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 ~~June 30, 2021~~March 31, 2022

☐ 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 ~~July 15, 2021,~~April 21, 2022, there were ~~133,810,184~~125,211,094 shares of OneMain Holdings, Inc’s common stock, $0.01 par value, outstanding.

At ~~July 15, 2021,~~April 21, 2022, 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	6
	Condensed Consolidated Statements of Operations	7
	Condensed Consolidated Statements of Comprehensive Income	8
	Condensed Consolidated Statements of Shareholders’ Equity	9
	Condensed Consolidated Statements of Cash Flows	1110
	Financial Statements of OneMain Finance Corporation and Subsidiaries (Unaudited):
	Condensed Consolidated Balance Sheets	1211
	Condensed Consolidated Statements of Operations	1312
	Condensed Consolidated Statements of Comprehensive Income	1413
	Condensed Consolidated Statements of Shareholder’s Equity	1514
	Condensed Consolidated Statements of Cash Flows	1715
	Notes to the Condensed Consolidated Financial Statements	1816
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3736
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5856
Item 4.	Controls and Procedures	5957
	Controls and Procedures of OneMain Holdings, Inc.	5957
	Controls and Procedures of OneMain Finance Corporation	5957

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	6058
Item 1A.	Risk Factors	6058
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6058
Item 3.	Defaults Upon Senior Securities	6058
Item 4.	Mine Safety Disclosures	6058
Item 5.	Other Information	6058
Item 6.	Exhibit Index	6159

SIGNATURES
	OneMain Holdings, Inc. Signature	6260
	OneMain Finance Corporation Signature	6361

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

















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,~~2021, 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~~11, 2022

~~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,~~indenture, dated as of December 3, 2014, by and between OMFC and Wilmington Trust, National Association, as trustee, and guaranteed by OMH
~~CAA~~Board						~~Consolidated Appropriations Act~~the OMH Board of ~~2021 signed into law on December 27, 2020~~Directors
~~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


CFPB						Consumer Financial Protection Bureau

CMBS						commercial mortgage-backed securities




COVID-19						the global outbreak of a novel strain of coronavirus, including variants thereof







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


Indenture						the 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




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
NORA						Notice and Opportunity to Respond and Advise


ODART						OneMain Direct Auto Receivables Trust






OMFC						OneMain Finance Corporation ~~(formerly Springleaf Finance Corporation)~~
OMFIT						OneMain Financial Issuance Trust
OMH						OneMain Holdings, Inc.

Table of Contents


Term or Abbreviation						Definition

OneMain						OneMain ~~Financial~~ Holdings, ~~LLC,~~Inc. and OneMain Finance Corporation, collectively with ~~its~~their subsidiaries

Open accounts						consist of open credit card accounts as of period end
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



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
Purchase volume						consist of credit card purchase transactions in the period, including cash advances, net of returns
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


~~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


Supplemental Indentures						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; ~~and~~ Twelfth Supplemental Indenture, dated as of June 22, 2021; and 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


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~~

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

~~Värde~~Unencumbered loans						~~Värde Partners, Inc.~~unencumbered gross finance receivables excluding credit cards
Unsecured corporate revolver						unsecured revolver with a maximum borrowing capacity of $1.0 billion, payable and due on October 25, 2026
Unsecured Notes						the notes, on a senior unsecured basis, issued by OMFC and guaranteed by OMH


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) June 30, 2021 December 31, 2020
Assets
Cash and cash equivalents $ 1,787 $ 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)
1,969 1,922
Net finance receivables (includes loans of consolidated VIEs of $8.3 billion in 2021 and $8.8 billion
    in 2020)
18,163 18,084
Unearned insurance premium and claim reserves (728) (771)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $906 million in
    2021 and $1.1 billion in 2020)
(2,000) (2,269)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for
    finance receivable losses 15,435 15,044
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents
    of consolidated VIEs of $494 million in 2021 and $441 million in 2020)
507 451
Goodwill 1,437 1,422
Other intangible assets 287 306
Other assets 955 1,054
Total assets $ 22,377 $ 22,471
Liabilities and Shareholders’ Equity
Long-term debt (includes debt of consolidated VIEs of $7.5 billion in 2021 and $7.8 billion in 2020) $ 17,605 $ 17,800
Insurance claims and policyholder liabilities 617 621
Deferred and accrued taxes 10 45
Other liabilities (includes other liabilities of consolidated VIEs of $14 million in 2021 and $15 million
    in 2020)
608 564
Total liabilities 18,840 19,030
Contingencies (Note 12) 0 0
Shareholders’ equity:
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized, 133,884,043 and 134,341,724 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively 1 1
Additional paid-in capital 1,661 1,655
Accumulated other comprehensive income 85 94
Retained earnings 1,825 1,691
Treasury stock, at cost; 612,355 shares at June 30, 2021 and 0 shares at December 31, 2020, respectively (35) 0
Total shareholders’ equity 3,537 3,441
Total liabilities and shareholders’ equity $ 22,377 $ 22,471



(dollars in millions, except par value amount)	March 31, 2022		December 31, 2021

Assets
Cash and cash equivalents	$	640	$	541
Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.7 billion in 2022, and $1.9 billion and $1.8 billion in 2021, respectively)	1,778		1,992
Net finance receivables (includes loans of consolidated VIEs of $8.6 billion in 2022 and $8.8 billion in 2021)	18,979		19,212
Unearned insurance premium and claim reserves	(741)		(761)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $896 million in 2022 and $910 million in 2021)	(2,071)		(2,095)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	16,167		16,356

Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $509 million in 2022 and $466 million in 2021)	531		476
Goodwill	1,437		1,437
Other intangible assets	274		274

Other assets	981		1,003
Total assets	$	21,808	$	22,079

Liabilities and Shareholders’ Equity
Long-term debt (includes debt of consolidated VIEs of $7.8 billion in 2022 and $8.0 billion in 2021)	$	17,560	$	17,750
Insurance claims and policyholder liabilities	621		621
Deferred and accrued taxes	45		1
Other liabilities (includes other liabilities of consolidated VIEs of $12 million in 2022 and $13 million in 2021)	493		614
Total liabilities	18,719		18,986
Contingencies (Note 12)	0		0

Shareholders’ equity:
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized, 125,793,836 and 127,809,640 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	1		1
Additional paid-in capital	1,672		1,672
Accumulated other comprehensive income (loss)	(11)		61
Retained earnings	1,905		1,727
Treasury stock, at cost; 8,981,004 and 6,712,923 shares at March 31, 2022 and December 31, 2021, respectively	(478)		(368)
Total shareholders’ equity	3,089		3,093
Total liabilities and shareholders’ equity	$	21,808	$	22,079

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

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ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions, except per share amounts) 2021 2020 2021 2020
Interest income $ 1,071 $ 1,077 $ 2,130 $ 2,184
Interest expense 231 271 465 527
Net interest income 840 806 1,665 1,657
Provision for finance receivable losses 132 423 130 954
Net interest income after provision for finance receivable losses 708 383 1,535 703
Other revenues:
Insurance 107 109 214 226
Investment 17 29 34 38
Net loss on repurchases and repayments of debt (1) 0 (48) 0
Other 27 10 41 25
Total other revenues 150 148 241 289
Other expenses:
Salaries and benefits 194 184 383 383
Other operating expenses 153 139 302 291
Insurance policy benefits and claims 48 90 81 157
Total other expenses 395 413 766 831
Income before income taxes 463 118 1,010 161
Income taxes 113 29 247 40
Net income $ 350 $ 89 $ 763 $ 121
Share Data:
Weighted average number of shares outstanding:
Basic 134,255,916 134,316,252 134,330,229 135,112,676
Diluted 134,644,350 134,379,576 134,723,124 135,260,396
Earnings per share:
Basic $ 2.61 $ 0.66 $ 5.68 $ 0.90
Diluted $ 2.60 $ 0.66 $ 5.67 $ 0.90



	Three Months Ended March 31,
(dollars in millions, except per share amounts)	2022		2021

Interest income	$	1,089	$	1,060

Interest expense	219		235

Net interest income	870		825

Provision for finance receivable losses	238		(2)

Net interest income after provision for finance receivable losses	632		827

Other revenues:
Insurance	111		107
Investment	15		17
Gain on sales of finance receivables	17		4
Net loss on repurchases and repayments of debt	—		(47)

Other	19		10
Total other revenues	162		91

Other expenses:
Salaries and benefits	205		189
Other operating expenses	148		150
Insurance policy benefits and claims	45		33
Total other expenses	398		372

Income before income taxes	396		546

Income taxes	95		133

Net income	$	301	$	413

Share Data:
Weighted average number of shares outstanding:
Basic	127,075,714		134,405,368
Diluted	127,463,027		134,807,165
Earnings per share:
Basic	$	2.37	$	3.07
Diluted	$	2.36	$	3.06

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

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions) 2021 2020 2021 2020

Net income $ 350 $ 89 $ 763 $ 121
Other comprehensive income (loss):
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities 17 87 (25) 32
Foreign currency translation adjustments 1 5 3 (5)
Other (12) 0 11 0
Income tax effect:
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities (4) (20) 6 (7)
Foreign currency translation adjustments 0 (1) 0 1
Other 3 0 (3) 0
Other comprehensive income (loss), net of tax, before reclassification adjustments 5 71 (8) 21
Reclassification adjustments included in net income, net of tax:
Net realized gains (losses) on available-for-sale securities, net of tax 0 0 (1) 0
Reclassification adjustments included in net income, net of tax 0 0 (1) 0
Other comprehensive income (loss), net of tax 5 71 (9) 21
Comprehensive income $ 355 $ 160 $ 754 $ 142



	Three Months Ended March 31,
(dollars in millions)	2022		2021

Net income	$	301	$	413

Other comprehensive loss:
Net change in unrealized losses on non-credit impaired available-for-sale securities	(105)		(43)

Foreign currency translation adjustments	2		2
Other	13		23
Income tax effect:
Net change in unrealized losses on non-credit impaired available-for-sale securities	24		10


Foreign currency translation adjustments	(1)		—
Other	(3)		(6)
Other comprehensive loss, net of tax, before reclassification adjustments	(70)		(14)
Reclassification adjustments included in net income, net of tax:
Net realized losses on available-for-sale securities, net of tax	(2)		—

Reclassification adjustments included in net income, net of tax	(2)		—
Other comprehensive loss, net of tax	(72)		(14)

Comprehensive income	$	229	$	399

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

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)
OneMain Holdings, Inc. Shareholders’ Equity
(dollars in millions) Common
Stock Additional
Paid-in
Capital Accumulated
Other Comprehensive
Income (Loss) Retained
Earnings Treasury Stock Total Shareholders’ Equity
Three Months Ended June 30, 2021
Balance, April 1, 2021 $ 1 $ 1,657 $ 80 $ 1,570 $ 0 $ 3,308
Common stock repurchased — — — — (35) (35)
Share-based compensation expense, net of forfeitures — 4 — — — 4
Other comprehensive income — — 5 — — 5
Cash dividends * — — — (95) — (95)
Net income — — — 350 — 350
Balance, June 30, 2021 $ 1 $ 1,661 $ 85 $ 1,825 $ (35) $ 3,537
Three Months Ended June 30, 2020
Balance, April 1, 2020 $ 1 $ 1,645 $ (6) $ 1,412 $ 0 $ 3,052
Share-based compensation expense, net of forfeitures — 3 — — — 3
Other comprehensive income — — 71 — — 71
Cash dividends * — — — (44) — (44)
Net income — — — 89 — 89
Balance, June 30, 2020 $ 1 $ 1,648 $ 65 $ 1,457 $ 0 $ 3,171

* Cash dividends declared were $0.70 per share and $0.33 per share during the three months ended June 30, 2021 and 2020, respectively.

~~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
Six Months Ended June 30, 2021
Balance, January 1, 2021 $ 1 $ 1,655 $ 94 $ 1,691 $ 0 $ 3,441
Common stock repurchased — — — — (35) (35)
Share-based compensation expense, net of forfeitures — 11 — — — 11
Withholding tax on share-based compensation — (5) — — — (5)
Other comprehensive loss — — (9) — — (9)
Cash dividends (a) — — — (629) — (629)
Net income — — — 763 — 763
Balance, June 30, 2021 $ 1 $ 1,661 $ 85 $ 1,825 $ (35) $ 3,537
Six Months Ended June 30, 2020
Balance, January 1, 2020 (pre-adoption) $ 1 $ 1,689 $ 44 $ 2,596 $ 0 $ 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 0 3,502
Common stock repurchased (c) — (45) — — — (45)
Share-based compensation expense, net of forfeitures — 10 — — — 10
Withholding tax on share-based compensation — (6) — — — (6)
Other comprehensive income — — 21 — — 21
Cash dividends (a) — — — (432) — (432)
Net income — — — 121 — 121
Balance, June 30, 2020 $ 1 $ 1,648 $ 65 $ 1,457 $ 0 $ 3,171

~~(a) Cash dividends declared were $4.65 per share and $3.16 per share during the six months ended June 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.

~~(c) The common stock repurchased were retired during the six months ended June 30, 2020.~~


	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


Balance, January 1, 2022	$	1	$	1,672	$	61	$	1,727	$	(368)	$	3,093
Common stock repurchased	—		—		—		—		(110)		(110)

Share-based compensation expense, net of forfeitures	—		12		—		—		—		12
Withholding tax on share-based compensation	—		(12)		—		—		—		(12)
Other comprehensive loss	—		—		(72)		—		—		(72)
Cash dividends *	—		—		—		(123)		—		(123)
Net income	—		—		—		301		—		301
Balance, March 31, 2022	$	1	$	1,672	$	(11)	$	1,905	$	(478)	$	3,089


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 *	—		—		—		(534)		—		(534)
Net income	—		—		—		413		—		413
Balance, March 31, 2021	$	1	$	1,657	$	80	$	1,570	$	—	$	3,308

* Cash dividends declared were $0.95 per share and $3.95 per share during the three months ended March 31, 2022 and 2021, respectively.

