Delaware | 27-3379612 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) | |
601 N.W. Second Street, Evansville, IN | 47708 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | Emerging growth company o | |||
(Do not check if a smaller reporting company) |
Term or Abbreviation | Definition | |
2017 Annual Report on Form 10-K | Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on February 21, 2018 | |
2022 SFC Notes | $500 million of 6.125% Senior Notes due 2022 issued by SFC on May 15, 2017 and guaranteed by OMH | |
30-89 Delinquency ratio | net finance receivables 30-89 days past due as a percentage of net finance receivables | |
5.25% SFC Notes | $700 million of 5.25% Senior Notes due 2019 issued by SFC on December 3, 2014 and guaranteed by OMH | |
5.625% SFC Notes | $875 million of 5.625% Senior Notes due 2023 issued by SFC on December 8, 2017 and guaranteed by OMH | |
6.125% SFC Notes | collectively, the 2022 SFC Notes and the Additional SFC Notes | |
6.875% SFC Notes | $1.25 billion aggregate principal amount of 6.875% Senior Notes due 2025 issued by SFC on March 12, 2018 and guaranteed by OMH | |
7.125% SFC Notes | $900 million of 7.125% Senior Notes due 2026 issued by SFC on May 11, 2018 and guaranteed by OMH | |
8.25% SFC Notes | $1.0 billion of 8.25% Senior Notes due 2020 issued by SFC on April 11, 2016 and guaranteed by OMH | |
ABS | asset-backed securities | |
Accretable yield | the excess of the cash flows expected to be collected on the purchased credit impaired finance receivables over the discounted cash flows | |
Additional SFC Notes | $500 million of 6.125% Senior Notes due 2022 issued by SFC on May 30, 2017 and guaranteed by OMH | |
Adjusted pretax income (loss) | a non-GAAP financial measure used by management as a key performance measure of our segments | |
AHL | American Health and Life Insurance Company, an insurance subsidiary of OMFH | |
AIG | AIG Capital Corporation, a subsidiary of American International Group, Inc. | |
AOCI | Accumulated other comprehensive income (loss) | |
Apollo | Apollo Global Management, LLC and its consolidated subsidiaries | |
Apollo-Värde Group | an investor group led by funds managed by Apollo and Värde | |
Apollo-Värde Transaction | the purchase by the Apollo-Värde Group of 54,937,500 shares of OMH common stock from SFH pursuant to the Share Purchase Agreement for an aggregate purchase price of approximately $1.4 billion in cash on June 25, 2018 | |
ASC | Accounting Standards Codification | |
ASU | Accounting Standards Update | |
Average debt | average of debt for each day in the period | |
Average net receivables | average of monthly average net finance receivables (net finance receivables at the beginning and end of each month divided by two) in the period | |
Blackstone | collectively, BTO Willow Holdings II, L.P. and Blackstone Family Tactical Opportunities Investment Partnership—NQ—ESC L.P. | |
CDO | collateralized debt obligations | |
CFPB | Consumer Financial Protection Bureau | |
CMBS | commercial mortgage-backed securities | |
Dodd-Frank Act | the Dodd-Frank Wall Street Reform and Consumer Protection Act | |
Exchange Act | Securities Exchange Act of 1934, as amended | |
FA Loans | purchased credit impaired finance receivables related to the Fortress Acquisition | |
FASB | Financial Accounting Standards Board | |
FHLB | Federal Home Loan Bank | |
FICO score | a credit score created by Fair Isaac Corporation | |
Fixed charge ratio | 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 | |
Fortress | Fortress Investment Group LLC | |
Fortress Acquisition | transaction by which FCFI Acquisition LLC, an affiliate of Fortress, acquired an 80% economic interest of the sole stockholder of SFC for a cash purchase price of $119 million, effective November 30, 2010 |
Term or Abbreviation | Definition | |
GAAP | generally accepted accounting principles in the United States of America | |
Gross charge-off ratio | annualized gross charge-offs as a percentage of average net receivables | |
Independence | Independence Holdings, LLC | |
Indiana DOI | Indiana Department of Insurance | |
IRS | Internal Revenue Service | |
Junior Subordinated Debenture | $350 million aggregate principal amount of 60-year junior subordinated debt issued by SFC under an indenture dated January 22, 2007, by and between SFC and Deutsche Bank Trust Company, as trustee, and guaranteed by OMH | |
LIBOR | London Interbank Offered Rate | |
Merit | Merit Life Insurance Co., an insurance subsidiary of SFC | |
Nationstar | Nationstar Mortgage LLC, dba “Mr. Cooper” | |
Net charge-off ratio | annualized net charge-offs as a percentage of average net receivables | |
Net interest income | interest income less interest expense | |
NRZ | New Residential Investment Corp. | |
ODART | OneMain Direct Auto Receivables Trust | |
OM Loans | purchased credit impaired personal loans acquired in the OneMain Acquisition | |
OMFH | OneMain Financial Holdings, LLC | |
OMFH Indenture | 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 | |
OMFH Notes | 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 | |
OMFH Supplemental Indenture | Second Supplemental Indenture dated as of November 8, 2016, to the OMFH Indenture | |
OMFIT | OneMain Financial Issuance Trust | |
OMH | OneMain Holdings, Inc. | |
OneMain | OMFH, collectively with its subsidiaries | |
OneMain Acquisition | Acquisition of OneMain from CitiFinancial Credit Company, effective November 1, 2015 | |
Other Securities | securities for which the fair value option was elected and equity securities. Other Securities recognize unrealized gains and losses in investment revenues | |
Other SFC Notes | collectively, SFC’s 8.25% Senior Notes due 2023, 7.75% Senior Notes due 2021, and 6.00% Senior Notes due 2020, on a senior unsecured basis, and the Junior Subordinated Debenture, on a junior subordinated basis, issued by SFC and guaranteed by OMH | |
Recovery ratio | annualized recoveries on net charge-offs as a percentage of average net receivables | |
Retail sales finance | collectively, retail sales contracts and revolving retail accounts | |
RMBS | residential mortgage-backed securities | |
RSAs | restricted stock awards | |
RSUs | restricted stock units | |
SEC | U.S. Securities and Exchange Commission | |
Securities Act | Securities Act of 1933, as amended | |
Segment Accounting Basis | a basis used to report the operating results of our segments, which reflects our allocation methodologies for certain costs and excludes the impact of applying purchase accounting | |
Settlement Agreement | a Settlement Agreement with the U.S. Department of Justice entered into by OMH and certain of its subsidiaries on November 13, 2015, in connection with the OneMain Acquisition | |
SFC | Springleaf Finance Corporation | |
SFC Base Indenture | Indenture dated as of December 3, 2014 | |
SFC First Supplemental Indenture | First Supplemental Indenture dated as of December 3, 2014, to the SFC Base Indenture | |
SFC Fourth Supplemental Indenture | Fourth Supplemental Indenture dated as of December 8, 2017, to the SFC Base Indenture | |
SFC Fifth Supplemental Indenture | Fifth Supplemental Indenture dated as of March 12, 2018, to the SFC Base Indenture | |
SFC Guaranty Agreements | agreements entered into on December 30, 2013 by OMH whereby it agreed to fully and unconditionally guarantee the payments of principal, premium (if any) and interest on the Other SFC Notes |
Term or Abbreviation | Definition | |
SFC Notes | collectively, the issued and outstanding senior unsecured notes issued pursuant to the SFC Senior Notes Indentures | |
SFC Second Supplemental Indenture | Second Supplemental Indenture dated as of April 11, 2016, to the SFC Base Indenture | |
SFC Senior Notes Indentures | the SFC Base Indenture as supplemented by the SFC First Supplemental Indenture, the SFC Second Supplemental Indenture, the SFC Third Supplemental Indenture, the SFC Fourth Supplemental Indenture, the SFC Fifth Supplemental Indenture and the SFC Sixth Supplemental Indenture | |
SFC Sixth Supplemental Indenture | Sixth Supplemental Indenture dated as of May 11, 2018, to the SFC Base Indenture | |
SFC Third Supplemental Indenture | Third Supplemental Indenture dated as of May 15, 2017, to the SFC Base Indenture | |
SFC Trust Guaranty Agreement | 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 | |
SFH | Springleaf Financial Holdings LLC, an entity owned primarily by a private equity fund managed by an affiliate of Fortress that sold 54,937,500 shares of OMH’s common stock to the Apollo-Värde Group in the Apollo-Värde Transaction | |
SFI | Springleaf Finance, Inc. | |
Share Purchase Agreement | Share Purchase Agreement entered into on January 3, 2018, among the Apollo-Värde Group, SFH and the Company to acquire from SFH 54,937,500 shares of our common stock that was issued and outstanding as of such date, representing the entire holdings of our stock beneficially owned by Fortress | |
SLFT | Springleaf Funding Trust | |
SpringCastle Interests Sale | the March 31, 2016 sale by SpringCastle Holdings, LLC and Springleaf Acquisition Corporation of the equity interest in the SpringCastle Joint Venture | |
SpringCastle Joint Venture | joint venture among SpringCastle America, LLC, SpringCastle Credit, LLC, SpringCastle Finance, LLC, and SpringCastle Acquisition LLC in which SpringCastle Holdings, LLC previously owned a 47% equity interest in each of SpringCastle America, LLC, SpringCastle Credit, LLC and SpringCastle Finance, LLC and Springleaf Acquisition Corporation previously owned a 47% equity interest in SpringCastle Acquisition LLC | |
SpringCastle Portfolio | loans acquired through the SpringCastle Joint Venture | |
Springleaf | OMH and its subsidiaries (other than OneMain) | |
Tangible equity | total equity less accumulated other comprehensive income or loss | |
Tangible managed assets | total assets less goodwill and other intangible assets | |
Tax Act | Public Law 115-97 amending the Internal Revenue Code of 1986 | |
TDR finance receivables | troubled debt restructured finance receivables | |
Texas DOI | Texas Department of Insurance | |
Triton | Triton Insurance Company, an insurance subsidiary of OMFH | |
Trust preferred securities | capital securities classified as debt for accounting purposes but due to their terms are afforded, at least in part, equity capital treatment in the calculation of effective leverage by rating agencies | |
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 | |
UPB | unpaid principal balance for interest bearing accounts and the gross remaining contractual payments less the unaccreted balance of unearned finance charges for precompute accounts | |
Värde | Värde Partners, Inc. | |
VIEs | variable interest entities | |
Weighted average interest rate | annualized interest expense as a percentage of average debt | |
Yield | annualized finance charges as a percentage of average net receivables | |
Yosemite | Yosemite Insurance Company, an insurance subsidiary of SFC |
(dollars in millions, except par value amount) | June 30, 2018 | December 31, 2017 | ||||||
Assets | ||||||||
Cash and cash equivalents | $ | 556 | $ | 987 | ||||
Investment securities | 1,720 | 1,697 | ||||||
Net finance receivables: | ||||||||
Personal loans (includes loans of consolidated VIEs of $9.1 billion in 2018 and $9.8 billion in 2017) | 15,384 | 14,823 | ||||||
Other receivables | 124 | 134 | ||||||
Net finance receivables | 15,508 | 14,957 | ||||||
Unearned insurance premium and claim reserves | (611 | ) | (590 | ) | ||||
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $459 million in 2018 and $465 million in 2017) | (702 | ) | (697 | ) | ||||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses | 14,195 | 13,670 | ||||||
Finance receivables held for sale | 123 | 132 | ||||||
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $569 million in 2018 and $482 million in 2017) | 587 | 498 | ||||||
Goodwill | 1,422 | 1,422 | ||||||
Other intangible assets | 409 | 440 | ||||||
Other assets | 628 | 587 | ||||||
Total assets | $ | 19,640 | $ | 19,433 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Long-term debt (includes debt of consolidated VIEs of $8.1 billion in 2018 and $8.7 billion in 2017) | $ | 15,054 | $ | 15,050 | ||||
Insurance claims and policyholder liabilities | 690 | 737 | ||||||
Deferred and accrued taxes | 3 | 45 | ||||||
Other liabilities (includes other liabilities of consolidated VIEs of $14 million in 2018 and 2017) | 404 | 323 | ||||||
Total liabilities | 16,151 | 16,155 | ||||||
Commitments and contingent liabilities (Note 14) | ||||||||
Shareholders’ equity: | ||||||||
Common stock, par value $.01 per share; 2,000,000,000 shares authorized, 135,780,755 and 135,349,638 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 1 | 1 | ||||||
Additional paid-in capital | 1,674 | 1,560 | ||||||
Accumulated other comprehensive income (loss) | (21 | ) | 11 | |||||
Retained earnings | 1,835 | 1,706 | ||||||
Total shareholders’ equity | 3,489 | 3,278 | ||||||
Total liabilities and shareholders’ equity | $ | 19,640 | $ | 19,433 |
(dollars in millions, except per share amounts) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Interest income: | ||||||||||||||||
Finance charges | $ | 902 | $ | 768 | $ | 1,761 | $ | 1,524 | ||||||||
Finance receivables held for sale originated as held for investment | 3 | 4 | 6 | 7 | ||||||||||||
Total interest income | 905 | 772 | 1,767 | 1,531 | ||||||||||||
Interest expense | 220 | 203 | 420 | 405 | ||||||||||||
Net interest income | 685 | 569 | 1,347 | 1,126 | ||||||||||||
Provision for finance receivable losses | 260 | 236 | 514 | 481 | ||||||||||||
Net interest income after provision for finance receivable losses | 425 | 333 | 833 | 645 | ||||||||||||
Other revenues: | ||||||||||||||||
Insurance | 107 | 104 | 212 | 207 | ||||||||||||
Investment | 19 | 20 | 32 | 39 | ||||||||||||
Net loss on repurchases and repayments of debt | (7 | ) | (27 | ) | (8 | ) | (28 | ) | ||||||||
Other | 21 | 24 | 41 | 44 | ||||||||||||
Total other revenues | 140 | 121 | 277 | 262 | ||||||||||||
Other expenses: | ||||||||||||||||
Operating expenses: | ||||||||||||||||
Salaries and benefits | 306 | 191 | 500 | 377 | ||||||||||||
Acquisition-related transaction and integration expenses | 28 | 14 | 39 | 37 | ||||||||||||
Other operating expenses | 137 | 137 | 264 | 279 | ||||||||||||
Insurance policy benefits and claims | 51 | 46 | 96 | 91 | ||||||||||||
Total other expenses | 522 | 388 | 899 | 784 | ||||||||||||
Income before income taxes | 43 | 66 | 211 | 123 | ||||||||||||
Income taxes | 36 | 24 | 80 | 48 | ||||||||||||
Net income | $ | 7 | $ | 42 | $ | 131 | $ | 75 | ||||||||
Share Data: | ||||||||||||||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic | 135,678,914 | 135,249,610 | 135,637,825 | 135,234,143 | ||||||||||||
Diluted | 135,969,045 | 135,513,427 | 135,933,399 | 135,543,342 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.05 | $ | 0.31 | $ | 0.96 | $ | 0.55 | ||||||||
Diluted | $ | 0.05 | $ | 0.30 | $ | 0.96 | $ | 0.55 |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 7 | $ | 42 | $ | 131 | $ | 75 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities | (13 | ) | 10 | (37 | ) | 20 | ||||||||||
Foreign currency translation adjustments | (2 | ) | 4 | (5 | ) | 4 | ||||||||||
Income tax effect: | ||||||||||||||||
Net unrealized gains (losses) on non-credit impaired available-for-sale securities | 3 | (4 | ) | 7 | (7 | ) | ||||||||||
Retirement plan liability adjustments | 2 | — | 2 | — | ||||||||||||
Foreign currency translation adjustments | (1 | ) | (2 | ) | (1 | ) | (2 | ) | ||||||||
Other comprehensive income (loss), net of tax, before reclassification adjustments | (11 | ) | 8 | (34 | ) | 15 | ||||||||||
Reclassification adjustments included in net income: | ||||||||||||||||
Net realized gains on available-for-sale securities | — | (4 | ) | — | (8 | ) | ||||||||||
Income tax effect: | ||||||||||||||||
Net realized gains on available-for-sale securities | — | 1 | — | 2 | ||||||||||||
Reclassification adjustments included in net income, net of tax | — | (3 | ) | — | (6 | ) | ||||||||||
Other comprehensive income (loss), net of tax | (11 | ) | 5 | (34 | ) | 9 | ||||||||||
Comprehensive income (loss) | $ | (4 | ) | $ | 47 | $ | 97 | $ | 84 |
(dollars in millions) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholders’ Equity | |||||||||||||||
Balance, January 1, 2018 | $ | 1 | $ | 1,560 | $ | 11 | $ | 1,706 | $ | 3,278 | ||||||||||
Non-cash incentive compensation from SFH | — | 110 | — | — | 110 | |||||||||||||||
Share-based compensation expense, net of forfeitures | — | 13 | — | — | 13 | |||||||||||||||
Withholding tax on share-based compensation | — | (9 | ) | — | — | (9 | ) | |||||||||||||
Other comprehensive income (loss) | — | — | (34 | ) | — | (34 | ) | |||||||||||||
Impact of AOCI reclassification due to the Tax Act | — | — | 2 | (2 | ) | — | ||||||||||||||
Net income | — | — | — | 131 | 131 | |||||||||||||||
Balance, June 30, 2018 | $ | 1 | $ | 1,674 | $ | (21 | ) | $ | 1,835 | $ | 3,489 | |||||||||
Balance, January 1, 2017 | $ | 1 | $ | 1,548 | $ | (6 | ) | $ | 1,523 | $ | 3,066 | |||||||||
Share-based compensation expense, net of forfeitures | — | 9 | — | — | 9 | |||||||||||||||
Withholding tax on share-based compensation | — | (5 | ) | — | — | (5 | ) | |||||||||||||
Other comprehensive income | — | — | 9 | — | 9 | |||||||||||||||
Net income | — | — | — | 75 | 75 | |||||||||||||||
Balance, June 30, 2017 | $ | 1 | $ | 1,552 | $ | 3 | $ | 1,598 | $ | 3,154 |
(dollars in millions) | Six Months Ended June 30, | |||||||
2018 | 2017 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 131 | $ | 75 | ||||
Reconciling adjustments: | ||||||||
Provision for finance receivable losses | 514 | 481 | ||||||
Depreciation and amortization | 131 | 182 | ||||||
Deferred income tax charge (benefit) | 7 | (11 | ) | |||||
Net loss on repurchases and repayments of debt | 8 | 28 | ||||||
Non-cash incentive compensation from SFH | 110 | — | ||||||
Share-based compensation expense, net of forfeitures | 13 | 9 | ||||||
Other | 8 | — | ||||||
Cash flows due to changes in other assets and other liabilities | 22 | (24 | ) | |||||
Net cash provided by operating activities | 944 | 740 | ||||||
Cash flows from investing activities | ||||||||
Net principal originations of finance receivables held for investment and held for sale | (1,116 | ) | (884 | ) | ||||
Available-for-sale securities purchased | (394 | ) | (351 | ) | ||||
Available-for-sale securities called, sold, and matured | 280 | 382 | ||||||
Trading and other securities called, sold, and matured | 20 | 6 | ||||||
Other, net | (30 | ) | (7 | ) | ||||
Net cash used for investing activities | (1,240 | ) | (854 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of long-term debt, net of commissions | 3,739 | 2,633 | ||||||
Repayment of long-term debt | (3,776 | ) | (2,254 | ) | ||||
Withholding tax on share-based compensation | (9 | ) | (5 | ) | ||||
Net cash provided by (used for) financing activities | (46 | ) | 374 | |||||
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents | (342 | ) | 260 | |||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period | 1,485 | 1,147 | ||||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period | $ | 1,143 | $ | 1,407 | ||||
Supplemental cash flow information | ||||||||
Cash and cash equivalents | $ | 556 | $ | 862 | ||||
Restricted cash and restricted cash equivalents | 587 | 545 | ||||||
Total cash and cash equivalents and restricted cash and restricted cash equivalents | $ | 1,143 | $ | 1,407 | ||||
Supplemental non-cash activities | ||||||||
Transfer of finance receivables to real estate owned | $ | 3 | $ | 5 | ||||
Net unsettled investment security purchases | (1 | ) | (3 | ) |
• | 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. |
• | Other receivables — consist of our loan portfolios in a liquidating status. We ceased originating real estate loans in 2012 and purchasing retail sales contracts and revolving retail accounts in 2013. We continue to service or sub-service the liquidating real estate loans and retail sales contracts and will provide revolving retail sales financing services on our revolving retail accounts. |
(dollars in millions) | Personal Loans | Other Receivables | Total | |||||||||
June 30, 2018 | ||||||||||||
Gross receivables (a)(b) | $ | 15,216 | $ | 123 | $ | 15,339 | ||||||
Unearned points and fees | (176 | ) | — | (176 | ) | |||||||
Accrued finance charges | 219 | 1 | 220 | |||||||||
Deferred origination costs | 125 | — | 125 | |||||||||
Total | $ | 15,384 | $ | 124 | $ | 15,508 | ||||||
December 31, 2017 | ||||||||||||
Gross receivables (a)(b) | $ | 14,664 | $ | 133 | $ | 14,797 | ||||||
Unearned points and fees | (168 | ) | — | (168 | ) | |||||||
Accrued finance charges | 210 | 1 | 211 | |||||||||
