Onemain Holdings, Inc. · NYSE:OMF
Onemain — Springleaf Holdings — Q3 2013 Earnings Presentation
22 slides from Onemain's earnings presentation, Nov 12, 2013
Slide 1: Q3 2013 Earnings Presentation
Q3 2013 Earnings Presentation November 12, 2013
Slide 2: Important Information
Important Information The following slides are part of a presentation by Springleaf Holdings, Inc. (the "Company") in connection with reporting quarterly financial results and are intended to be viewed as part of that presentation. No representation is made that the information in these slides are c
Slide 3: Non-GAAP Financial Measures
Non‐GAAP Financial Measures We present core earnings as a “non‐GAAP financial measure” in this presentation. This measure is derived on the basis of methodologies other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Please refer to the Appe
Slide 4: 3Q13 Highlights
3Q13 Highlights Financial – Core Earnings for the quarter was $48 million, versus $21 million in 3Q12(1,2) – Core Earnings Per Diluted Share was $0.48 versus $0.21 in the prior year(1,2,3) – Net loss for the quarter was $91 million after one‐time charges(4), versus $45 million in 3Q12 – Branch con
Slide 5: Springleaf Business Model
Springleaf Business Model We are actively growing our business in two primary ways: – Originate loans through our branches and online via iLoan – Acquire loans from sellers looking to exit and partners on a loan‐by‐loan referral basis Originate Acquire Portfolio Loan Branches iLoan Acquisitions Ac
Slide 6: Springleaf Overview
Springleaf Overview Springleaf offers responsible alternatives for borrowers seeking affordable personal loans through a nationwide branch network and online platform – Loans are designed to help borrowers manage through financial challenges and improve credit standing – Fixed rate and fully amort
Slide 7: Poised for Organic Branch Growth
Poised for Organic Branch Growth Strong Consumer Receivables Growth Proven History of Scalability Consumer Receivables ($ mm)(1) Consumer Receivables Per Branch ($ mm)(1) $3,500 $4.0 $2,968 $3,000 $3.6 $2,545 $2,389 $2,414 $3.5 $3.4 $2,500 $3.1 $2,000 $3.0 $3.0 $1,500 $1,000 $2.5 $2.3 $500 $0 $2.0 1
Slide 8: Personal Loan Credit Performance
Personal Loan Credit Performance Personal Loan Profile (1) Personal Loan Charge‐offs ($ mm)(2) $250 7.5% 6.1% $200 6.0% $158 Hard Secured Soft Secured $150 4.0% 4.5% 3.6% 45% 40% 3.4% $100 $94 3.0% $82 $69 $50 1.5% Unsecured (Auto) 15% (Household $0 0.0% 2010 2011 2012 3Q13 YTD Goods) Net Charge‐off
Slide 9: Online Channel ("iLoan") Extends Reach
Online Channel (“iLoan”) Extends Reach Online and mobile presence allows for growth beyond branch footprint and hours of operation iLoan and branches employ identical underwriting standards Opportunity to expedite branch underwriting and servicing: – 24/7 application processing, eSignature, AC
Slide 10: Acquisitions and Servicing – Growth Opportunity
Acquisitions and Servicing – Growth Opportunity In April 2013, Springleaf acquired a 47% interest in a $3.9 billion HSBC consumer portfolio – Captured ~400,000 new borrower accounts – Acquired a servicing center in London, KY with over 200 employees with an average tenure of 8 years(1) Collateral
Slide 11: Legacy Real Estate Portfolio - Long Term Favorable Performance
Legacy Real Estate Portfolio ‐ Long Term Favorable Performance Ceased new mortgage originations in January 2012; proactively managing portfolio Substantially all loans are first‐lien, fixed‐rate, fully‐documented and fully amortizing Portfolio Summary ($ mm)(1) Segment Losses & TDR ($ mm)(1) $15
