(State of incorporation) | (I.R.S. Employer Identification No.) |
OneMain Holdings, Inc.: | ||||||||||||||
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
OneMain Finance Corporation: None |
OneMain Holdings, Inc.: | |||||||||||||||||||||||||||||
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||||||
OneMain Finance Corporation: | |||||||||||||||||||||||||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | ☑ | Smaller reporting company | Emerging growth company |
Term or Abbreviation | Definition | |||||||
2019 Annual Report on Form 10-K | Combined OMH and SFC (now known as OMFC) Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 14, 2020 | |||||||
30-89 Delinquency ratio | net finance receivables 30-89 days past due as a percentage of net finance receivables | |||||||
8.25% Senior Notes due 2020 | $1.0 billion of 8.25% Senior Notes due 2020 issued by OMFC on April 11, 2016, guaranteed by OMH and redeemed in full on July 29, 2020 | |||||||
8.875% Senior Notes due 2025 | $600 million of 8.875% Senior Notes due 2025 issued by OMFC on May 14, 2020 and guaranteed by OMH | |||||||
ABS | asset-backed securities | |||||||
Accretable yield | the excess of the cash flows expected to be collected on the purchased credit impaired finance receivables over the discounted cash flows | |||||||
Adjusted pretax income (loss) | a non-GAAP financial measure used by management as a key performance measure of our segment | |||||||
AETR | annual effective tax rate | |||||||
AHL | American Health and Life Insurance Company, an insurance subsidiary of OneMain Financial Holdings, LLC | |||||||
Apollo | Apollo Global Management, LLC and its consolidated subsidiaries | |||||||
Apollo-Värde Group | an investor group led by funds managed by Apollo and Värde | |||||||
Apollo-Värde Transaction | the purchase by the Apollo-Värde Group of 54,937,500 shares of OMH common stock from SFH pursuant to the Share Purchase Agreement for an aggregate purchase price of approximately $1.4 billion in cash on June 25, 2018 | |||||||
ASC | Accounting Standards Codification | |||||||
ASU | Accounting Standards Update | |||||||
Average daily debt balance | average of debt for each day in the period | |||||||
Average net receivables | average of monthly average net finance receivables (net finance receivables at the beginning and end of each month divided by two) in the period | |||||||
Base Indenture | OMFC Indenture, dated as of December 3, 2014 | |||||||
CARES Act | Coronavirus Aid, Relief, and Economic Security Act signed into law by President Trump on March 27, 2020 | |||||||
C&I | Consumer and Insurance | |||||||
CDO | collateralized debt obligations | |||||||
CMBS | commercial mortgage-backed securities | |||||||
COVID-19 | the global outbreak of a novel strain of coronavirus | |||||||
Exchange Act | Securities Exchange Act of 1934, as amended | |||||||
FASB | Financial Accounting Standards Board | |||||||
February 2019 Real Estate Loan Sale | OMFC and certain of its subsidiaries sold a portfolio of real estate loans with a carrying value of $16 million, classified in finance receivables held for sale, for aggregate cash proceeds of $19 million on February 5, 2019 | |||||||
FICO score | a credit score created by Fair Isaac Corporation | |||||||
Fortress | Fortress Investment Group LLC | |||||||
GAAP | generally accepted accounting principles in the United States of America | |||||||
GAP | guaranteed asset protection | |||||||
Gross charge-off ratio | annualized gross charge-offs as a percentage of average net receivables | |||||||
Guaranty Agreements | agreements entered into on December 30, 2013 by OMH whereby it agreed to fully and unconditionally guarantee the payments of principal, premium (if any), and interest on the Other Notes, and the 6.00% Senior Notes due 2020 and 8.25% Senior Notes due 2020, which were redeemed in full on April 15, 2019 and July 29, 2020, respectively | |||||||
Indenture | the Base Indenture, together with all subsequent Supplemental Indentures | |||||||
IRS | Internal Revenue Service | |||||||
Junior Subordinated Debenture | $350 million aggregate principal amount of 60-year junior subordinated debt issued by OMFC under an indenture dated January 22, 2007, by and between OMFC and Deutsche Bank Trust Company, as trustee, and guaranteed by OMH | |||||||
Term or Abbreviation | Definition | |||||||
Merit | Merit Life Insurance Co., a former insurance subsidiary of OMFC. In the fourth quarter of 2019, the Company sold all of the issued and outstanding shares in Merit to a third party | |||||||
Net charge-off ratio | annualized net charge-offs as a percentage of average net receivables | |||||||
Net interest income | interest income less interest expense | |||||||
ODART | OneMain Direct Auto Receivables Trust | |||||||
OMFC | OneMain Finance Corporation (formerly Springleaf Finance Corporation) | |||||||
OMFIT | OneMain Financial Issuance Trust | |||||||
OMH | OneMain Holdings, Inc. | |||||||
OneMain Acquisition | Acquisition of OneMain Financial Holdings, LLC from CitiFinancial Credit Company, effective November 1, 2015 | |||||||
Other securities | securities for which the fair value option was elected and equity securities. Other securities recognize unrealized gains and losses in investment revenues | |||||||
Other Notes | collectively, the 8.25% Senior Notes due 2023 and the 7.75% Senior Notes due 2021, on a senior unsecured basis, and the Junior Subordinated Debenture, on a junior subordinated basis, issued by OMFC and guaranteed by OMH | |||||||
Pretax capital generation | a non-GAAP financial measure used by management as a key performance measure of our segment, defined as adjusted pretax income (loss) excluding the change in allowance for finance receivable losses | |||||||
Recovery ratio | annualized recoveries on net charge-offs as a percentage of average net receivables | |||||||
RMBS | residential mortgage-backed securities | |||||||
RSAs | restricted stock awards | |||||||
RSUs | restricted stock units | |||||||
SCLH | Springleaf Consumer Loan Holding Company | |||||||
SEC | U.S. Securities and Exchange Commission | |||||||
Securities Act | Securities Act of 1933, as amended | |||||||
Segment Accounting Basis | a basis used to report the operating results of our C&I segment and our Other components, which reflects our allocation methodologies for certain costs and excludes the impact of applying purchase accounting | |||||||
SFC | Springleaf Finance Corporation (effective as of July 1, 2020, SFC has been renamed to OMFC) | |||||||
SFH | Springleaf Financial Holdings, LLC, an entity owned primarily by a private equity fund managed by an affiliate of Fortress that sold 54,937,500 shares of OMH's common stock to the Apollo-Värde Group in the Apollo-Värde Transaction | |||||||
SFI | Springleaf Finance, Inc. | |||||||
Share Purchase Agreement | a share purchase agreement entered into on January 3, 2018, among the Apollo-Värde Group, SFH and the Company to acquire from SFH 54,937,500 shares of OMH's common stock that was issued and outstanding as of such date, representing the entire holdings of OMH's stock beneficially owned by Fortress | |||||||
SLFT | Springleaf Funding Trust | |||||||
SMHC | Springleaf Mortgage Holding Company and subsidiaries | |||||||
SpringCastle Interests Sale | the March 31, 2016 sale by SpringCastle Holdings, LLC and Springleaf Acquisition Corporation of the equity interest in the SpringCastle Joint Venture | |||||||
SpringCastle Portfolio | loans the Company previously owned and now services on behalf of a third party | |||||||
Supplemental Indentures | collectively, the following supplements to the Base Indenture: First Supplemental Indenture, dated as of December 3, 2014; Second Supplemental Indenture, dated as of April 11, 2016; Third Supplemental Indenture, dated as of May 15, 2017; Fourth Supplemental Indenture, dated as of December 8, 2017; Fifth Supplemental Indenture, dated as of March 12, 2018; Sixth Supplemental Indenture, dated as of May 11, 2018; Seventh Supplemental Indenture, dated as of February 22, 2019; Eighth Supplemental Indenture, dated as of May 9, 2019; Ninth Supplemental Indenture, dated as of November 7, 2019; and Tenth Supplemental Indenture, dated as of May 14, 2020 | |||||||
Tax Act | Public Law 115-97 amending the Internal Revenue Code of 1986 | |||||||
TDR finance receivables | troubled debt restructured finance receivables. Debt restructuring in which a concession is granted to the borrower as a result of economic or legal reasons related to the borrower’s financial difficulties | |||||||
Tenth Supplemental Indenture | Tenth Supplemental Indenture, dated as of May 14, 2020, to the Base Indenture | |||||||
Triton | Triton Insurance Company, an insurance subsidiary of OneMain Financial Holdings, LLC | |||||||
Unearned finance charges | the amount of interest that is capitalized at time of origination on a precompute loan that will be earned over the remaining contractual life of the loan |
Term or Abbreviation | Definition | |||||||
UPB | unpaid principal balance for interest bearing accounts and the gross remaining contractual payments less the unaccreted balance of unearned finance charges for precompute accounts | |||||||
Värde | Värde Partners, Inc. | |||||||
VIEs | variable interest entities | |||||||
Weighted average interest rate | annualized interest expense as a percentage of average debt | |||||||
XBRL | eXtensible Business Reporting Language | |||||||
Yield | annualized finance charges as a percentage of average net receivables | |||||||
Item 1. Financial Statements. |
(dollars in millions, except par value amount) | September 30, 2020 | December 31, 2019 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Investment securities (includes available-for-sale securities with a fair value of $ amortized cost basis of $ | ||||||||||||||
Net finance receivables (includes loans of consolidated VIEs of $ in 2019) | ||||||||||||||
Unearned insurance premium and claim reserves | ( | ( | ||||||||||||
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $ 2020 and $ | ( | ( | ||||||||||||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses | ||||||||||||||
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $ | ||||||||||||||
Goodwill | ||||||||||||||
Other intangible assets | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||
Long-term debt (includes debt of consolidated VIEs of $ | $ | $ | ||||||||||||
Insurance claims and policyholder liabilities | ||||||||||||||
Deferred and accrued taxes | ||||||||||||||
Other liabilities (includes other liabilities of consolidated VIEs of $ in 2019) | ||||||||||||||
Total liabilities | ||||||||||||||
Contingencies (Note 14) | ||||||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock, par value $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive income | ||||||||||||||
Retained earnings | ||||||||||||||
Total shareholders’ equity | ||||||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions, except per share amounts) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Interest income | $ | $ | $ | $ | ||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Net interest income | ||||||||||||||||||||||||||
Provision for finance receivable losses | ||||||||||||||||||||||||||
Net interest income after provision for finance receivable losses | ||||||||||||||||||||||||||
Other revenues: | ||||||||||||||||||||||||||
Insurance | ||||||||||||||||||||||||||
Investment | ||||||||||||||||||||||||||
Net loss on repurchase and repayment of debt | ( | ( | ( | ( | ||||||||||||||||||||||
Net gain on sale of real estate loans | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total other revenues | ||||||||||||||||||||||||||
Other expenses: | ||||||||||||||||||||||||||
Salaries and benefits | ||||||||||||||||||||||||||
Other operating expenses | ||||||||||||||||||||||||||
Insurance policy benefits and claims | ||||||||||||||||||||||||||
Total other expenses | ||||||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||
Income taxes | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Share Data: | ||||||||||||||||||||||||||
Weighted average number of shares outstanding: | ||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Diluted | ||||||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||
Net change in unrealized gains on non-credit impaired available-for-sale securities | ||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ||||||||||||||||||||||||
Income tax effect: | ||||||||||||||||||||||||||
Net change in unrealized gains on non-credit impaired available-for-sale securities | ( | ( | ( | ( | ||||||||||||||||||||||
Foreign currency translation adjustments | ||||||||||||||||||||||||||
Other comprehensive income, net of tax, before reclassification adjustments | ||||||||||||||||||||||||||
Reclassification adjustments included in net income, net of tax: | ||||||||||||||||||||||||||
Net realized gains on available-for-sale securities, net of tax | ( | |||||||||||||||||||||||||
Reclassification adjustments included in net income, net of tax | ( | |||||||||||||||||||||||||
Other comprehensive income, net of tax | ||||||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
OneMain Holdings, Inc. Shareholders’ Equity | ||||||||||||||||||||||||||||||||
(dollars in millions) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholders’ Equity | |||||||||||||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
Balance, July 1, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | |||||||||||||||||||||||||||||
Cash dividends * | — | — | — | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Three Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
Balance, July 1, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | |||||||||||||||||||||||||||||
Cash dividends * | — | — | — | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
Balance, January 1, 2020 (pre-adoption) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net impact of adoption of (see Note 3) | — | — | — | ( | ( | |||||||||||||||||||||||||||
Balance, January 1, 2020 (post-adoption) | ||||||||||||||||||||||||||||||||
Common stock repurchased and retired | — | ( | — | — | ( | |||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||
Withholding tax on share-based compensation | — | ( | — | — | ( | |||||||||||||||||||||||||||
Other comprehensive income | — | — | — | |||||||||||||||||||||||||||||
Cash dividends * | — | — | — | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
Balance, January 1, 2019 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||
Withholding tax on share-based compensation | — | ( | — | — | ( | |||||||||||||||||||||||||||
Other comprehensive income | — | — | — | |||||||||||||||||||||||||||||
Cash dividends * | — | — | — | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
(dollars in millions) | 2020 | 2019 | ||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Reconciling adjustments: | ||||||||||||||
Provision for finance receivable losses | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Deferred income tax charge (benefit) | ( | |||||||||||||
Net loss on repurchase and repayment of debt | ||||||||||||||
Share-based compensation expense, net of forfeitures | ||||||||||||||
Other | ( | |||||||||||||
Cash flows due to changes in other assets and other liabilities | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities | ||||||||||||||
Net principal originations of finance receivables held for investment and held for sale | ( | ( | ||||||||||||
Proceeds on sale of finance receivables held for sale originated as held for investment | ||||||||||||||
Available-for-sale securities purchased | ( | ( | ||||||||||||
Available-for-sale securities called, sold, and matured | ||||||||||||||
Other securities purchased | ( | ( | ||||||||||||
Other securities called, sold, and matured | ||||||||||||||
Other, net | ( | ( | ||||||||||||
Net cash used for investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from issuance of long-term debt, net of commissions | ||||||||||||||
Repayment of long-term debt | ( | ( | ||||||||||||
Cash dividends | ( | ( | ||||||||||||
Common stock repurchased and retired | ( | |||||||||||||
Withholding tax on share-based compensation | ( | ( | ||||||||||||
Net cash provided by (used for) financing activities | ( | |||||||||||||
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents | ||||||||||||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period | ||||||||||||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period | $ | $ | ||||||||||||
Supplemental cash flow information | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash and restricted cash equivalents | ||||||||||||||
Total cash and cash equivalents and restricted cash and restricted cash equivalents | $ | $ | ||||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | ||||||||||||
Supplemental non-cash activities | ||||||||||||||
Right-of-use assets obtained in exchange for operating lease obligations | $ | $ | ||||||||||||