Deferred origination costs | 117 | — | 117 | |||||||||
Total | $ | 14,823 | $ | 134 | $ | 14,957 |
(a) | Gross receivables are defined as follows: |
• | Finance receivables purchased as a performing receivable — gross finance receivables equal the UPB and the remaining unearned discount, net of premium established at the time of purchase 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; |
• | 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 and, if applicable, the remaining unearned premium, net of discount established at the time of purchase if previously purchased as a performing receivable. |
(b) | As of January 1, 2018, we have reclassified unearned finance charges to gross receivables. To conform to this presentation, we have reclassified the prior period. |
(dollars in millions) | Personal Loans | Other Receivables | Total | |||||||||
June 30, 2018 | ||||||||||||
Performing | ||||||||||||
Current | $ | 14,766 | $ | 95 | $ | 14,861 | ||||||
30-59 days past due | 193 | 9 | 202 | |||||||||
60-89 days past due | 133 | 3 | 136 | |||||||||
Total performing | 15,092 | 107 | 15,199 | |||||||||
Nonperforming | ||||||||||||
90-179 days past due | 284 | 4 | 288 | |||||||||
180 days or more past due | 8 | 13 | 21 | |||||||||
Total nonperforming | 292 | 17 | 309 | |||||||||
Total | $ | 15,384 | $ | 124 | $ | 15,508 | ||||||
December 31, 2017 | ||||||||||||
Performing | ||||||||||||
Current | $ | 14,124 | $ | 104 | $ | 14,228 | ||||||
30-59 days past due | 204 | 8 | 212 | |||||||||
60-89 days past due | 157 | 3 | 160 | |||||||||
Total performing | 14,485 | 115 | 14,600 | |||||||||
Nonperforming | ||||||||||||
90-179 days past due | 332 | 4 | 336 | |||||||||
180 days or more past due | 6 | 15 | 21 | |||||||||
Total nonperforming | 338 | 19 | 357 | |||||||||
Total | $ | 14,823 | $ | 134 | $ | 14,957 |
(dollars in millions) | June 30, 2018 | December 31, 2017 | ||||||
OM Loans | ||||||||
Carrying amount, net of allowance | $ | 127 | $ | 176 | ||||
Outstanding balance (a) | 180 | 243 | ||||||
Allowance for purchased credit impaired finance receivable losses | — | 6 | ||||||
FA Loans (b) | ||||||||
Carrying amount, net of allowance | $ | 53 | $ | 57 | ||||
Outstanding balance (a) | 90 | 94 | ||||||
Allowance for purchased credit impaired finance receivable losses | 9 | 9 |
(a) | Outstanding balance is defined as UPB of the loans with a net carrying amount. |
(b) | Purchased credit impaired FA Loans held for sale included in the table above were as follows: |
(dollars in millions) | June 30, 2018 | December 31, 2017 | ||||||
Carrying amount | $ | 41 | $ | 44 | ||||
Outstanding balance | 68 | 72 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(dollars in millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
OM Loans | ||||||||||||||||
Balance at beginning of period | $ | 49 | $ | 48 | $ | 47 | $ | 59 | ||||||||
Accretion | (8 | ) | (9 | ) | (14 | ) | (20 | ) | ||||||||
Reclassifications from (to) nonaccretable difference * | 11 | 10 | 19 | 10 | ||||||||||||
Balance at end of period | $ | 52 | $ | 49 | $ | 52 | $ | 49 | ||||||||
FA Loans | ||||||||||||||||
Balance at beginning of period | $ | 52 | $ | 59 | $ | 53 | $ | 60 | ||||||||
Accretion | (1 | ) | (2 | ) | (2 | ) | (3 | ) | ||||||||
Reclassifications from (to) nonaccretable difference * | — | (2 | ) | — | (2 | ) | ||||||||||
Balance at end of period | $ | 51 | $ | 55 | $ | 51 | $ | 55 |
* | Reclassifications from (to) nonaccretable difference represents the increases (decreases) in accretable yield resulting from higher (lower) |
(dollars in millions) | Personal Loans | Other Receivables (a) | Total | |||||||||
June 30, 2018 | ||||||||||||
TDR gross finance receivables (b) | $ | 377 | $ | 136 | $ | 513 | ||||||
TDR net finance receivables | 380 | 136 | 516 | |||||||||
Allowance for TDR finance receivable losses | 158 | 12 | 170 | |||||||||
December 31, 2017 | ||||||||||||
TDR gross finance receivables (b) | $ | 318 | $ | 139 | $ | 457 | ||||||
TDR net finance receivables | 318 | 140 | 458 | |||||||||
Allowance for TDR finance receivable losses | 135 | 12 | 147 |
(a) | Other Receivables held for sale included in the table above were as follows: |
(dollars in millions) | June 30, 2018 | December 31, 2017 | ||||||
TDR gross finance receivables | $ | 87 | $ | 90 | ||||
TDR net finance receivables | 87 | 91 |
(b) | As defined earlier in this Note. |
(dollars in millions) | Personal Loans | Other Receivables * | Total | |||||||||
Three Months Ended June 30, 2018 | ||||||||||||
TDR average net receivables | $ | 367 | $ | 137 | $ | 504 | ||||||
TDR finance charges recognized | 11 | 2 | 13 | |||||||||
Three Months Ended June 30, 2017 | ||||||||||||
TDR average net receivables | $ | 197 | $ | 140 | $ | 337 | ||||||
TDR finance charges recognized | 9 | 2 | 11 | |||||||||
Six Months Ended June 30, 2018 | ||||||||||||
TDR average net receivables | $ | 352 | $ | 138 | $ | 490 | ||||||
TDR finance charges recognized | 22 | 4 | 26 | |||||||||
Six Months Ended June 30, 2017 | ||||||||||||
TDR average net receivables | $ | 175 | $ | 138 | $ | 313 | ||||||
TDR finance charges recognized | 15 | 4 | 19 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(dollars in millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
TDR average net receivables | $ | 88 | $ | 91 | $ | 89 | $ | 90 | ||||||||
TDR finance charges recognized | 2 | 2 | 3 | 3 |
(dollars in millions) | Personal Loans | Other Receivables (a) | Total | |||||||||
Three Months Ended June 30, 2018 | ||||||||||||
Pre-modification TDR net finance receivables | $ | 84 | $ | — | $ | 84 | ||||||
Post-modification TDR net finance receivables: | ||||||||||||
Rate reduction | $ | 63 | $ | — | $ | 63 | ||||||
Other (b) | 21 | — | 21 | |||||||||
Total post-modification TDR net finance receivables | $ | 84 | $ | — | $ | 84 | ||||||
Number of TDR accounts | 12,778 | 15 | 12,793 | |||||||||
Three Months Ended June 30, 2017 | ||||||||||||
Pre-modification TDR net finance receivables | $ | 115 | $ | 10 | $ | 125 | ||||||
Post-modification TDR net finance receivables: | ||||||||||||
Rate reduction | $ | 79 | $ | 10 | $ | 89 | ||||||
Other (b) | 35 | — | 35 | |||||||||
Total post-modification TDR net finance receivables | $ | 114 | $ | 10 | $ | 124 | ||||||
Number of TDR accounts | 14,583 | 350 | 14,933 | |||||||||
Six Months Ended June 30, 2018 | ||||||||||||
Pre-modification TDR net finance receivables | $ | 179 | $ | 2 | $ | 181 | ||||||
Post-modification TDR net finance receivables: | ||||||||||||
Rate reduction | $ | 132 | $ | 2 | $ | 134 | ||||||
Other (b) | 47 | — | 47 | |||||||||
Total post-modification TDR net finance receivables | $ | 179 | $ | 2 | $ | 181 | ||||||
Number of TDR accounts | 27,508 | 44 | 27,552 | |||||||||
Six Months Ended June 30, 2017 | ||||||||||||
Pre-modification TDR net finance receivables | $ | 159 | $ | 13 | $ | 172 | ||||||
Post-modification TDR net finance receivables: | ||||||||||||
Rate reduction | $ | 118 | $ | 13 | $ | 131 | ||||||
Other (b) | 39 | — | 39 | |||||||||
Total post-modification TDR net finance receivables | $ | 157 | $ | 13 | $ | 170 | ||||||
Number of TDR accounts | 21,021 | 414 | 21,435 |
(a) | Other Receivables held for sale included in the table above were immaterial. |
(b) | “Other” modifications primarily include potential principal and interest forgiveness contingent on future payment performance by the borrower under the modified terms. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(dollars in millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
TDR net finance receivables * | $ | 18 | $ | 30 | $ | 35 | $ | 42 | ||||||||
Number of TDR accounts | 2,622 | 4,805 | 5,341 | 6,598 |
* | Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. |
(dollars in millions) | Personal Loans | Other Receivables | Total | |||||||||
Three Months Ended June 30, 2018 | ||||||||||||
Balance at beginning of period | $ | 665 | $ | 24 | $ | 689 | ||||||
Provision for finance receivable losses | 261 | (1 | ) | 260 | ||||||||
Charge-offs | (278 | ) | — | (278 | ) | |||||||
Recoveries | 30 | 1 | 31 | |||||||||
Balance at end of period | $ | 678 | $ | 24 | $ | 702 | ||||||
Three Months Ended June 30, 2017 | ||||||||||||
Balance at beginning of period | $ | 646 | $ | 20 | $ | 666 | ||||||
Provision for finance receivable losses | 235 | 1 | 236 | |||||||||
Charge-offs | (253 | ) | (2 | ) | (255 | ) | ||||||
Recoveries | 28 | 1 | 29 | |||||||||
Balance at end of period | $ | 656 | $ | 20 | $ | 676 | ||||||
Six Months Ended June 30, 2018 | ||||||||||||
Balance at beginning of period | $ | 673 | $ | 24 | $ | 697 | ||||||
Provision for finance receivable losses | 515 | (1 | ) | 514 | ||||||||
Charge-offs | (567 | ) | (1 | ) | (568 | ) | ||||||
Recoveries | 57 | 2 | 59 | |||||||||
Balance at end of period | $ | 678 | $ | 24 | $ | 702 | ||||||
Six Months Ended June 30, 2017 | ||||||||||||
Balance at beginning of period | $ | 669 | $ | 20 | $ | 689 | ||||||
Provision for finance receivable losses | 479 | 2 | 481 | |||||||||
Charge-offs | (549 | ) | (3 | ) | (552 | ) | ||||||
Recoveries | 57 | 1 | 58 | |||||||||
Balance at end of period | $ | 656 | $ | 20 | $ | 676 |
(dollars in millions) | Personal Loans | Other Receivables | Total | |||||||||
June 30, 2018 | ||||||||||||
Allowance for finance receivable losses: | ||||||||||||
Collectively evaluated for impairment | $ | 520 | $ | 3 | $ | 523 | ||||||
Purchased credit impaired finance receivables | — | 9 | 9 | |||||||||
TDR finance receivables | 158 | 12 | 170 | |||||||||
Total | $ | 678 | $ | 24 | $ | 702 | ||||||
Finance receivables: | ||||||||||||
Collectively evaluated for impairment | $ | 14,877 | $ | 54 | $ | 14,931 | ||||||
Purchased credit impaired finance receivables | 127 | 21 | 148 | |||||||||
TDR finance receivables | 380 | 49 | 429 | |||||||||
Total | $ | 15,384 | $ | 124 | $ | 15,508 | ||||||
Allowance for finance receivable losses as a percentage of finance receivables | 4.41 | % | 19.25 | % | 4.53 | % | ||||||
December 31, 2017 | ||||||||||||
Allowance for finance receivable losses: | ||||||||||||
Collectively evaluated for impairment | $ | 532 | $ | 3 | $ | 535 | ||||||
Purchased credit impaired finance receivables | 6 | 9 | 15 | |||||||||
TDR finance receivables | 135 | 12 | 147 | |||||||||
Total | $ | 673 | $ | 24 | $ | 697 | ||||||
Finance receivables: | ||||||||||||
Collectively evaluated for impairment | $ | 14,323 | $ | 63 | $ | 14,386 | ||||||
Purchased credit impaired finance receivables | 182 | 22 | 204 | |||||||||
TDR finance receivables | 318 | 49 | 367 | |||||||||
Total | $ | 14,823 | $ | 134 | $ | 14,957 | ||||||
Allowance for finance receivable losses as a percentage of finance receivables | 4.53 | % | 18.27 | % | 4.66 | % |
(dollars in millions) | Cost/ Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
June 30, 2018 | ||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||
U.S. government and government sponsored entities | $ | 23 | $ | — | $ | — | $ | 23 | ||||||||
Obligations of states, municipalities, and political subdivisions | 135 | — | (1 | ) | 134 | |||||||||||
Certificates of deposit and commercial paper | 26 | — | — | 26 | ||||||||||||
Non-U.S. government and government sponsored entities | 134 | — | (2 | ) | 132 | |||||||||||
Corporate debt | 1,034 | 3 | (26 | ) | 1,011 | |||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||
RMBS | 118 | 1 | (3 | ) | 116 | |||||||||||
CMBS | 83 | — | (1 | ) | 82 | |||||||||||
CDO/ABS | 95 | — | (1 | ) | 94 | |||||||||||
Total | $ | 1,648 | $ | 4 | $ | (34 | ) | $ | 1,618 | |||||||
December 31, 2017 | ||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||
U.S. government and government sponsored entities | $ | 28 | $ | — | $ | — | $ | 28 | ||||||||
Obligations of states, municipalities, and political subdivisions | 135 | — | — | 135 | ||||||||||||
Certificates of deposit and commercial paper | 60 | — | — | 60 | ||||||||||||
Non-U.S. government and government sponsored entities | 126 | — | (1 | ) | 125 | |||||||||||
Corporate debt | 941 | 12 | (5 | ) | 948 | |||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||
RMBS | 100 | — | (1 | ) | 99 | |||||||||||
CMBS | 88 | — | (1 | ) | 87 | |||||||||||
CDO/ABS | 96 | — | — | 96 | ||||||||||||
Total | $ | 1,574 | $ | 12 | $ | (8 | ) | $ | 1,578 |
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
(dollars in millions) | Fair Value | Unrealized Losses * | Fair Value | Unrealized Losses * | Fair Value | Unrealized Losses | ||||||||||||||||||
June 30, 2018 | ||||||||||||||||||||||||
U.S. government and government sponsored entities | $ | 12 | $ | — | $ | 8 | $ | — | $ | 20 | $ | — | ||||||||||||
Obligations of states, municipalities, and political subdivisions | 84 | (1 | ) | 17 | — | 101 | (1 | ) | ||||||||||||||||
Non-U.S. government and government sponsored entities | 63 | (1 | ) | 57 | (1 | ) | 120 | (2 | ) | |||||||||||||||
Corporate debt | 741 | (22 | ) | 99 | (4 | ) | 840 | (26 | ) | |||||||||||||||
RMBS | 80 | (2 | ) | 32 | (1 | ) | 112 | (3 | ) | |||||||||||||||
CMBS | 42 | — | 33 | (1 | ) | 75 | (1 | ) | ||||||||||||||||
CDO/ABS | 57 | (1 | ) | 18 | — | 75 | (1 | ) | ||||||||||||||||
Total | $ | 1,079 | $ | (27 | ) | $ | 264 | $ | (7 | ) | $ | 1,343 | $ | (34 | ) | |||||||||
December 31, 2017 | ||||||||||||||||||||||||
U.S. government and government sponsored entities | $ | 21 | $ | — | $ | 3 | $ | — | $ | 24 | $ | — | ||||||||||||
Obligations of states, municipalities, and political subdivisions | 65 | — | 20 | — | 85 | — | ||||||||||||||||||
Non-U.S. government and government sponsored entities | 89 | (1 | ) | 13 | — | 102 | (1 | ) | ||||||||||||||||
Corporate debt | 387 | (3 | ) | 93 | (2 | ) | 480 | (5 | ) | |||||||||||||||
RMBS | 40 | — | 25 | (1 | ) | 65 | (1 | ) | ||||||||||||||||
CMBS | 40 | — | 38 | (1 | ) | 78 | (1 | ) | ||||||||||||||||
CDO/ABS | 48 | — | 26 | — | 74 | — | ||||||||||||||||||
Total | $ | 690 | $ | (4 | ) | $ | 218 | $ | (4 | ) | $ | 908 | $ | (8 | ) |
* | 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 June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Proceeds from sales and redemptions | $ | 69 | $ | 167 | $ | 140 | $ | 280 | ||||||||
Realized gains | $ | — | $ | 5 | $ | — | $ | 9 | ||||||||
Realized losses | — | (1 | ) | — | (1 | ) | ||||||||||
Net realized gains (losses) | $ | — | $ | 4 | $ | — | $ | 8 |
(dollars in millions) | Fair Value | Amortized Cost | ||||||
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: | ||||||||
Due in 1 year or less | $ | 148 | $ | 148 | ||||
Due after 1 year through 5 years | 596 | 604 | ||||||
Due after 5 years through 10 years | 385 | 396 | ||||||
Due after 10 years | 197 | 204 | ||||||
Mortgage-backed, asset-backed, and collateralized securities | 292 | 296 | ||||||
Total | $ | 1,618 | $ | 1,648 |
(dollars in millions) | June 30, 2018 | December 31, 2017 | ||||||
Fixed maturity other securities: | ||||||||
Bonds | ||||||||
Non-U.S. government and government sponsored entities | $ | 1 | $ | 1 | ||||
Corporate debt | 51 | 68 | ||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||
RMBS | 1 | 1 | ||||||
CDO/ABS | 3 | 4 | ||||||
Total bonds | 56 | 74 | ||||||
Preferred stock * | 22 | 20 | ||||||
Common stock * | 23 | 23 | ||||||
Other long-term investments | 1 | 1 | ||||||
Total | $ | 102 | $ | 118 |
* | The Company employs an income equity strategy targeting investments in stocks with strong current dividend yields. Stocks included have a history of stable or increasing dividend payments. |
Senior Debt | ||||||||||||||||
(dollars in millions) | Securitizations | Medium Term Notes | Junior Subordinated Debt | Total | ||||||||||||
Interest rates (a) | 2.04% - 6.94% | 5.25% - 8.25% | 4.10 | % | ||||||||||||
Remainder of 2018 | — | — | — | — | ||||||||||||
2019 | — | 696 | — | 696 | ||||||||||||
2020 | — | 1,299 | — | 1,299 | ||||||||||||
2021 | — | 646 | — | 646 | ||||||||||||
2022 | — | 1,000 | — | 1,000 | ||||||||||||
2023 | — | 1,175 | — | 1,175 | ||||||||||||
2024-2067 | — | 2,149 | 350 | 2,499 | ||||||||||||
Securitizations (b) | 8,119 | — | — | 8,119 | ||||||||||||
Total principal maturities | $ | 8,119 | $ | 6,965 | $ | 350 | $ | 15,434 | ||||||||
Total carrying amount | $ | 8,094 | $ | 6,788 | $ | 172 | $ | 15,054 | ||||||||
Debt issuance costs (c) | $ | (24 | ) | $ | (55 | ) | $ | — | $ | (79 | ) |
(a) | The interest rates shown are the range of contractual rates in effect at June 30, 2018. The interest rate on the UPB of the Junior Subordinated Debenture consists of a variable floating rate (determined quarterly) equal to 3-month LIBOR plus 1.75%, or 4.10% as of June 30, 2018. |
(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 June 30, 2018, 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 $24 million at June 30, 2018 and are reported in other assets. |
Guarantee Agreement | Date Entered | SFC Supplemental Indentures | Interest rate | June 30, 2018 Outstanding balance (dollars in millions) | ||||||
7.125% SFC Notes | 5/11/2018 | SFC Sixth Supplemental Indenture | 7.125% | $ | 900 | |||||
6.875% SFC Notes | 3/12/2018 | SFC Fifth Supplemental Indenture | 6.875% | 1,250 | ||||||
5.625% SFC Notes | 12/8/2017 | SFC Fourth Supplemental Indenture | 5.625% | 875 | ||||||
6.125% SFC Notes | 5/15/2017 | SFC Third Supplemental Indenture | 6.125% | 1,000 | ||||||
8.25% SFC Notes | 4/11/2016 | SFC Second Supplemental Indenture | 8.25% | 1,000 | ||||||
5.25% SFC Notes | 12/3/2014 | SFC First Supplemental Indenture | 5.25% | 700 |
• | 8.25% Senior Notes due 2023; |
• | 7.75% Senior Notes due 2021; |
• | 6.00% Senior Notes due 2020; and |
• | the Junior Subordinated Debenture. |
(dollars in millions) | June 30, 2018 | December 31, 2017 | ||||||
Assets | ||||||||
Cash and cash equivalents | $ | 3 | $ | 4 | ||||
Finance receivables: | ||||||||
Personal loans | 9,135 | 9,769 | ||||||
Allowance for finance receivable losses | 459 | 465 | ||||||
Restricted cash and restricted cash equivalents | 569 | 482 | ||||||
Other assets | 24 | 20 | ||||||
Liabilities | ||||||||
Long-term debt | $ | 8,094 | $ | 8,688 | ||||
Other liabilities | 15 | 15 |
(dollars in millions) | Issue Amount (a) | Current Note Amounts Outstanding (a) | Current Weighted Average Interest Rate | Original Revolving Period | Issue Date | Maturity Date | ||||||||||||
Consumer Securitizations: | ||||||||||||||||||
SLFT 2015-A | $ | 1,163 | $ | 817 | 3.60 | % | 3 years | 02/26/15 | 11/2024 | |||||||||
SLFT 2015-B | 314 | 314 | 3.78 | % | 5 years | 04/07/15 | 05/2028 | |||||||||||
SLFT 2016-A (b) | 532 | 500 | 3.10 | % | 2 years | 12/14/16 | 11/2029 | |||||||||||
SLFT 2017-A (b) | 652 | 619 | 2.98 | % | 3 years | 06/28/17 | 07/2030 | |||||||||||
OMFIT 2014-2 | 1,185 | 164 | 5.06 | % | 2 years | 07/30/14 | 09/2024 | |||||||||||
OMFIT 2015-1 | 1,229 | 834 | 4.00 | % | 3 years | 02/05/15 | 03/2026 | |||||||||||
OMFIT 2015-2 | 1,250 | 462 | 3.91 | % | 2 years | 05/21/15 | 07/2025 | |||||||||||
OMFIT 2015-3 | 293 | 293 | 4.21 | % | 5 years | 09/29/15 | 11/2028 | |||||||||||
OMFIT 2016-1 (b) | 500 | 459 | 4.01 | % | 3 years | 02/10/16 | 02/2029 | |||||||||||
OMFIT 2016-2 (b) | 890 | 616 | 4.63 | % | 2 years | 03/23/16 | 03/2028 | |||||||||||
OMFIT 2016-3 (b) | 350 | 317 | 4.33 | % | 5 years | 06/07/16 | 06/2031 | |||||||||||
OMFIT 2017-1 (b) | 947 | 900 | 2.73 | % | 2 years | 09/06/17 | 09/2032 | |||||||||||
OMFIT 2018-1 (c) | 632 | 600 | 3.60 | % | 3 years | 02/28/18 | 03/2029 | |||||||||||
OMFIT 2018-2 (d) | 368 | 350 | 3.87 | % | 5 years | 03/19/18 | 03/2033 | |||||||||||
Total consumer securitizations | 7,245 | |||||||||||||||||
Auto Securitizations: | ||||||||||||||||||
ODART 2016-1 (b) | 754 | 99 | 3.70 | % | — | 07/19/16 | Various | |||||||||||
ODART 2017-1 (b) | 300 | 200 | 2.76 | % | 1 year | 02/01/17 | Various | |||||||||||
ODART 2017-2 (b) | 605 | 575 | 2.63 | % | 1 year | 12/11/17 | Various | |||||||||||
Total auto securitizations | 874 | |||||||||||||||||
Total secured structured financings | $ | 8,119 |
(a) | Issue Amount includes the retained interest amounts as applicable and as noted below while the Current Note Amounts Outstanding balances reflect pay-downs subsequent to note issuance and exclude retained interest amounts. |
(b) | For these borrowings, we describe our consumer and auto securitizations initial retained amounts in Note 13 of the Notes to Consolidated Financial Statements in Part II - Item 8 included in our 2017 Annual Report on Form 10-K. |
(c) | OMFIT 2018-1 Securitization. We initially retained approximately $32 million of the asset-backed notes. |
(d) | OMFIT 2018-2 Securitization. We initially retained approximately $18 million of the asset-backed notes. |
(dollar in millions) | Advance Maximum Balance | Amount Drawn | Revolving Period End | Collateral Type | Due and Payable (a) | |||||||||
Seine River Funding, LLC | $ | 500 | $ | — | December 2019 | Personal loans | December 2022 | |||||||
