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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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2022 SFC Notes
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$500 million of 6.125% Senior Notes due 2022 issued by SFC on May 15, 2017 and guaranteed by OMH
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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 on December 3, 2014 and guaranteed by OMH
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6.125% SFC Notes
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collectively, the 2022 SFC Notes and the Additional SFC Notes
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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 on April 11, 2016 and guaranteed by OMH
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ABS
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asset-backed securities
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Additional SFC Notes
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$500 million of 6.125% Senior Notes due 2022 issued by SFC on May 30, 2017 and guaranteed by OMH
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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, excluding 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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August 2016 Real Estate Loan Sale
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SFC and certain of its subsidiaries sold a portfolio of second lien mortgage loans for aggregate cash proceeds of $246 million on August 3, 2016
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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 two) 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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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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transaction by which FCFI Acquisition LLC, an affiliate of Fortress, acquired an 80% economic interest of the sole stockholder of SFC for a cash purchase price of $119 million, effective November 30, 2010
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Fourth Avenue Auto Funding LSA
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Loan and Security Agreement, dated September 29, 2017, among Fourth Avenue Auto Funding, LLC, certain third party lenders and other third parties pursuant to which Fourth Avenue Auto Funding, LLC may borrow up to $250 million
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GAAP
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generally accepted accounting principles in the United States of America
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Term or Abbreviation
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Definition
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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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Indenture
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the SFC Base Indenture, together with the SFC Third Supplemental Indenture
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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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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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MetLife
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MetLife, Inc.
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Moody’s
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Moody’s Investors Service, Inc.
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Mystic River Funding LSA
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Loan and Security Agreement, dated September 28, 2017, among Mystic River Funding, LLC, certain third party lenders and other third parties pursuant to which Mystic River Funding, LLC may borrow up to $850 million
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Nationstar
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Nationstar Mortgage LLC, dba “Mr. Cooper”
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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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OneMain Financial Funding VII LSA
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Loan and Security Agreement, dated April 13, 2017, among OneMain Financial Funding VII, LLC, certain third party lenders and other third parties pursuant to which OneMain Financial Funding VII, LLC may borrow up to $650 million
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OneMain Financial Funding IX LSA
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Loan and Security Agreement, dated July 14, 2017, among OneMain Financial Funding IX, LLC, certain third party lenders and other third parties pursuant to which OneMain Financial Funding IX, LLC may borrow up to $600 million
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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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Rocky River Funding LSA
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Loan and Security Agreement, dated September 8, 2017, among Rocky River Funding, LLC, certain third party lenders and other third parties pursuant to which Rocky River Funding, LLC may borrow up to $250 million.
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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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SEC
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U.S. Securities and Exchange Commission
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Term or Abbreviation
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Definition
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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 Third Supplemental Indenture
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supplemental indenture dated as of May 15, 2017, 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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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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Thur River Funding LSA
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Loan and Security Agreement, dated June 29, 2017, among Thur River Funding, LLC, certain third party lenders and other third parties pursuant to which Thur River Funding, LLC may borrow up to $350 million
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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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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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September 30,
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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916
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$
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579
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Investment securities
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1,668
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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 $9.8 billion in 2017 and $9.5 billion in 2016)
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14,356
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13,577
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Real estate loans
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133
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|
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144
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Retail sales finance
|
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7
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|
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11
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Net finance receivables
|
|
14,496
|
|
|
13,732
|
|
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Unearned insurance premium and claim reserves
|
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(574
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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 $463 million in 2017 and $501 million in 2016)
|
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(698
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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
|
|
13,224
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|
|
12,457
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Finance receivables held for sale
|
|
137
|
|
|
153
|
|
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Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $553 million in 2017 and $552 million in 2016)
|
|
571
|
|
|
568
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|
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Goodwill
|
|
1,422
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|
|
1,422
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|
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Other intangible assets
|
|
452
|
|
|
492
|
|
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Other assets
|
|
660
|
|
|
688
|
|
||
|
|
|
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|
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Total assets
|
|
$
|
19,050
|
|
|
$
|
18,123
|
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
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Long-term debt (includes debt of consolidated VIEs of $8.6 billion in 2017 and $8.2 billion in 2016)
|
|
$
|
14,619
|
|
|
$
|
13,959
|
|
Insurance claims and policyholder liabilities
|
|
744
|
|
|
757
|
|
||
Deferred and accrued taxes
|
|
16
|
|
|
9
|
|
||
Other liabilities (includes other liabilities of consolidated VIEs of $14 million in 2017 and $12 million in 2016)
|
|
441
|
|
|
332
|
|
||
Total liabilities
|
|
15,820
|
|
|
15,057
|
|
||
Commitments and contingent liabilities (Note 14)
|
|
|
|
|
|
|||
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|
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|
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Shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, par value $.01 per share; 2,000,000,000 shares authorized, 135,306,282 and 134,867,868 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively
|
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
|
1,557
|
|
|
1,548
|
|
||
Accumulated other comprehensive income (loss)
|
|
5
|
|
|
(6
|
)
|
||
Retained earnings
|
|
1,667
|
|
|
1,523
|
|
||
Total shareholders’ equity
|
|
3,230
|
|
|
3,066
|
|
||
|
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
|
$
|
19,050
|
|
|
$
|
18,123
|
|
(dollars in millions, except per share amounts)
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|
Three Months Ended September 30,
|
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Nine Months Ended September 30,
|
||||||||||||
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2017
|
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2016
|
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2017
|
|
2016
|
|||||||||
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|
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Interest income:
|
|
|
|
|
|
|
|
|
||||||||
Finance charges
|
|
$
|
805
|
|
|
$
|
763
|
|
|
$
|
2,329
|
|
|
$
|
2,271
|
|
Finance receivables held for sale originated as held for investment
|
|
3
|
|
|
7
|
|
|
10
|
|
|
71
|
|
||||
Total interest income
|
|
808
|
|
|
770
|
|
|
2,339
|
|
|
2,342
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
207
|
|
|
215
|
|
|
612
|
|
|
655
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net interest income
|
|
601
|
|
|
555
|
|
|
1,727
|
|
|
1,687
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Provision for finance receivable losses
|
|
243
|
|
|
263
|
|
|
724
|
|
|
674
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net interest income after provision for finance receivable losses
|
|
358
|
|
|
292
|
|
|
1,003
|
|
|
1,013
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|
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|
|
|
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|
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|
||||||||
Other revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance
|
|
107
|
|
|
114
|
|
|
314
|
|
|
342
|
|
||||
Investment
|
|
19
|
|
|
22
|
|
|
58
|
|
|
66
|
|
||||
Net loss on repurchases and repayments of debt
|
|
(1
|
)
|
|
—
|
|
|
(29
|
)
|
|
(16
|
)
|
||||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
||||
Net gain (loss) on sales of personal and real estate loans
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
18
|
|
||||
Other
|
|
27
|
|
|
26
|
|
|
71
|
|
|
49
|
|
||||
Total other revenues
|
|
152
|
|
|
158
|
|
|
414
|
|
|
626
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Salaries and benefits
|
|
185
|
|
|
191
|
|
|
562
|
|
|
597
|
|
||||
Acquisition-related transaction and integration expenses
|
|
22
|
|
|
21
|
|
|
59
|
|
|
75
|
|
||||
Other operating expenses
|
|
134
|
|
|
168
|
|
|
413
|
|
|
512
|
|
||||
Insurance policy benefits and claims
|
|
48
|
|
|
37
|
|
|
139
|
|
|
128
|
|
||||
Total other expenses
|
|
389
|
|
|
417
|
|
|
1,173
|
|
|
1,312
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
|
121
|
|
|
33
|
|
|
244
|
|
|
327
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income taxes
|
|
52
|
|
|
8
|
|
|
100
|
|
|
111
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
69
|
|
|
25
|
|
|
144
|
|
|
216
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to OneMain Holdings, Inc.
|
|
$
|
69
|
|
|
$
|
25
|
|
|
$
|
144
|
|
|
$
|
188
|
|
|
|
|
|
|
|
|
|
|
||||||||
Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
135,253,493
|
|
|
134,730,251
|
|
|
135,240,664
|
|
|
134,717,870
|
|
||||
Diluted
|
|
135,711,212
|
|
|
134,987,134
|
|
|
135,599,369
|
|
|
134,949,337
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
0.52
|
|
|
$
|
0.19
|
|
|
$
|
1.07
|
|
|
$
|
1.40
|
|
Diluted
|
|
$
|
0.51
|
|
|
$
|
0.19
|
|
|
$
|
1.07
|
|
|
$
|
1.39
|
|
(dollars in millions)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
69
|
|
|
$
|
25
|
|
|
$
|
144
|
|
|
$
|
216
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net change in unrealized gains on non-credit impaired available-for-sale securities
|
|
3
|
|
|
9
|
|
|
23
|
|
|
67
|
|
||||
Foreign currency translation adjustments
|
|
3
|
|
|
(1
|
)
|
|
7
|
|
|
6
|
|
||||
Income tax effect:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized gains on non-credit impaired available-for-sale securities
|
|
(1
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|
(23
|
)
|
||||
Foreign currency translation adjustments
|
|
(1
|
)
|
|
1
|
|
|
(3
|
)
|
|
(2
|
)
|
||||
Other comprehensive income, net of tax, before reclassification adjustments
|
|
4
|
|
|
6
|
|
|
19
|
|
|
48
|
|
||||
Reclassification adjustments included in net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized gains on available-for-sale securities
|
|
(4
|
)
|
|
(3
|
)
|
|
(12
|
)
|
|
(9
|
)
|
||||
Net realized gain on foreign currency translation adjustments
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Income tax effect:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized gains on available-for-sale securities
|
|
2
|
|
|
1
|
|
|
4
|
|
|
3
|
|
||||
Reclassification adjustments included in net income, net of tax
|
|
(2
|
)
|
|
(7
|
)
|
|
(8
|
)
|
|
(11
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
2
|
|
|
(1
|
)
|
|
11
|
|
|
37
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
|
71
|
|
|
24
|
|
|
155
|
|
|
253
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income attributable to OneMain Holdings, Inc.
