Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Feb. 14, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | SPRINGLEAF FINANCE CORP | |
Entity Central Index Key | 25,598 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Public Float | $ 0 | |
Entity Common Stock, Shares Outstanding (in shares) | 10,160,021 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 244 | $ 240 |
Investment securities | 536 | 582 |
Net finance receivables: | ||
Personal loans (includes loans of consolidated VIEs of $3.3 billion in 2017 and $2.9 billion in 2016) | 5,308 | 4,804 |
Real estate loans | 128 | 144 |
Retail sales finance | 6 | 11 |
Net finance receivables | 5,442 | 4,959 |
Unearned insurance premium and claim reserves | (108) | (212) |
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $141 million in 2017 and $94 million in 2016) | (240) | (204) |
Net finance receivables, less unearned insurance premium and claim reserves and allowance for finance receivable losses | 5,094 | 4,543 |
Finance receivables held for sale | 132 | 153 |
Notes receivable from parent and affiliates | 4,488 | 3,723 |
Restricted cash and restricted cash equivalents (includes restricted cash and restricted cash equivalents of consolidated VIEs of $158 million in 2017 and $211 million in 2016) | 169 | 227 |
Other assets | 161 | 251 |
Total assets | 10,824 | 9,719 |
Liabilities and Shareholder’s Equity | ||
Long-term debt (includes debt of consolidated VIEs of $3.0 billion in 2017 and $2.7 billion in 2016) | 7,865 | 6,837 |
Insurance claims and policyholder liabilities | 261 | 248 |
Deferred and accrued taxes | 78 | 106 |
Other liabilities (includes other liabilities of consolidated VIEs of $5 million in 2017 and 2016) | 214 | 185 |
Total liabilities | 8,418 | 7,376 |
Commitments and contingent liabilities (Note 19) | ||
Shareholder’s equity: | ||
Common stock, par value $.50 per share; 25,000,000 shares authorized, 10,160,021 shares issued and outstanding at December 31, 2017 and 2016 | 5 | 5 |
Additional paid-in capital | 799 | 799 |
Accumulated other comprehensive income (loss) | 0 | (7) |
Retained earnings | 1,602 | 1,546 |
Total shareholder’s equity | 2,406 | 2,343 |
Total liabilities and shareholder’s equity | $ 10,824 | $ 9,719 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Personal loans of consolidated VIEs | $ 5,308 | $ 4,804 |
Allowance for finance receivable losses | 240 | 204 |
Restricted cash and restricted cash equivalents | 169 | 227 |
Carrying Value | 7,865 | 6,837 |
Other liabilities | $ 214 | $ 185 |
Common stock, par value (in USD per share) | $ 0.50 | $ 0.50 |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock, shares issued (in shares) | 10,160,021 | 10,160,021 |
Common stock, shares outstanding (in shares) | 10,160,021 | 10,160,021 |
Consolidated VIEs | ||
Allowance for finance receivable losses | $ 141 | $ 94 |
Restricted cash and restricted cash equivalents | 158 | 211 |
Carrying Value | 3,000 | 2,700 |
Other liabilities | 5 | 5 |
Personal Loans | ||
Allowance for finance receivable losses | 216 | 184 |
Personal Loans | Consolidated VIEs | ||
Personal loans of consolidated VIEs | $ 3,300 | $ 2,900 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest income: | |||
Finance charges | $ 1,228 | $ 1,276 | $ 1,597 |
Finance receivables held for sale originated as held for investment | 13 | 74 | 60 |
Total interest income | 1,241 | 1,350 | 1,657 |
Interest expense | 517 | 556 | 667 |
Net interest income | 724 | 794 | 990 |
Provision for finance receivable losses | 324 | 329 | 339 |
Net interest income after provision for finance receivable losses | 400 | 465 | 651 |
Other revenues: | |||
Insurance | 140 | 160 | 158 |
Investment | 28 | 31 | 49 |
Interest income on notes receivable from parent and affiliates | 255 | 214 | 42 |
Net loss on repurchases and repayments of debt | (28) | (17) | 0 |
Net gain on sale of SpringCastle interests | 0 | 167 | 0 |
Net gain on sales of personal and real estate loans and related trust assets | 0 | 18 | 0 |
Other | 12 | 1 | (6) |
Total other revenues | 407 | 574 | 243 |
Operating expenses: | |||
Salaries and benefits | 307 | 347 | 364 |
Other operating expenses | 251 | 291 | 299 |
Insurance policy benefits and claims | 56 | 55 | 72 |
Total other expenses | 614 | 693 | 735 |
Income before income tax expense | 193 | 346 | 159 |
Income tax expense | 99 | 113 | 18 |
Net income | 94 | 233 | 141 |
Net income attributable to non-controlling interests | 0 | 28 | 127 |
Net income attributable to Springleaf Finance Corporation | $ 94 | $ 205 | $ 14 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 94 | $ 233 | $ 141 |
Other comprehensive income (loss): | |||
Net change in unrealized gains (losses) on non-credit impaired available-for-sale securities | 13 | 17 | (17) |
Retirement plan liabilities adjustments | 4 | 22 | (9) |
Income tax effect: | |||
Net unrealized (gains) losses on non-credit impaired available-for-sale securities | (5) | (6) | 5 |
Retirement plan liabilities adjustments | (1) | (7) | 3 |
Other comprehensive income (loss), net of tax, before reclassification adjustments | 11 | 26 | (18) |
Reclassification adjustments included in net income: | |||
Net realized gains on available-for-sale securities | (7) | (8) | (14) |
Net realized gain on foreign currency translation adjustments | 0 | (4) | 0 |
Income tax effect: | |||
Net realized gains on available-for-sale securities | 3 | 3 | 5 |
Reclassification adjustments included in net income, net of tax | (4) | (9) | (9) |
Other comprehensive income (loss), net of tax | 7 | 17 | (27) |
Comprehensive income | 101 | 250 | 114 |
Comprehensive income attributable to non-controlling interests | 0 | 28 | 127 |
Comprehensive income (loss) attributable to Springleaf Finance Corporation | $ 101 | $ 222 | $ (13) |
Consolidated Statements of Shar
Consolidated Statements of Shareholder's Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Springleaf Finance Corporation Shareholder’s Equity | Non-controlling Interests |
Balance at beginning of period at Dec. 31, 2014 | $ 1,977 | $ 5 | $ 771 | $ 3 | $ 1,327 | $ 2,106 | $ (129) |
Common shares issued and outstanding | |||||||
Other comprehensive income (loss) | (27) | (27) | (27) | ||||
Net income | 141 | 14 | 14 | 127 | |||
Share-based compensation expense, net of forfeitures | 2 | 2 | 2 | ||||
Distributions declared to joint venture partners | (77) | (77) | |||||
Non-cash incentive compensation from Initial Stockholder | 15 | 15 | 15 | ||||
Excess tax benefit from share-based compensation | 1 | 1 | 1 | ||||
Balance at end of period at Dec. 31, 2015 | 2,032 | 5 | 789 | (24) | 1,341 | 2,111 | (79) |
Common shares issued and outstanding | |||||||
Other comprehensive income (loss) | 17 | 17 | 17 | ||||
Net income | 233 | 205 | 205 | 28 | |||
Capital contributions from parent | 10 | 10 | 10 | ||||
Share-based compensation expense, net of forfeitures | 1 | 1 | 1 | ||||
Withholding tax on share-based compensation | (1) | (1) | (1) | ||||
Distributions declared to joint venture partners | (18) | (18) | |||||
Sale of equity interests in SpringCastle joint venture | 69 | 69 | |||||
Balance at end of period at Dec. 31, 2016 | 2,343 | 5 | 799 | (7) | 1,546 | 2,343 | 0 |
Common shares issued and outstanding | |||||||
Other comprehensive income (loss) | 7 | 7 | 0 | 7 | |||
Dividend of SFMC to SFI | (38) | (38) | (38) | ||||
Net income | 94 | 94 | 94 | ||||
Balance at end of period at Dec. 31, 2017 | $ 2,406 | $ 5 | $ 799 | $ 0 | $ 1,602 | $ 2,406 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net income | $ 94 | $ 233 | $ 141 |
Reconciling adjustments: | |||
Provision for finance receivable losses | 324 | 329 | 339 |
Depreciation and amortization | 143 | 144 | 92 |
Deferred income tax benefit | (82) | (83) | (50) |
Non-cash incentive compensation from Initial Stockholder | 0 | 0 | 15 |
Net gain on liquidation of United Kingdom subsidiary | 0 | (4) | 0 |
Net gain on sales of personal and real estate loans and related trust assets | 0 | (18) | 0 |
Net loss on repurchases and repayments of debt | 28 | 17 | 0 |
Share-based compensation expense, net of forfeitures | 0 | 1 | 2 |
Net gain on sale of SpringCastle interests | 0 | (167) | 0 |
Other | 1 | 6 | (3) |
Cash flows due to changes in: | |||
Other assets and other liabilities | 107 | (37) | (48) |
Insurance claims and policyholder liabilities | (92) | (19) | 34 |
Taxes receivable and payable | 13 | 56 | 111 |
Accrued interest and finance charges | (95) | 14 | (23) |
Other, net | (3) | 3 | (2) |
Net cash provided by operating activities | 438 | 475 | 608 |
Cash flows from investing activities | |||
Net principal originations of finance receivables held for investment and held for sale | (783) | (557) | (799) |
Proceeds on sales of finance receivables held for sale originated as held for investment | 0 | 930 | 78 |
Proceeds from sale of SpringCastle interests, net of restricted cash released | 0 | 26 | 0 |
Cash advances on intercompany notes receivable | (1,837) | (1,042) | (3,720) |
Proceeds from repayments of principal and assignment of intercompany notes receivable | 1,154 | 1,023 | 189 |
Available-for-sale securities purchased | (245) | (353) | (476) |
Trading and other securities purchased | 0 | (10) | (1,474) |
Available-for-sale securities called, sold, and matured | 301 | 380 | 470 |
Trading and other securities called, sold, and matured | 1 | 20 | 3,779 |
Proceeds from sale of real estate owned | 4 | 8 | 14 |
Other, net | 12 | 26 | (12) |
Net cash provided by (used for) investing activities | (1,393) | 451 | (1,951) |
Cash flows from financing activities | |||
Proceeds from issuance of long-term debt, net of commissions | 3,456 | 3,854 | 3,028 |
Proceeds from intercompany note payable | 0 | 670 | 0 |
Repayments of long-term debt | (2,544) | (4,920) | (1,960) |
Distributions to joint venture partners | (18) | (77) | |
Payments on note payable to affiliate | 0 | (670) | 0 |
Excess tax benefit from share-based compensation | 0 | 0 | 1 |
Withholding tax on vested RSUs and PRSUs | (1) | (1) | 0 |
Cash dividend of SFMC | (10) | 0 | 0 |
Capital contributions from parent | 0 | 10 | 0 |
Net cash provided by (used for) financing activities | 901 | (1,075) | 992 |
Net change in cash and cash equivalents and restricted cash and restricted cash equivalents | (54) | (149) | (351) |
Cash and cash equivalents and restricted cash and restricted cash equivalents at beginning of period | 467 | 616 | 967 |
Cash and cash equivalents and restricted cash and restricted cash equivalents at end of period | 413 | 467 | 616 |
Supplemental cash flow information | |||
Cash and cash equivalents | 244 | 240 | 321 |
Total cash and cash equivalents and restricted cash and restricted cash equivalents | 467 | 616 | 967 |
Interest paid | (436) | (451) | (511) |
Income taxes received (paid) | (71) | (140) | 45 |
Supplemental non-cash activities | |||
Transfer of finance receivables held for investment to finance receivables held for sale (prior to deducting allowance for finance receivable losses) | 0 | 1,945 | 617 |
Increase in finance receivables held for investment financed with intercompany payable | 0 | 89 | 0 |
Transfer of finance receivables to real estate owned | 9 | 8 | 11 |
Non-cash dividend of SFMC | $ (28) | $ 0 | $ 0 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Springleaf Finance Corporation is referred to in this report as SFC or, collectively with its subsidiaries, whether directly or indirectly owned, “Springleaf,” the “Company,” “we,” “us,” or “our” is a wholly owned subsidiary of SFI. SFI is a wholly owned subsidiary of OMH. At December 31, 2017 , the Initial Stockholder owned approximately 44% of OMH’s common stock. The Initial Stockholder is owned primarily by a private equity fund managed by an affiliate of Fortress. On December 27, 2017, SoftBank acquired Fortress and Fortress now operates within SoftBank as an independent business headquartered in New York. See Note 24 regarding a definitive agreement entered into on January 3, 2018, among OMH, an investor group led by funds managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, “Apollo”) and Värde Partners, Inc. (“Värde” and together with Apollo, collectively, the “Apollo-Värde Group”) and the Initial Stockholder. |
Significant Transactions
Significant Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Significant Transactions [Abstract] | |
Significant Transactions | Significant Transactions OMH’S ACQUISITION OF ONEMAIN FINANCIAL HOLDINGS, LLC On November 15, 2015, OMH, through its wholly owned subsidiary, Independence, completed its acquisition of OMFH from Citigroup for approximately $4.5 billion in cash (the “OneMain Acquisition”). As a result of the OneMain Acquisition, OMFH became a wholly owned, indirect subsidiary of OMH. OMFH is not a subsidiary of SFC and SFC is not a subsidiary of OMFH. In connection with the closing of the OneMain Acquisition, on November 13, 2015, OMH and certain subsidiaries of SFC entered into an Asset Preservation Stipulation and Order and agreed to a Proposed Final Judgment (collectively, the “Settlement Agreement”) with the U.S. Department of Justice (the “DOJ”), as well as the state attorneys general for Colorado, Idaho, Pennsylvania, Texas, Virginia, Washington and West Virginia. The Settlement Agreement resolved the inquiries of the DOJ and such attorneys general with respect to the OneMain Acquisition and allowed OMH to proceed with the closing. Pursuant to the Settlement Agreement, OMH agreed to divest 127 branches of SFC subsidiaries across 11 states as a condition for approval of the OneMain Acquisition. The Settlement Agreement required certain of OMH’s subsidiaries (the “Branch Sellers”) to operate these 127 branches as an ongoing, economically viable and competitive business until sold to the divestiture purchaser. The court overseeing the settlement appointed a third-party monitor to oversee management of the divestiture branches and ensure the Company’s compliance with the terms of the Settlement Agreement. The sale contemplated under the terms of the Settlement Agreement was consummated through the Lendmark Sale described below. LENDMARK SALE On November 12, 2015, OMH and the Branch Sellers entered into a purchase and sale agreement with Lendmark Financial Services, LLC (“Lendmark”) to sell 127 Springleaf branches and, subject to certain exclusions, the associated personal loans issued to customers of such branches, fixed non-information technology assets and certain other tangible personal property located in such branches to Lendmark (the “Lendmark Sale”) for a purchase price equal to the sum of (i) the aggregate unpaid balance as of closing of the purchased loans multiplied by 103% , plus (ii) for each interest-bearing purchased loan, an amount equal to all unpaid interest that had accrued on the unpaid balance at the applicable note rate from the most recent interest payment date through the closing, plus (iii) the sum of all prepaid charges and fees and security deposits of the Branch Sellers to the extent arising under the purchased contracts as reflected on the books and records of the Branch Sellers as of closing, subject to certain limitations if the purchase price would exceed $ 695 million and Lendmark would be unable to obtain financing on certain specified terms. In anticipation of the sale of these branches, we transferred $608 million of personal loans from held for investment to held for sale on September 30, 2015. Pursuant to the Settlement Agreement, we were required to dispose of the branches to be sold in connection with the Lendmark Sale within 120 days following November 13, 2015, subject to such extensions as the DOJ may approve. As we did not believe we would be able to consummate the Lendmark Sale prior to April 1, 2016, we requested two extensions of the closing deadline set forth in the Settlement Agreement. The DOJ granted our requests through May 13, 2016. On May 2, 2016, we completed the Lendmark Sale for an aggregate cash purchase price of $624 million . Such sale was effective as of April 30, 2016, and included the sale to Lendmark of personal loans with an unpaid principal balance (“UPB”) as of March 31, 2016 of $600 million . OMH entered into a transition services agreement with Lendmark dated as of May 2, 2016 (the “Transition Services Agreement”), and OMH’s and our activities remained subject to the oversight of the Monitoring Trustee appointed by the court pursuant to the Settlement Agreement until the expiration of the Transition Services Agreement. The Transition Services Agreement expired on May 1, 2017. On May 2, 2016, SFC used a portion of the proceeds from the Lendmark Sale to repay, in full, its revolving demand note with OMFH, which totaled $376 million (including interest payable of $6 million ). SPRINGCASTLE INTERESTS SALE On March 31, 2016, SFI, SpringCastle Holdings, LLC (“SpringCastle Holdings”) and Springleaf Acquisition Corporation (“Springleaf Acquisition” and, together with SpringCastle Holdings, the “SpringCastle Sellers”), wholly owned subsidiaries of OMH, entered into a purchase agreement with certain subsidiaries of New Residential Investment Corp. (“NRZ” and such subsidiaries, the “NRZ Buyers”) and BTO Willow Holdings II, L.P. and Blackstone Family Tactical Opportunities Investment Partnership—NQ—ESC L.P. (collectively, the “Blackstone Buyers” and together with the NRZ Buyers, the “SpringCastle Buyers”). Pursuant to the purchase agreement, on March 31, 2016, SpringCastle Holdings sold its 47% limited liability company interest in each of SpringCastle America, LLC, SpringCastle Credit, LLC and SpringCastle Finance, LLC, and Springleaf Acquisition sold its 47% limited liability company interest in SpringCastle Acquisition LLC, to the SpringCastle Buyers for an aggregate purchase price of approximately $112 million (the “SpringCastle Interests Sale”). SpringCastle America, LLC, SpringCastle Credit, LLC, SpringCastle Finance, LLC and SpringCastle Acquisition LLC are collectively referred to herein as the “SpringCastle Joint Venture.” In connection with the SpringCastle Interests Sale, the SpringCastle Buyers paid $101 million of the aggregate purchase price to the SpringCastle Sellers on March 31, 2016, with the remaining $11 million paid into an escrow account on July 29, 2016. Such escrowed funds are expected to be held in escrow for a period of up to five years following March 31, 2016, and, subject to the terms of the purchase agreement and assuming certain portfolio performance requirements are satisfied, paid to the SpringCastle Sellers at the end of such five -year period. In connection with the SpringCastle Interests Sale, we recorded a net gain in other revenues at the time of sale of $167 million . As a result of this sale, SpringCastle Acquisition and SpringCastle Holdings no longer hold any ownership interests of the SpringCastle Joint Venture. However, unless SFI is terminated, SFI will remain as servicer of the SpringCastle Portfolio under the servicing agreement for the SpringCastle Funding Trust. In addition, we deconsolidated the underlying loans of the SpringCastle Portfolio and previously issued securitized interests, which were reported in long-term debt, as we no longer were considered the primary beneficiary. Prior to the SpringCastle Interests Sale, affiliates of the NRZ Buyers owned a 30% limited liability company interest in the SpringCastle Joint Venture, and affiliates of the Blackstone Buyers owned a 23% limited liability company interest in the SpringCastle Joint Venture (together, the “Other Members”). The Other Members are parties to the purchase agreement for purposes of certain limited indemnification obligations and post-closing expense reimbursement obligations of the SpringCastle Joint Venture to the SpringCastle Sellers. The NRZ Buyers are subsidiaries of NRZ, which is externally managed by an affiliate of Fortress. The Initial Stockholder, which owned approximately 58% of OMH’s common stock as of March 31, 2016, the date of sale, was owned primarily by a private equity fund managed by an affiliate of Fortress. Wesley Edens, Chairman of the Board of Directors of OMH, also serves as Chairman of the Board of Directors of NRZ. Mr. Edens is also a principal of Fortress and serves as Co-Chairman of the Board of Directors of Fortress. Douglas Jacobs, a member of the Board of Directors of OMH, also serves as a member of NRZ’s Board of Directors and Fortress’ Board of Directors. The purchase agreement included customary representations, warranties, covenants and indemnities. We did not record a sales recourse obligation related to the SpringCastle Interests Sale. REAL ESTATE LOAN SALES August 2016 Real Estate Loan Sale On August 3, 2016, SFC and certain of its subsidiaries sold a portfolio of second lien mortgage loans for aggregate cash proceeds of $246 million (the “August 2016 Real Estate Loan Sale”). In connection with this sale, we recorded a net loss in other revenues at the time of sale of $4 million . Unless we are terminated or we resign as servicer, we will continue to service the loans included in this sale pursuant to a servicing agreement. The purchase and sale agreement and the servicing agreement include customary representations and warranties and indemnification provisions. December 2016 Real Estate Loan Sale On December 19, 2016, SFC and certain of its subsidiaries sold a portfolio of first and second lien mortgage loans for aggregate cash proceeds of $ 58 million (the “December 2016 Real Estate Loan Sale”). In connection with this sale, we recorded a net loss in other revenues at the time of sale of less than $ 1 million . SFC’s MEDIUM-TERM NOTE ISSUANCES 8.25% Senior Notes Due 2020 On April 11, 2016, SFC issued $1.0 billion aggregate principal amount of 8.25% Senior Notes due 2020 (the “ 8.25% SFC Notes”) under an Indenture dated as of December 3, 2014 (the “SFC Base Indenture”), as supplemented by a First Supplemental Indenture, dated as of December 3, 2014 (the “SFC First Supplemental Indenture”) and a Second Supplemental Indenture, dated as of April 11, 2016 (the “SFC Second Supplemental Indenture”), pursuant to which OMH provided a guarantee of the notes on an unsecured basis. 6.125% Senior Notes Due 2022 On May 15, 2017, SFC issued $500 million aggregate principal amount of 6.125% Senior Notes due 2022 (the “2022 SFC Notes”) under the SFC Base Indenture, as supplemented by a Third Supplemental Indenture, dated as of May 15, 2017 (the “SFC Third Supplemental Indenture”), pursuant to which OMH provided a guarantee of the 2022 SFC Notes on an unsecured basis. On May 30, 2017, SFC issued and sold $500 million aggregate principal amount of additional 2022 SFC Notes (the “Additional SFC Notes”) in an add-on offering. The initial 2022 SFC Notes and the Additional SFC Notes (collectively, the “ 6.125% SFC Notes”), are treated as a single class of debt securities and have the same terms, other than the issue date and the issue price. 5.625% Senior Notes Due 2023 On December 8, 2017, SFC issued $875 million aggregate principal amount of 5.625% Senior Notes due 2023 (the ‘‘ 5.625% SFC Notes’’) under the SFC Base Indenture, as supplemented by a Fourth Supplemental Indenture dated as of December 8, 2017 (the “SFC Fourth Supplemental Indenture” and, collectively with the SFC Base Indenture, the SFC First Supplemental Indenture, the SFC Second Supplemental Indenture, and the SFC Third Supplemental Indenture, the “Indenture”), pursuant to which OMH provided a guarantee of the 5.625% SFC Notes on an unsecured basis. See Note 12 for further information regarding our debt issuances. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies BASIS OF PRESENTATION We prepared our consolidated financial statements using GAAP. The statements include the accounts of SFC, its subsidiaries (all of which are wholly owned, except for certain subsidiaries associated with a joint venture in which we owned a 47% equity interest prior to March 31, 2016), and VIEs in which we hold a controlling financial interest and for which we are considered to be the primary beneficiary as of the financial statement date. We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of results. Ultimate results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date. To conform to the 2017 presentation, we reclassified certain items in prior periods of our consolidated financial statements. Also, to conform to the new alignment of our segments, as further discussed in Note 22, we have revised our prior period segment disclosures. ACCOUNTING POLICIES Operating Segments Our segments coincide with how our businesses are managed. At December 31, 2017 , our two segments include: • Consumer and Insurance; and • Acquisitions and Servicing. The remaining components (which we refer to as “Other”) consist of our non-originating legacy operations, which include: (i) our liquidating real estate portfolio; (ii) our liquidating retail sales finance portfolio (including retail sales finance accounts from our legacy auto finance operation); (iii) our lending operations in Puerto Rico and the U.S. Virgin Islands; and (iv) the operations of the United Kingdom subsidiary, prior to its liquidation on August 16, 2016. Beginning in 2017, management no longer views or manages our real estate assets as a separate operating segment. Therefore, we are now including Real Estate, which was previously presented as a distinct reporting segment, in “Other.” To conform to this new alignment of our segments, we have revised our prior period segment disclosures. Finance Receivables Generally, we classify finance receivables as held for investment based on management’s intent at the time of origination. We determine classification on a loan-by-loan basis. We classify finance receivables as held for investment due to our ability and intent to hold them until their contractual maturities. We carry finance receivables at amortized cost which includes accrued finance charges, net unamortized deferred origination costs and unamortized points and fees, unamortized net premiums and discounts on purchased finance receivables, and unamortized finance charges on precomputed receivables. We include the cash flows from finance receivables held for investment in the consolidated statements of cash flows as investing activities, except for collections of interest, which we include as cash flows from operating activities. We may finance certain insurance products offered to our customers as part of finance receivables. In such cases, the insurance premium is included as an operating cash inflow and the financing of the insurance premium is included as part of the finance receivable as an investing cash flow in the consolidated statements of cash flows. Finance Receivable Revenue Recognition We recognize finance charges as revenue on the accrual basis using the interest method, which we report in interest income. We amortize premiums or accrete discounts on finance receivables as an adjustment to finance charge income using the interest method and contractual cash flows. We defer the costs to originate certain finance receivables and the revenue from nonrefundable points and fees on loans and amortize them as an adjustment to finance charge income using the interest method. We stop accruing finance charges when four contractual payments become past due for personal loans and retail sales contracts and when the sixth contractual payment becomes past due for revolving retail accounts. For finance receivables serviced externally, including real estate loans, we stop accruing finance charges when the third or fourth contractual payment becomes past due depending on the type of receivable and respective third party servicer. We reverse finance charge amounts previously accrued upon suspension of accrual of finance charges. For certain finance receivables that had a carrying value that included a purchase premium or discount, we stop accreting the premium or discount at the time we stop accruing finance charges. We do not reverse accretion of premium or discount that was previously recognized. We recognize the contractual interest portion of payments received on nonaccrual finance receivables as finance charges at the time of receipt. We resume the accrual of interest on a nonaccrual finance receivable when the past due status on the individual finance receivable improves to the point that the finance receivable no longer meets our policy for nonaccrual. At that time we also resume accretion of any unamortized premium or discount resulting from a previous purchase premium or discount. We accrete the amount required to adjust the initial fair value of our finance receivables to their contractual amounts over the life of the related finance receivable for non-credit impaired finance receivables and over the life of a pool of finance receivables for purchased credit impaired finance receivables as described in our policy for purchase credit impaired finance receivables. Purchased Credit Impaired Finance Receivables As part of each of our acquisitions, we identify a population of finance receivables for which it is determined that it is probable that we will be unable to collect all contractually required payments. The population of accounts identified generally consists of those finance receivables that are (i) 60 days or more past due at acquisition, (ii) which had been classified as TDR finance receivables as of the acquisition date, (iii) may have been previously modified, or (iv) had other indications of credit deterioration as of the acquisition date. We accrete the excess of the cash flows expected to be collected on the purchased credit impaired finance receivables over the discounted cash flows (the “accretable yield”) into interest income at a level rate of return over the expected lives of the underlying pools of the purchased credit impaired finance receivables. The underlying pools are based on finance receivables with common risk characteristics. We have established policies and procedures to update on a quarterly basis the amount of cash flows we expect to collect, which incorporates assumptions regarding default rates, loss severities, the amounts and timing of prepayments and other factors that are reflective of then current market conditions. Probable decreases in expected finance receivable cash flows result in the recognition of impairment, which is recognized through the provision for finance receivable losses. Probable significant increases in expected cash flows to be collected would first reverse any previously recorded allowance for finance receivable losses; any remaining increases are recognized prospectively as adjustments to the respective pool’s yield. Our purchased credit impaired finance receivables remain in our purchased credit impaired pools until liquidation or write-off. We do not reclassify modified purchased credit impaired finance receivables as TDR finance receivables. We have additionally established policies and procedures related to maintaining the integrity of these pools. A finance receivable will not be removed from a pool unless we sell, foreclose, or otherwise receive assets in satisfaction of a particular finance receivable or a finance receivable is written-off. If a finance receivable is renewed and additional funds are lent and terms are adjusted to current market conditions, we consider this a new finance receivable and the previous finance receivable is removed from the pool. If the facts and circumstances indicate that a finance receivable should be removed from a pool, that finance receivable will be removed at its allocated carrying amount, and such removal will not affect the yield used to recognize accretable yield of the pool. Troubled Debt Restructured Finance Receivables We make modifications to our personal loans to assist borrowers who are experiencing financial difficulty, are in bankruptcy or are participating in a consumer credit counseling arrangement. We make modifications to our real estate loans to assist borrowers in avoiding foreclosure. 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. We restructure finance receivables only if we believe the customer has the ability to pay under the restructured terms for the foreseeable future. We establish reserves on our TDR finance receivables by discounting the estimated cash flows associated with the respective receivables at the interest rate prior to the modification to the account and record any difference between the discounted cash flows and the carrying value as an allowance adjustment. We may modify the terms of existing accounts in certain circumstances, such as certain bankruptcy or other catastrophic situations or for economic or other reasons related to a borrower’s financial difficulties that justify modification. When we modify an account, we primarily use a combination of the following to reduce the borrower’s monthly payment: reduce interest rate, extend the term, capitalize past due interest or forgive principal or interest. Additionally, as part of the modification, we may require trial payments. If the account is delinquent at the time of modification, the account is brought current for delinquency reporting. Account modifications that are deemed to be a TDR finance receivable are measured for impairment. Account modifications that are not classified as a TDR finance receivable are measured for impairment in accordance with our policy for allowance for finance receivable losses. Finance charges for TDR finance receivables require the application of judgment. We recognize the contractual interest portion of payments received on nonaccrual finance receivables as finance charges at the time of receipt. TDR finance receivables that are placed on nonaccrual status remain on nonaccrual status until the past due status on the individual finance receivable improves to the point that the finance receivable no longer meets our policy for nonaccrual. Allowance for Finance Receivable Losses We establish the allowance for finance receivable losses through the provision for finance receivable losses. We evaluate our finance receivable portfolio by finance receivable type. Our finance receivable types (personal loans, real estate loans, and retail sales finance) consist of a large number of relatively small, homogeneous accounts. We evaluate our finance receivable types for impairment as pools. None of our accounts are large enough to warrant individual evaluation for impairment. Management considers numerous internal and external factors in estimating probable incurred losses in our finance receivable portfolio, including the following: • prior finance receivable loss and delinquency experience; • the composition of our finance receivable portfolio; and • current economic conditions, including the levels of unemployment and personal bankruptcies. We base the allowance for finance receivable losses primarily on historical loss experience using a roll rate-based model applied to our finance receivable portfolios. In our roll rate-based model, our finance receivable types are stratified by contractual delinquency stages (i.e., current, 1-29 days past due, 30-59 days past due, etc.) and projected forward in one-month increments using historical roll rates. In each month of the simulation, losses on our finance receivable types are captured, and the ending delinquency stratification serves as the beginning point of the next iteration. No new volume is assumed. This process is repeated until the number of iterations equals the loss emergence period (the interval of time between the event which causes a borrower to default on a finance receivable and our recording of the charge-off) for our finance receivable types. As delinquency is a primary input into our roll rate-based model, we inherently consider nonaccrual loans in our estimate of the allowance for finance receivable losses. Management exercises its judgment, based on quantitative analyses, qualitative factors, such as recent delinquency and other credit trends, and experience in the consumer finance industry, when determining the amount of the allowance for finance receivable losses. We adjust the amounts determined by the roll rate-based model for management’s estimate of the effects of model imprecision, any changes to underwriting criteria, portfolio seasoning, and current economic conditions, including levels of unemployment and personal bankruptcies. We charge or credit this adjustment to expense through the provision for finance receivable losses. We generally charge off to the allowance for finance receivable losses personal loans that are beyond 180 days past due. To avoid unnecessary real estate loan foreclosures, we may refer borrowers to counseling services, as well as consider a cure agreement, loan modification, voluntary sale (including a short sale), or deed in lieu of foreclosure. When two payments are past due on a collateral dependent real estate loan and it appears that foreclosure may be necessary, we inspect the property as part of assessing the costs, risks, and benefits associated with foreclosure. Generally, we start foreclosure proceedings on real estate loans when four monthly installments are past due. When foreclosure is completed and we have obtained title to the property, we obtain a third-party’s valuation of the property, which is either a full appraisal or a real estate broker’s or appraiser’s estimate of the property sale value without the benefit of a full interior and exterior appraisal and lacking sales comparisons. Such appraisals or real estate brokers’ or appraisers’ estimate of value are one factor considered in establishing an appropriate valuation; however, we are ultimately responsible for the valuation established. We reduce finance receivables by the amount of the real estate loan, establish a real estate owned asset, and charge off any loan amount in excess of that value to the allowance for finance receivable losses. We infrequently extend the charge-off period for individual personal and real estate loan accounts when, in our opinion, such treatment is warranted and consistent with our credit risk policies. We may renew a delinquent account if the customer meets current underwriting criteria and it does not appear that the cause of past delinquency will affect the customer’s ability to repay the new loan. We subject all renewals to the same credit risk underwriting process as we would a new application for credit. For our personal loans and retail sales finance receivables, we may offer those customers whose accounts are in good standing the opportunity of a deferment, which extends the term of an account. We may extend this offer to customers when they are experiencing higher than normal personal expenses. Generally, this offer is not extended to customers who are delinquent. However, we may offer a deferment to a delinquent customer who is experiencing a temporary financial problem. The account is considered current upon granting the deferment. To evaluate whether a borrower’s financial difficulties are temporary or other than temporary we review the terms of each deferment to ensure that the borrower has the financial ability to repay the outstanding principal and associated interest in full following the deferment and after the customer is brought current. If, following this analysis, we believe a borrower’s financial difficulties are other than temporary, we will not grant deferment, and the loans may continue to age until they are charged off. We generally limit a customer to two deferments in a rolling twelve month period unless we determine that an exception is warranted and is consistent with our credit risk policies. For our real estate loans, we may offer a deferment to a delinquent customer who is experiencing a temporary financial problem, which extends the term of an account. Prior to granting the deferment, we may require a partial payment. We forebear the remaining past due interest when the deferment is granted for real estate loans that were originated or acquired centrally. The account is considered current upon granting the deferment. We generally limit a customer to two deferments in a rolling twelve month period for real estate loans that were originated at our branch offices ( one deferment for real estate loans that were originated or acquired centrally) unless we determine that an exception is warranted and is consistent with our credit risk policies. Accounts that are granted a deferment are not classified as troubled debt restructurings. We do not consider deferments granted as a troubled debt restructuring because the customer is not experiencing an other than temporary financial difficulty, and we are not granting a concession to the customer or the concession granted is immaterial to the contractual cash flows. We pool accounts that have been granted a deferment together with accounts that have not been granted a deferment for measuring impairment in accordance with the authoritative guidance for the accounting for contingencies. The allowance for finance receivable losses related to our purchased credit impaired finance receivables is calculated using updated cash flows expected to be collected, incorporating assumptions regarding default rates, loss severities, the amounts and timing of prepayments and other factors that are reflective of current market conditions. Probable decreases in expected finance receivable cash flows result in the recognition of impairment. Probable and significant increases in expected cash flows to be collected would first reverse any previously recorded allowance for finance receivable losses. We also establish reserves for TDR finance receivables, which are included in our allowance for finance receivable losses. 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 severity rates. Finance Receivables Held for Sale Depending on market conditions or certain of management’s capital sourcing strategies, which may impact our ability and/or intent to hold our finance receivables until maturity or for the foreseeable future, we may decide to sell finance receivables originally intended for investment. Our ability to hold finance receivables for the foreseeable future is subject to a number of factors, including economic and liquidity conditions, and therefore may change. As of each reporting period, management determines our ability to hold finance receivables for the foreseeable future based on assumptions for liquidity requirements or other strategic goals. When it is probable that management’s intent or ability is to no longer hold finance receivables for the foreseeable future and we subsequently decide to sell specifically identified finance receivables that were originally classified as held for investment, the net finance receivables, less allowance for finance receivable losses, are reclassified as finance receivables held for sale and are carried at the lower of cost or fair value. Any amount by which cost exceeds fair value is accounted for as a valuation allowance and is recognized in other revenues in the consolidated statements of operations. We base the fair value estimates on negotiations with prospective purchasers (if any) or by using a discounted cash flows approach. We base cash flows on contractual payment terms adjusted for estimates of prepayments and credit related losses. Cash flows resulting from the sale of the finance receivables that were originally classified as held for investment are recorded as an investing activity in the consolidated statements of cash flows. When sold, we record the sales price we receive less our carrying value of these finance receivables held for sale in other revenues. When it is determined that management no longer intends to sell finance receivables which had previously been classified as finance receivables held for sale and we have the ability to hold the finance receivables for the foreseeable future, we reclassify the finance receivables to finance receivables held for investment at the lower of cost or fair value and we accrete any fair value adjustment over the remaining life of the related finance receivables. Reserve for Sales Recourse Obligations When we sell finance receivables, we may establish a reserve for sales recourse in other liabilities, which represents our estimate of losses to be: (a) incurred by us on the repurchase of certain finance receivables that we previously sold; and (b) incurred by us for the indemnification of losses incurred by purchasers. Certain sale contracts include provisions requiring us to repurchase a finance receivable or indemnify the purchaser for losses it sustains with respect to a finance receivable if a borrower fails to make initial loan payments to the purchaser or if the accompanying mortgage loan breaches certain customary representations and warranties. These representations and warranties are made to the purchaser with respect to various characteristics of the finance receivable, such as the manner of origination, the nature and extent of underwriting standards applied, the types of documentation being provided, and, in limited instances, reaching certain defined delinquency limits. Although the representations and warranties are typically in place for the life of the finance receivable, we believe that most repurchase requests occur within the first five years of the sale of a finance receivable. In addition, an investor may request that we refund a portion of the premium paid on the sale of mortgage loans if a loan is prepaid within a certain amount of time from the date of sale. At the time of the sale of each finance receivable (exclusive of finance receivables included in our on-balance sheet securitizations), we record a provision for recourse obligations for estimated repurchases, loss indemnification and premium recapture on finance receivables sold, which is charged to other revenues. Any subsequent adjustments resulting from changes in estimated recourse exposure are recorded in other revenues. Other Intangible Assets At the time we initially recognize intangible assets, a determination is made with regard to each asset as it relates to its useful life. We have determined that each of our intangible assets has a finite useful life with the exception of the insurance licenses and certain domain names, which we have determined to have indefinite lives. For intangible assets with a finite useful life, we review for impairment at least annually and whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Impairment is indicated if the sum of undiscounted estimated future cash flows is less than the carrying value of the respective asset. Impairment is permanently recognized by writing down the asset to the extent that the carrying value exceeds the estimated fair value. The VOBA is the PVFP of purchased insurance contracts. The PVFP is dynamically amortized over the lifetime of the block of business and is subject to premium deficiency testing in accordance with Accounting Standards Codification (“ASC”) Topic 944, Financial Services — Insurance . For indefinite lived intangible assets, 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 impaired, we proceed with the fair value calculation of the assets. The fair value is determined in accordance with our fair value measurement policy. If the fair value is less than the carrying value, an impairment loss will be recognized in an amount equal to the difference and the indefinite life classification will be evaluated to determine whether such classification remains appropriate. Insurance Premiums We recognize revenue for short-duration contracts over the related contract period. Short-duration contracts primarily include credit life, credit disability, credit involuntary unemployment insurance, and collateral protection policies. We defer single premium credit insurance premiums from affiliates in unearned premium reserves which we include as a reduction to net finance receivables. We recognize unearned premiums on credit life, credit disability, credit involuntary unemployment insurance and collateral protection insurance as revenue using the sum-of-the-digits, straight-line or other appropriate methods over the terms of the policies. Premiums from reinsurance assumed are earned over the related contract period. We recognize revenue on long-duration contracts when due from policyholders. Long-duration contracts include term life, accidental death and dismemberment, and disability income protection. For single premium long-duration contracts a liability is accrued, that represents the present value of estimated future policy benefits to be paid to or on behalf of policyholders and related expenses, when premium revenue is recognized. The effects of changes in such estimated future policy benefit reserves are classified in insurance policy benefits and claims in the consolidated statements of operations. We recognize commissions on ancillary products as other revenue when earned. We may finance certain insurance products offered to our customers as part of finance receivables. In such cases, unearned premiums and certain unpaid claim liabilities related to our borrowers are netted and classified as contra-assets in the net finance receivables in the consolidated balance sheets, and the insurance premium is included as an operating cash inflow and the financing of the insurance premium is included as part of the finance receivable as an investing cash flow in the consolidated statements of cash flows. Policy and Claim Reserves Policy reserves for credit life, credit disability, credit involuntary unemployment, and collateral protection insurance equal related unearned premiums. Reserves for losses and loss adjustment expenses are based on claims experience, actual claims reported, and estimates of claims incurred but not reported. Assumptions utilized in determining appropriate reserves are based on historical experience, adjusted to provide for possible adverse deviation. These estimates are periodically reviewed and compared with actual experience and industry standards, and revised if it is determined that future experience will differ substantially from that previously assumed. Since reserves are based on estimates, the ultimate liability may be more or less than such reserves. The effects of changes in such estimated reserves are classified in insurance policy benefits and claims in the consolidated statements of operations in the period in which the estimates are changed. We accrue liabilities for future life insurance policy benefits associated with non-credit life contracts and base the amounts on assumptions as to investment yields, mortality, and surrenders. We base annuity reserves on assumptions as to investment yields and mortality. Ceded insurance reserves are included in other assets and include estimates of the amounts expected to be recovered from reinsurers on insurance claims and policyholder liabilities. Insurance Policy Acquisition Costs We defer insurance policy acquisition costs (primarily commissions, reinsurance fees, and premium taxes). We include deferred policy acquisition costs in other assets and amortize these costs over the terms of the related policies, whether directly written or reinsured. Investment Securities We generally classify our investment securities as available-for-sale or trading and other, depending on management’s intent. Our investment securities classified as available-for-sale are recorded at fair value. We adjust related balance sheet accounts to reflect the current fair value of investment securities and record the adjustment, net of tax, in accumulated other comprehensive income or loss in shareholder’s equity. We record interest receivable on investment securities in other assets. Under the fair value option, we may elect to measure at fair value, financial assets that are not otherwise required to be carried at fair value. We elect the fair value option for available-for-sale securities that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value the derivative. We recognize any changes in fair value in investment revenues. We classify our investment securities in the fair value hierarchy framework based on the observability of inputs. Inputs to the valuation techniques are described as being either observable (Level 1 or 2) or unobservable (Level 3) assumptions (as further described in “Fair Value Measurements” below) that market participants would use in pricing an asset or liability. Impairments on Investment Securities Available-for-sale. We evaluate our available-for-sale securities on an individual basis to identify any instances where the fair value of the investment security is below its amortized cost. For these securities, we then evaluate whether an other-than-temporary impairment exists if any of the following conditions are present: • we intend to sell the security; • it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; or • we do not expect to recover the security’s entire amortized cost basis (even if we do not intend to sell the security). If we intend to sell an impaired investment security or we will likely be required to sell the security before recovery of its amortized cost basis less any current period credit loss, we recognize an other-than-temporary impairment in investment revenues equal to the difference between the investment security’s amortized cost and its fair value at the balance sheet date. In determining whether a credit loss exists, we compare our best estimate of the present value of the cash flows expected to be collected from the security to the amortized cost basis of the security. Any shortfall in this comparison represents a credit loss. The cash flows expected to be collected are determined by assessing all available information, including length and severity of unrealized loss, issuer default rate, ratings changes and adverse conditions related to the industry sector, financial condition of issuer, credit enhancements, collateral default rates, and other relevant criteria. Management considers factors such as our investment strategy, liquidity requirements, overall business plans, and recovery periods for securities in previous periods of broad market declines. If a credit loss exists with respect to an investment in a security (i.e., we do not expect to recover the entire amortized cost basis of the security), we would be unable to assert that we will recover our amortized cost basis even if we do not intend to sell the security. Therefore, in these situations, an other-than-temporary impairment is considered to have occurred. If a credit loss exists, but we do not intend to sell the sec |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Investments In March of 2016, the FASB issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting, which eliminates the requirement that, when an investment qualifies for use of the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method of accounting had been in effect during all previous periods that the investment had been held. The ASU requires that an entity that has available-for-sale securities recognize, through earnings, the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method of accounting. The amendment in this ASU became effective prospectively for the Company for fiscal periods beginning January 1, 2017. We have adopted this ASU as of January 1, 2017 and concluded that it does not have an impact on our consolidated financial statements. Statement of Cash Flows In November of 2016, the FASB issued ASU 2016-18, Statement of Cash Flows , which simplifies the presentation of restricted cash on the statement of cash flows by requiring entities to include restricted cash and restricted cash equivalents in the reconciliation of cash and cash equivalents. The amendments in this ASU become effective for the Company for fiscal years beginning January 1, 2018. We elected to early adopt this ASU as of January 1, 2017 and presented this change on a retrospective basis for all periods presented. We concluded that this ASU does not have a material impact on our consolidated financial statements. Technical Corrections and Improvements In January of 2017, the FASB issued ASU 2017-03, Accounting Changes and Error Corrections , to enhance the footnote disclosure guidelines for ASUs 2014-09, 2016-02, and 2016-13. The amendments to this transition guidance became effective for the Company for fiscal years beginning January 1, 2017. We have adopted this ASU as of January 1, 2017 on a prospective basis. We concluded that this ASU does not have a material impact on our consolidated financial statements. Business Combinations In January of 2017, the FASB issued ASU 2017-01, Business Combinations , to clarify the definition of a business, which establishes a process to determine when an integrated set of assets and activities can be deemed a business combination. The amendments in this ASU became effective for the Company for annual periods beginning January 1, 2018. We elected to early adopt this ASU as of April 1, 2017 on a prospective basis. We concluded that the adoption of this ASU does not have a material impact on our consolidated financial statements. ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED Revenue Recognition In May of 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides a consistent revenue accounting model across industries. Management has reviewed this update and other ASU’s that were subsequently issued to further clarify the implementation guidance outlined in ASU 2014-09. The Company will adopt this ASU effective January 1, 2018. The Company’s implementation efforts included the identification of revenue streams that are within the scope of the new guidance and the review of related contracts with customers to determine their effect on certain non-interest income items presented in our consolidated statements of operations and the additional presentation disclosures required. We concluded that substantially all of the Company’s revenues are generated from activities that are outside the scope of this ASU, and the adoption will not have a material impact on our consolidated financial statements. Financial Instruments In January of 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which simplifies the impairment assessment of equity investments. The update requires equity investments to be measured at fair value with changes recognized in net income. This ASU eliminates the requirement to disclose the methods and assumptions to estimate fair value for financial instruments, requires the use of the exit price for disclosure purposes, requires the change in liability due to a change in credit risk to be presented in other comprehensive income, requires separate presentation of financial assets and liabilities by measurement category and form of asset (securities and loans), and clarifies the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. The amendments in this ASU become effective for fiscal periods beginning January 1, 2018 using a cumulative-effect adjustment to the balance sheet. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) shall be applied prospectively to equity investments that exist as of the date of adoption of this update. We concluded the adoption of this ASU will not have a material impact on our consolidated financial statements. In March of 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs , which amends the amortization period for certain purchased callable debt securities held at a premium. This ASU shortens the amortization period for the premium from the adjustment of yield over the contractual life of the instrument to the earliest call date. The amendments in this ASU become effective for the Company for fiscal years beginning January 1, 2019. We believe the adoption of this ASU will not have a material impact on our consolidated financial statements. Leases In February of 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to recognize a right-of-use asset and a liability for the obligation to make payments on leases with terms greater than 12 months and to disclose information related to the amount, timing and uncertainty of cash flows arising from leases, including various qualitative and quantitative requirements. The amendments in this ASU become effective for the Company for fiscal periods beginning January 1, 2019. The Company’s cross-functional implementation team has developed a project plan to ensure we comply with all updates from this ASU at the time of adoption. We are currently in the process of importing all identified leases into a new leasing system that will allow us to better account for the leases in accordance with the new guidance. We are assessing new system updates to ensure both qualitative and quantitative data requirements will be met at the time of adoption. The Company’s leases primarily consist of leased office space, automobiles and information technology equipment. At December 31, 2017, the Company had $43 million of minimum lease commitments from these operating leases (refer to Note 19). We believe the adoption of this ASU will have a material effect on our consolidated financial statements, and we are in the process of quantifying the expected impact. Allowance for Finance Receivables Losses In June of 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, w hich significantly changes the way that entities will be required to measure credit losses. The new standard requires that the estimated credit loss be based upon an “expected credit loss” approach rather than the “incurred loss” approach currently required. The new approach will require entities to measure all expected credit losses for financial assets based on historical experience, current conditions, and reasonable forecasts of collectability. It is anticipated that the expected credit loss model will require earlier recognition of credit losses than the incurred loss approach. The ASU requires that credit losses for purchased financial assets with a more-than-insignificant amount of credit deterioration since origination that are measured at amortized cost basis be determined in a similar manner to other financial assets measured at amortized cost basis; however, the initial allowance for credit losses is added to the purchase price of the financial asset rather than being reported as a credit loss expense. Subsequent changes in the allowance for credit losses are recorded in earnings. Interest income should be recognized based on the effective rate, excluding the discount embedded in the purchase price attributable to expected credit losses at acquisition. The ASU also requires companies to record allowances for held-to-maturity and available-for-sale debt securities rather than write-downs of such assets. In addition, the ASU requires qualitative and quantitative disclosures that provide information about the allowance and the significant factors that influenced management’s estimate of the allowance. The ASU will become effective for the Company for fiscal years beginning January 1, 2020. Early adoption is permitted for fiscal years beginning January 1, 2019. The Company’s cross-functional implementation team has developed a project plan to ensure we comply with all updates from this ASU at the time of adoption. We continue to make progress in developing an acceptable model to estimate the expected credit losses. After the model has been reviewed and validated in accordance with our governance policies, the Company will provide further disclosure regarding the estimated impact on our allowance for finance receivables losses. In addition to the development of the model, we are assessing the additional disclosure requirements from this update. We believe the adoption of this ASU will have a material effect on our consolidated financial statements, and we are in the process of quantifying the expected impacts. Statement of Cash Flows In August of 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments , which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU will become effective for the Company for fiscal years beginning January 1, 2018. We concluded the adoption of this ASU will not have a material impact on our consolidated financial statements. Income Taxes In October of 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory , which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this ASU will become effective for the Company for annual reporting periods beginning January 1, 2018. We concluded the adoption of this ASU will not have a material impact on our consolidated financial statements. Compensation and Benefits In March of 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , to improve the presentation of the net periodic pension cost and net periodic postretirement benefit costs. It requires that a company present the service cost component separately from other components of net benefit cost on the income statement. The amendments in this ASU become effective for the Company for fiscal periods beginning January 1, 2018. We concluded the adoption of this ASU will not have a material impact on our consolidated financial statements. In May of 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting , which provides guidance on which changes to the terms or conditions of a share-based payment award requires an entity to apply modification accounting. The amendments in this ASU become effective for the Company for annual periods beginning January 1, 2018. We concluded the adoption of this ASU will not have a material impact on our consolidated financial statements. We do not believe that any other accounting pronouncements issued during 2017, but not yet effective, would have a material impact on our consolidated financial statements or disclosures, if adopted. |
Finance Receivables
Finance Receivables | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Finance Receivables | Finance Receivables Our finance receivable types include personal loans, real estate loans, and retail sales finance as defined below: • Personal loans — are secured by consumer goods, automobiles, or other personal property or are unsecured, typically non-revolving with a fixed-rate and a fixed, original term of three to six years . At December 31, 2017 , we had approximately 920,000 personal loans representing $5.3 billion of net finance receivables, compared to 928,000 personal loans totaling $4.8 billion at December 31, 2016 . • Real estate loans — are secured by first or second mortgages on residential real estate, generally have maximum original terms of 360 months , and are considered non-conforming. Real estate loans may be closed-end accounts or open-end home equity lines of credit and are primarily fixed-rate products. In 2012, we ceased originating real estate loans and the portfolio is in a liquidating status. • Retail sales finance — include retail sales contracts and revolving retail accounts. Retail sales contracts are closed-end accounts that represent a single purchase transaction, are secured by the personal property designated in the contract and generally have maximum original terms of 60 months . Revolving retail accounts are open-end accounts that can be used for financing repeated purchases from the same merchant, are secured by the goods purchased and generally require minimum monthly payments based on the amount financed calculated after the most recent purchase or outstanding balances. Our retail sales finance portfolio is in a liquidating status. Components of net finance receivables held for investment by type were as follows: (dollars in millions) Personal Loans Real Estate Loans Retail Sales Finance Total December 31, 2017 Gross receivables * $ 5,858 $ 127 $ 7 $ 5,992 Unearned finance charges and points and fees (676 ) — (1 ) (677 ) Accrued finance charges 78 1 — 79 Deferred origination costs 48 — — 48 Total $ 5,308 $ 128 $ 6 $ 5,442 December 31, 2016 Gross receivables * $ 5,449 $ 142 $ 12 $ 5,603 Unearned finance charges and points and fees (754 ) 1 (1 ) (754 ) Accrued finance charges 63 1 — 64 Deferred origination costs 46 — — 46 Total $ 4,804 $ 144 $ 11 $ 4,959 * Gross receivables are defined as follows: • Finance receivables purchased as a performing receivable — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts. Additionally, the remaining unearned premium, net of discount established at the time of purchase, is included in both interest bearing and precompute accounts to reflect the finance receivable balance at its initial fair value; • Finance receivables originated subsequent to the Fortress Acquisition — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; • Purchased credit impaired finance receivables — gross finance receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts; and • TDR finance receivables —gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts. Additionally, the remaining unearned premium, net of discount established at the time of purchase, is included in both interest bearing and precompute accounts previously purchased as a performing receivable. At December 31, 2017 and 2016 , unused lines of credit extended to customers by the Company were immaterial. GEOGRAPHIC DIVERSIFICATION Geographic diversification of finance receivables reduces the concentration of credit risk associated with economic stresses in any one region. The largest concentrations of net finance receivables were as follows: December 31, 2017 2016 * (dollars in millions) Amount Percent Amount Percent Illinois $ 481 9 % $ 400 8 % Indiana 428 8 360 7 North Carolina 426 8 398 8 California 323 6 298 6 Georgia 304 6 276 6 Florida 301 6 254 5 Texas 295 5 288 6 Ohio 294 5 266 5 Virginia 284 5 266 5 South Carolina 275 5 254 5 Pennsylvania 252 5 255 5 Other 1,779 32 1,644 34 Total $ 5,442 100 % $ 4,959 100 % * December 31, 2016 concentrations of net finance receivables are presented in the order of December 31, 2017 state concentrations. CREDIT QUALITY INDICATOR We consider the delinquency status of our finance receivables as our primary credit quality indicator. We monitor delinquency trends to manage our exposure to credit risk. When finance receivables are contractually 60 days past due, we consider them delinquent and transfer collection of these accounts to our centralized operations, as these accounts are considered to be at increased risk for loss. At 90 days or more past due, we consider our finance receivables to be nonperforming. The following is a summary of net finance receivables held for investment by type and by number of days delinquent: (dollars in millions) Personal Loans Real Estate Loans Retail Sales Finance Total December 31, 2017 Performing: Current $ 5,063 $ 98 $ 6 $ 5,167 30-59 days past due 75 8 — 83 60-89 days past due 55 3 — 58 Total performing 5,193 109 6 5,308 Nonperforming: 90-179 days past due 112 4 — 116 180 days or more past due 3 15 — 18 Total nonperforming 115 19 — 134 Total $ 5,308 $ 128 $ 6 $ 5,442 December 31, 2016 Performing: Current $ 4,579 $ 102 $ 11 $ 4,692 30-59 days past due 64 9 — 73 60-89 days past due 45 4 — 49 Total performing 4,688 115 11 4,814 Nonperforming: 90-179 days past due 112 8 — 120 180 days or more past due 4 21 — 25 Total nonperforming 116 29 — 145 Total $ 4,804 $ 144 $ 11 $ 4,959 We accrue finance charges on revolving retail finance receivables up to the date of charge-off at 180 days past due. Our revolving retail finance receivables that were more than 90 days past due and still accruing finance charges at December 31, 2017 and at December 31, 2016 were immaterial. PURCHASED CREDIT IMPAIRED FINANCE RECEIVABLES Our purchased credit impaired finance receivables consist of receivables purchased in connection with the Fortress Acquisition. Prior to March 31, 2016, our purchased credit impaired finance receivables also included the SpringCastle Portfolio, which was purchased in connection with the joint venture acquisition of the SpringCastle Portfolio. On March 31, 2016, we sold our interest in the SpringCastle Portfolio in connection with the SpringCastle Interests Sale. We report the carrying amount (which initially was the fair value) of our purchased credit impaired finance receivables in net finance receivables, less allowance for finance receivable losses or in finance receivables held for sale as discussed below. At December 31, 2017 and 2016 , finance receivables held for sale totaled $132 million and $ 153 million , respectively, which include purchased credit impaired finance receivables, as well as TDR finance receivables. Therefore, we are presenting the financial information for our purchased credit impaired finance receivables and TDR finance receivables combined for finance receivables held for investment and finance receivables held for sale in the tables below. See Note 7 for further information on our finance receivables held for sale. Information regarding our purchased credit impaired FA Loans held for investment and held for sale were as follows: (dollars in millions) December 31, 2017 2016 FA Loans (a) Carrying amount, net of allowance $ 57 $ 70 Outstanding balance (b) 94 107 Allowance for purchased credit impaired finance receivable losses 9 8 (a) Purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) December 31, 2017 2016 Carrying amount $ 44 $ 54 Outstanding balance 72 83 (b) Outstanding balance is defined as UPB of the loans with a net carrying amount. The allowance for purchased credit impaired finance receivable losses at December 31, 2017 and 2016 , reflected the carrying value of the purchased credit impaired loans held for investment being higher than the present value of the expected cash flows. Changes in accretable yield for purchased credit impaired finance receivables held for investment and held for sale were as follows: (dollars in millions) SCP Loans FA Loans Total Year Ended December 31, 2017 Balance at beginning of period $ — $ 60 $ 60 Accretion (a) — (5 ) (5 ) Reclassifications to nonaccretable difference (b) — (2 ) (2 ) Balance at end of period $ — $ 53 $ 53 Year Ended December 31, 2016 Balance at beginning of period $ 375 $ 66 $ 441 Accretion (a) (16 ) (7 ) (23 ) Reclassifications from nonaccretable difference (b) — 12 12 Transfers due to finance receivables sold (359 ) (11 ) (370 ) Balance at end of period $ — $ 60 $ 60 Year Ended December 31, 2015 Balance at beginning of period $ 452 $ 54 $ 506 Accretion (a) (77 ) (8 ) (85 ) Reclassifications from nonaccretable difference (b) — 20 20 Balance at end of period $ 375 $ 66 $ 441 (a) Accretion on our purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Accretion $ 4 $ 5 $ 6 (b) Reclassifications from (to) nonaccretable difference represents the increases (decreases) in accretable yield resulting from higher (lower) estimated undiscounted cash flows. TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES Information regarding TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans Real Estate Total December 31, 2017 TDR gross finance receivables $ 112 $ 139 $ 251 TDR net finance receivables 111 140 251 Allowance for TDR finance receivable losses 44 12 56 December 31, 2016 TDR gross finance receivables $ 47 $ 133 $ 180 TDR net finance receivables 47 134 181 Allowance for TDR finance receivable losses 20 11 31 (a) TDR real estate loans held for sale included in the table above were as follows: (dollars in millions) December 31, 2017 2016 TDR gross finance receivables $ 90 $ 89 TDR net finance receivables 91 90 (b) As defined earlier in this Note. As of December 31, 2017 , we had no commitments to lend additional funds on our TDR finance receivables. TDR average net receivables held for investment and held for sale and finance charges recognized on TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total Year Ended December 31, 2017 TDR average net receivables $ 79 $ — $ 140 $ 219 TDR finance charges recognized 8 — 9 17 Year Ended December 31, 2016 TDR average net receivables $ 36 $ — $ 175 $ 211 TDR finance charges recognized 3 — 11 14 Year Ended December 31, 2015 TDR average net receivables $ 29 $ 12 $ 198 $ 239 TDR finance charges recognized 3 1 11 15 (a) TDR personal loans held for sale included in the table above were immaterial. (b) TDR real estate loans held for sale included in the table above were as follows: (dollars in millions) Real Estate Year Ended December 31, 2017 TDR average net receivables $ 91 TDR finance charges recognized 6 Year Ended December 31, 2016 TDR average net receivables $ 102 TDR finance charges recognized 6 Year Ended December 31, 2015 TDR average net receivables $ 91 TDR finance charges recognized 5 Information regarding the new volume of the TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total Year Ended December 31, 2017 Pre-modification TDR net finance receivables $ 124 $ — $ 16 $ 140 Post-modification TDR net finance receivables: Rate reduction $ 93 $ — $ 16 $ 109 Other (c) 30 — — 30 Total post-modification TDR net finance receivables $ 123 $ — $ 16 $ 139 Number of TDR accounts 22,500 — 510 23,010 Year Ended December 31, 2016 Pre-modification TDR net finance receivables $ 49 $ 1 $ 16 $ 66 Post-modification TDR net finance receivables: Rate reduction $ 31 $ 1 $ 16 $ 48 Other (c) 12 — 1 13 Total post-modification TDR net finance receivables $ 43 $ 1 $ 17 $ 61 Number of TDR accounts 9,517 157 364 10,038 Year Ended December 31, 2015 Pre-modification TDR net finance receivables $ 33 $ 7 $ 21 $ 61 Post-modification TDR net finance receivables: Rate reduction $ 15 $ 6 $ 17 $ 38 Other (c) 12 — 5 17 Total post-modification TDR net finance receivables $ 27 $ 6 $ 22 $ 55 Number of TDR accounts 6,515 721 385 7,621 (a) TDR personal loans held for sale included in the table above were immaterial. (b) TDR real estate loans held for sale included in the table above were as follows: (dollars in millions) Real Estate Loans Year Ended December 31, 2017 Pre-modification TDR net finance receivables $ 6 Post-modification TDR net finance receivables $ 7 Number of TDR accounts 232 Year Ended December 31, 2016 Pre-modification TDR net finance receivables $ 5 Post-modification TDR net finance receivables $ 5 Number of TDR accounts 122 Year Ended December 31, 2015 Pre-modification TDR net finance receivables $ 6 Post-modification TDR net finance receivables $ 7 Number of TDR accounts 113 (c) “Other” modifications primarily include forgiveness of principal or interest. Net finance receivables held for investment and held for sale that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause the TDR finance receivables to be considered nonperforming ( 90 days or more past due) were as follows: (dollars in millions) Personal Loans SpringCastle Portfolio Real Estate Total Year Ended December 31, 2017 TDR net finance receivables (b) $ 37 $ — $ 4 $ 41 Number of TDR accounts 8,113 — 101 8,214 Year Ended December 31, 2016 TDR net finance receivables (b) (c) $ 6 $ — $ 3 $ 9 Number of TDR accounts 1,409 19 61 1,489 Year Ended December 31, 2015 TDR net finance receivables (b) $ 5 $ 2 $ 3 $ 10 Number of TDR accounts 1,221 147 46 1,414 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Real Estate Year Ended December 31, 2017 TDR net finance receivables $ 2 Number of TDR accounts 53 Year Ended December 31, 2016 TDR net finance receivables $ 2 Number of TDR accounts 30 Year Ended December 31, 2015 TDR net finance receivables $ 1 Number of TDR accounts 17 (b) Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. (c) TDR SpringCastle Portfolio loans for the year ended December 31, 2016 that defaulted during the previous 12-month period were less than $1 million and, therefore, are not quantified in the combined table above. |
Allowance for Finance Receivabl
Allowance for Finance Receivable Losses | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Allowance for Finance Receivable Losses | Allowance for Finance Receivable Losses Changes in the allowance for finance receivable losses by finance receivable type were as follows: (dollars in millions) Personal Loans SpringCastle Portfolio Real Estate Loans Retail Sales Finance Consolidated Total Year Ended December 31, 2017 Balance at beginning of period $ 184 $ — $ 19 $ 1 $ 204 Provision for finance receivable losses 318 — 6 — 324 Charge-offs (347 ) — (5 ) (1 ) (353 ) Recoveries 61 — 3 1 65 Balance at end of period $ 216 $ — $ 23 $ 1 $ 240 Year Ended December 31, 2016 Balance at beginning of period $ 173 $ 4 $ 46 $ 1 $ 224 Provision for finance receivable losses 306 14 9 — 329 Charge-offs (340 ) (17 ) (11 ) (1 ) (369 ) Recoveries 45 3 5 1 54 Other (a) — (4 ) (30 ) — (34 ) Balance at end of period $ 184 $ — $ 19 $ 1 $ 204 Year Ended December 31, 2015 Balance at beginning of period $ 130 $ 3 $ 46 $ 1 $ 180 Provision for finance receivable losses 257 67 13 2 339 Charge-offs (250 ) (78 ) (18 ) (3 ) (349 ) Recoveries 37 12 5 1 55 Other (b) (1 ) — — — (1 ) Balance at end of period $ 173 $ 4 $ 46 $ 1 $ 224 (a) Other consists of: • the elimination of allowance for finance receivable losses due to the sale of the SpringCastle Portfolio on March 31, 2016, in connection with the sale of our equity interest in the SpringCastle Joint Venture; and • the elimination of allowance for finance receivable losses due to the transfers of real estate loans held for investment to finance receivable held for sale during 2016. (b) Other consists of the elimination of allowance for finance receivable losses due to the transfer of personal loans held for investment to finance receivable held for sale during 2015. The allowance for finance receivable losses and net finance receivables by type and by impairment method were as follows: (dollars in millions) Personal Loans Real Estate Loans Retail Sales Finance Total December 31, 2017 Allowance for finance receivable losses: Collectively evaluated for impairment $ 172 $ 2 $ 1 $ 175 Purchased credit impaired finance receivables — 9 — 9 TDR finance receivables 44 12 — 56 Total $ 216 $ 23 $ 1 $ 240 Finance receivables: Collectively evaluated for impairment $ 5,197 $ 57 $ 6 $ 5,260 Purchased credit impaired finance receivables — 22 — 22 TDR finance receivables 111 49 — 160 Total $ 5,308 $ 128 $ 6 $ 5,442 Allowance for finance receivable losses as a percentage of finance receivables 4.06 % 18.66 % 9.91 % 4.41 % December 31, 2016 Allowance for finance receivable losses: Collectively evaluated for impairment $ 164 $ — $ 1 $ 165 Purchased credit impaired finance receivables — 8 — 8 TDR finance receivables 20 11 — 31 Total $ 184 $ 19 $ 1 $ 204 Finance receivables: Collectively evaluated for impairment $ 4,757 $ 76 $ 11 $ 4,844 Purchased credit impaired finance receivables — 24 — 24 TDR finance receivables 47 44 — 91 Total $ 4,804 $ 144 $ 11 $ 4,959 Allowance for finance receivable losses as a percentage of finance receivables 3.84 % 13.31 % 4.42 % 4.12 % See Note 3 for additional information on the determination of the allowance for finance receivable losses. |
Finance Receivables Held for Sa
Finance Receivables Held for Sale | 12 Months Ended |
Dec. 31, 2017 | |
Receivables Held-for-sale [Abstract] | |
Finance Receivables Held for Sale | Finance Receivables Held for Sale We report finance receivables held for sale of $132 million at December 31, 2017 and $153 million at December 31, 2016 , which are carried at the lower of cost or fair value and consist entirely of real estate loans. At December 31, 2017 and 2016 , the fair value of our finance receivables held for sale exceeded the cost. We used the aggregate basis to determine the lower of cost or fair value of finance receivables held for sale. See Note 3 for more information regarding our accounting policy for finance receivables held for sale. SPRINGCASTLE PORTFOLIO During March of 2016, we transferred $1.6 billion of loans of the SpringCastle Portfolio from held for investment to held for sale and simultaneously sold our interests in these finance receivables held for sale on March 31, 2016 in the SpringCastle Interests Sale and recorded a net gain in other revenues at the time of sale of $167 million . PERSONAL LOANS During 2015, we transferred $ 608 million of personal loans from held for investment to held for sale. On May 2, 2016, we sold personal loans held for sale with a carrying value of $602 million and recorded a net gain in other revenues at the time of sale of $22 million . REAL ESTATE LOANS On November 30, 2016, we transferred $50 million of real estate loans from held for investment to held for sale. In connection with the December 2016 Real Estate Loan Sale, we sold a portfolio of first and second lien mortgage loans with a carrying value of $58 million and recorded a net loss in other revenues of less than $1 million . On June 30, 2016, we transferred $257 million of real estate loans from held for investment to held for sale. In connection with the August 2016 Real Estate Loan Sale, we sold a portfolio of second lien mortgage loans with a carrying value of $250 million and recorded a net loss in other revenues of $4 million . We did not have any other material transfer activity to or from finance receivables held for sale during 2017 , 2016 or 2015 . |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities AVAILABLE-FOR-SALE SECURITIES Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type were as follows: (dollars in millions) Cost/ Amortized Cost Unrealized Gains Unrealized Losses Fair Value December 31, 2017 Fixed maturity available-for-sale securities: Bonds U.S. government and government sponsored entities $ 17 $ — $ — $ 17 Obligations of states, municipalities, and political subdivisions 70 — — 70 Non-U.S. government and government sponsored entities 4 — — 4 Corporate debt 322 4 (2 ) 324 Mortgage-backed, asset-backed, and collateralized: RMBS 35 — — 35 CMBS 23 — — 23 CDO/ABS 53 — — 53 Total bonds 524 4 (2 ) 526 Preferred stock (a) 6 — (1 ) 5 Other long-term investments 1 — — 1 Total (b) $ 531 $ 4 $ (3 ) $ 532 December 31, 2016 Fixed maturity available-for-sale securities: Bonds U.S. government and government sponsored entities $ 13 $ — $ — $ 13 Obligations of states, municipalities, and political subdivisions 83 — (1 ) 82 Non-U.S. government and government sponsored entities 5 — — 5 Corporate debt 356 2 (5 ) 353 Mortgage-backed, asset-backed, and collateralized: RMBS 39 — — 39 CMBS 33 — — 33 CDO/ABS 46 — — 46 Total bonds 575 2 (6 ) 571 Preferred stock (a) 6 — — 6 Other long-term investments 1 — — 1 Total (b) $ 582 $ 2 $ (6 ) $ 578 (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. (b) Excludes an immaterial interest in a limited partnership that we account for using the equity method and FHLB common stock of $1 million at December 31, 2017 and 2016 , which is classified as a restricted investment and carried at cost. Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position were as follows: Less Than 12 Months 12 Months or Longer Total (dollars in millions) Fair Value Unrealized Losses * Fair Value Unrealized Losses * Fair Value Unrealized Losses December 31, 2017 Bonds: U.S. government and government sponsored entities $ 13 $ — $ 1 $ — $ 14 $ — Obligations of states, municipalities, and political subdivisions 35 — 12 — 47 — Corporate debt 120 (1 ) 69 (1 ) 189 (2 ) RMBS 14 — 12 — 26 — CMBS 6 — 15 — 21 — CDO/ABS 30 — 10 — 40 — Total bonds 218 (1 ) 119 (1 ) 337 (2 ) Preferred stock — — 5 (1 ) 5 (1 ) Other long-term investments 1 — — — 1 — Total $ 219 $ (1 ) $ 124 $ (2 ) $ 343 $ (3 ) December 31, 2016 Bonds: U.S. government and government sponsored entities $ 9 $ — $ — $ — $ 9 $ — Obligations of states, municipalities, and political subdivisions 57 (1 ) 2 — 59 (1 ) Non-U.S. government and government sponsored entities 3 — — — 3 — Corporate debt 171 (5 ) 5 — 176 (5 ) RMBS 33 — — — 33 — CMBS 22 — — — 22 — CDO/ABS 25 — — — 25 — Total bonds 320 (6 ) 7 — 327 (6 ) Preferred stock — — 6 — 6 — Total $ 320 $ (6 ) $ 13 $ — $ 333 $ (6 ) * Unrealized losses on certain available-for-sale securities were less than $ 1 million and, therefore, are not quantified in the table above. On a lot basis, we had 217 investment securities in an unrealized loss position at December 31, 2017 and 2016 . We do not consider the unrealized losses to be credit-related, as these unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase. Additionally, at December 31, 2017 , we had no plans to sell any investment securities with unrealized losses, and we believe it is more likely than not that we would not be required to sell such investment securities before recovery of their amortized cost. We continue to monitor unrealized loss positions for potential impairments. During 2017 , 2016 and 2015 periods, we did not recognize any other-than-temporary impairment credit losses on available-for-sale securities in investment revenues. There were no material additions or reductions in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities for the 2017 , 2016 , and 2015 periods. The proceeds of available-for-sale securities sold or redeemed and the resulting net realized gains were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Proceeds from sales and redemptions $ 283 $ 308 $ 416 Realized gains $ 7 $ 9 $ 15 Realized losses — (1 ) (1 ) Net realized gains $ 7 $ 8 $ 14 Contractual maturities of fixed-maturity available-for-sale securities at December 31, 2017 were as follows: (dollars in millions) Fair Value Amortized Cost Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: Due in 1 year or less $ 78 $ 78 Due after 1 year through 5 years 178 180 Due after 5 years through 10 years 36 36 Due after 10 years 123 119 Mortgage-backed, asset-backed, and collateralized securities 111 111 Total $ 526 $ 524 Actual maturities may differ from contractual maturities since issuers and borrowers may have the right to call or prepay obligations. We may sell investment securities before maturity for general corporate and working capital purposes and to achieve certain investment strategies. The fair value of securities on deposit with third parties totaled $8 million and $11 million at December 31, 2017 and 2016, respectively. TRADING AND OTHER SECURITIES Our trading securities were sold in the first quarter of 2016 ; other securities are those securities for which the fair value option was elected: • The fair value of fixed maturity trading and other securities totaled $3 million at December 31, 2017 and 2016, and consisted primarily of corporate debt. • Net unrealized gains (losses) on trading and other securities held at December 31, 2017 and December 31, 2016 were immaterial. Net unrealized gains were $4 million on securities held at December 31, 2015. • Net realized gains (losses) during 2017 and 2016 were immaterial. Net realized losses during 2015 were $3 million . |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2017 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Components of other assets were as follows: (dollars in millions) December 31, 2017 2016 Prepaid expenses and deferred charges $ 26 $ 38 Fixed assets, net * 25 70 Deferred tax assets 24 2 Ceded insurance reserves 20 22 Other intangible assets 15 15 Cost basis investments 11 11 Receivables from parent and affiliates 11 40 Other investments 9 30 Other 20 23 Total $ 161 $ 251 * Fixed assets were net of accumulated depreciation of $96 million at December 31, 2017 and $180 million at December 31, 2016 . The decrease in fixed assets is primarily related to the contribution of SFMC. See Note 11 for more information regarding this transaction. OTHER INTANGIBLE ASSETS The gross carrying amount and accumulated amortization, in total and by major intangible asset class were as follows: (dollars in millions) Gross Carrying Amount Accumulated Amortization Net Other Intangible Assets December 31, 2017 VOBA $ 36 $ (33 ) $ 3 Customer relationships 18 (18 ) — Licenses 12 — 12 Customer lists 9 (9 ) — Total $ 75 $ (60 ) $ 15 December 31, 2016 VOBA $ 36 $ (33 ) $ 3 Customer relationships 18 (18 ) — Licenses 12 — 12 Customer lists 9 (9 ) — Total $ 75 $ (60 ) $ 15 Amortization expense totaled less than $1 million in 2017 and 2016 , and $4 million in 2015 . The estimated aggregate amortization of other intangible assets for each of the next five years is less than $1 million . |
Transactions with Affiliates
Transactions with Affiliates | 12 Months Ended |
Dec. 31, 2017 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Transactions with Affiliates | Transactions with Affiliates SUBSERVICING AGREEMENT Nationstar subservices the real estate loans of certain of our indirect subsidiaries. Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. The subservicing fees paid to Nationstar were immaterial in 2017 , 2016 , and 2015 . INVESTMENT MANAGEMENT AGREEMENT Logan Circle provides investment management services for our investments. Logan Circle was a wholly owned subsidiary of Fortress. On September 15, 2017, Fortress sold its interest in Logan Circle to MetLife, and Logan Circle is no longer an affiliate of Fortress. Costs and fees incurred for these investment management services were immaterial in 2017 , 2016 , and 2015 . SALE OF EQUITY INTEREST IN SPRINGCASTLE JOINT VENTURE On March 31, 2016, we sold our 47% equity interest in the SpringCastle Joint Venture, which owns the SpringCastle Portfolio, to certain subsidiaries of NRZ and Blackstone. NRZ is managed by an affiliate of Fortress. See Note 2 for more information regarding this transaction. Related Party Transactions AFFILIATE LENDING Notes Receivable from Parent and Affiliates Note Receivable from SFI. SFC’s note receivable from SFI is payable in full on May 31, 2022, and SFC may demand payment at any time prior to May 31, 2022; however, SFC does not anticipate the need for additional liquidity during 2018 and does not expect to demand payment from SFI in 2018 . The note receivable from SFI totaled $387 million at December 31, 2017 and $285 million at December 31, 2016 . The interest rate for the UPB is the lender’s cost of funds rate, which was 5.87% at December 31, 2017 . Interest revenue on the note receivable from SFI totaled $23 million during 2017 , $19 million during 2016 , and $15 million during 2015 , which we report in interest income on notes receivable from parent and affiliates. Independence Demand Note. On November 12, 2015, in connection with the closing of the OneMain Acquisition, CSI, SFC’s wholly owned subsidiary, entered into the Independence Demand Note, whereby CSI agreed to make advances to Independence from time to time, with an aggregate amount outstanding not to exceed $ 3.55 billion . On November 12, 2015, Independence borrowed $3.4 billion under the Independence Demand Note. Under the Independence Demand Note, Independence was required to use the proceeds of any advance to either fund a portion of the purchase price for the OneMain Acquisition or for general corporate purposes. The note is payable in full on December 31, 2019, and CSI may demand payment at any time prior to December 31, 2019. Independence can repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate. On July 19, 2016, CSI, Independence, and OMFH entered into the Note Assignment pursuant to which CSI sold and assigned to OMFH, and OMFH purchased and assumed from CSI, an interest in and to CSI’s right to receive $150 million principal amount outstanding under the Independence Demand Note for a purchase price of $150 million . On July 20, 2016, OMFH paid the $150 million purchase price to CSI. Cash Services Note. In connection with the Note Assignment discussed above, Independence exchanged the Independence Demand Note for (i) the Cash Services Note issued to CSI with a maximum borrowing amount not to exceed $3.4 billion and (ii) the OMFH Note issued to OMFH with a maximum borrowing amount not to exceed $150 million . The Cash Services Note and the OMFH Note provide that no advances shall be made to Independence on or after December 31, 2019 and all principal and interest shall be payable in full on December 31, 2019, unless earlier payment is demanded by CSI or OMFH. The interest rate for the UPB is the lender’s cost of funds rate, which was 5.87% at December 31, 2017 . At December 31, 2017 and December 31, 2016 , the note receivable from Independence relating to the Cash Services Note totaled $2.9 billion , which included compounded interest due to CSI. Interest revenue on the note receivable from Independence relating to the Cash Services Note totaled $173 million during 2017 , $185 million during 2016 , and $27 million during 2015 , which we report in interest income on notes receivable from parent and affiliates. OneMain Demand Note. On November 15, 2015, in connection with the closing of the OneMain Acquisition, SFC entered into the OneMain Demand Note with OMFH, whereby SFC agreed to make advances to OMFH from time to time, with an aggregate amount outstanding not to exceed $ 500 million . Under the OneMain Demand Note, OMFH is required to use the proceeds of any advance either (i) exclusively to finance the purchase, origination, pooling, funding or carrying of receivables by OMFH or any of its restricted subsidiaries or (ii) for general corporate purposes. The note is payable in full on December 31, 2024, and SFC may demand payment with five days prior notice. OMFH may repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate. SFC has, from time to time, amended the note to increase the maximum amount that may be advanced to OMFH. At December 31, 2017 , the maximum amount that may be advanced totaled $1.6 billion . At December 31, 2017 and 2016, the note receivable from OMFH totaled $1.2 billion and $530 million , respectively, which included compounded interest due to SFC. Interest revenue on the note receivable from OMFH totaled $59 million and $10 million for 2017 and 2016, respectively, which we report in interest income on notes receivable from parent and affiliates. Note Payable to Affiliate On December 1, 2015, in connection with the closing of the OneMain Acquisition, OMFH entered into a revolving demand note with SFC, whereby OMFH agreed to make advances to SFC from time to time, with an aggregate amount outstanding not to exceed $500 million . Under the note, SFC is required to use the proceeds of any advance for general corporate purposes. The note is payable in full on December 31, 2024, and OMFH may demand payment with five days prior notice. SFC may repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate. At December 31, 2017 , the maximum amount that may be advanced totaled $750 million . At December 31, 2017 and 2016 , no amounts were drawn under the note. We did no t incur interest expense on the note payable to OMFH during 2017 . Interest expense on the note payable was $7 million in 2016, which was reported in interest expense. INTERCOMPANY AGREEMENTS Dividend of SFMC to SFI On April 10, 2017, SFMC, a former subsidiary of SFC, was contributed to SFI in the form of a dividend. SFI then contributed SFMC and SGSC to OMH, SFMC merged into SGSC, which was renamed and is now OGSC. As a result of the dividend, the Company’s total shareholder equity and total assets were reduced by $38 million and $65 million , respectively, on the contribution date. The contribution was the result of the continuing integration process, and part of a series of corporate consolidation transactions surrounding the OneMain Acquisition. Agreements with OGSC OGSC, as successor to SFMC and SGSC, is a party to the following three intercompany agreements: Services Agreement. OGSC provides the following services to various affiliates under a service agreement: management and administrative services; financial, accounting, treasury, tax, and audit services; facilities support services; capital funding services; legal services; human resources services (including payroll); centralized collections and lending support services; insurance, risk management, and marketing services; and information technology services. The fees payable to OGSC are equal to 100% of the allocated cost of providing the services. We believe these allocations are reasonable among the entities receiving the services. In addition to the services noted above, OGSC assumed the services provided by SFMC, which primarily consist of providing operating staff and field management for our branches. During 2017 , 2016 , and 2015 , we recorded $292 million , $239 million , and $224 million , respectively, of service fee expenses, which are included in other operating expenses. License Agreement. As a result of the merger of SFMC and SGSC noted above, the license agreement, whereby SFMC leased its information technology systems and software and other related equipment to SGSC, was terminated. The monthly license fee payable by SGSC for its use of the information technology systems and software was 100% of the actual costs incurred by SFMC plus a 7.00% margin. The fee payable by SGSC for its use of the related equipment was 100% of the actual costs incurred by SFMC. Amounts recorded by us under this license agreement totaled $1 million in 2017 and $6 million in 2016 and 2015 , respectively, and are included as a contra expense to other operating expenses. Building Lease Agreement. In contemplation of the merger of SFMC and SGSC noted above, the building lease agreement whereby SFMC leased six of its buildings to SGSC for an annual rental amount of $4 million , plus additional rental amounts to cover other charges, was terminated effective April 5, 2017. As a result, SFMC’s rent charged to SGSC was $1 million during 2017 and $4 million during 2016 and 2015, respectively, which is included as a contra expense to other operating expenses. Agreements with OMFH and OCLI Loan Servicing Fees. In connection with the branch integration activities during the fourth quarter of 2016, SFC entered into an intercompany service agreement with OMFH relating to the servicing of loans when a legacy OneMain loan is serviced by a legacy Springleaf branch and vice versa. In exchange, a monthly servicing fee is charged based on a percentage of the outstanding principal balance of the designated loans. During 2017, SFC recorded $13 million of service fee expenses for the legacy Springleaf loans serviced by legacy OneMain branches and $15 million , of service fee income for the legacy OneMain loans serviced by legacy Springleaf branches. SFC loan servicing fee income and expense during the 2016 period were immaterial. Loan Referral Fees. OCLI provides personal loan application processing and credit underwriting services on behalf of SFC for personal loan applications that are submitted online. SFC is charged a fee of $35 for each underwritten approved application processed, as well as any other fees agreed to by the parties. During 2017 and 2016, these fees were $22 million and $16 million , respectively. Transactions with Insurance Subsidiaries SFC incurs a payable whenever it finances or collects insurance premiums on policies issued by OMFH insurance subsidiaries or when SFC insurance subsidiaries incur insurance claims on insurance policies issued on OMFH loans. Conversely, SFC records a receivable when insurance claims are incurred on policies issued by insurance subsidiaries of OMFH on SFC loans. As a result of these transactions, at December 31, 2017, SFC had a $22 million payable to and a $4 million receivable from OMFH subsidiaries. At December 31, 2016, SFC insurance subsidiaries had a receivable from OMFH lending subsidiaries of $3 million . SFC’s payable to OMFH subsidiaries at December 31, 2016 was immaterial. Loan Purchase and Sale Agreements From time to time, OCLI enters into loan purchase and sale agreements with certain subsidiaries of SFC pursuant to which OCLI sells certain personal loans and continues to service the loans. During the third quarter of 2017, OCLI entered into loan purchase and sale agreements with certain subsidiaries of SFC pursuant to which OCLI sold certain personal loans with an aggregate UPB at the time of sale of $4 million for an aggregate purchase price of $4 million . OCLI does not service these loans. During the second quarter of 2016, OCLI had sold personal loans with an aggregate UPB at the time of sale of $89 million for an aggregate purchase price of $89 million . OCLI continues to service these loans. During 2017 and 2016 , SFC recorded $2 million and $3 million , respectively, of service fee expenses for these personal loans. See Note 9 and Note 15 regarding receivables and payables from affiliates and parent. OTHER OMAS Debt Purchases As of December 31, 2017, OMAS, a subsidiary of OMFH, purchased a total of $10 million principal amount of SFC’s medium-term notes in the open market in three separate purchase transactions for an aggregate purchase price of $10 million . These notes had a carrying value of $9 million . These purchase transactions did not impact our consolidated financial statements and there are no plans for OMAS to make future purchases of SFC debt. Home and Auto Membership Plans SFC collects optional home and auto membership plan fees that are payable to subsidiaries of OMFH. SFC’s payable to OMFH subsidiaries for these fees was $2 million at December 31, 2017. The amount payable at December 31, 2016 was immaterial. Capital Contribution to SFC During 2016, SFC received a capital contribution of $10 million from SFI to satisfy an interest payment required by the Junior Subordinated Debenture. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Transactions with Affiliates SUBSERVICING AGREEMENT Nationstar subservices the real estate loans of certain of our indirect subsidiaries. Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. The subservicing fees paid to Nationstar were immaterial in 2017 , 2016 , and 2015 . INVESTMENT MANAGEMENT AGREEMENT Logan Circle provides investment management services for our investments. Logan Circle was a wholly owned subsidiary of Fortress. On September 15, 2017, Fortress sold its interest in Logan Circle to MetLife, and Logan Circle is no longer an affiliate of Fortress. Costs and fees incurred for these investment management services were immaterial in 2017 , 2016 , and 2015 . SALE OF EQUITY INTEREST IN SPRINGCASTLE JOINT VENTURE On March 31, 2016, we sold our 47% equity interest in the SpringCastle Joint Venture, which owns the SpringCastle Portfolio, to certain subsidiaries of NRZ and Blackstone. NRZ is managed by an affiliate of Fortress. See Note 2 for more information regarding this transaction. Related Party Transactions AFFILIATE LENDING Notes Receivable from Parent and Affiliates Note Receivable from SFI. SFC’s note receivable from SFI is payable in full on May 31, 2022, and SFC may demand payment at any time prior to May 31, 2022; however, SFC does not anticipate the need for additional liquidity during 2018 and does not expect to demand payment from SFI in 2018 . The note receivable from SFI totaled $387 million at December 31, 2017 and $285 million at December 31, 2016 . The interest rate for the UPB is the lender’s cost of funds rate, which was 5.87% at December 31, 2017 . Interest revenue on the note receivable from SFI totaled $23 million during 2017 , $19 million during 2016 , and $15 million during 2015 , which we report in interest income on notes receivable from parent and affiliates. Independence Demand Note. On November 12, 2015, in connection with the closing of the OneMain Acquisition, CSI, SFC’s wholly owned subsidiary, entered into the Independence Demand Note, whereby CSI agreed to make advances to Independence from time to time, with an aggregate amount outstanding not to exceed $ 3.55 billion . On November 12, 2015, Independence borrowed $3.4 billion under the Independence Demand Note. Under the Independence Demand Note, Independence was required to use the proceeds of any advance to either fund a portion of the purchase price for the OneMain Acquisition or for general corporate purposes. The note is payable in full on December 31, 2019, and CSI may demand payment at any time prior to December 31, 2019. Independence can repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate. On July 19, 2016, CSI, Independence, and OMFH entered into the Note Assignment pursuant to which CSI sold and assigned to OMFH, and OMFH purchased and assumed from CSI, an interest in and to CSI’s right to receive $150 million principal amount outstanding under the Independence Demand Note for a purchase price of $150 million . On July 20, 2016, OMFH paid the $150 million purchase price to CSI. Cash Services Note. In connection with the Note Assignment discussed above, Independence exchanged the Independence Demand Note for (i) the Cash Services Note issued to CSI with a maximum borrowing amount not to exceed $3.4 billion and (ii) the OMFH Note issued to OMFH with a maximum borrowing amount not to exceed $150 million . The Cash Services Note and the OMFH Note provide that no advances shall be made to Independence on or after December 31, 2019 and all principal and interest shall be payable in full on December 31, 2019, unless earlier payment is demanded by CSI or OMFH. The interest rate for the UPB is the lender’s cost of funds rate, which was 5.87% at December 31, 2017 . At December 31, 2017 and December 31, 2016 , the note receivable from Independence relating to the Cash Services Note totaled $2.9 billion , which included compounded interest due to CSI. Interest revenue on the note receivable from Independence relating to the Cash Services Note totaled $173 million during 2017 , $185 million during 2016 , and $27 million during 2015 , which we report in interest income on notes receivable from parent and affiliates. OneMain Demand Note. On November 15, 2015, in connection with the closing of the OneMain Acquisition, SFC entered into the OneMain Demand Note with OMFH, whereby SFC agreed to make advances to OMFH from time to time, with an aggregate amount outstanding not to exceed $ 500 million . Under the OneMain Demand Note, OMFH is required to use the proceeds of any advance either (i) exclusively to finance the purchase, origination, pooling, funding or carrying of receivables by OMFH or any of its restricted subsidiaries or (ii) for general corporate purposes. The note is payable in full on December 31, 2024, and SFC may demand payment with five days prior notice. OMFH may repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate. SFC has, from time to time, amended the note to increase the maximum amount that may be advanced to OMFH. At December 31, 2017 , the maximum amount that may be advanced totaled $1.6 billion . At December 31, 2017 and 2016, the note receivable from OMFH totaled $1.2 billion and $530 million , respectively, which included compounded interest due to SFC. Interest revenue on the note receivable from OMFH totaled $59 million and $10 million for 2017 and 2016, respectively, which we report in interest income on notes receivable from parent and affiliates. Note Payable to Affiliate On December 1, 2015, in connection with the closing of the OneMain Acquisition, OMFH entered into a revolving demand note with SFC, whereby OMFH agreed to make advances to SFC from time to time, with an aggregate amount outstanding not to exceed $500 million . Under the note, SFC is required to use the proceeds of any advance for general corporate purposes. The note is payable in full on December 31, 2024, and OMFH may demand payment with five days prior notice. SFC may repay the note in whole or in part at any time without premium or penalty. The interest rate for the UPB is the lender’s cost of funds rate. At December 31, 2017 , the maximum amount that may be advanced totaled $750 million . At December 31, 2017 and 2016 , no amounts were drawn under the note. We did no t incur interest expense on the note payable to OMFH during 2017 . Interest expense on the note payable was $7 million in 2016, which was reported in interest expense. INTERCOMPANY AGREEMENTS Dividend of SFMC to SFI On April 10, 2017, SFMC, a former subsidiary of SFC, was contributed to SFI in the form of a dividend. SFI then contributed SFMC and SGSC to OMH, SFMC merged into SGSC, which was renamed and is now OGSC. As a result of the dividend, the Company’s total shareholder equity and total assets were reduced by $38 million and $65 million , respectively, on the contribution date. The contribution was the result of the continuing integration process, and part of a series of corporate consolidation transactions surrounding the OneMain Acquisition. Agreements with OGSC OGSC, as successor to SFMC and SGSC, is a party to the following three intercompany agreements: Services Agreement. OGSC provides the following services to various affiliates under a service agreement: management and administrative services; financial, accounting, treasury, tax, and audit services; facilities support services; capital funding services; legal services; human resources services (including payroll); centralized collections and lending support services; insurance, risk management, and marketing services; and information technology services. The fees payable to OGSC are equal to 100% of the allocated cost of providing the services. We believe these allocations are reasonable among the entities receiving the services. In addition to the services noted above, OGSC assumed the services provided by SFMC, which primarily consist of providing operating staff and field management for our branches. During 2017 , 2016 , and 2015 , we recorded $292 million , $239 million , and $224 million , respectively, of service fee expenses, which are included in other operating expenses. License Agreement. As a result of the merger of SFMC and SGSC noted above, the license agreement, whereby SFMC leased its information technology systems and software and other related equipment to SGSC, was terminated. The monthly license fee payable by SGSC for its use of the information technology systems and software was 100% of the actual costs incurred by SFMC plus a 7.00% margin. The fee payable by SGSC for its use of the related equipment was 100% of the actual costs incurred by SFMC. Amounts recorded by us under this license agreement totaled $1 million in 2017 and $6 million in 2016 and 2015 , respectively, and are included as a contra expense to other operating expenses. Building Lease Agreement. In contemplation of the merger of SFMC and SGSC noted above, the building lease agreement whereby SFMC leased six of its buildings to SGSC for an annual rental amount of $4 million , plus additional rental amounts to cover other charges, was terminated effective April 5, 2017. As a result, SFMC’s rent charged to SGSC was $1 million during 2017 and $4 million during 2016 and 2015, respectively, which is included as a contra expense to other operating expenses. Agreements with OMFH and OCLI Loan Servicing Fees. In connection with the branch integration activities during the fourth quarter of 2016, SFC entered into an intercompany service agreement with OMFH relating to the servicing of loans when a legacy OneMain loan is serviced by a legacy Springleaf branch and vice versa. In exchange, a monthly servicing fee is charged based on a percentage of the outstanding principal balance of the designated loans. During 2017, SFC recorded $13 million of service fee expenses for the legacy Springleaf loans serviced by legacy OneMain branches and $15 million , of service fee income for the legacy OneMain loans serviced by legacy Springleaf branches. SFC loan servicing fee income and expense during the 2016 period were immaterial. Loan Referral Fees. OCLI provides personal loan application processing and credit underwriting services on behalf of SFC for personal loan applications that are submitted online. SFC is charged a fee of $35 for each underwritten approved application processed, as well as any other fees agreed to by the parties. During 2017 and 2016, these fees were $22 million and $16 million , respectively. Transactions with Insurance Subsidiaries SFC incurs a payable whenever it finances or collects insurance premiums on policies issued by OMFH insurance subsidiaries or when SFC insurance subsidiaries incur insurance claims on insurance policies issued on OMFH loans. Conversely, SFC records a receivable when insurance claims are incurred on policies issued by insurance subsidiaries of OMFH on SFC loans. As a result of these transactions, at December 31, 2017, SFC had a $22 million payable to and a $4 million receivable from OMFH subsidiaries. At December 31, 2016, SFC insurance subsidiaries had a receivable from OMFH lending subsidiaries of $3 million . SFC’s payable to OMFH subsidiaries at December 31, 2016 was immaterial. Loan Purchase and Sale Agreements From time to time, OCLI enters into loan purchase and sale agreements with certain subsidiaries of SFC pursuant to which OCLI sells certain personal loans and continues to service the loans. During the third quarter of 2017, OCLI entered into loan purchase and sale agreements with certain subsidiaries of SFC pursuant to which OCLI sold certain personal loans with an aggregate UPB at the time of sale of $4 million for an aggregate purchase price of $4 million . OCLI does not service these loans. During the second quarter of 2016, OCLI had sold personal loans with an aggregate UPB at the time of sale of $89 million for an aggregate purchase price of $89 million . OCLI continues to service these loans. During 2017 and 2016 , SFC recorded $2 million and $3 million , respectively, of service fee expenses for these personal loans. See Note 9 and Note 15 regarding receivables and payables from affiliates and parent. OTHER OMAS Debt Purchases As of December 31, 2017, OMAS, a subsidiary of OMFH, purchased a total of $10 million principal amount of SFC’s medium-term notes in the open market in three separate purchase transactions for an aggregate purchase price of $10 million . These notes had a carrying value of $9 million . These purchase transactions did not impact our consolidated financial statements and there are no plans for OMAS to make future purchases of SFC debt. Home and Auto Membership Plans SFC collects optional home and auto membership plan fees that are payable to subsidiaries of OMFH. SFC’s payable to OMFH subsidiaries for these fees was $2 million at December 31, 2017. The amount payable at December 31, 2016 was immaterial. Capital Contribution to SFC During 2016, SFC received a capital contribution of $10 million from SFI to satisfy an interest payment required by the Junior Subordinated Debenture. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Carrying value and fair value of long-term debt by type were as follows: December 31, 2017 December 31, 2016 (dollars in millions) Carrying Value Fair Value Carrying Value Fair Value Senior debt $ 7,693 $ 8,180 $ 6,665 $ 7,150 Junior subordinated debt 172 189 172 158 Total $ 7,865 $ 8,369 $ 6,837 $ 7,308 Weighted average effective interest rates on long-term debt by type were as follows: Years Ended December 31, At December 31, 2017 2016 2015 2017 2016 Senior debt 6.99 % 7.18 % 6.96 % 6.57 % 7.46 % Junior subordinated debt 6.41 12.26 12.26 6.37 12.26 Total 6.98 7.30 7.05 6.57 7.59 Principal maturities of long-term debt (excluding projected repayments on securitizations and revolving conduit facilities by period) by type of debt at December 31, 2017 were as follows: Senior Debt (dollars in millions) Securitizations Medium Term Notes Junior Subordinated Debt Total Interest rates (a) 2.04% - 6.50% 5.25% - 8.25% 3.11% 2018 — — — — 2019 — 700 — 700 2020 — 1,300 — 1,300 2021 — 650 — 650 2022 — 1,000 — 1,000 2023-2067 — 1,175 350 1,525 Securitizations (b) 3,052 — — 3,052 Total principal maturities $ 3,052 $ 4,825 $ 350 $ 8,227 Total carrying amount $ 3,041 $ 4,652 $ 172 $ 7,865 Debt issuance costs (c) $ (11 ) $ (30 ) $ — $ (41 ) (a) The interest rates shown are the range of contractual rates in effect at December 31, 2017 . Effective January 16, 2017, the interest rate on the UPB of the Junior Subordinated Debenture became a variable floating rate (determined quarterly) equal to 3-month LIBOR plus 1.75% , or 3.11% as of December 31, 2017 . Prior to January 16, 2017, the interest rate on the UPB of the Junior Subordinated Debenture was a fixed rate of 6.00% . (b) Securitizations have a stated maturity date but are not included in the above maturities by period due to their variable monthly repayments, which may result in pay-off prior to the stated maturity date. At December 31, 2017 , there were no amounts drawn under our revolving conduit facilities. See Note 13 for further information on our long-term debt associated with securitizations and revolving conduit facilities. (c) 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 $11 million at December 31, 2017 and are reported in other assets. SFC’s Medium-Term Note Issuances 5.625% Senior Notes Due 2023 On December 8, 2017, SFC issued $875 million aggregate principal amount of 5.625% Senior Notes due 2023 (the “ 5.625% SFC Notes”) under an Indenture dated as of December 3, 2014 (the “SFC Base Indenture”), as supplemented by a Fourth Supplemental Indenture dated as of December 8, 2017 (the “SFC Fourth Supplemental Indenture”), pursuant to which OMH provided a guarantee of the 5.625% SFC Notes on an unsecured basis. SFC used a portion of the net proceeds from the sale of the 5.625% SFC Notes to repay at maturity approximately $557 million aggregate principal amount of its existing 6.90% Medium-Term Notes. SFC intends to use the remaining net proceeds from the sale of the 5.625% SFC Notes for general corporate purposes, which may include additional debt repurchases and repayments. 6.125% Senior Notes Due 2022 On May 15, 2017, SFC issued $500 million aggregate principal amount of 6.125% Senior Notes due 2022 (the “2022 SFC Notes”) under the SFC Base Indenture, as supplemented by a Third Supplemental Indenture, dated as of May 15, 2017 (the “SFC Third Supplemental Indenture”), pursuant to which OMH provided a guarantee of the 2022 SFC Notes on an unsecured basis. On May 30, 2017, SFC issued and sold $500 million aggregate principal amount of additional 2022 SFC Notes (the “Additional SFC Notes”) in an add-on offering. The initial 2022 SFC Notes and the Additional SFC Notes (collectively, the “ 6.125% SFC Notes”), are treated as a single class of debt securities and have the same terms, other than the issue date and the issue price. SFC used a portion of the net proceeds from the sale of the Additional SFC Notes to repurchase approximately $466 million aggregate principal amount of its existing 6.90% Senior Notes due 2017 at a premium to par. SFC used the remaining net proceeds from the sale of the 6.125% SFC Notes for general corporate purposes. 8.25% Senior Notes Due 2020 On April 11, 2016, SFC issued $1.0 billion aggregate principal amount of 8.25% Senior Notes due 2020 (the “ 8.25% SFC Notes”) under the SFC Base Indenture, as supplemented by a Second Supplemental Indenture, dated as of April 11, 2016 (the “SFC Second Supplemental Indenture” and, collectively with the SFC Base Indenture and the SFC First Supplemental Indenture, the SFC Third Supplemental Indenture, and the SFC Fourth Supplemental Indenture thereto, the “Indenture”), pursuant to which OMH provided a guarantee of the 8.25% SFC notes on an unsecured basis. SFC used a portion of the proceeds from the sale of the 8.25% SFC Notes to repurchase approximately $600 million aggregate principal amount of its existing senior notes that were scheduled to mature in 2017, at a premium to principal amount from certain beneficial owners, and certain of those beneficial owners purchased new 8.25% SFC Notes in the offering. SFC used the remaining net proceeds for general corporate purposes. The 5.625% SFC Notes, 6.125% SFC Notes and 8.25% SFC Notes are SFC’s senior unsecured obligations and rank equally in right of payment to all of SFC’s other existing and future unsubordinated indebtedness from time to time outstanding. The notes are effectively subordinated to all of SFC’s secured obligations to the extent of the value of the assets securing such obligations and structurally subordinated to any existing and future obligations of SFC’s subsidiaries with respect to claims against the assets of such subsidiaries. The notes may be redeemed at any time and from time to time, at the option of SFC, in whole or in part at a “make-whole” redemption price specified in the Indenture. The notes will not have the benefit of any sinking fund. The Indenture contain covenants that, among other things, (i) limit SFC’s ability to create liens on assets and (ii) restrict SFC’s ability to consolidate, merge or sell its assets. The Indenture also provides for events of default which, if any of them were to occur, would permit or require the principal of and accrued interest on the SFC Notes to become, or to be declared, due and payable. GUARANTY AGREEMENTS 5.625% SFC Notes On December 8, 2017, OMH entered into the SFC Fourth Supplemental Indenture, pursuant to which it agreed to fully and unconditionally guarantee, on a senior unsecured basis, the payments of principal, premium (if any) and interest on the 5.625% SFC Notes. As of December 31, 2017 , $875 million aggregate principal amount of the 5.625% SFC Notes were outstanding. 6.125% SFC Notes On May 15, 2017, OMH entered into the SFC Third Supplemental Indenture, pursuant to which it agreed to fully and unconditionally guarantee, on a senior unsecured basis, the payments of principal, premium (if any) and interest on the 6.125% SFC Notes. As of December 31, 2017 , $1.0 billion aggregate principal amount of the 6.125% SFC Notes were outstanding. 8.25% SFC Notes On April 11, 2016, OMH entered into the SFC Second Supplemental Indenture, pursuant to which it agreed to fully and unconditionally guarantee, on a senior unsecured basis, the payments of principal, premium (if any) and interest on the 8.25% SFC Notes. As of December 31, 2017 , $1.0 billion aggregate principal amount of the 8.25% SFC Notes were outstanding. 5.25% SFC Notes On December 3, 2014, OMH entered into the SFC Base Indenture and the SFC First Supplemental Indenture, pursuant to which it agreed to fully and unconditionally guarantee, on a senior unsecured basis, the payments of principal, premium (if any) and interest on the 5.25% SFC Notes. As of December 31, 2017 , $700 million aggregate principal amount of the 5.25% SFC Notes were outstanding. Other SFC Notes On December 30, 2013, OMH entered into SFC Guaranty Agreements whereby it agreed to fully and unconditionally guarantee the payments of principal, premium (if any) and interest on the Other SFC Notes. The Other SFC Notes consist of the following: • 8.25% Senior Notes due 2023 • 7.75% Senior Notes due 2021 • 6.00% Senior Notes due 2020; and • the Junior Subordinated Debenture; The Junior Subordinated Debenture underlies the trust preferred securities sold by a trust sponsored by SFC. On December 30, 2013, OMH entered into the SFC Trust Guaranty Agreement whereby it agreed to fully and unconditionally guarantee the related payment obligations under the trust preferred securities. As of December 31, 2017 , approximately $1.6 billion aggregate principal amount of the Other SFC Notes were outstanding. The OMH guarantees of SFC’s long-term debt discussed above are subject to customary release provisions. DEBT COVENANTS The debt agreements to which SFC and its subsidiaries are a party include customary terms and conditions, including covenants and representations and warranties. Some or all of these agreements also contain certain restrictions, including (i) restrictions on the ability to create senior liens on property and assets in connection with any new debt financings and (ii) SFC’s ability to sell or convey all or substantially all of its assets, unless the transferee assumes SFC’s obligations under the applicable debt agreement. In addition, the OMH guarantees of SFC’s long-term debt discussed above are subject to customary release provisions. With the exception of SFC’s junior subordinated debenture, none of SFC’s debt agreements require SFC or any of its subsidiaries to meet or maintain any specific financial targets or ratios. However, certain events, including non-payment of principal or interest, bankruptcy or insolvency, or a breach of a covenant or a representation or warranty, may constitute an event of default and trigger an acceleration of payments. In some cases, an event of default or acceleration of payments under one debt agreement may constitute a cross-default under other debt agreements resulting in an acceleration of payments under the other agreements. As of December 31, 2017 , SFC was in compliance with all of the covenants under its debt agreements. Junior Subordinated Debenture In January of 2007, SFC issued the Junior Subordinated Debenture, consisting of $350 million aggregate principal amount of 60 -year junior subordinated debt. The Junior Subordinated Debenture underlies the trust preferred securities sold by a trust sponsored by SFC. SFC can redeem the Junior Subordinated Debenture at par beginning in January of 2017. Effective January 16, 2017, the interest rate on the UPB of the Junior Subordinated Debenture became a variable floating rate (determined quarterly) equal to 3-month LIBOR plus 1.75% , or 3.11% as of December 31, 2017 . Prior to January 16, 2017, the interest rate on the UPB of the Junior Subordinated Debenture was a fixed rate of 6.00% . Pursuant to the terms of the Junior Subordinated Debenture, SFC, upon the occurrence of a mandatory trigger event, is required to defer interest payments to the holders of the Junior Subordinated Debenture (and not make dividend payments to SFI) unless SFC obtains non-debt capital funding in an amount equal to all accrued and unpaid interest on the Junior Subordinated Debenture otherwise payable on the next interest payment date and pays such amount to the holders of the Junior Subordinated Debenture. A mandatory trigger event occurs if SFC’s (i) tangible equity to tangible managed assets is less than 5.5% or (ii) average fixed charge ratio is not more than 1.10 x for the trailing four quarters. Based upon SFC’s financial results for the 12 months ended December 31, 2017, a mandatory trigger event did not occur with respect to the interest payment due in January of 2018, as SFC was in compliance with both required ratios discussed above. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entities | |
Variable Interest Entities | Variable Interest Entities CONSOLIDATED VIES As part of our overall funding strategy and as part of our efforts to support our liquidity from sources other than our traditional capital market sources, we have transferred certain finance receivables to VIEs for asset-backed financing transactions, including securitization and conduit transactions. We have determined that we are the primary beneficiary of these VIEs and, as a result, we include each VIE’s assets, including any finance receivables securing the VIE’s debt obligations, and related liabilities in our consolidated financial statements and each VIE’s asset-backed debt obligations are accounted for as secured borrowings. We are deemed to be the primary beneficiary of each VIE because we have the ability to direct the activities of the VIE that most significantly impact its economic performance, including the losses it absorbs and its right to receive economic benefits that are potentially significant. Such ability arises from SFC’s and its affiliates’ contractual right to service the finance receivables securing the VIEs’ debt obligations. To the extent we retain any debt obligation or residual interest in an asset-backed financing facility, we are exposed to potentially significant losses and potentially significant returns. The asset-backed debt obligations issued by the VIEs are supported by the expected cash flows from the underlying finance receivables securing such debt obligations. Cash inflows from these finance receivables are distributed to repay the debt obligations and related service providers in accordance with each transaction’s contractual priority of payments, referred to as the “waterfall.” The holders of the asset-backed debt obligations have no recourse to the Company if the cash flows from the underlying finance receivables securing such debt obligations are not sufficient to pay all principal and interest on the asset-backed debt obligations. With respect to any asset-backed financing transaction that has multiple classes of debt obligations, substantially all cash inflows will be directed to the senior debt obligations until fully repaid and, thereafter, to the subordinate debt obligations on a sequential basis. We retain an interest and credit risk in these financing transactions through our ownership of the residual interest in each VIE and, in some cases, the most subordinate class of debt obligations issued by the VIE, which are the first to absorb credit losses on the finance receivables securing the debt obligations. In addition, with respect to each financing transaction that is subject to the risk retention requirements of Section 941 of the Dodd-Frank Act, we retain at least 5% of the balance of each class of debt obligations and at least 5% of the residual interest in each VIE which, collectively, represents 5% of the economic interest in the credit risk of the securitized assets in satisfaction of the risk retention requirements. We expect that any credit losses in the pools of finance receivables securing the asset-backed debt obligations will likely be limited to our retained interests described above. We have no obligation to repurchase or replace qualified finance receivables that subsequently become delinquent or are otherwise in default. We parenthetically disclose on our consolidated balance sheets the VIE’s assets that can only be used to settle the VIE’s obligations and liabilities if its creditors have no recourse against the primary beneficiary’s general credit. The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts were as follows: (dollars in millions) December 31, 2017 2016 Assets Cash and cash equivalents $ 2 $ 2 Finance receivables: Personal loans 3,334 2,943 Allowance for finance receivable losses 141 94 Restricted cash and restricted cash equivalents 158 211 Other assets 11 9 Liabilities Long-term debt $ 3,041 $ 2,675 Other liabilities 6 7 SECURITIZED BORROWINGS Each of our securitizations contains a revolving period ranging from one to five years during which no principal payments are required to be made on the related asset-backed notes, except for the ODART 2016-1 securitization which has no revolving period. The indentures governing our securitization borrowings contain early amortization events and events of default, that, if triggered, may result in the acceleration of the obligation to pay principal and interest on the related asset-backed notes. Our securitized borrowings at December 31, 2017 consisted of the following: (dollars in millions) Issue Amount * Current Current Weighted Average Interest Rate Original Revolving Period Issue Date Maturity Date Consumer Securitizations: SLFT 2015-A $ 1,163 $ 1,163 3.47 % 3 years 02/26/2015 11/2024 SLFT 2015-B 314 314 3.78 % 5 years 04/07/2015 05/2028 SLFT 2016-A (a) 532 500 3.10 % 2 years 12/14/2016 11/2029 SLFT 2017-A (b) 652 619 2.98 % 3 years 06/28/2017 07/2030 Total consumer securitizations 2,596 Auto Securitization: ODART 2016-1 (c) 754 188 2.91 % — 07/19/2016 Various ODART 2017-1 (d) 300 268 2.61 % 1 year 02/01/2017 Various Total auto securitizations 456 Total secured structured financings $ 3,052 * Issue Amount includes the retained interest amounts as detailed below while the Current Note Amounts Outstanding balances include pay-downs subsequent to note issuance and exclude retained interest amounts. (a) SLFT 2016-A Securitization. We initially retained $ 32 million of the asset-backed notes. (b) SLFT 2017-A Securitization. We initially retained $26 million of the Class A notes, $2 million of the Class B notes, $2 million of the Class C notes and $3 million of the Class D notes. (c) ODART 2016-1 Securitization. The maturity dates of the notes occur in January 2021 for the Class A notes, May 2021 for the Class B notes, September 2021 for the Class C notes and February 2023 for the Class D notes. We initially retained $ 54 million of the Class D notes. (d) ODART 2017-1 Securitization. The maturity dates of the notes occur in October 2020 for the Class A notes, June 2021 for the Class B notes, August 2021 for the Class C notes, December 2021 for the Class D notes, and January 2025 for the Class E notes. We initially retained $11 million of the Class A notes, $1 million of each of the Class B, Class C, and Class D notes, and the entire $18 million of the Class E notes. Call of 2014-A Notes. On February 15, 2017, we exercised our right to redeem the 2014-A Notes for a redemption price of $188 million , which excluded $33 million for the Class D Notes owned by Twenty First Street, a wholly owned subsidiary of SFC, on February 15, 2017, the date of the optional redemption. The outstanding principal balance of the asset-backed notes was $221 million on the date of the optional redemption. REVOLVING CONDUIT FACILITIES As of December 31, 2017 , our borrowings under conduit facilities consisted of the following: (dollar in millions) Note Maximum Amount Drawn Revolving Period End Backed by Loans Acquired from Subsidiaries of Due and Payable (a) First Avenue Funding LLC $ 250 $ — June 2018 SFC - auto loans (b) Seine River Funding, LLC 500 — December 2019 SFC - personal loans December 2022 Thur River Funding, LLC 350 — June 2020 SFC - personal loans February 2027 Mystic River Funding, LLC 850 — September 2020 SFC - personal loans October 2023 Fourth Avenue Auto Funding, LLC 250 — September 2020 SFC - auto loans October 2021 Total $ 2,200 $ — (a) The date following the revolving period, that the principal balance of the outstanding loans, if any, will be reduced as cash payments are received on the underlying loans and will be due and payable in full. (b) For First Avenue Funding, LLC, principal amount of the notes, if any, will be reduced as cash payments are received on the underlying direct auto loans and will be due and payable in full 12 months following the maturity of the last direct auto loan held by First Avenue Funding, LLC. During the 2017 period we voluntarily terminated the following conduit facilities concurrently with the execution of certain conduit facilities set forth in the table above: Termination Date Midbrook 2013-VFN1 Trust 04/13/2017 Sumner Brook 2013-VFN1 Trust 06/29/2017 Whitford Brook 2014-VFN1 Trust 07/14/2017 Springleaf 2013-VFN1 Trust 09/28/2017 Second Avenue Funding LLC 09/29/2017 VIE INTEREST EXPENSE Other than our retained interest in certain debt obligations issued by VIEs and residual interests in the remaining consolidated VIEs, we are under no obligation, either contractually or implicitly, to provide financial support to these entities. Consolidated interest expense related to our VIEs totaled $113 million in 2017 , $122 million in 2016 , and $184 million in 2015 . DECONSOLIDATED VIES As a result of the SpringCastle Interests Sale on March 31, 2016, we deconsolidated the securitization trust holding the underlying loans of the SpringCastle Portfolio and previously issued securitized interests, which were reported in long-term debt. |
Insurance
Insurance | 12 Months Ended |
Dec. 31, 2017 | |
Insurance [Abstract] | |
Insurance | Insurance INSURANCE RESERVES Components of unearned insurance premium reserves, claim reserves and benefit reserves were as follows: (dollars in millions) December 31, 2017 2016 Finance receivable related: Payable to SFC: Unearned premium reserves $ 92 $ 189 Claim reserves 16 23 Subtotal (a) 108 212 Payable to OMH: Unearned premium reserves (b) 42 6 Claim reserves 5 — Subtotal (b) 47 6 Payable to third-party beneficiaries: Unearned premium reserves 10 25 Benefit reserves 98 105 Claim reserves 3 6 Subtotal (b) 111 136 Non-finance receivable related: Benefit reserves 61 65 Claim reserves 42 41 Subtotal (b) 103 106 Total $ 369 $ 460 (a) Reported as a contra-asset to net finance receivables. (b) Reported in insurance claims and policyholder liabilities. Our insurance subsidiaries enter into reinsurance agreements with other insurers. Reserves related to unearned premiums, claims and benefits assumed from non-affiliated insurance companies totaled $50 million and $52 million at December 31, 2017 and 2016 , respectively. Reserves related to unearned premiums, claims and benefits ceded to non-affiliated insurance companies totaled $20 million at December 31, 2017 and $22 million in 2016. Changes in the reserve for unpaid claims and loss adjustment expenses (not considering reinsurance recoverable): (dollars in millions) At or for the Years Ended December 31, 2017 2016 2015 Balance at beginning of period $ 70 $ 73 $ 70 Less reinsurance recoverables (22 ) (22 ) (22 ) Net balance at beginning of period 48 51 48 Additions for losses and loss adjustment expenses incurred to: Current year 60 65 64 Prior years * 3 — — Total 63 65 64 Reductions for losses and loss adjustment expenses paid related to: Current year (43 ) (44 ) (40 ) Prior years (22 ) (24 ) (21 ) Total (65 ) (68 ) (61 ) Net balance at end of period 46 48 51 Plus reinsurance recoverables 20 22 22 Balance at end of period $ 66 $ 70 $ 73 * Reflects a shortfall in the prior years’ net reserves of $3 million at December 31, 2017 due to an unfavorable development on previously disclosed property and casualty policies. Incurred claims and allocated claim adjustment expenses, net of reinsurance, as of December 31, 2017 , were as follows: Years Ended December 31, At December 31, 2017 (dollars in millions) 2013 (a) 2014 (a) 2015 (a) 2016 (a) 2017 Incurred-but- not-reported Liabilities (b) Cumulative Number of Reported Claims Cumulative Frequency (c) Credit Insurance Accident Year 2013 42 38 38 38 38 — 22,068 2.8 % 2014 — 50 46 46 46 — 24,902 2.8 % 2015 — — 54 50 50 1 25,874 2.8 % 2016 — — — 55 55 6 25,291 2.7 % 2017 — — — — 53 16 19,114 2.3 % Total $ 242 (a) Unaudited. (b) Includes expected development on reported claims. (c) Frequency for each accident year is calculated as the ratio of all reported claims incurred to the total exposures in force. Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance, as of December 31, 2017 , were as follows: Years Ended December 31, (dollars in millions) 2013 * 2014 * 2015 * 2016 * 2017 Credit Insurance Accident Year 2013 23 34 37 38 38 2014 — 28 41 45 46 2015 — — 31 45 49 2016 — — — 36 49 2017 — — — — 37 Total $ 219 All outstanding liabilities before 2013, net of reinsurance — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 23 * Unaudited. The reconciliations of the net incurred and paid claims development to the liability for claims and claim adjustment expenses were as follows: (dollars in millions) December 31, 2017 2016 * 2015 * Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance: Credit insurance $ 23 $ 26 $ 29 Other short-duration insurance lines 20 19 19 Total 43 45 48 Reinsurance recoverable on unpaid claims: Other short-duration insurance lines 20 22 22 Insurance lines other than short-duration 3 3 3 Total gross liability for unpaid claims and claim adjustment expense $ 66 $ 70 $ 73 * Unaudited. We use completion factors to estimate the unpaid claim liability for credit insurance and most other short-duration products. For some products, the unpaid claim liability is estimated as a percent of exposure. For the long-tailed Excess & Surplus products, which have a longer period of time before claims are paid, unpaid claim liabilities are estimated by a third party and reviewed by our appointed actuary using statistical analyses, including analysis of trends in loss severity and frequency. There have been no significant changes in methodologies or assumptions during 2017 . Our average annual percentage payout of incurred claims by age, net of reinsurance, as of December 31, 2017 , were as follows: Years 1 2 3 4 5 Credit insurance 63.9 % 26.8 % 8.3 % 2.3 % 0.2 % STATUTORY ACCOUNTING Our insurance subsidiaries file financial statements prepared using statutory accounting practices prescribed or permitted by the Indiana DOI, which is a comprehensive basis of accounting other than GAAP. The primary differences between statutory accounting practices and GAAP are that under statutory accounting, policy acquisition costs are expensed as incurred, policyholder liabilities are generally valued using prescribed actuarial assumptions, and certain investment securities are reported at amortized cost. We are not required and did not apply purchase accounting to the insurance subsidiaries on a statutory basis. Statutory net income (loss) for our insurance companies by type of insurance was as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Property and casualty $ 19 $ 11 $ 15 Life and health 37 20 (1 ) Statutory capital and surplus for our insurance companies by type of insurance were as follows: (dollars in millions) December 31, 2017 2016 Property and casualty $ 42 $ 63 Life and health 79 133 Our insurance companies are also subject to risk-based capital requirements adopted by the Indiana DOI. Minimum statutory capital and surplus is the risk-based capital level that would trigger regulatory action. At December 31, 2017 and 2016 , our insurance subsidiaries’ statutory capital and surplus exceeded the risk-based capital minimum required levels. DIVIDEND RESTRICTIONS State law restricts the amounts that our insurance subsidiaries, Yosemite and Merit, may pay as dividends without prior notice to the Indiana DOI. The maximum amount of dividends, referred to as “ordinary dividends,” for an Indiana domiciled life insurance company that can be paid without prior approval in a 12 month period (measured retrospectively from the date of payment) is the greater of: (i) 10% of policyholders’ surplus as of the prior year-end; or (ii) the statutory net gain from operations as of the prior year-end. Any amount greater must be approved by the Indiana DOI prior to its payment. The maximum ordinary dividends for an Indiana domiciled property and casualty insurance company that can be paid without prior approval in a 12 month period (measured retrospectively from the date of payment) is the greater of: (i) 10% of policyholders’ surplus as of the prior year-end; or (ii) the statutory net income. Any amount greater must be approved by the Indiana DOI prior to its payment. These approved dividends are called “extraordinary dividends.” Our insurance subsidiaries paid extraordinary dividends to SFC totaling $125 million , $63 million , and $100 million during 2017, 2016, and 2015, respectively. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Other Liabilities Components of other liabilities were as follows: (dollars in millions) December 31, 2017 2016 Payables to parent and affiliates * $ 110 $ 13 Accrued interest on debt 44 48 Accrued expenses and other liabilities 23 39 Loan principal warranty reserve 7 13 Retirement plans 5 31 Other 25 41 Total $ 214 $ 185 * Payables to parent and affiliates at December 31, 2017 consisted of: (i) a $67 million payable under the tax sharing agreement; (ii) a $24 million payable primarily to AHL for insurance premiums collected by legacy Springleaf branches which reflects activity started in 2017; (iii) net payables to OGSC of $13 million for intercompany service agreements; (iv) payable of $4 million to OMFH for Loan Servicing Fees, and (v) a payable of $2 million to OCLI for internet lending referral fees. See Note 11 for further information regarding SFC’s intercompany agreements and Note 18 regarding SFC’s tax sharing agreement with OMFH. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock | Capital Stock SFC has two classes of authorized capital stock: special stock and common stock. SFC may issue special stock in series. The SFC board of directors determines the dividend, liquidation, redemption, conversion, voting and other rights prior to issuance. Par value and shares authorized at December 31, 2017 were as follows: Special Stock Common Stock Par value $ — $ 0.50 Shares authorized 25,000,000 25,000,000 Shares issued and outstanding were as follows: Special Stock Common Stock December 31, 2017 2016 2017 2016 Shares issued and outstanding — — 10,160,021 10,160,021 During 2016, SFC received capital contributions from SFI totaling $10 million to satisfy interest payments required by SFC’s junior subordinated debenture in respect of SFC’s junior subordinated debt. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 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) Year Ended December 31, 2017 Balance at beginning of period $ (3 ) $ (4 ) $ — $ (7 ) Other comprehensive income before reclassifications 8 3 — 11 Reclassification adjustments from accumulated other comprehensive loss (4 ) — — (4 ) Balance at end of period $ 1 $ (1 ) $ — $ — Year Ended December 31, 2016 Balance at beginning of period $ (9 ) $ (19 ) $ 4 $ (24 ) Other comprehensive income before reclassifications 11 15 — 26 Reclassification adjustments from accumulated other comprehensive loss (5 ) — (4 ) (9 ) Balance at end of period $ (3 ) $ (4 ) $ — $ (7 ) Year Ended December 31, 2015 Balance at beginning of period $ 12 $ (13 ) $ 4 $ 3 Other comprehensive loss before reclassifications (12 ) (6 ) — (18 ) Reclassification adjustments from accumulated other comprehensive loss (9 ) — — (9 ) Balance at end of period $ (9 ) $ (19 ) $ 4 $ (24 ) Reclassification adjustments from accumulated other comprehensive income (loss) to the applicable line item on our consolidated statements of operations were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Unrealized gains on investment securities: Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes $ 7 $ 8 $ 14 Income tax effect (3 ) (3 ) (5 ) Reclassification from accumulated other comprehensive income (loss) to investment revenues, net of taxes 4 5 9 Unrealized gains on foreign currency translation adjustments: Reclassification from accumulated other comprehensive income (loss) to other revenues — 4 — Total $ 4 $ 9 $ 9 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes OMH and all of its eligible domestic U.S. subsidiaries, including SFC, file a consolidated life/non-life federal tax return with the IRS. Income taxes from the consolidated federal and state tax returns are allocated to the eligible subsidiaries under a tax sharing agreement with OMH. The Company’s foreign subsidiaries/branches file tax returns in Puerto Rico and the U.S. Virgin Islands. The Company recognizes a deferred tax liability for the undistributed earnings of its foreign operations, if any, as we do not consider the amounts to be permanently reinvested. As of December 31, 2017 , the Company had no undistributed foreign earnings. Components of income (loss) before income tax expense (benefit) were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Income before income tax expense - U.S. operations $ 193 $ 347 $ 152 Income (loss) before income tax expense (benefit) - foreign operations — (1 ) 7 Total $ 193 $ 346 $ 159 Components of income tax expense were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Current: Federal $ 167 $ 181 $ 63 Foreign * — — — State 14 15 5 Total current 181 196 68 Deferred: Federal (77 ) (77 ) (46 ) Foreign * — — — State (5 ) (6 ) (4 ) Total deferred (82 ) (83 ) (50 ) Total $ 99 $ 113 $ 18 * Deferred foreign income taxes were less than $1 million during the 2017, 2016, and 2015 periods and, therefore, are not quantified in the table above. Expense from foreign income taxes includes foreign subsidiaries/branches that operate in Puerto Rico and the U.S. Virgin Islands. During the 2016 and 2015 periods, expense from foreign income taxes also included United Kingdom operations. Reconciliations of the statutory federal income tax rate to the effective income tax rate were as follows: Years Ended December 31, 2017 2016 2015 Statutory federal income tax rate 35.00 % 35.00 % 35.00 % Impact of Tax Act 11.81 — — State income taxes, net of federal 2.84 1.66 0.23 Excess tax benefit on share-based compensation (0.03 ) (0.20 ) — Non-controlling interests — (2.86 ) (27.91 ) Tax impact of United Kingdom subsidiary liquidation — (0.62 ) — Nondeductible compensation — — 3.39 Other, net 1.61 (0.22 ) 0.41 Effective income tax rate 51.23 % 32.76 % 11.12 % The effective income tax rate for 2017 , 2016 , and 2015 differed from the statutory federal income tax rate primarily due to the recognition of the impact of the Tax Act, effects of the non-controlling interest in the previously owned SpringCastle Portfolio, state income taxes, and discrete expense from the 2016 tax year return-to-provision adjustment. The effective income tax rate is based on income (loss) before taxes, which includes income (loss) attributable to non-controlling interests. The income (loss) attributable to the non-controlling interest is not included in the taxable income in SFC, resulting in variances from the statutory federal income tax rate of (2.86)% and (27.91)% in 2016 and 2015 , respectively. The difference in the effective income tax rate in 2017 as compared to 2016 is primarily due to the recognition of the impact of the Tax Act which increased our 2017 effective income tax rate by 11.81% . As a result of the Tax Act we recognized a $23 million tax charge in 2017. This charge is primarily the result of the lower corporate tax rate, which required us to remeasure our net deferred tax asset to reflect the lower corporate tax rate. The difference in the impact on the effective income tax rate due to non-controlling interest in 2016 as compared to 2015 is due to the fact that the net income attributable to non-controlling interest was a smaller percentage of the total income (loss) in 2016 as compared to 2015 . A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits (all of which would affect the effective income tax rate if recognized) is as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Balance at beginning of year $ 11 $ 9 $ 4 Increases in tax positions for current years 1 2 4 Lapse in statute of limitations (1 ) — — Increases in tax positions for prior years — — 4 Decreases in tax positions for prior years — — (2 ) Settlements with tax authorities — — (1 ) Balance at end of year $ 11 $ 11 $ 9 Our gross unrecognized tax benefits include related interest and penalties. 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. We are currently under examination of our U.S. federal tax return for the years 2011 to 2013 by the IRS. We are also under examination of various states for the years 2011 to 2016. Management believes it has adequately provided for taxes for such years. Components of deferred tax assets and liabilities were as follows: (dollars in millions) December 31, 2017 2016 Deferred tax assets: Allowance for loan losses $ 51 $ 77 Mark-to-market 55 55 State taxes, net of federal 39 27 Pension/employee benefits 5 13 Legal and warranty reserve 2 6 Federal and foreign net operating losses and tax attributes 1 3 Other — 2 Total 153 183 Deferred tax liabilities: Debt fair value adjustment 54 118 Insurance reserves 14 14 Discount - debt exchange 11 16 Other intangible assets 3 5 Fixed assets 2 — Impact of tax accounting method change — 38 Other 8 5 Total 92 196 Net deferred tax assets (liabilities) before valuation allowance 61 (13 ) Valuation allowance (37 ) (29 ) Net deferred tax assets (liabilities) $ 24 $ (42 ) The gross deferred tax liabilities are expected to reverse in time, and projected taxable income is expected to be sufficient to create positive taxable income, which will allow for the realization of all of our gross federal deferred tax assets and a portion of the state deferred tax assets. The increase of our net deferred tax asset is mainly attributable to change of fair market value of our receivables which was partly offset by an adjustment recorded as of December 31, 2017 to reflect the reduction in the U.S. statutory tax rate from 35% to 21% resulting from the Tax Act. During 2016 we liquidated our United Kingdom operations. As such, there are no net operating loss carryforwards (and no offsetting valuation allowances) related to our United Kingdom operations at December 31, 2016. At December 31, 2017 we had state net operating loss carryforwards of $630 million , compared to $610 million at December 31, 2016 . The state net operating loss carryforwards expire between 2018 and 2037. We had a valuation allowance on our gross state deferred tax assets, net of deferred federal tax benefit of $36 million and $26 million at December 31, 2017 and 2016 , respectively. The total valuation allowance was established based on management’s determination that the deferred tax assets are more likely than not to not be realized. |
