Indiana | 35-0416090 | |
(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 o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
(dollars in millions, except par value amount) | June 30, 2016 | December 31, 2015 | ||||||
Assets | ||||||||
Cash and cash equivalents | $ | 320 | $ | 321 | ||||
Investment securities | 549 | 604 | ||||||
Net finance receivables: | ||||||||
Personal loans (includes loans of consolidated VIEs of $2.4 billion in 2016 and $3.6 billion in 2015) | 4,663 | 4,300 | ||||||
SpringCastle Portfolio (includes loans of consolidated VIEs of $1.7 billion in 2015) | — | 1,703 | ||||||
Real estate loans | 209 | 538 | ||||||
Retail sales finance | 16 | 23 | ||||||
Net finance receivables | 4,888 | 6,564 | ||||||
Unearned insurance premium and claim reserves | (220 | ) | (250 | ) | ||||
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $85 million in 2016 and $128 million in 2015) | (197 | ) | (224 | ) | ||||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses | 4,471 | 6,090 | ||||||
Finance receivables held for sale (includes finance receivables held for sale of consolidated VIEs of $435 million in 2015) | 420 | 793 | ||||||
Notes receivable from parent and affiliates | 3,683 | 3,804 | ||||||
Restricted cash and cash equivalents (includes restricted cash and cash equivalents of consolidated VIEs of $150 million in 2016 and $282 million in 2015) | 159 | 295 | ||||||
Other assets | 278 | 281 | ||||||
Total assets | $ | 9,880 | $ | 12,188 | ||||
Liabilities and Shareholder’s Equity | ||||||||
Long-term debt (includes debt of consolidated VIEs of $2.2 billion in 2016 and $5.5 billion in 2015) | $ | 6,699 | $ | 9,582 | ||||
Note payable to affiliate | 301 | — | ||||||
Insurance claims and policyholder liabilities | 252 | 230 | ||||||
Deferred and accrued taxes | 129 | 128 | ||||||
Other liabilities | 215 | 216 | ||||||
Total liabilities | 7,596 | 10,156 | ||||||
Commitments and contingent liabilities (Note 14) | ||||||||
Shareholder’s equity: | ||||||||
Common stock, par value $.50 per share; 25,000,000 shares authorized, 10,160,021 and 10,160,020 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 5 | 5 | ||||||
Additional paid-in capital | 800 | 789 | ||||||
Accumulated other comprehensive loss | (11 | ) | (24 | ) | ||||
Retained earnings | 1,490 | 1,341 | ||||||
Springleaf Finance Corporation shareholder’s equity | 2,284 | 2,111 | ||||||
Non-controlling interests | — | (79 | ) | |||||
Total shareholder’s equity | 2,284 | 2,032 | ||||||
Total liabilities and shareholder’s equity | $ | 9,880 | $ | 12,188 |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest income: | ||||||||||||||||
Finance charges | $ | 295 | $ | 402 | $ | 680 | $ | 797 | ||||||||
Finance receivables held for sale originated as held for investment | 18 | 4 | 64 | 8 | ||||||||||||
Total interest income | 313 | 406 | 744 | 805 | ||||||||||||
Interest expense | 138 | 171 | 294 | 329 | ||||||||||||
Net interest income | 175 | 235 | 450 | 476 | ||||||||||||
Provision for finance receivable losses | 85 | 73 | 176 | 152 | ||||||||||||
Net interest income after provision for finance receivable losses | 90 | 162 | 274 | 324 | ||||||||||||
Other revenues: | ||||||||||||||||
Insurance | 40 | 40 | 79 | 76 | ||||||||||||
Investment | 8 | 15 | 14 | 32 | ||||||||||||
Interest income on notes receivable from parent and affiliates | 51 | 4 | 102 | 6 | ||||||||||||
Net loss on repurchases and repayments of debt | (13 | ) | — | (16 | ) | — | ||||||||||
Net gain on sale of personal loans | 22 | — | 22 | — | ||||||||||||
Net gain on sale of SpringCastle interests | — | — | 167 | — | ||||||||||||
Other | (2 | ) | — | (6 | ) | (1 | ) | |||||||||
Total other revenues | 106 | 59 | 362 | 113 | ||||||||||||
Other expenses: | ||||||||||||||||
Operating expenses: | ||||||||||||||||
Salaries and benefits | 85 | 98 | 182 | 178 | ||||||||||||
Other operating expenses | 77 | 68 | 154 | 141 | ||||||||||||
Insurance policy benefits and claims | 15 | 20 | 32 | 36 | ||||||||||||
Total other expenses | 177 | 186 | 368 | 355 | ||||||||||||
Income before provision for income taxes | 19 | 35 | 268 | 82 | ||||||||||||
Provision for income taxes | 6 | — | 91 | 9 | ||||||||||||
Net income | 13 | 35 | 177 | 73 | ||||||||||||
Net income attributable to non-controlling interests | — | 33 | 28 | 66 | ||||||||||||
Net income attributable to Springleaf Finance Corporation | $ | 13 | $ | 2 | $ | 149 | $ | 7 |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income | $ | 13 | $ | 35 | $ | 177 | $ | 73 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities | 12 | (10 | ) | 24 | (5 | ) | ||||||||||
Foreign currency translation adjustments | — | (1 | ) | — | — | |||||||||||
Income tax effect: | ||||||||||||||||
Net unrealized (gains) losses on non-credit impaired available-for-sale securities | (5 | ) | 4 | (9 | ) | 2 | ||||||||||
Other comprehensive income (loss), net of tax, before reclassification adjustments | 7 | (7 | ) | 15 | (3 | ) | ||||||||||
Reclassification adjustments included in net income: | ||||||||||||||||
Net realized gains on available-for-sale securities | (2 | ) | (4 | ) | (3 | ) | (10 | ) | ||||||||
Income tax effect: | ||||||||||||||||
Net realized gains on available-for-sale securities | 1 | 1 | 1 | 3 | ||||||||||||
Reclassification adjustments included in net income, net of tax | (1 | ) | (3 | ) | (2 | ) | (7 | ) | ||||||||
Other comprehensive income (loss), net of tax | 6 | (10 | ) | 13 | (10 | ) | ||||||||||
Comprehensive income | 19 | 25 | 190 | 63 | ||||||||||||
Comprehensive income attributable to non-controlling interests | — | 33 | 28 | 66 | ||||||||||||
Comprehensive income (loss) attributable to Springleaf Finance Corporation | $ | 19 | $ | (8 | ) | $ | 162 | $ | (3 | ) |
Springleaf Finance Corporation Shareholder’s Equity | ||||||||||||||||||||||||||||
(dollars in millions) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Springleaf Finance Corporation Shareholder’s Equity | Non-controlling Interests | Total Shareholder’s Equity | |||||||||||||||||||||
Balance, January 1, 2016 | $ | 5 | $ | 789 | $ | (24 | ) | $ | 1,341 | $ | 2,111 | $ | (79 | ) | $ | 2,032 | ||||||||||||
Capital contribution from parent | — | 10 | — | — | 10 | — | 10 | |||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | 1 | — | — | 1 | — | 1 | |||||||||||||||||||||
Excess tax benefit from share-based compensation | — | 1 | — | — | 1 | — | 1 | |||||||||||||||||||||
Withholding tax on vested RSUs | — | (1 | ) | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||||
Change in non-controlling interests: | ||||||||||||||||||||||||||||
Distributions declared to joint venture partners | — | — | — | — | — | (18 | ) | (18 | ) | |||||||||||||||||||
Sale of equity interests in SpringCastle joint venture | — | — | — | — | — | 69 | 69 | |||||||||||||||||||||
Other comprehensive income | — | — | 13 | — | 13 | — | 13 | |||||||||||||||||||||
Net income | — | — | — | 149 | 149 | 28 | 177 | |||||||||||||||||||||
Balance, June 30, 2016 | $ | 5 | $ | 800 | $ | (11 | ) | $ | 1,490 | $ | 2,284 | $ | — | $ | 2,284 | |||||||||||||
Balance, January 1, 2015 | $ | 5 | $ | 771 | $ | 3 | $ | 1,327 | $ | 2,106 | $ | (129 | ) | $ | 1,977 | |||||||||||||
Non-cash incentive compensation from Initial Stockholder | — | 15 | — | — | 15 | — | 15 | |||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | 1 | — | — | 1 | — | 1 | |||||||||||||||||||||
Change in non-controlling interests: | ||||||||||||||||||||||||||||
Distributions declared to joint venture partners | — | — | — | — | — | (39 | ) | (39 | ) | |||||||||||||||||||
Other comprehensive loss | — | — | (10 | ) | — | (10 | ) | — | (10 | ) | ||||||||||||||||||
Net income | — | — | — | 7 | 7 | 66 | 73 | |||||||||||||||||||||
Balance, June 30, 2015 | $ | 5 | $ | 787 | $ | (7 | ) | $ | 1,334 | $ | 2,119 | $ | (102 | ) | $ | 2,017 |
(dollars in millions) | Six Months Ended June 30, | |||||||
2016 | 2015 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 177 | $ | 73 | ||||
Reconciling adjustments: | ||||||||
Provision for finance receivable losses | 176 | 152 | ||||||
Depreciation and amortization | 64 | 45 | ||||||
Deferred income tax charge (benefit) | 8 | (37 | ) | |||||
Net gain on sale of personal loans | (22 | ) | — | |||||
Net loss on repurchases and repayments of debt | 16 | — | ||||||
Non-cash incentive compensation from Initial Stockholder | — | 15 | ||||||
Share-based compensation expense, net of forfeitures | 1 | 1 | ||||||
Net gain on sale of SpringCastle interests | (167 | ) | — | |||||
Other | 4 | (12 | ) | |||||
Cash flows due to changes in: | ||||||||
Other assets and other liabilities | (24 | ) | (10 | ) | ||||
Insurance claims and policyholder liabilities | (7 | ) | 13 | |||||
Taxes receivable and payable | (13 | ) | (5 | ) | ||||
Accrued interest and finance charges | 10 | 3 | ||||||
Restricted cash and cash equivalents not reinvested | 4 | — | ||||||
Other, net | 2 | — | ||||||
Net cash provided by operating activities | 229 | 238 | ||||||
Cash flows from investing activities | ||||||||
Net principal collections (originations) of finance receivables held for investment and held for sale | (276 | ) | (287 | ) | ||||
Proceeds on sales of finance receivables held for sale originated as held for investment | 624 | 74 | ||||||
Proceeds from sale of SpringCastle interests | 101 | — | ||||||
Cash advances on intercompany notes receivables | (187 | ) | (77 | ) | ||||
Principal collections on intercompany notes receivables | 214 | 26 | ||||||
Available-for-sale securities purchased | (134 | ) | (209 | ) | ||||
Trading and other securities purchased | (10 | ) | (1,309 | ) | ||||
Available-for-sale securities called, sold, and matured | 221 | 219 | ||||||
Trading and other securities called, sold, and matured | 10 | 1,945 | ||||||
Change in restricted cash and cash equivalents | 57 | (109 | ) | |||||
Proceeds from sale of real estate owned | 4 | 10 | ||||||
Other, net | 3 | 8 | ||||||
Net cash provided by investing activities | 627 | 291 | ||||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of long-term debt, net of commissions | 1,990 | 1,829 | ||||||
Proceeds from intercompany note payable | 670 | — | ||||||
Repayments of long-term debt | (3,140 | ) | (591 | ) | ||||
Distributions to joint venture partners | (18 | ) | (39 | ) | ||||
Payments on note payable to affiliate | (370 | ) | — | |||||
Excess tax benefit from share-based compensation | 1 | — | ||||||
Capital contribution from parent | 10 | — | ||||||
Net cash provided by (used for) financing activities | (857 | ) | 1,199 |
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued) | ||||||||
(dollars in millions) | Six Months Ended June 30, | |||||||
2016 | 2015 | |||||||
Net change in cash and cash equivalents | (1 | ) | 1,728 | |||||
Cash and cash equivalents at beginning of period | 321 | 749 | ||||||
Cash and cash equivalents at end of period | $ | 320 | $ | 2,477 | ||||
Supplemental non-cash activities | ||||||||
Transfer of finance receivables held for investment to finance receivables held for sale (prior to deducting allowance for finance receivable losses) | $ | 1,895 | $ | — | ||||
Increase in finance receivables held for investment financed with intercompany payable | $ | 89 | $ | — | ||||
Transfer of finance receivables to real estate owned | $ | 4 | $ | 5 | ||||
Net unsettled investment security dispositions (purchases) | $ | (8 | ) | $ | 14 |
(dollars in millions) | As Reported | Adjustments | As Adjusted | |||||||||
Income (loss) before provision for (benefit from) income taxes | ||||||||||||
Year ended December 31, 2013 | $ | (136 | ) | $ | 11 | $ | (125 | ) | ||||
Year ended December 31, 2014 | 755 | (77 | ) | 678 | ||||||||
Year ended December 31, 2015 | 144 | 15 | 159 | |||||||||
Three months ended March 31, 2015 | 42 | 5 | 47 | |||||||||
Three months ended March 31, 2016 | 304 | (55 | ) | 249 | ||||||||
Net income (loss) attributable to SFC | ||||||||||||
Year ended December 31, 2013 | $ | (83 | ) | $ | 7 | $ | (76 | ) | ||||
Year ended December 31, 2014 | 448 | (51 | ) | 397 | ||||||||
Year ended December 31, 2015 | 9 | 5 | 14 | |||||||||
Three months ended March 31, 2015 | 3 | 2 | 5 | |||||||||
Three months ended March 31, 2016 | 172 | (36 | ) | 136 | ||||||||
Shareholder’s equity attributable to SFC | ||||||||||||
January 1, 2014 | $ | 1,328 | $ | 57 | $ | 1,385 | ||||||
January 1, 2015 | 2,069 | 37 | 2,106 | |||||||||
January 1, 2016 | 2,069 | 42 | 2,111 |
December 31, 2015 | ||||||||||||
(dollars in millions) | As Reported | Adjustments | As Adjusted | |||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 321 | $ | — | $ | 321 | ||||||
Investment securities | 604 | — | 604 | |||||||||
Net finance receivables: | ||||||||||||
Personal loans | 4,300 | — | 4,300 | |||||||||
SpringCastle Portfolio | 1,576 | 127 | 1,703 | |||||||||
Real estate loans | 524 | 14 | 538 | |||||||||
Retail sales finance | 23 | — | 23 | |||||||||
Net finance receivables | 6,423 | 141 | 6,564 | |||||||||
Unearned insurance premium and claim reserves | (250 | ) | — | (250 | ) | |||||||
Allowance for finance receivable losses | (219 | ) | (5 | ) | (224 | ) | ||||||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses | 5,954 | 136 | 6,090 | |||||||||
Finance receivables held for sale | 796 | (3 | ) | 793 | ||||||||
Notes receivable from parent and affiliates | 3,804 | — | 3,804 | |||||||||
Restricted cash and cash equivalents | 295 | — | 295 | |||||||||
Other assets | 281 | — | 281 | |||||||||
Total assets | $ | 12,055 | $ | 133 | $ | 12,188 | ||||||
Liabilities and Shareholder’s Equity | ||||||||||||
Long-term debt | $ | 9,582 | $ | — | $ | 9,582 | ||||||
Insurance claims and policyholder liabilities | 230 | — | 230 | |||||||||
Deferred and accrued taxes | 103 | 25 | 128 | |||||||||
Other liabilities | 217 | (1 | ) | 216 | ||||||||
Total liabilities | 10,132 | 24 | 10,156 | |||||||||
Shareholder’s equity: | ||||||||||||
Common stock | 5 | — | 5 | |||||||||
Additional paid-in capital | 758 | 31 | 789 | |||||||||
Accumulated other comprehensive loss | (24 | ) | — | (24 | ) | |||||||
Retained earnings | 1,330 | 11 | 1,341 | |||||||||
Springleaf Finance Corporation shareholder’s equity | 2,069 | 42 | 2,111 | |||||||||
Non-controlling interests | (146 | ) | 67 | (79 | ) | |||||||
Total shareholder’s equity | 1,923 | 109 | 2,032 | |||||||||
Total liabilities and shareholder’s equity | $ | 12,055 | $ | 133 | $ | 12,188 |
(dollars in millions) | Three Months Ended June 30, 2015 | Six Months Ended June 30, 2015 | ||||||||||||||||||||||
As Reported | Adjustments | As Adjusted | As Reported | Adjustments | As Adjusted | |||||||||||||||||||
Interest income: | ||||||||||||||||||||||||
Finance charges | $ | 404 | $ | (2 | ) | $ | 402 | $ | 802 | $ | (5 | ) | $ | 797 | ||||||||||
Finance receivables held for sale originated as held for investment | 5 | (1 | ) | 4 | 9 | (1 | ) | 8 | ||||||||||||||||
Total interest income | 409 | (3 | ) | 406 | 811 | (6 | ) | 805 | ||||||||||||||||
Interest expense | 171 | — | 171 | 329 | — | 329 | ||||||||||||||||||
Net interest income | 238 | (3 | ) | 235 | 482 | (6 | ) | 476 | ||||||||||||||||
Provision for finance receivable losses | 79 | (6 | ) | 73 | 165 | (13 | ) | 152 | ||||||||||||||||
Net interest income after provision for finance receivable losses | 159 | 3 | 162 | 317 | 7 | 324 | ||||||||||||||||||
Other revenues: | ||||||||||||||||||||||||
Insurance | 40 | — | 40 | 76 | — | 76 | ||||||||||||||||||
Investment | 15 | — | 15 | 32 | — | 32 | ||||||||||||||||||
Interest income on notes receivable from parent and affiliates | 4 | — | 4 | 6 | — | 6 | ||||||||||||||||||
Other | — | — | — | (2 | ) | 1 | (1 | ) | ||||||||||||||||
Total other revenues | 59 | — | 59 | 112 | 1 | 113 | ||||||||||||||||||
Other expenses: | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 98 | — | 98 | 178 | — | 178 | ||||||||||||||||||
Other operating expenses | 68 | — | 68 | 141 | — | 141 | ||||||||||||||||||
Insurance policy benefits and claims | 20 | — | 20 | 36 | — | 36 | ||||||||||||||||||
Total other expenses | 186 | — | 186 | 355 | — | 355 | ||||||||||||||||||
Income before provision for (benefit from) income taxes | 32 | 3 | 35 | 74 | 8 | 82 | ||||||||||||||||||
Provision for (benefit from) income taxes | (1 | ) | 1 | — | 7 | 2 | 9 | |||||||||||||||||
Net income | 33 | 2 | 35 | 67 | 6 | 73 | ||||||||||||||||||
Net income attributable to non-controlling interests | 31 | 2 | 33 | 62 | 4 | 66 | ||||||||||||||||||
Net income attributable to Springleaf Finance Corporation | $ | 2 | $ | — | $ | 2 | $ | 5 | $ | 2 | $ | 7 |
(dollars in millions) | Six Months Ended June 30, 2015 | |||||||||||
As Reported | Adjustments | As Adjusted | ||||||||||
Cash flows from operating activities | ||||||||||||
Net income | $ | 67 | $ | 6 | $ | 73 | ||||||
Reconciling adjustments: | ||||||||||||
Provision for finance receivable losses | 165 | (13 | ) | 152 | ||||||||
Depreciation and amortization | 39 | 6 | 45 | |||||||||
Deferred income tax charge (benefit) | (38 | ) | 1 | (37 | ) | |||||||
Non-cash incentive compensation from Initial Stockholder | 15 | — | 15 | |||||||||
Share-based compensation expense, net of forfeitures | 1 | — | 1 | |||||||||
Other | (12 | ) | — | (12 | ) | |||||||
Cash flows due to changes in: | ||||||||||||
Other assets and other liabilities | (10 | ) | — | (10 | ) | |||||||
Insurance claims and policyholder liabilities | 13 | — | 13 | |||||||||
Taxes receivable and payable | (5 | ) | — | (5 | ) | |||||||
Accrued interest and finance charges | 3 | — | 3 | |||||||||
Net cash provided by operating activities | 238 | — | 238 | |||||||||
Cash flows from investing activities | ||||||||||||
Net principal collections (originations) of finance receivables held for investment and held for sale | (287 | ) | — | (287 | ) | |||||||
Proceeds on sales of finance receivables held for sale originated as held for investment | 74 | — | 74 | |||||||||
Cash advances on intercompany notes receivables | (77 | ) | — | (77 | ) | |||||||
Principal collections on intercompany notes receivables | 26 | — | 26 | |||||||||
Available-for-sale securities purchased | (209 | ) | — | (209 | ) | |||||||
Trading and other securities purchased | (1,309 | ) | — | (1,309 | ) | |||||||
Available-for-sale securities called, sold, and matured | 219 | — | 219 | |||||||||
Trading and other securities called, sold, and matured | 1,945 | — | 1,945 | |||||||||
Change in restricted cash and cash equivalents | (109 | ) | — | (109 | ) | |||||||
Proceeds from sale of real estate owned | 10 | — | 10 | |||||||||
Other, net | 8 | — | 8 | |||||||||
Net cash provided by investing activities | 291 | — | 291 | |||||||||
Cash flows from financing activities | ||||||||||||
Proceeds from issuance of long-term debt, net of commissions | 1,829 | — | 1,829 | |||||||||
Repayments of long-term debt | (591 | ) | — | (591 | ) | |||||||
Distributions to joint venture partners | (39 | ) | — | (39 | ) | |||||||
Net cash provided by (used for) financing activities | 1,199 | — | 1,199 | |||||||||
Net change in cash and cash equivalents | 1,728 | — | 1,728 | |||||||||
Cash and cash equivalents at beginning of period | 749 | — | 749 | |||||||||
Cash and cash equivalents at end of period | $ | 2,477 | $ | — | $ | 2,477 |
• | 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 two to five years. At June 30, 2016, we had nearly 923,000 personal loans representing $4.7 billion of net finance receivables, compared to 890,000 personal loans totaling $4.3 billion at December 31, 2015. |
• | Real estate loans — are secured by first or second mortgages on residential real estate, generally have maximum original terms of 360 months, and are considered non-conforming. Real estate loans may be closed-end accounts or open-end home equity lines of credit and are primarily fixed-rate products. Since we ceased real estate lending in January of 2012, our real estate loans are in a liquidating status. |
• | Retail sales finance — include retail sales contracts and revolving retail accounts. Retail sales contracts are closed-end accounts that represent a single purchase transaction. Revolving retail accounts are open-end accounts that can be used for financing repeated purchases from the same merchant. Retail sales contracts are secured by the personal property designated in the contract and generally have maximum original terms of 60 months. Revolving retail accounts are secured by the goods purchased and generally require minimum monthly payments based on the amount financed calculated after the most recent purchase or outstanding balances. Our retail sales finance portfolio is in a liquidating status. |
• | SpringCastle Portfolio — included unsecured loans and loans secured by subordinate residential real estate mortgages that were sold on March 31, 2016, in connection with the SpringCastle Interests Sale. The SpringCastle Portfolio included both closed-end accounts and open-end lines of credit. These loans were in a liquidating status and varied in substance and form from our originated loans. Unless terminated, SFI will continue to provide the servicing for these loans, which we service as unsecured loans because the liens are subordinated to superior ranking security interests. |
(dollars in millions) | Personal Loans | SpringCastle Portfolio | Real Estate Loans | Retail Sales Finance | Total | |||||||||||||||
June 30, 2016 | ||||||||||||||||||||
Gross receivables * | $ | 5,360 | $ | — | $ | 207 | $ | 17 | $ | 5,584 | ||||||||||
Unearned finance charges and points and fees | (804 | ) | — | 1 | (1 | ) | (804 | ) | ||||||||||||
Accrued finance charges | 61 | — | 1 | — | 62 | |||||||||||||||
Deferred origination costs | 46 | — | — | — | 46 | |||||||||||||||
Total | $ | 4,663 | $ | — | $ | 209 | $ | 16 | $ | 4,888 | ||||||||||
December 31, 2015 | ||||||||||||||||||||
Gross receivables * | $ | 5,028 | $ | 1,672 | $ | 534 | $ | 25 | $ | 7,259 | ||||||||||
Unearned finance charges and points and fees | (833 | ) | — | — | (2 | ) | (835 | ) | ||||||||||||
Accrued finance charges | 60 | 31 | 4 | — | 95 | |||||||||||||||
Deferred origination costs | 45 | — | — | — | 45 | |||||||||||||||
Total | $ | 4,300 | $ | 1,703 | $ | 538 | $ | 23 | $ | 6,564 |
* | Gross receivables are defined as follows: |
• | Finance receivables purchased as a performing receivable — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; additionally, the remaining unearned discount, net of premium established at the time of purchase, is included in both interest bearing and precompute accounts to reflect the finance receivable balance at its initial fair value; |
• | Finance receivables originated subsequent to the Fortress Acquisition — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; |
• | Purchased credit impaired finance receivables — gross finance receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts; and |
• | Troubled debt restructured (“TDR”) finance receivables — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; additionally, the remaining unearned discount, net of premium established at the time of purchase, is included in both interest bearing and precompute accounts previously purchased as a performing receivable. |
(dollars in millions) | June 30, 2016 | December 31, 2015 | ||||||
Personal loans | $ | 1 | $ | 2 | ||||
SpringCastle Portfolio | — | 365 | ||||||
Real estate loans | 18 | 30 | ||||||
Total | $ | 19 | $ | 397 |
(dollars in millions) | Personal Loans | SpringCastle Portfolio | Real Estate Loans | Retail Sales Finance | Total | |||||||||||||||
June 30, 2016 | ||||||||||||||||||||
Net finance receivables: | ||||||||||||||||||||
60-89 days past due | $ | 43 | $ | — | $ | 6 | $ | — | $ | 49 | ||||||||||
90-119 days past due | 32 | — | 4 | — | 36 | |||||||||||||||
120-149 days past due | 29 | — | 3 | — | 32 | |||||||||||||||
150-179 days past due | 27 | — | 3 | — | 30 | |||||||||||||||
180 days or more past due | 3 | — | 21 | — | 24 | |||||||||||||||
Total delinquent finance receivables | 134 | — | 37 | — | 171 | |||||||||||||||
Current | 4,462 | — | 162 | 15 | 4,639 | |||||||||||||||
30-59 days past due | 67 | — | 10 | 1 | 78 | |||||||||||||||
Total | $ | 4,663 | $ | — | $ | 209 | $ | 16 | $ | 4,888 | ||||||||||
December 31, 2015 | ||||||||||||||||||||
Net finance receivables: | ||||||||||||||||||||
60-89 days past due | $ | 49 | $ | 26 | $ | 19 | $ | — | $ | 94 | ||||||||||
90-119 days past due | 41 | 16 | 3 | — | 60 | |||||||||||||||
120-149 days past due | 34 | 12 | 2 | 1 | 49 | |||||||||||||||
150-179 days past due | 31 | 11 | 2 | — | 44 | |||||||||||||||
180 days or more past due | 3 | 1 | 13 | — | 17 | |||||||||||||||
Total delinquent finance receivables | 158 | 66 | 39 | 1 | 264 | |||||||||||||||
Current | 4,077 | 1,588 | 486 | 22 | 6,173 | |||||||||||||||
30-59 days past due | 65 | 49 | 13 | — | 127 | |||||||||||||||
Total | $ | 4,300 | $ | 1,703 | $ | 538 | $ | 23 | $ | 6,564 |
(dollars in millions) | Personal Loans | SpringCastle Portfolio | Real Estate Loans | Retail Sales Finance | Total | |||||||||||||||
June 30, 2016 | ||||||||||||||||||||
Performing | $ | 4,572 | $ | — | $ | 178 | $ | 16 | $ | 4,766 | ||||||||||
