UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the quarterly period ended ~~September 30, 2020~~March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from to

Commission file number

001-36129 (OneMain Holdings, Inc.)

001-06155 (OneMain Finance Corporation)

ONEMAIN HOLDINGS, INC.

ONEMAIN FINANCE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (OneMain Holdings, Inc.)

27-3379612

Indiana (OneMain Finance Corporation)

35-0416090

(State of incorporation)

(I.R.S. Employer Identification No.)

601 N.W. Second Street, Evansville, IN 47708

(Address of principal executive offices) (Zip code)

(812) 424-8031

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

OneMain Holdings, Inc.:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

OMF

New York Stock Exchange

OneMain Finance Corporation: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

OneMain Holdings, Inc. Yes ☑ No ☐

OneMain Finance Corporation Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

OneMain Holdings, Inc. Yes ☑ No ☐

OneMain Finance Corporation Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

OneMain Holdings, Inc.:

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

OneMain Finance Corporation:

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☑

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

OneMain Holdings, Inc. ☐

OneMain Finance Corporation ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

OneMain Holdings, Inc. Yes ☐ No ☑

OneMain Finance Corporation Yes ☐ No ☑

At ~~October 22, 2020,~~April 19, 2021, there were ~~134,325,845~~134,477,096 shares of OneMain Holdings, Inc’s common stock, $0.01 par value, outstanding.

At ~~October 22, 2020,~~April 19, 2021, there were 10,160,021 shares of OneMain Finance Corporation’s common stock, $0.50 par value, outstanding.

TABLE OF CONTENTS



GLOSSARY		4

PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements of OneMain Holdings, Inc. and Subsidiaries (Unaudited):
	Condensed Consolidated Balance Sheets	76
	Condensed Consolidated Statements of Operations	87
	Condensed Consolidated Statements of Comprehensive Income (Loss)	98
	Condensed Consolidated Statements of Shareholders’ Equity	109
	Condensed Consolidated Statements of Cash Flows	1110
	Financial Statements of OneMain Finance Corporation and Subsidiaries (Unaudited):
	Condensed Consolidated Balance Sheets	1211
	Condensed Consolidated Statements of Operations	1312
	Condensed Consolidated Statements of Comprehensive Income (Loss)	1413
	Condensed Consolidated Statements of Shareholder’s Equity	1514
	Condensed Consolidated Statements of Cash Flows	1615
	Notes to the Condensed Consolidated Financial Statements	1816
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4434
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6953
Item 4.	Controls and Procedures	7054
	Controls and Procedures of OneMain Holdings, Inc.	7054
	Controls and Procedures of OneMain Finance Corporation	7054

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	7155
Item 1A.	Risk Factors	7155
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7355
Item 3.	Defaults Upon Senior Securities	7355
Item 4.	Mine Safety Disclosures	7355
Item 5.	Other Information	7355
Item 6.	Exhibit Index	7456

SIGNATURES
	OneMain Holdings, Inc. Signature	7557
	OneMain Finance Corporation Signature	7658

Table of Contents

GLOSSARY

Terms and abbreviations used in this report are defined below.


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


Annual Report						the Annual Report on Form 10-K of OMH and OMFC for the fiscal year ended December 31, 2020, filed with the SEC on February 9, 2021
AOCI						Accumulated other comprehensive income (loss)
Apollo						Apollo Global Management, LLC and its consolidated subsidiaries
Apollo-Värde Group						an investor group led by funds managed by Apollo and Värde

~~Apollo-Värde Transaction~~ARPA						~~the purchase by the Apollo-Värde Group~~American Rescue Plan Act 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~~2021 signed into law on ~~June 25, 2018~~March 11, 2021
ASC						Accounting Standards Codification
ASU						Accounting Standards Update
ASU 2016-13						the accounting standard issued by FASB in June of 2016, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments
Average daily debt balance						average of debt for each day in the period
Average net receivables						average of monthly average net finance receivables (net finance receivables at the beginning and end of each month divided by two) in the period

Base Indenture						OMFC Indenture, dated as of December 3, 2014
CAA						Consolidated Appropriations Act of 2021 signed into law on December 27, 2020
CARES Act						Coronavirus Aid, Relief, and Economic Security Act signed into law ~~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
Gross finance receivables						the unpaid principal balance of our personal loans. For precompute loans, unpaid principal balance is the gross contractual payments less the unaccreted balance of unearned finance charges

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

~~Table of Contents~~

~~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)

Table of Contents


Term or Abbreviation						Definition

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~~collectively with its subsidiaries

Other securities						primarily consist of equity securities and those securities for which the fair value option was ~~elected and equity securities.~~elected. 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~~was 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
Springleaf						OMH and its subsidiaries (other than OneMain)



~~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

~~Table of Contents~~

~~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

Table of Contents

PART I - FINANCIAL INFORMATION


Item 1. Financial Statements.

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(dollars in millions, except par value amount) September 30,
2020 December 31, 2019
Assets
Cash and cash equivalents $ 1,944 $ 1,227
Investment securities (includes available-for-sale securities with a fair value of $1.8 billion and an
    amortized cost basis of $1.7 billion in 2020)
1,882 1,884
Net finance receivables (includes loans of consolidated VIEs of $9.4 billion in 2020 and $8.4 billion
    in 2019)
17,817 18,389
Unearned insurance premium and claim reserves (778) (793)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $1.2 billion in
    2020 and $340 million in 2019)
(2,324) (829)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for
finance receivable losses 14,715 16,767
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents
    of consolidated VIEs of $479 million in 2020 and $400 million in 2019)
497 405
Goodwill 1,422 1,422
Other intangible assets 315 343
Other assets 1,082 769
Total assets $ 21,857 $ 22,817
Liabilities and Shareholders’ Equity
Long-term debt (includes debt of consolidated VIEs of $8.4 billion in 2020 and $7.6 billion in 2019) $ 17,531 $ 17,212
Insurance claims and policyholder liabilities 620 649
Deferred and accrued taxes 55 34
Other liabilities (includes other liabilities of consolidated VIEs of $15 million in 2020 and $14 million
    in 2019)
528 592
Total liabilities 18,734 18,487
Contingencies (Note 14)
Shareholders’ equity:
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized, 134,323,013 and 136,101,156 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively 1 1
Additional paid-in capital 1,651 1,689
Accumulated other comprehensive income 79 44
Retained earnings 1,392 2,596
Total shareholders’ equity 3,123 4,330
Total liabilities and shareholders’ equity $ 21,857 $ 22,817



(dollars in millions, except par value amount)	March 31, 2021		December 31, 2020

Assets
Cash and cash equivalents	$	1,301	$	2,272
Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.9 billion and $1.8 billion in 2021, respectively, and $1.8 billion and $1.7 billion in 2020, respectively)	1,951		1,922
Net finance receivables (includes loans of consolidated VIEs of $8.2 billion in 2021 and $8.8 billion in 2020)	17,564		18,084
Unearned insurance premium and claim reserves	(719)		(771)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $1.0 billion in 2021 and $1.1 billion in 2020)	(2,062)		(2,269)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	14,783		15,044

Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $553 million in 2021 and $441 million in 2020)	571		451
Goodwill	1,422		1,422
Other intangible assets	296		306

Other assets	961		1,054
Total assets	$	21,285	$	22,471

Liabilities and Shareholders’ Equity
Long-term debt (includes debt of consolidated VIEs of $7.4 billion in 2021 and $7.8 billion in 2020)	$	16,789	$	17,800
Insurance claims and policyholder liabilities	614		621
Deferred and accrued taxes	90		45
Other liabilities (includes other liabilities of consolidated VIEs of $14 million in 2021 and $15 million in 2020)	484		564
Total liabilities	17,977		19,030
Contingencies (Note 12)	0		0

Shareholders’ equity:
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized, 134,477,096 and 134,341,724 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	1		1
Additional paid-in capital	1,657		1,655
Accumulated other comprehensive income	80		94
Retained earnings	1,570		1,691
Total shareholders’ equity	3,308		3,441
Total liabilities and shareholders’ equity	$	21,285	$	22,471

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)



	Three Months Ended March 31,
(dollars in millions, except per share amounts)	2021		2020




Interest income	$	1,060	$	1,106

Interest expense	235		255

Net interest income	825		851

Provision for finance receivable losses	(2)		531

Net interest income after provision for finance receivable losses	827		320

Other revenues:
Insurance	107		117
Investment	17		9
Net loss on repurchases and repayments of debt	(47)		0

Other	14		15
Total other revenues	91		141

Other expenses:
Salaries and benefits	189		199
Other operating expenses	150		151
Insurance policy benefits and claims	33		68
Total other expenses	372		418

Income before income taxes	546		43

Income taxes	133		11

Net income	$	413	$	32

Share Data:
Weighted average number of shares outstanding:
Basic	134,405,368		135,909,100
Diluted	134,807,165		136,138,677
Earnings per share:
Basic	$	3.07	$	0.24
Diluted	$	3.06	$	0.24

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of ~~Operations~~Comprehensive Income (Loss) (Unaudited)

Three Months Ended
September 30, 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
Net interest income 834 821 2,492 2,303
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:
Insurance 109 117 334 341
Investment 17 21 56 71
Net loss on repurchase and repayment of debt (38) (2) (38) (35)
Net gain on sale of real estate loans 0 0 0 3
Other 13 20 38 80
Total other revenues 101 156 390 460
Other expenses:
Salaries and benefits 186 205 568 609
Other operating expenses 134 146 425 422
Insurance policy benefits and claims 43 47 201 141
Total 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:
Weighted average number of shares outstanding:
Basic 134,321,929 136,095,481 134,847,170 136,060,832
Diluted 134,507,549 136,376,051 134,999,487 136,272,391
Earnings per share:
Basic $ 1.86 $ 1.82 $ 2.75 $ 4.36
Diluted $ 1.86 $ 1.82 $ 2.75 $ 4.36

~~See Notes to the Condensed Consolidated Financial Statements (Unaudited).~~

~~Table of Contents~~

~~ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES~~

~~Condensed Consolidated Statements of Comprehensive Income (Unaudited)~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(dollars in millions) 2020 2019 2020 2019

Net income $ 250 $ 248 $ 371 $ 594
Other comprehensive income:
Net change in unrealized gains on non-credit impaired available-for-sale securities 16 14 49 90
Foreign currency translation adjustments 2 (1) (3) 3
Income tax effect:
Net change in unrealized gains on non-credit impaired available-for-sale securities (4) (3) (11) (21)
Foreign currency translation adjustments 0 0 1 0
Other comprehensive income, net of tax, before reclassification adjustments 14 10 36 72
Reclassification adjustments included in net income, net of tax:
Net realized gains on available-for-sale securities, net of tax 0 0 (1) 0
Reclassification adjustments included in net income, net of tax 0 0 (1) 0
Other comprehensive income, net of tax 14 10 35 72
Comprehensive income $ 264 $ 258 $ 406 $ 666



	Three Months Ended March 31,
(dollars in millions)	2021		2020

Net income	$	413	$	32

Other comprehensive loss:
Net change in unrealized losses on non-credit impaired available-for-sale securities	(43)		(55)


Foreign currency translation adjustments	2		(10)
Other	23		0
Income tax effect:
Net change in unrealized losses on non-credit impaired available-for-sale securities	10		13


Foreign currency translation adjustments	0		2
Other	(6)		0





Other comprehensive loss, net of tax	(14)		(50)

Comprehensive income (loss)	$	399	$	(18)

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

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 $ 1 $ 1,648 $ 65 $ 1,457 $ 3,171
Share-based compensation expense, net of forfeitures — 3 — — 3
Other comprehensive income — — 14 — 14
Cash dividends * — — — (315) (315)
Net income — — — 250 250
Balance, September 30, 2020 $ 1 $ 1,651 $ 79 $ 1,392 $ 3,123
Three Months Ended September 30, 2019
Balance, July 1, 2019 $ 1 $ 1,683 $ 28 $ 2,429 $ 4,141
Share-based compensation expense, net of forfeitures — 3 — — 3
Other comprehensive income — — 10 — 10
Cash dividends * — — — (308) (308)
Net income — — — 248 248
Balance, September 30, 2019 $ 1 $ 1,686 $ 38 $ 2,369 $ 4,094
Nine Months Ended September 30, 2020
Balance, January 1, 2020 (pre-adoption) $ 1 $ 1,689 $ 44 $ 2,596 $ 4,330
Net impact of adoption of ASU 2016-13 (see Note 3)
— — — (828) (828)
Balance, January 1, 2020 (post-adoption) 1 1,689 44 1,768 3,502
Common stock repurchased and retired — (45) — — (45)
Share-based compensation expense, net of forfeitures — 13 — — 13
Withholding tax on share-based compensation — (6) — — (6)
Other comprehensive income — — 35 — 35
Cash dividends * — — — (747) (747)
Net income — — — 371 371
Balance, September 30, 2020 $ 1 $ 1,651 $ 79 $ 1,392 $ 3,123
Nine Months Ended September 30, 2019
Balance, January 1, 2019 $ 1 $ 1,681 $ (34) $ 2,151 $ 3,799
Share-based compensation expense, net of forfeitures — 10 — — 10
Withholding tax on share-based compensation — (5) — — (5)
Other comprehensive income — — 72 — 72
Cash dividends * — — — (376) (376)
Net income — — — 594 594
Balance, September 30, 2019 $ 1 $ 1,686 $ 38 $ 2,369 $ 4,094


	OneMain Holdings, Inc. Shareholders’ Equity
(dollars in millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Shareholders’ Equity


Balance, January 1, 2021	$	1	$	1,655	$	94	$	1,691	$	3,441
Share-based compensation expense, net of forfeitures	—		7		—		—		7
Withholding tax on share-based compensation	—		(5)		—		—		(5)

Other comprehensive loss	—		—		(14)		—		(14)

Cash dividends (a)	—		—		—		(534)		(534)


Net income	—		—		—		413		413
Balance, March 31, 2021	$	1	$	1,657	$	80	$	1,570	$	3,308


Balance, January 1, 2020 (pre-adoption)	$	1	$	1,689	$	44	$	2,596	$	4,330
Net impact of adoption of ASU 2016-13 (b)	—		—		—		(828)		(828)
Balance, January 1, 2020 (post-adoption)	1		1,689		44		1,768		3,502
Common stock repurchased and retired	—		(45)		—		—		(45)
Share-based compensation expense, net of forfeitures	—		7		—		—		7
Withholding tax on share-based compensation	—		(6)		—		—		(6)
Other comprehensive loss	—		—		(50)		—		(50)
Cash dividends (a)	—		—		—		(388)		(388)
Net income	—		—		—		32		32
Balance, March 31, 2020	$	1	$	1,645	$	(6)	$	1,412	$	3,052

*(a) Cash dividends declared were ~~$2.33~~$3.95 per share and ~~$2.25~~$2.83 per share during the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and $5.49 per share and $2.75 per share during~~respectively.

(b) As a result of the ~~nine months ended September 30,~~adoption of ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, on January 1, 2020, ~~and 2019, respectively.~~we recorded a one-time cumulative reduction to retained earnings, net of tax. See Note 4 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report for additional information on the adoption of ASU 2016-13.

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

109

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2020		2019		(dollars in millions)	2021		2020

Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income	Net income	$	371	$	594	Net income	$	413	$	32
Reconciling adjustments:	Reconciling adjustments:					Reconciling adjustments:
Provision for finance receivable losses	Provision for finance receivable losses	1,186		836		Provision for finance receivable losses	(2)		531
Depreciation and amortization	Depreciation and amortization	196		203		Depreciation and amortization	61		64
Deferred income tax charge (benefit)	Deferred income tax charge (benefit)	(72)		8		Deferred income tax charge (benefit)	59		(36)
Net loss on repurchase and repayment of debt		38		35
Net loss on repurchases and repayments of debt						Net loss on repurchases and repayments of debt	47		0

Share-based compensation expense, net of forfeitures	Share-based compensation expense, net of forfeitures	13		10		Share-based compensation expense, net of forfeitures	7		7
Other	Other	5		(8)		Other	(6)		12
Cash flows due to changes in other assets and other liabilities	Cash flows due to changes in other assets and other liabilities	(108)		51		Cash flows due to changes in other assets and other liabilities	(23)		(45)
Net cash provided by operating activities	Net cash provided by operating activities	1,629		1,729		Net cash provided by operating activities	556		565

Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Net principal originations of finance receivables held for investment and held for sale		(278)		(2,445)
Proceeds on sale of finance receivables held for sale originated as held for investment		0		19
Net principal collections (originations) of finance receivables						Net principal collections (originations) of finance receivables	217		(188)

Available-for-sale securities purchased	Available-for-sale securities purchased	(341)		(499)		Available-for-sale securities purchased	(146)		(132)
Available-for-sale securities called, sold, and matured	Available-for-sale securities called, sold, and matured	383		457		Available-for-sale securities called, sold, and matured	91		128
Other securities purchased	Other securities purchased	(11)		(13)		Other securities purchased	(688)		(4)
Other securities called, sold, and matured	Other securities called, sold, and matured	11		26		Other securities called, sold, and matured	681		6
Other, net	Other, net	(21)		(1)		Other, net	43		(6)
Net cash used for investing activities		(257)		(2,456)
Net cash provided by (used for) investing activities						Net cash provided by (used for) investing activities	198		(196)

Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Proceeds from issuance of long-term debt, net of commissions		6,445		5,157
Proceeds (expenses) from issuance of long-term debt, net of issuance costs						Proceeds (expenses) from issuance of long-term debt, net of issuance costs	(1)		3,547
Repayment of long-term debt	Repayment of long-term debt	(6,212)		(3,402)		Repayment of long-term debt	(1,065)		(332)
Cash dividends	Cash dividends	(745)		(374)		Cash dividends	(534)		(387)
Common stock repurchased and retired	Common stock repurchased and retired	(45)		0		Common stock repurchased and retired	0		(45)
Withholding tax on share-based compensation	Withholding tax on share-based compensation	(6)		(5)		Withholding tax on share-based compensation	(5)		(6)
Net cash provided by (used for) financing activities	Net cash provided by (used for) financing activities	(563)		1,376		Net cash provided by (used for) financing activities	(1,605)		2,777

Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	809		649		Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	(851)		3,146
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 beginning of period	1,632		1,178		Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	2,723		1,632
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	2,441	$	1,827	Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	1,872	$	4,778

Supplemental cash flow information	Supplemental cash flow information					Supplemental cash flow information
Cash and cash equivalents	Cash and cash equivalents	$	1,944	$	1,393	Cash and cash equivalents	$	1,301	$	4,203
Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	497		434		Restricted cash and restricted cash equivalents	571		575
Total cash and cash equivalents and restricted cash and restricted cash equivalents	Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	2,441	$	1,827	Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	1,872	$	4,778

Cash paid for amounts included in the measurement of operating lease liabilities		$	44	$	44

Supplemental non-cash activities
Right-of-use assets obtained in exchange for operating lease obligations		$	34	$	221

Restricted cash and restricted cash equivalents primarily represent funds required to be used for future debt payments relating to our securitization transactions.

