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OneMain Financial
OMF
#2666
Rank
$6.70 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$56.91
Share price
-0.35%
Change (1 day)
7.24%
Change (1 year)
๐Ÿ’ณ Financial services
Categories
  1. OneMain Financial
  2. Quarterly Reports (10-Q)
  3. Submitted on 2022-04-29

OneMain Financial - 10-Q quarterly report FY


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00015842070000025598FALSEFALSE12/3112/3120222022Q1Q1Cash dividends declared were $0.95 per share and $3.95 per share during the three months ended March 31, 2022 and 2021, 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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

OR

☐    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 classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareOMFNew 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, there were 125,211,094 shares of OneMain Holdings, Inc’s common stock, $0.01 par value, outstanding.
At April 21, 2022, there were 10,160,021 shares of OneMain Finance Corporation’s common stock, $0.50 par value, outstanding.
2

TABLE OF CONTENTS
4
  
 
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
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
 
16
36
56
57
Controls and Procedures of OneMain Holdings, Inc.
57
Controls and Procedures of OneMain Finance Corporation
57
  
  
58
58
58
58
58
58
59
60
61

3


GLOSSARY

Terms and abbreviations used in this report are defined below.
Term or AbbreviationDefinition
30-89 Delinquency rationet finance receivables 30-89 days past due as a percentage of net finance receivables
ABSasset-backed securities
Adjusted pretax income (loss)a non-GAAP financial measure used by management as a key performance measure of our segment
AETRannual effective tax rate
AHLAmerican Health and Life Insurance Company, an insurance subsidiary of OneMain Financial Holdings, LLC
Annual Reportthe Annual Report on Form 10-K of OMH and OMFC for the fiscal year ended December 31, 2021, filed with the SEC on February 11, 2022
ASCAccounting Standards Codification
ASUAccounting Standards Update
Average daily debt balanceaverage of debt for each day in the period
Average net receivablesaverage of monthly average net finance receivables (net finance receivables at the beginning and end of each month divided by two) in the period
Base Indentureindenture, dated as of December 3, 2014, by and between OMFC and Wilmington Trust, National Association, as trustee, and guaranteed by OMH
Boardthe OMH Board of Directors
C&IConsumer and Insurance
CDOcollateralized debt obligations
CFPBConsumer Financial Protection Bureau
CMBScommercial mortgage-backed securities
COVID-19
the global outbreak of a novel strain of coronavirus, including variants thereof
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
FICOa credit score created by Fair Isaac Corporation
GAAPgenerally accepted accounting principles in the United States of America
GAPguaranteed asset protection
Gross charge-off ratioannualized gross charge-offs as a percentage of average net receivables
Gross finance receivables
the unpaid principal balance of our personal loans. For precompute loans, unpaid principal balance is the gross contractual payments less the unaccreted balance of unearned finance charges
Indenturethe Base Indenture, together with all subsequent Supplemental Indentures
Junior Subordinated Debenture$350 million aggregate principal amount of 60-year junior subordinated debt issued by OMFC under an indenture dated January 22, 2007, by and between OMFC and Deutsche Bank Trust Company, as trustee, and guaranteed by OMH
Managed receivablesconsist of our net finance receivables and finance receivables serviced for our whole loan sale partners
Net charge-off ratioannualized net charge-offs as a percentage of average net receivables
Net interest incomeinterest income less interest expense
NORANotice and Opportunity to Respond and Advise
ODARTOneMain Direct Auto Receivables Trust
OMFCOneMain Finance Corporation
OMFITOneMain Financial Issuance Trust
OMHOneMain Holdings, Inc.
4

Term or AbbreviationDefinition
OneMainOneMain Holdings, Inc. and OneMain Finance Corporation, collectively with their subsidiaries
Open accountsconsist of open credit card accounts as of period end
Other securities
primarily consist of equity securities and those securities for which the fair value option was elected. Other securities recognize unrealized gains and losses in investment revenues
Pretax capital generation
a non-GAAP financial measure used by management as a key performance measure of our segment, defined as adjusted pretax income (loss) excluding the change in allowance for finance receivable losses
Purchase volumeconsist of credit card purchase transactions in the period, including cash advances, net of returns
Recovery ratioannualized recoveries on net charge-offs as a percentage of average net receivables
RMBSresidential mortgage-backed securities
SECU.S. Securities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
Segment Accounting Basisa 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 Portfolioloans the Company previously owned and now services on behalf of a third party
Supplemental Indenturescollectively, 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 ActPublic Law 115-97 amending the Internal Revenue Code of 1986
TDR finance receivablestroubled debt restructured finance receivables. Debt restructuring in which a concession is granted to the borrower as a result of economic or legal reasons related to the borrower’s financial difficulties
TritonTriton Insurance Company, an insurance subsidiary of OneMain Financial Holdings, LLC
Unearned finance chargesthe 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 loansunencumbered gross finance receivables excluding credit cards
Unsecured corporate revolver
unsecured revolver with a maximum borrowing capacity of $1.0 billion, payable and due on October 25, 2026
Unsecured Notesthe notes, on a senior unsecured basis, issued by OMFC and guaranteed by OMH
VIEsvariable interest entities
Weighted average interest rateannualized interest expense as a percentage of average debt
XBRLeXtensible Business Reporting Language
Yieldannualized finance charges as a percentage of average net receivables
5

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)

(dollars in millions, except par value amount)March 31, 2022December 31, 2021
Assets  
Cash and cash equivalents$640 $541 
Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.7 billion in 2022, and $1.9 billion and $1.8 billion in 2021, respectively)
1,778 1,992 
Net finance receivables (includes loans of consolidated VIEs of $8.6 billion in 2022 and $8.8 billion in 2021)
18,979 19,212 
Unearned insurance premium and claim reserves(741)(761)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $896 million in 2022 and $910 million in 2021)
(2,071)(2,095)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses16,167 16,356 
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $509 million in 2022 and $466 million in 2021)
531 476 
Goodwill1,437 1,437 
Other intangible assets274 274 
Other assets981 1,003 
Total assets$21,808 $22,079 
Liabilities and Shareholders’ Equity  
Long-term debt (includes debt of consolidated VIEs of $7.8 billion in 2022 and $8.0 billion in 2021)
$17,560 $17,750 
Insurance claims and policyholder liabilities621 621 
Deferred and accrued taxes45 1 
Other liabilities (includes other liabilities of consolidated VIEs of $12 million in 2022 and $13 million in 2021)
493 614 
Total liabilities18,719 18,986 
Contingencies (Note 12)
Shareholders’ equity:  
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized, 125,793,836 and 127,809,640 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively
1 1 
Additional paid-in capital1,672 1,672 
Accumulated other comprehensive income (loss)(11)61 
Retained earnings1,905 1,727 
Treasury stock, at cost; 8,981,004 and 6,712,923 shares at March 31, 2022 and December 31, 2021, respectively
(478)(368)
Total shareholders’ equity3,089 3,093 
Total liabilities and shareholders’ equity$21,808 $22,079 

See Notes to the Condensed Consolidated Financial Statements (Unaudited).
6

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended
March 31,
(dollars in millions, except per share amounts)20222021
Interest income$1,089 $1,060 
Interest expense219 235 
Net interest income870 825 
Provision for finance receivable losses238 (2)
Net interest income after provision for finance receivable losses632 827 
Other revenues:  
Insurance111 107 
Investment15 17 
Gain on sales of finance receivables17 4 
Net loss on repurchases and repayments of debt — (47)
Other19 10 
Total other revenues162 91 
Other expenses:  
Salaries and benefits205 189 
Other operating expenses148 150 
Insurance policy benefits and claims45 33 
Total other expenses398 372 
Income before income taxes396 546 
Income taxes95 133 
Net income$301 $413 
Share Data:  
Weighted average number of shares outstanding:   
Basic127,075,714 134,405,368 
Diluted127,463,027 134,807,165 
Earnings per share:  
Basic$2.37 $3.07 
Diluted$2.36 $3.06 

