Springleaf Holdings, Inc. (Form: 10-Q, Received: 05/08/2015 10:15:18)

Large accelerated filer o

Accelerated filer þ

Non-accelerated filer o

Smaller reporting company o

(Do not check if a smaller reporting company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-36129

SPRINGLEAF HOLDINGS, INC.

(Exact name of registrant as specified in its charter)



Delaware		27-3379612
(State of Incorporation)		(I.R.S. Employer Identification No.)

601 N.W. Second Street, Evansville, IN		47708
(Address of principal executive offices)		(Zip Code)

(812) 424-8031

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

At May 4, 2015 , there were 134,482,414 shares of the registrant’s common stock, $.01 par value, outstanding.

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TABLE OF CONTENTS



PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Shareholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	68
Item 4.	Controls and Procedures	68

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	69
Item 1A.	Risk Factors	69
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 3.	Defaults Upon Senior Securities	69
Item 4.	Mine Safety Disclosures	70
Item 5.	Other Information	70
Item 6.	Exhibits	70

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)



(dollars in millions)	March 31, 2015			December 31, 2014

Assets

Cash and cash equivalents	$	2,421		$	879
Investment securities	2,736			2,935
Net finance receivables:
Personal loans (includes loans of consolidated VIEs of $2.8 billion in 2015 and $1.9 billion in 2014)	3,917			3,831
SpringCastle Portfolio (includes loans of consolidated VIEs of $1.9 billion in 2015 and $2.0 billion in 2014)	1,868			1,979
Real estate loans	598			625
Retail sales finance	39			48
Net finance receivables	6,422			6,483
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $76 million in 2015 and $72 million in 2014)	(177		)	(176		)
Net finance receivables, less allowance for finance receivable losses	6,245			6,307
Finance receivables held for sale	199			205
Restricted cash and cash equivalents (includes restricted cash and cash equivalents of consolidated VIEs of $330 million in 2015 and $210 million in 2014)	344			218
Other assets	462			514

Total assets	$	12,407		$	11,058

Liabilities and Shareholders’ Equity

Long-term debt (includes debt of consolidated VIEs of $4.9 billion in 2015 and $3.6 billion in 2014)	$	9,635		$	8,385
Insurance claims and policyholder liabilities	443			446
Deferred and accrued taxes	142			152
Other liabilities	336			238
Total liabilities	10,556			9,221
Commitments and contingent liabilities (Note 14)

Shareholders’ equity:
Common stock, par value $.01 per share; 2,000,000,000 shares authorized, 115,064,570 and 114,832,895 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively	1			1
Additional paid-in capital	530			529
Accumulated other comprehensive income	3			3
Retained earnings	1,492			1,492
Springleaf Holdings, Inc. shareholders’ equity	2,026			2,025
Non-controlling interests	(175		)	(188		)
Total shareholders’ equity	1,851			1,837

Total liabilities and shareholders’ equity	$	12,407		$	11,058

See Notes to Condensed Consolidated Financial Statements.

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SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)



(dollars in millions except earnings per share)	Three Months Ended March 31,
(dollars in millions except earnings per share)	2015			2014

Interest income:
Finance charges	$	402		$	548
Finance receivables held for sale originated as held for investment	4			4
Total interest income	406			552

Interest expense	158			205

Net interest income	248			347

Provision for finance receivable losses	87			161

Net interest income after provision for finance receivable losses	161			186

Other revenues:
Insurance	36			38
Investment	17			10
Net loss on repurchases and repayments of debt	—			(7		)
Net loss on fair value adjustments on debt	—			(17		)
Net gain on sales of real estate loans and related trust assets	—			55
Other	(2		)	2
Total other revenues	51			81

Other expenses:
Operating expenses:
Salaries and benefits	93			92
Other operating expenses	65			58
Insurance losses and loss adjustment expenses	16			18
Total other expenses	174			168

Income before provision for income taxes	38			99

Provision for income taxes	7			31

Net income	31			68

Net income attributable to non-controlling interests	31			16

Net income attributable to Springleaf Holdings, Inc.	$	—		$	52

Share Data:
Weighted average number of shares outstanding:
Basic	115,027,470			114,788,439
Diluted	115,027,470			115,144,858
Earnings per share:
Basic	$	—		$	0.46
Diluted	$	—		$	0.45

See Notes to Condensed Consolidated Financial Statements.

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SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Net income	$	31		$	68

Other comprehensive income:
Net unrealized gains on non-credit impaired investment securities	5			10
Foreign currency translation adjustments	1			—

Income tax effect:
Net unrealized gains on non-credit impaired investment securities	(2		)	(4		)
Other comprehensive income, net of tax, before reclassification adjustments	4			6

Reclassification adjustments included in net income:
Net realized gains on investment securities	(6		)	(2		)

Income tax effect:
Net realized gains on investment securities	2			1
Reclassification adjustments included in net income, net of tax	(4		)	(1		)
Other comprehensive income, net of tax	—			5

Comprehensive income	31			73

Comprehensive income attributable to non-controlling interests	31			16

Comprehensive income attributable to Springleaf Holdings, Inc.	$	—		$	57

See Notes to Condensed Consolidated Financial Statements.

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SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)



	Springleaf Holdings, Inc. Shareholders’ Equity
(dollars in millions)	Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Income		Retained Earnings		Springleaf Holdings, Inc. Shareholders’ Equity			Non-controlling Interests			Total Shareholders’ Equity

Balance, January 1, 2015	$	1	$	529		$	3	$	1,492	$	2,025		$	(188	)	$	1,837
Share-based compensation expense, net of forfeitures	—		3			—		—		3			—			3
Excess tax benefit from shared-based compensation	—		2			—		—		2			—			2
Withholding tax on RSUs converted	—		(4		)	—		—		(4		)	—			(4		)
Change in non-controlling interests:
Distributions declared to joint venture partners	—		—			—		—		—			(18		)	(18		)
Net income	—		—			—		—		—			31			31
Balance, March 31, 2015	$	1	$	530		$	3	$	1,492	$	2,026		$	(175	)	$	1,851

Balance, January 1, 2014	$	1	$	524		$	28	$	987	$	1,540		$	347		$	1,887
Share-based compensation expense, net of forfeitures	—		2			—		—		2			—			2
Change in net unrealized gains:
Investment securities	—		—			5		—		5			—			5
Net income	—		—			—		52		52			16			68
Balance, March 31, 2014	$	1	$	526		$	33	$	1,039	$	1,599		$	363		$	1,962

See Notes to Condensed Consolidated Financial Statements.

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SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Cash flows from operating activities
Net income	$	31		$	68
Reconciling adjustments:
Provision for finance receivable losses	87			161
Depreciation and amortization	18			(11		)
Deferred income tax benefit	(10		)	(89		)
Net loss on fair value adjustments on debt	—			17
Net gain on sales of real estate loans and related trust assets	—			(55		)
Net charge-offs on finance receivables held for sale	1			—
Net loss on repurchases and repayments of debt	—			7
Share-based compensation expense, net of forfeitures	3			2
Other	(8		)	(1		)
Cash flows due to changes in:
Other assets and other liabilities	52			57
Insurance claims and policyholder liabilities	(2		)	—
Taxes receivable and payable	10			118
Accrued interest and finance charges	7			2
Restricted cash and cash equivalents not reinvested	—			(4		)
Net cash provided by operating activities	189			272

Cash flows from investing activities
Finance receivables originated or purchased, net of deferred origination costs	(633		)	(522		)
Principal collections on finance receivables	628			804
Sales and principal collections on finance receivables held for sale originated as held for investment	52			816
Available-for-sale investment securities purchased	(95		)	(90		)
Trading investment securities purchased	(954		)	(22		)
Available-for-sale investment securities called, sold, and matured	60			63
Trading investment securities called, sold, and matured	1,211			5
Change in restricted cash and cash equivalents	(120		)	2
Proceeds from sale of real estate owned	5			22
Other, net	7			(5		)
Net cash provided by investing activities	161			1,073

Cash flows from financing activities
Proceeds from issuance of long-term debt, net of commissions	1,523			573
Excess tax benefit from share-based compensation	2			—
Repayment of long-term debt	(315		)	(1,585		)
Distributions to joint venture partners	(18		)	—
Net cash provided by (used for) financing activities	1,192			(1,012		)



Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)

(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Net change in cash and cash equivalents	1,542		333
Cash and cash equivalents at beginning of period	879		431
Cash and cash equivalents at end of period	$	2,421	$	764

Supplemental non-cash activities
Transfer of finance receivables to real estate owned	$	2	$	17
Transfer of finance receivables held for investment to finance receivables held for sale (prior to deducting allowance for finance receivable losses)	$	—	$	835
Unsettled investment security purchases and sales	$	20	$	—

See Notes to Condensed Consolidated Financial Statements.

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SPRINGLEAF HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

March 31, 2015

1. Business and Basis of Presentation

Springleaf Holdings, Inc. (“SHI” or, collectively with its subsidiaries, whether directly or indirectly owned, “Springleaf,” the “Company,” “we,” “us,” or “our”) is a Delaware corporation, primarily owned by Springleaf Financial Holdings, LLC (the “Initial Stockholder”).

At March 31, 2015 , the Initial Stockholder owned approximately 75% of SHI’s common stock. The Initial Stockholder is owned primarily by a private equity fund managed by an affiliate of Fortress Investment Group LLC (“Fortress”) and AIG Capital Corporation, a subsidiary of American International Group, Inc. (“AIG”). As a result of our offering of common stock, which closed on May 4, 2015, the Initial Stockholder owned approximately 57.7% of SHI’s common stock as of such date, and the economic interests of Fortress and AIG were approximately 54.6% and 3.1% , respectively. If the option granted to the underwriters to purchase additional shares is exercised in full at a later date, the Initial Stockholder will own approximately 54.6% of SHI’s common stock, and the economic interests of Fortress and AIG will be approximately 54.6% and 0% , respectively. See Note 18 for further information on our equity offering.

SHI is a financial services holding company whose principal subsidiary is Springleaf Finance, Inc. (“SFI”). SFI’s principal subsidiary is Springleaf Finance Corporation (“SFC”), a financial services holding company with subsidiaries engaged in the consumer finance and credit insurance businesses.

BASIS OF PRESENTATION

We prepared our condensed consolidated financial statements using generally accepted accounting principles in the United States of America (“U.S. GAAP”). These statements are unaudited. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by U.S. GAAP. The statements include the accounts of SHI, its subsidiaries (all of which are wholly owned, except for certain indirect subsidiaries associated with a joint venture in which we own a 47% equity interest), and variable interest entities (“VIEs”) in which we hold a controlling financial interest and for which we are considered to be the primary beneficiary as of the financial statement date.

We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our condensed consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of results. Ultimate results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date. To conform to the 2015 presentation, we reclassified certain prior period items in our condensed consolidated cash flow statement. These statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (“ 2014 Annual Report on Form 10-K”). We follow the same significant accounting policies for our interim reporting.

Prior Period Revisions

During the fourth quarter of 2014, we discovered that our personal loans and loans included in the SpringCastle Portfolio deemed to be troubled debt restructured (“TDR”) finance receivables were previously incorrectly excluded in the related disclosures of our finance receivables and allowance for finance receivable losses. The applicable prior period amounts have been corrected in Notes 4 and 5 in this report.

2. Significant Transactions

PENDING ACQUISITION OF ONEMAIN FINANCIAL

On March 2, 2015, SHI entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with CitiFinancial Credit Company (“Citigroup”) to acquire OneMain Financial Holdings, Inc. (“OneMain”), which we refer to in this report as the “Proposed Acquisition”. The Stock Purchase Agreement provides that, upon the terms and subject to the conditions set forth therein, SHI will purchase from Citigroup all of the equity of OneMain for an aggregate purchase price of $4.25 billion in cash, which will be adjusted up or down, as applicable, by the amount by which OneMain’s stockholder’s equity as of the closing exceeds or is less than $1.94 billion . The Proposed Acquisition would bring together two branch-based consumer finance

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companies, with complementary strategies and locations, focused on the non-prime market in the United States. On a combined basis, Springleaf and OneMain have approximately 2,000 branches, with OneMain’s larger geographic footprint covering 43 states.

The parties’ respective obligations to consummate the Proposed Acquisition are subject to customary closing conditions, including (i) the expiration or early termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the “HSR Act”); (ii) receipt of all consents, authorizations or approvals of all state regulatory authorities governing consumer lending and insurance in various states in which OneMain or any of its subsidiaries operates; (iii) the accuracy of the other party’s representations and warranties as of the closing date; and (iv) compliance by the other party with its covenants and agreements contained in the Stock Purchase Agreement (in the case of clauses (iii) and (iv), subject to customary materiality qualifiers). Under the Stock Purchase Agreement, we are required to take all action necessary to resolve any objection that antitrust enforcement authorities may assert with respect to the Proposed Acquisition, provided that we will not be required to commit or agree to divest, license or hold separate assets of the Company and/or OneMain that account for more than $677 million in revenue of the Company and/or OneMain, as the case may be, for the twelve months ended December 31, 2014. If the Stock Purchase Agreement is terminated as a result of the failure to obtain antitrust approvals, we will be required to pay Citigroup a termination fee of $213 million . The Proposed Acquisition is expected to close in the third quarter of 2015, although there can be no assurance that the Proposed Acquisition will close, or, if it does, when the actual closing will occur.

Because the Proposed Acquisition is not likely to be a reportable transaction pursuant to the HSR Act, the parties do not plan to file premerger notification forms with the U.S. Department of Justice (the “DOJ”) and the Federal Trade Commission, and therefore are likely not subject to a mandatory HSR waiting period. On March 22, 2015, we were notified by the DOJ, Antitrust Division, that they would be reviewing the Proposed Acquisition from an antitrust perspective and we and OneMain subsequently met with, and provided information to, the DOJ staff on a voluntary basis. Thereafter, both parties received a voluntary request for information from the DOJ. On April 28, 2015, the DOJ also issued a Civil Investigative Demand (“CID”) to both parties. The voluntary request for information and the CID seek documentary materials and information regarding the Proposed Acquisition and the marketplace in which both parties operate. We are in the process of responding to the DOJ's request, and we intend to work cooperatively with the DOJ to resolve any questions that the DOJ may raise concerning the Proposed Acquisition. In addition, we have been contacted by the Colorado Attorney General's Office, which, along with other state attorneys general, may seek to coordinate their antitrust review of the Proposed Acquisition with the DOJ.

3. Recent Accounting Pronouncements

ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED

Troubled Debt Restructurings

In January 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”), ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure , which clarifies when an in substance repossession or foreclosure occurs — that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. The amendments in this ASU became effective prospectively for the Company for fiscal years, and interim periods within those annual periods, beginning after December 15, 2014. The adoption of this ASU did not have a material effect on our consolidated statements of financial condition, results of operations, or cash flows.

ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED

Revenue from Contracts

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides a consistent revenue accounting model across industries. In April 2015, the FASB voted to propose a deferral of the effective date of the new revenue recognition standard by one year, which would result in the ASU becoming effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Many of our revenue sources are not within the scope of this new standard, and we are evaluating whether the adoption of this ASU for those revenue sources that are in scope will have a material effect on our consolidated statements of financial condition, results of operations, or cash flows.

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Consolidation

In February 2015, the FASB issued ASU 2015-02, Consolidation - Amendments to the Consolidation Analysis , which amends the current consolidation guidance and ends the deferral granted to investment companies from applying the VIE guidance. This ASU is applicable to entities across all industries, particularly those that use limited partnerships as well as entities in any industry that outsource decision making or have historically applied related party tiebreaker in their consolidation analysis and disclosures. The standard is effective for public business entities for annual periods beginning after December 15, 2015. Early adoption is allowed, including in any interim period. We will evaluate whether the adoption of this ASU will have a material effect on our consolidated statements of financial condition, results of operations, or cash flows.

Debt Issuance Costs

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest , which simplifies the presentation of debt issuance costs. Under this standard, debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of that note. The ASU also clarifies that discount, premium or debt issuance costs shall not be classified as a deferred charged or deferred credit. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. We are currently evaluating the potential impact of adopting this ASU on our consolidated statements of financial condition, results of operations, or cash flows.

We do not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material impact on our condensed consolidated financial statements or disclosures.

4. Finance Receivables

Our finance receivable types include personal loans, the SpringCastle Portfolio, real estate loans, and retail sales finance as defined below:

•

Personal loans — are secured by consumer goods, automobiles, or other personal property or are unsecured, generally have maximum original terms of four years , and are usually fixed-rate, fixed-term loans. At March 31, 2015 , $2.0 billion of personal loans, or 51% , were secured by collateral consisting of titled personal property (such as automobiles) and $1.9 billion , or 49% , were secured by consumer household goods or other items of personal property or were unsecured.

•

SpringCastle Portfolio — are loans acquired through a joint venture in which we own a 47% equity interest (the “SpringCastle Portfolio”). These loans include unsecured loans and loans secured by subordinate residential real estate mortgages (which we service as unsecured loans due to the fact that the liens are subordinated to superior ranking security interests). The SpringCastle Portfolio includes both closed-end accounts and open-end lines of credit. These loans are in a liquidating status and vary in substance and form from our originated loans.

•

Real estate loans — are secured by first or second mortgages on residential real estate, generally have maximum original terms of 360 months , and are considered non-conforming. At March 31, 2015 , $221 million of real estate loans, or 37% , were secured by first mortgages and $377 million , or 63% , were secured by second mortgages. Real estate loans may be closed-end accounts or open-end home equity lines of credit and are primarily fixed-rate products. Since we ceased real estate lending in January 2012, our real estate loans are in a liquidating status.

•

Retail sales finance — include retail sales contracts and revolving retail accounts. Retail sales contracts are closed-end accounts that represent a single purchase transaction. Revolving retail accounts are open-end accounts that can be used for financing repeated purchases from the same merchant. Retail sales contracts are secured by the personal property designated in the contract and generally have maximum original terms of 60 months . Revolving retail accounts are secured by the goods purchased and generally require minimum monthly payments based on the amount financed calculated after the most recent purchase or outstanding balances. Our retail sales finance portfolio is also in a liquidating status.

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Components of net finance receivables by type were as follows:



(dollars in millions)	Personal Loans			SpringCastle Portfolio		Real Estate Loans			Retail Sales Finance			Total

March 31, 2015

Gross receivables*	$	4,593		$	1,833	$	594		$	43		$	7,063
Unearned finance charges and points and fees	(774		)	—		(1		)	(4		)	(779		)
Accrued finance charges	54			35		5			—			94
Deferred origination costs	44			—		—			—			44
Total	$	3,917		$	1,868	$	598		$	39		$	6,422

December 31, 2014

Gross receivables*	$	4,493		$	1,941	$	621		$	52		$	7,107
Unearned finance charges and points and fees	(765		)	—		(1		)	(5		)	(771		)
Accrued finance charges	58			38		5			1			102
Deferred origination costs	45			—		—			—			45
Total	$	3,831		$	1,979	$	625		$	48		$	6,483


*	Gross receivables are defined as follows:

•

finance receivables purchased as a performing receivable — gross finance receivables equal the unpaid principal balance (“UPB”) for interest bearing accounts and the gross remaining contractual payments for precompute accounts; additionally, the remaining unearned discount, net of premium established at the time of purchase, is included in both interest bearing and precompute accounts to reflect the finance receivable balance at its fair value;


•	finance receivables originated subsequent to the Fortress Acquisition (as defined in the Purchased Credit Impaired Finance Receivables section located in this Note) — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; and


•	purchased credit impaired finance receivables — gross finance receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts.

Included in the table above are personal loans with a carrying value of $2.8 billion at March 31, 2015 and $1.9 billion at December 31, 2014 and SpringCastle Portfolio loans with a carrying value of $1.9 billion at March 31, 2015 and $2.0 billion at December 31, 2014 associated with securitizations that remain on our balance sheet. The carrying value of consolidated long-term debt associated with securitizations totaled $4.9 billion at March 31, 2015 and $3.6 billion at December 31, 2014 .

Unused lines of credit extended to customers by the Company were as follows:



(dollars in millions)	March 31, 2015		December 31, 2014

Personal loans	$	1	$	1
SpringCastle Portfolio	361		354
Real estate loans	31		31
Total	$	393	$	386

Unused lines of credit on our personal loans can be suspended if one of the following occurs: the value of the collateral declines significantly; we believe the borrower will be unable to fulfill the repayment obligations; or any other default by the borrower of any material obligation under the agreement. Unused lines of credit on our real estate loans and the SpringCastle Portfolio secured by subordinate residential real estate mortgages can be suspended if one of the following occurs: (1) the value of the real estate declines significantly below the property’s initial appraised value; (2) we believe the borrower will be unable to fulfill the repayment obligations because of a material change in the borrower’s financial circumstances; or (3) any other default by the borrower of any material obligation under the agreement occurs. Unused lines of credit on home equity lines of

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credit, including the SpringCastle Portfolio secured by subordinate residential real estate mortgages, can be terminated for delinquency. Unused lines of credit on the unsecured loans of the SpringCastle Portfolio can be terminated at our discretion.

CREDIT QUALITY INDICATORS

We consider the delinquency status and nonperforming status of the finance receivable as our credit quality indicators.

We accrue finance charges on revolving retail finance receivables up to the date of charge-off at 180 days past due. Our revolving retail finance receivables that were more than 90 days past due and still accruing finance charges at March 31, 2015 and at December 31, 2014 were immaterial. Our personal loans, SpringCastle Portfolio, and real estate loans do not have finance receivables that were more than 90 days past due and still accruing finance charges.

Delinquent Finance Receivables

We consider the delinquency status of the finance receivable as our primary credit quality indicator. We monitor delinquency trends to manage our exposure to credit risk. We consider finance receivables 60 days or more past due as delinquent and consider the likelihood of collection to decrease at such time.

The following is a summary of net finance receivables by type and by days delinquent:



(dollars in millions)	Personal Loans		SpringCastle Portfolio		Real Estate Loans		Retail Sales Finance		Total

March 31, 2015

Net finance receivables:
60-89 days past due	$	31	$	25	$	9	$	—	$	65
90-119 days past due	25		16		5		—		46
120-149 days past due	24		13		4		—		41
150-179 days past due	23		12		4		—		39
180 days or more past due	2		3		13		—		18
Total delinquent finance receivables	105		69		35		—		209
Current	3,761		1,756		548		38		6,103
30-59 days past due	51		43		15		1		110
Total	$	3,917	$	1,868	$	598	$	39	$	6,422

December 31, 2014

Net finance receivables:
60-89 days past due	$	37	$	31	$	12	$	1	$	81
90-119 days past due	30		19		9		—		58
120-149 days past due	24		16		5		1		46
150-179 days past due	21		14		4		—		39
180 days or more past due	2		2		12		—		16
Total delinquent finance receivables	114		82		42		2		240
Current	3,661		1,839		565		45		6,110
30-59 days past due	56		58		18		1		133
Total	$	3,831	$	1,979	$	625	$	48	$	6,483

Nonperforming Finance Receivables

We also monitor finance receivable performance trends to evaluate the potential risk of future credit losses. At 90 days or more past due, we consider our finance receivables to be nonperforming. Once the finance receivables are considered as nonperforming, we consider them to be at increased risk for credit loss.

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Our performing and nonperforming net finance receivables by type were as follows:



(dollars in millions)	Personal Loans		SpringCastle Portfolio		Real Estate Loans		Retail Sales Finance		Total

March 31, 2015

Performing	$	3,843	$	1,824	$	572	$	39	$	6,278
Nonperforming	74		44		26		—		144
Total	$	3,917	$	1,868	$	598	$	39	$	6,422

December 31, 2014

Performing	$	3,754	$	1,928	$	595	$	47	$	6,324
Nonperforming	77		51		30		1		159
Total	$	3,831	$	1,979	$	625	$	48	$	6,483

PURCHASED CREDIT IMPAIRED FINANCE RECEIVABLES

As a result of the significance of the ownership interest acquired by FCFI Acquisition LLC, an affiliate of Fortress (the “Fortress Acquisition”), we revalued our assets and liabilities based on their fair value at the date of the Fortress Acquisition, November 30, 2010, in accordance with business combination standards (“push-down accounting”) and adjusted the carrying value of our finance receivables (the “FA Loans”) to their fair value.

In connection with a joint venture acquisition of the SpringCastle Portfolio (the “SCP loans”) on April 1, 2013, SHI owns a 47% equity interest in the SCP Loans, which were determined to be credit impaired on the date of purchase.

We report the carrying amount (which initially was the fair value) of our purchased credit impaired finance receivables in net finance receivables, less allowance for finance receivable losses or in finance receivables held for sale as discussed below.

At March 31, 2015 and December 31, 2014 , finance receivables held for sale totaled $199 million and $205 million , respectively. See Note 6 for further information on our finance receivables held for sale, which consist of our non-core real estate loans. Finance receivables held for sale include purchased credit impaired real estate loans, as well as TDR real estate loans. Therefore, we are presenting the financial information for our purchased credit impaired finance receivables and TDR finance receivables by finance receivables held for investment and finance receivables held for sale in the tables below. The financial data related to finance receivables held for sale in the following tables were immaterial during the first quarter of 2014 since the loans were transferred and sold within the same month.

Information regarding our purchased credit impaired finance receivables held for investment and held for sale were as follows:



(dollars in millions)	SCP Loans		FA Loans		Total

March 31, 2015

Carrying amount, net of allowance (a)	$	309	$	90	$	399
Outstanding balance (b)	587		147		734
Allowance for purchased credit impaired finance receivable losses	—		5		5

December 31, 2014

Carrying amount, net of allowance (a)	$	340	$	93	$	433
Outstanding balance (b)	628		151		779
Allowance for purchased credit impaired finance receivable losses	—		5		5

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(a)	The carrying amount of purchased credit impaired FA Loans at March 31, 2015 and December 31, 2014 includes $66 million and $68 million , respectively, of purchased credit impaired finance receivables held for sale.


(b)	The outstanding balance of purchased credit impaired FA Loans at March 31, 2015 and December 31, 2014 includes $97 million and $99 million , respectively, of purchased credit impaired finance receivables held for sale.

The allowance for purchased credit impaired finance receivable losses at March 31, 2015 and December 31, 2014 , reflected the net carrying value of these purchased credit impaired finance receivables being higher than the present value of the expected cash flows.

Changes in accretable yield for purchased credit impaired finance receivables held for investment and held for sale were as follows:



(dollars in millions)	SCP Loans			FA Loans			Total

Three Months Ended March 31, 2015

Balance at beginning of period	$	541		$	19		$	560
Accretion (a)	(24		)	(3		)	(27		)
Disposals of finance receivables (b)	(12		)	—			(12		)
Balance at end of period	$	505		$	16		$	521

Three Months Ended March 31, 2014

Balance at beginning of period	$	325		$	772		$	1,097
Accretion	(20		)	(29		)	(49		)
Transfers due to finance receivables sold	—			(57		)	(57		)
Disposals of finance receivables (b)	(11		)	(6		)	(17		)
Balance at end of period	$	294		$	680		$	974


(a)	Accretion on our purchased credit impaired FA Loans for the three months ended March 31, 2015 includes $2 million of accretion on purchased credit impaired finance receivables held for sale, which is reported as interest income on finance receivables held for sale originated as held for investment.


(b)	Disposals of finance receivables represent finance charges forfeited due to purchased credit impaired finance receivables charged off during the period.

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TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES

Information regarding TDR finance receivables held for investment and held for sale were as follows:



(dollars in millions)	Personal Loans		SpringCastle Portfolio		Real Estate Loans		Total

March 31, 2015

TDR gross finance receivables (a) (b)	$	27	$	12	$	194	$	233
TDR net finance receivables (c)	26		11		195		232
Allowance for TDR finance receivable losses	3		3		31		37

December 31, 2014

TDR gross finance receivables (a) (b)	$	22	$	11	$	196	$	229
TDR net finance receivables (c)	22		10		196		228
Allowance for TDR finance receivable losses	1		3		32		36


(a)	As defined earlier in this Note.


(b)	TDR real estate loan gross finance receivables at March 31, 2015 and December 31, 2014 include $90 million and $ 91 million , respectively, of TDR finance receivables held for sale.


(c)	TDR real estate loan net finance receivables at March 31, 2015 and December 31, 2014 include $90 million and $ 91 million , respectively, of TDR finance receivables held for sale.

We have no commitments to lend additional funds on our TDR finance receivables.

TDR average net receivables held for investment and held for sale and finance charges recognized on TDR finance receivables held for investment and held for sale were as follows:



(dollars in millions)	Personal Loans		SpringCastle Portfolio		Real Estate Loans		Total

Three Months Ended March 31, 2015

TDR average net receivables (a)	$	25	$	11	$	195	$	231
TDR finance charges recognized (b)	1		—		3		4

Three Months Ended March 31, 2014

TDR average net receivables	$	13	$	1	$	1,427	$	1,441
TDR finance charges recognized	—		—		18		18


(a)	TDR real estate loan average net receivables for the three months ended March 31, 2015 include $90 million of TDR average net receivables held for sale.


(b)	TDR real estate loan finance charges recognized for the three months ended March 31, 2015 include $1 million of interest income on TDR finance receivables held for sale.

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Information regarding the new volume of the TDR finance receivables held for investment and held for sale were as follows:



(dollars in millions)	Personal Loans		SpringCastle Portfolio		Real Estate Loans		Total

Three Months Ended March 31, 2015

Pre-modification TDR net finance receivables (a)	$	9	$	2	$	4	$	15
Post-modification TDR net finance receivables (a)	$	8	$	2	$	4	$	14
Number of TDR accounts (b)	1,864		195		78		2,137

Three Months Ended March 31, 2014

Pre-modification TDR net finance receivables	$	3	$	1	$	103	$	107
Post-modification TDR net finance receivables	$	2	$	1	$	94	$	97
Number of TDR accounts	662		126		994		1,782


(a)	TDR real estate loan net finance receivables for the three months ended March 31, 2015 include less than $1 million of pre-modification and post-modification TDR net finance receivables held for sale.


(b)	Number of new TDR real estate loan accounts for the three months ended March 31, 2015 includes 9 new TDR accounts that were held for sale.

