UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 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 ...

OneMain Holdings, Inc. (NYSE:OMF) Q2 2023 Earnings Conference Call July 26, 2023 9:00 AM ET Company Participants Peter Poillon - Head, Investor Relations Doug Shulman - Chairman & Chief Executive Officer Micah Conrad - Chief Financial Officer Conference Call Participants Vincent Caintic - Stephens Michael Kaye - Wells Fargo Mihir Bhatia - Bank of America Kevin Barker - Piper Sandler Rick Shane - JPMorgan Matthew Hurwit - Jefferies Operator Welcome to the OneMain Financial's Second Quarter 2023 Earnings Conf ...

[GLOSSARY](index=4&type=section&id=GLOSSARY) This section defines key terms and abbreviations used throughout the financial report [PART I — FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements of OneMain Holdings, Inc. and Subsidiaries (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20of%20OneMain%20Holdings%2C%20Inc.%20and%20Subsidiaries%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for OMH and OMFC, along with detailed notes on accounting policies and financial line items [Condensed Consolidated Balance Sheets (OMH)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(OMH)) OMH's total assets slightly decreased to $22,443 million, driven by a minor decrease in net finance receivables and an increase in shareholders' equity Components of Condensed Consolidated Balance Sheets (OMH) | Metric | March 31, 2023 (millions) | December 31, 2022 (millions) | Change (millions) | | :----------------------------------- | :-------------------------- | :--------------------------- | :---------------- | | Total assets | $22,443 | $22,537 | $(94) | | Net finance receivables | $19,809 | $19,986 | $(177) | | Cash and cash equivalents | $544 | $498 | $46 | | Total liabilities | $19,362 | $19,522 | $(160) | | Long-term debt | $18,206 | $18,281 | $(75) | | Total shareholders' equity | $3,081 | $3,015 | $66 | [Condensed Consolidated Statements of Operations (OMH)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(OMH)) OMH's net income decreased to $179 million, primarily due to a significant increase in the provision for finance receivable losses, despite stable interest income Condensed Consolidated Statements of Operations (OMH) | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | Change (millions) | Change (%) | | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :---------------- | :--------- | | Interest income | $1,094 | $1,089 | $5 | 0.46% | | Interest expense | $239 | $219 | $20 | 9.13% | | Net interest income | $855 | $870 | $(15) | -1.72% | | Provision for finance receivable losses | $385 | $238 | $147 | 61.76% | | Net interest income after provision for losses | $470 | $632 | $(162) | -25.63% | | Total other revenues | $177 | $162 | $15 | 9.26% | | Total other expenses | $412 | $395 | $17 | 4.30% | | Income before income taxes | $235 | $399 | $(164) | -41.10% | | Income taxes | $56 | $96 | $(40) | -41.67% | | Net income | $179 | $303 | $(124) | -40.92% | | Diluted Earnings per share | $1.48 | $2.38 | $(0.90) | -37.82% | [Condensed Consolidated Statements of Comprehensive Income (OMH)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(OMH)) OMH's comprehensive income decreased to $198 million, influenced by lower net income, partially offset by positive unrealized gains on available-for-sale securities Condensed Consolidated Statements of Comprehensive Income (OMH) | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | Change (millions) | | :--------------------------------------------------------------------- | :----------------------------------------- | :----------------------------------------- | :---------------- | | Net income | $179 | $303 | $(124) | | Net change in unrealized gains (losses) on non-credit impaired AFS securities | $24 | $(105) | $129 | | Other comprehensive income (loss), net of tax | $19 | $(47) | $66 | | Comprehensive income | $198 | $256 | $(58) | [Condensed Consolidated Statements of Shareholders' Equity (OMH)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(OMH)) OMH's total shareholders' equity increased to $3,081 million, driven by net income and other comprehensive income, partially offset by dividends and repurchases Condensed Consolidated Statements of Shareholders' Equity (OMH) | Metric | March 31, 2023 (millions) | January 1, 2023 (post-adoption) (millions) | Change (millions) | | :-------------------------------------- | :------------------------ | :--------------------------------------- | :---------------- | | Balance, January 1, 2023 (pre-adoption) | $3,015 | N/A | N/A | | Net impact of adoption of ASU 2022-02 | $12 | N/A | N/A | | Balance, January 1, 2023 (post-adoption)| N/A | $3,027 | N/A | | Net income | $179 | N/A | N/A | | Other comprehensive income | $19 | N/A | N/A | | Cash dividends | $(122) | N/A | N/A | | Common stock repurchased | $(27) | N/A | N/A | | Balance, March 31, 2023 | $3,081 | N/A | $66 | [Condensed Consolidated Statements of Cash Flows (OMH)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(OMH)) OMH's operating cash flow remained strong at $562 million, while investing activities shifted to a net use, and financing activities used less cash Condensed Consolidated Statements of Cash Flows (OMH) | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | Change (millions) | | :------------------------------------------------------------------ | :----------------------------------------- | :----------------------------------------- | :---------------- | | Net cash provided by operating activities | $562 | $552 | $10 | | Net cash provided by (used for) investing activities | $(204) | $50 | $(254) | | Net cash used for financing activities | $(242) | $(448) | $206 | | Net change in cash and cash equivalents and restricted cash equivalents | $116 | $154 | $(38) | | Cash and cash equivalents and restricted cash equivalents at end of period | $1,075 | $1,171 | $(96) | [Financial Statements of OneMain Finance Corporation and Subsidiaries (Unaudited)](index=11&type=section&id=Financial%20Statements%20of%20OneMain%20Finance%20Corporation%20and%20Subsidiaries%20(Unaudited)) This sub-section presents OMFC's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, equity, and cash flows [Condensed Consolidated Balance Sheets (OMFC)](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(OMFC)) OMFC's total assets slightly decreased to $22,432 million, mirroring OMH's trends with a minor decrease in net finance receivables Components of Condensed Consolidated Balance Sheets (OMFC) | Metric | March 31, 2023 (millions) | December 31, 2022 (millions) | Change (millions) | | :----------------------------------- | :-------------------------- | :--------------------------- | :---------------- | | Total assets | $22,432 | $22,527 | $(95) | | Net finance receivables | $19,809 | $19,986 | $(177) | | Cash and cash equivalents | $533 | $490 | $43 | | Total liabilities | $19,364 | $19,523 | $(159) | | Long-term debt | $18,206 | $18,281 | $(75) | | Total shareholder's equity | $3,068 | $3,004 | $64 | [Condensed Consolidated Statements of Operations (OMFC)](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(OMFC)) OMFC's net income decreased to $179 million, mirroring OMH's results, primarily due to a significant increase in provision for finance receivable losses Condensed Consolidated Statements of Operations (OMFC) | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | Change (millions) | Change (%) | | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :---------------- | :--------- | | Interest income | $1,094 | $1,089 | $5 | 0.46% | | Interest expense | $239 | $219 | $20 | 9.13% | | Net interest income | $855 | $870 | $(15) | -1.72% | | Provision for finance receivable losses | $385 | $238 | $147 | 61.76% | | Net interest income after provision for losses | $470 | $632 | $(162) | -25.63% | | Total other revenues | $177 | $162 | $15 | 9.26% | | Total other expenses | $412 | $395 | $17 | 4.30% | | Income before income taxes | $235 | $399 | $(164) | -41.10% | | Income taxes | $56 | $96 | $(40) | -41.67% | | Net income | $179 | $303 | $(124) | -40.92% | [Condensed Consolidated Statements of Comprehensive Income (OMFC)](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(OMFC)) OMFC's comprehensive income decreased to $198 million, consistent with OMH, due to lower net income partially offset by positive unrealized gains Condensed Consolidated Statements of Comprehensive Income (OMFC) | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | Change (millions) | | :--------------------------------------------------------------------- | :----------------------------------------- | :----------------------------------------- | :---------------- | | Net income | $179 | $303 | $(124) | | Net change in unrealized gains (losses) on non-credit impaired AFS securities | $24 | $(105) | $129 | | Other comprehensive income (loss), net of tax | $19 | $(47) | $66 | | Comprehensive income | $198 | $256 | $(58) | [Condensed Consolidated Statements of Shareholder's Equity (OMFC)](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholder's%20Equity%20(OMFC)) OMFC's total shareholder's equity increased to $3,068 million, driven by net income and other comprehensive income, partially offset by cash dividends Condensed Consolidated Statements of Shareholder's Equity (OMFC) | Metric | March 31, 2023 (millions) | January 1, 2023 (post-adoption) (millions) | Change (millions) | | :-------------------------------------- | :------------------------ | :--------------------------------------- | :---------------- | | Balance, January 1, 2023 (pre-adoption) | $3,004 | N/A | N/A | | Net impact of adoption of ASU 2022-02 | $12 | N/A | N/A | | Balance, January 1, 2023 (post-adoption)| N/A | $3,016 | N/A | | Net income | $179 | N/A | N/A | | Other comprehensive income | $19 | N/A | N/A | | Cash dividends | $(150) | N/A | N/A | | Balance, March 31, 2023 | $3,068 | N/A | $64 | [Condensed Consolidated Statements of Cash Flows (OMFC)](index=15&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(OMFC)) OMFC's operating cash flow remained strong at $562 million, while investing activities shifted to a net use, and financing activities used less cash Condensed Consolidated Statements of Cash Flows (OMFC) | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | Change (millions) | | :------------------------------------------------------------------ | :----------------------------------------- | :----------------------------------------- | :---------------- | | Net cash provided by operating activities | $562 | $553 | $9 | | Net cash provided by (used for) investing activities | $(204) | $50 | $(254) | | Net cash used for financing activities | $(245) | $(438) | $193 | | Net change in cash and cash equivalents and restricted cash equivalents | $113 | $165 | $(52) | | Cash and cash equivalents and restricted cash equivalents at end of period | $1,064 | $1,151 | $(87) | [Notes to the Condensed Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on business, accounting policies, recent pronouncements, and specific financial statement line items, including ASU 2018-12 and ASU 2022-02 impacts [1. Business and Basis of Presentation](index=16&type=section&id=1.%20Business%20and%20Basis%20of%20Presentation) OMH and OMFC are financial services holding companies in consumer finance and insurance, with statements prepared under GAAP, consolidating subsidiaries and VIEs - OMH and OMFC are financial services holding companies operating in consumer finance and insurance businesses[36](index=36&type=chunk) - The financial statements are prepared using GAAP and consolidate OMH, its subsidiaries, and VIEs where OMH is the primary beneficiary[37](index=37&type=chunk) [2. Recent Accounting Pronouncements](index=17&type=section&id=2.%20Recent%20Accounting%20Pronouncements) The company adopted ASU 2018-12 and ASU 2022-02, impacting insurance contracts, credit losses, and eliminating TDR accounting, with retrospective adjustments - Adopted ASU 2018-12 (Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts) effective January 1, 2023, using the modified retrospective transition method, recasting prior periods[41](index=41&type=chunk)[42](index=42&type=chunk) Effects of ASU 2018-12 Adoption on Condensed Consolidated Balance Sheets (December 31, 2022) | (dollars in millions) | As Reported | Adjustment | As Recast | | :-------------------- | :---------- | :--------- | :-------- | | Other assets (OMH) | $1,150 | $4 | $1,154 | | Insurance claims and policyholder liabilities | $602 | $18 | $620 | | Accumulated other comprehensive loss | $(119) | $(8) | $(127) | | Retained earnings (OMH) | $2,125 | $(6) | $2,119 | - Adopted ASU 2022-02 (Financial Instruments - Credit Losses: Troubled Debt Restructurings and Vintage Disclosures) effective January 1, 2023, using the modified retrospective transition method[48](index=48&type=chunk)[49](index=49&type=chunk) - Upon adoption of ASU 2022-02, recorded a **$16 million decrease** to the allowance for finance receivable losses and a **$12 million cumulative increase** to retained earnings, net of tax[49](index=49&type=chunk) - ASU 2022-02 eliminated the accounting for troubled debt restructurings (TDRs) and introduced new policies for modified finance receivables to borrowers experiencing financial difficulty[51](index=51&type=chunk)[52](index=52&type=chunk) [3. Finance Receivables](index=21&type=section&id=3.