OneMain Holdings (OMF) Q2 2026 earnings call transcript

Thank you, operator. Good morning, everyone, and thank you for joining us. Let me begin by directing you to page two of the second quarter, 2026 investor presentation, which contains important disclosures concerning forward-looking statements and the use of non-gap measures. The presentation can be found in the investor relations section of the one main 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, July 29th, 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 begin with a few highlights from the quarter, and then discuss the progress we're making across the business as we continue to execute our strategy and drive profitable growth. We had strong financial results in the quarter, including very good receivables growth driven by product innovation and positive delinquency trends, which point to lower losses in the second half of the year.

Strong year-over-year originations growth of 10% supported receivables growth this quarter. By focusing on high-quality loan originations, continuously improving customer experience and enhancing our product offering, we have driven this growth while also maintaining a conservative underwriting posture.

Credit performance was good and tracked in line with our expectations. And early delinquency trends continued to improve. Our 30 to 89 delinquency declined seven basis points year-over-year, accelerating the year-over-year improvement from last quarter's one basis point decline. In the first half of the year, 30 to 89 delinquency declined 28 basis points. That's better than last year and the pre-pandemic average.

We're pleased that the latency performance continues to move in the right direction, which supports our expectation for improvement in losses over the second half of the year and into 2027.

C&I net charge-offs were 8.2%, and consumer loan net charge-offs were 7.8%, both in line with our expectations. And we continued to have strong recoveries in the quarter.

We reached a significant milestone this quarter, surpassing 4 million customer accounts, an increase of 14% from a year ago. This growth has been driven by the success of auto-finance and credit cards, combined with our continued product innovation in our core personal loan business. In our personal loan business, several recent initiatives are progressing very well. Our enhanced debt consolidation offering makes the loan process easier for our customers and helps most customers improve their credit scores.

Also, because the majority of our debt consolidation loans are secured, they have lower losses compared to our overall personal loan portfolio. Our home fixture secured product offering was introduced earlier this year. While it's still early, we are seeing good uptake from customers and strong initial credit results. Like any new offering at one main, we started with a small test to prove out results.

And given that we like what we've seen, we are now starting to expand it. We also continued to expand our analytics around bank data to deliver more personalized offers and improve customer engagement. Insights from this data strengthen our underwriting, improve credit outcomes and increase pull-through rates.

Initiatives like these are helping us better serve our customers while strengthening the long-term performance of our personal loan business.

Turning to our newer businesses, starting with auto-finance. Originations grew 19% during the quarter. Receivables reached $3 billion, an increase of 14% year over year. We continue to drive solid growth through the expansion of our dealer network and enhance underwriting capabilities. Importantly, credit performance remains in line with expectations and continues to outperform the broader industry.

Turning to our credit card business, we delivered another very strong quarter with positive results across all important metrics. Receivables increased $161 million in the quarter and nearly $400 million year over year. New bright-weight cards, which include both higher rewards and no reward credit cards, continue to attract new customers and support strong growth. Customer accounts increased to $1.3 million, up $155,000 from last quarter and more than $400,000 from a year ago.

Credit metrics continue to improve with lower losses and delinquency than a year ago. Just as importantly, as we scale, we're seeing good revenue growth and continuing to improve the long-term profitability of the business with marginal operating costs per account down about 25% year over year. We're encouraged by the continued growth and improvement in the profitability of our credit card portfolio.

Looking ahead, we'll continue to invest in customer acquisition, digital capabilities and collections optimization to strengthen credit performance and support profitable growth for the long term.

As I discussed last quarter, we continue to invest in technology, data and AI capabilities to enhance our business and drive growth and efficiency. We are currently rolling out a new loan origination system for customers and team members that streamlines our process and should help support profitable growth. We've built an internal AI tool that gives our more than 9,000 team members information they need, like policies or procedures, at their fingertips in an intuitive conversational manner, driving efficiency and speeding up customer service.

Our engineering and product teams use AI tools to drive efficiency across the product development lifecycle. We are also learning and piloting AI in a very controlled manner in a number of areas where we see high potential returns and value for our customers.