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

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ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)


(dollars in millions, except par value amount)	(dollars in millions, except par value amount)	September 30, 2020		December 31, 2019		(dollars in millions, except par value amount)	March 31, 2021		December 31, 2020

Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	1,944	$	1,227	Cash and cash equivalents	$	1,301	$	2,272
Investment securities (includes available-for-sale securities with a fair value of $1.8 billion and an amortized cost basis of $1.7 billion in 2020)		1,882		1,884
Net finance receivables (includes loans of consolidated VIEs of $9.4 billion in 2020 and $8.4 billion in 2019)		17,817		18,389
Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.9 billion and $1.8 billion in 2021, respectively, and $1.8 billion and $1.7 billion in 2020, respectively)						Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.9 billion and $1.8 billion in 2021, respectively, and $1.8 billion and $1.7 billion in 2020, respectively)	1,951		1,922
Net finance receivables (includes loans of consolidated VIEs of $8.2 billion in 2021 and $8.8 billion in 2020)						Net finance receivables (includes loans of consolidated VIEs of $8.2 billion in 2021 and $8.8 billion in 2020)	17,564		18,084
Unearned insurance premium and claim reserves	Unearned insurance premium and claim reserves	(778)		(793)		Unearned insurance premium and claim reserves	(719)		(771)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $1.2 billion in 2020 and $340 million in 2019)		(2,324)		(829)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $1.0 billion in 2021 and $1.1 billion in 2020)						Allowance for finance receivable losses (includes allowance of consolidated VIEs of $1.0 billion in 2021 and $1.1 billion in 2020)	(2,062)		(2,269)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	14,715		16,767		Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	14,783		15,044

Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $479 million in 2020 and $400 million in 2019)		497		405
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $553 million in 2021 and $441 million in 2020)						Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $553 million in 2021 and $441 million in 2020)	571		451
Goodwill	Goodwill	1,422		1,422		Goodwill	1,422		1,422
Other intangible assets	Other intangible assets	315		343		Other intangible assets	296		306

Other assets	Other assets	1,081		768		Other assets	961		1,054
Total assets	Total assets	$	21,856	$	22,816	Total assets	$	21,285	$	22,471

Liabilities and Shareholder's Equity	Liabilities and Shareholder's Equity					Liabilities and Shareholder's Equity
Long-term debt (includes debt of consolidated VIEs of $8.4 billion in 2020 and $7.6 billion in 2019)		$	17,531	$	17,212
Long-term debt (includes debt of consolidated VIEs of $7.4 billion in 2021 and $7.8 billion in 2020)						Long-term debt (includes debt of consolidated VIEs of $7.4 billion in 2021 and $7.8 billion in 2020)	$	16,789	$	17,800
Insurance claims and policyholder liabilities	Insurance claims and policyholder liabilities	620		649		Insurance claims and policyholder liabilities	614		621
Deferred and accrued taxes	Deferred and accrued taxes	57		35		Deferred and accrued taxes	92		47
Other liabilities (includes other liabilities of consolidated VIEs of $15 million in 2020 and $14 million in 2019)		526		595
Other liabilities (includes other liabilities of consolidated VIEs of $14 million in 2021 and $15 million in 2020)						Other liabilities (includes other liabilities of consolidated VIEs of $14 million in 2021 and $15 million in 2020)	484		563
Total liabilities	Total liabilities	18,734		18,491		Total liabilities	17,979		19,031
Contingencies (Note 14)
Contingencies (Note 12)						Contingencies (Note 12)	0		0

Shareholder's equity:	Shareholder's equity:					Shareholder's equity:
Common stock, par value $0.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued and outstanding at September 30, 2020 and December 31, 2019		5		5
Common stock, par value $0.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued and outstanding at March 31, 2021 and December 31, 2020						Common stock, par value $0.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued and outstanding at March 31, 2021 and December 31, 2020	5		5
Additional paid-in capital	Additional paid-in capital	1,895		1,888		Additional paid-in capital	1,901		1,899
Accumulated other comprehensive income	Accumulated other comprehensive income	79		44		Accumulated other comprehensive income	80		94
Retained earnings	Retained earnings	1,143		2,388		Retained earnings	1,320		1,442
Total shareholder's equity	Total shareholder's equity	3,122		4,325		Total shareholder's equity	3,306		3,440
Total liabilities and shareholder's equity	Total liabilities and shareholder's equity	$	21,856	$	22,816	Total liabilities and shareholder's equity	$	21,285	$	22,471

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

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ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2020		2019		2020		2019		(dollars in millions)	2021		2020

Interest income	Interest income	$	1,089	$	1,065	$	3,273	$	3,020	Interest income	$	1,060	$	1,106

Interest expense	Interest expense	255		247		781		719		Interest expense	235		255

Net interest income	Net interest income	834		818		2,492		2,301		Net interest income	825		851

Provision for finance receivable losses	Provision for finance receivable losses	231		282		1,186		836		Provision for finance receivable losses	(2)		531

Net interest income after provision for finance receivable losses	Net interest income after provision for finance receivable losses	603		536		1,306		1,465		Net interest income after provision for finance receivable losses	827		320

Other revenues:	Other revenues:									Other revenues:
Insurance	Insurance	109		117		334		341		Insurance	107		117
Investment	Investment	17		21		56		71		Investment	17		9

Net loss on repurchase and repayment of debt		(38)		(2)		(38)		(35)
Net gain on sale of real estate loans		0		0		0		3
Net loss on repurchases and repayments of debt										Net loss on repurchases and repayments of debt	(47)		0

Other	Other	13		20		38		88		Other	14		15
Total other revenues	Total other revenues	101		156		390		468		Total other revenues	91		141

Other expenses:	Other expenses:									Other expenses:
Salaries and benefits	Salaries and benefits	186		205		568		609		Salaries and benefits	189		199
Other operating expenses	Other operating expenses	134		145		425		421		Other operating expenses	150		151
Insurance policy benefits and claims	Insurance policy benefits and claims	43		47		201		141		Insurance policy benefits and claims	33		68
Total other expenses	Total other expenses	363		397		1,194		1,171		Total other expenses	372		418

Income before income taxes	Income before income taxes	341		295		502		762		Income before income taxes	546		43

Income taxes	Income taxes	91		51		131		165		Income taxes	133		11

Net income	Net income	$	250	$	244	$	371	$	597	Net income	$	413	$	32

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

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ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
(dollars in millions) 2020 2019 2020 2019
Net income $ 250 $ 244 $ 371 $ 597
Other comprehensive income:
Net change in unrealized gains on non-credit impaired available-for-sale securities 16 14 49 90
Foreign currency translation adjustments 2 (1) (3) 4
Income tax effect:
Net change in unrealized gains on non-credit impaired available-for-sale securities (4) (3) (11) (21)
Retirement plan liability adjustments 0 0 0 (1)
Foreign currency translation adjustments 0 0 1 0
Other comprehensive income, net of tax, before reclassification adjustments 14 10 36 72
Reclassification adjustments included in net income, net of tax:
Net realized gains on available-for-sale securities, net of tax 0 0 (1) 0
Reclassification adjustments included in net income, net of tax 0 0 (1) 0
Other comprehensive income, net of tax 14 10 35 72
Comprehensive income $ 264 $ 254 $ 406 $ 669



	Three Months Ended March 31,
(dollars in millions)	2021		2020

Net income	$	413	$	32

Other comprehensive loss:
Net change in unrealized losses on non-credit impaired available-for-sale securities	(43)		(55)


Foreign currency translation adjustments	2		(10)

Other	23		0
Income tax effect:
Net change in unrealized losses on non-credit impaired available-for-sale securities	10		13


Foreign currency translation adjustments	0		2
Other	(6)		0




Other comprehensive loss, net of tax	(14)		(50)

Comprehensive income (loss)	$	399	$	(18)

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholder's Equity (Unaudited)


	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


Balance, January 1, 2021	$	5	$	1,899	$	94	$	1,442	$	3,440


Share-based compensation expense, net of forfeitures	—		7		—		—		7
Withholding tax on share-based compensation	—		(5)		—		—		(5)

Other comprehensive loss	—		—		(14)		—		(14)
Cash dividends	—		—		—		(535)		(535)


Net income	—		—		—		413		413
Balance, March 31, 2021	$	5	$	1,901	$	80	$	1,320	$	3,306


Balance, January 1, 2020 (pre-adoption)	$	5	$	1,888	$	44	$	2,388	$	4,325
Net impact of adoption of ASU 2016-13 *	—		—		—		(828)		(828)
Balance, January 1, 2020 (post-adoption)	5		1,888		44		1,560		3,497
Share-based compensation expense, net of forfeitures	—		7		—		—		7
Withholding tax on share-based compensation	—		(6)		—		—		(6)
Other comprehensive loss	—		—		(50)		—		(50)


Cash dividends	—		—		—		(433)		(433)
Net income	—		—		—		32		32
Balance, March 31, 2020	$	5	$	1,889	$	(6)	$	1,159	$	3,047

* As a result of the adoption of ASU 2016-13, on January 1, 2020, we recorded a one-time cumulative reduction to retained earnings, net of tax. See Note 4 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report for additional information on the adoption of ASU 2016-13.

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of ~~Shareholder's Equity (Unaudited)~~

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 $ 5 $ 1,892 $ 65 $ 1,208 $ 3,170
Share-based compensation expense, net of forfeitures — 3 — — 3
Other comprehensive income — — 14 — 14
Cash dividends — — — (315) (315)
Net income — — — 250 250
Balance, September 30, 2020 $ 5 $ 1,895 $ 79 $ 1,143 $ 3,122
Three Months Ended September 30, 2019
Balance, July 1, 2019 $ 5 $ 2,146 $ 28 $ 2,225 $ 4,404
Share-based compensation expense, net of forfeitures — 3 — — 3
Other comprehensive income — — 10 — 10
Merger of SFI with OMFC — (408) — — (408)
Cash contribution from OMH — 144 — — 144
Cash dividends — — — (308) (308)
Net income — — — 244 244
Balance, September 30, 2019 $ 5 $ 1,885 $ 38 $ 2,161 $ 4,089
Nine Months Ended September 30, 2020
Balance, January 1, 2020 (pre-adoption) $ 5 $ 1,888 $ 44 $ 2,388 $ 4,325
Net impact of adoption of ASU 2016-13 (see Note 3)
— — — (828) (828)
Balance, January 1, 2020 (post-adoption) 5 1,888 44 1,560 3,497
Share-based compensation expense, net of forfeitures — 13 — — 13
Withholding tax on share-based compensation — (6) — — (6)
Other comprehensive income — — 35 — 35
Cash dividends — — — (788) (788)
Net income — — — 371 371
Balance, September 30, 2020 $ 5 $ 1,895 $ 79 $ 1,143 $ 3,122
Nine Months Ended September 30, 2019
Balance, January 1, 2019 $ 5 $ 2,110 $ (34) $ 1,940 $ 4,021
Merger of SFI with OMFC — (408) — — (408)
Cash contribution from OMH — 144 — — 144
Contribution of SCHC to OMFC from SFI — 34 — — 34
Share-based compensation expense, net of forfeitures — 10 — — 10
Withholding tax on shared-based compensation — (5) — — (5)
Other comprehensive income — — 72 — 72
Cash dividends — — — (376) (376)
Net income — — — 597 597
Balance, September 30, 2019 $ 5 $ 1,885 $ 38 $ 2,161 $ 4,089

~~See Notes to the Condensed Consolidated Financial Statements (Unaudited).~~

~~Table of Contents~~

~~ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES~~

~~Condensed Consolidated Statements of~~ Cash Flows (Unaudited)

Nine Months Ended September 30,
(dollars in millions) 2020 2019
Cash flows from operating activities
Net income $ 371 $ 597
Reconciling adjustments:
Provision for finance receivable losses 1,186 836
Depreciation and amortization 196 203
Deferred income tax charge (benefit) (72) 9
Net loss on repurchase and repayment of debt 38 35
Share-based compensation expense, net of forfeitures 13 10
Other 5 (8)
Cash flows due to changes in other assets and other liabilities (112) 77
Net cash provided by operating activities 1,625 1,759
Cash flows from investing activities
Net principal originations of finance receivables held for investment and held for sale (278) (2,445)
Proceeds on sale of finance receivables held for sale originated as held for investment 0 19
Available-for-sale securities purchased (341) (499)
Available-for-sale securities called, sold, and matured 383 457
Other securities purchased (11) (13)
Other securities called, sold, and matured 11 26
Other, net (21) (1)
Net cash used for investing activities (257) (2,456)
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of commissions 6,445 5,157
Repayment of long-term debt (6,212) (3,402)
Cash contribution of SCLH 0 12
Cash dividends to OMH (786) (374)
Cash contribution from OMH 0 144
Payments on intercompany notes payable 0 (170)
Withholding tax on share-based compensation (6) (5)
Net cash provided by (used for) financing activities (559) 1,362
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents 809 665
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period 1,632 1,162
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period $ 2,441 $ 1,827

~~Table of Contents~~

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 $ 1,944 $ 1,393
Restricted cash and restricted cash equivalents 497 434
Total cash and cash equivalents and restricted cash and restricted cash equivalents $ 2,441 $ 1,827
Cash paid for amounts included in the measurement of operating lease liabilities $ 44 $ 44
Supplemental non-cash activities
Right-of-use assets obtained in exchange for operating lease obligations $ 34 $ 221
Non-cash contribution of SCLH 0 22
Non-cash merger of SFI with OMFC 0 (408)



	Three Months Ended March 31,
(dollars in millions)	2021		2020

Cash flows from operating activities
Net income	$	413	$	32
Reconciling adjustments:
Provision for finance receivable losses	(2)		531
Depreciation and amortization	61		64
Deferred income tax charge (benefit)	59		(36)
Net loss on repurchases and repayments of debt	47		0

Share-based compensation expense, net of forfeitures	7		7
Other	(6)		12
Cash flows due to changes in other assets and other liabilities	(23)		(45)
Net cash provided by operating activities	556		565

Cash flows from investing activities
Net principal collections (originations) of finance receivables	217		(188)




Available-for-sale securities purchased	(146)		(132)
Available-for-sale securities called, sold, and matured	91		128
Other securities purchased	(688)		(4)
Other securities called, sold, and matured	681		6
Other, net	43		(6)
Net cash provided by (used for) investing activities	198		(196)

Cash flows from financing activities
Proceeds (expenses) from issuance of long-term debt, net of issuance costs	(1)		3,547
Repayment of long-term debt	(1,065)		(332)






Cash dividends	(534)		(432)

Withholding tax on share-based compensation	(5)		(6)
Net cash provided by (used for) financing activities	(1,605)		2,777





Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	(851)		3,146
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	2,723		1,632
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	1,872	$	4,778






Supplemental cash flow information
Cash and cash equivalents	$	1,301	$	4,203
Restricted cash and restricted cash equivalents	571		575
Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	1,872	$	4,778

Restricted cash and restricted cash equivalents primarily represent funds required to be used for future debt payments relating to our securitization transactions.

See Notes to the Condensed Consolidated Financial Statements (Unaudited).

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ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements ~~(Unaudited)~~

~~September 30, 2020~~March 31, 2021


1. Business and Basis of ~~Presentation~~Operations

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,~~The results of OMFC ~~entered~~are consolidated into ~~a merger agreement with its direct parent, SFI,~~the results of OMH. Due to ~~merge SFI with~~the nominal differences between OMFC 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, content throughout this filing relates to both OMH and OMFC. 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,~~March 31, 2021, the Apollo-Värde Group owned approximately ~~40.9%~~34.0% 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.~~Report. 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.~~reporting.

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2. ~~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:

September 30, 2020 December 31, 2019
(dollars in millions) OMH OMFC Difference OMH OMFC Difference
Other assets $ 1,082 $ 1,081 $ 1 $ 769 $ 768 $ 1
Deferred and accrued taxes 55 57 (2) 34 35 (1)
Other liabilities 528 526 2 592 595 (3)
Total shareholders' equity (a) 3,123 3,122 1 4,330 4,325 5

Three Months Ended September 30,
2020 2019
(dollars in millions) OMH OMFC Difference OMH OMFC Difference
Interest expense $ 255 $ 255 $ 0 $ 244 $ 247 $ (3)
Other operating expenses 134 134 0 146 145 1
Income before income taxes 341 341 0 297 295 2
Income taxes 91 91 0 49 51 (2)
Net Income 250 250 0 248 244 4
Nine Months Ended September 30,
2020 2019
(dollars in millions) OMH OMFC Difference OMH OMFC Difference
Interest expense $ 781 $ 781 $ 0 $ 717 $ 719 $ (2)
Other revenues (b) 38 38 0 80 88 (8)
Other operating expenses 425 425 0 422 421 1
Income before income taxes 502 502 0 755 762 (7)
Income taxes 131 131 0 161 165 (4)
Net Income 371 371 0 594 597 (3)

(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.

~~Table of Contents~~

~~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 0 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.


3. 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.

~~Table of Contents~~

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~~ ~~ASU 2016-13~~.

~~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 4 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.

~~Table of Contents~~

~~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.~~

~~Table of Contents~~

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,~~The amendments in this ASU ~~will~~ become effective for usthe Company beginning January 1, ~~2022. In July~~2023, as a result of ~~2020,~~ the FASB ~~proposed~~issuing a one-year deferral of this ASU ~~to become effective~~ for public ~~entities for fiscal years beginning January 1, 2023.~~companies.

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~~selected a vendor for 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.


4.3. Finance Receivables

Our finance receivables consist of personal loans, which are non-revolving, with a fixed-rate, fixed terms generally between three 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~~net finance receivables were as follows:


(dollars in millions)	(dollars in millions)	September 30, 2020		December 31, 2019		(dollars in millions)	March 31, 2021		December 31, 2020

Gross receivables *		$	17,606	$	18,195

Gross finance receivables *						Gross finance receivables *	$	17,363	$	17,860
Unearned points and fees	Unearned points and fees	(224)		(242)		Unearned points and fees	(210)		(225)
Accrued finance charges	Accrued finance charges	290		289		Accrued finance charges	268		299
Deferred origination costs	Deferred origination costs	145		147		Deferred origination costs	143		150
Total	Total	$	17,817	$	18,389	Total	$	17,564	$	18,084

* Gross finance receivables equal the unpaid principal balance ~~(“UPB”) except for~~of our personal loans. For precompute loans, unpaid principal balance is 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~~contractual payments less the ~~current~~unaccreted balance of ~~accretable yield on the purchased credit impaired accounts established prior to the adoption of ASU 2016-13; and~~

•~~Purchased credit deteriorated~~unearned 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.~~charges.

~~Table of Contents~~

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~~$20 million and ~~$66~~$28 million during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, respectively. Finance charges recognized from the contractual interest portion of payments received on nonaccrual finance receivables totaled ~~$3 million and $12~~$4 million during the three ~~and nine~~ months ended ~~September 30, 2020, respectively.~~March 31, 2021 and 2020. All loans in nonaccrual status are considered in our estimate of allowance for finance receivable losses.