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

109

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended
June 30,
(dollars in millions) 2021 2020
Cash flows from operating activities
Net income $ 763 $ 121
Reconciling adjustments:
Provision for finance receivable losses 130 954
Depreciation and amortization 127 130
Deferred income tax charge (benefit) 76 (69)
Net loss on repurchases and repayments of debt 48 0
Share-based compensation expense, net of forfeitures 11 10
Other (19) 5
Cash flows due to changes in other assets and other liabilities (6) 53
Net cash provided by operating activities 1,130 1,204
Cash flows from investing activities
Net principal collections (originations) of finance receivables (717) 64
Proceeds from sales of finance receivables 183 0
Available-for-sale securities purchased (257) (207)
Available-for-sale securities called, sold, and matured 213 262
Other securities purchased (698) (6)
Other securities called, sold, and matured 685 8
Other, net (39) (15)
Net cash provided by (used for) investing activities (630) 106
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of issuance costs 1,578 5,456
Repayment of long-term debt (1,839) (4,689)
Cash dividends (628) (431)
Common stock repurchased (35) (45)
Withholding tax on share-based compensation (5) (6)
Net cash provided by (used for) financing activities (929) 285
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents (429) 1,595
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 $ 2,294 $ 3,227
Supplemental cash flow information
Cash and cash equivalents $ 1,787 $ 2,740
Restricted cash and restricted cash equivalents 507 487
Total cash and cash equivalents and restricted cash and restricted cash equivalents $ 2,294 $ 3,227



	Three Months Ended March 31,
(dollars in millions)	2022		2021

Cash flows from operating activities
Net income	$	301	$	413
Reconciling adjustments:
Provision for finance receivable losses	238		(2)
Depreciation and amortization	61		61
Deferred income tax charge	21		59
Net loss on repurchases and repayments of debt	—		47
Share-based compensation expense, net of forfeitures	12		7
Gain on sales of finance receivables	(17)		(4)
Other	(2)		(2)
Cash flows due to changes in other assets and other liabilities	(62)		(23)
Net cash provided by operating activities	552		556

Cash flows from investing activities
Net principal collections (originations and purchases) of finance receivables	(245)		217

Proceeds from sales of finance receivables	200		50
Available-for-sale securities purchased	(90)		(146)
Available-for-sale securities called, sold, and matured	196		91
Other securities purchased	(2)		(688)
Other securities called, sold, and matured	7		681
Other, net	(16)		(7)
Net cash provided by investing activities	50		198

Cash flows from financing activities
Proceeds from issuance and borrowings of long-term debt, net of issuance costs	198		(1)
Repayment of long-term debt	(398)		(1,065)
Cash dividends	(126)		(534)
Common stock repurchased	(110)		—
Withholding tax on share-based compensation	(12)		(5)
Net cash used for financing activities	(448)		(1,605)



Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	154		(851)
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	1,017		2,723
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	1,171	$	1,872

Supplemental cash flow information
Cash and cash equivalents	$	640	$	1,301
Restricted cash and restricted cash equivalents	531		571
Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	1,171	$	1,872

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, 2022		December 31, 2021

Assets
Cash and cash equivalents	$	620	$	510
Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.7 billion in 2022, and $1.9 billion and $1.8 billion in 2021, respectively)	1,778		1,992
Net finance receivables (includes loans of consolidated VIEs of $8.6 billion in 2022 and $8.8 billion in 2021)	18,979		19,212
Unearned insurance premium and claim reserves	(741)		(761)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $896 million in 2022 and $910 million in 2021)	(2,071)		(2,095)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	16,167		16,356


Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $509 million in 2022 and $466 million in 2021)	531		476
Goodwill	1,437		1,437
Other intangible assets	274		274

Other assets	980		1,001
Total assets	$	21,787	$	22,046

Liabilities and Shareholder’s Equity
Long-term debt (includes debt of consolidated VIEs of $7.8 billion in 2022 and $8.0 billion in 2021)	$	17,560	$	17,750
Insurance claims and policyholder liabilities	621		621
Deferred and accrued taxes	47		1
Other liabilities (includes other liabilities of consolidated VIEs of $12 million in 2022 and $13 million in 2021)	493		614
Total liabilities	18,721		18,986
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, 2022 and December 31, 2021	5		5
Additional paid-in capital	1,916		1,916
Accumulated other comprehensive income (loss)	(11)		61
Retained earnings	1,156		1,078

Total shareholder’s equity	3,066		3,060
Total liabilities and shareholder’s equity	$	21,787	$	22,046

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 March 31,

(dollars in millions)	2022		2021




Interest income	$	1,089	$	1,060

Interest expense	219		235

Net interest income	870		825

Provision for finance receivable losses	238		(2)

Net interest income after provision for finance receivable losses	632		827

Other revenues:
Insurance	111		107
Investment	15		17

Gain on sales of finance receivables	17		4
Net loss on repurchases and repayments of debt	—		(47)

Other	19		10
Total other revenues	162		91

Other expenses:
Salaries and benefits	205		189
Other operating expenses	148		150
Insurance policy benefits and claims	45		33
Total other expenses	398		372

Income before income taxes	396		546

Income taxes	95		133

Net income	$	301	$	413

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 March 31,
(dollars in millions)	2022		2021

Net income	$	301	$	413

Other comprehensive loss:
Net change in unrealized losses on non-credit impaired available-for-sale securities	(105)		(43)


Foreign currency translation adjustments	2		2

Other	13		23
Income tax effect:
Net change in unrealized losses on non-credit impaired available-for-sale securities	24		10


Foreign currency translation adjustments	(1)		—
Other	(3)		(6)
Other comprehensive loss, net of tax, before reclassification adjustments	(70)		(14)
Reclassification adjustments included in net income, net of tax:
Net realized losses on available-for-sale securities, net of tax	(2)		—
Reclassification adjustments included in net income, net of tax	(2)		—
Other comprehensive loss, net of tax	(72)		(14)

Comprehensive income	$	229	$	399

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


Balance, January 1, 2022	$	5	$	1,916	$	61	$	1,078	$	3,060

Share-based compensation expense, net of forfeitures	—		12		—		—		12
Withholding tax on share-based compensation	—		(12)		—		—		(12)
Other comprehensive loss	—		—		(72)		—		(72)
Cash dividends	—		—		—		(223)		(223)
Net income	—		—		—		301		301
Balance, March 31, 2022	$	5	$	1,916	$	(11)	$	1,156	$	3,066


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

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)	2022		2021

Cash flows from operating activities
Net income	$	301	$	413
Reconciling adjustments:
Provision for finance receivable losses	238		(2)
Depreciation and amortization	61		61
Deferred income tax charge	21		59
Net loss on repurchases and repayments of debt	—		47
Share-based compensation expense, net of forfeitures	12		7
Gain on sales of finance receivables	(17)		(4)
Other	(2)		(2)
Cash flows due to changes in other assets and other liabilities	(61)		(23)
Net cash provided by operating activities	553		556

Cash flows from investing activities
Net principal collections (originations and purchases) of finance receivables	(245)		217

Proceeds from sales of finance receivables	200		50
Available-for-sale securities purchased	(90)		(146)
Available-for-sale securities called, sold, and matured	196		91
Other securities purchased	(2)		(688)
Other securities called, sold, and matured	7		681
Other, net	(16)		(7)
Net cash provided by investing activities	50		198

Cash flows from financing activities
Proceeds from issuance and borrowings of long-term debt, net of issuance costs	198		(1)
Repayment of long-term debt	(398)		(1,065)
Cash dividends	(226)		(534)
Withholding tax on share-based compensation	(12)		(5)
Net cash used for financing activities	(438)		(1,605)





Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	165		(851)
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	986		2,723
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	1,151	$	1,872






Supplemental cash flow information
Cash and cash equivalents	$	620	$	1,301
Restricted cash and restricted cash equivalents	531		571
Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	1,151	$	1,872

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) June 30, 2021 December 31, 2020
Assets
Cash and cash equivalents $ 1,782 $ 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)
1,969 1,922
Net finance receivables (includes loans of consolidated VIEs of $8.3 billion in 2021 and $8.8 billion
    in 2020)
18,163 18,084
Unearned insurance premium and claim reserves (728) (771)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $906 million in
    2021 and $1.1 billion in 2020)
(2,000) (2,269)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for
    finance receivable losses 15,435 15,044
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents
    of consolidated VIEs of $494 million in 2021 and $441 million in 2020)
507 451
Goodwill 1,437 1,422
Other intangible assets 287 306
Other assets 954 1,054
Total assets $ 22,371 $ 22,471
Liabilities and Shareholder's Equity
Long-term debt (includes debt of consolidated VIEs of $7.5 billion in 2021 and $7.8 billion in 2020) $ 17,605 $ 17,800
Insurance claims and policyholder liabilities 617 621
Deferred and accrued taxes 12 47
Other liabilities (includes other liabilities of consolidated VIEs of $14 million in 2021 and $15 million
    in 2020)
607 563
Total liabilities 18,841 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 June 30, 2021 and December 31, 2020
5 5
Additional paid-in capital 1,905 1,899
Accumulated other comprehensive income 85 94
Retained earnings 1,535 1,442
Total shareholder's equity 3,530 3,440
Total liabilities and shareholder's equity $ 22,371 $ 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
June 30, Six Months Ended
June 30,
(dollars in millions) 2021 2020 2021 2020
Interest income $ 1,071 $ 1,077 $ 2,130 $ 2,184
Interest expense 231 271 465 527
Net interest income 840 806 1,665 1,657
Provision for finance receivable losses 132 423 130 954
Net interest income after provision for finance receivable losses 708 383 1,535 703
Other revenues:
Insurance 107 109 214 226
Investment 17 29 34 38
Net loss on repurchases and repayments of debt (1) 0 (48) 0
Other 27 10 41 25
Total other revenues 150 148 241 289
Other expenses:
Salaries and benefits 194 184 383 383
Other operating expenses 153 139 302 291
Insurance policy benefits and claims 48 90 81 157
Total other expenses 395 413 766 831
Income before income taxes 463 118 1,010 161
Income taxes 113 29 247 40
Net income $ 350 $ 89 $ 763 $ 121

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

~~Table of Contents~~

~~ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES~~

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

Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions) 2021 2020 2021 2020
Net income $ 350 $ 89 $ 763 $ 121
Other comprehensive income (loss):
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities 17 87 (25) 32
Foreign currency translation adjustments 1 5 3 (5)
Other (12) 0 11 0
Income tax effect:
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities (4) (20) 6 (7)
Foreign currency translation adjustments 0 (1) 0 1
Other 3 0 (3) 0
Other comprehensive income (loss), net of tax, before reclassification adjustments 5 71 (8) 21
Reclassification adjustments included in net income, net of tax:
Net realized gains (losses) on available-for-sale securities, net of tax 0 0 (1) 0
Reclassification adjustments included in net income, net of tax 0 0 (1) 0
Other comprehensive income (loss), net of tax 5 71 (9) 21
Comprehensive income $ 355 $ 160 $ 754 $ 142

~~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 June 30, 2021
Balance, April 1, 2021 $ 5 $ 1,901 $ 80 $ 1,320 $ 3,306
Share-based compensation expense, net of forfeitures — 4 — — 4
Other comprehensive income — — 5 — 5
Cash dividends — — — (135) (135)
Net income — — — 350 350
Balance, June 30, 2021 $ 5 $ 1,905 $ 85 $ 1,535 $ 3,530
Three Months Ended June 30, 2020
Balance, April 1, 2020 $ 5 $ 1,889 $ (6) $ 1,159 $ 3,047
Share-based compensation expense, net of forfeitures — 3 — — 3
Other comprehensive income — — 71 — 71
Cash dividends — — — (40) (40)
Net income — — — 89 89
Balance, June 30, 2020 $ 5 $ 1,892 $ 65 $ 1,208 $ 3,170

~~Table of Contents~~

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
Six Months Ended June 30, 2021
Balance, January 1, 2021 $ 5 $ 1,899 $ 94 $ 1,442 $ 3,440
Share-based compensation expense, net of forfeitures — 11 — — 11
Withholding tax on share-based compensation — (5) — — (5)
Other comprehensive loss — — (9) — (9)
Cash dividends — — — (670) (670)
Net income — — — 763 763
Balance, June 30, 2021 $ 5 $ 1,905 $ 85 $ 1,535 $ 3,530
Six Months Ended June 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 — 10 — — 10
Withholding tax on shared-based compensation — (6) — — (6)
Other comprehensive income — — 21 — 21
Cash dividends — — — (473) (473)
Net income — — — 121 121
Balance, June 30, 2020 $ 5 $ 1,892 $ 65 $ 1,208 $ 3,170

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

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

~~Table of Contents~~

~~ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES~~

~~Condensed Consolidated Statements of Cash Flows (Unaudited)~~
Six Months Ended
June 30,
(dollars in millions) 2021 2020
Cash flows from operating activities
Net income $ 763 $ 121
Reconciling adjustments:
Provision for finance receivable losses 130 954
Depreciation and amortization 127 130
Deferred income tax charge (benefit) 76 (69)
Net loss on repurchases and repayments of debt 48 0
Share-based compensation expense, net of forfeitures 11 10
Other (19) 5
Cash flows due to changes in other assets and other liabilities (4) 49
Net cash provided by operating activities 1,132 1,200
Cash flows from investing activities
Net principal collections (originations) of finance receivables (717) 64
Proceeds from sales of finance receivables 183 0
Available-for-sale securities purchased (257) (207)
Available-for-sale securities called, sold, and matured 213 262
Other securities purchased (698) (6)
Other securities called, sold, and matured 685 8
Other, net (39) (15)
Net cash provided by (used for) investing activities (630) 106
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of issuance costs 1,578 5,456
Repayment of long-term debt (1,839) (4,689)
Cash dividends (670) (472)
Withholding tax on share-based compensation (5) (6)
Net cash provided by (used for) financing activities (936) 289
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents (434) 1,595
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 $ 2,289 $ 3,227
Supplemental cash flow information
Cash and cash equivalents $ 1,782 $ 2,740
Restricted cash and restricted cash equivalents 507 487
Total cash and cash equivalents and restricted cash and restricted cash equivalents $ 2,289 $ 3,227

~~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

~~June 30, 2021~~March 31, 2022


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

OneMain Holdings, Inc. (“OMH”), and its ~~wholly-owned~~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, 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,” “OneMain,” “we,” “us,” or “our.”

~~At June 30, 2021, the Apollo-Värde Group owned approximately 27.3% 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)~~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. To conform to the 2022 presentation, we reclassified certain items in prior periods of our condensed consolidated financial statements.

1816

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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. Upon adoption, our assumptions used to measure the liability for future policy benefits will be updated at least annually. The guidance requires the discount rate used to measure the liability to be an upper-medium grade fixed-income instrument yield and updated at each reporting date with changes in the liability due to the discount rate recognized in other comprehensive income. The amendments in this ASU become effective for the Company beginning January 1, ~~2023.~~2023 and we have selected the modified retrospective transition method.

~~We have a~~The Company’s cross-functional implementation team ~~and a~~continues to make progress in line with the established project plan to ensure we comply with all the amendments in this ASU at the time of adoption. The Company’s long-duration contracts include term life, accidental death and dismemberment, and disability income protection. We ~~have selected a vendor for a~~will utilize an actuarial software solution to meet the new accounting and disclosure requirements, and we continue to refine the development of the ~~ASU~~actuarial model and ~~continue~~assumptions. After the model has been subject to ~~make progress~~a parallel testing phase in ~~evaluating~~2022, the ~~potential~~Company will provide further disclosure regarding the estimated impact of the adoption of the ASU on our consolidated financial statements.

Financial Instruments

In March of 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses: Troubled Debt Restructurings and Vintage Disclosures, which eliminates the accounting for troubled debt restructurings by creditors while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendment also requires disclosure of gross charge-offs by year of origination for finance receivables. The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating whether adoption of this ASU will have a material impact on our consolidated financial statements.

We do not believe that any other accounting pronouncements issued, but not yet effective, would have a material impact on our consolidated financial statements or disclosures, if adopted.

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3. Finance Receivables

Our finance receivables consist of personal loans ~~which~~and credit cards. 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. During the third quarter of 2021, we began offering credit cards. Credit cards are open-ended, revolving, with a fixed rate, and are unsecured.

