Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q2 2018 Earnings Presentation
23 slides from Onemain's earnings presentation, Jul 30, 2018
Slide 1: 2Q 2018 Earnings Presentation
OneMain Holdings, Inc. (NYSE: OMF) 2Q 2018 Earnings Presentation July 30, 2018
Slide 2: Important Information
Important Information This document contains summarized information concerning OneMain Holdings, Inc. (the “Company”) and the Company’s business, o perations, financial performance and trends. No representation is made that the information in this document is complete. For additional financial, stat
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: 2Q18 Executive Summary
2Q18 Executive Summary (1) (1) Financial ▪ GAAP net income of $7MM and diluted EPS of $0.05 Performance ▪ C&I adjusted net income* of $160MM and adjusted diluted EPS* of $1.18 ▪ C&I ending net receivables* of $15.4B, up 11% vs. 2Q17 Receivables ▪ C&I yield* of 24.1% vs 23.9% in 2Q17 ▪ C&I net charge
Slide 5: Financial Performance
Financial Performance ($ in millions, except per share statistics) Consistently generating superior returns Earnings Summary C&I Adjusted Earnings Summary* 2Q18 1Q18 2Q17 2Q18 1Q18 2Q17 Consumer & Insurance * $211 $211 $174 Interest Income $911 $873 $801 (2) Acquisitions & Servicing * 0 1 0 Other Ne
Slide 6: Net Income Trends
Net Income Trends ($ 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 $160 $160 $144 $123 $124 $110 (1) $69 $81 (2) $106 $42 $39 $… $7 2Q17 3Q17 4Q17 1Q18 2Q18 *See appendix for reconcil
Slide 7: Receivables (C&I)
Receivables (C&I) ($ in billions) Consistent and disciplined receivables growth Ending Net Receivables (“ENR”)* 2Q18 Key Highlights $15.4 $14.8 $14.9 ▪ Originations of $3.2 $14.3 $13.9 ▪ Secured originations 47% of total ▪ Secured ENR 44% of total, up from 40% in 2Q17 ▪ Direct Auto ENR 22% vs 18% in
Slide 8: Credit Metrics (C&I)
Credit Metrics (C&I) ($ in millions) Credit trends and outlook remain stable 30-89 Days Delinquent* 90+ Days Delinquent* $362 $343 $328 $339 $338 $295 $310 $285 $296 $293 2.4% 2.4% 2.1% 2.1% 2.3% 2.3% 2.1% 2.1% 2.1% 1.9% 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Net Charge-offs* Key Highligh
Slide 9: Operating Leverage (C&I)
Operating Leverage (C&I) ($ in millions, ANR $ in billions) Achieving operating leverage while reinvesting in our business (3) Operating Expense & OpEx Ratio*(1) $615 $603 $317 $300 $299 $295 $298 8.9% 9.0% 8.4% 8.4% 8.2% 8.0% 8.2% 2Q17 3Q17 4Q17 1Q18 2Q18 YTD17 YTD18 (1) (1) ANR $13.5 $14.1 $14.6 $
Slide 10: Funding & Capital
Funding & Capital Diverse funding with a minimum of 12+ months of forward liquidity 2Q18 Funding & Other Activities 2Q18 Capital & Liquidity (1) ▪ Issued $900MM of 7.125% notes due 2026 ▪ Secured funding mix of ~53% ▪ Redeemed $800MM of 7.25% notes due 2021 ▪ Conduit capacity of $5.4B (up $0.5B) ▪ U
Slide 11: 2018 Strategic Priorities
2018 Strategic Priorities Building shareholder value while reinvesting in our business 2018E 2017 2018E Updated Ending Net Receivables $14.8B +5 to 10% +8 to 10% C&I Segment* Yield 23.8% Stable Stable Net Charge-offs 7.0% <7.0% 6.5 to 6.7% Operating Expense $1.2B +5% +5% Balance Sheet (1) (1) Secure
Slide 12: Appendix
OneMain Financial Appendix 12
Slide 13: Impact of Fortress Transaction
