UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

OF 1934

For the quarterly period ended March 31, ~~2022~~2023

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

ACT OF 1934

For the transition period from to

Commission file number

001-36129 (OneMain Holdings, Inc.)

001-06155 (OneMain Finance Corporation)

ONEMAIN HOLDINGS, INC.

ONEMAIN FINANCE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (OneMain Holdings, Inc.)

27-3379612

Indiana (OneMain Finance Corporation)

35-0416090

(State of incorporation)

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

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

(Address of principal executive offices) (Zip code)

(812) 424-8031

(Registrant’s telephone number, including area code)

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

OneMain Holdings, Inc.:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

OMF

New York Stock Exchange

OneMain Finance Corporation: None

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

OneMain Holdings, Inc. Yes ☑ No ☐

OneMain Finance Corporation Yes ☑ No ☐

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

OneMain Holdings, Inc. Yes ☑ No ☐

OneMain Finance Corporation Yes ☑ No ☐

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

OneMain Holdings, Inc.:

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

OneMain Finance Corporation:

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☑

Smaller reporting company

☐

Emerging growth company

☐

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

OneMain Holdings, Inc. ☐

OneMain Finance Corporation ☐

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

OneMain Holdings, Inc. Yes ☐ No ☑

OneMain Finance Corporation Yes ☐ No ☑

At April ~~21, 2022,~~19, 2023, there were ~~125,211,094~~120,587,214 shares of OneMain Holdings, Inc’s common stock, $0.01 par value, outstanding.

At April ~~21, 2022,~~19, 2023, 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	10
	Financial Statements of OneMain Finance Corporation and Subsidiaries (Unaudited):
	Condensed Consolidated Balance Sheets	11
	Condensed Consolidated Statements of Operations	12
	Condensed Consolidated Statements of Comprehensive Income	13
	Condensed Consolidated Statements of Shareholder’s Equity	14
	Condensed Consolidated Statements of Cash Flows	15
	Notes to the Condensed Consolidated Financial Statements	16
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3643
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5659
Item 4.	Controls and Procedures	5760
	Controls and Procedures of OneMain Holdings, Inc.	5760
	Controls and Procedures of OneMain Finance Corporation	5760

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	5861
Item 1A.	Risk Factors	5861
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5861
Item 3.	Defaults Upon Senior Securities	5861
Item 4.	Mine Safety Disclosures	5861
Item 5.	Other Information	5861
Item 6.	Exhibit Index	5962

SIGNATURES
	OneMain Holdings, Inc. Signature	6063
	OneMain Finance Corporation Signature	6164

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, ~~2021,~~2022, filed with the SEC on February ~~11, 2022~~10, 2023





ASC						Accounting Standards Codification
ASU						Accounting Standards Update
ASU 2018-12						The accounting standard issued by FASB in August of 2018, Financial Services-Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts
ASU 2022-02						The accounting standard issued by FASB in March of 2022, Financial Instruments - Credit Losses: Troubled Debt Restructurings and Vintage Disclosures
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~~for each ~~month divided by two)~~day in the period

Base Indenture						indenture, dated as of December 3, 2014, by and between OMFC and Wilmington Trust, National Association, as trustee, and guaranteed by OMH
Board						the OMH Board of Directors


C&I						Consumer and Insurance
CDO						collateralized debt obligations


CFPB						Consumer Financial Protection Bureau

CMBS						commercial mortgage-backed securities




~~COVID-19~~Corporate AMT						Corporate Alternative Minimum Tax, as implemented by the ~~global outbreak of a novel strain of coronavirus, including variants thereof~~





						Inflation Reduction Act

Exchange Act						Securities Exchange Act of 1934, as amended
FASB						Financial Accounting Standards Board


~~FICO~~						~~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 personal loans, unpaid principal balance is the gross contractual payments less the unaccreted balance of unearned finance ~~charges~~

						charges. Credit card gross finance receivables equal the principal balance and billed interest and fees
Indenture						the Base Indenture, together with all subsequent Supplemental Indentures
IRA


						Inflation Reduction Act, signed into law on August 16, 2022
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 C&I net finance receivables and finance receivables serviced for our whole loan sale partners
Modified finance receivables						finance receivable contractually modified, subsequent to the adoption of ASU 2022-02 on January 1, 2023, as a result of the borrower’s financial difficulties
Moody’s


						Moody’s Investors Service, Inc.
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~~
~~OMFIT~~						~~OneMain Financial Issuance Trust~~
~~OMH~~						~~OneMain Holdings, Inc.~~

Table of Contents


Term or Abbreviation						Definition

OMFC						OneMain Finance Corporation
OMFH						OneMain Financial Holdings, LLC
OMFIT						OneMain Financial Issuance Trust
OMH						OneMain Holdings, Inc.
OneMain						OneMain Holdings, Inc. and OneMain Finance Corporation, collectively with their subsidiaries

Open accounts						consist of ~~open~~ credit card accounts that are not charged-off or closed accounts with a zero balance 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 C&I adjusted pretax income (loss) excluding the change in C&I allowance for finance receivable losses
Private Secured Term Funding						$350 million aggregate principal amount of debt collateralized by our personal loans issued on April 25, 2022
Purchase volume						~~consist~~consists 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
Revenue yield
						annualized credit card finance charges, net of merchant and ancillary servicing fees, as a percentage of average net credit card 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

























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: ~~Fourth Supplemental Indenture, dated as of December 8, 2017;~~ Fifth Supplemental Indenture, dated as of March 12, 2018; Sixth Supplemental Indenture, dated as of May 11, 2018; Seventh Supplemental Indenture, dated as of February 22, 2019; Eighth Supplemental Indenture, dated as of May 9, 2019; Ninth Supplemental Indenture, dated as of November 7, 2019; ~~Tenth Supplemental Indenture, dated as of May 14, 2020;~~ Eleventh Supplemental Indenture, dated as of December 17, 2020; Twelfth Supplemental Indenture, dated as of June 22, 2021; and 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, prior to the adoption of ASU 2022-02 on January 1, 2023, in which a concession iswas 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



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

Unencumbered loans						unencumbered gross finance receivables excluding credit cards
Unsecured corporate revolver						unsecured revolver with a maximum borrowing capacity of ~~$1.0~~$1.25 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)	(dollars in millions, except par value amount)	March 31, 2022		December 31, 2021		(dollars in millions, except par value amount)	March 31, 2023		December 31, 2022

Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	640	$	541	Cash and cash equivalents	$	544	$	498
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
Investment securities (includes available-for-sale securities with a fair value of $1.7 billion and an amortized cost basis of $1.9 billion in 2023 and 2022)						Investment securities (includes available-for-sale securities with a fair value of $1.7 billion and an amortized cost basis of $1.9 billion in 2023 and 2022)	1,786		1,800
Net finance receivables (includes loans of consolidated VIEs of $11.1 billion in 2023 and $10.4 billion in 2022)						Net finance receivables (includes loans of consolidated VIEs of $11.1 billion in 2023 and $10.4 billion in 2022)	19,809		19,986
Unearned insurance premium and claim reserves	Unearned insurance premium and claim reserves	(741)		(761)		Unearned insurance premium and claim reserves	(740)		(749)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $896 million in 2022 and $910 million in 2021)		(2,071)		(2,095)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $1.2 billion in 2023 and $1.1 billion in 2022)						Allowance for finance receivable losses (includes allowance of consolidated VIEs of $1.2 billion in 2023 and $1.1 billion in 2022)	(2,298)		(2,311)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	16,167		16,356		Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	16,771		16,926

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
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $513 million in 2023 and $442 million in 2022)						Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $513 million in 2023 and $442 million in 2022)	531		461
Goodwill	Goodwill	1,437		1,437		Goodwill	1,437		1,437
Other intangible assets	Other intangible assets	274		274		Other intangible assets	261		261

Other assets	Other assets	981		1,003		Other assets	1,113		1,154
Total assets	Total assets	$	21,808	$	22,079	Total assets	$	22,443	$	22,537

Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity					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
Long-term debt (includes debt of consolidated VIEs of $10.1 billion in 2023 and $9.4 billion in 2022)						Long-term debt (includes debt of consolidated VIEs of $10.1 billion in 2023 and $9.4 billion in 2022)	$	18,206	$	18,281
Insurance claims and policyholder liabilities	Insurance claims and policyholder liabilities	621		621		Insurance claims and policyholder liabilities	615		620
Deferred and accrued taxes	Deferred and accrued taxes	45		1		Deferred and accrued taxes	22		5
Other liabilities (includes other liabilities of consolidated VIEs of $12 million in 2022 and $13 million in 2021)		493		614
Other liabilities (includes other liabilities of consolidated VIEs of $20 million in 2023 and $20 million in 2022)						Other liabilities (includes other liabilities of consolidated VIEs of $20 million in 2023 and $20 million in 2022)	519		616
Total liabilities	Total liabilities	18,719		18,986		Total liabilities	19,362		19,522
Contingencies (Note 12)	Contingencies (Note 12)	0		0		Contingencies (Note 12)

Shareholders’ equity:	Shareholders’ equity:					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
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized, 120,587,214 and 121,042,125 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively						Common stock, par value $0.01 per share; 2,000,000,000 shares authorized, 120,587,214 and 121,042,125 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	1		1
Additional paid-in capital	Additional paid-in capital	1,672		1,672		Additional paid-in capital	1,693		1,689
Accumulated other comprehensive income (loss)		(11)		61
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(108)		(127)
Retained earnings	Retained earnings	1,905		1,727		Retained earnings	2,188		2,119
Treasury stock, at cost; 8,981,004 and 6,712,923 shares at March 31, 2022 and December 31, 2021, respectively		(478)		(368)
Treasury stock, at cost; 14,475,790 and 13,813,476 shares at March 31, 2023 and December 31, 2022, respectively						Treasury stock, at cost; 14,475,790 and 13,813,476 shares at March 31, 2023 and December 31, 2022, respectively	(693)		(667)
Total shareholders’ equity	Total shareholders’ equity	3,089		3,093		Total shareholders’ equity	3,081		3,015
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	21,808	$	22,079	Total liabilities and shareholders’ equity	$	22,443	$	22,537

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

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)


		Three Months Ended March 31,				Three Months Ended March 31,
(dollars in millions, except per share amounts)	(dollars in millions, except per share amounts)	2022		2021			(dollars in millions, except per share amounts)	2023		2022

Interest income	Interest income	$	1,089	$	1,060		Interest income	$	1,094	$	1,089

Interest expense	Interest expense	219		235			Interest expense	239		219

Net interest income	Net interest income	870		825			Net interest income	855		870

Provision for finance receivable losses	Provision for finance receivable losses	238		(2)			Provision for finance receivable losses	385		238

Net interest income after provision for finance receivable losses	Net interest income after provision for finance receivable losses	632		827			Net interest income after provision for finance receivable losses	470		632

Other revenues:	Other revenues:						Other revenues:
Insurance	Insurance	111		107			Insurance	111		111
Investment	Investment	15		17			Investment	25		15
Gain on sales of finance receivables	Gain on sales of finance receivables	17		4			Gain on sales of finance receivables	17		17
Net loss on repurchases and repayments of debt		—		(47)

Other	Other	19		10			Other	24		19
Total other revenues	Total other revenues	162		91			Total other revenues	177		162

Other expenses:	Other expenses:						Other expenses:
Salaries and benefits	Salaries and benefits	205		189			Salaries and benefits	212		205
Other operating expenses	Other operating expenses	148		150			Other operating expenses	153		148
Insurance policy benefits and claims	Insurance policy benefits and claims	45		33			Insurance policy benefits and claims	47		42
Total other expenses	Total other expenses	398		372			Total other expenses	412		395

Income before income taxes	Income before income taxes	396		546			Income before income taxes	235		399

Income taxes	Income taxes	95		133			Income taxes	56		96

Net income	Net income	$	301	$	413		Net income	$	179	$	303

Share Data:	Share Data:						Share Data:
Weighted average number of shares outstanding:	Weighted average number of shares outstanding:						Weighted average number of shares outstanding:
Basic	Basic	127,075,714		134,405,368			Basic	120,765,661		127,075,714
Diluted	Diluted	127,463,027		134,807,165			Diluted	120,969,891		127,463,027
Earnings per share:	Earnings per share:						Earnings per share:
Basic	Basic	$	2.37	$	3.07		Basic	$	1.48	$	2.38
Diluted	Diluted	$	2.36	$	3.06		Diluted	$	1.48	$	2.38

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

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)


		Three Months Ended March 31,				Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2022		2021			(dollars in millions)	2023		2022

Net income	Net income	$	301	$	413		Net income	$	179	$	303

Other comprehensive loss:
Net change in unrealized losses on non-credit impaired available-for-sale securities		(105)		(43)
Other comprehensive income (loss):							Other comprehensive income (loss):
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities							Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities	24		(105)

Foreign currency translation adjustments	Foreign currency translation adjustments	2		2			Foreign currency translation adjustments	—		2
Changes in discount rate for insurance claims and policyholder liabilities							Changes in discount rate for insurance claims and policyholder liabilities	4		32
Other	Other	13		23			Other	(3)		13
Income tax effect:	Income tax effect:						Income tax effect:
Net change in unrealized losses on non-credit impaired available-for-sale securities		24		10
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities							Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities	(5)		24

Foreign currency translation adjustments	Foreign currency translation adjustments	(1)		—			Foreign currency translation adjustments	—		(1)
Changes in discount rate for insurance claims and policyholder liabilities							Changes in discount rate for insurance claims and policyholder liabilities	(1)		(7)
Other	Other	(3)		(6)			Other	—		(3)
Other comprehensive loss, net of tax, before reclassification adjustments		(70)		(14)
Other comprehensive income (loss), net of tax, before reclassification adjustments							Other comprehensive income (loss), net of tax, before reclassification adjustments	19		(45)
Reclassification adjustments included in net income, net of tax:	Reclassification adjustments included in net income, net of tax:						Reclassification adjustments included in net income, net of tax:
Net realized losses on available-for-sale securities, net of tax	Net realized losses on available-for-sale securities, net of tax	(2)		—			Net realized losses on available-for-sale securities, net of tax	—		(2)

Reclassification adjustments included in net income, net of tax	Reclassification adjustments included in net income, net of tax	(2)		—			Reclassification adjustments included in net income, net of tax	—		(2)
Other comprehensive loss, net of tax		(72)		(14)
Other comprehensive income (loss), net of tax							Other comprehensive income (loss), net of tax	19		(47)

Comprehensive income	Comprehensive income	$	229	$	399		Comprehensive income	$	198	$	256

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													OneMain Holdings, Inc. Shareholders’ Equity
(dollars in millions)	(dollars in millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total 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 March 31, 2023														Three Months Ended March 31, 2023
Balance, January 1, 2023														Balance, January 1, 2023	$	1	$	1,689	$	(127)	$	2,119	$	(667)	$	3,015
Net impact of adoption of ASU 2022-02 (see Note 2)														Net impact of adoption of ASU 2022-02 (see Note 2)	—		—		—		12		—		12
Balance, January 1, 2023 (post-adoption)														Balance, January 1, 2023 (post-adoption)	1		1,689		(127)		2,131		(667)		3,027
Common stock repurchased														Common stock repurchased	—		—		—		—		(27)		(27)
Treasury stock issued														Treasury stock issued	—		—		—		—		1		1
Share-based compensation expense, net of forfeitures														Share-based compensation expense, net of forfeitures	—		12		—		—		—		12
Withholding tax on share-based compensation														Withholding tax on share-based compensation	—		(8)		—		—		—		(8)
Other comprehensive income														Other comprehensive income	—		—		19		—		—		19
Cash dividends *														Cash dividends *	—		—		—		(122)		—		(122)
Net income														Net income	—		—		—		179		—		179
Balance, March 31, 2023														Balance, March 31, 2023	$	1	$	1,693	$	(108)	$	2,188	$	(693)	$	3,081

Three Months Ended March 31, 2022														Three Months Ended March 31, 2022
Balance, January 1, 2022	Balance, January 1, 2022	$	1	$	1,672	$	61	$	1,727	$	(368)	$	3,093	Balance, January 1, 2022	$	1	$	1,672	$	5	$	1,727	$	(368)	$	3,037
Common stock repurchased	Common stock repurchased	—		—		—		—		(110)		(110)		Common stock repurchased	—		—		—		—		(110)		(110)

Share-based compensation expense, net of forfeitures	Share-based compensation expense, net of forfeitures	—		12		—		—		—		12		Share-based compensation expense, net of forfeitures	—		12		—		—		—		12
Withholding tax on share-based compensation	Withholding tax on share-based compensation	—		(12)		—		—		—		(12)		Withholding tax on share-based compensation	—		(12)		—		—		—		(12)
Other comprehensive loss	Other comprehensive loss	—		—		(72)		—		—		(72)		Other comprehensive loss	—		—		(47)		—		—		(47)
Cash dividends *	Cash dividends *	—		—		—		(123)		—		(123)		Cash dividends *	—		—		—		(123)		—		(123)
Net income	Net income	—		—		—		301		—		301		Net income	—		—		—		303		—		303
Balance, March 31, 2022	Balance, March 31, 2022	$	1	$	1,672	$	(11)	$	1,905	$	(478)	$	3,089	Balance, March 31, 2022	$	1	$	1,672	$	(42)	$	1,907	$	(478)	$	3,060


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.
* Cash dividends declared were $1.00 per share and $0.95 per share during the three months ended March 31, 2023 and 2022, respectively.														* Cash dividends declared were $1.00 per share and $0.95 per share during the three months ended March 31, 2023 and 2022, respectively.

