Delaware (OneMain Holdings, Inc.)
|
27-3379612 | |||||||||||||
Indiana (OneMain Finance Corporation)
|
35-0416090 | |||||||||||||
(State of incorporation) | (I.R.S. Employer Identification No.) |
OneMain Holdings, Inc.: | ||||||||||||||
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Common Stock, par value $0.01 per share | OMF | New York Stock Exchange | ||||||||||||
OneMain Finance Corporation: None |
OneMain Holdings, Inc.: | |||||||||||||||||||||||||||||
Large accelerated filer | ☑ | Accelerated filer |
☐
|
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||||
OneMain Finance Corporation:
|
|||||||||||||||||||||||||||||
Large accelerated filer |
☐
|
Accelerated filer
|
☐
|
Non-accelerated filer | ☑ |
Smaller reporting company
|
☐ |
Emerging growth company
|
☐
|
Term or Abbreviation | Definition | |||||||
30-89 Delinquency ratio | net finance receivables 30-89 days past due as a percentage of net finance receivables | |||||||
3.875% Senior Notes due 2028 | $600 million of 3.875% Senior Notes due 2028 issued by OMFC on August 11, 2021 and guaranteed by OMH | |||||||
ABS | asset-backed securities | |||||||
Adjusted pretax income (loss) | a non-GAAP financial measure used by management as a key performance measure of our segment | |||||||
AETR | annual effective tax rate | |||||||
AHL | American Health and Life Insurance Company, an insurance subsidiary of OneMain Financial Holdings, LLC | |||||||
Annual Report | the Annual Report on Form 10-K of OMH and OMFC for the fiscal year ended December 31, 2020, filed with the SEC on February 9, 2021 | |||||||
Apollo | Apollo Global Management, LLC and its consolidated subsidiaries | |||||||
Apollo-Värde Group | an investor group led by funds managed by Apollo and Värde | |||||||
ARPA | American Rescue Plan Act of 2021 signed into law on March 11, 2021 | |||||||
ASC | Accounting Standards Codification | |||||||
ASU | Accounting Standards Update | |||||||
ASU 2016-13 |
the accounting standard issued by FASB in June of 2016, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments
|
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Average daily debt balance | average of debt for each day in the period | |||||||
Average net receivables | average of monthly average net finance receivables (net finance receivables at the beginning and end of each month divided by two) in the period | |||||||
Base Indenture | OMFC Indenture, dated as of December 3, 2014 | |||||||
CAA | Consolidated Appropriations Act of 2021 signed into law on December 27, 2020 | |||||||
CARES Act | Coronavirus Aid, Relief, and Economic Security Act signed into law on March 27, 2020 | |||||||
C&I | Consumer and Insurance | |||||||
CDO | collateralized debt obligations | |||||||
CMBS | commercial mortgage-backed securities | |||||||
Concurrent Share Buyback |
the purchase of 1,700,000 shares of OMH common stock by OMH in accordance with a July 2021 underwriting agreement, and completed on August 3, 2021
|
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COVID-19 |
the global outbreak of a novel strain of coronavirus
|
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Exchange Act | Securities Exchange Act of 1934, as amended | |||||||
FASB | Financial Accounting Standards Board | |||||||
FICO score | a credit score created by Fair Isaac Corporation | |||||||
GAAP | generally accepted accounting principles in the United States of America | |||||||
GAP | guaranteed asset protection | |||||||
Gross charge-off ratio | annualized gross charge-offs as a percentage of average net receivables | |||||||
Gross finance receivables |
the unpaid principal balance of our personal loans. For precompute loans, unpaid principal balance is the gross contractual payments less the unaccreted balance of unearned finance charges
|
|||||||
Indenture | the Base Indenture, together with all subsequent Supplemental Indentures | |||||||
Junior Subordinated Debenture | $350 million aggregate principal amount of 60-year junior subordinated debt issued by OMFC under an indenture dated January 22, 2007, by and between OMFC and Deutsche Bank Trust Company, as trustee, and guaranteed by OMH | |||||||
Term or Abbreviation | Definition | |||||||
Managed receivables | consist of our net finance receivables and finance receivables serviced for our whole loan sale partners | |||||||
Net charge-off ratio | annualized net charge-offs as a percentage of average net receivables | |||||||
Net interest income | interest income less interest expense | |||||||
ODART | OneMain Direct Auto Receivables Trust | |||||||
OMFC | OneMain Finance Corporation (formerly Springleaf Finance Corporation) | |||||||
OMFIT | OneMain Financial Issuance Trust | |||||||
OMH | OneMain Holdings, Inc. | |||||||
OneMain | OneMain Financial Holdings, LLC, collectively with its subsidiaries | |||||||
Other securities |
primarily consist of equity securities and those securities for which the fair value option was elected. Other securities recognize unrealized gains and losses in investment revenues
|
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Pretax capital generation |
a non-GAAP financial measure used by management as a key performance measure of our segment, defined as adjusted pretax income (loss) excluding the change in allowance for finance receivable losses
|
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Recovery ratio | annualized recoveries on net charge-offs as a percentage of average net receivables | |||||||
RMBS | residential mortgage-backed securities | |||||||
SEC | U.S. Securities and Exchange Commission | |||||||
Securities Act | Securities Act of 1933, as amended | |||||||
Segment Accounting Basis | a basis used to report the operating results of our C&I segment and our Other components, which reflects our allocation methodologies for certain costs and excludes the impact of applying purchase accounting | |||||||
Selling Stockholder | an entity managed by affiliates of Apollo Global Management, Inc. that agreed to sell shares of OMH common stock in two secondary public offerings in July and August 2021 | |||||||
SFC | Springleaf Finance Corporation (effective as of July 1, 2020, SFC was renamed to OMFC) | |||||||
Social Bond | $750 million of 3.50% Senior Notes due 2027 issued by OMFC on June 22, 2021 and guaranteed by OMH | |||||||
SpringCastle Portfolio | loans the Company previously owned and now services on behalf of a third party | |||||||
Supplemental Indentures | collectively, the following supplements to the Base Indenture: Third Supplemental Indenture, dated as of May 15, 2017; Fourth Supplemental Indenture, dated as of December 8, 2017; Fifth Supplemental Indenture, dated as of March 12, 2018; Sixth Supplemental Indenture, dated as of May 11, 2018; Seventh Supplemental Indenture, dated as of February 22, 2019; Eighth Supplemental Indenture, dated as of May 9, 2019; Ninth Supplemental Indenture, dated as of November 7, 2019; Tenth Supplemental Indenture, dated as of May 14, 2020; Eleventh Supplemental Indenture, dated as of December 17, 2020; Twelfth Supplemental Indenture, dated as of June 22, 2021; and Thirteenth Supplemental Indenture, dated as of August 11, 2021 | |||||||
Tax Act | Public Law 115-97 amending the Internal Revenue Code of 1986 | |||||||
TDR finance receivables | troubled debt restructured finance receivables. Debt restructuring in which a concession is granted to the borrower as a result of economic or legal reasons related to the borrower’s financial difficulties | |||||||
Thirteenth Supplemental Indenture | Thirteenth Supplemental Indenture, dated as of August 11, 2021, to the Base Indenture | |||||||
Triton | Triton Insurance Company, an insurance subsidiary of OneMain Financial Holdings, LLC | |||||||
Twelfth Supplemental Indenture | Twelfth Supplemental Indenture, dated as of June 22, 2021, to the Base Indenture | |||||||
Underwriter |
a third party that agreed to purchase OMH common stock from the Selling Stockholder in two secondary public offerings in July and August 2021
|
|||||||
Unearned finance charges | the amount of interest that is capitalized at time of origination on a precompute loan that will be earned over the remaining contractual life of the loan | |||||||
Unsecured Notes | the notes, on a senior unsecured basis, issued by OMFC and guaranteed by OMH | |||||||
Värde | Värde Partners, Inc. |
Term or Abbreviation | Definition | |||||||
VIEs | variable interest entities | |||||||
Weighted average interest rate | annualized interest expense as a percentage of average debt | |||||||
XBRL | eXtensible Business Reporting Language | |||||||
Yield | annualized finance charges as a percentage of average net receivables | |||||||
Item 1. Financial Statements. |
(dollars in millions, except par value amount) | September 30, 2021 | December 31, 2020 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 821 | $ | 2,272 | ||||||||||
Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.9 billion and $1.8 billion in 2021, respectively, and $1.8 billion and $1.7 billion in 2020, respectively)
|
1,963 | 1,922 | ||||||||||||
Net finance receivables (includes loans of consolidated VIEs of $7.7 billion in 2021 and $8.8 billion in 2020)
|
18,843 | 18,084 | ||||||||||||
Unearned insurance premium and claim reserves | (750) | (771) | ||||||||||||
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $849 million in 2021 and $1.1 billion in 2020)
|
(2,061) | (2,269) | ||||||||||||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses | 16,032 | 15,044 | ||||||||||||
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $445 million in 2021 and $441 million in 2020)
|
459 | 451 | ||||||||||||
Goodwill | 1,437 | 1,422 | ||||||||||||
Other intangible assets | 278 | 306 | ||||||||||||
Other assets | 973 | 1,054 | ||||||||||||
Total assets | $ | 21,963 | $ | 22,471 | ||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||
Long-term debt (includes debt of consolidated VIEs of $6.9 billion in 2021 and $7.8 billion in 2020)
|
$ | 17,661 | $ | 17,800 | ||||||||||
Insurance claims and policyholder liabilities | 616 | 621 | ||||||||||||
Deferred and accrued taxes | 9 | 45 | ||||||||||||
Other liabilities (includes other liabilities of consolidated VIEs of $13 million in 2021 and $15 million in 2020)
|
556 | 564 | ||||||||||||
Total liabilities | 18,842 | 19,030 | ||||||||||||
Contingencies (Note 12)
|
||||||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized, 131,453,207 and 134,341,724 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
|
1 | 1 | ||||||||||||
Additional paid-in capital | 1,665 | 1,655 | ||||||||||||
Accumulated other comprehensive income | 77 | 94 | ||||||||||||
Retained earnings | 1,554 | 1,691 | ||||||||||||
Treasury stock, at cost; 3,047,844 shares at September 30, 2021 and no shares at December 31, 2020, respectively
|
(176) | — | ||||||||||||
Total shareholders’ equity | 3,121 | 3,441 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 21,963 | $ | 22,471 |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||||||||||||||||||
(dollars in millions, except per share amounts) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
Interest income | $ | 1,113 | $ | 1,089 | $ | 3,244 | $ | 3,273 | ||||||||||||||||||||||||
Interest expense | 237 | 255 | 703 | 781 | ||||||||||||||||||||||||||||
Net interest income | 876 | 834 | 2,541 | 2,492 | ||||||||||||||||||||||||||||
Provision for finance receivable losses | 226 | 231 | 356 | 1,186 | ||||||||||||||||||||||||||||
Net interest income after provision for finance receivable losses | 650 | 603 | 2,185 | 1,306 | ||||||||||||||||||||||||||||
Other revenues: | ||||||||||||||||||||||||||||||||
Insurance | 109 | 109 | 323 | 334 | ||||||||||||||||||||||||||||
Investment | 14 | 17 | 47 | 56 | ||||||||||||||||||||||||||||
Net loss on repurchases and repayments of debt | (1) | (38) | (49) | (38) | ||||||||||||||||||||||||||||
Other | 33 | 13 | 75 | 38 | ||||||||||||||||||||||||||||
Total other revenues | 155 | 101 | 396 | 390 | ||||||||||||||||||||||||||||
Other expenses: | ||||||||||||||||||||||||||||||||
Salaries and benefits | 229 | 186 | 613 | 568 | ||||||||||||||||||||||||||||
Other operating expenses | 155 | 134 | 457 | 425 | ||||||||||||||||||||||||||||
Insurance policy benefits and claims | 45 | 43 | 125 | 201 | ||||||||||||||||||||||||||||
Total other expenses | 429 | 363 | 1,195 | 1,194 | ||||||||||||||||||||||||||||
Income before income taxes | 376 | 341 | 1,386 | 502 | ||||||||||||||||||||||||||||
Income taxes | 88 | 91 | 335 | 131 | ||||||||||||||||||||||||||||
Net income | $ | 288 | $ | 250 | $ | 1,051 | $ | 371 | ||||||||||||||||||||||||
Share Data: | ||||||||||||||||||||||||||||||||
Weighted average number of shares outstanding: | ||||||||||||||||||||||||||||||||
Basic | 132,487,234 | 134,321,929 | 133,709,146 | 134,847,170 | ||||||||||||||||||||||||||||
Diluted | 132,924,333 | 134,507,549 | 134,096,382 | 134,999,487 | ||||||||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 2.17 | $ | 1.86 | $ | 7.86 | $ | 2.75 | ||||||||||||||||||||||||
Diluted | $ | 2.17 | $ | 1.86 | $ | 7.84 | $ | 2.75 |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
Net income | $ | 288 | $ | 250 | $ | 1,051 | $ | 371 | ||||||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities | (9) | 16 | (34) | 49 | ||||||||||||||||||||||||||||
Foreign currency translation adjustments | (2) | 2 | 1 | (3) | ||||||||||||||||||||||||||||
Other | 1 | — | 12 | — | ||||||||||||||||||||||||||||
Income tax effect: | ||||||||||||||||||||||||||||||||
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities | 2 | (4) | 8 | (11) | ||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | 1 | ||||||||||||||||||||||||||||
Other | — | — | (3) | — | ||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax, before reclassification adjustments | (8) | 14 | (16) | 36 | ||||||||||||||||||||||||||||
Reclassification adjustments included in net income, net of tax: | ||||||||||||||||||||||||||||||||
Net realized losses on available-for-sale securities, net of tax | — | — | (1) | (1) | ||||||||||||||||||||||||||||
Reclassification adjustments included in net income, net of tax | — | — | (1) | (1) | ||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | (8) | 14 | (17) | 35 | ||||||||||||||||||||||||||||
Comprehensive income | $ | 280 | $ | 264 | $ | 1,034 | $ | 406 |
OneMain Holdings, Inc. Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||
(dollars in millions) |
Common
Stock |
Additional
Paid-in Capital |
Accumulated
Other Comprehensive Income (Loss) |
Retained
Earnings |
Treasury Stock | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||
Balance, July 1, 2021 | $ | 1 | $ | 1,661 | $ | 85 | $ | 1,825 | $ | (35) | $ | 3,537 | ||||||||||||||||||||||||||
Common stock repurchased | — | — | — | — | (141) | (141) | ||||||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures
|
— | 4 | — | — | — | 4 | ||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | (8) | — | — | (8) | ||||||||||||||||||||||||||||||||
Cash dividends *
|
— | — | — | (559) | — | (559) | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 288 | — | 288 | ||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | 1 | $ | 1,665 | $ | 77 | $ | 1,554 | $ | (176) | $ | 3,121 | ||||||||||||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Balance, July 1, 2020 | $ | 1 | $ | 1,648 | $ | 65 | $ | 1,457 | $ | — | $ | 3,171 | ||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures
|
— | 3 | — | — | — | 3 | ||||||||||||||||||||||||||||||||
Other comprehensive income
|
— | — | 14 | — | — | 14 | ||||||||||||||||||||||||||||||||
Cash dividends *
|
— | — | — | (315) | — | (315) | ||||||||||||||||||||||||||||||||
Net income
|
— | — | — | 250 | — | 250 | ||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | 1 | $ | 1,651 | $ | 79 | $ | 1,392 | $ | — | $ | 3,123 | ||||||||||||||||||||||||||
|
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* Cash dividends declared were $4.20 per share and $2.33 per share during the three months ended September 30, 2021 and 2020, respectively.
|
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ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES
|
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Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) (Continued)
|
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OneMain Holdings, Inc. Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||
(dollars in millions) |
Common
Stock |
Additional
Paid-in Capital |
Accumulated
Other Comprehensive Income (Loss) |
Retained
Earnings |
Treasury Stock | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2021 | $ | 1 | $ | 1,655 | $ | 94 | $ | 1,691 | $ | — | $ | 3,441 | ||||||||||||||||||||||||||
Common stock repurchased | — | — | — | — | (176) | (176) | ||||||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures
|
— | 16 | — | — | — | 16 | ||||||||||||||||||||||||||||||||
Withholding tax on share-based compensation
|
— | (6) | — | — | — | (6) | ||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | (17) | — | — | (17) | ||||||||||||||||||||||||||||||||
Cash dividends (a)
|
— | — | — | (1,188) | — | (1,188) | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 1,051 | — | 1,051 | ||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | 1 | $ | 1,665 | $ | 77 | $ | 1,554 | $ | (176) | $ | 3,121 | ||||||||||||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2020 (pre-adoption) | $ | 1 | $ | 1,689 | $ | 44 | $ | 2,596 | $ | — | $ | 4,330 | ||||||||||||||||||||||||||
Net impact of adoption of ASU 2016-13 (b)
|
— | — | — | (828) | — | (828) | ||||||||||||||||||||||||||||||||
Balance, January 1, 2020 (post-adoption) | 1 | 1,689 | 44 | 1,768 | — | 3,502 | ||||||||||||||||||||||||||||||||
Common stock repurchased (c)
|
— | (45) | — | — | — | (45) | ||||||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures
|
— | 13 | — | — | — | 13 | ||||||||||||||||||||||||||||||||
Withholding tax on share-based compensation
|
— | (6) | — | — | — | (6) | ||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | 35 | — | — | 35 | ||||||||||||||||||||||||||||||||
Cash dividends (a) | — | — | — | (747) | — | (747) | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 371 | — | 371 | ||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | 1 | $ | 1,651 | $ | 79 | $ | 1,392 | $ | — | $ | 3,123 | ||||||||||||||||||||||||||
Nine Months Ended
September 30, |
||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | ||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 1,051 | $ | 371 | ||||||||||||||||
Reconciling adjustments: | ||||||||||||||||||||
Provision for finance receivable losses | 356 | 1,186 | ||||||||||||||||||
Depreciation and amortization | 197 | 196 | ||||||||||||||||||
Deferred income tax charge (benefit) | 57 | (72) | ||||||||||||||||||
Net loss on repurchases and repayments of debt | 49 | 38 | ||||||||||||||||||
Share-based compensation expense, net of forfeitures | 16 | 13 | ||||||||||||||||||
Other | (34) | 5 | ||||||||||||||||||
Cash flows due to changes in other assets and other liabilities | (53) | (108) | ||||||||||||||||||
Net cash provided by operating activities | 1,639 | 1,629 | ||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Net principal originations of finance receivables | (1,738) | (278) | ||||||||||||||||||
Proceeds from sales of finance receivables | 361 | — | ||||||||||||||||||
Available-for-sale securities purchased | (347) | (341) | ||||||||||||||||||
Available-for-sale securities called, sold, and matured | 294 | 383 | ||||||||||||||||||
Other securities purchased | (706) | (11) | ||||||||||||||||||
Other securities called, sold, and matured | 691 | 11 | ||||||||||||||||||
Other, net | (54) | (21) | ||||||||||||||||||
Net cash used for investing activities | (1,499) | (257) | ||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Proceeds from issuance of long-term debt, net of issuance costs | 2,168 | 6,445 | ||||||||||||||||||
Repayment of long-term debt | (2,384) | (6,212) | ||||||||||||||||||
Cash dividends | (1,185) | (745) | ||||||||||||||||||
Common stock repurchased | (176) | (45) | ||||||||||||||||||
Withholding tax on share-based compensation | (6) | (6) | ||||||||||||||||||
Net cash used for financing activities | (1,583) | (563) | ||||||||||||||||||
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents | (1,443) | 809 | ||||||||||||||||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period | 2,723 | 1,632 | ||||||||||||||||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period | $ | 1,280 | $ | 2,441 | ||||||||||||||||
Supplemental cash flow information | ||||||||||||||||||||
Cash and cash equivalents | $ | 821 | $ | 1,944 | ||||||||||||||||
Restricted cash and restricted cash equivalents | 459 | 497 | ||||||||||||||||||
Total cash and cash equivalents and restricted cash and restricted cash equivalents | $ | 1,280 | $ | 2,441 | ||||||||||||||||
(dollars in millions, except par value amount) | September 30, 2021 | December 31, 2020 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 798 | $ | 2,272 | ||||||||||
Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.9 billion and $1.8 billion in 2021, respectively, and $1.8 billion and $1.7 billion in 2020, respectively)
|
1,963 | 1,922 | ||||||||||||
Net finance receivables (includes loans of consolidated VIEs of $7.7 billion in 2021 and $8.8 billion in 2020)
|
18,843 | 18,084 | ||||||||||||
Unearned insurance premium and claim reserves | (750) | (771) | ||||||||||||
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $849 million in 2021 and $1.1 billion in 2020)
|
(2,061) | (2,269) | ||||||||||||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses | 16,032 | 15,044 | ||||||||||||
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash
equivalents of consolidated VIEs of $445 million in 2021 and $441 million in 2020)
|
459 | 451 | ||||||||||||
Goodwill | 1,437 | 1,422 | ||||||||||||
Other intangible assets | 278 | 306 | ||||||||||||
Other assets | 972 | 1,054 | ||||||||||||
Total assets | $ | 21,939 | $ | 22,471 | ||||||||||
Liabilities and Shareholder's Equity | ||||||||||||||
Long-term debt (includes debt of consolidated VIEs of $6.9 billion in 2021 and $7.8 billion in 2020)
|
$ | 17,661 | $ | 17,800 | ||||||||||
Insurance claims and policyholder liabilities | 616 | 621 | ||||||||||||
Deferred and accrued taxes | 10 | 47 | ||||||||||||
Other liabilities (includes other liabilities of consolidated VIEs of $13 million in 2021 and $15 million in 2020)
|
556 | 563 | ||||||||||||
Total liabilities | 18,843 | 19,031 | ||||||||||||
Contingencies (Note 12)
|
||||||||||||||
Shareholder's equity: | ||||||||||||||
Common stock, par value $0.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued
and outstanding at September 30, 2021 and December 31, 2020
|
5 | 5 | ||||||||||||
Additional paid-in capital | 1,909 | 1,899 | ||||||||||||
Accumulated other comprehensive income | 77 | 94 | ||||||||||||
Retained earnings | 1,105 | 1,442 | ||||||||||||
Total shareholder's equity | 3,096 | 3,440 | ||||||||||||
Total liabilities and shareholder's equity | $ | 21,939 | $ | 22,471 |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
Interest income | $ | 1,113 | $ | 1,089 | $ | 3,244 | $ | 3,273 | ||||||||||||||||||||||||
Interest expense | 237 | 255 | 703 | 781 | ||||||||||||||||||||||||||||
Net interest income | 876 | 834 | 2,541 | 2,492 | ||||||||||||||||||||||||||||
Provision for finance receivable losses | 226 | 231 | 356 | 1,186 | ||||||||||||||||||||||||||||
Net interest income after provision for finance receivable losses | 650 | 603 | 2,185 | 1,306 | ||||||||||||||||||||||||||||
Other revenues: | ||||||||||||||||||||||||||||||||
Insurance | 109 | 109 | 323 | 334 | ||||||||||||||||||||||||||||
Investment | 14 | 17 | 47 | 56 | ||||||||||||||||||||||||||||
Net loss on repurchases and repayments of debt | (1) | (38) | (49) | (38) | ||||||||||||||||||||||||||||
Other | 33 | 13 | 75 | 38 | ||||||||||||||||||||||||||||
Total other revenues | 155 | 101 | 396 | 390 | ||||||||||||||||||||||||||||
Other expenses: | ||||||||||||||||||||||||||||||||
Salaries and benefits | 229 | 186 | 613 | 568 | ||||||||||||||||||||||||||||
Other operating expenses | 155 | 134 | 457 | 425 | ||||||||||||||||||||||||||||
Insurance policy benefits and claims | 45 | 43 | 125 | 201 | ||||||||||||||||||||||||||||
Total other expenses | 429 | 363 | 1,195 | 1,194 | ||||||||||||||||||||||||||||
Income before income taxes | 376 | 341 | 1,386 | 502 | ||||||||||||||||||||||||||||
Income taxes | 88 | 91 | 335 | 131 | ||||||||||||||||||||||||||||
Net income | $ | 288 | $ | 250 | $ | 1,051 | $ | 371 |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
Net income | $ | 288 | $ | 250 | $ | 1,051 | $ | 371 | ||||||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities | (9) | 16 | (34) | 49 | ||||||||||||||||||||||||||||
Foreign currency translation adjustments | (2) | 2 | 1 | (3) | ||||||||||||||||||||||||||||
Other | 1 | — | 12 | — | ||||||||||||||||||||||||||||
Income tax effect: | ||||||||||||||||||||||||||||||||
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities | 2 | (4) | 8 | (11) | ||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | 1 | ||||||||||||||||||||||||||||
Other | — | — | (3) | — | ||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax, before reclassification adjustments | (8) | 14 | (16) | 36 | ||||||||||||||||||||||||||||
Reclassification adjustments included in net income, net of tax: | ||||||||||||||||||||||||||||||||
Net realized losses on available-for-sale securities, net of tax | — | — | (1) | (1) | ||||||||||||||||||||||||||||
Reclassification adjustments included in net income, net of tax | — | — | (1) | (1) | ||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | (8) | 14 | (17) | 35 | ||||||||||||||||||||||||||||
Comprehensive income | $ | 280 | $ | 264 | $ | 1,034 | $ | 406 |
OneMain Finance Corporation Shareholder's Equity | ||||||||||||||||||||||||||||||||||||||
(dollars in millions) |
Common
Stock |
Additional
Paid-in Capital |
Accumulated
Other Comprehensive Income (Loss) |
Retained
Earnings |
Total Shareholder’s Equity | |||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||
Balance, July 1, 2021 | $ | 5 | $ | 1,905 | $ | 85 | $ | 1,535 | $ | 3,530 | ||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | 4 | — | — | 4 | |||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | (8) | — | (8) | |||||||||||||||||||||||||||||||||
Cash dividends | — | — | — | (718) | (718) | |||||||||||||||||||||||||||||||||
