All right, we'll get started. Very pleased to have OneMain Holdings on stage with me. We have Jenny Osterhout, the Chief Financial Officer. Welcome, Jenny. Thank you. Thank you for having me. Let's jump right into it, maybe just beginning with consumer. There's been renewed concerns around household budgets, just given higher gas prices and some signs of inflation pressure. How would you characterize the health of the non-prime consumer today? It's interesting. You can read the papers, you can look at all the stats out there, but frankly, when we look at our customer base, it doesn't match up with what we're seeing. Let me just talk a little bit about who our customers are. We don't use FICO to underwrite, but our average customer has about a 630 FICO, just to give you a sense. About half of them have been at their jobs for over five years. You're seeing 40% homeowners, so a really good—we call them hardworking Americans, $80,000 a year in annual income. Sort of your average American. When we look at payment behaviors, we're seeing really good payment behaviors, where you can then look at sentiment and you can spend time in the branches and you can feel that folks are trying to make things work. But I think what you're seeing right now is that they're able to sort of move things around and make their family budgets work. So at the end of the day, right now, we're still seeing everyone work through it. I would say the pieces we'll be watching are obviously the two things you watch. You watch for employment, which right now we're seeing generally very good employment numbers, and then you also watch inflation, and there on inflation, fuel prices. We've seen very modest change on our card that we have. We now have some spend data, and so we're seeing a move that's pretty minor, 7.5% of our average spend was on gas, and that's moved to about 8% of average spend. So you're not seeing major shifts, but we'll watch gas prices, and we'll also watch for other pieces like electricity bills. I think places where you can see major shifts very quickly are things that we would watch. But right now, really seeing good payment behavior. Got it, and that's helpful. Maybe we'll just jump right into credit performance. That's remained a focus this year. Net charge-offs were 8.3% in the first half. That compares to your guide of 7.4%-7.9%. What gives you confidence in achieving your guide, and what would bring you to the high or low end? Right. So that guide of 7.4%-7.9%, I think we're feeling very good about that guide. We saw really, really good year-on-year improvement. If I look at the second quarter-- First quarter, we were about one basis point year-over-year in our 30 to 89 delinquency improvement. And then if you looked at that second quarter, we were seven basis points in terms of that improvement. So we like that sort of movement. And if we look at to be at the low end of our guide, we talked a little bit about roll rates, but we've seen a little bit higher roll rates. If those were to continue, you would see us at the high end of our guide. You'd have to see the economy stay rather like it has been. To be at the low end, you'd have to see improvements in those roll rates. We're really at that point in the year when that's going to be what affects our losses and maybe some improvement in the economy. But overall, I think we're feeling very good about the guide, very good about the long-term trajectory of losses. Got it. If I just take the midpoint of your guide, that implies net charge-offs are flat year-over-year. Just over the next few years, how confident are you in migrating back to your target 6%-7% net charge-off range? If we think about how card and auto kind of impact that, maybe just any color around that. Yeah. If I look in 2019, we were a personal loans company. That's what we did. It was a different economy, and we were in the 6%-7% guide. I think that relates to why you asked the question about the different products. If you looked at us today, I would think. If you look at our consumer loan book, that's personal loans and auto, and I would compare that back to that 2019 number. Then we'll talk about cards in a minute, but cards obviously comes with a different loss rate. Last year, we saw this massive improvement. We went from 8.2% losses to 7.65% losses. It was outsized improvement. This year, you mentioned it's been rather flat. I think as we look forward, you're not always going to see an exactly linear path, but we feel pretty confident in that consumer loan loss level coming in below 7% over time. So I think you're going to see that get there. Then cards, which is included in our overall C&I, so it's consumer loans plus cards. Depending on the growth of cards and its percentage of the book, you're going to then see that impact our overall C&I loss number. Got it. Okay, that's helpful. Maybe we'll just talk about the recovery side of the net charge-off equation a little bit. Recovery rates in the last two quarters have been materially better, up by about 30 basis points year-over-year on average. What's the driver of that, and can you touch upon the sustainability of that going forward? I was saying this earlier today to someone, but recoveries are such a core piece of what