Onemain Holdings, Inc. · NYSE:OMF
Onemain — Q4 2017 Earnings Presentation
24 slides from Onemain's earnings presentation, Feb 14, 2018
Slide 1: 4Q 2017 Earnings Presentation
OneMain Holdings, Inc. (NYSE: OMF) 4Q 2017 Earnings Presentation February 14, 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: 4Q17 Executive Summary
4Q17 Executive Summary Financial ▪ GAAP net income of $39MM, including one-time tax reform impact of $81MM Performance ▪ GAAP diluted EPS of $0.29; C&I adjusted diluted EPS* of $1.06 ▪ C&I ending net receivables* of $14.8B, up 10% from 4Q16 Receivables ▪ C&I yield* of 23.8% vs 24.3% in 4Q16, reflect
Slide 5: 4Q17 Financial Performance
4Q17 Financial Performance ($ in millions, except per share statistics) Consistently generating superior returns Earnings Summary C&I Adjusted Earnings Summary* 4Q17 3Q17 4Q16 4Q17 3Q17 4Q16 Consumer & Insurance * $229 $194 $175 Interest Income $875 $831 $821 (3) Acquisitions & Servicing* 0 0 2 Othe
Slide 6: FY 2017 Financial Performance
FY 2017 Financial Performance ($ in millions, except per share statistics) Consistently generating superior returns Earnings Summary C&I Adjusted Earnings Summary* 2017 2016 2017 2016 Consumer & Insurance* $760 $784 Interest Income $3,305 $3,328 Acquisitions & Servicing * 1 32 Other Net Revenue(3) 3
Slide 7: Receivables (C&I)
Receivables (C&I) ($ in billions) Ending net receivables growth of 10% from 2016 Ending Net Receivables (“ENR”)* 4Q17 Key Highlights $14.8 ▪ Originations of $3.1 billion $14.3 $13.9 ▪ Secured originations 44% of total $13.5 $13.2 ▪ Secured ENR 43% of total, up from 36% in 4Q16 ▪ Direct Auto ENR 20%
Slide 8: Credit Metrics (C&I)
Credit Metrics (C&I) ($ in millions) Credit trends and outlook remain positive 30-89 Days Delinquent* 90+ Days Delinquent* $362 $343 $352 $339 $304 $295 $302 $284 $285 $296 2.6% 2.4% 2.4% 2.3% 2.3% 2.3% 2.2% 2.1% 2.1% 2.1% 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 Net Charge-offs* Key Highli
Slide 9: Operating Leverage (C&I)
Operating Leverage (C&I) ($ in millions) Continue to drive lower operating expense (“OpEx”) ratio* (3) Operating Expense & OpEx Ratio* $325 $1,337 $303 $300 $299 $1,197 $295 9.6% 9.9% 9.1% 8.9% 8.4% 8.6% 8.2% 4Q16 1Q17 2Q17 3Q17 4Q17 2016 2017 (1) (1) ANR $13.5 $13.3 $13.5 $14.1 $14.6 ANR $13.4 $13.
Slide 10: Funding & Capital
Funding & Capital Diverse funding with 12+ months of forward liquidity 4Q17 Funding 4Q17 Capital & Liquidity (2) ▪ Issued $875MM of 5yr unsecured at 5.6% COF ▪ Secured debt mix of ~60% ▪ Redeemed $700MM of 6.75% notes due 2019 on ▪ Adjusted tangible leverage* of 8.9x (3) January 8, 2018 ▪ $5.1B of u
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 $1.2B +5% Balance Sheet (1) Secured Funding mix ~ 60% 55 to 60% (2) Adj. Tangible Le
Slide 12: Appendix
% OneMain. Lending Made Personal Appendix 12
Slide 13: Impact of Tax Reform
Impact of Tax Reform ($ in millions) Reinvesting a portion of expected tax savings in our platform and people 4Q17 Impacts 4Q17 2018 Expectations Impact GAAP Reported Results ▪ Expected effective tax rate of ~24% Re-measurement of deferred tax asset ($76.0) ▪ Planning to reinvest a portion of expect
Slide 14: Non C&I Results
Non C&I Results ($ in millions) 4Q17 2017 Actual Actual SpringLeaf Debt Discount Accretion ($11) ($69) OMFH LLR Provision Catch-up (3) (35) OMFH Receivable Premium Amort (24) (142) OMFH Receivable Discount 16 56 (1) Acquisition & Integration Costs (10) (72) (2) Other (10) (67) Pre-tax impact ($42) (