Net finance receivables held for investment and held for sale that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause the TDR finance receivables to be considered nonperforming (90 days or more past due) were as follows:



(dollars in millions)	Personal Loans		SpringCastle Portfolio		Real Estate Loans		Total

Three Months Ended March 31, 2015

TDR net finance receivables (a) (b) (c)	$	—	$	—	$	1	$	1
Number of TDR accounts (b)	57		10		18		85

Three Months Ended March 31, 2014

TDR net finance receivables (a) (c)	$	—	$	—	$	16	$	16
Number of TDR accounts	15		—		229		244


(a)	Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted.


(b)	Includes 9 TDR real estate loan accounts totaling less than $1 million that were held for sale.


(c)	TDR personal loans for the three months ended March 31, 2015 and 2014 and TDR SpringCastle Portfolio for the three months ended March 31, 2015 that defaulted during the previous 12 month period were less than $ 1 million and, therefore, are not quantified in the table above.

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5. Allowance for Finance Receivable Losses

Changes in the allowance for finance receivable losses by finance receivable type were as follows:



(dollars in millions)	Personal Loans			SpringCastle Portfolio			Real Estate Loans			Retail Sales Finance			Consolidated Total

Three Months Ended March 31, 2015

Balance at beginning of period	$	132		$	3		$	40		$	1		$	176
Provision for finance receivable losses	56			27			4			—			87
Charge-offs	(62		)	(30		)	(6		)	(1		)	(99		)
Recoveries	8			3			1			1			13
Balance at end of period	$	134		$	3		$	39		$	1		$	177

Three Months Ended March 31, 2014

Balance at beginning of period	$	95		$	1		$	235		$	2		$	333
Provision for finance receivable losses	47			53			59			2			161
Charge-offs	(44		)	(57		)	(28		)	(1		)	(130		)
Recoveries (a)	4			4			4			—			12
Reduction in the carrying value of real estate loans transferred to finance receivables held for sale (b)	—			—			(10		)	—			(10		)
Balance at end of period	$	102		$	1		$	260		$	3		$	366


(a)	Recoveries during the three months ended March 31, 2014 included $2 million of real estate loan recoveries resulting from a sale of previously charged-off real estate loans in March 2014.


(b)	During the first quarter of 2014, we reduced the carrying value of certain real estate loans to $825 million as a result of the transfer of these loans from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future.

Included in the allowance for finance receivable losses are allowances associated with securitizations that totaled $76 million at March 31, 2015 and $72 million at December 31, 2014 . See Note 10 for further discussion regarding our securitization transactions.

The carrying value charged-off for purchased credit impaired loans was as follows:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Charged-off against provision for finance receivable losses:
SCP Loans	$	7	$	19
FA Loans gross charge-offs*	—		6


*	Represents additional impairment recognized, subsequent to the establishment of the pools of purchased credit impaired loans, related to loans that have been foreclosed and transferred to real estate owned status.

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The allowance for finance receivable losses and net finance receivables by type and by impairment method were as follows:



(dollars in millions)	Personal Loans		SpringCastle Portfolio		Real Estate Loans		Retail Sales Finance		Total

March 31, 2015

Allowance for finance receivable losses for finance receivables:
Collectively evaluated for impairment	$	131	$	—	$	3	$	1	$	135
Acquired with deteriorated credit quality (purchased credit impaired finance receivables)	—		—		5		—		5
Individually evaluated for impairment (TDR finance receivables)	3		3		31		—		37
Total	$	134	$	3	$	39	$	1	$	177

Finance receivables:
Collectively evaluated for impairment	$	3,891	$	1,548	$	463	$	39	$	5,941
Purchased credit impaired finance receivables	—		309		30		—		339
TDR finance receivables	26		11		105		—		142
Total	$	3,917	$	1,868	$	598	$	39	$	6,422

December 31, 2014

Allowance for finance receivable losses for finance receivables:
Collectively evaluated for impairment	$	131	$	—	$	3	$	1	$	135
Purchased credit impaired finance receivables	—		—		5		—		5
TDR finance receivables	1		3		32		—		36
Total	$	132	$	3	$	40	$	1	$	176

Finance receivables:
Collectively evaluated for impairment	$	3,809	$	1,629	$	490	$	48	$	5,976
Purchased credit impaired finance receivables	—		340		30		—		370
TDR finance receivables	22		10		105		—		137
Total	$	3,831	$	1,979	$	625	$	48	$	6,483

6. Finance Receivables Held for Sale

We report finance receivables held for sale of $199 million at March 31, 2015 and $205 million at December 31, 2014 , which are carried at the lower of cost or fair value and secured by first mortgages. We used the aggregate basis to determine the lower of cost or fair value of the finance receivables held for sale since the underlying real estate loans were presented to the buyers on a portfolio basis. We also separately present the interest income on our finance receivables held for sale as interest income on finance receivables held for sale originated as held for investment on our interim consolidated statements of operations, which totaled $4 million during each of the three months ended March 31, 2015 and 2014 .

We did not have any transfer activity to or from finance receivables held for sale during the first quarter of 2015 .

On March 1, 2014, we transferred $825 million of real estate loans, (after deducting allowance for finance receivable losses) from held for investment to held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. On March 31, 2014, we sold the finance receivables held for sale totaling $815 million and recorded a net gain of $55 million .

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7. Investment Securities

AVAILABLE-FOR-SALE SECURITIES

Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type were as follows:



(dollars in millions)	Cost/ Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value

March 31, 2015

Fixed maturity available-for-sale securities:
Bonds:
U.S. government and government sponsored entities	$	30	$	2	$	—		$	32
Obligations of states, municipalities, and political subdivisions	100		2		(1		)	101
Certificates of deposit and commercial paper (a)	1		—		—			1
Corporate debt	291		13		—			304
Mortgage-backed, asset-backed, and collateralized:
Residential mortgage-backed securities (“RMBS”)	115		1		—			116
Commercial mortgage-backed securities (“CMBS”)	42		—		—			42
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”)	58		—		—			58
Total	637		18		(1		)	654
Preferred stock	8		—		—			8
Other long-term investments	1		—		—			1
Total (b)	$	646	$	18	$	(1	)	$	663

December 31, 2014

Fixed maturity available-for-sale securities:
Bonds:
U.S. government and government sponsored entities	$	61	$	3	$	—		$	64
Obligations of states, municipalities, and political subdivisions	99		3		—			102
Certificates of deposit and commercial paper (a)	3		—		—			3
Corporate debt	256		12		(1		)	267
Mortgage-backed, asset-backed, and collateralized:
RMBS	71		2		—			73
CMBS	25		—		(1		)	24
CDO/ABS	63		—		—			63
Total	578		20		(2		)	596
Preferred stock	7		—		—			7
Other long-term investments	1		—		—			1
Total (b)	$	586	$	20	$	(2	)	$	604


(a)	Includes certificates of deposit totaling $1 million and $2 million pledged as collateral, primarily to support bank lines of credit at March 31, 2015 and December 31, 2014 , respectively.


(b)	Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of $1 million at March 31, 2015 and December 31, 2014 , which is classified as a restricted investment and carried at cost.

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As of March 31, 2015 and December 31, 2014 , we had no available-for-sale securities with other-than-temporary impairments recognized in accumulated other comprehensive income or loss.

Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position were as follows:



	Less Than 12 Months					12 Months or Longer				Total
(dollars in millions)	Fair Value		Unrealized Losses *			Fair Value		Unrealized Losses *		Fair Value		Unrealized Losses

March 31, 2015

Bonds:
Obligations of states, municipalities, and political subdivisions	$	19	$	(1	)	$	6	$	—	$	25	$	(1	)
Corporate debt	30		—			5		—		35		—
RMBS	43		—			—		—		43		—
CMBS	17		—			5		—		22		—
CDO/ABS	21		—			—		—		21		—
Total	130		(1		)	16		—		146		(1		)
Preferred stock	6		—			—		—		6		—
Total	$	136	$	(1	)	$	16	$	—	$	152	$	(1	)

December 31, 2014

Bonds:
U.S. government and government sponsored entities	$	—	$	—		$	1	$	—	$	1	$	—
Obligations of states, municipalities, and political subdivisions	27		—			1		—		28		—
Corporate debt	36		(1		)	6		—		42		(1		)
RMBS	9		—			—		—		9		—
CMBS	16		(1		)	2		—		18		(1		)
CDO/ABS	46		—			—		—		46		—
Total	134		(2		)	10		—		144		(2		)
Preferred stock	6		—			—		—		6		—
Total	$	140	$	(2	)	$	10	$	—	$	150	$	(2	)


*	Unrealized losses on certain available-for-sale securities for the three months ended March 31, 2015 and 2014 were less than $ 1 million and, therefore, are not quantified in the table above.

We continue to monitor unrealized loss positions for potential impairments. During the three months ended March 31, 2015 and 2014 , we did not recognize any other-than-temporary impairment credit loss write-downs to investment revenues.

During the three months ended March 31, 2015 and 2014 , there were no additions or reductions in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities.

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The fair values of available-for-sale securities sold or redeemed and the resulting realized gains, realized losses, and net realized gains were as follows:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Fair value	$	76		$	57

Realized gains	$	7		$	2
Realized losses	(1		)	—
Net realized gains	$	6		$	2

Contractual maturities of fixed-maturity available-for-sale securities at March 31, 2015 were as follows:



(dollars in millions)	Fair Value		Amortized Cost

Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
Due in 1 year or less	$	39	$	39
Due after 1 year through 5 years	195		191
Due after 5 years through 10 years	112		104
Due after 10 years	92		88
Mortgage-backed, asset-backed, and collateralized securities	216		215
Total	$	654	$	637

Actual maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations. We may sell investment securities before maturity to achieve corporate requirements and investment strategies.

The fair value of bonds on deposit with insurance regulatory authorities totaled $12 million at March 31, 2015 and December 31, 2014 .

TRADING SECURITIES

The fair value of trading securities by type was as follows:



(dollars in millions)	March 31, 2015		December 31, 2014

Fixed maturity trading securities:
Bonds:
U.S. government and government sponsored entities	$	1,079	$	303
Obligations of states, municipalities, and political subdivisions	7		14
Certificates of deposit and commercial paper	—		238
Non-U.S. government and government sponsored entities	—		20
Corporate debt	529		1,056
Mortgage-backed, asset-backed, and collateralized:
RMBS	15		36
CMBS	120		151
CDO/ABS	322		512
Total	$	2,072	$	2,330

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The net unrealized and realized gains on our trading securities, which we report in investment revenues, were as follows:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Net unrealized gains on trading securities held at period end	$	3	$	—
Net realized gains on trading securities sold or redeemed	—		—
Total	$	3	$	—

8. Transactions with Affiliates of Fortress or AIG

SUBSERVICING AGREEMENT

Nationstar Mortgage LLC (“Nationstar”) subservices the real estate loans of certain indirect subsidiaries (collectively, the “Owners”). Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. The Owners paid Nationstar subservicing fees of less than $1 million for the three months ended March 31, 2015 and $2 million for the three months ended March 31, 2014.

As a result of the sales of our real estate loans during 2014 (some of which were serviced by Nationstar) and the sale of certain mortgage servicing rights in 2014 our exposure to these affiliated services is reduced.

INVESTMENT MANAGEMENT AGREEMENT

Logan Circle Partners, L.P. (“Logan Circle”) provides investment management services for our investments. Logan Circle is a wholly owned subsidiary of Fortress. Costs and fees incurred for these investment management services were under $1 million for the three months ended March 31, 2015 and 2014 .

REINSURANCE AGREEMENTS

Merit Life Insurance Co. (“Merit”), our indirect wholly owned subsidiary, enters into reinsurance agreements with subsidiaries of AIG, for reinsurance of various group annuity, credit life, and credit accident and health insurance where Merit reinsures the risk of loss. The reserves for this business fluctuate over time and, in some instances, are subject to recapture by the insurer. Reserves recorded by Merit for reinsurance agreements with subsidiaries of AIG totaled $44 million at March 31, 2015 and December 31, 2014 .

INSURANCE COVERAGE

We hold various insurance policies with AIG subsidiaries covering liabilities of directors and officers, errors and omissions, lawyers, employment practices, fiduciary, and fidelity bond. Premium expenses on these policies were under $1 million for the three months ended March 31, 2015 and 2014 .

JOINT VENTURE

Certain subsidiaries of New Residential Investment Corp. (“NRZ”), own a 30% equity interest in the joint venture that acquired the SpringCastle Portfolio, in which we own a 47% equity interest. NRZ is managed by an affiliate of Fortress.

THIRD STREET DISPOSITION

On March 6, 2014, we entered into an agreement to sell, subject to certain closing conditions, all of our interest in the mortgage-backed retained certificates related to a securitization transaction completed in 2009 to Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPFS”). Concurrently, NRZ and MLPFS entered into an agreement pursuant to which NRZ agreed to purchase approximately 75% of these retained certificates. NRZ is managed by an affiliate of Fortress.

MSR SALE

SFC and MorEquity, Inc. (“MorEquity”), a wholly owned subsidiary of SFC, entered into an agreement, dated and effective August 1, 2014, to sell the servicing rights of the mortgage loans primarily underlying the mortgage securitizations completed during 2011 through 2013 to Nationstar for a purchase price of $39 million (the “MSR Sale”). From the closing of the MSR

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Sale on August 29, 2014, until the servicing transfer on September 30, 2014, we continued to service certain loans on behalf of Nationstar under an interim servicing agreement. At March 31, 2015 and December 31, 2014 , the receivable from Nationstar for our interim servicing fees totaled $1 million . Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar.

9. Long-term Debt

Principal maturities of long-term debt (excluding projected securitization repayments by period) by type of debt at March 31, 2015 were as follows:



(dollars in millions)	Retail Notes		Medium Term Notes		Securitizations		Junior Subordinated Debt			Total

Interest rates (a)	6.50%-7.50%		5.25%-8.25%		2.41%-6.82%		6.00		%

Second quarter 2015	$	7	$	—	$	—	$	—		$	7
Third quarter 2015	24		—		—		—			24
Fourth quarter 2015	—		750		—		—			750
First quarter 2016	—		—		—		—			—
Remainder of 2016	—		375		—		—			375
2017	—		1,902		—		—			1,902
2018	—		—		—		—			—
2019	—		700		—		—			700
2020-2067	—		1,250		—		350			1,600
Securitizations (b)	—		—		4,873		—			4,873
Total principal maturities	$	31	$	4,977	$	4,873	$	350		$	10,231

Total carrying amount (c)	$	30	$	4,555	$	4,878	$	172		$	9,635


(a)	The interest rates shown are the range of contractual rates in effect at March 31, 2015 .


(b)	Securitizations are not included in above maturities by period due to their variable monthly repayments. See Note 10 for further information on our long-term debt associated with securitizations.

(c)

The net carrying amount of our long-term debt associated with certain securitizations that were either 1) issued at a premium or discount or 2) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition or 3) recorded at fair value on a recurring basis in circumstances when the embedded derivative within the securitization structure cannot be separately accounted for at fair value.

GUARANTY AGREEMENTS

On December 3, 2014, SHI entered into an Indenture and First Supplemental Indenture pursuant to which it agreed to fully and unconditionally guarantee the payments of principal, premium (if any) and interest on $700 million of 5.25% of Senior Notes due 2019 issued by SFC. As of March 31, 2015 , approximately $700 million aggregate principal amount of senior notes were outstanding.

On December 30, 2013, SHI entered into Guaranty Agreements whereby it agreed to fully and unconditionally guarantee the payments of principal, premium (if any), and interest on approximately $5.2 billion aggregate principal amount of senior notes on a senior basis and $350 million aggregate principal amount of a junior subordinated debenture (collectively, the “notes”) on a junior subordinated basis issued by SFC. The notes consist of the following: 8.25% Senior Notes due 2023; 7.75% Senior Notes due 2021; 6.00% Senior Notes due 2020; a 60 -year junior subordinated debenture; and all senior notes outstanding on December 30, 2013, issued pursuant to the Indenture dated as of May 1, 1999 (the “1999 Indenture”), between SFC and Wilmington Trust, National Association (the successor trustee to Citibank N.A.). The 60 -year junior subordinated debenture underlies the trust preferred securities sold by a trust sponsored by SFC. On December 30, 2013, SHI entered into a Trust Guaranty Agreement whereby it agreed to fully and unconditionally guarantee the related payment obligations under the trust preferred securities. As of March 31, 2015 , approximately $5.0 billion aggregate principal amount of senior notes, including

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$3.1 billion aggregate principal amount of senior notes under the 1999 Indenture, and $350 million aggregate principal amount of a junior subordinated debenture were outstanding.

10. Variable Interest Entities

As part of our overall funding strategy and as part of our efforts to support our liquidity from sources other than our traditional capital market sources, we have transferred certain finance receivables to VIEs for securitization transactions. Since these transactions involve securitization trusts required to be consolidated, the securitized assets and related liabilities are included in our condensed consolidated financial statements and are accounted for as secured borrowings. As a result of the 2014 sales of the Company’s beneficial interests in the mortgage-backed retained certificates related to its previous mortgage securitization transactions, we deconsolidated the underlying real estate loans and previously issued securitized interests which were reported in long-term debt.

CONSOLIDATED VIES

We evaluated the securitization trusts and determined that these entities are VIEs of which we are the primary beneficiary; therefore, we consolidated such entities. We are deemed to be the primary beneficiaries of these VIEs because we have the ability to direct the activities of each VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses and the right to receive benefits that are potentially significant to the VIE. Such ability stems from SHI’s and/or its affiliates’ contractual right to service the securitized finance receivables. Our retained subordinated notes and residual interest trust certificates expose us to potentially significant losses and potentially significant returns.

The remaining asset-backed securities issued by the securitization trusts are supported by the expected cash flows from the underlying securitized finance receivables. Cash inflows from these finance receivables are distributed to investors and service providers in accordance with each transaction’s contractual priority of payments (“waterfall”) and, as such, most of these inflows must be directed first to service and repay each trust’s senior notes or certificates held principally by third-party investors. The holders of the asset-backed securities have no recourse to the Company if the cash flows from the underlying qualified securitized assets are not sufficient to pay all principal and interest on the asset-backed securities. After these senior obligations are extinguished, substantially all cash inflows will be directed to the subordinated notes until fully repaid and, thereafter, to the residual interest that we own in each trust. We retain interests in these securitization transactions, including subordinated securities issued by the VIEs and residual interests. We retain credit risk in the securitizations because our retained interests include the most subordinated interest in the securitized assets, which are the first to absorb credit losses on the securitized assets. We expect that any credit losses in the pools of securitized assets will likely be limited to our subordinated and residual retained interests. We have no obligation to repurchase or replace qualified securitized assets that subsequently become delinquent or are otherwise in default.

The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts were as follows:



(dollars in millions)	March 31, 2015		December 31, 2014

Assets
Finance receivables:
Personal loans	$	2,838	$	1,853
SpringCastle Portfolio	1,868		1,979
Allowance for finance receivable losses	76		72
Restricted cash and cash equivalents	330		210

Liabilities
Long-term debt	$	4,878	$	3,644

Renewal of Sumner Brook 2013-VFN1 Securitization

On January 16, 2015, we amended the note purchase agreement with Sumner Brook Funding Trust 2013-VFN1 (the “Sumner Brook 2013-VFN1 Trust”) to extend the two -year funding period to a three -year funding period. Following the three -year funding period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying

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personal loans and will be due and payable in full in August 2024. The maximum principal balance of variable funding notes that can be issued remained at $350 million . No amounts have been funded.

2015-A Securitization

On February 26, 2015, we completed a private securitization transaction in which a wholly owned special purpose vehicle of SFC sold $1.2 billion of notes backed by personal loans held by Springleaf Funding Trust 2015-A (the “2015-A Trust”) at a 3.58% weighted average yield. We sold the asset-backed notes for $1.2 billion , after the price discount but before expenses and a $12 million interest reserve requirement.

Sale of SpringCastle 2014-A Notes

On March 9, 2015, Springleaf Acquisition Corporation (“SAC”) agreed to sell $232 million and $131 million principal amount of the previously retained Class C and Class D SpringCastle 2014-A Notes, respectively, to an unaffiliated third party at a premium to the principal balance. The sale was completed on March 16, 2015.

Amendment to Whitford Brook 2014-VFN1 Securitization

On March 24, 2015, we amended the Sale and Servicing Agreement relating to the Whitford Brook Funding Trust 2014-VFN1 (the “Whitford Brook 2014-A Trust”) to no longer require a $100 million minimum balance drawn under the variable funding notes, which are backed by personal loans acquired from subsidiaries of SFC. On March 25, 2015, we paid down the balance of $100 million .

VIE Interest Expense

Other than our retained subordinate and residual interests in the remaining consolidated securitization trusts, we are under no obligation, either contractually or implicitly, to provide financial support to these entities. Consolidated interest expense related to our VIEs for the three months ended March 31, 2015 totaled $38 million , compared to $67 million for the three months ended March 31, 2014 .

DECONSOLIDATED VIES

As a result of the sales of the mortgage-backed retained certificates during 2014, we deconsolidated the securitization trusts holding the underlying real estate loans and previously issued securitized interests which were reported in long-term debt. The total carrying value of these real estate loans as of the sale dates was $5.2 billion . During 2014, we established a reserve for sales recourse obligations of $7 million related to these sales. At March 31, 2015 , this reserve totaled $7 million . We had no repurchase activity associated with these sales as of March 31, 2015 . However, we will continue to monitor any repurchase activity in the future and will adjust the reserve accordingly.

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11. Earnings Per Share

The computation of earnings per share was as follows:



(dollars in millions except earnings per share)	Three Months Ended March 31,
(dollars in millions except earnings per share)	2015		2014

Numerator (basic and diluted):
Net income attributable to Springleaf Holdings, Inc.	$	—	$	52
Denominator:
Weighted average number of shares outstanding (basic)	115,027,470		114,788,439
Effect of dilutive securities *	—		356,419
Weighted average number of shares outstanding (diluted)	115,027,470		115,144,858
Earnings per share:
Basic	$	—	$	0.46
Diluted	$	—	$	0.45


*	We have excluded 597,477 performance shares and 405,185 service shares in the diluted earnings per share calculation for the three months ended March 31, 2015 , because these shares would be anti-dilutive, which could impact the earnings per share calculation in the future.

Basic earnings per share is computed by dividing net income or loss by the weighted-average number of shares outstanding during each period. Diluted earnings per share is computed based on the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares represent outstanding unvested restricted stock units (“RSUs”) and awards.

12. Accumulated Other Comprehensive Income

Changes in accumulated other comprehensive income were as follows:



(dollars in millions)	Unrealized Gains (Losses) Investment Securities			Retirement Plan Liabilities Adjustments			Foreign Currency Translation Adjustments		Total Accumulated Other Comprehensive Income (Loss)

Three Months Ended March 31, 2015

Balance at beginning of period	$	12		$	(13	)	$	4	$	3
Other comprehensive income before reclassifications	3			—			1		4
Reclassification adjustments from accumulated other comprehensive income	(4		)	—			—		(4		)
Balance at end of period	$	11		$	(13	)	$	5	$	3

Three Months Ended March 31, 2014

Balance at beginning of period	$	4		$	20		$	4	$	28
Other comprehensive income before reclassifications	6			—			—		6
Reclassification adjustments from accumulated other comprehensive income	(1		)	—			—		(1		)
Balance at end of period	$	9		$	20		$	4	$	33

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Reclassification adjustments from accumulated other comprehensive income to the applicable line item on our condensed consolidated statements of operations were as follows:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Unrealized gains on investment securities:
Reclassification from accumulated other comprehensive income to investment revenues, before taxes	$	6		$	2
Income tax effect	(2		)	(1		)
Reclassification from accumulated other comprehensive income to investment revenues, net of taxes	$	4		$	1

13. Income Taxes

At March 31, 2015 , we had a net deferred tax liability of $138 million , compared to $148 million at December 31, 2014 . The decrease in the net deferred tax liability was primarily due to purchase accounting for debt writedown. The impact to our uncertain tax positions was immaterial.

The effective tax rate for the three months ended March 31, 2015 was 18.5% compared to 30.8% for the same period in 2014 . The effective tax rate for the three months ended March 31, 2015 differed from the federal statutory rate primarily due to the effect of the non-controlling interest in our joint venture. The effective tax rate for the three months ended March 31, 2014 differed from the federal statutory rate primarily due to the effect of the non-controlling interest in our joint venture.

We have been contacted by the Internal Revenue Service for the examination of our U.S. Federal tax return for the year 2013. Management believes it has adequately provided for taxes for such year.

14. Contingencies

LEGAL CONTINGENCIES

In the normal course of business, the Company has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation arising in connection with its activities. Some of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. While we will continue to identify certain legal actions where we believe a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that we have not yet been notified of or are not yet determined to be probable or reasonably possible and reasonably estimable.

We contest liability and/or the amount of damages, as appropriate, in each pending matter. Where available information indicates that it is probable that a liability had been incurred at the date of the condensed consolidated financial statements and we can reasonably estimate the amount of that loss, we accrue the estimated loss by a charge to income. In many actions, however, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the amount of any loss. In addition, even where loss is reasonably possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss.

For certain legal actions, we cannot reasonably estimate such losses, particularly for actions that are in their early stages of development or where plaintiffs seek substantial or indeterminate damages. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal questions relevant to the actions in question, before a loss or additional loss or range of loss or additional loss can be reasonably estimated for any given action.

For certain other legal actions, we can estimate reasonably possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued, but do not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on our condensed consolidated financial statements as a whole.

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SALES RECOURSE OBLIGATIONS

During 2014, we established a reserve for sales recourse obligations of $23 million related to the real estate loan sales. At March 31, 2015 , our reserve for sales recourse obligations totaled $24 million , of which $23 million related to the real estate loan sales in 2014. During the three months ended March 31, 2015 and 2014, we had no repurchase activity or recourse losses associated with the real estate loan sales in 2014 or other prior sales of finance receivables. At March 31, 2015 , there were no material recourse requests that management believes will not be covered by the reserve. However, we will continue to monitor any repurchase activity in the future and will adjust the reserve accordingly.

It is inherently difficult to determine whether any recourse losses are probable or even reasonably possible or to estimate the amounts of any losses. In addition, even where recourse losses are reasonably possible or exposure to such losses exists in excess of the liability already accrued, it is not always possible to reasonably estimate the size of the possible recourse losses or range of losses.

PAYMENT PROTECTION INSURANCE

Our United Kingdom subsidiary provides payments of compensation to its customers who have made claims concerning Payment Protection Insurance (“PPI”) policies sold in the normal course of business by insurance intermediaries. On April 20, 2011, the High Court in the United Kingdom handed down judgment supporting the Financial Services Authority (now known as the Financial Conduct Authority) (“FCA”) guidelines on the treatment of PPI complaints. In addition, the FCA issued a guidance consultation paper in March 2012 on the PPI customer contact letters. As a result, we have concluded that there are certain circumstances where customer contact and/or redress is appropriate; therefore, this activity is ongoing. The total reserves related to the estimated PPI claims were $13 million at March 31, 2015 and $14 million at December 31, 2014 . We do not believe that any additional losses related to PPI claims in excess of the amounts accrued will have a material adverse effect on our condensed consolidated financial statements as a whole.

STOCK PURCHASE AGREEMENT

As discussed in Note 1 , on March 2, 2015, SHI entered into a Stock Purchase Agreement with Citigroup to acquire OneMain for an aggregate purchase price of $4.25 billion . Under the Stock Purchase Agreement, we are required to take all action necessary to resolve any objection that antitrust enforcement authorities may assert with respect to the Proposed Acquisition. If the Stock Purchase Agreement is terminated as a result of the failure to obtain antitrust approvals, we will be required to pay Citigroup a termination fee of $213 million . The Proposed Acquisition is expected to close in the third quarter of 2015, although there can be no assurance that the Proposed Acquisition will close or, if it does, when the actual closing will occur.

15. Benefit Plans

The following table presents the components of net periodic benefit cost with respect to our defined benefit pension plans:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Pension

Components of net periodic benefit cost:
Interest cost	$	4		$	4
Expected return on assets	(5		)	(4		)
Net periodic benefit cost	$	(1	)	$	—

The components of net periodic benefit cost with respect to our post retirement plan were less than $1 million for the three months ended March 31, 2015 and 2014 and, therefore, were not included in the table above.

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16. Segment Information

Our segments coincide with how our businesses are managed. At March 31, 2015 , our three segments include:


•	Consumer and Insurance;


•	Acquisitions and Servicing; and


•	Real Estate.

When we initially defined our operating segments in early 2013, we presented Consumer and Insurance as two distinct reporting segments. However, over the course of 2013 and into 2014, management has shifted its strategy for the Insurance segment toward organic growth primarily as an ancillary product complementing our consumer lending activities and has been increasingly viewing and managing the Insurance segment together with Consumer. As a result of the changes in strategy and the way that management views the insurance business of the Company, we began presenting them as one segment, effective December 31, 2014. To conform to the new segment alignment, we have revised our prior period segment disclosures.

Management considers Consumer and Insurance, and Acquisitions and Servicing as our “Core Consumer Operations” and Real Estate as our “Non-Core Portfolio.”

Our segments are managed as follows:

Core Consumer Operations

•

Consumer and Insurance — We originate and service personal loans (secured and unsecured) through two business divisions: branch operations and centralized operations and offer credit insurance (life insurance, accident and health insurance, and involuntary unemployment insurance), non-credit insurance, and ancillary products, such as warranty protection. Branch operations primarily conduct business in 27 states, which are our core operating states. Our centralized operations underwrite and process certain loan applications that we receive from our branch operations or through an internet portal. If the applicant is located near an existing branch (“in footprint”), our centralized operations make the credit decision regarding the application and then request, but do not require, the customer to visit a nearby branch for closing, funding and servicing. If the applicant is not located near a branch (“out of footprint”), our centralized operations originate the loan.

•

Acquisitions and Servicing — We service the SpringCastle Portfolio that we acquired through a joint venture in which we own a 47% equity interest. The SpringCastle Portfolio consists of unsecured loans and loans secured by subordinate residential real estate mortgages (which we service as unsecured loans due to the fact that the liens are subordinated to superior ranking security interests) and includes both closed-end accounts and open-end lines of credit. These loans vary in form and substance from our typical branch serviced loans and are in a liquidating status with no anticipation of new loan originations.

Non-Core Portfolio

•

Real Estate — We service and hold real estate loans secured by first or second mortgages on residential real estate. Real estate loans previously originated through our branch offices or previously acquired or originated through centralized distribution channels are serviced by: (i) MorEquity and subserviced by Nationstar; (ii) Select Portfolio Servicing, Inc.; or (iii) our centralized operations. Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar.