we do regularly, and just in the normal course of business. We, a little while back, invested more in our internal recovery capabilities. To talk about what some of those things are, that can be looking at the tools that you use and the models that you use to determine who you're going to contact, how you're going to contact them. Let me, just to give you some examples, it used to be you call the next person on your queue at the time that worked for you. Think about in today's day and age, you've got to think about, well, how can we predict what's the best time to call a customer? How can we predict what's the best method to reach them? Should we call them? Should we chat with them? Should we text with them? Should we send them a notification in the app? Should we email them so they can see it later? You have so many more channels to determine what's the best way to reach them. Then you can also determine who should contact them. I think there's so much that we did around investing in those analytics, and it also comes with making sure you have the right data sources to figure out some of those pieces, and I think that's an ongoing effort. The world's changing. We're moving into folks who are much more digitally native, so that's going to change the way that you're doing recoveries. We also have had, since the sort of 2021, 2022 inflation, if you want to call this an inflation cycle, more inventory. As we've looked, you have more opportunity to go and look at externally the value of that inventory and what somebody else can do with it. I think it's just given us a little boost there as well in terms of recoveries. If I look at the second half of the year, I think you'll see an average of what we've seen over the past few quarters, and it's obviously been great to see the improvements that we've seen there. Got it. That's helpful. Maybe just to follow up on that inventory piece, any sense on when that excess inventory normalizes? I think you've seen some others talk about it, too. I think it's a phenomenon that's not just a OneMain phenomenon. I think as over time, as you see the trajectory of losses improve, you're going to start to see less inventory. But I think through the end of the year, you still have a little bit more inventory, and then we'll look at it again next year. Okay. Got it. That's helpful. Maybe just to switch gears a little bit. OneMain has one of the largest branch networks in the nation. Can you just talk about how that fits with OneMain's strategy? Are the branches primarily a customer acquisition advantage, a servicing advantage, or something else? Capital A advantage. I love talking about our branches. I just talked about changing customer behaviors and how folks' behaviors are changing, but I also still think there's so much value in talking to a person face-to-face. We have 1,300 branches across 44 states. If we were a bank, we'd have the seventh-largest branch network in the United States. It's core to our model, and I think it will be core to our model for a long time. Let me explain why. It builds trust, I think, when you know that there's a OneMain branch. You've seen it on your way to work, or you've seen it to drop off your kid at soccer. It gives you this sense of comfort and trust. I think trust is so important in the industry. You also have this, in this moment, and I would just say we always talk about this, but it's a pretty stressful moment. If you live in Texas and your HVAC goes out and you need a new air conditioning system and you don't know where you're going to get $10,000, when you go in, you are stressed when you have that conversation. It is helpful to have somebody who has seen many of these conversations sit and talk to you about your options. It's a consultative process where we also guide you, and our branch managers, on average, have over 14 years of experience. They've sat with many customers who have been in a position just like you, and I really think there's so much value in that. You're also, at the same time, always looking to help put the customer into a loan that you think they're going to be able to pay back. Remember, you have this dual model where you're both upfront in the initial acquisition process, but you also have your branch team members there for the minority of our customers who do need help in figuring out how to make a payment. Just having had that conversation at the beginning, you may not even be talking to the exact same person, but to know that they know Sally, or that they sit in a branch with Sally, and it's the same person that you talk to, it really builds trust, and we think it drives better outcomes. I have to say that a lot of what we're doing and investing in terms of the digital capabilities that we have, are also to help make those team members more productive. How can I take the branch manager and make it so that we really make the most value out of their time, out of their workday? This isn't just about, okay, you've got this branch network, and we're doing things the way we've always done them. I'd say this is really about how can you look and make sure you're making the most of the human connection, making the most of the experience that that person has, while simultaneously leveraging your