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Indiana
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35-0416090
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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601 N.W. Second Street, Evansville, IN
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47708
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
þ
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Smaller reporting company
o
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Emerging growth company
o
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Securities registered pursuant to Section 12(b) of the Act:
None
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Term or Abbreviation
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Definition
|
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2018 Annual Report on Form
10-K
|
|
Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on February 15, 2019
|
30-89 Delinquency ratio
|
|
net finance receivables 30-89 days past due as a percentage of net finance receivables
|
5.25% SFC Notes
|
|
$700 million of 5.25% Senior Notes due 2019 issued by SFC on December 3, 2014 and guaranteed by OMH
|
6.125% SFC Notes due 2024
|
|
$1.0 billion of 6.125% Senior Notes due 2024 issued by SFC on February 22, 2019 and guaranteed by OMH
|
ABS
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|
asset-backed securities
|
Accretable yield
|
|
the excess of the cash flows expected to be collected on the purchased credit impaired finance receivables over the discounted cash flows
|
Adjusted pretax income (loss)
|
|
a non-GAAP financial measure used by management as a key performance measure of our segments
|
AHL
|
|
American Health and Life Insurance Company, an insurance subsidiary of OMFH
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AIG
|
|
AIG Capital Corporation, a subsidiary of American International Group, Inc.
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AIG Share Sale Transaction
|
|
sale by SFH of 4,179,678 shares of OMH common stock pursuant to an Underwriting Agreement entered into February 21, 2018 among OMH, SFH and Morgan Stanley & Co. LLC
|
AOCI
|
|
Accumulated other comprehensive income (loss)
|
Apollo
|
|
Apollo Global Management, LLC and its consolidated subsidiaries
|
Apollo-Värde Group
|
|
an investor group led by funds managed by Apollo and Värde
|
Apollo-Värde Transaction
|
|
the purchase by the Apollo-Värde Group of 54,937,500 shares of OMH common stock from SFH pursuant to the Share Purchase Agreement for an aggregate purchase price of approximately $1.4 billion in cash on June 25, 2018
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ASC
|
|
Accounting Standards Codification
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ASU
|
|
Accounting Standards Update
|
Average daily debt balance
|
|
average of debt for each day in the period
|
Average net receivables
|
|
average of monthly average net finance receivables (net finance receivables at the beginning and end of each month divided by two) in the period
|
Blackstone
|
|
collectively, BTO Willow Holdings II, L.P. and Blackstone Family Tactical Opportunities Investment Partnership—NQ—ESC L.P.
|
BPS
|
|
basis points
|
CDO
|
|
collateralized debt obligations
|
Citigroup
|
|
CitiFinancial Credit Company
|
CMBS
|
|
commercial mortgage-backed securities
|
Contribution
|
|
On June 22, 2018, SFC entered into a Contribution Agreement with SFI, a wholly-owned subsidiary of OMH. Pursuant to the Contribution Agreement, Independence was contributed by SFI to SFC.
|
Exchange Act
|
|
Securities Exchange Act of 1934, as amended
|
FASB
|
|
Financial Accounting Standards Board
|
February 2019 Real Estate Loan Sale
|
|
SFC and certain of its subsidiaries sold a portfolio of real estate loans with a carrying value of $16 million, classified in finance receivables held for sale, for aggregate cash proceeds of $19 million on February 5, 2019.
|
FICO score
|
|
a credit score created by Fair Isaac Corporation
|
Fortress
|
|
Fortress Investment Group LLC
|
Fortress Acquisition
|
|
transaction by which FCFI Acquisition LLC, an affiliate of Fortress, acquired an 80% economic interest of the sole stockholder of SFC for a cash purchase price of $119 million, effective November 30, 2010
|
GAAP
|
|
generally accepted accounting principles in the United States of America
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Gross charge-off ratio
|
|
annualized gross charge-offs as a percentage of average net receivables
|
Indenture
|
|
the SFC Base Indenture, together with all subsequent Supplemental Indentures
|
Independence
|
|
Independence Holdings, LLC
|
Indiana DOI
|
|
Indiana Department of Insurance
|
Investment Company Act
|
|
Investment Company Act of 1940
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Term or Abbreviation
|
|
Definition
|
|
|
|
IRS
|
|
Internal Revenue Service
|
Junior Subordinated Debenture
|
|
$350 million aggregate principal amount of 60-year junior subordinated debt issued by SFC under an indenture dated January 22, 2007, by and between SFC and Deutsche Bank Trust Company, as trustee, and guaranteed by OMH
|
LIBOR
|
|
London Interbank Offered Rate
|
Merit
|
|
Merit Life Insurance Co., an insurance subsidiary of SFC
|
Net charge-off ratio
|
|
annualized net charge-offs as a percentage of average net receivables
|
Net interest income
|
|
interest income less interest expense
|
OCLI
|
|
OneMain Consumer Loan, Inc
|
ODART
|
|
OneMain Direct Auto Receivables Trust
|
OGSC
|
|
OneMain General Services Corporation, successor to Springleaf General Services Corporation and SFMC
|
OMFIT
|
|
OneMain Financial Issuance Trust
|
OMH
|
|
OneMain Holdings, Inc.
|
OneMain
|
|
OneMain Financial Holdings, LLC, collectively with its subsidiaries
|
OneMain Acquisition
|
|
Acquisition of OneMain from CitiFinancial Credit Company, effective November 1, 2015
|
Other securities
|
|
securities for which the fair value option was elected and equity securities. Other Securities recognize unrealized gains and losses in investment revenues
|
Other SFC Notes
|
|
collectively, SFC’s 8.25% Senior Notes due 2023, 7.75% Senior Notes due 2021, and 6.00% Senior Notes due 2020, on a senior unsecured basis, and the Junior Subordinated Debenture, on a junior subordinated basis, issued by SFC and guaranteed by OMH
|
PRSUs
|
|
performance-based RSUs
|
Recovery ratio
|
|
annualized recoveries on net charge-offs as a percentage of average net receivables
|
Retail sales finance portfolio
|
|
collectively, retail sales finance contracts and revolving retail accounts
|
RMBS
|
|
residential mortgage-backed securities
|
RSAs
|
|
restricted stock awards
|
RSUs
|
|
restricted stock units
|
SCLH
|
|
Springleaf Consumer Loan Holding Company
|
SEC
|
|
U.S. Securities and Exchange Commission
|
Securities Act
|
|
Securities Act of 1933, as amended
|
Segment Accounting Basis
|
|
a basis used to report the operating results of our segments, which reflects our allocation methodologies for certain costs and excludes the impact of applying purchase accounting
|
Settlement Agreement
|
|
a Settlement Agreement with the U.S. Department of Justice entered into by OMH and certain of its subsidiaries on November 13, 2015, in connection with the OneMain Acquisition
|
SFC
|
|
Springleaf Finance Corporation
|
SFC Base Indenture
|
|
Indenture, dated as of December 3, 2014
|
SFC Guaranty Agreements
|
|
agreements entered into on December 30, 2013 by OMH whereby it agreed to fully and unconditionally guarantee the payments of principal, premium (if any) and interest on the Other SFC Notes
|
SFC Senior Notes Indentures
|
|
the SFC Base Indenture as supplemented by the SFC First Supplemental Indenture, the SFC Second Supplemental Indenture, the SFC Third Supplemental Indenture, the SFC Fourth Supplemental Indenture, the SFC Fifth Supplemental Indenture and the SFC Sixth Supplemental Indenture
|
SFC Seventh Supplemental Indenture
|
|
Seventh Supplemental Indenture, dated as of February 22, 2019, to the SFC Base Indenture
|
SFH
|
|
Springleaf Financial Holdings, LLC, an entity owned primarily by a private equity fund managed by an affiliate of Fortress that sold 54,937,500 shares of OMH’s common stock to the Apollo-Värde Group in the Apollo-Värde Transaction
|
SFI
|
|
Springleaf Finance, Inc.
|
SFMC
|
|
Springleaf Finance Management Corporation
|
Share Purchase Agreement
|
|
a share purchase agreement entered into on January 3, 2018, among the Apollo-Värde Group, SFH and OMH to acquire from SFH 54,937,500 shares of OMH’s common stock that was issued and outstanding as of such date, representing the entire holdings of OMH’s stock beneficially owned by Fortress
|
SLFT
|
|
Springleaf Funding Trust
|
SMHC
|
|
Springleaf Mortgage Holding Company
|
Term or Abbreviation
|
|
Definition
|
|
|
|
SpringCastle Joint Venture
|
|
joint venture among SpringCastle America, LLC, SpringCastle Credit, LLC, SpringCastle Finance, LLC, and SpringCastle Acquisition LLC in which SpringCastle Holdings, LLC previously owned a 47% equity interest in each of SpringCastle America, LLC, SpringCastle Credit, LLC and SpringCastle Finance, LLC and Springleaf Acquisition Corporation previously owned a 47% equity interest in SpringCastle Acquisition LLC
|
SpringCastle Portfolio
|
|
loans acquired through the SpringCastle Joint Venture
|
Springleaf
|
|
OMH and its subsidiaries (other than OneMain)
|
Tax Act
|
|
Public Law 115-97 amending the Internal Revenue Code of 1986
|
TDR finance receivables
|
|
troubled debt restructured finance receivables.