Nonperforming | 91 | — | 31 | — | 122 | |||||||||||||||
Total | $ | 4,663 | $ | — | $ | 209 | $ | 16 | $ | 4,888 | ||||||||||
December 31, 2015 | ||||||||||||||||||||
Performing | $ | 4,191 | $ | 1,663 | $ | 518 | $ | 22 | $ | 6,394 | ||||||||||
Nonperforming | 109 | 40 | 20 | 1 | 170 | |||||||||||||||
Total | $ | 4,300 | $ | 1,703 | $ | 538 | $ | 23 | $ | 6,564 |
• | Ownership interest acquired by FCFI Acquisition LLC, an affiliate of Fortress (the “Fortress Acquisition”) - we revalued our assets and liabilities based on their fair value at the date of the Fortress Acquisition, November 30, 2010, in accordance with purchase accounting and adjusted the carrying value of our finance receivables (the “FA Loans”) to their fair value. |
• | SFI’s capital contribution of its wholly owned subsidiary, Springleaf Acquisition Corporation (“SAC”), to SFC - on July 31, 2014 (the “SAC Capital Contribution”), SFC acquired a 47% equity interest in the SpringCastle Portfolio (the “SCP Loans”), some of which were determined to be credit impaired when SAC acquired the SCP Loans on April 1, 2013. On March 31, 2016, we sold the SpringCastle Portfolio in connection with the SpringCastle Interests Sale described in Note 2. |
(dollars in millions) | SCP Loans | FA Loans * | Total | |||||||||
June 30, 2016 | ||||||||||||
Carrying amount, net of allowance | $ | — | $ | 85 | $ | 85 | ||||||
Outstanding balance | — | 129 | 129 | |||||||||
Allowance for purchased credit impaired finance receivable losses | — | 8 | 8 | |||||||||
December 31, 2015 | ||||||||||||
Carrying amount, net of allowance | $ | 350 | $ | 89 | $ | 439 | ||||||
Outstanding balance | 482 | 136 | 618 | |||||||||
Allowance for purchased credit impaired finance receivable losses | — | 12 | 12 |
* | Purchased credit impaired FA Loans held for sale included in the table above were as follows: |
(dollars in millions) | FA Loans | |||
June 30, 2016 | ||||
Carrying amount | $ | 68 | ||
Outstanding balance | 103 | |||
December 31, 2015 | ||||
Carrying amount | $ | 59 | ||
Outstanding balance | 89 |
(dollars in millions) | SCP Loans | FA Loans | Total | |||||||||
Three Months Ended June 30, 2016 | ||||||||||||
Balance at beginning of period | $ | — | $ | 74 | $ | 74 | ||||||
Accretion (a) | — | (2 | ) | (2 | ) | |||||||
Reclassifications to nonaccretable difference (b) | — | (11 | ) | (11 | ) | |||||||
Balance at end of period | $ | — | $ | 61 | $ | 61 | ||||||
Three Months Ended June 30, 2015 | ||||||||||||
Balance at beginning of period | $ | 431 | $ | 54 | $ | 485 | ||||||
Accretion (a) | (20 | ) | (2 | ) | (22 | ) | ||||||
Reclassifications from nonaccretable difference (b) | — | 1 | 1 | |||||||||
Balance at end of period | $ | 411 | $ | 53 | $ | 464 | ||||||
Six Months Ended June 30, 2016 | ||||||||||||
Balance at beginning of period | $ | 375 | $ | 66 | $ | 441 | ||||||
Accretion (a) | (16 | ) | (4 | ) | (20 | ) | ||||||
Reclassifications to nonaccretable difference (b) | — | (1 | ) | (1 | ) | |||||||
Transfer due to finance receivables sold | (359 | ) | — | (359 | ) | |||||||
Balance at end of period | $ | — | $ | 61 | $ | 61 | ||||||
Six Months Ended June 30, 2015 | ||||||||||||
Balance at beginning of period | $ | 452 | $ | 54 | $ | 506 | ||||||
Accretion (a) | (41 | ) | (4 | ) | (45 | ) | ||||||
Reclassifications from nonaccretable difference (b) | — | 3 | 3 | |||||||||
Balance at end of period | $ | 411 | $ | 53 | $ | 464 |
(a) | Accretion on our purchased credit impaired FA Loans held for sale included in the table above were as follows: |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Accretion | $ | 1 | $ | 2 | $ | 2 | $ | 3 |
(b) | Reclassifications from (to) nonaccretable difference represents the increases (decreases) in accretion resulting from higher (lower) estimated undiscounted cash flows. |
(dollars in millions) | Personal Loans (a) | SpringCastle Portfolio | Real Estate Loans (a) | Total | ||||||||||||
June 30, 2016 | ||||||||||||||||
TDR gross finance receivables (b) | $ | 34 | $ | — | $ | 201 | $ | 235 | ||||||||
TDR net finance receivables | 34 | — | 202 | 236 | ||||||||||||
Allowance for TDR finance receivable losses | 11 | — | 12 | 23 | ||||||||||||
December 31, 2015 | ||||||||||||||||
TDR gross finance receivables (b) | $ | 32 | $ | 14 | $ | 200 | $ | 246 | ||||||||
TDR net finance receivables | 31 | 13 | 201 | 245 | ||||||||||||
Allowance for TDR finance receivable losses | 9 | 4 | 34 | 47 |
(a) | TDR finance receivables held for sale included in the table above were as follows: |
(dollars in millions) | Personal Loans | Real Estate Loans | Total | |||||||||
June 30, 2016 | ||||||||||||
TDR gross finance receivables | $ | — | $ | 154 | $ | 154 | ||||||
TDR net finance receivables | — | 155 | 155 | |||||||||
December 31, 2015 | ||||||||||||
TDR gross finance receivables | $ | 2 | $ | 92 | $ | 94 | ||||||
TDR net finance receivables | 2 | 92 | 94 |
(b) | As defined earlier in this Note. |
(dollars in millions) | Personal Loans * | SpringCastle Portfolio | Real Estate Loans * | Total | ||||||||||||
Three Months Ended June 30, 2016 | ||||||||||||||||
TDR average net receivables | $ | 34 | $ | — | $ | 202 | $ | 236 | ||||||||
TDR finance charges recognized | 1 | — | 3 | 4 | ||||||||||||
Three Months Ended June 30, 2015 | ||||||||||||||||
TDR average net receivables | $ | 28 | $ | 12 | $ | 198 | $ | 238 | ||||||||
TDR finance charges recognized | 1 | — | 3 | 4 | ||||||||||||
Six Months Ended June 30, 2016 | ||||||||||||||||
TDR average net receivables | $ | 33 | $ | — | $ | 202 | $ | 235 | ||||||||
TDR finance charges recognized | 2 | — | 6 | 8 | ||||||||||||
Six Months Ended June 30, 2015 | ||||||||||||||||
TDR average net receivables | $ | 27 | $ | 11 | $ | 196 | $ | 234 | ||||||||
TDR finance charges recognized | 2 | — | 6 | 8 |
* | TDR finance receivables held for sale included in the table above were as follows: |
(dollars in millions) | Personal Loans | Real Estate Loans | Total | |||||||||
Three Months Ended June 30, 2016 | ||||||||||||
TDR average net receivables | $ | 1 | $ | 112 | $ | 113 | ||||||
TDR finance charges recognized | — | 2 | 2 | |||||||||
Three Months Ended June 30, 2015 | ||||||||||||
TDR average net receivables | $ | — | $ | 91 | $ | 91 | ||||||
TDR finance charges recognized | — | 1 | 1 | |||||||||
Six Months Ended June 30, 2016 | ||||||||||||
TDR average net receivables | $ | 2 | $ | 102 | $ | 104 | ||||||
TDR finance charges recognized | — | 3 | 3 | |||||||||
Six Months Ended June 30, 2015 | ||||||||||||
TDR average net receivables | $ | — | $ | 91 | $ | 91 | ||||||
TDR finance charges recognized | — | 2 | 2 |
(dollars in millions) | Personal Loans (a) | SpringCastle Portfolio | Real Estate Loans (a) | Total | ||||||||||||
Three Months Ended June 30, 2016 | ||||||||||||||||
Pre-modification TDR net finance receivables | $ | 9 | $ | — | $ | 6 | $ | 15 | ||||||||
Post-modification TDR net finance receivables: | ||||||||||||||||
Rate reduction | $ | 6 | $ | — | $ | 5 | $ | 11 | ||||||||
Other (b) | 2 | — | 1 | 3 | ||||||||||||
Total post-modification TDR net finance receivables | $ | 8 | $ | — | $ | 6 | $ | 14 | ||||||||
Number of TDR accounts | 1,767 | — | 116 | 1,883 | ||||||||||||
Three Months Ended June 30, 2015 | ||||||||||||||||
Pre-modification TDR net finance receivables | $ | 7 | $ | 2 | $ | 6 | $ | 15 | ||||||||
Post-modification TDR net finance receivables: | ||||||||||||||||
Rate reduction | $ | 3 | $ | 2 | $ | 5 | $ | 10 | ||||||||
Other (b) | 3 | — | 2 | 5 | ||||||||||||
Total post-modification TDR net finance receivables | $ | 6 | $ | 2 | $ | 7 | $ | 15 | ||||||||
Number of TDR accounts | 1,461 | 213 | 99 | 1,773 | ||||||||||||
Six Months Ended June 30, 2016 | ||||||||||||||||
Pre-modification TDR net finance receivables | $ | 18 | $ | 1 | $ | 10 | $ | 29 | ||||||||
Post-modification TDR net finance receivables: | ||||||||||||||||
Rate reduction | $ | 11 | $ | 1 | $ | 8 | $ | 20 | ||||||||
Other (b) | 5 | — | 2 | 7 | ||||||||||||
Total post-modification TDR net finance receivables | $ | 16 | $ | 1 | $ | 10 | $ | 27 | ||||||||
Number of TDR accounts | 3,549 | 157 | 205 | 3,911 | ||||||||||||
Six Months Ended June 30, 2015 | ||||||||||||||||
Pre-modification TDR net finance receivables | $ | 16 | $ | 4 | $ | 10 | $ | 30 | ||||||||
Post-modification TDR net finance receivables: | ||||||||||||||||
Rate reduction | $ | 8 | $ | 4 | $ | 9 | $ | 21 | ||||||||
Other (b) | 6 | — | 2 | 8 | ||||||||||||
Total post-modification TDR net finance receivables | $ | 14 | $ | 4 | $ | 11 | $ | 29 | ||||||||
Number of TDR accounts | 3,315 | 408 | 177 | 3,900 |
(a) | TDR finance receivables held for sale included in the table above were as follows: |
(dollars in millions) | Personal Loans | Real Estate Loans | Total | |||||||||
Three Months Ended June 30, 2016 | ||||||||||||
Pre-modification TDR net finance receivables * | $ | — | $ | 1 | $ | 1 | ||||||
Post-modification TDR net finance receivables * | $ | — | $ | 1 | $ | 1 | ||||||
Number of TDR accounts | 46 | 32 | 78 | |||||||||
Three Months Ended June 30, 2015 | ||||||||||||
Pre-modification TDR net finance receivables | $ | — | $ | 3 | $ | 3 | ||||||
Post-modification TDR net finance receivables | $ | — | $ | 3 | $ | 3 | ||||||
Number of TDR accounts | — | 35 | 35 | |||||||||
Six Months Ended June 30, 2016 | ||||||||||||
Pre-modification TDR net finance receivables * | $ | — | $ | 2 | $ | 2 | ||||||
Post-modification TDR net finance receivables * | $ | — | $ | 2 | $ | 2 | ||||||
Number of TDR accounts | 174 | 51 | 225 | |||||||||
Six Months Ended June 30, 2015 | ||||||||||||
Pre-modification TDR net finance receivables | $ | — | $ | 3 | $ | 3 | ||||||
Post-modification TDR net finance receivables | $ | — | $ | 3 | $ | 3 | ||||||
Number of TDR accounts | — | 44 | 44 |
* | Pre- and post-modification TDR personal loans held for sale for the three and six months ended June 30, 2016 were less than $1 million and, therefore, are not quantified in the table above. |
(b) | “Other” modifications primarily include forgiveness of principal or interest. |
(dollars in millions) | Personal Loans | SpringCastle Portfolio | Real Estate Loans (a) | Total | ||||||||||||
Three Months Ended June 30, 2016 | ||||||||||||||||
TDR net finance receivables (b) | $ | 2 | $ | — | $ | 1 | $ | 3 | ||||||||
Number of TDR accounts | 320 | — | 19 | 339 | ||||||||||||
Three Months Ended June 30, 2015 | ||||||||||||||||
TDR net finance receivables (b) (c) | $ | 2 | $ | 1 | $ | — | $ | 3 | ||||||||
Number of TDR accounts | 456 | 86 | 8 | 550 | ||||||||||||
Six Months Ended June 30, 2016 | ||||||||||||||||
TDR net finance receivables (b) (d) | $ | 3 | $ | — | $ | 2 | $ | 5 | ||||||||
Number of TDR accounts | 675 | 19 | 39 | 733 | ||||||||||||
Six Months Ended June 30, 2015 | ||||||||||||||||
TDR net finance receivables (b) | $ | 2 | $ | 1 | $ | 1 | $ | 4 | ||||||||
Number of TDR accounts | 513 | 96 | 26 | 635 |
(a) | TDR finance receivables held for sale included in the table above were as follows: |
(dollars in millions) | Real Estate Loans | |||
Three Months Ended June 30, 2016 | ||||
TDR net finance receivables * | $ | — | ||
Number of TDR accounts | 12 | |||
Three Months Ended June 30, 2015 | ||||
TDR net finance receivables | $ | 1 | ||
Number of TDR accounts | 4 | |||
Six Months Ended June 30, 2016 | ||||
TDR net finance receivables | $ | 1 | ||
Number of TDR accounts | 21 | |||
Six Months Ended June 30, 2015 | ||||
TDR net finance receivables | $ | 1 | ||
Number of TDR accounts | 13 |
* | TDR real estate loans held for sale for the three months ended June 30, 2016 that defaulted during the previous 12-month period were less than $1 million and, therefore, are not quantified in the combined table above. |
(b) | Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. |
(c) | TDR real estate loans for the three months ended June 30, 2015 that defaulted during the previous 12-month period were less than $1 million and, therefore, are not quantified in the combined table above. |
(d) | TDR SpringCastle Portfolio loans for the six months ended June 30, 2016 that defaulted during the previous 12-month period were less than $1 million and, therefore, are not quantified in the combined table above. |
(dollars in millions) | Personal Loans | SpringCastle Portfolio | Real Estate Loans | Retail Sales Finance | Consolidated Total | |||||||||||||||
Three Months Ended June 30, 2016 | ||||||||||||||||||||
Balance at beginning of period | $ | 168 | $ | — | $ | 49 | $ | — | $ | 217 | ||||||||||
Provision for finance receivable losses | 83 | — | 2 | — | 85 | |||||||||||||||
Charge-offs | (85 | ) | — | (4 | ) | — | (89 | ) | ||||||||||||
Recoveries | 10 | — | 2 | 1 | 13 | |||||||||||||||
Other * | — | — | (29 | ) | — | (29 | ) | |||||||||||||
Balance at end of period | $ | 176 | $ | — | $ | 20 | $ | 1 | $ | 197 | ||||||||||
Three Months Ended June 30, 2015 | ||||||||||||||||||||
Balance at beginning of period | $ | 132 | $ | 3 | $ | 45 | $ | 1 | $ | 181 | ||||||||||
Provision for finance receivable losses | 54 | 18 | — | 1 | 73 | |||||||||||||||
Charge-offs | (58 | ) | (21 | ) | (5 | ) | (1 | ) | (85 | ) | ||||||||||
Recoveries | 11 | 3 | 1 | — | 15 | |||||||||||||||
Balance at end of period | $ | 139 | $ | 3 | $ | 41 | $ | 1 | $ | 184 | ||||||||||
Six Months Ended June 30, 2016 | ||||||||||||||||||||
Balance at beginning of period | $ | 173 | $ | 4 | $ | 46 | $ | 1 | $ | 224 | ||||||||||
Provision for finance receivable losses | 156 | 14 | 6 | — | 176 | |||||||||||||||
Charge-offs | (174 | ) | (17 | ) | (6 | ) | (1 | ) | (198 | ) | ||||||||||
Recoveries | 21 | 3 | 3 | 1 | 28 | |||||||||||||||
Other * | — | (4 | ) | (29 | ) | — | (33 | ) | ||||||||||||
Balance at end of period | $ | 176 | $ | — | $ | 20 | $ | 1 | $ | 197 | ||||||||||
Six Months Ended June 30, 2015 | ||||||||||||||||||||
Balance at beginning of period | $ | 130 | $ | 3 | $ | 46 | $ | 1 | $ | 180 | ||||||||||
Provision for finance receivable losses | 110 | 37 | 4 | 1 | 152 | |||||||||||||||
Charge-offs | (119 | ) | (43 | ) | (11 | ) | (2 | ) | (175 | ) | ||||||||||
Recoveries | 18 | 6 | 2 | 1 | 27 | |||||||||||||||
Balance at end of period | $ | 139 | $ | 3 | $ | 41 | $ | 1 | $ | 184 |
* | Other consists of: |
• | the elimination of allowance for finance receivable losses due to the transfer of real estate loans held for investment to finance receivable held for sale on June 30, 2016; and |
• | the elimination of allowance for finance receivable losses due to the sale of the SpringCastle Portfolio on March 31, 2016, in connection with the sale of our equity interest in the SpringCastle Joint Venture. See Note 2 for further information on this sale. |
(dollars in millions) | Personal Loans | SpringCastle Portfolio | Real Estate Loans | Retail Sales Finance | Total | |||||||||||||||
June 30, 2016 | ||||||||||||||||||||
Allowance for finance receivable losses: | ||||||||||||||||||||
Collectively evaluated for impairment | $ | 165 | $ | — | $ | — | $ | 1 | $ | 166 | ||||||||||
Purchased credit impaired finance receivables | — | — | 8 | — | 8 | |||||||||||||||
TDR finance receivables | 11 | — | 12 | — | 23 | |||||||||||||||
Total | $ | 176 | $ | — | $ | 20 | $ | 1 | $ | 197 | ||||||||||
Finance receivables: | ||||||||||||||||||||
Collectively evaluated for impairment | $ | 4,629 | $ | — | $ | 137 | $ | 16 | $ | 4,782 | ||||||||||
Purchased credit impaired finance receivables | — | — | 25 | — | 25 | |||||||||||||||
TDR finance receivables | 34 | — | 47 | — | 81 | |||||||||||||||
Total | $ | 4,663 | $ | — | $ | 209 | $ | 16 | $ | 4,888 | ||||||||||
Allowance for finance receivable losses as a percentage of finance receivables | 3.78 | % | — | % | 9.64 | % | 3.42 | % | 4.03 | % | ||||||||||
December 31, 2015 | ||||||||||||||||||||
Allowance for finance receivable losses: | ||||||||||||||||||||
Collectively evaluated for impairment | $ | 164 | $ | — | $ | — | $ | 1 | $ | 165 | ||||||||||
Purchased credit impaired finance receivables | — | — | 12 | — | 12 | |||||||||||||||
TDR finance receivables | 9 | 4 | 34 | — | 47 | |||||||||||||||
Total | $ | 173 | $ | 4 | $ | 46 | $ | 1 | $ | 224 | ||||||||||
Finance receivables: | ||||||||||||||||||||
Collectively evaluated for impairment | $ | 4,271 | $ | 1,340 | $ | 387 | $ | 23 | $ | 6,021 | ||||||||||
Purchased credit impaired finance receivables | — | 350 | 42 | — | 392 | |||||||||||||||
TDR finance receivables | 29 | 13 | 109 | — | 151 | |||||||||||||||
Total | $ | 4,300 | $ | 1,703 | $ | 538 | $ | 23 | $ | 6,564 | ||||||||||
Allowance for finance receivable losses as a percentage of finance receivables | 4.01 | % | 0.25 | % | 8.72 | % | 3.46 | % | 3.42 | % |
(dollars in millions) | Cost/ Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
June 30, 2016 | ||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||
Bonds: | ||||||||||||||||
U.S. government and government sponsored entities | $ | 41 | $ | 1 | $ | — | $ | 42 | ||||||||
Obligations of states, municipalities, and political subdivisions | 82 | 2 | — | 84 | ||||||||||||
Corporate debt | 278 | 6 | (2 | ) | 282 | |||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||
Residential mortgage-backed securities (“RMBS”) | 38 | — | — | 38 | ||||||||||||
Commercial mortgage-backed securities (“CMBS”) | 47 | 1 | — | 48 | ||||||||||||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | 34 | — | — | 34 | ||||||||||||
Total bonds | 520 | 10 | (2 | ) | 528 | |||||||||||
Preferred stock | 6 | — | — | 6 | ||||||||||||
Other long-term investments | 2 | — | (1 | ) | 1 | |||||||||||
Total * | $ | 528 | $ | 10 | $ | (3 | ) | $ | 535 | |||||||
December 31, 2015 | ||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||
Bonds: | ||||||||||||||||
U.S. government and government sponsored entities | $ | 83 | $ | — | $ | (1 | ) | $ | 82 | |||||||
Obligations of states, municipalities, and political subdivisions | 88 | 1 | — | 89 | ||||||||||||
Corporate debt | 278 | 2 | (13 | ) | 267 | |||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||
RMBS | 74 | — | — | 74 | ||||||||||||
CMBS | 44 | — | — | 44 | ||||||||||||
CDO/ABS | 30 | — | (1 | ) | 29 | |||||||||||
Total bonds | 597 | 3 | (15 | ) | 585 | |||||||||||
Preferred stock | 6 | — | (1 | ) | 5 | |||||||||||
Other long-term investments | 1 | — | — | 1 | ||||||||||||
Total * | $ | 604 | $ | 3 | $ | (16 | ) | $ | 591 |
* | Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of $1 million at June 30, 2016 and December 31, 2015, which is classified as a restricted investment and carried at cost. |
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
(dollars in millions) | Fair Value | Unrealized Losses * | Fair Value | Unrealized Losses * | Fair Value | Unrealized Losses | ||||||||||||||||||
June 30, 2016 | ||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||
U.S. government and government sponsored entities | $ | 1 | $ | — | $ | — | $ | — | $ | 1 | $ | — | ||||||||||||
Obligations of states, municipalities, and political subdivisions | 7 | — | 3 | — | 10 | — | ||||||||||||||||||
Corporate debt | 25 | (1 | ) | 22 | (1 | ) | 47 | (2 | ) | |||||||||||||||
RMBS | 17 | — | — | — | 17 | — | ||||||||||||||||||
CMBS | 7 | — | 9 | — | 16 | — | ||||||||||||||||||
CDO/ABS | 16 | — | — | — | 16 | — | ||||||||||||||||||
Total bonds | 73 | (1 | ) | 34 | (1 | ) | 107 | (2 | ) | |||||||||||||||
Preferred stock | — | — | 6 | — | 6 | — | ||||||||||||||||||
Other long-term investments | — | — | 1 | (1 | ) | 1 | (1 | ) | ||||||||||||||||
Total | $ | 73 | $ | (1 | ) | $ | 41 | $ | (2 | ) | $ | 114 | $ | (3 | ) | |||||||||
December 31, 2015 | ||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||
U.S. government and government sponsored entities | $ | 76 | $ | (1 | ) | $ | — | $ | — | $ | 76 | $ | (1 | ) | ||||||||||
Obligations of states, municipalities, and political subdivisions | 36 | — | 2 | — | 38 | — | ||||||||||||||||||
Corporate debt | 189 | (13 | ) | 7 | — | 196 | (13 | ) | ||||||||||||||||
RMBS | 68 | — | — | — | 68 | — | ||||||||||||||||||
CMBS | 36 | — | 5 | — | 41 | — | ||||||||||||||||||
CDO/ABS | 29 | (1 | ) | — | — | 29 | (1 | ) | ||||||||||||||||
Total bonds | 434 | (15 | ) | 14 | — | 448 | (15 | ) | ||||||||||||||||
Preferred stock | — | — | 6 | (1 | ) | 6 | (1 | ) | ||||||||||||||||
Other long-term investments | 1 | — | — | — | 1 | — | ||||||||||||||||||
Total | $ | 435 | $ | (15 | ) | $ | 20 | $ | (1 | ) | $ | 455 | $ | (16 | ) |
* | 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, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Balance at beginning of period | $ | 1 | $ | 1 | $ | 1 | $ | 1 | ||||||||
Reductions: | ||||||||||||||||
Realized due to dispositions with no prior intention to sell | 1 | — | 1 | — | ||||||||||||
Balance at end of period | $ | — | $ | 1 | $ | — | $ | 1 |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Proceeds from sales and redemptions | $ | 123 | $ | 130 | $ | 193 | $ | 204 | ||||||||
Realized gains | $ | 3 | $ | 4 | $ | 4 | $ | 11 | ||||||||
Realized losses | — | — | — | (1 | ) | |||||||||||
Net realized gains | $ | 3 | $ | 4 | $ | 4 | $ | 10 |
(dollars in millions) | Fair Value | Amortized Cost | ||||||
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: | ||||||||
Due in 1 year or less | $ | 68 | $ | 69 | ||||
Due after 1 year through 5 years | 170 | 169 | ||||||
Due after 5 years through 10 years | 50 | 47 | ||||||
Due after 10 years | 120 | 116 | ||||||
Mortgage-backed, asset-backed, and collateralized securities | 120 | 119 | ||||||
Total | $ | 528 | $ | 520 |
(dollars in millions) | June 30, 2016 | December 31, 2015 | ||||||
Fixed maturity trading and other securities: | ||||||||
Bonds: | ||||||||
Corporate debt | $ | 11 | $ | 10 | ||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||
CMBS | 2 | 2 | ||||||
Total * | $ | 13 | $ | 12 |
* | The fair value of other securities totaled $13 million at June 30, 2016 and $2 million at December 31, 2015. |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net unrealized gains on trading and other securities held at period end | $ | 1 | $ | 1 | $ | 1 | $ | 4 | ||||||||
Net realized losses on trading and other securities sold or redeemed | — | (1 | ) | — | (1 | ) | ||||||||||
Total | $ | 1 | $ | — | $ | 1 | $ | 3 |
Senior Debt | ||||||||||||||||||||
(dollars in millions) | Securitizations | Revolving Conduit Facilities | Medium Term Notes | Junior Subordinated Debt | Total | |||||||||||||||
Interest rates (a) | 2.41% - 6.50% | 1.90% - 2.29% | 5.25% - 8.25% | 6.00 | % | |||||||||||||||
Third quarter 2016 | $ | — | $ | — | $ | 375 | $ | — | $ | 375 | ||||||||||
Fourth quarter 2016 | — | — | — | — | — | |||||||||||||||
First quarter 2017 | — | — | — | — | — | |||||||||||||||
Second quarter 2017 | — | — | — | — | — | |||||||||||||||
Remainder of 2017 | — | — | 1,289 | — | 1,289 | |||||||||||||||
2018 | — | — | — | — | — | |||||||||||||||
2019 | — | — | 700 | — | 700 | |||||||||||||||
2020 | — | — | 1,300 | — | 1,300 | |||||||||||||||
2021-2067 | — | — | 950 | 350 | 1,300 | |||||||||||||||
Securitizations (b) | 1,890 | — | — | — | 1,890 | |||||||||||||||
Revolving conduit facilities (b) | — | 325 | — | — | 325 | |||||||||||||||
Total principal maturities | $ | 1,890 | $ | 325 | $ | 4,614 | $ | 350 | $ | 7,179 | ||||||||||
Total carrying amount (c) | $ | 1,882 | $ | 325 | $ | 4,320 | $ | 172 | $ | 6,699 | ||||||||||
Debt issuance costs (d) | $ | (7 | ) | $ | — | $ | (16 | ) | $ | — | $ | (23 | ) |
(a) | The interest rates shown are the range of contractual rates in effect at June 30, 2016. |
(b) | Securitizations and borrowings under revolving conduit facilities are not included in above maturities by period due to their variable monthly repayments. See Note 11 for further information on our long-term debt associated with securitizations and revolving conduit facilities. |
(c) | The carrying amount of our long-term debt associated with certain securitizations that were (i) issued at a premium or discount, (ii) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition or (iii) recorded at fair value on a recurring basis in circumstances when the embedded derivative within the securitization structure cannot be separately accounted for at fair value. |
(d) | Debt issuance costs are reported as a direct deduction from long-term debt, with the exception of debt issuance costs associated with our revolving conduit facilities, which totaled $10 million at June 30, 2016 and are reported in other assets and are excluded from the table above. |
(dollars in millions) | June 30, 2016 | December 31, 2015 | ||||||
Assets | ||||||||
Cash and cash equivalents | $ | 1 | $ | 7 | ||||
Finance receivables: | ||||||||
Personal loans | 2,436 | 3,621 | ||||||
SpringCastle Portfolio | — | 1,703 | ||||||
Allowance for finance receivable losses | 85 | 128 | ||||||
Finance receivables held for sale | — | 435 | ||||||
Restricted cash and cash equivalents | 150 | 282 | ||||||
Other assets | 45 | 48 | ||||||
Liabilities | ||||||||
Long-term debt | $ | 2,207 | $ | 5,513 | ||||
Other liabilities | 4 | 9 |
(dollar in millions) | Note Maximum Balance | Amount Drawn | Revolving Period End | |||||||
First Avenue Funding LLC (a) | $ | 250 | $ | — | June 2018 | |||||
