Springleaf Holdings, Inc. (NYSE:LEAF), a leading consumer finance
company, today reported a net loss for the third quarter ended September
30, 2013 of $91 million, or $0.91 per diluted share (based on the
pre-initial public offering share count of 100 million shares), versus a
net loss of $45 million, or $0.45 per diluted share for the third
quarter ended September 30, 2012. The loss in the current quarter
included $166 million (pre-tax) of one-time charges related to the early
retirement of debt and to non-cash compensation expenses associated with
the company’s initial public offering. Core Net Income (a non-GAAP
measure) for the third quarter was $48 million, versus $21 million in
the prior year quarter, and Core Earnings Per Diluted Share (a non-GAAP
measure) was $0.48 for the third quarter versus $0.21 in the prior year
quarter.
Third Quarter Highlights
-
Branch consumer net finance receivables reached $3.0 billion as of
September 30, 2013, an increase of $480.9 million, or 19%, from
September 30, 2012, and up 6% from June 30, 2013.
-
Receivables per branch were $3.6 million as of September 30, 2013, up
18% from September 30, 2012, and 6% from June 30, 2013.
-
Branch consumer finance portfolio yield in the quarter was 25.92%, an
increase of 171 basis points from the prior year quarter and 35 basis
points from the prior quarter.
-
Overall weighted average cost of funds (historical basis) in the
quarter was 5.32%, a 69 basis point improvement from the prior year
quarter and 14 basis points from the prior quarter, as the company
enhanced its funding profile and debt maturities.
-
Acquired the London, KY personal loan servicing center and on-boarded
servicing for approx. 400,000 SpringCastle portfolio accounts.
Jay Levine, president and CEO of Springleaf said, “Springleaf’s core
consumer operations generated solid profits in the quarter, driven by
strong organic growth in branch consumer receivables and expansion in
risk adjusted yield, both reflecting the strength of the Springleaf
franchise. The SpringCastle portfolio, which we purchased earlier in the
year from HSBC, added to our earnings in the quarter, and in September
we successfully on-boarded the servicing of over 400,000 loans in the
SpringCastle portfolio, which will add a meaningful level of fee-based
revenue going forward.”
Levine added, “We continue to place great emphasis on our funding
profile, and we’re very pleased with the successful execution on recent
capital markets activity, which has driven our funding costs lower. We
believe Springleaf is well-positioned to continue to achieve profitable
growth in our consumer finance business and to take advantage of
portfolio acquisition opportunities over time, both of which we expect
will drive long-term value for our shareholders.”
Core Operating Results: (Reported on a historical accounting basis,
which is a non-GAAP measure. Refer to the reconciliation of
non-GAAP to comparable GAAP measures, below.)
Branch Operations
Consumer and Insurance pre-tax income of $42 million in the quarter was
up $5 million, or 14%, from the prior year quarter, but down from $78
million from the prior quarter, primarily from a gain on sale of charged
off accounts in June 2013.
Net finance receivables reached $3.0 billion at September 30, 2013, an
increase of 19% from September 30, 2012 and 6% from June 30, 2013,
driven by the company’s heightened focus on increasing personal loan
originations through its branch network.
Net interest income for the quarter of $150 million increased 32% from
the prior year quarter, driven by 18% growth in average net finance
receivables and yield expansion of 171 basis points to 25.92% in the
current quarter. Net interest income increased 12% as compared to the
prior quarter. Yield benefited from the change in the state-by-state mix
of loan originations, in addition to greater focus on risk-based pricing.
Other revenue, including investment income earned by our insurance
companies, was $47 million, up 11% from the prior year quarter, due to
increased origination volumes. Other revenue was down modestly from the
prior quarter principally due to a decline in investment income as a
result of dividends paid to the parent company.
Operating expenses were $100 million in the quarter, up $14 million, or
16%, from the prior year quarter, reflecting a $14.5 million reversal of
legal accruals in the prior year’s quarter as the company achieved a
favorable resolution of a long-standing legal action. Segment operating
expenses were up modestly from the prior quarter.