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

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)


		Three Months Ended March 31,					Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2022		2021		(dollars in millions)	2023		2022

Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income	Net income	$	301	$	413	Net income	$	179	$	303
Reconciling adjustments:	Reconciling adjustments:					Reconciling adjustments:
Provision for finance receivable losses	Provision for finance receivable losses	238		(2)		Provision for finance receivable losses	385		238
Depreciation and amortization	Depreciation and amortization	61		61		Depreciation and amortization	61		61
Deferred income tax charge	Deferred income tax charge	21		59		Deferred income tax charge	9		22
Net loss on repurchases and repayments of debt		—		47

Share-based compensation expense, net of forfeitures	Share-based compensation expense, net of forfeitures	12		7		Share-based compensation expense, net of forfeitures	12		12
Gain on sales of finance receivables	Gain on sales of finance receivables	(17)		(4)		Gain on sales of finance receivables	(17)		(17)
Other	Other	(2)		(2)		Other	(1)		(2)
Cash flows due to changes in other assets and other liabilities	Cash flows due to changes in other assets and other liabilities	(62)		(23)		Cash flows due to changes in other assets and other liabilities	(66)		(65)
Net cash provided by operating activities	Net cash provided by operating activities	552		556		Net cash provided by operating activities	562		552

Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Net principal collections (originations and purchases) of finance receivables		(245)		217
Net principal originations and purchases of finance receivables						Net principal originations and purchases of finance receivables	(432)		(245)

Proceeds from sales of finance receivables	Proceeds from sales of finance receivables	200		50		Proceeds from sales of finance receivables	200		200
Available-for-sale securities purchased	Available-for-sale securities purchased	(90)		(146)		Available-for-sale securities purchased	(44)		(90)
Available-for-sale securities called, sold, and matured	Available-for-sale securities called, sold, and matured	196		91		Available-for-sale securities called, sold, and matured	88		196
Other securities purchased	Other securities purchased	(2)		(688)		Other securities purchased	(2)		(2)
Other securities called, sold, and matured	Other securities called, sold, and matured	7		681		Other securities called, sold, and matured	2		7
Other, net	Other, net	(16)		(7)		Other, net	(16)		(16)
Net cash provided by investing activities		50		198
Net cash provided by (used for) investing activities						Net cash provided by (used for) investing activities	(204)		50

Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Proceeds from issuance and borrowings of long-term debt, net of issuance costs	Proceeds from issuance and borrowings of long-term debt, net of issuance costs	198		(1)		Proceeds from issuance and borrowings of long-term debt, net of issuance costs	843		198
Repayment of long-term debt		(398)		(1,065)
Repayments and repurchases of long-term debt						Repayments and repurchases of long-term debt	(928)		(398)
Cash dividends	Cash dividends	(126)		(534)		Cash dividends	(123)		(126)
Common stock repurchased	Common stock repurchased	(110)		—		Common stock repurchased	(27)		(110)
Treasury stock issued						Treasury stock issued	1		—
Withholding tax on share-based compensation	Withholding tax on share-based compensation	(12)		(5)		Withholding tax on share-based compensation	(8)		(12)
Net cash used for financing activities	Net cash used for financing activities	(448)		(1,605)		Net cash used for financing activities	(242)		(448)

Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	154		(851)		Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	116		154
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	1,017		2,723		Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	959		1,017
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	1,171	$	1,872	Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	1,075	$	1,171

Supplemental cash flow information	Supplemental cash flow information					Supplemental cash flow information
Cash and cash equivalents	Cash and cash equivalents	$	640	$	1,301	Cash and cash equivalents	$	544	$	640
Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	531		571		Restricted cash and restricted cash equivalents	531		531
Total cash and cash equivalents and restricted cash and restricted cash equivalents	Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	1,171	$	1,872	Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	1,075	$	1,171

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

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

Table of Contents

ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)


(dollars in millions, except par value amount)	(dollars in millions, except par value amount)	March 31, 2022		December 31, 2021		(dollars in millions, except par value amount)	March 31, 2023		December 31, 2022

Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	620	$	510	Cash and cash equivalents	$	533	$	490
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
Investment securities (includes available-for-sale securities with a fair value of $1.7 billion and an amortized cost basis of $1.9 billion in 2023 and 2022)						Investment securities (includes available-for-sale securities with a fair value of $1.7 billion and an amortized cost basis of $1.9 billion in 2023 and 2022)	1,786		1,800
Net finance receivables (includes loans of consolidated VIEs of $11.1 billion in 2023 and $10.4 billion in 2022)						Net finance receivables (includes loans of consolidated VIEs of $11.1 billion in 2023 and $10.4 billion in 2022)	19,809		19,986
Unearned insurance premium and claim reserves	Unearned insurance premium and claim reserves	(741)		(761)		Unearned insurance premium and claim reserves	(740)		(749)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $896 million in 2022 and $910 million in 2021)		(2,071)		(2,095)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $1.2 billion in 2023 and $1.1 billion in 2022)						Allowance for finance receivable losses (includes allowance of consolidated VIEs of $1.2 billion in 2023 and $1.1 billion in 2022)	(2,298)		(2,311)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	16,167		16,356		Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	16,771		16,926

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
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $513 million in 2023 and $442 million in 2022)						Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $513 million in 2023 and $442 million in 2022)	531		461
Goodwill	Goodwill	1,437		1,437		Goodwill	1,437		1,437
Other intangible assets	Other intangible assets	274		274		Other intangible assets	261		261

Other assets	Other assets	980		1,001		Other assets	1,113		1,152
Total assets	Total assets	$	21,787	$	22,046	Total assets	$	22,432	$	22,527

Liabilities and Shareholder’s Equity	Liabilities and Shareholder’s Equity					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
Long-term debt (includes debt of consolidated VIEs of $10.1 billion in 2023 and $9.4 billion in 2022)						Long-term debt (includes debt of consolidated VIEs of $10.1 billion in 2023 and $9.4 billion in 2022)	$	18,206	$	18,281
Insurance claims and policyholder liabilities	Insurance claims and policyholder liabilities	621		621		Insurance claims and policyholder liabilities	615		620
Deferred and accrued taxes	Deferred and accrued taxes	47		1		Deferred and accrued taxes	23		5
Other liabilities (includes other liabilities of consolidated VIEs of $12 million in 2022 and $13 million in 2021)		493		614
Other liabilities (includes other liabilities of consolidated VIEs of $20 million in 2023 and $20 million in 2022)						Other liabilities (includes other liabilities of consolidated VIEs of $20 million in 2023 and $20 million in 2022)	520		617
Total liabilities	Total liabilities	18,721		18,986		Total liabilities	19,364		19,523
Contingencies (Note 12)	Contingencies (Note 12)	0		0		Contingencies (Note 12)

Shareholder’s equity:	Shareholder’s equity:					Shareholder’s equity:
Common stock, par value $0.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued and outstanding at March 31, 2022 and December 31, 2021		5		5
Common stock, par value $0.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued and outstanding at March 31, 2023 and December 31, 2022						Common stock, par value $0.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued and outstanding at March 31, 2023 and December 31, 2022	5		5
Additional paid-in capital	Additional paid-in capital	1,916		1,916		Additional paid-in capital	1,937		1,933
Accumulated other comprehensive income (loss)		(11)		61
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(108)		(127)
Retained earnings	Retained earnings	1,156		1,078		Retained earnings	1,234		1,193

Total shareholder’s equity	Total shareholder’s equity	3,066		3,060		Total shareholder’s equity	3,068		3,004
Total liabilities and shareholder’s equity	Total liabilities and shareholder’s equity	$	21,787	$	22,046	Total liabilities and shareholder’s equity	$	22,432	$	22,527

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,
							Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2022		2021		(dollars in millions)	2023		2022

Interest income	Interest income	$	1,089	$	1,060	Interest income	$	1,094	$	1,089

Interest expense	Interest expense	219		235		Interest expense	239		219

Net interest income	Net interest income	870		825		Net interest income	855		870

Provision for finance receivable losses	Provision for finance receivable losses	238		(2)		Provision for finance receivable losses	385		238

Net interest income after provision for finance receivable losses	Net interest income after provision for finance receivable losses	632		827		Net interest income after provision for finance receivable losses	470		632

Other revenues:	Other revenues:					Other revenues:
Insurance	Insurance	111		107		Insurance	111		111
Investment	Investment	15		17		Investment	25		15

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

Other	Other	19		10		Other	24		19
Total other revenues	Total other revenues	162		91		Total other revenues	177		162

Other expenses:	Other expenses:					Other expenses:
Salaries and benefits	Salaries and benefits	205		189		Salaries and benefits	212		205
Other operating expenses	Other operating expenses	148		150		Other operating expenses	153		148
Insurance policy benefits and claims	Insurance policy benefits and claims	45		33		Insurance policy benefits and claims	47		42
Total other expenses	Total other expenses	398		372		Total other expenses	412		395

Income before income taxes	Income before income taxes	396		546		Income before income taxes	235		399

Income taxes	Income taxes	95		133		Income taxes	56		96

Net income	Net income	$	301	$	413	Net income	$	179	$	303

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 March 31,				Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2022		2021			(dollars in millions)	2023		2022

Net income	Net income	$	301	$	413		Net income	$	179	$	303

Other comprehensive loss:
Net change in unrealized losses on non-credit impaired available-for-sale securities		(105)		(43)
Other comprehensive income (loss):							Other comprehensive income (loss):
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities							Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities	24		(105)

Foreign currency translation adjustments	Foreign currency translation adjustments	2		2			Foreign currency translation adjustments	—		2

Changes in discount rate for insurance claims and policyholder liabilities							Changes in discount rate for insurance claims and policyholder liabilities	4		32
Other	Other	13		23			Other	(3)		13
Income tax effect:	Income tax effect:						Income tax effect:
Net change in unrealized losses on non-credit impaired available-for-sale securities		24		10
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities							Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities	(5)		24

Foreign currency translation adjustments	Foreign currency translation adjustments	(1)		—			Foreign currency translation adjustments	—		(1)
Changes in discount rate for insurance claims and policyholder liabilities							Changes in discount rate for insurance claims and policyholder liabilities	(1)		(7)
Other	Other	(3)		(6)			Other	—		(3)
Other comprehensive loss, net of tax, before reclassification adjustments		(70)		(14)
Other comprehensive income (loss), net of tax, before reclassification adjustments							Other comprehensive income (loss), net of tax, before reclassification adjustments	19		(45)
Reclassification adjustments included in net income, net of tax:	Reclassification adjustments included in net income, net of tax:						Reclassification adjustments included in net income, net of tax:
Net realized losses on available-for-sale securities, net of tax	Net realized losses on available-for-sale securities, net of tax	(2)		—			Net realized losses on available-for-sale securities, net of tax	—		(2)
Reclassification adjustments included in net income, net of tax	Reclassification adjustments included in net income, net of tax	(2)		—			Reclassification adjustments included in net income, net of tax	—		(2)
Other comprehensive loss, net of tax		(72)		(14)
Other comprehensive income (loss), net of tax							Other comprehensive income (loss), net of tax	19		(47)

Comprehensive income	Comprehensive income	$	229	$	399		Comprehensive income	$	198	$	256

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										OneMain Finance Corporation Shareholder's Equity
(dollars in millions)	(dollars in millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total 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 March 31, 2023													Three Months Ended March 31, 2023
Balance, January 1, 2023													Balance, January 1, 2023	$	5	$	1,933	$	(127)	$	1,193	$	3,004
Net impact of adoption of ASU 2022-02 (see Note 2)													Net impact of adoption of ASU 2022-02 (see Note 2)	—		—		—		12		12
Balance, January 1, 2023 (post-adoption)													Balance, January 1, 2023 (post-adoption)	5		1,933		(127)		1,205		3,016

Share-based compensation expense, net of forfeitures													Share-based compensation expense, net of forfeitures	—		12		—		—		12
Withholding tax on share-based compensation													Withholding tax on share-based compensation	—		(8)		—		—		(8)
Other comprehensive income													Other comprehensive income	—		—		19		—		19
Cash dividends													Cash dividends	—		—		—		(150)		(150)
Net income													Net income	—		—		—		179		179
Balance, March 31, 2023													Balance, March 31, 2023	$	5	$	1,937	$	(108)	$	1,234	$	3,068

Three Months Ended March 31, 2022													Three Months Ended March 31, 2022
Balance, January 1, 2022	Balance, January 1, 2022	$	5	$	1,916	$	61	$	1,078	$	3,060		Balance, January 1, 2022	$	5	$	1,916	$	5	$	1,078	$	3,004

Share-based compensation expense, net of forfeitures	Share-based compensation expense, net of forfeitures	—		12		—		—		12			Share-based compensation expense, net of forfeitures	—		12		—		—		12
Withholding tax on share-based compensation	Withholding tax on share-based compensation	—		(12)		—		—		(12)			Withholding tax on share-based compensation	—		(12)		—		—		(12)
Other comprehensive loss	Other comprehensive loss	—		—		(72)		—		(72)			Other comprehensive loss	—		—		(47)		—		(47)
Cash dividends	Cash dividends	—		—		—		(223)		(223)			Cash dividends	—		—		—		(223)		(223)
Net income	Net income	—		—		—		301		301			Net income	—		—		—		303		303
Balance, March 31, 2022	Balance, March 31, 2022	$	5	$	1,916	$	(11)	$	1,156	$	3,066		Balance, March 31, 2022	$	5	$	1,916	$	(42)	$	1,158	$	3,037

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).

Table of Contents

ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)


		Three Months Ended March 31,
							Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2022		2021		(dollars in millions)	2023		2022

Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income	Net income	$	301	$	413	Net income	$	179	$	303
Reconciling adjustments:	Reconciling adjustments:					Reconciling adjustments:
Provision for finance receivable losses	Provision for finance receivable losses	238		(2)		Provision for finance receivable losses	385		238
Depreciation and amortization	Depreciation and amortization	61		61		Depreciation and amortization	61		61
Deferred income tax charge	Deferred income tax charge	21		59		Deferred income tax charge	9		22
Net loss on repurchases and repayments of debt		—		47

Share-based compensation expense, net of forfeitures	Share-based compensation expense, net of forfeitures	12		7		Share-based compensation expense, net of forfeitures	12		12
Gain on sales of finance receivables	Gain on sales of finance receivables	(17)		(4)		Gain on sales of finance receivables	(17)		(17)
Other	Other	(2)		(2)		Other	(1)		(2)
Cash flows due to changes in other assets and other liabilities	Cash flows due to changes in other assets and other liabilities	(61)		(23)		Cash flows due to changes in other assets and other liabilities	(66)		(64)
Net cash provided by operating activities	Net cash provided by operating activities	553		556		Net cash provided by operating activities	562		553

Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Net principal collections (originations and purchases) of finance receivables		(245)		217
Net principal originations and purchases of finance receivables						Net principal originations and purchases of finance receivables	(432)		(245)

Proceeds from sales of finance receivables	Proceeds from sales of finance receivables	200		50		Proceeds from sales of finance receivables	200		200
Available-for-sale securities purchased	Available-for-sale securities purchased	(90)		(146)		Available-for-sale securities purchased	(44)		(90)
Available-for-sale securities called, sold, and matured	Available-for-sale securities called, sold, and matured	196		91		Available-for-sale securities called, sold, and matured	88		196
Other securities purchased	Other securities purchased	(2)		(688)		Other securities purchased	(2)		(2)
Other securities called, sold, and matured	Other securities called, sold, and matured	7		681		Other securities called, sold, and matured	2		7
Other, net	Other, net	(16)		(7)		Other, net	(16)		(16)
Net cash provided by investing activities		50		198
Net cash provided by (used for) investing activities						Net cash provided by (used for) investing activities	(204)		50

Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Proceeds from issuance and borrowings of long-term debt, net of issuance costs	Proceeds from issuance and borrowings of long-term debt, net of issuance costs	198		(1)		Proceeds from issuance and borrowings of long-term debt, net of issuance costs	843		198
Repayment of long-term debt		(398)		(1,065)
Repayments and repurchases of long-term debt						Repayments and repurchases of long-term debt	(928)		(398)
Cash dividends	Cash dividends	(226)		(534)		Cash dividends	(152)		(226)
Withholding tax on share-based compensation	Withholding tax on share-based compensation	(12)		(5)		Withholding tax on share-based compensation	(8)		(12)
Net cash used for financing activities	Net cash used for financing activities	(438)		(1,605)		Net cash used for financing activities	(245)		(438)

Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	165		(851)		Net change in cash and cash equivalents and restricted cash and restricted cash equivalents	113		165
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	986		2,723		Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period	951		986
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	1,151	$	1,872	Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period	$	1,064	$	1,151

Supplemental cash flow information	Supplemental cash flow information					Supplemental cash flow information
Cash and cash equivalents	Cash and cash equivalents	$	620	$	1,301	Cash and cash equivalents	$	533	$	620
Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	531		571		Restricted cash and restricted cash equivalents	531		531
Total cash and cash equivalents and restricted cash and restricted cash equivalents	Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	1,151	$	1,872	Total cash and cash equivalents and restricted cash and restricted cash equivalents	$	1,064	$	1,151

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

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

Table of Contents

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

March 31, ~~2022~~2023


1. Business and Basis of Presentation

OneMain Holdings, Inc. (“OMH”), and its wholly owned direct subsidiary, OneMain Finance Corporation (“OMFC”) are financial services holding companies whose subsidiaries engage in the consumer finance and insurance businesses.