Components of our net finance receivables were as follows:
(dollars in millions) June 30, 2021 December 31, 2020
Gross finance receivables * $ 17,947 $ 17,860
Unearned points and fees (217) (225)
Accrued finance charges 273 299
Deferred origination costs 160 150
Total $ 18,163 $ 18,084




(dollars in millions)	Personal Loans		Credit Cards		Total

March 31, 2022
Gross finance receivables (a)	$	18,693	$	49	$	18,742
Unearned fees	(218)		(1)		(219)
Accrued finance charges and fees	278		1		279
Deferred origination costs	176		1		177
Total	$	18,929	$	50	$	18,979

December 31, 2021
Gross finance receivables (a)	$	18,944	$	24	$	18,968
Unearned fees	(225)		(1)		(226)
Accrued finance charges and fees	289		—		289
Deferred origination costs	179		2		181
Total	$	19,187	$	25	$	19,212

*(a) Gross finance receivables equal the unpaid principal balance of our personal ~~loans.~~loans and credit cards. 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 ~~June 30, 2021~~March 31, 2022, we have whole loan sale flow agreements with third parties, with remaining terms ~~ranging between~~ ~~one~~ toof less than 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 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 six~~ months ended ~~June 30,~~March 31, 2022 and 2021, we sold ~~$120~~$180 million and ~~$165~~$45 million of gross finance receivables, respectively. The gain on the sales were ~~$11~~$17 million and ~~$15~~$4 million during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, respectively.

~~Table of Contents~~

CREDIT QUALITY INDICATOR

We consider the delinquency status of our finance receivables as our key credit quality indicator. We monitor the delinquency of our finance receivable portfolio, including the migration between the delinquency buckets and changes in the delinquency trends to manage our exposure to credit risk in the portfolio.

When ~~finance receivables~~personal loans 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 tois managed by our centralized operations.

At We consider our personal loans to be nonperforming at 90 days or more contractually past due, at which point we ~~consider our finance receivables to be nonperforming. We~~ stop accruing finance charges and reverse finance charges previously ~~accrued on nonperforming loans. We~~accrued. For our personal loans, we reversed net accrued finance charges of ~~$14~~$27 million and ~~$34~~$20 million during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~respectively, and $22 million and $50 million during the three and six months ended June 30, 2020,~~ respectively.

Finance charges recognized from the contractual interest portion of payments received on nonaccrual ~~finance receivables~~personal loans totaled ~~$3 million and $8~~$4 million during the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 and ~~$4 million and $8 million during the three and six months ended June 30, 2020, respectively.~~2021. All personal loans in nonaccrual status are considered in our estimate of allowance for finance receivable losses.

~~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) 2021 2020 2019 2018 2017 Prior Total
June 30, 2021
Performing
Current $ 5,561 $ 6,101 $ 4,025 $ 1,364 $ 372 $ 174 $ 17,597
30-59 days past due 18 79 64 25 9 6 201
60-89 days past due 8 50 38 14 5 3 118
Total performing 5,587 6,230 4,127 1,403 386 183 17,916
Nonperforming (Nonaccrual)
90-179 days past due 4 101 88 31 10 6 240
180 days or more past due 0 3 3 1 0 0 7
Total nonperforming 4 104 91 32 10 6 247
Total $ 5,591 $ 6,334 $ 4,218 $ 1,435 $ 396 $ 189 $ 18,163

(dollars in millions) 2020 2019 2018 2017 2016 Prior Total
December 31, 2020
Performing
Current $ 8,659 $ 5,691 $ 2,064 $ 651 $ 184 $ 106 $ 17,355
30-59 days past due 72 106 44 18 6 5 251
60-89 days past due 44 72 28 11 4 3 162
Total performing 8,775 5,869 2,136 680 194 114 17,768
Nonperforming (Nonaccrual)
90-179 days past due 62 154 59 22 8 5 310
180 days or more past due 1 3 1 1 0 0 6
Total nonperforming 63 157 60 23 8 5 316
Total $ 8,838 $ 6,026 $ 2,196 $ 703 $ 202 $ 119 $ 18,084

2018

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We accrue finance charges and fees on credit cards until charge-off at approximately 180 days past due, at which point we reverse finance charges and fees previously accrued. For credit cards, there were no net accrued finance charges and fees reversed for the three months ended March 31, 2022 and 2021.

The following tables below are a summary of our personal loans by the year of origination and number of days delinquent:


(dollars in millions)	2022		2021		2020		2019		2018		Prior		Total

March 31, 2022
Performing
Current	$	2,771	$	9,057	$	3,252	$	2,153	$	622	$	229	$	18,084
30-59 days past due	3		131		55		37		13		7		246
60-89 days past due	—		99		42		26		9		5		181
Total performing	2,774		9,287		3,349		2,216		644		241		18,511
Nonperforming (Nonaccrual)
90+ days past due	—		202		113		70		21		12		418


Total	$	2,774	$	9,489	$	3,462	$	2,286	$	665	$	253	$	18,929


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

December 31, 2021
Performing
Current	$	10,645	$	3,935	$	2,641	$	814	$	193	$	109	$	18,337
30-59 days past due	125		74		53		19		6		5		282
60-89 days past due	81		53		33		11		4		3		185
Total performing	10,851		4,062		2,727		844		203		117		18,804
Nonperforming (Nonaccrual)
90+ days past due	125		130		85		28		9		6		383



Total	$	10,976	$	4,192	$	2,812	$	872	$	212	$	123	$	19,187

The following is a summary of credit cards by number of days delinquent:



(dollars in millions)	March 31, 2022		December 31, 2021
Current	$	47	$	25
30-59 days past due	2		—
60-89 days past due	1		—
90+ days past due	—		—

Total	$	50	$	25

There were no credit cards that were converted to term loans at March 31, 2022 or December 31, 2021.

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TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES

Information regarding TDR finance receivables were as follows:


(dollars in millions)	(dollars in millions)	June 30, 2021		December 31, 2020		(dollars in millions)	March 31, 2022		December 31, 2021



TDR gross finance receivables	TDR gross finance receivables	$	676	$	689	TDR gross finance receivables	$	652	$	646
TDR net finance receivables *	TDR net finance receivables *	680		691		TDR net finance receivables *	656		650
Allowance for TDR finance receivable losses	Allowance for TDR finance receivable losses	305		314		Allowance for TDR finance receivable losses	263		270

* 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~~There were no credit cards classified as TDR finance receivables ~~were as follows:~~
Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions) 2021 2020 2021 2020

TDR average net finance receivables $ 686 $ 698 $ 688 687
TDR finance charges recognized 14 13 27 25
at March 31, 2022 or December 31, 2021.

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2021		2020		2021		2020		(dollars in millions)	2022		2021

Pre-modification TDR net finance receivables	Pre-modification TDR net finance receivables	$	112	$	129	$	228	$	287	Pre-modification TDR net finance receivables	$	134	$	116
Post-modification TDR net finance receivables:	Post-modification TDR net finance receivables:									Post-modification TDR net finance receivables:
Rate reduction	Rate reduction	79		75		156		175		Rate reduction	87		78
Other *	Other *	33		54		71		112		Other *	47		38
Total post-modification TDR net finance receivables	Total post-modification TDR net finance receivables	$	112	$	129	$	227	$	287	Total post-modification TDR net finance receivables	$	134	$	116
Number of TDR accounts	Number of TDR accounts	13,691		17,381		28,199		39,199		Number of TDR accounts	16,165		14,508

* “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 June 30,				Six Months Ended June 30,					Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2021		2020		2021		2020		(dollars in millions)	2022		2021

TDR net finance receivables *	TDR net finance receivables *	$	27	$	26	$	56	$	57	TDR net finance receivables *	$	30	$	30
Number of TDR accounts	Number of TDR accounts	3,743		3,787		7,926		8,339		Number of TDR accounts	3,796		4,183

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

UNFUNDED LENDING COMMITMENTS

Our unfunded lending commitments consist of the unused credit card lines, which are unconditionally cancellable. We do not anticipate that all of our customers will access their entire available line at any given point in time. The unused credit card lines totaled $42 million at March 31, 2022 and $54 million at December 31, 2021.

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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 delinquency buckets and inclusive of the migration of the ~~loans~~finance receivables 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 ~~impacts and expected recovery of~~overall unemployment rate. We also considered inflationary pressures, supply chain concerns, geopolitical risks, along with the ~~global outbreak of a novel strain of coronavirus (“COVID-19”) on the U.S. economy.~~persistent labor supply shortages. 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.~~providers. At ~~June 30, 2021,~~March 31, 2022, our economic forecast used a reasonable and supportable period of 12 months. The decrease in our allowance for finance receivable losses for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 was primarily due to ~~an improved outlook for unemployment and macroeconomic conditions. In the near-term, we~~a seasonal decline in our loan portfolio. 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:


		Three Months Ended June 30,				Six Months Ended June 30,
(dollars in millions)	(dollars in millions)	2021		2020		2021		2020		(dollars in millions)	Personal Loans		Credit Cards		Total

Three Months Ended March 31, 2022										Three Months Ended March 31, 2022
Balance at beginning of period										Balance at beginning of period	$	2,090	$	5	$	2,095
Provision for finance receivable losses										Provision for finance receivable losses	233		5		238
Charge-offs										Charge-offs	(329)		—		(329)
Recoveries										Recoveries	67		—		67
Balance at end of period										Balance at end of period	$	2,061	$	10	$	2,071

Three Months Ended March 31, 2021*										Three Months Ended March 31, 2021*
Balance at beginning of period	Balance at beginning of period	$	2,062	$	2,182	$	2,269	$	829	Balance at beginning of period	$	2,269	$	—	$	2,269
Impact of adoption of ASU 2016-13 *		—		—		—		1,118
Provision for finance receivable losses	Provision for finance receivable losses	132		423		130		954		Provision for finance receivable losses	(2)		—		(2)
Charge-offs	Charge-offs	(252)		(321)		(507)		(657)		Charge-offs	(255)		—		(255)
Recoveries	Recoveries	58		40		108		80		Recoveries	50		—		50
Balance at end of period	Balance at end of period	$	2,000	$	2,324	$	2,000	$	2,324	Balance at end of period	$	2,062	$	—	$	2,062

* ~~As a result~~There were no credit cards for the three months ended March 31, 2021 as the product offering began in the third quarter 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 2016-13.2021.

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

(dollars in millions) June 30, 2021 December 31, 2020
Allowance for finance receivable losses:
Collectively evaluated for impairment $ 1,695 $ 1,955
TDR finance receivables 305 314
Total $ 2,000 $ 2,269
Finance receivables:
Collectively evaluated for impairment $ 17,483 $ 17,393
TDR net finance receivables 680 691
Total $ 18,163 $ 18,084
Allowance for finance receivable losses as a percentage of finance receivables 11.01 % 12.55 %


(dollars in millions)	Personal Loans			Credit Cards			Total

March 31, 2022
Allowance for finance receivable losses:
Collectively evaluated for impairment	$	1,798		$	10		$	1,808

TDR finance receivables	263			—			263
Total	$	2,061		$	10		$	2,071

Finance receivables:
Collectively evaluated for impairment	$	18,273		$	50		$	18,323

TDR finance receivables	656			—			656
Total	$	18,929		$	50		$	18,979

Allowance for finance receivable losses as a percentage of finance receivables	10.89		%	19.99		%	10.91		%

December 31, 2021
Allowance for finance receivable losses:
Collectively evaluated for impairment	$	1,820		$	5		$	1,825

TDR finance receivables	270			—			270
Total	$	2,090		$	5		$	2,095

Finance receivables:
Collectively evaluated for impairment	$	18,537		$	25		$	18,562

TDR finance receivables	650			—			650
Total	$	19,187		$	25		$	19,212

Allowance for finance receivable losses as a percentage of finance receivables	10.89		%	19.91		%	10.90		%

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

June 30, 2021*
March 31, 2022*										March 31, 2022*
Fixed maturity available-for-sale securities:	Fixed maturity available-for-sale securities:									Fixed maturity available-for-sale securities:
U.S. government and government sponsored entities	U.S. government and government sponsored entities	$	13	$	0	$	0	$	13	U.S. government and government sponsored entities	$	11	$	—	$	—	$	11
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	82		4		0		86		Obligations of states, municipalities, and political subdivisions	74		—		(3)		71
Commercial paper	Commercial paper	37		0		0		37		Commercial paper	57		—		—		57
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	143		6		0		149		Non-U.S. government and government sponsored entities	156		1		(3)		154
Corporate debt	Corporate debt	1,187		78		(2)		1,263		Corporate debt	1,140		11		(38)		1,113
Mortgage-backed, asset-backed, and collateralized:	Mortgage-backed, asset-backed, and collateralized:									Mortgage-backed, asset-backed, and collateralized:
RMBS	RMBS	189		4		(1)		192		RMBS	177		1		(8)		170
CMBS	CMBS	52		2		0		54		CMBS	43		—		(1)		42
CDO/ABS	CDO/ABS	81		2		(1)		82		CDO/ABS	85		—		(3)		82
Total	Total	$	1,784	$	96	$	(4)	$	1,876	Total	$	1,743	$	13	$	(56)	$	1,700

December 31, 2020*
December 31, 2021*										December 31, 2021*
Fixed maturity available-for-sale securities:	Fixed maturity available-for-sale securities:									Fixed maturity available-for-sale securities:
U.S. government and government sponsored entities	U.S. government and government sponsored entities	$	12	$	0	$	0	$	12	U.S. government and government sponsored entities	$	16	$	—	$	—	$	16
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	87		5		0		92		Obligations of states, municipalities, and political subdivisions	76		3		—		79
Commercial paper	Commercial paper	28		0		0		28		Commercial paper	50		—		—		50
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	137		9		0		146		Non-U.S. government and government sponsored entities	151		4		—		155
Corporate debt	Corporate debt	1,124		95		(1)		1,218		Corporate debt	1,246		61		(5)		1,302
Mortgage-backed, asset-backed, and collateralized:	Mortgage-backed, asset-backed, and collateralized:									Mortgage-backed, asset-backed, and collateralized:
RMBS	RMBS	208		7		0		215		RMBS	169		3		(2)		170
CMBS	CMBS	55		3		0		58		CMBS	44		1		—		45
CDO/ABS	CDO/ABS	77		2		(1)		78		CDO/ABS	90		1		(1)		90
Total	Total	$	1,728	$	121	$	(2)	$	1,847	Total	$	1,842	$	73	$	(8)	$	1,907

* ~~There was 0~~The allowance for credit losses related to our investment securities as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021 were immaterial.

