Welcome to the OneMain Financial 3rd Quarter 2025 Earnings Conference Call and Webcast. Hosting the call today from OneMain is Peter Poulian, Head of Investor Relations. Today's call is being recorded. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. We do ask that you limit yourself to one question and one follow-up, and please pick up your handset to allow for optimal sound quality. Lastly, if you should require operator assistance, please press star 0. It is now my pleasure to turn the floor over to Peter Pouillon. John, you may begin.

Thank you, Operator. Good morning, everyone, and thank you for joining us. Let me begin by directing you to page two of the third quarter 2025 investor presentation, which contains important disclosures concerning forward-looking statements and the use of non-GAAP measures. The presentation can be found in the Investor Relations section of the OneMain website. Our discussion today will contain certain forward-looking statements reflecting management's current beliefs about the company's future financial performance and business prospects and these forward-looking statements are subject to inherent risks and uncertainties and speak only as of today factors that could cause actual results to differ materially from these forward-looking statements are set forth in our earnings press release we caution you not to place undue reliance on forward-looking statements if you may be listening to this via replay at some point after today we remind you that the remarks made herein are as of today october 31st and have not been updated subsequent to this call our call this morning will include formal remarks from doug shulman our chairman and chief executive officer and jenny osterhout our chief financial officer after the conclusion of our formal remarks we will conduct a question and answer session I'd like to now turn the call over to Doug.