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.”

BASIS OF PRESENTATION

We prepared our condensed consolidated financial statements using generally accepted accounting principles in the United States of America (“GAAP”). These statements are unaudited. The year-end condensed balance sheet data was derived from our audited financial statements but does not include all disclosures required by GAAP. The statements include the accounts of OMH, its subsidiaries (all of which are wholly owned), and variable interest entities (“VIEs”) in which we hold a controlling financial interest and for which we are considered to be the primary beneficiary as of the financial statement date.

We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our condensed consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of results. Actual results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date.

The condensed consolidated financial statements in this report should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report. We follow the same significant accounting policies for our interim ~~reporting.~~reporting except for the new accounting pronouncements subsequently adopted and disclosed in Note 2. To conform to the ~~2022~~2023 presentation, we reclassified certain items in prior periods of our condensed consolidated financial statements.

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2. Recent Accounting Pronouncements

ACCOUNTING PRONOUNCEMENTS ~~TO BE~~RECENTLY 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~~The ASU requires the assumptions used to measure the liability for future policy benefits ~~will~~to be updated at least annually. The guidance ~~requires~~prescribes 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~~became effective for the Company beginning January 1, 2023 and we ~~have selected~~adopted using the modified retrospective transition method. This ASU required a transition date of January 1, 2021 and resulted in recasting prior periods.

The effects of the adoption of ASU 2018-12 to our condensed consolidated balance sheets were as follows:


(dollars in millions)	As Reported		ASU 2018-12 Adjustment		As Recast

December 31, 2022
Other assets (OMH only)	$	1,150	$	4	$	1,154
Other assets (OMFC only)	1,148		4		1,152
Insurance claims and policyholder liabilities	602		18		620
Accumulated other comprehensive loss	(119)		(8)		(127)
Retained earnings (OMH only)	2,125		(6)		2,119
Retained earnings (OMFC only)	1,199		(6)		1,193

March 31, 2022
Other assets (OMH only)	$	981	$	8	$	989
Other assets (OMFC only)	980		8		988
Insurance claims and policyholder liabilities	621		37		658
Accumulated other comprehensive loss	(11)		(31)		(42)
Retained earnings (OMH only)	1,905		2		1,907
Retained earnings (OMFC only)	1,156		2		1,158

December 31, 2021
Other assets (OMH only)	$	1,003	$	16	$	1,019
Other assets (OMFC only)	1,001		16		1,017
Insurance claims and policyholder liabilities	621		72		693
Accumulated other comprehensive income	61		(56)		5



January 1, 2021
Other assets (OMH and OMFC)	$	1,054	$	21	$	1,075

Insurance claims and policyholder liabilities	621		97		718
Accumulated other comprehensive income	94		(76)		18

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The effects of the adoption of ASU 2018-12 to our condensed consolidated statements of operations were as follows:


(dollars in millions, except per share amounts)	As Reported		ASU 2018-12 Adjustment		As Recast

Three Months Ended March 31, 2022
Insurance policy benefits and claims	$	45	$	(3)	$	42
Income before income taxes	396		3		399
Income taxes	95		1		96
Net income	301		2		303
Basic EPS (OMH only)	2.37		0.01		2.38
Diluted EPS (OMH only)	2.36		0.02		2.38

The Company’s cross-functional implementation team 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 will utilize an actuarial software solution to meet the new accounting and disclosure requirements, and we continue to refine the development of the actuarial model and assumptions. After the model has been subject to a parallel testing phase in 2022, the Company will provide further disclosure regarding the estimated impacteffects of the adoption of ASU 2018-12 to our condensed consolidated statements of comprehensive income were as follows:


(dollars in millions)	As Reported		ASU 2018-12 Adjustment		As Recast

Three Months Ended March 31, 2022
Comprehensive income	$	229	$	27	$	256

The effects of the adoption of ASU 2018-12 to our condensed consolidated statements of cash flows were as follows:


(dollars in millions)	As Reported		ASU 2018-12 Adjustment		As Recast

Three Months Ended March 31, 2022
Net income	$	301	$	2	$	303
Deferred income tax charge	21		1		22
Cash flows due to changes in other assets and other liabilities (OMH only)	(62)		(3)		(65)
Cash flows due to changes in other assets and other liabilities (OMFC only)	(61)		(3)		(64)

As a result of the adoption of ASU 2018-12, our significant accounting policy related to long-duration insurance contracts for policy and claim reserves has changed to reflect the requirements of the new standard. See below for the updated significant accounting policy as of the transition date of January 1, 2021.

Policy and Claim Reserves

Policy reserves are established for our long-duration contracts. The liability for future policy benefits is the present value of estimated future policy benefits to be paid to or on behalf of policyholders less the present value of estimated future net premiums to be collected from policyholders. To estimate the liability, we make assumptions for mortality, morbidity, lapses, and the discount rate.

At least annually, we update our estimate of the liability with actual experience and review our cash flow assumptions. The updated liability is discounted at the original discount rate at contract inception, and the change in the balance is recognized as a remeasurement gain or loss and included in Insurance policy benefits and claims in our consolidated ~~financial statements.~~statements of operations.

The discount rate assumption is the equivalent of an upper-medium grade fixed-income instrument yield. To determine the original discount rate at contract inception, we use a weighted average rate based on a forward yield curve over the contract issue year. At each reporting period, the liability is remeasured using the current discount rate and the change in the liability due to the discount rate is recognized in Accumulated other comprehensive income (loss) in our consolidated balance sheets.

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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~~adopted the amendments in this ASU as of January 1, 2023 using the modified retrospective transition method.

Upon adoption, we recorded a ~~material impact on~~decrease to the allowance for finance receivable losses of $16 million, a decrease to deferred tax assets of $4 million and a one-time corresponding cumulative increase to retained earnings, net of tax, of $12 million in our consolidated balance sheets as of January 1, 2023.

As a result of the adoption of ASU 2022-02, several of our significant accounting policies have changed to reflect the requirements of the new standard. See below for the updated significant accounting policies as of January 1, 2023.

Troubled Debt Restructured Finance Receivables

ASU 2022-02 superseded the accounting for troubled debt restructurings by creditors. As a result of the adoption of this ASU, the accounting for TDRs is no longer applicable for periods beginning on or after January 1, 2023.

Modified Finance Receivables to Borrowers Experiencing Financial Difficulty

We make modifications to our finance receivables to assist borrowers who are experiencing financial ~~statements~~difficulty, participating in a counseling or ~~disclosures,~~settlement arrangement, or are in bankruptcy. When we modify the contractual terms for economic or other reasons related to the borrower’s financial difficulties, we classify that receivable as a modified finance receivable. We restructure finance receivables only if ~~adopted.~~we believe the customer has the ability to pay under the restructured terms for the foreseeable future.

When we modify an account, we primarily use a combination of the following to reduce the borrower’s monthly payment: reduce the interest rate, extend the term, defer or forgive past due interest, or forgive principal. As part of the modification, we may require qualifying payments before the accounts are generally brought current for delinquency reporting. In addition, for principal forgiveness, we may require future payment performance by the borrower under the modified terms before the balances are contractually forgiven. We fully reserve for any potential principal forgiveness in our allowance for finance receivable losses.

Account modifications that are deemed to be a modified finance receivable are measured for impairment in accordance with our policy for allowance for finance receivable losses.

Allowance for Finance Receivable Losses

We establish the allowance for finance receivable losses through the provision for finance receivable losses. We evaluate our finance receivable portfolio by level of contractual delinquency in the portfolio, specifically in the late stage delinquency buckets and inclusive of the migration of the loans through the delinquency buckets. Our finance receivables consist of a large number of relatively small, homogeneous accounts. We evaluate our finance receivables for impairment as pools. None of our accounts are large enough to warrant individual evaluation for impairment.

We estimate the allowance for finance receivable losses primarily on historical loss experience using a cumulative loss model applied to our personal loan portfolios. Our gross credit loss expectation is offset by the estimate of future recoveries using historical recovery curves. Our personal loans are primarily segmented in the loss model by contractual delinquency status.

Other attributes in the model include loan modification status, collateral mix and recent credit score. To estimate the gross credit losses, the model utilizes a roll rate matrix to project the first 12 months of losses and historical cohort performance to project the expected losses over the remaining term. Our methodology relies on historical loss experience to forecast the corresponding future outcomes. These patterns are then applied to the current portfolio to obtain an estimate of future losses. We also consider key economic trends including unemployment rates. Forecasted macroeconomic conditions extend to our reasonable and supportable forecast period and revert to a historical average. No new volume is assumed. Personal loan renewals are a significant piece of our new volume and are considered a terminal event of the previous loan.

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For our personal loans, we have elected not to measure an allowance on accrued finance charges as it is our policy to reverse finance charge amounts previously accrued after four contractual payments become past due. For credit cards, we measure an allowance on uncollected finance charges, but do not measure an allowance on the unfunded portion of the credit card lines as the accounts are unconditionally cancellable.

Management exercises its judgment when determining the amount of allowance for finance receivable losses. Our judgment is based on quantitative analyses, qualitative factors (such as recent portfolio, industry, and other economic trends), and experience in the consumer finance industry. We adjust the amounts determined by our model for management’s estimate of the effects of model imprecision which include but are not limited to, any changes to underwriting criteria and portfolio seasoning.

We generally charge off to the allowance for finance receivable losses on personal loans and credit cards that are beyond seven payments (approximately 180 days) past due. Exceptions include accounts in bankruptcy, which are generally charged off at the earlier of notice of discharge or when the customer becomes seven payments past due, and accounts of deceased borrowers, which are generally charged off at the time of notice. Generally, we start repossession of any titled personal property when the customer becomes two payments (approximately 30 days) past due and may charge off prior to the account becoming seven payments (approximately 180 days) past due.

We may renew delinquent secured or unsecured personal loan accounts if the customer meets current underwriting criteria and it does not appear that the cause of past delinquency will affect the customer’s ability to repay the renewed loan. We subject all renewals to the same credit risk underwriting process as we would a new application for credit.

See Notes 3 and 4 for additional information on the adoption of ASU 2022-02.

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3. Finance Receivables

Our finance receivables consist of personal loans and credit cards. Personal loans are non-revolving, with a fixed rate, have 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)	(dollars in millions)	Personal Loans		Credit Cards		Total		(dollars in millions)	Personal Loans		Credit Cards		Total

March 31, 2022
Gross finance receivables (a)		$	18,693	$	49	$	18,742
March 31, 2023								March 31, 2023
Gross finance receivables *								Gross finance receivables *	$	19,444	$	121	$	19,565
Unearned fees	Unearned fees	(218)		(1)		(219)		Unearned fees	(215)		—		(215)
Accrued finance charges and fees	Accrued finance charges and fees	278		1		279		Accrued finance charges and fees	276		—		276
Deferred origination costs	Deferred origination costs	176		1		177		Deferred origination costs	182		1		183
Total	Total	$	18,929	$	50	$	18,979	Total	$	19,687	$	122	$	19,809

December 31, 2021
Gross finance receivables (a)		$	18,944	$	24	$	18,968
December 31, 2022								December 31, 2022
Gross finance receivables *								Gross finance receivables *	$	19,615	$	107	$	19,722
Unearned fees	Unearned fees	(225)		(1)		(226)		Unearned fees	(220)		—		(220)
Accrued finance charges and fees	Accrued finance charges and fees	289		—		289		Accrued finance charges and fees	299		—		299
Deferred origination costs	Deferred origination costs	179		2		181		Deferred origination costs	185		—		185
Total	Total	$	19,187	$	25	$	19,212	Total	$	19,879	$	107	$	19,986

~~(a) Gross~~* Personal loan gross finance receivables equal the unpaid principal ~~balance of our personal loans and credit cards.~~balance. For precompute personal loans, unpaid principal balance is the gross contractual payments less the unaccreted balance of unearned finance charges. Credit card gross finance receivables equal the principal balance and billed interest and fees.

WHOLE LOAN SALE TRANSACTIONS

As of March 31, ~~2022,~~2023, we have whole loan sale flow agreements with third parties, with remaining terms of less than ~~two years,~~one year, in which we agreed to sell a combined total of ~~$180~~$135 million gross receivables per quarter of newly originated unsecured personal loans along with any associated accrued interest. These unsecured personal loans 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~~Other revenues in ~~the first quarter~~our condensed consolidated statements of ~~2021. During~~operations. We sold $180 million of gross finance receivables during the three months ended March 31, ~~2022~~2023 and ~~2021, we sold $180 million and $45 million of gross finance receivables, respectively.~~2022. The gain on the sales were $17 million ~~and $4 million~~ during the three months ended March 31, ~~2022~~2023 and ~~2021, respectively.~~2022.

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 personal loans are 60 days contractually past due, we consider these accounts to be at an increased risk for loss and move collection of these accounts ~~is managed by~~to our ~~centralized~~central collection operations. We consider our personal loans to be nonperforming at 90 days or more contractually past due, at which point we stop accruing finance charges and reverse finance charges previously accrued. For our personal loans, we reversed net accrued finance charges of ~~$27~~$37 million and ~~$20~~$27 million during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

Finance charges recognized from the contractual interest portion of payments received on nonaccrual personal loans totaled $6 million and $4 million during the three months ended March 31, 2023 and 2022, ~~and 2021.~~respectively. All personal loans in nonaccrual status are considered in our estimate of allowance for finance receivable losses.

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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, 2023 and 2022 ~~and 2021.~~were immaterial.

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


(dollars in millions)	(dollars in millions)	2022		2021		2020		2019		2018		Prior		Total		(dollars in millions)	2023		2022		2021		2020		2019		Prior		Total

March 31, 2022
March 31, 2023																March 31, 2023
Performing	Performing															Performing
Current	Current	$	2,771	$	9,057	$	3,252	$	2,153	$	622	$	229	$	18,084	Current	$	2,641	$	9,224	$	4,195	$	1,464	$	861	$	260	$	18,645
30-59 days past due	30-59 days past due	3		131		55		37		13		7		246		30-59 days past due	3		137		98		31		19		9		297
60-89 days past due	60-89 days past due	—		99		42		26		9		5		181		60-89 days past due	—		98		72		22		13		6		211
Total performing	Total performing	2,774		9,287		3,349		2,216		644		241		18,511		Total performing	2,644		9,459		4,365		1,517		893		275		19,153
Nonperforming (Nonaccrual)	Nonperforming (Nonaccrual)															Nonperforming (Nonaccrual)
90+ days past due	90+ days past due	—		202		113		70		21		12		418		90+ days past due	—		217		206		61		35		15		534

Total	Total	$	2,774	$	9,489	$	3,462	$	2,286	$	665	$	253	$	18,929	Total	$	2,644	$	9,676	$	4,571	$	1,578	$	928	$	290	$	19,687

Gross charge-offs																Gross charge-offs	$	—	$	139	$	199	$	59	$	34	$	14	$	445


(dollars in millions)	(dollars in millions)	2021		2020		2019		2018		2017		Prior		Total		(dollars in millions)	2022		2021		2020		2019		2018		Prior		Total

December 31, 2021
December 31, 2022																December 31, 2022
Performing	Performing															Performing
Current	Current	$	10,645	$	3,935	$	2,641	$	814	$	193	$	109	$	18,337	Current	$	10,614	$	4,927	$	1,758	$	1,081	$	240	$	105	$	18,725
30-59 days past due	30-59 days past due	125		74		53		19		6		5		282		30-59 days past due	136		136		43		28		9		5		357
60-89 days past due	60-89 days past due	81		53		33		11		4		3		185		60-89 days past due	92		101		32		19		6		3		253
Total performing	Total performing	10,851		4,062		2,727		844		203		117		18,804		Total performing	10,842		5,164		1,833		1,128		255		113		19,335
Nonperforming (Nonaccrual)	Nonperforming (Nonaccrual)															Nonperforming (Nonaccrual)
90+ days past due	90+ days past due	125		130		85		28		9		6		383		90+ days past due	160		246		74		44		13		7		544

Total	Total	$	10,976	$	4,192	$	2,812	$	872	$	212	$	123	$	19,187	Total	$	11,002	$	5,410	$	1,907	$	1,172	$	268	$	120	$	19,879

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


(dollars in millions)	(dollars in millions)	March 31, 2022		December 31, 2021		(dollars in millions)	March 31, 2023		December 31, 2022

Current	Current	$	47	$	25	Current	$	106	$	93
30-59 days past due	30-59 days past due	2		—		30-59 days past due	4		3
60-89 days past due	60-89 days past due	1		—		60-89 days past due	3		3
90+ days past due	90+ days past due	—		—		90+ days past due	9		8

Total	Total	$	50	$	25	Total	$	122	$	107

There were no credit cards that were converted to term loans at March 31, ~~2022~~2023 or December 31, ~~2021.~~2022.

