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Delaware
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27-3379612
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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
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
|
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(Do not check if a smaller reporting company)
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(dollars in millions except par value amount)
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March 31,
2016 |
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December 31,
2015 |
||||
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|
||||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
716
|
|
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$
|
939
|
|
Investment securities
|
|
1,872
|
|
|
1,867
|
|
||
Net finance receivables:
|
|
|
|
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|
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Personal loans (includes loans of consolidated VIEs of $11.6 billion in 2016 and $11.4 billion in 2015)
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13,209
|
|
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13,267
|
|
||
SpringCastle Portfolio (includes loans of consolidated VIEs of $1.6 billion in 2015)
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—
|
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1,576
|
|
||
Real estate loans
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503
|
|
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524
|
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Retail sales finance
|
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19
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|
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23
|
|
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Net finance receivables
|
|
13,731
|
|
|
15,390
|
|
||
Unearned insurance premium and claim reserves
|
|
(643
|
)
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|
(662
|
)
|
||
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $408 million in 2016 and $431 million in 2015)
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(600
|
)
|
|
(587
|
)
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||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses
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|
12,488
|
|
|
14,141
|
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||
Finance receivables held for sale (includes finance receivables held for sale of consolidated VIEs of $435 million in 2015)
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|
776
|
|
|
796
|
|
||
Restricted cash and cash equivalents (includes restricted cash and cash equivalents of consolidated VIEs of $576 million in 2016 and $663 million in 2015)
|
|
588
|
|
|
676
|
|
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Goodwill
|
|
1,422
|
|
|
1,440
|
|
||
Other intangible assets
|
|
539
|
|
|
559
|
|
||
Other assets
|
|
654
|
|
|
638
|
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||
|
|
|
|
|
||||
Total assets
|
|
$
|
19,055
|
|
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$
|
21,056
|
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
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|
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Long-term debt (includes debt of consolidated VIEs of $9.2 billion in 2016 and $11.7 billion in 2015)
|
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$
|
14,870
|
|
|
$
|
17,300
|
|
Insurance claims and policyholder liabilities
|
|
747
|
|
|
747
|
|
||
Deferred and accrued taxes
|
|
53
|
|
|
20
|
|
||
Other liabilities
|
|
457
|
|
|
384
|
|
||
Total liabilities
|
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16,127
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|
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18,451
|
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Commitments and contingent liabilities (Note 14)
|
|
|
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|
|||
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Shareholders’ equity:
|
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|
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Common stock, par value $.01 per share; 2,000,000,000 shares authorized, 134,751,118 and 134,494,172 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively
|
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
|
1,537
|
|
|
1,533
|
|
||
Accumulated other comprehensive loss
|
|
(13
|
)
|
|
(33
|
)
|
||
Retained earnings
|
|
1,403
|
|
|
1,250
|
|
||
OneMain Holdings, Inc. shareholders’ equity
|
|
2,928
|
|
|
2,751
|
|
||
Non-controlling interests
|
|
—
|
|
|
(146
|
)
|
||
Total shareholders’ equity
|
|
2,928
|
|
|
2,605
|
|
||
|
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
|
$
|
19,055
|
|
|
$
|
21,056
|
|
(dollars in millions except earnings per share)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Interest income:
|
|
|
|
|
||||
Finance charges
|
|
$
|
779
|
|
|
$
|
402
|
|
Finance receivables held for sale originated as held for investment
|
|
47
|
|
|
4
|
|
||
Total interest income
|
|
826
|
|
|
406
|
|
||
|
|
|
|
|
||||
Interest expense
|
|
226
|
|
|
158
|
|
||
|
|
|
|
|
||||
Net interest income
|
|
600
|
|
|
248
|
|
||
|
|
|
|
|
||||
Provision for finance receivable losses
|
|
227
|
|
|
87
|
|
||
|
|
|
|
|
||||
Net interest income after provision for finance receivable losses
|
|
373
|
|
|
161
|
|
||
|
|
|
|
|
||||
Other revenues:
|
|
|
|
|
|
|
||
Insurance
|
|
114
|
|
|
36
|
|
||
Investment
|
|
20
|
|
|
17
|
|
||
Net gain on sale of SpringCastle interests
|
|
229
|
|
|
—
|
|
||
Other
|
|
(2
|
)
|
|
(2
|
)
|
||
Total other revenues
|
|
361
|
|
|
51
|
|
||
|
|
|
|
|
||||
Other expenses:
|
|
|
|
|
|
|
||
Operating expenses:
|
|
|
|
|
|
|
||
Salaries and benefits
|
|
214
|
|
|
93
|
|
||
Acquisition-related transaction and integration expenses
|
|
33
|
|
|
3
|
|
||
Other operating expenses
|
|
167
|
|
|
62
|
|
||
Insurance policy benefits and claims
|
|
45
|
|
|
16
|
|
||
Total other expenses
|
|
459
|
|
|
174
|
|
||
|
|
|
|
|
||||
Income before provision for income taxes
|
|
275
|
|
|
38
|
|
||
|
|
|
|
|
||||
Provision for income taxes
|
|
96
|
|
|
7
|
|
||
|
|
|
|
|
||||
Net income
|
|
179
|
|
|
31
|
|
||
|
|
|
|
|
||||
Net income attributable to non-controlling interests
|
|
26
|
|
|
31
|
|
||
|
|
|
|
|
||||
Net income attributable to OneMain Holdings, Inc.
|
|
$
|
153
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Share Data:
|
|
|
|
|
|
|
||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
||
Basic
|
|
134,694,759
|
|
|
115,027,470
|
|
||
Diluted
|
|
134,907,748
|
|
|
115,027,470
|
|
||
Earnings per share:
|
|
|
|
|
|
|
||
Basic
|
|
$
|
1.14
|
|
|
$
|
—
|
|
Diluted
|
|
$
|
1.13
|
|
|
$
|
—
|
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Net income
|
|
$
|
179
|
|
|
$
|
31
|
|
|
|
|
|
|
||||
Other comprehensive income:
|
|
|
|
|
|
|
||
Net unrealized gains on non-credit impaired available-for-sale securities
|
|
27
|
|
|
5
|
|
||
Foreign currency translation adjustments
|
|
6
|
|
|
1
|
|
||
Income tax effect:
|
|
|
|
|
|
|
||
Net unrealized gains on non-credit impaired available-for-sale securities
|
|
(10
|
)
|
|
(2
|
)
|
||
Foreign currency translation adjustments
|
|
(2
|
)
|
|
—
|
|
||
Other comprehensive income, net of tax, before reclassification adjustments
|
|
21
|
|
|
4
|
|
||
Reclassification adjustments included in net income:
|
|
|
|
|
|
|
||
Net realized gains on available-for-sale securities
|
|
(2
|
)
|
|
(6
|
)
|
||
Income tax effect:
|
|
|
|
|
|
|
||
Net realized gains on available-for-sale securities
|
|
1
|
|
|
2
|
|
||
Reclassification adjustments included in net income, net of tax
|
|
(1
|
)
|
|
(4
|
)
|
||
Other comprehensive income, net of tax
|
|
20
|
|
|
—
|
|
||
|
|
|
|
|
||||
Comprehensive income
|
|
199
|
|
|
31
|
|
||
|
|
|
|
|
||||
Comprehensive income attributable to non-controlling interests
|
|
26
|
|
|
31
|
|
||
|
|
|
|
|
||||
Comprehensive income attributable to OneMain Holdings, Inc.
|
|
$
|
173
|
|
|
$
|
—
|
|
|
|
OneMain Holdings, Inc. Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||||||
(dollars in millions)
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained
Earnings
|
|
OneMain
Holdings, Inc.
Shareholders’
Equity
|
|
Non-controlling Interests
|
|
Total
Shareholders’
Equity
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, January 1, 2016
|
|
$
|
1
|
|
|
$
|
1,533
|
|
|
$
|
(33
|
)
|
|
$
|
1,250
|
|
|
$
|
2,751
|
|
|
$
|
(146
|
)
|
|
$
|
2,605
|
|
Share-based compensation expense, net of forfeitures
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||||
Excess tax benefit from share-based compensation
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||||
Withholding tax on vested RSUs
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||||
Change in non-controlling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distributions declared to joint venture partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
|||||||
Sale of equity interests in SpringCastle joint venture
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138
|
|
|
138
|
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
153
|
|
|
153
|
|
|
26
|
|
|
179
|
|
|||||||
Balance, March 31, 2016
|
|
$
|
1
|
|
|
$
|
1,537
|
|
|
$
|
(13
|
)
|
|
$
|
1,403
|
|
|
$
|
2,928
|
|
|
$
|
—
|
|
|
$
|
2,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
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 share-based compensation
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||||
Withholding tax on vested RSUs
|
|
—
|
|
|
(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
|
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
179
|
|
|
$
|
31
|
|
Reconciling adjustments:
|
|
|
|
|
|
|
||
Provision for finance receivable losses
|
|
227
|
|
|
87
|
|
||
Depreciation and amortization
|
|
156
|
|
|
18
|
|
||
Deferred income tax benefit
|
|
(3
|
)
|
|
(10
|
)
|
||
Share-based compensation expense, net of forfeitures
|
|
7
|
|
|
3
|
|
||
Net gain on sale of SpringCastle interests
|
|
(229
|
)
|
|
—
|
|
||
Other
|
|
5
|
|
|
(7
|
)
|
||
Cash flows due to changes in:
|
|
|
|
|
|
|
||
Other assets and other liabilities
|
|
46
|
|
|
52
|
|
||
Insurance claims and policyholder liabilities
|
|
(24
|
)
|
|
(2
|
)
|
||
Taxes receivable and payable
|
|
35
|
|
|
10
|
|
||
Accrued interest and finance charges
|
|
12
|
|
|
7
|
|
||
Restricted cash and cash equivalents not reinvested
|
|
1
|
|
|
—
|
|
||
Other, net
|
|
1
|
|
|
—
|
|
||
Net cash provided by operating activities
|
|
413
|
|
|
189
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Net principal collections (originations) of finance receivables held for investment and held for sale
|
|
(126
|
)
|
|
(5
|
)
|
||
Proceeds on sales of finance receivables held for sale originated as held for investment
|
|
—
|
|
|
52
|
|
||
Proceeds from sale of SpringCastle interests
|
|
101
|
|
|
—
|
|
||
Cash received from CitiFinancial Credit Company
|
|
23
|
|
|
—
|
|
||
Available-for-sale securities purchased
|
|
(154
|
)
|
|
(95
|
)
|
||
Trading and other securities purchased
|
|
(1
|
)
|
|
(954
|
)
|
||
Available-for-sale securities called, sold, and matured
|
|
175
|
|
|
60
|
|
||
Trading and other securities called, sold, and matured
|
|
13
|
|
|
1,211
|
|
||
Change in restricted cash and cash equivalents
|
|
12
|
|
|
(120
|
)
|
||
Proceeds from sale of real estate owned
|
|
2
|
|
|
5
|
|
||
Other, net
|
|
(4
|
)
|
|
7
|
|
||
Net cash provided by investing activities
|
|
41
|
|
|
161
|
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt, net of commissions
|
|
1,673
|
|
|
1,523
|
|
||
Repayments of long-term debt
|
|
(2,335
|
)
|
|
(315
|
)
|
||
Distributions to joint venture partners
|
|
(18
|
)
|
|
(18
|
)
|
||
Excess tax benefit from share-based compensation
|
|
2
|
|
|
2
|
|
||
Net cash provided by (used for) financing activities
|
|
(678
|
)
|
|
1,192
|
|
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)
|
|
|
|
|
||||
|
|
|
|
|
||||
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
|
1
|
|
|
—
|
|
||
|
|
|
|
|
||||
Net change in cash and cash equivalents
|
|
(223
|
)
|
|
1,542
|
|
||
Cash and cash equivalents at beginning of period
|
|
939
|
|
|
879
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
716
|
|
|
$
|
2,421
|
|
|
|
|
|
|
||||
Supplemental non-cash activities
|
|
|
|
|
|
|
||
Transfer of finance receivables held for investment to finance receivables held for sale (prior to deducting allowance for finance receivable losses)
|
|
$
|
1,478
|
|
|
$
|
—
|
|
Transfer of finance receivables to real estate owned
|
|
$
|
2
|
|
|
$
|
2
|
|
Net unsettled investment security dispositions
|
|
$
|
—
|
|
|
$
|
20
|
|
(dollars in millions)
|
|
As
Reported
|
|
|
|
As
Adjusted
|
||||||
|
|
Adjustments *
|
|
|||||||||
|
|
|
|
|
|
|
||||||
Cash consideration
|
|
$
|
4,478
|
|
|
$
|
(23
|
)
|
(a)
|
$
|
4,455
|
|
Fair value of assets acquired:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
958
|
|
|
—
|
|
|
958
|
|
|||
Investment securities
|
|
1,294
|
|
|
—
|
|
|
1,294
|
|
|||
Personal loans
|
|
8,801
|
|
|
(6
|
)
|
(b)
|
8,795
|
|
|||
Intangibles
|
|
555
|
|
|
—
|
|
|
555
|
|
|||
Other assets
|
|
247
|
|
|
—
|
|
|
247
|
|
|||
Fair value of liabilities assumed:
|
|
|
|
|
|
|
||||||
Long-term debt
|
|
(7,725
|
)
|
|
—
|
|
|
(7,725
|
)
|
|||
Unearned premium, insurance policy and claims reserves
|
|
(936
|
)
|
|
—
|
|
|
(936
|
)
|
|||
Other liabilities
|
|
(156
|
)
|
|
1
|
|
(c)
|
(155
|
)
|
|||
Goodwill
|
|
$
|
1,440
|
|
|
|
|
$
|
1,422
|
|
*
|
During the first quarter of 2016, we recorded the following adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill as new information, which existed as of the acquisition date, was brought to our attention:
|
(a)
|
Represents a subsequent cash payment from Citigroup as a result of reaching final agreement on certain purchase accounting adjustments.
