

~~11.~~12. Accumulated Other Comprehensive Income (Loss)

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


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














Three Months Ended March 31, 2020
Balance at beginning of period	$	41	$	3	$	—	$	44
Other comprehensive (loss) before reclassifications	(42)		—		(8)		(50)

Balance at end of period	$	(1)	$	3	$	(8)	$	(6)

Three Months Ended March 31, 2019
Balance at beginning of period	$	(28)	$	(3)	$	(3)	$	(34)
Other comprehensive income before reclassifications	30		—		2		32


Balance at end of period	$	2	$	(3)	$	(1)	$	(2)

* There were 0 amounts related to available-for-sale debt securities for which an allowance for credit losses was recorded during the three months ended March 31, 2020.

(dollars in millions)
Unrealized
Gains (Losses)
Available-for-Sale Securities

Retirement
Plan Liabilities
Adjustments

Foreign
Currency
Translation
Adjustments

Total
Accumulated
Other
Comprehensive
Income (Loss)

Three Months Ended March 31, 2019

Balance at beginning of period $ (28 ) $ (3 ) $ (3 ) $ (34 )
Other comprehensive income before reclassifications 30
—
2
32
Balance at end of period $ 2
$ (3 ) $ (1 ) $ (2 )

Three Months Ended March 31, 2018

Balance at beginning of period $ 4
$ 4
$ 3
$ 11
Other comprehensive loss before reclassifications (20 ) —
(3 ) (23 )
Balance at end of period $ (16 ) $ 4
$ —
$ (12 )

Reclassification adjustments from accumulated other comprehensive income (loss) to the applicable line item on our condensed consolidated statements of operations were immaterial for the three months ended March 31, ~~2019~~2020 and ~~March 31, 2018.~~2019.



~~12.~~13. Income Taxes

We had a net deferred tax asset of ~~$109~~$429 million and ~~$129~~$104 million at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. The increase in our net deferred tax asset of $325 million was primarily due to the tax effect of the increase in the allowance for finance receivable losses from both the adoption of ASU 2016-13 and the current period activity. See Note 5 for further information on the increase in allowance. The increase was partly offset by favorable mark-to-market valuation of our receivables.

We follow the guidance of ASC 740, Income Taxes, for interim reporting of income taxes under which we calculate an estimated annual effective tax rate (“AETR”) and apply the AETR to our year-to-date income (loss) before income taxes. In addition, we recognize any discrete items as they occur. Our estimates may need to be further adjusted throughout the year as the effects of COVID-19 plays out in the economic and financial markets, and as a result our AETR may significantly change in the remaining period of 2020.

The effective tax rate for the three months ended March 31, ~~2019~~2020 was ~~24.8%~~24.3%, compared to ~~26.2%~~24.8% for the same period in ~~2018.~~2019. The effective tax rates for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 differed from the federal statutory rate of 21% primarily due to the effect of state income taxes.

We are currently under examination of our U.S. federal tax ~~return~~returns for the years 2014 to 2016 by the IRS. We are also under examination ofby various states for the years 2011 to ~~2017.~~2018. Management believes it has adequately provided for taxes for such years.

Our gross unrecognized tax benefits, including related interest and penalties, totaled ~~$14~~$12 million at March 31, ~~2019~~2020 and ~~$17 million at~~ December 31, ~~2018.~~2019. We accrue interest related to uncertain tax positions in income tax expense. The amount of any change in the balance of uncertain tax liabilities over the next 12 months is not expected to be material to our consolidated financial statements.

~~13. Leases and Contingencies~~

~~LEASES~~

~~Our leases primarily consist of leased office space, automobiles, and information technology equipment.~~

~~As described in Note 2, we have adopted ASU 2016-02,~~ ~~Leases~~, as of January 1, 2019. We have adopted the standard on the date of initial application using the optional transition approach. As a result of this election, the prior periods presented have not been adjusted. Additionally, we have elected the practical expedient to treat both the lease component and non-lease component for our leased office space portfolio as a single lease component.

All our leases are classified as operating leases. At inception of an arrangement we determine if a lease exists. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. At lease commencement date, we recognize right-of-use assets and lease liabilities measured

Table of Contents

atOn March 27, 2020, President Trump signed into law the ~~present value~~CARES Act. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of ~~lease~~employer side social security payments, ~~over~~net operating loss carryback periods, and technical corrections to tax depreciation methods for qualified improvement property. We continue to examine the ~~lease term. Since~~impacts the CARES Act may have on our ~~operating leases~~business. We do not ~~provide an implicit rate, we utilize~~expect the ~~best available information~~CARES Act to ~~determine~~have a material impact on our ~~incremental borrowing rate which is used~~tax expense. We will continue to ~~calculate the present value of lease payments. The right-of-use asset also includes any prepaid fixed lease payments and excludes lease incentives. Options~~monitor legislative developments related to extend or terminate a lease may be included in our lease arrangements. We reflect the renewal or termination option in the right-of-use asset and lease liability when it is reasonably certain that we will exercise those options. Operating lease costs for lease payments are recognized on a straight-line basis over the lease term and are included in “Other operating expenses” in our condensed consolidated statement of operations. The operating lease right-of-use assets are included in “Other assets” and the operating lease liabilities are included in “Other liabilities” in our condensed consolidated balance sheet.COVID-19.

Our operating leases have remaining lease terms of one year to ten years. In the normal course of business, we will renew leases that expire or replace them with leases on other properties. In addition to rent, we pay taxes, insurance, and maintenance expenses under certain leases as variable lease payments. As of March 31, 2019, our operating right-of-use asset balance was $160 million and our operating lease liability balance was $175 million. Our operating lease costs totaled $17 million, our variable lease costs totaled $4 million and our sublease income was immaterial for the three months ended March 31, 2019.

~~As of March 31, 2019, maturities of lease liabilities, excluding leases on a month-to-month basis, were as follows:~~

(dollars in millions) Operating Leases

2019 (excluding the three months ended March 31, 2019) $ 46
2020 52
2021 39
2022 27
2023 13
2024 6
Thereafter 6
Total lease payments 189
Imputed interest (14 )
Total $ 175



~~Weighted Average Remaining Lease Term~~			~~3.8 years~~
~~Weighted Average Discount Rate~~	~~3.74~~	%14. Contingencies

~~As of December 31, 2018, under ASC 840,~~ ~~Leases,~~ ~~annual rental commitments for leased office space, automobiles and information technology equipment accounted for as operating leases, excluding leases on a month-to-month basis, were as follows:~~

(dollars in millions) Lease Commitments

2019 $ 60
2020 50
2021 37
2022 26
2023 12
2024+ 12
Total $ 197

~~Rental expense totaled $74 million in 2018.~~

~~Table of Contents~~

LEGAL CONTINGENCIES

In the normal course of business, we have been named, from time to time, as defendants in various legal actions, including arbitrations, class actions and other litigation arising in connection with our activities. Some of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. While we will continue to evaluate legal actions to determine whether a loss is reasonably possible or probable and is reasonably estimable, there can be no assurance that material losses will not be incurred from pending, threatened or future litigation, investigations, examinations, or other claims.

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

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

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

~~Federal Securities Class Action~~

~~On February 10, 2017, a putative class action lawsuit,~~ ~~Galestan v. OneMain Holdings, Inc., et al.~~, was filed in the U.S. District Court for the Southern District of New York, naming as defendants the Company and two of its officers. The lawsuit alleges violations of the Exchange Act for allegedly making materially misleading statements and/or omitting material information concerning alleged integration issues after the OneMain Acquisition in November 2015, and was filed on behalf of a putative class of persons who purchased or otherwise acquired the Company’s common stock between February 25, 2016 and November 7, 2016. The complaint seeks an award of unspecified compensatory damages, an award of interest, reasonable attorney’s fees, expert fees and other costs, and equitable relief as the court may deem just and proper. On March 23, 2017, the court appointed a lead plaintiff for the putative class and approved the lead plaintiff’s selection of counsel. The plaintiff filed an amended complaint on June 13, 2017 challenging statements regarding the Company’s projections of future financial performance and certain statements regarding integration after the OneMain Acquisition. On September 29, 2017, pursuant to the Court’s Individual Rules and Practices, we sought permission to file a motion to dismiss the amended complaint and on December 12, 2018, the Court denied that motion. On January 4, 2019, the Company requested permission to reargue the motion to dismiss decision with respect to the challenged statements from February 2016. On April 23, 2019, the parties executed a settlement agreement, which is subject to Court approval. Papers in support of approval of the settlement have been filed with the Court. The settlement agreement provides for the dismissal of the action with prejudice. The amount incurred by the Company is immaterial and has been properly accrued, including the related insurance proceeds, as of March 31, 2019. The settlement contains no admission of liability by the Company and the other defendants.

~~14. Benefit Plans~~

During the three months ended March 31, 2019 and 2018, the components of net periodic benefit cost with respect to our defined benefit pension plans were immaterial. We do not currently fund post-retirement benefits.

Table of Contents



15. Segment Information

At March 31, ~~2019, our two segments included~~2020, Consumer and Insurance ~~and Acquisitions and Servicing.~~(“C&I”) is our only reportable segment. The remaining components (which we refer to as “Other”) consist of (i) our liquidating SpringCastle Portfolio servicing activity and (ii) our non-originating legacy operations, which primarily include our liquidating real estate ~~loans and our liquidating retail sales finance portfolios.~~loans.

~~Our segment~~The accounting policies of the C&I segment are the same as those disclosed in Note 3 and Note 2219 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our ~~2018~~2019 Annual Report on Form 10-K. We report the operating results of our segments and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for interest expense and operating costs, and (ii) excludes the impact of applying purchase accounting.

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

(dollars in millions)
Consumer
and
Insurance

Acquisitions
and
Servicing
Other
Segment to
GAAP
Adjustment

Consolidated
Total

At or for the Three Months Ended March 31, 2019

Interest income $ 954
$ —
$ 3
$ (1 ) $ 956
Interest expense 229
—
2
5
236
Provision for finance receivable losses 276
—
—
10
286
Net interest income after provision for finance receivable losses 449
—
1
(16 ) 434
Other revenues 146
7
1
(6 ) 148
Other expenses 363
7
5
5
380
Income (loss) before income tax expense (benefit) $ 232
$ —

$ (3 ) $ (27 ) $ 202

Assets $ 19,197
$ —
$ 95
$ 2,066
$ 21,358


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

At or for the Three Months Ended March 31, 2018
At or for the Three Months Ended March 31, 2020													At or for the Three Months Ended March 31, 2020
Interest income	$	873	$	—	$	5		$	(16	)	$	862	Interest income	$	1,101	$	2	$	3	$	1,106
Interest expense	194		—		5			1			200		Interest expense	249		1		5		255
Provision for finance receivable losses	258		—		(2		)	(2		)	254		Provision for finance receivable losses	530		—		1		531
Net interest income (loss) after provision for finance receivable losses	421		—		2			(15		)	408
Net interest income after provision for finance receivable losses													Net interest income after provision for finance receivable losses	322		1		(3)		320
Other revenues	106		9		(2		)	24			137		Other revenues	136		4		1		141
Other expenses	353		8		10			6			377		Other expenses	407		6		5		418
Income (loss) before income tax expense (benefit)	$	174	$	1	$	(10	)	$	3		$	168	Income (loss) before income tax expense (benefit)	$	51	$	(1)	$	(7)	$	43

Assets	$	18,033	$	—	$	255		$	2,179		$	20,467	Assets	$	22,570	$	72	$	2,051	$	24,693




At or for the Three Months Ended March 31, 2019
Interest income	$	954	$	3	$	(1)	$	956
Interest expense	229		2		5		236
Provision for finance receivable losses	276		—		10		286
Net interest income after provision for finance receivable losses	449		1		(16)		434
Other revenues *	146		8		(6)		148
Other expenses	363		12		5		380
Income (loss) before income tax expense (benefit)	$	232	$	(3)	$	(27)	$	202

Assets	$	19,197	$	95	$	2,066	$	21,358

*Other revenues in Other includes the gain on the February 2019 Real Estate Loan Sale as well as the impairment adjustments on the remaining loans in held for sale in 2019.

Table of Contents



16. Fair Value Measurements

The accounting policies of our Fair Value Measurements are the same as those disclosed in Note 3 and Note 2320 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our ~~2018~~2019 Annual Report on Form 10-K.

The following table presents the carrying amounts and estimated fair values of our financial instruments and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:


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

March 31, 2020
Assets
Cash and cash equivalents	$	4,185	$	18	$	—	$	4,203	$	4,203
Investment securities	35		1,763		2		1,800		1,800
Net finance receivables, less allowance for finance receivable losses	—		—		18,369		18,369		16,087

Restricted cash and restricted cash equivalents	575		—		—		575		575
Other assets *	—		—		70		70		69

Liabilities
Long-term debt	$	—	$	19,980	$	—	$	19,980	$	20,443


December 31, 2019
Assets
Cash and cash equivalents	$	1,159	$	68	$	—	$	1,227	$	1,227
Investment securities	45		1,835		4		1,884		1,884
Net finance receivables, less allowance for finance receivable losses	—		—		19,319		19,319		17,560

Restricted cash and restricted cash equivalents	405		—		—		405		405
Other assets *	—		—		84		84		74





Liabilities
Long-term debt	$	—	$	18,509	$	—	$	18,509	$	17,212

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

March 31, 2019
Assets
Cash and cash equivalents $ 1,666
$ 43
$ —
$ 1,709
$ 1,709
Investment securities 37
1,702
4
1,743
1,743
Net finance receivables, less allowance for finance receivable losses —
—
16,872
16,872
15,403
Finance receivables held for sale —
—
80
80
78
Restricted cash and restricted cash equivalents 575
—
—
575
575
Other assets * —
—
13
13
13

Liabilities
Long-term debt $ —
$ 16,681
$ —
$ 16,681
$ 16,117

December 31, 2018
Assets
Cash and cash equivalents $ 618
$ 61
$ —
$ 679
$ 679
Investment securities 34
1,655
5
1,694
1,694
Net finance receivables, less allowance for finance receivable losses —
—
16,734
16,734
15,433
Finance receivables held for sale —
—
103
103
103
Restricted cash and restricted cash equivalents 499
—
—
499
499
Other assets * —
1
15
16
16

Liabilities

Long-term debt $ —
$ 15,041
$ —
$ 15,041
$ 15,178


*	~~Other assets at March 31, 2019 and December 31, 2018 include miscellaneous receivables related to our liquidating loan portfolios.~~

*Other assets at March 31, 2020 and December 31, 2019 includes finance receivables held for sale and miscellaneous receivables related to our liquidating loan portfolios.