The remaining components (which we refer to as “Other”) consist of our other non-core, non-originating legacy operations, which are isolated by geographic market and/or distribution channel from our Core Consumer Operations and our Non-Core Portfolio. These operations include our legacy operations in 14 states where we have also ceased branch-based personal lending, our liquidating retail sales finance portfolio (including our retail sales finance accounts from our dedicated auto finance operation), our lending operations in Puerto Rico and the U.S. Virgin Islands, and the operations of our United Kingdom subsidiary.

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Due to the nature of the Fortress Acquisition, we applied push-down accounting. However, we report the operating results of our Core Consumer Operations, Non-Core Portfolio, and Other using the same accounting basis that we employed prior to the Fortress Acquisition, which we refer to as “historical accounting basis,” to provide a consistent basis for both management and other interested third parties to better understand the operating results of these segments. The historical accounting basis (which is a basis of accounting other than U.S. GAAP) also provides better comparability of the operating results of these segments to our competitors and other companies in the financial services industry. The historical accounting basis is not applicable to the Acquisitions and Servicing segment since this segment resulted from the purchase of the SpringCastle Portfolio subsequent to the Fortress Acquisition.

The “Push-down Accounting Adjustments” column in the following tables primarily consists of:


•	the accretion or amortization of the valuation adjustments on the applicable revalued assets and liabilities;


•	the difference in finance charges on our purchased credit impaired finance receivables compared to the finance charges on these finance receivables on a historical accounting basis;


•	the elimination of accretion or amortization of historical based discounts, premiums, and other deferred costs on our finance receivables and long-term debt;


•	the difference in provision for finance receivable losses required based upon the differences in historical accounting basis and push-down accounting basis of the finance receivables;


•	the acceleration of the accretion of the net discount or amortization of the net premium applied to long-term debt that we repurchase or repay;


•	the reversal of the remaining unaccreted push-down accounting basis for net finance receivables, less allowance for finance receivable losses established at the date of the Fortress Acquisition on finance receivables held for sale that we sold; and


•	the difference in the fair value of long-term debt based upon the differences between historical accounting basis where certain long-term debt components are marked-to-market on a recurring basis, and push-down accounting basis where long-term debt is no longer marked-to-market on a recurring basis.

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The following tables present information about the Company’s segments as well as reconciliations to the condensed consolidated financial statement amounts.



(dollars in millions)	Consumer and Insurance		Acquisitions and Servicing		Real Estate			Other			Eliminations			Push-down Accounting Adjustments			Consolidated Total

At or for the Three Months Ended March 31, 2015

Interest income	$	256	$	127	$	18		$	2		$	—		$	3		$	406
Interest expense	40		23		60			10			(5		)	30			158
Provision for finance receivable losses	56		27		2			—			—			2			87
Net interest income (loss) after provision for finance receivable losses	160		77		(44		)	(8		)	5			(29		)	161
Other revenues	51		19		3			—			(19		)	(3		)	51
Other expenses	146		29		7			5			(14		)	1			174
Income (loss) before provision for (benefit from) income taxes	65		67		(48		)	(13		)	—			(33		)	38
Income before provision for income taxes attributable to non-controlling interests	—		31		—			—			—			—			31
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Holdings, Inc.	$	65	$	36	$	(48	)	$	(13	)	$	—		$	(33	)	$	7

Assets	$	5,089	$	1,977	$	3,641		$	1,690		$	—		$	10		$	12,407



(dollars in millions)	Consumer and Insurance		Acquisitions and Servicing		Real Estate			Other			Eliminations			Push-down Accounting Adjustments			Consolidated Total

At or for the Three Months Ended March 31, 2014

Interest income	$	210	$	146	$	155		$	5		$	—		$	36		$	552
Interest expense	41		22		112			2			—			28			205
Provision for finance receivable losses	45		53		62			1			—			—			161
Net interest income (loss) after provision for finance receivable losses	124		71		(19		)	2			—			8			186
Other revenues	49		1		(65		)	1			(18		)	113			81
Other expenses	125		33		21			6			(18		)	1			168
Income (loss) before provision for (benefit from) income taxes	48		39		(105		)	(3		)	—			120			99
Income before provision for income taxes attributable to non-controlling interests	—		16		—			—			—			—			16
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Holdings, Inc.	$	48	$	23	$	(105	)	$	(3	)	$	—		$	120		$	83

Assets	$	4,138	$	2,553	$	7,388		$	910		$	—		$	(467	)	$	14,522

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17. Fair Value Measurements

The fair value of a financial instrument is the amount that would be received if an asset were to be sold or the amount that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The degree of judgment used in measuring the fair value of financial instruments generally correlates with the level of pricing observability. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Conversely, financial instruments traded in other-than-active markets or that do not have quoted prices have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. An other-than-active market is one in which there are few transactions, the prices are not current, price quotations vary substantially either over time or among market makers, or little information is released publicly for the asset or liability being valued. Pricing observability is affected by a number of factors, including the type of financial instrument, whether the financial instrument is listed on an exchange or traded over-the-counter or is new to the market and not yet established, the characteristics specific to the transaction, and general market conditions.

The following table summarizes the fair values and carrying values of our financial instruments and indicates the fair value hierarchy based on the level of inputs we utilized to determine such fair values:



	Fair Value Measurements Using						Total Fair Value		Total Carrying Value
(dollars in millions)	Level 1		Level 2		Level 3		Total Fair Value		Total Carrying Value

March 31, 2015

Assets
Cash and cash equivalents	$	2,421	$	—	$	—	$	2,421	$	2,421
Investment securities	—		2,730		6		2,736		2,736
Net finance receivables, less allowance for finance receivable losses	—		—		6,916		6,916		6,245
Finance receivables held for sale	—		—		203		203		199
Restricted cash and cash equivalents	344		—		—		344		344
Other assets:
Commercial mortgage loans	—		—		67		67		72
Escrow advance receivable	—		—		8		8		8
Receivables related to sales of real estate loans and related trust assets	—		27		—		27		36

Liabilities
Long-term debt	$	—	$	10,390	$	—	$	10,390	$	9,635

December 31, 2014

Assets
Cash and cash equivalents	$	879	$	—	$	—	$	879	$	879
Investment securities	—		2,926		9		2,935		2,935
Net finance receivables, less allowance for finance receivable losses	—		—		6,979		6,979		6,307
Finance receivables held for sale	—		—		209		209		205
Restricted cash and cash equivalents	218		—		—		218		218
Other assets:
Commercial mortgage loans	—		—		78		78		85
Escrow advance receivable	—		—		8		8		8
Receivables related to sales of real estate loans and related trust assets	—		67		—		67		79

Liabilities
Long-term debt	$	—	$	9,182	$	—	$	9,182	$	8,385

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FAIR VALUE MEASUREMENTS — RECURRING BASIS

The following table presents information about our assets and liabilities measured at fair value on a recurring basis and indicates the fair value hierarchy based on the levels of inputs we utilized to determine such fair value:



	Fair Value Measurements Using						Total Carried At Fair Value
(dollars in millions)	Level 1		Level 2		Level 3		Total Carried At Fair Value

March 31, 2015

Assets
Cash equivalents in mutual funds	$	1,165	$	—	$	—	$	1,165
Cash equivalents in certificates of deposit and commercial paper	—		1		—		1
Investment securities:
Available-for-sale securities:
Bonds:
U.S. government and government sponsored entities	—		32		—		32
Obligations of states, municipalities, and political subdivisions	—		101		—		101
Certificates of deposit and commercial paper	—		1		—		1
Corporate debt	—		300		4		304
RMBS	—		116		—		116
CMBS	—		42		—		42
CDO/ABS	—		58		—		58
Total	—		650		4		654
Preferred stock	—		8		—		8
Other long-term investments (a)	—		—		1		1
Total available-for-sale securities (b)	—		658		5		663
Trading securities:
Bonds:
U.S. government and government sponsored entities	—		1,079		—		1,079
Obligations of states, municipalities, and political subdivisions	—		7		—		7
Corporate debt	—		529		—		529
RMBS	—		15		—		15
CMBS	—		120		—		120
CDO/ABS	—		322		—		322
Total trading securities	—		2,072		—		2,072
Total investment securities	—		2,730		5		2,735
Restricted cash in mutual funds	322		—		—		322
Total	$	1,487	$	2,731	$	5	$	4,223

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	Fair Value Measurements Using						Total Carried At Fair Value
(dollars in millions)	Level 1		Level 2		Level 3		Total Carried At Fair Value

December 31, 2014

Assets
Cash equivalents in mutual funds	$	236	$	—	$	—	$	236
Cash equivalents in certificates of deposit and commercial paper	—		165		—		165
Investment securities:
Available-for-sale securities:
Bonds:
U.S. government and government sponsored entities	—		64		—		64
Obligations of states, municipalities, and political subdivisions	—		102		—		102
Certificates of deposit and commercial paper	—		3		—		3
Corporate debt	—		263		4		267
RMBS	—		73		—		73
CMBS	—		21		3		24
CDO/ABS	—		63		—		63
Total	—		589		7		596
Preferred stock	—		7		—		7
Other long-term investments (a)	—		—		1		1
Total available-for-sale securities (b)	—		596		8		604
Trading securities:
Bonds:
U.S. government and government sponsored entities	—		303		—		303
Obligations of states, municipalities, and political subdivisions	—		14		—		14
Certificates of deposit and commercial paper	—		238		—		238
Non-U.S. government and government sponsored entities	—		20		—		20
Corporate debt	—		1,056		—		1,056
RMBS	—		36		—		36
CMBS	—		151		—		151
CDO/ABS	—		512		—		512
Total trading securities	—		2,330		—		2,330
Total investment securities	—		2,926		8		2,934
Restricted cash in mutual funds	207		—		—		207
Total	$	443	$	3,091	$	8	$	3,542


(a)	Other long-term investments excludes an immaterial interest in a limited partnership that we account for using the equity method.


(b)	Common stocks not carried at fair value totaled $1 million at March 31, 2015 and December 31, 2014 and therefore have been excluded from the table above.

We had no transfers between Level 1 and Level 2 during the three months ended March 31, 2015 .

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The following table presents changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three months ended March 31, 2015 :



			Net gains (losses) included in:				Purchases, sales, issues, settlements		Transfers into Level 3		Transfers out of Level 3 *			Balance at end of period

(dollars in millions)	Balance at beginning of period		Other revenues		Other comprehensive income (loss)

Three Months Ended March 31, 2015

Investment securities:
Available-for-sale securities:
Bonds:
Corporate debt	$	4	$	—	$	—	$	—	$	—	$	—		$	4
CMBS	3		—		—		—		—		(3		)	—
Total	7		—		—		—		—		(3		)	4
Other long-term investments	1		—		—		—		—		—			1
Total	$	8	$	—	$	—	$	—	$	—	$	(3	)	$	5


*	During the three months ended March 31, 2015 , we transferred CMBS securities totaling $3 million out of Level 3 primarily related to the re-evaluated observability of pricing inputs.

The following table presents changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three months ended March 31, 2014 :



			Net gains (losses) included in:				Purchases, sales, issues, settlements (a)			Transfers into Level 3 (b)		Transfers out of Level 3		Balance at end of period

(dollars in millions)	Balance at beginning of period		Other revenues		Other comprehensive income (loss)

Three Months Ended March 31, 2014

Investment securities:
Available-for-sale securities:
Bonds:
Corporate debt	$	13	$	—	$	—	$	(4	)	$	—	$	—	$	9
CDO/ABS	1		—		—		—			—		—		1
Total	14		—		—		(4		)	—		—		10
Other long-term investments	1		—		—		—			—		—		1
Total available-for-sale securities	15		—		—		(4		)	—		—		11
Trading securities:
Bonds:
RMBS	—		—		—		—			1		—		1
CDO/ABS	7		—		—		—			—		—		7
Total trading securities	7		—		—		—			1		—		8
Total	$	22	$	—	$	—	$	(4	)	$	1	$	—	$	19


(a)	“Purchases, sales, issues, and settlements” column only consist of settlements for the three months ended March 31, 2014.

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(b)	During the three months ended March 31, 2014 , we transferred $1 million of RMBS securities into Level 3 primarily due to lesser pricing transparency resulting in using broker pricing, where as vendor pricing had been previously used.

We used observable and/or unobservable inputs to determine the fair value of positions that we have classified within the Level 3 category. As a result, the unrealized gains and losses for assets and liabilities within the Level 3 category presented in the Level 3 tables above may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.

The unobservable inputs and quantitative data used in our Level 3 valuations for our investment securities were developed and used in models created by our third-party valuation service providers, which values were used by us for fair value disclosure purposes without adjustment. We applied the third-party exception which allows us to omit certain quantitative disclosures about unobservable inputs for other long-term investments. As a result, the weighted average ranges of the inputs for these investment securities are not applicable in the following table.

Quantitative information about Level 3 inputs for our assets measured at fair value on a recurring basis for which information about the unobservable inputs is reasonably available to us at March 31, 2015 and December 31, 2014 is as follows:



			Range (Weighted Average)
	Valuation Technique(s)	Unobservable Input	March 31, 2015	December 31, 2014
Corporate debt	Discounted cash flows	Yield	1.04% (a)	1.05% (a)
RMBS	Discounted cash flows	Spread	761 bps (a)	736 bps (a) (b)
CMBS	Discounted cash flows	Spread	—	139 bps (a) (b)
Other long-term investments	Discounted cash flows and indicative valuations	Historical costs Nature of investment Local market conditions Comparables Operating performance Recent financing activity	N/A (c)	N/A (c)


(a)	At March 31, 2015 and December 31, 2014, corporate debt and RMBS each consisted of one bond. At December 31, 2014, CMBS also consisted of one bond.


(b)	During the first quarter of 2015, we identified that we incorrectly disclosed the weighted average ranges of our RMBS bond and CMBS bond as of December 31, 2014. The weighted average ranges of these bonds at December 31, 2014 have been corrected in the table above.


(c)	Not applicable.

The fair values of the assets using significant unobservable inputs are sensitive and can be impacted by significant increases or decreases in any of those inputs. Level 3 broker-priced instruments, including RMBS (except for the one bond previously noted), CMBS (except for the one bond previously noted), and CDO/ABS, are excluded from the table above because the unobservable inputs are not reasonably available to us.

Our RMBS, CMBS, and CDO/ABS securities have unobservable inputs that are reliant on and sensitive to the quality of their underlying collateral. The inputs, although not identical, have similar characteristics and interrelationships. Generally a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment speeds. An improvement in the workout criteria related to the restructured debt and/or debt covenants of the underlying collateral may lead to an improvement in the cash flows and have an inverse impact on other inputs, specifically a reduction in the amount of discount applied for marketability and liquidity, making the structured bonds more attractive to market participants.

FAIR VALUE MEASUREMENTS — NON-RECURRING BASIS

We measure the fair value of certain assets on a non-recurring basis when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

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Assets measured at fair value on a non-recurring basis on which we recorded impairment charges were as follows:



	Fair Value Measurements Using
(dollars in millions)	Level 1		Level 2		Level 3		Total

March 31, 2015

Assets
Real estate owned	$	—	$	—	$	15	$	15
Commercial mortgage loans	—		—		11		11
Total	$	—	$	—	$	26	$	26

December 31, 2014

Assets
Real estate owned	$	—	$	—	$	19	$	19
Commercial mortgage loans	—		—		11		11
Total	$	—	$	—	$	30	$	30

Net impairment charges recorded on assets measured at fair value on a non-recurring basis were as follows:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Assets
Real estate owned	$	1	$	6
Commercial mortgage loans *	—		—
Total	$	1	$	6


*	Net impairment charges recorded on commercial mortgage loans for the three months ended March 31, 2015 and 2014 were less than $1 million and, therefore, are not quantified in the table above.

In accordance with the authoritative guidance for the accounting for the impairment of long-lived assets, we wrote down certain real estate owned reported in our Real Estate segment to their fair value less cost to sell for the three months ended March 31, 2015 and 2014 and recorded the writedowns in other revenues — other. The fair values of real estate owned disclosed in the table above are unadjusted for transaction costs as required by the authoritative guidance for fair value measurements. The amounts of real estate owned recorded in other assets are net of transaction costs as required by the authoritative guidance for accounting for the impairment of long-lived assets.

In accordance with the authoritative guidance for the accounting for the impairment of commercial mortgage loans, we recorded allowance adjustments on certain impaired commercial mortgage loans reported in our Consumer and Insurance segment to record their fair value for the three months ended March 31, 2015 and 2014 and recorded the net impairments in investment revenues.

The unobservable inputs and quantitative data used in our Level 3 valuations for our real estate owned and commercial mortgage loans were developed and used in models created by our third-party valuation service providers or valuations provided by external parties, which values were used by us for fair value disclosure purposes without adjustment. We applied the third-party exception which allows us to omit certain quantitative disclosures about unobservable inputs. As a result, the weighted average ranges of the inputs are not applicable in the following table.

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Quantitative information about Level 3 inputs for our assets measured at fair value on a non-recurring basis at March 31, 2015 and December 31, 2014 is as follows:



			Range (Weighted Average)
	Valuation Technique(s)	Unobservable Input	March 31, 2015	December 31, 2014
Real estate owned	Market approach	Third-party valuation	N/A*	N/A*
Commercial mortgage loans	Market approach	Local market conditions Nature of investment Comparable property sales Operating performance	N/A*	N/A*


*	Not applicable.

FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS

We use the following methods and assumptions to estimate fair value.

Cash and Cash Equivalents

The carrying amount of cash and cash equivalents, including cash and cash equivalents in certificates of deposit and commercial paper, approximates fair value.

Mutual Funds

The fair value of mutual funds is based on quoted market prices of the underlying shares held in the mutual funds.

Investment Securities

We utilize third-party valuation service providers to measure the fair value of our investment securities, which are classified as available-for-sale or as trading and consist primarily of bonds. Whenever available, we obtain quoted prices in active markets for identical assets at the balance sheet date to measure investment securities at fair value. We generally obtain market price data from exchange or dealer markets.

We estimate the fair value of fixed maturity investment securities not traded in active markets by referring to traded securities with similar attributes, using dealer quotations and a matrix pricing methodology, or discounted cash flow analyses. This methodology considers such factors as the issuer’s industry, the security’s rating and tenor, its coupon rate, its position in the capital structure of the issuer, yield curves, credit curves, composite ratings, bid-ask spreads prepayment rates and other relevant factors. For fixed maturity investment securities that are not traded in active markets or that are subject to transfer restrictions, we adjust the valuations to reflect illiquidity and/or non-transferability. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used.

We classify investment securities that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value as trading securities at fair value.

The fair value of certificates of deposit and commercial paper having maturity dates greater than three months is based on the amortized cost, which is assumed to be immaterially different from the fair value.

Finance Receivables

The fair value of net finance receivables, less allowance for finance receivable losses, both non-impaired and purchased credit impaired, are determined using discounted cash flow methodologies. The application of these methodologies requires us to make certain judgments and estimates based on our perception of market participant views related to the economic and competitive environment, the characteristics of our finance receivables, and other similar factors. The most significant judgments and estimates made relate to prepayment speeds, default rates, loss severity, and discount rates. The degree of judgment and estimation applied is significant in light of the current capital markets and, more broadly, economic environments. Therefore, the fair value of our finance receivables could not be determined with precision and may not be realized in an actual sale. Additionally, there may be inherent weaknesses in the valuation methodologies we employed, and changes in the underlying assumptions used could significantly affect the results of current or future values.

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Finance Receivables Held for Sale

We determined the fair value of finance receivables held for sale that were originated as held for investment based on negotiations with prospective purchasers (if any) or by using projected cash flows discounted at the weighted-average interest rates offered by us in the market for similar finance receivables. We based cash flows on contractual payment terms adjusted for estimates of prepayments and credit related losses.

Restricted Cash and Cash Equivalents

The carrying amount of restricted cash and cash equivalents approximates fair value.

Commercial Mortgage Loans

We utilize third-party valuation service providers to estimate the fair value of commercial mortgage loans using projected cash flows discounted at an appropriate rate based upon market conditions.

Real Estate Owned

We initially based our estimate of the fair value on independent third-party valuations at the time we took title to real estate owned. Subsequent changes in fair value are based upon independent third-party valuations obtained periodically to estimate a price that would be received in a then current transaction to sell the asset.

Escrow Advance Receivable

The carrying amount of escrow advance receivable approximates fair value.

Receivables Related to Sales of Real Estate Loans and Related Trust Assets

The carrying amount of receivables related to sales of real estate loans and related trust assets less estimated forfeitures, which are reflected in other liabilities, approximates fair value.

Long-term Debt

We either receive fair value measurements of our long-term debt from market participants and pricing services or we estimate the fair values of long-term debt using projected cash flows discounted at each balance sheet date’s market-observable implicit-credit spread rates for our long-term debt and adjusted for foreign currency translations.

We record long-term debt issuances at fair value that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value the derivative. At March 31, 2015 , we had no debt carried at fair value under the fair value option.

18. Subsequent Events

EQUITY OFFERING

On May 4, 2015 , we completed an offering of 27,864,525 shares of common stock, consisting of 19,417,476 shares of common stock offered by us and 8,447,049 shares of common stock offered by the Initial Stockholder. In addition, the Initial Stockholder granted the underwriters an option to purchase an additional 4,179,678 shares, at the public offering price of $ 51.50 per share, less the underwriting discount of $ 1.15875 . The shares subject to the option are beneficially owned by AIG. Citigroup Global Markets Inc., Goldman, Sachs & Co., Barclays Capital Inc., and Credit Suisse Securities (USA) LLC acted as joint book-running managers.

We estimate that our net proceeds from this sale will be approximately $ 976 million , after deducting the estimated underwriting discounts and commissions and additional offering-related expenses totaling $ 24 million . We intend to use the net proceeds of the offering, together with cash on hand and the proceeds from the sale of investment securities and existing conduit facilities, to fund the Proposed Acquisition and/or for general corporate purposes, which may include debt repurchases and repayments, capital expenditures and other possible acquisitions.

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As a result of the completion of this offering on May 4, 2015 , the Initial Stockholder owns approximately 57.7% of SHI common stock ( 54.6% if the option granted to the underwriters to purchase additional shares is exercised in full), and the economic interests of Fortress and AIG were reduced to approximately 54.6% and 3.1% , respectively (will be reduced to approximately 54.6% and 0% , respectively, if the option granted to the underwriters to purchase additional shares is exercised in full).

In connection with our initial public offering in October 2013, certain executives of Springleaf received a grant of incentive units in the Initial Stockholder. These incentive units are subject to their continued employment with the Company and provide benefits (in the form of distributions) in the event the Initial Stockholder makes distributions to one or more of its members that exceed certain specified amounts. In connection with the sale of our common stock by the Initial Stockholder, certain of the specified thresholds will be satisfied. We recognize these incentive units in accordance with ASC 710, Compensation-General, and will recognize compensation expense at the time any distributions are made to the executives. If the underwriters' option to purchase additional shares is not exercised, we expect to recognize non-cash compensation expense of approximately $15.5 million in the second quarter of 2015 related to the incentive units. If the underwriters' option to purchase additional shares is exercised in full, we expect to recognize non-cash compensation expense of approximately $21.8 million in the second quarter of 2015 related to the incentive units.

SECURITIZATION

2015-B Securitization

On April 7, 2015, we completed a private securitization transaction in which a wholly owned special purpose vehicle of SFC sold $314 million of notes backed by personal loans held by Springleaf Funding Trust 2015-B (the “2015-B Trust”), at a 3.84% weighted average yield. We sold the asset-backed notes for $314 million , after the immaterial price discount but before expenses and a $3 million interest reserve requirement.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This report may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “target,” “projects,” “contemplates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this report are based upon our historical performance and on our current plans, estimates and expectations in light of information currently available to us. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to:


•	various risks relating to the Proposed Acquisition, including in respect of the satisfaction of closing conditions to the Proposed Acquisition that are materially adverse to the business, financial condition or results of operations of the combined company;


•	unanticipated difficulties financing the purchase price of the Proposed Acquisition;


•	unanticipated expenditures relating to the Proposed Acquisition;


•	uncertainties as to the timing of the closing of the Proposed Acquisition;


•	litigation relating to the Proposed Acquisition;


•	the impact of the Proposed Acquisition on each company’s relationships with employees and third parties;


•	the inability to obtain, or delays in obtaining, cost savings and synergies from the Proposed Acquisition and risks associated with the integration of the companies;


•	changes in general economic conditions, including the interest rate environment in which we conduct business and the financial markets through which we can access capital and also invest cash flows from our Consumer and Insurance segment;


•	levels of unemployment and personal bankruptcies;


•	natural or accidental events such as earthquakes, hurricanes, tornadoes, fires, or floods affecting our customers, collateral, or branches or other operating facilities;


•	war, acts of terrorism, riots, civil disruption, pandemics, or other events disrupting business or commerce;


•	changes in the rate at which we can collect or potentially sell our finance receivables portfolio;


•	the effectiveness of our credit risk scoring models in assessing the risk of customer unwillingness or lack of capacity to repay;


•	changes in our ability to attract and retain employees or key executives to support our businesses;


•	changes in the competitive environment in which we operate, including the demand for our products, customer responsiveness to our distribution channels, and the strength and ability of our competitors to operate independently or to enter into business combinations that result in a more attractive range of customer products or provide greater financial resources;


•	shifts in collateral values, delinquencies, or credit losses;

•

changes in federal, state and local laws, regulations, or regulatory policies and practices, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (which, among other things, established the Consumer Financial Protection Bureau, which has broad authority to regulate and examine financial institutions), that affect our ability to conduct business or the manner in which we conduct business, such as licensing requirements, pricing limitations or restrictions on the method of offering products, as well as changes that may result from increased regulatory scrutiny of the sub-prime lending industry;


•	potential liability relating to real estate and personal loans which we have sold or may sell in the future, or relating to securitized loans, if it is determined that there was a non-curable breach of a warranty made in connection with such transactions;


•	the effect of future sales of our remaining portfolio of real estate loans and the transfer of servicing of these loans;


•	the costs and effects of any litigation or governmental inquiries or investigations involving us, particularly those that are determined adversely to us;


•	our continued ability to access the capital markets or the sufficiency of our current sources of funds to satisfy our cash flow requirements;


•	our ability to comply with our debt covenants;


•	our ability to generate sufficient cash to service all of our indebtedness;


•	our substantial indebtedness, which could prevent us from meeting our obligations under our debt instruments and limit our ability to react to changes in the economy or our industry, or our ability to incur additional borrowings;

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•	the potential for downgrade of our debt by rating agencies, which would have a negative impact on our cost of, and access to, capital;


•	the impacts of our securitizations and borrowings;


•	our ability to maintain sufficient capital levels in our regulated and unregulated subsidiaries;


•	changes in accounting standards or tax policies and practices and the application of such new policies and practices to the manner in which we conduct business; and


•	the material weakness that we have identified in our internal control over financial reporting.

We also direct readers to other risks and uncertainties discussed in other documents we file with the Securities and Exchange Commission (the “SEC”). The forward-looking statements made in this report relate only to events as of the date on which the statements are made. We do not undertake any obligation to publicly update or review any forward-looking statement except as required by law, whether as a result of new information, future developments or otherwise.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this report that could cause actual results to differ before making an investment decision to purchase our common stock. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

Overview

Springleaf is a leading consumer finance company providing responsible loan products primarily to non-prime customers. We originate consumer loans through our network of 827 branch offices in 27 states and on a centralized basis as part of our centralized operations. We also pursue strategic acquisitions of loan portfolios. Through two insurance subsidiaries, we write credit and non-credit insurance policies covering our customers and the property pledged as collateral for our loans.

At March 31, 2015 , we had three business segments: Consumer and Insurance, Acquisitions and Servicing, and Real Estate.

See Note 16 of the Notes to Condensed Consolidated Financial Statements for a description of our segments.

OUR PRODUCTS

Our core product offerings include:

•

Personal Loans — We offer personal loans through our branch network and over the internet through our centralized operations to customers who generally need timely access to cash. Our personal loans are typically non-revolving with a fixed-rate and a fixed, original term of two to five years. At March 31, 2015 , we had over 913,000 personal loans, representing $3.9 billion of net finance receivables, of which $2.0 billion , or 51% , were secured by collateral consisting of titled personal property (such as automobiles) and $1.9 billion , or 49% , were secured by consumer household goods or other items of personal property or were unsecured.

•

Insurance Products — We offer our customers credit insurance (life insurance, accident and health insurance, and involuntary unemployment insurance) and non-credit insurance through both our branch network and our centralized operations. Credit insurance and non-credit insurance products are provided by our subsidiaries, Merit and Yosemite Insurance Company (“Yosemite”). We also offer auto security membership plans of an unaffiliated company as an ancillary product.


•	SpringCastle Portfolio — We service the SpringCastle Portfolio that we acquired through a joint venture in which we own a 47% equity interest. These loans include unsecured loans and loans secured by subordinate residential real estate mortgages (which we service as unsecured loans due to the fact that the liens are subordinated to

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superior ranking security interests). The SpringCastle Portfolio includes both closed-end accounts and open-end lines of credit. These loans are in a liquidating status and vary in substance and form from our originated loans. We assumed the direct servicing obligations for these loans in September 2013. At March 31, 2015 , the SpringCastle Portfolio included nearly 265,000 of acquired loans, representing $1.9 billion in net finance receivables.

Our non-core and non-originating legacy products include:

•

Real Estate Loans — We ceased real estate lending in January 2012, and during 2014, we sold $6.4 billion real estate loans held for sale. The remaining real estate loans may be closed-end accounts or open-end home equity lines of credit, generally have a fixed rate and maximum original terms of 360 months, and are secured by first or second mortgages on residential real estate. We continue to service the liquidating real estate loans and support any advances on open-end accounts. At March 31, 2015 , $221 million of real estate loans held for investment, or 37% , were secured by first mortgages and $377 million , or 63% , were secured by second mortgages. Real estate loans held for sale totaled $199 million at March 31, 2015 , all of which were secured by first mortgages.


•	Retail Sales Finance — We ceased purchasing retail sales contracts and revolving retail accounts in January 2013. We continue to service the liquidating retail sales contracts and will provide revolving retail sales financing services on our revolving retail accounts. We refer to retail sales contracts and revolving retail accounts collectively as “retail sales finance.”