|
(b)
|
Represents the net impact of an increase to the discount of purchased credit impaired finance receivables of
$64 million
and an increase to the premium on finance receivables purchased as performing receivables of
$58 million
as a result of revisions to the receivables valuation during the measurement period. This adjustment also resulted in
$15 million
of additional loan premium amortization and
$3 million
of additional loan discount accretion during the first quarter of 2016, of which
$7 million
and
$1 million
, respectively, would have been recorded during the two months ended December 31, 2015, had the adjustment been retroactively reflected since the acquisition date.
|
(c)
|
Represents the settlement of a payable to Citigroup during the measurement period.
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
||
|
|
|
||
Three Months Ended March 31, 2016
|
|
|
||
Balance at beginning of period
|
|
$
|
1,440
|
|
Adjustments to purchase price allocation *
|
|
(18
|
)
|
|
Balance at end of period
|
|
$
|
1,422
|
|
*
|
Goodwill adjustments were recorded at OMFH subsidiary level.
|
•
|
Personal loans —
are secured by consumer goods, automobiles, or other personal property or are unsecured, typically non-revolving with a fixed-rate and a fixed, original term of
three
to
six years
. At
March 31, 2016
,
$3.0 billion
of personal loans, or
22%
, were secured by collateral consisting of titled personal property (such as automobiles) and
$10.2 billion
, or
78%
, were secured by consumer household goods or other items of personal property or were unsecured, compared to
$2.8 billion
of personal loans, or
21%
, secured by collateral consisting of titled personal property and
$10.5 billion
, or
79%
, secured by consumer household goods or other items of personal property or unsecured at
December 31, 2015
.
|
•
|
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, 2016
,
$197 million
of real estate loans, or
39%
, were secured by first mortgages and
$306 million
, or
61%
, were secured by second mortgages, compared to
$202 million
of real estate loans, or
39%
, secured by first mortgages and
$322 million
, or
61%
, secured by second mortgages at
December 31, 2015
. 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 of 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.
|
•
|
SpringCastle Portfolio —
included unsecured loans and loans secured by subordinate residential real estate mortgages that were sold on March 31, 2016, in connection with the SpringCastle Interests Sale. The SpringCastle Portfolio included both closed-end accounts and open-end lines of credit. These loans were in a liquidating status and varied in substance and form from our originated loans. Unless terminated, we will continue to provide the servicing for these loans, which we service as unsecured loans because the liens are subordinated to superior ranking security interests.
|
(dollars in millions)
|
|
Personal
Loans |
|
SpringCastle
Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance |
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross receivables *
|
|
$
|
15,202
|
|
|
$
|
—
|
|
|
$
|
499
|
|
|
$
|
21
|
|
|
$
|
15,722
|
|
Unearned finance charges and points and fees
|
|
(2,196
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2,198
|
)
|
|||||
Accrued finance charges
|
|
139
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
143
|
|
|||||
Deferred origination costs
|
|
64
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|||||
Total
|
|
$
|
13,209
|
|
|
$
|
—
|
|
|
$
|
503
|
|
|
$
|
19
|
|
|
$
|
13,731
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross receivables *
|
|
$
|
15,325
|
|
|
$
|
1,545
|
|
|
$
|
520
|
|
|
$
|
25
|
|
|
$
|
17,415
|
|
Unearned finance charges and points and fees
|
|
(2,261
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2,263
|
)
|
|||||
Accrued finance charges
|
|
147
|
|
|
31
|
|
|
4
|
|
|
—
|
|
|
182
|
|
|||||
Deferred origination costs
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|||||
Total
|
|
$
|
13,267
|
|
|
$
|
1,576
|
|
|
$
|
524
|
|
|
$
|
23
|
|
|
$
|
15,390
|
|
*
|
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 initial fair value;
|
•
|
Finance receivables originated subsequent to the respective OneMain and Fortress acquisitions
— 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.
|
(dollars in millions)
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
|
|
|
|
||||
Personal loans
|
|
$
|
1
|
|
|
$
|
2
|
|
SpringCastle Portfolio
|
|
—
|
|
|
365
|
|
||
Real estate loans
|
|
20
|
|
|
30
|
|
||
Total
|
|
$
|
21
|
|
|
$
|
397
|
|
(dollars in millions)
|
|
Personal
Loans |
|
SpringCastle
Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance |
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
60-89 days past due
|
|
$
|
103
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
109
|
|
90-119 days past due
|
|
90
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
95
|
|
|||||
120-149 days past due
|
|
91
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
94
|
|
|||||
150-179 days past due
|
|
85
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
88
|
|
|||||
180 days or more past due
|
|
5
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
27
|
|
|||||
Total delinquent finance receivables
|
|
374
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
413
|
|
|||||
Current
|
|
12,701
|
|
|
—
|
|
|
447
|
|
|
19
|
|
|
13,167
|
|
|||||
30-59 days past due
|
|
134
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
151
|
|
|||||
Total
|
|
$
|
13,209
|
|
|
$
|
—
|
|
|
$
|
503
|
|
|
$
|
19
|
|
|
$
|
13,731
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
60-89 days past due
|
|
$
|
124
|
|
|
$
|
22
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
164
|
|
90-119 days past due
|
|
93
|
|
|
14
|
|
|
3
|
|
|
—
|
|
|
110
|
|
|||||
120-149 days past due
|
|
54
|
|
|
11
|
|
|
2
|
|
|
1
|
|
|
68
|
|
|||||
150-179 days past due
|
|
50
|
|
|
10
|
|
|
2
|
|
|
—
|
|
|
62
|
|
|||||
180 days or more past due
|
|
4
|
|
|
1
|
|
|
12
|
|
|
—
|
|
|
17
|
|
|||||
Total delinquent finance receivables
|
|
325
|
|
|
58
|
|
|
37
|
|
|
1
|
|
|
421
|
|
|||||
Current
|
|
12,776
|
|
|
1,475
|
|
|
474
|
|
|
22
|
|
|
14,747
|
|
|||||
30-59 days past due
|
|
166
|
|
|
43
|
|
|
13
|
|
|
—
|
|
|
222
|
|
|||||
Total
|
|
$
|
13,267
|
|
|
$
|
1,576
|
|
|
$
|
524
|
|
|
$
|
23
|
|
|
$
|
15,390
|
|
(dollars in millions)
|
|
Personal
Loans |
|
SpringCastle
Portfolio
|
|
Real Estate
Loans |
|
Retail
Sales Finance |
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Performing
|
|
$
|
12,938
|
|
|
$
|
—
|
|
|
$
|
470
|
|
|
$
|
19
|
|
|
$
|
13,427
|
|
Nonperforming
|
|
271
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
304
|
|
|||||
Total
|
|
$
|
13,209
|
|
|
$
|
—
|
|
|
$
|
503
|
|
|
$
|
19
|
|
|
$
|
13,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Performing
|
|
$
|
13,066
|
|
|
$
|
1,540
|
|
|
$
|
505
|
|
|
$
|
22
|
|
|
$
|
15,133
|
|
Nonperforming
|
|
201
|
|
|
36
|
|
|
19
|
|
|
1
|
|
|
257
|
|
|||||
Total
|
|
$
|
13,267
|
|
|
$
|
1,576
|
|
|
$
|
524
|
|
|
$
|
23
|
|
|
$
|
15,390
|
|
•
|
OneMain Acquisition
- effective November 1, 2015, we acquired personal loans (the “OM Loans”), some of which were determined to be credit impaired. During the first quarter of 2016, we recorded a purchase accounting adjustment of
$64 million
, which decreased the initial fair value of these purchase credit impaired loans, as a result of new information brought to our attention that existed as of the acquisition date.
|
•
|
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 purchase accounting and adjusted the carrying value of our finance receivables (the “FA Loans”) to their fair value.
|
•
|
Joint venture acquisition of the SpringCastle Portfolio (the “SCP Loans”)
- on April 1, 2013, we acquired a
47%
equity interest in the SCP Loans, some of which were determined to be credit impaired on the date of purchase. On March 31, 2016, we sold the SpringCastle Portfolio in connection with the sale of our equity interest in the SpringCastle Joint Venture.
|
(dollars in millions)
|
|
OM Loans
|
|
SCP Loans
|
|
FA Loans *
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Carrying amount, net of allowance
|
|
$
|
468
|
|
|
$
|
—
|
|
|
$
|
71
|
|
|
$
|
539
|
|
Outstanding balance
|
|
708
|
|
|
—
|
|
|
132
|
|
|
840
|
|
||||
Allowance for purchased credit impaired finance receivable losses
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Carrying amount, net of allowance
|
|
$
|
624
|
|
|
$
|
223
|
|
|
$
|
76
|
|
|
$
|
923
|
|
Outstanding balance
|
|
911
|
|
|
482
|
|
|
136
|
|
|
1,529
|
|
||||
Allowance for purchased credit impaired finance receivable losses
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
*
|
Purchased credit impaired FA Loans held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
FA Loans
|
||
|
|
|
||
March 31, 2016
|
|
|
|
|
Carrying amount
|
|
$
|
52
|
|
Outstanding balance
|
|
87
|
|
|
|
|
|
||
December 31, 2015
|
|
|
|
|
Carrying amount
|
|
$
|
55
|
|
Outstanding balance
|
|
89
|
|
(dollars in millions)
|
|
OM Loans (a)
|
|
SCP Loans
|
|
FA Loans
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
143
|
|
|
$
|
422
|
|
|
$
|
39
|
|
|
$
|
604
|
|
Accretion (b)
|
|
(20
|
)
|
|
(16
|
)
|
|
(2
|
)
|
|
(38
|
)
|
||||
Transfer due to finance receivables sold
|
|
—
|
|
|
(399
|
)
|
|
—
|
|
|
(399
|
)
|
||||
Disposals of finance receivables (c)
|
|
(14
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|
(22
|
)
|
||||
Balance at end of period
|
|
$
|
109
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
145
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
—
|
|
|
$
|
541
|
|
|
$
|
19
|
|
|
$
|
560
|
|
Accretion (b)
|
|
—
|
|
|
(24
|
)
|
|
(3
|
)
|
|
(27
|
)
|
||||
Disposals of finance receivables (c)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
||||
Balance at end of period
|
|
$
|
—
|
|
|
$
|
505
|
|
|
$
|
16
|
|
|
$
|
521
|
|
(a)
|
As a result of the purchase accounting adjustment to the purchased credit impaired OM Loans, which we recorded during the first quarter of 2016, accretion and disposals of finance receivables for the three months ended March 31, 2016 include
$1 million
and
$3 million
, respectively, that would have been recorded during the two months ended December 31, 2015, had this adjustment been retroactively reflected since the acquisition date.
|
(b)
|
Accretion on our purchased credit impaired FA Loans held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Accretion
|
|
$
|
1
|
|
|
$
|
2
|
|
(c)
|
Disposals of finance receivables represent finance charges forfeited due to purchased credit impaired finance receivables charged off during the period.