Let me briefly touch on the consumer. Although the current economic environment continues to have some uncertainty, our customers remain resilient and metrics across the industry point to a strong consumer. While we are mindful that geopolitical tensions and fluctuations in energy prices create some risk, we have not seen it show up in our data and unemployment remains low, providing ongoing support for credit performance.

As always, we are closely monitoring trends across the consumer and our portfolio, but credit is performing well, showing that our customer has been able to make it work. And our early stage consumer loan and credit card delinquency trends give us confidence that we are in a strong position.

Turning to capital allocation, our priorities remain unchanged. We will continue to extend credit to every customer that meets our risk return framework, and we will continue to invest in the business to meet customer needs, drive efficiency, and create long-term shareholder value. Our regular dividend, currently $4.20 per share on an annualized basis represents a 7% yield at today's share price.

In the second quarter, we repurchased 576,000 shares for $32 million, bringing our total repurchases year to date to $137 million, which is $100 million more than we repurchased in the first half of 2025.

Looking ahead, our approach to share repurchases will continue to be guided by several factors, including the capital requirements of the business, market dynamics, and economic conditions.

We continue to feel good about our business as we're capitalizing on the core competitive advantages of one may, including best-in-class data science and underwriting, an experienced and proven team with unparalleled expertise in serving the non-prime consumer and a strong diversified balance sheet with a long liquidity runway. We remain confident in our competitive position and see many opportunities to drive capital generation growth well into the future as we execute on our strategic priorities.

With that, let me turn the call over to Jenny.

Thanks, Doug, and good morning, everyone. As Doug said, we delivered strong second quarter results across key financial metrics, including profitable growth, good credit results as our customers remain resilient, disciplined expense management, coupled with investment for the future, and continued strong balance sheet management. This reinforces our confidence in the strength of the business and our outlook for the future.

Delinquency metrics, the best indicator of future loss performance are improving relative to last quarter. And we're seeing origination growth accelerate across our business. Consumer loan origination grew 10% year on year, while both card origination units and purchase volume increased significantly.

This strong performance supported our 7% growth in managed receivables up from 6% in the first quarter. Importantly, we were able to deliver this growth while maintaining our conservative credit posture across all our products, as we continue to focus our underwriting on higher quality customers positioning us well to continue to generate attractive returns and create meaningful shareholder value in the quarters ahead.

During the quarter, we raised $1.1 billion in the secured market, further strengthening our funding profile and adding flexibility for future issuances. On the capital return front, we repurchased 2.5 million shares in the first half of the year, more than three times the amount repurchased during the same period last year.

Second quarter gap net income of $152 million or $1.32 per diluted share, compared to $1.40 per diluted share in the second quarter of 2025.

DNI adjusted net income per diluted share of $1.31 compared to $1.45 in the second quarter of 2025. As higher total revenue in the current quarter was offset by higher loss provisions driven largely by a higher reserve bill in the quarter due to the larger growth in receivables we saw this quarter compared to the prior year.

Importantly, capital generation, the metric against which we manage and measure the business totaled $229 million. Up 3% from $222 million in the second quarter of 2025.

Managed receivables ended the quarter at $26.9 billion, up $1.6 billion or 7% from a year ago. Managed receivables at the end of June included $1.7 billion of receivables serviced for third parties.

Second quarter origination for $4.3 billion increased 10% compared to the second quarter of last year. This strong growth was achieved while maintaining our conservative underwriting, reflecting the effectiveness of our new products and innovative growth strategies.

The personal loan product innovations Doug discussed are gaining traction. Importantly, early indicators of performance suggest these initiatives are attracting more customers while also delivering solid credit performance consistent with our expectations.

In auto finance, originations grew by 19% year on year during the quarter, supported by the ongoing expansion of our dealer network, continued improvements in our underwriting and growth from our partnership.

Additionally, our credit card business also delivered strong growth. Customer accounts increased 44% year on year and purchase volume increased 57% year on year, driven by new reward options and enhancements to the bright way value proposition that attracted new customers and deepened engagement with existing ones. Key metrics remained strong, including utilization and revolve rates. And credit performance continued to steadily improve.