Rocky River Funding, LLC (b) | 400 | — | June 2020 | Personal loans | July 2021 | |||||||||
Thur River Funding, LLC | 350 | — | June 2020 | Personal loans | February 2027 | |||||||||
OneMain Financial Funding IX, LLC | 600 | — | June 2020 | Personal loans | July 2021 | |||||||||
Mystic River Funding, LLC | 850 | — | September 2020 | Personal loans and auto loans | October 2023 | |||||||||
Fourth Avenue Auto Funding, LLC | 250 | — | September 2020 | Auto loans | October 2021 | |||||||||
OneMain Financial Funding VIII, LLC (c) | 450 | — | January 2021 | Personal loans | February 2023 | |||||||||
OneMain Financial Auto Funding I, LLC (d) | 850 | — | June 2021 | Auto loans | July 2028 | |||||||||
OneMain Financial Funding VII, LLC (e) | 850 | — | June 2021 | Personal loans | July 2023 | |||||||||
Thayer Brook Funding, LLC (f) | 250 | — | July 2021 | Auto loans | August 2022 | |||||||||
Total | $ | 5,350 | $ | — |
(a) | The date following the revolving period that the principal balance of the outstanding loans, if any, will be reduced as cash payments are received on the underlying loans and will be due and payable in full. |
(b) | On June 27, 2018, we amended the loan and security agreement with Rocky River Funding, LLC to, among other things, (i) increase the advance maximum balance from $250 million to $400 million and (ii) extend the revolving period ending September 2019 to June 2020 thereby extending the final maturity to July 2021. |
(c) | On February 2, 2018, we entered into a loan and security agreement with OneMain Financial Funding VIII, LLC concurrently with the voluntary termination of the note purchase agreement with the OneMain Financial B6 Warehouse Trust. |
(d) | On June 26, 2018, we amended the loan and security agreement with OneMain Financial Auto Funding I, LLC, to, among other things, (i) increase the advance maximum balance from $750 million to $850 million and (ii) extend the revolving period ending October 2020 to June 2021 thereby extending the final maturity to July 2028. |
(e) | On May 31, 2018, we amended the loan and security agreement with OneMain Financial Funding VII, LLC to, among other things, (i) increase the advance maximum balance from $650 million to $850 million and (ii) extend the revolving period ending October 2019 to June 2021 thereby extending the final maturity to July 2023. |
(f) | On June 28, 2018, we entered into a new loan and security agreement with Thayer Brook Funding, LLC. |
At or for the Six Months Ended June 30, | ||||||||
(dollars in millions) | 2018 | 2017 | ||||||
Balance at beginning of period | $ | 154 | $ | 158 | ||||
Less reinsurance recoverables | (23 | ) | (26 | ) | ||||
Net balance at beginning of period | 131 | 132 | ||||||
Additions for losses and loss adjustment expenses incurred to: | ||||||||
Current year | 102 | 96 | ||||||
Prior years * | (5 | ) | 2 | |||||
Total | 97 | 98 | ||||||
Reductions for losses and loss adjustment expenses paid related to: | ||||||||
Current year | (47 | ) | (45 | ) | ||||
Prior years | (51 | ) | (58 | ) | ||||
Total | (98 | ) | (103 | ) | ||||
Net balance at end of period | 130 | 127 | ||||||
Plus reinsurance recoverables | 4 | 25 | ||||||
Transfer of reserves | (19 | ) | — | |||||
Balance at end of period | $ | 115 | $ | 152 |
* | Reflects (i) a redundancy in the prior years’ net reserves of $5 million at June 30, 2018 primarily due to favorable development of credit disability and unemployment claims during the year and (ii) a shortfall in the prior years’ net reserves of $2 million at June 30, 2017 primarily due to adverse development on ordinary life and credit disability during the year. |
(dollars in millions, except per share data) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Numerator (basic and diluted): | ||||||||||||||||
Net income attributable to OneMain Holdings, Inc. | $ | 7 | $ | 42 | $ | 131 | $ | 75 | ||||||||
Denominator: | ||||||||||||||||
Weighted average number of shares outstanding (basic) | 135,678,914 | 135,249,610 | 135,637,825 | 135,234,143 | ||||||||||||
Effect of dilutive securities * | 290,131 | 263,817 | 295,574 | 309,199 | ||||||||||||
Weighted average number of shares outstanding (diluted) | 135,969,045 | 135,513,427 | 135,933,399 | 135,543,342 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.05 | $ | 0.31 | $ | 0.96 | $ | 0.55 | ||||||||
Diluted | $ | 0.05 | $ | 0.30 | $ | 0.96 | $ | 0.55 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Performance-based shares | 45,467 | 25,089 | 71,314 | 27,887 | ||||||||
Service-based shares | 159,698 | 795,321 | 240,467 | 775,476 |
(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 June 30, 2018 | ||||||||||||||||
Balance at beginning of period | $ | (16 | ) | $ | 4 | $ | — | $ | (12 | ) | ||||||
Other comprehensive income (loss) before reclassifications | (10 | ) | 2 | (3 | ) | (11 | ) | |||||||||
Impact of AOCI reclassification due to the Tax Act | 2 | (3 | ) | 3 | 2 | |||||||||||
Balance at end of period | $ | (24 | ) | $ | 3 | $ | — | $ | (21 | ) | ||||||
Three Months Ended June 30, 2017 | ||||||||||||||||
Balance at beginning of period | $ | 3 | $ | (4 | ) | $ | (1 | ) | $ | (2 | ) | |||||
Other comprehensive income before reclassifications | 6 | — | 2 | 8 | ||||||||||||
Reclassification adjustments from accumulated other comprehensive loss | (3 | ) | — | — | (3 | ) | ||||||||||
Balance at end of period | $ | 6 | $ | (4 | ) | $ | 1 | $ | 3 | |||||||
Six Months Ended June 30, 2018 | ||||||||||||||||
Balance at beginning of period | $ | 4 | $ | 4 | $ | 3 | $ | 11 | ||||||||
Other comprehensive income (loss) before reclassifications | (30 | ) | 2 | (6 | ) | (34 | ) | |||||||||
Impact of AOCI reclassification due to the Tax Act | 2 | (3 | ) | 3 | 2 | |||||||||||
Balance at end of period | $ | (24 | ) | $ | 3 | $ | — | $ | (21 | ) | ||||||
Six Months Ended June 30, 2017 | ||||||||||||||||
Balance at beginning of period | $ | (1 | ) | $ | (4 | ) | $ | (1 | ) | $ | (6 | ) | ||||
Other comprehensive income before reclassifications | 13 | — | 2 | 15 | ||||||||||||
Reclassification adjustments from accumulated other comprehensive loss | (6 | ) | — | — | (6 | ) | ||||||||||
Balance at end of period | $ | 6 | $ | (4 | ) | $ | 1 | $ | 3 |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Unrealized gains on available-for-sale securities: | ||||||||||||||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes | $ | — | $ | 4 | $ | — | $ | 8 | ||||||||
Income tax effect | — | (1 | ) | — | (2 | ) | ||||||||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, net of taxes | $ | — | $ | 3 | $ | — | $ | 6 |
(dollars in millions) | Consumer and Insurance | Acquisitions and Servicing | Other | Segment to GAAP Adjustment | Consolidated Total | |||||||||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||||||
Interest income | $ | 911 | $ | — | $ | 5 | $ | (11 | ) | $ | 905 | |||||||||
Interest expense | 212 | — | 5 | 3 | 220 | |||||||||||||||
Provision for finance receivable losses | 261 | — | (3 | ) | 2 | 260 | ||||||||||||||
Net interest income after provision for finance receivable losses | 438 | — | 3 | (16 | ) | 425 | ||||||||||||||
Other revenues | 106 | 8 | — | 26 | 140 | |||||||||||||||
Acquisition-related transaction and integration expenses | 22 | — | — | 6 | 28 | |||||||||||||||
Other expenses | 368 | 8 | 112 | 6 | 494 | |||||||||||||||
Income (loss) before income tax expense (benefit) | $ | 154 | $ | — | $ | (109 | ) | $ | (2 | ) | $ | 43 |
Three Months Ended June 30, 2017 | ||||||||||||||||||||
Interest income | $ | 801 | $ | — | $ | 6 | $ | (35 | ) | $ | 772 | |||||||||
Interest expense | 189 | — | 5 | 9 | 203 | |||||||||||||||
Provision for finance receivable losses | 234 | — | — | 2 | 236 | |||||||||||||||
Net interest income after provision for finance receivable losses | 378 | — | 1 | (46 | ) | 333 | ||||||||||||||
Other revenues | 127 | 10 | 1 | (17 | ) | 121 | ||||||||||||||
Acquisition-related transaction and integration expenses | 14 | — | — | — | 14 | |||||||||||||||
Other expenses | 347 | 10 | 10 | 7 | 374 | |||||||||||||||
Income (loss) before income tax expense (benefit) | $ | 144 | $ | — | $ | (8 | ) | $ | (70 | ) | $ | 66 |
At or for the Six Months Ended June 30, 2018 | ||||||||||||||||||||
Interest income | $ | 1,784 | $ | — | $ | 9 | $ | (26 | ) | $ | 1,767 | |||||||||
Interest expense | 406 | — | 9 | 5 | 420 | |||||||||||||||
Provision for finance receivable losses | 519 | — | (5 | ) | — | 514 | ||||||||||||||
Net interest income after provision for finance receivable losses | 859 | — | 5 | (31 | ) | 833 | ||||||||||||||
Other revenues | 211 | 17 | (2 | ) | 51 | 277 | ||||||||||||||
Acquisition-related transaction and integration expenses | 32 | — | — | 7 | 39 | |||||||||||||||
Other expenses | 711 | 16 | 122 | 11 | 860 | |||||||||||||||
Income (loss) before income tax expense (benefit) | $ | 327 | $ | 1 | $ | (119 | ) | $ | 2 | $ | 211 | |||||||||
Assets | $ | 17,258 | $ | — | $ | 248 | $ | 2,134 | $ | 19,640 |
At or for the Six Months Ended June 30, 2017 | ||||||||||||||||||||
Interest income | $ | 1,599 | $ | — | $ | 12 | $ | (80 | ) | $ | 1,531 | |||||||||
Interest expense | 375 | — | 11 | 19 | 405 | |||||||||||||||
Provision for finance receivable losses | 473 | — | 1 | 7 | 481 | |||||||||||||||
Net interest income after provision for finance receivable losses | 751 | — | — | (106 | ) | 645 | ||||||||||||||
Other revenues | 264 | 22 | 1 | (25 | ) | 262 | ||||||||||||||
Acquisition-related transaction and integration expenses | 34 | — | 6 | (3 | ) | 37 | ||||||||||||||
Other expenses | 695 | 21 | 16 | 15 | 747 | |||||||||||||||
Income (loss) before income tax expense (benefit) | $ | 286 | $ | 1 | $ | (21 | ) | $ | (143 | ) | $ | 123 | ||||||||
Assets | $ | 16,420 | $ | 5 | $ | 352 | $ | 1,921 | $ | 18,698 |
Fair Value Measurements Using | Total Fair Value | Total Carrying Value | ||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||
June 30, 2018 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 524 | $ | 32 | $ | — | $ | 556 | $ | 556 | ||||||||||
Investment securities | 38 | 1,677 | 5 | 1,720 | 1,720 | |||||||||||||||
Net finance receivables, less allowance for finance receivable losses | — | — | 16,198 | 16,198 | 14,806 | |||||||||||||||
Finance receivables held for sale | — | — | 133 | 133 | 123 | |||||||||||||||
Restricted cash and restricted cash equivalents | 587 | — | — | 587 | 587 | |||||||||||||||
Other assets * | — | — | 11 | 11 | 11 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Long-term debt | $ | — | $ | 15,450 | $ | — | $ | 15,450 | $ | 15,054 | ||||||||||
December 31, 2017 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 933 | $ | 54 | $ | — | $ | 987 | $ | 987 | ||||||||||
Investment securities | 36 | 1,654 | 7 | 1,697 | 1,697 | |||||||||||||||
Net finance receivables, less allowance for finance receivable losses | — | — | 15,656 | 15,656 | 14,260 | |||||||||||||||
Finance receivables held for sale | — | — | 139 | 139 | 132 | |||||||||||||||
Restricted cash and restricted cash equivalents | 498 | — | — | 498 | 498 | |||||||||||||||
Other assets * | — | — | 12 | 12 | 12 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Long-term debt | $ | — | $ | 15,625 | $ | — | $ | 15,625 | $ | 15,050 |
* | Other assets include commercial mortgage loans and escrow advance receivable. |
Fair Value Measurements Using | Total Carried At Fair Value | |||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 * | |||||||||||||
June 30, 2018 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents in mutual funds | $ | 368 | $ | — | $ | — | $ | 368 | ||||||||
Cash equivalents in securities | — | 32 | — | 32 | ||||||||||||
Investment securities: | ||||||||||||||||
Available-for-sale securities | ||||||||||||||||
U.S. government and government sponsored entities | — | 23 | — | 23 | ||||||||||||
Obligations of states, municipalities, and political subdivisions | — | 134 | — | 134 | ||||||||||||
Certificates of deposit and commercial paper | — | 26 | — | 26 | ||||||||||||
Non-U.S. government and government sponsored entities | — | 132 | — | 132 | ||||||||||||
Corporate debt | — | 1,009 | 2 | 1,011 | ||||||||||||
RMBS | — | 116 | — | 116 | ||||||||||||
CMBS | — | 82 | — | 82 | ||||||||||||
CDO/ABS | — | 93 | 1 | 94 | ||||||||||||
Total available-for-sale securities | — | 1,615 | 3 | 1,618 | ||||||||||||
Other securities | ||||||||||||||||
Bonds: | ||||||||||||||||
Non-U.S. government and government sponsored entities | — | 1 | — | 1 | ||||||||||||
Corporate debt | — | 50 | 1 | 51 | ||||||||||||
RMBS | — | 1 | — | 1 | ||||||||||||
CDO/ABS | — | 3 | — | 3 | ||||||||||||
Total bonds | — | 55 | 1 | 56 | ||||||||||||
Preferred stock | 15 | 7 | — | 22 | ||||||||||||
Common stock | 23 | — | — | 23 | ||||||||||||
Other long-term investments | — | — | 1 | 1 | ||||||||||||
Total other securities | 38 | 62 | 2 | 102 | ||||||||||||
Total investment securities | 38 | 1,677 | 5 | 1,720 | ||||||||||||
Restricted cash in mutual funds | 570 | — | — | 570 | ||||||||||||
Total | $ | 976 | $ | 1,709 | $ | 5 | $ | 2,690 |
* | Due to the insignificant activity within the Level 3 assets during the three and six months ended June 30, 2018, 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. |
Fair Value Measurements Using | Total Carried At Fair Value | |||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 (a) | |||||||||||||
December 31, 2017 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents in mutual funds | $ | 709 | $ | — | $ | — | $ | 709 | ||||||||
Cash equivalents in securities | — | 54 | — | 54 | ||||||||||||
Investment securities: | ||||||||||||||||
Available-for-sale securities | ||||||||||||||||
U.S. government and government sponsored entities | — | 28 | — | 28 | ||||||||||||
Obligations of states, municipalities, and political subdivisions | — | 135 | — | 135 | ||||||||||||
Certificates of deposit and commercial paper | — | 60 | — | 60 | ||||||||||||
Non-U.S. government and government sponsored entities | — | 125 | — | 125 | ||||||||||||
Corporate debt | — | 946 | 2 | 948 | ||||||||||||
RMBS | — | 99 | — | 99 | ||||||||||||
CMBS | — | 87 | — | 87 | ||||||||||||
CDO/ABS | — | 95 | 1 | 96 | ||||||||||||
Total available-for-sale securities (b) | — | 1,575 | 3 | 1,578 | ||||||||||||
Other securities | ||||||||||||||||
Bonds: | ||||||||||||||||
Non-U.S. government and government sponsored entities | — | 1 | — | 1 | ||||||||||||
Corporate debt | — | 66 | 2 | 68 | ||||||||||||
RMBS | — | 1 | — | 1 | ||||||||||||
CDO/ABS | — | 4 | — | 4 | ||||||||||||
Total bonds | — | 72 | 2 | 74 | ||||||||||||
Preferred stock | 13 | 7 | — | 20 | ||||||||||||
Common stock | 23 | — | — | 23 | ||||||||||||
Other long-term investments | — | — | 1 | 1 | ||||||||||||
Total other securities | 36 | 79 | 3 | 118 | ||||||||||||
Total investment securities | 36 | 1,654 | 6 | 1,696 | ||||||||||||
Restricted cash in mutual funds | 484 | — | — | 484 | ||||||||||||
Total | $ | 1,229 | $ | 1,708 | $ | 6 | $ | 2,943 |
(a) | Due to the insignificant activity within the Level 3 assets during 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 December 31, 2017, which is carried at cost. |
• | 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; |
• | any litigation, fines or penalties that could arise relating to the OneMain Acquisition or Apollo-Värde Transaction; |
• | effects, if any, of the Apollo-Värde Transaction, including effects on our business or operational strategies, goals or objectives or our relationships with our employees or third parties; |
• | various risks relating to 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, or other events disrupting business or commerce; |
• | effects on our business, reputation and our financial position, results of operations and cash flows of any cyberbreach or other cyber-related incident involving our information systems or the loss, theft or unauthorized disclosure of personally identifiable information of our present or former customers, including any costs, fines or penalties incurred in connection therewith not covered by insurance, whether as a result of litigation, governmental investigations, business interruption, remediation efforts or otherwise; |
• | 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; |
• | 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, including effects of the enactment of the Tax Act; |
• | potential liability relating to real estate and personal loans which we have sold or may sell in the future, or relating to securitized loans, if it is determined that there was a non-curable breach of a representation or warranty made in connection with such transactions; |
• | the costs and effects of any actual or alleged violations of any federal, state or local laws, rules or regulations, including any litigation associated therewith, any impact to our business operations, reputation, financial position, results of operations or cash flows arising therefrom, any impact to our relationships with lenders, investors or other third parties attributable thereto, and the costs and effects of any breach of any representation, warranty or covenant under any of our contractual arrangements, including indentures or other financing arrangements or contracts, as a result of any such violation; |
• | the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority and any litigation associated therewith; |
• | our continued ability to access the capital markets or the sufficiency of our current sources of funds to satisfy our cash flow requirements; |
• | our ability to comply with our debt covenants; |
• | our ability to generate sufficient cash to service all of our indebtedness; |
• | any material impairment or write-down of the value of our assets; |
• | the effects of any downgrade of our debt ratings by credit rating agencies, which could have a negative impact on our cost of and/or access to capital; |
• | our substantial indebtedness, which could prevent us from meeting our obligations under our debt instruments and limit our ability to react to changes in the economy or our industry, or our ability to incur additional borrowings; |
• | the impacts of our securitizations and borrowings; |
• | our ability to maintain sufficient capital levels in our regulated and unregulated subsidiaries; |
• | changes in accounting standards or tax policies and practices and the application of such new standards, policies and practices; |
• | changes in accounting principles and policies or changes in accounting estimates; |
• | 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 June 30, 2018, we had nearly 2.4 million personal loans, representing $15.4 billion of net finance receivables, compared to 2.4 million personal loans totaling $14.8 billion at December 31, 2017. |
• | 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. We also offer home and auto membership plans of an unaffiliated company. |
• | Other Receivables — We ceased originating real estate loans in 2012 and purchasing retail sales contracts and revolving retail accounts in 2013. We continue to service or sub-service the liquidating real estate loans and 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 customer product options; |
• | Growing secured lending originations with a goal of enhancing credit performance; |
• | Leveraging our scale and cost discipline across the Company to deliver improved operating leverage; |
• | Increasing tangible equity and reducing leverage; and |
• | Maintaining a strong liquidity level with diversified funding sources. |
(dollars in millions, except per share amounts) | At or for the Three Months Ended June 30, | At or for the Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Interest income | $ | 905 | $ | 772 | $ | 1,767 | $ | 1,531 | ||||||||
Interest expense | 220 | 203 | 420 | 405 | ||||||||||||
Provision for finance receivable losses | 260 | 236 | 514 | 481 | ||||||||||||
Net interest income after provision for finance receivable losses | 425 | 333 | 833 | 645 | ||||||||||||
Other revenues | 140 | 121 | 277 | 262 | ||||||||||||
Acquisition-related transaction and integration expenses | 28 | 14 | 39 | 37 | ||||||||||||
Other expenses | 494 | 374 | 860 | 747 | ||||||||||||
Income before income taxes | 43 | 66 | 211 | 123 | ||||||||||||
Income taxes | 36 | 24 | 80 | 48 | ||||||||||||
Net income | $ | 7 | $ | 42 | $ | 131 | $ | 75 | ||||||||
Share Data: | ||||||||||||||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic | 135,678,914 | 135,249,610 | 135,637,825 | 135,234,143 | ||||||||||||
Diluted | 135,969,045 | 135,513,427 | 135,933,399 | 135,543,342 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.05 | $ | 0.31 | $ | 0.96 | $ | 0.55 | ||||||||
Diluted | $ | 0.05 | $ | 0.30 | $ | 0.96 | $ | 0.55 | ||||||||
Selected Financial Statistics * | ||||||||||||||||
Finance receivables held for investment: | ||||||||||||||||