The delinquency ratio was 2.32% at September 30, 2013, a decrease of 43
basis points from September 30, 2012, and an increase of 40 basis points
from June 30, 2013. The annualized net charge-off ratio was 4.03% in the
quarter, an increase of 115 basis points from the prior year quarter and
86 basis points from the prior quarter. The net charge-off ratio in the
quarter was adversely affected by lower recoveries as the company sold a
significant portion of previously charged-off accounts in June 2013.
Acquisitions and Servicing (Results reflect the acquisition of the
$3.9 billion SpringCastle portfolio in April 2013, and the initiation of
servicing activities in September 2013.)
After elimination of earnings attributable to the non-controlling
interests, our portion of the SpringCastle portfolio and related
servicing contributed $28 million to our consolidated pretax income in
the quarter.
Our Acquisitions and Servicing segment generated pre-tax income of $58
million in the quarter, with net interest income of $141 million driven
by average receivables of $2.7 billion and yield of 23.78%. Actual net
finance receivables at September 30, 2013 were also $2.7 billion, down
from $2.8 billion at June 30, 2013. Unpaid principal balance of the
portfolio was $3.5 billion at September 30, 2013 versus $3.6 billion at
June 30 2013.
The delinquency ratio for the SpringCastle portfolio was 7.45% at
September 30, 2013 while the annualized net charge-off ratio was 8.59%
for the quarter.
Legacy Real Estate and Other Non-Core
The Legacy Real Estate and Other Non-Core activities generated a pretax
loss of $179 million in the quarter. Of the $179 million, $44 million
was attributable to the legacy real estate portfolio and $135 million to
the other non-core portfolio, which includes $131 million of non-cash
compensation expenses associated with our IPO.
Net finance receivables in the Legacy Real Estate portfolio were $9.6
billion at September 30, 2013, a reduction of $1.2 billion from
September 30, 2012 and $307 million from June 30, 2013, reflecting
continued liquidation of the portfolio.
The delinquency ratio of the Legacy Real Estate Portfolio was 7.74% at
September 30, 2013, an increase of 9 basis points from September 30,
2012, and up 27 basis points from June 30, 2013, while the loss ratio of
2.07% in the quarter improved 29 basis points from the prior year
quarter and 26 basis points from the prior quarter.
Net finance receivables in the Other Non-Core component were $198
million at September 30, 2013, a reduction of $207 million from $405
million at September 30, 2012 and a reduction of $46 million from June
30, 2013.
Total other revenues for the Legacy Real Estate Portfolio declined by
$13 million from the prior year quarter with favorable variances in
write-downs and gain (loss) on sales of real estate owned more than
offset by a higher net loss on debt repurchase/repayment activity.
Segment operating expenses of $22 million for the Legacy Real Estate
Portfolio were essentially unchanged from the prior year quarter and the
prior quarter.
Liquidity and Capital Resources
As of September 30, 2013, the company had $1.2 billion of cash and cash
equivalents, in addition to $650 million available undrawn revolving
loan capacity. The company had total outstanding debt of $14.0 billion
at September 30, 2013, in a variety of debt instruments principally
including $5.2 billion unsecured debt, $4.0 billion in mortgage
securitizations, $3.6 billion in consumer loan securitizations and $1.3
billion of secured term loan.
Conference Call Information
Springleaf management will host a conference call and webcast to discuss
the third quarter results and other general matters at 10:00 am Eastern
on Tuesday, November 12, 2013. Both the call and webcast are open to the
general public.
An investor presentation will be available by visiting the Investor
Relations page of Springleaf’s website at http://investor.springleaffinancial.com
on Tuesday, November 12, 2013, prior to the start of the conference call.
The dial-in number for the call is 877-330-3668 (domestic) or
678-304-6859 (international), and the conference ID for either is
91078837. The call can also be accessed via a live audio webcast
available on Springleaf’s website at http://investor.springleaffinancial.com.
A replay of the call will be available approximately two hours after the
end of the call through November 26, 2013, and can be accessed through
our website or by dialing 800-585-8367 (domestic) or 404-537-3406
(international), using conference ID 91078837.