Turning to yield. Our second quarter, consumer loan yield was 22.7%. Up 16 basis points from last quarter and 11 basis points year on year, even as our lower loss, lower yield, auto book continued to grow as a percentage of our consumer loan portfolio.

We continue to see strong asset yields as we grow our portfolio, which is a testament to our discipline pricing approach. Looking ahead, we expect consumer loan yield to remain around recent levels and follow typical seasonal patterns.

We also continue to see strong revenue yield improvement in our credit card portfolio, with total card revenue yield increasing 330 basis points year on year to 33.6%.

Total revenue in the second quarter was $1.6 billion, up 6% compared to last year. Interesting income of $1.4 billion grew 6% from the second quarter of last year, driven by net finance receivables growth and the improvement in asset yields that I just mentioned.

Other revenue of $207 million was also up 6% from last year, primarily due to higher credit card revenue as we grow the card business, along with higher servicing fees from our portfolio of loans serviced for third parties.

Interest expense for the quarter was $326 million, up 3% compared to the second quarter of 2025, driven by higher average debt to support our receivables growth.

Our interest expense as a percentage of average net receivables was 5.3% this quarter. Down from 5.4% in the second quarter of 2025, reflecting the actions we took last year to proactively manage our debt profile and take advantage of market windows to best position us for the future. We expect our funding costs to remain at approximately this level throughout the rest of 2026.

Second quarter provision expense was $610 million, comprising net charge off of $506 million and a $104 million increase in our reserves driven primarily by the increase in receivables during the second quarter.

Our loan loss reserve ratio of 11.6% is up slightly from 11.5% last quarter, primarily due to the growth of the card business, which carries a higher reserve rate.

Policyholder benefits and claims expense for the quarter was $44 million, down from $54 million in the second quarter of last year.

The year on year decrease was driven by a reserve release in the second quarter. We continue to expect quarterly PBMC expense in the mid $50 million range going forward.

Let's turn to credit starting on slide eight. 30 to 89 delinquency on June 30, excluding foresight was 2.82%. Down seven basis points compared to a year ago, improving on the trend we saw last quarter. On slide nine, you see the 28 basis point year to date improvement and 30 to 89 delinquency was better than the 17 basis point improvement last year and 24 basis point improvement in the pre-pandemic period.

90 plus delinquency X-4 site was three basis points above last year. A solid improvement over the 14 basis point year on year increase we saw last quarter. And we expect 90 plus delinquency to follow the improvement we saw in our 30 to 89 delinquency throughout the remainder of the year.

Combined, our 30 plus delinquency X-4 site was 5.03%. Down four basis points from the prior year, improved from the 14 basis point year on year increase last quarter.

It is also worth noting that our back book, which comprises originations prior to August 2022, continues to present a modest headwind to our credit performance. As it remains a disproportionate contributor to delinquency rates, as shown on slide nine, the back book now represents just 4% of the portfolio but accounts for 12% of 30 plus delinquency. More than twice the level we would typically expect for vintages at this stage of season A. While the front book vintages are performing well, the negative impact of the back book stubbornly remains on our balance sheet.

Moving to net charge offs for the quarter, as shown on slide 10. Second quarter C&I net charge offs, which include the results from our growing higher loss, higher yield credit card portfolio were 8.2%. Down 21 basis points sequentially and up 63 basis points year on year. Consumer loan net charge offs which exclude credit cards were 7.8% in the second quarter.

Down 25 basis points sequentially and up 58 basis points from a year ago. I'll discuss credit cards separately in a moment. But let me first talk about the consumer loan portfolio loss performance. The year on year increase was expected as it was predominantly driven by the elevated 90 plus delinquency we saw last quarter, rolling through to loss this quarter.

Importantly, as I just discussed, we are seeing better 90 plus delinquency performance this quarter as compared to last quarter. Combined with the improvements in early stage delinquency metrics, these give us confidence that our losses will improve significantly in the second half of the year.

Recoveries in the quarter were strong at $117 million, or 1.9% of average net receivable. This performance was driven by continued enhancements to our comprehensive loss recovery strategy.