Table of Contents

The following istables below are a summary of our ~~personal loans held for investment~~finance receivables by the year of origination and number of days delinquent, our key credit quality ~~indicator, at September 30, 2020:~~indicator:


(dollars in millions)	(dollars in millions)	2020		2019		2018		2017		2016		Prior		Total		(dollars in millions)	2021		2020		2019		2018		2017		Prior		Total

March 31, 2021																March 31, 2021
Performing	Performing															Performing
Current	Current	$	6,504	$	6,940	$	2,534	$	844	$	251	$	132	$	17,205	Current	$	2,193	$	7,488	$	4,860	$	1,703	$	500	$	224	$	16,968
30-59 days past due	30-59 days past due	36		103		45		19		7		5		215		30-59 days past due	1		62		57		22		9		6		157
60-89 days past due	60-89 days past due	20		66		28		11		4		2		131		60-89 days past due	0		47		45		17		6		4		119
Total performing	Total performing	6,560		7,109		2,607		874		262		139		17,551		Total performing	2,194		7,597		4,962		1,742		515		234		17,244
Nonperforming (Nonaccrual)	Nonperforming (Nonaccrual)															Nonperforming (Nonaccrual)
90-179 days past due	90-179 days past due	26		133		61		23		9		6		258		90-179 days past due	0		103		131		49		18		10		311
180 days or more past due	180 days or more past due	0		5		2		1		0		0		8		180 days or more past due	0		2		5		1		1		0		9
Total nonperforming	Total nonperforming	26		138		63		24		9		6		266		Total nonperforming	0		105		136		50		19		10		320
Total	Total	$	6,586	$	7,247	$	2,670	$	898	$	271	$	145	$	17,817	Total	$	2,194	$	7,702	$	5,098	$	1,792	$	534	$	244	$	17,564


(dollars in millions)	2020		2019		2018		2017		2016		Prior		Total

December 31, 2020
Performing
Current	$	8,659	$	5,691	$	2,064	$	651	$	184	$	106	$	17,355
30-59 days past due	72		106		44		18		6		5		251
60-89 days past due	44		72		28		11		4		3		162
Total performing	8,775		5,869		2,136		680		194		114		17,768
Nonperforming (Nonaccrual)
90-179 days past due	62		154		59		22		8		5		310
180 days or more past due	1		3		1		1		0		0		6
Total nonperforming	63		157		60		23		8		5		316
Total	$	8,838	$	6,026	$	2,196	$	703	$	202	$	119	$	18,084

~~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~~:

~~(dollars in millions)~~

~~Total~~

~~Performing~~

~~Current~~

~~17,550~~

~~30-59 days past due~~

~~272~~

~~60-89 days past due~~

~~181~~

~~Total performing~~

~~18,003~~

~~Nonperforming~~

~~90-179 days past due~~

~~377~~

~~180 days or more past due~~

~~Total nonperforming~~

~~386~~

~~Total~~

~~18,389~~

~~Table of Contents~~

~~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:~~


~~(dollars in millions)~~	~~December 31, 2019~~

~~Personal Loans~~
~~Carrying amount, net of allowance~~	$	40
~~Outstanding balance (a)~~	74
~~Allowance for purchased credit impaired finance receivable losses (b)~~	0

~~Real Estate Loans - Held for Sale~~
~~Carrying amount~~	$	19
~~Outstanding balance (a)~~	35

~~(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:~~

(dollars in millions) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019
Personal Loans
Balance at beginning of period $ 46 $ 39
Accretion (6) (15)
Reclassifications from nonaccretable difference * 0 16
Balance at end of period $ 40 $ 40
Real Estate Loans - Held for Sale
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

* Reclassifications from nonaccretable difference represents the increases in accretable yield resulting from higher estimated undiscounted cash flows.

~~Table of Contents~~

~~TDR~~TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES

Information regarding TDR finance receivables were as follows:

(dollars in millions) September 30, 2020 December 31, 2019

Personal Loans
TDR gross receivables (a) $ 699 $ 655
TDR net receivables (b) 701 658
Allowance for TDR finance receivable losses 321 272
Real Estate Loans - Held for Sale
TDR gross receivables (a) $ 49 $ 52
TDR net receivables (b) 49 53


(dollars in millions)	March 31, 2021		December 31, 2020




TDR gross finance receivables	$	687	$	689
TDR net finance receivables *	690		691
Allowance for TDR finance receivable losses	311		314

~~(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 finance receivables — TDR gross finance receivables net of unearned points and fees, accrued finance charges, and deferred origination costs.

TDR average net finance 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:

(dollars in millions) Personal
Loans Real Estate Loans Total

Three Months Ended September 30, 2020
TDR average net receivables $ 701 $ 49 $ 750
TDR finance charges recognized 13 1 14
Three Months Ended September 30, 2019
TDR average net receivables $ 571 $ 55 $ 626
TDR finance charges recognized 11 1 12
Nine Months Ended September 30, 2020
TDR average net receivables $ 692 $ 51 $ 743
TDR finance charges recognized 38 2 40
Nine Months Ended September 30, 2019
TDR average net receivables $ 525 $ 59 $ 584
TDR finance charges recognized 35 2 37


	Three Months Ended March 31,
(dollars in millions)	2021		2020


TDR average net finance receivables	$	691	$	676
TDR finance charges recognized	13		12

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Information regarding the new volume of the TDR finance receivables ~~held for investment~~ were as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2020		2019		2020		2019		(dollars in millions)	2021		2020

Personal Loans

Pre-modification TDR net finance receivables	Pre-modification TDR net finance receivables	$	105	$	129	$	392	$	373	Pre-modification TDR net finance receivables	$	116	$	158
Post-modification TDR net finance receivables:	Post-modification TDR net finance receivables:									Post-modification TDR net finance receivables:
Rate reduction	Rate reduction	67		86		242		257		Rate reduction	78		100
Other *	Other *	38		43		150		116		Other *	38		58
Total post-modification TDR net finance receivables	Total post-modification TDR net finance receivables	$	105	$	129	$	392	$	373	Total post-modification TDR net finance receivables	$	116	$	158
Number of TDR accounts	Number of TDR accounts	13,581		18,545		52,780		55,358		Number of TDR accounts	14,508		21,818

* “Other” modifications primarily ~~include~~consist of potential principal and interest forgiveness contingent on future payment performance by the borrower under the modified terms.

~~New volume of TDR finance~~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.~~table:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2020		2019		2020		2019		(dollars in millions)	2021		2020

Personal Loans

TDR net finance receivables *	TDR net finance receivables *	$	20	$	27	$	77	$	66	TDR net finance receivables *	$	30	$	31
Number of TDR accounts	Number of TDR accounts	2,947		4,202		11,286		10,298		Number of TDR accounts	4,183		4,552

* 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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5.4. 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 and expected recovery 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,~~March 31, 2021, our economic forecast used a reasonable and supportable period of 12 months. The ~~increase~~decrease in our allowance for finance receivable losses for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 was ~~largely~~primarily due to ~~these~~the expectation of improved unemployment and anticipated economic ~~considerations relating~~recovery from the COVID-19 pandemic. In the near-term, we may experience further changes to ~~COVID-19 along with~~ the ~~adoption of ASU 2016-13.~~macroeconomic assumptions within our forecast which could lead to further changes in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.

Changes in the allowance for finance receivable losses were as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2020		2019		2020		2019		(dollars in millions)	2021		2020

Personal Loans

Balance at beginning of period	Balance at beginning of period	$	2,324	$	744	$	829	$	731	Balance at beginning of period	$	2,269	$	829
Impact of adoption of ASU 2016-13 *	Impact of adoption of ASU 2016-13 *	—		—		1,118		—		Impact of adoption of ASU 2016-13 *	—		1,118
Provision for finance receivable losses	Provision for finance receivable losses	231		282		1,186		836		Provision for finance receivable losses	(2)		531
Charge-offs	Charge-offs	(274)		(260)		(931)		(862)		Charge-offs	(255)		(337)
Recoveries	Recoveries	43		32		122		93		Recoveries	50		41
Balance at end of period	Balance at end of period	$	2,324	$	798	$	2,324	$	798	Balance at end of period	$	2,062	$	2,182

* 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.~~losses and a corresponding cumulative reduction to retained earnings, net of tax. See Note 4 of the Notes ~~3 and 4~~ to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report for additional information on the adoption of ASU 2016-13.

~~Table of Contents~~

The allowance for finance receivable losses and net finance receivables by impairment method were as follows:

(dollars in millions) September 30, 2020 December 31, 2019
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
Finance receivables:
Collectively evaluated for impairment $ 17,116 $ 17,691
Purchased credit impaired finance receivables * 0 40
TDR finance receivables 701 658
Total $ 17,817 $ 18,389
Allowance for finance receivable losses as a percentage of finance receivables 13.05 % 4.51 %

* 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.


(dollars in millions)	March 31, 2021			December 31, 2020

Allowance for finance receivable losses:
Collectively evaluated for impairment	$	1,751		$	1,955

TDR finance receivables	311			314
Total	$	2,062		$	2,269

Finance receivables:
Collectively evaluated for impairment	$	16,874		$	17,393

TDR net finance receivables	690			691
Total	$	17,564		$	18,084

Allowance for finance receivable losses as a percentage of finance receivables	11.74		%	12.55		%


~~6. 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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7.5. 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:


(dollars in millions)	(dollars in millions)	Cost/ Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		(dollars in millions)	Cost/ Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value

September 30, 2020*
March 31, 2021*										March 31, 2021*
Fixed maturity available-for-sale securities:										Fixed maturity available-for-sale securities:
U.S. government and government sponsored entities										U.S. government and government sponsored entities	$	11	$	0	$	0	$	11
Obligations of states, municipalities, and political subdivisions										Obligations of states, municipalities, and political subdivisions	85		3		0		88
Commercial paper										Commercial paper	49		0		0		49
Non-U.S. government and government sponsored entities										Non-U.S. government and government sponsored entities	141		6		0		147
Corporate debt										Corporate debt	1,175		65		(6)		1,234
Mortgage-backed, asset-backed, and collateralized:										Mortgage-backed, asset-backed, and collateralized:
RMBS										RMBS	191		5		(1)		195
CMBS										CMBS	54		2		0		56
CDO/ABS										CDO/ABS	85		2		0		87
Total										Total	$	1,791	$	83	$	(7)	$	1,867

December 31, 2020*										December 31, 2020*
Fixed maturity available-for-sale securities:	Fixed maturity available-for-sale securities:									Fixed maturity available-for-sale securities:
U.S. government and government sponsored entities	U.S. government and government sponsored entities	$	12	$	0	$	0	$	12	U.S. government and government sponsored entities	$	12	$	0	$	0	$	12
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	81		5		0		86		Obligations of states, municipalities, and political subdivisions	87		5		0		92
Commercial paper	Commercial paper	24		0		0		24		Commercial paper	28		0		0		28
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	132		9		0		141		Non-U.S. government and government sponsored entities	137		9		0		146
Corporate debt	Corporate debt	1,106		83		(5)		1,184		Corporate debt	1,124		95		(1)		1,218
Mortgage-backed, asset-backed, and collateralized:	Mortgage-backed, asset-backed, and collateralized:									Mortgage-backed, asset-backed, and collateralized:
RMBS	RMBS	211		7		0		218		RMBS	208		7		0		215
CMBS	CMBS	61		2		0		63		CMBS	55		3		0		58
CDO/ABS	CDO/ABS	78		1		(1)		78		CDO/ABS	77		2		(1)		78
Total	Total	$	1,705	$	107	$	(6)	$	1,806	Total	$	1,728	$	121	$	(2)	$	1,847

* There was 0 allowance for credit losses related to our investment securities as of ~~September 30,~~March 31, 2021 and December 31, 2020.

(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 $ 11 $ 0 $ 0 $ 11
Obligations of states, municipalities, and political subdivisions 91 2 (1) 92
Commercial paper 91 0 0 91
Non-U.S. government and government sponsored entities 144 3 — 147
Corporate debt 1,054 45 (1) 1,098
Mortgage-backed, asset-backed, and collateralized:
RMBS 214 3 0 217
CMBS 56 1 — 57
CDO/ABS 84 1 0 85
Total $ 1,745 $ 55 $ (2) $ 1,798

* 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 EquitySecurities~~.

~~As of September 30, 2020, interest~~Interest receivables reported in “Other assets” totaled $13 ~~million. Amounts~~million and $12 million as of March 31, 2021 and December 31, 2020, respectively. There were no amounts reversed from investment revenue for available-for-sale securities ~~were immaterial.~~for the three months ended March 31, 2021 and 2020.

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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:

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 $ 3 $ 0 $ 0 $ 0 $ 3 $ 0
Commercial paper 19 0 0 0 19 0
Non-U.S. government and government sponsored entities 3 0 0 0 3 0
Corporate debt 95 (4) 5 (1) 100 (5)
Mortgage-backed, asset-backed, and collateralized:
RMBS 10 0 0 0 10 0
CMBS 21 0 0 0 21 0
CDO/ABS 21 (1) 0 0 21 (1)
Total $ 172 $ (5) $ 5 $ (1) $ 177 $ (6)
December 31, 2019*
U.S. government and government sponsored entities $ 0 $ 0 $ 3 $ 0 $ 3 $ 0
Obligations of states, municipalities, and political subdivisions 29 (1) 4 0 33 (1)
Commercial paper 76 0 0 0 76 0
Non-U.S. government and government sponsored entities 19 0 14 0 33 0
Corporate debt 63 (1) 13 0 76 (1)
Mortgage-backed, asset-backed, and collateralized:
RMBS 45 0 0 0 45 0
CMBS 15 0 7 0 22 0
CDO/ABS 14 0 0 0 14 0
Total $ 261 $ (2) $ 41 $ 0 $ 302 $ (2)


	Less Than 12 Months				12 Months or Longer				Total
(dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

March 31, 2021

Obligations of states, municipalities, and political subdivisions	$	9	$	0	$	0	$	0	$	9	$	0
Commercial paper	18		0		0		0		18		0
Non-U.S. government and government sponsored entities	12		0		1		0		13		0
Corporate debt	174		(5)		22		(1)		196		(6)
Mortgage-backed, asset-backed, and collateralized:
RMBS	38		(1)		0		0		38		(1)
CMBS	3		0		0		0		3		0
CDO/ABS	23		0		6		0		29		0
Total	$	277	$	(6)	$	29	$	(1)	$	306	$	(7)

December 31, 2020

Obligations of states, municipalities, and political subdivisions	$	2	$	0	$	0	$	0	$	2	$	0
Commercial paper	19		0		0		0		19		0
Non-U.S. government and government sponsored entities	1		0		0		0		1		0
Corporate debt	45		(1)		8		0		53		(1)
Mortgage-backed, asset-backed, and collateralized:

CMBS	8		0		0		0		8		0
CDO/ABS	17		(1)		0		0		17		(1)
Total	$	92	$	(2)	$	8	$	0	$	100	$	(2)

On a lot basis, we had ~~233~~368 and ~~398~~148 investment securities in an unrealized loss position at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, 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,~~March 31, 2021, 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,~~March 31, 2021, 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,~~March 31, 2021 and 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,~~March 31, 2021 and 2020.

~~Table of Contents~~

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,~~March 31, 2021 and 2020 totaled ~~$74~~$67 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~~$58 million, respectively. The net realized gains and losses were immaterial during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.

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Contractual maturities of fixed-maturity available-for-sale securities at ~~September 30, 2020~~March 31, 2021 were as follows:


(dollars in millions)	(dollars in millions)	Fair Value		Amortized Cost		(dollars in millions)	Fair Value		Amortized Cost

Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:	Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:					Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
Due in 1 year or less	Due in 1 year or less	$	128	$	127	Due in 1 year or less	$	176	$	175
Due after 1 year through 5 years	Due after 1 year through 5 years	605		573		Due after 1 year through 5 years	592		561
Due after 5 years through 10 years	Due after 5 years through 10 years	526		485		Due after 5 years through 10 years	593		568
Due after 10 years	Due after 10 years	188		170		Due after 10 years	168		157
Mortgage-backed, asset-backed, and collateralized securities	Mortgage-backed, asset-backed, and collateralized securities	359		350		Mortgage-backed, asset-backed, and collateralized securities	338		330
Total	Total	$	1,806	$	1,705	Total	$	1,867	$	1,791

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 $581 million and $604 million ~~and $633 million~~ at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

OTHER SECURITIES

The fair value of other securities by type was as follows:


(dollars in millions)						(dollars in millions)	March 31, 2021		December 31, 2020

(dollars in millions)		September 30, 2020		December 31, 2019

Fixed maturity other securities:	Fixed maturity other securities:					Fixed maturity other securities:
Bonds	Bonds					Bonds

Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	$	1	$	1	Non-U.S. government and government sponsored entities	$	1	$	1
Corporate debt	Corporate debt	20		24		Corporate debt	13		17
Mortgage-backed, asset-backed, and collateralized bonds	Mortgage-backed, asset-backed, and collateralized bonds	17		15		Mortgage-backed, asset-backed, and collateralized bonds	23		17
Total bonds	Total bonds	38		40		Total bonds	37		35
Preferred stock *	Preferred stock *	14		19		Preferred stock *	18		13
Common stock *	Common stock *	24		26		Common stock *	29		27
Other long-term investments		0		1

Total	Total	$	76	$	86	Total	$	84	$	75

* 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.

~~Table of Contents~~

Net unrealized gains ~~and losses~~ on other securities held were immaterial for the three ~~and nine~~ months ended ~~September 30, 2020 and 2019.~~March 31, 2021. Net unrealized losses on other securities held were $13 million for the three months ended March 31, 2020. Net realized gains and losses on other securities sold or redeemed were ~~also~~ immaterial for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.

Other securities ~~include~~primarily consist of 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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8.6. Long-term Debt

Principal maturities of long-term debt (excluding projected repayments on securitizations by period) by type of debt at ~~September 30, 2020~~March 31, 2021 were as follows:


		Senior Debt								Senior Debt
(dollars in millions)	(dollars in millions)	Securitizations		Unsecured Notes (a)		Junior Subordinated Debt (a)		Total			(dollars in millions)	Securitizations		Unsecured Notes (a)		Junior Subordinated Debt (a)			Total

Interest rates (b)	Interest rates (b)	0.95%-6.94%		5.38%-8.88%		2.03%					Interest rates (b)	0.91% - 6.94%		4.00% - 8.88%		1.99		%

Fourth quarter 2020		$	0	$	0	$	0	$	0
2021		0		635		0		635
Remainder of 2021											Remainder of 2021	$	0	$	0	$	0		$	0
2022	2022	0		992		0		992			2022	0		992		0			992
2023	2023	0		1,175		0		1,175			2023	0		1,175		0			1,175
2024	2024	0		1,300		0		1,300			2024	0		1,300		0			1,300
2025-2067		0		4,985		350		5,335
2025											2025	0		1,835		0			1,835
2026-2067											2026-2067	0		3,999		350			4,349
Securitizations (c)	Securitizations (c)	8,401		—		—		8,401			Securitizations (c)	7,424		0		0			7,424

Total principal maturities	Total principal maturities	$	8,401	$	9,087	$	350	$	17,838		Total principal maturities	$	7,424	$	9,301	$	350		$	17,075

Total carrying amount	Total carrying amount	$	8,366	$	8,993	$	172	$	17,531		Total carrying amount	$	7,394	$	9,223	$	172		$	16,789
Debt issuance costs (d)	Debt issuance costs (d)	(32)		(80)		0		(112)			Debt issuance costs (d)	$	(27)	$	(82)	$	0		$	(109)

(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.~~March 31, 2021.

(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,~~March 31, 2021, there were 0 amounts drawn under our revolving conduit facilities. See Note 97 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 $3132 million at ~~September 30, 2020~~March 31, 2021 and are reported in “Other assets.”

~~8.875% SENIOR NOTES DUE 2025 OFFERING~~Redemption of 7.75% Senior Notes Due 2021

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,~~December 9, 2020, OMFC issued a notice of full redemption of its ~~8.25%~~7.75% Senior Notes due ~~2020.~~2021. On ~~July 29, 2020,~~January 8, 2021, OMFC paid ana net aggregate amount of ~~$1.0 billion,~~$681 million, inclusive of accrued interest and premiums, to complete the redemption. In connection with the redemption, we recognized ~~$35~~$47 million of net loss on repurchases and repayments of debt ~~for~~during the three ~~and nine~~ months ended ~~September 30, 2020.~~March 31, 2021.

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9.7. 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 1110 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:


(dollars in millions)	(dollars in millions)	September 30, 2020		December 31, 2019		(dollars in millions)	March 31, 2021		December 31, 2020

Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	2	$	4	Cash and cash equivalents	$	2	$	2
Finance receivables - Personal loans		9,371		8,428
Net finance receivables						Net finance receivables	8,219		8,772
Allowance for finance receivable losses	Allowance for finance receivable losses	1,184		340		Allowance for finance receivable losses	955		1,085
Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	479		400		Restricted cash and restricted cash equivalents	553		441
Other assets	Other assets	31		29		Other assets	32		33

Liabilities	Liabilities					Liabilities
Long-term debt	Long-term debt	$	8,366	$	7,643	Long-term debt	$	7,394	$	7,789
Other liabilities	Other liabilities	16		15		Other liabilities	14		15

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~~$78 million and ~~$256~~$81 million during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 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 ~~one~~two 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 1413 revolving conduit facilities with a total maximum borrowing capacity of $7.2 billion as of ~~September 30, 2020.~~March 31, 2021. 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.~~March 31, 2021. Amounts drawn on these facilities are collateralized by our personal loans.