|
(dollars in millions)
|
|
Personal
Loans (a)
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans (a) |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
|
|||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|||||||
TDR gross finance receivables (b)
|
|
$
|
86
|
|
|
$
|
—
|
|
|
$
|
199
|
|
|
$
|
285
|
|
TDR net finance receivables
|
|
83
|
|
|
—
|
|
|
201
|
|
|
284
|
|
||||
Allowance for TDR finance receivable losses
|
|
48
|
|
|
—
|
|
|
35
|
|
|
83
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|||||||
TDR gross finance receivables (b)
|
|
$
|
46
|
|
|
$
|
14
|
|
|
$
|
200
|
|
|
$
|
260
|
|
TDR net finance receivables
|
|
46
|
|
|
13
|
|
|
201
|
|
|
260
|
|
||||
Allowance for TDR finance receivable losses
|
|
17
|
|
|
4
|
|
|
34
|
|
|
55
|
|
(a)
|
TDR finance receivables held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Personal
Loans
|
|
Real Estate
Loans
|
|
Total
|
||||||
|
|
|
|
|
|
|
|
|||||
March 31, 2016
|
|
|
|
|
|
|
|
|||||
TDR gross finance receivables
|
|
$
|
2
|
|
|
$
|
91
|
|
|
$
|
93
|
|
TDR net finance receivables
|
|
2
|
|
|
91
|
|
|
93
|
|
|||
|
|
|
|
|
|
|
|
|||||
December 31, 2015
|
|
|
|
|
|
|
|
|||||
TDR gross finance receivables
|
|
$
|
2
|
|
|
$
|
92
|
|
|
$
|
94
|
|
TDR net finance receivables
|
|
2
|
|
|
92
|
|
|
94
|
|
(b)
|
As defined earlier in this Note.
|
(dollars in millions)
|
|
Personal
Loans *
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans *
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
TDR average net receivables
|
|
$
|
63
|
|
|
$
|
11
|
|
|
$
|
201
|
|
|
$
|
275
|
|
TDR finance charges recognized
|
|
1
|
|
|
—
|
|
|
3
|
|
|
4
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
TDR average net receivables
|
|
$
|
25
|
|
|
$
|
11
|
|
|
$
|
195
|
|
|
$
|
231
|
|
TDR finance charges recognized
|
|
1
|
|
|
—
|
|
|
3
|
|
|
4
|
|
*
|
TDR finance receivables held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Personal
Loans |
|
Real Estate
Loans
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
||||||
TDR average net receivables
|
|
$
|
2
|
|
|
$
|
92
|
|
|
$
|
94
|
|
TDR finance charges recognized
|
|
—
|
|
|
1
|
|
|
1
|
|
|||
|
|
|
|
|
|
|
||||||
Three Months Ended March 31, 2015
|
|
|
|
|
|
|
||||||
TDR average net receivables
|
|
$
|
—
|
|
|
$
|
90
|
|
|
$
|
90
|
|
TDR finance charges recognized
|
|
—
|
|
|
1
|
|
|
1
|
|
(dollars in millions)
|
|
Personal
Loans (a)
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans (a) |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Pre-modification TDR net finance receivables
|
|
$
|
50
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
55
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
|
|
|
|
||||||||
Rate reduction
|
|
$
|
46
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
50
|
|
Other (b)
|
|
3
|
|
|
—
|
|
|
1
|
|
|
4
|
|
||||
Total post-modification TDR net finance receivables
|
|
$
|
49
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
54
|
|
Number of TDR accounts
|
|
6,916
|
|
|
157
|
|
|
89
|
|
|
7,162
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Pre-modification TDR net finance receivables
|
|
$
|
9
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
15
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
|
|
|
|
|
|||||||
Rate reduction
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
11
|
|
Other (b)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Total post-modification TDR net finance receivables
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
14
|
|
Number of TDR accounts
|
|
1,864
|
|
|
195
|
|
|
78
|
|
|
2,137
|
|
(a)
|
TDR finance receivables held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Personal
Loans
|
|
Real Estate
Loans
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
||||||
Pre-modification TDR net finance receivables *
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Post-modification TDR net finance receivables *
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Number of TDR accounts
|
|
128
|
|
|
19
|
|
|
147
|
|
|||
|
|
|
|
|
|
|
||||||
Three Months Ended March 31, 2015
|
|
|
|
|
|
|
||||||
Pre-modification TDR net finance receivables **
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Post-modification TDR net finance receivables **
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Number of TDR accounts
|
|
—
|
|
|
9
|
|
|
9
|
|
*
|
Pre- and post-modification TDR personal loans held for sale for the
three
months ended
March 31, 2016
were less than $
1 million
and, therefore, are not quantified in the table above.
|
**
|
Pre- and post-modification TDR real estate loans held for sale for the
three
months ended
March 31, 2015
were less than
$1 million
and, therefore, are not quantified in the table above.
|
(b)
|
“Other” modifications primarily include forgiveness of principal or interest.
|
(dollars in millions)
|
|
Personal
Loans
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans (a) |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables (b) (c)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Number of TDR accounts
|
|
400
|
|
|
19
|
|
|
20
|
|
|
439
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables (b) (d)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Number of TDR accounts
|
|
57
|
|
|
10
|
|
|
18
|
|
|
85
|
|
(a)
|
TDR finance receivables held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Real Estate
Loans
|
||
|
|
|
||
Three Months Ended March 31, 2016
|
|
|
||
TDR net finance receivables
|
|
$
|
1
|
|
Number of TDR accounts
|
|
9
|
|
|
|
|
|
||
Three Months Ended March 31, 2015
|
|
|
||
TDR net finance receivables *
|
|
$
|
—
|
|
Number of TDR accounts
|
|
9
|
|
*
|
TDR real estate loans held for sale 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.
|
(b)
|
Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted.
|
(c)
|
TDR SpringCastle Portfolio loans for the
three
months ended
March 31, 2016
that defaulted during the previous 12-month period were less than $1 million and, therefore, are not quantified in the combined table above.
|
(d)
|
TDR personal loans and SpringCastle Portfolio loans 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 combined table above.
|
(dollars in millions)
|
|
Personal
Loans |
|
SpringCastle
Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance |
|
Consolidated Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
541
|
|
|
$
|
4
|
|
|
$
|
41
|
|
|
$
|
1
|
|
|
$
|
587
|
|
Provision for finance receivable losses
|
|
206
|
|
|
18
|
|
|
3
|
|
|
—
|
|
|
227
|
|
|||||
Charge-offs
|
|
(201
|
)
|
|
(21
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(225
|
)
|
|||||
Recoveries
|
|
11
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
15
|
|
|||||
Other *
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Balance at end of period
|
|
$
|
557
|
|
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
600
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
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
|
|
*
|
Consists of the elimination of allowance for finance receivable losses due to the sale of the SpringCastle Portfolio on
March 31, 2016
, in connection with the sale of our equity interest in the SpringCastle Joint Venture. See Note 2 for further information on this sale.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Charged-off against provision for finance receivable losses:
|
|
|
|
|
|
|
||
OM Loans
|
|
$
|
56
|
|
|
$
|
—
|
|
SCP Loans
|
|
4
|
|
|
7
|
|
(dollars in millions)
|
|
Personal
Loans |
|
SpringCastle
Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance |
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for finance receivable losses for finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Collectively evaluated for impairment
|
|
$
|
509
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
509
|
|
Purchased credit impaired finance receivables
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
TDR finance receivables
|
|
48
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
83
|
|
|||||
Total
|
|
$
|
557
|
|
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
600
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Collectively evaluated for impairment
|
|
$
|
12,660
|
|
|
$
|
—
|
|
|
$
|
366
|
|
|
$
|
19
|
|
|
$
|
13,045
|
|
Purchased credit impaired finance receivables
|
|
468
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
495
|
|
|||||
TDR finance receivables
|
|
81
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
191
|
|
|||||
Total
|
|
$
|
13,209
|
|
|
$
|
—
|
|
|
$
|
503
|
|
|
$
|
19
|
|
|
$
|
13,731
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for finance receivable losses as a percentage of finance receivables
|
|
4.22
|
%
|
|
—
|
%
|
|
8.52
|
%
|
|
2.91
|
%
|
|
4.37
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for finance receivable losses for finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Collectively evaluated for impairment
|
|
$
|
524
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
525
|
|
Purchased credit impaired finance receivables
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
TDR finance receivables
|
|
17
|
|
|
4
|
|
|
34
|
|
|
—
|
|
|
55
|
|
|||||
Total
|
|
$
|
541
|
|
|
$
|
4
|
|
|
$
|
41
|
|
|
$
|
1
|
|
|
$
|
587
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Collectively evaluated for impairment
|
|
$
|
12,599
|
|
|
$
|
1,340
|
|
|
$
|
387
|
|
|
$
|
23
|
|
|
$
|
14,349
|
|
Purchased credit impaired finance receivables
|
|
624
|
|
|
223
|
|
|
28
|
|
|
—
|
|
|
875
|
|
|||||
TDR finance receivables
|
|
44
|
|
|
13
|
|
|
109
|
|
|
—
|
|
|
166
|
|
|||||
Total
|
|
$
|
13,267
|
|
|
$
|
1,576
|
|
|
$
|
524
|
|
|
$
|
23
|
|
|
$
|
15,390
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for finance receivable losses as a percentage of finance receivables
|
|
4.07
|
%
|
|
0.27
|
%
|
|
7.93
|
%
|
|
3.45
|
%
|
|
3.81
|
%
|
(dollars in millions)
|
|
Cost/
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
$
|
105
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
106
|
|
Obligations of states, municipalities, and political subdivisions
|
|
142
|
|
|
2
|
|
|
—
|
|
|
144
|
|
||||
Non-U.S. government and government sponsored entities
|
|
121
|
|
|
1
|
|
|
—
|
|
|
122
|
|
||||
Corporate debt
|
|
1,043
|
|
|
11
|
|
|
(12
|
)
|
|
1,042
|
|
||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential mortgage-backed securities (“RMBS”)
|
|
118
|
|
|
1
|
|
|
(1
|
)
|
|
118
|
|
||||
Commercial mortgage-backed securities (“CMBS”)
|
|
115
|
|
|
1
|
|
|
—
|
|
|
116
|
|
||||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”)
|
|
55
|
|
|
—
|
|
|
—
|
|
|
55
|
|
||||
Total bonds
|
|
1,699
|
|
|
17
|
|
|
(13
|
)
|
|
1,703
|
|
||||
Preferred stock
|
|
14
|
|
|
—
|
|
|
(1
|
)
|
|
13
|
|
||||
Common stock
|
|
24
|
|
|
1
|
|
|
(1
|
)
|
|
24
|
|
||||
Other long-term investments
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total *
|
|
$
|
1,739
|
|
|
$
|
18
|
|
|
$
|
(15
|
)
|
|
$
|
1,742
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
111
|
|
Obligations of states, municipalities, and political subdivisions
|
|
140
|
|
|
1
|
|
|
(1
|
)
|
|
140
|
|
||||
Non-U.S. government and government sponsored entities
|
|
126
|
|
|
1
|
|
|
(1
|
)
|
|
126
|
|
||||
Corporate debt
|
|
1,018
|
|
|
3
|
|
|
(22
|
)
|
|
999
|
|
||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
RMBS
|
|
128
|
|
|
—
|
|
|
—
|
|
|
128
|
|
||||
CMBS
|
|
117
|
|
|
—
|
|
|
(1
|
)
|
|
116
|
|
||||
CDO/ABS
|
|
71
|
|
|
—
|
|
|
—
|
|
|
71
|
|
||||
Total bonds
|
|
1,712
|
|
|
5
|
|
|
(26
|
)
|
|
1,691
|
|
||||
Preferred stock
|
|
14
|
|
|
—
|
|
|
(1
|
)
|
|
13
|
|
||||
Common stock
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Other long-term investments
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total *
|
|
$
|
1,751
|
|
|
$
|
5
|
|
|
$
|
(27
|
)
|
|
$
|
1,729
|
|
*
|
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, 2016
and
December 31, 2015
, which is classified as a restricted investment and carried at cost.