%20Finance%20Receivables) Finance receivables, primarily personal loans, slightly decreased, with delinquency status as a key indicator, and modified receivables to distressed borrowers totaling $222 million Components of Net Finance Receivables | (dollars in millions) | March 31, 2023 | December 31, 2022 | | :-------------------- | :------------- | :---------------- | | Personal Loans | $19,687 | $19,879 | | Credit Cards | $122 | $107 | | Total | $19,809 | $19,986 | - Sold **$180 million** of gross finance receivables during the three months ended March 31, 2023 and 2022, generating a gain of **$17 million** in both periods[66](index=66&type=chunk) - Delinquency status is the key credit quality indicator; personal loans are nonperforming at 90+ days past due[67](index=67&type=chunk)[68](index=68&type=chunk) Modified Finance Receivables to Borrowers Experiencing Financial Difficulty (Q1 2023) | (dollars in millions) | Three Months Ended March 31, 2023 | | :------------------------------------------------ | :-------------------------------- | | Total modifications to borrowers experiencing financial difficulties | $222 | | Modifications as a percent of net finance receivables | 1.13 % | | Weighted-average interest rate reduction | 21.32 % | | Weighted-average term extension (months) | 19 | | Principal/interest forgiveness | $11 | - Unfunded lending commitments (unused credit card lines) totaled **$99 million** at March 31, 2023, up from **$81 million** at December 31, 2022[81](index=81&type=chunk) [4. Allowance for Finance Receivable Losses](index=25&type=section&id=4.%20Allowance%20for%20Finance%20Receivable%20Losses) Allowance for finance receivable losses decreased to $2,298 million due to ASU 2022-02 adoption, while provision for losses significantly increased year-over-year - The allowance for finance receivable losses is estimated using a cumulative loss model, historical loss experience, and macroeconomic forecasts (e.g., unemployment rates)[56](index=56&type=chunk)[84](index=84&type=chunk) Changes in Allowance for Finance Receivable Losses (Q1 2023 vs Q1 2022) | (dollars in millions) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Balance at beginning of period | $2,311 | $2,095 | | Impact of adoption of ASU 2022-02 | $(16) | — | | Provision for finance receivable losses | $385 | $238 | | Charge-offs | $(451) | $(329) | | Recoveries | $69 | $67 | | Balance at end of period | $2,298 | $2,071 | - The allowance for finance receivable losses as a percentage of net finance receivables for personal loans increased from **10.92% in Q1 2022 to 11.55% in Q1 2023**, primarily due to an increase in delinquent personal loans and a weaker macroeconomic outlook[196](index=196&type=chunk) [5. Investment Securities](index=26&type=section&id=5.%20Investment%20Securities) Investment securities totaled $1,786 million, with unrealized losses decreasing to $146 million due to interest rate changes, and no material credit impairments Available-for-Sale Securities (Fair Value and Unrealized Losses) | (dollars in millions) | March 31, 2023 Fair Value | March 31, 2023 Unrealized Losses | December 31, 2022 Fair Value | December 31, 2022 Unrealized Losses | | :-------------------- | :------------------------ | :------------------------------- | :--------------------------- | :-------------------------------- | | Total AFS Securities | $1,716 | $(146) | $1,729 | $(169) | - Unrealized losses are not considered credit-related, primarily due to changes in interest rates and market spreads. The company does not plan to sell these securities before recovery of their amortized cost[90](index=90&type=chunk) Contractual Maturities of Fixed-Maturity Available-for-Sale Securities (March 31, 2023) | (dollars in millions) | Fair Value | Amortized Cost | | :-------------------- | :--------- | :------------- | | Due in 1 year or less | $192 | $194 | | Due after 1 year through 5 years | $544 | $571 | | Due after 5 years through 10 years | $532 | $592 | | Due after 10 years | $137 | $158 | | Mortgage-backed, asset-backed, and collateralized securities | $311 | $344 | | Total | $1,716 | $1,859 | Other Securities Fair Value | (dollars in millions) | March 31, 2023 | December 31, 2022 | | :-------------------- | :------------- | :---------------- | | Bonds | $21 | $23 | | Preferred stock | $16 | $15 | | Common stock | $33 | $33 | | Total | $70 | $71 | [6. Long-term Debt](index=29&type=section&id=6.%20Long-term%20Debt) Total long-term debt was $18,206 million, with maturities spread across debt types, and a $1.25 billion unsecured corporate revolver undrawn Principal Maturities of Long-term Debt by Type (March 31, 2023) | (dollars in millions) | Securitizations | Private Secured Term Funding | Revolving Conduit Facilities | Unsecured Notes | Junior Subordinated Debt | Total | | :-------------------- | :-------------- | :--------------------------- | :--------------------------- | :-------------- | :----------------------- | :---- | | Total principal maturities | $9,654 | $350 | $100 | $8,027 | $350 | $18,481 | | Total carrying amount | $9,611 | $349 | $100 | $7,974 | $172 | $18,206 | - The unsecured corporate revolver has a maximum borrowing capacity of **$1.25 billion**, with no amounts drawn at March 31, 2023[101](index=101&type=chunk) [7. Variable Interest Entities](index=30&type=section&id=7.%20Variable%20Interest%20Entities) The company consolidates VIEs for asset-backed financing, with $12,858 million in assets and $10,080 million in liabilities, and completed one securitization Carrying Amounts of Consolidated VIE Assets and Liabilities | (dollars in millions) | March 31, 2023 | December 31, 2022 | | :-------------------- | :------------- | :---------------- | | Net finance receivables | $11,108 | $10,432 | | Long-term debt | $10,060 | $9,361 | - Consolidated interest expense related to VIEs totaled **$101 million** for Q1 2023, up from **$65 million** in Q1 2022[105](index=105&type=chunk) - Completed one personal loan securitization (ODART 2023-1) during Q1 2023, issuing **$750 million** of notes backed by direct auto loans[203](index=203&type=chunk)[226](index=226&type=chunk) - At March 31, 2023, **$100 million** was drawn under revolving conduit facilities, with a remaining borrowing capacity of **$6.1 billion**[109](index=109&type=chunk) - Private secured term funding had **$350 million** outstanding at March 31, 2023, with no principal payments required until after April 25, 2025[107](index=107&type=chunk) [8. Insurance](index=31&type=section&id=8.%20Insurance) Insurance operations include short-duration contract reserves of $92 million and long-duration liabilities of $373 million, with ASU 2018-12 impacting presentation Changes in Reserve for Unpaid Claims (Short-Duration Contracts) | (dollars in millions) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net balance at beginning of period | $90 | $99 | | Additions for losses and loss adjustment expenses incurred | $41 | $40 | | Reductions for losses and loss adjustment expenses paid | $(39) | $(40) | | Net balance at end of period | $92 | $99 | Net Liability for Future Policy Benefits (Long-Duration Contracts) | (dollars in millions) | March 31, 2023 | March 31, 2022 | | :-------------------- | :------------- | :------------- | | Term and Whole Life | $227 | $258 | | Accidental Death and Disability Protection | $77 | $86 | | Deferred profit liability | $70 | $77 | | Total net liability for future policy benefits | $373 | $421 | - The weighted-average duration of the liability for future policy benefits was **8 years** at both March 31, 2023 and 2022[114](index=114&type=chunk) Expected vs. Actual Mortality/Morbidity and Lapses | Metric | Q1 2023 Expected | Q1 2023 Actual | Q1 2022 Expected | Q1 2022 Actual | | :-------------------- | :--------------- | :------------- | :--------------- | :------------- | | Mortality/Morbidity | 0.39% | 0.31% | 0.40% | 0.43% | | Lapses | 3.18% | 1.67% | 2.70% | 0.96% | [9. Capital Stock and Earnings Per Share (OMH Only)](index=35&type=section&id=9.%20Capital%20Stock%20and%20Earnings%20Per%20Share%20(OMH%20Only)) OMH's common stock outstanding decreased to 120,587,214 shares due to repurchases, with diluted earnings per share at $1.48 for Q1 2023, down from $2.38 Changes in OMH Common Stock Issued and Outstanding | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Balance at beginning of period | 121,042,125 | 127,809,640 | | Common stock issued | 207,403 | 252,277 | | Common stock repurchased | (683,384) | (2,282,552) | | Treasury stock issued | 21,070 | 14,471 | | Balance at end of period | 120,587,214 | 125,793,836 | Earnings Per Share (OMH Only) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net income (millions) | $179 | $303 | | Basic EPS | $1.48 | $2.38 | | Diluted EPS | $1.48 | $2.38 | [10. Accumulated Other Comprehensive Income (Loss)](index=36&type=section&id=10.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Accumulated Other Comprehensive Income (Loss) improved to $(108) million, driven by positive changes in unrealized gains on available-for-sale securities Changes in Accumulated Other Comprehensive Income (Loss) | (dollars in millions) | Balance at beginning of period | Other comprehensive income (loss) before reclassifications | Balance at end of period | | :-------------------- | :----------------------------- | :------------------------------------------------------- | :----------------------- | | March 31, 2023 | $(127) | $19 | $(108) | | March 31, 2022 | $5 | $(45) | $(42) | [11. Income Taxes](index=37&type=section&id=11.%20Income%20Taxes) Net deferred tax asset decreased to $438 million, with an effective tax rate of 24.0% for Q1 2023, consistent with the prior year Income Tax Metrics | Metric | March 31, 2023 (millions) | December 31, 2022 (millions) | | :-------------------------- | :------------------------ | :--------------------------- | | Net deferred tax asset | $438 | $456 | | Gross unrecognized tax benefits | $6 | $6 | Effective Tax Rate | Period | Effective Tax Rate | | :-------------------------- | :----------------- | | Three Months Ended March 31, 2023 | 24.0% | | Three Months Ended March 31, 2022 | 24.1% | [12. Contingencies](index=38&type=section&id=12.%20Contingencies) The company faces various legal actions and governmental inquiries, including a CFPB inquiry regarding refunding practices for optional insurance products - The company is subject to inquiries and investigations by federal, state, and local governmental authorities, which may result in fines, restitution, or other penalties[132](index=132&type=chunk) - The CFPB is considering legal action against the company regarding alleged violations related to refunding practices for optional insurance and membership plan products[136](index=136&type=chunk) - The company does not currently believe the outcome of the CFPB matter will have a material adverse effect on its business, financial condition, or results of operations[136](index=136&type=chunk) [13. Segment Information](index=39&type=section&id=13.%20Segment%20Information) The Consumer and Insurance (C&I) segment is the sole reportable segment, with income before tax decreasing due to higher provision for finance receivable losses - Consumer and Insurance (C&I) is the company's only reportable segment[138](index=138&type=chunk) Segment Financial Performance (Q1 2023 vs Q1 2022) | (dollars in millions) | Consumer and Insurance (2023) | Consumer and Insurance (2022) | Other (2023) | Other (2022) | | :-------------------- | :---------------------------- | :---------------------------- | :----------- | :----------- | | Interest income | $1,092 | $1,087 | $1 | $1 | | Interest expense | $238 | $217 | — | $1 | | Provision for finance receivable losses | $385 | $237 | — | — | | Income (loss) before income tax expense (benefit) | $236 | $399 | $(1) | — | | Assets | $21,199 | $19,756 | $30 | $40 | [14. Fair Value Measurements](index=40&type=section&id=14.