Debt restructuring in which a concession is granted to the borrower as a result of economic or legal reasons related to the borrower’s financial difficulties.
|
Triton
|
|
Triton Insurance Company, an insurance subsidiary of OMFH
|
UPB
|
|
unpaid principal balance for interest bearing accounts and the gross remaining contractual payments less the unaccreted balance of unearned finance charges for precompute accounts
|
Värde
|
|
Värde Partners, Inc.
|
VIEs
|
|
variable interest entities
|
Weighted average interest rate
|
|
annualized interest expense as a percentage of average debt
|
Yield
|
|
annualized finance charges as a percentage of average net receivables
|
Item 1. Financial Statements.
|
|
|
|
|
|
||||
(dollars in millions, except par value amount)
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
1,705
|
|
|
$
|
663
|
|
Investment securities
|
|
1,743
|
|
|
1,694
|
|
||
Net finance receivables (includes loans of consolidated VIEs of $9.1 billion in 2019 and $8.5 billion in 2018)
|
|
16,136
|
|
|
16,122
|
|
||
Unearned insurance premium and claim reserves
|
|
(668
|
)
|
|
(662
|
)
|
||
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $430 million in 2019 and $444 million in 2018)
|
|
(733
|
)
|
|
(726
|
)
|
||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses
|
|
14,735
|
|
|
14,734
|
|
||
Finance receivables held for sale
|
|
78
|
|
|
103
|
|
||
Notes receivable from parent
|
|
262
|
|
|
260
|
|
||
Restricted cash and restricted cash equivalents (include restricted cash and restricted cash equivalents of consolidated VIEs of $558 million in 2019 and $479 million in 2018)
|
|
575
|
|
|
499
|
|
||
Goodwill
|
|
1,422
|
|
|
1,422
|
|
||
Other intangible assets
|
|
370
|
|
|
387
|
|
||
Other assets
|
|
736
|
|
|
547
|
|
||
Total assets
|
|
$
|
21,626
|
|
|
$
|
20,309
|
|
|
|
|
|
|
||||
Liabilities and Shareholder’s Equity
|
|
|
|
|
|
|
||
Long-term debt (includes debt of consolidated VIEs of $8.1 billion in 2019 and $7.5 billion in 2018)
|
|
$
|
16,117
|
|
|
$
|
15,178
|
|
Insurance claims and policyholder liabilities
|
|
642
|
|
|
685
|
|
||
Deferred and accrued taxes
|
|
89
|
|
|
42
|
|
||
Other liabilities (includes other liabilities of consolidated VIEs of $16 million in 2019 and $14 million in 2018)
|
|
568
|
|
|
383
|
|
||
Total liabilities
|
|
17,416
|
|
|
16,288
|
|
||
Commitments and contingent liabilities (Note 14)
|
|
|
|
|
|
|||
|
|
|
|
|
||||
Shareholder’s equity:
|
|
|
|
|
|
|
||
Common stock, par value $.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued and outstanding at March 31, 2019 and December 31, 2018
|
|
5
|
|
|
5
|
|
||
Additional paid-in capital
|
|
2,145
|
|
|
2,110
|
|
||
Accumulated other comprehensive loss
|
|
(2
|
)
|
|
(34
|
)
|
||
Retained earnings
|
|
2,062
|
|
|
1,940
|
|
||
Total shareholder’s equity
|
|
4,210
|
|
|
4,021
|
|
||
Total liabilities and shareholder’s equity
|
|
$
|
21,626
|
|
|
$
|
20,309
|
|
|
|
Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Interest income:
|
|
|
|
|
||||
Finance charges
|
|
$
|
953
|
|
|
$
|
857
|
|
Finance receivables held for sale
|
|
3
|
|
|
3
|
|
||
Total interest income
|
|
956
|
|
|
860
|
|
||
|
|
|
|
|
||||
Interest expense
|
|
236
|
|
|
200
|
|
||
|
|
|
|
|
||||
Net interest income
|
|
720
|
|
|
660
|
|
||
|
|
|
|
|
||||
Provision for finance receivable losses
|
|
286
|
|
|
253
|
|
||
|
|
|
|
|
||||
Net interest income after provision for finance receivable losses
|
|
434
|
|
|
407
|
|
||
|
|
|
|
|
||||
Other revenues:
|
|
|
|
|
|
|
||
Insurance
|
|
110
|
|
|
105
|
|
||
Investment
|
|
26
|
|
|
13
|
|
||
Interest income on notes receivable from parent
|
|
4
|
|
|
5
|
|
||
Net loss on repurchases and repayments of debt
|
|
(21
|
)
|
|
(1
|
)
|
||
Net gain on sale of real estate loans
|
|
3
|
|
|
—
|
|
||
Other
|
|
30
|
|
|
9
|
|
||
Total other revenues
|
|
152
|
|
|
131
|
|
||
|
|
|
|
|
||||
Other expenses:
|
|
|
|
|
|
|
||
Salaries and benefits
|
|
199
|
|
|
184
|
|
||
Other operating expenses
|
|
137
|
|
|
138
|
|
||
Insurance policy benefits and claims
|
|
45
|
|
|
45
|
|
||
Total other expenses
|
|
381
|
|
|
367
|
|
||
|
|
|
|
|
||||
Income before income taxes
|
|
205
|
|
|
171
|
|
||
|
|
|
|
|
||||
Income taxes
|
|
49
|
|
|
41
|
|
||
|
|
|
|
|
||||
Net income
|
|
$
|
156
|
|
|
$
|
130
|
|
|
|
Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Net income
|
|
$
|
156
|
|
|
$
|
130
|
|
|
|
|
|
|
||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
||
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities
|
|
39
|
|
|
(24
|
)
|
||
Foreign currency translation adjustments
|
|
2
|
|
|
(3
|
)
|
||
Income tax effect:
|
|
|
|
|
|
|
||
Net unrealized gains (losses) on non-credit impaired available-for-sale securities
|
|
(9
|
)
|
|
1
|
|
||
Other comprehensive income (loss), net of tax
|
|
32
|
|
|
(26
|
)
|
||
|
|
|
|
|
||||
Comprehensive income
|
|
$
|
188
|
|
|
$
|
104
|
|
(dollars in millions)
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other Comprehensive
Income (Loss)
|
|
Retained
Earnings
|
|
Total Shareholder’s
Equity
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, January 1, 2019
|
|
$
|
5
|
|
|
$
|
2,110
|
|
|
$
|
(34
|
)
|
|
$
|
1,940
|
|
|
$
|
4,021
|
|
Contribution of SCLH to SFC from SFI
|
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|||||
Share-based compensation expense, net of forfeitures
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Withholding tax on share-based compensation
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|||||
Cash Dividend to SFI
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
(34
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
156
|
|
|
156
|
|
|||||
Balance, March 31, 2019
|
|
$
|
5
|
|
|
$
|
2,145
|
|
|
$
|
(2
|
)
|
|
$
|
2,062
|
|
|
$
|
4,210
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, January 1, 2018
|
|
$
|
5
|
|
|
$
|
1,909
|
|
|
$
|
6
|
|
|
$
|
1,482
|
|
|
$
|
3,402
|
|
Non-cash incentive compensation from SFH
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Share-based compensation expense, net of forfeitures
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Withholding tax on share-based compensation
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(26
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
130
|
|
|
130
|
|
|||||
Balance, March 31, 2018
|
|
$
|
5
|
|
|
$
|
1,914
|
|
|
$
|
(20
|
)
|
|
$
|
1,612
|
|
|
$
|
3,511
|
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
|||||
|
|
|
|
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
156
|
|
|
$
|
130
|
|
Reconciling adjustments:
|
|
|
|
|
|
|
||
Provision for finance receivable losses
|
|
286
|
|
|
253
|
|
||
Depreciation and amortization
|
|
68
|
|
|
67
|
|
||
Deferred income tax charge (benefit)
|
|
8
|
|
|
11
|
|
||
Net loss on repurchases and repayments of debt
|
|
21
|
|
|
1
|
|
||
Non-cash incentive compensation from SFH
|
|
—
|
|
|
4
|
|
||
Share-based compensation expense, net of forfeitures
|
|
6
|
|
|
2
|
|
||
Other
|
|
(11
|
)
|
|
6
|
|
||
Cash flows due to changes in other assets and other liabilities
|
|
22
|
|
|
44
|
|
||
Net cash provided by operating activities
|
|
556
|
|
|
518
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Net principal originations of finance receivables held for investment and held for sale
|
|
(290
|
)
|
|
(336
|
)
|
||
Proceeds on sales of finance receivables held for sale originated as held for investment
|
|
19
|
|
|
—
|
|
||
Cash advances on intercompany notes receivable
|
|
(2
|
)
|
|
(19
|
)
|
||
Principal collections on intercompany notes receivable
|
|
—
|
|
|
26
|
|
||
Available-for-sale securities purchased
|
|
(154
|
)
|
|
(197
|
)
|
||
Available-for-sale securities called, sold, and matured
|
|
103
|
|
|
156
|
|
||
Trading and other securities called, sold, and matured
|
|
5
|
|
|
8
|
|
||
Other, net
|
|
12
|
|
|
(15
|
)
|
||
Net cash used for investing activities
|
|
(307
|
)
|
|
(377
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt, net of commissions
|
|
2,327
|
|
|
2,805
|
|
||
Repayment of long-term debt
|
|
(1,425
|
)
|
|
(1,972
|
)
|
||
Cash contribution of SCLH
|
|
12
|
|
|
—
|
|
||
Cash dividend to Parent
|
|
(34
|
)
|
|
—
|
|
||
Payments on intercompany note payable
|
|
(6
|
)
|
|
—
|
|
||
Withholding tax on share-based compensation
|
|
(5
|
)
|
|
(1
|
)
|
||
Net cash provided by financing activities
|
|
869
|
|
|
832
|
|
||
|
|
|
|
|
||||
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents
|
|
1,118
|
|
|
973
|
|
||
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period
|
|
1,162
|
|
|
1,456
|
|
||
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period
|
|
$
|
2,280
|
|
|
$
|
2,429
|
|
|
|
|
|
|
||||
Supplemental cash flow information
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,705
|
|
|
$
|
1,750
|
|
Restricted cash and restricted cash equivalents
|
|
575
|
|
|
679
|
|
||
Total cash and cash equivalents and restricted cash and restricted cash equivalents
|
|
$
|
2,280
|
|
|
$
|
2,429
|
|
|
|
|
|
|
||||
Cash paid for amounts included in the measurement of operating lease liabilities
|
|
$
|
15
|
|
|
$
|
—
|
|
Supplemental non-cash activities
|
|
|
|
|
||||
Non-cash contribution of SCLH
|
|
$
|
22
|
|
|
$
|
—
|
|
Right-of-use assets obtained in exchange for operating lease obligations