Table of Contents

FAIR VALUE MEASUREMENTS — RECURRING BASIS

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


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

March 31, 2019
March 31, 2020									March 31, 2020
Assets									Assets
Cash equivalents in mutual funds	$	1,033	$	—	$	—	$	1,033	Cash equivalents in mutual funds	$	3,951	$	—	$	—	$	3,951
Cash equivalents in securities	—		43		—		43		Cash equivalents in securities	—		18		—		18
Investment securities:									Investment securities:
Available-for-sale securities									Available-for-sale securities

U.S. government and government sponsored entities	—		17		—		17		U.S. government and government sponsored entities	—		11		—		11
Obligations of states, municipalities, and political subdivisions	—		87		—		87		Obligations of states, municipalities, and political subdivisions	—		89		—		89
Certificates of deposit and commercial paper	—		59		—		59
Commercial paper									Commercial paper	—		76		—		76
Non-U.S. government and government sponsored entities	—		145		—		145		Non-U.S. government and government sponsored entities	—		139		—		139
Corporate debt	—		1,057		2		1,059		Corporate debt	4		1,051		—		1,055
RMBS	—		141		—		141		RMBS	—		217		—		217
CMBS	—		66		—		66		CMBS	—		63		—		63
CDO/ABS	—		83		—		83		CDO/ABS	—		81		1		82

Total available-for-sale securities	—		1,655		2		1,657		Total available-for-sale securities	4		1,727		1		1,732
Other securities									Other securities
Bonds:									Bonds:

Non-U.S. government and government sponsored entities	—		1		—		1		Non-U.S. government and government sponsored entities	—		1		—		1
Corporate debt	—		37		1		38		Corporate debt	—		18		—		18
RMBS	—		1		—		1		RMBS	—		1		—		1

CDO/ABS	—		1		—		1		CDO/ABS	—		13		—		13
Total bonds	—		40		1		41		Total bonds	—		33		—		33
Preferred stock	13		7		—		20		Preferred stock	12		3		—		15
Common stock	24		—		—		24		Common stock	19		—		—		19
Other long-term investments	—		—		1		1		Other long-term investments	—		—		1		1
Total other securities	37		47		2		86		Total other securities	31		36		1		68
Total investment securities	37		1,702		4		1,743		Total investment securities	35		1,763		2		1,800

Restricted cash in mutual funds	560		—		—		560		Restricted cash in mutual funds	573		—		—		573
Total	$	1,630	$	1,745	$	4	$	3,379	Total	$	4,559	$	1,781	$	2	$	6,342

Table of Contents


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

December 31, 2019
Assets
Cash equivalents in mutual funds	$	775	$	—	$	—	$	775
Cash equivalents in securities	—		68		—		68
Investment securities:
Available-for-sale securities

U.S. government and government sponsored entities	—		11		—		11
Obligations of states, municipalities, and political subdivisions	—		92		—		92
Certificates of deposit and commercial paper	—		91		—		91
Non-U.S. government and government sponsored entities	—		147		—		147
Corporate debt	5		1,093		—		1,098
RMBS	—		217		—		217
CMBS	—		57		—		57
CDO/ABS	—		85		—		85




Total available-for-sale securities	5		1,793		—		1,798
Other securities
Bonds:
Non-U.S. government and government sponsored entities	—		1		—		1
Corporate debt	—		23		1		24
RMBS	—		1		—		1

CDO/ABS	—		12		2		14
Total bonds	—		37		3		40
Preferred stock	14		5		—		19
Common stock	26		—		—		26
Other long-term investments	—		—		1		1
Total other securities	40		42		4		86
Total investment securities	45		1,835		4		1,884
Restricted cash in mutual funds	403		—		—		403
Total	$	1,223	$	1,903	$	4	$	3,130

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

December 31, 2018

Assets

Cash equivalents in mutual funds $ 426
$ —
$ —
$ 426
Cash equivalents in securities —
61
—
61
Investment securities:

Available-for-sale securities

U.S. government and government sponsored entities —
21
—
21
Obligations of states, municipalities, and political subdivisions —
90
—
90
Certificates of deposit and commercial paper —
63
—
63
Non-U.S. government and government sponsored entities —
143
—
143
Corporate debt —
995
2
997
RMBS —
128
—
128
CMBS —
71
—
71
CDO/ABS —
93
1
94
Total available-for-sale securities —
1,604
3
1,607
Other securities

Bonds:

Non-U.S. government and government sponsored entities —
1
—
1
Corporate debt —
42
1
43
RMBS —
1
—
1
CDO/ABS —
1
—
1
Total bonds —
45
1
46
Preferred stock 13
6
—
19
Common stock 21
—
—
21
Other long-term investments —
—
1
1
Total other securities 34
51
2
87
Total investment securities 34
1,655
5
1,694
Restricted cash in mutual funds 482
—
—
482
Total $ 942
$ 1,716
$ 5
$ 2,663

Due to the insignificant activity within the Level 3 assets during the three months ended March 31, ~~2019~~2020 and ~~2018~~the 2019 period, we have omitted the additional disclosures relating to the changes in Level 3 assets measured at fair value on a recurring basis and the quantitative information about Level 3 unobservable ~~inputs in the tables above.~~inputs.

FAIR VALUE MEASUREMENTS — NON-RECURRING BASIS

We measure the fair value of certain assets on a non-recurring basis when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Net impairment charges recorded on assets measured at fair value on a non-recurring basis were ~~$3 million and~~ immaterial for the three months ended March 31, ~~2019~~2020 and ~~2018, respectively.~~2019.

FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS

See Note 2320 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our ~~2018~~2019 Annual Report on Form 10-K for information regarding our methods and assumptions used to estimate fair value.

Table of Contents



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

An index to our management’s discussion and analysis follows:

Table of Contents



Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but instead represent only management’s current beliefs regarding future events. By their nature, forward-looking statements are subject to risks, uncertainties, assumptions, and other important factors that may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements. We caution you not to place undue reliance on these forward-looking statements, ~~that~~which speak only as of the date they were made. We do not undertake any obligation to update or revise these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events or the non-occurrence of anticipated events, whether as a result of new information, future developments, or otherwise,

except as required by law. Forward-looking statements include, without limitation, statements concerning future plans, objectives, goals, projections, strategies, events, or performance, and underlying assumptions and other statements related thereto. Statements preceded by, followed by or that otherwise include the words “anticipates,” “appears,” “are likely,” “believes,” “estimates,” “expects,” “foresees,” “intends,” “plans,” ~~“projects”~~“projects,” and similar expressions or future or conditional verbs such as “would,” “should,” “could,” “may,” or ~~“will,”~~“will” are intended to identify forward-looking statements. Important factors that could cause actual results, performance, or achievements to differ materially from those expressed in or implied by forward-looking statements include, without limitation, the following:

•adverse changes in general economic conditions, including the interest rate environment and the financial markets;

•risks associated with the COVID-19 pandemic and the mitigation efforts by governments to the pandemic and related effects on us, our customers, and employees;

•our estimates of the allowance for finance receivable losses may not be adequate to absorb actual losses, causing our provision for finance receivable losses to increase, which would adversely affect our results of operations;

•increased levels of unemployment and personal bankruptcies;

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

•adverse changes in the rate at which we can collect or potentially sell our finance receivables portfolio;

•natural or accidental events such as earthquakes, hurricanes, tornadoes, fires, or floods affecting our customers, collateral, or our branches or other operating facilities;

•war, acts of terrorism, riots, civil disruption, pandemics, disruptions in the operation of our information systems, or other events disrupting business or commerce;

•risks related to the acquisition or sale of assets or businesses or the formation, termination, or operation of joint ventures or other strategic alliances, including increased loan delinquencies or net charge-offs, integration or migration issues, increased costs of servicing, incomplete records, and retention of customers;

our estimates of the allowance for finance receivable losses may not be adequate to absorb actual losses, causing our provision for finance receivable losses to increase, which would adversely affect our results of operations;

~~increased levels of unemployment and personal bankruptcies;~~

~~our strategy of increasing the proportion of secured loans may lead to declines in or slower growth in our personal loan receivables and portfolio yield;~~

~~adverse changes in the rate at which we can collect or potentially sell our finance receivables portfolio;~~

~~Table of Contents~~

~~our decentralized branch loan approval process could expose us to greater than historical delinquencies and charge-offs;~~

~~natural or accidental events such as earthquakes, hurricanes, tornadoes, fires, or floods affecting our customers, collateral, or branches or other operating facilities;~~

~~war, acts of terrorism, riots, civil disruption, pandemics, disruptions in the operation of our information systems, or other events disrupting business or commerce;~~

•a failure in or breach of our operational or security systems or infrastructure or those of third parties, including as a result of cyber-attacks,; or other cyber-related incidents involving the loss, theft or unauthorized disclosure of personally identifiable information, or “PII,” of our present or former customers;

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

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

•increased competition, ~~lack of~~or changes in customer responsiveness to our distribution channels, an inability to make technological improvements, and the ability of our competitors to offer a more attractive range of personal loan products than we offer;

Table of Contents

•changes in federal, state, or local laws, regulations, or regulatory policies and practices that adversely affect our ability to conduct business or the manner in which we currently are permitted to conduct business, such as licensing requirements, pricing limitations or restrictions on the method of offering products, as well as changes that may result from increased regulatory scrutiny of the sub-prime lending industry, our use of ~~third party~~third-party vendors and real estate loan servicing, or changes in corporate or individual income tax laws or regulations, including effects of the Tax Act and the CARES Act;

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

~~we may be unable~~•our inability to successfully implement our growth strategy for our consumer lending business or successfully acquire portfolios of personal loans;

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

•potential liability relating to finance receivables which we have sold or securitized or may sell or securitize in the future if it is determined that there was a non-curable breach of a representation or warranty made in connection with such transactions;

•the costs and effects of any actual or alleged violations of any federal, state, or local laws, rules or regulations, including any ~~litigation~~ associated ~~therewith;~~litigation;

•the costs and effects of any fines, penalties, judgments, decrees, orders, inquiries, investigations, subpoenas, or enforcement or other proceedings of any governmental or quasi-governmental agency or authority and any ~~litigation~~ associated ~~therewith;~~litigation;

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

•our ability to comply with our debt covenants;

•our ability to generate sufficient cash to service all of our indebtedness;

•any material impairment or write-down of the value of our assets;

•the ownership of ~~our~~OMH's common stock continues to be highly concentrated, which may prevent other minority stockholders from influencing significant corporate decisions and may result in conflicts of interest;

~~Table of Contents~~

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

•our substantial indebtedness, which could prevent us from meeting our obligations under our debt instruments and limit our ability to react to changes in the economy or our industry or our ability to incur additional borrowings;

•our ability to maintain sufficient capital levels in our regulated and unregulated subsidiaries;

•changes in accounting standards or tax policies and practices and the application of such new standards, policies and practices;

•management estimates and assumptions, including estimates and assumptions about future events, may prove to be incorrect; and

~~any failure to achieve the SpringCastle Portfolio performance requirements, which could, among other things, cause us to lose our loan servicing rights over the SpringCastle Portfolio; and~~

•various risks relating to continued compliance with the Settlement Agreement with the U.S. Department of Justice.

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

Table of Contents

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. You should specifically consider the factors identified in this report and in the documents we file with the SEC, including our 2019 Annual Report on Form 10-K, that could cause actual results to differ before making an investment decision to purchase our ~~common stock~~ securities and should not place undue reliance on any of our forward-looking ~~statements~~.statements. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

~~Table of Contents~~



Overview

We are a leading provider of responsible personal loan products, primarily to non-prime customers. Our network of ~~approximately 1,600~~over 1,500 branch offices in 44 states is staffed with expert personnel and is complemented by our ~~online origination capabilities and~~ centralized operations ~~which allows us to reach customers located outside our branch network.~~and digital presence through online lending. Our digital platform provides current and prospective customers the option of ~~obtaining~~applying for a personal loan via our website, www.omf.com. The information on our website is not incorporated by reference into this report. In connection with our personal loan business, our insurance subsidiaries offer our customers optional credit and non-credit insurance, and other products.

In addition to our loan originations, and insurance and other product sales activities, we service loans owned by us and service loans owned by third parties; pursue strategic acquisitions and dispositions of assets and businesses, including loan portfolios or other financial assets; and may establish joint ventures or enter into other strategic alliances.

OUR PRODUCTS

Our product offerings include:

•Personal Loans — We offer personal loans through our branch network, centralized operations, and our website, www.omf.com, to customers who generally need timely access to cash. Our personal loans are non-revolving, with a fixed-rate, a fixed term of three to six years, and are secured by automobiles, other titled collateral, or are unsecured. At March 31, ~~2019,~~2020, we had approximately ~~2.3~~2.40 million personal loans, of which 52% were secured by titled property, representing ~~$16.1~~$18.3 billion of net finance receivables, compared to approximately ~~2.4~~2.44 million personal loans, of which 52% were secured by titled property, totaling ~~$16.2~~$18.4 billion at December 31, ~~2018.~~

2019.

•Insurance Products — We offer our customers optional credit insurance products (life insurance, disability insurance, and involuntary unemployment insurance) and optional non-credit insurance products through both our branch network and our centralized operations. Credit insurance and non-credit insurance products are provided by our affiliated insurance companies. We offer GAP coverage as a waiver product or insurance. We also offer optional home and auto membership plans of an unaffiliated company.

Our non-originating legacy products include:

•Other Receivables —We ceased originating real estate loans in 2012 and ~~purchasing retail sales finance contracts and revolving retail accounts in 2013. We~~we continue to service or sub-service liquidating real estate ~~loans and retail sales finance contracts. Effective September 30, 20~~18, our real estate loans were transferred from held for investment to held for sale. See Notes 5, 6 and 7 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our 2018 Annual Report on Form 10-K for more information about Other Receivables.

loans.

OUR ~~SEGMENTS~~SEGMENT

~~At March 31,~~Beginning in the fourth quarter of 2019, ~~we had two operating segments:~~

~~Consumer and Insurance; and~~

~~Acquisitions and Servicing.~~

C&I is our only reportable segment. The remaining components (which we refer to as “Other”) consist of (i) our liquidating SpringCastle Portfolio servicing activity and (ii) our non-originating legacy operations, which primarily include our liquidating real estate ~~loan portfolio and our liquidating retail sales finance portfolio.~~

loans. See Note 15 of the Notes to the Condensed Consolidated Financial Statements included in this report for more information about our ~~segments.~~

segment.

Table of Contents



Recent Developments and Outlook

RECENT DEVELOPMENTS

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

On February 11, 2019, the Company announced an initial quarterly dividend of $0.25 per share and paid $34 million on March 15, 2019 to record holders of our common stock as of the close of business on February 26, 2019. On April 29, 2019, the Company announced a quarterly dividend of $0.25 per share, payable on June 14, 2019 to record holders of our common stock as of the close of business on May 29, 2019.

~~Issuance of 6.125% Senior Notes Due 2024 and Redemptions of 5.25% Senior Notes due 2019 and 6.00% Senior Notes Due 2020~~

For information regarding ~~such notes issuance~~the quarterly dividends declared by OMH, see “Liquidity and ~~redemptions, see Note 7 of the Notes to the Condensed Consolidated Financial Statements included in this report.~~

~~Departure of Chief Financial Officer (“CFO”) and Appointment of CFO~~

On April 25, 2019, our Board of Directors appointed Micah R. Conrad as CFO. Mr. Conrad replaces Scott T. Parker, who resigned as Executive Vice President and CFO on March 26, 2019 and departed the Company on April 4, 2019. Mr. Parker’s departure was not due to any disagreement between Mr. Parker and the Company relating to the Company’s financial reporting or condition, policies or practices. Mr. Conrad has served as the Company’s Acting CFO from March 26, 2019 until his appointment as CFO.

~~Synergies from the OneMain Acquisition - Sale of Merit Life Insurance Co.~~

As part of our continuing integration efforts from the OneMain Acquisition, on March 7, 2019, we entered into a Share Purchase Agreement with a third-party insurance holding company to sell all of the issued and outstanding shares of Merit, a wholly owned subsidiary of SFC. The transaction is expected to close in the second quarter of 2019 and is subject to regulatory approval and other customary closing conditions. The assets and liabilities of Merit, that are subject to sale, are classified as held for sale as of March 31, 2019 and are reflected in “Other assets” and “Other liabilities” respectively in our condensed consolidated balance sheet. Based on the estimated purchase price, there is no indication of impairment of net assets held for sale as of March 31, 2019.