|
|
|
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, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. government and government sponsored entities
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
—
|
|
Obligations of states, municipalities, and political subdivisions
|
|
25
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
28
|
|
|
—
|
|
||||||
Non-U.S. government and government sponsored entities
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
||||||
Corporate debt
|
|
330
|
|
|
(12
|
)
|
|
6
|
|
|
—
|
|
|
336
|
|
|
(12
|
)
|
||||||
RMBS
|
|
23
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
23
|
|
|
(1
|
)
|
||||||
CMBS
|
|
48
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
53
|
|
|
—
|
|
||||||
CDO/ABS
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
||||||
Total bonds
|
|
521
|
|
|
(13
|
)
|
|
14
|
|
|
—
|
|
|
535
|
|
|
(13
|
)
|
||||||
Preferred stock
|
|
6
|
|
|
—
|
|
|
6
|
|
|
(1
|
)
|
|
12
|
|
|
(1
|
)
|
||||||
Common stock
|
|
10
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
10
|
|
|
(1
|
)
|
||||||
Other long-term investments
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Total
|
|
$
|
538
|
|
|
$
|
(14
|
)
|
|
$
|
20
|
|
|
$
|
(1
|
)
|
|
$
|
558
|
|
|
$
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. government and government sponsored entities
|
|
$
|
102
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
102
|
|
|
$
|
(1
|
)
|
Obligations of states, municipalities, and political subdivisions
|
|
69
|
|
|
(1
|
)
|
|
2
|
|
|
—
|
|
|
71
|
|
|
(1
|
)
|
||||||
Non-U.S. government and government sponsored entities
|
|
19
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
19
|
|
|
(1
|
)
|
||||||
Corporate debt
|
|
786
|
|
|
(22
|
)
|
|
7
|
|
|
—
|
|
|
793
|
|
|
(22
|
)
|
||||||
RMBS
|
|
107
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|
—
|
|
||||||
CMBS
|
|
104
|
|
|
(1
|
)
|
|
5
|
|
|
—
|
|
|
109
|
|
|
(1
|
)
|
||||||
CDO/ABS
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
—
|
|
||||||
Total bonds
|
|
1,258
|
|
|
(26
|
)
|
|
14
|
|
|
—
|
|
|
1,272
|
|
|
(26
|
)
|
||||||
Preferred stock
|
|
2
|
|
|
—
|
|
|
6
|
|
|
(1
|
)
|
|
8
|
|
|
(1
|
)
|
||||||
Common stock
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||||
Other long-term investments
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Total
|
|
$
|
1,277
|
|
|
$
|
(26
|
)
|
|
$
|
20
|
|
|
$
|
(1
|
)
|
|
$
|
1,297
|
|
|
$
|
(27
|
)
|
*
|
Unrealized losses on certain available-for-sale securities were less than $
1 million
and, therefore, are not quantified in the table above.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Proceeds from sales and redemptions
|
|
$
|
113
|
|
|
$
|
76
|
|
|
|
|
|
|
||||
Realized gains
|
|
$
|
2
|
|
|
$
|
7
|
|
Realized losses
|
|
—
|
|
|
(1
|
)
|
||
Net realized gains
|
|
$
|
2
|
|
|
$
|
6
|
|
(dollars in millions)
|
|
Fair
Value
|
|
Amortized Cost
|
||||
|
|
|
|
|
||||
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
|
|
|
|
|
|
|
||
Due in 1 year or less
|
|
$
|
169
|
|
|
$
|
169
|
|
Due after 1 year through 5 years
|
|
651
|
|
|
650
|
|
||
Due after 5 years through 10 years
|
|
414
|
|
|
408
|
|
||
Due after 10 years
|
|
180
|
|
|
184
|
|
||
Mortgage-backed, asset-backed, and collateralized securities
|
|
289
|
|
|
288
|
|
||
Total
|
|
$
|
1,703
|
|
|
$
|
1,699
|
|
(dollars in millions)
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
|
|
|
|
||||
Fixed maturity trading and other securities:
|
|
|
|
|
|
|
||
Bonds:
|
|
|
|
|
|
|
||
Non-U.S. government and government sponsored entities
|
|
$
|
3
|
|
|
$
|
3
|
|
Corporate debt
|
|
116
|
|
|
124
|
|
||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|||
RMBS
|
|
2
|
|
|
2
|
|
||
CMBS
|
|
2
|
|
|
2
|
|
||
Total bonds
|
|
123
|
|
|
131
|
|
||
Preferred stock
|
|
6
|
|
|
6
|
|
||
Total *
|
|
$
|
129
|
|
|
$
|
137
|
|
*
|
The fair value of other securities totaled
$129 million
at
March 31, 2016
and
$128 million
at
December 31, 2015
.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Net unrealized gains on trading and other securities held at period end
|
|
$
|
3
|
|
|
$
|
3
|
|
Net realized gains (losses) on trading and other securities sold or redeemed *
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
3
|
|
|
$
|
3
|
|
*
|
Net realized gains (losses) on trading and other securities sold or redeemed were less than
$1 million
for the three months ended
March 31, 2016
and, therefore, are not quantified in the table above.
|
|
|
Senior Debt
|
|
|
|
|
||||||||||||||
(dollars in millions)
|
|
Securitizations
|
|
Revolving
Conduit Facilities |
|
Medium
Term
Notes
|
|
Junior
Subordinated
Debt
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rates (a)
|
|
2.41% - 6.94%
|
|
|
1.92% - 2.77%
|
|
|
5.25% - 8.25%
|
|
|
6.00
|
%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Second quarter 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Third quarter 2016
|
|
—
|
|
|
—
|
|
|
375
|
|
|
—
|
|
|
375
|
|
|||||
Fourth quarter 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
First quarter 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Remainder of 2017
|
|
—
|
|
|
—
|
|
|
1,890
|
|
|
—
|
|
|
1,890
|
|
|||||
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2019
|
|
—
|
|
|
—
|
|
|
1,400
|
|
|
—
|
|
|
1,400
|
|
|||||
2020
|
|
—
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
300
|
|
|||||
2021-2067
|
|
—
|
|
|
—
|
|
|
1,750
|
|
|
350
|
|
|
2,100
|
|
|||||
Securitizations (b)
|
|
7,876
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,876
|
|
|||||
Revolving conduit facilities (b)
|
|
—
|
|
|
1,347
|
|
|
—
|
|
|
—
|
|
|
1,347
|
|
|||||
Total principal maturities
|
|
$
|
7,876
|
|
|
$
|
1,347
|
|
|
$
|
5,715
|
|
|
$
|
350
|
|
|
$
|
15,288
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total carrying amount (c)
|
|
$
|
7,864
|
|
|
$
|
1,347
|
|
|
$
|
5,487
|
|
|
$
|
172
|
|
|
$
|
14,870
|
|
Debt issuance costs (d)
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
(29
|
)
|
(a)
|
The interest rates shown are the range of contractual rates in effect at
March 31, 2016
.
|
(b)
|
Securitizations and borrowings under revolving conduit facilities 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 and revolving conduit facilities.
|
(c)
|
The carrying amount of our long-term debt associated with certain securitizations that were either (i) issued at a premium or discount or (ii) revalued at a premium or discount based on its fair value at the time of the OneMain Acquisition or the Fortress Acquisition or (iii) 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.
|
(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 are reported in other assets and are excluded from the table above.
|
(dollars in millions)
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
9
|
|
|
$
|
11
|
|
Finance receivables:
|
|
|
|
|
|
|
||
Personal loans
|
|
11,591
|
|
|
11,424
|
|
||
SpringCastle Portfolio
|
|
—
|
|
|
1,576
|
|
||
Allowance for finance receivable losses
|
|
408
|
|
|
431
|
|
||
Finance receivables held for sale
|
|
—
|
|
|
435
|
|
||
Restricted cash and cash equivalents
|
|
576
|
|
|
663
|
|
||
Other assets
|
|
86
|
|
|
48
|
|
||
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||
Long-term debt
|
|
$
|
9,211
|
|
|
$
|
11,654
|
|
Other liabilities
|
|
14
|
|
|
17
|
|
(dollars in millions except earnings per share)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Numerator (basic and diluted):
|
|
|
|
|
|
|
||
Net income attributable to OneMain Holdings, Inc.
|
|
$
|
153
|
|
|
$
|
—
|
|
Denominator:
|
|
|
|
|
|
|
||
Weighted average number of shares outstanding (basic)
|
|
134,694,759
|
|
|
115,027,470
|
|
||
Effect of dilutive securities *
|
|
212,989
|
|
|
—
|
|
||
Weighted average number of shares outstanding (diluted)
|
|
134,907,748
|
|
|
115,027,470
|
|
||
Earnings per share:
|
|
|
|
|
|
|
||
Basic
|
|
$
|
1.14
|
|
|
$
|
—
|
|
Diluted
|
|
$
|
1.13
|
|
|
$
|
—
|
|
*
|
We have excluded the following shares in the diluted earnings per share calculation for the
three
months ended
March 31, 2016
and
2015
because these shares would be anti-dilutive, which could impact the earnings per share calculation in the future:
|
•
|
579,432
performance shares and
1,011,860
service shares for the
three
months ended
March 31, 2016
,; and
|
•
|
597,477
performance shares and
405,185
service shares for the
three
months ended
March 31, 2015
.
|
(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, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
(14
|
)
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
(33
|
)
|
Other comprehensive income before reclassifications
|
|
17
|
|
|
—
|
|
|
4
|
|
|
21
|
|
||||
Reclassification adjustments from accumulated other comprehensive income (loss)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Balance at end of period
|
|
$
|
2
|
|
|
$
|
(19
|
)
|
|
$
|
4
|
|
|
$
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
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 (loss)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Balance at end of period
|
|
$
|
11
|
|
|
$
|
(13
|
)
|
|
$
|
5
|
|
|
$
|
3
|
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Unrealized gains on investment securities:
|
|
|
|
|
|
|
||
Reclassification from accumulated other comprehensive income
(loss) to investment revenues, before taxes
|
|
$
|
2
|
|
|
$
|
6
|
|
Income tax effect
|
|
(1
|
)
|
|
(2
|
)
|
||
Reclassification from accumulated other comprehensive income
(loss) to investment revenues, net of taxes
|
|
$
|
1
|
|
|
$
|
4
|
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Components of net periodic benefit cost - pension plans:
|
|
|
|
|
|
|
||
Interest cost
|
|
$
|
4
|
|
|
$
|
4
|
|
Expected return on assets
|
|
(4
|
)
|
|
(5
|
)
|
||
Net periodic benefit cost
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
•
|
Consumer and Insurance;
|
•
|
Acquisitions and Servicing; and
|
•
|
Real Estate.
|
•
|
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, disability insurance, and involuntary unemployment insurance), non-credit insurance, and ancillary products, such as warranty protection. As a result of the OneMain Acquisition, our combined branch operations primarily conduct business in
43
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 was acquired through a joint venture in which we owned a
47%
equity interest. On
March 31, 2016
, the SpringCastle Portfolio was sold in connection with the sale of our equity interest in the SpringCastle Joint Venture. These loans consist of unsecured loans and loans secured by subordinate residential real estate mortgages and include 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. Unless terminated, we will continue to provide the servicing for these loans, which we service as unsecured loans because the liens are subordinated to superior ranking security interests.
|
•
|
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. Prior to the OneMain Acquisition, this segment also included proceeds from the sale of our real estate loans in 2014. We used these proceeds to acquire OneMain.
|
Interest income
|
Directly correlated with a specific segment.
|
Interest expense
|
Acquisition and Servicing
- This segment includes interest expense specifically identified to the SpringCastle Portfolio.
|
Consumer and Insurance, Real Estate and Other
- The Company has securitization debt and unsecured debt. The Company first allocates interest expense to its segments based on actual expense for securitizations and secured term debt and using a weighted average for unsecured debt allocated to the segments. Average unsecured debt allocations for the periods presented are as follows:
|
|
Subsequent to the OneMain Acquisition
|
|
Total average unsecured debt is allocated as follows:
|
|
l
Consumer and Insurance
- receives remainder of unallocated average debt; and
|
|
l
Real Estate and Other
- at 100% of asset base. (Asset base represents the average net finance receivables including finance receivables held for sale.)
|
|
The net effect of the change in debt allocation and asset base methodologies for the three months ended March 31, 2015 had it been in place as of the beginning of the year would be an increase in interest expense of $54 million for Consumer and Insurance and a decrease in interest expense of $45 million and $9 million for Real Estate and Other, respectively.
|
|
For the period third quarter 2014 to the OneMain Acquisition
|
|
Total average unsecured debt is allocated to Consumer and Insurance, Real Estate and Other, such that the total debt allocated across each segment equals 83%, up to 100% and 100% of each of its respective asset base. Any excess is allocated to Consumer and Insurance.
|
|
Average unsecured debt is allocated after average securitized debt to achieve the calculated average segment debt.
|
|
Asset base represents the following:
|
|
l
Consumer and Insurance
- average net finance receivables including average net finance receivables held for sale;
|
|
l
Real Estate
- average net finance receivables including average net finance receivables held for sale, cash and cash equivalents, investments including proceeds from Real Estate sales; and
|
|
l
Other
- average net finance receivables other than the periods listed below:
|
|
l
May 2015 to the OneMain Acquisition
- average net finance receivables and cash and cash equivalents less proceeds from equity issuance in 2015, operating cash reserve and cash included in other segments.
|
|
l
February 2015 to April 2015
- average net finance receivables and cash and cash equivalents less operating cash reserve and cash included in other segments.
|
|
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.
|
Other revenues
|
Directly correlated with a specific segment, except for: (i) net gain (loss) on repurchases and repayments of debt, which is allocated to the segments based on the interest expense allocation of debt and (ii) gains and losses on foreign currency exchange, which is 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.
|
Acquisition-related transaction and integration expenses
|
Consists of: (i) acquisition-related transaction and integration costs related to the OneMain Acquisition, including legal and other professional fees, which we primarily report in Other, as these are costs related to acquiring the business as opposed to operating the business; (ii) software termination costs, which are allocated to Consumer and Insurance; and (iii) incentive compensation incurred above and beyond expected cost from acquiring and retaining talent in relation to the OneMain Acquisition, which 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 policy benefits and claims
|
Directly correlated with a specific segment.
|
•
|
Interest income
- the net purchase accounting impact of the amortization (accretion) of the net premium (discount) assigned to finance receivables and the impact of identifying purchased credit impaired finance receivables as compared to the historical values of finance receivables;
|
•
|
Interest expense
- primarily includes the accretion of the net discount applied to our long term debt as part of purchase accounting;
|
•
|
Provision for finance receivable losses
- the adjustment to reflect the difference between our allowance adjustment calculated under our Segment Accounting Basis and our GAAP basis;
|
•
|
Other revenues
- the impact of carrying value differences between Segment Accounting Basis and purchase accounting basis when measuring mark to market for loans held for sale and realized gains/losses associated with our investment portfolio; and
|
•
|
Other expenses
- the net impact of amortization associated with identified intangibles as part of purchase accounting and deferred costs impacted by purchase accounting.