|
|
173
|
|
|
—
|
|
||
Net unsettled investment security purchases
|
|
(2
|
)
|
|
(5
|
)
|
(dollars in millions)
|
Three Months Ended March 31, 2018
|
|||||||||||||||
|
As Reported
|
|
|
|
|
|
Consolidated
|
|||||||||
Year to Date
|
|
SFC
|
|
Independence
|
|
Adjustments
|
|
SFC
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income:
|
|
|
|
|
|
|
|
|
||||||||
Finance charges
|
|
$
|
325
|
|
|
$
|
532
|
|
|
$
|
—
|
|
|
$
|
857
|
|
Finance receivables held for sale originated as held for investment
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Total interest income
|
|
328
|
|
|
532
|
|
|
—
|
|
|
860
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
130
|
|
|
133
|
|
|
(63
|
)
|
|
200
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net interest income
|
|
198
|
|
|
399
|
|
|
63
|
|
|
660
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Provision for finance receivable losses
|
|
81
|
|
|
172
|
|
|
—
|
|
|
253
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net interest income after provision for finance receivable losses
|
|
117
|
|
|
227
|
|
|
63
|
|
|
407
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other revenues:
|
|
|
|
|
|
|
|
|
||||||||
Insurance
|
|
21
|
|
|
84
|
|
|
—
|
|
|
105
|
|
||||
Investment
|
|
5
|
|
|
8
|
|
|
—
|
|
|
13
|
|
||||
Interest income on notes receivable from parent and affiliates
|
|
68
|
|
|
—
|
|
|
(63
|
)
|
|
5
|
|
||||
Net loss on repurchases and repayments of debt
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Other
|
|
1
|
|
|
15
|
|
|
(7
|
)
|
|
9
|
|
||||
Total other revenues
|
|
95
|
|
|
106
|
|
|
(70
|
)
|
|
131
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other expenses:
|
|
|
|
|
|
|
|
|
||||||||
Salaries and benefits
|
|
82
|
|
|
102
|
|
|
—
|
|
|
184
|
|
||||
Other operating expenses
|
|
52
|
|
|
93
|
|
|
(7
|
)
|
|
138
|
|
||||
Insurance policy benefits and claims
|
|
7
|
|
|
38
|
|
|
—
|
|
|
45
|
|
||||
Total other expenses
|
|
141
|
|
|
233
|
|
|
(7
|
)
|
|
367
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before income tax expense
|
|
71
|
|
|
100
|
|
|
—
|
|
|
171
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
|
17
|
|
|
24
|
|
|
—
|
|
|
41
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
54
|
|
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
130
|
|
|
Three Months Ended March 31, 2018
|
|||||||||||||||
(dollars in millions)
|
|
As Reported
SFC |
|
Independence
|
|
Adjustments
|
|
Consolidated
SFC |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
54
|
|
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
130
|
|
Reconciling adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Provision for finance receivable losses
|
|
81
|
|
|
172
|
|
|
—
|
|
|
253
|
|
||||
Depreciation and amortization
|
|
28
|
|
|
39
|
|
|
—
|
|
|
67
|
|
||||
Deferred income tax charge (benefit)
|
|
(3
|
)
|
|
14
|
|
|
—
|
|
|
11
|
|
||||
Non-cash incentive compensation from Initial Stockholder
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Net loss on repurchases and repayments of debt
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Share-based compensation expense, net of forfeitures
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Other
|
|
5
|
|
|
1
|
|
|
—
|
|
|
6
|
|
||||
Other assets and other liabilities
|
|
(12
|
)
|
|
56
|
|
|
—
|
|
|
44
|
|
||||
Net cash provided by operating activities
|
|
157
|
|
|
361
|
|
|
—
|
|
|
518
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
||||||||
Net principal originations of finance receivables held for investment and held for sale
|
|
(117
|
)
|
|
(219
|
)
|
|
—
|
|
|
(336
|
)
|
||||
Cash advances on intercompany notes receivable
|
|
(545
|
)
|
|
—
|
|
|
526
|
|
|
(19
|
)
|
||||
Proceeds from repayments of principal and assignment of intercompany notes receivable
|
|
334
|
|
|
—
|
|
|
(308
|
)
|
|
26
|
|
||||
Available-for-sale securities purchased
|
|
(24
|
)
|
|
(178
|
)
|
|
5
|
|
|
(197
|
)
|
||||
Available-for-sale securities called, sold, and matured
|
|
56
|
|
|
100
|
|
|
—
|
|
|
156
|
|
||||
Trading and other securities called, sold, and matured
|
|
1
|
|
|
7
|
|
|
—
|
|
|
8
|
|
||||
Other, net
|
|
(5
|
)
|
|
(10
|
)
|
|
—
|
|
|
(15
|
)
|
||||
Net cash provided by (used for) financing activities
|
|
(300
|
)
|
|
(300
|
)
|
|
223
|
|
|
(377
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of long-term debt, net of commissions
|
|
2,001
|
|
|
804
|
|
|
—
|
|
|
2,805
|
|
||||
Repayments of long-term debt
|
|
(589
|
)
|
|
(1,378
|
)
|
|
(5
|
)
|
|
(1,972
|
)
|
||||
Proceeds from intercompany note payable
|
|
—
|
|
|
526
|
|
|
(526
|
)
|
|
—
|
|
||||
Payments on intercompany note payable
|
|
—
|
|
|
(308
|
)
|
|
308
|
|
|
—
|
|
||||
Withholding tax on share-based compensation
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Net cash provided by (used for) financing activities
|
|
1,412
|
|
|
(357
|
)
|
|
(223
|
)
|
|
832
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents
|
|
1,269
|
|
|
(296
|
)
|
|
—
|
|
|
973
|
|
||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period
|
|
413
|
|
|
1,043
|
|
|
—
|
|
|
$
|
1,456
|
|
|||
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period
|
|
$
|
1,682
|
|
|
$
|
747
|
|
|
$
|
—
|
|
|
$
|
2,429
|
|
|
|
|
|
|
|
|
|
|
||||||||
Supplemental cash flow information
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
1,431
|
|
|
$
|
319
|
|
|
$
|
—
|
|
|
$
|
1,750
|
|
Restricted cash and restricted cash equivalents
|
|
251
|
|
|
428
|
|
|
—
|
|
|
679
|
|
||||
Total cash and cash equivalents and restricted cash and restricted cash equivalents
|
|
$
|
1,682
|
|
|
$
|
747
|
|
|
$
|
—
|
|
|
$
|
2,429
|
|
(dollars in millions)
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Gross receivables *
|
|
$
|
15,968
|
|
|
$
|
15,936
|
|
Unearned points and fees
|
|
(202
|
)
|
|
(200
|
)
|
||
Accrued finance charges
|
|
240
|
|
|
253
|
|
||
Deferred origination costs
|
|
130
|
|
|
133
|
|
||
Total
|
|
$
|
16,136
|
|
|
$
|
16,122
|
|
*
|
Gross receivables equal the UPB except for the following:
|
•
|
Finance receivables purchased as a performing receivable
— gross receivables are equal to UPB and, if applicable, any remaining unearned premium or discount established at the time of purchase to reflect the finance receivable balance at its initial fair value; and
|
•
|
Purchased credit impaired finance receivables
— gross receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts.
|
(dollars in millions)
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Performing
|
|
|
|
|
||||
Current
|
|
$
|
15,489
|
|
|
$
|
15,373
|
|
30-59 days past due
|
|
179
|
|
|
228
|
|
||
60-89 days past due
|
|
133
|
|
|
160
|
|
||
Total performing
|
|
15,801
|
|
|
15,761
|
|
||
Nonperforming
|
|
|
|
|
||||
90-179 days past due
|
|
327
|
|
|
353
|
|
||
180 days or more past due
|
|
8
|
|
|
8
|
|
||
Total nonperforming
|
|
335
|
|
|
361
|
|
||
Total
|
|
$
|
16,136
|
|
|
$
|
16,122
|
|
(dollars in millions)
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Personal Loans
|
|
|
|
|
||||
Carrying amount, net of allowance
|
|
$
|
73
|
|
|
$
|
89
|
|
Outstanding balance (a)
|
|
116
|
|
|
135
|
|
||
Allowance for purchased credit impaired finance receivable losses (b)
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
||||
Real Estate Loans - Held for Sale
|
|
|
|
|
||||
Carrying amount
|
|
$
|
22
|
|
|
$
|
28
|
|
Outstanding balance (a)
|
|
39
|
|
|
48
|
|
(a)
|
Outstanding balance is defined as UPB of the loans with a net carrying amount.
|
(b)
|
The allowance for purchased credit impaired finance receivable losses reflects the carrying value of the purchased credit impaired loans held for investment exceeding the present value of the expected cash flows. As indicated above, no allowance was required as of
March 31, 2019
or December 31, 2018.
|
|
|
Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Personal Loans
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
39
|
|
|
$
|
47
|
|
Accretion
|
|
(5
|
)
|
|
(6
|
)
|
||
Reclassifications from nonaccretable difference (a)
|
|
—
|
|
|
8
|
|
||
Balance at end of period
|
|
$
|
34
|
|
|
$
|
49
|
|
|
|
|
|
|
||||
Real Estate Loans - Held for Sale
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
27
|
|
|
$
|
53
|
|
Accretion
|
|
(1
|
)
|
|
(1
|
)
|
||
Transfer due to finance receivables sold
|
|
(3
|
)
|
|
—
|
|
||
Balance at end of period
|
|
$
|
23
|
|
|
$
|
52
|
|
(a)
|
Reclassifications from nonaccretable difference represents the increases in accretable yield resulting from higher estimated undiscounted cash flows.
|
(dollars in millions)
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
|
|
|
|
|
|
|||
Personal Loans
|
|
|
|
|
||||
TDR gross receivables (a)
|
|
$
|
499
|
|
|
$
|
449
|
|
TDR net receivables (b)
|
|
502
|
|
|
452
|
|
||
Allowance for TDR finance receivable losses
|
|
196
|
|
|
169
|
|
||
|
|
|
|
|
||||
Real Estate Loans - Held for Sale
|
|
|
|
|
||||
TDR gross receivables (a)
|
|
$
|
58
|
|
|
$
|
89
|
|
TDR net receivables (b)
|
|
58
|
|
|
75
|
|
(a)
|
TDR gross receivables
— gross receivables are equal to UPB and, if applicable, any remaining unearned premium or discount established at the time of purchase if previously purchased as a performing receivable.