Thanks, Pete. Good morning, everyone. Thank you for joining us today. Let me start by saying we're really pleased with our results this quarter. We had very good revenue growth and continue to see very positive credit trends. This led to excellent growth in capital generation, the primary metric against which we manage our business. We also made meaningful progress in our new products and strategic initiatives, all of which sets us up for significant value creation in the near and long term. Let me talk about a few of the highlights for the quarter. Capital generation was $272 million, up 29% year over year. C&I adjusted earnings were $1.90 per share, up 51%. Our total revenue grew 9% and receivables grew 6% year over year. Originations increased 5%, driven by our expanded use of granular data and analytics, combined with continued innovation in our products and customer experience. We continue to see positive trends across our credit metrics. Our 30-plus delinquency was 5.41%, which is down 16 basis points year over year, as compared to up two basis points in the third quarter of 2024. C&I net charge-offs were 7% in the quarter, down 51 basis points compared to the third quarter of 2024. Consumer loan net charge-offs were 6.7%, down 66 basis points compared to last year. We're really pleased with the improvement in net charge-offs year over year, which reflects ongoing careful management of our portfolio and the strong performance of recent vintages. Despite some continued economic uncertainty, our customers are holding up well. Delinquencies are in line with expectations, losses continue to come down, and we really like the credit profile of the customers we are booking today. Last quarter, I provided an update on some recent initiatives that are helping to drive originations in our core personal loan business, even as we maintain our conservative underwriting posture. They include a simplified debt consolidation product, new data sources that automate customer information to reduce friction in the application process, streamlined loan renewal for certain customers, and creating a loan origination channel through our credit card business. We are continually innovating across our company to expand reach, enhance offers, and improve customer experience. For example, we've been expanding a strategy to increase customer eligibility by offering smaller initial loan amounts to some customers, then letting them grow with us as they exhibit positive credit behaviors this has allowed us to expand our customer base without taking on more risk and provide more customers responsible access to credit we are constantly optimizing and using data and analytics to find additional pockets of growth by fine-tuning pricing loan amounts and product offerings at a very granular level let me turn to the progress we are making in our Brightway credit cards and one main auto finance businesses across our multi-product platform we now provide access to credit to about 3.7 million customers that's up 10% from a year ago much of the growth in our customer base is attributable to credit card and auto finance in our credit card business we ended the quarter with $834 million of receivables. And earlier this month, we passed the $1 million mark in credit card customers, a notable milestone for the business. Since 2021, when we launched our card business, I have said it is strategically valuable and complementary to our traditional personal loan franchise. It adds a daily transactional product to our more episodic personal loan product. And credit cards create meaningful, long-term, deep relationships with customers. The average card customer has a credit card for about 10 years. Our customers often start with a $500 or $700 line of credit, which can grow over time. A card customer is more engaged than a typical borrower, checking their balance, making payments, and selecting rewards. Our average customer logs into our app every week, and we have the ability to offer customers alone, or other products over time, with zero cost of acquisition since they are already on our platform. So with 1 million customers and growing, this business is very valuable to our franchise. Additionally, I'm really pleased with what we're seeing in some important financial metrics of our card business. Revenue yield continues to increase, now over 32%, and our credit card net charge-offs were down nearly 300 basis points from last quarter. While some of the improvement is due to typical seasonal patterns, the strong performance was also a result of continual efforts to refine underwriting, enhance servicing, and the overall maturing of the business. In our auto finance business, we ended the quarter with over 2.7 billion dollars of receivables, up about $100 million from the last quarter. Similar to our personal loan and credit card businesses, we have maintained a conservative underwriting posture and feel great about our auto portfolio, which continues to perform in line with expectations. We believe that our experienced team, underwriting rigor backed by decades of serving the non-prime consumer, and our ability to offer loans through both independent and franchise dealerships are all competitive advantages. As we grow our credit card and auto finance businesses, we are focused on carefully managing credit, enhancing our product offerings, and driving efficiencies to reduce unit costs as we scale. This quarter, once again, demonstrated the strength of our balance sheet. We issued two unsecured bonds totaling $1.6 billion with tight spreads. We've now raised $4.9 billion in 2025 