Actionable news
0
All posts from Actionable news
Actionable news in LEAF: SPRINGLEAF HOLDINGS Inc,

Springleaf Holdings: Springleaf Reports Third Quarter 2015 Results

The following excerpt is from the company's SEC filing.

Springleaf Holdings, Inc. (NYSE: LEAF) today reported a GAAP basis net loss of $11 million, or $0.08 per diluted share for the third quarter of 2015, compared with net income of $427 million or $3.70 per diluted share in the third quarter of 2014, which included a pretax gain of $641 million on the sale of real estate assets.

Core earnings (a non-GAAP measure) in consumer operations for the quarter were $66 million, a 3% increase from $64 million in the prior year quarter, and core earnings per diluted share (a non-GAAP measure) were $0.50 for the third quarter ver sus $0.55 in the prior year quarter.

Weighted average diluted shares outstanding increased to 134.5 million for the third quarter of 2015 from 115.3 million for the prior year quarter as a result of the company’s issuance of 19.4 million common shares on May 4, 2015.

Third Quarter Highlights

Consumer net finance receivables reached $4.7 billion at September 30, 2015, an increase of $1.1 billion, or 30% from September 30, 2014, and up 9% from June 30, 2015. The $4.7 billion at September 30, 2015 included $825 million of direct auto loan receivables.

Consumer net finance receivables per branch were $5.7 million

at September 30, 2015, up 31% from $4.3 million at September 30, 2014, and up 9% from $5.2 million at June 30, 2015.

Yield for our Consumer segment in the quarter was 25.97%, down 105 basis points from the third quarter of 2014. Risk-adjusted yield, representing yield less net charge-off rate, for our Consumer segment in the quarter was 21.67%, down 67 basis points from the third quarter of 2014.

The company originated $1.2 billion of total consumer loans in the third quarter of 2015, including $278 million of direct auto loan originations, up $194 million from the third quarter of 2014.

Jay Levine, President and CEO of Springleaf said, “Our results this quarter continue to demonstrate our ability to generate significant growth in total receivables and receivables per branch, both of which were up over 30% from last year’s quarter. Growing receivables per branch continues to be a key strategy for us because of the positive operating leverage provided by our largely fixed cost branch network. Consumer receivables per branch reached $5.7 million

, up from $4.3 million one year ago and from $5.2 million at June 30, 2015, reflecting our continued success with direct auto lending. Also contributing to our strong performance this quarter was the meaningful improvement in our net charge-off ratio from last year’s third quarter and the second quarter of this year.”

1 Excludes the impact of charges related to fair value adjustments on debt and earnings attributable to non-controlling interests.

2 Core Earnings income taxes assume 37% statutory tax rate.

3 3Q 2015 includes finance receivables held for sale.

Core Consumer Operations: (Reported on a historical accounting basis, which is a non-GAAP measure. Refer to the reconciliation of non-GAAP to comparable GAAP measures on page 10.)

Consumer and Insurance

Consumer and Insurance pretax income was $77 million in the third quarter of 2015, up 22% from $63 million in the third quarter of 2014, versus $76 million in the second quarter of 2015.

Consumer net finance receivables reached $4.7 billion at September 30, 2015, an increase of 30% from September 30, 2014 and up 9% from June 30, 2015, driven by improved targeting and scoring algorithms which enhanced the quality of new customer leads, incremental internet customer acquisition, and continued strong growth in direct auto lending.

Driven by these same factors, Consumer net finance receivables per branch continued to grow, reaching $5.7 million at September 30, 2015, up from $4.3 million at September 30, 2014 and $5.2 million at June 30, 2015.

Net interest income was $250 million in the quarter, up 28% from the prior year quarter and 7% from the prior quarter. Yield in the current quarter was 25.97%, down 105 basis points from the prior year quarter, and 53 basis points from the second quarter of 2015, reflecting the impact of the successful roll-out of the company’s direct-to-consumer auto loan product. Risk adjusted yield was 21.67% in the third quarter of 2015, down 67 basis points from the third quarter of 2014 as the decline in yield more than offset the year-over-year improvement in net charge-offs. Risk adjusted yield grew 3 basis points from the second quarter of 2015.

The annualized net charge-off ratio was 4.30% in the third quarter of 2015, versus 4.68%

in the prior year quarter and 4.86% in the prior quarter.

The annualized gross charge-off ratio was 5.19% in the third quarter of 2015, down 27 basis points from the prior year quarter, and down 65 basis points from the second quarter of 2015. Recovery ratio was 89 basis points in the quarter, versus 78 basis points in the prior year quarter and 98 basis points in the second quarter of 2015.

The 60+ delinquency ratio was 2.90% at quarter end, versus 2.55% at prior year quarter end and 2.39% at prior quarter end.

Acquisitions and Servicing

The Acquisitions and Servicing segment contributed $28 million to the company’s consolidated pretax income in the quarter. The entire Acquisitions and Servicing segment, which includes non-controlling interests, generated pretax income of $59 million in the quarter

, with net interest income of $92 million and a yield of 26.50%. Net finance receivables at quarter-end were $1.7 billion, down from $2.1 billion at September 30, 2014, and down from $1.8 billion at June 30, 2015. The principal balance of the

4 Consumer and Insurance segment reflects historical accounting basis (which is a basis of accounting other than U.S. GAAP).

5 3Q15 includes finance receivables held for sale.

6 Delinquency ratio includes loans held for sale.

7 Includes the impact of earnings attributable to non-controlling interests.

portfolio was $2.2 billion at quarter-end versus $2.7 billion at September 30, 2014 and $2.3 billion at June 30, 2015.

The annualized net charge-off ratio improved to 4.39% in the quarter, versus 5.31%

in the prior year quarter and 5.07% in the prior quarter.

The annualized gross charge-off ratio was 5.05% in the quarter, down 78 basis points from the prior year quarter and down 70 basis points from the second quarter 2015. Recoveries continued to improve in the quarter at 66 basis points versus 52 basis points in the prior year quarter.

The 60+ delinquency ratio for the Acquisitions and Servicing segment was 4.06% at the end of the quarter, a decrease of 105 basis points from the prior year quarter end, and up 31 basis points from the prior quarter end.

Non-Core Portfolio: (Reported on a historical accounting basis, which is a non-GAAP measure.)

Legacy Real...


More