Lease Commitments, Rent Expense
Lease Commitments, Rent Expense, and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Commitments, Rent Expense, and Contingent Liabilities | Lease Commitments, Rent Expense, and Contingent Liabilities LEASE COMMITMENTS AND RENT EXPENSE 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 2018 $ 16 2019 12 2020 8 2021 5 2022 2 2023+ — Total $ 43 In addition to rent, we pay taxes, insurance, and maintenance expenses under certain leases. In the normal course of business, we will renew leases that expire or replace them with leases on other properties. Rental expense totaled $28 million in each of 2017 , 2016 , and 2015 . 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. SALES RECOURSE OBLIGATIONS At December 31, 2017 , our reserve for sales recourse obligations totaled $7 million , which primarily related to our real estate loan sales in 2014, with a minimal portion of the reserve related to net charge-off sales of our finance receivables. We did not establish an additional reserve for sales recourse obligations associated with the personal loans sold in the Lendmark Sale or our real estate loan sales in 2016 based on the credit quality of the loans sold and the terms of each transaction. The activity in our reserve for sales recourse obligations was as follows: (dollars in millions) At or for the Years Ended December 31, 2017 2016 2015 Balance at beginning of period $ 13 $ 15 $ 24 Recourse losses — — (2 ) Provision for recourse obligations, net of recoveries * (6 ) (2 ) (7 ) Balance at end of period $ 7 $ 13 $ 15 * Reflects the elimination of the reserve associated with other prior sales of finance receivables. At December 31, 2017 , there were no material recourse requests with loss exposure that management believed would not be covered by the reserve. However, we will continue to monitor any repurchase activity in the future and will adjust the reserve accordingly. When recourse losses are reasonably possible or exposure to such losses exists in excess of the liability already accrued, it is not always possible to reasonably estimate the size of the possible recourse losses or range of losses. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans PENSION PLANS As noted in Note 11 Related Party Transactions, the Company contributed SFMC, a former subsidiary of SFC to SFI in the form of a dividend. All assets and liabilities of SFMC were transferred including the net pension liabilities and any other obligations related to the Springleaf Financial Services Retirement Plan, a noncontributory defined benefit plan, the Springleaf Financial Services Excess Retirement Income Plan, an unfunded defined benefit plan, and the Supplemental Executive Retirement Income Plan, an unfunded defined benefit plan, to OMH. The projected net pension obligation related to these plans as of December 31, 2016 was $25 million . The CommoLoco Retirement Plan, a noncontributory defined benefit plan, which had a projected net pension obligation as of December 31, 2016 of $6 million , was retained by the Company. The CommoLoCo Retirement Plan, which is subject to the provisions of the Puerto Rico tax code, was frozen effective December 31, 2012. Puerto Rican residents employed by CommoLoCo, Inc., our Puerto Rican subsidiary, who had attained age 21 and completed one year of service were eligible to participate in the plan. Our current and former employees in Puerto Rico will not lose any vested benefits in the CommoLoCo Retirement Plan that accrued prior to January 1, 2013. The fair value of plan assets net of expense for the CommoLoCo retirement Plan totaled $12 million as of December 31, 2017 and the projected benefit obligation totaled $17 million . The projected net pension obligation related to the CommoLoco Retirement Plan was $5 million . |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation OMNIBUS INCENTIVE PLAN In 2013, OMH adopted the 2013 Omnibus Incentive Plan, which was amended and restated effective as of May 25, 2016, under which equity-based awards are granted to selected management employees, non-employee directors, independent contractors, and consultants. The amendment and restatement of the Omnibus Plan (i) extended the term of the Omnibus Plan from October 2023 to May 2026 and (ii) limited the number of cash and equity-based awards under the Omnibus Plan valued at more than $500,000 to non-employee directors during the calendar year. As of December 31, 2017 , 13,199,096 shares of common stock were reserved for issuance under the Omnibus Plan, including 1,411,236 shares subject to outstanding equity awards. The amount of shares reserved is adjusted annually at the beginning of the year by a number of shares equal to the excess of 10% of the number of outstanding shares on the last day of the previous fiscal year over the number of shares reserved and available for issuance as of the last day of the previous fiscal year. The Omnibus Plan allows for issuance of stock options, RSUs and restricted stock awards (“RSAs”), stock appreciation rights, and other stock-based awards and cash awards. SFC participates in stock awards of OMH. Unless specifically noted, the following disclosures are based on all award activity of OMH. Service-based Awards In connection with the initial public offering on October 16, 2013 and subsequent to the offering, OMH has granted service-based RSUs and RSAs to certain of our executives and employees. The RSUs are subject to a graded vesting period of 4.2 years or less and do not provide the holders with any rights as shareholders, including the right to earn dividends during the vesting period. The RSAs are subject to a graded vesting period of three years or less and provide the holders the right to vote and to earn dividends during the vesting period. The fair value for restricted units and awards is generally the closing market price of OMH’s common stock on the date of the award. For awards granted in connection with the initial public offering, the fair value is the offering price. Expense is amortized on a straight line basis over the vesting period, based on the number of awards that are ultimately expected to vest. The weighted-average grant date fair value of service-based awards issued in 2017 , 2016 , and 2015 was $27.85 , $26.14 , and $47.44 , respectively. The total fair value of service-based awards that vested during 2017 , 2016 , and 2015 was $18 million , $10 million , and $7 million , respectively. The following table summarizes the service-based stock activity and related information for the Omnibus Plan for 2017 : Number of Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Term (in Years) Unvested as of January 1, 2017 1,382,920 $ 35.86 Granted 407,184 27.85 Vested (575,322 ) 31.86 Forfeited (73,172 ) 38.10 Unvested at December 31, 2017 1,141,610 34.87 1.91 Performance-based Awards During 2017 , 2016 and 2015 , OMH awarded PRSUs that may be earned based on the financial performance of OMH. Certain PRSUs are subject to the achievement of performance goals during the period between the grant date and December 31, 2017 . These awards are also subject to a graded vesting period of two years after the attainment of the performance goal or December 31, 2017 , whichever occurs earlier. The remaining PRSUs are subject to separate and independent performance goals for 2017, 2018, and 2019; therefore, a separate requisite service period exists for each year that begins on January 1 of the respective performance year. Vesting for these awards will occur on the filing date of this Annual Report on Form 10-K that occurs after the performance year or the date the actual performance outcome is determined, whichever is later. All of the PRSUs allow for partial vesting if a minimum level of performance is attained. The PRSUs do not provide the holders with any rights as shareholders, including the right to earn dividends during the vesting period. The fair value for PRSUs is based on the closing market price of our stock on the date of the award. Expense for performance-based shares is recognized over the requisite service period when it is probable that the performance goals will be achieved and is based on the total number of units expected to vest. Expense for awards with graded vesting is recognized under the accelerated method, whereby each vesting is treated as a separate award with expense for each vesting recognized ratably over the requisite service period. If minimum targets are not achieved by the end of the respective performance periods, all unvested shares related to those targets will be forfeited and canceled, and all expense recognized to that date is reversed. The weighted average grant date fair value of performance-based awards issued in 2017 and 2015 was $24.98 and $ 34.45 , respectively. No performance shares were granted during 2016. The total fair value of performance-based awards that vested during 2017 and 2016 was $2 million and $4 million , respectively. No performance-based awards vested in 2015 . The following table summarizes the performance-based stock activity and related information for the Omnibus Plan for 2017 : Number of Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Term (in Years) Unvested as of January 1, 2017 407,948 $ 25.94 Granted 90,072 24.98 Vested (92,000 ) 24.78 Forfeited (136,394 ) 25.70 Unvested at December 31, 2017 269,626 26.14 3.78 Due to the contribution of SFMC to SFI during the 2017 period there was no direct share-based compensation expense or associated income tax benefit recognized. Following the contribution of SFMC to SFI, such expense is incurred by OGSC and subsequently allocated to SFC by OMGS. As of December 31, 2017 , there was no unrecognized compensation expense. See Note 11 for information regarding the dividend of SFMC to SFI. Total share-based compensation expense, net of forfeitures, for all stock-based awards directly incurred by SFC amounted to $2 million during 2016 and 2015 . The total income tax benefit recognized for stock-based compensation was $1 million in 2016 and 2015 . OMH Incentive Units In the fourth quarter of 2015, certain executives of the Company surrendered a portion of their incentive units in the Initial Stockholder and certain additional executives of the Company received a grant of incentive units in the Initial Stockholder. These incentive units are intended to encourage the executives to create sustainable, long-term value for the Company by providing them with interests that are subject to their continued employment with the Company and that only provide benefits (in the form of distributions) if the Initial Stockholder makes distributions to one or more of its common members that exceed specified amounts. The incentive units are entitled to vote together with the holders of common units in the Initial Stockholder as a single class on all matters. The incentive units may not be sold or otherwise transferred and the executives are entitled to receive these distributions only while they are employed with the Company, unless the executive’s termination of employment results from the executive’s death, in which case the executive’s beneficiaries will be entitled to receive any future distributions. Because the incentive units only provide economic benefits in the form of distributions while the holders are employed, and the holder generally does not have the ability to monetize the incentive units due to the transfer restrictions, the substance of the arrangement is that of a profit sharing agreement. These incentive units provide benefits (in the form of distributions) in the event the Initial Stockholder makes distributions to one or more of its members that exceed certain specified amounts. In connection with the sale of our common stock by the Initial Stockholder in 2015, certain of the specified thresholds were satisfied. In accordance with ASC Topic 710, Compensation-General, we recorded non-cash incentive compensation expense of $15 million in 2015 related to the incentive units with a capital contribution offset such that the impact to overall shareholder’s equity was neutral. No expense was recognized for these awards during 2017 or 2016. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our segments coincide with how our businesses are managed. At December 31, 2017 , our two segments included: • Consumer and Insurance — We originate and service personal loans and offer credit insurance (life insurance, disability insurance, involuntary unemployment insurance, and collateral protection insurance) and non-credit insurance through our branch network and our centralized operations. We also offer auto membership plans of an unaffiliated company. Our branch network conducts business in 28 states. Our centralized operations underwrite and process certain loan applications that we receive from our branch network or through an internet portal. If the applicant is located near an existing branch, our centralized operations make the credit decision regarding the application and then request, but do not require, the customer to visit a nearby branch for closing, funding and servicing. If the applicant is not located near a branch, our centralized operations originate the loan. • Acquisitions and Servicing — SFI services the SpringCastle Portfolio. These loans consist of unsecured loans and loans secured by subordinate residential real estate mortgages and include both closed-end accounts and open-end lines of credit. Unless SFI is terminated, SFI will continue to provide the servicing for these loans pursuant to a servicing agreement, which SFI services as unsecured loans because the liens are subordinated to superior ranking security interests. See Note 2 for information regarding the SpringCastle Interest Sale and the acquisition and disposition of the SpringCastle Portfolio. The remaining components (which we refer to as “Other”) consist of our non-originating legacy operations, which include (i) our liquidating real estate loan portfolio as discussed below, (ii) our liquidating retail sales finance portfolio (including retail sales finance accounts from our legacy auto finance operation), (iii) our lending operations in Puerto Rico and the U.S. Virgin Islands; and (iv) the operations of the United Kingdom subsidiary, prior to its liquidation on August 16, 2016. Beginning in 2017, management no longer views or manages our real estate assets as a separate operating segment. Therefore, we are now including Real Estate, which was previously presented as a distinct reporting segment, in “Other.” To conform to this new alignment of our segments, we have revised our prior period segment disclosures. The accounting policies of the segments are the same as those disclosed in Note 3 , except as described below. Due to the nature of the Fortress Acquisition, we applied purchase accounting. However, we report the operating results of Consumer and Insurance, Acquisitions and Servicing, and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for certain costs, primarily interest expense and loan loss reserves, to reflect the manner in which we assess our business results and (ii) excludes the impact of applying purchase accounting (eliminates premiums/discounts on our finance receivables and long-term debt at acquisition, as well as the amortization/accretion in future periods). We allocate revenues and expenses (on a Segment Accounting Basis) to each segment using the following methodologies: Interest income Directly correlated with a specific segment. Interest expense Acquisitions and Servicing - This segment includes interest expense specifically identified to the SpringCastle Portfolio. Consumer and Insurance and Other - The Company has securitization debt and unsecured debt. The Company first allocates interest expense to its segments based on actual expense for securitizations and secured term debt and using a weighted average for unsecured debt allocated to the segments. Interest expense for unsecured debt is recorded to each of the segments using a weighted average interest rate applied to allocated average unsecured debt. Average unsecured debt allocations for the periods presented are as follows: Subsequent to the OneMain Acquisition Total average unsecured debt is allocated as follows: l Other - at 100% of asset base. (Asset base represents the average net finance receivables including finance receivables held for sale); and l Consumer and Insurance - receives remainder of unallocated average debt. The net effect of the change in debt allocation and asset base methodologies for 2015, had it been in place as of the beginning of the year, would be an increase in interest expense of $208 million for Consumer and Insurance and a decrease in interest expense of $208 million for Other. For the period first quarter 2015 to the OneMain Acquisition Total average unsecured debt was allocated to Consumer and Insurance and Other, such that the total debt allocated across each segment equaled 83% of the Consumer and Insurance asset base, and 100% of the Other asset base. Any excess was allocated to Consumer and Insurance. Average unsecured debt was allocated after average securitized debt to achieve the calculated average segment debt. Asset base represented the following: l Consumer and Insurance - average net finance receivables, including average net finance receivables held for sale; and l Other - average net finance receivables, including average net finance receivables held for sale, investments including proceeds from Real Estate sales, cash and cash equivalents, less proceeds from equity issuance in 2015 and operating cash reserve and cash included in other segments. Provision for finance receivable losses Directly correlated with specific segment, except for allocations related to personal loans and retail in Other, which are based on the remaining delinquent accounts as a percentage of total delinquent accounts. Other revenues Directly correlated with a specific segment, except for: l Net gain (loss) on repurchases and repayments of debt - Allocated to each of the segments based on the interest expense allocation of debt. l Gains and losses on foreign currency exchange - Allocated to each of the segments based on the interest expense allocation of debt. Other expenses Salaries and benefits - Directly correlated with a specific segment. Other salaries and benefits not directly correlated with a specific segment are allocated to each of the segments based on services provided. Other operating expenses - Directly correlated with a specific segment. Other operating expenses not directly correlated with a specific segment are allocated to each of the segments based on services provided. Insurance policy benefits and claims - Directly correlated with a specific segment. The “Segment to GAAP Adjustment” column in the following tables primarily consists of: • Interest income - reverses the impact of premiums/discounts on purchased finance receivables and the interest income recognition under guidance in ASC 310-20, Nonrefundable Fees and Other Costs , and ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality , and reestablishes interest income recognition on a historical cost basis; • Interest expense - reverses the impact of premiums/discounts on acquired long-term debt and reestablishes interest expense recognition on a historical cost basis; • Provision for finance receivable losses - reverses the impact of providing an allowance for finance receivable losses upon acquisition and reestablishes the allowance on a historical cost basis and reverses the impact of recognition of net charge-offs on purchased credit impaired finance receivables and reestablishes the net charge-offs on a historical cost basis; • Other revenues - reestablishes the historical cost basis of mark-to-market adjustments on finance receivables held for sale and on realized gains/losses associated with our investment portfolio; • Other expenses - reestablishes expenses on a historical cost basis by reversing the impact of amortization from acquired intangible assets and including amortization of other historical deferred costs; and • Assets - revalues assets based on their fair values at the effective date of the Fortress Acquisition. The following tables present information about the Company’s segments, as well as reconciliations to the consolidated financial statement amounts. (dollars in millions) Consumer and Insurance Acquisitions and Servicing Other (a) Eliminations Segment to Consolidated Total At or for the Year Ended December 31, 2017 Interest income $ 1,213 $ — $ 23 $ — $ 5 $ 1,241 Interest expense 439 — 21 — 57 517 Provision for finance receivable losses 316 — 7 — 1 324 Net interest income (loss) after provision for finance receivable losses 458 — (5 ) — (53 ) 400 Other revenues (b) 169 — 256 — (18 ) 407 Other expenses 601 2 11 — — 614 Income (loss) before income tax expense (benefit) $ 26 $ (2 ) $ 240 $ — $ (71 ) $ 193 Assets (c) $ 5,107 $ — $ 5,727 $ — $ (10 ) $ 10,824 At or for the Year Ended December 31, 2016 Interest income $ 1,192 $ 102 $ 51 $ — $ 5 $ 1,350 Interest expense 402 20 52 — 82 556 Provision for finance receivable losses 305 14 6 — 4 329 Net interest income (loss) after provision for finance receivable losses 485 68 (7 ) — (81 ) 465 Net gain on sale of SpringCastle interests — 167 — — — 167 Other revenues (b) 219 — 179 — 9 407 Other expenses 648 16 29 — — 693 Income before income taxes 56 219 143 — (72 ) 346 Income before income tax attributable to non-controlling interests — 28 — — — 28 Income before income tax expense attributable to Springleaf Finance Corporation $ 56 $ 191 $ 143 $ — $ (72 ) $ 318 Assets (c) $ 5,494 $ — $ 4,293 $ — $ (68 ) $ 9,719 At or for the Year Ended December 31, 2015 Interest income $ 1,115 $ 455 $ 76 $ — $ 11 $ 1,657 Interest expense 190 87 268 (5 ) 127 667 Provision for finance receivable losses 255 68 (1 ) — 17 339 Net interest income (loss) after provision for finance receivable losses 670 300 (191 ) 5 (133 ) 651 Other revenues 212 5 46 (5 ) (15 ) 243 Other expenses 622 61 50 — 2 735 Income (loss) before income tax expense (benefit) 260 244 (195 ) — (150 ) 159 Income before income tax attributable to non-controlling interests — 127 — — — 127 Income (loss) before income tax expense (benefit) attributable to Springleaf Finance Corporation $ 260 $ 117 $ (195 ) $ — $ (150 ) $ 32 Assets $ 5,632 $ 1,784 $ 4,830 $ — $ (58 ) $ 12,188 (a) Real Estate segment has been combined with “Other” for the prior period. (b) Other revenues reported in “Other” primarily includes interest income on the Cash Services Note (previously referred to as the “Independence Demand Note”) and on SFC’s note receivable from SFI. See Note 11 for further information on the notes receivable from parent and affiliates. (c) Assets reported in “Other” primarily includes notes receivable from parent and affiliates discussed above. See Note 11 for further information on the note receivable from parent and affiliates. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of a financial instrument is the amount that would be expected to be received if an asset were to be sold or the amount that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The degree of judgment used in measuring the fair value of financial instruments generally correlates with the level of pricing observability. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Conversely, financial instruments traded in other-than-active markets or that do not have quoted prices have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. An other-than-active market is one in which there are few transactions, the prices are not current, price quotations vary substantially either over time or among market makers, or little information is released publicly for the asset or liability being valued. Pricing observability is affected by a number of factors, including the type of financial instrument, whether the financial instrument is listed on an exchange or traded over-the-counter or is new to the market and not yet established, the characteristics specific to the transaction, and general market conditions. See Note 3 for a discussion of the accounting policies related to fair value measurements, which includes the valuation process and the inputs used to develop our fair value measurements. 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 December 31, 2017 Assets Cash and cash equivalents $ 240 $ 4 $ — $ 244 $ 244 Investment securities — 534 2 536 536 Net finance receivables, less allowance for finance receivable losses — — 5,710 5,710 5,202 Finance receivables held for sale — — 139 139 132 Notes receivable from parent and affiliates — 4,488 — 4,488 4,488 Restricted cash and restricted cash equivalents 169 — — 169 169 Other assets (a) — 11 12 23 23 Liabilities Long-term debt $ — $ 8,369 $ — $ 8,369 $ 7,865 Other liabilities (b) — 110 — 110 110 December 31, 2016 Assets Cash and cash equivalents $ 198 $ 42 $ — $ 240 $ 240 Investment securities — 580 2 582 582 Net finance receivables, less allowance for finance receivable losses — — 5,122 5,122 4,755 Finance receivables held for sale — — 159 159 153 Notes receivable from parent and affiliates — 3,723 — 3,723 3,723 Restricted cash and restricted cash equivalents 227 — — 227 227 Other assets (a) — 41 34 75 77 Liabilities Long-term debt $ — $ 7,308 $ — $ 7,308 $ 6,837 Other liabilities (b) — 13 — 13 13 (a) Other assets includes commercial mortgage loans, escrow advance receivables, and receivables from parent and affiliates at December 31, 2017 and commercial mortgage loans, escrow advance receivables, receivables from parent and affiliates, and receivables related to sales of real estate loans and related trust assets at December 31, 2016. (b) Consists of payables to parent and affiliates. 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 (dollars in millions) Level 1 Level 2 Level 3 (a) December 31, 2017 Assets Cash equivalents in mutual funds $ 142 $ — $ — $ 142 Cash equivalents in securities — 4 — 4 Investment securities: Available-for-sale securities Bonds: U.S. government and government sponsored entities — 17 — 17 Obligations of states, municipalities, and political subdivisions — 70 — 70 Non-U.S. government and government sponsored entities — 4 — 4 Corporate debt — 324 — 324 RMBS — 35 — 35 CMBS — 23 — 23 CDO/ABS — 53 — 53 Total bonds — 526 — 526 Preferred stock — 5 — 5 Other long-term investments — — 1 1 Total available-for-sale securities (b) — 531 1 532 Other securities Bonds: Corporate debt — 3 — 3 Total other securities — 3 — 3 Total investment securities — 534 1 535 Restricted cash in mutual funds 159 — — 159 Total $ 301 $ 538 $ 1 $ 840 (a) Due to the insignificant activity within the Level 3 assets during 2017 , 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. (b) Excludes an immaterial interest in a limited partnership that we account for using the equity method and FHLB common stock of $1 million at December 31, 2017 , which is carried at cost. Fair Value Measurements Using Total Carried At Fair Value (dollars in millions) Level 1 Level 2 Level 3 (a) December 31, 2016 Assets Cash equivalents in mutual funds $ 119 $ — $ — $ 119 Cash equivalents in securities — 42 — 42 Investment securities: Available-for-sale securities Bonds: U.S. government and government sponsored entities — 13 — 13 Obligations of states, municipalities, and political subdivisions — 82 — 82 Non-U.S. government and government sponsored entities — 5 — 5 Corporate debt — 353 — 353 RMBS — 39 — 39 CMBS — 33 — 33 CDO/ABS — 46 — 46 Total bonds — 571 — 571 Preferred stock — 6 — 6 Other long-term investments — — 1 1 Total available-for-sale securities (b) — 577 1 578 Other securities Bonds: Corporate debt — 2 — 2 CMBS — 1 — 1 Total other securities — 3 — 3 Total investment securities — 580 1 581 Restricted cash in mutual funds 212 — — 212 Total $ 331 $ 622 $ 1 $ 954 (a) Due to the insignificant activity within the Level 3 assets during 2016 , 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. (b) Excludes an immaterial interest in a limited partnership that we account for using the equity method and FHLB common stock of $1 million at December 31, 2016 , which is carried at cost. We had no transfers between Level 1 and Level 2 during 2017 and 2016 . 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. Assets measured at fair value on a non-recurring basis on which we recorded impairment charges were as follows: Fair Value Measurements Using * Impairment Charges (dollars in millions) Level 1 Level 2 Level 3 Total At or for the Year Ended December 31, 2017 Assets Real estate owned $ — $ — $ 6 $ 6 $ 3 At or for the Year Ended December 31, 2016 Assets Finance receivables held for sale $ — $ — $ 159 $ 159 $ 4 Real estate owned — — 5 5 2 Total $ — $ — $ 164 $ 164 $ 6 * The fair value information presented in the table is as of the date the fair value adjustment was recorded. We wrote down certain finance receivables held for sale reported in our Other segment to their fair value during the second quarter of 2016 and recorded the writedowns in other revenues. We wrote down certain real estate owned reported in our Other segment to their fair value less cost to sell during 2017 and 2016 and recorded the writedowns in other revenues. The fair values of real estate owned disclosed in the table above are unadjusted for transaction costs as required by the authoritative guidance for fair value measurements. The amounts of real estate owned recorded in other assets are net of transaction costs as required by the authoritative guidance for accounting for the impairment of long-lived assets. The inputs and quantitative data used in our Level 3 valuations for our real estate owned are unobservable primarily due to the unique nature of specific real estate assets. Therefore, we used independent third-party providers, familiar with local markets, to determine the values used for fair value disclosures without adjustment. Quantitative information about Level 3 inputs for our assets measured at fair value on a non-recurring basis at December 31, 2017 and 2016 was as follows: Range (Weighted Average) Valuation Technique(s) Unobservable Input December 31, 2017 December 31, 2016 Finance receivables held for sale Income approach Market value for similar type loan transactions to obtain a price point * * Real estate owned Market approach Third-party valuation * * * We applied the third-party exception which allows us to omit certain quantitative disclosures about unobservable inputs for the assets measured at fair value on a non-recurring basis included in the table above. As a result, the weighted average ranges of the inputs for these assets are not applicable. FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS We use the following methods and assumptions to estimate fair value. Cash and Cash Equivalents The carrying amount of cash and cash equivalents, including cash and certain cash equivalents, approximates fair value. Mutual Funds The fair value of mutual funds is based on quoted market prices of the underlying shares held in the mutual funds. Investment Securities We utilize third-party valuation service providers to measure the fair value of our investment securities, which are classified as available-for-sale or as trading and other and consist primarily of bonds. Whenever available, we obtain quoted prices in active markets for identical assets at the balance sheet date to measure investment securities at fair value. We generally obtain market price data from exchange or dealer markets. We estimate the fair value of fixed maturity investment securities not traded in active markets by referring to traded securities with similar attributes, using dealer quotations and a matrix pricing methodology, or discounted cash flow analyses. This methodology considers such factors as the issuer’s industry, the security’s rating and tenor, its coupon rate, its position in the capital structure of the issuer, yield curves, credit curves, composite ratings, bid-ask spreads, prepayment rates and other relevant factors. For fixed maturity investment securities that are not traded in active markets or that are subject to transfer restrictions, we adjust the valuations to reflect illiquidity and/or non-transferability. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. We elect the fair value option for investment securities that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value the derivative. The fair value of certain investment securities is based on the amortized cost, which is assumed to approximate fair value. Finance Receivables The fair value of net finance receivables, less allowance for finance receivable losses, for both non-impaired and purchased credit impaired finance receivables, is determined using discounted cash flow methodologies. The application of these methodologies requires us to make certain judgments and estimates based on our perception of market participant views related to the economic and competitive environment, the characteristics of our finance receivables, and other similar factors. The most significant judgments and estimates made relate to prepayment speeds, default rates, loss severity, and discount rates. The degree of judgment and estimation applied is significant in light of the current capital markets and, more broadly, economic environments. Therefore, the fair value of our finance receivables could not be determined with precision and may not be realized in an actual sale. Additionally, there may be inherent limitations in the valuation methodologies we employed, and changes in the underlying assumptions used could significantly affect the results of current or future values. Finance Receivables Held for Sale We determined the fair value of finance receivables held for sale that were originated as held for investment based on negotiations with prospective purchasers (if any) or by using projected cash flows discounted at the weighted-average interest rates offered by us in the market for similar finance receivables. We based cash flows on contractual payment terms adjusted for estimates of prepayments and credit related losses. Restricted Cash and Restricted Cash Equivalents The carrying amount of restricted cash and restricted cash equivalents approximates fair value. Notes Receivable from Parent and Affiliates The carrying amount of the notes receivable from parent and affiliates approximates the fair value because the notes are payable on a demand basis prior to their due dates and the interest rates on these notes adjust with changing market interest rates. Commercial Mortgage Loans Given the short remaining average life of the portfolio, the carrying amount of commercial mortgage loans approximates fair value. The carrying amount includes an estimate for credit related losses, which is based on independent third-party valuations. Real Estate Owned We initially base our estimate of the fair value on independent third-party valuations at the time we take title to real estate owned. Subsequent changes in fair value are based upon independent third-party valuations obtained periodically to estimate a price that would be received in a then current transaction to sell the asset. Escrow Advance Receivable The carrying amount of escrow advance receivable approximates fair value. Receivables from Parent and Affiliates The carrying amount of receivables from parent and affiliates approximates fair value. Receivables Related to Sales of Real Estate Loans and Related Trust Assets The carrying amount of receivables related to sales of real estate loans and related trust assets less estimated forfeitures, which are reflected in other liabilities, approximates fair value. Long-term Debt We either receive fair value measurements of our long-term debt from market participants and pricing services or we estimate the fair values of long-term debt using projected cash flows discounted at each balance sheet date’s market-observable implicit-credit spread rates for our long-term debt. We record at fair value long-term debt issuances that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value the derivative. At December 31, 2017 , we had no debt carried at fair value under the fair value option. We estimate the fair values associated with variable rate revolving lines of credit to be equal to par. Payables to Parent and Affiliates The fair value of payable to parent and affiliates approximates the carrying value due to its short-term nature. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Apollo-Värde Transaction On January 3, 2018, the Apollo-Värde Group entered into a Share Purchase Agreement with the Initial Stockholder and OMH to acquire 54,937,500 shares or approximately 40.6% of the outstanding shares of OMH common stock from the Initial Stockholder, representing the entire holdings of OMH stock beneficially owned by Fortress. This transaction is expected to close in the second quarter of 2018 and is subject to regulatory approvals and other customary closing conditions. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) Our selected quarterly financial data for 2017 was as follows: (dollars in millions) Fourth Quarter Third Quarter Second Quarter First Quarter Interest income $ 328 $ 310 $ 306 $ 297 Interest expense 128 133 129 127 Provision for finance receivable losses 92 70 91 71 Other revenues 99 115 87 106 Other expenses 138 154 160 162 Income before income taxes 69 68 13 43 Income taxes 48 30 5 16 Net income $ 21 $ 38 $ 8 $ 27 Our selected quarterly financial data for 2016 was as follows: (dollars in millions) Fourth Quarter Third Quarter Second Quarter First Quarter Interest income $ 303 $ 303 $ 313 $ 431 Interest expense 127 135 138 156 Provision for finance receivable losses 66 87 85 91 Other revenues 105 107 106 256 Other expenses 170 155 177 191 Income before income taxes 45 33 19 249 Income taxes 12 10 6 85 Net income 33 23 13 164 Net income attributable to non-controlling interests — — — 28 Net income attributable to Springleaf Finance Corporation $ 33 $ 23 $ 13 $ 136 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION We prepared our consolidated financial statements using GAAP. The statements include the accounts of SFC, its subsidiaries (all of which are wholly owned, except for certain subsidiaries associated with a joint venture in which we owned a 47% equity interest prior to March 31, 2016), and VIEs in which we hold a controlling financial interest and for which we are considered to be the primary beneficiary as of the financial statement date. We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of results. Ultimate results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date. To conform to the 2017 presentation, we reclassified certain items in prior periods of our consolidated financial statements. Also, to conform to the new alignment of our segments, as further discussed in Note 22, we have revised our prior period segment disclosures. |
Operating Segment Reporting | Operating Segments Our segments coincide with how our businesses are managed. At December 31, 2017 , our two segments include: • Consumer and Insurance; and • Acquisitions and Servicing. The remaining components (which we refer to as “Other”) consist of our non-originating legacy operations, which include: (i) our liquidating real estate portfolio; (ii) our liquidating retail sales finance portfolio (including retail sales finance accounts from our legacy auto finance operation); (iii) our lending operations in Puerto Rico and the U.S. Virgin Islands; and (iv) the operations of the United Kingdom subsidiary, prior to its liquidation on August 16, 2016. Beginning in 2017, management no longer views or manages our real estate assets as a separate operating segment. Therefore, we are now including Real Estate, which was previously presented as a distinct reporting segment, in “Other.” To conform to this new alignment of our segments, we have revised our prior period segment disclosures. Due to the nature of the Fortress Acquisition, we applied purchase accounting. However, we report the operating results of Consumer and Insurance, Acquisitions and Servicing, and Other using the Segment Accounting Basis, which (i) reflects our allocation methodologies for certain costs, primarily interest expense and loan loss reserves, to reflect the manner in which we assess our business results and (ii) excludes the impact of applying purchase accounting (eliminates premiums/discounts on our finance receivables and long-term debt at acquisition, as well as the amortization/accretion in future periods). We allocate revenues and expenses (on a Segment Accounting Basis) to each segment using the following methodologies: Interest income Directly correlated with a specific segment. Interest expense Acquisitions and Servicing - This segment includes interest expense specifically identified to the SpringCastle Portfolio. Consumer and Insurance and Other - The Company has securitization debt and unsecured debt. The Company first allocates interest expense to its segments based on actual expense for securitizations and secured term debt and using a weighted average for unsecured debt allocated to the segments. Interest expense for unsecured debt is recorded to each of the segments using a weighted average interest rate applied to allocated average unsecured debt. Average unsecured debt allocations for the periods presented are as follows: Subsequent to the OneMain Acquisition Total average unsecured debt is allocated as follows: l Other - at 100% of asset base. (Asset base represents the average net finance receivables including finance receivables held for sale); and l Consumer and Insurance - receives remainder of unallocated average debt. The net effect of the change in debt allocation and asset base methodologies for 2015, had it been in place as of the beginning of the year, would be an increase in interest expense of $208 million for Consumer and Insurance and a decrease in interest expense of $208 million for Other. For the period first quarter 2015 to the OneMain Acquisition Total average unsecured debt was allocated to Consumer and Insurance and Other, such that the total debt allocated across each segment equaled 83% of the Consumer and Insurance asset base, and 100% of the Other asset base. Any excess was allocated to Consumer and Insurance. Average unsecured debt was allocated after average securitized debt to achieve the calculated average segment debt. Asset base represented the following: l Consumer and Insurance - average net finance receivables, including average net finance receivables held for sale; and l Other - average net finance receivables, including average net finance receivables held for sale, investments including proceeds from Real Estate sales, cash and cash equivalents, less proceeds from equity issuance in 2015 and operating cash reserve and cash included in other segments. Provision for finance receivable losses Directly correlated with specific segment, except for allocations related to personal loans and retail in Other, which are based on the remaining delinquent accounts as a percentage of total delinquent accounts. Other revenues Directly correlated with a specific segment, except for: l Net gain (loss) on repurchases and repayments of debt - Allocated to each of the segments based on the interest expense allocation of debt. l Gains and losses on foreign currency exchange - Allocated to each of the segments based on the interest expense allocation of debt. Other expenses Salaries and benefits - Directly correlated with a specific segment. Other salaries and benefits not directly correlated with a specific segment are allocated to each of the segments based on services provided. Other operating expenses - Directly correlated with a specific segment. Other operating expenses not directly correlated with a specific segment are allocated to each of the segments based on services provided. Insurance policy benefits and claims - Directly correlated with a specific segment. The “Segment to GAAP Adjustment” column in the following tables primarily consists of: • Interest income - reverses the impact of premiums/discounts on purchased finance receivables and the interest income recognition under guidance in ASC 310-20, Nonrefundable Fees and Other Costs , and ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality , and reestablishes interest income recognition on a historical cost basis; • Interest expense - reverses the impact of premiums/discounts on acquired long-term debt and reestablishes interest expense recognition on a historical cost basis; • Provision for finance receivable losses - reverses the impact of providing an allowance for finance receivable losses upon acquisition and reestablishes the allowance on a historical cost basis and reverses the impact of recognition of net charge-offs on purchased credit impaired finance receivables and reestablishes the net charge-offs on a historical cost basis; • Other revenues - reestablishes the historical cost basis of mark-to-market adjustments on finance receivables held for sale and on realized gains/losses associated with our investment portfolio; • Other expenses - reestablishes expenses on a historical cost basis by reversing the impact of amortization from acquired intangible assets and including amortization of other historical deferred costs; and • Assets - revalues assets based on their fair values at the effective date of the Fortress Acquisition. |
Finance Receivables | Finance Receivables Generally, we classify finance receivables as held for investment based on management’s intent at the time of origination. We determine classification on a loan-by-loan basis. We classify finance receivables as held for investment due to our ability and intent to hold them until their contractual maturities. We carry finance receivables at amortized cost which includes accrued finance charges, net unamortized deferred origination costs and unamortized points and fees, unamortized net premiums and discounts on purchased finance receivables, and unamortized finance charges on precomputed receivables. We include the cash flows from finance receivables held for investment in the consolidated statements of cash flows as investing activities, except for collections of interest, which we include as cash flows from operating activities. We may finance certain insurance products offered to our customers as part of finance receivables. In such cases, the insurance premium is included as an operating cash inflow and the financing of the insurance premium is included as part of the finance receivable as an investing cash flow in the consolidated statements of cash flows. |
Finance Receivable Revenue Recognition | Finance Receivable Revenue Recognition We recognize finance charges as revenue on the accrual basis using the interest method, which we report in interest income. We amortize premiums or accrete discounts on finance receivables as an adjustment to finance charge income using the interest method and contractual cash flows. We defer the costs to originate certain finance receivables and the revenue from nonrefundable points and fees on loans and amortize them as an adjustment to finance charge income using the interest method. We stop accruing finance charges when four contractual payments become past due for personal loans and retail sales contracts and when the sixth contractual payment becomes past due for revolving retail accounts. For finance receivables serviced externally, including real estate loans, we stop accruing finance charges when the third or fourth contractual payment becomes past due depending on the type of receivable and respective third party servicer. We reverse finance charge amounts previously accrued upon suspension of accrual of finance charges. For certain finance receivables that had a carrying value that included a purchase premium or discount, we stop accreting the premium or discount at the time we stop accruing finance charges. We do not reverse accretion of premium or discount that was previously recognized. We recognize the contractual interest portion of payments received on nonaccrual finance receivables as finance charges at the time of receipt. We resume the accrual of interest on a nonaccrual finance receivable when the past due status on the individual finance receivable improves to the point that the finance receivable no longer meets our policy for nonaccrual. At that time we also resume accretion of any unamortized premium or discount resulting from a previous purchase premium or discount. We accrete the amount required to adjust the initial fair value of our finance receivables to their contractual amounts over the life of the related finance receivable for non-credit impaired finance receivables and over the life of a pool of finance receivables for purchased credit impaired finance receivables as described in our policy for purchase credit impaired finance receivables. |