across four unsecured bonds and two ABS securities at attractive pricing. And we've also expanded our forward flow program. Our strong balance sheet and sustained access to diversified capital sources gives us a distinct competitive advantage. I want to highlight two things that exemplify who and what we are as a company. First, I've spoken before about Credit Worthy by OneMain, our free financial education program. Since its inception, Credit Worthy has reached almost 5,000 high schools, or about 18% of all high schools nationwide. As we deepen our impact across the U.S., recently we surpassed the mark of teaching 500,000 students the importance of building and maintaining good credit and how to do just that. With hundreds of employees volunteering as teachers and mentors in the program, we are dedicated to helping teens across America build a strong financial foundation. Second, I'm also pleased that OneMain has been named as one of America's top 100 most loved workplaces for 2025 by the Best Practice Institute. This recognition is based on direct feedback from our team members who create tremendous value for our customers and our shareholders. It gets to the heart of our culture of teamwork, respect, growth, innovation, and accountability. I truly believe that if you have team members working together and going the extra mile every day, it will drive outstanding results for the company. The expanded reach of Creditworthy and our recognition for the fourth year running as a most loved workplace speak to our differentiated business model with deep ties in the community and a culture that rewards delivering results while providing outstanding service to our customers, both of which are critical to the long-term success and shareholder value of One Main. Let me end with capital allocation. As I've said before, our first use of capital is extending credit to customers who meet our risk-return thresholds. We then make strategic investments in the business that drive long-term shareholder value, like product innovation, our people, data science, technology, and digital capabilities, to name a few. We are committed to our regular dividend and are increasing it by one cent quarterly, or four cents on an annual basis. The annual dividend is now $4.20 per share, which translates to a 7% yield at our current share price. Excess capital beyond that will largely be used for either share repurchases or strategic purposes. This month, our board approved a $1 billion share repurchase program from now through 2028. All things being equal, we expect share repurchases to be a bigger part of our capital return strategy going forward. as we drive more excess capital generation in future years. This quarter, we repurchased 540,000 shares for $32 million. Year-to-date, we've repurchased over 1.3 million shares, already meaningfully exceeding our repurchases in 2024. Our dividend increase and new share repurchase authorization reflect our continued confidence in the strength of our business. In summary, we feel great about the quarter and the first nine months of the year. The strong performance is the result of our continued disciplined actions to optimize our credit box, deliver innovation to drive originations, and expand our product offerings and distribution channels. With that, let me turn the call over to Jenny.

Thanks, Doug, and good morning, everyone. Let me begin by saying we had a great third quarter. The results reflect broad-based continued improvement across our key financial metrics, highlighted by continued strong revenue growth, good credit performance, and capital generation that grew 29 percent year over year. We also further demonstrated the strength of our funding program by raising $1.6 billion across two bonds in the quarter. Third quarter gap net income of $199 million, or $1.67 per diluted share, was up 27% from $1.31 per diluted share in the third quarter of 2024. DNI adjusted net income of $1.90 per diluted share was up 51% from $1.26 in the third quarter of 2024. Capital generation, the metric against which we manage and measure our business, totaled $272 million, up $61 million from $211 million in the third quarter of 2024, reflecting strong receivables growth across our products, higher portfolio yields, and continued improvement in our credit performance. Capital generation per share of $2.28 was up 30% from $1.75 in the third quarter of last year. Managed receivables ended the quarter at $25.9 billion, up $1.6 billion, or 6% from a year ago. Third quarter originations of $3.9 billion were up 5% year over year, consistent with our expectations. As discussed last quarter, we are now more than a year into the successful personal loan growth initiatives that we implemented in June of last year. We identified pockets of growth in high credit quality segments that met our capital return framework while maintaining a tight credit posture. And we've been able to achieve strong growth without relaxing our underwriting standards. We continue to execute new initiatives utilizing deep analytics to optimized pricing in low-risk segments of the business that will drive profitable growth in the quarters ahead. In fact, we expect Origination's growth to increase to high single digits in the fourth quarter. Third quarter consumer loan yield was 22.6%, flat from the second quarter, but up 49 basis points year over year. The improvement was driven by the sustained impact of our pricing actions taken since the second quarter of 2023. This tailwind was partially offset by an increasing mix of lower-yield, lower-loss auto finance receivables.

