Slide 1: 2Q14 Earnings Presentation
2Q14 Earnings Presentation Three months ended June 30, 2014 Springleaf Holdings, Inc. (LEAF) August 7, 2014
Slide 2: Important Information
Important Information The following pages are part of a presentation by Springleaf Holdings, Inc. (the "Company") in connection with reporting quarterly financial results and are intended to be viewed as part of that presentation. No representation is made that the information in these pages is comp
Slide 3: Non-GAAP Financial Measure
Non-GAAP Financial Measure We present core earnings as a “non-GAAP financial measure” in this presentation. This measure is derived on the basis of methodologies other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Please refer to the Finan
Slide 4: Highlights
Highlights ($ in thousands) 2Q14 1Q14 2Q13 (5) Consumer & Insurance(1) $60,034 $48,822 $79,171 Acquisitions & Servicing(2) 33,957 30,658 46,776 Pretax Core Earnings(3) $93,991 $79,480 $125,947 Estimated Income Taxes(4) (34,777) (29,408) (46,600) Estimated Core Earnings(3) $59,214 $50,072 $79,347 Net
Slide 5: Branch Receivables Growth and Scalability
Branch Receivables Growth and Scalability Strong Consumer Receivables Growth Proven History of Scalability Consumer Receivables ($ mm)(1) Consumer Receivables Per Branch ($ mm)(1) $3,500 $3,373 $4.5 $4.1 $3,250 $3,141 $3,159 $4.0 $3.8 $3.8 $3,000 $3.5 $2,750 $3.1 $2,545 $3.0 $2,500 $2,414 $2.5 $2.5
Slide 6: Consumer Loan Performance
Consumer Loan Performance Yield and net losses stable in the quarter Delinquency ratio has improved to 2.28%, down 17 bps q-o-q(1) Yield Continues to Trend Up(2,3) 30.0% 27.0% 26.3% 26.9% 25.8% 25.6% 24.1% 25.0% 22.9% 20.0% 15.0% 21.3% 21.9% 21.9% 20.5% 22.0% 22.4% 18.9% 10.0% 5.0% 4.0% 3.6% 3.8% 3.
Slide 7: Acquisitions and Servicing
Acquisitions and Servicing Pretax income for 2Q14 of $34 million(1); includes servicing fee income Charge-offs continue to decline Current and previous customer base offers new growth opportunities Collateral & Funding Structure SpringCastle Credit Performance (2) At Purchase 12/31/13 6/30/14 Avg. C
Slide 8: RE Transaction Overview
RE Transaction Overview The mortgage sales essentially complete our mortgage liquidation plans – Significantly reduces long term funding and credit risk – Deleverages the balance sheet (pro forma net leverage of 2.0x at 6/30/14 versus 6.2x at 3/31/14)(1) – Removes majority of earnings volatility cau
Slide 9: Mortgage Portfolio Overview at 6/30/14
Mortgage Portfolio Overview at 6/30/14 Agreement to sell approximately $7.2 billion of real estate mortgage receivables, including $0.5 billion sold on 6/30/14(1); projected net gain of approximately $575 to 625 million Total RE at 3/31/14 Real Estate Sales Pro Forma 6/30/14(2) Receivables ($ bn) (1
Slide 10: Liquidity and Funding at 6/30/14
Liquidity and Funding at 6/30/14 Strong and stable liquidity position – $891 million cash and $1.2 billion committed undrawn funding capacity Weighted average cost of funds down to 5.13% in 2Q14, down 25 bps q-o-q (1,2) Sale of $7.2 billion of real estate loans, including $0.5 billion closed on 6/30
Slide 11: 2Q14 Summary Financial Results
2Q14 Summary Financial Results ($ in thousands) 2Q14 1Q14 2Q13 (5) Consumer & Insurance(1) $60,034 $48,822 $79,171 Acquisitions & Servicing(2) 33,957 30,658 46,776 (5) Pretax Core Earnings(3) $93,991 $79,480 $125,947 Estimated Income Taxes(4) (34,777) (29,408) (46,600) Estimated Core Earnings(3) $59
Slide 12: 2014 Updated Guidance
