Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document


 


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported): July 29, 2019 (July 29, 2019)

ONEMAIN HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Delaware
001-36129
27-3379612
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
601 N.W. Second Street, Evansville, IN
 
47708
(Address of principal executive offices)
 
(Zip Code)
 
(812) 424-8031
 
          (Registrant’s telephone number, including area code)
 
Not Applicable
 
          (Former name or former address, if changed since last report)
 
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
Common Stock, par value $0.01 per share
 
OMF
 
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 





Item 2.02
Results of Operations and Financial Condition.
On July 29, 2019, OneMain Holdings, Inc. (the “Company”) issued a press release announcing the Company’s results for its fiscal quarter ended June 30, 2019. A copy of the Company’s press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference in its entirety.

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless expressly set forth as being incorporated by reference into such filing.

Item 7.01
Regulation FD Disclosure.
On July 29, 2019, the Company issued a press release announcing that the Company declared a regular quarterly dividend of $0.25 per share and a special dividend of $2.00 per share, payable on September 13, 2019 to record holders of our common stock as of the close of business on August 27, 2019. A copy of the Company’s press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

The information in the press release is being furnished, not filed, pursuant to this Item 7.01. Accordingly, the information in the press release will not be incorporated by reference into any registration statement filed by the Company under the Securities Act unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this Current Report with respect to the press release is not intended to, and does not, constitute a determination or admission by the Company that the information in this Current Report with respect to the press release is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.

Item 9.01
Financial Statements and Exhibits.
(d)     Exhibits.
Exhibit Number
 
Description
 







Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
ONEMAIN HOLDINGS, INC.
 
 
 
(Registrant)
 
 
 
 
Date:
July 29, 2019
By:
/s/ Micah R. Conrad
 
 
 
Micah R. Conrad
 
 
 
Executive Vice President and Chief Financial Officer






(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
ONEMAIN HOLDINGS, INC. REPORTS SECOND QUARTER 2019 RESULTS
2Q 2019 diluted EPS of $1.42
2Q 2019 C&I adjusted diluted EPS of $1.62
2Q 2019 C&I Ending Net Finance Receivables of $17.0 billion
2Q 2019 C&I Net Charge-Off ratio of 6.2%
Declares $2.00 per share special dividend

Evansville, IN, July 29, 2019 - OneMain Holdings, Inc. (NYSE: OMF) today reported pretax income of $256 million and net income of $194 million for the second quarter of 2019, compared to $43 million and $7 million, respectively, in the prior year quarter. Net income for the second quarter of 2018 included a charge of approximately $106 million in connection with the completion of Fortress Investment Group LLC's sale of its stake in the company to funds managed by Apollo Global Management, LLC (NYSE: APO) and Värde Partners, Inc. on June 25, 2018.

Earnings per diluted share were $1.42 in the second quarter of 2019, compared to $0.05 in the prior year quarter.

On July 29, 2019, the company declared a regular quarterly dividend of $0.25 per share and a special dividend of $2.00 per share, payable on September 13, 2019 to record holders of our common stock as of the close of business on August 27, 2019.

"We drove strong earnings growth and further enhanced the strength of our balance sheet during the second quarter 2019," said Doug Shulman, President and CEO of OneMain. "In addition, we declared a robust special dividend, underscoring the considerable capital generation of our business as we continue to execute on the strategic priorities that we outlined for 2019, which include disciplined receivables growth, improved credit losses and reduced leverage. We will continue to focus on serving our customers and, in so doing, will also drive tremendous shareholder value over the long term."

The following segment results are reported on a non-GAAP basis. Refer to the required reconciliations of non-GAAP to comparable GAAP measures at the end of this press release.

Consumer and Insurance Segment (“C&I”)

C&I generated adjusted pretax income of $291 million and adjusted net income of $221 million for the second quarter of 2019, compared to $211 million and $160 million, respectively, in the prior year quarter. Adjusted earnings per diluted share were $1.62 for the second quarter of 2019, compared to $1.18 in the prior year quarter.

Originations totaled $3.9 billion in the second quarter of 2019, up 21% from $3.2 billion in the prior year quarter. The percentage of secured originations was 55% in the second quarter of 2019, up from 47% in the prior year quarter.

Ending net finance receivables reached $17.0 billion at June 30, 2019, up 10% from $15.4 billion in the prior year quarter. Secured receivables represented $1.7 billion of the increase in ending net finance receivables from the prior year and were 50% of ending net finance receivables at June 30, 2019, up from 44% in the prior year quarter.

Average net finance receivables were $16.6 billion in the second quarter of 2019, up 10% from $15.1 billion in the prior year quarter.

Yield was 24.2% in the second quarter of 2019, up from 24.1% in the prior year quarter, primarily reflecting improvement in late stage delinquencies.

Interest income in the second quarter of 2019 was $999 million, up from $911 million in the prior year quarter, reflecting higher average receivables and higher yield.

The provision for finance receivable losses was $263 million in the second quarter of 2019, essentially flat with $261 million in the prior year quarter.

The 30-89 day delinquency ratio was 2.1% at June 30, 2019, up from 1.9% at March 31, 2019 and consistent with 2.1% at June 30, 2018.