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Acquisitions
and
Servicing
|
|
Real
Estate
|
|
Other
|
|
Eliminations
|
|
Segment to
GAAP
Adjustment
|
|
Consolidated
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
At or for the Three Months Ended
March 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest income
|
|
$
|
849
|
|
|
$
|
101
|
|
|
$
|
15
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(140
|
)
|
|
$
|
826
|
|
Interest expense
|
|
175
|
|
|
20
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
226
|
|
|||||||
Provision for finance receivable losses
|
|
232
|
|
|
17
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
227
|
|
|||||||
Net interest income (loss) after provision for finance receivable losses
|
|
442
|
|
|
64
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(134
|
)
|
|
373
|
|
|||||||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
229
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
229
|
|
|||||||
Other revenues
|
|
141
|
|
|
11
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|
2
|
|
|
132
|
|
|||||||
Acquisition-related transaction and integration expenses
|
|
28
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
(4
|
)
|
|
33
|
|
|||||||
Other expenses
|
|
388
|
|
|
26
|
|
|
7
|
|
|
(4
|
)
|
|
(11
|
)
|
|
20
|
|
|
426
|
|
|||||||
Income (loss) before provision for (benefit from) income taxes
|
|
167
|
|
|
278
|
|
|
(18
|
)
|
|
(4
|
)
|
|
—
|
|
|
(148
|
)
|
|
275
|
|
|||||||
Income before provision for income taxes attributable to non-controlling interests
|
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|||||||
Income (loss) before provision for (benefit from) income taxes attributable to OneMain Holdings, Inc.
|
|
$
|
167
|
|
|
$
|
252
|
|
|
$
|
(18
|
)
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(148
|
)
|
|
$
|
249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Assets
|
|
$
|
11,340
|
|
|
$
|
107
|
|
|
$
|
667
|
|
|
$
|
293
|
|
|
$
|
4,455
|
|
|
$
|
2,193
|
|
|
$
|
19,055
|
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Acquisitions
and
Servicing
|
|
Real
Estate
|
|
Other
|
|
Eliminations
|
|
Segment to
GAAP
Adjustment
|
|
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
|
|
|||||||
Acquisition-related transaction and integration expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||||
Other expenses
|
|
146
|
|
|
29
|
|
|
7
|
|
|
2
|
|
|
(14
|
)
|
|
1
|
|
|
171
|
|
|||||||
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 OneMain Holdings, Inc.
|
|
$
|
65
|
|
|
$
|
36
|
|
|
$
|
(48
|
)
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
(33
|
)
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Assets *
|
|
$
|
4,868
|
|
|
$
|
1,971
|
|
|
$
|
3,613
|
|
|
$
|
1,690
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
12,159
|
|
*
|
Assets reflect the following:
|
•
|
As a result of our early adoption of ASU 2015-03, we reclassified
$32 million
of debt issuance costs from other assets to long-term debt as of
March 31, 2015
.
|
•
|
In connection with our policy integration with OneMain, we report unearned insurance premium and claim reserves related to finance receivables (previously reported in insurance claims and policyholder liabilities) as a contra-asset to net finance receivables, which totaled
$216 million
at
March 31, 2015
.
|
•
|
During the second quarter of 2015, we identified incorrect allocations of our total assets disclosure within our segment footnote and have corrected the previously disclosed total assets at March 31, 2015 in the table above.
|
|
|
Fair Value Measurements Using
|
|
Total
Fair Value |
|
Total
Carrying Value |
||||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
709
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
716
|
|
|
$
|
716
|
|
Investment securities
|
|
37
|
|
|
1,832
|
|
|
3
|
|
|
1,872
|
|
|
1,872
|
|
|||||
Net finance receivables, less allowance for finance receivable losses
|
|
—
|
|
|
—
|
|
|
13,662
|
|
|
13,662
|
|
|
13,131
|
|
|||||
Finance receivables held for sale
|
|
—
|
|
|
—
|
|
|
804
|
|
|
804
|
|
|
776
|
|
|||||
Restricted cash and cash equivalents
|
|
588
|
|
|
—
|
|
|
—
|
|
|
588
|
|
|
588
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial mortgage loans
|
|
—
|
|
|
—
|
|
|
53
|
|
|
53
|
|
|
53
|
|
|||||
Escrow advance receivable
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
11
|
|
|||||
Receivables related to sales of real estate loans and related trust assets
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
14,997
|
|
|
$
|
—
|
|
|
$
|
14,997
|
|
|
$
|
14,870
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
939
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
939
|
|
|
$
|
939
|
|
Investment securities
|
|
36
|
|
|
1,829
|
|
|
2
|
|
|
1,867
|
|
|
1,867
|
|
|||||
Net finance receivables, less allowance for finance receivable losses
|
|
—
|
|
|
—
|
|
|
15,943
|
|
|
15,943
|
|
|
14,803
|
|
|||||
Finance receivables held for sale
|
|
—
|
|
|
—
|
|
|
819
|
|
|
819
|
|
|
796
|
|
|||||
Restricted cash and cash equivalents
|
|
676
|
|
|
—
|
|
|
—
|
|
|
676
|
|
|
676
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial mortgage loans
|
|
—
|
|
|
—
|
|
|
62
|
|
|
62
|
|
|
62
|
|
|||||
Escrow advance receivable
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
11
|
|
|||||
Receivables related to sales of real estate loans and related trust assets
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
17,616
|
|
|
$
|
—
|
|
|
$
|
17,616
|
|
|
$
|
17,300
|
|
|
|
Fair Value Measurements Using
|
|
Total Carried At Fair Value
|
||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents in mutual funds
|
|
$
|
164
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
164
|
|
Cash equivalents in certificates of deposit and commercial paper
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
—
|
|
|
106
|
|
|
—
|
|
|
106
|
|
||||
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
144
|
|
|
—
|
|
|
144
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
122
|
|
|
—
|
|
|
122
|
|
||||
Corporate debt
|
|
—
|
|
|
1,042
|
|
|
—
|
|
|
1,042
|
|
||||
RMBS
|
|
—
|
|
|
118
|
|
|
—
|
|
|
118
|
|
||||
CMBS
|
|
—
|
|
|
116
|
|
|
—
|
|
|
116
|
|
||||
CDO/ABS
|
|
—
|
|
|
55
|
|
|
—
|
|
|
55
|
|
||||
Total bonds
|
|
—
|
|
|
1,703
|
|
|
—
|
|
|
1,703
|
|
||||
Preferred stock
|
|
6
|
|
|
7
|
|
|
—
|
|
|
13
|
|
||||
Common stock
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
||||
Other long-term investments
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Total available-for-sale securities *
|
|
30
|
|
|
1,710
|
|
|
2
|
|
|
1,742
|
|
||||
Other securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Corporate debt
|
|
1
|
|
|
115
|
|
|
—
|
|
|
116
|
|
||||
RMBS
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
CMBS
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Total bonds
|
|
1
|
|
|
122
|
|
|
—
|
|
|
123
|
|
||||
Preferred stock
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Total other securities
|
|
7
|
|
|
122
|
|
|
—
|
|
|
129
|
|
||||
Total investment securities
|
|
37
|
|
|
1,832
|
|
|
2
|
|
|
1,871
|
|
||||
Restricted cash in mutual funds
|
|
210
|
|
|
—
|
|
|
—
|
|
|
210
|
|
||||
Total
|
|
$
|
411
|
|
|
$
|
1,839
|
|
|
$
|
2
|
|
|
$
|
2,252
|
|
*
|
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, 2016
, which is carried at cost.
|
|
|
Fair Value Measurements Using
|
|
Total Carried At Fair Value
|
||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents in mutual funds
|
|
$
|
240
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
240
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
—
|
|
|
111
|
|
|
—
|
|
|
111
|
|
||||
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
140
|
|
|
—
|
|
|
140
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
126
|
|
|
—
|
|
|
126
|
|
||||
Corporate debt
|
|
—
|
|
|
999
|
|
|
—
|
|
|
999
|
|
||||
RMBS
|
|
—
|
|
|
128
|
|
|
—
|
|
|
128
|
|
||||
CMBS
|
|
—
|
|
|
116
|
|
|
—
|
|
|
116
|
|
||||
CDO/ABS
|
|
—
|
|
|
71
|
|
|
—
|
|
|
71
|
|
||||
Total bonds
|
|
—
|
|
|
1,691
|
|
|
—
|
|
|
1,691
|
|
||||
Preferred stock
|
|
6
|
|
|
7
|
|
|
—
|
|
|
13
|
|
||||
Common stock
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Other long-term investments
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Total available-for-sale securities (a)
|
|
29
|
|
|
1,698
|
|
|
2
|
|
|
1,729
|
|
||||
Trading and other securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Corporate debt
|
|
—
|
|
|
124
|
|
|
—
|
|
|
124
|
|
||||
RMBS
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
CMBS
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Total bonds
|
|
—
|
|
|
131
|
|
|
—
|
|
|
131
|
|
||||
Preferred stock
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Total trading and other securities (b)
|
|
6
|
|
|
131
|
|
|
—
|
|
|
137
|
|
||||
Total investment securities
|
|
35
|
|
|
1,829
|
|
|
2
|
|
|
1,866
|
|
||||
Restricted cash in mutual funds
|
|
277
|
|
|
—
|
|
|
—
|
|
|
277
|
|
||||
Total
|
|
$
|
552
|
|
|
$
|
1,829
|
|
|
$
|
2
|
|
|
$
|
2,383
|
|
(a)
|
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
December 31, 2015
, which is carried at cost.
|
(b)
|
The fair value of other securities totaled
$128 million
at
December 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 |
||||||||||||||||
|
|
Balance at
beginning of period |
|
Other
revenues |
|
Other
comprehensive income (loss) |
|
|
|
|
||||||||||||||||||
(dollars in millions)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Three Months Ended
March 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other long-term investments
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Total
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Three Months Ended
March 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate debt
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
CMBS
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||||||
Total bonds
|
|
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 greater observability of pricing inputs.
|
(a)
|
At
March 31, 2016
and
December 31, 2015
, RMBS consisted of
one
bond, which was less than
$1 million
.
|
(b)
|
Not applicable.
|
|
|
Fair Value Measurements Using *
|
|
|
||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Finance receivables held for sale
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
170
|
|
|
$
|
170
|
|
Real estate owned
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
||||
Commercial mortgage loans
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
188
|
|
|
$
|
188
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real estate owned
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
11
|
|
Commercial mortgage loans
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
19
|
|
*
|
The fair value information presented in the table is as of the date the fair value adjustment was recorded.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
||
Finance receivables held for sale
|
|
$
|
2
|
|
|
$
|
—
|
|
Real estate owned
|
|
1
|
|
|
1
|
|
||
Commercial mortgage loans *
|
|
1
|
|
|
—
|
|
||
Total
|
|
$
|
4
|
|
|
$
|
1
|
|
*
|
Net impairment charges recorded on commercial mortgage loans for the three months ended
March 31, 2015
was less than
$1 million
and, therefore, is not quantified in the table above.