(dollars in millions, except par value amount) | September 30, 2020 | December 31, 2019 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Investment securities (includes available-for-sale securities with a fair value of $ amortized cost basis of $ | ||||||||||||||
Net finance receivables (includes loans of consolidated VIEs of $ in 2019) | ||||||||||||||
Unearned insurance premium and claim reserves | ( | ( | ||||||||||||
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $ 2020 and $ | ( | ( | ||||||||||||
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses | ||||||||||||||
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $ | ||||||||||||||
Goodwill | ||||||||||||||
Other intangible assets | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Shareholder's Equity | ||||||||||||||
Long-term debt (includes debt of consolidated VIEs of $ | $ | $ | ||||||||||||
Insurance claims and policyholder liabilities | ||||||||||||||
Deferred and accrued taxes | ||||||||||||||
Other liabilities (includes other liabilities of consolidated VIEs of $ in 2019) | ||||||||||||||
Total liabilities | ||||||||||||||
Contingencies (Note 14) | ||||||||||||||
Shareholder's equity: | ||||||||||||||
Common stock, par value $ outstanding at September 30, 2020 and December 31, 2019 | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive income | ||||||||||||||
Retained earnings | ||||||||||||||
Total shareholder's equity | ||||||||||||||
Total liabilities and shareholder's equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Interest income | $ | $ | $ | $ | ||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Net interest income | ||||||||||||||||||||||||||
Provision for finance receivable losses | ||||||||||||||||||||||||||
Net interest income after provision for finance receivable losses | ||||||||||||||||||||||||||
Other revenues: | ||||||||||||||||||||||||||
Insurance | ||||||||||||||||||||||||||
Investment | ||||||||||||||||||||||||||
Net loss on repurchase and repayment of debt | ( | ( | ( | ( | ||||||||||||||||||||||
Net gain on sale of real estate loans | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total other revenues | ||||||||||||||||||||||||||
Other expenses: | ||||||||||||||||||||||||||
Salaries and benefits | ||||||||||||||||||||||||||
Other operating expenses | ||||||||||||||||||||||||||
Insurance policy benefits and claims | ||||||||||||||||||||||||||
Total other expenses | ||||||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||
Income taxes | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||
Net change in unrealized gains on non-credit impaired available-for-sale securities | ||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ||||||||||||||||||||||||
Income tax effect: | ||||||||||||||||||||||||||
Net change in unrealized gains on non-credit impaired available-for-sale securities | ( | ( | ( | ( | ||||||||||||||||||||||
Retirement plan liability adjustments | ( | |||||||||||||||||||||||||
Foreign currency translation adjustments | ||||||||||||||||||||||||||
Other comprehensive income, net of tax, before reclassification adjustments | ||||||||||||||||||||||||||
Reclassification adjustments included in net income, net of tax: | ||||||||||||||||||||||||||
Net realized gains on available-for-sale securities, net of tax | ( | |||||||||||||||||||||||||
Reclassification adjustments included in net income, net of tax | ( | |||||||||||||||||||||||||
Other comprehensive income, net of tax | ||||||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
OneMain Finance Corporation Shareholder's Equity | ||||||||||||||||||||||||||||||||
(dollars in millions) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholder’s Equity | |||||||||||||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
Balance, July 1, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | |||||||||||||||||||||||||||||
Cash dividends | — | — | — | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Three Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
Balance, July 1, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | |||||||||||||||||||||||||||||
Merger of SFI with OMFC | — | ( | — | — | ( | |||||||||||||||||||||||||||
Cash contribution from OMH | — | — | — | |||||||||||||||||||||||||||||
Cash dividends | — | — | — | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
Balance, January 1, 2020 (pre-adoption) | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net impact of adoption of (see Note 3) | — | — | — | ( | ( | |||||||||||||||||||||||||||
Balance, January 1, 2020 (post-adoption) | ||||||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||
Withholding tax on share-based compensation | — | ( | — | — | ( | |||||||||||||||||||||||||||
Other comprehensive income | — | — | — | |||||||||||||||||||||||||||||
Cash dividends | — | — | — | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
Balance, January 1, 2019 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
Merger of SFI with OMFC | — | ( | — | — | ( | |||||||||||||||||||||||||||
Cash contribution from OMH | — | — | — | |||||||||||||||||||||||||||||
Contribution of SCHC to OMFC from SFI | — | — | — | |||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||
Withholding tax on shared-based compensation | — | ( | — | — | ( | |||||||||||||||||||||||||||
Other comprehensive income | — | — | — | |||||||||||||||||||||||||||||
Cash dividends | — | — | — | ( | ( | |||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
(dollars in millions) | 2020 | 2019 | ||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Reconciling adjustments: | ||||||||||||||
Provision for finance receivable losses | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Deferred income tax charge (benefit) | ( | |||||||||||||
Net loss on repurchase and repayment of debt | ||||||||||||||
Share-based compensation expense, net of forfeitures | ||||||||||||||
Other | ( | |||||||||||||
Cash flows due to changes in other assets and other liabilities | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities | ||||||||||||||
Net principal originations of finance receivables held for investment and held for sale | ( | ( | ||||||||||||
Proceeds on sale of finance receivables held for sale originated as held for investment | ||||||||||||||
Available-for-sale securities purchased | ( | ( | ||||||||||||
Available-for-sale securities called, sold, and matured | ||||||||||||||
Other securities purchased | ( | ( | ||||||||||||
Other securities called, sold, and matured | ||||||||||||||
Other, net | ( | ( | ||||||||||||
Net cash used for investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from issuance of long-term debt, net of commissions | ||||||||||||||
Repayment of long-term debt | ( | ( | ||||||||||||
Cash contribution of SCLH | ||||||||||||||
Cash dividends to OMH | ( | ( | ||||||||||||
Cash contribution from OMH | ||||||||||||||
Payments on intercompany notes payable | ( | |||||||||||||
Withholding tax on share-based compensation | ( | ( | ||||||||||||
Net cash provided by (used for) financing activities | ( | |||||||||||||
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents | ||||||||||||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period | ||||||||||||||
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period | $ | $ | ||||||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued) | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
(dollars in millions) | 2020 | 2019 | ||||||||||||
Supplemental cash flow information | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash and restricted cash equivalents | ||||||||||||||
Total cash and cash equivalents and restricted cash and restricted cash equivalents | $ | $ | ||||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | ||||||||||||
Supplemental non-cash activities | ||||||||||||||
Right-of-use assets obtained in exchange for operating lease obligations | $ | $ | ||||||||||||
Non-cash contribution of SCLH | ||||||||||||||
Non-cash merger of SFI with OMFC | ( | |||||||||||||
1. Business and Basis of Presentation |
2. Reconciliation of OneMain Finance Corporation Results to OneMain Holdings, Inc. Results |
September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||
(dollars in millions) | OMH | OMFC | Difference | OMH | OMFC | Difference | ||||||||||||||||||||||||||||||||
Other assets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Deferred and accrued taxes | ( | ( | ||||||||||||||||||||||||||||||||||||
Other liabilities | ( | |||||||||||||||||||||||||||||||||||||
Total shareholders' equity (a) |
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||||||||
(dollars in millions) | OMH | OMFC | Difference | OMH | OMFC | Difference | ||||||||||||||||||||||||||||||||
Interest expense | $ | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||
Other operating expenses | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||||||||||||||
Income taxes | ( | |||||||||||||||||||||||||||||||||||||
Net Income | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||||||||
(dollars in millions) | OMH | OMFC | Difference | OMH | OMFC | Difference | ||||||||||||||||||||||||||||||||
Interest expense | $ | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||
Other revenues (b) | ( | |||||||||||||||||||||||||||||||||||||
Other operating expenses | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | ( | |||||||||||||||||||||||||||||||||||||
Income taxes | ( | |||||||||||||||||||||||||||||||||||||
Net Income | ( |
3. Recent Accounting Pronouncements |
4. Finance Receivables |
(dollars in millions) | September 30, 2020 | December 31, 2019 | ||||||||||||
Gross receivables * | $ | $ | ||||||||||||
Unearned points and fees | ( | ( | ||||||||||||
Accrued finance charges | ||||||||||||||
Deferred origination costs | ||||||||||||||
Total | $ | $ |
(dollars in millions) | 2020 | 2019 | 2018 | 2017 | 2016 | Prior | Total | |||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||||||||||
Current | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
30-59 days past due | ||||||||||||||||||||||||||||||||||||||||||||
60-89 days past due | ||||||||||||||||||||||||||||||||||||||||||||
Total performing | ||||||||||||||||||||||||||||||||||||||||||||
Nonperforming (Nonaccrual) | ||||||||||||||||||||||||||||||||||||||||||||
90-179 days past due | ||||||||||||||||||||||||||||||||||||||||||||
180 days or more past due | ||||||||||||||||||||||||||||||||||||||||||||
Total nonperforming | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
(dollars in millions) | Total | |||||||
Performing | ||||||||
Current | $ | |||||||
30-59 days past due | ||||||||
60-89 days past due | ||||||||
Total performing | ||||||||
Nonperforming | ||||||||
90-179 days past due | ||||||||
180 days or more past due | ||||||||
Total nonperforming | ||||||||
Total | $ |
(dollars in millions) | December 31, 2019 | |||||||
Personal Loans | ||||||||
Carrying amount, net of allowance | $ | |||||||
Outstanding balance (a) | ||||||||
Allowance for purchased credit impaired finance receivable losses (b) | ||||||||
Real Estate Loans - Held for Sale | ||||||||
Carrying amount | $ | |||||||
Outstanding balance (a) | ||||||||
(dollars in millions) | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | ||||||||||||
Personal Loans | ||||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Accretion | ( | ( | ||||||||||||
Reclassifications from nonaccretable difference * | ||||||||||||||
Balance at end of period | $ | $ | ||||||||||||
Real Estate Loans - Held for Sale | ||||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Accretion | ( | ( | ||||||||||||
Transfer due to finance receivables sold | ( | |||||||||||||
Balance at end of period | $ | $ |
(dollars in millions) | September 30, 2020 | December 31, 2019 | ||||||||||||
Personal Loans | ||||||||||||||
TDR gross receivables (a) | $ | $ | ||||||||||||
TDR net receivables (b) | ||||||||||||||
Allowance for TDR finance receivable losses | ||||||||||||||
Real Estate Loans - Held for Sale | ||||||||||||||
TDR gross receivables (a) | $ | $ | ||||||||||||
TDR net receivables (b) | ||||||||||||||
(dollars in millions) | Personal Loans | Real Estate Loans | Total | |||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||
TDR average net receivables | $ | $ | $ | |||||||||||||||||
TDR finance charges recognized | ||||||||||||||||||||
Three Months Ended September 30, 2019 | ||||||||||||||||||||
TDR average net receivables | $ | $ | $ | |||||||||||||||||
TDR finance charges recognized | ||||||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||
TDR average net receivables | $ | $ | $ | |||||||||||||||||
TDR finance charges recognized | ||||||||||||||||||||
Nine Months Ended September 30, 2019 | ||||||||||||||||||||
TDR average net receivables | $ | $ | $ | |||||||||||||||||
TDR finance charges recognized | ||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Personal Loans | ||||||||||||||||||||||||||
Pre-modification TDR net finance receivables | $ | $ | $ | $ | ||||||||||||||||||||||
Post-modification TDR net finance receivables: | ||||||||||||||||||||||||||
Rate reduction | ||||||||||||||||||||||||||
Other * | ||||||||||||||||||||||||||
Total post-modification TDR net finance receivables | $ | $ | $ | $ | ||||||||||||||||||||||
Number of TDR accounts | ||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Personal Loans | ||||||||||||||||||||||||||
TDR net finance receivables * | $ | $ | $ | $ | ||||||||||||||||||||||
Number of TDR accounts | ||||||||||||||||||||||||||
5. Allowance for Finance Receivable Losses |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Personal Loans | ||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
— | — | — | ||||||||||||||||||||||||
Provision for finance receivable losses | ||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ | ||||||||||||||||||||||
(dollars in millions) | September 30, 2020 | December 31, 2019 | ||||||||||||
Allowance for finance receivable losses: | ||||||||||||||
Collectively evaluated for impairment | $ | $ | ||||||||||||
Purchased credit impaired finance receivables * | ||||||||||||||
TDR finance receivables | ||||||||||||||
Total | $ | $ | ||||||||||||
Finance receivables: | ||||||||||||||
Collectively evaluated for impairment | $ | $ | ||||||||||||
Purchased credit impaired finance receivables * | ||||||||||||||
TDR finance receivables | ||||||||||||||
Total | $ | $ | ||||||||||||
Allowance for finance receivable losses as a percentage of finance receivables | % | % | ||||||||||||
6. Finance Receivables Held for Sale |
7. Investment Securities |
(dollars in millions) | Cost/ Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||
September 30, 2020* | ||||||||||||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||||||||||||
U.S. government and government sponsored entities | $ | $ | $ | $ | ||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions | ||||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities | ||||||||||||||||||||||||||
Corporate debt | ( | |||||||||||||||||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||||||||||||
RMBS | ||||||||||||||||||||||||||
CMBS | ||||||||||||||||||||||||||
CDO/ABS | ( | |||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | |||||||||||||||||||||
(dollars in millions) | Cost/ Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||
December 31, 2019* | ||||||||||||||||||||||||||
Fixed maturity available-for-sale securities: | ||||||||||||||||||||||||||
U.S. government and government sponsored entities | $ | $ | $ | $ | ||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions | ( | |||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities | — | |||||||||||||||||||||||||
Corporate debt | ( | |||||||||||||||||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||||||||||||
RMBS | ||||||||||||||||||||||||||
CMBS | — | |||||||||||||||||||||||||
CDO/ABS | ||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
(dollars in millions) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities | ||||||||||||||||||||||||||||||||||||||
Corporate debt | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||||||||||||||||||||||||
RMBS | ||||||||||||||||||||||||||||||||||||||
CMBS | ||||||||||||||||||||||||||||||||||||||
CDO/ABS | ( | ( | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
December 31, 2019* | ||||||||||||||||||||||||||||||||||||||
U.S. government and government sponsored entities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions | ( | ( | ||||||||||||||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities | ||||||||||||||||||||||||||||||||||||||
Corporate debt | ( | ( | ||||||||||||||||||||||||||||||||||||
Mortgage-backed, asset-backed, and collateralized: | ||||||||||||||||||||||||||||||||||||||
RMBS | ||||||||||||||||||||||||||||||||||||||
CMBS | ||||||||||||||||||||||||||||||||||||||
CDO/ABS | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | $ | ( |
(dollars in millions) | Fair Value | Amortized Cost | ||||||||||||
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: | ||||||||||||||
Due in 1 year or less | $ | $ | ||||||||||||