|
(b)
|
TDR net receivables
— TDR gross receivables net of unearned points and fees, accrued finance charges, deferred origination costs and any impairment for real estate loans held for sale.
|
(dollars in millions)
|
|
Personal
Loans
|
|
Other Receivables *
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
||||||
TDR average net receivables
|
|
$
|
477
|
|
|
$
|
64
|
|
|
$
|
541
|
|
TDR finance charges recognized
|
|
12
|
|
|
1
|
|
|
13
|
|
|||
|
|
|
|
|
|
|
||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
||||||
TDR average net receivables
|
|
$
|
336
|
|
|
$
|
139
|
|
|
$
|
475
|
|
TDR finance charges recognized
|
|
11
|
|
|
2
|
|
|
13
|
|
|
|
Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
TDR average net receivables
|
|
$
|
64
|
|
|
$
|
90
|
|
TDR finance charges recognized
|
|
1
|
|
|
1
|
|
|
|
Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Personal Loans
|
|
|
|
|
||||
Pre-modification TDR net finance receivables
|
|
$
|
120
|
|
|
$
|
94
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
||||
Rate reduction
|
|
$
|
85
|
|
|
$
|
70
|
|
Other *
|
|
35
|
|
|
24
|
|
||
Total post-modification TDR net finance receivables
|
|
$
|
120
|
|
|
$
|
94
|
|
Number of TDR accounts
|
|
18,506
|
|
|
14,652
|
|
*
|
“Other” modifications primarily include potential principal and interest forgiveness contingent on future payment performance by the
|
|
|
Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Personal Loans
|
|
|
|
|
||||
TDR net finance receivables *
|
|
$
|
19
|
|
|
$
|
17
|
|
Number of TDR accounts
|
|
2,925
|
|
|
2,706
|
|
*
|
Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted.
|
(dollars in millions)
|
|
Personal
Loans |
|
Other
Receivables
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|||
Balance at beginning of period
|
|
$
|
726
|
|
|
$
|
—
|
|
|
$
|
726
|
|
Provision for finance receivable losses
|
|
286
|
|
|
—
|
|
|
286
|
|
|||
Charge-offs
|
|
(311
|
)
|
|
—
|
|
|
(311
|
)
|
|||
Recoveries
|
|
27
|
|
|
—
|
|
|
27
|
|
|||
Other *
|
|
5
|
|
|
—
|
|
|
5
|
|
|||
Balance at end of period
|
|
$
|
733
|
|
|
$
|
—
|
|
|
$
|
733
|
|
|
|
|
|
|
|
|
||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
Balance at beginning of period
|
|
$
|
668
|
|
|
$
|
24
|
|
|
$
|
692
|
|
Provision for finance receivable losses
|
|
253
|
|
|
—
|
|
|
253
|
|
|||
Charge-offs
|
|
(287
|
)
|
|
(1
|
)
|
|
(288
|
)
|
|||
Recoveries
|
|
27
|
|
|
1
|
|
|
28
|
|
|||
Balance at end of period
|
|
$
|
661
|
|
|
$
|
24
|
|
|
$
|
685
|
|
*
|
Other represents the
increase of SFC’s allowance for finance receivable losses due to the contribution of
Springleaf Consumer Loan Holding Company (“SCLH”)
which was effective as of January 1, 2019. The contribution is presented prospectively because it is deemed to be a contribution of net assets.
See Note
8
for more information regarding the contribution.
|
(dollars in millions)
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Allowance for finance receivable losses:
|
|
|
|
|
|
|
||
Collectively evaluated for impairment
|
|
$
|
537
|
|
|
$
|
557
|
|
Purchased credit impaired finance receivables
|
|
—
|
|
|
—
|
|
||
TDR finance receivables
|
|
196
|
|
|
169
|
|
||
Total
|
|
$
|
733
|
|
|
$
|
726
|
|
|
|
|
|
|
||||
Finance receivables:
|
|
|
|
|
|
|
||
Collectively evaluated for impairment
|
|
$
|
15,561
|
|
|
$
|
15,581
|
|
Purchased credit impaired finance receivables
|
|
73
|
|
|
89
|
|
||
TDR finance receivables
|
|
502
|
|
|
452
|
|
||
Total
|
|
$
|
16,136
|
|
|
$
|
16,122
|
|
|
|
|
|
|
||||
Allowance for finance receivable losses as a percentage of finance receivables
|
|
4.54
|
%
|
|
4.50
|
%
|
(dollars in millions)
|
|
Cost/
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17
|
|
Obligations of states, municipalities, and political subdivisions
|
|
87
|
|
|
—
|
|
|
—
|
|
|
87
|
|
||||
Certificates of deposit and commercial paper
|
|
59
|
|
|
—
|
|
|
—
|
|
|
59
|
|
||||
Non-U.S. government and government sponsored entities
|
|
143
|
|
|
2
|
|
|
—
|
|
|
145
|
|
||||
Corporate debt
|
|
1,056
|
|
|
13
|
|
|
(10
|
)
|
|
1,059
|
|
||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
RMBS
|
|
141
|
|
|
1
|
|
|
(1
|
)
|
|
141
|
|
||||
CMBS
|
|
67
|
|
|
—
|
|
|
(1
|
)
|
|
66
|
|
||||
CDO/ABS
|
|
82
|
|
|
1
|
|
|
—
|
|
|
83
|
|
||||
Total
|
|
$
|
1,652
|
|
|
$
|
17
|
|
|
$
|
(12
|
)
|
|
$
|
1,657
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21
|
|
Obligations of states, municipalities, and political subdivisions
|
|
91
|
|
|
—
|
|
|
(1
|
)
|
|
90
|
|
||||
Certificates of deposit and commercial paper
|
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
||||
Non-U.S. government and government sponsored entities
|
|
145
|
|
|
—
|
|
|
(2
|
)
|
|
143
|
|
||||
Corporate debt
|
|
1,027
|
|
|
2
|
|
|
(32
|
)
|
|
997
|
|
||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
RMBS
|
|
130
|
|
|
—
|
|
|
(2
|
)
|
|
128
|
|
||||
CMBS
|
|
72
|
|
|
—
|
|
|
(1
|
)
|
|
71
|
|
||||
CDO/ABS
|
|
94
|
|
|
1
|
|
|
(1
|
)
|
|
94
|
|
||||
Total
|
|
$
|
1,643
|
|
|
$
|
3
|
|
|
$
|
(39
|
)
|
|
$
|
1,607
|
|
|
|
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, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. government and government sponsored entities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
—
|
|
Obligations of states, municipalities, and political subdivisions
|
|
5
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
43
|
|
|
—
|
|
||||||
Non-U.S. government and government sponsored entities
|
|
1
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
46
|
|
|
—
|
|
||||||
Corporate debt
|
|
63
|
|
|
(1
|
)
|
|
416
|
|
|
(9
|
)
|
|
479
|
|
|
(10
|
)
|
||||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
RMBS
|
|
10
|
|
|
—
|
|
|
63
|
|
|
(1
|
)
|
|
73
|
|
|
(1
|
)
|
||||||
CMBS
|
|
3
|
|
|
—
|
|
|
42
|
|
|
(1
|
)
|
|
45
|
|
|
(1
|
)
|
||||||
CDO/ABS
|
|
3
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||||
Total
|
|
$
|
85
|
|
|
$
|
(1
|
)
|
|
$
|
651
|
|
|
$
|
(11
|
)
|
|
$
|
736
|
|
|
$
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. government and government sponsored entities
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
—
|
|
Obligations of states, municipalities, and political subdivisions
|
|
10
|
|
|
—
|
|
|
57
|
|
|
(1
|
)
|
|
67
|
|
|
(1
|
)
|
||||||
Non-U.S. government and government sponsored entities
|
|
19
|
|
|
(1
|
)
|
|
97
|
|
|
(1
|
)
|
|
116
|
|
|
(2
|
)
|
||||||
Corporate debt
|
|
377
|
|
|
(14
|
)
|
|
448
|
|
|
(18
|
)
|
|
825
|
|
|
(32
|
)
|
||||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
RMBS
|
|
23
|
|
|
—
|
|
|
78
|
|
|
(2
|
)
|
|
101
|
|
|
(2
|
)
|
||||||
CMBS
|
|
10
|
|
|
—
|
|
|
54
|
|
|
(1
|
)
|
|
64
|
|
|
(1
|
)
|
||||||
CDO/ABS
|
|
18
|
|
|
—
|
|
|
33
|
|
|
(1
|
)
|
|
51
|
|
|
(1
|
)
|
||||||
Total
|
|
$
|
460
|
|
|
$
|
(15
|
)
|
|
$
|
783
|
|
|
$
|
(24
|
)
|
|
$
|
1,243
|
|
|
$
|
(39
|
)
|
(dollars in millions)
|
|
Fair
Value
|
|
Amortized
Cost
|
||||
|
|
|
|
|
||||
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
|
|
|
|
|
|
|
||
Due in 1 year or less
|
|
$
|
207
|
|
|
$
|
208
|
|
Due after 1 year through 5 years
|
|
552
|
|
|
549
|
|
||
Due after 5 years through 10 years
|
|
421
|
|
|
417
|
|
||
Due after 10 years
|
|
187
|
|
|
188
|
|
||
Mortgage-backed, asset-backed, and collateralized securities
|
|
290
|
|
|
290
|
|
||
Total
|
|
$
|
1,657
|
|
|
$
|
1,652
|
|
|
|
|
|
|
||||
(dollars in millions)
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Fixed maturity other securities:
|
|
|
|
|
|
|
||
Bonds
|
|
|
|
|
|
|
||
Non-U.S. government and government sponsored entities
|
|
$
|
1
|
|
|
$
|
1
|
|
Corporate debt
|
|
38
|
|
|
43
|
|
||
Mortgage-backed, asset-backed, and collateralized bonds
|
|
2
|
|
|
2
|
|
||
Total bonds
|
|
41
|
|
|
46
|
|
||
Preferred stock (a)
|
|
20
|
|
|
19
|
|
||
Common stock (a)
|
|
24
|
|
|
21
|
|
||
Other long-term investments
|
|
1
|
|
|
1
|
|
||
Total
|
|
$
|
86
|
|
|
$
|
87
|
|
(a)
|
The Company employs an income equity strategy targeting investments in stocks with strong current dividend yields. Stocks included have a history of stable or increasing dividend payments.