Net income | — | — | — | 288 | 288 | |||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | 5 | $ | 1,909 | $ | 77 | $ | 1,105 | $ | 3,096 | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Balance, July 1, 2020 | $ | 5 | $ | 1,892 | $ | 65 | $ | 1,208 | $ | 3,170 | ||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | 3 | — | — | 3 | |||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | 14 | — | 14 | |||||||||||||||||||||||||||||||||
Cash dividends | — | — | — | (315) | (315) | |||||||||||||||||||||||||||||||||
Net income | — | — | — | 250 | 250 | |||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | 5 | $ | 1,895 | $ | 79 | $ | 1,143 | $ | 3,122 | ||||||||||||||||||||||||||||
ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) (Continued)
|
||||||||||||||||||||||||||||||||||||||
OneMain Finance Corporation Shareholder's Equity | ||||||||||||||||||||||||||||||||||||||
(dollars in millions) |
Common
Stock |
Additional
Paid-in Capital |
Accumulated
Other Comprehensive Income (Loss) |
Retained
Earnings |
Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2021 | $ | 5 | $ | 1,899 | $ | 94 | $ | 1,442 | $ | 3,440 | ||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | 16 | — | — | 16 | |||||||||||||||||||||||||||||||||
Withholding tax on share-based compensation | — | (6) | — | — | (6) | |||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | (17) | — | (17) | |||||||||||||||||||||||||||||||||
Cash dividends | — | — | — | (1,388) | (1,388) | |||||||||||||||||||||||||||||||||
Net income | — | — | — | 1,051 | 1,051 | |||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | 5 | $ | 1,909 | $ | 77 | $ | 1,105 | $ | 3,096 | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2020 (pre-adoption) | $ | 5 | $ | 1,888 | $ | 44 | $ | 2,388 | $ | 4,325 | ||||||||||||||||||||||||||||
Net impact of adoption of ASU 2016-13 *
|
— | — | — | (828) | (828) | |||||||||||||||||||||||||||||||||
Balance, January 1, 2020 (post-adoption) | 5 | 1,888 | 44 | 1,560 | 3,497 | |||||||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | 13 | — | — | 13 | |||||||||||||||||||||||||||||||||
Withholding tax on shared-based compensation | — | (6) | — | — | (6) | |||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | 35 | — | 35 | |||||||||||||||||||||||||||||||||
Cash dividends | — | — | — | (788) | (788) | |||||||||||||||||||||||||||||||||
Net income | — | — | — | 371 | 371 | |||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | 5 | $ | 1,895 | $ | 79 | $ | 1,143 | $ | 3,122 | ||||||||||||||||||||||||||||
Nine Months Ended
September 30, |
||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | ||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 1,051 | $ | 371 | ||||||||||||||||
Reconciling adjustments: | ||||||||||||||||||||
Provision for finance receivable losses | 356 | 1,186 | ||||||||||||||||||
Depreciation and amortization | 197 | 196 | ||||||||||||||||||
Deferred income tax charge (benefit) | 57 | (72) | ||||||||||||||||||
Net loss on repurchases and repayments of debt | 49 | 38 | ||||||||||||||||||
Share-based compensation expense, net of forfeitures | 16 | 13 | ||||||||||||||||||
Other | (34) | 5 | ||||||||||||||||||
Cash flows due to changes in other assets and other liabilities | (50) | (112) | ||||||||||||||||||
Net cash provided by operating activities | 1,642 | 1,625 | ||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Net principal originations of finance receivables | (1,738) | (278) | ||||||||||||||||||
Proceeds from sales of finance receivables | 361 | — | ||||||||||||||||||
Available-for-sale securities purchased | (347) | (341) | ||||||||||||||||||
Available-for-sale securities called, sold, and matured | 294 | 383 | ||||||||||||||||||
Other securities purchased | (706) | (11) | ||||||||||||||||||
Other securities called, sold, and matured | 691 | 11 | ||||||||||||||||||
Other, net | (53) | (21) | ||||||||||||||||||
Net cash used for investing activities | (1,498) | (257) | ||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Proceeds from issuance of long-term debt, net of issuance costs | 2,168 | 6,445 | ||||||||||||||||||
Repayment of long-term debt | (2,384) | (6,212) | ||||||||||||||||||
Cash dividends | (1,388) | (786) | ||||||||||||||||||
Withholding tax on share-based compensation | (6) | (6) | ||||||||||||||||||
Net cash used for financing activities | (1,610) | (559) | ||||||||||||||||||
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents | (1,466) | 809 | ||||||||||||||||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period | 2,723 | 1,632 | ||||||||||||||||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period | $ | 1,257 | $ | 2,441 | ||||||||||||||||
Supplemental cash flow information | ||||||||||||||||||||
Cash and cash equivalents | $ | 798 | $ | 1,944 | ||||||||||||||||
Restricted cash and restricted cash equivalents | 459 | 497 | ||||||||||||||||||
Total cash and cash equivalents and restricted cash and restricted cash equivalents | $ | 1,257 | $ | 2,441 | ||||||||||||||||
1. Business and Basis of Operations |
2. Recent Accounting Pronouncements
|
3. Finance Receivables
|
(dollars in millions) | September 30, 2021 | December 31, 2020 | ||||||||||||
Gross finance receivables * | $ | 18,610 | $ | 17,860 | ||||||||||
Unearned points and fees
|
(226) | (225) | ||||||||||||
Accrued finance charges | 282 | 299 | ||||||||||||
Deferred origination costs | 177 | 150 | ||||||||||||
Total | $ | 18,843 | $ | 18,084 |
(dollars in millions) | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Total | |||||||||||||||||||||||||||||||||||||
September 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||
Current | $ | 8,435 | $ | 4,947 | $ | 3,283 | $ | 1,063 | $ | 270 | $ | 135 | $ | 18,133 | ||||||||||||||||||||||||||||||
30-59 days past due | 73 | 84 | 64 | 23 | 8 | 6 | 258 | |||||||||||||||||||||||||||||||||||||
60-89 days past due | 38 | 57 | 40 | 14 | 5 | 3 | 157 | |||||||||||||||||||||||||||||||||||||
Total performing | 8,546 | 5,088 | 3,387 | 1,100 | 283 | 144 | 18,548 | |||||||||||||||||||||||||||||||||||||
Nonperforming (Nonaccrual) | ||||||||||||||||||||||||||||||||||||||||||||
90-179 days past due | 36 | 122 | 89 | 30 | 10 | 6 | 293 | |||||||||||||||||||||||||||||||||||||
180 days or more past due | — | 1 | 1 | — | — | — | 2 | |||||||||||||||||||||||||||||||||||||
Total nonperforming | 36 | 123 | 90 | 30 | 10 | 6 | 295 | |||||||||||||||||||||||||||||||||||||
Total | $ | 8,582 | $ | 5,211 | $ | 3,477 | $ | 1,130 | $ | 293 | $ | 150 | $ | 18,843 |
(dollars in millions) | 2020 | 2019 | 2018 | 2017 | 2016 | Prior | Total | |||||||||||||||||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||
Current | $ | 8,659 | $ | 5,691 | $ | 2,064 | $ | 651 | $ | 184 | $ | 106 | $ | 17,355 | ||||||||||||||||||||||||||||||
30-59 days past due | 72 | 106 | 44 | 18 | 6 | 5 | 251 | |||||||||||||||||||||||||||||||||||||
60-89 days past due | 44 | 72 | 28 | 11 | 4 | 3 | 162 | |||||||||||||||||||||||||||||||||||||
Total performing | 8,775 | 5,869 | 2,136 | 680 | 194 | 114 | 17,768 | |||||||||||||||||||||||||||||||||||||
Nonperforming (Nonaccrual) | ||||||||||||||||||||||||||||||||||||||||||||
90-179 days past due | 62 | 154 | 59 | 22 | 8 | 5 | 310 | |||||||||||||||||||||||||||||||||||||
180 days or more past due | 1 | 3 | 1 | 1 | — | — | 6 | |||||||||||||||||||||||||||||||||||||
Total nonperforming | 63 | 157 | 60 | 23 | 8 | 5 | 316 | |||||||||||||||||||||||||||||||||||||
Total | $ | 8,838 | $ | 6,026 | $ | 2,196 | $ | 703 | $ | 202 | $ | 119 | $ | 18,084 |
(dollars in millions) | September 30, 2021 | December 31, 2020 | ||||||||||||
TDR gross finance receivables | $ | 652 | $ | 689 | ||||||||||
TDR net finance receivables * | 656 | 691 | ||||||||||||
Allowance for TDR finance receivable losses | 281 | 314 | ||||||||||||
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
TDR average net finance receivables | $ | 665 | $ | 701 | $ | 681 | 692 | |||||||||||||||||||
TDR finance charges recognized | 13 | 13 | 40 | 38 | ||||||||||||||||||||||
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||||||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||
Pre-modification TDR net finance receivables | $ | 105 | $ | 105 | $ | 332 | $ | 392 | ||||||||||||||||||||||||||||||
Post-modification TDR net finance receivables: | ||||||||||||||||||||||||||||||||||||||
Rate reduction | 72 | 67 | 228 | 242 | ||||||||||||||||||||||||||||||||||
Other * | 33 | 38 | 104 | 150 | ||||||||||||||||||||||||||||||||||
Total post-modification TDR net finance receivables | $ | 105 | $ | 105 | $ | 332 | $ | 392 | ||||||||||||||||||||||||||||||
Number of TDR accounts | 12,528 | 13,581 | 40,727 | 52,780 | ||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||
TDR net finance receivables * | $ | 31 | $ | 20 | $ | 88 | $ | 77 | ||||||||||||||||||||||||||||||
Number of TDR accounts | 4,221 | 2,947 | 12,147 | 11,286 | ||||||||||||||||||||||||||||||||||
4. Allowance for Finance Receivable Losses
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 2,000 | $ | 2,324 | $ | 2,269 | $ | 829 | ||||||||||||||||||||||||
