Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q2 2016 Earnings Presentation
30 slides from Onemain's earnings presentation, Aug 4, 2016
Slide 1: OneMain Holdings, Inc. 2Q 2016 Earnings Presentation
OneMain Holdings, Inc. (NYSE: OMF) 2Q 2016 Earnings Presentation
Slide 2: Executive Summary
Executive Summary Net income of $26MM, diluted EPS $0.19 2Q16 Financials C&I adjusted net income* of $130MM, C&I adjusted diluted EPS* of $0.96 (1) C&I average net receivables* of $13.1B, up 12% year over year Receivables Increased secured originations at former OneMain to 33%, up from 13% i
Slide 3: The Leading Consumer Finance Company
The Leading Consumer Finance Company OneMain is America’s premier consumer finance company (1) Leading National Footprint (1) Company Overview 88% of Americans live within driving distance of us $13B+ Consumer & Insurance (“C&I”) receivables* (1) 1,800+ branches in 44 states Approximately 2.2
Slide 4: Building Shareholder Value
Building Shareholder Value C&I 2Q16 earnings are 2.5x higher than the prior year period Strategic Achievements C&I Diluted Earnings Per Share* Expect to achieve $1.50 run-rate C&I Diluted EPS by 3Q17 Capture benefits of the acquisition – Increased secured originations at former OneMain to 33% – Im
Slide 5: Executing Springleaf's Successful Playbook
Executing Springleaf’s Successful Playbook Potential to accelerate former OneMain’s growth by $1.5B+ (1) 800+ branches 1,100+ branches Direct Auto $1.7B+ $250MM+ – Completed roll out at LEAF 4Q14 originations originations – Completed roll out at OneMain 2Q16 since roll out since roll out Local m
Slide 6: Integration Strategies
Integration Strategies 12% year over year receivables growth Secured lending accelerating at former OneMain (1) (2) Former OneMain Secured C&I Pre-acquisition Profile C&I Receivables Growth* ($B) Originations ($MM) Springleaf QoQ OneMain $510 $12.9 $13.1 ~2% $11.7 Receivables $4.4 $4.6 ~4% <5% Growt
Slide 7: Credit Remains Stable
Credit Remains Stable We remain confident in our 2016 full year C&I NCO* outlook of 6.8% – 7.3% C&I Net Charge-off* Trends C&I 30-89 Delinquency* Trends 10.0% 9.0% Credit trends in-line with prior year Delinquency following normal seasonal pattern 9.0% 8.0% 7.5% 3.0% 7.1% 7.3% 8.0% 6.8%-7.3% 6.9% 7.
Slide 8: 2Q16 Financial Performance
2Q16 Financial Performance ($ in millions, except per share statistics) (1) Earnings Summary C&I Return on Receivables*(2) 2Q16 1Q16 2Q15 2Q16 1Q16 Consumer & Insurance $210 $203 $76 Revenue 28.2% 28.3% Acquisitions & Servicing 2 26 32 Charge Offs (7.0%) (7.5%) Real Estate / Other (15) (13) (76) Adj
Slide 9: Executing on Integration
Executing on Integration C&I Operating Expense (“OpEx”) ratio* down 80bps from 4Q15 to 10.0% (3) Pre-Acquisition Profile(1) $100 in annualized savings completed ($MM) $360 C&I Operating Expense $349 ~13% OpEx Ratio* ~9% $333 ~ $325 1H16 Accomplishments Branch sale HQ alignment (2) Centralized
Slide 10: Funding & Liquidity
Funding & Liquidity Balanced unsecured debt maturities and a strong liquidity profile (1) Diverse Funding Sources & Balanced Maturities Funding & Liquidity Progress (1) $14.8B debt, down $0.5B from 3/31/16 12+ months of forward liquidity Unsecured debt $6.5B (44%) • $0.4B of available cash A
Slide 11: Capital Structure
Capital Structure Tangible leverage* continues to improve Tangible leverage*(1) on track Tangible Equity* Improvement ($MM) 18.5x 12/15 1H16A 2H16E 2017E 12.9x C&I / A&S Net Income (2) - $273 $327 $800 11.4x (3) Acquisition Accting / Real Estate / Other - (226) (200) (275) (4) SpringCastle / Branch
Slide 12: Building Shareholder Value
Building Shareholder Value Return on Receivables Long-Term Earnings Potential 2017 C&I EPS Guidance of $5.60 - $6.10 and ~$16B in avg receivables Incremental asset growth drives higher returns and long-term earnings potential 4.5-5.0% 4.1% 4.0% Avg. Net Receivables ~$18B ~$20B Potential EPS at ~5% R
Slide 13: Appendix
% OneMain. Lending Made Personal Appendix
Slide 14: Consolidated Income Statement
Consolidated Income Statement (GAAP) (unaudited, in millions, except per share statistics) 2Q16 1Q16 4Q15 3Q15 2Q15 Finance Charges $723 $785 $643 $422 $406 Finance Receivables Held for Sale Originated as Held for Investment 18 46 47 5 4 Total Interest Income 741 831 690 427 410 Interest Expense (21
Slide 15: Consolidated Balance Sheets
Consolidated Balance Sheets (GAAP) Prior to ASC 310-30 Accounting Policy Change (unaudited, in millions) 6/30/16 3/31/16 12/31/15 3/31/16 12/31/15 Cash and Cash Equivalents $742 $716 $939 $716 $939 Investment Securities 1,744 1,872 1,867 1,872 1,867 Net Finance Receivables: Personal Loans & Retail S