~~OUTLOOK~~

With our experienced management team, long track record of successfully accessing the capital markets, and strong demand for consumer credit, we believe we are well positioned to execute on our strategic priorities to strengthen our capital base. We further describe our key initiatives and strategies under “Recent Developments and Outlook”Capital Resources” of the Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.

Stock Repurchase Program

During the quarter ended March 31, 2020, the OMH Board of Directors approved a stock repurchase program, which allowed us to repurchase up to $200 million of OMH’s outstanding common stock. See Note 11 of the Notes to the Condensed Consolidated Financial Statements and Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Part II ~~- Item 7~~ included in this report for further information on our ~~2018 Annual Report~~shares repurchased.

Appointment of Member of the SFC Board of Directors and Executive Vice President of SFC

On January 2, 2020, Adam L. Rosman was appointed to the SFC Board of Directors and as Executive Vice President. Mr. Rosman replaced John C. Anderson, who resigned as a member of SFC's board of directors and as Executive Vice President on ~~Form 10-K.~~January 2, 2020.

Table of Contents

OUTLOOK

COVID-19 has evolved into a global pandemic and has spread to many regions of the world, including the United States. We are closely tracking the evolving impact of COVID-19 and are focused on helping our customers and employees through these difficult times. We are generally classified as an essential business by government authorities as we play a vital role by providing over 2.4 million personal loans to hardworking Americans in hundreds of local communities where we have over 1,500 branches that are located in 44 states as of March 31, 2020. Our central operations remain operational and essentially all our branches remain open.

As it became apparent COVID-19 would have an impact to our business and our customers, we took active and decisive steps to implement an immediate COVID-19 operational response to:

•Maintain strong capital and liquidity: We have a strong balance sheet and liquidity profile as a result of numerous actions taken over the last several years to increase conduit lines, deleverage and extend our maturities. We elected to draw an aggregate $3.5 billion under our conduit facilities as of March 31, 2020 as a prudent measure in order to increase liquidity and preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 pandemic. It has been the long-term strategy of the Company to run a conservative balance sheet which places a premium on safety and a long liquidity runway. As a result, we had $4.2 billion of cash and cash equivalents as of March 31, 2020, which we believe is sufficient to run our operation under numerous stress scenarios through 2021. We believe our liquidity runway could be further extended with our $3.6 billion of undrawn committed capacity under our revolving conduit facilities and our $6.1 billion of unencumbered personal loans.

•Tighten underwriting: We actively monitor the changing economic environment and adjust our underwriting standards accordingly. We quickly took steps to tighten underwriting standards and reduce originations to higher risk categories of lending. We are using our decades of experience and proprietary data to serve our customers while maintaining an appropriately conservative portfolio risk-management program.

•Continuous stress testing: It is our practice to stress test our portfolio regularly. For the last several years, our underwriting models have incorporated the estimated impacts of a potential downturn, such that our pre-provision return suggests we maintain profitability with a 100% increase in losses.

•Focus on serving our customers: Our top priority is to service and care for our current customers. We actively engaged with other lenders to put forward solutions to help our customers through this difficult time. We have taken steps to enhance our servicing capacity by shifting branch team members toward a greater focus on servicing existing loans. This is in addition to our employees who are already solely focused on servicing, which we believe is a clear differentiator for us and will lead to better outcomes for our customers and for our business. In addition, we have enhanced our borrower assistance program to ensure that we can help customers who are immediately impacted by the coronavirus, including offering reduced and deferred payment options, waiving late fees for payments due March 15, 2020 through April 30, 2020, and suspending credit bureau reporting for newly delinquent accounts. The enrollment in our borrower assistance program may increase in the near term, which may also adversely affect our income and other results of operations.

•Deploy business continuity plans: We deployed business continuity plans to ensure operational flexibility through any environment, including the ability to work remotely. Our hybrid operating model, with fully scaled branch and central operations teams, can dynamically reroute application and servicing capabilities to service centers and branches across the United States. Although a small number of branches have been temporarily closed and reopened for a variety of reasons, from deep cleaning to government mandate, all of our teams, both branch and central operations, remain operational today. We continue to serve our customers by appointment while maintaining social distancing and other safety protocols to keep our employees and customers safe.

Certain preliminary borrower trends have emerged in connection with the COVID-19 pandemic. A tightening of our underwriting standards, combined with significantly lower consumer demand, has led to a significant reduction in originations volume. However, delinquencies have declined thus far in April 2020 when compared to March 2020 due in part to our enhanced borrower assistance program and to increased cash payments.

Table of Contents

As a result of the COVID-19 pandemic, we expect near term impacts to affect our originations, reserves, and involuntary unemployment insurance claims. Our credit tightening measures, combined with reduced customer demand, may result in lower originations as “stay at home” orders remain in place and economic uncertainty remains high. We may experience further changes to the macroeconomic assumptions within our forecast used in our credit loss allowance model, as well as changes to our loan loss performance outlook, both of which could lead to further changes in our allowance for loan losses, reserve rate, and provision expense.

The full extent to which the COVID-19 pandemic will impact our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19 and the mitigation efforts by government entities, as well as our own immediate COVID-19 operational response. We have and will continue to take active and decisive steps in this time of uncertainty and remain committed to the safety of our employees, while also continuing to serve our customers by remaining open with appropriate protective protocols in place. We have served working Americans for many decades at scale, through both changing economic conditions and natural disasters, and will continue to remain focused on our strategic priorities of strong liquidity, disciplined underwriting, and serving our customers.

Table of Contents



Results of Operations

The results of SFC are consolidated into the results of OMH. Due to the nominal differences between SFC and OMH, content throughout this section relate only to OMH. See Note 2 of the Notes to the Consolidated Financial Statements included in this report for the reconciliation of results of SFC to OMH.

OMH'S CONSOLIDATED RESULTS

See the table below for ~~our~~OMH's consolidated operating results and selected financial statistics. A further discussion of ~~our~~OMH's operating results for ~~each of~~ our operating ~~segments~~segment is provided under “Segment Results” below.


	At or for the Three Months Ended March 31,
(dollars in millions, except per share amounts)	2020			2019

Interest income	$	1,106		$	956
Interest expense	255			236
Provision for finance receivable losses	531			286
Net interest income after provision for finance receivable losses	320			434

Other revenues	141			148
Other expenses	418			380
Income before income taxes	43			202
Income taxes	11			50
Net income	$	32		$	152



Share Data:



Earnings per share:

Diluted	$	0.24		$	1.11

Selected Financial Statistics *
Finance receivables held for investment:
Net finance receivables	$	18,269		$	16,136
Number of accounts	2,400,536			2,326,835




Average net receivables	$	18,380		$	16,146
Yield	24.17		%	23.92		%
Gross charge-off ratio	7.35		%	7.82		%
Recovery ratio	(0.90)		%	(0.70)		%
Net charge-off ratio	6.45		%	7.12		%
30-89 Delinquency ratio	2.25		%	1.93		%
Origination volume	$	2,589		$	2,582
Number of accounts originated	276,773			276,329
Debt balances:
Long-term debt balance	$	20,443		$	16,117
Average daily debt balance	17,675			15,839

At or for the
Three Months Ended March 31,
(dollars in millions, except per share amounts) 2019 2018

Interest income $ 956
$ 862
Interest expense 236
200
Provision for finance receivable losses 286
254
Net interest income after provision for finance receivable losses 434
408
Other revenues 148
137
Other expenses 380
377
Income before income taxes 202
168
Income taxes 50
44
Net income $ 152
$ 124

Share Data:
Earnings per share:
Diluted $ 1.11
$ 0.91

Selected Financial Statistics *
Finance receivables held for investment:
Net finance receivables $ 16,136
$ 14,987
Number of accounts 2,326,835
2,348,676
Finance receivables held for sale:
Net finance receivables $ 78
$ 126
Number of accounts 2,357
2,345
Finance receivables held for investment and held for sale:
Average net receivables $ 16,146
$ 14,986
Average daily debt balance $ 15,839
$ 14,947
Yield 23.92 % 23.25 %
Gross charge-off ratio
7.82 % 7.85 %
Recovery ratio
(0.70 )% (0.75 )%
Net charge-off ratio 7.12 % 7.10 %
30-89 Delinquency ratio 1.93 % 2.11 %
Origination volume $ 2,582
$ 2,540
Number of accounts originated 276,329
324,730


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

Table of Contents

Comparison of Consolidated Results for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019

Interest income increased ~~$94~~$150 million or ~~11%~~16% for the three months ended March 31, ~~2019~~2020 when compared to the same period in ~~2018~~2019 primarily due to ~~continued~~ growth in our loan ~~portfolio and higher yield, which was primarily driven by lower amortization of purchase premium on non-credit impaired finance receivables.~~portfolio.

Interest expense increased ~~$36~~$19 million or ~~18%~~8% for the three months ended March 31, ~~2019~~2020 when compared to the same period in ~~2018~~2019 primarily due to ~~the~~an increase in average debt of $1.8 billion, which was issued at a lower cost than our average cost of funds and is consistent with the growth in our loan portfolio, and our strategic actions to increase unsecured debt, which tends to have higher interest rates than secured debt, in order to achieve a more proportional mix of secured and unsecured funding.portfolio.

See Notes 78 and 89 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information on our long-term debt, securitization transactions, and our revolving conduit facilities.

Provision for finance receivable losses increased ~~$32~~$245 million or ~~13%~~86% for the three months ended March 31, ~~2019~~2020 when compared to the same period in ~~2018~~2019 primarily ~~driven by the growth in our loan portfolio offset by lower required provision~~ due to the ~~continued change~~impact of COVID-19 on our estimated allowance for loan loss requirement as we have incorporated unfavorable forecasted economic trends, including a rise in ~~portfolio mix to more secured personal loans. As~~unemployment, and as a result, ~~of the transfer of the remaining real estate loans to held for sale, the level of~~our allowance for finance receivable losses as a percentage of ~~net~~ finance receivables ~~has~~in the current period increased from 10.6% to 11.9%.

Other revenues decreased ~~from the same period in 2018.~~

~~Other revenues~~ ~~increased $11~~$7 million or 8%5% for the three months ended March 31, ~~2019~~2020 when compared to the same period in ~~2018~~2019 primarily due to ~~(i)~~ a ~~$13~~$17 million ~~increase of~~decrease in investment revenue primarily driven by ~~unrealized gains~~mark-to-market losses on equity investment securities and an ~~increase in interest income on our cash and cash equivalents, (ii) an~~ $11 million decrease related to the net gain on sale of a cost method investment ~~and (iii) a $5 million increase~~ in ~~insurance premiums due to~~ the ~~increase in insurance products sold.~~prior period. The ~~increase~~decrease was partially offset by ~~$20~~a $21 million ~~of higher~~increase related to the net ~~losses~~loss on repurchases and repayments of ~~debt.~~debt in the prior period and a $7 million increase in insurance products sold due to higher loan volume.

Other expenses increased $3$38 million or ~~less than 1%~~10% for the three months ended March 31, ~~2019~~2020 when compared to the same period in ~~2018 reflecting our strategy~~2019 due to ~~reinvest~~a $23 million increase in insurance policy benefits and claims primarily related to an increase in involuntary unemployment insurance claims reserves, a $10 million increase in our ~~business.~~marketing initiatives, and our continued investment in our business operations.

Income taxes ~~totaled $50~~decreased $39 million or 78% for the three months ended March 31, ~~2019 compared to $44 million for the same period in 2018. The increase is primarily due to higher pre-tax income in the current period~~2020 when compared to the same period in ~~2018.~~2019 due to lower pre-tax income in the current period. The effective tax rate for the three months ended March 31, ~~2019~~2020 was ~~24.8%~~24.3% compared to ~~26.2%~~24.8% for the same period in ~~2018.~~2019. The effective tax rates for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 differed from the federal statutory rate of 21% primarily due to the effect of state income taxes.

See Note 13 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information on effective tax rates.

Table of Contents

NON-GAAP FINANCIAL MEASURES

~~Adjusted Pretax Income (Loss)~~

Management uses adjusted pretax income (loss), a non-GAAP financial measure, as a key performance measure of our segment. Adjusted pretax income (loss) represents income (loss) before income taxes on a Segment Accounting Basis and excludes direct costs incurred as result of COVID-19, net loss resulting from repurchases and repayments of debt, acquisition-related transaction and integration expenses, net gain on sale of cost method investment, restructuring charges, and net loss on sale of real estate loans. Management believes adjusted pretax income (loss) is useful in assessing the profitability of our ~~segments, in evaluating our operating performance and as a performance goal under the Company’s executive compensation programs. We describe our~~segment.

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

Management utilizes both adjusted pretax net income (loss) and ~~Analysis~~pretax capital generation in evaluating our performance. Additionally, both of ~~Financial Condition and Results of Operations~~these non-GAAP measures are consistent with the performance goals established in ~~Part II - Item 7 included in our 2018 Annual Report on Form 10-K.~~

OMH’s executive compensation program. Adjusted pretax income (loss) is aand pretax capital generation are non-GAAP financial ~~measure~~measures and should be considered supplemental to, but not as a substitute for or superior to, income (loss) before income taxes, net income, or other measures of financial performance prepared in accordance with GAAP.

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


	Three Months Ended March 31,
(dollars in millions)	2020		2019

Consumer and Insurance
Income before income taxes - Segment Accounting Basis	$	51	$	232
Adjustments:
Direct costs associated with COVID-19	3		—
Acquisition-related transaction and integration expenses	6		6
Net loss on repurchase and repayment of debt	—		16
Net gain on sale of cost method investment	—		(11)
Restructuring charges	—		3
Adjusted pretax income (non-GAAP)	$	60	$	246

Provision for finance receivable losses	$	530	$	276
Net charge-offs	(296)		(284)
Pretax capital generation (non-GAAP)	$	294	$	238











Other
Loss before income taxes - Segment Accounting Basis	$	(1)	$	(3)
Adjustments:

Net loss on sale of real estate loans *	—		1





Adjusted pretax loss (non-GAAP)	$	(1)	$	(2)

Three Months Ended March 31,
(dollars in millions) 2019 2018

Consumer and Insurance
Income before income taxes - Segment Accounting Basis $ 232
$ 174
Adjustments:
Net loss on repurchases and repayments of debt 16
27
Net gain on sale of cost method investment (11 ) —
Acquisition-related transaction and integration expenses 6
10
Restructuring charges 3
—
Adjusted pretax income (non-GAAP) $ 246
$ 211

Acquisitions and Servicing
Income before income taxes - Segment Accounting Basis $ —
$ 1
Adjustments —
—
Adjusted pretax income (non-GAAP) $ —
$ 1

Other
Loss before income tax benefit - Segment Accounting Basis $ (3 ) $ (10 )
Net loss on sale of real estate loans * 1
—
Adjusted pretax loss (non-GAAP) $ (2 ) $ (10 )

* During the three months ended March 31, 2019, the resulting impairment on finance receivables held for sale remaining after the February 2019 Real Estate Loan Sale has been combined with the gain on the sale. See Note 6 of the Notes to the Condensed Consolidated Financial Statements included in this report for more information regarding the real estate loan sale.

~~We describe our acquisition-related~~

Table of Contents

Direct costs associated with COVID-19 include (i) information technology costs to transition employees to work remotely, (ii) branch, central operations, and corporate locations sanitization services and supplies, and (iii) other costs and fees directly related to COVID-19.

