0000025598-16-000046.txt : 20160505 0000025598-16-000046.hdr.sgml : 20160505 20160505111437 ACCESSION NUMBER: 0000025598-16-000046 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20160505 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160505 DATE AS OF CHANGE: 20160505 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPRINGLEAF FINANCE CORP CENTRAL INDEX KEY: 0000025598 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 350416090 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06155 FILM NUMBER: 161622323 BUSINESS ADDRESS: STREET 1: 601 NW SECOND ST CITY: EVANSVILLE STATE: IN ZIP: 47708 BUSINESS PHONE: 8124248031 MAIL ADDRESS: STREET 1: 601 NW SECOND ST CITY: EVANSVILLE STATE: IN ZIP: 47708 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN GENERAL FINANCE CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CREDITHRIFT FINANCIAL CORP DATE OF NAME CHANGE: 19890330 8-K 1 sfc-20160505proforma8xk.htm 8-K 8-K


 
 
 
 
 
 
 
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): May 5, 2016 (May 2, 2016)
 
Springleaf Finance Corporation

(Exact name of registrant as specified in its charter)
 
Indiana
001-06155
35-0416090
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
601 N.W. Second Street,
Evansville, Indiana 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))




 
 
 
 
 





Item 2.01
Completion of Acquisition or Disposition of Assets.

SALE OF BRANCHES TO LENDMARK

On May 2, 2016, pursuant to the Purchase and Sale Agreement, dated as of November 12, 2015, by and between OneMain Holdings, Inc. (“OMH”), certain subsidiaries of Springleaf Finance Corporation (the “Company,” “we,” “us,” or “our”) and Lendmark Financial Services, LLC (“Lendmark”) and as required by the previously disclosed DOJ Settlement Agreement, we completed the sale of 127 Springleaf Financial branches and, subject to certain exclusions, the associated personal loans issued to customers of such branches, fixed non-information technology assets and certain other tangible personal property located in such branches to Lendmark for an aggregate cash purchase price of $624 million. Such sale was effective as of April 30, 2016, and included the sale to Lendmark of personal loans with an unpaid principal balance as of March 31, 2016, of $600 million. OMH has entered into a Transition Services Agreement with Lendmark and OMH’s and our activities will remain subject to the oversight of the Monitoring Trustee appointed by the Court pursuant to the DOJ Settlement Agreement until the expiration of the Transition Services Agreement. Although we and OMH continue to take such steps as we believe are necessary to comply with the terms of the DOJ Settlement Agreement, no assurance can be given that we will not incur fines or penalties associated with OMH’s or our activities pursuant to the Transition Services Agreement or OMH’s or our efforts to comply with the terms of the DOJ Settlement Agreement.

Item 9.01
Financial Statements and Exhibits.
(b)
Pro forma financial information.
The following unaudited pro forma condensed consolidated financial information of the Company giving effect to the Sale is being filed as Exhibit 99.1 of this Form 8-K and is incorporated herein by reference:
Pro Forma Condensed Consolidated Balance Sheet Information (Unaudited) as of December 31, 2015;
Pro Forma Condensed Consolidated Statement of Operations Information (Unaudited) for the Year Ended December 31, 2015.
(d)    Exhibits.

Exhibit Number
 
Description
99.1
 
Pro Forma Condensed Consolidated Financial Information (Unaudited).









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.

 
 
 
SPRINGLEAF FINANCE CORPORATION
 
 
 
(Registrant)
 
 
 
 
Date:
May 5, 2016
By:
/s/ Micah R. Conrad
 
 
 
Micah R. Conrad
 
 
 
Senior Vice President and Chief Financial Officer









Exhibit Index

Exhibit Number
 
Description
99.1
 
Pro Forma Condensed Consolidated Financial Information (Unaudited).



EX-99.1 2 sfcexhibit991proforma.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated balance sheet information and statement of operations information (collectively, the “Pro Forma Financial Information”) are based on the consolidated financial statements of Springleaf Finance Corporation (“SFC” or, collectively with its subsidiaries, the “Company”) as of and for the year ended December 31, 2015. The Pro Forma Financial Information has been prepared to illustrate the effect of the Disposition of Assets Held for Sale (as defined in Note 1 of the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information) on May 2, 2016 by the Company, through wholly owned direct and indirect subsidiaries, pursuant to the previously announced Purchase and Sale Agreement (the “Purchase Agreement”) entered into with Lendmark Financial Services, LLC (“Lendmark”) on November 12, 2015.

Assumptions and estimates underlying the unaudited adjustments to the Pro Forma Financial Information are described in the accompanying notes. The historical consolidated financial statements have been adjusted in the unaudited Pro Forma Financial Information to give effect to pro forma events that are: (i) directly attributable to the Disposition of Assets Held for Sale, (ii) factually supportable, and (iii) with respect to the pro forma statement of operations, expected to have a continuing impact on the consolidated results of SFC following the Disposition of Assets Held for Sale. The unaudited Pro Forma Financial Information has been presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the Disposition of Assets Held for Sale occurred on December 31, 2015, for purposes of the unaudited Pro Forma Condensed Consolidated Balance Sheet and on January 1, 2015, for purposes of the unaudited Pro Forma Condensed Consolidated Statement of Operations. Further, the unaudited pro forma condensed consolidated financial information does not purport to project the future operating results or financial position of the Company following the Disposition of Assets Held for Sale.