We expect we can maintain yield at approximately this level for the near term.

Also, as Doug mentioned, we saw a nice increase in our credit card revenue yield compared to the third quarter of 2024. It was up 151 basis points to 32.4%. The combination of these yield improvements across our businesses is a notable driver of our year-over-year revenue growth. Total revenue this quarter was $1.6 billion, up 9% compared to the third quarter of 2024. Interest income of $1.4 billion grew 9% from the prior year, driven by receivables growth and the yield improvements I just mentioned. Other revenue of $200 million grew 11% compared to the third quarter of 2024, primarily driven by higher gain on sale associated with our larger whole loan sale program and increased credit card revenue associated with the growing card portfolio. Interest expense for the quarter was $320 million, up 7% compared to the third quarter of 2024, driven by the increase in average debt to support our receivables growth. Interest expense as a percentage of average net receivables in the quarter was 5.2 percent, flat to the prior year, but down from 5.4 percent last quarter, reflecting the actions we took to proactively manage our debt stack, most notably the refinancing of our 9 percent bond due in 2029. The strong execution of the funding we've done so far this year, combined with our liability management, enabled us to reduce our funding costs below our initial 2025 expectations. Third quarter provision expense was $488 million, comprising net charge-offs of $428 million, and a $60 million increase to our reserves driven by the increase in receivables during the third quarter. Our loan loss ratio remained flat quarter over quarter at 11.5 percent. I'll discuss credit in more detail momentarily. Policyholder benefits and claims expense for the quarter was $48 million, up from $43 million in the third quarter last year. As I've previously mentioned, we expect quarterly PB&C expense in the low $50 million range in the quarters ahead. Let's turn to credit, where our performance continues to be very good. I'll begin by looking at consumer loan delinquency trends on slide eight. 30-plus delinquency on September 30th, excluding foresight, was 5.41%, down 16 basis points compared to a year ago, as the back book continues to run off and the better performing front book grows. 30-plus delinquency increased by 34 basis points sequentially, which is consistent with pre-pandemic seasonal trends. On slide nine, you see our front book vintages comprised of consumer loans originated after our August 2022 credit tightening now make up 92% of total receivable. The performance of the front book remains in line with our expectations and is driving the delinquency and loss improvements we are seeing. While the back book continues to diminish, now making up 8% of the total portfolio, it still represents 19% of our 30-plus delinquency. Though relatively small, the back book continues to disproportionately weigh on credit results. We expect it will contribute less each quarter ahead with our newer vintages increasing in share. And I should note that the pace of performance contribution will depend on the rate of growth of new originations, as well as the back book's performance. Let's now turn to charge-offs and reserves, as shown on slide 10. CNI net charge-offs, which include credit cards, were 7.0% of average net receivables in the third quarter, down 51 basis points from a year ago. Consumer loan net charge-offs, which exclude credit cards, were 6.7% in the quarter, down 66 basis points year over year. This follows the trends we have seen in improving delinquencies, along with better back-end roll rates and recoveries, and we are really pleased with the trajectory of losses. We continue to see strong performance from our newer vintages. While there will be typical seasonality, we expect to see continuing year-over-year loss improvement over the remainder of 2025 and into 2026. Let me update you on the credit trends of our $834 million credit card portfolio. Net charge-offs in our card portfolio improved sequentially by 288 basis points to 16.7%. We anticipated a significant improvement in card losses based on prior quarter's delinquency trends, which were better than typical card portfolio seasonality. The strong performance was further aided by enhancements in our servicing and recovery capabilities in our card business. We remain pleased with the overall quality of the credit card portfolio and feel confident that we are building an enduring, profitable business for the long term. Recoveries remain strong this quarter, amounting to $88 million, up 12% year-over-year, and 1.5% of receivables as we continue to optimize our recovery strategy. Loan loss reserves ended the quarter at $2.8 billion. Our loan loss reserve ratio, which remained flat to prior quarter and prior year at 11.5% at quarter end includes a 40 basis point impact from our higher yield, higher loss credit card portfolio. Now let's turn to slide 11. Operating expenses were $427 million, up 8% compared to a year ago. The 6.6% OPEX ratio this quarter is modestly better than last quarter and in line with our full year expectation as we continue to invest in technology, data analytics, and new products. We feel great about the inherent operating leverage of our business, which has been consistently demonstrated over the past several years as our OPEX ratio has declined from 7.5% in 2019 to its current level. We remain disciplined in our spending, balancing responsible investments with our focus on driving long-term growth and efficiency to deliver operating leverage for the future. Now, let's turn to funding and our balance sheet on slide 12. During the quarter, we continued to optimize our balance sheet. We believe our focus on balance sheet strengths is a clear competitive advantage and enhances the stability of our business. As a leading issuer over the years, we've consistently invested in our capital markets program. We've focused on maintaining best-in-class execution and controls, and as a result, have built a loyal and diversified investor base. In August, we issued a $750 million unsecured bond at 6 1⁄8%, maturing in May 2030. The proceeds of that issuance were used to redeem the remaining balance of our most expensive security, the 9% coupon bond scheduled to mature in January, 2029. In September, we issued an $800 million bond at 6.5%, maturing in March 2033. Both bonds had strong demand from new and returning investors and were issued at near-record tight credit spreads. Including these two bond issuances, we now have issued seven times in the last six quarters in the unsecured market, lowering our issuance costs, de-risking our balance sheet, and reducing our secured funding mix to 54%. This creates a lot of flexibility for us going forward. We also recently signed a $2.4 billion whole loan sale forward flow agreement with a long-term partner. The agreement substantially increases and extends a current loan sale commitment that provides further capital and funding optionality for the future. The current agreement that calls for $75 million of loan sale commitments per month will continue through the end of this year and then increase to $100 million per month starting in January. We're very pleased with the terms and the economics of the agreement and believe this further demonstrates the attractiveness of our loans and great confidence in the performance of our portfolio. Overall, from a balance sheet perspective, given the strong issuance year to date and the larger forward flow whole loan sale program, we feel great about our ability to continue to opportunistically issue when markets are most attractive in the quarters ahead. Additionally, our overall liquidity profile is as strong as ever with bank facilities totaling $7.5 billion, unchanged from last quarter end, and unencumbered receivables of $10.9 billion. Our net leverage at the end of the third quarter was 5.5 times, flat to last quarter. Turning to slide 14, our full-year 2025 guidance. First, we're narrowing our full-year managed receivables growth guidance to the higher end of the range. We now expect managed receivables to grow in the range of 6% to 8% compared to our prior 5% to 8% guidance held previously. And given our growth in receivables, along with our improving asset yields, we now expect full-year total revenue growth of approximately 9%. This is above our guidance range of 6% to 8%. We continue to expect CNI net charge-offs to come in between 7.5 and 7.8 percent at the lower end of the range we gave at the beginning of the year, and our expected operating expense ratio remains unchanged at approximately 6.6 percent for the year. As all our key financial metrics move in the right direction, we expect capital generation in 2025 will significantly exceed 2024, reflecting strong momentum in our business. We have another excellent quarter in the books as we approach the end of the year and look ahead to 2026. We see opportunity to continue to deliver outstanding shareholder value in the quarters and years ahead. And with that, let me turn the call over to Doug.

