Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q1 2018 Earnings Presentation
22 slides from Onemain's earnings presentation, May 2, 2018
Slide 1: 1Q 2018 Earnings Presentation
OneMain Holdings, Inc. (NYSE: OMF) 1Q 2018 Earnings Presentation May 2, 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: 1Q18 Executive Summary
1Q18 Executive Summary Financial ▪ GAAP net income of $124MM, C&I adjusted net income* of $160MM Performance ▪ GAAP diluted EPS of $0.91; C&I adjusted diluted EPS* of $1.18 ▪ C&I ending net receivables* of $14.9B Receivables ▪ C&I yield* of 23.8% vs 24.4% in 1Q17 ▪ C&I net charge-off (“NCO”) ratio*
Slide 5: Financial Performance
Financial Performance ($ in millions, except per share statistics) Consistently generating superior returns Earnings Summary C&I Adjusted Earnings Summary* 1Q18 4Q17 1Q17 1Q18 4Q17 1Q17 Consumer & Insurance * $211 $229 $163 Interest Income $873 $875 $798 (3) Acquisitions & Servicing * 1 0 1 Other Ne
Slide 6: Net Income Trends
Net Income Trends ($ in millions) GAAP and C&I adjusted net income continues to improve Net Income* C&I Adjusted Net Income* GAAP Net Income $160 Tax reform impact $144 $123 $124 $110 $103 (1) $81 $69 $42 $33 $39 1Q17 2Q17 3Q17 4Q17 1Q18 *See appendix for reconciliations and disclosures required by
Slide 7: Receivables (C&I)
Receivables (C&I) ($ in billions) Consistent and disciplined receivables growth Ending Net Receivables (“ENR”)* 1Q18 Key Highlights $14.8 $14.9 ▪ Originations of $2.5 billion $14.3 $13.9 ▪ Secured originations 44% of total $13.2 ▪ Secured ENR 43% of total, up from 37% in 1Q17 ▪ Direct Auto ENR 21% v
Slide 8: Credit Metrics (C&I)
Credit Metrics (C&I) ($ in millions) Credit trends and outlook remain stable 30-89 Days Delinquent* 90+ Days Delinquent* $362 $343 $339 $338 $295 $310 $284 $302 $296 $285 2.4% 2.4% 2.1% 2.3% 2.3% 2.2% 2.1% 2.1% 2.1% 2.3% 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 Net Charge-offs* Key Highligh
Slide 9: Operating Leverage (C&I)
Operating Leverage (C&I) ($ in millions) Continue to achieve strong operating leverage (3) Operating Expense & OpEx Ratio* $1,337 $303 $300 $299 $1,197 $295 $298 9.9% 9.1% 8.9% 8.4% 8.6% 8.2% 8.0% 1Q17 2Q17 3Q17 4Q17 1Q18 2016 2017 (1) (1) ANR $13.3 $13.5 $14.1 $14.6 $14.9 ANR $13.4 $13.9 *C&I OpEx
Slide 10: Funding & Capital
Funding & Capital Diverse funding with a minimum of 12+ months of forward liquidity 1Q18 Funding 1Q18 Capital & Liquidity (2) ▪ Issued $1.25B of 7yr unsecured at 6.875% COF ▪ Secured debt mix of ~56% ▪ Redeemed $700MM of 6.75% notes due 2019 ▪ Cash & Cash Equivalents of $1.8B ▪ Issued $600MM of 3yr
Slide 11: 2018 Strategic Priorities
2018 Strategic Priorities Building shareholder value while reinvesting in our business 2017* 2018E Ending Net Receivables $14.8B +5 to 10% C&I Segment Yield 23.8% Stable Net Charge-offs 7.0% < 7.0% Operating Expense $1.2B +5% Balance Sheet (1) Secured Funding mix ~ 60% 55 to 60% Tangible Leverage *
Slide 12: Appendix
OneMain Financial Appendix 12
Slide 13: Consolidated Income Statements (GAAP)
