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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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Emerging growth company
o
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(Do not check if a smaller reporting company)
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Term or Abbreviation
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Definition
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1999 Indenture
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Indenture dated as of May 1, 1999 between SFC and Wilmington
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2014-A Notes
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asset-backed notes issued in March 2014 by the Springleaf Funding Trust 2014-A
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2016 Annual Report on Form
10-K
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Annual Report on Form 10-K for the fiscal year ended December 31, 2016
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30 - 89 Delinquency ratio
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net finance receivables 30 - 89 days past due as a percentage of net finance receivables
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5.25% SFC Notes
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$700 million of 5.25% Senior Notes due 2019 issued by SFC and guaranteed by OMH
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8.25% SFC Notes
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$1.0 billion of 8.25% Senior Notes due 2020 issued by SFC and guaranteed by OMH
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ABS
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asset-backed securities
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Adjusted pretax income (loss)
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a non-GAAP financial measure; income (loss) before income tax expense (benefit) on a Segment Accounting Basis and excludes acquisition-related transaction and integration expenses, net gain on sale of SpringCastle interests, SpringCastle transaction costs, and losses resulting from repurchases and repayments of debt
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AHL
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American Health and Life Insurance Company
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ASC
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Accounting Standards Codification
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ASU
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Accounting Standards Update
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Average debt
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average of debt for each day in the period
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Average net receivables
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average of monthly average net finance receivables (net finance receivables at the beginning and end of each month divided by 2) in the period
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Blackstone
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collectively, BTO Willow Holdings II, L.P. and Blackstone Family Tactical Opportunities Investment Partnership—NQ—ESC L.P.
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CDO
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collateralized debt obligations
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CFPB
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Consumer Financial Protection Bureau
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Citigroup
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CitiFinancial Credit Company
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CMBS
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commercial mortgage-backed securities
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Dodd-Frank Act
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the Dodd-Frank Wall Street Reform and Consumer Protection Act
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Exchange Act
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Securities Exchange Act of 1934, as amended
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FA Loans
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purchased credit impaired finance receivables related to the Fortress Acquisition
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FASB
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Financial Accounting Standards Board
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FHLB
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Federal Home Loan Bank
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FICO score
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a credit score created by Fair Isaac Corporation
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Financial Funding VII LSA
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loan and security agreement entered into on April 13, 2017 with OneMain Financial Funding VII, LLC and third party lenders whereby it can borrow up to a maximum principal balance of $650 million
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Fixed charge ratio
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earnings less income taxes, interest expense, extraordinary items, goodwill impairment, and any amounts related to discontinued operations, divided by the sum of interest expense and any preferred dividends
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Fortress
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Fortress Investment Group LLC
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Fortress Acquisition
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FCFI Acquisition LLC, an affiliate of Fortress, acquired an 80% economic interest for a cash purchase price of $119 million, effective November 30, 2010
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GAAP
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generally accepted accounting principles in the United States of America
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Gross charge-off ratio
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annualized gross charge-offs as a percentage of average net receivables
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Independence
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Independence Holdings, LLC
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Indiana DOI
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Indiana Department of Insurance
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Initial Stockholder
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Springleaf Financial Holdings, LLC
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Term or Abbreviation
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Definition
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Junior Subordinated Debenture
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$350 million aggregate principal amount of 60-year junior subordinated debt issued by SFC under an indenture dated January 22, 2007, by and between SFC and Deutsche Bank Trust Company, as trustee, and guaranteed by OMH
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Lendmark Sale
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the sale of 127 Springleaf branches to Lendmark Financial Service, LLC, effective April 30, 2016
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LIBOR
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London Interbank Offered Rate
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Logan Circle
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Logan Circle Partners, L.P.
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Merit
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Merit Life Insurance Co.
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Nationstar
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Nationstar Mortgage LLC
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Net charge-off ratio
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annualized net charge-offs as a percentage of average net receivables
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Net interest income
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interest income less interest expense
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NRZ
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New Residential Investment Corp.
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ODART
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OneMain Direct Auto Receivables Trust
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OM Loans
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purchased credit impaired personal loans acquired in the OneMain Acquisition
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OMFH
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OneMain Financial Holdings, LLC
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OMFH Indenture
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Indenture entered into on December 11, 2014, as amended or supplemented from time to time, by OMFH and certain of its subsidiaries in connection with the issuance of the OMFH Notes
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OMFH Notes
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collectively, $700 million aggregate principal amount of 6.75% Senior Notes due 2019 and $800 million in aggregate principal amount of 7.25% Senior Notes due 2021
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OMFH Supplemental Indenture
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supplemental indenture dated as of November 8, 2016, to the OMFH Indenture
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OMFIT
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OneMain Financial Issuance Trust
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OMH
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OneMain Holdings, Inc.
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OneMain
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OMFH, collectively with its subsidiaries
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OneMain Acquisition
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Acquisition of OneMain from CitiFinancial Credit Company, effective November 1, 2015
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Other SFC Notes
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collectively, approximately $5.2 billion aggregate principal amount of senior notes, on a senior unsecured basis, and the Junior Subordinated Debenture, on a junior subordinated basis, issued by SFC and guaranteed by OMH
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Recovery ratio
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annualized recoveries on net charge-offs as a percentage of average net receivables
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retail sales finance
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collectively, retail sales contracts and revolving retail accounts
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RMBS
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residential mortgage-backed securities
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RSAs
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restricted stock awards
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RSUs
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restricted stock units
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SCP Loans
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purchased credit impaired loans acquired through the SpringCastle Joint Venture
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Segment Accounting Basis
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a basis used to report the operating results of our segments, which reflects our allocation methodologies for certain costs and excludes the impact of applying purchase accounting
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Settlement Agreement
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a Settlement Agreement with the U.S. Department of Justice entered into by OMH and certain of its subsidiaries on November 13, 2015, in connection with the OneMain Acquisition
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SFC
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Springleaf Finance Corporation
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SFC Base Indenture
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Indenture dated as of December 3, 2014
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SFC First Supplemental Indenture
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supplemental indenture dated as of December 3, 2014, to the SFC Base Indenture
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SFC Guaranty Agreements
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agreements entered into on December 30, 2013 by OMH whereby it agreed to fully and unconditionally guarantee the payments of principal, premium (if any) and interest on the Other SFC Notes
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SFC Second Supplemental Indenture
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supplemental indenture dated as of April 11, 2016, to the SFC Base Indenture
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SFC Trust Guaranty Agreement
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agreement entered into on December 30, 2013 by OMH whereby it agreed to fully and unconditionally guarantee the related payment obligations under the trust preferred securities in connection with the Junior Subordinated Debenture
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Term or Abbreviation
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Definition
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SFI
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Springleaf Finance, Inc.
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SLFT
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Springleaf Funding Trust
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SpringCastle Interests Sale
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the March 31, 2016 sale by SpringCastle Holdings, LLC and Springleaf Acquisition Corporation of the equity interest in the SpringCastle Joint Venture
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SpringCastle Joint Venture
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joint venture among SpringCastle America, LLC, SpringCastle Credit, LLC, SpringCastle Finance, LLC and SpringCastle Acquisition LLC in which SpringCastle Holdings, LLC previously owned a 47% equity interest in each of SpringCastle America, LLC, SpringCastle Credit, LLC and SpringCastle Finance, LLC and Springleaf Acquisition Corporation previously owned a 47% equity interest in SpringCastle Acquisition LLC
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SpringCastle Portfolio
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loans acquired through the SpringCastle Joint Venture
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Springleaf
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OMH and its subsidiaries (other than OneMain)
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Tangible equity
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total equity less accumulated other comprehensive income or loss
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Tangible managed assets
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total assets less goodwill and other intangible assets
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TDR finance receivables
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troubled debt restructured finance receivables
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Texas DOI
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Texas Department of Insurance
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Triton
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Triton Insurance Company
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Trust preferred securities
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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
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UK
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United Kingdom
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UPB
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unpaid principal balance
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VFN
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variable funding notes
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VIEs
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variable interest entities
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Weighted average interest rate
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annualized interest expense as a percentage of average debt
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Wilmington
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Wilmington Trust, National Association
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Yield
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annualized finance charges as a percentage of average net receivables
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Yosemite
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Yosemite Insurance Company
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(dollars in millions, except par value amount)
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March 31,
2017 |
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December 31,
2016 |
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Assets
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Cash and cash equivalents
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$
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787
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$
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579
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Investment securities
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1,755
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1,764
|
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Net finance receivables:
|
|
|
|
|
|
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Personal loans (includes loans of consolidated VIEs of $9.1 billion in 2017 and $9.5 billion in 2016)
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13,240
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13,577
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Real estate loans
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139
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|
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144
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Retail sales finance
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9
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|
|
11
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Net finance receivables
|
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13,388
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|
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13,732
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Unearned insurance premium and claim reserves
|
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(558
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)
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(586
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)
|
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Allowance for finance receivable losses (includes allowance of consolidated VIEs of $471 million in 2017 and $501 million in 2016)
|
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(666
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)
|
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(689
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)
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Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses
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12,164
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12,457
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Finance receivables held for sale
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148
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153
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Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $526 million in 2017 and $552 million in 2016)
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558
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568
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Goodwill
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1,422
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1,422
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Other intangible assets
|
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477
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|
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492
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Other assets
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662
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688
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Total assets
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$
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17,973
|
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$
|
18,123
|
|
|
|
|
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Liabilities and Shareholders’ Equity
|
|
|
|
|
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Long-term debt (includes debt of consolidated VIEs of $7.9 billion in 2017 and $8.2 billion in 2016)
|
|
$
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13,679
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|
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$
|
13,959
|
|
Insurance claims and policyholder liabilities
|
|
749
|
|
|
757
|
|
||
Deferred and accrued taxes
|
|
8
|
|
|
9
|
|
||
Other liabilities (includes other liabilities of consolidated VIEs of $12 million in 2017 and 2016)
|
|
432
|
|
|
332
|
|
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Total liabilities
|
|
14,868
|
|
|
15,057
|
|
||
Commitments and contingent liabilities (Note 14)
|
|
|
|
|
|
|||
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|
||||
Shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, par value $.01 per share; 2,000,000,000 shares authorized, 135,301,202 and 134,867,868 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively
|
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
|
1,550
|
|
|
1,548
|
|
||
Accumulated other comprehensive loss
|
|
(2
|
)
|
|
(6
|
)
|
||
Retained earnings
|
|
1,556
|
|
|
1,523
|
|
||
Total shareholders’ equity
|
|
3,105
|
|
|
3,066
|
|
||
|
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
|
$
|
17,973
|
|
|
$
|
18,123
|
|
(dollars in millions, except per share amounts)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Interest income:
|
|
|
|
|
||||
Finance charges
|
|
$
|
756
|
|
|
$
|
785
|
|
Finance receivables held for sale originated as held for investment
|
|
3
|
|
|
46
|
|
||
Total interest income
|
|
759
|
|
|
831
|
|
||
|
|
|
|
|
||||
Interest expense
|
|
202
|
|
|
226
|
|
||
|
|
|
|
|
||||
Net interest income
|
|
557
|
|
|
605
|
|
||
|
|
|
|
|
||||
Provision for finance receivable losses
|
|
245
|
|
|
197
|
|
||
|
|
|
|
|
||||
Net interest income after provision for finance receivable losses
|
|
312
|
|
|
408
|
|
||
|
|
|
|
|
||||
Other revenues:
|
|
|
|
|
|
|
||
Insurance
|
|
103
|
|
|
114
|
|
||
Investment
|
|
19
|
|
|
20
|
|
||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
167
|
|
||
Other
|
|
19
|
|
|
2
|
|
||
Total other revenues
|
|
141
|
|
|
303
|
|
||
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|
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Other expenses:
|
|
|
|
|
|
|
||
Operating expenses:
|
|
|
|
|
|
|
||
Salaries and benefits
|
|
186
|
|
|
214
|
|
||
Acquisition-related transaction and integration expenses
|
|
23
|
|
|
33
|
|
||
Other operating expenses
|
|
142
|
|
|
167
|
|
||
Insurance policy benefits and claims
|
|
45
|
|
|
45
|
|
||
Total other expenses
|
|
396
|
|
|
459
|
|
||
|
|
|
|
|
||||
Income before income taxes
|
|
57
|
|
|
252
|
|
||
|
|
|
|
|
||||
Income taxes
|
|
24
|
|
|
87
|
|
||
|
|
|
|
|
||||
Net income
|
|
33
|
|
|
165
|
|
||
|
|
|
|
|
||||
Net income attributable to non-controlling interests
|
|
—
|
|
|
28
|
|
||
|
|
|
|
|
||||
Net income attributable to OneMain Holdings, Inc.