|
*
|
Not applicable.
|
Topic
|
|
Page
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
•
|
the inability to obtain, or delays in obtaining, cost savings and synergies from the OneMain Acquisition and risks and other uncertainties associated with the integration of the companies;
|
•
|
unanticipated expenditures relating to the OneMain Acquisition;
|
•
|
any litigation, fines or penalties that could arise relating to the OneMain Acquisition;
|
•
|
the impact of the OneMain Acquisition on each company’s relationships with employees and third parties;
|
•
|
various risks relating to the sale of branches to Lendmark Financial Services, LLC (the “Lendmark Sale”) in connection with the previously disclosed settlement with the U.S. Department of Justice (the “DOJ”);
|
•
|
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, cyber security breaches, 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 or 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, including us), 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 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, any impact to our business operations, reputation, financial position, results of operations or cash flows arising therefrom, any impact to our relationships with lenders, investors or other third parties attributable thereto, and the costs and effects of any breach of any representation, warranty or covenant under any of our contractual arrangements, including indentures or other financing arrangements or contracts, as a result of any such violation;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
any failure or inability to achieve the SpringCastle Portfolio performance requirements set forth in the SpringCastle Interests Sale purchase agreement; and
|
•
|
the effect of future sales of our remaining portfolio of real estate loans and the transfer of servicing of these loans.
|
•
|
Personal Loans —
We offer personal loans through our combined 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
three
to
six years
. At
March 31, 2016
, we had over
2.3 million
personal loans, representing
$13.8 billion
of net finance receivables (including personal loans held for sale of $606 million). At
March 31, 2016
,
$3.0 billion
, or
22%
, were secured by collateral consisting of titled personal property (such as automobiles) and
$10.2 billion
, or
78%
, were secured by consumer household goods or other items of personal property or were unsecured, compared to
$2.8 billion
of personal loans, or
21%
, secured by collateral consisting of titled personal property and
$10.5 billion
, or
79%
, secured by consumer household goods or other items of personal property or unsecured at December 31, 2015.
|
•
|
Insurance Products —
We offer our customers credit insurance (life insurance, disability insurance, and involuntary unemployment insurance) and non-credit insurance through both our combined branch network and our centralized operations. Credit insurance and non-credit insurance products are provided by Springleaf insurance subsidiaries, Merit Life Insurance Co. and Yosemite Insurance Company, and by OneMain insurance subsidiaries, American Health and Life Insurance Company and Triton Insurance Company. We also offer home and auto membership plans of an unaffiliated company as an ancillary product.
|
•
|
SpringCastle Portfolio —
We service the SpringCastle Portfolio that was acquired through a joint venture in which we owned a
47%
equity interest. On
March 31, 2016
, the SpringCastle Portfolio was sold in connection with the SpringCastle Interests Sale. These loans consisted of unsecured loans and loans secured by subordinate residential real estate mortgages and include both closed-end accounts and open-end lines of credit. These loans were in a liquidating status and varied in substance and form from our originated loans. Unless terminated, we will continue to provide the servicing for these loans, which we service as unsecured loans due to the fact that the liens are subordinated to superior ranking security interests.
|
•
|
Real Estate Loans —
We ceased real estate lending in January of 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. Our first lien mortgages are serviced by third-party servicers, and we continue to provide servicing for our second lien mortgages (home equity lines of credit). At
March 31, 2016
, we had
$503 million
of real estate loans held for investment, of which
$197 million
, or
39%
, were secured by first mortgages and
$306 million
, or
61%
, were secured by second mortgages, compared to
$202 million
of real estate loans, or
39%
, secured by first mortgages and
$322 million
, or
61%
, secured by second mortgages at December 31, 2015. Real estate loans held for sale totaled $170 million and $179 million at
March 31, 2016
and December 31, 2015, respectively, all of which were secured by first mortgages.
|
•
|
Retail Sales Finance —
We ceased purchasing retail sales contracts and revolving retail accounts in January of 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.”
|
•
|
Consumer and Insurance;
|
•
|
Acquisitions and Servicing; and
|
•
|
Real Estate.
|
•
|
Significant expansion of our geographical presence.
We believe that our expanded footprint will allow us to reach new customers for our personal finance products and further enhance our reputation in the communities we serve.
|
•
|
Diversification of our customer base.
Our branch customer base more than doubled as a result of the OneMain Acquisition and, in addition, we believe the OneMain Acquisition will enable us to extend our reach to higher credit score segments than we presently serve.
|
•
|
Product cross-sell opportunities and scale benefits.
The OneMain Acquisition will enable us to distribute existing Springleaf products through OneMain branches and leverage key OneMain technology and sales practices to achieve greater scale benefits in existing Springleaf branches.
|
•
|
Significant cost savings opportunities by combining complementary businesses.
The highly complementary nature of our two businesses, including branch operations, will enable us to achieve significant on‑going cost savings. Expected drivers of cost savings include consolidation of branch operations, elimination of redundant centralized and corporate functions and greater efficiency of marketing programs.
|
•
|
Earnings accretion.
We expect to realize approximately $275 million - $300 million of synergies from the OneMain Acquisition, with that amount reflected in our results beginning with the second half of 2017. We also anticipate incurring approximately $275 million of acquisition-related expenses to consolidate the two companies, which we expect to incur primarily during 2016 and the first half of 2017.
|
(dollars in millions except earnings per share)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Interest income
|
|
$
|
826
|
|
|
$
|
406
|
|
Interest expense
|
|
226
|
|
|
158
|
|
||
Provision for finance receivable losses
|
|
227
|
|
|
87
|
|
||
Net interest income after provision for finance receivable losses
|
|
373
|
|
|
161
|
|
||
Net gain on sale of SpringCastle interests
|
|
229
|
|
|
—
|
|
||
Other revenues
|
|
132
|
|
|
51
|
|
||
Acquisition-related transaction and integration expenses
|
|
33
|
|
|
3
|
|
||
Other expenses
|
|
426
|
|
|
171
|
|
||
Income before provision for income taxes
|
|
275
|
|
|
38
|
|
||
Provision for income taxes
|
|
96
|
|
|
7
|
|
||
Net income
|
|
179
|
|
|
31
|
|
||
Net income attributable to non-controlling interests
|
|
26
|
|
|
31
|
|
||
Net income attributable to OneMain Holdings, Inc.
|
|
$
|
153
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Share Data:
|
|
|
|
|
|
|
||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
||
Basic
|
|
134,694,759
|
|
|
115,027,470
|
|
||
Diluted
|
|
134,907,748
|
|
|
115,027,470
|
|
||
Earnings per share:
|
|
|
|
|
|
|
||
Basic
|
|
$
|
1.14
|
|
|
$
|
—
|
|
Diluted
|
|
$
|
1.13
|
|
|
$
|
—
|
|
•
|
Average net receivables
increased
for the
three
months ended
March 31, 2016
primarily due to higher personal loan average net receivables resulting from (i) the addition of OneMain personal loans acquired as a result of the OneMain Acquisition, (ii) our continued focus on personal loan originations through our combined branch network and centralized operations, and (iii) the continued growth of our auto loan product. This
increase
was partially offset by (i) the liquidating status of the previously owned SpringCastle Portfolio, (ii) the transfer of $608 million of personal loans to finance receivables held for sale on September 30, 2015 as part of our initiative to close the OneMain Acquisition, and (iii) our liquidating real estate loan portfolio.
|
•
|
Yield
decreased
for the
three
months ended
March 31, 2016
primarily due to (i) the addition of OneMain personal loans as a result of the OneMain Acquisition and the continued growth of our auto loan product, both of which generally have lower yields and (ii) a decrease in yield on our liquidating real estate loan portfolio due to a higher proportion of TDR real estate loans.
|
•
|
Interest income on finance receivables held for sale
increased
for the
three
months ended
March 31, 2016
primarily due to higher average finance receivables held for sale during the 2016 period resulting from the transfer of $608 million of our personal loans to held for sale on September 30, 2015.
|
•
|
Average debt
increase
d for the
three
months ended
March 31, 2016
primarily due to debt acquired as a result of the OneMain Acquisition, partially offset by net debt repurchases and repayment during the past 12 months, including our consumer securitization transactions and borrowings under our conduit facilities. See Notes
9
and
10
of the Notes to Condensed Consolidated Financial Statements for further information on our long-term debt, consumer loan securitization transactions, and borrowings under our conduit facilities.
|
•
|
Weighted average interest rate on our debt
decreased
for the
three
months ended
March 31, 2016
primarily due to additional borrowings under our conduit facilities, which generally have lower interest rates.
|
•
|
Allowance requirements
increased for the
three
months ended
March 31, 2016
primarily due to the additional allowance requirements on OneMain personal loans in connection with the OneMain Acquisition. This increase was partially offset by a decrease in allowance requirements on our auto loan product, as we now have a full year of historical data reflected in the allowance model, in addition to using delinquency roll rates from a proxy hard-secured portfolio.
|
•
|
Net charge-offs
increased for the
three
months ended
March 31, 2016
primarily due to (i) an additional three months of net charge-offs on OneMain personal loans of $111 million during the 2016 period, (ii) higher net charge-offs on Springleaf personal loans reflecting growth in these personal loans during the past 12 months and a higher personal loan delinquency ratio at
March 31, 2016
. This increase was partially offset by (i) lower net charge-offs on the previously owned SpringCastle Portfolio reflecting the improved central servicing performance as the acquired portfolio matured under our ownership and (ii) lower net charge-offs on our real estate loans reflecting the liquidating status of the real estate loan portfolio.
|
•
|
Salaries and benefits
increase
d
$121 million
for the
three
months ended
March 31, 2016
primarily due to (i) an additional three months of OneMain salaries and benefits of
$103 million
in the 2016 period and (ii) higher Springleaf salary accruals resulting from an increase in the number of its employees.
|
•
|
Other operating expenses
increased
$105 million
for the
three
months ended
March 31, 2016
primarily due to (i) an additional three months of OneMain other operating expenses of
$94 million
in the 2016 period, (ii) higher Springleaf advertising expenses due to increased focus on e-commerce and increased direct mailings to pre-approved customers, and (iii) higher Springleaf information technology expenses. The increase in other operating expenses was partially offset by a $6 million reduction in Springleaf reserves related to estimated Property Protection Insurance claims, which we believe will have minimal loss contingencies.
|
•
|
Insurance policy benefits and claims
increase
d
$29 million
for the
three
months ended
March 31, 2016
primarily due to an additional three months of OneMain insurance policy benefits and claims of
$28 million
in the 2016 period.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Income before provision for income taxes - GAAP basis
|
|
$
|
275
|
|
|
$
|
38
|
|
Adjustments:
|
|
|
|
|
||||
Interest income (a)
|
|
140
|
|
|
(3
|
)
|
||
Interest expense (b)
|
|
18
|
|
|
30
|
|
||
Provision for finance receivable losses (c)
|
|
(24
|
)
|
|
2
|
|
||
Repurchases and repayments of long-term debt (d)
|
|
(5
|
)
|
|
—
|
|
||
Amortization of other intangible assets (e)
|
|
17
|
|
|
1
|
|
||
Other (f)
|
|
2
|
|
|
3
|
|
||
Income before provision for income taxes - Segment Accounting Basis
|
|
423
|
|
|
71
|
|
||
Adjustments:
|
|
|
|
|
|
|||
Pretax operating loss - Non-Core Portfolio Operations
|
|
18
|
|
|
48
|
|
||
Pretax operating loss - Other non-core/non-originating legacy operations (g)
|
|
4
|
|
|
13
|
|
||
Net gain on sale of SpringCastle interests
|
|
(229
|
)
|
|
—
|
|
||
Acquisition-related transaction and integration expenses - Core Consumer Operations
|
|
28
|
|
|
—
|
|
||
Net loss from accelerated repayment/repurchase of debt - Core Consumer Operations
|
|
8
|
|
|
—
|
|
||
SpringCastle transaction costs
|
|
1
|
|
|
—
|
|
||
Operating income attributable to non-controlling interests
|
|
(26
|
)
|
|
(31
|
)
|
||
Pretax core earnings (non-GAAP)
|
|
$
|
227
|
|
|
$
|
101
|
|
(a)
|
Interest income adjustments consist of: (i) the net purchase accounting impact of the amortization (accretion) of the net premium (discount) assigned to finance receivables and (ii) the impact of identifying purchased credit impaired finance receivables as compared to the historical values of finance receivables.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Accretion of net premium (discount) applied to non-credit impaired net finance receivables
|
|
$
|
102
|
|
|
$
|
(3
|
)
|
Purchased credit impaired finance receivables finance charges
|
|
33
|
|
|
—
|
|
||
Elimination of accretion or amortization of historical unearned points and fees, deferred origination costs, premiums, and discounts
|
|
5
|
|
|
—
|
|
||
Total
|
|
$
|
140
|
|
|
$
|
(3
|
)
|
(b)
|
Interest expense adjustments primarily include the accretion of the net discount applied to our long term debt as part of purchase accounting.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Accretion of net discount applied to long-term debt
|
|
$
|
26
|
|
|
$
|
30
|
|
Elimination of accretion or amortization of historical discounts, premiums, commissions,
and fees
|
|
(8
|
)
|
|
—
|
|
||
Total
|
|
$
|
18
|
|
|
$
|
30
|
|
(c)
|
Provision for finance receivable losses consists of the adjustment to reflect the difference between our allowance adjustment calculated under our Segment Accounting Basis and our GAAP basis.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Allowance for finance receivable losses adjustments
|
|
$
|
41
|
|
|
$
|
4
|
|
Net charge-offs
|
|
(65
|
)
|
|
(2
|
)
|
||
Total
|
|
$
|
(24
|
)
|
|
$
|
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)
|
Amortization of other intangible assets reflects the net impact of amortization associated with identified intangibles as part of purchase accounting and deferred costs impacted by purchase accounting.