|
|
|
Senior Debt
|
|
|
|
|
||||||||||
(dollars in millions)
|
|
Securitizations
|
|
Unsecured
Notes (a) |
|
Junior
Subordinated Debt (a) |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest rates (b)
|
|
2.16% - 6.94%
|
|
|
5.63% - 8.25%
|
|
|
4.54
|
%
|
|
|
|||||
|
|
|
|
|
|
|
|
|
||||||||
Remainder of 2019
|
|
—
|
|
|
299
|
|
|
—
|
|
|
299
|
|
||||
2020
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
||||
2021
|
|
—
|
|
|
646
|
|
|
—
|
|
|
646
|
|
||||
2022
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
||||
2023
|
|
—
|
|
|
1,175
|
|
|
—
|
|
|
1,175
|
|
||||
2024-2067
|
|
—
|
|
|
3,849
|
|
|
350
|
|
|
4,199
|
|
||||
Securitizations (c)
|
|
8,155
|
|
|
—
|
|
|
—
|
|
|
8,155
|
|
||||
Total principal maturities
|
|
$
|
8,155
|
|
|
$
|
7,969
|
|
|
$
|
350
|
|
|
$
|
16,474
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total carrying amount
|
|
$
|
8,125
|
|
|
$
|
7,820
|
|
|
$
|
172
|
|
|
$
|
16,117
|
|
Debt issuance costs (d)
|
|
$
|
(28
|
)
|
|
$
|
(69
|
)
|
|
$
|
—
|
|
|
$
|
(97
|
)
|
(a)
|
Pursuant to the SFC Base Indenture, the SFC supplemental indentures and the SFC Guaranty Agreements, OMH agreed to fully and unconditionally guarantee, on a senior unsecured basis, payments of principal, premium and interest on the SFC Unsecured Senior Notes and Junior Subordinated Debenture. The OMH guarantees of SFC’s long-term debt are subject to customary release provisions.
|
(b)
|
The interest rates shown are the range of contractual rates in effect at
March 31, 2019
. The interest rate on the remaining principal balance of the Junior Subordinated Debenture consists of a variable floating rate (determined quarterly) equal to 3-month LIBOR plus
1.75%
, or
4.54%
as of
March 31, 2019
.
|
(c)
|
Securitizations have a stated maturity date but are not included in the above maturities by period due to their variable monthly repayments, which may result in pay-off prior to the stated maturity date. At
March 31, 2019
, there were
no
amounts drawn under our revolving conduit facilities. See Note
10
for further information on our long-term debt associated with securitizations and revolving conduit facilities.
|
(d)
|
Debt issuance costs are reported as a direct deduction from long-term debt, with the exception of debt issuance costs associated with our revolving conduit facilities, which totaled
$25 million
at
March 31, 2019
and are reported in “Other assets”.
|
(dollars in millions)
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
3
|
|
|
$
|
2
|
|
Finance receivables - Personal loans
|
|
9,128
|
|
|
8,480
|
|
||
Allowance for finance receivable losses
|
|
430
|
|
|
444
|
|
||
Restricted cash and restricted cash equivalents
|
|
558
|
|
|
479
|
|
||
Other assets
|
|
26
|
|
|
26
|
|
||
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||
Long-term debt
|
|
$
|
8,125
|
|
|
$
|
7,510
|
|
Other liabilities
|
|
16
|
|
|
14
|
|
|
|
At or for the Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
117
|
|
|
$
|
154
|
|
Less reinsurance recoverables
|
|
(4
|
)
|
|
(23
|
)
|
||
Net balance at beginning of period
|
|
113
|
|
|
131
|
|
||
Additions for losses and loss adjustment expenses incurred to:
|
|
|
|
|
||||
Current year
|
|
54
|
|
|
50
|
|
||
Prior years *
|
|
(7
|
)
|
|
(4
|
)
|
||
Total
|
|
47
|
|
|
46
|
|
||
Reductions for losses and loss adjustment expenses paid related to:
|
|
|
|
|
||||
Current year
|
|
(17
|
)
|
|
(15
|
)
|
||
Prior years
|
|
(33
|
)
|
|
(35
|
)
|
||
Total
|
|
(50
|
)
|
|
(50
|
)
|
||
Net balance at end of period
|
|
110
|
|
|
127
|
|
||
Plus reinsurance recoverables
|
|
4
|
|
|
23
|
|
||
Balance at end of period
|
|
$
|
114
|
|
|
$
|
150
|
|
*
|
Reflects (i) a redundancy in the prior years’ net reserves of
$7 million
at
March 31, 2019
primarily due to a favorable development of credit life, disability, and unemployment claims during the year and (ii) a redundancy in the prior years’ net reserves of
$4 million
at
March 31, 2018
, primarily due to a favorable development of credit disability and unemployment claims during the year.
|
(dollars in millions)
|
|
Unrealized
Gains (Losses)
Available-for-Sale Securities
|
|
Retirement
Plan Liabilities
Adjustments
|
|
Foreign
Currency
Translation
Adjustments
|
|
Total
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
(28
|
)
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
$
|
(34
|
)
|
Other comprehensive income before reclassifications
|
|
30
|
|
|
(1
|
)
|
|
3
|
|
|
32
|
|
||||
Balance at end of period
|
|
$
|
2
|
|
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
3
|
|
|
$
|
6
|
|
Other comprehensive loss before reclassifications
|
|
(23
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(26
|
)
|
||||
Balance at end of period
|
|
$
|
(19
|
)
|
|
$
|
(2
|
)
|
|
$
|
1
|
|
|
$
|
(20
|
)
|
(dollars in millions)
|
|
Operating Leases
|
||
|
|
|
||
2019 (excluding the three months ended March 31, 2019)
|
|
$
|
46
|
|
2020
|
|
52
|
|
|
2021
|
|
39
|
|
|
2022
|
|
27
|
|
|
2023
|
|
13
|
|
|
2024
|
|
6
|
|
|
Thereafter
|
|
6
|
|
|
Total lease payments
|
|
189
|
|
|
Imputed interest
|
|
(14
|
)
|
|
Total
|
|
$
|
175
|
|
Weighted Average Remaining Lease Term
|
|
3.8 years
|
|
Weighted Average Discount Rate
|
|
3.74
|
%
|
(dollars in millions)
|
|
Lease Commitments
|
||
|
|
|
||
2019
|
|
$
|
60
|
|
2020
|
|
50
|
|
|
2021
|
|
37
|
|
|
2022
|
|
26
|
|
|
2023
|
|
12
|
|
|
2024+
|
|
12
|
|
|
Total
|
|
$
|
197
|
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Acquisitions
and
Servicing
|
|
Other
|
|
Segment to
GAAP
Adjustment
|
|
Consolidated
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At or for the Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest income
|
|
$
|
954
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
956
|
|
Interest expense
|
|
229
|
|
|
—
|
|
|
2
|
|
|
5
|
|
|
236
|
|
|||||
Provision for finance receivable losses
|
|
276
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
286
|
|
|||||
Net interest income after provision for finance receivable losses
|
|
449
|
|
|
—
|
|
|
1
|
|
|
(16
|
)
|
|
434
|
|
|||||
Other revenues (a)
|
|
146
|
|
|
7
|
|
|
5
|
|
|
(6
|
)
|
|
152
|
|
|||||
Other expenses
|
|
363
|
|
|
7
|
|
|
6
|
|
|
5
|
|
|
381
|
|
|||||
Income (loss) before income tax expense (benefit)
|
|
$
|
232
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(27
|
)
|
|
$
|
205
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets (b)
|
|
$
|
19,212
|
|
|
$
|
—
|
|
|
$
|
357
|
|
|
$
|
2,057
|
|
|
$
|
21,626
|
|
At or for the Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
|
$
|
871
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
(16
|
)
|
|
$
|
860
|
|
Interest expense
|
|
194
|
|
|
—
|
|
|
5
|
|
|
1
|
|
|
200
|
|
|||||
Provision for finance receivable losses
|
|
257
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
253
|
|
|||||
Net interest income (loss) after provision for finance receivable losses
|
|
420
|
|
|
—
|
|
|
2
|
|
|
(15
|
)
|
|
407
|
|
|||||
Other revenues (a)
|
|
104
|
|
|
—
|
|
|
3
|
|
|
24
|
|
|
131
|
|
|||||
Other expenses
|
|
355
|
|
|
1
|
|
|
5
|
|
|
6
|
|
|
367
|
|
|||||
Income (loss) before income tax expense (benefit)
|
|
$
|
169
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
171
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets (b)
|
|
$
|
17,947
|
|
|
$
|
—
|
|
|
$
|
635
|
|
|
$
|
2,161
|
|
|
$
|
20,743
|
|
(a)
|
Other revenues reported in “Other” primarily includes interest income on the SFC’s notes receivable from SFI. See Note
8
for further information on the notes receivable from parent.
|
(b)
|
Assets reported in “Other” primarily includes notes receivable from parent discussed above. See Note
8
for further information on the note receivable from parent.