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MODIFIED FINANCE RECEIVABLES TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

Information regarding modified finance receivables to borrowers experiencing financial difficulty on or after January 1, 2023, the effective date of ASU 2022-02, were as follows:





(dollars in millions)	Three Months Ended March 31, 2023


Interest rate reduction and term extension	$	126
Interest rate reduction and principal forgiveness	96

Payment delays	—
Total modifications to borrowers experiencing financial difficulties	$	222






Modifications as a percent of net finance receivables	1.13		%

Information regarding the financial effect of modifications to borrowers experiencing financial difficulty on or after January 1, 2023, the effective date of ASU 2022-02, were as follows:


(dollars in millions)	Three Months Ended March 31, 2023


Weighted-average interest rate reduction	21.32		%
Weighted-average term extension (months)	19
Principal/interest forgiveness	$	11

Information regarding the performance of modified finance receivables to borrowers experiencing financial difficulty on or after January 1, 2023, the effective date of ASU 2022-02, were as follows:


(dollars in millions)	March 31, 2023


Current	$	159
30-59 days past due	27
60-89 days past due	14
90+ days past due	22
Total	$	222

There were no modified finance receivables to borrowers experiencing financial difficulty on or after January 1, 2023, the effective date of ASU 2022-02, and for which there was a default during the period to cause the modified finance receivable to be considered nonperforming (90 days or more past due).

See Notes 2 and 4 for additional information on the adoption of ASU 2022-02.

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TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES PRIOR TO ADOPTION OF ASU 2022-02

ASU 2022-02 superseded the accounting for troubled debt restructurings by creditors. Due to the adoption of this ASU, the following disclosures related to troubled debt restructuring finance receivables are no longer applicable for reporting periods beginning in 2023.

Information regarding TDR finance receivables were as follows:

(dollars in millions) March 31, 2022 December 31, 2021

TDR gross finance receivables $ 652 $ 646
TDR net finance receivables * 656 650
Allowance for TDR finance receivable losses 263 270



(dollars in millions)	December 31, 2022


TDR gross finance receivables	$	898
TDR net finance receivables *	904
Allowance for TDR finance receivable losses	369

* TDR net finance receivables are TDR gross finance receivables net of unearned fees, accrued finance charges, and deferred origination costs.

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

Information regarding the new volume of the TDR finance receivables were as follows:
Three Months Ended
March 31,
(dollars in millions) 2022 2021
Pre-modification TDR net finance receivables $ 134 $ 116
Post-modification TDR net finance receivables:
Rate reduction 87 78
Other * 47 38
Total post-modification TDR net finance receivables $ 134 $ 116
Number of TDR accounts 16,165 14,508




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



Pre-modification TDR net finance receivables	$	134
Post-modification TDR net finance receivables:
Rate reduction	87
Other *	47
Total post-modification TDR net finance receivables	$	134
Number of TDR accounts	16,165

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

Finance receivables that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause the TDR finance receivables to be considered nonperforming (90 days or more past due) are reflected in the following table:
Three Months Ended
March 31,
(dollars in millions) 2022 2021
TDR net finance receivables * $ 30 $ 30
Number of TDR accounts 3,796 4,183




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





TDR net finance receivables *	$	30
Number of TDR accounts	3,796

* 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~~$99 million at March 31, ~~2022~~2023 and ~~$54~~$81 million at December 31, ~~2021.~~2022.

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4. Allowance for Finance Receivable Losses

We establish an allowance for finance receivable losses through the provision for finance receivable losses. We evaluate our finance receivable portfolio by the level of contractual delinquency in the portfolio, specifically in the ~~late-stage~~late stage delinquency buckets and inclusive of the migration of the finance receivables through the delinquency buckets. We estimate and record an allowance for finance receivable losses to cover the ~~estimated~~expected 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~~uses recent macroeconomic forecasts, which ~~incorporated the overall unemployment rate.~~include forecasts for unemployment. We leverage projections from various industry leading providers. We also ~~considered~~consider inflationary pressures, ~~supply chain concerns, geopolitical risks, along with~~consumer confidence levels, and interest rate increases that may continue to impact the ~~persistent labor supply shortages. Our forecast leveraged~~ economic ~~projections from industry leading forecast providers.~~outlook. At March 31, ~~2022,~~2023, our economic forecast used a reasonable and supportable period of 12 months. The decrease in our allowance for finance receivable losses for the three months ended March 31, ~~2022~~2023 was primarily due to ~~a seasonal decline in our loan portfolio.~~the adoption of ASU 2022-02. We may experience further changes to the macroeconomic assumptions within our forecast, as well as changes to our loan loss performance outlook, both of which could lead to further changes in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.

Changes in the allowance for finance receivable losses were as follows:
(dollars in millions) Personal Loans Credit Cards Total
Three Months Ended March 31, 2022
Balance at beginning of period $ 2,090 $ 5 $ 2,095
Provision for finance receivable losses 233 5 238
Charge-offs (329) — (329)
Recoveries 67 — 67
Balance at end of period $ 2,061 $ 10 $ 2,071
Three Months Ended March 31, 2021*
Balance at beginning of period $ 2,269 $ — $ 2,269
Provision for finance receivable losses (2) — (2)
Charge-offs (255) — (255)
Recoveries 50 — 50
Balance at end of period $ 2,062 $ — $ 2,062

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


(dollars in millions)	Personal Loans		Credit Cards		Total
















Three Months Ended March 31, 2023
Balance at beginning of period	$	2,290	$	21	$	2,311

Impact of adoption of ASU 2022-02 *	(16)		—		(16)
Provision for finance receivable losses	377		8		385
Charge-offs	(445)		(6)		(451)
Recoveries	69		—		69

Balance at end of period	$	2,275	$	23	$	2,298



Three Months Ended March 31, 2022
Balance at beginning of period	$	2,090	$	5	$	2,095

Provision for finance receivable losses	233		5		238
Charge-offs	(329)		—		(329)
Recoveries	67		—		67

Balance at end of period	$	2,061	$	10	$	2,071

~~Table~~* As a result of ~~Contents~~

~~The~~the adoption of ASU 2022-02, we recorded a one-time adjustment to the allowance for finance receivable ~~losses~~losses. See Notes 2 and ~~net finance receivables by impairment method were as follows:~~

(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 %

3 for additional information on the adoption of ASU 2022-02.

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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

March 31, 2022*
March 31, 2023*										March 31, 2023*
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	$	11	$	—	$	—	$	11	U.S. government and government sponsored entities	$	17	$	—	$	(1)	$	16
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	74		—		(3)		71		Obligations of states, municipalities, and political subdivisions	73		—		(6)		67
Commercial paper	Commercial paper	57		—		—		57		Commercial paper	55		—		—		55
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	156		1		(3)		154		Non-U.S. government and government sponsored entities	151		—		(7)		144
Corporate debt	Corporate debt	1,140		11		(38)		1,113		Corporate debt	1,219		3		(99)		1,123
Mortgage-backed, asset-backed, and collateralized:	Mortgage-backed, asset-backed, and collateralized:									Mortgage-backed, asset-backed, and collateralized:
RMBS	RMBS	177		1		(8)		170		RMBS	213		—		(23)		190
CMBS	CMBS	43		—		(1)		42		CMBS	38		—		(3)		35
CDO/ABS	CDO/ABS	85		—		(3)		82		CDO/ABS	93		—		(7)		86
Total	Total	$	1,743	$	13	$	(56)	$	1,700	Total	$	1,859	$	3	$	(146)	$	1,716

December 31, 2021*
December 31, 2022*										December 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	$	16	$	—	$	—	$	16	U.S. government and government sponsored entities	$	17	$	—	$	(1)	$	16
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	76		3		—		79		Obligations of states, municipalities, and political subdivisions	74		—		(8)		66
Commercial paper	Commercial paper	50		—		—		50		Commercial paper	55		—		—		55
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	151		4		—		155		Non-U.S. government and government sponsored entities	150		—		(8)		142
Corporate debt	Corporate debt	1,246		61		(5)		1,302		Corporate debt	1,251		1		(115)		1,137
Mortgage-backed, asset-backed, and collateralized:	Mortgage-backed, asset-backed, and collateralized:									Mortgage-backed, asset-backed, and collateralized:
RMBS	RMBS	169		3		(2)		170		RMBS	217		—		(25)		192
CMBS	CMBS	44		1		—		45		CMBS	38		—		(3)		35
CDO/ABS	CDO/ABS	90		1		(1)		90		CDO/ABS	95		—		(9)		86
Total	Total	$	1,842	$	73	$	(8)	$	1,907	Total	$	1,897	$	1	$	(169)	$	1,729

* The allowance for credit losses related to our investment securities as of March 31, ~~2022~~2023 and December 31, ~~2021~~2022 were immaterial.

Interest receivables reported in ~~“Other assets”~~Other assets in our condensed consolidated balance sheets totaled ~~$12 million and $13~~$14 million as of March 31, ~~2022~~2023 and December 31, ~~2021, respectively.~~2022. There were no material amounts reversed from investment revenue for available-for-sale securities for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

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Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position without an allowance for credit losses were as follows:


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

March 31, 2022
March 31, 2023														March 31, 2023
U.S. government and government sponsored entities	U.S. government and government sponsored entities	$	6	$	—	$	—	$	—	$	6	$	—	U.S. government and government sponsored entities	$	10	$	—	$	6	$	(1)	$	16	$	(1)
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	48		(3)		2		—		50		(3)		Obligations of states, municipalities, and political subdivisions	12		—		50		(6)		62		(6)
Commercial paper	Commercial paper	47		—		—		—		47		—		Commercial paper	51		—		—		—		51		—
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	91		(3)		6		—		97		(3)		Non-U.S. government and government sponsored entities	30		—		93		(7)		123		(7)
Corporate debt	Corporate debt	584		(31)		48		(7)		632		(38)		Corporate debt	311		(8)		712		(91)		1,023		(99)
Mortgage-backed, asset-backed, and collateralized:	Mortgage-backed, asset-backed, and collateralized:													Mortgage-backed, asset-backed, and collateralized:
RMBS	RMBS	125		(6)		20		(2)		145		(8)		RMBS	48		(2)		125		(21)		173		(23)
CMBS	CMBS	31		(1)		—		—		31		(1)		CMBS	9		—		26		(3)		35		(3)
CDO/ABS	CDO/ABS	61		(3)		5		—		66		(3)		CDO/ABS	18		—		58		(7)		76		(7)
Total	Total	$	993	$	(47)	$	81	$	(9)	$	1,074	$	(56)	Total	$	489	$	(10)	$	1,070	$	(136)	$	1,559	$	(146)

December 31, 2021
December 31, 2022														December 31, 2022
U.S. government and government sponsored entities	U.S. government and government sponsored entities	$	6	$	—	$	—	$	—	$	6	$	—	U.S. government and government sponsored entities	$	10	$	—	$	6	$	(1)	$	16	$	(1)
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	10		—		—		—		10		—		Obligations of states, municipalities, and political subdivisions	48		(5)		15		(3)		63		(8)
Commercial paper	Commercial paper	46		—		—		—		46		—		Commercial paper	51		—		—		—		51		—
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	19		—		5		—		24		—		Non-U.S. government and government sponsored entities	104		(3)		32		(5)		136		(8)
Corporate debt	Corporate debt	208		(3)		38		(2)		246		(5)		Corporate debt	779		(54)		299		(61)		1,078		(115)
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)		RMBS	106		(9)		68		(16)		174		(25)
CMBS	CMBS	7		—		—		—		7		—		CMBS	21		(2)		13		(1)		34		(3)
CDO/ABS	CDO/ABS	41		(1)		3		—		44		(1)		CDO/ABS	45		(3)		35		(6)		80		(9)
Total	Total	$	418	$	(5)	$	61	$	(3)	$	479	$	(8)	Total	$	1,164	$	(76)	$	468	$	(93)	$	1,632	$	(169)

On a lot basis, we had ~~1,406~~2,176 and ~~570~~2,280 investment securities in an unrealized loss position at March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, 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 March 31, ~~2022,~~2023, there were no credit impairments on investment securities that we intend to sell. We do not have plans to sell any of the remaining investment securities with unrealized losses as of March 31, ~~2022,~~2023, 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 months ended March 31, ~~2022~~2023 and ~~2021,~~2022, 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 months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

The proceeds of available-for-sale securities sold or redeemed during the three months ended March 31, 2023 and 2022 ~~and 2021~~ totaled ~~$163~~$26 million and ~~$67~~$163 million, respectively. The net realized gains and losses were immaterial during the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

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Contractual maturities of fixed-maturity available-for-sale securities at March 31, ~~2022~~2023 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	$	180	$	179	Due in 1 year or less	$	192	$	194
Due after 1 year through 5 years	Due after 1 year through 5 years	493		496		Due after 1 year through 5 years	544		571
Due after 5 years through 10 years	Due after 5 years through 10 years	572		598		Due after 5 years through 10 years	532		592
Due after 10 years	Due after 10 years	161		165		Due after 10 years	137		158
Mortgage-backed, asset-backed, and collateralized securities	Mortgage-backed, asset-backed, and collateralized securities	294		305		Mortgage-backed, asset-backed, and collateralized securities	311		344
Total	Total	$	1,700	$	1,743	Total	$	1,716	$	1,859

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 ~~$556~~$535 million and ~~$587~~$532 million at March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

OTHER SECURITIES

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


(dollars in millions)	(dollars in millions)	March 31, 2022		December 31, 2021		(dollars in millions)	March 31, 2023		December 31, 2022

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

Bonds	Bonds	$	25	$	30	Bonds	$	21	$	23
Preferred stock *	Preferred stock *	19		22		Preferred stock *	16		15
Common stock *	Common stock *	34		33		Common stock *	33		33

Total	Total	$	78	$	85	Total	$	70	$	71

* 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 months ended March 31, ~~2022~~2023 and ~~2021.~~2022. Net realized gains and losses on other securities sold or redeemed were immaterial for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

Other securities primarily consist of equity securities and those securities for which the fair value option was elected. We report net unrealized and realized gains and losses on other securities held, sold, or redeemed in investment revenue.

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6. Long-term Debt

Principal maturities of long-term debt ~~(excluding projected repayments on securitizations by period)~~ by type of debt at March 31, ~~2022~~2023 were as follows:


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

Interest rates (b)	Interest rates (b)	0.81%-6.94%		0.99%-1.15%		3.50%-8.88%		1.99		%				Interest rates (b)	0.87%-7.07%		5.77%		5.55%		3.50%-8.25%		6.58		%

Remainder of 2022		$	—	$	—	$	—	$	—		$	—
2023		—		—		1,175		—			1,175
Remainder of 2023														Remainder of 2023	$	—	$	—	$	—	$	226	$	—		$	226
2024	2024	—		—		1,300		—			1,300			2024	—		—		—		1,270		—			1,270
2025	2025	—		—		1,835		—			1,835			2025	—		—		—		1,249		—			1,249
2026	2026	—		—		1,600		—			1,600			2026	—		—		—		1,600		—			1,600
2027-2067		—		—		3,750		350			4,100
Securitizations (c)		7,184		—		—		—			7,184
Revolving conduit facilities (c)		—		650		—		—			650
2027														2027	—		—		—		750		—			750
2028-2067														2028-2067	—		—		—		2,932		350			3,282
Secured (c)														Secured (c)	9,654		350		100		—		—			10,104

Total principal maturities	Total principal maturities	$	7,184	$	650	$	9,660	$	350		$	17,844		Total principal maturities	$	9,654	$	350	$	100	$	8,027	$	350		$	18,481

Total carrying amount	Total carrying amount	$	7,153	$	650	$	9,585	$	172		$	17,560		Total carrying amount	$	9,611	$	349	$	100	$	7,974	$	172		$	18,206
Debt issuance costs (d)	Debt issuance costs (d)	(29)		—		(77)		—			(106)			Debt issuance costs (d)	(40)		(1)		—		(57)		—			(98)

(a) Pursuant to the Base Indenture, the Supplemental Indentures, and the Guaranty Agreements, OMH agreed to fully and unconditionally guarantee, on a senior unsecured basis, payments of principal, premium and interest on the Unsecured Notes and Junior Subordinated Debenture. The OMH guarantees of OMFC’s long-term debt are subject to customary release provisions.