Recent Developments and Outlook

PROPOSED ACQUISITION

On March 2, 2015, SHI entered into the Stock Purchase Agreement to acquire OneMain for an aggregate purchase price of $4.25 billion. The Proposed Acquisition is expected to close in the third quarter of 2015, although there can be no assurance that the Proposed Acquisition will close, or, if it does, when the actual closing will occur. At closing, the combined company is expected to have nearly $14 billion of net finance receivables and close to 2,000 branch offices across 43 states. We continue to evaluate our options for financing the purchase price for the Proposed Acquisition, which could be financed through cash on hand, proceeds from the sale of investment securities, the proceeds from the recent equity offering, issuance of debt securities, bank borrowings, securitizations or a combination thereof. See Note 2 of the Notes to Condensed Consolidated Financial Statements for further information on the Proposed Acquisition.

EQUITY OFFERING

On May 4, 2015, we completed an offering of 27,864,525 shares of common stock, consisting of 19,417,476 shares of common stock offered by us and 8,447,049 shares of common stock offered by the Initial Stockholder. In addition, the Initial Stockholder granted the underwriters an option to purchase an additional 4,179,678 shares, at the public offering price of $51.50 per share, less the underwriting discount of $1.15875. The shares subject to the option are beneficially owned by AIG. Citigroup Global Markets Inc., Goldman, Sachs & Co., Barclays Capital Inc., and Credit Suisse Securities (USA) LLC acted as joint book-running managers.

We estimate that our net proceeds from this sale will be approximately $976 million, after deducting the estimated underwriting discounts and commissions and additional offering-related expenses totaling $24 million. We intend to use the net proceeds of the offering, together with cash on hand and the proceeds from the sale of investment securities and existing conduit facilities, to fund the Proposed Acquisition and/or for general corporate purposes, which may include debt repurchases and repayments, capital expenditures and other possible acquisitions.

As a result of the completion of this offering on May 4, 2015, the Initial Stockholder owns approximately 57.7% of SHI common stock (54.6% if the option granted to the underwriters to purchase additional shares is exercised in full), and the economic interests of Fortress and AIG were reduced to approximately 54.6% and 3.1%, respectively (will be reduced to approximately 54.6% and 0%, respectively, if the option granted to the underwriters to purchase additional shares is exercised in full).

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specified thresholds may be satisfied. We recognize these incentive units in accordance with ASC 710, Compensation-General, and will recognize compensation expense at the time any distributions are made to the executives. If the underwriters' option to purchase additional shares is not exercised, we expect to recognize non-cash compensation expense of approximately $15.5 million in the second quarter of 2015 related to the incentive units. If the underwriters' option to purchase additional shares is exercised in full, we expect to recognize non-cash compensation expense of approximately $21.8 million in the second quarter of 2015 related to the incentive units.

SECURITIZATIONS

Renewal of Sumner Brook 2013-VFN1 Securitization

On January 16, 2015, we amended the note purchase agreement with Sumner Brook 2013-VFN1 Trust to extend the two -year funding period to a three -year funding period. Following the three -year funding period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in full in August 2024. The maximum principal balance of variable funding notes that can be issued remained at $350 million . No amounts have been funded.

2015-A Securitization

On February 26, 2015, we completed a private securitization transaction in which a wholly owned special purpose vehicle of SFC sold $1.2 billion of notes backed by personal loans held by the 2015-A Trust at a 3.58% weighted average yield. We sold the asset-backed notes for $1.2 billion , after the price discount but before expenses and a $12 million interest reserve requirement.

Sale of SpringCastle 2014-A Notes

On March 9, 2015, SAC agreed to sell $232 million and $131 million principal amount of the previously retained Class C and Class D SpringCastle 2014-A Notes, respectively, to an unaffiliated third party at a premium to the principal balance. The sale was completed on March 16, 2015.

Amendment to Whitford Brook 2014-VFN1 Securitization

On March 24, 2015, we amended the Sale and Servicing Agreement with Whitford Brook 2014-A Trust to no longer require a $100 million minimum balance drawn under the variable funding notes backed by personal loans acquired from subsidiaries of SFC. On March 25, 2015, we paid down the required minimum balance of $100 million.

2015-B Securitization

On April 7, 2015, we completed a private securitization transaction in which a wholly owned special purpose vehicle of SFC sold $314 million of notes backed by personal loans held by the 2015-B Trust, at a 3.84% weighted average yield. We sold the asset-backed notes for $314 million , after the immaterial price discount but before expenses and a $3 million interest reserve requirement.

OUTLOOK

Assuming the U.S. economy continues to experience slow to moderate growth, we expect to continue our long history of strong credit performance. We believe the strong credit quality of our personal loan portfolio is the result of our disciplined underwriting practices and ongoing collection efforts. We also continue to see growth in the volume of personal loan originations driven by the following factors:

•

Declining competition from thrifts and banks (although banks continue to serve non-prime customers in other ways) as these institutions have retreated from the non-prime market in the face of regulatory scrutiny and in the aftermath of the housing crisis. As a result of the reduced lending of these competitors, access to credit has fallen substantially for the non-prime segment of customers, which, in turn, has increased our potential customer base.


•	Slow but sustained economic growth.


•	Migration of customer activity from traditional channels such as direct mail to online channels (served by our centralized operations) where we believe we are well suited to capture volume due to our scale, technology, and deployment of advanced analytics.

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In addition, with an experienced management team, a strong balance sheet, proven access to the capital markets, and strong demand for consumer credit, we believe we are well positioned for future personal loan growth.

We regularly consider strategic acquisitions and have been involved in transactions of various magnitudes involving a variety of forms of consideration and financing. On March 2, 2015, SHI entered into the Stock Purchase Agreement to acquire OneMain, which, when consummated, will be the most significant acquisition transaction ever undertaken by the Company. This transaction will create a combined company that we believe is financially strong and optimized for finance receivable growth. See Note 2 of the Notes to Condensed Consolidated Financial Statements for further information on the Proposed Acquisition.

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Results of Operations

CONSOLIDATED RESULTS

See table below for our consolidated operating results. A further discussion of our operating results for each of our business segments is provided under “Segment Results.”



(dollars in millions except earnings per share)	Three Months Ended March 31,
(dollars in millions except earnings per share)	2015			2014

Interest income:
Finance charges	$	402		$	548
Finance receivables held for sale originated as held for investment	4			4
Total interest income	406			552

Interest expense	158			205

Net interest income	248			347

Provision for finance receivable losses	87			161

Net interest income after provision for finance receivable losses	161			186

Other revenues:
Insurance	36			38
Investment	17			10
Net loss on repurchases and repayments of debt	—			(7		)
Net loss on fair value adjustments on debt	—			(17		)
Net gain on sales of real estate loans and related trust assets	—			55
Other	(2		)	2
Total other revenues	51			81

Other expenses:
Operating expenses:
Salaries and benefits	93			92
Other operating expenses	65			58
Insurance losses and loss adjustment expenses	16			18
Total other expenses	174			168

Income before provision for income taxes	38			99

Provision for income taxes	7			31

Net income	31			68

Net income attributable to non-controlling interests	31			16

Net income attributable to Springleaf Holdings, Inc.	$	—		$	52

Share Data:
Weighted average number of shares outstanding:
Basic	115,027,470			114,788,439
Diluted	115,027,470			115,144,858
Earnings per share:
Basic	$	—		$	0.46
Diluted	$	—		$	0.45

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Comparison of Consolidated Results for Three Months Ended March 31, 2015 and 2014

Finance charges decreased for the three months ended March 31, 2015 when compared to the same period in 2014 due to the net of the following:



(dollars in millions)

2015 compared to 2014 - Three Months Ended March 31

Decrease in average net receivables	$	(252	)
Increase in yield	106
Total	$	(146	)

Average net receivables decreased for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to our liquidating real estate loan portfolio, including the transfers of real estate loans with a total carrying value of $6.7 billion to finance receivables held for sale and the subsequent sales of nearly all of these real estate loans during 2014. This decrease also reflected lower SpringCastle average net receivables resulting from liquidations, partially offset by higher personal loan average net receivables resulting from our continued focus on personal loan originations through our branch network and centralized operations.

Yield increased for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to a higher proportion of personal loans, which have higher yields, as a result of the real estate loan sales during 2014.

Interest expense decreased for the three months ended March 31, 2015 when compared to the same period in 2014 due to the net of the following:



(dollars in millions)

2015 compared to 2014 - Three Months Ended March 31

Decrease in average debt	$	(60	)
Increase in weighted average interest rate	13
Total	$	(47	)

Average debt decreased for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to debt repurchases and repayments of $3.4 billion during the past twelve months and the elimination of $3.5 billion of debt associated with our mortgage securitizations as a result of the sales of the Company’s beneficial interests in the mortgage-backed certificates during 2014. These decreases were partially offset by net debt issuances pursuant to our consumer securitization transactions completed during the past twelve months.

The weighted average interest rate on our debt increased for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to the elimination of debt associated with our mortgage securitizations discussed above, which generally have lower interest rates. This increase was partially offset by the debt repurchases and repayments discussed above, which resulted in lower accretion of net discount applied to long-term debt.

Provision for finance receivable losses decreased $74 million for the three months ended March 31, 2015 when compared to the same period in 2014 . This decrease was primarily due to reductions in the allowance requirements and net charge-offs on our real estate loans as a result of the transfers of real estate loans with a total carrying value of $6.7 billion to finance receivables held for sale and the subsequent sales of nearly all of these real estate loans during 2014. This decrease also reflected lower net charge-offs on the SpringCastle Portfolio primarily due to the improved central servicing performance as the acquired portfolio matures under our ownership. This decrease was partially offset by higher net charge-offs on our personal loans primarily due to growth in our personal loans during the past twelve months and a higher personal loan delinquency ratio at March 31, 2015 .

Insurance revenues decreased $2 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to decreases in credit and non-credit earned premiums. The decrease in credit earned premiums reflected

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the cancellations of dwelling policies as a result of the real estate loan sales during 2014. The decrease in non-credit earned premiums reflected fewer non-credit policies written.

Net loss on repurchases and repayments of debt of $7 million for the three months ended March 31, 2014 reflected repurchases of debt at net amounts greater than carrying value.

Net loss on fair value adjustments on debt of $17 million for the three months ended March 31, 2014 reflected net unrealized loss on fair value adjustments of the long-term debt associated with the 2013 securitization of the SpringCastle Portfolio that was accounted for at fair value through earnings.

Net gain on sales of real estate loans and related trust assets of $55 million for the three months ended March 31, 2014 reflected the reversal of the remaining unaccreted push-down accounting basis for the real estate loans, less allowance for finance receivable losses that we established at the date of the Fortress Acquisition.

Other revenues — other decreased $4 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to net charge-offs recognized on our finance receivables held for sale and provision adjustments for liquidated held for sale accounts during the first quarter of 2015.

Other operating expenses increased $7 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to higher professional fees primarily due to one-time costs relating to the proposed acquisition and higher advertising expenses reflecting our increased focus on e-commerce and social media marketing during 2015.

Insurance losses and loss adjustment expenses decreased $2 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to favorable variances in claim reserves and benefit reserves primarily resulting from the real estate loan sales during 2014.

Provision for income taxes decreased $24 million for the three months ended March 31, 2015 when compared to the same period in 2014 reflecting lower pretax income in the 2015 period primarily due to the net gain on sales of real estate loans recorded in the first quarter of 2014. The effective tax rate for the three months ended March 31, 2015 was 18.5% compared to 30.8% for the same period in 2014 . The effective tax rate for the three months ended March 31, 2015 differed from the federal statutory rate primarily due to the effect of the non-controlling interest in our joint venture. The effective tax rate for the three months ended March 31, 2014 differed from the federal statutory rate primarily due to the effect of the non-controlling interest in our joint venture.

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Reconciliation of Income before Provision for Income Taxes on Push-Down Accounting Basis to Historical Accounting Basis

Due to the nature of the Fortress Acquisition, we revalued our assets and liabilities based on their fair values at November 30, 2010, the date of the Fortress Acquisition, in accordance with business combination accounting standards, or push-down accounting. Push-down accounting affected and continues to affect, among other things, the carrying amount of our finance receivables and long-term debt, our finance charges on our finance receivables and related yields, our interest expense, our allowance for finance receivable losses, and our net charge-offs and charge-off ratio. In general, on a quarterly basis, we accrete or amortize the valuation adjustments recorded in connection with the Fortress Acquisition, or record adjustments based on current expected cash flows as compared to expected cash flows at the time of the Fortress Acquisition, in each case, as described in more detail in the footnotes to the table below. In addition, push-down accounting resulted in the elimination of accretion or amortization of discounts, premiums, and other deferred costs on our finance receivables and long-term debt prior to the Fortress Acquisition. The reconciliations of income before provision for income taxes on a push-down accounting basis to income (loss) before provision for (benefit from) income taxes on a historical accounting basis (which is a basis of accounting other than U.S. GAAP that we believe provides a consistent basis for both management and other interested third parties to better understand our operating results) were as follows:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Income before provision for income taxes - push-down accounting basis	$	38		$	99
Interest income adjustments (a)	(3		)	(36		)
Interest expense adjustments (b)	30			28
Provision for finance receivable losses adjustments (c)	2			—
Repurchases and repayments of long-term debt adjustments (d)	—			(4		)
Fair value adjustments on debt (e)	—			8
Sales of finance receivables held for sale originated as held for investment adjustments (f)	—			(117		)
Amortization of other intangible assets (g)	1			1
Other (h)	3			—
Income (loss) before provision for (benefit from) income taxes - historical accounting basis	$	71		$	(21	)

(a)

Interest income adjustments consist of: (1) the accretion of the net discount applied to non-credit impaired net finance receivables to revalue the non-credit impaired net finance receivables to their fair value at the date of the Fortress Acquisition using the interest method over the remaining life of the related net finance receivables; (2) the difference in finance charges earned on our pools of purchased credit impaired net finance receivables under a level rate of return over the expected lives of the underlying pools of purchased credit impaired finance receivables, net of the finance charges earned on these finance receivables under historical accounting basis; and (3) the elimination of the accretion or amortization of historical unearned points and fees, deferred origination costs, premiums, and discounts.

Components of interest income adjustments consisted of:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Accretion of net discount applied to non-credit impaired net finance receivables	$	(3	)	$	(26	)
Purchased credit impaired finance receivables finance charges	—			(13		)
Elimination of accretion or amortization of historical unearned points and fees, deferred origination costs, premiums, and discounts	—			3
Total	$	(3	)	$	(36	)


(b)	Interest expense adjustments consist of: (1) the accretion of the net discount applied to long-term debt to revalue the debt securities to their fair value at the date of the Fortress Acquisition using the interest method over the remaining life of the related debt securities; and (2) the elimination of the accretion or amortization of historical discounts, premiums, commissions, and fees.

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Components of interest expense adjustments were as follows:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Accretion of net discount applied to long-term debt	$	30	$	37
Elimination of accretion or amortization of historical discounts, premiums, commissions, and fees	—		(9		)
Total	$	30	$	28

(c)

Provision for finance receivable losses consists of the allowance for finance receivable losses adjustments and net charge-offs quantified in the table below. Allowance for finance receivable losses adjustments reflect the net difference between our allowance adjustment requirements calculated under our historical accounting basis net of adjustments required under push-down accounting basis. Net charge-offs reflect the net charge-off of loans at a higher carrying value under historical accounting basis versus the discounted basis to their fair value at date of the Fortress Acquisition under push-down accounting basis.

Components of provision for finance receivable losses adjustments were as follows:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Allowance for finance receivable losses adjustments	$	4		$	10
Net charge-offs	(2		)	(10		)
Total	$	2		$	—


(d)	Repurchases and repayments of long-term debt adjustments reflect the impact on acceleration of the accretion of the net discount or amortization of the net premium applied to long-term debt.


(e)	Fair value adjustments on debt reflect differences between historical accounting basis and push-down accounting basis. On a historical accounting basis, certain long-term debt components are marked-to-market on a recurring basis and are no longer marked-to-market on a recurring basis after the application of push-down accounting at the time of the Fortress Acquisition.


(f)	Sales of finance receivables held for sale originated as held for investment reflect the reversal of the remaining unaccreted push-down accounting basis for net finance receivables, less allowance for finance receivable losses established at the date of the Fortress Acquisition that were sold in the 2014 period.


(g)	Amortization of other intangible assets reflects the amortization over the remaining estimated life of intangible assets established at the date of the Fortress Acquisition as a result of the application of push-down accounting.

(h)

“Other” items reflect differences between historical accounting basis and push-down accounting basis relating to various items such as the elimination of deferred charges, adjustments to the basis of other real estate assets, fair value adjustments to fixed assets, adjustments to insurance claims and policyholder liabilities, and various other differences all as of the date of the Fortress Acquisition.

At March 31, 2015 , the remaining unaccreted push-down accounting basis totaled $5 million for net finance receivables, less allowance for finance receivable losses, and $531 million for long-term debt.

Segment Results

See Note 16 of the Notes to Condensed Consolidated Financial Statements for a description of our segments. Management considers Consumer and Insurance and Acquisitions and Servicing as our Core Consumer Operations and Real Estate as our Non-Core Portfolio. Due to the nature of the Fortress Acquisition, we applied push-down accounting. However, we report the operating results of our Core Consumer Operations, Non-Core Portfolio, and Other using the same accounting basis that we employed prior to the Fortress Acquisition, which we refer to as “historical accounting basis,” to provide a consistent basis for both management and other interested third parties to better understand the operating results of these segments. The historical accounting basis (which is a basis of accounting other than U.S. GAAP) also provides better comparability of the operating results of these segments to our competitors and other companies in the financial services industry. The historical accounting basis is not applicable to the Acquisitions and Servicing segment since this segment was added subsequent to the Fortress Acquisition. See Note 16 of the Notes to Condensed Consolidated Financial Statements for reconciliations of segment totals to condensed consolidated financial statement amounts.

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We allocate revenues and expenses (on a historical accounting basis) to each segment using the following methodologies:



Interest income	Directly correlated with a specific segment.
Interest expense	Disaggregated into three categories based on the underlying debt that the expense pertains to:
	l securitizations — allocated to the segments whose finance receivables serve as the collateral securing each of the respective debt instruments;
	l unsecured debt — allocated to the segments based on expected leverage for that segment or the balance of unencumbered assets and cash proceeds from sale of receivables in that segment; and
	l secured term loan — allocated to the segments whose finance receivables served as the collateral securing each of the respective debt instruments.
Provision for finance receivable losses	Directly correlated with a specific segment except for allocations to “other,” which are based on the remaining delinquent accounts as a percentage of total delinquent accounts.
Insurance revenues	Directly correlated with a specific segment.
Investment revenues	Directly correlated with a specific segment.
Net gain (loss) on repurchases and repayments of debt	Allocated to the segments based on the interest expense allocation of debt.
Net gain (loss) on fair value adjustments on debt	Directly correlated with a specific segment.
Other revenues — other	Directly correlated with a specific segment except for gains and losses on foreign currency exchange and derivatives. These items are allocated to the segments based on the interest expense allocation of debt.
Salaries and benefits	Directly correlated with a specific segment. Other salaries and benefits not directly correlated with a specific segment are allocated to each of the segments based on services provided.
Other operating expenses	Directly correlated with a specific segment. Other operating expenses not directly correlated with a specific segment are allocated to each of the segments based on services provided.
Insurance losses and loss adjustment expenses	Directly correlated with a specific segment.

We evaluate the performance of each of our segments based on its pretax operating earnings.

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CORE CONSUMER OPERATIONS

Pretax operating results for Consumer and Insurance (which are reported on a historical accounting basis), and Acquisitions and Servicing are presented in the table below on an aggregate basis:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Interest income	$	383	$	356

Interest expense	63		63

Net interest income	320		293

Provision for finance receivable losses	83		98

Net interest income after provision for finance receivable losses	237		195

Other revenues:
Insurance	36		38
Investment	18		10
Net loss on repurchases and repayments of debt	—		(1		)
Net loss on fair value adjustments on debt	—		(17		)
Other	16		20
Total other revenues	70		50

Other expenses:
Operating expenses:
Salaries and benefits	89		80
Other operating expenses	70		60
Insurance loss and loss adjustment expenses	16		18
Total other expenses	175		158

Pretax operating income	132		87

Pretax operating income attributable to non-controlling interests	31		16

Pretax operating income attributable to Springleaf Holdings, Inc.	$	101	$	71

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Selected financial statistics for Consumer and Insurance (which are reported on a historical accounting basis) and Acquisitions and Servicing were as follows:



(dollars in millions)	At or for the Three Months Ended March 31,
(dollars in millions)	2015			2014

Consumer and Insurance

Net finance receivables	$	3,895		$	3,159
Number of accounts	909,004			826,703

TDR finance receivables	$	26		$	14
Allowance for finance receivables losses - TDR	$	3		$	—
Provision for finance receivable losses - TDR	$	4		$	—

Average net receivables	$	3,831		$	3,138
Yield	26.88		%	26.93		%

Gross charge-off ratio	6.43		%	5.56		%
Recovery ratio	(0.79		)%	(0.55		)%
Charge-off ratio	5.64		%	5.01		%
Delinquency ratio	2.53		%	2.45		%

Origination volume	$	868		$	722
Number of accounts	157,403			161,241

Acquisitions and Servicing

Net finance receivables	$	1,868		$	2,343
Number of accounts	264,830			323,570

TDR finance receivables	$	11		$	—
Allowance for finance receivables losses - TDR	$	3		$	—
Provision for finance receivable losses - TDR	$	1		$	—

Average net receivables	$	1,923		$	2,426
Yield	26.78		%	24.40		%

Net charge-off ratio	5.43		%	8.67		%
Delinquency ratio	4.22		%	6.33		%

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Comparison of Pretax Operating Results for Three Months Ended March 31, 2015 and 2014



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Interest income:
Finance charges - Consumer and Insurance	$	256	$	210
Finance charges - Acquisitions and Servicing	127		146
Total	$	383	$	356

Finance charges — Consumer and Insurance increased $46 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to increases in average net receivables, partially offset by a slight decrease in yield. Average net receivables increased for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to increased originations on personal loans resulting from our continued focus on personal loans. Yield decreased for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to the launch of our auto loan product in June of 2014, which generally have lower yields. At March 31, 2015, we had nearly 34,000 auto loans totaling $415 million.

Finance charges — Acquisitions and Servicing decreased $19 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to lower average net receivables reflecting the liquidating status of the acquired portfolio.



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Interest expense - Consumer and Insurance	$	40	$	41
Interest expense - Acquisitions and Servicing	23		22
Total	$	63	$	63

Interest expense — Consumer and Insurance decreased $1 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to a reduction in the utilization of financing from unsecured notes that was replaced by consumer loan securitizations, which generally have lower interest rates. This decrease was partially offset by additional funding required to support increased originations of personal loans.

Interest expense — Acquisitions and Servicing increased $1 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to the refinance of the SpringCastle 2013-A Notes in October 2014, which resulted in an increase in average debt.



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Provision for finance receivable losses - Consumer and Insurance	$	56	$	45
Provision for finance receivable losses - Acquisitions and Servicing	27		53
Total	$	83	$	98

Provision for finance receivable losses — Consumer and Insurance increased $11 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to additional allowance requirements on our personal loans resulting from increased originations of personal loans during the past twelve months and a higher personal loan delinquency ratio at March 31, 2015 and higher net charge-offs during the 2015 period.

Provision for finance receivable losses — Acquisitions and Servicing decreased $26 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to lower net charge-offs on the SpringCastle Portfolio reflecting improvements in servicing of the acquired portfolio and its liquidating status.

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the cancellations of dwelling policies as a result of the real estate loan sales during 2014. The decrease in non-credit earned premiums reflected fewer non-credit policies written.

Investment revenues increased $8 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to realized gains on available-for-sale securities resulting from the sales of certain investment securities during the first quarter of 2015.

Net loss on repurchases and repayments of debt — Consumer and Insurance of $1 million for the three months ended March 31, 2014 reflected repurchases of debt at net amounts greater than carrying value.

Net loss on fair value adjustments on debt — Acquisitions and Servicing of $17 million for the three months ended March 31, 2014 reflected net unrealized loss on fair value adjustments of the long-term debt associated with the securitization of the SpringCastle Portfolio that was accounted for at fair value through earnings.

Other revenues — other decreased $4 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to decreased servicing fee revenues for the fees charged by Acquisitions and Servicing for servicing the SpringCastle Portfolio reflecting the liquidating status of the acquired portfolio. These fees are eliminated in consolidated operating results with the servicing fee expenses, which are included in other operating expenses.



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Salaries and benefits - Consumer and Insurance	$	81	$	71
Salaries and benefits - Acquisitions and Servicing	8		9
Total	$	89	$	80

Salaries and benefits — Consumer and Insurance increased $10 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to increased originations of personal loans and increased staffing in our centralized operations. This increase also reflected the redistribution of the allocation of salaries and benefit expenses from our Real Estate segment as a result of the real estate loan sales in 2014.



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015		2014

Other operating expenses - Consumer and Insurance	$	49	$	36
Other operating expenses - Acquisitions and Servicing	21		24
Total	$	70	$	60

Other operating expenses — Consumer and Insurance increased $13 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to higher credit collections and losses, advertising expenses, and professional fees. This increase also reflected the redistribution of the allocation of other operating expenses as a result of the real estate loan sales in 2014.

Other operating expenses — Acquisitions and Servicing decreased $3 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to decreased credit collections and losses reflecting the improved credit quality of the acquired portfolio.

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Reconciliation of Income (Loss) before Provision for (Benefit from) Income Taxes on Historical Accounting Basis to Pretax Core Earnings

Pretax core earnings is a key performance measure used by management in evaluating the performance of our Core Consumer Operations. Pretax core earnings represents our income (loss) before provision for (benefit from) income taxes on a historical accounting basis and excludes results of operations from our non-core portfolio (Real Estate) and other non-originating legacy operations, gains (losses) resulting from accelerated long-term debt repayment and repurchases of long-term debt related to Core Consumer Operations (attributable to SHI), gains (losses) on fair value adjustments on debt related to Core Consumer Operations (attributable to SHI), and results of operations attributable to non-controlling interests. Pretax core earnings provides us with a key measure of our Core Consumer Operations’ performance as it assists us in comparing its performance on a consistent basis. Management believes pretax core earnings is useful in assessing the profitability of our core business and uses pretax core earnings in evaluating our operating performance. Pretax core earnings is a non-GAAP measure and should be considered in addition to, but not as a substitute for or superior to, operating income, net income, operating cash flow, and other measures of financial performance prepared in accordance with U.S. GAAP.

The following is a reconciliation of income (loss) before provision for (benefit from) income taxes on a historical accounting basis to pretax core earnings:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Income (loss) before provision for (benefit from) income taxes - historical accounting basis *	$	71		$	(21	)
Adjustments:
Pretax operating loss - Non-Core Portfolio Operations	48			105
Pretax operating loss - Other/non-originating legacy operations	13			3
Net loss from accelerated repayment/repurchase of debt - Core Consumer Operations (attributable to SHI)	—			1
Net loss on fair value adjustments on debt - Core Consumer Operations (attributable to SHI)	—			8
Pretax operating income attributable to non-controlling interests	(31		)	(16		)
Pretax core earnings	$	101		$	80


*	See reconciliation of income before provision for income taxes on a push-down accounting basis to a historical accounting basis, which is presented prior to “Segment Results”.

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NON-CORE PORTFOLIO

Pretax operating results for Real Estate (which are reported on a historical accounting basis) were as follows:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Interest income:
Finance charges	$	15		$	151
Finance receivables held for sale originated as held for investment	3			4
Total interest income	18			155

Interest expense	60			112

Net interest income (loss)	(42		)	43

Provision for finance receivable losses	2			62

Net interest loss after provision for finance receivable losses	(44		)	(19		)

Other revenues:
Investment	5			—
Net loss on repurchases and repayments of debt	—			(10		)
Net gain on fair value adjustments on debt	—			8
Net loss on sales of real estate loans and related trust assets *	—			(62		)
Other	(2		)	(1		)
Total other revenues	3			(65		)

Other expenses:
Operating expenses:
Salaries and benefits	3			8
Other operating expenses	4			13
Total other expenses	7			21

Pretax operating loss	$	(48	)	$	(105	)


*	Consistent with our segment reporting presentation in Note 16 of the Notes to Condensed Consolidated Financial Statements, we have combined the lower of cost or fair value adjustments recorded on the date the real estate loans were transferred to finance receivables held for sale with the final gain (loss) on the sales of these loans.

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Selected financial statistics for Real Estate (which are reported on a historical accounting basis) were as follows:



(dollars in millions)	At or for the Three Months Ended March 31,
(dollars in millions)	2015			2014

Real estate

Finance receivables held for investment:
Net finance receivables	$	646		$	8,083
Number of accounts	21,257			110,454

TDR finance receivables	$	159		$	3,049
Allowance for finance receivables losses - TDR	$	55		$	730
Provision for finance receivable losses - TDR	$	1		$	45

Average net receivables	$	660		$	9,049
Yield	9.24		%	6.74		%

Loss ratio *	4.69		%	1.62		%
Delinquency ratio	7.21		%	8.32		%

Finance receivables held for sale:
Net finance receivables	$	194		$	—
Number of accounts	3,472			—

TDR finance receivables	$	191		$	—


*	The loss ratio for the three months ended March 31, 2014 reflects $2 million of recoveries on charged-off real estate loans resulting from a sale of previously charged-off real estate loans in March 2014. Excluding these recoveries, our Real Estate loss ratio would have been 1.72% for the three months ended March 31, 2014 .

Comparison of Pretax Operating Results for Three Months Ended March 31, 2015 and 2014

Finance charges decreased $136 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to decreases in average net receivables, partially offset by an increase in yield. Average net receivables decreased for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to the continued liquidation of the real estate portfolio, including the transfers of real estate loans with a total carrying value of $7.2 billion to finance receivables held for sale and the subsequent sales of nearly all of these real estate loans during 2014. The increase in yield for the three months ended March 31, 2015 reflected a higher proportion of our remaining real estate loans that are secured by second mortgages, which generally have higher yields. The increase in yield was partially offset by a higher proportion of TDR finance receivables during the 2014 period, which generally have lower rates than non-modified real estate loans.