Impact of adoption of ASU 2016-13 * | — | — | — | 1,118 | ||||||||||||||||||||||||||||
Provision for finance receivable losses | 226 | 231 | 356 | 1,186 | ||||||||||||||||||||||||||||
Charge-offs | (223) | (274) | (730) | (931) | ||||||||||||||||||||||||||||
Recoveries | 58 | 43 | 166 | 122 | ||||||||||||||||||||||||||||
Balance at end of period | $ | 2,061 | $ | 2,324 | $ | 2,061 | $ | 2,324 | ||||||||||||||||||||||||
(dollars in millions) | September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||
Allowance for finance receivable losses:
|
|||||||||||||||||||||||||||||
Collectively evaluated for impairment
|
$ | 1,780 | $ | 1,955 | |||||||||||||||||||||||||
TDR finance receivables | 281 | 314 | |||||||||||||||||||||||||||
Total | $ | 2,061 | $ | 2,269 | |||||||||||||||||||||||||
Finance receivables: | |||||||||||||||||||||||||||||
Collectively evaluated for impairment
|
$ | 18,187 | $ | 17,393 | |||||||||||||||||||||||||
TDR net finance receivables | 656 | 691 | |||||||||||||||||||||||||||
Total | $ | 18,843 | $ | 18,084 | |||||||||||||||||||||||||
Allowance for finance receivable losses as a percentage of finance receivables
|
10.94 | % | 12.55 | % | |||||||||||||||||||||||||
5. Investment Securities
|
(dollars in millions) |
Cost/
Amortized Cost |
Unrealized
Gains |
Unrealized
Losses |
Fair
Value |
||||||||||||||||||||||||||||
September 30, 2021* | ||||||||||||||||||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||||||||||||||||||
U.S. government and government sponsored entities | $ | 14 | $ | — | $ | — | $ | 14 | ||||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions
|
80 | 4 | — | 84 | ||||||||||||||||||||||||||||
Commercial paper
|
28 | — | — | 28 | ||||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities
|
143 | 5 | — | 148 | ||||||||||||||||||||||||||||
Corporate debt
|
1,213 | 72 | (3) | 1,282 | ||||||||||||||||||||||||||||
Mortgage-backed, asset-backed, and collateralized:
|
||||||||||||||||||||||||||||||||
RMBS
|
177 | 4 | (1) | 180 | ||||||||||||||||||||||||||||
CMBS
|
50 | 2 | — | 52 | ||||||||||||||||||||||||||||
CDO/ABS
|
83 | 1 | — | 84 | ||||||||||||||||||||||||||||
Total | $ | 1,788 | $ | 88 | $ | (4) | $ | 1,872 | ||||||||||||||||||||||||
December 31, 2020* | ||||||||||||||||||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||||||||||||||||||
U.S. government and government sponsored entities
|
$ | 12 | $ | — | $ | — | $ | 12 | ||||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions
|
87 | 5 | — | 92 | ||||||||||||||||||||||||||||
Commercial paper | 28 | — | — | 28 | ||||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities | 137 | 9 | — | 146 | ||||||||||||||||||||||||||||
Corporate debt | 1,124 | 95 | (1) | 1,218 | ||||||||||||||||||||||||||||
Mortgage-backed, asset-backed, and collateralized:
|
||||||||||||||||||||||||||||||||
RMBS | 208 | 7 | — | 215 | ||||||||||||||||||||||||||||
CMBS | 55 | 3 | — | 58 | ||||||||||||||||||||||||||||
CDO/ABS | 77 | 2 | (1) | 78 | ||||||||||||||||||||||||||||
Total | $ | 1,728 | $ | 121 | $ | (2) | $ | 1,847 | ||||||||||||||||||||||||
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, 2021 | ||||||||||||||||||||||||||||||||||||||
U.S. government and government sponsored entities
|
$ | 1 | $ | — | $ | — | $ | — | $ | 1 | $ | — | ||||||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions
|
7 | — | — | — | 7 | — | ||||||||||||||||||||||||||||||||
Commercial paper
|
1 | — | — | — | 1 | — | ||||||||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities
|
21 | — | 1 | — | 22 | — | ||||||||||||||||||||||||||||||||
Corporate debt | 153 | (3) | 8 | — | 161 | (3) | ||||||||||||||||||||||||||||||||
Mortgage-backed, asset-backed, and collateralized:
|
||||||||||||||||||||||||||||||||||||||
RMBS | 66 | (1) | — | — | 66 | (1) | ||||||||||||||||||||||||||||||||
CDO/ABS | 19 | — | 3 | — | 22 | — | ||||||||||||||||||||||||||||||||
Total | $ | 268 | $ | (4) | $ | 12 | $ | — | $ | 280 | $ | (4) | ||||||||||||||||||||||||||
December 31, 2020
|
||||||||||||||||||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions
|
$ | 2 | $ | — | $ | — | $ | — | $ | 2 | $ | — | ||||||||||||||||||||||||||
Commercial paper
|
19 | — | — | — | 19 | — | ||||||||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities
|
1 | — | — | — | 1 | — | ||||||||||||||||||||||||||||||||
Corporate debt | 45 | (1) | 8 | — | 53 | (1) | ||||||||||||||||||||||||||||||||
Mortgage-backed, asset-backed, and collateralized:
|
||||||||||||||||||||||||||||||||||||||
CMBS | 8 | — | — | — | 8 | — | ||||||||||||||||||||||||||||||||
CDO/ABS | 17 | (1) | — | — | 17 | (1) | ||||||||||||||||||||||||||||||||
Total | $ | 92 | $ | (2) | $ | 8 | $ | — | $ | 100 | $ | (2) |
(dollars in millions) |
Fair
Value |
Amortized
Cost |
||||||||||||
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
|
||||||||||||||
Due in 1 year or less | $ | 146 | $ | 145 | ||||||||||
Due after 1 year through 5 years | 577 | 548 | ||||||||||||
Due after 5 years through 10 years | 658 | 626 | ||||||||||||
Due after 10 years | 175 | 159 | ||||||||||||
Mortgage-backed, asset-backed, and collateralized securities | 316 | 310 | ||||||||||||
Total | $ | 1,872 | $ | 1,788 |
(dollars in millions) | September 30, 2021 | December 31, 2020 | ||||||||||||
Fixed maturity other securities: | ||||||||||||||
Bonds | ||||||||||||||
Non-U.S. government and government sponsored entities | $ | — | $ | 1 | ||||||||||
Corporate debt | 11 | 17 | ||||||||||||
Mortgage-backed, asset-backed, and collateralized bonds | 28 | 17 | ||||||||||||
Total bonds | 39 | 35 | ||||||||||||
Preferred stock * | 22 | 13 | ||||||||||||
Common stock * | 30 | 27 | ||||||||||||
Total | $ | 91 | $ | 75 |
6. Long-term Debt
|
Senior Debt | ||||||||||||||||||||||||||
(dollars in millions) | Securitizations |
Unsecured
Notes (a) |
Junior
Subordinated Debt (a) |
Total | ||||||||||||||||||||||
Interest rates (b) |
0.81% - 6.94%
|
3.50% - 8.88%
|
1.88 | % | ||||||||||||||||||||||
Remainder of 2021 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
2022 | — | 992 | — | 992 | ||||||||||||||||||||||
2023 | — | 1,175 | — | 1,175 | ||||||||||||||||||||||
2024 | — | 1,300 | — | 1,300 | ||||||||||||||||||||||
2025 | — | 1,835 | — | 1,835 | ||||||||||||||||||||||
2026-2067 | — | 5,349 | 350 | 5,699 | ||||||||||||||||||||||
Securitizations (c) | 6,955 | — | — | 6,955 | ||||||||||||||||||||||
Total principal maturities | $ | 6,955 | $ | 10,651 | $ | 350 | $ | 17,956 | ||||||||||||||||||
Total carrying amount | $ | 6,924 | $ | 10,565 | $ | 172 | $ | 17,661 | ||||||||||||||||||
Debt issuance costs (d) | $ | (28) | $ | (89) | $ | — | $ | (117) |
7. Variable Interest Entities
|
(dollars in millions) | September 30, 2021 | December 31, 2020 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 2 | $ | 2 | ||||||||||
Net finance receivables | 7,731 | 8,772 | ||||||||||||
Allowance for finance receivable losses | 849 | 1,085 | ||||||||||||
Restricted cash and restricted cash equivalents | 445 | 441 | ||||||||||||
Other assets | 33 | 33 | ||||||||||||
Liabilities | ||||||||||||||
Long-term debt | $ | 6,924 | $ | 7,789 | ||||||||||
Other liabilities | 13 | 15 |
8. Insurance
|
At or for the
Nine Months Ended September 30, |
||||||||||||||
(dollars in millions) | 2021 | 2020 | ||||||||||||
Balance at beginning of period | $ | 148 | $ | 117 | ||||||||||
Less reinsurance recoverables | (3) | (4) | ||||||||||||
Net balance at beginning of period | 145 | 113 | ||||||||||||
Additions for losses and loss adjustment expenses incurred to: | ||||||||||||||
Current year | 158 | 221 | ||||||||||||
Prior years * | (19) | (10) | ||||||||||||
Total | 139 | 211 | ||||||||||||
Reductions for losses and loss adjustment expenses paid related to: | ||||||||||||||
Current year | (91) | (107) | ||||||||||||
Prior years | (79) | (60) | ||||||||||||
Total | (170) | (167) | ||||||||||||
Net balance at end of period | 114 | 157 | ||||||||||||
Plus reinsurance recoverables | 3 | 3 | ||||||||||||
Balance at end of period | $ | 117 | $ | 160 |
9. Capital Stock and Earnings Per Share (OMH Only)
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||
Balance at beginning of period | 133,884,043 | 134,319,171 | 134,341,724 | 136,101,156 | ||||||||||||||||||||||||||||
Common stock issued | 4,653 | 3,842 | 159,327 | 253,555 | ||||||||||||||||||||||||||||
Common stock repurchased * | (2,435,489) | — | (3,047,844) | (2,031,698) | ||||||||||||||||||||||||||||
Balance at end of period | 131,453,207 | 134,323,013 | 131,453,207 | 134,323,013 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
(dollars in millions, except per share data) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
Numerator (basic and diluted): | ||||||||||||||||||||||||||||||||
Net income | $ | 288 | $ | 250 | $ | 1,051 | $ | 371 | ||||||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||||||||
Weighted average number of shares outstanding (basic) | 132,487,234 | 134,321,929 | 133,709,146 | 134,847,170 | ||||||||||||||||||||||||||||