Thanks, Jenny. Let me close by saying we really like our competitive positioning. We built our business for the long run with best-in-class credit management and a fortress balance sheet. We are driving growth by innovating across products, digital experience, and data science. We are deeply committed to the communities where our customers live and work and have a great team delivering for our customers every day. The strong results of this quarter are a reflection of all of this, and we look forward to continuing to drive value for our customers and our shareholders going forward. With that, let me open it up for questions.

The floor is now opened for questions. At this time, if you have a question or comment, please press star 1 on your touchtone phone. If at any point your question is answered, you may remove yourself from the queue by pressing star 2. Again, we do ask that while you pose your question that you pick up your handset to provide optimal sound quality. Thank you. Our first question comes from Terry Maugh with Barclays. Please go ahead.

Hey, thank you. So there's been a lot of chatter about the health of the non-prime consumer, maybe some cracks, you know, showing up in auto, both of which you have exposure to. So maybe just talk about what you guys are seeing more recently. Maybe help us tie that to your commentary about higher origination growth in the fourth quarter.

Sure. I guess regarding auto, we're not seeing anything negative in our auto credit, and all of our auto continues to perform in line. with expectations. I think zooming out on the consumer, I think you've got to keep in mind that we see plenty of opportunity and we lend to individual consumers. And the customers we have on our books and the customers we're seeing come through our channels are holding up very well. And we underwrite to net disposable income. So after somebody is paid, pays their taxes, covers all their other credit, pays all their expenses, how much is left over? We're seeing net disposable income for the consumers who come in continue to be strong. And as you know, we have a lot of different cuts that we use for our underwriting, whether it be risk, the collateral, the type of product, the geography. And so we're seeing lots of opportunity, and we're not seeing issues with the customers that we have on our books. I think that the consumer generally and the non-prime consumer generally has been stable for the last 18 months. I mean, if you look at the macro data, while unemployment's ticked up some, it's still in a good place. um wages cumulatively have increased they don't seem to be increasing as much anymore um inflation is much more in check than it than it was um and savings remain pretty stable for the last 18 months um we also do a qualitative uh survey of our branch managers on a regular basis who are out talking to our customers, seeing new customers, and, you know, we look at how's the customer doing, are you seeing signs of stress, et cetera. That is stable. You know, we just did one. The results are very similar this year, you know, now as they were a year ago. We also have unemployment insurance for a subset of our customers, and we've not seen increase in unemployment insurance claims. And so, you know, we're always on the lookout. And I do think there still remains, you know, very broadly for the U.S. economy, some macro uncertainty, whether it's around, you know, tariffs or what's going to happen with interest rates, et cetera. But we feel good about the health of the consumer. Great.

Thank you. That's super helpful. Maybe just a follow up question on credit for Jenny. You know, like net charge offs continue to improve year over year. Delinquencies, you know, are also improving year over year. I'm just ex-foresight. But as I look at the magnitude of delinquency improvement, ex-foresight, it's kind of moderated. So maybe like just any color on kind of what's going on there and help us think about maybe just the direction of travel kind of going forward for delinquencies. Thank you.

Yeah, good morning. I'd say most importantly to your point about the direction of travel, we feel like the direction of travel is good. These delinquencies are in line with our expectations. And we expect the delinquency improvements year on year to vary some. So we're really focused on where the book is going and our expected losses. And we mentioned earlier, but we consistently have seen better roll rates and recoveries. And we expect, you know, continued year-on-year improvement in our consumer loan net charge-offs, which you saw dropping this quarter by 66 basis points. And so, you know, I think as we look at the consumer loan net charge-offs, we expect for them to get back within our historical range of below 7% over time.

Thank you.

We'll go next to Mark DeVries with Deutsche Bank. please go ahead.

Yeah, thanks. You know, Doug, given some of your comments about the macro uncertainty and the kind of the stable consumer, where do you think you sit right now in kind of the spectrum of, you know, of underwriting between tightening and loosing? And given some of those factors, what's your kind of bias going forward in terms of which direction you'd be moving?

You know, we really, for the last several years, have had quite a conservative underwriting posture. Specifically, what we've done is our models will tell us and all of our data science will tell us, depending on the customer, what do we think their losses will be over their lifetime. And we put a 30% stress overlay on top of that for our credit box, which basically translates into, even if that customer's peak losses during their lifetime were 30% more than we think they're going to be, we would still meet our 20% return on equity threshold. And so across our personal loans, our credit card, and our auto, we've chosen not to loosen that up. Um, you know, I think there just remains macro uncertainty. Um, we're not seeing it on our book and we're getting, you know, plenty of customers to book, um, that meet our return threshold. I think to open that up some, we do weather vane testing. So we're always booking a set of loans, you know, across product customer type geography that, um, that are in the, you know, 15 to 20% ROE, and we need to see those top above. Our current vintages are performing in line with our expectations, but they're not outperforming, and so we need to see outperformance. And I think we need to see a little more clarity in the macro. Our basic vent is always to err on the side of having really good customers who can pay us back, who meet our risk-adjusted return thresholds. We don't see a lot of advantage in, you know, taking extra risk. Our originations year on year for the first three quarters of the year are up 10%. So we're finding plenty of pockets of growth. And we'd rather innovate around the kinds of things I talked about earlier, You know, product, customer, experience, channel, because this is how we built a really strong, stable company that through the cycle is going to have good returns.

So our bent is not to reach for growth, but instead to stick with our discipline and keep finding growth by innovating and serving our customers well. okay makes sense um just to follow up for for jenny on on funding i think you mentioned your prepared comments that funding costs came in lower than you expected for the year is is this more of a product of term or spreads coming in better than you expected and you also alluded to um you know enhanced mature i mean flexibility right i think you have very low maturities anytime soon and a lot of liquidity how are you thinking about taking advantage of that of that added flexibility in the funding world.