Interest expense decreased $52 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to the sales of the Company’s beneficial interests in the mortgage-backed retained certificates related to its previous mortgage securitization transactions during 2014.

Provision for finance receivable losses decreased $60 million for the three months ended March 31, 2015 when compared to the same period in 2014 . The decrease in provision for finance receivable losses reflected a reduction in the allowance requirements recorded for the three months ended March 31, 2015 as a result of the transfers of real estate loans with a total carrying value of $7.2 billion to finance receivables held for sale and the subsequent sales of nearly all of these real estate loans during 2014. This decrease also reflected a lower real estate loan delinquency ratio at March 31, 2015 .

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Investment revenues of $5 million for the three months ended March 31, 2015 reflected realized gains on available-for-sale securities resulting from the sales of certain investment securities during the first quarter of 2015.

Net loss on repurchases and repayments of debt of $10 million for the three months ended March 31, 2014 reflected acceleration of amortization of deferred costs and repurchases of debt at net amounts greater than carrying value.

Net gain on fair value adjustments on debt of $8 million for the three months ended March 31, 2014 reflected differences between historical accounting basis and push-down accounting basis. On a historical accounting basis, certain long-term debt components were marked-to-market on a recurring basis and were no longer marked-to-market on a recurring basis after the application of push-down accounting at the time of the Fortress Acquisition.

Net loss on sales of real estate loans and related trust assets of $62 million for the three months ended March 31, 2014 primarily reflected the lower of cost or fair value adjustments recorded on the dates the real estate loans were transferred to finance receivables held for sale. Consistent with our segment reporting presentation, we have combined the lower of cost or fair value adjustments with the final gain (loss) on the sales of these loans.

Salaries and benefits decreased $5 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to the redistribution of the allocation of salaries and benefit expenses from our Real Estate segment as a result of the real estate loan sales in 2014.

Other operating expenses decreased $9 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to lower credit, collection and losses and professional services expenses resulting from the sales of real estate loans during 2014. This decrease also reflected the redistribution of the allocation of other operating expenses as a result of the real estate loan sales in 2014.

OTHER

“Other” consists of our other non-originating legacy operations, which are isolated by geographic market and/or distribution channel from our prospective Core Consumer Operations and our Non-Core Portfolio. These operations include our legacy operations in 14 states where we have also ceased branch-based personal lending as a result of our restructuring activities during the first half of 2012, our liquidating retail sales finance portfolio (including our retail sales finance accounts from our dedicated auto finance operation), our lending operations in Puerto Rico and the U.S. Virgin Islands, and the operations of our United Kingdom subsidiary.

During the first quarter of 2015, we recorded one-time costs of $2.8 million related to the pending acquisition of OneMain Financial. See Note 2 of the Notes to Condensed Consolidated Financial Statements for further information regarding the pending acquisition.

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Pretax operating results of the Other components (which are reported on a historical accounting basis) were as follows:



(dollars in millions)	Three Months Ended March 31,
(dollars in millions)	2015			2014

Interest income	$	2		$	5

Interest expense	10			2

Net interest income (loss)	(8		)	3

Provision for finance receivable losses	—			1

Net interest income (loss) after provision for finance receivable losses	(8		)	2

Other revenues:
Other	—			1
Total other revenues	—			1

Other expenses:
Operating expenses:
Salaries and benefits	1			4
Other operating expenses	4			2
Total other expenses	5			6

Pretax operating loss	$	(13	)	$	(3	)

Net finance receivables of the Other components (which are reported on a historical accounting basis) were as follows:



(dollars in millions)	March 31,
(dollars in millions)	2015		2014

Net finance receivables:
Personal loans	$	25	$	30
Real estate loans	—		7
Retail sales finance	41		86
Total	$	66	$	123

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Credit Quality

Our customers encompass a wide range of borrowers. In the consumer finance industry, they are described as prime or near-prime at one extreme and non-prime or sub-prime (less creditworthy) at the other. Our customers’ incomes are generally near the national median but our customers may vary from national norms as to their debt-to-income ratios, employment and residency stability, and/or credit repayment histories. In general, our customers have lower credit quality and require significant levels of servicing.

Carrying value of finance receivables includes accrued finance charges, unamortized deferred origination costs and unamortized net premiums and discounts on purchased finance receivables. We record an allowance for loan losses to cover expected losses on our finance receivables.

The following is a summary of net finance receivables by type and by days delinquent:



(dollars in millions)	Personal Loans		SpringCastle Portfolio		Real Estate Loans		Retail Sales Finance		Total

March 31, 2015

Net finance receivables:
60-89 days past due	$	31	$	25	$	9	$	—	$	65
90-119 days past due	25		16		5		—		46
120-149 days past due	24		13		4		—		41
150-179 days past due	23		12		4		—		39
180 days or more past due	2		3		13		—		18
Total delinquent finance receivables	105		69		35		—		209
Current	3,761		1,756		548		38		6,103
30-59 days past due	51		43		15		1		110
Total	$	3,917	$	1,868	$	598	$	39	$	6,422

December 31, 2014

Net finance receivables:
60-89 days past due	$	37	$	31	$	12	$	1	$	81
90-119 days past due	30		19		9		—		58
120-149 days past due	24		16		5		1		46
150-179 days past due	21		14		4		—		39
180 days or more past due	2		2		12		—		16
Total delinquent finance receivables	114		82		42		2		240
Current	3,661		1,839		565		45		6,110
30-59 days past due	56		58		18		1		133
Total	$	3,831	$	1,979	$	625	$	48	$	6,483

TROUBLED DEBT RESTRUCTURING

We make modifications to our finance receivables to assist borrowers during times of financial difficulties. When we modify a loan’s contractual terms for economic or other reasons related to the borrower’s financial difficulties and grant a concession that we would not otherwise consider, we classify that loan as a TDR finance receivable.

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Information regarding TDR finance receivables held for investment and held for sale were as follows:



(dollars in millions)	Personal Loans		SpringCastle Portfolio		Real Estate Loans		Total

March 31, 2015

TDR net finance receivables *	$	26	$	11	$	195	$	232
Allowance for TDR finance receivable losses	$	3	$	3	$	31	$	37
Number of TDR accounts	9,222		1,327		3,449		13,998

December 31, 2014

TDR net finance receivables *	$	22	$	10	$	196	$	228
Allowance for TDR finance receivable losses	$	1	$	3	$	32	$	36
Number of TDR accounts	8,075		1,159		3,463		12,697


*	TDR real estate loan net finance receivables at March 31, 2015 and December 31, 2014 include $90 million and $91 million , respectively, of TDR finance receivables held for sale.



(dollars in millions)	Personal Loans		SpringCastle Portfolio		Real Estate Loans		Total

Three Months Ended March 31, 2015

TDR net finance receivables (a) (b) (c)	$	—	$	—	$	1	$	1
Number of TDR accounts (b)	57		10		18		85

Three Months Ended March 31, 2014

TDR net finance receivables (a) (c)	$	—	$	—	$	16	$	16
Number of TDR accounts	15		—		229		244


(a)	Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted.


(b)	Includes 9 TDR real estate loan accounts totaling less than $1 million that were held for sale.


(c)	TDR personal loans for the three months ended March 31, 2015 and 2014 and TDR SpringCastle Portfolio for the three months ended March 31, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the table above.

Liquidity and Capital Resources

We have historically financed the majority of our operating liquidity and capital needs through a combination of cash flows from operations, securitization debt, unsecured debt, and borrowings under our secured term loan. In the future, we plan to finance our operating liquidity and capital needs through a combination of cash flows from operations, securitization debt, unsecured debt, other corporate debt facilities, and equity.

As a holding company, all of the funds generated from our operations are earned by our operating subsidiaries. Our operating subsidiaries’ primary cash needs relate to funding our lending activities, our debt service obligations, our operating expenses and, to a lesser extent, expenditures relating to upgrading and monitoring our technology platform, risk systems, and branch locations.

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Our insurance subsidiaries maintain reserves as liabilities on the balance sheet to cover future claims for certain insurance products. Claims reserves totaled $70 million as of March 31, 2015 .

At March 31, 2015 , we had $2.4 billion of cash and cash equivalents, and during the three months ended March 31, 2015 , SHI’s net income was less than $1 million. Our net cash inflow from operating and investing activities totaled $350 million for the three months ended March 31, 2015 . At March 31, 2015 , our remaining scheduled principal and interest payments for 2015 on our existing debt (excluding securitizations) totaled $1.1 billion . As of March 31, 2015 , we had $1.1 billion UPB of unencumbered personal loans and $646 million UPB of unencumbered real estate loans.

Based on our estimates and taking into account the risks and uncertainties of our plans, we believe that we will have adequate liquidity to finance and operate our businesses and repay our obligations as they become due for at least the next twelve months. In addition, we continue to evaluate our options for financing the purchase price for the Proposed Acquisition, which could be financed through cash on hand, proceeds from the sale of investment securities, the proceeds from the recent equity offering, issuance of debt securities, bank borrowings, securitizations or a combination thereof.

To reduce the risk associated with unfavorable changes in interest rates on our debt not offset by favorable changes in yield of our finance receivables, we monitor the anticipated cash flows of our assets and liabilities, principally our finance receivables and debt. We have funded finance receivables with a combination of fixed-rate and floating-rate debt and equity and have based the mix of fixed-rate and floating-rate debt issuances, in part, on the nature of the finance receivables being supported. At March 31, 2015 , we had no floating-rate debt. At December 31, 2014 , our floating-rate debt represented 1% of our borrowings on a historical accounting basis.

LIQUIDITY

Operating Activities

Cash from operations decreased $83 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to lower net interest income.

Investing Activities

Net cash provided by investing activities decreased $912 million for the three months ended March 31, 2015 when compared to the same period in 2014 primarily due to the sales of finance receivables held for sale originated as held for investment during 2014.

Financing Activities

Net cash provided by financing activities of $1.2 billion for the three months ended March 31, 2015 reflected the debt issuance associated with the 2015-A securitization. Net cash used by finance activities of $1.0 billion for the three months ended March 31, 2014 reflected the repayments of the secured term loan and the 2013-BAC trust notes.

Liquidity Risks and Strategies

SFC’s credit ratings are non-investment grade, which have a significant impact on our cost of, and access to, capital. This, in turn, can negatively affect our ability to manage our liquidity and our ability or cost to refinance our indebtedness.

There are numerous risks to our financial results, liquidity, capital raising, and debt refinancing plans, some of which may not be quantified in our current liquidity forecasts. These risks include, but are not limited, to the following:


•	our inability to grow or maintain our personal loan portfolio with adequate profitability;


•	the effect of federal, state and local laws, regulations, or regulatory policies and practices;


•	the liquidation and related losses within our remaining real estate portfolio could result in reduced cash receipts;


•	our ability to finance the Proposed Acquisition;


•	potential liability relating to real estate and personal loans which we have sold or may sell in the future, or relating to securitized loans; and


•	the potential for disruptions in the debt and equity markets.

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The principal factors that could decrease our liquidity are customer delinquencies and defaults, a decline in customer prepayments, a prolonged inability to adequately access capital market funding, and the funding requirements for the Proposed Acquisition. We intend to support our liquidity position by utilizing the following strategies:


•	maintaining disciplined underwriting standards and pricing for loans we originate or purchase and managing purchases of finance receivables;


•	pursuing additional debt financings (including new securitizations and new unsecured debt issuances, debt refinancing transactions and standby funding facilities), or a combination of the foregoing;


•	purchasing portions of our outstanding indebtedness through open market or privately negotiated transactions with third parties or pursuant to one or more tender or exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration, as we may determine; and


•	obtaining secured revolving credit facilities to allow us to use excess cash to pay down higher cost debt.

However, it is possible that the actual outcome of one or more of our plans could be materially different than expected or that one or more of our significant judgments or estimates could prove to be materially incorrect.

OUR INSURANCE SUBSIDIARIES

State law restricts the amounts our insurance subsidiaries, Merit and Yosemite, may pay as dividends without prior notice to, or in some cases approval from, the Indiana Department of Insurance. The maximum amount of dividends that can be paid without prior approval in a 12 month period, measured retrospectively from the date of payment, is the greater of 10% of policyholders’ surplus as of the prior year-end, or the net gain from operations as of the prior year-end.

OUR DEBT AGREEMENTS

On December 3, 2014, SHI entered into an Indenture and First Supplemental Indenture pursuant to which it agreed to fully and unconditionally guarantee the payments of principal, premium (if any) and interest on $700 million of 5.25% of Senior Notes due 2019 issued by SFC. As of March 31, 2015 approximately $700 million aggregate principal amount of senior notes were outstanding.

The debt agreements to which SFC and its subsidiaries are a party include customary terms and conditions, including covenants and representations and warranties. Some or all of these agreements also contain certain restrictions, including restrictions on the ability to create senior liens on property and assets in connection with any new debt financings and SFC’s ability to sell or convey all or substantially all of its assets, unless the transferee assumes SFC’s obligations under the applicable debt agreement.

With the exception of SFC’s junior subordinated debenture, none of our debt agreements require SFC or any of its subsidiaries to meet or maintain any specific financial targets or ratios.

Under our debt agreements, certain events, including non-payment of principal or interest, bankruptcy or insolvency, or a breach of a covenant or a representation or warranty may constitute an event of default and trigger an acceleration of payments. In some cases, an event of default or acceleration of payments under one debt agreement may constitute a cross-default under other debt agreements resulting in an acceleration of payments under the other agreements.

As of March 31, 2015 , we were in compliance with all of the covenants under our debt agreements.

Junior Subordinated Debenture

In January 2007, SFC issued $350 million aggregate principal amount of 60-year junior subordinated debenture (the “debenture”) under an indenture dated January 22, 2007 (the “Junior Subordinated Indenture”), by and between SFC and

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Deutsche Bank Trust Company, as trustee. The debenture underlies the trust preferred securities sold by a trust sponsored by SFC. SFC can redeem the debenture at par beginning in January 2017.

Pursuant to the terms of the debenture, SFC, upon the occurrence of a mandatory trigger event, is required to defer interest payments to the holders of the debenture (and not make dividend payments to SFI) unless SFC obtains non-debt capital funding in an amount equal to all accrued and unpaid interest on the debenture otherwise payable on the next interest payment date and pays such amount to the holders of the debenture. A mandatory trigger event occurs if SFC’s (1) tangible equity to tangible managed assets is less than 5.5% or (2) average fixed charge ratio is not more than 1.10x for the trailing four quarters (where the fixed charge ratio equals earnings excluding income taxes, interest expense, extraordinary items, goodwill impairment, and any amounts related to discontinued operations, divided by the sum of interest expense and any preferred dividends).

Based upon SFC’s financial results for the twelve months ended March 31, 2015, a mandatory trigger event did not occur with respect to the payment due in July 2015 as we were in compliance with both required ratios discussed above.

Structured Financings

We execute private securitizations under Rule 144A of the Securities Act of 1933. As of March 31, 2015 , our structured financings consisted of the following:



(dollars in millions)	Initial Note Amounts Issued (a)		Initial Collateral Balance (b)		Current Note Amounts Outstanding		Current Collateral Balance (b)		Current Weighted Average Interest Rate		Collateral Type	Revolving Period

Consumer Securitizations
SLFMT 2013-A	$	568	$	663	$	499	$	593	2.78	%	Personal loans	2 years
SLFMT 2013-B	370		442		370		442		3.99	%	Personal loans	3 years
SLFMT 2014-A	559		644		559		644		2.55	%	Personal loans	2 years
SLFMT 2015-A	1,163		1,250		1,162		1,250		3.47	%	Personal loans	3 years

Total consumer securitizations	2,660		2,999		2,590		2,929

SpringCastle Securitization
SCFT 2014-A	2,559		2,737		2,283		2,407		3.84	%	Personal and junior mortgage loans	N/A (c)

Total secured structured financings	$	5,219	$	5,736	$	4,873	$	5,336


(a)	Represents securities sold at time of issuance or at a later date and does not include retained notes.


(b)	Represents UPB of the collateral supporting the issued and retained notes.


(c)	Not applicable.

In addition to the structured financings included in the table above, we have access to four conduit facilities with a total borrowing capacity of $1.3 billion, as discussed in Note 10 of the Notes to Condensed Consolidated Financial Statements. At March 31, 2015 , no amounts had been drawn under these facilities.

We also completed a consumer loan securitization in April 2015. See Note 18 of the Notes to Condensed Consolidated Financial Statements for further information on this transaction. Our securitizations have served to partially replace secured and unsecured debt in our capital structure with more favorable non-recourse funding. Our overall funding costs are positively impacted by our increased usage of securitizations as we typically execute these transactions at interest rates significantly below those of our maturing secured and unsecured debt.

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The weighted average interest rates on our debt on a historical accounting basis were as follows:

Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements as defined by SEC rules. We had no off-balance sheet exposure to losses associated with unconsolidated VIEs at March 31, 2015 or December 31, 2014 , other than certain representations and warranties associated with the sales of the mortgage-backed retained certificates during 2014. As of March 31, 2015 , we had no repurchase activity related to these sales.

Critical Accounting Policies and Estimates

We describe our significant accounting policies used in the preparation of our consolidated financial statements in Note 2 of the Notes to Consolidated Financial Statements in Part II, Item 8 of our 2014 Annual Report on Form 10-K. We consider the following policies to be our most critical accounting policies because they involve critical accounting estimates and a significant degree of management judgment:


•	allowance for finance receivable losses;


•	purchased credit impaired finance receivables;


•	TDR finance receivables; and


•	fair value measurements.

We believe the amount of the allowance for finance receivable losses is the most significant estimate we make. See “—Critical Accounting Policies and Estimates — Allowance for Finance Receivable Losses” in Part II, Item 7 of our 2014 Annual Report on Form 10-K for further discussion of the models and assumptions used to assess the adequacy of the allowance for finance receivable losses and Note 5 of the Notes to Condensed Consolidated Financial Statements for period-to-period changes in the components of our allowance for finance receivable losses.

There have been no significant changes to our critical accounting policies or to our methodologies for deriving critical accounting estimates during the three months ended March 31, 2015 .

Recent Accounting Pronouncements

See Note 3 of the Notes to Condensed Consolidated Financial Statements for discussion of recently issued accounting pronouncements.

Seasonality

Our personal loan volume is generally highest during the second and fourth quarters of the year, primarily due to marketing efforts, seasonality of demand, and increased traffic in branches after the winter months. Demand for our personal loans is usually lower in January and February after the holiday season and as a result of tax refunds. Delinquencies on our personal loans tend to peak in the second and third quarters and higher net charge-offs on these loans usually occur at year end. These seasonal trends contribute to fluctuations in our operating results and cash needs throughout the year.

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Glossary of Terms



Average debt	average of debt for each day in the period
Average net receivables	average of net finance receivables at the beginning and end of each month in the period
Charge-off ratio	annualized net charge-offs as a percentage of the average of net finance receivables at the beginning of each month in the period
Delinquency ratio	UPB 60 days or more past due (greater than three payments unpaid) as a percentage of UPB
Gross charge-off ratio	annualized gross charge-offs as a percentage of the average of net finance receivables at the beginning of each month in the period
Trust Preferred Securities	capital securities classified as debt for accounting purposes but due to their terms are afforded, at least in part, equity capital treatment in the calculation of effective leverage by rating agencies
Loss ratio	annualized net charge-offs, net writedowns on real estate owned, net gain (loss) on sales of real estate owned, and operating expenses related to real estate owned as a percentage of the average of real estate loans at the beginning of each month in the period
Net interest income	interest income less interest expense
Recovery ratio	annualized recoveries on net charge-offs as a percentage of the average of net finance receivables at the beginning of each month in the period
Tangible equity	total equity less accumulated other comprehensive income or loss
Weighted average interest rate	annualized interest expense as a percentage of average debt
Yield	annualized finance charges as a percentage of average net receivables

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant changes to our market risk previously disclosed in Part II, Item 7A of our 2014 Annual Report on Form 10-K.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We are committed to maintaining disclosure controls and procedures designed to ensure that information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. Based on this evaluation, and in light of the previously identified material weakness in our internal control over financial reporting as of December 31, 2014, described in our 2014 Annual Report on Form 10-K, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2015.

We have taken and continue to take steps to remediate the underlying cause of the material weakness. These steps include strengthening our procedures and controls around validating the functionality of certain spreadsheets and reports used in the preparation and analysis of accounting and financial information, including developing specific guidelines for appropriate review procedures, such as validating inputs, assumptions and formulas, and providing additional training to our current accounting and finance personnel.

These actions are subject to ongoing review by our senior management, as well as oversight by the audit committee of our board of directors. We are placing a high priority on the remediation process and are committed to allocating the necessary resources to the remediation effort. To reduce the potential severity of the deficiency as soon as possible, we are focusing our initial efforts on those spreadsheets and reports that present a higher risk of a misstatement. When fully implemented and operating effectively, our efforts are expected to remediate the material weakness. However, we cannot provide any assurance that these efforts will be successful or that they will cause our disclosure controls and procedures or internal control over financial reporting to be effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

See Note 14 of the Notes to Condensed Consolidated Financial Statements in Part I of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors.

The unaudited pro forma financial information previously filed on Form 8-K on May 4, 2015 (the “Form 8-K”) was presented for illustrative purposes only and does not purport to be indicative of our financial condition or results of operations following the proposed acquisition by SHI pursuant to a Stock Purchase Agreement of all of the outstanding equity interests of OneMain for $4.25 billion in cash, subject to adjustment Proposed Acquisition.

The unaudited pro forma financial information contained in Form 8-K was presented for illustrative purposes only, is based on various adjustments, assumptions and preliminary estimates and may not be an indication of our financial condition or results of operations following the consummation of the offering of common stock completed on May 4, 2015 (the “offering”) and the Proposed Acquisition for several reasons. Our actual financial condition and results of operations following the consummation of the offering and the Proposed Acquisition may not be consistent with, or evident from, these pro forma financial statements. In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect our financial condition or results of operations following the consummation of the offering and the Proposed Acquisition. Our potential for future business success and operating profitability must be considered in light of the risks, uncertainties, expenses and difficulties typically encountered by recently combined companies. See "Unaudited Pro Forma Combined Financial Information" included in Exhibit 99.1 to the Form 8-K for more information.

The offering was not conditioned upon the closing of, and we are not required to use the net proceeds therefrom to consummate, the Proposed Acquisition, and even if we determine to use some or all of the net proceeds to fund the Proposed Acquisition, we may be unable to consummate the Proposed Acquisition. Accordingly, we will have broad discretion over the use of proceeds from the offering.

The offering was not conditioned upon the closing of, and we are not required to use the net proceeds therefrom to consummate, the Proposed Acquisition. Accordingly, the proceeds from the offering will not be designated for a specific use. Under these circumstances, our board of directors and management will have broad discretion to use the proceeds of the offering in our business, including for general corporate purposes.

Even if we determine to use some or all of the net proceeds to fund the Proposed Acquisition, we may be unable to consummate the Proposed Acquisition. The Proposed Acquisition is subject to a number of conditions that must be satisfied before we can complete the transaction. While we anticipate closing the Proposed Acquisition in the third quarter of 2015, we cannot guarantee when, or whether, the Proposed Acquisition will be completed. The completion of the Proposed Acquisition is subject to a number of customary conditions, including, among other things:


•	The expiration or early termination of any applicable waiting period under the HSR Act, as amended;


•	receipt of all consents, authorizations or approvals of all state regulatory authorities governing consumer lending and insurance in various states in which OneMain or any of its subsidiaries operate;


•	the accuracy of the other party's representations and warranties contained in the Stock Purchase Agreement as of the closing date of the Proposed Acquisition; and


•	compliance by the other party with its covenants and agreements contained in the Stock Purchase Agreement.

All other material risk factors have been previously disclosed in Part I, Item 1A of our 2014 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

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Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.



Exhibits are listed in the Exhibit Index beginning on page	72	herein.

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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 thereunto duly authorized.



		SPRINGLEAF HOLDINGS, INC.
		(Registrant)

Date:	May 8, 2015	By	/s/ Minchung (Macrina) Kgil
			Minchung (Macrina) Kgil
			Executive Vice President and Chief Financial Officer
			(Duly Authorized Officer and Principal Financial Officer)

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Exhibit Index



Exhibit

2.1		Stock Purchase Agreement, dated as of March 2, 2015, by and between Springleaf Holdings, Inc. and CitiFinancial Credit Company (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 3, 2015).

3 a.		Restated Certificate of Incorporation of Springleaf Holdings, Inc. Incorporated by reference to Exhibit (3.1) to our Quarterly Report on Form 10-Q for the period ended September 30, 2013.

b.		Amended and Restated Bylaws of Springleaf Holdings, Inc. Incorporated by reference to Exhibit (3.2) to our Quarterly Report on Form 10-Q for the period ended September 30, 2013.

4.1		Indenture dated as of February 26, 2015, among Springleaf Funding Trust 2015-A, as Issuer, Springleaf Finance Corporation, as Servicer, and Wells Fargo Bank, National Association. Incorporated by reference to Exhibit (10.1) to our Current Report on Form 8-K dated March 4, 2015.

10.1 *		Offer Letter by Springleaf Finance, Inc. and Springleaf General Services Corporation to Lawrence Skeats, dated as of January 3, 2014.

10.2 *		Employment Agreement by and among Springleaf Finance, Inc., Springleaf General Services Corporation and Robert Hurzeler, dated as of January 17, 2014.

10.3 *		Employment Agreement by and among Springleaf Finance, Inc., Springleaf General Services Corporation and Robert Hurzeler, dated as of April 13, 2015, to be effective as of January 1, 2016.

10.4 *		Employment Agreement by and among Springleaf Finance, Inc., Springleaf General Services Corporation and Timothy Ho, dated as of February 13, 2014.

10.5 *		Employment Agreement by and among Springleaf Finance, Inc., Springleaf General Services Corporation and Timothy Ho, dated as of April 13, 2015, to be effective as of January 1, 2016.

31.1		Rule 13a-14(a)/15d-14(a) Certifications of the President and Chief Executive Officer of Springleaf Holdings, Inc.

31.2		Rule 13a-14(a)/15d-14(a) Certifications of the Executive Vice President and Chief Financial Officer of Springleaf Holdings, Inc.

32.1		Section 1350 Certifications

101 **		Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.


*	Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Quarterly Report on Form 10-Q pursuant to Item 6.


**	As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Section 11 and 12 of the Securities and Exchange Act of 1933 and Section 18 of the Securities and Exchange Act of 1934.

January 3, 2014

Lawrence Skeats

Dear Mr. Skeats:

I am pleased to extend to you a contingent offer of employment. You will be employed by Springleaf GeneralServices Corp., providing services on behalf of Springleaf Finance, Inc. and its subsidiaries. The conditions of employment are outlined below:


1.	Your position will be Chief Administrative Officer with a start date to be January 6, 2014. This position is a full-time, exempt position. You will report directly to Jay Levine.

Your beginning salary will be $350,000 on an annual basis. In addition, you will be eligible for a guaranteed bonus to be paid under Springleaf’s bonus plan of $500,000 to be granted on the normal bonus pay-out for Springleaf Financial Services for year-end of 2014 to be paid in 2015. In order to receive the bonus, you must be actively employed by Springleaf on the day the bonus is paid. If you resign (or give notice of your resignation), or if your employment otherwise is terminated for any reason, you will not be eligible for the bonus. Your base salary and bonus are payable in accordance with Springleaf’s regular bi-weekly payroll practices and are subject to applicable taxes and payroll deductions.


3.	Your primary work location will be at the company's offices in Greenwich, CT. In the normal course of business, you will be required to travel to Evansville as designated by your manager. Springleaf will pay for your travel, lodging, and other related business travel expenses as outlined in company policy for these initial and ongoing trips.


4.	You will be entitled to employee benefits provided by the company. We ask you to review benefits information that will be sent to you separately. You must make a decision to enrol l for benefits or decline benefits upon hire as soon as possible, but no later than 31 days from your hire date.


5.	This offer of employment is contingent upon satisfactory results from a criminal background investigation and education and reference checks. Please note that these reference and background checks may not be completed by your start date. If the outcome of these checks is not satisfactory, this offer may be withdrawn and/or your employment may be terminated immediately.


6.	This offer is also contingent upon your execution of the enclosed Confidentiality and Non-Solicitation Agreement.

Final personnel forms will be completed at your orientation.

I have enclosed information regarding your responsibility to comply with the Immigration Reform and Control Act. Enclosed is a list of documents that can provide proof of your eligibility to work in the United States. Please bring one original document from List A or one document from List B and one document from List C with you when you report to orientation. Please call our office if you have any questions regarding this matter.

This offer letter is not a guarantee of employment for a fixed term. You will be (as set forth in the employment application) employed "at will," with the privilege of terminating your employment at any time and for any reason; the Company will have that same privilege.

If you have any questions regarding the details listed above, please contact Tonya Lynam at (812) 462-5262. We look forward to having you join our staff.

Sincerely,

Tonya Lynam

Sr. Employment Specialist

Enclosures

SPRINGLEAF HOLDINGS, INC.
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into effective as of January 17, 2014 (the “ Effective Date ”), by and among Springleaf Holdings, Inc. a Delaware corporation and Springleaf Finance, Inc., an Indiana corporation (collectively “ Springleaf ” and collectively with their subsidiaries (including Springleaf General Services Corporation), the “ Company ”); Springleaf General Services Corporation, a subsidiary of Springleaf Finance, Inc. (the “ Employer ”); and Robert Hurzeler (“ Executive ”). Where the context permits, references to the “Company” shall include the Company and any successor of the Company.

W I T N E S S E T H:

WHEREAS , Springleaf, the Employer and Executive desire to enter into an employment agreement, effective as of the Effective Date, pursuant to which Executive will be employed as the Executive Vice President, Direct Auto Lending Operations of the Company on the terms and subject to the conditions more fully set forth in this Agreement.

