Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q4 2015 Earnings Presentation
26 slides from Onemain's earnings presentation, Feb 25, 2016
Slide 1: 4Q 2015 Earnings Presentation
OneMain Holdings, Inc. (NYSE: OMF) 4Q 2015 Earnings Presentation
Slide 2: Important Information
Important Information The following 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 3: 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), our Non-Core Portfolio (consisting of our Real Estate segment) and our other
Slide 4: A Strong Business Built on Simple Concepts
A Strong Business Built on Simple Concepts 2015 Core C&I Economics (1) Keys to Our Business (Amounts as a % of average net receivables) (2) Responsible lending: Revenue 28.5% ‒ Fixed rate, fully amortizing loans ‒ Affordable monthly loan payments Charge Offs (6.5%) Focus on credit basics: Risk A
Slide 5: Significant Addressable Consumer Market
Significant Addressable Consumer Market Americans have $2T in consumer debt,(1) and 24M Americans are likely to take out a personal loan this year (2) Nearly half of Americans have a FICO score below 700(3) Our customers are working Americans: – Earn $46,000 a year on average(4) – Own their ho
Slide 6: Our Underwriting is Tested Over Time
Our Underwriting is Tested Over Time Our underwriting has withstood the test of time ‒ We verify borrower income ‒ We only lend against a portion of borrower income after expenses ‒ Our loans are serviced by the same branch that originated the loan Decades of credit performance data spanning mul
Slide 7: OneMain Combination Drives Higher Returns
OneMain Combination Drives Higher Returns New OneMain combines scale efficiencies with stable credit to drive attractive returns New OneMain Scale Creates Operating Collateral Enhances Performance Expense Leverage (1) 2015 Net Charge-off Ratio Springleaf Core C&I OneMain (2) NCO% NCO% 2015 Operati
Slide 8: Successful Execution of 2015 Plan
Successful Execution of 2015 Plan In 2015, we met every element of our initial guidance Springleaf Core Consumer Operations (1) (1) Initial Guidance Guidance at Actual Performance 2015 3Q15 2015 Consumer Net Finance Receivables $4.50B - $4.75B $4.85B - $4.95B $5.0B Consumer Yield 26.0% - 26.5% 26.0%
Slide 9: 4Q 2015 Financial Highlights
4Q 2015 Financial Highlights Consolidated Consolidated Springleaf Stand Alone ($ and shares in millions, except earnings per share) FY15 4Q15 3Q15 2Q15 1Q15 (1) Consumer & Insurance $361 $143 $77 $76 $65 (1,2) Acquisitions & Servicing $120 25 28 31 36 (1,3) Pretax Core Earnings $481 $168 $105 $107 $
Slide 10: Funding Diversity
Funding Diversity Funding Diversity ($B UPB at 12/31/2015) Liquidity Highlights Total: $17.7B $0.6B available cash and highly liquid securities at YE2015 $2.5 ‒ Addt’l $0.6B cash from Lendmark sale in 2Q16 Forward funding from existing revolving term ABS (currently $150M/mo) $6.1 Recent Actions
Slide 11: Options to Fund Debt Maturities
Options to Fund Debt Maturities Unsecured Debt Maturity Schedule ($B) Funding Sources $2.5 Cash and significant unencumbered assets ‒ $0.6B of available cash, $0.6B cash from $2.0 Lendmark and $2B+ unencumbered assets $1.4 $1.5 $1.5 $2.5B undrawn committed conduits ‒ No scheduled amortization un
Slide 12: Credit Performance
Credit Performance Springleaf OneMain 2015 pro forma combined Security Type Gross Charge Off % % of Portfolio Gross Charge Off % % of Portfolio NCO ratio of 6.5% 2014 2015 2014 2015 2014 2015 2014 2015 Direct Auto Refi 0.0% 0.5% 1% 14% N/A N/A N/A N/A 2016 Expectations: ‒ ~15 bps negative impact
Slide 13: Guidance
Guidance (1) New OneMain Core Earnings Outlook (2) Core EPS $7.00 $6.20-$6.70 $6.00 $4.50-$5.00 $5.00 ~$4.00 $4.00 $3.00 $2.36 $2.07 $2.00 $1.00 $0.00 (3) (3) 2014A 2015A 4Q15 Run Rate 2016E 2017E (1) Includes forward-looking statements and are based on a variety of assumptions and estimates, some o
Slide 14: Appendix
% OneMain. Lending Made Personal Appendix
Slide 15: Springleaf Consumer Loan Performance