Net finance receivables | $ | 15,508 | $ | 14,050 | $ | 15,508 | $ | 14,050 | ||||||||
Number of accounts | 2,373,671 | 2,231,010 | 2,373,671 | 2,231,010 | ||||||||||||
Finance receivables held for sale: | ||||||||||||||||
Net finance receivables | $ | 123 | $ | 141 | $ | 123 | $ | 141 | ||||||||
Number of accounts | 2,277 | 2,614 | 2,277 | 2,614 | ||||||||||||
Finance receivables held for investment: | ||||||||||||||||
Average net receivables | $ | 15,239 | $ | 13,681 | $ | 15,113 | $ | 13,597 | ||||||||
Yield | 23.74 | % | 22.53 | % | 23.50 | % | 22.60 | % | ||||||||
Gross charge-off ratio | 7.32 | % | 7.46 | % | 7.58 | % | 8.18 | % | ||||||||
Recovery ratio | (0.82 | )% | (0.84 | )% | (0.79 | )% | (0.87 | )% | ||||||||
Net charge-off ratio | 6.50 | % | 6.62 | % | 6.79 | % | 7.31 | % | ||||||||
30-89 Delinquency ratio | 2.18 | % | 2.19 | % | 2.18 | % | 2.19 | % | ||||||||
Origination volume | $ | 3,216 | $ | 2,953 | $ | 5,756 | $ | 4,765 | ||||||||
Number of accounts originated | 393,561 | 398,240 | 718,291 | 641,892 |
* | See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios. |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Consumer and Insurance | ||||||||||||||||
Income before income taxes - Segment Accounting Basis | $ | 154 | $ | 144 | $ | 327 | $ | 286 | ||||||||
Adjustments: | ||||||||||||||||
Acquisition-related transaction and integration expenses | 22 | 14 | 32 | 34 | ||||||||||||
Net loss on repurchases and repayments of debt | 35 | 16 | 62 | 17 | ||||||||||||
Adjusted pretax income (non-GAAP) | $ | 211 | $ | 174 | $ | 421 | $ | 337 | ||||||||
Acquisitions and Servicing | ||||||||||||||||
Income before income taxes - Segment Accounting Basis | $ | — | $ | — | $ | 1 | $ | 1 | ||||||||
Adjustments: | — | — | — | — | ||||||||||||
Adjusted pretax income (non-GAAP) | $ | — | $ | — | $ | 1 | $ | 1 | ||||||||
Other | ||||||||||||||||
Loss before income tax benefit - Segment Accounting Basis | $ | (109 | ) | $ | (8 | ) | $ | (119 | ) | $ | (21 | ) | ||||
Adjustments: | ||||||||||||||||
Non-cash incentive compensation expense | 106 | — | 106 | — | ||||||||||||
Acquisition-related transaction and integration expenses | — | — | — | 6 | ||||||||||||
Adjusted pretax loss (non-GAAP) | $ | (3 | ) | $ | (8 | ) | $ | (13 | ) | $ | (15 | ) |
(dollars in millions) | At or for the Three Months Ended June 30, | At or for the Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Interest income | $ | 911 | $ | 801 | $ | 1,784 | $ | 1,599 | ||||||||
Interest expense | 212 | 189 | 406 | 375 | ||||||||||||
Provision for finance receivable losses | 261 | 234 | 519 | 473 | ||||||||||||
Net interest income after provision for finance receivable losses | 438 | 378 | 859 | 751 | ||||||||||||
Other revenues | 141 | 143 | 273 | 281 | ||||||||||||
Other expenses | 368 | 347 | 711 | 695 | ||||||||||||
Adjusted pretax income (non-GAAP) | $ | 211 | $ | 174 | $ | 421 | $ | 337 | ||||||||
Selected Financial Statistics * | ||||||||||||||||
Finance receivables held for investment: | ||||||||||||||||
Net finance receivables | $ | 15,406 | $ | 13,856 | $ | 15,406 | $ | 13,856 | ||||||||
Number of accounts | 2,369,661 | 2,224,930 | 2,369,661 | 2,224,930 | ||||||||||||
Finance receivables held for investment: | ||||||||||||||||
Average net receivables | $ | 15,130 | $ | 13,469 | $ | 14,995 | $ | 13,365 | ||||||||
Yield | 24.14 | % | 23.85 | % | 23.99 | % | 24.12 | % | ||||||||
Gross charge-off ratio | 7.56 | % | 7.91 | % | 7.82 | % | 8.74 | % | ||||||||
Recovery ratio | (0.94 | )% | (1.01 | )% | (0.91 | )% | (1.06 | )% | ||||||||
Net charge-off ratio | 6.62 | % | 6.90 | % | 6.91 | % | 7.68 | % | ||||||||
30-89 Delinquency ratio | 2.13 | % | 2.13 | % | 2.13 | % | 2.13 | % | ||||||||
Origination volume | $ | 3,216 | $ | 2,953 | $ | 5,756 | $ | 4,765 | ||||||||
Number of accounts originated | 393,561 | 398,240 | 718,291 | 641,892 |
* | See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios. |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Other revenues | 8 | 10 | $ | 17 | $ | 22 | ||||||||||
Other expenses | 8 | 10 | 16 | 21 | ||||||||||||
Adjusted pretax income (non-GAAP) | $ | — | $ | — | $ | 1 | $ | 1 |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Interest income | $ | 5 | $ | 6 | $ | 9 | $ | 12 | ||||||||
Interest expense | 5 | 5 | 9 | 11 | ||||||||||||
Provision for finance receivable losses | (3 | ) | — | (5 | ) | 1 | ||||||||||
Net interest income after provision for finance receivable losses | 3 | 1 | 5 | — | ||||||||||||
Other revenues | — | 1 | (2 | ) | 1 | |||||||||||
Other expenses | 6 | 10 | 16 | 16 | ||||||||||||
Adjusted pretax loss (non-GAAP) | $ | (3 | ) | $ | (8 | ) | $ | (13 | ) | $ | (15 | ) |
(dollars in millions) | June 30, | |||||||
2018 | 2017 | |||||||
Net finance receivables held for investment: | ||||||||
Personal loans | $ | — | $ | 6 | ||||
Other receivables | 131 | 150 | ||||||
Total | $ | 131 | $ | 156 | ||||
Net finance receivables held for sale: | ||||||||
Other receivables | $ | 130 | $ | 146 |
(dollars in millions) | Consumer and Insurance | Other | Segment to GAAP Adjustment | Consolidated Total | ||||||||||||
June 30, 2018 | ||||||||||||||||
Personal loans | $ | 15,406 | $ | — | $ | (22 | ) | $ | 15,384 | |||||||
Other receivables | — | 131 | (7 | ) | 124 | |||||||||||
Total | $ | 15,406 | $ | 131 | $ | (29 | ) | $ | 15,508 | |||||||
December 31, 2017 | ||||||||||||||||
Personal loans | $ | 14,820 | $ | — | $ | 3 | $ | 14,823 | ||||||||
Other receivables | — | 142 | (8 | ) | 134 | |||||||||||
Total | $ | 14,820 | $ | 142 | $ | (5 | ) | $ | 14,957 |
• | 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 | Other Receivables | Total | |||||||||
June 30, 2018 | ||||||||||||
FICO scores | ||||||||||||
660 or higher | $ | 4,122 | $ | 43 | $ | 4,165 | ||||||
620-659 | 4,084 | 21 | 4,105 | |||||||||
619 or below | 7,178 | 60 | 7,238 | |||||||||
Total | $ | 15,384 | $ | 124 | $ | 15,508 | ||||||
December 31, 2017 | ||||||||||||
FICO scores | ||||||||||||
660 or higher | $ | 3,950 | $ | 45 | $ | 3,995 | ||||||
620-659 | 3,919 | 22 | 3,941 | |||||||||
619 or below | 6,954 | 67 | 7,021 | |||||||||
Total | $ | 14,823 | $ | 134 | $ | 14,957 |
(dollars in millions) | Consumer and Insurance | Other | Segment to GAAP Adjustment | Consolidated Total | ||||||||||||
June 30, 2018 | ||||||||||||||||
Current | $ | 14,785 | $ | 101 | $ | (25 | ) | $ | 14,861 | |||||||
30-59 days past due | 194 | 9 | (1 | ) | 202 | |||||||||||
Delinquent (60-89 days past due) | 134 | 3 | (1 | ) | 136 | |||||||||||
Performing | 15,113 | 113 | (27 | ) | 15,199 | |||||||||||
Nonperforming (90+ days past due) | 293 | 18 | (2 | ) | 309 | |||||||||||
Total net finance receivables | $ | 15,406 | $ | 131 | $ | (29 | ) | $ | 15,508 | |||||||
Delinquency ratio | ||||||||||||||||
30-89 days past due | 2.13 | % | 9.59 | % | * | 2.18 | % | |||||||||
30+ days past due | 4.03 | % | 23.15 | % | * | 4.17 | % | |||||||||
60+ days past due | 2.77 | % | 16.15 | % | * | 2.87 | % | |||||||||
90+ days past due | 1.90 | % | 13.56 | % | * | 1.99 | % | |||||||||
December 31, 2017 | ||||||||||||||||
Current | $ | 14,119 | $ | 109 | $ | — | $ | 14,228 | ||||||||
30-59 days past due | 205 | 9 | (2 | ) | 212 | |||||||||||
Delinquent (60-89 days past due) | 157 | 4 | (1 | ) | 160 | |||||||||||
Performing | 14,481 | 122 | (3 | ) | 14,600 | |||||||||||
Nonperforming (90+ days past due) | 339 | 20 | (2 | ) | 357 | |||||||||||
Total net finance receivables | $ | 14,820 | $ | 142 | $ | (5 | ) | $ | 14,957 | |||||||
Delinquency ratio | ||||||||||||||||
30-89 days past due | 2.44 | % | 8.60 | % | * | 2.49 | % | |||||||||
30+ days past due | 4.73 | % | 22.75 | % | * | 4.88 | % | |||||||||
60+ days past due | 3.35 | % | 16.66 | % | * | 3.46 | % | |||||||||
90+ days past due | 2.29 | % | 14.15 | % | * | 2.39 | % |
* | Not applicable. |
(dollars in millions) | Consumer and Insurance | Other | Segment to GAAP Adjustment | Consolidated Total | ||||||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||
Balance at beginning of period | $ | 718 | $ | 32 | $ | (61 | ) | $ | 689 | |||||||
Provision for finance receivable losses | 261 | (3 | ) | 2 | 260 | |||||||||||
Charge-offs | (285 | ) | — | 7 | (278 | ) | ||||||||||
Recoveries | 35 | 1 | (5 | ) | 31 | |||||||||||
Balance at end of period | $ | 729 | $ | 30 | $ | (57 | ) | $ | 702 | |||||||
Three Months Ended June 30, 2017 | ||||||||||||||||
Balance at beginning of period | $ | 694 | $ | 30 | $ | (58 | ) | $ | 666 | |||||||
Provision for finance receivable losses | 234 | — | 2 | 236 | ||||||||||||
Charge-offs | (266 | ) | (4 | ) | 15 | (255 | ) | |||||||||
Recoveries | 35 | 1 | (7 | ) | 29 | |||||||||||
Balance at end of period | $ | 697 | $ | 27 | $ | (48 | ) | $ | 676 | |||||||
Six Months Ended June 30, 2018 | ||||||||||||||||
Balance at beginning of period | $ | 724 | $ | 35 | $ | (62 | ) | $ | 697 | |||||||
Provision for finance receivable losses | 519 | (5 | ) | — | 514 | |||||||||||
Charge-offs | (582 | ) | (2 | ) | 16 | (568 | ) | |||||||||
Recoveries | 68 | 2 | (11 | ) | 59 | |||||||||||
Balance at end of period | $ | 729 | $ | 30 | $ | (57 | ) | $ | 702 | |||||||
Allowance ratio | 4.73 | % | 22.76 | % | (a) | 4.53 | % | |||||||||
Six Months Ended June 30, 2017 | ||||||||||||||||
Balance at beginning of period | $ | 732 | $ | 31 | $ | (74 | ) | $ | 689 | |||||||
Provision for finance receivable losses | 473 | 1 | 7 | 481 | ||||||||||||
Charge-offs | (579 | ) | (6 | ) | 33 | (552 | ) | |||||||||
Recoveries | 71 | 1 | (14 | ) | 58 | |||||||||||
Balance at end of period | $ | 697 | $ | 27 | $ | (48 | ) | $ | 676 | |||||||
Allowance ratio | 5.03 | % | 17.69 | % | (a) | 4.81 | % |
(a) | Not applicable. |
(dollars in millions) | Consumer and Insurance | Other | Segment to GAAP Adjustment | Consolidated Total | ||||||||||||
June 30, 2018 | ||||||||||||||||
TDR net finance receivables | $ | 508 | $ | 73 | $ | (152 | ) | $ | 429 | |||||||
Allowance for TDR finance receivable losses | 205 | 23 | (58 | ) | 170 | |||||||||||
December 31, 2017 | ||||||||||||||||
TDR net finance receivables | $ | 481 | $ | 74 | $ | (188 | ) | $ | 367 | |||||||
Allowance for TDR finance receivable losses | 191 | 26 | (70 | ) | 147 |
• | On July 5, 2018, we borrowed $50 million under the loan and security agreement with Thur River Funding, LLC. |
• | On July 24, 2018, we issued $947 million in notes backed by direct auto loans (“ODART 2018-1”). The maturity dates of the ODART 2018-1 notes occur in December 2024 with respect to the Class A notes, April 2025 with respect to the Class B notes, October 2025 with respect to the Class C notes and January 2028 with respect to the Class D notes. We initially retained approximately $47 million distributed among each class of the notes. |
• | On August 1, 2018, we amended the loan and security agreement with OneMain Financial Funding VIII, LLC to, among other things, (i) increase the advance maximum balance from $450 million to $650 million and (ii) extend the revolving period ending January 2021 to August 2021 thereby extending the final maturity to September 2023. |
• | our inability to grow or maintain our personal loan portfolio with adequate profitability; |
• | the effect of federal, state and local laws, regulations, or regulatory policies and practices; |
• | potential liability relating to real estate and personal loans which we have sold or may sell in the future, or relating to securitized loans; and |
• | the potential for disruptions in the debt and equity markets. |
• | maintaining disciplined underwriting standards and pricing for loans we originate or purchase and managing purchases of finance receivables; |
• | pursuing additional debt financings (including new securitizations and new unsecured debt issuances, debt refinancing transactions and revolving conduit facilities), or a combination of the foregoing; |
• | purchasing portions of our outstanding indebtedness through open market or privately negotiated transactions with third parties or pursuant to one or more tender or exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration, as we may determine; and |
• | obtaining new and extending existing secured revolving facilities to provide committed liquidity in case of prolonged market fluctuations. |
• | allowance for finance receivable losses; |
• | purchased credit impaired finance receivables; |
• | TDR finance receivables; |
• | fair value measurements; and |
• | goodwill and other intangible assets. |
• | a classified board of directors with staggered three-year terms; |
• | removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote (provided, however, that for so long as the Apollo-Värde Group and certain of its affiliates and permitted transferees beneficially own, directly or indirectly, at least 30% of our issued and outstanding common stock, directors may be removed with or without cause with the affirmative vote of a majority of the then issued and outstanding voting interest of stockholders entitled to vote); |
• | provisions in our restated certificate of incorporation and amended and restated bylaws prevent stockholders from calling special meetings of our stockholders (provided, however, that for so long as the Apollo-Värde Group and certain of its affiliates and permitted transferees beneficially own, directly or indirectly, at least 20% of our issued and outstanding common stock, any stockholders that collectively beneficially own at least 20% of our issued and outstanding common stock may call special meetings of our stockholders); |
• | advance notice requirements by stockholders with respect to director nominations and actions to be taken at annual meetings; |
• | under the stockholders agreement, certain rights to the Apollo-Värde Group and certain of its affiliates and permitted transferees with respect to the designation of directors for nomination and election to our board of directors, including the ability to appoint a majority of the members of our board of directors, plus one director, for so long as the Apollo-Värde Group and certain of its affiliates and permitted transferees continue to beneficially own, directly or indirectly at least 33% of our issued and outstanding common stock; |
• | no provision in our restated certificate of incorporation or amended and restated bylaws permits cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of our common stock can elect all the directors standing for election; |
• | our restated certificate of incorporation and our amended and restated bylaws only permit action by our stockholders outside a meeting by unanimous written consent, provided, however, that for so long as the Apollo-Värde Group and certain of its affiliates and permitted transferees beneficially own, directly or indirectly, at least 20% of our issued and outstanding common stock (including the Apollo-Värde Group’s proportionate interest in shares of our common stock held by the SFH), our stockholders may act without a meeting by written consent of a majority of our stockholders; and |
• | under our restated certificate of incorporation, our board of directors has authority to cause the issuance of preferred stock from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of our stockholders. |
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: | August 3, 2018 | 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: | August 3, 2018 | ||
/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: | August 3, 2018 | ||
/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: | August 3, 2018 |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Aug. 01, 2018 |
|
Document and Entity Information | ||
Entity Registrant Name | OneMain Holdings, Inc. | |
Entity Central Index Key | 0001584207 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 135,787,008 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 |
Business and Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation OneMain Holdings, Inc. is referred to in this report as “OMH” or, collectively with its subsidiaries, whether directly or indirectly owned, the “Company,” “we,” “us,” or “our.” OMH is a Delaware corporation. At December 31, 2017, prior to the transactions described below, Springleaf Financial Holdings LLC (“SFH”), owned approximately 44% of OMH’s common stock. SFH was owned primarily by a private equity fund managed by an affiliate of Fortress. On January 3, 2018, the Apollo-Värde Group entered into a Share Purchase Agreement with SFH and the Company to acquire from SFH 54,937,500 shares of OMH common stock, par value $0.01 per share, at a purchase price per share of $26.00, representing the entire holdings of our stock beneficially owned by Fortress. This transaction closed on June 25, 2018 for an aggregate purchase price of approximately $1.4 billion in cash. The Share Purchase Agreement was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on January 4, 2018. Upon closing of the Apollo-Värde Transaction, we entered into an Amended and Restated Stockholders’ Agreement, the terms of which are described in our Current Report on Form 8-K, filed with the SEC on June 25, 2018. As disclosed in Note 21 of the Notes to Consolidated Financial Statements in Part II - Item 8 included in our 2017 Annual Report on Form 10-K, certain executives of the Company had previously been granted incentive units that only provide benefits (in the form of distributions) if SFH makes distributions to one or more of its common members that exceed specified amounts. In connection with the Apollo-Värde Transaction, certain executive officers who are holders of SFH incentive units received a distribution of approximately $106 million in the aggregate from SFH as a result of their ownership interests in SFH. Although the distribution was not made by the Company or its subsidiaries, in accordance with ASC Topic 710, Compensation-General, we recorded non-cash incentive compensation expense of approximately $106 million, with an equal and offsetting increase to additional paid-in-capital. The impact to the Company was non-cash, equity neutral and not tax deductible. On February 21, 2018, OMH entered into an underwriting agreement among OMH, SFH and Morgan Stanley & Co. LLC as underwriter in connection with the sale by SFH of 4,179,678 shares of its common stock. These shares were beneficially owned by AIG Capital Corporation (“AIG”), a subsidiary of American International Group, Inc., and represented the entire holdings of our stock beneficially owned by AIG. In connection with this sale of our common stock by SFH, certain executive officers who are holders of SFH incentive units, as described above, received a distribution of approximately $4 million in the first quarter of 2018. Consistent with the accounting for distribution from the Apollo-Värde Transaction described above, the Company recognized non-cash incentive compensation expense of approximately $4 million, with an equal and offsetting increase to additional paid-in-capital. Again, the impact to the Company was non-cash, equity neutral and not tax deductible. At June 30, 2018, the Apollo-Värde Group owned approximately 40.5% of OMH’s common stock. OMH is a financial services holding company whose principal subsidiary is SFI. SFI’s principal subsidiary is SFC. On June 22, 2018, SFI entered into a contribution agreement with OMH, whereby OMH contributed all of the common interests of Independence to SFI. Immediately thereafter, SFI entered into a separate contribution agreement with SFC, pursuant to which SFI contributed all of the common interests of Independence to SFC. As a result of the contribution from SFI to SFC, Independence became a wholly owned direct subsidiary of SFC on June 22, 2018. Independence, through its wholly owned subsidiary OMFH and OMFH’s subsidiaries, and SFC engage in the consumer finance and insurance businesses. BASIS OF PRESENTATION We prepared our condensed consolidated financial statements using GAAP. These statements are unaudited. The year-end condensed balance sheet data was derived from our audited financial statements but does not include all disclosures required by GAAP. The statements include the accounts of OMH, its subsidiaries (all of which are wholly owned), and VIEs in which we hold a controlling financial interest and for which we are considered to be the primary beneficiary as of the financial statement date. We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our condensed consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of results. Ultimate results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date. To conform to the 2018 presentation, we have reclassified certain items in prior periods of our condensed consolidated financial statements. The condensed consolidated financial statements in this report should be read in conjunction with the consolidated financial statements and related notes included in our 2017 Annual Report on Form 10-K. We follow the same significant accounting policies for our interim reporting, except for the new accounting pronouncements subsequently adopted and disclosed in Note 2 below. |