Acquisition-related transaction and integration expenses ~~under “Results of Operations”~~incurred as a result of the ~~Management’s Discussion~~OneMain Acquisition includes (i) compensation and ~~Analysis~~employee benefit costs, such as retention awards and severance costs, (ii) accelerated amortization of ~~Financial Condition~~acquired software assets, (iii) rebranding to the OneMain brand, (iv) branch infrastructure and ~~Results of Operations in Part II - Item 7 included in our 2018 Annual Report on Form 10-K.~~

other fixed asset integration costs, (v) information technology costs, such as internal platform development, software upgrades and licenses, and technology termination costs, (vi) legal fees and project management costs, (vii) system conversions, including human capital management, marketing, risk, and finance functions, and (viii) other costs and fees directly related to the OneMain Acquisition and integration.

Table of Contents



Segment Results

The results of SFC are consolidated into the results of OMH. Due to the nominal differences between SFC and OMH, content throughout this section relate only to OMH. See Note 2 of the Notes to the Condensed Consolidated Financial Statements included in this report for the reconciliation of results of SFC to OMH.

See Note 2219 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our ~~2018~~2019 Annual Report on Form 10-K for a description of our segments and methodologies used to allocate revenues and expenses to each segment. See Note 15 of the Notes to the Condensed Consolidated Financial Statements included in this report for reconciliations of segment ~~totals~~total to condensed consolidated financial statement amounts.

CONSUMER AND INSURANCE

~~Adjusted~~OMH's adjusted pretax income and selected financial statistics for ~~Consumer and Insurance (which are reported~~C&I on an adjusted Segment Accounting ~~Basis)~~Basis were as follows:


	At or for the Three Months Ended March 31,
(dollars in millions)	2020			2019

Interest income	$	1,101		$	954
Interest expense	249			229
Provision for finance receivable losses	530			276
Net interest income after provision for finance receivable losses	322			449
Other revenues	136			151
Other expenses	398			354
Adjusted pretax income (non-GAAP)	$	60		$	246


Selected Financial Statistics *
Finance receivables held for investment:
Net finance receivables	$	18,283		$	16,170
Number of accounts	2,400,536			2,326,835

Average net receivables	$	18,397		$	16,179
Yield	24.07		%	23.92		%
Gross charge-off ratio	7.36		%	7.92		%
Recovery ratio	(0.90)		%	(0.81)		%
Net charge-off ratio	6.46		%	7.11		%
30-89 Delinquency ratio	2.26		%	1.94		%
Origination volume	$	2,589		$	2,582
Number of accounts originated	276,773			276,329

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

At or for the
Three Months Ended March 31,
(dollars in millions) 2019 2018

Interest income $ 954
$ 873
Interest expense 229
194
Provision for finance receivable losses 276
258
Net interest income after provision for finance receivable losses 449
421
Other revenues 151
133
Other expenses 354
343
Adjusted pretax income (non-GAAP) $ 246
$ 211

Selected Financial Statistics *

Finance receivables held for investment:
Net finance receivables $ 16,170
$ 14,870
Number of accounts 2,326,835
2,344,236
Finance receivables held for investment and held for sale:
Average net receivables $ 16,179
$ 14,860
Yield 23.92 % 23.83 %
Gross charge-off ratio 7.92 % 8.10 %
Recovery ratio (0.81 )% (0.89 )%
Net charge-off ratio 7.11 % 7.21 %
30-89 Delinquency ratio 1.94 % 2.08 %
Origination volume $ 2,582
$ 2,540
Number of accounts originated 276,329
324,730


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

Table of Contents

Comparison of Adjusted Pretax Income for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019

Interest income increased ~~$81~~$147 million or 15% for the three months ended March 31, 2020 when compared to the same period in 2019 primarily due to growth in our loan portfolio.

Interest expense increased$20 million or 9% for the three months ended March 31, ~~2019~~2020 when compared to the same period in ~~2018~~2019 primarily due to ~~continued growth in our loan portfolio.~~

~~Interest expense~~ ~~increased$35 million or 18% for the three months ended March 31, 2019 when compared to the same period in 2018 primarily due to the~~an increase in average debt of $1.8 billion, which was issued at a lower cost than our average cost of funds and is consistent with the growth in our loan portfolio, and our strategic actions to increase unsecured debt, which tends to have higher interest rates than secured debt, in order to achieve a more proportional mix of secured and unsecured funding.portfolio.

Provision for finance receivable losses increased ~~$18~~$254 million or 7%92% for the three months ended March 31, ~~2019~~2020 when compared to the same period in ~~2018~~2019 primarily ~~driven by the growth in our loan portfolio offset by lower required provision~~ due to the ~~continued change~~impact of COVID-19 on our estimated allowance for loan loss requirement as we have incorporated unfavorable forecasted economic trends, including a rise in ~~portfolio mix to more secured personal loans. As~~unemployment, and as a result, ~~of this change in mix as well as improvement in the effectiveness of~~ our ~~collections, the level of~~ allowance for finance receivable losses as a percentage of ~~net~~ finance receivables ~~has~~in the current period increased from 10.6% to 11.9%.

Other revenues decreased ~~from the same period in 2018.~~

~~Other revenues~~ ~~increased $18~~$15 million or ~~14%~~10% for the three months ended March 31, ~~2019~~2020 when compared to the same period in ~~2018~~2019 primarily due to ~~(i) a $13~~an $18 million ~~increase~~decrease in investment revenue primarily driven by ~~unrealized gains~~mark-to-market losses on equity investment securities ~~and an increase in interest income on our cash and cash equivalents and (ii)~~offset by a $5$7 million increase in insurance ~~premiums~~products sold due to ~~the increase in insurance products sold.~~higher loan volume.

Other expenses increased ~~$11~~$44 million or 3%12% for the three months ended March 31, 2020 when compared to the same period in ~~2018 reflecting our strategy~~2019 primarily due to ~~reinvest~~a $23 million increase in insurance policy benefits and claims primarily related to an increase in involuntary unemployment insurance claims reserves, a $10 million increase in our ~~business.~~marketing initiatives, and our continued investment in our business operations.

~~ACQUISITIONS AND SERVICING~~

~~Adjusted pretax income for Acquisition and Servicing (which is reported on an adjusted Segment Accounting Basis) was as follows:~~

Three Months Ended March 31,
(dollars in millions) 2019 2018

Other revenues $ 7
$ 9
Other expenses 7
8
Adjusted pretax income (non-GAAP) $ —
$ 1

Table of Contents

OTHER

“Other” consists of our liquidating SpringCastle Portfolio servicing activity and our non-originating legacy operations, which ~~include other receivables consisting of~~includes primarily our liquidating real estate ~~loan and retail sales finance portfolios.~~loans.

~~Adjusted~~OMH's adjusted pretax loss of the Other components ~~(which is reported~~ on an adjusted Segment Accounting ~~Basis)~~Basis was as follows:


	Three Months Ended March 31,
(dollars in millions)	2020		2019

Interest income	$	2	$	3
Interest expense	1		2

Net interest income after provision for finance receivable losses	1		1
Other revenues	4		9
Other expenses	6		12
Adjusted pretax loss (non-GAAP)	$	(1)	$	(2)

Three Months Ended March 31,
(dollars in millions) 2019 2018

Interest income $ 3
$ 5
Interest expense 2
5
Provision for finance receivable losses —
(2 )
Net interest income after provision for finance receivable losses 1
2
Other revenues 2
(2 )
Other expenses * 5
10
Adjusted pretax loss (non-GAAP) $ (2 ) $ (10 )


*	~~Other expenses~~ for the three months ended March 31, 2018 include $4 million of non-cash incentive compensation expense related to the rights of certain executives to a portion of the cash proceeds from the sale of our common stock by SFH.

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


	March 31,
(dollars in millions)	2020		2019






Net finance receivables held for sale:
Other receivables	$	63	$	79

Table of Contents

March 31,
(dollars in millions) 2019 2018

Net finance receivables
Other receivables * $ —
$ 136

Net finance receivables held for sale:
Other receivables * $ 79
$ 133


*			On September 30, 2018, we transferred our real estate loans previously classified as Other Receivables from held for investment to held for sale. See Notes 5 and 7 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our 2018 Annual Report on Form 10-K for further information.

~~Table of Contents~~

Credit Quality

The results of SFC are consolidated into the results of OMH. Due to the nominal differences between SFC and OMH, content throughout this section relate only to OMH. See Note 2 of the Notes to the Condensed Consolidated Financial Statements included in this report for the reconciliation of results of SFC to OMH.

FINANCE RECEIVABLES

Our net finance receivables, consisting of personal loans, were ~~$16.1~~$18.3 billion at March 31, ~~2019~~2020 and ~~$16.2~~$18.4 billion at December 31, ~~2018.~~2019. Our personal loans are non-revolving, with a fixed-rate, a fixed term of three to six years, and are secured by automobiles, other titled collateral, or are unsecured. We consider the ~~value of the collateral, the concentration of secured loans, and the~~ delinquency status of our finance receivables as our key credit quality indicator. We monitor the ~~primary indicators of credit quality. At March 31, 2019 and December 31, 2018, 49% and 48%, respectively,~~delinquency of our ~~personal loans, on a consolidated basis, were secured by titled collateral.~~

~~Distribution of Finance Receivables by FICO Score~~

~~There are many different categorizations used~~finance receivable portfolio, including the migration between the delinquency buckets and changes in the ~~consumer lending industry~~delinquency trends to ~~describe~~manage our exposure to credit risk in the ~~creditworthiness of a borrower, including prime, near prime, and sub-prime.~~portfolio.

~~We group FICO scores into the following credit strength categories:~~

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

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

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

Our customers are described as prime at one end of the credit spectrum and non-prime at the other. Our customers’ demographics are in many respects near the national median but may vary from national norms in terms of credit and repayment histories. Many of our customers have experienced some level of prior financial difficulty or have limited credit experience and require higher levels of servicing and support from our branch network.

~~Our personal loans are grouped into the following categories based on borrower FICO credit scores as of the most recently refreshed date or as of the origination or purchase date:~~

(dollars in millions) March 31, 2019 December 31, 2018

FICO scores
660 or higher $ 3,785
$ 3,906
620-659 4,220
4,251
619 or below 8,131
8,007
Total $ 16,136
$ 16,164

DELINQUENCY

We monitor delinquency trends to evaluate the risk of future credit losses and employ advanced analytical tools to manage our exposure. Our branch team members work with customers through occasional periods of financial difficulty and offer a variety of borrower assistance programs to help customers continue to make payments. Team members also actively engage in collection activities throughout the early stages of delinquency. We closely track and report the percentage of receivables that are contractually 30-89 days past due as a benchmark of portfolio quality, collections effectiveness, and as a strong indicator of losses in coming quarters.

When finance receivables are contractually 60 days past due, we consider these accounts to be at an increased risk for loss and we transfer collection of these accounts to our centralized operations. Use of our centralized operations teams for managing late stage delinquency allows us to apply more advanced collection technologies and tools, and drives operating efficiencies in servicing. At 90 days contractually past due, we consider our finance receivables to be nonperforming.

Table of Contents

The delinquency information for net finance receivables is as follows:


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

March 31, 2020
Current	$	17,475		$	(12)	$	17,463
30-59 days past due	246			(1)		245
Delinquent (60-89 days past due)	167			—		167
Performing	17,888			(13)		17,875

Nonperforming (90+ days past due)	395			(1)		394
Total net finance receivables	$	18,283		$	(14)	$	18,269

Delinquency ratio
30-89 days past due	2.26		%	(b)		2.25		%
30+ days past due	4.42		%	(b)		4.41		%
60+ days past due	3.07		%	(b)		3.07		%
90+ days past due	2.16		%	(b)		2.16		%

December 31, 2019
Current	$	17,578		$	(28)	$	17,550
30-59 days past due	273			(1)		272
Delinquent (60-89 days past due)	182			(1)		181
Performing	18,033			(30)		18,003

Nonperforming (90+ days past due)	388			(2)		386
Total net finance receivables	$	18,421		$	(32)	$	18,389

Delinquency ratio
30-89 days past due	2.47		%	(b)		2.46		%
30+ days past due	4.58		%	(b)		4.56		%
60+ days past due	3.09		%	(b)		3.08		%
90+ days past due	2.11		%	(b)		2.10		%

(a) As a result of the adoption of ASU 2016-13, we converted all purchased credit impaired finance receivables to purchased credit deteriorated finance receivables in accordance with ASC Topic 326, which resulted in the gross-up of net finance receivables and allowance for finance receivable losses of $15 million on January 1, 2020. See Notes 3, 4, and 5 of the Notes to the Condensed Consolidated Financial Statements for additional information on the adoption of ASU 2016-13 included in this report.

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

GAAP
Basis

March 31, 2019
Current $ 15,520
$ (31 ) $ 15,489
30-59 days past due 180
(1 ) 179
Delinquent (60-89 days past due) 133
—
133
Performing 15,833
(32 ) 15,801

Nonperforming (90+ days past due) 337
(2 ) 335
Total net finance receivables $ 16,170
$ (34 ) $ 16,136

Delinquency ratio
30-89 days past due 1.94 % *
1.93 %
30+ days past due 4.02 % *
4.01 %
60+ days past due 2.91 % *
2.90 %
90+ days past due 2.08 % *
2.08 %

December 31, 2018
Current $ 15,437
$ (26 ) $ 15,411
30-59 days past due 231
(2 ) 229
Delinquent (60-89 days past due) 162
(1 ) 161
Performing 15,830
(29 ) 15,801

Nonperforming (90+ days past due) 365
(2 ) 363
Total net finance receivables $ 16,195
$ (31 ) $ 16,164

Delinquency ratio
30-89 days past due 2.43 % *
2.42 %
30+ days past due 4.68 % *
4.66 %
60+ days past due 3.26 % *
3.25 %
90+ days past due 2.25 % *
2.25 %
(b) Not applicable


*	~~Not applicable.~~

Table of Contents

ALLOWANCE FOR FINANCE RECEIVABLE LOSSES

We estimate and record an allowance for finance receivable losses to cover the estimated lifetime expected credit losses on our finance receivables, effective with the adoption of ASU 2016-13 on January 1, 2020. Prior to the adoption of ASU 2016-13, we estimated and recorded an allowance for finance receivable losses to cover estimated incurred losses on our finance receivables. Our allowance for finance receivable losses may fluctuate based upon our continual review of the growth ~~credit quality,~~ and ~~collateral mix~~contractual delinquency of the finance receivable portfolio and changes in economic conditions.

Our current methodology to estimate expected credit losses utilized macroeconomic forecasts as of March 31, 2020, which incorporated the potential impact that the COVID-19 pandemic could have on the U.S. economy. Our forecast utilized economic projections from a major rating service, and considered a spike in the second quarter unemployment rate followed by a recovery over the second half of the year, partially offset by positive impacts of the CARES Act, the involuntary unemployment insurance coverage of our portfolio, and our borrower assistance efforts. As a result, our allowance for finance receivable losses as a percentage of finance receivables increased from 10.6% to 11.9%. In the near-term, we may experience further changes to the macroeconomic assumptions within our forecast, as well as changes to our loan loss performance outlook, both of which could lead to further changes in our allowance for loan losses, reserve rate and provision expense.