Purchased Credit Impaired Finance Receivables | Purchased Credit Impaired Finance Receivables As part of each of our acquisitions, we identify a population of finance receivables for which it is determined that it is probable that we will be unable to collect all contractually required payments. The population of accounts identified generally consists of those finance receivables that are (i) 60 days or more past due at acquisition, (ii) which had been classified as TDR finance receivables as of the acquisition date, (iii) may have been previously modified, or (iv) had other indications of credit deterioration as of the acquisition date. We accrete the excess of the cash flows expected to be collected on the purchased credit impaired finance receivables over the discounted cash flows (the “accretable yield”) into interest income at a level rate of return over the expected lives of the underlying pools of the purchased credit impaired finance receivables. The underlying pools are based on finance receivables with common risk characteristics. We have established policies and procedures to update on a quarterly basis the amount of cash flows we expect to collect, which incorporates assumptions regarding default rates, loss severities, the amounts and timing of prepayments and other factors that are reflective of then current market conditions. Probable decreases in expected finance receivable cash flows result in the recognition of impairment, which is recognized through the provision for finance receivable losses. Probable significant increases in expected cash flows to be collected would first reverse any previously recorded allowance for finance receivable losses; any remaining increases are recognized prospectively as adjustments to the respective pool’s yield. Our purchased credit impaired finance receivables remain in our purchased credit impaired pools until liquidation or write-off. We do not reclassify modified purchased credit impaired finance receivables as TDR finance receivables. We have additionally established policies and procedures related to maintaining the integrity of these pools. A finance receivable will not be removed from a pool unless we sell, foreclose, or otherwise receive assets in satisfaction of a particular finance receivable or a finance receivable is written-off. If a finance receivable is renewed and additional funds are lent and terms are adjusted to current market conditions, we consider this a new finance receivable and the previous finance receivable is removed from the pool. If the facts and circumstances indicate that a finance receivable should be removed from a pool, that finance receivable will be removed at its allocated carrying amount, and such removal will not affect the yield used to recognize accretable yield of the pool. |
Troubled Debt Restructured Finance Receivables | Troubled Debt Restructured Finance Receivables We make modifications to our personal loans to assist borrowers who are experiencing financial difficulty, are in bankruptcy or are participating in a consumer credit counseling arrangement. We make modifications to our real estate loans to assist borrowers in avoiding foreclosure. 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. We restructure finance receivables only if we believe the customer has the ability to pay under the restructured terms for the foreseeable future. We establish reserves on our TDR finance receivables by discounting the estimated cash flows associated with the respective receivables at the interest rate prior to the modification to the account and record any difference between the discounted cash flows and the carrying value as an allowance adjustment. We may modify the terms of existing accounts in certain circumstances, such as certain bankruptcy or other catastrophic situations or for economic or other reasons related to a borrower’s financial difficulties that justify modification. When we modify an account, we primarily use a combination of the following to reduce the borrower’s monthly payment: reduce interest rate, extend the term, capitalize past due interest or forgive principal or interest. Additionally, as part of the modification, we may require trial payments. If the account is delinquent at the time of modification, the account is brought current for delinquency reporting. Account modifications that are deemed to be a TDR finance receivable are measured for impairment. Account modifications that are not classified as a TDR finance receivable are measured for impairment in accordance with our policy for allowance for finance receivable losses. Finance charges for TDR finance receivables require the application of judgment. We recognize the contractual interest portion of payments received on nonaccrual finance receivables as finance charges at the time of receipt. TDR finance receivables that are placed on nonaccrual status remain on nonaccrual status until the past due status on the individual finance receivable improves to the point that the finance receivable no longer meets our policy for nonaccrual. |
Allowance for Finance Receivable Losses | Allowance for Finance Receivable Losses We establish the allowance for finance receivable losses through the provision for finance receivable losses. We evaluate our finance receivable portfolio by finance receivable type. Our finance receivable types (personal loans, real estate loans, and retail sales finance) consist of a large number of relatively small, homogeneous accounts. We evaluate our finance receivable types for impairment as pools. None of our accounts are large enough to warrant individual evaluation for impairment. Management considers numerous internal and external factors in estimating probable incurred losses in our finance receivable portfolio, including the following: • prior finance receivable loss and delinquency experience; • the composition of our finance receivable portfolio; and • current economic conditions, including the levels of unemployment and personal bankruptcies. We base the allowance for finance receivable losses primarily on historical loss experience using a roll rate-based model applied to our finance receivable portfolios. In our roll rate-based model, our finance receivable types are stratified by contractual delinquency stages (i.e., current, 1-29 days past due, 30-59 days past due, etc.) and projected forward in one-month increments using historical roll rates. In each month of the simulation, losses on our finance receivable types are captured, and the ending delinquency stratification serves as the beginning point of the next iteration. No new volume is assumed. This process is repeated until the number of iterations equals the loss emergence period (the interval of time between the event which causes a borrower to default on a finance receivable and our recording of the charge-off) for our finance receivable types. As delinquency is a primary input into our roll rate-based model, we inherently consider nonaccrual loans in our estimate of the allowance for finance receivable losses. Management exercises its judgment, based on quantitative analyses, qualitative factors, such as recent delinquency and other credit trends, and experience in the consumer finance industry, when determining the amount of the allowance for finance receivable losses. We adjust the amounts determined by the roll rate-based model for management’s estimate of the effects of model imprecision, any changes to underwriting criteria, portfolio seasoning, and current economic conditions, including levels of unemployment and personal bankruptcies. We charge or credit this adjustment to expense through the provision for finance receivable losses. We generally charge off to the allowance for finance receivable losses personal loans that are beyond 180 days past due. To avoid unnecessary real estate loan foreclosures, we may refer borrowers to counseling services, as well as consider a cure agreement, loan modification, voluntary sale (including a short sale), or deed in lieu of foreclosure. When two payments are past due on a collateral dependent real estate loan and it appears that foreclosure may be necessary, we inspect the property as part of assessing the costs, risks, and benefits associated with foreclosure. Generally, we start foreclosure proceedings on real estate loans when four monthly installments are past due. When foreclosure is completed and we have obtained title to the property, we obtain a third-party’s valuation of the property, which is either a full appraisal or a real estate broker’s or appraiser’s estimate of the property sale value without the benefit of a full interior and exterior appraisal and lacking sales comparisons. Such appraisals or real estate brokers’ or appraisers’ estimate of value are one factor considered in establishing an appropriate valuation; however, we are ultimately responsible for the valuation established. We reduce finance receivables by the amount of the real estate loan, establish a real estate owned asset, and charge off any loan amount in excess of that value to the allowance for finance receivable losses. We infrequently extend the charge-off period for individual personal and real estate loan accounts when, in our opinion, such treatment is warranted and consistent with our credit risk policies. We may renew a delinquent account if the customer meets current underwriting criteria and it does not appear that the cause of past delinquency will affect the customer’s ability to repay the new loan. We subject all renewals to the same credit risk underwriting process as we would a new application for credit. For our personal loans and retail sales finance receivables, we may offer those customers whose accounts are in good standing the opportunity of a deferment, which extends the term of an account. We may extend this offer to customers when they are experiencing higher than normal personal expenses. Generally, this offer is not extended to customers who are delinquent. However, we may offer a deferment to a delinquent customer who is experiencing a temporary financial problem. The account is considered current upon granting the deferment. To evaluate whether a borrower’s financial difficulties are temporary or other than temporary we review the terms of each deferment to ensure that the borrower has the financial ability to repay the outstanding principal and associated interest in full following the deferment and after the customer is brought current. If, following this analysis, we believe a borrower’s financial difficulties are other than temporary, we will not grant deferment, and the loans may continue to age until they are charged off. We generally limit a customer to two deferments in a rolling twelve month period unless we determine that an exception is warranted and is consistent with our credit risk policies. For our real estate loans, we may offer a deferment to a delinquent customer who is experiencing a temporary financial problem, which extends the term of an account. Prior to granting the deferment, we may require a partial payment. We forebear the remaining past due interest when the deferment is granted for real estate loans that were originated or acquired centrally. The account is considered current upon granting the deferment. We generally limit a customer to two deferments in a rolling twelve month period for real estate loans that were originated at our branch offices ( one deferment for real estate loans that were originated or acquired centrally) unless we determine that an exception is warranted and is consistent with our credit risk policies. Accounts that are granted a deferment are not classified as troubled debt restructurings. We do not consider deferments granted as a troubled debt restructuring because the customer is not experiencing an other than temporary financial difficulty, and we are not granting a concession to the customer or the concession granted is immaterial to the contractual cash flows. We pool accounts that have been granted a deferment together with accounts that have not been granted a deferment for measuring impairment in accordance with the authoritative guidance for the accounting for contingencies. The allowance for finance receivable losses related to our purchased credit impaired finance receivables is calculated using updated cash flows expected to be collected, incorporating assumptions regarding default rates, loss severities, the amounts and timing of prepayments and other factors that are reflective of current market conditions. Probable decreases in expected finance receivable cash flows result in the recognition of impairment. Probable and significant increases in expected cash flows to be collected would first reverse any previously recorded allowance for finance receivable losses. We also establish reserves for TDR finance receivables, which are included in our allowance for finance receivable losses. 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 severity rates. |
Finance Receivables Held for Sale | Finance Receivables Held for Sale Depending on market conditions or certain of management’s capital sourcing strategies, which may impact our ability and/or intent to hold our finance receivables until maturity or for the foreseeable future, we may decide to sell finance receivables originally intended for investment. Our ability to hold finance receivables for the foreseeable future is subject to a number of factors, including economic and liquidity conditions, and therefore may change. As of each reporting period, management determines our ability to hold finance receivables for the foreseeable future based on assumptions for liquidity requirements or other strategic goals. When it is probable that management’s intent or ability is to no longer hold finance receivables for the foreseeable future and we subsequently decide to sell specifically identified finance receivables that were originally classified as held for investment, the net finance receivables, less allowance for finance receivable losses, are reclassified as finance receivables held for sale and are carried at the lower of cost or fair value. Any amount by which cost exceeds fair value is accounted for as a valuation allowance and is recognized in other revenues in the consolidated statements of operations. We base the fair value estimates on negotiations with prospective purchasers (if any) or by using a discounted cash flows approach. We base cash flows on contractual payment terms adjusted for estimates of prepayments and credit related losses. Cash flows resulting from the sale of the finance receivables that were originally classified as held for investment are recorded as an investing activity in the consolidated statements of cash flows. When sold, we record the sales price we receive less our carrying value of these finance receivables held for sale in other revenues. When it is determined that management no longer intends to sell finance receivables which had previously been classified as finance receivables held for sale and we have the ability to hold the finance receivables for the foreseeable future, we reclassify the finance receivables to finance receivables held for investment at the lower of cost or fair value and we accrete any fair value adjustment over the remaining life of the related finance receivables. |
Reserve for Sales Recourse Obligations | Reserve for Sales Recourse Obligations When we sell finance receivables, we may establish a reserve for sales recourse in other liabilities, which represents our estimate of losses to be: (a) incurred by us on the repurchase of certain finance receivables that we previously sold; and (b) incurred by us for the indemnification of losses incurred by purchasers. Certain sale contracts include provisions requiring us to repurchase a finance receivable or indemnify the purchaser for losses it sustains with respect to a finance receivable if a borrower fails to make initial loan payments to the purchaser or if the accompanying mortgage loan breaches certain customary representations and warranties. These representations and warranties are made to the purchaser with respect to various characteristics of the finance receivable, such as the manner of origination, the nature and extent of underwriting standards applied, the types of documentation being provided, and, in limited instances, reaching certain defined delinquency limits. Although the representations and warranties are typically in place for the life of the finance receivable, we believe that most repurchase requests occur within the first five years of the sale of a finance receivable. In addition, an investor may request that we refund a portion of the premium paid on the sale of mortgage loans if a loan is prepaid within a certain amount of time from the date of sale. At the time of the sale of each finance receivable (exclusive of finance receivables included in our on-balance sheet securitizations), we record a provision for recourse obligations for estimated repurchases, loss indemnification and premium recapture on finance receivables sold, which is charged to other revenues. Any subsequent adjustments resulting from changes in estimated recourse exposure are recorded in other revenues. |
Other Intangible Assets | Other Intangible Assets At the time we initially recognize intangible assets, a determination is made with regard to each asset as it relates to its useful life. We have determined that each of our intangible assets has a finite useful life with the exception of the insurance licenses and certain domain names, which we have determined to have indefinite lives. For intangible assets with a finite useful life, we review for impairment at least annually and whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Impairment is indicated if the sum of undiscounted estimated future cash flows is less than the carrying value of the respective asset. Impairment is permanently recognized by writing down the asset to the extent that the carrying value exceeds the estimated fair value. The VOBA is the PVFP of purchased insurance contracts. The PVFP is dynamically amortized over the lifetime of the block of business and is subject to premium deficiency testing in accordance with Accounting Standards Codification (“ASC”) Topic 944, Financial Services — Insurance . For indefinite lived intangible assets, 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 impaired, we proceed with the fair value calculation of the assets. The fair value is determined in accordance with our fair value measurement policy. If the fair value is less than the carrying value, an impairment loss will be recognized in an amount equal to the difference and the indefinite life classification will be evaluated to determine whether such classification remains appropriate. |
Insurance Premiums | Insurance Premiums We recognize revenue for short-duration contracts over the related contract period. Short-duration contracts primarily include credit life, credit disability, credit involuntary unemployment insurance, and collateral protection policies. We defer single premium credit insurance premiums from affiliates in unearned premium reserves which we include as a reduction to net finance receivables. We recognize unearned premiums on credit life, credit disability, credit involuntary unemployment insurance and collateral protection insurance as revenue using the sum-of-the-digits, straight-line or other appropriate methods over the terms of the policies. Premiums from reinsurance assumed are earned over the related contract period. We recognize revenue on long-duration contracts when due from policyholders. Long-duration contracts include term life, accidental death and dismemberment, and disability income protection. For single premium long-duration contracts a liability is accrued, that represents the present value of estimated future policy benefits to be paid to or on behalf of policyholders and related expenses, when premium revenue is recognized. The effects of changes in such estimated future policy benefit reserves are classified in insurance policy benefits and claims in the consolidated statements of operations. We recognize commissions on ancillary products as other revenue when earned. We may finance certain insurance products offered to our customers as part of finance receivables. In such cases, unearned premiums and certain unpaid claim liabilities related to our borrowers are netted and classified as contra-assets in the net finance receivables in the consolidated balance sheets, and the insurance premium is included as an operating cash inflow and the financing of the insurance premium is included as part of the finance receivable as an investing cash flow in the consolidated statements of cash flows. |
Policy and Claim Reserves | Policy and Claim Reserves Policy reserves for credit life, credit disability, credit involuntary unemployment, and collateral protection insurance equal related unearned premiums. Reserves for losses and loss adjustment expenses are based on claims experience, actual claims reported, and estimates of claims incurred but not reported. Assumptions utilized in determining appropriate reserves are based on historical experience, adjusted to provide for possible adverse deviation. These estimates are periodically reviewed and compared with actual experience and industry standards, and revised if it is determined that future experience will differ substantially from that previously assumed. Since reserves are based on estimates, the ultimate liability may be more or less than such reserves. The effects of changes in such estimated reserves are classified in insurance policy benefits and claims in the consolidated statements of operations in the period in which the estimates are changed. We accrue liabilities for future life insurance policy benefits associated with non-credit life contracts and base the amounts on assumptions as to investment yields, mortality, and surrenders. We base annuity reserves on assumptions as to investment yields and mortality. Ceded insurance reserves are included in other assets and include estimates of the amounts expected to be recovered from reinsurers on insurance claims and policyholder liabilities. |
Insurance Policy Acquisition Costs | Insurance Policy Acquisition Costs We defer insurance policy acquisition costs (primarily commissions, reinsurance fees, and premium taxes). We include deferred policy acquisition costs in other assets and amortize these costs over the terms of the related policies, whether directly written or reinsured. |
Investment Securities | Investment Securities We generally classify our investment securities as available-for-sale or trading and other, depending on management’s intent. Our investment securities classified as available-for-sale are recorded at fair value. We adjust related balance sheet accounts to reflect the current fair value of investment securities and record the adjustment, net of tax, in accumulated other comprehensive income or loss in shareholder’s equity. We record interest receivable on investment securities in other assets. Under the fair value option, we may elect to measure at fair value, financial assets that are not otherwise required to be carried at fair value. We elect the fair value option for available-for-sale securities that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value the derivative. We recognize any changes in fair value in investment revenues. We classify our investment securities in the fair value hierarchy framework based on the observability of inputs. Inputs to the valuation techniques are described as being either observable (Level 1 or 2) or unobservable (Level 3) assumptions (as further described in “Fair Value Measurements” below) that market participants would use in pricing an asset or liability. Impairments on Investment Securities Available-for-sale. We evaluate our available-for-sale securities on an individual basis to identify any instances where the fair value of the investment security is below its amortized cost. For these securities, we then evaluate whether an other-than-temporary impairment exists if any of the following conditions are present: • we intend to sell the security; • it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis; or • we do not expect to recover the security’s entire amortized cost basis (even if we do not intend to sell the security). If we intend to sell an impaired investment security or we will likely be required to sell the security before recovery of its amortized cost basis less any current period credit loss, we recognize an other-than-temporary impairment in investment revenues equal to the difference between the investment security’s amortized cost and its fair value at the balance sheet date. In determining whether a credit loss exists, we compare our best estimate of the present value of the cash flows expected to be collected from the security to the amortized cost basis of the security. Any shortfall in this comparison represents a credit loss. The cash flows expected to be collected are determined by assessing all available information, including length and severity of unrealized loss, issuer default rate, ratings changes and adverse conditions related to the industry sector, financial condition of issuer, credit enhancements, collateral default rates, and other relevant criteria. Management considers factors such as our investment strategy, liquidity requirements, overall business plans, and recovery periods for securities in previous periods of broad market declines. If a credit loss exists with respect to an investment in a security (i.e., we do not expect to recover the entire amortized cost basis of the security), we would be unable to assert that we will recover our amortized cost basis even if we do not intend to sell the security. Therefore, in these situations, an other-than-temporary impairment is considered to have occurred. If a credit loss exists, but we do not intend to sell the security and we will likely not be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the impairment is classified as: (i) the estimated amount relating to credit loss; and (ii) the amount relating to all other factors. We recognize the estimated credit loss in investment revenues, and the non-credit loss amount in accumulated other comprehensive income or loss. Once a credit loss is recognized, we adjust the investment security to a new amortized cost basis equal to the previous amortized cost basis less the credit losses recognized in investment revenues. For investment securities for which other-than-temporary impairments were recognized in investment revenues, the difference between the new amortized cost basis and the cash flows expected to be collected is accreted to investment income. We recognize subsequent increases and decreases in the fair value of our available-for-sale securities in accumulated other comprehensive income or loss, unless the decrease is considered other than temporary. Investment Revenue Recognition We recognize interest on interest bearing fixed-maturity investment securities as revenue on the accrual basis. We amortize any premiums or accrete any discounts as a revenue adjustment using the interest method. We stop accruing interest revenue when the collection of interest becomes uncertain. We record dividends on equity securities as revenue on ex-dividend dates. We recognize income on mortgage-backed and asset-backed securities as revenue using an effective yield based on estimated prepayments of the underlying collateral. If actual prepayments differ from estimated prepayments, we calculate a new effective yield and adjust the net investment in the security accordingly. We record the adjustment, along with all investment securities revenue, in investment revenues. We specifically identify realized gains and losses on investment securities and include them in investment revenues. |
Variable Interest Entities | Variable Interest Entities An entity is a VIE if the entity does not have sufficient equity at risk for the entity to finance its activities without additional financial support or has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated into the financial statements of its primary beneficiary. When we have a variable interest in a VIE, we qualitatively assess whether we have a controlling financial interest in the entity and, if so, whether we are the primary beneficiary. In applying the qualitative assessment to identify the primary beneficiary of a VIE, we are determined to have a controlling financial interest if we have (i) the power to direct the activities that most significantly impact the economic performance of the VIE, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We consider the VIE’s purpose and design, including the risks that the entity was designed to create and pass through to its variable interest holders. We continually reassess the VIE’s primary beneficiary and whether we have acquired or divested the power to direct the activities of the VIE through changes in governing documents or other circumstances. |
Other Invested Assets | Other Invested Assets Commercial mortgage loans and insurance policy loans are part of our investment portfolio and we include them in other assets at amortized cost. We recognize interest on commercial mortgage loans and insurance policy loans as revenue on the accrual basis using the interest method. We stop accruing revenue when collection of interest becomes uncertain. We include other invested asset revenue in investment revenues. We record accrued other invested asset revenue receivable in other assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider unrestricted cash on hand and short-term investments having maturity dates within three months of their date of acquisition to be cash and cash equivalents. We typically maintain cash in financial institutions in excess of the Federal Deposit Insurance Corporation’s insurance limits. We evaluate the creditworthiness of these financial institutions in determining the risk associated with these cash balances. We do not believe that the Company is exposed to any significant credit risk on these accounts and have not experienced any losses in such accounts. |
Restricted Cash and Cash Equivalents | Restricted Cash and Cash Equivalents We include funds to be used for future debt payments relating to our securitization transactions and escrow deposits in restricted cash and cash equivalents. |
Long-term Debt | Long-term Debt We generally report our long-term debt issuances at the face value of the debt instrument, which we adjust for any unaccreted discount, unamortized premium, or unamortized debt issuance costs associated with the debt. Other than securitized products, we generally accrete discounts, premiums, and debt issuance costs over the contractual life of the security using contractual payment terms. With respect to securitized products, we have elected to amortize deferred costs over the contractual life of the security. Accretion of discounts and premiums are recorded to interest expense. |
Income Taxes | Income Taxes We recognize income taxes using the asset and liability method. We establish deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of assets and liabilities, using the tax rates expected to be in effect when the temporary differences reverse. Deferred tax assets are also recognized for tax attributes such as net operating loss carryforwards. Realization of our gross deferred tax asset depends on our ability to generate sufficient taxable income of the appropriate character within the carryforward periods of the jurisdictions in which the net operating and capital losses, deductible temporary differences and credits were generated. When we assess our ability to realize deferred tax assets, we consider all available evidence and we record valuation allowances to reduce deferred tax assets to the amounts that management conclude are more-likely-than-not to be realized. We recognize income tax benefits associated with uncertain tax positions, when, in our judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more likely than not recognition threshold, we initially and subsequently measure the tax benefit as the largest amount that we judge to have a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority. The Tax Act was enacted on December 22, 2017 and we must reflect the changes associated with its provisions in 2017. The law is complex and has extensive implications for our federal and state current and deferred taxes and income tax expense. We recorded and reported the effects of the Tax Act in our financial statements in 2017. For further information, see Note 18 of the Notes to Consolidated Financial Statements included in this report. |
Benefit Plans | Benefit Plans We have funded and unfunded noncontributory defined pension plans. We recognize the net pension asset or liability, also referred to herein as the funded status of the benefit plans, in other assets or other liabilities, depending on the funded status at the end of each reporting period. We recognize the net actuarial gains or losses and prior service cost or credit that arise during the period in other comprehensive income or loss. Many of our employees are participants in our 401(k) plan. Our contributions to the plan are charged to salaries and benefits within operating expenses. |
Share-based Compensation Plans | Share-based Compensation Plans We measure compensation cost for service-based and performance-based awards at estimated fair value and recognize compensation expense over the requisite service period for awards expected to vest. The estimation of awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment to salaries and benefits in the period estimates are revised. For service-based awards subject to graded vesting, expense is recognized under the straight-line method. Expense for performance-based awards with graded vesting is recognized under the accelerated method, whereby each vesting is treated as a separate award with expense for each vesting recognized ratably over the requisite service period. |
Fair Value Measurements | Fair Value Measurements Management is responsible for the determination of the fair value of our financial assets and financial liabilities and the supporting methodologies and assumptions. We employ widely accepted internal valuation models 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 accepted internal valuation models. Our valuation process typically requires obtaining data about market transactions and other key valuation model inputs from internal or external sources and, through the use of widely accepted valuation models, provides a single fair value measurement for individual securities or pools of finance receivables. The inputs used in this process include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, bid-ask spreads, currency rates, and other market-observable information as of the measurement date as well as the specific attributes of the security being valued, including its term, interest rate, credit rating, industry sector, and other issue or issuer-specific information. When market transactions or other market observable data is limited, the extent to which judgment is applied in determining fair value is greatly increased. We assess the reasonableness of individual security values received from our valuation service providers through various analytical techniques. As part of our internal price reviews, assets that fall outside a price change tolerance are sent to our third-party investment manager for further review. In addition, we may validate the reasonableness of fair values by comparing information obtained from our valuation service providers to other third-party valuation sources for selected securities. We measure and classify assets and liabilities in the consolidated balance sheets in a hierarchy for disclosure purposes consisting of three “Levels” based on the observability of inputs available in the market place used to measure the fair values. In general, we determine the fair value measurements classified as Level 1 based on inputs utilizing quoted prices in active markets for identical assets or liabilities that we have the ability to access. We generally obtain market price data from exchange or dealer markets. We do not adjust the quoted price for such instruments. We determine the fair value measurements classified as Level 2 based on inputs utilizing other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The use of observable and unobservable inputs is further discussed in Note 23 . In certain cases, the inputs we use to measure the fair value of an asset may fall into different levels of the fair value hierarchy. In such cases, we determine the level in the fair value hierarchy within which the fair value measurement in its entirety falls based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. We recognize transfers into and out of each level of the fair value hierarchy as of the end of the reporting period. Our fair value processes include controls that are designed to ensure that fair values are appropriate. Such controls include model validation, review of key model inputs, analysis of period-over-period fluctuations, and reviews by senior management. |
Accounting Pronouncements Recently Adopted and To Be Adopted | ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Investments In March of 2016, the FASB issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting, which eliminates the requirement that, when an investment qualifies for use of the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method of accounting had been in effect during all previous periods that the investment had been held. The ASU requires that an entity that has available-for-sale securities recognize, through earnings, the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method of accounting. The amendment in this ASU became effective prospectively for the Company for fiscal periods beginning January 1, 2017. We have adopted this ASU as of January 1, 2017 and concluded that it does not have an impact on our consolidated financial statements. Statement of Cash Flows In November of 2016, the FASB issued ASU 2016-18, Statement of Cash Flows , which simplifies the presentation of restricted cash on the statement of cash flows by requiring entities to include restricted cash and restricted cash equivalents in the reconciliation of cash and cash equivalents. The amendments in this ASU become effective for the Company for fiscal years beginning January 1, 2018. We elected to early adopt this ASU as of January 1, 2017 and presented this change on a retrospective basis for all periods presented. We concluded that this ASU does not have a material impact on our consolidated financial statements. Technical Corrections and Improvements In January of 2017, the FASB issued ASU 2017-03, Accounting Changes and Error Corrections , to enhance the footnote disclosure guidelines for ASUs 2014-09, 2016-02, and 2016-13. The amendments to this transition guidance became effective for the Company for fiscal years beginning January 1, 2017. We have adopted this ASU as of January 1, 2017 on a prospective basis. We concluded that this ASU does not have a material impact on our consolidated financial statements. Business Combinations In January of 2017, the FASB issued ASU 2017-01, Business Combinations , to clarify the definition of a business, which establishes a process to determine when an integrated set of assets and activities can be deemed a business combination. The amendments in this ASU became effective for the Company for annual periods beginning January 1, 2018. We elected to early adopt this ASU as of April 1, 2017 on a prospective basis. We concluded that the adoption of this ASU does not have a material impact on our consolidated financial statements. ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED Revenue Recognition In May of 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides a consistent revenue accounting model across industries. Management has reviewed this update and other ASU’s that were subsequently issued to further clarify the implementation guidance outlined in ASU 2014-09. The Company will adopt this ASU effective January 1, 2018. The Company’s implementation efforts included the identification of revenue streams that are within the scope of the new guidance and the review of related contracts with customers to determine their effect on certain non-interest income items presented in our consolidated statements of operations and the additional presentation disclosures required. We concluded that substantially all of the Company’s revenues are generated from activities that are outside the scope of this ASU, and the adoption will not have a material impact on our consolidated financial statements. Financial Instruments In January of 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which simplifies the impairment assessment of equity investments. The update requires equity investments to be measured at fair value with changes recognized in net income. This ASU eliminates the requirement to disclose the methods and assumptions to estimate fair value for financial instruments, requires the use of the exit price for disclosure purposes, requires the change in liability due to a change in credit risk to be presented in other comprehensive income, requires separate presentation of financial assets and liabilities by measurement category and form of asset (securities and loans), and clarifies the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. The amendments in this ASU become effective for fiscal periods beginning January 1, 2018 using a cumulative-effect adjustment to the balance sheet. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) shall be applied prospectively to equity investments that exist as of the date of adoption of this update. We concluded the adoption of this ASU will not have a material impact on our consolidated financial statements. In March of 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs , which amends the amortization period for certain purchased callable debt securities held at a premium. This ASU shortens the amortization period for the premium from the adjustment of yield over the contractual life of the instrument to the earliest call date. The amendments in this ASU become effective for the Company for fiscal years beginning January 1, 2019. We believe the adoption of this ASU will not have a material impact on our consolidated financial statements. Leases In February of 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to recognize a right-of-use asset and a liability for the obligation to make payments on leases with terms greater than 12 months and to disclose information related to the amount, timing and uncertainty of cash flows arising from leases, including various qualitative and quantitative requirements. The amendments in this ASU become effective for the Company for fiscal periods beginning January 1, 2019. The Company’s cross-functional implementation team has developed a project plan to ensure we comply with all updates from this ASU at the time of adoption. We are currently in the process of importing all identified leases into a new leasing system that will allow us to better account for the leases in accordance with the new guidance. We are assessing new system updates to ensure both qualitative and quantitative data requirements will be met at the time of adoption. The Company’s leases primarily consist of leased office space, automobiles and information technology equipment. At December 31, 2017, the Company had $43 million of minimum lease commitments from these operating leases (refer to Note 19). We believe the adoption of this ASU will have a material effect on our consolidated financial statements, and we are in the process of quantifying the expected impact. Allowance for Finance Receivables Losses In June of 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, w hich significantly changes the way that entities will be required to measure credit losses. The new standard requires that the estimated credit loss be based upon an “expected credit loss” approach rather than the “incurred loss” approach currently required. The new approach will require entities to measure all expected credit losses for financial assets based on historical experience, current conditions, and reasonable forecasts of collectability. It is anticipated that the expected credit loss model will require earlier recognition of credit losses than the incurred loss approach. The ASU requires that credit losses for purchased financial assets with a more-than-insignificant amount of credit deterioration since origination that are measured at amortized cost basis be determined in a similar manner to other financial assets measured at amortized cost basis; however, the initial allowance for credit losses is added to the purchase price of the financial asset rather than being reported as a credit loss expense. Subsequent changes in the allowance for credit losses are recorded in earnings. Interest income should be recognized based on the effective rate, excluding the discount embedded in the purchase price attributable to expected credit losses at acquisition. The ASU also requires companies to record allowances for held-to-maturity and available-for-sale debt securities rather than write-downs of such assets. In addition, the ASU requires qualitative and quantitative disclosures that provide information about the allowance and the significant factors that influenced management’s estimate of the allowance. The ASU will become effective for the Company for fiscal years beginning January 1, 2020. Early adoption is permitted for fiscal years beginning January 1, 2019. The Company’s cross-functional implementation team has developed a project plan to ensure we comply with all updates from this ASU at the time of adoption. We continue to make progress in developing an acceptable model to estimate the expected credit losses. After the model has been reviewed and validated in accordance with our governance policies, the Company will provide further disclosure regarding the estimated impact on our allowance for finance receivables losses. In addition to the development of the model, we are assessing the additional disclosure requirements from this update. We believe the adoption of this ASU will have a material effect on our consolidated financial statements, and we are in the process of quantifying the expected impacts. Statement of Cash Flows In August of 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments , which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU will become effective for the Company for fiscal years beginning January 1, 2018. We concluded the adoption of this ASU will not have a material impact on our consolidated financial statements. Income Taxes In October of 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory , which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this ASU will become effective for the Company for annual reporting periods beginning January 1, 2018. We concluded the adoption of this ASU will not have a material impact on our consolidated financial statements. Compensation and Benefits In March of 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , to improve the presentation of the net periodic pension cost and net periodic postretirement benefit costs. It requires that a company present the service cost component separately from other components of net benefit cost on the income statement. The amendments in this ASU become effective for the Company for fiscal periods beginning January 1, 2018. We concluded the adoption of this ASU will not have a material impact on our consolidated financial statements. In May of 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting , which provides guidance on which changes to the terms or conditions of a share-based payment award requires an entity to apply modification accounting. The amendments in this ASU become effective for the Company for annual periods beginning January 1, 2018. We concluded the adoption of this ASU will not have a material impact on our consolidated financial statements. We do not believe that any other accounting pronouncements issued during 2017, but not yet effective, would have a material impact on our consolidated financial statements or disclosures, if adopted. |
Finance Receivables (Tables)
Finance Receivables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of components of net finance receivables by type | Components of net finance receivables held for investment by type were as follows: (dollars in millions) Personal Loans Real Estate Loans Retail Sales Finance Total December 31, 2017 Gross receivables * $ 5,858 $ 127 $ 7 $ 5,992 Unearned finance charges and points and fees (676 ) — (1 ) (677 ) Accrued finance charges 78 1 — 79 Deferred origination costs 48 — — 48 Total $ 5,308 $ 128 $ 6 $ 5,442 December 31, 2016 Gross receivables * $ 5,449 $ 142 $ 12 $ 5,603 Unearned finance charges and points and fees (754 ) 1 (1 ) (754 ) Accrued finance charges 63 1 — 64 Deferred origination costs 46 — — 46 Total $ 4,804 $ 144 $ 11 $ 4,959 * Gross receivables are defined as follows: • Finance receivables purchased as a performing receivable — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts. Additionally, the remaining unearned premium, net of discount established at the time of purchase, is included in both interest bearing and precompute accounts to reflect the finance receivable balance at its initial fair value; • Finance receivables originated subsequent to the Fortress Acquisition — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; • Purchased credit impaired finance receivables — gross finance receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts; and • TDR finance receivables —gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts. Additionally, the remaining unearned premium, net of discount established at the time of purchase, is included in both interest bearing and precompute accounts previously purchased as a performing receivable. |