NOW, THEREFORE , in consideration of the mutual promises, covenants and agreements herein contained, together with other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

1. SERVICES AND DUTIES . Subject to Section 3 hereof, from and after the Effective Date, Executive shall, pursuant to the terms of this Agreement, be employed by the Employer as the Executive Vice President, Direct Auto Lending Operations of the Company and shall report directly to the Chief Executive Officer of the Company (the “ CEO ”). During the Term (as defined in Section 3), Executive shall be a full-time employee of the Employer and shall dedicate all of Executive’s working time to the Company and shall have no other employment and no other business ventures which are undisclosed to the Company or which conflict with Executive’s duties under this Agreement. Executive shall perform such duties consistent with his executive position hereunder as are required by the Company from time to time, including serving as the Executive Vice President, Direct Auto Lending Operations of the Company, and such other duties that are normally associated with Executive’s position, together with such additional duties, commensurate with Executive’s position, as may be assigned to Executive from time to time by the CEO. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) participating in trade associations or industry organizations which are related to the business of the Company or engaging in charitable, civic or political activities, (ii) engaging in personal investment activities for Executive that do not give rise to any conflicts of interest with the Company or its “Affiliates” (as defined below) or (iii) subject to prior approval of the CEO, accepting directorships unrelated to the Company that do not give rise to any conflict of interests with the Company or its Affiliates, in each case so long as the interests in (i), (ii) and (iii) above do not interfere, individually or in the aggregate, with the performance of Executive’s duties hereunder, including the restrictive covenants set forth in Section 7 hereof, or in any other agreement between Executive and the Company (the “ Restrictive Covenants ”). The

Robert Hurzeler 1 Employment Agreement

Company acknowledges and approves the current activities of Executive as set forth on Schedule 1 hereto.

2. LOCATION . The principal location of Executive’s employment with the Employer shall be split, in accordance with a schedule to be determined from time to time by the CEO, between an office to be established by the Company in the Chicago, Illinois area and at the Company’s offices in Wilmington, Delaware. Executive understands and agrees that Executive may be required to travel extensively in performing Executive’s duties, which such travel may include frequent trips to the Company’s offices in (i) Greenwich, Connecticut, (ii) Evansville, Indiana and (iii) other or future Company locations.

3. EMPLOYMENT TERM . Executive’s employment under the terms and conditions of this Agreement shall commence on the Effective Date. Such employment shall continue for an initial term ending on December 31, 2015 (the “ Initial Term ”) and shall be automatically extended on the expiration of the Initial Term and on each anniversary of the expiration of the Initial Term for an additional one-year term (each, a “ Renewal Term ”). The Initial Term and any Renewal Terms are collectively referred to as the “ Term ” and the Term shall continue as described in the preceding sentence, unless Executive or the Employer has given written notice to the other no less than ninety (90) days prior to the expiration of the Term that the Term shall not be so extended. Notwithstanding the above, the Term shall expire immediately upon the termination of Executive’s employment pursuant to Section 6 hereof. For the avoidance of doubt, upon the expiration of the Term, the parties’ rights and obligations hereunder, other than with respect to the provisions set forth in Sections 5(d) and (e), 6, 7, 9 and 10(k) hereof, shall expire. Following the expiration of the Term, any continued employment of Executive shall be deemed “at-will.”

4. COMPENSATION .

(a) Base Compensation . In consideration of Executive’s full and faithful satisfaction of Executive’s duties under this Agreement, the Company agrees to pay to Executive a base salary in the amount of three hundred fifty thousand dollars ($350,000) per annum (the “ Base Compensation ”), payable in such installments as the Company pays its similarly placed employees (but not less frequently than each calendar month), subject to customary employee contributions to any health, welfare and/or retirement programs in which Executive is enrolled. The Base Compensation may be increased from time to time at the Company’s sole discretion.

(b) Annual Bonus . In addition to the Base Compensation, Executive shall be eligible to receive a bonus in respect of each full calendar year during the Term (the “ Annual Bonus ”), subject to the terms, conditions and objectives agreed upon between the CEO and Executive each year and payable under the Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan, as it may be amended from time to time, or any successor thereto (the “ Incentive Plan ”); provided, however, that the Annual Bonus payable to Executive in respect of calendar year 2014 shall be $500,000.00. For calendar year 2014, the first $500,000 of total annual compensation shall be paid in cash and any remainder will be paid 50% in cash and 50% in equity awards, which equity awards will (i) be subject to the terms and conditions of the Incentive Plan and the applicable award agreements thereunder and (ii) relate to a number of shares of common stock of Springleaf Holdings, Inc. (“ Holdings ”) as calculated by the Compensation Committee of Holdings (the

Robert Hurzeler 2 Employment Agreement

“ Compensation Committee ”). For subsequent years, the dollar threshold and the proportion of cash and equity award is subject to change to the extent such change is made for other members of senior management. The Annual Bonus shall be paid or awarded, as applicable, to Executive when bonuses are normally paid in the year following the end of the calendar to which it relates, provided Executive is an active employee of the Company at, and has not given notice of termination of employment prior to, the date on which such Annual Bonus is paid.

(c) Sign-On Bonus . On the first regularly scheduled payroll date of the Company following the Effective Date, the Company shall pay Executive a sign-on cash bonus of one hundred fifty thousand dollars ($150,000.00) (the “ Sign-On Bonus ”). If Executive’s employment is terminated prior to the first anniversary of the Effective Date either (i) by the Employer for “Cause” (as defined below) or (ii) voluntarily by Executive (other than as a result of “Disability” (as defined below)), Executive shall repay the full amount of the Sign-On Bonus to the Company within ten (10) business days following the date of such termination of employment.

(d) One-Time Grant . In addition to the Base Compensation and Annual Bonus, Executive shall be eligible to receive an equity award grant subject to the terms and conditions set forth on Schedule 2 hereto (the “ One-Time Grant ”).

(e) Withholding . All taxable compensation payable to Executive shall be subject to any applicable withholding taxes and such other taxes as are required under Federal law or the law of any state or governmental body to be collected with respect to compensation paid by the Company to Executive.

5. BENEFITS AND PERQUISITES .

(a) Retirement and Welfare Benefits . During the Term, Executive shall be eligible to participate in all benefit plans made available to the Company’s similarly situated executives. The benefits shall be subject to the applicable limitations and requirements imposed by the terms of such benefit plans and shall be governed in all respects in accordance with the terms of such plans as from time to time in effect. Nothing in this Section 5, however, shall require the Company to maintain any benefit plan or provide any type or level of benefits to its current or former employees, including Executive.

(b) Paid Time Off . During the Term, Executive shall be eligible to participate in the paid time off policy generally applicable to the Company’s similarly situated executives, as it may be amended from time to time.

(c) Reimbursement of Expenses . The Company shall reimburse Executive for any expenses reasonably incurred by Executive during the Term, in furtherance of Executive’s duties hereunder, including business travel, meals and accommodations, upon submission by Executive of vouchers or receipts and in compliance with such rules and policies relating thereto as the Company may from time to time adopt.

Robert Hurzeler 3 Employment Agreement

(d) Indemnification; Officer and Director Liability Insurance . During the term of Executive’s employment by the Employer (whether during the Term or after the end of the Term), the Company will continue to maintain the officer and director liability insurance policy currently in effect, and the Company will determine the appropriate limits, level and coverage of officer and director liability insurance from time to time.

6. TERMINATION . Upon any termination of Executive’s employment with the Employer, Executive shall be entitled to receive the following: (i) any accrued but unpaid Base Compensation (to be paid as provided in Section 4(a)); (ii) reimbursement for expenses incurred by Executive prior to the date of termination in accordance with Section 5(c) hereof; (iii) vested and accrued benefits, if any, to which Executive may be entitled under the Company’s employee benefit plans as of the date of termination; and (iv) any additional amounts or benefits due under any applicable plan, program, agreement or arrangement of the Company or its Affiliates, including any such plan, program, agreement or arrangement relating to equity or equity-based awards (the amounts and benefits described in clauses (i) through (iv) above, collectively, the “ Accrued Benefits ”). Accrued Benefits under this Section 6 shall in all events be paid in accordance with the Company’s payroll procedures, expense reimbursement procedures or plan terms, as applicable. During any notice period required under this Section 6, (A) Executive shall remain employed by the Employer and shall continue to be bound by all the terms of this Agreement and any other applicable duties and obligations to the Company, (B) the Company may direct Executive not to report to work, and (C) Executive shall only undertake such actions on behalf of the Company as expressly directed by the Company. For purposes of this Agreement, a transfer of Executive’s employment among the Employer, any direct or indirect parent of Springleaf Financial Holdings, LLC, any subsidiary of Springleaf Financial Holdings, LLC or any other entity controlled directly or indirectly by Springleaf Financial Holdings, LLC shall not be deemed to be a termination of Executive’s employment, and the entity to which Executive’s employment is transferred shall thereafter be deemed to be the Employer for purposes of this Agreement.

(a) Termination by the Employer for Cause or Voluntarily by Executive . The Term and Executive’s employment hereunder may be terminated (i) by the Employer for “Cause” (as defined below), effective thirty (30) days following the date Executive receives written notice to such effect, provided that Executive has not corrected any actions or omissions constituting Cause, if such actions or omissions are capable of correction or (ii) voluntarily by Executive at any time, effective ninety (90) days following the date on which a written notice to such effect is delivered to the Employer (or its successors). If Executive’s employment hereunder is terminated during the Term by the Employer for Cause or voluntarily by Executive, Executive shall not be entitled to any further compensation or benefits other than the Accrued Benefits.

(b) Termination by the Employer without Cause . The Term and Executive’s employment hereunder may be terminated by the Employer at any time without Cause, effective thirty (30) days following the date on which a written notice to such effect is delivered to Executive. If Executive’s employment hereunder is terminated during the Term by the Employer other than for Cause, and other than due to Executive’s death or “Disability” (as defined below), then Executive shall be entitled to (1) the Accrued Benefits and (2) upon Executive’s execution

Robert Hurzeler 4 Employment Agreement

of a separation agreement containing a general release of claims in a form acceptable to the Company (the “ Release ”), and the expiration of the applicable revocation period with respect to such Release within sixty (60) days following the date of termination, and provided that Executive is in continued compliance with the Restrictive Covenants and any other ongoing obligation to which Executive is subject as of the date of termination:

(1) The continuation of Executive’s then-current Base Compensation, to be paid in equal installments in accordance with the regular payroll practices of the Company will continue to be paid for the “Non-Compete Period” (as defined in Section 7(c)(2)) which extends following the termination of Executive employment, commencing on the first payroll date following the date of termination, but with the first actual payment to be made on the sixtieth (60 ^th ) day following the date of termination, which payment shall consist of all amounts otherwise payable to Executive pursuant to this subsection (1) between the date of termination and the sixtieth (60 ^th ) day following the date of termination; and

(2) An amount equal to the average Annual Bonus earned and paid in respect of the three years completed prior to the year of termination, provided that if Executive has not received three Annual Bonuses or if there were no Annual Bonuses paid with respect to any of the three years prior to the year of termination, such average shall be calculated with respect to the lesser number of years for which Executive received a non-zero Annual Bonus, pro-rated based on the number of days in which Executive actively served as the Executive Vice President, Direct Auto Lending Operations during such year (a “ Pro-Rata Bonus ”), to be paid at such time as Annual Bonuses are normally paid in accordance with Section 4(b). Notwithstanding the foregoing, if the Company is subject to the provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “ Code ”), and intends that Annual Bonus payments are to qualify as “qualified performance-based compensation” under Section 162(m) of the Code, the Pro-Rata Bonus shall be determined based on actual performance for the year in which the termination occurs and shall be paid at the time bonuses are paid to employees generally.

(c) Death or Disability . If Executive’s employment is terminated by reason of Executive’s death or Disability prior to the end of the Term, Executive (or Executive’s beneficiary or estate, as applicable) shall be entitled to (i) the Accrued Benefits and (ii) upon Executive’s (or his estate’s) execution of the Release, and the expiration of the applicable revocation period with respect to such Release within sixty (60) days following the date of termination (or, if later, within twenty (20) days of the date on which Executive’s executor is first appointed and empowered to execute the Release), and provided that Executive is in continued compliance with the Restrictive Covenants or in any other agreement between Executive and the Company or to which Executive is a party or any other ongoing obligation to which Executive is subject as of the date of termination, a Pro-Rata Bonus, to be paid at such time as bonuses are normally paid to employees generally.

(d) Definitions . For purposes of this Agreement:

“ Affiliate ” means an affiliate of the Company (or other referenced entity, as the case may be) as defined in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended.

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“ Cause ” means (i) Executive’s continued failure to substantially perform his duties (other than as a result of death or Disability); (ii) Executive’s dishonesty in the performance of his duties ( other than de minimis acts ) ; (iii) Executive’s indictment, conviction or entering of a plea of nolo contendere for a crime constituting (x) a felony or (y) a misdemeanor involving moral turpitude; (iv) Executive’s willful malfeasance or willful misconduct in connection with his services to the Company ( other than de minimis acts ) ; (v) any act or omission which is materially injurious to the financial condition or business reputation of the Company or any of its subsidiaries or Affiliates; or (vi) Executive’s commission of any breach of the Restrictive Covenants; provided, however, that discharge pursuant to clauses (i) or (vi) will not constitute discharge for “Cause” unless Executive has received written notice from the Company stating the nature of such breach and affording him an opportunity to correct fully the act(s) or omission(s), if such a breach is capable of correction, described in such notice within thirty (30) days following his receipt of such notice.

“ Disability ” means Executive’s receiving long-term disability benefits under the Company’s long-term disability plan for a period of not less than three (3) months by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months or Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.

(e) Resignation as Officer . Upon a termination of employment for any reason, Executive shall resign each position (if any) that Executive then holds as an officer of the Company. Executive’s execution of this Agreement shall be deemed the grant by Executive to the officers of the Company of a limited power of attorney to sign in Executive’s name and on Executive’s behalf any such documentation as may be required to be executed solely for the limited purposes of effectuating such resignations.

7. COVENANTS . Executive understands that the Company is continuously involved in the development, receipt, use and refinement of information that is proprietary, confidential or that has significant commercial value. Executive acknowledges that such information is essential to the Company’s successful business operations and that disclosure to third parties or other unauthorized use may cause material harm to the Company.

(a) Confidentiality .

Robert Hurzeler 6 Employment Agreement

contained herein shall not apply to Proprietary Information which (i) is or becomes generally available to the public other than by unauthorized disclosure by Executive in violation of this Agreement or other obligation of confidentiality, (ii) which Executive can prove by documentary evidence he or she already knew prior to his employment or retention by the Company, or (iii) becomes available on a non-confidential basis from a third party not under an obligation to any person to keep such information confidential.

(2) Without prejudice to or limitation on any other confidentiality obligation imposed by law, Executive agrees to keep secret and retain in strictest confidence all Proprietary Information, and not to use such information for Executive’s benefit or the benefit of others, except in connection with the business and affairs of the Company. Executive shall not disclose Proprietary Information to any person or use Proprietary Information in any way except (a) as required or otherwise appropriate in the course of his duties to the Company, (b) to assist the Company on Company matters, or (c) if required by law or legal process.

(3) All memoranda, notes, lists, records, property and any other products or documents (and all copies and excerpts thereof), whether visually perceptible, machine-readable or otherwise, made, produced or compiled by Executive or made available to Executive concerning the business of the Company, shall at all times be the property of the Company and shall be delivered to the Company (i) at any time upon its request, or (ii) upon Executive’s separation from employment with the Company.

(b) Intellectual Property .

(1) Executive agrees that all “Company Materials” (defined below) shall be deemed “work made for hire” by the Company as the “author” and owner to the extent permitted by United States copyright law. To the extent (if any) that some or all of the Company Materials do not constitute “work made for hire,” Executive hereby irrevocably assigns to the Company for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, all right, title and interest in and to such Company Materials (including without limitation any and all copyright rights, patent rights and trademark rights and goodwill associated therewith). Executive also hereby irrevocably grants to the Company for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, a royalty-free, world-wide, perpetual, nonexclusive license to use any Prior Materials (defined below) in connection with use by the Company of any Company Materials incorporating such Prior Materials. The provisions of this paragraph will apply to all Company Materials which are or have been conceived or developed by Executive, solely or jointly, whether or not further development or reduction to practice may take place after the termination of Executive’s employment or retention, by the Company. “ Materials ” means all articles, reports, documents, memoranda, notes, other works of authorship, data, databases, discoveries, designs, developments, ideas, creative works, improvements, inventions, know-how, processes, computer programs, software, source code, techniques and useful ideas of any description whatsoever (or portions thereof).

Robert Hurzeler 7 Employment Agreement

trademark or similar statutes, which either (i) are related to the current or anticipated business or activities of the Company; (ii) fall within Executive’s responsibilities while retained by or employed with the Company; or (iii) are otherwise developed by Executive through the use of the Company’s confidential information, equipment, software, or other facilities or resources at time during which Executive has been a consultant, or employee (temporary or otherwise) of the Company. “ Prior Materials ” means any Materials in which Executive has any ownership or license (with the right to grant sublicenses) rights or interest that came into existence prior to its retention by or employment with the Company that Executive incorporates during the period of such employment or retention in any manner into any Company Materials.

(3) Executive further agrees that Executive will execute and deliver to the Company any and all further documents or instruments and do any and all further acts which the Company reasonably requests in order to perfect, confirm, defend, police and enforce the Company’s intellectual property rights, and hereby grants to the officers of the Company an irrevocable power of attorney, coupled with interest, to such end.

(1) Executive shall not, directly or indirectly, during his employment with the Company, provide consultative services to, own, manage, operate, join, control, be employed by, participate in, or be connected in a business venture with, any business, individual, partner, firm, corporation, or other entity that directly or indirectly competes with (i) the Company or (ii) any direct or indirect parent of Springleaf, other than Fortress Investment Group LLC or any indirect parent of Springleaf that is a private investment fund, alternative asset company or related managed account managed by Fortress Investment Group LLC.

(2) Executive shall not, directly or indirectly, during the twelve (12) month period following the notice of termination of employment by Executive or the Company for any reason or no reason (the “ Non-Compete Period ”), provide consultative services to, own, manage, operate, join, control, be employed by, participate in, or be connected with, any business, individual, partner, firm, corporation, or other entity that directly or indirectly competes with the Company in the business of direct consumer non-real estate finance and credit insurance anywhere in the United States.

(3) Notwithstanding the foregoing, the following shall not be deemed a violation of this Agreement: the “beneficial ownership” by Executive, either individually or as a member of a “group” (as such terms are used in Rule 13d of the general rules and regulations under the Securities Exchange Act of 1934) of stock, but not more than five percent (5%) of the voting stock, of any public company.

(d) Non-Solicitation .

(1) Executive shall not, directly or indirectly, during his employment with the Company and for twenty-four (24) months following the effective date of his termination of employment by Executive or the Company for any reason or no reason, either (x) solicit or encourage to leave the employment of the Company or its Affiliates, any employee, consultant,

Robert Hurzeler 8 Employment Agreement

independent contractor or other service provider thereof (or knowingly assist any other person in so soliciting, encouraging, enticing or inducing), or hire any person who has left the employment of, or has ceased providing services to, the Company or its Affiliates during the immediately preceding one-year period without the prior written consent of the Company or (y) disrupt, damage, impair or interfere with business of the Company by raiding Company employees.

(2) Executive shall not, directly or indirectly, during his employment with the Company and for twenty-four (24) months following the effective date of his termination of employment by Executive or the Company for any reason or no reason, whether for his own account or for the account of any other person, firm, corporation or other business organization, directly, or indirectly by assisting others, (x) solicit or attempt to solicit any business from any of the clients or customers, or prospective clients or customers, with whom Executive had material contact during the last two (2) years of his employment with the Company, for the purpose of providing services or products that are competitive with those provided by the Company, or (y) intentionally interfere with the relationship of the Company or any of its Affiliates, or endeavor to entice away from the Company or any Affiliates, any clients or customers of the Company or any of its Affiliates. As used in the previous sentence, “material contact” means dealt with, supervised or coordinated dealings with, did work related to, obtained confidential information concerning, or had resultant earnings on.

(e) Mutual Non-Disparagement .

(1) During Executive’s employment with the Company and at all times thereafter, Executive shall not, except to the extent required by law or legal process, make, or cause to be made, any statement or communicate any information (whether oral or written) that disparages or reflects negatively on the Company or its direct and indirect parents, subsidiaries and Affiliates, or any of their respective officers, directors, partners, shareholders, attorneys, employees and agents.

(2) At all times following termination of Executive’s employment with the Company, the Company shall not make, and shall use good faith efforts to not permit its executive officers or directors to make, any statement or communicate any information (whether oral or written) that disparages or reflects negatively on Executive, except to the extent required by law, legal process or applicable securities considerations.

(f) Enforcement . If Executive commits a breach of, or is about to commit a breach of, any of the provisions in this Section 7, the Company shall have the right to have such provisions specifically enforced by any court having equity jurisdiction without being required to post bond or other security and without having to prove the inadequacy of the available remedies at law, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. In addition, the Company may take all such other actions and remedies available to it under law or in equity and shall be entitled to such damages as it can show it has sustained by reason of such breach.

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(g) Acknowledgment . The Company and Executive acknowledge that (i) the type and periods of restrictions imposed by this Agreement are fair and reasonable and are reasonably required in order to protect and maintain the proprietary interests of the Company and its legitimate business interests and the goodwill associated with its business; (ii) the time, scope, geographic area and other provisions of this Agreement have been specifically negotiated by sophisticated commercial parties, represented by legal counsel; and (iii) because of the nature of the business engaged in by the Company and the fact that investors can be and are serviced and investments can be and are made by the Company wherever they are located, Executive acknowledges and agrees that the geographic limitation is reasonable. If any provision of this Section 7, or any part thereof, is held to be unenforceable by reason of it extending for too great a period of time or over too great a geographic area or by reason of it being too extensive in any other respect, the parties agree (x) such covenant shall be interpreted to extend only over the maximum period of time for which it may be enforceable and/or over the maximum geographic areas as to which it may be enforceable and/or over the maximum extent in all other respects as to which it may be enforceable, all as determined by the court making such determination and (y) in its reduced form, such covenant shall then be enforceable, but such reduced form of covenant shall only apply with respect to the operation of such covenant in the particular jurisdiction in or for which such adjudication is made. Each of the covenants and agreements in this Agreement are distinct and severable.

8. ASSIGNMENT . This Agreement, and all of the terms and conditions hereof, shall bind the Company and their successors and assigns. No transfer or assignment of this Agreement shall release the Company from any obligation to Executive hereunder. Neither this Agreement, nor any of the Company’s rights or obligations hereunder, may be assigned or otherwise subject to hypothecation by Executive, and any such attempted assignment or hypothecation shall be null and void. The Company may assign the rights and obligations of the Company hereunder, in whole or in part, to any of the Company’s subsidiaries, Affiliates or parent corporations, or to any other successor or assign in connection with the sale of all or substantially all of the Company’s assets or stock or in connection with any merger, acquisition and/or reorganization, provided the assignee assumes the obligations of the Company hereunder.

Robert Hurzeler 10 Employment Agreement

Executive’s termination of employment constitute a deferral of compensation subject to Section 409A of the Code and Executive is a “specified employee” within the meaning of Section 409A of the Code at the time of his separation from service, any amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following an Executive’s separation from service shall instead be paid on the first business day after the date that is six months following Executive’s separation from service (or, if earlier, Executive’s date of death). To the extent required to avoid an accelerated or additional tax under Section 409A of the Code, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in kind benefits provided to Executive) during one year may not affect amounts reimbursable or provided in any subsequent year and the right to reimbursement of in-kind benefits provided under this Agreement shall not be subject to liquidation or exchange for another benefit. The Company makes no representation that any or all of the payments described in this Agreement will be exempt from, or comply with, Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment made in accordance with the provisions of this Agreement.

10. GENERAL .

(a) Notices . Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of one (1) business day following personal delivery (including personal delivery by telecopy or telex), or the third (3 ^rd ) business day after mailing by first class mail to the recipient at the address indicated below:

To the Company or the Employer:

Springleaf Holdings, Inc.

601 NW 2 ^nd St.

Evansville, IN 47708

Attn: Scott D. McKinlay, General Counsel

with a copy which shall not constitute notice to:

Springleaf Holdings, Inc.
1700 East Putnam Avenue
Greenwich, CT 06870

Attn: Jay Levine, CEO

To Executive:

At the address shown in the Company’s personnel records

or to such other address or to the attention of such other person as the recipient party will have specified by prior written notice to the sending party.

Robert Hurzeler 11 Employment Agreement

(b) Severability . Any provision of this Agreement which is deemed by a court of competent jurisdiction to be invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this paragraph be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable by a court of competent jurisdiction because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable.

(c) Entire Agreement . This document, together with the schedules hereto and all restrictive covenants in any and all agreements between Executive and the Company or to which Executive is a party constitute the final, complete, and exclusive embodiment of the entire agreement and understanding between the parties related to the subject matter hereof and to the compensatory arrangements between the Company and Executive and except as otherwise explicitly set forth in this Agreement, supersedes and preempts any prior or contemporaneous understandings, agreements, term sheets, prior drafts or representations by or between the parties, written or oral.

(d) Counterparts . This Agreement may be executed on separate counterparts, any one (1) of which need not contain signatures of more than one (1) party, but all of which taken together will constitute one and the same agreement.

(e) Amendments . No amendments or other modifications to this Agreement may be made except by a writing signed by all parties. No amendment or waiver of this Agreement requires the consent of any individual, partnership, corporation or other entity not a party to this Agreement. Nothing in this Agreement, express or implied, is intended to confer upon any third person any rights or remedies under or by reason of this Agreement.

(f) Choice of Law . All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the laws of the State of Indiana without giving effect to principles of conflicts of law of such state.

(g) Survivorship . The provisions of this Agreement necessary to carry out the intention of the parties as expressed herein shall survive the termination or expiration of this Agreement.

(h) Waiver . The waiver by either party of the other party’s prompt and complete performance, or breach or violation, of any provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation, and the failure by any party hereto to exercise any right or remedy which it may possess hereunder shall not operate nor be construed as a bar to the exercise of such right or remedy by such party upon the occurrence of any subsequent breach or violation. No waiver shall be deemed to have occurred unless set forth in a writing executed by or on behalf of the waiving party. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate

Robert Hurzeler 12 Employment Agreement

only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

(i) Captions . The captions of this Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision hereof.

(j) Construction . The parties acknowledge that this Agreement is the result of arm’s-length negotiations between sophisticated parties, each afforded representation by legal counsel. Each and every provision of this Agreement shall be construed as though both parties participated equally in the drafting of the same, and any rule of construction that a document shall be construed against the drafting party shall not be applicable to this Agreement.

(k) Dispute Resolution . Except as necessary for the Company and its subsidiaries, Affiliates, successors or assigns or Executive to specifically enforce or enjoin a breach of this Agreement, the parties agree that any and all disputes that may arise in connection with or otherwise relate to this Agreement, or any dispute that relates in any way, in whole or in part, to Executive’s services on behalf of the Company or any subsidiary, the termination of such services or any other dispute by and between the parties or their subsidiaries, Affiliates, successors or assigns, shall be submitted to binding arbitration in accordance with the terms of the Springleaf Finance Dispute Resolution Program, as in effect from time to time, or any successor thereto.

11. Executive Representation and Acceptance . By signing this Agreement, Executive hereby represents that Executive is not currently under any contractual obligation to work for another employer and that Executive is not restricted by any agreement or arrangement from entering into this Agreement and performing Executive’s duties hereunder.

[Signature Page Follows]

Robert Hurzeler 13 Employment Agreement

IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto have executed and delivered this Agreement as of the year and date first above written.

SPRINGLEAF HOLDINGS, INC.

By:
    Name:
    Title:

SPRINGLEAF FINANCE, INC.

By:
    Name:
    Title:

SPRINGLEAF GENERAL SERVICES CORPORATION

By:
    Name:
    Title:

EXECUTIVE

____________________________________ Robert Hurzeler

Robert Hurzeler 14 Employment Agreement

Schedule 1

CURRENT ACTIVITIES

None

[End of Schedule 1]

Robert Hurzeler Schedule 1 Employment Agreement

Schedule 2

ONE-TIME GRANT


1.	Pursuant to Section 4(d) of the Agreement, the Springleaf Holdings, Inc. Compensation Committee has authorized a One-Time Grant to Executive of restricted stock units under the Incentive Plan relating to 196,155* shares of the common stock of Holdings (“ RSUs ”), which shall vest in accordance with the two programs described below:


a.	Time Vesting Program . 13,077 of the RSUs shall vest on each of December 31, 2014, December 31, 2015 and December 31, 2016 (for a total of 39,231 RSUs), provided that as of each such vesting date Executive is an active employee of the Company, and has not have given notice of termination of employment nor received notice of termination with Cause prior to, the relevant vesting date; and


b.	Performance Vesting Program . If the Compensation Committee determines that:


i.	The Company has achieved on any calendar quarter-end on or before December 31, 2016, at least $660,000,000 in Pre-Tax Earnings for the twelve-month period preceding such quarter-end (the “ 100% Performance Goal ”), then 156,924 of RSUs subject to the Performance Vesting Program shall be earned, subject to the conditions set forth in Paragraph 1(c) below; or

ii.

The Company has achieved at least $594,000,000 but less than $660,000,000 in Pre-Tax Earnings for calendar year 2016 (the “ 90% Performance Goal ”), then 117,693 of RSUs subject to the Performance Vesting Program shall be earned, subject to the conditions set forth in Paragraph 1(c) below. For the avoidance of doubt, if the 90% Performance Goal applies, Executive shall have no further right or interest in the additional 39,231 RSUs that are available under the Performance Vesting Program only if the 100% Performance Goal is achieved; or

iii.

The Company has achieved at least $528,000,000 but less than $594,000,000 in Pre-Tax Earnings for calendar year 2016 (the “ 80% Performance Goal ”), then 78,462 of RSUs subject to the Performance Vesting Program shall be earned, subject to the conditions set forth in Paragraph 1(c) below. For the avoidance of doubt, if the 80% Performance Goal applies, Executive shall have no further right or interest in the additional 78,462 RSUs that are available under the Performance Vesting Program only if the 100% Performance Goal is achieved.

Robert Hurzeler Schedule 2 Employment Agreement


c.	Conditions . RSUs to be granted under the Performance Vesting Program are subject to (i) Executive’s compliance with all terms and provisions of this Agreement, including this Schedule 2, the Incentive Plan and the applicable award agreement and (ii) the audited financials of Holdings confirming the achievement of the applicable performance goal as set forth above in this Paragraph 1.


d.	Pre-Tax Earnings. As used in this Schedule 2, “ Pre-Tax Earnings ” means the amount calculated in good faith by the Company for the applicable twelve month period in the same manner as “Income (loss) before provision for (benefit from) income taxes” is calculated and reported by Holdings in its publicly reported financials for the “Consumer” and “Insurance” segments.