Interest receivables reported in “Other assets” totaled ~~$13~~$12 million and ~~$12~~$13 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. There were no material amounts reversed from investment revenue for available-for-sale securities for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

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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

June 30, 2021
March 31, 2022														March 31, 2022
U.S. government and government sponsored entities	U.S. government and government sponsored entities	$	1	$	0	$	0	$	0	$	1	$	0	U.S. government and government sponsored entities	$	6	$	—	$	—	$	—	$	6	$	—
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	4		0		0		0		4		0		Obligations of states, municipalities, and political subdivisions	48		(3)		2		—		50		(3)
Commercial paper	Commercial paper	3		0		0		0		3		0		Commercial paper	47		—		—		—		47		—
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	5		0		1		0		6		0		Non-U.S. government and government sponsored entities	91		(3)		6		—		97		(3)
Corporate debt	Corporate debt	99		(2)		11		0		110		(2)		Corporate debt	584		(31)		48		(7)		632		(38)
Mortgage-backed, asset-backed, and collateralized:	Mortgage-backed, asset-backed, and collateralized:													Mortgage-backed, asset-backed, and collateralized:
RMBS	RMBS	47		(1)		1		0		48		(1)		RMBS	125		(6)		20		(2)		145		(8)

CMBS														CMBS	31		(1)		—		—		31		(1)
CDO/ABS	CDO/ABS	16		(1)		4		0		20		(1)		CDO/ABS	61		(3)		5		—		66		(3)
Total	Total	$	175	$	(4)	$	17	$	0	$	192	$	(4)	Total	$	993	$	(47)	$	81	$	(9)	$	1,074	$	(56)

December 31, 2020

December 31, 2021														December 31, 2021
U.S. government and government sponsored entities														U.S. government and government sponsored entities	$	6	$	—	$	—	$	—	$	6	$	—
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	10		—		—		—		10		—
Commercial paper	Commercial paper	19		0		0		0		19		0		Commercial paper	46		—		—		—		46		—
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	19		—		5		—		24		—
Corporate debt	Corporate debt	45		(1)		8		0		53		(1)		Corporate debt	208		(3)		38		(2)		246		(5)
Mortgage-backed, asset-backed, and collateralized:	Mortgage-backed, asset-backed, and collateralized:													Mortgage-backed, asset-backed, and collateralized:

RMBS														RMBS	81		(1)		15		(1)		96		(2)
CMBS	CMBS	8		0		0		0		8		0		CMBS	7		—		—		—		7		—
CDO/ABS	CDO/ABS	17		(1)		0		0		17		(1)		CDO/ABS	41		(1)		3		—		44		(1)
Total	Total	$	92	$	(2)	$	8	$	0	$	100	$	(2)	Total	$	418	$	(5)	$	61	$	(3)	$	479	$	(8)

On a lot basis, we had ~~262~~1,406 and ~~148~~570 investment securities in an unrealized loss position at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, 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, as of ~~June 30, 2021,~~March 31, 2022, 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 ~~June 30, 2021,~~March 31, 2022, 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 six~~ months ended ~~June 30,~~March 31, 2022 and 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 six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

The proceeds of available-for-sale securities sold or redeemed during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 totaled ~~$72~~$163 million and ~~$139 million, respectively. The proceeds of available-for-sale securities sold or redeemed during the three and six months ended June 30, 2020 totaled $47 million and $105~~$67 million, respectively. The net realized gains and losses were immaterial during the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

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Contractual maturities of fixed-maturity available-for-sale securities at ~~June 30, 2021~~March 31, 2022 were as follows:


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

Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:	Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:					Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
Due in 1 year or less	Due in 1 year or less	$	153	$	153	Due in 1 year or less	$	180	$	179
Due after 1 year through 5 years	Due after 1 year through 5 years	587		555		Due after 1 year through 5 years	493		496
Due after 5 years through 10 years	Due after 5 years through 10 years	627		591		Due after 5 years through 10 years	572		598
Due after 10 years	Due after 10 years	181		163		Due after 10 years	161		165
Mortgage-backed, asset-backed, and collateralized securities	Mortgage-backed, asset-backed, and collateralized securities	328		322		Mortgage-backed, asset-backed, and collateralized securities	294		305
Total	Total	$	1,876	$	1,784	Total	$	1,700	$	1,743

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 ~~$594~~$556 million and ~~$604~~$587 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

OTHER SECURITIES

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


(dollars in millions)	(dollars in millions)	June 30, 2021		December 31, 2020		(dollars in millions)	March 31, 2022		December 31, 2021

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

Non-U.S. government and government sponsored entities		$	1	$	1
Corporate debt		12		17
Mortgage-backed, asset-backed, and collateralized bonds		30		17
Total bonds		43		35

Bonds						Bonds	$	25	$	30
Preferred stock *	Preferred stock *	19		13		Preferred stock *	19		22
Common stock *	Common stock *	31		27		Common stock *	34		33

Total	Total	$	93	$	75	Total	$	78	$	85

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

Net unrealized gains and losses on other securities held were immaterial for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021. Net unrealized gains on other securities held were $6 million for the three months ended June 30, 2020. Net unrealized losses on other securities held were $7 million for the six months ended June 30, 2020. Net realized gains and losses on other securities sold or redeemed were immaterial for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

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 ~~June 30, 2021~~March 31, 2022 were as follows:
Senior Debt
(dollars in millions) Securitizations Unsecured
Notes (a) Junior
Subordinated
Debt (a) Total
Interest rates (b) 0.77% - 6.94% 3.50% - 8.88% 1.93 %
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 4,750 350 5,100
Securitizations (c) 7,499 0 0 7,499
Total principal maturities $ 7,499 $ 10,052 $ 350 $ 17,901
Total carrying amount $ 7,466 $ 9,967 $ 172 $ 17,605
Debt issuance costs (d) $ (30) $ (88) $ 0 $ (118)


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

Interest rates (b)	0.81%-6.94%		0.99%-1.15%		3.50%-8.88%		1.99		%

Remainder of 2022	$	—	$	—	$	—	$	—		$	—
2023	—		—		1,175		—			1,175
2024	—		—		1,300		—			1,300
2025	—		—		1,835		—			1,835
2026	—		—		1,600		—			1,600
2027-2067	—		—		3,750		350			4,100
Securitizations (c)	7,184		—		—		—			7,184
Revolving conduit facilities (c)	—		650		—		—			650

Total principal maturities	$	7,184	$	650	$	9,660	$	350		$	17,844

Total carrying amount	$	7,153	$	650	$	9,585	$	172		$	17,560
Debt issuance costs (d)	(29)		—		(77)		—			(106)

(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 ~~June 30, 2021.~~

March 31, 2022.

(c) Securitizations and borrowings under the revolving conduit facilities are not included in the above maturities by period due to their variable monthly repayments, which may result in pay-off prior to the stated maturity date. ~~At June 30, 2021, there were 0 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 and unsecured corporate revolver, which totaled $3330 million at ~~June 30, 2021~~March 31, 2022 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 in the 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.

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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 condensed consolidated financial statements because we are the primary beneficiary of each VIE. We account for these asset-backed debt obligations as ~~secured~~securitized borrowings.

See Note 32 and Note 109 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report for more detail regarding VIEs.

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We parenthetically disclose on our consolidated balance sheets the VIE’s assets that can only be used to settle the VIE’s obligations and liabilities if its creditors have no recourse against the primary beneficiary’s general credit. The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts and revolving conduit facilities were as follows:


(dollars in millions)	(dollars in millions)	June 30, 2021		December 31, 2020		(dollars in millions)	March 31, 2022		December 31, 2021

Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	2	$	2	Cash and cash equivalents	$	2	$	2
Net finance receivables	Net finance receivables	8,305		8,772		Net finance receivables	8,579		8,821
Allowance for finance receivable losses	Allowance for finance receivable losses	906		1,085		Allowance for finance receivable losses	896		910
Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	494		441		Restricted cash and restricted cash equivalents	509		466
Other assets	Other assets	33		33		Other assets	27		26

Liabilities	Liabilities					Liabilities
Long-term debt	Long-term debt	$	7,466	$	7,789	Long-term debt	$	7,803	$	7,999
Other liabilities	Other liabilities	14		15		Other liabilities	12		13

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 ~~$75~~$65 million and ~~$153~~$78 million during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~respectively, compared to $90 million and $172 million during the three and six months ended June 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~~securitized 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 ~~$7.3~~$6.0 billion as of ~~June 30, 2021.~~March 31, 2022. 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~~nine years as of ~~June 30, 2021.~~March 31, 2022. Amounts drawn on these facilities are collateralized by our personal loans.

At ~~June 30, 2021, 0 amounts were~~March 31, 2022, an aggregate amount of $650 million was drawn under these ~~facilities.~~facilities and the remaining borrowing capacity was $5.4 billion.

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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 Six Months Ended June 30,					At or for the Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2021		2020		(dollars in millions)	2022		2021

Balance at beginning of period	Balance at beginning of period	$	148	$	117	Balance at beginning of period	$	118	$	148
Less reinsurance recoverables	Less reinsurance recoverables	(3)		(4)		Less reinsurance recoverables	(3)		(3)

Net balance at beginning of period	Net balance at beginning of period	145		113		Net balance at beginning of period	115		145

Additions for losses and loss adjustment expenses incurred to:	Additions for losses and loss adjustment expenses incurred to:					Additions for losses and loss adjustment expenses incurred to:
Current year	Current year	109		174		Current year	58		57
Prior years *	Prior years *	(18)		(11)		Prior years *	(8)		(18)
Total	Total	91		163		Total	50		39
Reductions for losses and loss adjustment expenses paid related to:	Reductions for losses and loss adjustment expenses paid related to:					Reductions for losses and loss adjustment expenses paid related to:
Current year	Current year	(53)		(58)		Current year	(16)		(18)
Prior years	Prior years	(67)		(47)		Prior years	(35)		(47)
Total	Total	(120)		(105)		Total	(51)		(65)

Net balance at end of period	Net balance at end of period	116		171		Net balance at end of period	114		119
Plus reinsurance recoverables	Plus reinsurance recoverables	3		3		Plus reinsurance recoverables	3		3

Balance at end of period	Balance at end of period	$	119	$	174	Balance at end of period	$	117	$	122

* ~~Reflects (i)~~At March 31, 2022, $8 million reflected a redundancy in the prior years’ net reserves, primarily due to favorable development of credit and term life claims during the period. At March 31, 2021, $18 million ~~at June 30, 2021,~~reflected a redundancy in the prior years’ net reserves, 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 $11 million at June 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.

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


		Three Months Ended June 30,		Six Months Ended June 30,			Three Months Ended March 31,
		2021	2020	2021	2020		2022	2021

Balance at beginning of period	Balance at beginning of period	134,477,096	134,309,707	134,341,724	136,101,156	Balance at beginning of period	127,809,640	134,341,724
Common stock issued	Common stock issued	19,302	9,464	154,674	249,713	Common stock issued	252,277	135,372
Common stock repurchased *		(612,355)	0	(612,355)	(2,031,698)
Common stock repurchased						Common stock repurchased	(2,282,552)	—
Treasury stock issued						Treasury stock issued	14,471	—

Balance at end of period	Balance at end of period	133,884,043	134,319,171	133,884,043	134,319,171	Balance at end of period	125,793,836	134,477,096

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

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EARNINGS PER SHARE (OMH ONLY)

The computation of earnings per share was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
(dollars in millions, except per share data)	(dollars in millions, except per share data)	2021		2020		2021		2020		(dollars in millions, except per share data)	2022		2021

Numerator (basic and diluted):	Numerator (basic and diluted):									Numerator (basic and diluted):
Net income	Net income	$	350	$	89	$	763	$	121	Net income	$	301	$	413
Denominator:	Denominator:									Denominator:
Weighted average number of shares outstanding (basic)	Weighted average number of shares outstanding (basic)	134,255,916		134,316,252		134,330,229		135,112,676		Weighted average number of shares outstanding (basic)	127,075,714		134,405,368
Effect of dilutive securities *	Effect of dilutive securities *	388,434		63,324		392,895		147,720		Effect of dilutive securities *	387,313		401,797
Weighted average number of shares outstanding (diluted)	Weighted average number of shares outstanding (diluted)	134,644,350		134,379,576		134,723,124		135,260,396		Weighted average number of shares outstanding (diluted)	127,463,027		134,807,165
Earnings per share:	Earnings per share:									Earnings per share:
Basic	Basic	$	2.61	$	0.66	$	5.68	$	0.90	Basic	$	2.37	$	3.07
Diluted	Diluted	$	2.60	$	0.66	$	5.67	$	0.90	Diluted	$	2.36	$	3.06

* We have excluded weighted-average unvested restricted stock units totaling ~~11,068~~1,172,754 and ~~483,644~~133,004 for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and 49,506 and 304,866 for the six months ended June 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)	(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)		(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 June 30, 2021
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
Balance at beginning of period	Balance at beginning of period	$	58	$	1	$	4	$	17	$	80	Balance at beginning of period	$	49	$	1	$	3	$	8	$	61
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	13		0		1		(9)		5		Other comprehensive income (loss) before reclassifications	(81)		—		1		10		(70)

Reclassification adjustments from accumulated other comprehensive loss												Reclassification adjustments from accumulated other comprehensive loss	(2)		—		—		—		(2)
Balance at end of period	Balance at end of period	$	71	$	1	$	5	$	8	$	85	Balance at end of period	$	(34)	$	1	$	4	$	18	$	(11)

Three Months Ended June 30, 2020
Balance at beginning of period		$	(1)	$	3	$	(8)	$	0	$	(6)
Other comprehensive income before reclassifications		67		0		4		0		71

Balance at end of period		$	66	$	3	$	(4)	$	0	$	65

Six Months Ended June 30, 2021
Three Months Ended March 31, 2021												Three Months Ended March 31, 2021
Balance at beginning of period	Balance at beginning of period	$	91	$	1	$	2	$	0	$	94	Balance at beginning of period	$	91	$	1	$	2	$	—	$	94
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(19)		0		3		8		(8)		Other comprehensive income (loss) before reclassifications	(33)		—		2		17		$	(14)
Reclassification adjustments from accumulated other comprehensive income		(1)		0		0		0		(1)
Balance at end of period		$	71	$	1	$	5	$	8	$	85

Six Months Ended June 30, 2020
Balance at beginning of period		$	41	$	3	$	0	$	0	$	44
Other comprehensive income (loss) before reclassifications		25		0		(4)		0		21

Balance at end of period	Balance at end of period	$	66	$	3	$	(4)	$	0	$	65	Balance at end of period	$	58	$	1	$	4	$	17	$	80

(a) There were no material amounts related to available-for-sale debt securities for which an allowance for credit losses was recorded during the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

(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 six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

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11. Income Taxes

We had a net deferred tax asset of ~~$333 million and $405~~$339 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020, respectively. The decrease in our net deferred~~2021. Deferred tax asset ~~of $72 million was primarily due~~increases related to the ~~tax effect~~change in fair value of ~~the decrease in the~~investment securities were offset by decreases related to bonus accrual deductions, mark to market adjustments on our liquidating loan portfolio, and our allowance for finance receivable ~~losses and the decrease due to tax amortization of goodwill.~~losses.

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 ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 was ~~24.4%~~24.1%, compared to ~~24.6%~~24.4% for the same period in ~~2020.~~2021. The effective tax rate for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 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.~~2019. Management believes it has adequately provided for taxes for such years.

Our gross unrecognized tax benefits, including related interest and penalties, totaled ~~$10~~$7 million at ~~June 30, 2021~~March 31, 2022 and $8 million at December 31, ~~2020.~~2021. 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 the CARES Act, the CAA, or the ARPA will have a material impact on our consolidated financial statements. We will continue to monitor legislative developments related to the COVID-19 pandemic.

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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. Additionally, we are, from time to time, in the normal course of business, subject to inquiries and investigations by federal, state and local governmental authorities regarding our products and our operations. These inquiries and investigations may result in fines, restitution or other penalties, including injunctive relief that may result in restrictions on our business. 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.

In March 2022, the staff of the United States Consumer Financial Protection Bureau (“CFPB”) notified us that, in accordance with the CFPB’s discretionary Notice and Opportunity to Respond and Advise (“NORA”) process, it is considering recommending that the CFPB take legal action against the Company in connection with alleged violations of the Consumer Financial Protection Act, 12 U.S.C. §§ 5531, 5536. The staff’s investigation is focused on certain refunding practices for optional insurance and membership plan products that were subsequently canceled by the consumer after purchase. We are cooperating with the CFPB in this matter and expect ongoing interactions. Although the Company believes it has not violated the Consumer Financial Protection Act, we are unable to estimate how long this investigation will continue, whether and in what manner the CFPB may commence legal action, or what the ultimate outcome of this matter will be. Should the CFPB opt to commence legal proceedings, it may seek civil monetary penalties, restitution, injunctive relief, or other damages. The Company does not currently believe that the outcome of this matter will have a material adverse effect on our business, financial condition, or results of operation.