%20Fair%20Value%20Measurements) The company measures financial instruments using a three-level hierarchy, with total fair value of assets at $2,418 million and long-term debt predominantly Level 2 Fair Value Measurements of Financial Instruments (March 31, 2023) | (dollars in millions) | Level 1 | Level 2 | Level 3 | Total Fair Value | Total Carrying Value | | :-------------------- | :------ | :------ | :------ | :--------------- | :------------------- | | **Assets** | | | | | | | Cash and cash equivalents | $538 | $6 | — | $544 | $544 | | Investment securities | $52 | $1,729 | $5 | $1,786 | $1,786 | | Net finance receivables, less allowance for finance receivable losses | — | — | $19,150 | $19,150 | $17,511 | | Restricted cash and restricted cash equivalents | $531 | — | — | $531 | $531 | | Other assets | — | — | $41 | $41 | $31 | | **Liabilities** | | | | | | | Long-term debt | — | $17,057 | — | $17,057 | $18,206 | Recurring Fair Value Measurements for Assets (March 31, 2023) | (dollars in millions) | Level 1 | Level 2 | Level 3 | Total Carried At Fair Value | | :-------------------- | :------ | :------ | :------ | :-------------------------- | | Cash equivalents in mutual funds | $109 | — | — | $109 | | Investment securities | $52 | $1,729 | $5 | $1,786 | | Restricted cash equivalents in mutual funds | $517 | — | — | $517 | | Total | $678 | $1,735 | $5 | $2,418 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for Q1 2023, covering performance, credit quality, and liquidity [Forward-Looking Statements](index=44&type=section&id=Forward-Looking%20Statements) This section cautions that actual results may differ materially from forward-looking statements due to various risks, including economic conditions and regulatory changes - Forward-looking statements are subject to risks, uncertainties, assumptions, and other important factors that may cause actual results to differ materially[150](index=150&type=chunk) - Key risk factors include adverse changes in economic conditions, sufficiency of allowance for finance receivable losses, increased unemployment, inflation, cyber-attacks, regulatory changes, and substantial indebtedness[152](index=152&type=chunk) [Overview](index=45&type=section&id=Overview) OneMain operates in the US, offering personal loans, credit cards, and insurance, managing 2.56 million customer accounts and $20.6 billion in receivables - OneMain offers personal loans, BrightWay and BrightWay+ credit cards, and optional credit and non-credit insurance products[153](index=153&type=chunk)[156](index=156&type=chunk) Managed Accounts and Receivables | Metric | March 31, 2023 | December 31, 2022 | | :---------------------- | :------------- | :---------------- | | Total customer accounts | 2.56 million | 2.56 million | | Managed receivables | $20.6 billion | $20.8 billion | - Personal loans totaled **$19.7 billion** of net finance receivables at March 31, 2023, with **52% secured** by titled property[156](index=156&type=chunk) - Credit cards had approximately **161 thousand** open accounts totaling **$122 million** of net finance receivables at March 31, 2023[156](index=156&type=chunk) [Recent Developments and Outlook](index=46&type=section&id=Recent%20Developments%20and%20Outlook) Recent developments include an ongoing stock repurchase program and a personal loan securitization, with the company actively monitoring macroeconomic conditions - As of March 31, 2023, the company had **$698 million** of authorized share repurchase capacity remaining under its **$1.0 billion** stock repurchase program, which expires on December 31, 2024[157](index=157&type=chunk) - OMH declared a cash dividend of **$1.00 per share** payable on February 24, 2023, totaling **$121 million**[211](index=211&type=chunk) - The company is actively monitoring macroeconomic conditions (unemployment, inflation, interest rates, consumer confidence) and is prepared for potential impacts on its business[161](index=161&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) OMH's consolidated net income decreased by 40.9% to $179 million, primarily due to a 61.8% increase in the provision for finance receivable losses OMH's Consolidated Operating Results (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | Change (millions) | Change (%) | | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :---------------- | :--------- | | Interest income | $1,094 | $1,089 | $5 | 0.46% | | Interest expense | $239 | $219 | $20 | 9.13% | | Provision for finance receivable losses | $385 | $238 | $147 | 61.76% | | Net income | $179 | $303 | $(124) | -40.92% | | Diluted Earnings per share | $1.48 | $2.38 | $(0.90) | -37.82% | | Gross charge-off ratio | 9.21 % | 6.98 % | 2.23 pp | 31.95% | | Net charge-off ratio | 7.80 % | 5.57 % | 2.23 pp | 40.04% | - Interest income increased by **$5 million** (less than 1%) due to growth in average net receivables, partially offset by lower yield[167](index=167&type=chunk) - Interest expense increased by **$20 million** (9%) due to a higher average cost of funds and an increase in average debt[168](index=168&type=chunk) - Other revenues increased by **$15 million** (10%) primarily due to higher investment revenue[170](index=170&type=chunk) Non-GAAP Financial Measures (Q1 2023 vs Q1 2022) | (dollars in millions) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Adjusted pretax income | $236 | $401 | | Pretax capital generation | $239 | $376 | [Segment Results](index=50&type=section&id=Segment%20Results) The C&I segment's adjusted pretax income decreased to $236 million, primarily driven by a 62% increase in the provision for finance receivable losses C&I Adjusted Pretax Income and Selected Financial Statistics (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | Change (millions) | Change (%) | | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :---------------- | :--------- | | Interest income | $1,092 | $1,087 | $5 | 0.46% | | Interest expense | $238 | $217 | $21 | 9.68% | | Provision for finance receivable losses | $385 | $237 | $148 | 62.45% | | Adjusted pretax income | $236 | $401 | $(165) | -41.15% | | Net finance receivables | $19,810 | $18,981 | $829 | 4.37% | | Average net receivables | $19,882 | $19,086 | $796 | 4.17% | | Personal loans origination volume | $2,817 | $2,959 | $(142) | -4.80% | | Personal loans 30-89 Delinquency ratio | 2.58 % | 2.25 % | 0.33 pp | 14.67% | - Other revenues for C&I increased by **$18 million** (11%) due to higher investment revenue[184](index=184&type=chunk) - Other expenses for C&I increased by **$19 million** (5%) due to higher salaries and benefits and general operating expenses[185](index=185&type=chunk) [Credit Quality](index=52&type=section&id=Credit%20Quality) Net finance receivables slightly decreased, with personal loan delinquency ratios increasing and the allowance for losses rising due to a weaker macroeconomic outlook Net Finance Receivables Delinquency (March 31, 2023 vs December 31, 2022) | (dollars in millions) | Personal Loans (Mar 31, 2023) | Credit Cards (Mar 31, 2023) | Personal Loans (Dec 31, 2022) | Credit Cards (Dec 31, 2022) | | :-------------------- | :---------------------------- | :-------------------------- | :---------------------------- | :-------------------------- | | Current | $18,646 | $106 | $18,726 | $93 | | 30-89 days past due | $508 | $7 | $610 | $6 | | 90+ days past due | $534 | $9 | $544 | $8 | | Total net finance receivables | $19,688 | $122 | $19,880 | $107 | Delinquency Ratios (March 31, 2023 vs December 31, 2022) | Metric | Personal Loans (Mar 31, 2023) | Credit Cards (Mar 31, 2023) | Personal Loans (Dec 31, 2022) | Credit Cards (Dec 31, 2022) | | :-------------------- | :---------------------------- | :-------------------------- | :---------------------------- | :-------------------------- | | 30-89 days past due | 2.58 % | 5.58 % | 3.07 % | 5.90 % | | 90+ days past due | 2.72 % | 7.00 % | 2.74 % | 7.18 % | Allowance Ratio for Finance Receivable Losses | Metric | March 31, 2023 | March 31, 2022 | | :-------------------- | :------------- | :------------- | | Personal Loans | 11.55 % | 10.92 % | | Credit Cards | 19.25 % | 19.99 % | | Consolidated Total | 11.60 % | 10.91 % | - The increase in the personal loan allowance ratio is primarily due to an increase in delinquent personal loans (30+ days past due) and a weaker macroeconomic outlook[196](index=196&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) The company finances operations through cash flows and debt, maintaining $8.5 billion in unencumbered loans and $6.1 billion in revolving conduit capacity - OMH generated net income of **$179 million** and net cash inflow from operating and investing activities of **$358 million** for Q1 2023[200](index=200&type=chunk) - At March 31, 2023, the company had **$8.5 billion** of unencumbered loans[200](index=200&type=chunk) OMFC's Long-Term Corporate Debt Ratings (March 31, 2023) | Rating Agency | Rating | Outlook | | :------------ | :----- | :------ | | S&P | BB | Stable | | Moody's | Ba2 | Stable | | KBRA | BB+ | Positive | - OMH repurchased **683,384 shares** of common stock for **$27 million** during Q1 2023[209](index=209&type=chunk) - At March 31, 2023, **$100 million** was drawn under revolving conduit facilities, with a remaining borrowing capacity of **$6.1 billion**[203](index=203&type=chunk) - The company sold **$180 million** of gross finance receivables through whole loan sale transactions during Q1 2023[214](index=214&type=chunk) - At March 31, 2023, cash and cash equivalents totaled **$544 million**, with **$177 million** held at regulated insurance subsidiaries or for other operating activities and unavailable for general corporate purposes[218](index=218&type=chunk) [Critical Accounting Policies and Estimates](index=59&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The allowance for finance receivable losses remains a critical accounting policy, while TDR accounting was removed due to ASU 2022-02 adoption - The allowance for finance receivable losses is considered a critical accounting policy due to critical accounting estimates and significant management judgment[231](index=231&type=chunk) - TDR finance receivables were removed as a critical accounting policy and estimate due to ASU 2022-02 superseding the accounting for troubled debt restructurings[232](index=232&type=chunk) [Recent Accounting Pronouncements](index=59&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for detailed discussion of recently issued accounting pronouncements and their impact on financial reporting - Refer to Note 2 for discussion of recently issued accounting pronouncements[233](index=233&type=chunk) [Seasonality](index=59&type=section&id=Seasonality) Personal loan volume typically peaks in Q2 and Q4, while delinquencies are lower in Q1 and Q2, influencing operating results and cash needs - Personal loan volume is generally highest during the second and fourth quarters and lower in January and February[234](index=234&type=chunk) - Delinquencies on personal loans are generally lower in the first and second quarters and tend to rise throughout the remainder of the year[234](index=234&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the company's market risk disclosures previously reported in its Annual Report on Form 10-K - No material changes to market risk disclosures previously disclosed in Part II - Item 7A of the Annual Report[235](index=235&type=chunk) [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures for OMH and OMFC, with no material changes in internal control [Controls and Procedures of OneMain Holdings, Inc.](index=60&type=section&id=Controls%20and%20Procedures%20of%20OneMain%20Holdings%2C%20Inc.) OMH's disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control over financial reporting - OMH's disclosure controls and procedures were effective as of March 31, 2023[238](index=238&type=chunk) - No material changes in OMH's internal control over financial reporting occurred during the first quarter of 2023[239](index=239&type=chunk) [Controls and Procedures of OneMain Finance Corporation](index=60&type=section&id=Controls%20and%20Procedures%20of%20OneMain%20Finance%20Corporation) OMFC's disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control over financial reporting - OMFC's disclosure controls and procedures were effective as of March 31, 2023[241](index=241&type=chunk) - No material changes in OMFC's internal control over financial reporting occurred during the first quarter of 2023[242](index=242&type=chunk) [PART II — OTHER INFORMATION](index=61&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, and other miscellaneous information [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 12 of the Condensed Consolidated Financial Statements for detailed information regarding legal proceedings and contingencies - Refer to Note 12 of the Notes to the Condensed Consolidated Financial Statements for information on legal proceedings[244](index=244&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the comprehensive discussion of risk factors in the company's Annual Report on Form 10-K - Refer to Part I - Item 1A. "Risk Factors" in the Annual Report for factors that could materially affect the business[245](index=245&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of common stock occurred, while the company repurchased 683,384 shares for $27 million, with $698 million remaining in the program - No unregistered sales of common stock occurred during the quarter ended March 31, 2023[246](index=246&type=chunk) Issuer Purchases of Equity Securities (Q1 2023) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | | :---------------------- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------------------- | | January 1 - January 31 | 265,224 | $37.70 | $715,533,796 | | February 1 - February 28 | 214,367 | $44.31 | $706,034,301 | | March 1 - March 31 | 203,793 | $39.26 | $698,033,606 | | Total | 683,384 | $40.24 | N/A | [Item 3. Defaults Upon Senior Securities](index=61&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities[248](index=248&type=chunk) [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures during the period - No mine safety disclosures[249](index=249&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) The company reported no other information requiring disclosure in this section - No other information[250](index=250&type=chunk) [Item 6. Exhibit Index](index=62&type=section&id=Item%206.%20Exhibit%20Index) This section provides an index of exhibits filed as part of the Form 10-Q, including bylaws and certifications - The exhibit index includes Amended and Restated Bylaws, Rule 13a-14(a)/15d-14(a) Certifications, Section 1350 Certifications, and Interactive data files (Inline XBRL)[252](index=252&type=chunk) [SIGNATURES](index=63&type=section&id=SIGNATURES) This section contains the official signatures certifying the accuracy and completeness of the report [OneMain Holdings, Inc. Signature](index=63&type=section&id=OneMain%20Holdings%2C%20Inc.%20Signature) This section contains the signature of Micah R. Conrad, EVP and CFO, certifying the report on behalf of OneMain Holdings, Inc [OneMain Finance Corporation Signature](index=64&type=section&id=OneMain%20Finance%20Corporation%20Signature) This section contains the signature of Matthew W. Vaughan, VP and CFO, certifying the report on behalf of OneMain Finance Corporation

