Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q1 2016 Earnings Presentation
27 slides from Onemain's earnings presentation, May 4, 2016
Slide 1: 1Q 2016 Earnings Presentation
OneMain Holdings, Inc. (NYSE: OMF) 1Q 2016 Earnings Presentation
Slide 2: The Leading Consumer Finance Company
The Leading Consumer Finance Company OneMain is the premier consumer finance company in the U.S. Leading National Footprint (1) Overview (1) 87% of Americans live within 25 miles of a OneMain branch $13.2 billion in branch receivables and over 2 million customers $8.7B of branch receivables OneMai
Slide 3: A Differentiated Profile In Financial Services
A Differentiated Profile In Financial Services Additional receivables growth is highly accretive to returns Keys to Our Business 2015 C&I Return on Receivables (1) Revenue 28.5% Local lending and community involvement Charge Offs (6.5%) Sophisticated underwriting and extensive Risk Adjusted Marg
Slide 4: Acquisition Delivers Significant Value
Acquisition Delivers Significant Value The OneMain acquisition materially increases our earnings power Management Focus Core Earnings Per Diluted Share Capture benefits of the acquisition Expect to achieve $1.50 run-rate Core EPS by 3Q17 – Reinvigorate growth at OneMain SpringCastle/Acquisition &
Slide 5: Strong and Stable Balance Sheet
Strong and Stable Balance Sheet Leverage is improving and unsecured debt maturities are balanced (2) Leverage Unsecured Debt Maturities ($B) Adj. Debt to Adj. Tangible Equity (1) Target $1.0-$1.5 per year 18.5x 12.9x $1.4 $1.5 $1.3 $1.3 ~7.0x $0.4 $0.3 $0.3 12/31/2015 3/31/2016 2H18 2016 2017 2018 2
Slide 6: Key Consumer Indicators Remain Strong
Key Consumer Indicators Remain Strong The economic environment continues to be favorable for our customers OneMain Borrower Profile Key Leading Indicators Initial Unemployment Claims (#, SA) 400,000 350,000 Age 51 yr 49 yr 300,000 Homeowners 59% 50% 250,000 Time in Residence 12 yrs 11 yrs 200,000 Ju
Slide 7: First Quarter 2016 Performance
First Quarter 2016 Performance ($ in millions, except per share statistics or otherwise noted) 1Q16 results benefit from full quarter of OneMain earnings 1Q16 4Q15 1Q15 1Q16 Consumer & Insurance Economic Return (1) Consumer & Insurance $203 $143 $65 (6) (2) Revenue 28.3% Acquisitions & Servicing 24
Slide 8: Leveraging Complementary Strengths
Leveraging Complementary Strengths Execution on strategic priorities began immediately after closing Pre-acquisition Profile (1) Action Plan Secured Implement underwriting strategies to support secured 1 55% 17% Lending lending; secured losses 50% lower than unsecured Receivables 2 >20% Growth <5% E
Slide 9: Executing On Growth and Secured Lending
Executing On Growth and Secured Lending Former OneMain originations were up ~25% in the quarter, secured originations were up ~75% Growth and Secured Lending at former OneMain Secured Loans Benefit Customers $ in millions Secured loans on average improve household cash flow by $127 per month(1) ~25%
Slide 10: Executing on Operating Expense Synergies
Executing on Operating Expense Synergies ~$100MM in 2016 exit-rate savings accelerates earnings expansion (1) Achieving 2016 Run-Rate Cost Savings ($MM) Driving Operating Leverage Improvement OneMain $10 $100 Springleaf Combined OneMain $50 13.5% 10.6% 8.7% ~9.0% $40 ~8.0% HQ Alignment Branch Sale I
Slide 11: Credit Outlook Remains Stable
Credit Outlook Remains Stable We remain confident in our 2016 full year NCO outlook of 6.8% – 7.3% 12.0% 1Q NCO% Represents Seasonal Peak of Losses 11.0% Improving delinquency supports FY NCO outlook 12.0% 30-89 day delinquencies are a leading indicator of NCO 3.0% 10.0% 11.0% Two quarter lagged DQ
Slide 12: Funding & Liquidity
Funding & Liquidity Diverse funding sources and strong liquidity profile Diverse Funding Sources Funding and Liquidity Principles $B, Principal Balance as of May 4, 2016 Target $300 - $500MM of operating cash $3.9 Maintain 12-18 months of forward liquidity needs • ~$4B of undrawn conduits $6.5 4
Slide 13: Significant Earnings Expansion
Significant Earnings Expansion (1) 2016 2017 (2) Core EPS Guidance $4.20 – $4.70 $5.60 - $6.10 SpringCastle earnings, higher Impacts SpringCastle earnings borrowing costs Operating leverage expands earnings growth Projected Growth in Average Net Receivables ($B) Projected Growth in Core EPS Based on
