Springleaf - American General Finance

Springleaf Financial Services, previously known as American General Finance, is a company whose primary business is consumer lending, credit insurance, and other credit related products. Its corporate headquarters are in Evansville, Indiana. In August 2010 Fortress Investment Group purchased 80% of American General Finance from AIG and changed its name to Springleaf. Following the 2015 acquisition of OneMain Financial, the combined company became OneMain Holdings, Inc. traded on the NYSE with the ticker symbol of OMF instead of LEAF. In 2015 Springleaf was the second-largest "provider of personal installment loans to subprime borrowers" in the United States, with "approximately 830 branches in 27 states and a consumer loan portfolio that totaled $4.0 billion" and OneMain Financial was the largest with 1,139 branch locations in 43 states and a "consumer loan portfolio that totaled $8.4 billion." OneMain Financial targets borrowers with low credit scores (FICO 550 - 699) who are unable to acquire loans elsewhere offering loan amounts of up to $15,000 with interest rates of about 25% to 35% plus fees.

History

The company began in 1920 in Evansville, Indiana as Interstate Finance Corporation to underwrite the sales of trucks and other vehicles. By 1929 the company had expanded to write credit-related insurance and start providing services outside of the Evansville area. In 1934 the company expanded across state lines by opening branches in Owensboro, Kentucky and Henderson, Kentucky.

Throughout the next couple of decades, the company continued to grow and expand. In 1960 it went public on the Over-The-Counter Market. Three years later, in 1963, it started operating under the names of CrediThrift of America and CreditWay of America, and also began construction on a new headquarters building in Evansville. In 1969 the company was listed on the New York Stock Exchange, though it later de-listed and was re-listed again in 2013.

In 1982 the company was acquired by American General Corporation (now known as AIG), and acquired General Finance with 350 branches in 16 states. Five years later, in 1988, the company acquired Manufacturers Hanover Consumer Services, which expanded the company to more than 1,400 branch offices in 40 states, Puerto Rico, and the Virgin Islands. That same year the company began operating under the name of American General Finance. In 2006, with continued growth, the company announced yet another expansion of its Evansville headquarters building and continued acquisitions of other financial services companies.

The 2007â€"2012 global financial crisis and the 2008â€"2012 global recession substantially hurt the company's financial performance. As of June 30, 2008, about 83 percent, or $7.7 billion, of its real estate loans were held by subprime borrowers. For 2008, American General Finance reported a loss of $1.3 billion. As a result, over the next two years the company closed over 500 local branches and cut 500 positions, including 140 of their Evansville headquartered employees.

In August 2010, Fortress Investment Group under the advice and guidance of Wes Edens, who runs Fortressâ€™s private equity business, acquired 80% of American General Finance, renamed Springleaf in 2011, for $125 million. In 2013 Springleaf went public and returned to the New York Stock Exchange in October of that year, although AIG and Fortress remained majority owners of the company. which made Fortress the Springleaf's majority stakeholder. By 2015 the value of Springleaf Holdings Inc. had ballooned to "$3.5 billion â€" putting the firmâ€™s gain at more than 27 times Fortressâ€™s original investment of $124 million in 2010." Edens was heralded as the "new king of subprime lending" by The Wall Street Journal. Edens is chairman of the subprime lender Springleaf Financial Servicesâ€"formerly known as AIG's American General Finance.

OneMain Financial

OneMain Financial owned by Citigroup, which was headquartered in Baltimore, Maryland, was the "largest provider of personal installment loans to subprime borrowers" in the United States in 2015 with 1,139 branch locations in 43 states and a "consumer loan portfolio that totaled $8.4 billion." In March 2015, the company entered into an agreement to acquire OneMain Financial from Citigroup for $4.25 billion. The combined company would have $13.96 billion in core consumer net finance receivables and nearly 2,000 branches across 43 states. The combined company is to be led by Springleaf CEO Jay Levine with the continuation of both the Springleaf and OneMain brands until migrating to the OneMain brand beginning in mid-2016. The combined company is to be run from Springleaf's executive office in Connecticut, but will maintain significant presences in Evansville and Baltimore, Maryland.

Services

Springleaf employs an estimated 4,600 people (about 900 of which are at its Evansville headquarters). Following the merger with OneMain Financial, the company will employ approximately 8,000 people. Part of its services focuses on originating secured and unsecured consumer loans. This "branch network" segment purchases retail sales finance contracts, and provides revolving retail sales financing services. Through this, the company finances retail sales of consumer goods and services by retail merchants.

Springleaf targets customers with FICO credit "scores of 500 to 750, especially those with scores of less than 699." FICO scores range from 300 to 850 with excellent credit scores as 720 and above, 690 to 720 as good credit and below 630 as bad credit.