Midbrook 2013-VFN1 Trust (b) | 300 | — | February 2018 | |||||||
Mill River 2015-VFN1 Trust (c) | 100 | — | May 2018 | |||||||
Second Avenue Funding LLC | 250 | — | June 2018 | |||||||
Springleaf 2013-VFN1 Trust (d) | 850 | 50 | January 2018 | |||||||
Sumner Brook 2013-VFN1 Trust | 350 | 275 | January 2018 | |||||||
Whitford Brook 2014-VFN1 Trust (e) | 250 | — | June 2018 | |||||||
Total | $ | 2,350 | $ | 325 |
(a) | First Avenue Funding LLC. On June 30, 2016, we amended the note purchase agreement with the First Avenue Funding LLC (“First Avenue”) to extend the revolving period ending in March 2018 to June 2018. Following the revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying auto secured personal loans and will be due and payable in full 12 months following the maturity of the last auto secured personal loan held by First Avenue. |
(b) | Midbrook 2013-VFN1 Trust. On February 24, 2016, we amended the note purchase agreement with the Midbrook Funding Trust 2013-VFN1 to (i) extend the revolving period ending in June 2016 to February 2018 and (ii) decrease the maximum principal balance from $300 million to $250 million on February 24, 2017. Following the revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in the 36th month following the end of the revolving period. |
(c) | Mill River 2015-VFN1 Trust. On January 21, 2016, we amended the note purchase agreement with the Mill River 2015-VFN1 Trust to decrease the maximum principal balance from $400 million to $100 million. |
(d) | Springleaf 2013-VFN1 Trust. On January 21, 2016, we amended the note purchase agreement with the Springleaf 2013-VFN1 Trust to (i) increase the maximum principal balance from $350 million to $850 million and (ii) extend the revolving period ending in April 2017 to January 2018, which may be extended to January 2019, subject to satisfaction of customary conditions precedent. Following the revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in the 36th month following the end of the revolving period. |
(e) | Whitford Brook 2014-VFN1 Trust. On February 24, 2016, we amended the note purchase agreement with the Whitford Brook Funding Trust 2014-VFN1 (the “Whitford Brook 2014-VFN1 Trust”) to extend the revolving period ending in June 2017 to June 2018. Following the revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in the 12th month following the end of the revolving period. |
(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, 2016 | ||||||||||||||||
Balance at beginning of period | $ | (2 | ) | $ | (19 | ) | $ | 4 | $ | (17 | ) | |||||
Other comprehensive income before reclassifications | 7 | — | — | 7 | ||||||||||||
Reclassification adjustments from accumulated other comprehensive income (loss) | (1 | ) | — | — | (1 | ) | ||||||||||
Balance at end of period | $ | 4 | $ | (19 | ) | $ | 4 | $ | (11 | ) | ||||||
Three Months Ended June 30, 2015 | ||||||||||||||||
Balance at beginning of period | $ | 11 | $ | (13 | ) | $ | 5 | $ | 3 | |||||||
Other comprehensive loss before reclassifications | (6 | ) | — | (1 | ) | (7 | ) | |||||||||
Reclassification adjustments from accumulated other comprehensive income (loss) | (3 | ) | — | — | (3 | ) | ||||||||||
Balance at end of period | $ | 2 | $ | (13 | ) | $ | 4 | $ | (7 | ) | ||||||
Six Months Ended June 30, 2016 | ||||||||||||||||
Balance at beginning of period | $ | (9 | ) | $ | (19 | ) | $ | 4 | $ | (24 | ) | |||||
Other comprehensive income before reclassifications | 15 | — | — | 15 | ||||||||||||
Reclassification adjustments from accumulated other comprehensive income (loss) | (2 | ) | — | — | (2 | ) | ||||||||||
Balance at end of period | $ | 4 | $ | (19 | ) | $ | 4 | $ | (11 | ) | ||||||
Six Months Ended June 30, 2015 | ||||||||||||||||
Balance at beginning of period | $ | 12 | $ | (13 | ) | $ | 4 | $ | 3 | |||||||
Other comprehensive loss before reclassifications | (3 | ) | — | — | (3 | ) | ||||||||||
Reclassification adjustments from accumulated other comprehensive income (loss) | (7 | ) | — | — | (7 | ) | ||||||||||
Balance at end of period | $ | 2 | $ | (13 | ) | $ | 4 | $ | (7 | ) |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Unrealized gains on investment securities: | ||||||||||||||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes | $ | 2 | $ | 4 | $ | 3 | $ | 10 | ||||||||
Income tax effect | (1 | ) | (1 | ) | (1 | ) | (3 | ) | ||||||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, net of taxes | $ | 1 | $ | 3 | $ | 2 | $ | 7 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(dollars in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Balance at beginning of period | $ | 15 | $ | 24 | $ | 15 | $ | 24 | ||||||||
Recourse losses | — | (5 | ) | — | (5 | ) | ||||||||||
Provision for recourse obligations, net of recoveries * | — | (1 | ) | — | (1 | ) | ||||||||||
Balance at end of period | $ | 15 | $ | 18 | $ | 15 | $ | 18 |
* | Reflects the elimination of the reserve associated with other prior sales of finance receivables. |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Components of net periodic benefit cost - pension plans: | ||||||||||||||||
Interest cost | $ | 4 | $ | 4 | $ | 8 | $ | 8 | ||||||||
Expected return on assets | (4 | ) | (4 | ) | (8 | ) | (9 | ) | ||||||||
Net periodic benefit cost | $ | — | $ | — | $ | — | $ | (1 | ) |
• | Consumer and Insurance — We originate and service personal loans (secured and unsecured) through two business divisions: branch operations and centralized operations and offer credit insurance (life insurance, disability insurance, and involuntary unemployment insurance), non-credit insurance, and ancillary products, such as warranty protection. Branch operations primarily conduct business in 28 states. Our centralized operations underwrite and process certain loan applications that we receive from our branch operations or through an internet portal. If the applicant is located near an existing branch (“in footprint”), our centralized operations make the credit decision regarding the application and then request, but do not require, the customer to visit a nearby branch for closing, funding and servicing. If the applicant is not located near a branch (“out of footprint”), our centralized operations originate the loan. |
• | Acquisitions and Servicing — SFI services the SpringCastle Portfolio that was acquired by an indirect subsidiary of OMH through a joint venture in which SFC owned a 47% equity interest. On March 31, 2016, the SpringCastle Portfolio was sold in connection with the sale of our equity interest in the SpringCastle Joint Venture. These loans consist of unsecured loans and loans secured by subordinate residential real estate mortgages and include both closed-end accounts and open-end lines of credit. These loans are in a liquidating status and vary in substance and form from our originated loans. Unless terminated, SFI will continue to provide the servicing for these loans, which we service as unsecured loans because the liens are subordinated to superior ranking security interests. |
• | Real Estate — We service and hold real estate loans secured by first or second mortgages on residential real estate. Real estate loans previously originated through our branch offices or previously acquired or originated through centralized distribution channels are serviced by: (i) MorEquity and subserviced by Nationstar; (ii) Select Portfolio Servicing, Inc.; or (iii) our centralized operations. Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. Prior to the OneMain Acquisition, this segment also included proceeds from the sale of our real estate loans in 2014. OMH used these proceeds to acquire OneMain. |
Interest income | Directly correlated with a specific segment. |
Interest expense | Acquisition and Servicing - This segment includes interest expense specifically identified to the SpringCastle Portfolio. |
Consumer and Insurance, Real Estate and Other - The Company has securitization debt and unsecured debt. The Company first allocates interest expense to its segments based on actual expense for securitizations and secured term debt and using a weighted average for unsecured debt allocated to the segments. Average unsecured debt allocations for the periods presented are as follows: | |
Subsequent to the OneMain Acquisition | |
Total average unsecured debt is allocated as follows: | |
l Consumer and Insurance - receives remainder of unallocated average debt; and | |
l Real Estate and Other - at 100% of asset base. (Asset base represents the average net finance receivables including finance receivables held for sale.) | |
The net effect of the change in debt allocation and asset base methodologies for the three months ended June 30, 2015 had it been in place as of the beginning of the year would be an increase in interest expense of $66 million for Consumer and Insurance and a decrease in interest expense of $45 million and $21 million for Real Estate and Other, respectively. | |
The net effect of the change in debt allocation and asset base methodologies for the six months ended June 30, 2015 had it been in place as of the beginning of the year would be an increase in interest expense of $120 million for Consumer and Insurance and a decrease in interest expense of $90 million and $30 million for Real Estate and Other, respectively. | |
For the period third quarter 2014 to the OneMain Acquisition | |
Total average unsecured debt was allocated to Consumer and Insurance, Real Estate and Other, such that the total debt allocated across each segment equaled 83%, up to 100% and 100% of each of its respective asset base. Any excess was allocated to Consumer and Insurance. | |
Average unsecured debt was allocated after average securitized debt to achieve the calculated average segment debt. | |
Asset base represented the following: | |
l Consumer and Insurance - average net finance receivables including average net finance receivables held for sale; | |
l Real Estate - average net finance receivables including average net finance receivables held for sale, cash and cash equivalents, investments including proceeds from Real Estate sales; and | |
l Other - average net finance receivables other than the periods listed below: | |
l May 2015 to the OneMain Acquisition - average net finance receivables and cash and cash equivalents less proceeds from equity issuance in 2015, operating cash reserve and cash included in other segments. | |
l February 2015 to April 2015 - average net finance receivables and cash and cash equivalents less operating cash reserve and cash included in other segments. | |
Provision for finance receivable losses | Directly correlated with a specific segment, except for allocations to Other, which are based on the remaining delinquent accounts as a percentage of total delinquent accounts. |
Other revenues | Directly correlated with a specific segment, except for: (i) net gain (loss) on repurchases and repayments of debt, which is allocated to the segments based on the interest expense allocation of debt and (ii) gains and losses on foreign currency exchange, which are allocated to the segments based on the interest expense allocation of debt. |
Salaries and benefits | Directly correlated with a specific segment. Other salaries and benefits not directly correlated with a specific segment are allocated to each of the segments based on services provided. |
Other operating expenses | Directly correlated with a specific segment. Other operating expenses not directly correlated with a specific segment are allocated to each of the segments based on services provided. |
Insurance policy benefits and claims | Directly correlated with a specific segment. |
• | Interest income - the net purchase accounting impact of the amortization (accretion) of the net premium (discount) assigned to finance receivables and the impact of identifying purchased credit impaired finance receivables as compared to the historical values of finance receivables; |
• | Interest expense - the accretion of the net discount applied to our long-term debt as part of purchase accounting; |
• | Provision for finance receivable losses - the adjustment to reflect the difference between our allowance adjustment calculated under a Segment Accounting Basis and purchase accounting basis; |
• | Other revenues - the impact of carrying value differences between a Segment Accounting Basis and purchase accounting basis when measuring mark to market for loans held for sale and realized gains/losses associated with our investment portfolio; and |
• | Other expenses - the net impact of amortization associated with identified intangibles as part of purchase accounting and deferred costs impacted by purchase accounting. |
(dollars in millions) | Consumer and Insurance | Acquisitions and Servicing | Real Estate | Other | Segment to GAAP Adjustment | Consolidated Total | ||||||||||||||||||
Three Months Ended June 30, 2016 | ||||||||||||||||||||||||
Interest income | $ | 295 | $ | — | $ | 15 | $ | 1 | $ | 2 | $ | 313 | ||||||||||||
Interest expense | 99 | — | 14 | 3 | 22 | 138 | ||||||||||||||||||
Provision for finance receivable losses | 83 | — | 2 | — | — | 85 | ||||||||||||||||||
Net interest income (loss) after provision for finance receivable losses | 113 | — | (1 | ) | (2 | ) | (20 | ) | 90 | |||||||||||||||
Other revenues | 71 | — | (7 | ) | 52 | (10 | ) | 106 | ||||||||||||||||
Other expenses | 167 | 1 | 7 | 3 | (1 | ) | 177 | |||||||||||||||||
Income (loss) before provision for (benefit from) income taxes | $ | 17 | $ | (1 | ) | $ | (15 | ) | $ | 47 | $ | (29 | ) | $ | 19 |
Three Months Ended June 30, 2015 | ||||||||||||||||||||||||
Interest income | $ | 267 | $ | 116 | $ | 17 | $ | 3 | $ | 3 | $ | 406 | ||||||||||||
Interest expense | 36 | 22 | 59 | 22 | 32 | 171 | ||||||||||||||||||
Provision for finance receivable losses | 53 | 17 | (5 | ) | 1 | 7 | 73 | |||||||||||||||||
Net interest income (loss) after provision for finance receivable losses | 178 | 77 | (37 | ) | (20 | ) | (36 | ) | 162 | |||||||||||||||
Other revenues | 55 | — | 3 | 4 | (3 | ) | 59 | |||||||||||||||||
Other expenses | 151 | 15 | 9 | 10 | 1 | 186 | ||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes | 82 | 62 | (43 | ) | (26 | ) | (40 | ) | 35 | |||||||||||||||
Income before provision for income taxes attributable to non-controlling interests | — | 33 | — | — | — | 33 | ||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | $ | 82 | $ | 29 | $ | (43 | ) | $ | (26 | ) | $ | (40 | ) | $ | 2 |
(dollars in millions) | Consumer and Insurance | Acquisitions and Servicing | Real Estate | Other | Eliminations | Segment to GAAP Adjustment | Consolidated Total | |||||||||||||||||||||
At or for the Six Months Ended June 30, 2016 | ||||||||||||||||||||||||||||
Interest income | $ | 606 | $ | 102 | $ | 30 | $ | 2 | $ | — | $ | 4 | $ | 744 | ||||||||||||||
Interest expense | 194 | 20 | 27 | 7 | — | 46 | 294 | |||||||||||||||||||||
Provision for finance receivable losses | 156 | 14 | 4 | — | — | 2 | 176 | |||||||||||||||||||||
Net interest income (loss) after provision for finance receivable losses | 256 | 68 | (1 | ) | (5 | ) | — | (44 | ) | 274 | ||||||||||||||||||
Net gain on sale of SpringCastle interests | — | 167 | — | — | — | — | 167 | |||||||||||||||||||||
Other revenues (a) | 116 | — | (18 | ) | 102 | — | (5 | ) | 195 | |||||||||||||||||||
Other expenses | 341 | 15 | 14 | (1 | ) | — | (1 | ) | 368 | |||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes | 31 | 220 | (33 | ) | 98 | — | (48 | ) | 268 | |||||||||||||||||||
Income before provision for income taxes attributable to non-controlling interests | — | 28 | — | — | — | — | 28 | |||||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | $ | 31 | $ | 192 | $ | (33 | ) | $ | 98 | $ | — | $ | (48 | ) | $ | 240 | ||||||||||||
Assets | $ | 5,285 | $ | — | $ | 634 | $ | 3,958 | $ | — | $ | 3 | $ | 9,880 |
At or for the Six Months Ended June 30, 2015 | ||||||||||||||||||||||||||||
Interest income | $ | 521 | $ | 238 | $ | 35 | $ | 5 | $ | — | $ | 6 | $ | 805 | ||||||||||||||
Interest expense | 76 | 45 | 119 | 32 | (5 | ) | 62 | 329 | ||||||||||||||||||||
Provision for finance receivable losses | 108 | 37 | (3 | ) | 1 | — | 9 | 152 | ||||||||||||||||||||
Net interest income (loss) after provision for finance receivable losses | 337 | 156 | (81 | ) | (28 | ) | 5 | (65 | ) | 324 | ||||||||||||||||||
Other revenues | 106 | 5 | 6 | 6 | (5 | ) | (5 | ) | 113 | |||||||||||||||||||
Other expenses | 291 | 31 | 16 | 15 | — | 2 | 355 | |||||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes | 152 | 130 | (91 | ) | (37 | ) | — | (72 | ) | 82 | ||||||||||||||||||
Income before provision for income taxes attributable to non-controlling interests | — | 66 | — | — | — | — | 66 | |||||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | $ | 152 | $ | 64 | $ | (91 | ) | $ | (37 | ) | $ | — | $ | (72 | ) | $ | 16 | |||||||||||
Assets (b) | $ | 5,009 | $ | 1,963 | $ | 3,540 | $ | 1,729 | $ | — | $ | 64 | $ | 12,305 |
(a) | Other revenues reported in “Other” includes interest income on the Independence Demand Note and on SFC’s note receivable from SFI. See Note 9 for further information on the notes receivable from parent and affiliates. |
(b) | In connection with our policy integration with OneMain, we report unearned insurance premium and claim reserves related to finance receivables (previously reported in insurance claims and policyholder liabilities) as a contra-asset to net finance receivables, which totaled $230 million at June 30, 2015. |
Fair Value Measurements Using | Total Fair Value | Total Carrying Value | ||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||
June 30, 2016 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 263 | $ | 57 | $ | — | $ | 320 | $ | 320 | ||||||||||
Investment securities | — | 547 | 2 | 549 | 549 | |||||||||||||||
Net finance receivables, less allowance for finance receivable losses | — | — | 4,881 | 4,881 | 4,691 | |||||||||||||||
Finance receivables held for sale | — | — | 426 | 426 | 420 | |||||||||||||||
Notes receivable from parent and affiliates | — | 3,683 | — | 3,683 | 3,683 | |||||||||||||||
Restricted cash and cash equivalents | 159 | — | — | 159 | 159 | |||||||||||||||
Other assets: | ||||||||||||||||||||
Commercial mortgage loans | — | — | 50 | 50 | 50 | |||||||||||||||
Escrow advance receivable | — | — | 10 | 10 | 10 | |||||||||||||||
Receivables from parent and affiliates | — | 27 | — | 27 | 27 | |||||||||||||||
Receivables related to sales of real estate loans and related trust assets | — | 1 | — | 1 | 5 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Long-term debt | $ | — | $ | 6,943 | $ | — | $ | 6,943 | $ | 6,699 | ||||||||||
Note payable to affiliate | — | 301 | — | 301 | 301 | |||||||||||||||
Payables to parent and affiliates | — | 3 | — | 3 | 3 | |||||||||||||||
December 31, 2015 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 321 | $ | — | $ | — | $ | 321 | $ | 321 | ||||||||||
Investment securities | — | 602 | 2 | 604 | 604 | |||||||||||||||
Net finance receivables, less allowance for finance receivable losses | — | — | 6,897 | 6,897 | 6,340 | |||||||||||||||
Finance receivables held for sale | — | — | 819 | 819 | 793 | |||||||||||||||
Notes receivable from parent and affiliates | — | 3,804 | — | 3,804 | 3,804 | |||||||||||||||
Restricted cash and cash equivalents | 295 | — | — | 295 | 295 | |||||||||||||||
Other assets: | ||||||||||||||||||||
Commercial mortgage loans | — | — | 62 | 62 | 62 | |||||||||||||||
Escrow advance receivable | — | — | 11 | 11 | 11 | |||||||||||||||
Receivables from parent and affiliates | — | 9 | — | 9 | 9 | |||||||||||||||
Receivables related to sales of real estate loans and related trust assets | — | 1 | — | 1 | 5 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Long-term debt | $ | — | $ | 9,998 | $ | — | $ | 9,998 | $ | 9,582 | ||||||||||
Payables to parent and affiliates | — | 24 | — | 24 | 24 |
Fair Value Measurements Using | Total Carried At Fair Value | |||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||
June 30, 2016 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents in mutual funds | $ | 119 | $ | — | $ | — | $ | 119 | ||||||||
Cash equivalents securities | — | 57 | — | 57 | ||||||||||||
Investment securities: | ||||||||||||||||
Available-for-sale securities: | ||||||||||||||||
Bonds: | ||||||||||||||||
U.S. government and government sponsored entities | — | 42 | — | 42 | ||||||||||||
Obligations of states, municipalities, and political subdivisions | — | 84 | — | 84 | ||||||||||||
Corporate debt | — | 282 | — | 282 | ||||||||||||
RMBS | — | 38 | — | 38 | ||||||||||||
CMBS | — | 48 | — | 48 | ||||||||||||
CDO/ABS | — | 34 | — | 34 | ||||||||||||
Total bonds | — | 528 | — | 528 | ||||||||||||
Preferred stock | — | 6 | — | 6 | ||||||||||||
Other long-term investments | — | — | 1 | 1 | ||||||||||||
Total available-for-sale securities * | — | 534 | 1 | 535 | ||||||||||||
Other securities: | ||||||||||||||||
Bonds: | ||||||||||||||||
Corporate debt | — | 11 | — | 11 | ||||||||||||
CMBS | — | 2 | — | 2 | ||||||||||||
Total other securities | — | 13 | — | 13 | ||||||||||||
Total investment securities | — | 547 | 1 | 548 | ||||||||||||
Restricted cash in mutual funds | 153 | — | — | 153 | ||||||||||||
Total | $ | 272 | $ | 604 | $ | 1 | $ | 877 |
* | Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of $1 million at June 30, 2016, which is carried at cost. |
Fair Value Measurements Using | Total Carried At Fair Value | |||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||
December 31, 2015 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents in mutual funds | $ | 224 | $ | — | $ | — | $ | 224 | ||||||||
Investment securities: | ||||||||||||||||
Available-for-sale securities: | ||||||||||||||||
Bonds: | ||||||||||||||||
U.S. government and government sponsored entities | — | 82 | — | 82 | ||||||||||||
Obligations of states, municipalities, and political subdivisions | — | 89 | — | 89 | ||||||||||||
Corporate debt | — | 267 | — | 267 | ||||||||||||
RMBS | — | 74 | — | 74 | ||||||||||||
CMBS | — | 44 | — | 44 | ||||||||||||
CDO/ABS | — | 29 | — | 29 | ||||||||||||
Total bonds | — | 585 | — | 585 | ||||||||||||
Preferred stock | — | 5 | — | 5 | ||||||||||||
Other long-term investments | — | — | 1 | 1 | ||||||||||||
Total available-for-sale securities (a) | — | 590 | 1 | 591 | ||||||||||||
Trading and other securities: | ||||||||||||||||
Bonds: | ||||||||||||||||
Corporate debt | — | 10 | — | 10 | ||||||||||||
CMBS | — | 2 | — | 2 | ||||||||||||
Total trading and other securities (b) | — | 12 | — | 12 | ||||||||||||
Total investment securities | — | 602 | 1 | 603 | ||||||||||||
Restricted cash in mutual funds | 276 | — | — | 276 | ||||||||||||
Total | $ | 500 | $ | 602 | $ | 1 | $ | 1,103 |
(a) | Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of $1 million at December 31, 2015, which is carried at cost. |
(b) | The fair value of other securities totaled $2 million at December 31, 2015. |
Net gains (losses) included in: | Purchases, sales, issues, settlements (a) | Transfers into Level 3 | Transfers out of Level 3 (b) | Balance at end of period | ||||||||||||||||||||||||
Balance at beginning of period | Other revenues | Other comprehensive income (loss) | ||||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||
Three Months Ended June 30, 2016 | ||||||||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||
Other long-term investments | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1 | ||||||||||||||
Total | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1 | ||||||||||||||
Three Months Ended June 30, 2015 | ||||||||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||||
Corporate debt | $ | 4 | $ | — | $ | — | $ | (4 | ) | $ | — | $ | — | $ | — | |||||||||||||
Other long-term investments | 1 | — | — | — | — | — | 1 | |||||||||||||||||||||
Total | $ | 5 | $ | — | $ | — | $ | (4 | ) | $ | — | $ | — | $ | 1 |
Six Months Ended June 30, 2016 | ||||||||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||
Other long-term investments | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1 | ||||||||||||||
Total | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1 | ||||||||||||||
Six Months Ended June 30, 2015 | ||||||||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||||
Corporate debt | $ | 4 | $ | — | $ | — | $ | (4 | ) | $ | — | $ | — | $ | — | |||||||||||||
CMBS | 3 | — | — | — | — | (3 | ) | — | ||||||||||||||||||||
Total bonds | 7 | — | — | (4 | ) | — | (3 | ) | — | |||||||||||||||||||
Other long-term investments | 1 | — | — | — | — | — | 1 | |||||||||||||||||||||
Total | $ | 8 | $ | — | $ | — | $ | (4 | ) | $ | — | $ | (3 | ) | $ | 1 |
(a) | “Purchases, sales, issues, and settlements” column consisted only of settlements. |
(b) | During the six months ended June 30, 2015, we transferred CMBS securities totaling $3 million out of Level 3 primarily related to the greater observability of pricing inputs. |
Range (Weighted Average) | ||||
Valuation Technique(s) | Unobservable Input | June 30, 2016 | December 31, 2015 | |