See Notes to the Condensed Consolidated Financial Statements (Unaudited).
7

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended
March 31,
(dollars in millions)20222021
  
Net income$301 $413 
Other comprehensive loss:  
Net change in unrealized losses on non-credit impaired available-for-sale securities(105)(43)
Foreign currency translation adjustments2 2 
Other13 23 
Income tax effect:  
Net change in unrealized losses on non-credit impaired available-for-sale securities24 10 
Foreign currency translation adjustments(1)— 
Other(3)(6)
Other comprehensive loss, net of tax, before reclassification adjustments(70)(14)
Reclassification adjustments included in net income, net of tax:  
Net realized losses on available-for-sale securities, net of tax (2)— 
Reclassification adjustments included in net income, net of tax(2)— 
Other comprehensive loss, net of tax(72)(14)
Comprehensive income$229 $399 

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

8

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)
OneMain Holdings, Inc. Shareholders’ Equity
(dollars in millions)Common
Stock		Additional
Paid-in
Capital		Accumulated
Other Comprehensive
Income (Loss)		Retained
Earnings		Treasury StockTotal Shareholders’ Equity
Balance, January 1, 2022$1 $1,672 $61 $1,727 $(368)$3,093 
Common stock repurchased— — — — (110)(110)
Share-based compensation expense, net of forfeitures
— 12 — — — 12 
Withholding tax on share-based compensation
— (12)— — — (12)
Other comprehensive loss— — (72)— — (72)
Cash dividends *
— — — (123)— (123)
Net income— — — 301 — 301 
Balance, March 31, 2022$1 $1,672 $(11)$1,905 $(478)$3,089 
Balance, January 1, 2021$1 $1,655 $94 $1,691 $— $3,441 
Share-based compensation expense, net of forfeitures
— 7 — — — 7 
Withholding tax on share-based compensation
— (5)— — — (5)
Other comprehensive loss
— — (14)— — (14)
Cash dividends *
— — — (534)— (534)
Net income
— — — 413 — 413 
Balance, March 31, 2021$1 $1,657 $80 $1,570 $— $3,308 
                                      
* Cash dividends declared were $0.95 per share and $3.95 per share during the three months ended March 31, 2022 and 2021, respectively.

See Notes to the Condensed Consolidated Financial Statements (Unaudited).
9

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended
March 31,
(dollars in millions)20222021
Cash flows from operating activities  
Net income$301 $413 
Reconciling adjustments:
Provision for finance receivable losses238 (2)
Depreciation and amortization61 61 
Deferred income tax charge21 59 
Net loss on repurchases and repayments of debt— 47 
Share-based compensation expense, net of forfeitures12 7 
Gain on sales of finance receivables(17)(4)
Other(2)(2)
Cash flows due to changes in other assets and other liabilities(62)(23)
Net cash provided by operating activities552 556 
Cash flows from investing activities  
Net principal collections (originations and purchases) of finance receivables(245)217 
Proceeds from sales of finance receivables200 50 
Available-for-sale securities purchased(90)(146)
Available-for-sale securities called, sold, and matured196 91 
Other securities purchased(2)(688)
Other securities called, sold, and matured7 681 
Other, net(16)(7)
Net cash provided by investing activities50 198 
Cash flows from financing activities  
Proceeds from issuance and borrowings of long-term debt, net of issuance costs198 (1)
Repayment of long-term debt(398)(1,065)
Cash dividends(126)(534)
Common stock repurchased(110)— 
Withholding tax on share-based compensation(12)(5)
Net cash used for financing activities(448)(1,605)
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents154 (851)
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period1,017 2,723 
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period$1,171 $1,872 
Supplemental cash flow information
Cash and cash equivalents$640 $1,301 
Restricted cash and restricted cash equivalents531 571 
Total cash and cash equivalents and restricted cash and restricted cash equivalents$1,171 $1,872 

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

See Notes to the Condensed Consolidated Financial Statements (Unaudited).
10

ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)

(dollars in millions, except par value amount)March 31, 2022December 31, 2021
Assets
Cash and cash equivalents$620 $510 
Investment securities (includes available-for-sale securities with a fair value and an amortized cost basis of $1.7 billion in 2022, and $1.9 billion and $1.8 billion in 2021, respectively)
1,778 1,992 
Net finance receivables (includes loans of consolidated VIEs of $8.6 billion  in 2022 and $8.8 billion in 2021)
18,979 19,212 
Unearned insurance premium and claim reserves(741)(761)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $896 million in 2022 and $910 million in 2021)
(2,071)(2,095)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses16,167 16,356 
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash
    equivalents of consolidated VIEs of $509 million in 2022 and $466 million in 2021)
531 476 
Goodwill1,437 1,437 
Other intangible assets274 274 
Other assets980 1,001 
Total assets$21,787 $22,046 
Liabilities and Shareholder’s Equity
Long-term debt (includes debt of consolidated VIEs of $7.8 billion in 2022 and $8.0 billion in 2021)
$17,560 $17,750 
Insurance claims and policyholder liabilities621 621 
Deferred and accrued taxes47 1 
Other liabilities (includes other liabilities of consolidated VIEs of $12 million in 2022 and $13 million in 2021)
493 614 
Total liabilities18,721 18,986 
Contingencies (Note 12)
Shareholder’s equity:
Common stock, par value $0.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued
    and outstanding at March 31, 2022 and December 31, 2021
5 5 
Additional paid-in capital1,916 1,916 
Accumulated other comprehensive income (loss)(11)61 
Retained earnings1,156 1,078 
Total shareholder’s equity3,066 3,060 
Total liabilities and shareholder’s equity$21,787 $22,046 

See Notes to the Condensed Consolidated Financial Statements (Unaudited).
11


ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended
March 31,
(dollars in millions)20222021
Interest income$1,089 $1,060 
Interest expense219 235 
Net interest income870 825 
Provision for finance receivable losses238 (2)
Net interest income after provision for finance receivable losses632 827 
Other revenues:
Insurance111 107 
Investment15 17 
Gain on sales of finance receivables17 4 
Net loss on repurchases and repayments of debt— (47)
Other19 10 
Total other revenues162 91 
Other expenses:
Salaries and benefits205 189 
Other operating expenses148 150 
Insurance policy benefits and claims45 33 
Total other expenses398 372 
Income before income taxes396 546 
Income taxes95 133 
Net income$301 $413 

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

12

ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended
March 31,
(dollars in millions)20222021
Net income$301 $413 
Other comprehensive loss:
Net change in unrealized losses on non-credit impaired available-for-sale securities(105)(43)
Foreign currency translation adjustments2 2 
Other13 23 
Income tax effect:
Net change in unrealized losses on non-credit impaired available-for-sale securities24 10 
Foreign currency translation adjustments(1)— 
Other(3)(6)
Other comprehensive loss, net of tax, before reclassification adjustments(70)(14)
Reclassification adjustments included in net income, net of tax:
Net realized losses on available-for-sale securities, net of tax (2)— 
Reclassification adjustments included in net income, net of tax(2)— 
Other comprehensive loss, net of tax(72)(14)
Comprehensive income$229 $399 

See Notes to the Condensed Consolidated Financial Statements (Unaudited).
13

ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Shareholder’s Equity (Unaudited)

