders (on a GAAP basis) was $783 million, up 53.8% from 2024.

OMF’s NII Improves, Expenses Rise

Quarterly NII rose 8.3% from the prior-year quarter to $1.09 billion. The increase was primarily driven by higher net finance receivables and improved yield.

Total other revenues were $193 million, up 20.6% from the prior-year quarter. The rise was driven by an increase in almost all fee income components. Also, the net loss on repurchases and repayments of debt declined year over year.

Total other expenses rose 2.7% year over year to $495 million on account of higher operating expenses.

OneMain Holdings’ Credit Quality Worsens

The provision for finance receivable losses was $542 million, up 3.6% from the prior-year quarter. In the reported quarter, OneMain Holdings recorded net charge-offs of $492 million, up 6.3% from the prior-year quarter.

The company reported 30-89-day delinquencies of $803 million, up 8.1% from the prior-year quarter. The allowance ratio of 11.54% was up from 11.48% in the prior-year quarter.

OMF’s Net Finance Receivables & Debt Increases

As of Dec. 31, 2025, net finance receivables amounted to $24.8 billion, up 1.5% from the prior-quarter end. Long-term debt increased 1.6% from the prior-quarter end to $22.7 billion.

OneMain Holdings’ Share Repurchase Update

In the reported quarter, the company repurchased 1.2 million shares of common stock for $70 million.

Our View on OMF

Rising expenses due to higher compensation and other operating expenses are expected to hamper OneMain Holdings’ profitability. Weakening asset quality is another major near-term headwind. Nevertheless, the company’s efforts to grow credit card and auto finance loans alongside strategic acquisitions are expected to support its financials.

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 #4 (Sell).

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 fourth-quarter 2025 adjusted earnings of $1.09 per share surpassed the Zacks Consensus Estimate of $1.01. The bottom line reflected a 39.7% jump from the year-ago quarter.

Results primarily benefited from a rise in net finance revenues and other revenues. Also, lower provisions and a decline in expenses were tailwinds for ALLY. An increase in loan balances further supported the results to some extent.

Capital One’s COF fourth-quarter 2025 adjusted earnings of $3.86 per share missed the Zacks Consensus Estimate of $4.12. However, the bottom line compared favorably with adjusted earnings of $3.09 in the prior-year quarter.

COF’s results were primarily hurt by an increase in expenses and higher provisions. However, an improvement in net interest income, along with higher non-interest income, offered support to some extent.

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

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