central sites, so where you have your central sites and capabilities, and self-service. Maybe for certain activities, we'd rather just allow the customer to do it themselves. It's really figuring all of this out is a major effort of what we're doing at the company, and it's exciting. It's really exciting. You can sort of feel it. It's pretty palpable. Got it. OneMain applied for a bank charter last year. Any updates that you can share on the status of the application? Maybe also just take a step back. Just remind us why OneMain applied for a bank charter. Great. I wish I had more of an update. I don't. We think it's a really strong application. We think we've been doing this for over 100 years, and we would be a great applicant for an FDIC charter. Just as a reminder of why we did this, because I do think it is helpful for our strategy. I would say if we don't get it, we have a great strategy and we would be fine. I think of it as, the word we've been using, is an amplifier. It allows us to reach more customers in more states. I think that's the first and foremost piece of this. It also reduces some of the complexity. Just to give you an example. In North Carolina, if you lend to a customer, if you lend them $4,000, you have a certain rate. If you lend them $4,000-$8,000, you have a different rate. If you lend them $8,000-$12,000, you have a different rate. All of that drives complexity, and then you compare that in each state you have different complexity. It can be complexity on the collection side, it can be complexity on the underwriting side. All of that, there's a simplification of what's happening in the back and sort of the bowels of OneMain. We also today use a credit card bank for our credit card. We would be able to do that ourselves. Then there is some funding flexibility that it would allow us over time, and I think that could be a long-term benefit for this. It's exciting if it happens, but we'll see. Okay. Sounds like you guys have a pretty strong case to get approved for one. Maybe just switching gears again. You've indicated your reserve ratio should trend higher over time as credit card becomes a larger portion of the portfolio. How should investors think about the reserve ratio as the mix evolves, and what could the reserve ratio look like in a more normalized credit environment? CECL is my favorite topic. I think you have seen 11.6% was our reserve rate this past quarter. That was a modest increase this past quarter that really was from the growth in our card book. Cards has a higher loss rate, so we have stated our long-term loss rate in cards is 15%-17%. It also comes with a great revenue yield. We have over 33% revenue yield. Overall, it is a great product. We are happy to put it on our books. The goal here is to put profitable growth on our books. It is still such a small portion of our overall, about $1 billion on our $27 billion portfolio. But even minor increments in the percentage of, or the portion of cards receivables on our book are going to make changes to CECL, and that is because our CECL reserve for cards is about 2x that of our reserve for consumer loans. While it is really good and profitable growth, it is going to inch us up. I would say 11.7% or 11.8% are visible in the near term. I think towards the end of the year, we could trend in that direction as you see some of that growth in cards. Got it. Just shifting to loan growth. OneMain has continued to maintain a conservative underwriting box. Most of your current originations today are from your higher credit tiers. What returns are you currently underwriting to today, and what would you need to see before reopening the credit box? We underwrite to a 20% minimum ROE hurdle. It is actually pretty simple. I start with just if you think about our, you take your APR and your fees and you take your costs, so your funding costs, and then you take your operating costs, and then you take your losses. On the losses, we have had this 30% overlay. That means if we thought you are a 6% loss rate, you are actually going to be at 7.8% loss rate. Really simple, 1.3. You multiply that by 1.3. Then you get to your 20% return hurdle. You have got to hurdle over that for us to underwrite. I would really say for us, we are pretty conservative in how we really think about this as a focus on returns. We are focused on long-term capital generation. To loosen that, you would need to see on us outperformance, I would say, over time in terms of pockets where you would see that ROE hurdle perform better than you would expect. We also run something called a weather vane test, and that is basically where you take a small slice of customers who are going to perform below your 20% ROE hurdle, and we put just enough on that would allow us to read that group. If you start to see that population moving upwards and performing above that 20% ROE hurdle, that is when you start to look at, is it time for us to make moves? Unfortunately, it is not going to be something that you see externally in the environment where you are going to say, "Okay, we now think the future is going to be better." It is going to be something that we are likely to see on us. Overall, we have seen pretty good growth. I would also say, I do not think there has