Financial Performance - The company reported $2.8 billion in originations with a conservative credit posture[9] - Managed receivables reached $20.6 billion, a 6% year-over-year increase[9] - Net interest margin was 17.4%, with a loan portfolio yield of 22.3%[9] - The company declared a dividend of $1.00 per share, resulting in an approximate 10% dividend yield[9] - Net income for the quarter was $179 million[9] Credit Quality - Loan net charge-offs were 7.7%[9] - 30-89 day loan delinquency rate was 2.58%[9] - Credit card receivables totaled $122 million, covering over 160,000 cards[9] Liquidity and Funding - The company has $7.3 billion in undrawn bank facilities and $8.5 billion in unencumbered loans[9] - A $750 million auto ABS issuance was completed with a 5.6% interest rate for a 3-year revolving facility[9] Operational Efficiency - The operating expense ratio was 7.1%, a decrease of 10 basis points year-over-year[9] - Net leverage was 5.4x, down 0.1x quarter-over-quarter[9] Portfolio and Originations - First quarter originations were $2.8 billion[9] - Post tightening originations now represent 38% of portfolio[61]

Financial Data and Key Metrics Changes - The company reported a net income of $179 million for Q1 2023, down from $282 million a year ago, with diluted earnings per share at $1.48 compared to $2.38 in Q1 2022 [22][9][20] - Managed receivables were $20.6 billion, a slight decrease from the previous quarter but an increase of $1.1 billion or 6% year-over-year [24][22] - Loan net charge-offs were 7.7%, consistent with expectations, with a provision expense of $385 million [31][22] Business Line Data and Key Metrics Changes - The company achieved $2.8 billion in loan originations during the quarter, despite a tighter credit box, indicating strong demand for loan products [10][23] - The BrightWay credit card program had over 160,000 customers and $122 million in receivables, with a focus on conservative credit standards [17][16] - Interest income remained flat at $1.1 billion, with a yield of 22.3%, down 80 basis points year-over-year [25][22] Market Data and Key Metrics Changes - The delinquency rate for loans aged 30 to 89 days was 2.58%, down 49 basis points from the previous quarter, reflecting improved credit quality [12][28] - The company noted a constructive competitive environment, with a significant portion of new customer originations coming from higher credit quality segments [11][9] Company Strategy and Development Direction - The company aims to maintain a conservative credit posture while capitalizing on strong demand and competitive dynamics [15][9] - There is a focus on digital innovation and enhancing customer experience through new digital tools and capabilities [19][18] - The company is committed to a disciplined approach to underwriting and is prepared to adjust strategies based on economic conditions [15][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about low unemployment and a potential reduction in inflation, while remaining cautious due to economic uncertainties [15][9] - The company is positioned to adapt to various macroeconomic environments, emphasizing a strong balance sheet and liquidity [15][37] - Future expectations include a gradual improvement in yield and a focus on maintaining profitability despite economic challenges [22][31] Other Important Information - The company repurchased approximately 700,000 shares for $27 million during the first quarter, maintaining a strategic approach to share buybacks [20][22] - The adoption of a new accounting standard impacted the company's CECL reserves, resulting in a net change of $17 million [32][22] Q&A Session Summary Question: Any updates on guidance or trends? - Management indicated no material updates to strategic priorities, with receivables growth trending towards mid-single digits and expectations for yield improvement [43] Question: Insights on customer acquisition costs and quality? - The company is seeing a higher percentage of business from higher credit quality customers without increasing acquisition costs, attributed to a strong balance sheet and effective marketing [45] Question: Funding costs and margin improvements? - The majority of the company's debt is fixed rate, providing stability in funding costs, with expectations for gradual improvements in margins [51] Question: Impact of inflation on credit performance? - Management noted that while inflation remains a challenge, a decrease in inflation could lead to better credit performance [66] Question: Comparison of pre and post-tightening loans? - Post-tightening loans are expected to perform better, with anticipated delinquency levels moving back towards pre-pandemic levels if economic conditions remain stable [100] Question: Long-term return on receivables expectations? - Management remains confident in achieving long-term returns on receivables around 6%, supported by strong demand and operational efficiencies [102]

[Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) This chapter outlines the inherent risks and uncertainties associated with forward-looking statements, advising caution against undue reliance - The report contains forward-looking statements subject to risks, uncertainties, and assumptions that may cause actual results to differ materially from current expectations. Readers are cautioned not to place undue reliance on these statements[14](index=14&type=chunk) - Key factors that could cause material differences include adverse changes in economic conditions (interest rates, inflation, unemployment), information system failures, increased competition, changes in regulations, substantial indebtedness, and credit rating downgrades[15](index=15&type=chunk) [PART I](index=9&type=section&id=PART%20I) [Item 1. Business](index=9&type=section&id=Item%201.%20Business) OneMain Holdings provides personal loans and credit cards to nonprime customers through an omnichannel model, supported by insurance products and a commitment to social responsibility - OneMain Holdings, Inc. (OMH) and its wholly-owned subsidiary OneMain Finance Corporation (OMFC) operate as a combined entity, providing personal loans and credit cards primarily to nonprime customers[20](index=20&type=chunk)[21](index=21&type=chunk) - The company serves approximately **2.47 million customer accounts** with **$20.0 billion in finance receivables** and manages a total of **2.56 million accounts** and **$20.8 billion in managed receivables** as of December 31, 2022[21](index=21&type=chunk) - Operations are conducted through a network of approximately **1,400 branch locations** in 44 states, complemented by online lending and servicing capabilities[22](index=22&type=chunk) - The company's offerings include personal loans (secured/unsecured, fixed-rate, 3-6 year terms), BrightWay and BrightWay+ credit cards, and optional credit and non-credit insurance products through its subsidiaries AHL and Triton[25](index=25&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) - A key competitive strength is its omnichannel operating model, combining a national branch network with digital capabilities, proprietary underwriting, and sophisticated data analytics for effective risk management[57](index=57&type=chunk) - The company is committed to Corporate Social Responsibility (CSR), focusing on financial wellness, community contributions, and diversity and inclusion initiatives, including issuing Social Bonds to support credit-disadvantaged communities[66](index=66&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from adverse economic conditions, credit losses, operational failures, regulatory changes, intense competition, and substantial indebtedness - Economic downturns, including high unemployment, inflation, and interest rates, disproportionately affect nonprime borrowers, increasing credit risks and potentially reducing revenues and cash flows[79](index=79&type=chunk)[80](index=80&type=chunk) - Inadequate allowance for finance receivable losses, based on estimates and assumptions, could lead to increased provision for losses and adversely affect results of operations[83](index=83&type=chunk)[84](index=84&type=chunk) - Information system failures, cyber-attacks, and data breaches pose significant reputational, financial, legal, and operational risks, especially with an increased remote workforce[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - The highly competitive consumer finance industry, coupled with extensive federal and state regulations (including Dodd-Frank Act and CFPB oversight), can increase compliance costs, limit product offerings, and lead to enforcement actions[112](index=112&type=chunk)[113](index=113&type=chunk)[122](index=122&type=chunk) - Significant indebtedness could limit financial flexibility, increase borrowing costs, and make the company vulnerable to economic changes, with an inability to access adequate liquidity sources posing a going concern risk[135](index=135&type=chunk)[139](index=139&type=chunk) [Item 1B. Unresolved Staff Comments](index=33&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - The company has no unresolved staff comments[164](index=164&type=chunk) [Item 2. Properties](index=33&type=section&id=Item%202.%20Properties) The company's properties include approximately 1,400 leased branch locations and owned administrative and servicing facilities - The company operates approximately **1,400 leased branch locations** in 44 states[165](index=165&type=chunk) - Administrative offices are leased in Wilmington, Delaware; Irving, Texas; Charlotte, North Carolina; and New York, New York, with lease terms expiring between 2023 and 2028[166](index=166&type=chunk) - Owned properties include a loan servicing facility in London, Kentucky, and six buildings in Evansville, Indiana, which support administrative and centralized functions[167](index=167&type=chunk) [Item 3. Legal Proceedings](index=33&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 14 of the Consolidated Financial Statements - Legal proceedings information is incorporated by reference from Note 14 of the Notes to the Consolidated Financial Statements[168](index=168&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no mine safety disclosures to report - The company has no mine safety disclosures[169](index=169&type=chunk) [PART II](index=34&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=34&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) OMH common stock is listed on NYSE, with a quarterly dividend policy and an active stock repurchase program, while OMFC stock is privately held - OMH's common stock is listed on the NYSE under the symbol "OMF". As of January 31, 2023, there were **120,811,795 shares outstanding**[4](index=4&type=chunk)[171](index=171&type=chunk) - OMH intends to pay a minimum quarterly dividend of **$1.00 per share**, but all subsequent dividends are at the Board's discretion, dependent on financial condition, earnings, cash flows, and capital requirements[172](index=172&type=chunk)[267](index=267&type=chunk) OMH Common Stock Repurchases (Q4 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Dollar Value of Shares That May Yet Be Purchased | | :----------------------- | :------------------------------- | :--------------------------- | :--------------------------------------------- | | October 1 - October 31 | 659,386 | $31.85 | $761,198,965 | | November 1 - November 30 | 480,726 | $37.79 | $743,032,987 | | December 1 - December 31 | 481,529 | $36.34 | $725,533,397 | | **Total** | **1,621,641** | **$34.94** | | - In 2022, OMH repurchased **7,181,023 shares** for **$303 million** under a **$1 billion stock repurchase program** authorized until December 31, 2024, with **$726 million remaining capacity**[175](index=175&type=chunk)[192](index=192&type=chunk)[263](index=263&type=chunk) - OMFC's common stock is entirely held by OMH, and no public trading market exists for it[173](index=173&type=chunk) [Item 6. [Reserved]](index=35&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes OneMain's financial performance, recent developments, and outlook, covering operating results, credit quality, liquidity, and capital resources [Overview](index=37&type=section&id=Overview) OneMain provides personal loans and credit cards to nonprime customers, with the C&I segment managing $20.8 billion in receivables, driven by key financial performance indicators - OneMain operates in the U.S., offering personal loans and BrightWay/BrightWay+ credit cards, along with optional credit and non-credit insurance products, primarily to nonprime customers[181](index=181&type=chunk)[185](index=185&type=chunk) - As of December 31, 2022, the Consumer and Insurance (C&I) segment was the sole reportable segment, managing **2.56 million customer accounts** and **$20.8 billion in managed receivables**[183](index=183&type=chunk) - The company monitors key performance drivers including interest income, interest expense, net credit losses, operating expenses, and finance receivables originations and purchase volume[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) [Recent Developments and Outlook](index=39&type=section&id=Recent%20Developments%20and%20Outlook) This section details 2022 corporate actions, including stock repurchases, debt funding, and redemptions, alongside management's macroeconomic monitoring and