RMBS | Discounted cash flows | Spread | — | 665 bps (a) |
Other long-term investments | Discounted cash flows and indicative valuations | Historical costs Nature of investment Local market conditions Comparables Operating performance Recent financing activity | (b) | (b) |
(a) | At December 31, 2015, RMBS consisted of one bond, which was less than $1 million. |
(b) | We applied the third-party exception which allows us to omit certain quantitative disclosures about unobservable inputs for other long-term investments. As a result, the weighted average ranges of the inputs for these investment securities are not applicable. |
Fair Value Measurements Using * | ||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
June 30, 2016 | ||||||||||||||||
Assets | ||||||||||||||||
Finance receivables held for sale | $ | — | $ | — | $ | 163 | $ | 163 | ||||||||
Real estate owned | — | — | 8 | 8 | ||||||||||||
Commercial mortgage loans | — | — | 8 | 8 | ||||||||||||
Total | $ | — | $ | — | $ | 179 | $ | 179 | ||||||||
December 31, 2015 | ||||||||||||||||
Assets | ||||||||||||||||
Real estate owned | $ | — | $ | — | $ | 11 | $ | 11 | ||||||||
Commercial mortgage loans | — | — | 8 | 8 | ||||||||||||
Total | $ | — | $ | — | $ | 19 | $ | 19 |
* | The fair value information presented in the table is as of the date the fair value adjustment was recorded. |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Assets | ||||||||||||||||
Finance receivables held for sale | $ | 5 | $ | — | $ | 5 | $ | — | ||||||||
Real estate owned | — | 1 | 1 | 2 | ||||||||||||
Commercial mortgage loans | — | (2 | ) | 1 | (2 | ) | ||||||||||
Total | $ | 5 | $ | (1 | ) | $ | 7 | $ | — |
Range (Weighted Average) | ||||
Valuation Technique(s) | Unobservable Input | June 30, 2016 | December 31, 2015 | |
Finance receivables held for sale | Income approach | Market value for similar type loan transactions to obtain a price point | * | * |
Real estate owned | Market approach | Third-party valuation | * | * |
Commercial mortgage loans | Market approach Income approach Cost approach | Local market conditions Nature of investment Comparable property sales Operating performance | * | * |
* | We applied the third-party exception which allows us to omit certain quantitative disclosures about unobservable inputs for the assets measured at fair value on a non-recurring basis included in the table above. As a result, the weighted average ranges of the inputs for these assets are not applicable. |
Topic | Page | |
• | various uncertainties and risks in connection with the OneMain Acquisition which may result in an adverse impact on us; |
• | risks relating to continued compliance with the previously disclosed Settlement Agreement; |
• | changes in general economic conditions, including the interest rate environment in which we conduct business and the financial markets through which we can access capital and also invest cash flows from our Consumer and Insurance segment; |
• | levels of unemployment and personal bankruptcies; |
• | natural or accidental events such as earthquakes, hurricanes, tornadoes, fires, or floods affecting our customers, collateral, or branches or other operating facilities; |
• | war, acts of terrorism, riots, civil disruption, pandemics, disruptions in the operation of our information systems, cyber security breaches, or other events disrupting business or commerce; |
• | changes in the rate at which we can collect or potentially sell our finance receivables portfolio; |
• | the effectiveness of our credit risk scoring models in assessing the risk of customer unwillingness or lack of capacity to repay; |
• | changes in our ability to attract and retain employees or key executives to support our businesses; |
• | changes in the competitive environment in which we operate, including the demand for our products, customer responsiveness to our distribution channels, our ability to make technological improvements, and the strength and ability of our competitors to operate independently or to enter into business combinations that result in a more attractive range of customer products or provide greater financial resources; |
• | risks related to the acquisition of loan portfolios, including delinquencies, integration issues, increased costs of servicing, incomplete records, and retention of customers; |
• | risks associated with our insurance operations; |
• | the inability to successfully implement our growth strategy for our consumer lending business as well as successfully acquiring portfolios of consumer loans, pursuing acquisitions, and/or establishing joint ventures; |
• | shifts in collateral values, delinquencies, or credit losses; |
• | changes in federal, state or local laws, regulations, or regulatory policies and practices, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (which, among other things, established the Consumer Financial Protection Bureau, which has broad authority to regulate and examine financial institutions, including us), that affect our ability to conduct business or the manner in which we conduct business, such as licensing requirements, pricing limitations or restrictions on the method of offering products, as well as changes that may result from increased regulatory scrutiny of the sub-prime lending industry, our use of third-party vendors and real estate loan servicing; |
• | potential liability relating to real estate and personal loans which we have sold or may sell in the future, or relating to securitized loans, if it is determined that there was a non-curable breach of a representation or warranty made in connection with such transactions; |
• | the costs and effects of any actual or alleged violations of any federal, state or local laws, rules or regulations, including any litigation associated therewith, any impact to our business operations, reputation, financial position, results of operations or cash flows arising therefrom, any impact to our relationships with lenders, investors or other third parties attributable thereto, and the costs and effects of any breach of any representation, warranty or covenant under any of our contractual arrangements, including indentures or other financing arrangements or contracts, as a result of any such violation; |
• | the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority and any litigation associated therewith; |
• | our continued ability to access the capital markets or the sufficiency of our current sources of funds to satisfy our cash flow requirements; |
• | our ability to comply with our debt covenants; |
• | our ability to generate sufficient cash to service all of our indebtedness; |
• | the effects of any downgrade of our debt ratings by credit rating agencies, which could have a negative impact on our cost of and/or access to capital; |
• | our substantial indebtedness, which could prevent us from meeting our obligations under our debt instruments and limit our ability to react to changes in the economy or our industry, or our ability to incur additional borrowings; |
• | the impacts of our securitizations and borrowings; |
• | our ability to maintain sufficient capital levels in our regulated and unregulated subsidiaries; |
• | changes in accounting standards or tax policies and practices and the application of such new policies and practices to the manner in which we conduct business; |
• | any failure or inability to achieve the SpringCastle Portfolio performance requirements set forth in the SpringCastle Interests Sale purchase agreement; and |
• | the effect of future sales of our remaining portfolio of real estate loans and the transfer of servicing of these loans, 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 two to five years and are secured by consumer goods, automobiles, or other personal property or are unsecured. At June 30, 2016, we had nearly 923,000 personal loans, representing $4.7 billion of net finance receivables, of which 79% were secured by collateral, compared to 890,000 personal loans totaling $4.3 billion at December 31, 2015, of which 74% were secured by collateral. Personal loans held for sale totaled $617 million at December 31, 2015. |
• | Insurance Products — We offer our customers credit insurance (life insurance, disability insurance, and involuntary unemployment insurance) and non-credit insurance through both our branch network and our centralized operations. Credit insurance and non-credit insurance products are provided by our subsidiaries, Merit Life Insurance Co. (“Merit”) and Yosemite Insurance Company (“Yosemite”). We also offer auto warranty membership plans of an unaffiliated company as an ancillary product. |
• | SpringCastle Portfolio — SFI services the SpringCastle Portfolio that was acquired by an indirect subsidiary of OMH through a joint venture in which SFC owned a 47% equity interest. On March 31, 2016, the SpringCastle Portfolio was sold in connection with the SpringCastle Interests Sale. These loans consisted of unsecured loans and loans secured by subordinate residential real estate mortgages and include both closed-end accounts and open-end lines of credit. These loans were in a liquidating status and varied in substance and form from our originated loans. Unless terminated, SFI will continue to provide the servicing for these loans, which we service as unsecured loans due to the fact that the liens are subordinated to superior ranking security interests. |
• | Real Estate Loans — We ceased real estate lending in January of 2012, and during 2014, we sold $6.3 billion real estate loans held for sale. The remaining real estate loans may be closed-end accounts or open-end home equity lines of credit, generally have a fixed rate and maximum original terms of 360 months, and are secured by first or second |
• | Retail Sales Finance — We ceased purchasing retail sales contracts and revolving retail accounts in January of 2013. We continue to service the liquidating retail sales contracts and will provide revolving retail sales financing services on our revolving retail accounts. We refer to retail sales contracts and revolving retail accounts collectively as “retail sales finance.” |
• | Consumer and Insurance; |
• | Acquisitions and Servicing; and |
• | Real Estate. |
• | Reducing leverage; |
• | Maintaining a strong liquidity level and diversified funding sources; and |
• | Optimizing non-core assets. |
(dollars in millions) | Three Months Ended June 30, | At or for the Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest income | $ | 313 | $ | 406 | $ | 744 | $ | 805 | ||||||||
Interest expense | 138 | 171 | 294 | 329 | ||||||||||||
Provision for finance receivable losses | 85 | 73 | 176 | 152 | ||||||||||||
Net interest income after provision for finance receivable losses | 90 | 162 | 274 | 324 | ||||||||||||
Net gain on sale of SpringCastle interests | — | — | 167 | — | ||||||||||||
Other revenues | 106 | 59 | 195 | 113 | ||||||||||||
Other expenses | 177 | 186 | 368 | 355 | ||||||||||||
Income before provision for income taxes | 19 | 35 | 268 | 82 | ||||||||||||
Provision for income taxes | 6 | — | 91 | 9 | ||||||||||||
Net income | 13 | 35 | 177 | 73 | ||||||||||||
Net income attributable to non-controlling interests | — | 33 | 28 | 66 | ||||||||||||
Net income attributable to SFC | $ | 13 | $ | 2 | $ | 149 | $ | 7 | ||||||||
Selected Financial Statistics | ||||||||||||||||
Finance receivables held for investment: | ||||||||||||||||
Net finance receivables | $ | 4,888 | $ | 6,756 | ||||||||||||
Number of accounts | 930,587 | 1,231,810 | ||||||||||||||
Finance receivables held for sale: | ||||||||||||||||
Net finance receivables | $ | 420 | $ | 191 | ||||||||||||
Number of accounts | 15,596 | 3,368 | ||||||||||||||
Finance receivables held for investment and held for sale: | ||||||||||||||||
Average net receivables * | $ | 5,280 | $ | 6,630 | $ | 6,213 | $ | 6,579 | ||||||||
Yield * | 23.52 | % | 24.29 | % | 23.82 | % | 24.36 | % | ||||||||
Gross charge-off ratio * | 6.78 | % | 5.12 | % | 6.42 | % | 5.33 | % | ||||||||
Recovery ratio * | (0.95 | )% | (0.89 | )% | (0.89 | )% | (0.82 | )% | ||||||||
Net charge-off ratio * | 5.83 | % | 4.23 | % | 5.53 | % | 4.51 | % | ||||||||
Delinquency ratio * | 3.39 | % | 3.09 | % | ||||||||||||
Origination volume | $ | 1,016 | $ | 1,194 | $ | 1,977 | $ | 2,074 | ||||||||
Number of accounts originated | 168,538 | 218,743 | 323,297 | 374,266 |
* | See “Key Financial Definitions” at the end of our management's discussion and analysis for formulas of key performance ratios. |
(dollars in millions) | |||
Three Months Ended June 30, 2016 compared to 2015 | |||
Decrease in average net receivables | $ | (101 | ) |
Decrease in yield | (6 | ) | |
Increase in interest income on finance receivables held for sale | 14 | ||
Total | $ | (93 | ) |
• | Average net receivables decreased for the three months ended June 30, 2016 primarily due to (i) the SpringCastle Interests Sale, (ii) the transfer of $608 million of our personal loans to finance receivables held for sale on September 30, 2015 as part of OMH’s initiative to close the OneMain Acquisition, and (iii) our liquidating real estate loan portfolio. This decrease was partially offset by higher personal loan average net receivables resulting from (i) our continued focus on personal loan originations through our branch network and centralized operations and (ii) the continued growth of our auto secured personal loans. |
• | Yield decreased for the three months ended June 30, 2016 primarily due to the continued growth of our auto secured personal loans, which generally have lower yields relative to our other personal loans. |
• | Interest income on finance receivables held for sale increased for the three months ended June 30, 2016 primarily due to higher average finance receivables held for sale during the 2016 period resulting from the transfer of $608 million of our personal loans to held for sale on September 30, 2015, which were sold on May 2, 2016. |
(dollars in millions) | |||
Three Months Ended June 30, 2016 compared to 2015 | |||
Decrease in average debt | $ | (47 | ) |
Increase in weighted average interest rate | 12 | ||
Interest expense on note payable to affiliate | 2 | ||
Total | $ | (33 | ) |
• | Average debt decreased for the three months ended June 30, 2016 primarily due to (i) the elimination of the debt associated with our SpringCastle securitization as a result of the SpringCastle Interests Sale and the resulting deconsolidation of the securitization trust holding the underlying loans of the SpringCastle Portfolio and previously issued securitized interests, which were reported in long-term debt and (ii) net debt repurchases and repayment during the past 12 months relating to our consumer securitization transactions. This decrease was partially offset by (i) net debt issued in connection with SFC’s offering of the 8.25% SFC Notes in April of 2016 and (ii) additional borrowings under our conduit facilities. See Notes 10 and 11 of the Notes to Condensed Consolidated Financial Statements for further information on our long-term debt, consumer loan securitization transactions, and borrowings under our conduit facilities. |
• | Weighted average interest rate on our debt increased for the three months ended June 30, 2016 primarily due to (i) SFC’s offering of the 8.25% SFC Notes in April of 2016 and (ii) the elimination of debt associated with our SpringCastle securitization discussed above, which generally had a lower interest rate relative to our other indebtedness. |
• | Interest expense on note payable to affiliate resulted from a revolving demand note agreement between SFC and OMFH, entered into on December 1, 2015. See Note 9 of the Notes to Condensed Consolidated Financial Statements for further information on this note. |
• | Salaries and benefits decreased $13 million for the three months ended June 30, 2016 primarily due to non-cash incentive compensation expense of $15 million recorded in the second quarter of 2015 relating to the rights of certain executives to receive a portion of the cash proceeds from the sale of OMH’s common stock by the Initial Stockholder. This decrease was partially offset by higher salary accruals during the 2016 period resulting from an increase in the number of employees. |
• | Other operating expenses increased $9 million for the three months ended June 30, 2016 primarily due to (i) higher professional fees in the 2016 period reflecting debt refinance costs and increased business efforts, (ii) a $5 million reduction in reserves related to estimated Payment Protection Insurance claims that occurred in the 2015 period, and (iii) higher advertising expenses in the 2016 period due to increased direct mailings to pre-approved customers and increased use of promotions. This increase was partially offset by three months of servicing expenses for the SpringCastle Portfolio during the 2015 period. |
• | Insurance policy benefits and claims decreased $5 million for the three months ended June 30, 2016 primarily due to favorable variances in benefits incurred during the 2016 period. |
(dollars in millions) | |||
Six Months Ended June 30, 2016 compared to 2015 | |||
Decrease in average net receivables | $ | (109 | ) |
Decrease in yield | (11 | ) | |
Increase in number of days in 2016 | 3 | ||
Increase in interest income on finance receivables held for sale | 56 | ||
Total | $ | (61 | ) |
• | Average net receivables decreased for the six months ended June 30, 2016 primarily due to (i) the SpringCastle Interests Sale and the liquidating status of the previously owned SpringCastle Portfolio, (ii) the transfer of $608 |
• | Yield decreased for the six months ended June 30, 2016 primarily due to the continued growth of our auto secured personal loans, which generally have lower yields relative to our other personal loans. |
• | Interest income on finance receivables held for sale increased for the six months ended June 30, 2016 primarily due to higher average finance receivables held for sale during the 2016 period resulting from the transfer of $608 million of our personal loans to held for sale on September 30, 2015, which were sold on May 2, 2016. |
(dollars in millions) | |||
Six Months Ended June 30, 2016 compared to 2015 | |||
Decrease in average debt | $ | (38 | ) |
Decrease in weighted average interest rate | (3 | ) | |
Interest expense on note payable to affiliate | 6 | ||
Total | $ | (35 | ) |
• | Average debt decreased for the six months ended June 30, 2016 primarily due to (i) the elimination of the debt associated with our SpringCastle securitization as a result of the SpringCastle Interests Sale and the resulting deconsolidation of the securitization trust holding the underlying loans of the SpringCastle Portfolio and previously issued securitized interests, which were reported in long-term debt and (ii) net debt repurchases and repayment during the past 12 months relating to our consumer securitization transactions. This decrease was partially offset by (i) net debt issued in connection with SFC’s offering of the 8.25% SFC Notes in April of 2016 and (ii) additional borrowings under our conduit facilities. See Notes 10 and 11 of the Notes to Condensed Consolidated Financial Statements for further information on our long-term debt, consumer loan securitization transactions, and borrowings under our conduit facilities. |
• | Weighted average interest rate on our debt decreased for the six months ended June 30, 2016 primarily due to additional borrowings under our conduit facilities, which generally have lower interest rates relative to our other indebtedness. |
• | Interest expense on note payable to affiliate resulted from a revolving demand note agreement between SFC and OMFH, entered into on December 1, 2015. See Note 9 of the Notes to Condensed Consolidated Financial Statements for further information on this note. |
• | Salaries and benefits increased $4 million for the six months ended June 30, 2016 primarily due to higher salary accruals in the 2016 period resulting from an increase in the number of employees. This increase was partially offset by non-cash incentive compensation expense of $15 million recorded in the second quarter of 2015 relating to the rights of certain executives to receive a portion of the cash proceeds from the sale of OMH’s common stock by the Initial Stockholder. |
• | Other operating expenses increased $13 million for the six months ended June 30, 2016 primarily due to (i) higher professional fees in the 2016 period reflecting debt refinance costs and increased business efforts, (ii) higher advertising expenses in the 2016 period due to increased focus on e-commerce, increased direct mailings to pre-approved customers, and increased use of promotions, and (iii) higher information technology expenses in the 2016 period. This increase was partially offset by three additional months of servicing expenses for the SpringCastle Portfolio during the 2015 period. |
• | Insurance policy benefits and claims decreased $4 million for the six months ended June 30, 2016 primarily due to favorable variances in benefits incurred during the 2016 period. |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Income before provision for income taxes attributable to SFC - GAAP basis | $ | 19 | $ | 2 | $ | 240 | $ | 16 | ||||||||
GAAP to Segment Accounting Basis adjustments: (a) (b) | ||||||||||||||||
Interest income | (2 | ) | (3 | ) | (4 | ) | (6 | ) | ||||||||
Interest expense | 22 | 32 | 46 | 62 | ||||||||||||
Provision for finance receivable losses | — | 7 | 2 | 9 | ||||||||||||
Other revenues | 10 | 3 | 5 | 5 | ||||||||||||
Other expenses | (1 | ) | 1 | (1 | ) | 2 | ||||||||||
Income before provision for income taxes attributable to SFC - Segment Accounting Basis | $ | 48 | $ | 42 | $ | 288 | $ | 88 |
(a) | The GAAP to Segment Accounting Basis adjustments primarily consists of: |
• | Interest income - the net purchase accounting impact of the amortization (accretion) of the net premium (discount) assigned to finance receivables and the impact of identifying purchased credit impaired finance receivables as compared to the historical values of finance receivables; |
• | Interest expense - the accretion of the net discount applied to our long-term debt as part of purchase accounting; |
• | Provision for finance receivable losses - the adjustment to reflect the difference between our allowance adjustment calculated under a Segment Accounting Basis and purchase accounting basis; |
• | Other revenues - the impact of carrying value differences between a Segment Accounting Basis and purchase accounting basis when measuring mark to market for loans held for sale and realized gains/losses associated with our investment portfolio; and |
• | Other expenses - the net impact of amortization associated with identified intangibles as part of purchase accounting and deferred costs impacted by purchase accounting. |
(b) | Purchase accounting was not elected at the segment level. |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Consumer and Insurance | ||||||||||||||||
Income before provision for income taxes - Segment Accounting Basis | $ | 17 | $ | 82 | $ | 31 | $ | 152 | ||||||||
Adjustments: | ||||||||||||||||
Net gain on sale of personal loans | (22 | ) | — | (22 | ) | — | ||||||||||
Net loss from accelerated repayment/repurchase of debt | 5 | — | 7 | — | ||||||||||||
Debt refinance costs | 4 | — | 4 | — | ||||||||||||
Adjusted pretax earnings (non-GAAP) | $ | 4 | $ | 82 | $ | 20 | $ | 152 | ||||||||
Acquisitions and Servicing | ||||||||||||||||
Income (loss) before provision for (benefit from) income taxes attributable to SFC - Segment Accounting Basis | $ | (1 | ) | $ | 29 | $ | 192 | $ | 64 | |||||||
Adjustments: | ||||||||||||||||
Net gain on sale of SpringCastle interests | — | — | (167 | ) | — | |||||||||||
SpringCastle transaction costs | — | — | 1 | — | ||||||||||||
Adjusted pretax earnings (loss) attributable to SFC (non-GAAP) | $ | (1 | ) | $ | 29 | $ | 26 | $ | 64 | |||||||
Real Estate | ||||||||||||||||
Loss before benefit from income taxes - Segment Accounting Basis | $ | (15 | ) | $ | (43 | ) | $ | (33 | ) | $ | (91 | ) | ||||
Adjustments: | ||||||||||||||||
Net loss from accelerated repayment/repurchase of debt | 1 | — | 1 | — | ||||||||||||
Debt refinance costs | 1 | — | 1 | — | ||||||||||||
Adjusted pretax loss (non-GAAP) | $ | (13 | ) | $ | (43 | ) | $ | (31 | ) | $ | (91 | ) | ||||
Other | ||||||||||||||||
Adjusted pretax earnings (loss) (non-GAAP) | $ | 47 | $ | (26 | ) | $ | 98 | $ | (37 | ) | ||||||
Total | ||||||||||||||||
Income before provision for income taxes attributable to SFC - Segment Accounting Basis | $ | 48 | $ | 42 | $ | 288 | $ | 88 | ||||||||
Adjustments: | ||||||||||||||||
Net gain on sale of SpringCastle interests | — | — | (167 | ) | — | |||||||||||
Net gain on sale of personal loans | (22 | ) | — | (22 | ) | — | ||||||||||
Net loss from accelerated repayment/repurchase of debt | 6 | — | 8 | — | ||||||||||||
Debt refinance costs | 5 | — | 5 | — | ||||||||||||
SpringCastle transaction costs | — | — | 1 | — | ||||||||||||
