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 ~~March 31,~~September 30, 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 ~~April 19,~~October 15, 2021, there were ~~134,477,096~~131,356,199 shares of OneMain Holdings, Inc’s common stock, $0.01 par value, outstanding.

At ~~April 19,~~October 15, 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	67
	Condensed Consolidated Statements of Operations	78
	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~	89
	Condensed Consolidated Statements of Shareholders’ Equity	910
	Condensed Consolidated Statements of Cash Flows	1012
	Financial Statements of OneMain Finance Corporation and Subsidiaries (Unaudited):
	Condensed Consolidated Balance Sheets	1113
	Condensed Consolidated Statements of Operations	1214
	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~	1315
	Condensed Consolidated Statements of Shareholder’s Equity	1416
	Condensed Consolidated Statements of Cash Flows	1518
	Notes to the Condensed Consolidated Financial Statements	1619
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3438
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5360
Item 4.	Controls and Procedures	5461
	Controls and Procedures of OneMain Holdings, Inc.	5461
	Controls and Procedures of OneMain Finance Corporation	5461

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	5562
Item 1A.	Risk Factors	5562
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5562
Item 3.	Defaults Upon Senior Securities	5562
Item 4.	Mine Safety Disclosures	5562
Item 5.	Other Information	5562
Item 6.	Exhibit Index	5663

SIGNATURES
	OneMain Holdings, Inc. Signature	5764
	OneMain Finance Corporation Signature	5865

Table of Contents

GLOSSARY

Terms and abbreviations used in this report are defined below.


Term or Abbreviation						Definition


30-89 Delinquency ratio						net finance receivables 30-89 days past due as a percentage of net finance receivables















3.875% Senior Notes due 2028						$600 million of 3.875% Senior Notes due 2028 issued by OMFC on August 11, 2021 and guaranteed by OMH
ABS						asset-backed securities

Adjusted pretax income (loss)						a non-GAAP financial measure used by management as a key performance measure of our segment
AETR						annual effective tax rate
AHL						American Health and Life Insurance Company, an insurance subsidiary of OneMain Financial Holdings, LLC


Annual Report						the Annual Report on Form 10-K of OMH and OMFC for the fiscal year ended December 31, 2020, filed with the SEC on February 9, 2021
~~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

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

Base Indenture						OMFC Indenture, dated as of December 3, 2014
CAA						Consolidated Appropriations Act of 2021 signed into law on December 27, 2020
CARES Act						Coronavirus Aid, Relief, and Economic Security Act signed into law on March 27, 2020
C&I						Consumer and Insurance
CDO						collateralized debt obligations




CMBS						commercial mortgage-backed securities



Concurrent Share Buyback						the purchase of 1,700,000 shares of OMH common stock by OMH in accordance with a July 2021 underwriting agreement, and completed on August 3, 2021
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


FICO score						a credit score created by Fair Isaac Corporation




GAAP						generally accepted accounting principles in the United States of America
GAP						guaranteed asset protection

Gross charge-off ratio						annualized gross charge-offs as a percentage of average net receivables
Gross finance receivables						the unpaid principal balance of our personal loans. For precompute loans, unpaid principal balance is the gross contractual payments less the unaccreted balance of unearned finance charges


~~Guaranty Agreements~~Indenture						~~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~~Base Indenture, together with all subsequent Supplemental Indentures





Junior Subordinated Debenture						$350 million aggregate principal amount of 60-year junior subordinated debt issued by OMFC under an indenture dated January 22, 2007, by and between OMFC and Deutsche Bank Trust Company, as trustee, and guaranteed by OMH

Table of Contents


Term or Abbreviation						Definition

Managed receivables						consist of our net finance receivables and finance receivables serviced for our whole loan sale partners
Net charge-off ratio						annualized net charge-offs as a percentage of average net receivables
Net interest income						interest income less interest expense

ODART						OneMain Direct Auto Receivables Trust






OMFC						OneMain Finance Corporation (formerly Springleaf Finance Corporation)

~~Table of Contents~~


~~Term or Abbreviation~~						~~Definition~~

OMFIT						OneMain Financial Issuance Trust
OMH						OneMain Holdings, Inc.

OneMain						OneMain Financial Holdings, LLC, collectively with its subsidiaries

Other securities						primarily consist of equity securities and those securities for which the fair value option was elected. Other securities recognize unrealized gains and losses in investment revenues
~~Other Notes~~						~~collectively, the 8.25% Senior Notes due 2023, 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





SEC						U.S. Securities and Exchange Commission
Securities Act						Securities Act of 1933, as amended
Segment Accounting Basis						a basis used to report the operating results of our C&I segment and our Other components, which reflects our allocation methodologies for certain costs and excludes the impact of applying purchase accounting


Selling Stockholder						an entity managed by affiliates of Apollo Global Management, Inc. that agreed to sell shares of OMH common stock in two secondary public offerings in July and August 2021
SFC						Springleaf Finance Corporation (effective as of July 1, 2020, SFC was renamed to OMFC)



















Social Bond						$750 million of 3.50% Senior Notes due 2027 issued by OMFC on June 22, 2021 and guaranteed by OMH
SpringCastle Portfolio						loans the Company previously owned and now services on behalf of a third party

~~Springleaf~~Supplemental Indentures						~~OMH~~collectively, the following supplements to the Base Indenture: Third Supplemental Indenture, dated as of May 15, 2017; Fourth Supplemental Indenture, dated as of December 8, 2017; Fifth Supplemental Indenture, dated as of March 12, 2018; Sixth Supplemental Indenture, dated as of May 11, 2018; Seventh Supplemental Indenture, dated as of February 22, 2019; Eighth Supplemental Indenture, dated as of May 9, 2019; Ninth Supplemental Indenture, dated as of November 7, 2019; Tenth Supplemental Indenture, dated as of May 14, 2020; Eleventh Supplemental Indenture, dated as of December 17, 2020; Twelfth Supplemental Indenture, dated as of June 22, 2021; and ~~its subsidiaries (other than OneMain)~~Thirteenth Supplemental Indenture, dated as of August 11, 2021



Tax Act						Public Law 115-97 amending the Internal Revenue Code of 1986
TDR finance receivables						troubled debt restructured finance receivables. Debt restructuring in which a concession is granted to the borrower as a result of economic or legal reasons related to the borrower’s financial difficulties

Thirteenth Supplemental Indenture						Thirteenth Supplemental Indenture, dated as of August 11, 2021, to the Base Indenture
Triton						Triton Insurance Company, an insurance subsidiary of OneMain Financial Holdings, LLC

Twelfth Supplemental Indenture						Twelfth Supplemental Indenture, dated as of June 22, 2021, to the Base Indenture
Underwriter						a third party that agreed to purchase OMH common stock from the Selling Stockholder in two secondary public offerings in July and August 2021
Unearned finance charges						the amount of interest that is capitalized at time of origination on a precompute loan that will be earned over the remaining contractual life of the loan

Unsecured Notes						the notes, on a senior unsecured basis, issued by OMFC and guaranteed by OMH
Värde						Värde Partners, Inc.

Table of Contents


Term or Abbreviation						Definition

VIEs						variable interest entities

Weighted average interest rate						annualized interest expense as a percentage of average debt
XBRL						eXtensible Business Reporting Language
Yield						annualized finance charges as a percentage of average net receivables

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) 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



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

Assets
Cash and cash equivalents	$	821	$	2,272
Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.9 billion and $1.8 billion in 2021, respectively, and $1.8 billion and $1.7 billion in 2020, respectively)	1,963		1,922
Net finance receivables (includes loans of consolidated VIEs of $7.7 billion in 2021 and $8.8 billion in 2020)	18,843		18,084
Unearned insurance premium and claim reserves	(750)		(771)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $849 million in 2021 and $1.1 billion in 2020)	(2,061)		(2,269)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	16,032		15,044

Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $445 million in 2021 and $441 million in 2020)	459		451
Goodwill	1,437		1,422
Other intangible assets	278		306

Other assets	973		1,054
Total assets	$	21,963	$	22,471

Liabilities and Shareholders’ Equity
Long-term debt (includes debt of consolidated VIEs of $6.9 billion in 2021 and $7.8 billion in 2020)	$	17,661	$	17,800
Insurance claims and policyholder liabilities	616		621
Deferred and accrued taxes	9		45
Other liabilities (includes other liabilities of consolidated VIEs of $13 million in 2021 and $15 million in 2020)	556		564
Total liabilities	18,842		19,030
Contingencies (Note 12)	0		0

Shareholders’ equity:
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized, 131,453,207 and 134,341,724 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	1		1
Additional paid-in capital	1,665		1,655
Accumulated other comprehensive income	77		94
Retained earnings	1,554		1,691
Treasury stock, at cost; 3,047,844 shares at September 30, 2021 and no shares at December 31, 2020, respectively	(176)		—
Total shareholders’ equity	3,121		3,441
Total liabilities and shareholders’ equity	$	21,963	$	22,471

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

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

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



	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions, except per share amounts)	2021		2020		2021		2020

Interest income	$	1,113	$	1,089	$	3,244	$	3,273

Interest expense	237		255		703		781

Net interest income	876		834		2,541		2,492

Provision for finance receivable losses	226		231		356		1,186

Net interest income after provision for finance receivable losses	650		603		2,185		1,306

Other revenues:
Insurance	109		109		323		334
Investment	14		17		47		56

Net loss on repurchases and repayments of debt	(1)		(38)		(49)		(38)

Other	33		13		75		38
Total other revenues	155		101		396		390

Other expenses:
Salaries and benefits	229		186		613		568
Other operating expenses	155		134		457		425
Insurance policy benefits and claims	45		43		125		201
Total other expenses	429		363		1,195		1,194

Income before income taxes	376		341		1,386		502

Income taxes	88		91		335		131

Net income	$	288	$	250	$	1,051	$	371

Share Data:
Weighted average number of shares outstanding:
Basic	132,487,234		134,321,929		133,709,146		134,847,170
Diluted	132,924,333		134,507,549		134,096,382		134,999,487
Earnings per share:
Basic	$	2.17	$	1.86	$	7.86	$	2.75
Diluted	$	2.17	$	1.86	$	7.84	$	2.75

Three Months Ended
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).

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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)	2021		2020		2021		2020

Net income	$	288	$	250	$	1,051	$	371

Other comprehensive income (loss):
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities	(9)		16		(34)		49

Foreign currency translation adjustments	(2)		2		1		(3)
Other	1		—		12		—
Income tax effect:
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities	2		(4)		8		(11)


Foreign currency translation adjustments	—		—		—		1
Other	—		—		(3)		—
Other comprehensive income (loss), net of tax, before reclassification adjustments	(8)		14		(16)		36
Reclassification adjustments included in net income, net of tax:
Net realized losses on available-for-sale securities, net of tax	—		—		(1)		(1)

Reclassification adjustments included in net income, net of tax	—		—		(1)		(1)
Other comprehensive income (loss), net of tax	(8)		14		(17)		35

Comprehensive income	$	280	$	264	$	1,034	$	406

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

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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		Treasury Stock		Total Shareholders’ Equity

Three Months Ended September 30, 2021
Balance, July 1, 2021	$	1	$	1,661	$	85	$	1,825	$	(35)	$	3,537
Common stock repurchased	—		—		—		—		(141)		(141)
Share-based compensation expense, net of forfeitures	—		4		—		—		—		4

Other comprehensive loss	—		—		(8)		—		—		(8)
Cash dividends *	—		—		—		(559)		—		(559)
Net income	—		—		—		288		—		288
Balance, September 30, 2021	$	1	$	1,665	$	77	$	1,554	$	(176)	$	3,121

Three Months Ended September 30, 2020
Balance, July 1, 2020	$	1	$	1,648	$	65	$	1,457	$	—	$	3,171

Share-based compensation expense, net of forfeitures	—		3		—		—		—		3

Other comprehensive income	—		—		14		—		—		14
Cash dividends *	—		—		—		(315)		—		(315)
Net income	—		—		—		250		—		250
Balance, September 30, 2020	$	1	$	1,651	$	79	$	1,392	$	—	$	3,123

* Cash dividends declared were $4.20 per share and $2.33 per share during the three months ended September 30, 2021 and 2020, respectively.

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

Table of Contents


ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) (Continued)

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

Nine Months Ended September 30, 2021
Balance, January 1, 2021	$	1	$	1,655	$	94	$	1,691	$	—	$	3,441
Common stock repurchased	—		—		—		—		(176)		(176)
Share-based compensation expense, net of forfeitures	—		16		—		—		—		16
Withholding tax on share-based compensation	—		(6)		—		—		—		(6)
Other comprehensive loss	—		—		(17)		—		—		(17)
Cash dividends (a)	—		—		—		(1,188)		—		(1,188)
Net income	—		—		—		1,051		—		1,051
Balance, September 30, 2021	$	1	$	1,665	$	77	$	1,554	$	(176)	$	3,121

Nine Months Ended September 30, 2020
Balance, January 1, 2020 (pre-adoption)	$	1	$	1,689	$	44	$	2,596	$	—	$	4,330
Net impact of adoption of ASU 2016-13 (b)	—		—		—		(828)		—		(828)
Balance, January 1, 2020 (post-adoption)	1		1,689		44		1,768		—		3,502
Common stock repurchased (c)	—		(45)		—		—		—		(45)
Share-based compensation expense, net of forfeitures	—		13		—		—		—		13
Withholding tax on share-based compensation	—		(6)		—		—		—		(6)
Other comprehensive income	—		—		35		—		—		35
Cash dividends (a)	—		—		—		(747)		—		(747)
Net income	—		—		—		371		—		371
Balance, September 30, 2020	$	1	$	1,651	$	79	$	1,392	$	—	$	3,123

(a) Cash dividends declared were ~~$3.95~~$8.85 per share and ~~$2.83~~$5.49 per share during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020, respectively.