|
|
|
Fair Value Measurements Using
|
|
Total
Fair Value |
|
Total
Carrying Value |
||||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
1,662
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
1,705
|
|
|
$
|
1,705
|
|
Investment securities
|
|
37
|
|
|
1,702
|
|
|
4
|
|
|
1,743
|
|
|
1,743
|
|
|||||
Net finance receivables, less allowance for finance receivable losses
|
|
—
|
|
|
—
|
|
|
16,872
|
|
|
16,872
|
|
|
15,403
|
|
|||||
Finance receivables held for sale
|
|
—
|
|
|
—
|
|
|
80
|
|
|
80
|
|
|
78
|
|
|||||
Notes receivable from parent
|
|
—
|
|
|
262
|
|
|
—
|
|
|
262
|
|
|
262
|
|
|||||
Restricted cash and restricted cash equivalents
|
|
575
|
|
|
—
|
|
|
—
|
|
|
575
|
|
|
575
|
|
|||||
Other assets *
|
|
—
|
|
|
12
|
|
|
13
|
|
|
25
|
|
|
25
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
16,681
|
|
|
$
|
—
|
|
|
$
|
16,681
|
|
|
$
|
16,117
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
602
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
663
|
|
|
$
|
663
|
|
Investment securities
|
|
34
|
|
|
1,655
|
|
|
5
|
|
|
1,694
|
|
|
1,694
|
|
|||||
Net finance receivables, less allowance for finance receivable losses
|
|
—
|
|
|
—
|
|
|
16,692
|
|
|
16,692
|
|
|
15,396
|
|
|||||
Finance receivables held for sale
|
|
—
|
|
|
—
|
|
|
103
|
|
|
103
|
|
|
103
|
|
|||||
Notes receivable from parent
|
|
—
|
|
|
260
|
|
|
—
|
|
|
260
|
|
|
260
|
|
|||||
Restricted cash and restricted cash equivalents
|
|
499
|
|
|
—
|
|
|
—
|
|
|
499
|
|
|
499
|
|
|||||
Other assets *
|
|
—
|
|
|
19
|
|
|
15
|
|
|
34
|
|
|
34
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
15,041
|
|
|
$
|
—
|
|
|
$
|
15,041
|
|
|
$
|
15,178
|
|
*
|
Other assets at
March 31, 2019
and
December 31, 2018
include receivables from parent and affiliates and miscellaneous receivables related to our liquidating loan portfolios. Total carrying value of receivables from parent and affiliates totaled
$12 million
at
March 31, 2019
and
$18 million
at
December 31, 2018
.
|
|
|
Fair Value Measurements Using
|
|
Total Carried At Fair Value
|
||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents in mutual funds
|
|
$
|
1,033
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,033
|
|
Cash equivalents in securities
|
|
—
|
|
|
43
|
|
|
—
|
|
|
43
|
|
||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
87
|
|
|
—
|
|
|
87
|
|
||||
Certificates of deposit and commercial paper
|
|
—
|
|
|
59
|
|
|
—
|
|
|
59
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
145
|
|
|
—
|
|
|
145
|
|
||||
Corporate debt
|
|
—
|
|
|
1,057
|
|
|
2
|
|
|
1,059
|
|
||||
RMBS
|
|
—
|
|
|
141
|
|
|
—
|
|
|
141
|
|
||||
CMBS
|
|
—
|
|
|
66
|
|
|
—
|
|
|
66
|
|
||||
CDO/ABS
|
|
—
|
|
|
83
|
|
|
—
|
|
|
83
|
|
||||
Total available-for-sale securities
|
|
—
|
|
|
1,655
|
|
|
2
|
|
|
1,657
|
|
||||
Other securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Corporate debt
|
|
—
|
|
|
37
|
|
|
1
|
|
|
38
|
|
||||
RMBS
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
CDO/ABS
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total bonds
|
|
—
|
|
|
40
|
|
|
1
|
|
|
41
|
|
||||
Preferred stock
|
|
13
|
|
|
7
|
|
|
—
|
|
|
20
|
|
||||
Common stock
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
||||
Other long-term investments
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total other securities
|
|
37
|
|
|
47
|
|
|
2
|
|
|
86
|
|
||||
Total investment securities
|
|
37
|
|
|
1,702
|
|
|
4
|
|
|
1,743
|
|
||||
Restricted cash in mutual funds
|
|
560
|
|
|
—
|
|
|
—
|
|
|
560
|
|
||||
Total
|
|
$
|
1,630
|
|
|
$
|
1,745
|
|
|
$
|
4
|
|
|
$
|
3,379
|
|
|
|
Fair Value Measurements Using
|
|
Total Carried At Fair Value
|
||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents in mutual funds
|
|
$
|
415
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
415
|
|
Cash equivalents in securities
|
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
||||
Certificates of deposit and commercial paper
|
|
—
|
|
|
63
|
|
|
—
|
|
|
63
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
143
|
|
|
—
|
|
|
143
|
|
||||
Corporate debt
|
|
—
|
|
|
995
|
|
|
2
|
|
|
997
|
|
||||
RMBS
|
|
—
|
|
|
128
|
|
|
—
|
|
|
128
|
|
||||
CMBS
|
|
—
|
|
|
71
|
|
|
—
|
|
|
71
|
|
||||
CDO/ABS
|
|
—
|
|
|
93
|
|
|
1
|
|
|
94
|
|
||||
Total available-for-sale securities
|
|
—
|
|
|
1,604
|
|
|
3
|
|
|
1,607
|
|
||||
Other securities
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Corporate debt
|
|
—
|
|
|
42
|
|
|
1
|
|
|
43
|
|
||||
RMBS
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
CDO/ABS
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total bonds
|
|
—
|
|
|
45
|
|
|
1
|
|
|
46
|
|
||||
Preferred stock
|
|
13
|
|
|
6
|
|
|
—
|
|
|
19
|
|
||||
Common stock
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||
Other long-term investments
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total other securities
|
|
34
|
|
|
51
|
|
|
2
|
|
|
87
|
|
||||
Total investment securities
|
|
34
|
|
|
1,655
|
|
|
5
|
|
|
1,694
|
|
||||
Restricted cash in mutual funds
|
|
482
|
|
|
—
|
|
|
—
|
|
|
482
|
|
||||
Total
|
|
$
|
931
|
|
|
$
|
1,716
|
|
|
$
|
5
|
|
|
$
|
2,652
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
Topic
|
|
Page
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
Forward-Looking Statements
|
•
|
adverse changes in general economic conditions, including the interest rate environment and the financial markets;
|
•
|
risks related to the acquisition or sale of assets or businesses or the formation, termination or operation of joint ventures or other strategic alliances, including increased loan delinquencies or net charge-offs, integration or migration issues, increased costs of servicing, incomplete records, and retention of customers;
|
•
|
our estimates of the allowance for finance receivable losses may not be adequate to absorb actual losses, causing our provision for finance receivable losses to increase, which would adversely affect our results of operations;
|
•
|
increased levels of unemployment and personal bankruptcies;
|
•
|
our strategy of increasing the proportion of secured loans may lead to declines in or slower growth in our personal loan receivables and portfolio yield;
|
•
|
adverse changes in the rate at which we can collect or potentially sell our finance receivables portfolio;
|
•
|
our decentralized branch loan approval process could expose us to greater than historical delinquencies and charge-offs;
|
•
|
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, disruptions in the operation of our information systems, or other events disrupting business or commerce;
|
•
|
a failure in or breach of our operational or security systems or infrastructure or those of third parties, including as a result of cyber-attacks
; or other cyber-related incidents involving the loss, theft or unauthorized disclosure of personally identifiable information, or “PII,” of our present or former customers;
|
•
|
our credit risk scoring models may be inadequate to properly assess the risk of customer unwillingness or lack of capacity to repay;
|
•
|
adverse changes in our ability to attract and retain employees or key executives to support our businesses;
|
•
|
increased competition, lack of customer responsiveness to our distribution channels, an inability to make technological improvements, and the ability of our competitors to offer a more attractive range of personal loan products than we offer;
|
•
|
changes in federal, state or local laws, regulations, or regulatory policies and practices that adversely affect our ability to conduct business or the manner in which we are permitted to 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, our use of third party vendors and real estate loan servicing, or changes in corporate or individual income tax laws or regulations, including effects of the Tax Act;
|
•
|
risks associated with our insurance operations, including insurance claims that exceed our expectations or insurance losses that exceed our reserves;
|
•
|
we may be unable to successfully implement our growth strategy for our consumer lending business or successfully acquire portfolios of personal loans;
|
•
|
declines in collateral values or increases in actual or projected delinquencies or net charge-offs;
|
•
|
potential liability relating to finance receivables which we have sold or securitized or may sell or securitize in the future if it is determined that there was a non-curable breach of a representation or warranty made in connection with such transactions;
|
•
|
the costs and effects of any actual or alleged violations of any federal, state or local laws, rules or regulations, including any litigation associated therewith;
|
•
|
the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority and any litigation associated therewith;
|
•
|
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;
|
•
|
any material impairment or write-down of the value of our assets;
|
•
|
the effects of any downgrade of our debt ratings by credit rating agencies, which could have a negative impact on our cost of and/or access to capital;
|
•
|
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;
|
•
|
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 standards, policies and practices;
|
•
|
management estimates and assumptions, including estimates and assumptions about future events, may prove to be incorrect;
|
•
|
any failure to achieve the SpringCastle Portfolio performance requirements, which could, among other things, cause us to lose our loan servicing rights over the SpringCastle Portfolio; and
|
•
|
various risks relating to continued compliance with the Settlement Agreement with the U.S. Department of Justice.
|
Overview
|
•
|
Personal Loans —
We offer personal loans through our branch network, centralized operations, and our website,
www.omf.com,
to customers who generally need timely access to cash. Our personal loans are non-revolving, with a fixed-rate, a fixed term of
three
to
six years
, and are secured by automobiles, other titled collateral or are unsecured. At
March 31, 2019
, we had approximately
2.3 million
personal loans, representing
$16.1 billion
of net finance receivables, compared to approximately
2.4 million
personal loans totaling
$16.1 billion
at
December 31, 2018
.
|
•
|
Insurance Products —
We offer our customers optional credit insurance products (life insurance, disability insurance, and involuntary unemployment insurance) and optional non-credit insurance products through both our branch network and our centralized operations. Credit insurance and non-credit insurance products are provided by our affiliated insurance companies. We also offer optional home and auto membership plans of an unaffiliated company.
|
•
|
Other Receivables —
We ceased originating real estate loans in 2012 and purchasing retail sales finance contracts and revolving retail accounts in 2013. We continue to service or sub-service liquidating real estate loans and retail sales finance contracts. Effective September 30, 2018, our real estate loans were transferred from held for investment to held for sale. See Notes 5, 6 and 7 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our
2018
Annual Report on Form 10-K for more information about Other Receivables.
