OneMain Holdings, Inc. (NYSE:OMF) Q4 2018 Earnings Conference Call Transcript

Feb 12, 2019 • 08:00 am ET


OneMain Holdings, Inc. (NYSE:OMF) Q4 2018 Earnings Conference Call Transcript


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Welcome to the OneMain Financial Fourth Quarter and Full Year 2018 Earnings Conference Call and Webcast. Hosting the call today from OneMain is Rohit Dewan, Interim 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 opened for your questions following the presentation. (Operator Instructions)

It is now my pleasure to turn the floor over to Rohit Dewan. You may begin, sir.

Rohit Dewan

Thank you, Maria. Good morning and thank you for joining us. Let me begin by directing you to pages 2 and 3 of the fourth quarter 2018 investor presentation, which contain important disclosures concerning forward-looking statements and the use of non-GAAP measures. The presentation can be found in the Investor Relations section of our 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, February 12, and have not been updated subsequent to this call.

Our call this morning will include formal remarks from Doug Shulman, our President and CEO, and Scott Parker, our Chief Financial Officer. After the conclusion of our formal remarks, we'll conduct a Q&A session.

So, now, let me turn the call over to Doug.

Douglas H. Shulman

Thanks, Rohit, and good morning, everyone. I'm really pleased to be with you today. Let me start with a review of the highlights for the year and then I want to share some high-level thoughts on our future direction. We had a great fourth quarter and full year in 2018 with some important milestones for the company.

We earned over $5 a share in our Consumer & Insurance segment and ended the year with over $16 billion in receivables. During the course of the year, we executed on our strategic priorities, including shifting our portfolio towards more secured lending, delivering strong credit performance, strengthening our balance sheet and executing expense discipline.

Going into a little more detail. Portfolio yields remained stable at nearly 24% through the year. We continued to focus on efficiency and expense discipline, reducing our operating expense ratio by 50 basis points for the full year.

On credit, a larger secured lending portfolio and increased collections effectiveness, helped us drive a 50 basis point reduction in net charge-offs for the full year. All of these factors, along with the impact of corporate tax reform, helped us to expand our return on receivables by 100 basis points in 2018, reaching 4.5% for the full year.

We also continued to strengthen the balance sheet, through further