Schedule of largest concentrations of net finance receivables | The largest concentrations of net finance receivables were as follows: December 31, 2017 2016 * (dollars in millions) Amount Percent Amount Percent Illinois $ 481 9 % $ 400 8 % Indiana 428 8 360 7 North Carolina 426 8 398 8 California 323 6 298 6 Georgia 304 6 276 6 Florida 301 6 254 5 Texas 295 5 288 6 Ohio 294 5 266 5 Virginia 284 5 266 5 South Carolina 275 5 254 5 Pennsylvania 252 5 255 5 Other 1,779 32 1,644 34 Total $ 5,442 100 % $ 4,959 100 % * December 31, 2016 concentrations of net finance receivables are presented in the order of December 31, 2017 state concentrations. |
Summary of net finance receivables by type by days delinquent | The following is a summary of net finance receivables held for investment by type and by number of days delinquent: (dollars in millions) Personal Loans Real Estate Loans Retail Sales Finance Total December 31, 2017 Performing: Current $ 5,063 $ 98 $ 6 $ 5,167 30-59 days past due 75 8 — 83 60-89 days past due 55 3 — 58 Total performing 5,193 109 6 5,308 Nonperforming: 90-179 days past due 112 4 — 116 180 days or more past due 3 15 — 18 Total nonperforming 115 19 — 134 Total $ 5,308 $ 128 $ 6 $ 5,442 December 31, 2016 Performing: Current $ 4,579 $ 102 $ 11 $ 4,692 30-59 days past due 64 9 — 73 60-89 days past due 45 4 — 49 Total performing 4,688 115 11 4,814 Nonperforming: 90-179 days past due 112 8 — 120 180 days or more past due 4 21 — 25 Total nonperforming 116 29 — 145 Total $ 4,804 $ 144 $ 11 $ 4,959 |
Schedule of information regarding purchased credit impaired finance receivables | Information regarding our purchased credit impaired FA Loans held for investment and held for sale were as follows: (dollars in millions) December 31, 2017 2016 FA Loans (a) Carrying amount, net of allowance $ 57 $ 70 Outstanding balance (b) 94 107 Allowance for purchased credit impaired finance receivable losses 9 8 (a) Purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) December 31, 2017 2016 Carrying amount $ 44 $ 54 Outstanding balance 72 83 (b) Outstanding balance is defined as UPB of the loans with a net carrying amount. |
Schedule of Purchased credit impaired FA Loans held for sale | Purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) December 31, 2017 2016 Carrying amount $ 44 $ 54 Outstanding balance 72 83 |
Schedule of changes in accretable yield for purchased credit impaired finance receivables | Changes in accretable yield for purchased credit impaired finance receivables held for investment and held for sale were as follows: (dollars in millions) SCP Loans FA Loans Total Year Ended December 31, 2017 Balance at beginning of period $ — $ 60 $ 60 Accretion (a) — (5 ) (5 ) Reclassifications to nonaccretable difference (b) — (2 ) (2 ) Balance at end of period $ — $ 53 $ 53 Year Ended December 31, 2016 Balance at beginning of period $ 375 $ 66 $ 441 Accretion (a) (16 ) (7 ) (23 ) Reclassifications from nonaccretable difference (b) — 12 12 Transfers due to finance receivables sold (359 ) (11 ) (370 ) Balance at end of period $ — $ 60 $ 60 Year Ended December 31, 2015 Balance at beginning of period $ 452 $ 54 $ 506 Accretion (a) (77 ) (8 ) (85 ) Reclassifications from nonaccretable difference (b) — 20 20 Balance at end of period $ 375 $ 66 $ 441 (a) Accretion on our purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Accretion $ 4 $ 5 $ 6 (b) Reclassifications from (to) nonaccretable difference represents the increases (decreases) in accretable yield resulting from higher (lower) estimated undiscounted cash flows. |
Schedule of Accretion on our purchased credit impaired FA Loans held for sale | Accretion on our purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Accretion $ 4 $ 5 $ 6 |
Schedule of Troubled Debt Restructurings, Held for Investments and Held for Sale | Information regarding TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans Real Estate Total December 31, 2017 TDR gross finance receivables $ 112 $ 139 $ 251 TDR net finance receivables 111 140 251 Allowance for TDR finance receivable losses 44 12 56 December 31, 2016 TDR gross finance receivables $ 47 $ 133 $ 180 TDR net finance receivables 47 134 181 Allowance for TDR finance receivable losses 20 11 31 (a) TDR real estate loans held for sale included in the table above were as follows: (dollars in millions) December 31, 2017 2016 TDR gross finance receivables $ 90 $ 89 TDR net finance receivables 91 90 (b) As defined earlier in this Note. |
Schedule of TDR finance receivables held for sale (gross, net and allowance) | TDR real estate loans held for sale included in the table above were as follows: (dollars in millions) December 31, 2017 2016 TDR gross finance receivables $ 90 $ 89 TDR net finance receivables 91 90 |
Schedule of TDR average net receivables and finance charges recognized on TDR finance receivables | TDR average net receivables held for investment and held for sale and finance charges recognized on TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total Year Ended December 31, 2017 TDR average net receivables $ 79 $ — $ 140 $ 219 TDR finance charges recognized 8 — 9 17 Year Ended December 31, 2016 TDR average net receivables $ 36 $ — $ 175 $ 211 TDR finance charges recognized 3 — 11 14 Year Ended December 31, 2015 TDR average net receivables $ 29 $ 12 $ 198 $ 239 TDR finance charges recognized 3 1 11 15 (a) TDR personal loans held for sale included in the table above were immaterial. (b) TDR real estate loans held for sale included in the table above were as follows: (dollars in millions) Real Estate Year Ended December 31, 2017 TDR average net receivables $ 91 TDR finance charges recognized 6 Year Ended December 31, 2016 TDR average net receivables $ 102 TDR finance charges recognized 6 Year Ended December 31, 2015 TDR average net receivables $ 91 TDR finance charges recognized 5 |
Schedule of trouble debt restructuring average held for sale | TDR real estate loans held for sale included in the table above were as follows: (dollars in millions) Real Estate Year Ended December 31, 2017 TDR average net receivables $ 91 TDR finance charges recognized 6 Year Ended December 31, 2016 TDR average net receivables $ 102 TDR finance charges recognized 6 Year Ended December 31, 2015 TDR average net receivables $ 91 TDR finance charges recognized 5 |
Schedule of information regarding new volume of the TDR finance receivables | Information regarding the new volume of the TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total Year Ended December 31, 2017 Pre-modification TDR net finance receivables $ 124 $ — $ 16 $ 140 Post-modification TDR net finance receivables: Rate reduction $ 93 $ — $ 16 $ 109 Other (c) 30 — — 30 Total post-modification TDR net finance receivables $ 123 $ — $ 16 $ 139 Number of TDR accounts 22,500 — 510 23,010 Year Ended December 31, 2016 Pre-modification TDR net finance receivables $ 49 $ 1 $ 16 $ 66 Post-modification TDR net finance receivables: Rate reduction $ 31 $ 1 $ 16 $ 48 Other (c) 12 — 1 13 Total post-modification TDR net finance receivables $ 43 $ 1 $ 17 $ 61 Number of TDR accounts 9,517 157 364 10,038 Year Ended December 31, 2015 Pre-modification TDR net finance receivables $ 33 $ 7 $ 21 $ 61 Post-modification TDR net finance receivables: Rate reduction $ 15 $ 6 $ 17 $ 38 Other (c) 12 — 5 17 Total post-modification TDR net finance receivables $ 27 $ 6 $ 22 $ 55 Number of TDR accounts 6,515 721 385 7,621 (a) TDR personal loans held for sale included in the table above were immaterial. (b) TDR real estate loans held for sale included in the table above were as follows: (dollars in millions) Real Estate Loans Year Ended December 31, 2017 Pre-modification TDR net finance receivables $ 6 Post-modification TDR net finance receivables $ 7 Number of TDR accounts 232 Year Ended December 31, 2016 Pre-modification TDR net finance receivables $ 5 Post-modification TDR net finance receivables $ 5 Number of TDR accounts 122 Year Ended December 31, 2015 Pre-modification TDR net finance receivables $ 6 Post-modification TDR net finance receivables $ 7 Number of TDR accounts 113 (c) “Other” modifications primarily include forgiveness of principal or interest. |
Schedule Of Information Regarding New Volume Of TDR Finance Receivables Held For Sale | TDR real estate loans held for sale included in the table above were as follows: (dollars in millions) Real Estate Loans Year Ended December 31, 2017 Pre-modification TDR net finance receivables $ 6 Post-modification TDR net finance receivables $ 7 Number of TDR accounts 232 Year Ended December 31, 2016 Pre-modification TDR net finance receivables $ 5 Post-modification TDR net finance receivables $ 5 Number of TDR accounts 122 Year Ended December 31, 2015 Pre-modification TDR net finance receivables $ 6 Post-modification TDR net finance receivables $ 7 Number of TDR accounts 113 |
Schedule of net finance receivables that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause TDR finance receivables to be considered nonperforming | Net finance receivables held for investment and held for sale that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause the TDR finance receivables to be considered nonperforming ( 90 days or more past due) were as follows: (dollars in millions) Personal Loans SpringCastle Portfolio Real Estate Total Year Ended December 31, 2017 TDR net finance receivables (b) $ 37 $ — $ 4 $ 41 Number of TDR accounts 8,113 — 101 8,214 Year Ended December 31, 2016 TDR net finance receivables (b) (c) $ 6 $ — $ 3 $ 9 Number of TDR accounts 1,409 19 61 1,489 Year Ended December 31, 2015 TDR net finance receivables (b) $ 5 $ 2 $ 3 $ 10 Number of TDR accounts 1,221 147 46 1,414 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Real Estate Year Ended December 31, 2017 TDR net finance receivables $ 2 Number of TDR accounts 53 Year Ended December 31, 2016 TDR net finance receivables $ 2 Number of TDR accounts 30 Year Ended December 31, 2015 TDR net finance receivables $ 1 Number of TDR accounts 17 (b) Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. (c) TDR SpringCastle Portfolio loans for the year ended December 31, 2016 that defaulted during the previous 12-month period were less than $1 million and, therefore, are not quantified in the combined table above. |
Schedule of net finance receivables that were modified TDRs that were held for sale | TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Real Estate Year Ended December 31, 2017 TDR net finance receivables $ 2 Number of TDR accounts 53 Year Ended December 31, 2016 TDR net finance receivables $ 2 Number of TDR accounts 30 Year Ended December 31, 2015 TDR net finance receivables $ 1 Number of TDR accounts 17 |
Allowance for Finance Receiva35
Allowance for Finance Receivable Losses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of changes in the allowance for finance receivable losses by finance receivable type | Changes in the allowance for finance receivable losses by finance receivable type were as follows: (dollars in millions) Personal Loans SpringCastle Portfolio Real Estate Loans Retail Sales Finance Consolidated Total Year Ended December 31, 2017 Balance at beginning of period $ 184 $ — $ 19 $ 1 $ 204 Provision for finance receivable losses 318 — 6 — 324 Charge-offs (347 ) — (5 ) (1 ) (353 ) Recoveries 61 — 3 1 65 Balance at end of period $ 216 $ — $ 23 $ 1 $ 240 Year Ended December 31, 2016 Balance at beginning of period $ 173 $ 4 $ 46 $ 1 $ 224 Provision for finance receivable losses 306 14 9 — 329 Charge-offs (340 ) (17 ) (11 ) (1 ) (369 ) Recoveries 45 3 5 1 54 Other (a) — (4 ) (30 ) — (34 ) Balance at end of period $ 184 $ — $ 19 $ 1 $ 204 Year Ended December 31, 2015 Balance at beginning of period $ 130 $ 3 $ 46 $ 1 $ 180 Provision for finance receivable losses 257 67 13 2 339 Charge-offs (250 ) (78 ) (18 ) (3 ) (349 ) Recoveries 37 12 5 1 55 Other (b) (1 ) — — — (1 ) Balance at end of period $ 173 $ 4 $ 46 $ 1 $ 224 (a) Other consists of: • the elimination of allowance for finance receivable losses due to the sale of the SpringCastle Portfolio on March 31, 2016, in connection with the sale of our equity interest in the SpringCastle Joint Venture; and • the elimination of allowance for finance receivable losses due to the transfers of real estate loans held for investment to finance receivable held for sale during 2016. (b) Other consists of the elimination of allowance for finance receivable losses due to the transfer of personal loans held for investment to finance receivable held for sale during 2015. |
Schedule of allowance for finance receivable losses and net finance receivables by type and by impairment method | The allowance for finance receivable losses and net finance receivables by type and by impairment method were as follows: (dollars in millions) Personal Loans Real Estate Loans Retail Sales Finance Total December 31, 2017 Allowance for finance receivable losses: Collectively evaluated for impairment $ 172 $ 2 $ 1 $ 175 Purchased credit impaired finance receivables — 9 — 9 TDR finance receivables 44 12 — 56 Total $ 216 $ 23 $ 1 $ 240 Finance receivables: Collectively evaluated for impairment $ 5,197 $ 57 $ 6 $ 5,260 Purchased credit impaired finance receivables — 22 — 22 TDR finance receivables 111 49 — 160 Total $ 5,308 $ 128 $ 6 $ 5,442 Allowance for finance receivable losses as a percentage of finance receivables 4.06 % 18.66 % 9.91 % 4.41 % December 31, 2016 Allowance for finance receivable losses: Collectively evaluated for impairment $ 164 $ — $ 1 $ 165 Purchased credit impaired finance receivables — 8 — 8 TDR finance receivables 20 11 — 31 Total $ 184 $ 19 $ 1 $ 204 Finance receivables: Collectively evaluated for impairment $ 4,757 $ 76 $ 11 $ 4,844 Purchased credit impaired finance receivables — 24 — 24 TDR finance receivables 47 44 — 91 Total $ 4,804 $ 144 $ 11 $ 4,959 Allowance for finance receivable losses as a percentage of finance receivables 3.84 % 13.31 % 4.42 % 4.12 % |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investment securities | |
Schedule of Available-for-sale Securities Reconciliation | Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type were as follows: (dollars in millions) Cost/ Amortized Cost Unrealized Gains Unrealized Losses Fair Value December 31, 2017 Fixed maturity available-for-sale securities: Bonds U.S. government and government sponsored entities $ 17 $ — $ — $ 17 Obligations of states, municipalities, and political subdivisions 70 — — 70 Non-U.S. government and government sponsored entities 4 — — 4 Corporate debt 322 4 (2 ) 324 Mortgage-backed, asset-backed, and collateralized: RMBS 35 — — 35 CMBS 23 — — 23 CDO/ABS 53 — — 53 Total bonds 524 4 (2 ) 526 Preferred stock (a) 6 — (1 ) 5 Other long-term investments 1 — — 1 Total (b) $ 531 $ 4 $ (3 ) $ 532 December 31, 2016 Fixed maturity available-for-sale securities: Bonds U.S. government and government sponsored entities $ 13 $ — $ — $ 13 Obligations of states, municipalities, and political subdivisions 83 — (1 ) 82 Non-U.S. government and government sponsored entities 5 — — 5 Corporate debt 356 2 (5 ) 353 Mortgage-backed, asset-backed, and collateralized: RMBS 39 — — 39 CMBS 33 — — 33 CDO/ABS 46 — — 46 Total bonds 575 2 (6 ) 571 Preferred stock (a) 6 — — 6 Other long-term investments 1 — — 1 Total (b) $ 582 $ 2 $ (6 ) $ 578 (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. (b) Excludes an immaterial interest in a limited partnership that we account for using the equity method and FHLB common stock of $1 million at December 31, 2017 and 2016 , which is classified as a restricted investment and carried at cost. |
Schedule of fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position | Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position were as follows: Less Than 12 Months 12 Months or Longer Total (dollars in millions) Fair Value Unrealized Losses * Fair Value Unrealized Losses * Fair Value Unrealized Losses December 31, 2017 Bonds: U.S. government and government sponsored entities $ 13 $ — $ 1 $ — $ 14 $ — Obligations of states, municipalities, and political subdivisions 35 — 12 — 47 — Corporate debt 120 (1 ) 69 (1 ) 189 (2 ) RMBS 14 — 12 — 26 — CMBS 6 — 15 — 21 — CDO/ABS 30 — 10 — 40 — Total bonds 218 (1 ) 119 (1 ) 337 (2 ) Preferred stock — — 5 (1 ) 5 (1 ) Other long-term investments 1 — — — 1 — Total $ 219 $ (1 ) $ 124 $ (2 ) $ 343 $ (3 ) December 31, 2016 Bonds: U.S. government and government sponsored entities $ 9 $ — $ — $ — $ 9 $ — Obligations of states, municipalities, and political subdivisions 57 (1 ) 2 — 59 (1 ) Non-U.S. government and government sponsored entities 3 — — — 3 — Corporate debt 171 (5 ) 5 — 176 (5 ) RMBS 33 — — — 33 — CMBS 22 — — — 22 — CDO/ABS 25 — — — 25 — Total bonds 320 (6 ) 7 — 327 (6 ) Preferred stock — — 6 — 6 — Total $ 320 $ (6 ) $ 13 $ — $ 333 $ (6 ) * Unrealized losses on certain available-for-sale securities were less than $ 1 million and, therefore, are not quantified in the table above. |
Schedule of contractual maturities of fixed-maturity available-for-sale securities | Contractual maturities of fixed-maturity available-for-sale securities at December 31, 2017 were as follows: (dollars in millions) Fair Value Amortized Cost Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: Due in 1 year or less $ 78 $ 78 Due after 1 year through 5 years 178 180 Due after 5 years through 10 years 36 36 Due after 10 years 123 119 Mortgage-backed, asset-backed, and collateralized securities 111 111 Total $ 526 $ 524 |
Available-for-sale securities | |
Investment securities | |
Schedule of realized gains, realized losses, and net realized gains (losses) due to sale or redemption of fair values of available-for-sale securities | The proceeds of available-for-sale securities sold or redeemed and the resulting net realized gains were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Proceeds from sales and redemptions $ 283 $ 308 $ 416 Realized gains $ 7 $ 9 $ 15 Realized losses — (1 ) (1 ) Net realized gains $ 7 $ 8 $ 14 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Assets [Abstract] | |
Schedule of components of other assets | Components of other assets were as follows: (dollars in millions) December 31, 2017 2016 Prepaid expenses and deferred charges $ 26 $ 38 Fixed assets, net * 25 70 Deferred tax assets 24 2 Ceded insurance reserves 20 22 Other intangible assets 15 15 Cost basis investments 11 11 Receivables from parent and affiliates 11 40 Other investments 9 30 Other 20 23 Total $ 161 $ 251 * Fixed assets were net of accumulated depreciation of $96 million at December 31, 2017 and $180 million at December 31, 2016 . The decrease in fixed assets is primarily related to the contribution of SFMC. See Note 11 for more information regarding this transaction. |
Schedule of gross carrying amount and accumulated amortization, in total and by major intangible asset class | The gross carrying amount and accumulated amortization, in total and by major intangible asset class were as follows: (dollars in millions) Gross Carrying Amount Accumulated Amortization Net Other Intangible Assets December 31, 2017 VOBA $ 36 $ (33 ) $ 3 Customer relationships 18 (18 ) — Licenses 12 — 12 Customer lists 9 (9 ) — Total $ 75 $ (60 ) $ 15 December 31, 2016 VOBA $ 36 $ (33 ) $ 3 Customer relationships 18 (18 ) — Licenses 12 — 12 Customer lists 9 (9 ) — Total $ 75 $ (60 ) $ 15 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of carrying value and fair value of long-term debt by type | Carrying value and fair value of long-term debt by type were as follows: December 31, 2017 December 31, 2016 (dollars in millions) Carrying Value Fair Value Carrying Value Fair Value Senior debt $ 7,693 $ 8,180 $ 6,665 $ 7,150 Junior subordinated debt 172 189 172 158 Total $ 7,865 $ 8,369 $ 6,837 $ 7,308 |
Schedule of weighted average interest rates on long-term debt by type | Weighted average effective interest rates on long-term debt by type were as follows: Years Ended December 31, At December 31, 2017 2016 2015 2017 2016 Senior debt 6.99 % 7.18 % 6.96 % 6.57 % 7.46 % Junior subordinated debt 6.41 12.26 12.26 6.37 12.26 Total 6.98 7.30 7.05 6.57 7.59 |
Schedule of principal maturities of long-term debt by type of debt | Principal maturities of long-term debt (excluding projected repayments on securitizations and revolving conduit facilities by period) by type of debt at December 31, 2017 were as follows: Senior Debt (dollars in millions) Securitizations Medium Term Notes Junior Subordinated Debt Total Interest rates (a) 2.04% - 6.50% 5.25% - 8.25% 3.11% 2018 — — — — 2019 — 700 — 700 2020 — 1,300 — 1,300 2021 — 650 — 650 2022 — 1,000 — 1,000 2023-2067 — 1,175 350 1,525 Securitizations (b) 3,052 — — 3,052 Total principal maturities $ 3,052 $ 4,825 $ 350 $ 8,227 Total carrying amount $ 3,041 $ 4,652 $ 172 $ 7,865 Debt issuance costs (c) $ (11 ) $ (30 ) $ — $ (41 ) (a) The interest rates shown are the range of contractual rates in effect at December 31, 2017 . Effective January 16, 2017, the interest rate on the UPB of the Junior Subordinated Debenture became a variable floating rate (determined quarterly) equal to 3-month LIBOR plus 1.75% , or 3.11% as of December 31, 2017 . Prior to January 16, 2017, the interest rate on the UPB of the Junior Subordinated Debenture was a fixed rate of 6.00% . (b) Securitizations have a stated maturity date but are not included in the above maturities by period due to their variable monthly repayments, which may result in pay-off prior to the stated maturity date. At December 31, 2017 , there were no amounts drawn under our revolving conduit facilities. See Note 13 for further information on our long-term debt associated with securitizations and revolving conduit facilities. (c) 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 $11 million at December 31, 2017 and are reported in other assets. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entities | |
Schedule of carrying amounts of consolidated VIE assets and liabilities associated with securitization trusts | The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts were as follows: (dollars in millions) December 31, 2017 2016 Assets Cash and cash equivalents $ 2 $ 2 Finance receivables: Personal loans 3,334 2,943 Allowance for finance receivable losses 141 94 Restricted cash and restricted cash equivalents 158 211 Other assets 11 9 Liabilities Long-term debt $ 3,041 $ 2,675 Other liabilities 6 7 Our securitized borrowings at December 31, 2017 consisted of the following: (dollars in millions) Issue Amount * Current Current Weighted Average Interest Rate Original Revolving Period Issue Date Maturity Date Consumer Securitizations: SLFT 2015-A $ 1,163 $ 1,163 3.47 % 3 years 02/26/2015 11/2024 SLFT 2015-B 314 314 3.78 % 5 years 04/07/2015 05/2028 SLFT 2016-A (a) 532 500 3.10 % 2 years 12/14/2016 11/2029 SLFT 2017-A (b) 652 619 2.98 % 3 years 06/28/2017 07/2030 Total consumer securitizations 2,596 Auto Securitization: ODART 2016-1 (c) 754 188 2.91 % — 07/19/2016 Various ODART 2017-1 (d) 300 268 2.61 % 1 year 02/01/2017 Various Total auto securitizations 456 Total secured structured financings $ 3,052 * Issue Amount includes the retained interest amounts as detailed below while the Current Note Amounts Outstanding balances include pay-downs subsequent to note issuance and exclude retained interest amounts. (a) SLFT 2016-A Securitization. We initially retained $ 32 million of the asset-backed notes. (b) SLFT 2017-A Securitization. We initially retained $26 million of the Class A notes, $2 million of the Class B notes, $2 million of the Class C notes and $3 million of the Class D notes. (c) ODART 2016-1 Securitization. The maturity dates of the notes occur in January 2021 for the Class A notes, May 2021 for the Class B notes, September 2021 for the Class C notes and February 2023 for the Class D notes. We initially retained $ 54 million of the Class D notes. (d) ODART 2017-1 Securitization. The maturity dates of the notes occur in October 2020 for the Class A notes, June 2021 for the Class B notes, August 2021 for the Class C notes, December 2021 for the Class D notes, and January 2025 for the Class E notes. We initially retained $11 million of the Class A notes, $1 million of each of the Class B, Class C, and Class D notes, and the entire $18 million of the Class E notes. |
Schedule of borrowings under conduit facilities | As of December 31, 2017 , our borrowings under conduit facilities consisted of the following: (dollar in millions) Note Maximum Amount Drawn Revolving Period End Backed by Loans Acquired from Subsidiaries of Due and Payable (a) First Avenue Funding LLC $ 250 $ — June 2018 SFC - auto loans (b) Seine River Funding, LLC 500 — December 2019 SFC - personal loans December 2022 Thur River Funding, LLC 350 — June 2020 SFC - personal loans February 2027 Mystic River Funding, LLC 850 — September 2020 SFC - personal loans October 2023 Fourth Avenue Auto Funding, LLC 250 — September 2020 SFC - auto loans October 2021 Total $ 2,200 $ — (a) The date following the revolving period, that the principal balance of the outstanding loans, if any, will be reduced as cash payments are received on the underlying loans and will be due and payable in full. (b) For First Avenue Funding, LLC, principal amount of the notes, if any, will be reduced as cash payments are received on the underlying direct auto loans and will be due and payable in full 12 months following the maturity of the last direct auto loan held by First Avenue Funding, LLC. During the 2017 period we voluntarily terminated the following conduit facilities concurrently with the execution of certain conduit facilities set forth in the table above: Termination Date Midbrook 2013-VFN1 Trust 04/13/2017 Sumner Brook 2013-VFN1 Trust 06/29/2017 Whitford Brook 2014-VFN1 Trust 07/14/2017 Springleaf 2013-VFN1 Trust 09/28/2017 Second Avenue Funding LLC 09/29/2017 |
Insurance (Tables)
Insurance (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Insurance [Abstract] | |
Schedule of components of insurance claims and policyholder liabilities | Components of unearned insurance premium reserves, claim reserves and benefit reserves were as follows: (dollars in millions) December 31, 2017 2016 Finance receivable related: Payable to SFC: Unearned premium reserves $ 92 $ 189 Claim reserves 16 23 Subtotal (a) 108 212 Payable to OMH: Unearned premium reserves (b) 42 6 Claim reserves 5 — Subtotal (b) 47 6 Payable to third-party beneficiaries: Unearned premium reserves 10 25 Benefit reserves 98 105 Claim reserves 3 6 Subtotal (b) 111 136 Non-finance receivable related: Benefit reserves 61 65 Claim reserves 42 41 Subtotal (b) 103 106 Total $ 369 $ 460 (a) Reported as a contra-asset to net finance receivables. (b) Reported in insurance claims and policyholder liabilities. |
Schedule of changes in the liability for unpaid claims and loss adjustment expenses, net of reinsurance recoverable | Changes in the reserve for unpaid claims and loss adjustment expenses (not considering reinsurance recoverable): (dollars in millions) At or for the Years Ended December 31, 2017 2016 2015 Balance at beginning of period $ 70 $ 73 $ 70 Less reinsurance recoverables (22 ) (22 ) (22 ) Net balance at beginning of period 48 51 48 Additions for losses and loss adjustment expenses incurred to: Current year 60 65 64 Prior years * 3 — — Total 63 65 64 Reductions for losses and loss adjustment expenses paid related to: Current year (43 ) (44 ) (40 ) Prior years (22 ) (24 ) (21 ) Total (65 ) (68 ) (61 ) Net balance at end of period 46 48 51 Plus reinsurance recoverables 20 22 22 Balance at end of period $ 66 $ 70 $ 73 * Reflects a shortfall in the prior years’ net reserves of $3 million at December 31, 2017 due to an unfavorable development on previously disclosed property and casualty policies. |
Short-duration Insurance Contracts, Claims Development | Incurred claims and allocated claim adjustment expenses, net of reinsurance, as of December 31, 2017 , were as follows: Years Ended December 31, At December 31, 2017 (dollars in millions) 2013 (a) 2014 (a) 2015 (a) 2016 (a) 2017 Incurred-but- not-reported Liabilities (b) Cumulative Number of Reported Claims Cumulative Frequency (c) Credit Insurance Accident Year 2013 42 38 38 38 38 — 22,068 2.8 % 2014 — 50 46 46 46 — 24,902 2.8 % 2015 — — 54 50 50 1 25,874 2.8 % 2016 — — — 55 55 6 25,291 2.7 % 2017 — — — — 53 16 19,114 2.3 % Total $ 242 (a) Unaudited. (b) Includes expected development on reported claims. (c) Frequency for each accident year is calculated as the ratio of all reported claims incurred to the total exposures in force. Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance, as of December 31, 2017 , were as follows: Years Ended December 31, (dollars in millions) 2013 * 2014 * 2015 * 2016 * 2017 Credit Insurance Accident Year 2013 23 34 37 38 38 2014 — 28 41 45 46 2015 — — 31 45 49 2016 — — — 36 49 2017 — — — — 37 Total $ 219 All outstanding liabilities before 2013, net of reinsurance — Liabilities for claims and claim adjustment expenses, net of reinsurance $ 23 * Unaudited. The reconciliations of the net incurred and paid claims development to the liability for claims and claim adjustment expenses were as follows: (dollars in millions) December 31, 2017 2016 * 2015 * Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance: Credit insurance $ 23 $ 26 $ 29 Other short-duration insurance lines 20 19 19 Total 43 45 48 Reinsurance recoverable on unpaid claims: Other short-duration insurance lines 20 22 22 Insurance lines other than short-duration 3 3 3 Total gross liability for unpaid claims and claim adjustment expense $ 66 $ 70 $ 73 * Unaudited. |
Short-duration Insurance Contracts, Schedule of Historical Claims Duration | Our average annual percentage payout of incurred claims by age, net of reinsurance, as of December 31, 2017 , were as follows: Years 1 2 3 4 5 Credit insurance 63.9 % 26.8 % 8.3 % 2.3 % 0.2 % |
Schedule of statutory net income for insurance companies by type of insurance | Statutory net income (loss) for our insurance companies by type of insurance was as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Property and casualty $ 19 $ 11 $ 15 Life and health 37 20 (1 ) |
Schedule of statutory capital and surplus for insurance companies by type of insurance | Statutory capital and surplus for our insurance companies by type of insurance were as follows: (dollars in millions) December 31, 2017 2016 Property and casualty $ 42 $ 63 Life and health 79 133 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of components of other liabilities | Components of other liabilities were as follows: (dollars in millions) December 31, 2017 2016 Payables to parent and affiliates * $ 110 $ 13 Accrued interest on debt 44 48 Accrued expenses and other liabilities 23 39 Loan principal warranty reserve 7 13 Retirement plans 5 31 Other 25 41 Total $ 214 $ 185 * Payables to parent and affiliates at December 31, 2017 consisted of: (i) a $67 million payable under the tax sharing agreement; (ii) a $24 million payable primarily to AHL for insurance premiums collected by legacy Springleaf branches which reflects activity started in 2017; (iii) net payables to OGSC of $13 million for intercompany service agreements; (iv) payable of $4 million to OMFH for Loan Servicing Fees, and (v) a payable of $2 million to OCLI for internet lending referral fees. See Note 11 for further information regarding SFC’s intercompany agreements and Note 18 regarding SFC’s tax sharing agreement with OMFH. |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of par value and shares authorized | Par value and shares authorized at December 31, 2017 were as follows: Special Stock Common Stock Par value $ — $ 0.50 Shares authorized 25,000,000 25,000,000 |
Schedule of shares issued and outstanding | Shares issued and outstanding were as follows: Special Stock Common Stock December 31, 2017 2016 2017 2016 Shares issued and outstanding — — 10,160,021 10,160,021 |
Accumulated Other Comprehensi43
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of changes in 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) Year Ended December 31, 2017 Balance at beginning of period $ (3 ) $ (4 ) $ — $ (7 ) Other comprehensive income before reclassifications 8 3 — 11 Reclassification adjustments from accumulated other comprehensive loss (4 ) — — (4 ) Balance at end of period $ 1 $ (1 ) $ — $ — Year Ended December 31, 2016 Balance at beginning of period $ (9 ) $ (19 ) $ 4 $ (24 ) Other comprehensive income before reclassifications 11 15 — 26 Reclassification adjustments from accumulated other comprehensive loss (5 ) — (4 ) (9 ) Balance at end of period $ (3 ) $ (4 ) $ — $ (7 ) Year Ended December 31, 2015 Balance at beginning of period $ 12 $ (13 ) $ 4 $ 3 Other comprehensive loss before reclassifications (12 ) (6 ) — (18 ) Reclassification adjustments from accumulated other comprehensive loss (9 ) — — (9 ) Balance at end of period $ (9 ) $ (19 ) $ 4 $ (24 ) |
Schedule of reclassification adjustments from accumulated other comprehensive income (loss) | Reclassification adjustments from accumulated other comprehensive income (loss) to the applicable line item on our consolidated statements of operations were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Unrealized gains on investment securities: Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes $ 7 $ 8 $ 14 Income tax effect (3 ) (3 ) (5 ) Reclassification from accumulated other comprehensive income (loss) to investment revenues, net of taxes 4 5 9 Unrealized gains on foreign currency translation adjustments: Reclassification from accumulated other comprehensive income (loss) to other revenues — 4 — Total $ 4 $ 9 $ 9 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Components of income (loss) before income tax expense (benefit) were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Income before income tax expense - U.S. operations $ 193 $ 347 $ 152 Income (loss) before income tax expense (benefit) - foreign operations — (1 ) 7 Total $ 193 $ 346 $ 159 |
Schedule of components of benefit from income taxes | Components of income tax expense were as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Current: Federal $ 167 $ 181 $ 63 Foreign * — — — State 14 15 5 Total current 181 196 68 Deferred: Federal (77 ) (77 ) (46 ) Foreign * — — — State (5 ) (6 ) (4 ) Total deferred (82 ) (83 ) (50 ) Total $ 99 $ 113 $ 18 * Deferred foreign income taxes were less than $1 million during the 2017, 2016, and 2015 periods and, therefore, are not quantified in the table above. |
Schedule of reconciliations of statutory federal income tax rate to effective tax rate | Reconciliations of the statutory federal income tax rate to the effective income tax rate were as follows: Years Ended December 31, 2017 2016 2015 Statutory federal income tax rate 35.00 % 35.00 % 35.00 % Impact of Tax Act 11.81 — — State income taxes, net of federal 2.84 1.66 0.23 Excess tax benefit on share-based compensation (0.03 ) (0.20 ) — Non-controlling interests — (2.86 ) (27.91 ) Tax impact of United Kingdom subsidiary liquidation — (0.62 ) — Nondeductible compensation — — 3.39 Other, net 1.61 (0.22 ) 0.41 Effective income tax rate 51.23 % 32.76 % 11.12 % |
Schedule of reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax obligation | A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits (all of which would affect the effective income tax rate if recognized) is as follows: (dollars in millions) Years Ended December 31, 2017 2016 2015 Balance at beginning of year $ 11 $ 9 $ 4 Increases in tax positions for current years 1 2 4 Lapse in statute of limitations (1 ) — — Increases in tax positions for prior years — — 4 Decreases in tax positions for prior years — — (2 ) Settlements with tax authorities — — (1 ) Balance at end of year $ 11 $ 11 $ 9 |
Schedule of components of deferred tax assets and liabilities | Components of deferred tax assets and liabilities were as follows: (dollars in millions) December 31, 2017 2016 Deferred tax assets: Allowance for loan losses $ 51 $ 77 Mark-to-market 55 55 State taxes, net of federal 39 27 Pension/employee benefits 5 13 Legal and warranty reserve 2 6 Federal and foreign net operating losses and tax attributes 1 3 Other — 2 Total 153 183 Deferred tax liabilities: Debt fair value adjustment 54 118 Insurance reserves 14 14 Discount - debt exchange 11 16 Other intangible assets 3 5 Fixed assets 2 — Impact of tax accounting method change — 38 Other 8 5 Total 92 196 Net deferred tax assets (liabilities) before valuation allowance 61 (13 ) Valuation allowance (37 ) (29 ) Net deferred tax assets (liabilities) $ 24 $ (42 ) |
Lease Commitments, Rent Expen45
Lease Commitments, Rent Expense, and Contingent Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of 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 and the amortization of the lease intangibles recorded as a result of the Fortress Acquisition | 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 2018 $ 16 2019 12 2020 8 2021 5 2022 2 2023+ — Total $ 43 |
Schedule of Finance Receivables Activity in Reserve for Sales Recourse Obligations | The activity in our reserve for sales recourse obligations was as follows: (dollars in millions) At or for the Years Ended December 31, 2017 2016 2015 Balance at beginning of period $ 13 $ 15 $ 24 Recourse losses — — (2 ) Provision for recourse obligations, net of recoveries * (6 ) (2 ) (7 ) Balance at end of period $ 7 $ 13 $ 15 * Reflects the elimination of the reserve associated with other prior sales of finance receivables. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of restricted stock activity | The following table summarizes the service-based stock activity and related information for the Omnibus Plan for 2017 : Number of Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Term (in Years) Unvested as of January 1, 2017 1,382,920 $ 35.86 Granted 407,184 27.85 Vested (575,322 ) 31.86 Forfeited (73,172 ) 38.10 Unvested at December 31, 2017 1,141,610 34.87 1.91 |
Summary of performance activity | The following table summarizes the performance-based stock activity and related information for the Omnibus Plan for 2017 : Number of Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Term (in Years) Unvested as of January 1, 2017 407,948 $ 25.94 Granted 90,072 24.98 Vested (92,000 ) 24.78 Forfeited (136,394 ) 25.70 Unvested at December 31, 2017 269,626 26.14 3.78 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of information about the Company's segments as well as reconciliations to consolidated financial statement amounts | We allocate revenues and expenses (on a Segment Accounting Basis) to each segment using the following methodologies: Interest income Directly correlated with a specific segment. Interest expense Acquisitions and Servicing - This segment includes interest expense specifically identified to the SpringCastle Portfolio. Consumer and Insurance and Other - The Company has securitization debt and unsecured debt. The Company first allocates interest expense to its segments based on actual expense for securitizations and secured term debt and using a weighted average for unsecured debt allocated to the segments. Interest expense for unsecured debt is recorded to each of the segments using a weighted average interest rate applied to allocated average unsecured debt. Average unsecured debt allocations for the periods presented are as follows: Subsequent to the OneMain Acquisition Total average unsecured debt is allocated as follows: l Other - at 100% of asset base. (Asset base represents the average net finance receivables including finance receivables held for sale); and l Consumer and Insurance - receives remainder of unallocated average debt. The net effect of the change in debt allocation and asset base methodologies for 2015, had it been in place as of the beginning of the year, would be an increase in interest expense of $208 million for Consumer and Insurance and a decrease in interest expense of $208 million for Other. For the period first quarter 2015 to the OneMain Acquisition Total average unsecured debt was allocated to Consumer and Insurance and Other, such that the total debt allocated across each segment equaled 83% of the Consumer and Insurance asset base, and 100% of the Other asset base. Any excess was allocated to Consumer and Insurance. Average unsecured debt was allocated after average securitized debt to achieve the calculated average segment debt. Asset base represented the following: l Consumer and Insurance - average net finance receivables, including average net finance receivables held for sale; and l Other - average net finance receivables, including average net finance receivables held for sale, investments including proceeds from Real Estate sales, cash and cash equivalents, less proceeds from equity issuance in 2015 and operating cash reserve and cash included in other segments. Provision for finance receivable losses Directly correlated with specific segment, except for allocations related to personal loans and retail in Other, which are based on the remaining delinquent accounts as a percentage of total delinquent accounts. Other revenues Directly correlated with a specific segment, except for: l Net gain (loss) on repurchases and repayments of debt - Allocated to each of the segments based on the interest expense allocation of debt. l Gains and losses on foreign currency exchange - Allocated to each of the segments based on the interest expense allocation of debt. Other expenses Salaries and benefits - Directly correlated with a specific segment. Other salaries and benefits not directly correlated with a specific segment are allocated to each of the segments based on services provided. Other operating expenses - Directly correlated with a specific segment. Other operating expenses not directly correlated with a specific segment are allocated to each of the segments based on services provided. Insurance policy benefits and claims - Directly correlated with a specific segment. The “Segment to GAAP Adjustment” column in the following tables primarily consists of: • Interest income - reverses the impact of premiums/discounts on purchased finance receivables and the interest income recognition under guidance in ASC 310-20, Nonrefundable Fees and Other Costs , and ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality , and reestablishes interest income recognition on a historical cost basis; • Interest expense - reverses the impact of premiums/discounts on acquired long-term debt and reestablishes interest expense recognition on a historical cost basis; • Provision for finance receivable losses - reverses the impact of providing an allowance for finance receivable losses upon acquisition and reestablishes the allowance on a historical cost basis and reverses the impact of recognition of net charge-offs on purchased credit impaired finance receivables and reestablishes the net charge-offs on a historical cost basis; • Other revenues - reestablishes the historical cost basis of mark-to-market adjustments on finance receivables held for sale and on realized gains/losses associated with our investment portfolio; • Other expenses - reestablishes expenses on a historical cost basis by reversing the impact of amortization from acquired intangible assets and including amortization of other historical deferred costs; and • Assets - revalues assets based on their fair values at the effective date of the Fortress Acquisition. The following tables present information about the Company’s segments, as well as reconciliations to the consolidated financial statement amounts. (dollars in millions) Consumer and Insurance Acquisitions and Servicing Other (a) Eliminations Segment to Consolidated Total At or for the Year Ended December 31, 2017 Interest income $ 1,213 $ — $ 23 $ — $ 5 $ 1,241 Interest expense 439 — 21 — 57 517 Provision for finance receivable losses 316 — 7 — 1 324 Net interest income (loss) after provision for finance receivable losses 458 — (5 ) — (53 ) 400 Other revenues (b) 169 — 256 — (18 ) 407 Other expenses 601 2 11 — — 614 Income (loss) before income tax expense (benefit) $ 26 $ (2 ) $ 240 $ — $ (71 ) $ 193 Assets (c) $ 5,107 $ — $ 5,727 $ — $ (10 ) $ 10,824 At or for the Year Ended December 31, 2016 Interest income $ 1,192 $ 102 $ 51 $ — $ 5 $ 1,350 Interest expense 402 20 52 — 82 556 Provision for finance receivable losses 305 14 6 — 4 329 Net interest income (loss) after provision for finance receivable losses 485 68 (7 ) — (81 ) 465 Net gain on sale of SpringCastle interests — 167 — — — 167 Other revenues (b) 219 — 179 — 9 407 Other expenses 648 16 29 — — 693 Income before income taxes 56 219 143 — (72 ) 346 Income before income tax attributable to non-controlling interests — 28 — — — 28 Income before income tax expense attributable to Springleaf Finance Corporation $ 56 $ 191 $ 143 $ — $ (72 ) $ 318 Assets (c) $ 5,494 $ — $ 4,293 $ — $ (68 ) $ 9,719 At or for the Year Ended December 31, 2015 Interest income $ 1,115 $ 455 $ 76 $ — $ 11 $ 1,657 Interest expense 190 87 268 (5 ) 127 667 Provision for finance receivable losses 255 68 (1 ) — 17 339 Net interest income (loss) after provision for finance receivable losses 670 300 (191 ) 5 (133 ) 651 Other revenues 212 5 46 (5 ) (15 ) 243 Other expenses 622 61 50 — 2 735 Income (loss) before income tax expense (benefit) 260 244 (195 ) — (150 ) 159 Income before income tax attributable to non-controlling interests — 127 — — — 127 Income (loss) before income tax expense (benefit) attributable to Springleaf Finance Corporation $ 260 $ 117 $ (195 ) $ — $ (150 ) $ 32 Assets $ 5,632 $ 1,784 $ 4,830 $ — $ (58 ) $ 12,188 (a) Real Estate segment has been combined with “Other” for the prior period. (b) Other revenues reported in “Other” primarily includes interest income on the Cash Services Note (previously referred to as the “Independence Demand Note”) and on SFC’s note receivable from SFI. See Note 11 for further information on the notes receivable from parent and affiliates. (c) Assets reported in “Other” primarily includes notes receivable from parent and affiliates discussed above. See Note 11 for further information on the note receivable from parent and affiliates. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair values and carrying values of financial instruments and fair value hierarchy based on the level of inputs utilized to determine such fair value | Fair Value Measurements Using Total Fair Value Total Carrying Value (dollars in millions) Level 1 Level 2 Level 3 December 31, 2017 Assets Cash and cash equivalents $ 240 $ 4 $ — $ 244 $ 244 Investment securities — 534 2 536 536 Net finance receivables, less allowance for finance receivable losses — — 5,710 5,710 5,202 Finance receivables held for sale — — 139 139 132 Notes receivable from parent and affiliates — 4,488 — 4,488 4,488 Restricted cash and restricted cash equivalents 169 — — 169 169 Other assets (a) — 11 12 23 23 Liabilities Long-term debt $ — $ 8,369 $ — $ 8,369 $ 7,865 Other liabilities (b) — 110 — 110 110 December 31, 2016 Assets Cash and cash equivalents $ 198 $ 42 $ — $ 240 $ 240 Investment securities — 580 2 582 582 Net finance receivables, less allowance for finance receivable losses — — 5,122 5,122 4,755 Finance receivables held for sale — — 159 159 153 Notes receivable from parent and affiliates — 3,723 — 3,723 3,723 Restricted cash and restricted cash equivalents 227 — — 227 227 Other assets (a) — 41 34 75 77 Liabilities Long-term debt $ — $ 7,308 $ — $ 7,308 $ 6,837 Other liabilities (b) — 13 — 13 13 (a) Other assets includes commercial mortgage loans, escrow advance receivables, and receivables from parent and affiliates at December 31, 2017 and commercial mortgage loans, escrow advance receivables, receivables from parent and affiliates, and receivables related to sales of real estate loans and related trust assets at December 31, 2016. (b) Consists of payables to parent and affiliates. |
Schedule of information about assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy based on the levels of inputs utilized to determine such fair value | 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 (dollars in millions) Level 1 Level 2 Level 3 (a) December 31, 2017 Assets Cash equivalents in mutual funds $ 142 $ — $ — $ 142 Cash equivalents in securities — 4 — 4 Investment securities: Available-for-sale securities Bonds: U.S. government and government sponsored entities — 17 — 17 Obligations of states, municipalities, and political subdivisions — 70 — 70 Non-U.S. government and government sponsored entities — 4 — 4 Corporate debt — 324 — 324 RMBS — 35 — 35 CMBS — 23 — 23 CDO/ABS — 53 — 53 Total bonds — 526 — 526 Preferred stock — 5 — 5 Other long-term investments — — 1 1 Total available-for-sale securities (b) — 531 1 532 Other securities Bonds: Corporate debt — 3 — 3 Total other securities — 3 — 3 Total investment securities — 534 1 535 Restricted cash in mutual funds 159 — — 159 Total $ 301 $ 538 $ 1 $ 840 (a) Due to the insignificant activity within the Level 3 assets during 2017 , 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. (b) Excludes an immaterial interest in a limited partnership that we account for using the equity method and FHLB common stock of $1 million at December 31, 2017 , which is carried at cost. Fair Value Measurements Using Total Carried At Fair Value (dollars in millions) Level 1 Level 2 Level 3 (a) December 31, 2016 Assets Cash equivalents in mutual funds $ 119 $ — $ — $ 119 Cash equivalents in securities — 42 — 42 Investment securities: Available-for-sale securities Bonds: U.S. government and government sponsored entities — 13 — 13 Obligations of states, municipalities, and political subdivisions — 82 — 82 Non-U.S. government and government sponsored entities — 5 — 5 Corporate debt — 353 — 353 RMBS — 39 — 39 CMBS — 33 — 33 CDO/ABS — 46 — 46 Total bonds — 571 — 571 Preferred stock — 6 — 6 Other long-term investments — — 1 1 Total available-for-sale securities (b) — 577 1 578 Other securities Bonds: Corporate debt — 2 — 2 CMBS — 1 — 1 Total other securities — 3 — 3 Total investment securities — 580 1 581 Restricted cash in mutual funds 212 — — 212 Total $ 331 $ 622 $ 1 $ 954 (a) Due to the insignificant activity within the Level 3 assets during 2016 , 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. (b) Excludes an immaterial interest in a limited partnership that we account for using the equity method and FHLB common stock of $1 million at December 31, 2016 , which is carried at cost. |
Schedule of assets measured at fair value on a non-recurring basis on which impairment charges were recorded | Assets measured at fair value on a non-recurring basis on which we recorded impairment charges were as follows: Fair Value Measurements Using * Impairment Charges (dollars in millions) Level 1 Level 2 Level 3 Total At or for the Year Ended December 31, 2017 Assets Real estate owned $ — $ — $ 6 $ 6 $ 3 At or for the Year Ended December 31, 2016 Assets Finance receivables held for sale $ — $ — $ 159 $ 159 $ 4 Real estate owned — — 5 5 2 Total $ — $ — $ 164 $ 164 $ 6 * The fair value information presented in the table is as of the date the fair value adjustment was recorded. |