In the event that the 100% Performance Goal, the 90% Performance Goal or the 80% Performance Goals is achieved, the relevant RSUs shall vest in three equal annual installments on each of January 1, 2017, January 1, 2018 and January 1, 2019. In order for any of such installments of the Performance Vesting Program to vest, the Executive must be an active employee at, and not have given or received notice of termination of employment prior to, the relevant vesting date.

If none of the 100% Performance Goal, the 90% Performance Goal or the 80% Performance Goal is achieved by December 31, 2016, the portion of the RSUs provided to Executive and/or the Executive Team that is subject to the Performance-Vesting Program will terminate and be cancelled without any action on the part of any party and without the payment of any consideration; provided , however , that nothing herein shall prohibit the CEO in his sole discretion from recommending to the Compensation Committee that it make an alternative equity grant to Executive or the Executive Team.


4.	Notwithstanding anything to the contrary in this Schedule 2, if the Company terminates Executive’s employment without Cause prior to January 1, 2017, then the RSUs subject to the Performance Vesting Program shall be earned as provided in subparagraphs (a) through (c) below and subject to the conditions in subparagraph (d) below:


a.	With respect to any such termination occurring in 2014, 39,231 RSUs if the Company achieves at least $433,000,000 in Pre-Tax Earnings for calendar year 2014; or


b.	With respect to any such termination occurring in 2015, 78,462 RSUs if the Company achieves at least $528,000,000 in Pre-Tax Earnings for calendar year 2015; or


c.	With respect to any such termination occurring in 2016, (i) 78,462 RSUs if the Company achieves at least $528,000,000 in Pre-Tax Earnings for calendar year 2016, (ii) 117,693 RSUs if the Company achieves at least $594,000,000

Robert Hurzeler Schedule 2 Employment Agreement

in Pre-Tax Earnings for calendar year 2016; or (iii) 156,924 RSUs if the Company achieves at least $660,000,000 in Pre-Tax Earnings for calendar year 2016.

Any Performance Vesting Grant earned pursuant to this Paragraph 4, will vest in the same manner as provided in Paragraph 2 above, provided (x) Executive is in full compliance with all terms and provisions of this Agreement, including this Schedule 2, the Incentive Plan, the applicable award agreement, and the release and separation agreement, if any, relating to Executive’s termination without Cause, and (y) audited financials confirming that Holdings achieved the financial results for the applicable calendar year described above in this Paragraph 4.

Within 6 months after the Effective Date, and subject to the approval of the Compensation Committee, those of Executive’s direct reports who are selected by Executive, with the consent of the CEO (the “ Executive Team ”), will be eligible to receive One-Time Grants in amounts agreed with the CEO, with a cumulative maximum value for the Executive Team of $1,000,000 calculated as of the date of such grant, subject to the same conditions as provided herein for any grant to Executive, which will be set forth in individual award agreements with each applicable member of the Executive Team.

The Company and Executive agree that the provisions of this Schedule 2 will be renegotiated in good faith by both parties in the event Executive is materially hindered from achieving the Performance Goal as a result of strategic or other initiatives undertaken by the Company which require the resources of Executive and his team or the resources of other teams within the Company upon which Executive is dependent in achieving the Performance Goal.

The One-Time Grant is adopted under and in accordance with the terms and conditions of the Incentive Plan, and each payment made under the terms of the One-Time Grant is intended to qualify as an “Equity Award” that is payable upon the achievement of a “Performance Goal” for purposes of such plan. The One-Time Grant is conditioned upon Executive’s execution of a “Restricted Stock Unit Award Agreement” in form satisfactory to the Company.

* $5,000,000 divided by a stock price of $25.49 per share, based on the closing price of Springleaf stock on February 18, 2014.

[End of Schedule 2]

Robert Hurzeler Schedule 2 Employment Agreement

SPRINGLEAF HOLDINGS, INC.,
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into as of April 13, 2015, to be effective as of January 1, 2016 (the “ Effective Date ”), by and among Springleaf Holdings, Inc., a Delaware corporation, (“ Springleaf ” and collectively with its subsidiaries and affiliates (including Springleaf General Services Corporation), the “ Company ”), Springleaf General Services Corporation (the “ Employer ”) and Robert A. Hurzeler (“ Executive ”). Where the context permits, references to the “Company” shall include the Company and any successor of the Company.

W I T N E S S E T H:

WHEREAS, Springleaf, the Employer and Executive entered into an employment agreement dated January 17, 2014 (the “ Existing Employment Agreement ”); and

WHEREAS , Springleaf, the Employer and Executive desire to enter into an employment agreement, effective as of the Effective Date, pursuant to which Executive will be employed as the Executive Vice President, Auto Lending of the Company (the “ Position ”) on the terms and subject to the conditions more fully set forth in this Agreement.

1. SERVICES AND DUTIES. Subject to Section 3 hereof, from and after the Effective Date, Executive shall, pursuant to the terms of this Agreement, be employed by the Employer in the Position and shall report directly to the Chief Executive Officer of the Company (the “ CEO ”). During the Term (as defined in Section 3), Executive shall be a full-time employee of the Employer and shall dedicate all of Executive’s working time to the Company and shall have no other employment and no other business ventures which are undisclosed to the Company or which conflict with Executive’s duties under this Agreement. Executive shall perform such duties consistent with his executive position hereunder as are required by the Company from time to time, including serving in the Position, and such other duties that are normally associated with Executive’s position, together with such additional duties, commensurate with Executive’s position, as may be assigned to Executive from time to time by the CEO. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) participating in trade associations or industry organizations which are related to the business of the Company or engaging in charitable, civic or political activities, (ii) engaging in personal investment activities for Executive that do not give rise to any conflicts of interest with the Company or its Affiliates (as defined below) or (iii) subject to prior approval of the CEO, accepting directorships unrelated to

Robert A. Hurzeler 1 Employment Agreement (Effective 1/1/16)

the Company that do not give rise to any conflict of interests with the Company or its Affiliates, in each case so long as the interests in (i), (ii) and (iii) above do not interfere, individually or in the aggregate, with the performance of Executive’s duties hereunder, including the restrictive covenants set forth in Section 7 hereof, or in any other agreement between Executive and the Company (the “ Restrictive Covenants ”).

2. LOCATION. The principal location of Executive’s employment with the Employer shall be at the Company’s offices in the Wilmington, Delaware area. Executive understands and agrees that Executive may be required to travel extensively in performing Executive’s duties, which such travel may include frequent trips to the Company’s offices in Greenwich, Connecticut, Chicago, Illinois, Evansville, Indiana, Minneapolis, Minnesota, and Tempe, Arizona, among others.

3. EMPLOYMENT TERM. Executive’s employment under the terms and conditions of this Agreement shall commence on the Effective Date. Such employment shall continue for an initial term ending on December 31, 2018 (the “ Initial Term ”) and shall be automatically extended on the expiration of the Initial Term and on each anniversary of the expiration of the Initial Term for an additional one-year term (each, a “ Renewal Term ”). The Initial Term and any Renewal Terms are collectively referred to as the “ Term ” and the Term shall continue as described in the preceding sentence, unless Executive or the Employer has given written notice to the other no less than ninety (90) days prior to the expiration of the Term that the Term shall not be so extended. Notwithstanding the above, the Term shall expire immediately upon the termination of Executive’s employment pursuant to Section 6 hereof. For the avoidance of doubt, upon the expiration of the Term, the parties’ rights and obligations hereunder, other than with respect to the provisions set forth in Sections 5(d), 6, 7, 9 and 10(k) hereof, shall expire. Following the expiration of the Term, any continued employment of Executive shall be deemed “at-will.”

4. COMPENSATION.

(b) Annual Bonus . In addition to the Base Compensation, Executive shall be eligible to receive a minimum bonus in respect of each full calendar year during the Term (the “ Annual Bonus ”) of $400,000, subject to the terms, conditions and objectives agreed upon between the

Robert A. Hurzeler 2 Employment Agreement (Effective 1/1/16)

CEO and the Executive each year. The Company may at its sole discretion increase the Annual Bonus from time to time. The Annual Bonus shall be paid in cash and/or equity awards in the same proportions as paid to other Company executives, which awards will be subject to the terms and conditions of the Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan, as it may be amended from time to time, or any successor thereto (the “ Equity Plan ”), and the applicable award agreements thereunder approved by the Compensation Committee of Springleaf (the “ Compensation Committee ”). The Annual Bonus shall be paid or awarded, as applicable, to Executive when bonuses are normally paid in the year following the end of the calendar year to which it relates, provided Executive is an active employee of the Company at the time of, and has not given notice of termination of employment prior to, the date on which such Annual Bonus is paid.

(c) Withholding . All taxable compensation payable to Executive shall be subject to any applicable withholding taxes and such other taxes as are required under Federal law or the law of any state or governmental body to be collected with respect to compensation paid by the Company to Executive.

5. BENEFITS AND PERQUISITES.

Robert A. Hurzeler 3 Employment Agreement (Effective 1/1/16)

currently in effect, and the Company, in its sole discretion, will determine the appropriate limits, level and coverage of officer and director liability insurance from time to time.

6. TERMINATION. Upon any termination of Executive’s employment with the Employer, Executive shall be entitled to receive the following: (i) any earned but unpaid Base Compensation (to be paid as provided in Section 4(a)); (ii) reimbursement for reasonable expenses incurred by Executive prior to the date of termination in accordance with Section 5(c) hereof; (iii) vested and accrued benefits, if any, to which Executive may be entitled under the Company’s employee benefit plans as of the date of termination; and (iv) any additional amounts or benefits due under any applicable plan, program, agreement or arrangement of the Company or its Affiliates (as defined below), including the Equity Plan or any such plan, program, agreement or arrangement relating to equity or equity-based awards (the amounts and benefits described in clauses (i) through (iv) above, collectively, the “ Accrued Benefits ”). Accrued Benefits under this Section 6 shall in all events be paid in accordance with the Company’s payroll procedures, expense reimbursement procedures or plan terms, as applicable. During any notice period required under this Section 6, (A) Executive shall remain employed by the Employer and shall continue to be bound by all the terms of this Agreement and any other applicable duties and obligations to the Company, (B) the Company may direct Executive not to report to work, and (C) Executive shall only undertake such actions on behalf of the Company as expressly directed by the Company. For purposes of this Agreement, a transfer of Executive’s employment among the Employer, any direct or indirect parent of Springleaf Financial Holdings, LLC, any subsidiary of Springleaf Financial Holdings, LLC or any other entity controlled directly or indirectly by Springleaf Financial Holdings, LLC shall not be deemed to be a termination of Executive’s employment, and the entity to which Executive’s employment is transferred shall thereafter be deemed to be the Employer for purposes of this Agreement.

(a) Termination by the Employer for Cause or Voluntarily by Executive . The Term and Executive’s employment hereunder may be terminated (i) by the Employer for Cause (as defined below), effective thirty (30) days following the date Executive receives written notice to such effect, provided that Executive has not corrected any actions or omissions constituting Cause, if such actions or omissions are capable of correction or (ii) voluntarily by Executive at any time, effective ninety (90) days following the date on which a written notice to such effect is delivered to the Employer (or its successors). If Executive’s employment hereunder is terminated during the Term by the Employer for Cause or voluntarily by Executive, Executive shall not be entitled to any further compensation or benefits other than the Accrued Benefits.

(b) Termination by the Employer without Cause .

The Term and Executive’s employment hereunder may be terminated by the Employer at any time without Cause, effective thirty (30) days following the date on which a written notice to

Robert A. Hurzeler 4 Employment Agreement (Effective 1/1/16)

such effect is delivered to Executive. If Executive’s employment hereunder is terminated during the Term by the Employer other than for Cause, and other than due to Executive’s death or Disability (as defined below), then Executive shall be entitled to (1) the Accrued Benefits and (2) upon Executive’s execution of a separation agreement containing a general release of claims in a form acceptable to the Company (the “ Release ”), and the expiration of the applicable revocation period with respect to such Release within sixty (60) days following the date of termination, and provided that Executive is in continued compliance with the Restrictive Covenants and any other ongoing obligation to which Executive is subject as of the date of termination:

(1) The continuation of Executive’s then-current Base Compensation, to be paid in equal installments in accordance with the regular payroll practices of the Company for twelve (12) months, commencing on the first payroll date following the date of termination, but with the first actual payment to be made on the sixtieth (60 ^th ) day following the date of termination, which payment shall consist of all amounts otherwise payable to Executive pursuant to this subsection (1) between the date of termination and the sixtieth (60 ^th ) day following the date of termination; and

(2) An amount equal to the average Annual Bonus earned and paid in respect of the three years completed prior to the year of termination, provided that if Executive has not received three Annual Bonuses or if there were no Annual Bonuses paid with respect to any of the three years prior to the year of termination, such average shall be calculated with respect to the lesser number of years for which Executive received a non-zero Annual Bonus, pro-rated based on the number of days in which Executive actively served in the Position during such year (a “ Pro-Rata Bonus ”), to be paid at such time as bonuses are normally paid in accordance with the normal practices of the Company with regard to paying bonuses or making payments under the Equity Plan as applicable to similarly situated executives. Notwithstanding the foregoing, if the Company is subject to the provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “ Code ”), and intends that amounts payable under the Annual Bonus provision or the Equity Plan are to qualify as “qualified performance-based compensation” under Section 162(m) of the Code, the Pro-Rata Bonus shall be determined based on actual performance for the year in which the termination occurs and shall be paid at the time bonuses are paid to employees generally.

Robert A. Hurzeler 5 Employment Agreement (Effective 1/1/16)

compliance with the Restrictive Covenants or in any other agreement between Executive and the Company or to which Executive is a party or any other ongoing obligation to which Executive is subject as of the date of termination, a Pro-Rata Bonus, to be paid at such time as bonuses are normally paid in accordance with the normal practices of the Company with regard to paying bonuses or making payments under the Equity Plan as applicable to similarly situated executives.

(d) Definitions . For purposes of this Agreement:

Robert A. Hurzeler 6 Employment Agreement (Effective 1/1/16)

the officers of the Company of a limited power of attorney to sign in Executive’s name and on Executive’s behalf any such documentation as may be required to be executed solely for the limited purposes of effectuating such resignations.

7. COVENANTS. Executive understands that the Company is continuously involved in the development, receipt, use and refinement of information that is proprietary, confidential or that has significant commercial value. Executive acknowledges that such information is essential to the Company’s successful business operations and that disclosure to third parties or other unauthorized use may cause material harm to the Company.

(a) Confidentiality .

(1) For purposes of this Agreement, the term “ Proprietary Information ” includes any information acquired by Executive as a consequence of, or in connection with, Executive’s employment with the Company or his access to the Company’s systems or communications, whether written, electronic, oral, or in any other medium or form. Without limiting the foregoing, Proprietary Information also includes all confidential information of and confidential matters (whether made available before or after the date hereof) relating to the Company’s business, the Company and its Affiliates or any third parties. The restrictions contained herein shall not apply to Proprietary Information which (i) is or becomes generally available to the public other than by unauthorized disclosure by Executive in violation of this Agreement or other obligation of confidentiality, (ii) which Executive can prove by documentary evidence he or she already knew prior to his employment or retention by the Company, or (iii) becomes available on a non-confidential basis from a third party not under an obligation to any person to keep such information confidential.

Robert A. Hurzeler 7 Employment Agreement (Effective 1/1/16)

(b) Intellectual Property .

(2) “ Company Materials ” means all Materials that Executive makes or conceives, or has made or conceived, solely or jointly, during the period of Executive’s retention by or employment with the Company, whether or not patentable or subject to copyright, trademark or similar statutes, which either (i) are related to the current or anticipated business or activities of the Company (which includes any business operated by any fund managed by the Company or any of its Affiliates during or prior to the period of Executive’s retention by or employment with the Company); (ii) fall within Executive’s responsibilities while retained by or employed with the Company; or (iii) are otherwise developed by Executive through the use of the Company’s confidential information, equipment, software, or other facilities or resources at time during which Executive has been a consultant, or employee (temporary or otherwise) of the Company. “ Prior Materials ” means any Materials in which Executive has any ownership or license (with the right to grant sublicenses) rights or interest that came into existence prior to its retention by or employment with the Company that Executive incorporates during the period of such employment or retention in any manner into any Company Materials.

Robert A. Hurzeler 8 Employment Agreement (Effective 1/1/16)

Company’s intellectual property rights, and hereby grants to the officers of the Company an irrevocable power of attorney, coupled with interest, to such end.

(2) Executive agrees not to and shall not, directly or indirectly, for thirty-six (36) months following the date of termination of employment if Executive is terminated for Cause or voluntarily terminates employment with the Company, or for twelve (12) months following the date of termination if the termination of employment is made by the Company for any reason other than Cause, provide consultative services to, own, manage, operate, join, control, be employed by, participate in, or be connected with, any business, individual, partner, firm, corporation, or other entity that directly or indirectly competes with the Company in the business of direct consumer non-real estate finance and credit insurance anywhere in the United States. This provision shall apply, if applicable, notwithstanding any provision of a Company policy to the contrary.

(d) Non-Solicitation .

(1) Executive shall not, directly or indirectly, during his employment with the Company and for thirty-six (36) months following the effective date of his termination, if the termination is for Cause or Executive voluntarily terminates employment with the Company, or for twenty-four (24) months, if the termination of employment is made by the Company for any reason other than Cause, either (x) solicit or encourage to leave the employment of the Company or its Affiliates, any employee, consultant, independent contractor or other service provider thereof (or knowingly assist any other person in so soliciting, encouraging, enticing or inducing), or hire any person who has left the employment of, or has ceased providing services to, the Company or its Affiliates during the immediately preceding one-year period without the prior

Robert A. Hurzeler 9 Employment Agreement (Effective 1/1/16)

written consent of the Company or (y) disrupt, damage, impair or interfere with business of the Company by raiding Company employees.

(2) Executive shall not, directly or indirectly, during his employment with the Company and for thirty-six (36) months following the effective date of his termination, if the termination is for Cause or Executive voluntarily terminates employment with the Company, or for twenty-four (24) months, if the termination of employment is made by the Company for any reason other than Cause, whether for his own account or for the account of any other person, firm, corporation or other business organization, directly, or indirectly by assisting others, (x) solicit or attempt to solicit any business from any of the clients or customers, or prospective clients or customers, with whom Executive had material contact during the last two (2) years of his employment with the Company, for the purpose of providing services or products that are competitive with those provided by the Company, or (y) intentionally interfere with the relationship of the Company or any of its Affiliates, or endeavor to entice away from the Company or any Affiliates, any clients or customers of the Company or any of its Affiliates. As used in the previous sentence, “material contact” means dealt with, supervised or coordinated dealings with, did work related to, obtained confidential information concerning, or had resultant earnings on.

(e) Mutual Non-Disparagement .

Robert A. Hurzeler 10 Employment Agreement (Effective 1/1/16)

to the Company. In addition, the Company may take all such other actions and remedies available to it under law or in equity and shall be entitled to such damages as it can show it has sustained by reason of such breach.

Robert A. Hurzeler 11 Employment Agreement (Effective 1/1/16)

herein to the contrary, to the extent any payments or benefits payable under this Agreement on account of Executive’s termination of employment constitute a deferral of compensation subject to Section 409A of the Code, Executive shall not be considered to have terminated employment until Executive has incurred a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h) (which shall be interpreted by (i) using “49 percent” in lieu of “20 percent” for purposes § 1.409A-1(h)(1)(ii), and (ii) using “50 percent in lieu of “80 percent” for purposes of §1.409A-1(h)(3)). Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified payment for purposes of Section 409A of the Code. Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent any payments or benefits payable under this Agreement on account of Executive’s termination of employment constitute a deferral of compensation subject to Section 409A of the Code and Executive is a “specified employee” within the meaning of Section 409A of the Code at the time of his separation from service, any amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following an Executive’s separation from service shall instead be paid on the first business day after the date that is six months following Executive’s separation from service (or, if earlier, Executive’s date of death). To the extent required to avoid an accelerated or additional tax under Section 409A of the Code, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in kind benefits provided to Executive) during one year may not affect amounts reimbursable or provided in any subsequent year and the right to reimbursement of in-kind benefits provided under this Agreement shall not be subject to liquidation or exchange for another benefit. The Company makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment made in accordance with the provisions of this Agreement.

Robert A. Hurzeler 12 Employment Agreement (Effective 1/1/16)

10. GENERAL.

To the Company or the Employer:

Springleaf Holdings, Inc.

601 NW 2 ^nd St.

Evansville, IN 47708

Attn: John Anderson, General Counsel

with a copy which shall not constitute notice to:

Springleaf Holdings, Inc.,
601 NW 2 ^nd St.

Evansville, IN 47708

Attn: Jay Levine, CEO

To Executive:

At the address shown in the Company’s personnel records

or to such other address or to the attention of such other person as the recipient party will have specified by prior written notice to the sending party.

Robert A. Hurzeler 13 Employment Agreement (Effective 1/1/16)

agreement and understanding between the parties related to the subject matter hereof and to the compensatory arrangements between the Company and Executive, except as otherwise explicitly set forth in this Agreement, and supersedes and preempts any prior or contemporaneous understandings, agreements, term sheets, prior drafts or representations by or between the parties, written or oral, other than the Existing Employment Agreement (but only to the extent related to the term of this Agreement) .

(g) Survivorship . The provisions of this Agreement necessary to carry out the intention of the parties as expressed herein shall survive the termination or expiration of this Agreement.

Robert A. Hurzeler 14 Employment Agreement (Effective 1/1/16)

(k) Arbitration . Executive acknowledges that the company has in place the Springleaf Finance Employment Dispute Resolution Plan (“ EDR Plan ”) that applies to all employment disputes. Except as necessary for the Company and its subsidiaries, Affiliates, successors or assigns or Executive to specifically enforce or enjoin a breach of this Agreement, the parties agree that any and all disputes that may arise in connection with, arising out of or relating to this Agreement, or any dispute that relates in any way, in whole or in part, to Executive’s services on behalf of the Company or any subsidiary, the termination of such services or any other dispute by and between the parties or their subsidiaries, Affiliates, successors or assigns, shall be subject to the EDR Plan, as amended from time to time, including binding arbitration of any of the foregoing claims or disputes related to executive’s employment with the Company or this Agreement. Executive further agrees that the appropriate venue for any proceeding under the EDR Plan shall be in Evansville, Indiana. The arbitration obligation under this provision extends to any and all claims that may arise by and between the parties or their subsidiaries, Affiliates, successors or assigns, and expressly extends to, without limitation, claims or causes of action relating to compensation, including incentive-based compensation payable hereunder or otherwise and any equity-based compensation, for wrongful termination, impairment of ability to compete in the open labor market, breach of an express or implied contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, fraud, misrepresentation, defamation, slander, infliction of emotional distress, disability, loss of future earnings, and claims under the United States Constitution, and applicable state and federal fair employment laws, federal and state equal employment opportunity laws, and federal and state labor statutes and regulations, including, but not limited to, the Civil Rights Act of 1964, as amended, the Fair Labor Standards Act, as amended, the Americans With Disabilities Act of 1990, as amended, the Rehabilitation Act of 1973, as amended, the Employee Retirement Income Security Act of 1974, as amended, the Age Discrimination in Employment Act of 1967, as amended, and any other state or federal law; provided, however, that nothing herein shall require arbitration of any claim or charge which, by law, cannot be the subject of a compulsory arbitration agreement. Notwithstanding the foregoing, the Company or Executive shall not be precluded from applying to a proper court for injunctive relief by reason of the prior or subsequent commencement of a proceeding under the EDR Plan, as amended, including without limitation, with respect to any dispute relating to the Restrictive Covenants or any confidentiality obligations.

Robert A. Hurzeler 15 Employment Agreement (Effective 1/1/16)

11. EXECUTIVE REPRESENTATION AND ACCEPTANCE . By signing this Agreement, Executive hereby represents that Executive is not currently under any contractual obligation to work for another employer, that Executive is not restricted by any agreement or arrangement from entering into this Agreement and performing Executive’s duties hereunder, and that Executive is not subject to any prior confidentiality, non-solicit or non-compete agreement that would inhibit, negatively impact or bar Executive from performing his duties under this Agreement other than previously disclosed by Executive in connection with the Existing Employment Agreement.

12. OPERATION OF AGREEMENT . This Agreement shall be legally binding immediately upon its execution by the parties, but it shall not become effective until the Effective Date. In the event that (i) Executive is not employed by the Company on the Effective Date, or (ii) Springleaf (or a subsidiary) has not completed the purchase of 100% of the stock of OneMain Financial Holdings, Inc. or a successor or replacement entity pursuant to the terms of a Stock Purchase Agreement dated as of March 2, 2015, between Springleaf and Citifinancial Credit Company on or before the Effective Date, none of the provisions of this Agreement shall have any force or effect and this Agreement shall be null and void in its entirety.

13. PRIOR AGREEMENTS TERMINATION . At the beginning of the Term of this Agreement on January 1, 2016, all prior agreements executed between Executive and the Company regarding Executive’s employment with the Company (including the Existing Employment Agreement) shall terminate and no longer be of force or effect between the parties, except for any award agreement executed pursuant to the Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan (including as outlined in Schedule 2 to the Existing Employment Agreement). In the event that Executive has been terminated by the Company for Cause prior to the effective date of this Agreement, this Agreement shall be considered void, and shall not become effective.

[Signature Page Follows]

Robert A. Hurzeler 16 Employment Agreement (Effective 1/1/16)

IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto have executed and delivered this Agreement as of the year and date first above written.

SPRINGLEAF HOLDINGS, INC.

By:
    Name:
    Title:

SPRINGLEAF GENERAL SERVICES CORPORATION

By:
    Name:
    Title:

EXECUTIVE

Robert A. Hurzeler

Robert A. Hurzeler 17 Employment Agreement (Effective 1/1/16)

SPRINGLEAF FINANCE INC. EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into effective as of February 13, 2014 (the “E ffective Date”), by and among Springleaf Finance Inc., an Indiana corporation (“ Springleaf ” and collectively with its subsidiaries, the “ Company ”), Springleaf General Services Corporation, a subsidiary of Springleaf (the “ Employer ”), and Tim Ho (“ Executive ”). Where the context permits, references to the “Company” shall include the Company and any successor of the Company.

W I T N E S S E T H:

WHEREAS , Springleaf, the Employer and Executive desire to enter into an employment agreement, effective as of the Effective Date, pursuant to which Executive will be employed as the Executive Vice President, Digital Operations of the Company on the terms and subject to the conditions more fully set forth in this Agreement.

3), Executive shall be a full-time employee of the Employer and shall dedicate all of Executive’s working time to the Company and shall have no other employment and no other business ventures which are undisclosed to the Company or which conflict with Executive’s duties under this Agreement. Executive shall perform such duties consistent with his executive position hereunder as are required by the Company from time to time, including serving as the Executive Vice President, Digital Operations of the Company, and such other duties that are normally associated with Executive’s position, together with such additional duties, commensurate with Executive’s position, as may be assigned to Executive from time to time by the CEO. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) participating in trade associations or industry organizations which are related to the business of the Company or engaging in charitable, civic or political activities, (ii) engaging in personal investment activities

for Executive that do not give rise to any conflicts of interest with the Company or its “Affiliates” (as defined below) or (iii) subject to prior approval of the CEO, accepting directorships unrelated to the Company that do not give rise to any conflict of interests with the Company or its Affiliates, in each case so long as the interests in (i), (ii) and (iii) above do not interfere, individually or in the aggregate, with the performance of Executive’s duties hereunder, including the restrictive covenants set forth in Section 7 hereof, or in any other agreement between Executive and the Company (the “ Restrictive Covenants ”). The Company acknowledges and approves the current activities of Executive as set forth on Schedule 1 hereto.

2. LOCATION . The principal location of Executive’s employment with the Employer shall be at an office to be established by the Company in the Chicago, Illinois area. Executive understands and agrees that Executive may be required to travel extensively in performing Executive’s duties, which such travel may include frequent trips to the Company’s offices in (i) Greenwich, Connecticut, (ii) Wilmington, Delaware, (iii) and Evansville, Indiana.

Initial Term for an additional one-year term (each, a “ Renewal Term ”). The Initial Term and any Renewal Terms are collectively referred to as the “ Term ” and the Term shall continue as described in the preceding sentence, unless Executive or the Employer has given written notice

to the other no less than ninety (90) days prior to the expiration of the Term that the Term shall not be so extended. Notwithstanding the above, the Term shall expire immediately upon the termination of Executive’s employment pursuant to Section 6 hereof. For the avoidance of doubt, upon the expiration of the Term, the parties’ rights and obligations hereunder, other than with respect to the provisions set forth in Sections 5(d) and (e), 6, 7, 9 and 10(k) hereof, shall expire. Following the expiration of the Term, any continued employment of Executive shall be deemed

“at-will.”

4. COMPENSATION .

(b) Annual Bonus . In addition to the Base Compensation, Executive shall be eligible to receive a bonus in respect of each full calendar year during the Term (the “ Annual Bonus ”), subject to the terms, conditions and objectives agreed upon between the CEO and Executive each year and payable under the Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan, as it may be amended from time to time, or any successor thereto (the “ Incentive Plan ”); provided, however, that the Annual Bonus payable to Executive in respect of calendar year 2014 shall be $650,000. For calendar year 2014, the first $500,000 of total annual compensation shall be paid in cash and any remainder will be paid 50% in cash and 50% in equity awards, which equity awards will (i) be subject to the terms and conditions of the Incentive Plan and the applicable award agreements thereunder and (ii) relate to a number of shares of common stock of Springleaf Holdings, Inc. (“ Holdings ”) as calculated by the Compensation Committee of Holdings (the “ Compensation Committee ”). For subsequent years, the dollar threshold and the proportion of cash and equity award is subject to change to the extent such change is made for other members of senior management. The Annual Bonus shall be paid or awarded, as applicable, to Executive when bonuses are normally paid in the year following the end of the calendar to which it relates,

provided Executive is an active employee of the Company at, and has not given notice of termination of employment prior to, the date on which such Annual Bonus is paid.

(c) Sign-On Bonus . On the first regularly scheduled payroll date of the Company following the Effective Date, the Company shall pay Executive a sign-on cash bonus of two hundred sixty eight thousand seven hundred fifty dollars ($268,750.00) (the “ Sign-On Bonus ”).