Forward-Looking Statements
This press release contains “forward‐looking statements” within the
meaning of the U.S. federal securities laws. Forward‐looking statements
include, without limitation, statements concerning plans, objectives,
goals, projections, strategies, future events or performance, and
underlying assumptions and other statements, which are not statements of
historical facts. Statements preceded by, followed by or that otherwise
include the words “anticipate,” “appears,” “believe,” “foresee,”
“intend,” “should,” “expect,” “estimate,” “project,” “plan,” “may,”
“could,” “will,” “are likely” and similar expressions are intended to
identify forward‐looking statements. These statements involve
predictions of our future financial condition, performance, plans and
strategies, and are thus dependent on a number of factors including,
without limitation, assumptions and data that may be imprecise or
incorrect. Specific factors that may impact performance or other
predictions of future actions include, but are not limited to: changes
in general economic conditions, including the interest rate environment
and the financial markets; levels of unemployment and personal
bankruptcies; shifts in residential real estate values; shifts in
collateral values, delinquencies, or credit losses; natural or
accidental events such as earthquakes, hurricanes, tornadoes, fires, or
floods; war, acts of terrorism, riots, civil disruption, pandemics, or
other events disrupting business or commerce; our ability to
successfully realize the benefits of the SpringCastle Portfolio; the
effectiveness of our credit risk scoring models; changes in our ability
to attract and retain employees or key executives; changes in the
competitive environment in which we operate; changes in federal, state
and local laws, regulations, or regulatory policies and practices;
potential liability relating to real estate and personal loans which we
have sold or may sell in the future, or relating to securitized loans;
the costs and effects of any litigation or governmental inquiries or
investigations; our continued ability to access the capital markets or
the sufficiency of our current sources of funds to satisfy our cash flow
requirements; our ability to generate sufficient cash to service all of
our indebtedness; the potential for downgrade of our debt by rating
agencies; and other risks described in the “Risk Factors” section of the
company’s final prospectus filed with the SEC on October 17, 2013.
Forward‐looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the company to be materially different
from any future results, performance or achievements expressed 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 they were made. We do not undertake any obligation to publicly
release any revisions to these forward‐looking statements to reflect
events or circumstances after the date of this presentation or to
reflect the occurrence of unanticipated events. You should not rely
on forward looking statements as the sole basis upon which to make any
investment decision.
About Springleaf Holdings, Inc.
Springleaf is a leading consumer finance company providing responsible
loan products to customers through its nationwide branch network and
through iLoan, its internet lending division. The company has a nearly
100-year track record of high quality origination, underwriting and
servicing of personal loans, primarily to nonprime consumers. The
company operates one of the largest consumer finance branch networks in
the United States, serving its customers through 834 branches in 26
states. For more information, visit www.springleaffinancial.com/about-us.
|
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
Nine Months
|
|
|
Nine Months
|
(dollars in thousands
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
except earnings (loss)
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
per share)
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance charges
|
|
$
|
585,300
|
|
|
|
$
|
423,622
|
