Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q1 2019 Earnings Presentation
23 slides from Onemain's earnings presentation, Apr 30, 2019
Slide 1: 1Q 2019 Earnings Presentation
OneMain Holdings, Inc. (NYSE: OMF) 1Q 2019 Earnings Presentation April 30th, 2019
Slide 2: Important Information
Important Information This document contains summarized information concerning OneMain Holdings, Inc. (the “Company”) and the Company’s business, operations, financial performance and trends. No representation is made that the information in this document is complete. For additional financial, stati
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 interest expense and operating costs, to reflect the manne
Slide 4: 1Q19 Executive Summary
1Q19 Executive Summary Financial ▪ Net income of $152MM and diluted EPS of $1.11 Performance ▪ C&I adjusted net income* of $187MM and adjusted diluted EPS* of $1.37 ▪ C&I ending net receivables* of $16.2B, up 9% vs. 1Q18 Receivables ▪ C&I yield* of 23.9% vs. 23.8% in 1Q18 ▪ C&I net charge-off ratio*
Slide 5: 1Q19 Financial Performance
1Q19 Financial Performance ($ in millions, except Average Net Receivables in billions and per share statistics) Consistently generating superior returns Earnings Summary C&I Adjusted Earnings Summary* 1Q19 4Q18 1Q18 1Q19 4Q18 1Q18 Consumer & Insurance* $246 $248 $211 Interest Income $954 $959 $873 A
Slide 6: Net Income Trends
Net Income Trends ($ in millions) GAAP and C&I adjusted net income continue to improve Net Income GAAP Net Income C&I Adjusted Net Income* Fortress transaction $189 $187 $179 $168 $160 $160 $148 $152 $124 (1) $106 $7 1Q18 2Q18 3Q18 4Q18 1Q19 *See appendix for reconciliations and disclosures required
Slide 7: Receivables (C&I)
Receivables (C&I)* ($ in billions) Consistent and disciplined receivables growth Ending Net Receivables (“ENR”) 1Q19 Key Highlights $16.2 $16.2 $15.8 ▪ Originations of $2.6, up from $2.5 in 1Q18 $15.4 $14.9 ▪ Secured originations 56% of total, up from 44% in 1Q18 ▪ Portfolio ENR 49% secured, up from
Slide 8: Credit Metrics (C&I)
Credit Metrics (C&I)* ($ in millions) Credit trends remain stable 30-89 Days Delinquent 90+ Days Delinquent $393 $369 $365 $328 $338 $337 $310 $322 $313 $293 2.3% 2.4% 2.1% 2.3% 2.3% 2.1% 1.9% 2.0% 2.1% 1.9% 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 Net Charge-offs 1Q19 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 $317 $312 $309 $298 8.4% 8.6% 8.2% 8.0% 8.1% 7.8% 7.7% 1Q18 2Q18 3Q18 4Q18 1Q19 FY17 FY18 ANR $14.9 $15.1 $15.6 $16.0 $16.2
Slide 10: Funding & Capital
Funding & Capital ($ in billions) Diverse funding with strong capital and liquidity 1Q19 Funding Activity 1Q19 Liquidity (3) ▪ Issued $1.0 of 5yr notes at 6.125% ▪ Liquidity runway of 24+ months ▪ Redeemed $0.7 of 5.25% notes due 2019 ▪ Undrawn conduit capacity increased to $6.2 ▪ Issued $0.6 of Per
Slide 11: 2019 Strategic Priorities
2019 Strategic Priorities Building shareholder value while reinvesting in our business 2018A* 2019E Yield 23.9% Stable C&I Segment Metrics Net Charge-offs 6.5% < 6.5% Operating Expense $1.2B +3% C&I Ending Net $16.2B +5 to 10% Balance Receivables Sheet Tangible Leverage 6.9x 6.0x *See appendix for r
Slide 12: Appendix
OneMain Financial Appendix
Slide 13: Consolidated Income Statements