|
(f)
|
“Other” items reflect differences between Segment Accounting Basis and GAAP 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 applicable date of acquisition.
|
(g)
|
Includes acquisition-related transaction and integration expenses of
$9 million
and
$3 million
for the
three
months ended
March 31, 2016
and
2015
, respectively. See “Segment Results - Other” for further discussion of pretax operating results of our other non-core/non-originating legacy operations.
|
Interest income
|
Directly correlated with a specific segment.
|
Interest expense
|
Acquisition and Servicing
- This segment includes interest expense specifically identified to the SpringCastle Portfolio.
|
Consumer and Insurance, Real Estate and Other
- The Company has securitization debt and unsecured debt. The Company first allocates interest expense to its segments based on actual expense for securitizations and secured term debt and using a weighted average for unsecured debt allocated to the segments. Average unsecured debt allocations for the periods presented are as follows:
|
|
Subsequent to the OneMain Acquisition
|
|
Total average unsecured debt is allocated as follows:
|
|
l
Consumer and Insurance
- receives remainder of unallocated average debt; and
|
|
l
Real Estate and Other
- at 100% of asset base. (Asset base represents the average net finance receivables including finance receivables held for sale.)
|
|
The net effect of the change in debt allocation and asset base methodologies for the three months ended March 31, 2015 had it been in place as of the beginning of the year would be an increase in interest expense of $54 million for Consumer and Insurance and a decrease in interest expense of $45 million and $9 million for Real Estate and Other, respectively.
|
|
For the period third quarter 2014 to the OneMain Acquisition
|
|
Total average unsecured debt is allocated to Consumer and Insurance, Real Estate and Other, such that the total debt allocated across each segment equals 83%, up to 100% and 100% of each of its respective asset base. Any excess is allocated to Consumer and Insurance.
|
|
Average unsecured debt is allocated after average securitized debt to achieve the calculated average segment debt.
|
|
Asset base represents the following:
|
|
l
Consumer and Insurance
- average net finance receivables including average net finance receivables held for sale;
|
|
l
Real Estate
- average net finance receivables including average net finance receivables held for sale, cash and cash equivalents, investments including proceeds from Real Estate sales; and
|
|
l
Other
- average net finance receivables other than the period listed below:
|
|
l
February 2015 to April 2015
- average net finance receivables and cash and cash equivalents less operating cash reserve and cash included in other segments.
|
|
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.
|
Other revenues
|
Directly correlated with a specific segment, except for gains and losses on foreign currency exchange, which 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.
|
Acquisition-related transaction and integration expenses
|
Consists of: (i) acquisition-related transaction and integration costs related to the OneMain Acquisition, including legal and other professional fees, which we primarily report in Other, as these are costs related to acquiring the business as opposed to operating the business; (ii) software termination costs, which are allocated to Consumer and Insurance; and (iii) incentive compensation incurred above and beyond expected cost from acquiring and retaining talent in relation to the OneMain Acquisition, which 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 policy benefits and claims
|
Directly correlated with a specific segment.
|
(dollars in millions)
|
|
At or for the
Three Months Ended March 31, |
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Interest income
|
|
$
|
950
|
|
|
$
|
383
|
|
Interest expense
|
|
195
|
|
|
63
|
|
||
Provision for finance receivable losses
|
|
249
|
|
|
83
|
|
||
Net interest income after provision for finance receivable losses
|
|
506
|
|
|
237
|
|
||
Net gain on sale of SpringCastle interests
|
|
229
|
|
|
—
|
|
||
Other revenues
|
|
152
|
|
|
70
|
|
||
Acquisition-related transaction and integration expenses
|
|
28
|
|
|
—
|
|
||
Other expenses
|
|
414
|
|
|
175
|
|
||
Pretax operating income
|
|
445
|
|
|
132
|
|
||
Pretax operating income attributable to non-controlling interests
|
|
26
|
|
|
31
|
|
||
Pretax operating income attributable to OneMain Holdings, Inc.
|
|
$
|
419
|
|
|
$
|
101
|
|
|
|
|
|
|
||||
Consumer and Insurance
|
|
|
|
|
|
|
||
Finance receivables held for investment:
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
12,984
|
|
|
$
|
3,895
|
|
Number of accounts
|
|
2,175,628
|
|
|
909,004
|
|
||
TDR finance receivables
|
|
$
|
474
|
|
|
$
|
26
|
|
Allowance for finance receivable losses - TDR
|
|
$
|
210
|
|
|
$
|
3
|
|
Finance receivables held for sale:
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
606
|
|
|
$
|
—
|
|
Number of accounts
|
|
143,254
|
|
|
—
|
|
||
Finance receivables held for investment and held for sale:
|
|
|
|
|
||||
Average net receivables
|
|
$
|
13,545
|
|
|
$
|
3,831
|
|
Yield
|
|
25.15
|
%
|
|
26.88
|
%
|
||
Gross charge-off ratio
|
|
8.12
|
%
|
|
6.43
|
%
|
||
Recovery ratio
|
|
(0.62
|
)%
|
|
(0.79
|
)%
|
||
Charge-off ratio
|
|
7.50
|
%
|
|
5.64
|
%
|
||
Delinquency ratio
|
|
2.82
|
%
|
|
2.53
|
%
|
||
Origination volume
|
|
$
|
2,343
|
|
|
$
|
868
|
|
Number of accounts originated
|
|
328,057
|
|
|
157,403
|
|
||
|
|
|
|
|
||||
Acquisitions and Servicing
|
|
|
|
|
||||
Finance receivables held for investment:
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
—
|
|
|
$
|
1,868
|
|
Number of accounts
|
|
—
|
|
|
264,830
|
|
||
Average net receivables
|
|
1,529
|
|
|
1,923
|
|
||
Yield
|
|
26.58
|
%
|
|
26.78
|
%
|
||
Net charge-off ratio
|
|
4.65
|
%
|
|
5.43
|
%
|
||
Delinquency ratio
|
|
—
|
%
|
|
4.22
|
%
|
•
|
Interest income — Consumer and Insurance
increased
$593 million
for the
three
months ended
March 31, 2016
due to the following:
|
◦
|
Finance charges
increased
$551 million
for the
three
months ended
March 31, 2016
primarily due to the net of the following:
|
▪
|
Average net receivables
increased for the
three
months ended
March 31, 2016
primarily due to (i) the addition of OneMain personal loans as a result of the OneMain Acquisition and (ii) increased originations on our personal loans resulting from our continued focus on personal loans, including our auto loan product. At
March 31, 2016
, we had over
93,000
auto loans totaling
$1.1 billion
compared to nearly
34,000
auto loans totaling
$415 million
at March 31, 2015.
|
▪
|
Yield
decreased for the
three
months ended
March 31, 2016
primarily due to the addition of OneMain personal loans and the higher proportion of auto loan product, both of which generally have lower yields.
|
◦
|
Interest income on finance receivables held for sale
of
$42 million
for the
three
months ended
March 31, 2016
resulted from the transfer of personal loans to finance receivables held for sale on September 30, 2015.
|
•
|
Interest income — Acquisitions and Servicing
decreased
$26 million
for the
three
months ended
March 31, 2016
primarily due to lower average net receivables reflecting the liquidating status of the previously owned SpringCastle Portfolio.
|
•
|
Interest expense — Consumer and Insurance
increased
$135 million
for the
three
months ended
March 31, 2016
primarily due to (i) an additional three months of interest expense on debt acquired as a result of the OneMain Acquisition and (ii) a change in the methodology of allocating interest expense, as previously described in the allocation methodologies table.
|
•
|
Interest expense — Acquisitions and Servicing
decreased
$3 million
for the
three
months ended
March 31, 2016
primarily due to the liquidating status of the previously owned SpringCastle Portfolio.
|
•
|
Provision for finance receivable losses — Consumer and Insurance
increased
$176 million
for the
three
months ended
March 31, 2016
primarily due to (i) an additional three months of OneMain provision for finance receivable losses of
$157 million
in the 2016 period and (ii) higher net charge-offs on Springleaf personal loans during the 2016 period reflecting growth in Springleaf personal loans during the past 12 months and a higher Springleaf personal loan delinquency ratio at
March 31, 2016
. This increase was partially offset by a decrease in allowance requirements on our auto loan product, as we now have a full year of historical data reflected in the allowance model, in addition to using delinquency roll rates from a proxy hard-secured portfolio.
|
•
|
Provision for finance receivable losses — Acquisitions and Servicing
decreased
$10 million
for the
three
months ended
March 31, 2016
primarily due to lower net charge-offs on the previously owned SpringCastle Portfolio reflecting improvements in servicing of the acquired portfolio and its liquidating status.
|
•
|
Other expenses — Consumer and Insurance
increased
$242 million
for the
three
months ended
March 31, 2016
due to the following:
|
◦
|
Salaries and benefits
increase
d
$120 million
for the
three
months ended
March 31, 2016
primarily due to (i) an additional three months of OneMain salaries and benefits of
$103 million
in the 2016 period, (ii) higher variable compensation reflecting increased originations of personal loans, and (iii) increased staffing.
|
◦
|
Other operating expenses
increase
d
$99 million
for the
three
months ended
March 31, 2016
primarily due to (i) an additional three months of OneMain other operating expenses of
$80 million
in the 2016 period, (ii) higher advertising expenses reflecting our increased focus on e-commerce, (iii) higher information technology expenses, (iv) higher professional service fees, (v) higher occupancy costs resulting from increased rent expense on our administrative offices and servicing facilities, and (vi) higher credit and collection related costs reflecting growth in personal loans, including our auto loan product.
|
◦
|
Insurance policy benefits and claims
increased
$23 million
for the
three
months ended
March 31, 2016
primarily due to an additional three months of OneMain insurance policy benefits and claims of
$22 million
during the 2016 period.
|
•
|
Other expenses — Acquisitions and Servicing
decreased
$3 million
for the
three
months ended
March 31, 2016
primarily due to decreased credit and collection related costs reflecting lower portfolio servicing costs due to the liquidating status of the previously owned SpringCastle Portfolio.
|
(dollars in millions)
|
|
At or for the
Three Months Ended March 31, |
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Interest income
|
|
$
|
15
|
|
|
$
|
18
|
|
Interest expense (a)
|
|
13
|
|
|
60
|
|
||
Provision for finance receivable losses
|
|
2
|
|
|
2
|
|
||
Net interest loss after provision for finance receivable losses
|
|
—
|
|
|
(44
|
)
|
||
Other revenues (b)
|
|
(11
|
)
|
|
3
|
|
||
Other expenses
|
|
7
|
|
|
7
|
|
||
Pretax operating loss
|
|
$
|
(18
|
)
|
|
$
|
(48
|
)
|
|
|
|
|
|
||||
Finance receivables held for investment:
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
542
|
|
|
$
|
646
|
|
Number of accounts
|
|
17,550
|
|
|
21,257
|
|
||
TDR finance receivables
|
|
$
|
159
|
|
|
$
|
159
|
|
Allowance for finance receivable losses - TDR
|
|
$
|
57
|
|
|
$
|
55
|
|
Average net receivables
|
|
$
|
554
|
|
|
$
|
660
|
|
Yield
|
|
8.73
|
%
|
|
9.24
|
%
|
||
Loss ratio
|
|
3.00
|
%
|
|
4.69
|
%
|
||
Delinquency ratio
|
|
7.82
|
%
|
|
7.21
|
%
|
||
Finance receivables held for sale:
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
170
|
|
|
$
|
194
|
|
Number of accounts
|
|
3,048
|
|
|
3,472
|
|
||
TDR finance receivables
|
|
$
|
185
|
|
|
$
|
191
|
|
(a)
|
Interest expense
decreased
$47 million
for the
three
months ended
March 31, 2016
when compared to the same period in
2015
primarily due to a change in the methodology of allocating interest expense, as previously described in the allocation methodologies table.