|
|
$
|
33
|
|
|
$
|
137
|
|
|
|
|
|
|
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Share Data:
|
|
|
|
|
|
|
||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
||
Basic
|
|
135,218,586
|
|
|
134,694,759
|
|
||
Diluted
|
|
135,573,167
|
|
|
134,907,748
|
|
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Earnings per share:
|
|
|
|
|
|
|
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Basic
|
|
$
|
0.25
|
|
|
$
|
1.02
|
|
Diluted
|
|
$
|
0.25
|
|
|
$
|
1.01
|
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Net income
|
|
$
|
33
|
|
|
$
|
165
|
|
|
|
|
|
|
||||
Other comprehensive income:
|
|
|
|
|
|
|
||
Net change in unrealized gains on non-credit impaired available-for-sale securities
|
|
10
|
|
|
27
|
|
||
Foreign currency translation adjustments
|
|
—
|
|
|
6
|
|
||
Income tax effect:
|
|
|
|
|
|
|
||
Net unrealized gains on non-credit impaired available-for-sale securities
|
|
(3
|
)
|
|
(10
|
)
|
||
Foreign currency translation adjustments
|
|
—
|
|
|
(2
|
)
|
||
Other comprehensive income, net of tax, before reclassification adjustments
|
|
7
|
|
|
21
|
|
||
Reclassification adjustments included in net income:
|
|
|
|
|
|
|
||
Net realized gains on available-for-sale securities
|
|
(4
|
)
|
|
(2
|
)
|
||
Income tax effect:
|
|
|
|
|
|
|
||
Net realized gains on available-for-sale securities
|
|
1
|
|
|
1
|
|
||
Reclassification adjustments included in net income, net of tax
|
|
(3
|
)
|
|
(1
|
)
|
||
Other comprehensive income, net of tax
|
|
4
|
|
|
20
|
|
||
|
|
|
|
|
||||
Comprehensive income
|
|
37
|
|
|
185
|
|
||
|
|
|
|
|
||||
Comprehensive income attributable to non-controlling interests
|
|
—
|
|
|
28
|
|
||
|
|
|
|
|
||||
Comprehensive income attributable to OneMain Holdings, Inc.
|
|
$
|
37
|
|
|
$
|
157
|
|
|
|
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, 2017
|
|
$
|
1
|
|
|
$
|
1,548
|
|
|
$
|
(6
|
)
|
|
$
|
1,523
|
|
|
$
|
3,066
|
|
|
$
|
—
|
|
|
$
|
3,066
|
|
Share-based compensation expense, net of forfeitures
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||||
Withholding tax on share-based compensation
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
33
|
|
|
—
|
|
|
33
|
|
|||||||
Balance, March 31, 2017
|
|
$
|
1
|
|
|
$
|
1,550
|
|
|
$
|
(2
|
)
|
|
$
|
1,556
|
|
|
$
|
3,105
|
|
|
$
|
—
|
|
|
$
|
3,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, January 1, 2016
|
|
$
|
1
|
|
|
$
|
1,533
|
|
|
$
|
(33
|
)
|
|
$
|
1,308
|
|
|
$
|
2,809
|
|
|
$
|
(79
|
)
|
|
$
|
2,730
|
|
Share-based compensation expense, net of forfeitures
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||||
Excess tax benefit from share-based compensation
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||||
Withholding tax on share-based compensation
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||||
Change in non-controlling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Distributions declared to joint venture partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
|||||||
Sale of equity interests in SpringCastle joint venture
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
69
|
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
137
|
|
|
137
|
|
|
28
|
|
|
165
|
|
|||||||
Balance, March 31, 2016
|
|
$
|
1
|
|
|
$
|
1,537
|
|
|
$
|
(13
|
)
|
|
$
|
1,445
|
|
|
$
|
2,970
|
|
|
$
|
—
|
|
|
$
|
2,970
|
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
33
|
|
|
$
|
165
|
|
Reconciling adjustments:
|
|
|
|
|
|
|
||
Provision for finance receivable losses
|
|
245
|
|
|
197
|
|
||
Depreciation and amortization
|
|
98
|
|
|
151
|
|
||
Deferred income tax charge (benefit)
|
|
25
|
|
|
(43
|
)
|
||
Share-based compensation expense, net of forfeitures
|
|
7
|
|
|
7
|
|
||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
(167
|
)
|
||
Other
|
|
(2
|
)
|
|
(1
|
)
|
||
Cash flows due to changes in:
|
|
|
|
|
|
|
||
Other assets and other liabilities
|
|
75
|
|
|
51
|
|
||
Insurance claims and policyholder liabilities
|
|
(38
|
)
|
|
(24
|
)
|
||
Taxes receivable and payable
|
|
(3
|
)
|
|
67
|
|
||
Accrued interest and finance charges
|
|
4
|
|
|
12
|
|
||
Other, net
|
|
—
|
|
|
1
|
|
||
Net cash provided by operating activities
|
|
444
|
|
|
416
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Net principal collections (originations) of finance receivables held for investment and held for sale
|
|
30
|
|
|
(125
|
)
|
||
Proceeds from sale of SpringCastle interests, net of restricted cash released
|
|
—
|
|
|
26
|
|
||
Cash received from CitiFinancial Credit Company
|
|
—
|
|
|
23
|
|
||
Available-for-sale securities purchased
|
|
(132
|
)
|
|
(154
|
)
|
||
Trading and other securities purchased
|
|
—
|
|
|
(1
|
)
|
||
Available-for-sale securities called, sold, and matured
|
|
162
|
|
|
175
|
|
||
Trading and other securities called, sold, and matured
|
|
2
|
|
|
13
|
|
||
Other, net
|
|
(3
|
)
|
|
(2
|
)
|
||
Net cash provided by (used for) investing activities
|
|
59
|
|
|
(45
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt, net of commissions
|
|
366
|
|
|
1,673
|
|
||
Repayments of long-term debt
|
|
(666
|
)
|
|
(2,335
|
)
|
||
Distributions to joint venture partners
|
|
—
|
|
|
(18
|
)
|
||
Excess tax benefit from share-based compensation
|
|
—
|
|
|
2
|
|
||
Withholding tax on share-based compensation
|
|
(5
|
)
|
|
(5
|
)
|
||
Net cash used for financing activities
|
|
(305
|
)
|
|
(683
|
)
|
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)
|
|
|
|
|
||||
|
|
|
|
|
||||
(dollars in millions)
|
|
At or for the
Three Months Ended March 31, |
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
1
|
|
||
|
|
|
|
|
||||
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents
|
|
198
|
|
|
(311
|
)
|
||
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period
|
|
1,147
|
|
|
1,615
|
|
||
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period
|
|
$
|
1,345
|
|
|
$
|
1,304
|
|
|
|
|
|
|
||||
Supplemental cash flow information
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
787
|
|
|
$
|
716
|
|
Restricted cash and restricted cash equivalents
|
|
558
|
|
|
588
|
|
||
Total cash and cash equivalents and restricted cash and restricted cash equivalents
|
|
$
|
1,345
|
|
|
$
|
1,304
|
|
|
|
|
|
|
||||
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)
|
|
$
|
—
|
|
|
$
|
1,608
|
|
Transfer of finance receivables to real estate owned
|
|
2
|
|
|
2
|
|
||
Net unsettled investment security purchases
|
|
(19
|
)
|
|
—
|
|
•
|
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, 2017
, we had over
2.1 million
personal loans representing
$13.2 billion
of net finance receivables, compared to
2.2 million
personal loans totaling
$13.6 billion
at
December 31, 2016
.
|
•
|
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. 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 originating real estate loans in January of 2012, our real estate loans have been 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 in a liquidating status.
|
(dollars in millions)
|
|
Personal
Loans |
|
Real Estate
Loans
|
|
Retail
Sales Finance |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross receivables *
|
|
$
|
14,856
|
|
|
$
|
137
|
|
|
$
|
10
|
|
|
$
|
15,003
|
|
Unearned finance charges and points and fees
|
|
(1,843
|
)
|
|
1
|
|
|
(1
|
)
|
|
(1,843
|
)
|
||||
Accrued finance charges
|
|
144
|
|
|
1
|
|
|
—
|
|
|
145
|
|
||||
Deferred origination costs
|
|
83
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||||
Total
|
|
$
|
13,240
|
|
|
$
|
139
|
|
|
$
|
9
|
|
|
$
|
13,388
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross receivables *
|
|
$
|
15,405
|
|
|
$
|
142
|
|
|
$
|
12
|
|
|
$
|
15,559
|
|
Unearned finance charges and points and fees
|
|
(2,062
|
)
|
|
1
|
|
|
(1
|
)
|
|
(2,062
|
)
|
||||
Accrued finance charges
|
|
151
|
|
|
1
|
|
|
—
|
|
|
152
|
|
||||
Deferred origination costs
|
|
83
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||||
Total
|
|
$
|
13,577
|
|
|
$
|
144
|
|
|
$
|
11
|
|
|
$
|
13,732
|
|
*
|
Gross receivables are defined as follows:
|
•
|
Finance receivables purchased as a performing receivable
— gross finance receivables equal the 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 OneMain Acquisition and the Fortress Acquisition
— gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts;
|
•
|
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; and
|
•
|
TDR finance receivables
— gross finance receivables equal the 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 previously purchased as a performing receivable.
|
(dollars in millions)
|
|
Personal
Loans |
|
Real Estate
Loans
|
|
Retail
Sales Finance |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Performing
|
|
|
|
|
|
|
|
|
||||||||
Current
|
|
$
|
12,652
|
|
|
$
|
102
|
|
|
$
|
9
|
|
|
$
|
12,763
|
|
30-59 days past due
|
|
164
|
|
|
8
|
|
|
—
|
|
|
172
|
|
||||
60-89 days past due
|
|
120
|
|
|
4
|
|
|
—
|
|
|
124
|
|
||||
Total performing
|
|
12,936
|
|
|
114
|
|
|
9
|
|
|
13,059
|
|
||||
Nonperforming
|
|
|
|
|
|
|
|
|
||||||||
90-179 days past due
|
|
296
|
|
|
5
|
|
|
—
|
|
|
301
|
|
||||
180 days or more past due
|
|
8
|
|
|
20
|
|
|
—
|
|
|
28
|
|
||||
Total nonperforming
|
|
304
|
|
|
25
|
|
|
—
|
|
|
329
|
|
||||
Total
|
|
$
|
13,240
|
|
|
$
|
139
|
|
|
$
|
9
|
|
|
$
|
13,388
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Performing
|
|
|
|
|
|
|
|
|
||||||||
Current
|
|
$
|
12,920
|
|
|
$
|
102
|
|
|
$
|
11
|
|
|
$
|
13,033
|
|
30-59 days past due
|
|
174
|
|
|
9
|
|
|
—
|
|
|
183
|
|
||||
60-89 days past due
|
|
130
|
|
|
4
|
|
|
—
|
|
|
134
|
|
||||
Total performing
|
|
13,224
|
|
|
115
|
|
|
11
|
|
|
13,350
|
|
||||
Nonperforming
|
|
|
|
|
|
|
|
|
||||||||
90-179 days past due
|
|
349
|
|
|
8
|
|
|
—
|
|
|
357
|
|
||||
180 days or more past due
|
|
4
|
|
|
21
|
|
|
—
|
|
|
25
|
|
||||
Total nonperforming
|
|
353
|
|
|
29
|
|
|
—
|
|
|
382
|
|
||||
Total
|
|
$
|
13,577
|
|
|
$
|
144
|
|
|
$
|
11
|
|
|
$
|
13,732
|
|
(dollars in millions)
|
|
OM Loans
|
|
FA Loans (a)
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
||||
Carrying amount, net of allowance
|
|
$
|
273
|
|
|
$
|
68
|
|
|
$
|
341
|
|
Outstanding balance (b)
|
|
379
|
|
|
105
|
|
|
484
|
|
|||
Allowance for purchased credit impaired finance receivable losses
|
|
29
|
|
|
8
|
|
|
37
|
|
|||
|
|
|
|
|
|
|
||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||
Carrying amount, net of allowance
|
|
$
|
324
|
|
|
$
|
70
|
|
|
$
|
394
|
|
Outstanding balance (b)
|
|
444
|
|
|
107
|
|
|
551
|
|
|||
Allowance for purchased credit impaired finance receivable losses
|
|
29
|
|
|
8
|
|
|
37
|
|
(a)
|
Purchased credit impaired FA Loans held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
March 31,
2017 |
|
December 31, 2016
|
||||
|
|
|
|
|
||||
Carrying amount
|
|
$
|
53
|
|
|
$
|
54
|
|
Outstanding balance
|
|
81
|
|
|
83
|
|
(b)
|
Outstanding balance is defined as UPB of the loans with a net carrying amount.