Consolidated Income Statements (GAAP) (unaudited, in millions, except per share statistics) 1Q18 4Q17 3Q17 2Q17 1Q17 FY17 FY16 Finance Charges $859 $854 $805 $768 $756 $3,183 $3,036 Finance Receivables Held for Sale Originated as Held for Investment 3 3 3 4 3 13 74 Total Interest Income 862 857 808
Slide 14: Consolidated Balance Sheet (GAAP)
Consolidated Balance Sheet (GAAP) (unaudited, in millions) 3/31/18 12/31/17 9/30/17 6/30/17 3/31/17 Cash and Cash Equivalents $1,807 $987 $916 $862 $787 Investment Securities 1,706 1,697 1,668 1,750 1,755 Personal Loans 14,858 14,823 14,356 13,908 13,240 Other Receivables (1) 129 134 140 142 148 Net
Slide 15: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, in millions) 1Q18 4Q17 3Q17 2Q17 1Q17 FY17 FY16 Consumer & Insurance $174 $219 $171 $144 $142 $676 $688 Acquisition & Servicing 1 0 0 0 1 1 225 Other (10) (7) (13) (8) (13) (41) (90) Segment to GAAP Adjustment 3 (25) (37) (70) (73) (205) (467) Income B
Slide 16: Key Segment Metrics
Key Segment Metrics (unaudited, in millions) 3/31/18 12/31/17 9/30/17 6/30/17 3/31/17 Consumer & Insurance $14,870 $14,820 $14,334 $13,856 $13,157 Acquisition & Servicing 0 0 0 0 0 Other 136 142 148 156 164 Segment to GAAP Adjustment (19) (5) 14 38 67 Net Finance Receivables Held for Investment - GA
Slide 17: Consumer and Insurance Segment (Non-GAAP)
Consumer and Insurance Segment (Non-GAAP) (unaudited, in millions, except per share statistics) 1Q18 4Q17 3Q17 2Q17 1Q17 FY17 FY16 Finance Charges $873 $875 $831 $801 $798 $3,305 $3,272 Finance Receivables Held for Sale Originated as Held for Investment 0 0 0 0 0 0 56 Total Interest Income 873 875 8
Slide 18: Consumer & Insurance Segment Metrics (Non-GAAP)
Consumer & Insurance Segment Metrics (Non-GAAP) (unaudited, in millions) 1Q18 4Q17 3Q17 2Q17 1Q17 FY17 FY16 (1) Revenue 25.9% 26.5% 26.3% 26.6% 26.8% 26.6% 28.0% Net Charge-Off (7.2%) (6.4%) (6.4%) (6.9%) (8.5%) (7.0%) (7.1%) Risk Adjusted Margin 18.7% 20.1% 19.9% 19.8% 18.3% 19.6% 20.9% Operating E
Slide 19: Consumer & Insurance Credit Metrics (Non-GAAP)
Consumer & Insurance Credit Metrics (Non-GAAP) (unaudited, in millions) 1Q18 4Q17 3Q17 2Q17 1Q17 FY17 FY16 Gross Charge-Off $297 $264 $257 $266 $313 $1,100 $1,050 Gross Charge-Off Ratio 8.1% 7.2% 7.2% 7.9% 9.6% 7.9% 7.8% Recovery $33 $28 $30 $35 $36 $129 $102 Recovery Ratio 0.9% 0.8% 0.8% 1.0% 1.1%
Slide 20: Acquisitions and Servicing Segment (Non-GAAP)
Acquisitions and Servicing Segment (Non-GAAP) (unaudited, in millions) 1Q18 4Q17 3Q17 2Q17 1Q17 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 21: Other (Non-GAAP)
Other (Non-GAAP) (unaudited, in millions) 1Q18 4Q17 3Q17 2Q17 1Q17 FY17 FY16 Finance Charges $3 $3 $3 $2 $4 $12 $35 Finance Receivables Held for Sale Originated as Held for Investment 2 2 3 4 2 11 16 Interest Expense (5) (5) (5) (5) (6) (21) (43) Provision for Finance Receivable Losses 2 0 (6) 0 (1)
Slide 22: Reconciliation of Balance Sheet Metrics
Reconciliation of Balance Sheet Metrics (unaudited, in millions) 3/31/18 12/31/17 9/30/17 6/30/17 3/31/17 Total Assets $20,467 $19,433 $19,050 $18,698 $17,973 Less: Goodwill (1,422) (1,422) (1,422) (1,422) (1,422) Less: Other Intangible Assets (428) (440) (452) (464) (477) Tangible Managed Assets $1