1




The 90+ day delinquency ratio was 1.7% at June 30, 2019, down from 2.1% at March 31, 2019 and down from 1.9% at June 30, 2018.

The net charge-off ratio was 6.2% in the second quarter of 2019, down from 7.1% in the first quarter of 2019 and down from 6.6% in the prior year quarter.

Operating expense for the second quarter of 2019 was $319 million, up 1% from $317 million in the prior year quarter, primarily reflecting inflationary increases and investment in the business.

Acquisitions and Servicing Segment (“A&S”)

A&S generated adjusted pretax loss of $1 million in the second quarter of 2019, compared to breaking even in the prior year quarter.

Other

During the second quarter of 2019, Other generated an adjusted pretax loss of $3 million, consistent with $3 million of adjusted pretax loss in the prior year quarter. Other consists of our non-originating legacy operations, which include our liquidating real estate loan portfolio.

Funding and Liquidity

As of June 30, 2019, the company had principal debt balances outstanding of $15.9 billion, 45% of which was secured and 55% of which was unsecured. The company had $786 million of cash and cash equivalents, which included $420 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that are unavailable for general corporate purposes. The company had $6.7 billion of undrawn revolving conduit facilities and $8.9 billion of unencumbered personal loans.

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 interest expense and operating costs, to reflect the manner in which we assess our business results and (ii) excludes the impact of applying purchase accounting (eliminates premiums/discounts on our finance receivables and long-term debt at acquisition, as well as the amortization/accretion in future periods). Consumer and Insurance adjusted pretax income (loss), Consumer and Insurance adjusted net income (loss), Consumer and Insurance adjusted earnings (loss) per diluted share, Acquisitions and Servicing adjusted pretax income (loss), and Other adjusted pretax income (loss) are key performance measures used by management in evaluating the performance of our business. Consumer and Insurance adjusted pretax income (loss), Acquisitions and Servicing adjusted pretax income (loss), and Other adjusted pretax income (loss) represent income (loss) before income taxes on a Segment Accounting Basis and excludes net losses resulting from repurchases and repayments of debt, net gain on sale of cost method investment, acquisition-related transaction and integration expenses, restructuring charges, additional net gain on sale of SpringCastle interests, net loss on sale of real estate loans, and non-cash incentive compensation expense related to the Fortress Transaction. Management believes these non-GAAP financial measures are useful in assessing the profitability of our segments and uses these non-GAAP financial measures in evaluating our operating performance and as a performance goal under the company’s executive compensation programs. These non-GAAP financial measures should be considered supplemental to, but not as a substitute for or superior to, income (loss) before income taxes, net income, or other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles ("GAAP").

Conference Call & Webcast Information

OneMain management will host a conference call and webcast to discuss our second quarter 2019 results and other general matters at 8:00 am Eastern Time on Tuesday, July 30, 2019. Both the call and webcast are open to the general public. The general public is invited to listen to the call by dialing 877-330-3668 (U.S. domestic) or 678-304-6859 (international), and using conference ID 1077527, or via a live audio webcast through the Investor Relations section of the website. For those unable to listen to the live broadcast, a replay will be available on our website, or by dialing 800-585-8367 (U.S. domestic) or 404-537-3406, and using conference ID 1077527, beginning approximately two hours after the event. The replay of the conference call will be available via audio webcast through August 10, 2019. An investor presentation will be available on the Investor Relations page of OneMain’s website at https://www.omf.com prior to the start of the conference call.

2




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, statistical and business related information see the Company's most recent Annual Report on Form 10-K (“Form 10-K”) and Quarterly Reports on Form 10-Q (“Form 10-Qs”) filed with the U.S. Securities and Exchange Commission (the “SEC”), as well as the Company’s other reports filed with the SEC from time to time. Such reports are or will be available in the Investor Relations section of the Company's website (https://www.omf.com) and the SEC's website (http://www.sec.gov).