OneMain Finance Corporation Shareholder's Equity
(dollars in millions)Common
Stock		Additional
Paid-in
Capital		Accumulated
Other Comprehensive
Income (Loss)		Retained
Earnings		Total Shareholder’s Equity
Balance, January 1, 2022$5 $1,916 $61 $1,078 $3,060 
Share-based compensation expense, net of forfeitures— 12 — — 12 
Withholding tax on share-based compensation— (12)— — (12)
Other comprehensive loss— — (72)— (72)
Cash dividends— — — (223)(223)
Net income— — — 301 301 
Balance, March 31, 2022$5 $1,916 $(11)$1,156 $3,066 
Balance, January 1, 2021$5 $1,899 $94 $1,442 $3,440 
Share-based compensation expense, net of forfeitures— 7 — — 7 
Withholding tax on share-based compensation— (5)— — (5)
Other comprehensive loss— — (14)— (14)
Cash dividends— — — (535)(535)
Net income— — — 413 413 
Balance, March 31, 2021$5 $1,901 $80 $1,320 $3,306 

See Notes to the Condensed Consolidated Financial Statements (Unaudited).
14

ONEMAIN FINANCE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended
March 31,
(dollars in millions)20222021
Cash flows from operating activities
Net income$301 $413 
Reconciling adjustments:
Provision for finance receivable losses238 (2)
Depreciation and amortization61 61 
Deferred income tax charge21 59 
Net loss on repurchases and repayments of debt— 47 
Share-based compensation expense, net of forfeitures12 7 
Gain on sales of finance receivables(17)(4)
Other(2)(2)
Cash flows due to changes in other assets and other liabilities(61)(23)
Net cash provided by operating activities553 556 
Cash flows from investing activities
Net principal collections (originations and purchases) of finance receivables(245)217 
Proceeds from sales of finance receivables200 50 
Available-for-sale securities purchased(90)(146)
Available-for-sale securities called, sold, and matured196 91 
Other securities purchased(2)(688)
Other securities called, sold, and matured7 681 
Other, net(16)(7)
Net cash provided by investing activities50 198 
Cash flows from financing activities
Proceeds from issuance and borrowings of long-term debt, net of issuance costs198 (1)
Repayment of long-term debt(398)(1,065)
Cash dividends(226)(534)
Withholding tax on share-based compensation(12)(5)
Net cash used for financing activities(438)(1,605)
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents165 (851)
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period986 2,723 
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period$1,151 $1,872 
Supplemental cash flow information
Cash and cash equivalents$620 $1,301 
Restricted cash and restricted cash equivalents531 571 
Total cash and cash equivalents and restricted cash and restricted cash equivalents$1,151 $1,872 

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

See Notes to the Condensed Consolidated Financial Statements (Unaudited).
15

ONEMAIN HOLDINGS, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
March 31, 2022


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. To conform to the 2022 presentation, we reclassified certain items in prior periods of our condensed consolidated financial statements.

16

2. Recent Accounting Pronouncements

ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED

Insurance

In August of 2018, the FASB issued ASU 2018-12, Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts, which provides targeted improvements to Topic 944 for the assumptions used to measure the liability for future policy benefits for nonparticipating traditional and limited-payment contracts; measurement of market risk benefits; amortization of deferred acquisition costs; and enhanced disclosures. Upon adoption, our assumptions used to measure the liability for future policy benefits will be updated at least annually. The guidance requires the discount rate used to measure the liability to be an upper-medium grade fixed-income instrument yield and updated at each reporting date with changes in the liability due to the discount rate recognized in other comprehensive income. The amendments in this ASU become effective for the Company beginning January 1, 2023 and we have selected the modified retrospective transition method.

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 impact of the adoption of the ASU on our consolidated financial statements.

Financial Instruments

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

We do not believe that any other accounting pronouncements issued, but not yet effective, would have a material impact on our consolidated financial statements or disclosures, if adopted.
17

3. Finance Receivables

Our finance receivables consist of personal loans and credit cards. Personal loans are non-revolving, with a fixed rate, fixed terms generally between three and six years, and are secured by automobiles, other titled collateral, or are unsecured. During the third quarter of 2021, we began offering credit cards. Credit cards are open-ended, revolving, with a fixed rate, and are unsecured.

Components of our net finance receivables were as follows:
(dollars in millions)Personal LoansCredit CardsTotal
March 31, 2022
Gross finance receivables (a)$18,693 $49 $18,742 
Unearned fees
(218)(1)(219)
Accrued finance charges and fees278 1 279 
Deferred origination costs176 1 177 
Total$18,929 $50 $18,979 
December 31, 2021
Gross finance receivables (a)$18,944 $24 $18,968 
Unearned fees
(225)(1)(226)
Accrued finance charges and fees289 — 289 
Deferred origination costs179 2 181 
Total$19,187 $25 $19,212 
(a) Gross finance receivables equal the unpaid principal balance of our personal loans and credit cards. For precompute loans, unpaid principal balance is the gross contractual payments less the unaccreted balance of unearned finance charges.

WHOLE LOAN SALE TRANSACTIONS

As of March 31, 2022, we have whole loan sale flow agreements with third parties, with remaining terms of less than two years, in which we agreed to sell a combined total of $180 million gross receivables per quarter of newly originated unsecured personal loans along with any associated accrued interest. These unsecured personal loans are derecognized from our balance sheet at the time of sale. We service the personal loans sold and are entitled to a servicing fee and other fees commensurate with the services performed as part of the agreements. The gain on sales and servicing fees are recorded in other revenue. Our first sale was executed in the first quarter of 2021. During the three months ended March 31, 2022 and 2021, we sold $180 million and $45 million of gross finance receivables, respectively. The gain on the sales were $17 million and $4 million during the three months ended March 31, 2022 and 2021, respectively.

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 collection of these accounts is managed by our centralized 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 million and $20 million during the three months ended March 31, 2022 and 2021, respectively.

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

18

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

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

(dollars in millions)20222021202020192018PriorTotal
March 31, 2022
Performing
Current$2,771 $9,057 $3,252 $2,153 $622 $229 $18,084 
30-59 days past due3 131 55 37 13 7 246 
60-89 days past due— 99 42 26 9 5 181 
Total performing2,774 9,287 3,349 2,216 644 241 18,511 
Nonperforming (Nonaccrual)
90+ days past due— 202 113 70 21 12 418 
Total$2,774 $9,489 $3,462 $2,286 $665 $253 $18,929 

(dollars in millions)20212020201920182017PriorTotal
December 31, 2021
Performing
Current$10,645 $3,935 $2,641 $814 $193 $109 $18,337 
30-59 days past due125 74 53 19 6 5 282 
60-89 days past due81 53 33 11 4 3 185 
Total performing10,851 4,062 2,727 844 203 117 18,804 
Nonperforming (Nonaccrual)
90+ days past due125 130 85 28 9 6 383 
Total$10,976 $4,192 $2,812 $872 $212 $123 $19,187 

The following is a summary of credit cards by number of days delinquent:
(dollars in millions)
March 31, 2022December 31, 2021
Current
$47 $25 
30-59 days past due
2 — 
60-89 days past due
1 — 
90+ days past due
— — 
Total
$50 $25 

There were no credit cards that were converted to term loans at March 31, 2022 or December 31, 2021.
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TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES

Information regarding TDR finance receivables were as follows:
(dollars in millions)March 31, 2022December 31, 2021
 
TDR gross finance receivables$652 $646 
TDR net finance receivables *656 650 
Allowance for TDR finance receivable losses263 270 
*    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.

Information regarding the new volume of the TDR finance receivables were as follows:
Three Months Ended
March 31,
(dollars in millions)20222021
Pre-modification TDR net finance receivables $134 $116 
Post-modification TDR net finance receivables:
Rate reduction87 78 
Other *47 38 
Total post-modification TDR net finance receivables$134 $116 
Number of TDR accounts16,165 14,508 
*    “Other” modifications primarily consist of potential principal and interest forgiveness contingent on future payment performance by the borrower under the modified terms.