Quantitative information about Level 3 inputs for assets measured on a nonrecurring basis | Quantitative information about Level 3 inputs for our assets measured at fair value on a non-recurring basis at December 31, 2017 and 2016 was as follows: Range (Weighted Average) Valuation Technique(s) Unobservable Input December 31, 2017 December 31, 2016 Finance receivables held for sale Income approach Market value for similar type loan transactions to obtain a price point * * Real estate owned Market approach Third-party valuation * * * We applied the third-party exception which allows us to omit certain quantitative disclosures about unobservable inputs for the assets measured at fair value on a non-recurring basis included in the table above. As a result, the weighted average ranges of the inputs for these assets are not applicable. |
Selected Quarterly Financial 49
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of selected quarterly financial data | Our selected quarterly financial data for 2017 was as follows: (dollars in millions) Fourth Quarter Third Quarter Second Quarter First Quarter Interest income $ 328 $ 310 $ 306 $ 297 Interest expense 128 133 129 127 Provision for finance receivable losses 92 70 91 71 Other revenues 99 115 87 106 Other expenses 138 154 160 162 Income before income taxes 69 68 13 43 Income taxes 48 30 5 16 Net income $ 21 $ 38 $ 8 $ 27 Our selected quarterly financial data for 2016 was as follows: (dollars in millions) Fourth Quarter Third Quarter Second Quarter First Quarter Interest income $ 303 $ 303 $ 313 $ 431 Interest expense 127 135 138 156 Provision for finance receivable losses 66 87 85 91 Other revenues 105 107 106 256 Other expenses 170 155 177 191 Income before income taxes 45 33 19 249 Income taxes 12 10 6 85 Net income 33 23 13 164 Net income attributable to non-controlling interests — — — 28 Net income attributable to Springleaf Finance Corporation $ 33 $ 23 $ 13 $ 136 |
Nature of Operations - paragrap
Nature of Operations - paragraph 2 (Details) | Dec. 31, 2017 |
Springleaf Financial Holdings, LLC | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 44.00% |
Significant Transactions OMH Ac
Significant Transactions OMH Acquisition of OneMain Financial Holding, LLC (Details) - OneMain $ in Billions | Nov. 15, 2015USD ($) | Nov. 13, 2015branchstate |
Business Acquisition [Line Items] | ||
Cash consideration | $ | $ 4.5 | |
Number of branches divested | branch | 127 | |
Number of states where branches were divested | state | 11 |
Significant Transactions Lendma
Significant Transactions Lendmark Sale (Details) $ in Millions | May 02, 2016USD ($) | Nov. 13, 2015 | Nov. 12, 2015USD ($)branch | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | May 13, 2016extension | Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) |
Business Acquisition [Line Items] | ||||||||
Number of extensions | extension | 2 | |||||||
Interest Payable | $ 44 | $ 48 | ||||||
Lendmark Sale | OMFH revolving demand note, OneMain Acquisition closing | OneMain Financial Holdings, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Debt repayment | $ 376 | |||||||
Interest Payable | 6 | |||||||
Sale of Branches to Lendmark | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of days to close sale of branches | 120 days | |||||||
Sale price | $ 624 | |||||||
Sale of Branches to Lendmark | Personal Loans | ||||||||
Business Acquisition [Line Items] | ||||||||
Loans receivable held for sale | $ 608 | |||||||
Unpaid principal balance of loans sold | $ 600 | |||||||
Sale of Branches to Lendmark | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration from disposal of branches, threshold for certain limitations | $ 695 | |||||||
Lendmark Sale | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of branch offices | branch | 127 | |||||||
Loans purchased multiplier as of Lendmark Sale closing date | 103.00% |
Significant Transactions Spring
Significant Transactions Springcastle Interests Sale (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 30, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Net gain on sale of SpringCastle interests | $ 167 | $ 0 | $ 167 | $ 0 | ||
Springleaf Financial Holdings, LLC | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Ownership percentage | 44.00% | |||||
Ownership percentage by initial stockholder | 58.00% | 58.00% | ||||
SpringCastle Interests Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Ownership percentage | 47.00% | 47.00% | ||||
Aggregate purchase price | $ 112 | $ 112 | ||||
Aggregate purchase price from sale of portfolio | 101 | 101 | ||||
Escrow advance receivable | $ 11 | $ 11 | ||||
Maximum number of years, the amount must be left in the escrow account | 5 years | |||||
SpringCastle Interests Sale | NRZ Consumer LLC | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Ownership percentage | 30.00% | |||||
SpringCastle Interests Sale | Blackstone Buyers | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Ownership percentage | 23.00% |
Significant Transactions Real E
Significant Transactions Real Estate Loan Sales (Details) - Real Estate Sale - USD ($) $ in Millions | Dec. 19, 2016 | Aug. 03, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Sale price | $ 58 | $ 246 |
Loss on sale of loans (less than) | $ 1 | $ 4 |
Significant Transactions SFC Me
Significant Transactions SFC Medium-Term Note Issuances (Details) - USD ($) | Dec. 31, 2017 | Dec. 08, 2017 | May 30, 2017 | May 15, 2017 | Apr. 11, 2016 |
Senior debt | Senior Notes 6.125% | |||||
Debt Instrument [Line Items] | |||||
Interest rates (as a percent) | 6.125% | 6.125% | |||
Issue Amount | $ 500,000,000 | $ 500,000,000 | |||
Senior debt | Senior Notes 5.625% | |||||
Debt Instrument [Line Items] | |||||
Interest rates (as a percent) | 5.625% | ||||
Issue Amount | $ 875,000,000 | ||||
Guaranty Agreements | Springleaf Finance Corporation | Senior Note 8.25%, due 2020 | |||||
Debt Instrument [Line Items] | |||||
Interest rates (as a percent) | 8.25% | ||||
Issue Amount | $ 1,000,000,000 | $ 1,000,000,000 |
Summary of Significant Accoun56
Summary of Significant Accounting Policies Basis of Presentation (Details) | Mar. 31, 2016 |
Corporate Joint Venture | |
Entity Information [Line Items] | |
Ownership percentage | 47.00% |
Summary of Significant Accoun57
Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended |
Dec. 31, 2017segmentdefermentpayment | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Number of business segments | segment | 2 |
Finance receivables past due period | 60 days |
Financing receivable, period which most repurchase requests occur | 5 years |
Retail Sales Finance Revolving Retail | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Number of past due contractual payments to occur before finance charges stop accruing | 6 |
Personal Loans | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Finance receivables period for write-off | 180 days |
Residential Portfolio Segment | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing receivables, number of past due payments to trigger property inspection | 2 |
Financing receivable, number of past due installments to trigger foreclosure | 4 |
Retail Sales Finance | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Finance receivables period for write-off | 180 days |
Financing receivable, number of deferments allowed in twelve month period | deferment | 2 |
Financing receivable, period for deferment allowance | 12 months |
Real Estate Loans Branch | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing receivable, number of deferments allowed in twelve month period | deferment | 2 |
Financing receivable, period for deferment allowance | 12 months |
Real Estate Loans Central | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing receivable, number of deferments allowed in twelve month period | deferment | 1 |
Minimum | Retail Sales Finance Retail Sales Contracts - serviced externally | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Number of past due contractual payments to occur before finance charges stop accruing | 3 |
Maximum | Retail Sales Finance Retail Sales Contracts - serviced externally | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Number of past due contractual payments to occur before finance charges stop accruing | 4 |
Summary of Significant Accoun58
Summary of Significant Accounting Policies - Prior Period Revisions (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Provision for finance receivable losses | $ 92 | $ 70 | $ 91 | $ 71 | $ 66 | $ 87 | $ 85 | $ 91 | $ 324 | $ 329 | $ 339 | |
Decreased provision for income tax expense | $ (48) | $ (30) | $ (5) | $ (16) | $ (12) | $ (10) | $ (6) | $ (85) | $ (99) | $ (113) | $ (18) | |
Charge-off of Certain Bankrupt Accounts and Error in Calculation of Allowance of TDR Finance Receivables | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Provision for finance receivable losses | $ 8 | |||||||||||
Decreased provision for income tax expense | $ 3 |
Finance Receivables - Narrative
Finance Receivables - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2017USD ($)loan | Dec. 31, 2016USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Personal loans of consolidated VIEs | $ 5,308,000,000 | $ 4,804,000,000 |
Finance receivables held for sale | 132,000,000 | $ 153,000,000 |
Amount of commitments to lend additional funds on TDR finance receivables | $ 0 | |
Unlikely to be Collected Financing Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Finance receivables period for write-off | 60 days | |
Nonperforming: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Finance receivables period for write-off | 90 days | |
Default period TDR finance receivables to be considered Non-performing | 12 months | |
Personal Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Finance receivables period for write-off | 180 days | |
Personal Loans | Consumer household goods or other items of personal property | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of personal loans | loan | 920,000 | 928,000 |
Personal Loans | Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Original term | 3 years | |
Personal Loans | Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Original term | 6 years | |
Real Estate Loans | Nonperforming: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Finance receivables period for write-off | 90 days | |
Real Estate Loans | Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Original term | 360 months | |
Retail Sales Finance | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Finance receivables period for write-off | 180 days | |
Retail Sales Finance | Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Original term | 60 months |
Finance Receivables - By Type (
Finance Receivables - By Type (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross receivables | $ 5,992 | $ 5,603 |
Unearned finance charges and points and fees | (677) | (754) |
Accrued finance charges | 79 | 64 |
Deferred origination costs | 48 | 46 |
Net finance receivables | 5,442 | 4,959 |
Personal Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross receivables | 5,858 | 5,449 |
Unearned finance charges and points and fees | (676) | (754) |
Accrued finance charges | 78 | 63 |
Deferred origination costs | 48 | 46 |
Net finance receivables | 5,308 | 4,804 |
Real Estate Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross receivables | 127 | 142 |
Unearned finance charges and points and fees | 1 | |
Accrued finance charges | 1 | 1 |
Net finance receivables | 128 | 144 |
Retail Sales Finance | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross receivables | 7 | 12 |
Unearned finance charges and points and fees | (1) | (1) |
Net finance receivables | $ 6 | $ 11 |
Finance Receivables - Geographi
Finance Receivables - Geographic Diversification (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 5,442 | $ 4,959 |
Finance receivable | Geographic concentration | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 5,442 | $ 4,959 |
Concentration (as a percent) | 100.00% | 100.00% |
Finance receivable | Geographic concentration | Illinois | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 481 | $ 400 |
Concentration (as a percent) | 9.00% | 8.00% |
Finance receivable | Geographic concentration | Indiana | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 428 | $ 360 |
Concentration (as a percent) | 8.00% | 7.00% |
Finance receivable | Geographic concentration | North Carolina | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 426 | $ 398 |
Concentration (as a percent) | 8.00% | 8.00% |
Finance receivable | Geographic concentration | California | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 323 | $ 298 |
Concentration (as a percent) | 6.00% | 6.00% |
Finance receivable | Geographic concentration | Georgia | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 304 | $ 276 |
Concentration (as a percent) | 6.00% | 6.00% |
Finance receivable | Geographic concentration | Florida | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 301 | $ 254 |
Concentration (as a percent) | 6.00% | 5.00% |
Finance receivable | Geographic concentration | Texas | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 295 | $ 288 |
Concentration (as a percent) | 5.00% | 6.00% |
Finance receivable | Geographic concentration | Ohio | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 294 | $ 266 |
Concentration (as a percent) | 5.00% | 5.00% |
Finance receivable | Geographic concentration | Virginia | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 284 | $ 266 |
Concentration (as a percent) | 5.00% | 5.00% |
Finance receivable | Geographic concentration | South Carolina | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 275 | $ 254 |
Concentration (as a percent) | 5.00% | 5.00% |
Finance receivable | Geographic concentration | Pennsylvania | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 252 | $ 255 |
Concentration (as a percent) | 5.00% | 5.00% |
Finance receivable | Geographic concentration | Other | ||
GEOGRAPHIC DIVERSIFICATION | ||
Net finance receivables | $ 1,779 | $ 1,644 |
Concentration (as a percent) | 32.00% | 34.00% |
Finance Receivables - By Type A
Finance Receivables - By Type And By Days Delinquent (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Net finance receivables: | ||
Net finance receivables | $ 5,442 | $ 4,959 |
Personal Loans | ||
Net finance receivables: | ||
Net finance receivables | 5,308 | 4,804 |
Real Estate Loans | ||
Net finance receivables: | ||
Net finance receivables | 128 | 144 |
Retail Sales Finance | ||
Net finance receivables: | ||
Net finance receivables | 6 | 11 |
Performing: | ||
Net finance receivables: | ||
Net finance receivables | 5,308 | 4,814 |
Performing: | Current | ||
Net finance receivables: | ||
Net finance receivables | 5,167 | 4,692 |
Performing: | 30-59 days past due | ||
Net finance receivables: | ||
Net finance receivables | 83 | 73 |
Performing: | 60-89 days past due | ||
Net finance receivables: | ||
Net finance receivables | 58 | 49 |
Performing: | Personal Loans | ||
Net finance receivables: | ||
Net finance receivables | 5,193 | 4,688 |
Performing: | Personal Loans | Current | ||
Net finance receivables: | ||
Net finance receivables | 5,063 | 4,579 |
Performing: | Personal Loans | 30-59 days past due | ||
Net finance receivables: | ||
Net finance receivables | 75 | 64 |
Performing: | Personal Loans | 60-89 days past due | ||
Net finance receivables: | ||
Net finance receivables | 55 | 45 |
Performing: | Real Estate Loans | ||
Net finance receivables: | ||
Net finance receivables | 109 | 115 |
Performing: | Real Estate Loans | Current | ||
Net finance receivables: | ||
Net finance receivables | 98 | 102 |
Performing: | Real Estate Loans | 30-59 days past due | ||
Net finance receivables: | ||
Net finance receivables | 8 | 9 |
Performing: | Real Estate Loans | 60-89 days past due | ||
Net finance receivables: | ||
Net finance receivables | 3 | 4 |
Performing: | Retail Sales Finance | ||
Net finance receivables: | ||
Net finance receivables | 6 | 11 |
Performing: | Retail Sales Finance | Current | ||
Net finance receivables: | ||
Net finance receivables | 6 | 11 |
Performing: | Retail Sales Finance | 30-59 days past due | ||
Net finance receivables: | ||
Net finance receivables | 0 | 0 |
Performing: | Retail Sales Finance | 60-89 days past due | ||
Net finance receivables: | ||
Net finance receivables | 0 | 0 |
Nonperforming: | ||
Net finance receivables: | ||
Net finance receivables | 134 | 145 |
Nonperforming: | 90-179 days past due | ||
Net finance receivables: | ||
Net finance receivables | 116 | 120 |
Nonperforming: | 180 days or more past due | ||
Net finance receivables: | ||
Net finance receivables | 18 | 25 |
Nonperforming: | Personal Loans | ||
Net finance receivables: | ||
Net finance receivables | 115 | 116 |
Nonperforming: | Personal Loans | 90-179 days past due | ||
Net finance receivables: | ||
Net finance receivables | 112 | 112 |
Nonperforming: | Personal Loans | 180 days or more past due | ||
Net finance receivables: | ||
Net finance receivables | 3 | 4 |
Nonperforming: | Real Estate Loans | ||
Net finance receivables: | ||
Net finance receivables | 19 | 29 |
Nonperforming: | Real Estate Loans | 90-179 days past due | ||
Net finance receivables: | ||
Net finance receivables | 4 | 8 |
Nonperforming: | Real Estate Loans | 180 days or more past due | ||
Net finance receivables: | ||
Net finance receivables | 15 | 21 |
Nonperforming: | Retail Sales Finance | ||
Net finance receivables: | ||
Net finance receivables | 0 | 0 |
Nonperforming: | Retail Sales Finance | 90-179 days past due | ||
Net finance receivables: | ||
Net finance receivables | 0 | 0 |
Nonperforming: | Retail Sales Finance | 180 days or more past due | ||
Net finance receivables: | ||
Net finance receivables | $ 0 | $ 0 |
Finance Receivables - Purchased
Finance Receivables - Purchased Credit Impaired Held For Investment And Held For Sale (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Purchased credit impaired finance receivables | $ 9 | $ 8 |
FA Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Carrying amount, net of allowance | 57 | 70 |
Outstanding balance | 94 | 107 |
Purchased credit impaired finance receivables | 9 | 8 |
Carrying amount of finance receivables held for sale | 44 | 54 |
Outstanding balance of finance receivables held for sale | $ 72 | $ 83 |
Finance Receivables - Changes I
Finance Receivables - Changes In Accretable Yield For Purchased Credit Impaired (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in accretable yield for purchased credit impaired finance receivables | |||
Balance at beginning of period | $ 60 | $ 441 | $ 506 |
Accretion | (5) | (23) | (85) |
Reclassifications to nonaccretable difference | (2) | 12 | 20 |
Transfers due to finance receivables sold | (370) | ||
Balance at end of period | 53 | 60 | 441 |
SCP Loans | |||
Changes in accretable yield for purchased credit impaired finance receivables | |||
Balance at beginning of period | 0 | 375 | 452 |
Accretion | 0 | (16) | (77) |
Reclassifications to nonaccretable difference | 0 | 0 | 0 |
Balance at end of period | 0 | 0 | 375 |
FA Loans | |||
Changes in accretable yield for purchased credit impaired finance receivables | |||
Balance at beginning of period | 60 | 66 | 54 |
Accretion | (5) | (7) | (8) |
Reclassifications to nonaccretable difference | (2) | 12 | 20 |
Balance at end of period | 53 | 60 | 66 |
Accretion of purchased credit impairment FA loans held for sale | $ 4 | 5 | $ 6 |
SCP Loans | |||
Changes in accretable yield for purchased credit impaired finance receivables | |||
Transfers due to finance receivables sold | (359) | ||
FA Loans | |||
Changes in accretable yield for purchased credit impaired finance receivables | |||
Transfers due to finance receivables sold | $ (11) |
Finance Receivables - TDR Held
Finance Receivables - TDR Held For Investment And Held For Sale (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Modifications [Line Items] | ||
TDR gross finance receivables | $ 251 | $ 180 |
TDR net finance receivables | 251 | 181 |
Allowance for TDR finance receivable losses | 56 | 31 |
Personal Loans | ||
Financing Receivable, Modifications [Line Items] | ||
TDR gross finance receivables | 112 | 47 |
TDR net finance receivables | 111 | 47 |
Allowance for TDR finance receivable losses | 44 | 20 |
Real Estate Loans | ||
Financing Receivable, Modifications [Line Items] | ||
TDR gross finance receivables | 139 | 133 |
TDR net finance receivables | 140 | 134 |
Allowance for TDR finance receivable losses | 12 | 11 |
TDR gross finance receivables, held for sale | 90 | 89 |
TDR net finance receivables, held for sale | $ 91 | $ 90 |
Finance Receivables - TDR Recog
Finance Receivables - TDR Recognized (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Financing Receivable, Modifications [Line Items] | |||
TDR average net receivables | $ 219 | $ 211 | $ 239 |
TDR finance charges recognized | 17 | 14 | 15 |
Personal Loans | |||
Financing Receivable, Modifications [Line Items] | |||
TDR average net receivables | 79 | 36 | 29 |
TDR finance charges recognized | 8 | 3 | 3 |
SCP Loans | |||
Financing Receivable, Modifications [Line Items] | |||
TDR average net receivables | 0 | 0 | 12 |
TDR finance charges recognized | 0 | 0 | 1 |
Real Estate Loans | |||
Financing Receivable, Modifications [Line Items] | |||
TDR average net receivables | 140 | 175 | 198 |
TDR finance charges recognized | 9 | 11 | 11 |
TDR average net receivables, held for sale | 91 | 102 | 91 |
TDR finance charges recognized, held for sale | $ 6 | $ 6 | $ 5 |
Finance Receivables - TDR New V
Finance Receivables - TDR New Volume (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)account | Dec. 31, 2016USD ($)account | Dec. 31, 2015USD ($)account | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Pre-modification TDR net finance receivables | $ 140 | $ 66 | $ 61 |
Post-modification TDR net finance receivables: | $ 139 | $ 61 | $ 55 |
Number of TDR accounts | account | 23,010 | 10,038 | 7,621 |
Rate reduction | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Post-modification TDR net finance receivables: | $ 109 | $ 48 | $ 38 |
Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Post-modification TDR net finance receivables: | 30 | 13 | 17 |
Personal Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Pre-modification TDR net finance receivables | 124 | 49 | 33 |
Post-modification TDR net finance receivables: | $ 123 | $ 43 | $ 27 |
Number of TDR accounts | account | 22,500 | 9,517 | 6,515 |
Personal Loans | Rate reduction | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Post-modification TDR net finance receivables: | $ 93 | $ 31 | $ 15 |
Personal Loans | Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Post-modification TDR net finance receivables: | 30 | 12 | 12 |
SCP Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Pre-modification TDR net finance receivables | 0 | 1 | 7 |
Post-modification TDR net finance receivables: | $ 0 | $ 1 | $ 6 |
Number of TDR accounts | account | 0 | 157 | 721 |
SCP Loans | Rate reduction | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Post-modification TDR net finance receivables: | $ 0 | $ 1 | $ 6 |
SCP Loans | Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Post-modification TDR net finance receivables: | 0 | 0 | 0 |
Real Estate Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Pre-modification TDR net finance receivables | 16 | 16 | 21 |
Post-modification TDR net finance receivables: | $ 16 | $ 17 | $ 22 |
Number of TDR accounts | account | 510 | 364 | 385 |
Pre-modification TDR net finance receivables, held for sale | $ 6 | $ 5 | $ 6 |
Post-modification TDR net finance receivables, held for sale | $ 7 | $ 5 | $ 7 |
Number of TDR accounts, held for sale | account | 232 | 122 | 113 |
Real Estate Loans | Rate reduction | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Post-modification TDR net finance receivables: | $ 16 | $ 16 | $ 17 |
Real Estate Loans | Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Post-modification TDR net finance receivables: | $ 0 | $ 1 | $ 5 |
Finance Receivables - Held For
Finance Receivables - Held For Investment And Held For Sale Modified As TDR (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)account | Dec. 31, 2016USD ($)account | Dec. 31, 2015USD ($)account | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
TDR net finance receivables | $ 41,000,000 | $ 9,000,000 | $ 10,000,000 |
Number of TDR accounts | account | 8,214 | 1,489 | 1,414 |
Personal Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
TDR net finance receivables | $ 37,000,000 | $ 6,000,000 | $ 5,000,000 |
Number of TDR accounts | account | 8,113 | 1,409 | 1,221 |
SCP Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
TDR net finance receivables | $ 0 | $ 0 | $ 2,000,000 |
Number of TDR accounts | account | 0 | 19 | 147 |
TDR net finance receivables, threshold for disclosure | $ 1,000,000 | ||
Real Estate Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
TDR net finance receivables | $ 4,000,000 | $ 3,000,000 | $ 3,000,000 |
Number of TDR accounts | account | 101 | 61 | 46 |
TDR net finance receivables, held for sale | $ 2,000,000 | $ 2,000,000 | $ 1,000,000 |
Number of TDR accounts, held for sale | account | 53 | 30 | 17 |
Allowance for Finance Receiva69
Allowance for Finance Receivable Losses - Changes in Allowance for Finance Receivable Losses by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||||
Balance at beginning of period | $ 204 | $ 224 | $ 204 | $ 224 | $ 180 | ||||||
Provision for finance receivable losses | $ 92 | $ 70 | $ 91 | 71 | $ 66 | $ 87 | $ 85 | 91 | 324 | 329 | 339 |
Charge-offs | (353) | (369) | (349) | ||||||||
Recoveries | 65 | 54 | 55 | ||||||||
Other | (34) | (1) | |||||||||
Balance at end of period | 240 | 204 | 240 | 204 | 224 | ||||||
Personal Loans | |||||||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||||
Balance at beginning of period | 184 | 173 | 184 | 173 | 130 | ||||||
Provision for finance receivable losses | 318 | 306 | 257 | ||||||||
Charge-offs | (347) | (340) | (250) | ||||||||
Recoveries | 61 | 45 | 37 | ||||||||
Other | 0 | (1) | |||||||||
Balance at end of period | 216 | 184 | 216 | 184 | 173 | ||||||
SCP Loans | |||||||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||||
Balance at beginning of period | 0 | 4 | 0 | 4 | 3 | ||||||
Provision for finance receivable losses | 0 | 14 | 67 | ||||||||
Charge-offs | 0 | (17) | (78) | ||||||||
Recoveries | 0 | 3 | 12 | ||||||||
Other | (4) | 0 | |||||||||
Balance at end of period | 0 | 0 | 0 | 0 | 4 | ||||||
Real Estate Loans | |||||||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||||
Balance at beginning of period | 19 | 46 | 19 | 46 | 46 | ||||||
Provision for finance receivable losses | 6 | 9 | 13 | ||||||||
Charge-offs | (5) | (11) | (18) | ||||||||
Recoveries | 3 | 5 | 5 | ||||||||
Other | (30) | 0 | |||||||||
Balance at end of period | 23 | 19 | 23 | 19 | 46 | ||||||
Retail Sales Finance | |||||||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||||
Balance at beginning of period | $ 1 | $ 1 | 1 | 1 | 1 | ||||||
Provision for finance receivable losses | 0 | 0 | 2 | ||||||||
Charge-offs | (1) | (1) | (3) | ||||||||
Recoveries | 1 | 1 | 1 | ||||||||
Other | 0 | 0 | |||||||||
Balance at end of period | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 |
Allowance for Finance Receiva70
Allowance for Finance Receivable Losses - By Type And By Impairment Method (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for finance receivable losses: | ||||
Collectively evaluated for impairment | $ 175 | $ 165 | ||
Purchased credit impaired finance receivables | 9 | 8 | ||
TDR finance receivables | 56 | 31 | ||
Allowance for finance receivable losses | 240 | 204 | $ 224 | $ 180 |
Finance receivables: | ||||
Collectively evaluated for impairment | 5,260 | 4,844 | ||
TDR finance receivables | 160 | 91 | ||
Net finance receivables | $ 5,442 | $ 4,959 | ||
Allowance for finance receivable losses as a percentage of finance receivables | 4.41% | 4.12% | ||
Purchased credit impaired finance receivables | ||||
Finance receivables: | ||||
Net finance receivables | $ 22 | $ 24 | ||
Personal Loans | ||||
Allowance for finance receivable losses: | ||||
Collectively evaluated for impairment | 172 | 164 | ||
Purchased credit impaired finance receivables | 0 | 0 | ||
TDR finance receivables | 44 | 20 | ||
Allowance for finance receivable losses | 216 | 184 | 173 | 130 |
Finance receivables: | ||||
Collectively evaluated for impairment | 5,197 | 4,757 | ||
TDR finance receivables | 111 | 47 | ||
Net finance receivables | $ 5,308 | $ 4,804 | ||
Allowance for finance receivable losses as a percentage of finance receivables | 4.06% | 3.84% | ||
Personal Loans | Purchased credit impaired finance receivables | ||||
Finance receivables: | ||||
Net finance receivables | $ 0 | $ 0 | ||
Real Estate Loans | ||||
Allowance for finance receivable losses: | ||||
Collectively evaluated for impairment | 2 | 0 | ||
Purchased credit impaired finance receivables | 9 | 8 | ||
TDR finance receivables | 12 | 11 | ||
Allowance for finance receivable losses | 23 | 19 | 46 | 46 |
Finance receivables: | ||||
Collectively evaluated for impairment | 57 | 76 | ||
TDR finance receivables | 49 | 44 | ||
Net finance receivables | $ 128 | $ 144 | ||
Allowance for finance receivable losses as a percentage of finance receivables | 18.66% | 13.31% | ||
Real Estate Loans | Purchased credit impaired finance receivables | ||||
Finance receivables: | ||||
Net finance receivables | $ 22 | $ 24 | ||
Retail Sales Finance | ||||
Allowance for finance receivable losses: | ||||
Collectively evaluated for impairment | 1 | 1 | ||
Purchased credit impaired finance receivables | 0 | 0 | ||
TDR finance receivables | 0 | 0 | ||
Allowance for finance receivable losses | 1 | 1 | $ 1 | $ 1 |
Finance receivables: | ||||
Collectively evaluated for impairment | 6 | 11 | ||
TDR finance receivables | 0 | 0 | ||
Net finance receivables | $ 6 | $ 11 | ||
Allowance for finance receivable losses as a percentage of finance receivables | 9.91% | 4.42% | ||
Retail Sales Finance | Purchased credit impaired finance receivables | ||||
Finance receivables: | ||||
Net finance receivables | $ 0 | $ 0 |
Finance Receivables Held for 71
Finance Receivables Held for Sale - (Details) - USD ($) $ in Millions | Nov. 30, 2016 | Jun. 30, 2016 | May 02, 2016 | Mar. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Finance receivables held for sale | $ 132 | $ 153 | |||||||
Finance receivables transferred from held for investment to held for sale | $ 608 | ||||||||
Net gain on sale of SpringCastle interests | $ 167 | 0 | 167 | 0 | |||||
Finance receivable held for sale, carrying value | $ 602 | ||||||||
Net gain on sales of personal and real estate loans and related trust assets | $ 22 | $ 0 | 18 | $ 0 | |||||
SCP Loans | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Finance receivables transferred from held for investment to held for sale | $ 1,600 | ||||||||
Net gain on sale of SpringCastle interests | $ 167 | ||||||||
Real Estate Loans | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Finance receivables transferred from held for investment to held for sale | $ 50 | $ 257 | |||||||
Real Estate Sale | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Disposal group including discontinued operations carrying value | 58 | $ 250 | |||||||
Loss on loans sold | $ 1 | $ 4 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | $ 531 | $ 582 |
Unrealized Gains | 4 | 2 |
Unrealized Losses | (3) | (6) |
Fair Value | 532 | 578 |
Cost method investments | 1 | 1 |
Bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | 524 | 575 |
Unrealized Gains | 4 | 2 |
Unrealized Losses | (2) | (6) |
Fair Value | 526 | 571 |
U.S. government and government sponsored entities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | 17 | 13 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 17 | 13 |
Obligations of states, municipalities, and political subdivisions | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | 70 | 83 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | (1) |
Fair Value | 70 | 82 |
Non-U.S. government and government sponsored entities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | 4 | 5 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | |
Fair Value | 4 | 5 |
Corporate debt | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | 322 | 356 |
Unrealized Gains | 4 | 2 |
Unrealized Losses | (2) | (5) |
Fair Value | 324 | 353 |
RMBS | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | 35 | 39 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 35 | 39 |
CMBS | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | 23 | 33 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 23 | 33 |
CDO/ABS | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | 53 | 46 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 53 | 46 |
Preferred stocks | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | 6 | 6 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (1) | 0 |
Fair Value | 5 | 6 |
Other long-term investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost/ Amortized Cost | 1 | 1 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 1 | $ 1 |
Investment Securities - Fair Va
Investment Securities - Fair Value and Unrealized Losses on AFS Securities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value | ||
Less Than 12 Months | $ 219 | $ 320 |
12 Months or Longer | 124 | 13 |
Total | 343 | 333 |
Unrealized Losses | ||
Less Than 12 Months | (1) | (6) |
12 Months or Longer | (2) | 0 |
Total | (3) | (6) |
Other-than-temporary impairment credit loss | ||
Minimum disclosure of unrealized losses on certain available-for-sale securities | 1 | 1 |
Bonds | ||
Fair Value | ||
Less Than 12 Months | 218 | 320 |
12 Months or Longer | 119 | 7 |
Total | 337 | 327 |
Unrealized Losses | ||
Less Than 12 Months | (1) | (6) |
12 Months or Longer | (1) | 0 |
Total | (2) | (6) |
U.S. government and government sponsored entities | ||
Fair Value | ||
Less Than 12 Months | 13 | 9 |
12 Months or Longer | 1 | 0 |
Total | 14 | 9 |
Unrealized Losses | ||
Less Than 12 Months | 0 | |
12 Months or Longer | 0 | 0 |
Total | 0 | 0 |
Obligations of states, municipalities, and political subdivisions | ||
Fair Value | ||
Less Than 12 Months | 35 | 57 |
12 Months or Longer | 12 | 2 |
Total | 47 | 59 |
Unrealized Losses | ||
Less Than 12 Months | 0 | (1) |
12 Months or Longer | 0 | 0 |
Total | 0 | (1) |
Non-U.S. government and government sponsored entities | ||
Fair Value | ||
Less Than 12 Months | 3 | |
Total | 3 | |
Unrealized Losses | ||
Less Than 12 Months | 0 | |
Total | 0 | |
Corporate debt | ||
Fair Value | ||
Less Than 12 Months | 120 | 171 |
12 Months or Longer | 69 | 5 |
Total | 189 | 176 |
Unrealized Losses | ||
Less Than 12 Months | (1) | (5) |
12 Months or Longer | (1) | 0 |
Total | (2) | (5) |
RMBS | ||
Fair Value | ||
Less Than 12 Months | 14 | 33 |
12 Months or Longer | 12 | 0 |
Total | 26 | 33 |
Unrealized Losses | ||
Less Than 12 Months | 0 | 0 |
12 Months or Longer | 0 | 0 |
Total | 0 | 0 |
CMBS | ||
Fair Value | ||
Less Than 12 Months | 6 | 22 |
12 Months or Longer | 15 | |
Total | 21 | 22 |
Unrealized Losses | ||
Less Than 12 Months | 0 | 0 |
12 Months or Longer | 0 | 0 |
Total | 0 | 0 |
CDO/ABS | ||
Fair Value | ||
Less Than 12 Months | 30 | 25 |
12 Months or Longer | 10 | 0 |
Total | 40 | 25 |
Unrealized Losses | ||
Less Than 12 Months | 0 | |
12 Months or Longer | 0 | 0 |
Total | 0 | 0 |
Preferred stocks | ||
Fair Value | ||
Less Than 12 Months | 0 | 0 |
12 Months or Longer | 5 | 6 |
Total | 5 | 6 |
Unrealized Losses | ||
Less Than 12 Months | 0 | 0 |
12 Months or Longer | (1) | 0 |
Total | (1) | $ 0 |
Other long-term investments | ||
Fair Value | ||
Less Than 12 Months | 1 | |
12 Months or Longer | 0 | |
Total | 1 | |
Unrealized Losses | ||
Less Than 12 Months | 0 | |
12 Months or Longer | 0 | |
Total | $ 0 |
Investment Securities (Narrativ
Investment Securities (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)investment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | |||
Investment securities in an unrealized loss position | investment | 217 | ||
Net impairment losses recognized in net income (loss) | $ 0 | $ 0 | $ 0 |
Available-for-sale securities | 532,000,000 | 578,000,000 | |
Fair value of fixed maturity trading and other securities | 3,000,000 | 3,000,000 | |
Unrealized gain on securities | 4,000,000 | ||
Net realized gain (loss) on trading securities | 0 | 0 | |
Net realized loss on trading securities | $ 3,000,000 | ||
Deposits With Third Parties | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities | $ 8,000,000 | $ 11,000,000 |
Investment Securities - Proceed
Investment Securities - Proceeds of AFS Securities Sold or Redeemed (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Available-for-sale securities sold or redeemed | |||
Proceeds from sales and redemptions | $ 283 | $ 308 | $ 416 |
Realized gains | 7 | 9 | 15 |
Realized losses | 0 | (1) | (1) |
Net realized gains | $ 7 | $ 8 | $ 14 |
Investment Securities - Contrac
Investment Securities - Contractual Maturities of Fixed Maturity AFS Securities (Details) $ in Millions | Dec. 31, 2017USD ($) |
Fair Value | |
Due in 1 year or less | $ 78 |
Due after 1 year through 5 years | 178 |
Due after 5 years through 10 years | 36 |
Due after 10 years | 123 |
Mortgage-backed, asset-backed, and collateralized securities | 111 |
Total | 526 |
Amortized Cost | |
Due in 1 year or less | 78 |
Due after 1 year through 5 years | 180 |
Due after 5 years through 10 years | 36 |
Due after 10 years | 119 |
Mortgage-backed, asset-backed, and collateralized securities | 111 |
Total | $ 524 |
Other Assets Components of Othe
Other Assets Components of Other Assets Table (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Other Assets [Abstract] | ||
Prepaid expenses and deferred charges | $ 26 | $ 38 |
Fixed assets, net | 25 | 70 |
Deferred tax assets | 24 | 2 |
Ceded insurance reserves | 20 | 22 |
Other intangible assets | 15 | 15 |
Cost basis investments | 11 | 11 |
Receivables from parent and affiliates | 11 | 40 |
Other investments | 9 | 30 |
Other | 20 | 23 |
Other Assets | $ 161 | $ 251 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Other Assets [Abstract] | ||
Accumulated depreciation on fixed assets | $ 96 | $ 180 |
Other Assets - Other Intangible
Other Assets - Other Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible asset | |||
Gross Carrying Amount | $ 75 | $ 75 | |
Accumulated Amortization | (60) | (60) | |
Net Other Intangible Assets | 15 | 15 | |
Amortization expense (less than) | 1 | 1 | $ 4 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Finite-lived intangible assets, amortization expense, 2017 (less than) | 1 | ||
Finite-lived intangible assets, amortization expense, 2018 (less than) | 1 | ||
Finite-lived intangible assets, amortization expense, 2019 (less than) | 1 | ||
Finite-lived intangible assets, amortization expense, 2020 (less than) | 1 | ||
Finite-lived intangible assets, amortization expense, 2021 (less than) | 1 | ||
VOBA | |||
Intangible asset | |||
Gross Carrying Amount | 36 | 36 | |
Accumulated Amortization | (33) | (33) | |
Net Other Intangible Assets | 3 | 3 | |
Customer relationships | |||
Intangible asset | |||
Gross Carrying Amount | 18 | 18 | |
Accumulated Amortization | (18) | (18) | |
Net Other Intangible Assets | 0 | 0 | |
Licenses | |||
Intangible asset | |||
Gross Carrying Amount | 12 | 12 | |
Accumulated Amortization | 0 | 0 | |
Net Other Intangible Assets | 12 | 12 | |
Customer lists | |||
Intangible asset | |||
Gross Carrying Amount | 9 | 9 | |
Accumulated Amortization | (9) | (9) | |
Net Other Intangible Assets | $ 0 | $ 0 |
Transactions with Affiliates (D
Transactions with Affiliates (Details) | Mar. 31, 2016 |
Corporate Joint Venture | |
Related Party Transaction [Line Items] | |
Ownership percentage | 47.00% |
Related Party Transactions (Det
Related Party Transactions (Details) | Apr. 10, 2017USD ($) | Apr. 05, 2017USD ($) | Dec. 31, 2017USD ($)building | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jul. 20, 2016USD ($) | Jul. 19, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 01, 2015USD ($) | Nov. 15, 2015USD ($) | Nov. 12, 2015USD ($) |
Related Party Transaction [Line Items] | |||||||||||||
Notes receivable from parent and affiliates | $ 4,488,000,000 | $ 3,723,000,000 | |||||||||||
Decrease in total equity | 38,000,000 | ||||||||||||
Finance charges | 1,228,000,000 | 1,276,000,000 | $ 1,597,000,000 | ||||||||||
Receivables from parent and affiliates | 11,000,000 | 40,000,000 | |||||||||||
Carrying Value | $ 7,865,000,000 | 6,837,000,000 | |||||||||||
Independence Demand Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Interest rates (as a percent) | 5.87% | ||||||||||||
Revolving demand note, maximum commitment | $ 3,550,000,000 | ||||||||||||
OneMain | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Servicing fees | $ 13,000,000 | 0 | |||||||||||
Finance charges | 15,000,000 | 0 | |||||||||||
OneMain Consumer Loan, Inc. | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Loan processing fee per underwritten approved application | 35 | ||||||||||||
Loan processing fee | 22,000,000 | 16,000,000 | |||||||||||
Independence Demand Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Notes receivable from parent and affiliates | $ 3,400,000,000 | ||||||||||||
Insurance Claims | OneMain Insurance Subsidiaries | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Accounts payable to related parties | 22,000,000 | 3,000,000 | |||||||||||
Accounts receivable from related parties | 4,000,000 | 0 | |||||||||||
Intercompany Agreements | Affiliated companies | Springleaf Consumer Loan, Inc. (SCLI) [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Aggregate purchase price | $ 4,000,000 | $ 89,000,000 | |||||||||||
Unpaid principal balance of loans sold | $ 4,000,000 | $ 89,000,000 | |||||||||||
Home and Auto Membership Plan Fees | OneMain Insurance Subsidiaries | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Accounts payable to related parties | 2,000,000 | 0 | |||||||||||
Loan Purchase and Sale Agreements | Affiliated companies | OneMain Consumer Loan, Inc. | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Service fee expenses | 2,000,000 | 3,000,000 | |||||||||||
Assignment of Intercompany Demand Note | Independence Demand Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Right to receive note | $ 150,000,000 | ||||||||||||
Aggregate purchase price | $ 150,000,000 | ||||||||||||
Independence Demand Note | Independence Demand Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Notes receivable from parent and affiliates | 2,900,000,000 | 2,900,000,000 | |||||||||||
Interest revenue, related party | 173,000,000 | 185,000,000 | 27,000,000 | ||||||||||
Cash Services Note | Independence Demand Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revolving demand note, maximum commitment | 3,400,000,000 | ||||||||||||
OMFH Note | Independence Demand Note | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revolving demand note, maximum commitment | $ 150,000,000 | ||||||||||||
OneMain Demand Note | OneMain Financial Holdings, Inc. | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Notes receivable from parent and affiliates | 1,200,000,000 | 530,000,000 | |||||||||||
Revolving demand note, maximum commitment | 1,600,000,000 | $ 500,000,000 | |||||||||||
Interest revenue, related party | $ 59,000,000 | 10,000,000 | |||||||||||
Number of days notice required to demand note payment | 5 days | ||||||||||||
OMFH revolving demand note, OneMain Acquisition closing | OneMain Financial Holdings, Inc. | OneMain Financial Holdings, Inc. | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Revolving demand note, maximum commitment | $ 500,000,000 | ||||||||||||
Number of days notice required to demand note payment | 5 days | ||||||||||||
Notes receivable, maximum advance, related parties | $ 750,000,000 | ||||||||||||
Payable due to affiliates | 0 | 0 | |||||||||||
Interest expense on payable to affiliate | 0 | 7,000,000 | |||||||||||
SFI | Affiliated companies | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Notes receivable from parent and affiliates | 387,000,000 | 285,000,000 | |||||||||||
Interest revenue on note receivable | $ 23,000,000 | 19,000,000 | 15,000,000 | ||||||||||
Capital contributions received to satisfy interest payments | 10,000,000 | ||||||||||||
Spring leaf General Services Corporation | Services Agreement | Affiliated companies | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Percentage of allocated cost of service | 100.00% | ||||||||||||
Spring leaf General Services Corporation | Services Agreement | Affiliated companies | Springleaf Finance Management Corporation | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Service fee expenses | $ 292,000,000 | 239,000,000 | 224,000,000 | ||||||||||
Spring leaf General Services Corporation | License Agreement | Affiliated companies | Springleaf Finance Management Corporation | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Percentage of allocated cost of service | 100.00% | ||||||||||||
Margin on the systems and software (as a percent) | 7.00% | ||||||||||||
Percentage of actual cost incurred | 100.00% | ||||||||||||
License fees | $ 1,000,000 | 6,000,000 | 6,000,000 | ||||||||||
Spring leaf General Services Corporation | Building Lease Agreement | Affiliated companies | Springleaf Finance Management Corporation | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Number of buildings leased | building | 6 | ||||||||||||
Annual rental fees | $ 4,000,000 | ||||||||||||
Rent charged | $ 1,000,000 | $ 4,000,000 | $ 4,000,000 | ||||||||||
Springleaf Finance Management Corporation | Affiliated companies | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Payable due to affiliates | 1,000,000 | ||||||||||||
Decrease in total equity | $ 38,000,000 | ||||||||||||
Decrease in total assets | $ 65,000,000 | ||||||||||||
Medium Term Notes | OneMain Assurance Services, LLC | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Notes receivable from parent and affiliates | 10,000,000 | ||||||||||||
Receivables from parent and affiliates | 10,000,000 | ||||||||||||
Medium Term Notes | OneMain Assurance Services, LLC | OneMain Assurance Services, LLC | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Carrying Value | $ 9,000,000 |
Long-term Debt - Carrying Value
Long-term Debt - Carrying Value and Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Carrying Value | $ 7,865 | $ 6,837 |
Fair Value | 8,369 | 7,308 |
Senior debt | ||
Debt Instrument [Line Items] | ||
Carrying Value | 7,693 | 6,665 |
Fair Value | 8,180 | 7,150 |
Junior Subordinated Debt | ||
Debt Instrument [Line Items] | ||
Carrying Value | 172 | 172 |
Fair Value | $ 189 | $ 158 |
Long-term Debt - Weighted Avera
Long-term Debt - Weighted Average Interest Rates (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Weighted average interest rates during period | 6.98% | 7.30% | 7.05% |
Current Weighted Average Interest Rate | 6.57% | 7.59% | |
Senior debt | |||
Debt Instrument [Line Items] | |||
Weighted average interest rates during period | 6.99% | 7.18% | 6.96% |
Current Weighted Average Interest Rate | 6.57% | 7.46% | |
Junior Subordinated Debt | |||
Debt Instrument [Line Items] | |||
Weighted average interest rates during period | 6.41% | 12.26% | 12.26% |
Current Weighted Average Interest Rate | 6.37% | 12.26% |
Long-term Debt - Principal Matu
Long-term Debt - Principal Maturities By Type (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Jan. 15, 2017 | Dec. 31, 2016 | Jan. 31, 2007 | |
Debt Instrument [Line Items] | ||||
2,018 | $ 0 | |||
2,019 | 700,000,000 | |||
2,020 | 1,300,000,000 | |||
2,021 | 650,000,000 | |||
2,022 | 1,000,000,000 | |||
2023-2067 | 1,525,000,000 | |||
Securitizations | 3,052,000,000 | |||
Total principal maturities | 8,227,000,000 | |||
Carrying Value | 7,865,000,000 | $ 6,837,000,000 | ||
Debt issuance costs | (41,000,000) | |||
Junior Subordinated Debt | ||||
Debt Instrument [Line Items] | ||||
Carrying Value | $ 172,000,000 | 172,000,000 | ||
Junior Subordinated Debenture | Junior Subordinated Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rates (as a percent) | 6.00% | |||
Total principal maturities | $ 350,000,000 | |||
Debt instrument, interest rate, effective percentage | 3.11% | |||
Senior debt | Securitizations | ||||
Debt Instrument [Line Items] | ||||
2,018 | $ 0 | |||
2,019 | 0 | |||
2,020 | 0 | |||
2,021 | 0 | |||
2,022 | 0 | |||
2023-2067 | 0 | |||
Securitizations | 3,052,000,000 | |||
Total principal maturities | 3,052,000,000 | |||
Carrying Value | 3,041,000,000 | |||
Debt issuance costs | (11,000,000) | |||
Senior debt | Medium Term Notes | ||||
Debt Instrument [Line Items] | ||||
2,018 | 0 | |||
2,019 | 700,000,000 | |||
2,020 | 1,300,000,000 | |||
2,021 | 650,000,000 | |||
2,022 | 1,000,000,000 | |||
2023-2067 | 1,175,000,000 | |||
Securitizations | 0 | |||
Total principal maturities | 4,825,000,000 | |||
Carrying Value | 4,652,000,000 | |||
Debt issuance costs | (30,000,000) | |||
Senior debt | Revolving Credit Facility | Other assets | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs, excluded from direct deduction from long term debt | $ 11,000,000 | |||
Junior Subordinated Debt | ||||
Debt Instrument [Line Items] | ||||
Interest rates (as a percent) | 3.11% | |||
2,018 | $ 0 | |||
2,019 | 0 | |||
2,020 | 0 | |||
2,021 | 0 | |||
2,022 | 0 | |||
2023-2067 | 350,000,000 | |||
Securitizations | 0 | |||
Total principal maturities | 350,000,000 | |||
Carrying Value | 172,000,000 | |||
Debt issuance costs | $ 0 | |||
Minimum | Senior debt | Securitizations | ||||
Debt Instrument [Line Items] | ||||
Interest rates (as a percent) | 2.04% | |||
Minimum | Senior debt | Medium Term Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rates (as a percent) | 5.25% | |||
Maximum | Senior debt | Securitizations | ||||
Debt Instrument [Line Items] | ||||
Interest rates (as a percent) | 6.50% | |||
Maximum | Senior debt | Medium Term Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rates (as a percent) | 8.25% | |||
London Interbank Offered Rate (LIBOR) | Junior Subordinated Debenture | Junior Subordinated Debt | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.75% | |||
Consolidated VIEs | ||||
Debt Instrument [Line Items] | ||||
Carrying Value | $ 3,000,000,000 | $ 2,700,000,000 | ||
Amount outstanding under securitization transaction | $ 0 |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) | 1 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2007USD ($) | Dec. 31, 2017USD ($)agreement | Sep. 30, 2016 | Dec. 08, 2017USD ($) | May 30, 2017USD ($) | May 15, 2017USD ($) | Jan. 15, 2017 | Dec. 31, 2016USD ($) | Apr. 11, 2016USD ($) | Dec. 03, 2014 | Dec. 30, 2013 | |
Principal maturities of long-term debt by type of debt | |||||||||||
Carrying Value | $ 7,865,000,000 | $ 6,837,000,000 | |||||||||
Number of debt agreements with specific financial targets or ratios | agreement | 0 | ||||||||||
Long-term debt, gross | $ 8,227,000,000 | ||||||||||
Senior debt | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Carrying Value | 7,693,000,000 | 6,665,000,000 | |||||||||
Senior debt | SPRINGLEAF FINANCE CORPORATION | Guaranty Agreements | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Carrying Value | 1,600,000,000 | ||||||||||
Senior Note 8.25%, due 2020 | SPRINGLEAF FINANCE CORPORATION | Guaranty Agreements | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 8.25% | ||||||||||