Cautionary Note Regarding Forward-Looking Statements
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but instead represent only management’s current beliefs regarding future events. By their nature, forward-looking statements are subject to risks, uncertainties, assumptions and other important factors that may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements. We caution you not to place undue reliance on these forward-looking statements that speak only as of the date on which they were made. We do not undertake any obligation to update or revise these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments or otherwise, except as required by law. Forward-looking statements include, without limitation, statements concerning future plans, objectives, goals, projections, strategies, events or performance, and underlying assumptions and other statements related thereto. Statements preceded by, followed by or that otherwise include the words “anticipates,” “appears,” “are likely,” “believes,” “estimates,” “expects,” “foresees,” “intends,” “plans,” “projects” and similar expressions or future or conditional verbs such as “would,” “should,” “could,” “may,” or “will,” are intended to identify forward-looking statements. Important factors that could cause actual results, performance or achievements to differ materially from those expressed in or implied by forward-looking statements include, without limitation, the following: adverse changes in general economic conditions, including the interest rate environment and the financial markets; risks related to the acquisition or sale of assets or businesses or the formation, termination or operation of joint ventures or other strategic alliances, including increased loan delinquencies or net charge-offs, integration or migration issues, increased costs of servicing, incomplete records, and retention of customers; our estimates of the allowance for finance receivable losses may not be adequate to absorb actual losses, causing our provision for finance receivable losses to increase, which would adversely affect our results of operations; increased levels of unemployment and personal bankruptcies; our strategy of increasing the proportion of secured loans may lead to declines in or slower growth in our personal loan receivables and portfolio yield; adverse changes in the rate at which we can collect or potentially sell our finance receivables portfolio; our decentralized branch loan approval process could expose us to greater than historical delinquencies and charge-offs; natural or accidental events such as earthquakes, hurricanes, tornadoes, fires, or floods affecting our customers, collateral, or our branches or other operating facilities; war, acts of terrorism, riots, civil disruption, pandemics, disruptions in the operation of our information systems, or other events disrupting business or commerce; a failure in or breach of our operational or security systems or infrastructure or those of third parties, including as a result of cyber-attacks; or other cyber-related incidents involving the loss, theft or unauthorized disclosure of personally identifiable information, or “PII,” of our present or former customers; our credit risk scoring models may be inadequate to properly assess the risk of customer unwillingness or lack of capacity to repay; adverse changes in our ability to attract and retain employees or key executives to support our businesses; increased competition, lack of customer responsiveness to our distribution channels, an inability to make technological improvements, and the ability of our competitors to offer a more attractive range of personal loan

3




products than we offer; changes in federal, state or local laws, regulations, or regulatory policies and practices that adversely affect our ability to conduct business or the manner in which we are permitted to conduct business, such as licensing requirements, pricing limitations or restrictions on the method of offering products, as well as changes that may result from increased regulatory scrutiny of the sub-prime lending industry, our use of third-party vendors and real estate loan servicing, or changes in corporate or individual income tax laws or regulations, including effects of the Tax Cuts and Jobs Act; risks associated with our insurance operations, including insurance claims that exceed our expectations or insurance losses that exceed our reserves; we may be unable to successfully implement our growth strategy for our consumer lending business or successfully acquire portfolios of personal loans; declines in collateral values or increases in actual or projected delinquencies or net charge-offs; potential liability relating to finance receivables which we have sold or securitized or may sell or securitize in the future if it is determined that there was a non-curable breach of a representation or warranty made in connection with such transactions; the costs and effects of any actual or alleged violations of any federal, state or local laws, rules or regulations, including any associated litigation; the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority and any associated litigation; our continued ability to access the capital markets and maintain adequate current sources of funds to satisfy our cash flow requirements; our ability to comply with our debt covenants; our ability to generate sufficient cash to service all of our indebtedness; any material impairment or write-down of the value of our assets; the ownership of our common stock continues to be highly concentrated, which may prevent minority stockholders from influencing significant corporate decisions and may result in conflicts of interest; the effects of any downgrade of our debt ratings by credit rating agencies, which could have a negative impact on our cost of and/or access to capital; our substantial indebtedness, which could prevent us from meeting our obligations under our debt instruments and limit our ability to react to changes in the economy or our industry or our ability to incur additional borrowings; our ability to maintain sufficient capital levels in our regulated and unregulated subsidiaries; changes in accounting standards or tax policies and practices and the application of such new standards, policies and practices; management estimates and assumptions, including estimates and assumptions about future events, may prove to be incorrect; any failure to achieve the SpringCastle Portfolio performance requirements, which could, among other things, cause us to lose our loan servicing rights over the SpringCastle Portfolio; various risks relating to continued compliance with the Settlement Agreement with the U.S. Department of Justice; and other risks and uncertainties described in the “Risk Factors” and “Management’s Discussion and Analysis” sections of the Company’s most recent Form 10-K and Form 10-Qs filed with the SEC and in the Company’s other filings with the SEC from time to time.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. You should specifically consider the factors identified in this document that could cause actual results to differ before making an investment decision to purchase our securities and should not place undue reliance on any of our forward-looking statements. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.


4




OneMain Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
 
 
 
 
 
 
Quarter-to-Date
 
Year-to-Date
(unaudited, in millions, except per share amounts)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
6/30/2019
 
6/30/2018
 
 
 
 
 
 
 
 
 
 
 
Interest Income:
 
 
 
 
 
 
 
 
 
 
Finance charges
 
$
998

 
$
953

 
$
902

 
$
1,950

 
$
1,761

Finance receivables held for sale
 
2

 
3

 
3

 
5

 
6

Total interest income
 
1,000

 
956

 
905

 
1,955

 
1,767

 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
(238
)
 
(236
)
 
(220
)
 
(473
)
 
(420
)
Provision for finance receivable losses
 
(268
)
 
(286
)
 
(260
)
 
(554
)
 
(514
)
Net interest income after provision for finance receivable losses
 
494

 
434

 
425

 
928

 
833

 
 
 
 
 
 
 
 
 
 
 
Other Revenues:
 
 
 
 
 
 
 
 
 
 
Insurance
 
114

 
110

 
107

 
224

 
212

Investment
 
24

 
26

 
19

 
50

 
32

Net gain on sale of real estate loans
 

 
3

 