Finance receivables that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause the TDR finance receivables to be considered nonperforming (90 days or more past due) are reflected in the following table:
Three Months Ended
March 31,
(dollars in millions)20222021
TDR net finance receivables *$30 $30 
Number of TDR accounts3,796 4,183 
* Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted.

UNFUNDED LENDING COMMITMENTS

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

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4. Allowance for Finance Receivable Losses

We establish an allowance for finance receivable losses through the provision for finance receivable losses. We evaluate our finance receivable portfolio by the level of contractual delinquency in the portfolio, specifically in the late-stage delinquency buckets and inclusive of the migration of the finance receivables through the delinquency buckets. We estimate and record an allowance for finance receivable losses to cover the estimated lifetime expected credit losses on our finance receivables. Our allowance for finance receivable losses may fluctuate based upon changes in portfolio growth, credit quality, and economic conditions.

Our current methodology to estimate expected credit losses used the most recent macroeconomic forecasts, which incorporated the overall unemployment rate. We also considered inflationary pressures, supply chain concerns, geopolitical risks, along with the persistent labor supply shortages. Our forecast leveraged economic projections from industry leading forecast providers. At March 31, 2022, our economic forecast used a reasonable and supportable period of 12 months. The decrease in our allowance for finance receivable losses for the three months ended March 31, 2022 was primarily due to a seasonal decline in our loan portfolio. We may experience further changes to the macroeconomic assumptions within our forecast, as well as changes to our loan loss performance outlook, both of which could lead to further changes in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.

Changes in the allowance for finance receivable losses were as follows:
(dollars in millions)Personal LoansCredit CardsTotal
Three Months Ended March 31, 2022  
Balance at beginning of period$2,090 $5 $2,095 
Provision for finance receivable losses233 5 238 
Charge-offs(329)— (329)
Recoveries67 — 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)
Recoveries50 — 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.

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

(dollars in millions)Personal LoansCredit CardsTotal
March 31, 2022
Allowance for finance receivable losses:
   
Collectively evaluated for impairment
$1,798 $10 $1,808 
TDR finance receivables263 — 263 
Total$2,061 $10 $2,071 
Finance receivables:   
Collectively evaluated for impairment
$18,273 $50 $18,323 
TDR finance receivables656 — 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 receivables650 — 650 
Total$19,187 $25 $19,212 
Allowance for finance receivable losses as a percentage of finance receivables
10.89 %19.91 %10.90 %

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5. Investment Securities

AVAILABLE-FOR-SALE SECURITIES

Cost/amortized cost, allowance for credit losses, unrealized gains and losses, and fair value of fixed maturity available-for-sale securities by type were as follows:
(dollars in millions)Cost/
Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Fair
Value
March 31, 2022*    
Fixed maturity available-for-sale securities:    
U.S. government and government sponsored entities$11 $— $— $11 
Obligations of states, municipalities, and political subdivisions
74 — (3)71 
Commercial paper
57 — — 57 
Non-U.S. government and government sponsored entities
156 1 (3)154 
Corporate debt
1,140 11 (38)1,113 
Mortgage-backed, asset-backed, and collateralized:
   
RMBS
177 1 (8)170 
CMBS
43 — (1)42 
CDO/ABS
85 — (3)82 
Total$1,743 $13 $(56)$1,700 
December 31, 2021*
Fixed maturity available-for-sale securities:
U.S. government and government sponsored entities
$16 $— $— $16 
 Obligations of states, municipalities, and political subdivisions
76 3 — 79 
Commercial paper50 — — 50 
Non-U.S. government and government sponsored entities151 4 — 155 
Corporate debt1,246 61 (5)1,302 
Mortgage-backed, asset-backed, and collateralized:
RMBS169 3 (2)170 
CMBS44 1 — 45 
CDO/ABS90 1 (1)90 
Total$1,842 $73 $(8)$1,907 
*    The allowance for credit losses related to our investment securities as of March 31, 2022 and December 31, 2021 were immaterial.

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

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Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position without an allowance for credit losses were as follows:
 Less Than 12 Months12 Months or LongerTotal
(dollars in millions)Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
March 31, 2022      
U.S. government and government sponsored entities
$6 $— $— $— $6 $— 
Obligations of states, municipalities, and political subdivisions
48 (3)2 — 50 (3)
Commercial paper
47 — — — 47 — 
Non-U.S. government and government sponsored entities
91 (3)6 — 97 (3)
Corporate debt584 (31)48 (7)632 (38)
Mortgage-backed, asset-backed, and collateralized:
RMBS125 (6)20 (2)145 (8)
CMBS31 (1)— — 31 (1)
CDO/ABS61 (3)5 — 66 (3)
Total$993 $(47)$81 $(9)$1,074 $(56)
December 31, 2021
      
U.S. government and government sponsored entities
$6 $— $— $— $6 $— 
Obligations of states, municipalities, and political subdivisions
10 — — — 10 — 
Commercial paper
46 — — — 46 — 
Non-U.S. government and government sponsored entities
19 — 5 — 24 — 
Corporate debt208 (3)38 (2)246 (5)
Mortgage-backed, asset-backed, and collateralized:
RMBS81 (1)15 (1)96 (2)
CMBS7 — — — 7 — 
CDO/ABS41 (1)3 — 44 (1)
Total$418 $(5)$61 $(3)$479 $(8)


On a lot basis, we had 1,406 and 570 investment securities in an unrealized loss position at March 31, 2022 and December 31, 2021, respectively. We do not consider the unrealized losses to be credit-related, as these unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase. Additionally, as of March 31, 2022, there were no credit impairments on investment securities that we intend to sell. We do not have plans to sell any of the remaining investment securities with unrealized losses as of March 31, 2022, and we believe it is more likely than not that we would not be required to sell such investment securities before recovery of their amortized cost.

We continue to monitor unrealized loss positions for potential credit impairments. During the three months ended March 31, 2022 and 2021, 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 and 2021.

The proceeds of available-for-sale securities sold or redeemed during the three months ended March 31, 2022 and 2021 totaled $163 million and $67 million, respectively. The net realized gains and losses were immaterial during the three months ended March 31, 2022 and 2021.
24


Contractual maturities of fixed-maturity available-for-sale securities at March 31, 2022 were as follows:
(dollars in millions)Fair
Value		Amortized
Cost
Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
  
Due in 1 year or less$180 $179 
Due after 1 year through 5 years493 496 
Due after 5 years through 10 years572 598 
Due after 10 years161 165 
Mortgage-backed, asset-backed, and collateralized securities294 305 
Total$1,700 $1,743 

Actual maturities may differ from contractual maturities since issuers and borrowers may have the right to call or prepay obligations. We may sell investment securities before maturity for general corporate and working capital purposes and to achieve certain investment strategies.

The fair value of securities on deposit with third parties totaled $556 million and $587 million at March 31, 2022 and December 31, 2021, respectively.

OTHER SECURITIES

The fair value of other securities by type was as follows:
(dollars in millions)March 31, 2022December 31, 2021
Fixed maturity other securities: 
Bonds$25 $30 
Preferred stock *19 22 
Common stock *34 33 
Total $78 $85 
*    We employ an income equity strategy targeting investments in stocks with strong current dividend yields. Stocks included have a history of stable or increasing dividend payments.