Total adjusted pretax earnings attributable to SFC (non-GAAP) | $ | 37 | $ | 42 | $ | 113 | $ | 88 |
(dollars in millions) | Three Months Ended June 30, | At or for the Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest income | $ | 295 | $ | 267 | $ | 606 | $ | 521 | ||||||||
Interest expense | 99 | 36 | 194 | 76 | ||||||||||||
Provision for finance receivable losses | 83 | 53 | 156 | 108 | ||||||||||||
Net interest income after provision for finance receivable losses | 113 | 178 | 256 | 337 | ||||||||||||
Other revenues | 54 | 55 | 101 | 106 | ||||||||||||
Other expenses | 163 | 151 | 337 | 291 | ||||||||||||
Adjusted pretax earnings (non-GAAP) | $ | 4 | $ | 82 | $ | 20 | $ | 152 | ||||||||
Selected Financial Statistics | ||||||||||||||||
Finance receivables held for investment: | ||||||||||||||||
Net finance receivables | $ | 4,651 | $ | 4,234 | ||||||||||||
Number of accounts | 920,739 | 944,792 | ||||||||||||||
Finance receivables held for investment and held for sale: | ||||||||||||||||
Average net receivables * | $ | 4,744 | $ | 4,043 | $ | 4,835 | $ | 3,921 | ||||||||
Yield * | 25.01 | % | 26.52 | % | 25.27 | % | 26.71 | % | ||||||||
Gross charge-off ratio * | 7.25 | % | 5.81 | % | 7.24 | % | 6.10 | % | ||||||||
Recovery ratio * | (0.93 | )% | (0.98 | )% | (0.90 | )% | (0.88 | )% | ||||||||
Net charge-off ratio * | 6.32 | % | 4.83 | % | 6.34 | % | 5.22 | % | ||||||||
Delinquency ratio * | 2.81 | % | 2.38 | % | ||||||||||||
Origination volume | $ | 1,015 | $ | 1,171 | $ | 1,958 | $ | 2,031 | ||||||||
Number of accounts originated | 168,538 | 218,743 | 323,297 | 374,266 |
* | See “Key Financial Definitions” at the end of our management's discussion and analysis for formulas of key performance ratios. |
• | Finance charges increased $14 million for the three months ended June 30, 2016 primarily due to the net of the following: |
◦ | Average net receivables increased for the three months ended June 30, 2016 primarily due to the higher proportion of auto secured personal loans, which generally have larger original loan balances. At June 30, |
◦ | Yield decreased for the three months ended June 30, 2016 primarily due to the continued growth of auto secured personal loans, which generally have lower yields relative to our other personal loans. |
• | Interest income on finance receivables held for sale of $14 million for the three months ended June 30, 2016 resulted from the transfer of personal loans to finance receivables held for sale on September 30, 2015 and subsequently sold on May 2, 2016. |
• | Salaries and benefits increased $3 million for the three months ended June 30, 2016 primarily due to increased staffing in the 2016 period. |
• | Other operating expenses increased $13 million for the three months ended June 30, 2016 primarily due to (i) higher professional fees in the 2016 period reflecting debt refinance costs and increased business efforts, (ii) higher advertising expenses in the 2016 period reflecting increased direct mailings to pre-approved customers and increased use of promotions, (iii) higher information technology expenses in the 2016 period, and (iv) higher credit and collection related costs in the 2016 period reflecting growth in personal loans, including our auto secured personal loans. |
• | Insurance policy benefits and claims decreased $4 million for the three months ended June 30, 2016 primarily due to favorable variances in benefits incurred during the 2016 period. |
• | Finance charges increased $29 million for the six months ended June 30, 2016 primarily due to the net of the following: |
◦ | Average net receivables increased for the six months ended June 30, 2016 primarily due to the higher proportion of auto secured personal loans, which generally have larger original loan balances. At June 30, 2016, we had over 93,000 auto secured personal loans totaling $1.1 billion compared to over 52,000 auto secured personal loans totaling $630 million at June 30, 2015. |
◦ | Yield decreased for the six months ended June 30, 2016 primarily due to the continued growth of auto secured personal loans, which generally have lower yields relative to our other personal loans. |
• | Interest income on finance receivables held for sale of $56 million for the six months ended June 30, 2016 resulted from the transfer of personal loans to finance receivables held for sale on September 30, 2015 and subsequently sold on May 2, 2016. |
• | Salaries and benefits increased $18 million for the six months ended June 30, 2016 primarily due to increased staffing in the 2016 period. |
• | Other operating expenses increased $31 million for the six months ended June 30, 2016 primarily due to (i) higher advertising expenses in the 2016 period reflecting increased focus on e-commerce, increased direct mailings to pre-approved customers, and increased use of promotions, (ii) higher professional fees in the 2016 period reflecting debt refinance costs and increased business efforts, (iii) higher information technology expenses in the 2016 period, and (iv) higher credit and collection related costs in the 2016 period reflecting growth in personal loans, including our auto secured personal loans. |
• | Insurance policy benefits and claims decreased $3 million for the six months ended June 30, 2016 primarily due to favorable variances in benefits incurred during the 2016 period. |
(dollars in millions) | Three Months Ended June 30, | At or for the Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest income | $ | — | $ | 116 | $ | 102 | $ | 238 | ||||||||
Interest expense | — | 22 | 20 | 45 | ||||||||||||
Provision for finance receivable losses | — | 17 | 14 | 37 | ||||||||||||
Net interest income after provision for finance receivable losses | — | 77 | 68 | 156 | ||||||||||||
Other revenues | — | — | — | 5 | ||||||||||||
Other expenses | 1 | 15 | 14 | 31 | ||||||||||||
Adjusted pretax earnings (loss) (non-GAAP) | (1 | ) | 62 | 54 | 130 | |||||||||||
Pretax earnings attributable to non-controlling interests | — | 33 | 28 | 66 | ||||||||||||
Adjusted pretax earnings (loss) attributable to SFC (non-GAAP) | $ | (1 | ) | $ | 29 | $ | 26 | $ | 64 | |||||||
Selected Financial Statistics | ||||||||||||||||
Finance receivables held for investment: | ||||||||||||||||
Net finance receivables | $ | — | $ | 1,883 | ||||||||||||
Number of accounts | — | 253,351 | ||||||||||||||
Average net receivables * | $ | — | $ | 1,932 | 828 | 1,984 | ||||||||||
Yield * | — | % | 24.13 | % | 24.32 | % | 24.20 | % | ||||||||
Net charge-off ratio * | — | % | 3.62 | % | 3.50 | % | 3.70 | % | ||||||||
Delinquency ratio * | — | % | 3.75 | % |
* | See “Key Financial Definitions” at the end of our management's discussion and analysis for formulas of key performance ratios. |
(dollars in millions) | Three Months Ended June 30, | At or for the Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest income | $ | 15 | $ | 17 | $ | 30 | $ | 35 | ||||||||
Interest expense (a) | 14 | 59 | 27 | 119 | ||||||||||||
Provision for finance receivable losses | 2 | (5 | ) | 4 | (3 | ) | ||||||||||
Net interest loss after provision for finance receivable losses | (1 | ) | (37 | ) | (1 | ) | (81 | ) | ||||||||
Other revenues (b) | (6 | ) | 3 | (17 | ) | 6 | ||||||||||
Other expenses | 6 | 9 | 13 | 16 | ||||||||||||
Adjusted pretax loss (non-GAAP) | $ | (13 | ) | $ | (43 | ) | $ | (31 | ) | $ | (91 | ) | ||||
Selected Financial Statistics | ||||||||||||||||
Finance receivables held for investment: | ||||||||||||||||
Net finance receivables | $ | 219 | $ | 619 | ||||||||||||
Number of accounts | 2,888 | 20,121 | ||||||||||||||
Average net receivables (c) | $ | 531 | $ | 632 | $ | 543 | $ | 646 | ||||||||
Yield (c) | 8.75 | % | 8.96 | % | 8.74 | % | 9.10 | % | ||||||||
Loss ratio (c) | 2.50 | % | 3.79 | % | 2.78 | % | 4.23 | % | ||||||||
Delinquency ratio (c) (d) | 17.67 | % | 6.34 | % | ||||||||||||
Finance receivables held for sale: | ||||||||||||||||
Net finance receivables | $ | 428 | $ | 191 | ||||||||||||
Number of accounts | 15,596 | 3,368 |
(a) | Interest expense decreased $45 million and $92 million for the three and six months ended June 30, 2016, respectively, when compared to the same periods in 2015 primarily due to a change in the methodology of allocating interest expense, as previously described in the allocation methodologies table. |
(b) | Other revenues decreased $9 million and $23 million for the three and six months ended June 30, 2016, respectively, when compared to the same periods in 2015 primarily due to (i) impairments of $3 million and $10 million recognized on our real estate loans held for sale during the three and six months ended June 30, 2016, respectively, and (ii) a decrease in investment revenues during the 2016 periods, as the prior periods reflected higher investment income generated from investing the proceeds of the 2014 real estate loan sales. |
(c) | See “Key Financial Definitions” at the end of our management's discussion and analysis for formulas of key performance ratios. |
(d) | Delinquency ratio at June 30, 2016 reflected the retained real estate loan portfolio that was not eligible for sale. |
(dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest income | $ | 1 | $ | 3 | $ | 2 | $ | 5 | ||||||||
Interest expense (a) | 3 | 22 | 7 | 32 | ||||||||||||
Provision for finance receivable losses | — | 1 | — | 1 | ||||||||||||
Net interest loss after provision for finance receivable losses | (2 | ) | (20 | ) | (5 | ) | (28 | ) | ||||||||
Other revenues (b) | 52 | 4 | 102 | 6 | ||||||||||||
Other expenses (c) | 3 | 10 | (1 | ) | 15 | |||||||||||
Adjusted pretax earnings (loss) (non-GAAP) | $ | 47 | $ | (26 | ) | $ | 98 | $ | (37 | ) |
(a) | Interest expense for the three and six months ended June 30, 2016 when compared to the same periods in 2015 reflected a change in the methodology of allocating interest expense, as previously described in the allocation methodologies table. |
(b) | Other revenues for the three and six months ended June 30, 2016 included (i) interest income on the Independence Demand Note and (ii) higher interest income on SFC’s note receivable from SFI reflecting additional SFI borrowings during the 2016 period to fund the operations of its subsidiaries. See Note 9 of the Notes to Condensed Consolidated Financial Statements for further information on the Independence Demand Note. |
(c) | In connection with the sale of our common stock by the Initial Stockholder, we recorded non-cash incentive compensation expense of $15 million in the second quarter of 2015 relating to the rights of certain executives to receive a portion of the cash proceeds received by the Initial Stockholder. |
(dollars in millions) | June 30, | |||||||
2016 | 2015 | |||||||
Net finance receivables: | ||||||||
Personal loans | $ | 13 | $ | 22 | ||||
Retail sales finance | 17 | 34 | ||||||
Total | $ | 30 | $ | 56 |
(dollars in millions) | Personal Loans * | SpringCastle Portfolio | Real Estate Loans * | Total | ||||||||||||
June 30, 2016 | ||||||||||||||||
TDR net finance receivables | $ | 34 | $ | — | $ | 202 | $ | 236 | ||||||||
Allowance for TDR finance receivable losses | $ | 11 | $ | — | $ | 12 | $ | 23 | ||||||||
Number of TDR accounts | 10,768 | — | 3,512 | 14,280 | ||||||||||||
December 31, 2015 | ||||||||||||||||
TDR net finance receivables | $ | 31 | $ | 13 | $ | 201 | $ | 245 | ||||||||
Allowance for TDR finance receivable losses | $ | 9 | $ | 4 | $ | 34 | $ | 47 | ||||||||
Number of TDR accounts | 10,542 | 1,656 | 3,506 | 15,704 |
* | TDR finance receivables held for sale included in the table above were as follows: |
(dollars in millions) | Personal Loans | Real Estate Loans | Total | |||||||||
June 30, 2016 | ||||||||||||
TDR net finance receivables | $ | — | $ | 155 | $ | 155 | ||||||
Number of TDR accounts | — | 2,857 | 2,857 | |||||||||
December 31, 2015 | ||||||||||||
TDR net finance receivables | $ | 2 | $ | 92 | $ | 94 | ||||||
Number of TDR accounts | 738 | 1,322 | 2,060 |
• | On July 19, 2016, we completed a private securitization transaction in which ODART 2016-1, a wholly owned special purpose vehicle of SFC, issued $754 million principal amount of notes backed by auto secured personal loans with an aggregate UPB of $754 million as of June 30, 2016. $700 million principal amount of the notes issued by ODART 2016-1, represented by Classes A, B and C, were sold to unaffiliated parties at a weighted average interest rate of 2.27%, and $54 million principal amount of Class D notes were retained. |
• | our inability to grow or maintain our personal loan portfolio with adequate profitability; |
• | the effect of federal, state and local laws, regulations, or regulatory policies and practices; |
• | potential liability relating to real estate and personal loans which we have sold or may sell in the future, or relating to securitized loans; and |
• | the potential for disruptions in the debt and equity markets. |
• | maintaining disciplined underwriting standards and pricing for loans we originate or purchase and managing purchases of finance receivables; |
• | pursuing additional debt financings (including new securitizations and new unsecured debt issuances, debt refinancing transactions and standby funding facilities), or a combination of the foregoing; |
• | purchasing portions of our outstanding indebtedness through open market or privately negotiated transactions with third parties or pursuant to one or more tender or exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration, as we may determine; and |
• | obtaining secured revolving credit facilities to allow us to use excess cash to pay down higher cost debt. |
(dollars in millions) | Initial Note Amounts Issued (a) | Initial Collateral Balance (b) | Current Note Amounts Outstanding | Current Collateral Balance (b) | Current Weighted Average Interest Rate | Collateral Type | Revolving Period | ||||||||||||||||
Consumer Securitizations: | |||||||||||||||||||||||
SLFT 2014-A | $ | 559 | $ | 644 | $ | 413 | $ | 498 | 2.61 | % | Personal loans | 2 years | |||||||||||
SLFT 2015-A | 1,163 | 1,250 | 1,163 | 1,250 | 3.47 | % | Personal loans | 3 years | |||||||||||||||
SLFT 2015-B | 314 | 335 | 314 | 336 | 3.78 | % | Personal loans | 5 years | |||||||||||||||
Total consumer securitizations | $ | 2,036 | $ | 2,229 | $ | 1,890 | $ | 2,084 |
(a) | Represents securities sold at time of issuance or at a later date and does not include retained notes. |
(b) | Represents UPB of the collateral supporting the issued and retained notes. |
• | allowance for finance receivable losses; |
• | purchased credit impaired finance receivables; |
• | TDR finance receivables; and |
• | fair value measurements. |
Average debt | average of debt for each day in the period |
Average net receivables | average of monthly average net finance receivables (net finance receivables at the beginning and end of each month divided by 2) in the period |
Delinquency ratio | UPB 60 days or more past due (greater than three payments unpaid) as a percentage of UPB |
Gross charge-off ratio | annualized gross charge-offs as a percentage of average net receivables |
Loss ratio | annualized net charge-offs, net writedowns on real estate owned, net gain (loss) on sales of real estate owned, and operating expenses related to real estate owned as a percentage of average real estate loans |
Net charge-off ratio | annualized net charge-offs as a percentage of average net receivables |
Net interest income | interest income less interest expense |
Recovery ratio | annualized recoveries on net charge-offs as a percentage of average net receivables |
Tangible equity | total equity less accumulated other comprehensive income or loss |
Tangible managed assets | total assets less goodwill and other intangible assets |
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 |
Weighted average interest rate | annualized interest expense as a percentage of average debt |
Yield | annualized finance charges as a percentage of average net receivables |
Exhibits are listed in the Exhibit Index beginning on page 84 and incorporated by reference herein. |
SPRINGLEAF FINANCE CORPORATION | ||||
(Registrant) | ||||
Date: | August 5, 2016 | By | /s/ Micah R. Conrad | |
Micah R. Conrad | ||||
Senior Vice President and Chief Financial Officer | ||||
(Duly Authorized Officer and Principal Financial Officer) |
Exhibit | ||
4.1 | Second Supplemental Indenture relating to Springleaf Finance Corporation’s 8.250% Senior Notes due 2020, dated as of April 11, 2016, by and among Springleaf Finance Corporation, OneMain Holdings, Inc. and Wilmington Trust, National Association, as trustee. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 11, 2016. | |
4.2 | Form of Springleaf Finance Corporation’s 8.250% Senior Notes due 2020 included in, and incorporated by reference to, Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 11, 2016. | |
10.1 | OneMain Holdings, Inc. Amended and Restated 2013 Omnibus Incentive Plan, approved by stockholders on May 25, 2016. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 27, 2016. | |
18.1 | Preferability Letter from PricewaterhouseCoopers LLP dated as of August 5, 2016. | |
31.1 | Rule 13a-14(a)/15d-14(a) Certifications of the President and Chief Executive Officer of Springleaf Finance Corporation. | |
31.2 | Rule 13a-14(a)/15d-14(a) Certifications of the Executive Vice President and Chief Financial Officer of Springleaf Finance Corporation. | |
32.1 | Section 1350 Certifications. | |
101 | Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Shareholder’s Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Springleaf Finance Corporation (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 5, 2016 | ||
/s/ Jay N. Levine | |||
Jay N. Levine | |||
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Springleaf Finance Corporation (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 5, 2016 | ||
/s/ Micah R. Conrad | |||
Micah R. Conrad | |||
Senior 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/ Micah R. Conrad | |||
Micah R. Conrad | |||
Senior Vice President and Chief Financial Officer | |||
Date: | August 5, 2016 |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Aug. 01, 2016 |
|
Document Information [Line Items] | ||
Entity Registrant Name | SPRINGLEAF FINANCE CORP | |
Entity Central Index Key | 0000025598 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 10,160,021 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Personal loans | $ 4,663 | $ 4,300 |
SpringCastle Portfolio | 0 | 1,703 |
Allowance for finance receivable losses | 197 | 224 |
Finance receivables held for sale | 420 | 793 |
Restricted cash and cash equivalents | 159 | 295 |
Long-term debt | $ 6,699 | $ 9,582 |
Common Stock, par value (dollars per share) | $ 0.5 | $ 0.5 |
Common Stock, shares authorized | 25,000,000 | 25,000,000 |
Common shares, shares issued | 10,160,021 | 10,160,020 |
Common shares, shares outstanding | 10,160,021 | 10,160,020 |
Consolidated VIEs | ||
Personal loans | $ 2,400 | $ 3,600 |
SpringCastle Portfolio | 1,700 | |
Allowance for finance receivable losses | 85 | 128 |
Finance receivables held for sale | 0 | 435 |
Restricted cash and cash equivalents | 150 | 282 |
Long-term debt | $ 2,207 | $ 5,513 |
Business and Basis of Presentation |
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Business and Basis of Presentation | Business and Basis of Presentation Springleaf Finance Corporation (“SFC” or, collectively with its subsidiaries, whether directly or indirectly owned, “Springleaf,” the “Company,” “we,” “us,” or “our”) is a wholly owned subsidiary of Springleaf Finance, Inc. (“SFI”). SFI is a wholly owned subsidiary of OneMain Holdings, Inc. (“OMH”). At June 30, 2016, Springleaf Financial Holdings, LLC (the “Initial Stockholder”) owned approximately 58% of OMH’s common stock. The Initial Stockholder is owned primarily by a private equity fund managed by an affiliate of Fortress Investment Group LLC (“Fortress”). SFC is a financial services holding company with subsidiaries engaged in the consumer finance and insurance businesses. BASIS OF PRESENTATION We prepared our condensed consolidated financial statements using generally accepted accounting principles in the United States of America (“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 SFC, its subsidiaries (all of which are wholly owned, except for certain subsidiaries associated with a joint venture in which we owned a 47% equity interest prior to March 31, 2016), and variable interest entities (“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 2016 presentation, we have reclassified certain items in prior periods, including certain items in prior periods of our condensed consolidated financial statements. These statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (“2015 Annual Report on Form 10-K”). We follow the same significant accounting policies for our interim reporting, except for the change in accounting policy discussed below. CHANGE IN ACCOUNTING POLICY Effective April 1, 2016, we changed our accounting policy for the derecognition of loans within a purchased credit impaired (“PCI”) pool. Historically, we removed loans from a PCI pool upon charge-off of the loan, based on the Company’s charge-off accounting policy at their allocated carrying value. Under our new accounting policy, loans will be removed from a PCI pool when the loan is written-off, at which time further collections efforts would not be pursued, or sold or repaid. While both methods are acceptable under GAAP, we believe the new method for derecognition of PCI loans is preferable as it enhances consistency with our industry peers. As of April 1, 2016, the cumulative effect of applying the change in accounting policy increased shareholder’s equity by $6 million. Our policy for derecognition of PCI loans following the change described above is presented below: Purchased Credit Impaired Finance Receivables As part of each of our acquisitions, we identify a population of finance receivables for which it is determined that it is probable that we will be unable to collect all contractually required payments. The population of accounts identified generally consists of those finance receivables that are (i) 60 days or more past due at acquisition, (ii) which had been classified as troubled debt restructured (“TDR”) finance receivables as of the acquisition date, (iii) may have been previously modified, or (iv) had other indications of credit deterioration as of the acquisition date. We accrete the excess of the cash flows expected to be collected on the purchased credit impaired finance receivables over the discounted cash flows (the “accretable yield”) into interest income at a level rate of return over the expected lives of the underlying pools of the purchased credit impaired finance receivables. The underlying pools are based on finance receivables with common risk characteristics. We have established policies and procedures to periodically (at least once a quarter) update the amount of cash flows we expect to collect, incorporating assumptions regarding default rates, loss severities, the amounts and timing of prepayments and other factors that are reflective of then current market conditions. Probable decreases in expected finance receivable cash flows result in the recognition of impairment, which is recognized through the provision for finance receivable losses. Probable significant increases in expected cash flows to be collected would first reverse any previously recorded allowance for finance receivable losses; any remaining increases are recognized prospectively as adjustments to the respective pool’s yield. Our purchased credit impaired finance receivables remain in our purchased credit impaired pools until liquidation or write-off. We do not reclassify modified purchased credit impaired finance receivables as TDR finance receivables. We have additionally established policies and procedures related to maintaining the integrity of these pools. A finance receivable will not be removed from a pool unless we sell, foreclose, or otherwise receive assets in satisfaction of a particular finance receivable or a finance receivable is written-off. If a finance receivable is renewed and additional funds are lent and terms are adjusted to current market conditions, we consider this a new finance receivable and the previous finance receivable is removed from the pool. If the facts and circumstances indicate that a finance receivable should be removed from a pool, that finance receivable will be removed at its allocated carrying amount. Removal of the finance receivable from a pool does not affect the yield used to recognize accretable yield of the pool. We have retrospectively applied this change in accounting policy. The effect of this change in accounting policy on income (loss) before provision for (benefit from) income taxes and net income (loss) attributable to SFC, and the cumulative effect of this change in accounting policy on shareholder’s equity attributable to SFC for the following prior periods are included in the table below.
