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.

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.

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