(b) As a result of the adoption of ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, 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).

911

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ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

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) (387)
Common stock repurchased and retired 0 (45)
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



	Nine Months Ended September 30,
(dollars in millions)	2021		2020

Cash flows from operating activities
Net income	$	1,051	$	371
Reconciling adjustments:
Provision for finance receivable losses	356		1,186
Depreciation and amortization	197		196
Deferred income tax charge (benefit)	57		(72)
Net loss on repurchases and repayments of debt	49		38
Share-based compensation expense, net of forfeitures	16		13

Other	(34)		5
Cash flows due to changes in other assets and other liabilities	(53)		(108)
Net cash provided by operating activities	1,639		1,629

Cash flows from investing activities
Net principal originations of finance receivables	(1,738)		(278)

Proceeds from sales of finance receivables	361		—
Available-for-sale securities purchased	(347)		(341)
Available-for-sale securities called, sold, and matured	294		383
Other securities purchased	(706)		(11)
Other securities called, sold, and matured	691		11
Other, net	(54)		(21)
Net cash used for investing activities	(1,499)		(257)

Cash flows from financing activities
Proceeds from issuance of long-term debt, net of issuance costs	2,168		6,445
Repayment of long-term debt	(2,384)		(6,212)
Cash dividends	(1,185)		(745)
Common stock repurchased	(176)		(45)
Withholding tax on share-based compensation	(6)		(6)
Net cash used for financing activities	(1,583)		(563)



Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	(1,443)		809
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	2,723		1,632
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	1,280	$	2,441

Supplemental cash flow information
Cash and cash equivalents	$	821	$	1,944
Restricted cash and restricted cash equivalents	459		497
Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	1,280	$	2,441

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) 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 Shareholder's 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 92 47
Other liabilities (includes other liabilities of consolidated VIEs of $14 million in 2021 and $15 million
    in 2020)
484 563
Total liabilities 17,979 19,031
Contingencies (Note 12) 0 0
Shareholder's equity:
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 1,901 1,899
Accumulated other comprehensive income 80 94
Retained earnings 1,320 1,442
Total shareholder's equity 3,306 3,440
Total liabilities and shareholder's equity $ 21,285 $ 22,471

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

~~Table of Contents~~

~~ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES~~

~~Condensed Consolidated Statements of Operations (Unaudited)~~

Three Months Ended
March 31,
(dollars in millions) 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

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

~~Table of Contents~~

~~ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES~~

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

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)



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

Assets
Cash and cash equivalents	$	798	$	2,272
Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.9 billion and $1.8 billion in 2021, respectively, and $1.8 billion and $1.7 billion in 2020, respectively)	1,963		1,922
Net finance receivables (includes loans of consolidated VIEs of $7.7 billion in 2021 and $8.8 billion in 2020)	18,843		18,084
Unearned insurance premium and claim reserves	(750)		(771)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $849 million in 2021 and $1.1 billion in 2020)	(2,061)		(2,269)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	16,032		15,044


Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $445 million in 2021 and $441 million in 2020)	459		451
Goodwill	1,437		1,422
Other intangible assets	278		306

Other assets	972		1,054
Total assets	$	21,939	$	22,471

Liabilities and Shareholder's Equity
Long-term debt (includes debt of consolidated VIEs of $6.9 billion in 2021 and $7.8 billion in 2020)	$	17,661	$	17,800
Insurance claims and policyholder liabilities	616		621
Deferred and accrued taxes	10		47
Other liabilities (includes other liabilities of consolidated VIEs of $13 million in 2021 and $15 million in 2020)	556		563
Total liabilities	18,843		19,031
Contingencies (Note 12)	0		0

Shareholder's equity:
Common stock, par value $0.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued and outstanding at September 30, 2021 and December 31, 2020	5		5
Additional paid-in capital	1,909		1,899
Accumulated other comprehensive income	77		94
Retained earnings	1,105		1,442

Total shareholder's equity	3,096		3,440
Total liabilities and shareholder's equity	$	21,939	$	22,471

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,
(dollars in millions)	2021		2020		2021		2020




Interest income	$	1,113	$	1,089	$	3,244	$	3,273

Interest expense	237		255		703		781

Net interest income	876		834		2,541		2,492

Provision for finance receivable losses	226		231		356		1,186

Net interest income after provision for finance receivable losses	650		603		2,185		1,306

Other revenues:
Insurance	109		109		323		334
Investment	14		17		47		56


Net loss on repurchases and repayments of debt	(1)		(38)		(49)		(38)

Other	33		13		75		38
Total other revenues	155		101		396		390

Other expenses:
Salaries and benefits	229		186		613		568
Other operating expenses	155		134		457		425
Insurance policy benefits and claims	45		43		125		201
Total other expenses	429		363		1,195		1,194

Income before income taxes	376		341		1,386		502

Income taxes	88		91		335		131

Net income	$	288	$	250	$	1,051	$	371

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

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ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)



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

Net income	$	288	$	250	$	1,051	$	371

Other comprehensive income (loss):
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities	(9)		16		(34)		49


Foreign currency translation adjustments	(2)		2		1		(3)

Other	1		—		12		—
Income tax effect:
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities	2		(4)		8		(11)


Foreign currency translation adjustments	—		—		—		1
Other	—		—		(3)		—
Other comprehensive income (loss), net of tax, before reclassification adjustments	(8)		14		(16)		36
Reclassification adjustments included in net income, net of tax:
Net realized losses on available-for-sale securities, net of tax	—		—		(1)		(1)
Reclassification adjustments included in net income, net of tax	—		—		(1)		(1)
Other comprehensive income (loss), net of tax	(8)		14		(17)		35

Comprehensive income	$	280	$	264	$	1,034	$	406

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

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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, 2021
Balance, July 1, 2021	$	5	$	1,905	$	85	$	1,535	$	3,530

Share-based compensation expense, net of forfeitures	—		4		—		—		4

Other comprehensive loss	—		—		(8)		—		(8)
Cash dividends	—		—		—		(718)		(718)
Net income	—		—		—		288		288
Balance, September 30, 2021	$	5	$	1,909	$	77	$	1,105	$	3,096

Three Months Ended September 30, 2020
Balance, July 1, 2020	$	5	$	1,892	$	65	$	1,208	$	3,170

Share-based compensation expense, net of forfeitures	—		3		—		—		3

Other comprehensive income	—		—		14		—		14
Cash dividends	—		—		—		(315)		(315)
Net income	—		—		—		250		250
Balance, September 30, 2020	$	5	$	1,895	$	79	$	1,143	$	3,122

OneMain Finance Corporation 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

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ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) (Continued)

	OneMain Finance Corporation Shareholder's Equity
(dollars in millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Shareholders’ Equity

Nine Months Ended September 30, 2021
Balance, January 1, 2021	$	5	$	1,899	$	94	$	1,442	$	3,440

Share-based compensation expense, net of forfeitures	—		16		—		—		16
Withholding tax on share-based compensation	—		(6)		—		—		(6)
Other comprehensive loss	—		—		(17)		—		(17)
Cash dividends	—		—		—		(1,388)		(1,388)
Net income	—		—		—		1,051		1,051
Balance, September 30, 2021	$	5	$	1,909	$	77	$	1,105	$	3,096

Nine Months Ended September 30, 2020
Balance, January 1, 2020 (pre-adoption)	$	5	$	1,888	$	44	$	2,388	$	4,325
Net impact of adoption of ASU 2016-13 *	—		—		—		(828)		(828)
Balance, January 1, 2020 (post-adoption)	5		1,888		44		1,560		3,497

Share-based compensation expense, net of forfeitures	—		13		—		—		13
Withholding tax on shared-based compensation	—		(6)		—		—		(6)
Other comprehensive income	—		—		35		—		35
Cash dividends	—		—		—		(788)		(788)
Net income	—		—		—		371		371
Balance, September 30, 2020	$	5	$	1,895	$	79	$	1,143	$	3,122

* 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).

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ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

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



	Nine Months Ended September 30,
(dollars in millions)	2021		2020

Cash flows from operating activities
Net income	$	1,051	$	371
Reconciling adjustments:
Provision for finance receivable losses	356		1,186
Depreciation and amortization	197		196
Deferred income tax charge (benefit)	57		(72)
Net loss on repurchases and repayments of debt	49		38
Share-based compensation expense, net of forfeitures	16		13

Other	(34)		5
Cash flows due to changes in other assets and other liabilities	(50)		(112)
Net cash provided by operating activities	1,642		1,625

Cash flows from investing activities
Net principal originations of finance receivables	(1,738)		(278)



Proceeds from sales of finance receivables	361		—
Available-for-sale securities purchased	(347)		(341)
Available-for-sale securities called, sold, and matured	294		383
Other securities purchased	(706)		(11)
Other securities called, sold, and matured	691		11
Other, net	(53)		(21)
Net cash used for investing activities	(1,498)		(257)

Cash flows from financing activities
Proceeds from issuance of long-term debt, net of issuance costs	2,168		6,445
Repayment of long-term debt	(2,384)		(6,212)






Cash dividends	(1,388)		(786)

Withholding tax on share-based compensation	(6)		(6)
Net cash used for financing activities	(1,610)		(559)





Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	(1,466)		809
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	2,723		1,632
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	1,257	$	2,441






Supplemental cash flow information
Cash and cash equivalents	$	798	$	1,944
Restricted cash and restricted cash equivalents	459		497
Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	1,257	$	2,441

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

~~March 31,~~September 30, 2021


1. Business and Basis of 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.

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.

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, except where otherwise indicated. 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 ~~March 31,~~September 30, 2021, the Apollo-Värde Group owned approximately ~~34.0%~~13.4% 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.

The condensed consolidated financial statements in this report should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report. We follow the same significant accounting policies for our interim reporting.

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2. Recent Accounting Pronouncements

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. The amendments in this ASU become effective for the Company beginning January 1, ~~2023, as a result of the FASB issuing a one-year deferral of this ASU for public companies.~~2023.

We have a cross-functional implementation team and a project plan to ensure we comply with all the amendments in this ASU at the time of adoption. We have selected a vendor for a software solution to meet the new accounting and disclosure requirements of the ASU and 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.


3. Finance Receivables

Our finance receivables consist of personal loans, which are non-revolving, with a ~~fixed-rate,~~fixed rate, fixed terms generally between three and six years, and are secured by automobiles, other titled collateral, or are unsecured.

Components of our net finance receivables were as follows:

(dollars in millions) March 31, 2021 December 31, 2020
Gross finance receivables * $ 17,363 $ 17,860
Unearned points and fees (210) (225)
Accrued finance charges 268 299
Deferred origination costs 143 150
Total $ 17,564 $ 18,084


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



Gross finance receivables *	$	18,610	$	17,860
Unearned points and fees	(226)		(225)
Accrued finance charges	282		299
Deferred origination costs	177		150
Total	$	18,843	$	18,084

* Gross finance receivables equal 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.

WHOLE LOAN SALE TRANSACTIONS

As of September 30, 2021, we have whole loan sale flow agreements, with remaining terms ranging between one to two years, with third-party buyers in which we agreed to sell a combined total of $180 million gross receivables per quarter of newly originated unsecured personal loans along with any associated accrued interest. 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 gain on sales and servicing fees are recorded in other revenue. Our first sale was executed in the first quarter of 2021. During the three and nine months ended September 30, 2021, we sold $160 million and $325 million of gross finance receivables, respectively. The gain on the sales were $15 million and $30 million during the three and nine months ended September 30, 2021, respectively.

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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 ~~$20~~$18 million and ~~$28~~$52 million during the three and nine months ended ~~March 31,~~September 30, 2021, respectively, and $16 million and $66 million during the three and nine months ended September 30, 2020, respectively. Finance charges recognized from the contractual interest portion of payments received on nonaccrual finance receivables totaled $4$2 million and $10 million during the three and nine months ended ~~March 31,~~September 30, 2021, respectively, and ~~2020.~~$3 million and $12 million during the three and nine months ended September 30, 2020, respectively. All loans in nonaccrual status are considered in our estimate of allowance for finance receivable losses.