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

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

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6. Long-term Debt

Principal maturities of long-term debt (excluding projected repayments on securitizations by period) by type of debt at March 31, 2022 were as follows:
Senior Debt
(dollars in millions)SecuritizationsRevolving
Conduit
Facilities		Unsecured
Notes (a)		Junior
Subordinated
Debt (a)		Total
Interest rates (b)
0.81%-6.94%
0.99%-1.15%
3.50%-8.88%
1.99 %
Remainder of 2022$— $— $— $— $— 
2023— — 1,175 — 1,175 
2024— — 1,300 — 1,300 
2025— — 1,835 — 1,835 
2026— — 1,600 — 1,600 
2027-2067— — 3,750 350 4,100 
Securitizations (c)7,184 — — — 7,184 
Revolving conduit facilities (c)— 650 — — 650 
Total principal maturities$7,184 $650 $9,660 $350 $17,844 
Total carrying amount$7,153 $650 $9,585 $172 $17,560 
Debt issuance costs (d)(29)— (77)— (106)
(a) Pursuant to the Base Indenture, the Supplemental Indentures, and the Guaranty Agreements, OMH agreed to fully and unconditionally guarantee, on a senior unsecured basis, payments of principal, premium and interest on the Unsecured Notes and Junior Subordinated Debenture. The OMH guarantees of OMFC’s long-term debt are subject to customary release provisions.
(b) The interest rates shown are the range of contractual rates in effect at March 31, 2022.
(c) Securitizations and borrowings under the revolving conduit facilities are not included in the above maturities by period due to their variable monthly repayments, which may result in pay-off prior to the stated maturity date. See Note 7 for further information on our long-term debt associated with securitizations and revolving conduit facilities.
(d) Debt issuance costs are reported as a direct deduction from long-term debt, with the exception of debt issuance costs associated with our revolving conduit facilities and unsecured corporate revolver, which totaled $30 million at March 31, 2022 and are reported in “Other assets.”

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.

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We parenthetically disclose on our consolidated balance sheets the VIE’s assets that can only be used to settle the VIE’s obligations and liabilities if its creditors have no recourse against the primary beneficiary’s general credit. The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts and revolving conduit facilities were as follows:
(dollars in millions)March 31, 2022December 31, 2021
Assets  
Cash and cash equivalents$2 $2 
Net finance receivables8,579 8,821 
Allowance for finance receivable losses896 910 
Restricted cash and restricted cash equivalents509 466 
Other assets27 26 
Liabilities  
Long-term debt$7,803 $7,999 
Other liabilities12 13 

Other than the retained subordinate and residual interests in our consolidated VIEs, we are under no further obligation than is otherwise noted herein, either contractually or implicitly, to provide financial support to these entities. Consolidated interest expense related to our VIEs totaled $65 million and $78 million during the three months ended March 31, 2022 and 2021, 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.

REVOLVING CONDUIT FACILITIES

We had access to 14 revolving conduit facilities with a total maximum borrowing capacity of $6.0 billion as of March 31, 2022. Our conduit facilities contain revolving periods during which time no principal payments are required, but may be made without penalty, followed by a subsequent amortization period. Principal balances of outstanding loans, if any, are due and payable in full over periods ranging up to nine years as of March 31, 2022. Amounts drawn on these facilities are collateralized by our personal loans.

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

Changes in the reserve for unpaid claims and loss adjustment expenses (net of reinsurance recoverables):
At or for the
Three Months Ended March 31,
(dollars in millions)20222021
Balance at beginning of period$118 $148 
Less reinsurance recoverables(3)(3)
Net balance at beginning of period115 145 
Additions for losses and loss adjustment expenses incurred to:
Current year58 57 
Prior years *(8)(18)
Total50 39 
Reductions for losses and loss adjustment expenses paid related to:
Current year(16)(18)
Prior years(35)(47)
Total(51)(65)
Net balance at end of period114 119 
Plus reinsurance recoverables3 3 
Balance at end of period$117 $122 
*    At March 31, 2022, $8 million reflected a redundancy in the prior years’ net reserves, primarily due to favorable development of credit and term life claims during the period. At March 31, 2021, $18 million reflected a redundancy in the prior years’ net reserves, primarily due to favorable development of credit disability and unemployment claims during the period.


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

CAPITAL STOCK

OMH has two classes of authorized capital stock: preferred stock and common stock. OMFC has two classes of authorized capital stock: special stock and common stock. OMH and OMFC may issue preferred stock and special stock, respectively, in one or more series. The OMH Board of Directors and the OMFC Board of Directors determine the dividend, liquidation, redemption, conversion, voting, and other rights prior to issuance.

Changes in OMH shares of common stock issued and outstanding were as follows:
Three Months Ended March 31,
20222021
Balance at beginning of period127,809,640 134,341,724 
Common stock issued 252,277 135,372 
Common stock repurchased(2,282,552)— 
Treasury stock issued14,471 — 
Balance at end of period125,793,836 134,477,096 


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EARNINGS PER SHARE (OMH ONLY)

The computation of earnings per share was as follows:
Three Months Ended March 31,
(dollars in millions, except per share data)20222021
 
Numerator (basic and diluted):  
Net income$301 $413 
Denominator:  
Weighted average number of shares outstanding (basic)127,075,714 134,405,368 
Effect of dilutive securities *387,313 401,797 
Weighted average number of shares outstanding (diluted)127,463,027 134,807,165 
Earnings per share:  
Basic$2.37 $3.07 
Diluted$2.36 $3.06 
* We have excluded weighted-average unvested restricted stock units totaling 1,172,754 and 133,004 for the three months ended March 31, 2022 and 2021, respectively, from the fully-diluted earnings per share calculations as these shares would be anti-dilutive, which could impact the earnings per share calculation in the future.

Basic earnings per share is computed by dividing net income by the weighted-average number of shares outstanding during each period. Diluted earnings per share is computed based on the weighted-average number of shares outstanding plus the effect of potentially dilutive shares outstanding during the period using the treasury stock method. The potentially dilutive shares represent outstanding unvested restricted stock units.

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10. Accumulated Other Comprehensive Income (Loss)

Changes, net of tax, in accumulated other comprehensive income (loss) were as follows:
(dollars in millions)Unrealized
Gains (Losses)
Available-for-Sale Securities (a)		Retirement
Plan Liabilities
Adjustments		Foreign
Currency
Translation
Adjustments		Other (b)Total
Accumulated
Other
Comprehensive
Income (Loss)
Three Months Ended March 31, 2022    
Balance at beginning of period$49 $1 $3 $8 $61 
Other comprehensive income (loss) before reclassifications
(81)— 1 10 (70)
Reclassification adjustments from accumulated other comprehensive loss
(2)— — — (2)
Balance at end of period$(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)
Balance at end of period$58 $1 $4 $17 $80 
(a) There were no material amounts related to available-for-sale debt securities for which an allowance for credit losses was recorded during the three months ended March 31, 2022 and 2021.
(b) Other primarily includes changes in the fair value of our mark-to-market derivative instruments that have been designated as cash flow hedges.

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

11. Income Taxes

We had a net deferred tax asset of $339 million at March 31, 2022 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.

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

Our gross unrecognized tax benefits, including related interest and penalties, totaled $7 million at March 31, 2022 and $8 million at December 31, 2021. We accrue interest related to uncertain tax positions in income tax expense. The amount of any change in the balance of uncertain tax liabilities over the next 12 months is not expected to be material to our consolidated financial statements.

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12. Contingencies

LEGAL CONTINGENCIES

In the normal course of business, we have been named, from time to time, as defendants in various legal actions, including arbitrations, class actions, and other litigation arising in connection with our activities. Some of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Additionally, we are, from time to time, in the normal course of business, subject to inquiries and investigations by federal, state and local governmental authorities regarding our products and our operations. These inquiries and investigations may result in fines, restitution or other penalties, including injunctive relief that may result in restrictions on our business. While we will continue to evaluate legal actions to determine whether a loss is reasonably possible or probable and is reasonably estimable, there can be no assurance that material losses will not be incurred from pending, threatened or future litigation, investigations, examinations, or other claims.