Yeah, thanks. Obviously, funding is critical to any lending business. And I think for us, we really see it as a differentiating strength and a competitive advantage. You know, so we're always looking at the opportunities as they come. And I think what we saw this quarter was we were able to go out and go out for that first 750 million unsecured bond at 613 due in 2030. And what we were able to do with that was use the proceeds to redeem the remainder of our 9% 2029 unsecured bond. So that really allowed us to take in sort of that higher pricing that we had and bring that in. So our interest expense went from, you know, an expectation of closer to 5.4 to come in to closer to 5.2%, like you saw this quarter. So that was really what drove that. I mean, I'd say, you know, then we were also able to go out and do another issuance at six and a half and go all the way out to 2033. three. So I think we were very happy with the spreads and with the performance of what we were able to do this quarter. I mean, I would also say, I mean, we've gone out now seven times in the past six quarters. So I think we've really been able to go out there. And I think that's a testament to the team and to what they've built over time. And the flexibility that I mentioned is really about, you know, if I look forward, our next unsecured maturity is about $425 million in March of 26. And then we don't have anything maturing until January of 2027, when we have about $750 million maturing. So we can continue to look for opportunities of where we can pay down some of our higher price bonds that are callable in later needs. And we can also look at our needs for growth. We also, you know, obviously are looking at our unsecured and secured mix. And, you know, this has allowed us a little bit more flexibility there to determine which market we want to go into. So we really like that flexibility because it just allows us to continue to focus on maintaining a really conservative balance sheet.

Great. Thank you.

Our next question comes from Mahir Bhatia with Bank of America. Please go ahead.

Hi, good morning. Thanks for taking my question. If we start just staying on the topic of buybacks or capital, I guess, you obviously upsize the buybacks this quarter. Should we be any markers you can give us on like what kind of sizing we should be thinking about every quarter? Like what are you trying to solve or is there a capital? Like, what can we look at? Is it just distributing net income? Is it capital? What payout ratio? What is the target internally that we should be thinking about?

Yeah, look, we've had a pretty consistent capital allocation strategy, you know, which includes, you know, go through it again. That is, first, we're going to make every loan that meets our risk return thresholds. and we put about 15% of any loan is equity we put into it. So some of it will depend, you know, what kind of opportunities and what kind of growth we have. Then we're going to invest in the business for long-term franchise value. Then we're going to have the dividend. And after that, we're either going to allocate it to other strategic purposes or buybacks. As I mentioned, we anticipate more buybacks now that we're going to have more excess capital at the bottom of that waterfall. I think you've seen us ticking up our buyback. I think you can anticipate it ticking up into next year. I think the best I can give you is we've looked at it and we've allocated a billion dollars through 2028. I don't think it's necessarily going to be linear and we don't have specific guidance about what's going to happen quarterly.

Fanda, maybe switching a little bit, just on gain on sale, you've had a nice step up this year. I think in your prepared remarks, you talked about further increasing the forward flow. Should we expect another step up in 26 as that forward flow comes in? And maybe also just take the opportunity to talk about private credit. How does that compare with your traditional channels today? any desire to expand forward flows further and leverage the demand from private capital? Like, do you have to speak the end of it in terms of the hold versus distribute equation? Thank you.

I'm going to start with your second question first, and then I'll come back to gain on sales. Just in terms of private credit, I mean, I think what I'd just say there is, you know, we're always looking to evaluate opportunities. We've got, I just talked about, we've got great access to capital in the public markets. And so, we're really looking at opportunities really to provide either funding flexibility, and then we're also quite focused on the economics and the terms of those deals. So, I did mention we increased that and extended that whole loan sale program, you know, its forward flow with attractive pricing. And I think we're happy with the diversification that gives us, and we'll evaluate those opportunities as they come. And, you know, I think of this as additive to our current strategy, so I just think of this as one more way that we go access funding. If I go back to gain on sale, you know, gain on sale was about $17 million this quarter. That increased from last year about $10 million from that whole loan sale program. If I think going forward, I'd say, you know, I'd look more at total revenue because this will both benefit, you know, I'd say a little bit gain on sale, but also think of servicing fee revenue. So, I'd focus on the total revenue line, and it should help some.

Thank you.

Our next question comes from Moshe Orenbuck with TD Cowan. Please go ahead.

Great. And it's very encouraging to see the increase in your guidance for originations and loan growth. And can you just talk a little bit about the competitive environment, the pricing environment? And if it's not too much to also say that if, you know, how would those, how would your efforts be enhanced if your ILC charter is approved?