At ~~September 30, 2020,~~March 31, 2021, 0 amounts were drawn under these facilities.

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~~10.~~8. Insurance

Changes in the reserve for unpaid claims and loss adjustment expenses (net of reinsurance recoverables):


		At or for the Nine Months Ended September 30,					At or for the Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2020		2019		(dollars in millions)	2021		2020

Balance at beginning of period	Balance at beginning of period	$	117	$	117	Balance at beginning of period	$	148	$	117
Less reinsurance recoverables	Less reinsurance recoverables	(4)		(4)		Less reinsurance recoverables	(3)		(4)

Net balance at beginning of period	Net balance at beginning of period	113		113		Net balance at beginning of period	145		113

Additions for losses and loss adjustment expenses incurred to:	Additions for losses and loss adjustment expenses incurred to:					Additions for losses and loss adjustment expenses incurred to:
Current year	Current year	221		154		Current year	57		77
Prior years *	Prior years *	(10)		(13)		Prior years *	(18)		(9)
Total	Total	211		141		Total	39		68
Reductions for losses and loss adjustment expenses paid related to:	Reductions for losses and loss adjustment expenses paid related to:					Reductions for losses and loss adjustment expenses paid related to:
Current year	Current year	(107)		(85)		Current year	(18)		(17)
Prior years	Prior years	(60)		(57)		Prior years	(47)		(30)
Total	Total	(167)		(142)		Total	(65)		(47)

Foreign currency translation adjustment						Foreign currency translation adjustment	0		(1)
Net balance at end of period	Net balance at end of period	157		112		Net balance at end of period	119		133
Plus reinsurance recoverables	Plus reinsurance recoverables	3		3		Plus reinsurance recoverables	3		3

Balance at end of period	Balance at end of period	$	160	$	115	Balance at end of period	$	122	$	136

* Reflects (i) a redundancy in the prior years’ net reserves of ~~$10~~$18 million at ~~September 30, 2020,~~March 31, 2021, primarily due to favorable development of credit ~~life, term life,~~disability and ~~credit disability~~unemployment claims during the period, and (ii) a redundancy in the prior years’ net reserves of ~~$13~~$9 million at ~~September 30, 2019,~~March 31, 2020, primarily due to a favorable development of credit life, ~~disability,~~term life, and ~~unemployment~~credit disability claims during the period.


~~11.~~9. Capital Stock and Earnings Per Share (OMH Only)

CAPITAL STOCK

OMH has 2 classes of authorized capital stock: preferred stock and common stock. OMFC has 2 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~~allows 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.

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Changes in OMH shares of common stock issued and outstanding were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Balance at beginning of period 134,319,171 136,089,417 136,101,156 135,832,278
Common shares issued 3,842 6,257 253,555 263,396
Common shares retired 0 0 (2,031,698) 0
Balance at end of period 134,323,013 136,095,674 134,323,013 136,095,674


	Three Months Ended March 31,
	2021	2020

Balance at beginning of period	134,341,724	136,101,156
Common shares issued	135,372	240,249
Common shares retired	0	(2,031,698)
Balance at end of period	134,477,096	134,309,707

EARNINGS PER SHARE (OMH ONLY)

The computation of earnings per share was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in millions, except per share data)	(dollars in millions, except per share data)	2020		2019		2020		2019		(dollars in millions, except per share data)	2021		2020

Numerator (basic and diluted):	Numerator (basic and diluted):									Numerator (basic and diluted):
Net income	Net income	$	250	$	248	$	371	$	594	Net income	$	413	$	32
Denominator:	Denominator:									Denominator:
Weighted average number of shares outstanding (basic)	Weighted average number of shares outstanding (basic)	134,321,929		136,095,481		134,847,170		136,060,832		Weighted average number of shares outstanding (basic)	134,405,368		135,909,100
Effect of dilutive securities *	Effect of dilutive securities *	185,620		280,570		152,317		211,559		Effect of dilutive securities *	401,797		229,577
Weighted average number of shares outstanding (diluted)	Weighted average number of shares outstanding (diluted)	134,507,549		136,376,051		134,999,487		136,272,391		Weighted average number of shares outstanding (diluted)	134,807,165		136,138,677
Earnings per share:	Earnings per share:									Earnings per share:
Basic	Basic	$	1.86	$	1.82	$	2.75	$	4.36	Basic	$	3.07	$	0.24
Diluted	Diluted	$	1.86	$	1.82	$	2.75	$	4.36	Diluted	$	3.06	$	0.24

* We have excluded weighted-average unvested restricted stock units totaling ~~256,034~~133,004 and ~~184,997~~214,752 for the three months ended ~~September 30,~~March 31, 2021 and 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.~~restricted stock units.

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~~12.~~10. Accumulated Other Comprehensive Income (Loss)

Changes, net of tax, in accumulated other comprehensive income (loss) were as follows:


(dollars in millions)	(dollars in millions)	Unrealized Gains (Losses) Available-for-Sale Securities *		Retirement Plan Liabilities Adjustments		Foreign Currency Translation Adjustments		Total Accumulated Other Comprehensive Income (Loss)		(dollars in millions)	Unrealized Gains (Losses) Available-for-Sale Securities (a)		Retirement Plan Liabilities Adjustments		Foreign Currency Translation Adjustments		Other (b)		Total Accumulated Other Comprehensive Income (Loss)

Three Months Ended September 30, 2020
Three Months Ended March 31, 2021										Three Months Ended March 31, 2021
Balance at beginning of period	Balance at beginning of period	$	66	$	3	$	(4)	$	65	Balance at beginning of period	$	91	$	1	$	2	$	0	$	94
Other comprehensive income before reclassifications		12		0		2		14
Other comprehensive income (loss) before reclassifications										Other comprehensive income (loss) before reclassifications	(33)		0		2		17		(14)

Balance at end of period	Balance at end of period	$	78	$	3	$	(2)	$	79	Balance at end of period	$	58	$	1	$	4	$	17	$	80

Three Months Ended September 30, 2019
Three Months Ended March 31, 2020										Three Months Ended March 31, 2020
Balance at beginning of period	Balance at beginning of period	$	30	$	(3)	$	1	$	28	Balance at beginning of period	$	41	$	3	$	0	$	0	$	44
Other comprehensive income (loss) before reclassifications		11		0		(1)		10

Balance at end of period		$	41	$	(3)	$	0	$	38

Nine Months Ended September 30, 2020
Balance at beginning of period		$	41	$	3	$	0	$	44
Other comprehensive income (loss) before reclassifications		38		0		(2)		36
Reclassification adjustments from accumulated other comprehensive income		(1)		0		0		(1)
Balance at end of period		$	78	$	3	$	(2)	$	79

Nine Months Ended September 30, 2019
Balance at beginning of period		$	(28)	$	(3)	$	(3)	$	(34)
Other comprehensive income before reclassifications		69		0		3		72

Other comprehensive loss before reclassifications										Other comprehensive loss before reclassifications	(42)		0		(8)		0		(50)

Balance at end of period	Balance at end of period	$	41	$	(3)	$	0	$	38	Balance at end of period	$	(1)	$	3	$	(8)	$	0	$	(6)

*(a) There were 0 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,~~March 31, 2021 and 2020.

(b) Other primarily includes changes in the fair value of our mark-to-market derivative instruments that have been designated as cash flow hedges.

Reclassification adjustments from accumulated other comprehensive income (loss) to the applicable line item on our condensed consolidated statements of operations were immaterial for the three months ended March 31, 2021 and 2020.

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~~13.~~11. Income Taxes

We had a net deferred tax asset of ~~$440~~$349 million and ~~$104~~$405 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. The ~~increase~~decrease in our net deferred tax asset of ~~$336~~$56 million was primarily due to the tax effect of the ~~increase~~decrease 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~~decrease due to 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~~three months ended ~~September 30, 2020~~March 31, 2021 was ~~26.1%~~24.4%, compared to ~~21.3%~~24.3% for the same period in ~~2019.~~2020. The effective tax rate for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 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~~2014 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~~$10 million at ~~September 30, 2020~~March 31, 2021 and ~~$12 million at~~ December 31, ~~2019.~~2020. 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,~~During 2020, the ~~Coronarvirus~~Coronavirus Aid, Relief, and Economic Security Act ~~(“CARES~~(the “CARES Act”) and the Consolidated Appropriations Act of 2021 (the “CAA”) were signed into law. During 2021, the American Rescue Plan Act of 2021 (the “ARPA”) was signed into law. ~~The CARES Act, among~~Among other things, ~~includes~~the provisions ~~relating~~of these laws relate 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, the CAA, or the ARPA will have a material impact on our consolidated financial statements. We will continue to monitor legislative developments related to the COVID-19 pandemic.


~~14.~~12. 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.

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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.

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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.


~~15.~~13. Segment Information

At ~~September 30, 2020,~~March 31, 2021, 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 1918 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our ~~2019~~ Annual ~~Report on Form 10-K.~~

Report.

The following tables present information about C&I and Other, as well as reconciliations to the consolidated financial statement amounts.


(dollars in millions)	(dollars in millions)	Consumer and Insurance		Other		Segment to GAAP Adjustment		Consolidated Total		(dollars in millions)	Consumer and Insurance		Other		Segment to GAAP Adjustment		Consolidated Total

Three Months Ended September 30, 2020
At or for the Three Months Ended March 31, 2021										At or for the Three Months Ended March 31, 2021
Interest income	Interest income	$	1,086	$	1	$	2	$	1,089	Interest income	$	1,057	$	1	$	2	$	1,060
Interest expense	Interest expense	250		1		4		255		Interest expense	233		1		1		235
Provision for finance receivable losses	Provision for finance receivable losses	232		0		(1)		231		Provision for finance receivable losses	(3)		0		1		(2)
Net interest income after provision for finance receivable losses	Net interest income after provision for finance receivable losses	604		0		(1)		603		Net interest income after provision for finance receivable losses	827		0		0		827
Other revenues	Other revenues	99		4		(2)		101		Other revenues	98		3		(10)		91
Other expenses	Other expenses	352		6		5		363		Other expenses	358		6		8		372
Income (loss) before income tax expense (benefit)	Income (loss) before income tax expense (benefit)	$	351	$	(2)	$	(8)	$	341	Income (loss) before income tax expense (benefit)	$	567	$	(3)	$	(18)	$	546

Assets										Assets	$	19,194	$	57	$	2,034	$	21,285

Three Months Ended September 30, 2019
Interest income $ 1,060 $ 2 $ 3 $ 1,065
Interest expense 238 1 5 244
Provision for finance receivable losses 277 0 5 282
Net interest income after provision for finance receivable losses 545 1 (7) 539
Other revenues 152 5 (1) 156
Other expenses 385 8 5 398
Income (loss) before income tax expense (benefit) $ 312 $ (2) $ (13) $ 297




At or for the Three Months Ended March 31, 2020
Interest income	$	1,101	$	2	$	3	$	1,106
Interest expense	249		1		5		255
Provision for finance receivable losses	530		0		1		531
Net interest income after provision for finance receivable losses	322		1		(3)		320
Other revenues	136		4		1		141
Other expenses	407		6		5		418
Income (loss) before income tax expense (benefit)	$	51	$	(1)	$	(7)	$	43

Assets	$	22,570	$	72	$	2,051	$	24,693

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(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 $ 3,260 $ 4 $ 9 $ 3,273
Interest expense 765 3 13 781
Provision for finance receivable losses 1,184 0 2 1,186
Net interest income after provision for finance receivable losses 1,311 1 (6) 1,306
Other revenues 380 12 (2) 390
Other expenses 1,161 18 15 1,194
Income (loss) before income tax expense (benefit) $ 530 $ (5) $ (23) $ 502
Assets $ 19,743 $ 63 $ 2,051 $ 21,857

At or for the Nine Months Ended September 30, 2019
Interest income $ 3,013 $ 7 $ 0 $ 3,020
Interest expense 700 4 13 717
Provision for finance receivable losses 816 0 20 836
Net interest income after provision for finance receivable losses 1,497 3 (33) 1,467
Other revenues * 442 26 (8) 460
Other expenses 1,125 31 16 1,172
Income (loss) before income tax expense (benefit) $ 814 $ (2) $ (57) $ 755
Assets $ 20,276 $ 82 $ 2,052 $ 22,410

* ~~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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~~16.~~14. Fair Value Measurements

The accounting policies of our ~~Fair Value Measurements~~fair value measurements are the same as those disclosed in Note 3 and Note 2019 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our ~~2019~~ Annual ~~Report on Form 10-K.~~Report.

The following table presents the carrying amounts and estimated fair values of our financial instruments and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:


		Fair Value Measurements Using						Total Fair Value				Total Carrying Value					Fair Value Measurements Using									Total Fair Value			Total Carrying Value
(dollars in millions)	(dollars in millions)	Level 1		Level 2		Level 3				(dollars in millions)				Level 1				Level 2			Level 3

September 30, 2020
March 31, 2021														March 31, 2021
Assets	Assets													Assets
Cash and cash equivalents	Cash and cash equivalents	$	1,944	$	0	$	0			$	1,944				$	1,944	Cash and cash equivalents		$	1,298		$	3		$	0		$	1,301		$	1,301
Investment securities	Investment securities	42		1,833		7		1,882				1,882		Investment securities			52			1,891			8			1,951			1,951
Net finance receivables, less allowance for finance receivable losses	Net finance receivables, less allowance for finance receivable losses	0		0		18,176		18,176				15,493		Net finance receivables, less allowance for finance receivable losses			0			0			18,447			18,447			15,502

Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	497		0		0		497				497		Restricted cash and restricted cash equivalents			571			0			0			571			571
Other assets *	Other assets *	0		0		62		62				62		Other assets *			0			3			57			60			60

Liabilities	Liabilities													Liabilities
Long-term debt	Long-term debt	$	0	$	18,702	$	0	$	18,702			$	17,531	Long-term debt			$	0		$	18,082		$	0		$	18,082		$	16,789

December 31, 2019
December 31, 2020														December 31, 2020
Assets	Assets													Assets
Cash and cash equivalents	Cash and cash equivalents	$	1,159	$	68	$	0	$	1,227			$	1,227	Cash and cash equivalents			$	2,255		$	17		$	0		$	2,272		$	2,272
Investment securities	Investment securities	45		1,835		4		1,884				1,884		Investment securities			44			1,870			8			1,922			1,922
Net finance receivables, less allowance for finance receivable losses	Net finance receivables, less allowance for finance receivable losses	0		0		19,319		19,319				17,560		Net finance receivables, less allowance for finance receivable losses			0			0			18,629			18,629			15,815

Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	405		0		0		405				405		Restricted cash and restricted cash equivalents			451			0			0			451			451
Other assets *	Other assets *	0		0		84		84				74		Other assets *			0			2			60			62			62

Liabilities	Liabilities													Liabilities
Long-term debt	Long-term debt	$	0	$	18,509	$	0	$	18,509			$	17,212	Long-term debt			$	0		$	19,426		$	0		$	19,426		$	17,800

*Other assets at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019 includes~~2020 primarily consists of finance receivables held for ~~sale and miscellaneous receivables related to our liquidating loan portfolios.~~sale.

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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:


		Fair Value Measurements Using						Total Carried At Fair Value			Fair Value Measurements Using						Total Carried At Fair Value
(dollars in millions)	(dollars in millions)	Level 1		Level 2		Level 3				(dollars in millions)	Level 1		Level 2		Level 3

September 30, 2020
March 31, 2021										March 31, 2021
Assets	Assets									Assets
Cash equivalents in mutual funds	Cash equivalents in mutual funds	$	1,534	$	0	$	0	$	1,534	Cash equivalents in mutual funds	$	881	$	0	$	0	$	881

Cash equivalents in securities										Cash equivalents in securities	0		3		0		3
Investment securities:	Investment securities:									Investment securities:
Available-for-sale securities	Available-for-sale securities									Available-for-sale securities

U.S. government and government sponsored entities	U.S. government and government sponsored entities	0		12		0		12		U.S. government and government sponsored entities	0		11		0		11
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	0		86		0		86		Obligations of states, municipalities, and political subdivisions	0		88		0		88
Commercial paper	Commercial paper	0		24		0		24		Commercial paper	0		49		0		49
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	0		141		0		141		Non-U.S. government and government sponsored entities	0		147		0		147
Corporate debt	Corporate debt	5		1,179		0		1,184		Corporate debt	5		1,223		6		1,234
RMBS	RMBS	0		212		6		218		RMBS	0		195		0		195
CMBS	CMBS	0		63		0		63		CMBS	0		56		0		56
CDO/ABS	CDO/ABS	0		78		0		78		CDO/ABS	0		87		0		87

Total available-for-sale securities	Total available-for-sale securities	5		1,795		6		1,806		Total available-for-sale securities	5		1,856		6		1,867
Other securities	Other securities									Other securities

Bonds:	Bonds:									Bonds:

Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	0		1		0		1		Non-U.S. government and government sponsored entities	0		1		0		1
Corporate debt	Corporate debt	0		20		0		20		Corporate debt	0		12		1		13
RMBS	RMBS	0		1		0		1		RMBS	0		1		0		1

CDO/ABS	CDO/ABS	0		16		0		16		CDO/ABS	0		21		1		22
Total bonds	Total bonds	0		38		0		38		Total bonds	0		35		2		37
Preferred stock	Preferred stock	14		0		0		14		Preferred stock	18		0		0		18
Common stock	Common stock	23		0		1		24		Common stock	29		0		0		29

Total other securities	Total other securities	37		38		1		76		Total other securities	47		35		2		84
Total investment securities	Total investment securities	42		1,833		7		1,882		Total investment securities	52		1,891		8		1,951

Restricted cash equivalents in mutual funds	Restricted cash equivalents in mutual funds	487		0		0		487		Restricted cash equivalents in mutual funds	560		0		0		560
Total	Total	$	2,063	$	1,833	$	7	$	3,903	Total	$	1,493	$	1,894	$	8	$	3,395

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		Fair Value Measurements Using						Total Carried At Fair Value			Fair Value Measurements Using						Total Carried At Fair Value
(dollars in millions)	(dollars in millions)	Level 1		Level 2		Level 3				(dollars in millions)	Level 1		Level 2		Level 3

December 31, 2019
December 31, 2020										December 31, 2020
Assets	Assets									Assets
Cash equivalents in mutual funds	Cash equivalents in mutual funds	$	775	$	0	$	0	$	775	Cash equivalents in mutual funds	$	2,018	$	0	$	0	$	2,018
Cash equivalents in securities	Cash equivalents in securities	0		68		0		68		Cash equivalents in securities	0		17		0		17
Investment securities:	Investment securities:									Investment securities:
Available-for-sale securities	Available-for-sale securities									Available-for-sale securities

U.S. government and government sponsored entities	U.S. government and government sponsored entities	0		11		0		11		U.S. government and government sponsored entities	0		12		0		12
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	0		92		0		92		Obligations of states, municipalities, and political subdivisions	0		92		0		92
Certificates of deposit and commercial paper	Certificates of deposit and commercial paper	0		91		0		91		Certificates of deposit and commercial paper	0		28		0		28
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	0		147		0		147		Non-U.S. government and government sponsored entities	0		146		0		146
Corporate debt	Corporate debt	5		1,093		0		1,098		Corporate debt	5		1,207		6		1,218
RMBS	RMBS	0		217		0		217		RMBS	0		215		0		215
CMBS	CMBS	0		57		0		57		CMBS	0		58		0		58
CDO/ABS	CDO/ABS	0		85		0		85		CDO/ABS	0		78		0		78

Total available-for-sale securities	Total available-for-sale securities	5		1,793		0		1,798		Total available-for-sale securities	5		1,836		6		1,847
Other securities	Other securities									Other securities

Bonds:	Bonds:									Bonds:
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	0		1		0		1		Non-U.S. government and government sponsored entities	0		1		0		1
Corporate debt	Corporate debt	0		23		1		24		Corporate debt	0		16		1		17
RMBS		0		1		0		1

CDO/ABS	CDO/ABS	0		12		2		14		CDO/ABS	0		17		0		17
Total bonds	Total bonds	0		37		3		40		Total bonds	0		34		1		35
Preferred stock	Preferred stock	14		5		0		19		Preferred stock	13		0		0		13
Common stock	Common stock	26		0		0		26		Common stock	26		0		1		27
Other long-term investments		0		0		1		1

Total other securities	Total other securities	40		42		4		86		Total other securities	39		34		2		75
Total investment securities	Total investment securities	45		1,835		4		1,884		Total investment securities	44		1,870		8		1,922
Restricted cash equivalents in mutual funds	Restricted cash equivalents in mutual funds	403		0		0		403		Restricted cash equivalents in mutual funds	441		0		0		441
Total	Total	$	1,223	$	1,903	$	4	$	3,130	Total	$	2,503	$	1,887	$	8	$	4,398

Due to the insignificant activity within the Level 3 assets during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 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~~during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.

FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS

See Note 2019 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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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

An index to our management’s discussion and analysis follows:

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Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but instead represent only management’s current beliefs regarding future events. By their nature, forward-looking statements are subject to risks, uncertainties, assumptions, and other important factors that may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake any obligation to update or revise these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments, or otherwise, except as required by law. Forward-looking statements include, without limitation, statements concerning future plans, objectives, goals, projections, strategies, events, or performance, and underlying assumptions and other statements related thereto. Statements preceded by, followed by or that otherwise include the words “anticipates,” “appears,” “are likely,” “believes,” “estimates,” “expects,” “foresees,” “intends,” “plans,” “projects,” and similar expressions or future or conditional verbs such as “would,” “should,” “could,” “may,” or “will” are intended to identify forward-looking statements. Important factors that could cause actual results, performance, or achievements to differ materially from those expressed in or implied by forward-looking statements include, without limitation, the following:

•adverse changes in general economic conditions, including the interest rate environment and the financial markets;

•risks associated with the global outbreak of a novel strain of coronavirus (“COVID-19”) or any additional strains of COVID-19 ~~pandemic~~ and the mitigation efforts by governments and related effects on us, our customers, and employees;

•our estimates of the allowance for finance receivable losses may not be adequate to absorb actual losses, causing our provision for finance receivable losses to increase, which would adversely affect our results of operations;

•increased levels of unemployment and personal bankruptcies;

•adverse changes in the rate at which we can collect or potentially sell our finance receivables portfolio;

•natural or accidental events such as earthquakes, hurricanes, tornadoes, fires, or floods affecting our customers, collateral, or our branches or other operating facilities;

•war, acts of terrorism, riots, civil disruption, pandemics, disruptions in the operation of our information systems, or other events disrupting business or commerce;

•risks related to the acquisition or sale of assets or businesses or the formation, termination, or operation of joint ventures or other strategic alliances, including increased loan delinquencies or net charge-offs, integration or migration issues, increased costs of servicing, incomplete records, and retention of customers;

•a failure in or breach of our operational or security systems or infrastructure or those of third parties, including as a result of cyber-attacks, or other cyber-related incidents involving the loss, theft or unauthorized disclosure of personally identifiable information ~~or “PII,”~~(“PII”) of our present or former customers;

•our credit risk scoring models may be inadequate to properly assess the risk of customer unwillingness or lack of capacity to repay;

•adverse changes in our ability to attract and retain employees or key executives to support our businesses;

•increased competition, or changes in customer responsiveness to our distribution channels, an inability to make technological improvements, and the ability of our competitors to offer a more attractive range of personal loan products than we offer;

•changes in federal, state, or local laws, regulations, or regulatory policies and practices that adversely affect our ability to conduct business or the manner in which we currently are permitted to conduct business, such as licensing requirements, pricing limitations or restrictions on the method of offering products, as well as changes that may result from increased regulatory scrutiny of the sub-prime lending industry, our use of third-party vendors and real estate loan servicing, or changes in corporate or individual income tax laws or regulations, including effects of the Tax Act, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Consolidated Appropriations Act of 2021 (the “CAA”), and the ~~CARES Act;~~American Rescue Plan Act of 2021 (the “ARPA”);

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•risks associated with our insurance operations, including insurance claims that exceed our expectations or insurance losses that exceed our reserves;

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•our inability to successfully implement our growth strategy for our consumer lending business or successfully acquire portfolios of ~~personal loans;~~finance receivables;

•a change in the proportion of secured loans may affect our ~~personal loan~~finance receivables and portfolio yield;

•declines in collateral values or increases in actual or projected delinquencies or net charge-offs;

•potential liability relating to finance receivables which we have sold or securitized or may sell or securitize in the future if it is determined that there was a non-curable breach of a representation or warranty made in connection with such transactions;

•the costs and effects of any actual or alleged violations of any federal, state, or local laws, rules or regulations, including any associated litigation and damage to our reputation;

•the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority and any associated litigation and damage to our reputation;

•our continued ability to access the capital markets and maintain adequate current sources of funds to satisfy our cash flow requirements;

•our ability to comply with our debt covenants;

•our ability to generate sufficient cash to service all of our indebtedness;

•any material impairment or write-down of the value of our assets;

•the ownership of OMH's common stock continues to be highly concentrated, which may prevent other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest;

•the effects of any downgrade of our debt ratings by credit rating agencies, which could have a negative impact on our cost of and/or access to capital;

•our substantial indebtedness, which could prevent us from meeting our obligations under our debt instruments and limit our ability to react to changes in the economy or our industry or our ability to incur additional borrowings;

•our ability to maintain sufficient capital levels in our regulated and unregulated subsidiaries;

•changes in accounting standards or tax policies and practices and the application of such new standards, policies and practices; and

•management estimates and assumptions, including estimates and assumptions about future events, may prove to be incorrect.

We also direct readers to the other risks and uncertainties discussed in other documents we file with the SEC.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. You should specifically consider the factors identified in this report and in the documents we file with the SEC, including our ~~2019~~ Annual Report, ~~on Form 10-K,~~ that could cause actual results to differ before making an investment decision to purchase our securities and should not place undue reliance on any of our forward-looking statements. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

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Overview

We are a leading provider of responsible personal loan products, primarily to non-prime customers. Our network of approximately 1,500 branch offices in 44 states is staffed with expert personnel and is complemented by our centralized operations and ~~digital presence through online lending. Our~~our digital platform, which provides current and prospective customers the option of applying for a personal loan via our website, www.omf.com. The information on our website is not incorporated by reference into this report. In connection with our personal loan business, our insurance subsidiaries offer our customers optional credit and non-credit insurance, and other products.

In addition to our loan originations, and insurance and other product sales activities, we service loans owned by us and service loans owned by third parties; pursue strategic acquisitions and dispositions of assets and businesses, including loan portfolios or other financial assets; and may establish joint ventures or enter into other strategic alliances.

OUR PRODUCTS

Our product offerings include:

•Personal Loans — We offer personal loans through our branch network, centralized operations, and our website, www.omf.com, to customers who generally need timely access to cash. Our personal loans are non-revolving, with a fixed-rate, fixed terms generally between three and six years, and are secured by automobiles, other titled collateral, or are unsecured. At ~~September 30, 2020,~~March 31, 2021, we had approximately 2.23 million personal loans, of which 52% were secured by titled property, totaling $17.6 billion of net finance receivables, compared to approximately 2.30 million personal loans, of which 53% were secured by titled property, ~~representing $17.8 billion of net finance receivables, compared to approximately 2.44 million personal loans, of which 52% were secured by titled property,~~ totaling ~~$18.4~~$18.1 billion at December 31, ~~2019.~~2020.

•Insurance Products — We offer our customers optional credit insurance products (life insurance, disability insurance, and involuntary unemployment insurance) and optional non-credit insurance products through both our branch network and our centralized operations. Credit insurance and non-credit insurance products are provided by our affiliated insurance companies. We offer GAP coverage as a waiver product or insurance. We also offer optional ~~home and auto~~ membership plans offrom an unaffiliated company.

Our non-originating legacy products include:

•Other Receivables — We ceased originating real estate loans in 2012 and we continue to service or sub-service liquidating real estate loans. Effective September 30, 2018, our real estate loans previously classified as other receivables were transferred from held for investment to held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. Effective March 31, 2020, our real estate loans held for sale are reported in “Other assets” of our consolidated balance sheets.

OUR SEGMENT

~~Beginning in the fourth quarter of 2019,~~At March 31, 2021, 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. See Note 1513 of the Notes to the Condensed Consolidated Financial Statements included in this report for more information about our segment.

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Recent Developments and Outlook

RECENT DEVELOPMENTS

Management’s Response to the COVID-19 Pandemic

COVID-19 ~~has~~ evolved into a global pandemic, ~~and has resulted~~resulting in widespread volatility and deterioration in economic conditions across the United States. Governmental authorities ~~have taken a number of~~continue to take steps to combat ~~or slow~~ the spread of COVID-19, including ~~shutdowns~~the distribution of ~~non-essential businesses, implementing stay-at-home orders, promoting social distancing measures,~~COVID-19 vaccines, which over time are designed to create “herd immunity” and ~~other actions which~~diminish, if not eliminate, the crisis. At this time, the vaccination program has accelerated in many states to allow all adults to receive the vaccines. In the meantime, we have ~~disrupted economic activity. We have been~~continued to focus on assisting and ~~will continue to be focused on helping~~supporting our customers and employees, through these difficult times. We are generally classified as an “essential business” by government authorities because we play a vital role in providing personal loans to hardworking Americans in hundreds of local communities. Our long track record of a strong balance sheet and liquidity profile, disciplined underwriting, and focus on our customers, allows us to remain well positioned to address the economic uncertainties, as well as take advantage of opportunities for growth as the economy recovers. Although we cannot predict how quickly and/or broadly the economy will recover, we will continue to:

•~~Maintain strong capital and liquidity:~~ We have maintained a strong balance sheet and liquidity profile as a result of numerous actions taken over the last several years, such as deleveraging, increasing the available borrowing capacity under our revolving conduit facilities, diversifying our funding mix, and extending our unsecured debt maturities. Our cash and cash equivalents, together with our potential borrowings under our revolving conduit facilities, provide a liquidity runway through 2022 under numerous stress scenarios, assuming no accesswhile remaining committed to the ~~capital markets. This liquidity runway calculation contemplates all the cash needs of the Company.~~

•~~Continue to enhance our underwriting:~~ We quickly took steps to tighten underwriting standards and reduce originations to higher risk categories of lending and continue to monitor and evaluate our underwriting standards as we further understand the evolving impacts the COVID-19 pandemic is having on local-level economies. We are using our decades of experience and proprietary data to serve our customers while maintaining an appropriately conservative portfolio risk-management program.

•~~Focus on serving our customers:~~ Our top priority is to service and care for our current customers. We actively engaged with other lenders to put forward solutions to help our customers through this difficult time. We took steps to enhance our servicing capacity by shifting branch team members toward a greater focus on servicing existing loans. Beginning in late March, we increased proactive outreach to customers, offering to support them through our borrower assistance programs, which included reduced and deferred payment options, waiving of late fees, and temporary suspension in credit bureau reporting.

•~~Deploy business continuity plans:~~ ~~We deployed our existing business continuity plans which are designed to ensure operational flexibility, including the ability~~safety of our employees to work remotely. Our hybrid operating model, with fully scaled branch and central operations teams, can dynamically reroute application and servicing capabilities to service centers and branches across the United States. Although a small number of branches were temporarily closed, primarily for deep cleanings or due to government mandates, and subsequently reopened, all of our teams, both branch and central operations, remain operational today.employees. We continue to serve our customers ~~while maintaining social distancing~~by keeping our branch locations open with appropriate protective protocols in place and ~~other safety protocols. Additionally,~~through our digital closing solutions. This combination has enhanced our operating performance through the pandemic and enabled us to serve and support our customers effectively during these unprecedented times. We believe the actions we have ~~accelerated our digital origination strategy~~taken and ~~have digitally originated more than 30%~~the underlying strength of our ~~personal loans in~~balance sheet positions us to take advantage of growth opportunities as the ~~second and third quarters.~~economy continues to recover.

Redemption of 7.75% Senior Notes due 2021

On January 8, 2021, OMFC paid a net aggregate amount of $681 million, inclusive of accrued interest and premiums, to complete the redemption of its 7.75% Senior Notes due 2021. For further information regarding the ~~impact~~redemption of ~~COVID-19 on~~ our ~~business, results~~unsecured debt, see Note 6 of ~~operations, and liquidity and capital resources, see “Outlook” and “Results of Operations” under Management’s Discussion and Analysis of~~the Notes to the Condensed Consolidated Financial ~~Condition and Results of Operations~~Statements included in this report.

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Cash Dividends to OMH's Common Stockholders

On ~~October 26, 2020,~~February 8, 2021, OMH declared a dividend of ~~$0.45~~$3.95 per share payable on ~~November 17, 2020~~February 25, 2021 to record holders of OMH's common stock as of the close of business on ~~November 9, 2020.~~February 18, 2021. For information regarding the quarterly dividends declared by OMH, see “Liquidity and Capital Resources” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.

~~Issuance of 8.875% Senior Notes Due 2025 and Redemption of 8.25% Senior Notes due 2020~~Apollo-Värde Group Share Sale

On ~~May 14, 2020, OMFC issued a total~~February 11, 2021, we entered into an underwriting agreement with certain entities managed by affiliates of ~~$600 million~~Apollo-Värde Group, in their capacities as selling stockholders (together, the “Selling Stockholders”), and Barclays Capital Inc. and Citigroup Global Markets Inc., as representatives of ~~aggregate principal amount~~the several underwriters (the “Underwriters”), for the sale by the Selling Stockholders of ~~8.875% Senior Notes due 2025.~~up to 9,200,000 shares of the OMH’s common stock, which included an option for the Underwriters to purchase up to 1,200,000 shares of the common stock. The shares sold by the Selling Stockholders were beneficially owned by the Apollo-Värde Group. On February 12, 2021, the Underwriters exercised in full their option to purchase additional shares of common stock, and on February 16, 2021, the offering and sale of 9,200,000 shares by the Selling Stockholders to the Underwriters was completed. We did not receive any proceeds from the sale of the shares by the Selling Stockholders.

~~On July 29, 2020, OMFC paid an aggregate amount of $1.0 billion, inclusive of accrued interest and premiums, to complete the redemption of its 8.25% Senior Notes due 2020.~~Share Repurchase Program

In the second quarter of 2021, the Company announced plans to commence a $150 million share repurchase program. For ~~further~~ information regarding the ~~issuance and redemption of our unsecured debt, see Note 8 of the Notes to the Condensed Consolidated Financial Statements included in this report.~~

~~Securitization Transactions Completed: OMFIT 2020-1 and OMFIT 2020-2~~

~~On May 1, 2020, we completed a private securitization in which OMFIT 2020-1 issued $821 million principal amount of notes backed by personal loans.~~

~~On August 21, 2020, we completed a private securitization in which OMFIT 2020-2 issued $1.0 billion principal amount of notes backed by personal loans.~~

~~For further information regarding the issuances of our secured debt,~~share repurchase program, see “Liquidity and Capital ~~Resources—Securitized Borrowings”~~Resources” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.

~~Stock Repurchase Program~~

~~For information regarding the stock repurchase program, see Note 11 of the Notes to the Condensed Consolidated Financial Statements included in this report.~~

~~Appointment of Member of the OMFC Board of Directors and Executive Vice President of OMFC~~

On January 2, 2020, Adam L. Rosman was appointed to the OMFC Board of Directors and as Executive Vice President. Mr. Rosman replaced John C. Anderson, who resigned as a member of OMFC's board of directors and as Executive Vice President on January 2, 2020.

~~Appointment of Chairman of the OMH Board of Directors~~

On August 28, 2020, Jay N. Levine resigned as Director and Chairman of the OMH Board of Directors, effective December 31, 2020. Mr. Levine’s resignation was not the result of any dispute or disagreement with the Company or the Company’s board on any matter relating to the operations, policies or practices of the Company. The OMH Board of Directors elected Douglas H. Shulman as Chairman of the Board, replacing Mr. Levine, effective December 31, 2020.

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OUTLOOK

~~We continue to manage~~While we are actively managing the impacts of the COVID-19 pandemic and are prepared to face any additional challenges that may impact our ~~industry. We~~industry, we expect near-term impacts to continue to affect our ~~originations, loan loss reserves, and involuntary unemployment insurance claims.~~originations. The ultimate impact on our financial condition and results of operations depends on the ~~rates~~speed of ~~unemployment,~~the economic recovery, driven by distribution and effectiveness of the COVID-19 vaccines, government stimulus measures, ~~state reopenings,~~states reopening, and ~~the speed of economic recovery.~~ultimately unemployment rates. There is also uncertainty regarding the effects of ~~a secondary outbreak~~additional strains of COVID-19 and the impact of any related ~~potential for additional shutdowns over~~government actions, including the ~~near-term.~~recently enacted American Rescue Plan Act of 2021. To the extent economies are suppressed or slow to recover, ~~even with additional government stimulus measures,~~ we could see lower consumer demand, higher delinquency trends, ~~during the remainder of 2020~~ and related ~~losses~~losses. We will continue to ~~be realized in 2021. We may~~ incorporate ~~further changes to the macroeconomic assumptions within our forecast used in our credit loss allowance model,~~updates, as ~~well as changes~~necessary, to our ~~loan loss performance outlook, both of~~macroeconomic assumptions which could lead to further ~~changes~~adjustments in our allowance for ~~loan~~finance receivable losses, ~~reserve rate,~~allowance ratio, and provision ~~expense.~~for finance receivable losses.

~~The full extent to~~To further expand the ways in which the COVID-19 pandemic will impact our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19 and the mitigation efforts by government entities, as well as our own continuing COVID-19 operational response. We have taken and will continue to take active and decisive steps in this time of uncertainty and remain committed to the safety of our employees, while also continuing to servewe help our customers ~~by remaining open with appropriate protective protocols in place. While~~improve their financial well-being, on April 26, 2021, we ~~anticipate~~announced that ~~the economic recovery could be unstable,~~ we ~~believe we are well-positioned~~have entered into an agreement to ~~face these challenges and are prepared for future growth opportunities. We have served hard working Americans for many decades, through both changing economic~~acquire Trim, a customer-focused financial wellness fintech company. The acquisition of Trim, subject to completion of standard closing conditions, ~~and natural disasters, and~~ will ~~continue~~enhance OneMain’s digital features designed to help its customers progress to a better financial future.

Our experienced management team continues to remain focused on our strategic priorities of ~~strong~~maintaining a solid balance sheet, providing a flexible liquidity runway and capital coverage, upholding a conservative and disciplined underwriting model, and ~~serving~~building strong relationships with our customers. We are well positioned to continue to support and serve our customers, invest in our business and drive growth while creating value for our stockholders and effectively navigating the evolving economic, social, political, and regulatory environments in which we operate. We further describe our key initiatives and strategies under “Recent Developments and Outlook” of the Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II - Item 7 included in our Annual Report.

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Results of Operations

The results of OMFC are consolidated into the results of OMH. Due to the nominal differences between OMFC and OMH, content throughout this section relates only to OMH. See Note 21 of the Notes to the Condensed Consolidated Financial Statements included in this report for ~~the reconciliation of results of OMFC to OMH.~~

~~COVID-19 PANDEMIC IMPACTS ON RESULTS~~

The adverse effects caused by the COVID-19 pandemic, along with mitigation efforts from government stimulus measures, and our own operational response has impacted our business, results of operations, and liquidity and capital resources. The following is a summary of the most significant impacts:

•Net finance receivables were $17.8 billion as of September 30, 2020 compared to $18.4 billion as of December 31, 2019. Initial operational disruptions, combined with actions taken by management to tighten underwriting standards, which reduced originations to higher risk categories of lending, and a reduction in the demand for personal loans, resulted in an overall decline in net finance receivables. Originations began to be impacted in the last two weeks of March 2020, with our lowest production levels occurring in April. Originations increased in May and continued to increase through the end of September, driven by adjustments to our underwriting, enhancements to our digital origination capabilities, increased proactive outreach to our customers, and improved customer demand and unemployment trends. Originations continued to remain below 2019 levels.