~~Table of Contents~~

The following tables below are a summary of our finance receivables by the year of origination and number of days delinquent, our key credit quality indicator:


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

March 31, 2021
September 30, 2021																September 30, 2021
Performing	Performing															Performing
Current	Current	$	2,193	$	7,488	$	4,860	$	1,703	$	500	$	224	$	16,968	Current	$	8,435	$	4,947	$	3,283	$	1,063	$	270	$	135	$	18,133
30-59 days past due	30-59 days past due	1		62		57		22		9		6		157		30-59 days past due	73		84		64		23		8		6		258
60-89 days past due	60-89 days past due	0		47		45		17		6		4		119		60-89 days past due	38		57		40		14		5		3		157
Total performing	Total performing	2,194		7,597		4,962		1,742		515		234		17,244		Total performing	8,546		5,088		3,387		1,100		283		144		18,548
Nonperforming (Nonaccrual)	Nonperforming (Nonaccrual)															Nonperforming (Nonaccrual)
90-179 days past due	90-179 days past due	0		103		131		49		18		10		311		90-179 days past due	36		122		89		30		10		6		293
180 days or more past due	180 days or more past due	0		2		5		1		1		0		9		180 days or more past due	—		1		1		—		—		—		2
Total nonperforming	Total nonperforming	0		105		136		50		19		10		320		Total nonperforming	36		123		90		30		10		6		295
Total	Total	$	2,194	$	7,702	$	5,098	$	1,792	$	534	$	244	$	17,564	Total	$	8,582	$	5,211	$	3,477	$	1,130	$	293	$	150	$	18,843


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

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

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TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES

Information regarding TDR finance receivables were as follows:


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



TDR gross finance receivables	TDR gross finance receivables	$	687	$	689	TDR gross finance receivables	$	652	$	689
TDR net finance receivables *	TDR net finance receivables *	690		691		TDR net finance receivables *	656		691
Allowance for TDR finance receivable losses	Allowance for TDR finance receivable losses	311		314		Allowance for TDR finance receivable losses	281		314

* TDR net finance receivables — are 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 were as follows:

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

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

~~Table of Contents~~


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


TDR average net finance receivables	$	665	$	701	$	681	692
TDR finance charges recognized	13		13		40		38

Information regarding the new volume of the TDR finance receivables were as follows:

Three Months Ended March 31,
(dollars in millions) 2021 2020
Pre-modification TDR net finance receivables $ 116 $ 158
Post-modification TDR net finance receivables:
Rate reduction 78 100
Other * 38 58
Total post-modification TDR net finance receivables $ 116 $ 158
Number of TDR accounts 14,508 21,818


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


Pre-modification TDR net finance receivables	$	105	$	105	$	332	$	392
Post-modification TDR net finance receivables:
Rate reduction	72		67		228		242
Other *	33		38		104		150
Total post-modification TDR net finance receivables	$	105	$	105	$	332	$	392
Number of TDR accounts	12,528		13,581		40,727		52,780

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

Finance receivables that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause the TDR finance receivables to be considered nonperforming (90 days or more past due) are reflected in the following table:

Three Months Ended March 31,
(dollars in millions) 2021 2020
TDR net finance receivables * $ 30 $ 31
Number of TDR accounts 4,183 4,552


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





TDR net finance receivables *	$	31	$	20	$	88	$	77
Number of TDR accounts	4,221		2,947		12,147		11,286

* Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted.

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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~~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. Our allowance for finance receivable losses may fluctuate based upon changes in portfolio growth, credit quality, and economic conditions.

Our current methodology to estimate expected credit losses used the most recent macroeconomic forecasts, which incorporated the ~~projected~~ impacts and expected recovery offrom 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 ~~March 31,~~September 30, 2021, our economic forecast used a reasonable and supportable period of 12 months. The ~~decrease~~increase in our allowance for finance receivable losses for the three months ended ~~March 31,~~September 30, 2021 was primarily due to growth in our loan portfolio. The decrease in our allowance for finance receivable losses for the ~~expectation of~~nine months ended September 30, 2021 was primarily due to an improved outlook for unemployment and ~~anticipated economic recovery from the COVID-19 pandemic.~~macroeconomic conditions, partially offset by growth in our loan portfolio. In the near-term, we may experience further changes to the 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 March 31,
(dollars in millions) 2021 2020
Balance at beginning of period $ 2,269 $ 829
Impact of adoption of ASU 2016-13 * — 1,118
Provision for finance receivable losses (2) 531
Charge-offs (255) (337)
Recoveries 50 41
Balance at end of period $ 2,062 $ 2,182


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

















Balance at beginning of period	$	2,000	$	2,324	$	2,269	$	829
Impact of adoption of ASU 2016-13 *	—		—		—		1,118
Provision for finance receivable losses	226		231		356		1,186
Charge-offs	(223)		(274)		(730)		(931)
Recoveries	58		43		166		122
Balance at end of period	$	2,061	$	2,324	$	2,061	$	2,324

* 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 and a corresponding 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.

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

(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 %


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

Allowance for finance receivable losses:
Collectively evaluated for impairment	$	1,780		$	1,955

TDR finance receivables	281			314
Total	$	2,061		$	2,269

Finance receivables:
Collectively evaluated for impairment	$	18,187		$	17,393

TDR net finance receivables	656			691
Total	$	18,843		$	18,084

Allowance for finance receivable losses as a percentage of finance receivables	10.94		%	12.55		%

2023

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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) Cost/
Amortized
Cost Unrealized
Gains Unrealized
Losses Fair
Value
March 31, 2021*
Fixed maturity available-for-sale securities:
U.S. government and government sponsored entities $ 11 $ 0 $ 0 $ 11
Obligations of states, municipalities, and political subdivisions 85 3 0 88
Commercial paper 49 0 0 49
Non-U.S. government and government sponsored entities 141 6 0 147
Corporate debt 1,175 65 (6) 1,234
Mortgage-backed, asset-backed, and collateralized:
RMBS 191 5 (1) 195
CMBS 54 2 0 56
CDO/ABS 85 2 0 87
Total $ 1,791 $ 83 $ (7) $ 1,867
December 31, 2020*
Fixed maturity available-for-sale securities:
U.S. government and government sponsored entities $ 12 $ 0 $ 0 $ 12
Obligations of states, municipalities, and political subdivisions 87 5 0 92
Commercial paper 28 0 0 28
Non-U.S. government and government sponsored entities 137 9 0 146
Corporate debt 1,124 95 (1) 1,218
Mortgage-backed, asset-backed, and collateralized:
RMBS 208 7 0 215
CMBS 55 3 0 58
CDO/ABS 77 2 (1) 78
Total $ 1,728 $ 121 $ (2) $ 1,847


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

September 30, 2021*
Fixed maturity available-for-sale securities:
U.S. government and government sponsored entities	$	14	$	—	$	—	$	14
Obligations of states, municipalities, and political subdivisions	80		4		—		84
Commercial paper	28		—		—		28
Non-U.S. government and government sponsored entities	143		5		—		148
Corporate debt	1,213		72		(3)		1,282
Mortgage-backed, asset-backed, and collateralized:
RMBS	177		4		(1)		180
CMBS	50		2		—		52
CDO/ABS	83		1		—		84
Total	$	1,788	$	88	$	(4)	$	1,872

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

* There was 0no material allowance for credit losses related to our investment securities as of ~~March 31,~~September 30, 2021 and there was no allowance for credit losses as of December 31, 2020.

Interest receivables reported in “Other assets” totaled $13 million and $12 million as of ~~March 31,~~September 30, 2021 and December 31, 2020, respectively. There were no amounts reversed from investment revenue for available-for-sale securities for the three and nine months ended ~~March 31,~~September 30, 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					Less Than 12 Months				12 Months or Longer				Total
(dollars in millions)	(dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		(dollars in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

March 31, 2021

September 30, 2021														September 30, 2021
U.S. government and government sponsored entities														U.S. government and government sponsored entities	$	1	$	—	$	—	$	—	$	1	$	—
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	$	9	$	0	$	0	$	0	$	9	$	0	Obligations of states, municipalities, and political subdivisions	7		—		—		—		7		—
Commercial paper	Commercial paper	18		0		0		0		18		0		Commercial paper	1		—		—		—		1		—
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	12		0		1		0		13		0		Non-U.S. government and government sponsored entities	21		—		1		—		22		—
Corporate debt	Corporate debt	174		(5)		22		(1)		196		(6)		Corporate debt	153		(3)		8		—		161		(3)
Mortgage-backed, asset-backed, and collateralized:	Mortgage-backed, asset-backed, and collateralized:													Mortgage-backed, asset-backed, and collateralized:
RMBS	RMBS	38		(1)		0		0		38		(1)		RMBS	66		(1)		—		—		66		(1)
CMBS		3		0		0		0		3		0

CDO/ABS	CDO/ABS	23		0		6		0		29		0		CDO/ABS	19		—		3		—		22		—
Total	Total	$	277	$	(6)	$	29	$	(1)	$	306	$	(7)	Total	$	268	$	(4)	$	12	$	—	$	280	$	(4)

December 31, 2020	December 31, 2020													December 31, 2020

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

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

On a lot basis, we had ~~368~~379 and 148 investment securities in an unrealized loss position at ~~March 31,~~September 30, 2021 and December 31, 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 March 31,~~as of September 30, 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 ~~March 31,~~September 30, 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 ~~March 31,~~September 30, 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 ~~March 31,~~September 30, 2021 and 2020.

The proceeds of available-for-sale securities sold or redeemed during the three and nine months ended ~~March 31,~~September 30, 2021 totaled $50 million and $189 million, respectively. The proceeds of available-for-sale securities sold or redeemed during the three and nine months ended September 30, 2020 totaled ~~$67~~$74 million and ~~$58~~$179 million, respectively. The net realized gains and losses were immaterial during the three and nine months ended ~~March 31,~~September 30, 2021 and 2020.

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

(dollars in millions) Fair
Value Amortized
Cost
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
Due in 1 year or less $ 176 $ 175
Due after 1 year through 5 years 592 561
Due after 5 years through 10 years 593 568
Due after 10 years 168 157
Mortgage-backed, asset-backed, and collateralized securities 338 330
Total $ 1,867 $ 1,791


(dollars in millions)	Fair Value		Amortized Cost

Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
Due in 1 year or less	$	146	$	145
Due after 1 year through 5 years	577		548
Due after 5 years through 10 years	658		626
Due after 10 years	175		159
Mortgage-backed, asset-backed, and collateralized securities	316		310
Total	$	1,872	$	1,788

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~~$569 million and $604 million at ~~March 31,~~September 30, 2021 and December 31, 2020, respectively.

OTHER SECURITIES

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

(dollars in millions) March 31, 2021 December 31, 2020
Fixed maturity other securities:
Bonds
Non-U.S. government and government sponsored entities $ 1 $ 1
Corporate debt 13 17
Mortgage-backed, asset-backed, and collateralized bonds 23 17
Total bonds 37 35
Preferred stock * 18 13
Common stock * 29 27
Total $ 84 $ 75


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




Fixed maturity other securities:
Bonds



Non-U.S. government and government sponsored entities	$	—	$	1
Corporate debt	11		17
Mortgage-backed, asset-backed, and collateralized bonds	28		17
Total bonds	39		35
Preferred stock *	22		13
Common stock *	30		27

Total	$	91	$	75

* We employ an income equity strategy targeting investments in stocks with strong current dividend yields. Stocks included have a history of stable or increasing dividend payments.

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

Other securities 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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6. Long-term Debt

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

Senior Debt
(dollars in millions) Securitizations Unsecured
Notes (a) Junior
Subordinated
Debt (a) Total
Interest rates (b) 0.91% - 6.94% 4.00% - 8.88% 1.99 %
Remainder of 2021 $ 0 $ 0 $ 0 $ 0
2022 0 992 0 992
2023 0 1,175 0 1,175
2024 0 1,300 0 1,300
2025 0 1,835 0 1,835
2026-2067 0 3,999 350 4,349
Securitizations (c) 7,424 0 0 7,424
Total principal maturities $ 7,424 $ 9,301 $ 350 $ 17,075
Total carrying amount $ 7,394 $ 9,223 $ 172 $ 16,789
Debt issuance costs (d) $ (27) $ (82) $ 0 $ (109)


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

Interest rates (b)	0.81% - 6.94%		3.50% - 8.88%		1.88		%

Remainder of 2021	$	—	$	—	$	—		$	—
2022	—		992		—			992
2023	—		1,175		—			1,175
2024	—		1,300		—			1,300
2025	—		1,835		—			1,835
2026-2067	—		5,349		350			5,699
Securitizations (c)	6,955		—		—			6,955
Total principal maturities	$	6,955	$	10,651	$	350		$	17,956

Total carrying amount	$	6,924	$	10,565	$	172		$	17,661
Debt issuance costs (d)	$	(28)	$	(89)	$	—		$	(117)

(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 ~~March 31,~~September 30, 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 ~~March 31,~~September 30, 2021, there were 0no amounts drawn under our revolving conduit facilities. See Note 7 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 $3233 million at ~~March 31,~~September 30, 2021 and are reported in “Other assets.”

Redemption of 7.75% Senior Notes Due 2021

On December 9, 2020, OMFC issued a notice of full redemption of its 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. In connection with the redemption, we recognized $47 million of net loss on repurchases and repayments of debt ~~during~~in the ~~three months ended March 31,~~first quarter of 2021.

Social Bond Offering - Issuance of 3.50% Senior Notes Due 2027

OMFC issued its inaugural social bond offering on June 22, 2021 for a total of $750 million aggregate principal amount of 3.50% Senior Notes due 2027 (the “Social Bond”) under the Base Indenture, as supplemented by the Twelfth Supplemental Indenture, pursuant to which OMH provided a guarantee on an unsecured basis.