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13. Segment Information

At ~~June 30, 2021,~~March 31, 2022, 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 32 and Note 1817 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)	(dollars in millions)	Consumer and Insurance		Other		Segment to GAAP Adjustment		Consolidated Total		(dollars in millions)	Consumer and Insurance		Other		Segment to GAAP Adjustment		Consolidated Total

Three Months Ended June 30, 2021
Three Months Ended March 31, 2022										Three Months Ended March 31, 2022
Interest income	Interest income	$	1,069	$	1	$	1	$	1,071	Interest income	$	1,087	$	1	$	1	$	1,089
Interest expense	Interest expense	230		1		0		231		Interest expense	217		1		1		219
Provision for finance receivable losses	Provision for finance receivable losses	130		0		2		132		Provision for finance receivable losses	237		—		1		238
Net interest income after provision for finance receivable losses	Net interest income after provision for finance receivable losses	709		0		(1)		708		Net interest income after provision for finance receivable losses	633		—		(1)		632
Other revenues	Other revenues	147		4		(1)		150		Other revenues	158		4		—		162
Other expenses	Other expenses	382		6		7		395		Other expenses	395		4		(1)		398
Income (loss) before income tax expense (benefit)		$	474	$	(2)	$	(9)	$	463
Income before income tax expense										Income before income tax expense	$	396	$	—	$	—	$	396

Assets										Assets	$	19,748	$	40	$	2,020	$	21,808

Three Months Ended June 30, 2020
Interest income $ 1,074 $ 1 $ 2 $ 1,077
Interest expense 266 1 4 271
Provision for finance receivable losses 422 0 1 423
Net interest income after provision for finance receivable losses 386 0 (3) 383
Other revenues 144 4 0 148
Other expenses 402 5 6 413
Income (loss) before income tax expense (benefit) $ 128 $ (1) $ (9) $ 118




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)		—		1		(2)
Net interest income after provision for finance receivable losses	827		—		—		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

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(dollars in millions) Consumer
and
Insurance Other Segment to
GAAP
Adjustment Consolidated
Total
At or for the Six Months Ended June 30, 2021
Interest income $ 2,125 $ 3 $ 2 $ 2,130
Interest expense 462 2 1 465
Provision for finance receivable losses 127 0 3 130
Net interest income after provision for finance receivable losses 1,536 1 (2) 1,535
Other revenues 244 7 (10) 241
Other expenses 739 12 15 766
Income (loss) before income tax expense (benefit) $ 1,041 $ (4) $ (27) $ 1,010
Assets $ 20,301 $ 48 $ 2,028 $ 22,377

At or for the Six Months Ended June 30, 2020
Interest income $ 2,174 $ 3 $ 7 $ 2,184
Interest expense 515 2 10 527
Provision for finance receivable losses 952 0 2 954
Net interest income after provision for finance receivable losses 707 1 (5) 703
Other revenues 281 9 (1) 289
Other expenses 809 12 10 831
Income (loss) before income tax expense (benefit) $ 179 $ (2) $ (16) $ 161
Assets $ 20,389 $ 70 $ 2,049 $ 22,508

3332

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14. Fair Value Measurements

The accounting policies of our fair value measurements are the same as those disclosed in Note 32 and Note 1918 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					Fair Value Measurements Using									Total Fair Value			Total Carrying Value
(dollars in millions)	(dollars in millions)	Level 1		Level 2		Level 3				(dollars in millions)				Level 1				Level 2			Level 3

June 30, 2021
March 31, 2022														March 31, 2022
Assets	Assets													Assets
Cash and cash equivalents	Cash and cash equivalents	$	1,784	$	3	$	0			$	1,787				$	1,787	Cash and cash equivalents		$	631		$	9		$	—		$	640		$	640
Investment securities	Investment securities	53		1,908		8		1,969				1,969		Investment securities			56			1,717			5			1,778			1,778
Net finance receivables, less allowance for finance receivable losses	Net finance receivables, less allowance for finance receivable losses	0		0		19,140		19,140				16,163		Net finance receivables, less allowance for finance receivable losses			—			—			19,479			19,479			16,908
Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	507		0		0		507				507		Restricted cash and restricted cash equivalents			531			—			—			531			531
Other assets *	Other assets *	0		0		53		53				52		Other assets *			—			—			51			51			43

Liabilities	Liabilities													Liabilities
Long-term debt	Long-term debt	$	0	$	19,025	$	0	$	19,025			$	17,605	Long-term debt			$	—		$	17,537		$	—		$	17,537		$	17,560

December 31, 2020

December 31, 2021														December 31, 2021
Assets	Assets													Assets
Cash and cash equivalents	Cash and cash equivalents	$	2,255	$	17	$	0	$	2,272			$	2,272	Cash and cash equivalents			$	535		$	6		$	—		$	541		$	541
Investment securities	Investment securities	44		1,870		8		1,922				1,922		Investment securities			59			1,927			6			1,992			1,992
Net finance receivables, less allowance for finance receivable losses	Net finance receivables, less allowance for finance receivable losses	0		0		18,629		18,629				15,815		Net finance receivables, less allowance for finance receivable losses			—			—			20,083			20,083			17,117
Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	451		0		0		451				451		Restricted cash and restricted cash equivalents			476			—			—			476			476
Other assets *	Other assets *	0		2		60		62				62		Other assets *			—			—			52			52			46

Liabilities	Liabilities													Liabilities
Long-term debt	Long-term debt	$	0	$	19,426	$	0	$	19,426			$	17,800	Long-term debt			$	—		$	18,781		$	—		$	18,781		$	17,750

*Other assets at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 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			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

June 30, 2021
March 31, 2022										March 31, 2022
Assets	Assets									Assets
Cash equivalents in mutual funds	Cash equivalents in mutual funds	$	1,148	$	0	$	0	$	1,148	Cash equivalents in mutual funds	$	138	$	—	$	—	$	138
Cash equivalents in securities	Cash equivalents in securities	0		3		0		3		Cash equivalents in securities	—		9		—		9
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		13		0		13		U.S. government and government sponsored entities	—		11		—		11
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	0		86		0		86		Obligations of states, municipalities, and political subdivisions	—		71		—		71
Commercial paper	Commercial paper	0		37		0		37		Commercial paper	—		57		—		57
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	0		149		0		149		Non-U.S. government and government sponsored entities	—		154		—		154
Corporate debt	Corporate debt	4		1,255		4		1,263		Corporate debt	4		1,105		4		1,113
RMBS	RMBS	0		192		0		192		RMBS	—		170		—		170
CMBS	CMBS	0		54		0		54		CMBS	—		42		—		42
CDO/ABS	CDO/ABS	0		82		0		82		CDO/ABS	—		82		—		82

Total available-for-sale securities	Total available-for-sale securities	4		1,868		4		1,876		Total available-for-sale securities	4		1,692		4		1,700
Other securities	Other securities									Other securities

Bonds:	Bonds:									Bonds:

Non-U.S. government and government sponsored entities		0		1		0		1

Corporate debt	Corporate debt	0		11		1		12		Corporate debt	—		8		—		8
RMBS	RMBS	0		1		0		1		RMBS	—		1		—		1

CDO/ABS	CDO/ABS	0		27		2		29		CDO/ABS	—		16		—		16
Total bonds	Total bonds	0		40		3		43		Total bonds	—		25		—		25
Preferred stock	Preferred stock	19		0		0		19		Preferred stock	19		—		—		19
Common stock	Common stock	30		0		1		31		Common stock	33		—		1		34

Total other securities	Total other securities	49		40		4		93		Total other securities	52		25		1		78
Total investment securities	Total investment securities	53		1,908		8		1,969		Total investment securities	56		1,717		5		1,778

Restricted cash equivalents in mutual funds	Restricted cash equivalents in mutual funds	498		0		0		498		Restricted cash equivalents in mutual funds	512		—		—		512
Total	Total	$	1,699	$	1,911	$	8	$	3,618	Total	$	706	$	1,726	$	5	$	2,437

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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, 2021										December 31, 2021
Assets	Assets									Assets
Cash equivalents in mutual funds	Cash equivalents in mutual funds	$	2,018	$	0	$	0	$	2,018	Cash equivalents in mutual funds	$	41	$	—	$	—	$	41
Cash equivalents in securities	Cash equivalents in securities	0		17		0		17		Cash equivalents in securities	—		6		—		6
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	—		16		—		16
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	—		79		—		79
Certificates of deposit and commercial paper	Certificates of deposit and commercial paper	0		28		0		28		Certificates of deposit and commercial paper	—		50		—		50
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	—		155		—		155
Corporate debt	Corporate debt	5		1,207		6		1,218		Corporate debt	5		1,292		5		1,302
RMBS	RMBS	0		215		0		215		RMBS	—		170		—		170
CMBS	CMBS	0		58		0		58		CMBS	—		45		—		45
CDO/ABS	CDO/ABS	0		78		0		78		CDO/ABS	—		90		—		90

Total available-for-sale securities	Total available-for-sale securities	5		1,836		6		1,847		Total available-for-sale securities	5		1,897		5		1,907
Other securities	Other securities									Other securities

Bonds:	Bonds:									Bonds:
Non-U.S. government and government sponsored entities		0		1		0		1

Corporate debt	Corporate debt	0		16		1		17		Corporate debt	—		9		—		9

RMBS										RMBS	—		1		—		1

CDO/ABS	CDO/ABS	0		17		0		17		CDO/ABS	—		20		—		20
Total bonds	Total bonds	0		34		1		35		Total bonds	—		30		—		30
Preferred stock	Preferred stock	13		0		0		13		Preferred stock	22		—		—		22
Common stock	Common stock	26		0		1		27		Common stock	32		—		1		33

Total other securities	Total other securities	39		34		2		75		Total other securities	54		30		1		85
Total investment securities	Total investment securities	44		1,870		8		1,922		Total investment securities	59		1,927		6		1,992
Restricted cash equivalents in mutual funds	Restricted cash equivalents in mutual funds	441		0		0		441		Restricted cash equivalents in mutual funds	468		—		—		468
Total	Total	$	2,503	$	1,887	$	8	$	4,398	Total	$	568	$	1,933	$	6	$	2,507

Due to the insignificant activity within the Level 3 assets during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 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 six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS

See Note 1918 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,~~“assumes,” “believes,” “can,” “continues,” “could,” “estimates,” “expects,” “forecasts,” “foresees,” “goals,” “intends,” “likely,” “objective,” “plans,” “projects,” “target,” “trend,” “remains,” and similar expressions or future or conditional verbs such as ~~“would,” “should,”~~ “could,” “may,” “might,” “should,” “will,” or ~~“will”~~“would” 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”)~~, including additional strains of COVID-19 that continue to emerge,~~ and the ~~mitigation efforts by governments and related effects on us, our customers, and our 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, floods, or ~~floods~~wildfires 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 information, operational or security systems, or infrastructure or those of third parties, including as a result of cyber-attacks, war, or other ~~cyber-related incidents involving the loss, theft or unauthorized disclosure of personally identifiable information (“PII”) of our present or former customers;~~disruptions;

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

•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;

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•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;~~

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

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

•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 ~~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~~covenants; and ~~may result in conflicts of interest;~~

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

•our substantial indebtedness, which could prevent us from meeting our obligations under our debt instruments and limit our ability to react to changes in the economy or our industry or limit 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.~~agencies.

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

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. You should specifically consider the factors identified in this report and in the documents we file with the SEC ~~including our 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 the leader in offering nonprime customers responsible access to credit. Our customers are hardworking Americans who have been largely underserved by traditional lenders such as banks and credit unions. We believe our customers deserve fair and responsible access to credit, and we empower them to solve today’s problems and reach a ~~leading provider of responsible~~better financial future through our personalized solutions.

We operate in the United States and market our personal ~~loan products, primarily to non-prime customers. Our network of approximately 1,400 branch offices~~loans in 44 ~~states is staffed with expert personnel~~states. In the third quarter of 2021, we began offering two credit cards, BrightWay and ~~is complemented by~~BrightWay+, which are designed to reward customers for responsible credit activity such as consistent on-time payments. We continue to expand BrightWay and BrightWay+ credit cards across our ~~centralized operations~~branch network, through direct mail, and through 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.~~affiliates. In connection with our ~~personal loan business,~~offerings, our insurance subsidiaries offer our personal loan customers optional credit and non-credit insurance, and other insurance-related products. We strive to meet our customers at their preferred channel and to deliver a seamless customer experience through our digital platforms or working with our expert team members at our approximately 1,400 locations. Our personal loans, credit cards, and other products help customers meet everyday needs and take steps to improve their financial well-being.

In addition to our loan originations, ~~and~~ insurance, and other product sales activities, we also service the loans ~~owned by us~~that we originate and ~~service~~retain on our balance sheet, as well as loans owned by third ~~parties;~~parties on their behalf in connection with our whole loan sale program and legacy businesses. We also pursue strategic acquisitions and dispositions of assets and businesses, including loan portfolios or other financial ~~assets;~~assets, and may establish joint ventures or enter into other strategic alliances.

OUR PRODUCTS

Our product offerings include:

•Personal Loans — We offer personal loans through our branch network, centralized operations, and our website, www.omf.com, to customers who ~~generally~~ need timely access to cash. Our personal loans are non-revolving, with a fixed rate, fixed terms generally between three and six years, and are secured by automobiles, other titled collateral, or are unsecured. At ~~June 30, 2021,~~March 31, 2022, we had approximately ~~2.27~~2.29 million personal loans totaling $18.9 billion of net finance receivables, of which 52% were secured by titled property, compared to approximately 2.34 million personal loans totaling ~~$18.2~~$19.2 billion of net finance receivables, of which 52% were secured by titled property at December 31, 2021. Commencing in the first quarter of 2021, we also service personal loans for our whole loan sale partners.

•Credit Cards — In the third quarter of 2021, we began offering credit cards through a third-party bank partner from which we purchase the receivable balances. The credit cards are offered through our branch network, direct mail marketing, and direct-to-consumer via our affiliates. Credit cards are open-ended, revolving, with a fixed rate, and are unsecured. At March 31, 2022, we had approximately 74 thousand open credit card customer accounts, totaling $50 million of net finance receivables, compared to approximately ~~2.30~~66 thousand open credit card customer accounts, totaling $25 million ~~personal loans,~~ of ~~which 53% were secured by titled property, totaling $18.1 billion~~net finance receivables at December 31, ~~2020. At June 30, 2021, we also serviced 17 thousand personal loans for our whole loan sale partners for a combined total of 2.29 million customer accounts.~~2021.

•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, ourOur real estate loans held for sale are reported in “Other assets” of our consolidated balance sheets.

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OUR SEGMENT

At ~~June 30, 2021,~~ March 31, 2022, Consumer and Insurance (“C&I&I”) is our only reportable ~~segment.~~ segment, which includes personal loans, credit cards, and insurance products. At March 31, 2022, we managed a combined total of 2.42 million customer accounts and $19.5 billion of managed receivables, compared to 2.45 million customer accounts and $19.6 billion of managed receivables at December 31, 2021.

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

~~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.