risk adjustment strategies - In 2022, OMH authorized a **$1.0 billion stock repurchase program**, with **$726 million remaining capacity** as of December 31, 2022[192](index=192&type=chunk) - OMFC completed a **$350 million private secured term funding** and its first **$600 million social securitization (OMFIT 2022-S1)** in April 2022, aimed at promoting financial inclusion for rural, lower-income borrowers[194](index=194&type=chunk)[195](index=195&type=chunk) - OMFC redeemed **$637 million of its 8.875% Senior Notes due 2025** and increased its unsecured corporate revolver capacity to **$1.25 billion**, with no amounts drawn as of December 31, 2022[197](index=197&type=chunk)[198](index=198&type=chunk) - Management is actively monitoring macroeconomic developments (geopolitical actions, unemployment, inflation, interest rates) and is prepared to adjust its allowance for finance receivable losses accordingly[204](index=204&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section analyzes the company's consolidated operating results, highlighting trends in interest income, expenses, provision for losses, and key financial metrics OMH's Consolidated Operating Results (2020-2022) | (dollars in millions, except per share amounts) | 2022 | 2021 | 2020 | | :---------------------------------------------- | :------ | :------ | :------ | | Interest income | $4,435 | $4,364 | $4,368 | | Interest expense | $892 | $937 | $1,027 | | Provision for finance receivable losses | $1,402 | $593 | $1,319 | | Net interest income after provision | $2,141 | $2,834 | $2,022 | | Other revenues | $629 | $531 | $526 | | Other expenses | $1,607 | $1,624 | $1,571 | | Income before income taxes | $1,163 | $1,741 | $977 | | Income taxes | $285 | $427 | $247 | | Net income | $878 | $1,314 | $730 | | Diluted EPS | $7.06 | $9.87 | $5.41 | | Net finance receivables | $19,986 | $19,212 | $18,084 | | Yield | 22.79% | 23.84% | 24.24% | | Net charge-off ratio | 6.10% | 4.20% | 5.54% | - In 2022, interest income increased by **$71 million (2%)** due to loan portfolio growth, while interest expense decreased by **$45 million (5%)** due to a lower average cost of funds[211](index=211&type=chunk) - Provision for finance receivable losses significantly increased by **$809 million (136%)** in 2022, driven by higher net charge-offs and an increased allowance for losses due to a weakened macroeconomic environment and portfolio growth[213](index=213&type=chunk) - Other revenues rose by **$98 million (18%)** in 2022, primarily from increased gains on finance receivable sales and higher servicing revenue[214](index=214&type=chunk) - Other expenses decreased by **$17 million (1%)** in 2022, mainly due to favorable insurance claims experience and fully amortized customer relationships intangible assets, partially offset by higher salaries, benefits, and technology investments[215](index=215&type=chunk) OMH's Non-GAAP Financial Measures (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------------------- | :------ | :------ | :------ | | Income before income taxes - Segment Accounting Basis | $1,177 | $1,788 | $1,021 | | Adjusted pretax income (non-GAAP) | $1,214 | $1,918 | $1,092 | | Pretax capital generation (non-GAAP) | $1,427 | $1,737 | $1,407 | [Segment Results](index=44&type=section&id=Segment%20Results) This section details the financial performance of the Consumer and Insurance segment, including adjusted pretax income, revenues, and expenses Consumer and Insurance (C&I) Segment Financials (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------------------- | :------ | :------ | :------ | | Interest income | $4,429 | $4,355 | $4,353 | | Interest expense | $886 | $930 | $1,007 | | Provision for finance receivable losses | $1,399 | $587 | $1,313 | | Net interest income after provision | $2,144 | $2,838 | $2,033 | | Other revenues | $644 | $597 | $551 | | Other expenses | $1,574 | $1,517 | $1,492 | | Adjusted pretax income (non-GAAP) | $1,214 | $1,918 | $1,092 | | Net finance receivables | $19,987 | $19,215 | $18,091 | | Yield | 22.78% | 23.82% | 24.17% | | Net charge-off ratio | 6.10% | 4.20% | 5.54% | - C&I adjusted pretax income decreased by **$704 million (36.7%)** in 2022 compared to 2021, primarily due to an **$812 million (138%) increase** in provision for finance receivable losses[226](index=226&type=chunk)[231](index=231&type=chunk) - Interest income for C&I increased by **$74 million (2%)** in 2022 due to loan portfolio growth, while interest expense decreased by **$44 million (5%)** due to a lower average cost of funds[229](index=229&type=chunk) - Other revenues for C&I increased by **$47 million (8%)** in 2022, mainly from higher gains on finance receivable sales and increased servicing revenue[232](index=232&type=chunk) - Other expenses for C&I increased by **$57 million (4%)** in 2022, driven by higher salaries, benefits, and software/technology investments, partially offset by lower insurance policy and benefits claims[233](index=233&type=chunk) [Credit Quality](index=46&type=section&id=Credit%20Quality) This section analyzes credit quality, including finance receivables growth, delinquency trends, allowance for losses, TDRs, and FICO score distribution - Net finance receivables grew to **$20.0 billion** at December 31, 2022, from **$19.2 billion** at December 31, 2021, consisting of personal loans and credit cards[236](index=236&type=chunk) Delinquency Ratios (2021 vs. 2022) | Delinquency Ratio | Personal Loans (2022) | Personal Loans (2021) | Credit Cards (2022) | Credit Cards (2021) | | :---------------- | :-------------------- | :-------------------- | :------------------ | :------------------ | | 30-89 days past due | 3.07% | 2.43% | 5.90% | 0.08% | | 30+ days past due | 5.80% | 4.43% | 13.08% | 0.08% | | 60+ days past due | 4.01% | 2.96% | 9.69% | 0.00% | | 90+ days past due | 2.74% | 2.00% | 7.18% | 0.00% | - Personal loans are considered nonperforming at **90 days past due**, at which point finance charge accrual stops. Credit cards accrue finance charges until charge-off at approximately **180 days past due**[238](index=238&type=chunk)[239](index=239&type=chunk) Allowance for Finance Receivable Losses (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :------ | :------ | :------ | | Balance at beginning of period | $2,095 | $2,269 | $829 | | Provision for finance receivable losses | $1,402 | $593 | $1,319 | | Charge-offs | $(1,438) | $(989) | $(1,162) | | Recoveries | $252 | $222 | $165 | | Balance at end of period | $2,311 | $2,095 | $2,269 | | Allowance ratio (Total) | 11.56% | 10.90% | 12.55% | - The allowance for finance receivable losses increased in 2022 due to a weakened macroeconomic environment and loan portfolio growth, with the allowance ratio for personal loans rising from **10.93% in 2021 to 11.54% in 2022**[243](index=243&type=chunk)[246](index=246&type=chunk) Troubled Debt Restructured (TDR) Finance Receivables (2021 vs. 2022) | (dollars in millions) | 2022 | 2021 | | :-------------------- | :--- | :--- | | TDR net finance receivables | $904 | $650 | | Allowance for TDR finance receivable losses | $369 | $270 | Net Finance Receivables by FICO Score (2021 vs. 2022) | FICO Score Category | 2022 (Total) | 2021 (Total) | | :------------------ | :----------- | :----------- | | 660 or higher | $4,270 | $4,911 | | 620-659 | $5,023 | $5,328 | | 619 or below | $10,693 | $8,973 | | **Total** | **$19,986** | **$19,212** | [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) This section details OneMain's funding sources, liquidity position, debt ratings, capital allocation, and contractual obligations - OneMain funds operations through cash flows, secured/unsecured debt, revolving conduit facilities, whole loan sales, and equity. As of December 31, 2022, the company had **$9.3 billion in unencumbered loans** and **$1.25 billion in unsecured corporate revolver capacity (undrawn)**[252](index=252&type=chunk)[254](index=254&type=chunk)[256](index=256&type=chunk) - OMFC's long-term corporate debt ratings are **BB (S&P, Stable)**, **Ba2 (Moody's, Stable)**, and **BB+ (KBRA, Positive)**[262](index=262&type=chunk) - In 2022, OMH repurchased **$303 million of its common stock**, and OMFC paid **$471 million in dividends** to OMH to fund OMH's dividends and stock repurchases[263](index=263&type=chunk)[265](index=265&type=chunk) - The company sold **$720 million of gross finance receivables** in 2022 (up from **$505 million in 2021**) through whole loan sale agreements, generating **$63 million in gains**[268](index=268&type=chunk) - Net cash provided by operating activities was **$2.4 billion** in 2022, while net cash used for investing activities was **$2.1 billion**, primarily for finance receivable originations[269](index=269&type=chunk)[270](index=270&type=chunk) - As of December 31, 2022, the company had **$498 million in cash and cash equivalents**, with **$147 million restricted** for regulated insurance subsidiaries or other operating activities[272](index=272&type=chunk) Contractual Obligations (as of Dec 31, 2022) | (dollars in millions) | 2023 | 2024-2025 | 2026-2027 | 2028+ | Securitizations | Private Secured Term Funding | Revolving Conduit Facilities | Total | | :-------------------- | :------ | :-------- | :-------- | :------ | :-------------- | :--------------------------- | :--------------------------- | :------- | | Principal maturities | $1,004 | $2,519 | $2,350 | $3,283 | $9,003 | $350 | $50 | $18,559 | | Interest payments | $513 | $787 | $435 | $1,124 | $899 | $64 | $9 | $3,831 | | **Total** | **$1,517** | **$3,306** | **$2,785** | **$4,407** | **$9,902** | **$414** | **$59** | **$22,390** | [Critical Accounting Policies and Estimates](index=57&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines critical accounting policies and estimates, focusing on the allowance for finance receivable losses and TDRs, emphasizing management judgment - The allowance for finance receivable losses is a critical estimate, based on historical experience, current conditions, and reasonable and supportable forecasts of collectability, primarily using a cumulative loss model for personal loans[287](index=287&type=chunk)[288](index=288&type=chunk) - Management judgment is crucial in determining the allowance, considering quantitative analyses, qualitative factors (portfolio, industry, economic trends), and adjustments for model imprecision[289](index=289&type=chunk) - Forecasting macroeconomic conditions, especially unemployment rates, involves significant judgment and estimation uncertainty, which can lead to fluctuations in the allowance for finance receivable losses[290](index=290&type=chunk)[291](index=291&type=chunk) - Troubled Debt Restructured (TDR) finance receivables are loans modified due to borrower financial difficulties, with reserves established by discounting estimated future cash flows at the pre-modification effective interest rate[294](index=294&type=chunk)[295](index=295&type=chunk) [Recent Accounting Pronouncements](index=58&type=section&id=Recent%20Accounting%20Pronouncements) This section details the impact of recent accounting pronouncements, including ASU 2018-12 and ASU 2022-02, on financial reporting - The company will adopt ASU 2018-12 (Targeted Improvements to the Accounting for Long-Duration Contracts) on January 1, 2023, which will increase insurance claims and policyholder liabilities and reduce accumulated other comprehensive income[423](index=423&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk) - ASU 2022-02 (Troubled Debt Restructurings and Vintage Disclosures) will also be adopted on January 1, 2023, eliminating TDR accounting for creditors and enhancing disclosures, but is not expected to materially impact financial statements[426](index=426&type=chunk)[427](index=427&type=chunk) [Seasonality](index=58&type=section&id=Seasonality) This section describes the seasonal patterns affecting personal loan volume and delinquencies, impacting operating results and cash needs - Personal loan volume is typically highest in the second and fourth quarters due to marketing and seasonal demand, while demand is lower in January and February due to tax refunds[297](index=297&type=chunk) - Delinquencies on personal loans are generally lower in the first and second quarters and tend to increase throughout the rest of the year, contributing to fluctuations in operating results and cash needs[297](index=297&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's financial instruments are sensitive to interest rate changes, but a 100 basis points shift is not expected to materially impact fair values due to offsetting effects - The fair values of certain assets and liabilities are sensitive to changes in market interest rates[299](index=299&type=chunk) - An immediate and sustained **100 basis points increase or decrease** in interest rates is not expected to materially impact the company's financial position, as changes in asset fair values would be partially offset by corresponding changes in liability fair values[299](index=299&type=chunk) Estimated Impact of 100 bps Interest Rate Change on Fair Values (2022) | (dollars in millions) | +100 bps | -100 bps | | :-------------------- | :------- | :------- | | Net finance receivables, less allowance for finance receivable losses | $(212) | $217 | | Fixed-maturity investment securities | $(70) | $75 | | Long-term debt | $(461) | $484 | - The company does not enter into interest rate-sensitive financial instruments for trading or speculative purposes[302](index=302&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=60&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for OMH and OMFC, including balance sheets, income statements, cash flows, and detailed notes [Report of Independent Registered Public Accounting Firm (OneMain Holdings, Inc.)](index=61&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm%20%28OneMain%20Holdings%2C%20Inc.