5. BENEFITS AND PERQUISITES .

(e) Cash America Indemnification . The Employer agrees specifically to indemnify, defend and save Executive harmless for any claims brought by Cash America International or Enova Financial Holdings, LLC that arise from Executive’s obligations created by his Continued Employment and Separation Agreement with Enova Financial Holdings, LLC, dated January 29,

2013 (the “ Separation Agreement ”), including payment of any attorneys’ fees, costs of defense, settlement or judgment resulting therefrom; provided, that the Employer will not be responsible for any intentional, willful or reckless violations of the Separation Agreement, or in respect of any other actions taken in bad faith by Executive.

of a separation agreement containing a general release of claims in a form acceptable to the Company (the “ Release ”), and the expiration of the applicable revocation period with respect to

such Release within sixty (60) days following the date of termination, and provided that Executive is in continued compliance with the Restrictive Covenants and any other ongoing obligation to which Executive is subject as of the date of termination:

(1) The continuation of Executive’s then-current Base Compensation, to be paid in equal installments in accordance with the regular payroll practices of the Company will continue to be paid for the “Non-Compete Period” (as defined in Section 7(c)(2)) which extends following the termination of Executive employment, commencing on the first payroll date following the date of termination, but with the first actual payment to be made on the sixtieth (60 th ) day following the date of termination, which payment shall consist of all amounts otherwise payable to Executive pursuant to this subsection (1) between the date of termination and the sixtieth (60 th ) day following the date of termination; and

the Company is subject to the provisions of Section 162(m) of the Internal Revenue Code of

1986, as amended (the “ Code ”), and intends that Annual Bonus payments are to qualify as “qualified performance-based compensation” under Section 162(m) of the Code, the Pro-Rata Bonus shall be determined based on actual performance for the year in which the termination occurs and shall be paid at the time bonuses are paid to employees generally.

(d) Definitions . For purposes of this Agreement:

minimis acts ) ; (v) any act or omission which is materially injurious to the financial condition or business reputation of the Company or any of its subsidiaries or Affiliates; or (vi) Executive’s commission of any breach of the Restrictive Covenants; provided, however, that discharge pursuant to clauses (i) or (vi) will not constitute discharge for “Cause” unless Executive has received written notice from the Company stating the nature of such breach and affording him an opportunity to correct fully the act(s) or omission(s), if such a breach is capable of correction, described in such notice within thirty (30) days following his receipt of such notice.

reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.

(a) Confidentiality .

(b) Intellectual Property .

and all copyright rights, patent rights and trademark rights and goodwill associated therewith). Executive also hereby irrevocably grants to the Company for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, a royalty-free, world-wide,

perpetual, nonexclusive license to use any Prior Materials (defined below) in connection with use by the Company of any Company Materials incorporating such Prior Materials. The provisions

of this paragraph will apply to all Company Materials which are or have been conceived or developed by Executive, solely or jointly, whether or not further development or reduction to practice may take place after the termination of Executive’s employment or retention, by the Company. “ Materials ” means all articles, reports, documents, memoranda, notes, other works of authorship, data, databases, discoveries, designs, developments, ideas, creative works, improvements, inventions, know-how, processes, computer programs, software, source code, techniques and useful ideas of any description whatsoever (or portions thereof).

the Company’s confidential information, equipment, software, or other facilities or resources at time during which Executive has been a consultant, or employee (temporary or otherwise) of the Company. “ Prior Materials ” means any Materials in which Executive has any ownership or license (with the right to grant sublicenses) rights or interest that came into existence prior to its retention by or employment with the Company that Executive incorporates during the period of such employment or retention in any manner into any Company Materials.

(d) Non-Solicitation .

encourage to leave the employment of the Company or its Affiliates, any employee, consultant, independent contractor or other service provider thereof (or knowingly assist any other person in so soliciting, encouraging, enticing or inducing), or hire any person who has left the employment of, or has ceased providing services to, the Company or its Affiliates during the immediately preceding one-year period without the prior written consent of the Company or (y) disrupt, damage, impair or interfere with business of the Company by raiding Company employees; provided, however, that in the event Executive’s employment is terminated by the Employer without Cause, nothing in this Section 7(d)(1) shall prohibit Executive from hiring any person who left the employment of, or ceased providing services to, the Company or its Affiliates at any time prior to the date of Executive’s termination of employment.

to entice away from the Company or any Affiliates, any clients or customers of the Company or any of its Affiliates. As used in the previous sentence, “material contact” means dealt with, supervised or coordinated dealings with, did work related to, obtained confidential information concerning, or had resultant earnings on.

(e) Mutual Non-Disparagement .

Company. In addition, the Company may take all such other actions and remedies available to it under law or in equity and shall be entitled to such damages as it can show it has sustained by reason of such breach.

(g) Acknowledgment . The Company and Executive acknowledge that (i) the type

and periods of restrictions imposed by this Agreement are fair and reasonable and are reasonably required in order to protect and maintain the proprietary interests of the Company and its legitimate business interests and the goodwill associated with its business; (ii) the time, scope, geographic area and other provisions of this Agreement have been specifically negotiated by sophisticated commercial parties, represented by legal counsel; and (iii) because of the nature of the business engaged in by the Company and the fact that investors can be and are serviced and investments can be and are made by the Company wherever they are located, Executive acknowledges and agrees that the geographic limitation is reasonable. If any provision of this Section 7, or any part thereof, is held to be unenforceable by reason of it extending for too great a period of time or over too great a geographic area or by reason of it being too extensive in any other respect, the parties agree (x) such covenant shall be interpreted to extend only over the maximum period of time for which it may be enforceable and/or over the maximum geographic areas as to which it may be enforceable and/or over the maximum extent in all other respects as

to which it may be enforceable, all as determined by the court making such determination and (y) in its reduced form, such covenant shall then be enforceable, but such reduced form of covenant shall only apply with respect to the operation of such covenant in the particular jurisdiction in or for which such adjudication is made. Each of the covenants and agreements in this Agreement are distinct and severable.

(h) Enova Confidentiality Agreement . The Company and Executive acknowledge that Executive is a party to the Separation Agreement, Section 11 of which provides as follows:

“You acknowledge that, during the term of your employment, you have been privy to confidential and proprietary information of the Company. You agree to not disclose to any third party the trade secrets, proprietary information, marketing strategies, business strategies, business plans, pricing data, legal analyses, financial information, insurance information, customer lists, customer information, creditor files, processes, policies, procedures, research, lists, methodologies, specifications, software, software code, computer systems, software and hardware architecture and specifications, customer information systems, point of sale systems, management information systems, software design and development plans and materials, intellectual property, contracts, business records, technical ex p ertise and know-how, and other confidential and proprietary information and trade secrets of the Company (collectively, the “Property”), which were provided to you by the Company and are confidential and proprietary property of the Company. You further agree (i) that prior to the date you executed this Agreement, you did not intentionally harm, damage or destroy any of the Company’s Property, and (ii) not to use any Property to your personal benefit or the benefit of any third party. You also agree to return to the Company by your Severance Date all such Property which is tangible. Notwithstanding the foregoing, the Property protected hereunder does not include any data or information that has been disclosed to the public (except where such public disclosure has been made by

you without authorization), that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means. The restrictions in this provision are in addition to, and not in lieu of, any rights or remedies the Company may have available pursuant to the laws of the State of Illinois to prevent the disclosure of trade secrets and proprietary information. Your obligations under the nondisclosure provisions hereof (i) will apply to confidential information that does not constitute trade secrets for a period of 36 months after your Severance Date, and (ii) will apply to trade secrets until such Property no longer constitutes trade secrets.”

Executive agrees that in connection with his employment by the Company he shall (i) at all times comply with the terms of the foregoing confidentiality provision and any other confidentiality provision set forth in the Separation Agreement and (ii) promptly notify the Company if he is in material violation of any provision contained therein. Executive acknowledges and agrees that any material violation of any such provision shall give the Company the right to terminate Executive’s employment for Cause pursuant to the terms of this Agreement.

to hypothecation by Executive, and any such attempted assignment or hypothecation shall be null and void. The Company may assign the rights and obligations of the Company hereunder, in whole or in part, to any of the Company’s subsidiaries, Affiliates or parent corporations, or to

any other successor or assign in connection with the sale of all or substantially all of the Company’s assets or stock or in connection with any merger, acquisition and/or reorganization, provided the assignee assumes the obligations of the Company hereunder.

interpreted and administered to be in compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent any payments or benefits payable under this Agreement on account of Executive’s termination of employment constitute a deferral of compensation subject to Section 409A of the Code, Executive shall not be considered to have terminated employment until Executive has incurred a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h) (which shall be interpreted by (i) using “49 percent” in lieu of “20 percent” for purposes § 1.409A-1(h)(1)(ii), and (ii) using “50 percent in lieu of “80 percent” for purposes of §1.409A-1(h)(3)). Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified payment for purposes of Section 409A of the Code. Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent any payments or benefits payable under this Agreement on account of Executive’s termination of employment constitute a deferral of compensation subject to Section 409A of the Code and Executive is a “specified employee” within the meaning of Section 409A of the Code at the time of his separation from service, any amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month

period immediately following an Executive’s separation from service shall instead be paid on the first business day after the date that is six months following Executive’s separation from service (or, if earlier, Executive’s date of death). To the extent required to avoid an accelerated or additional tax under Section 409A of the Code, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in kind benefits provided to Executive) during one year may not affect amounts reimbursable or provided in any subsequent year and the right to reimbursement of in- kind benefits provided under this Agreement shall not be subject to liquidation or exchange for another benefit. The Company makes no representation that any or all of the payments described in this Agreement will be exempt from, or comply with, Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment made in accordance with the provisions of this Agreement.

10. GENERAL .

(a) Notices . Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of one (1) business day following personal delivery (including personal delivery by telecopy or telex), or the third (3 rd ) business day after mailing by first class mail to

the recipient at the address indicated below:

To the Company or the Employer: Springleaf Finance Inc.

601 NW 2 nd St. Evansville, IN 47708

Attn: Scott D. McKinlay, General Counsel

with a copy which shall not constitute notice to: Springleaf Holdings, Inc.

1700 East Putnam Avenue

Greenwich, CT 06870

Attn: Jay Levine, CEO To Executive:

At the address shown in the Company’s personnel records

or to such other address or to the attention of such other person as the recipient party will have specified by prior written notice to the sending party.

(g) Survivorship . The provisions of this Agreement necessary to carry out the intention of the parties as expressed herein shall survive the termination or expiration of this Agreement.

operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

participated equally in the drafting of the same, and any rule of construction that a document shall be construed against the drafting party shall not be applicable to this Agreement.

into this Agreement and performing Executive’s duties hereunder.

[Signature Page Follows]

IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto have executed and delivered this Agreement as of the year and date first above written.

SPRINGLEAF FINANCE INC.


By:	Name:

Title:

SPRINGLEAF GENERAL SERVICES CORP.


By:	Name:

Title:

EXECUTIVE

Tim Ho

Schedule 1

CURRENT ACTIVITIES

Management of two family investment entities.

[End of Schedule 1]

Schedule 1

Schedule 2

ONE-TIME GRANT

1. Pursuant to Section 4(d) of the Agreement, on or as soon as practicable after the Effective Date, the Company, subject to the approval of the Compensation Committee, which approval is expected within 30 days of the date hereof, will make a One-Time Grant to Executive of restricted stock units under the Incentive Plan relating to 320,000* shares of the common stock of Holdings (“ RSUs ”), which shall vest in accordance with the two programs described below:

a. Time Vesting Program . 22,400 of the RSUs shall vest on each of December 31,

2014, December 31, 2015 and December 31, 2016 (for a total of 67,200 RSUs), provided that as of each such vesting date Executive is an active employee of the Company, and has not have given notice of termination of employment nor received notice of termination with Cause prior to, the relevant vesting date; and

b. Performance Vesting Program . If the Compensation Committee determines that:


i.	The Company has achieved on any calendar quarter-end on or before December 31, 2016, at least $660,000,000 in Pre-Tax Earnings for the twelve-month period preceding such quarter-end (the “ 100% Performance Goal ”), then 252,800 of RSUs subject to the Performance Vesting Program shall be earned, subject to the conditions set forth in Paragraph 1(c) below, or

ii. The Company has achieved at least $594,000,000 but less than

$660,000,000 in Pre-Tax Earnings for calendar year 2016 (the “ 90% Performance Goal ”), then 189,600 of RSUs subject to the Performance Vesting Program shall be earned, subject to the conditions set forth in Paragraph 1(c) below. For the avoidance of doubt, if the 90%

Performance Goal applies, Executive shall have no further right or interest in the additional 63,200 RSUs that are available under the Performance Vesting Program only if the 100% Performance Goal is achieved.

iii. The Company has achieved at least $528,000,000 but less than

$594,000,000 in Pre-Tax Earnings for calendar year 2016 (the “ 80% Performance Goal ”), then 126,400 of RSUs subject to the Performance Vesting Program shall be earned, subject to the conditions set forth in Paragraph 1(c) below. For the avoidance of doubt, if the 80%

Performance Goal applies, Executive shall have no further right or interest in the additional 126,400 RSUs that are available under the Performance Vesting Program only if the 100% Performance Goal is achieved.

c. Conditions . RSUs to be granted under the Performance Vesting Program are subject to (i) Executive’s compliance with the provisions of Paragraph 2(c) below and with all other terms and provisions of this this Agreement, including this Schedule 2, the Incentive Plan and the applicable award agreement and (ii) the audited financials of Holdings confirming the achievement of the applicable performance goal as set forth above in this Paragraph 1.

d. Pre-Tax Earnings. As used in this Schedule 2, “ Pre-Tax Earnings ” means the amount calculated in good faith by the Company for the applicable twelve month period in the same manner as “Income (loss) before provision for (benefit from) income taxes” is calculated and reported by Holdings in its publicly reported financials for the “Consumer” and “Insurance” segments.

2. In the event that the 100% Performance Goal, the 90% Performance Goal or the 80% Performance Goals is achieved, the relevant RSUs shall vest in two equal annual installments, as follows:

a. The first installment shall vest, (i) in the case where the 100% Performance Goal is met, on the day following the calendar quarter in which the 100% Performance Goal is met, provided such goal is met no later than December 31, 2016, or (ii) in the case where the 90% Performance Goal or the 80% Performance Goal is met, on January 1, 2017, and

b. The second installment shall vest on the first anniversary of the first vesting date. c. In order for either installment of the Performance Vesting Program to vest, the

Executive must be an active employee at, and not have given or received notice of

termination of employment prior to, the relevant vesting date.

3. If none of the 100% Performance Goal, the 90% Performance Goal or the 80% Performance Goal is achieved by December 31, 2016, the portion of the RSUs provided to Executive and/or the Executive Team that is subject to the Performance-Vesting Program will terminate and be cancelled without any action on the part of any party and without the payment of any consideration; provided , however , that nothing herein shall prohibit the CEO in his sole discretion from recommending to the Compensation Committee that it make an alternative equity grant to Executive or the Executive Team.

4. Notwithstanding anything to the contrary in this Schedule 2, if the Company terminates

Executive’s employment without Cause prior to the earlier of the achievement of the

100% Performance Goal and January 1, 2017, then the RSUs subject to the Performance Vesting Program shall be earned as provided in subparagraphs (a) through (c) below and subject to the conditions in subparagraph (d) below:

a. With respect to any such termination occurring in 2014, 63,200 RSUs if the

Company achieves at least $433,000,000 in Pre-Tax Earnings for calendar year

2014;

b. With respect to any such termination occurring in 2015, 126,400 RSUs if the

Company achieves at least $528,000,000 in Pre-Tax Earnings for calendar year

2015;

c. With respect to any such termination occurring in 2016, (i) 126,400 RSUs if the

Company achieves at least $528,000,000 in Pre-Tax Earnings for calendar year 2016, (ii) 189,600 RSUs if the Company achieves at least $594,000,000 in Pre- Tax Earnings for calendar year 2016; and (iii) 252,800 RSUs if the Company achieves at least $660,000,000 in Pre-Tax Earnings for calendar year 2016.

d. Any Performance Vesting Grant earned pursuant to this Paragraph 4, will vest

50% on January 1, 2017 and 50% on January 1, 2018, provided (x) Executive is in full compliance with all other terms and provisions of this Agreement, including this Schedule 2, the Incentive Plan, the applicable award agreement, and the release and separation agreement, if any, relating to Executive’s termination without Cause, and (y) audited financials confirming that Holdings achieved the financial results for the applicable calendar year described above in this Paragraph

5. Within 6 months after the Effective Date, and subject to the approval of the Compensation Committee, those of Executive’s direct reports who are selected by Executive, with the consent of the CEO (the “ Executive Team ”), will be eligible to receive One-Time Grants in amounts agreed with the CEO, with a cumulative maximum value for the Executive Team of $4,000,000 calculated as of the date of such grant, subject to the same conditions as provided herein for any grant to Executive, which will be set forth in individual award agreements with each applicable member of the Executive Team. Any portion of the One-Time Grant available for grant under this Paragraph 5 not allocated to Executive Team after such six-month period will be granted

to Executive under the same terms and conditions and in the same proportion as provided in Paragraph 1 above.

6. The Company and Executive agree that the provisions of this Schedule 2 will be renegotiated in good faith by both parties in the event Executive is materially hindered from achieving the Performance Goal as a result of strategic or other initiatives undertaken by the Company which require the resources of Executive and his team or the resources of other teams within the Company upon which Executive is dependent in achieving the Performance Goal.

7. The One-Time Grant is adopted under and in accordance with the terms and conditions of the Incentive Plan, and each payment made under the terms of the One-Time Grant is intended to qualify as an “Equity Award” that is payable upon the achievement of a “Performance Goal” for purposes of such plan.

* $8,000,000 divided by approximate stock price of $25 per share. To be trued up with actual price on Effective Date.

[End of Schedule 2]

SPRINGLEAF HOLDINGS, INC.,
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into as of April 13, 2015, to be effective as of January 1, 2016 (the “ Effective Date ”), by and among Springleaf Holdings, Inc., a Delaware corporation, (“ Springleaf ” and collectively with its subsidiaries and affiliates (including Springleaf General Services Corporation), the “ Company ”), Springleaf General Services Corporation (the “ Employer ”) and Timothy S. Ho (“ Executive ”). Where the context permits, references to the “Company” shall include the Company and any successor of the Company.

W I T N E S S E T H:

WHEREAS, Springleaf, the Employer and Executive entered into an employment agreement dated February 18, 2014 (the “ Existing Employment Agreement ”); and

WHEREAS , Springleaf, the Employer and Executive desire to enter into an employment agreement, effective as of the Effective Date, pursuant to which Executive will be employed as the Executive Vice President, Digital Operations of the Company (the “ Position ”) on the terms and subject to the conditions more fully set forth in this Agreement.

Timothy S. Ho 1 Employment Agreement (Effective 1/1/16)

2. LOCATION. The principal location of Executive’s employment with the Employer shall be at the Company’s offices in the Chicago, Illinois area. Executive understands and agrees that Executive may be required to travel extensively in performing Executive’s duties, which such travel may include frequent trips to the Company’s offices in Greenwich, Connecticut, Wilmington, Delaware, Evansville, Indiana, Minneapolis, Minnesota, and Tempe, Arizona among others.

3. EMPLOYMENT TERM. Executive’s employment under the terms and conditions of this Agreement shall commence on the Effective Date. Such employment shall continue for an initial term ending on December 31, 2018 (the “ Initial Term ”) and shall be automatically extended on the expiration of the Initial Term and on each anniversary of the expiration of the Initial Term for an additional one-year term (each, a “ Renewal Term ”). The Initial Term and any Renewal Terms are collectively referred to as the “ Term ” and the Term shall continue as described in the preceding sentence, unless Executive or the Employer has given written notice to the other no less than ninety (90) days prior to the expiration of the Term that the Term shall not be so extended. Notwithstanding the above, the Term shall expire immediately upon the termination of Executive’s employment pursuant to Section 6 hereof. For the avoidance of doubt, upon the expiration of the Term, the parties’ rights and obligations hereunder, other than with respect to the provisions set forth in Sections 5(d), 6, 7, 9 and 10(k) hereof, shall expire. Following the expiration of the Term, any continued employment of Executive shall be deemed “at-will.”

4. COMPENSATION.

(b) Annual Bonus. In addition to the Base Compensation, Executive shall be eligible to receive a minimum bonus in respect of each full calendar year during the Term (the “ Annual

Timothy S. Ho 2 Employment Agreement (Effective 1/1/16)

Bonus ”) of $400,000, subject to the terms, conditions and objectives agreed upon between the CEO and the Executive each year. The Company may at its sole discretion increase the Annual Bonus from time to time. The Annual Bonus shall be paid in cash and/or equity awards in the same proportions as paid to other Company executives, which awards will be subject to the terms and conditions of the Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan, as it may be amended from time to time, or any successor thereto (the “ Equity Plan ”), and the applicable award agreements thereunder approved by the Compensation Committee of Springleaf (the “ Compensation Committee ”). The Annual Bonus shall be paid or awarded, as applicable, to Executive when bonuses are normally paid in the year following the end of the calendar year to which it relates, provided Executive is an active employee of the Company at the time of, and has not given notice of termination of employment prior to, the date on which such Annual Bonus is paid.

5. BENEFITS AND PERQUISITES.

Timothy S. Ho 3 Employment Agreement (Effective 1/1/16)

currently in effect, and the Company, in its sole discretion, will determine the appropriate limits, level and coverage of officer and director liability insurance from time to time.

(b) Termination by the Employer without Cause .

Termination by the Employer without Cause . The Term and Executive’s employment hereunder may be terminated by the Employer at any time without Cause, effective thirty (30)

Timothy S. Ho 4 Employment Agreement (Effective 1/1/16)

days following the date on which a written notice to such effect is delivered to Executive. If Executive’s employment hereunder is terminated during the Term by the Employer other than for Cause, and other than due to Executive’s death or Disability, then Executive shall be entitled to (1) the Accrued Benefits and (2) upon Executive’s execution of a separation agreement containing a general release of claims in a form acceptable to the Company (the “ Release ”), and the expiration of the applicable revocation period with respect to such Release within sixty (60) days following the date of termination, and provided that Executive is in continued compliance with the Restrictive Covenants and any other ongoing obligation to which Executive is subject as of the date of termination:

(2) An amount equal to the average Annual Bonus earned and paid in respect of the three years completed prior to the year of termination, provided that if Executive has not received three Annual Bonuses or if there were no Annual Bonuses paid with respect to any of the three years prior to the year of termination, such average shall be calculated with respect to the lesser number of years for which Executive received a non-zero Annual Bonus, pro-rated based on the number of days in which Executive actively served in the Position during such year (a “ Pro-Rata Bonus ”), to be paid at such time as bonuses are normally paid in accordance with the normal practices of the Company with regard to paying bonuses or making payments under the Equity Plan as applicable to similarly situated executives. Notwithstanding the foregoing, if the Company is subject to the provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “ Code ”), and intends that amounts payable under the Annual Bonus provision or the Equity Plan are to qualify as “qualified performance-based compensation” under Section 162(m) of the Code, the Pro-Rata Bonus shall be determined based on actual performance for the year in which the termination occurs and shall be paid at the time bonuses are paid to employees generally.

Timothy S. Ho 5 Employment Agreement (Effective 1/1/16)

appointed and empowered to execute the Release), and provided that Executive is in continued compliance with the Restrictive Covenants or in any other agreement between Executive and the Company or to which Executive is a party or any other ongoing obligation to which Executive is subject as of the date of termination, a Pro-Rata Bonus, to be paid at such time as bonuses are normally paid in accordance with the normal practices of the Company with regard to paying bonuses or making payments under the Equity Plan as applicable to similarly situated executives.

(d) Definitions . For purposes of this Agreement:

(e) Resignation as Officer . Upon a termination of employment for any reason, Executive shall resign each position (if any) that Executive then holds as an officer of the

Timothy S. Ho 6 Employment Agreement (Effective 1/1/16)

Company. Executive’s execution of this Agreement shall be deemed the grant by Executive to the officers of the Company of a limited power of attorney to sign in Executive’s name and on Executive’s behalf any such documentation as may be required to be executed solely for the limited purposes of effectuating such resignations.

7. COVENANTS. Executive understands that the Company is continuously involved in the development, receipt, use and refinement of information that is proprietary, confidential or that has significant commercial value. Executive acknowledges that such information is essential to the Company’s successful business operations and that disclosure to third parties or other unauthorized use may cause material harm to the Company.

(a) Confidentiality .

Timothy S. Ho 7 Employment Agreement (Effective 1/1/16)

shall be delivered to the Company (i) at any time upon its request, or (ii) upon Executive’s separation from employment with the Company.

(b) Intellectual Property .

Timothy S. Ho 8 Employment Agreement (Effective 1/1/16)

(d) Non-Solicitation .

Timothy S. Ho 9 Employment Agreement (Effective 1/1/16)

thereof (or knowingly assist any other person in so soliciting, encouraging, enticing or inducing), or hire any person who has left the employment of, or has ceased providing services to, the Company or its Affiliates during the immediately preceding one-year period without the prior written consent of the Company or (y) disrupt, damage, impair or interfere with business of the Company by raiding Company employees.

(e) Mutual Non-Disparagement .

Timothy S. Ho 10 Employment Agreement (Effective 1/1/16)

post bond or other security and without having to prove the inadequacy of the available remedies at law, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company. In addition, the Company may take all such other actions and remedies available to it under law or in equity and shall be entitled to such damages as it can show it has sustained by reason of such breach.

Timothy S. Ho 11 Employment Agreement (Effective 1/1/16)

9. SECTION 409A . The intent of the parties is that payments and benefits under this Agreement either be exempt from or comply with Section 409A of the Code, to the extent subject thereto, and accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent any payments or benefits payable under this Agreement on account of Executive’s termination of employment constitute a deferral of compensation subject to Section 409A of the Code, Executive shall not be considered to have terminated employment until Executive has incurred a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h) (which shall be interpreted by (i) using “49 percent” in lieu of “20 percent” for purposes § 1.409A-1(h)(1)(ii), and (ii) using “50 percent in lieu of “80 percent” for purposes of §1.409A-1(h)(3)). Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified payment for purposes of Section 409A of the Code. Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent any payments or benefits payable under this Agreement on account of Executive’s termination of employment constitute a deferral of compensation subject to Section 409A of the Code and Executive is a “specified employee” within the meaning of Section 409A of the Code at the time of his separation from service, any amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following an Executive’s separation from service shall instead be paid on the first business day after the date that is six months following Executive’s separation from service (or, if earlier, Executive’s date of death). To the extent required to avoid an accelerated or additional tax under Section 409A of the Code, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in kind benefits provided to Executive) during one year may not affect amounts reimbursable or provided in any subsequent year and the right to reimbursement of in-kind benefits provided under this Agreement shall not be subject to liquidation or exchange for another benefit. The Company makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment made in accordance with the provisions of this Agreement.

Timothy S. Ho 12 Employment Agreement (Effective 1/1/16)

10. GENERAL.

To the Company or the Employer:

Springleaf Holdings, Inc.

601 NW 2 ^nd St.

Evansville, IN 47708

Attn: John Anderson, General Counsel

with a copy which shall not constitute notice to:

Springleaf Holdings, Inc.,
601 NW 2 ^nd St.

Evansville, IN 47708

Attn: Jay Levine, CEO

To Executive:

At the address shown in the Company’s personnel records

or to such other address or to the attention of such other person as the recipient party will have specified by prior written notice to the sending party.

Timothy S. Ho 13 Employment Agreement (Effective 1/1/16)

(g) Survivorship . The provisions of this Agreement necessary to carry out the intention of the parties as expressed herein shall survive the termination or expiration of this Agreement.

Timothy S. Ho 14 Employment Agreement (Effective 1/1/16)

Timothy S. Ho 15 Employment Agreement (Effective 1/1/16)

13. PRIOR AGREEMENTS TERMINATION . At the beginning of the Term of this Agreement on January 1, 2016, all prior agreements executed between Executive and the Company regarding Executive’s employment with the Company (including the Existing Employment Agreement) shall terminate and no longer be of force or effect between the parties, except for any award agreement executed pursuant to the Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan (including as outlined in Schedule 2 to the Existing Employment Agreement), as well as section 5(e) and 7(h) of the Existing Employment Agreement. In the event that the Existing Employment Agreement has been terminated by the Company for Cause prior to the effective date of this Agreement, this Agreement shall be considered void, and shall not become effective.

[Signature Page Follows]

Timothy S. Ho 16 Employment Agreement (Effective 1/1/16)

IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto have executed and delivered this Agreement as of the year and date first above written.

SPRINGLEAF HOLDINGS, INC.

By:
    Name:
    Title:

SPRINGLEAF GENERAL SERVICES CORPORATION

By:
    Name:
    Title:

EXECUTIVE

Timothy S. Ho

Timothy S. Ho 17 Employment Agreement (Effective 1/1/16)

Schedule 1

CURRENT ACTIVITIES

Management of two family investment entities.

[End of Schedule 1]

Timothy S. Ho 18 Employment Agreement (Effective 1/1/16)

Exhibit 31.1

Certifications

I, Jay N. Levine, President and Chief Executive Officer, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Springleaf Holdings, Inc. (the “registrant”);


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:	May 8, 2015

		/s/ Jay N. Levine
		Jay N. Levine
		President and Chief Executive Officer

Exhibit 31.2

Certifications

I, Minchung (Macrina) Kgil, Executive Vice President and Chief Financial Officer, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Springleaf Holdings, Inc. (the “registrant”);


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:	May 8, 2015

		/s/ Minchung (Macrina) Kgil
		Minchung (Macrina) Kgil
		Executive Vice President and Chief Financial Officer

Exhibit 32.1

Certifications

In connection with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 of Springleaf Holdings, Inc. (the Company) as filed with the Securities and Exchange Commission on the date hereof (the Report), each of Jay N. Levine, President and Chief Executive Officer of the Company, and Minchung (Macrina) Kgil, Executive Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



		/s/ Jay N. Levine
		Jay N. Levine
		President and Chief Executive Officer

		/s/ Minchung (Macrina) Kgil
		Minchung (Macrina) Kgil
		Executive Vice President and Chief Financial Officer

Date:	May 8, 2015