|
|
|
$
|
1,578,934
|
|
|
|
$
|
1,285,541
|
|
Finance receivables held for sale originated as
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
held for investment
|
|
|
-
|
|
|
|
|
346
|
|
|
|
|
-
|
|
|
|
|
2,740
|
|
Total interest income
|
|
|
585,300
|
|
|
|
|
423,968
|
|
|
|
|
1,578,934
|
|
|
|
|
1,288,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
228,439
|
|
|
|
|
268,847
|
|
|
|
|
697,365
|
|
|
|
|
829,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
356,861
|
|
|
|
|
155,121
|
|
|
|
|
881,569
|
|
|
|
|
459,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for finance receivable losses
|
|
|
158,785
|
|
|
|
|
90,855
|
|
|
|
|
341,723
|
|
|
|
|
227,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
finance receivable losses
|
|
|
198,076
|
|
|
|
|
64,266
|
|
|
|
|
539,846
|
|
|
|
|
231,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
|
|
|
38,277
|
|
|
|
|
31,719
|
|
|
|
|
107,144
|
|
|
|
|
93,042
|
|
Investment
|
|
|
6,756
|
|
|
|
|
7,377
|
|
|
|
|
27,687
|
|
|
|
|
25,544
|
|
Net loss on repurchases and repayments of debt
|
|
|
(34,503
|
)
|
|
|
|
(10,670
|
)
|
|
|
|
(34,558
|
)
|
|
|
|
(12,163
|
)
|
Other
|
|
|
1,603
|
|
|
|
|
(2,709
|
)
|
|
|
|
6,986
|
|
|
|
|
(32,814
|
)
|
Total other revenues
|
|
|
12,133
|
|
|
|
|
25,717
|
|
|
|
|
107,259
|
|
|
|
|
73,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
|
|
|
214,552
|
|
|
|
|
78,122
|
|
|
|
|
371,842
|
|
|
|
|
241,114
|
|
Other operating expenses
|
|
|
69,595
|
|
|
|
|
65,491
|
|
|
|
|
191,574
|
|
|
|
|
208,326
|
|
Restructuring expenses
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
23,503
|
|
Insurance losses and loss adjustment expenses
|
|
|
16,550
|
|
|
|
|
15,152
|
|
|
|
|
47,650
|
|
|
|
|
42,302
|
|
Total other expenses
|
|
|
300,697
|
|
|
|
|
158,765
|
|
|
|
|
611,066
|
|
|
|
|
515,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before provision for (benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from) income taxes
|
|
|
(90,488
|
)
|
|
|
|
(68,782
|
)
|
|
|
|
36,039
|
|
|
|
|
(210,269
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit from income taxes
|
|
|
(29,606
|
)
|
|
|
|
(23,938
|
)
|
|
|
|
(1,898
|
)
|
|
|
|
(72,419
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(60,882
|
)
|
|
|
|
(44,844
|
)
|
|
|
|
37,937
|
|
|
|
|
(137,850
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income attributable to non-controlling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interests
|
|
|
29,851
|
|
|
|
|
-
|
|
|
|
|
83,799
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Springleaf
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holdings, Inc.
|
|
$
|
(90,733
|
)
|
|
|
$
|
(44,844
|
)
|
|
|
$
|
(45,862
|
)
|
|
|
$
|
(137,850
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
100,000,000
|
|
|
|
|
100,000,000
|
|
|
|
|
100,000,000
|
|
|
|
|
100,000,000
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
(0.91
|
)
|
|
|
$
|
(0.45
|
)
|
|
|
$
|
(0.46
|
)
|
|
|
$
|
(1.38
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
(dollars in thousands)
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
1,249,636
|
|
|
|
$
|
1,554,348
|
|
Investment securities
|
|
|
|
|
594,471
|
|
|
|
|
888,577
|
|
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
Personal loans (includes loans of consolidated
|
|
|
|
|
|
|
|
|
|
VIEs of $1.7 billion in 2013 and $0 in 2012)
|
|
|
|
|
3,027,255
|
|
|
|
|
2,649,732
|
|
SpringCastle Portfolio (includes loans of consolidated
|
|
|
|
|
|
|
|
|
|
VIEs of $2.7 billion in 2013 and $0 in 2012)
|
|
|
|
|
2,653,632
|
|
|
|
|
-
|
|
Real estate loans (includes loans of consolidated
|
|
|
|
|
|
|
|
|
|
VIEs of $5.5 billion in 2013 and $4.1 billion in 2012)
|
|
|
|
|
8,212,855
|
|
|
|
|
8,955,365
|
|
Retail sales finance
|
|
|
|
|
117,888
|
|
|
|
|
208,357
|
|
Net finance receivables
|
|
|
|
|
14,011,630
|
|
|
|
|
11,813,454
|
|
Allowance for finance receivable losses (includes allowance of
|
|
|
|
|
|
|
|
|
|
consolidated VIEs of $89.6 million in 2013 and $14.5 million in 2012)
|
|
|
|
|