As a reminder, C&I net charge offs include a 43 basis point contribution from our credit card business, which has higher yields and higher losses. We like the overall economics, given the attractive risk adjusted returns we are generating on the credit card portfolio.

I'd like to briefly discuss our improving credit performance in credit cards. Credit card net charge off declined 186 basis points year on year to 17.7%. Additionally, 30 plus delinquency fell 146 basis points year on year, giving us line of sight for their improvements in year on year loss performance over the remainder of the year. These sustained improvements strengthen our conviction in the credit card business, as we look to continue to grow accounts in a disciplined way.

Low loss reserves ended the quarter at $2.9 billion, or 11.6% of ending net receivables. They increased in the low loss ratio from 11.5% last quarter and last year, was driven by the change in mix of our portfolio associated with the strong growth in our credit card business as card receivables grew more than 50% year on year. While the credit card reserve ratio was largely unchanged from the prior quarter, it is nearly two times higher than our consumer loan portfolio reserve rate. Given this dynamic, the continued growth in the credit card business will modestly raise the overall reserve ratio in the quarters ahead.

Now let's turn to expenses on slide 11. Operating expenses were $439 million, up 6% compared to a year ago, driven by continued investment in our credit card and auto finance businesses, as well as data science, technology, and digital capabilities. These investments are focused on enhancing the customer experience, improving our team member or performance by boosting productivity and effectiveness, enhancing data and analytic capabilities, and other efforts to drive long-term growth and future operating efficiency.

Our Outback's ratio this quarter was 6.7%, flat to the prior year, and down 10 data points from last quarter. The sequential improvement reflects our disciplined expense management and the ability to continue to drive operating leverage. As we look ahead, we will thoughtfully manage expenses while investing for the future.

Now turning to funding and our balance sheets on slide 12. During the quarter, we further strengthened our balance sheet. In June, we issued a $1.1 billion three-year revolving ABS. Strong, broad-based demand from both new and existing investors through very tight spreads and attractive pricing of about 5.1%. Piliding the strength of our funding platform and excellent access to capital.

At the end of the second quarter, our bank lines were unchanged at $7.5 billion, providing substantial liquidity and additional funding flexibility to our program. Our net leverage at the end of the second quarter was 5.5 times, flat to a year ago, and within our target range of four to six times.

Our balance sheet remained the key competitive advantage supported by staggered long-term maturity, diversified funding mix, ample liquidity, and consistent market access. This combination provides flexibility, supports stable execution, and positions as well through economic cycles.

Turning to our full-year 2026 guidance as shown on slide 14. We are reiterating all our guidance metrics. We are maintaining our full-year managed receivables growth in the range of 6 to 9%, supported by momentum across all three of our products, personal loans, auto finance, and credit cards.

We expect C&I net charge offs to come in between 7.4 and 7.9%. As we see improving early and late stage delinquency trends that support our expectations, that losses will continue to improve as we look ahead.

And we are maintaining our OPEX ratio guide of approximately 6.6% per year. In closing, we are pleased with our financial performance this quarter and the ongoing progress we're making on key strategic priorities. Our growth initiatives are gaining traction as we are across our newer products, auto finance and credit cards, and innovating in our personal loan business, all will maintaining a conservative underwriting posture.

The positive direction of early stage credit trends reinforces our view that losses will decline significantly in the second half of the year. As we look ahead, we remain focused on disciplined growth while delivering efficiency across the organization, which together with our strong balance sheet and funding platform position us well for the future and support our ability to drive capital generation growth, excess capital, and attractive returns in 2026 and beyond.

So with that, let me turn the call back to Doug.

Thanks, Jenny. In closing, we remain very confident in the strength and trajectory of our business. We now serve more customers than ever with over four million accounts across a diverse set of products, positioning us as the lender of choice for hardworking Americans.

We remain committed to our conservative underwriting posture while continuing to drive growth in our personal loan business through product innovation and profitably scaling, auto finance, and credit cards.

Credit metrics are trending well, and we expect credit performance to improve in the second half of 2026 with further improvements expected in 2027. And our strong balance sheet with staggered maturities and excess liquidity remains a key competitive advantage.