(b) The interest rates shown are the range of contractual rates in effect at March 31, ~~2022.~~2023.

(c) Securitizations, private secured term funding, 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. See Note 7 for further information on our long-term debt associated with securitizations, private secured term funding, 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 $3031 million at March 31, ~~2022~~2023 and are reported in ~~“Other assets.”~~Other assets in our condensed consolidated balance sheets.

UNSECURED CORPORATE REVOLVER

At March 31, 2023, the total maximum borrowing capacity of our unsecured corporate revolver was $1.25 billion. The corporate revolver has a five-year term beginning October 25, 2021, during which draws and repayments may occur. Any outstanding principal balance is due and payable on October 25, 2026. At March 31, 2023, no amounts were drawn under this facility.

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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 securitized borrowings.

See Note 2 and Note 9 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our Annual Report for more detail regarding VIEs.

~~Table of Contents~~

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 ifwhen 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, private secured term funding, and revolving conduit facilities were as follows:


(dollars in millions)	(dollars in millions)	March 31, 2022		December 31, 2021		(dollars in millions)	March 31, 2023		December 31, 2022

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	8,579		8,821		Net finance receivables	11,108		10,432
Allowance for finance receivable losses	Allowance for finance receivable losses	896		910		Allowance for finance receivable losses	1,206		1,126
Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	509		466		Restricted cash and restricted cash equivalents	513		442
Other assets	Other assets	27		26		Other assets	29		28

Liabilities	Liabilities					Liabilities
Long-term debt	Long-term debt	$	7,803	$	7,999	Long-term debt	$	10,060	$	9,361
Other liabilities	Other liabilities	12		13		Other liabilities	20		20

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 ~~$65~~$101 million and ~~$78~~$65 million during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, 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 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.

PRIVATE SECURED TERM FUNDING

At March 31, 2023, an aggregate amount of $350 million was outstanding under the private secured term funding collateralized by our personal loans. No principal payments are required to be made until after April 25, 2025, followed by a subsequent one-year amortization period, at the expiration of which the outstanding principal amount is due and payable.

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REVOLVING CONDUIT FACILITIES

We had access to 1415 revolving conduit facilities with a total maximum borrowing capacity of ~~$6.0~~$6.2 billion as of March 31, ~~2022.~~2023. 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 ~~nine~~ten years as of March 31, ~~2022.~~2023. Amounts drawn on these facilities are collateralized by our personal loans.

At March 31, ~~2022,~~2023, an aggregate amount of ~~$650~~$100 million was drawn under these facilities and the remaining borrowing capacity was ~~$5.4~~$6.1 billion.

~~Table of Contents~~


8. Insurance

Changes in the reserve for unpaid claims and loss adjustment expenses (net of reinsurance recoverables): on our short-duration insurance contracts:


		At or for the Three Months Ended March 31,					At or for the Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2022		2021		(dollars in millions)	2023		2022 (a)

Balance at beginning of period	Balance at beginning of period	$	118	$	148	Balance at beginning of period	$	93	$	102
Less reinsurance recoverables	Less reinsurance recoverables	(3)		(3)		Less reinsurance recoverables	(3)		(3)

Net balance at beginning of period	Net balance at beginning of period	115		145		Net balance at beginning of period	90		99

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	58		57		Current year	42		46
Prior years *		(8)		(18)
Prior years (b)						Prior years (b)	(1)		(6)
Total	Total	50		39		Total	41		40
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	(16)		(18)		Current year	(12)		(13)
Prior years	Prior years	(35)		(47)		Prior years	(27)		(27)
Total	Total	(51)		(65)		Total	(39)		(40)

Net balance at end of period	Net balance at end of period	114		119		Net balance at end of period	92		99
Plus reinsurance recoverables	Plus reinsurance recoverables	3		3		Plus reinsurance recoverables	3		3

Balance at end of period	Balance at end of period	$	117	$	122	Balance at end of period	$	95	$	102

*(a) As a result of the modified retrospective adoption of ASU 2018-12, we have recorded a $16 million reduction to the 2022 beginning balance, and the previously reported balances were recast to exclude reserves for unpaid claims on our long-duration contracts. These reserves have been included in our estimate of the liability for future policy benefits as of the transition date of January 1, 2021. See Note 2 for additional information on the adoption of ASU 2018-12.

(b) 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~~2023, $1 million reflected a redundancy in the prior years’ net reserves, primarily due to favorable development of credit disability ~~and unemployment~~claims during the period. At March 31, 2022, $6 million reflected a redundancy in the prior years’ net reserves, primarily due to favorable development of credit life claims during the period.

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LIABILITY FOR FUTURE POLICY BENEFITS

The present value of expected net premiums on long-duration insurance contracts were as follows:


	At or for the Three Months Ended March 31,

	2023				2022
(dollars in millions)	Term and Whole Life		Accidental Death and Disability Protection		Term and Whole Life		Accidental Death and Disability Protection
Balance at beginning of period	$	252	$	48	$	313	$	69
Effect of cumulative changes in discount rate assumptions (beginning of period)	(8)		—		(53)		(10)
Beginning balance at original discount rate	244		48		260		59

Effect of actual variances from expected experience	(2)		—		1		—
Adjusted balance at beginning of period	242		48		261		59

Interest accretion	6		—		27		(1)
Net premiums collected	(7)		(2)		(10)		(2)

Ending balance at original discount rate	241		46		278		56
Effect of changes in discount rate assumptions	5		—		35		6
Balance at ending of period	$	246	$	46	$	313	$	62

The present value of expected future policy benefits on long-duration insurance contracts were as follows:


	At or for the Three Months Ended March 31,

	2023				2022
(dollars in millions)	Term and Whole Life		Accidental Death and Disability Protection		Term and Whole Life		Accidental Death and Disability Protection
Balance at beginning of period	$	483	$	126	$	601	$	165
Effect of cumulative changes in discount rate assumptions (beginning of period)	(17)		(1)		(109)		(27)
Beginning balance at original discount rate	466		125		492		138

Effect of actual variances from expected experience	1		(1)		2		(1)
Adjusted balance at beginning of period	467		124		494		137
Net issuances	1		—		1		—
Interest accretion	9		3		27		1
Benefit payments	(16)		(4)		(17)		(4)

Ending balance at original discount rate	461		123		505		134
Effect of changes in discount rate assumptions	12		—		66		14
Balance at ending of period	$	473	$	123	$	571	$	148

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The net liability for future policy benefits on long-duration insurance contracts were as follows:


	At or for the Three Months Ended March 31,
	2023				2022

(dollars in millions)	Term and Whole Life		Accidental Death and Disability Protection		Term and Whole Life		Accidental Death and Disability Protection
Net liability for future policy benefits	$	227	$	77	$	258	$	86

Deferred profit liability	15		54		16		61
Total net liability for future policy benefits	$	242	$	131	$	274	$	147

The weighted-average duration of the liability for future policy benefits was 8 years at March 31, 2023 and 2022.

The following table reconciles the net liability for future policy benefits to Insurance claims and policyholder liabilities in the condensed consolidated balance sheets:


	At or for the Three Months Ended March 31,
(dollars in millions)	2023		2022
Term and whole life	$	242	$	274
Accidental death and disability protection	131		147
Other*	242		237
Total	$	615	$	658

* Other primarily includes reserves for short-duration contracts that are payable to third-party beneficiaries.

The undiscounted and discounted expected gross premiums and expected future benefits and expenses for our long-duration insurance contracts were as follows:


	At or for the Three Months Ended March 31,

	2023				2022
(dollars in millions)	Term and Whole Life		Accidental Death and Disability Protection		Term and Whole Life		Accidental Death and Disability Protection
Expected future gross premiums:
Undiscounted	$	466	$	159	$	586	$	181
Discounted	326		114		442		142
Expected future benefit payments:
Undiscounted	670		181		741		198
Discounted	473		123		571		148

The revenue and interest related to our long-duration insurance contracts recognized in the condensed consolidated statements of operations were as follows:


	At or for the Three Months Ended March 31,

	2023				2022
(dollars in millions)	Term and Whole Life		Accidental Death and Disability Protection		Term and Whole Life		Accidental Death and Disability Protection
Gross premiums or assessments	$	11	$	5	$	17	$	5
Interest accretion	3		3		—		1
Total	$	14	$	8	$	17	$	6

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The expected and actual experience for mortality, morbidity, and lapses of the liability for future policy benefits were as follows:


	At or for the Three Months Ended March 31,

	2023				2022
	Term and Whole Life		Accidental Death and Disability Protection		Term and Whole Life		Accidental Death and Disability Protection
Mortality/Morbidity:
Expected	0.39	%	0.01	%	0.40	%	0.01	%
Actual	0.31	%	0.01	%	0.43	%	0.01	%



Lapses:
Expected	3.18	%	2.24	%	2.70	%	2.27	%
Actual	1.67	%	0.34	%	0.96	%	0.33	%

The weighted-average interest rates for the liability of future policy benefits for our long-duration insurance contracts were as follows:


	At or for the Three Months Ended March 31,

	2023				2022
	Term and Whole Life		Accidental Death and Disability Protection		Term and Whole Life		Accidental Death and Disability Protection
Interest accretion rate	5.26	%	4.86	%	5.26	%	4.85	%
Current discount rate	5.07	%	5.06	%	3.68	%	3.61	%

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

CAPITAL STOCK

OMH has 2two classes of authorized capital stock: preferred stock and common stock. OMFC has 2two 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 March 31,		Three Months Ended March 31,
		2022	2021			2023	2022

Balance at beginning of period	Balance at beginning of period	127,809,640	134,341,724		Balance at beginning of period	121,042,125	127,809,640
Common stock issued	Common stock issued	252,277	135,372		Common stock issued	207,403	252,277
Common stock repurchased	Common stock repurchased	(2,282,552)	—		Common stock repurchased	(683,384)	(2,282,552)
Treasury stock issued	Treasury stock issued	14,471	—		Treasury stock issued	21,070	14,471

Balance at end of period	Balance at end of period	125,793,836	134,477,096		Balance at end of period	120,587,214	125,793,836

~~Table of Contents~~

EARNINGS PER SHARE (OMH ONLY)

The computation of earnings per share was as follows:


		Three Months Ended March 31,				Three Months Ended March 31,
(dollars in millions, except per share data)	(dollars in millions, except per share data)	2022		2021			(dollars in millions, except per share data)	2023		2022

Numerator (basic and diluted):	Numerator (basic and diluted):						Numerator (basic and diluted):
Net income	Net income	$	301	$	413		Net income	$	179	$	303
Denominator:	Denominator:						Denominator:
Weighted average number of shares outstanding (basic)	Weighted average number of shares outstanding (basic)	127,075,714		134,405,368			Weighted average number of shares outstanding (basic)	120,765,661		127,075,714
Effect of dilutive securities *	Effect of dilutive securities *	387,313		401,797			Effect of dilutive securities *	204,230		387,313
Weighted average number of shares outstanding (diluted)	Weighted average number of shares outstanding (diluted)	127,463,027		134,807,165			Weighted average number of shares outstanding (diluted)	120,969,891		127,463,027
Earnings per share:	Earnings per share:						Earnings per share:
Basic	Basic	$	2.37	$	3.07		Basic	$	1.48	$	2.38
Diluted	Diluted	$	2.36	$	3.06		Diluted	$	1.48	$	2.38

* We have excluded weighted-average unvested restricted stock units totaling ~~1,172,754~~1,543,976 and ~~133,004~~1,172,754 for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, 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		Changes in discount rate for insurance claims and policyholder liabilities		Other (b)		Total Accumulated Other Comprehensive Income (Loss)

Three Months Ended March 31, 2023												Three Months Ended March 31, 2023
Balance at beginning of period												Balance at beginning of period	$	(131)	$	(8)	$	(5)	$	(8)	$	25	$	(127)
Other comprehensive income (loss) before reclassifications												Other comprehensive income (loss) before reclassifications	19		—		—		3		(3)		19

Balance at end of period												Balance at end of period	$	(112)	$	(8)	$	(5)	$	(5)	$	22	$	(108)

Three Months Ended March 31, 2022	Three Months Ended March 31, 2022											Three Months Ended March 31, 2022
Balance at beginning of period	Balance at beginning of period	$	49	$	1	$	3	$	8	$	61	Balance at beginning of period	$	49	$	1	$	3	$	(56)	$	8	$	5
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(81)		—		1		10		(70)		Other comprehensive income (loss) before reclassifications	(81)		—		1		25		10		(45)
Reclassification adjustments from accumulated other comprehensive loss		(2)		—		—		—		(2)
Balance at end of period		$	(34)	$	1	$	4	$	18	$	(11)

Three Months Ended March 31, 2021
Balance at beginning of period		$	91	$	1	$	2	$	—	$	94
Other comprehensive income (loss) before reclassifications		(33)		—		2		17		$	(14)

Reclassification adjustments from accumulated other comprehensive income (loss)												Reclassification adjustments from accumulated other comprehensive income (loss)	(2)		—		—		—		—		(2)
Balance at end of period	Balance at end of period	$	58	$	1	$	4	$	17	$	80	Balance at end of period	$	(34)	$	1	$	4	$	(31)	$	18	$	(42)

(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 months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

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

Reclassification adjustments from accumulated other comprehensive income (loss) to the applicable line item on our condensed consolidated statements of operations were immaterial for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

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11. Income Taxes

We had a net deferred tax asset of ~~$339~~$438 million and $456 million at March 31, ~~2022~~2023 and December 31, 2021. Deferred tax asset increases related to the change in fair value of 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.2022, respectively.

We follow the guidance of ASC 740, Income Taxes, for interim reporting of income taxes under which we calculate an estimated annual effective tax rate (“AETR”) and apply the AETR to our year-to-date income (loss) before income taxes. In addition, we recognize any discrete items as they occur.

The effective tax rate for the three months ended March 31, ~~2022~~2023 was ~~24.1%~~24.0%, compared to ~~24.4%~~24.1% for the same period in ~~2021.~~2022. The effective tax rate for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 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 2017 to ~~2019.~~2021. Management believes it has adequately provided for taxes for such years.

Our gross unrecognized tax benefits, including related interest and penalties, totaled $7$6 million at March 31, ~~2022~~2023 and ~~$8 million at~~ December 31, ~~2021.~~2022. 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 condensed consolidated financial statements.

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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 condensed consolidated financial statements and we can reasonably estimate the amount of that loss, we accrue the estimated loss by a charge to income. In many actions, however, it is inherently difficult to determine whether any loss is probable or even reasonably possible, or to estimate the amount of any loss. In addition, even where loss is reasonably possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss.

For certain legal actions, we cannot reasonably estimate such losses, particularly for actions that are in their early stages of development or where plaintiffs seek substantial or indeterminate damages. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal questions relevant to the actions in question, before a loss or additional loss or range of loss or range of additional loss can be reasonably estimated for any given action.

For certain other legal actions, we can estimate reasonably possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued, but do not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on our condensed 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.~~

operations.

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13. Segment Information

At March 31, ~~2022,~~2023, 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 2 and Note 17 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 condensed consolidated financial statement amounts.