|
|
$
|
71
|
|
|
$
|
24
|
|
|
$
|
155
|
|
|
$
|
225
|
|
|
|
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
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|||||||
Withholding tax on share-based compensation
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144
|
|
|
144
|
|
|
—
|
|
|
144
|
|
|||||||
Balance, September 30, 2017
|
|
$
|
1
|
|
|
$
|
1,557
|
|
|
$
|
5
|
|
|
$
|
1,667
|
|
|
$
|
3,230
|
|
|
$
|
—
|
|
|
$
|
3,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, January 1, 2016
|
|
$
|
1
|
|
|
$
|
1,533
|
|
|
$
|
(33
|
)
|
|
$
|
1,308
|
|
|
$
|
2,809
|
|
|
$
|
(79
|
)
|
|
$
|
2,730
|
|
Share-based compensation expense, net of forfeitures
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||||
Withholding tax on share-based compensation
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||||
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
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
37
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
188
|
|
|
188
|
|
|
28
|
|
|
216
|
|
|||||||
Balance, September 30, 2016
|
|
$
|
1
|
|
|
$
|
1,545
|
|
|
$
|
4
|
|
|
$
|
1,496
|
|
|
$
|
3,046
|
|
|
$
|
—
|
|
|
$
|
3,046
|
|
(dollars in millions)
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
144
|
|
|
$
|
216
|
|
Reconciling adjustments:
|
|
|
|
|
|
|
||
Provision for finance receivable losses
|
|
724
|
|
|
674
|
|
||
Depreciation and amortization
|
|
265
|
|
|
416
|
|
||
Deferred income tax benefit
|
|
(32
|
)
|
|
(99
|
)
|
||
Net gain on liquidation of United Kingdom subsidiary
|
|
—
|
|
|
(5
|
)
|
||
Net gain on sales of personal and real estate loans
|
|
—
|
|
|
(18
|
)
|
||
Net loss on repurchases and repayments of debt
|
|
29
|
|
|
16
|
|
||
Share-based compensation expense, net of forfeitures
|
|
14
|
|
|
16
|
|
||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
(167
|
)
|
||
Other
|
|
(12
|
)
|
|
(7
|
)
|
||
Cash flows due to changes in:
|
|
|
|
|
|
|
||
Other assets and other liabilities
|
|
119
|
|
|
92
|
|
||
Insurance claims and policyholder liabilities
|
|
(32
|
)
|
|
(50
|
)
|
||
Taxes receivable and payable
|
|
36
|
|
|
49
|
|
||
Accrued interest and finance charges
|
|
(15
|
)
|
|
2
|
|
||
Other, net
|
|
—
|
|
|
1
|
|
||
Net cash provided by operating activities
|
|
1,240
|
|
|
1,136
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Net principal originations of finance receivables held for investment and held for sale
|
|
(1,582
|
)
|
|
(998
|
)
|
||
Proceeds on sales of finance receivables held for sale originated as held for investment
|
|
—
|
|
|
870
|
|
||
Proceeds from sale of SpringCastle interests, net of restricted cash released
|
|
—
|
|
|
26
|
|
||
Cash received from CitiFinancial Credit Company
|
|
—
|
|
|
23
|
|
||
Available-for-sale securities purchased
|
|
(508
|
)
|
|
(446
|
)
|
||
Trading and other securities purchased
|
|
—
|
|
|
(16
|
)
|
||
Available-for-sale securities called, sold, and matured
|
|
619
|
|
|
597
|
|
||
Trading and other securities called, sold, and matured
|
|
9
|
|
|
52
|
|
||
Proceeds from sale of real estate owned
|
|
3
|
|
|
7
|
|
||
Other, net
|
|
(4
|
)
|
|
(26
|
)
|
||
Net cash provided by (used for) investing activities
|
|
(1,463
|
)
|
|
89
|
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt, net of commissions
|
|
3,743
|
|
|
4,552
|
|
||
Repayments of long-term debt
|
|
(3,176
|
)
|
|
(6,155
|
)
|
||
Distributions to joint venture partners
|
|
—
|
|
|
(18
|
)
|
||
Withholding tax on share-based compensation
|
|
(5
|
)
|
|
(4
|
)
|
||
Net cash provided by (used for) financing activities
|
|
562
|
|
|
(1,625
|
)
|
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)
|
|
|
|
|
||||
|
|
|
|
|
||||
(dollars in millions)
|
|
At or for the
Nine Months Ended September 30, |
||||||
|
2017
|
|
2016
|
|||||
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
|
1
|
|
|
1
|
|
||
|
|
|
|
|
||||
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents
|
|
340
|
|
|
(399
|
)
|
||
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
|
|
$
|
1,487
|
|
|
$
|
1,216
|
|
|
|
|
|
|
||||
Supplemental cash flow information
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
916
|
|
|
$
|
658
|
|
Restricted cash and restricted cash equivalents
|
|
571
|
|
|
558
|
|
||
Total cash and cash equivalents and restricted cash and restricted cash equivalents
|
|
$
|
1,487
|
|
|
$
|
1,216
|
|
|
|
|
|
|
||||
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)
|
|
$
|
—
|
|
|
$
|
1,895
|
|
Transfer of finance receivables to real estate owned
|
|
7
|
|
|
7
|
|
||
Net unsettled investment security dispositions (purchases)
|
|
1
|
|
|
(15
|
)
|
•
|
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
September 30, 2017
, we had over
2.3 million
personal loans representing
$14.4 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
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross receivables *
|
|
$
|
15,804
|
|
|
$
|
132
|
|
|
$
|
8
|
|
|
$
|
15,944
|
|
Unearned finance charges and points and fees
|
|
(1,742
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1,743
|
)
|
||||
Accrued finance charges
|
|
187
|
|
|
1
|
|
|
—
|
|
|
188
|
|
||||
Deferred origination costs
|
|
107
|
|
|
—
|
|
|
—
|
|
|
107
|
|
||||
Total
|
|
$
|
14,356
|
|
|
$
|
133
|
|
|
$
|
7
|
|
|
$
|
14,496
|
|
|
|
|
|
|
|
|
|
|
||||||||
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 premium, net of discount 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 premium, net of discount 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
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Performing
|
|
|
|
|
|
|
|
|
||||||||
Current
|
|
$
|
13,719
|
|
|
$
|
103
|
|
|
$
|
7
|
|
|
$
|
13,829
|
|
30-59 days past due
|
|
208
|
|
|
8
|
|
|
—
|
|
|
216
|
|
||||
60-89 days past due
|
|
134
|
|
|
2
|
|
|
—
|
|
|
136
|
|
||||
Total performing
|
|
14,061
|
|
|
113
|
|
|
7
|
|
|
14,181
|
|
||||
Nonperforming
|
|
|
|
|
|
|
|
|
||||||||
90-179 days past due
|
|
289
|
|
|
4
|
|
|
—
|
|
|
293
|
|
||||
180 days or more past due
|
|
6
|
|
|
16
|
|
|
—
|
|
|
22
|
|
||||
Total nonperforming
|
|
295
|
|
|
20
|
|
|
—
|
|
|
315
|
|
||||
Total
|
|
$
|
14,356
|
|
|
$
|
133
|
|
|
$
|
7
|
|
|
$
|
14,496
|
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
||||||
|
|
|
|
|
|
|
||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
||||
Carrying amount, net of allowance
|
|
$
|
199
|
|
|
$
|
60
|
|
|
$
|
259
|
|
Outstanding balance (b)
|
|
281
|
|
|
97
|
|
|
378
|
|
|||
Allowance for purchased credit impaired finance receivable losses
|
|
18
|
|
|
9
|
|
|
27
|
|
|||
|
|
|
|
|
|
|
||||||
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)
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
|
|
|
|
|
||||
Carrying amount
|
|
$
|
46
|
|
|
$
|
54
|
|
Outstanding balance
|
|
75
|
|
|
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 September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
55
|
|
|
$
|
104
|
|
Accretion
|
|
(7
|
)
|
|
—
|
|
|
(1
|
)
|
|
(8
|
)
|
||||
Balance at end of period
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
96
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
87
|
|
|
$
|
—
|
|
|
$
|
61
|
|
|
$
|
148
|
|
Accretion
|
|
(15
|
)
|
|
—
|
|
|
(1
|
)
|
|
(16
|
)
|
||||
Reclassifications from nonaccretable difference (a)
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||
Transfers due to finance receivables sold
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
||||
Balance at end of period
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
129
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
119
|
|
Accretion (b)
|
|
(27
|
)
|
|
—
|
|
|
(4
|
)
|
|
(31
|
)
|
||||
Reclassifications from (to) nonaccretable difference (a)
|
|
10
|
|
|
—
|
|
|
(2
|
)
|
|
8
|
|
||||
Balance at end of period
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
96
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
151
|
|
|
$
|
375
|
|
|
$
|
66
|
|
|
$
|
592
|
|
Accretion (b)
|
|
(56
|
)
|
|
(16
|
)
|
|
(5
|
)
|
|
(77
|
)
|
||||
Reclassification from nonaccretable difference (a)
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||
Transfer due to finance receivables sold
|
|
—
|
|
|
(359
|
)
|
|
(11
|
)
|
|
(370
|
)
|
||||
Other (c)
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||
Balance at end of period
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
129
|
|
(a)
|
Reclassifications from (to) nonaccretable difference represents the increases (decreases) in accretable yield resulting from higher (lower) estimated undiscounted cash flows.
|
(b)
|
Accretion on our purchased credit impaired FA Loans held for sale was
$3 million
and
$4 million
for the
nine months
ended
September 30, 2017
and 2016, respectively.
|
(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
|
||||||
|
|
|
|
|
|
|
|
|||||
September 30, 2017
|
|
|
|
|
|
|
|
|||||
TDR gross finance receivables
|
|
$
|
283
|
|
|
$
|
141
|
|
|
$
|
424
|
|
TDR net finance receivables
|
|
284
|
|
|
142
|
|
|
426
|
|
|||
Allowance for TDR finance receivable losses
|
|
131
|
|
|
12
|
|
|
143
|
|
|||
|
|
|
|
|
|
|
|
|||||
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)
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
|
|
|
|
|
|
|||
TDR gross finance receivables
|
|
$
|
91
|
|
|
$
|
89
|
|
TDR net finance receivables
|
|
92
|
|
|
90
|
|
(dollars in millions)
|
|
Personal
Loans (a)
|
|
Real Estate
Loans (b)
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|||
TDR average net receivables
|
|
$
|
268
|
|
|
$
|
142
|
|
|
$
|
410
|
|
TDR finance charges recognized
|
|
9
|
|
|
3
|
|
|
12
|
|
|||
|
|
|
|
|
|
|
||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
||||||
TDR average net receivables
|
|
$
|
102
|
|
|
$
|
159
|
|
|
$
|
261
|
|
TDR finance charges recognized
|
|
4
|
|
|
3
|
|
|
7
|
|
|||
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
||||||
TDR average net receivables
|
|
$
|
206
|
|
|
$
|
139
|
|
|
$
|
345
|
|
TDR finance charges recognized
|
|
24
|
|
|
7
|
|
|
31
|
|
|||
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
||||||
TDR average net receivables
|
|
$
|
83
|
|
|
$
|
187
|
|
|
$
|
270
|
|
TDR finance charges recognized
|
|
7
|
|
|
9
|
|
|
16
|
|
(a)
|
TDR personal loans held for sale included in the table above were immaterial.