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

Stock Repurchase Program

~~During~~On February 2, 2022, the ~~second quarter~~Board authorized a new stock repurchase program, which allows us to repurchase up to $1.0 billion of ~~2021 we commenced~~OMH’s outstanding common stock, excluding fees, commissions, and other expenses related to the repurchases. The authorization expires on December 31, 2024. The new program replaces our ~~stock~~previous share repurchase program. As of ~~June 30, 2021,~~March 31, 2022, we ~~have $120~~had $918 million of authorized share repurchase capacity, excluding fees and commissions, ~~of OMH’s outstanding common stock~~ 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 ofin Part II ~~included in~~of this report for further information on our shares repurchased.

Social Securitization Transaction ~~Completed:~~- OMFIT ~~2021-1~~2022-S1

~~For information regarding~~As part of our continued commitment to improve the ~~issuance~~financial well-being of hardworking Americans, on April 27, 2022, OMFC completed its first social securitization under Rule 144A. We issued $600 million principal amount of notes backed by personal loans made to the target population identified in the OneMain 2022 ABS Social Framework (“OMFIT ~~2021-1, see “Liquidity~~2022-S1”). OMFIT 2022-S1 has a revolving period of three years, during which no principal payments are required. Generally, the target population is comprised of borrowers residing in rural communities (by zip code), 75% of whom are lower income borrowers in these communities. Through the OneMain 2022 ABS Social Bond Framework we aim to promote financial inclusion to the target population by providing equitable access to fair and transparent credit. The OneMain 2022 ABS Social Bond Framework, which is available on OneMain’s Investor Relations website, aligns to the Social Bond Principles 2021, as administered by the International Capital ~~Resources” under Management’s Discussion~~Market Association.

Private Secured Term Funding

On April 25, 2022, OMFC entered into a $350 million private secured term funding collateralized by our personal loans. No principal payments are required to be made during the first three years, followed by a subsequent one-year amortization period at the expiration of which the outstanding principal amount is due and ~~Analysis~~payable.

Notice of ~~Financial Condition~~Redemption of 8.875% Senior Notes Due 2025

On April 26, 2022, OMFC issued a notice to fully redeem its 8.875% Senior Notes due 2025 on June 1, 2022. In connection with the redemption, OMFC expects to pay a net aggregate amount of $637 million, inclusive of accrued interest and ~~Results~~premiums and recognize $26 million net loss on repurchases and repayments of ~~Operations~~debt in ~~this report.~~the second quarter of 2022.

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.

~~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 offerings closed during the first half of 2021 and resulted in the sale by the Selling Stockholders to the Underwriters for a total 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 either transactions.

~~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.

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Election and Resignation of Members of the OMH Board of Directors

On January 27, 2022, Toos N. Daravula was elected to the OMH Board of Directors, effective February 14, 2022.

On February 24, 2022, Peter B. Sinensky resigned from the OMH Board of Directors.

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.~~states and regions that we serve. 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, the crisis. During~~vaccines. Throughout the pandemic, we ~~continued to~~have maintained our 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.~~platform. This ~~combination~~hybrid capability has ~~enhanced~~sustained 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~~combined with the underlying strength of our balance sheet, has positioned us to take advantage of growth opportunities even as the economy continues to recover.

OUTLOOK

We are actively ~~managing~~monitoring the ~~continuing impacts~~current macroeconomic developments, including recent geopolitical actions outside of the ~~COVID-19 pandemic~~U.S., and remain prepared for any additional opportunities or challenges that may impact our ~~industry or business. The impact on our~~business and industry. Our financial condition and results of operations ~~depends on~~could be affected by the ~~continued progress of the economic recovery, which includes states actively open for business,~~macroeconomic environment including unemployment rates and ~~ultimately, unemployment rates.~~other macroeconomic conditions. There ~~is also~~remains uncertainty regarding the effects of additional ~~strains~~variants of COVID-19, recent geopolitical events, and ~~the impact of any related government actions. Current trends of originations and~~their impacts on economic markets. In our view, current credit performance ~~are~~trends remain favorable, but ~~we continue~~delinquency rates have normalized to ~~diligently monitor the economy and its impact to our customers.~~pre-pandemic levels. 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.

Our cumulative investments in our digital capabilities, combined with our proprietary data and advanced analytics, have allowed us to serve our customers through the branch, over the phone, and remotely throughout the pandemic and into the future.

Our experienced management team continues to remain focused on ~~our strategic priorities of~~ maintaining a solid balance sheet with an adequate liquidity runway and capital coverage, upholding a conservative and disciplined underwriting model, and building strong relationships with our ~~customers.~~customers to ensure that we are serving them well. We believe we are well positioned to ~~continue supporting and serving~~serve our customers, ~~investing~~invest in our business, and ~~driving~~drive growth ~~while creating~~to create value for our stockholders as we ~~effectively~~ 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.environment.

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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 June 30, At or for the
Six Months Ended June 30,
(dollars in millions, except per share amounts) 2021 2020 2021 2020
Interest income $ 1,071 $ 1,077 $ 2,130 $ 2,184
Interest expense 231 271 465 527
Provision for finance receivable losses 132 423 130 954
Net interest income after provision for finance receivable losses 708 383 1,535 703
Other revenues 150 148 241 289
Other expenses 395 413 766 831
Income before income taxes 463 118 1,010 161
Income taxes 113 29 247 40
Net income $ 350 $ 89 $ 763 $ 121
Share Data:
Earnings per share:
Diluted $ 2.60 $ 0.66 $ 5.67 $ 0.90
Selected Financial Statistics *
Finance receivables held for investment:
Net finance receivables $ 18,163 $ 17,721 $ 18,163 $ 17,721
Number of accounts 2,270,043 2,305,877 2,270,043 2,305,877
Average net receivables $ 17,717 $ 17,909 $ 17,770 $ 18,144
Yield 24.21 % 24.16 % 24.14 % 24.16 %
Gross charge-off ratio 5.70 % 7.21 % 5.75 % 7.28 %
Recovery ratio (1.29) % (0.89) % (1.22) % (0.89) %
Net charge-off ratio 4.40 % 6.32 % 4.54 % 6.39 %
30-89 Delinquency ratio 1.76 % 1.63 % 1.76 % 1.63 %
Origination volume $ 3,835 $ 2,047 $ 6,119 $ 4,636
Number of accounts originated 389,220 194,480 614,322 471,253
Debt balances:
Long-term debt balance $ 17,605 $ 18,010 $ 17,605 $ 18,010
Average daily debt balance 16,860 19,772 16,947 18,724



	At or for the Three Months Ended March 31,
(dollars in millions, except per share amounts)	2022			2021

Interest income	$	1,089		$	1,060
Interest expense	219			235
Provision for finance receivable losses	238			(2)
Net interest income after provision for finance receivable losses	632			827

Other revenues	162			91
Other expenses	398			372
Income before income taxes	396			546
Income taxes	95			133
Net income	$	301		$	413



Share Data:



Earnings per share:

Diluted	$	2.36		$	3.06

Selected Financial Statistics (a)
Total finance receivables:
Net finance receivables	$	18,979		$	17,564
Average net receivables	$	19,083		$	17,824
Yield	23.12		%	24.08		%
Gross charge-off ratio	6.98		%	5.81		%
Recovery ratio	(1.42)		%	(1.14)		%
Net charge-off ratio	5.57		%	4.67		%
30-89 Delinquency ratio	2.26		%	1.57		%
Personal loans:

Net finance receivables	$	18,929		$	17,564
Origination volume	$	2,959		$	2,284
Number of accounts	2,288,999			2,229,609
Number of accounts originated	286,391			225,102
Credit cards (b):
Net finance receivables	$	50		$	—






Purchase volume	$	45		$	—
Number of open accounts	73,958			—
Debt balances:
Long-term debt balance	$	17,560		$	16,789
Average daily debt balance	$	17,553		$	17,035

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

(b) There were no credit cards for the three months ended March 31, 2021 as the product offering began in the third quarter of 2021.

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Comparison of Consolidated Results for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~

Interest income ~~decreased $6~~increased $29 million or ~~0.6% and $54 million or 2.5%~~3% for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 when compared to the same ~~periods~~period in ~~2020~~2021 primarily due to ~~a decrease~~growth in our ~~average net finance receivables.~~loan portfolio, partially offset by lower yield.

Interest expense decreased ~~$40~~$16 million or ~~14.8% and $62 million or 11.8%~~7% for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 when compared to the same ~~periods~~period in ~~2020~~2021 primarily due to ~~a decrease in average debt along with~~ a lower average cost of ~~funds.~~ funds, partially offset by an increase in average debt.

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 $291~~increased $240 million ~~or 68.8% and $824 million or 86.4%~~ for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 when compared to the same ~~periods~~period in ~~2020~~2021 primarily due to an improved outlook for unemployment and macroeconomic conditions, along with the decrease in our charge-offs and the increase in recoveries aligning with governmental stimulus payments, as compared todriven by a ~~build~~significant release in our allowance reserve in the ~~same periods~~prior year period and an increase in ~~2020 primarily due~~our current period charge-offs related to ~~the uncertainty~~normalization of ~~expected credit losses at the onset of the COVID-19 pandemic.~~delinquency rates to pre-pandemic levels.

Other revenues increased $2$71 million or ~~1.4%~~77% for the three months ended ~~June 30, 2021~~March 31, 2022 when compared to the same period in ~~2020~~2021 primarily due to a ~~gain~~net loss on the repurchase and repayment of debt in the prior year period and an increase in gains on the sales of finance receivables and an increase in ~~membership plan fee~~servicing revenue ~~due to~~associated with the whole loan ~~origination growth. The increase was partially offset by~~sale program as a ~~decrease~~result of more loans sold in ~~investment revenue primarily driven by lower mark-to-market net gain on equity investment securities and lower interest rates on cash.~~the current period.

Other ~~revenues decreased $48~~expenses increased $26 million or ~~16.6%~~7% for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 when compared to the same period in ~~2020~~2021 primarily due to the net loss on the redemption of the 7.75% Senior Notes due 2021, a decrease in insurance premium revenue on credit insurance products due to fewer loan originations in 2020, and a decrease in investment revenue driven by lower interest rates on cash. The decrease was partially offset by a gain on the sales of finance receivables, an increase in ~~membership plans fee revenue~~salaries and benefits due to ~~loan origination growth,~~an increase in headcount as we continue to invest in our business, and ~~investment revenue related to higher mark-to-market net gain on equity investment securities.~~

~~Other expenses~~ ~~decreased $18 million or 4.4% and $65 million or 7.8% for the three and six months ended June 30, 2021, respectively, when compared to the same periods in 2020 primarily due to a decrease~~an increase in insurance policy and benefits claims expense ~~due to~~resulting from lower than expected involuntary unemployment insurance ~~claims. The decrease was partially offset by an increase in general operating expenses due to our strategic investments~~claims in the ~~business and growth in our receivables.~~prior year period.

Income taxes totaled ~~$113 million and $247~~$95 million for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 compared to ~~$29~~$133 million ~~and $40 million for~~in the ~~three and six months ended June 30, 2020, respectively,~~same period in 2021 due to higher pre-tax income in the ~~current periods.~~

prior year period. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, the effective tax rates were ~~24.4%. For the three~~24.1% and ~~six months ended June 30, 2020, the effective tax rates were 24.7% and 24.6%~~24.4%, 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 ~~direct costs~~the expense associated with ~~COVID-19, acquisition-related transaction and integration expenses,~~the net loss resulting from repurchases and repayments of debt, ~~restructuring charges, additional net gain on sale of SpringCastle interests,~~the cash-settled stock-based awards, and ~~lower of cost or fair value adjustment on loans held for sale.~~direct costs associated with COVID-19. 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
June 30, Six Months Ended
June 30,
(dollars in millions) 2021 2020 2021 2020
Consumer and Insurance
Income before income taxes - Segment Accounting Basis $ 474 $ 128 $ 1,041 $ 179
Adjustments:
Direct costs associated with COVID-19 2 6 4 9
Acquisition-related transaction and integration expenses — 2 — 8
Net loss on repurchases and repayments of debt 1 — 39 —
Restructuring charges — 7 — 7
Adjusted pretax income (non-GAAP) $ 477 $ 143 $ 1,084 $ 203
Provision for finance receivable losses $ 130 $ 422 $ 127 $ 952
Net charge-offs (194) (282) (399) (578)
Pretax capital generation (non-GAAP) $ 413 $ 283 $ 812 $ 577
Other
Loss before income taxes - Segment Accounting Basis $ (2) $ (1) $ (4) $ (2)
Adjustments:
Additional net gain on sale of SpringCastle interests (1) — (1) —
Lower of cost or fair value adjustment * 1 — 2 —
Adjusted pretax loss (non-GAAP) $ (2) $ (1) $ (3) $ (2)

* The carrying value of our remaining real estate loans classified in finance receivables held for sale exceeded their fair value, and accordingly, we have marked the loans to fair value and recorded an impairment in other revenue during the three and six months ended June 30, 2021.



	Three Months Ended March 31,
(dollars in millions)	2022		2021

Consumer and Insurance
Income before income taxes - Segment Accounting Basis	$	396	$	567
Adjustments:
Net loss on repurchases and repayments of debt	—		38
Cash-settled stock-based awards	1		—
Direct costs associated with COVID-19	1		2



Adjusted pretax income (non-GAAP)	$	398	$	607

Provision for finance receivable losses	$	237	$	(3)
Net charge-offs	(262)		(205)
Pretax capital generation (non-GAAP)	$	373	$	399

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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 1317 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 June 30, At or for the
Six Months Ended June 30,
(dollars in millions) 2021 2020 2021 2020
Interest income $ 1,069 $ 1,074 $ 2,125 $ 2,174
Interest expense 230 266 462 515
Provision for finance receivable losses 130 422 127 952
Net interest income after provision for finance receivable losses 709 386 1,536 707
Other revenues 148 144 283 281
Other expenses 380 387 735 785
Adjusted pretax income (non-GAAP) $ 477 $ 143 $ 1,084 $ 203
Selected Financial Statistics *
Finance receivables held for investment:
Net finance receivables $ 18,168 $ 17,732 $ 18,168 $ 17,732
Number of accounts 2,270,043 2,305,877 2,270,043 2,305,877
Average net receivables $ 17,722 $ 17,921 $ 17,776 $ 18,159
Yield 24.18 % 24.09 % 24.11 % 24.08 %
Gross charge-off ratio 5.70 % 7.22 % 5.75 % 7.29 %
Recovery ratio (1.29) % (0.89) % (1.22) % (0.89) %
Net charge-off ratio 4.41 % 6.33 % 4.54 % 6.40 %
30-89 Delinquency ratio 1.76 % 1.63 % 1.76 % 1.63 %
Origination volume $ 3,835 $ 2,047 $ 6,119 $ 4,636
Number of accounts originated 389,220 194,480 614,322 471,253



	At or for the Three Months Ended March 31,
(dollars in millions)	2022			2021

Interest income	$	1,087		$	1,057
Interest expense	217			233
Provision for finance receivable losses	237			(3)
Net interest income after provision for finance receivable losses	633			827
Other revenues	158			136
Other expenses	393			356
Adjusted pretax income (non-GAAP)	$	398		$	607


Selected Financial Statistics (a)
Total finance receivables:
Net finance receivables	$	18,981		$	17,569

Average net receivables	$	19,086		$	17,830
Yield	23.11		%	24.04		%
Gross charge-off ratio	6.98		%	5.81		%
Recovery ratio	(1.42)		%	(1.14)		%
Net charge-off ratio	5.57		%	4.67		%
30-89 Delinquency ratio	2.26		%	1.57		%
Personal loans:
Net finance receivables	$	18,931		$	17,569
Origination volume	$	2,959		$	2,284
Number of accounts	2,288,999			2,229,609
Number of accounts originated	286,391			225,102
Credit cards (b):
Net finance receivables	$	50		$	—






Purchase volume	$	45		$	—
Number of open accounts	73,958			—

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

(b) There were no credit cards for the three months ended March 31, 2021 as the product offering began in the third quarter of 2021.