Slide 15: Consolidated Income Statement (GAAP)
Consolidated Income Statement (GAAP) (unaudited, in millions, except per share statistics) 4Q17 3Q17 2Q17 1Q17 4Q16 FY17 FY16 Finance Charges $854 $805 $768 $756 $765 $3,183 $3,036 Finance Receivables Held for Sale Originated as Held for Investment 3 3 4 3 3 13 74 Total Interest Income 857 808 772 7
Slide 16: Consolidated Balance Sheet (GAAP)
Consolidated Balance Sheet (GAAP) (unaudited, in millions) 12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 Cash and Cash Equivalents $987 $916 $862 $787 $579 Investment Securities 1,697 1,668 1,750 1,755 1,764 Net Finance Receivables: Personal Loans and Retail Sales Finance 14,829 14,363 13,916 13,249 13,
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (unaudited, in millions) 4Q17 3Q17 2Q17 1Q17 4Q16 FY17 FY16 Consumer & Insurance $219 $171 $144 $142 $136 $676 $688 Acquisition & Servicing 0 0 0 1 2 1 225 Other (7) (13) (8) (13) (15) (41) (90) Segment to GAAP Adjustment (25) (37) (70) (73) (94) (205) (467) Incom
Slide 18: Key Segment Metrics
Key Segment Metrics (unaudited, in millions) 12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 Consumer & Insurance $14,820 $14,334 $13,856 $13,157 $13,455 Acquisition & Servicing 0 0 0 0 0 Other 142 148 156 164 176 Segment to GAAP Adjustment (5) 14 38 67 101 Net Finance Receivables Held for Investment - GA
Slide 19: Consumer and Insurance Segment (Non-GAAP)
Consumer and Insurance Segment (Non-GAAP) (unaudited, in millions, except per share statistics) 4Q17 3Q17 2Q17 1Q17 4Q16 FY17 FY16 Finance Charges $875 $831 $801 $798 $821 $3,305 $3,272 Finance Receivables Held for Sale Originated as Held for Investment 0 0 0 0 0 0 56 Total Interest Income 875 831 8
Slide 20: Consumer & Insurance Segment Metrics (Non-GAAP)
Consumer & Insurance Segment Metrics (Non-GAAP) (unaudited, in millions) 4Q17 3Q17 2Q17 1Q17 4Q16 FY17 FY16 Revenue (1) 26.5% 26.3% 26.6% 26.8% 27.6% 26.6% 28.0% Net Charge-Off (6.4%) (6.4%) (6.9%) (8.5%) (7.5%) (7.0%) (7.1%) Risk Adjusted Margin 20.1% 19.9% 19.8% 18.3% 20.1% 19.6% 20.9% Operating E
Slide 21: Consumer & Insurance Credit Metrics (Non-GAAP)
Consumer & Insurance Credit Metrics (Non-GAAP) (unaudited, in millions) 4Q17 3Q17 2Q17 1Q17 4Q16 FY17 FY16 Gross Charge-Off $264 $257 $266 $313 $281 $1,100 $1,050 Gross Charge-Off Ratio 7.2% 7.2% 7.9% 9.6% 8.3% 7.9% 7.8% Recovery $28 $30 $35 $36 $28 $129 $102 Recovery Ratio 0.8% 0.8% 1.0% 1.1% 0.8%
Slide 22: Acquisitions and Servicing Segment (Non-GAAP)
Acquisitions and Servicing Segment (Non-GAAP) (unaudited, in millions) 4Q17 3Q17 2Q17 1Q17 4Q16 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 23: Other (Non-GAAP)
Other (Non-GAAP) (1) (unaudited, in millions) 4Q17 3Q17 2Q17 1Q17 4Q16 FY17 FY16 Finance Charges $3 $3 $2 $4 $5 $12 $35 Finance Receivables Held for Sale Originated as Held for Investment 2 3 4 2 3 11 16 Total Interest Income 5 6 6 6 8 23 51 Interest Expense (5) (5) (5) (6) (6) (21) (43) Provision f
Slide 24: Reconciliation of Balance Sheet Metrics
Reconciliation of Balance Sheet Metrics (unaudited, in millions) 12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 Total Assets $19,433 $19,050 $18,698 $17,973 $18,123 Less: Goodwill (1,422) (1,422) (1,422) (1,422) (1,422) Less: Other Intangible Assets (440) (452) (464) (477) (492) Tangible Managed Assets $