Springleaf Consumer Loan Performance (1) 30.00% 26.99% 27.02% 26.95% 26.88% 26.50% 25.84% 26.20% 25.97% 25.58% 25.00% 24.10% 20.00% 22.05% 21.25% 22.34% 21.99% 21.24% 21.64% 15.00% 21.67% 20.04% 22.03% 20.46% 10.00% 5.00% 4.94% 5.08% 4.68% 4.96% 5.64% 4.86% 4.30% 5.54% 3.64% 3.81% 0.00% (3) 2012 201
Slide 16: Legacy OneMain Consumer Loan Performance
Legacy OneMain Consumer Loan Performance (1) 30.00% 24.38% 24.79% 24.46% 24.38% 24.57% 24.88% 24.89% 24.80% 25.00% 23.74% 23.01% 20.00% 17.60% 16.91% 17.14% 17.68% 15.00% 17.54% 18.17% 18.82% 17.79% 18.64% 16.87% 10.00% 5.00% 7.19% 6.59% 7.67% 7.74% 7.11% 6.14% 6.20% 6.21% 5.64% 6.25% 0.00% (3) (3)
Slide 17: Comparative Origination Statistics
Comparative Origination Statistics Springleaf 4Q15 Origination Statistics OneMain 4Q15 Origination Statistics Personal Loan Auto Loan Personal Loan Unsecured (1) Hard Secured Unsecured Hard Secured Avg. Loan Size $4.2K $5.6K $12.7K Avg. Loan Size $7.7K $8.2K Avg. APR 29.6% 28.6% 19.3% Avg. APR 27.5%
Slide 18: Consumer and Insurance Segment
Consumer and Insurance Segment (unaudited, in millions) Consolidated Springleaf 4Q15 3Q15 4Q14 1 Finance Charges $621 $293 $250 2 Finance Receivables Held for Sale Originated as Held for Investment 43 0 0 3 Total Interest Income 664 293 250 4 Interest Expense (123) (43) (42) 5 Provision for Finance
Slide 19: Acquisitions and Servicing Segment
Acquisitions and Servicing Segment (unaudited, in millions) 4Q15 3Q15 4Q14 1 Interest Income $109 $114 $136 2 Interest Expense (20) (22) (24) 3 Provision for Finance Receivable Losses (21) (19) (31) 4 Net Interest Income after Provision 68 73 81 5 Investment 0 0 5 6 Portfolio Servicing Fees from Spr
Slide 20: Acquisitions and Servicing
Acquisitions and Servicing Pretax income for 4Q15 of $25 million versus $39 million in the prior year quarter(1) Solid credit performance with stable charge-off rate Collateral & Funding Structure SpringCastle Credit Performance 12/31/14 9/30/2015 12/31/15 Avg. Net Charge-off Rate (%)(3) Princip
Slide 21: Real Estate Segment
Real Estate Segment (unaudited, in millions) 4Q15 3Q15 4Q14 1 Finance Charges $12 $14 $16 2 Finance Receivables Held for Sale Originated as Held for Investment 4 3 3 3 Total Interest Income 16 17 19 4 Interest Expense (35) (58) (62) 5 Provision for Finance Receivable Losses (5) 4 (9) 6 Net Interest
Slide 22: Other
Other (unaudited, in millions) 4Q15 3Q15 4Q14 1 Interest Income $2 $1 $3 2 Interest Expense (8) (16) (2) 3 Provision for Finance Receivable Losses 0 0 0 4 Net Interest Income (Loss) after Provision (6) (15) 1 5 Operating Expenses 1 (1) 3 6 Acquisition-Related Transaction and Integration Expenses (18
Slide 23: Consolidated Balance Sheets
Consolidated Balance Sheets (GAAP) (unaudited, in millions) Consolidated Springleaf 12/31/15 12/31/14 1 Cash and Cash Equivalents $939 $879 2 Investment Securities 1,867 2,935 3 Net Finance Receivables: 4 Personal Loans & Retail Sales Finance 13,290 3,879 5 SpringCastle Portfolio 1,576 1,979 6 Real
Slide 24: Consolidated Income Statement
Consolidated Income Statement (GAAP) (unaudited, in millions, except per share statistics) Consolidated Consolidated Springleaf FY 2015 4Q15 3Q15 2Q15 1Q15 1 Finance Charges $1,870 $636 $424 $408 $402 2 Finance Receivables Held for Sale Originated as Held for Investment 61 48 4 5 4 3 Total Interest
Slide 25: Core Earnings (Non-GAAP)
Core Earnings (Non-GAAP) (unaudited, in millions) Consolidated Consolidated Springleaf FY 2015 4Q15 3Q15 2Q15 1Q15 1 Finance Charges $1,909 $730 $407 $389 $383 2 Finance Receivables Held for Sale Originated as Held for Investment 43 43 0 0 0 3 Total Interest Income 1,952 773 407 389 383 4 Interest E
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, in millions) Consolidated Consolidated Springleaf FY 2015 4Q15 3Q15 2Q15 1Q15 1 Income (loss) before provision for (benefit from) income taxes - GAAP basis ($269) ($340) $22 $11 $38 2 Finance Charges 102 108 (2) (2) (2) 3 Finance Receivables Held for S