|
(b)
|
TDR real estate loans held for sale included in the table above were as follows:
|
(dollars in millions)
|
|
|
Real Estate
Loans
|
|
||
|
|
|
|
|
||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
TDR average net receivables
|
|
|
$
|
92
|
|
|
TDR finance charges recognized
|
|
|
2
|
|
|
|
|
|
|
|
|
||
Three Months Ended September 30, 2016
|
|
|
|
|
||
TDR average net receivables
|
|
|
$
|
112
|
|
|
TDR finance charges recognized
|
|
|
2
|
|
|
|
|
|
|
|
|
||
Nine Months Ended September 30, 2017
|
|
|
|
|
||
TDR average net receivables
|
|
|
$
|
90
|
|
|
TDR finance charges recognized
|
|
|
5
|
|
|
|
|
|
|
|
|
||
Nine Months Ended September 30, 2016
|
|
|
|
|
||
TDR average net receivables
|
|
|
$
|
105
|
|
|
TDR finance charges recognized
|
|
|
5
|
|
|
(dollars in millions)
|
|
Personal
Loans (a)
|
|
SpringCastle
Portfolio
|
|
Real Estate
Loans (a) |
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pre-modification TDR net finance receivables
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
78
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
|
|
|
|
||||||||
Rate reduction
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
62
|
|
Other (b)
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Total post-modification TDR net finance receivables
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
79
|
|
Number of TDR accounts
|
|
11,272
|
|
|
—
|
|
|
63
|
|
|
11,335
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
||||||||
Pre-modification TDR net finance receivables
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
51
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
|
|
|
|
||||||||
Rate reduction
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
46
|
|
Other (b)
|
|
3
|
|
|
—
|
|
|
1
|
|
|
4
|
|
||||
Total post-modification TDR net finance receivables
|
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
50
|
|
Number of TDR accounts
|
|
6,241
|
|
|
—
|
|
|
86
|
|
|
6,327
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Pre-modification TDR net finance receivables
|
|
$
|
236
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
250
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
|
|
|
|
||||||||
Rate reduction
|
|
$
|
178
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
193
|
|
Other (b)
|
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||
Total post-modification TDR net finance receivables
|
|
$
|
234
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
249
|
|
Number of TDR accounts
|
|
32,293
|
|
|
—
|
|
|
477
|
|
|
32,770
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
||||||||
Pre-modification TDR net finance receivables
|
|
$
|
148
|
|
|
$
|
1
|
|
|
$
|
13
|
|
|
$
|
162
|
|
Post-modification TDR net finance receivables:
|
|
|
|
|
|
|
|
|
|
|||||||
Rate reduction
|
|
$
|
136
|
|
|
$
|
1
|
|
|
$
|
11
|
|
|
$
|
148
|
|
Other (b)
|
|
8
|
|
|
—
|
|
|
3
|
|
|
11
|
|
||||
Total post-modification TDR net finance receivables
|
|
$
|
144
|
|
|
$
|
1
|
|
|
$
|
14
|
|
|
$
|
159
|
|
Number of TDR accounts
|
|
19,866
|
|
|
157
|
|
|
291
|
|
|
20,314
|
|
(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
|
||
|
|
|
|
|
Three Months Ended September 30, 2017
|
|
|
|
|
TDR net finance receivables *
|
|
$
|
21
|
|
Number of TDR accounts
|
|
3,759
|
|
|
|
|
|
||
Three Months Ended September 30, 2016
|
|
|
||
TDR net finance receivables *
|
|
$
|
7
|
|
Number of TDR accounts
|
|
1,080
|
|
|
|
|
|
||
Nine Months Ended September 30, 2017
|
|
|
||
TDR net finance receivables *
|
|
$
|
63
|
|
Number of TDR accounts
|
|
10,357
|
|
|
|
|
|
||
Nine Months Ended September 30, 2016
|
|
|
||
TDR net finance receivables *
|
|
$
|
13
|
|
Number of TDR accounts
|
|
2,120
|
|
*
|
Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted.
|
(dollars in millions)
|
|
Personal
Loans |
|
SpringCastle
Portfolio
|
|
Real Estate
Loans
|
|
Retail
Sales Finance |
|
Consolidated Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
656
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
676
|
|
Provision for finance receivable losses
|
|
238
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
243
|
|
|||||
Charge-offs
|
|
(245
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(246
|
)
|
|||||
Recoveries
|
|
24
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
25
|
|
|||||
Balance at end of period
|
|
$
|
673
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
1
|
|
|
$
|
698
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
587
|
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
1
|
|
|
$
|
608
|
|
Provision for finance receivable losses
|
|
261
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
263
|
|
|||||
Charge-offs
|
|
(213
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(217
|
)
|
|||||
Recoveries
|
|
17
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
18
|
|
|||||
Balance at end of period
|
|
$
|
652
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
672
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
669
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
689
|
|
Provision for finance receivable losses
|
|
717
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
724
|
|
|||||
Charge-offs
|
|
(794
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(798
|
)
|
|||||
Recoveries
|
|
81
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
83
|
|
|||||
Balance at end of period
|
|
$
|
673
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
1
|
|
|
$
|
698
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at beginning of period
|
|
$
|
541
|
|
|
$
|
4
|
|
|
$
|
46
|
|
|
$
|
1
|
|
|
$
|
592
|
|
Provision for finance receivable losses
|
|
652
|
|
|
14
|
|
|
8
|
|
|
—
|
|
|
674
|
|
|||||
Charge-offs
|
|
(585
|
)
|
|
(17
|
)
|
|
(10
|
)
|
|
(1
|
)
|
|
(613
|
)
|
|||||
Recoveries
|
|
44
|
|
|
3
|
|
|
4
|
|
|
1
|
|
|
52
|
|
|||||
Other *
|
|
—
|
|
|
(4
|
)
|
|
(29
|
)
|
|
—
|
|
|
(33
|
)
|
|||||
Balance at end of period
|
|
$
|
652
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
672
|
|
*
|
Other consists of:
|
•
|
the elimination of allowance for finance receivable losses due to the transfer of real estate loans held for investment to finance receivables held for sale on June 30, 2016; and
|
•
|
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
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance for finance receivable losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Collectively evaluated for impairment
|
|
$
|
524
|
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
528
|
|
Purchased credit impaired finance receivables
|
|
18
|
|
|
9
|
|
|
—
|
|
|
27
|
|
||||
TDR finance receivables
|
|
131
|
|
|
12
|
|
|
—
|
|
|
143
|
|
||||
Total
|
|
$
|
673
|
|
|
$
|
24
|
|
|
$
|
1
|
|
|
$
|
698
|
|
|
|
|
|
|
|
|
|
|
||||||||
Finance receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Collectively evaluated for impairment
|
|
$
|
13,855
|
|
|
$
|
60
|
|
|
$
|
7
|
|
|
$
|
13,922
|
|
Purchased credit impaired finance receivables
|
|
217
|
|
|
23
|
|
|
—
|
|
|
240
|
|
||||
TDR finance receivables
|
|
284
|
|
|
50
|
|
|
—
|
|
|
334
|
|
||||
Total
|
|
$
|
14,356
|
|
|
$
|
133
|
|
|
$
|
7
|
|
|
$
|
14,496
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for finance receivable losses as a percentage of finance receivables
|
|
4.69
|
%
|
|
18.19
|
%
|
|
8.96
|
%
|
|
4.81
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
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
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30
|
|
Obligations of states, municipalities, and political subdivisions
|
|
135
|
|
|
1
|
|
|
—
|
|
|
136
|
|
||||
Certificates of deposit and commercial paper
|
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
||||
Non-U.S. government and government sponsored entities
|
|
126
|
|
|
—
|
|
|
(2
|
)
|
|
124
|
|
||||
Corporate debt
|
|
910
|
|
|
13
|
|
|
(3
|
)
|
|
920
|
|
||||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
RMBS
|
|
92
|
|
|
—
|
|
|
—
|
|
|
92
|
|
||||
CMBS
|
|
97
|
|
|
—
|
|
|
(1
|
)
|
|
96
|
|
||||
CDO/ABS
|
|
94
|
|
|
—
|
|
|
—
|
|
|
94
|
|
||||
Total bonds
|
|
1,529
|
|
|
14
|
|
|
(6
|
)
|
|
1,537
|
|
||||
Preferred stock (a)
|
|
17
|
|
|
—
|
|
|
(1
|
)
|
|
16
|
|
||||
Common stock (a)
|
|
22
|
|
|
2
|
|
|
—
|
|
|
24
|
|
||||
Other long-term investments
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total (b)
|
|
$
|
1,569
|
|
|
$
|
16
|
|
|
$
|
(7
|
)
|
|
$
|
1,578
|
|
|
|
|
|
|
|
|
|
|
||||||||
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
September 30, 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
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. government and government sponsored entities
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
—
|
|
Obligations of states, municipalities, and political subdivisions
|
|
29
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
47
|
|
|
—
|
|
||||||
Non-U.S. government and government sponsored entities
|
|
104
|
|
|
(2
|
)
|
|
3
|
|
|
—
|
|
|
107
|
|
|
(2
|
)
|
||||||
Corporate debt
|
|
204
|
|
|
(2
|
)
|
|
90
|
|
|
(1
|
)
|
|
294
|
|
|
(3
|
)
|
||||||
RMBS
|
|
35
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
58
|
|
|
—
|
|