Impact of Fortress Transaction ($ in millions) Non-cash, equity neutral and not tax deductible 2Q18 Comments Transaction Proforma Reported Impact ▪ Incurred upon completion of Fortress’ sale of OMF stake to the Apollo-Värde investor Pretax income $149 ($106) $43 consortium Net income $113 ($106) $7
Slide 14: Consolidated Income Statements (GAAP)
Consolidated Income Statements (GAAP) (unaudited, in millions, except per share statistics) 2Q18 1Q18 4Q17 3Q17 2Q17 FY17 FY16 Finance Charges $902 $859 $854 $805 $768 $3,183 $3,036 Finance Receivables Held for Sale Originated as Held for Investment 3 3 3 3 4 13 74 Total Interest Income 905 862 857
Slide 15: Consolidated Balance Sheet (GAAP)
Consolidated Balance Sheet (GAAP) (unaudited, in millions) 6/30/18 3/31/18 12/31/17 9/30/17 6/30/17 Cash and Cash Equivalents $556 $1,807 $987 $916 $862 Investment Securities 1,720 1,706 1,697 1,668 1,750 Personal Loans 15,384 14,858 14,823 14,356 13,908 Other Receivables (1) 124 129 134 140 142 Net
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, in millions) 2Q18 1Q18 4Q17 3Q17 2Q17 FY17 FY16 Consumer & Insurance $154 $174 $219 $171 $144 $676 $688 Acquisition & Servicing 0 1 0 0 0 1 225 Other (109) (10) (7) (13) (8) (41) (90) Segment to GAAP Adjustment (2) 3 (25) (37) (70) (205) (467) Income B
Slide 17: Key Segment Metrics
Key Segment Metrics (unaudited, in millions) 6/30/18 3/31/18 12/31/17 9/30/17 6/30/17 Consumer & Insurance $15,406 $14,870 $14,820 $14,334 $13,856 Acquisition & Servicing 0 0 0 0 0 Other 131 136 142 148 156 Segment to GAAP Adjustment (29) (19) (5) 14 38 Net Finance Receivables Held for Investment -
Slide 18: Consumer and Insurance Segment (Non-GAAP)
Consumer and Insurance Segment (Non-GAAP) (unaudited, in millions, except per share statistics) 2Q18 1Q18 4Q17 3Q17 2Q17 FY17 FY16 Finance Charges $911 $873 $875 $831 $801 $3,305 $3,272 Finance Receivables Held for Sale Originated as Held for Investment 0 0 0 0 0 0 56 Total Interest Income 911 873 8
Slide 19: Consumer & Insurance Segment Metrics (Non-GAAP)
Consumer & Insurance Segment Metrics (Non-GAAP) (unaudited, in millions) 2Q18 1Q18 4Q17 3Q17 2Q17 FY17 FY16 (1) Revenue 26.4% 25.9% 26.5% 26.3% 26.6% 26.6% 28.0% Net Charge-Off (6.6%) (7.2%) (6.4%) (6.4%) (6.9%) (7.0%) (7.1%) Risk Adjusted Margin 19.8% 18.7% 20.1% 19.9% 19.8% 19.6% 20.9% Operating E
Slide 20: Consumer & Insurance Credit Metrics (Non-GAAP)
Consumer & Insurance Credit Metrics (Non-GAAP) (unaudited, in millions) 2Q18 1Q18 4Q17 3Q17 2Q17 FY17 FY16 Gross Charge-Off $285 $297 $264 $257 $266 $1,100 $1,050 Gross Charge-Off Ratio 7.6% 8.1% 7.2% 7.2% 7.9% 7.9% 7.8% Recovery $35 $33 $28 $30 $35 $129 $102 Recovery Ratio 0.9% 0.9% 0.8% 0.8% 1.0%
Slide 21: Acquisitions and Servicing Segment (Non-GAAP)
Acquisitions and Servicing Segment (Non-GAAP) (unaudited, in millions) 2Q18 1Q18 4Q17 3Q17 2Q17 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) 2Q18 1Q18 4Q17 3Q17 2Q17 FY17 FY16 Finance Charges $3 $3 $3 $3 $2 $12 $35 Finance Receivables Held for Sale Originated as Held for Investment 2 2 2 3 4 11 16 Interest Expense (5) (5) (5) (5) (5) (21) (43) Provision for Finance Receivable Losses 3 2 0 (6) 0 (
Slide 23: Balance Sheet Metrics
Balance Sheet Metrics (unaudited, in millions) 6/30/18 3/31/18 12/31/17 9/30/17 6/30/17 Total Assets $19,640 $20,467 $19,433 $19,050 $18,698 Less: Goodwill (1,422) (1,422) (1,422) (1,422) (1,422) Less: Other Intangible Assets (409) (428) (440) (452) (464) Tangible Managed Assets $17,809 $18,617 $17,