OneMain Holdings’ OMF first-quarter 2025 adjusted earnings of $1.72 per share surpassed the Zacks Consensus Estimate of $1.55. Moreover, the bottom line increased 18.6% from the year-ago quarter.
In the reported quarter, the company witnessed an increase in net interest income (“NII”) and other revenues. However, a rise in provisions and total other expenses was an undermining factor. A decline in loan balances was another negative. Due to these concerns, shares of OMF declined 1.1% on Tuesday.
After considering non-recurring items, net income available to common shareholders (on a GAAP basis) was $213 million, up from $155 million in the prior-year quarter.
OMF’s NII Rises, Expenses Up
NII was up 11.2% from the prior-year quarter to $96 million. The increase was primarily driven by higher net finance receivables and improved yield.
Total other revenues were $188 million, up 4.4% 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 2.7% to $453 million on account of higher operating expenses.
Credit Quality Deteriorates for OneMain Holdings
The provision for finance receivable losses was $456 million, up 5.8% from the prior-year quarter.
In the reported quarter, OneMain Holdings recorded net charge-offs of $473 million, up 3.5% from the prior-year quarter. The company reported 30-89 days delinquencies of $630 million, up 12.1%.
On the other hand, the allowance ratio of 11.52% was down from 11.64% in the prior-year quarter.
OMF’s Net Finance Receivable Declines, Debt Increases
As of March 31, 2025, total net finance receivables amounted to $23.4 billion, down 1% from the prior quarter end. Long-term debt increased marginally from the prior quarter end to $21.5 billion.
OneMain Holdings’ Share Repurchase Update
In the reported quarter, the company repurchased 323 thousand shares for $16 million.
Our View on OneMain Holdings
OneMain Holdings’ efforts to grow credit card and auto finance loans alongside relatively lower interest rates and 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 first-quarter 2025 adjusted earnings of 58 cents per share handily surpassed the Zacks Consensus Estimate of 43 cents. Also, the bottom line reflected a jump of 41.5% from the year-ago quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
ALLY’s results benefited from a rise in net finance revenues and lower provisions. However, lower other revenues, higher non-interest expenses and a decline in net finance receivables and loans and deposits were the undermining factors.
Capital One’s COF first-quarter 2025 adjusted earnings of $4.06 per share handily surpassed the Zacks Consensus Estimate of $3.66. The bottom line also compared favorably with $3.21 in the prior-year quarter.
Results benefited from higher NII and non-interest income. Also, provisions declined during the quarter. However, the increase in expenses and lower loan balance were undermining factors for COF.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Capital One Financial Corporation (COF): Free Stock Analysis Report Ally Financial Inc. (ALLY): Free Stock Analysis Report OneMain Holdings, Inc. (OMF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research