Effect of dilutive securities * | 437,099 | 185,620 | 387,236 | 152,317 | ||||||||||||||||||||||||||||
Weighted average number of shares outstanding (diluted) | 132,924,333 | 134,507,549 | 134,096,382 | 134,999,487 | ||||||||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 2.17 | $ | 1.86 | $ | 7.86 | $ | 2.75 | ||||||||||||||||||||||||
Diluted | $ | 2.17 | $ | 1.86 | $ | 7.84 | $ | 2.75 |
10. Accumulated Other Comprehensive Income (Loss)
|
(dollars in millions) |
Unrealized
Gains (Losses) Available-for-Sale Securities (a) |
Retirement
Plan Liabilities Adjustments |
Foreign
Currency Translation Adjustments |
Other (b) |
Total
Accumulated Other Comprehensive Income (Loss) |
|||||||||||||||||||||||||||
Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 71 | $ | 1 | $ | 5 | $ | 8 | $ | 85 | ||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications
|
(7) | — | (2) | 1 | (8) | |||||||||||||||||||||||||||
Balance at end of period | $ | 64 | $ | 1 | $ | 3 | $ | 9 | $ | 77 | ||||||||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 66 | $ | 3 | $ | (4) | $ | — | $ | 65 | ||||||||||||||||||||||
Other comprehensive income before reclassifications
|
12 | — | 2 | — | 14 | |||||||||||||||||||||||||||
Balance at end of period | $ | 78 | $ | 3 | $ | (2) | $ | — | $ | 79 | ||||||||||||||||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 91 | $ | 1 | $ | 2 | $ | — | $ | 94 | ||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications
|
(26) | — | 1 | 9 | (16) | |||||||||||||||||||||||||||
Reclassification adjustments from accumulated other comprehensive income | (1) | — | — | — | (1) | |||||||||||||||||||||||||||
Balance at end of period | $ | 64 | $ | 1 | $ | 3 | $ | 9 | $ | 77 | ||||||||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 41 | $ | 3 | $ | — | $ | — | $ | 44 | ||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications
|
38 | — | (2) | — | 36 | |||||||||||||||||||||||||||
Reclassification adjustments from accumulated other comprehensive income
|
(1) | — | — | (1) | ||||||||||||||||||||||||||||
Balance at end of period | $ | 78 | $ | 3 | $ | (2) | $ | — | $ | 79 | ||||||||||||||||||||||
11. Income Taxes |
12. Contingencies
|
13. Segment Information
|
(dollars in millions) |
Consumer
and Insurance |
Other |
Segment to
GAAP Adjustment |
Consolidated
Total |
||||||||||||||||||||||
Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||
Interest income | $ | 1,111 | $ | 1 | $ | 1 | $ | 1,113 | ||||||||||||||||||
Interest expense | 235 | 1 | 1 | 237 | ||||||||||||||||||||||
Provision for finance receivable losses
|
224 | — | 2 | 226 | ||||||||||||||||||||||
Net interest income after provision for finance receivable losses
|
652 | — | (2) | 650 | ||||||||||||||||||||||
Other revenues | 151 | 4 | — | 155 | ||||||||||||||||||||||
Other expenses | 415 | 5 | 9 | 429 | ||||||||||||||||||||||
Income (loss) before income tax expense (benefit)
|
$ | 388 | $ | (1) | $ | (11) | $ | 376 | ||||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Interest income | $ | 1,086 | $ | 1 | $ | 2 | $ | 1,089 | ||||||||||||||||||
Interest expense | 250 | 1 | 4 | 255 | ||||||||||||||||||||||
Provision for finance receivable losses
|
232 | — | (1) | 231 | ||||||||||||||||||||||
Net interest income after provision for finance receivable losses
|
604 | — | (1) | 603 | ||||||||||||||||||||||
Other revenues | 99 | 4 | (2) | 101 | ||||||||||||||||||||||
Other expenses | 352 | 6 | 5 | 363 | ||||||||||||||||||||||
Income (loss) before income tax expense (benefit)
|
$ | 351 | $ | (2) | $ | (8) | $ | 341 | ||||||||||||||||||
(dollars in millions) |
Consumer
and Insurance |
Other |
Segment to
GAAP Adjustment |
Consolidated
Total |
||||||||||||||||||||||
At or for the Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||
Interest income | $ | 3,237 | $ | 4 | $ | 3 | $ | 3,244 | ||||||||||||||||||
Interest expense | 698 | 3 | 2 | 703 | ||||||||||||||||||||||
Provision for finance receivable losses
|
351 | — | 5 | 356 | ||||||||||||||||||||||
Net interest income after provision for finance receivable losses
|
2,188 | 1 | (4) | 2,185 | ||||||||||||||||||||||
Other revenues | 395 | 10 | (9) | 396 | ||||||||||||||||||||||
Other expenses | 1,154 | 17 | 24 | 1,195 | ||||||||||||||||||||||
Income (loss) before income tax expense (benefit)
|
$ | 1,429 | $ | (6) | $ | (37) | $ | 1,386 | ||||||||||||||||||
Assets | $ | 19,897 | $ | 44 | $ | 2,022 | $ | 21,963 |
At or for the Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Interest income | $ | 3,260 | $ | 4 | $ | 9 | $ | 3,273 | ||||||||||||||||||
Interest expense | 765 | 3 | 13 | 781 | ||||||||||||||||||||||
Provision for finance receivable losses
|
1,184 | — | 2 | 1,186 | ||||||||||||||||||||||
Net interest income after provision for finance receivable losses
|
1,311 | 1 | (6) | 1,306 | ||||||||||||||||||||||
Other revenues | 380 | 12 | (2) | 390 | ||||||||||||||||||||||
Other expenses | 1,161 | 18 | 15 | 1,194 | ||||||||||||||||||||||
Income (loss) before income tax expense (benefit)
|
$ | 530 | $ | (5) | $ | (23) | $ | 502 | ||||||||||||||||||
Assets | $ | 19,743 | $ | 63 | $ | 2,051 | $ | 21,857 |
14. Fair Value Measurements
|
Fair Value Measurements Using |
Total
Fair Value |
Total
Carrying Value |
||||||||||||||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
September 30, 2021 | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 821 | $ | — | $ | — | $ | 821 | $ | 821 | ||||||||||||||||||||||
Investment securities | 56 | 1,901 | 6 | 1,963 | 1,963 | |||||||||||||||||||||||||||
Net finance receivables, less allowance for finance receivable losses
|
— | — | 19,845 | 19,845 | 16,782 | |||||||||||||||||||||||||||
Restricted cash and restricted cash equivalents | 459 | — | — | 459 | 459 | |||||||||||||||||||||||||||
Other assets *
|
— | — | 53 | 53 | 49 | |||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Long-term debt | $ | — | $ | 18,933 | $ | — | $ | 18,933 | $ | 17,661 | ||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 2,255 | $ | 17 | $ | — | $ | 2,272 | $ | 2,272 | ||||||||||||||||||||||
Investment securities | 44 | 1,870 | 8 | 1,922 | 1,922 | |||||||||||||||||||||||||||
Net finance receivables, less allowance for finance receivable losses
|
— | — | 18,629 | 18,629 | 15,815 | |||||||||||||||||||||||||||
Restricted cash and restricted cash equivalents | 451 | — | — | 451 | 451 | |||||||||||||||||||||||||||
Other assets *
|
— | 2 | 60 | 62 | 62 | |||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Long-term debt | $ | — | $ | 19,426 | $ | — | $ | 19,426 | $ | 17,800 |
Fair Value Measurements Using | Total Carried At Fair Value | |||||||||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
September 30, 2021 | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash equivalents in mutual funds | $ | 204 | $ | — | $ | — | $ | 204 | ||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||
U.S. government and government sponsored entities | — | 14 | — | 14 | ||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions
|
— | 84 | — | 84 | ||||||||||||||||||||||
Commercial paper | — | 28 | — | 28 | ||||||||||||||||||||||
Non-U.S. government and government sponsored entities | — | 148 | — | 148 | ||||||||||||||||||||||
Corporate debt | 5 | 1,273 | 4 | 1,282 | ||||||||||||||||||||||
RMBS | — | 180 | — | 180 | ||||||||||||||||||||||
CMBS | — | 52 | — | 52 | ||||||||||||||||||||||
CDO/ABS | — | 84 | — | 84 | ||||||||||||||||||||||
Total available-for-sale securities | 5 | 1,863 | 4 | 1,872 | ||||||||||||||||||||||
Other securities | ||||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||
Corporate debt | — | 10 | 1 | 11 | ||||||||||||||||||||||
RMBS | — | 1 | — | 1 | ||||||||||||||||||||||
CDO/ABS | — | 27 | — | 27 | ||||||||||||||||||||||
Total bonds | — | 38 | 1 | 39 | ||||||||||||||||||||||
Preferred stock | 22 | — | — | 22 | ||||||||||||||||||||||
Common stock | 29 | — | 1 | 30 | ||||||||||||||||||||||
Total other securities | 51 | 38 | 2 | 91 | ||||||||||||||||||||||
Total investment securities | 56 | 1,901 | 6 | 1,963 | ||||||||||||||||||||||
Restricted cash equivalents in mutual funds | 450 | — | — | 450 | ||||||||||||||||||||||
Total | $ | 710 | $ | 1,901 | $ | 6 | $ | 2,617 |
Fair Value Measurements Using | Total Carried At Fair Value | |||||||||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash equivalents in mutual funds | $ | 2,018 | $ | — | $ | — | $ | 2,018 | ||||||||||||||||||
Cash equivalents in securities | — | 17 | — | 17 | ||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||
U.S. government and government sponsored entities | — | 12 | — | 12 | ||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions
|
— | 92 | — | 92 | ||||||||||||||||||||||
Certificates of deposit and commercial paper
|
— | 28 | — | 28 | ||||||||||||||||||||||
Non-U.S. government and government sponsored entities | — | 146 | — | 146 | ||||||||||||||||||||||
