Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q3 2018 Earnings Presentation
23 slides from Onemain's earnings presentation, Oct 31, 2018
Slide 1: OneMain Holdings, Inc. 3Q 2018 Earnings Presentation
OneMain Holdings, Inc. (NYSE: OMF) 3Q 2018 Earnings Presentation October 31, 2018
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 certain costs, primarily interest expense, loan loss reser
Slide 4: 3Q18 Executive Summary
3Q18 Executive Summary Financial ▪ Net income of $148MM and diluted EPS of $1.09 Performance ▪ C&I adjusted net income* of $179MM and adjusted diluted EPS* of $1.31 ▪ C&I ending net receivables* of $15.8B, up 10% vs. 3Q17 Receivables (1) ▪ C&I yield* of 23.7% vs. 23.4% in 3Q17 ▪ C&I net charge-off r
Slide 5: Financial Performance
Financial Performance ($ in millions, except per share statistics) Consistently generating superior returns Earnings Summary C&I Adjusted Earnings Summary* 3Q18 2Q18 3Q17 3Q18 2Q18 3Q17 Consumer & Insurance* $235 $211 $194 Interest Income $935 $911 $831 Acquisitions & Servicing * 0 0 0 Other Net Rev
Slide 6: Net Income Trends
Net Income Trends ($ in millions) Continued improvement in GAAP and C&I adjusted net income Net Income C&I Adjusted Net Income* GAAP Net Income Tax reform impact Fortress transaction $179 $160 $160 $144 $148 $123 $124 $69 (1) (2) $81 $106 $39 $7 3Q17 4Q17 1Q18 2Q18 3Q18 *See appendix for reconciliat
Slide 7: Receivables (C&I)
Receivables (C&I)* ($ in billions) Consistent and disciplined receivables growth Ending Net Receivables (“ENR”) 3Q18 Key Highlights $15.8 ▪ Originations of $2.9, up 10% from $2.6 in 3Q17 $15.4 $14.9 $14.8 ▪ Secured originations 54% of total $14.3 ▪ Secured ENR 46% of total, up from 41% in 3Q17 ▪ Dir
Slide 8: Credit Metrics (C&I)
Credit Metrics (C&I)* ($ in millions) Credit trends remain stable 30-89 Days Delinquent 90+ Days Delinquent $362 $369 $343 $339 $338 $328 $322 $310 $296 $293 2.4% 2.3% 2.4% 2.1% 2.1% 2.3% 2.3% 2.1% 1.9% 2.0% 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 Net Charge-offs Key Highlights $264 $250 ▪
Slide 9: Operating Expense (C&I)
Operating Expense (C&I)* ($ in millions, ANR $ in billions) Achieving operating leverage while reinvesting in our business (3) Operating Expense & OpEx Ratio $934 $898 $320 $317 $299 $298 $295 8.4% 8.4% 8.8% 8.2% 8.2% 8.2% 8.0% 3Q17 4Q17 1Q18 2Q18 3Q18 YTD17 YTD18 (1) (1) ANR $14.1 $14.6 $14.9 $15.1
Slide 10: Funding & Capital
Funding & Capital Diverse funding with strong capital and liquidity 3Q18 Funding & Other Activities 3Q18 Capital & Liquidity (1) ▪ Issued $700MM of 7.125% notes due 2026 ▪ Secured funding mix of ~50% ▪ Issued $900MM of 2 year Auto ABS at 3.6% ▪ Conduit capacity of $5.8B, up ~$0.5B vs. 2Q18 ▪ Moody’s
Slide 11: 2018 Strategic Priorities
2018 Strategic Priorities Building shareholder value while reinvesting in our business 2017 2018E Ending Net Receivables $14.8B +8 to 10% C&I Segment* Yield 23.8% Stable Net Charge-offs 7.0% 6.5 to 6.7% Operating Expense $1.2B +5% Balance Sheet (1) (2) Secured Funding mix ~ 60% 50 to 55% Tangible Le
Slide 12: Appendix
OneMain Financial Appendix
Slide 13: Consolidated Income Statements