been need or the pressure to think about credit right now because I think we have found so many other ways for us to think about growth. Got it. Where do you see the greatest opportunities to accelerate growth without taking any incremental risk? We have that 6%-9% managed receivables guide. I think we feel pretty good about that growth. Again, for us, growth is an outcome. Our consumer loan originations this past quarter was at 10% year-over-year, so I think quite good. Accounts was 44%. Really you are seeing that impact from the credit card from a smaller line, having more accounts. You are also seeing the acceleration of those newer products. In auto, you are seeing just we can get very good growth with just new geographies, new dealers, new partnerships. For those of you who follow other auto companies, it is very much a grind-it-out business. There is so much opportunity. I think we are coming off of a smaller base. In cards, it is really about the product mix that you are changing. Some of what we are doing in terms of growing with our best customers. It's how we attract and find new customers. I think, again, we're growing off of such a small base that there's just so much more that we have in the pipeline to do to grow. In loans, I really think what you're seeing now are the fruits of our labor that we put in back a year ago, or a year and a half ago to do tests. The three things I'd call out are we have this new home fixture secured product that we're still rolling out that allows folks who have a home to get the advantage of a secured product. Then you have debt consolidation, which is a product we've had for a long time, but we've really re-envisioned how we market it and how we connect it and how we interact with the folks that we're paying off. That's become much more digital, and we've seen a lot of success there. We're also seeing bank data, which I think folks have been talking about for many years, but we're really seeing it, and it allows you to think about the offer that you're making to your customers and to really look at them in a different way. I think we're feeling very, very good about growth, and it's a good reminder that you always have to invest, and I think of it almost like an R&D arm of what we have in the background to make sure that we feel good about the future. Got it. That's helpful. So with your portfolio, cards have grown meaningfully and that segment's become profitable this year. Auto continues to grow as well. How have these product lines developed compared to your initial expectations, particularly around credit and also return profiles? Longer term, what are your expectations for each of those? Let me start with card. In card, we started in August 2021, and we did this initial test, and we said, "Oh, we want to be very mindful that we get a good read on the customer." I think we're very, very glad that we did, and we're very glad we did it in that moment in time because I think it was actually quite lucky because we were able to see that there was something happening in the card market, and we were able to adjust before we really opened up and put a lot of these accounts on our books. I think that was both deliberate and a little bit of luck. But obviously, if you look at what's happened, we were able to set up this card in a moment when the economy has been okay. I would not say it's been great. Now we're finally at this place where I think we're feeling very good about our card product. You've got 17.7% losses in the second quarter. You've got line of sight to getting within your 15%-17% range. I talked about our 33% revenue yield. As you scale a card, you start to get cost improvements. Really feeling quite good about that team. 1.4 million customers on a $1 billion portfolio. It's really all coming in line. We sometimes call it a teenager. I think we may be moving into our early 20s here. It just feels like it's all coming together, and I think we're feeling very good about the card. It may have been taking a little bit more of a moment to get there, but I'm sure happy we stuck with it to get through that. Auto, we started in 2020. We started auto on us with independent dealers. Think of when you look at a dealership and you see multiple types of cars on their lot. We are going into those independent dealers and doing direct lending with them. We started there, and then in April of 2024, we bought an auto company called Foursight based out of Utah. Today, we've got this $3 billion portfolio. It's performing very well. It's performing better than the industry. I think we're feeling very good about it. Now it's really focused on what I talked about before, which is geographic expansion, new dealers, making sure you're really looking at how your sales team is performing, looking at our analytics. How can we improve based on what we already know about this customer set? Auto is a really interesting business. It's a little less volatile. It also comes with slightly lower returns. I think we like the balance that these two new products give us and for the long term, and really think it just opens a whole new world. I think before OneMain had about a $1.3 billion total addressable market, and now we are looking at an over $1 trillion total