Consolidated Income Statements (unaudited, $ in millions, except per share statistics) 1Q19 4Q18 3Q18 2Q18 1Q18 FY18 FY17 Finance Charges $953 $954 $930 $902 $859 $3,645 $3,183 Finance Receivables Held for Sale 3 4 3 3 3 13 13 Total Interest Income 956 958 933 905 862 3,658 3,196 Interest Expense (2
Slide 14: Consolidated Balance Sheets
Consolidated Balance Sheets (unaudited, $ in millions) 3/31/19 12/31/18 9/30/18 6/30/18 3/31/18 Cash and Cash Equivalents $1,709 $679 $1,243 $556 $1,807 Investment Securities 1,743 1,694 1,707 1,720 1,706 Personal Loans 16,136 16,164 15,750 15,384 14,858 Other Receivables (1) 0 0 0 124 129 Net Finan
Slide 15: Balance Sheet Metrics
Balance Sheet Metrics (unaudited, $ in millions) 3/31/19 12/31/18 9/30/18 6/30/18 3/31/18 Total Assets $21,358 $20,090 $20,468 $19,640 $20,467 Less: Goodwill (1,422) (1,422) (1,422) (1,422) (1,422) Less: Other Intangible Assets (372) (388) (398) (409) (428) Tangible Managed Assets $19,564 $18,280 $1
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, $ in millions) 1Q19 4Q18 3Q18 2Q18 1Q18 FY18 FY17 Consumer & Insurance $232 $234 $226 $154 $174 $787 $676 Acquisition & Servicing 0 0 0 0 1 1 1 Other (3) (9) (4) (109) (10) (132) (41) Segment to GAAP Adjustment (27) (11) (23) (2) 3 (32) (205) Income Be
Slide 17: Reconciliation of Non-GAAP Measures (continued)
Reconciliation of Non-GAAP Measures (continued) (unaudited, $ in millions) 3/31/19 12/31/18 9/30/18 6/30/18 3/31/18 Consumer & Insurance $16,170 $16,195 $15,777 $15,406 $14,870 Acquisition & Servicing 0 0 0 0 0 (1) Other 0 0 0 131 136 Segment to GAAP Adjustment (34) (31) (27) (29) (19) Net Finance R
Slide 18: Consumer & Insurance Segment (Non-GAAP)
Consumer & Insurance Segment (Non-GAAP) (unaudited, $ in millions, except per share statistics) 1Q19 4Q18 3Q18 2Q18 1Q18 FY18 FY17 Interest Income $954 $959 $935 $911 $873 $3,677 $3,305 Interest Expense (229) (220) (218) (212) (194) (844) (765) Provision for Finance Receivables Losses (276) (275) (2
Slide 19: Consumer & Insurance Segment Metrics (Non-GAAP)
Consumer & Insurance Segment Metrics (Non-GAAP) (unaudited) 1Q19 4Q18 3Q18 2Q18 1Q18 FY18 FY17 Revenue (1) 26.6% 26.4% 26.3% 26.4% 25.9% 26.2% 26.6% Net Charge-Off (7.1%) (6.3%) (5.8%) (6.6%) (7.2%) (6.5%) (7.0%) Risk Adjusted Margin 19.5% 20.1% 20.5% 19.8% 18.7% 19.8% 19.6% Operating Expenses (7.7%
Slide 20: Consumer & Insurance Credit Metrics (Non-GAAP)
Consumer & Insurance Credit Metrics (Non-GAAP) (unaudited, $ in millions) 1Q19 4Q18 3Q18 2Q18 1Q18 FY18 FY17 Gross Charge-Off $316 $285 $260 $285 $297 $1,127 $1,100 Gross Charge-Off Ratio 7.9% 7.1% 6.6% 7.6% 8.1% 7.3% 7.9% Recovery $32 $30 $31 $35 $33 $129 $129 Recovery Ratio 0.8% 0.8% 0.8% 0.9% 0.9
Slide 21: Acquisitions and Servicing Segment (Non-GAAP)
Acquisitions and Servicing Segment (Non-GAAP) (unaudited, $ in millions) 1Q19 4Q18 3Q18 2Q18 1Q18 FY18 FY17 Portfolio Servicing Fees from SpringCastle $7 $7 $8 $8 $9 $33 $40 Other 0 0 0 0 0 0 2 Total Other Revenues 7 7 8 8 9 33 42 Operating Expenses (7) (7) (8) (8) (8) (32) (41) Total Other Expenses
Slide 22: Other (Non-GAAP)
Other (Non-GAAP) (unaudited, $ in millions) 1Q19 4Q18 3Q18 2Q18 1Q18 FY18 FY17 Finance Charges $0 $0 $2 $3 $3 $7 $12 Finance Receivables Held for Sale 3 4 2 2 2 10 11 Interest Expense (2) (4) (4) (5) (5) (17) (21) Provision for Finance Receivable Losses 0 0 0 3 2 5 (7) Net Interest Income (Loss) aft
Slide 23: 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