Before I open it up to questions, I'd like to briefly mention two recognitions we recently received. First, one main was once again named a most loved workplace by the Best Practice Institute, marking our fifth consecutive year receiving this recognition.

This distinction is based on direct feedback from our team members and reflects the special culture we've worked hard to build at one main. Second, one main has been named to Time Magazine's inaugural list of America's Best Companies, which evaluates companies across financial performance, employee satisfaction, and transparency. We're proud of these recognitions because they reflect the strength of our business, the dedication of our team members, and our continued focus on creating long-term value for our customers, employees, and shareholders.

I'd like to thank all of our team members for their commitment to our customers. Their outstanding execution and the support they provide to one another every day. With that, let me open it up to questions.

Sure, hi Moosh, I think, as I said, we maintained our guidance in that range of 7.4 to 7.9. And the most important metrics that we look for for the second half and into next year are those delinquency metrics that you mentioned, which are performing quite well. That would be the 30 to 89 delinquency excluding foresight, which was down seven basis points year on year, which is a further decline from the one basis point decline that we had in the first quarter.

And the 30 plus delinquency excluding foresight, which was down four basis points and better than the 14 basis point increase we had last quarter and the 90 plus delinquency, which was three basis points up year on year, but actually much better than last quarter's 14 basis point increase. So all of those delinquency metrics are moving us in the right direction. And they're where we, you know, we're seeing us land where we expected based on the fourth quarter of last year and last quarter's 90 plus. And so then if I look forward, you know, we look at a variety of scenarios and a range of outcomes and we're watching that delinquency I just mentioned. We'll watch the mix of the book roll rates growth and then of course the macro environment.

But, you know, to get to the midpoint of that range, we would need to see some of that better than normal seasonal delinquency continue. And we're feeling pretty good about that. Got it. Maybe just kind of to follow up in a similar vein, you know, the every aspect of the P&L was a little better than our expectations, fee revenue, net interest income, expenses, and even net charge-offs were kind of in line, but the reserve rate, you know, kind of went up a little bit more.

When we think about that going forward, I think you had mentioned on the call that it would be increasing modestly because of the credit card. I guess I would assume that the growth rate, you know, the relative growth rate of credit card loans is probably highest in Q2. So I guess I would hope that it would have particularly given what you had mentioned about improving kind of credit card credit quality that would have potentially less of an impact going forward, but you know, kind of wanting to get your views on how to think about that reserve rate going forward.

Happy to talk about that. So we did talk about that change in reserves, which is really that portfolio mix impact.

And that is coming from cards, which as you mentioned, is performing quite well. And we do like the performance of credit. You know, that card reserve rate is about two times our consumer loan portfolio reserve rate. So even as it improves, you know, as the loss performance improves, I think it takes sort of time for it to come into your reserve rate. So, but as we did see really strong growth in the second quarter, I do think we expect to continue to see really strong growth. So even though it's only 4% of the portfolio, you know, it's going to 4.5% or 5% will raise our overall reserve rate.

I'd expect that reserve rate to move up to around 11.7 in the second half of the year. So I don't think it's a major shift, but I do think it is going to put some pressure on that reserve rate.

Good morning. Can you maybe just talk about the recovery benefit you saw, you know, this quarter, it was quite elevated, and as we look out to the back half of the year, does the improving credit in the back half also contemplate some sort of elevated recoveries, and maybe just some color on kind of what's driving that, whether it's, you know, just selling more inventory or some improvements in your recovery process.

Thanks. Yeah. So we are pretty pleased with our strong recoveries, and saw good trends in the second quarter, and it was a strong driver of our net charge off performance. We've been making investments, and we've talked about it for the last few quarters in our internal capabilities, and that's driving a lot of the improvements that we're seeing.

So internal changes would be way, you know, things like how we get in touch with customers, how we staff, how we manage our teams, but we are also looking at charged off sales with our long-standing partners and make those sales when we see attractive economics. We have had more inventory of charged off loans from the past two years, so we do have more assets to potentially sell.