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Comparison of Adjusted Pretax Income for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~

Interest income ~~decreased $5~~increased $30 million or ~~0.5% and $49 million or 2.3%~~3% for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 when compared to the same ~~periods~~period in ~~2020~~2021 primarily due to ~~a decrease~~growth in our ~~average net finance receivables.~~loan portfolio, partially offset by lower yield.

Interest expense decreased ~~$36~~$16 million or ~~13.5% and$53 million or 10.3%~~7% for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 when compared to the same ~~periods~~period in ~~2020~~2021 primarily due to ~~a decrease in average debt along with~~ a lower average cost of ~~funds.~~ funds, partially offset by an increase in average debt.

Provision for finance receivable losses ~~decreased $292~~increased $240 million ~~or 69.2% and $825 million or 86.7%~~ for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 when compared to the same ~~periods~~period in ~~2020~~2021 primarily due to an improved outlook for unemployment and macroeconomic conditions, along with the decrease in our charge-offs and the increase in recoveries aligning with governmental stimulus payments, as compared todriven by a ~~build~~significant release in our allowance reserve in the ~~same periods~~prior year period and an increase in ~~2020 primarily due~~our current period charge-offs related to ~~the uncertainty~~normalization of ~~expected credit losses at the onset of the COVID-19 pandemic.~~delinquency rates to pre-pandemic levels.

Other revenues increased $4$22 million or ~~2.8% and $2 million or 0.7%~~17% for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 when compared to the same ~~periods~~period in ~~2020~~2021 primarily due to ~~a gain~~an increase in gains on the sales of finance receivables and an increase in ~~membership plan fee~~servicing revenue ~~due to~~associated with the whole loan ~~origination growth. The increase was partially offset by~~sale program as a ~~decrease~~result of more loans sold in ~~investment revenue primarily driven by lower interest rates on cash.~~the current period.

Other expenses ~~decreased $7~~increased $37 million or ~~1.8% and $50 million or 6.4%~~10% for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022 when compared to the same ~~periods~~period in ~~2020~~2021 primarily due to ~~a decrease~~an increase in salaries and benefits due to an increase in headcount as we continue to invest in our business, and an increase in insurance policy and benefits claims expense ~~due to~~resulting from lower than expected involuntary unemployment insurance ~~claims. The decrease was partially offset by an increase in general operating expenses due to our strategic investments~~claims in the ~~business and growth in our receivables.~~prior year period.

~~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 the Other components on an adjusted Segment Accounting Basis was as follows:~~

Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions) 2021 2020 2021 2020
Interest income $ 1 $ 1 $ 3 $ 3
Interest expense 1 1 2 2
Net interest income after provision for finance receivable losses — — 1 1
Other revenues 4 4 8 9
Other expenses 6 5 12 12
Adjusted pretax loss (non-GAAP) $ (2) $ (1) $ (3) $ (2)

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

June 30,
(dollars in millions) 2021 2020
Net finance receivables held for sale:
Other receivables $ 43 $ 61

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Credit Quality

FINANCE RECEIVABLES

Our net finance receivables, consisting of personal loans and credit cards, were ~~$18.2~~$19.0 billion at ~~June 30, 2021~~March 31, 2022 and ~~$18.1~~$19.2 billion at December 31, ~~2020.~~2021. 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. During the third quarter of 2021, we began offering credit cards. Credit cards are open-ended, revolving, with a fixed rate, and 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~~personal loans 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 tois managed by our centralized operations. Use of our centralized operations teams for managing late-stage delinquency allows us to apply more advanced collection technologies and tools and drives operating efficiencies in servicing. AtWe consider our personal loans to be nonperforming at 90 days contractually past due, at which point we ~~consider our finance receivables to be nonperforming. We~~ stop accruing finance charges and reverse finance charges previously ~~accrued on nonperforming loans.~~accrued.

We accrue finance charges and fees on credit cards until charge-off at approximately 180 days past due, at which point we reverse finance charges and fees previously accrued.

Table of Contents

The delinquency information for net finance receivables iswas as follows:


											Consumer and Insurance						Segment to GAAP Adjustment		GAAP Basis
(dollars in millions)	(dollars in millions)	Consumer and Insurance			Segment to GAAP Adjustment		GAAP Basis			(dollars in millions)	Personal Loans			Credit Cards

June 30, 2021
March 31, 2022										March 31, 2022
Current	Current	$	17,601		$	(4)	$	17,597		Current	$	18,086		$	47		$	(2)	$	18,131
30-59 days past due	30-59 days past due	202			(1)		201			30-59 days past due	246			2			—		248
Delinquent (60-89 days past due)		118			—		118
Performing		17,921			(5)		17,916
60-89 days past due										60-89 days past due	181			1			—		182

Nonperforming (90+ days past due)		247			—		247

90+ days past due										90+ days past due	418			—			—		418
Total net finance receivables	Total net finance receivables	$	18,168		$	(5)	$	18,163		Total net finance receivables	$	18,931		$	50		$	(2)	$	18,979

Delinquency ratio	Delinquency ratio									Delinquency ratio
30-89 days past due	30-89 days past due	1.76		%	*		1.76		%	30-89 days past due	2.25		%	5.32		%	*		2.26		%
30+ days past due	30+ days past due	3.12		%	*		3.12		%	30+ days past due	4.46		%	5.97		%	*		4.47		%
60+ days past due	60+ days past due	2.01		%	*		2.01		%	60+ days past due	3.17		%	2.47		%	*		3.17		%
90+ days past due	90+ days past due	1.36		%	*		1.36		%	90+ days past due	2.21		%	0.66		%	*		2.21		%

December 31, 2020
December 31, 2021										December 31, 2021
Current	Current	$	17,362		$	(7)	$	17,355		Current	$	18,340		$	25		$	(3)	$	18,362
30-59 days past due	30-59 days past due	251			—		251			30-59 days past due	282			—			—		282
Delinquent (60-89 days past due)		162			—		162
Performing		17,775			(7)		17,768
60-89 days past due										60-89 days past due	185			—			—		185

Nonperforming (90+ days past due)		316			—		316

90+ days past due										90+ days past due	383			—			—		383
Total net finance receivables	Total net finance receivables	$	18,091		$	(7)	$	18,084		Total net finance receivables	$	19,190		$	25		$	(3)	$	19,212

Delinquency ratio	Delinquency ratio									Delinquency ratio
30-89 days past due	30-89 days past due	2.28		%	*		2.28		%	30-89 days past due	2.43		%	0.08		%	*		2.43		%
30+ days past due	30+ days past due	4.03		%	*		4.03		%	30+ days past due	4.43		%	0.08		%	*		4.42		%
60+ days past due	60+ days past due	2.64		%	*		2.64		%	60+ days past due	2.96		%	—		%	*		2.96		%
90+ days past due	90+ days past due	1.75		%	*		1.75		%	90+ days past due	2.00		%	—		%	*		1.99		%

* 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 ~~impacts and continued recovery of COVID-19 on the U.S. economy.~~overall unemployment rate. We also considered ~~known government stimulus measures, the involuntary unemployment insurance coverage of our portfolio, and our borrower assistance efforts.~~inflationary pressures, supply chain concerns, geopolitical risks, along with persistent labor supply shortages. Our forecast leveraged economic projections from an industry leading forecast ~~provider.~~providers. At ~~June 30, 2021,~~March 31, 2022, our economic forecast used a reasonable and supportable period of 12 months. 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~~our allowance for finance receivable losses were as follows:

(dollars in millions) Consumer
and
Insurance Segment to
GAAP
Adjustment Consolidated
Total
Three Months Ended June 30, 2021
Balance at beginning of period $ 2,075 $ (13) $ 2,062
Provision for finance receivable losses 130 2 132
Charge-offs (252) — (252)
Recoveries 58 — 58
Balance at end of period $ 2,011 $ (11) $ 2,000
Three Months Ended June 30, 2020
Balance at beginning of period $ 2,202 $ (20) $ 2,182
Provision for finance receivable losses 422 1 423
Charge-offs (322) 1 (321)
Recoveries 40 — 40
Balance at end of period $ 2,342 $ (18) $ 2,324


(dollars in millions)										(dollars in millions)	Consumer and Insurance						Segment to GAAP Adjustment		Consolidated Total
											Personal Loans			Credit Cards

Six Months Ended June 30, 2021
Three Months Ended March 31, 2022										Three Months Ended March 31, 2022
Balance at beginning of period	Balance at beginning of period	$	2,283		$	(14)	$	2,269		Balance at beginning of period	$	2,097		$	5		$	(7)	$	2,095
Provision for finance receivable losses	Provision for finance receivable losses	127			3		130			Provision for finance receivable losses	232			5			1		238
Charge-offs	Charge-offs	(507)			—		(507)			Charge-offs	(329)			—			—		(329)
Recoveries	Recoveries	108			—		108			Recoveries	67			—			—		67
Balance at end of period	Balance at end of period	$	2,011		$	(11)	$	2,000		Balance at end of period	$	2,067		$	10		$	(6)	$	2,071

Allowance ratio	Allowance ratio	11.07		%	(a)		11.01		%	Allowance ratio	10.92		%	19.99		%	(a)		10.91		%

Six Months Ended June 30, 2020
Three Months Ended March 31, 2021 (b)										Three Months Ended March 31, 2021 (b)
Balance at beginning of period	Balance at beginning of period	$	849		$	(20)	$	829		Balance at beginning of period	$	2,283		$	—		$	(14)	$	2,269
Impact of adoption of ASU 2016-13 (b)		1,119			(1)		1,118
Provision for finance receivable losses	Provision for finance receivable losses	952			2		954			Provision for finance receivable losses	(3)			—			1		(2)
Charge-offs	Charge-offs	(658)			1		(657)			Charge-offs	(255)			—			—		(255)
Recoveries	Recoveries	80			—		80			Recoveries	50			—			—		50
Balance at end of period	Balance at end of period	$	2,342		$	(18)	$	2,324		Balance at end of period	$	2,075		$	—		$	(13)	$	2,062

Allowance ratio	Allowance ratio	13.21		%	(a)		13.12		%	Allowance ratio	11.81		%	—		%	(a)		11.74		%

(a) Not applicable.

(b) ~~As a result~~There were no credit cards for the three months ended March 31, 2021 as the product offering began in the third quarter of ~~the adoption of ASU 2016-13, we recorded a one-time adjustment to the allowance for finance receivable losses.~~2021.

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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~~ratio 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 for personal loans decreased from the prior year period primarily due to an improved ~~outlook for~~ unemployment and macroeconomic conditions 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.outlook. 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.

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TDR FINANCE RECEIVABLES

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

Information regarding TDR net finance receivables isfor personal loans are as follows:


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

June 30, 2021
March 31, 2022								March 31, 2022
TDR net finance receivables	TDR net finance receivables	$	708	$	(28)	$	680	TDR net finance receivables	$	674	$	(18)	$	656
Allowance for TDR finance receivable losses	Allowance for TDR finance receivable losses	318		(13)		305		Allowance for TDR finance receivable losses	271		(8)		263

December 31, 2020
December 31, 2021								December 31, 2021
TDR net finance receivables	TDR net finance receivables	$	728	$	(37)	$	691	TDR net finance receivables	$	671	$	(21)	$	650
Allowance for TDR finance receivable losses	Allowance for TDR finance receivable losses	332		(18)		314		Allowance for TDR finance receivable losses	279		(9)		270

There were no credit cards classified as TDR finance receivables at March 31, 2022 or December 31, 2021.

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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~~credit scores to manage credit quality, we ~~have presented the following on how we~~ group FICO scores into ~~said~~the following 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.

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The following table reflects our ~~personal loans~~net finance receivables grouped into the borrower 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) June 30, 2021 December 31, 2020
FICO scores *
660 or higher $ 5,301 $ 4,653
620-659 5,145 4,877
619 or below 7,717 8,554
Total $ 18,163 $ 18,084


(dollars in millions)	Personal Loans		Credit Cards		Total

March 31, 2022
FICO scores
660 or higher	$	4,440	$	9	$	4,449
620-659	5,029		15		5,044
619 or below	9,460		26		9,486
Total	$	18,929	$	50	$	18,979

December 31, 2021
FICO scores *
660 or higher	$	4,897	$	14	$	4,911
620-659	5,321		7		5,328
619 or below	8,969		4		8,973
Total	$	19,187	$	25	$	19,212

* Due to the impact of COVID-19, FICO scores as of ~~June 30, 2021 and~~ December 31, ~~2020~~2021 may have been positively impacted 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 ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, OMH generated net income of ~~$763~~$301 million. OMH’s net cash inflow from operating and investing activities totaled ~~$500~~$602 million for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. At ~~June 30, 2021,~~March 31, 2022, our scheduled ~~principal and~~ interest payments for the remainder of ~~2021~~2022 totaled $357 million, and there are no scheduled principal payments for the remainder of 2022 on our existing debt (excluding securitizations) ~~totaled $301 million.~~. As of ~~June 30, 2021,~~March 31, 2022, we had ~~$9.7~~$10.2 billion of unencumbered ~~gross finance receivables.~~loans.

Based on our estimates and 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~~Unsecured Corporate Revolver

At March 31, 2022, the borrowing capacity of our corporate revolver was $1.0 billion, and no amounts were drawn.

OMFC’s Notice of Redemption of Unsecured Debt

~~For information regarding~~On April 26, 2022, OMFC issued a notice to fully redeem its 8.875% Senior Notes due 2025 on June 1, 2022. In connection with the ~~issuance~~redemption, OMFC expects to pay a net aggregate amount of $637 million, inclusive of accrued interest and ~~notice~~premiums and recognize $26 million net loss on repurchases and repayments of ~~redemption~~debt in the second quarter of ~~OMFC's unsecured debt, see Note 6 of the Notes to the Condensed Consolidated Financial Statements included in this report.~~2022.

Securitizations and Borrowings from Revolving Conduit Facilities

During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, we ~~completed one personal loan securitization (OMFIT 2021-1, see “Securitized Borrowings” below),~~did not terminate, cancel, or enter into any new securitizations or conduit facilities. At March 31, 2022, an aggregate of $650 million was drawn under our conduit facilities, and ~~redeemed one personal loan securitization (OMFIT 2017-1).~~the remaining borrowing capacity was $5.4 billion. At ~~June 30, 2021,~~March 31, 2022, we had ~~$8.2~~$8.5 billion of gross finance receivables pledged as collateral for our ~~securitization transactions.~~securitizations and conduit facilities.