||||||
CMBS
|
|
34
|
|
|
—
|
|
|
33
|
|
|
(1
|
)
|
|
67
|
|
|
(1
|
)
|
||||||
CDO/ABS
|
|
38
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
59
|
|
|
—
|
|
||||||
Total bonds
|
|
462
|
|
|
(4
|
)
|
|
192
|
|
|
(2
|
)
|
|
654
|
|
|
(6
|
)
|
||||||
Preferred stock
|
|
5
|
|
|
—
|
|
|
7
|
|
|
(1
|
)
|
|
12
|
|
|
(1
|
)
|
||||||
Common stock
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||||
Other long-term investments
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Total
|
|
$
|
473
|
|
|
$
|
(4
|
)
|
|
$
|
199
|
|
|
$
|
(3
|
)
|
|
$
|
672
|
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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 September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from sales and redemptions
|
|
$
|
157
|
|
|
$
|
57
|
|
|
$
|
437
|
|
|
$
|
344
|
|
|
|
|
|
|
|
|
|
|
||||||||
Realized gains
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
13
|
|
|
$
|
10
|
|
Realized losses
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net realized gains
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
12
|
|
|
$
|
9
|
|
(dollars in millions)
|
|
Fair
Value
|
|
Amortized
Cost
|
||||
|
|
|
|
|
||||
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
|
|
|
|
|
|
|
||
Due in 1 year or less
|
|
$
|
212
|
|
|
$
|
212
|
|
Due after 1 year through 5 years
|
|
550
|
|
|
548
|
|
||
Due after 5 years through 10 years
|
|
301
|
|
|
298
|
|
||
Due after 10 years
|
|
192
|
|
|
188
|
|
||
Mortgage-backed, asset-backed, and collateralized securities
|
|
282
|
|
|
283
|
|
||
Total
|
|
$
|
1,537
|
|
|
$
|
1,529
|
|
(dollars in millions)
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
|
||||
Fixed maturity other securities:
|
|
|
|
|
|
|
||
Bonds
|
|
|
|
|
|
|
||
Non-U.S. government and government sponsored entities
|
|
$
|
1
|
|
|
$
|
1
|
|
Corporate debt
|
|
77
|
|
|
85
|
|
||
Mortgage-backed, asset-backed, and collateralized:
|
|
|
|
|
|
|||
RMBS
|
|
1
|
|
|
1
|
|
||
CMBS
|
|
—
|
|
|
1
|
|
||
CDO/ABS
|
|
4
|
|
|
5
|
|
||
Total bonds
|
|
83
|
|
|
93
|
|
||
Preferred stock
|
|
6
|
|
|
6
|
|
||
Total
|
|
$
|
89
|
|
|
$
|
99
|
|
|
|
Senior Debt
|
|
|
|
|
||||||||||
(dollars in millions)
|
|
Securitizations
|
|
Medium
Term
Notes
|
|
Junior
Subordinated
Debt
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest rates (a)
|
|
2.03% - 7.50%
|
|
|
5.25% - 8.25%
|
|
|
3.05
|
%
|
|
|
|||||
|
|
|
|
|
|
|
|
|
||||||||
Fourth quarter 2017
|
|
$
|
—
|
|
|
$
|
557
|
|
|
$
|
—
|
|
|
$
|
557
|
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2019
|
|
—
|
|
|
1,396
|
|
|
—
|
|
|
1,396
|
|
||||
2020
|
|
—
|
|
|
1,299
|
|
|
—
|
|
|
1,299
|
|
||||
2021
|
|
—
|
|
|
1,446
|
|
|
—
|
|
|
1,446
|
|
||||
2022
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
1,000
|
|
||||
2023-2067
|
|
—
|
|
|
300
|
|
|
350
|
|
|
650
|
|
||||
Securitizations (b)
|
|
8,599
|
|
|
—
|
|
|
—
|
|
|
8,599
|
|
||||
Total principal maturities
|
|
$
|
8,599
|
|
|
$
|
5,998
|
|
|
$
|
350
|
|
|
$
|
14,947
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total carrying amount
|
|
$
|
8,577
|
|
|
$
|
5,870
|
|
|
$
|
172
|
|
|
$
|
14,619
|
|
Debt issuance costs (c)
|
|
$
|
(23
|
)
|
|
$
|
(21
|
)
|
|
$
|
—
|
|
|
$
|
(44
|
)
|
(a)
|
The interest rates shown are the range of contractual rates in effect at
September 30, 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
3.05%
as of
September 30, 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 have a stated maturity date but are not included in the above maturities by period due to their variable monthly repayments, which may result in pay-off prior to the stated maturity date. At
September 30, 2017
, there were
no
amounts drawn under our revolving conduit facilities. 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
$19 million
at
September 30, 2017
and are reported in other assets.
|
(dollars in millions)
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
3
|
|
|
$
|
3
|
|
Finance receivables:
|
|
|
|
|
|
|
||
Personal loans
|
|
9,752
|
|
|
9,509
|
|
||
Allowance for finance receivable losses
|
|
463
|
|
|
501
|
|
||
Restricted cash and restricted cash equivalents
|
|
553
|
|
|
552
|
|
||
Other assets
|
|
13
|
|
|
14
|
|
||
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||
Long-term debt
|
|
$
|
8,577
|
|
|
$
|
8,240
|
|
Other liabilities
|
|
16
|
|
|
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
|
|
|
SLFT 2017-A (d)
|
|
619
|
|
|
2.98
|
%
|
|
3 years
|
|
|
OMFIT 2014-1 (e)
|
|
103
|
|
|
3.24
|
%
|
|
2 years
|
|
|
OMFIT 2014-2 (f)
|
|
426
|
|
|
3.74
|
%
|
|
2 years
|
|
|
OMFIT 2015-1 (g)
|
|
1,229
|
|
|
3.74
|
%
|
|
3 years
|
|
|
OMFIT 2015-2 (h)
|
|
946
|
|
|
3.23
|
%
|
|
2 years
|
|
|
OMFIT 2015-3 (i)
|
|
293
|
|
|
4.21
|
%
|
|
5 years
|
|
|
OMFIT 2016-1 (j)
|
|
459
|
|
|
4.01
|
%
|
|
3 years
|
|
|
OMFIT 2016-2 (k)
|
|
816
|
|
|
4.50
|
%
|
|
2 years
|
|
|
OMFIT 2016-3 (l)
|
|
317
|
|
|
4.33
|
%
|
|
5 years
|
|
|
OMFIT 2017-1 (m)
|
|
900
|
|
|
2.62
|
%
|
|
2 years
|
|
|
Total consumer securitizations
|
|
8,085
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
||||
Auto Securitizations:
|
|
|
|
|
|
|
||||
ODART 2016-1 (n)
|
|
246
|
|
|
2.70
|
%
|
|
—
|
|
|
ODART 2017-1 (o)
|
|
268
|
|
|
2.61
|
%
|
|
1 year
|
|
|
Total auto securitizations
|
|
514
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
||||
Total secured structured financings
|
|
$
|
8,599
|
|
|
|
|
|
(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)
|
SLFT 2017-A Securitization.
On June 28, 2017, we issued
$652 million
of notes backed by personal loans. The notes mature in July 2030. We initially retained
$26 million
of the Class A notes,
$2 million
of the Class B notes,
$2 million
of the Class C notes and
$3 million
of the Class D notes.
|
(e)
|
OMFIT 2014-1 Securitization.
On April 17, 2014, we issued
$760 million
of notes backed by personal loans. The notes mature in June 2024.
|
(f)
|
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.
|
(g)
|
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.
|
(h)
|
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.
|
(i)
|
OMFIT 2015-3 Securitization.
On September 29, 2015, we issued
$293 million
of notes backed by personal loans. The notes mature in November 2028.
|
(j)
|
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.
|
(k)
|
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.
|
(l)
|
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.
|
(n)
|
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.
|
(o)
|
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 |
||||
|
|
|
|
|
|
|
||||
First Avenue Funding, LLC
|
|
$
|
250
|
|
|
$
|
—
|
|
|
June 2018
|
Seine River Funding, LLC
|
|
500
|
|
|
—
|
|
|
December 2019
|
||
OneMain Financial B4 Warehouse Trust
|
|
750
|
|
|
—
|
|
|
February 2019
|
||
OneMain Financial B6 Warehouse Trust
|
|
600
|
|
|
—
|
|
|
February 2019
|
||
Rocky River Funding, LLC (a)
|
|
250
|
|
|
—
|
|
|
September 2019
|
||
OneMain Financial Funding VII, LLC (b)
|
|
650
|
|
|
—
|
|
|
October 2019
|
||
Thur River Funding, LLC (c)
|
|
350
|
|
|
—
|
|
|
June 2020
|
||
OneMain Financial Funding IX, LLC (d)
|
|
600
|
|
|
—
|
|
|
June 2020
|
||
Mystic River Funding, LLC (e)
|
|
850
|
|
|
—
|
|
|
September 2020
|
||
Fourth Avenue Auto Funding, LLC (f)
|
|
250
|
|
|
—
|
|
|
September 2020
|
||
Total
|
|
$
|
5,050
|
|
|
$
|
—
|
|
|
|
(a)
|
On September 8, 2017, we entered into the Rocky River Funding LSA with certain third party lenders. We may borrow up to a maximum principal balance of
$250 million
under the Rocky River Funding LSA, and amounts borrowed will be backed by personal loans acquired from subsidiaries and affiliates of OMFH. Following the revolving period, the principal balance of the outstanding loans, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in full in October 2020.
|
(b)
|
Concurrent with the termination of the note purchase agreements with the Midbrook 2013-VFN1 Trust and the OneMain Financial B5 Warehouse Trust discussed below, on April 13, 2017, we entered into the OneMain Financial Funding VII LSA with the same third party lenders who were parties to the terminated note purchase agreements. We may borrow up to a maximum principal balance of $
650 million
under the OneMain Financial Funding VII LSA, and amounts borrowed will be backed by personal loans acquired from subsidiaries of OMFH from time to time. Following the revolving period, the principal balance of the outstanding loans, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in full in November 2021.
|
(c)
|
Concurrent with the termination of the note purchase agreement with the Sumner Brook 2013-VFN1 Trust discussed below, on June 29, 2017, we entered into the Thur River Funding LSA with the same third party lenders who were parties to the terminated note purchase agreement. We may borrow up to a maximum principal balance of
$350 million
under the Thur River Funding LSA, and amounts borrowed will be backed by personal loans acquired from subsidiaries and affiliates of SFC from time to time. Following the revolving period, the principal balance of the outstanding loans, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in full in February 2027.