Corporate debt | 5 | 1,207 | 6 | 1,218 | ||||||||||||||||||||||
RMBS | — | 215 | — | 215 | ||||||||||||||||||||||
CMBS | — | 58 | — | 58 | ||||||||||||||||||||||
CDO/ABS | — | 78 | — | 78 | ||||||||||||||||||||||
Total available-for-sale securities | 5 | 1,836 | 6 | 1,847 | ||||||||||||||||||||||
Other securities | ||||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities | — | 1 | — | 1 | ||||||||||||||||||||||
Corporate debt | — | 16 | 1 | 17 | ||||||||||||||||||||||
CDO/ABS | — | 17 | — | 17 | ||||||||||||||||||||||
Total bonds | — | 34 | 1 | 35 | ||||||||||||||||||||||
Preferred stock | 13 | — | — | 13 | ||||||||||||||||||||||
Common stock | 26 | — | 1 | 27 | ||||||||||||||||||||||
Total other securities | 39 | 34 | 2 | 75 | ||||||||||||||||||||||
Total investment securities | 44 | 1,870 | 8 | 1,922 | ||||||||||||||||||||||
Restricted cash equivalents in mutual funds | 441 | — | — | 441 | ||||||||||||||||||||||
Total | $ | 2,503 | $ | 1,887 | $ | 8 | $ | 4,398 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Topic | Page | |||||||
Forward-Looking Statements |
Overview |
Recent Developments and Outlook |
Results of Operations |
At or for the
Three Months Ended September 30, |
At or for the
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
(dollars in millions, except per share amounts) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
Interest income | $ | 1,113 | $ | 1,089 | $ | 3,244 | $ | 3,273 | ||||||||||||||||||||||||
Interest expense | 237 | 255 | 703 | 781 | ||||||||||||||||||||||||||||
Provision for finance receivable losses | 226 | 231 | 356 | 1,186 | ||||||||||||||||||||||||||||
Net interest income after provision for finance receivable losses
|
650 | 603 | 2,185 | 1,306 | ||||||||||||||||||||||||||||
Other revenues | 155 | 101 | 396 | 390 | ||||||||||||||||||||||||||||
Other expenses | 429 | 363 | 1,195 | 1,194 | ||||||||||||||||||||||||||||
Income before income taxes
|
376 | 341 | 1,386 | 502 | ||||||||||||||||||||||||||||
Income taxes | 88 | 91 | 335 | 131 | ||||||||||||||||||||||||||||
Net income | $ | 288 | $ | 250 | $ | 1,051 | $ | 371 | ||||||||||||||||||||||||
Share Data: | ||||||||||||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||||||||
Diluted | $ | 2.17 | $ | 1.86 | $ | 7.84 | $ | 2.75 | ||||||||||||||||||||||||
Selected Financial Statistics * | ||||||||||||||||||||||||||||||||
Finance receivables held for investment: | ||||||||||||||||||||||||||||||||
Net finance receivables | $ | 18,843 | $ | 17,817 | $ | 18,843 | $ | 17,817 | ||||||||||||||||||||||||
Number of accounts | 2,334,395 | 2,297,167 | 2,334,395 | 2,297,167 | ||||||||||||||||||||||||||||
Average net receivables | $ | 18,545 | $ | 17,740 | $ | 18,029 | $ | 18,010 | ||||||||||||||||||||||||
Yield | 23.79 | % | 24.39 | % | 24.02 | % | 24.24 | % | ||||||||||||||||||||||||
Gross charge-off ratio | 4.76 | % | 6.14 | % | 5.41 | % | 6.90 | % | ||||||||||||||||||||||||
Recovery ratio | (1.24) | % | (0.95) | % | (1.23) | % | (0.91) | % | ||||||||||||||||||||||||
Net charge-off ratio | 3.52 | % | 5.19 | % | 4.19 | % | 5.99 | % | ||||||||||||||||||||||||
30-89 Delinquency ratio | 2.20 | % | 1.95 | % | 2.20 | % | 1.95 | % | ||||||||||||||||||||||||
Origination volume | $ | 3,870 | $ | 2,887 | $ | 9,989 | $ | 7,523 | ||||||||||||||||||||||||
Number of accounts originated | 404,602 | 300,376 | 1,018,924 | 771,628 | ||||||||||||||||||||||||||||
Debt balances: | ||||||||||||||||||||||||||||||||
Long-term debt balance | $ | 17,661 | $ | 17,531 | $ | 17,661 | $ | 17,531 | ||||||||||||||||||||||||
Average daily debt balance | 17,680 | 17,546 | 17,192 | 18,331 |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
Consumer and Insurance | ||||||||||||||||||||||||||||||||
Income before income taxes - Segment Accounting Basis
|
$ | 388 | $ | 351 | $ | 1,429 | $ | 530 | ||||||||||||||||||||||||
Adjustments:
|
||||||||||||||||||||||||||||||||
Cash-settled stock-based awards | 31 | — | 31 | — | ||||||||||||||||||||||||||||
Direct costs associated with COVID-19
|
1 | 4 | 5 | 13 | ||||||||||||||||||||||||||||
Acquisition-related transaction and integration expenses | — | 2 | — | 10 | ||||||||||||||||||||||||||||
Net loss on repurchases and repayments of debt
|
1 | 35 | 40 | 35 | ||||||||||||||||||||||||||||
Restructuring charges | — | 1 | — | 7 | ||||||||||||||||||||||||||||
Adjusted pretax income (non-GAAP)
|
$ | 421 | $ | 393 | $ | 1,505 | $ | 595 | ||||||||||||||||||||||||
Provision for finance receivable losses | $ | 224 | $ | 232 | $ | 351 | $ | 1,184 | ||||||||||||||||||||||||
Net charge-offs | (165) | (232) | (564) | (810) | ||||||||||||||||||||||||||||
Pretax capital generation (non-GAAP) | $ | 480 | $ | 393 | $ | 1,292 | $ | 969 | ||||||||||||||||||||||||
Segment Results |
At or for the
Three Months Ended September 30, |
At or for the
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
(dollars in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
Interest income | $ | 1,111 | $ | 1,086 | $ | 3,237 | $3,260 | |||||||||||||||||||||||||
Interest expense | 235 | 250 | 698 | 765 | ||||||||||||||||||||||||||||
Provision for finance receivable losses | 224 | 232 | 351 | 1,184 | ||||||||||||||||||||||||||||
Net interest income after provision for finance receivable losses
|
652 | 604 | 2,188 | 1,311 | ||||||||||||||||||||||||||||
Other revenues | 152 | 134 | 435 | 415 | ||||||||||||||||||||||||||||
Other expenses | 383 | 345 | 1,118 | 1,131 | ||||||||||||||||||||||||||||
Adjusted pretax income (non-GAAP) | $ | 421 | $ | 393 | $ | 1,505 | $595 | |||||||||||||||||||||||||
Selected Financial Statistics * | ||||||||||||||||||||||||||||||||
Finance receivables held for investment: | ||||||||||||||||||||||||||||||||
Net finance receivables | $ | 18,847 | $ | 17,826 | $ | 18,847 | $ | 17,826 | ||||||||||||||||||||||||
Number of accounts | 2,334,395 | 2,297,167 | 2,334,395 | 2,297,167 | ||||||||||||||||||||||||||||
Average net receivables | $ | 18,549 | $ | 17,750 | $ | 18,034 | $ | 18,023 | ||||||||||||||||||||||||
Yield | 23.77 | % | 24.34 | % | 24.00 | % | 24.16 | % | ||||||||||||||||||||||||
Gross charge-off ratio | 4.77 | % | 6.15 | % | 5.41 | % | 6.91 | % | ||||||||||||||||||||||||
Recovery ratio | (1.24) | % | (0.95) | % | (1.22) | % | (0.91) | % | ||||||||||||||||||||||||
Net charge-off ratio | 3.52 | % | 5.20 | % | 4.19 | % | 6.00 | % | ||||||||||||||||||||||||
30-89 Delinquency ratio | 2.20 | % | 1.95 | % | 2.20 | % | 1.95 | % | ||||||||||||||||||||||||
Origination volume | $ | 3,870 | $ | 2,887 | $ | 9,989 | $ | 7,523 | ||||||||||||||||||||||||
Number of accounts originated | 404,602 | 300,376 | 1,018,924 | 771,628 | ||||||||||||||||||||||||||||
Credit Quality |
(dollars in millions) |
Consumer
and Insurance |
Segment to
GAAP Adjustment |
GAAP
Basis |
|||||||||||||||||||||||
September 30, 2021 | ||||||||||||||||||||||||||
Current
|
$ | 18,137 | $ | (4) | $ | 18,133 | ||||||||||||||||||||
30-59 days past due
|
258 | — | 258 | |||||||||||||||||||||||
Delinquent (60-89 days past due)
|
157 | — | 157 | |||||||||||||||||||||||
Performing
|
18,552 | (4) | 18,548 | |||||||||||||||||||||||
Nonperforming (90+ days past due)
|
295 | — | 295 | |||||||||||||||||||||||
Total net finance receivables
|
$ | 18,847 | $ | (4) | $ | 18,843 | ||||||||||||||||||||
Delinquency ratio
|
||||||||||||||||||||||||||
30-89 days past due
|
2.20 | % | * | 2.20 | % | |||||||||||||||||||||
30+ days past due | 3.77 | % | * | 3.77 | % | |||||||||||||||||||||
60+ days past due | 2.40 | % | * | 2.40 | % | |||||||||||||||||||||
90+ days past due | 1.57 | % | * | 1.57 | % | |||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
Current
|
$ | 17,362 | $ | (7) | $ | 17,355 | ||||||||||||||||||||
30-59 days past due
|
251 | — | 251 | |||||||||||||||||||||||
Delinquent (60-89 days past due)
|
162 | — | 162 | |||||||||||||||||||||||
Performing
|
17,775 | (7) | 17,768 | |||||||||||||||||||||||
Nonperforming (90+ days past due)
|
316 | — | 316 | |||||||||||||||||||||||
Total net finance receivables
|
$ | 18,091 | $ | (7) | $ | 18,084 | ||||||||||||||||||||
Delinquency ratio
|
||||||||||||||||||||||||||
30-89 days past due
|
2.28 | % | * | 2.28 | % | |||||||||||||||||||||
30+ days past due | 4.03 | % | * | 4.03 | % | |||||||||||||||||||||
60+ days past due | 2.64 | % | * | 2.64 | % | |||||||||||||||||||||
90+ days past due | 1.75 | % | * | 1.75 | % |
(dollars in millions) |
Consumer
and Insurance |
Segment to
GAAP Adjustment |
Consolidated
Total |
|||||||||||||||||||||||
Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||
Balance at beginning of period
|
$ | 2,011 | $ | (11) | $ | 2,000 | ||||||||||||||||||||
Provision for finance receivable losses
|
224 | 2 | 226 | |||||||||||||||||||||||
Charge-offs
|
(223) | — | (223) | |||||||||||||||||||||||
Recoveries
|
58 | — | 58 | |||||||||||||||||||||||
Balance at end of period
|
$ | 2,070 | $ | (9) | $ | 2,061 | ||||||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Balance at beginning of period