Senior Notes 5.25 Percent Due 2019 | SPRINGLEAF FINANCE CORPORATION | Guaranty Agreements | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 5.25% | ||||||||||
Senior Notes Issued in May 2013 | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 5.25% | ||||||||||
Carrying Value | 700,000,000 | ||||||||||
8.250% Senior Notes due 2023 | SPRINGLEAF FINANCE CORPORATION | Guaranty Agreements | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 8.25% | ||||||||||
7.750% Senior Notes due 2021 | SPRINGLEAF FINANCE CORPORATION | Guaranty Agreements | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 7.75% | ||||||||||
6.00% Senior Notes due 2020 | SPRINGLEAF FINANCE CORPORATION | Guaranty Agreements | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 6.00% | ||||||||||
Junior Subordinated Debt | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Carrying Value | 172,000,000 | $ 172,000,000 | |||||||||
Trailing period used to calculate fixed charge ratio | 12 months | ||||||||||
Junior Subordinated Debt | Minimum | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Tangible equity to tangible managed assets (as a percent) | 5.50% | ||||||||||
Average fixed charge ratio | 1.1 | ||||||||||
Springleaf Finance Corporation | Senior Note 8.25%, due 2020 | Guaranty Agreements | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 8.25% | ||||||||||
Issue Amount | 1,000,000,000 | $ 1,000,000,000 | |||||||||
Senior Notes 5.625% | SPRINGLEAF FINANCE CORPORATION | Guaranty Agreements | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Long-term debt, gross | 875,000,000 | ||||||||||
Senior Notes 5.625% | Senior debt | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 5.625% | ||||||||||
Issue Amount | $ 875,000,000 | ||||||||||
Debt instrument, repurchase amount | $ 557,000,000 | ||||||||||
Medium Term Notes | Senior debt | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 6.90% | ||||||||||
Senior Notes 6.125% | SPRINGLEAF FINANCE CORPORATION | Guaranty Agreements | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Long-term debt, gross | $ 1,000,000,000 | ||||||||||
Senior Notes 6.125% | Senior debt | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 6.125% | 6.125% | |||||||||
Issue Amount | $ 500,000,000 | $ 500,000,000 | |||||||||
Senior Notes due 2017 | Senior debt | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 6.90% | ||||||||||
Debt instrument, repurchase amount | $ 466,000,000 | ||||||||||
Junior Subordinated Debenture | Junior Subordinated Debt | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Interest rates (as a percent) | 6.00% | ||||||||||
Long-term debt, gross | $ 350,000,000 | ||||||||||
Term of debt | 60 years | ||||||||||
Debt instrument, interest rate, effective percentage | 3.11% | ||||||||||
London Interbank Offered Rate (LIBOR) | Junior Subordinated Debenture | Junior Subordinated Debt | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Debt instrument, basis spread on variable rate | 1.75% | ||||||||||
Beneficial Owners of Debt | Senior Notes due 2017 | Springleaf Finance Corporation | Senior Notes due 2017 | |||||||||||
Principal maturities of long-term debt by type of debt | |||||||||||
Debt instrument, repurchase amount | $ 600,000,000 |
Variable Interest Entities Sche
Variable Interest Entities Schedule of Variable Interest Entities (Details) - Consolidated VIEs - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and cash equivalents | ||
Variable Interest Entity [Line Items] | ||
Assets | $ 2 | $ 2 |
Finance receivables: | Personal Loans | ||
Variable Interest Entity [Line Items] | ||
Assets | 3,334 | 2,943 |
Allowance for finance receivable losses | ||
Variable Interest Entity [Line Items] | ||
Assets | 141 | 94 |
Restricted cash and restricted cash equivalents | ||
Variable Interest Entity [Line Items] | ||
Assets | 158 | 211 |
Other assets | ||
Variable Interest Entity [Line Items] | ||
Assets | 11 | 9 |
Long-term debt | ||
Variable Interest Entity [Line Items] | ||
Liabilities | 3,041 | 2,675 |
Other liabilities | ||
Variable Interest Entity [Line Items] | ||
Liabilities | $ 6 | $ 7 |
Variable Interest Entities Secu
Variable Interest Entities Securitized Borrowings (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2017 | Jun. 28, 2017 | Feb. 15, 2017 | Feb. 01, 2017 | Dec. 31, 2016 | Dec. 14, 2016 | Jul. 19, 2016 | |
Debt Instrument [Line Items] | |||||||
Carrying Value | $ 7,865,000,000 | $ 6,837,000,000 | |||||
Current Weighted Average Interest Rate | 6.57% | 7.59% | |||||
Consolidated VIEs | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Value | $ 3,000,000,000 | $ 2,700,000,000 | |||||
Consumer Securitizations: | Consolidated VIEs | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Value | 2,596,000,000 | ||||||
Consumer Securitizations: | Consolidated VIEs | SLFT 2015-A | |||||||
Debt Instrument [Line Items] | |||||||
Issue Amount | 1,163,000,000 | ||||||
Carrying Value | $ 1,163,000,000 | ||||||
Current Weighted Average Interest Rate | 3.47% | ||||||
Original Revolving Period | 3 years | ||||||
Consumer Securitizations: | Consolidated VIEs | SLFT 2015-B | |||||||
Debt Instrument [Line Items] | |||||||
Issue Amount | $ 314,000,000 | ||||||
Carrying Value | $ 314,000,000 | ||||||
Current Weighted Average Interest Rate | 3.78% | ||||||
Original Revolving Period | 5 years | ||||||
Consumer Securitizations: | Consolidated VIEs | SLFT 2016-A | |||||||
Debt Instrument [Line Items] | |||||||
Issue Amount | $ 532,000,000 | ||||||
Carrying Value | $ 500,000,000 | ||||||
Current Weighted Average Interest Rate | 3.10% | ||||||
Original Revolving Period | 2 years | ||||||
Principal balance retained | $ 32,000,000 | ||||||
Consumer Securitizations: | Consolidated VIEs | SLFT 2017-A | |||||||
Debt Instrument [Line Items] | |||||||
Issue Amount | $ 652,000,000 | ||||||
Carrying Value | $ 619,000,000 | ||||||
Current Weighted Average Interest Rate | 2.98% | ||||||
Original Revolving Period | 3 years | ||||||
Consumer Securitizations: | Consolidated VIEs | SLFT 2014 A | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Value | $ 221,000,000 | ||||||
Debt instrument, redemption price | 188,000,000 | ||||||
Auto Securitization: | Consolidated VIEs | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Value | $ 456,000,000 | ||||||
Auto Securitization: | Consolidated VIEs | ODART 2016-1 | |||||||
Debt Instrument [Line Items] | |||||||
Issue Amount | 754,000,000 | ||||||
Carrying Value | $ 188,000,000 | ||||||
Current Weighted Average Interest Rate | 2.91% | ||||||
Auto Securitization: | Consolidated VIEs | ODART 2017-1 | |||||||
Debt Instrument [Line Items] | |||||||
Issue Amount | $ 300,000,000 | ||||||
Carrying Value | $ 268,000,000 | ||||||
Current Weighted Average Interest Rate | 2.61% | ||||||
Original Revolving Period | 1 year | ||||||
Total secured structured financings | Consolidated VIEs | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Value | $ 3,052,000,000 | ||||||
Class A Notes | Consolidated VIEs | SLFT 2017-A | |||||||
Debt Instrument [Line Items] | |||||||
Principal balance retained | $ 26,000,000 | ||||||
Class A Notes | Consolidated VIEs | ODART 2017-1 | |||||||
Debt Instrument [Line Items] | |||||||
Principal balance retained | $ 11,000,000 | ||||||
Class B Notes | Consolidated VIEs | SLFT 2017-A | |||||||
Debt Instrument [Line Items] | |||||||
Principal balance retained | 2,000,000 | ||||||
Class B Notes | Consolidated VIEs | ODART 2017-1 | |||||||
Debt Instrument [Line Items] | |||||||
Principal balance retained | 1,000,000 | ||||||
Class C Notes | Consolidated VIEs | SLFT 2017-A | |||||||
Debt Instrument [Line Items] | |||||||
Principal balance retained | 2,000,000 | ||||||
Class C Notes | Consolidated VIEs | ODART 2017-1 | |||||||
Debt Instrument [Line Items] | |||||||
Principal balance retained | 1,000,000 | ||||||
Class D Notes | Consolidated VIEs | SLFT 2017-A | |||||||
Debt Instrument [Line Items] | |||||||
Principal balance retained | $ 3,000,000 | ||||||
Class D Notes | Consolidated VIEs | ODART 2016-1 | |||||||
Debt Instrument [Line Items] | |||||||
Principal balance retained | $ 54,000,000 | ||||||
Class D Notes | Consolidated VIEs | ODART 2017-1 | |||||||
Debt Instrument [Line Items] | |||||||
Principal balance retained | 1,000,000 | ||||||
Class D Notes | Consolidated VIEs | Twenty First Street | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, redemption price | $ 33,000,000 | ||||||
Class E Notes | Consolidated VIEs | ODART 2017-1 | |||||||
Debt Instrument [Line Items] | |||||||
Principal balance retained | $ 18,000,000 | ||||||
Minimum | Consumer Securitizations: | Consolidated VIEs | |||||||
Debt Instrument [Line Items] | |||||||
Original Revolving Period | 1 year | ||||||
Maximum | Consumer Securitizations: | Consolidated VIEs | |||||||
Debt Instrument [Line Items] | |||||||
Original Revolving Period | 5 years |
Variable Interest Entities Revo
Variable Interest Entities Revolving Conduit Facilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Carrying Value | $ 7,865 | $ 6,837 |
Consolidated VIEs | ||
Debt Instrument [Line Items] | ||
Carrying Value | 3,000 | $ 2,700 |
Consolidated VIEs | Revolving Conduit Facilities | ||
Debt Instrument [Line Items] | ||
Note Maximum Balance | 2,200 | |
Carrying Value | 0 | |
First Avenue Funding LLC | Consolidated VIEs | Revolving Conduit Facilities | ||
Debt Instrument [Line Items] | ||
Note Maximum Balance | 250 | |
Carrying Value | 0 | |
Seine River Funding, LLC | Consolidated VIEs | Revolving Conduit Facilities | ||
Debt Instrument [Line Items] | ||
Note Maximum Balance | 500 | |
Carrying Value | 0 | |
Thur River Funding, LLC | Consolidated VIEs | Revolving Conduit Facilities | ||
Debt Instrument [Line Items] | ||
Note Maximum Balance | 350 | |
Carrying Value | 0 | |
Mystic River Funding, LLC | Consolidated VIEs | Revolving Conduit Facilities | ||
Debt Instrument [Line Items] | ||
Note Maximum Balance | 850 | |
Carrying Value | 0 | |
Fourth Avenue Auto Funding, LLC | Consolidated VIEs | Revolving Conduit Facilities | ||
Debt Instrument [Line Items] | ||
Note Maximum Balance | 250 | |
Carrying Value | $ 0 |
Variable Interest Entities Narr
Variable Interest Entities Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Carrying amounts of consolidated VIE assets and liabilities associated with securitization trusts | |||||||||||
Interest expense | $ 128 | $ 133 | $ 129 | $ 127 | $ 127 | $ 135 | $ 138 | $ 156 | $ 517 | $ 556 | $ 667 |
Consolidated VIEs | |||||||||||
Carrying amounts of consolidated VIE assets and liabilities associated with securitization trusts | |||||||||||
Interest expense | $ 113 | $ 122 | $ 184 |
Insurance (Details)
Insurance (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Insurance claims and policyholder liabilities | ||||
Claim reserves | $ 66 | $ 70 | $ 73 | $ 70 |
Unearned insurance premium and claim reserves | 108 | 212 | ||
Insurance claims and policyholder liabilities | 261 | 248 | ||
Total | 369 | 460 | ||
Insurance claims and policyholder liabilities assumed from other insurers | 50 | 52 | ||
Ceded insurance reserves | 20 | 22 | ||
Non-finance receivable | ||||
Insurance claims and policyholder liabilities | ||||
Claim reserves | 42 | 41 | ||
Benefit reserves | 61 | 65 | ||
Insurance claims and policyholder liabilities | 103 | 106 | ||
Non-affiliated insurance companies | ||||
Insurance claims and policyholder liabilities | ||||
Ceded insurance reserves | 20 | 22 | ||
Payable to SFC | Finance receivable | ||||
Insurance claims and policyholder liabilities | ||||
Unearned premium reserves | 92 | 189 | ||
Claim reserves | 16 | 23 | ||
Unearned insurance premium and claim reserves | 108 | 212 | ||
Payable to OMH | Finance receivable | ||||
Insurance claims and policyholder liabilities | ||||
Unearned premium reserves | 42 | 6 | ||
Claim reserves | 5 | 0 | ||
Unearned insurance premium and claim reserves | 47 | 6 | ||
Third-Party Beneficiaries | Finance receivable | ||||
Insurance claims and policyholder liabilities | ||||
Unearned premium reserves | 10 | 25 | ||
Claim reserves | 3 | 6 | ||
Benefit reserves | 98 | 105 | ||
Insurance claims and policyholder liabilities | $ 111 | $ 136 |
Insurance - Change in Reserve f
Insurance - Change in Reserve for Unpaid Claims and Loss Adjustment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in the liability for unpaid claims and loss adjustment expenses, net of reinsurance recoverable | |||
Balance at beginning of period | $ 70 | $ 73 | $ 70 |
Plus reinsurance recoverables | (22) | (22) | (22) |
Net balance at beginning of period | 48 | 51 | 48 |
Additions for losses and loss adjustment expenses incurred to: | |||
Current year | 60 | 65 | 64 |
Prior years | 3 | 0 | 0 |
Total | 63 | 65 | 64 |
Reductions for losses and loss adjustment expenses paid related to: | |||
Current year | (43) | (44) | (40) |
Prior years | (22) | (24) | (21) |
Total | (65) | (68) | (61) |
Net balance at end of period | 46 | 48 | 51 |
Plus reinsurance recoverables | 20 | 22 | 22 |
Balance at end of period | $ 66 | $ 70 | $ 73 |
Insurance - Incurred and Cumula
Insurance - Incurred and Cumulative Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (Details) $ in Millions | Dec. 31, 2017USD ($)claim | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | $ 43 | $ 45 | $ 48 | ||
Credit insurance | |||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 242 | ||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 219 | ||||
All outstanding liabilities before 2013, net of reinsurance | 0 | ||||
Liabilities for claims and claim adjustment expenses, net of reinsurance | 23 | 26 | 29 | ||
2013 | Credit insurance | |||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 38 | 38 | 38 | $ 38 | $ 42 |
Incurred-but- not-reported Liabilities | $ 0 | ||||
Cumulative Number of Reported Claims | claim | 22,068 | ||||
Cumulative Frequency | 2.80% | ||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 38 | 38 | 37 | 34 | $ 23 |
2014 | Credit insurance | |||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 46 | 46 | 46 | 50 | |
Incurred-but- not-reported Liabilities | $ 0 | ||||
Cumulative Number of Reported Claims | claim | 24,902 | ||||
Cumulative Frequency | 2.80% | ||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 46 | 45 | 41 | $ 28 | |
2015 | Credit insurance | |||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 50 | 50 | 54 | ||
Incurred-but- not-reported Liabilities | $ 1 | ||||
Cumulative Number of Reported Claims | claim | 25,874 | ||||
Cumulative Frequency | 2.80% | ||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 49 | 45 | $ 31 | ||
2016 | Credit insurance | |||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 55 | 55 | |||
Incurred-but- not-reported Liabilities | $ 6 | ||||
Cumulative Number of Reported Claims | claim | 25,291 | ||||
Cumulative Frequency | 2.70% | ||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 49 | $ 36 | |||
2017 | Credit insurance | |||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 53 | ||||
Incurred-but- not-reported Liabilities | $ 16 | ||||
Cumulative Number of Reported Claims | claim | 19,114 | ||||
Cumulative Frequency | 2.30% | ||||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | $ 37 |
Insurance - Reconciliations of
Insurance - Reconciliations of Net Incurred And Paid Claims Development to the Liability for Claims and Claim Adjustment Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance: | $ 43 | $ 45 | $ 48 | |
Insurance lines other than short-duration | 3 | 3 | 3 | |
Total gross liability for unpaid claims and claim adjustment expense | 66 | 70 | 73 | $ 70 |
Credit insurance | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance: | 23 | 26 | 29 | |
Other short-duration insurance lines | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance: | 20 | 19 | 19 | |
Reinsurance Recoverable for Paid and Unpaid Claims and Claims Adjustments | $ 20 | $ 22 | $ 22 |
Insurance - Average Annual Perc
Insurance - Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Details) - Credit insurance | Dec. 31, 2017 |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year One | 63.90% |
Year Two | 26.80% |
Year Three | 8.30% |
Year Four | 2.30% |
Year Five | 0.20% |
Insurance - Statutory Net Incom
Insurance - Statutory Net Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and casualty | |||
Statutory net income (loss) and statutory capital and surplus | |||
Statutory net income (loss) | $ 19 | $ 11 | $ 15 |
Statutory capital and surplus | 42 | 63 | |
Life and health | |||
Statutory net income (loss) and statutory capital and surplus | |||
Statutory net income (loss) | 37 | 20 | $ (1) |
Statutory capital and surplus | $ 79 | $ 133 |
Insurance - Dividend Restrictio
Insurance - Dividend Restrictions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Insurance | |||
Statutory accounting practice, period that the ordinary dividends can be paid without prior approval | 12 months | ||
Maximum amount of dividends that may be paid in a 12 month period without prior approval from regulatory agencies, as a percentage of policyholder's surplus | 10.00% | ||
Statutory accounting practice, period that the extraordinary dividends can be paid without prior approval | 12 months | ||
Maximum extraordinary dividend distribution without prior approval from regulatory agency, percent | 10.00% | ||
Yosemite | |||
Insurance | |||
Dividends paid with approval of regulatory agency | $ 125 | $ 63 | $ 100 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Payables to parent and affiliates | $ 110 | $ 13 |
Accrued interest on debt | 44 | 48 |
Accrued expenses and other liabilities | 23 | 39 |
Loan principal warranty reserve | 7 | 13 |
Retirement plans | 5 | 31 |
Other | 25 | 41 |
Total | 214 | $ 185 |
Intercompany Agreements | ||
Related Party Transaction [Line Items] | ||
Payables to parent and affiliates | 67 | |
American Health and Life Insurance Company | ||
Related Party Transaction [Line Items] | ||
Payables to parent and affiliates | 24 | |
OneMain Consumer Loan, Inc. | ||
Related Party Transaction [Line Items] | ||
Payables to parent and affiliates | 2 | |
Services Agreement | Spring Castle Holdings LLC [Member] | OneMain Financial Holdings, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Payables to parent and affiliates | 4 | |
Services Agreement | Spring leaf General Services Corporation | Springleaf Finance Management Corporation | Affiliated companies | ||
Related Party Transaction [Line Items] | ||
Payables to parent and affiliates | $ 13 |
Capital Stock (Details)
Capital Stock (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2017item$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | |
Capital stock | ||
Number of classes of authorized capital stock | item | 2 | |
Par value and shares authorized | ||
Special shares, par value (in USD per share) | $ / shares | $ 0 | |
Common stock, par value (in USD per share) | $ / shares | $ 0.50 | $ 0.50 |
Special shares authorized (in shares) | 25,000,000 | |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Shares issued and outstanding | ||
Special stock, shares issued (in shares) | 0 | 0 |
Special stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares issued (in shares) | 10,160,021 | 10,160,021 |
Common stock, shares outstanding (in shares) | 10,160,021 | 10,160,021 |
SFI | ||
Capital stock | ||
Capital contributions received to satisfy hybrid debt semi-annual interest payments | $ | $ 10 |
Accumulated Other Comprehensi99
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in accumulated other comprehensive income (loss) | |||
Balance at beginning of period | $ 2,343 | $ 2,032 | $ 1,977 |
Other comprehensive income before reclassifications | 11 | 26 | (18) |
Reclassification adjustments from accumulated other comprehensive loss | (4) | (9) | (9) |
Balance at end of period | 2,406 | 2,343 | 2,032 |
Unrealized Gains (Losses) Available-for-Sale Securities | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance at beginning of period | (3) | (9) | 12 |
Other comprehensive income before reclassifications | 8 | 11 | (12) |
Reclassification adjustments from accumulated other comprehensive loss | (4) | (5) | (9) |
Balance at end of period | 1 | (3) | (9) |
Retirement Plan Liabilities Adjustments | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance at beginning of period | (4) | (19) | (13) |
Other comprehensive income before reclassifications | 3 | 15 | (6) |
Reclassification adjustments from accumulated other comprehensive loss | 0 | 0 | 0 |
Balance at end of period | (1) | (4) | (19) |
Foreign Currency Translation Adjustments | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance at beginning of period | 0 | 4 | 4 |
Other comprehensive income before reclassifications | 0 | 0 | 0 |
Reclassification adjustments from accumulated other comprehensive loss | 0 | (4) | 0 |
Balance at end of period | 0 | 0 | 4 |
Accumulated Other Comprehensive Income (Loss) | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance at beginning of period | (7) | (24) | 3 |
Balance at end of period | $ 0 | $ (7) | $ (24) |
Accumulated Other Comprehens100
Accumulated Other Comprehensive Income (Loss) - Reclassification Adjustments (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification adjustments from accumulated other comprehensive income (loss) | |||
Reclassification from accumulated other comprehensive income (loss), net of taxes | $ 4 | $ 9 | $ 9 |
Unrealized Gains (Losses) Available-for-Sale Securities | |||
Reclassification adjustments from accumulated other comprehensive income (loss) | |||
Reclassification from accumulated other comprehensive income (loss), before taxes | 7 | 8 | 14 |
Income tax effect | 3 | 3 | 5 |
Reclassification from accumulated other comprehensive income (loss), net of taxes | 4 | 5 | 9 |
Foreign Currency Translation Adjustments | |||
Reclassification adjustments from accumulated other comprehensive income (loss) | |||
Reclassification from accumulated other comprehensive income (loss), net of taxes | $ 0 | $ 4 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
Income before income tax expense - U.S. operations | $ 193 | $ 347 | $ 152 | ||||||||
Income (loss) before income tax expense (benefit) - foreign operations | 0 | (1) | 7 | ||||||||
Income before income tax expense | $ 69 | $ 68 | $ 13 | $ 43 | $ 45 | $ 33 | $ 19 | $ 249 | 193 | 346 | 159 |
Current: | |||||||||||
Federal | 167 | 181 | 63 | ||||||||
Foreign | 0 | 0 | 0 | ||||||||
State | 14 | 15 | 5 | ||||||||
Total current | 181 | 196 | 68 | ||||||||
Deferred: | |||||||||||
Federal | (77) | (77) | (46) | ||||||||
Foreign | 0 | 0 | 0 | ||||||||
State | (5) | (6) | (4) | ||||||||
Total deferred | (82) | (83) | (50) | ||||||||
Provision for (benefit from) income taxes | 48 | $ 30 | $ 5 | 16 | 12 | $ 10 | $ 6 | 85 | 99 | 113 | 18 |
Foreign income tax expense, threshold for disclosure | $ 1 | $ 1 | $ 1 | ||||||||
Reconciliation of the statutory federal income tax rate to the effective tax rate | |||||||||||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% | ||||||||
Impact of Tax Act | 11.81% | 0.00% | 0.00% | ||||||||
State income taxes, net of federal | 2.84% | 1.66% | 0.23% | ||||||||
Excess tax benefit on share-based compensation | (0.03%) | (0.20%) | 0.00% | ||||||||
Non-controlling interests | 0.00% | (2.86%) | (27.91%) | ||||||||
Tax impact of United Kingdom subsidiary liquidation | 0.00% | (0.62%) | 0.00% | ||||||||
Nondeductible compensation | 0.00% | 0.00% | 3.39% | ||||||||
Other, net | 1.61% | (0.22%) | 0.41% | ||||||||
Effective income tax rate | 51.23% | 32.76% | 11.12% | ||||||||
Reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax obligation | |||||||||||
Balance at beginning of year | $ 11 | $ 9 | $ 11 | $ 9 | $ 4 | ||||||
Increases in tax positions for current years | 1 | 2 | 4 | ||||||||
Lapse in statute of limitations | (1) | 0 | 0 | ||||||||
Increases in tax positions for prior years | 0 | 0 | 4 | ||||||||
Decreases in tax positions for prior years | 0 | 0 | (2) | ||||||||
Settlements with tax authorities | 0 | 0 | (1) | ||||||||
Balance at end of year | $ 11 | $ 11 | $ 11 | $ 11 | $ 9 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details 2) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Allowance for loan losses | $ 51 | $ 77 |
Mark-to-market | 55 | 55 |
State taxes, net of federal | 39 | 27 |
Pension/employee benefits | 5 | 13 |
Legal and warranty reserve | 2 | 6 |
Federal and foreign net operating losses and tax attributes | 1 | 3 |
Other | 0 | 2 |
Total | 153 | 183 |
Deferred tax liabilities: | ||
Debt fair value adjustment | 54 | 118 |
Insurance reserves | 14 | 14 |
Discount - debt exchange | 11 | 16 |
Other intangible assets | 3 | 5 |
Fixed assets | 2 | 0 |
Impact of tax accounting method change | 0 | 38 |
Other | 8 | 5 |
Total | 92 | 196 |
Net deferred tax assets (liabilities) before valuation allowance | 61 | (13) |
Valuation allowance | (37) | (29) |
Deferred Tax Assets, Net of Valuation Allowance | $ 24 | |
Net deferred tax assets (liabilities) | $ (42) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income taxes | |||
Undistributed earnings of foreign subsidiaries | $ 0 | ||
Variances from the statutory federal income tax rate, noncontrolling interest income (loss) | 0.00% | (2.86%) | (27.91%) |
Impact of Tax Act | 11.81% | 0.00% | 0.00% |
Tax Cuts and Jobs of 2017, income tax expense | $ 23,000,000 | ||
State operating loss carryforward | 630,000,000 | $ 610,000,000 | |
Valuation allowance | 37,000,000 | 29,000,000 | |
State | |||
Income taxes | |||
Valuation allowance | $ 36,000,000 | $ 26,000,000 |
Lease Commitments, Rent Expe104
Lease Commitments, Rent Expense, and Contingent Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Annual rental commitments for leased office space, automobiles and information technology equipment accounted for as operating leases | |||
2,018 | $ 16 | ||
2,019 | 12 | ||
2,020 | 8 | ||
2,021 | 5 | ||
2,022 | 2 | ||
2023 and thereafter | 0 | ||
Total | 43 | ||
Rent expense | $ 28 | $ 28 | $ 28 |
Lease Commitments, Rent Expe105
Lease Commitments, Rent Expense, and Contingent Liabilities Sales Recourse Obligations (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)request | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Loss Contingencies [Line Items] | |||
Number of material recourse requests with loss exposure | request | 0 | ||
Finance Receivables Reserve for Sales Recourse Obligations [Roll Forward] | |||
Balance at beginning of period | $ 13 | $ 15 | $ 24 |
Recourse losses | 0 | 0 | (2) |
Provision for recourse obligations, net of recoveries | (6) | (2) | (7) |
Balance at end of period | 7 | $ 13 | $ 15 |
Real Estate Loans | |||
Loss Contingencies [Line Items] | |||
Reserve for sale recourse obligations related to finance receivables sold | $ 7 |
Benefit Plans (Details)
Benefit Plans (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Springleaf Financial Services Retirement Plan, Springleaf Financial Services Excess Retirement Income Plan, and Supplemental Executive Retirement Income Plan | ||
Benefit Plans | ||
Projected net pension obligation | $ 25,000 | |
CommoLoco Retirement Plan | ||
Benefit Plans | ||
Projected net pension obligation | $ (5,000) | $ 6,000 |
Minimum age for eligibility to participate in plan | 21 years | |
Requisite continuous service period for eligibility to participate in plan | 1 year | |
Fair value of plan assets | $ 12,000 | |
Projected benefit obligation | $ 17,000 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | May 25, 2016 | Oct. 16, 2013 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
SHARE-BASED COMPENSATION | |||||
Unrecognized compensation expense | $ 0 | ||||
Employee service share-based compensation, tax benefit from exercise of stock options | $ 1,000,000 | $ 1,000,000 | |||
Service-Based Awards [Member] | |||||
SHARE-BASED COMPENSATION | |||||
Weighted average grant date fair value (in USD per share) | $ 27.85 | $ 26.14 | $ 47.44 | ||
Fair value of vested shares | $ 18,000,000 | $ 10,000,000 | $ 7,000,000 | ||
Restricted Stock Units | |||||
SHARE-BASED COMPENSATION | |||||
Vesting period of award without rights | 4 years 2 months 12 days | ||||
Weighted average grant date fair value (in USD per share) | $ 27.85 | ||||
Granted (in shares) | 407,184 | ||||
Vested (in shares) | 575,322 | ||||
Share-based compensation expense | $ 2,000,000 | $ 2,000,000 | |||
Restricted Stock Awards | |||||
SHARE-BASED COMPENSATION | |||||
Vesting period of award with rights | 3 years | ||||
Performance Shares | |||||
SHARE-BASED COMPENSATION | |||||
Weighted average grant date fair value (in USD per share) | $ 24.98 | $ 34.45 | |||
Granted (in shares) | 90,072 | 0 | |||
Fair value of vested shares | $ 2,000,000 | $ 4,000,000 | |||
Vested (in shares) | 92,000 | 0 | |||
Incentive Units | |||||
SHARE-BASED COMPENSATION | |||||
Share-based compensation expense | $ 0 | $ 0 | $ 15,000,000 | ||
Omnibus Incentive Plan | |||||
SHARE-BASED COMPENSATION | |||||
Number of shares of common stock authorized (in shares) | 13,199,096 | ||||
Number of shares subject to outstanding equity awards (in shares) | 1,411,236 | ||||
Percentage of number of outstanding shares over number of shares reserved and available for issuance by which number of shares reserved is adjusted, more than | 10.00% | ||||
Non-Employee Directors | Omnibus Incentive Plan | |||||
Share-Based Compensation Plan and Restricted Stock Units and Awards | |||||
Maximum cash and equity-based awards to non-employee directors per calendar year | $ 500,000 | ||||
Minimum | |||||
SHARE-BASED COMPENSATION | |||||
Vesting period of award with rights | 2 years |
Share-Based Compensation - Serv
Share-Based Compensation - Service-based Activity (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Weighted Average Grant Date Fair Value | |
Vested (in USD per share) | $ 24.78 |
Restricted Stock Units | |
Number of Shares | |
Unvested shares at beginning of period (in shares) | shares | 1,382,920 |
Granted (in shares) | shares | 407,184 |
Vested (in shares) | shares | (575,322) |
Forfeited (in shares) | shares | (73,172) |
Unvested shares at end of period (in shares) | shares | 1,141,610 |
Weighted Average Grant Date Fair Value | |
Weighted average grant date fair value, beginning of period (in USD per share) | $ 35.86 |
Granted (in USD per share) | 27.85 |
Vested (in USD per share) | 31.86 |
Forfeited (in USD per share) | 38.10 |
Weighted average grant date fair value, end of period (in USD per share) | $ 34.87 |
Weighted Average Remaining Term (in Years) | 1 year 10 months 28 days |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Based Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted Average Grant Date Fair Value | |||
Vested (in USD per share) | $ 24.78 | ||
Performance Shares | |||
Number of Shares | |||
Unvested shares at beginning of period (in shares) | 407,948 | ||
Granted (in shares) | 90,072 | 0 | |
Vested (in shares) | (92,000) | 0 | |
Forfeited (in shares) | (136,394) | ||
Unvested shares at end of period (in shares) | 269,626 | 407,948 | |
Weighted Average Grant Date Fair Value | |||
Weighted average grant date fair value, beginning of period (in USD per share) | $ 25.94 | ||
Granted (in USD per share) | 24.98 | $ 34.45 | |
Forfeited (in USD per share) | 25.70 | ||
Weighted average grant date fair value, end of period (in USD per share) | $ 26.14 | $ 25.94 | |
Weighted Average Remaining Term (in Years) | 3 years 9 months 11 days |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($)state | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segmentstate | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Information about segments as well as reconciliations to consolidated financial statement amounts | |||||||||||
Number of operating segments | segment | 2 | ||||||||||
Interest income | $ 328 | $ 310 | $ 306 | $ 297 | $ 303 | $ 303 | $ 313 | $ 431 | $ 1,241 | $ 1,350 | $ 1,657 |
Interest expense | 128 | 133 | 129 | 127 | 127 | 135 | 138 | 156 | 517 | 556 | 667 |
Provision for finance receivable losses | 92 | 70 | 91 | 71 | 66 | 87 | 85 | 91 | 324 | 329 | 339 |
Net interest income after provision for finance receivable losses | 400 | 465 | 651 | ||||||||
Net gain on sale of SpringCastle interests | 167 | 0 | 167 | 0 | |||||||
Other revenues | 407 | 407 | 243 | ||||||||
Other expenses | 138 | 154 | 160 | 162 | 170 | 155 | 177 | 191 | 614 | 693 | 735 |
Income before income tax expense | 69 | $ 68 | $ 13 | $ 43 | 45 | $ 33 | $ 19 | $ 249 | 193 | 346 | 159 |
Income before provision for income taxes attributable to non-controlling interests | 28 | 127 | |||||||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | 318 | 32 | |||||||||
Assets (c) | $ 10,824 | 9,719 | $ 10,824 | 9,719 | 12,188 | ||||||
Consumer and Insurance | |||||||||||
Information about segments as well as reconciliations to consolidated financial statement amounts | |||||||||||
Number of states in which entity operates | state | 28 | 28 | |||||||||
Operating Segments | Consumer and Insurance | |||||||||||
Information about segments as well as reconciliations to consolidated financial statement amounts | |||||||||||
Interest income | $ 1,213 | 1,192 | 1,115 | ||||||||
Interest expense | 439 | 402 | 190 | ||||||||
Provision for finance receivable losses | 316 | 305 | 255 | ||||||||
Net interest income after provision for finance receivable losses | 458 | 485 | 670 | ||||||||
Net gain on sale of SpringCastle interests | 0 | ||||||||||
Other revenues | 169 | 219 | 212 | ||||||||
Other expenses | 601 | 648 | 622 | ||||||||
Income before income tax expense | 26 | 56 | 260 | ||||||||
Income before provision for income taxes attributable to non-controlling interests | 0 | ||||||||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | 56 | 260 | |||||||||
Assets (c) | $ 5,107 | 5,494 | 5,107 | 5,494 | 5,632 | ||||||
Operating Segments | Acquisitions and Servicing | |||||||||||
Information about segments as well as reconciliations to consolidated financial statement amounts | |||||||||||
Interest income | 0 | 102 | 455 | ||||||||
Interest expense | 20 | 87 | |||||||||
Provision for finance receivable losses | 14 | 68 | |||||||||
Net interest income after provision for finance receivable losses | 0 | 68 | 300 | ||||||||
Net gain on sale of SpringCastle interests | 167 | ||||||||||
Other revenues | 0 | 5 | |||||||||
Other expenses | 2 | 16 | 61 | ||||||||
Income before income tax expense | (2) | 219 | 244 | ||||||||
Income before provision for income taxes attributable to non-controlling interests | 28 | 127 | |||||||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | 191 | 117 | |||||||||
Assets (c) | 1,784 | ||||||||||
Other | |||||||||||
Information about segments as well as reconciliations to consolidated financial statement amounts | |||||||||||
Interest income | 23 | 51 | 76 | ||||||||
Interest expense | 21 | 52 | 268 | ||||||||
Provision for finance receivable losses | 7 | 6 | (1) | ||||||||
Net interest income after provision for finance receivable losses | (5) | (7) | (191) | ||||||||
Net gain on sale of SpringCastle interests | 0 | ||||||||||
Other revenues | 256 | 179 | 46 | ||||||||
Other expenses | 11 | 29 | 50 | ||||||||
Income before income tax expense | 240 | 143 | (195) | ||||||||
Income before provision for income taxes attributable to non-controlling interests | 0 | 0 | |||||||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | 143 | (195) | |||||||||
Assets (c) | 5,727 | 4,293 | 5,727 | 4,293 | 4,830 | ||||||
Eliminations | |||||||||||
Information about segments as well as reconciliations to consolidated financial statement amounts | |||||||||||
Interest income | 0 | 0 | 0 | ||||||||
Interest expense | 0 | (5) | |||||||||
Provision for finance receivable losses | 0 | ||||||||||
Net interest income after provision for finance receivable losses | 0 | 0 | 5 | ||||||||
Net gain on sale of SpringCastle interests | 0 | ||||||||||
Other revenues | 0 | 0 | (5) | ||||||||
Other expenses | 0 | 0 | 0 | ||||||||
Income before income tax expense | 0 | 0 | 0 | ||||||||
Income before provision for income taxes attributable to non-controlling interests | 0 | 0 | |||||||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | 0 | 0 | |||||||||
Assets (c) | 0 | 0 | 0 | ||||||||
Segment to GAAP Adjustment | |||||||||||
Information about segments as well as reconciliations to consolidated financial statement amounts | |||||||||||
Interest income | 5 | 5 | 11 | ||||||||
Interest expense | 57 | 82 | 127 | ||||||||
Provision for finance receivable losses | 1 | 4 | 17 | ||||||||
Net interest income after provision for finance receivable losses | (53) | (81) | (133) | ||||||||
Net gain on sale of SpringCastle interests | 0 | ||||||||||
Other revenues | (18) | 9 | (15) | ||||||||
Other expenses | 0 | 0 | 2 | ||||||||
Income before income tax expense | (71) | (72) | (150) | ||||||||
Income before provision for income taxes attributable to non-controlling interests | 0 | 0 | |||||||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | (72) | (150) | |||||||||
Assets (c) | $ (10) | $ (68) | $ (10) | $ (68) | $ (58) |
Segment Information - Allocatio
Segment Information - Allocation of Revenues and Expenses (Details) - USD ($) $ in Millions | 2 Months Ended | 12 Months Ended | 16 Months Ended |
Dec. 31, 2015 | Dec. 31, 2015 | Oct. 31, 2015 | |
Consumer and Insurance | |||
Segment Reporting Information [Line Items] | |||
Hypothetical increase (decrease) in interest expense due to change in debt allocation percent | $ 208 | ||
Other Segments | |||
Segment Reporting Information [Line Items] | |||
Unsecured debt allocation percent | 100.00% | 100.00% | |
Other | |||
Segment Reporting Information [Line Items] | |||
Hypothetical increase (decrease) in interest expense due to change in debt allocation percent | $ (208) | ||
Total Average Unsecured Debt Allocation | Consumer and Insurance | |||
Segment Reporting Information [Line Items] | |||
Unsecured debt allocation percent | 83.00% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value and Carrying Values of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | |||
Investment securities | $ 536 | $ 582 | |
Notes receivable from parent and affiliates | 4,488 | 3,723 | |
Restricted cash and restricted cash equivalents | 169 | 227 | $ 295 |
Liabilities | |||
Long-term debt | 7,865 | 6,837 | |
Total Fair Value | |||
Assets | |||
Cash equivalents in securities | 244 | 240 | |
Investment securities | 536 | 582 | |
Net finance receivables, less allowance for finance receivable losses | 5,710 | 5,122 | |
Finance receivables held for sale | 139 | 159 | |
Notes receivable from parent and affiliates | 4,488 | 3,723 | |
Restricted cash and restricted cash equivalents | 169 | 227 | |
Other assets | 23 | 75 | |
Liabilities | |||
Long-term debt | 8,369 | 7,308 | |
Other liabilities | 110 | 13 | |
Total Carrying Value | |||
Assets | |||
Cash equivalents in securities | 244 | 240 | |
Investment securities | 536 | 582 | |
Net finance receivables, less allowance for finance receivable losses | 5,202 | 4,755 | |
Finance receivables held for sale | 132 | 153 | |
Notes receivable from parent and affiliates | 4,488 | 3,723 | |
Restricted cash and restricted cash equivalents | 169 | 227 | |
Other assets | 23 | 77 | |
Liabilities | |||
Long-term debt | 7,865 | 6,837 | |
Other liabilities | 110 | 13 | |
Level 1 | |||
Assets | |||
Cash equivalents in securities | 240 | 198 | |
Investment securities | 0 | 0 | |
Net finance receivables, less allowance for finance receivable losses | 0 | 0 | |
Finance receivables held for sale | 0 | 0 | |
Notes receivable from parent and affiliates | 0 | 0 | |
Restricted cash and restricted cash equivalents | 169 | 227 | |
Other assets | 0 | 0 | |
Liabilities | |||
Long-term debt | 0 | 0 | |
Other liabilities | 0 | 0 | |
Level 2 | |||
Assets | |||
Cash equivalents in securities | 4 | 42 | |
Investment securities | 534 | 580 | |
Net finance receivables, less allowance for finance receivable losses | 0 | 0 | |
Finance receivables held for sale | 0 | 0 | |
Notes receivable from parent and affiliates | 4,488 | 3,723 | |
Restricted cash and restricted cash equivalents | 0 | 0 | |
Other assets | 11 | 41 | |
Liabilities | |||
Long-term debt | 8,369 | 7,308 | |
Other liabilities | 110 | 13 | |
Level 3 | |||
Assets | |||
Cash equivalents in securities | 0 | 0 | |
Investment securities | 2 | 2 | |
Net finance receivables, less allowance for finance receivable losses | 5,710 | 5,122 | |
Finance receivables held for sale | 139 | 159 | |
Notes receivable from parent and affiliates | 0 | 0 | |
Restricted cash and restricted cash equivalents | 0 | 0 | |
Other assets | 12 | 34 | |
Liabilities | |||
Long-term debt | 0 | 0 | |
Other liabilities | $ 0 | $ 0 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value on Recurring Basis (Details 2) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Available-for-sale securities | $ 532 | $ 578 |
Other securities | 3 | 3 |
Total investment securities | 536 | 582 |
Estimate of Fair Value Measurement | ||
Assets | ||
Cash equivalents in securities | 244 | 240 |
Total investment securities | 536 | 582 |
Investment securities: | ||
Assets | ||
Available-for-sale securities | 526 | 571 |
U.S. government and government sponsored entities | ||
Assets | ||
Available-for-sale securities | 17 | 13 |
Obligations of states, municipalities, and political subdivisions | ||
Assets | ||
Available-for-sale securities | 70 | 82 |
Corporate debt | ||
Assets | ||
Available-for-sale securities | 324 | 353 |
RMBS | ||
Assets | ||
Available-for-sale securities | 35 | 39 |
CMBS | ||
Assets | ||
Available-for-sale securities | 23 | 33 |
CDO/ABS | ||
Assets | ||
Available-for-sale securities | 53 | 46 |
Preferred stocks | ||
Assets | ||
Available-for-sale securities | 5 | 6 |
Other long-term investments | ||
Assets | ||
Available-for-sale securities | 1 | 1 |
Common stocks | Not Carried at Fair Value | ||
Assets | ||
Available-for-sale securities | 1 | 1 |
Level 1 | ||
Assets | ||
Cash equivalents in securities | 240 | 198 |
Total investment securities | 0 | 0 |
Level 2 | ||
Assets | ||
Cash equivalents in securities | 4 | 42 |
Total investment securities | 534 | 580 |
Level 3 | ||
Assets | ||
Cash equivalents in securities | 0 | 0 |
Total investment securities | 2 | 2 |
Recurring basis | Estimate of Fair Value Measurement | ||
Assets | ||
Cash equivalents in mutual funds | 142 | 119 |
Cash equivalents in securities | 42 | |
Available-for-sale securities | 532 | 578 |
Other securities | 3 | 3 |
Total investment securities | 535 | 581 |
Restricted cash in mutual funds | 159 | 212 |
Total | 840 | 954 |
Recurring basis | Investment securities: | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 526 | 571 |
Recurring basis | U.S. government and government sponsored entities | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 17 | 13 |
Recurring basis | Obligations of states, municipalities, and political subdivisions | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 70 | 82 |
Recurring basis | Non-U.S. government and government sponsored entities | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 4 | 5 |
Recurring basis | Corporate debt | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 324 | 353 |
Other securities | 3 | 2 |
Recurring basis | RMBS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 35 | 39 |
Recurring basis | CMBS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 23 | 33 |
Other securities | 1 | |
Recurring basis | CDO/ABS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 53 | 46 |
Recurring basis | Preferred stocks | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 5 | 6 |
Recurring basis | Other long-term investments | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 1 | 1 |
Recurring basis | Cash equivalents in securities | Estimate of Fair Value Measurement | ||
Assets | ||
Cash equivalents in securities | 4 | |
Recurring basis | Level 1 | Estimate of Fair Value Measurement | ||
Assets | ||
Cash equivalents in mutual funds | 142 | 119 |
Cash equivalents in securities | 0 | |
Available-for-sale securities | 0 | 0 |
Other securities | 0 | 0 |
Total investment securities | 0 | 0 |
Restricted cash in mutual funds | 159 | 212 |
Total | 301 | 331 |
Recurring basis | Level 1 | Investment securities: | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 1 | U.S. government and government sponsored entities | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 1 | Obligations of states, municipalities, and political subdivisions | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 1 | Non-U.S. government and government sponsored entities | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 1 | Corporate debt | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Other securities | 0 | 0 |
Recurring basis | Level 1 | RMBS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 1 | CMBS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Other securities | 0 | |
Recurring basis | Level 1 | CDO/ABS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 1 | Preferred stocks | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 1 | Other long-term investments | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 1 | Cash equivalents in securities | Estimate of Fair Value Measurement | ||
Assets | ||
Cash equivalents in securities | 0 | |
Recurring basis | Level 2 | Estimate of Fair Value Measurement | ||
Assets | ||
Cash equivalents in mutual funds | 0 | 0 |
Cash equivalents in securities | 42 | |
Available-for-sale securities | 531 | 577 |
Other securities | 3 | 3 |
Total investment securities | 534 | 580 |
Restricted cash in mutual funds | 0 | 0 |
Total | 538 | 622 |
Recurring basis | Level 2 | Investment securities: | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 526 | 571 |
Recurring basis | Level 2 | U.S. government and government sponsored entities | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 17 | 13 |
Recurring basis | Level 2 | Obligations of states, municipalities, and political subdivisions | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 70 | 82 |
Recurring basis | Level 2 | Non-U.S. government and government sponsored entities | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 4 | 5 |
Recurring basis | Level 2 | Corporate debt | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 324 | 353 |
Other securities | 3 | 2 |
Recurring basis | Level 2 | RMBS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 35 | 39 |
Recurring basis | Level 2 | CMBS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 23 | 33 |
Other securities | 1 | |
Recurring basis | Level 2 | CDO/ABS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 53 | 46 |
Recurring basis | Level 2 | Preferred stocks | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 5 | 6 |
Recurring basis | Level 2 | Other long-term investments | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 2 | Cash equivalents in securities | Estimate of Fair Value Measurement | ||
Assets | ||
Cash equivalents in securities | 4 | |
Recurring basis | Level 3 | Estimate of Fair Value Measurement | ||
Assets | ||
Cash equivalents in mutual funds | 0 | 0 |
Cash equivalents in securities | 0 | |
Available-for-sale securities | 1 | 1 |
Other securities | 0 | |
Total investment securities | 1 | 1 |
Restricted cash in mutual funds | 0 | 0 |
Total | 1 | 1 |
Recurring basis | Level 3 | Investment securities: | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 3 | U.S. government and government sponsored entities | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 3 | Obligations of states, municipalities, and political subdivisions | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 3 | Non-U.S. government and government sponsored entities | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 3 | Corporate debt | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Other securities | 0 | 0 |
Recurring basis | Level 3 | RMBS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 3 | CMBS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Other securities | 0 | |
Recurring basis | Level 3 | CDO/ABS | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Other securities | 0 | |
Recurring basis | Level 3 | Preferred stocks | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 0 | 0 |
Recurring basis | Level 3 | Other long-term investments | Estimate of Fair Value Measurement | ||
Assets | ||
Available-for-sale securities | 1 | $ 1 |
Recurring basis | Level 3 | Cash equivalents in securities | Estimate of Fair Value Measurement | ||
Assets | ||
Cash equivalents in securities | $ 0 |
Fair Value Measurements - Fa114
Fair Value Measurements - Fair Value Measured on Non-Recurring Basis (Details 5) - Non-recurring basis - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | $ 164 | |
Impairment Charges | 6 | |
Real estate owned | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | $ 6 | 5 |
Impairment Charges | 3 | 2 |
Finance receivables held for sale | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | 159 | |
Impairment Charges | 4 | |
Level 1 | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | 0 | |
Level 1 | Real estate owned | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | 0 | 0 |
Level 1 | Finance receivables held for sale | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | 0 | |
Level 2 | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | 0 | |
Level 2 | Real estate owned | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | 0 | 0 |
Level 2 | Finance receivables held for sale | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | 0 | |
Level 3 | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | 164 | |
Level 3 | Real estate owned | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | $ 6 | 5 |
Level 3 | Finance receivables held for sale | ||
Assets measured at fair value on a non-recurring basis | ||
Assets at fair value | $ 159 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | Dec. 31, 2017USD ($) |
Fair Value Measurements [Abstract] | |
Debt carried at fair value | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - OneMain - Scenario, Forecast - Apollo-Värde Group | 3 Months Ended |
Jun. 30, 2018shares | |
Subsequent Event [Line Items] | |
Sale of stock, number of shares issued in transaction | 54,937,500 |
Sale of stock, percentage of ownership after transaction | 40.60% |
Selected Quarterly Financial117
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest income | $ 328 | $ 310 | $ 306 | $ 297 | $ 303 | $ 303 | $ 313 | $ 431 | $ 1,241 | $ 1,350 | $ 1,657 |
Interest expense | 128 | 133 | 129 | 127 | 127 | 135 | 138 | 156 | 517 | 556 | 667 |
Provision for finance receivable losses | 92 | 70 | 91 | 71 | 66 | 87 | 85 | 91 | 324 | 329 | 339 |
Other revenues | 99 | 115 | 87 | 106 | 105 | 107 | 106 | 256 | 407 | 574 | 243 |
Total other expenses | 138 | 154 | 160 | 162 | 170 | 155 | 177 | 191 | 614 | 693 | 735 |
Income before income tax expense | 69 | 68 | 13 | 43 | 45 | 33 | 19 | 249 | 193 | 346 | 159 |
Income tax expense | 48 | 30 | 5 | 16 | 12 | 10 | 6 | 85 | 99 | 113 | 18 |
Net income | $ 21 | $ 38 | $ 8 | $ 27 | 33 | 23 | 13 | 164 | 94 | 233 | 141 |
Net income attributable to non-controlling interests | 0 | 0 | 0 | 28 | 0 | 28 | 127 | ||||
Net income attributable to Springleaf Finance Corporation | $ 33 | $ 23 | $ 13 | $ 136 | $ 94 | $ 205 | $ 14 |