Slide 14: The Leading Consumer Finance Company
The Leading Consumer Finance Company 87% of Americans live within 25 miles of one of OneMain’s 1,800+ branches National Footprint $13.2 billion of branch receivables to over 2 million current customers(1) Ability-To-Pay underwriting backed by proprietary scoring models and 100+ yrs Disciplined
Slide 15: Appendix
Sv OneMain. Lending Made Personal Appendix
Slide 16: Consumer and Insurance Segment
Consumer and Insurance Segment (unaudited, in millions) 1Q16 4Q15 1Q15 Finance Charges $807 $621 $256 Finance Receivables Held for Sale Originated as Held for Investment 42 43 0 Total Interest Income 849 664 256 Interest Expense (175) (123) (40) Provision for Finance Receivable Losses (232) (179) (5
Slide 17: Acquisitions and Servicing Segment
Acquisitions and Servicing Segment (unaudited, in millions) 1Q16 4Q15 1Q15 Interest Income $101 $109 $127 Interest Expense (20) (20) (23) Provision for Finance Receivable Losses (17) (21) (27) Net Interest Income after Provision 64 68 77 Investment 0 0 5 Portfolio Servicing Fees from SpringCastle 11
Slide 18: Real Estate Segment
Real Estate Segment (unaudited, in millions) 1Q16 4Q15 1Q15 Finance Charges $12 $12 $15 Finance Receivables Held for Sale Originated as Held for Investment 3 4 3 Total Interest Income 15 16 18 Interest Expense (13) (35) (60) Provision for Finance Receivable Losses (2) (5) (2) Net Interest Loss after
Slide 19: Other
Other (unaudited, in millions) 1Q16 4Q15 1Q15 Interest Income $1 $2 $2 Interest Expense 0 (8) (10) Provision for Finance Receivable Losses 0 0 0 Net Interest Income (Loss) after Provision 1 (6) (8) (1) Operating Expenses 4 1 (2) Acquisition-Related Transaction and Integration Expenses (9) (18) (3) T
Slide 20: Consolidated Balance Sheets
Consolidated Balance Sheets (GAAP) (unaudited, in millions) 3/31/16 12/31/15 Cash and Cash Equivalents $716 $939 Investment Securities 1,872 1,867 Net Finance Receivables: Personal Loans & Retail Sales Finance 13,228 13,290 SpringCastle Portfolio 0 1,576 Real Estate Loans 503 524 Net Finance Receiva
Slide 21: Consolidated Income Statement
Consolidated Income Statement (GAAP) (unaudited, in millions, except per share statistics) 1Q16 4Q15 1Q15 Finance Charges $779 $636 $402 Finance Receivables Held for Sale Originated as Held for Investment 47 48 4 Total Interest Income 826 684 406 Interest Expense (226) (215) (158) Provision for Fina
Slide 22: Core Earnings (Non-GAAP)
Core Earnings (Non-GAAP) (unaudited, in millions) 1Q16 4Q15 1Q15 Finance Charges $908 $730 $383 Finance Receivables Held for Sale Originated as Held for Investment 42 43 0 Total Interest Income 950 773 383 Interest Expense (195) (143) (63) Provision for Finance Receivable Losses (249) (200) (83) Net
Slide 23: Non-Core Pre-tax Earnings
Non-Core Pre-tax Earnings $ in millions, unless otherwise noted Non-Core includes the impacts of non-cash acquisition accounting, acquisition and integration related costs, and non-core operations 1Q16 Act FY16 Est % of Ttl SpringLeaf Debt Discount Accretion ($24) ($100) 24% OMFH LLR Provision Catch
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, in millions, except per share statistics) 1Q16 4Q15 1Q15 GAAP Pretax Income (Loss) $275 ($340) $38 Finance Charges 142 108 (2) Finance Receivables Held for Sale Originated as Held for Investment (2) (1) (1) Total Interest Income 140 107 (3) Interest Ex
Slide 25: Reconciliation of Adjusted Debt to Adjusted Tangible Equity
Reconciliation of Adjusted Debt to Adjusted Tangible Equity (unaudited, in millions) 3/31/16 12/31/15 Long-Term Debt $14,870 $17,300 Less: Junior Subordinated Debt (172) (172) Adjusted Debt 14,698 17,128 Total Shareholders' Equity 2,928 2,605 Less: Non-Controlling Interests 0 146 Less: Goodwill (1,4
Slide 26: Important Information
Important Information The foregoing pages are part of a presentation by OneMain Holdings, Inc.1 (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 comple
Slide 27: Important Information
Important Information Use of Non-GAAP Financial Measures We report the operating results of our Core Consumer Operations (consisting of the results of our Consumer and Insurance and our Acquisitions and Servicing segments), Non-Core Portfolio (consisting of our Real Estate segment), and our other no