|
(dollars in millions)
|
|
OM Loans
|
|
SCP Loans
|
|
FA Loans
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
119
|
|
Accretion (a)
|
|
(11
|
)
|
|
—
|
|
|
(1
|
)
|
|
(12
|
)
|
||||
Balance at end of period
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
59
|
|
|
$
|
107
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
151
|
|
|
$
|
375
|
|
|
$
|
66
|
|
|
$
|
592
|
|
Accretion (a)
|
|
(24
|
)
|
|
(16
|
)
|
|
(2
|
)
|
|
(42
|
)
|
||||
Reclassifications from nonaccretable difference (b)
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
||||
Transfer due to finance receivables sold
|
|
—
|
|
|
(359
|
)
|
|
—
|
|
|
(359
|
)
|
||||
Other (c)
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||
Balance at end of period
|
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
74
|
|
|
$
|
178
|
|
(a)
|
Accretion on our purchased credit impaired FA Loans held for sale included in the table above were immaterial.
|
(b)
|
Reclassifications from nonaccretable difference represents the increases in accretable yield resulting from higher estimated undiscounted cash flows.
|
(c)
|
Other reflects a measurement period adjustment in the first quarter of 2016 based on a change in the expected cash flows in the purchase credit impaired portfolio related to the OneMain Acquisition. The measurement period adjustment created a decrease of
$23 million
to the beginning balance of the OM Loans accretable yield.
|
(dollars in millions)
|
|
Personal
Loans
|
|
Real Estate
Loans * |
|
Total
|
||||||
|
|
|
|
|
|
|
|
|||||
March 31, 2017
|
|
|
|
|
|
|
|
|||||
TDR gross finance receivables
|
|
$
|
163
|
|
|
$
|
133
|
|
|
$
|
296
|
|
TDR net finance receivables
|
|
164
|
|
|
134
|
|
|
298
|
|
|||
Allowance for TDR finance receivable losses
|
|
73
|
|
|
11
|
|
|
84
|
|
|||
|
|
|
|
|
|
|
|
|||||
December 31, 2016
|
|
|
|
|
|
|
|
|||||
TDR gross finance receivables
|
|
$
|
151
|
|
|
$
|
133
|
|
|
$
|
284
|
|
TDR net finance receivables
|
|
152
|
|
|
134
|
|
|
286
|
|
|||
Allowance for TDR finance receivable losses
|
|
69
|
|
|
11
|
|
|
80
|
|
*
|
TDR real estate loans held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
March 31,
2017 |
|
December 31, 2016
|
||||
|
|
|
|
|
|
|||
TDR gross finance receivables
|
|
$
|
88
|
|
|
$
|
89
|
|
TDR net finance receivables
|
|
88
|
|
|
90
|
|
(dollars in millions)
|
|
Personal
Loans *
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans *
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
TDR average net receivables
|
|
$
|
153
|
|
|
$
|
—
|
|
|
$
|
134
|
|
|
$
|
287
|
|
TDR finance charges recognized
|
|
6
|
|
|
—
|
|
|
2
|
|
|
8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
TDR average net receivables
|
|
$
|
63
|
|
|
$
|
11
|
|
|
$
|
201
|
|
|
$
|
275
|
|
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, 2017
|
|
|
|
|
|
|
||||||
TDR average net receivables
|
|
$
|
—
|
|
|
$
|
89
|
|
|
$
|
89
|
|
TDR finance charges recognized
|
|
—
|
|
|
1
|
|
|
1
|
|
|||
|
|
|
|
|
|
|
||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
||||||
TDR average net receivables
|
|
$
|
2
|
|
|
$
|
92
|
|
|
$
|
94
|
|
TDR finance charges recognized
|
|
—
|
|
|
1
|
|
|
1
|
|
(dollars in millions)
|
|
Personal
Loans (a)
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans (a) |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Pre-modification TDR net finance receivables
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
47
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
|
|
|
|
||||||||
Rate reduction
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
42
|
|
Other (b)
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Total post-modification TDR net finance receivables
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
46
|
|
Number of TDR accounts
|
|
6,438
|
|
|
—
|
|
|
64
|
|
|
6,502
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
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
|
|
(a)
|
TDR finance receivables held for sale included in the table above were immaterial.
|
(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, 2017
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables (b)
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
13
|
|
Number of TDR accounts
|
|
1,793
|
|
|
—
|
|
|
6
|
|
|
1,799
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables (b) (c)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Number of TDR accounts
|
|
400
|
|
|
19
|
|
|
20
|
|
|
439
|
|
(a)
|
TDR real estate loans held for sale included in the table above that defaulted during the previous 12-month period were less than
$1 million
for the three months ended
March 31, 2017
and
$1 million
for the three months ended
March 31, 2016
.
|
(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.
|
(dollars in millions)
|
|
Personal
Loans |
|
SpringCastle
Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance |
|
Consolidated Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
669
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
689
|
|
Provision for finance receivable losses
|
|
244
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
245
|
|
|||||
Charge-offs
|
|
(296
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(297
|
)
|
|||||
Recoveries
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
Balance at end of period
|
|
$
|
646
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
666
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
541
|
|
|
$
|
4
|
|
|
$
|
46
|
|
|
$
|
1
|
|
|
$
|
592
|
|
Provision for finance receivable losses
|
|
179
|
|
|
14
|
|
|
4
|
|
|
—
|
|
|
197
|
|
|||||
Charge-offs
|
|
(145
|
)
|
|
(17
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(165
|
)
|
|||||
Recoveries
|
|
12
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
16
|
|
|||||
Other *
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Balance at end of period
|
|
$
|
587
|
|
|
$
|
—
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
636
|
|
*
|
Other 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 SpringCastle Interests Sale.
|
(dollars in millions)
|
|
Personal
Loans |
|
Real Estate
Loans
|
|
Retail
Sales Finance |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance for finance receivable losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Collectively evaluated for impairment
|
|
$
|
544
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
545
|
|
Purchased credit impaired finance receivables
|
|
29
|
|
|
8
|
|
|
—
|
|
|
37
|
|
||||
TDR finance receivables
|
|
73
|
|
|
11
|
|
|
—
|
|
|
84
|
|
||||
Total
|
|
$
|
646
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
666
|
|
|
|
|
|
|
|
|
|
|
||||||||
Finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Collectively evaluated for impairment
|
|
$
|
12,774
|
|
|
$
|
70
|
|
|
$
|
9
|
|
|
$
|
12,853
|
|
Purchased credit impaired finance receivables
|
|
302
|
|
|
23
|
|
|
—
|
|
|
325
|
|
||||
TDR finance receivables
|
|
164
|
|
|
46
|
|
|
—
|
|
|
210
|
|
||||
Total
|
|
$
|
13,240
|
|
|
$
|
139
|
|
|
$
|
9
|
|
|
$
|
13,388
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for finance receivable losses as a percentage of finance receivables
|
|
4.88
|
%
|
|
13.70
|
%
|
|
4.72
|
%
|
|
4.97
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance for finance receivable losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Collectively evaluated for impairment
|
|
$
|
571
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
572
|
|
Purchased credit impaired finance receivables
|
|
29
|
|
|
8
|
|
|
—
|
|
|
37
|
|
||||
TDR finance receivables
|
|
69
|
|
|
11
|
|
|
—
|
|
|
80
|
|
||||
Total
|
|
$
|
669
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
689
|
|
|
|
|
|
|
|
|
|
|
||||||||
Finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Collectively evaluated for impairment
|
|
$
|
13,072
|
|
|
$
|
76
|
|
|
$
|
11
|
|
|
$
|
13,159
|
|
Purchased credit impaired finance receivables
|
|
353
|
|
|
24
|
|
|
—
|
|
|
377
|
|
||||
TDR finance receivables
|
|
152
|
|
|
44
|
|
|
—
|
|
|
196
|
|
||||
Total
|
|
$
|
13,577
|
|
|
$
|
144
|
|
|
$
|
11
|
|
|
$
|
13,732
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for finance receivable losses as a percentage of finance receivables
|
|
4.93
|
%
|
|
13.31
|
%
|
|
4.42
|
%
|
|
5.01
|
%
|
(dollars in millions)
|
|
Cost/
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35
|
|
Obligations of states, municipalities, and political subdivisions
|
|
138
|
|
|
1
|
|
|
(1
|
)
|
|
138
|
|
||||
Certificates of deposit and commercial paper
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Non-U.S. government and government sponsored entities
|
|
121
|
|
|
1
|
|
|
—
|
|
|
122
|
|
||||
Corporate debt
|
|
998
|
|
|
10
|
|
|
(5
|
)
|
|
1,003
|
|
||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
RMBS
|
|
100
|
|
|
1
|
|
|
(1
|
)
|
|
100
|
|
||||
CMBS
|
|
105
|
|
|
—
|
|
|
(1
|
)
|
|
104
|
|
||||
CDO/ABS
|
|
114
|
|
|
—
|
|
|
—
|
|
|
114
|
|
||||
Total bonds
|
|
1,616
|
|
|
13
|
|
|
(8
|
)
|
|
1,621
|
|
||||
Preferred stock (a)
|
|
16
|
|
|
—
|
|
|
(1
|
)
|
|
15
|
|
||||
Common stock (a)
|
|
17
|
|
|
1
|
|
|
—
|
|
|
18
|
|
||||
Other long-term investments
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total (b)
|
|
$
|
1,651
|
|
|
$
|
14
|
|
|
$
|
(9
|
)
|
|
$
|
1,656
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31
|
|
Obligations of states, municipalities, and political subdivisions
|
|
145
|
|
|
1
|
|
|
(1
|
)
|
|
145
|
|
||||
Non-U.S. government and government sponsored entities
|
|
119
|
|
|
—
|
|
|
(1
|
)
|
|
118
|
|
||||
Corporate debt
|
|
1,024
|
|
|
8
|
|
|
(7
|
)
|
|
1,025
|
|
||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
RMBS
|
|
101
|
|
|
—
|
|
|
(1
|
)
|
|
100
|
|
||||
CMBS
|
|
109
|
|
|
—
|
|
|
(1
|
)
|
|
108
|
|
||||
CDO/ABS
|
|
102
|
|
|
—
|
|
|
—
|
|
|
102
|
|
||||
Total bonds
|
|
1,631
|
|
|
9
|
|
|
(11
|
)
|
|
1,629
|
|
||||
Preferred stock (a)
|
|
17
|
|
|
—
|
|
|
(1
|
)
|
|
16
|
|
||||
Common stock (a)
|
|
16
|
|
|
1
|
|
|
—
|
|
|
17
|
|
||||
Other long-term investments
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total (b)
|
|
$
|
1,666
|
|
|
$
|
10
|
|
|
$
|
(12
|
)
|
|
$
|
1,664
|
|
(a)
|
The Company employs an income equity strategy targeting investments in stocks with strong current dividend yields. Stocks included have a history of stable or increasing dividend payments.
|
(b)
|
Excludes an immaterial interest in a limited partnership that we account for using the equity method and FHLB common stock of
$1 million
at
March 31, 2017
and
December 31, 2016
, 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, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. government and government sponsored entities
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
—
|
|
Obligations of states, municipalities, and political subdivisions
|
|
62
|
|
|
(1
|
)
|
|
8
|
|
|
—
|
|
|
70
|
|
|
(1
|
)
|
||||||
Non-U.S. government and government sponsored entities
|
|
29
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||||
Corporate debt
|
|
300
|
|
|
(4
|
)
|
|
21
|
|
|
(1
|
)
|
|
321
|
|
|
(5
|
)
|
||||||
RMBS
|
|
56
|
|
|
(1
|
)
|
|
12
|
|
|
—
|
|
|
68
|
|
|
(1
|
)
|
||||||
CMBS
|
|
60
|
|
|
(1
|
)
|
|
6
|
|
|
—
|
|
|
66
|
|
|
(1
|
)
|
||||||
CDO/ABS
|
|
69
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
71
|
|
|
—
|
|
||||||
Total bonds
|
|
596
|
|
|
(7
|
)
|
|
51
|
|
|
(1
|
)
|
|
647
|
|
|
(8
|
)
|
||||||
Preferred stock
|
|
6
|
|
|
—
|
|
|
6
|
|
|
(1
|
)
|
|
12
|
|
|
(1
|
)
|
||||||
Common stock
|
|
5
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||
Total
|
|
$
|
607
|
|
|
$
|
(7
|
)
|
|
$
|
58
|
|
|
$
|
(2
|
)
|
|
$
|
665
|
|
|
$
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. government and government sponsored entities
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
Obligations of states, municipalities, and political subdivisions
|
|
99
|
|
|
(1
|
)
|
|
2
|
|
|
—
|
|
|
101
|
|
|
(1
|
)
|
||||||
Non-U.S. government and government sponsored entities
|
|
55
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
56
|
|
|
(1
|
)
|
||||||
Corporate debt
|
|
416
|
|
|
(6
|
)
|
|
8
|
|
|
(1
|
)
|
|
424
|
|
|
(7
|
)
|
||||||
RMBS
|
|
74
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
75
|
|
|
(1
|
)
|
||||||
CMBS
|
|
66
|
|
|
(1
|
)
|
|
5
|
|
|
—
|
|
|
71
|
|
|
(1
|
)
|
||||||
CDO/ABS
|
|
64
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
67
|
|
|
—
|
|
||||||
Total bonds
|
|
792
|
|
|
(10
|
)
|
|
20
|
|
|
(1
|
)
|
|
812
|
|
|
(11
|
)
|
||||||
Preferred stock
|
|
6
|
|
|
—
|
|
|
8
|
|
|
(1
|
)
|
|
14
|
|
|
(1
|
)
|
||||||
Common stock
|
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||
Total
|
|
$
|
800
|
|
|
$
|
(10
|
)
|
|
$
|
29
|
|
|
$
|
(2
|
)
|
|
$
|
829
|
|
|
$
|
(12
|
)
|
*
|
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,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Proceeds from sales and redemptions
|
|
$
|
113
|
|
|
$
|
113
|
|
|
|
|
|
|
||||
Net realized gains *
|
|
$
|
4
|
|
|
$
|
2
|
|
*
|
Realized losses on available-for-sale securities sold or redeemed during the
three
months ended
March 31, 2017
and
2016
were less than
$1 million
and, therefore, are not quantified in the table above.