3.875% Senior Notes Due 2028 Offering

On August 11, 2021, OMFC issued a total of $600 million aggregate principal amount of 3.875% Senior Notes due 2028 (the “3.875% Senior Notes due 2028”) under the Base Indenture, as supplemented by the Thirteenth Supplemental Indenture, pursuant to which OMH provided a guarantee on an unsecured basis.

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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 10 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report 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) March 31, 2021 December 31, 2020
Assets
Cash and cash equivalents $ 2 $ 2
Net finance receivables 8,219 8,772
Allowance for finance receivable losses 955 1,085
Restricted cash and restricted cash equivalents 553 441
Other assets 32 33
Liabilities
Long-term debt $ 7,394 $ 7,789
Other liabilities 14 15


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

Assets
Cash and cash equivalents	$	2	$	2
Net finance receivables	7,731		8,772
Allowance for finance receivable losses	849		1,085
Restricted cash and restricted cash equivalents	445		441
Other assets	33		33

Liabilities
Long-term debt	$	6,924	$	7,789
Other liabilities	13		15

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 ~~$78~~$72 million and ~~$81~~$225 million during the three and nine months ended ~~March 31,~~September 30, 2021, respectively, compared to $84 million and $256 million during the three and nine months ended September 30, 2020, respectively.

SECURITIZED BORROWINGS

Each of our outstanding securitizations contain a revolving period ranging from 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 1314 revolving conduit facilities with a total maximum borrowing capacity of ~~$7.2~~$7.3 billion as of ~~March 31,~~September 30, 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 ~~March 31,~~September 30, 2021. Amounts drawn on these facilities are collateralized by our personal loans.

At ~~March 31,~~September 30, 2021, 0no amounts were drawn under these facilities.

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8. Insurance

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

At or for the
Three Months Ended March 31,
(dollars in millions) 2021 2020
Balance at beginning of period $ 148 $ 117
Less reinsurance recoverables (3) (4)
Net balance at beginning of period 145 113
Additions for losses and loss adjustment expenses incurred to:
Current year 57 77
Prior years * (18) (9)
Total 39 68
Reductions for losses and loss adjustment expenses paid related to:
Current year (18) (17)
Prior years (47) (30)
Total (65) (47)
Foreign currency translation adjustment 0 (1)
Net balance at end of period 119 133
Plus reinsurance recoverables 3 3
Balance at end of period $ 122 $ 136


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

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

Net balance at beginning of period	145		113

Additions for losses and loss adjustment expenses incurred to:
Current year	158		221
Prior years *	(19)		(10)
Total	139		211
Reductions for losses and loss adjustment expenses paid related to:
Current year	(91)		(107)
Prior years	(79)		(60)
Total	(170)		(167)

Net balance at end of period	114		157
Plus reinsurance recoverables	3		3

Balance at end of period	$	117	$	160

* Reflects (i) a redundancy in the prior years’ net reserves of ~~$18~~$19 million at ~~March 31,~~September 30, 2021, primarily due to favorable development of credit disability and unemployment claims during the period, and (ii) a redundancy in the prior years’ net reserves of $9$10 million at ~~March 31,~~September 30, 2020, primarily due to a favorable development of credit life, term life, and credit disability claims during the period.


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 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.

~~Table of Contents~~

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


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020

Balance at beginning of period	133,884,043	134,319,171	134,341,724	136,101,156
Common stock issued	4,653	3,842	159,327	253,555
Common stock repurchased *	(2,435,489)	—	(3,047,844)	(2,031,698)

Balance at end of period	131,453,207	134,323,013	131,453,207	134,323,013

* During the three and nine months ended September 30, 2021, the common stock repurchased were held in treasury. During the nine months ended September 30, 2020, the common stock repurchased was retired.

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

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EARNINGS PER SHARE (OMH ONLY)

The computation of earnings per share was as follows:

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

Numerator (basic and diluted):
Net income $ 413 $ 32
Denominator:
Weighted average number of shares outstanding (basic) 134,405,368 135,909,100
Effect of dilutive securities * 401,797 229,577
Weighted average number of shares outstanding (diluted) 134,807,165 136,138,677
Earnings per share:
Basic $ 3.07 $ 0.24
Diluted $ 3.06 $ 0.24



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

Numerator (basic and diluted):
Net income	$	288	$	250	$	1,051	$	371
Denominator:
Weighted average number of shares outstanding (basic)	132,487,234		134,321,929		133,709,146		134,847,170
Effect of dilutive securities *	437,099		185,620		387,236		152,317
Weighted average number of shares outstanding (diluted)	132,924,333		134,507,549		134,096,382		134,999,487
Earnings per share:
Basic	$	2.17	$	1.86	$	7.86	$	2.75
Diluted	$	2.17	$	1.86	$	7.84	$	2.75

* We have excluded weighted-average unvested restricted stock units totaling ~~133,004~~491,541 and ~~214,752~~256,034 for the three months ended ~~March 31,~~September 30, 2021 and 2020, respectively, and 322,430 and 303,913 for the nine months ended September 30, 2021 and 2020, 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 restricted stock units.

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10. Accumulated Other Comprehensive Income (Loss)

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

(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 March 31, 2021
Balance at beginning of period $ 91 $ 1 $ 2 $ 0 $ 94
Other comprehensive income (loss) before reclassifications (33) 0 2 17 (14)
Balance at end of period $ 58 $ 1 $ 4 $ 17 $ 80
Three Months Ended March 31, 2020
Balance at beginning of period $ 41 $ 3 $ 0 $ 0 $ 44
Other comprehensive loss before reclassifications (42) 0 (8) 0 (50)
Balance at end of period $ (1) $ 3 $ (8) $ 0 $ (6)


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

Three Months Ended September 30, 2021
Balance at beginning of period	$	71	$	1	$	5	$	8	$	85
Other comprehensive income (loss) before reclassifications	(7)		—		(2)		1		(8)

Balance at end of period	$	64	$	1	$	3	$	9	$	77

Three Months Ended September 30, 2020
Balance at beginning of period	$	66	$	3	$	(4)	$	—	$	65
Other comprehensive income before reclassifications	12		—		2		—		14

Balance at end of period	$	78	$	3	$	(2)	$	—	$	79

Nine Months Ended September 30, 2021
Balance at beginning of period	$	91	$	1	$	2	$	—	$	94
Other comprehensive income (loss) before reclassifications	(26)		—		1		9		(16)
Reclassification adjustments from accumulated other comprehensive income	(1)		—		—		—		(1)
Balance at end of period	$	64	$	1	$	3	$	9	$	77

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

Balance at end of period	$	78	$	3	$	(2)	$	—	$	79

(a) There were 0no material amounts related to available-for-sale debt securities for which an allowance for credit losses was recorded during the three and nine months ended ~~March 31, 2021~~September 30, 2021. There were no available-for-sale debt securities for which an allowance for credit losses was recorded during the three and nine months ended September 30, 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 and nine months ended ~~March 31,~~September 30, 2021 and 2020.

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11. Income Taxes

We had a net deferred tax asset of ~~$349~~$354 million and $405 million at ~~March 31,~~September 30, 2021 and December 31, 2020, respectively. The decrease in our net deferred tax asset of ~~$56~~$51 million was primarily due to the tax effect of the decrease in the allowance for finance receivable losses and the ~~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.

The effective tax rate for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 was ~~24.4%~~24.2%, compared to ~~24.3%~~26.1% for the same period in 2020. The effective tax rate for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020 differed from the federal statutory rate of 21% primarily due to the effect of state income taxes.

We are under examination by various states for the years ~~2014~~2017 to 2018. Management believes it has adequately provided for taxes for such years.

Our gross unrecognized tax benefits, including related interest and penalties, totaled $8 million at September 30, 2021 and $10 million at ~~March 31, 2021 and~~ December 31, 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.

During 2020, the Coronavirus Aid, Relief, and Economic Security Act (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. Among other things, the provisions 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~~Based on our review, we have determined the CARES Act, the CAA, orand the ARPA will not have a material impact on our consolidated financial statements. We will continue to monitor legislative developments related to the COVID-19 pandemic.


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.

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.


13. Segment Information

At ~~March 31,~~September 30, 2021, Consumer and Insurance (“C&I”) is our only reportable segment. The remaining components (which we refer to as “Other”) consist of our liquidating SpringCastle Portfolio servicing activity and 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 18 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report.

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

(dollars in millions) Consumer
and
Insurance Other Segment to
GAAP
Adjustment Consolidated
Total
At or for the Three Months Ended March 31, 2021
Interest income $ 1,057 $ 1 $ 2 $ 1,060
Interest expense 233 1 1 235
Provision for finance receivable losses (3) 0 1 (2)
Net interest income after provision for finance receivable losses 827 0 0 827
Other revenues 98 3 (10) 91
Other expenses 358 6 8 372
Income (loss) before income tax expense (benefit) $ 567 $ (3) $ (18) $ 546
Assets $ 19,194 $ 57 $ 2,034 $ 21,285


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

Three Months Ended September 30, 2021
Interest income	$	1,111	$	1	$	1	$	1,113
Interest expense	235		1		1		237
Provision for finance receivable losses	224		—		2		226
Net interest income after provision for finance receivable losses	652		—		(2)		650
Other revenues	151		4		—		155
Other expenses	415		5		9		429
Income (loss) before income tax expense (benefit)	$	388	$	(1)	$	(11)	$	376




Three Months Ended September 30, 2020
Interest income	$	1,086	$	1	$	2	$	1,089
Interest expense	250		1		4		255
Provision for finance receivable losses	232		—		(1)		231
Net interest income after provision for finance receivable losses	604		—		(1)		603
Other revenues	99		4		(2)		101
Other expenses	352		6		5		363
Income (loss) before income tax expense (benefit)	$	351	$	(2)	$	(8)	$	341

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, 2021
Interest income	$	3,237	$	4	$	3	$	3,244
Interest expense	698		3		2		703
Provision for finance receivable losses	351		—		5		356
Net interest income after provision for finance receivable losses	2,188		1		(4)		2,185
Other revenues	395		10		(9)		396
Other expenses	1,154		17		24		1,195
Income (loss) before income tax expense (benefit)	$	1,429	$	(6)	$	(37)	$	1,386

Assets	$	19,897	$	44	$	2,022	$	21,963




At or for the Nine Months Ended September 30, 2020
Interest income	$	3,260	$	4	$	9	$	3,273
Interest expense	765		3		13		781
Provision for finance receivable losses	1,184		—		2		1,186
Net interest income after provision for finance receivable losses	1,311		1		(6)		1,306
Other revenues	380		12		(2)		390
Other expenses	1,161		18		15		1,194
Income (loss) before income tax expense (benefit)	$	530	$	(5)	$	(23)	$	502

Assets	$	19,743	$	63	$	2,051	$	21,857

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14. Fair Value Measurements

The accounting policies of our fair value measurements are the same as those disclosed in Note 3 and Note 19 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual 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
(dollars in millions)	Level 1		Level 2		Level 3

September 30, 2021
Assets
Cash and cash equivalents	$	821	$	—	$	—	$	821	$	821
Investment securities	56		1,901		6		1,963		1,963
Net finance receivables, less allowance for finance receivable losses	—		—		19,845		19,845		16,782
Restricted cash and restricted cash equivalents	459		—		—		459		459
Other assets *	—		—		53		53		49

Liabilities
Long-term debt	$	—	$	18,933	$	—	$	18,933	$	17,661

December 31, 2020
Assets
Cash and cash equivalents	$	2,255	$	17	$	—	$	2,272	$	2,272
Investment securities	44		1,870		8		1,922		1,922
Net finance receivables, less allowance for finance receivable losses	—		—		18,629		18,629		15,815
Restricted cash and restricted cash equivalents	451		—		—		451		451
Other assets *	—		2		60		62		62







Liabilities
Long-term debt	$	—	$	19,426	$	—	$	19,426	$	17,800

Fair Value Measurements Using Total
Fair
Value Total
Carrying
Value
(dollars in millions) Level 1 Level 2 Level 3
March 31, 2021
Assets
Cash and cash equivalents $ 1,298 $ 3 $ 0 $ 1,301 $ 1,301
Investment securities 52 1,891 8 1,951 1,951
Net finance receivables, less allowance for finance receivable losses 0 0 18,447 18,447 15,502
Restricted cash and restricted cash equivalents 571 0 0 571 571
Other assets *
0 3 57 60 60
Liabilities
Long-term debt $ 0 $ 18,082 $ 0 $ 18,082 $ 16,789
December 31, 2020
Assets
Cash and cash equivalents $ 2,255 $ 17 $ 0 $ 2,272 $ 2,272
Investment securities 44 1,870 8 1,922 1,922
Net finance receivables, less allowance for finance receivable losses 0 0 18,629 18,629 15,815
Restricted cash and restricted cash equivalents 451 0 0 451 451
Other assets *
0 2 60 62 62
Liabilities
Long-term debt $ 0 $ 19,426 $ 0 $ 19,426 $ 17,800