Recent Accounting Pronouncements |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Revenue Recognition In May of 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which provides a consistent revenue accounting model across industries. Management has reviewed this update and other ASUs that were subsequently issued to further clarify the implementation guidance outlined in ASU 2014-09. The Company’s implementation efforts included the identification of revenue streams that are within the scope of the new guidance and the review of related contracts with customers to determine their effect on certain non-interest income items presented in our consolidated statements of operations and the additional presentation disclosures required. We concluded that substantially all of the Company’s revenues are generated from activities that are outside the scope of this ASU. We adopted the amendments of this ASU as of January 1, 2018 and concluded they do not have a material impact on our consolidated financial statements. Financial Instruments In January of 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which simplifies the impairment assessment of equity investments. The update requires equity investments to be measured at fair value with changes recognized in net income. This ASU eliminates the requirement to disclose the methods and assumptions to estimate fair value for financial instruments, requires the use of the exit price for disclosure purposes, requires the change in liability due to a change in credit risk to be presented in other comprehensive income for financial liabilities measured under the fair value option, requires separate presentation of financial assets and liabilities by measurement category and form of asset (securities and loans), and clarifies the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. In February of 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments - Overall, which made technical corrections and improvements to the codification, specifically related to ASU 2016-01. The Company has adopted these ASUs as of January 1, 2018 using a cumulative-effect adjustment to the balance sheet. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) shall be applied prospectively to equity investments that exist as of the date of adoption of this update. We adopted all other amendments of these ASUs as of January 1, 2018 and presented this change on a retrospective basis for all periods presented. We concluded that these ASUs do not have a material impact on our consolidated financial statements. In March of 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs, which amends the amortization period for certain purchased callable debt securities held at a premium. This ASU shortens the amortization period for the premium from the adjustment of yield over the contractual life of the instrument to the earliest call date. The amendments in this ASU become effective for the Company for fiscal years beginning January 1, 2019. As the Company’s existing accounting policy was in accordance with the amendments of this ASU, we elected to early adopt as of January 1, 2018 and concluded that it does not have a material impact on our consolidated financial statements. Statement of Cash Flows In August of 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We adopted the amendments of this ASU as of January 1, 2018 and concluded that they do not have a material impact on our consolidated financial statements. Income Taxes In October of 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory, which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. We adopted the amendments of this ASU as of January 1, 2018 and concluded that they do not have a material impact on our consolidated financial statements. In February of 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income: Reclassifications of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits the reclassification of stranded tax effects within accumulated other comprehensive income to retained earnings from the passage of the Tax Act. This update requires additional disclosures describing the nature of the stranded tax effects. The amendments within this ASU become effective for the Company for fiscal years beginning after January 1, 2019, with early adoption permitted. We elected to early adopt as of April 1, 2018 and reclassified $2 million of stranded tax effects resulting in a decrease to retained earnings and an increase to accumulated other comprehensive income. Compensation and Benefits In March of 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, to improve the presentation of the net periodic pension cost and net periodic postretirement benefit costs. It requires that a company present the service cost component separately from other components of net benefit cost on the income statement. We adopted the amendments of this ASU as of January 1, 2018 and concluded that they do not have a material impact on our consolidated financial statements. In May of 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, which provides guidance on which changes to the terms or conditions of a share-based payment award requires an entity to apply modification accounting. We adopted the amendments of this ASU as of January 1, 2018 and concluded that they do not have a material impact on our consolidated financial statements. Goodwill Impairment In January of 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment, which simplifies the test for goodwill impairment by eliminating Step 2 of the impairment testing process. The amendments in this ASU will become effective for the Company for fiscal years beginning January 1, 2020. We elected to early adopt as of January 1, 2018 and concluded that it does not have a material impact on our consolidated financial statements. ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED Leases In February of 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to recognize a right-of-use asset and a liability for the obligation to make payments on leases with terms greater than 12 months and to disclose information related to the amount, timing and uncertainty of cash flows arising from leases, including various qualitative and quantitative requirements. Management has reviewed this update and other ASUs that were subsequently issued to further clarify the implementation guidance outlined in ASU 2016-02. The amendments in this ASU become effective for the Company for fiscal years beginning January 1, 2019. The Company’s cross-functional implementation team continues to make progress in line with the established project plan to ensure we comply with all updates from this ASU at the time of adoption. We are currently in the process of implementing a new leasing system that will allow us to better account for the leases in accordance with the new guidance. We are assessing new system updates to ensure both qualitative and quantitative data requirements will be met at the time of adoption. The Company’s leases primarily consist of leased office space, automobiles and information technology equipment. At December 31, 2017, the Company had approximately $180 million of minimum lease commitments from these operating leases (refer to Note 19 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our 2017 Annual Report on Form 10-K). The adoption of this ASU will result in an increase in our reported assets and liabilities on the consolidated balance sheets due to the recognition of the right-of-use asset and lease liability, and we are in the process of quantifying the expected impact. Allowance for Finance Receivables Losses In June of 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, which significantly changes the way that entities will be required to measure credit losses. The new standard requires that the estimated credit loss be based upon an “expected credit loss” approach rather than the “incurred loss” approach currently required. The new approach will require entities to measure all expected credit losses for financial assets based on historical experience, current conditions, and reasonable forecasts of collectability. It is anticipated that the expected credit loss model will require earlier recognition of credit losses than the incurred loss approach. Therefore, we would expect changes in the allowance for finance receivable losses will be driven primarily by the nature and growth of the Company’s loan portfolio and the economic environment at that time. The ASU requires that credit losses for purchased financial assets with a more-than-insignificant amount of credit deterioration since origination that are measured at amortized cost basis be determined in a similar manner to other financial assets measured at amortized cost basis; however, the initial allowance for credit losses is added to the purchase price of the financial asset rather than being reported as a credit loss expense. Subsequent changes in the allowance for credit losses are recorded in earnings. Interest income should be recognized based on the effective rate, excluding the discount embedded in the purchase price attributable to expected credit losses at acquisition. The ASU also requires companies to record allowances for held-to-maturity and available-for-sale debt securities rather than write-downs of such assets. In addition, the ASU requires qualitative and quantitative disclosures that provide information about the allowance and the significant factors that influenced management’s estimate of the allowance. The ASU will become effective for the Company for fiscal years beginning January 1, 2020. Early adoption is permitted for fiscal years beginning January 1, 2019. The Company’s cross-functional implementation team continues to make progress in line with the established project plan to ensure we comply with all updates from this ASU at the time of adoption. We continue to refine the development of an acceptable model to estimate the expected credit losses. After the model has been reviewed and validated in accordance with our governance policies, the Company will provide further disclosure regarding the estimated impact on our allowance for finance receivables losses. In addition to the development of the model, we are assessing the additional disclosure requirements from this update and the impact the adoption may have on any available-for-sale securities held by the Company. We believe the adoption of this ASU will have a material effect on our consolidated financial statements through an increase to the allowance for finance receivable losses and a corresponding one-time cumulative effect reduction to retained earnings in the consolidated balance sheet as of the beginning of the year of adoption. We are in the process of quantifying the expected impacts. We do not believe that any other accounting pronouncements issued during the six months ended June 30, 2018, but not yet effective, would have a material impact on our consolidated financial statements or disclosures, if adopted. |
Finance Receivables |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance Receivables | Finance Receivables Our finance receivable types include personal loans and other receivables as defined below:
Beginning in 2018, we combined real estate and retail sales finance loans into “Other Receivables.” Previously, we presented real estate and retail sales finance loans as distinct receivable types. In order to conform to this new alignment, we have revised our prior period finance receivable disclosures. Components of net finance receivables held for investment by type were as follows:
At June 30, 2018 and December 31, 2017, unused lines of credit extended to customers by the Company were immaterial. CREDIT QUALITY INDICATOR We consider the value and concentration of secured loans and the delinquency status of our finance receivables as our primary credit quality indicators. At June 30, 2018 and December 31, 2017, 44% and 43% of our personal loans were secured by titled collateral, respectively. We monitor delinquency trends to manage our exposure to credit risk. When finance receivables are 60 days contractually past due, we consider these accounts to be at an increased risk for loss and we transfer collection of these accounts to our centralized operations. At 90 days or more contractually past due, we consider our finance receivables to be nonperforming. The following is a summary of net finance receivables held for investment by type and by number of days delinquent:
PURCHASED CREDIT IMPAIRED FINANCE RECEIVABLES Our purchased credit impaired finance receivables consist of receivables purchased in connection with the OneMain Acquisition and the Fortress Acquisition. We report the carrying amount (which initially was the fair value) of our purchased credit impaired finance receivables in net finance receivables, less allowance for finance receivable losses or in finance receivables held for sale as discussed below. At June 30, 2018 and December 31, 2017, finance receivables held for sale totaled $123 million and $132 million, respectively, which include purchased credit impaired finance receivables, as well as TDR finance receivables. Therefore, we are presenting the financial information for our purchased credit impaired finance receivables and TDR finance receivables combined for finance receivables held for investment and finance receivables held for sale in the tables below. See Note 5 for further information on our finance receivables held for sale. Information regarding our purchased credit impaired finance receivables held for investment and held for sale were as follows:
The allowance for purchased credit impaired finance receivable losses reflects the carrying value of the purchased credit impaired loans held for investment being higher than the present value of the expected cash flows. Changes in accretable yield for purchased credit impaired finance receivables held for investment and held for sale were as follows:
estimated undiscounted cash flows. TDR FINANCE RECEIVABLES Information regarding TDR finance receivables held for investment and held for sale were as follows:
As of June 30, 2018, we had no commitments to lend additional funds on our TDR finance receivables. TDR average net receivables held for investment and held for sale and finance charges recognized on TDR finance receivables held for investment and held for sale were as follows:
* Other Receivables held for sale included in the table above were as follows:
Information regarding the new volume of the TDR finance receivables held for investment and held for sale were as follows:
Personal loans held for investment that were modified as TDR personal loans within the previous 12 months and for which there was a default during the period to cause the TDR personal loans to be considered nonperforming (90 days or more past due) were as follows:
TDR other receivables for the three and six months ended June 30, 2018 and 2017 that defaulted during the previous 12-month period were immaterial. |
Allowance for Finance Receivable Losses |
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Allowance for Finance Receivable Losses | Allowance for Finance Receivable Losses Changes in the allowance for finance receivable losses by finance receivable type were as follows:
The allowance for finance receivable losses and net finance receivables by type and by impairment method were as follows:
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Finance Receivables Held for Sale |
6 Months Ended |
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Jun. 30, 2018 | |
Receivables Held-for-sale [Abstract] | |
Finance Receivables Held for Sale | Finance Receivables Held for Sale We reported finance receivables held for sale of $123 million at June 30, 2018 and $132 million at December 31, 2017, which are carried at the lower of cost or fair value and consist entirely of real estate loans. At June 30, 2018 and December 31, 2017, the fair value of our finance receivables held for sale exceeded the cost. We used the aggregate basis to determine the lower of cost or fair value of finance receivables held for sale. We did not have any material transfers to or from finance receivables held for sale during the three and six months ended June 30, 2018 and 2017. |
Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities AVAILABLE-FOR-SALE SECURITIES Cost/amortized cost, unrealized gains and losses, and fair value of fixed maturity available-for-sale securities by type were as follows:
Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position were as follows:
On a lot basis, we had 1,872 and 1,229 investment securities in an unrealized loss position at June 30, 2018 and December 31, 2017, respectively. We do not consider the unrealized losses to be credit-related, as these unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase. Additionally, at June 30, 2018, we had no plans to sell any investment securities with unrealized losses, and we believe it is more likely than not that we would not be required to sell such investment securities before recovery of their amortized cost. We continue to monitor unrealized loss positions for potential impairments. During the three months ended June 30, 2018, we did not recognize any other-than-temporary impairment credit losses and during the six months ended June 30, 2018 we recognized less than $1 million of other-than-temporary impairment credit losses on our available-for-sale securities in investment revenues. During the three and six months ended June 30, 2017, we did not recognize any other-than-temporary impairment credit losses on our available-for-sale securities in investment revenues. During the three and six months ended June 30, 2018 and 2017, there were no material additions or reductions in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities. The proceeds of available-for-sale securities sold or redeemed and the resulting net realized gains were as follows:
Contractual maturities of fixed-maturity available-for-sale securities at June 30, 2018 were as follows:
Actual maturities may differ from contractual maturities since issuers and borrowers may have the right to call or prepay obligations. We may sell investment securities before maturity for general corporate and working capital purposes and to achieve certain investment strategies. The fair value of securities on deposit with third parties totaled $500 million and $537 million at June 30, 2018 and December 31, 2017, respectively. OTHER SECURITIES The fair value of other securities by type was as follows:
Net unrealized losses on other securities held at June 30, 2018 and 2017, were less than $1 million and $3 million for the three and six months ended June 30, 2018, respectively, and were less than $1 million for the three and six months ended June 30, 2017. Net realized gains and losses on other securities sold or redeemed during the 2018 and 2017 periods were immaterial for the three and six months ended June 30, 2018 and 2017. We report these gains and losses in investment revenues. |
Transactions with Affiliates |
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Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | Transactions with Affiliates Upon closing of the Apollo-Värde Transaction, on June 25, 2018, Fortress and its affiliates are no longer considered related-parties or affiliates. See Note 1 for additional information regarding the Apollo-Värde Transaction. SUBSERVICING AGREEMENT Nationstar subservices the real estate loans of certain of our indirect subsidiaries. Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. The subservicing fees paid to Nationstar, prior to the closing of the Apollo-Värde Transaction, were immaterial for the three and six months ended June 30, 2018 and 2017. SERVICING AGREEMENT In 2016, we sold our equity interest in the SpringCastle Joint Venture, which owns the SpringCastle Portfolio, to certain subsidiaries of NRZ and Blackstone. NRZ is managed by an affiliate of Fortress. Unless we are terminated, we will continue as the servicer of the SpringCastle Portfolio for the SpringCastle Funding Trust pursuant to a servicing agreement. Prior to the closing of the Apollo-Värde Transaction, servicing fees revenue totaled $8 million and $16 million for the three and six months ended June 30, 2018, respectively, compared to $10 million and $20 million for the three and six months ended June 30, 2017, respectively. At June 30, 2018 and December 31, 2017, the servicing fees receivable from the SpringCastle Funding Trust that were incurred prior to the closing of the Apollo-Värde Transaction totaled $2 million and $3 million, respectively. |