|
(dollars in millions)
|
|
Fair
Value
|
|
Amortized
Cost
|
||||
|
|
|
|
|
||||
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
|
|
|
|
|
|
|
||
Due in 1 year or less
|
|
$
|
198
|
|
|
$
|
198
|
|
Due after 1 year through 5 years
|
|
584
|
|
|
582
|
|
||
Due after 5 years through 10 years
|
|
314
|
|
|
310
|
|
||
Due after 10 years
|
|
207
|
|
|
207
|
|
||
Mortgage-backed, asset-backed, and collateralized securities
|
|
318
|
|
|
319
|
|
||
Total
|
|
$
|
1,621
|
|
|
$
|
1,616
|
|
(dollars in millions)
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
|
||||
Fixed maturity other securities:
|
|
|
|
|
|
|
||
Bonds
|
|
|
|
|
|
|
||
Non-U.S. government and government sponsored entities
|
|
$
|
1
|
|
|
$
|
1
|
|
Corporate debt
|
|
84
|
|
|
85
|
|
||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|||
RMBS
|
|
1
|
|
|
1
|
|
||
CMBS
|
|
1
|
|
|
1
|
|
||
CDO/ABS
|
|
5
|
|
|
5
|
|
||
Total bonds
|
|
92
|
|
|
93
|
|
||
Preferred stock
|
|
6
|
|
|
6
|
|
||
Total
|
|
$
|
98
|
|
|
$
|
99
|
|
|
|
Senior Debt
|
|
|
|
|
||||||||||||||
(dollars in millions)
|
|
Securitizations
|
|
Revolving
Conduit Facilities |
|
Medium
Term
Notes
|
|
Junior
Subordinated
Debt
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rates (a)
|
|
2.04% - 6.94%
|
|
|
2.59
|
%
|
|
5.25% - 8.25%
|
|
|
2.77
|
%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Second quarter 2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Third quarter 2017
|
|
—
|
|
|
—
|
|
|
257
|
|
|
—
|
|
|
257
|
|
|||||
Fourth quarter 2017
|
|
—
|
|
|
—
|
|
|
1,030
|
|
|
—
|
|
|
1,030
|
|
|||||
First quarter 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Remainder of 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2019
|
|
—
|
|
|
—
|
|
|
1,396
|
|
|
—
|
|
|
1,396
|
|
|||||
2020
|
|
—
|
|
|
—
|
|
|
1,299
|
|
|
—
|
|
|
1,299
|
|
|||||
2021
|
|
—
|
|
|
—
|
|
|
1,449
|
|
|
—
|
|
|
1,449
|
|
|||||
2022-2067
|
|
—
|
|
|
—
|
|
|
300
|
|
|
350
|
|
|
650
|
|
|||||
Securitizations (b)
|
|
7,951
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,951
|
|
|||||
Revolving conduit facilities (b)
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Total principal maturities
|
|
$
|
7,951
|
|
|
$
|
10
|
|
|
$
|
5,731
|
|
|
$
|
350
|
|
|
$
|
14,042
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total carrying amount
|
|
$
|
7,933
|
|
|
$
|
10
|
|
|
$
|
5,564
|
|
|
$
|
172
|
|
|
$
|
13,679
|
|
Debt issuance costs (c)
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
(33
|
)
|
(a)
|
The interest rates shown are the range of contractual rates in effect at
March 31, 2017
. Effective January 16, 2017, the interest rate on the UPB of the Junior Subordinated Debenture became a variable floating rate (determined quarterly) equal to 3-month LIBOR plus
1.75%
, or
2.77%
as of
March 31, 2017
. Prior to January 16, 2017, the interest rate on the UPB of the Junior Subordinated Debenture was a fixed rate of
6.00%
.
|
(b)
|
Securitizations and borrowings under revolving conduit facilities are not included in the above maturities by period due to their variable monthly repayments. See Note
9
for further information on our long-term debt associated with securitizations and revolving conduit facilities.
|
(c)
|
Debt issuance costs are reported as a direct deduction from long-term debt, with the exception of debt issuance costs associated with our revolving conduit facilities, which totaled
$13 million
at
March 31, 2017
and are reported in other assets.
|
(dollars in millions)
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
2
|
|
|
$
|
3
|
|
Finance receivables:
|
|
|
|
|
|
|
||
Personal loans
|
|
9,109
|
|
|
9,509
|
|
||
Allowance for finance receivable losses
|
|
471
|
|
|
501
|
|
||
Restricted cash and restricted cash equivalents
|
|
526
|
|
|
552
|
|
||
Other assets
|
|
13
|
|
|
14
|
|
||
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||
Long-term debt
|
|
$
|
7,944
|
|
|
$
|
8,240
|
|
Other liabilities
|
|
14
|
|
|
16
|
|
(dollars in millions)
|
|
Current
Note Amounts Outstanding |
|
Current
Weighted Average
Interest Rate
|
|
Original
Revolving
Period
|
||||
|
|
|
|
|
|
|
||||
Consumer Securitizations:
|
|
|
|
|
|
|
||||
SLFT 2015-A (a)
|
|
$
|
1,163
|
|
|
3.47
|
%
|
|
3 years
|
|
SLFT 2015-B (b)
|
|
314
|
|
|
3.78
|
%
|
|
5 years
|
|
|
SLFT 2016-A (c)
|
|
500
|
|
|
3.10
|
%
|
|
2 years
|
|
|
OMFIT 2014-1 (d)
|
|
264
|
|
|
2.74
|
%
|
|
2 years
|
|
|
OMFIT 2014-2 (e)
|
|
682
|
|
|
3.26
|
%
|
|
2 years
|
|
|
OMFIT 2015-1 (f)
|
|
1,229
|
|
|
3.74
|
%
|
|
3 years
|
|
|
OMFIT 2015-2 (g)
|
|
1,250
|
|
|
3.07
|
%
|
|
2 years
|
|
|
OMFIT 2015-3 (h)
|
|
293
|
|
|
4.21
|
%
|
|
5 years
|
|
|
OMFIT 2016-1 (i)
|
|
459
|
|
|
4.01
|
%
|
|
3 years
|
|
|
OMFIT 2016-2 (j)
|
|
816
|
|
|
4.50
|
%
|
|
2 years
|
|
|
OMFIT 2016-3 (k)
|
|
317
|
|
|
4.33
|
%
|
|
5 years
|
|
|
Total consumer securitizations
|
|
7,287
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
||||
Auto Securitization:
|
|
|
|
|
|
|
||||
ODART 2016-1 (l)
|
|
396
|
|
|
2.45
|
%
|
|
—
|
|
|
ODART 2017-1 (m)
|
|
268
|
|
|
2.61
|
%
|
|
1 year
|
|
|
Total auto securitizations
|
|
664
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
||||
Total secured structured financings
|
|
$
|
7,951
|
|
|
|
|
|
(a)
|
SLFT 2015-A Securitization.
On February 26, 2015, we issued
$1.2 billion
of notes backed by personal loans. The notes mature in November 2024.
|
(b)
|
SLFT 2015-B Securitization.
On April 7, 2015, we issued
$314 million
of notes backed by personal loans. The notes mature in May 2028.
|
(c)
|
SLFT 2016-A Securitization.
On December 14, 2016, we issued
$532 million
of notes backed by personal loans. The notes mature in November 2029. We initially retained
$32 million
of the asset-backed notes.
|
(d)
|
OMFIT 2014-1 Securitization.
On April 17, 2014, we issued
$760 million
of notes backed by personal loans. The notes mature in June 2024.
|
(e)
|
OMFIT 2014-2 Securitization.
On July 30, 2014, we issued
$1.2 billion
of notes backed by personal loans. The notes mature in September 2024.
|
(f)
|
OMFIT 2015-1 Securitization.
On February 5, 2015, we issued
$1.2 billion
of notes backed by personal loans. The notes mature in March 2026.
|
(g)
|
OMFIT 2015-2 Securitization.
On May 21, 2015, we issued
$1.3 billion
of notes backed by personal loans. The notes mature in July 2025.
|
(h)
|
OMFIT 2015-3 Securitization.
On September 29, 2015, we issued
$293 million
of notes backed by personal loans. The notes mature in November 2028.
|
(i)
|
OMFIT 2016-1 Securitization.
On February 10, 2016, we issued
$500 million
of notes backed by personal loans. The notes mature in February 2029. We initially retained
$86 million
of the Class C and Class D notes. On May 17, 2016,
$45 million
of the notes represented by Class C were sold.
|
(j)
|
OMFIT 2016-2 Securitization.
On March 23, 2016, we issued
$890 million
of notes backed by personal loans. The notes mature in March 2028. We initially retained
$157 million
of the Class C and Class D notes. On July 25, 2016,
$83 million
of the notes represented by Class C were sold.
|
(k)
|
OMFIT 2016-3 Securitization.
On June 7, 2016, we issued
$350 million
of notes backed by personal loans. The notes mature in June 2031. We initially retained
$33 million
of the Class D notes.
|
(l)
|
ODART 2016-1 Securitization.
On July 19, 2016, we issued
$754 million
of notes backed by direct auto loans. The maturity dates of the notes occur in January 2021 for the Class A notes, May 2021 for the Class B notes, September 2021 for the Class C notes and February 2023 for the Class D notes. We initially retained
$54 million
of the Class D notes.
|
(m)
|
ODART 2017-1 Securitization.
On February 1, 2017, we issued
$300 million
of notes backed by direct auto loans. The maturity dates of the notes occur in October 2020 for the Class A notes, June 2021 for the Class B notes, August 2021 for the Class C notes, December 2021 for the Class D notes, and January 2025 for the Class E notes. We initially retained
$11 million
of the Class A notes,
$1 million
of each of the Class B, Class C, and Class D notes, and the entire
$18 million
of the Class E notes.
|
(dollar in millions)
|
|
Note Maximum
Balance |
|
Amount
Drawn |
|
Revolving
Period End |
||||
|
|
|
|
|
|
|
||||
Midbrook 2013-VFN1 Trust (a)
|
|
$
|
50
|
|
|
$
|
—
|
|
|
February 2018
|
Sumner Brook 2013-VFN1 Trust
|
|
350
|
|
|
10
|
|
|
January 2018
|
||
Springleaf 2013-VFN1 Trust
|
|
850
|
|
|
—
|
|
|
January 2018
|
||
Whitford Brook 2014-VFN1 Trust
|
|
250
|
|
|
—
|
|
|
June 2018
|
||
First Avenue Funding LLC
|
|
250
|
|
|
—
|
|
|
June 2018
|
||
Second Avenue Funding LLC
|
|
250
|
|
|
—
|
|
|
June 2018
|
||
Seine River Funding, LLC
|
|
500
|
|
|
—
|
|
|
December 2019
|
||
OneMain Financial B3 Warehouse Trust
|
|
350
|
|
|
—
|
|
|
January 2019
|
||
OneMain Financial B4 Warehouse Trust
|
|
750
|
|
|
—
|
|
|
February 2019
|
||
OneMain Financial B5 Warehouse Trust (b)
|
|
450
|
|
|
—
|
|
|
February 2019
|
||
OneMain Financial B6 Warehouse Trust
|
|
600
|
|
|
—
|
|
|
February 2019
|
||
Total
|
|
$
|
4,650
|
|
|
$
|
10
|
|
|
|
(a)
|
Midbrook 2013-VFN1 Trust.
On February 24, 2017, the maximum principal balance decreased from
$100 million
to
$50 million
. See Note
18
for information on the subsequent termination of the note purchase agreement with Midbrook 2013-VFN1 Trust.
|
(b)
|
OneMain Financial B5 Warehouse Trust.