*Other assets at ~~March 31,~~September 30, 2021 and December 31, 2020 primarily consists of finance receivables held for 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
(dollars in millions) Level 1 Level 2 Level 3
March 31, 2021
Assets
Cash equivalents in mutual funds $ 881 $ 0 $ 0 $ 881
Cash equivalents in securities 0 3 0 3
Investment securities:
Available-for-sale securities
U.S. government and government sponsored entities 0 11 0 11
Obligations of states, municipalities, and political subdivisions 0 88 0 88
Commercial paper 0 49 0 49
Non-U.S. government and government sponsored entities 0 147 0 147
Corporate debt 5 1,223 6 1,234
RMBS 0 195 0 195
CMBS 0 56 0 56
CDO/ABS 0 87 0 87
Total available-for-sale securities 5 1,856 6 1,867
Other securities
Bonds:
Non-U.S. government and government sponsored entities 0 1 0 1
Corporate debt 0 12 1 13
RMBS 0 1 0 1
CDO/ABS 0 21 1 22
Total bonds 0 35 2 37
Preferred stock 18 0 0 18
Common stock 29 0 0 29
Total other securities 47 35 2 84
Total investment securities 52 1,891 8 1,951
Restricted cash equivalents in mutual funds 560 0 0 560
Total $ 1,493 $ 1,894 $ 8 $ 3,395


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

September 30, 2021
Assets
Cash equivalents in mutual funds	$	204	$	—	$	—	$	204

Investment securities:
Available-for-sale securities

U.S. government and government sponsored entities	—		14		—		14
Obligations of states, municipalities, and political subdivisions	—		84		—		84
Commercial paper	—		28		—		28
Non-U.S. government and government sponsored entities	—		148		—		148
Corporate debt	5		1,273		4		1,282
RMBS	—		180		—		180
CMBS	—		52		—		52
CDO/ABS	—		84		—		84




Total available-for-sale securities	5		1,863		4		1,872
Other securities

Bonds:


Corporate debt	—		10		1		11
RMBS	—		1		—		1

CDO/ABS	—		27		—		27
Total bonds	—		38		1		39
Preferred stock	22		—		—		22
Common stock	29		—		1		30

Total other securities	51		38		2		91
Total investment securities	56		1,901		6		1,963

Restricted cash equivalents in mutual funds	450		—		—		450
Total	$	710	$	1,901	$	6	$	2,617

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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, 2020	December 31, 2020									December 31, 2020
Assets	Assets									Assets
Cash equivalents in mutual funds	Cash equivalents in mutual funds	$	2,018	$	0	$	0	$	2,018	Cash equivalents in mutual funds	$	2,018	$	—	$	—	$	2,018
Cash equivalents in securities	Cash equivalents in securities	0		17		0		17		Cash equivalents in securities	—		17		—		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		12		0		12		U.S. government and government sponsored entities	—		12		—		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	—		92		—		92
Certificates of deposit and commercial paper	Certificates of deposit and commercial paper	0		28		0		28		Certificates of deposit and commercial paper	—		28		—		28
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	0		146		0		146		Non-U.S. government and government sponsored entities	—		146		—		146
Corporate debt	Corporate debt	5		1,207		6		1,218		Corporate debt	5		1,207		6		1,218
RMBS	RMBS	0		215		0		215		RMBS	—		215		—		215
CMBS	CMBS	0		58		0		58		CMBS	—		58		—		58
CDO/ABS	CDO/ABS	0		78		0		78		CDO/ABS	—		78		—		78

Total available-for-sale securities	Total available-for-sale securities	5		1,836		6		1,847		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	—		1		—		1
Corporate debt	Corporate debt	0		16		1		17		Corporate debt	—		16		1		17

CDO/ABS	CDO/ABS	0		17		0		17		CDO/ABS	—		17		—		17
Total bonds	Total bonds	0		34		1		35		Total bonds	—		34		1		35
Preferred stock	Preferred stock	13		0		0		13		Preferred stock	13		—		—		13
Common stock	Common stock	26		0		1		27		Common stock	26		—		1		27

Total other securities	Total other securities	39		34		2		75		Total other securities	39		34		2		75
Total investment securities	Total investment securities	44		1,870		8		1,922		Total investment securities	44		1,870		8		1,922
Restricted cash equivalents in mutual funds	Restricted cash equivalents in mutual funds	441		0		0		441		Restricted cash equivalents in mutual funds	441		—		—		441
Total	Total	$	2,503	$	1,887	$	8	$	4,398	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 ~~March 31,~~September 30, 2021 and 2020, 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 during the three and nine months ended ~~March 31,~~September 30, 2021 and 2020.

FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS

See Note 19 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report 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 and the ~~mitigation efforts by governments and related effects on us, our customers, and employees;~~measures taken in response thereto;

•~~our estimates~~the sufficiency of ~~the~~our 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;~~losses;

•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,~~pandemics 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 (“PII”) of our present or former customers;~~cyber-attacks;

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

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

•increased competition or adverse 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;~~or products;

•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 American Rescue Plan Act of 2021 (the “ARPA”);industry;

~~Table of Contents~~

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

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

•~~a change in the proportion of secured loans may affect our 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;operations;

•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;~~regulations;

•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;~~authority;

•our substantial indebtedness and 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 all 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~~agencies.

Table of ~~and/or access to capital;~~Contents

•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 Part I - Item 1A. “Risk Factors” in our Annual Report and 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 Annual Report, 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~~near-prime customers. Our network of approximately ~~1,500~~1,400 branch offices in 44 states is staffed with expert personnel and is complemented by our centralized operations and 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 rate, fixed terms generally between three and six years, and are secured by automobiles, other titled collateral, or are unsecured. At ~~March 31,~~September 30, 2021, we had approximately ~~2.23~~2.33 million personal loans, of which ~~52%~~51% were secured by titled property, totaling ~~$17.6~~$18.8 billion of net finance receivables, compared to approximately 2.30 million personal loans, of which 53% were secured by titled property, totaling $18.1 billion at December 31, 2020. We also service personal loans for our whole loan sale partners which we commenced during the first quarter of 2021. At September 30, 2021, we managed a combined total of 2.37 million customer accounts and $19.1 billion of managed receivables.

•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 membership plans from 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

At ~~March 31,~~September 30, 2021, Consumer and Insurance (“C&I&I”) is our only reportable segment. The remaining components (which we refer to as “Other”) consist of our liquidating SpringCastle Portfolio servicing activity and our non-originating legacy operations, which primarily include our liquidating real estate loans. See Note 13 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

Credit Cards - BrightWay and BrightWay+

As part of our mission to improve the financial well-being of hardworking Americans, we continue to invest in new products and services that help our customers solve for their present needs while helping them build a stronger financial tomorrow. In the third quarter of 2021, select branches began offering our two credit cards, BrightWay and BrightWay+, giving our customers access to more credit, while also enabling a better financial future. Our credit cards will help customers take concrete steps to improve their financial well-being by offering tangible rewards for credit building behaviors. This is an important milestone for our company as we continue to deepen our existing customer relationships, attract new customers, and become the lender of choice for near-prime consumers. During the remainder of 2021, we will continue to expand our credit cards offering across our branch network, and also introduce direct-to-consumer card marketing.

Issuance and Redemption of Unsecured Debt

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.

Social Bond Offering - Issuance of 3.50% Senior Notes Due 2027

As part of our commitment to improve the financial well-being of hardworking Americans, OMFC issued its inaugural Social Bond offering on June 22, 2021 for a total of $750 million aggregate principal amount of 3.50% Senior Notes due 2027. We intend to allocate an amount equivalent to the net proceeds of the offering to finance or re-finance, in part or in full, a portfolio of new or existing loans that meet the eligibility criteria of the OneMain Social Bond Framework. This offering advances our goal of enabling access to responsible financial products and services for vulnerable and/or historically underserved populations. At least 75% of the loans funded by the Social Bond will be allocated to women and/or minority borrowers as outlined in OneMain’s Social Bond Framework, which is available on OneMain’s Investor Relations website.

Issuance of 3.875% Senior Notes Due 2028

On August 11, 2021, OMFC issued a total of $600 million of aggregate principal amount of 3.875% Senior Notes due 2028.

For further information regarding the issuances and redemption of our unsecured debt, see Note 6 of the Notes to the Condensed Consolidated Financial Statements included in this report.

Securitization Transactions Completed: OMFIT 2021-1 and ODART 2021-1

For information regarding the issuances of our secured debt, see “Liquidity and Capital Resources” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.

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Apollo-Värde Group Share Sales

We entered into two underwriting agreements, in February and April of 2021, with certain entities managed by affiliates of Apollo-Värde Group, in their capacities as selling stockholders (the “Selling Stockholders”), and several underwriters (the “Underwriters”), for sale by the Selling Stockholders of up to 9,200,000 shares per agreement (a combined total of 18,400,000 shares) of OMH’s common stock. The two secondary public offerings closed during the first half of 2021 and resulted in the sale by the Selling Stockholders to the Underwriters of 18,400,000 shares of OMH common stock. We did not receive any proceeds from the sales of the shares by the Selling Stockholders in these transactions.

We entered into two underwriting agreements, in July and August of 2021, with an entity managed by affiliates of Apollo, in its capacity as selling stockholder (the “Selling Stockholder”), and an underwriter (the “Underwriter”) for the sale by the Selling Stockholder of up to 10,925,000 and 8,050,000 shares, respectively, of OMH’s common stock. The two secondary public offerings closed during the third quarter of 2021 and resulted in the sale by the Selling Stockholder to the Underwriter for a total of 18,975,000 shares of OMH common stock. We did not receive any proceeds from the sale of the shares by the Selling Stockholders in either transaction.

Concurrent Share Buyback

On August 3, 2021, pursuant to the July 2021 underwriting agreement, we concurrently purchased from the Underwriter 1,700,000 of the shares of OMH common stock at a purchase price of $58.36 per share, which is equal to the price at which the Underwriter purchased the shares from the Selling Stockholder, resulting in an aggregate purchase price of $99 million (the “Concurrent Share Buyback”). The terms and conditions of the Concurrent Share Buyback were reviewed and approved by a special committee of the OMH Board of Directors, comprised of independent and disinterested directors of OMH. The Concurrent Share Buyback was made pursuant to a new OMH board authorization and did not reduce our availability under the stock repurchase program commenced during the second quarter of 2021. The Concurrent Share Buyback was funded from our existing cash on hand. The Underwriter did not receive any compensation for the shares of OMH common stock repurchased by OMH.

Stock Repurchase Program

During the second quarter of 2021 we commenced our stock repurchase program. As of September 30, 2021, we have $78 million of authorized share repurchase capacity, excluding fees and commissions, remaining under the program. See “Liquidity and Capital Resources” under Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Part II included in this report for further information on our shares repurchased during the three months ended September 30, 2021.

Cash Dividends to OMH's Common Stockholders

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.

Acquisition of Trim

On May 14, 2021, we completed our previously announced acquisition of Ask Benjamin, Inc. (“Trim”), a customer-focused financial wellness fintech company. The acquisition of Trim will enhance our mission to help our customers progress to a better financial future and further expand the ways in which we help our customers improve their financial well-being.

Management’s Response to the COVID-19 Pandemic

In early 2020, COVID-19 evolved into a global pandemic, resulting in widespread volatility and deterioration in economic conditions across the United States. Governmental authorities continue to take steps to combat the spread of COVID-19, including the ongoing distribution of COVID-19 ~~vaccines, which over time are designed to create “herd immunity” and diminish, if not eliminate,~~vaccines. During the ~~crisis. At this time, the vaccination program has accelerated in many states to allow all adults to receive the vaccines. In the meantime,~~pandemic, we ~~have continued~~continue to focus on assisting and supporting our customers and employees, while remaining committed to the safety of our employees. We continue to serve our customers by keeping our branch locations open with appropriate protective protocols in place and 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 taken and the underlying strength of our balance sheet ~~positions~~has positioned us to take advantage of growth opportunities as the 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 redemption of our unsecured debt, see Note 6 of the Notes to the Condensed Consolidated Financial Statements included in this report.

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

On February 8, 2021, OMH declared a dividend of $3.95 per share payable on February 25, 2021 to record holders of OMH's common stock as of the close of business on 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.

~~Apollo-Värde Group Share Sale~~

On February 11, 2021, we entered into an underwriting agreement with certain entities managed by affiliates of 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 the several underwriters (the “Underwriters”), for the sale by the Selling Stockholders of 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.

~~Share Repurchase Program~~

In the second quarter of 2021, the Company announced plans to commence a $150 million share repurchase program. For information regarding the share repurchase program, see “Liquidity and Capital Resources” under Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.

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OUTLOOK

~~While we~~We are actively managing the continuing impacts of the COVID-19 pandemic and ~~are~~remain prepared ~~to face~~for any additional opportunities or challenges that may impact our industry ~~we expect near-term impacts to continue to affect our originations.~~or business. The ~~ultimate~~ impact on our financial condition and results of operations depends on the ~~speed~~continued progress of the economic recovery, ~~driven by distribution and effectiveness of the COVID-19 vaccines, government stimulus measures,~~which includes states ~~reopening,~~actively open for business, and ultimately, unemployment rates. There is also uncertainty regarding the effects of additional strains of COVID-19 and the impact of any related government ~~actions, including~~actions. Current trends of originations and credit performance are favorable, but we continue to diligently monitor the ~~recently enacted American Rescue Plan Act of 2021. To the extent economies are suppressed or slow~~economy and its impact to ~~recover, we could see lower consumer demand, higher delinquency trends, and related losses.~~our customers. We will continue to incorporate updates, as necessary, to our macroeconomic assumptions which could lead to further adjustments in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.