|
(f)
|
Concurrent with the termination of the note purchase agreement with the Second Avenue Funding, LLC discussed below, on September 29, 2017, we entered into the Fourth Avenue Auto Funding LSA with the same third party lenders who were parties to the terminated note purchase agreement. We may borrow up to a maximum principal balance of
$250 million
under the Fourth Avenue Auto Funding LSA, and amounts borrowed will be backed by auto loans acquired from subsidiaries and affiliates of SFC. Following the revolving period, the principal balance of the outstanding loans, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in full in October 2021.
|
|
|
At or for the
Nine Months Ended September 30, |
||||||
(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
|
|
149
|
|
|
165
|
|
||
Prior years *
|
|
—
|
|
|
(21
|
)
|
||
Total
|
|
149
|
|
|
144
|
|
||
Reductions for losses and loss adjustment expenses paid related to:
|
|
|
|
|
||||
Current year
|
|
(82
|
)
|
|
(87
|
)
|
||
Prior years
|
|
(69
|
)
|
|
(67
|
)
|
||
Total
|
|
(151
|
)
|
|
(154
|
)
|
||
Foreign currency translation adjustment
|
|
(1
|
)
|
|
—
|
|
||
Net balance at end of period
|
|
129
|
|
|
141
|
|
||
Plus reinsurance recoverables
|
|
25
|
|
|
27
|
|
||
Balance at end of period
|
|
$
|
154
|
|
|
$
|
168
|
|
*
|
Reflects (i) a redundancy in the prior years’ net reserves of less than
$1 million
at September 30, 2017 primarily due to favorable development on ordinary life and credit disability during the year and (ii) a redundancy in the prior years’ net reserves of
$21 million
at September 30, 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 September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
Numerator (basic and diluted):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to OneMain Holdings, Inc.
|
|
$
|
69
|
|
|
$
|
25
|
|
|
$
|
144
|
|
|
$
|
188
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of shares outstanding (basic)
|
|
135,253,493
|
|
|
134,730,251
|
|
|
135,240,664
|
|
|
134,717,870
|
|
||||
Effect of dilutive securities *
|
|
457,719
|
|
|
256,883
|
|
|
358,705
|
|
|
231,467
|
|
||||
Weighted average number of shares outstanding (diluted)
|
|
135,711,212
|
|
|
134,987,134
|
|
|
135,599,369
|
|
|
134,949,337
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
0.52
|
|
|
$
|
0.19
|
|
|
$
|
1.07
|
|
|
$
|
1.40
|
|
Diluted
|
|
$
|
0.51
|
|
|
$
|
0.19
|
|
|
$
|
1.07
|
|
|
$
|
1.39
|
|
*
|
We have excluded the following shares in the diluted earnings per share calculation for the
three and nine
months ended
September 30, 2017
and
2016
because these shares would be anti-dilutive, which could impact the earnings per share calculation in the future:
|
•
|
three
months ended
September 30, 2017
and
2016
, respectively:
|
◦
|
69,321
and
573,658
performance-based shares
|
◦
|
577,557
and
870,645
service-based shares
|
•
|
nine
months ended
September 30, 2017
and
2016
, respectively:
|
◦
|
41,698
and
576,437
performance-based shares
|
◦
|
709,503
and
960,032
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 September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
6
|
|
|
$
|
(4
|
)
|
|
$
|
1
|
|
|
$
|
3
|
|
Other comprehensive income before reclassifications
|
|
2
|
|
|
—
|
|
|
2
|
|
|
4
|
|
||||
Reclassification adjustments from accumulated other comprehensive income (loss)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Balance at end of period
|
|
$
|
6
|
|
|
$
|
(4
|
)
|
|
$
|
3
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
20
|
|
|
$
|
(19
|
)
|
|
$
|
4
|
|
|
$
|
5
|
|
Other comprehensive income before reclassifications
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Reclassification adjustments from accumulated other comprehensive income (loss)
|
|
(2
|
)
|
|
—
|
|
|
(5
|
)
|
|
(7
|
)
|
||||
Balance at end of period
|
|
$
|
24
|
|
|
$
|
(19
|
)
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
(6
|
)
|
Other comprehensive income before reclassifications
|
|
15
|
|
|
—
|
|
|
4
|
|
|
19
|
|
||||
Reclassification adjustments from accumulated other comprehensive income (loss)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||
Balance at end of period
|
|
$
|
6
|
|
|
$
|
(4
|
)
|
|
$
|
3
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period
|
|
$
|
(14
|
)
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
(33
|
)
|
Other comprehensive income before reclassifications
|
|
44
|
|
|
—
|
|
|
4
|
|
|
48
|
|
||||
Reclassification adjustments from accumulated other comprehensive income (loss)
|
|
(6
|
)
|
|
—
|
|
|
(5
|
)
|
|
(11
|
)
|
||||
Balance at end of period
|
|
$
|
24
|
|
|
$
|
(19
|
)
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
(dollars in millions)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gains on available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
12
|
|
|
$
|
9
|
|
Income tax effect
|
|
(2
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, net of taxes
|
|
2
|
|
|
2
|
|
|
8
|
|
|
6
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gains on foreign currency translation adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reclassification from accumulated other comprehensive income (loss) to other revenues
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Total
|
|
$
|
2
|
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
11
|
|
•
|
Consumer and Insurance
— We originate and service personal loans (secured and unsecured) through our branch network and our centralized operations. We offer credit insurance (life insurance, disability insurance, and involuntary unemployment insurance) and non-credit insurance. We also offer auto membership plans of an unaffiliated company. 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 expense
|
Consumer and Insurance and Other
- Interest expense for unsecured debt is recorded to each of the segments using a weighted average interest rate applied to allocated average unsecured debt.
|
Average unsecured debt is allocated as follows:
|
|
l
Other
- At 100% of asset base. (Asset base represents the average net finance receivables including finance receivables held for sale.)
|
|
l
Consumer and Insurance
- Receives remainder of unallocated average debt.
|
|
Provision for finance receivable losses
|
Allocated to each of the segments based on the remaining delinquent accounts as a percentage of total delinquent accounts.
|
Other revenues
|
Net gain (loss) on repurchases and repayments of debt -
Allocated to each of the segments based on the interest expense allocation of debt.
Gains and losses on foreign currency exchange -
Allocated to each of the segments based on the interest expense allocation of debt.
|
Acquisition-related transaction and integration expenses
|
Allocated to each of the segments based on services provided.
|
Other expenses
|
Salaries and benefits -
Allocated to each of the segments based on services provided.
|
Other operating expenses
- Allocated to each of the segments based on services provided.
|
•
|
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 *
|
|
Eliminations
|
|
Segment to
GAAP Adjustment |
|
Consolidated
Total |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest income
|
|
$
|
831
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
(29
|
)
|
|
$
|
808
|
|
Interest expense
|
|
195
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
7
|
|
|
207
|
|
||||||
Provision for finance receivable losses
|
|
245
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
(8
|
)
|
|
243
|
|
||||||
Net interest income (loss) after provision for finance receivable losses
|
|
391
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(28
|
)
|
|
358
|
|
||||||
Other revenues
|
|
145
|
|
|
10
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
152
|
|
||||||
Acquisition-related transaction and integration expenses
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||||
Other expenses
|
|
343
|
|
|
10
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
367
|
|
||||||
Income (loss) before income tax expense (benefit)
|
|
$
|
171
|
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
(37
|
)
|
|
$
|
121
|
|
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest income
|
|
$
|
827
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
(68
|
)
|
|
$
|
770
|
|
Interest expense
|
|
191
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
15
|
|
|
215
|
|
||||||
Provision for finance receivable losses
|
|
224
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
38
|
|
|
263
|
|
||||||
Net interest income after provision for finance receivable losses
|
|
412
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(121
|
)
|
|
292
|
|
||||||
Other revenues
|
|
151
|
|
|
12
|
|
|
(17
|
)
|
|
—
|
|
|
12
|
|
|
158
|
|
||||||
Acquisition-related transaction and integration expenses
|
|
17
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
(1
|
)
|
|
21
|
|
||||||
Other expenses
|
|
367
|
|
|
10
|
|
|
9
|
|
|
—
|
|
|
10
|
|
|
396
|
|
||||||
Income (loss) before income tax expense (benefit)
|
|
$
|
179
|
|
|
$
|
2
|
|
|
$
|
(30
|
)
|
|
$
|
—
|
|
|
$
|
(118
|
)
|
|
$
|
33
|
|
At or for the Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
2,430
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
(109
|
)
|
|
$
|
2,339
|
|
Interest expense
|
|
570
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
26
|
|
|
612
|
|
||||||
Provision for finance receivable losses
|
|
718
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
(1
|
)
|
|
724
|
|
||||||
Net interest income (loss) after provision for finance receivable losses
|
|
1,142
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(134
|
)
|
|
1,003
|
|
||||||
Other revenues
|
|
409
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
414
|
|
||||||
Acquisition-related transaction and integration expenses
|
|
56
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
(3
|
)
|
|
59
|
|
||||||
Other expenses
|
|
1,038
|
|
|
31
|
|
|
23
|
|
|
—
|
|
|
22
|
|
|
1,114
|
|
||||||
Income (loss) before income tax expense (benefit)
|
|
$
|
457
|
|
|
$
|
1
|
|
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
$
|
(180
|
)
|
|
$
|
244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
$
|
16,916
|
|
|
$
|
4
|
|
|
$
|
304
|
|
|
$
|
—
|
|
|
$
|
1,826
|
|
|
$
|
19,050
|
|
At or for the Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
|
$
|
2,507
|
|
|
$
|
102
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
(310
|
)
|
|
$
|
2,342
|
|
Interest expense
|
|
551
|
|
|
20
|
|
|
37
|
|
|
—
|
|
|
47
|
|
|
655
|
|
||||||
Provision for finance receivable losses
|
|
669
|
|
|
14
|
|
|
5
|
|
|
—
|
|
|
(14
|
)
|
|
674
|
|
||||||
Net interest income after provision for finance receivable losses
|
|
1,287
|
|
|
68
|
|
|
1
|
|
|
—
|
|
|
(343
|
)
|
|
1,013
|
|
||||||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
||||||
Other revenues
|
|
467
|
|
|
36
|
|
|
(35
|
)
|
|
(11
|
)
|
|
2
|
|
|
459
|
|
||||||
Acquisition-related transaction and integration expenses
|
|
62
|
|
|
1
|
|
|
20
|
|
|
—
|
|
|
(8
|
)
|
|
75
|
|
||||||
Other expenses
|
|
1,140
|
|
|
47
|
|
|
21
|
|
|
(11
|
)
|
|
40
|
|
|
1,237
|
|
||||||
Income (loss) before income tax expense (benefit)
|
|
552
|
|
|
223
|
|
|
(75
|
)
|
|
—
|
|
|
(373
|
)
|
|
327
|
|
||||||
Income before income taxes attributable to non-controlling interests
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||||
Income (loss) before income tax expense (benefit) attributable to OneMain Holdings, Inc.