|
•
|
Consumer and Insurance; and
|
•
|
Acquisitions and Servicing.
|
Recent Developments and Outlook
|
Results of Operations
|
|
|
At or for the
Three Months Ended March 31, |
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
||||
Interest income
|
|
$
|
956
|
|
|
$
|
860
|
|
|
Interest expense
|
|
236
|
|
|
200
|
|
|
||
Provision for finance receivable losses
|
|
286
|
|
|
253
|
|
|
||
Net interest income after provision for finance receivable losses
|
|
434
|
|
|
407
|
|
|
||
Other revenues
|
|
152
|
|
|
131
|
|
|
||
Other expenses
|
|
381
|
|
|
367
|
|
|
||
Income before income taxes
|
|
205
|
|
|
171
|
|
|
||
Income taxes
|
|
49
|
|
|
41
|
|
|
||
Net income
|
|
$
|
156
|
|
|
$
|
130
|
|
|
|
|
|
|
|
|
||||
Selected Financial Statistics *
|
|
|
|
|
|
|
|
||
Finance receivables held for investment:
|
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
16,136
|
|
|
$
|
14,943
|
|
|
Number of accounts
|
|
2,326,835
|
|
|
2,340,042
|
|
|
||
Finance receivables held for sale:
|
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
78
|
|
|
$
|
126
|
|
|
Number of accounts
|
|
2,357
|
|
|
2,345
|
|
|
||
Finance receivables held for investment and held for sale:
|
|
|
|
|
|
||||
Average net receivables
|
|
$
|
16,146
|
|
|
$
|
14,941
|
|
|
Average daily debt balance
|
|
$
|
15,839
|
|
|
$
|
14,947
|
|
|
Yield
|
|
23.92
|
%
|
|
23.25
|
%
|
|
||
Gross charge-off ratio
|
|
7.82
|
%
|
|
7.82
|
%
|
|
||
Recovery ratio
|
|
(0.70
|
)%
|
|
(0.75
|
)%
|
|
||
Net charge-off ratio
|
|
7.12
|
%
|
|
7.07
|
%
|
|
||
30-89 Delinquency ratio
|
|
1.93
|
%
|
|
2.10
|
%
|
|
||
Origination volume
|
|
$
|
2,582
|
|
|
$
|
2,534
|
|
|
Number of accounts originated
|
|
276,329
|
|
|
323,753
|
|
|
*
|
See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.
|
|
|
Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Consumer and Insurance
|
|
|
|
|
||||
Income before income taxes - Segment Accounting Basis
|
|
$
|
232
|
|
|
$
|
169
|
|
Adjustments:
|
|
|
|
|
||||
Net loss on repurchases and repayments of debt
|
|
16
|
|
|
27
|
|
||
Net gain on sale of cost method investment
|
|
(11
|
)
|
|
—
|
|
||
Acquisition-related transaction and integration expenses
|
|
6
|
|
|
10
|
|
||
Restructuring charges
|
|
3
|
|
|
—
|
|
||
Adjusted pretax income (non-GAAP)
|
|
$
|
246
|
|
|
$
|
206
|
|
|
|
|
|
|
||||
Acquisitions and Servicing
|
|
|
|
|
||||
Loss before income tax benefit - Segment Accounting Basis
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Adjustments
|
|
—
|
|
|
—
|
|
||
Adjusted pretax loss (non-GAAP)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
||||
Other
|
|
|
|
|
||||
Income before income taxes - Segment Accounting Basis
|
|
$
|
—
|
|
|
$
|
—
|
|
Net loss on sale of real estate loans *
|
|
1
|
|
|
—
|
|
||
Adjusted pretax income (non-GAAP)
|
|
$
|
1
|
|
|
$
|
—
|
|
Segment Results
|
|
|
At or for the
Three Months Ended March 31, |
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Interest income
|
|
$
|
954
|
|
|
$
|
871
|
|
Interest expense
|
|
229
|
|
|
194
|
|
||
Provision for finance receivable losses
|
|
276
|
|
|
257
|
|
||
Net interest income after provision for finance receivable losses
|
|
449
|
|
|
420
|
|
||
Other revenues
|
|
151
|
|
|
131
|
|
||
Other expenses
|
|
354
|
|
|
345
|
|
||
Adjusted pretax income (non-GAAP)
|
|
$
|
246
|
|
|
$
|
206
|
|
|
|
|
|
|
||||
Selected Financial Statistics *
|
|
|
|
|
|
|
||
Finance receivables held for investment:
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
16,170
|
|
|
$
|
14,826
|
|
Number of accounts
|
|
2,326,835
|
|
|
2,335,602
|
|
||
Finance receivables held for investment and held for sale:
|
|
|
|
|
||||
Average net receivables
|
|
$
|
16,179
|
|
|
$
|
14,816
|
|
Yield
|
|
23.92
|
%
|
|
23.83
|
%
|
||
Gross charge-off ratio
|
|
7.92
|
%
|
|
8.07
|
%
|
||
Recovery ratio
|
|
(0.81
|
)%
|
|
(0.88
|
)%
|
||
Net charge-off ratio
|
|
7.11
|
%
|
|
7.19
|
%
|
||
30-89 Delinquency ratio
|
|
1.94
|
%
|
|
2.07
|
%
|
||
Origination volume
|
|
$
|
2,582
|
|
|
$
|
2,534
|
|
Number of accounts originated
|
|
276,329
|
|
|
323,753
|
|
*
|
See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.
|
|
|
Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Other revenues
|
|
$
|
7
|
|
|
$
|
—
|
|
Other expenses
|
|
7
|
|
|
1
|
|
||
Adjusted pretax income (loss) (non-GAAP)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
|
Three Months Ended March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Interest income
|
|
$
|
3
|
|
|
$
|
5
|
|
Interest expense
|
|
2
|
|
|
5
|
|
||
Provision for finance receivable losses
|
|
—
|
|
|
(2
|
)
|
||
Net interest income after provision for finance receivable losses
|
|
1
|
|
|
2
|
|
||
Other revenues
|
|
6
|
|
|
3
|
|
||
Other expenses *
|
|
6
|
|
|
5
|
|
||
Adjusted pretax income (non-GAAP)
|
|
$
|
1
|
|
|
$
|
—
|
|
|
|
March 31,
|
||||||
(dollars in millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Net finance receivables
|
|
|
|
|
||||
Other receivables *
|
|
$
|
—
|
|
|
$
|
136
|
|
|
|
|
|
|
||||
Net finance receivables held for sale:
|
|
|
|
|
||||
Other receivables *
|
|
$
|
79
|
|
|
$
|
133
|
|
*
|
On September 30, 2018, we transferred our real estate loans previously classified as Other Receivables from held for investment to held for sale. See Notes 5 and 7 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our
2018
Annual Report on Form 10-K for further information.
|
Credit Quality
|
•
|
Prime: FICO score of 660 or higher
|
•
|
Near prime: FICO score of 620-659
|
•
|
Sub-prime: FICO score of 619 or below
|
(dollars in millions)
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
|
||||
FICO scores
|
|
|
|
|
||||
660 or higher
|
|
$
|
3,785
|
|
|
$
|
3,896
|
|
620-659
|
|
4,220
|
|
|
4,239
|
|
||
619 or below
|
|
8,131
|
|
|
7,987
|
|
||
Total
|
|
$
|
16,136
|
|
|
$
|
16,122
|
|
(dollars in millions)
|
|
Consumer
and Insurance |
|
Segment to
GAAP
Adjustment
|
|
GAAP
Basis
|
||||||
|
|
|
|
|
|
|
||||||
March 31, 2019
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
15,520
|
|
|
$
|
(31
|
)
|
|
$
|
15,489
|
|
30-59 days past due
|
|
180
|
|
|
(1
|
)
|
|
179
|
|
|||
Delinquent (60-89 days past due)
|
|
133
|
|
|
—
|
|
|
133
|
|
|||
Performing
|
|
15,833
|
|
|
(32
|
)
|
|
15,801
|
|
|||
|
|
|
|
|
|
|
||||||
Nonperforming (90+ days past due)
|
|
337
|
|
|
(2
|
)
|
|
335
|
|
|||
Total net finance receivables
|
|
$
|
16,170
|
|
|
$
|
(34
|
)
|
|
$
|
16,136
|
|
|
|
|
|
|
|
|
||||||
Delinquency ratio
|
|
|
|
|
|
|
||||||
30-89 days past due
|
|
1.94
|
%
|
|
*
|
|
|
1.93
|
%
|
|||
30+ days past due
|
|
4.02
|
%
|
|
*
|
|
|
4.01
|
%
|
|||
60+ days past due
|
|
2.91
|
%
|
|
*
|
|
|
2.90
|
%
|
|||
90+ days past due
|
|
2.08
|
%
|
|
*
|
|
|
2.08
|
%
|
|||
|
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
15,399
|
|
|
$
|
(26
|
)
|
|
$
|
15,373
|
|
30-59 days past due
|
|
230
|
|
|
(2
|
)
|
|
228
|
|
|||
Delinquent (60-89 days past due)
|
|
161
|
|
|
(1
|
)
|
|
160
|
|
|||
Performing
|
|
15,790
|
|
|
(29
|
)
|
|
15,761
|
|
|||
|
|
|
|
|
|
|
||||||
Nonperforming (90+ days past due)
|
|
363
|
|
|
(2
|
)
|
|
361
|
|
|||
Total net finance receivables
|
|
$
|
16,153
|
|
|
$
|
(31
|
)
|
|
$
|
16,122
|
|
|
|
|
|
|
|
|
||||||
Delinquency ratio
|
|
|
|
|
|
|
||||||
30-89 days past due
|
|
2.42
|
%
|
|
*
|
|
|
2.41
|
%
|
|||
30+ days past due
|
|
4.67
|
%
|
|
*
|
|
|
4.65
|
%
|
|||
60+ days past due
|
|
3.25
|
%
|
|
*
|
|
|
3.24
|
%
|
|||
90+ days past due
|
|
2.25
|
%
|
|
*
|
|
|
2.24
|
%
|
*
|
Not applicable.