To further expand the ways in which we help our customers improve their financial well-being, on April 26, 2021, we announced that we have entered into an agreement to acquire Trim, a customer-focused financial wellness fintech company. The acquisition of Trim, subject to completion of standard closing conditions, will 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 maintaining a solid balance sheet, ~~providing a flexible~~with an adequate liquidity runway and capital coverage, upholding a conservative and disciplined underwriting model, and building strong relationships with our customers. We are well positioned to continue ~~to support~~supporting and ~~serve~~serving our customers, ~~invest~~investing in our business and ~~drive~~driving growth while creating value for our stockholders ~~and~~as we effectively ~~navigating~~navigate 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 1 of the Notes to the Condensed Consolidated Financial Statements included in this report for further 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 March 31,						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)	(dollars in millions, except per share amounts)	2021			2020				(dollars in millions, except per share amounts)	2021			2020			2021			2020

Interest income	Interest income	$	1,060		$	1,106			Interest income	$	1,113		$	1,089		$	3,244		$	3,273
Interest expense	Interest expense	235			255				Interest expense	237			255			703			781
Provision for finance receivable losses	Provision for finance receivable losses	(2)			531				Provision for finance receivable losses	226			231			356			1,186
Net interest income after provision for finance receivable losses	Net interest income after provision for finance receivable losses	827			320				Net interest income after provision for finance receivable losses	650			603			2,185			1,306

Other revenues	Other revenues	91			141				Other revenues	155			101			396			390
Other expenses	Other expenses	372			418				Other expenses	429			363			1,195			1,194
Income before income taxes	Income before income taxes	546			43				Income before income taxes	376			341			1,386			502
Income taxes	Income taxes	133			11				Income taxes	88			91			335			131
Net income	Net income	$	413		$	32			Net income	$	288		$	250		$	1,051		$	371

Share Data:	Share Data:								Share Data:

Earnings per share:	Earnings per share:								Earnings per share:

Diluted	Diluted	$	3.06		$	0.24			Diluted	$	2.17		$	1.86		$	7.84		$	2.75

Selected Financial Statistics *	Selected Financial Statistics *								Selected Financial Statistics *
Finance receivables held for investment:	Finance receivables held for investment:								Finance receivables held for investment:
Net finance receivables	Net finance receivables	$	17,564		$	18,269			Net finance receivables	$	18,843		$	17,817		$	18,843		$	17,817
Number of accounts	Number of accounts	2,229,609			2,400,536				Number of accounts	2,334,395			2,297,167			2,334,395			2,297,167

Average net receivables	Average net receivables	$	17,824		$	18,380			Average net receivables	$	18,545		$	17,740		$	18,029		$	18,010
Yield	Yield	24.08		%	24.17		%		Yield	23.79		%	24.39		%	24.02		%	24.24		%
Gross charge-off ratio	Gross charge-off ratio	5.81		%	7.35		%		Gross charge-off ratio	4.76		%	6.14		%	5.41		%	6.90		%
Recovery ratio	Recovery ratio	(1.14)		%	(0.90)		%		Recovery ratio	(1.24)		%	(0.95)		%	(1.23)		%	(0.91)		%
Net charge-off ratio	Net charge-off ratio	4.67		%	6.45		%		Net charge-off ratio	3.52		%	5.19		%	4.19		%	5.99		%
30-89 Delinquency ratio	30-89 Delinquency ratio	1.57		%	2.25		%		30-89 Delinquency ratio	2.20		%	1.95		%	2.20		%	1.95		%
Origination volume	Origination volume	$	2,284		$	2,589			Origination volume	$	3,870		$	2,887		$	9,989		$	7,523
Number of accounts originated	Number of accounts originated	225,102			276,773				Number of accounts originated	404,602			300,376			1,018,924			771,628
Debt balances:	Debt balances:								Debt balances:
Long-term debt balance	Long-term debt balance	$	16,789		$	20,443			Long-term debt balance	$	17,661		$	17,531		$	17,661		$	17,531
Average daily debt balance	Average daily debt balance	17,035			17,675				Average daily debt balance	17,680			17,546			17,192			18,331

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

Interest income ~~decreased $46~~increased $24 million or ~~4.2%~~2% for the three months ended ~~March 31,~~September 30, 2021 when compared to the same period in 2020 primarily due to growth in our loan portfolio, partially offset by lower yield.

Interest income decreased $29 million or 1% for the nine months ended September 30, 2021 when compared to the same period in 2020 primarily due to lower yield.

Interest expense decreased $18 million or 7% for the three months ended September 30, 2021 when compared to the same period in 2020 primarily due to a ~~decrease~~lower average cost of funds, partially offset by an increase in ~~our~~ average ~~net finance receivables.~~debt.

Interest expense decreased ~~$20~~$78 million or ~~7.8%~~10% for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 when compared to the same period in 2020 primarily due to a decrease in average debt along with a lower average cost of funds.

See Notes 6 and 7 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 ~~$533~~$5 million or 2% for the three months ended ~~March 31,~~September 30, 2021 when compared to the same period in 2020 primarily driven by a decrease in our net charge-offs due to improved credit performance aligning with governmental stimulus payments, partially offset by a build in our allowance for finance receivable losses due to growth in our loan portfolio.

Provision for finance receivable losses decreased $830 million or 70% for the nine months ended September 30, 2021 when compared to the same period in 2020 primarily due to an improved outlook for unemployment and macroeconomic conditions, along with the decrease in our net charge-offs due to improved credit performance aligning with governmental stimulus payments, as compared to a build in our allowance reserve at the onset of the COVID-19 pandemic.

Other revenues increased $54 million or 53% for the three months ended September 30, 2021 when compared to the same period in 2020 primarily due to a net loss on the repurchase and repayment of debt in the prior year quarter and the gains on the sales of finance receivables associated with the whole loan sale program that commenced in the current year.

Other revenues increased $6 million or 2% for the nine months ended September 30, 2021 when compared to the same period in 2020 primarily due to the gains on the sales of finance receivables associated with the whole loan sale program that commenced in the current year and an increase in membership plans fee revenue due to loan origination growth. The increase was partially offset by higher net losses on the repurchases and repayments of debt and a decrease in ~~our charge-offs and~~investment revenue driven by lower interest rates on cash.

Other expenses increased $66 million or 18% for the ~~expectation of improved unemployment and anticipated economic recovery from the COVID-19 pandemic as~~three months ended September 30, 2021 when compared to ~~a build in our allowance reserve in~~ the same period in 2020 primarily due to the ~~uncertainty of expected credit losses at~~expense associated with the ~~onset of~~cash-settled stock-based awards in the current period and an increase in general operating expenses due to growth in our receivables and our strategic investments in the business, including new products, compared to COVID-19 ~~pandemic.~~cost cutting measures in the prior year.

Other ~~revenues~~ ~~decreased $50 million or 35.5%~~expenses remained relatively consistent for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 when compared to the same period in 2020 primarily due to a $47 million net loss on the repayment of debt in the current period and a decrease in insurance products sold due to reduced loan origination volume, partially offset by an increase in investment revenue primarily driven by higher mark-to-market net gains on other securities.

~~Other expenses~~ ~~decreased $46 million or 11.0% for the three months ended March 31, 2021 when compared to the same period in 2020 primarily due to a $35 million~~ decrease in insurance policy and benefits claims expense ~~due to~~resulting from lower than expected involuntary unemployment insurance claims, ~~along~~offset by the expense associated with ~~a decrease~~the cash-settled stock-based awards in the current period and an increase in general operating expenses ~~reflecting~~due to growth in our ~~efforts to manage costs through the pandemic, offset by~~receivables and our strategic investments in the ~~business.~~business, including new products, compared to COVID-19 cost cutting measures in the prior year.

Income taxes totaled ~~$133~~$335 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 compared to ~~$11~~$131 million ~~for~~in the ~~three months ended March 31,~~same period in 2020 due to higher pre-tax income in the ~~first quarter of 2021.~~ current period.

For the three and nine months ended ~~March 31,~~September 30, 2021, the effective tax rates were 23.5% and 24.2%, respectively. For the three and nine months ended September 30, 2020, the effective tax rates were ~~24.4%~~26.8% and ~~24.3%~~26.1%, respectively. The effective tax rates differed from the federal statutory rate of 21% primarily due to the effect of state income taxes.

See Note 11 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 C&I adjusted pretax income (loss), a non-GAAP financial measure, as a key performance measure of our segment. ~~Adjusted~~C&I adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes the expense associated with the cash-settled stock-based awards, direct costs associated with COVID-19, acquisition-related transaction and integration expenses, net loss resulting from repurchases and repayments of debt, and ~~lower of cost or fair value adjustment on loans held for sale.~~restructuring charges. Management believes C&I adjusted pretax income (loss) is useful in assessing the profitability of our segment.

Management also uses C&I pretax capital generation, a non-GAAP financial measure, as a key performance measure of our segment. This measure represents C&I adjusted pretax income as discussed above and excludes the change in our C&I allowance for finance receivable losses in the period while still considering the C&I net charge-offs incurred during the period. Management believes that C&I 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 C&I adjusted pretax ~~net~~ income (loss) and C&I 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~~C&I adjusted pretax income (loss) and C&I 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.

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

Three Months Ended
March 31,
(dollars in millions) 2021 2020
Consumer and Insurance
Income before income taxes - Segment Accounting Basis $ 567 $ 51
Adjustments:
Direct costs associated with COVID-19 2 3
Acquisition-related transaction and integration expenses — 6
Net loss on repurchases and repayments of debt 38 —
Adjusted pretax income (non-GAAP) $ 607 $ 60
Provision for finance receivable losses $ (3) $ 530
Net charge-offs (205) (296)
Pretax capital generation (non-GAAP) $ 399 $ 294
Other
Loss before income taxes - Segment Accounting Basis $ (3) $ (1)
Adjustments:
Lower of cost or fair value adjustment (a) 1 —
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 months ended March 31, 2021.



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

Consumer and Insurance
Income before income taxes - Segment Accounting Basis	$	388	$	351	$	1,429	$	530
Adjustments:
Cash-settled stock-based awards	31		—		31		—
Direct costs associated with COVID-19	1		4		5		13
Acquisition-related transaction and integration expenses	—		2		—		10
Net loss on repurchases and repayments of debt	1		35		40		35

Restructuring charges	—		1		—		7
Adjusted pretax income (non-GAAP)	$	421	$	393	$	1,505	$	595

Provision for finance receivable losses	$	224	$	232	$	351	$	1,184
Net charge-offs	(165)		(232)		(564)		(810)
Pretax capital generation (non-GAAP)	$	480	$	393	$	1,292	$	969

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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 1 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information.

See Note 1318 of the Notes to the ~~Condensed~~ Consolidated Financial Statements in Part II - Item 8 included in ~~this report~~our Annual Report for a description of our segment and methodologies used to allocate revenues and expenses to our C&I segment. See Note 13 of the Notes to the Condensed Consolidated Financial Statements included in this report for reconciliations of segment ~~and Other.~~total to condensed consolidated financial statement amounts.

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)	2021			2020			2021			2020

Interest income	$	1,111		$	1,086		$	3,237		$3,260
Interest expense	235			250			698			765
Provision for finance receivable losses	224			232			351			1,184
Net interest income after provision for finance receivable losses	652			604			2,188			1,311
Other revenues	152			134			435			415
Other expenses	383			345			1,118			1,131
Adjusted pretax income (non-GAAP)	$	421		$	393		$	1,505		$595


Selected Financial Statistics *
Finance receivables held for investment:
Net finance receivables	$	18,847		$	17,826		$	18,847		$	17,826
Number of accounts	2,334,395			2,297,167			2,334,395			2,297,167

Average net receivables	$	18,549		$	17,750		$	18,034		$	18,023
Yield	23.77		%	24.34		%	24.00		%	24.16		%
Gross charge-off ratio	4.77		%	6.15		%	5.41		%	6.91		%
Recovery ratio	(1.24)		%	(0.95)		%	(1.22)		%	(0.91)		%
Net charge-off ratio	3.52		%	5.20		%	4.19		%	6.00		%
30-89 Delinquency ratio	2.20		%	1.95		%	2.20		%	1.95		%
Origination volume	$	3,870		$	2,887		$	9,989		$	7,523
Number of accounts originated	404,602			300,376			1,018,924			771,628

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

Interest income ~~decreased $44~~increased $25 million or ~~4.0%~~2% for the three months ended ~~March 31,~~September 30, 2021 when compared to the same period in 2020 primarily due to growth in our loan portfolio, partially offset by lower yield.

Interest income decreased $23 million or 1% for the nine months ended September 30, 2021 when compared to the same period in 2020 primarily due to lower yield.

Interest expense decreased $15 million or 6% for the three months ended September 30, 2021 when compared to the same period in 2020 primarily due to a ~~decrease~~lower average cost of funds, partially offset by an increase in ~~our~~ average ~~net finance receivables.~~debt.

Interest expense decreased ~~$16~~$67 million or ~~6.4%~~9% for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 when compared to the same period in 2020 primarily due to a decrease in average debt along with a lower average cost of funds.