 
3

 

Net loss on repurchases and repayments of debt
 
(12
)
 
(21
)
 
(7
)
 
(33
)
 
(8
)
Other (1)
 
30

 
30

 
21

 
60

 
41

Total other revenues
 
156

 
148

 
140

 
304

 
277

 
 
 
 
 
 
 
 
 
 
 
Other Expenses
 
 
 
 
 
 
 
 
 
 
Salaries and benefits 
 
(204
)
 
(199
)
 
(312
)
 
(404
)
 
(510
)
Other operating expenses
 
(140
)
 
(136
)
 
(159
)
 
(276
)
 
(293
)
Insurance policy benefits and claims
 
(50
)
 
(45
)
 
(51
)
 
(94
)
 
(96
)
Total other expenses
 
(394
)
 
(380
)
 
(522
)
 
(774
)
 
(899
)
Income before income taxes
 
256

 
202

 
43

 
458

 
211

Income taxes
 
(62
)
 
(50
)
 
(36
)
 
(112
)
 
(80
)
Net income
 
$
194

 
$
152

 
$
7

 
$
346

 
$
131

 
 
 
 
 
 
 
 
 
 
 
Share Data:
 
 
 
 
 
 
 
 
 
 
Weighted average number of diluted shares:
 
136.2

 
136.2

 
136.0

 
136.2

 
135.9

Diluted EPS
 
$
1.42

 
$
1.11

 
$
0.05

 
$
2.54

 
$
0.96

Book value per basic share
 
$
30.43

 
$
29.03

 
$
25.69

 
$
30.43

 
$
25.69

Return on assets
 
3.7
%
 
2.9
%
 
0.1
%
 
3.3
%
 
1.3
%
 
 
Note: Year-to-Date may not sum due to rounding.
(1) The first quarter of 2019 includes the fair value impairment of the remaining loans in held for sale after certain real estate loan sales and a gain on sale related to an investment held at cost.


5




OneMain Holdings, Inc.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
 
 
 
 
As of
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Cash and cash equivalents
 
$
786

 
$
1,709

 
$
556

Investment securities
 
1,721

 
1,743

 
1,720

Net finance receivables:
 
 
 
 
 
 
Personal loans
 
16,980

 
16,136

 
15,384

Other receivables (1)
 

 

 
124

Net finance receivables
 
16,980

 
16,136

 
15,508

Unearned insurance premium and claim reserves
 
(720
)
 
(668
)
 
(611
)
Allowance for finance receivable losses
 
(744
)
 
(733
)
 
(702
)
Net finance receivables, less unearned insurance premium and claim
     reserves and allowance for finance receivable losses
 
15,516

 
14,735

 
14,195

Finance receivables held for sale (1)
 
74

 
78

 
123

Restricted cash and restricted cash equivalents
 
420

 
575

 
587

Goodwill
 
1,422

 
1,422

 
1,422

Other intangible assets
 
362

 
372

 
409

Other assets
 
716

 
724

 
628

Total assets
 
$
21,017

 
$
21,358

 
$
19,640

 
 
 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
 
 
Long-term debt
 
$
15,551

 
$
16,117

 
$
15,054

Insurance claims and policyholder liabilities
 
648

 
642

 
690

Deferred and accrued taxes
 
34

 
81

 
3

Other liabilities
 
643

 
568

 
404

Total liabilities
 
16,876

 
17,408

 
16,151

 
 
 
 
 
 
 
Common stock
 
1

 
1

 
1

Additional paid-in capital
 
1,683

 
1,682

 
1,674

Accumulated other comprehensive income (loss)
 
28

 
(2
)
 
(21
)
Retained earnings
 
2,429

 
2,269

 
1,835

Total shareholders’ equity
 
4,141

 
3,950

 
3,489

Total liabilities and shareholders’ equity
 
$
21,017

 
$
21,358

 
$
19,640

 
 
(1) On September 30, 2018, the company transferred all of the real estate loans from Other Receivables to Finance Receivables Held for Sale.

6




OneMain Holdings, Inc.
 
 
CONSOLIDATED KEY FINANCIAL METRICS (UNAUDITED)
 
 
 
 
 
Quarter-to-Date
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
 
 
 
 
 
 
Non-TDR Net Finance Receivables
 
$
16,431

 
$
15,634

 
$
15,079

TDR Net Finance Receivables
 
549

 
502

 
429

Net Finance Receivables
 
$
16,980

 
$
16,136

 
$
15,508

 
 
 
 
 
 
 
Average Net Receivables
 
$
16,538

 
$
16,146

 
$
15,239

Average Daily Debt Balances
 
15,974

 
15,839

 
15,569

Origination Volume
 
3,879

 
2,582

 
3,216

 
 
 
 
 
 
 
Non-TDR Allowance
 
$
517

 
$
537

 
$
532

TDR Allowance
 
227

 
196

 
170

Allowance
 
$
744

 
$
733

 
$
702

 
 
 
 
 
 