Due after 1 year through 5 years | ||||||||||||||
Due after 5 years through 10 years | ||||||||||||||
Due after 10 years | ||||||||||||||
Mortgage-backed, asset-backed, and collateralized securities | ||||||||||||||
Total | $ | $ |
(dollars in millions) | September 30, 2020 | December 31, 2019 | ||||||||||||
Fixed maturity other securities: | ||||||||||||||
Bonds | ||||||||||||||
Non-U.S. government and government sponsored entities | $ | $ | ||||||||||||
Corporate debt | ||||||||||||||
Mortgage-backed, asset-backed, and collateralized bonds | ||||||||||||||
Total bonds | ||||||||||||||
Preferred stock * | ||||||||||||||
Common stock * | ||||||||||||||
Other long-term investments | ||||||||||||||
Total | $ | $ |
8. Long-term Debt |
Senior Debt | ||||||||||||||||||||||||||
(dollars in millions) | Securitizations | Unsecured Notes (a) | Junior Subordinated Debt (a) | Total | ||||||||||||||||||||||
Interest rates (b) | ||||||||||||||||||||||||||
Fourth quarter 2020 | $ | $ | $ | $ | ||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||
2023 | ||||||||||||||||||||||||||
2024 | ||||||||||||||||||||||||||
2025-2067 | ||||||||||||||||||||||||||
Securitizations (c) | — | — | ||||||||||||||||||||||||
Total principal maturities | $ | $ | $ | $ | ||||||||||||||||||||||
Total carrying amount | $ | $ | $ | $ | ||||||||||||||||||||||
Debt issuance costs (d) | ( | ( | ( |
9. Variable Interest Entities |
(dollars in millions) | September 30, 2020 | December 31, 2019 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Finance receivables - Personal loans | ||||||||||||||
Allowance for finance receivable losses | ||||||||||||||
Restricted cash and restricted cash equivalents | ||||||||||||||
Other assets | ||||||||||||||
Liabilities | ||||||||||||||
Long-term debt | $ | $ | ||||||||||||
Other liabilities |
10. Insurance |
At or for the Nine Months Ended September 30, | ||||||||||||||
(dollars in millions) | 2020 | 2019 | ||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Less reinsurance recoverables | ( | ( | ||||||||||||
Net balance at beginning of period | ||||||||||||||
Additions for losses and loss adjustment expenses incurred to: | ||||||||||||||
Current year | ||||||||||||||
Prior years * | ( | ( | ||||||||||||
Total | ||||||||||||||
Reductions for losses and loss adjustment expenses paid related to: | ||||||||||||||
Current year | ( | ( | ||||||||||||
Prior years | ( | ( | ||||||||||||
Total | ( | ( | ||||||||||||
Net balance at end of period | ||||||||||||||
Plus reinsurance recoverables | ||||||||||||||
Balance at end of period | $ | $ |
11. Capital Stock and Earnings Per Share (OMH Only) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Balance at beginning of period | ||||||||||||||||||||||||||
Common shares issued | ||||||||||||||||||||||||||
Common shares retired | ( | |||||||||||||||||||||||||
Balance at end of period |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Numerator (basic and diluted): | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||
Weighted average number of shares outstanding (basic) | ||||||||||||||||||||||||||
Effect of dilutive securities * | ||||||||||||||||||||||||||
Weighted average number of shares outstanding (diluted) | ||||||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted | $ | $ | $ | $ |
12. Accumulated Other Comprehensive Income (Loss) |
(dollars in millions) | Unrealized Gains (Losses) Available-for-Sale Securities * | Retirement Plan Liabilities Adjustments | Foreign Currency Translation Adjustments | Total Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | ( | $ | |||||||||||||||||||||
Other comprehensive income before reclassifications | ||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | ( | $ | |||||||||||||||||||||
Three Months Ended September 30, 2019 | ||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | ( | $ | $ | |||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | |||||||||||||||||||||||||
Balance at end of period | $ | $ | ( | $ | $ | |||||||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | |||||||||||||||||||||||||
Reclassification adjustments from accumulated other comprehensive income | ( | ( | ||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | ( | $ | |||||||||||||||||||||
Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||
Balance at beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Other comprehensive income before reclassifications | ||||||||||||||||||||||||||
Balance at end of period | $ | $ | ( | $ | $ | |||||||||||||||||||||
13. Income Taxes |
14. Contingencies |
15. Segment Information |
(dollars in millions) | Consumer and Insurance | Other | Segment to GAAP Adjustment | Consolidated Total | ||||||||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Interest income | $ | $ | $ | $ | ||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Provision for finance receivable losses | ( | |||||||||||||||||||||||||
Net interest income after provision for finance receivable losses | ( | |||||||||||||||||||||||||
Other revenues | ( | |||||||||||||||||||||||||
Other expenses | ||||||||||||||||||||||||||
Income (loss) before income tax expense (benefit) | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||
Three Months Ended September 30, 2019 | ||||||||||||||||||||||||||
Interest income | $ | $ | $ | $ | ||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Provision for finance receivable losses | ||||||||||||||||||||||||||
Net interest income after provision for finance receivable losses | ( | |||||||||||||||||||||||||
Other revenues | ( | |||||||||||||||||||||||||
Other expenses | ||||||||||||||||||||||||||
Income (loss) before income tax expense (benefit) | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||
(dollars in millions) | Consumer and Insurance | Other | Segment to GAAP Adjustment | Consolidated Total | ||||||||||||||||||||||
At or for the Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||
Interest income | $ | $ | $ | $ | ||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Provision for finance receivable losses | ||||||||||||||||||||||||||
Net interest income after provision for finance receivable losses | ( | |||||||||||||||||||||||||
Other revenues | ( | |||||||||||||||||||||||||
Other expenses | ||||||||||||||||||||||||||
Income (loss) before income tax expense (benefit) | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||
Assets | $ | $ | $ | $ |
At or for the Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||
Interest income | $ | $ | $ | $ | ||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Provision for finance receivable losses | ||||||||||||||||||||||||||
Net interest income after provision for finance receivable losses | ( | |||||||||||||||||||||||||
Other revenues * | ( | |||||||||||||||||||||||||
Other expenses | ||||||||||||||||||||||||||
Income (loss) before income tax expense (benefit) | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||
Assets | $ | $ | $ | $ |
16. Fair Value Measurements |
Fair Value Measurements Using | Total Fair Value | Total Carrying Value | ||||||||||||||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||||||||
Net finance receivables, less allowance for finance receivable losses | ||||||||||||||||||||||||||||||||
Restricted cash and restricted cash equivalents | ||||||||||||||||||||||||||||||||
Other assets * | ||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Long-term debt | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||||||||
Net finance receivables, less allowance for finance receivable losses | ||||||||||||||||||||||||||||||||
Restricted cash and restricted cash equivalents | ||||||||||||||||||||||||||||||||
Other assets * | ||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Long-term debt | $ | $ | $ | $ | $ |
Fair Value Measurements Using | Total Carried At Fair Value | |||||||||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash equivalents in mutual funds | $ | $ | $ | $ | ||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||
U.S. government and government sponsored entities | ||||||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions | ||||||||||||||||||||||||||
Commercial paper | ||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities | ||||||||||||||||||||||||||
Corporate debt | ||||||||||||||||||||||||||
RMBS | ||||||||||||||||||||||||||
CMBS | ||||||||||||||||||||||||||
CDO/ABS | ||||||||||||||||||||||||||
Total available-for-sale securities | ||||||||||||||||||||||||||
Other securities | ||||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities | ||||||||||||||||||||||||||
Corporate debt | ||||||||||||||||||||||||||
RMBS | ||||||||||||||||||||||||||
CDO/ABS | ||||||||||||||||||||||||||
Total bonds | ||||||||||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||
Common stock | ||||||||||||||||||||||||||
Total other securities | ||||||||||||||||||||||||||
Total investment securities | ||||||||||||||||||||||||||
Restricted cash equivalents in mutual funds | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Fair Value Measurements Using | Total Carried At Fair Value | |||||||||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash equivalents in mutual funds | $ | $ | $ | $ | ||||||||||||||||||||||
Cash equivalents in securities | ||||||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||
U.S. government and government sponsored entities | ||||||||||||||||||||||||||
Obligations of states, municipalities, and political subdivisions | ||||||||||||||||||||||||||
Certificates of deposit and commercial paper | ||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities | ||||||||||||||||||||||||||
Corporate debt | ||||||||||||||||||||||||||
RMBS | ||||||||||||||||||||||||||
CMBS | ||||||||||||||||||||||||||
CDO/ABS | ||||||||||||||||||||||||||
Total available-for-sale securities | ||||||||||||||||||||||||||
Other securities | ||||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||
Non-U.S. government and government sponsored entities | ||||||||||||||||||||||||||
Corporate debt | ||||||||||||||||||||||||||
RMBS | ||||||||||||||||||||||||||
CDO/ABS | ||||||||||||||||||||||||||
Total bonds | ||||||||||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||
Common stock | ||||||||||||||||||||||||||
Other long-term investments | ||||||||||||||||||||||||||
Total other securities | ||||||||||||||||||||||||||
Total investment securities | ||||||||||||||||||||||||||
Restricted cash equivalents in mutual funds | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Topic | Page | |||||||
Forward-Looking Statements |
Overview |
Recent Developments and Outlook |
Results of Operations |
At or for the Three Months Ended September 30, | At or for the Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions, except per share amounts) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Interest income | $ | 1,089 | $ | 1,065 | $ | 3,273 | $ | 3,020 | ||||||||||||||||||
Interest expense | 255 | 244 | 781 | 717 | ||||||||||||||||||||||
Provision for finance receivable losses | 231 | 282 | 1,186 | 836 | ||||||||||||||||||||||
Net interest income after provision for finance receivable losses | 603 | 539 | 1,306 | 1,467 | ||||||||||||||||||||||
Other revenues | 101 | 156 | 390 | 460 | ||||||||||||||||||||||
Other expenses | 363 | 398 | 1,194 | 1,172 | ||||||||||||||||||||||
Income before income taxes | 341 | 297 | 502 | 755 | ||||||||||||||||||||||
Income taxes | 91 | 49 | 131 | 161 | ||||||||||||||||||||||
Net income | $ | 250 | $ | 248 | $ | 371 | $ | 594 | ||||||||||||||||||
Share Data: | ||||||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||
Diluted | $ | 1.86 | $ | 1.82 | $ | 2.75 | $ | 4.36 | ||||||||||||||||||
Selected Financial Statistics * | ||||||||||||||||||||||||||
Finance receivables held for investment: | ||||||||||||||||||||||||||
Net finance receivables | $ | 17,817 | $ | 17,791 | $ | 17,817 | $ | 17,791 | ||||||||||||||||||
Number of accounts | 2,297,167 | 2,406,753 | 2,297,167 | 2,406,753 | ||||||||||||||||||||||
Average net receivables | $ | 17,740 | $ | 17,434 | $ | 18,010 | $ | 16,706 | ||||||||||||||||||
Yield | 24.39 | % | 24.16 | % | 24.24 | % | 24.10 | % | ||||||||||||||||||
Gross charge-off ratio | 6.14 | % | 5.92 | % | 6.90 | % | 6.89 | % | ||||||||||||||||||
Recovery ratio | (0.95) | % | (0.73) | % | (0.91) | % | (0.74) | % | ||||||||||||||||||
Net charge-off ratio | 5.19 | % | 5.19 | % | 5.99 | % | 6.15 | % | ||||||||||||||||||
30-89 Delinquency ratio | 1.95 | % | 2.30 | % | 1.95 | % | 2.30 | % | ||||||||||||||||||
Origination volume | $ | 2,887 | $ | 3,657 | $ | 7,523 | $ | 10,118 | ||||||||||||||||||
Number of accounts originated | 300,376 | 395,899 | 771,628 | 1,082,576 | ||||||||||||||||||||||
Debt balances: | ||||||||||||||||||||||||||
Long-term debt balance | $ | 17,531 | $ | 17,021 | $ | 17,531 | $ | 17,021 | ||||||||||||||||||
Average daily debt balance | 17,546 | 16,271 | 18,331 | 16,028 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Consumer and Insurance | ||||||||||||||||||||||||||
Income before income taxes - Segment Accounting Basis | $ | 351 | $ | 312 | $ | 530 | $ | 814 | ||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Direct costs associated with COVID-19 | 4 | — | 13 | — | ||||||||||||||||||||||
Acquisition-related transaction and integration expenses | 2 | 2 | 10 | 16 | ||||||||||||||||||||||
Net loss on repurchase and repayment of debt | 35 | 2 | 35 | 30 | ||||||||||||||||||||||
Net gain on sale of cost method investment | — | — | — | (11) | ||||||||||||||||||||||
Restructuring charges | 1 | 1 | 7 | 5 | ||||||||||||||||||||||
Adjusted pretax income (non-GAAP) | $ | 393 | $ | 317 | $ | 595 | $ | 854 | ||||||||||||||||||
Provision for finance receivable losses | $ | 232 | $ | 277 | $ | 1,184 | $ | 816 | ||||||||||||||||||
Net charge-offs | (232) | (227) | (810) | (767) | ||||||||||||||||||||||
Pretax capital generation (non-GAAP) | $ | 393 | $ | 367 | $ | 969 | $ | 903 | ||||||||||||||||||
Other | ||||||||||||||||||||||||||
Loss before income taxes - Segment Accounting Basis | $ | (2) | $ | (2) | $ | (5) | $ | (2) | ||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Additional net gain on sale of SpringCastle interests | (4) | — | (4) | (7) | ||||||||||||||||||||||
Lower of cost or fair value adjustment (a) | 4 | — | 4 | — | ||||||||||||||||||||||
Net loss on sale of real estate loans (b) | — | — | — | 1 | ||||||||||||||||||||||
Adjusted pretax loss (non-GAAP) | $ | (2) | $ | (2) | $ | (5) | $ | (8) |
Segment Results |
At or for the Three Months Ended September 30, | At or for the Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Interest income | $ | 1,086 | $ | 1,060 | $ | 3,260 | $ | 3,013 | ||||||||||||||||||
Interest expense | 250 | 238 | 765 | 700 | ||||||||||||||||||||||
Provision for finance receivable losses | 232 | 277 | 1,184 | 816 | ||||||||||||||||||||||
Net interest income after provision for finance receivable losses | 604 | 545 | 1,311 | 1,497 | ||||||||||||||||||||||
Other revenues | 134 | 154 | 415 | 461 | ||||||||||||||||||||||
Other expenses | 345 | 382 | 1,131 | 1,104 | ||||||||||||||||||||||
Adjusted pretax income (non-GAAP) | $ | 393 | $ | 317 | $ | 595 | $ | 854 | ||||||||||||||||||
Selected Financial Statistics * | ||||||||||||||||||||||||||
Finance receivables held for investment: | ||||||||||||||||||||||||||
Net finance receivables | $ | 17,826 | $ | 17,825 | $ | 17,826 | $ | 17,825 | ||||||||||||||||||
Number of accounts | 2,297,167 | 2,406,753 | 2,297,167 | 2,406,753 | ||||||||||||||||||||||
Average net receivables | $ | 17,750 | $ | 17,469 | $ | 18,023 | $ | 16,740 | ||||||||||||||||||
Yield | 24.34 | % | 24.07 | % | 24.16 | % | 24.06 | % | ||||||||||||||||||
Gross charge-off ratio | 6.15 | % | 5.98 | % | 6.91 | % | 6.97 | % | ||||||||||||||||||
Recovery ratio | (0.95) | % | (0.81) | % | (0.91) | % | (0.84) | % | ||||||||||||||||||
Net charge-off ratio | 5.20 | % | 5.17 | % | 6.00 | % | 6.13 | % | ||||||||||||||||||
30-89 Delinquency ratio | 1.95 | % | 2.30 | % | 1.95 | % | 2.30 | % | ||||||||||||||||||
Origination volume | $ | 2,887 | $ | 3,657 | $ | 7,523 | $ | 10,118 | ||||||||||||||||||
Number of accounts originated | 300,376 | 395,899 | 771,628 | 1,082,576 | ||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Interest income | $ | 1 | $ | 2 | $ | 4 | $ | 7 | ||||||||||||||||||
Interest expense | 1 | 1 | 3 | 4 | ||||||||||||||||||||||
Net interest income after provision for finance receivable losses | — | 1 | 1 | 3 | ||||||||||||||||||||||
Other revenues | 4 | 5 | 12 | 20 | ||||||||||||||||||||||
Other expenses | 6 | 8 | 18 | 31 | ||||||||||||||||||||||
Adjusted pretax loss (non-GAAP) | $ | (2) | $ | (2) | $ | (5) | $ | (8) |
September 30, | ||||||||||||||
(dollars in millions) | 2020 | 2019 | ||||||||||||
Net finance receivables held for sale: | ||||||||||||||
Other receivables | $ | 54 | $ | 70 |
Credit Quality |
(dollars in millions) | Consumer and Insurance | Segment to GAAP Adjustment (a) | GAAP Basis | |||||||||||||||||
September 30, 2020 | ||||||||||||||||||||
Current | $ | 17,212 | $ | (7) | $ | 17,205 | ||||||||||||||