|
(b)
|
Other revenues
decreased
$14 million
for the
three
months ended
March 31, 2016
when compared to the same period in
2015
primarily due to the following: (i) impairments of $7 million recognized on our real estate loans held for sale during the 2016 period and (ii) decrease in investment revenues of
$5 million
, as the prior period reflected higher investment income generated from investing the proceeds of the 2014 real estate loan sales.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Interest income
|
|
$
|
1
|
|
|
$
|
2
|
|
Interest expense (a)
|
|
—
|
|
|
10
|
|
||
Net interest income (loss) after provision for finance receivable losses
|
|
1
|
|
|
(8
|
)
|
||
Acquisition-related transaction and integration costs (b)
|
|
9
|
|
|
3
|
|
||
Other expenses
|
|
(4
|
)
|
|
2
|
|
||
Pretax operating loss
|
|
$
|
(4
|
)
|
|
$
|
(13
|
)
|
(a)
|
Interest expense for the
three
months ended
March 31, 2016
when compared to the same period in
2015
reflected a change in the methodology of allocating interest expense, as previously described in the allocation methodologies table.
|
(b)
|
Acquisition-related transaction and integration costs of
$9 million
and
$3 million
for the
three
months ended
March 31, 2016
and
2015
, respectively, reflected costs relating to the OneMain Acquisition and the Lendmark Sale, including transaction costs, technology termination and certain compensation and benefit related costs. See Note
2
of the Notes to Condensed Consolidated Financial Statements for further information.
|
(dollars in millions)
|
|
March 31,
|
||||||
|
2016
|
|
2015
|
|||||
|
|
|
|
|
||||
Net finance receivables:
|
|
|
|
|
|
|
||
Personal loans
|
|
$
|
15
|
|
|
$
|
25
|
|
Retail sales finance
|
|
20
|
|
|
41
|
|
||
Total
|
|
$
|
35
|
|
|
$
|
66
|
|
(dollars in millions)
|
|
Personal
Loans
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
60-89 days past due
|
|
$
|
103
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
109
|
|
90-119 days past due
|
|
90
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
95
|
|
|||||
120-149 days past due
|
|
91
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
94
|
|
|||||
150-179 days past due
|
|
85
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
88
|
|
|||||
180 days or more past due
|
|
5
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
27
|
|
|||||
Total delinquent finance receivables
|
|
374
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
413
|
|
|||||
Current
|
|
12,701
|
|
|
—
|
|
|
447
|
|
|
19
|
|
|
13,167
|
|
|||||
30-59 days past due
|
|
134
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
151
|
|
|||||
Total
|
|
$
|
13,209
|
|
|
$
|
—
|
|
|
$
|
503
|
|
|
$
|
19
|
|
|
$
|
13,731
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
60-89 days past due
|
|
$
|
124
|
|
|
$
|
22
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
164
|
|
90-119 days past due
|
|
93
|
|
|
14
|
|
|
3
|
|
|
—
|
|
|
110
|
|
|||||
120-149 days past due
|
|
54
|
|
|
11
|
|
|
2
|
|
|
1
|
|
|
68
|
|
|||||
150-179 days past due
|
|
50
|
|
|
10
|
|
|
2
|
|
|
—
|
|
|
62
|
|
|||||
180 days or more past due
|
|
4
|
|
|
1
|
|
|
12
|
|
|
—
|
|
|
17
|
|
|||||
Total delinquent finance receivables
|
|
325
|
|
|
58
|
|
|
37
|
|
|
1
|
|
|
421
|
|
|||||
Current
|
|
12,776
|
|
|
1,475
|
|
|
474
|
|
|
22
|
|
|
14,747
|
|
|||||
30-59 days past due
|
|
166
|
|
|
43
|
|
|
13
|
|
|
—
|
|
|
222
|
|
|||||
Total
|
|
$
|
13,267
|
|
|
$
|
1,576
|
|
|
$
|
524
|
|
|
$
|
23
|
|
|
$
|
15,390
|
|
(dollars in millions)
|
|
Personal
Loans *
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans *
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables
|
|
$
|
83
|
|
|
$
|
—
|
|
|
$
|
201
|
|
|
$
|
284
|
|
Allowance for TDR finance receivable losses
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
83
|
|
Number of TDR accounts
|
|
17,221
|
|
|
—
|
|
|
3,490
|
|
|
20,711
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables
|
|
$
|
46
|
|
|
$
|
13
|
|
|
$
|
201
|
|
|
$
|
260
|
|
Allowance for TDR finance receivable losses
|
|
$
|
17
|
|
|
$
|
4
|
|
|
$
|
34
|
|
|
$
|
55
|
|
Number of TDR accounts
|
|
12,449
|
|
|
1,656
|
|
|
3,506
|
|
|
17,611
|
|
*
|
TDR finance receivables held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
Personal
Loans
|
|
Real Estate
Loans
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
March 31, 2016
|
|
|
|
|
|
|
||||||
TDR net finance receivables
|
|
$
|
2
|
|
|
$
|
91
|
|
|
$
|
93
|
|
Number of TDR accounts
|
|
746
|
|
|
1,294
|
|
|
2,040
|
|
|||
|
|
|
|
|
|
|
||||||
December 31, 2015
|
|
|
|
|
|
|
||||||
TDR net finance receivables
|
|
$
|
2
|
|
|
$
|
92
|
|
|
$
|
94
|
|
Number of TDR accounts
|
|
738
|
|
|
1,322
|
|
|
2,060
|
|
•
|
On April 1, 2016, we drew $100 million under the variable funding notes issued by the Springleaf 2013-VFN1 Trust.
|
•
|
On April 1, 2016, we drew $200 million under the variable funding notes issued by the OneMain Financial B3 Warehouse Trust.
|
•
|
On April 12, 2016, we repaid the entire $100 million outstanding principal balance of the variable funding notes issued by the Mill River 2015-VFN1 Trust.
|
•
|
On April 14, 2016, we repaid $248 million of the outstanding principal balance of the variable funding notes issued by the Springleaf 2013-VFN1 Trust.
|
•
|
On April 22, 2016, we repaid $100 million of the outstanding principal balance of the variable funding notes issued by the OneMain Financial B6 Warehouse Trust.
|
•
|
On May 3, 2016, we repaid the entire $150 million outstanding principal balance of the variable funding notes issued by the OneMain Financial B6 Warehouse Trust.
|
•
|
On May 3, 2016, we repaid $50 million of the outstanding principal balance of the variable funding notes issued by the OneMain Financial B3 Warehouse Trust.
|
•
|
On May 3, 2016, we repaid the entire $150 million outstanding principal balance of the variable funding notes issued by the Springleaf 2013-VFN1 Trust.
|
•
|
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;
|
•
|
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.
|
•
|
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.
|
(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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Springleaf
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
SLFT 2014-A
|
|
$
|
559
|
|
|
$
|
644
|
|
|
$
|
535
|
|
|
$
|
620
|
|
|
2.56
|
%
|
|
Personal loans
|
|
2 years
|
SLFT 2015-A
|
|
1,163
|
|
|
1,250
|
|
|
1,163
|
|
|
1,250
|
|
|
3.47
|
%
|
|
Personal loans
|
|
3 years
|
||||
SLFT 2015-B
|
|
314
|
|
|
335
|
|
|
314
|
|
|
336
|
|
|
3.78
|
%
|
|
Personal loans
|
|
5 years
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
OneMain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
OMFIT 2014-1
|
|
760
|
|
|
1,004
|
|
|
760
|
|
|
984
|
|
|
2.54
|
%
|
|
Personal loans
|
|
2 years
|
||||
OMFIT 2014-2
|
|
1,185
|
|
|
1,325
|
|
|
1,185
|
|
|
1,294
|
|
|
2.93
|
%
|
|
Personal loans
|
|
2 years
|
||||
OMFIT 2015-1
|
|
1,229
|
|
|
1,397
|
|
|
1,229
|
|
|
1,368
|
|
|
3.74
|
%
|
|
Personal loans
|
|
3 years
|
||||
OMFIT 2015-2
|
|
1,250
|
|
|
1,346
|
|
|
1,250
|
|
|
1,323
|
|
|
3.07
|
%
|
|
Personal loans
|
|
2 years
|
||||
OMFIT 2015-3
|
|
293
|
|
|
330
|
|
|
293
|
|
|
324
|
|
|
4.21
|
%
|
|
Personal loans
|
|
5 years
|
||||
OMFIT 2016-1
|
|
414
|
|
|
569
|
|
|
414
|
|
|
561
|
|
|
3.79
|
%
|
|
Personal loans
|
|
3 years
|
||||
OMFIT 2016-2
|
|
733
|
|
|
1,007
|
|
|
733
|
|
|
1,013
|
|
|
4.37
|
%
|
|
Personal loans
|
|
2 years
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total consumer securitizations
|
|
$
|
7,900
|
|
|
$
|
9,207
|
|
|
$
|
7,876
|
|
|
$
|
9,073
|
|
|
|
|
|
|
|
(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.
|
|
|
Three Months Ended March 31,
|
||||
|
2016
|
|
2015
|
|||
|
|
|
|
|
||
Weighted average interest rate
|
|
4.76
|
%
|
|
5.47
|
%
|
•
|
allowance for finance receivable losses;
|
•
|
purchased credit impaired finance receivables;
|
•
|
TDR finance receivables;
|
•
|
fair value measurements; and
|
•
|
goodwill and other intangible assets.
|
Average debt
|
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 2) 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
|
Exhibits are listed in the Exhibit Index beginning on page
75
herein.
|
|
|
|
ONEMAIN HOLDINGS, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
May 6, 2016
|
|
By
|
/s/ Scott T. Parker
|
|
|
|
|
Scott T. Parker
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
Exhibit
|
|
|
|
|
|
2.1*
|
|
Purchase Agreement, dated as of March 31, 3016, by and among SpringCastle Holdings, LLC, Springleaf
Acquisition Corporation, Springleaf Finance, Inc., NRZ Consumer LLC, NRZ SC America LLC, NRZ SC
Credit Limited, NRZ SC Finance I LLC, NRZ SC Finance II LLC, NRZ SC Finance III LLC, NRZ SC Finance
IV LLC, NRZ SC Finance V LLC, BTO Willow Holdings II, L.P. and Blackstone Family Tactical Opportunities
Investment Partnership - NQ - ESC L.P., and solely with respect to Section 11(a) and Section 11(g), NRZ SC
America Trust 2015-1, NRZ SC Credit Trust 2015-1, NRZ SC Finance Trust 2015-1, and BTO Willow
Holdings, L.P. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on April 1, 2016.
|
|
|
|
3.1
|
|
First Amendment to the Amended and Restated Bylaws of OneMain Holdings, Inc. Incorporated by reference to Exhibit 3b.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.
|
|
|
|
4.1
|
|
Second Supplemental Indenture relating to Springleaf Finance Corporation’s 8.250% Senior Notes due 2020, dated as of April 11, 2016, by and among Springleaf Finance Corporation, OneMain Holdings, Inc. and Wilmington Trust, National Association, as trustee. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 11, 2016.
|
|
|
|
10.1
|
|
Form of Restricted Stock Award Agreement under the Springleaf Holdings, Inc. 2013 Omnibus Incentive Plan (Employees), filed herewith as Exhibit 10.1.
|
|
|
|
10.2
|
|
OneMain Holdings, Inc. Amended and Restated Annual Leadership Incentive Plan, effective January 1, 2016.
Incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2015.
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certifications of the President and Chief Executive Officer of OneMain Holdings, Inc.
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certifications of the Executive Vice President and Chief Financial Officer of OneMain 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.
|
*
|
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of OneMain 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 6, 2016
|
|
|
|
|
|
|
|
|
|
/s/ Jay N. Levine
|
|
|
|
Jay N. Levine
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of OneMain 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 6, 2016
|
|
|
|
|
|
|
|
|
|
/s/ Scott T. Parker
|
|
|
|
Scott T. Parker
|
|
|
|
Executive Vice President and Chief Financial Officer
|
(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/ Scott T. Parker
|
|
|
|
Scott T. Parker
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
Date:
|
May 6, 2016
|
|
|