~~During the six months ended June 30, 2021, we entered into one new revolving conduit facility and terminated one revolving conduit facility.~~Social Securitization Transaction - OMFIT 2022-S1

~~At June 30, 2021, the borrowing capacity~~As part of our ~~revolving conduit facilities was $7.3 billion, and no amounts were drawn nor were any~~continued commitment to improve the financial well-being of hardworking Americans, on April 27, 2022, OMFC completed its first social securitization under Rule 144A. We issued $600 million principal amount of notes backed by personal loans ~~pledged as collateral under these facilities.~~made to the target population identified in the OneMain 2022 ABS Social Framework, OMFIT 2022-S1. OMFIT 2022-S1 has a revolving period of three years, during which no principal payments are required. See “Recent Developments and Outlook” included in this report for further information on OMFIT 2022-S1.

Private Secured Term Funding

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Credit Ratings

Our credit ratings impact our ability to access capital markets and our borrowing costs. Rating agencies base their ratings on numerous factors, including liquidity, capital adequacy, asset quality, quality of earnings, and the probability of systemic support. Significant changes in these factors could result in different ratings.

The table below outlines OMFC’s long-term corporate debt ratings and outlook by rating agencies:

As of March 31, 2022

Rating

Outlook

S&P

Stable

Moody’s

Ba2

Stable

KBRA

BB+

Positive

Currently, no other entity has a corporate debt rating, though they may be rated in the future.

Stock Repurchased

During the three months ended ~~June 30, 2021,~~March 31, 2022, OMH repurchased ~~and held in treasury 612,355~~2,282,552 shares of its common stock through its stock repurchase program for an aggregate total of ~~$35~~$110 million, including commissions and fees. As of March 31, 2022, OMH held a total of 8,981,004 shares of treasury stock. To provide funding for the OMH stock repurchase, the OMFC Board of Directors authorized dividend payments in the amount of ~~$60~~$100 million.

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 for further information on our stock repurchased.~~report.

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Cash Dividend to OMH's Common Stockholders

As of ~~June 30, 2021,~~March 31, 2022, the dividend declarations for the current year by ~~OMH's board of directors~~the Board were as follows:

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
April 26, 2021 May 6, 2021 May 13, 2021 $ 0.70 $ 94
Total $ 4.65 $ 625

* ~~Includes the minimum quarterly dividend, which was $0.45 per share as of February 8, 2021.~~


Declaration Date	Record Date	Payment Date	Dividend Per Share		Amount Paid
					(in millions)
February 2, 2022	February 14, 2022	February 18, 2022	$	0.95	$	121



Total			$	0.95	$	121

To provide funding for the dividend, OMFC paid dividends of ~~$626~~$121 million to OMH during the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022.

On ~~July 21, 2021,~~April 28, 2022, OMH declared a dividend of ~~$4.20~~$0.95 per share payable on ~~August~~May 13, ~~2021~~2022 to record holders of OMH's common stock as of the close of business on ~~August 6, 2021.~~May 9, 2022. To provide funding for the OMH dividend, the OMFC Board of Directors authorized a dividend in the amount of up to ~~$563~~$120 million payable on or after ~~August 6, 2021.~~May 10, 2022.

While OMH intends to pay its minimum quarterly dividend, currently ~~$0.70~~$0.95 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~~Board 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~~Board deems relevant. OMH's dividend payments may change from time to time, and the ~~board of directors~~Board 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.

Whole Loan Sale Transactions

As of ~~June 30, 2021,~~March 31, 2022, we have whole loan sale flow agreements with third parties, with remaining terms ~~ranging between one to~~of less than 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 along with any associated accrued ~~interest .~~interest. Our first sale was executed in the first quarter of 2021. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, we sold ~~$120~~$180 million and ~~$165~~$45 million of gross finance receivables, respectively. For further information on the whole loan sale transactions, see Note 3 of the Notes to the Condensed Consolidated Financial Statements included in this report.

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LIQUIDITY

OMH's Operating Activities

Net cash provided by operations of ~~$1.1 billion~~$552 million for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 reflected net income of ~~$763~~$301 million, the impact of non-cash items, and an unfavorable change in working capital of $6$62 million. Net cash provided by operations of ~~$1.2 billion~~$556 million for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 reflected net income of ~~$121~~$413 million, the impact of non-cash items, and ~~a favorable~~an unfavorable change in working capital of ~~$53~~$23 million.

OMH's Investing Activities

Net cash ~~used for~~provided by investing activities of ~~$630~~$50 million for the ~~six~~three months ended ~~June 30,~~March 31, 2022 was primarily due to proceeds from sales of finance receivables and calls, sales, and maturities of available-for-sale securities, partially offset by net principal originations and purchases of finance receivables and purchases of available-for-sale securities. Net cash provided by investing activities of $198 million for the three months ended March 31, 2021 was primarily due to net principal ~~originations~~collections of finance receivables, ~~and purchases of available-for-sale and other securities, partially offset by~~ calls, sales, and maturities of available-for-sale and other securities, and proceeds from sales of finance receivables. Net cash provided by investing activities of $106 million for the six months ended June 30, 2020 was primarily due to calls, sales, and maturities of investment securities, partially offset by purchases of available-for-sale and other securities.

OMH's Financing Activities

Net cash used for financing activities of ~~$929~~$448 million for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 was primarily due to debt repayments, cash dividends paid, and the cash paid ~~on the~~to repurchase common stock ~~repurchased in~~during the period, partially offset by ~~the issuances~~proceeds from borrowings of ~~OMFIT 2021-1 securitization and the Social Bond.~~long-term debt. Net cash ~~provided by~~used for financing activities of ~~$285 million~~$1.6 billion for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 was primarily due to ~~the issuances of 8.875% Senior Notes due 2025 and OMFIT 2020-1 securitization offset by~~ debt repayments and cash dividends ~~paid, and the cash paid on the common stock repurchased during the period.~~paid.

OMH's Cash and Investments

At ~~June 30, 2021,~~March 31, 2022, we had ~~$1.8 billion~~$640 million of cash and cash equivalents, which included ~~$158~~$265 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 ~~June 30, 2021,~~March 31, 2022, we had ~~$2.0~~$1.8 billion of investment securities, which are all held as part of our insurance operations and are unavailable for general corporate purposes.

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 ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021. See Note 1110 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.~~2021.

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OUR DEBT AGREEMENTS

The debt agreements to which OMFC and its subsidiaries are a party to include customary terms and conditions, including covenants and representations and warranties. See Note 98 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.

Securitized Borrowings

We execute private securitizations under Rule 144A of the Securities Act of ~~1933.~~1933, as amended. As of ~~June 30, 2021,~~March 31, 2022, our structured financings consisted of the following:


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

SLFT 2015-B		$	314	$	336	$	100	$	127	4.42	%	5 years
SLFT 2017-A		652		685		266		323		3.39	%	3 years
OMFIT 2015-3	OMFIT 2015-3	293		329		140		160		4.85	%	5 years	OMFIT 2015-3	$	293	$	329	$	59	$	84	6.30	%	5 years
OMFIT 2016-3	OMFIT 2016-3	350		397		280		353		4.40	%	5 years	OMFIT 2016-3	350		397		110		193		5.27	%	5 years
OMFIT 2018-1	OMFIT 2018-1	632		650		478		519		3.68	%	3 years	OMFIT 2018-1	632		650		233		274		4.08	%	3 years
OMFIT 2018-2	OMFIT 2018-2	368		381		350		400		3.87	%	5 years	OMFIT 2018-2	368		381		350		400		3.87	%	5 years
OMFIT 2019-1	OMFIT 2019-1	632		654		449		493		3.90	%	2 years	OMFIT 2019-1	632		654		215		260		4.35	%	2 years
OMFIT 2019-2	OMFIT 2019-2	900		947		900		995		3.30	%	7 years	OMFIT 2019-2	900		947		900		995		3.30	%	7 years
OMFIT 2019-A	OMFIT 2019-A	789		892		750		892		3.78	%	7 years	OMFIT 2019-A	789		892		750		892		3.78	%	7 years
OMFIT 2020-1	OMFIT 2020-1	821		958		821		958		4.12	%	2 years	OMFIT 2020-1	821		958		821		958		4.12	%	2 years
OMFIT 2020-2	OMFIT 2020-2	1,000		1,053		1,000		1,053		2.03	%	5 years	OMFIT 2020-2	1,000		1,053		1,000		1,053		2.03	%	5 years
OMFIT 2021-1 (c)		850		904		850		904		1.56	%	5 years
OMFIT 2021-1													OMFIT 2021-1	850		904		850		904		1.57	%	5 years

ODART 2018-1	ODART 2018-1	947		964		415		445		3.72	%	2 years	ODART 2018-1	947		964		196		217		3.98	%	2 years
ODART 2019-1	ODART 2019-1	737		750		700		750		3.79	%	5 years	ODART 2019-1	737		750		700		750		3.79	%	5 years
ODART 2021-1													ODART 2021-1	1,000		1,053		1,000		1,053		0.98	%	2 years
Total securitizations	Total securitizations	$	9,285	$	9,900	$	7,499	$	8,372				Total securitizations	$	9,319	$	9,932	$	7,184	$	8,033

(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 ~~June 30, 2021.~~March 31, 2022.

~~(c) On May 26, 2021, we issued $850 million of notes backed by personal loans. The notes mature in June of 2036.~~

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Revolving Conduit Facilities

In addition to the structured financings, we ~~have~~had access to 1314 revolving conduit facilities with a total borrowing capacity of ~~$7.3~~$6.0 billion as of ~~June 30, 2021:~~March 31, 2022:

~~(dollars in millions)~~

~~Advance Maximum Balance~~

Amount
Drawn

~~Mystic River Funding, LLC~~

~~850~~

—

~~OneMain Financial Auto Funding I, LLC~~

~~850~~

—

~~OneMain Financial Funding VII, LLC~~

~~850~~

—

~~OneMain Financial Funding IX, LLC~~

~~850~~

—

~~Seine River Funding, LLC~~

~~650~~

—

~~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~~

—

~~New River Funding Trust~~

~~250~~

—

~~St. Lawrence River Funding, LLC~~

~~250~~

—

~~Total~~

~~7,300~~

—


(dollars in millions)	Advance Maximum Balance		Amount Drawn

OneMain Financial Funding VII, LLC	$	600	$	—
OneMain Financial Funding IX, LLC	600		—
Mystic River Funding, LLC	600		—
OneMain Financial Auto Funding I, LLC	550		—
Seine River Funding, LLC	550		150
Chicago River Funding, LLC	500		—
Hudson River Funding, LLC	500		—
OneMain Financial Funding VIII, LLC	400		—
Thayer Brook Funding, LLC	350		—
Columbia River Funding, LLC	350		—
Hubbard River Funding, LLC	250		—
New River Funding Trust	250		—
River Thames Funding, LLC	250		250
St. Lawrence River Funding, LLC	250		250
Total	$	6,000	$	650

On July 15, 2021, we entered into a new revolving conduit facility with River Thames Funding, LLC and a third party lender. Under the agreement, we may borrow up to a maximum principal balance of $250 million with any amounts drawn collateralized by our personal loans.

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~~Off-Balance Sheet Arrangements~~

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 ~~June 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021.


Critical Accounting Policies and Estimates

We describe our significant accounting policies used in the preparation of our consolidated financial statements in Note 32 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 ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022.


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.

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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. ~~The seasonality 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 ~~June 30, 2021,~~March 31, 2022, 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 ~~June 30, 2021~~March 31, 2022 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 ~~second~~first quarter of ~~2021~~2022 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 ~~June 30, 2021,~~March 31, 2022, 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 ~~June 30, 2021~~March 31, 2022 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 ~~second~~first quarter of ~~2021~~2022 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.

In addition to the other information set forth in this report, you should consider the factors discussed in Part I - Item 1A. “Risk Factors” in our Annual Report, which could materially affect our business, financial condition, or future results.


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

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 ~~June 30, 2021:~~March 31, 2022, based on settlement date:

Period Total Number of
Shares Purchased Average Price
paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Dollar Value of Shares
That May Yet Be Purchased
Under the Plans or Programs*
April 1 - April 30 — $ — $ — $ 154,687,295
May 1 - May 31 385,088 54.87 385,088 133,558,152
June 1 - June 30 227,267 59.01 227,267 $ 120,146,427
Total 612,355 $ 56.41 612,355


Period	Total Number of Shares Purchased	Average Price paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)	Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (a)
January 1 - January 31	477,106	$	52.07	477,106	$	60,729,860
February 1 - February 28	475,567	52.13		475,567	978,925,463
March 1 - March 31	1,329,879	45.57		1,329,879	918,327,499
Total	2,282,552	$	48.30	2,282,552

* OMH(a) The Board ~~of Directors~~ approved a $200 million stock repurchase program, excluding commission and fees, with no stated expiration during the first quarter of 2020. On December 13, 2021, the Board increased the share repurchase authorization to $300 million. On February 2, 2022, the Board authorized a new $1 billion stock repurchase program, excluding fees, commissions, and other expenses related to the repurchases. The authorization expires on December 31, 2024. The new program replaces the previous share repurchase program. 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~~						Underwriting Agreement, dated April 29, 2021, among OneMain Holdings, Inc., OMH (ML), L.P. and V-OMH (ML) II, L.P., as selling stockholders, and Barclays Capital Inc. and Citigroup Global Markets Inc., as representatives of the several underwriters named therein ~~, incorporated by reference to Exhibit 1.1 to OMH’s Current Report on Form 8-K filed on~~ ~~May 4, 2021.~~

~~1.2~~						Underwriting Agreement, dated as of June 15, 2021, among OneMain Finance Corporation, OneMain Holdings, Inc., and BNP Paribas Securities Corp., Citigroup Global Markets Inc. and Mizuho Securities USA LLC, as representatives of the several underwriters named therein, incorporated by reference to Exhibit 1.1 to OMH’s Current Report on Form 8-K filed on June 17, 2021.

~~4.1~~						Twelfth Supplemental Indenture relating to the Notes, dated as of June 22, 2021, among OneMain Finance Corporation, OneMain Holdings, Inc. and Wilmington Trust, National Association, as trustee (including the form of 3.500% Senior Notes due 2027 included therein as Exhibit A). Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K on June 22, 2021.













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

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

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

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

32.1						Section 1350 Certifications of OneMain Holdings, Inc.

32.2						Section 1350 Certifications of OneMain Finance Corporation

101						Interactive data files pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Shareholder’s Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.

104						Cover Page Interactive Data File in Inline XBRL format (Included in Exhibit 101).

* 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:

~~July 23, 2021~~April 29, 2022

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:

~~July 23, 2021~~April 29, 2022

By:

/s/ Micah R. Conrad

Micah R. Conrad

Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)

6361




At or for the Six Months Ended June 30, 2020
Interest income	$	2,174	$	3	$	7	$	2,184
Interest expense	515		2		10		527
Provision for finance receivable losses	952		0		2		954
Net interest income after provision for finance receivable losses	707		1		(5)		703
Other revenues	281		9		(1)		289
Other expenses	809		12		10		831
Income (loss) before income tax expense (benefit)	$	179	$	(2)	$	(16)	$	161

Assets	$	20,389	$	70	$	2,049	$	22,508


Topic						Page

Forward-Looking Statements						3837
Overview						4038
Recent Developments and Outlook						4139
Results of Operations						4341
Segment Results						4644
Credit Quality						4846
Liquidity and Capital Resources						5351
~~Off-Balance Sheet Arrangements~~						58
Critical Accounting Policies and Estimates						5855
Recent Accounting Pronouncements						5855
Seasonality						5856



	June 30,
(dollars in millions)	2021		2020






Net finance receivables held for sale:
Other receivables	$	43	$	61