•The government stimulus measures, our borrower assistance programs, and our collection efforts contribute to strong customer payment trends, which contributed to a decrease in our 30-89 and 90+ day delinquency ratios to 1.9% and 1.5%, respectively, as of September 30, 2020 when compared to 2.5% and 2.1%, respectively, as of December 31, 2019 and 2.3% and 1.9%, respectively, as of September 30, 2019.

•Under our borrower assistance programs, we waived late fees for payments due March 15, 2020 through April 30, 2020, suspended credit bureau reporting for newly delinquent accounts in March and April of 2020, and offered reduced and deferred payment options to our customers. Borrower assistance enrollment peaked in April at 8.0% of loans in the portfolio, and returned to a more historical normal average of 2.3% during the third quarter of 2020. As of September 30, 2020, the customers who received borrower assistance in the second quarter were performing 50% better than our historical experience.

•Our loan loss reserve methodology includes forecasted economic trends and unemployment levels, which significantly increased our provision for finance receivable losses as a result of the impacts of COVID-19 during the nine months ended September 30, 2020 compared to the same period from prior year. The rise in unemployment claims around the country also resulted in an increase in involuntary unemployment insurance claims expense during the nine months ended September 30, 2020. For further information regarding the impact of COVID-19 on net income for the periods, see “Results of Operations - OMH’s Consolidated Results” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.

•In March 2020, out of an abundance of caution, we elected to draw on our revolving conduit facilities to preserve financial flexibility during the capital market disruption resulting from the COVID-19 pandemic. During the second quarter of 2020, we subsequently repaid all of our revolving conduit facilities. During the nine months ended September 30, 2020, we also issued debt securities in both the unsecured and ABS markets. As of September 30, 2020, we had $1.9 billion of cash and cash equivalents, $8.3 billion of unencumbered personal loans, and $7.2 billion in potential borrowing capacity from our 14 revolving conduit facilities.

•During the year, the Company incurred direct costs associated with COVID-19 relating to (i) information technology costs to transition employees to work remotely, (ii) branch, central operations, and corporate locations sanitization services and supplies, (iii) installation of protective barriers and other appropriate safety measures, and (iv) other costs and fees directly related to COVID-19. The Company also incurred restructuring costs associated with a reduction in workforce. For further information regarding direct costs associated with COVID-19 and restructuring charges, see “Results of Operations - Non-GAAP Financial Measures” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.

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•We did not have any impairments with respect to goodwill, intangible assets, long-lived assets, and right of use assets during the three and nine months ended September 30, 2020. We currently do not anticipate any impairments as it relates to these assets at this time, but we will continue to monitor and test as appropriate.

information.

OMH'S CONSOLIDATED RESULTS

See the table below for OMH's consolidated operating results and selected financial statistics. A further discussion of OMH's operating results for our operating segment is provided under “Segment Results” below.

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



	At or for the Three Months Ended March 31,
(dollars in millions, except per share amounts)	2021			2020

Interest income	$	1,060		$	1,106
Interest expense	235			255
Provision for finance receivable losses	(2)			531
Net interest income after provision for finance receivable losses	827			320

Other revenues	91			141
Other expenses	372			418
Income before income taxes	546			43
Income taxes	133			11
Net income	$	413		$	32



Share Data:



Earnings per share:

Diluted	$	3.06		$	0.24

Selected Financial Statistics *
Finance receivables held for investment:
Net finance receivables	$	17,564		$	18,269
Number of accounts	2,229,609			2,400,536




Average net receivables	$	17,824		$	18,380
Yield	24.08		%	24.17		%
Gross charge-off ratio	5.81		%	7.35		%
Recovery ratio	(1.14)		%	(0.90)		%
Net charge-off ratio	4.67		%	6.45		%
30-89 Delinquency ratio	1.57		%	2.25		%
Origination volume	$	2,284		$	2,589
Number of accounts originated	225,102			276,773
Debt balances:
Long-term debt balance	$	16,789		$	20,443
Average daily debt balance	17,035			17,675

* See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.

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Comparison of Consolidated Results for theThree ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~

Interest income ~~increased $24~~decreased $46 million or ~~2.3% and $253 million or 8.4%~~4.2% for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 when compared to the same ~~periods~~period in ~~2019~~2020 primarily due to ~~growth~~a decrease in our average ~~loan portfolio along with higher yields driven by the impacts of lower delinquencies.~~net finance receivables.

Interest expense ~~increased $11~~decreased $20 million or ~~4.5% and $64 million or 8.9%~~7.8% for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 when compared to the same ~~periods~~period in ~~2019~~2020 primarily due to ~~an increase~~a decrease in average debt ~~of $1.3 billion and $2.3 billion, respectively, offset by~~along with a lower average cost of funds.

See Notes 86 and 97 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information on our long-term debt, securitization transactions, and our revolving conduit facilities.

Provision for finance receivable losses decreased ~~$51~~$533 million ~~or 18.1%~~ for the three months ended ~~September 30, 2020~~March 31, 2021 when compared to the same period in ~~2019~~2020 primarily due to the ~~impact~~decrease in our charge-offs and the expectation of ~~lower delinquencies~~improved unemployment and anticipated economic recovery from the COVID-19 pandemic as compared to a build in ~~the portfolio.~~

~~Provision for finance receivable lossesincreased $350 million or 41.9% for the nine months ended September 30, 2020 when compared to~~our allowance reserve in the same period in ~~2019~~2020 primarily due to ~~higher~~the uncertainty of expected credit losses ~~in our allowance as a result~~at the onset of the ~~current year adoption of ASU 2016-13, which were primarily driven by ourforecast of elevated unemployment as a result of COVID-19.~~COVID-19 pandemic.

Other revenues decreased ~~$55~~$50 million or ~~35.3%~~35.5% for the three months ended ~~September 30, 2020~~March 31, 2021 when compared to the same period in ~~2019~~2020 primarily due to a ~~$36~~$47 million ~~increase in~~ net loss on the ~~repayments~~repayment of debt in the current period and a ~~$12 million~~ decrease in ~~revenue~~insurance products sold due to ~~lower insurance products and home and auto membership plans sold as a result of reduced loan origination volume.~~

Other revenues decreased $70 million or 15.2% for the nine months ended September 30, 2020 when compared to the same period in 2019 primarily due to a $20 million decrease from lower insurance products and home and auto membership plans sold as a result of reduced loan origination volume, ~~a $15 million decrease~~partially offset by an increase in investment revenue primarily driven by ~~lower interest rates on cash and invested assets and lower~~higher mark-to-market net ~~gain~~gains on ~~equity investment securities, and~~ other decreases from the prior period due to lower servicing fee income, lower interest income on restricted cash, lower net gain on sale from the sale of SpringCastle interests and the gain on sale of a cost method investment in 2019.securities.

Other expenses decreased ~~$35~~$46 million or ~~8.8%~~11.0% for the three months ended ~~September 30, 2020~~March 31, 2021 when compared to the same period in ~~2019~~2020 primarily due to a $35 million decrease in insurance policy and benefits claims expense due to lower than expected involuntary unemployment insurance claims along with a decrease in general operating expenses, reflecting our efforts to ~~tightly~~ manage costs ~~as well as variable expenses associated with lower loan origination volume.~~

~~Other expenses increased $22 million or 1.9% for~~through the nine months ended September 30, 2020 when compared to the same period in 2019 primarily due to an increase in insurance policy benefits and claims expense primarily due to the impact of COVID-19 on our involuntary unemployment insurance products. The increase was partiallypandemic, offset by ~~a decrease~~our strategic investments in ~~general operating expenses, reflecting our efforts to tightly manage costs as well as variable expenses associated with lower loan origination volume.~~the business.

Income taxes totaled ~~$91 million and $131~~$133 million for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 compared to ~~$49 million and $161~~$11 million for the three ~~and nine~~ months ended ~~September 30, 2019, respectively,~~March 31, 2020 due to higher pre-tax income in the ~~third~~first quarter of ~~2020 and lower pre-tax income during the nine months ended September 30, 2020.~~

2021. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, the effective tax rates were ~~26.8%~~24.4% and ~~26.1%~~24.3%, respectively. The effective tax rates differed from the federal statutory rate of 21% primarily due to the effect of state income ~~taxes and discrete tax expense during the third quarter of 2020.~~

For the three and nine months ended September 30, 2019, the effective tax rates were 16.3% and 21.3%, respectively. The effective tax rates 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 state deferred taxes.

See Note 1311 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information on effective tax rates.

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NON-GAAP FINANCIAL MEASURES

Management uses adjusted pretax income (loss), a non-GAAP financial measure, as a key performance measure of our segment. Adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes direct costs associated with COVID-19, acquisition-related transaction and integration expenses, net loss resulting from repurchases and repayments of debt, ~~acquisition-related transaction~~ and ~~integration expenses, net gain on sale of cost method investment, restructuring charges, additional net gain on sale of SpringCastle interests,~~ lower of cost or fair value adjustment on loans held for ~~sale, and net loss on sale of real estate loans.~~sale. Management believes adjusted pretax income (loss) is useful in assessing the profitability of our segment.

Management also uses pretax capital generation, a non-GAAP financial measure, as a key performance measure of our segment. This measure represents adjusted pretax income as discussed above and excludes the change in our allowance for finance receivable losses in the period while still considering the net charge-offs incurred during the period. Management believes that pretax capital generation is useful in assessing the capital created in the period impacting the overall capital adequacy of the Company. Management believes that the Company’s reserves, combined with its equity, represent the Company’s loss absorption capacity.

Management utilizes both adjusted pretax net income (loss) and pretax capital generation in evaluating our performance. Additionally, both of these non-GAAP measures are consistent with the performance goals established in OMH’s executive compensation program. Adjusted pretax income (loss) and pretax capital generation are non-GAAP financial measures and should be considered supplemental to, but not as a substitute for or superior to, income (loss) before income taxes, net income, or other measures of financial performance prepared in accordance with GAAP.

~~Table of Contents~~

OMH's reconciliations of income (loss) before income tax expense (benefit) on a Segment Accounting Basis to adjusted pretax income (loss) (non-GAAP) by segment and Consumer and Insurance pretax capital generation (non-GAAP) were as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2020		2019		2020		2019			(dollars in millions)	2021		2020

Consumer and Insurance	Consumer and Insurance										Consumer and Insurance
Income before income taxes - Segment Accounting Basis	Income before income taxes - Segment Accounting Basis	$	351	$	312	$	530	$	814		Income before income taxes - Segment Accounting Basis	$	567	$	51
Adjustments:	Adjustments:										Adjustments:
Direct costs associated with COVID-19	Direct costs associated with COVID-19	4		—		13		—			Direct costs associated with COVID-19	2		3
Acquisition-related transaction and integration expenses	Acquisition-related transaction and integration expenses	2		2		10		16			Acquisition-related transaction and integration expenses	—		6
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
Net loss on repurchases and repayments of debt											Net loss on repurchases and repayments of debt	38		—

Adjusted pretax income (non-GAAP)	Adjusted pretax income (non-GAAP)	$	393	$	317	$	595	$	854		Adjusted pretax income (non-GAAP)	$	607	$	60

Provision for finance receivable losses	Provision for finance receivable losses	$	232	$	277	$	1,184	$	816		Provision for finance receivable losses	$	(3)	$	530
Net charge-offs	Net charge-offs	(232)		(227)		(810)		(767)			Net charge-offs	(205)		(296)
Pretax capital generation (non-GAAP)	Pretax capital generation (non-GAAP)	$	393	$	367	$	969	$	903		Pretax capital generation (non-GAAP)	$	399	$	294

Other	Other										Other
Loss before income taxes - Segment Accounting Basis	Loss before income taxes - Segment Accounting Basis	$	(2)	$	(2)	$	(5)	$	(2)		Loss before income taxes - Segment Accounting Basis	$	(3)	$	(1)
Adjustments:	Adjustments:										Adjustments:
Additional net gain on sale of SpringCastle interests		(4)		—		(4)		(7)

Lower of cost or fair value adjustment (a)	Lower of cost or fair value adjustment (a)	4		—		4		—			Lower of cost or fair value adjustment (a)	1		—
Net loss on sale of real estate loans (b)		—		—		—		1

Adjusted pretax loss (non-GAAP)	Adjusted pretax loss (non-GAAP)	$	(2)	$	(2)	$	(5)	$	(8)		Adjusted pretax loss (non-GAAP)	$	(2)	$	(1)

(a) The carrying value of our remaining real estate loans classified in finance receivables held for sale exceeded their fair value, and accordingly, we have marked the loans to fair value and recorded an impairment in other revenue during the three ~~and nine~~ months ended ~~September 30, 2020.~~

(b) During the nine months ended September 30, 2019, the resulting impairment on finance receivables held for sale remaining after the February 2019 Real Estate Loan Sale has been combined with the gain on the sale. See Note 6 of the Notes to the Condensed Consolidated Financial Statements included in this report for more information regarding the real estate loan sale.March 31, 2021.

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Segment Results

The results of OMFC are consolidated into the results of OMH. Due to the nominal differences between OMFC and OMH, content throughout this section relate only to OMH. See Note 21 of the Notes to the Condensed Consolidated Financial Statements included in this report for ~~the reconciliation of results of OMFC to OMH.~~further information.

See 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 for a description of our segments and methodologies used to allocate revenues and expenses to each segment. See Note 1513 of the Notes to the Condensed Consolidated Financial Statements included in this report for ~~reconciliations~~a description of our segment ~~total~~and methodologies used to ~~condensed consolidated financial statement amounts.~~allocate revenues and expenses to our C&I segment and Other.

CONSUMER AND INSURANCE

OMH's adjusted pretax income and selected financial statistics for C&I on an adjusted Segment Accounting Basis were as follows:

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



	At or for the Three Months Ended March 31,
(dollars in millions)	2021			2020

Interest income	$	1,057		$	1,101
Interest expense	233			249
Provision for finance receivable losses	(3)			530
Net interest income after provision for finance receivable losses	827			322
Other revenues	136			136
Other expenses	356			398
Adjusted pretax income (non-GAAP)	$	607		$	60


Selected Financial Statistics *
Finance receivables held for investment:
Net finance receivables	$	17,569		$	18,283
Number of accounts	2,229,609			2,400,536

Average net receivables	$	17,830		$	18,397
Yield	24.04		%	24.07		%
Gross charge-off ratio	5.81		%	7.36		%
Recovery ratio	(1.14)		%	(0.90)		%
Net charge-off ratio	4.67		%	6.46		%
30-89 Delinquency ratio	1.57		%	2.26		%
Origination volume	$	2,284		$	2,589
Number of accounts originated	225,102			276,773

* See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.

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Comparison of Adjusted Pretax Income for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~

Interest income ~~increased $26~~decreased $44 million or ~~2.5% and $247 million or 8.2%~~4.0% for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 when compared to the same ~~periods~~period in ~~2019~~2020 primarily due to ~~growth~~a decrease in our average ~~loan portfolio along with higher yields driven by the impacts of lower delinquencies.~~net finance receivables.

Interest expense ~~increased $12~~decreased $16 million or ~~5.0% and$65 million or 9.3%~~6.4% for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 when compared to the same ~~periods~~period in ~~2019~~2020 primarily due to ~~an increase~~a decrease in average debt ~~of $1.3 billion and $2.3 billion, respectively, offset by~~along with a lower average cost of funds.

Provision for finance receivable losses decreased ~~$45~~$533 million ~~or 16.2%~~ for the three months ended ~~September 30, 2020~~March 31, 2021 when compared to the same period in ~~2019~~2020 primarily due to the ~~impact~~decrease in our charge-offs and the expectation of ~~lower delinquencies~~improved unemployment and anticipated economic recovery from the COVID-19 pandemic as compared to a build in ~~the portfolio.~~

~~Provision for finance receivable losses increased $368 million or 45.1% for the nine months ended September 30, 2020 when compared to~~our allowance reserve in the same period in ~~2019~~2020 primarily due to ~~higher~~the uncertainty of expected credit losses ~~in our allowance as a result~~at the onset of the ~~current year adoption of ASU 2016-13, which were primarily driven by ourforecast of elevated unemployment as a result of COVID-19.~~COVID-19 pandemic.

Other revenues ~~decreased $20 million or 13.0% and $46 million or 10.0%~~ for the three ~~and nine~~ months ended ~~September 30, 2020, respectively, when compared to~~March 31, 2021 remained consistent with the same ~~periods~~period in ~~2019~~2020 primarily due to ~~lower~~a decrease in insurance products ~~and home and auto membership plans~~ sold ~~as a result of~~due to reduced loan origination volume, ~~and a decrease~~offset by an increase in investment revenue primarily driven by ~~lower interest rates on cash and invested assets and lower~~higher mark-to-market net ~~gain~~gains on ~~equity investment securities in the current periods.~~other securities.

Other expenses decreased ~~$37~~$42 million or ~~9.7%~~10.6% for the three months ended ~~September 30, 2020~~March 31, 2021 when compared to the same period in ~~2019~~2020 primarily due to a $35 million decrease in insurance policy and benefits claims expense due to lower than expected involuntary unemployment insurance claims along with a decrease in general operating expenses, reflecting our efforts to ~~tightly~~ manage costs ~~as well as variable expenses associated with lower loan origination volume.~~through the pandemic, offset by our strategic investments in the business.

Other expenses increased $27 million or 2.4% for the nine months ended September 30, 2020 when compared to the same periods in 2019 primarily due to an increase in insurance policy benefits and claims expense primarily due to the impact of COVID-19 on our involuntary unemployment insurance products. The increase was partially offset by a decrease in general operating expenses, reflecting our efforts to tightly manage costs as well as variable expenses associated with lower loan origination volume.

~~Table of Contents~~

OTHER

“Other” consists of our liquidating SpringCastle Portfolio servicing activity and our non-originating legacy operations, which ~~includes~~ primarily include our liquidating real estate loans.

OMH's adjusted pretax loss of the Other components on an adjusted Segment Accounting Basis was as follows:

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)



	Three Months Ended March 31,
(dollars in millions)	2021		2020

Interest income	$	1	$	2
Interest expense	1		1

Net interest income after provision for finance receivable losses	—		1
Other revenues	4		4
Other expenses	6		6
Adjusted pretax loss (non-GAAP)	$	(2)	$	(1)

Net finance receivables of the Other components, reported in “Other assets,” on a Segment Accounting Basis were as follows:

September 30,
(dollars in millions) 2020 2019
Net finance receivables held for sale:
Other receivables $ 54 $ 70



	March 31,
(dollars in millions)	2021		2020






Net finance receivables held for sale:
Other receivables	$	46	$	63

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Credit Quality

The results of OMFC are consolidated into the results of OMH. Due to the nominal differences between OMFC and OMH, content throughout this section relate only to OMH. See Note 2 of the Notes to the Condensed Consolidated Financial Statements included in this report for the reconciliation of results of OMFC to OMH.

