Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q2 2019 Earnings Presentation
24 slides from Onemain's earnings presentation, Jul 30, 2019
Slide 1: 2Q 2019 Earnings Presentation
OneMain Holdings, Inc. (NYSE: OMF) 2Q 2019 Earnings Presentation July 30th, 2019
Slide 2: Important Information
Important Information This document contains summarized information concerning OneMain Holdings, Inc. (the “Company”) and the Company’s business, o perations, financial performance and trends. No representation is made that the information in this document is complete. For additional financial, stat
Slide 3: Important Information: Use of Non-GAAP Financial Measures
Important Information Use of Non-GAAP Financial Measures We report the operating results of Consumer and Insurance, Acquisitions and Servicing, and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for certain costs, primarily interest expense, loan loss reser
Slide 4: 2Q19 Executive Summary
2Q19 Executive Summary ▪ Net income of $194MM and diluted EPS of $1.42 Financial ▪ C&I adjusted net income* of $221MM and adjusted diluted EPS* of $1.62, up 38% and Performance 37%, respectively ▪ ROA* of 3.7%; C&I ROR* of 5.4% ▪ Achieved portfolio secured mix target of 50% Receivables ▪ C&I ending
Slide 5: 2Q19 Financial Performance
2Q19 Financial Performance ($ in millions, except Average Net Receivables in billions and per share statistics) Consistently generating superior returns Earnings Summary C&I Adjusted Earnings Summary* 2Q19 1Q19 2Q18 2Q19 1Q19 2Q18 Consumer & Insurance* $291 $246 $211 Interest Income $999 $954 $911 A
Slide 6: Net Income Trends
Net Income Trends ($ in millions) C&I adjusted net income up 38% year over year Net Income GAAP Net Income C&I Adjusted Net Income* Fortress transaction $221 $189 $194 $187 $179 $168 $160 $152 $148 (1) $106 $7 2Q18 3Q18 4Q18 1Q19 2Q19 ROA/ C&I ROR* 0.1% 4.2% 2.9% 4.6% 3.3% 4.7% 2.9% 4.7% 3.7% 5.4% *
Slide 7: Receivables (C&I)
Receivables (C&I)* ($ in billions) Consistent and disciplined receivables growth Ending Net Receivables (“ENR”) 2Q19 Key Highlights $17.0 ▪ Originations of $3.9, up from $3.2 in 2Q18 $16.2 $16.2 ▪ Secured originations 55% of total, up from 47% $15.8 $15.4 in 2Q18 ▪ Portfolio ENR 50% secured, up from
Slide 8: Credit Metrics (C&I)
Credit Metrics (C&I)* ($ in millions) Credit trends remain stable 30-89 Days Delinquent 90+ Days Delinquent $393 $369 $366 $365 $328 $337 $313 $322 $293 $293 2.3% 2.4% 2.1% 2.3% 2.1% 1.9% 2.0% 2.1% 1.9% 1.7% 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 Net Charge-offs 2Q19 Key Highlights $284 $
Slide 9: Operating Expense (C&I)
Operating Expense (C&I)* ($ in millions, ANR $ in billions) Achieving operating leverage while reinvesting in our business (3) Operating Expense & OpEx Ratio $1,197 $1,247 $320 $319 $317 $312 $309 8.4% 8.2% 8.6% 7.8% 8.1% 7.7% 7.7% 2Q18 3Q18 4Q18 1Q19 2Q19 FY17 FY18 ANR $15.1 $15.6 $16.0 $16.2 $16.6
Slide 10: Funding & Capital
Funding & Capital ($ in billions) Diverse funding with strong capital and liquidity 2Q19 Funding Activity 2Q19 Liquidity (3) ▪ Issued $0.8 at 6.625% notes due 2028 ▪ Liquidity runway of 24+ months ▪ Redeemed $0.3 of 6.0% notes due 2020 ▪ Undrawn conduit capacity increased to $6.7 ▪ Issued $0.3 add-o
Slide 11: 2019 Strategic Priorities
2019 Strategic Priorities Building shareholder value while reinvesting in our business 2019E 2018A* 2019E Updated Yield 23.9% Stable Stable C&I Segment Metrics Net Charge-offs 6.5% < 6.5% 6.1 to 6.3% Operating Expense $1.2B +3% +3% C&I Ending Net $16.2B +5 to 10% +8 to 10% Balance Receivables Sheet
Slide 12: Powerful Model Driving Differentiated Performance
Powerful model driving differentiated performance • Hybrid branch and central business model with enhanced digital and analytical Differentiated capabilities driving strong returns and 38% YOY C&I net income* growth Business Model • Deep customer relationships, disciplined underwriting, and secured