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


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


















Three Months Ended March 31, 2020
Balance at beginning of period	$	849		$	(20)	$	829
Impact of adoption of ASU 2016-13 (a)	1,119			(1)		1,118
Provision for finance receivable losses	530			1		531
Charge-offs	(337)			—		(337)
Recoveries	41			—		41
Balance at end of period	$	2,202		$	(20)	$	2,182

Allowance ratio	12.05		%	(b)		11.95		%

Three Months Ended March 31, 2019
Balance at beginning of period	$	773		$	(42)	$	731
Provision for finance receivable losses	276			10		286
Charge-offs	(316)			5		(311)
Recoveries	32			(5)		27
Balance at end of period	$	765		$	(32)	$	733

Allowance ratio	4.73		%	(b)		4.54		%

(a) As a result of the adoption of ASU 2016-13, we recorded a one-time adjustment to the allowance for finance receivable losses. Additionally, we converted all purchased credit impaired finance receivables to purchased credit deteriorated finance receivables in accordance with ASC Topic 326, which resulted in the gross-up of net finance receivables and allowance for finance receivable losses of $15 million on January 1, 2020. See Notes 3, 4, and 5 of the Notes to the Condensed Consolidated Financial Statements for additional information on the adoption of ASU 2016-13 included in this report.

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

Consolidated
Total

March 31, 2019
Balance at beginning of period $ 773
$ —
$ (42 ) $ 731
Provision for finance receivable losses 276
—
10
286
Charge-offs (316 ) —
5
(311 )
Recoveries 32
—
(5 ) 27
Balance at end of period $ 765
$ —
$ (32 ) $ 733

Allowance ratio 4.73 % (b)
(b)
4.54 %

March 31, 2018
Balance at beginning of period $ 724
$ 35
$ (62 ) $ 697
Provision for finance receivable losses 258
(2 ) (2 ) 254
Charge-offs (297 ) (2 ) 9
(290 )
Recoveries 33
1
(6 ) 28
Balance at end of period $ 718
$ 32
$ (61 ) $ 689

Allowance ratio 4.83 % 23.19 % (b)
4.60 %
(b) Not applicable.


~~(a)~~	Due to the transfer of our real estate loans from held for investment to held for sale on September 30, 2018, there are no longer finance receivable losses associated in Other. See Note 5 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our 2018 Annual Report on Form 10-K for further information.


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

The current delinquency status of our finance receivable portfolio, inclusive of recent borrower performance, ~~the underlying collateral,~~ volume of our TDR activity, ~~and the~~ level and recoverability of collateral securing our finance receivable portfolio, and the reasonable and supportable forecast of economic conditions (after adoption of ASU 2016-13) are the primary drivers that can cause fluctuations in our allowance for finance receivable losses from period to period. We monitor the allowance ratio to ensure we have a sufficient level of allowance for finance receivable losses ~~to cover~~based on the estimated ~~incurred~~lifetime expected credit losses in our finance receivable portfolio. The ~~level of~~ allowance for finance receivable losses as a percentage of net finance receivables ~~has decreased~~increased from prior periods due to the ~~continued change in portfolio mix to more secured personal loans and improvement in the effectiveness~~adoption of ~~our collections.~~ASU 2016-13.

Table of Contents

See Note 45 of the Notes to the Condensed Consolidated Financial Statements included in this report for more information about the changes in the allowance for finance receivable losses.

TDR FINANCE RECEIVABLES

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

~~Table of Contents~~

Information regarding TDR net finance receivables is as follows:


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

March 31, 2020
TDR net finance receivables	$	744	$	(56)	$	688
Allowance for TDR finance receivable losses	326		(24)		302

December 31, 2019
TDR net finance receivables	$	721	$	(63)	$	658
Allowance for TDR finance receivable losses	292		(20)		272

DISTRIBUTION OF FINANCE RECEIVABLES BY FICO SCORE

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

•Prime: FICO score of 660 or higher

•Near prime: FICO score of 620-659

•Sub-prime: FICO score of 619 or below

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

The following table reflects our personal loans grouped into the categories described above based on borrower FICO credit scores as of the most recently refreshed date or as of the loan origination or purchase date:


(dollars in millions)	March 31, 2020		December 31, 2019

FICO scores
660 or higher	$	3,820	$	3,951
620-659	4,568		4,683
619 or below	9,881		9,755
Total	$	18,269	$	18,389

Table of Contents

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

March 31, 2019
TDR net finance receivables $ 591
$ (89 ) $ 502
Allowance for TDR finance receivable losses 226
(30 ) 196

December 31, 2018
TDR net finance receivables $ 555
$ (102 ) $ 453
Allowance for TDR finance receivable losses 210
(40 ) 170



Liquidity and Capital Resources

SOURCES AND USES OF FUNDS

We finance the majority of our operating liquidity and capital needs through a combination of cash flows from operations, ~~securitization~~secured debt, unsecured debt, borrowings from revolving conduit facilities, ~~unsecured debt~~ and ~~equity, and~~equity. We may also utilize other ~~corporate debt facilities~~sources in the future. As a holding company, all of the funds generated from our operations are earned by our operating subsidiaries. Our operating subsidiaries’ primary cash needs relate to funding our lending activities, our debt service obligations, our operating expenses, payment of insurance claims, and ~~to a lesser extent,~~ expenditures relating to upgrading and monitoring our technology platform, risk systems, and branch locations.

We have previously purchased portions of our unsecured indebtedness, and we may elect to purchase additional portions of our unsecured indebtedness or securitized borrowings in the future. Future purchases may be made through the open market, privately negotiated transactions with third parties, or pursuant to one or more tender or exchange offers, all of which are subject to terms, prices, and consideration we may determine inat our discretion.

During the three months ended March 31, ~~2019, we~~2020, OMH generated net income of ~~$152~~$32 million. ~~Our~~OMH net cash inflow from operating and investing activities totaled ~~$243~~$369 million ~~in 2019.~~for the three months ended March 31, 2020. At March 31, ~~2019,~~2020, our scheduled principal and interest payments for ~~2019~~2020 on our existing debt (excluding ~~securitizations)~~securitizations and borrowings under our revolving conduit facilities) totaled ~~$695 million.~~$1.5 billion. As of March 31, ~~2019,~~2020, we had ~~$6.9~~$6.1 billion UPB of unencumbered personal loans and ~~$136~~$116 million UPB of unencumbered real estate loans. These real estate loans are ~~included in~~classified as held for ~~sale.~~sale and reported in “Other assets.”

Based on our estimates and taking into account the risks and uncertainties of our plans, we believe that we will have adequate liquidity to finance and operate our businesses and repay our obligations as they become due for at least the next 12 months.

~~SFC’s 6.125% Senior Notes Due 2024 Offering~~

On February 22, 2019, SFC issued $1.0 billion aggregate principal amount of 6.125% Senior Notes due 2024 (the “6.125% SFC Notes due 2024”) under the SFC Senior Notes Indentures, as supplemented by the SFC Seventh Supplemental Indenture, pursuant to which OMH provided a guarantee on an unsecured basis.

~~Redemption of 5.25% Senior Notes due 2019~~

As a result of the offering described above, SFC issued a notice of redemption to redeem all of the outstanding principal amount of its 5.25% Senior Notes due 2019. On March 25, 2019, SFC paid an aggregate amount of $706 million, inclusive of accrued interest and premiums, to complete the redemption. We recognized approximately $21 million of net loss on the repurchases and repayments of debt for the three months ended March 31, 2019.

~~Table of Contents~~

~~Redemption of 6.00% Senior Notes Due 2020~~

On March 15, 2019, SFC issued a Notice of Full Redemption of its 6.00% Senior Notes due 2020. On April 15, 2019, SFC paid an aggregate amount of $317 million, inclusive of accrued interest and premiums, to complete the redemption. In connection with the redemption, we will recognize approximately $11 million of net loss on repurchases and repayments of debt for the three and six months ended June 30, 2019.

Securitizations and Borrowings from Revolving Conduit Facilities

During the three months ended March 31, ~~2019,~~2020, we ~~completed two personal loan~~did not terminate, cancel or enter into any new securitizations ~~(OMFIT 2019-1 and ODART 2019-1 see “Securitized Borrowings” below).~~or conduit facilities. At March 31, ~~2019,~~2020, we had ~~approximately $9.1~~$12.0 billion in UPB of finance receivables pledged as collateral for our securitization ~~transactions.~~transactions and conduit draws.

~~During the three months ended~~At March 31, ~~2019, we entered into one new revolving~~2020, an aggregate of $3.5 billion was drawn under our conduit ~~facility.~~facilities and the remaining borrowing capacity is $3.6 billion.

See Notes 78 and 89 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information on our long-term debt ~~loan securitization transactions~~ and conduit facilities.

Table of Contents

Shares Repurchased and Retired

During the three months ended March 31, 2020, OMH repurchased and retired 2,031,698 shares of its common stock at an average price per share of $22.30, for an aggregate total of approximately $45 million, including commissions and fees. To provide funding for the OMH stock repurchase and retirement program, the SFC Board of Directors authorized multiple dividend payments in the aggregate amount of $45 million. For additional information regarding the shares repurchased see Note 11 of the Notes to the Condensed Consolidated Financial Statements and Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Part II included in this report.

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

As of March 31, 2020, dividend declarations for the current year by OMH's board of directors were as follows:

Declaration Date

Record Date

Payment Date

Dividend Per Share

Amount Paid

(in millions)

February 10, 2020

February 26, 2020

March 13, 2020

2.83

386

*On February ~~11, 2019, we announced an initial~~10, 2020 dividend declaration consisted of a regular quarterly dividend of ~~$0.25~~$0.33 per share and a special dividend of $2.50 per share.

To provide funding for the dividends, SFC paid ~~$34~~dividends to OMH of $386 million on March ~~15, 2019 to record holders of our common stock as of the close of business on February 26, 2019.~~ 12, 2020.

On April ~~29, 2019, the Company announced~~27, 2020, OMH declared a regular quarterly dividend of ~~$0.25~~$0.33 per share payable on June ~~14, 2019~~12, 2020 to record holders of ~~our~~OMH's common stock as of the close of business on May 29, ~~2019.~~2020. To provide funding for the OMH dividend, the SFC Board of Directors authorized a dividend in the amount of up to $45 million payable on or after June 9, 2020.

While ~~we intend~~OMH intends to pay regular quarterly dividends for the foreseeable future, and has announced its intention to pay semi-annual special dividends, all subsequent dividends will be reviewed quarterly and declared at the discretion of ~~our~~the board of directors and will depend on many factors, including our financial condition, earnings, cash flows, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends, and other considerations that ~~our~~the board of directors deems relevant. ~~Our~~OMH's dividend payments may change from time to time, and wethe board of directors may not continue to declare dividends in the future.

LIQUIDITY

OMH's Operating Activities

Net cash provided by operations of $565 million for the three months ended March 31, 2020 reflected net income of $32 million, the impact of non-cash items, and an unfavorable change in working capital of $45 million. Net cash provided by operations of $548 million for the three months ended March 31, 2019 reflected net income of $152 million, ~~and~~ the impact of non-cash ~~items.~~ items, and a favorable change in working capital of $17 million.

OMH's Investing Activities

Net cash ~~provided by operations~~used for investing activities of ~~$555~~$196 million for the three months ended March 31, ~~2018 reflected net income of $124 million~~2020 and ~~the impact of non-cash items.~~

~~Investing Activities~~

~~Net cash used for investing activities of~~ $305 million for the three months ended March 31, 2019 ~~and $381 million for the three months ended March 31, 2018~~ were primarily due to net principal originations of finance receivables held for investment and held for sale and ~~net~~ purchases of available-for-sale securities, partially offset by calls, sales, and maturities of available-for-sale securities.

OMH's Financing Activities

Net cash provided by financing activities of $2.8 billion for the three months ended March 31, 2020 was primarily due to net issuances of long-term debt offset by the quarterly and special cash dividends paid, and the cash paid on the common stock repurchased in the quarter. Net cash provided by financing activities of $863 million for the three months ended March 31, 2019 ~~and $827 million for the three months ended March 31, 2018~~ were primarily due to net ~~issuance~~issuances of long-term ~~debt.~~debt offset by the quarterly cash dividends paid.

Table of Contents

OMH's Cash and Investments

At March 31, ~~2019,~~2020, we had ~~$1.7~~$4.2 billion of cash and cash equivalents, which included ~~$312~~$181 million of cash and cash equivalents held at our regulated insurance subsidiaries or for other operating activities that is unavailable for general corporate purposes.

At March 31, ~~2019,~~2020, we had ~~$1.7~~$1.8 billion of investment securities, which are all held as part of our insurance operations and are unavailable for general corporate purposes.

~~Table of Contents~~

Liquidity Risks and Strategies

SFC’s credit ratings are non-investment grade, which ~~has~~may have a significant impact on our cost and access to capital. This, in turn, can negatively affect our ability to manage our liquidity and our ability or cost to refinance our indebtedness.

There are numerous risks to our financial results, liquidity, capital raising, and debt refinancing plans, some of which may not be quantified in our current liquidity forecasts. These risks are further described in our “Liquidity and Capital Resources” of ~~the~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II - Item 7 included in our ~~2018~~2019 Annual Report on Form 10-K.

Principal factors that could decrease our liquidity are customer delinquencies and defaults, a decline in customer prepayments, and a prolonged inability to adequately access capital market funding. We intend to support our liquidity position by utilizing strategies that are further described in our “Liquidity and Capital Resources” of ~~the~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II - Item 7 included in our ~~2018~~2019 Annual Report on Form 10-K.

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

OUR INSURANCE SUBSIDIARIES

Our insurance subsidiaries are subject to state regulations that limit their ability to pay dividends. AHL and Triton did not pay any dividends during the three months ended March 31, 2020 and 2019. On March 7, 2019, we entered into a share purchase agreement to sell all of the issued and outstanding shares of our former insurance subsidiary, Merit. The transaction closed on December 31, 2019. Merit also did not pay any dividends during the three months ended March 31, 2019. See Note 1412 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our ~~2018~~2019 Annual Report on Form 10-K for more information on ~~these restrictions.~~state regulation restrictions and the Merit ~~AHL and Triton did not pay any dividends during the three months ended March 31, 2019 and 2018.~~sale.

OUR DEBT AGREEMENTS

The debt agreements to which SFC and its subsidiaries are a party include customary terms and conditions, including covenants and representations and warranties. See Note 1210 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our ~~2018~~2019 Annual Report on Form 10-K for more information on the restrictive covenants under SFC’s debt agreements, as well as the guarantees of SFC’s long-term debt.