The following tables present the impact of the retrospective application of this change in accounting policy on the amounts previously reported in our (i) consolidated balance sheet as of December 31, 2015, (ii) condensed consolidated statements of operations for the three and six months ended June 30, 2015 and (iii) condensed consolidated statements of cash flows for the six months ended June 30, 2015. Revised Condensed Consolidated Balance Sheet
Revised Condensed Consolidated Statements of Operations
Revised Condensed Consolidated Statement of Cash Flows
We have also adjusted the applicable prior period amounts in the Notes to the Condensed Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 herein to reflect the impact of this change in accounting policy. |
Significant Transactions |
6 Months Ended |
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Jun. 30, 2016 | |
Significant Transactions [Abstract] | |
Significant Transactions | Significant Transactions OMH’S ACQUISITION OF ONEMAIN FINANCIAL HOLDINGS, LLC On November 15, 2015, OMH, through its wholly owned subsidiary, Independence Holdings, LLC (“Independence”), completed its acquisition of OneMain Financial Holdings, LLC (“OMFH”) from CitiFinancial Credit Company (“Citigroup”) for approximately $4.5 billion in cash (the “OneMain Acquisition”). As a result of the OneMain Acquisition, OMFH became a wholly owned, indirect subsidiary of OMH. OMFH is not a subsidiary of SFC and SFC is not a subsidiary of OMFH. In connection with the closing of the OneMain Acquisition, on November 13, 2015, OMH and certain subsidiaries of SFC entered into an Asset Preservation Stipulation and Order and agreed to a Proposed Final Judgment (collectively, the “Settlement Agreement”) with the U.S. Department of Justice (the “DOJ”), as well as the state attorneys general for Colorado, Idaho, Pennsylvania, Texas, Virginia, Washington and West Virginia. The Settlement Agreement resolved the inquiries of the DOJ and such attorneys general with respect to the OneMain Acquisition and allowed OMH to proceed with the closing. Pursuant to the Settlement Agreement, OMH agreed to divest 127 branches of SFC subsidiaries across 11 states as a condition for approval of the OneMain Acquisition. The Settlement Agreement required certain of OMH’s subsidiaries (the “Branch Sellers”) to operate these 127 branches as an ongoing, economically viable and competitive business until sold to the divestiture purchaser. The court overseeing the settlement appointed a third-party monitor to oversee management of the divestiture branches and ensure the Company’s compliance with the terms of the Settlement Agreement. SPRINGCASTLE INTERESTS SALE On March 31, 2016, SFI, SpringCastle Holdings, LLC (“SpringCastle Holdings”) and Springleaf Acquisition Corporation (“Springleaf Acquisition” and, together with SpringCastle Holdings, the “SpringCastle Sellers”), wholly owned subsidiaries of OMH, entered into a purchase agreement with certain subsidiaries of New Residential Investment Corp. (“NRZ” and such subsidiaries, the “NRZ Buyers”) and BTO Willow Holdings II, L.P. and Blackstone Family Tactical Opportunities Investment Partnership—NQ—ESC L.P. (collectively, the “Blackstone Buyers” and together with the NRZ Buyers, the “SpringCastle Buyers”). Pursuant to the purchase agreement, on March 31, 2016, SpringCastle Holdings sold its 47% limited liability company interest in each of SpringCastle America, LLC, SpringCastle Credit, LLC and SpringCastle Finance, LLC, and Springleaf Acquisition sold its 47% limited liability company interest in SpringCastle Acquisition LLC, to the SpringCastle Buyers for an aggregate purchase price of approximately $112 million (the “SpringCastle Interests Sale”). SpringCastle America, LLC, SpringCastle Credit, LLC, SpringCastle Finance, LLC and SpringCastle Acquisition LLC are collectively referred to herein as the “SpringCastle Joint Venture.” The SpringCastle Joint Venture primarily holds subordinate ownership interests in a securitized loan portfolio (the “SpringCastle Portfolio”), which consists of unsecured loans and loans secured by subordinate residential real estate mortgages and includes both closed-end accounts and open-end lines of credit. These loans are in a liquidating status and vary in form and substance from the Company’s originated loans. At December 31, 2015, the SpringCastle Portfolio included over 232,000 of acquired loans, representing $1.7 billion in net finance receivables. In connection with the SpringCastle Interests Sale, the SpringCastle Buyers paid $101 million of the aggregate purchase price to the SpringCastle Sellers on March 31, 2016, with the remaining $11 million to be paid into an escrow account within 120 days following March 31, 2016. Such escrowed funds are expected to be held in escrow for a period of up to five years following March 31, 2016, and, subject to the terms of the purchase agreement and assuming certain portfolio performance requirements are satisfied, paid to the SpringCastle Sellers at the end of such five-year period. In connection with the SpringCastle Interests Sale, we recorded a net gain in other revenues at the time of sale of $167 million. As a result of this sale, SpringCastle Acquisition and SpringCastle Holdings no longer hold any ownership interests of the SpringCastle Joint Venture. However, unless terminated, SFI will remain as servicer of the SpringCastle Portfolio under the existing servicing agreement for the SpringCastle Funding Trust. In addition, we deconsolidated the underlying loans of the SpringCastle Portfolio and previously issued securitized interests, which were reported in long-term debt, as we no longer were considered the primary beneficiary. Prior to the SpringCastle Interests Sale, affiliates of the NRZ Buyers owned a 30% limited liability company interest in the SpringCastle Joint Venture, and affiliates of the Blackstone Buyers owned a 23% limited liability company interest in the SpringCastle Joint Venture (together, the “Other Members”). The Other Members are parties to the purchase agreement for purposes of certain limited indemnification obligations and post-closing expense reimbursement obligations of the SpringCastle Joint Venture to the SpringCastle Sellers. The NRZ Buyers are subsidiaries of NRZ, which is externally managed by an affiliate of Fortress. The Initial Stockholder, which owned approximately 58% of OMH’s common stock as of March 31, 2016, the date of sale, was owned primarily by a private equity fund managed by an affiliate of Fortress. Mr. Edens, Chairman of the Board of Directors of OMH, also serves as Chairman of the Board of Directors of NRZ. Mr. Edens is also a principal of Fortress and serves as Co-Chairman of the Board of Directors of Fortress. Mr. Jacobs, a member of the Board of Directors of OMH, also serves as a member of NRZ’s Board of Directors and Fortress’ Board of Directors. The purchase agreement included customary representations, warranties, covenants and indemnities. We did not record a sales recourse obligation related to the SpringCastle Interests Sale. SFC’S OFFERING OF 8.25% SENIOR NOTES On April 11, 2016, SFC issued $1.0 billion aggregate principal amount of 8.25% Senior Notes due 2020 (the “8.25% SFC Notes”) under an Indenture dated as of December 3, 2014 (the “Base Indenture”), as supplemented by a Second Supplemental Indenture, dated as of April 11, 2016 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), pursuant to which OMH provided a guarantee of the notes on an unsecured basis. SFC used a portion of the proceeds from the offering to repurchase approximately $600 million aggregate principal amount of its existing senior notes that mature in 2017, at a premium to principal amount from certain beneficial owners, and certain of those beneficial owners purchased new SFC senior notes in the offering. SFC intends to use the remaining net proceeds for general corporate purposes, which may include further debt repurchases and repayments. The 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 Indenture. The notes will not have the benefit of any sinking fund. The Indenture contains 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 Indenture also provides for events of default which, if any of them were to occur, would permit or require the principal of and accrued interest on the notes to become, or to be declared, due and payable. LENDMARK SALE On November 12, 2015, OMH and the Branch Sellers entered into a purchase and sale agreement with Lendmark Financial Services, LLC (“Lendmark”) to sell 127 Springleaf branches and, subject to certain exclusions, the associated personal loans issued to customers of such branches, fixed non-information technology assets and certain other tangible personal property located in such branches to Lendmark (the “Lendmark Sale”) for a purchase price equal to the sum of (i) the aggregate unpaid balance as of closing of the purchased loans multiplied by 103%, plus (ii) for each interest-bearing purchased loan, an amount equal to all unpaid interest that has accrued on the unpaid balance at the applicable note rate from the most recent interest payment date through the closing, plus (iii) the sum of all prepaid charges and fees and security deposits of the Branch Sellers to the extent arising under the purchased contracts as reflected on the books and records of the Branch Sellers as of closing, subject to certain limitations if the purchase price would exceed $695 million and Lendmark would be unable to obtain financing on certain specified terms. In anticipation of the sale of these branches, we transferred $608 million of personal loans from held for investment to held for sale on September 30, 2015. Pursuant to the Settlement Agreement, we were required to dispose of the branches to be sold in connection with the Lendmark Sale within 120 days following November 13, 2015, subject to such extensions as the DOJ may approve. As we did not believe we would be able to consummate the Lendmark Sale prior to April 1, 2016, we requested two extensions of the closing deadline set forth in the Settlement Agreement. The DOJ granted our requests through May 13, 2016. On May 2, 2016, we completed the Lendmark Sale for an aggregate cash purchase price of $624 million. Such sale was effective as of April 30, 2016, and included the sale to Lendmark of personal loans with an unpaid principal balance (“UPB”) as of March 31, 2016 of $600 million. OMH has entered into a transition services agreement with Lendmark dated as of May 2, 2016 (the “Transition Services Agreement”), and OMH’s and our activities will remain subject to the oversight of the Monitoring Trustee appointed by the court pursuant to the Settlement Agreement until the expiration of the Transition Services Agreement. The Transition Services Agreement is currently scheduled to expire on November 2, 2016, subject to up to two additional three-month extensions with the permission of the DOJ. Although we and OMH continue to take such steps as we believe are necessary to comply with the terms of the Settlement Agreement, no assurance can be given that we will not incur fines or penalties associated with OMH’s or our activities pursuant to the Transition Services Agreement or OMH’s or our efforts to comply with the terms of the Settlement Agreement. On May 2, 2016, SFC used a portion of the proceeds from the Lendmark Sale to repay, in full, its revolving demand note with OMFH, which totaled $376 million (including interest payable of $6 million). |
Recent Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2016 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Consolidation In February of 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2015-02, Consolidation - Amendments to the Consolidation Analysis, which amends the current consolidation guidance and ends the deferral granted to reporting entities with variable interests in investment companies from applying certain prior amendments to the VIE guidance. This ASU is applicable to entities across all industries, particularly those that use limited partnerships as well as entities in any industry that outsource decision making or have historically applied related party tiebreakers in their consolidation analysis and disclosures. The standard became effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. We have adopted this ASU and concluded that it does not have a material effect on our consolidated financial statements. Technical Corrections and Improvements In June of 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements, to correct differences between original guidance and the Accounting Standards Codification, clarify the guidance, correct references and make minor improvements affecting a variety of topics. The amendments to this transition guidance became effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We have adopted this ASU and concluded that it does not have a material effect on our consolidated financial statements. Debt Instruments In March of 2016, the FASB issued ASU 2016-06, Contingent Puts and Call Options in Debt Instruments, which clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt host. The ASU requires assessing the embedded call (put) options solely in accordance with the four-step decision sequence. The amendment of this ASU becomes effective on a modified retrospective basis for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. We have early adopted this ASU and concluded that it does not have a material effect on our consolidated financial statements. ACCOUNTING PRONOUNCEMENTS TO BE 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. In August of 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date, to defer the effective date of the new revenue recognition standard by one year, which would result in the ASU becoming effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. In March of 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations, which clarifies the implementation of the guidance on principal versus agent considerations from ASU 2014-09, Revenue from Contracts with Customers. ASU 2016-08 does not change the core principle of the guidance in ASU 2014-09, but rather clarifies the distinction between principal versus agent considerations when implementing ASU 2014-09. In April of 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing, to clarify the implementation guidance of ASU 2014-09 relating to performance obligations and licensing. In May of 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, to clarify guidance in ASU 2014-09 related to assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts/contract modifications. We are evaluating whether the adoption of these accounting pronouncements will have a material effect on our consolidated financial statements. Short-Duration Insurance Contracts Disclosures In May of 2015, the FASB issued ASU 2015-09, Disclosures about Short-Duration Contracts, to address enhanced disclosure requirements for insurers relating to short-duration insurance contract claims and unpaid claims liability rollforward for long and short-duration contracts. The disclosures are intended to provide users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, the methodologies and judgments used to estimate claims, and the timing, frequency, and severity of claims. The amendments in this ASU become effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. We are evaluating the potential impact of the adoption of the ASU 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, 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. The amendments in this ASU become effective prospectively for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. We are evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Leases In February of 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU will require lessees to recognize assets and liabilities 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. The amendments in this ASU become effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. We are evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Investments In March of 2016, the FASB issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting, which eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The ASU requires that an entity that has available-for-sale securities recognize, through earnings, the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendment in this ASU becomes effective prospectively for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. We are evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Stock Compensation In March of 2016, the FASB issued ASU 2016-09, Improvements to Employee Share - Based Payment Accounting, which simplifies the accounting for share-based payment transactions, income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendment in this ASU becomes effective on a modified retrospective basis for accounting in tax benefits recognized, retrospectively for accounting related to the presentation of employee taxes paid, prospectively for accounting related to recognition of excess tax benefits, and either prospectively or retrospectively for accounting related to presentation of excess employee tax benefits for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. We are evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Revenue Recognition and Derivatives and Hedging In May of 2016, the FASB issued ASU 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815), to rescind certain Securities and Exchange Commission (the “SEC”) guidance in Topic 605 and Topic 815 as ASU 2014-09 becomes effective. Our adoption of ASU 2014-09 will bring us into alignment with this ASU. We are evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Allowance for Finance Receivables Losses In June of 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU 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. 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. We believe the adoption of this ASU will have a material effect on our consolidated financial statements and we are in the process of quantifying the expected impacts. We do not believe that any other accounting pronouncements issued during the first half of 2016, 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, real estate loans, and retail sales finance as defined below:
Our finance receivable types also included the SpringCastle Portfolio at December 31, 2015, as defined below:
Components of net finance receivables held for investment by type were as follows:
Included in the table above are finance receivables associated with securitizations that remain on our balance sheet. The carrying value of our personal loans associated with securitizations totaled $2.4 billion and $3.6 billion at June 30, 2016 and December 31, 2015, respectively, and the carrying value of the SpringCastle Portfolio, all of which were associated with securitizations, totaled $1.7 billion at December 31, 2015. Unused lines of credit extended to customers by the Company were as follows:
Unused lines of credit on our personal loans can be suspended if any of the following occurs: (i) the value of the collateral declines significantly; (ii) we believe the borrower will be unable to fulfill the repayment obligations; or (iii) any other default by the borrower of any material obligation under the agreement occurs. Unused lines of credit on our real estate loans can be suspended if any of the following occurs: (i) the value of the real estate declines significantly below the property’s initial appraised value; (ii) we believe the borrower will be unable to fulfill the repayment obligations because of a material change in the borrower’s financial circumstances; or (iii) any other default by the borrower of any material obligation under the agreement occurs. Unused lines of credit on home equity lines of credit can be terminated for delinquency. Accordingly, no reserve has been recorded for the unused lines of credit. CREDIT QUALITY INDICATORS We consider the delinquency status and nonperforming status of the finance receivable as our credit quality indicators. We accrue finance charges on revolving retail finance receivables up to the date of charge-off at 180 days past due. Our revolving retail finance receivables that were more than 90 days past due and still accruing finance charges at June 30, 2016 and at December 31, 2015 were immaterial. Our personal loans and real estate loans do not have finance receivables that were more than 90 days past due and still accruing finance charges. Delinquent Finance Receivables We consider the delinquency status of the finance receivable as our primary credit quality indicator. We monitor delinquency trends to manage our exposure to credit risk. We consider finance receivables 60 days or more past due as delinquent and consider the likelihood of collection to decrease at such time. The following is a summary of net finance receivables held for investment by type and by number of days delinquent:
Nonperforming Finance Receivables We also monitor finance receivable performance trends to evaluate the potential risk of future credit losses. At 90 days or more past due, we consider our finance receivables to be nonperforming. Once the finance receivables are considered as nonperforming, we consider them to be at increased risk for credit loss. Our performing and nonperforming net finance receivables held for investment by type were as follows:
PURCHASED CREDIT IMPAIRED FINANCE RECEIVABLES Our purchased credit impaired finance receivables consist of receivables purchased as part of the following transaction:
At December 31, 2015, our purchased credit impaired finance receivables also included the SpringCastle Portfolio, which was purchased as part of the following transaction:
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, 2016 and December 31, 2015, finance receivables held for sale totaled $420 million and $793 million, respectively. See Note 6 for further information on our finance receivables held for sale, 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. 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 at June 30, 2016 and December 31, 2015, reflected the net carrying value of the purchased credit impaired FA Loans 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:
TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES Information regarding TDR finance receivables held for investment and held for sale were as follows:
We have 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:
Information regarding the new volume of the TDR finance receivables held for investment and held for sale were as follows:
Net finance receivables held for investment and held for sale that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause the TDR finance receivables to be considered nonperforming (90 days or more past due) were as follows:
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Allowance for Finance Receivable Losses |
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Loans and Leases Receivable, Allowance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
Included in the allowance for finance receivable losses are allowances associated with securitizations that totaled $85 million at June 30, 2016 and $128 million at December 31, 2015. See Note 11 for further discussion regarding our securitization transactions. 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 |
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Jun. 30, 2016 | |
Receivables Held-for-sale [Abstract] | |
Finance Receivables Held for Sale | Finance Receivables Held for Sale We report finance receivables held for sale of $420 million at June 30, 2016 and $793 million at December 31, 2015, which are carried at the lower of cost or fair value. At June 30, 2016, finance receivables held for sale consisted entirely of real estate loans, compared to $617 million of personal loans and $176 million of real estate loans at December 31, 2015. At June 30, 2016, we marked our real estate loans held for sale to fair value and recorded impairments of $5 million in other revenues. See Note 17 for further information on the impairments of our real estate loans held for sale. At December 31, 2015, 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. During March of 2016, we transferred $1.6 billion of loans of the SpringCastle Portfolio (after deducting allowance for finance receivable losses) from held for investment to held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. We simultaneously sold our interests in these finance receivables held for sale on March 31, 2016 in the SpringCastle Interests Sale and recorded a net gain in other revenues at the time of sale of $167 million. On May 2, 2016, we sold personal loans held for sale with a carrying value of $602 million and recorded a net gain in other revenues at the time of sale of $22 million. On June 30, 2016, we transferred $257 million of real estate loans (after deducting allowance for finance receivable losses) from held for investment to held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. We did not have any other material transfer activity to or from finance receivables held for sale during each of the three and six months ended June 30, 2016 and 2015. |
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 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:
We do not consider the above 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, 2016, 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 and six months ended June 30, 2016 and 2015, we did not recognize any other-than-temporary impairment credit losses on available-for-sale securities in investment revenues. Changes in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities were as follows:
The proceeds of available-for-sale securities sold or redeemed and the resulting realized gains, realized losses, and net realized gains were as follows:
Contractual maturities of fixed-maturity available-for-sale securities at June 30, 2016 were as follows:
Actual maturities may differ from contractual maturities since 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 bonds on deposit with insurance regulatory authorities totaled $11 million at June 30, 2016 and December 31, 2015. TRADING AND OTHER SECURITIES The fair value of trading and other securities by type was as follows:
The net unrealized and realized gains (losses) on our trading and other securities, which we report in investment revenues, were as follows:
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Transactions with Affiliates of Fortress |
6 Months Ended |
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Jun. 30, 2016 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Transactions with Affiliates of Fortress | Transactions with Affiliates of Fortress SUBSERVICING AGREEMENT Nationstar Mortgage LLC (“Nationstar”) subservices the real estate loans of certain of our indirect subsidiaries (collectively, the “Owners”). Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. The Owners paid Nationstar subservicing fees of less than $1 million for the three months ended June 30, 2016 and 2015 and $1 million for the six months ended June 30, 2016 and 2015. INVESTMENT MANAGEMENT AGREEMENT Logan Circle Partners, L.P. (“Logan Circle”) provides investment management services for our investments. Logan Circle is a wholly owned subsidiary of Fortress. Costs and fees incurred for these investment management services were less than $1 million for the three months ended June 30, 2016 and 2015 and for the six months ended June 30, 2016. Costs and fees incurred for these investment management services totaled $1 million for the six months ended June 30, 2015. SALE OF EQUITY INTEREST IN SPRINGCASTLE JOINT VENTURE On March 31, 2016, we sold our 47% equity interest in the SpringCastle Joint Venture, which owns the SpringCastle Portfolio, to certain subsidiaries of NRZ and Blackstone. See Note 2 for further information on this sale. NRZ is managed by an affiliate of Fortress. Related Party Transactions AFFILIATE LENDING Notes Receivable from Parent and Affiliates Note Receivable from SFI. SFC’s note receivable from SFI is payable in full on May 31, 2022, and SFC may demand payment at any time prior to May 31, 2022; however, SFC does not anticipate the need for additional liquidity during 2016 and does not expect to demand payment from SFI in 2016. The note receivable from SFI totaled $290 million at June 30, 2016 and $389 million at December 31, 2015. The interest rate for the UPB is the lender’s cost of funds rate, which was 5.52% at June 30, 2016. Interest revenue on the note receivable from SFI totaled $5 million and $10 million for the three and six months ended June 30, 2016, respectively, compared to $4 million and $6 million for the three and six months ended June 30, 2015, respectively, which we report in other revenues. Independence Demand Note. On November 12, 2015, in connection with the closing of the OneMain Acquisition, Springleaf Financial Cash Services, Inc. (“CSI”), SFC’s wholly owned subsidiary, entered into a revolving demand note with Independence (the “Independence Demand Note”), whereby CSI agreed to make advances to Independence from time to time, with an aggregate amount outstanding not to exceed $3.55 billion. Under the Independence Demand Note, Independence is required to use the proceeds of any advance either (i) to fund a portion of the purchase price for the OneMain Acquisition or (ii) for general corporate purposes. The note is payable in full on December 31, 2019, and CSI may demand payment at any time prior to December 31, 2019. Independence may repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate, which was 5.52% at June 30, 2016. On November 12, 2015, Independence borrowed $3.4 billion under the Independence Demand Note. At June 30, 2016 and December 31, 2015, the note receivable from Independence totaled $3.4 billion, which included compounded interest due to CSI. Interest revenue on the note receivable from Independence totaled $46 million and $92 million, respectively, during the three and six months ended June 30, 2016, which we report in other revenues. OneMain Demand Note. On November 15, 2015, in connection with the closing of the OneMain Acquisition, SFC entered into a revolving demand note (the “OneMain Demand Note”) with OMFH, whereby SFC agreed to make advances to OMFH from time to time, with an aggregate amount outstanding not to exceed $500 million. Under the OneMain Demand Note, OMFH is required to use the proceeds of any advance either (i) exclusively to finance the purchase, origination, pooling, funding or carrying of receivables by OMFH or any of its restricted subsidiaries or (ii) for general corporate purposes. The note is payable in full on December 31, 2024, and SFC may demand payment with five days prior notice. OMFH may repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate. At June 30, 2016, no amounts were drawn under the note. Receivables from Parent and Affiliates At June 30, 2016 and December 31, 2015, receivables from parent and affiliates totaled $27 million and $9 million, respectively. Receivables from parent and affiliates also included (i) interest receivable on SFC’s note receivable from SFI previously discussed in this Note, (ii) taxes paid by SFC for all entities under the tax sharing agreement, and (iii) expenses paid by a subsidiary of SFC for the benefit of parent and affiliates. Receivables from parent and affiliates at December 31, 2015 are presented net of a payable to SFI of $12 million. Excluding this payable, receivables from parent and affiliates totaled $21 million at December 31, 2015. Note Payable to Affiliate On December 1, 2015, in connection with the closing of the OneMain Acquisition, OMFH entered into a revolving demand note with SFC, whereby OMFH agreed to make advances to SFC from time to time, with an aggregate amount outstanding not to exceed $500 million. Under the note, SFC is required to use the proceeds of any advance for general corporate purposes. The note is payable in full on December 31, 2024, and OMFH may demand payment with five days prior notice. SFC may repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate, which was 5.52% at June 30, 2016. At December 31, 2015, no amounts were drawn under the note. At June 30, 2016, the note payable to OMFH totaled $301 million, which included compounded interest due to OMFH. Interest expense on the note payable to OMFH totaled $2 million and $6 million, respectively, for the three and six months ended June 30, 2016. Payables to Parent and Affiliates At June 30, 2016 and December 31, 2015, payables to parent and affiliates totaled $3 million and $24 million, respectively. At June 30, 2016 and December 31, 2015, Springleaf Finance Management Corporation (“SFMC”), a subsidiary of SFC, had net payables of $2 million and $19 million, respectively, to Springleaf General Services Corporation (“SGSC”), a subsidiary of SFI, related to the intercompany agreements further discussed below in this Note. At June 30, 2016 and December 31, 2015, SFMC also had a payable of $1 million to Springleaf Consumer Loan, Inc. (“SCLI”) for internet lending referral fees charged to the branch network. Prior to the SpringCastle Interests Sale, SFI provided servicing of the SpringCastle Portfolio through a master servicing agreement with SpringCastle Holdings, LLC, a subsidiary of SFC. At December 31, 2015, SpringCastle Holdings LLC’s payable to SFI totaled $4 million. Subsequent to the SpringCastle Interests Sale, SFI continues to act as the servicer of the SpringCastle Portfolio for the SpringCastle Funding Trust. RELATED PARTY LOAN SALE TRANSACTIONS During the second quarter of 2016, Springleaf Consumer Loan, Inc. (“SCLI”), a subsidiary of SFI, entered into loan purchase and sale agreements with certain subsidiaries of SFC pursuant to which SCLI sold certain personal loans with an aggregate UPB at the time of sale of $89 million for an aggregate purchase price of $89 million. INTERCOMPANY AGREEMENTS On December 24, 2012, SGSC, a subsidiary of SFI, entered into the following intercompany agreements with SFMC, a subsidiary of SFC, and with certain other subsidiaries of SFI (collectively, the “Recipients”). SFMC’s net payable to SGSC relating to these agreements totaled $2 million at June 30, 2016 and $19 million at December 31, 2015. Services Agreement SGSC provides the following services to the Recipients: management and administrative services; financial, accounting, treasury, tax, and audit services; facilities support services; capital funding services; legal services; human resources services (including payroll); centralized collections and lending support services; insurance, risk management, and marketing services; and information technology services. The fees payable by each Recipient to SGSC is equal to 100% of the allocated cost of providing the services to such Recipient. SGSC allocates its cost of providing these services among the Recipients and any of the companies to which it provides similar services based on an allocation method defined in the agreement. During the three and six months ended June 30, 2016, SFMC recorded $58 million and $125 million, respectively, of service fee expenses, which are included in other operating expenses, compared to $47 million and $101 million for the three and six months ended June 30, 2015, respectively. License Agreement The license agreement provides for use by SGSC of SFMC’s information technology systems and software and other related equipment. The monthly license fee payable by SGSC for its use of the information technology systems and software is 100% of the actual costs incurred by SFMC plus a 7.00% margin. The fee payable by SGSC for its use of the related equipment is 100% of the actual costs incurred by SFMC. During the three and six months ended June 30, 2016, SFMC recorded $2 million and $3 million, respectively, of license fees, which are included as a contra expense to other operating expenses, compared to $2 million and $3 million for the three and six months ended June 30, 2015, respectively. Building Lease The building lease agreement provides that SFMC will lease six of its buildings to SGSC for an annual rental amount of $4 million, plus additional rental amounts to cover other sums and charges, including real estate taxes, water charges, and sewer rents. During the three and six months ended June 30, 2016, SFMC recorded $1 million and $2 million, respectively, of rent charged to SGSC, which are included as a contra expense to other operating expenses, compared to $1 million and $2 million for the three and six months ended June 30, 2015, respectively. |
Related Party Transactions |
6 Months Ended |
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Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Transactions with Affiliates of Fortress SUBSERVICING AGREEMENT Nationstar Mortgage LLC (“Nationstar”) subservices the real estate loans of certain of our indirect subsidiaries (collectively, the “Owners”). Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. The Owners paid Nationstar subservicing fees of less than $1 million for the three months ended June 30, 2016 and 2015 and $1 million for the six months ended June 30, 2016 and 2015. INVESTMENT MANAGEMENT AGREEMENT Logan Circle Partners, L.P. (“Logan Circle”) provides investment management services for our investments. Logan Circle is a wholly owned subsidiary of Fortress. Costs and fees incurred for these investment management services were less than $1 million for the three months ended June 30, 2016 and 2015 and for the six months ended June 30, 2016. Costs and fees incurred for these investment management services totaled $1 million for the six months ended June 30, 2015. SALE OF EQUITY INTEREST IN SPRINGCASTLE JOINT VENTURE On March 31, 2016, we sold our 47% equity interest in the SpringCastle Joint Venture, which owns the SpringCastle Portfolio, to certain subsidiaries of NRZ and Blackstone. See Note 2 for further information on this sale. NRZ is managed by an affiliate of Fortress. Related Party Transactions AFFILIATE LENDING Notes Receivable from Parent and Affiliates Note Receivable from SFI. SFC’s note receivable from SFI is payable in full on May 31, 2022, and SFC may demand payment at any time prior to May 31, 2022; however, SFC does not anticipate the need for additional liquidity during 2016 and does not expect to demand payment from SFI in 2016. The note receivable from SFI totaled $290 million at June 30, 2016 and $389 million at December 31, 2015. The interest rate for the UPB is the lender’s cost of funds rate, which was 5.52% at June 30, 2016. Interest revenue on the note receivable from SFI totaled $5 million and $10 million for the three and six months ended June 30, 2016, respectively, compared to $4 million and $6 million for the three and six months ended June 30, 2015, respectively, which we report in other revenues. Independence Demand Note. On November 12, 2015, in connection with the closing of the OneMain Acquisition, Springleaf Financial Cash Services, Inc. (“CSI”), SFC’s wholly owned subsidiary, entered into a revolving demand note with Independence (the “Independence Demand Note”), whereby CSI agreed to make advances to Independence from time to time, with an aggregate amount outstanding not to exceed $3.55 billion. Under the Independence Demand Note, Independence is required to use the proceeds of any advance either (i) to fund a portion of the purchase price for the OneMain Acquisition or (ii) for general corporate purposes. The note is payable in full on December 31, 2019, and CSI may demand payment at any time prior to December 31, 2019. Independence may repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate, which was 5.52% at June 30, 2016. On November 12, 2015, Independence borrowed $3.4 billion under the Independence Demand Note. At June 30, 2016 and December 31, 2015, the note receivable from Independence totaled $3.4 billion, which included compounded interest due to CSI. Interest revenue on the note receivable from Independence totaled $46 million and $92 million, respectively, during the three and six months ended June 30, 2016, which we report in other revenues. OneMain Demand Note. On November 15, 2015, in connection with the closing of the OneMain Acquisition, SFC entered into a revolving demand note (the “OneMain Demand Note”) with OMFH, whereby SFC agreed to make advances to OMFH from time to time, with an aggregate amount outstanding not to exceed $500 million. Under the OneMain Demand Note, OMFH is required to use the proceeds of any advance either (i) exclusively to finance the purchase, origination, pooling, funding or carrying of receivables by OMFH or any of its restricted subsidiaries or (ii) for general corporate purposes. The note is payable in full on December 31, 2024, and SFC may demand payment with five days prior notice. OMFH may repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate. At June 30, 2016, no amounts were drawn under the note. Receivables from Parent and Affiliates At June 30, 2016 and December 31, 2015, receivables from parent and affiliates totaled $27 million and $9 million, respectively. Receivables from parent and affiliates also included (i) interest receivable on SFC’s note receivable from SFI previously discussed in this Note, (ii) taxes paid by SFC for all entities under the tax sharing agreement, and (iii) expenses paid by a subsidiary of SFC for the benefit of parent and affiliates. Receivables from parent and affiliates at December 31, 2015 are presented net of a payable to SFI of $12 million. Excluding this payable, receivables from parent and affiliates totaled $21 million at December 31, 2015. Note Payable to Affiliate On December 1, 2015, in connection with the closing of the OneMain Acquisition, OMFH entered into a revolving demand note with SFC, whereby OMFH agreed to make advances to SFC from time to time, with an aggregate amount outstanding not to exceed $500 million. Under the note, SFC is required to use the proceeds of any advance for general corporate purposes. The note is payable in full on December 31, 2024, and OMFH may demand payment with five days prior notice. SFC may repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate, which was 5.52% at June 30, 2016. At December 31, 2015, no amounts were drawn under the note. At June 30, 2016, the note payable to OMFH totaled $301 million, which included compounded interest due to OMFH. Interest expense on the note payable to OMFH totaled $2 million and $6 million, respectively, for the three and six months ended June 30, 2016. Payables to Parent and Affiliates At June 30, 2016 and December 31, 2015, payables to parent and affiliates totaled $3 million and $24 million, respectively. At June 30, 2016 and December 31, 2015, Springleaf Finance Management Corporation (“SFMC”), a subsidiary of SFC, had net payables of $2 million and $19 million, respectively, to Springleaf General Services Corporation (“SGSC”), a subsidiary of SFI, related to the intercompany agreements further discussed below in this Note. At June 30, 2016 and December 31, 2015, SFMC also had a payable of $1 million to Springleaf Consumer Loan, Inc. (“SCLI”) for internet lending referral fees charged to the branch network. Prior to the SpringCastle Interests Sale, SFI provided servicing of the SpringCastle Portfolio through a master servicing agreement with SpringCastle Holdings, LLC, a subsidiary of SFC. At December 31, 2015, SpringCastle Holdings LLC’s payable to SFI totaled $4 million. Subsequent to the SpringCastle Interests Sale, SFI continues to act as the servicer of the SpringCastle Portfolio for the SpringCastle Funding Trust. RELATED PARTY LOAN SALE TRANSACTIONS During the second quarter of 2016, Springleaf Consumer Loan, Inc. (“SCLI”), a subsidiary of SFI, entered into loan purchase and sale agreements with certain subsidiaries of SFC pursuant to which SCLI sold certain personal loans with an aggregate UPB at the time of sale of $89 million for an aggregate purchase price of $89 million. INTERCOMPANY AGREEMENTS On December 24, 2012, SGSC, a subsidiary of SFI, entered into the following intercompany agreements with SFMC, a subsidiary of SFC, and with certain other subsidiaries of SFI (collectively, the “Recipients”). SFMC’s net payable to SGSC relating to these agreements totaled $2 million at June 30, 2016 and $19 million at December 31, 2015. Services Agreement SGSC provides the following services to the Recipients: management and administrative services; financial, accounting, treasury, tax, and audit services; facilities support services; capital funding services; legal services; human resources services (including payroll); centralized collections and lending support services; insurance, risk management, and marketing services; and information technology services. The fees payable by each Recipient to SGSC is equal to 100% of the allocated cost of providing the services to such Recipient. SGSC allocates its cost of providing these services among the Recipients and any of the companies to which it provides similar services based on an allocation method defined in the agreement. During the three and six months ended June 30, 2016, SFMC recorded $58 million and $125 million, respectively, of service fee expenses, which are included in other operating expenses, compared to $47 million and $101 million for the three and six months ended June 30, 2015, respectively. License Agreement The license agreement provides for use by SGSC of SFMC’s information technology systems and software and other related equipment. The monthly license fee payable by SGSC for its use of the information technology systems and software is 100% of the actual costs incurred by SFMC plus a 7.00% margin. The fee payable by SGSC for its use of the related equipment is 100% of the actual costs incurred by SFMC. During the three and six months ended June 30, 2016, SFMC recorded $2 million and $3 million, respectively, of license fees, which are included as a contra expense to other operating expenses, compared to $2 million and $3 million for the three and six months ended June 30, 2015, respectively. Building Lease The building lease agreement provides that SFMC will lease six of its buildings to SGSC for an annual rental amount of $4 million, plus additional rental amounts to cover other sums and charges, including real estate taxes, water charges, and sewer rents. During the three and six months ended June 30, 2016, SFMC recorded $1 million and $2 million, respectively, of rent charged to SGSC, which are included as a contra expense to other operating expenses, compared to $1 million and $2 million for the three and six months ended June 30, 2015, respectively. |