And it's, so I'd say it's really what we've been seeing as a mix of both internal recovery capabilities being better, and having more of the inventory and finding partners where we can get good economics on those sales. If I look for the rest of the year, you know, I think we can expect for our recoveries to be pretty good, I'd say around maybe the first half, so something between the first quarter and the second quarter, but I think we're pretty confident that what we like, what we're seeing, and we're gonna continue to see good recoveries going forward.

Yep, so we talked a little bit about this, but we've seen historically low row rates at the end of 2024 and going through 2025, actually 2025 or some of our lowest row rates that we've seen certainly since the pandemic. In the first quarter, we saw some normalization back towards more typical historical levels. But what we like that we're seeing is if you look at the 30 to 89 role to 90 plus, we saw that peak in the first quarter and start to come down this quarter, which we think is a good indication that those rolls through the loss will come back down as we look ahead and help drive our loss performance in the second half of the year.

And I do think that's what you're seeing when you look, you mentioned GCO. And I think when you're seeing that, we're seeing some of that role that I just mentioned from the first quarter go all the way through and roll from 90 plus to loss this quarter. And into that GCO bucket. So it's a bit of a roll rate story and we are excited by what we're seeing in the early buckets and feel pretty good about the future on GCO and more importantly where we see NCO to going back to your last question on recovery.

Sure. We really don't have an update on the ILC. You know, I've said before an ILC would be accretive to our strategy, but we don't need it to execute our long-term strategy. You know, we feel we have a very strong application and we continue to have constructive conversations with the relevant agencies. And so on that, we'll keep people posted when there's any news.

You know, on originations, we're pretty happy with, you know, what we're seeing with originations. You know, as a reminder, we continue to have our conservative credit box. And the way we manage that is, we still have really, since 2022, had a 30% stress overlay. So, you know, we've put assumed more stress in the portfolio than has actually showed up, just to be conservative in our underwriting models.

And we're seeing really nice growth across all of our business lines. And it's really driven by what we talked about earlier, which is, you know, in personal loans, a lot of product innovation, whether it's debt consolidation, home fixed-year, secured, streamlining application processes. Better information at the fingertips of our customers and our employees to make it just easier to move the loan process forward without compromising quality.

The, in auto, we've been adding new dealers, partnerships, refining our models, in card. We've now created a variety of products with different kinds of rewards, some fees, some no fees, refined our models. So, we're very, you know, we're able now to target and bring on customers that are lower risk, but also more likely to use their full line.

So, it's just a lot of things. You know, we're not changing our guidance at all, but you know, it's what we're seeing we're really happy with.

Yeah. I mean, look, the first change is in the past, we've always had loan consolidation as part of what we, you know, it's always been in offering, but it's more been a intake offering. So, somebody wants a loan and we then start talking to people about, you know, we see you've got a number of credit cards and other loans.

You know, let's look if we could consolidate those, get you a better deal, lower, you know, monthly payment, that kind of a thing. We've been, we developed now an outgoing proposition, which is consolidate your loans with us, bring down your monthly payment, those kinds of things. So, there's a set of, you know, analytics on the back end where we think we could really provide value to a customer where we do outbound marketing.

And then once it comes in, we now have tools that can quickly, you know, we've built out technology that can quickly, you know, pre-populate for our employees the different kind of offer that they can make for consolidation, all of the information about people's loans that it's available on the credit bureau to do it. And then we've really refined the direct payoff. And so we've kind of built on the back end payment systems much easier, better, faster for us to actually pay off those other loans, which, you know, obviously leads to good credit performance. So it's kind of across the board from outbound marketing, just streamlined experience to back end payment processing to allow the loan consolidation.

Yeah, loan yield has some of our later stage, you know, you get the 90 plus coming through in your loan yield. So you have both your revenue and line. And you also have some of the impact from auto coming through. And so usually we typically see loan yield moderate a little bit in the second half of the year.

And so I just say, you know, I think you can expect it. We were at 22.7 this quarter, you know, that was about 16 basis points up from the first quarter. It's our highest loan yield that we've had since the second quarter of 22, even while we're growing the auto book. So I do expect, you know, as we look ahead, that should shift down slightly. We're talking more like the first half in total. So I think you can, you know, the first half in total was about 22.6%. So I think that's what you can expect going forward.