Table of Contents

Securitized Borrowings

We execute private securitizations under Rule 144A of the Securities Act of 1933. As of March 31, ~~2019,~~2020, our structured financings consisted of the following:


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

SLFT 2015-B	$	314	$	336	$	314	$	320	3.78	%	5 years
SLFT 2016-A	532		559		120		167		3.72	%	2 years
SLFT 2017-A	652		685		619		685		2.98	%	3 years
OMFIT 2015-3	293		329		293		325		4.21	%	5 years
OMFIT 2016-1	500		570		110		192		5.13	%	3 years
OMFIT 2016-3	350		397		317		391		4.33	%	5 years
OMFIT 2017-1	947		988		630		663		2.70	%	2 years
OMFIT 2018-1	632		650		600		651		3.60	%	3 years
OMFIT 2018-2	368		381		350		381		3.87	%	5 years
OMFIT 2019-1	632		654		600		654		3.79	%	2 years
OMFIT 2019-2	900		947		900		947		3.30	%	7 years
OMFIT 2019-A	789		892		750		892		3.78	%	7 years
ODART 2017-2	605		624		193		227		3.22	%	1 year
ODART 2018-1	947		964		900		964		3.56	%	2 years
ODART 2019-1	737		750		700		750		3.79	%	5 years
Total securitizations	$	9,198	$	9,726	$	7,396	$	8,209

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

(dollars in millions) Issue Amount (a) Initial Collateral Balance Current
Note Amounts
Outstanding (a)
Current Collateral Balance
(b)

Current
Weighted Average
Interest Rate

Original
Revolving
Period

SLFT 2015-A $ 1,163
$ 1,250
$ 348
$ 400
4.19 % 3 years
SLFT 2015-B 314
336
314
336
3.78 % 5 years
SLFT 2016-A 532
559
396
425
3.15 % 2 years
SLFT 2017-A 652
685
619
685
2.98 % 3 years
OMFIT 2015-1 1,229
1,397
387
510
4.94 % 3 years
OMFIT 2015-2 1,250
1,346
207
280
5.09 % 2 years
OMFIT 2015-3 293
329
293
325
4.21 % 5 years
OMFIT 2016-1 500
570
390
455
4.07 % 3 years
OMFIT 2016-2 890
1,007
256
408
5.39 % 2 years
OMFIT 2016-3 350
397
317
391
4.33 % 5 years
OMFIT 2017-1 947
988
900
988
2.79 % 2 years
OMFIT 2018-1 632
650
600
651
3.60 % 3 years
OMFIT 2018-2 368
381
350
381
3.87 % 5 years
OMFIT 2019-1 632
654
600
654
3.79 % 2 years
ODART 2017-1 300
300
94
118
3.43 % 1 year
ODART 2017-2 605
624
484
512
2.69 % 1 year
ODART 2018-1 947
964
900
964
3.56 % 2 years
ODART 2019-1 737
750
700
750
3.79 % 5 years
Total securitizations $ 12,341
$ 13,187
$ 8,155
$ 9,233


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


~~(b)~~	~~Inclusive of in-process replenishments of collateral for securitized borrowings, in a revolving status.~~

(b) Inclusive of in-process replenishments of collateral for securitized borrowings in a revolving status as of March 31, 2020.

Table of Contents

Revolving Conduit Facilities

In addition to the structured financings, we ~~had~~have access to 1214 revolving conduit facilities with a total borrowing capacity of ~~$6.2~~approximately $7.1 billion as of March 31, ~~2019:~~2020:


(dollars in millions)	Advance Maximum Balance		Amount Drawn		Revolving Period End	Due and Payable

Rocky River Funding, LLC	$	400	$	400	April 2022	May 2023
OneMain Financial Funding IX, LLC	650		—		June 2022	July 2023
Mystic River Funding, LLC	850		500		September 2022	October 2025
Fourth Avenue Auto Funding, LLC	200		200		June 2022	July 2023
OneMain Financial Funding VIII, LLC	650		200		August 2021	September 2023
Thayer Brook Funding, LLC	250		200		July 2021	August 2022
Hubbard River Funding, LLC	250		250		September 2021	October 2023
Seine River Funding, LLC	650		250		October 2021	November 2024
New River Funding, LLC	250		—		March 2022	April 2027
Hudson River Funding, LLC	500		250		June 2022	July 2025
Columbia River Funding, LLC	500		250		September 2022	October 2025
St. Lawrence River Funding, LLC	250		250		October 2022	November 2024
OneMain Financial Funding VII, LLC	850		500		January 2023	February 2025
OneMain Financial Auto Funding I, LLC	850		250		February 2023	March 2030
Total	$	7,100	$	3,500

(dollar in millions) Advance Maximum Balance Amount
Drawn Revolving
Period End Due and Payable

Rocky River Funding, LLC $ 400
$ —
June 2020 July 2021
Thur River Funding, LLC 350
—
June 2020 February 2027
OneMain Financial Funding IX, LLC 600
—
June 2020 July 2021
Mystic River Funding, LLC 850
—
September 2020 October 2023
Fourth Avenue Auto Funding, LLC 250
—
September 2020 October 2021
OneMain Financial Funding VIII, LLC 650
—
August 2021 September 2023
OneMain Financial Auto Funding I, LLC 850
—
June 2021 July 2028
OneMain Financial Funding VII, LLC 850
—
June 2021 July 2023
Thayer Brook Funding, LLC 250
—
July 2021 August 2022
Hubbard River Funding, LLC 250
—
September 2021 October 2023
Seine River Funding, LLC 650
—
October 2021 November 2024
New River Funding LLC 250
—
March 2022 April 2027
Total $ 6,200
$ —

See “Liquidity and Capital Resources - Sources and Uses of Funds - Securitizations and Borrowings from Revolving Conduit Facilities” above for information on the ~~securitization and conduit transactions~~transaction completed subsequent to March 31, ~~2019.~~2020.

Table of Contents



Off-Balance Sheet Arrangements

We have no other material off-balance sheet arrangements as defined by SEC ~~rules. We~~rules, and we had no material off-balance sheet exposure to losses associated with unconsolidated VIEs at March 31, ~~2019~~2020 or December 31, 2018, other than certain representations and warranties associated with the sales of the mortgage-backed retained certificates during 2014. As of March 31, 2019, we had no repurchase activity related to these sales.2019.



Critical Accounting Policies and Estimates

We describe our significant accounting policies used in the preparation of our consolidated financial statements in Note 3 of the Notes to the Consolidated Financial Statements in Part II - Item 8 included in our 2018 Annual Report on Form 10-K. We consider the following policies to be our most critical accounting policies because they involve critical accounting estimates and a significant degree of management judgment:

ALLOWANCE FOR FINANCE RECEIVABLE LOSSES

We estimate the allowance for finance receivable ~~losses;~~losses primarily on historical loss experience using a cumulative loss model applied to our finance receivable portfolios. Our gross credit loss expectation is offset by the estimate of future recoveries using historical recovery curves. Our finance receivables are primarily segmented in the loss model by contractual delinquency status. Other attributes in the model include collateral mix and recent credit score. To estimate the gross credit losses, the model utilizes a roll rate matrix to project the first 12 months of losses and historical cohort performance to project the expected losses over the remaining term. Our methodology relies solely on historical loss experience to forecast the corresponding future outcomes. These patterns are then applied to the current portfolio to obtain an estimate of future losses. We also consider key economic trends including unemployment rates and bankruptcy filings. Forecasted macroeconomic conditions extend to our reasonable and supportable forecast period and revert to a historical average. No new volume is assumed. Renewals are a significant piece of our new volume and are considered a terminal event of the previous loan. We have elected not to measure an allowance on accrued finance charges as it is our policy to reverse finance charge amounts previously accrued after four contractual payments become past due.

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

TDR FINANCE RECEIVABLES

When we modify a loan’s contractual terms for economic or other reasons related to the borrower’s financial difficulties and grant a concession that we would not otherwise consider, we classify that loan as a TDR finance ~~receivables;~~receivable. Loan modifications primarily involve a combination of the following to reduce the borrower’s monthly payment: reduce interest rate, extend the term, defer or forgive past due interest or forgive principal. Account modifications that are deemed to be a TDR finance receivable are measured for impairment in accordance with the authoritative guidance for the accounting for impaired loans.

The allowance for finance receivable losses related to our TDR finance receivables represents loan-specific reserves based on an analysis of the present value of expected future cash flows. We establish our allowance for finance receivable losses related to our TDR finance receivables by calculating the present value (discounted at the loan’s effective interest rate prior to modification) of all expected cash flows less the recorded investment in the aggregated pool. We use certain assumptions to estimate the expected cash flows from our TDR finance receivables. The primary assumptions for our model are prepayment speeds, default rates, and loss severity rates.

FAIR VALUE MEASUREMENTS

Management is responsible for the determination of the fair value ~~measurements;~~of our financial assets and financial liabilities and the supporting methodologies and assumptions. We employ widely used financial techniques or utilize third-party valuation service providers to gather, analyze, and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual instruments or pools of finance receivables. When our valuation service providers are unable to obtain sufficient market observable information upon which to estimate the fair value for a particular security, we determine fair value either by requesting brokers who are knowledgeable about these securities to provide a quote, which is generally non-binding, or by employing widely used financial techniques.

Table of Contents

GOODWILL AND OTHER INTANGIBLE ASSETS

We test goodwill for potential impairment annually as of October 1 of each year and ~~other~~whenever events occur or circumstances change that would more likely than not reduce the fair value of our reporting unit below its carrying amount. If the qualitative assessment indicates that it is more likely than not that the reporting unit’s fair value is less than its carrying amount, we proceed with the quantitative impairment test. When necessary, the fair value of the reporting unit is calculated utilizing the income approach, which uses prospective financial information of the reporting unit discounted at a rate that we estimate a market participant would use.

For indefinite-lived intangible ~~assets.~~

~~There~~assets, we review for impairment at least annually and whenever events occur or circumstances change that would indicate the assets are more likely than not to be impaired. We first complete an annual qualitative assessment to determine whether it is necessary to perform a quantitative impairment test. If the qualitative assessment indicates that the assets are more likely than not to have been ~~no material~~impaired, we proceed with the fair value calculation of the assets. The fair value is determined in accordance with our fair value measurement policy.

For those net intangible assets with a finite useful life, we review such intangibles for impairment at least annually and whenever events or changes ~~to our critical accounting policies or to our methodologies for deriving critical accounting estimates during~~in circumstances indicate that the ~~three months ended March 31, 2019.~~carrying amounts may not be recoverable.



Recent Accounting Pronouncements

See Note 23 of the Notes to the ~~Condensed~~ Consolidated Financial Statements included in this report for discussion of recently issued accounting pronouncements.

~~Table of Contents~~



Seasonality

Our personal loan volume is generally highest during the second and fourth quarters of the year, primarily due to marketing efforts and seasonality of demand. Demand for our personal loans is usually lower in January and February after the holiday season and as a result of tax refunds. Delinquencies on our personal loans are generally ~~lowest~~lower in the first ~~quarter~~and second quarters and tend to rise throughout the remainder of the year. These seasonal trends contribute to fluctuations in our operating results and cash needs throughout the year. Our normal seasonality trends may be affected by COVID-19.



Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes to our market risk previously disclosed in Part II - Item 7A included in our ~~2018~~2019 Annual Report on Form 10-K.

Table of Contents



Item 4. Controls and Procedures.

CONTROLS AND PROCEDURES OF ONEMAIN HOLDINGS, INC.

Evaluation of Disclosure Controls and Procedures

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

As of March 31, ~~2019, we~~2020, OMH carried out an evaluation of the effectiveness of ~~our~~its disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This evaluation was conducted under the supervision of, and with the participation of ~~our~~OMH’s management, including ~~our~~the Chief Executive Officer and ~~our~~the Chief Financial Officer. Based on ~~our~~the evaluation, ~~our~~the Chief Executive Officer and ~~our~~the Chief Financial Officer concluded that ~~our~~OMH's disclosure controls and procedures were effective as of March 31, ~~2019~~2020 to provide the reasonable assurance described above.

Changes in Internal Control over Financial Reporting

There were no changes in ~~our~~OMH's internal control over financial reporting during the first quarter of ~~2019~~2020 that have materially affected, or are reasonably likely to materially affect, ~~our~~OMH's internal control over financial reporting.

CONTROLS AND PROCEDURES OF SPRINGLEAF FINANCE CORPORATION

Evaluation of Disclosure Controls and Procedures

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

As of March 31, 2020, SFC carried out an evaluation of the effectiveness of its disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This evaluation was conducted under the supervision of, and with the participation of SFC’s management, including the Chief Executive Officer and the Chief Financial Officer. Based on the evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that SFC's disclosure controls and procedures were effective as of March 31, 2020 to provide the reasonable assurance described above.

Changes in Internal Control over Financial Reporting

There were no changes in SFC's internal control over financial reporting during the first quarter of 2020 that have materially affected, or are reasonably likely to materially affect, SFC's internal control over financial reporting.

Table of Contents

PART II — OTHER INFORMATION



Item 1. Legal Proceedings.

See Note 1314 of the Notes to the Condensed Consolidated Financial Statements included in this report.



Item 1A. Risk Factors.

In light of recent developments related to COVID-19 and the adoption of ASU 2016-13, we are supplementing our risk factors. The following supplemental risk factors should be read in conjunction with the risk factors contained in Item 1A and the information under “Forward-Looking Statements” in our 2019 Annual Report, as filed with the SEC on February 14, 2020.

RISKS RELATED TO OUR BUSINESS

The COVID-19 pandemic is adversely affecting consumer finance businesses including OneMain.

The COVID-19 pandemic has resulted in widespread volatility and deterioration in economic conditions across the United States. Governmental authorities have taken a number of steps to combat or slow the spread of the COVID-19 pandemic, including shutdowns of non-essential businesses, stay at home orders, social distancing measures, and other actions which have disrupted economic activity.These disruptions have resulted in a significant reduction in the number of customers at our branch locations and lower demand for our products, which, combined with our recent credit tightening, has decreased our loan originations. The COVID-19 pandemic has also resulted in higher unemployment in the United States, which we expect will result in increased delinquencies and credit losses on loans outstanding. In addition, if significant portions of our workforce are unable to work effectively as a result of the COVID-19 pandemic, there may be servicing and other disruptions to our business.

Federal, state and local governments have mandated or encouraged financial services companies to make accommodations to borrowers and other customers affected by the COVID-19 pandemic. Legal and regulatory responses to concerns about the COVID-19 pandemic could result in additional regulation or restrictions affecting the conduct of our business in the future. In April 2020, we announced programs to support customers and communities suffering from the effects of the COVID-19 pandemic, including offering reduced and deferred payment options for customers negatively impacted by COVID-19, waiving late fees for payments due March 15 through April 30, 2020, and suspending credit bureau reporting for newly delinquent accounts in March and April 2020. All of the foregoing may adversely affect our income and other results of operations in the near term or make collection of our personal loans more difficult or reduce income received from such loans or our ability to obtain financing with respect to such loans.

The COVID-19 pandemic has also caused significant recent volatility in financial markets and adverse economic conditions and may have significant long-term adverse effects on the U.S. economy, including increased instability in capital markets, declines in business and consumer confidence, reductions in economic activity, increased unemployment and recession, any of which may adversely affect our ability to access the capital markets and could have an adverse impact on our liquidity, our income and our ability to support our operations and other negative impacts on our financial position, results of operations, and prospects. Further, sustained adverse effects from the COVID-19 pandemic may also prevent us from satisfying our regulatory and other supervisory requirements or result in downgrades in our credit ratings.

We are unable to estimate the extent of the adverse impact of the COVID-19 pandemic on our business and operations at this time.

Table of Contents

If our estimates of allowance for finance receivable losses are not adequate to absorb actual losses, our provision for finance receivable losses would increase, which would adversely affect our results of operations.

We maintain an allowance for finance receivable losses. To estimate the appropriate level of allowance for finance receivable losses, we consider known and relevant internal and external factors that affect finance receivable collectability, including the total amount of finance receivables outstanding, historical finance receivable charge-offs, our current collection patterns, and current and forecasted economic trends. Our methodology for establishing our allowance for finance receivable losses is based on the guidance from ASC 326, Financial Instruments – Credit Losses, which requires us to measure expected credit losses for financial assets at each reporting date. The allowance is primarily based on historical experience, current conditions, and our reasonable and supportable forecast of economic conditions. If customer behavior changes as a result of economic conditions and if we are unable to accurately predict how the unemployment rate, personal bankruptcy filings, and general economic conditions may affect our allowance for finance receivable losses, our allowance for finance receivable losses may be inadequate. Our allowance for finance receivable losses is an estimate, and if actual finance receivable losses are materially greater than our allowance for finance receivable losses, our results of operations could be adversely affected. Neither state regulators nor federal regulators regulate our allowance for finance receivable losses.