30-59 days past due | 216 | (1) | 215 | |||||||||||||||||
Delinquent (60-89 days past due) | 132 | (1) | 131 | |||||||||||||||||
Performing | 17,560 | (9) | 17,551 | |||||||||||||||||
Nonperforming (90+ days past due) | 266 | — | 266 | |||||||||||||||||
Total net finance receivables | $ | 17,826 | $ | (9) | $ | 17,817 | ||||||||||||||
Delinquency ratio | ||||||||||||||||||||
30-89 days past due | 1.95 | % | (b) | 1.95 | % | |||||||||||||||
30+ days past due | 3.44 | % | (b) | 3.44 | % | |||||||||||||||
60+ days past due | 2.23 | % | (b) | 2.23 | % | |||||||||||||||
90+ days past due | 1.49 | % | (b) | 1.49 | % | |||||||||||||||
December 31, 2019 | ||||||||||||||||||||
Current | $ | 17,578 | $ | (28) | $ | 17,550 | ||||||||||||||
30-59 days past due | 273 | (1) | 272 | |||||||||||||||||
Delinquent (60-89 days past due) | 182 | (1) | 181 | |||||||||||||||||
Performing | 18,033 | (30) | 18,003 | |||||||||||||||||
Nonperforming (90+ days past due) | 388 | (2) | 386 | |||||||||||||||||
Total net finance receivables | $ | 18,421 | $ | (32) | $ | 18,389 | ||||||||||||||
Delinquency ratio | ||||||||||||||||||||
30-89 days past due | 2.47 | % | (b) | 2.46 | % | |||||||||||||||
30+ days past due | 4.58 | % | (b) | 4.56 | % | |||||||||||||||
60+ days past due | 3.09 | % | (b) | 3.08 | % | |||||||||||||||
90+ days past due | 2.11 | % | (b) | 2.10 | % |
(dollars in millions) | Consumer and Insurance | Segment to GAAP Adjustment | Consolidated Total | |||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||
Balance at beginning of period | $ | 2,342 | $ | (18) | $ | 2,324 | ||||||||||||||
Provision for finance receivable losses | 232 | (1) | 231 | |||||||||||||||||
Charge-offs | (274) | — | (274) | |||||||||||||||||
Recoveries | 42 | 1 | 43 | |||||||||||||||||
Balance at end of period | $ | 2,342 | $ | (18) | $ | 2,324 | ||||||||||||||
Three Months Ended September 30, 2019 | ||||||||||||||||||||
Balance at beginning of period | $ | 772 | $ | (28) | $ | 744 | ||||||||||||||
Provision for finance receivable losses | 277 | 5 | 282 | |||||||||||||||||
Charge-offs | (263) | 3 | (260) | |||||||||||||||||
Recoveries | 36 | (4) | 32 | |||||||||||||||||
Balance at end of period | $ | 822 | $ | (24) | $ | 798 | ||||||||||||||
(dollars in millions) | Consumer and Insurance | Segment to GAAP Adjustment | Consolidated Total | |||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||
Balance at beginning of period | $ | 849 | $ | (20) | $ | 829 | ||||||||||||||
Impact of adoption of ASU 2016-13 (a) | 1,119 | (1) | 1,118 | |||||||||||||||||
Provision for finance receivable losses | 1,184 | 2 | 1,186 | |||||||||||||||||
Charge-offs | (932) | 1 | (931) | |||||||||||||||||
Recoveries | 122 | — | 122 | |||||||||||||||||
Balance at end of period | $ | 2,342 | $ | (18) | $ | 2,324 | ||||||||||||||
Allowance ratio | 13.14 | % | (b) | 13.05 | % | |||||||||||||||
Nine Months Ended September 30, 2019 | ||||||||||||||||||||
Balance at beginning of period | $ | 773 | $ | (42) | $ | 731 | ||||||||||||||
Provision for finance receivable losses | 816 | 20 | 836 | |||||||||||||||||
Charge-offs | (873) | 11 | (862) | |||||||||||||||||
Recoveries | 106 | (13) | 93 | |||||||||||||||||
Balance at end of period | $ | 822 | $ | (24) | $ | 798 | ||||||||||||||
Allowance ratio | 4.61 | % | (c) | 4.49 | % |
(dollars in millions) | Consumer and Insurance | Segment to GAAP Adjustment | GAAP Basis | |||||||||||||||||
September 30, 2020 | ||||||||||||||||||||
TDR net finance receivables | $ | 743 | $ | (42) | $ | 701 | ||||||||||||||
Allowance for TDR finance receivable losses | 344 | (23) | 321 | |||||||||||||||||
December 31, 2019 | ||||||||||||||||||||
TDR net finance receivables | $ | 721 | $ | (63) | $ | 658 | ||||||||||||||
Allowance for TDR finance receivable losses | 292 | (20) | 272 |
(dollars in millions) | September 30, 2020 * | December 31, 2019 | ||||||||||||
FICO scores | ||||||||||||||
660 or higher | $ | 4,612 | $ | 3,951 | ||||||||||
620-659 | 4,835 | 4,683 | ||||||||||||
619 or below | 8,370 | 9,755 | ||||||||||||
Total | $ | 17,817 | $ | 18,389 |
Liquidity and Capital Resources |
Declaration Date | Record Date | Payment Date | Dividend Per Share | Amount Paid | |||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
February 10, 2020 | February 26, 2020 | March 13, 2020 | $ | 2.83 | * | $ | 386 | ||||||||||||||||||||||
April 27, 2020 | May 29, 2020 | June 12, 2020 | 0.33 | 44 | |||||||||||||||||||||||||
July 27, 2020 | August 10, 2020 | August 18, 2020 | 2.33 | * | 313 | ||||||||||||||||||||||||
Total | $ | 5.49 | $ | 743 |
(dollars in millions) | Issue Amount (a) | Initial Collateral Balance | Current Note Amounts Outstanding (a) | Current Collateral Balance (b) | Current Weighted Average Interest Rate | Original Revolving Period | ||||||||||||||||||||||||||||||||
SLFT 2015-B | $ | 314 | $ | 336 | $ | 213 | $ | 235 | 3.92 | % | 5 years | |||||||||||||||||||||||||||
SLFT 2017-A | 652 | 685 | 532 | 590 | 3.04 | % | 3 years | |||||||||||||||||||||||||||||||
OMFIT 2015-3 | 293 | 329 | 282 | 295 | 4.24 | % | 5 years | |||||||||||||||||||||||||||||||
OMFIT 2016-3 | 350 | 397 | 317 | 415 | 4.33 | % | 5 years | |||||||||||||||||||||||||||||||
OMFIT 2017-1 | 947 | 988 | 423 | 486 | 2.88 | % | 2 years | |||||||||||||||||||||||||||||||
OMFIT 2018-1 | 632 | 650 | 600 | 683 | 3.60 | % | 3 years | |||||||||||||||||||||||||||||||
OMFIT 2018-2 | 368 | 381 | 350 | 400 | 3.87 | % | 5 years | |||||||||||||||||||||||||||||||
OMFIT 2019-1 | 632 | 654 | 600 | 687 | 3.79 | % | 2 years | |||||||||||||||||||||||||||||||
OMFIT 2019-2 | 900 | 947 | 900 | 995 | 3.30 | % | 7 years | |||||||||||||||||||||||||||||||
OMFIT 2019-A | 789 | 892 | 750 | 892 | 3.78 | % | 7 years | |||||||||||||||||||||||||||||||
OMFIT 2020-1 (c) | 821 | 958 | 821 | 958 | 4.12 | % | 2 years | |||||||||||||||||||||||||||||||
OMFIT 2020-2 (d) | 1,000 | 1,053 | 1,000 | 1,053 | 2.03 | % | 5 years | |||||||||||||||||||||||||||||||
ODART 2017-2 | 605 | 624 | 122 | 149 | 3.58 | % | 1 year | |||||||||||||||||||||||||||||||
ODART 2018-1 | 947 | 964 | 791 | 819 | 3.58 | % | 2 years | |||||||||||||||||||||||||||||||
ODART 2019-1 | 737 | 750 | 700 | 750 | 3.79 | % | 5 years | |||||||||||||||||||||||||||||||
Total securitizations | $ | 9,987 | $ | 10,608 | $ | 8,401 | $ | 9,407 |
(dollars in millions) | Advance Maximum Balance | Amount Drawn | ||||||||||||
Rocky River Funding, LLC | $ | 400 | $ | — | ||||||||||
OneMain Financial Funding IX, LLC | 650 | — | ||||||||||||
Mystic River Funding, LLC | 850 | — | ||||||||||||
Fourth Avenue Auto Funding, LLC | 200 | — | ||||||||||||
OneMain Financial Funding VIII, LLC | 500 | — | ||||||||||||
Thayer Brook Funding, LLC | 500 | — | ||||||||||||
Hubbard River Funding, LLC | 250 | — | ||||||||||||
Seine River Funding, LLC | 650 | — | ||||||||||||
New River Funding Trust * | 250 | — | ||||||||||||
Hudson River Funding, LLC | 500 | — | ||||||||||||
Columbia River Funding, LLC | 500 | — | ||||||||||||
St. Lawrence River Funding, LLC | 250 | — | ||||||||||||
OneMain Financial Funding VII, LLC | 850 | — | ||||||||||||
OneMain Financial Auto Funding I, LLC | 850 | — | ||||||||||||
Total | $ | 7,200 | $ | — |
Off-Balance Sheet Arrangements |
Critical Accounting Policies and Estimates |
Recent Accounting Pronouncements |
Seasonality |
Item 3. Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. Controls and Procedures. |
Item 1. Legal Proceedings. |
Item 1A. Risk Factors. |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. Defaults Upon Senior Securities. |
Item 4. Mine Safety Disclosures. |
Item 5. Other Information. |
Item 6. Exhibit Index. |
Exhibit Number | Description | |||||||
101 | Interactive data files pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Shareholder’s Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements. | |||||||
104 | Cover Page Interactive Data File in Inline XBRL format (Included in Exhibit 101). |
OMH Signature |
ONEMAIN HOLDINGS, INC. | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | October 29, 2020 | By: | /s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | ||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||
(Duly Authorized Officer and Principal Financial Officer) |
OMFC Signature |
ONEMAIN FINANCE CORPORATION | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | October 29, 2020 | By: | /s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | ||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||
(Duly Authorized Officer and Principal Financial Officer) |
Exhibit 31.1 |
Date: | October 29, 2020 | ||||||||||
/s/ Douglas H. Shulman | |||||||||||
Douglas H. Shulman | |||||||||||
President and Chief Executive Officer |
Exhibit 31.2 |
Date: | October 29, 2020 | ||||||||||
/s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
(Duly Authorized Officer and Principal Financial Officer) |
Exhibit 31.3 |
Date: | October 29, 2020 | ||||||||||
/s/ Richard N. Tambor | |||||||||||
Richard N. Tambor | |||||||||||
President and Chief Executive Officer |
Exhibit 31.4 |
Date: | October 29, 2020 | ||||||||||
/s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
(Duly Authorized Officer and Principal Financial Officer) |
Exhibit 32.1 |
/s/ Douglas H. Shulman | |||||||||||
Douglas H. Shulman | |||||||||||
President and Chief Executive Officer | |||||||||||
/s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
Date: | October 29, 2020 |
Exhibit 32.2 |
/s/ Richard N. Tambor | |||||||||||
Richard N. Tambor | |||||||||||
President and Chief Executive Officer | |||||||||||
/s/ Micah R. Conrad | |||||||||||
Micah R. Conrad | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
Date: | October 29, 2020 |
Condensed Consolidated Statements of Shareholders’ Equity - USD ($) $ in Millions |
Total |
Net impact of adoption of ASU 2016-13 |
Balance post-adoption |
Common Stock |
Common Stock
Balance post-adoption
|
Additional Paid-in Capital |
Additional Paid-in Capital
Balance post-adoption
|
Total Accumulated Other Comprehensive Income (Loss) |
Total Accumulated Other Comprehensive Income (Loss)
Balance post-adoption
|
Retained Earnings |
Retained Earnings
Net impact of adoption of ASU 2016-13
|
[1] |
Retained Earnings
Balance post-adoption
|
OMFC |
OMFC
Balance post-adoption
|
OMFC
Common Stock
|
OMFC
Common Stock
Balance post-adoption
|
OMFC
Additional Paid-in Capital
|
OMFC
Additional Paid-in Capital
Balance post-adoption
|
OMFC
Total Accumulated Other Comprehensive Income (Loss)
|
OMFC
Total Accumulated Other Comprehensive Income (Loss)
Balance post-adoption
|
OMFC
Retained Earnings
|
OMFC
Retained Earnings
Balance post-adoption
|
SMHC
OMFC
|
SMHC
OMFC
Additional Paid-in Capital
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at beginning of period at Dec. 31, 2018 | $ 3,799 | $ 1 | $ 1,681 | $ (34) | $ 2,151 | $ 4,021 | $ 5 | $ 2,110 | $ (34) | $ 1,940 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||
Contribution of SCHC to OMFC from SFI | $ 34 | $ 34 | |||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | 10 | 10 | 10 | 10 | |||||||||||||||||||||||||
Withholding tax on share-based compensation | (5) | (5) | (5) | (5) | |||||||||||||||||||||||||
Other comprehensive income (loss) | 72 | 72 | 72 | 72 | |||||||||||||||||||||||||
Merger of SFI with OMFC | (408) | (408) | |||||||||||||||||||||||||||
Cash contribution from OMH | 144 | 144 | |||||||||||||||||||||||||||
Cash dividends | (376) | [1] | (376) | [1] | (376) | (376) | |||||||||||||||||||||||
Net income | 594 | 594 | 597 | 597 | |||||||||||||||||||||||||
Balance at end of period at Sep. 30, 2019 | $ 4,094 | 1 | 1,686 | 38 | 2,369 | 4,089 | 5 | 1,885 | 38 | 2,161 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||
Dividends declared (in dollars per share) | $ 2.75 | ||||||||||||||||||||||||||||
Balance at beginning of period at Dec. 31, 2018 | $ 3,799 | 1 | 1,681 | (34) | 2,151 | 4,021 | 5 | 2,110 | (34) | 1,940 | |||||||||||||||||||
Balance at end of period at Dec. 31, 2019 | $ 4,330 | $ (828) | $ 3,502 | 1 | $ 1 | 1,689 | $ 1,689 | 44 | $ 44 | 2,596 | $ (828) | $ 1,768 | 4,325 | $ 3,497 | 5 | $ 5 | 1,888 | $ 1,888 | 44 | $ 44 | 2,388 | $ 1,560 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||||||||||||||||||||||||
Balance at beginning of period at Jun. 30, 2019 | $ 4,141 | 1 | 1,683 | 28 | 2,429 | 4,404 | 5 | 2,146 | 28 | 2,225 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | 3 | 3 | 3 | 3 | |||||||||||||||||||||||||
Other comprehensive income (loss) | 10 | 10 | 10 | 10 | |||||||||||||||||||||||||
Merger of SFI with OMFC | (408) | (408) | |||||||||||||||||||||||||||
Cash contribution from OMH | 144 | 144 | |||||||||||||||||||||||||||
Cash dividends | (308) | [1] | (308) | [1] | (308) | (308) | |||||||||||||||||||||||
Net income | 248 | 248 | 244 | 244 | |||||||||||||||||||||||||
Balance at end of period at Sep. 30, 2019 | $ 4,094 | 1 | 1,686 | 38 | 2,369 | 4,089 | 5 | 1,885 | 38 | 2,161 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||
Dividends declared (in dollars per share) | $ 2.25 | ||||||||||||||||||||||||||||
Balance at beginning of period at Dec. 31, 2019 | $ 4,330 | $ (828) | $ 3,502 | 1 | $ 1 | 1,689 | $ 1,689 | 44 | $ 44 | 2,596 | $ (828) | $ 1,768 | 4,325 | $ 3,497 | 5 | $ 5 | 1,888 | $ 1,888 | 44 | $ 44 | 2,388 | $ 1,560 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||
Common stock repurchased and retired | (45) | (45) | |||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | 13 | 13 | 13 | 13 | |||||||||||||||||||||||||
Withholding tax on share-based compensation | (6) | (6) | (6) | (6) | |||||||||||||||||||||||||
Other comprehensive income (loss) | 35 | 35 | 35 | 35 | |||||||||||||||||||||||||
Cash dividends | (747) | [1] | (747) | [1] | (788) | (788) | |||||||||||||||||||||||
Net income | 371 | 371 | 371 | 371 | |||||||||||||||||||||||||
Balance at end of period at Sep. 30, 2020 | $ 3,123 | 1 | 1,651 | 79 | 1,392 | 3,122 | 5 | 1,895 | 79 | 1,143 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||
Dividends declared (in dollars per share) | $ 5.49 | ||||||||||||||||||||||||||||
Balance at beginning of period at Jun. 30, 2020 | $ 3,171 | 1 | 1,648 | 65 | 1,457 | 3,170 | 5 | 1,892 | 65 | 1,208 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | 3 | 3 | 3 | 3 | |||||||||||||||||||||||||
Other comprehensive income (loss) | 14 | 14 | 14 | 14 | |||||||||||||||||||||||||
Cash dividends | (315) | [1] | (315) | [1] | (315) | (315) | |||||||||||||||||||||||
Net income | 250 | 250 | 250 | 250 | |||||||||||||||||||||||||
Balance at end of period at Sep. 30, 2020 | $ 3,123 | $ 1 | $ 1,651 | $ 79 | $ 1,392 | $ 3,122 | $ 5 | $ 1,895 | $ 79 | $ 1,143 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||
Dividends declared (in dollars per share) | $ 2.33 | ||||||||||||||||||||||||||||
|
Business and Basis of Presentation |
9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2020 | |||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Business and Basis of Presentation |
OneMain Holdings, Inc. (“OMH”), and its wholly-owned direct subsidiary, OneMain Finance Corporation (“OMFC”) (formerly known as Springleaf Finance Corporation (“SFC”)) are financial services holding companies whose subsidiaries engage in the consumer finance and insurance businesses. Prior to the completion of the merger described below, OMH’s direct subsidiary was Springleaf Finance, Inc. (“SFI”). Effective July 1, 2020, SFC was renamed to OMFC. The name change did not affect OMFC’s legal entity structure, nor did it have an impact on OMH’s or OMFC’s financial statements. OMFC is used in this report to include references to transactions and arrangements occurring prior to the name change. On September 20, 2019, OMFC entered into a merger agreement with its direct parent, SFI, to merge SFI with and into OMFC, with OMFC as the surviving entity. The merger was effective in OMFC's condensed consolidated financial statements as of July 1, 2019. As a result of the merger with SFI, OMFC became a wholly-owned direct subsidiary of OMH. OMH and OMFC are referred to in this report, collectively with their subsidiaries, whether directly or indirectly owned, as “the Company,” “we,” “us,” or “our.” The information in this Quarterly Report on Form 10-Q is equally applicable to OMH and OMFC, except where otherwise indicated. At September 30, 2020, the Apollo-Värde Group owned approximately 40.9% of OMH’s common stock. 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 OMH, its subsidiaries (all of which are wholly-owned), 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. Actual 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 2020 presentation, we have reclassified certain items in prior periods of our condensed consolidated financial statements. The condensed consolidated financial statements in this report should be read in conjunction with the consolidated financial statements and related notes included in our 2019 Annual Report on Form 10-K. We follow the same significant accounting policies for our interim reporting, except for the new accounting pronouncements subsequently adopted and disclosed in Note 3 below.