FINANCE RECEIVABLES

Our net finance receivables, consisting of personal loans, were ~~$17.8~~$17.6 billion at ~~September 30, 2020~~March 31, 2021 and ~~$18.4~~$18.1 billion at December 31, ~~2019.~~2020. Our personal loans are non-revolving, with a fixed-rate, fixed terms generally between three and six years, and are secured by automobiles, other titled collateral, or are unsecured. 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. Our branch team members work with customers as necessary and offer a variety of borrower assistance programs to help customers continue to make payments. ~~See “Results of Operations” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report for further details on our borrower assistance programs.~~

DELINQUENCY

We monitor delinquency trends to evaluate the risk of future credit losses and employ advanced analytical tools to manage our exposure. Team members are actively engaged in collection activities throughout the early stages of delinquency. We closely track and report the percentage of receivables that are contractually 30-89 days past due as a benchmark of portfolio quality, collections effectiveness, and as a strong indicator of losses in coming quarters. ~~See “Results of Operations” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report for further details on the COVID-19 impact on delinquency.~~

~~Table of Contents~~

When finance receivables are contractually 60 days 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. Use of our centralized operations teams for managing late stage delinquency allows us to apply more advanced collection technologies and tools, and drives operating efficiencies in servicing. At 90 days 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.

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The delinquency information for net finance receivables is as follows:


(dollars in millions)	(dollars in millions)	Consumer and Insurance			Segment to GAAP Adjustment (a)		GAAP Basis			(dollars in millions)	Consumer and Insurance			Segment to GAAP Adjustment		GAAP Basis

September 30, 2020
March 31, 2021										March 31, 2021
Current	Current	$	17,212		$	(7)	$	17,205		Current	$	16,973		$	(5)	$	16,968
30-59 days past due	30-59 days past due	216			(1)		215			30-59 days past due	157			—		157
Delinquent (60-89 days past due)	Delinquent (60-89 days past due)	132			(1)		131			Delinquent (60-89 days past due)	119			—		119
Performing	Performing	17,560			(9)		17,551			Performing	17,249			(5)		17,244

Nonperforming (90+ days past due)	Nonperforming (90+ days past due)	266			—		266			Nonperforming (90+ days past due)	320			—		320
Total net finance receivables	Total net finance receivables	$	17,826		$	(9)	$	17,817		Total net finance receivables	$	17,569		$	(5)	$	17,564

Delinquency ratio	Delinquency ratio									Delinquency ratio
30-89 days past due	30-89 days past due	1.95		%	(b)		1.95		%	30-89 days past due	1.57		%	*		1.57		%
30+ days past due	30+ days past due	3.44		%	(b)		3.44		%	30+ days past due	3.39		%	*		3.39		%
60+ days past due	60+ days past due	2.23		%	(b)		2.23		%	60+ days past due	2.50		%	*		2.50		%
90+ days past due	90+ days past due	1.49		%	(b)		1.49		%	90+ days past due	1.82		%	*		1.82		%

December 31, 2019
December 31, 2020										December 31, 2020
Current	Current	$	17,578		$	(28)	$	17,550		Current	$	17,362		$	(7)	$	17,355
30-59 days past due	30-59 days past due	273			(1)		272			30-59 days past due	251			—		251
Delinquent (60-89 days past due)	Delinquent (60-89 days past due)	182			(1)		181			Delinquent (60-89 days past due)	162			—		162
Performing	Performing	18,033			(30)		18,003			Performing	17,775			(7)		17,768

Nonperforming (90+ days past due)	Nonperforming (90+ days past due)	388			(2)		386			Nonperforming (90+ days past due)	316			—		316
Total net finance receivables	Total net finance receivables	$	18,421		$	(32)	$	18,389		Total net finance receivables	$	18,091		$	(7)	$	18,084

Delinquency ratio	Delinquency ratio									Delinquency ratio
30-89 days past due	30-89 days past due	2.47		%	(b)		2.46		%	30-89 days past due	2.28		%	*		2.28		%
30+ days past due	30+ days past due	4.58		%	(b)		4.56		%	30+ days past due	4.03		%	*		4.03		%
60+ days past due	60+ days past due	3.09		%	(b)		3.08		%	60+ days past due	2.64		%	*		2.64		%
90+ days past due	90+ days past due	2.11		%	(b)		2.10		%	90+ days past due	1.75		%	*		1.75		%

(a) As a result of the adoption of ASU 2016-13, 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. See Notes 3, 4, and 5 of the Notes to the Condensed Consolidated Financial Statements for additional information on the adoption of ASU 2016-13 included in this report.

~~(b)~~* Not applicable

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ALLOWANCE FOR FINANCE RECEIVABLE LOSSES

We estimate and record an allowance for finance receivable losses to cover the estimated lifetime expected credit losses on our finance receivables, effective with 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 ~~our continual review of the~~changes in portfolio growth, credit quality, and ~~contractual delinquency of the finance receivable portfolio and changes in~~ economic conditions.

Our current methodology to estimate expected credit losses used the most recent macroeconomic forecasts, which incorporated the projected impacts and expected recovery of COVID-19 on the U.S. economy. We also ~~incorporated estimated impacts from~~considered known government stimulus measures, the involuntary unemployment insurance coverage of our portfolio, and our borrower assistance efforts. Our forecast leveraged economic projections from an industry leading forecast provider. At ~~September 30, 2020,~~March 31, 2021, 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. In the near-term, we may experience further changes to the macroeconomic assumptions within our forecast, as well as changes to our loan loss performance outlook, both of which could lead to further changes in our allowance for ~~loan~~finance receivable losses, ~~reserve rate,~~allowance ratio, and provision ~~expense. For further information regarding the impact of COVID-19 on our allowance~~ for finance receivable ~~losses see “Recent Development and Outlook” and “Results of Operations” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.~~losses.

Changes in the allowance for finance receivable losses were as follows:

(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

~~Table of Contents~~


(dollars in millions)	(dollars in millions)	Consumer and Insurance			Segment to GAAP Adjustment		Consolidated Total			(dollars in millions)	Consumer and Insurance			Segment to GAAP Adjustment		Consolidated Total

Nine Months Ended September 30, 2020
Three Months Ended March 31, 2021										Three Months Ended March 31, 2021
Balance at beginning of period										Balance at beginning of period	$	2,283		$	(14)	$	2,269
Provision for finance receivable losses										Provision for finance receivable losses	(3)			1		(2)
Charge-offs										Charge-offs	(255)			—		(255)
Recoveries										Recoveries	50			—		50
Balance at end of period										Balance at end of period	$	2,075		$	(13)	$	2,062

Allowance ratio										Allowance ratio	11.81		%	(b)		11.74		%

Three Months Ended March 31, 2020										Three Months Ended March 31, 2020
Balance at beginning of period	Balance at beginning of period	$	849		$	(20)	$	829		Balance at beginning of period	$	849		$	(20)	$	829
Impact of adoption of ASU 2016-13 (a)	Impact of adoption of ASU 2016-13 (a)	1,119			(1)		1,118			Impact of adoption of ASU 2016-13 (a)	1,119			(1)		1,118
Provision for finance receivable losses	Provision for finance receivable losses	1,184			2		1,186			Provision for finance receivable losses	530			1		531
Charge-offs	Charge-offs	(932)			1		(931)			Charge-offs	(337)			—		(337)
Recoveries	Recoveries	122			—		122			Recoveries	41			—		41
Balance at end of period	Balance at end of period	$	2,342		$	(18)	$	2,324		Balance at end of period	$	2,202		$	(20)	$	2,182

Allowance ratio	Allowance ratio	13.14		%	(b)		13.05		%	Allowance ratio	12.05		%	(b)		11.95		%

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		%

(a) As a result of the adoption of ASU 2016-13, we recorded a one-time adjustment to the allowance for finance receivable losses. Additionally, 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. See Notes 3, 4, and 5 of the Notes to the Condensed Consolidated Financial Statements for additional information on the adoption of ASU 2016-13 included in this report.~~

(b) Not applicable.

The current delinquency status of our finance receivable portfolio, inclusive of recent borrower performance, volume of our TDR activity, level and recoverability of collateral securing our finance receivable portfolio, and the reasonable and supportable forecast of economic conditions ~~(after the adoption of ASU 2016-13)~~ are the primary drivers that can cause fluctuations in our allowance for finance receivable losses from period to period. We monitor the allowance ratio to ensure we have a sufficient level of allowance for finance receivable losses based on the estimated lifetime expected credit losses in our finance receivable portfolio. The allowance for finance receivable losses as a percentage of net finance receivables ~~increased~~decreased from prior ~~periods~~period primarily due to the ~~adoption~~expectation of ~~ASU 2016-13~~improved unemployment and anticipated economic recovery from the ~~impacts~~COVID-19 pandemic as compared to a build in our allowance reserve in the same period in 2020 primarily due to the uncertainty of expected credit losses at the onset of the ~~current economic environment.~~

COVID-19 pandemic. See Note 54 of the Notes to the Condensed Consolidated Financial Statements included in this report for more information about the changes in the allowance for finance receivable losses.

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TDR FINANCE RECEIVABLES

We make modifications to our finance receivables to assist borrowers experiencing financial difficulties. When we modify a loan’s contractual terms for economic or other reasons related to the borrower’s financial difficulties and grant a concession that we would not otherwise consider, we classify that loan as a TDR finance receivable.

Information regarding TDR net finance receivables is as follows:


(dollars in millions)	(dollars in millions)	Consumer and Insurance		Segment to GAAP Adjustment		GAAP Basis		(dollars in millions)	Consumer and Insurance		Segment to GAAP Adjustment		GAAP Basis

September 30, 2020
March 31, 2021								March 31, 2021
TDR net finance receivables	TDR net finance receivables	$	743	$	(42)	$	701	TDR net finance receivables	$	723	$	(33)	$	690
Allowance for TDR finance receivable losses	Allowance for TDR finance receivable losses	344		(23)		321		Allowance for TDR finance receivable losses	327		(16)		311

December 31, 2019
December 31, 2020								December 31, 2020
TDR net finance receivables	TDR net finance receivables	$	721	$	(63)	$	658	TDR net finance receivables	$	728	$	(37)	$	691
Allowance for TDR finance receivable losses	Allowance for TDR finance receivable losses	292		(20)		272		Allowance for TDR finance receivable losses	332		(18)		314

DISTRIBUTION OF FINANCE RECEIVABLES BY FICO SCORE

There are many different categorizations used in the consumer lending industry to describe the creditworthiness of a borrower, including prime, near prime, and sub-prime. While management does not utilize FICO scores to manage credit quality, we have presented the following on how we group FICO scores into said categories for comparability purposes across our industry:

•Prime: FICO score of 660 or higher

•Near prime: FICO score of 620-659

•Sub-prime: FICO score of 619 or below

Our customers’ demographics are, in many respects, near the national median but may vary from national norms in terms of credit and repayment histories. Many of our customers have experienced some level of prior financial difficulty or have limited credit experience and require higher levels of servicing and support from our branch network and central servicing operations.

The following table reflects our personal loans grouped into the categories described above based on borrower FICO credit scores as of the most recently refreshed date or as of the loan origination or purchase date:


(dollars in millions)	(dollars in millions)	September 30, 2020 *		December 31, 2019		(dollars in millions)	March 31, 2021*		December 31, 2020*

FICO scores	FICO scores					FICO scores
660 or higher	660 or higher	$	4,612	$	3,951	660 or higher	$	4,646	$	4,653
620-659	620-659	4,835		4,683		620-659	4,742		4,877
619 or below	619 or below	8,370		9,755		619 or below	8,176		8,554
Total	Total	$	17,817	$	18,389	Total	$	17,564	$	18,084

* Due to the impact of COVID-19, FICO scores as of ~~September 30,~~March 31, 2021 and December 31, 2020 may have been impacted due to government stimulus measures, borrower assistance programs, and potentially inconsistent reporting to credit bureaus.

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Liquidity and Capital Resources

SOURCES AND USES OF FUNDS

We finance the majority of our operating liquidity and capital needs through a combination of cash flows from operations, secured debt, unsecured debt, borrowings from revolving conduit facilities and equity. We may also utilize other sources in the future. As a holding company, all of the funds generated from our operations are earned by our operating subsidiaries. Our operating subsidiaries’ primary cash needs relate to funding our lending activities, our debt service obligations, our operating expenses, payment of insurance claims, and expenditures relating to upgrading and monitoring our technology platform, risk systems, and branch locations.

We have previously purchased portions of our unsecured indebtedness, and we may elect to purchase additional portions of our unsecured indebtedness or securitized borrowings in the future. Future purchases may be made through the open market, privately negotiated transactions with third parties, or pursuant to one or more tender or exchange offers, all of which are subject to terms, prices, and consideration we may determine at our discretion.

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, OMH generated net income of ~~$371~~$413 million. ~~OMH~~OMH’s net cash inflow from operating and investing activities totaled ~~$1.4 billion~~$754 million for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. At ~~September 30, 2020,~~March 31, 2021, our scheduled principal and interest payments for the remainder of ~~2020~~2021 on our existing debt (excluding securitizations) totaled ~~$119~~$393 million. As of ~~September 30, 2020,~~March 31, 2021, we had ~~$8.3~~$9.2 billion of unencumbered ~~personal loans and $110 million of unencumbered real estate loans. These real estate loans are classified as held for sale and reported in “Other assets.”~~gross finance receivables.

Based on our estimates and taking into account the risks and uncertainties of our plans, we believe that we will have adequate liquidity to finance and operate our businesses and repay our obligations as they become due ~~through 2022.~~

~~OMFC’s Issuance and Redemption of Unsecured Debt~~

~~For information regarding~~for at least the ~~issuance and redemption of OMFC's unsecured debt, see Note 8 of the Notes to the Condensed Consolidated Financial Statements included in this report.~~next 24 months.

Securitizations and Borrowings from Revolving Conduit Facilities

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, we ~~completed two personal loan~~did not terminate, cancel, or enter into any new securitizations ~~(OMFIT 2020-1 and OMFIT 2020-2, see “Securitized Borrowings” below), and redeemed two personal loan securitizations (SLFT 2016-A and OMFIT 2016-1).~~or conduit facilities. At ~~September 30, 2020,~~March 31, 2021, we had ~~$9.3~~$8.1 billion ~~in UPB~~ of gross finance receivables pledged as collateral for our securitization transactions.

At ~~September 30, 2020,~~March 31, 2021, the borrowing capacity of our revolving conduit facilities was $7.2 billion, and no amounts were drawn nor were any personal loans pledged as collateral under these facilities.

See Notes 86 and 97 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information on our long-term debt and revolving conduit facilities.

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~~Shares Repurchased and Retired~~

During the first quarter of 2020, OMH repurchased and retired 2,031,698 shares of its common stock at an average price per share of $22.30, for an aggregate total of approximately $45 million, including commissions and fees. 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. On March 20, 2020, OMH temporarily suspended its stock repurchase program. OMH retains the right to reinstate the stock repurchase program as circumstances change. For additional information regarding the shares repurchased see Note 11 of the Notes to the Condensed Consolidated Financial Statements included in this report.

Cash ~~Dividends~~Dividend to OMH's Common Stockholders

As of ~~September 30, 2020,~~March 31, 2021, the dividend ~~declarations~~declaration for the current year by OMH's board of directors ~~were~~was as follows:

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


Declaration Date	Record Date	Payment Date	Dividend Per Share			Amount Paid
						(in millions)
February 8, 2021	February 18, 2021	February 25, 2021	$	3.95	*	$	531



Total			$	3.95		$	531

* ~~Our February 10, 2020 and July 27, 2020 dividend declarations of $2.83 and $2.33, respectively, each included a~~Includes the minimum quarterly dividend of ~~$0.33~~$0.45 per ~~share.~~share as of February 8, 2021.

To provide ~~the primary~~ funding for the ~~dividends,~~dividend, OMFC paid dividends of ~~$739~~$531 million to OMH during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

On ~~October~~April 26, ~~2020,~~2021, OMH declared a dividend of ~~$0.45~~$0.70 per share payable on ~~November 17, 2020~~May 13, 2021 to record holders of OMH's common stock as of the close of business on ~~November 9, 2020.~~May 6, 2021. To provide funding for the OMH dividend, the OMFC Board of Directors authorized a dividend in the amount of up to ~~$61~~$95 million payable on or after ~~November 13, 2020.~~May 11, 2021.

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While OMH intends to pay its minimum quarterly dividend, currently ~~$0.45~~$0.70 per share, for the foreseeable future, and announced its intention to evaluate dividends above the minimum every first and third quarters, all subsequent dividends will be reviewed and declared at the discretion of the board of directors and will depend on many factors, including our financial condition, earnings, cash flows, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends, and other considerations that the board of directors deems relevant. OMH's dividend payments may change from time to time, and the board of directors may choose not to continue to declare dividends in the future. See our “Dividend Policy” in Part II - Item 5 included in our Annual Report for further information.

The Company plans to commence a $150 million programmatic share repurchase plan. The timing and amount of any shares repurchased will be determined by the company based on its evaluation of market conditions and other factors and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. The company is not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. The actual timing, number and share price of shares repurchased will depend on a number of factors, including the market price of the company’s stock, general market and economic conditions, and applicable legal requirements. The share repurchase program is expected to be funded by cash on hand and future cash generated from on-going operations.

Whole Loan Sale Transactions

As of March 31, 2021, we have entered into whole loan sale flow agreements with two third-party buyers in which we agreed to sell a combined total of $120 million per quarter of newly originated unsecured personal loans over a two-year commitment period. These unsecured personal loans are sold to unconsolidated VIEs and are derecognized from our balance sheet at the time of sale. We service the personal loans sold and are entitled to a servicing fee and other fees commensurate with the services performed as part of the agreements. The amount sold under the agreements during the three months ended March 31, 2021 was immaterial.

LIQUIDITY

OMH's Operating Activities

Net cash provided by operations of ~~$1.6 billion~~$556 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 reflected net income of ~~$371~~$413 million, the impact of non-cash items, and an unfavorable change in working capital of ~~$108~~$23 million. Net cash provided by operations of ~~$1.7 billion~~$565 million for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 reflected net income of ~~$594~~$32 million, the impact of non-cash items, and ~~a favorable~~an unfavorable change in working capital of ~~$51~~$45 million.

OMH's Investing Activities

Net cash provided by investing activities of $198 million for the three months ended March 31, 2021 was primarily due to net principal collections of finance receivables, calls, sales, and maturities of available-for-sale and other securities, partially offset by purchases of available-for-sale and other securities. Net cash used for investing activities of ~~$257~~$196 million ~~and $2.5 billion~~ for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 ~~and 2019, respectively,~~ was primarily due to net principal originations of finance receivables ~~held for investment and held for sale~~ and purchases of available-for-sale securities, partially offset by calls, sales, and maturities of available-for-sale securities.

OMH's Financing Activities

Net cash used for financing activities of ~~$563 million~~$1.6 billion for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 was primarily due to debt repayments and cash dividends paid. Net cash provided by financing activities of $2.8 billion for the three months ended March 31, 2020 was primarily due to net issuances of long-term debt ~~repayments,~~offset by the cash dividends paid, and the cash paid on the common stock repurchased ~~offset by~~in the issuances of the 8.875% Senior Notes due 2025, OMFIT 2020-1, and OMFIT 2020-2 securitizations during the period. Net cash provided by financing activities of $1.4 billion for the nine months ended September 30, 2019 was primarily due to net issuances of long-term debt.

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quarter.

OMH's Cash and Investments

At ~~September 30, 2020,~~March 31, 2021, we had ~~$1.9~~$1.3 billion of cash and cash equivalents, which included ~~$233~~$119 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that is unavailable for general corporate purposes.

At ~~September 30, 2020,~~March 31, 2021, we had ~~$1.9~~$2.0 billion of investment securities, which are all held as part of our insurance operations and are unavailable for general corporate purposes.

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Liquidity Risks and Strategies

OMFC’s credit ratings are non-investment grade, which ~~may have~~has a significant impact on our cost and access to capital. This, in turn, can negatively affect our ability to manage our liquidity and our ability or cost to refinance our indebtedness. There are numerous risks to our financial results, liquidity, capital raising, and debt refinancing plans, some of which may not be quantified in our current liquidity forecasts. These risks are further described in our “Liquidity and Capital Resources” of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II - Item 7 included in our ~~2019~~ Annual ~~Report on Form 10-K.~~Report.