RISKS RELATED TO FINANCIAL REPORTING

Our valuations may include methodologies, models, estimations and assumptions which are subject to differing interpretations and could result in changes to financial assets and liabilities that may materially adversely affect our results of operations and financial condition.

The allowance for finance receivable losses is a critical accounting estimate which requires us to use significant estimates and assumptions to determine the appropriate level of allowance. We estimate the allowance for finance receivable losses primarily on historical loss experience using a cumulative loss model applied to our finance receivable portfolio. Our gross loss expectation is offset by the estimate of future recoveries using historical recovery curves on the active portfolio along with accounts that were previously charged-off. We adjust the amounts determined by the model for the impact of management’s economic forecast, such as the levels of unemployment and personal bankruptcy filings, and the effects of model imprecision which include any changes to underwriting criteria and portfolio seasoning. If we are unable to predict certain of these assumptions accurately, our allowance for finance receivable losses may be inadequate. If actual finance receivable losses are materially greater than our allowance for finance receivable losses, our results of operations, financial condition, and liquidity could be adversely affected.

We use estimates, assumptions, and judgments when certain financial assets and liabilities are measured and reported at fair value. Fair values and the information used to record valuation adjustments for certain assets and liabilities are based on quoted market prices and/or other observable inputs provided by independent third-party sources, when available.During periods of market disruption, including periods of significantly rising or high interest rates, rapidly widening credit spreads or illiquidity, it may be difficult to value certain assets if trading becomes less frequent or market data becomes less observable. In such cases, certain asset valuations may require significant judgment, and may include inputs and assumptions that require greater estimation, including credit quality, liquidity, interest rates and other relevant inputs. Changes in underlying factors, assumptions, or estimates in any of these areas could have a material adverse effect on our results of operations, financial condition, and liquidity.

There have been no other material changes to our risk factors included in Part I, Item 1A of our ~~2018~~2019 Annual Report on Form 10-K.

Table of Contents



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

~~PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS~~There were no unregistered sales of our common stock during the period covered by this Quarterly Report on Form 10-Q.

~~Share repurchase activity for~~Shares Repurchased and Retired

During the three months ended March 31, ~~2019 was~~2020, the OMH Board of Directors approved a stock repurchase program, which allowed us to repurchase up to $200 million of OMH’s outstanding common stock, with no stated expiration. On March 20, 2020, OMH temporarily suspended its stock repurchase program. OMH retains the right to reinstate the stock repurchase program as ~~follows:~~circumstances change. For additional information regarding shares repurchased during the period, see Notes 11 of the Notes to the Condensed Consolidated Financial Statements included in this report for further information.

The following table presents information regarding repurchases of our common stock during the quarter ended March 31, 2020:


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	—	$	—	$	—
February 1 - February 29	—	—		—
March 1 - March 31	2,031,698	22.30		$	154,687,295
Total	2,031,698	$	22.30

Period
Total Number
of Shares Purchased *

Average Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs

January 1, 2019 - January 31, 2019 —
$ —
—
—
February 1, 2019 - February 28, 2019 8,246
34.60
—
—
March 1, 2019 - March 31, 2019 —
—
—
—
Total 8,246


*			Represents the surrender of shares to OMH in an amount equal to the amount of tax withheld in satisfaction of the withholding obligations of certain employees in connection with the vesting of restricted shares. As of the date of this report, OMH has no publicly announced plans or programs to repurchase OMH common stock.

Item 3. Defaults Upon Senior Securities.

None.



Item 4. Mine Safety Disclosures.

~~Not applicable.~~None.



Item 5. Other Information.

On May 1, 2019, Robert Hurzeler, the Company’s Executive Vice President and Chief Operating Officer, indicated to the Company that he intends to resign. His last day of employment will be May 31, 2019.None.

Table of Contents



Item 6. ~~Exhibits.~~Exhibit Index.


Exhibit Number		Description


~~Exhibit Number~~		~~Description~~








~~4.1~~10.1		~~Seventh Supplemental Indenture, dated as of February 22, 2019~~Letter Agreement by and ~~among Springleaf Finance~~between OneMain General Services Corporation and Rajive Chadha, dated June 4, 2019*

10.2		Consulting Agreement by and between OneMain Holdings, Inc. ~~as Guarantor,~~, OneMain General Services Corporation, and Wilmington Trust, National Association as Trustee (including the form of 6.125% Senior Notes due 2024 included therein as Exhibit A). Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed onJohn C. Anderson, dated February ~~22, 2019.~~13, 2020*

10.1*31.1		~~Form of Restricted Stock Unit Award Agreement under the OneMain Holdings, Inc. Amended and Restated 2013 Omnibus Incentive Plan filed herewith as Exhibit 10.1.~~

10.2*	~~Form of Restricted Stock Unit Award Agreement under the OneMain Holdings, Inc. Amended and Restated 2013 Omnibus Incentive Plan (Non-Employee Directors) filed herewith as Exhibit 10.2.~~

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

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

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

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

32.1		Section 1350 Certifications of OneMain Holdings, Inc.

~~101~~ 32.2		Section 1350 Certifications of Springleaf Finance Corporation

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

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

* Management contract or compensatory plan or arrangement.

Table of Contents



OMH Signature

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

ONEMAIN HOLDINGS, INC.

(Registrant)

Date:

~~May 3, 2019~~April 29, 2020

By:

/s/ Micah R. Conrad

Micah R. Conrad

Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)

Table of Contents


SFC Signature

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

SPRINGLEAF FINANCE CORPORATION

(Registrant)

Date:

April 29, 2020

By:

/s/ Micah R. Conrad

Micah R. Conrad

Executive Vice President and Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer)


~~Securities registered pursuant to Section 12(b) of the Act:~~
~~Title of each class~~ GLOSSARY			~~Trading Symbol~~	~~Name of each exchange on which registered~~
~~Common Stock, par value $0.01 per share~~	~~OMF~~	~~New York Stock Exchange LLC~~


Term or Abbreviation			Definition

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

~~2018~~2019 Annual Report on Form 10-K		Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018,~~2019, filed with the SEC on February ~~15, 2019~~14, 2020
30-89 Delinquency ratio			net finance receivables 30-89 days past due as a percentage of net finance receivables
~~5.25% SFC Notes~~			~~$700 million of 5.25% Senior Notes due 2019 issued by SFC on December 3, 2014 and guaranteed by OMH~~
~~6.125% SFC Notes due 2024~~			~~$1.0 billion of 6.125% Senior Notes due 2024 issued by SFC on February 22, 2019 and guaranteed by OMH~~
~~ABS~~			~~asset-backed securities~~










ABS			asset-backed securities
Accretable yield			the excess of the cash flows expected to be collected on the purchased credit impaired finance receivables over the discounted cash flows
Adjusted pretax income (loss)			a non-GAAP financial measure used by management as a key performance measure of our ~~segments~~segment
~~AHL~~AETR			annual effective tax rate
AHL			American Health and Life Insurance Company, an insurance subsidiary of ~~OMFH~~OneMain Financial Holdings, LLC
~~AIG~~			~~AIG Capital Corporation, a subsidiary of American International Group, Inc.~~
~~AIG Share Sale Transaction~~			~~sale by SFH of 4,179,678 shares of OMH common stock pursuant to an Underwriting Agreement entered into February 21, 2018 among OMH, SFH and Morgan Stanley & Co. LLC~~
~~AOCI~~			~~Accumulated other comprehensive income (loss)~~
~~Apollo~~
Apollo			Apollo Global Management, LLC and its consolidated subsidiaries
Apollo-Värde Group			an investor group led by funds managed by Apollo and Värde
Apollo-Värde Transaction			the purchase by the Apollo-Värde Group of 54,937,500 shares of OMH common stock from SFH pursuant to the Share Purchase Agreement for an aggregate purchase price of approximately $1.4 billion in cash on June 25, 2018
ASC			Accounting Standards Codification
ASU			Accounting Standards Update
Average daily debt balance			average of debt for each day in the period
Average net receivables			average of monthly average net finance receivables (net finance receivables at the beginning and end of each month divided by two) in the period
~~Blackstone~~			~~collectively, BTO Willow Holdings II, L.P. and Blackstone Family Tactical Opportunities Investment Partnership—NQ—ESC L.P.~~
~~BPS~~CARES Act			~~basis points~~Coronavirus Aid, Relief, and Economic Security Act signed into law by President Trump on March 27, 2020
~~CDO~~C&I			Consumer and Insurance
CDO			collateralized debt obligations
~~Citigroup~~			~~CitiFinancial Credit Company~~
~~CMBS~~



CMBS			commercial mortgage-backed securities
~~Contribution~~
Contribution			On June 22, 2018, SFC entered into a Contribution Agreement with SFI, a wholly-owned subsidiary of OMH. Pursuant to the Contribution Agreement, Independence Holdings, LLC was contributed by SFI to SFC.

COVID-19			the global outbreak of a novel strain of coronavirus





Exchange Act			Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board
February 2019 Real Estate Loan Sale			SFC and certain of its subsidiaries sold a portfolio of real estate loans with a carrying value of $16 million, classified in finance receivables held for sale, for aggregate cash proceeds of $19 million on February 5, ~~2019.~~2019

FICO score			a credit score created by Fair Isaac Corporation
~~Fortress~~
Fortress			Fortress Investment Group LLC
~~Fortress Acquisition~~			transaction by which FCFI Acquisition LLC, an affiliate of Fortress, acquired an 80% economic interest of the sole stockholder of SFC for a cash purchase price of $119 million, effective November 30, 2010
~~GAAP~~
GAAP			generally accepted accounting principles in the United States of America
GAP			guaranteed asset protection

Gross charge-off ratio			annualized gross charge-offs as a percentage of average net receivables
~~Indenture~~
Indenture			the SFC Base Indenture, together with all subsequent Supplemental Indentures
~~Independence~~			~~Independence Holdings, LLC~~
~~Indiana DOI~~	~~Indiana Department of Insurance~~
~~Investment Company Act~~	~~Investment Company Act of 1940~~



~~Term or Abbreviation~~		~~Definition~~
IRS
~~IRS~~	Internal Revenue Service
Junior Subordinated Debenture		$350 million aggregate principal amount of 60-year junior subordinated debt issued by SFC under an indenture dated January 22, 2007, by and between SFC and Deutsche Bank Trust Company, as trustee, and guaranteed by OMH
~~LIBOR~~		~~London Interbank Offered Rate~~
~~Merit~~


Merit		Merit Life Insurance Co., ana former insurance subsidiary of ~~SFC~~SFC. In the fourth quarter of 2019, the Company sold all of the issued and outstanding shares in Merit to a third party




Net charge-off ratio		annualized net charge-offs as a percentage of average net receivables
Net interest income		interest income less interest expense
~~ODART~~
ODART		OneMain Direct Auto Receivables Trust
~~OMFIT~~






OMFIT		OneMain Financial Issuance Trust
OMH		OneMain Holdings, Inc.
~~OneMain~~


Term or Abbreviation		Definition

OneMain Acquisition		Acquisition of OneMain Financial Holdings, LLC ~~collectively with its subsidiaries~~
~~OneMain Acquisition~~	~~Acquisition of OneMain~~ from CitiFinancial Credit Company, effective November 1, 2015
Other securities		securities for which the fair value option was elected and equity securities. Other Securities recognize unrealized gains and losses in investment revenues
Other SFC Notes		collectively, SFC’s 8.25% Senior Notes due 2023, and 7.75% Senior Notes due 2021, ~~and 6.00% Senior Notes due 2020,~~ on a senior unsecured basis, and the Junior Subordinated Debenture, on a junior subordinated basis, issued by SFC and guaranteed by OMH
~~PRSUs~~		~~performance-based RSUs~~
Pretax capital generation		a non-GAAP financial measure used by management as a key performance measure of our segment, defined as adjusted pretax income (loss) excluding the change in allowance for finance receivable losses
Recovery ratio		annualized recoveries on net charge-offs as a percentage of average net receivables
~~Retail sales finance portfolio~~		~~collectively, retail sales finance contracts and revolving retail accounts~~
~~RMBS~~
RMBS		residential mortgage-backed securities
RSAs		restricted stock awards
RSUs		restricted stock units
~~SEC~~

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

Settlement Agreement		a Settlement Agreement with the U.S. Department of Justice entered into by OMH and certain of its subsidiaries on November 13, 2015, in connection with the OneMain Acquisition
SFC		Springleaf Finance Corporation
SFC Base Indenture		Indenture, dated as of December 3, 2014




SFC Guaranty Agreements		agreements entered into on December 30, 2013 by OMH whereby it agreed to fully and unconditionally guarantee the payments of principal, premium (if any), and interest on the Other SFC Notes, and the 6.00% Senior Notes due 2020, which were redeemed in full on April 15, 2019
~~SFC Senior Notes Indentures~~		the SFC Base Indenture as supplemented by the SFC First Supplemental Indenture, the SFC Second Supplemental Indenture, the SFC Third Supplemental Indenture, the SFC Fourth Supplemental Indenture, the SFC Fifth Supplemental Indenture and the SFC Sixth Supplemental Indenture
~~SFC Seventh Supplemental Indenture~~		~~Seventh Supplemental Indenture, dated as of February 22, 2019, to the SFC Base Indenture~~
~~SFH~~




SFH		Springleaf Financial Holdings, LLC, an entity owned primarily by a private equity fund managed by an affiliate of Fortress that sold 54,937,500 shares of ~~OMH’s~~OMH's common stock to the Apollo-Värde Group in the Apollo-Värde Transaction
SFI		Springleaf Finance, Inc.