(dollars in millions) Consumer
and
Insurance Other Segment to
GAAP
Adjustment Consolidated
Total
Three Months Ended March 31, 2022
Interest income $ 1,087 $ 1 $ 1 $ 1,089
Interest expense 217 1 1 219
Provision for finance receivable losses 237 — 1 238
Net interest income after provision for finance receivable losses 633 — (1) 632
Other revenues 158 4 — 162
Other expenses 395 4 (1) 398
Income before income tax expense $ 396 $ — $ — $ 396
Assets $ 19,748 $ 40 $ 2,020 $ 21,808


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

Three Months Ended March 31, 2021
Three Months Ended March 31, 2023										Three Months Ended March 31, 2023
Interest income	Interest income	$	1,057	$	1	$	2	$	1,060	Interest income	$	1,092	$	1	$	1	$	1,094
Interest expense	Interest expense	233		1		1		235		Interest expense	238		—		1		239
Provision for finance receivable losses	Provision for finance receivable losses	(3)		—		1		(2)		Provision for finance receivable losses	385		—		—		385
Net interest income after provision for finance receivable losses	Net interest income after provision for finance receivable losses	827		—		—		827		Net interest income after provision for finance receivable losses	469		1		—		470
Other revenues	Other revenues	98		3		(10)		91		Other revenues	176		1		—		177
Other expenses	Other expenses	358		6		8		372		Other expenses	409		3		—		412
Income (loss) before income tax expense (benefit)	Income (loss) before income tax expense (benefit)	$	567	$	(3)	$	(18)	$	546	Income (loss) before income tax expense (benefit)	$	236	$	(1)	$	—	$	235

Assets	Assets	$	19,194	$	57	$	2,034	$	21,285	Assets	$	21,199	$	30	$	1,214	$	22,443

Three Months Ended March 31, 2022										Three Months Ended March 31, 2022
Interest income										Interest income	$	1,087	$	1	$	1	$	1,089
Interest expense										Interest expense	217		1		1		219
Provision for finance receivable losses										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	633		—		(1)		632
Other revenues										Other revenues	158		4		—		162
Other expenses										Other expenses	392		4		(1)		395
Income before income tax expense										Income before income tax expense	$	399	$	—	$	—	$	399

Assets										Assets	$	19,756	$	40	$	2,020	$	21,816

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14. Fair Value Measurements

The accounting policies of our fair value measurements are the same as those disclosed in Note 2 and Note 18 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

March 31, 2022
March 31, 2023														March 31, 2023
Assets	Assets													Assets
Cash and cash equivalents	Cash and cash equivalents	$	631	$	9	$	—			$	640				$	640	Cash and cash equivalents		$	538		$	6		$	—		$	544		$	544
Investment securities	Investment securities	56		1,717		5		1,778				1,778		Investment securities			52			1,729			5			1,786			1,786
Net finance receivables, less allowance for finance receivable losses	Net finance receivables, less allowance for finance receivable losses	—		—		19,479		19,479				16,908		Net finance receivables, less allowance for finance receivable losses			—			—			19,150			19,150			17,511
Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	531		—		—		531				531		Restricted cash and restricted cash equivalents			531			—			—			531			531
Other assets *	Other assets *	—		—		51		51				43		Other assets *			—			—			41			41			31

Liabilities	Liabilities													Liabilities
Long-term debt	Long-term debt	$	—	$	17,537	$	—	$	17,537			$	17,560	Long-term debt			$	—		$	17,057		$	—		$	17,057		$	18,206

December 31, 2021
December 31, 2022														December 31, 2022
Assets	Assets													Assets
Cash and cash equivalents	Cash and cash equivalents	$	535	$	6	$	—	$	541			$	541	Cash and cash equivalents			$	481		$	17		$	—		$	498		$	498
Investment securities	Investment securities	59		1,927		6		1,992				1,992		Investment securities			51			1,744			5			1,800			1,800
Net finance receivables, less allowance for finance receivable losses	Net finance receivables, less allowance for finance receivable losses	—		—		20,083		20,083				17,117		Net finance receivables, less allowance for finance receivable losses			—			—			19,272			19,272			17,675
Restricted cash and restricted cash equivalents	Restricted cash and restricted cash equivalents	476		—		—		476				476		Restricted cash and restricted cash equivalents			450			11			—			461			461
Other assets *	Other assets *	—		—		52		52				46		Other assets *			—			—			43			43			35

Liabilities	Liabilities													Liabilities
Long-term debt	Long-term debt	$	—	$	18,781	$	—	$	18,781			$	17,750	Long-term debt			$	—		$	16,969		$	—		$	16,969		$	18,281

*Other assets at March 31, ~~2022~~2023 and December 31, ~~2021~~2022 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

March 31, 2022
March 31, 2023										March 31, 2023
Assets	Assets									Assets
Cash equivalents in mutual funds	Cash equivalents in mutual funds	$	138	$	—	$	—	$	138	Cash equivalents in mutual funds	$	109	$	—	$	—	$	109

Cash equivalents in securities	Cash equivalents in securities	—		9		—		9		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	—		11		—		11		U.S. government and government sponsored entities	—		16		—		16
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	—		71		—		71		Obligations of states, municipalities, and political subdivisions	—		67		—		67
Commercial paper	Commercial paper	—		57		—		57		Commercial paper	—		55		—		55
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	—		154		—		154		Non-U.S. government and government sponsored entities	—		144		—		144
Corporate debt	Corporate debt	4		1,105		4		1,113		Corporate debt	5		1,115		3		1,123
RMBS	RMBS	—		170		—		170		RMBS	—		190		—		190
CMBS	CMBS	—		42		—		42		CMBS	—		35		—		35
CDO/ABS	CDO/ABS	—		82		—		82		CDO/ABS	—		86		—		86

Total available-for-sale securities	Total available-for-sale securities	4		1,692		4		1,700		Total available-for-sale securities	5		1,708		3		1,716
Other securities	Other securities									Other securities

Bonds:	Bonds:									Bonds:

Corporate debt	Corporate debt	—		8		—		8		Corporate debt	—		5		—		5
RMBS		—		1		—		1

CDO/ABS	CDO/ABS	—		16		—		16		CDO/ABS	—		16		—		16
Total bonds	Total bonds	—		25		—		25		Total bonds	—		21		—		21
Preferred stock	Preferred stock	19		—		—		19		Preferred stock	16		—		—		16
Common stock	Common stock	33		—		1		34		Common stock	31		—		2		33

Total other securities	Total other securities	52		25		1		78		Total other securities	47		21		2		70
Total investment securities	Total investment securities	56		1,717		5		1,778		Total investment securities	52		1,729		5		1,786

Restricted cash equivalents in mutual funds	Restricted cash equivalents in mutual funds	512		—		—		512		Restricted cash equivalents in mutual funds	517		—		—		517

Total	Total	$	706	$	1,726	$	5	$	2,437	Total	$	678	$	1,735	$	5	$	2,418

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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, 2021
December 31, 2022										December 31, 2022
Assets	Assets									Assets
Cash equivalents in mutual funds	Cash equivalents in mutual funds	$	41	$	—	$	—	$	41	Cash equivalents in mutual funds	$	77	$	—	$	—	$	77
Cash equivalents in securities	Cash equivalents in securities	—		6		—		6		Cash equivalents in securities	—		17		—		17
Investment securities:	Investment securities:									Investment securities:
Available-for-sale securities	Available-for-sale securities									Available-for-sale securities

U.S. government and government sponsored entities	U.S. government and government sponsored entities	—		16		—		16		U.S. government and government sponsored entities	—		16		—		16
Obligations of states, municipalities, and political subdivisions	Obligations of states, municipalities, and political subdivisions	—		79		—		79		Obligations of states, municipalities, and political subdivisions	—		66		—		66
Certificates of deposit and commercial paper		—		50		—		50
Commercial paper										Commercial paper	—		55		—		55
Non-U.S. government and government sponsored entities	Non-U.S. government and government sponsored entities	—		155		—		155		Non-U.S. government and government sponsored entities	—		142		—		142
Corporate debt	Corporate debt	5		1,292		5		1,302		Corporate debt	5		1,129		3		1,137
RMBS	RMBS	—		170		—		170		RMBS	—		192		—		192
CMBS	CMBS	—		45		—		45		CMBS	—		35		—		35
CDO/ABS	CDO/ABS	—		90		—		90		CDO/ABS	—		86		—		86

Total available-for-sale securities	Total available-for-sale securities	5		1,897		5		1,907		Total available-for-sale securities	5		1,721		3		1,729
Other securities	Other securities									Other securities

Bonds:	Bonds:									Bonds:

Corporate debt	Corporate debt	—		9		—		9		Corporate debt	—		6		—		6
RMBS	RMBS	—		1		—		1		RMBS	—		1		—		1

CDO/ABS	CDO/ABS	—		20		—		20		CDO/ABS	—		16		—		16
Total bonds	Total bonds	—		30		—		30		Total bonds	—		23		—		23
Preferred stock	Preferred stock	22		—		—		22		Preferred stock	15		—		—		15
Common stock	Common stock	32		—		1		33		Common stock	31		—		2		33

Total other securities	Total other securities	54		30		1		85		Total other securities	46		23		2		71
Total investment securities	Total investment securities	59		1,927		6		1,992		Total investment securities	51		1,744		5		1,800
Restricted cash equivalents in mutual funds	Restricted cash equivalents in mutual funds	468		—		—		468		Restricted cash equivalents in mutual funds	445		—		—		445
Restricted cash equivalents in securities										Restricted cash equivalents in securities	$	—	$	11	$	—	11
Total	Total	$	568	$	1,933	$	6	$	2,507	Total	$	573	$	1,772	$	5	$	2,350

Due to the insignificant activity within the Level 3 assets during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, 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 months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS

See Note 18 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,” “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 “could,” “may,” “might,” “should,” “will,” or “would” are intended to identify forward-looking statements, but these words are not the exclusive means of identifying 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 and volatility 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”) and the measures taken in response thereto;~~

•the sufficiency of our allowance for finance receivable losses;

•increased levels of unemployment and personal bankruptcies;

•the current inflationary environment and related trends affecting our customers;

•natural or accidental events such as earthquakes, hurricanes, pandemics, floods, or wildfires affecting our customers, collateral, or our facilities;

•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 disruptions;

•the adequacy of our credit risk scoring models;

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

•increased competition or adverse changes in customer responsiveness to our distribution channels or products;

•changes in federal, state, or local laws, regulations, or regulatory policies and practices or increased regulatory scrutiny of our business or industry;

•risks associated with our insurance operations;

•the costs and effects of any actual or alleged violations of any federal, state, or local laws, rules or 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;

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

•our ability to comply with all of our covenants; and

•the effects of any downgrade of our debt ratings by credit rating agencies.

We also direct readers to the other risks and uncertainties discussed in Part I - Item 1A. “Risk Factors” included in our Annual Report and in other documents we file with the SEC.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. You should specifically consider the factors identified in this report and in the documents we file with the SEC 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 better financial future through our personalized solutions.

We operate in the United States and market our personal loans in 44 states. We service the loans that we originate and retain on our balance sheet, as well as loans owned by third parties on their behalf in connection with our whole loan sale program and legacy businesses. In ~~the third quarter of 2021, we began offering~~connection with our offerings, our insurance subsidiaries offer our personal loan customers optional credit and non-credit insurance, and other insurance-related products. We also offer two credit cards, BrightWay and 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 branch network, through direct mail, and through our digital affiliates. In connection with our 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, distribution partnerships, 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, insurance, and other product sales activities, we also service the loans that we originate and retain on our balance sheet, as well as loans owned by third 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, 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, distribution partnerships, and our website, www.omf.com, to customers who need timely access to cash. Our personal loans are non-revolving, with a fixed rate, have fixed terms generally between three and six years, and are secured by automobiles, other titled collateral, or are unsecured. At March 31, ~~2022,~~2023, we had approximately ~~2.29~~2.30 million personal loans totaling ~~$18.9~~$19.7 billion of net finance receivables, of which 52% were secured by titled property, compared to approximately ~~2.34~~2.33 million personal loans totaling ~~$19.2~~$19.9 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~~2022. We also service personal loans for our whole loan sale partners.

•Credit Cards — ~~In the third quarter of 2021, we began offering~~BrightWay and BrightWay+ credit cards originate through a third-party bank partner from which we purchase the receivable balances. The credit cards are offered ~~through~~across our branch network, through direct mail, ~~marketing,~~ and ~~direct-to-consumer via~~through our digital affiliates. Credit cards are open-ended, revolving, with a fixed rate, and are unsecured. At March 31, ~~2022,~~2023, we had approximately 74161 thousand open credit card customer accounts, totaling ~~$50~~$122 million of net finance receivables, compared to approximately 66135 thousand open credit card customer accounts, totaling ~~$25~~$107 million of net finance receivables at December 31, ~~2021.~~2022.

•Optional Insurance Products — We offer our customers optional credit insurance products (life, disability, and involuntary unemployment insurance) and optional non-credit insurance products through both our branch network and our ~~centralized~~central 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. Our real estate loans held for sale are reported in “Other assets” of our consolidated balance sheets.

~~Table of Contents~~

OUR SEGMENT

At March 31, ~~2022,~~2023, Consumer and Insurance (“C&I”) is our only reportable segment, which includes personal loans, credit cards, and optional insurance products. At March 31, ~~2022,~~2023, we managed a combined total of ~~2.42~~2.56 million customer accounts and ~~$19.5~~$20.6 billion of managed receivables, compared to ~~2.45~~2.56 million customer accounts and ~~$19.6~~$20.8 billion of managed receivables at December 31, ~~2021.~~2022.

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.~~loans held for sale and reported in Other assets in our condensed consolidated balance sheets. 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

Stock Repurchase Program

On February 2, 2022, the Board authorized a ~~new~~ stock repurchase program, which allows us to repurchase up to $1.0 billion of 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 previous share repurchase program.~~ As of March 31, ~~2022,~~2023, we had ~~$918~~$698 million of authorized share repurchase capacity, excluding fees and commissions, remaining under the program.

See “Liquidity and Capital Resources” under Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 2. Unregistered Sales of Equity Securities and Use of Proceeds in Part II of this report for further information on our shares repurchased.

~~Social~~ Securitization ~~Transaction~~Transactions Completed - ~~OMFIT 2022-S1~~ODART 2023-1

~~As part~~For information regarding the issuances of our ~~continued commitment to improve the financial well-being~~secured debt, see “Liquidity and Capital Resources” under Management’s Discussion and Analysis of ~~hardworking Americans, on April 27, 2022, OMFC completed its first social securitization under Rule 144A. We issued $600 million principal amount~~Financial Condition and Results of ~~notes backed by personal loans made to the target population identified~~Operations 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. 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 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 payable.

~~Notice of 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 premiums and recognize $26 million net loss on repurchases and repayments of debt in the second quarter of 2022.this report.

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.

~~Table of Contents~~

~~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 states and regions that we serve. Governmental authorities continue to take steps to combat the spread of COVID-19, including the ongoing distribution of vaccines. Throughout the pandemic, we have maintained our focus on assisting and supporting our customers, 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 platform. This hybrid capability has 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, 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 monitoring the current ~~macroeconomic developments, including recent geopolitical actions outside of the U.S.,~~macro environment and remain prepared for any ~~additional opportunities or challenges~~developments that may impact our ~~business and industry.~~business. Our financial condition and results of operations could be affected by ~~the~~ macroeconomic ~~environment~~conditions, including changes in unemployment, inflation, interest rates, and other macroeconomic conditions. There remains uncertainty regarding the effects of additional variants of COVID-19, recent geopolitical events, and their impacts on economic markets. In our view, current credit performance trends remain favorable, but delinquency rates have normalized to pre-pandemic levels.consumer confidence. We will continue to incorporate updates ~~as necessary,~~ to our macroeconomic assumptions, as necessary, 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~~remains focused on maintaining a ~~solid~~strong balance sheet with ~~an adequate~~a long liquidity runway and adequate capital ~~coverage, upholding~~and maintaining a conservative and disciplined underwriting ~~model, and building strong relationships with our customers to ensure that we are serving them well.~~model. We believe we are well positioned to serve our customers, invest in our business, and drive long-term growth to create value for our stockholders as we navigate ~~the evolving~~an ever-evolving economic, social, political, and regulatory 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 March 31,							At or for the Three Months Ended March 31,
(dollars in millions, except per share amounts)	(dollars in millions, except per share amounts)	2022			2021			(dollars in millions, except per share amounts)	2023			2022

Interest income	Interest income	$	1,089		$	1,060		Interest income	$	1,094		$	1,089
Interest expense	Interest expense	219			235			Interest expense	239			219
Provision for finance receivable losses	Provision for finance receivable losses	238			(2)			Provision for finance receivable losses	385			238
Net interest income after provision for finance receivable losses	Net interest income after provision for finance receivable losses	632			827			Net interest income after provision for finance receivable losses	470			632

Other revenues	Other revenues	162			91			Other revenues	177			162
Other expenses	Other expenses	398			372			Other expenses	412			395
Income before income taxes	Income before income taxes	396			546			Income before income taxes	235			399
Income taxes	Income taxes	95			133			Income taxes	56			96
Net income	Net income	$	301		$	413		Net income	$	179		$	303

Share Data:	Share Data:							Share Data:

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

Diluted	Diluted	$	2.36		$	3.06		Diluted	$	1.48		$	2.38

Selected Financial Statistics (a)
Selected Financial Statistics *								Selected Financial Statistics *
Total finance receivables:	Total finance receivables:							Total finance receivables:
Net finance receivables	Net finance receivables	$	18,979		$	17,564		Net finance receivables	$	19,809		$	18,979
Average net receivables	Average net receivables	$	19,083		$	17,824		Average net receivables	$	19,881		$	19,083
Yield		23.12		%	24.08		%

Gross charge-off ratio	Gross charge-off ratio	6.98		%	5.81		%	Gross charge-off ratio	9.21		%	6.98		%
Recovery ratio	Recovery ratio	(1.42)		%	(1.14)		%	Recovery ratio	(1.41)		%	(1.42)		%
Net charge-off ratio	Net charge-off ratio	5.57		%	4.67		%	Net charge-off ratio	7.80		%	5.57		%
30-89 Delinquency ratio		2.26		%	1.57		%

Personal loans:	Personal loans:							Personal loans:

Net finance receivables	Net finance receivables	$	18,929		$	17,564		Net finance receivables	$	19,687		$	18,929
Yield								Yield	22.27		%	23.12		%
Origination volume	Origination volume	$	2,959		$	2,284		Origination volume	$	2,817		$	2,959
Number of accounts	Number of accounts	2,288,999			2,229,609			Number of accounts	2,303,278			2,288,999
Number of accounts originated	Number of accounts originated	286,391			225,102			Number of accounts originated	270,672			286,391
Credit cards (b):
Net charge-off ratio								Net charge-off ratio	7.72		%	5.58		%
30-89 Delinquency ratio								30-89 Delinquency ratio	2.58		%	2.25		%
Credit cards:								Credit cards:
Net finance receivables	Net finance receivables	$	50		$	—		Net finance receivables	$	122		$	50

Purchase volume	Purchase volume	$	45		$	—		Purchase volume	$	53		$	45
Number of open accounts	Number of open accounts	73,958			—			Number of open accounts	160,508			73,958

Debt balances:	Debt balances:							Debt balances:
Long-term debt balance	Long-term debt balance	$	17,560		$	16,789		Long-term debt balance	$	18,206		$	17,560
Average daily debt balance	Average daily debt balance	$	17,553		$	17,035		Average daily debt balance	$	18,355		$	17,553

~~(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 Months Ended March 31, ~~2022~~2023 and ~~2021~~2022

Interest income increased ~~$29~~$5 million or 3%less than 1% for the three months ended March 31, ~~2022~~2023 when compared to the same period in ~~2021~~2022 primarily due to growth in ~~our loan portfolio,~~average net receivables, partially offset by lower yield.

