Springleaf Turns To Profit In Q1

(RTTNews) - Springleaf Holdings, Inc. (LEAF), a provider of consumer finance and credit insurance products, on Wednesday reported a turnaround to profit in the first quarter.

The results were helped by a gain on sale of the sale of real estate loans and on higher revenues. Looking ahead, the company maintained its outlook for consumer net finance receivables at the end of fiscal 2014.

Jay Levine, President and CEO of Springleaf said, "Springleaf's results during the first quarter reflect the strength of the Core Consumer Operations and the success of our strategic initiatives. Our branches performed well in what is traditionally our slowest origination quarter and our SpringCastle Portfolio contributed nicely on the back of strong credit performance."

Net income attributable to Evansville, Indiana-based Springleaf for the first quarter was $52.32 million or $0.45 per share, compared to net loss of $9.61 million or $0.10 per share in the prior-year period.

The latest quarter's results include a pretax net gain of $55 million from the sale of $1 billion of real estate unpaid principal balance from the company's non-core portfolio in March 2014.

On March 31, 2014, Springleaf sold to three different parties a total of $1 billion of real estate loans serviced by PennyMac. The sales generated proceeds of about $816 million, earning a pretax net gain of about $55 million.

On an adjusted basis, core earnings for the company's core consumer operations for the latest quarter was $50 million or $0.43 per share, compared to $25 million or $0.25 per share in the prior-year quarter. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.43 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net interest income for the quarter surged 91 percent to $347.22 million from $181.75 million in the year-ago period, while total other revenues grew 86 percent to $81.40 million from $43.66 million last year. Analysts had a consensus revenue estimate of $438.36 million.

Branch consumer net finance receivables reached $3.16 billion at the end of the first quarter, representing an increase of 23 percent from the prior year, and up 1 percent from the preceding fourth quarter 2013.

Average receivables per branch were $3.8 million at quarter-end, up 24 percent from the prior-year quarter and 1 percent from the fourth quarter 2013.

Looking ahead to fiscal 2014, Springleaf maintained its outlook for consumer net finance receivables at the end of the year in a range of $3.60 billion to $3.75 billion.

The company now expects full-year acquisitions and servicing segment pretax income in a range of $95 million to $115 million, up from the prior range of $85 million to $105 million.

LEAF is currently trading at $24.02, down $0.74 or 2.99 percent on a volume of 98,246 shares.