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Reconciliation of OneMain Finance Corporation Results to OneMain Holdings, Inc. Results |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of OneMain Finance Corporation Results to OneMain Holdings, Inc. Results |
The results of OMFC are consolidated into the results of OMH. Due to the nominal differences between OMFC and OMH, content throughout this filing relates to both OMH and OMFC. OMFC disclosures relate only to itself and not to any other company. Except where otherwise indicated, and excluding certain insignificant cash and non-cash transactions at the OMH level, these notes relate to the condensed consolidated financial statements for both companies, OMH and OMFC. In addition to certain intercompany payable and receivable amounts between the entities, the following is a reconciliation of the condensed consolidated balance sheets and results of our condensed consolidated statements of operations of OMFC to OMH:
(a) The differences between total shareholders’ equity in the periods ended September 30, 2020 and December 31, 2019 were due to historical differences in results of operations of the companies and differences in equity awards. (b) Other revenues include the interest income on notes receivables from parent, which were notes from SFI held by OMFC and Springleaf Mortgage Holding Company and subsidiaries (“SMHC”), a wholly-owned direct subsidiary of OMFC. See Note 1 and below for further discussion of the merger between SFI and OMFC. The following transactions are related to OMFC and have no impact on OMH's condensed consolidated financial results. Merger of SFI into OMFC On September 20, 2019, OMFC entered into a merger agreement with its direct parent SFI, to merge SFI with and into OMFC, with OMFC as the surviving entity. The merger was effective in OMFC's condensed consolidated financial statements as of July 1, 2019. In conjunction with the merger, the net deficiency of SFI, after elimination of its investment in OMFC, was absorbed by OMFC resulting in an equity reduction of $408 million to OMFC, which included the elimination of the intercompany notes and receivables between OMFC and SFI, as discussed below. The net deficiency of SFI included an intercompany note payable plus accrued interest of $166 million from SFI to OMH, which OMFC assumed through the merger. On September 23, 2019, OMFC repaid SFI’s note to OMH. Concurrently, OMH paid $22 million in other payables due to OMFC and made an equity contribution of $144 million to OMFC. The transactions noted above resulted in a net $264 million reduction to OMFC's equity. OMFC's Notes Receivable from Parent As a result of the merger between SFI and OMFC, described in Note 1 and above, a $232 million note receivable from SFI to OMFC was dissolved effective July 1, 2019. Additionally, OMFC assumed a $28 million note payable from SFI to SMHC, a wholly-owned subsidiary of OMFC, and OMFC subsequently paid off the note on September 23, 2019. For the three months ended September 30, 2019, there was no interest income recognized on these notes. For the nine months ended September 30, 2019, interest income on these notes totaled $8 million, which we report in other revenues. Springleaf Consumer Loan Holding Company (“SCLH”) Contribution On March 10, 2019, all of the outstanding capital stock of SCLH, a subsidiary of SFI, was contributed to OMFC and SCLH became a wholly-owned direct subsidiary of OMFC. The contribution was effective as of January 1, 2019 and increased OMFC’s total shareholder’s equity and total assets by $34 million and $53 million, respectively. The contribution is presented prospectively because it is deemed to be a contribution of net assets.
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Recent Accounting Pronouncements |
9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2020 | |||||||
Accounting Changes and Error Corrections [Abstract] | |||||||
Recent Accounting Pronouncements |
ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Financial Instruments - Credit Losses In June of 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, which significantly changes the way that entities are 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 previously required. The new approach requires entities to measure all expected credit losses for financial assets over their expected lives based on historical experience, current conditions, and reasonable and supportable forecasts of collectability. The expected credit loss model requires earlier recognition of credit losses than the incurred loss approach. We expect ongoing changes in the allowance for finance receivable losses will be driven primarily by the growth of our loan portfolio, mix of secured and unsecured loans, credit quality, and the economic environment at that time. In addition, the ASU developed a new accounting treatment for purchased financial assets with credit deterioration. The ASU also modifies the other-than-temporary impairment model for available-for-sale debt securities by requiring companies to record an allowance for credit impairment rather than write-downs of such assets. Management has reviewed this update and other ASUs that were subsequently issued to further clarify the implementation guidance outlined in . We adopted the amendments of these ASUs as of January 1, 2020. Upon adoption, we recorded an increase to the allowance for finance receivable losses of $1.12 billion, an increase to deferred tax assets of $0.28 billion, and a corresponding one-time cumulative reduction to retained earnings, net of tax, of $0.83 billion in the consolidated balance sheet as of January 1, 2020. The adoption of this ASU, as it relates to available-for-sale debt securities, did not have a material impact on the consolidated financial statements as of January 1, 2020. As a result of the adoption of ASU 2016-13, several of our significant accounting policies have changed to reflect the requirements of the new standard. See below for these updated significant accounting policies as of January 1, 2020. Allowance for Finance Receivable Losses We establish the allowance for finance receivable losses through the provision for finance receivable losses. We evaluate our finance receivable portfolio by level of contractual delinquency in the portfolio, specifically in the late stage delinquency buckets and inclusive of the migration of the loans through the delinquency buckets. Our finance receivables consist of a large number of relatively small, homogeneous accounts. We evaluate our finance receivables for impairment as pools. None of our accounts are large enough to warrant individual evaluation for impairment. We estimate the allowance for finance receivable losses primarily on historical loss experience using a cumulative loss model applied to our finance receivable portfolios. Our gross credit loss expectation is offset by the estimate of future recoveries using historical recovery curves. Our finance receivables are primarily segmented in the loss model by contractual delinquency status. Other attributes in the model include collateral mix and recent credit score. To estimate the gross credit losses, the model utilizes a roll rate matrix to project the first 12 months of losses and historical cohort performance to project the expected losses over the remaining term. Our methodology relies on historical loss experience to forecast the corresponding future outcomes. These patterns are then applied to the current portfolio to obtain an estimate of future losses. We also consider key economic trends including unemployment rates and bankruptcy filings. Forecasted macroeconomic conditions extend to our reasonable and supportable forecast period and revert to a historical average. No new volume is assumed. Renewals are a significant piece of our new volume and are considered a terminal event of the previous loan. We have elected not to measure an allowance on accrued finance charges as it is our policy to reverse finance charge amounts previously accrued after four contractual payments become past due. Management exercises its judgment when determining the amount of allowance for finance receivable losses. Our judgment is based on quantitative analyses, qualitative factors, such as recent portfolio, industry, and other economic trends, and experience in the consumer finance industry. We adjust the amounts determined by our model for management’s estimate of the effects of model imprecision which include but are not limited to, any changes to underwriting criteria and portfolio seasoning. Impairments on Investment Securities: Available-for-sale. We evaluate our available-for-sale securities on an individual basis to identify any instances where the fair value of the investment security is below its amortized cost. For these securities, we then evaluate whether an impairment exists if any of the following conditions are present: •we intend to sell the security; •it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; or •we do not expect to recover the security’s entire amortized cost basis (even if we do not intend to sell the security). If we intend to sell an impaired investment security or we will likely be required to sell the security before recovery of its amortized cost basis less any current period credit loss, we recognize the impairment as a direct write-down in investment revenues equal to the difference between the investment security’s amortized cost and its fair value at the balance sheet date. Once the impairment is recorded, we adjust the investment security to a new amortized cost basis equal to the previous amortized cost basis less the impairment write-down recognized in the current period. In determining whether a credit loss exists, we compare our best estimate of the present value of the cash flows expected to be collected from the security to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, a credit loss exists and an allowance for credit losses is recorded, not to exceed the total unrealized loss on the security. The cash flows expected to be collected are determined by assessing all available information, including issuer default rate, ratings changes and adverse conditions related to the industry sector, financial condition of issuer, credit enhancements, collateral default rates, and other relevant criteria. Management considers factors such as our investment strategy, liquidity requirements, overall business plans, and recovery periods for securities in previous periods of broad market declines. If a credit loss exists with respect to an investment in a security (i.e., we do not expect to recover the entire amortized cost basis of the security), we would be unable to assert that we will recover our amortized cost basis even if we do not intend to sell the security. Therefore, in these situations, a credit impairment is considered to have occurred. If a credit impairment exists, but we do not intend to sell the security and we will likely not be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the impairment is bifurcated as: (i) the estimated amount relating to credit loss; and (ii) the amount relating to non-credit related factors. We recognize the estimated credit loss as an allowance on the balance sheet in investment securities, with a corresponding loss in investment revenues, and the non-credit loss amount in accumulated other comprehensive income or loss. For investment securities in which a credit impairment was recorded through an allowance, we record subsequent increases and decreases in the allowance for credit losses as credit loss expense or reversal of credit loss expense in investment revenues. We will not reverse a previously recorded allowance to an amount below zero. We recognize subsequent increases and decreases in the fair value of our available-for-sale securities from non-credit related factors in accumulated other comprehensive income or loss. Interest receivables on our investment securities are excluded from the amortized cost and fair value and are recorded in “Other assets.” We have elected not to measure an allowance on interest receivables due to our policy to reverse interest receivable at the time collectability is uncertain. The reversal of interest receivable is recorded in investment revenue. See Notes 4, 5, and 7 for additional information on the adoption of ASU 2016-13. ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED Insurance In August of 2018, the FASB issued ASU 2018-12, Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts, which provides targeted improvements to Topic 944 for the assumptions used to measure the liability for future policy benefits for nonparticipating traditional and limited-payment contracts; measurement of market risk benefits; amortization of deferred acquisition costs; and enhanced disclosures. Under current guidance, this ASU will become effective for us beginning January 1, 2022. In July of 2020, the FASB proposed a one-year deferral of this ASU to become effective for public entities for fiscal years beginning January 1, 2023. We have a cross-functional implementation team and a project plan to ensure we comply with all the amendments in this ASU at the time of adoption. We have engaged various vendors to assess a software solution to meet the new accounting and disclosure requirements of the ASU and are currently working toward an agreement with our preferred candidate. We continue to make progress in evaluating the potential impact of the adoption of the ASU on our consolidated financial statements. We do not believe that any other accounting pronouncements issued, but not yet effective, would have a material impact on our consolidated financial statements or disclosures, if adopted.
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Finance Receivables |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance Receivables |
Our finance receivables consist of personal loans, which are non-revolving, with a fixed-rate, fixed terms generally between and six years, and are secured by automobiles, other titled collateral, or are unsecured. Net finance receivables consist of our total portfolio of personal loans. Components of our personal loans were as follows:
* Gross receivables equal the unpaid principal balance (“UPB”) except for the following: •Finance receivables purchased as a performing receivable — gross receivables are equal to UPB and, if applicable, any remaining unearned premium or discount established at the time of purchase to reflect the finance receivable balance at its initial fair value; •Purchased credit impaired finance receivables — gross receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts established prior to the adoption of ASU 2016-13; and •Purchased credit deteriorated finance receivables — gross receivables equal the UPB and any remaining unearned discount established at the time of the adoption of ASU 2016-13 on January 1, 2020. CREDIT QUALITY INDICATOR We consider the delinquency status of our finance receivables as our key credit quality indicator. We monitor the delinquency of our finance receivable portfolio, including the migration between the delinquency buckets and changes in the delinquency trends to manage our exposure to credit risk in the portfolio. When finance receivables are 60 days contractually past due, we consider these accounts to be at an increased risk for loss and we transfer collection of these accounts to our centralized operations. At 90 days or more contractually past due, we consider our finance receivables to be nonperforming. We stop accruing finance charges and reverse finance charges previously accrued on nonperforming loans. We reversed net accrued finance charges of $16 million and $66 million during the three and nine months ended September 30, 2020, respectively. Finance charges recognized from the contractual interest portion of payments received on nonaccrual finance receivables totaled $3 million and $12 million during the three and nine months ended September 30, 2020, respectively. All loans in nonaccrual status are considered in our estimate of allowance for finance receivable losses. The following is a summary of our personal loans held for investment by the year of origination and number of days delinquent, our key credit quality indicator, at September 30, 2020:
The following is a summary of our personal loans held for investment by number of days delinquent at December 31, 2019, which is prior to the adoption of ASU 2016-13 on January 1, 2020 and continues to be reported under ASC 310, Receivables:
PURCHASED CREDIT IMPAIRED FINANCE RECEIVABLES ASU 2016-13 superseded the accounting for purchased credit impaired finance receivables with purchase credit deteriorated finance receivables. As a result, we converted all purchased credit impaired finance receivables to purchased credit deteriorated finance receivables in accordance with ASC Topic 326, which resulted in the gross-up of net finance receivables and allowance for finance receivable losses of $15 million on January 1, 2020. Due to the adoption of ASU 2016-13, the following disclosures related to purchase credit impaired finance receivables are no longer applicable for reporting periods beginning in 2020. We previously reported the carrying amount of our purchased credit impaired personal loans in net finance receivables, less allowance for finance receivable losses, and our purchased credit impaired real estate loans in finance receivables held for sale as discussed below. At December 31, 2019, finance receivables held for sale, reported in “Other assets,” totaled $64 million, which include purchased credit impaired real estate loans, as well as TDR real estate loans. See Note 6 for further information on our finance receivables held for sale. Information regarding purchased credit impaired finance receivables were as follows:
(a) Outstanding balance is defined as the UPB of the loans with a net carrying amount. (b) The allowance for purchased credit impaired finance receivable losses reflects the carrying value of the purchased credit impaired loans held for investment exceeding the present value of the expected cash flows. As indicated above, no allowance was required as of December 31, 2019. Changes in accretable yield for purchased credit impaired finance receivables were as follows:
* Reclassifications from nonaccretable difference represents the increases in accretable yield resulting from higher estimated undiscounted cash flows. TDR FINANCE RECEIVABLES Information regarding TDR finance receivables were as follows:
(a) TDR gross receivables — gross receivables are equal to UPB and, if applicable, any remaining unearned premium or discount established at the time of purchase if previously purchased as a performing receivable. (b) TDR net receivables — TDR gross receivables net of unearned points and fees, accrued finance charges, and deferred origination costs. TDR average net receivables and finance charges recognized on TDR finance receivables for our personal loans that are held for investment and our real estate loans that are held for sale were as follows:
Information regarding the new volume of the TDR finance receivables held for investment were as follows:
* “Other” modifications primarily include potential principal and interest forgiveness contingent on future payment performance by the borrower under the modified terms. New volume of TDR finance receivables held for sale are not included in the table above as they were immaterial for the three and nine months ended September 30, 2020 and 2019. Personal loans held for investment 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) are reflected in the following table.
* Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. Real estate loans 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 immaterial for the three and nine months ended September 30, 2020 and 2019.
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Allowance for Finance Receivable Losses |
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Allowance for Finance Receivable Losses |
We establish an allowance for finance receivable losses through the provision for finance receivable losses. We evaluate our finance receivable portfolio by the level of contractual delinquency in the portfolio, specifically in the late stage delinquency buckets and inclusive of the migration of the loans through the delinquency buckets. We estimate and record an allowance for finance receivable losses to cover the estimated lifetime expected credit losses on our finance receivables, pursuant to the adoption of ASU 2016-13 on January 1, 2020. Prior to the adoption of ASU 2016-13, we estimated and recorded an allowance for finance receivable losses to cover estimated incurred losses on our finance receivables. Our allowance for finance receivable losses may fluctuate based upon changes in portfolio growth, credit quality, and economic conditions. See Note 3 for additional information regarding our policy for allowance for finance receivable losses. Our current methodology to estimate expected credit losses used the most recent macroeconomic forecasts, which incorporated the projected impacts of the global outbreak of a novel strain of coronavirus (“COVID-19”) on the U.S. economy. Our forecast leveraged economic projections from an industry leading forecast provider. We also incorporated estimated impacts from known government stimulus measures, the involuntary unemployment insurance coverage of our portfolio, and our borrower assistance efforts. At September 30, 2020, our economic forecast used a reasonable and supportable period of 12 months. The increase in our allowance for finance receivable losses for the nine months ended September 30, 2020 was largely due to these economic considerations relating to COVID-19 along with the adoption of ASU 2016-13. Changes in the allowance for finance receivable losses were as follows:
* As a result of the adoption of ASU 2016-13 on January 1, 2020, we recorded a one-time adjustment to the allowance for finance receivable losses. See Notes 3 and 4 for additional information on the adoption of ASU 2016-13. The allowance for finance receivable losses and net finance receivables by impairment method were as follows:
* As a result of the adoption of ASU 2016-13 on January 1, 2020, the accounting for purchased credit impaired finance receivables was superseded with purchase credit deteriorated finance receivables which are collectively evaluated for impairment. See Notes 3 and 4 for additional information on the adoption of ASU 2016-3.
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Finance Receivables Held for Sale |
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Receivables [Abstract] | |||||||
Finance Receivables Held for Sale |
We reported finance receivables held for sale, included within “Other assets,” of $54 million at September 30, 2020 and $64 million at December 31, 2019, which consist entirely of real estate loans, and are carried at the lower of cost or fair value, applied on an aggregate basis. In February 2019, we sold a portfolio of real estate loans with a carrying value of $16 million for aggregate cash proceeds of $19 million and recorded a net gain in other revenues of $3 million (“February 2019 Real Estate Loan Sale”). After the recognition of the February 2019 Real Estate Loan Sale, the carrying value of the remaining loans classified in finance receivables held for sale exceeded their fair value, and accordingly, we marked the remaining loans to fair value and recorded an impairment in other revenue of $3 million. We did not have any material impairments or transfers to or from finance receivables held for sale during the three and nine months ended September 30, 2020 and 2019.