Slide 13: Appendix
OneMain Financial Appendix
Slide 14: Consolidated Income Statements
Consolidated Income Statements (unaudited, $ in millions, except per share statistics) 2Q19 1Q19 4Q18 3Q18 2Q18 FY18 FY17 Finance Charges $998 $953 $954 $930 $902 $3,645 $3,183 Finance Receivables Held for Sale 2 3 4 3 3 13 13 Total Interest Income 1,000 956 958 933 905 3,658 3,196 Interest Expense
Slide 15: Consolidated Balance Sheets
Consolidated Balance Sheets (unaudited, $ in millions) 6/30/19 3/31/19 12/31/18 9/30/18 6/30/18 Cash and Cash Equivalents $786 $1,709 $679 $1,243 $556 Investment Securities 1,721 1,743 1,694 1,707 1,720 Personal Loans 16,980 16,136 16,164 15,750 15,384 Other Receivables (1) 0 0 0 0 124 Net Finance R
Slide 16: Balance Sheet Metrics
Balance Sheet Metrics (unaudited, $ in millions) 6/30/19 3/31/19 12/31/18 9/30/18 6/30/18 Total Assets $21,017 $21,358 $20,090 $20,468 $19,640 Less: Goodwill (1,422) (1,422) (1,422) (1,422) (1,422) Less: Other Intangible Assets (362) (372) (388) (398) (409) Tangible Managed Assets $19,233 $19,564 $1
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, $ in millions) 2Q19 1Q19 4Q18 3Q18 2Q18 FY18 FY17 Consumer & Insurance $270 $232 $234 $226 $154 $787 $676 Acquisitions & Servicing 6 0 0 0 0 1 1 Other (3) (3) (9) (4) (109) (132) (41) Segment to GAAP Adjustment (17) (27) (11) (23) (2) (32) (205) Income
Slide 18: Reconciliation of Non-GAAP Measures (continued)
Reconciliation of Non-GAAP Measures (continued) (unaudited, $ in millions) 6/30/19 3/31/19 12/31/18 9/30/18 6/30/18 Consumer & Insurance $17,016 $16,170 $16,195 $15,777 $15,406 Acquisitions & Servicing 0 0 0 0 0 (1) Other 0 0 0 0 131 Segment to GAAP Adjustment (36) (34) (31) (27) (29) Net Finance Re
Slide 19: Consumer & Insurance Segment (Non-GAAP)
Consumer & Insurance Segment (Non-GAAP) (unaudited, $ in millions, except per share statistics) 2Q19 1Q19 4Q18 3Q18 2Q18 FY18 FY17 Interest Income $999 $954 $959 $935 $911 $3,677 $3,305 Interest Expense (232) (229) (220) (218) (212) (844) (765) Provision for Finance Receivables Losses (263) (276) (2
Slide 20: Consumer & Insurance Segment Metrics
Consumer & Insurance Segment Metrics (Non-GAAP) (unaudited) 2Q19 1Q19 4Q18 3Q18 2Q18 FY18 FY17 Revenue (1) 26.8% 26.6% 26.4% 26.3% 26.4% 26.2% 26.6% Net Charge-Off (6.2%) (7.1%) (6.3%) (5.8%) (6.6%) (6.5%) (7.0%) Risk Adjusted Margin 20.6% 19.5% 20.1% 20.5% 19.8% 19.8% 19.6% Operating Expenses (7.7%
Slide 21: Consumer & Insurance Credit Metrics
Consumer & Insurance Credit Metrics (Non-GAAP) (unaudited, $ in millions) 2Q19 1Q19 4Q18 3Q18 2Q18 FY18 FY17 Gross Charge-Off $294 $316 $285 $260 $285 $1,127 $1,100 Gross Charge-Off Ratio 7.1% 7.9% 7.1% 6.6% 7.6% 7.3% 7.9% Recovery $38 $32 $30 $31 $35 $129 $129 Recovery Ratio 0.9% 0.8% 0.8% 0.8% 0.9
Slide 22: Acquisitions and Servicing Segment (Non-GAAP)
Acquisitions and Servicing Segment (Non-GAAP) (unaudited, $ in millions) 2Q19 1Q19 4Q18 3Q18 2Q18 FY18 FY17 Portfolio Servicing Fees from SpringCastle $5 $7 $7 $8 $8 $33 $40 Other 0 0 0 0 0 0 2 Total Other Revenues 5 7 7 8 8 33 42 Operating Expenses (6) (7) (7) (8) (8) (32) (41) Total Other Expenses
Slide 23: Other (Non-GAAP)
Other (Non-GAAP) (unaudited, $ in millions) 2Q19 1Q19 4Q18 3Q18 2Q18 FY18 FY17 Finance Charges $0 $0 $0 $2 $3 $7 $12 Finance Receivables Held for Sale 2 3 4 2 2 10 11 Interest Expense (1) (2) (4) (4) (5) (17) (21) Provision for Finance Receivable Losses 0 0 0 0 3 5 (7) Net Interest Income (Loss) aft
Slide 24: Glossary
Glossary Select Calculations: • Adjusted Debt = Long-Term Debt – Junior Subordinated Debt • Adjusted Tangible Common Equity (TCE) = Total Shareholders’ Equity – Goodwill – Other Intangible Assets + Junior Subordinated Debt • C&I Adjusted Diluted EPS = C&I Adjusted Net Income (Non-GAAP) / Weighted Av