Yeah, no, I'm happy to talk about it. I mean, look, first I just wanna make sure to frame as a reminder, you know, we view growth as an outcome. You know, we're very clear about the math that you add receivables, you add profit, and so growth is great, but we don't chase growth. And we see growth as a outcome of a great product with a clear value proposition to our customers, marketing, analytics, customer experience, streamlining the company.

All of those things lead to growth, but we keep, you know, very disciplined around our credit box. You know, I think if the broad question is, what would it take to open up? You know, it's a number of things. There's the rather of ed and testing.

There's out performance like that are the things we're booking are performing significantly better. The new customers we're booking performing significantly better than our models, what have told us. I think there's some, you know, question around clarity in the metro, or I'm sorry, in the macro environment. And so, you know, on the weather bank specifically, we're seeing it performed just fine, but it's not crossing or rather than testing isn't crossing our 20% return on equity thresholds, which is, you know, what it takes for us to book alone. I think we're really happy our current book is performing in line with expectations, and we constructed a book that has credit moving in the right directions and has really healthy origination growth.

But, you know, we're not at the point where we plan to open the box, and, you know, we just need to see both weather vein and current book doing better than expected.

Yeah, let me start, and then maybe Jenny wants to add something. Look, our bad back framework's super clear. We're going to invest in the business first. We're going to invest in growth when we see customers coming in that are going to meet our 20% return on equity, thresholds.

We're going to make sure we pay our dividend, which, you know, has a very healthy yield. And what's left over will be used for, you know, buybacks and other strategic opportunities.

This quarter, we just had, you know, really healthy growth, which aid into the amount that we could use for buybacks.

And, you know, going forward, you know, it'll depend on all of those factors. Where's the other use of capital?

Jenny, I don't know if you want to. Yeah, the only thing, I mean, I think you touched on this, but I think you asked the question of how programmatic. You know, I think of it as pretty dynamic. It's going to depend on the factors that just mentioned. And, you know, the first quarter is our seasonally lowest growth quarter. So I do think it gave us some opportunity there to do more purchases.

But, you know, I think we're going to make sure that we're using it as one level as we look forward.

Morning, Rick.

I do think you're on to the right framework. So I do think we're looking at how much we have in 90 plus, looking at those rules to loss getting slightly better from this quarter, looking at recoveries, which would be, you know, I mentioned earlier, but closer to the average of the first half of the year, maybe something in that range as you look forward. So I think you're on to the right path for how to look forward. And I think we do really like what we're seeing in the second half of the year. And I think it is very dependent on those 90, you know, those rules to law.

I can give you some more info on the pie. I do, you know, think of this as probably about 20% of our recoveries were from sales.

And I think it's a combination of the two reasons that you mentioned where we found good economics and we also had slightly larger inventory. So, you know, that 20% might be a slightly higher portion of the pie than usual, but you're still seeing, I mean, 80% of it is coming from internal recovery.

You know, I think this really, it moves around a bit. Again, I think it has to do with both the inventory and how much you have to look at. It has to do with economics and what you're seeing. We're always making sure that you get to a better outcome than if you held those charged off assets on our own balance sheet and worked them out ourselves. So, it really varies and sort of depends on where the market is and sort of all the math around that trade.

And by the way, the guidance on the recovery. I just gave some guide on the recoveries for the second half a couple of times.

We're not a bank, and so, you know, you probably should hop on a call with, you know, one of the big banks who's going to be able to give you a lot more insight into spending patterns than us. You know, I think our bank data gives us access to information which helps refine our models, which allows us to lend to more people, and, you know, it gives us a real sense of, you know, some spending pattern, but also, you know, payroll, income, levels, deposit levels that they keep, et cetera. If somebody, you know, overdraws, all of those kinds of things, there's more, you know, what we're looking at. We do now have, you know, over a million people with credit cards.

We've said before, you know, we've seen a slight uptick, like, you know, just over 1% uptick in use of our credit card for gas purchases, as opposed to, you know, the other major purchases, which are, you know, things like groceries, retail, restaurants. And so, we haven't seen anything significant in our book around energy prices, and that's probably where we have the most, you know, specific data about spend.