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Investment Securities |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities |
AVAILABLE-FOR-SALE SECURITIES Cost/amortized cost, allowance for credit losses, unrealized gains and losses, and fair value of fixed maturity available-for-sale securities by type were as follows:
* There was no allowance for credit losses related to our investment securities as of September 30, 2020.
* The balances reported as of December 31, 2019 are not subject to the adoption of ASU 2016-13 on January 1, 2020 and continue to be reported under ASC 320, Investments – Debt and Equity Securities. As of September 30, 2020, interest receivables reported in “Other assets” totaled $13 million. Amounts reversed from investment revenue for available-for-sale securities were immaterial. Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position without an allowance for credit losses were as follows:
* The balances reported as of December 31, 2019 are not subject to the adoption of ASU 2016-13 on January 1, 2020 and continue to be reported under ASC 320, Investments – Debt and Equity Securities. On a lot basis, we had 233 and 398 investment securities in an unrealized loss position at September 30, 2020 and December 31, 2019, respectively. We do not consider the unrealized losses to be credit-related, as these unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase. Additionally, at September 30, 2020, there were no credit impairments on investment securities that we intend to sell. We do not have plans to sell any of the remaining investment securities with unrealized losses as of September 30, 2020, 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 credit impairments. During the three and nine months ended September 30, 2020, there were no material credit impairments related to our investment securities. Therefore, there were no material additions or reductions in the allowance for credit losses (impairments recognized or reversed in earnings) on credit impaired available-for-sale securities for the three and nine months ended September 30, 2020. Prior to the adoption of ASU 2016-13, other-than-temporary impairment losses, primarily on corporate debt, in investment revenues were immaterial during the three and nine months ended September 30, 2019. There were no material additions or reductions in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities during the three and nine months ended September 30, 2019. The proceeds of available-for-sale securities sold or redeemed during the three and nine months ended September 30, 2020 totaled $74 million and $179 million, respectively. The proceeds of available-for-sale securities sold or redeemed during the three and nine months ended September 30, 2019 totaled $36 million and $245 million, respectively. The net realized gains and losses were immaterial during the three and nine months ended September 30, 2020 and 2019. Contractual maturities of fixed-maturity available-for-sale securities at September 30, 2020 were as follows:
Actual maturities may differ from contractual maturities since issuers and borrowers may have the right to call or prepay obligations. We may sell investment securities before maturity for general corporate and working capital purposes and to achieve certain investment strategies. The fair value of securities on deposit with third parties totaled $604 million and $633 million at September 30, 2020 and December 31, 2019, respectively. OTHER SECURITIES The fair value of other securities by type was as follows:
* We employ an income equity strategy targeting investments in stocks with strong current dividend yields. Stocks included have a history of stable or increasing dividend payments. Net unrealized gains and losses on other securities held were immaterial for the three and nine months ended September 30, 2020 and 2019. Net realized gains and losses on other securities sold or redeemed were also immaterial for the three and nine months ended September 30, 2020 and 2019. Other securities include equity securities and those securities for which the fair value option was elected. We report net unrealized and realized gains and losses on other securities held, sold, or redeemed in investment revenue.
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Long-term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt |
Principal maturities of long-term debt (excluding projected repayments on securitizations by period) by type of debt at September 30, 2020 were as follows:
(a) Pursuant to the Base Indenture, the Supplemental Indentures and the Guaranty Agreements, OMH agreed to fully and unconditionally guarantee, on a senior unsecured basis, payments of principal, premium and interest on the Unsecured Notes and Junior Subordinated Debenture. The OMH guarantees of OMFC’s long-term debt are subject to customary release provisions. (b) The interest rates shown are the range of contractual rates in effect at September 30, 2020. (c) Securitizations are not included in the above maturities by period due to their variable monthly repayments, which may result in pay-off prior to the stated maturity date. At September 30, 2020, there were no amounts drawn under our revolving conduit facilities. See Note 9 for further information on our long-term debt associated with securitizations and revolving conduit facilities. (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 $31 million at September 30, 2020 and are reported in “Other assets.” 8.875% SENIOR NOTES DUE 2025 OFFERING On May 14, 2020, OMFC issued a total of $600 million aggregate principal amount of 8.875% Senior Notes due 2025 (the “8.875% Senior Notes due 2025”) under the Base Indenture, as supplemented by the Tenth Supplemental Indenture, pursuant to which OMH provided a guarantee on an unsecured basis. REDEMPTION OF 8.25% SENIOR NOTES DUE 2020 On June 29, 2020, OMFC issued a notice of full redemption of its 8.25% Senior Notes due 2020. On July 29, 2020, OMFC paid an aggregate amount of $1.0 billion, inclusive of accrued interest and premiums, to complete the redemption. In connection with the redemption, we recognized $35 million of net loss on repurchases and repayments of debt for the three and nine months ended September 30, 2020.
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Variable Interest Entities |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities |
CONSOLIDATED VIES We have transferred finance receivables to VIEs for asset-backed financing transactions and include the assets and liabilities in our consolidated financial statements because we are the primary beneficiary of each VIE. We account for these asset-backed debt obligations as secured borrowings. See Note 3 and Note 11 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our 2019 Annual Report on Form 10-K for more detail regarding VIEs. We parenthetically disclose on our consolidated balance sheets the VIE’s assets that can only be used to settle the VIE’s obligations and liabilities if its creditors have no recourse against the primary beneficiary’s general credit. The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts and revolving conduit facilities were as follows:
Other than the retained subordinate and residual interests in our consolidated VIEs, we are under no further obligation than is otherwise noted herein, either contractually or implicitly, to provide financial support to these entities. Consolidated interest expense related to our VIEs totaled $84 million and $256 million during the three and nine months ended September 30, 2020, respectively, compared to $79 million and $243 million during the three and nine months ended September 30, 2019, respectively. SECURITIZED BORROWINGS Each of our outstanding securitizations contain a revolving period ranging from to seven years during which no principal payments are required to be made on the related asset-backed notes. The indentures governing our securitization borrowings contain early amortization events and events of default, that, if triggered, may result in the acceleration of the obligation to pay principal and interest on the related asset-backed notes. REVOLVING CONDUIT FACILITIES We had access to 14 revolving conduit facilities with a total maximum borrowing capacity of $7.2 billion as of September 30, 2020. Our conduit facilities contain revolving periods during which time no principal payments are required, but may be made without penalty, followed by a subsequent amortization period. Principal balances of outstanding loans, if any, are due and payable in full over periods ranging up to ten years as of September 30, 2020. Amounts drawn on these facilities are collateralized by our personal loans. At September 30, 2020, no amounts were drawn under these facilities.
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Insurance |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance |
Changes in the reserve for unpaid claims and loss adjustment expenses (net of reinsurance recoverables):
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Capital Stock and Earnings Per Share (OMH Only) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock and Earnings Per Share (OMH Only) |
CAPITAL STOCK OMH has two classes of authorized capital stock: preferred stock and common stock. OMFC has two classes of authorized capital stock: special stock and common stock. OMH and OMFC may issue preferred stock and special stock, respectively, in one or more series. The OMH Board of Directors and the OMFC Board of Directors determine the dividend, liquidation, redemption, conversion, voting, and other rights prior to issuance. During the first quarter of 2020, the OMH Board of Directors approved a stock repurchase program, which allowed us to repurchase up to $200 million of OMH’s outstanding common stock with no stated expiration. On March 20, 2020, OMH temporarily suspended its stock repurchase program. OMH retains the right to reinstate the stock repurchase program as circumstances change. Prior to the suspension of the program, OMH repurchased and retired 2,031,698 shares of its common stock with an average price paid per share of $22.30, for an aggregate total of approximately $45 million, including commissions and fees. The aggregate purchase price in excess of the par value of the repurchased OMH common stock is recorded as a reduction to additional paid-in-capital. To provide funding for the OMH stock repurchase and retirement program, the OMFC Board of Directors authorized multiple dividend payments in the aggregate amount of $45 million. Changes in OMH shares of common stock issued and outstanding were as follows:
EARNINGS PER SHARE (OMH ONLY) The computation of earnings per share was as follows:
* We have excluded weighted-average unvested restricted stock units totaling 256,034 and 184,997 for the three months ended September 30, 2020 and 2019, respectively, and 303,913 and 297,194 for the nine months ended September 30, 2020 and 2019, respectively, from the fully-diluted earnings per share calculations as these shares would be anti-dilutive, which could impact the earnings per share calculation in the future. Basic earnings per share is computed by dividing net income by the weighted-average number of shares outstanding during each period. Diluted earnings per share is computed based on the weighted-average number of shares outstanding plus the effect of potentially dilutive shares outstanding during the period using the treasury stock method. The potentially dilutive shares represent outstanding unvested RSUs and RSAs.
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) |
Changes, net of tax, in accumulated other comprehensive income (loss) were as follows:
* There were no amounts related to available-for-sale debt securities for which an allowance for credit losses was recorded during the three and nine months ended September 30, 2020.
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Income Taxes |
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Sep. 30, 2020 | |||||||
Income Tax Disclosure [Abstract] | |||||||
Income Taxes |
We had a net deferred tax asset of $440 million and $104 million at September 30, 2020 and December 31, 2019, respectively. The increase in our net deferred tax asset of $336 million was primarily due to the tax effect of the increase in the allowance for finance receivable losses from both the adoption of ASU 2016-13 and the current period activity. See Note 5 for further information on the increase in allowance. The increase was partly offset by tax amortization of goodwill. We follow the guidance of ASC 740, Income Taxes, for interim reporting of income taxes under which we calculate an estimated annual effective tax rate (“AETR”) and apply the AETR to our year-to-date income (loss) before income taxes. In addition, we recognize any discrete items as they occur. Our estimates may need to be further adjusted throughout the year as the effects of the COVID-19 pandemic plays out in the economic and financial markets, and as a result, our AETR may significantly change in the remaining period of 2020. The effective tax rate for the nine months ended September 30, 2020 was 26.1%, compared to 21.3% for the same period in 2019. The effective tax rate for the nine months ended September 30, 2020 differed from the federal statutory rate of 21% primarily due to the effect of state income taxes and discrete tax expense. The effective tax rate for the nine months ended September 30, 2019 differed from the federal statutory rate of 21% primarily due to the effect of state income taxes, which was offset by the release of the valuation allowance against certain deferred taxes. We are currently under examination of our U.S. federal tax returns for the years 2014 to 2016 by the IRS. We are also under examination by various states for the years 2011 to 2018. Management believes it has adequately provided for taxes for such years. Our gross unrecognized tax benefits, including related interest and penalties, totaled $13 million at September 30, 2020 and $12 million at December 31, 2019. We accrue interest related to uncertain tax positions in income tax expense. The amount of any change in the balance of uncertain tax liabilities over the next 12 months is not expected to be material to our consolidated financial statements. On March 27, 2020, the Coronarvirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, and technical corrections to tax depreciation methods for qualified improvement property. We do not anticipate the CARES Act will have a material impact on our consolidated financial statements. We will continue to monitor legislative developments related to the COVID-19 pandemic.
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Contingencies |
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Sep. 30, 2020 | |||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||
Contingencies |
LEGAL CONTINGENCIES In the normal course of business, we have been named, from time to time, as defendants in various legal actions, including arbitrations, class actions, and other litigation arising in connection with our activities. Some of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. While we will continue to evaluate legal actions to determine whether a loss is reasonably possible or probable and is reasonably estimable, there can be no assurance that material losses will not be incurred from pending, threatened or future litigation, investigations, examinations, or other claims. We contest liability and/or the amount of damages, as appropriate, in each pending matter. Where available information indicates that it is probable that a liability had been incurred at the date of the 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 range of 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 consolidated financial statements as a whole.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
At September 30, 2020, Consumer and Insurance (“C&I”) is our only reportable segment. The remaining components (which we refer to as “Other”) consist of (i) our liquidating SpringCastle Portfolio servicing activity and (ii) our non-originating legacy operations, which primarily include our liquidating real estate loans. The accounting policies of the C&I segment are the same as those disclosed in Note 3 and Note 19 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our 2019 Annual Report on Form 10-K. The following tables present information about C&I and Other, as well as reconciliations to the consolidated financial statement amounts.
* Other revenues in Other include the gain on the February 2019 Real Estate Loan Sale as well as the impairment adjustments on the remaining loans in held for sale in 2019.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
The accounting policies of our Fair Value Measurements are the same as those disclosed in Note 3 and Note 20 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our 2019 Annual Report on Form 10-K. The following table presents the carrying amounts and estimated fair values of our financial instruments and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:
*Other assets at September 30, 2020 and December 31, 2019 includes finance receivables held for sale and miscellaneous receivables related to our liquidating loan portfolios. 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:
Due to the insignificant activity within the Level 3 assets during the three and nine months ended September 30, 2020 and 2019, we have omitted the additional disclosures relating to the changes in Level 3 assets measured at fair value on a recurring basis and the quantitative information about Level 3 unobservable inputs. FAIR VALUE MEASUREMENTS — NON-RECURRING BASIS We measure the fair value of certain assets on a non-recurring basis when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Net impairment charges recorded on assets measured at fair value on a non-recurring basis were immaterial for the three and nine months ended September 30, 2020 and 2019. FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS See Note 20 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our 2019 Annual Report on Form 10-K for information regarding our methods and assumptions used to estimate fair value.