Long-term Debt |
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Long-term Debt | Long-term Debt Principal maturities of long-term debt (excluding projected repayments on securitizations and revolving conduit facilities by period) by type of debt at June 30, 2018 were as follows:
SFC’S OFFERING OF 7.125% SENIOR NOTES DUE 2026 On May 11, 2018, SFC issued $900 million aggregate principal amount of 7.125% Senior Notes due 2026 (the “7.125% SFC Notes”) under the SFC Senior Notes Indentures, pursuant to which OMH provided a guarantee of the 7.125% SFC Notes on an unsecured basis. SFC used a portion of the net proceeds from this offering to redeem the remaining $400 million in aggregate principal amount of the OMFH 7.25% Senior Notes due 2021 and will use the remaining proceeds for other general corporate purposes, which may include other debt repurchases and repayments. SFC’S OFFERING OF 6.875% SENIOR NOTES DUE 2025 On March 12, 2018, SFC issued $1.25 billion aggregate principal amount of 6.875% Senior Notes due 2025 (the “6.875% SFC Notes”) under the SFC Senior Notes Indentures, pursuant to which OMH provided a guarantee of the 6.875% SFC Notes on an unsecured basis. SFC used the net proceeds from the sale of the 6.875% SFC Notes for general corporate purposes, which included debt repurchases. The 6.875% and 7.125% SFC Notes are SFC’s senior unsecured obligations and rank equally in right of payment to all of SFC’s other existing and future unsubordinated indebtedness from time to time outstanding. The notes are effectively subordinated to all of SFC’s secured obligations to the extent of the value of the assets securing such obligations and structurally subordinated to any existing and future obligations of SFC’s subsidiaries with respect to claims against the assets of such subsidiaries. The notes may be redeemed at any time and from time to time, at the option of SFC, in whole or in part at a “make-whole” redemption price specified in the SFC Senior Notes Indentures. The notes will not have the benefit of any sinking fund. GUARANTY AGREEMENTS OMH entered into the SFC Base Indenture and the following SFC supplemental indentures, pursuant to which OMH agreed to fully and unconditionally guarantee, on a senior unsecured basis the payments of principal, premium (if any) and interest on the following notes:
The supplemental indentures listed above contain covenants that, among other things, (i) limit SFC’s ability to create liens on assets and (ii) restrict SFC’s ability to consolidate, merge or sell its assets. The SFC Senior Notes Indentures also provide for events of default which, if any of them were to occur, would permit or require the principal of and accrued interest on the SFC Notes to become, or to be declared, due and payable. We describe our guarantee agreements in Note 12 of the Notes to Consolidated Financial Statements in Part II - Item 8 included in our 2017 Annual Report on Form 10-K. Other SFC Notes On December 30, 2013, OMH entered into SFC Guaranty Agreements whereby it agreed to fully and unconditionally guarantee the payments of principal, premium (if any) and interest on the Other SFC Notes. The Other SFC Notes consisted of the following:
The Junior Subordinated Debenture underlies the trust preferred securities sold by a trust sponsored by SFC. On December 30, 2013, OMH entered into the SFC Trust Guaranty Agreement whereby it agreed to fully and unconditionally guarantee the related payment obligations under the trust preferred securities. As of June 30, 2018, $1.6 billion aggregate principal amount of the Other SFC Notes were outstanding. The OMH guarantees of SFC’s long-term debt discussed above are subject to customary release provisions. OMFH Notes On December 11, 2014, OMFH and certain of its subsidiaries entered into the OMFH Indenture, among OMFH, the guarantors listed therein and The Bank of New York Mellon, as trustee, in connection with OMFH’s issuance of the OMFH Notes. The OMFH Notes are OMFH’s unsecured senior obligations, guaranteed on a senior unsecured basis by each of its wholly owned domestic subsidiaries, other than certain subsidiaries, including its insurance subsidiaries and securitization subsidiaries. On November 8, 2016, OMH entered into the OMFH Supplemental Indenture, pursuant to which OMH agreed to fully, unconditionally and irrevocably guarantee the outstanding OMFH Notes in accordance with and subject to the terms of the OMFH Indenture. Further, as permitted by the terms of the OMFH Indenture up to the point of redemption of the OMFH Notes described below, OMFH satisfied its reporting obligations under the OMFH Indenture with respect to providing OMFH financial information to the holders of the OMFH Notes by furnishing financial information relating to the Company. On December 8, 2017, OMFH provided notice to note holders to redeem on January 8, 2018, all $700 million outstanding principal amount of OMFH Notes due 2019 at a redemption price equal to 103.375%, plus accrued and unpaid interest to the redemption date. The notes were redeemed on January 8, 2018. In connection with the redemption, we recognized $1 million of net loss on repurchases and repayments of debt for the six months ended June 30, 2018. On March 19, 2018, OMFH provided notice to note holders to redeem $400 million in aggregate principal amount of OMFH Notes due 2021 on April 18, 2018, at a redemption price in cash equal to 103.625%, plus accrued and unpaid interest to the redemption date. The notes were redeemed on April 18, 2018. In connection with the redemption, we recognized $4 million of net loss on repurchases and repayments of debt for the six months ended June 30, 2018. On May 14, 2018, OMFH provided notice to note holders to redeem the remaining $400 million in aggregate principal amount of OMFH Notes due 2021 on June 13, 2018, at a redemption price in cash equal to 103.625%, plus accrued and unpaid interest to the redemption date. In connection with the redemption, we recognized $3 million of net loss on repurchases and repayments of debt for the six months ended June 30, 2018. On June 13, 2018, OMFH redeemed the remaining principal amount of the OMFH Notes due 2021 and received notice of satisfaction and discharge with respect to the OMFH Notes. As of June 30, 2018, OMFH is no longer subject to the covenants or other terms of the OMFH Indenture. |
Variable Interest Entities |
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Variable Interest Entities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities CONSOLIDATED VIES As part of our overall funding strategy, we have transferred certain finance receivables to VIEs for asset-backed financing transactions, including securitization and conduit transactions. We have determined that we are the primary beneficiary of these VIEs and, as a result, we include each VIE’s assets, including any finance receivables securing the VIE’s debt obligations, and related liabilities in our consolidated financial statements and each VIE’s asset-backed debt obligations are accounted for as secured borrowings. See Note 3 and Note 13 of the Notes to Consolidated Financial Statements in Part II - Item 8 included in our 2017 Annual Report on Form 10-K for more detail regarding VIEs. We parenthetically disclose on our consolidated balance sheets the VIE’s assets that can only be used to settle the VIE’s obligations and liabilities if its creditors have no recourse against the primary beneficiary’s general credit. The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts were as follows:
SECURITIZED BORROWINGS Each of our securitizations contains a revolving period ranging from one to five years during which no principal payments are required to be made on the related asset-backed notes, except for the ODART 2016-1 securitization which has no revolving period. The indentures governing our securitization borrowings contain early amortization events and events of default, that, if triggered, may result in the acceleration of the obligation to pay principal and interest on the related asset-backed notes. Our securitized borrowings at June 30, 2018 consisted of the following:
REVOLVING CONDUIT FACILITIES As of June 30, 2018, our borrowings under conduit facilities consisted of the following:
VIE INTEREST EXPENSE Other than the retained subordinate and residual interests in our consolidated VIEs, we are under no further obligation than is otherwise noted herein, either contractually or implicitly, to provide financial support to these entities. Consolidated interest expense related to our VIEs for the three and six months ended June 30, 2018 totaled $87 million and $173 million, compared to $78 million and $158 million for the three and six months ended June 30, 2017. |
Insurance |
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Insurance | Insurance Changes in the reserve for unpaid claims and loss adjustment expenses (not considering reinsurance recoverable) were as follows:
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Earnings Per Share |
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Earnings Per Share | Earnings Per Share The computation of earnings per share was as follows:
* We have excluded the following shares in the diluted earnings per share calculation for the three and six months ended June 30, 2018 and 2017 because these shares would be anti-dilutive, which could impact the earnings per share calculation in the future:
Basic earnings per share is computed by dividing net income by the weighted-average number of shares outstanding during each period. Diluted earnings per share is computed based on the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares represent outstanding unvested RSUs and RSAs. |
Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Changes, net of tax, in accumulated other comprehensive income (loss) were as follows:
Reclassification adjustments from accumulated other comprehensive income (loss) to the applicable line item on our condensed consolidated statements of operations were as follows:
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Income Taxes |
6 Months Ended |
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Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We had a net deferred tax asset of $142 million and $143 million at June 30, 2018 and December 31, 2017, respectively. The effective tax rate for the six months ended June 30, 2018 was 38.0%, compared to 39.0% for the same period in 2017. The effective tax rate for the six months ended June 30, 2018 differed from the federal statutory rate of 21% primarily due to the effect of discrete tax expense for non-deductible compensation and state income taxes. The effective tax rate for the six months ended June 30, 2017 differed from the then-applicable federal statutory rate of 35% primarily due to the effect of state income taxes and discrete expense from share-based compensation. We are currently under examination of our U.S. federal tax return for the years 2012 and 2013 by the IRS. We are also under examination of various states for the years 2011 to 2016. Management believes it has adequately provided for taxes for such years. Our gross unrecognized tax benefits, including related interest and penalties, totaled $16 million at June 30, 2018 and $15 million at December 31, 2017. We accrue interest related to uncertain tax positions in income tax expense. The amount of any change in the balance of uncertain tax liabilities over the next 12 months is not expected to be material to our consolidated financial statements. On December 22, 2017, President Trump signed into law the Tax Act, which contains substantial changes to the Internal Revenue Code effective January 1, 2018, including a reduction in the federal corporate tax rate from 35% to 21%. |
Contingencies |
6 Months Ended |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies LEGAL CONTINGENCIES In the normal course of business, we have been named, from time to time, as defendants in various legal actions, including arbitrations, class actions and other litigation arising in connection with our activities. Some of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. While we will continue to evaluate legal actions to determine whether a loss is reasonably possible or probable and is reasonably estimable, there can be no assurance that material losses will not be incurred from pending, threatened or future litigation, investigations, examinations, or other claims. We contest liability and/or the amount of damages, as appropriate, in each pending matter. Where available information indicates that it is probable that a liability had been incurred at the date of the condensed consolidated financial statements and we can reasonably estimate the amount of that loss, we accrue the estimated loss by a charge to income. In many actions, however, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the amount of any loss. In addition, even where loss is reasonably possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss. For certain legal actions, we cannot reasonably estimate such losses, particularly for actions that are in their early stages of development or where plaintiffs seek substantial or indeterminate damages. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal questions relevant to the actions in question, before a loss or additional loss or range of loss or additional loss can be reasonably estimated for any given action. For certain other legal actions, we can estimate reasonably possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued, but do not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on our condensed consolidated financial statements as a whole. Federal Securities Class Actions On February 10, 2017, a putative class action lawsuit, Galestan v. OneMain Holdings, Inc., et al., was filed in the U.S. District Court for the Southern District of New York, naming as defendants the Company and two of its officers. The lawsuit alleges violations of the Exchange Act for allegedly making materially misleading statements and/or omitting material information concerning alleged integration issues after the OneMain Acquisition in November 2015, and was filed on behalf of a putative class of persons who purchased or otherwise acquired the Company’s common stock between February 25, 2016 and November 7, 2016. The complaint seeks an award of unspecified compensatory damages, an award of interest, reasonable attorney’s fees, expert fees and other costs, and equitable relief as the court may deem just and proper. On March 23, 2017, the court appointed a lead plaintiff for the putative class and approved the lead plaintiff’s selection of counsel. The plaintiff filed an amended complaint on June 13, 2017 challenging statements regarding the Company’s projections of future financial performance and certain statements regarding integration after the OneMain Acquisition. On September 29, 2017, pursuant to the Court’s Individual Rules and Practices, we sought permission to file a motion to dismiss the amended complaint. The Company believes that the allegations specified in the amended complaint are without merit, and intends to vigorously defend against the claims. As the lawsuit is in the preliminary stages, the Company is unable to estimate a reasonably possible range of loss, if any, that may result from the lawsuit. SALES RECOURSE OBLIGATIONS At June 30, 2018, our reserve for sales recourse obligations totaled $8 million, which primarily related to our real estate loan sales in 2014, with a minimal portion of the reserve related to net charge-off sales of our finance receivables. During the three and six months ended June 30, 2018 and 2017, we had no material repurchase activity related to these sales and no material activity related to our sales recourse obligations. At June 30, 2018, there were no material recourse requests with loss exposure that management believed would not be covered by the reserve. However, we will continue to monitor any repurchase activity in the future and will adjust the reserve accordingly. When recourse losses are reasonably possible or exposure to such losses exists in excess of the liability already accrued, it is not always possible to reasonably estimate the size of the possible recourse losses or range of losses. |
Benefit Plans |
6 Months Ended |
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Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans During the three and six months ended June 30, 2018 and 2017, the components of net periodic benefit cost with respect to our defined benefit pension plans were immaterial. We do not currently fund post retirement benefits. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Our segments coincide with how our businesses are managed. At June 30, 2018, our two segments were Consumer and Insurance and Acquisitions and Servicing. The remaining components (which we refer to as “Other”) consist of our non-originating legacy operations, which include our liquidating real estate loan portfolio and our liquidating retail sales finance portfolio. Due to the nature of the OneMain Acquisition and the Fortress Acquisition, we applied purchase accounting. However, we report the operating results of Consumer and Insurance, Acquisitions and Servicing, and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for certain costs, primarily interest expense, loan loss reserves, and acquisition costs to reflect the manner in which we assess our business results and (ii) excludes the impact of applying purchase accounting (eliminates premiums/discounts on our finance receivables and long-term debt at acquisition, as well as the amortization/accretion in future periods). The accounting policies of the segments are the same as those disclosed in Note 3 and Note 22 of the Notes to Consolidated Financial Statements in Part II - Item 8 included in our 2017 Annual Report on Form 10-K. The following tables present information about the Company’s segments, as well as reconciliations to the condensed consolidated financial statement amounts.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The fair value of a financial instrument is the amount that would be expected to be received if an asset were to be sold or the amount that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The degree of judgment used in measuring the fair value of financial instruments generally correlates with the level of pricing observability. The accounting policies of our Fair Value Measurements are the same as those disclosed in Note 3 and Note 23 of the Notes to Consolidated Financial Statements in Part II - Item 8 included in our 2017 Annual Report on Form 10-K. The following table presents the carrying amounts and estimated fair values of our financial instruments and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:
FAIR VALUE MEASUREMENTS — RECURRING BASIS The following tables present information about our assets measured at fair value on a recurring basis and indicates the fair value hierarchy based on the levels of inputs we utilized to determine such fair value:
We had no transfers between Level 1 and Level 2 during the three and six months ended June 30, 2018. FAIR VALUE MEASUREMENTS — NON-RECURRING BASIS We measure the fair value of certain assets on a non-recurring basis when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Net impairment charges recorded on assets measured at fair value on a non-recurring basis were immaterial for the three and six months ended June 30, 2018 and 2017. FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS See Note 23 of the Notes to Consolidated Financial Statements in Part II - Item 8 included in our 2017 Annual Report on Form 10-K for information regarding our methods and assumptions used to estimate fair value. |
Business and Basis of Presentation (Policies) |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION We prepared our condensed consolidated financial statements using GAAP. These statements are unaudited. The year-end condensed balance sheet data was derived from our audited financial statements but does not include all disclosures required by GAAP. The statements include the accounts of OMH, its subsidiaries (all of which are wholly owned), and VIEs in which we hold a controlling financial interest and for which we are considered to be the primary beneficiary as of the financial statement date. We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our condensed consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of results. Ultimate results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date. To conform to the 2018 presentation, we have reclassified certain items in prior periods of our condensed consolidated financial statements. The condensed consolidated financial statements in this report should be read in conjunction with the consolidated financial statements and related notes included in our 2017 Annual Report on Form 10-K. We follow the same significant accounting policies for our interim reporting, except for the new accounting pronouncements subsequently adopted and disclosed in Note 2 below. |
ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED AND TO BE ADOPTED | ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Revenue Recognition In May of 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which provides a consistent revenue accounting model across industries. Management has reviewed this update and other ASUs that were subsequently issued to further clarify the implementation guidance outlined in ASU 2014-09. The Company’s implementation efforts included the identification of revenue streams that are within the scope of the new guidance and the review of related contracts with customers to determine their effect on certain non-interest income items presented in our consolidated statements of operations and the additional presentation disclosures required. We concluded that substantially all of the Company’s revenues are generated from activities that are outside the scope of this ASU. We adopted the amendments of this ASU as of January 1, 2018 and concluded they do not have a material impact on our consolidated financial statements. Financial Instruments In January of 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which simplifies the impairment assessment of equity investments. The update requires equity investments to be measured at fair value with changes recognized in net income. This ASU eliminates the requirement to disclose the methods and assumptions to estimate fair value for financial instruments, requires the use of the exit price for disclosure purposes, requires the change in liability due to a change in credit risk to be presented in other comprehensive income for financial liabilities measured under the fair value option, requires separate presentation of financial assets and liabilities by measurement category and form of asset (securities and loans), and clarifies the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. In February of 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments - Overall, which made technical corrections and improvements to the codification, specifically related to ASU 2016-01. The Company has adopted these ASUs as of January 1, 2018 using a cumulative-effect adjustment to the balance sheet. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) shall be applied prospectively to equity investments that exist as of the date of adoption of this update. We adopted all other amendments of these ASUs as of January 1, 2018 and presented this change on a retrospective basis for all periods presented. We concluded that these ASUs do not have a material impact on our consolidated financial statements. In March of 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs, which amends the amortization period for certain purchased callable debt securities held at a premium. This ASU shortens the amortization period for the premium from the adjustment of yield over the contractual life of the instrument to the earliest call date. The amendments in this ASU become effective for the Company for fiscal years beginning January 1, 2019. As the Company’s existing accounting policy was in accordance with the amendments of this ASU, we elected to early adopt as of January 1, 2018 and concluded that it does not have a material impact on our consolidated financial statements. Statement of Cash Flows In August of 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We adopted the amendments of this ASU as of January 1, 2018 and concluded that they do not have a material impact on our consolidated financial statements. Income Taxes In October of 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory, which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. We adopted the amendments of this ASU as of January 1, 2018 and concluded that they do not have a material impact on our consolidated financial statements. In February of 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income: Reclassifications of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits the reclassification of stranded tax effects within accumulated other comprehensive income to retained earnings from the passage of the Tax Act. This update requires additional disclosures describing the nature of the stranded tax effects. The amendments within this ASU become effective for the Company for fiscal years beginning after January 1, 2019, with early adoption permitted. We elected to early adopt as of April 1, 2018 and reclassified $2 million of stranded tax effects resulting in a decrease to retained earnings and an increase to accumulated other comprehensive income. Compensation and Benefits In March of 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, to improve the presentation of the net periodic pension cost and net periodic postretirement benefit costs. It requires that a company present the service cost component separately from other components of net benefit cost on the income statement. We adopted the amendments of this ASU as of January 1, 2018 and concluded that they do not have a material impact on our consolidated financial statements. In May of 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, which provides guidance on which changes to the terms or conditions of a share-based payment award requires an entity to apply modification accounting. We adopted the amendments of this ASU as of January 1, 2018 and concluded that they do not have a material impact on our consolidated financial statements. Goodwill Impairment In January of 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment, which simplifies the test for goodwill impairment by eliminating Step 2 of the impairment testing process. The amendments in this ASU will become effective for the Company for fiscal years beginning January 1, 2020. We elected to early adopt as of January 1, 2018 and concluded that it does not have a material impact on our consolidated financial statements. ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED Leases In February of 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to recognize a right-of-use asset and a liability for the obligation to make payments on leases with terms greater than 12 months and to disclose information related to the amount, timing and uncertainty of cash flows arising from leases, including various qualitative and quantitative requirements. Management has reviewed this update and other ASUs that were subsequently issued to further clarify the implementation guidance outlined in ASU 2016-02. The amendments in this ASU become effective for the Company for fiscal years beginning January 1, 2019. The Company’s cross-functional implementation team continues to make progress in line with the established project plan to ensure we comply with all updates from this ASU at the time of adoption. We are currently in the process of implementing a new leasing system that will allow us to better account for the leases in accordance with the new guidance. We are assessing new system updates to ensure both qualitative and quantitative data requirements will be met at the time of adoption. The Company’s leases primarily consist of leased office space, automobiles and information technology equipment. At December 31, 2017, the Company had approximately $180 million of minimum lease commitments from these operating leases (refer to Note 19 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our 2017 Annual Report on Form 10-K). The adoption of this ASU will result in an increase in our reported assets and liabilities on the consolidated balance sheets due to the recognition of the right-of-use asset and lease liability, and we are in the process of quantifying the expected impact. Allowance for Finance Receivables Losses In June of 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, which significantly changes the way that entities will be required to measure credit losses. The new standard requires that the estimated credit loss be based upon an “expected credit loss” approach rather than the “incurred loss” approach currently required. The new approach will require entities to measure all expected credit losses for financial assets based on historical experience, current conditions, and reasonable forecasts of collectability. It is anticipated that the expected credit loss model will require earlier recognition of credit losses than the incurred loss approach. Therefore, we would expect changes in the allowance for finance receivable losses will be driven primarily by the nature and growth of the Company’s loan portfolio and the economic environment at that time. The ASU requires that credit losses for purchased financial assets with a more-than-insignificant amount of credit deterioration since origination that are measured at amortized cost basis be determined in a similar manner to other financial assets measured at amortized cost basis; however, the initial allowance for credit losses is added to the purchase price of the financial asset rather than being reported as a credit loss expense. Subsequent changes in the allowance for credit losses are recorded in earnings. Interest income should be recognized based on the effective rate, excluding the discount embedded in the purchase price attributable to expected credit losses at acquisition. The ASU also requires companies to record allowances for held-to-maturity and available-for-sale debt securities rather than write-downs of such assets. In addition, the ASU requires qualitative and quantitative disclosures that provide information about the allowance and the significant factors that influenced management’s estimate of the allowance. The ASU will become effective for the Company for fiscal years beginning January 1, 2020. Early adoption is permitted for fiscal years beginning January 1, 2019. The Company’s cross-functional implementation team continues to make progress in line with the established project plan to ensure we comply with all updates from this ASU at the time of adoption. We continue to refine the development of an acceptable model to estimate the expected credit losses. After the model has been reviewed and validated in accordance with our governance policies, the Company will provide further disclosure regarding the estimated impact on our allowance for finance receivables losses. In addition to the development of the model, we are assessing the additional disclosure requirements from this update and the impact the adoption may have on any available-for-sale securities held by the Company. We believe the adoption of this ASU will have a material effect on our consolidated financial statements through an increase to the allowance for finance receivable losses and a corresponding one-time cumulative effect reduction to retained earnings in the consolidated balance sheet as of the beginning of the year of adoption. We are in the process of quantifying the expected impacts. We do not believe that any other accounting pronouncements issued during the six months ended June 30, 2018, but not yet effective, would have a material impact on our consolidated financial statements or disclosures, if adopted. |
SEGMENT INFORMATION | Our segments coincide with how our businesses are managed. At June 30, 2018, our two segments were Consumer and Insurance and Acquisitions and Servicing. The remaining components (which we refer to as “Other”) consist of our non-originating legacy operations, which include our liquidating real estate loan portfolio and our liquidating retail sales finance portfolio. Due to the nature of the OneMain Acquisition and the Fortress Acquisition, we applied purchase accounting. However, we report the operating results of Consumer and Insurance, Acquisitions and Servicing, and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for certain costs, primarily interest expense, loan loss reserves, and acquisition costs to reflect the manner in which we assess our business results and (ii) excludes the impact of applying purchase accounting (eliminates premiums/discounts on our finance receivables and long-term debt at acquisition, as well as the amortization/accretion in future periods). The accounting policies of the segments are the same as those disclosed in Note 3 and Note 22 of the Notes to Consolidated Financial Statements in Part II - Item 8 included in our 2017 Annual Report on Form 10-K. |
Finance Receivables (Tables) |
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net finance receivables by type | Components of net finance receivables held for investment by type were as follows:
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Summary of net finance receivables by type and by days delinquent | The following is a summary of net finance receivables held for investment by type and by number of days delinquent:
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Schedule of purchased credit impaired finance receivables held for investment and held for sale | Information regarding our purchased credit impaired finance receivables held for investment and held for sale were as follows:
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Purchased credit impaired FA Loans held for sale | Purchased credit impaired FA Loans held for sale included in the table above were as follows:
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Changes in accretable yield for purchased credit impaired finance receivables held for investment and held for sale | Changes in accretable yield for purchased credit impaired finance receivables held for investment and held for sale were as follows:
estimated undiscounted cash flows. |
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Schedule of information regarding TDR finance receivables | Information regarding TDR finance receivables held for investment and held for sale were as follows:
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TDR finance receivables held for sale | Other Receivables held for sale included in the table above were as follows:
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TDR average net receivables held for investment and held for sale and finance charges recognized on TDR finance receivables held for investment and held for sale | TDR average net receivables held for investment and held for sale and finance charges recognized on TDR finance receivables held for investment and held for sale were as follows:
* Other Receivables held for sale included in the table above were as follows:
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TDR average net receivables held for sale and finance charges recognized on TDR finance receivables held for sale | Other Receivables held for sale included in the table above were as follows:
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Schedule of new volume of the TDR finance receivables held for investment and held for sale | Information regarding the new volume of the TDR finance receivables held for investment and held for sale were as follows:
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Net finance receivables that were modified as TDR finance receivables defaulted within the previous 12 months nonperforming | Personal loans held for investment that were modified as TDR personal loans within the previous 12 months and for which there was a default during the period to cause the TDR personal loans to be considered nonperforming (90 days or more past due) were as follows:
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Allowance for Finance Receivable Losses (Tables) |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the allowance for finance receivable losses by finance receivable type | Changes in the allowance for finance receivable losses by finance receivable type were as follows:
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Schedule of allowance for finance receivable losses and net finance receivables by type and by impairment method | The allowance for finance receivable losses and net finance receivables by type and by impairment method were as follows:
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Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | Cost/amortized cost, unrealized gains and losses, and fair value of fixed maturity available-for-sale securities by type were as follows:
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Schedule of fair value and unrealized losses on investment securities by type and length of time in a continuous unrealized loss position | Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position were as follows:
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Schedule of realized gains, realized losses, and net realized gains due to sale or redemption of fair values of available-for-sale securities | The proceeds of available-for-sale securities sold or redeemed and the resulting net realized gains were as follows:
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Schedule of contractual maturities of fixed-maturity available-for-sale securities | Contractual maturities of fixed-maturity available-for-sale securities at June 30, 2018 were as follows:
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Schedule of fair value of trading securities by type | The fair value of other securities by type was as follows:
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Long-term Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of principal maturities of long-term debt by type of debt | Principal maturities of long-term debt (excluding projected repayments on securitizations and revolving conduit facilities by period) by type of debt at June 30, 2018 were as follows:
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Schedule of long-term debt instruments | OMH entered into the SFC Base Indenture and the following SFC supplemental indentures, pursuant to which OMH agreed to fully and unconditionally guarantee, on a senior unsecured basis the payments of principal, premium (if any) and interest on the following notes:
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Variable Interest Entities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of variable interest entities | As of June 30, 2018, our borrowings under conduit facilities consisted of the following:
Our securitized borrowings at June 30, 2018 consisted of the following:
The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts were as follows:
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Insurance (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the liability for unpaid claims and loss adjustment expenses, net of reinsurance recoverable | Changes in the reserve for unpaid claims and loss adjustment expenses (not considering reinsurance recoverable) were as follows:
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of computation of earnings per share | The computation of earnings per share was as follows:
* We have excluded the following shares in the diluted earnings per share calculation for the three and six months ended June 30, 2018 and 2017 because these shares would be anti-dilutive, which could impact the earnings per share calculation in the future:
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Schedule of antidilutive securities excluded from computation of earnings per share | We have excluded the following shares in the diluted earnings per share calculation for the three and six months ended June 30, 2018 and 2017 because these shares would be anti-dilutive, which could impact the earnings per share calculation in the future:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in accumulated other comprehensive income | Changes, net of tax, in accumulated other comprehensive income (loss) were as follows:
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Schedule of reclassification adjustments from accumulated other comprehensive income | Reclassification adjustments from accumulated other comprehensive income (loss) to the applicable line item on our condensed consolidated statements of operations were as follows:
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of information about the Company's segments as well as reconciliations to consolidated financial statement amounts | The following tables present information about the Company’s segments, as well as reconciliations to the condensed consolidated financial statement amounts.