Sure. Look, there's plenty of competition out there, but we think it's quite constructive for us. I think our results show that year-to-date originations, as I mentioned, are up 10% from last year, even with our tight credit box. We expect fourth quarter, we'll see some uptick in originations from this quarter. We're really focused on originating to good customers that meet our risk-adjusted returns and have the right credit profile for us. Over 60% of the customers that we're booking today remain in our top two risk rates, which is where it's more competitive and there's more people playing. And so, and that's remained steady. So, we're still getting plenty of pickup in really competitive spaces. Our pricing has held. We've not needed to bring down pricing, as you see, with our yield. And that's been kicked up. And as Jenny said, we expect it to be pretty steady going forward. You know, I think there's always opportunity to drop price and pick up more. You know, we're always fine-tuning pricing, loan size, the type of product, the collateral, the data sources that we use to, you know, book loans. So, you know, I think the key for us is to continue to innovate. But, you know, we like the competitive environment. We like, you know, our positioning. And I think we're really comfortable. You know, I've said it before, we just don't chase growth. We book really good loans that are going to have good returns. They're going to be accretive to the franchise and to our shareholders. And we're seeing plenty of opportunity there. Um, you know, look, I think the ILC, um, uh, you know, I've said before is, um, if we get it is a creative to our strategy. Um, it's going to allow us to serve more customers. It's going to allow us to have, um, some, uh, you know, deposit funding. It'll allow us, you know, through the deposit funding potentially to do some more lower end of prime kind of customers, allow us to book our credit card through our own ILC rather than through a partner. And so I think it is good for long-term franchise value. We'll still have to compete in the market, but I think it would be a net positive.

And we'll go next to Don Fandetti with Wells Fargo.

Hi, Doug. I was curious to get your perspective. I mean, there's been a lot of volatility in ABS markets. And I just want to get your thoughts on how you think those markets are going to hold up in terms of access and if you think there'll be tiering for kind of seasoned issuers such as OneName.

Yeah. I mean, look, Look, I'll let Jenny say what I'd say is through lots of volatility for many years, we've always been able to access the ABS market because people trust us as steady hands who know how to underwrite. And, you know, the collateral we put into our trusts are ones that we understand well. So, you know, I think for us, there's going to be plenty of access. I'll let Jenny talk more broadly.

Yeah, I'd just say, you know, the team is obviously constantly talking to folks in the market, and I feel like we've built a pretty strong reputation and have a pretty developed program that's been out there for a long time, and so I think we're quite confident in our ability to go out into the ABS market, and obviously we'll see what unfolds there, but But I think, you know, we're pretty disciplined operators, and our partners feel pretty good about the way we run our program, so I think we're feeling pretty good about being able to go back into ABS.

Thank you.

We'll go next to Kyle Joseph with Stevens. Please go ahead.

Thanks for taking my questions. Just wondering if you're seeing any impacts from the government shutdown and if this had any impact on the outlook for this year?

You know, we're not. We've been through a number of government shutdowns. It's a very small part of our book, folks who work for the government, so we don't see any material impact and definitely no impact on our outlook.

Got it. And then just one follow-up from me. Yeah, given all the volatility in auto, I know you guys highlighted that you're seeing stability in your portfolio. So, you know, So is that something – are you seeing kind of a competitive advantage in that? Is that an opportunity? Are you getting more aggressive in terms of deploying capital there? Or is it one of those things where there is a lot of volatility and you're shying away or just kind of unchanged overall?

I'd say unchanged. We, you know, we're still a very small player in auto. So, you know, we have a lot of room to grow, but, you know, we're very disciplined operators. So we're pacing it. We're developing more dealer relationships. We're continuing to mature the business. You know, we're continuing to mature the models. And so we like what we're booking. We like the pace we're doing it at. There's obviously been a lot of noise, you know, not necessarily around, you know, our customer base in auto, but there's been lots of different divergent noise about things with the title auto, but it really hasn't affected. You know, we're going at pace, carefully, but we're going to continue to grow the business. Great. Thanks for taking my questions.

We'll go next to John Pancary with Evercore ISI.

Morning.

On the back to the origination front on your high single-digit expectation for the fourth quarter, I know you indicated that you're not necessarily unwinding or loosening standards here, and it sounds like you're not yet taking a more active pricing posture or anything. So can you maybe give us a little bit more of a detail around what changed here in terms of your expectation for origination to leg up a bit in terms of the pace of growth for the fourth quarter as you look at it?