See Note
18
for information on the subsequent termination of the note purchase agreement with OneMain Financial B5 Warehouse Trust.
|
|
|
At or for the
Three Months Ended March 31, |
||||||
(dollars in millions)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
158
|
|
|
$
|
177
|
|
Less reinsurance recoverables
|
|
(26
|
)
|
|
(26
|
)
|
||
Net balance at beginning of period
|
|
132
|
|
|
151
|
|
||
Additions for losses and loss adjustment expenses incurred to:
|
|
|
|
|
||||
Current year
|
|
52
|
|
|
64
|
|
||
Prior years *
|
|
(4
|
)
|
|
(18
|
)
|
||
Total
|
|
48
|
|
|
46
|
|
||
Reductions for losses and loss adjustment expenses paid related to:
|
|
|
|
|
||||
Current year
|
|
(13
|
)
|
|
(15
|
)
|
||
Prior years
|
|
(40
|
)
|
|
(36
|
)
|
||
Total
|
|
(53
|
)
|
|
(51
|
)
|
||
Net balance at end of period
|
|
127
|
|
|
146
|
|
||
Plus reinsurance recoverables
|
|
27
|
|
|
28
|
|
||
Balance at end of period
|
|
$
|
154
|
|
|
$
|
174
|
|
*
|
Reflects (i) a redundancy in the prior years’ net reserves of
$4 million
at March 31, 2017 primarily due to credit disability and credit involuntary unemployment insurance claims developing more favorably than anticipated, and (ii) a redundancy in the prior years’ net reserves of
$18 million
at March 31, 2016 primarily due to credit disability and credit involuntary unemployment insurance claims developing more favorably than anticipated.
|
(dollars in millions, except per share data)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Numerator (basic and diluted):
|
|
|
|
|
|
|
||
Net income attributable to OneMain Holdings, Inc.
|
|
$
|
33
|
|
|
$
|
137
|
|
Denominator:
|
|
|
|
|
|
|
||
Weighted average number of shares outstanding (basic)
|
|
135,218,586
|
|
|
134,694,759
|
|
||
Effect of dilutive securities *
|
|
354,581
|
|
|
212,989
|
|
||
Weighted average number of shares outstanding (diluted)
|
|
135,573,167
|
|
|
134,907,748
|
|
||
Earnings per share:
|
|
|
|
|
|
|
||
Basic
|
|
$
|
0.25
|
|
|
$
|
1.02
|
|
Diluted
|
|
$
|
0.25
|
|
|
$
|
1.01
|
|
*
|
We have excluded the following shares in the diluted earnings per share calculation for the
three
months ended
March 31, 2017
and
2016
because these shares would be anti-dilutive, which could impact the earnings per share calculation in the future:
|
•
|
three months ended
March 31, 2017
:
30,685
performance-based shares and
755,631
service-based shares; and
|
•
|
three months ended
March 31, 2016
:
579,432
performance-based shares and
1,011,860
service-based shares.
|
(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, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
(6
|
)
|
Other comprehensive income before reclassifications
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Reclassification adjustments from accumulated other comprehensive income (loss)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Balance at end of period
|
|
$
|
3
|
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
)
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Unrealized gains on available-for-sale securities:
|
|
|
|
|
|
|
||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes
|
|
$
|
4
|
|
|
$
|
2
|
|
Income tax effect
|
|
(1
|
)
|
|
(1
|
)
|
||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, net of taxes
|
|
$
|
3
|
|
|
$
|
1
|
|
•
|
Consumer and Insurance
— We originate and service personal loans (secured and unsecured) through our branch network and our centralized operations. We also offer credit insurance (life insurance, disability insurance, and involuntary unemployment insurance), non-credit insurance, and auto membership plans provided by a third party. Our branch network conducts business in
44
states. Our centralized operations underwrite and process certain loan applications that we receive from our branch network or through an internet portal. If the applicant is “in footprint,” located near an existing branch, 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 “out of footprint,” not located near a branch, our centralized operations originate the loan.
|
•
|
Acquisitions and Servicing
— We service the SpringCastle Portfolio that was acquired through the SpringCastle Joint Venture. 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 we are terminated, we will continue to provide the servicing for these loans pursuant to a servicing agreement, which we service as unsecured loans because the liens are subordinated to superior ranking security interests.
|
Interest income
|
Directly correlated with a specific segment.
|
Interest expense
|
Acquisitions and Servicing
- This segment includes interest expense specifically identified to the SpringCastle Portfolio.
|
Consumer and Insurance 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.
|
|
Total average unsecured debt is allocated as follows:
|
|
l
Consumer and Insurance
- receives remainder of unallocated average debt; and
|
|
l
Other
- at 100% of asset base. (Asset base represents the average net finance receivables including finance receivables held for sale.)
|
|
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 are allocated to the segments based on the interest expense allocation of debt.
|
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 expenses
|
Salaries and benefits -
Directly correlated with a specific segment. Other salaries and benefits not directly correlated with a specific segment are allocated to each of the segments based on services provided.
|
Other operating expenses
- Directly correlated with a specific segment. Other operating expenses not directly correlated with a specific segment are allocated to each of the segments based on services provided.
|
|
Insurance policy benefits and claims
- Directly correlated with a specific segment.
|
•
|
Interest income
- reverses the impact of premiums/discounts on purchased finance receivables and the interest income recognition under guidance in ASC 310-20,
Nonrefundable Fees and Other Costs
, and ASC 310-30,
Loans and Debt Securities Acquired with Deteriorated Credit Quality
, and reestablishes interest income recognition on a historical cost basis;
|
•
|
Interest expense
- reverses the impact of premiums/discounts on acquired long-term debt and reestablishes interest expense recognition on a historical cost basis;
|
•
|
Provision for finance receivable losses
- reverses the impact of providing an allowance for finance receivable losses upon acquisition and reestablishes the allowance on a historical cost basis and reverses the impact of recognition of net charge-offs on purchased credit impaired finance receivables and reestablishes the net charge-offs on a historical cost basis;
|
•
|
Other revenues
- reestablishes the historical cost basis of mark-to-market adjustments on finance receivables held for sale and on realized gains/losses associated with our investment portfolio;
|
•
|
Acquisition-related transaction and integration expenses
- reestablishes the amortization of purchased software assets on a historical cost basis;
|
•
|
Other expenses
- reestablishes expenses on a historical cost basis by reversing the impact of amortization from acquired intangible assets and including amortization of other historical deferred costs; and
|
•
|
Assets
- revalues assets based on their fair values at the effective date of the OneMain Acquisition and the Fortress Acquisition.
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Acquisitions
and
Servicing
|
|
Other (a)
|
|
Eliminations
|
|
Segment to
GAAP
Adjustment
|
|
Consolidated
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
At or for the Three Months Ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
798
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
(45
|
)
|
|
$
|
759
|
|
Interest expense
|
|
186
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
10
|
|
|
202
|
|
||||||
Provision for finance receivable losses
|
|
239
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
5
|
|
|
245
|
|
||||||
Net interest income (loss) after provision for finance receivable losses
|
|
373
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(60
|
)
|
|
312
|
|
||||||
Other revenues
|
|
137
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
141
|
|
||||||
Acquisition-related transaction and integration expenses
|
|
20
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
(3
|
)
|
|
23
|
|
||||||
Other expenses
|
|
348
|
|
|
11
|
|
|
6
|
|
|
—
|
|
|
8
|
|
|
373
|
|
||||||
Income (loss) before income tax expense (benefit)
|
|
$
|
142
|
|
|
$
|
1
|
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
(73
|
)
|
|
$
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
$
|
15,335
|
|
|
$
|
2
|
|
|
$
|
701
|
|
|
$
|
—
|
|
|
$
|
1,935
|
|
|
$
|
17,973
|
|
At or for the Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
|
$
|
849
|
|
|
$
|
102
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
(136
|
)
|
|
$
|
831
|
|
Interest expense
|
|
175
|
|
|
20
|
|
|
13
|
|
|
—
|
|
|
18
|
|
|
226
|
|
||||||
Provision for finance receivable losses
|
|
232
|
|
|
14
|
|
|
2
|
|
|
—
|
|
|
(51
|
)
|
|
197
|
|
||||||
Net interest income after provision for finance receivable losses
|
|
442
|
|
|
68
|
|
|
1
|
|
|
—
|
|
|
(103
|
)
|
|
408
|
|
||||||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
||||||
Other revenues
|
|
141
|
|
|
11
|
|
|
(11
|
)
|
|
(11
|
)
|
|
6
|
|
|
136
|
|
||||||
Acquisition-related transaction and integration expenses
|
|
28
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
(4
|
)
|
|
33
|
|
||||||
Other expenses
|
|
388
|
|
|
26
|
|
|
3
|
|
|
(11
|
)
|
|
20
|
|
|
426
|
|
||||||
Income (loss) before income tax expense (benefit)
|
|
167
|
|
|
220
|
|
|
(22
|
)
|
|
—
|
|
|
(113
|
)
|
|
252
|
|
||||||
Income before income taxes attributable to non-controlling interests
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||||
Income (loss) before income tax expense (benefit) attributable to OneMain Holdings, Inc.
|
|
$
|
167
|
|
|
$
|
192
|
|
|
$
|
(22
|
)
|
|
$
|
—
|
|
|
$
|
(113
|
)
|
|
$
|
224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets (b)
|
|
$
|
15,807
|
|
|
$
|
106
|
|
|
$
|
960
|
|
|
$
|
—
|
|
|
$
|
2,261
|
|
|
$
|
19,134
|
|
(a)
|
Real Estate segment has been combined with “Other” for the prior period.
|
(b)
|
During the third quarter of 2016, we identified an incorrect allocation of our total assets within the segment footnote of our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2016 and June 30, 2016. As a result of this finding, total assets at March 31, 2016 were understated by
$4.5 billion
in our Consumer and Insurance segment and overstated by
$4.5 billion
in our asset eliminations. The applicable prior period amounts have been corrected 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, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
683
|
|
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
787
|
|
|
$
|
787
|
|
Investment securities
|
|
33
|
|
|
1,714
|
|
|
8
|
|
|
1,755
|
|
|
1,755
|
|
|||||
Net finance receivables, less allowance for finance receivable losses
|
|
—
|
|
|
—
|
|
|
13,522
|
|
|
13,522
|
|
|
12,722
|
|
|||||
Finance receivables held for sale
|
|
—
|
|
|
—
|
|
|
151
|
|
|
151
|
|
|
148
|
|
|||||
Restricted cash and restricted cash equivalents
|
|
558
|
|
|
—
|
|
|
—
|
|
|
558
|
|
|
558
|
|
|||||
Other assets *
|
|
—
|
|
|
1
|
|
|
30
|
|
|
31
|
|
|
33
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
14,220
|
|
|
$
|
—
|
|
|
$
|
14,220
|
|
|
$
|
13,679
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
506
|
|
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
579
|
|
|
$
|
579
|
|
Investment securities
|
|
31
|
|
|
1,724
|
|
|
9
|
|
|
1,764
|
|
|
1,764
|
|
|||||
Net finance receivables, less allowance for finance receivable losses
|
|
—
|
|
|
—
|
|
|
13,891
|
|
|
13,891
|
|
|
13,043
|
|
|||||
Finance receivables held for sale
|
|
—
|
|
|
—
|
|
|
159
|
|
|
159
|
|
|
153
|
|
|||||
Restricted cash and restricted cash equivalents
|
|
568
|
|
|
—
|
|
|
—
|
|
|
568
|
|
|
568
|
|
|||||
Other assets *
|
|
—
|
|
|
1
|
|
|
34
|
|
|
35
|
|
|
37
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
14,498
|
|
|
$
|
—
|
|
|
$
|
14,498
|
|
|
$
|
13,959
|
|
*
|
Includes commercial mortgage loans, escrow advance receivable, and receivables related to sales of real estate loans and related trust assets.
|
|
|
Fair Value Measurements Using
|
|
Total Carried At Fair Value
|
||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3 (a)
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents in mutual funds
|
|
$
|
470
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
470
|
|
Cash equivalents in securities
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
||||
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
138
|
|
|
—
|
|
|
138
|
|
||||
Certificates of deposit and commercial paper
|
|
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
122
|
|
|
—
|
|
|
122
|
|
||||
Corporate debt
|
|
—
|
|
|
1,002
|
|
|
1
|
|
|
1,003
|
|
||||
RMBS
|
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||
CMBS
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
||||
CDO/ABS
|
|
—
|
|
|
111
|
|
|
3
|
|
|
114
|
|
||||
Total bonds
|
|
—
|
|
|
1,617
|
|
|
4
|
|
|
1,621
|
|
||||
Preferred stock
|
|
8
|
|
|
7
|
|
|
—
|
|
|
15
|
|
||||
Common stock
|
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||
Other long-term investments
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Total available-for-sale securities (b)
|
|
26
|
|
|
1,624
|
|
|
6
|
|
|
1,656
|
|
||||
Other securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Corporate debt
|
|
—
|
|
|
82
|
|
|
2
|
|
|
84
|
|
||||
RMBS
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
CMBS
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
CDO/ABS
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Total bonds
|
|
—
|
|
|
90
|
|
|
2
|
|
|
92
|
|
||||
Preferred stock
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Total other securities
|
|
6
|
|
|
90
|
|
|
2
|
|
|
98
|
|
||||
Total investment securities
|
|
32
|
|
|
1,714
|
|
|
8
|
|
|
1,754
|
|
||||
Restricted cash in mutual funds
|
|
540
|
|
|
—
|
|
|
—
|
|
|
540
|
|
||||
Total
|
|
$
|
1,042
|
|
|
$
|
1,818
|
|
|
$
|
8
|
|
|
$
|
2,868
|
|
(a)
|
Due to the insignificant activity within the Level 3 assets during the three months ended
March 31, 2017
, we have omitted the additional disclosures relating to the changes in Level 3 assets measured at fair value on a recurring basis and the quantitative information about Level 3 unobservable inputs.