2014 Updated Guidance Core Consumer Operations(1) FY 2014E Range Guidance as of 12/31/13 Guidance as of 3/31/14 Guidance as of 6/30/14 Consumer Net Finance Receivables $3.60bn — $3.75bn $3.60bn — $3.75bn $3.70bn — $3.85bn Consumer Yield 26.75% — 27.25% 27.00% — 27.50% 26.85% — 27.35% Consumer Risk A
Slide 13: Financial Supplement
| Financial Supplement Financial
Slide 14: Consolidated Balance Sheet (Push Down Accounting)
Consolidated Balance Sheet (Push Down Accounting) 6/30/14 12/31/13 1 Cash and Cash Equivalents $891,341 $431,409 2 Investment Securities 657,483 582,090 3 Net Finance Receivables: 4 Personal Loans & Retail Sales Finance 3,475,754 3,270,615 5 SpringCastle Portfolio 2,202,380 2,505,349 6 Real Estate L
Slide 15: Consolidated Income Statement (Push Down Accounting)
Consolidated Income Statement (Push Down Accounting) (unaudited, in thousands, except per share statistics) 2Q14 1Q14 2Q13 1 Interest Income $532,750 $552,637 $580,597 2 Interest Expense (191,301) (205,420) (240,418) 3 Provision for Finance Receivable Losses (115,347) (160,878) (82,311) 4 Net Intere
Slide 16: Core Earnings (Non-GAAP)
Core Earnings (Non-GAAP) (unaudited, in thousands) 2Q14 1Q14 2Q13 1 Interest Income $357,440 $355,622 $338,974 2 Interest Expense (59,012) (62,920) (60,716) 3 Provision for Finance Receivable Losses (88,275) (98,225) (11,850) 4 Net Interest Income after Provision 210,153 194,477 266,408 5 Insurance
Slide 17: Core: Consumer & Insurance Segments
Core: Consumer & Insurance Segments (unaudited, in thousands) 2Q14 1Q14 2Q13 1 Interest Income $220,396 $209,695 $170,604 2 Interest Expense (40,905) (40,726) (36,125) 3 Provision for Finance Receivable Losses (47,876) (45,275) 5,947 4 Net Interest Income after Provision 131,615 123,694 140,426 5 In
Slide 18: Core: Acquisitions & Servicing Segment
Core: Acquisitions & Servicing Segment (unaudited, in thousands) 2Q14 1Q14 2Q13 1 Interest Income $137,044 $145,927 $168,370 2 Interest Expense (18,107) (22,194) (24,591) 3 Provision for Finance Receivable Losses (40,399) (52,950) (17,797) 4 Net Interest Income after Provision 78,538 70,783 125,982
Slide 19: Non-Core: Real Estate Segment
Non-Core: Real Estate Segment (unaudited, in thousands) 2Q14 1Q14 2Q13 1 Interest Income $136,639 $155,044 $177,477 2 Interest Expense (95,492) (111,797) (141,530) 3 Provision - TDR (21,087) (45,141) (55,779) 4 Provision - Non-TDR 615 (16,187) (10,231) 5 Net Interest Income (Loss) after Provision 20
Slide 20: Non-Core: Other Segment
Non-Core: Other Segment (unaudited, in thousands) 2Q14 1Q14 2Q13 1 Interest Income $4,311 $5,104 $12,287 2 Interest Expense (1,830) (2,143) (4,007) 3 Provision for Finance Receivable Losses (4,302) (965) 6,739 4 Net Interest (Loss) Income after Provision (1,821) 1,996 15,019 5 Insurance 16 16 20 6 I
Slide 21: Reconciliation – Push-Down Accounting to Historical / Pretax Core Earnings
Reconciliation – Push-Down Accounting to Historical / Pretax Core Earnings (unaudited, in thousands) 2Q14 1Q14 2Q13 1 1 Push-Down Accounting Pretax Income Attributable to Springleaf $117,143 $82,842 $89,141 2 Interest Income (34,360) (36,867) (51,859) 3 Interest Expense 34,967 28,560 34,165 4 Provis
Slide 22: Appendix: Consumer Loan Credit Performance
Appendix: Consumer Loan Credit Performance Charge-off Trends(1) Gross Charge-off Recovery Net Charge-off Ratio 7.5% 5.63% 5.80% 6.0% 5.49% 5.30% Gross 4.96% Charge-off 4.36% 4.5% 4.00% 4.45% 5.12% 3.0% 3.84% 4.30% 3.65% 5.02% 5.01% Net 3.63% 3.18% 3.17% 2.67% 2.88% Charge-off 3.81% 1.5% 1.33% 1.18%