(281,347
|
)
|
|
|
|
(180,088
|
)
|
Net finance receivables, less allowance for finance
|
|
|
|
|
|
|
|
|
|
receivable losses
|
|
|
|
|
13,730,283
|
|
|
|
|
11,633,366
|
|
Restricted cash (includes restricted cash of consolidated VIEs of
|
|
|
|
|
|
|
|
|
|
$415.8 million in 2013 and $109.0 million in 2012)
|
|
|
|
|
430,806
|
|
|
|
|
157,844
|
|
Other assets
|
|
|
|
|
422,167
|
|
|
|
|
439,380
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
$
|
16,427,363
|
|
|
|
$
|
14,673,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt (includes debt of consolidated VIEs
|
|
|
|
|
|
|
|
|
|
of $7.6 billion in 2013 and $3.1 billion in 2012)
|
|
|
|
$
|
13,998,961
|
|
|
|
$
|
12,596,577
|
|
Insurance claims and policyholder liabilities
|
|
|
|
|
380,155
|
|
|
|
|
365,238
|
|
Deferred and accrued taxes
|
|
|
|
|
178,442
|
|
|
|
|
283,762
|
|
Other liabilities
|
|
|
|
|
275,969
|
|
|
|
|
227,811
|
|
Total liabilities
|
|
|
|
|
14,833,527
|
|
|
|
|
13,473,388
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
1,000
|
|
|
|
|
1,000
|
|
Additional paid-in capital
|
|
|
|
|
278,704
|
|
|
|
|
147,454
|
|
Accumulated other comprehensive income
|
|
|
|
|
21,145
|
|
|
|
|
30,188
|
|
Retained earnings
|
|
|
|
|
975,623
|
|
|
|
|
1,021,485
|
|
Springleaf Holdings, Inc. shareholders’ equity
|
|
|
|
|
1,276,472
|
|
|
|
|
1,200,127
|
|
Non-controlling interests
|
|
|
|
|
317,364
|
|
|
|
|
-
|
|
Total shareholders' equity
|
|
|
|
|
1,593,836
|
|
|
|
|
1,200,127
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
|
|
|
$
|
16,427,363
|
|
|
|
$
|
14,673,515
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSUMER KEY METRICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the
|
|
|
At or for the
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
Nine Months
|
|
|
Nine Months
|
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
(dollars in thousands)
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net finance receivables
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,968,211
|
|
|
|
$
|
2,487,359
|
|
|
Number of accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
797,406
|
|
|
|
|
713,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average net receivables
|
|
|
|
$
|
2,897,354
|
|
|
|
$
|
2,459,406
|
|
|
|
$
|
2,705,438
|
|
|
|
$
|
2,397,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield
|
|
|
|
|
25.92
|
|
%
|
|
|
24.21
|
|
%
|
|
|
25.65
|
|
%
|
|
|
23.91
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross charge-off ratio (a)
|
|
|
|
|
4.29
|
|
%
|
|
|
4.07
|
|
%
|
|
|
5.06
|
|
%
|
|
|
4.28
|
|
%
|
Recovery ratio (b)
|
|
|
|
|
(0.26
|
)
|
%
|
|
|
(1.19
|
)
|
%
|
|
|
(2.16
|
)
|
%
|
|
|
(1.26
|
)
|
%
|
Charge-off ratio (a) (b)
|
|
|
|
|
4.03
|
|
%
|
|
|
2.88
|
|
%
|
|
|
2.90
|
|
%
|
|
|
3.02
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delinquency ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
2.32
|
|
%
|
|
|
2.75
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination volume
|
|
|
|
$
|
767,097
|
|
|
|
$
|
592,289
|
|
|
|
$
|
2,326,961
|
|
|
|
$
|
1,732,523
|
|
|
Number of accounts
|
|
|
|
|
192,225
|
|
|
|
|
159,189
|
|
|
|
|
563,531
|
|
|
|
|
451,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________________
|
(a)
|
|
|
The gross charge-off ratio and charge-off ratio for the nine months
ended September 30, 2013 reflect $14.5 million of additional
charge-offs recorded in March 2013 (on a historical accounting
basis) related to our change in charge-off policy for personal loans
effective March 31, 2013. Excluding these additional charge-offs,
our Consumer gross charge-off ratio would have been 4.34% for the
nine months ended September 30, 2013.
|
|
|
|
|
(b)
|
|
|
The charge-off ratio for the nine months ended September 30, 2013
reflects $25.4 million of recoveries on charged-off personal loans
resulting from a sale of our charged-off finance receivables in June
2013. Excluding these recoveries, our Consumer net charge-off ratio
would have been 4.17% for the nine months ended September 30, 2013.