|
(b)
|
Excludes an immaterial interest in a limited partnership that we account for using the equity method and FHLB common stock of
$1 million
at
March 31, 2017
, which is carried at cost.
|
|
|
Fair Value Measurements Using
|
|
Total Carried At Fair Value
|
||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3 (a)
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents in mutual funds
|
|
$
|
307
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
307
|
|
Cash equivalents in securities
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
||||
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
145
|
|
|
—
|
|
|
145
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
118
|
|
|
—
|
|
|
118
|
|
||||
Corporate debt
|
|
—
|
|
|
1,025
|
|
|
—
|
|
|
1,025
|
|
||||
RMBS
|
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||
CMBS
|
|
—
|
|
|
108
|
|
|
—
|
|
|
108
|
|
||||
CDO/ABS
|
|
—
|
|
|
98
|
|
|
4
|
|
|
102
|
|
||||
Total bonds
|
|
—
|
|
|
1,625
|
|
|
4
|
|
|
1,629
|
|
||||
Preferred stock
|
|
8
|
|
|
8
|
|
|
—
|
|
|
16
|
|
||||
Common stock
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Other long-term investments
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Total available-for-sale securities (b)
|
|
25
|
|
|
1,633
|
|
|
6
|
|
|
1,664
|
|
||||
Other securities
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Corporate debt
|
|
—
|
|
|
83
|
|
|
2
|
|
|
85
|
|
||||
RMBS
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
CMBS
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
CDO/ABS
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Total bonds
|
|
—
|
|
|
91
|
|
|
2
|
|
|
93
|
|
||||
Preferred stock
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Total other securities
|
|
6
|
|
|
91
|
|
|
2
|
|
|
99
|
|
||||
Total investment securities
|
|
31
|
|
|
1,724
|
|
|
8
|
|
|
1,763
|
|
||||
Restricted cash in mutual funds
|
|
553
|
|
|
—
|
|
|
—
|
|
|
553
|
|
||||
Total
|
|
$
|
891
|
|
|
$
|
1,797
|
|
|
$
|
8
|
|
|
$
|
2,696
|
|
(a)
|
Due to the insignificant activity within the Level 3 assets during 2016, we have omitted the additional disclosures relating to the changes in Level 3 assets measured at fair value on a recurring basis and the quantitative information about Level 3 unobservable inputs.
|
(b)
|
Excludes an immaterial interest in a limited partnership that we account for using the equity method and FHLB common stock of
$1 million
at
December 31, 2016
, which is carried at cost.
|
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 our relationships with employees and third parties;
|
•
|
various risks relating to our continued compliance with the Settlement Agreement;
|
•
|
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, disruptions in the operation of our information systems, cyber-attacks or other 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, our ability to make technological improvements, 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;
|
•
|
risks related to the acquisition or sale of assets or businesses or the formation, termination or operation of joint ventures or other strategic alliances or arrangements, including loan delinquencies or net charge-offs, integration or migration issues, increased costs of servicing, incomplete records, and retention of customers;
|
•
|
the inability to successfully and timely expand our centralized loan servicing capabilities through the integration of the Springleaf and OneMain servicing facilities;
|
•
|
risks associated with our insurance operations, including insurance claims that exceed our expectations or insurance losses that exceed our reserves;
|
•
|
the inability to successfully implement our growth strategy for our consumer lending business as well as various risks associated with successfully acquiring portfolios of consumer loans, pursuing acquisitions, and/or establishing joint ventures;
|
•
|
declines in collateral values or increases in actual or projected delinquencies or net charge-offs;
|
•
|
changes in federal, state or local laws, regulations, or regulatory policies and practices, including the Dodd-Frank Act (which, among other things, established the CFPB, 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, our use of third-party vendors and real estate loan servicing, or changes in corporate or individual income tax laws or regulations;
|
•
|
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;
|
•
|
any material impairment or write-down of the value of our assets;
|
•
|
the effects of any downgrade of our debt ratings by credit rating agencies, which could have a negative impact on our cost of and/or access to capital;
|
•
|
our substantial indebtedness, which could prevent us from meeting our obligations under our debt instruments and limit our ability to react to changes in the economy or our industry, or our ability to incur additional borrowings;
|
•
|
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 standards, policies and practices;
|
•
|
changes in accounting principles and policies or changes in accounting estimates;
|
•
|
effects of the contemplated acquisition of Fortress by an affiliate of SoftBank Group Corp.;
|
•
|
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, including the environmental liability and costs for damage caused by hazardous waste if a real estate loan goes into default.
|
•
|
Personal Loans —
We offer personal loans through our branch network and over the Internet through our centralized operations to customers who generally need timely access to cash. Our personal loans are typically non-revolving with a fixed-rate and a fixed, original term of
three
to
six years
and are secured by consumer goods, automobiles, or other personal property or are unsecured. At
March 31, 2017
, we had over
2.1 million
personal loans, representing
$13.2 billion
of net finance receivables, of which
37%
were secured by titled collateral, compared to
2.2 million
personal loans totaling
$13.6 billion
at
December 31, 2016
, of which
36%
were secured by titled collateral.
|
•
|
Insurance Products —
We offer our customers credit insurance (life insurance, disability insurance, and involuntary unemployment insurance) and non-credit insurance through both our branch network and our centralized operations. Credit insurance and non-credit insurance products are provided by our subsidiaries, Merit, Yosemite, AHL and Triton. We also offer auto membership plans of an unaffiliated company.
|
•
|
Real Estate Loans —
We ceased originating real estate loans in January of 2012, and during 2014, we sold $6.4 billion real estate loans held for sale. During 2016, we sold $308 million 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. Predominantly, 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, 2017
, we had
$139 million
of real estate loans held for investment, of which 94% were secured by first mortgages, compared to
$144 million
at
December 31, 2016
, of which 93% were secured by first mortgages. Real estate loans held for sale totaled
$148 million
and $153 million at
March 31, 2017
and
December 31, 2016
, respectively.
|
•
|
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; and
|
•
|
Acquisitions and Servicing.
|
•
|
Reinvigorating growth in receivables through enhanced marketing strategies and product options, including an expansion of our direct auto lending;
|
•
|
Growing secured lending originations with a goal of enhancing credit performance;
|
•
|
Leveraging scale and cost discipline across the Company to realize a total of approximately $275 million - $300 million of aggregate acquisition cost synergies, as previously discussed;
|
•
|
Reducing leverage; and
|
•
|
Maintaining a strong liquidity level and diversified funding sources.
|
(dollars in millions, except per share amounts)
|
|
At or for the
Three Months Ended March 31, |
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Interest income
|
|
$
|
759
|
|
|
$
|
831
|
|
Interest expense
|
|
202
|
|
|
226
|
|
||
Provision for finance receivable losses
|
|
245
|
|
|
197
|
|
||
Net interest income after provision for finance receivable losses
|
|
312
|
|
|
408
|
|
||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
167
|
|
||
Other revenues
|
|
141
|
|
|
136
|
|
||
Acquisition-related transaction and integration expenses
|
|
23
|
|
|
33
|
|
||
Other expenses
|
|
373
|
|
|
426
|
|
||
Income before income taxes
|
|
57
|
|
|
252
|
|
||
Income taxes
|
|
24
|
|
|
87
|
|
||
Net income
|
|
33
|
|
|
165
|
|
||
Net income attributable to non-controlling interests
|
|
—
|
|
|
28
|
|
||
Net income attributable to OMH
|
|
$
|
33
|
|
|
$
|
137
|
|
|
|
|
|
|
||||
Share Data:
|
|
|
|
|
|
|
||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
||
Basic
|
|
135,218,586
|
|
|
134,694,759
|
|
||
Diluted
|
|
135,573,167
|
|
|
134,907,748
|
|
||
Earnings per share:
|
|
|
|
|
|
|
||
Basic
|
|
$
|
0.25
|
|
|
$
|
1.02
|
|
Diluted
|
|
$
|
0.25
|
|
|
$
|
1.01
|
|
|
|
|
|
|
||||
Selected Financial Statistics (a)
|
|
|
|
|
|
|
||
Finance receivables held for investment:
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
13,388
|
|
|
$
|
13,836
|
|
Number of accounts
|
|
2,154,034
|
|
|
2,201,321
|
|
||
Finance receivables held for sale:
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
148
|
|
|
$
|
776
|
|
Number of accounts
|
|
2,714
|
|
|
146,302
|
|
||
Finance receivables held for investment and held for sale: (b)
|
|
|
|
|
||||
Average net receivables
|
|
$
|
13,513
|
|
|
$
|
16,076
|
|
Yield
|
|
22.67
|
%
|
|
20.64
|
%
|
||
Gross charge-off ratio
|
|
8.91
|
%
|
|
4.11
|
%
|
||
Recovery ratio
|
|
(0.89
|
)%
|
|
(0.39
|
)%
|
||
Net charge-off ratio
|
|
8.02
|
%
|
|
3.72
|
%
|
||
30-89 Delinquency ratio
|
|
2.21
|
%
|
|
1.89
|
%
|
||
Origination volume
|
|
$
|
1,812
|
|
|
$
|
2,361
|
|
Number of accounts originated
|
|
243,652
|
|
|
328,057
|
|
(a)
|
See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.
|
(b)
|
Includes personal loans held for sale for the
2016
period in connection with the Lendmark Sale, but excludes real estate loans held for sale for both periods in order to be comparable with our segment statistics disclosed in “Segment Results.”
|
•
|
Finance charges
decreased
$29 million
primarily due to the net of the following:
|
◦
|
Average net receivables held for investment
decreased primarily due to (i) the SpringCastle Interests Sale and (ii) our liquidating real estate loan portfolio, including the transfers of $257 million and $50 million of real estate loans to finance receivables held for sale on June 30, 2016 and November 30, 2016, respectively. This decrease was partially offset by the continued growth of our personal loan portfolio.
|
◦
|
Yield on finance receivables held for investment
increased primarily due to lower amortization of purchase premium on non-credit impaired finance receivables. This increase was partially offset by the continued growth of secured personal loans, which generally have lower yields relative to our unsecured personal loans.
|
•
|
Interest income on finance receivables held for sale
decreased
$43 million
primarily due to the transfer of $608 million of our personal loans to finance receivables held for sale on September 30, 2015, which were sold in the Lendmark Sale on May 2, 2016.
|
•
|
Average debt
decreased primarily due to (i) the elimination of the debt associated with the SpringCastle Interests Sale and (ii) net debt repurchases and repayments during the past 12 months relating to our conduit facilities. This decrease was partially offset by net debt issuances during the past 12 months relating to our securitization transactions. See Notes
8
and
9
of the Notes to Condensed Consolidated Financial Statements in Part I - Item 1 of this report for further information on our long-term debt, securitization transactions and our conduit facilities.
|
•
|
Weighted average interest rate on our debt
increased primarily due to (i) SFC’s offering of the 8.25% SFC Notes in April of 2016 and (ii) the elimination of debt associated with the SpringCastle Interests Sale, which generally had a lower interest rate relative to our other indebtedness. This increase was partially offset by the repurchase of $600 million unsecured notes, which had a higher interest rate relative to our other indebtedness, in connection with SFC’s offering of the 8.25% SFC Notes.
|
•
|
Salaries and benefits
decrease
d
$28 million
primarily due to a decrease in average staffing as a result of our integration of the two legacy companies.