addressable market. So it sort of changed the whole game in terms of where we're playing. Got it. Maybe just stepping back, are you seeing any evidence that card and auto are just becoming more valuable to the franchise, either through higher retention, lower acquisition costs, or even greater product cross-sell? Having 4 million customers across all three businesses, there was a while there we were sort of at a steady state of about 2.5 million customers. It does start to feel like you have this new opportunity. We really do run each of these products individually to make sure they are individually profitable. Then over time, explore the value of the customer base across products. I think the most valuable cross-buy opportunity for us will be having a customer start with a transactional card product, getting to know them. Usually, you start with a lower FICO, smaller line. You get to know them. A loan product is much more episodic. When they have that need, then you can find them in the app because they're going into the app regularly. That allows you to basically acquire a personal loan customer at about a quarter of the cost of what it would take to acquire them on the open market. There's real value in that. I think it's something that we're exploring over time. You've got to grow the card business first before you can work on the cross-buy. I think it's really something that we focus on a lot, which is how do you drive value in the near term while also thinking about the long term, and it's something we'll be focused on. Got it. Become a greater piece of the pie, but I still think personal loans will be pretty dominant. Never say never. I think we'll always look at products, and we're always thinking about our customers and looking at what they're doing and what their needs are. But at its core, OneMain is a pretty focused company. We really try to make decisions very quickly and really prioritize where we're going to put our effort, our time, and our energy. I would say never say never. We'll look at potential other products. But for now, I think you guys have a pretty good sense of our strategy. Okay. That makes sense. I want to touch on competition today. How would you characterize the competitive environment? Are competitors behaving rationally from a pricing and underwriting perspective? How has demand for credit evolved relative to, let's say, six months ago? Yeah, it's an interesting one because I think we've seen demand for non-prime has been pretty steady. There was a period in 2021, 2022, when you started to see folks really give outside offers, really reach for customers, and you saw some irrational behavior. We are not seeing that right now. From what we're seeing, and it's something we monitor very closely, we're seeing pretty rational behavior. We're seeing no sense of major competition. Again, I think we've been putting so much effort into how can we attract customers in new and different ways. That's really been what's driving our growth. We're quite happy with where growth is, but I don't think we see any sort of irrational competition right now. Got it. Maybe just double-clicking a little bit, how are the fintechs behaving versus the traditional balance sheet lenders? Any differences in competitive intensity? It's always good to be mindful that you're on the same playing board, but you're playing different games, right? I'd say what we've learned is we really focus on returns and we really stick to our knitting. Other folks may be focused on growth because that's what they're valued on or focused on building a long-term cross-buy opportunity. I think you've got to remember they can play their game, you got to play yours. But I haven't seen any major shifts in either of these two bases right now in what we're seeing. Okay. That is helpful. Just to switch gears, do you have any updates that you can share on the state AG lawsuit? Anything else related to regulation you were paying attention to? I am always paying attention to regulation. I do not have an update on the state AG lawsuit. There is a statement posted on our website. We obviously think that the claims are without merit, and we think there are issues that they are looking at that were already reviewed by the CFPB when they came in in 2023. Really nothing to comment on there. Always really mindful of state and local regulation and watching what is happening, but nothing of notice. Got it. Okay. Maybe just touching on capital returns. It has remained pretty strong with $137 million of repurchases and over $200 million of dividends year to date. Looking ahead, how should investors think about balancing loan growth, dividends, share repurchases, and any future investment strategic initiatives? We have talked a lot about profitable growth. I think for us, you are going to focus first and foremost on when you see opportunities to grow, you are going to put that back into the business. That is where you will start. There are also investments that we are making for the future. That can be investments in our technology and analytics, in our new products, in cards or in auto. We will also look at where we think we need to make investments. Then our dividend coverage, it is around 7% right now. It is pretty healthy. We