Excluding the impacts of the $14.5 million of additional charge-offs
and the $25.4 million of recoveries on charged-off personal loans,
our Consumer net charge-off ratio would have been 3.44% for the nine
months ended September 30, 2013.
|
|
|
|
|
|
RECONCILIATION OF PGAAP AND HISTORICAL
NET INCOME / (LOSS) (Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
Nine Months
|
|
|
Nine Months
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
(dollars in thousands)
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(benefit from) income taxes - push-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
down accounting basis
|
|
|
|
$
|
(90,488
|
)
|
|
|
$
|
(68,782
|
)
|
|
|
$
|
36,039
|
|
|
|
$
|
(210,269
|
)
|
Interest income adjustments
|
|
|
|
|
(52,121
|
)
|
|
|
|
(51,305
|
)
|
|
|
|
(155,653
|
)
|
|
|
|
(145,895
|
)
|
Interest expense adjustments
|
|
|
|
|
33,218
|
|
|
|
|
58,601
|
|
|
|
|
103,405
|
|
|
|
|
183,839
|
|
Provision for finance receivable losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustments
|
|
|
|
|
14,130
|
|
|
|
|
178,676
|
|
|
|
|
21,380
|
|
|
|
|
200,699
|
|
Repurchases and repayments of long-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
debt adjustments
|
|
|
|
|
13,731
|
|
|
|
|
22,245
|
|
|
|
|
(7,585
|
)
|
|
|
|
33,212
|
|
Amortization of other intangible assets
|
|
|
|
|
1,228
|
|
|
|
|
6,489
|
|
|
|
|
3,946
|
|
|
|
|
12,044
|
|
Other
|
|
|
|
|
1,048
|
|
|
|
|
(7,709
|
)
|
|
|
|
3,514
|
|
|
|
|
(8,678
|
)
|
Income (loss) before provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(benefit from) income taxes - historical
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accounting basis
|
|
|
|
$
|
(79,254
|
)
|
|
|
$
|
138,215
|
|
|
|
$
|
5,046
|
|
|
|
$
|
64,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRE-TAX CORE EARNINGS (Non-GAAP)
RECONCILIATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
Nine Months
|
|
|
Nine Months
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
(dollars in thousands)
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(benefit from) income taxes - historical
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accounting basis
|
|
|
|
$
|
(79,254
|
)
|
|
|
$
|
138,215
|
|
|
|
$
|
5,046
|
|
|
|
$
|
64,952
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax operating (income) loss - Non-Core
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Operations
|
|
|
|
|
44,405
|
|
|
|
|
(115,583
|
)
|
|
|
|
182,165
|
|
|
|
|
(25,545
|
)
|
Pretax operating loss - Other/non-originating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
legacy operations
|
|
|
|
|
134,713
|
|
|
|
|
14,258
|
|
|
|
|
129,847
|
|
|
|
|
23,421
|
|
Restructuring expenses - Core Consumer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
15,863
|
|
(Gain) loss from accelerated repayment/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
repurchase of debt - Consumer
|
|
|
|
|
2,890
|
|
|
|
|
(3,228
|
)
|
|
|
|
4,390
|
|
|
|
|
(5,870
|
)
|
Pretax operating income attributable to non-controlling interests
|
|
|
|
|
(29,851
|
)
|
|
|
|
|
|
|
|
(83,799
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax core earnings
|
|
|
|
|
72,903
|
|
|
|
|
33,662
|
|
|
|
|
237,649
|
|
|
|
|
72,821
|
|
Estimated income taxes
|
|
|
|
|
24,641
|
|
|
|
|
13,027
|
|
|
|
|
84,841
|
|
|
|
|
21,992
|
|
Post tax core earnings
|
|
|
|
$
|
48,262
|
|
|
|
$
|
20,635
|
|
|
|
$
|
152,808
|
|
|
|
$
|
50,829
|
|
Copyright Business Wire 2013