 
Non-TDR Allowance Ratio
 
3.0
 %
 
3.4
 %
 
3.5
 %
TDR Allowance Ratio
 
41.4
 %
 
39.0
 %
 
39.6
 %
Allowance Ratio
 
4.4
 %
 
4.5
 %
 
4.5
 %
 
 
 
 
 
 
 
Gross Charge-Off
 
$
290

 
$
311

 
$
278

Recoveries
 
(33
)
 
(27
)
 
(31
)
Net Charge-Off
 
$
257

 
$
284

 
$
247

 
 
 
 
 
 
 
Gross Charge-Off Ratio
 
7.0
 %
 
7.8
 %
 
7.3
 %
Recoveries
 
(0.8
)%
 
(0.7
)%
 
(0.8
)%
Net Charge-Off Ratio
 
6.2
 %
 
7.1
 %
 
6.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30-89 Delinquency
 
$
364

 
$
312

 
$
338

30+ Delinquency
 
655

 
647

 
647

60+ Delinquency
 
435

 
468

 
445

90+ Delinquency
 
291

 
335

 
309

 
 
 
 
 
 
 
30-89 Delinquency Ratio
 
2.1
 %
 
1.9
 %
 
2.2
 %
30+ Delinquency Ratio
 
3.9
 %
 
4.0
 %
 
4.2
 %
60+ Delinquency Ratio
 
2.6
 %
 
2.9
 %
 
2.9
 %
90+ Delinquency Ratio
 
1.7
 %
 
2.1
 %
 
2.0
 %
 
 
Note: Delinquency ratios are calculated as a percentage of net finance receivables. Charge-off ratios are calculated as a percentage of average net finance receivables. Ratios may not sum due to rounding.

7




OneMain Holdings, Inc.
BALANCE SHEET METRICS (UNAUDITED)
 
 
 
 
 
As of
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
 
 
 
 
 
 
Liquidity
 
 
 
 
 
 
Cash and cash equivalents
 
$
786

 
$
1,709

 
$
556

Unencumbered personal loans
 
8,906

 
6,944

 
6,196

Undrawn conduit facilities
 
6,700

 
6,200

 
5,350

 
 
 
 
 
 
 
Total Assets
 
$
21,017

 
$
21,358

 
$
19,640

Less: Goodwill
 
(1,422
)
 
(1,422
)
 
(1,422
)
Less: Other intangible assets
 
(362
)
 
(372
)
 
(409
)
Tangible Managed Assets
 
$
19,233

 
$
19,564

 
$
17,809

 
 
 
 
 
 
 
Long-term debt
 
$
15,551

 
$
16,117

 
$
15,054

Less: Junior subordinated debt
 
(172
)
 
(172
)
 
(172
)
Adjusted Debt
 
$
15,379

 
$
15,945

 
$
14,882

 
 
 
 
 
 
 
Total Shareholders' Equity
 
$
4,141

 
$
3,950

 
$
3,489

Less: Goodwill
 
(1,422
)
 
(1,422
)
 
(1,422
)
Less: Other intangible assets
 
(362
)
 
(372
)
 
(409
)
Plus: Junior subordinated debt
 
172

 
172

 
172

Adjusted Tangible Common Equity
 
$
2,529

 
$
2,328

 
$
1,830

 
 
 
 
 
 
 
Adjusted Debt to Adjusted Tangible Common Equity (Tangible Leverage)
 
6.1
x
 
6.8
x
 
8.1
x
 
 
 
 
 
 
 
Adjusted Tangible Common Equity to Tangible Managed Assets
 
13.1
%
 
11.9
%
 
10.3
%
 
 
 
 
 
 
 
 
 

8




OneMain Holdings, Inc.
 
 
 
 
CONSOLIDATED RETURN ON RECEIVABLES (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter-to-Date
 
Year-to-Date
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
6/30/2019
 
6/30/2018
 
 
 
 
 
 
 
 
 
 
 
Revenue (1)
 
26.8
 %
 
26.6
 %
 
26.1
 %
 
26.7
 %
 
25.8
 %
Net Charge-Off
 
(6.2
)%
 
(7.1
)%
 
(6.5
)%
 
(6.7
)%
 
(6.8
)%
Risk Adjusted Margin
 
20.6
 %
 
19.5
 %
 
19.6
 %
 
20.1
 %
 
19.0
 %
Operating Expenses
 
(8.3
)%
 
(8.4
)%
 
(12.4
)%
 
(8.4
)%
 
(10.6
)%
Unlevered Return on Receivables
 
12.3
 %
 
11.1
 %
 
7.2
 %
 
11.7
 %
 
8.4
 %
Interest Expense
 
(5.8
)%
 
(5.9
)%
 
(5.8
)%
 
(5.8
)%
 
(5.6
)%
Change in Allowance
 
(0.3
)%
 
(0.1
)%
 
(0.3
)%
 
(0.2
)%
 
(0.1
)%
Income Tax Expense  
 
(1.5
)%
 
(1.3
)%
 
(0.9
)%
 
(1.4
)%
 
(1.1
)%
Return on Receivables
 
4.7
 %
 
3.8
 %
 
0.2
 %
 
4.3
 %
 
1.7
 %
 
 
Note: All ratios are based on consolidated results as a percentage of average net finance receivables held for investment. Ratios may not sum due to rounding.
 