%29) PwC issued an unqualified opinion on OMH's financial statements and internal controls, highlighting the allowance for finance receivable losses as a critical audit matter - PricewaterhouseCoopers LLP audited OneMain Holdings, Inc.'s consolidated financial statements and internal control over financial reporting, issuing an unqualified opinion on both for the period ended December 31, 2022[308](index=308&type=chunk)[309](index=309&type=chunk) - A critical audit matter identified was the allowance for finance receivable losses for personal loans, specifically management's significant judgment in adjusting the cumulative loss model for forecasted macroeconomic conditions[318](index=318&type=chunk)[319](index=319&type=chunk) [Report of Independent Registered Public Accounting Firm (OneMain Finance Corporation)](index=63&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm%20%28OneMain%20Finance%20Corporation%29) PwC issued an unqualified opinion on OMFC's financial statements, identifying the allowance for finance receivable losses as a critical audit matter - PricewaterhouseCoopers LLP issued an unqualified opinion on OneMain Finance Corporation's consolidated financial statements for the period ended December 31, 2022[323](index=323&type=chunk) - Similar to OMH, a critical audit matter was the allowance for finance receivable losses for personal loans, due to management's significant judgment in incorporating forecasted macroeconomic conditions into the loss model[329](index=329&type=chunk)[330](index=330&type=chunk) [Financial Statements of OneMain Holdings, Inc. and Subsidiaries](index=65&type=section&id=Financial%20Statements%20of%20OneMain%20Holdings%2C%20Inc.%20and%20Subsidiaries) This section presents the consolidated financial statements for OneMain Holdings, Inc. and its subsidiaries [Consolidated Balance Sheets](index=65&type=section&id=Consolidated%20Balance%20Sheets) This section presents OMH's consolidated balance sheets, detailing assets, liabilities, and shareholders' equity Consolidated Balance Sheet (OMH) - Key Figures (2021 vs. 2022) | (dollars in millions) | Dec 31, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Total assets | $22,533 | $22,079 | | Net finance receivables | $19,986 | $19,212 | | Allowance for finance receivable losses | $(2,311) | $(2,095) | | Total liabilities | $19,504 | $18,986 | | Long-term debt | $18,281 | $17,750 | | Total shareholders' equity | $3,029 | $3,093 | - Total assets increased by **$454 million** to **$22,533 million** in 2022, driven by growth in net finance receivables[334](index=334&type=chunk) - Total liabilities increased by **$518 million** to **$19,504 million**, primarily due to an increase in long-term debt[334](index=334&type=chunk) - Shareholders' equity decreased by **$64 million** to **$3,029 million**, influenced by common stock repurchases and other comprehensive loss[334](index=334&type=chunk) [Consolidated Statements of Operations](index=66&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents OMH's consolidated statements of operations, detailing revenues, expenses, net income, and diluted EPS Consolidated Statements of Operations (OMH) - Key Figures (2020-2022) | (dollars in millions, except per share amounts) | 2022 | 2021 | 2020 | | :---------------------------------------------- | :------ | :------ | :------ | | Interest income | $4,435 | $4,364 | $4,368 | | Net interest income | $3,543 | $3,427 | $3,341 | | Provision for finance receivable losses | $1,402 | $593 | $1,319 | | Net income | $878 | $1,314 | $730 | | Diluted EPS | $7.06 | $9.87 | $5.41 | - Net income decreased by **$436 million (33.2%)** in 2022 to **$878 million**, primarily due to a significant increase in the provision for finance receivable losses[335](index=335&type=chunk) - Diluted earnings per share decreased from **$9.87 in 2021 to $7.06 in 2022**[337](index=337&type=chunk) [Consolidated Statements of Comprehensive Income](index=67&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents OMH's consolidated statements of comprehensive income, detailing net income and other comprehensive income (loss) Consolidated Statements of Comprehensive Income (OMH) - Key Figures (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :--- | :--- | :--- | | Net income | $878 | $1,314 | $730 | | Other comprehensive income (loss), net of tax | $(180) | $(33) | $50 | | Comprehensive income | $698 | $1,281 | $780 | - Comprehensive income decreased significantly from **$1,281 million in 2021 to $698 million in 2022**, largely due to a net change in unrealized losses on available-for-sale securities and lower net income[338](index=338&type=chunk) [Consolidated Statements of Shareholders' Equity](index=68&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) This section presents OMH's consolidated statements of shareholders' equity, detailing changes from repurchases, dividends, and net income Consolidated Statements of Shareholders' Equity (OMH) - Key Changes (2022) | (dollars in millions) | Balance, Jan 1, 2022 | Common stock repurchased | Other comprehensive loss | Cash dividends | Net income | Balance, Dec 31, 2022 | | :-------------------- | :------------------- | :----------------------- | :----------------------- | :------------- | :--------- | :-------------------- | | Total Shareholders' Equity | $3,093 | $(303) | $(180) | $(478) | $878 | $3,029 | - Shareholders' equity decreased from **$3,093 million** at the beginning of 2022 to **$3,029 million** at year-end, primarily impacted by common stock repurchases (**$303 million**) and cash dividends (**$478 million**), partially offset by net income (**$878 million**)[340](index=340&type=chunk) [Consolidated Statements of Cash Flows](index=69&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents OMH's consolidated statements of cash flows, detailing operating, investing, and financing activities Consolidated Statements of Cash Flows (OMH) - Key Figures (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :------ | :------ | :------ | | Net cash provided by operating activities | $2,387 | $2,247 | $2,212 | | Net cash used for investing activities | $(2,119) | $(2,143) | $(751) | | Net cash used for financing activities | $(326) | $(1,810) | $(370) | | Net change in cash and cash equivalents and restricted cash | $(58) | $(1,706) | $1,091 | | Cash and cash equivalents and restricted cash at end of period | $959 | $1,017 | $2,723 | - Net cash provided by operating activities increased to **$2,387 million** in 2022 from **$2,247 million** in 2021[344](index=344&type=chunk) - Net cash used for investing activities remained high at **$2,119 million** in 2022, primarily due to net principal originations and purchases of finance receivables[344](index=344&type=chunk) - Net cash used for financing activities decreased to **$326 million** in 2022 from **$1,810 million** in 2021, reflecting lower debt repayments and cash dividends[344](index=344&type=chunk) [Financial Statements of OneMain Finance Corporation and Subsidiaries](index=70&type=section&id=Financial%20Statements%20of%20OneMain%20Finance%20Corporation%20and%20Subsidiaries) This section presents the consolidated financial statements for OneMain Finance Corporation and its subsidiaries [Consolidated Balance Sheets](index=70&type=section&id=Consolidated%20Balance%20Sheets_OMFC) This section presents OMFC's consolidated balance sheets, detailing assets, liabilities, and shareholder's equity Consolidated Balance Sheet (OMFC) - Key Figures (2021 vs. 2022) | (dollars in millions) | Dec 31, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Total assets | $22,523 | $22,046 | | Net finance receivables | $19,986 | $19,212 | | Allowance for finance receivable losses | $(2,311) | $(2,095) | | Total liabilities | $19,505 | $18,986 | | Long-term debt | $18,281 | $17,750 | | Total shareholder's equity | $3,018 | $3,060 | - OMFC's total assets increased by **$477 million** to **$22,523 million** in 2022, mirroring OMH's consolidated growth[346](index=346&type=chunk) - Shareholder's equity for OMFC decreased by **$42 million** to **$3,018 million**, primarily due to cash dividends paid to OMH[346](index=346&type=chunk) [Consolidated Statements of Operations](index=73&type=section&id=Consolidated%20Statements%20of%20Operations_OMFC) This section presents OMFC's consolidated statements of operations, detailing revenues, expenses, and net income Consolidated Statements of Operations (OMFC) - Key Figures (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :--- | :--- | :--- | | Interest income | $4,435 | $4,364 | $4,368 | | Net interest income | $3,543 | $3,427 | $3,341 | | Provision for finance receivable losses | $1,402 | $593 | $1,319 | | Net income | $878 | $1,314 | $730 | - OMFC's net income decreased by **$436 million (33.2%)** to **$878 million** in 2022, consistent with OMH's consolidated results, driven by higher provision for finance receivable losses[348](index=348&type=chunk) [Consolidated Statements of Comprehensive Income](index=74&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income_OMFC) This section presents OMFC's consolidated statements of comprehensive income, detailing net income and other comprehensive income (loss) Consolidated Statements of Comprehensive Income (OMFC) - Key Figures (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :--- | :--- | :--- | | Net income | $878 | $1,314 | $730 | | Other comprehensive income (loss), net of tax | $(180) | $(33) | $50 | | Comprehensive income | $698 | $1,281 | $780 | - OMFC's comprehensive income decreased to **$698 million** in 2022 from **$1,281 million** in 2021, consistent with OMH's consolidated trend[350](index=350&type=chunk) [Consolidated Statements of Shareholder's Equity](index=75&type=section&id=Consolidated%20Statements%20of%20Shareholder%27s%20Equity_OMFC) This section presents OMFC's consolidated statements of shareholder's equity, detailing changes from cash dividends and net income Consolidated Statements of Shareholder's Equity (OMFC) - Key Changes (2022) | (dollars in millions) | Balance, Jan 1, 2022 | Cash dividends | Net income | Balance, Dec 31, 2022 | | :-------------------- | :------------------- | :------------- | :--------- | :-------------------- | | Total Shareholder's Equity | $3,060 | $(757) | $878 | $3,018 | - OMFC's shareholder's equity decreased from **$3,060 million** to **$3,018 million** in 2022, primarily due to **$757 million in cash dividends paid**, partially offset by **$878 million in net income**[352](index=352&type=chunk) [Consolidated Statements of Cash Flows](index=76&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows_OMFC) This section presents OMFC's consolidated statements of cash flows, detailing operating, investing, and financing activities Consolidated Statements of Cash Flows (OMFC) - Key Figures (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :--- | :--- | :--- | | Net cash provided by operating activities | $2,388 | $2,251 | $2,207 | | Net cash used for investing activities | $(2,119) | $(2,143) | $(751) | | Net cash used for financing activities | $(304) | $(1,845) | $(365) | | Net change in cash and cash equivalents and restricted cash | $(35) | $(1,737) | $1,091 | | Cash and cash equivalents and restricted cash at end of period | $951 | $986 | $2,723 | - OMFC's cash flow trends are consistent with OMH's consolidated results, with operating cash increasing and investing cash remaining high due to loan originations[354](index=354&type=chunk) [Notes to the Consolidated Financial Statements](index=76&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed notes to the consolidated financial statements, covering significant accounting policies, financial instruments, and other disclosures [Note 1. Nature of Operations](index=76&type=section&id=Note%201.%20Nature%20of%20Operations) This note describes the nature of operations for OMH and OMFC as financial services holding companies in consumer finance and insurance - OneMain Holdings, Inc. (OMH) and its wholly-owned subsidiary, OneMain Finance Corporation (OMFC), are financial services holding companies engaged in consumer finance and insurance businesses[358](index=358&type=chunk) - OMFC's results are consolidated into OMH, and the report's content generally applies to both entities unless specified otherwise[359](index=359&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=76&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines significant accounting policies, including consolidation, revenue recognition, allowance for losses, goodwill, investments, and VIEs - The consolidated financial statements are prepared using GAAP and include OMH, its subsidiaries, and consolidated Variable Interest Entities (VIEs)[359](index=359&type=chunk) - Finance receivables are classified as held for investment at amortized cost, with revenue recognized using the interest method. Accrual of finance charges stops when personal loans are **90 days past due** and credit cards are **180 days past due**[362](index=362&type=chunk)[364](index=364&type=chunk)[365](index=365&type=chunk) - The allowance for finance receivable losses is estimated based on historical loss experience, current conditions, and macroeconomic forecasts, primarily using a cumulative loss model for personal loans[372](index=372&type=chunk) - Goodwill is tested for impairment annually or when circumstances indicate impairment, using a qualitative assessment followed by a quantitative test if necessary[378](index=378&type=chunk)[379](index=379&type=chunk) - Investment securities are generally classified as available-for-sale or other, recorded at fair value, with unrealized gains/losses on available-for-sale securities recognized in accumulated other comprehensive income[392](index=392&type=chunk)[393](index=393&type=chunk) - The company consolidates VIEs where it is the primary beneficiary, meaning it has the power to direct significant activities and the obligation to absorb losses or right to receive significant benefits[403](index=403&type=chunk) [Note 3. Recent Accounting Pronouncements](index=84&type=section&id=Note%203.