|
$ | 2,342 | $ | (18) | $ | 2,324 | ||||||||||||||||||||
Provision for finance receivable losses
|
232 | (1) | 231 | |||||||||||||||||||||||
Charge-offs
|
(274) | — | (274) | |||||||||||||||||||||||
Recoveries
|
42 | 1 | 43 | |||||||||||||||||||||||
Balance at end of period
|
$ | 2,342 | $ | (18) | $ | 2,324 | ||||||||||||||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||
Balance at beginning of period
|
$ | 2,283 | $ | (14) | $ | 2,269 | ||||||||||||||||||||
Provision for finance receivable losses
|
351 | 5 | 356 | |||||||||||||||||||||||
Charge-offs
|
(730) | — | (730) | |||||||||||||||||||||||
Recoveries
|
166 | — | 166 | |||||||||||||||||||||||
Balance at end of period
|
$ | 2,070 | $ | (9) | $ | 2,061 | ||||||||||||||||||||
Allowance ratio
|
10.98 | % | (a) | 10.94 | % | |||||||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Balance at beginning of period
|
$ | 849 | $ | (20) | $ | 829 | ||||||||||||||||||||
Impact of adoption of ASU 2016-13 (b) | 1,119 | (1) | 1,118 | |||||||||||||||||||||||
Provision for finance receivable losses
|
1,184 | 2 | 1,186 | |||||||||||||||||||||||
Charge-offs
|
(932) | 1 | (931) | |||||||||||||||||||||||
Recoveries
|
122 | — | 122 | |||||||||||||||||||||||
Balance at end of period
|
$ | 2,342 | $ | (18) | $ | 2,324 | ||||||||||||||||||||
Allowance ratio
|
13.14 | % | (a) | 13.05 | % | |||||||||||||||||||||
(dollars in millions) |
Consumer
and Insurance |
Segment to
GAAP Adjustment |
GAAP
Basis |
|||||||||||||||||||||||
September 30, 2021 | ||||||||||||||||||||||||||
TDR net finance receivables | $ | 681 | $ | (25) | $ | 656 | ||||||||||||||||||||
Allowance for TDR finance receivable losses | 292 | (11) | 281 | |||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
TDR net finance receivables | $ | 728 | $ | (37) | $ | 691 | ||||||||||||||||||||
Allowance for TDR finance receivable losses | 332 | (18) | 314 |
(dollars in millions) | September 30, 2021 | December 31, 2020 | ||||||||||||
FICO scores * | ||||||||||||||
660 or higher | $ | 4,896 | $ | 4,653 | ||||||||||
620-659 | 5,172 | 4,877 | ||||||||||||
619 or below | 8,775 | 8,554 | ||||||||||||
Total | $ | 18,843 | $ | 18,084 |
Liquidity and Capital Resources |
Declaration Date | Record Date | Payment Date | Dividend Per Share | Amount Paid | |||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
February 8, 2021 | February 18, 2021 | February 25, 2021 | $ | 3.95 | * | $ | 531 | ||||||||||||||||||||||
April 26, 2021 | May 6, 2021 | May 13, 2021 | 0.70 | 94 | |||||||||||||||||||||||||
July 21, 2021 | August 6, 2021 | August 13, 2021 | 4.20 | * | 555 | ||||||||||||||||||||||||
Total | $ | 8.85 | $ | 1,180 |
(dollars in millions) | Issue Amount (a) | Initial Collateral Balance |
Current
Note Amounts Outstanding (a) |
Current Collateral Balance
(b) |
Current
Weighted Average Interest Rate |
Original
Revolving Period |
||||||||||||||||||||||||||||||||||||||||||||
SLFT 2017-A | $ | 652 | $ | 685 | $ | 201 | $ | 261 | 3.62 | % | 3 years | |||||||||||||||||||||||||||||||||||||||
OMFIT 2015-3 | 293 | 329 | 107 | 130 | 5.23 | % | 5 years | |||||||||||||||||||||||||||||||||||||||||||
OMFIT 2016-3 | 350 | 397 | 212 | 290 | 4.58 | % | 5 years | |||||||||||||||||||||||||||||||||||||||||||
OMFIT 2018-1 | 632 | 650 | 381 | 423 | 3.78 | % | 3 years | |||||||||||||||||||||||||||||||||||||||||||
OMFIT 2018-2 | 368 | 381 | 350 | 400 | 3.87 | % | 5 years | |||||||||||||||||||||||||||||||||||||||||||
OMFIT 2019-1 | 632 | 654 | 356 | 402 | 4.01 | % | 2 years | |||||||||||||||||||||||||||||||||||||||||||
OMFIT 2019-2 | 900 | 947 | 900 | 995 | 3.30 | % | 7 years | |||||||||||||||||||||||||||||||||||||||||||
OMFIT 2019-A | 789 | 892 | 750 | 892 | 3.78 | % | 7 years | |||||||||||||||||||||||||||||||||||||||||||
OMFIT 2020-1 | 821 | 958 | 821 | 958 | 4.12 | % | 2 years | |||||||||||||||||||||||||||||||||||||||||||
OMFIT 2020-2 | 1,000 | 1,053 | 1,000 | 1,053 | 2.03 | % | 5 years | |||||||||||||||||||||||||||||||||||||||||||
OMFIT 2021-1 | 850 | 904 | 850 | 904 | 1.57 | % | 5 years | |||||||||||||||||||||||||||||||||||||||||||
ODART 2018-1 | 947 | 964 | 327 | 354 | 3.79 | % | 2 years | |||||||||||||||||||||||||||||||||||||||||||
ODART 2019-1 | 737 | 750 | 700 | 750 | 3.79 | % | 5 years | |||||||||||||||||||||||||||||||||||||||||||
Total securitizations | $ | 8,971 | $ | 9,564 | $ | 6,955 | $ | 7,812 |
(dollars in millions) | Advance Maximum Balance |
Amount
Drawn |
||||||||||||||||||||||||
OneMain Financial Auto Funding I, LLC | $ | 850 | $ | — | ||||||||||||||||||||||
OneMain Financial Funding VII, LLC | 850 | — | ||||||||||||||||||||||||
OneMain Financial Funding IX, LLC | 850 | — | ||||||||||||||||||||||||
Seine River Funding, LLC | 650 | — | ||||||||||||||||||||||||
Mystic River Funding, LLC | 600 | — | ||||||||||||||||||||||||
Chicago River Funding, LLC | 500 | — | ||||||||||||||||||||||||
Columbia River Funding, LLC | 500 | — | ||||||||||||||||||||||||
Hudson River Funding, LLC | 500 | — | ||||||||||||||||||||||||
OneMain Financial Funding VIII, LLC | 500 | — | ||||||||||||||||||||||||
Thayer Brook Funding, LLC | 500 | — | ||||||||||||||||||||||||
Hubbard River Funding, LLC | 250 | — | ||||||||||||||||||||||||
New River Funding Trust | 250 | — | ||||||||||||||||||||||||
River Thames Funding, LLC | 250 | — | ||||||||||||||||||||||||
St. Lawrence River Funding, LLC | 250 | — | ||||||||||||||||||||||||
Total | $ | 7,300 | $ | — |
Off-Balance Sheet Arrangements |
Critical Accounting Policies and Estimates |
Recent Accounting Pronouncements |
Seasonality |
Item 3. Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. Controls and Procedures. |
Item 1. Legal Proceedings. |
Item 1A. Risk Factors. |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
Period |
Total Number of
Shares Purchased (a) |
Average Price
paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) |
Dollar Value of Shares
That May Yet Be Purchased Under the Plans or Programs (b) |
||||||||||||||||||||||
July 1 - July 31 | 132,376 | $ | 59.73 | 132,376 | $ | 112,239,658 | ||||||||||||||||||||
August 1 - August 31 | 2,009,513 | 58.26 | 309,513 | 94,383,679 | ||||||||||||||||||||||
September 1 - September 30 | 293,600 | 56.51 | 293,600 | 77,791,092 | ||||||||||||||||||||||
Total | 2,435,489 | $ | 58.13 | 735,489 | ||||||||||||||||||||||
Item 3. Defaults Upon Senior Securities. |
Item 4. Mine Safety Disclosures. |
Item 5. Other Information. |
Item 6. Exhibit Index. |
Exhibit Number | Description | |||||||
Thirteenth Supplemental Indenture relating to the Notes, dated as of August 11, 2021, among OneMain Finance Corporation, OneMain Holdings, Inc. and Wilmington Trust, National Association, as trustee (including the form of 3.875% Senior Notes due 2028 included therein as Exhibit A). Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K on August 11, 2021.
|
||||||||
101 |
Interactive data files pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL:
(i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Shareholder’s Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements. |
|||||||
104 | Cover Page Interactive Data File in Inline XBRL format (Included in Exhibit 101). |
OMH Signature |
ONEMAIN HOLDINGS, INC. | ||||||||||||||
(Registrant) | ||||||||||||||
Date: |
October 21, 2021
|
By: | /s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | ||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||
(Duly Authorized Officer and Principal Financial Officer)
|
OMFC Signature |
ONEMAIN FINANCE CORPORATION | ||||||||||||||
(Registrant) | ||||||||||||||
Date: |
October 21, 2021
|
By: | /s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | ||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||
(Duly Authorized Officer and Principal Financial Officer)
|
Exhibit 10.1 |
Exhibit 10.2 |
Exhibit 10.3 |
Exhibit 10.4 |
Exhibit 31.1 |
Date: |
October 21, 2021
|
||||||||||
/s/ Douglas H. Shulman | |||||||||||
Douglas H. Shulman | |||||||||||
President and Chief Executive Officer |
Exhibit 31.2 |
Date: |
October 21, 2021
|
||||||||||
/s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
(Duly Authorized Officer and Principal Financial Officer) |
Exhibit 31.3 |
Date: |
October 21, 2021
|
||||||||||
/s/ Richard N. Tambor | |||||||||||
Richard N. Tambor | |||||||||||
President and Chief Executive Officer |
Exhibit 31.4 |
Date: |
October 21, 2021
|
||||||||||
/s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
(Duly Authorized Officer and Principal Financial Officer) |
Exhibit 32.1 |
/s/ Douglas H. Shulman | |||||||||||
Douglas H. Shulman | |||||||||||
President and Chief Executive Officer | |||||||||||
/s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
Date: |
October 21, 2021
|
Exhibit 32.2 |
/s/ Richard N. Tambor | |||||||||||
Richard N. Tambor | |||||||||||
President and Chief Executive Officer | |||||||||||
/s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
Date: |
October 21, 2021
|