Slide 12: Liquidity and Funding
Liquidity and Funding Liquidity Term $1.2 billion cash on hand as of September 30 Loan 5% $650 million available undrawn capacity Consumer Unsecured/ Corporate Ratings Securitizations Hybrid 26% 40% Upgraded by Moody’s to B3 on October 14 Mortgage Upgraded by Fitch to B‐ on August 30 Securit
Slide 13: 3Q13 Summary Financial Results
3Q13 Summary Financial Results ($ in mm) 3Q13 2Q13 3Q12 Core earnings down from prior Consumer & Insurance(1) $45 $80 $34 quarter: Acquisitions & Servicing 28 46 0 Prior quarter sale of charged off accounts and subsequent impact to Pre‐Tax Core Earnings $73 $126 $34 quarters thereafter as recovery
Slide 14: Appendix
Appendix Financial
Slide 15: Consolidated Balance Sheet (PGAAP)
Consolidated Balance Sheet (PGAAP) (unaudited, in millions) 9/30/13 6/30/13 3/31/13 Net Finance Receivables 1 Personal Loans & Retail $3,145 $3,028 $2,819 2 Portfolio Acquisitions 2,654 2,818 ‐ 3 Real Estate 8,213 8,456 8,720 4 Total Net Finance Receivables 14,012 14,302 11,539 Allowance for Finance
Slide 16: Consolidated Income Statement (PGAAP)
Consolidated Income Statement (PGAAP) (unaudited, in millions, except per share statistics) 3Q13 2Q13 1Q13 1 Finance Charges $585 $579 $414 2 Interest Expense (228) (241) (228) 3 Provision for Finance Receivable Losses (159) (86) (96) 4 Net Interest Income after Provision 198 252 90 Earnings per sha
Slide 17: Core Earnings (Non-GAAP)
Core Earnings (Non‐GAAP) (unaudited, in millions) 3Q13 2Q13 1Q13 1 Finance Charges $351 $337 $160 2 Interest Expense (60) (60) (36) 3 Provision for Finance Receivable Losses (99) (12) (20) 4 Net Interest Income after Provision 192 265 104 5 Insurance Income 38 36 33 Core earnings per share of $0.48,
Slide 18: Core: Consumer & Insurance Segment (Historical)
Core: Consumer & Insurance Segment (Historical) (unaudited, in millions) 3Q13 2Q13 1Q13 1 Finance Charges $188 $171 $161 2 Interest Expense (38) (36) (37) 3 Provision for Finance Receivable Losses (38) 6 (20) 4 Net Interest Income after Provision 112 141 104 5 Insurance Income 38 36 33 6 Investment
Slide 19: Core: Acquisitions & Servicing Segment
Core: Acquisitions & Servicing Segment (unaudited, in millions) 3Q13 2Q13 1 Finance Charges $163 $167 2 Interest Expense (22) (25) 3 Provision for Finance Receivable Losses (61) (18) 4 Net Interest Income after Provision 80 124 5 Servicing Fees 10 2 6 Operating Expenses (23) (24) 7 Servicing Expense
Slide 20: Non-Core: Real Estate Segment (Historical)
Non‐Core: Real Estate Segment (Historical) (unaudited, in millions) 3Q13 2Q13 1Q13 1 Finance Charges $171 $178 $187 2 Interest Expense (131) (140) (152) 3 Provision ‐ TDR (28) (65) (53) 4 Provision ‐ Non‐TDR (15) (10) (22) 5 Net Interest Expense after Provision (3) (37) (40) 6 Debt Repurchase / Repa
Slide 21: Non-Core: Other (Historical)
Non‐Core: Other (Historical) (unaudited, in millions) 3Q13 2Q13 1Q13 1 Finance Charges $10 $12 $15 2 Interest Expense (3) (4) (4) 3 Provision for Finance Receivable Losses (3) 7 (1) 4 Net Interest Income after Provision 4 15 10 5 Investment Income ‐ ‐ 1 6 Debt Repurchase / Repayment Loss (1) ‐ ‐ 7 T
Slide 22: Reconciliation – Push-Down Accounting to Historical / Pretax Core Earnings
Reconciliation – Push‐Down Accounting to Historical / Pretax Core Earnings (unaudited, in millions) 3Q13 2Q13 1Q13 3Q12 1 1 Push‐Down Accounting Pretax Earnings (Loss) ($120) $84 ($12) ($69) 2 Finance Charges (52) (52) (52) (51) 3 Interest Expense 33 36 34 59 4 Provision for Receivable Losses 14 7 1