|
|
$
|
552
|
|
|
$
|
195
|
|
|
$
|
(75
|
)
|
|
$
|
—
|
|
|
$
|
(373
|
)
|
|
$
|
299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
$
|
15,728
|
|
|
$
|
5
|
|
|
$
|
613
|
|
|
$
|
—
|
|
|
$
|
2,007
|
|
|
$
|
18,353
|
|
*
|
Real Estate segment has been combined with “Other” for the prior period.
|
|
|
Fair Value Measurements Using
|
|
Total
Fair Value |
|
Total
Carrying Value |
||||||||||||||
(dollars in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
772
|
|
|
$
|
144
|
|
|
$
|
—
|
|
|
$
|
916
|
|
|
$
|
916
|
|
Investment securities
|
|
38
|
|
|
1,623
|
|
|
7
|
|
|
1,668
|
|
|
1,668
|
|
|||||
Net finance receivables, less allowance for finance receivable losses
|
|
—
|
|
|
—
|
|
|
14,966
|
|
|
14,966
|
|
|
13,798
|
|
|||||
Finance receivables held for sale
|
|
—
|
|
|
—
|
|
|
141
|
|
|
141
|
|
|
137
|
|
|||||
Restricted cash and restricted cash equivalents
|
|
571
|
|
|
—
|
|
|
—
|
|
|
571
|
|
|
571
|
|
|||||
Other assets *
|
|
—
|
|
|
2
|
|
|
12
|
|
|
14
|
|
|
14
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
15,322
|
|
|
$
|
—
|
|
|
$
|
15,322
|
|
|
$
|
14,619
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
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)
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents in mutual funds
|
|
$
|
490
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
490
|
|
Cash equivalents in securities
|
|
—
|
|
|
144
|
|
|
—
|
|
|
144
|
|
||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and government sponsored entities
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||
Obligations of states, municipalities, and political subdivisions
|
|
—
|
|
|
136
|
|
|
—
|
|
|
136
|
|
||||
Certificates of deposit and commercial paper
|
|
—
|
|
|
45
|
|
|
—
|
|
|
45
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
124
|
|
|
—
|
|
|
124
|
|
||||
Corporate debt
|
|
—
|
|
|
920
|
|
|
—
|
|
|
920
|
|
||||
RMBS
|
|
—
|
|
|
92
|
|
|
—
|
|
|
92
|
|
||||
CMBS
|
|
—
|
|
|
96
|
|
|
—
|
|
|
96
|
|
||||
CDO/ABS
|
|
—
|
|
|
93
|
|
|
1
|
|
|
94
|
|
||||
Total bonds
|
|
—
|
|
|
1,536
|
|
|
1
|
|
|
1,537
|
|
||||
Preferred stock
|
|
8
|
|
|
8
|
|
|
—
|
|
|
16
|
|
||||
Common stock
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
||||
Other long-term investments
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total available-for-sale securities (b)
|
|
32
|
|
|
1,544
|
|
|
2
|
|
|
1,578
|
|
||||
Other securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-U.S. government and government sponsored entities
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Corporate debt
|
|
—
|
|
|
73
|
|
|
4
|
|
|
77
|
|
||||
RMBS
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
CDO/ABS
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Total bonds
|
|
—
|
|
|
79
|
|
|
4
|
|
|
83
|
|
||||
Preferred stock
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Total other securities
|
|
6
|
|
|
79
|
|
|
4
|
|
|
89
|
|
||||
Total investment securities
|
|
38
|
|
|
1,623
|
|
|
6
|
|
|
1,667
|
|
||||
Restricted cash in mutual funds
|
|
557
|
|
|
—
|
|
|
—
|
|
|
557
|
|
||||
Total
|
|
$
|
1,085
|
|
|
$
|
1,767
|
|
|
$
|
6
|
|
|
$
|
2,858
|
|
(a)
|
Due to the insignificant activity within the Level 3 assets during the
three and nine
months ended
September 30, 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
September 30, 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 that 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
September 30, 2017
, we had over
2.3 million
personal loans, representing
$14.4 billion
of net finance receivables, of which 41% were secured by titled collateral, compared to
2.2 million
personal loans totaling
$13.6 billion
, of which
36%
were secured by titled collateral at
December 31, 2016
.
|
•
|
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 affiliated insurance companies, 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
September 30, 2017
, we had
$133 million
of real estate loans held for investment, of which 90% 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
$137 million
and $153 million at
September 30, 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.
|
•
|
Consumer and Insurance; and
|
•
|
Acquisitions and Servicing.
|
•
|
Continuing the 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 September 30, |
|
At or for the
Nine Months Ended September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
808
|
|
|
$
|
770
|
|
|
$
|
2,339
|
|
|
$
|
2,342
|
|
Interest expense
|
|
207
|
|
|
215
|
|
|
612
|
|
|
655
|
|
||||
Provision for finance receivable losses
|
|
243
|
|
|
263
|
|
|
724
|
|
|
674
|
|
||||
Net interest income after provision for finance receivable losses
|
|
358
|
|
|
292
|
|
|
1,003
|
|
|
1,013
|
|
||||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
||||
Other revenues
|
|
152
|
|
|
158
|
|
|
414
|
|
|
459
|
|
||||
Acquisition-related transaction and integration expenses
|
|
22
|
|
|
21
|
|
|
59
|
|
|
75
|
|
||||
Other expenses
|
|
367
|
|
|
396
|
|
|
1,114
|
|
|
1,237
|
|
||||
Income before income taxes
|
|
121
|
|
|
33
|
|
|
244
|
|
|
327
|
|
||||
Income taxes
|
|
52
|
|
|
8
|
|
|
100
|
|
|
111
|
|
||||
Net income
|
|
69
|
|
|
25
|
|
|
144
|
|
|
216
|
|
||||
Net income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
Net income attributable to OMH
|
|
$
|
69
|
|
|
$
|
25
|
|
|
$
|
144
|
|
|
$
|
188
|
|
|
|
|
|
|
|
|
|
|
||||||||
Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
135,253,493
|
|
|
134,730,251
|
|
|
135,240,664
|
|
|
134,717,870
|
|||||
Diluted
|
|
135,711,212
|
|
|
134,987,134
|
|
|
135,599,369
|
|
|
134,949,337
|
|||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
0.52
|
|
|
$
|
0.19
|
|
|
$
|
1.07
|
|
|
$
|
1.40
|
|
Diluted
|
|
$
|
0.51
|
|
|
$
|
0.19
|
|
|
$
|
1.07
|
|
|
$
|
1.39
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selected Financial Statistics (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Finance receivables held for investment:
|
|
|
|
|
|
|
|
|
||||||||
Net finance receivables
|
|
$
|
14,496
|
|
|
$
|
13,870
|
|
|
$
|
14,496
|
|
|
$
|
13,870
|
|
Number of accounts
|
|
2,306,735
|
|
|
2,227,522
|
|
|
2,306,735
|
|
|
2,227,522
|
|
||||
Finance receivables held for sale:
|
|
|
|
|
|
|
|
|
||||||||
Net finance receivables
|
|
$
|
137
|
|
|
$
|
166
|
|
|
$
|
137
|
|
|
$
|
166
|
|
Number of accounts
|
|
2,533
|
|
|
3,191
|
|
|
2,533
|
|
|
3,191
|
|
||||
Finance receivables held for investment and held for sale: (b)
|
|
|
|
|
|
|
|
|
||||||||
Average net receivables
|
|
$
|
14,297
|
|
|
$
|
13,831
|
|
|
$
|
13,830
|
|
|
$
|
14,682
|
|
Yield
|
|
22.35
|
%
|
|
21.92
|
%
|
|
22.52
|
%
|
|
21.17
|
%
|
||||
Gross charge-off ratio
|
|
6.83
|
%
|
|
6.23
|
%
|
|
7.71
|
%
|
|
5.57
|
%
|
||||
Recovery ratio
|
|
(0.67
|
)%
|
|
(0.52
|
)%
|
|
(0.80
|
)%
|
|
(0.47
|
)%
|
||||
Net charge-off ratio
|
|
6.16
|
%
|
|
5.71
|
%
|
|
6.91
|
%
|
|
5.10
|
%
|
||||
30-89 Delinquency ratio
|
|
2.43
|
%
|
|
2.72
|
%
|
|
2.43
|
%
|
|
2.72
|
%
|
||||
Origination volume
|
|
$
|
2,640
|
|
|
$
|
2,220
|
|
|
$
|
7,405
|
|
|
$
|
7,138
|
|
Number of accounts originated
|
|
369,720
|
|
|
318,234
|
|
|
1,011,612
|
|
|
996,742
|
|
(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 nine months ended September 30, 2016 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
increased
$42 million
primarily due to the following:
|
◦
|
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 (i) the continued shift of the portfolio towards secured personal loans, which generally have lower yields relative to our unsecured personal loans and lower charge-off rates (ii) the alignment of pricing and credit strategies, which have driven originations toward direct auto customers who tend to have loans with lower yields and lower charge-offs, and (iii) the hurricane-related borrower assistance program of approximately $7 million, which unfavorably impacted our third quarter 2017 yield by approximately 20 basis points.
|
◦
|
Average net receivables held for investment
increased primarily due to the continued growth in our personal loan portfolio.
|
•
|
Interest income on finance receivables held for sale
decreased
$4 million
primarily due to the $58 million sale of real estate loans in November 2016.