~~Principal~~The principal factors that could decrease our liquidity are customer delinquencies and defaults, a decline in customer prepayments, and a prolonged inability to adequately access capital market funding. We intend to support our liquidity position by utilizing strategies that are further described in our “Liquidity and Capital Resources” of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II - Item 7 included in our ~~2019~~ Annual ~~Report on Form 10-K.~~Report.

However, it is possible that the actual outcome of one or more of our plans could be materially different than expected or that one or more of our significant judgments or estimates could prove to be materially incorrect.

OUR INSURANCE SUBSIDIARIES

Our insurance subsidiaries are subject to state regulations that limit their ability to pay dividends. AHL and Triton did not pay any dividends during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020. See Note 1211 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~~further information on these state ~~regulation~~ restrictions and the ~~Merit sale, and~~ dividends paid by ~~Merit~~our insurance subsidiaries in ~~2019.~~2020.

OUR DEBT AGREEMENTS

The debt agreements to which OMFC and its subsidiaries are a party include customary terms and conditions, including covenants and representations and warranties. See Note 109 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 information on the restrictive covenants under OMFC’s debt agreements, as well as the guarantees of OMFC’s long-term debt.

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Securitized Borrowings

We execute private securitizations under Rule 144A of the Securities Act of 1933. As of ~~September 30, 2020,~~March 31, 2021, our structured financings consisted of the following:


(dollars in millions)	(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	(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	SLFT 2015-B	$	314	$	336	$	213	$	235	3.92	%	5 years	SLFT 2015-B	$	314	$	336	$	132	$	157	4.19	%	5 years
SLFT 2017-A	SLFT 2017-A	652		685		532		590		3.04	%	3 years	SLFT 2017-A	652		685		346		400		3.23	%	3 years
OMFIT 2015-3	OMFIT 2015-3	293		329		282		295		4.24	%	5 years	OMFIT 2015-3	293		329		182		197		4.57	%	5 years
OMFIT 2016-3	OMFIT 2016-3	350		397		317		415		4.33	%	5 years	OMFIT 2016-3	350		397		317		414		4.33	%	5 years
OMFIT 2017-1	OMFIT 2017-1	947		988		423		486		2.88	%	2 years	OMFIT 2017-1	947		988		264		325		3.33	%	2 years
OMFIT 2018-1	OMFIT 2018-1	632		650		600		683		3.60	%	3 years	OMFIT 2018-1	632		650		585		628		3.61	%	3 years
OMFIT 2018-2	OMFIT 2018-2	368		381		350		400		3.87	%	5 years	OMFIT 2018-2	368		381		350		400		3.87	%	5 years
OMFIT 2019-1	OMFIT 2019-1	632		654		600		687		3.79	%	2 years	OMFIT 2019-1	632		654		554		598		3.82	%	2 years
OMFIT 2019-2	OMFIT 2019-2	900		947		900		995		3.30	%	7 years	OMFIT 2019-2	900		947		900		995		3.30	%	7 years
OMFIT 2019-A	OMFIT 2019-A	789		892		750		892		3.78	%	7 years	OMFIT 2019-A	789		892		750		892		3.78	%	7 years
OMFIT 2020-1 ~~(c)~~	OMFIT 2020-1 ~~(c)~~	821		958		821		958		4.12	%	2 years	OMFIT 2020-1 ~~(c)~~	821		958		821		958		4.12	%	2 years
OMFIT 2020-2 ~~(d)~~	OMFIT 2020-2 ~~(d)~~	1,000		1,053		1,000		1,053		2.03	%	5 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	ODART 2018-1	947		964		791		819		3.58	%	2 years	ODART 2018-1	947		964		523		558		3.66	%	2 years
ODART 2019-1	ODART 2019-1	737		750		700		750		3.79	%	5 years	ODART 2019-1	737		750		700		750		3.79	%	5 years
Total securitizations	Total securitizations	$	9,987	$	10,608	$	8,401	$	9,407				Total securitizations	$	9,382	$	9,984	$	7,424	$	8,325

(a) Issue Amount includes the retained interest amounts as applicable and the Current Note Amounts Outstanding balances reflect pay-downs subsequent to note issuance and exclude retained interest amounts.

(b) Inclusive of in-process replenishments of collateral for securitized borrowings in a revolving status as of ~~September 30, 2020.~~

~~(c)~~ On May 1, 2020, we issued $821 million of notes backed by personal loans. The notes mature in May of 2032. We initially retained $71 million of the Class C notes and subsequently sold the Class C notes on May 29, 2020.

~~(d) On August 21, 2020, we issued $1.0 billion of notes backed by personal loans. The notes mature in September of 2035.~~

66March 31, 2021.

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Revolving Conduit Facilities

In addition to the structured financings, we have access to 1413 revolving conduit facilities with a total borrowing capacity of $7.2 billion as of ~~September 30, 2020:~~March 31, 2021:


(dollars in millions)	Advance Maximum Balance		Amount Drawn

Rocky River Funding, LLC	$	400	$	—
OneMain Financial Funding IX, LLC	~~650~~850		—
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	$	—

* On September 30, 2020, we terminated the conduit facility with New River Funding, LLC and simultaneously entered into a new conduit facility with New River Funding Trust.

See “Liquidity and Capital Resources - Sources and Uses of Funds - Securitizations and Borrowings from Revolving Conduit Facilities” above for information on the transaction completed subsequent to September 30, 2020.

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Off-Balance Sheet Arrangements

We have no ~~other~~ material off-balance sheet arrangements as defined by SEC rules, and we had no material off-balance sheet exposure to losses associated with unconsolidated VIEs at ~~September 30, 2020~~March 31, 2021 or December 31, ~~2019.~~2020.


Critical Accounting Policies and Estimates

We describe our significant accounting policies used in the preparation of our consolidated financial statements in Note 3 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report. We consider the following policies to be our most critical accounting policies because they involve critical accounting estimates and a significant degree of management judgment:

~~ALLOWANCE FOR FINANCE RECEIVABLE LOSSES~~

•

~~We estimate the~~ allowance for finance receivable ~~losses primarily on historical loss experience using a cumulative loss model applied to our~~losses; and

•TDR 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.receivables.

Management exercises its judgment when determining the amount of the 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, anyThere have been no material changes to ~~underwriting criteria and portfolio seasoning.~~

~~TDR FINANCE RECEIVABLES~~

~~When we modify a loan’s contractual terms for economic~~our critical accounting policies or other reasons related to the borrower’s financial difficulties and grant a concession that we would not otherwise consider, we classify that loan as a TDR finance receivable. Loan modifications primarily involve a combination of the following to reduce the borrower’s monthly payment: reduce interest rate, extend the term, defer or forgive past due interest or forgive principal. Account modifications that are deemed to be a TDR finance receivable are measured for impairment in accordance with the authoritative guidance for the accounting for impaired loans.

~~The allowance for finance receivable losses related~~ to our ~~TDR finance receivables represents loan-specific reserves based on an analysis of~~methodologies for deriving critical accounting estimates during the present value of expected future cash flows. We establish our allowance for finance receivable losses related to our TDR finance receivables by calculating the present value (discounted at the loan’s effective interest rate prior to modification) of all expected cash flows less the recorded investment in the aggregated pool. We use certain assumptions to estimate the expected cash flows from our TDR finance receivables. The primary assumptions for our model are prepayment speeds, default rates, and loss severity rates.

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~~GOODWILL AND OTHER INTANGIBLE ASSETS~~

We test goodwill for potential impairment annually as of October 1 of each year and whenever events occur or circumstances change that would more likely than not reduce the fair value of our reporting unit below its carrying amount. If the qualitative assessment indicates that it is more likely than not that the reporting unit’s fair value is less than its carrying amount, we proceed with the quantitative impairment test. When necessary, the fair value of the reporting unit is calculated utilizing the income approach, which uses prospective financial information of the reporting unit discounted at a rate that we estimate a market participant would use.

For indefinite-lived intangible assets, we review for impairment at least annually and whenever events occur or circumstances change that would indicate the assets are more likely than not to be impaired. We first complete an annual qualitative assessment to determine whether it is necessary to perform a quantitative impairment test. If the qualitative assessment indicates that the assets are more likely than not to have been impaired, we proceed with the fair value calculation of the assets. The fair value is determined in accordance with our fair value measurement policy.

For those net intangible assets with a finite useful life, we review such intangibles for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

three months ended March 31, 2021.


Recent Accounting Pronouncements

See Note 32 of the Notes to the Condensed Consolidated Financial Statements included in this report for discussion of recently issued accounting pronouncements.


Seasonality

Our personal loan volume is generally highest during the second and fourth quarters of the year, primarily due to marketing efforts and seasonality of demand. Demand for our personal loans is usually lower in January and February after the holiday season and as a result of tax refunds. Delinquencies on our personal loans are generally lower in the first and second quarters and tend to rise throughout the remainder of the year. These seasonal trends contribute to fluctuations in our operating results and cash needs throughout the year. Our normal seasonality trends continue to be affected by the COVID-19 pandemic and mitigating efforts from government stimulus measures.


Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes to our market risk previously disclosed in Part II - Item 7A included in our ~~2019~~ Annual ~~Report on Form 10-K.~~Report.

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Item 4. Controls and Procedures.

CONTROLS AND PROCEDURES OF ONEMAIN HOLDINGS, INC.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to provide reasonable assurance that information OMH is required to disclose in reports that OMH files or submits under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of ~~September 30, 2020,~~March 31, 2021, OMH carried out an evaluation of the effectiveness of its disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This evaluation was conducted under the supervision of, and with the participation of OMH’s management, including the Chief Executive Officer and the Chief Financial Officer. Based on the evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that OMH's disclosure controls and procedures were effective as of ~~September 30, 2020~~March 31, 2021 to provide the reasonable assurance described above.

Changes in Internal Control over Financial Reporting

There were no changes in OMH's internal control over financial reporting during the ~~third~~first quarter of ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, OMH's internal control over financial reporting.

CONTROLS AND PROCEDURES OF ONEMAIN FINANCE CORPORATION

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to provide reasonable assurance that information OMFC is required to disclose in reports that OMFC files or submits under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of ~~September 30, 2020,~~March 31, 2021, OMFC carried out an evaluation of the effectiveness of its disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This evaluation was conducted under the supervision of, and with the participation of OMFC’s management, including the Chief Executive Officer and the Chief Financial Officer. Based on the evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that OMFC's disclosure controls and procedures were effective as of ~~September 30, 2020~~March 31, 2021 to provide the reasonable assurance described above.

Changes in Internal Control over Financial Reporting

There were no changes in OMFC's internal control over financial reporting during the ~~third~~first quarter of ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, OMFC's internal control over financial reporting.

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PART II — OTHER INFORMATION


Item 1. Legal Proceedings.

See Note 1412 of the Notes to the Condensed Consolidated Financial Statements included in this report.


Item 1A. Risk Factors.

In light of recent developments related to COVID-19 and the adoption of ASU 2016-13, we are supplementing our risk factors. The following supplemental risk factors should be read in conjunction with the risk factors contained in Item 1A and the information under “Forward-Looking Statements” in our 2019 Annual Report, as filed with the SEC on February 14, 2020.

~~RISKS RELATED TO OUR BUSINESS~~

~~The COVID-19 pandemic is adversely affecting consumer finance businesses including OneMain.~~

The COVID-19 pandemic has resulted in widespread volatility and deterioration in economic conditions across the United States. Governmental authorities have taken a number of steps to combat or slow the spread of COVID-19, including shutdowns of non-essential businesses, stay-at-home orders, social distancing measures, and other actions which have disrupted economic activity. Most states and localities have relaxed their restrictions and reopened their economies, in some cases at reduced capacity. Certain states are experiencing new outbreaks of COVID-19 and have re-imposed shutdowns of restaurants, entertainment, and similar venues. These disruptions and uncertainties related to shutdowns and reopenings have continued to result in a significant reduction in the number of customers at our branch locations and lowered demand for our products, which, combined with our credit tightening, has decreased our loan originations. COVID-19 has also resulted in higher unemployment in the United States, which we expect will over time result in increased delinquencies and credit losses on finance receivables outstanding. In addition, if significant portions of our workforce are unable to work effectively as a result of COVID-19, there may be servicing and other disruptions to our business. Additionally, a large secondary outbreak of COVID-19 could lead to further mandated shutdowns and economic uncertainty. As a result, we cannot foresee whether the outbreak of COVID-19 pandemic will be effectively contained, nor can we predict the severity and duration of its impact.

We believe that many of our customers have benefited from the enhanced benefits provided by the CARES Act, some of which, such as enhanced unemployment benefits, were available from March 2020 through July 2020. If Congress does not enact additional stimulus measures benefiting our customers, the effect may result in an increase in delinquencies and materially and adversely impact our results of operations and financial condition in future periods.

Federal, state and local governments have mandated or encouraged financial services companies to make accommodations to borrowers and other customers affected by COVID-19. Legal and regulatory responses to concerns about COVID-19 could result in additional regulation or restrictions affecting the conduct of our business in the future. All of the foregoing may adversely affect our income and other results of operations or make collection of our personal loans more difficult or reduce income received from such loans or our ability to obtain financing with respect to such loans.

COVID-19 has also caused significant volatility in financial markets and adverse economic conditions and may have significant long-term adverse effects on the U.S. economy, including increased instability in capital markets, declines in business and consumer confidence, reductions in economic activity, increased unemployment and recession, any of which may adversely affect our ability to access the capital markets and could have an adverse impact on our liquidity, our income and our ability to support our operations and other negative impacts on our financial position, results of operations, and prospects.

~~Table of Contents~~

If our estimates of allowance for finance receivable losses are not adequate to absorb actual losses, our provision for finance receivable losses would increase, which would adversely affect our results of operations.

We maintain an allowance for finance receivable losses. To estimate the appropriate level of allowance for finance receivable losses, we consider known and relevant internal and external factors that affect finance receivable collectability, including the total amount of finance receivables outstanding, historical finance receivable charge-offs, our current collection patterns, and current and forecasted economic trends. Our methodology for establishing our allowance for finance receivable losses is based on the guidance from ASC 326, ~~Financial Instruments – Credit Losses~~, which requires us to measure expected credit losses for financial assets at each reporting date. The allowance is primarily based on historical experience, current conditions, and our reasonable and supportable forecast of economic conditions. If customer behavior changes as a result of economic conditions and if we are unable to accurately predict how the unemployment rates, personal bankruptcy filings, and general economic conditions may affect our allowance for finance receivable losses, our allowance for finance receivable losses may be inadequate. Our allowance for finance receivable losses is an estimate, and if actual finance receivable losses are materially greater than our allowance for finance receivable losses, our results of operations could be adversely affected. Neither state regulators nor federal regulators regulate our allowance for finance receivable losses.

~~RISKS RELATED TO FINANCIAL REPORTING~~

Our valuations may include methodologies, models, estimations and assumptions which are subject to differing interpretations and could result in changes to financial assets and liabilities that may materially adversely affect our results of operations and financial condition.

The allowance for finance receivable losses is a critical accounting estimate which requires us to use significant estimates and assumptions to determine the appropriate level of allowance. We estimate the allowance for finance receivable losses primarily on historical loss experience using a cumulative loss model applied to our finance receivable portfolio. Our gross loss expectation is offset by the estimate of future recoveries using historical recovery curves on the active portfolio along with accounts that were previously charged-off. We adjust the amounts determined by the model for the impact of management’s economic forecast, such as the levels of unemployment and personal bankruptcy filings, and the effects of model imprecision which include any changes to underwriting criteria and portfolio seasoning. If we are unable to predict certain of these assumptions accurately, our allowance for finance receivable losses may be inadequate. If actual finance receivable losses are materially greater than our allowance for finance receivable losses, our results of operations, financial condition, and liquidity could be adversely affected.

We use estimates, assumptions, and judgments when certain financial assets and liabilities are measured and reported at fair value. Fair values and the information used to record valuation adjustments for certain assets and liabilities are based on quoted market prices and/or other observable inputs provided by independent third-party sources, when available. During periods of market disruption, including periods of significantly rising or high interest rates, rapidly widening credit spreads or illiquidity, it may be difficult to value certain assets if trading becomes less frequent or market data becomes less observable. In such cases, certain asset valuations may require significant judgment, and may include inputs and assumptions that require greater estimation, including credit quality, liquidity, interest rates and other relevant inputs. Changes in underlying factors, assumptions, or estimates in any of these areas could have a material adverse effect on our results of operations, financial condition, and liquidity.

There have been no ~~other~~ material changes to our risk factors included in Part I, Item 1A of our ~~2019~~ Annual ~~Report on Form 10-K.~~Report.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.


Item 3. Defaults Upon Senior Securities.

None.


Item 4. Mine Safety Disclosures.

None.


Item 5. Other Information.

None.

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Item 6. Exhibit Index.


Exhibit Number						Description





















1.1						Underwriting Agreement, dated February 11, 2021, among OneMain Holdings, Inc., OMH (ML), L.P. and V-OMH (ML) II, L.P., as selling stockholders, and Barclays Capital Inc. and Citigroup Global Markets Inc., as representatives of the several underwriters named therein, incorporated by reference to Exhibit 1.1 to OMH’s Current Report on Form 8-K filed on February 16, 2021.

31.1						Rule 13a-14(a)/15d-14(a) Certifications of the President and Chief Executive Officer of OneMain Holdings, Inc.

31.2						Rule 13a-14(a)/15d-14(a) Certifications of the Executive Vice President and Chief Financial Officer of OneMain Holdings, Inc.

31.3						Rule 13a-14(a)/15d-14(a) Certifications of the President and Chief Executive Officer of OneMain Finance Corporation

31.4						Rule 13a-14(a)/15d-14(a) Certifications of the Executive Vice President and Chief Financial Officer of OneMain Finance Corporation

32.1						Section 1350 Certifications of OneMain Holdings, Inc.

32.2						Section 1350 Certifications of OneMain Finance Corporation

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).

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OMH Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ONEMAIN HOLDINGS, INC.

(Registrant)

Date:

~~October 29, 2020~~April 27, 2021

By:

/s/ Micah R. Conrad

Micah R. Conrad

Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)

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OMFC Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ONEMAIN FINANCE CORPORATION

(Registrant)

Date:

~~October 29, 2020~~April 27, 2021

By:

/s/ Micah R. Conrad

Micah R. Conrad

Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)

7658


(dollars in millions)	Personal Loans		Real Estate Loans		Total

Three Months Ended September 30, 2020
TDR average net receivables	$	701	$	49	$	750
TDR finance charges recognized	13		1		14

Three Months Ended September 30, 2019
TDR average net receivables	$	571	$	55	$	626
TDR finance charges recognized	11		1		12

Nine Months Ended September 30, 2020
TDR average net receivables	$	692	$	51	$	743
TDR finance charges recognized	38		2		40

Nine Months Ended September 30, 2019
TDR average net receivables	$	525	$	59	$	584
TDR finance charges recognized	35		2		37




At or for the Nine Months Ended September 30, 2019
Interest income	$	3,013	$	7	$	0	$	3,020
Interest expense	700		4		13		717
Provision for finance receivable losses	816		0		20		836
Net interest income after provision for finance receivable losses	1,497		3		(33)		1,467
Other revenues *	442		26		(8)		460
Other expenses	1,125		31		16		1,172
Income (loss) before income tax expense (benefit)	$	814	$	(2)	$	(57)	$	755

Assets	$	20,276	$	82	$	2,052	$	22,410


Topic						Page


Forward-Looking Statements						4535
Overview						4737
Recent Developments and Outlook						4838
Results of Operations						5140
Segment Results						5643
Credit Quality						5845
Liquidity and Capital Resources						6349
Off-Balance Sheet Arrangements						6853
Critical Accounting Policies and Estimates						6853
Recent Accounting Pronouncements						6953
Seasonality						6953


	September 30,
(dollars in millions)	2020		2019






Net finance receivables held for sale:
Other receivables	$	54	$	70