We contest liability and/or the amount of damages, as appropriate, in each pending matter. Where available information indicates that it is probable that a liability had been incurred at the date of the consolidated financial statements and we can reasonably estimate the amount of that loss, we accrue the estimated loss by a charge to income. In many actions, however, it is inherently difficult to determine whether any loss is probable or even reasonably possible, or to estimate the amount of any loss. In addition, even where loss is reasonably possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss.

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

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

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


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13. Segment Information

At March 31, 2022, Consumer and Insurance (“C&I”) is our only reportable segment. The remaining components (which we refer to as “Other”) consist of our liquidating SpringCastle Portfolio servicing activity and our non-originating legacy operations, which primarily include our liquidating real estate loans.

The accounting policies of the C&I segment are the same as those disclosed in Note 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 consolidated financial statement amounts.

(dollars in millions)Consumer
and
Insurance		OtherSegment to
GAAP
Adjustment		Consolidated
Total
Three Months Ended March 31, 2022  
Interest income$1,087 $1 $1 $1,089 
Interest expense217 1 1 219 
Provision for finance receivable losses
237 — 1 238 
Net interest income after provision for finance receivable losses
633 — (1)632 
Other revenues158 4 — 162 
Other expenses395 4 (1)398 
Income before income tax expense
$396 $— $— $396 
Assets$19,748 $40 $2,020 $21,808 
Three Months Ended March 31, 2021  
Interest income$1,057 $1 $2 $1,060 
Interest expense233 1 1 235 
Provision for finance receivable losses
(3)— 1 (2)
Net interest income after provision for finance receivable losses
827 — — 827 
Other revenues98 3 (10)91 
Other expenses358 6 8 372 
Income (loss) before income tax expense (benefit)
$567 $(3)$(18)$546 
Assets$19,194 $57 $2,034 $21,285 

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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 UsingTotal
Fair
Value		Total
Carrying
Value
(dollars in millions)Level 1Level 2Level 3
March 31, 2022
Assets
Cash and cash equivalents$631 $9 $— $640 $640 
Investment securities56 1,717 5 1,778 1,778 
Net finance receivables, less allowance for finance receivable losses
— — 19,479 19,479 16,908 
Restricted cash and restricted cash equivalents 531 — — 531 531 
Other assets *
— — 51 51 43 
Liabilities
Long-term debt $— $17,537 $— $17,537 $17,560 
December 31, 2021
Assets
Cash and cash equivalents$535 $6 $— $541 $541 
Investment securities59 1,927 6 1,992 1,992 
Net finance receivables, less allowance for finance receivable losses
— — 20,083 20,083 17,117 
Restricted cash and restricted cash equivalents 476 — — 476 476 
Other assets *
— — 52 52 46 
Liabilities
Long-term debt$— $18,781 $— $18,781 $17,750 
*Other assets at March 31, 2022 and December 31, 2021 primarily consists of finance receivables held for sale.

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FAIR VALUE MEASUREMENTS — RECURRING BASIS

The following tables present information about our assets measured at fair value on a recurring basis and indicates the fair value hierarchy based on the levels of inputs we utilized to determine such fair value:

Fair Value Measurements UsingTotal Carried At Fair Value
(dollars in millions)Level 1Level 2Level 3
March 31, 2022    
Assets    
Cash equivalents in mutual funds$138 $— $— $138 
Cash equivalents in securities— 9 — 9 
Investment securities:    
Available-for-sale securities    
U.S. government and government sponsored entities— 11 — 11 
Obligations of states, municipalities, and political subdivisions
— 71 — 71 
Commercial paper— 57 — 57 
Non-U.S. government and government sponsored entities— 154 — 154 
Corporate debt4 1,105 4 1,113 
RMBS— 170 — 170 
CMBS— 42 — 42 
CDO/ABS— 82 — 82 
Total available-for-sale securities4 1,692 4 1,700 
Other securities   
Bonds:   
Corporate debt— 8 — 8 
RMBS— 1 — 1 
CDO/ABS— 16 — 16 
Total bonds— 25 — 25 
Preferred stock19 — — 19 
Common stock33 — 1 34 
Total other securities52 25 1 78 
Total investment securities56 1,717 5 1,778 
Restricted cash equivalents in mutual funds512 — — 512 
Total$706 $1,726 $5 $2,437 

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Fair Value Measurements UsingTotal Carried At Fair Value
(dollars in millions)Level 1Level 2Level 3
December 31, 2021    
Assets    
Cash equivalents in mutual funds$41 $— $— $41 
Cash equivalents in securities— 6 — 6 
Investment securities:    
Available-for-sale securities    
U.S. government and government sponsored entities— 16 — 16 
Obligations of states, municipalities, and political subdivisions
— 79 — 79 
Certificates of deposit and commercial paper
— 50 — 50 
Non-U.S. government and government sponsored entities— 155 — 155 
Corporate debt5 1,292 5 1,302 
RMBS— 170 — 170 
CMBS— 45 — 45 
CDO/ABS— 90 — 90 
Total available-for-sale securities5 1,897 5 1,907 
Other securities   
Bonds:    
Corporate debt— 9 — 9 
RMBS— 1 — 1 
CDO/ABS— 20 — 20 
Total bonds— 30 — 30 
Preferred stock22 — — 22 
Common stock32 — 1 33 
Total other securities54 30 1 85 
Total investment securities59 1,927 6 1,992 
Restricted cash equivalents in mutual funds468 — — 468 
Total$568 $1,933 $6 $2,507 

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

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.
35

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. Important factors that could cause actual results, performance, or achievements to differ materially from those expressed in or implied by forward-looking statements include, without limitation, the following:

•adverse changes in general economic conditions, including the interest rate environment and the financial markets;
•risks associated with the global outbreak of a novel strain of coronavirus (“COVID-19”) and the measures taken in response thereto;
•the sufficiency of our allowance for finance receivable losses;
•increased levels of unemployment and personal bankruptcies;
•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 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 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. In the third quarter of 2021, we began offering 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 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, and our website, www.omf.com, to customers who need timely access to cash. Our personal loans are non-revolving, with a fixed rate, fixed terms generally between three and six years, and are secured by automobiles, other titled collateral, or are unsecured. At March 31, 2022, we had approximately 2.29 million personal loans totaling $18.9 billion of net finance receivables, of which 52% were secured by titled property, compared to approximately 2.34 million personal loans totaling $19.2 billion of net finance receivables, of which 52% were secured by titled property at December 31, 2021. Commencing in the first quarter of 2021, we also service personal loans for our whole loan sale partners.

•Credit Cards — In the third quarter of 2021, we began offering credit cards through a third-party bank partner from which we purchase the receivable balances. The credit cards are offered through our branch network, direct mail marketing, and direct-to-consumer via our affiliates. Credit cards are open-ended, revolving, with a fixed rate, and are unsecured. At March 31, 2022, we had approximately 74 thousand open credit card customer accounts, totaling $50 million of net finance receivables, compared to approximately 66 thousand open credit card customer accounts, totaling $25 million of net finance receivables at December 31, 2021.

•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 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.

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OUR SEGMENT

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

The remaining components (which we refer to as “Other”) consist of our liquidating SpringCastle Portfolio servicing activity and our non-originating legacy operations, which primarily include our liquidating real estate loans. See Note 13 of the Notes to the Condensed Consolidated Financial Statements included in this report for more information about our segment.

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, we had $918 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 - 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. 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.

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.