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Other (a)
|
|
Segment to
GAAP
Adjustment
|
|
Consolidated
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
768
|
|
|
$
|
—
|
|
|
$
|
(42
|
)
|
|
$
|
726
|
|
Provision for finance receivable losses
|
|
276
|
|
|
—
|
|
|
10
|
|
|
286
|
|
||||
Charge-offs
|
|
(316
|
)
|
|
—
|
|
|
5
|
|
|
(311
|
)
|
||||
Recoveries
|
|
32
|
|
|
—
|
|
|
(5
|
)
|
|
27
|
|
||||
Other (b)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Balance at end of period
|
|
$
|
765
|
|
|
$
|
—
|
|
|
$
|
(32
|
)
|
|
$
|
733
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance ratio
|
|
4.73
|
%
|
|
(c)
|
|
|
(c)
|
|
|
4.54
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
|
$
|
719
|
|
|
$
|
35
|
|
|
$
|
(62
|
)
|
|
$
|
692
|
|
Provision for finance receivable losses
|
|
257
|
|
|
(2
|
)
|
|
(2
|
)
|
|
253
|
|
||||
Charge-offs
|
|
(295
|
)
|
|
(2
|
)
|
|
9
|
|
|
(288
|
)
|
||||
Recoveries
|
|
33
|
|
|
1
|
|
|
(6
|
)
|
|
28
|
|
||||
Balance at end of period
|
|
$
|
714
|
|
|
$
|
32
|
|
|
$
|
(61
|
)
|
|
$
|
685
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance ratio
|
|
4.82
|
%
|
|
23.19
|
%
|
|
(c)
|
|
|
4.58
|
%
|
(a)
|
Due to the transfer of our real estate loans from held for investment to held for sale on September 30, 2018, there are no longer finance receivable losses associated in Other. See Note 5 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our
2018
Annual Report on Form 10-K for further information.
|
(c)
|
Not applicable.
|
(dollars in millions)
|
|
Consumer
and Insurance |
|
Segment to
GAAP Adjustment |
|
GAAP
Basis
|
||||||
|
|
|
|
|
|
|
||||||
March 31, 2019
|
|
|
|
|
|
|
||||||
TDR net finance receivables
|
|
$
|
591
|
|
|
$
|
(89
|
)
|
|
$
|
502
|
|
Allowance for TDR finance receivable losses
|
|
226
|
|
|
(30
|
)
|
|
196
|
|
|||
|
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
|
||||||
TDR net finance receivables
|
|
$
|
554
|
|
|
$
|
(102
|
)
|
|
$
|
452
|
|
Allowance for TDR finance receivable losses
|
|
209
|
|
|
(40
|
)
|
|
169
|
|
(dollars in millions)
|
|
Issue Amount (a)
|
|
Initial Collateral Balance
|
|
Current
Note Amounts Outstanding (a) |
|
Current Collateral Balance (b)
|
|
Current
Weighted Average
Interest Rate
|
|
Original
Revolving
Period
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
SLFT 2015-A
|
|
$
|
1,163
|
|
|
$
|
1,250
|
|
|
$
|
348
|
|
|
$
|
400
|
|
|
4.19
|
%
|
|
3 years
|
SLFT 2015-B
|
|
314
|
|
|
336
|
|
|
314
|
|
|
336
|
|
|
3.78
|
%
|
|
5 years
|
||||
SLFT 2016-A
|
|
532
|
|
|
559
|
|
|
396
|
|
|
425
|
|
|
3.15
|
%
|
|
2 years
|
||||
SLFT 2017-A
|
|
652
|
|
|
685
|
|
|
619
|
|
|
685
|
|
|
2.98
|
%
|
|
3 years
|
||||
OMFIT 2015-1
|
|
1,229
|
|
|
1,397
|
|
|
387
|
|
|
510
|
|
|
4.94
|
%
|
|
3 years
|
||||
OMFIT 2015-2
|
|
1,250
|
|
|
1,346
|
|
|
207
|
|
|
280
|
|
|
5.09
|
%
|
|
2 years
|
||||
OMFIT 2015-3
|
|
293
|
|
|
329
|
|
|
293
|
|
|
325
|
|
|
4.21
|
%
|
|
5 years
|
||||
OMFIT 2016-1
|
|
500
|
|
|
570
|
|
|
390
|
|
|
455
|
|
|
4.07
|
%
|
|
3 years
|
||||
OMFIT 2016-2
|
|
890
|
|
|
1,007
|
|
|
256
|
|
|
408
|
|
|
5.39
|
%
|
|
2 years
|
||||
OMFIT 2016-3
|
|
350
|
|
|
397
|
|
|
317
|
|
|
391
|
|
|
4.33
|
%
|
|
5 years
|
||||
OMFIT 2017-1
|
|
947
|
|
|
988
|
|
|
900
|
|
|
988
|
|
|
2.79
|
%
|
|
2 years
|
||||
OMFIT 2018-1
|
|
632
|
|
|
650
|
|
|
600
|
|
|
651
|
|
|
3.60
|
%
|
|
3 years
|
||||
OMFIT 2018-2
|
|
368
|
|
|
381
|
|
|
350
|
|
|
381
|
|
|
3.87
|
%
|
|
5 years
|
||||
OMFIT 2019-1
|
|
632
|
|
|
654
|
|
|
600
|
|
|
654
|
|
|
3.79
|
%
|
|
2 years
|
||||
ODART 2017-1
|
|
300
|
|
|
300
|
|
|
94
|
|
|
118
|
|
|
3.43
|
%
|
|
1 year
|
||||
ODART 2017-2
|
|
605
|
|
|
624
|
|
|
484
|
|
|
512
|
|
|
2.69
|
%
|
|
1 year
|
||||
ODART 2018-1
|
|
947
|
|
|
964
|
|
|
900
|
|
|
964
|
|
|
3.56
|
%
|
|
2 years
|
||||
ODART 2019-1
|
|
737
|
|
|
750
|
|
|
700
|
|
|
750
|
|
|
3.79
|
%
|
|
5 years
|
||||
Total securitizations
|
|
$
|
12,341
|
|
|
$
|
13,187
|
|
|
$
|
8,155
|
|
|
$
|
9,233
|
|
|
|
|
|
(a)
|
Issue Amount includes the retained interest amounts as applicable and the Current Note Amounts Outstanding balances reflect pay-downs subsequent to note issuance and exclude retained interest amounts.
|
(b)
|
Inclusive of in-process replenishments of collateral for securitized borrowings, in a revolving status.
|
(dollar in millions)
|
|
Advance Maximum
Balance |
|
Amount
Drawn |
|
Revolving
Period End |
|
Due and Payable
|
||||
|
|
|
|
|
|
|
|
|
||||
Rocky River Funding, LLC
|
|
$
|
400
|
|
|
$
|
—
|
|
|
June 2020
|
|
July 2021
|
Thur River Funding, LLC
|
|
350
|
|
|
—
|
|
|
June 2020
|
|
February 2027
|
||
OneMain Financial Funding IX, LLC
|
|
600
|
|
|
—
|
|
|
June 2020
|
|
July 2021
|
||
Mystic River Funding, LLC
|
|
850
|
|
|
—
|
|
|
September 2020
|
|
October 2023
|
||
Fourth Avenue Auto Funding, LLC
|
|
250
|
|
|
—
|
|
|
September 2020
|
|
October 2021
|
||
OneMain Financial Funding VIII, LLC
|
|
650
|
|
|
—
|
|
|
August 2021
|
|
September 2023
|
||
OneMain Financial Auto Funding I, LLC
|
|
850
|
|
|
—
|
|
|
June 2021
|
|
July 2028
|
||
OneMain Financial Funding VII, LLC
|
|
850
|
|
|
—
|
|
|
June 2021
|
|
July 2023
|
||
Thayer Brook Funding, LLC
|
|
250
|
|
|
—
|
|
|
July 2021
|
|
August 2022
|
||
Hubbard River Funding, LLC
|
|
250
|
|
|
—
|
|
|
September 2021
|
|
October 2023
|
||
Seine River Funding, LLC
|
|
650
|
|
|
—
|
|
|
October 2021
|
|
November 2024
|
||
New River Funding LLC
|
|
250
|
|
|
—
|
|
|
March 2022
|
|
April 2027
|
||
Total
|
|
$
|
6,200
|
|
|
$
|
—
|
|
|
|
|
|
•
|
allowance for finance receivable losses;
|
•
|
TDR finance receivables;
|
•
|
fair value measurements; and
|
•
|
goodwill and other intangible assets.
|
Item 1. Legal Proceedings.
|
Item 1A. Risk Factors.
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3. Defaults Upon Senior Securities.
|
Item 4. Mine Safety Disclosures.
|
Item 5. Other Information.
|
Item 6. Exhibits.
|
Exhibit Number
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T:
(i) Condensed Consolidated Balance Sheets,
(ii) Condensed Consolidated Statements of Operations,
(iii) Condensed Consolidated Statements of Comprehensive Income,
(iv) Condensed Consolidated Statements of Shareholder’s Equity,
(v) Condensed Consolidated Statements of Cash Flows, and
(vi) Notes to the Condensed Consolidated Financial Statements.
|
Signature
|
|
|
|
SPRINGLEAF FINANCE CORPORATION
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
May 3, 2019
|
|
By:
|
/s/ Micah R. Conrad
|
|
|
|
|
Micah R. Conrad
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Springleaf Finance Corporation (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):
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a)
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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
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b)
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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.
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Date:
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May 3, 2019
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/s/ Richard N. Tambor
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Richard N. Tambor
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President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Springleaf Finance Corporation (the “registrant”);
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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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
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b)
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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.
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Date:
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May 3, 2019
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/s/ Micah R. Conrad
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Micah R. Conrad
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Executive Vice President and Chief Financial Officer
(Duly Authorized Office and Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Richard N. Tambor
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Richard N. Tambor
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President and Chief Executive Officer
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/s/ Micah R. Conrad
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Micah R. Conrad
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Executive Vice President and Chief Financial Officer
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Date:
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May 3, 2019
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