|
•
|
Other operating expenses
decreased
$34 million
primarily due to (i) a decrease in Citigroup transition expenses of $15 million during the 2017 period, (ii) lower lending-related costs of $8 million during the 2017 period, (iii) a decrease in amortization of other intangible assets of $4 million during the 2017 period, and (iv) lower professional expenses of $3 million during the 2017 period.
|
•
|
Salaries and benefits
decreased
$6 million
primarily due to a decrease in average staffing as a result of our integration of the two legacy companies.
|
•
|
Insurance policy benefits and claims
increased
$11 million
primarily due to unfavorable variances in claim and benefit reserves, which includes a $3 million incremental reserve attributable to hurricanes Harvey and Irma.
|
•
|
Interest income on finance receivables held for sale
decreased
$61 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.
|
•
|
Finance charges
increased
$58 million
primarily due to the net of the following:
|
◦
|
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 shift of the portfolio towards secured personal loans, which generally have lower yields relative to our unsecured personal loans and lower charge-off rates. Additionally, the alignment of pricing and credit strategies have driven originations toward direct auto customers who tend to have loans with lower yields and lower charge-offs.
|
◦
|
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 in our personal loan portfolio.
|
•
|
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, including $466 million repurchased in connection with SFC’s offerings of the 6.125% SFC Notes in May of 2017 and repayments relating to our conduit facilities. This decrease was partially offset by net debt issuances during the past 12 months relating to SFC’s offerings of the 6.125% SFC Notes in May of 2017 and our securitization transactions. See Notes
8
and
9
of the Notes to Condensed Consolidated Financial Statements included in 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 of 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.
|
•
|
Other operating expenses
decreased
$99 million
primarily due to (i) a decrease in Citigroup transition expenses of $41 million during the 2017 period, (ii) lower professional fees of $40 million during the 2017 period, and (iii) a decrease in amortization of other intangible assets of $19 million during the 2017 period.
|
•
|
Salaries and benefits
decreased
$35 million
primarily due to a decrease in average staffing as a result of our integration of the two legacy companies.
|
•
|
Insurance policy benefits and claims
increased
$11 million
primarily due to unfavorable variances in claim and benefit reserves, which includes a $3 million incremental reserve attributable to hurricanes Harvey and Irma.
|
(dollars in millions)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
Consumer and Insurance
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes - Segment Accounting Basis
|
|
$
|
171
|
|
|
$
|
179
|
|
|
$
|
457
|
|
|
$
|
552
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Acquisition-related transaction and integration expenses
|
|
22
|
|
|
17
|
|
|
56
|
|
|
62
|
|
||||
Net gain on sale of personal loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||
Net loss on repurchases and repayments of debt
|
|
1
|
|
|
—
|
|
|
18
|
|
|
13
|
|
||||
Debt refinance costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Adjusted pretax income (non-GAAP)
|
|
$
|
194
|
|
|
$
|
196
|
|
|
$
|
531
|
|
|
$
|
609
|
|
|
|
|
|
|
|
|
|
|
||||||||
Acquisitions and Servicing
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes attributable to OMH - Segment Accounting Basis
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
195
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Net gain on sale of SpringCastle interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(167
|
)
|
||||
Acquisition-related transaction and integration expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
SpringCastle transaction costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Adjusted pretax income attributable to OMH (non-GAAP)
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
30
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other
|
|
|
|
|
|
|
|
|
||||||||
Loss before income tax benefit - Segment Accounting Basis
|
|
$
|
(13
|
)
|
|
$
|
(30
|
)
|
|
$
|
(34
|
)
|
|
$
|
(75
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Acquisition-related transaction and integration expenses
|
|
—
|
|
|
5
|
|
|
6
|
|
|
20
|
|
||||
Net loss on sale of real estate loans
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Net loss on liquidation of United Kingdom subsidiary
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Net loss on repurchases and repayments of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Debt refinance costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Adjusted pretax loss (non-GAAP)
|
|
$
|
(13
|
)
|
|
$
|
(8
|
)
|
|
$
|
(28
|
)
|
|
$
|
(36
|
)
|
(dollars in millions)
|
|
At or for the
Three Months Ended September 30, |
|
At or for the
Nine Months Ended September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
831
|
|
|
$
|
827
|
|
|
$
|
2,430
|
|
|
$
|
2,507
|
|
Interest expense
|
|
195
|
|
|
191
|
|
|
570
|
|
|
551
|
|
||||
Provision for finance receivable losses
|
|
245
|
|
|
224
|
|
|
718
|
|
|
669
|
|
||||
Net interest income after provision for finance receivable losses
|
|
391
|
|
|
412
|
|
|
1,142
|
|
|
1,287
|
|
||||
Other revenues
|
|
146
|
|
|
151
|
|
|
427
|
|
|
458
|
|
||||
Other expenses
|
|
343
|
|
|
367
|
|
|
1,038
|
|
|
1,136
|
|
||||
Adjusted pretax income (non-GAAP)
|
|
$
|
194
|
|
|
$
|
196
|
|
|
$
|
531
|
|
|
$
|
609
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selected Financial Statistics (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Finance receivables held for investment:
|
|
|
|
|
|
|
|
|
||||||||
Net finance receivables
|
|
$
|
14,334
|
|
|
$
|
13,485
|
|
|
$
|
14,334
|
|
|
$
|
13,485
|
|
Number of accounts
|
|
2,301,321
|
|
|
2,217,588
|
|
|
2,301,321
|
|
|
2,217,588
|
|
||||
Finance receivables held for investment and held for sale: (b)
|
|
|
|
|
|
|
|
|
||||||||
Average net receivables
|
|
$
|
14,119
|
|
|
$
|
13,416
|
|
|
$
|
13,617
|
|
|
$
|
13,436
|
|
Yield
|
|
23.35
|
%
|
|
24.51
|
%
|
|
23.85
|
%
|
|
24.92
|
%
|
||||
Gross charge-off ratio
|
|
7.20
|
%
|
|
6.97
|
%
|
|
8.20
|
%
|
|
7.64
|
%
|
||||
Recovery ratio
|
|
(0.83
|
)%
|
|
(0.74
|
)%
|
|
(0.98
|
)%
|
|
(0.73
|
)%
|
||||
Net charge-off ratio
|
|
6.37
|
%
|
|
6.23
|
%
|
|
7.22
|
%
|
|
6.91
|
%
|
||||
30-89 Delinquency ratio
|
|
2.39
|
%
|
|
2.64
|
%
|
|
2.39
|
%
|
|
2.64
|
%
|
||||
Origination volume
|
|
$
|
2,639
|
|
|
$
|
2,219
|
|
|
$
|
7,405
|
|
|
$
|
7,118
|
|
Number of accounts originated
|
|
369,720
|
|
|
318,234
|
|
|
1,011,612
|
|
|
996,742
|
|
(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 nine months ended September 30,
2016
in connection with the Lendmark Sale.
|
•
|
Average net receivables held for investment
increased primarily due to the continued growth in our personal loan portfolio.
|
•
|
Yield on finance receivables held for investment
decreased primarily due to (i) the continued shift of the portfolio towards secured personal loans, which generally have lower yields relative to our unsecured personal loans and lower charge-off rates, (ii) the alignment of pricing and credit strategies, which have driven originations toward direct auto customers who tend to have loans with lower yields and lower charge-offs, and (iii) the hurricane-related borrower
|
•
|
Interest income on finance receivables held for sale
decreased
$56 million
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.
|
•
|
Finance charges
decreased
$21 million
primarily due to the net of the following:
|
◦
|
Yield on finance receivables held for investment
decreased primarily due to the continued shift of the portfolio towards secured personal loans, which generally have lower yields relative to our unsecured personal loans and lower charge-off rates. Additionally, the alignment of pricing and credit strategies have driven originations toward direct auto customers who tend to have loans with lower yields and lower charge-offs.
|
◦
|
Average net receivables held for investment
increased primarily due to the continued growth in our personal loan portfolio.
|
•
|
Other operating expenses
decreased
$88 million
primarily due to (i) a decrease in Citigroup transition expense of $41 million during the 2017 period, (ii) lower professional fees of $26 million during the 2017 period and (iii) a decrease in amortization of other intangible assets of $19 million during the 2017 period.
|
•
|
Salaries and benefits
decreased
$26 million
primarily due to a decrease in average staffing as a result of our integration of the two legacy companies.
|
•
|
Insurance policy benefits and claims
increased
$16 million
primarily due to a claim reserve release during 2016 and a $3 million incremental reserve during the 2017 period attributable to hurricanes Harvey and Irma.
|
(dollars in millions)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
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
|
|
10
|
|
|
12
|
|
|
32
|
|
|
36
|
|
||||
Other expenses
|
|
10
|
|
|
10
|
|
|
31
|
|
|
46
|
|
||||
Adjusted pretax income (non-GAAP)
|
|
—
|
|
|
2
|
|
|
1
|
|
|
58
|
|
||||
Pretax income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
Adjusted pretax income attributable to OMH (non-GAAP)
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selected Financial Statistics *
|
|
|
|
|
|
|
|
|
|
|||||||
Finance receivables held for investment:
|
|
|
|
|
|
|
|
|
||||||||
Average net receivables
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
552
|
|
Yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
24.61
|
%
|
||||
Net charge-off ratio
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
3.48
|
%
|
*
|
See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.