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Election and Resignation of Members of the OMH Board of Directors

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

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

Management’s Response to the COVID-19 Pandemic

In early 2020, COVID-19 evolved into a global pandemic, resulting in widespread volatility and deterioration in economic conditions across the 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., and remain prepared for any additional opportunities or challenges that may impact our business and industry. Our financial condition and results of operations could be affected by the macroeconomic environment including unemployment 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. We will continue to incorporate updates, as necessary, to our macroeconomic assumptions which could lead to further adjustments in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.

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

Our experienced management team continues to remain focused on maintaining a solid balance sheet with an adequate liquidity runway and capital coverage, upholding a conservative and disciplined underwriting model, and building strong relationships with our customers to ensure that we are serving them well. We believe we are well positioned to serve our customers, invest in our business, and drive growth to create value for our stockholders as we navigate the 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,
(dollars in millions, except per share amounts)20222021
Interest income$1,089 $1,060 
Interest expense219 235 
Provision for finance receivable losses238 (2)
Net interest income after provision for finance receivable losses
632 827 
Other revenues162 91 
Other expenses398 372 
Income before income taxes
396 546 
Income taxes95 133 
Net income$301 $413 
Share Data: 
Earnings per share:
Diluted$2.36 $3.06 
Selected Financial Statistics (a)
Total finance receivables:
Net finance receivables$18,979 $17,564 
Average net receivables$19,083 $17,824 
Yield23.12 %24.08 %
Gross charge-off ratio6.98 %5.81 %
Recovery ratio(1.42)%(1.14)%
Net charge-off ratio5.57 %4.67 %
30-89 Delinquency ratio2.26 %1.57 %
Personal loans:
Net finance receivables$18,929 $17,564 
Origination volume$2,959 $2,284 
Number of accounts2,288,999 2,229,609 
Number of accounts originated286,391 225,102 
Credit cards (b):
Net finance receivables$50 $— 
Purchase volume$45 $— 
Number of open accounts73,958 — 
Debt balances:
Long-term debt balance$17,560 $16,789 
Average daily debt balance $17,553 $17,035 
(a)    See “Glossary” at the beginning of this report for formulas and definitions of our key performance ratios.
(b)    There were no credit cards for the three months ended March 31, 2021 as the product offering began in the third quarter of 2021.
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Comparison of Consolidated Results for the Three Months Ended March 31, 2022 and 2021

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

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

See Notes 6 and 7 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information on our long-term debt, securitization transactions, and our revolving conduit facilities.

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

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

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

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

Management uses C&I adjusted pretax income (loss), a non-GAAP financial measure, as a key performance measure of our segment. C&I adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes 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. Management believes C&I adjusted pretax income (loss) is useful in assessing the profitability of our segment.

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

Management utilizes both C&I adjusted pretax 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,
(dollars in millions)20222021
Consumer and Insurance
Income before income taxes - Segment Accounting Basis
$396 $567 
Adjustments:
    Net loss on repurchases and repayments of debt
— 38 
Cash-settled stock-based awards1 — 
    Direct costs associated with COVID-19
1 2 
Adjusted pretax income (non-GAAP)
$398 $607 
Provision for finance receivable losses$237 $(3)
Net charge-offs(262)(205)
Pretax capital generation (non-GAAP)$373 $399 
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Segment Results

The results of OMFC are consolidated into the results of OMH. Due to the nominal differences between OMFC and OMH, content throughout this section relate only to OMH. See Note 1 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information.

See Note 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,
(dollars in millions)20222021
Interest income$1,087 $1,057 
Interest expense217 233 
Provision for finance receivable losses237 (3)
Net interest income after provision for finance receivable losses
633 827 
Other revenues158 136 
Other expenses393 356 
Adjusted pretax income (non-GAAP)$398 $607 
Selected Financial Statistics (a)  
Total finance receivables:
Net finance receivables$18,981 $17,569 
Average net receivables$19,086 $17,830 
Yield23.11 %24.04 %
Gross charge-off ratio6.98 %5.81 %
Recovery ratio(1.42)%(1.14)%
Net charge-off ratio5.57 %4.67 %
30-89 Delinquency ratio2.26 %1.57 %
Personal loans:
Net finance receivables$18,931 $17,569 
Origination volume$2,959 $2,284 
Number of accounts2,288,999 2,229,609 
Number of accounts originated286,391 225,102 
Credit cards (b):
Net finance receivables$50 $— 
Purchase volume$45 $— 
Number of open accounts73,958 — 
(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.

44

Comparison of Adjusted Pretax Income for the Three Months Ended March 31, 2022 and 2021

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

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

See Notes 6 and 7 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information on our long-term debt, securitization transactions, and our revolving conduit facilities.

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

Other revenues increased $22 million or 17% for the three months ended March 31, 2022 when compared to the same period in 2021 primarily due to 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 $37 million or 10% for the three months ended March 31, 2022 when compared to the same period in 2021 primarily due to an increase in salaries and benefits due to an increase in headcount as we continue to invest in our business, and an increase in insurance policy and benefits claims expense resulting from lower than expected involuntary unemployment insurance claims in the prior year period.


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Credit Quality

FINANCE RECEIVABLES

Our net finance receivables, consisting of personal loans and credit cards, were $19.0 billion at March 31, 2022 and $19.2 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. We consider the delinquency status of our finance receivables as our key credit quality indicator. We monitor the delinquency of our finance receivable portfolio, including the migration between the delinquency buckets and changes in the delinquency trends to manage our exposure to credit risk in the portfolio. Our branch and central operation team members work with customers as necessary and offer a variety of borrower assistance programs to help customers continue to make payments.

DELINQUENCY

We monitor delinquency trends to evaluate the risk of future credit losses and employ advanced analytical tools to manage our exposure. Team members are actively engaged in collection activities throughout the early stages of delinquency. We closely track and report the percentage of receivables that are contractually 30-89 days past due as a benchmark of portfolio quality, collections effectiveness, and as a strong indicator of losses in coming quarters.

When personal loans are contractually 60 days past due, we consider these accounts to be at an increased risk for loss and collection of these accounts is managed by our centralized operations. Use of our centralized operations teams for managing late-stage delinquency allows us to apply more advanced collection technologies and tools and drives operating efficiencies in servicing. 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 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.
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The delinquency information for net finance receivables was as follows:
Consumer and InsuranceSegment to
GAAP
Adjustment		GAAP
 Basis
(dollars in millions)Personal LoansCredit Cards
March 31, 2022
Current
$18,086 $47 $(2)$18,131 
30-59 days past due
246 2 — 248 
60-89 days past due
181 1 — 182 
90+ days past due
418 — — 418 
Total net finance receivables
$18,931 $50 $(2)$18,979 
Delinquency ratio
30-89 days past due
2.25 %5.32 %*2.26 %
30+ days past due4.46 %5.97 %*4.47 %
60+ days past due3.17 %2.47 %*3.17 %
90+ days past due2.21 %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
383 — — 383 
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 due4.43 %0.08 %*4.42 %
60+ days past due2.96 %— %*2.96 %
90+ days past due2.00 %— %*1.99 %
* Not applicable
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ALLOWANCE FOR FINANCE RECEIVABLE LOSSES

We estimate and record an allowance for finance receivable losses to cover the estimated lifetime expected credit losses on our finance receivables. Our allowance for finance receivable losses may fluctuate based upon changes in portfolio growth, credit quality, and economic conditions.

Our current methodology to estimate expected credit losses used the most recent macroeconomic forecasts, which incorporated the overall unemployment rate. We also considered inflationary pressures, supply chain concerns, geopolitical risks, along with persistent labor supply shortages. Our forecast leveraged economic projections from industry leading forecast providers. At March 31, 2022, our economic forecast used a reasonable and supportable period of 12 months. We may experience further changes to the macroeconomic assumptions within our forecast, as well as changes to our loan loss performance outlook, both of which could lead to further changes in our allowance for finance receivable losses, allowance ratio, and provision for finance receivable losses.