Long-term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2016 were as follows:
GUARANTY AGREEMENTS 8.25% SFC Notes On April 11, 2016, OMH entered into a Second Supplemental Indenture, pursuant to which it agreed to fully and unconditionally guarantee, on a senior unsecured basis, the payments of principal, premium (if any) and interest on $1.0 billion of the 8.25% SFC Notes. As of June 30, 2016, $1.0 billion aggregate principal amount of the 8.25% SFC Notes were outstanding. See Note 2 for further discussion of this offering. 5.25% SFC Notes On December 3, 2014, OMH entered into an Indenture and First Supplemental Indenture pursuant to which it agreed to fully and unconditionally guarantee, on a senior unsecured basis, the payments of principal, premium (if any) and interest on $700 million of 5.25% Senior Notes due 2019 issued by SFC (the “5.25% SFC Notes”). As of June 30, 2016, $700 million aggregate principal amount of the 5.25% SFC Notes were outstanding. Other SFC Notes On December 30, 2013, OMH entered into Guaranty Agreements whereby it agreed to fully and unconditionally guarantee the payments of principal, premium (if any), and interest on approximately $5.2 billion aggregate principal amount of senior notes, on a senior unsecured basis, and $350 million aggregate principal amount of a junior subordinated debenture, on a junior subordinated basis, issued by SFC (collectively, the “Other SFC Notes”). The Other SFC Notes consisted of the following: 8.25% Senior Notes due 2023; 7.75% Senior Notes due 2021; 6.00% Senior Notes due 2020; a 60-year junior subordinated debenture; and all senior notes outstanding on December 30, 2013, issued pursuant to the Indenture dated as of May 1, 1999 (the “1999 Indenture”), between SFC and Wilmington Trust, National Association (the successor trustee to Citibank N.A.). The 60-year junior subordinated debenture underlies the trust preferred securities sold by a trust sponsored by SFC. On December 30, 2013, OMH entered into a Trust Guaranty Agreement whereby it agreed to fully and unconditionally guarantee the related payment obligations under the trust preferred securities. As of June 30, 2016, approximately $3.3 billion aggregate principal amount of the Other SFC Notes was outstanding. The OMH guarantees of SFC’s long-term debt discussed above are subject to customary release provisions. |
Variable Interest Entities |
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Variable Interest Entities | Variable Interest Entities As part of our overall funding strategy and as part of our efforts to support our liquidity from sources other than our traditional capital market sources, we have transferred certain finance receivables to VIEs for securitization transactions. Since these transactions involve securitization trusts required to be consolidated, the securitized assets and related liabilities are included in our condensed consolidated financial statements and are accounted for as secured borrowings. CONSOLIDATED VIES We evaluated the securitization trusts and determined that these entities are VIEs of which we are the primary beneficiary, and therefore, we consolidated such entities. We are deemed to be the primary beneficiaries of these VIEs because we have the ability to direct the activities of each VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses and the right to receive benefits that are potentially significant to each VIE. Such ability arises from SFC’s and its affiliates’ contractual right to service the securitized finance receivables. Our retained subordinated note and residual interest trust certificates expose us to potentially significant losses and potentially significant returns. The asset-backed securities issued by the securitization trusts are supported by the expected cash flows from the underlying securitized finance receivables. Cash inflows from these finance receivables are distributed to investors and service providers in accordance with each transaction’s contractual priority of payments (“waterfall”) and, as such, most of these inflows must be directed first to service and repay each trust’s senior notes or certificates held principally by third-party investors. The holders of the asset-backed securities have no recourse to the Company if the cash flows from the underlying qualified securitized assets are not sufficient to pay all principal and interest on the asset-backed securities. After these senior obligations are extinguished, substantially all cash inflows will be directed to the subordinated notes until fully repaid and, thereafter, to the residual interest that we own in each securitization trust. We retain interests in these securitization transactions, including residual interests in each securitization trust and, in some cases, subordinated securities issued by the VIEs. We retain credit risk in the securitizations through our ownership of the residual interest in each securitization trust, and, in some cases, ownership of the most subordinated class of asset-backed securities, which are the first to absorb credit losses on the securitized assets. We expect that any credit losses in the pools of securitized assets will likely be limited to our subordinated and residual retained interests. We have no obligation to repurchase or replace qualified securitized assets that subsequently become delinquent or are otherwise in default. 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:
Consumer Loan Securitization Transaction Call of 2013-B Notes. On February 16, 2016, Sixteenth Street Funding LLC (“Sixteenth Street”), a wholly owned subsidiary of SFC, exercised its right to redeem the asset backed notes issued by the Springleaf Funding Trust 2013-B on June 19, 2013 (the “2013-B Notes”). To redeem the 2013-B Notes, Sixteenth Street paid a redemption price of $371 million, which included $1 million of accrued interest and excluded $30 million for the Class C and Class D Notes owned by Sixteenth Street on February 16, 2016, the date of the optional redemption. The outstanding principal balance of the 2013-B Notes was $400 million on the date of the optional redemption. Conduit Facilities As of June 30, 2016, our borrowings under conduit facilities consisted of the following:
VIE INTEREST EXPENSE Other than our retained subordinate and residual interests in the remaining consolidated securitization trusts, we are under no obligation, 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, 2016 totaled $24 million and $72 million, respectively, compared to $49 million and $87 million for the three and six months ended June 30, 2015, respectively. DECONSOLIDATED VIES As a result of the SpringCastle Interests Sale on March 31, 2016, we deconsolidated the securitization trust holding the underlying loans of the SpringCastle Portfolio and previously issued securitized interests, which were reported in long-term debt. As a result of the sales of the mortgage-backed retained certificates during 2014, we (i) deconsolidated the securitization trusts holding the underlying real estate loans and previously issued securitized interests which were reported in long-term debt and (ii) established a reserve for sales recourse obligations of $6 million related to these sales. At June 30, 2016, this reserve totaled $6 million. We had no repurchase activity associated with these sales as of June 30, 2016. See Note 14 for further information on the total reserve for sales recourse obligations relating to the real estate loan sales, including the sales of the mortgage-backed retained certificates. |
Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [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, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At June 30, 2016, we had a net deferred tax liability of $129 million, compared to $113 million at December 31, 2015. The increase in net deferred tax liability of $16 million was primarily due to the impact of the SpringCastle Interests Sale, partially offset by changes in the fair value of our finance receivables and purchase accounting for debt writedown. The effective tax rate for the six months ended June 30, 2016 was 34.0% compared to 10.7% for the same period in 2015. The effective tax rates for the six months ended June 30, 2016 and 2015 differed from the federal statutory rates primarily due to the effects of the non-controlling interests in the previously owned SpringCastle Portfolio. We are currently under examination of our U.S. federal tax return for the years 2011 to 2013 by the Internal Revenue Service. Management believes it has adequately provided for taxes for such years. The Company’s unrecognized tax positions, including interest and penalties, totaled $10 million and $9 million at June 30, 2016 and December 31, 2015, respectively, all of which would affect the effective tax rate if recognized. The amount of any change in the balance of uncertain tax positions over the next 12 months is not expected to be material to our consolidated financial statements. |
Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingencies | Contingencies LEGAL CONTINGENCIES In the normal course of business, the Company has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation arising in connection with its 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 identify certain legal actions where we believe a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that we have not yet been notified of or are not yet determined to be probable or reasonably possible and reasonably estimable. 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. SALES RECOURSE OBLIGATIONS At June 30, 2016, our reserve for sales recourse obligations totaled $15 million, which primarily related to the real estate loan sales in 2014. During the three and six months ended June 30, 2016, we had no repurchase activity related to our real estate loan sales in 2014. For the three and six months ended June 30, 2015, we repurchased 13 loans, totaling $1 million, associated with the real estate loan sales in 2014. At June 30, 2016, there were no material recourse requests with loss exposure that management believes will not be covered by the reserve. However, we will continue to monitor any repurchase activity in the future and will adjust the reserve accordingly. The activity in our reserve for sales recourse obligations primarily associated with the real estate loan sales during 2014 was as follows:
It is inherently difficult to determine whether any recourse losses are probable or even reasonably possible or to estimate the amounts of any losses. In addition, even where 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 |
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Benefit Plans | Benefit Plans The following table presents the components of net periodic benefit cost with respect to our defined benefit pension plans:
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, 2016, our three segments include:
The remaining components (which we refer to as “Other”) consist of our other non-originating legacy operations, which are isolated by geographic market and/or distribution channel from our three segments. These operations include: (i) our legacy operations in 14 states where we had also ceased branch-based personal lending; (ii) our liquidating retail sales finance portfolio (including retail sales finance accounts from its legacy auto finance operation); (iii) our lending operations in Puerto Rico and the U.S. Virgin Islands; and (iv) the operations of our United Kingdom subsidiary. The accounting policies of the segments are the same as those disclosed in Note 3 of our 2015 Annual Report on Form 10-K, except as described below. Due to the nature of the Fortress Acquisition, we applied purchase accounting. However, we report the operating results of Consumer and Insurance, Acquisitions and Servicing, Real Estate, and Other using a “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. These allocations and adjustments currently have a material effect on our reported segment basis income as compared to GAAP. We believe a Segment Accounting Basis (a basis other than GAAP) provides investors a consistent basis for which management evaluates segment performance. We allocate revenues and expenses (on a Segment Accounting Basis) to each segment using the following methodologies:
The “Segment to GAAP Adjustment” column in the following tables primarily consists of:
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. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Conversely, financial instruments traded in other-than-active markets or that do not have quoted prices have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. An other-than-active market is one in which there are few transactions, the prices are not current, price quotations vary substantially either over time or among market makers, or little information is released publicly for the asset or liability being valued. Pricing observability is affected by a number of factors, including the type of financial instrument, whether the financial instrument is listed on an exchange or traded over-the-counter or is new to the market and not yet established, the characteristics specific to the transaction, and general market conditions. The following table summarizes the fair values and carrying values of our financial instruments and indicates the fair value hierarchy based on the level of inputs we utilized to determine such fair values:
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, 2016. The following table presents changes in Level 3 assets measured at fair value on a recurring basis:
We used observable and/or unobservable inputs to determine the fair value of positions that we have classified within the Level 3 category. As a result, the unrealized gains and losses for assets and liabilities within the Level 3 category presented in the Level 3 tables above may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. The unobservable inputs and quantitative data used in our Level 3 valuations for our investment securities were developed and used in models created by our third-party valuation service providers, which values were used by us for fair value disclosure purposes without adjustment. Quantitative information about Level 3 inputs for our assets measured at fair value on a recurring basis for which information about the unobservable inputs was reasonably available to us at June 30, 2016 and December 31, 2015 is as follows:
The fair values of the assets using significant unobservable inputs are sensitive and can be impacted by significant increases or decreases in any of those inputs. Level 3 broker-priced instruments, including RMBS (except for the one bond previously noted), CMBS, and CDO/ABS, are excluded from the table above because the unobservable inputs are not reasonably available to us. Our RMBS, CMBS, and CDO/ABS securities have unobservable inputs that are reliant on and sensitive to the quality of their underlying collateral. The inputs, although not identical, have similar characteristics and interrelationships. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment speeds. An improvement in the workout criteria related to the restructured debt and/or debt covenants of the underlying collateral may lead to an improvement in the cash flows and have an inverse impact on other inputs, specifically a reduction in the amount of discount applied for marketability and liquidity, making the structured bonds more attractive to market participants. 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. Assets measured at fair value on a non-recurring basis on which we recorded impairment charges were as follows:
Net impairment charges recorded on assets measured at fair value on a non-recurring basis were as follows:
In accordance with the authoritative guidance for the accounting for the impairment of finance receivables held for sale, we wrote down certain finance receivables held for sale reported in our Real Estate segment to their fair value during the second quarter of 2016 and recorded the writedowns in other revenues. In accordance with the authoritative guidance for the accounting for the impairment of long-lived assets, we wrote down certain real estate owned reported in our Real Estate segment to their fair value less cost to sell for the three and six months ended June 30, 2016 and 2015 and recorded the writedowns in other revenues. The fair values of real estate owned disclosed in the table above are unadjusted for transaction costs, as required by the authoritative guidance for fair value measurements. The amounts of real estate owned recorded in other assets are net of transaction costs as required by the authoritative guidance for accounting for the impairment of long-lived assets. In accordance with the authoritative guidance for the accounting for the impairment of commercial mortgage loans, we recorded allowance adjustments on certain impaired commercial mortgage loans reported in our Consumer and Insurance segment to record their fair value for the three and six months ended June 30, 2016 and 2015 and recorded the net impairments in investment revenues. The inputs and quantitative data used in our Level 3 valuations for our real estate owned and commercial mortgage loans are unobservable primarily due to the unique nature of specific real estate assets. Therefore, we used independent third-party providers, familiar with local markets, to determine the values used for fair value disclosures without adjustment. Quantitative information about Level 3 inputs for our assets measured at fair value on a non-recurring basis at June 30, 2016 and December 31, 2015 is as follows:
FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS We use the following methods and assumptions to estimate fair value. Cash and Cash Equivalents The carrying amount of cash and cash equivalents, including cash and certain cash equivalents, approximates fair value. Mutual Funds Our unit of account is the mutual fund, which is measured at net asset value. Investment Securities We utilize third-party valuation service providers to measure the fair value of our investment securities, which are classified as available-for-sale or as trading and other and consist primarily of bonds. Whenever available, we obtain quoted prices in active markets for identical assets at the balance sheet date to measure investment securities at fair value. We generally obtain market price data from exchange or dealer markets. We estimate the fair value of fixed maturity investment securities not traded in active markets by referring to traded securities with similar attributes, using dealer quotations and a matrix pricing methodology, or discounted cash flow analyses. This methodology considers such factors as the issuer’s industry, the security’s rating and tenor, its coupon rate, its position in the capital structure of the issuer, yield curves, credit curves, composite ratings, bid-ask spreads, prepayment rates and other relevant factors. For fixed maturity investment securities that are not traded in active markets or that are subject to transfer restrictions, we adjust the valuations to reflect illiquidity and/or non-transferability. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. We elect the fair value option for investment securities that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value the derivative. The fair value of certain investment securities is based on the amortized cost, which is assumed to approximate fair value. Finance Receivables The fair value of net finance receivables, less allowance for finance receivable losses, both non-impaired and purchased credit impaired, are determined using discounted cash flow methodologies. The application of these methodologies requires us to make certain judgments and estimates based on our perception of market participant views related to the economic and competitive environment, the characteristics of our finance receivables, and other similar factors. The most significant judgments and estimates made relate to prepayment speeds, default rates, loss severity, and discount rates. The degree of judgment and estimation applied is significant in light of the current capital markets and, more broadly, economic environments. Therefore, the fair value of our finance receivables could not be determined with precision and may not be realized in an actual sale. Additionally, there may be inherent limitations in the valuation methodologies we employed, and changes in the underlying assumptions used could significantly affect the results of current or future values. Finance Receivables Held for Sale We determined the fair value of finance receivables held for sale that were originated as held for investment based on negotiations with prospective purchasers (if any) or by using projected cash flows discounted at the weighted-average interest rates offered by us in the market for similar finance receivables. We based cash flows on contractual payment terms adjusted for estimates of prepayments and credit related losses. Restricted Cash and Cash Equivalents The carrying amount of restricted cash and cash equivalents approximates fair value. Notes Receivable from Parent and Affiliates The carrying amount of the notes receivable from parent and affiliates approximates the fair value because the notes are payable on a demand basis prior to their due dates and the interest rates on these notes adjust with changing market interest rates. Commercial Mortgage Loans Given the short remaining average life of the portfolio, the carrying amount of commercial mortgage loans approximates fair value. The carrying amount includes an estimate for credit related losses, which is based on independent third-party valuations. Real Estate Owned We initially base our estimate of the fair value on independent third-party valuations at the time we take title to real estate owned. Subsequent changes in fair value are based upon independent third-party valuations obtained periodically to estimate a price that would be received in a then current transaction to sell the asset. Escrow Advance Receivable The carrying amount of escrow advance receivable approximates fair value. Receivables from Parent and Affiliates The carrying amount of receivables from parent and affiliates approximates fair value. Receivables Related to Sales of Real Estate Loans and Related Trust Assets The carrying amount of receivables related to sales of real estate loans and related trust assets less estimated forfeitures, which are reflected in other liabilities, approximates fair value. Long-term Debt We either receive fair value measurements of our long-term debt from market participants and pricing services or we estimate the fair values of long-term debt using projected cash flows discounted at each balance sheet date’s market-observable implicit-credit spread rates for our long-term debt. We record at fair value long-term debt issuances that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value the derivative. At June 30, 2016, we had no debt carried at fair value under the fair value option. We estimate the fair values associated with variable rate revolving lines of credit to be equal to par. Note Payable to Affiliate The carrying amount of the note payable to affiliate approximates the fair value because the note is payable on a demand basis prior to its due date and the interest rate on the note adjusts with changing market interest rates. Payables to Parent and Affiliates The fair value of payable to parent and affiliates approximates the carrying value due to its short-term nature. |
Subsequent Events |
6 Months Ended |
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Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events ODART 2016-1 SECURITIZATION On July 19, 2016, we completed a private securitization transaction in which OneMain Direct Auto Receivables Trust 2016-1 (“ODART 2016-1”), a wholly owned special purpose vehicle of SFC, issued $754 million principal amount of notes backed by auto secured personal loans with an aggregate UPB of $754 million as of June 30, 2016. $700 million principal amount of the notes issued by ODART 2016-1, represented by Classes A, B and C, were sold to unaffiliated parties at a weighted average interest rate of 2.27%, and $54 million principal amount of Class D notes were retained. The maturity dates of the notes occur on January 15, 2021 for the Class A, May 17, 2021 for the Class B, September 15, 2021 for the Class C and February 15, 2023 for the Class D. The first principal and interest payment on the notes is due on August 15, 2016. The indenture governing the ODART 2016-1 notes contains events of default which, if triggered, may result in the acceleration of the obligation to pay principal and interest on the notes. RELATED PARTY TRANSACTIONS Note Payable to Affiliate On July 5, 2016, SFC paid $200 million to OMFH, as a payment of principal under a revolving demand note with OMFH. On July 18, 2016, SFC paid $101 million, including $1 million of interest, to OMFH to repay the note in full. OneMain Demand Note On July 19, 2016, SFC advanced $400 million to OMFH, under the OneMain Demand Note. Independence Demand Note On July 19, 2016, CSI, a subsidiary of SFC, received $344 million from Independence, as a payment of principal and interest on the Independence Demand Note. Assignment of a Portion of the Independence Demand Note On July 19, 2016, CSI, Independence, and OMFH entered into an Assignment of Intercompany Demand Note (the “Note Assignment”) pursuant to which CSI sold and assigned to OMFH, and OMFH purchased and assumed from CSI, an interest in and to CSI’s right to receive $150 million principal amount outstanding under the $3.6 billion Independence Demand Note (the “Original Note”), dated November 12, 2015, between CSI, as the lender, and Independence, as the borrower, for a purchase price of $150 million (the “Assignment Purchase Price”). On July 20, 2016, OMFH paid the Assignment Purchase Price to CSI. In connection with the Note Assignment, Independence exchanged the Original Note for a new intercompany demand note issued to CSI with a maximum borrowing amount not to exceed $3.4 billion (the “Cash Services Note”), and a new intercompany demand note issued to OMFH with a maximum borrowing amount not to exceed $150 million (the “OMFH Note” and together with the Cash Services Note, the “New Notes”). The New Notes provide that no advances shall be made to Independence on or after December 31, 2019 and all principal and interest shall be payable in full on December 31, 2019, unless earlier payment is demanded by CSI or OMFH. REAL ESTATE LOAN SALE On August 3, 2016, SFC and certain of its subsidiaries sold a portfolio of second lien mortgage loans for aggregate cash proceeds of $246 million, which approximated the carrying value of such loans. Unless terminated or we resign as servicer, we will continue to service the loans included in such sale pursuant to a servicing agreement. The purchase and sale agreement and the servicing agreement include customary representations and warranties and indemnification provisions. |
Business and Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION We prepared our condensed consolidated financial statements using generally accepted accounting principles in the United States of America (“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 SFC, its subsidiaries (all of which are wholly owned, except for certain subsidiaries associated with a joint venture in which we owned a 47% equity interest prior to March 31, 2016), and variable interest entities (“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 2016 presentation, we have reclassified certain items in prior periods, including certain items in prior periods of our condensed consolidated financial statements. These statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (“2015 Annual Report on Form 10-K”). We follow the same significant accounting policies for our interim reporting, except for the change in accounting policy discussed below. |
Impaired Financing Receivable, Policy | CHANGE IN ACCOUNTING POLICY Effective April 1, 2016, we changed our accounting policy for the derecognition of loans within a purchased credit impaired (“PCI”) pool. Historically, we removed loans from a PCI pool upon charge-off of the loan, based on the Company’s charge-off accounting policy at their allocated carrying value. Under our new accounting policy, loans will be removed from a PCI pool when the loan is written-off, at which time further collections efforts would not be pursued, or sold or repaid. While both methods are acceptable under GAAP, we believe the new method for derecognition of PCI loans is preferable as it enhances consistency with our industry peers. As of April 1, 2016, the cumulative effect of applying the change in accounting policy increased shareholder’s equity by $6 million. Our policy for derecognition of PCI loans following the change described above is presented below: Purchased Credit Impaired Finance Receivables As part of each of our acquisitions, we identify a population of finance receivables for which it is determined that it is probable that we will be unable to collect all contractually required payments. The population of accounts identified generally consists of those finance receivables that are (i) 60 days or more past due at acquisition, (ii) which had been classified as troubled debt restructured (“TDR”) finance receivables as of the acquisition date, (iii) may have been previously modified, or (iv) had other indications of credit deterioration as of the acquisition date. We accrete the excess of the cash flows expected to be collected on the purchased credit impaired finance receivables over the discounted cash flows (the “accretable yield”) into interest income at a level rate of return over the expected lives of the underlying pools of the purchased credit impaired finance receivables. The underlying pools are based on finance receivables with common risk characteristics. We have established policies and procedures to periodically (at least once a quarter) update the amount of cash flows we expect to collect, incorporating assumptions regarding default rates, loss severities, the amounts and timing of prepayments and other factors that are reflective of then current market conditions. Probable decreases in expected finance receivable cash flows result in the recognition of impairment, which is recognized through the provision for finance receivable losses. Probable significant increases in expected cash flows to be collected would first reverse any previously recorded allowance for finance receivable losses; any remaining increases are recognized prospectively as adjustments to the respective pool’s yield. Our purchased credit impaired finance receivables remain in our purchased credit impaired pools until liquidation or write-off. We do not reclassify modified purchased credit impaired finance receivables as TDR finance receivables. We have additionally established policies and procedures related to maintaining the integrity of these pools. A finance receivable will not be removed from a pool unless we sell, foreclose, or otherwise receive assets in satisfaction of a particular finance receivable or a finance receivable is written-off. If a finance receivable is renewed and additional funds are lent and terms are adjusted to current market conditions, we consider this a new finance receivable and the previous finance receivable is removed from the pool. If the facts and circumstances indicate that a finance receivable should be removed from a pool, that finance receivable will be removed at its allocated carrying amount. Removal of the finance receivable from a pool does not affect the yield used to recognize accretable yield of the pool. We have retrospectively applied this change in accounting policy. |
Accounting Pronouncements Recently Adopted | ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Consolidation In February of 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2015-02, Consolidation - Amendments to the Consolidation Analysis, which amends the current consolidation guidance and ends the deferral granted to reporting entities with variable interests in investment companies from applying certain prior amendments to the VIE guidance. This ASU is applicable to entities across all industries, particularly those that use limited partnerships as well as entities in any industry that outsource decision making or have historically applied related party tiebreakers in their consolidation analysis and disclosures. The standard became effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. We have adopted this ASU and concluded that it does not have a material effect on our consolidated financial statements. Technical Corrections and Improvements In June of 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements, to correct differences between original guidance and the Accounting Standards Codification, clarify the guidance, correct references and make minor improvements affecting a variety of topics. The amendments to this transition guidance became effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We have adopted this ASU and concluded that it does not have a material effect on our consolidated financial statements. Debt Instruments In March of 2016, the FASB issued ASU 2016-06, Contingent Puts and Call Options in Debt Instruments, which clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt host. The ASU requires assessing the embedded call (put) options solely in accordance with the four-step decision sequence. The amendment of this ASU becomes effective on a modified retrospective basis for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. We have early adopted this ASU and concluded that it does not have a material effect on our consolidated financial statements. ACCOUNTING PRONOUNCEMENTS TO BE 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. In August of 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date, to defer the effective date of the new revenue recognition standard by one year, which would result in the ASU becoming effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. In March of 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations, which clarifies the implementation of the guidance on principal versus agent considerations from ASU 2014-09, Revenue from Contracts with Customers. ASU 2016-08 does not change the core principle of the guidance in ASU 2014-09, but rather clarifies the distinction between principal versus agent considerations when implementing ASU 2014-09. In April of 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing, to clarify the implementation guidance of ASU 2014-09 relating to performance obligations and licensing. In May of 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, to clarify guidance in ASU 2014-09 related to assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts/contract modifications. We are evaluating whether the adoption of these accounting pronouncements will have a material effect on our consolidated financial statements. Short-Duration Insurance Contracts Disclosures In May of 2015, the FASB issued ASU 2015-09, Disclosures about Short-Duration Contracts, to address enhanced disclosure requirements for insurers relating to short-duration insurance contract claims and unpaid claims liability rollforward for long and short-duration contracts. The disclosures are intended to provide users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, the methodologies and judgments used to estimate claims, and the timing, frequency, and severity of claims. The amendments in this ASU become effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. We are evaluating the potential impact of the adoption of the ASU 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, 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. The amendments in this ASU become effective prospectively for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. We are evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Leases In February of 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU will require lessees to recognize assets and liabilities 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. The amendments in this ASU become effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. We are evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Investments In March of 2016, the FASB issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting, which eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The ASU requires that an entity that has available-for-sale securities recognize, through earnings, the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendment in this ASU becomes effective prospectively for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. We are evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Stock Compensation In March of 2016, the FASB issued ASU 2016-09, Improvements to Employee Share - Based Payment Accounting, which simplifies the accounting for share-based payment transactions, income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendment in this ASU becomes effective on a modified retrospective basis for accounting in tax benefits recognized, retrospectively for accounting related to the presentation of employee taxes paid, prospectively for accounting related to recognition of excess tax benefits, and either prospectively or retrospectively for accounting related to presentation of excess employee tax benefits for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. We are evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Revenue Recognition and Derivatives and Hedging In May of 2016, the FASB issued ASU 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815), to rescind certain Securities and Exchange Commission (the “SEC”) guidance in Topic 605 and Topic 815 as ASU 2014-09 becomes effective. Our adoption of ASU 2014-09 will bring us into alignment with this ASU. We are evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Allowance for Finance Receivables Losses In June of 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU 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. 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. We believe the adoption of this ASU will have a material effect on our consolidated financial statements and we are in the process of quantifying the expected impacts. We do not believe that any other accounting pronouncements issued during the first half of 2016, but not yet effective, would have a material impact on our consolidated financial statements or disclosures, if adopted. |
Business and Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of change in accounting policy | We have retrospectively applied this change in accounting policy. The effect of this change in accounting policy on income (loss) before provision for (benefit from) income taxes and net income (loss) attributable to SFC, and the cumulative effect of this change in accounting policy on shareholder’s equity attributable to SFC for the following prior periods are included in the table below.