Interest expense ~~decreased $16~~increased $20 million or 7%9% for the three months ended March 31, ~~2022~~2023 when compared to the same period in ~~2021~~2022 primarily due to a ~~lower~~higher average cost of funds ~~partially offset by~~and 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 increased ~~$240~~$147 million or 62% for the three months ended March 31, ~~2022~~2023 when compared to the same period in ~~2021~~2022 primarily driven by higher net charge-offs and a ~~significant release~~modest increase in ~~our~~the allowance ~~reserve~~for finance receivable losses in the current quarter compared to a reduction in allowance in the prior year ~~period and an increase in our current period charge-offs related to normalization of delinquency rates to pre-pandemic levels.~~period.

Other revenues increased ~~$71~~$15 million or ~~77%~~10% for the three months ended March 31, ~~2022~~2023 when compared to the same period in ~~2021~~2022 primarily due to ~~a net loss on the repurchase and repayment of debt~~an increase in investment revenue due to higher market rates compared to the prior year ~~period and an increase in gains on the sales of finance receivables and an increase in servicing revenue associated with the whole loan sale program as a result of more loans sold in the current~~ period.

Other expenses increased ~~$26~~$17 million or 7%4% for the three months ended March 31, ~~2022~~2023 when compared to the same period in ~~2021~~2022 primarily due to an increase in salaries and benefits ~~due to an increase~~expense and increases in ~~headcount as we continue to invest~~general operating expenses driven by the continued investment in our ~~business, and an increase in insurance policy and benefits claims expense resulting from lower than expected involuntary unemployment insurance claims in the prior year period.~~business.

Income taxes totaled ~~$95~~$56 million for the three months ended March 31, ~~2022~~2023 compared to ~~$133~~$96 million in the same period in ~~2021~~2022 due to higher pre-tax income in the prior year period. For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, the effective tax rates were ~~24.1%~~24.0% and ~~24.4%~~24.1%, respectively. The effective tax rates differed from the federal statutory rate of 21% primarily due to the effect of state income taxes. ~~See Note 11 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information on effective tax rates.~~

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NON-GAAP FINANCIAL MEASURES

Management uses C&I adjusted pretax income (loss), a non-GAAP financial measure, as a key performance measure of our segment. C&I adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes the direct costs associated with COVID-19 and the expense associated with the ~~net loss resulting from repurchases and repayments of debt, the~~ cash-settled stock-based ~~awards, and direct costs associated with COVID-19.~~awards. 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~~which still ~~considering~~considers 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 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. 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 before income tax expense on a Segment Accounting Basis to C&I adjusted pretax income (non-GAAP) and C&I pretax capital generation (non-GAAP) were as follows:


		Three Months Ended March 31,				Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2022		2021			(dollars in millions)	2023		2022

Consumer and Insurance	Consumer and Insurance						Consumer and Insurance
Income before income taxes - Segment Accounting Basis	Income before income taxes - Segment Accounting Basis	$	396	$	567		Income before income taxes - Segment Accounting Basis	$	236	$	399
Adjustments:	Adjustments:						Adjustments:
Net loss on repurchases and repayments of debt		—		38

Direct costs associated with COVID-19							Direct costs associated with COVID-19	—		1
Cash-settled stock-based awards	Cash-settled stock-based awards	1		—			Cash-settled stock-based awards	—		1
Direct costs associated with COVID-19		1		2

Adjusted pretax income (non-GAAP)	Adjusted pretax income (non-GAAP)	$	398	$	607		Adjusted pretax income (non-GAAP)	236		401

Provision for finance receivable losses	Provision for finance receivable losses	$	237	$	(3)		Provision for finance receivable losses	385		237
Net charge-offs	Net charge-offs	(262)		(205)			Net charge-offs	(382)		(262)
Pretax capital generation (non-GAAP)	Pretax capital generation (non-GAAP)	$	373	$	399		Pretax capital generation (non-GAAP)	$	239	$	376

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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 17 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in 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 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 March 31,							At or for the Three Months Ended March 31,
(dollars in millions)	(dollars in millions)	2022			2021			(dollars in millions)	2023			2022

Interest income	Interest income	$	1,087		$	1,057		Interest income	$	1,092		$	1,087
Interest expense	Interest expense	217			233			Interest expense	238			217
Provision for finance receivable losses	Provision for finance receivable losses	237			(3)			Provision for finance receivable losses	385			237
Net interest income after provision for finance receivable losses	Net interest income after provision for finance receivable losses	633			827			Net interest income after provision for finance receivable losses	469			633
Other revenues	Other revenues	158			136			Other revenues	176			158
Other expenses	Other expenses	393			356			Other expenses	409			390
Adjusted pretax income (non-GAAP)	Adjusted pretax income (non-GAAP)	$	398		$	607		Adjusted pretax income (non-GAAP)	$	236		$	401

Selected Financial Statistics (a)
Selected Financial Statistics *								Selected Financial Statistics *
Total finance receivables:	Total finance receivables:							Total finance receivables:
Net finance receivables	Net finance receivables	$	18,981		$	17,569		Net finance receivables	$	19,810		$	18,981

Average net receivables	Average net receivables	$	19,086		$	17,830		Average net receivables	$	19,882		$	19,086
Yield		23.11		%	24.04		%

Gross charge-off ratio	Gross charge-off ratio	6.98		%	5.81		%	Gross charge-off ratio	9.21		%	6.98		%
Recovery ratio	Recovery ratio	(1.42)		%	(1.14)		%	Recovery ratio	(1.41)		%	(1.42)		%
Net charge-off ratio	Net charge-off ratio	5.57		%	4.67		%	Net charge-off ratio	7.80		%	5.57		%
30-89 Delinquency ratio		2.26		%	1.57		%

Personal loans:	Personal loans:							Personal loans:
Net finance receivables	Net finance receivables	$	18,931		$	17,569		Net finance receivables	$	19,688		$	18,931
Yield								Yield	22.26		%	23.11		%
Origination volume	Origination volume	$	2,959		$	2,284		Origination volume	$	2,817		$	2,959
Number of accounts	Number of accounts	2,288,999			2,229,609			Number of accounts	2,303,278			2,288,999
Number of accounts originated	Number of accounts originated	286,391			225,102			Number of accounts originated	270,672			286,391
Credit cards (b):
Net charge-off ratio								Net charge-off ratio	7.72		%	5.58		%
30-89 Delinquency ratio								30-89 Delinquency ratio	2.58		%	2.25		%
Credit cards:								Credit cards:
Net finance receivables	Net finance receivables	$	50		$	—		Net finance receivables	$	122		$	50

Purchase volume	Purchase volume	$	45		$	—		Purchase volume	$	53		$	45
Number of open accounts	Number of open accounts	73,958			—			Number of open accounts	160,508			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 Months Ended March 31, ~~2022~~2023 and ~~2021~~2022

Interest income increased ~~$30~~$5 million or 3%less than 1% for the three months ended March 31, ~~2022~~2023 when compared to the same period in ~~2021~~2022 primarily due to growth in ~~our loan portfolio,~~average net receivables, partially offset by lower yield.

Interest expense ~~decreased $16~~increased $21 million or 7%9% for the three months ended March 31, ~~2022~~2023 when compared to the same period in ~~2021~~2022 primarily due to a ~~lower~~higher average cost of funds ~~partially offset by~~and an increase in average debt.

Provision for finance receivable losses increased ~~$240~~$148 million or 62% for the three months ended March 31, ~~2022~~2023 when compared to the same period in ~~2021~~2022 primarily driven by higher net charge-offs and a ~~significant release~~modest increase in ~~our~~the allowance ~~reserve~~for finance receivable losses in the current quarter compared to a reduction in allowance in the prior year ~~period and an increase in our current period charge-offs related to normalization of delinquency rates to pre-pandemic levels.~~period.

Other revenues increased ~~$22~~$18 million or ~~17%~~11% for the three months ended March 31, ~~2022~~2023 when compared to the same period in ~~2021~~2022 primarily due to an increase in ~~gains on~~investment revenue due to higher market rates compared to the ~~sales of finance receivables and an increase in servicing revenue associated with the whole loan sale program as a result of more loans sold in the current~~prior year period.

Other expenses increased ~~$37~~$19 million or ~~10%~~5% for the three months ended March 31, ~~2022~~2023 when compared to the same period in ~~2021~~2022 primarily due to an increase in salaries and benefits ~~due to an increase~~expense and increases in ~~headcount as we continue to invest~~general operating expenses driven by the continued investment in our ~~business, and an increase in insurance policy and benefits claims expense resulting from lower than expected involuntary unemployment insurance claims in the prior year period.~~

business.

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Credit Quality

FINANCE RECEIVABLES

Our net finance receivables, consisting of personal loans and credit cards, were ~~$19.0~~$19.8 billion at March 31, ~~2022~~2023 and ~~$19.2~~$20.0 billion at December 31, 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.2022. 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 closely with customers as necessary and offer a variety of borrower assistance programs to help ~~customers continue to make payments.~~support our customers.

DELINQUENCY

We monitor delinquency trends to evaluate the risk of future credit losses and employ advanced analytical tools to manage ~~our exposure.~~performance. 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 personal loans are contractually 60 days past due, we consider these accounts to be at an increased risk for loss and move collection of these accounts ~~is managed by~~to our ~~centralized~~central collection operations. Use of our ~~centralized~~central operations teams for managing ~~late-stage~~late stage delinquency allows us to apply more advanced collection ~~technologies~~techniques and tools to drive credit performance and ~~drives operating efficiencies in servicing.~~ operational efficiencies.

We consider our personal loans to be nonperforming at 90 days contractually past due, at which point we stop accruing finance charges and reverse finance charges previously accrued.

We For credit cards, 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 on a Segment Accounting Basis was as follows:


		Consumer and Insurance						Segment to GAAP Adjustment		GAAP Basis				Consumer and Insurance
(dollars in millions)	(dollars in millions)	Personal Loans			Credit Cards								(dollars in millions)	Personal Loans			Credit Cards
March 31, 2022
March 31, 2023													March 31, 2023
Current	Current	$	18,086		$	47		$	(2)	$	18,131		Current	$	18,646		$	106
30-59 days past due		246			2			—		248
60-89 days past due		181			1			—		182

30-89 days past due													30-89 days past due	508			7
90+ days past due													90+ days past due	534			9
Total net finance receivables													Total net finance receivables	$	19,688		$	122

Delinquency ratio													Delinquency ratio
30-89 days past due													30-89 days past due	2.58		%	5.58		%
30+ days past due													30+ days past due	5.29		%	12.57		%

90+ days past due													90+ days past due	2.72		%	7.00		%

December 31, 2022													December 31, 2022
Current													Current	$	18,726		$	93

30-89 days past due													30-89 days past due	610			6

90+ days past due	90+ days past due	418			—			—		418			90+ days past due	544			8
Total net finance receivables	Total net finance receivables	$	18,931		$	50		$	(2)	$	18,979		Total net finance receivables	$	19,880		$	107

Delinquency ratio	Delinquency ratio												Delinquency ratio
30-89 days past due	30-89 days past due	2.25		%	5.32		%	*		2.26		%	30-89 days past due	3.07		%	5.90		%
30+ days past due	30+ days past due	4.46		%	5.97		%	*		4.47		%	30+ days past due	5.80		%	13.08		%
60+ days past due		3.17		%	2.47		%	*		3.17		%
90+ days past due		2.21		%	0.66		%	*		2.21		%

December 31, 2021
Current		$	18,340		$	25		$	(3)	$	18,362
30-59 days past due		282			—			—		282
60-89 days past due		185			—			—		185

90+ days past due	90+ days past due	383			—			—		383			90+ days past due	2.74		%	7.18		%
Total net finance receivables		$	19,190		$	25		$	(3)	$	19,212

Delinquency ratio
30-89 days past due		2.43		%	0.08		%	*		2.43		%
30+ days past due		4.43		%	0.08		%	*		4.42		%
60+ days past due		2.96		%	—		%	*		2.96		%
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~~expected 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~~uses recent macroeconomic forecasts, which ~~incorporated the overall unemployment rate.~~include forecasts for unemployment. We leverage projections from various industry leading providers. We also ~~considered~~consider inflationary pressures, ~~supply chain concerns, geopolitical risks, along with persistent labor supply shortages. Our forecast leveraged~~consumer confidence levels, and interest rate increases that may continue to impact the economic ~~projections from industry leading forecast providers.~~outlook. At March 31, ~~2022,~~2023, 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 our allowance for finance receivable losses were as follows:


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

Three Months Ended March 31, 2023													Three Months Ended March 31, 2023
Balance at beginning of period													Balance at beginning of period	$	2,294		$	21		$	(4)	$	2,311
Impact of adoption of ASU 2022-02 (a)													Impact of adoption of ASU 2022-02 (a)	(20)			—			4		(16)
Provision for finance receivable losses													Provision for finance receivable losses	377			8			—		385
Charge-offs													Charge-offs	(445)			(6)			—		(451)
Recoveries													Recoveries	69			—			—		69

Balance at end of period													Balance at end of period	$	2,275		$	23		$	—	$	2,298

Allowance ratio													Allowance ratio	11.55		%	19.25		%	(b)		11.60		%

Three Months Ended March 31, 2022	Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
Balance at beginning of period	Balance at beginning of period	$	2,097		$	5		$	(7)	$	2,095		Balance at beginning of period	$	2,097		$	5		$	(7)	$	2,095
Provision for finance receivable losses	Provision for finance receivable losses	232			5			1		238			Provision for finance receivable losses	232			5			1		238
Charge-offs	Charge-offs	(329)			—			—		(329)			Charge-offs	(329)			—			—		(329)
Recoveries	Recoveries	67			—			—		67			Recoveries	67			—			—		67
Balance at end of period		$	2,067		$	10		$	(6)	$	2,071

Allowance ratio		10.92		%	19.99		%	(a)		10.91		%

Three Months Ended March 31, 2021 (b)
Balance at beginning of period		$	2,283		$	—		$	(14)	$	2,269
Provision for finance receivable losses		(3)			—			1		(2)
Charge-offs		(255)			—			—		(255)
Recoveries		50			—			—		50
Balance at end of period	Balance at end of period	$	2,075		$	—		$	(13)	$	2,062		Balance at end of period	$	2,067		$	10		$	(6)	$	2,071

Allowance ratio	Allowance ratio	11.81		%	—		%	(a)		11.74		%	Allowance ratio	10.92		%	19.99		%	(b)		10.91		%

(a) As a result of the adoption of ASU 2022-02, we recorded a one-time adjustment to the allowance for finance receivable losses. See Notes 2, 3, and 4 of the Notes to the Condensed Consolidated Financial Statements for additional information on the adoption of ASU 2022-02 included in this report.

~~(a)~~(b) Not applicable.

~~(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.~~

The current delinquency status of our finance receivable portfolio, inclusive of recent borrower performance, volume of our ~~TDR~~modified finance receivable 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 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~~increased from the prior year period primarily due to ~~improved unemployment~~an increase in delinquent personal loans 30 days or more past due and a weaker macroeconomic 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.