|
•
|
Other operating expenses
decreased
$25 million
primarily due to our continued integration efforts, which resulted in lower professional fees of $16 million and lower costs related to a transition services agreement with Citigroup of $9 million.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Consumer and Insurance
|
|
|
|
|
||||
Income before income taxes - Segment Accounting Basis
|
|
$
|
142
|
|
|
$
|
167
|
|
Adjustments:
|
|
|
|
|
||||
Acquisition-related transaction and integration expenses
|
|
20
|
|
|
28
|
|
||
Net loss on repurchases and repayments of debt
|
|
1
|
|
|
8
|
|
||
Adjusted pretax income (non-GAAP)
|
|
$
|
163
|
|
|
$
|
203
|
|
|
|
|
|
|
||||
Acquisitions and Servicing
|
|
|
|
|
||||
Income before income taxes attributable to OMH - Segment Accounting Basis
|
|
$
|
1
|
|
|
$
|
192
|
|
Adjustments:
|
|
|
|
|
||||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
(167
|
)
|
||
SpringCastle transaction costs
|
|
—
|
|
|
1
|
|
||
Adjusted pretax income attributable to OMH (non-GAAP)
|
|
$
|
1
|
|
|
$
|
26
|
|
|
|
|
|
|
||||
Other
|
|
|
|
|
||||
Loss before income tax benefit - Segment Accounting Basis
|
|
$
|
(13
|
)
|
|
$
|
(22
|
)
|
Adjustments:
|
|
|
|
|
||||
Acquisition-related transaction and integration expenses
|
|
6
|
|
|
9
|
|
||
Adjusted pretax loss (non-GAAP)
|
|
$
|
(7
|
)
|
|
$
|
(13
|
)
|
(dollars in millions)
|
|
At or for the
Three Months Ended March 31, |
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Interest income
|
|
$
|
798
|
|
|
$
|
849
|
|
Interest expense
|
|
186
|
|
|
175
|
|
||
Provision for finance receivable losses
|
|
239
|
|
|
232
|
|
||
Net interest income after provision for finance receivable losses
|
|
373
|
|
|
442
|
|
||
Other revenues
|
|
138
|
|
|
149
|
|
||
Other expenses
|
|
348
|
|
|
388
|
|
||
Adjusted pretax income (non-GAAP)
|
|
$
|
163
|
|
|
$
|
203
|
|
|
|
|
|
|
||||
Selected Financial Statistics (a)
|
|
|
|
|
|
|
||
Finance receivables held for investment:
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
13,157
|
|
|
$
|
12,984
|
|
Number of accounts
|
|
2,147,394
|
|
|
2,175,628
|
|
||
Finance receivables held for sale:
|
|
|
|
|
||||
Net finance receivables
|
|
$
|
—
|
|
|
$
|
606
|
|
Number of accounts
|
|
—
|
|
|
143,254
|
|
||
Finance receivables held for investment and held for sale: (b)
|
|
|
|
|
||||
Average net receivables
|
|
$
|
13,261
|
|
|
$
|
13,545
|
|
Yield
|
|
24.39
|
%
|
|
25.15
|
%
|
||
Gross charge-off ratio
|
|
9.58
|
%
|
|
8.12
|
%
|
||
Recovery ratio
|
|
(1.11
|
)%
|
|
(0.62
|
)%
|
||
Net charge-off ratio
|
|
8.47
|
%
|
|
7.50
|
%
|
||
30-89 Delinquency ratio
|
|
2.17
|
%
|
|
1.84
|
%
|
||
Origination volume
|
|
$
|
1,812
|
|
|
$
|
2,343
|
|
Number of accounts originated
|
|
243,652
|
|
|
328,057
|
|
(a)
|
See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.
|
(b)
|
Includes personal loans held for sale for the
2016
period in connection with the Lendmark Sale.
|
•
|
Finance charges
decreased
$9 million
primarily due to the net of the following:
|
◦
|
Average net receivables held for investment
increased primarily due to the continued growth of our loan portfolio.
|
◦
|
Yield on finance receivables held for investment
decreased primarily due to the continued growth of secured personal loans, which generally have lower yields relative to our unsecured personal loans.
|
•
|
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, which were sold in the Lendmark Sale on May 2, 2016.
|
•
|
Salaries and benefits
decrease
d
$24 million
primarily due to a decrease in average staffing as a result of our integration of the two legacy companies.
|
•
|
Other operating expenses
decrease
d
$22 million
primarily due to our continued integration efforts, which resulted in lower professional fees of $13 million and lower costs related to a transition services agreement with Citigroup of $9 million.
|
•
|
Insurance policy benefits and claims
increased
$6 million
primarily due to a claim reserve release during 2016.
|
(dollars in millions)
|
|
At or for the
Three Months Ended March 31, |
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Interest income
|
|
$
|
—
|
|
|
$
|
102
|
|
Interest expense
|
|
—
|
|
|
20
|
|
||
Provision for finance receivable losses
|
|
—
|
|
|
14
|
|
||
Net interest income after provision for finance receivable losses
|
|
—
|
|
|
68
|
|
||
Other revenues
|
|
12
|
|
|
11
|
|
||
Other expenses
|
|
11
|
|
|
25
|
|
||
Adjusted pretax income (non-GAAP)
|
|
1
|
|
|
54
|
|
||
Pretax income attributable to non-controlling interests
|
|
—
|
|
|
28
|
|
||
Adjusted pretax income attributable to OMH (non-GAAP)
|
|
$
|
1
|
|
|
$
|
26
|
|
|
|
|
|
|
|
|
||
Selected Financial Statistics *
|
|
|
|
|
||||
Finance receivables held for investment:
|
|
|
|
|
||||
Average net receivables
|
|
$
|
—
|
|
|
$
|
1,656
|
|
Yield
|
|
—
|
%
|
|
24.70
|
%
|
||
Net charge-off ratio
|
|
—
|
%
|
|
3.44
|
%
|
*
|
See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.
|
(dollars in millions)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Interest income
|
|
$
|
6
|
|
|
$
|
16
|
|
Interest expense
|
|
6
|
|
|
13
|
|
||
Provision for finance receivable losses
|
|
1
|
|
|
2
|
|
||
Net interest income (loss) after provision for finance receivable losses
|
|
(1
|
)
|
|
1
|
|
||
Other revenues
|
|
—
|
|
|
(11
|
)
|
||
Other expenses
|
|
6
|
|
|
3
|
|
||
Adjusted pretax loss (non-GAAP)
|
|
$
|
(7
|
)
|
|
$
|
(13
|
)
|
(dollars in millions)
|
|
March 31,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Net finance receivables held for investment:
|
|
|
|
|
|
|
||
Personal loans
|
|
$
|
6
|
|
|
$
|
15
|
|
Real estate loans
|
|
148
|
|
|
542
|
|
||
Retail sales finance
|
|
10
|
|
|
20
|
|
||
Total
|
|
$
|
164
|
|
|
$
|
577
|
|
|
|
|
|
|
||||
Net finance receivables held for sale:
|
|
|
|
|
||||
Real estate loans
|
|
$
|
151
|
|
|
$
|
170
|
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Other
|
|
Segment to
GAAP
Adjustment
|
|
Consolidated
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Personal loans
|
|
$
|
13,157
|
|
|
$
|
6
|
|
|
$
|
77
|
|
|
$
|
13,240
|
|
Real estate loans
|
|
—
|
|
|
148
|
|
|
(9
|
)
|
|
139
|
|
||||
Retail sales finance
|
|
—
|
|
|
10
|
|
|
(1
|
)
|
|
9
|
|
||||
Total
|
|
$
|
13,157
|
|
|
$
|
164
|
|
|
$
|
67
|
|
|
$
|
13,388
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Personal loans
|
|
$
|
13,455
|
|
|
$
|
11
|
|
|
$
|
111
|
|
|
$
|
13,577
|
|
Real estate loans
|
|
—
|
|
|
153
|
|
|
(9
|
)
|
|
144
|
|
||||
Retail sales finance
|
|
—
|
|
|
12
|
|
|
(1
|
)
|
|
11
|
|
||||
Total
|
|
$
|
13,455
|
|
|
$
|
176
|
|
|
$
|
101
|
|
|
$
|
13,732
|
|
•
|
Prime: FICO score of 660 or higher
|
•
|
Non-prime: FICO score of 620-659
|
•
|
Sub-prime: FICO score of 619 or below
|
(dollars in millions)
|
|
Personal
Loans
|
|
Real Estate
Loans
|
|
Retail Sales Finance
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2017 *
|
|
|
|
|
|
|
|
|
||||||||
FICO scores
|
|
|
|
|
|
|
|
|
||||||||
660 or higher
|
|
$
|
3,671
|
|
|
$
|
40
|
|
|
$
|
5
|
|
|
$
|
3,716
|
|
620-659
|
|
3,360
|
|
|
25
|
|
|
1
|
|
|
3,386
|
|
||||
619 or below
|
|
6,206
|
|
|
72
|
|
|
3
|
|
|
6,281
|
|
||||
Unavailable
|
|
3
|
|
|
2
|
|
|
—
|
|
|
5
|
|
||||
Total
|
|
$
|
13,240
|
|
|
$
|
139
|
|
|
$
|
9
|
|
|
$
|
13,388
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
FICO scores
|
|
|
|
|
|
|
|
|
||||||||
660 or higher
|
|
$
|
3,424
|
|
|
$
|
41
|
|
|
$
|
5
|
|
|
$
|
3,470
|
|
620-659
|
|
3,383
|
|
|
23
|
|
|
2
|
|
|
3,408
|
|
||||
619 or below
|
|
6,747
|
|
|
77
|
|
|
4
|
|
|
6,828
|
|
||||
Unavailable
|
|
23
|
|
|
3
|
|
|
—
|
|
|
26
|
|
||||
Total
|
|
$
|
13,577
|
|
|
$
|
144
|
|
|
$
|
11
|
|
|
$
|
13,732
|
|
*
|
The shift in FICO distribution reflects the alignment in FICO versions across OMH. As of March 31, 2017, the legacy Springleaf FICO scores were refreshed to FICO 08 version, which is comparable with the legacy OneMain FICO version.
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Other
|
|
Segment to
GAAP
Adjustment
|
|
Consolidated
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Current
|
|
$
|
12,571
|
|
|
$
|
125
|
|
|
$
|
67
|
|
|
$
|
12,763
|
|
30-59 days past due
|
|
164
|
|
|
9
|
|
|
(1
|
)
|
|
172
|
|
||||
Delinquent (60-89 days past due)
|
|
120
|
|
|
4
|
|
|
—
|
|
|
124
|
|
||||
Performing
|
|
12,855
|
|
|
138
|
|
|
66
|
|
|
13,059
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Nonperforming (90+ days past due)
|
|
302
|
|
|
26
|
|
|
1
|
|
|
329
|
|
||||
Total net finance receivables
|
|
$
|
13,157
|
|
|
$
|
164
|
|
|
$
|
67
|
|
|
$
|
13,388
|
|
|
|
|
|
|
|
|
|
|
||||||||
Delinquency ratio
|
|
|
|
|
|
|
|
|
||||||||
30-89 days past due
|
|
2.17
|
%
|
|
7.83
|
%
|
|
*
|
|
|
2.21
|
%
|
||||
30+ days past due
|
|
4.45
|
%
|
|
23.99
|
%
|
|
*
|
|
|
4.67
|
%
|
||||
60+ days past due
|
|
3.20
|
%
|
|
18.65
|
%
|
|
*
|
|
|
3.38
|
%
|
||||
90+ days past due
|
|
2.29
|
%
|
|
16.16
|
%
|
|
*
|
|
|
2.45
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Current
|
|
$
|
12,799
|
|
|
$
|
131
|
|
|
$
|
103
|
|
|
$
|
13,033
|
|
30-59 days past due
|
|
174
|
|
|
10
|
|
|
(1
|
)
|
|
183
|
|
||||
Delinquent (60-89 days past due)
|
|
130
|
|
|
4
|
|
|
—
|
|
|
134
|
|
||||
Performing
|
|
13,103
|
|
|
145
|
|
|
102
|
|
|
13,350
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Nonperforming (90+ days past due)
|
|
352
|
|
|
31
|
|
|
(1
|
)
|
|
382
|
|
||||
Total net finance receivables
|
|
$
|
13,455
|
|
|
$
|
176
|
|
|
$
|
101
|
|
|
$
|
13,732
|
|
|
|
|
|
|
|
|
|
|
||||||||
Delinquency ratio
|
|
|
|
|
|
|
|
|
||||||||
30-89 days past due
|
|
2.26
|
%
|
|
8.32
|
%
|
|
*
|
|
|
2.31
|
%
|
||||
30+ days past due
|
|
4.88
|
%
|
|
25.88
|
%
|
|
*
|
|
|
5.09
|
%
|
||||
60+ days past due
|
|
3.59
|
%
|
|
20.16
|
%
|
|
*
|
|
|
3.76
|
%
|
||||
90+ days past due
|
|
2.62
|
%
|
|
17.56
|
%
|
|
*
|
|
|
2.78
|
%
|
*
|
Not applicable.