%20Recent%20Accounting%20Pronouncements) This note details the impact of recent accounting pronouncements, including ASU 2018-12 and ASU 2022-02, on financial reporting - ASU 2018-12 (Targeted Improvements to the Accounting for Long-Duration Contracts) will be adopted on January 1, 2023, requiring annual updates to assumptions for future policy benefits and recognizing discount rate changes in other comprehensive income[423](index=423&type=chunk)[424](index=424&type=chunk) - The adoption of ASU 2018-12 will result in an increase to insurance claims and policyholder liabilities and a reduction to accumulated other comprehensive income[425](index=425&type=chunk) - ASU 2022-02 (Troubled Debt Restructurings and Vintage Disclosures) will also be adopted on January 1, 2023, eliminating TDR accounting for creditors and enhancing disclosures, with no material impact expected on financial statements[426](index=426&type=chunk)[427](index=427&type=chunk) [Note 4. Finance Receivables](index=85&type=section&id=Note%204.%20Finance%20Receivables) This note details finance receivables, including components, geographic concentrations, sales, delinquency, TDRs, and unfunded commitments Components of Net Finance Receivables (2021 vs. 2022) | (dollars in millions) | Dec 31, 2022 (Personal Loans) | Dec 31, 2022 (Credit Cards) | Dec 31, 2021 (Personal Loans) | Dec 31, 2021 (Credit Cards) | | :-------------------- | :---------------------------- | :-------------------------- | :---------------------------- | :-------------------------- | | Gross finance receivables | $19,615 | $107 | $18,944 | $24 | | Unearned fees | $(220) | — | $(225) | $(1) | | Accrued finance charges and fees | $299 | — | $289 | — | | Deferred origination costs | $185 | — | $179 | $2 | | **Total** | **$19,879** | **$107** | **$19,187** | **$25** | - Net finance receivables increased to **$19,986 million** in 2022 from **$19,212 million** in 2021, with personal loans comprising the vast majority[430](index=430&type=chunk) - The largest geographic concentrations of personal loans in 2022 were **Texas (10%)**, **Florida (7%)**, and **California (7%)**[432](index=432&type=chunk) - The company sold **$720 million of gross finance receivables** in 2022 (up from **$505 million in 2021**) through whole loan sale agreements, generating **$63 million in gains**[433](index=433&type=chunk) Personal Loans by Delinquency Status and Origination Year (Dec 31, 2022) | (dollars in millions) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior | Total | | :-------------------- | :------ | :------ | :------ | :------ | :------ | :------ | :------- | | Current | $10,614 | $4,927 | $1,758 | $1,081 | $240 | $105 | $18,725 | | 30-59 days past due | $136 | $136 | $43 | $28 | $9 | $5 | $357 | | 60-89 days past due | $92 | $101 | $32 | $19 | $6 | $3 | $253 | | 90+ days past due | $160 | $246 | $74 | $44 | $13 | $7 | $544 | | **Total** | **$11,002** | **$5,410** | **$1,907** | **$1,172** | **$268** | **$120** | **$19,879** | Troubled Debt Restructured (TDR) Finance Receivables (2021 vs. 2022) | (dollars in millions) | 2022 | 2021 | | :-------------------- | :--- | :--- | | TDR gross finance receivables | $898 | $646 | | TDR net finance receivables | $904 | $650 | | Allowance for TDR finance receivable losses | $369 | $270 | - Unfunded lending commitments, primarily unused credit card lines, totaled **$81 million** at December 31, 2022, and are unconditionally cancellable[443](index=443&type=chunk) [Note 5. Allowance for Finance Receivable Losses](index=91&type=section&id=Note%205.%20Allowance%20for%20Finance%20Receivable%20Losses) This note details changes in the allowance for finance receivable losses, including provision, charge-offs, recoveries, and impairment method breakdown - The allowance for finance receivable losses increased in 2022 due to a weakened macroeconomic environment and growth in the loan portfolio[446](index=446&type=chunk) Changes in Allowance for Finance Receivable Losses (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :------ | :------ | :------ | | Balance at beginning of period | $2,095 | $2,269 | $829 | | Provision for finance receivable losses | $1,402 | $593 | $1,319 | | Charge-offs | $(1,438) | $(989) | $(1,162) | | Recoveries | $252 | $222 | $165 | | Balance at end of period | $2,311 | $2,095 | $2,269 | Allowance for Finance Receivable Losses by Impairment Method (Dec 31, 2022) | (dollars in millions) | Personal Loans | Credit Cards | Total | | :-------------------- | :------------- | :----------- | :---- | | Collectively evaluated for impairment | $1,921 | $21 | $1,942 | | TDR finance receivables | $369 | — | $369 | | **Total** | **$2,290** | **$21** | **$2,311** | | Allowance for finance receivable losses as a percentage of finance receivables | 11.52% | 19.12% | 11.56% | [Note 6. Investment Securities](index=93&type=section&id=Note%206.%20Investment%20Securities) This note details investment securities, including available-for-sale and other securities, their fair values, and unrealized gains/losses Available-for-Sale Securities (Fair Value) (2021 vs. 2022) | (dollars in millions) | Dec 31, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | U.S. government and government sponsored entities | $16 | $16 | | Obligations of states, municipalities, and political subdivisions | $66 | $79 | | Commercial paper | $55 | $50 | | Non-U.S. government and government sponsored entities | $142 | $155 | | Corporate debt | $1,137 | $1,302 | | Mortgage-backed, asset-backed, and collateralized | $313 | $305 | | **Total** | **$1,729** | **$1,907** | - Total available-for-sale securities decreased from **$1,907 million in 2021 to $1,729 million in 2022**, with a significant increase in unrealized losses from **$8 million to $169 million**[452](index=452&type=chunk)[455](index=455&type=chunk) - The unrealized losses are primarily due to changes in interest rates and market spreads, and are not considered credit-related. The company does not intend to sell these securities before recovery of amortized cost[455](index=455&type=chunk) Other Securities (Fair Value) (2021 vs. 2022) | (dollars in millions) | Dec 31, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Bonds | $23 | $30 | | Preferred stock | $15 | $22 | | Common stock | $33 | $33 | | **Total** | **$71** | **$85** | - Other securities, primarily equity securities, decreased from **$85 million in 2021 to $71 million in 2022**, with net unrealized losses of **$9 million in 2022**[460](index=460&type=chunk)[461](index=461&type=chunk) [Note 7. Goodwill and Other Intangible Assets](index=94&type=section&id=Note%207.%20Goodwill%20and%20Other%20Intangible%20Assets) This note details goodwill and other intangible assets, including changes from amortization and the absence of impairment charges - Goodwill remained at **$1.4 billion** at December 31, 2022 and 2021, with no impairments recorded during 2020-2022[464](index=464&type=chunk) Net Other Intangible Assets (2021 vs. 2022) | (dollars in millions) | Dec 31, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Trade names | $220 | $220 | | Licenses | $25 | $25 | | VOBA | $15 | $28 | | Customer relationships | — | — | | Other | $1 | $1 | | **Total** | **$261** | **$274** | - Net other intangible assets decreased from **$274 million in 2021 to $261 million in 2022**, primarily due to the full amortization of the customer relationships intangible asset in the prior year[465](index=465&type=chunk) - Amortization expense for other intangible assets was **$13 million** in 2022, down from **$32 million** in 2021[465](index=465&type=chunk) [Note 8. Long-term Debt](index=97&type=section&id=Note%208.%20Long-term%20Debt) This note details long-term debt, including carrying and fair values, interest rates, redemptions, revolver capacity, and covenant compliance Long-term Debt Carrying Value and Fair Value (2021 vs. 2022) | (dollars in millions) | Dec 31, 2022 (Carrying Value) | Dec 31, 2022 (Fair Value) | Dec 31, 2021 (Carrying Value) | Dec 31, 2021 (Fair Value) | | :-------------------- | :---------------------------- | :------------------------ | :---------------------------- | :------------------------ | | Senior debt | $18,109 | $16,782 | $17,578 | $18,574 | | Junior subordinated debt | $172 | $187 | $172 | $207 | | **Total** | **$18,281** | **$16,969** | **$17,750** | **$18,781** | - Total long-term debt increased to **$18,281 million** in 2022 from **$17,750 million** in 2021. The fair value of long-term debt decreased significantly, indicating a rise in market interest rates[467](index=467&type=chunk) Weighted Average Effective Interest Rates on Long-term Debt (2020-2022) | Debt Type | 2022 | 2021 | 2020 | | :-------------------- | :----- | :----- | :----- | | Senior debt | 4.97% | 5.38% | 5.68% | | Junior subordinated debt | 7.42% | 4.02% | 5.64% | | **Total** | **4.99%** | **5.37%** | **5.68%** | - OMFC redeemed its **$637 million 8.875% Senior Notes due 2025** in June 2022, incurring a **$26 million net loss** on repurchases and repayments of debt[471](index=471&type=chunk) - OMFC increased its unsecured corporate revolver capacity to **$1.25 billion** in June 2022, with no amounts drawn as of December 31, 2022[472](index=472&type=chunk) - OMFC was in compliance with all debt covenants as of December 31, 2022. The Junior Subordinated Debenture's interest rate is variable (3-month LIBOR + 1.75%) and is expected to transition to a SOFR-based rate after June 30, 2023[475](index=475&type=chunk)[477](index=477&type=chunk) [Note 9. Variable Interest Entities](index=98&type=section&id=Note%209.%20Variable%20Interest%20Entities) This note explains the consolidation of VIEs for asset-backed financing, detailing their assets, liabilities, and financing structures - OneMain consolidates Variable Interest Entities (VIEs) for asset-backed financing transactions (secured debt, revolving conduits) where OMFC or OMFH is the primary beneficiary[481](index=481&type=chunk) - The company retains an interest and credit risk in these financing transactions through ownership of residual interests and, in some cases, subordinate debt classes, which are first to absorb credit losses[482](index=482&type=chunk) Consolidated VIE Assets and Liabilities (2021 vs. 2022) | (dollars in millions) | Dec 31, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Net finance receivables | $10,432 | $8,821 | | Allowance for finance receivable losses | $1,126 | $910 | | Long-term debt | $9,361 | $7,999 | - Securitized borrowings have revolving periods (**2-7 years**) with no principal payments required, but early amortization events or defaults could accelerate obligations[485](index=485&type=chunk) - As of December 31, 2022, **$350 million** was outstanding under private secured term funding, and **$50 million** was drawn under revolving conduit facilities with a remaining borrowing capacity of **$6.1 billion**[486](index=486&type=chunk)[488](index=488&type=chunk) [Note 10. Insurance](index=100&type=section&id=Note%2010.%20Insurance) This note details the insurance business, including reserves, unpaid claims, statutory net income, and regulatory dividend limitations - The insurance business is conducted through wholly-owned subsidiaries AHL (life and health) and Triton (property and casualty), licensed in most U.S. states and Canada[490](index=490&type=chunk) Insurance Reserves (2021 vs. 2022) | (dollars in millions) | Dec 31, 2022 | Dec 31, 2021 | | :-------------------- | :----------- | :----------- | | Finance receivable related (Unearned premium & claim reserves) | $749 | $761 | | Payable to third-party beneficiaries | $257 | $256 | | Non-finance receivable related | $345 | $365 | | **Total** | **$1,351** | **$1,382** | - Net balance of unpaid claims and loss adjustment expenses was **$102 million** at December 31, 2022, with a **$11 million redundancy** in prior years' net reserves due to favorable developments in credit life, credit disability, and term life claims[495](index=495&type=chunk) Statutory Net Income (Loss) for Insurance Companies (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :--- | :--- | :--- | | Triton (Property and casualty) | $58 | $66 | $(7) | | AHL (Life and health) | $98 | $79 | $114 | - Insurance subsidiaries are subject to state regulations limiting dividend payments. In 2022, Triton paid **$50 million in ordinary dividends**, while AHL paid none (compared to **$50 million in 2021**)[505](index=505&type=chunk)[506](index=506&type=chunk) [Note 11. Capital Stock and Earnings Per Share (OMH Only)](index=104&type=section&id=Note%2011.