Provision for finance receivable losses decreased ~~$533~~$8 million or 3% for the three months ended ~~March 31,~~September 30, 2021 when compared to the same period in 2020 primarily driven by a decrease in our net charge-offs due to improved credit performance aligning with governmental stimulus payments, partially offset by a build in our allowance for finance receivable losses due to growth in our loan portfolio.

Provision for finance receivable losses decreased $833 million or 70% for the nine months ended September 30, 2021 when compared to the same period in 2020 primarily due to an improved outlook for unemployment and macroeconomic conditions, along with the decrease in our net charge-offs due to improved credit performance aligning with governmental stimulus payments, as compared to a build in our allowance reserve at the onset of the COVID-19 pandemic.

Other revenues increased $18 million or 13% for the three months ended September 30, 2021 when compared to the same period in 2020 primarily due to the ~~decrease in our charge-offs and~~gains on the ~~expectation~~sales of ~~improved unemployment and anticipated economic recovery from~~finance receivables associated with the ~~COVID-19 pandemic as compared to a build in our allowance reserve~~whole loan sale program that commenced in the ~~same period in 2020 primarily due to the uncertainty of expected credit losses at the onset of the COVID-19 pandemic.~~current year.

Other revenues increased $20 million or 5% for the ~~three~~nine months ended March 31, 2021 remained consistent with the same period in 2020 primarily due to a decrease in insurance products sold due to reduced loan origination volume, offset by an increase in investment revenue primarily driven by higher mark-to-market net gains on other securities.

~~Other expenses~~ ~~decreased $42 million or 10.6% for the three months ended March 31,~~September 30, 2021 when compared to the same period in 2020 primarily due to the gains on the sales of finance receivables associated with the whole loan sale program that commenced in the current year and an increase in membership plans fee revenue due to loan origination growth. The increase was partially offset by a ~~$35~~decrease in investment revenue primarily driven by lower interest rates on cash.

Other expenses increased $38 million or 11% for the three months ended September 30, 2021 when compared to the same period in 2020 primarily due to an increase in general operating expenses due to growth in our receivables and our strategic investments in the business, including new products, compared to COVID-19 cost cutting measures in the prior year.

Other expenses decreased $13 million or 1% for the nine months ended September 30, 2021 when compared to the same period in 2020 primarily due to a decrease in insurance policy and benefits claims expense due to lower than expected involuntary unemployment insurance claims, ~~along with a decrease~~partially offset by an increase in general operating expenses ~~reflecting~~due to growth in our ~~efforts to manage costs through the pandemic, offset by~~receivables and our strategic investments in the ~~business.~~

~~OTHER~~

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

~~OMH's adjusted pretax loss of~~business, including new products, compared to COVID-19 cost cutting measures in the ~~Other components on an adjusted Segment Accounting Basis was as follows:~~

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:~~

March 31,
(dollars in millions) 2021 2020
Net finance receivables held for sale:
Other receivables $ 46 $ 63

prior year.

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Credit Quality

FINANCE RECEIVABLES

Our net finance receivables, consisting of personal loans, were ~~$17.6~~$18.8 billion at ~~March 31,~~September 30, 2021 and $18.1 billion at December 31, 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 and central operation team members work with customers as necessary and offer a variety of borrower assistance programs to help customers continue to make payments.

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.

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~~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) Consumer
and
Insurance Segment to
GAAP
Adjustment GAAP
Basis
March 31, 2021
Current $ 16,973 $ (5) $ 16,968
30-59 days past due 157 — 157
Delinquent (60-89 days past due) 119 — 119
Performing 17,249 (5) 17,244
Nonperforming (90+ days past due) 320 — 320
Total net finance receivables $ 17,569 $ (5) $ 17,564
Delinquency ratio
30-89 days past due 1.57 % * 1.57 %
30+ days past due 3.39 % * 3.39 %
60+ days past due 2.50 % * 2.50 %
90+ days past due 1.82 % * 1.82 %
December 31, 2020
Current $ 17,362 $ (7) $ 17,355
30-59 days past due 251 — 251
Delinquent (60-89 days past due) 162 — 162
Performing 17,775 (7) 17,768
Nonperforming (90+ days past due) 316 — 316
Total net finance receivables $ 18,091 $ (7) $ 18,084
Delinquency ratio
30-89 days past due 2.28 % * 2.28 %
30+ days past due 4.03 % * 4.03 %
60+ days past due 2.64 % * 2.64 %
90+ days past due 1.75 % * 1.75 %


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

September 30, 2021
Current	$	18,137		$	(4)	$	18,133
30-59 days past due	258			—		258
Delinquent (60-89 days past due)	157			—		157
Performing	18,552			(4)		18,548

Nonperforming (90+ days past due)	295			—		295
Total net finance receivables	$	18,847		$	(4)	$	18,843

Delinquency ratio
30-89 days past due	2.20		%	*		2.20		%
30+ days past due	3.77		%	*		3.77		%
60+ days past due	2.40		%	*		2.40		%
90+ days past due	1.57		%	*		1.57		%

December 31, 2020
Current	$	17,362		$	(7)	$	17,355
30-59 days past due	251			—		251
Delinquent (60-89 days past due)	162			—		162
Performing	17,775			(7)		17,768

Nonperforming (90+ days past due)	316			—		316
Total net finance receivables	$	18,091		$	(7)	$	18,084

Delinquency ratio
30-89 days past due	2.28		%	*		2.28		%
30+ days past due	4.03		%	*		4.03		%
60+ days past due	2.64		%	*		2.64		%
90+ days past due	1.75		%	*		1.75		%

* 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. Our allowance for finance receivable losses may fluctuate based upon changes in portfolio growth, credit quality, and economic conditions.

Our current methodology to estimate expected credit losses used the most recent macroeconomic forecasts, which incorporated the ~~projected~~ impacts and expected recovery offrom COVID-19 on the U.S. economy. We also 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 ~~March 31,~~September 30, 2021, our economic forecast used a reasonable and supportable period of 12 months. ~~In the near-term, we~~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 finance receivable losses, allowance ratio, and provision for finance receivable losses.

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


(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

Three Months Ended March 31, 2021
Three Months Ended September 30, 2021										Three Months Ended September 30, 2021
Balance at beginning of period	Balance at beginning of period	$	2,283		$	(14)	$	2,269		Balance at beginning of period	$	2,011	$	(11)	$	2,000
Provision for finance receivable losses	Provision for finance receivable losses	(3)			1		(2)			Provision for finance receivable losses	224		2		226
Charge-offs	Charge-offs	(255)			—		(255)			Charge-offs	(223)		—		(223)
Recoveries	Recoveries	50			—		50			Recoveries	58		—		58
Balance at end of period	Balance at end of period	$	2,075		$	(13)	$	2,062		Balance at end of period	$	2,070	$	(9)	$	2,061

Allowance ratio		11.81		%	(b)		11.74		%

Three Months Ended March 31, 2020

Three Months Ended September 30, 2020										Three Months Ended September 30, 2020
Balance at beginning of period	Balance at beginning of period	$	849		$	(20)	$	829		Balance at beginning of period	$	2,342	$	(18)	$	2,324
Impact of adoption of ASU 2016-13 (a)		1,119			(1)		1,118
Provision for finance receivable losses	Provision for finance receivable losses	530			1		531			Provision for finance receivable losses	232		(1)		231
Charge-offs	Charge-offs	(337)			—		(337)			Charge-offs	(274)		—		(274)
Recoveries	Recoveries	41			—		41			Recoveries	42		1		43
Balance at end of period	Balance at end of period	$	2,202		$	(20)	$	2,182		Balance at end of period	$	2,342	$	(18)	$	2,324

Allowance ratio		12.05		%	(b)		11.95		%




Nine Months Ended September 30, 2021
Balance at beginning of period	$	2,283		$	(14)	$	2,269
Provision for finance receivable losses	351			5		356
Charge-offs	(730)			—		(730)
Recoveries	166			—		166
Balance at end of period	$	2,070		$	(9)	$	2,061

Allowance ratio	10.98		%	(a)		10.94		%

Nine Months Ended September 30, 2020
Balance at beginning of period	$	849		$	(20)	$	829
Impact of adoption of ASU 2016-13 (b)	1,119			(1)		1,118
Provision for finance receivable losses	1,184			2		1,186
Charge-offs	(932)			1		(931)
Recoveries	122			—		122
Balance at end of period	$	2,342		$	(18)	$	2,324

Allowance ratio	13.14		%	(a)		13.05		%

(a) Not applicable.

(b) As a result of the adoption of ASU 2016-13, we recorded a one-time adjustment to the allowance for finance receivable losses.

~~(b) Not applicable.~~

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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 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 decreased from prior period primarily due to ~~the expectation of~~an improved outlook for unemployment and ~~anticipated economic recovery from the COVID-19 pandemic~~macroeconomic conditions, partially offset by growth in our loan portfolio, 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 COVID-19 pandemic. See Note 4 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.

~~Table of Contents~~

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) Consumer
and
Insurance Segment to
GAAP
Adjustment GAAP
Basis
March 31, 2021
TDR net finance receivables $ 723 $ (33) $ 690
Allowance for TDR finance receivable losses 327 (16) 311
December 31, 2020
TDR net finance receivables $ 728 $ (37) $ 691
Allowance for TDR finance receivable losses 332 (18) 314


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

September 30, 2021
TDR net finance receivables	$	681	$	(25)	$	656
Allowance for TDR finance receivable losses	292		(11)		281

December 31, 2020
TDR net finance receivables	$	728	$	(37)	$	691
Allowance for TDR finance receivable losses	332		(18)		314

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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,~~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:~~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) March 31, 2021* December 31, 2020*
FICO scores
660 or higher $ 4,646 $ 4,653
620-659 4,742 4,877
619 or below 8,176 8,554
Total $ 17,564 $ 18,084



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

FICO scores *
660 or higher	$	4,896	$	4,653
620-659	5,172		4,877
619 or below	8,775		8,554
Total	$	18,843	$	18,084

* Due to the impact of COVID-19, FICO scores as of ~~March 31,~~September 30, 2021 and December 31, 2020 may have been impacted ~~due to~~by 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, whole loan sales, 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 ~~three~~nine months ended ~~March 31,~~September 30, 2021, OMH generated net income of ~~$413 million.~~$1.1 billion. OMH’s net cash inflow from operating and investing activities totaled ~~$754~~$140 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021. At ~~March 31,~~September 30, 2021, our scheduled principal and interest payments for the remainder of 2021 on our existing debt (excluding securitizations) totaled ~~$393~~$91 million. As of ~~March 31,~~September 30, 2021, we had ~~$9.2~~$11.0 billion of unencumbered gross finance receivables.

Based on our estimates and ~~taking into account~~considering 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 for at least the next 24 months.

OMFC’s Issuance and Notice of Redemption of Unsecured Debt

For information regarding the issuance and notice of redemption of OMFC's unsecured debt, see Note 6 of the Notes to the Condensed Consolidated Financial Statements included in this report.

Securitizations and Borrowings from Revolving Conduit Facilities

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, we ~~did not terminate, cancel, or enter into any new~~completed one personal loan securitization (OMFIT 2021-1, see “Securitized Borrowings” below), and redeemed two personal loan securitizations ~~or conduit facilities.~~(OMFIT 2017-1 and SLFT 2015-B). At ~~March 31,~~September 30, 2021, we had ~~$8.1~~$7.6 billion of gross finance receivables pledged as collateral for our securitization transactions.

Subsequent to September 30, 2021, we issued $1.0 billion principal amount of notes backed by personal loans (“ODART 2021-1”). ODART 2021-1 has a revolving period of two years, during which no principal payments are required to be made.

During the nine months ended September 30, 2021, we entered into two new revolving conduit facilities and terminated one revolving conduit facility. At ~~March 31,~~September 30, 2021, the borrowing capacity of our revolving conduit facilities was ~~$7.2~~$7.3 billion, and no amounts were drawn nor were any personal loans pledged as collateral under these facilities.

Stock Repurchased

During the nine months ended September 30, 2021, OMH repurchased and held in treasury 1,347,844 shares of its common stock through its stock repurchase program for an aggregate total of $77 million, including commissions and fees. To provide funding for the OMH stock repurchase, the OMFC Board of Directors authorized dividend payments in the amount of $100 million.

Additionally, on August 3, 2021, OMH participated in the Concurrent Share Buyback, in which we purchased 1,700,000 shares of OMH common stock for an aggregate total of $99 million. The terms and conditions of the Concurrent Share Buyback were reviewed and approved by a special committee of the OMH Board of Directors, comprised of independent and disinterested directors of OMH. The Concurrent Share Buyback was made pursuant to a new OMH board authorization and did not reduce our availability under the stock repurchase program. To provide funding for the Concurrent Share Buyback, the OMFC Board of Directors authorized a dividend payment in the amount of $99 million. As of September 30, 2021, OMH held a total of 3,047,844 shares of treasury stock. For additional information regarding the shares repurchased, see Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Part II included in this report.