|
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair values and carrying values of financial instruments and fair value hierarchy based on the level of inputs utilized to determine such fair value | The following table presents the carrying amounts and estimated fair values of our financial instruments and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:
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Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables present information about our assets measured at fair value on a recurring basis and indicates the fair value hierarchy based on the levels of inputs we utilized to determine such fair value:
|
Finance Receivables - Narrative (Details) - Personal loans |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Minimum | |
Finance Receivables | |
Finance receivables, original term (years) | 3 years |
Maximum | |
Finance Receivables | |
Finance receivables, original term (years) | 6 years |
Finance Receivables - Net Finance Receivables by Type (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross receivables | $ 15,339 | $ 14,797 |
Unearned points and fees | (176) | (168) |
Accrued finance charges | 220 | 211 |
Deferred origination costs | 125 | 117 |
Net finance receivables | 15,508 | 14,957 |
Personal loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross receivables | 15,216 | 14,664 |
Unearned points and fees | (176) | (168) |
Accrued finance charges | 219 | 210 |
Deferred origination costs | 125 | 117 |
Net finance receivables | 15,384 | 14,823 |
Other Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross receivables | 123 | 133 |
Unearned points and fees | 0 | 0 |
Accrued finance charges | 1 | 1 |
Deferred origination costs | 0 | 0 |
Net finance receivables | $ 124 | $ 134 |
Finance Receivables - Credit Quality Indicators (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Unlikely to be Collected Financing Receivable | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Threshold period past due for write-off of financing receivable | 60 days | |
Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Threshold period past due for write-off of financing receivable | 90 days | |
Personal loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans pledged as collateral, percentage | 44.00% | 43.00% |
Finance Receivables - Purchased Credit Impaired Finance Receivables HFI and HFS (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Financing Receivable, Impaired [Line Items] | ||
Finance receivables held for sale | $ 123 | $ 132 |
Allowance for purchased credit impaired finance receivable losses | 9 | 15 |
OM Loans | ||
Financing Receivable, Impaired [Line Items] | ||
Carrying amount, net of allowance | 127 | 176 |
Outstanding balance | 180 | 243 |
Allowance for purchased credit impaired finance receivable losses | 0 | 6 |
FA Loans | ||
Financing Receivable, Impaired [Line Items] | ||
Carrying amount, net of allowance | 53 | 57 |
Outstanding balance | 90 | 94 |
Allowance for purchased credit impaired finance receivable losses | 9 | 9 |
Carrying amount | 41 | 44 |
Outstanding balance | $ 68 | $ 72 |
Finance Receivables - Changes in Accretable Yield For Purchased Credit Impaired HFI and HFS (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
OM Loans | ||||
Changes in accretable yield for purchased credit impaired finance receivables | ||||
Balance at beginning of period | $ 49 | $ 48 | $ 47 | $ 59 |
Accretion | (8) | (9) | (14) | (20) |
Reclassifications from (to) nonaccretable difference | 11 | 10 | 19 | 10 |
Balance at end of period | 52 | 49 | 52 | 49 |
FA Loans | ||||
Changes in accretable yield for purchased credit impaired finance receivables | ||||
Balance at beginning of period | 52 | 59 | 53 | 60 |
Accretion | (1) | (2) | (2) | (3) |
Reclassifications from (to) nonaccretable difference | 0 | (2) | 0 | (2) |
Balance at end of period | $ 51 | $ 55 | $ 51 | $ 55 |
Finance Receivables - TDR Finance Receivable HFI and HFS (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Financing Receivable, Modifications [Line Items] | ||
TDR gross finance receivables | $ 513,000,000 | $ 457,000,000 |
TDR net finance receivables | 516,000,000 | 458,000,000 |
Allowance for TDR finance receivable losses | 170,000,000 | 147,000,000 |
Commitment to lend additional funds on TDR finance receivables | 0 | |
Personal loans | ||
Financing Receivable, Modifications [Line Items] | ||
TDR gross finance receivables | 377,000,000 | 318,000,000 |
TDR net finance receivables | 380,000,000 | 318,000,000 |
Allowance for TDR finance receivable losses | 158,000,000 | 135,000,000 |
Other Receivables | ||
Financing Receivable, Modifications [Line Items] | ||
TDR gross finance receivables | 136,000,000 | 139,000,000 |
TDR net finance receivables | 136,000,000 | 140,000,000 |
Allowance for TDR finance receivable losses | 12,000,000 | 12,000,000 |
TDR gross finance receivables | 87,000,000 | 90,000,000 |
TDR net finance receivables | $ 87,000,000 | $ 91,000,000 |
Finance Receivables - TDR average net receivables HFI and HFS and finance charges recognized (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Financing Receivable, Modifications [Line Items] | ||||
TDR average net receivables | $ 504 | $ 337 | $ 490 | $ 313 |
TDR finance charges recognized | 13 | 11 | 26 | 19 |
TDR average net receivables | 89 | 90 | ||
TDR finance charges recognized | 3 | 3 | ||
Personal loans | ||||
Financing Receivable, Modifications [Line Items] | ||||
TDR average net receivables | 367 | 197 | 352 | 175 |
TDR finance charges recognized | 11 | 9 | 22 | 15 |
Other Receivables | ||||
Financing Receivable, Modifications [Line Items] | ||||
TDR average net receivables | 137 | 140 | 138 | 138 |
TDR finance charges recognized | 2 | 2 | $ 4 | $ 4 |
TDR average net receivables | 88 | 91 | ||
TDR finance charges recognized | $ 2 | $ 2 |
Finance Receivables - Modified as TDR - non performing Finance Receivables (Details) - Personal loans $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018
USD ($)
account
|
Jun. 30, 2017
USD ($)
account
|
Jun. 30, 2018
USD ($)
account
|
Jun. 30, 2017
USD ($)
account
|
|
Financing Receivable, Modifications [Line Items] | ||||
TDR net finance receivables | $ | $ 18 | $ 30 | $ 35 | $ 42 |
Number of TDR accounts | account | 2,622 | 4,805 | 5,341 | 6,598 |
Finance Receivables Held for Sale (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Receivables Held-for-sale [Abstract] | ||
Finance receivables held for sale | $ 123 | $ 132 |
Investment Securities - Narrative (Details) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018
USD ($)
investment
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
investment
|
Jun. 30, 2017
USD ($)
|
Dec. 31, 2017
investment
|
|
Investments, Debt and Equity Securities [Abstract] | |||||
Investment securities in an unrealized loss position | investment | 1,872 | 1,872 | 1,229 | ||
Other than temporary impairment, credit losses recognized in earnings, period increase (decrease) (less than in 2018 YTD) | $ 0 | $ 1,000,000 | |||
Unrealized loss on securities (less than except for six months ended June 30, 2018) | $ 1,000,000 | $ 1,000,000 | $ 3,000,000 | $ 1,000,000 |
Investment Securities - Proceeds of AFS Sold / Redeemed (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sales and redemptions | $ 69 | $ 167 | $ 140 | $ 280 |
Realized gains | 0 | 5 | 0 | 9 |
Realized losses | 0 | (1) | 0 | (1) |
Net realized gains (losses) | $ 0 | $ 4 | $ 0 | $ 8 |
Investment Securities - Contractual Maturities of AFS Investment Securities (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: | ||
Due in 1 year or less | $ 148 | |
Due after 1 year through 5 years | 596 | |
Due after 5 years through 10 years | 385 | |
Due after 10 years | 197 | |
Mortgage-backed, asset-backed, and collateralized securities | 292 | |
Total | 1,618 | $ 1,578 |
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: | ||
Due in 1 year or less | 148 | |
Due after 1 year through 5 years | 604 | |
Due after 5 years through 10 years | 396 | |
Due after 10 years | 204 | |
Mortgage-backed, asset-backed, and collateralized securities | 296 | |
Cost/ Amortized Cost | $ 1,648 | $ 1,574 |
Investment Securities - FV of bonds on deposit with insurance regulatory (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Fair value of bonds on deposit | $ 500 | $ 537 |
Investment Securities - FV of Trading Investment Securities (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Fixed maturity other securities: | ||
Bonds | $ 56 | $ 74 |
Other long-term investments | 1 | 1 |
Total | 102 | 118 |
Non-U.S. government and government sponsored entities | ||
Fixed maturity other securities: | ||
Bonds | 1 | 1 |
Corporate debt | ||
Fixed maturity other securities: | ||
Bonds | 51 | 68 |
RMBS | ||
Fixed maturity other securities: | ||
Bonds | 1 | 1 |
CDO/ABS | ||
Fixed maturity other securities: | ||
Bonds | 3 | 4 |
Preferred stock | ||
Fixed maturity other securities: | ||
Trading security, equity | 22 | 20 |
Common Stock | ||
Fixed maturity other securities: | ||
Trading security, equity | $ 23 | $ 23 |
Transactions with Affiliates (Details) - Springleaf Finance Corporation - SpringCastle Funding Trust - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Related Party Transaction [Line Items] | |||||
Servicing fees (less than paid to Nationstar) | $ 8 | $ 10 | $ 16 | $ 20 | |
Servicing fees receivable | $ 2 | $ 2 | $ 3 |
Long-term Debt - SFC Senior Notes (Details) - USD ($) |
Jun. 30, 2018 |
May 11, 2018 |
Mar. 19, 2018 |
Mar. 12, 2018 |
---|---|---|---|---|
Springleaf Finance Corporation | 7.125% SFC Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 900,000,000 | |||
Springleaf Finance Corporation | 6.875% SFC Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 1,250,000,000 | |||
7.125% SFC Notes | Springleaf Finance Corporation | Senior Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 7.125% | |||
OMFH Notes 2021 | Senior Debt | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 400,000,000 | |||
OMFH Notes 2021 | Springleaf Finance Corporation | Senior Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 7.25% | |||
Debt instrument, face amount | $ 400,000,000 | |||
6.875% SFC Notes | Springleaf Finance Corporation | Senior Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.875% |
Variable Interest Entities - Carrying Amount of Consolidated VIEs (Details) - Consolidated VIEs - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Cash and cash equivalents | ||
Variable Interest Entity [Line Items] | ||
Assets | $ 3 | $ 4 |
Finance receivables | Personal loans | ||
Variable Interest Entity [Line Items] | ||
Assets | 9,135 | 9,769 |
Allowance for finance receivable losses | ||
Variable Interest Entity [Line Items] | ||
Assets | 459 | 465 |
Restricted cash and restricted cash equivalents | ||
Variable Interest Entity [Line Items] | ||
Assets | 569 | 482 |
Other assets | ||
Variable Interest Entity [Line Items] | ||
Assets | 24 | 20 |
Long-term debt | ||
Variable Interest Entity [Line Items] | ||
Liabilities | 8,094 | 8,688 |
Other liabilities | ||
Variable Interest Entity [Line Items] | ||
Liabilities | $ 15 | $ 15 |
Variable Interest Entities - VIE Interest Expense & Deconsolidated VIEs (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Variable Interest Entity [Line Items] | ||||
Interest expense | $ 220 | $ 203 | $ 420 | $ 405 |
Consolidated VIEs | ||||
Variable Interest Entity [Line Items] | ||||
Interest expense | $ 87 | $ 78 | $ 173 | $ 158 |
Insurance (Details) - USD ($) $ in Millions |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Balance at beginning of period | $ 154 | $ 158 | ||
Less reinsurance recoverables | (23) | (26) | ||
Net balance at beginning of period | 131 | 132 | ||
Additions for losses and loss adjustment expenses incurred to: | ||||
Current year | 102 | 96 | ||
Prior years | (5) | 2 | ||
Total | 97 | 98 | ||
Reductions for losses and loss adjustment expenses paid related to: | ||||
Current year | (47) | (45) | ||
Prior years | (51) | (58) | ||
Total | (98) | (103) | ||
Net balance at end of period | 130 | 127 | ||
Plus reinsurance recoverables | 23 | 26 | $ 4 | $ 25 |
Transfer of reserves | (19) | 0 | ||
Balance at end of period | 115 | 152 | ||
Prior years net reserve (redundancy) | $ (5) | $ 2 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Numerator (basic and diluted): | ||||
Net income attributable to OneMain Holdings, Inc. | $ 7 | $ 42 | $ 131 | $ 75 |
Denominator: | ||||
Weighted average number of shares outstanding (basic) (in shares) | 135,678,914 | 135,249,610 | 135,637,825 | 135,234,143 |
Effect of dilutive securities (in shares) | 290,131 | 263,817 | 295,574 | 309,199 |
Weighted average number of shares outstanding (diluted) (in shares) | 135,969,045 | 135,513,427 | 135,933,399 | 135,543,342 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.05 | $ 0.31 | $ 0.96 | $ 0.55 |
Diluted (in dollars per share) | $ 0.05 | $ 0.30 | $ 0.96 | $ 0.55 |
Performance-based shares | ||||
Earnings per share: | ||||
Antidilutive securities excluded from EPS calculation (in shares) | 45,467 | 25,089 | 71,314 | 27,887 |
Service-based shares | ||||
Earnings per share: | ||||
Antidilutive securities excluded from EPS calculation (in shares) | 159,698 | 795,321 | 240,467 | 775,476 |
Income Taxes (Details) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||
Deferred tax assets, net | $ 142 | $ 143 | |
Effective income tax rate | 38.00% | 39.00% | |
Interest and penalties included in unrecognized tax positions | $ 16 | $ 15 | |
No material change in balance of uncertain tax position, expected term | 12 months |
Contingencies (Details) $ in Millions |
Feb. 10, 2017
defendant
|
Jun. 30, 2018
USD ($)
|
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Loss contingency, number of defendants | defendant | 3 | |
Reserve for sales recourse obligations | $ | $ 8 |
Segment Information - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018
segment
| |
Segment Reporting [Abstract] | |
Number of segments | 2 |
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