(1) Revenue includes interest income on finance receivables plus other revenues less insurance policy benefits and claims.

9




OneMain Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
 
 
 
 
 
 
 
 
Quarter-to-Date
 
Year-to-Date
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
6/30/2019
 
6/30/2018
 
 
 
 
 
 
 
 
 
 
 
Consumer & Insurance
 
$
270

 
$
232

 
$
154

 
$
502

 
$
327

Acquisitions & Servicing
 
6

 

 

 
6

 
1

Other
 
(3
)
 
(3
)
 
(109
)
 
(6
)
 
(119
)
Segment to GAAP Adjustment
 
(17
)
 
(27
)
 
(2
)
 
(44
)
 
2

Income Before Income Taxes - GAAP basis
 
$
256

 
$
202

 
$
43

 
$
458

 
$
211

 
 
 
 
 
 
 
 
 
 
 
Pretax Income - Segment Accounting Basis
 
$
270

 
$
232

 
$
154

 
$
502

 
$
327

Net Loss on Repurchases and Repayments of Debt (1)
 
12

 
16

 
35

 
28

 
62

Acquisition-Related Transaction and Integration Expenses (1)
 
8

 
6

 
22

 
14

 
32

Restructuring Charges
 
1

 
3

 

 
4

 

Net Gain on Sale of Cost Method Investment
 

 
(11
)
 

 
(11
)
 
$

Consumer & Insurance Adjusted Pretax Income
 (non-GAAP)
 
$
291

 
$
246

 
$
211

 
$
537

 
$
421

 
 
 
 
 
 
 
 
 
 
 
Pretax Income - Segment Accounting Basis
 
6

 

 

 
6

 
1

Additional Net Gain on Sale of SpringCastle Interests
 
(7
)
 

 

 
(7
)
 

Acquisitions & Servicing Adjusted Pretax Income (Loss) (non-GAAP)
 
$
(1
)
 
$

 
$

 
$
(1
)
 
$
1

 
 
 
 
 
 
 
 
 
 
 
Pretax Loss - Segment Accounting Basis
 
$
(3
)
 
$
(3
)
 
$
(109
)
 
$
(6
)
 
$
(119
)
Net Loss on Sale of Real Estate Loans (2)
 

 
1

 

 
1

 

Non-Cash Incentive Compensation Expense
 

 

 
106

 

 
106

Other Adjusted Pretax Loss (non-GAAP)
 
$
(3
)
 
$
(2
)
 
$
(3
)
 
$
(5
)
 
$
(13
)
 
 
 
 
 
 
 
 
 
 
 
Springleaf Debt Discount Accretion
 
$
(5
)
 
$
(6
)
 
$
(6
)
 
$
(11
)
 
$
(12
)
OMFH LLR Provision Catch-up
 
(4
)
 
(10
)
 
(3
)
 
(14
)
 
(7
)
OMFH Receivable Premium Amortization
 
(4
)
 
(5
)
 
(14
)
 
(9
)
 
(32
)
OMFH Receivable Discount Accretion
 
2

 
3

 
4

 
5

 
15

Other
 
(6
)
 
(9
)
 
17

 
(15
)
 
38

Total Segment to GAAP Adjustment
 
$
(17
)
 
$
(27
)
 
$
(2
)
 
$
(44
)
 
$
2

 
 
 
Note:
Year-to-Date may not sum due to rounding

(1)
Amounts differ from those presented on "Consolidated Statements of Operations (Unaudited)" page as a result of purchase accounting adjustments that are not applicable on a Segment Accounting Basis.
(2)
In the first quarter of 2019, the gain on the sale of the real estate loans sold has been combined with the resulting fair value impairment of the remaining loans in finance receivables held for sale.


10




OneMain Holdings, Inc.
 
 
 
 
 
 
RECONCILIATION OF KEY SEGMENT METRICS (UNAUDITED) (Non-GAAP)
 
 
 
 
 
As of
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
 
 
 
 
 
 
Consumer & Insurance
 
$
17,016

 
$
16,170

 
$
15,406

Acquisition & Servicing
 

 

 

Other (1)
 

 

 
131

Segment to GAAP Adjustment
 
(36
)
 
(34
)
 
(29
)
Net Finance Receivables - GAAP basis
 
$
16,980

 
$
16,136

 
$
15,508

 
 
 
 
 
 
 
Consumer & Insurance
 
$
772

 
$
765

 
$
729

Acquisition & Servicing
 

 

 

Other (1)
 

 

 
30

Segment to GAAP Adjustment
 
(28
)
 
(32
)
 
(57
)
Allowance for Finance Receivable Losses - GAAP basis
 
$
744

 
$
733

 
$
702

 
 
 
 
 
 
 
 
 
(1) On September 30, 2018, the company transferred real estate loans from held for investment to held for sale.