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, in millions) 2Q16 1Q16 4Q15 3Q15 2Q15 Pretax Income (Loss) Attributable to OMH - GAAP basis $42 $224 ($331) ($12) ($20) GAAP to Segment Accounting Basis Adjustments: Interest Income 106 136 100 (3) (3) Interest Expense 14 18 29 32 32 Provision for Fina
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, in millions) 2Q16 1Q16 4Q15 3Q15 2Q15 Consumer & Insurance Pretax Income - Segment Accounting Basis $206 $167 $127 $77 $76 Adjustments: Net Gain on Sale of Personal Loans (22) 0 0 0 0 Net Loss from Accelerated Repayment / Repurchase of Debt 5 8 0 0 0 A
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, in millions) 2Q16 1Q16 4Q15 3Q15 2Q15 Net Finance Receivables Consumer & Insurance $13,304 $12,984 $12,954 $4,044 $4,282 Acquisition & Servicing 0 0 1,703 1,789 1,883 Real Estate 219 542 565 591 619 Other 30 35 41 48 56 Net Finance Receivables - Segmen
Slide 19: Consumer and Insurance Segment
Consumer and Insurance Segment (non-GAAP) (unaudited, in millions) 2Q16 1Q16 4Q15 3Q15 2Q15 Finance Charges $817 $807 $621 $293 $269 Finance Receivables Held for Sale Originated as Held for Investment 14 42 43 0 0 Total Interest Income 831 849 664 293 269 Interest Expense (185) (175) (123) (43) (36)
Slide 20: Acquisitions and Servicing Segment
Acquisitions and Servicing Segment (non-GAAP) (unaudited, in millions) 2Q16 1Q16 4Q15 3Q15 2Q15 Interest Income $0 $102 $108 $113 $118 Interest Expense 0 (20) (20) (22) (22) Provision for Finance Receivable Losses 0 (14) (15) (15) (18) Net Interest Income after Provision 0 68 73 76 78 Portfolio Serv
Slide 21: Real Estate Segment
Real Estate Segment (non-GAAP) (unaudited, in millions) 2Q16 1Q16 4Q15 3Q15 2Q15 Finance Charges $12 $12 $12 $14 $14 Finance Receivables Held for Sale Originated as Held for Investment 3 3 4 3 3 Total Interest Income 15 15 16 17 17 Interest Expense (14) (13) (35) (58) (59) Provision for Finance Rece
Slide 22: Other
Other (non-GAAP) (unaudited, in millions) 2Q16 1Q16 4Q15 3Q15 2Q15 Interest Income $1 $1 $2 $1 $3 Interest Expense (1) 0 (8) (16) (22) Provision for Finance Receivable Losses 0 0 0 0 (1) Net Interest Income (Loss) after Provision 0 1 (6) (15) (20) Operating Expenses (3) 4 1 (1) (13) Total Other Expe
Slide 23: Reconciliation of Balance Sheet Metrics
Reconciliation of Balance Sheet Metrics Prior to ASC 310-30 Accounting Policy Change (unaudited, in millions) 6/30/16 3/31/16 12/31/15 3/31/16 12/31/15 Total Assets $18,544 $19,125 $21,190 $19,055 $21,056 Less: Goodwill (1,422) (1,422) (1,440) (1,422) (1,440) Less: Other Intangible Assets (523) (539
Slide 24: Acquisition Related Accounting Impacts
Acquisition Related Accounting Impacts Includes the impact of non-cash acquisition accounting, acquisition and integration related costs, and other operations YTD FY16 Est % of Ttl SpringLeaf Debt Discount Accretion ($46) ($100) 46% OMFH LLR Provision Catch-up (57) (125) 46% OMFH Receivable Premium
Slide 25: Financial Supplement
Financial Supplement The objective of the following pages is to provide a historical pro forma (as if OneMain and Springleaf had been combined, under their respective accounting policies, for all of 2015) view of OneMain Holdings, Inc. (“OMH”) Consumer and Insurance (“C&I”) segment prior to acquis
Slide 26: Consumer & Insurance Pro forma Reconciliation
Consumer & Insurance Pro forma Reconciliation ($ in millions) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q15 FY15 GAAP Pretax Income (Loss) Attributable to OMH $42 $224 ($331) ($12) ($20) $10 ($353) Acquistions & Servicing (2) (26) (28) (30) (32) (38) (128) Real Estate / Other 15 13 39 63 76 58 236 Net Gain on Sale
Slide 27: Consumer & Insurance Pro forma Financials
Consumer & Insurance Pro forma Financials (Non-GAAP) ($ in millions) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q15 FY 2015 Finance Charges $831 $849 $842 $818 $780 $762 $3,202 Interest Expense 185 175 160 161 152 155 628 Net Interest Income 646 674 682 657 628 607 2,574 Insurance 114 114 121 116 118 120 475 Investm
Slide 28: Pro Forma Consumer & Insurance Key Metrics
Pro Forma Consumer & Insurance Key Metrics ($ in millions) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q15 FY 2015 Revenue 28.2% 28.3% 28.1% 28.5% 28.7% 28.8% 28.5% Charge Offs (7.0%) (7.5%) (6.5%) (5.5%) (6.7%) (7.2%) (6.5%) Risk Adjusted Margin 21.2% 20.8% 21.6% 23.0% 22.0% 21.6% 22.0% Operating Expense (10.0%) (10
Slide 29: 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 30: Important Information
Important Information Use of Non-GAAP Financial Measures We report the operating results of our Consumer and Insurance segment, Acquisitions and Servicing segment, Real Estate segment, and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for certain costs, pr