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Recent Accounting Pronouncements (Policies) |
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Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATIONWe 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. |
CONSOLIDATION | The statements include the accounts of OMH, its subsidiaries (all of which are wholly-owned), 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. |
ESTIMATES | 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. Actual results could differ from our estimates. |
RECLASSIFICATIONS | To conform to the 2020 presentation, we have reclassified certain items in prior periods of our condensed consolidated financial statements. |
ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED AND ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED | ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Financial Instruments - Credit Losses In June of 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, which significantly changes the way that entities are 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 previously required. The new approach requires entities to measure all expected credit losses for financial assets over their expected lives based on historical experience, current conditions, and reasonable and supportable forecasts of collectability. The expected credit loss model requires earlier recognition of credit losses than the incurred loss approach. We expect ongoing changes in the allowance for finance receivable losses will be driven primarily by the growth of our loan portfolio, mix of secured and unsecured loans, credit quality, and the economic environment at that time. In addition, the ASU developed a new accounting treatment for purchased financial assets with credit deterioration. The ASU also modifies the other-than-temporary impairment model for available-for-sale debt securities by requiring companies to record an allowance for credit impairment rather than write-downs of such assets. Management has reviewed this update and other ASUs that were subsequently issued to further clarify the implementation guidance outlined in . We adopted the amendments of these ASUs as of January 1, 2020. Upon adoption, we recorded an increase to the allowance for finance receivable losses of $1.12 billion, an increase to deferred tax assets of $0.28 billion, and a corresponding one-time cumulative reduction to retained earnings, net of tax, of $0.83 billion in the consolidated balance sheet as of January 1, 2020. The adoption of this ASU, as it relates to available-for-sale debt securities, did not have a material impact on the consolidated financial statements as of January 1, 2020. As a result of the adoption of ASU 2016-13, several of our significant accounting policies have changed to reflect the requirements of the new standard. See below for these updated significant accounting policies as of January 1, 2020. Allowance for Finance Receivable Losses We establish the allowance for finance receivable losses through the provision for finance receivable losses. We evaluate our finance receivable portfolio by level of contractual delinquency in the portfolio, specifically in the late stage delinquency buckets and inclusive of the migration of the loans through the delinquency buckets. Our finance receivables consist of a large number of relatively small, homogeneous accounts. We evaluate our finance receivables for impairment as pools. None of our accounts are large enough to warrant individual evaluation for impairment. We estimate the allowance for finance receivable losses primarily on historical loss experience using a cumulative loss model applied to our finance receivable portfolios. Our gross credit loss expectation is offset by the estimate of future recoveries using historical recovery curves. Our finance receivables are primarily segmented in the loss model by contractual delinquency status. Other attributes in the model include collateral mix and recent credit score. To estimate the gross credit losses, the model utilizes a roll rate matrix to project the first 12 months of losses and historical cohort performance to project the expected losses over the remaining term. Our methodology relies on historical loss experience to forecast the corresponding future outcomes. These patterns are then applied to the current portfolio to obtain an estimate of future losses. We also consider key economic trends including unemployment rates and bankruptcy filings. Forecasted macroeconomic conditions extend to our reasonable and supportable forecast period and revert to a historical average. No new volume is assumed. Renewals are a significant piece of our new volume and are considered a terminal event of the previous loan. We have elected not to measure an allowance on accrued finance charges as it is our policy to reverse finance charge amounts previously accrued after four contractual payments become past due. Management exercises its judgment when determining the amount of allowance for finance receivable losses. Our judgment is based on quantitative analyses, qualitative factors, such as recent portfolio, industry, and other economic trends, and experience in the consumer finance industry. We adjust the amounts determined by our model for management’s estimate of the effects of model imprecision which include but are not limited to, any changes to underwriting criteria and portfolio seasoning. Impairments on Investment Securities: Available-for-sale. We evaluate our available-for-sale securities on an individual basis to identify any instances where the fair value of the investment security is below its amortized cost. For these securities, we then evaluate whether an impairment exists if any of the following conditions are present: •we intend to sell the security; •it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; or •we do not expect to recover the security’s entire amortized cost basis (even if we do not intend to sell the security). If we intend to sell an impaired investment security or we will likely be required to sell the security before recovery of its amortized cost basis less any current period credit loss, we recognize the impairment as a direct write-down in investment revenues equal to the difference between the investment security’s amortized cost and its fair value at the balance sheet date. Once the impairment is recorded, we adjust the investment security to a new amortized cost basis equal to the previous amortized cost basis less the impairment write-down recognized in the current period. In determining whether a credit loss exists, we compare our best estimate of the present value of the cash flows expected to be collected from the security to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, a credit loss exists and an allowance for credit losses is recorded, not to exceed the total unrealized loss on the security. The cash flows expected to be collected are determined by assessing all available information, including issuer default rate, ratings changes and adverse conditions related to the industry sector, financial condition of issuer, credit enhancements, collateral default rates, and other relevant criteria. Management considers factors such as our investment strategy, liquidity requirements, overall business plans, and recovery periods for securities in previous periods of broad market declines. If a credit loss exists with respect to an investment in a security (i.e., we do not expect to recover the entire amortized cost basis of the security), we would be unable to assert that we will recover our amortized cost basis even if we do not intend to sell the security. Therefore, in these situations, a credit impairment is considered to have occurred. If a credit impairment exists, but we do not intend to sell the security and we will likely not be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the impairment is bifurcated as: (i) the estimated amount relating to credit loss; and (ii) the amount relating to non-credit related factors. We recognize the estimated credit loss as an allowance on the balance sheet in investment securities, with a corresponding loss in investment revenues, and the non-credit loss amount in accumulated other comprehensive income or loss. For investment securities in which a credit impairment was recorded through an allowance, we record subsequent increases and decreases in the allowance for credit losses as credit loss expense or reversal of credit loss expense in investment revenues. We will not reverse a previously recorded allowance to an amount below zero. We recognize subsequent increases and decreases in the fair value of our available-for-sale securities from non-credit related factors in accumulated other comprehensive income or loss. Interest receivables on our investment securities are excluded from the amortized cost and fair value and are recorded in “Other assets.” We have elected not to measure an allowance on interest receivables due to our policy to reverse interest receivable at the time collectability is uncertain. The reversal of interest receivable is recorded in investment revenue. See Notes 4, 5, and 7 for additional information on the adoption of ASU 2016-13. ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED Insurance In August of 2018, the FASB issued ASU 2018-12, Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts, which provides targeted improvements to Topic 944 for the assumptions used to measure the liability for future policy benefits for nonparticipating traditional and limited-payment contracts; measurement of market risk benefits; amortization of deferred acquisition costs; and enhanced disclosures. Under current guidance, this ASU will become effective for us beginning January 1, 2022. In July of 2020, the FASB proposed a one-year deferral of this ASU to become effective for public entities for fiscal years beginning January 1, 2023. We have a cross-functional implementation team and a project plan to ensure we comply with all the amendments in this ASU at the time of adoption. We have engaged various vendors to assess a software solution to meet the new accounting and disclosure requirements of the ASU and are currently working toward an agreement with our preferred candidate. We continue to make progress in evaluating the potential impact of the adoption of the ASU on our consolidated financial statements. We do not believe that any other accounting pronouncements issued, but not yet effective, would have a material impact on our consolidated financial statements or disclosures, if adopted.
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Allowance for Finance Receivable Losses | Allowance for Finance Receivable Losses We establish the allowance for finance receivable losses through the provision for finance receivable losses. We evaluate our finance receivable portfolio by level of contractual delinquency in the portfolio, specifically in the late stage delinquency buckets and inclusive of the migration of the loans through the delinquency buckets. Our finance receivables consist of a large number of relatively small, homogeneous accounts. We evaluate our finance receivables for impairment as pools. None of our accounts are large enough to warrant individual evaluation for impairment. We estimate the allowance for finance receivable losses primarily on historical loss experience using a cumulative loss model applied to our finance receivable portfolios. Our gross credit loss expectation is offset by the estimate of future recoveries using historical recovery curves. Our finance receivables are primarily segmented in the loss model by contractual delinquency status. Other attributes in the model include collateral mix and recent credit score. To estimate the gross credit losses, the model utilizes a roll rate matrix to project the first 12 months of losses and historical cohort performance to project the expected losses over the remaining term. Our methodology relies on historical loss experience to forecast the corresponding future outcomes. These patterns are then applied to the current portfolio to obtain an estimate of future losses. We also consider key economic trends including unemployment rates and bankruptcy filings. Forecasted macroeconomic conditions extend to our reasonable and supportable forecast period and revert to a historical average. No new volume is assumed. Renewals are a significant piece of our new volume and are considered a terminal event of the previous loan. We have elected not to measure an allowance on accrued finance charges as it is our policy to reverse finance charge amounts previously accrued after four contractual payments become past due. Management exercises its judgment when determining the amount of allowance for finance receivable losses. Our judgment is based on quantitative analyses, qualitative factors, such as recent portfolio, industry, and other economic trends, and experience in the consumer finance industry. We adjust the amounts determined by our model for management’s estimate of the effects of model imprecision which include but are not limited to, any changes to underwriting criteria and portfolio seasoning.
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Impairments on Investment Securities | Impairments on Investment Securities: Available-for-sale. We evaluate our available-for-sale securities on an individual basis to identify any instances where the fair value of the investment security is below its amortized cost. For these securities, we then evaluate whether an impairment exists if any of the following conditions are present: •we intend to sell the security; •it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; or •we do not expect to recover the security’s entire amortized cost basis (even if we do not intend to sell the security). If we intend to sell an impaired investment security or we will likely be required to sell the security before recovery of its amortized cost basis less any current period credit loss, we recognize the impairment as a direct write-down in investment revenues equal to the difference between the investment security’s amortized cost and its fair value at the balance sheet date. Once the impairment is recorded, we adjust the investment security to a new amortized cost basis equal to the previous amortized cost basis less the impairment write-down recognized in the current period. In determining whether a credit loss exists, we compare our best estimate of the present value of the cash flows expected to be collected from the security to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, a credit loss exists and an allowance for credit losses is recorded, not to exceed the total unrealized loss on the security. The cash flows expected to be collected are determined by assessing all available information, including issuer default rate, ratings changes and adverse conditions related to the industry sector, financial condition of issuer, credit enhancements, collateral default rates, and other relevant criteria. Management considers factors such as our investment strategy, liquidity requirements, overall business plans, and recovery periods for securities in previous periods of broad market declines. If a credit loss exists with respect to an investment in a security (i.e., we do not expect to recover the entire amortized cost basis of the security), we would be unable to assert that we will recover our amortized cost basis even if we do not intend to sell the security. Therefore, in these situations, a credit impairment is considered to have occurred. If a credit impairment exists, but we do not intend to sell the security and we will likely not be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the impairment is bifurcated as: (i) the estimated amount relating to credit loss; and (ii) the amount relating to non-credit related factors. We recognize the estimated credit loss as an allowance on the balance sheet in investment securities, with a corresponding loss in investment revenues, and the non-credit loss amount in accumulated other comprehensive income or loss. For investment securities in which a credit impairment was recorded through an allowance, we record subsequent increases and decreases in the allowance for credit losses as credit loss expense or reversal of credit loss expense in investment revenues. We will not reverse a previously recorded allowance to an amount below zero. We recognize subsequent increases and decreases in the fair value of our available-for-sale securities from non-credit related factors in accumulated other comprehensive income or loss. Interest receivables on our investment securities are excluded from the amortized cost and fair value and are recorded in “Other assets.” We have elected not to measure an allowance on interest receivables due to our policy to reverse interest receivable at the time collectability is uncertain. The reversal of interest receivable is recorded in investment revenue.
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Reconciliation of OneMain Finance Corporation Results to OneMain Holdings, Inc. Results (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of consolidated balance sheets and results of consolidated statements of operations of SFC to OMH | In addition to certain intercompany payable and receivable amounts between the entities, the following is a reconciliation of the condensed consolidated balance sheets and results of our condensed consolidated statements of operations of OMFC to OMH:
(a) The differences between total shareholders’ equity in the periods ended September 30, 2020 and December 31, 2019 were due to historical differences in results of operations of the companies and differences in equity awards. (b) Other revenues include the interest income on notes receivables from parent, which were notes from SFI held by OMFC and Springleaf Mortgage Holding Company and subsidiaries (“SMHC”), a wholly-owned direct subsidiary of OMFC. See Note 1 and below for further discussion of the merger between SFI and OMFC.
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Finance Receivables (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net finance receivables by type | Components of our personal loans were as follows:
* Gross receivables equal the unpaid principal balance (“UPB”) except for the following: •Finance receivables purchased as a performing receivable — gross receivables are equal to UPB and, if applicable, any remaining unearned premium or discount established at the time of purchase to reflect the finance receivable balance at its initial fair value; •Purchased credit impaired finance receivables — gross receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts established prior to the adoption of ASU 2016-13; and •Purchased credit deteriorated finance receivables — gross receivables equal the UPB and any remaining unearned discount established at the time of the adoption of ASU 2016-13 on January 1, 2020.
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Summary of net finance receivables by type and by days delinquent | The following is a summary of our personal loans held for investment by the year of origination and number of days delinquent, our key credit quality indicator, at September 30, 2020:
The following is a summary of our personal loans held for investment by number of days delinquent at December 31, 2019, which is prior to the adoption of ASU 2016-13 on January 1, 2020 and continues to be reported under ASC 310, Receivables:
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Schedule of purchased credit impaired finance receivables held for investment | Information regarding purchased credit impaired finance receivables were as follows:
(a) Outstanding balance is defined as the UPB of the loans with a net carrying amount. (b) The allowance for purchased credit impaired finance receivable losses reflects the carrying value of the purchased credit impaired loans held for investment exceeding the present value of the expected cash flows. As indicated above, no allowance was required as of December 31, 2019.
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Changes in accretable yield for purchased credit impaired finance receivables held for investment and held for sale | Changes in accretable yield for purchased credit impaired finance receivables were as follows:
* Reclassifications from nonaccretable difference represents the increases in accretable yield resulting from higher estimated undiscounted cash flows.
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Schedule of information regarding TDR finance receivables | Information regarding TDR finance receivables were as follows:
(a) TDR gross receivables — gross receivables are equal to UPB and, if applicable, any remaining unearned premium or discount established at the time of purchase if previously purchased as a performing receivable. (b) TDR net receivables — TDR gross receivables net of unearned points and fees, accrued finance charges, and deferred origination costs.
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TDR average net receivables held for investment and held for sale and finance charges recognized on TDR finance receivables held for investment and held for sale | TDR average net receivables and finance charges recognized on TDR finance receivables for our personal loans that are held for investment and our real estate loans that are held for sale were as follows:
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Schedule of new volume of the TDR finance receivables held for investment and held for sale | Information regarding the new volume of the TDR finance receivables held for investment were as follows:
* “Other” modifications primarily include potential principal and interest forgiveness contingent on future payment performance by the borrower under the modified terms.
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Net finance receivables that were modified as TDR finance receivables defaulted within the previous 12 months nonperforming | Personal loans held for investment that were modified as TDR 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) are reflected in the following table.
* Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted.
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Allowance for Finance Receivable Losses (Tables) |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the allowance for finance receivable losses by finance receivable type | Changes in the allowance for finance receivable losses 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 impairment method were as follows:
* As a result of the adoption of ASU 2016-13 on January 1, 2020, the accounting for purchased credit impaired finance receivables was superseded with purchase credit deteriorated finance receivables which are collectively evaluated for impairment. See Notes 3 and 4 for additional information on the adoption of ASU 2016-3.
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Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | Cost/amortized cost, allowance for credit losses, unrealized gains and losses, and fair value of fixed maturity available-for-sale securities by type were as follows:
* There was no allowance for credit losses related to our investment securities as of September 30, 2020.
* The balances reported as of December 31, 2019 are not subject to the adoption of ASU 2016-13 on January 1, 2020 and continue to be reported under ASC 320, Investments – Debt and Equity Securities.
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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 without an allowance for credit losses were as follows:
* The balances reported as of December 31, 2019 are not subject to the adoption of ASU 2016-13 on January 1, 2020 and continue to be reported under ASC 320, Investments – Debt and Equity Securities.
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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 September 30, 2020 were as follows:
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Schedule of fair value of other securities by type | The fair value of other securities by type was as follows:
* We employ an income equity strategy targeting investments in stocks with strong current dividend yields. Stocks included have a history of stable or increasing dividend payments.
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Long-term Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of principal maturities of long-term debt | Principal maturities of long-term debt (excluding projected repayments on securitizations by period) by type of debt at September 30, 2020 were as follows:
(a) Pursuant to the Base Indenture, the Supplemental Indentures and the Guaranty Agreements, OMH agreed to fully and unconditionally guarantee, on a senior unsecured basis, payments of principal, premium and interest on the Unsecured Notes and Junior Subordinated Debenture. The OMH guarantees of OMFC’s long-term debt are subject to customary release provisions. (b) The interest rates shown are the range of contractual rates in effect at September 30, 2020. (c) Securitizations are not included in the above maturities by period due to their variable monthly repayments, which may result in pay-off prior to the stated maturity date. At September 30, 2020, there were no amounts drawn under our revolving conduit facilities. See Note 9 for further information on our long-term debt associated with securitizations and revolving conduit facilities. (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 $31 million at September 30, 2020 and are reported in “Other assets.”
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Variable Interest Entities (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying amounts of consolidated VIE assets and liabilities | The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts and revolving conduit facilities were as follows:
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Insurance (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the reserve for unpaid claims and loss adjustment expenses | Changes in the reserve for unpaid claims and loss adjustment expenses (net of reinsurance recoverables):
|
Capital Stock and Earnings Per Share (OMH Only) (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in shares issued and outstanding | Changes in OMH shares of common stock issued and outstanding were as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of earnings per share | The computation of earnings per share was as follows:
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes, net of tax, in accumulated other comprehensive income (loss) | Changes, net of tax, in accumulated other comprehensive income (loss) were as follows:
* There were no amounts related to available-for-sale debt securities for which an allowance for credit losses was recorded during the three and nine months ended September 30, 2020.
|
Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information about the Company's segments | The following tables present information about C&I and Other, as well as reconciliations to the consolidated financial statement amounts.
* Other revenues in Other include the gain on the February 2019 Real Estate Loan Sale as well as the impairment adjustments on the remaining loans in held for sale in 2019.
|
Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair values and carrying values of financial instruments and fair value hierarchy based on the level of inputs utilized to determine such fair value | The following table presents the carrying amounts and estimated fair values of our financial instruments and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:
*Other assets at September 30, 2020 and December 31, 2019 includes finance receivables held for sale and miscellaneous receivables related to our liquidating loan portfolios.