See Note 1 of the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information herein for a description of the Disposition of Assets Held for Sale. In the opinion of management, all adjustments necessary to reflect the effects of the Disposition of Assets Held for Sale described in the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information have been included and are based upon available information and assumptions that the Company believes are reasonable.

The unaudited Pro Forma Financial Information has been developed from and should be read in conjunction with SFC’s Annual Report on Form 10-K for the year ended December 31, 2015 filed on February 29, 2016 with the Securities and Exchange Commission (“2015 Annual Report on Form 10-K”).


1


Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

The following unaudited pro forma condensed consolidated balance sheet as of December 31, 2015, presents the December 31, 2015 balance sheet of SFC assuming the Disposition of Assets Held for Sale had been consummated on that date.
(dollars in millions)
 
As Reported (a)
 
Disposition of Assets Held for Sale (b)
 
Pro Forma
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
321

 
$
635

(c)
 
$
956

Investment securities
 
604

 

 
 
604

Net finance receivables:
 
 
 
 
 
 
 
Personal loans
 
4,300

 

 
 
4,300

SpringCastle Portfolio
 
1,576

 

 
 
1,576

Real estate loans
 
524

 

 
 
524

Retail sales finance
 
23

 

 
 
23

Net finance receivables
 
6,423

 

 
 
6,423

Unearned insurance premium and claim reserves
 
(250
)
 

 
 
(250
)
Allowance for finance receivable losses
 
(219
)
 

 
 
(219
)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses
 
5,954

 

 
 
5,954

Finance receivables held for sale
 
796

 
(617
)
(d)
 
179

Notes receivable from parent and affiliates
 
3,804

 

 
 
3,804

Restricted cash and cash equivalents
 
295

 

 
 
295

Other assets
 
281

 
(3
)
(e)
 
278

 
 


 
 
 
 
 
Total assets
 
$
12,055

 
$
15

 
 
$
12,070

 
 
 
 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
 
 
 
Long-term debt
 
$
9,582

 
$

 
 
$
9,582

Insurance claims and policyholder liabilities
 
230

 

 
 
230

Deferred and accrued taxes
 
103

 
6

(f)
 
109

Other liabilities
 
217

 
(1
)
(g)
 
216

Total liabilities
 
10,132

 
5

 
 
10,137

 
 
 
 
 
 
 
 
Shareholders’ equity:
 
 
 
 
 
 
 
Common stock
 
5

 

 
 
5

Additional paid-in capital
 
758

 

 
 
758

Accumulated other comprehensive loss
 
(24
)
 

 
 
(24
)
Retained earnings
 
1,330

 
10

(h)
 
1,340

Springleaf Finance Corporation shareholder’s equity
 
2,069

 
10

 
 
2,079

Non-controlling interests
 
(146
)
 

 
 
(146
)
Total shareholder's equity
 
1,923

 
10

 
 
1,933

 
 
 
 
 
 
 
 
Total liabilities and shareholder's equity
 
$
12,055

 
$
15

 
 
$
12,070



See Notes to Pro Forma Condensed Consolidated Financial Information (Unaudited).




2


Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

The following unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2015, presents the historical income statement of SFC assuming the Disposition of Assets Held for Sale had been consummated on January 1, 2015.
(dollars in millions)
 
As Reported (a)
 
Disposition of Assets Held for Sale (i)
 
Pro Forma
Year Ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
1,665

 
(168
)
(j)
 
1,497

 
 
 
 
 
 
 
 
Interest expense
 
667

 

 
 
667

 
 
 
 
 
 
 
 
Net interest income
 
998

 
(168
)
 
 
830

 
 
 
 
 
 
 
 
Provision for finance receivable losses
 
361

 
(35
)
(k)
 
326

 
 
 
 
 
 
 
 
Net interest income after provision for finance receivable losses
 
637

 
(133
)
 
 
504

 
 
 
 
 
 
 
 
Other revenues:
 
 
 
 
 
 
 
Insurance
 
158

 

 
 
158

Investment
 
49

 

 
 
49

Other
 
35

 

 
 
35

Total other revenues
 
242

 

 
 
242

 
 
 
 
 
 
 
 
Other expenses:
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Salaries and benefits
 
364

 
(30
)
(l)
 
334

Other operating expenses
 
299

 
(31
)
(m)
 
268

Insurance policy benefits and claims
 
72

 

 
 
72

Total other expenses
 
735

 
(61
)
 
 
674

 
 
 
 
 
 
 
 
Income before provision for (benefit from) income taxes
 
144

 
(72
)
 
 
72

 
 
 
 
 
 
 
 
Provision for (benefit from) income taxes
 
15

 
(27
)
(n)
 
(12
)
 
 
 
 
 
 
 
 
Net income
 
129

 
(45
)
 
 
84

 
 
 
 
 
 
 
 
Net income attributable to non-controlling interests
 
120

 

 
 
120

 
 
 
 
 
 
 
 
Net income (loss) attributable to Springleaf Finance Corporation
 
$
9

 
$
(45
)
 
 
$
(36
)


See Notes to Pro Forma Condensed Consolidated Financial Information (Unaudited).