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Acquisitions
and
Servicing
|
|
Other
|
|
Segment to
GAAP
Adjustment
|
|
Consolidated
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
|
$
|
732
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
(74
|
)
|
|
$
|
689
|
|
Provision for finance receivable losses
|
|
239
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|
245
|
|
|||||
Charge-offs
|
|
(313
|
)
|
|
—
|
|
|
(2
|
)
|
|
18
|
|
|
(297
|
)
|
|||||
Recoveries
|
|
36
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
29
|
|
|||||
Balance at end of period
|
|
$
|
694
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
(58
|
)
|
|
$
|
666
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance ratio
|
|
5.28
|
%
|
|
—
|
%
|
|
18.24
|
%
|
|
(a)
|
|
|
4.97
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
|
$
|
769
|
|
|
$
|
4
|
|
|
$
|
70
|
|
|
$
|
(251
|
)
|
|
$
|
592
|
|
Provision for finance receivable losses
|
|
232
|
|
|
14
|
|
|
2
|
|
|
(51
|
)
|
|
197
|
|
|||||
Charge-offs
|
|
(275
|
)
|
|
(17
|
)
|
|
(5
|
)
|
|
132
|
|
|
(165
|
)
|
|||||
Recoveries
|
|
21
|
|
|
3
|
|
|
1
|
|
|
(9
|
)
|
|
16
|
|
|||||
Other (b)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Balance at end of period
|
|
$
|
747
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
(179
|
)
|
|
$
|
636
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance ratio
|
|
5.76
|
%
|
|
—
|
%
|
|
11.82
|
%
|
|
(a)
|
|
|
4.60
|
%
|
(a)
|
Not applicable.
|
(b)
|
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.
|
(dollars in millions)
|
|
Consumer
and Insurance |
|
Other
|
|
Segment to
GAAP Adjustment |
|
Consolidated
Total |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables
|
|
$
|
399
|
|
|
$
|
72
|
|
|
$
|
(261
|
)
|
|
$
|
210
|
|
Allowance for TDR finance receivable losses
|
|
146
|
|
|
23
|
|
|
(85
|
)
|
|
84
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables
|
|
$
|
421
|
|
|
$
|
71
|
|
|
$
|
(296
|
)
|
|
$
|
196
|
|
Allowance for TDR finance receivable losses
|
|
154
|
|
|
23
|
|
|
(97
|
)
|
|
80
|
|
•
|
On April 13, 2017, Midbrook 2013-VFN1 Trust and OneMain Financial B5 Warehouse Trust voluntarily terminated their note purchase agreements with their respective lenders. Concurrent with the termination of the note purchase agreements, we entered into the Financial Funding VII LSA with the same third party lenders who were parties to the terminated note purchase agreements. Under the Financial Funding VII LSA, we may borrow up to a maximum principal balance of $
650 million
. See Note
18
of the Notes to Condensed Consolidated Financial Statements in Part I - Item 1 of this report for further information on these subsequent transactions.
|
•
|
On April 27, 2017, we drew $60 million of the variable funding notes issued by Sumner Brook 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 revolving conduit 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 new and extending existing secured revolving facilities to provide committed liquidity in case of prolonged market fluctuations.
|
(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 (a)
|
|
Collateral
Type
|
|
Original
Revolving
Period
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer Securitizations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
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
|
|
||||
SLFT 2016-A
|
|
500
|
|
|
560
|
|
|
500
|
|
|
559
|
|
|
3.10
|
%
|
|
Personal loans
|
|
2 years
|
|
||||
OMFIT 2014-1
|
|
760
|
|
|
1,004
|
|
|
264
|
|
|
473
|
|
|
2.74
|
%
|
|
Personal loans
|
|
2 years
|
|
||||
OMFIT 2014-2
|
|
1,185
|
|
|
1,325
|
|
|
682
|
|
|
764
|
|
|
3.26
|
%
|
|
Personal loans
|
|
2 years
|
|
||||
OMFIT 2015-1
|
|
1,229
|
|
|
1,397
|
|
|
1,229
|
|
|
1,349
|
|
|
3.74
|
%
|
|
Personal loans
|
|
3 years
|
|
||||
OMFIT 2015-2
|
|
1,250
|
|
|
1,346
|
|
|
1,250
|
|
|
1,305
|
|
|
3.07
|
%
|
|
Personal loans
|
|
2 years
|
|
||||
OMFIT 2015-3
|
|
293
|
|
|
330
|
|
|
293
|
|
|
319
|
|
|
4.21
|
%
|
|
Personal loans
|
|
5 years
|
|
||||
OMFIT 2016-1
|
|
459
|
|
|
569
|
|
|
459
|
|
|
542
|
|
|
4.01
|
%
|
|
Personal loans
|
|
3 years
|
|
||||
OMFIT 2016-2
|
|
816
|
|
|
1,007
|
|
|
816
|
|
|
972
|
|
|
4.50
|
%
|
|
Personal loans
|
|
2 years
|
|
||||
OMFIT 2016-3
|
|
317
|
|
|
397
|
|
|
317
|
|
|
383
|
|
|
4.33
|
%
|
|
Personal loans
|
|
5 years
|
|
||||
Total consumer securitizations
|
|
8,286
|
|
|
9,520
|
|
|
7,287
|
|
|
8,252
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto Securitizations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
ODART 2016-1
|
|
700
|
|
|
754
|
|
|
396
|
|
|
456
|
|
|
2.45
|
%
|
|
Direct auto loans
|
|
—
|
|
||||
ODART 2017-1
|
|
268
|
|
|
300
|
|
|
268
|
|
|
300
|
|
|
2.61
|
%
|
|
Direct auto loans
|
|
1 year
|
|
||||
Total auto securitizations
|
|
968
|
|
|
1,054
|
|
|
664
|
|
|
756
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total secured structured financings
|
|
$
|
9,254
|
|
|
$
|
10,574
|
|
|
$
|
7,951
|
|
|
$
|
9,008
|
|
|
|
|
|
|
|
|
|
(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.
|
•
|
allowance for finance receivable losses;
|
•
|
purchased credit impaired finance receivables;
|
•
|
TDR finance receivables;
|
•
|
fair value measurements; and
|
•
|
goodwill and other intangible assets.
|
Period
|
|
Total Number
of Shares Purchased *
|
|
Average Price
Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
|
|
|
|
|
|
|
|
|
|||||
January 1, 2017 - January 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
February 1, 2017 - February 28, 2017
|
|
2,151
|
|
|
27.94
|
|
|
—
|
|
|
—
|
|
|
March 1, 2017 - March 31, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
2,151
|
|
|
|
|
|
|
|
*
|
Represents the surrender of shares to OMH in an amount equal to the amount of tax withheld in satisfaction of the withholding obligations of certain employees in connection with the vesting of restricted shares. As of the date of this report, OMH has no publicly announced plans or programs to repurchase OMH common stock.
|
Exhibits are listed in the Exhibit Index beginning on page
64
and incorporated by reference herein.
|
|
|
|
ONEMAIN HOLDINGS, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
May 5, 2017
|
|
By:
|
/s/ Scott T. Parker
|
|
|
|
|
Scott T. Parker
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
Exhibit
|
|
|
|
|
|
10.1 *
|
|
Severance and Release Agreement, dated as of March 31, 2016, for Mary McDowell, filed herewith as Exhibit 10.1.
|
|
|
|
10.2 *
|
|
Consulting Agreement, dated as of April 1, 2016, between OneMain Holdings, Inc. and Mary McDowell, filed herewith as Exhibit 10.2.
|
|
|
|
10.3 *
|
|
Amendment No. 3 to Second Amended and Restated Limited Liability Company Agreement of Springleaf Financial Holdings, LLC, dated as of April 5, 2017, filed herewith as Exhibit 10.3.
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certifications of the President and Chief Executive Officer of OneMain Holdings, Inc.
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31.2
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Rule 13a-14(a)/15d-14(a) Certifications of the Executive Vice President and Chief Financial Officer of OneMain Holdings, Inc.
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32.1
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Section 1350 Certifications.
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101
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Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) Condensed Consolidated Statements of Shareholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.
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*
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Management contract or compensatory plan or arrangement.
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1
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The Springleaf Financial Services Retirement Plan is also known as, and may be referred to as, the American General Finance Retirement Plan.
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Independent Contractor
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Mary H. McDowell
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Engagement
Start Date
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April 1, 2016
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Description of
Engagement
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Consultant shall perform such duties as are requested by OneMain from time to time, including without limitation: advice on, participation in and support for OneMain’s interests in industry and trade issues and associations; assistance with OneMain marketing efforts; support for, and participation in, community and advocacy relations efforts; assistance with coordinating financial literacy outreach and investment; involvement with the Company’s Diversity Council; and other matters as reasonably requested by OneMain’s CEO. Notwithstanding the foregoing, nothing herein shall prohibit Consultant from (i) participating in trade associations or industry organizations or engaging in charitable, civic or political activities, (ii) engaging in personal investment activities for Consultant or (iii) accepting directorships unrelated to OneMain, provided that such activities are not for the benefit of any business, individual, partner, firm, corporation, or other entity that directly or indirectly competes with OneMain in the business of direct consumer non-real estate finance (including internet lending) and credit insurance, do not give rise to any conflict of interests with OneMain, or do not interfere, individually or in the aggregate, with the performance of obligations under this Agreement.
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Approximate Length
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9 Months (through December 31, 2016)
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Billing Details
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Consultant shall be paid at the rate in 9 monthly installments of $16,667 for a total fee for the Term of $150,000. Consultant shall invoice any expenses incurred monthly as set forth in the Agreement.
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Name & Address
(including fax number) of Member |
Initial Capital Contribution to Series A
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Initial Capital Contribution to Series B
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Additional Capital Contributions to Series A
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Additional Capital Contributions to Series B
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Number of Series A Common Units and
Aggregate Series A Common Unit Percentage |
Number of Series B Common Units and
Aggregate Series B Common Unit Percentage |
Number of Series A Incentive Units and
Aggregate Series A Incentive Unit Percentage |
Number of Series B-1 Incentive Units and Aggregate Series B-1 Incentive Unit Percentage
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Number of Series B-2 Incentive Units and Aggregate Series B-2 Incentive Unit Percentage
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Number of Series B-3 Incentive Units and Aggregate Series B-3 Incentive Unit Percentage
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FCFI Acquisition LLC
c/o Fortress Investment Group LLC
1345 Avenue of the Americas,
46th Floor
New York, NY 10019
(F) (212) 798-6120
Attn: Mr. Randal A. Nardone
E-mail: rnardone@fortress.com
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(F) (212) 735-2000
Attention: Gregory A. Fernicola
Joseph A. Coco
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$1,280,000,000
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1,280,000 Units;
99.9955% |
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AIG Capital Corporation
c/o American International Group, Inc.
80 Pine Street
New York, NY 10005
(F) (212) 425-2175
Attn: General Counsel
and the Observer, as from time to time appointed by AIG Capital
E-mail: Jeff.Swiatek@aig.com
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(F) (212) 310-8007
Attention: Michael J. Aiello
Joseph T. Verdesca
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$240,000,000
(Series A-1); $80,000,000 (Series A-2) |
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240,000
(Series A-1); 80,000 (Series A-2); 99.994% |
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Jay Levine
Address, e-mail and fax number as shown in the Company’s personnel records
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$13.333.33
(Series A-1) |
$44,775.703
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13.422
(Series A-1) 0.004% |
34.124
0.0027% |
2,000 Units;
66.66%
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6,328 Units;
66.66%
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John Anderson
Address, e-mail and fax number as shown in the Company’s personnel records
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$6,666.76
(Series A-1) |
$22,387.920
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6.711
(Series A-1) 0.002% |
17.063
0.0013% |
1,000 Units;
33.33%
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3,164 Units;
33.33%
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Name & Address
(including fax number) of Member |
Initial Capital Contribution to Series A
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Initial Capital Contribution to Series B
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Additional Capital Contributions to Series A
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Additional Capital Contributions to Series B
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Number of Series A Common Units and
Aggregate Series A Common Unit Percentage |
Number of Series B Common Units and
Aggregate Series B Common Unit Percentage |
Number of Series A Incentive Units and
Aggregate Series A Incentive Unit Percentage |
Number of Series B-1 Incentive Units and Aggregate Series B-1 Incentive Unit Percentage
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Number of Series B-2 Incentive Units and Aggregate Series B-2 Incentive Unit Percentage
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Number of Series B-3 Incentive Units and Aggregate Series B-3 Incentive Unit Percentage
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Scott T. Parker
Address, e-mail and fax number as shown in the Company’s personnel records
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$7,659.457
(deemed contribution attributable to purchased Units) |
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3.233
0.0003% |
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1,368 Units
66.6% |
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Robert Hurzeler
Address, e-mail and fax number as shown in the Company’s personnel records
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684 Units
33.3% |
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David Hogan
Address, e-mail and fax number as shown in the Company’s personnel records
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$2,588.460 (deemed contribution attributable to purchased Units)
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1.078
0.0001%
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228 Units
50%
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Bradford Borchers
Address, e-mail and fax number as shown in the Company’s personnel records
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$2,588.460 (deemed contribution attributable to purchased Units)
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1.078
0.0001%
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228 Units
50%
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1.
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I have reviewed this Quarterly Report on Form 10-Q of OneMain Holdings, Inc. (the “registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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May 5, 2017
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/s/ Jay N. Levine
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Jay N. Levine
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President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of OneMain Holdings, Inc. (the “registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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May 5, 2017
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/s/ Scott T. Parker
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Scott T. Parker
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Executive Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Jay N. Levine
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Jay N. Levine
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President and Chief Executive Officer
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/s/ Scott T. Parker
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Scott T. Parker
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Executive Vice President and Chief Financial Officer
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Date:
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May 5, 2017
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