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Schedule of Revised Condensed Balance Sheet | Revised Condensed Consolidated Balance Sheet
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Schedule of Revised Condensed Income Statement | Revised Condensed Consolidated Statements of Operations
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Schedule of Revised Condensed Cash Flow Statement | Revised Condensed Consolidated Statement of Cash Flows
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Finance Receivables (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Schedule of unused credit lines extended to customers by the Company | Unused lines of credit extended to customers by the Company 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 performing and nonperforming net finance receivables by type | Our performing and nonperforming net finance receivables held for investment by type were as follows:
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Schedule of information regarding purchased credit impaired finance receivables | 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 |
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Schedule of changes in accretable yield for purchased credit impaired finance receivables | Changes in accretable yield for purchased credit impaired finance receivables held for investment and held for sale were as follows:
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Accretion on purchased credit impaired FA Loans held for sale |
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Schedule of information regarding troubled debt restructured ("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 |
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Schedule of TDR average net receivables and finance charges recognized on 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:
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TDR average net receivables held for sale and finance charges recognized on TDR finance receivables held for sale | TDR finance receivables held for sale included in the table above were as follows:
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Schedule of information regarding new volume of the TDR finance receivables | Information regarding the new volume of the TDR finance receivables held for investment and held for sale were as follows:
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Schedule of Information regarding new volume of TDR finance receivables held for sale | TDR finance receivables held for sale included in the table above were as follows:
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Schedule of net finance receivables that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause TDR finance receivables to be considered nonperforming | Net finance receivables held for investment and held for sale that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause the TDR finance receivables to be considered nonperforming (90 days or more past due) were as follows:
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TDR HFS that defaulted during the previously 12-month period |
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Allowance for Finance Receivable Losses (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases Receivable, Allowance [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) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 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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Other than temporary impairment, credit losses recognized in earnings | Changes in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities 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 realized gains, realized losses, and 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, 2016 were as follows:
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Schedule of fair value of trading securities by type | The fair value of trading and other securities by type was as follows:
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Schedule of net unrealized and realized gains (losses) on trading securities | The net unrealized and realized gains (losses) on our trading and other securities, which we report in investment revenues, were as follows:
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Long-term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2016 were as follows:
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Variable Interest Entities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of carrying amounts of consolidated VIE assets and liabilities associated with securitization trusts | The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts were as follows:
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Schedule of line of credit facilities | As of June 30, 2016, our borrowings under conduit facilities consisted of the following:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [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:
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Contingencies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finance Receivables Activity in Reserve for Sales Recourse Obligations | The activity in our reserve for sales recourse obligations primarily associated with the real estate loan sales during 2014 was as follows:
|
Benefit Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net periodic benefit cost | The following table presents the components of net periodic benefit cost with respect to our defined benefit pension plans:
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of information about the Company's segments as well as reconciliations to condensed 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.
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 summarizes the fair values and carrying values of our financial instruments and indicates the fair value hierarchy based on the level of inputs we utilized to determine such fair values:
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Schedule of information about assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy based on the levels of inputs utilized to determine such fair value | 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:
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Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis | The following table presents changes in Level 3 assets measured at fair value on a recurring basis:
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Quantitative information about Level 3 inputs for assets measured on a recurring basis | Quantitative information about Level 3 inputs for our assets measured at fair value on a recurring basis for which information about the unobservable inputs was reasonably available to us at June 30, 2016 and December 31, 2015 is as follows:
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Schedule of assets measured at fair value on a non-recurring basis on which impairment charges were recorded | Assets measured at fair value on a non-recurring basis on which we recorded impairment charges were as follows:
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Schedule of net impairment charges recorded on assets measured at fair value on a non-recurring basis | Net impairment charges recorded on assets measured at fair value on a non-recurring basis were as follows:
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Quantitative information about Level 3 inputs for assets measured on a nonrecurring basis | Quantitative information about Level 3 inputs for our assets measured at fair value on a non-recurring basis at June 30, 2016 and December 31, 2015 is as follows:
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Business and Basis of Presentation (Details) |
Jun. 30, 2016 |
Mar. 31, 2016 |
Jul. 31, 2014 |
---|---|---|---|
Related Party Transaction [Line Items] | |||
Ownership percentage in joint venture | 47.00% | ||
Corporate Joint Venture | |||
Related Party Transaction [Line Items] | |||
Ownership percentage in joint venture | 47.00% | ||
Majority Shareholder | |||
Related Party Transaction [Line Items] | |||
Percent of common stock held by related party | 58.00% | 58.00% |
Significant Transactions -- OMH's Acquisition of OneMain Financial Holdings, Inc. (Details) - OneMain [Member] $ in Billions |
Nov. 15, 2015
USD ($)
|
Nov. 13, 2015
state
branch
|
---|---|---|
Business Acquisition [Line Items] | ||
Payments to acquire business | $ | $ 4.5 | |
Number of branches to be divested | branch | 127 | |
Number of states which divested branches operate | state | 11 |
Significant Transactions -- SFC's Offering of Senior Notes (Details) - Springleaf Finance Corporation |
Apr. 11, 2016
USD ($)
|
---|---|
Senior Notes due 2017 | Beneficial Owners of Debt | Senior Notes due 2017 | |
Debt Instrument [Line Items] | |
Repurchased debt amount | $ 600,000,000 |
Guaranty Agreements | Senior Note 8.25%, due 2020 | |
Debt Instrument [Line Items] | |
Face amount of each issuance of debt | $ 1,000,000,000.0 |
Interest rates (as a percent) | 8.25% |
Finance Receivables - Unused Lines of Credit (Details) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Finance Receivables | ||
Unused credit lines | $ 19 | $ 397 |
Personal loans | ||
Finance Receivables | ||
Unused credit lines | 1 | 2 |
SpringCastle Portfolio | ||
Finance Receivables | ||
Unused credit lines | 0 | 365 |
Real estate loans | ||
Finance Receivables | ||
Unused credit lines | $ 18 | $ 30 |
Finance Receivables - Purchased Credit Impaired Finance Receivables (Details) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Finance Receivables | ||
Carrying amount, net of allowance | $ 85 | $ 439 |
Outstanding balance | 129 | 618 |
Allowance for purchased credit impaired finance receivable losses | 8 | 12 |
SpringCastle Portfolio | ||
Finance Receivables | ||
Carrying amount, net of allowance | 0 | 350 |
Outstanding balance | 0 | 482 |
Allowance for purchased credit impaired finance receivable losses | 0 | 0 |
Affiliates of Fortress or AIG | ||
Finance Receivables | ||
Carrying amount, net of allowance | 85 | 89 |
Outstanding balance | 129 | 136 |
Allowance for purchased credit impaired finance receivable losses | 8 | 12 |
Carrying amount, net of allowance, held for sale | 68 | 59 |
Outstanding balance, held for sale | $ 103 | $ 89 |
Investment Securities Narrative (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities with other-than-temporary impairments recognized in accumulated other comprehensive income or loss | $ 0 | $ 0 | |
Available-for-sale securities | 535,000,000 | 591,000,000 | |
Other than temporarily impaired available for sale securities | 0 | $ 0 | |
Insurance Regulatory Authorities Bonds on Deposit | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities | $ 11,000,000 | $ 11,000,000 |
Investment Securities - Changes in the cumulative amount of credit losses (recognized in earnings) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||||
Balance at beginning of period | $ 1 | $ 1 | $ 1 | $ 1 |
Realized due to dispositions with no prior intention to sell | 1 | 0 | 1 | 0 |
Balance at end of period | $ 0 | $ 1 | $ 0 | $ 1 |
Investment Securities - Proceeds From AFS Securities Sold or Redeemed (Details 3) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Available-for-sale securities sold or redeemed | ||||
Proceeds from sales and redemptions | $ 123 | $ 130 | $ 193 | $ 204 |
Realized gains | 3 | 4 | 4 | 11 |
Realized losses | 0 | 0 | 0 | (1) |
Net realized gains | $ 3 | $ 4 | $ 4 | $ 10 |
Investment Securities - Contractual Maturities (Details 4) $ in Millions |
Jun. 30, 2016
USD ($)
|
---|---|
Fair Value | |
Due in 1 year or less | $ 68 |
Due after 1 year through 5 years | 170 |
Due after 5 years through 10 years | 50 |
Due after 10 years | 120 |
Mortgage-backed, asset-backed, and collateralized securities | 120 |
Total | 528 |
Amortized Cost | |
Due in 1 year or less | 69 |
Due after 1 year through 5 years | 169 |
Due after 5 years through 10 years | 47 |
Due after 10 years | 116 |
Mortgage-backed, asset-backed, and collateralized securities | 119 |
Total | $ 520 |
Investment Securities - Trading and Other Securities (Details 5) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Trading securities | |||||
Other securities | $ 13,000,000 | $ 13,000,000 | $ 2,000,000 | ||
Trading securities | 13,000,000 | 13,000,000 | 12,000,000 | ||
Minimum disclosure of Unrealized losses on certain available-for-sale securities | 1,000,000 | ||||
Net unrealized and realized gains (losses) on trading securities | |||||
Net unrealized gains on trading and other securities held at period end | 1,000,000 | $ 1,000,000 | 1,000,000 | $ 4,000,000 | |
Net realized losses on trading and other securities sold or redeemed | 0 | (1,000,000) | 0 | (1,000,000) | |
Total | 1,000,000 | $ 0 | 1,000,000 | $ 3,000,000 | |
Corporate debt | |||||
Trading securities | |||||
Trading securities | 11,000,000 | 11,000,000 | 10,000,000 | ||
Commercial mortgage-backed securities (“CMBS”) | |||||
Trading securities | |||||
Trading securities | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 |
Transactions with Affiliates of Fortress (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Mar. 31, 2016 |
|
Transactions with Affiliates of Fortress or AIG | |||||
Ownership percentage in joint venture | 47.00% | ||||
Affiliated Entity | Logan Circle Partners L.P. | |||||
Transactions with Affiliates of Fortress or AIG | |||||
Costs and fees incurred for the investment management services | $ 1,000,000 | ||||
Nationstar Mortgage LLC | Owners | |||||
Transactions with Affiliates of Fortress or AIG | |||||
Subservicing fees | $ 1,000,000 | $ 1,000,000 | |||
Not qualified for disclosure, due to less than $1 million | Affiliated Entity | Logan Circle Partners L.P. | |||||
Transactions with Affiliates of Fortress or AIG | |||||
Costs and fees incurred for the investment management services | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | ||
Not qualified for disclosure, due to less than $1 million | Nationstar Mortgage LLC | Owners | |||||
Transactions with Affiliates of Fortress or AIG | |||||
Subservicing fees | $ 1,000,000 | $ 1,000,000 |
Related Party Transactions -- Independence Demand Note (Details) - Independence Holding, Inc. - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
Nov. 12, 2015 |
|
Debt Instrument [Line Items] | ||||
Securities borrowed | $ 3,400,000,000 | $ 3,400,000,000 | ||
Independence Demand Note | ||||
Debt Instrument [Line Items] | ||||
Related party note, maximum borrowing capacity | $ 3,550,000,000 | |||
Interest rates (as a percent) | 5.52% | 5.52% | ||
Securities borrowed | $ 3,400,000,000 | $ 3,400,000,000 | ||
Interest revenue, related party | $ 46,000,000 | $ 92,000,000 |
Related Party Transactions -- OneMain Demand Note (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
Nov. 15, 2015 |
|
Debt Instrument [Line Items] | |||
Notes receivable from parent and affiliates | $ 3,683,000,000 | $ 3,804,000,000 | |
OneMain Financial Holdings, Inc. | OneMain Demand Note | |||
Debt Instrument [Line Items] | |||
Related party note, maximum borrowing capacity | $ 500,000,000 | ||
Number of days notice required to demand note payment | 5 days | ||
Notes receivable from parent and affiliates | $ 0 |
Related Party Transactions -- Related Party Loan Sale Transaction (Details) - Springleaf Consumer Loan, Inc. (SCLI) - Affiliated Entity - Intercompany Agreements $ in Millions |
Jun. 30, 2016
USD ($)
|
---|---|
Related Party Transaction [Line Items] | |
Personal loans sold | $ 89 |
Aggregate purchase price | $ 89 |
Variable Interest Entities -- Consumer Loan Securitizations (Details) - Consolidated VIEs - Consumer Loan Securitizations - Springleaf FundingTrust 2013 B $ in Millions |
Feb. 16, 2016
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Debt instrument redemption price | $ 371 |
Accrued interest included in redemption price | 1 |
amount excluded from the redemption price | 30 |
Note sold under private securitization transaction | $ 400 |
Variable Interest Entities -- VIE Interest Expense and Deconsolidated VIES (Details) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2015
USD ($)
|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
Variable Interest Entity [Line Items] | |||||
Interest expense | $ 138 | $ 171 | $ 294 | $ 329 | |
Mortgage Loan Securitizations | Real estate loans | |||||
Variable Interest Entity [Line Items] | |||||
Real estate loans sold, reserve for sales recourse obligations | $ 6 | $ 6 | |||
Repurchase activity | 0 | ||||
Consolidated VIEs | |||||
Variable Interest Entity [Line Items] | |||||
Interest expense | $ 24 | $ 49 | $ 72 | $ 87 |
Accumulated Other Comprehensive Income (Loss) - Reclassification Adjustments From AOCI (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Reclassification adjustments from accumulated other comprehensive income | ||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes | $ 8 | $ 15 | $ 14 | $ 32 |
Income tax effect | (6) | 0 | (91) | (9) |
Net income | 13 | 35 | 177 | 73 |
Unrealized Gains (Losses) Available-for-Sale Securities | Reclassification adjustments | ||||
Reclassification adjustments from accumulated other comprehensive income | ||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes | 2 | 4 | 3 | 10 |
Income tax effect | (1) | (1) | (1) | (3) |
Net income | $ 1 | $ 3 | $ 2 | $ 7 |
Income Taxes (Details) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Net deferred tax liabilities | $ 129 | $ 113 | |
Net Deferred Tax Assets, Increase (Decrease), Amount | $ 16 | ||
Effective income tax rate (as a percent) | 34.00% | 10.70% | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 10 | $ 9 | |
No material change in balance of uncertain tax position, expected term | 12 months |
Contingencies - Sale Recourse Narrative (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
loan
request
|
Jun. 30, 2015
USD ($)
loan
|
Jun. 30, 2016
USD ($)
loan
request
|
Jun. 30, 2015
USD ($)
loan
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
Assets Sold under Agreements to Repurchase [Line Items] | ||||||||
Finance receivables reserve for sales recourse obligations | $ 15 | $ 18 | $ 15 | $ 18 | $ 15 | $ 15 | $ 24 | $ 24 |
Number of unresolved recourse requests | request | 0 | 0 | ||||||
Real Estate Loan | ||||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||||
Repurchase activity | loan | 0 | 13 | 0 | 13 | ||||
Amount of loans repurchased | $ 1 | $ 1 |
Contingencies -- Sale Recourse (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Finance Receivables Reserve for Sales Recourse Obligations [Roll Forward] | ||||
Balance at beginning of the period | $ 15 | $ 24 | $ 15 | $ 24 |
Recourse losses | 0 | (5) | 0 | (5) |
Provision for recourse obligations, net of recoveries | 0 | (1) | 0 | (1) |
Balance at end of the period | $ 15 | $ 18 | $ 15 | $ 18 |
Benefit Plans (Details) - Pension - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Components of net periodic benefit cost: | ||||
Interest cost | $ 4 | $ 4 | $ 8 | $ 8 |
Expected return on assets | (4) | (4) | (8) | (9) |
Net periodic benefit cost | $ 0 | $ 0 | $ 0 | $ (1) |
Segment Information Narrative (Details) $ in Millions |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
state
division
segment
|
Mar. 31, 2016 |
Dec. 31, 2015
USD ($)
|
Jun. 30, 2015
USD ($)
|
Jul. 31, 2014 |
|
Segment Reporting Information [Line Items] | |||||
Number of segments | segment | 3 | ||||
Ownership percentage in joint venture | 47.00% | ||||
Unearned insurance premium and claim reserves | $ | $ 220 | $ 250 | |||
adjustments for changes in accounting principle | |||||
Segment Reporting Information [Line Items] | |||||
Unearned insurance premium and claim reserves | $ | $ 230 | ||||
Other | |||||
Segment Reporting Information [Line Items] | |||||
Number of states where ceased branch based personal lending | state | 14 | ||||
Corporate Joint Venture | |||||
Segment Reporting Information [Line Items] | |||||
Ownership percentage in joint venture | 47.00% | ||||
Consumer and Insurance Segment | |||||
Segment Reporting Information [Line Items] | |||||
Number of business divisions | division | 2 | ||||
Consumer and Insurance | |||||
Segment Reporting Information [Line Items] | |||||
Number of states in which entity operates | state | 28 |
Fair Value Measurements - Quantitative Information About Level 3 Inputs (Details) - Level 3 - Recurring - Discounted cash flows $ in Millions |
Jun. 30, 2016
USD ($)
bond
|
---|---|
Corporate debt | |
Unobservable Input | |
Number of Bonds | bond | 1 |
Residential mortgage-backed securities (“RMBS”) | |
Unobservable Input | |
Minimum disclosure amount of debt instrument, fair value disclosure. | $ | $ 1 |
Subsequent Events ODART 2016-1 SECURITIZATION (Details) - Consolidated VIEs - USD ($) $ in Millions |
Jul. 19, 2016 |
Jun. 30, 2016 |
---|---|---|
Subsequent Event [Line Items] | ||
Securitization transaction outstanding | $ 325 | |
OneMain [Member] | ODART 2016-1 Securitization [Member] | ||
Subsequent Event [Line Items] | ||
Securitization transaction outstanding | $ 754 | |
OneMain [Member] | ODART 2016-1 Securitization [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Maximum Principal Balance of Notes that Can be Issued under Private Securitization Transaction | $ 754 | |
Note sold under private securitization transaction | $ 700 | |
Debt, Weighted Average Interest Rate | 2.27% | |
Amount of Notes that is retained under Private Securitization Transaction | $ 54 |
Subsequent Events RELATED PARTY TRANSACTIONS - Note Payable to Affiliate (Details) - OneMain Financial Holdings, Inc. - OneMain Financial Holdings, Inc. - OMFH revolving demand note, OneMain Acquisition closing - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 18, 2016 |
Jul. 05, 2016 |
Jun. 30, 2016 |
Jun. 30, 2016 |
|
Subsequent Event [Line Items] | ||||
Interest expense, related party note | $ 2 | $ 6 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Repayments of Notes Payable | $ 101 | $ 200 | ||
Interest expense, related party note | $ 1 |
Subsequent Events RELATED PARTY TRANSACTIONS - OneMain Demand Note (Details) - USD ($) |
Jul. 19, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Subsequent Event [Line Items] | |||
Notes receivable from parent and affiliates | $ 3,683,000,000 | $ 3,804,000,000 | |
OneMain Demand Note | OneMain Financial Holdings, Inc. | |||
Subsequent Event [Line Items] | |||
Notes receivable from parent and affiliates | $ 0 | ||
OneMain Demand Note | OneMain Financial Holdings, Inc. | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Notes receivable from parent and affiliates | $ 400,000,000 |
Subsequent Events RELATED PARTY TRANSACTIONS - Independence Demand Note (Details) $ in Millions |
Jul. 19, 2016
USD ($)
|
---|---|
Independence Demand Note | Independence Holding, Inc. | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Repayment of Notes Receivable from Related Parties | $ 344 |
Subsequent Events RELEATED PARTY TRANSACTIONS - Assignment of a Portion of Independence Demand Note (Details) - Independence Holding, Inc. - USD ($) |
Jul. 20, 2016 |
Jul. 19, 2016 |
Nov. 12, 2015 |
---|---|---|---|
Independence Demand Note | |||
Subsequent Event [Line Items] | |||
Related party note, maximum borrowing capacity | $ 3,550,000,000 | ||
Assignment of Intercompany Demand Note [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Aggregate purchase price | $ 150,000,000 | ||
Intercompany Demand Note, Right to Assume or Assignment of Principal & Outstanding Note Amount | $ 150,000,000 | ||
Cash Services Note [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Related party note, maximum borrowing capacity | 3,400,000,000.0 | ||
OMFH Note [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Related party note, maximum borrowing capacity | $ 150,000,000 |
Subsequent Events REAL ESTATE LOAN SALE (Details) $ in Millions |
Aug. 03, 2016
USD ($)
|
---|---|
Real Estate Sale [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Disposal Group, Including Discontinued Operation, Purchase Price on Sale | $ 246 |
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