3


Exhibit 99.1

Note 1-Description of Disposition of Assets Held for Sale

On May 2, 2016, SFC through wholly owned direct and indirect subsidiaries (collectively, the “Branch Sellers”) completed the following previously announced transactions with Lendmark: (i) sale of 127 branches (the “Branches”) together with certain loans issued to the Branch customers, the fixed non-information technology assets located at any such Branch and certain other Branch assets, and (ii) assumption of certain Branch liabilities (including the Branch Sellers’ obligations under certain Branch store leases) ((i) and (ii) collectively, the “Branch Sales”). The Branches are located in the states of Arizona, California, Colorado, Idaho, North Carolina, Ohio, Pennsylvania, Texas, Virginia, Washington and West Virginia.

The purchase price for the Branch Sales was $624 million and was equal to the sum of (i) the aggregate unpaid balance as of the cutoff date, March 31, 2016, of the purchased loans multiplied by 103%, plus (ii) for each interest-bearing purchased loan, an amount equal to all unpaid interest that has accrued on the unpaid balance at the applicable note rate from the most recent interest payment date through the cutoff date, plus (iii) the sum of all prepaid charges and fees and security deposits of the Branch Sellers to the extent arising under the purchased contracts as reflected on the books and records of the Branch Sellers as of closing. The purchase price will be subject to a post-closing true-up to determine the aggregate unpaid balance of and interest on the purchased loans as of April 30, 2016.

Note 2-Basis of Pro Forma Presentation

The unaudited pro forma condensed consolidated balance sheet related to the Disposition of Assets Held for Sale is included as of December 31, 2015, and the unaudited pro forma condensed consolidated statement of operations is included for the year ended December 31, 2015. The Pro Forma Financial Information is based upon the Company’s previously reported consolidated financial statements included in its 2015 Annual Report on Form 10-K. The pro forma adjustments are based upon currently available information and assumptions and estimates that management believes to be reasonable. The adoption of new, or changes to existing accounting principles generally accepted in the United States of America subsequent to the unaudited pro forma condensed consolidated financial statement dates, may result in changes to the presentation of the preliminary unaudited Pro Forma Financial Information. However, the Company has no responsibility to update the Pro Forma Financial Information or adjustments to reflect any such changes.

Note 3-Pro Forma Adjustments

The following pro forma adjustments are included in the Pro Forma Financial Information:

a)
Reflects the Company’s previously reported consolidated balance sheet and statement of operations included in its 2015 Annual Report on Form 10-K.

b)
Represents the elimination of the assets and liabilities, as well as receipt of proceeds related to the Disposition of Assets Held for Sale, as if it had occurred on December 31, 2015.

c)
Represents total assumed cash proceeds of $635 million consisting of the December 31, 2015 balance of receivables held for sale of approximately $610 million multiplied by 103% plus accrued and unpaid interest on interest bearing loans, prepaid charges, fees and security deposits as of December 31, 2015 of approximately $7 million.

d)
Reflects finance receivables held for sale of $617 million (including accrued and unpaid interest on interest bearing loans) as of December 31, 2015.

e)
Represents the exclusion of certain fixed assets totaling approximately $3 million as part of the Disposition of Assets Held for Sale as if it had occurred on December 31, 2015.


4


Exhibit 99.1

f)
Represents the increase in deferred and accrued taxes of approximately $6 million from the net effect of income taxes from the gain on the Disposition of Assets Held for Sale as if it had occurred on December 31, 2015. The tax effect is calculated based on the Company’s combined federal and state statutory tax rate of 37%.

g)
Reflects the exclusion of accrued expenses as a part of the Disposition of Assets Held for Sale as if it had occurred on December 31, 2015.

h)
Represents the gain, net of income tax effects, from the Disposition of Assets Held for Sale as if it had occurred on December 31, 2015. The tax effect is calculated based on the Company’s combined federal and state statutory rate of 37%.

i)
Represents the elimination of financial results and impact on the statement of operations relating to the Disposition of Assets Held for Sale as if it had occurred on January 1, 2015.

j)
Represents the elimination of interest income attributable to the operations of the Branches.

k)
Represents the elimination of provision for finance receivable losses related to the operations of the Branches.

l)
Represents the elimination of operating expenses related to salaries and benefits associated with employees located at the Branches.

m)
Represents the elimination of other operating expenses related to certain direct costs of the Branches.

n)
Represents the elimination of income tax benefit attributable to the operations of the Branches. The tax effect is calculated based on the Company’s combined federal and state statutory rate of 37%.


5