~~Table of Contents~~

~~TDR FINANCE RECEIVABLES~~

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

~~Information regarding TDR net finance receivables for personal loans are as follows:~~
(dollars in millions) Personal
Loans Segment to
GAAP
Adjustment GAAP
Basis
March 31, 2022
TDR net finance receivables $ 674 $ (18) $ 656
Allowance for TDR finance receivable losses 271 (8) 263
December 31, 2021
TDR net finance receivables $ 671 $ (21) $ 650
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.~~

~~Table of Contents~~

~~DISTRIBUTION OF FINANCE RECEIVABLES BY FICO SCORE~~

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

•~~Prime: FICO score of 660 or higher~~

•~~Near-prime: FICO score of 620-659~~

•~~Sub-prime: FICO score of 619 or below~~

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

The following table reflects our 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) 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 December 31, 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 three months ended March 31, ~~2022,~~2023, OMH generated net income of ~~$301~~$179 million. OMH’s net cash inflow from operating and investing activities totaled ~~$602~~$358 million for the three months ended March 31, ~~2022.~~2023. At March 31, ~~2022,~~2023, our scheduled principal and interest payments for the remainder of ~~2022 totaled $357 million, and there are no scheduled principal payments for the remainder of 2022~~2023 on our existing debt (excluding securitizations). totaled $508 million. As of March 31, ~~2022,~~2023, we had ~~$10.2~~$8.5 billion of unencumbered 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.~~due.

OMFC’s Unsecured Corporate Revolver

At March 31, ~~2022,~~2023, the borrowing capacity of our corporate revolver was ~~$1.0~~$1.25 billion, and no amounts were drawn.

~~OMFC’s Notice of Redemption of Unsecured Debt~~

Securitizations and Borrowings from Revolving Conduit Facilities

During the three months ended March 31, ~~2022,~~2023, we ~~did not terminate, cancel, or enter~~completed one personal loan securitization (ODART 2023-1, see “Securitized Borrowings” below) and redeemed no personal loan securitizations. During the three months ended March 31, 2023, we entered into ~~any~~no new ~~securitizations or~~revolving conduit facilities. At March 31, ~~2022, an aggregate of $650~~2023, $100 million was drawn under our revolving conduit facilities, and the remaining borrowing capacity was ~~$5.4~~$6.1 billion. At March 31, ~~2022,~~2023, we had ~~$8.5~~$11.0 billion of gross finance receivables pledged as collateral for our securitizations, revolving conduit facilities, and ~~conduit facilities.~~

~~Social Securitization Transaction - OMFIT 2022-S1~~

As part of our 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 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.

Private Secured Term Funding

~~On April 25, 2022, OMFC entered into a~~At March 31, 2023, an aggregate amount of $350 million was outstanding under the private secured term funding collateralized by our personal loans. No principal payments are required to be made ~~during the first three years,~~until after April 25, 2025, followed by a subsequent one-year amortization period at the expiration of which the outstanding principal amount is due and payable.

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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~~2023

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 March 31, ~~2022,~~2023, OMH repurchased ~~2,282,552~~683,384 shares of its common stock through its stock repurchase program for an aggregate total of ~~$110~~$27 million, including commissions and fees. As of March 31, ~~2022,~~2023, OMH held a total of ~~8,981,004~~14,475,790 shares of treasury stock. To provide funding for the OMH stock ~~repurchase,~~repurchases, the OMFC Board of Directors authorized dividend payments in the amount of ~~$100~~$30 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.

Cash Dividend to OMH's Common Stockholders

As of March 31, ~~2022,~~2023, the dividend declarations for the current year by the Board were as follows:


Declaration Date	Declaration Date	Record Date	Payment Date	Dividend Per Share		Amount Paid		Declaration Date	Record Date	Payment Date	Dividend Per Share		Amount Paid
						(in millions)								(in millions)
February 2, 2022		February 14, 2022	February 18, 2022	$	0.95	$	121
February 7, 2023								February 7, 2023	February 17, 2023	February 24, 2023	$	1.00		$	121

Total	Total			$	0.95	$	121	Total			$	1.00		$	121

To provide funding for the dividend, OMFC paid dividends of ~~$121~~$119 million to OMH during the three months ended March 31, ~~2022.~~2023.

On April ~~28, 2022,~~25, 2023, OMH declared a dividend of ~~$0.95~~$1.00 per share payable on May ~~13, 2022~~12, 2023 to record holders of OMH's common stock as of the close of business on May ~~9, 2022.~~5, 2023. To provide funding for the OMH dividend, the OMFC Board of Directors authorized a dividend in the amount of up to ~~$120~~$121 million payable on or after May ~~10, 2022.~~8, 2023.

While OMH intends to pay its minimum quarterly dividend, currently ~~$0.95~~$1.00 per share, for the foreseeable future, all subsequent dividends will be reviewed and declared at the discretion of the 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 deems relevant. ~~OMH's~~OMH’s dividend payments may change from time to time, and the 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 March 31, ~~2022,~~2023, we have whole loan sale flow agreements with third parties, with remaining terms of less than ~~two years,~~one year, in which we agreed to sell a combined total of ~~$180~~$135 million gross receivables per quarter of newly originated unsecured personal loans along with any associated accrued interest. ~~Our first sale was executed in the first quarter~~We sold $180 million of ~~2021. During~~gross finance receivables during the three months ended March 31, ~~2022~~2023 and ~~2021, we sold $180 million and $45 million of gross finance receivables, respectively. For further information on the whole loan sale transactions, see~~2022. See Note 3 of the Notes to the Condensed Consolidated Financial Statements included in this ~~report.~~report for further information on the whole loan sale transactions.

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LIQUIDITY

OMH's Operating Activities

Net cash provided by operations of $562 million for the three months ended March 31, 2023 reflected net income of $179 million, the impact of non-cash items, and an unfavorable change in working capital of $66 million. Net cash provided by operations of $552 million for the three months ended March 31, 2022 reflected net income of ~~$301~~$303 million, the impact of non-cash items, and an unfavorable change in working capital of $62 million. Net cash provided by operations of $556 million for the three months ended March 31, 2021 reflected net income of $413 million, the impact of non-cash items, and an unfavorable change in working capital of $23$65 million.

OMH's Investing Activities

Net cash used for investing activities of $204 million for the three months ended March 31, 2023 was primarily due to net principal originations and purchases of finance receivables, partially offset by the proceeds from sales of finance receivables. Net cash provided by investing activities of $50 million for the three months ended 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 collections of finance receivables, calls, sales, and maturities of available-for-sale and other securities, partially offset by purchases of available-for-sale and other securities.

OMH's Financing Activities

Net cash used for financing activities of $242 million for the three months ended March 31, 2023 was primarily due to repayments and repurchases of long-term debt, cash dividends paid, and the cash paid to repurchase common stock, partially offset by the issuance and borrowings of long-term debt. Net cash used for financing activities of $448 million for the three months ended March 31, 2022 was primarily due to debt repayments, cash dividends paid, and the cash paid to repurchase common stock during the period, partially offset by ~~proceeds from~~the issuance and borrowings of long-term debt. ~~Net cash used for financing activities of $1.6 billion for the three months ended March 31, 2021 was primarily due to debt repayments and cash dividends paid.~~

OMH's Cash and Investments

At March 31, ~~2022,~~2023, we had ~~$640~~$544 million of cash and cash equivalents, which included ~~$265~~$177 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that is unavailable for general corporate purposes.

At March 31, ~~2022,~~2023, we had $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, rising interest rates, 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.

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OUR INSURANCE SUBSIDIARIES

Our insurance subsidiaries are subject to state regulations that limit their ability to pay dividends. AHL declared an ordinary dividend to OneMain Financial Holdings, LLC of $80 million and paid $40 million during the three months ended March 31, 2023. Triton did not declare or pay any dividends during the three months ended March 31, ~~2022~~2023. AHL and ~~2021.~~Triton did not pay dividends during the three months ended March 31, 2022. See Note 10 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 ~~2021.~~2022.

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OUR DEBT AGREEMENTS

The debt agreements which OMFC and its subsidiaries are a party to include customary terms and conditions, including covenants and representations and warranties. See Note 8 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, as amended. As of March 31, ~~2022,~~2023, 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

OMFIT 2015-3		$	293	$	329	$	59	$	84	6.30	%	5 years
OMFIT 2016-3		350		397		110		193		5.27	%	5 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		388		3.87	%	5 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		358		462		4.48	%	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	OMFIT 2021-1	850		904		850		904		1.57	%	5 years	OMFIT 2021-1	850		904		850		904		2.63	%	5 years

ODART 2018-1		947		964		196		217		3.98	%	2 years
OMFIT 2022-S1													OMFIT 2022-S1	600		652		600		652		4.31	%	3 years
OMFIT 2022-2													OMFIT 2022-2	1,000		1,099		1,000		1,099		5.17	%	2 years
OMFIT 2022-3													OMFIT 2022-3	979		1,090		796		1,090		6.00	%	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	ODART 2021-1	1,000		1,053		1,000		1,053		0.98	%	2 years
ODART 2022-1													ODART 2022-1	600		632		600		632		5.00	%	2 years
ODART 2023-1 (c)													ODART 2023-1 (c)	750		792		750		792		5.63	%	3 years
Total securitizations	Total securitizations	$	9,319	$	9,932	$	7,184	$	8,033				Total securitizations	$	10,394	$	11,203	$	9,654	$	10,762

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

(b) Inclusive of in-process replenishments of collateral for securitized borrowings in a revolving status as of March 31, ~~2022.~~2023.

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Revolving Conduit Facilities

In addition to the structured financings, we had access to 1415 revolving conduit facilities with a total borrowing capacity of ~~$6.0~~$6.2 billion as of March 31, ~~2022:~~2023:


(dollars in millions)	(dollars in millions)	Advance Maximum Balance		Amount Drawn		(dollars in millions)	Advance Maximum Balance		Amount Drawn

OneMain Financial Funding VII, LLC	OneMain Financial Funding VII, LLC	$	600	$	—	OneMain Financial Funding VII, LLC	$	600	$	—
OneMain Financial Funding IX, LLC	OneMain Financial Funding IX, LLC	600		—		OneMain Financial Funding IX, LLC	600		—
Mystic River Funding, LLC		600		—
OneMain Financial Auto Funding I, LLC	OneMain Financial Auto Funding I, LLC	550		—		OneMain Financial Auto Funding I, LLC	550		—
Seine River Funding, LLC	Seine River Funding, LLC	550		150		Seine River Funding, LLC	550		—
Chicago River Funding, LLC		500		—
Hudson River Funding, LLC	Hudson River Funding, LLC	500		—		Hudson River Funding, LLC	500		—
OneMain Financial Funding VIII, LLC	OneMain Financial Funding VIII, LLC	400		—		OneMain Financial Funding VIII, LLC	400		—
River Thames Funding, LLC						River Thames Funding, LLC	400		—
OneMain Financial Funding X, LLC						OneMain Financial Funding X, LLC	400		—
Chicago River Funding, LLC						Chicago River Funding, LLC	375		—
Mystic River Funding, LLC						Mystic River Funding, LLC	350		—
Thayer Brook Funding, LLC	Thayer Brook Funding, LLC	350		—		Thayer Brook Funding, LLC	350		—
Columbia River Funding, LLC	Columbia River Funding, LLC	350		—		Columbia River Funding, LLC	350		100
Hubbard River Funding, LLC	Hubbard River Funding, LLC	250		—		Hubbard River Funding, LLC	250		—
New River Funding Trust	New River Funding Trust	250		—		New River Funding Trust	250		—
River Thames Funding, LLC		250		250
St. Lawrence River Funding, LLC	St. Lawrence River Funding, LLC	250		250		St. Lawrence River Funding, LLC	250		—
Total	Total	$	6,000	$	650	Total	$	6,175	$	100

OFF-BALANCE SHEET ARRANGEMENTS

We have no material off-balance sheet arrangements as defined by SEC rules, and we had no material off-balance sheet exposure to losses associated with unconsolidated VIEs at March 31, ~~2022~~2023 or December 31, ~~2021.~~2022.

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Critical Accounting Policies and Estimates

We describe our significant accounting policies used in the preparation of our condensed consolidated financial statements in Note 2 of the Notes to the Condensed Consolidated Financial Statements in Part II - Item 8 included in our Annual Report. We consider the ~~following policies~~allowance for finance receivable losses to be ~~our most~~a critical accounting ~~policies~~policy because ~~they involve~~it involves critical accounting estimates and a significant degree of management ~~judgment:~~judgment.

•~~allowance for finance receivable losses; and~~

•During the three months ended March 31, 2023, we removed TDR finance ~~receivables.~~receivables as a critical accounting policy and estimate as ASU 2022-02 superseded the accounting for troubled debt restructurings by creditors as of January 1, 2023.

There have been no other material changes to our critical accounting policies or to our methodologies for deriving critical accounting estimates during the three months ended March 31, ~~2022.~~2023.


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.


Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes to our market risk previously disclosed in Part II - Item 7A included in our Annual Report.

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Item 4. Controls and Procedures.

CONTROLS AND PROCEDURES OF ONEMAIN HOLDINGS, INC.

Evaluation of Disclosure Controls and Procedures

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

As of March 31, ~~2022,~~2023, OMH carried out an evaluation of the effectiveness of its disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This evaluation was conducted under the supervision of, and with the participation of OMH’s management, including the Chief Executive Officer and the Chief Financial Officer. Based on the evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that OMH's disclosure controls and procedures were effective as of March 31, ~~2022~~2023 to provide the reasonable assurance described above.

Changes in Internal Control over Financial Reporting

There were no changes in OMH's internal control over financial reporting during the first quarter of ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, OMH's internal control over financial reporting.

CONTROLS AND PROCEDURES OF ONEMAIN FINANCE CORPORATION

Evaluation of Disclosure Controls and Procedures

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

As of March 31, ~~2022,~~2023, OMFC carried out an evaluation of the effectiveness of its disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This evaluation was conducted under the supervision of, and with the participation of OMFC’s management, including the Chief Executive Officer and the Chief Financial Officer. Based on the evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that OMFC's disclosure controls and procedures were effective as of March 31, ~~2022~~2023 to provide the reasonable assurance described above.

Changes in Internal Control over Financial Reporting

There were no changes in OMFC's internal control over financial reporting during the first quarter of ~~2022~~2023 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 March 31, ~~2022,~~2023, based on settlement date:


Period	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)		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	January 1 - January 31	477,106	$	52.07	477,106	$	60,729,860	January 1 - January 31	265,224	$	37.70	265,224	$	715,533,796
February 1 - February 28	February 1 - February 28	475,567	52.13		475,567	978,925,463		February 1 - February 28	214,367	44.31		214,367	706,034,301
March 1 - March 31	March 1 - March 31	1,329,879	45.57		1,329,879	918,327,499		March 1 - March 31	203,793	39.26		203,793	698,033,606
Total	Total	2,282,552	$	48.30	2,282,552			Total	683,384	$	40.24	683,384

(a) The Board 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~~which 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







































3.1						Amended and Restated Bylaws of OneMain Holdings, Inc. (formerly Springleaf Holdings, Inc.). Incorporated by reference to Exhibit 3.1 to OMH’s Current Report on Form 8-K filed on February 3, 2023.
31.1						Rule 13a-14(a)/15d-14(a) Certifications of ~~the President and Chief~~ Principal Executive Officer of OneMain Holdings, Inc.

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

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

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

32.1						Section 1350 Certifications of OneMain Holdings, Inc.

32.2						Section 1350 Certifications of OneMain Finance Corporation

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

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

* Management contract or compensatory plan or arrangement.

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OMH Signature

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

ONEMAIN HOLDINGS, INC.

(Registrant)

Date:

April ~~29, 2022~~28, 2023

By:

/s/ Micah R. Conrad

Micah R. Conrad

Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)

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OMFC Signature

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

ONEMAIN FINANCE CORPORATION

(Registrant)

Date:

April ~~29, 2022~~28, 2023

By:

/s/ ~~Micah R. Conrad~~Matthew W. Vaughan

~~Micah R. Conrad~~Matthew W. Vaughan

~~Executive~~ Vice President - Senior Managing Director and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)

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Topic						Page

Forward-Looking Statements						3744
Overview						3845
Recent Developments and Outlook						3946
Results of Operations						4147
Segment Results						4450
Credit Quality						4652
Liquidity and Capital Resources						5154

Critical Accounting Policies and Estimates						5559
Recent Accounting Pronouncements						5559
Seasonality						5659


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

March 31, 2022
TDR net finance receivables	$	674	$	(18)	$	656
Allowance for TDR finance receivable losses	271		(8)		263

December 31, 2021
TDR net finance receivables	$	671	$	(21)	$	650
Allowance for TDR finance receivable losses	279		(9)		270