|
(dollars in millions)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
$
|
6
|
|
|
$
|
11
|
|
|
$
|
18
|
|
|
$
|
43
|
|
Interest expense
|
|
5
|
|
|
9
|
|
|
16
|
|
|
37
|
|
||||
Provision for finance receivable losses *
|
|
6
|
|
|
1
|
|
|
7
|
|
|
5
|
|
||||
Net interest income (loss) after provision for finance receivable losses
|
|
(5
|
)
|
|
1
|
|
|
(5
|
)
|
|
1
|
|
||||
Other revenues
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
||||
Other expenses
|
|
7
|
|
|
9
|
|
|
23
|
|
|
20
|
|
||||
Adjusted pretax loss (non-GAAP)
|
|
$
|
(13
|
)
|
|
$
|
(8
|
)
|
|
$
|
(28
|
)
|
|
$
|
(36
|
)
|
(dollars in millions)
|
|
Consumer
and
Insurance
|
|
Other
|
|
Segment to
GAAP
Adjustment
|
|
Consolidated
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Personal loans
|
|
$
|
14,334
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
14,356
|
|
Real estate loans
|
|
—
|
|
|
141
|
|
|
(8
|
)
|
|
133
|
|
||||
Retail sales finance
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Total
|
|
$
|
14,334
|
|
|
$
|
148
|
|
|
$
|
14
|
|
|
$
|
14,496
|
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2017 *
|
|
|
|
|
|
|
|
|
||||||||
FICO scores
|
|
|
|
|
|
|
|
|
||||||||
660 or higher
|
|
$
|
3,919
|
|
|
$
|
41
|
|
|
$
|
4
|
|
|
$
|
3,964
|
|
620-659
|
|
3,819
|
|
|
26
|
|
|
1
|
|
|
3,846
|
|
||||
619 or below
|
|
6,618
|
|
|
66
|
|
|
2
|
|
|
6,686
|
|
||||
Total
|
|
$
|
14,356
|
|
|
$
|
133
|
|
|
$
|
7
|
|
|
$
|
14,496
|
|
|
|
|
|
|
|
|
|
|
||||||||
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. Effective 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
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Current
|
|
$
|
13,695
|
|
|
$
|
116
|
|
|
$
|
18
|
|
|
$
|
13,829
|
|
30-59 days past due
|
|
209
|
|
|
9
|
|
|
(2
|
)
|
|
216
|
|
||||
Delinquent (60-89 days past due)
|
|
134
|
|
|
3
|
|
|
(1
|
)
|
|
136
|
|
||||
Performing
|
|
14,038
|
|
|
128
|
|
|
15
|
|
|
14,181
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Nonperforming (90+ days past due)
|
|
296
|
|
|
20
|
|
|
(1
|
)
|
|
315
|
|
||||
Total net finance receivables
|
|
$
|
14,334
|
|
|
$
|
148
|
|
|
$
|
14
|
|
|
$
|
14,496
|
|
|
|
|
|
|
|
|
|
|
||||||||
Delinquency ratio
|
|
|
|
|
|
|
|
|
||||||||
30-89 days past due
|
|
2.39
|
%
|
|
7.84
|
%
|
|
*
|
|
|
2.43
|
%
|
||||
30+ days past due
|
|
4.45
|
%
|
|
21.65
|
%
|
|
*
|
|
|
4.60
|
%
|
||||
60+ days past due
|
|
3.00
|
%
|
|
15.60
|
%
|
|
*
|
|
|
3.11
|
%
|
||||
90+ days past due
|
|
2.06
|
%
|
|
13.80
|
%
|
|
*
|
|
|
2.17
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
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 September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
|
$
|
697
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
(48
|
)
|
|
$
|
676
|
|
Provision for finance receivable losses
|
|
245
|
|
|
—
|
|
|
6
|
|
|
(8
|
)
|
|
243
|
|
|||||
Charge-offs
|
|
(257
|
)
|
|
—
|
|
|
(1
|
)
|
|
12
|
|
|
(246
|
)
|
|||||
Recoveries
|
|
30
|
|
|
—
|
|
|
1
|
|
|
(6
|
)
|
|
25
|
|
|||||
Balance at end of period
|
|
$
|
715
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
(50
|
)
|
|
$
|
698
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
|
$
|
729
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
(155
|
)
|
|
$
|
608
|
|
Provision for finance receivable losses
|
|
224
|
|
|
—
|
|
|
1
|
|
|
38
|
|
|
263
|
|
|||||
Charge-offs
|
|
(236
|
)
|
|
—
|
|
|
(5
|
)
|
|
24
|
|
|
(217
|
)
|
|||||
Recoveries
|
|
26
|
|
|
—
|
|
|
2
|
|
|
(10
|
)
|
|
18
|
|
|||||
Balance at end of period
|
|
$
|
743
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
(103
|
)
|
|
$
|
672
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
|
$
|
732
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
(74
|
)
|
|
$
|
689
|
|
Provision for finance receivable losses
|
|
718
|
|
|
—
|
|
|
7
|
|
|
(1
|
)
|
|
724
|
|
|||||
Charge-offs
|
|
(836
|
)
|
|
—
|
|
|
(7
|
)
|
|
45
|
|
|
(798
|
)
|
|||||
Recoveries
|
|
101
|
|
|
—
|
|
|
2
|
|
|
(20
|
)
|
|
83
|
|
|||||
Balance at end of period
|
|
$
|
715
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
(50
|
)
|
|
$
|
698
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance ratio
|
|
4.99
|
%
|
|
—
|
%
|
|
23.21
|
%
|
|
(a)
|
|
|
4.81
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at beginning of period
|
|
$
|
769
|
|
|
$
|
4
|
|
|
$
|
70
|
|
|
$
|
(251
|
)
|
|
$
|
592
|
|
Provision for finance receivable losses
|
|
669
|
|
|
14
|
|
|
5
|
|
|
(14
|
)
|
|
674
|
|
|||||
Charge-offs
|
|
(770
|
)
|
|
(17
|
)
|
|
(14
|
)
|
|
188
|
|
|
(613
|
)
|
|||||
Recoveries
|
|
75
|
|
|
3
|
|
|
6
|
|
|
(32
|
)
|
|
52
|
|
|||||
Other (b)
|
|
—
|
|
|
(4
|
)
|
|
(35
|
)
|
|
6
|
|
|
(33
|
)
|
|||||
Balance at end of period
|
|
$
|
743
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
(103
|
)
|
|
$
|
672
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance ratio
|
|
5.51
|
%
|
|
—
|
%
|
|
13.51
|
%
|
|
(a)
|
|
|
4.85
|
%
|
(a)
|
Not applicable
|
(b)
|
Other consists of:
|
•
|
the elimination of allowance for finance receivable losses due to the transfer of real estate loans held for investment to finance receivable held for sale on June 30, 2016; and
|
•
|
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)
|
|
Consumer
and Insurance |
|
Other
|
|
Segment to
GAAP Adjustment |
|
Consolidated
Total |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables
|
|
$
|
467
|
|
|
$
|
76
|
|
|
$
|
(209
|
)
|
|
$
|
334
|
|
Allowance for TDR finance receivable losses
|
|
188
|
|
|
26
|
|
|
(71
|
)
|
|
143
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
TDR net finance receivables
|
|
$
|
421
|
|
|
$
|
71
|
|
|
$
|
(296
|
)
|
|
$
|
196
|
|
Allowance for TDR finance receivable losses
|
|
154
|
|
|
23
|
|
|
(97
|
)
|
|
80
|
|
•
|
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 that 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
|
|
||||
SLFT 2017-A
|
|
619
|
|
|
685
|
|
|
619
|
|
|
685
|
|
|
2.98
|
%
|
|
Personal loans
|
|
3 years
|
|
||||
OMFIT 2014-1
|
|
760
|
|
|
1,004
|
|
|
103
|
|
|
321
|
|
|
3.24
|
%
|
|
Personal loans
|
|
2 years
|
|
||||
OMFIT 2014-2
|
|
1,185
|
|
|
1,325
|
|
|
426
|
|
|
524
|
|
|
3.74
|
%
|
|
Personal loans
|
|
2 years
|
|
||||
OMFIT 2015-1
|
|
1,229
|
|
|
1,397
|
|
|
1,229
|
|
|
1,389
|
|
|
3.74
|
%
|
|
Personal loans
|
|
3 years
|
|
||||
OMFIT 2015-2
|
|
1,250
|
|
|
1,346
|
|
|
946
|
|
|
981
|
|
|
3.23
|
%
|
|
Personal loans
|
|
2 years
|
|
||||
OMFIT 2015-3
|
|
293
|
|
|
330
|
|
|
293
|
|
|
325
|
|
|
4.21
|
%
|
|
Personal loans
|
|
5 years
|
|
||||
OMFIT 2016-1
|
|
459
|
|
|
569
|
|
|
459
|
|
|
556
|
|
|
4.01
|
%
|
|
Personal loans
|
|
3 years
|
|
||||
OMFIT 2016-2
|
|
816
|
|
|
1,007
|
|
|
816
|
|
|
1,000
|
|
|
4.50
|
%
|
|
Personal loans
|
|
2 years
|
|
||||
OMFIT 2016-3
|
|
317
|
|
|
397
|
|
|
317
|
|
|
391
|
|
|
4.33
|
%
|
|
Personal loans
|
|
5 years
|
|
||||
OMFIT 2017-1
|
|
900
|
|
|
988
|
|
|
900
|
|
|
988
|
|
|
2.62
|
%
|
|
Personal loans
|
|
2 years
|
|
||||
Total consumer securitizations
|
|
9,805
|
|
|
11,193
|
|
|
8,085
|
|
|
9,305
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto Securitizations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
ODART 2016-1
|
|
700
|
|
|
754
|
|
|
246
|
|
|
305
|
|
|
2.70
|
%
|
|
Direct auto loans
|
|
—
|
|
||||
ODART 2017-1
|
|
268
|
|
|
300
|
|
|
268
|
|
|
300
|
|
|
2.61
|
%
|
|
Direct auto loans
|
|
1 year
|
|
||||
Total auto securitizations
|
|
968
|
|
|
1,054
|
|
|
514
|
|
|
605
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total secured structured financings
|
|
$
|
10,773
|
|
|
$
|
12,247
|
|
|
$
|
8,599
|
|
|
$
|
9,910
|
|
|
|
|
|
|
|
|
|
(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.
|
Exhibit Number
|
|
Description
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T:
(i) Condensed Consolidated Balance Sheets,
(ii) Condensed Consolidated Statements of Operations,
(iii) Condensed Consolidated Statements of Comprehensive Income (Loss),
(iv) Condensed Consolidated Statements of Shareholders’ Equity,
(v) Condensed Consolidated Statements of Cash Flows, and
(vi) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
ONEMAIN HOLDINGS, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
November 6, 2017
|
|
By:
|
/s/ Scott T. Parker
|
|
|
|
|
Scott T. Parker
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of OneMain Holdings, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 6, 2017
|
|
|
|
|
|
|
|
|
|
/s/ Jay N. Levine
|
|
|
|
Jay N. Levine
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of OneMain Holdings, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 6, 2017
|
|
|
|
|
|
|
|
|
|
/s/ Scott T. Parker
|
|
|
|
Scott T. Parker
|
|
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ Jay N. Levine
|
|
|
|
Jay N. Levine
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
/s/ Scott T. Parker
|
|
|
|
Scott T. Parker
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
Date:
|
November 6, 2017
|
|
|