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Cash Dividend to OMH's Common Stockholders

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

Declaration Date

Record Date

Payment Date

Dividend Per Share

Amount Paid

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

February 8, 2021

February 18, 2021

February 25, 2021

3.95

531

April 26, 2021

May 6, 2021

May 13, 2021

0.70

July 21, 2021

August 6, 2021

August 13, 2021

4.20

555

Total

3.95

531

Total

8.85

1,180

* ~~Includes~~Our February 8, 2021 and July 21, 2021 dividend declarations included the minimum quarterly ~~dividend~~dividends of $0.45 per share ~~as of February 8, 2021.~~and $0.70 per share, respectively.

To provide funding for the dividend, OMFC paid dividends of ~~$531 million~~$1.2 billion to OMH during the ~~three~~nine months ended ~~March 31,~~September 30, 2021.

On ~~April 26,~~October 20, 2021, OMH declared a dividend of $0.70 per share payable on ~~May 13,~~November 9, 2021 to record holders of OMH's common stock as of the close of business on ~~May 6,~~November 2, 2021. To provide funding for the OMH dividend, the OMFC Board of Directors authorized a dividend in the amount of up to ~~$95~~$92 million payable on or after ~~May 11,~~November 5, 2021.

~~Table of Contents~~

While OMH intends to pay its minimum quarterly dividend, currently $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,~~September 30, 2021, we have ~~entered into~~ whole loan sale flow agreements, with remaining terms ranging between one to two years, with third-party buyers in which we agreed to sell a combined total of ~~$120~~$180 million gross receivables per quarter of newly originated unsecured personal loans ~~over a two-year commitment period. These unsecured personal loans are~~along with any associated accrued interest. Our first sale was executed in the first quarter of 2021. During the three and nine months ended September 30, 2021, we sold ~~to unconsolidated VIEs~~$160 million and ~~are derecognized from our balance sheet at~~$325 million of gross finance receivables, respectively. For further information on 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~~whole loan sale transactions, see Note 3 of the ~~agreements. The amount sold under~~Notes to the ~~agreements during the three months ended March 31, 2021 was immaterial.~~Condensed Consolidated Financial Statements included in this report.

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LIQUIDITY

OMH's Operating Activities

Net cash provided by operations of ~~$556 million~~$1.6 billion for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 reflected net income of ~~$413~~$1.1 billion, the impact of non-cash items, and an unfavorable change in working capital of $53 million. Net cash provided by operations of $1.6 billion for the nine months ended September 30, 2020 reflected net income of $371 million, the impact of non-cash items, and an unfavorable change in working capital of $23 million. Net cash provided by operations of $565 million for the three months ended March 31, 2020 reflected net income of $32 million, the impact of non-cash items, and an unfavorable change in working capital of $45$108 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 ~~$196~~$1.5 billion and $257 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020, respectively, was primarily due to net principal originations of finance receivables and purchases of available-for-sale and other securities, partially offset by calls, sales, and maturities of available-for-sale ~~securities.~~and other securities and proceeds from sales of finance receivables.

OMH's Financing Activities

Net cash used for financing activities of $1.6 billion for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 was primarily due to debt repayments, ~~and~~ cash dividends ~~paid.~~paid, and the cash paid to repurchase common stock during the period, partially offset by the issuances of the OMFIT 2021-1 securitization, the Social Bond, and the 3.875% Senior Notes due 2028. Net cash ~~provided by~~used for financing activities of ~~$2.8 billion~~$563 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2020 was primarily due to ~~net issuances of long-term~~ debt ~~offset by the~~repayments, cash dividends paid, and the cash paid on the common stock repurchased, inpartially offset by the ~~quarter.~~issuances of the 8.875% Senior Notes due 2025, and the OMFIT 2020-1 and OMFIT 2020-2 securitizations during the period.

OMH's Cash and Investments

At ~~March 31,~~September 30, 2021, we had ~~$1.3 billion~~$821 million of cash and cash equivalents, which included ~~$119~~$205 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 ~~March 31,~~September 30, 2021, we had $2.0 billion of investment securities, which are all held as part of our insurance operations and are unavailable for general corporate purposes.

~~Table of Contents~~

Liquidity Risks and Strategies

OMFC’s credit ratings are non-investment grade, which 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 Annual Report.

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 Annual 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 ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020. See Note 11 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report for further information on these state restrictions and the dividends paid by our insurance subsidiaries in 2020.

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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 9 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report for more information on the restrictive covenants under OMFC’s debt agreements, as well as the guarantees of OMFC’s long-term debt.

~~Table of Contents~~

Securitized Borrowings

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

(dollars in millions) Issue Amount (a) Initial Collateral Balance Current
Note Amounts
Outstanding (a) Current Collateral Balance
(b) Current
Weighted Average
Interest Rate Original
Revolving
Period
SLFT 2015-B $ 314 $ 336 $ 132 $ 157 4.19 % 5 years
SLFT 2017-A 652 685 346 400 3.23 % 3 years
OMFIT 2015-3 293 329 182 197 4.57 % 5 years
OMFIT 2016-3 350 397 317 414 4.33 % 5 years
OMFIT 2017-1 947 988 264 325 3.33 % 2 years
OMFIT 2018-1 632 650 585 628 3.61 % 3 years
OMFIT 2018-2 368 381 350 400 3.87 % 5 years
OMFIT 2019-1 632 654 554 598 3.82 % 2 years
OMFIT 2019-2 900 947 900 995 3.30 % 7 years
OMFIT 2019-A 789 892 750 892 3.78 % 7 years
OMFIT 2020-1 821 958 821 958 4.12 % 2 years
OMFIT 2020-2 1,000 1,053 1,000 1,053 2.03 % 5 years
ODART 2018-1 947 964 523 558 3.66 % 2 years
ODART 2019-1 737 750 700 750 3.79 % 5 years
Total securitizations $ 9,382 $ 9,984 $ 7,424 $ 8,325


(dollars in millions)	Issue Amount (a)		Initial Collateral Balance		Current Note Amounts Outstanding (a)		Current Collateral Balance (b)		Current Weighted Average Interest Rate		Original Revolving Period

SLFT 2017-A	$	652	$	685	$	201	$	261	3.62	%	3 years
OMFIT 2015-3	293		329		107		130		5.23	%	5 years
OMFIT 2016-3	350		397		212		290		4.58	%	5 years
OMFIT 2018-1	632		650		381		423		3.78	%	3 years
OMFIT 2018-2	368		381		350		400		3.87	%	5 years
OMFIT 2019-1	632		654		356		402		4.01	%	2 years
OMFIT 2019-2	900		947		900		995		3.30	%	7 years
OMFIT 2019-A	789		892		750		892		3.78	%	7 years
OMFIT 2020-1	821		958		821		958		4.12	%	2 years
OMFIT 2020-2	1,000		1,053		1,000		1,053		2.03	%	5 years
OMFIT 2021-1	850		904		850		904		1.57	%	5 years
ODART 2018-1	947		964		327		354		3.79	%	2 years
ODART 2019-1	737		750		700		750		3.79	%	5 years
Total securitizations	$	8,971	$	9,564	$	6,955	$	7,812

(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 ~~March 31,~~September 30, 2021.

See “Liquidity and Capital Resources - Sources and Uses of Funds - Securitizations and Borrowings from Revolving Conduit Facilities” above for information on the securitization transaction completed subsequent to September 30, 2021.

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Revolving Conduit Facilities

In addition to the structured financings, we have access to 1314 revolving conduit facilities with a total borrowing capacity of ~~$7.2~~$7.3 billion as of ~~March 31,~~September 30, 2021:


(dollars in millions)	Advance Maximum Balance		Amount Drawn

~~Rocky River~~OneMain Financial Auto Funding I, LLC	$	~~400~~850	$	—
OneMain Financial Funding VII, LLC	850		—
OneMain Financial Funding IX, LLC	850		—
Seine River Funding, LLC	650		—
Mystic River Funding, LLC	~~850~~600		—
Chicago River Funding, LLC	500		—
Columbia River Funding, LLC	500		—
Hudson River Funding, LLC	500		—
OneMain Financial Funding VIII, LLC	500		—
Thayer Brook Funding, LLC	500		—
Hubbard River Funding, LLC	250		—
~~Seine River Funding, LLC~~	~~650~~		—
New River Funding Trust	250		—
~~Hudson~~ River Thames Funding, LLC	~~500~~		—
~~Columbia River Funding, LLC~~	~~500~~250		—
St. Lawrence River Funding, LLC	250		—
~~OneMain Financial Funding VII, LLC~~	~~850~~		—
~~OneMain Financial Auto Funding I, LLC~~	~~850~~		—
Total	$	~~7,200~~7,300	$	—

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Off-Balance Sheet Arrangements

We have no 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 ~~March 31,~~September 30, 2021 or December 31, 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; and

•TDR finance receivables.

There have been no material changes to our critical accounting policies or to our methodologies for deriving critical accounting estimates during the ~~three~~nine months ended ~~March 31,~~September 30, 2021.


Recent Accounting Pronouncements

See Note 2 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~~The seasonality ~~trends continue~~impact on our delinquency trend continues 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 Annual 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 the 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 ~~March 31,~~September 30, 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 ~~March 31,~~September 30, 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 ~~first~~third quarter of 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 the 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 ~~March 31,~~September 30, 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 ~~March 31,~~September 30, 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 ~~first~~third quarter of 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 12 of the Notes to the Condensed Consolidated Financial Statements included in this report.


Item 1A. Risk Factors.

~~There have been no material changes~~In addition to ~~our risk~~the other information set forth in this report, you should consider the factors ~~included~~discussed in Part I - Item ~~1A of~~1A. “Risk Factors” in our Annual ~~Report.~~Report, which could materially affect our business, financial condition, or future results.


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

~~None.~~There were no unregistered sales of our common stock during the period covered by this Quarterly Report on Form 10-Q.

Issuer Purchases of Equity Securities

The following table presents information regarding repurchases of our common stock, excluding commissions and fees, during the quarter ended September 30, 2021:


Period	Total Number of Shares Purchased (a)	Average Price paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)	Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (b)
July 1 - July 31	132,376	$	59.73	132,376	$	112,239,658
August 1 - August 31	2,009,513	58.26		309,513	94,383,679
September 1 - September 30	293,600	56.51		293,600	77,791,092
Total	2,435,489	$	58.13	735,489

(a) On August 3, 2021, we participated in the Concurrent Share Buyback, in which we purchased 1,700,000 shares of OMH common stock that were the subject of a secondary public offering by the Selling Stockholder at a purchase price of $58.36 per share, which is equal to the price at which the Underwriter purchased such shares from the Selling Stockholder. The Concurrent Share Buyback did not reduce our availability under the stock repurchase program. For additional information regarding the Concurrent Share Buyback, see “Recent Developments and Outlook — Concurrent Share Buyback” under Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report.

(b) OMH Board of Directors approved a $200 million stock repurchase program, excluding commission and fees, with no stated expiration during the first quarter of 2020. The timing, number and share price of any additional shares repurchased will be determined by OMH 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. OMH is not obligated to purchase any shares under the program, and may be modified, suspended or discontinued at any time.


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~~4.1						~~Underwriting Agreement,~~Thirteenth Supplemental Indenture relating to the Notes, dated ~~February~~as of August 11, 2021, among OneMain Finance Corporation, 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.,~~Wilmington Trust, National Association, as ~~representatives~~trustee (including the form of ~~the several underwriters named~~3.875% Senior Notes due 2028 included therein ~~incorporated~~as Exhibit A). Incorporated by reference to Exhibit ~~1.1~~4.2 to ~~OMH’s~~our Current Report on Form 8-K ~~filed~~ on ~~February 16,~~August 11, 2021.

10.1*						Form of Restricted Stock Unit Award Agreement under the OneMain Holdings, Inc. Amended 2013 Omnibus Incentive Plan (Executive Team), effective for grants on or after July 16, 2021, filed herewith as Exhibit 10.1.

10.2*						Form of Performance-Based Restricted Stock Unit Award Agreement under the OneMain Holdings, Inc. Amended 2013 Omnibus Incentive Plan, effective for grants on or after July 16, 2021, filed herewith as Exhibit 10.2.

10.3*						Form of Amendment Number 1 to Cash-Settled Stock-Based Award Agreement under the OneMain Holdings, Inc. Amended 2013 Omnibus Incentive Plan (for executive officers other than the Chief Executive Officer), filed herewith as Exhibit 10.3.

10.4*						Amendment Number 1 to Amended and Restated Cash-Settled Option Award Agreement (Chief Executive Officer), filed herewith as Exhibit 10.4.



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).

* Management contract or compensatory plan or arrangement.

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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:

~~April 27,~~October 21, 2021

By:

/s/ Micah R. Conrad

Micah R. Conrad

Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)

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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:

~~April 27,~~October 21, 2021

By:

/s/ Micah R. Conrad

Micah R. Conrad

Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)

5865



	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


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


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




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


Topic						Page

Forward-Looking Statements						3539
Overview						3741
Recent Developments and Outlook						3842
Results of Operations						4045
Segment Results						4348
Credit Quality						4550
Liquidity and Capital Resources						4955
Off-Balance Sheet Arrangements						5360
Critical Accounting Policies and Estimates						5360
Recent Accounting Pronouncements						5360
Seasonality						5360



	March 31,
(dollars in millions)	2021		2020






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



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

FICO scores
660 or higher	$	4,646	$	4,653
620-659	4,742		4,877
619 or below	8,176		8,554
Total	$	17,564	$	18,084