11




OneMain Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
CONSUMER AND INSURANCE SEGMENT (UNAUDITED) (Non-GAAP)
 
 
 
 
 
 
 
 
 
Quarter-to-Date
 
Year-to-Date
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
6/30/2019
 
6/30/2018
 
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
999

 
$
954

 
$
911

 
$
1,953

 
$
1,784

 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
(232
)
 
(229
)
 
(212
)
 
(462
)
 
(406
)
Provision for finance receivable losses
 
(263
)
 
(276
)
 
(261
)
 
(539
)
 
(519
)
Net interest income after provision for finance receivable losses
 
504

 
449

 
438

 
952

 
859

 
 
 
 
 
 
 
 
 
 
 
Insurance
 
114

 
110

 
107

 
224

 
212

Investment
 
24

 
27

 
20

 
50

 
34

Other
 
18

 
14

 
14

 
33

 
27

Total other revenues
 
156

 
151

 
141

 
307

 
273

 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
(319
)
 
(309
)
 
(317
)
 
(627
)
 
(615
)
Insurance policy benefits and claims
 
(50
)
 
(45
)
 
(51
)
 
(95
)
 
(96
)
Total other expenses
 
(369
)
 
(354
)
 
(368
)
 
(722
)
 
(711
)
 
 
 
 
 
 
 
 
 
 
 
Adjusted pretax income (non-GAAP)
 
291

 
246

 
211

 
537

 
421

 
 
 
 
 
 
 
 
 
 
 
Income taxes (1)
 
(70
)
 
(59
)
 
(51
)
 
(129
)
 
(101
)
 
 
 
 
 
 
 
 
 
 
 
Adjusted net income (non-GAAP)
 
$
221

 
$
187

 
$
160

 
$
408

 
$
320

 
 
 
 
 
 
 
 
 
 
 
Weighted average number of diluted shares
 
136.2

 
136.2

 
136.0

 
136.2

 
135.9

C&I adjusted diluted EPS (2)
 
$
1.62

 
$
1.37

 
$
1.18

 
3.00

 
2.36

 
 
Note: Year-to-Date may not sum due to rounding.
(1) Income taxes assume a 24% statutory tax rate.
(2) C&I adjusted diluted EPS is calculated as the C&I adjusted net income (non-GAAP) divided by the weighted average number of diluted shares outstanding.



12




OneMain Holdings, Inc.
 
 
 
 
 
 
CONSUMER AND INSURANCE SEGMENT - KEY FINANCIAL METRICS (UNAUDITED) (Non-GAAP)
 
 
 
 
 
Quarter-to-Date
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-TDR Net Finance Receivables
 
$
16,388

 
$
15,579

 
$
14,899

TDR Net Finance Receivables
 
628

 
591

 
507

Net Finance Receivables (1)
 
$
17,016

 
$
16,170

 
$
15,406

 
 
 
 
 
 
 
Average Net Receivables
 
$
16,573

 
$
16,179

 
$
15,130

Origination Volume
 
3,879

 
2,582

 
3,216

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-TDR Allowance
 
$
518

 
$
539

 
$
524

TDR Allowance
 
254

 
226

 
205

Allowance (1)
 
$
772

 
$
765

 
$
729

 
 
 
 
 
 
 
Non-TDR Allowance Ratio
 
3.2
 %
 
3.5
 %
 
3.5
 %
TDR Allowance Ratio
 
40.4
 %
 
38.4
 %
 
40.4
 %
Allowance Ratio
 
4.5
 %
 
4.7
 %
 
4.7
 %
 
 
 
 
 
 
 
Gross Charge-Off
 
$
294

 
$
316

 
$
285

Recoveries
 
(38
)
 
(32
)
 
(35
)
Net Charge-Off
 
$
256

 
$
284

 
$
250

 
 
 
 
 
 
 
Gross Charge-Off Ratio
 
7.1
 %
 
7.9
 %
 
7.6
 %
Recoveries
 
(0.9
)%
 
(0.8
)%
 
(0.9
)%
Net Charge-Off Ratio
 
6.2
 %
 
7.1
 %
 
6.6
 %
 
 
 
 
 
 
 
30-89 Delinquency
 
$
366

 
$
313

 
$
328

30+ Delinquency
 
659

 
650

 
621

60+ Delinquency
 
438

 
470

 
427

90+ Delinquency
 
293

 
337

 
293

 
 
 
 
 
 
 
30-89 Delinquency Ratio
 
2.1
 %
 
1.9
 %
 
2.1
 %
30+ Delinquency Ratio
 
3.9
 %
 
4.0
 %
 
4.0
 %
60+ Delinquency Ratio
 
2.6
 %
 
2.9
 %
 
2.8
 %
90+ Delinquency Ratio
 
1.7
 %
 
2.1
 %
 
1.9
 %
 
 
 
 
 
 
 
 
 
Note: Consumer & Insurance financial information is presented on an adjusted Segment Accounting Basis. Delinquency ratios are calculated as a percentage of net finance receivables. All other ratios are shown as a percentage of C&I average net finance receivables. Ratios may not sum due to rounding.
(1) For reconciliation to GAAP, see "Reconciliation of Key Segment Metrics (Unaudited) (Non-GAAP)".

