$IEGH May 8, 2017 IEG Holdings Corporation (OT
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Posted On: 05/08/2017 2:07:58 PM
$IEGH
May 8, 2017
IEG Holdings Corporation (OTCQB: IEGH) provides online unsecured consumer loans under the brand name "Mr. Amazing Loans" via its website, www.mramazingloans.com, in 19 US states. The company offers $5,000 and $10,000 personal loans over a five-year term at 19.9% to 29.9% APR. IEG Holdings plans future expansion to a total of 25 US states during 2017E, which would cover 240mn people and represent approximately 75% of the US population.
Since 2013, IEGH has obtained additional state lending licenses, and they are now licensed and originating direct consumer loans in 19 states including: Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah and Virginia. The Company was founded in 2010 and is headquartered in Las Vegas, Nevada.
Highlights from the note are as follows:
IEGH releases 1Q17 results
IEGH released 1Q17 results in on May 3, 2017, which showed a reduction in operating costs from $1.5mn in 1Q16 to $1.0mn in 1Q17. Revenues, primarily consisting of interest revenue, came in at $0.47mn, versus $0.52mn in 1Q16, also a decline, as IEGH focused on reducing expenses. Cumulative Net Loss narrowed by approximately 50%, at ($0.50mn) in 1Q17 versus ($0.99mn) in 1Q16. EPS loss in the quarter narrowed to ($0.05) from ($0.33) in the year ago period, due to an increase in shares as well as the reduced net loss. IEGH's results announcement stated that cumulative loan volume was $14.24mn at the end of 1Q17, versus $10.99mn in January 2016. While the overall trend of loan growth is up 29.7% over this period, we believe loan growth slowed in March, resulting from management's focus on reducing losses, and the focus on the tender offer for OneMain Holdings. In our view, loan volume provides key insights into the health of IEGH's business, as it is a driver of revenue and potential profitability.
IEGH announces first shareholder dividend plans
As part of the results announcement, IEGH declared its first shareholder dividend. The company will pay a cash dividend of $0.005 per common share for the first quarter of 2017. The dividend is payable on August 21, 2017 to stockholders of record at the close of business on Monday, June 5, 2017. In the announcement, IEGH Chairman and CEO Paul Mathieson stated that IEGH expects to pay quarterly dividends on an ongoing basis.
Update on OneMain corporate action
Mathieson also provided an update on the company's tender offer for shares of OneMain Holdings, Inc. (NYSE: OMF). As we noted in prior coverage of IEGH, the company has extended its tender offer for shares of OMF until 5PM EST on May 5, 2017, unless extended. OneMain Holdings is a multi-billion dollar NYSE listed provider of consumer finance and insurance solutions. Terms of the offer consist of an exchange of 20 shares of IEG Holdings common stock for each share of OneMain common stock, up to an aggregate of 6,747,723 shares of OneMain's common stock.
Price target unchanged at $10.50 for IEGH
Our price target for IEGH is unchanged at $10.50. IEGH is a high risk, high potential reward company in the consumer finance sector. IEGH has several potential catalysts including growth, guidance for adjusted profitability in 2017, and ongoing strategic corporate finance initiatives. We are encouraged by management's decision to declare a quarterly dividend, and look forward to hearing about upcoming plans for growth.
May 8, 2017
IEG Holdings Corporation (OTCQB: IEGH) provides online unsecured consumer loans under the brand name "Mr. Amazing Loans" via its website, www.mramazingloans.com, in 19 US states. The company offers $5,000 and $10,000 personal loans over a five-year term at 19.9% to 29.9% APR. IEG Holdings plans future expansion to a total of 25 US states during 2017E, which would cover 240mn people and represent approximately 75% of the US population.
Since 2013, IEGH has obtained additional state lending licenses, and they are now licensed and originating direct consumer loans in 19 states including: Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah and Virginia. The Company was founded in 2010 and is headquartered in Las Vegas, Nevada.
Highlights from the note are as follows:
IEGH releases 1Q17 results
IEGH released 1Q17 results in on May 3, 2017, which showed a reduction in operating costs from $1.5mn in 1Q16 to $1.0mn in 1Q17. Revenues, primarily consisting of interest revenue, came in at $0.47mn, versus $0.52mn in 1Q16, also a decline, as IEGH focused on reducing expenses. Cumulative Net Loss narrowed by approximately 50%, at ($0.50mn) in 1Q17 versus ($0.99mn) in 1Q16. EPS loss in the quarter narrowed to ($0.05) from ($0.33) in the year ago period, due to an increase in shares as well as the reduced net loss. IEGH's results announcement stated that cumulative loan volume was $14.24mn at the end of 1Q17, versus $10.99mn in January 2016. While the overall trend of loan growth is up 29.7% over this period, we believe loan growth slowed in March, resulting from management's focus on reducing losses, and the focus on the tender offer for OneMain Holdings. In our view, loan volume provides key insights into the health of IEGH's business, as it is a driver of revenue and potential profitability.
IEGH announces first shareholder dividend plans
As part of the results announcement, IEGH declared its first shareholder dividend. The company will pay a cash dividend of $0.005 per common share for the first quarter of 2017. The dividend is payable on August 21, 2017 to stockholders of record at the close of business on Monday, June 5, 2017. In the announcement, IEGH Chairman and CEO Paul Mathieson stated that IEGH expects to pay quarterly dividends on an ongoing basis.
Update on OneMain corporate action
Mathieson also provided an update on the company's tender offer for shares of OneMain Holdings, Inc. (NYSE: OMF). As we noted in prior coverage of IEGH, the company has extended its tender offer for shares of OMF until 5PM EST on May 5, 2017, unless extended. OneMain Holdings is a multi-billion dollar NYSE listed provider of consumer finance and insurance solutions. Terms of the offer consist of an exchange of 20 shares of IEG Holdings common stock for each share of OneMain common stock, up to an aggregate of 6,747,723 shares of OneMain's common stock.
Price target unchanged at $10.50 for IEGH
Our price target for IEGH is unchanged at $10.50. IEGH is a high risk, high potential reward company in the consumer finance sector. IEGH has several potential catalysts including growth, guidance for adjusted profitability in 2017, and ongoing strategic corporate finance initiatives. We are encouraged by management's decision to declare a quarterly dividend, and look forward to hearing about upcoming plans for growth.
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