Consolidated Income Statements (unaudited, in millions, except per share statistics) 3Q18 2Q18 1Q18 4Q17 3Q17 FY17 FY16 Finance Charges $930 $902 $859 $854 $805 $3,183 $3,036 Finance Receivables Held for Sale Originated as Held for Investment 3 3 3 3 3 13 74 Total Interest Income 933 905 862 857 808
Slide 14: Consolidated Balance Sheets
Consolidated Balance Sheets (unaudited, in millions) 9/30/18 6/30/18 3/31/18 12/31/17 9/30/17 Cash and Cash Equivalents $1,243 $556 $1,807 $987 $916 Investment Securities 1,707 1,720 1,706 1,697 1,668 Personal Loans 15,750 15,384 14,858 14,823 14,356 Other Receivables (1), (2) - 124 129 134 140 Net
Slide 15: Balance Sheet Metrics
Balance Sheet Metrics (unaudited, in millions) 9/30/18 6/30/18 3/31/18 12/31/17 9/30/17 Total Assets $20,468 $19,640 $20,467 $19,433 $19,050 Less: Goodwill (1,422) (1,422) (1,422) (1,422) (1,422) Less: Other Intangible Assets (398) (409) (428) (440) (452) Tangible Managed Assets $18,648 $17,809 $18,
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, in millions) 3Q18 2Q18 1Q18 4Q17 3Q17 FY17 FY16 Consumer & Insurance $226 $154 $174 $219 $171 $676 $688 Acquisition & Servicing 0 0 1 0 0 1 225 Other (4) (109) (10) (7) (13) (41) (90) Segment to GAAP Adjustment (23) (2) 3 (25) (37) (205) (467) Income B
Slide 17: Reconciliation of Non-GAAP Measures (continued)
Reconciliation of Non-GAAP Measures (continued) (unaudited, in millions) 9/30/18 6/30/18 3/31/18 12/31/17 9/30/17 Consumer & Insurance $15,777 $15,406 $14,870 $14,820 $14,334 Acquisition & Servicing 0 0 0 0 0 Other (1) 0 131 136 142 148 Segment to GAAP Adjustment (27) (29) (19) (5) 14 Net Finance Re
Slide 18: Consumer & Insurance Segment (Non-GAAP)
Consumer & Insurance Segment (Non-GAAP) (2) (unaudited, in millions, except per share statistics) 3Q18 2Q18 1Q18 4Q17 3Q17 FY17 FY16 Finance Charges $935 $911 $873 $875 $831 $3,305 $3,272 Finance Receivables Held for Sale Originated as Held for Investment 0 0 0 0 0 0 56 Total Interest Income 935 911
Slide 19: Consumer & Insurance Segment Metrics (Non-GAAP)
Consumer & Insurance Segment Metrics (Non-GAAP) (unaudited) 3Q18 2Q18 1Q18 4Q17 3Q17 FY17 FY16 Revenue (1) 26.3% 26.4% 25.9% 26.5% 26.3% 26.6% 28.0% Net Charge-Off (5.8%) (6.6%) (7.2%) (6.4%) (6.4%) (7.0%) (7.1%) Risk Adjusted Margin 20.5% 19.8% 18.7% 20.1% 19.9% 19.6% 20.9% Operating Expenses (8.2%
Slide 20: Consumer & Insurance Credit Metrics (Non-GAAP)
Consumer & Insurance Credit Metrics (Non-GAAP) (unaudited, in millions) 3Q18 2Q18 1Q18 4Q17 3Q17 FY17 FY16 Gross Charge-Off $260 $285 $297 $264 $257 $1,100 $1,050 Gross Charge-Off Ratio 6.6% 7.6% 8.1% 7.2% 7.2% 7.9% 7.8% Recovery $31 $35 $33 $28 $30 $129 $102 Recovery Ratio 0.8% 0.9% 0.9% 0.8% 0.8%
Slide 21: Acquisitions and Servicing Segment (Non-GAAP)
Acquisitions and Servicing Segment (Non-GAAP) (unaudited, in millions) 3Q18 2Q18 1Q18 4Q17 3Q17 FY17 FY16 Interest Income $0 $0 $0 $0 $0 $0 $102 Interest Expense 0 0 0 0 0 0 (20) Provision for Finance Receivable Losses 0 0 0 0 0 0 (14) Net Interest Income after Provision 0 0 0 0 0 0 68 Portfolio Ser
Slide 22: Other (Non-GAAP)
Other (Non-GAAP) (unaudited, in millions) 3Q18 2Q18 1Q18 4Q17 3Q17 FY17 FY16 Finance Charges $2 $3 $3 $3 $3 $12 $35 Finance Receivables Held for Sale Originated as Held for Investment 2 2 2 2 3 11 16 Interest Expense (4) (5) (5) (5) (5) (21) (43) Provision for Finance Receivable Losses 0 3 2 0 (6) (
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