Share Purchase Agreement		a share purchase agreement entered into on January 3, 2018, among the Apollo-Värde Group, SFH and the Company to acquire from SFH 54,937,500 shares of ~~our~~OMH's common stock that was issued and outstanding as of such date, representing the entire holdings of ~~our~~OMH's stock beneficially owned by Fortress
SLFT		Springleaf Funding Trust
SMHC		Springleaf Mortgage Holding Company and subsidiaries


SpringCastle ~~Joint Venture~~Portfolio		~~joint venture among SpringCastle America, LLC, SpringCastle Credit, LLC, SpringCastle Finance, LLC, and SpringCastle Acquisition LLC in which SpringCastle Holdings, LLC~~loans the Company previously owned and now services on behalf of a 47% equity interest in each of SpringCastle America, LLC, SpringCastle Credit, LLC and SpringCastle Finance, LLC and Springleaf Acquisition Corporation previously owned a 47% equity interest in SpringCastle Acquisition LLCthird party
~~SpringCastle Portfolio~~		~~loans acquired through the SpringCastle Joint Venture~~


Tax Act		Public Law 115-97 amending the Internal Revenue Code of 1986



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

TDR finance receivables		troubled debt restructured finance receivables.Debt restructuring in which a concession is granted to the borrower as a result of economic or legal reasons related to the borrower’s financial ~~difficulties.~~ difficulties
~~Triton~~
Triton			Triton Insurance Company, an insurance subsidiary of ~~OMFH~~OneMain Financial Holdings, LLC
~~UPB~~
Unearned finance charges			the amount of interest that is capitalized at time of origination on a precompute loan that will be earned over the remaining contractual life of the loan
UPB			unpaid principal balance for interest bearing accounts and the gross remaining contractual payments less the unaccreted balance of unearned finance charges for precompute accounts
Värde			Värde Partners, Inc.
VIEs			variable interest entities

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



~~GLOSSARY~~			3

PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements of OneMain Holdings, Inc. and Subsidiaries (Unaudited):
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Operations	7
	Condensed Consolidated Statements of Comprehensive Income (Loss)	8
	Condensed Consolidated Statements of Shareholders’ Equity	9
	Condensed Consolidated Statements of Cash Flows	10
	Financial Statements of Springleaf Finance Corporation and Subsidiaries (Unaudited):
	Condensed Consolidated Balance Sheets	11
	Condensed Consolidated Statements of Operations	12
	Condensed Consolidated Statements of Comprehensive Income (Loss)	13
	Condensed Consolidated Statements of Shareholder ’s Equity	14
	Condensed Consolidated Statements of Cash Flows	15
	Notes to the Condensed Consolidated Financial Statements	1117
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3241
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5165
Item 4.	Controls and Procedures	5166
	Controls and Procedures of OneMain Holdings, Inc.	66
	Controls and Procedures of Springleaf Finance Corporation	66

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	5167
Item 1A.	Risk Factors	5167
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5269
Item 3.	Defaults Upon Senior Securities	5269
Item 4.	Mine Safety Disclosures	5269
Item 5.	Other Information	5269
Item 6.	Exhibit Index	5370

SIGNATURE
	OneMain Holdings, Inc. Signature	5471
	Springleaf Finance Corporation Signature	72



(dollars in millions, except par value amount)	March 31, 2020		December 31, 2019

Assets
Cash and cash equivalents	$	4,203	$	1,227
Investment securities (includes available-for-sale securities with a fair value and amortized cost basis of $1.7 billion in 2020)	1,800		1,884
Net finance receivables (includes loans of consolidated VIEs of $12.1 billion in 2020 and $8.4 billion in 2019)	18,269		18,389
Unearned insurance premium and claim reserves	(797)		(793)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $1.4 billion in 2020 and $340 million in 2019)	(2,182)		(829)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	15,290		16,767

Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $567 million in 2020 and $400 million in 2019)	575		405
Goodwill	1,422		1,422
Other intangible assets	334		343
Other assets	1,069		769
Total assets	$	24,693	$	22,817

Liabilities and Shareholders’ Equity
Long-term debt (includes debt of consolidated VIEs of $10.9 billion in 2020 and $7.6 billion in 2019)	$	20,443	$	17,212
Insurance claims and policyholder liabilities	633		649
Deferred and accrued taxes	68		34
Other liabilities (includes other liabilities of consolidated VIEs of $17 million in 2020 and $14 million in 2019)	497		592
Total liabilities	21,641		18,487
Contingencies (Note 14)

Shareholders’ equity:
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized, 134,309,707 and 136,101,156 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	1		1
Additional paid-in capital	1,645		1,689
Accumulated other comprehensive income	(6)		44
Retained earnings	1,412		2,596
Total shareholders’ equity	3,052		4,330
Total liabilities and shareholders’ equity	$	24,693	$	22,817




(dollars in millions, except par value amount)	March 31, 2019			December 31, 2018

Assets
Cash and cash equivalents	$	1,709		$	679
Investment securities	1,743			1,694
Net finance receivables (includes loans of consolidated VIEs of $9.1 billion in 2019 and $8.5 billion in 2018)	16,136			16,164
Unearned insurance premium and claim reserves	(668		)	(662		)
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $430 million in 2019 and $444 million in 2018)	(733		)	(731		)
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses	14,735			14,771
Finance receivables held for sale	78			103
Restricted cash and restricted cash equivalents (include restricted cash and restricted cash equivalents of consolidated VIEs of $558 million in 2019 and $479 million in 2018)	575			499
Goodwill	1,422			1,422
Other intangible assets	372			388
Other assets	724			534
Total assets	$	21,358		$	20,090
Liabilities and Shareholders’ Equity
Long-term debt (includes debt of consolidated VIEs of $8.1 billion in 2019 and $7.5 billion in 2018)	$	16,117		$	15,178
Insurance claims and policyholder liabilities	642			685
Deferred and accrued taxes	81			45
Other liabilities (includes other liabilities of consolidated VIEs of $16 million in 2019 and $14 million in 2018)	568			383
Total liabilities	17,408			16,291
Commitments and contingent liabilities (Note 13)

Shareholders’ equity:
Common stock, par value $.01 per share; 2,000,000,000 shares authorized, 136,082,463 and 135,832,278 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	1			1
Additional paid-in capital	1,682			1,681
Accumulated other comprehensive loss	(2		)	(34		)
Retained earnings	2,269			2,151
Total shareholders’ equity	3,950			3,799
Total liabilities and shareholders’ equity	$	21,358		$	20,090


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

























Balance, January 1, 2020 (pre-adoption)	$	1	$	1,689	$	44	$	2,596	$	4,330
Net impact of adoption of ASU 2016-13 (see Note 3)	—		—		—		(828)		(828)
Balance, January 1, 2020 (post-adoption)	1		1,689		44		1,768		3,502
Common stock repurchased and retired	—		(45)		—		—		(45)
Share-based compensation expense, net of forfeitures	—		7		—		—		7
Withholding tax on share-based compensation	—		(6)		—		—		(6)

Other comprehensive loss	—		—		(50)		—		(50)

Cash dividends *	—		—		—		(388)		(388)
Net income	—		—		—		32		32
Balance, March 31, 2020	$	1	$	1,645	$	(6)	$	1,412	$	3,052


Balance, January 1, 2019	$	1	$	1,681	$	(34)	$	2,151	$	3,799

Share-based compensation expense, net of forfeitures	—		6		—		—		6
Withholding tax on share-based compensation	—		(5)		—		—		(5)
Other comprehensive income	—		—		32		—		32
Cash dividends *	—		—		—		(34)		(34)
Net income	—		—		—		152		152
Balance, March 31, 2019	$	1	$	1,682	$	(2)	$	2,269	$	3,950


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


Balance, January 1, 2020 (pre-adoption)	$	5	$	1,888	$	44	$	2,388	$	4,325
Net impact of adoption of ASU-2016-13 (see Note 3)	—		—		—		(828)		(828)
Balance, January 1, 2020 (post-adoption)	5		1,888		44		1,560		3,497
Share-based compensation expense, net of forfeitures	—		7		—		—		7
Withholding tax on share-based compensation	—		(6)		—		—		(6)

Other comprehensive loss	—		—		(50)		—		(50)
Cash dividends	—		—		—		(433)		(433)


Net income	—		—		—		32		32
Balance, March 31, 2020	$	5	$	1,889	$	(6)	$	1,159	$	3,047

























Balance, January 1, 2019	$	5	$	2,110	$	(34)	$	1,940	$	4,021


Contribution of SCHC to SFC from SFI	—		34		—		—		34
Share-based compensation expense, net of forfeitures	—		6		—		—		6
Withholding tax on shared-based compensation	—		(5)		—		—		(5)
Other comprehensive income	—		—		32		—		32
Cash dividends	—		—		—		(34)		(34)
Net income	—		—		—		156		156
Balance, March 31, 2019	$	5	$	2,145	$	(2)	$	2,062	$	4,210



2. Reconciliation of Springleaf Finance Corporation Results to OneMain Holdings, Inc. Results


*	~~Gross receivables equal the UPB except for the following:~~


~~(b)~~Personal Loans	~~The~~
Carrying amount, net of allowance		$	40
Outstanding balance (a)		74
Allowance for purchased credit impaired finance receivable losses ~~reflects the carrying value of the purchased credit impaired loans held~~(b)		—

Real Estate Loans - Held for ~~investment exceeding the present value of the expected cash flows. As indicated above, no allowance was required as of March 31, 2019 or December 31, 2018.~~Sale
Carrying amount		$	19
Outstanding balance (a)		35


~~(a)~~	~~Reclassifications from nonaccretable difference represents the increases~~
(dollars in ~~accretable yield resulting from higher estimated undiscounted cash flows.~~millions)		Three Months Ended March 31, 2019

Personal Loans
Balance at beginning of period		$	39
Accretion		(5)

Balance at end of period		$	34







Real Estate Loans - Held for Sale
Balance at beginning of period		$	27
Accretion		(1)

Transfer due to finance receivables sold		(3)
Balance at end of period		$	23


~~(a)~~	~~TDR gross receivables~~ ~~— gross receivables are equal to UPB and, if applicable, any remaining unearned premium or discount established at the time of purchase if previously purchased as a performing receivable.~~


~~(b)~~	~~TDR net receivables~~ ~~— TDR gross receivables net of unearned points and fees, accrued finance charges, deferred origination costs and any impairment for real estate loans held for sale.~~


(dollars in millions)	Personal Loans		Real Estate Loans		Total









Three Months Ended March 31, 2020
TDR average net receivables	$	676	$	52	$	728
TDR finance charges recognized	12		1		13

Three Months Ended March 31, 2019
TDR average net receivables	$	477	$	64	$	541
TDR finance charges recognized	12		1		13



(dollars in millions)	Personal Loans		Other Receivables *		Total

Three Months Ended March 31, 2019
TDR average net receivables	$	477	$	64	$	541
TDR finance charges recognized	12		1		13

Three Months Ended March 31, 2018
TDR average net receivables	$	337	$	139	$	476
TDR finance charges recognized	11		2		13


*	~~“Other” modifications primarily include potential principal and interest forgiveness contingent on future payment performance by the~~


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



(dollars in millions)	Personal Loans			Other Receivables			Total

Three Months Ended March 31, 2019
Balance at beginning of period	$	731		$	—		$	731
Provision for finance receivable losses	286			—			286
Charge-offs	(311		)	—			(311		)
Recoveries	27			—			27
Balance at end of period	$	733		$	—		$	733

Three Months Ended March 31, 2018
Balance at beginning of period	$	673		$	24		$	697
Provision for finance receivable losses	254			—			254
Charge-offs	(289		)	(1		)	(290		)
Recoveries	27			1			28
Balance at end of period	$	665		$	24		$	689


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

March 31, 2020*
Fixed maturity available-for-sale securities:
U.S. government and government sponsored entities	$	11	$	—	$	—	$	11
Obligations of states, municipalities, and political subdivisions	88		1		—		89
Commercial paper	76		—		—		76
Non-U.S. government and government sponsored entities	136		4		(1)		139
Corporate debt	1,061		25		(31)		1,055
Mortgage-backed, asset-backed, and collateralized:
RMBS	212		8		(3)		217
CMBS	64		1		(2)		63
CDO/ABS	87		1		(6)		82
Total	$	1,735	$	40	$	(43)	$	1,732


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

March 31, 2020

Obligations of states, municipalities, and political subdivisions	$	20	$	—	$	—	$	—	$	20	$	—
Commercial paper	45		—		—		—		45		—
Non-U.S. government and government sponsored entities	17		(1)		—		—		17		(1)
Corporate debt	434		(31)		3		—		437		(31)
Mortgage-backed, asset-backed, and collateralized:
RMBS	53		(3)		—		—		53		(3)
CMBS	31		(2)		3		—		34		(2)
CDO/ABS	57		(6)		—		—		57		(6)
Total	$	657	$	(43)	$	6	$	—	$	663	$	(43)

December 31, 2019*
U.S. government and government sponsored entities	$	—	$	—	$	3	$	—	$	3	$	—
Obligations of states, municipalities, and political subdivisions	29		(1)		4		—		33		(1)
Commercial paper	76		—		—		—		76		—
Non-U.S. government and government sponsored entities	19		—		14		—		33		—
Corporate debt	63		(1)		13		—		76		(1)
Mortgage-backed, asset-backed, and collateralized:
RMBS	45		—		—		—		45		—
CMBS	15		—		7		—		22		—
CDO/ABS	14		—		—		—		14		—
Total	$	261	$	(2)	$	41	$	—	$	302	$	(2)


(dollars in millions)	Fair Value		Amortized Cost

Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities:
Due in 1 year or less	$	190	$	190
Due after 1 year through 5 years	550		551
Due after 5 years through 10 years	473		474
Due after 10 years	157		157
Mortgage-backed, asset-backed, and collateralized securities	362		363
Total	$	1,732	$	1,735


~~(a)~~	~~The Company employs an income equity strategy targeting investments in stocks with strong current dividend yields. Stocks included have a history of stable or increasing dividend payments.~~


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

Interest rates (b)	1.50%-6.94%		1.51%-3.24%		5.38%-8.25%		3.58		%

Remainder of 2020	$	—	$	—	$	1,000	$	—		$	1,000
2021	—		—		646		—			646
2022	—		—		1,000		—			1,000
2023	—		—		1,175		—			1,175
2024	—		—		1,300		—			1,300
2025-2067	—		—		4,399		350			4,749
Securitizations (c)	7,396		—		—		—			7,396
Revolving conduit facilities (c)	—		3,500		—		—			3,500
Total principal maturities	$	7,396	$	3,500	$	9,520	$	350		$	20,766

Total carrying amount	$	7,364	$	3,500	$	9,407	$	172		$	20,443
Debt issuance costs (d)	(27)		—		(81)		—			(108)


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


~~(b)~~	The interest rates shown are the range of contractual rates in effect at March 31, 2019. The interest rate on the remaining principal balance of the Junior Subordinated Debenture consists of a variable floating rate (determined quarterly) equal to 3-month LIBOR plus 1.75%, or 4.54% as of March 31, 2019.


~~(d)~~	~~Debt issuance costs are reported as a direct deduction from long-term debt, with the exception of debt issuance costs associated with our revolving conduit facilities, which totaled$25 million at March 31, 2019 and are reported in “Other assets”.~~


	At or for the
	Three Months Ended March 31,
(dollars in millions)	2020		2019

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

Net balance at beginning of period	113		113

Additions for losses and loss adjustment expenses incurred to:
Current year	77		54
Prior years *	(9)		(7)
Total	68		47
Reductions for losses and loss adjustment expenses paid related to:
Current year	(17)		(17)
Prior years	(30)		(33)
Total	(47)		(50)
Foreign currency translation adjustment	(1)		—
Net balance at end of period	133		110
Plus reinsurance recoverables	3		4

Balance at end of period	$	136	$	114


*			Reflects (i) a redundancy in the prior years’ net reserves of $7 million at March 31, 2019 primarily due to a favorable development of credit life, disability, and unemployment claims during the year and (ii) a redundancy in the prior years’ net reserves of $4 million at March 31, 2018, primarily due to a favorable development of credit disability and unemployment claims during the year.


(dollars in millions, except per share data)	Three Months Ended March 31,
	2020		2019

Numerator (basic and diluted):
Net income	$	32	$	152
Denominator:
Weighted average number of shares outstanding (basic)	135,909,100		136,001,996
Effect of dilutive securities *	229,577		189,287
Weighted average number of shares outstanding (diluted)	136,138,677		136,191,283
Earnings per share:
Basic	$	0.24	$	1.12
Diluted	$	0.24	$	1.11



	Three Months Ended March 31,
	2019	2018

Performance-based shares	127,183	97,161
Service-based shares	331,411	321,237



(dollars in millions)	Operating Leases

2019 (excluding the three months ended March 31, 2019)	$	46
2020	52
2021	39
2022	27
2023	13
2024	6
Thereafter	6
Total lease payments	189
Imputed interest	(14		)
Total	$	175



(dollars in millions)	Lease Commitments

2019	$	60
2020	50
2021	37
2022	26
2023	12
2024+	12
Total	$	197