will look at inorganic opportunities. That is always an option for us. I would say, in the absence of what is left over, you should expect would largely go to share repurchase. I think you have started to see a little bit of a shift there. We think it is really attractive right now. I think it is pretty much par for the course. You will continue to see that as we look forward. Okay, got it. I want to talk about rate hikes/cuts real quick. I think coming into this year, we were expecting three cuts. Now we are potentially expecting three hikes. How is the balance sheet positioned and what is the kind of impact from the new kind of forward curve? If there is something to be proud of at OneMain, to lend money, we need to borrow money, and I think we do that quite well. We have got these staggered maturities. We have really had a long-term staggered maturities strategy where we have both ABS and high yield. I think that strategy will really pay off. We have been through a rate hike type environment where I think we have seen some of what that preparation really pay off and insulate us from some of the immediate hikes. I think for us, that is something we will be mindful of, but we build these relationships for the long term. We think we have got really good ability to access capital, really good access to the capital markets, a great team. I think as we look ahead, we are obviously watching this piece, but I think we are sitting in a pretty good spot. Okay. We have about five, six minutes left. I will open it up to any questions from the audience. Okay, no questions, so I will keep going. Okay. You've previously talked about investments in AI and technology, and we've already seen some benefits like higher recoveries. Looking ahead, where do you see the biggest opportunities for technology to create value, whether it's through credit outcomes, operating efficiency, growth, or customer experience? I think here this is one where we're both excited about these opportunities, but we're also mindful of this is an area where you want to drive and lead, but you also want to be very protective of your data and make sure you have very good governance. If I look at some of the places where we'll focus tech and development, it's such an obvious area to focus on, but it's really one where we're embedding AI into our development, looking for improvements in efficiency and also, frankly, effectiveness. How can we be better at what we do? How can we be faster in what we do? We're also looking at team member productivity. I think we've mentioned this before, but one example of what we have is something called OneAdvisor. It basically allows our team members access to information where they can find what they need at their fingertips more easily. It used to be you had to go into if it was online, it was in a specific folder, you'd have to go ask somebody which folder it was in to find it. Now you get this very easy-to-find pieces of information. We're finding our team members, about half of them are using it regularly, and you're seeing a large number of pings on OneAdvisor every day. We're also looking across the company. You can take finance as an example. We're looking at opportunities. Where can we leverage AI to help us do work, whether it's faster or better? I think I'm most excited about the better. How can we make our modeling even better? We're looking across all our functions and how we can do that. I'm very mindful. I also want to make sure I get a return for that investment. There's a lot of ideas out there. You have to make sure that those ideas are really backed by a return and where you think you're going to be able to get that back. Very mindful of that. Then the last, the investment that you also have to make in making sure that all of this is happening in an environment that's well-governed and you feel very comfortable about is really important. That's another piece that we're quite focused on. It's pretty exciting. I know everybody's excited about AI. I think we are too, but I think we're also quite mindful with how we're putting it in place. Got it. Just about two to three minutes left. Maybe just in closing, what is the key message that investors should be taking away from this presentation? What do you think the market may be underappreciating about the OneMain story, and what gets you most excited about the story going forward? I think we have been around for our customers for a very long time. We are very focused on serving this customer base. I expect for there to be a lot of demand for credit in any macro environment going forward, and I think we are really well-positioned. I talked about the branch plus digital plus Central for the go forward. I think there is just so much opportunity there. Plus, we have got these newer products, so I think there are some exciting new pieces. I also just think we are hyper-focused in terms of how we are doing this. So I think it is a pretty exciting time to be at OneMain or to invest in OneMain. I think we have got a pretty bright future. So I think we are all just very excited to move forward in any environment. Okay. Great. I think with that, we will end it on a positive note. This has been great. Great. Thank you. Thank you so much, Terry.