Look, I think the biggest thing is we are always fine-tuning where we're seeing, you know, some credit outperformance, you know, in a very small pocket, opportunities to increase the loan size a little bit, do things on pricing. We're also always adding channels. And then, you know, I've given you the list before. Or we've been really leaning into product origination, or I'm sorry, product innovation, you know, in investing in it for the last 18 months. And I think you're just seeing the results of that. You know, we have an enhanced debt consolidation product. We've reduced friction for certain really good credit customers in the renewal process, which increases book rates. We have added new data sources, whether it's bank data, DMV data, other kind of data like that. We've allowed people to split their paychecks and pay us directly from their paycheck, which is better credit performance, which has allowed us to book people who choose to do that. And so a lot of it is just, you know, grinding away every day, finding pockets, pushing on it, making sure we, you know, offer a great product to customers and we're refining the business all along. So I think that's mostly what you're seeing.

I can just add one piece of context for that. Just on origination, we were at about 5% year-on-year growth. And I mentioned this earlier, but we expect to be in the, you know, the high single digits for the fourth quarter. So I just want to put some context around it. I mean, I think Doug mentioned it's through a lot of constant sort of looking and refining, but I just want to give that context.

Yeah, got it. Thanks, Jenny. And then separately, just given the very favorable capital generation that you cited and your expectation for buybacks to leg up a bit, But how do you, you know, any change in how you're looking at M&A opportunities, you know, specifically as you look at still growing the card business here, you know, and then on the auto side, is there, or even outside of that, are there opportunities you see out there that could present from an inorganic point of view? Thanks.

You know, anything that is in the market or we might want to be in the market that we think could accelerate our strategy around personal loans, card or auto or underlying things that we, you know, continue to develop, whether it be data science, digital capabilities, et cetera, we look at. And so, you know, we look at lots of opportunities every year. We've looked at, you know, well over 100 opportunities in the last five years. And we've, you know, we've acted on two of them, which were two small tuck-in acquisitions. And so, you know, what I'd say is if, you know, there's an opportunity that strategically makes sense, accelerates our strategy, financially makes sense, We think we can execute on it. It is in our, you know, kind of risk and profile of the kind of company we want to be and the reputation we want to be as the responsible lender who actually helps customers move to a better financial future. we'll look at it. It would have to be accretive to shareholders, and it'd have to be something that, you know, we wanted. So we're very, you know, we're very selective, as you've seen over time, but we're always looking at opportunities.

All right. Thanks so much, Doug.

We'll go next to Vincent Kantik with BTIG. Please go ahead.

Hey, good morning. Thanks for taking my questions. First question, just kind of a follow-up on the 2025 net charge-off guidance. You've had really good credit results this year, both delinquencies and losses. The 2025 guide, you know, being unchanged, it kind of does imply a very wide fourth quarter range. So I'm just wondering if you're seeing anything that maybe gives you uncertainty for fourth quarter and if you could describe what would get you to the low end and the high end of the range. Thank you.

Hi, Vincent. It's Jenny. You know, last quarter, we'd updated our guide from 7.5 to 8 percent to 7.5 to 7.8 percent. So, I think, you know, we really thought that we'd already brought that in a bit. I think as we look, you know, we'll be looking at those roles to loss, and we'd mentioned a little bit about the drivers of those, but I mean, we've been very happy with what we've been able to do in terms of using digital tools to both be in contact with more customers who go delinquent, and then also our recoveries and being able to do more with recovery. So I think, you know, we just, I think we're happy with having brought down the guide last quarter, and we'll be looking at those roles each month as we go forward.

Okay, great. That makes sense. And then if you could update us on your kind of long-term thoughts on capital generation, it was nice to see the share of purchases, which to your point indicates your confidence in OneMain's capital generation.

So just wanted to update, is $12.50 a share of capital generation still a good bogey for 2028 and what are the factors that gets you there and does that 1250 if that's still the right bogey does that rely on the bank charter thank you um so we we feel really good about capital generation i've said before our goal is to generate more capital each year going forward our north star remains uh 1250 we haven't put a date um on it we definitely don't need the bank charter to get to 1250. It would be accretive. I've said before, bank charter would be something we think we're well qualified for, meet the requirements, would be additive to the business, but not necessary. But as you said, this is a business that really generates a lot of capital for our shareholders. We're really happy that we have now moving into a place where we have more excess capital and we can use it for strategic purposes. I think we're at the top of the hour, so I want to thank everyone for joining.

As always, feel free to reach out to us with follow up and we'll look forward to seeing you during the quarter and uh you know on the next call thank you this does conclude today's one main financial third quarter 2025 earnings conference call please disconnect your line at this time and have a wonderful day