Changes in our allowance for finance receivable losses were as follows:
(dollars in millions)Consumer and InsuranceSegment to
GAAP
Adjustment		Consolidated
Total
Personal LoansCredit Cards
Three Months Ended March 31, 2022
Balance at beginning of period
$2,097 $5 $(7)$2,095 
Provision for finance receivable losses
232 5 1 238 
Charge-offs
(329)— — (329)
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
$2,075 $— $(13)$2,062 
Allowance ratio
11.81 %— %(a)11.74 %
(a) 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 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 from the prior year period primarily due to improved unemployment outlook. See Note 4 of the Notes to the Condensed Consolidated Financial Statements included in this report for more information about the changes in the allowance for finance receivable losses.

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TDR FINANCE RECEIVABLES

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

Information regarding TDR net finance receivables 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 losses271 (8)263 
December 31, 2021
TDR net finance receivables$671 $(21)$650 
Allowance for TDR finance receivable losses279 (9)270 

There were no credit cards classified as TDR finance receivables at March 31, 2022 or December 31, 2021.
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DISTRIBUTION OF FINANCE RECEIVABLES BY FICO SCORE

There are many different categorizations used in the consumer lending industry to describe the creditworthiness of a borrower, including prime, near-prime, 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 LoansCredit CardsTotal
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.

50

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, OMH generated net income of $301 million. OMH’s net cash inflow from operating and investing activities totaled $602 million for the three months ended March 31, 2022. At March 31, 2022, our scheduled interest payments for the remainder of 2022 totaled $357 million, and there are no scheduled principal payments for the remainder of 2022 on our existing debt (excluding securitizations). As of March 31, 2022, we had $10.2 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.

OMFC’s Unsecured Corporate Revolver

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

OMFC’s Notice of Redemption of Unsecured Debt

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.

Securitizations and Borrowings from Revolving Conduit Facilities

During the three months ended March 31, 2022, we did not terminate, cancel, or enter into any new securitizations or conduit facilities. At March 31, 2022, an aggregate of $650 million was drawn under our conduit facilities, and the remaining borrowing capacity was $5.4 billion. At March 31, 2022, we had $8.5 billion of gross finance receivables pledged as collateral for our securitizations 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

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.

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 revolving conduit facilities.

51

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
RatingOutlook
S&PBBStable
Moody’sBa2Stable
KBRABB+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, OMH repurchased 2,282,552 shares of its common stock through its stock repurchase program for an aggregate total of $110 million, including commissions and fees. As of March 31, 2022, OMH held a total of 8,981,004 shares of treasury stock. To provide funding for the OMH stock repurchase, the OMFC Board of Directors authorized dividend payments in the amount of $100 million.

For additional information regarding the shares repurchased, see Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Part II included in this report.

Cash Dividend to OMH's Common Stockholders

As of March 31, 2022, the dividend declarations for the current year by the Board were as follows:
Declaration DateRecord DatePayment DateDividend Per ShareAmount Paid
(in millions)
February 2, 2022February 14, 2022February 18, 2022$0.95 $121 
Total$0.95 $121 

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

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

While OMH intends to pay its minimum quarterly dividend, currently $0.95 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 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, we have whole loan sale flow agreements with third parties, with remaining terms of less than two years, in which we agreed to sell a combined total of $180 million gross receivables per quarter of newly originated unsecured personal loans along with any associated accrued interest. Our first sale was executed in the first quarter of 2021. During the three months ended March 31, 2022 and 2021, we sold $180 million and $45 million of gross finance receivables, respectively. For further information on the whole loan sale transactions, see Note 3 of the Notes to the Condensed Consolidated Financial Statements included in this report.

52

LIQUIDITY

OMH's Operating Activities

Net cash provided by operations of $552 million for the three months ended March 31, 2022 reflected net income of $301 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 million.

OMH's Investing Activities

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 $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 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, we had $640 million of cash and cash equivalents, which included $265 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that is unavailable for general corporate purposes.

At March 31, 2022, 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, and a prolonged inability to adequately access capital market funding. We intend to support our liquidity position by utilizing strategies that are further described in our “Liquidity and Capital Resources” of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II - Item 7 included in our Annual Report.

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

OUR INSURANCE SUBSIDIARIES

Our insurance subsidiaries are subject to state regulations that limit their ability to pay dividends. AHL and Triton did not pay any dividends during the three months ended March 31, 2022 and 2021. 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.

53

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, our structured financings consisted of the following:
(dollars in millions)Issue Amount (a)Initial Collateral BalanceCurrent
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 2018-2 368 381 350 400 3.87 % 5 years
OMFIT 2019-1632 654 215 260 4.35 % 2 years
OMFIT 2019-2900 947 900 995 3.30 %7 years
OMFIT 2019-A789 892 750 892 3.78 %7 years
OMFIT 2020-1821 958 821 958 4.12 %2 years
OMFIT 2020-21,000 1,053 1,000 1,053 2.03 % 5 years
OMFIT 2021-1850 904 850 904 1.57 %5 years
ODART 2018-1 947 964 196 217 3.98 % 2 years
ODART 2019-1737 750 700 750 3.79 % 5 years
ODART 2021-11,000 1,053 1,000 1,053 0.98 %2 years
Total securitizations$9,319 $9,932 $7,184 $8,033 
(a) Issue Amount includes the retained interest amounts as applicable and the Current Note Amounts Outstanding balances reflect pay-downs subsequent to note issuance and exclude retained interest amounts.
(b) Inclusive of in-process replenishments of collateral for securitized borrowings in a revolving status as of March 31, 2022.


54

Revolving Conduit Facilities
In addition to the structured financings, we had access to 14 revolving conduit facilities with a total borrowing capacity of $6.0 billion as of March 31, 2022:
(dollars in millions)Advance Maximum BalanceAmount
Drawn
OneMain Financial Funding VII, LLC$600 $— 
OneMain Financial Funding IX, LLC600 — 
Mystic River Funding, LLC 600 — 
OneMain Financial Auto Funding I, LLC550 — 
Seine River Funding, LLC550 150 
Chicago River Funding, LLC 500 — 
Hudson River Funding, LLC500 — 
OneMain Financial Funding VIII, LLC400 — 
Thayer Brook Funding, LLC350 — 
Columbia River Funding, LLC350 — 
Hubbard River Funding, LLC250 — 
New River Funding Trust250 — 
River Thames Funding, LLC250 250 
St. Lawrence River Funding, LLC250 250 
Total$6,000 $650 

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 or December 31, 2021.

Critical Accounting Policies and Estimates

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

•allowance for finance receivable losses; and
•TDR finance receivables.

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

Recent Accounting Pronouncements

See Note 2 of the Notes to the Condensed Consolidated Financial Statements included in this report for discussion of recently issued accounting pronouncements.

55

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.
56


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, 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 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 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, 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 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 that have materially affected, or are reasonably likely to materially affect, OMFC's internal control over financial reporting.

57

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, based on settlement date:
PeriodTotal 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 31477,106 $52.07 477,106$60,729,860 
February 1 - February 28475,567 52.13 475,567 978,925,463 
March 1 - March 311,329,879 45.57 1,329,879 918,327,499 
Total2,282,552 $48.30 2,282,552
(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 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.
58

Table of Contents
Item 6. Exhibit Index.
Exhibit NumberDescription
31.1
31.2
31.3
31.4
32.1
32.2
101Interactive 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.
104Cover Page Interactive Data File in Inline XBRL format (Included in Exhibit 101).

* Management contract or compensatory plan or arrangement.
59

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
By:/s/ Micah R. Conrad
 Micah R. Conrad
 Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)

60

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
By:/s/ Micah R. Conrad
 Micah R. Conrad
 Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)

61

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