Springleaf soars; sale of legacy assets nears completion; boosts servicing outlook

|By:, SA News Editor

Q2 core earnings per share of $0.52 vs. $0.79 a year ago (which included a $25M pretax gain from the sale of previously charged-off receivables).

Springleaf (LEAF +13.8%) completes the disposal of legacy mortgage assets, and the deals are expected to generate a gain on sale of about $575M-$625M. Cash proceeds are expected to be about $3B and the sales should close before the end of Q3.

Consumer & Insurance pretax income of $60M vs. $79M a year ago. Net finance receivables of $3.4B up 20% Y/Y and 7% from Q1. Annualized gross charge-off ratio of 5.8% up 144 bps.

Acquisitions & Servicing pretax income of $64M, with net interest income of $119M and a yield of 24.22%. Net finance receivables of $2.2B down from $2.3B at end of Q1. Delinquency ratio of 5.04% down 129 basis points from Q1. Annualized net charge-off ratio of 7.07% down 160 bps.

Full-year Acquisitions & Servicing pretax income guidance is lifted to $100M-$120M from $95M-$115M.

Previously: Springleaf Holdings beats by $0.07, beats on revenue