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Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables present information about our assets measured at fair value on a recurring basis and indicates the fair value hierarchy based on the levels of inputs we utilized to determine such fair value:
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Fair Value, Assets Measured on Nonrecurring Basis | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques |
Business and Basis of Presentation (Details) |
Sep. 30, 2020 |
---|---|
Majority Shareholder | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage by Initial Stockholder | 40.90% |
Reconciliation of OneMain Finance Corporation Results to OneMain Holdings, Inc. Results - Reconciliation of SFC to OMH (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Consolidated Balance Sheets | ||||||||
Other assets | $ 1,082 | $ 1,082 | $ 769 | |||||
Deferred and accrued taxes | 55 | 55 | 34 | |||||
Other liabilities | 528 | 528 | 592 | |||||
Total shareholders' equity | 3,123 | $ 4,094 | 3,123 | $ 4,094 | $ 3,171 | 4,330 | $ 4,141 | $ 3,799 |
Consolidated Statements of Operations | ||||||||
Interest expense | 255 | 244 | 781 | 717 | ||||
Other revenue | 13 | 20 | 38 | 80 | ||||
Other operating expenses | 134 | 146 | 425 | 422 | ||||
Income before income taxes | 341 | 297 | 502 | 755 | ||||
Income taxes | 91 | 49 | 131 | 161 | ||||
Net income | 250 | 248 | 371 | 594 | ||||
OMFC | ||||||||
Consolidated Balance Sheets | ||||||||
Other assets | 1,081 | 1,081 | 768 | |||||
Deferred and accrued taxes | 57 | 57 | 35 | |||||
Other liabilities | 526 | 526 | 595 | |||||
Total shareholders' equity | 3,122 | 4,089 | 3,122 | 4,089 | $ 3,170 | 4,325 | $ 4,404 | $ 4,021 |
Consolidated Statements of Operations | ||||||||
Interest expense | 255 | 247 | 781 | 719 | ||||
Other revenue | 13 | 20 | 38 | 88 | ||||
Other operating expenses | 134 | 145 | 425 | 421 | ||||
Income before income taxes | 341 | 295 | 502 | 762 | ||||
Income taxes | 91 | 51 | 131 | 165 | ||||
Net income | 250 | 244 | 371 | 597 | ||||
Difference | ||||||||
Consolidated Balance Sheets | ||||||||
Other assets | 1 | 1 | 1 | |||||
Deferred and accrued taxes | (2) | (2) | (1) | |||||
Other liabilities | 2 | 2 | (3) | |||||
Total shareholders' equity | 1 | 1 | $ 5 | |||||
Consolidated Statements of Operations | ||||||||
Interest expense | 0 | (3) | 0 | (2) | ||||
Other revenue | 0 | (8) | ||||||
Other operating expenses | 0 | 1 | 0 | 1 | ||||
Income before income taxes | 0 | 2 | 0 | (7) | ||||
Income taxes | 0 | (2) | 0 | (4) | ||||
Net income | $ 0 | $ 4 | $ 0 | $ (3) |
Reconciliation of OneMain Finance Corporation Results to OneMain Holdings, Inc. Results - Additional Information (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 23, 2019 |
Jul. 01, 2019 |
Jan. 01, 2019 |
Sep. 30, 2019 |
Sep. 23, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
OMFC | |||||||
Business Acquisition [Line Items] | |||||||
Cash contribution from OMH | $ 0 | $ 144,000,000 | |||||
Affiliated Entity | OMFC | |||||||
Business Acquisition [Line Items] | |||||||
Equity reduction | $ 408,000,000 | $ 264,000,000 | |||||
Accrued interest | $ 22,000,000 | 166,000,000 | $ 22,000,000 | ||||
Equity contribution | $ 144,000,000 | ||||||
Affiliated Entity | SFI | OMFC | |||||||
Business Acquisition [Line Items] | |||||||
Notes receivable from parent | 232,000,000 | ||||||
Interest income on notes receivable | $ 0 | 8,000,000 | |||||
Affiliated Entity | SFI | SMHC | |||||||
Business Acquisition [Line Items] | |||||||
Notes receivable from parent | $ 28,000,000 | ||||||
SMHC | OMFC | |||||||
Business Acquisition [Line Items] | |||||||
Contribution of SCHC to OMFC from SFI | $ 34,000,000 | $ 34,000,000 | |||||
Cash contribution from OMH | $ 53,000,000 |
Recent Accounting Pronouncements (Details) $ in Millions |
9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2020
USD ($)
payment
|
Dec. 31, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jan. 01, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||
Financing receivable, allowance for credit loss | $ 2,324 | $ 829 | |||||
Retained earnings | $ 3,123 | 4,330 | $ 3,171 | $ 4,094 | $ 4,141 | $ 3,799 | |
Number of consecutive payments missed to reverse finance charges | payment | 4 | ||||||
One-time cumulative effect | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Financing receivable, allowance for credit loss | 1,118 | $ 1,120 | |||||
Deferred tax assets | 280 | ||||||
Retained earnings | $ (828) | $ 830 |
Finance Receivables - Net Finance Receivables by Type (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Financing receivable general information | ||
Total | $ 17,817 | $ 18,389 |
Finance receivable - Personal loan | ||
Financing receivable general information | ||
Gross receivables | 17,606 | 18,195 |
Unearned points and fees | (224) | (242) |
Accrued finance charges | 290 | 289 |
Deferred origination costs | 145 | 147 |
Total | $ 17,817 | $ 18,389 |
Finance Receivables - Purchased Credit Impaired Finance Receivables HFI (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Real Estate Loans - Held for Sale | ||
Financing Receivable, Impaired [Line Items] | ||
Carrying amount, net of allowance | $ 19 | |
Outstanding balance | 35 | |
Finance receivable - Personal loan | ||
Financing Receivable, Impaired [Line Items] | ||
Carrying amount, net of allowance | 40 | |
Outstanding balance | 74 | |
Allowance for purchased credit impaired finance receivable losses | $ 0 | $ 0 |
Finance Receivables - Changes in Accretable Yield For Purchased Credit Impaired HFI and HFS (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2019 |
|
Real Estate Loans - Held for Sale | ||
Changes in accretable yield for purchased credit impaired finance receivables | ||
Balance at beginning of period | $ 23 | $ 27 |
Accretion | (1) | (2) |
Transfer due to finance receivables sold | 0 | (3) |
Balance at end of period | 22 | 22 |
Finance receivable - Personal loan | ||
Changes in accretable yield for purchased credit impaired finance receivables | ||
Balance at beginning of period | 46 | 39 |
Accretion | (6) | (15) |
Reclassifications from nonaccretable difference | 0 | 16 |
Balance at end of period | $ 40 | $ 40 |
Finance Receivables - TDR Finance Receivable HFI and HFS (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Real Estate Loans - Held for Sale | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
TDR gross receivables, held for sale | $ 49 | $ 52 |
TDR net receivables, held for sale | 49 | 53 |
Finance receivable - Personal loan | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
TDR gross receivables, personal loans | 699 | 655 |
TDR net receivables, personal loans | 701 | 658 |
Allowance for TDR finance receivable losses | $ 321 | $ 272 |
Finance Receivables - TDR Average Net Receivables HFI and HFS and Finance Charges Recognized (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR average net receivables | $ 750 | $ 626 | $ 743 | $ 584 |
TDR finance charges recognized | 14 | 12 | 40 | 37 |
Personal Loans | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR average net receivables | 701 | 571 | 692 | 525 |
TDR finance charges recognized | 13 | 11 | 38 | 35 |
Other Receivables | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR average net receivables | 49 | 55 | 51 | 59 |
TDR finance charges recognized | $ 1 | $ 1 | $ 2 | $ 2 |
Finance Receivables - New Volume of TDR HFI & HFS Finance Receivables (Details) - Personal Loans $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020
USD ($)
account
|
Sep. 30, 2019
USD ($)
account
|
Sep. 30, 2020
USD ($)
account
|
Sep. 30, 2019
USD ($)
account
|
|
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Pre-modification TDR net finance receivables | $ 105 | $ 129 | $ 392 | $ 373 |
Total post-modification TDR net finance receivables | $ 105 | $ 129 | $ 392 | $ 373 |
Number of TDR accounts | account | 13,581 | 18,545 | 52,780 | 55,358 |
Rate reduction | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total post-modification TDR net finance receivables | $ 67 | $ 86 | $ 242 | $ 257 |
Other | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total post-modification TDR net finance receivables | $ 38 | $ 43 | $ 150 | $ 116 |
Finance Receivables - Modified as TDR - Non Performing Finance Receivables (Details) - Personal Loans $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020
USD ($)
account
|
Sep. 30, 2019
USD ($)
account
|
Sep. 30, 2020
USD ($)
account
|
Sep. 30, 2019
USD ($)
account
|
|
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR net finance receivables | $ | $ 20 | $ 27 | $ 77 | $ 66 |
Number of TDR accounts | account | 2,947 | 4,202 | 11,286 | 10,298 |
Allowance for Finance Receivable Losses - Changes in Allowance by Type (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Changes in allowance for finance receivable losses | |||||
Balance at beginning of period | $ 829 | ||||
Provision for finance receivable losses | $ 231 | $ 282 | 1,186 | $ 836 | |
Balance at end of period | 2,324 | 2,324 | $ 829 | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||
Net impact of adoption of ASU 2016-13 | |||||
Changes in allowance for finance receivable losses | |||||
Balance at beginning of period | 1,118 | ||||
Balance at end of period | $ 1,118 | ||||
Personal Loans | |||||
Changes in allowance for finance receivable losses | |||||
Balance at beginning of period | 2,324 | 744 | 829 | 731 | 731 |
Provision for finance receivable losses | 231 | 282 | 1,186 | 836 | |
Charge-offs | (274) | (260) | (931) | (862) | |
Recoveries | 43 | 32 | 122 | 93 | |
Balance at end of period | $ 2,324 | $ 798 | $ 2,324 | $ 798 | $ 829 |
Allowance for Finance Receivable Losses - By Type and Impairment Method (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2020 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Allowance for finance receivable losses: | ||||||
Total | $ 2,324 | $ 829 | ||||
Finance receivables: | ||||||
Net finance receivables | 17,817 | 18,389 | ||||
Finance receivable - Personal loan | ||||||
Allowance for finance receivable losses: | ||||||
Collectively evaluated for impairment | 2,003 | 557 | ||||
Purchased credit impaired finance receivables * | 0 | 0 | ||||
TDR finance receivables | 321 | 272 | ||||
Total | 2,324 | 829 | $ 2,324 | $ 798 | $ 744 | $ 731 |
Finance receivables: | ||||||
Collectively evaluated for impairment | 17,116 | 17,691 | ||||
TDR finance receivables | 701 | 658 | ||||
Net finance receivables | $ 17,817 | $ 18,389 | ||||
Allowance for finance receivable losses as a percentage of finance receivables | 13.05% | 4.51% | ||||
Finance receivable - Personal loan | Purchased credit impaired finance receivables | ||||||
Finance receivables: | ||||||
Net finance receivables | $ 0 | $ 40 |
Finance Receivables Held for Sale (Details) - USD ($) $ in Millions |
1 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Finance receivables held for sale | $ 54 | $ 64 | ||
Aggregate cash proceeds from sale of real estate loans | $ 0 | $ 19 | ||
February 2019 Real Estate Loan Sale | Disposed of by Sale | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Carrying value | $ 16 | |||
Aggregate cash proceeds from sale of real estate loans | 19 | |||
Net gain in other revenues | 3 | |||
Impairment in other revenue | $ 3 |
Investment Securities - Additional Information (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020
USD ($)
investment
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
investment
|
Sep. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
investment
|
|
Investments, Debt and Equity Securities [Abstract] | |||||
Interest receivable | $ 13 | $ 13 | |||
Investment securities in an unrealized loss position | investment | 233 | 233 | 398 | ||
Proceeds from sales and redemptions | $ 74 | $ 36 | $ 179 | $ 245 | |
Securities on deposit with third parties | $ 604 | $ 604 | $ 633 |
Investment Securities - Contractual Maturities of AFS Investment Securities (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: | ||
Due in 1 year or less | $ 128 | |
Due after 1 year through 5 years | 605 | |
Due after 5 years through 10 years | 526 | |
Due after 10 years | 188 | |
Mortgage-backed, asset-backed, and collateralized securities | 359 | |
Total | 1,806 | $ 1,798 |
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: | ||
Due in 1 year or less | 127 | |
Due after 1 year through 5 years | 573 | |
Due after 5 years through 10 years | 485 | |
Due after 10 years | 170 | |
Mortgage-backed, asset-backed, and collateralized securities | 350 | |
Cost/ Amortized Cost | $ 1,705 | $ 1,745 |
Investment Securities - Fair Value of Other Securities (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt and Equity Securities, FV-NI [Line Items] | ||
Bonds | $ 38 | $ 40 |
Other long-term investments | 0 | 1 |
Total | 76 | 86 |
Non-U.S. government and government sponsored entities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Bonds | 1 | 1 |
Corporate debt | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Bonds | 20 | 24 |
Mortgage-backed, asset-backed, and collateralized bonds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Bonds | 17 | 15 |
Preferred stock | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities | 14 | 19 |
Common stock | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities | $ 24 | $ 26 |
Long-term Debt - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jul. 29, 2020 |
Sep. 30, 2020 |
Sep. 30, 2020 |
May 14, 2020 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | |||||
Long-term debt | $ 17,531 | $ 17,531 | $ 17,212 | ||
8.75% Senior Notes Due 2025 | Senior Debt | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 8.875% | ||||
Long-term debt | $ 600 | ||||
8.25% Senior Notes Due 2020 | Senior Debt | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 8.25% | 8.25% | |||
Repayments of debt | $ 1,000 | ||||
Loss on repurchase and repayments of debt | $ 35 | $ 35 |
Variable Interest Entities - Consolidated VIEs (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Variable Interest Entity [Line Items] | ||||
Interest expense | $ 255 | $ 244 | $ 781 | $ 717 |
Consolidated VIEs | ||||
Variable Interest Entity [Line Items] | ||||
Interest expense | $ 84 | $ 79 | $ 256 | $ 243 |
Variable Interest Entities - Securitized Borrowings (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Minimum | |
Debt Instrument [Line Items] | |
Revolving period | 1 year |
Maximum | |
Debt Instrument [Line Items] | |
Revolving period | 7 years |
Variable Interest Entities - Revolving Conduit Facilities (Details) - Consolidated VIEs - Securitizations |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
facility
| |
Line of Credit Facility [Line Items] | |
Number of conduit facilities | facility | 14 |
Total borrowing capacity | $ 7,200,000,000 |
Amounts drawn | $ 0 |
Maximum | |
Line of Credit Facility [Line Items] | |
Debt instrument, term | 10 years |
Insurance (Details) - USD ($) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Liability for unpaid claims and claims adjustment expense | ||||
Balance at beginning of period | $ 117 | $ 117 | ||
Less reinsurance recoverables | (3) | (3) | $ (4) | $ (4) |
Net balance at beginning of period | 113 | 113 | ||
Additions for losses and loss adjustment expenses incurred to: | ||||
Current year | 221 | 154 | ||
Prior years | (10) | (13) | ||
Total | 211 | 141 | ||
Reductions for losses and loss adjustment expenses paid related to: | ||||
Current year | (107) | (85) | ||
Prior years | (60) | (57) | ||
Total | (167) | (142) | ||
Net balance at end of period | 157 | 112 | ||
Plus reinsurance recoverables | 3 | 3 | $ 4 | $ 4 |
Balance at end of period | 160 | 115 | ||
Net reserves | $ 10 | $ 13 |
Capital Stock and Earnings Per Share (OMH Only) - Additional Information (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Mar. 19, 2020
$ / shares
shares
|
Mar. 19, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
class
|
Sep. 30, 2019
USD ($)
|
Mar. 31, 2020
USD ($)
|
|
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Number of classes of authorized stock | class | 2 | ||||
Stock repurchase program | $ 200,000,000 | ||||
Shares repurchased and retired (in shares) | shares | 2,031,698 | ||||
Shares repurchased average price per share (in usd per share) | $ / shares | $ 22.30 | ||||
Common stock repurchased and retired | $ 45,000,000 | $ 45,000,000 | |||
Payments of dividends | 745,000,000 | $ 374,000,000 | |||
OMFC | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Payments of dividends | $ 45,000,000 |
Capital Stock and Earnings Per Share (OMH Only) - Changes in Shares Issued and Outstanding (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||
Beginning balance (in shares) | 134,319,171 | 136,089,417 | 136,101,156 | 135,832,278 |
Common shares issued (in shares) | 3,842 | 6,257 | 253,555 | 263,396 |
Common shares retired (in shares) | 0 | 0 | (2,031,698) | 0 |
Ending balance (in shares) | 134,323,013 | 136,095,674 | 134,323,013 | 136,095,674 |
Capital Stock and Earnings Per Share (OMH Only) - Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Numerator (basic and diluted): | ||||
Net income | $ 250 | $ 248 | $ 371 | $ 594 |
Denominator: | ||||
Weighted average number of shares outstanding (basic) (in shares) | 134,321,929 | 136,095,481 | 134,847,170 | 136,060,832 |
Effect of dilutive securities (in shares) | 185,620 | 280,570 | 152,317 | 211,559 |
Weighted average number of shares outstanding (diluted) (in shares) | 134,507,549 | 136,376,051 | 134,999,487 | 136,272,391 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.86 | $ 1.82 | $ 2.75 | $ 4.36 |
Diluted (in dollars per share) | $ 1.86 | $ 1.82 | $ 2.75 | $ 4.36 |
Service-based shares | ||||
Earnings per share: | ||||
Shares excluded in the diluted earnings per share calculation (in shares) | 256,034 | 184,997 | 303,913 | 297,194 |
Income Taxes (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||
Net deferred tax asset | $ 440 | $ 104 | |
Increase in net deferred tax asset | $ 336 | ||
Effective tax rate | 26.10% | 21.30% | |
Unrecognized tax benefits, including related interest and penalties | $ 13 | $ 12 |
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