13




OneMain Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
CONSUMER & INSURANCE SEGMENT METRICS (UNAUDITED) (Non-GAAP)
 
 
 
 
 
 
 
 
 
Quarter-to-Date
 
Year-to-Date
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
6/30/2019
 
6/30/2018
 
 
 
 
 
 
 
 
 
 
 
Revenue (1)
 
26.8
 %
 
26.6
 %
 
26.4
 %
 
26.7
 %
 
26.2
 %
Net Charge-Off
 
(6.2
)%
 
(7.1
)%
 
(6.6
)%
 
(6.7
)%
 
(6.9
)%
Risk Adjusted Margin
 
20.6
 %
 
19.5
 %
 
19.8
 %
 
20.0
 %
 
19.3
 %
Operating Expenses
 
(7.7
)%
 
(7.7
)%
 
(8.4
)%
 
(7.7
)%
 
(8.2
)%
Unlevered Return on Receivables
 
12.8
 %
 
11.7
 %
 
11.4
 %
 
12.3
 %
 
11.1
 %
Interest Expense
 
(5.6
)%
 
(5.7
)%
 
(5.6
)%
 
(5.7
)%
 
(5.4
)%
Change in Allowance
 
(0.2
)%
 
0.2
 %
 
(0.3
)%
 
 %
 
(0.1
)%
Income Tax Expense (2)
 
(1.7
)%
 
(1.5
)%
 
(1.3
)%
 
(1.6
)%
 
(1.3
)%
Return on Receivables
 
5.4
 %
 
4.7
 %
 
4.2
 %
 
5.0
 %
 
4.3
 %
 
 
Note: Consumer & Insurance financial information is presented on an adjusted Segment Accounting Basis. All ratios are shown as a percentage of C&I average net finance receivables. Ratios may not sum due to rounding.
 
(1) Revenue includes interest income on finance receivables plus other revenues less insurance policy benefits and claims.
(2) Income taxes assume a 24% statutory tax rate.



14




OneMain Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 ACQUISITIONS AND SERVICING SEGMENT (UNAUDITED) (Non-GAAP)
 
 
 
 
 
 
 
 
 
Quarter-to-Date
 
Year-to-Date
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
6/30/2019
 
6/30/2018
 
 
 
 
 
 
 
 
 
 
 
Total Other Revenues (1)
 
$
5

 
$
7

 
$
8

 
12

 
17

Total Other Expenses
 
(6
)
 
(7
)
 
(8
)
 
(13
)
 
(16
)
Adjusted pretax income (loss) (non-GAAP)
 
$
(1
)
 
$

 
$

 
$
(1
)
 
$
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note:
Acquisitions & Servicing financial information is presented on an adjusted Segment Accounting Basis. Year-to-Date may not sum due to rounding.
 
 
 
(1) Total other revenues consist of portfolio servicing fees from SpringCastle.

15




OneMain Holdings, Inc.
 
 
 
 
OTHER (UNAUDITED) (Non-GAAP)
 
 
 
 
 
 
Quarter-to-Date
 
Year-to-Date
 
 
 
 
 
 
 
 
 
 
 
(unaudited, $ in millions)
 
6/30/2019
 
3/31/2019
 
6/30/2018
 
6/30/2019
 
6/30/2018
 
 
 
 
 
 
 
 
 
 
 
Interest Income:
 
 
 
 
 
 
 
 
 
 
Finance Charges
 
$

 
$

 
$
3

 
$

 
$
5

Finance Receivables Held for Sale
 
2

 
3

 
2

 
5

 
4

Total Interest Income
 
2

 
3

 
5

 
5

 
9

 
 
 
 
 
 
 
 
 
 
 
Interest Expense
 
(1
)
 
(2
)
 
(5
)
 
(3
)
 
(9
)
Provision for Finance Receivable Losses
 

 

 
3

 

 
5

Net Interest Income after Provision for Finance Receivable Losses
 
1

 
1

 
3

 
2

 
5

 
 
 
 
 
 
 
 
 
 
 
Total Other Revenues
 

 
2

 

 
3

 
(2
)
 
 
 
 
 
 
 
 
 
 
 
Total Other Expenses
 
(4
)
 
(5
)
 
(6
)
 
(10
)
 
(16
)
 
 
 
 
 
 
 
 
 
 
 
Adjusted Pretax Loss (non-GAAP)
 
$
(3
)
 
$
(2
)
 
$
(3
)
 
$
(5
)
 
$
(13
)
 
 
 
 
 
 
 
 
 
 
 
Net Finance Receivables Held for Investment (1)
 
$

 
$

 
$
131

 
$

 
$
131

 
 
 
 
 
 
 
 
 
 
 
Net Finance Receivables Held for Sale (1)
 
$
75

 
$
79

 
$
130

 
$
75

 
$
130

 
 
 
Note:
Other financial information is presented on an adjusted Segment Accounting Basis. Year-to-Date may not sum due to rounding.
 
 
(1
)
On September 30, 2018, the company transferred Other Receivables from held for investment to held for sale.


16






OneMain Holdings, Inc.

Investor Contact:
Kathryn Miller, 475-619-8821
[email protected]

Source: OneMain Holdings, Inc.


17

(Back To Top)