%20Capital%20Stock%20and%20Earnings%20Per%20Share%20%28OMH%20Only%29) This note details OMH's capital stock structure, changes in common stock, and earnings per share calculations - OMH has authorized preferred and common stock, while OMFC has special and common stock. No preferred or special stock was issued or outstanding at December 31, 2022[507](index=507&type=chunk)[508](index=508&type=chunk) Changes in OMH Common Stock Issued and Outstanding (2020-2022) | (shares) | 2022 | 2021 | 2020 | | :-------------------- | :------------ | :------------ | :------------ | | Balance at beginning of period | 127,809,640 | 134,341,724 | 136,101,156 | | Common shares issued | 333,038 | 180,839 | 272,266 | | Common shares repurchased | (7,181,023) | (6,712,923) | (2,031,698) | | Treasury stock issued | 80,470 | — | — | | **Balance at end of period** | **121,042,125** | **127,809,640** | **134,341,724** | Earnings Per Share (OMH Only) (2020-2022) | (dollars in millions, except per share data) | 2022 | 2021 | 2020 | | :------------------------------------------- | :------ | :------ | :------ | | Net income | $878 | $1,314 | $730 | | Weighted average number of shares outstanding (diluted) | 124,417,274 | 133,054,494 | 134,919,258 | | Diluted Earnings per share | $7.06 | $9.87 | $5.41 | [Note 12. Accumulated Other Comprehensive Income (Loss)](index=106&type=section&id=Note%2012.%20Accumulated%20Other%20Comprehensive%20Income%20%28Loss%29) This note details changes in accumulated other comprehensive income (loss), net of tax, including unrealized gains/losses on securities Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :--- | :--- | :--- | | Balance at beginning of period | $61 | $94 | $44 | | Other comprehensive income (loss) before reclassifications | $(179) | $(32) | $51 | | Reclassification adjustments | $(1) | $(1) | $(1) | | **Balance at end of period** | **$(119)** | **$61** | **$94** | - Accumulated other comprehensive income (loss) shifted from a gain of **$61 million in 2021 to a loss of $119 million in 2022**, primarily due to unrealized losses on available-for-sale securities[514](index=514&type=chunk) [Note 13. Income Taxes](index=107&type=section&id=Note%2013.%20Income%20Taxes) This note details income taxes, including components of income before tax, expense, effective rates, unrecognized benefits, and deferred tax assets Components of Income Before Income Tax Expense (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :------ | :------ | :------ | | U.S. operations | $1,142 | $1,722 | $973 | | Foreign operations | $21 | $19 | $4 | | **Total** | **$1,163** | **$1,741** | **$977** | Components of Income Tax Expense (Benefit) (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :--- | :--- | :--- | | Total current | $347 | $349 | $289 | | Total deferred | $(62) | $78 | $(42) | | **Total** | **$285** | **$427** | **$247** | Reconciliation of Statutory to Effective Income Tax Rate (2020-2022) | | 2022 | 2021 | 2020 | | :-------------------- | :------ | :------ | :------ | | Statutory federal income tax rate | 21.00% | 21.00% | 21.00% | | State income taxes, net of federal | 2.93% | 3.27% | 3.52% | | Effective income tax rate | 24.51% | 24.56% | 25.33% | - The effective income tax rate decreased slightly to **24.51% in 2022** from **24.56% in 2021**, primarily due to lower state tax expense[520](index=520&type=chunk)[521](index=521&type=chunk) - Gross unrecognized tax benefits decreased from **$8 million in 2021 to $6 million in 2022**[521](index=521&type=chunk) - Net deferred tax assets increased by **$113 million** to **$452 million** in 2022, mainly due to the tax effect of increased allowance for finance receivable losses and capitalization of research and experimental costs[524](index=524&type=chunk)[525](index=525&type=chunk) - The Inflation Reduction Act of 2022 (IRA) introduces a **15% Corporate Alternative Minimum Tax** and a **1% excise tax on stock repurchases**, but is not expected to have a material impact on the consolidated financial statements[527](index=527&type=chunk) [Note 14. Leases and Contingencies](index=112&type=section&id=Note%2014.%20Leases%20and%20Contingencies) This note details operating lease assets and liabilities, maturities, and legal proceedings, including a CFPB investigation - Operating lease right-of-use assets and liabilities were **$152 million** and **$161 million**, respectively, at December 31, 2022[529](index=529&type=chunk) Maturities of Operating Lease Liabilities (Dec 31, 2022) | (dollars in millions) | Operating Leases | | :-------------------- | :--------------- | | 2023 | $58 | | 2024 | $46 | | 2025 | $35 | | 2026 | $23 | | 2027 | $14 | | 2028 | $2 | | Thereafter | $1 | | **Total lease payments** | **$179** | | Imputed interest | $(18) | | **Total** | **$161** | | Weighted Average Remaining Lease Term | 3.71 years | | Weighted Average Discount Rate | 3.24% | - Operating lease cost was **$58 million** in 2022, and total lease cost (including variable lease cost) was **$72 million**[530](index=530&type=chunk) - The company is involved in various legal actions, including a CFPB investigation regarding refunding practices for optional insurance and membership plan products. While the company believes it has not violated the law, the ultimate outcome is uncertain, but not expected to have a material adverse effect[532](index=532&type=chunk)[536](index=536&type=chunk) [Note 15. Retirement Benefit Plans](index=114&type=section&id=Note%2015.%20Retirement%20Benefit%20Plans) This note details defined contribution and benefit retirement plans, including contributions, funded status, costs, discount rates, and asset allocation - The company sponsors defined contribution plans (401(k) Plan, NQDC Plan) and defined benefit plans (Springleaf Retirement Plan, CommoLoCo Retirement Plan, Unfunded Defined Benefit Plans)[539](index=539&type=chunk)[541](index=541&type=chunk)[543](index=543&type=chunk)[544](index=544&type=chunk)[545](index=545&type=chunk) - 401(k) Plan contributions were **$19 million** in 2022, with no discretionary profit sharing contributions made[539](index=539&type=chunk)[540](index=540&type=chunk) Funded Status of Defined Benefit Pension Plans (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :--- | :--- | :--- | | Projected benefit obligation, end of period | $275 | $374 | $401 | | Fair value of plan assets, end of period | $278 | $383 | $405 | | **Funded status, end of period** | **$3** | **$9** | **$4** | - The defined benefit plans were overfunded by **$3 million** at December 31, 2022, down from **$9 million** in 2021, primarily due to actuarial losses from discount rate fluctuations[547](index=547&type=chunk) Components of Net Periodic Benefit Cost (2020-2022) | (dollars in millions) | 2022 | 2021 | 2020 | | :-------------------- | :--- | :--- | :--- | | Net periodic benefit cost | $(5) | $(5) | $(5) | | Net actuarial loss recognized in OCI | $12 | $1 | $2 | | Total recognized in net periodic benefit cost and OCI | $7 | $(4) | $(3) | - The weighted average discount rate for projected benefit obligations increased to **4.96% in 2022** from **2.67% in 2021**[551](index=551&type=chunk) - Plan assets are primarily allocated to **fixed income securities (95%)** and **equity securities (4%)** as of December 31, 2022, with a target allocation of **95% fixed income and 5% equity for 2023**[555](index=555&type=chunk) [Note 16. Share-Based Compensation](index=117&type=section&id=Note%2016.%20Share-Based%20Compensation) This note details share-based compensation expense, unrecognized expense, service and performance awards, and the Employee Stock Purchase Plan - Total share-based compensation expense, net of forfeitures, was **$29 million** in 2022, up from **$22 million** in 2021[564](index=564&type=chunk) - As of December 31, 2022, **$41 million in unrecognized compensation expense** related to unvested awards is expected to be recognized over approximately two years[564](index=564&type=chunk) - Service-based Restricted Stock Units (RSUs) are granted to directors, executives, and employees with vesting periods of one to five years. The weighted-average grant date fair value for service-based awards in 2022 was **$50.43**[565](index=565&type=chunk)[566](index=566&type=chunk) - Performance-based awards are granted to executives based on financial or market performance over three to seven years. The weighted average grant date fair value for performance-based awards in 2022 was **$50.34**[568](index=568&type=chunk)[569](index=569&type=chunk)[571](index=571&type=chunk) - No vesting conditions were satisfied for cash-settled stock-based awards in 2022. In 2021, **$54 million** was recognized as expense when a portion of these awards vested[573](index=573&type=chunk)[574](index=574&type=chunk) - The Employee Stock Purchase Plan (ESP Plan), effective January 1, 2022, allows eligible employees to purchase common stock at a discount. **80,470 shares of treasur

Financial Data and Key Metrics Changes - The company reported a net income of $180 million or $0.48 per diluted share, down from $2.02 per diluted share in the fourth quarter of 2021 [99] - Interest income was $1.1 billion, flat compared to the prior year quarter, while yield in the fourth quarter was 22.3%, down 100 basis points year-over-year [100] - Capital generation was strong at $233 million in the fourth quarter and $1.70 billion for the full year [52] Business Line Data and Key Metrics Changes - Managed receivables reached $20.8 billion, up $1.1 billion or 6% from a year ago [52] - Originations were $3.5 billion in the fourth quarter, down from $3.8 billion in the same quarter of 2021 due to tighter underwriting [103] - The credit card business had approximately 135,000 card customers and $107 million of card receivables, with expectations to grow to between $400 million and $500 million by the end of 2023 [49][55] Market Data and Key Metrics Changes - The company expects managed receivables to grow in the low to mid-single digits, assuming a stable credit box and continued growth in distribution channels and credit cards [82] - The delinquency level for 30 to 89 days was 3.07% in the fourth quarter, up from 2.81% in the third quarter [73] - Net charge-offs were reported at 6.9% for the quarter, with full-year net charge-offs at the low end of guidance at 6.1% [74] Company Strategy and Development Direction - The company aims to grow its balance sheet in 2023, focusing on higher credit quality customers and expanding its credit card and new distribution channels [47] - A conservative credit box is maintained, with a focus on profitable growth even in a deteriorating macroeconomic environment [36][42] - The company is committed to returning capital to shareholders, announcing a dividend increase of more than 5% to $1 per share [50] Management's Comments on Operating Environment and Future Outlook - Management noted that inflation is impacting consumers, particularly those at the lower end of the credit spectrum, but strong employment numbers are encouraging [63] - The company has seen stabilization in credit performance over the last two quarters, with new originations performing as expected [84] - Management remains cautious about the economic environment, incorporating potential stress into their underwriting criteria [117] Other Important Information - The company generated almost $1.1 billion of capital in 2022, demonstrating the strength of its business model [43] - The company has a strong balance sheet with a long liquidity runway, allowing it to book good business even in challenging market conditions [114] - The company was included in MorningStar's Sustainalytics Top Rated ESG Companies List for 2023, ranking in the top 10% of rated companies in the Diversified Financials Industry category [62] Q&A Session Summary Question: Impact of inflation on customer base - Management acknowledged that inflation is affecting consumers, particularly non-prime customers, but noted that they are monitoring the situation closely [42][144] Question: Credit card proposal impact - Management stated that they are not overly concerned about the CFPB proposal on late fees affecting their new credit card product, as they have flexibility in pricing [130] Question: Future growth and economic conditions - Management indicated that if the economic environment stabilizes, they could open up their credit box for growth beyond current guidance [87]

The following slides are part of a presentation by OneMain Holdings, Inc. (the "Company") in connection with reporting quarterly financial results and are intended to be viewed as part of that presentation. No representation is made that the information in these slides is complete. For additional financial, statistical, and business-related information, as well as information regarding business and segment trends, see the earnings release and financial supplement included as an exhibit to the &RPSDQ\·V Curr ...

OneMain Holdings, Inc. (NYSE:OMF) Q3 2022 Earnings Conference Call October 27, 2022 8:30 AM ET Company Participants Peter Poillon - Head, IR Douglas Shulman - Chairman, President & CEO Micah Conrad - EVP & CFO Conference Call Participants Moshe Orenbuch - Crédit Suisse Kevin Barker - Piper Sandler & Co. Michael Kaye - Wells Fargo Securities John Hecht - Jefferies John Rowan - Janney Montgomery Scott Richard Shane - JPMorgan Chase & Co. Operator Welcome to the OneMain Financial Third Quarter 2022 Earnings Co ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 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 (E ...